How can you make your money work for you? What does your ideal financial lifestyle look like? Do you want to maximize your time or financial return on investing?l
In this podcast episode, Joe Sanok speaks with Justin Donald about how therapists can begin lifestyle investing.
In This Podcast
- Do you want to start lifestyle investing?
- What are the first steps to lifestyle investing?
- Lifestyle investment tips for therapists
- Justin’s advice to private practitioners
Do you want to start lifestyle investing?
I think that someone needs to [first] have clarity on what their ideal lifestyle looks like because if someone has built a business or has a practice that’s requiring a lot of hours from them, I think the last thing they’re going to want to do is to buy or invest in something that is going to require a lot more hours. (Justin Donald)
Figure out what you want your ideal lifestyle to look like.
How do you want to spend your time? How is your current lifestyle keeping you from creating the one you want?
If you are constantly working, then you may wish to sacrifice the quantity of the return on your investments to save some time.
You think you own the business when in reality the business owns you. How can you get back to you owning it and spending time on the things you want [in] the volume you want? (Justin Donald)
How much time do you have, and how much return on your investment do you want to make?
What are the first steps to lifestyle investing?
There are usually two main routes to take:
- Do you want to maximize your financial return?
- Do you want to maximize your time return?
Be intentional with the life that you want for yourself and for your family.
Instead of living through reaction to what happens in life, prepare, make plans, and find a way to create the lifestyle that you desire.
Get clear on the lifestyle that you want because it will help you decide which investment plan is best suited to helping you achieve these goals.
Lifestyle investment tips for therapists
1 – Spend some time understanding the principles behind investment before you trust someone else to handle your investments for you.
2 – Explore other strategies for investing besides the standard stock market.
3 – Diversify your investments to maximize both success and your possibilities of return.
4 – Find a way to have assets that produce income for you so that you can enjoy your time how you want to.
I think what’s best for people is to really learn and understand that you want to get your money working for you. At a certain point in your life, time is the thing that produces income. But if you want to maximize income, time shouldn’t produce income, it should produce enjoyment. So how do you get other assets and capital to produce income, so you can spend your time as you want? (Justin Donald)
Justin’s advice to private practitioners
Carve time out for yourself to get clear on where you want to go in life and be disciplined to find the people that can help you get there.
Books mentioned in this episode:
Useful Links mentioned in this episode:
- Use promo code ‘JOE’ to get three free months to try out TherapyNotes, no strings attached
- Connect with Justin on Facebook, Twitter, Instagram, LinkedIn, or Youtube.
- Visit Justin’s website, listen to The Lifestyle Investor Podcast and enroll in Justin’s Course.
- Check out the Bigger Pockets Podcast
- Get this Free 28-Step Checklist for starting a practice!
- Take a Practice of the Practice E-course and access their many free resources
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- Apply to work with us — a decision-making matrix for your next steps
Meet Joe Sanok
Joe Sanok helps counselors to create thriving practices that are the envy of other counselors. He has helped counselors to grow their businesses by 50-500% and is proud of all the private practice owners that are growing their income, influence, and impact on the world. Click here to explore consulting with Joe.
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[JOE SANOK] This is the Practice of the Practice podcast with Joe Sanok, session number 695.
Well, welcome to the Practice of the Practice podcast. I’m Joe Sanok, your host, and I am so excited to be hanging out with you today. If you are brand new to this show, maybe you’re just starting a practice, we have a totally free checklist to give you what you need to start a practice. It’s a 28-step checklist all around starting a practice. So if you want to grab that head on over to practiceofthepractice.com/start, and you’ll get that free checklist, and then you’re going to get weekly emails that walk you through exactly what you need to do at the startup phase. If you’re growing a practice, maybe you’re starting a group practice, you’ve got an established solo practice and you are rocking it out and you want to get to that next level, head on over to practiceofthepractice.com/grow and you can get weekly emails that will walk you through exactly what you need to do to grow your practice.
For me, thinking through my own lifestyle, the way I view time, the way I view my energy and the way I view my money are all things that I care deeply about, being a single dad, being someone that wants to hang out with my kids, I’ve got primary custody of my kids and I want to be there for them. Like just last night I got to be at my daughter’s volleyball game. She’s in sixth grade and it’s just so hilarious to see these brand new volleyball players. if they get it over the net, we’re all just cheering. If there’s any sort of volley and if it makes it back over the net, the crowd just goes wild.
