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Dale Gibbons: Master Your Money in 7 Days (or Less)

My guest is Dale Gibbons. He is the author and WealthFit trainer of the Master Your Money in 7 Days program. Dale is quite the guy. Originally, he started in the Corporate America realm but one day he decided to acquire a small struggling technology firm. He reinvented that business and went on to grow that business incredibly. He is doing it for the second time, reinventing the business and building a tech firm in software engineering.

What I appreciate about Dale is his willingness to help and his ability to take the complex and distill it down into something simple. In this show, we are talking about money specifically how you can master your money and how you can master the cashflow in your business and your personal life.

Here are a couple of highlights of what's to come. We're going to talk about the world's simplest cashflow method. If you've struggled to manage your cashflow or your money, you're going to want to read this. We talked about the embezzlement story and how this all began.

In addition, we talked about creative ways on how to reduce any sort of debt, personal debt or business debt. Finally, we talked about how to have that peace of mind when you're looking at your finances, when you're looking over the numbers. How can you know that, day in and day out, things are going to be great without micromanaging, without waking up every day and checking your bank account or checking everything? I can tell you from experience, that's an incredibly powerful thing. With that said, let's get to it.

Dustin
Dale, your accountant walks into your office and tells you, you don't have the money to cover payroll in two weeks. After some digging on your part, you find that tens of thousands of dollars are missing from your business. You find yourself immediately in a pressure cooker and on the brink of going under. How did you find yourself in this situation?
Dale
I wish I had something glamorous and something sexy and a lot more intelligent to tell you in answering that question. The real answer is I wasn't paying attention. That's what it was. I was enjoying success and being well-received and popular at the Chamber of Commerce. I got into all of the trappings of having a successful business. I started ignoring some of the details that it cost me.
Dustin
Was this a disgruntled employee or a financial firm?
Dale
It was a disgruntled employee. It was my bookkeeper. She went rogue/Robin Hood on me. She felt like I was underpaying others and I was underpaying her. What was interesting when you're a business owner and you have employees is it can be a lonely spot. It seems like everybody's gunning for you. Everybody thinks you make all the money, which is frequently not the case. There were people that I was paying a lot more money than I was paying myself. She wasn't one of those, but I was paying her fairly and paid everyone else fairly. She felt like she needed to be paid more but she never came to me and asked me for an increase in salary. She just decided to embezzle money. That's what happened and the way I discovered it was an honest employee came to me. His name is Ron. He came to me and said, “Dale, I appreciate the increase in pay.” I didn't know anything about the increase in pay. The bookkeeper decided to pay other people who she didn't think was not getting paid enough, hence the Robin Hood. She gave three people a pay increase because she liked them a lot and she wanted to see them make more money.
Dustin
She had to know that was the end.
Dale
I don't know how you can do that and not know that somebody's going to find out.
Dustin
Do you look back and say bad apple? Do you look back and say, “Maybe I didn't create the culture. Maybe I hired wrong?” What do you learn from this sticky situation?
Dale
Intuitively we know we want to hire in for integrity. I clearly didn't do such a good job here. One of the things I learned is when people are handling money, even honest people can be tempted. This particular person, I didn't have the controls in place in my business that kept the honest people honest. Part of was my own fault. Part of it wasn't even fair to her because when you're handling a lot of money and you know how easy it is to funnel some of this to your own personal bank account and nobody will know. It's not even fair to them to tell you the truth. That's my own personal opinion about it. I didn't apologize or anything like that, but now years have gone by, I realized that I had to own that whole thing. I'm the one that hired her. I'm the one that didn't have systems, controls and processes in place that needed to be there to make sure that the accountability was in place. It wasn't there, but it soon was after that and it has been ever since.
Dustin
It would've been so easy to blame and say a bad apple. I know you're the guy that subscribes to, “This is a lesson. I need to own it.” I'm sure there was a lot on her part, but if you subscribe to that philosophy, then you're at the beck and call of the world and craziness. When you own it as you have, you're able to get better, grow and put in those systems.
Dale
Frankly, I wasn't going to give anyone control of that. When you don't own it yourself, you give others control of it and I wasn't going to allow that to happen. The whole concept, the whole course, it's more than just the course. It's a philosophy in a way. It's a set of guiding principles, a philosophy, a methodology and things like that. It's very simple. There's nothing that complicated about it at all. An elementary school kid can keep track of their paper route money using this tool. They probably should. It's a great habit for them to learn.
