Wealth Question And Guest Setup

SPEAKER_00 0:12

Ready to get the inside scoop on equity funding? Tune in to TDJ Equity Funding Insiders Podcast for an in-depth look at what it takes to access financial capital and maximize your investment. Hear from experienced professionals, including bankers, underwriters, loan officers, and industry experts, as they share their unfiltered stories and valuable lessons on securing funds.

Jacquelyn Jackson 0:42

Welcome to TDJ Equity Funding Insiders, where we have a real conversation about funding, capital, cash flow, and the financial discussions that shape business growth. I'm your host, Jacqueline Jackson, capitalist assets advisor and founder of TDJ Equity Funding. Today we are asking an important question. Are you building wealth you can actually use or simply placing money into a system that may not support the freedom you are working so hard to create? My guest is Russ Morgan. He's a co-founder and partner of Wealth Without Wall Street. He's co-host of the Wealth Without Wall Street podcast, and he's a co-author of Wealth Without Wall Street: Three Steps to Freedom through Passive Income Book. Russ began his career as an investment advisor and now teaches people how to create investable cash flows, evaluate opportunities more intelligently, and build passive income with greater control. Russ, welcome to the TDJ Equity Funding Insiders.

SPEAKER_01 1:49

All right, Jackie, thank you so much for having me. It's a pleasure to be here.

Jacquelyn Jackson 1:53

And we are looking forward, like I told you before, we've we've been looking forward to hearing from you because a lot of us are in business, and mainly I'm gonna say my women group, we all kind of discussed you that we're we're accomplished women, we have our business, we're making money, making revenue, but when it comes to investment, and I know I've talked to you about this before, we don't know where we should be doing our money, where should we put it? We just following along to just get along. So I wanted you to be here today, and I'm glad you made time for us. And I want to start with the first question.

2008 Crisis And Broken Advice

Jacquelyn Jackson 2:24

I want to know a little bit about you. You began your career as an investment advisor like in 2004. So, what caused you to begin questioning the traditional financial models?

SPEAKER_01 2:35

Well, Jackie, um, it was a thing called the uh great financial crisis. Have you heard of it? Any of it, but go ahead. Yeah, we did. So for those who who were who who maybe have forgotten or potentially were not involved in that, uh, or you know, maybe had money involved in 2008. There was this global financial crisis that impacted a lot of people. And as an investment advisor at the time, there I was, Jackie, supposedly the the go-to expert, right? For all the people around me. All the all those people you were just describing says, I don't know what to do with my money. Well, they were supposed to give it to people like me who supposedly were knowing what to do with the money, right? I was even a certified financial planner. That's like this fancy title that only a fraction of financial advisors ever uh are able to accomplish to get that certification. And I was just as lost as everybody else. And I was only four years in the business, right? That's 2008. You said I started in 2004, and you're like, well, okay, that's not bad. But see, Jackie, I went to the mentors, to the people who had been in the business 20, 30 years, people that I looked up to and asked all my questions of. And when I went to them and I said, Jackie, what is going wrong? Why is the market falling? And even more importantly, what is going to keep it from happening again? You know what the response was? I I don't know. I don't know. They were just as scared as everybody else. And for me, that didn't sit right, right? Like there I was. I was supposed to be the person people came to, and I didn't have the answer. So I knew that the typical traditional financial model was broken, and I needed to figure out what was the other alternative. What could I do differently?

Jacquelyn Jackson 4:24

Right, exactly. So that that's understandable. I'm glad you I hate that happened, but I'm glad that happened because look what we got today. Because now you can educate us on what to do and not to do. So you have a phrase with without Wall Street. What are you encouraging people to do when you say that?

SPEAKER_01 4:42

Man, I'm taking take ownership, be involved, right? When we say Wall Street, more times than not, we're we're talking about a mindset of just abdicating the responsibility to someone else. And I'm not saying that you have to be like day-to-day involved, like you need to do your job and do this job as well. I'm not saying that. But what I will tell you is that no one's gonna care about your money as much as you do. And the abdicating, hitting the easy button, assuming someone else is gonna take care of it because they're looking out for your best interest is just a fallacy. I know it. I lived it, I was a part of that world. So what we're talking about is how do you get involved? Robert Kiyosaki has a great phrase, says there's no good or bad investments, they're just good or bad investors. And most people, if they truly evaluated themselves, would give themselves a D. They would give them a D in understanding of money and investing and all of that. And these are people, smart people like you're just talking about, people who are really good at doing one thing and money's not that thing. And what I would say is that you should take a little bit of time to understand how all of this works so that you can at least be able to inspect what you expect.

Jacquelyn Jackson 5:56

Exactly. So let me ask you this so with the wealth without Wall Street, what are you not telling them to do? What should they not do?