To be able to have these things in my life, have nothing to do with business and just fill me up is just something that I believe in. I want to be a good dad. I want to be a good friend. I want to be a good member of the community. I want to think about social issues and my privilege to be able to give back in ways that are different than maybe I even thought about five or 10 years ago. That’s why I’m so excited to have Justin Donald today on this show, because Justin is leading people to realize they can achieve their investment dreams and financial freedom.
Entrepreneur Magazine called Justin Donald, the Warren Buffet of lifestyle investing. He is a master at low risk cash flow investing specializing in simplifying complex financial strategies, structuring deals, and consistently producing profitable results with disciplined investment systems. Justin, welcome to the Practice of the Practice podcast.
[JUSTIN DONALD] Hey Joe, great to be here. Thanks for having me on.
[JOE] Yes, what really I love is when I have guests on that I knew first in person and got to know in person, well before I have them on the show. You and I met through John Roman’s Front Row Dads. We’ve been in the keys together and I took a shower at your house after playing volleyball in Austin and it’s just amazing to have known you as a dad and talking those things. We really never even talked much business. So to have you on the show now, I love when it’s a brother from another mother.
[JUSTIN] I think that always works the best when you’ve got some sort of relationship and it doesn’t always work that way in the podcast world. But I think even for me on my own show, I love when there’s depth of relationship first, because I feel like you can unlock so much more. You don’t have to spend the time getting to know people because you already know them. You know their heart, you probably wouldn’t have them on the show if you didn’t believe them or trust them in some way, shape or form. So I’m with you. I think it’s so much more fun to do shows with people you really know well.
[JUSTIN] The backstory is I’ve always been pretty intrigued and just curious about finances, investing. I think at a certain point in college, I went to the university of Illinois and really had just this amazing opportunity to take some classes from some adjunct professors that majored in or I mean really ran their own businesses in a certain I guess sector or specialty, if you will. So I had like an arbitrage strategy course where we actually invested real money in the stock market with mergers and spinoffs where we could partner with our professor and make 50, 50 shared returns on anything that we found that he wanted to go in on.
We had I took a bunch of real estate courses with largest real estate owner in the Champagne Urbana area. I took wealth management classes. I actually was part of a class where they selected 20 people out of the business school to manage a million dollars of real money for an alumni. So during my college years, I was actually part of a group that would buy and sell stocks, trying to get a good return for our donor, which was really neat.
[JOE] Wow. Did, did you guys make money for them?
[JUSTIN] Yes, we did really well. I can’t say that we had this smashing return, but I mean, we made him money. We didn’t lose money.
[JOE] That’s great when you have a bunch of college students running your money. Wow, so then you leave college and what did business look like after that because a lot of my audience, we had zero business skills. So even just thinking about being a 20 something, having that opportunity that just must have set you up differently than a lot of us therapists types. What’d you do after college?
[JUSTIN] Well, it’s interesting. I wanted to get into real estate, but I felt like there’s this big barrier to entry in real estate because I didn’t have a lot of money. I worked really hard to pay my way through college and I’m actually the first person in my family, extended family to graduate from college. It was, so that in itself was a big deal and I had to fund the vast majority of that and figure out a way to do that working with Cutco. So I sold the Cutco product line during my college years.
So I wanted to get into real estate, but I didn’t have the funds to get into real estate. Back then I thought you had to have a lot of money to do real estate. What I know today is that if you have a good deal, the money is the easiest thing to find because there are tons of investors waiting out there that just they have money and they just want the deals. But back then I didn’t realize that. I had a limiting belief and just felt like I couldn’t get in it if I didn’t have the money. So I need to go work hard, make a bunch of money and then invest in real estate. So that’s actually what I did. I started working with Cutco in the capacity of running an office and being a manager with that organization. So I basically built my own company under the umbrella of Cutco that was more of a recruiting and sales company and really refined and created a lot of the programs in my organization that ended up being used nationally and corporately.
