From Financial Failure To Money Master
From Financial Failure To Money Master
How can business owners align personal values with business practices?
I believe we can all look at the world—whether it's politics, the environment, business, relationships, or marriage—and feel like something isn’t right. I think we all have an innate sense that life wasn’t meant to be this way. My desire, put simply, is to bring a sense of heaven to earth in every relationship, business, and interaction—even with something as small as a phone call with a telemarketer. I want to make people happier and help them become better.
Whether it’s an employee who eventually leaves or someone we work with, I want their life to be better afterward than it was before. This is especially true when it comes to our investors. I became a Christian 38 years ago, and for the first 28 of those years, I struggled with a problem—it was all in my head. I used to believe there was a separation between my personal life and my business life. Or, to put it another way, between my business and my faith. I’ve since realized that’s not true at all.
Some people talk about the 'seven mountains of culture.' These seven areas—business, arts, government, family, religion, entertainment, and sports—are all meant to work as they were designed. None of them are separate from each other. If I’m in the business world, that doesn’t mean it’s separate from my family life or my faith. Everything is integrated. For example, I had the opportunity to support one of our investors who was going through a tough time. I even prayed with them earlier today. That’s going to make their life better. And that’s my desire—something I realized about 10 years ago.
What should business owners look for in a business partner?
The best business decision I stumbled upon was meeting a junior at Liberty University named Ben about 10 or 11 years ago. Unlike most people who claim they want a mentor or mastermind, Ben actually followed up. We met by chance at a spring break camp where my daughter and he were around the same age. He reached out, asking to pick my brain, and we ended up spending three hours at my picnic table talking. Afterward, I stayed in touch with him and eventually hired him when he was a senior at Liberty University.
Ben has become an integrator in the EOS (Entrepreneurial Operating System) world for those familiar with Gino Wickman’s Traction. According to an EOS consultant who has worked with hundreds of companies, at 27, Ben was already on par with the best integrators he had ever met. This matters because I’m a visionary entrepreneur. I’m always dreaming, thinking up the next big idea, meeting people, and turning a quick coffee into a two-hour conversation. Ben, on the other hand, is focused on timelines, deadlines, accountability, and managing people. He excels at these things.
The reason this business has succeeded, compared to others that didn’t, is because Ben is a fantastic integrator. He allows me to focus on the big ideas while he runs the day-to-day operations. In the past, I partnered with my best friend several times, but we were too similar, and it didn’t work. One time, we were managing a multifamily property, and I was supposed to handle the deals, raise the money, and then hand off operations to him. But he turned out to be more like me than he realized. It wasn’t that he misled me—he thought he was an operations guy, but in practice, he wasn’t.
When I met Ben, I realized what a true operations person looks like. So, my advice is, don’t partner with someone who’s just like you. Your partner should have complementary skills, even if you don’t necessarily like them as much, as long as you work well together.
How can business owners know when to quit or keep pushing forward?
One principle we learned is to walk away quickly. One of our guests from Charlottesville, Virginia, who runs a real estate mastermind and mentoring program, shared this advice: "You want to know how to become a millionaire in real estate or the restaurant business? Start with $2 million and buy a restaurant." The point he was making is that if you see you're on the wrong path, you need to walk away fast. Salvage as much as you can and start fresh. I’ve failed at that before. We had a successful multifamily business in North Dakota in the Bakken, focused on employee housing for the oil and gas industry. It was going well, but we saw that the internet service was terrible there. Thousands of people were coming into a town of only 3,000 residents, and they needed internet and cell service. So, we started Bakken Wireless.
We spent hundreds of thousands of dollars over several years trying to make it profitable and failed. In hindsight, we should have pulled the plug six months in when we realized the wireless radios were freezing in the -40-degree North Dakota winters. We could have saved ourselves a lot of money, but we didn’t. The lesson here is to walk away quickly when you know you're on the wrong path.
Now, here’s the flip side. The second principle we learned from the show is never to walk away quickly. Stick with it, persist, and never give up. You’ve probably seen that picture of a pelican swallowing a frog, but the frog has its hands around the pelican’s neck, and the caption says, "Never give up." We had guests on the show who said if they had quit when they wanted to, they would have missed out on their biggest break just months later.
So, how do you reconcile these two opposite lessons? It comes down to this: If you're on the wrong path, with the wrong people, or wrong product, quit quickly or pivot. But if you believe you're on the right path with the right people and the right product, that's when you persist and don’t give up.
How do mentors impact decision-making in business?
Proverbs says, “In the abundance of counselors, there is wisdom.” That’s a paraphrase, but it’s close. We had people on the podcast who said they needed others in their lives to confront them, be honest, hold them accountable, and speak the truth. On the other hand, we also had guests who said they had to ignore all the voices around them because they knew they were right and could succeed.
One simple principle is that the right answer often comes from a voice that sounds a lot like my wife. For example, with the Bakken Wireless project, I remember being excited, telling her how we were going to make millions, and she said, “I don’t feel good about this. Don’t do it.” She kept saying that, even though she couldn’t give me solid reasons. Somehow, she had an incredible ability to discern it was a bad idea. So, guys, listen to your wives. As for wives, I’m not sure if you should listen to your husbands, but that’s my two cents.
Interestingly, many of our failures, which was a theme of our podcast, are often the launching points for our greatest successes. In my own life, being a speculator was the launchpad for me to become the complete opposite now. I can’t say I hate speculation, but I believe the majority of wealth is created through careful, wise planning—stone upon stone, growing slowly. Howard Marks says, “The seeds of success are born in our failures,” and I believe that’s true. Someone once said they would never invest with someone who hasn’t failed before, and I think there’s truth in that.
What are the benefits of pursuing smaller, steady gains rather than big wins in real estate?
We’re doing the same thing we were doing when the market was booming—aiming for singles and doubles while many others were hitting grand slams. And we’ll probably continue with that strategy. In commercial real estate, like in many businesses, you can find opportunities even in downturns.
Let me back up. Warren Buffett talks about the efficient market hypothesis, saying he roots for everyone to believe it because it allows him to profit by proving it wrong. The idea is that while the market is generally efficient, there are exceptions, and that’s where the money is made in stocks and business investments.
The same applies to commercial real estate. While the general market may be struggling—cap rates are expanding, values are dropping, and people with floating rate debt are in trouble—there are still exceptions. And those exceptions usually come from finding unique, under-managed, well-located deals. It’s a lot of work. It’s not just browsing a broker’s website; it’s about digging deep to find those mom-and-pop properties that are neglected but have great potential.
For example, we recently invested in a self-storage property near Las Vegas where the market rate for a 10x10 unit was $148, but this property was charging only $60. They weren’t full, had no marketing, homeless people were living there, and they weren’t even collecting rent from some tenants. There was no website or proper signage. We bought the asset at a fair price and began turning it around by cleaning it up, enforcing rent payments, putting up proper signage, building a website, and getting professional management. Even raising rents halfway to the market rate made it a huge win. Since the operator paid cash, it became a very safe investment.
I could give more examples of similar neglected properties we’ve invested in. One was a self-storage facility where the owner had been getting calls from us since 2014. He finally asked if we’d pay the same price we offered back then, despite the property’s decline. We agreed, paid what he thought was a high price, and now we’re turning it around, potentially doubling its value and significantly increasing equity. When you have several deals like that in your portfolio, it makes you feel more secure in any economy.
*This interview has been edited and condensed for clarity.*