Dustin
The question that people will have is how do we hold people accountable that are handling money? Not just the employees, but other team members that are part of it. The ones especially, if you're not a finance whiz yourself, you're an entrepreneur, and you want to pay to have that CFO, that bookkeeper, that accountant that's handling money. You make that investment or that pay because you don't want to do it. What is your recommendation or advice for the busy entrepreneur that may be juggling a couple of businesses, but they can't crunch numbers every day? What does that system look like?
Dale
It's three things. One is to definitely implement the Cashflow-based Budgeting System in the Master Money course. Your typical financial statements that are involved in the business are important. The statement of cashflow is important but that's on a month-to-month basis and particularly, it's not tied to your bank balances and things like that. Income statement and balance sheet are important. Those three statements are for your accountants. Those are to make your accountants happy. What most of the business owners really want to know is how much money do I have in a bank? Is that number going up so that I can sweep some out and do cool things with it? That's all you care about. That's why I created the system. That's what I wanted to know. My CPA is fine. If you want to read my income statement, if you want my balance sheet, if you want my monthly statement of cashflow, knock yourself out.
None of those things helped me in understanding that one very simple thing, how much money do I have at the bank at any given time, day-to-day, week-to-week? Is that number going up? When one penny wiggles, I want to know about it. Not because I want to micromanage but because of the Law of Entropy. I'm not that smart. I'm not super-duper engineering bright, but I did learn the Law of Entropy the hard way. The Law of Entropy means that in nature, things tend to descend to chaos and disorder. Your bed doesn't make itself. Your lawn doesn't mow its own self and keep itself perfectly manicured. If you don't do something with it, everything takes over into this other state that we would consider chaos at least. The same is true for your business. What was happening for me is I did not have some controls in place that kept my financial grasp groomed. To answer your question, the way you put this in place and the way you get it done without having to ride the hurdle over every second yourself. Number one, have a good bookkeeper to manage it for you.
Remember, if you've got a business, you're probably going to use something like QuickBooks to keep your CPA and the IRS happy. That's what that's for. You don't need QuickBooks to know that you've got a positive bank balance every day, every week, every month, and it's always going up. You need QuickBooks to keep the IRS and your CPA happy. Definitely implement this Cashflow-based Budgeting System. Have your bookkeeper keep it up and keep control of it. Every week as a business owner, you should sit down, even if with your personal finances. This is what I do. Every Saturday, I take a little time. It's usually about 30 minutes for each account. No more than 30 minutes. If it takes more than 30 minutes, you have a lot of transactions or you’re doing it wrong. Take 30 minutes, go through the transactions for that particular week and make sure you put those into the system there.
What you're doing is this little micro cashflow audit so that you or your bookkeeper preferably is the one doing all the data entry stuff. You don't want to be doing this as a business owner, but you should look at it. You should take at least five to ten minutes to look through it and make sure you look at all those things so that nothing weird is coming up. There were some weird things coming up in my bank statements and my cashflow that I simply was not looking at. I would have caught it and I would not have tens of thousands of dollars embezzled from my business. It would never happen. She would have never tried it because she would know the systems in place before she can even begin to make that work.
Dustin
How did you recover? When you determined that you got two weeks and you're not making the next payroll, what did you do? What was your immediate reaction? In case, envision someone is coming to this episode and they found out what you did. What was your action plan to recover and stop the bleeding?
Dale
First of all, I waited for everybody to leave because I didn't want them to see me. I was very upset. If you're the business owner, your employees look at your face for the company weather report and it was not good. I didn't allow that to happen. I went to work right away pouring through the bank statements, trying to figure out, “Where did all this cash go to?” It was a Friday night. Everybody was closing and everybody had gone home. I sat in my office and I started praying to be honest with you. That's what I started to do because I knew that if I don't figure this out in two weeks, my business is over. You can't come into your business and tell everybody, “I'm sorry guys. I can't afford to pay your paychecks.” They're going to get up and leave, most of them. I realized that what I needed to know was I needed to understand every single transaction, everything that came into and came out of my bank account for my business and I needed to see it.
One of the challenges is there are a lot of things that could be pending out there. I started to look through the office for every invoice that wasn't paid. I turned that office upside down. It was a nightmare and what I found was frightening. I found bills that had been stuffed away and not paid because she was taking money. We didn't have enough money to pay the bills because it was going to her. I collected up every single piece of paper in my office and her office, mostly her office, every Post-it Note, every sticky note. I went through financial forensics like you would not believe. There was not a piece of paper that I didn't put my hands on. I separated bills due, invoice due from income coming in like a check or some invoice that we were going to be sending out. Those are the things I did.