Redefining Financial Freedom

SPEAKER_01 6:05

Well, I I'm telling them not to uh consider that putting money away for the you know 30 years, 40 years of retirement plans. I'm telling them that is not a great strategy because financial freedom doesn't have an age on it. But yet the Wall Street World puts an age on it. They put 59 and a half, right? They say you can't touch money until this magical year and a half, right? Like it's like I thought we quit talking about half years when we were like nine, right? Like, how old are you? Nine and a half, but no, people yeah, the the financial world has created that model. So financial freedom is actually when your passive income exceeds your monthly expenses. And Jackie, you can be 18, 28, 38, 58. It doesn't matter. And so we're talking to people about not thinking about retirement because retirement is getting enough money to live and compared to financial freedom is having enough money to live and do whatever you want to with it.

Jacquelyn Jackson 7:03

Right. So as business owners, this is a question that kind of came up was you know, many business owners increase their revenue, okay, without becoming proportionally more financial free. So why does that happen though?

SPEAKER_01 7:17

Well, I mean, so business owners are definitely focused on increasing revenue in their business. That's the one thing you know, right? It's the thing that you spend all of your time and effort on. It is your gifting. And it's easier to just figure out ways to build more revenue in our businesses than it is to try to create something on the opposite end, right? Like that's something I don't know. And we just assume that, man, that's going to all pay off. But yet, when you look at the statistics, like less than 8% of all businesses that have ever opened will ever sell. And a fraction of those will end up selling to someone who's not in the family. So when I talk to business owners, I'm like, look, you didn't get in business to make money for the business. You got in business to make money for yourself. We got to figure out ways to create an opportunity, a parachute that has nothing to do with the business. And if you can do that, then now you get to show up, serve, and do all of that because you want to and not because you have to.

Jacquelyn Jackson 8:13

Exactly. So let me ask you this, which I really want to know what you say about it. How do you define financial freedom in miserable terms?

SPEAKER_01 8:23

Yeah, well, it if you took all the money that comes in from things that you did not have to go to work for, right? Like, so I bet you there's somebody on here who owns a rental property. Somebody on here has uh some sort of uh loan that they lent somebody and they're paying them interest, right? Maybe they've invested in a syndication, an apartment complex, an oil and gas fund, something, right? That's what we would refer to as quote unquote passive income. If you take that and you divide it into the number um of that you spend every single month, all your monthly expenses, that's going to be what financial freedom is. It's when that number on the left side, the passive income, is greater than the number on the right side, which is your monthly expenses.

Jacquelyn Jackson 9:03

All right. So is that the freedom score?

SPEAKER_01 9:06

It is your freedom score because right now your freedom score most likely it may be zero. It might be 10%, right? So if you took the number on the left, let me just use simple numbers. Let's say I had $1,000 a month coming in from passive income and I had $10,000 a month going out in monthly expenses. If you took a thousand and divided into $10,000, you'd be 10%, right? That would be your current freedom score. Well, when that 10% becomes 100% or greater, now you're financially free.

Jacquelyn Jackson 9:34

That sounds good. That I can

Freedom Score And Personal P&L

Jacquelyn Jackson 9:36

relate to. So when it comes to personal financial reports or numbers that we should as business owners review regularly, what are those numbers you think we should review regularly?

SPEAKER_01 9:46

Yeah, well, a business owner, because I'm one too, right? I've owned so many different businesses. I've actually been told by my CPAs they no more LLCs this year, Russell Kate, no more. We got enough, right? Here we are. We're recording this October 15th. And boy, I've I've been turning this jokers for a loop. I mean, for the last month, right? So, but they're like, no more. Well, the thing that I know as a business owner is that we focus, we live or die by a profit and loss statement, right? We okay we look at it, it tells us, it informs us, it helps us know if we're going up or we're going down, and we make decisions based upon it. But when I talk to business owners, I say, well, tell me about your personal profit and loss statement. Show that to me. And they're like, uh, about that. I don't have that. And so that's the one thing I would tell business owners is don't just focus on the business's profit and loss statement. Create one for yourself. Have a personal profit and loss statement. How do we get how are we getting money out of the business to the personal finances? How much of that are we not having to just consume? How much of that are we using to create another income stream that can start to offset our monthly expenses and ultimately make our business irrelevant, right? Like Jackie, I took 30 days off this summer and 100% of that was paid for, not by my operating companies, but by my passive income businesses. That is what it looks like when you're financially free, is that the business that you've created is great. Let it go, let it run, let it bring in all the money you want to, but it should be there to be building another business that will produce all the income you'll ever need to spend. And that's when you become financially free.

Jacquelyn Jackson 11:26

And that makes a lot of sense. That also leads into this, then. So when we have um business owners, we have a cash flow. So, and we want to take our um turn our business cash flow into investable cash flow without starving the company of the working capital it needs. How do we do that?

