The Iced Coffee Hour - The Full Story Of Dave Ramsey | Inside the $700 Million Dollar Empire

Episode Date: September 4, 2022

Dave Ramsey is a #1 national bestselling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. On today's podcast Dave and Graham discuss Dave's unorthodox route to entrepreneurial success and qualm over whether his distrust of debt can be universally justified.  Sign Up For Wealthfront For A $50 Bonus And Earn 2% APY On Your Cash! https://wealthfront.com/ICH  Follow Dave Ramsey: https://www.youtube.com/c/TheRamseyShow Check out the Patreon! https://www.patreon.com/icedcoffeehour  Add us on Instagram:  https://www.instagram.com/jlsselby https://www.instagram.com/gpstephan https://www.instagram.com/alex_nava_p... Official Clips Channel: https://www.youtube.com/channel/UCeBQ... For sponsorships or business inquiries reach out to: [e-mail] GET YOUR FREE STOCK WORTH UP TO $1000 ON PUBLIC & SEE MY STOCK TRADES - USE CODE GRAHAM: http://www.public.com/graham  MY NEW COFFEE IS NOW FOR SALE: http://www.bankrollcoffee.com/ The Equipment used: https://tinyurl.com/y78py5g2 Audio Equipment Used In Podcast: Shure SM7B mics, cloud lifters, rodecaster pro audio interface The YouTube Creator Academy:   Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: https://bit.ly/2STxofv $100 OFF WITH CODE 100OFF  For Podcast Inquiries, please contact [e-mail] *Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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So Dave Ramsey probably doesn't need an introduction, but for anybody who's been living under a rock. His show, The Ramsey Show, is the second biggest radio talk show in America with over one billion downloads. He's written two New York Times bestsellers, has over two and a half million subscribers across two YouTube channels, and owns over $600 million cash worth of real estate. Dave is actually somebody who I've personally looked up to now for 10 years, and if you don't believe me, I literally have a cat named after him because I found the cat for free. And I have a life-sized cardboard cutout of him in my family room. Needless to say, Dave Ramsey is the king of all financial entertainment.

Well, we got him for an exclusive one-hour-long episode here in the iced coffee hour and couldn't be more excited to show you. So if you're a fan of this content and you want to see more, subscribe. Because we have some pretty incredible stuff coming out in the near future. But first, we want to thank our sponsor, Wealthfront. With all that's going on in the market right now, investing can be seen as very risky. And it would be incredible if there was a guaranteed way to get a high-interest return on your money. Well, thankfully there is, and it's by using today's sponsor Wealthfront.

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I'm Dave Ramsey. And this is the... the ice coffee hour, and so far this podcast, Wild Guests, has made $260,000. You are officially our closest guest. Congratulations. Actually, and usually we just say this, you know, if you're within, you know, a little bit, but yeah, $258,700. So you're $1,300 off.

If this was price is right, I would have won the dishwasher. One dollar, Bob. One dollar, Bob. Well, thank you guys so much for doing this. And, Dave, the hospitality of everyone that I've met on your team is insane. Just how passionate everyone is, how much they really want to be here, how excited they are, how nice. It's like, I am blown away when we drove down here and saw, we were asking your driver, are your head of security actually? I said, is this all days?

He's getting the whole thing. And it's all paid for. It's all owned outright. And I'm like, does he sublease any of it? Surely there must be like other like medical buildings or off. No. I am blown away. It's wild.

Insane. Now, for those unfamiliar, I bet most people are familiar with your story. Could you give us a bit of a background on what you do, your philosophies, and how you were able to go from being bankrupt in your 20s to owning everything? It's incredible. I'm truly owning everything. I've had a loss for words here. Wow. I like hanging out with Graham.

I got ideas. Now, we, like you said, we started with nothing. Mom and dad, we're in the real estate business. I know your background, of course. Your parents weren't, but you got into it at 18. I got my license when I turned three weeks after I turned 18. And still got my license and a thousand years later. And so I went and got my degree in real estate, came out.

Sharon and I got married at 22 years old in 1982. And went through a couple jobs, and then I quickly started buying real estate. Nothing down in those days. It was a big deal. Before Chip and Joanna were born. You know, and so it's a long time ago. And I got rich. I had a million dollar net worth, made about 200, I think I made 250,000 bucks at 24 years old.

And that's 1984. So that's like making 600,000 now, you know. So it was for a kid from Antioch, Tennessee. I mean, where I came from, that's called rich. And so everything was going great. But I did a lot of 90-day notes because I was doing flips, a lot of short-term notes. and our bank, the largest bank I had a million to out with them, got sold to another bank and outside of the state of Tennessee.

And some guy looks down in another city and said, hey, there's a 24-year-old kid owes us a million bucks. This is scary. Let's limit this relationship, which is banker talk for ruin his life. And they called our notes. Another banker got word we were in trouble called another 800,000. So we had two million we had to come up with in 120 days. And it's all in real estate. You can't get out of it that.

So it started a crash that. that I couldn't recover from. And we spent the next two and a half years losing everything we owned, being sued and foreclosed on. And finally with a brand new baby and a toddler and our marriage hanging on by a thread, we filed bankruptcy in September of 88. And it was not a good ride. But we were new in our Christian faith, baby Christians,

and I started studying what the Bible says about money, which was just common sense. Get out of debt. Stay out of debt. live on less than you make, live on a budget, have a plan. And I start doing that stuff. And that evolved and people asking me, okay, how are you recovering from your bankruptcy? It seems like you're doing okay.

And I'm like, well, we're doing okay. It wasn't fast. But we finally sat down with some friends and helped them do a budget because they were in trouble. And then the pastor called from the church and said, hey, this guy's in foreclosure. Can you help him? I went, yeah, I used to buy foreclosures and then I was one. So, yeah, I can probably help him. So we sat down, did a workout plan, a forbearance plan with that mortgage company for him.

And I started doing forbearance plans for people that were behind on their mortgage, started helping people that were struggling. So they didn't have to file bankruptcy. They thought they would have to go into Chapter 13 to save their house. And then that evolved and started teaching a little Sunday school class. And there was about four people in there and looked up and there were 300 people in there. and it just there was such a need people were they gravitated to my story of stupidity my Ph.D. and D-U-M-B and they were hurting too and it gave them an authentic place to get help by somebody who actually knew the pain and knew the stress. And from there, I went on a broke radio station that was in Chapter 11 bankruptcy.

A lot of bankruptcy in this story. And they let us work for free, which is a huge. exactly what we were worth. We were horrible. Daryl and his other brother Daryl on doing talk radio, it was nasty. And, you know, we were able to sell some, a little bit of that first book I wrote out of the trunk of my car and started doing some events with the overhead projector in a bad suit. And, you know, fast forward all of that to this massive thing.

Starting all that stuff was about 30 years ago. Starting the radio show was 30 years this year. How were you able to turn that into a business, because it seems like at the beginning you were giving free advice, just helping other people out from the church. How did that evolve into making money from it or being able to grow that and hire so many people? Well, we started, I mean, I started, the first thing I did was I thought, okay, I can do counseling. We now call it coaching, but counseling's got legal implications in the word. But the coaching have people in their finances, and so I would charge $250 or $750.50.

to help somebody and just meet in a conference room and sit down and help them do that. Outside of church, I mean, just word got out. You know, the guy at a local restaurant heard I was helping people, and he sent one of his employees over who had an IRS lien and was getting ready to tag his house. And so we were able to get that, get an OIC working on that. And so I just started coaching people helping them with their budgets and avoiding a foreclosure, or repo or whatever, all stress stuff, all hurting stuff. Then I went on this little radio show, and we weren't making any money on it.