I started putting in a simple Excel spreadsheet. I am so not an Excel user guy. I can put numbers in and add things together using simple math. It's all this thing does and it's all you need to do. Sometimes the best things to know about technologies are when not to use it and keep it simple. People ask me all the time, “Why don't you make an app or something like that?” It’s because I would screw up the whole thing. I wouldn't work because then it would be too easy. You'd then be tempted to set it and forget it again and now entropy takes over once again. You want to grapple with this a little bit. The benefit to me was the act of physically going through her office and mine and grabbing every piece of paper and understanding. I found tax bills from the city that hadn't been paid and they were sending notices that they were going to place liens on my assets if I didn't pay these taxes.
I had bills coming from a local newspaper that I was using at the time. I was doing still some typical newspaper advertising. I had to go to a lot of these people. I had to go to a lot of them and I had to negotiate better terms, “What if I can barter some things here?” I bartered services to get the bill reduced. I did everything. I resorted to near unnatural acts to be able to get this done in two weeks’ time. I explained to people and I was very authentic. I said, “Here's what happened. I was an idiot. I will let this person embezzle this money. I don't have the money to pay you, but I want to make it good.” It was incredible how forgiving many people were. They didn't necessarily say, “You don't owe me anything,” but they gave me time.
Dustin
I interviewed a business turnaround expert. One of the things she said was when she entered into the business, she wasn't a finance person either. She’s a project manager. She went and took the same thing that you did. Every piece of paper, every night for two years, she took home two binders and looked through every transaction, every invoice. The steps are there. It's a very similar thing. This is a big thing. I know we're saying this in the context of entrepreneurs. However, everyday people can benefit from this. Maybe it's not QuickBooks, but it's going through the app on their phone of every transaction.
Dale
It works the same exact way. The categories might be called something different. Instead of meals and entertainment, it might be eating out or something like that. It works just as well for the company as it does for mom and dad or for an individual who doesn't have a business and maybe not even interested in business at all. It's cash coming in and cash coming out. If you don't tell your money where to go, it will decide on its own and you won't like the decision.
Dustin
We gave love to people that aren't part of the entrepreneurial community yet. However, I want to put a bow on this. Shortly after this, you recovered and you got an understanding of how to manage your cashflow. You went on to double the revenue of this company. For all my growth-minded entrepreneurial friends, what was the secret or what were the keys? You stopped the bleeding. Did you get that taken care of, but growth, was that a different process? What sticks out to you about that time when you doubled?
Dale
It was two things, maybe three. One was we found cash we didn't know we had. We plugged up so many leaks that we had more cash to work with than we had before because before we were burning furniture to stay warm. We found ourselves in that situation way too often and we’re thinking, “How was that happening?” That was the case. We are always frustrated with like, “We got all this money. We've got a seven-figure top line here. Why are we struggling so much?” Moms and dads that don't have a business oftentimes are the same way. They're like, “I feel we're making good salaries here, but why do the ends never come in together?” It’s the same concept. We got control of that. We had money that we didn't have previous to that to be able to invest in marketing and a few key employees and things like that. That was a big piece of it. The other thing is it freed my mind up because even leading up to that, I knew in the internal parts of me, in my soul, there’s something not right about this. There's something about this that I'm not managing well. Have you've been in a situation where you're going somewhere and you're making record time, but you don't know where you're going? That's a little bit about this. It seemed it was a little bit too uncontrolled and it came back to bite me.
Dustin
Do you mind sharing what the nature of the business was?
Dale
It was an information technology consulting and staff augmentation company.
Dustin
Can you break that down for the audience?
Dale
We do software engineering work. We develop software. Not the current company that I'm building. This was a totally different company. I sold my majority stake in that business back in 2015. Software engineering, software development and some staff augmentation. It’s basically high-end and very expensive temporary help.
Dustin
I want to go back to this distinction. You learned a lot at that company. That bookkeeper forced you to put in systems and you learned how to manage your cashflow and put systems in process. It's one thing to learn it for yourself, use it, and get yourself back on the path, but you decided to go out and share it with others. What prompted you to do it? Did you grow up wanting to teach? Did a family member come to you because they were in so much debt? What's that backstory to you writing a book and sharing it with the world?