SPEAKER_01 11:46

Yeah, there's a lot of things. I I think we talked about this before, but I would I would love to plug this guy's book. I get no benefit from it other than I just see so many people being successful as a result. But there's a book called Profit First. Um, and Mike Mikalowitz has done an amazing job with that book of teaching business owners how to build their cash flow system in a way and get money out of the business to you first, right? If you put yourself at the end of the line of receiving, there'll be nothing left. And what I learned from one of my mentors, he talked about this idea about economic value add. And it may not, that term may not make sense, but you'll understand what I talk about. He he said, if you go back and you look at some of the most successful businesses in the world, what they would do is that in order to start up a new business, like a new operation, what they would do is they would run all the math and they would say, okay, even though we have all the capital here in the business, we're not just going to go pay cash. We're actually going to finance this new operation from this business, right? So we're going to create a loan to the new business and it has to be able to pay that loan back to us. And if it can't, it tells us that we should not do it. And I think so many business owners, they make decisions off of what's sitting in a bank account and never evaluating what whether or not the decision they're making is profitable or not. Especially as we come closer to the end of the year, you're going to have an accountant tell you, you know what, Jack, you've made a lot of money this year. Here's the best thing we need to do. You got all you got 200,000 sitting in your retained earnings account. Let's just go take 100,000 of that and go buy you this new car, this new whatever. And it's like, come on, guys, like there are better things for us to do than that. So I would say first, understanding how to get money out of the business to yourself and make sure that the things, if you are going to quote unquote reinvest in the business, charge the business interest. Like if the business can't afford it, it should tell you it shouldn't be a thing that you do.

Jacquelyn Jackson 13:46

Right, right. That makes a lot of sense, too, as well. So let's look at this.

Profit First And Smart Reserves

Jacquelyn Jackson 13:50

So, how should an owner balance a business reserves based on what you're talking about? How should we balance that?

SPEAKER_01 13:56

Yeah, so the thing that I've done for so many years. So I read this book called Becoming Your Own Banker. That was one of the first things that came across my desk. It was a man named Nelson Nash. He was an economist when I met him. It was probably in his mid-70s. Um, he happened to end up living in my hometown. I met him at an event when I was down in Orlando, Florida. But when I came back, I was reading his book, and on the back of the book, he had his address and it said Birmingham, Alabama, of all places. And so I reached out to him and man, he took me under his wing. He was really uh excited to have someone locally traveled all over North America doing these conferences and teaching. But he said, never had anybody in Birmingham who had ever like started talking to him about this. So I got the benefit of this like 75-year-old financial genius to be able to pour into me for 10 years before he passed. And he he was sharing with me all of these ideas. And one of the things he said was, Russ, look, you should not be holding all the money in the business. You need to pull the money out and get it privately held, right? And he talked about how to hold money in these things called specifically designed whole life contracts. And he's like, This reservoir, this reserve, he said, Russ, it's gonna be the most protected asset that you will own. Meaning in almost every state in which you live in, it didn't matter what happened, they're not touching that money. As compared to any of your business, there's there's a lot of opportunity where that business can get that that those accounts can get access for different purposes. He's like, but you put it here now from this pot of money. Now you can, if the business needs it, just like any outside entity, it needs to charge it interest. If you want to, and I did that with my wife. My wife had a dental practice, and so we started lending money to her dental practices as she was expanding, and the dental practice started paying us back. But also with those reserves, it can be used, used those same reserves to actually incentivize team members, employees to stay with us long term. It didn't have to just be sitting in a retained earnings account. We've got these A players that we don't want to leave. Well, what if we could incentivize them? Hey, if you stay with us for 10 years, this pot of money that you know we set aside could be yours, right? And we could incentivize them that way. But also, what if we could take those same dollars and we could go buy other assets and start producing passive income? So now you have a dollar doing two, three, four jobs at once. That's what business owners need. So many people tell me, Russ, I got money sitting in accounts just growing mold. And it's because I don't know what to do with it. And I was like, because no one showed you. And let's talk about what you can do so that way you don't have it growing mold and you can get all of these benefits from it.

Jacquelyn Jackson 16:28

And it sounds like, you know, you're giving, you know, the business owner plan. I mean, it's not just like you said, not just building your business, but let's also look at what we're gonna do with your reserves. You just can't, and we are taught, like you said, let it sit there, or at the end of the year we're gonna buy something big. So I think that's something with, you know, as business owner, our listeners are listening for, that we pay attention to that. So we got to change our mindset. And that's what it sounds like, Rush, you're telling us to kind of go that way.