We didn't make money. The radio show wasn't profitable for 10 years, but it was, I mean, we didn't make $258,000. I can promise you that. But there were a lot of people listening, and it became a megaphone, a way to get to acquire customers. So they would come in and do coaching, and we could sell books, and then we started doing events that we charged for. And then we opened up a thing called Life After Death. which was a 26-week course on money to get out of debt. It evolved into what's now known as Financial Peace University,

which is now nine weeks mercifully. You know, that grew, the events grew, the publishing grew, the speaking grew. And finally, the radio show became profitable. We were able to actually sell some ads in our talk radio slots other than just trying to promote our own stuff. It was kind of infomercialish, really. But in every case, we just figure out a different medium or media to help people, and then was there a way to monetize that too,

where we could help people make a little money. And, you know, if you sell a $10 book and you make $8 on it or whatever, that's good. But if you sell a million of them, it's better. And in that beginning phase, when you were just getting started, did you guys do any marketing to try to grow these different businesses that you were in? Or was it mostly just word of mouth and people telling their friends and their family, hey, you should listen to this guy. He's got some great financial advice.

Entertainment. Yeah. Entertainment. It was mainly word of mouth, but we had this wonderful microphone of this radio station, and the little radio station ended up getting bought out of bankruptcy. And by then we had marshaled a following. We didn't even know we had ratings because they never told us to say the call letters. We were in bankruptcy.

It was like a Saturday night live skit. I mean, it was bad. And so then this professional radio people come in and start teaching us that you say the call letters. You're kind of illegal if you don't say them once an hour. You know, and so we started using them in and out of every call. And so the radio show ended up building the critical mass from a marketing perspective. We didn't have any money to do marketing. We were just surviving, making payroll on Friday.

And so the first guy I hired was another financial coach because I was maxed out logistically. Then I hired a lady to help us in the office. And, you know, and then Financial Peace University started taking off. We put it on video and quit teaching it live. and boy that went to scale quick. It's now been taught. About 10 million people have been through it in 50,000 churches. But that, you know, when we put it on video, that enabled on VHS, okay, later DVD.

Now, you know, obviously digitally delivered. Yeah, it was a, when we changed the mechanisms of the delivery, we started seeing scale kick out on the different things. And then we started getting more radio stations to add, start syndicating the show, meaning we would try to get other cities on to carry us and so forth. and, you know, we just, I remember when we got the 10 radio stations, I thought, oh, my God, I'm in 10 cities. Wow, am I a big deal for what? You know, and now it's 670 or something like that. Is there a reason you did radio over TV? Yeah, I've got a face for radio.

No, I, nobody, nobody would let me on TV. I mean, I get the news media hits here or there. I only did a book tour. I got on the Today show the first time with that first. book when I sold it to a publisher and then we went we reissued relaunched it and they uh I got on the today show I thought oh god this is it it's over man I just just check that box man and uh nobody even knew I was on there that's great has no you know sold some books though we got it on the New York Times and um then people magazine picked it up and so we you know we ended up get kind of in the pub business the publicity business we start figuring out oh that's like free marketing hello And so if we can provide content for them, they'll have us on their shows and doesn't cost a thing.

They benefit. We benefit the viewer listener benefits. But I wasn't good at TV. I did a, when Fox Business first launched, their initial launch, I was one of the first, I was the show in the evening. I was a primetime show. We did a one-hour show on there that aired in the evening. And I learned a lot. TV's a lot harder than radio.

It's a lot. And people talking in your ear. here while you're supposed to be talking. My brain's not that good. I'm not smart enough to do that. But we got through it, and we did that for two years, and Fox Business shifted their aim at a different demographic. Our demographic's pretty young, and Fox Business at that time was a very old demographic.

And so we weren't helped to them at that point. But I did it a little while, but I really wasn't good at it. I'm really good at like the three-minute interview thing, you know, like on Fox and Friends. I do that all the time from here. We've got fiber into here. They're friends. That's funny. Fox and Friends are Friends.

But George and I do that. You know, all the Remsey personalities, we'll jump on and do those. I'm really good at those. But the long-form TV thing is just... What do you think that is? I think there's just so many things going on and you have to concentrate and you have to look at the camera properly. Yeah. I just talk.

It's funny. That's long, but it is a three-hour radio show for 30. I know. I was just thinking that. An hour of TV is just too long. Because, like, taking like a Dr. Phil format for personal finance and finding really just extremely situations but helping them through that i feel like it would be so interested bs had us do a pilot yeah when the nanny was hot you remember the oh yes she would come in and fix their mean kids or whatever

what was that show called the english it was the english lady yeah yeah yeah so they about that time i did we ran around all over the country we had three families to do it shoot this pilot and their idea was that we would be like the nanny but in finance we'd come in and swoop in and help this couple and so forth then it was it was really bad it was awful you didn't like the way it turned out No, it was, they didn't mean, they didn't even air the pilot. What? It sucked that bad. It's got to be on the internet.

I would. It sucked. It really sucked. And it was, it was me. Was it just boring to think or what? Yeah. It's just, I mean, well, I mean, it's reality. The funny thing is reality has absolutely nothing to the reality.

Like, I remember walking up to the doorbell at these people's house and ringing the doorbell. I did it like 17 times before they got the take they wanted. I'm like, it's ringing a doorbell. This is supposed to be real. I just ring the down. Bad blame thing. Reality TV. It's 17 takes to get the doorbell right.

Yeah, I'm like, screw this. I'm not, I'm not any good at this. But see, at this point, you would be able to produce your own show if you really wanted to, and it would be a hit. Or you could ring the doorbell once. Yeah, actually, actually, actually, we're going to do that with George. Oh, my gosh. Way less intimidating. If Dave Ramsey shows up at your house and hits that doorbell, they're like, oh, crap.

Yeah, yeah. They would be quivering and fear. Why? Why? Why am I a fearful character? What's wrong with you? Money? You show up and they're like, oh, gosh. Yeah, like what did I do?

I'm going to get it now. Golly. More of a Gordon Ramsey. I was about to say, yeah. The kitchen, was it a kitchen nightmare where he goes in the restaurants and fixes the restaurants? But you've got to be shouting half the time, yelling at them and berating them. And you're going to be doing that? I don't know.

That kind of energy. No, you don't think of that. Me yelling is a different vibe than Dave. Got it. Okay. I don't yell. What's wrong with you, George? Listen to the radio show today.

He will be yelling. That's interesting. How many people now do you have working with you? We get about 1,200 in the building. Wow. Now, I've heard, and I've listened to other interviews you've done, that the interview process to work with you is pretty stringent. How many people apply for a job versus how many people get one? And what's the process like for you to hire somebody? Well, I don't hire them.

I mean, they were hired inside. Our leadership team does the hiring. the chances of me I'm not very good at interviewing people so they don't let me do it. The idea just being that we want people that are on mission and on crusade and that align with our values and that's who we want the building. We have had really bad experience with people who were here for what they could get rather than what they could add. They're takers rather than givers. They don't add value.

And people that add value generally are people that are aligned on our values. they add value if they're excited about the crusade of helping people with their mental health or their career or their money or they want to help with that. And even, you know, it's a creative, they want to do their creative work for something that matters, you know. But if you're just looking for a J.O.B, we want to weed you out before you get in here. Or if you're crazy, we'd like to find that out before you get in here. And so we don't just open a wreck for a hire and just whoever can fog up a mirror. that looks like they have a good resume. Let's get it done and get them in here. No, it's pretty stringent because we've had bad experience with having the wrong people in the building.

You know, people that are here and unhappy, it distracts from all the work. Because you have to stop and deal with the drama queen instead of getting your work done. You know, so we don't, we try not let drama in the building if we can help it. I mean, sometimes people have bad things happen. I want to be there for them, but somebody who's in here as a taker, that's where we've had the worst experience. So yeah, you go through a whole series of interviews to weed that out. And you can't figure that out in 30 minutes. People can, they can be psychotic and, you know, completely fool you for 30 minutes. They can fool you anyway, but, you know, one 30 minute interview, you're not, you're going to, you're not going to get a good team. But how do you filter that? Is there a question?