Dale
I wanted to write a book. I have always enjoyed teaching. I'm in my element when I'm doing that. When I'm teaching and speaking to groups and things like that, everyone tells me at least that, “That's when you're really you,” and I feel that. I love it. This particular topic and this particular book are by no means what I had in mind. What happened was I didn't pay attention so this lady embezzled the money. I built a system and put it in place. What was happening is I was frequently the uncle or the relative that someone would come to when they needed a $500 loan or something like that, which typically is not a loan. It's a donation. I need to realize that this is probably never going to come back and it's okay. That happened a few times and after I put this together, I thought, “I should help people with this.”
I had a relative come to me and say, “Can you help us out?” I said, “Sure, on one condition,” because everything else was unconditional. I decided to insert a condition here. I said, “Sure, on one condition and that is you implement the system and we will come to help you and we will spend the weekend with you.” That's what happened. We went to their home. I don't know that we ended up loaning the money. I don't think we did that, but I do know they came to us and they asked us for help. We had told them about the embezzlement experience and the system I put in place and things like that. We did go to their home and we spent a holiday week there. I went to one corner with him. He had a home security business at the time. My wife went to the other corner of the house with her and they took care of their personal account and personal finances.
At the end of the three days, we emerged victoriously. It was amazing. They made an incredible transformation and turnaround. They had racked up and I know this is probably an anomaly. I hope it is an anomaly. They had racked up thousands of dollars in a five-month period of time just in overdraft and non-sufficient funds fees. I'm not sharing their names, but they still don't mind if I tell you this because they share this with people all the time. It's become a very important testimony for their whole lives. We implemented the system and they were incredibly grateful. She at least was in tears about the whole thing because this was something that was eating at them. It was a dark secret that nobody knew about and I didn't see them after that.
It wasn't until a few months later, I saw them on a holiday party and I asked them, “How's that system going? How's the money thing going?” She didn't say anything. She started to break down in tears. I thought, “I've bankrupted this fellow. This couldn't be worse. I still don't want to be here right now.” She gave me a big hug and it was something I can't describe. It was such a wonderful feeling to know that this family had been so positively impacted. She told me that they had only had one overdraft fees since we helped them out and they'd been using the system. That was because he simply forgot to deposit a check. It was all about the timing there.
Dustin
There's nothing like the look in someone's face or tears when you transform their lives. This is powerful information, which is why we're here at Get WealthFit show and WealthFit. Speaking of that, you mentioned the course here. You call it the world's simplest cashflow or cash management system. How is it so simple?
Dale
It doesn't use any complicated software. There's nothing like that. You can use Google Sheets and Microsoft Excel. Maybe there's something else similar to that. Those are the only two I know about. You can use either one of those things and it's simple math. There isn't anything complicated about it. I had to simplify it for my own benefit. It isn't complicated. It's not complex, but this is a habit implementation exercise. It’s really what it is. It's one thing to know what to do. We are so good at knowing what to do. It's another thing actually to do it consistently day in and day out. I'm not an expert on weight loss or anything like that, but most people know exactly what to do to accomplish that. It's the doing of it that's hard.
Dustin
I want to make this real for people that are reading in and maybe don't have visuals to go along with it. This is why you should go and get the WealthFit course. Dale, if you'd break us down, let's say I'm the average American. I'm just pulling numbers here. I've got a $250,000 house in California and some parts of California. Let's say mass America, a $250,000. I’ve got a car loan like maybe a $25,000 car and I'm in debt. I’ve got some credit card debt. What do you advise that person? How does that system help that person?
Dale
There are a couple of reasons why this doesn't get paid off. One is people don't face it. There are a few people that don't even understand it. For the most part, people don't face it. If you face your problems, they will generally shrink down to the point where you can manage them. Facing it is the first thing. The second thing is getting your current cashflow under control to the point where you free up money to be able to do two things. Number one, don't take on more debt. Number two, pay off the debt you’ve got. Nobody could ever get out of debt unless that happens. The math is the math. There's no new math in this category. You’ve got to find the cash to be able to pay that debt off and this is a very effective way to do it. It's much more effective than typical monthly-based budgeting or zero-based budgeting, although that can work. Certain people use it a lot. I like Cashflow-based Budgeting more because in business, what are we trying to produce? We're trying to produce cashflow. Let's think cashflow here and let's manage cashflow. This is a very effective way to do it.