SPEAKER_01 16:52

Now I know you I'm gonna add to that real quick, Jackie, because the thing so many people in business have learned that the business runs on processes and systems, right? And if we don't have those, things don't run well, right? We've all gone through our seasons and we're like, oops, we probably should have written that down. We should have had that standard operating procedure, right? Some of us even went and like started implementing different operating systems, like EOS, right? Is one of those that a lot of business owners have done. Well, what operating system do we have for our money, though? Like as business owners, as entrepreneurs, we need an operating system. There's a saying out there that says, I think it's James Clear's saying it says that you don't rise to the level of your goals, you fall to the level of your systems. And so when we don't have good systems, not only do our businesses fail, but our our operating systems for our finance fails. And so we actually built a passive income operating system, a way business owners do create and follow a plan, right? There's steps to becoming financially free, and you don't skip steps. We built those steps, like in order to organize everything in a way that you go from organizing your money to storing it and then putting it to work so now you can rinse and repeat and get the the results that you're wanting, right?

Jacquelyn Jackson 18:06

Right, which is really good. I like that. So that leads us into where you know you taught you teach on uh profit first model, okay? Yeah, so you mentioned that, you mentioned that that the book as well that you've been reading. So, how can treating profit as the owner's money change the way someone manages a business?

SPEAKER_01 18:25

Yeah, we when you do that, uh one of the the things that Mike McAlitz talks about, we had him on our podcast too, and he he shared like the idea that there should be percentages for operating income or operating expenses, right? All of these things and profit. And so by doing that, when you put like guardrails, it's like uh you know, we're getting ready to come into uh Thanksgiving and Christmas, and there's gonna be certain pants that we're gonna put on in January. They're gonna that they're gonna say, nope, this ain't gonna work, right? And so if you think about if we only had one pair of pants, though, we'd have some guardrails around well how much we consume in November and December, right? Well, think about that, and that's the way Mike McAllows talks about for business owners. We should put guardrails for what amount of percentage of the money can be spent in these different categories. Well, when when you start getting ready to butt up against that, right? You you you don't have the ability to open up the you know the button. You don't have to, you gotta stop it. Then you have to be creative, you start thinking of other ways to do stuff. And right now, I mean, we live in the age of AI where people are finding out that, hey, I've been paying someone to maybe do this thing, or I've been taking so many hours to do this that maybe there's a tool that can do it faster and maybe cheaper. So business owners can figure out how to get more creative with what they're doing through profit first, which ultimately leaves more profit. And that's what we're trying to do. Because the more profitable the business, the more money you make, but also the more likely it is available for someone to buy in the future.

Jacquelyn Jackson 20:07

Right. Okay, that makes a lot of sense.

Investor DNA And Buy Box

Jacquelyn Jackson 20:09

So, what is the investor DNA? What is that?

SPEAKER_01 20:13

Yeah, so the DNA, this is something, Jackie, that everyone has, they just probably don't know it. And I bet you you've probably taken some sort of personality assessment over the years, maybe Myers Briggs or Colby or Disc or Culture Index. There's a lot of different ones, right? Well, what is what do those instruments do? They they talk about just naturally how probably since we were four or five, we've seen the world, right? Everybody has a viewpoint on uh the world based upon where they were when they were little. And that same viewpoint applies to money. We just had never thought about it that way. So investor DNA was something that I came across long after I'd made all these bad decisions with money and didn't realize why. It was because whenever I was first starting out, I was just wanting to do what other successful people were doing. I was just like, well, I'll just emulate them. But even though I was having some success, it didn't excite me, it didn't fill me up, and I didn't know why. And it was because I was investing in things to that I found boring. And see, my profile, I I'm a on a disc, right? I'm an extrovert. I'm an I. I'm the person that you just put a lampshade on in a party, right? Yeah, I get I get excited easy, right? I'm optimistic, right? Which unfortunately, uh for investing, that means it's probably my kryptonite, right? It's my it is my superpower for entrepreneurism, but it is my kryptonite for investing. Well, investor DNA talks about what each person has, how they see the world. And based upon that, then you can start looking at investments from a completely different lens and go, man, you know, there there's this whole segment I don't need to deal with because I'm not going to like them because. Is just the way that I built, and so now I can focus on these that really will fill me up, and I've got to go deeper and learn about them. But investor DNA is about that fit, right?

Jacquelyn Jackson 22:09

Right, and that makes a lot of sense. We don't look at that because you know, like you said, we see little shiny objects, or we see what everybody else is doing, and we want to be a part of that. And I guess it goes into my next question is like, how do we filter how which filter should people use to avoid the FOMO? You know, with that fear of missing out, and the shiny optics investment opportunities. So, what filter should we use for that?