[JOE] Wow. So then did you start real estate investing or what did you start investing in and at what age? Because I know, I didn’t really start thinking about investing other than maybe putting some money into like a fidelity something. I had no idea. I ended up losing so much money off of like fees and things like that. I remember my grandma gave me a thousand dollars and said, invest this. It’ll help with your first home. Every year it was like the fees and stuff. It just wasn’t even in the right spots. I had no idea what I was doing. What were you investing in at that time? What did that look like early in your career?
[JUSTIN] Well, early on I did the same thing as you. I invested in the stock market, I had a financial planner, I did qualified plans, I had my Roth IRA. I started investing in Roth IRA when I was 18 years old. So I got a pretty early start, but I learned the just misalignment and manipulation that happens in the financial services industry. I was being told a story that my portfolio was doing better than it really was. Even the statements on there were misleading or it made me think that based on these average rates of return that they put on there, that that’s what I was actually yielding when it was nowhere close to that.
So I had an experience where, and I’m lucky I even checked this. Most people don’t even look, they don’t even know they are, they think that they’re doing the right thing, because it’s the only thing they’ve heard and it’s the engine of information. Wall Street basically want your money more than anyone else and they make money whether you do or not. So their engine is, “Hey, let’s, let’s steer the public to invest in this thing and make it the only thing that they know how.” So they want as much of your money as often as they can get it and for as long as they can keep it. So I just started diving in and I said wait a minute, I just calculated the dollars I put in and the dollars that I have and it looks like I lost money, but my statements say that I made money.
They’re distorting the reality. So that really was frustrating for me and that’s when I knew I just can’t trust this system. A lot of people don’t realize that it’s broken until they go to retire and realize they have nowhere close to what was sold to them as what they would have in retirement years, you know this whole nest egg approach. It just doesn’t work. The 401ks, the qualified plans, the IRAs, it doesn’t work the way that it’s promoted. The returns aren’t what you think they are. There are a lot of hidden fees and I’m telling you that there is total misalignment because people make money. Your financial advisor makes money, even if you don’t. By the way, there are good financial advisors out there, but only 5% of them in the last 15 years, if you track some of these indices and some of these reports that take a look at money managers versus the S and P 500 index, you’ll see that there’s only 5% of money managers and financial planners that actually beat the S and P 500 index.
If you had just put your money into an index and paid the lowest fee possible, you would about perform 95% of the people managing money. So that was my wake up call. It was a very rude awakening. I felt like I got punched in the gut because I was told I was making money when in all reality I had lost money. So I pulled my money out of the stock market and started buying real estate. It’s really funny because I bought a mobile home park and all my friends thought I was crazy. But I had a couple other friends that were buying them and doing really well. So that was my first real estate investment outside of my own condo that I purchased in Lincoln park, in the Chicagoland area. That was a total debacle.
I bought it, tried to turn it into a rental, issue after issue, after issue. So I decided I got to get out of that game and get into many units. So there’s just, if you have an issue and you only own one unit, then it really hampers the cash flow. If you have 50 units and something happens with one, you don’t really feel it. So that was my first start in this world of our alternative investing.
I remember when I heard probably 10 years ago about, it was actually my brother-in-law who married my sister and he was talking about like whole market index funds and how these companies would have thousands of mutual funds and then the only ones they would report on were the ones that did well. So all these ones that didn’t do well, they just took off their books and then they had this other one for five years. We got 15%, 20%, but it’s this numbers game where it really, for the most part, they weren’t beating the market at all. I remember Tony Robbins had a podcast a few years ago and he was talking about how every percent that you give a financial advisor is the equivalent of 10 years of retirement income.
So even just that basic investing of whole market funds, if I do that, but I love to hear people that step outside of the norm for investing. That’s why I’m excited to have you here today because I think there’s things that we just don’t even think about. So you bought this mobile home park. What is like, what did you learn through that? I’m sure there were ups and downs, but take us through how that worked as an investment property.
[JOE] It’s interesting. I learned in my life that when the majority of people are doing one thing, at least in the financial space, I should probably do the opposite because most people are not well informed. Most people aren’t making decisions that are going to benefit them long-term. Most people just do as they’re told and follow the narrative that is out there that the companies with the most money are spending and trying to promote these companies on Wall Street. So when I got into mobile home parks, this first one I looked at I was a little nervous because aesthetically, it was really rough looking.