Is there a process that breaks that down so you're able to see maybe what, what an intention is or whether or not there's a good fit? You just talk to them and, you know, listen to them. If you just spend enough time and put them in different, put people in different situations, then you'll get a feel on it. You get a vibe on it. We all, I mean, we all read people pretty well if we just would let ourselves. Yeah. And so just, we're sitting here going, do I really want to spend a lot of time with this individual? This is a small business, even at 1,200 people. It's, we spend a lot of time together. We work hard. We work really hard. We go home at 530, but we work really hard while we're here. And so, and I do. And so we just want somebody that's aligned with that. And we ask a lot

questions and talk about who we are and watch their reaction to this is who we are. You know, and do you want to, is that who you want to be around? Well, no, I think that's kind of crazy. Okay, then we've kind of figured that out. Or they give you some indication of that feeling or that vibe. Sure. Now, I'm really curious of your work schedule because you have grandkids now. And how do you, how is that shifted over time with spending time with family versus working versus helping people? people. How do you divvy that up? Do you have hours? The hardest time was the early days, because we didn't have the help. And we're trying to get the critical mass of the business moving, trying to make payroll Friday, you know, that kind of stuff. So I would, you know, I would come in at

seven and work all day and then go to a three-hour radio show, come home from that, or come back to the office from that, and then go set up the screens and the overhead projector across the street at the local hotel to run Financial Beach University that night. Those were 16-hour days. And my wife will tell you those days, she was a single mom for a while. But that ran about, I guess at that schedule, it was only about two years. We were able to get critical mass. And then quickly I wanted to delegate some of that. And so anything I could get off my plate that would allow me to be freed up.

And because I don't mind hard work, but I do not want to set up something that's not sustainable. And working like that for 20 years means you don't have family. working like that means you you lose your health or working like that's silly but doing it for a period of time to get something moving well game on you know get ready you're getting ready for the Super Bowl you better get ready you know and so we did that but nowadays it's evolved and you know my joke with the team has always been if I hate doing something it's going to be real bad because I'm just going to stop doing it and that means that something you were working on I might not be doing anymore somebody else is going to do it or we're not doing it at all So, like, I mean, live events, we used to do, you know, 40 or 50 of those a year running around with me. And then now we've got Ramsey personalities that do a lot of those. And I'll go do 10, you know, or 15 or something a year, which really isn't that hard to just run into a city, do an event, run back home. You know, it's not like I'm gone continuously or something.

Like, I've got friends in Nashville on the music business. They live on a bus. I'm not doing that. No. At what point did you bring on the personalities? like, you know, I've been watching George. And this is something for me where I've noticed maybe three years ago, was it?

Maybe two years ago, you started bringing on other people and you changed the name of your channel from the Dave Ramsey show to the Ramsey show while bringing on other people. It's interesting to see that for the most part, at least... The ride that steals the spotlight every time it hits the road, that's the Volkswagen Tiguan. Its sleek exterior makes a first impression you can't ignore.

Step inside to find available full leather seats and wood accents. Under the hood, the available 201 turbocharged horsepower engine gives it a fun to drive edge. The refined Tiguan, you deserve more style. Visit vw.ca to learn more. SuvW, German engineered for all. From what I saw, you did everything yourself, and you were the main phase. And as soon as you brought on personalities, I read all the comments, and some people were mixed about it.

But I think over time, people really enjoyed having different perspectives. How much of that was strategic, and why did you choose to bring on? other people with you. I'm 62 today. And back to my schedule. When I turned 60, I quit working on Fridays. And we all pretty well work, you know, from, you know, seven to five or whatever around here.

We all, the whole place, I mean, there's nobody in the parking lot of 5.30. With the personalities when I was 48, 14 years ago, I started getting around some business people who were talking, you have to have a succession plan. you have to have a plan to hand this thing off. Otherwise, it just dies when you die. And all the effort and everything you put into this dies. And it seemed kind of silly. If you're going to teach financial responsibility,

you ought to be responsible with their assets, you know? So we started going, okay, we need to have some other, we need to train the next generation of Ramses to be wise owners. We need to make sure we have leadership in place that can lead without me in the room and without me alive even, then how are we going to hand off the brand? And the brand, those two you could find best practices on, training up the next generation to be wise owners or build quality leaders. You can find best practices, but it's very difficult to find someone who had handed off

a brand, a singular name brand like that to someone. And the one-to-one handoffs had the worst. So you had like, you know, the father left it to the daughter or the son. And it just didn't work. There was too much weight on that next generation. and it was there was too much risk involved. So we kind of felt like God showed us to diversify that and have a one to many handoff on the brand.

So literally 14 years ago, we started hiring and training our first ones. Rachel Cruz is my daughter, and she was doing some speaking. And we had other people doing some speaking at the time. We started, we first, we had horrible names for them. We're like, they're message bearers. They carry the message.

It's like a little message here. It was awful. I mean, we knew, we knew where we were going. We just weren't talking about it intelligently. And then later they became brand somethings, brand ambassadors or something like that. No, they were just called brands. We just called them brands. And they weren't a brand.

They're a person. There's brands like, you know, every dollar of the app is a brand. Financial piece is a brand, a person, you know. Yes, Dave Ramsey's become a brand, but that's really that, it was confusing everyone. So finally someone came up with the idea of personalities, and we named them personalities. So now I have multiple personalities. Yeah, so we, you know, Rachel and, you know, we've got eight now or nine as of today. And, you know, many of them have had number one bestsellers carrying their, they're getting tremendous speaking fees, speaking all over America.

They are high quality communicators and thought leaders within their own right. But the last piece of that was the actual radio show. So we had long before three years ago. We had a solid base of these things happening. I think Rachel had the first number one bestseller. And that was a fly. It's great. Land on my nose.

But she had the first number one. And gosh, that's probably 2014 or 2012 or something like that. But yeah, so we've had books going out and other things. including them in the smart conference and other events where we were doing multiple people. But then the radio show, we had the plan. We didn't know what to do with it because we weren't sure it could hand off. We thought it might die with me. But then COVID, and we went, okay, Dr. John Deloney talks about mental health and loneliness and anxiety.

And boy, have we got some right now? And George and Rachel Cruz talk a lot about hope and they're fun and funny. and God help us in the middle of quarantine, everybody needed that. So I just started, I said, let's just, you all get on the air with me and let's do this.

And the mistake we made it first was they were treated like a guest. Yes. And that was more awkward chemistry and didn't work well, and we've evolved that into a co-host. And then the more comfortable they've gotten sitting in the co-host seat,

the more effective they've been, and the less hate we're getting on it. Yeah. But, you know, I told our guys, guys are coming in comments. People don't like it. They don't like it. So, well, were they going to like static?

Because that's what they're going to get when I'm dead. Yeah. So we might as well try something, you know. I don't give a crap if they like it. Static's your other option. Very opinionated. I read all the comments. Oh, Lord, I don't.

No, comments are, no, comments. Comments are why. But I think a lot of it is that in the beginning, people aren't used to it, and they don't like what they're not used to. Yeah. I remember when Jack first came on, the comments, I don't like Jack. Something about it. Not all of them.

No. But if you were Jack. It was a great. I can't believe it, Jack. Would read into this be, like, his body language suggests he's like, you know. Yeah, people were, like, diagnosing me with certain things. They were like, oh, he's a sociopath. I know Jack.

I think he's a narcissist. It's like, what have I said? He's a narcissist. Yeah, I don't know. It was hilarious. But then over time now, people are, I don't like Graham on here. I prefer Jack on the podcast. And it's interesting to see how it shifted over time.

It hasn't shifted. You're doing great. I'm doing us too now. I prefer George over day. Yeah, yeah. Yeah, we get that. Yeah, we get that up. So much.

George is nice. Rachel. do like Rachel's actually very nice. Yeah. Yeah, they like Rachel. I've got a mean bone in me that occasionally. You have to. You're that guy. I don't yell. It's a calm mean. Okay, it's passive aggressive. It's snark. Yeah. Snark. There we go. How did you guys meet? We met when I started working here as an intern back in 2013. I kind of snuck in the door. I didn't have to go through 19 interviews. Because as an intern, which I don't even think we do those anymore. No, we don't. They're just like, well, he's an intern. That's why. He's a temp. He's here for 10 months. You know, we'll get him. He'll do the work.