SPEAKER_01 22:31

Yeah, so first filter, definitely investor DNA, but the second filter, and this is the one that Warren Buffett uses, that where he can look at a hundred deals and within 10 minutes be able to discount 98 of them, right? And this is something that most people don't have. And in honest, like most of us, we don't see a lot of deals and because we're not looking for them. And so we do have this fear of missing out. So when a buddy comes to us and tells us about this awesome deal she's got going, and we're like, man, I won't miss out on that. I'll just go ahead and put some money over there, right? I'm assuming she's done, I mean, she's smart, she's figured this out, right? And and then probably that's leaning on her experience on the same sort of thing. There's this thing called a buy box. And a buy box allows you to analyze so many things before you ever see an opportunity. So what we tell people is like, it's just like before you go and go house shopping, right? You're going to sit down and you're going to think about, okay, what school district do I want to be in? Well, how big is it three bedrooms and two baths? Is it four bedrooms, three baths? Like, what is the makeup? Do I want the master on the main level? Do I want a yard big or small? Do I want it to be in an HOA or do I don't want to deal with those people? Like what you're going to think about all these things before you ever go shopping. And by doing that, it eliminates so many things, right? Now it lets you narrow down. Well, the investor buy box does the same thing for you. It helps you start to identify what's important to you and what you're willing to do and what you're not willing to do. So when one of these quote unquote opportunities crosses your desk, you put that filter over the top of it. And if it doesn't start checking the boxes, you can immediately just push it off to the side. It doesn't matter what someone says the potential return is. You're like, it may be a deal, it's just not a deal for me.

Jacquelyn Jackson 24:19

Right. And we have to be able to say that that is so smart. So that is what you're saying is so smart. And we have to as business owners realize that because they do make it look like, oh, this will work for you, it worked for me. And you're right, it doesn't necessarily work for that. So I can understand that. So let's talk a little bit about the passive income. So what number should someone examine before calling opportunity a passive income investment?

SPEAKER_01 24:43

Well, everybody's gonna have a little bit different on this, right? So for us, one of the things we're looking for is it does it cash flow, right? Okay, I'm always looking for the opportunity that's going to create passive income. That's one of the biggest numbers that I'm gonna focus on. And not like return, right? So oftentimes we've been taught up to this point in our life, most likely, to look for quote unquote return. Oh, Jackie, give me your money 20 years from now, I'm gonna give you a 12% return on it. You're like, well, that's better, I guess, than 8%. That sounds good. Well, I don't care about the return. I would the return I care about is return of my money, and then I want to start getting return on it from a cash flow perspective. So I want to look at those things. I want to see how quickly can it start coming back to me? And then does that match up with my objectives? Does that match up with the goals and all the other things that are going to go into my buy box and my investor DNA? So when someone starts looking at that, they need to understand does the outlay that they're going to put out in the come back to them, does it match up with what they want?

Jacquelyn Jackson 25:46

What they want. Okay, that that makes a lot of sense too, as well. So now this is a this is a question that everybody kind of voted on. So listen to it completely of what we want you

Infinite Banking Explained

Jacquelyn Jackson 25:56

to explain to us. This one is can you explain infinite banking in plain English? Okay, somebody put that part in there. Include what it is, what it is not, and the role insurance plays within the overall process. I told him you can handle this question.

SPEAKER_01 26:12

Yeah, well, so here's the thing. So my mentor, Nelson Nash, the guy who wrote Becoming Your Own Banker, is the one who authored that idea of infinite banking into the world. Okay.

SPEAKER_00 26:23

Okay.