[JUSTIN] It just, I mean, I had some nights that I woke up in the middle of the night heart pounding, like, what am I doing? Am I going to really like, invest this money in one of these mobile home parks? Am I going to lose all my money? That’s like the emotional side and you know this well, this whole idea of the decisions we make emotionally versus logically. But when I step back and I said, well, let me think about this logically, I’ve got all these other people that are doing it and they’ve had success. So if I just copy what they’re doing, I actually should be fine. So I had to let the logical side of my brain take over and sure enough, that first park that I bought ended up being a great purchase and the income that I made from just that particular park ended up producing as much as my wife was making as a teacher. So she was able to retire and we shortly thereafter had our daughter and she could be a stay at home mom. It was just wonderful.
Plus our schedules didn’t align. My business was really busy in the summer. She had summers off. as far as like breaks were concerned, I worked with at one point a lot of students. So her time off was my hard working time. So buying her time back gave us tons of flexibility as a family for traveling and just doing things together but it was a seamless transition because we covered that income. Then the next park that I bought covered our survival income. So one of the things I did, Joe, is I calculated, what does it cost us just to survive? What is that per month? This is not like lifestyle income. This is truly how do I afford my mortgage, my car payments, my utilities, groceries, whatever, just basic survival needs. What does that look like?
So I bought a park, that second one that together, those combined incomes covered what it cost us to live. I bought a third one that one covered our lifestyle income. So at that point in time we just had to earn, we were living on about $10,000 a month and so this third part covered that. So now life stays the same, no matter whether I work or not. That was a huge epiphany, just this idea that physically I could feel my body just release and relax. Like I don’t have to work. I don’t have to show up to a business or a job or anything like that. I simply can just be, and I can focus, now that I bought my time back, I can actually focus on the things that I want to do, the things that fill me up, that bring me the most joy, use my unique talents that have been given to me and spend time with the people that matter most.
So that was really big, figuring out how to buy my time back and create financial freedom. Because I find that most people are handcuffed to something; they’re handcuffed to their job, they’re handcuffed to security or safety, they’re handcuffed. Maybe they have the golden handcuffs where they’re truly tied to the lifestyle that they’ve built for themselves and they’re accustomed to, and if they step away, then life changes. All these things, I just didn’t want that. I didn’t want to be on a treadmill that someone else built or that I built for myself trying to maybe is this idea to get ahead but at some point it owns you and same thing for business owners.
You might move from being an employee to an employer to owning your business. But I found that most people who start a business do it for freedom, autonomy, more income, but the reality is that business ends up owning them. Maybe the job was like being on a rickety treadmill and your business is a really nice treadmill that has a TV on it and you could take workout classes but it’s still a treadmill. It’s still the rat race. It’s just a better quality rat race, but in some ways you’re even more enslaved, the more you make and the more you can get accustom to and used to.
[JOE] I want to go back to that first park that you bought, because I’ve thought about whether it’s mobile home parks. I’ve heard stories from, I think it’s the deeper pockets podcast, it talks a lot about, or Bigger Pockets Podcast talks a lot about real estate. So they were talking about mobile home parks, they were talking about storage units, those places. I feel like I would have no idea how to even run or operationalize one of those places, but then it’s still business also? So for your learning curve to just learn how to do a new business, what did the first three to six months look like to just learn how to run a mobile home park?
[JUSTIN] Well, I’m a big copycat. So I walked in not knowing how to do anything and I just ask enough questions of people that have done it to get the answers and get some sort of a blueprint. So it’s not like I roll in and I innovate and create all these things. That’s not me. I buy an asset and then I’m asking all the people that do this, all these questions on how to do it; what software do you use? By the way, just having a good software can simplify a lot of that. Do you need like an actual property management company? Well, probably not in this asset class. So then it becomes easier. You learn how to manage things. You can hire someone on site that lives there. So it’s not, the unknown sometimes can be scary and can hold us from, hold us back from doing things. But the reality is it’s not really operationally heavy. So for me, I just said, “Hey, what are the best in class doing? What are the people who are actually good at this doing?” Let me connect with them, let me become friends with them let me glean from them. Then all of a sudden I’m doing what they’re doing. Maybe it’s 70%, is good, but that’s still profitable.