Dustin
You talk about making cashflow visible. A lot of the people that are not financial didn't get in accounting or numbers degree and they're more of the creative. That's who comes to mind with this question. How do we make cashflow visible and why is that even important?
Dale
It's not impossible but very difficult to fix a problem you can't see. To the extent that you can make it visible, your odds of making it better are going to increase exponentially. The way you make your cashflow visible is to lay it out in the cashflow tracker and what I call the cashflow timeline. It's at the very top and there's a number for every week of the year. We're not doing things month to month like January, February, March. We're doing things week to week. There are 52 weeks in a year. I’m not an accountant nor do I pretend to be. I have a good one. I would recommend everybody has that. I have a good accountant, but we're going to do this in fiscal weeks instead of calendar months. We manage the cashflow fiscal week to fiscal week, 1 through 52. There's a bank balance number for each fiscal week and that's the number that you have in the bank to the penny going into each new week. You have much more control this way. A month is way too much time for things to get sideways and go bad. You can get in a cashflow bind in a month depending on how your business is going.
Dustin
Once you've made it visible and you're putting the numbers in your spreadsheet or in the cashflow tracker, you talk about looking for a trend. Even if people are inspired by this, they will look at the app on their phone from their bank. When they're looking at the numbers or the transactions, what trends are we looking for?
Dale
Some of the most trends to watch out for are out of control variable expenses for sure. This is what gets most people in trouble in business and in personal finance. It will be surprising how much money you spend on coffee shops. If you're a smoker, cigarettes, that's a big one. I've had a lot of people that we've worked with that stopped smoking instantly after that because they realized, “I'm spending my kids' education and my retirement in cigarettes.” It’s cigarettes for sure, coffee shops, dining out, and entertainment. Those are the biggest ones for individuals. For businesses, very often it's similar things. However, it's often things that you signed up for that are recurring models of some sort that you forgot about. It's gone on some cases, not months, but years you’ve been paying $2 to $100 a month here or something like that and that are thousands of dollars over a period of time.
Dustin
I had a team member at our previous company. I always support education and so I remember them buying it at the time, signing up on it. This was $50 a month or maybe $99. I'm like, “This is fine if this is education and it's going to help you.” The challenge was we let that team member go or they moved on and a few years later, we're still getting billed for it. I'm not using this particular education. You're so spot on about that. I think of the entrepreneur that has multiple team members, where you're giving them purchase power or even if you're approving everything and you're not looking at the numbers, then this happens.
Dale
Somebody needs to be asking and it's not an interrogative. You just want to make sure that you're making good decisions with your resources.
Dustin
You talk about predicting as well. Daily life throws things at you. Life happens. You get a flat tire. Hurricane or the weather even throws a tree on your car and whatever else you can insert here. How does one predict what expenses and what income are going to be coming in when there are all these variables out in the world?
Dale
There are a couple of things. One, the cashflow tracker was designed to be able to do this. This is one of the reasons I did it because I wanted to know, “If I make a decision now, what are the consequences tomorrow, next week, next month and next year?” I want to know what that is, at least in a directionally correct way. That's hard to know exactly, but you can know pretty close what that is. The way we're predicting in the cashflow tracker method here is you're looking at the current week that you're in. You see the past and the present week that you're in and you see all the future weeks. Let's say you've got eight months ahead of you left in the year. You're four months into the year or something like that. You’ve got eight months left to go and you're contemplating hiring an employee. That's going to increase your salary costs by X. Plug that number in and then see what happens to your cashflow.
You should have already modeled out for the rest of the year and all those future weeks what your current run rate is on those cashflow inflows and outflows. You can plug that in and you can begin to get a good idea of how that's going to impact your cashflow. Let's say current employee and you expect that they're going to be productive and you're going to see a return on investment, 90 days out or six months out. If you think it's 90 days, I can promise you it's going to be twice that, 180 days. What you do is go out to 180 days and then you start to put in their positive impact on the business, their impact on the revenue. Maybe it's a new sales rep and you're going to pay him a base salary. You put in their expenses now starting when they start all loaded up, fully burdened. Remember, in the cashflow tracker, you're putting in actual expenses and whatever the impact that's going to have on your payroll, however, you think it's going to go up. You put that in and then a few months later, you start to put in maybe some uptake in revenue because they're going to start selling some things. You estimate things that way.