How bad could it be? Someone's on maternity leave. This guy knows social media. We'll have him do some things. And then he'll be out of there. And I went, hey, I want to stay here. And they went, well, do you have any skills? And I went, I could do this role over here.

So I jumped into email marketing for about two and a half years. Went back to social media for the personalities. That's what drew me here was our personalities with a message to share that was creative and gave people hope. And so I wanted to help them spread that message through social media and marketing and email and all those things. And over time, had seen me on the stage at our Battle of the Bands event,

which is one of the ways we have a great time build culture here, internal team members, form bands, a lot of failed musicians around here in Nashville. I play drums, by the way. Yes. So if you need a drummer, just let me know. He's not a failed drummer, though. He's actually successful.

You were, like, on tours and stuff. He has two-dollar royalty checks. I heard about it. Oh, my gosh, yes. I haven't gotten a royalty check in a while. The last one is probably like 60 cents. I get like 30 bucks a month from my music career, so I'm beating you in that regard.

So I started doing that, and they went, We should have them emcee and host because Ken Coleman, one of our personalities, was stepping into that role. And so I started hosting events and the video channel for the show and curriculums, you name it. And last year, back in 2021, I was knighted personality because of how much I cared about this message and wanting to teach it and create content around it, especially for the younger generations. Wasn't where we knighted anyone. I don't know. I mean, there wasn't an official nighting. It was more of just a meeting where they went, hey, you're going to do this now.

And I went, okay, you know, which I've had about six or seven jobs here at Ramsey. Sir George. I like that. It's got a ring to it. Stick with that. You know, actually, Jack and I are both lords. Technically. Technically.

Yeah. We did one of those certificates where we own a one-by-one plot of land. You can be a lord for like 30 bucks online, apparently. Yeah. You can own a star, too. I have a star. Yeah, you have a star and a plot of land and your award. It's an NFT.

It's an NFT. This is pretty incredible. Y'all are really accomplished. What was it like, by the way, for your first show. Oh, my goodness. Because are they film live? Yeah, everything's live.

Or I guess with the delay. Yeah, with this, it's like, well, we can edit it out. I do a big flub. And so I was live, I think it was August 2nd of 2021. And I had just launched my very own podcast called The Fine Print, helping people avoid the traps out there with money. And so I was on air with Dave. And it's a lot of pressure.

It's a lot of weight to be on, you know, the second largest talk radio show in America next to Dave Ramsey. But at that point, I had done so many. other things in front of cameras and mics. And so I, you know, at first you're nervous and you get on air and Dave does the intro and you're like, holy crap, I'm in it. I'm inside of the Matrix right now. And we just had a good time with it.

And over time, you get more and more comfortable. There's not as much nerves anymore. But your body keeps the score. Your body knows you are live on air in front of millions of people. Don't screw up. Don't say the wrong thing. And by the way, this is then on YouTube for the rest of time. So my kids will go back, you know, 20 years from now and watch old clips of me saying stupid

stuff. But, you know, Dave led the way. He lived doing that. Saying stupid stuff. Yeah, exactly. What qualities did you see in George that made you feel comfortable putting him next to you? In all of our personalities, we're looking for, you know, obviously a strong intellect because a lot of the stuff we do is quick react. And you do not have time to think about the next day what you wish you had said.

It's over. You're doing an interview on Fox or you're on the air live or we're doing a Q&A in front of a live audience. or whatever it is, and you've got to be able to just draw on fire. So we're looking for that. But we're also looking for that. It factor on the stage or in front of a microphone in front of a camera. And different people have different places that are a strength. I've already said my strength is not on camera.

I enjoy the stage, and I enjoy the intimacy that talk radio has because you're dealing with just one sense, just hearing. And so you're not getting the benefit of body. body language or and you're listening for that pause that means they lied or you're listening for you know the nuance of it and 30 years of doing it you can begin to get it dialed in amazon presents jeff versus taco truck salsa whether it's verde roha or the orange one for jeff trying any salsa is like playing russian roulette with a flamethrower luckily jeffsafsaint with amazon and stocked up on antacids, ginger tea, and milk.

Habaniero? More like Habinier, yes. Save the Everyday with Amazon. But the it factor in one of those places can they lift people? So in our situation, we have to be able to put out high-quality information, but doing it in a way with story and with humor that is aspirational, that's lifting. You know, there has to be a motivational piece to it. If you just lift with no information, that's just fluff.

But if you send out information with no lift, that's called a boring 401 meeting. And nobody wants to go to those. And so we're not doing either one of those. And so, you know, we sit and talk to, you know, Dr. John Deloney, we're interviewing him about coming on and doing this. And he was the dean of students at a local university. But you're just sitting in a room with him. You get real quick. You go how quick he is, how smart he is, and how funny he is, self-deprecating.

and I went, this guy can do. He can handle that. And what George did was, George has always had that. I mean, he loves to perform. He's a musician. He already had that. And we had him in front of the camera with the video channel as the host. So we got to see, you know, could the audience love George as a host?

And, you know, could he connect? And you've got to be able to do that through these things or from the stage or whatever it is. and he obviously did that. And he's got an incredible work ethic. He's one of all the personalities. He's probably the one that does the most work to prepare before he comes on the air to do something. So he'll come in with like three articles when we're going on the air and go, hey, we could talk about this stuff.

I've been looking at this this morning. And my level of preparation is I walked in there and hit on. I mean, it was like, because I've been doing it a long time, but I don't track that stuff. But he's bringing good, fresh, new ideas and chemistry from his work ethic. And so that's the type stuff we were looking for. And he definitely personifies it. I have to say the level of preparation, even when we walked in here, I looked at the desk.

And I'm like, wow, this is similar to our desk. And I looked over. I looked at the lights. I'm like, wow, very similar to our lights. And you said that you've created this to somewhat replicate the iced coffee hour. And just the level, the attention to detail, I've never seen like this before. Our team has very high standards. And it stems from this guy right here.

is that we call it the suck bar around here and suck bar is down here for most of america most companies and everything we do is to the highest standard you know when we say we do our work is unto the lord that means we are putting our 110 percent effort in we have a core value of excellence in the ordinary which means the smallest things before we went live we are delinting a shirt i know because we don't want anything to distract from what we're trying to do delinting is a word it's a new word for day but our team i did none of this by the way it's our amazing video crew over here here and their level of excellence. And over time, you know, 10 years ago, we weren't at the level we were now. And so we grew over time. We got better cameras. We got better at lighting. We hired

even more talented people. And so over time, now the bar is just way up here. And this is where we start. And you've been to our live event. Yes. And so, you know, our production values, the things that we put out there, we want to be the best out there. And especially in the faith space, there's a lot of just like bad, you know, SNL skit level stuff out there. And we wanted to stand out from that crowd and do our work as unto the Lord. And so that's what we've been doing now for over many, many years. Now, I'm curious about this because your faith plays an important part in the business, in your life.

Where did that start? Because you mentioned in one of the interviews that you've done that it wasn't on the way down. It was on the way up that you began to practice. And was there a catalyst? Or where did that start or what prompted that? And how were you before that point? Well, yeah, the phrase we always used is I met God on the way up. I got the number on the way down, meaning that first rise in wealth.

And so I do everything backwards. A lot of people, their faith journey begins at a point of crisis. Mine was at a point of prosperity. But it deepened with going through that bankruptcy walk over two and a half years. And so I met God as an adult. But I didn't have a framework for really, anything. How do I be a good husband?

Okay, I'm going to learn that from biblical teaching. I'm going to, how do you raise good kids? I'm going to learn that from a source of truth, biblical teaching. I'm going to learn how to handle money. I'm going to learn leadership. I'm going to... Because the principles are there within biblical

wisdom. And it just gave me a framework to form my character. And so then, you know, that's why I don't read comments. because I'm not really taking a poll. We're going to do what we're going to do. And if you don't like it, it's okay.