SPEAKER_01 26:23

Um, I'm gonna start with his answer. If you were to ask him this, Jackie, you would have loved him. He was a hoot. Uh, he would have like people would always ask him, you know, hey, can you explain infinite making? Can you do it over the next 10 minutes? And he used to teach this subject over a 10-hour workshop, okay? He would do two hours one night and eight hours the next day. So if you were to ask him this, he would say, Jackie, this is like, you know, I'm a mosquito right now in a nudist colony. I know what to do, I just don't know where to start. So I'm gonna do my best, but know that there's some pieces to this. But here's the thing I I have a 13-year-old son, and so I I try my best to break things down for him because he'll ask me these questions. And and so the other day I asked him, I said, Ryan, when I give you money, where do you like to put it? He goes, I put it in my piggy bank. I was like, Okay, cool. You put it in the piggy bank. What if if you want to use it for something like Legos, and that that makes me smile, he's a big old Lego guy. I was like, what do you have to do? He goes, I have to go take the money out of my piggy bank to buy it. I was like, okay, so now you got the Legos, but how much money is in your piggy bank? He goes, None. I said, Well, infinite banking, buddy, would be as if you had the money still in the piggy bank and you had the Legos. And he's like, Oh, how's that work? And so how it works is that you you have to set up a place for your money to reside. Always tell people the biggest obstacle to becoming financially free is lack of access to cash. We've been taught to put our money in places that we can't touch. We call those the red boxes, right? 401ks, IRAs, the things that we just can't touch whenever these opportunities come around. Well, the blue box, and what Nelson Nash talked about, was the life insurance. You asked about how that play in. The insurance companies out there have been around almost 200 years. It's the most boring corner of American finance. But it's also the place that the most successful businesses and banks keep money. I don't know if you know this, but the banking industry owns hundreds of billions of dollars of these life insurance contracts. So, how infinite banking works is one, you store money into a life insurance contract that you can access. Then you find opportunities to invest in, whether it's real estate, businesses, private lending, you name it, there's a million things. And when those start paying you back, you put that money back into your system. All you're doing is acting as the bank would on your behalf. Because right now, everyone on here has money in a bank, right? Whether it's a checking account, savings account, money market account, investment account, it doesn't matter. You got money in the bank. Well, how does a bank make money? They take our deposits and they lend them out and they make a good living doing it. Now let that set in. They take your deposits, they technically are borrowing your money, and then they're turning it around and lending it out to people, sometimes even back to you, out of profit. You're earning a fraction of a percent and they're doing really, really well. Their business depends on you on both sides. They can't have just one, they have to have both sides. And so, infinite banking, what Nelson Nash identified was these insurance companies are the backbone of America finance. Actually, the banks borrow money from the insurance companies, right? Like they're the ones that have been around hundreds of years when these banks, a lot of them, I mean, back going back to the great financial crisis, there was like 350-something banks that failed over that three-year period of time. These insurance companies were not failing, right? They were they were there. So infinite banking is about putting money in a place you can access and then lending it out to yourself to go do investments. But just like anything else, just like I was telling the business owner, don't reinvest in the business if you don't pay yourself back. And so whenever I take loans, and by the way, I've done this now for 16 years, Jackie. I've put millions of dollars in these, I've also created millions of dollars, almost $50,000 a month in passive income now from the lending of those assets. But that just like I told my son, the beauty of that insurance policy is that my money never left the piggy bank. It was still at work. The insurance company lent me their money, and I went and bought all these assets that are producing income. Now I'm paying them back, and my money is still growing here and it's growing over here. And by that way, is what I'm doing to become financially free. So that's infinite banking. What it's not, it's not a license to spend money, right? There are some people out there, unfortunately, uh, you know, there's good people and bad people in every industry, and there's some out there that'll tell you, oh, Jackie, you do this, and you just go buy cars and you make money. Well, you can, yeah, if you're selling those cars at a profit, but not because you're driving them, like you can't make money going on vacation. Like that doesn't work in any world. So it is not a better way to, you know, spend money. It's also not a get-rich quick thing. It's not something that for people who are like, oh, I'm gonna put money in here and immediately I'm gonna be wealthy. No, that's not the way it works. Now, if you died immediately, your family would be much better off, right? Because there is a death benefit. I don't always talk about the death benefit because I'm not focused on that early on, but it is something that I know will benefit my family in the end. But by using these contracts over time, what I've done is I've created a big pool of capital that our family has used in lots of different ways. I've created a means for me to create cash flow from all the businesses and be able to have a place for that money to go back to that's protected from all these creditors and everything. So that's what it is and what it's not. Clearly, there's a lot more details. We we we detail this and we call it the blue box strategy, and we do a weekly masterclass on this very subject that goes a little bit deeper for people who want to know more.

Jacquelyn Jackson 32:02

Memorable. Okay, great. So definitely we want people to pay attention to that so they can. So when you talk about this infinite banking strategy, who is a good candidate for that or who may not be ready for it?

SPEAKER_01 32:14

Yeah, a good candidate is someone who typically makes a couple hundred thousand dollars or more, who has money somewhere, right? That probably they can't get to and they have free cash flow, right? It's not for someone who is living paycheck to paycheck with nothing. That is is just trying their best to survive. Because this is like starting a business. It's like going to college. When you first went got in business, you didn't you didn't pull out every dollar you put in, right? You put a lot more effort in it than you got out of it. Same way with college, right? You put money in, you didn't make any money for years. Well, the same way as this, when we start this up, we're starting a business. So someone who needs every single dollar, access to every single dollar immediately, it's not a good fit. Now, alternatively, I see these same people putting money into 401ks and I raise and they get access to zero dollars. And so it's I'm like, don't do that, that's bad too, right? So um it's for it's for people who have money who are looking to do something better with it. It's not for somebody who's looking for the next hot idea or doesn't have access to any money and really just needs every dollar living kind of hand in the mouth.

Losses Lessons And Due Diligence

Jacquelyn Jackson 33:22

Right. So with that said, because you're saying we're not to do one um we've opened discussed both successful investments and we've talked about costly mistakes. What did losing money teach you that success could not have taught you?