Dustin
You mentioned in passing this idea of amortization and then you took me through an exercise and opened my eyes. I want everyone to understand this as best as they can without some visuals. Let's get into a conversation about the perils of amortization.
Dale
Amortization is something that is surprisingly misunderstood. If you look at the root of the term amortization, you will notice the word mort or morte which means death. I'm not exactly sure what the Latin or Greek roots are for that particular word. The whole concept of amortization is you're killing off the balance of a loan. What most people don't understand is most loans, not credit card loans, not credit card debt, but most of the loans are amortized. That math is done pretty much the same way for every loan. It's a matter of the terms of the loan, the amount that you're borrowing, the interest rate, the number of months that you're going to be paying that loan, whether you pay twelve months a year or some other thing. Running an amortization schedule for every amortized loan that you have is a very smart thing to do because it's going to tell you exactly what the interest portion is and what the principal portion is of the loan.
You can take those and you can use the debt snowball method or some other similar method like that. You can figure out, from your cashflow tracker you've carved out, let's say $500 a month that you can use to pay your debt down. You apply that in the amortization schedule for that loan. Don't guess, this is the thing about the whole cashflow tracker is stop guessing. You should know with confidence what your bank balance is going to be. You should know with confidence if you make this decision and spend this money, what the impact of the consequences of that is going to be. You should know with confidence when you borrow money, what it's going to cost you. If you carve out X number of dollars from your cashflow to pay that loan off early, you should know exactly when that loan is going to be paid to the month. You can do that for all of your loans. If you're on a quest or a mission to be free of debt, then you can determine exactly what month and what year you're going to be out of debt.
Dustin
You had recommended typically people have a 30-year mortgage. You're against the fifteen-year mortgage. Why? What's the benefit of 30? That seems like a longer-term.
Dale
This is all about cashflow. Your business is all about generating cashflow, but a fifteen-year mortgage is going to cost you more cashflow than a 30-year mortgage. Get a 30-year mortgage and if you want a fifteen-year mortgage, pay it like it's a fifteen-year mortgage.
Dustin
What do you mean?
Dale
Take the monthly payment that you're paying now. First of all, run the amortization schedule. You can get it out of the WealthFit course. We will include it in there. Run the amortization schedule and then you will know exactly what your payment is. That will include principal and interest. Let's say we have a fresh brand-new loan. Let's say it's a five-year loan for a vehicle or something like that, which is not a good idea, but let's say you did that. You're going to have 60 rows in that amortization schedule. One for every monthly payment you got that you're going to pay the bank. You're going to pay the first one. Let's say it's $675. That's your monthly payment. Of that $675, let's say $500 of it is interest and $175 is principal. On that second line you're going to see that when month two comes around, the payment is still $675.
Your interest is going to be slightly fewer amounts of that amount and your principal is going to be $1 or $2 more. What I'm saying is pay that off in half the time. If it's a 30-year loan, pay it like it's a fifteen. If it's a five-year loan, pay it like it's a two-and-a-half-year loan. The way you do that is you simply pay the principal amount of the next month with the current month. Pay it separately and make sure the bank knows it's to pay the principal down. Make sure you put your loan number on there. I would recommend doing it in an old-fashioned way and sending in a check. That way you've got a printed document that you can go back on your bank statement, you can print it out to prove that's what that was for. What you're doing is you deny the bank the interest they would have collected next month on that particular payment.
Dustin
I'm hesitant to ask the question but I want to make it clear for people, why aren't the banks telling us about this?
Dale
It’s because they wouldn't make as much money. You're paying down the loan twice as fast. They're not collecting as much rent on the money that they would have collected. Generally, banks don't print off the amortization schedule. They don't sit down and tell you, “If you did this, you could pay this off in that.” They're not going to say that.
Dustin
How come financial planners or the professionals aren't telling us to do this? The people were paying to manage some of our money. How come I've never heard this from a planner? You would think that would be better because the money that a person is saving could be invested with the financial planner and they make fees. Is the system broken?
Dale
I don’t know. I have no idea. Some of these things are crazy to me. Sometimes we're blinded by the obvious. Sometimes these things are very simple. It's very easy to step over dollars and pick up dimes. I do it all the time. People pointed out to me that we can't know everything. We can't see everything. We all suffer from some myopia in a way. We all have a limited field of view. If you ever watched some of those shows that look into the brain and how it works and things like that. It's fascinating to me. It is some of the most interesting things. People that recount what happened in a crime scene and everybody's got something different to tell. Their perspective is very different. What happened was none of what those guys all said. It's important to have coaches, mentors, and people outside of you and outside of your field of view so they can point these things out. They can point out the quicksand and point out the obvious. To them, the obvious maybe not so obvious to you. I try to do that. I try to surround myself with folks I can trust who can point these things out. That's how we get better every day.