[JOE] Yes. Okay, cool. So then do you stay in that market or did you continue to invest in other markets?
[JUSTIN] I stayed. So my very first two properties were in that market. Then my third property was in a different market and then my fourth and fifth were in a different market. Then my sixth one, I came back to that market and then I decided, do you know what? I probably should just scale in one place. So everything beyond that has been within really a 20 to 30 minute radius. So I’ve got two properties on the outskirts of the majority of my portfolio and then everything else is in a 30 minute radius.
[JOE] From a, I’m just thinking, so say there’s someone here that, they’re running a counseling practice. They are realizing they’re making maybe more money than they thought they’d make and they’re saying, I want to diversify beyond this so I’m not just stuck with, I love the analogy of a really nice treadmill because I was there. I had this group practice that’s going, I was kicking it in regards to the finances, but I still didn’t have the time freedom I really wanted. It wasn’t scalable. There was an upper limit to what I could charge for counseling and make per hour. So imagine someone has some money or maybe they don’t even need to have that startup capital, like you were saying. Sometimes the investors are even easier. What are their first three to five steps to say, I want to do some lifestyle investing. I want to, within the next five to 10 years be just like Justin maybe in a different market, maybe in the same market. How do they even get started?
[JUSTIN] That’s such a great question, Joe. It’s the most common question. So in my book, The Lifestyle Investor, I map out what this looks like and what the process is, but I think that someone really needs to have clarity first on what their ideal lifestyle looks like. Because if someone has built a business or has a practice that’s requiring a lot of hours from them, I think the last thing that they’re going to want to do is buy something and invest in something that’s going to require a lot more hours.
So for some people they might sacrifice the return for just being totally passive, just maybe I’ll make less of a return, but if I don’t have to put any work into it then that is right for me whereas other people might say, Hey, I’d love to transition out of this practice. Or I’d love to transition into just doing my practice part-time because I love it. But I just don’t love being a slave to the hours that I’ve built. Sometimes you build all these systems and you have human capital, you have all these people, tons of clients, but you think you own the business when in reality, the business owns you. So how can you get back to you owning it and you spending time on the things you want and in the volume that you want?
So that might be maybe I need to put some time over here, get the best return I can for a short period of time and then I can transition myself out or transition myself to part-time. So I think everyone’s situation’s different. How much time do they have, how much return do they want to make? I think if you look at it through two different lenses, you want to maximize your financial return or you want to maximize your time return. I think you can go in one of two categories. And there are investments for both. If you really want the best return, you probably should own the property, like deeded property yourself. You can hire management groups to do stuff or you can do it yourself. If you want totally hands free, there are tons of syndicated deals and funds where they do this and they’re operators and they professionally handle everything. You just invest in it.
So those are two paths, but one of the first things I talk about in my book is what’s your financial freedom vision? What does that look like? What does it cost you to live today? What would it cost you to replace your current lifestyle income? Then what’s your ideal life? What does that look like? Most people spend all their time just reacting and on autopilot versus carving out time to say, Hey, this is what I want in life. This is how much time with my family. This is where we want to travel. This is when I want to retire. This is how many hours I want to work. These are the things, these are hobbies that I love and I have no time and I want to carve out and make time for them. So just getting clear on what that looks like, I think is going to really direct or dictate the investment moves that a person’s going to make.
[JOE] Well, I mean, it’s very rare to have someone that I can just pick their brain and say, dig into Joe Sanok’s situation, but I’m going to do it. So I’m in the middle of actually a real estate deal right now, purchasing a Airbnb property. What would you say in regards to an Airbnb property? What questions should I be asking? I mean, we’re already, we’re like two weeks from closing, so it’s going to happen. So we can’t like really pull out at this point with all the like good faith money and all that, but how do you think through properties and maximizing returns and reducing the amount of time you put into it? What should I think through if I’m going to do it the Justin Donald way?
[JUSTIN] Well, here’s one thing I will say , is just because you would lose money for pulling out that doesn’t mean you should, that you’re locked. I think anytime there’s a bad deal, you have to be willing to walk away. So first and foremost, as an investor, you’re probably going to lose money somewhere at some point in time. So don’t let the tail wag the dog just because you’re going to lose 10 K or 20 K, which is a lot of money. No one wants to lose that money, but if it’s going to save you from potentially losing hundreds of thousands, then you just do it. You just cut your losses. I’ve had to do that before and it never feels good. Never. Not early on or even later in your career. Even when $10,000, like out of college was everything in the world and $10,000 now is really, not really as big of a deal to me, it doesn’t matter. It still feels like wasted money and I don’t like that.