I understand. There's a lot of stuff you can watch and a lot of stuff you can buy and other places. And it's okay. But this is who we are. And we're not trying to rub it in someone's face in terms of our faith. But it is who we are. We're not going to be apologetic about it. And then, of course, we get a lot of hate and a lot of stuff from that.

But, you know, people generally respect someone that's very, authentic. You know, I've got friends that are deeply involved in a different faith, Muslim or Jewish or whatever, and I tremendously respect them for being who they are. And it's people that change and blow with the wind and virtue signal just to be, try to let everybody know that they're, you know, I'm into this thing or I'm into that thing so that you like them. And I'm like, I don't know, that's not, We're not taking a poll. Yeah. Was there a moment for you, though, where you feel like your faith had, you know, increased?

Or was there a pivotal point, I guess, in your 20s? Yeah, you know, it did increase. It deepened in the pain, the stress level of walking through losing everything and the strain it put on our marriage. It deepened, you know, that pain point deepened the quality of our faith. And then, you know, I mean, stuff around here, we go through, we all go through crap, you know, whether it's just drama or whatever it is, or a stress point and you go, okay, I got to decide really what my center is on this. Where am I drawing my, you know, what's my source? Sure.

Really, where am I going with this? And so, you know, it's a, it's a walk. It's not a singular decision. It's not a singular inflection point. Got it. Now, you've been married for how many years? 40. 40 years.

Congratulations. Thank you. That's incredible. What have you noticed that's led to such a longstanding relationship and a happy relationship, I presume? Yeah. Sharon says we've had 33 good years of marriage. There we go. It's a good ratio.

That's not terrible. But, yeah, I mean, thank God she's not married to the guy. She married originally. He's gotten better over time. I've grown. I learned how to be a better man. Learn how to be a better husband. Learned how to be a better dad.

And now I have the privilege of being a granddad. And if I don't know how great grandkids are going to be, I'd have been nicer to their parents. But, yeah. But, yeah, that's, you know, You know, it's, it is a little bit like leading a team or raising kids or just dealing with the audience. Are you there to add value and help or are you there to take? And takers just don't, you know, the parasites of this life, they don't do as well.

And they don't have as high quality experience. And the odd thing is, is if you choose to serve, you end up, you know, in a position of prosperity in every part of your life. And so, you know, sometimes when I serve a team member, I'm asking them to work somewhere else because they suck at their job. And so they really need to go do something they're good at, you know. And, you know, we serve them by not letting the work here. We serve the rest of the team if someone's misbehaving by not letting them stay in the building.

and so that people here are safe, emotionally safe with that situation. So it's an act of service sometimes to be strong and to take action. And that's true in marriage. It's true in leadership. And it's true, certainly with kids. How do you feel that you've improved and evolved as both a husband and a father? Well, I've not arrived, but I am better. And I think I'm a better leader.

I used to be more of a boss. I'm a better but it is it's a character issue and it really does come down to you know deciding that you're going to get the most joy

out of adding value to other people you're going to get the most reward out of helping someone else do their thing without just saying okay what can I get out of this what can I get out of this

what can I get out of this one thing I kind of wanted to heart back on is the amazing culture that you guys have established here we were told by your head of security that once every week you get all 1,200 employees in one room and talk to them all about the different stuff going on with the business, for everyone to get updated on what's going on. How effective have you found that to make the culture better here?

Because I know between Graham and me and our other, I guess, partner, Alex, we don't have meetings. And it's only three people. It's through text message every now. Yeah, and I guess we could do a lot better of a job with that. I just want to know how that contributes to the culture here. And have you found that to be, I don't know, to contribute a high ROI? We've learned so many things the hard way by doing it wrong and doing it stupid. What we figured out is that where there is no communication, it's very difficult or limited communication or poor communication.

It's very difficult to build trust. And when you don't trust the people you're working with, you spend all your energy looking over your shoulder for the knife that's coming. or all your energy spent on distract instead of doing the thing. But when everybody has a level of trust, a high level of trust, it's never perfect because we're all humans. But when you have a high level of trust, things run really fast, really efficiently. Productivity goes up. And so even when there was like 10 of us, we would just get around a conference table and go,

okay, what are we working on? What's everybody doing? Because if the right hand doesn't know what the left hand is doing, they do not assume good. They assume bad. They assume it's going to be bad. And there's something bad. If they think they would rather hear bad news that's the truth than no news because they assume bad when it's no news.

And oftentimes there was no news or no good or no bad news. But if you just don't talk about it when there is bad news, you don't talk about it when and just let people know what's going on. And so the, once a week staff meeting, you mean, 1,200 people, 50 weeks a year, whatever it is, 48 weeks a year, we end up in that room. That's a heavy investment in payroll. If you just add the dollars up for an hour of that every, you know, every week. But the ROI on it is this level of trust goes up because you get to hear George up there. We had a panel with all the personalities on there the other day, this week.

And, you know, they get to see the personalities, and it was behind the scenes kind of joking. They're cutting up. You know, they're telling stories on each other and what they're working on right now, what they dream about in the future. And, you know, some of the stuff that led them here. And it was really the team gets to love the personalities and wants to work with them and for them and help them and that kind of thing. And then, you know, we had a guy get up and, you know, talk about what's happening with the high school curriculum that we've got. So we know what's going on with that. And they, you know, we're able to get that.

We're changing this around. And here's a thing we're offering. Here's a test we ran that bombed and didn't work. And, you know, people get up and tell what's happening. in the different areas of the business because there's a lot of different things going on in these buildings. And, you know, I don't even know sometimes what's going on up there. If I don't, you know, get reports in from the leadership team on it, I would have zero clue. But it's really refreshing.

And, you know, we have to be real careful for it to not be boring because you can sit over there and go, this doesn't anything to do with me. I'm so tired. I don't want to be here on one anymore. Listen to this crap. You don't want to do all that. So it needs to be quick, concise. You need to be uplifting. and it needs to be truthful.

And we also recognize people. We use it for recognition. We use it to restate the core values and say, hey, here's the core value of this. And I'll teach on it a little bit. I'll speak and that kind of thing. And so it's just a real good solid. And once we kind of said, this is a lot of money,

we really need to, because we kind of just used to walk in and just like ad hoc to it, you know. But now it's very programmed and has an agenda and how many minutes you've got. is on a clock up there. And like, I mean, it's because it's such a heavy investment, we want it to be good and tight, you know, but, uh, yeah, it, that helps a lot because then when the right end knows what the left hand is doing, things move at the speed of trust. And, you know, if I don't have to think

about whether you got my back or whether you know what the flip you're doing or whatever, then I can go do my thing and everybody, everybody's that way in the whole building. At what point did you start doing that? When there was about 10 because we've, you know, I'm like, it's amazing with 10 people that somebody could be pissed off about something that doesn't exist. You know, it's just like, they just made up something in their head driving home. They're like, you know, I just think, I think he looked at me funny today. Holy crap.

How do you do that? But, yeah, the mind does that. It goes to dark places if it doesn't have information. That's true. There was a study that was done. I found really interesting that a business, let's just say, has 10 employees. and they asked each of the 10 employees, what percentage do you contribute

to the business's success? And they added up all of the percentages of the 10 employees. And it was like, yeah, it was like 180, 200%. So it's like clearly the math doesn't work out, but they over assume what they're doing and they under assume what their, you know, partners are doing. Yeah, and, you know, well, he doesn't like me.

Yeah. Because he walked by you and maybe his wife yelled at him before he walked out this morning. He's still trying to get to a cup of coffee and leave him alone. You know, how do the meetings help with that? they flush out some of these issues? Well, when you hear what's really going on, you go, oh, well, that team over there is going through crap right now.

They're stressed. That whole product line they launched failed. And, you know, they're dealing with all that. And so maybe, you know, maybe I can cut them a little slack in the way they roll or something, you know? And so, you know, just being in the same room, you pick up on, and Dr. Dallone talks about this from a psychological standpoint. you regulate off of other people that you're in the room with.