Dustin
Once we master our money and we've got our cashflow, we're big on that here at WealthFit. We want to put that money to work. For my friends that maybe are in bad debt now that wants to get into investing. I wanted to ask you because you've had a background in real estate. How did you get into real estate and what's your niche of fancy?
Dale
I have been interested in real estate since I was seventeen or eighteen years old. Everyone that I knew who was successful had some type of real estate activity and I realized that was a common denominator. That became something I was very interested in. I didn't dive into real estate headfirst until I was working in the first corporate job I had out of college. I was living in New York City by myself. I was a single guy. I was working late at night and I was on call. I would often have to go out in the middle of the night in New York and freeze to death in the wintertime to deal with problems. I won't get into all the details. It wasn't that glamorous. I got a little bit burned out on that.
I came home one night and I was exhausted. I flipped the TV on. I remember this so well. There was a real estate seminar infomercial and I thought, “That is for me. That's exactly what I've been looking for.” I went to the seminar. It was at a hotel in downtown New York City and it was full two days. I stayed at the Roosevelt Hotel. That's where it was. I stayed there and I loved it. I bought the courses and I took them home and I poured through everything. I devoured everything. I learned as much as I could and I was fascinated by all of it. I met some wonderful people. I learned a lot from them. They were already in real estate and doing very well. They were three single guys and I became good friends with them. I bought my first house not long after that.
Dustin
What do you find yourself doing? Has it progressed over the years? Maybe doing some flips early on, now you're into the long-term. What's been your strategy?
Dale
In the beginning, they were all long-term rentals. I bought some rentals and held onto them. I had a property manager to take care of those. There weren't many. There was a handful because I moved a lot. I lived overseas so I couldn't be here stateside to manage them. I wanted to make sure that I had someone I could trust to take care of them. I had a few and then that worked out well. I came back to the United States and it didn't grow much in real estates, but that was an important part of my financial life and certainly helped me out tremendously. I got back into real estate again in 2002, somewhere there. We started flipping houses then and we have probably several dozen. There are a lot more people, much bigger in this than we are, but we've had a good time.
Dustin
I want to ask you about this because I have this in my blood. Not necessarily my blood, but my father's blood and his father's blood. I noticed you got aviation in the background. You went to Purdue and got a degree in aviation. Growing up, was this a thing? Did you want to be a pilot? How do you settle in? Are you flying now?
Dale
My dream job was to be a fighter pilot. I wanted to be a fighter pilot.
Dustin
Was that the path though to go to college or did you down sell to that?
Dale
I didn't know what the path was. I did talk to a few people that had become fighter pilots and they said you've got to do well in school and you’ve got to go to college. You’ve got to do all these things. I was willing to do whatever it took to be able to have that job. I grew up in a very Midwestern farm manufacturing community. My parents eloped in their tenth grade. They didn't finish high school. I got to see what it was like to struggle as an adult. I didn't want to do that. I wanted to be in business and I wanted to get a good education. I went ahead and did that. I went to Purdue University and we also lived right under what's called Oil Burner Routes. It's where the military flies and National Guard units fly. I'd be out mowing the grass and these F-4 Phantom jets streaked over 300 feet off the ground. I thought that's the coolest thing ever and that's what I wanted to do. However, I went to Purdue University and in my freshman year, Top Gun came out. Everybody wanted to be a pilot out there. It was very competitive and I did make the cut for that. I did get into aviation.
Dustin
Is flying in your future like Cessna or small plane?
Dale
I got my pilot's license when I was sixteen.
Dustin
Is that something you do or enjoy now or was it a thing?
Dale
It was a thing. I will rent a plane occasionally. I've done that a couple of times and go up with an instructor and all that and fly. I love to do that occasionally.
Dustin
I don't know if I ever told you this. My dad was in the Air Force Academy. I was in the footsteps and then in high school, I woke up and said, “I don't want to do that.” My secondary path was I was going to go to Embry-Riddle Aeronautical University. That was quite a price tag at the time, especially as a kid, then Florida State came calling and that's where I went. I went to a state school.