SPEAKER_01 33:38

Man, how much time we got? I mean, you know, the the lessons we learn the from failures are way greater, right? We remember them. We remember what what we what we didn't do, right? We we think about the things that we did. I think about specifically, I'm just one of those people that's super optimistic. I believe in people, I trust people. And I I learned I need to verify. I it's trust, but verify. And then I had to learn what it is that I needed to verify because I'm big picture, I'm not real details, right? I surround myself with operators, with those kind of integrators. I'm not that, I'm the visionary. And I realized that I needed the same thing with my investment stuff. I needed to surround myself with people who could give me the details, and I needed to learn what details were important and which ones weren't. And so when I could figure out what were the two or three assumptions that people were making in their uh, you know, their performas that they were showing me for the investments, that ones that would actually make or break a deal, then either I could go verify those details or I could hand it to somebody to go verify those details. All of those things are things that I learned. Also, I learned that deals don't create income, people do. And so the people that I'm investing in, that's what matters. And a lot of times I lost money, I wasn't talking to the person, I wasn't handing money to the person who was doing the deal. I was handing to a middle person, a person between that person. And almost every single deal that failed, it was either that person was not involved, that person didn't have skin in the game, right? There was all these little elements that I could look back at and go, oh, or I didn't even understand the investment itself, and I got caught up in the hype. So you know, I could spend so much time, but those are those are lessons that that have you know definitely shaped the way that we invest. Because when we show the $40,000 to $50,000 a month in passive income every single month, and by the way, we've been sharing this passive income report going back to um 2020. Every single month we've talked about the good and the bad. And so there's a lot of times we're like, ooh, we just turned 175 grand into 25 there. That was a mistake. What was the mistake? We and we broke it down, right? Just like the other day, we we we shared an investment that we've gone full cycle on now 74 months. We made over $288,000 in profit over that 74 months. But we also talk about why we would never do it again. So there was a lot of lessons that happen along that that road, too.

Jacquelyn Jackson 36:22

So okay. Well, let me ask you this. So, you know, it's story time because I love stories. So we want to ask you that can you share an example of someone who successfully transitioned from active income to sustainable passive income?

SPEAKER_01 36:37

Yeah, I mean, there's so many. There's so many. So I'll detail a guy named Mark. Mark was an airline pilot. He when he was 13 years old, he told us that like the thing that he always wanted to do was fly airplanes. That's all he could do. His dad was an airplane pilot. So he flew airplanes all over the world. Um, the last place he flew them was uh in Hawaii. Most people would be like, boy, wouldn't that be a dream job? Live in Hawaii, making a great living, you know, in a situation where he gets to make money a lot of times, no matter what, uh, working a couple days a week, seeming like he had all the freedom in the world. But one of the things that Mark didn't have, he didn't have the ability to make money if he wasn't flying pains. And he had tried a number of different things, but never figured it out. So whenever we met, we started talking about, you know, what he was doing with money. Of course, he had been putting money in the typical places he'd been told all the buy and hold, 401ks and all the stuff, pension plans within the uh, you know, the union that he was within for his airline stuff. And so we talked about what is it, what would it look like? Like what would you do differently, or what could you do differently if you didn't have to fly planes? Like, what would life look like for him? And he was actually in his early 40s at the time. He was like, you know, I'm still single, I've never been married. I've dated a number of times, but you know, the relationships just were always a little strained because I was having to travel. I wasn't there. He said, Man, what would life look like differently? I I would find somebody then and settle down. I would that would be something I would I would go fishing and hunting a lot more because you know I love doing that, but unfortunately, you know, even though I only have to work a couple days a week, I have to work all those days. And sometimes these fishing trips, these hunting trips that I want to go on happen to be on days that I can't get off and I have to show up. And so Mark actually started following our process. He literally implemented the passive income operating system into his plan. He started using infinite banking, he started deploying as much capital as he could there, he started buying assets, and Mark actually took over his monthly expenses over a number of years through passive income. And now, now, Jackie, the the cool thing about Mark, he walked away from his quote unquote dream job because he said, you know what? My dream is no longer to fly airplanes and fly other people to their dream destinations. My dream is to live it out for myself. Right within like six months, he found his future wife. They got married about a year and a half after that. And it just is super cool to see and hear those kind of stories. Now, that's a fun one. I could tell a lot more. I could talk about, you know, the mom who was a school teacher, um, you know, and had two kids, but had gotten a divorce and was having to try to do both things, right? Trying to be the breadwinner and be the mom and not having the support because the dad was nowhere in sight, and how she actually learned from listening to our podcast one idea, something she thought she could do, and she worked um in that five to nine, right? You know, the 5 a.m. to 9 a.m. or the the 5 p.m. to 9 p.m. And she started building up this stream of income on the side and ultimately got it to where she literally walked away from her school job. And by doing that, she was able to take the kids to school, pick them up from school, be present for all things, and not be doing other stuff whenever they were involved in things when she had to be at school. So there's a lot of fun stories out there. Our, you know, we've had you know a thousand plus people come through our um our business over the last 16 years. So we we really enjoy getting to hear those stories, but also being a retailer.