You know, and you, over time, you're going to get a vibe and you get stable. And that's what's happened actually on the air with the personalities. It took a little time for that chemistry to lock in and stabilize and where we can just sit there and have a conversation cut up. And we can, you know, be miss with each other, mess with the guys in the booth. We can be talking to somebody on the air. Kind of know where the other one's going a little bit. And, you know, George knows where I'm going to go. and I'm hearing, yeah, he's going to take that.

I'm going to sit back and let me run that one, you know. And you get that, but that comes from just time spent together. Yeah. Has there anything else that you've learned along the way in terms of managing a business and being able to scale it efficiently? It seems like you've done an incredible job of doing that. And my fear is always overscaling, taking on too much responsibility, getting ahead of ourselves.

Whereas I think, you know, Jack is prominent that, you know, we should be expanding more. We should be taking on more. How do you find a balance for that? You know, it's just, it's worth it, but it's hard. It's not easy because you're dealing with people. And we teach when we're teaching, Entree leadership, teaching small business people about the same types of questions,

that, you know, people are going to be your greatest blessing. They're going to be the biggest line item, payroll on your P&L. Your largest investment, in other words. And they're also going to be the greatest, of pain if you love people and you care about people and you say okay I'm gonna take care of that person we're gonna do this and then you turn around six months later and they quit for a nickel an hour more or something I'm like damn you forgot about that time I gave you a car you know it's like you know it's like ow that hurt you know it leaves a mark and but you you know that doesn't

mean you can't still turn around and do something good for somebody and so um we continue to pour into continue to love people well continue to treat them like we'd want to be treated and continue to fire them if they don't fit in and if they're not going to, you know, align with who we are. And so, and the team, you know, it's like when we're bringing on new team members, I make them a promise. I promise you're not going to have to work with people of bad character and people who will not play to win. You're not going to play. You're not going to run with, you're a thoroughbred. You don't have to be, you don't have to work with donkeys.

We're going to regularly do donkey ectomies. That's funny. So we got about 20 minutes left. I think it would be interesting if we shift and talk a little bit about the economy, the stock market, real estate. Where do you see the economy heading over the next, let's say, one to two years? Because I think we have a lot of interest in catalyst going on with inflation that may have peaked, student loan forgiveness that just came up, which might have some implications down the line. Where is your stance about where we are today? It's obviously today we're in a bad place, but we're not in a devastating place. But if you want to call where we are today prosperity, you would be ignorant. And you would have to have some kind of a political agenda because any person that can look at life and look at numbers and look at the indicators in the economy, the metrics can tell we're not, this is not a time of prosperity. Now, the good news is there's always opportunity in uptimes and there's opportunity in downtimes. And so, you know, it may be a time that you take more space, that you expand your footprint, that you expand your market share.

Down times are a really good time to do that because a lot of people are sitting on the sidelines whining, sucking the thumb when things are slow. And so it's a good time to be a hard charger in the middle of that in terms of your personal reaction to it. But there's no question that we're, you know, running a, the GDP is running flat. to down just a little, up just a little, which is basically hovering around recession. We did have officially a recession to consecutive quarters of a downturn. I don't care how you want to define it. That's what they teach an econ class. But it wasn't much of one.

It was like quarter of a percent. It was a joke. As recessions go, it was a pitiful one, you know. But it's also not booming. It's not a time of great prosperity. And the fields aren't full, you know, or that kind of thing. So we definitely have that. The inflation thing was aggravated by Washington, but certainly was caused by the economic suppression around COVID.

I mean, we shut down the economy. When you shut down an economy, the size of the United States of America, the size of the world, and you want to restart it, you're going to have shortages. That's called supply chain maybe. You can call it whatever you want to call it, but you're going to have shortages. And when you have shortages, you're always going to have price increases. Thus, you're going to have inflation. And so, you know, it makes a real case for we destroyed, we economically destroyed some people's lives with the COVID policies. Sure.

Was it worth it? Well, we can argue about that. It's kind of late, but we could argue about it in the name of flattening the curve, if you remember that. That's what we were all doing. Everybody sits at home, so the factory is all shut down, so they're not making cars. So there's a car shortage. So cars go up for the first time since they've been made, used cars went up. value. Never in the history of the car has that occurred. And never again will it, unless you do

something stupid of the economy, like shut the whole freaking thing down in the name of flattening the curve. But the ripple effect is that of that you get inflation. And then you get people, you know, the Biden administration's tinkering with the energy policies in the name of green. And so they're shutting down, you know, domestic oil production are greatly curtailing it, making it an unfriendly environment for them for sure, intentionally, in the name of a green policy. And you can argue about whether that's the right thing to do or not, but you can't argue about the fact that that caused gas prices to be $5. I mean, that's where it comes from. It's a shortage. Shortage scarcity always, it's a simple supply demand curve, and the shortage always creates that. So we've got inflation

as a result of those things. I kind of think that's going to level on out. I don't think it's going to continue. If the Fed will quit screwing around with it, but they're like a mad scientist. So, but the real estate market, you know, it's crazy. It was white hot. Yeah. But a lot of that was scarcity. People sitting around looking at their house going, this house sucks. I don't spend enough time here to realize how bad it sucks.

And, you know, but I'm quarantined. I'm stuck here. So now when I, as soon as this is over, I'm going to go change houses. And boy, by God, they did. Or I'm getting out of the state. We had a migration that occurred. You know, so there's all kinds of weird stuff that's, um, probably a once-in-a-lifetime events in the real estate world.

So my guess is, and really, if you look back for the last 30 years I've been doing this, it pretty well plays out that this two shall pass. And, you know, regardless of how smart or how dumb the people in Washington are, eventually the wrinkles will be smoothed out of this. And 36 months from now, we should see a completely different economy than we do today. Yeah. I don't think inflate. This is not long-term inflationary cycle.

This is caused by shortages. Yeah. Where do you see the opportunities today for most people? I know you're talking about expanding, but I would say for the average person who's maybe concerned that home prices are going to go down. Maybe they believe that or they believe that, you know, stock prices are still high. Things are going to crash. You know, my job is going well, but where's the next opportunity? I know short-term where the next opportunity is, but I do know long-term.

I'm buying mutual funds in real estate. that's what I do. And that's my personal wealth building plan. It's not really complicated. Why? Because I'm pretty, I'm sure that an 80-year history in the stock market of the economy getting stronger and stronger, those companies continue to make profit.

And that profit results in value of those stocks going up. And over time, you know, as a grouping, the stock market, what you're saying is, is the American economy going to, permanently go down and stay down. If you say the stock market's going to go down and stay down, that's what you're saying. And I just don't believe that. And it's not weird. It's just there's an 80-year track record you can look at and go,

uh, didn't happen. Went down here. Came back up. Went down here. Came back up. Went down, you know, with quarantine. Drop, you know, through the floor.

And then was back 18 months later, six months later, whatever was back up to where it was. So, you know, I'm just going to continue to invest. It's just long term, long. time like I just you know I got in the real estate business as we said in 1978 I mean come on and so and those houses that I was selling then don't you wish you owned all of them yeah oh my gosh for what they're worth today oh of course now when you invest in real estate do you prefer residential or commercial these days it's commercial just because of skate the number of dollars involved and um residential is a great place to get started I've still got I don't know 10 15 houses or

something in our portfolio, but just because I hardly ever sell anything. Sure. Just buy it and keep it forever. Buy quality properties, add a deal, keep them forever. But commercials give me better ROI right now than, of course, our stuff's 100% paid for. We don't borrow money. But it's given me the best internal rates of return and cash on cash ROIs.

Overall, I've got one piece of commercials just sucks. I can't get it rented. But the rest of them are doing it. and really, really well. And, of course, the residential is all jamming, and the rents have gone up this year, the last two years pretty dramatically, but still not making cash on cash or cash on value with the value. If I took that million-dollar house or that $700,000 house and, you know, what's my return on it? Cash isn't that great. It's okay. But even with high rents, you know. What do you think about the movement right now, it seems, that landlords are even,

they're taking advantage of their tenants. It seems like there's been a shift over the last two years with rents and house prices going up, that buying a house right now is immoral. What are your thoughts on that? Because that's a movement that I've seen that's been taking a stronger hold than I would have expected. Yeah, that comes and goes to. I mean, when people are hurting and they're scared, socialism gets in vogue. and being angry.