But what I would look at is how’s the market, how are comps around it, how often is it being rented out right now? What are the rates? What does it look like in a worse-case scenario? So if travel dries up, if there’s more mandates and travel’s blocked again, what does that look like? Does this, can this profit based on a lesser occupancy than whatever the high end proforma is projecting? I do think you need to make a proforma, which is what you think it will produce under your watch, like what is a, some people have these, like here’s the perfect proforma. If every night of the year is booked, and that’s just not the reality, that’s never going to happen. So you have to come up with something that’s realistic.
Then you just want to know that the numbers work. Personally for me, I wouldn’t buy an asset that doesn’t cash flow, especially in real estate, unless you can, you have the reserves to cover those cash flows, because if the economy tanks, the value of the home is going to be worth way less. Homes are based on comps, market comps. So the moment that your neighbors house sells for half as much as yours sold for price per square foot, then that’s what yours is worth in that market. But that doesn’t matter if there’s cash flow. If there’s cash flow, who cares what it’s worth, because you don’t have to sell it today, you can sell it whenever you want to sell it whenever the market rebounds. So those are things that I think through —
[JOE] Let me just clarify. So when you say cash flow, you’re saying the amount that I’m paying in mortgages per year, electric, all that it costs that I’m making more than that in a year with my worst case scenario.
[JUSTIN] That’s right. That’s right.
[JOE] I just wanted to make sure that, that was more for the audience, not I knew all that. I just wanted to make sure.
[JUSTIN] Negative cash flow is the worst and a lot of people get into real estate where they have to put money in every single month, because the property doesn’t make them money. That is a tough situation. That was the situation with my very first home, my condo that I bought, where I moved out, where I was footing the difference of the bill, that Delta I paid every single month. Then there was this huge roof leak and just tons of stuff. I had insurance, but somehow there’s a loophole and the insurance didn’t cover it. So then I had to rehab it. I mean, it was just a colossal pain.
I learned so many good lessons and I bought at the peak of the market. So I paid top dollar. Then this is, so I bought it like end of 2005, so I’m paying like super high prices. Then the market crashes and I’m stuck with it. I can’t sell it. I was going to be upside down, when I sold it I was upside down, but it would’ve been even worse and it wasn’t cash-flowing. So I was in a situation where every month I was putting money into this thing and the home wasn’t appreciating. It was just a bad situation. So I would want to avoid that again. I like buying assets that you can value it based on the income it’s producing on the net operating income, not based on the comp of the homes in the area or the assets in the area
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[JOE SANOK] We, we’ve got just maybe five or 10 more minutes left. We’d love to hear when you think big picture lifestyle investing, but then also zooming in with practical tips. What are things that every therapist, every counselor, every coach should be thinking through, should understand from a macro standpoint, but then also a micro standpoint? Well, I think that there’s a lot of ways to invest, but if you’re trusting someone else to manage your money, to invest your money, do you know how good they are? Do you know if they can make money in a bad economic season? I think it’s really dangerous and really scary to put all your trust into someone else to do it.
[JUSTIN] Public equities can serve their purpose and they can be great. I think they’re a portion of a portfolio, but most people put all their money in the stock market or all their money in their business and whatever’s left over in the stock market and they maximize their qualified plans, their IRAs and 401ks, which really limits the utility. There’s not a lot of utility in those dollars. They forget that even though this thing is growing bigger, that a good portion of that money is going to the government, right? The investments where you’ve already paid taxes, like a Roth IRA is limited right now, I think to $6,000 a year. So there are a lot of other strategies that are just better far superior. The stock market is like retail investing. You’re going to have the highest fees and you’re going to have the worst returns. If you invest in private deals or you get to the wholesale side that’s where you’re going to get better returns.