Dale
As we sit here in this cool and awesome facility here at WealthFit, I still live in the Louisville, Kentucky area. I live north of there and I have a little recreational farm with my wife, dog and cat. I am the CEO of a software engineering and software development company called Level 12. I'm building that with a couple of wonderful guys, very high integrity, incredibly bright and we do good work. We do a lot of amazing things. We’re building very data-intensive web applications and there's a tremendous opportunity out there. We're in the digital transformation age for sure.
Dustin
Are you exit-minded or you're building it, growing it and seeing what happens?
Dale
It's a lifestyle business. I don't think there are any illusions of Google buying it or anything like that. That would be cool if that happened but none of us has that goal. We enjoy doing what we do and building a great and very profitable business. Fortunately, we're very blessed. We don't have any cashflow issues for all kinds of reasons. At least we manage it very carefully.
Dustin
I want to move us into WealthFit round, which essentially is my fancy name for rapid-fire questions. In your career, in your life and your journey, what has been your most worthwhile investment?
Dale
My most worthwhile investment by far has been my own personal education. Going to Purdue University was a big part of that but what I didn't realize at the time was my education didn't start until after I got finished with my formal education. I have invested a lot in my after-college education, in business, real estate, marketing, finance and things like that. I would imagine if you could quantify such a thing and I'm sure you could say the same thing too, Dustin. I've known you for a few years now. It's probably multiple bachelor's degrees in multiple fields. I looked at a Master's curriculum may be a few years ago. Not that I was entertaining it, but I knew somebody who was going through a Master's program and I was looking through his materials like, “I've already done all that.” I don't mean that to sound braggadocio. I'm like, “That's not what I'm interested in. I've already covered that territory.” There might be a few gaps in there, there would be a few things in there because they're preparing this MBA student for taking a more senior role at a large corporation, which is not what I'm interested in.
Dustin
What about financially? What has been your most worthwhile investment?
Dale
It’s real estate. There's no question about that.
Dustin
What's that investment that you don't want to talk about? What's that misstep that you took maybe in your younger years?
Dale
There is a couple that comes to mind immediately. One of them was using bad debt and the other good debt. One was I bought a brand-new car right out of college. It was a 1987 Formula Firebird, five-liter fuel-injected. It was beautiful, which is why it was a magnet for sure. I wooed my wife with that. After she committed, I sold it and I bought a ‘72 Regency 98. She didn't leave, so I figured we’ve got to keep her here. Financially, that was one of my worst decisions. Another one was leasing a new car. That was dumb. My other bad decision was a piece of real estate I bought. I didn't do what I had been taught to do. It's important to have good, educated and experienced people around you that have more than just an opinion. A person with experience is never at the mercy of a person with mere opinion. Get people around you who have experience and they can point out the quicksand that you don't know about. What I did that caused the cashflow problems is I stopped paying attention.
When I was learning to fly, my flight instructor said, “Always use your checklist.” I got confident. I came to the airport one day to fly with him to get my hours in. I started going through things and I didn't have my checklist. This is a guy who'd never raised his voice. He grabbed that checklist and he yelled at me at the top of his lungs, “Do you want to get us killed? Always use your checklist. Never ever skip the checklist.” He scared me because he was so out of character and he painted a very vivid description of what it’s like dying in an airplane. I made this bad investment because I stopped using my checklist. I didn't check with others. I didn't do the things you guys teach here. I made an investment that cost me a lot. There was a house that had some things wrong that I didn't discover until after I bought it. I had to hold onto it for several years to have my money back. You should checklist.
Dustin
Dale, thank you big time for being on the show and creating a course here at WealthFit. I'm super excited for people to dive into it, especially those that struggle with money and maybe in debt. This is going to make it clear for them and give them a plan and a strategy and give them confidence. For people that want to keep tabs with what you're up to and maybe check you out on social media if you hang there or a website online. What's the best way for people to find you?
Dale
The best way to find me is through LinkedIn. I'm very active there. There's a few of them like most social media platforms, but you will be able to find me there, especially if you look at my experience and things. You will see the software companies and things like that. I’m happy to connect with you there. If you want to send me a connection request, make sure you mention WealthFit because I have a fair amount of incoming requests and I like to sort those out. If I know that came from your show, I will definitely connect. You can find me on Facebook too.
Dustin
Thank you big time for being on the show and doing what you do in the world. I appreciate you.
Dale
Thank you big time. I've enjoyed it and I hope that people get a lot of benefit from it.

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