Australians call it Tall poppy syndrome which is an Aristotle thing actually is the poppy that gets higher has to be cut down. And so anybody that makes money must be destroyed, anybody that's successful must be destroyed so that we're all equal.

And which, you know, as we have figured out, we are not all equal. It doesn't work out that way. I mean, it turns out that Brad Paisley's better at playing a guitar than I am. And we're not all equal. And it turns out that other people, you know, my friend Brad Thor sells, he does a fiction book on spies and sells 15 million per copy, which pisses me off. But, you know, we're not all equal.

But I don't think Brad should be destroyed because he sold more books than I did. I'm happy for him. And it didn't cost me anything except when I bought a copy. But, I mean, it was not, you know, so it's that kind of stuff. But it's at the core of that is the kind of the wealth inequality concept. the movement or the socialism idea that, you know, if you're somehow a capitalist that you are evil. And really the core of all of that is two of the deadly sins, envy and jealousy. Jealousy is, I want what you have. envy is I don't think you should have it.

And this is envy. You should be, you know, you should be, it should be taken away from you because you bought a house and charged rent. Yeah, I mean, one of the things got really excited about something I sat on the air and trashed me. I can't remember who it was. And one of the YouTubers or somebody, because I said, yeah, I'm going to raise my rents. I'm like, well, you're not a Christian. I'm like, Christians don't raise rents? What kind of dumb butt statement is that?

Of course we raise rents. You know, we charge market rent. It's not evil. You're not evil. You're providing a house and you don't have to live there. Well, where are your people going to live that can't afford it? Somewhere else, you know. I grew up in a neighborhood.

that was over the tracks from this neighborhood. And when we were growing up, we went, hey, rich people live over there. I can't afford to live over there. That's what we said, you know, and I can't afford to live there anymore. The rents went up. And, you know, if you make $45,000 a year, you cannot live in Manhattan. Hello, you can't pay the rent. Welcome to life.

You're going to have to make more if you're going to live in Manhattan. That's how it works. Well, it's evil. No, it's not evil. It's just math. Math is not evil. It's not, nobody's doing anything wrong. Nobody's out to hurt you.

It's just, you know, you don't get a pass on math because you got your little butt hurt feelings. Yeah, I will say, I did make a mistake. Two years ago, I made a comment to Kevin O'Leary, who reviewed my portfolio, and we got to a property and we explained the cash money. He looked at one property. He says, well, the rents on this is lower than every other place that you have. And I said, well, I've never raised the rent on that tenant. And it was 10 years I had not raised the rent. She was a great tenant, never a single issue, always paid on time.

treated the place like her own. And I figured, you know what, I wouldn't raise the rent, makes my life easy, don't have to think about it, she's there. She was a tenant 10 years later had some issues. And I don't want to go into detail, but I wish I should have raised the rent. It was a huge mistake that I made looking back that I should have done that as part of a smart business. Exactly. No, and it's also psychological, okay, because she started to get confused at some point who owned the house.

Yeah. And so with our tenants and with our advertisers, we go up every year. $25? I don't know. But we go up every year. We don't want anyone to go, well, I'm doing him a favor by being here. And so, no, this is a transaction. I mean, you're going to pay the rent and you get to stay.

This is a transaction. And I'm going to take care of the stuff that's broken and I'm going to be kind to you and nice to you. But you are not entitled because you have been here a long time to cheaper rent. I will maybe not raise it all the way to market to not push somebody out because of the cost of a turnover. But that's an economic decision. Yeah. That's not a, I'm doing you a favor. And then if you run your business well, then you can choose as a one-off in a situation to be kind to someone.

We had a tenant that was going through cancer treatments and the family was just destroyed. And so we not only didn't go up on rent, we just gave them like three months with no rent just to help them. But that was an act of kindness and generosity that was not a statement of previously we've been doing something evil. And now we're going to do something good. No, instead, we're having a transaction here, pay your rent, you get to stay. This is the value of the property. And it doesn't work anymore. And, oh, you've got a life thing and I've got some margins, so I can just be kind.

I can just be generous. and give you a little time off. And we did do that. We bought a building one time in a foreclosure that had a church operation, operating a daycare. And the daycare was primarily serving the underserved area, a lower income situation. And they didn't have much margin in running that thing. And they were running a nonprofit.

We sat down with the guys. And, you know, we ended up giving them the first six months after we bought the building free. So they could get up, get things running. But it wasn't because, because, charging rent was evil. It was because we were able to help these people get their business situated, and that was a nice, good thing to do. Generosity-wise, but now it's ridiculous. So we always go up on rents every year. I wanted to learn. There's a certain investing philosophy. I know you feel very strongly about, which is debt. And I'm assuming you probably share that sentiment with

Dave. So Graham and I have had very unique experiences with debt. Graham utilized debt extremely well to grow his real estate portfolio. In the beginning, he took on a decent amount of debt and was able to leverage because of that. I have had a good and bad experience with debt. I bought a house I wouldn't have been able to afford without debt. And since I bought it, I've appreciated maybe I've gained probably $90,000, $100,000 or so in equity. On the flip side, I had a stock portfolio. That's kind of my fun portfolio.

And I brought it up from 20 or so thousand to like $75,000. And right around $75,000, I went in on March. Yeah, so I know where this is going. Yeah, and unfortunately that was in December. So. Yeah, and the timing sucks. It was really bad. See, I thought inverse Jack's trades, you'll make it.

You really would, yeah. It's true, but unfortunately, yeah. But I basically thought I was a genius because I was making money all last year, and I'm like, you know what, I got this, I'm just going to continue doing what I have been doing, but this time I'm going to leverage. I had the money, I had the cash, but I decided leverage, why not? It's on Robin Hood. So I did that.

And currently sitting at about 7,000 from 75,000. And, you know, so I've had both good and bad experiences with debt. And I wanted to know, because maybe the average person isn't as responsible as maybe Graham is with that. Maybe they're like me on my Robin Hood thing. Do you say debt is bad? Because for the average person, that is a good principle to live by. And with that, I kind of agree with you. However, if people do utilize debt in an effective way, such as Graham, he's very responsible, very well researched on the markets and how he can leverage his money with debt, do you think that that is a more effective way to grow fast if you're calculated with it?

It is a more effective way to grow fast, if that's your goal. But what people leave out of the discussion is that you've increased your risk exponentially. More debt equals more risk, period. And so, you know, after I went broke, I had to analyze and go, okay, what went wrong here? And because was it, see, I had never lost money on a flip. I was not behind on the notes. They just called them. They had the ability to do that because it was commercial paper.

It wasn't traditional mortgages. It was 90-day paper. And so, you know, what amounted to was, and so I had proven track record of making. money. I mean, I did. I probably own 2,000 pieces of real estate in my life. And so I was doing a lot of flips. And some of I was doing in 24 hours. You know, I'd just buy them and flip them to another investor and make 10 grand and keep walking, you know, that kind of stuff. So I was doing 100% of financed. I didn't put any money in it. I didn't have any money. So I talked a guy into giving me 100% deal on this house. I flipped it. I made 10 grand. And I talked him into doing it again. Then I talked

him into doing it again. Then I talked to him into doing a million two and uh with that one bank. And yeah, so it set me up. And so after I crashed, I kind of had to go through a CSI, you know, an autopsy. And go, okay, why did the patient die? You know, so what I, you know, because everything I was taught, I grew up in the real estate business. And when you, when you're in the real estate business as a profession, one of the rules is they take your risk meter out and they sit on the table and they break it. So you have no, you have no ability to perceive risk because everything's good. You Everything's going up. And, you know, and, you know, it always works. And the mythology that just because something worked once, it's always going to work every time. So I had to go through kind of a healing of my heart in that regard and go, oh, wait a minute, this is risk. Oh, wait a minute, OPM, other people's money. Yeah. It's kind of got that get rich, quick, slimy vibe to it, you know, and all that. But there are people that intelligently, more intelligently than that use debt. And so there's a spectrum there. But even those, are taking on risk.