It’s also going to be a lot safer. It’s going to be less fickle, it’s going to be less volatile. So I think that matters. So for me though, I got started in real estate, I’ve invested in every type of real estate that exists out there. I don’t know that there’s anything, maybe something super obscure. I don’t know of anything I haven’t invested in real estate. Then I’ve done a lot of senior secured debt where I lend people money collateralized by an asset. That’s a great way to earn a return. Then I’ve invested in a lot of operating companies, but in a unique way where it’s not a gamble, where I know I’m going to get my money back where the terms are structured in a way where I can really benefit and proven businesses, not startups, not coin flip companies, which basically all startups are; companies that have profitability, companies that are very far along the way, companies that I can invest get equity and get my money out quickly.
So I think what’s best for people is to really learn and understand that you want to get your money working for you. At a certain point in your life, time is the thing that produces income. But if you really want to maximize life time shouldn’t produce income. Time should produce enjoyment. So how do you get other assets and your capital producing income so you can spend your time as you want? By the way, if you then want your time to spend income great, but now you can be more picky with how you earn that income and how much time you spend. My big recommendation is learn, you get clear on what you want out of life, what an ideal life looks like, surround yourself with mentors and with a peer group that’s playing the game of life in business at a higher level, and then take some sort of action, try to diversify.
Don’t have all your eggs in one basket and try not to play the net worth game or the nest egg, accumulation of your dollars as your the total that you’re worth but rather play the cash flow game. Figure out what it costs you to live and find a way to have assets that produce that income. Then you can transition from the way most people invest, which is just throwing money out there and hoping that it works to being a lifestyle investor where you buy proven assets with a proven track record with cash flow so you can buy your time back and spend it the way that you want.
[JOE] So awesome. Justin, if you had $10,000 to invest, and if you had a hundred thousand dollars to invest, what would you do in both of those situations? Then I’m going to ask my final question after that.
[JUSTIN] Well, I think if someone’s not willing to get out of the societal norm of like, you should be investing all your money in the stock market, you should probably just invest it in an index and recognize that it’s going to ebb and flow, and you may put that money in and want it back at a time where it could be half of what it’s worth. That investing is really long run, long term investing. Now if you want to get outside of what most people do, then there are a lot of websites that, companies where like pure streets or crowd street, where you can invest in real estate in a small amount; other people’s deals. You can do that with lending. You can lend in a small amount. There’s a ton of, there’s fund drives, there’s tons of these that are out there where you can be a piece, a limited partner, a small percentage of a bigger investment.
if you have a hundred thousand dollars, that’s a little different. With a hundred thousand dollars, you can either buy an asset outright, or you can use leverage, use a bank, have that a hundred thousand dollars as a down payment and then buy a $500,000 rental, whether it be a home, a mobile home park, storage units, whatever it is, an industrial space that you rent out. You can get a return that way or you could also just put it in a passive deal or two deals. You can put $50,000 into two different deals or a hundred thousand dollars into someone else’s deal that they’re running, who has a proven track record and maybe you’re going to make 10 to 15% on that deal. That’s what’s projected. Maybe it’s more, maybe it’s 15 to 20%.
I think there are a lot of options out there, but those in my world, those are common. I mean, I did a podcast episode with one of the foremost experts in the alternative investment space, and you’ll hear, his name’s Chris Shelling and he talks about really the dangers of the stock market and the positives and all the benefits of being in private equity and real estate, alternative investments or alts.
[JOE] Wow. Well, Justin, the last question I always ask is if every private practitioner in the world were listening right now, what would you want them to know?
[JUSTIN] I think the most important thing is to carve time out for yourself, to get clear on where you want to go in life and then really be disciplined to find the people that can help you get there. So whoever you spend the most time with you’re generally going to be like them. You’re going to think like them, you’re probably going to have a net worth really close to that. So if you want to upgrade your life, upgrade your net worth, upgrade your investments. Then it may make sense to find some people that are playing in the space of that upgraded world. So who can you add to your peer group? Who can you add to your mentors that can help you get there?
That’s what I would do. I have been very intentional about spending time with people that get me to think differently. For whatever reason, we all have these beliefs. We think that they’re our own, but generally they’re handed down from someone else and we haven’t challenged them. So we just take them on as our own. So I want to be around people that have shattered certain beliefs and play in this different world and play a different game of investing in business and life, because that allows me to challenge what I think is real and is true.