Jacquelyn Jackson 40:15

That is great. That is wonderful. That's a blessing, is what that is, also.

Next 90 Days And Resources

Jacquelyn Jackson 40:18

So let me ask you this so if a business owner earns well, but has not built a reliable passive income, what should that person focus on during the next 90 days?

SPEAKER_01 40:30

Yeah, I I would say get your personal profit and loss statement correct. Understand exactly what's going out, figure out how much money could you on every single month have free cash flow that you could get out of what we call the rat race side, right? The the the part that this just just trying to survive. How much of that could you get put into an account that has no attachment to anything else? And by doing that, starting to store capital, because the thing is, is that there's a a feature called the reticular activating system. We all have it, we just don't know it. Um, and you probably know it, but you hadn't thought about it this way. You bought a new car, you you started driving the car, all of a sudden you notice all the same cars just like yours on the road, right? Your brain now is telling you, look at that, look at that. And you're like, oh, I thought my car was unique. Right. But the thing is, is that what happened is that we told our brain that was important. And so once you start saving money, you know what's going to start happening? Money is gonna now start becoming more important. And when people tell me, Russ, I don't even know where I would put money, I don't know where I would invest money, I don't ever see any of these deals. That's good because your brain is filtering them out, they're all around you. But just wait till you start building up a pile of money. You'll be amazed because opportunities find cash. And so if you start building up cash, I bet you you'll start learning some of these other things. Now, there's a lot of other things to do after that. You know, building your plan, what's your goals, right? Making sure yours and your spouse's goals, your partner's goals are aligned. All of that then start leading you towards some of these other things we've already talked about.

Jacquelyn Jackson 42:07

Exactly. So we want to get ready to wrap it up and we want to thank you for coming. But I have another one last question we want to get from you. If uh what three actions would you like our listeners to take after hearing this conversation?

SPEAKER_01 42:20

Yeah, you know, so our team was kind enough that knowing that um they were gonna be on here spending this much time watching this after the fact, they said, you know, let's let's make sure that nothing that we've talked about today is missed. Right? So the first action I would give you is if you go to wealthwithoutwallstreet.com forward slash TDJ equity funding, I'm gonna make sure everything we've talked about you have access to, whether it's the podcast, our free community, um, the ebook stuff that exists around investor uh DNA or our passive income masterclass, upcoming event, all that stuff, so you can have access to it, right? But the key is that we've talked about a number of things. Knowing what you want, right? What is it that you want to be, do, and have? And most people have never taken the time to even think about that, right? We don't we don't spend time planning vacations, much less our future. And so when we talk to people, we say, take time, figure out what you want to be, do, and have. And when they do that, we call that our passport challenge, which is inside. If you go to that link, you can do that. I bet you that would be the best three things that you could do because it would organize your thoughts in a way that would inform your decision of what to do next.

Jacquelyn Jackson 43:35

Okay, and I definitely recommend everybody doing that. We're also gonna have Russ on our referral page at TDJquityLLC.net. So he's gonna be there, and we're gonna link back to his page as well and have that link that you just mentioned available for everybody too, because we do want you all to retain this. So we want to thank Russ for joining us and helping our audience think differently about financial freedom, accessible capital, and the role cash flow plays in building lasting wealth.

SPEAKER_01 44:03

Thank you so much for having me. It's really a pleasure to be here, Jackie.

Jacquelyn Jackson 44:07

Oh, great. So we're looking, and hopefully, like I said, they're making a little note that say, Can you come back again? Somebody just sent this note, oh Lord. Anyway, we'll talk about that later. But anyway, my biggest takeaway is that financial freedom does not come from simply owning investments or earning more money, it comes from understanding your numbers, protecting your liquidity, selecting opportunities that fit your own goals, and creating income that is not completely dependent on your daily labor. Now, to our listeners, before you chase the next opportunity, calculate what freedom actually means to you, as Russ has stated today. Understand where your cash is going and make sure the strategy fits your financial reality, not somebody else's highlight reel. You can learn more about Russ and his work at WealthwithoutWall Street.com and through the Wealth Without Wall Street podcast. I'm Jacqueline Jackson, your host of TDJ Equity Funded Insiders. Remember, funding strategies, real talk, real results. Until next time, position yourself before you need the kappa. You all have a good day. Thank you. Thanks again, Russian everybody.

SPEAKER_00 45:18

We hope you enjoyed this episode of TDJ Equity Funding Insiders Podcast. If you'd like to be a guest or get in touch with us, please visit our website at TDJquityLLC.net forward slash podcast or email us at Podcast at TDJ Equity Funding Insiders.net. Until next time, take care.