And so when you have, Buffett says, when the tide goes out, you can tell who's skinny dipping. So when you stress test with an economic problem of some kind, outside variable or inside variable, inside your organization or your life, inside your portfolio, or the economy, like a quarantine type thing comes up or inflation or recession. And you stress test your theories, you know, you can tell who's skinny dipping. when the tide goes out. And if your theories don't last. And so the only one I've ever found,

and this comes back to my faith journeys where it started, the borrower, slave to the lender, I can find nowhere in scripture that debt was used to bless people. And so then I've got to think, okay, do I believe that or do I believe my academic training? I've got a degree in finance. I know how to run an IRA, you know?

And I know what the IRA looks like with debt and without debt. And it's not nearly as good unless you're leveraged. But you can run an IRR through the roof with leverage. Guess what's left out of the IRR calculation? There's no math inserted for risk. The IRR is agnostic to risk. It doesn't recognize it.

And so while you see this great rate of return, there's zero risk showing up in there. The chance that you lose the thing or the chance that the stress brings on your life or what it does to your marriage or what it does to your body to carry around the weight of that. None of that is parlayed into there. And real estate is unique in that way because other investment vehicles teach us to mathematically insert risk. For instance, two mutual funds, you would never compare an aggressive growth stock mutual fund with a growth and income. Okay. And if you look at the chart, you know, the growth and income is kind of like this and the aggressive growth like this, right? And that's the risk factor.

And the highs and lows on that, you all probably know this is called for our audience at home. the change, the rapid change, is measured by a thing called a beta. And a beta is a statistical measure of risk. It's a math number. And so a beta of 1.0 for those at home means that that particular mutual fund is exactly what the stock market. It's a S&P 500. It's doing what the stock market is doing. A beta of 2.0, it means it's twice as risky.

So this is an aggressive growth emerging market type stock fund portfolio. And so it's twice as risky as the market. So the way you would adjust for risk between a beta of a 0.8, which might be like a growth in income, versus a beta of 2.0, is you insert the beta in an inverse in the math formula, and you adjust for risk so you can compare these two apples to apples even though after risk, a post-risk analysis. We don't do that in real estate. No one ever talks about that in real estate. It doesn't even come up. but we have kind of a brain and our brain says oh wait a minute if i'm a 110 percent leverage in real estate that's probably not good you know where would you say the risk is though let's say on a three percent mortgage or an interest rate that's below inflation because from my perspective it seems like there's less risk it is and having cash in the bank then tied up in a property that

might not be as easily accessible that in the event of a job loss or something happens you'll have cash that you could easily access versus in a property where it might be difficult to take out of it. Like if you need the money, like something comes up and it exceeds your emergency fund that maybe it's harder to tap into if that's your last case resort. Well, the differences are we talking about the shortest path to bankruptcy or the shortest path to wealth? What you're describing is not going to lead you to bankruptcy. And so it's a nuanced argument at that point. And so like, you know, because we're not talking about a get rich quick 100% you know portfolio and you're just trying to use an inflationary number to offset your interest rates and that that doesn't play a long term. But, you know, where you've got a high cash position, a high equity position, lower debt, well, guess what?

Your risk is so low that it's hot, but that the debt represents that your beta would not be a 2.0. It would be a point 25, you know, but there is still a risk. that is there that is not there if the house is 100% paid for, the property is 100% paid for. Because then if your tenant doesn't pay because of pandemic, oh, and by the way, you can't evict them because of a moratorium on evictions. And so you got zero cash coming in and nothing you can do about it. Or are they going to Chapter 13, take six months to get them out? Yeah, you got zero cash coming in and not squat you can do about it. and legally, I mean, you're going to get real criminal crap if you start messing with those things, right? So you cannot.

And so you're riding checks. I'm not. And I'm sitting here smiling and going, okay, we got a big pile of cash and we got all these buildings paid for. And we had entire segments of our revenue just evaporate with the quarantine. Like live events didn't exist obviously, right? That kind of stuff. and we're going, this ain't good because we're going to, if this thing goes down into the red, and we start burning that cash, what's our burn rate, and how long before we start,

leadership doesn't take pay, and how long after that before we start having to furlough people or lay people off? And we're running those calculations during that short period of time that we were off. But we did not have added to that the burn rate of the rent, burning through the cash. Yeah. Or the payment on the buildings. I mean, can you, imagine the payment on these buildings if I'd have been burning that cash during that. Holy crud. Yeah. But, you know, so one less thing to worry about, right?

But it's a risk analysis is what it is. And if you 100 percent, I run 100 percent debt-free portfolio. And so I have zero pressure to, or virtually zero pressure to make that property inordinately perform in a stressful situation. So I make different decisions about tenants. I don't need a tenant. And so I don't get as many bad ones because I'm willing to go, Yeah, we'll sit here another month.

If it takes another month to fill it, that's better than putting that bozo in there. He's going to change his Harley Oil in the living room. I can feel it, you know? You know what I'm talking about? And so, but I remember when I had payments on properties in my other life and I'd be going, I got to make this dead gun payment. I didn't get a tenant in here. And, you know, all of a sudden, your little IRR thing you did when you bought the property

and you ran your pro forma out on a, you know, you ran a, out the NOI and you run the whole thing out through there, all of a sudden you go, oh, that's out the window. You're just like, crap, I got to make the payment. And you forget thinking about that. And so you kind of have that same lookie. And he's talking about $7,000 a minute ago, you know, and it's, but I've been, hey dude, I did it. I did it with millions. So you're not, nearly as dumb as I am. But yeah, that's where it comes from. So, you know, the, 100% debt-free works in prosperity. And it works. And it works. in downtimes. The more debt you use, the more prosperity is required in the marketplace for you to

succeed to overcome the risk. That's all it is. And so I just decided I'm wounded. I'm not borrow money, period. And Joe and Susie consumer, you know, when I can get them 100% out of debt, their probability of walking into a million dollar net worth increases dramatically, dramatically, because they're not trying to, you know, of all the 10,000 millionaires, we interviewed 10,167 millionaires, and our largest study of millionaires ever done. Precisely zero said I became a millionaire because I borrowed all I could on my personal residence at 3%. And I parlayed that in the stock market and it made me a millionaire. None of them said that.

Zero. That's bizarre. I mean, zero said that. Zero also said, you know, my airline miles that I got on my credit card, you know. That's him. That's this time. I'm the opposite. I'm like, yeah, because I borrowed money.

How many credit cards do you have? Probably 10. What does that make you feel inside? But they're all paid off. They're all paid off. They're all paid off. There's zero balance. No, I love it.

That was mean. That was mean when it was like, you're going easy. I look at the flights that I'm just because I love you, Graham. It's okay. Because I love you, man. The hotels. We booked a whole trip to Hawaii last year, all paid. Yeah, because you couldn't afford it otherwise.

Yeah. But it was free. It was a free trip. Yeah, it was free. Except you spend 12 to 18% more when you use plastic on average. I don't think so. I don't know. The behavior studies show that.

I'm sure they do. I had to buy him his iced coffee this morning, Dave. You know, I brought a coffee from the Airbnb that I made there, and I still have it in a plastic cup because I knew that I just habitually make my own coffee. My default is don't spend money. You are frugal. Yeah, the default is always, I'm not going to spend. You're known for being.

Cheap. That's a. Is it cheap or frugal? No, it's getting better. You are getting better. I'm very proud of you. Well, thank you guys so much. I see we're running over a little bit on time, but I don't want to hold this up.

Thank you guys so much. It's an honor to be with you guys. I really appreciate it. Love what you do. Love the podcast. You guys are amazing. Thank you so much. Thank you.

Thank you for agreeing to do this. Thank you, George, for setting this up. And we got another really exciting video planned right after this. So make sure to check out the main channel right now. It's worth it. And I'll see you very shortly. Appreciate you guys. Thank you.

What's fun. I've done this for another few hours.