[JOE] So awesome. Well, you’re giving away a free copy of your book to the audience. Talk a little bit about that. Talk about what they’re going to get out of the book, and then maybe tell us a little bit about your website and podcast.
[JUSTIN] Yes, sure. So what I wanted to do for your audience is give a copy of The Lifestyle Investor to anyone who’s interested. They just pay for shipping. You can do that at lifestyleinvestorbook.com. That’s one place. You can of course get it on Amazon. All the proceeds from my book, The Lifestyle Investor all go to charity. They all go to an organization called Love Justice International that stops human trafficking in now 24 countries around the world. So my goal is that the education can go towards financial freedom for people, but the actual proceeds go towards buying human life freedom that people for whatever reason have been stripped from them.
That’s one thing. For anyone that wants more than that. If you go to justindonald.com, I’ve got all kinds of things. I’ve got a blog, I’ve got an online course, I’ve got two different master classes, one on mobile home park investing, and one on passive income. I’ve got a mastermind that is wait list only right now. There is an application that would need to be filled out, but it’s just a great group of people. Really, for most people, it’s probably not the right fit, but if you are the right fit, it is an incredible opportunity. So those are a few things. When it comes to my book, The Lifestyle Investor, the subtitle of my book is The 10 Commandments of Cash Flow Investing for Passive Income and Financial Freedom.
So I walk through my 10 criteria on making investments; so why do I invest the way that I do and what are the hacks that I’m looking for? I walk through 12 different investments that I’ve done and I break every one of them down so that people can literally just copy them. They can get the same terms, they can get into the same industries, and so you can see the way that I’ve created this well-rounded portfolio that is real estate. It’s private equity with a bunch of different companies. There’s some public equity in there. There’s some crypto. I just think it’s important to have a piece of everything.
[JOE] Oh, so awesome. Well, Justin, so fun to catch up with you and just learn so much. Thank you so much for being on the Practice of the Practice podcast.
[JUSTIN] Oh, my pleasure. Thanks for having me. This is a ton of fun and I’m excited for your audience, your network, to be able to take things to the next level financially, because that’s the game changer. That’s what unlocks just this creativity and this energy. I just think that when people make decisions that have nothing to do with money, those are better quality decisions.
[JOE] Thank you so much.
I love the idea of us taking the money that we’re making and putting it into something that can just bring money in over time. For a while, I had two Airbnbs, ended up having that be part of the divorce settlement, which is fine. I worked out fine in my favor, I guess not my favor, it just happened whatever, S hit the fan. But to get back into it, to have this deal coming up and to be able to say, okay, the Northern Michigan market, it’s hot during recessions. It’s hot when there’s not a recession. So I ran the numbers, I looked at it and the idea of having this property that is going to cash flow and is going to grow and to be able to say, yes, I like podcasting. I like the work that I do, but I also want to make sure that if there’s a downturn in the podcasting world that I’m not so stuck in podcasting as my career; that I’m better able to position myself to have that financial freedom moving forward.
So I love that we cover these topics that are outside of the counseling space, but really, I mean, it’s how do we want to live? How do we want to impact the world? What do we actually want here rather than just the script we’ve been given from grad school that you just have to do counseling? If that’s all you want to do, that’s totally fine but maybe there’s more that you want to invest in and you want to think about. So I’m so glad that we had Justin on the show today.
As well, today’s podcast sponsor is Therapy Notes. Therapy Notes is the best electronic health records out there. They have such amazing customer service. They’re able to help you transition from your current EHR to upgrade to the best one that’s out there. As well, you have your teletherapy right there. You don’t have to have a Zoom pro account or worry about HIPAA compliance or use Skype and not be following HIPAA. It’s all within Therapy Notes. So try that out and use promo code [JOE] at checkout so that they know that you came from us. That’s how they know it works. That’s how they track it. You get some extra months for free as a result of using that code.
Thank you so much for letting me into your ears and into your brain. Have a great day. Talk to you soon.
Special thanks to the band Silence is Sexy for your intro music.
This podcast is designed to provide accurate and authoritative information in regard to the subject matter covered. This is given with the understanding that neither the host, the producers, the publishers, or the guests are rendering legal, accounting, clinical, or other professional information. If you want a professional, you should find one.