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Justin McCormick: If You Got Skin In The Game, You Win In The Game

We are going behind the scenes with one of the Founders of WealthFit, Justin McCormick. If you're hearing about Justin for the first time, you should know that he's an incredibly savvy investor and business guy.

You’re seeing WealthFit. You see everything that's happening here. His official title is the VP of Operations and Finance. What's interesting about him is he understands entrepreneurship.

In addition, he did the wise thing all along the way in the journey. He has diversified and his diversification comes from his passion for learning. His portfolio includes stocks, real estate, oil and gas, green energy, real estate lending, online and offline startups, a restaurant and even more. He has founded a few companies, scaled them and sold them. Those companies combined are over $38 million in sales.

His favorite money-minded quote which is becoming one of my new favorites is from Benjamin Franklin. It states, “An investment in knowledge pays the best interest.”

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Dustin
Justin, you get a tip and you make $100,000 investment into a company and in two to three weeks’ time you figure out that it has 6X. You take that $100,000 and now it's $600,000, but it doesn't end there. Take us back to that moment. Walk us through what that ride was like and the conclusion.
Justin
This was a tip that I had gotten from a broker and obviously, brokers are there to sell but they also have a stake in the game. When I meet with a broker or have a conversation with a new broker, I always want them to have a little bit of skin in the return so they win when I win. This is a company they brought to me. They were in glioblastoma in cancer research and I love that type of field anyway. I love medical device fields but it's a lot like Vegas, it's a big gamble sometimes. With this one, we felt like they had some news that was going to come out and we thought that the news was going to be good and what I have learned is that the ramp-up of stock prices usually premeditate the actual news itself.
This was a few weeks before the news was set to release. It had gone up to about 600%. That $100,000 turned to $600,000 in a matter of three to four-week window. I let it ride and the news came out and it was great, it was good. What I didn't expect and what I learned out of that is sometimes selling on the news, before the news is the right time to sell. I did not do that and then I treated it like, “It's always going to come back.” The long story short there is I let that $600,000 bleed all the way back down to $100,000 over the next six to nine months. I never made the $500,000 except on paper but it was a nice rush. I was in Costa Rica at that time. I could even celebrate that in the way that I was on vacation. It was a nice little rush but then it’s reminding me that stocks for me, I enjoy them as an investment vehicle. There are some great investments. I've done stocks but it's also been a gamble sometimes and this is one of those gambles that paid off and then like in Vegas, the house took it all back.
Dustin
I got so many questions I want to ask. I want the WealthFit nation to understand the key things that you said there. You want the broker to have skin in the game. What do you do differently to make sure that the guy's not just selling you? That he or she is coming along for the ride?
Justin
Brokers get paid multiple ways something, especially in New York in Wall Street, there are a lot of brokerage houses where they get paid in selling the shares of the stock to investors. They also have the other way to get paid. That's usually they get paid a percentage on the profit made. A lot of brokers had dipped their hands on both sides. If I going to have to choose one, I'm always going to choose the guy who gets more of the benefit of the upside of the stock than a broker who gets paid more for pushing the shares. That's one of the questions that I always ask is what's in it for you? What's your commission? What do you get from you selling the stock? How can I tie you more into the relationship? Let's take that part out of it. Would this be something that you bought? Are you investing in yourself? Not what you gifted stocks because that's another thing the brokers get. They get a piece of the share just for selling the stock. I want to know how much money you're willing to put into the company. Then I want you to have a little bit of stake in the upside too. That way, you also can better advise when we get out. If you got a stake in the upside, you're not going to want to ride this thing all the way back down. You want to protect your profits and your commissions as well. That's one of the things I learned going into this.
Dustin
Knowing what you know about going up a 6X return and then writing it back down to the start. Looking back, when do you know it's the time to sell?
Justin
You should sell when you're excited. As soon as you get excited about the return, it's time to get out, that's what I do. It's an old tip. Never invest emotionally. That's always my goal going into investment but if I start to see now that I get emotional about a return, I'm walking away from that investment. Especially on the investment that I don't control and that's with stocks. You never control that investment no matter how anybody tells you to do. All you can now do is control your emotional reaction to the investment. If emotions ever creep in which they do sometimes on a high return like that, don't chase it, just get out.
Dustin
I want to take it back a step. My understanding is you come from a family of educators. Tell me a little bit about this.
Justin
It was a family of educators. There's a long list. My dad taught for 46 years, I never thought he would retire but he did. I thought he would just stay at that podium. He taught eighth grade US History for 46 years on the same class and all that. My grandparents were both teachers. That means my grandma, my grandpa, my other grandma. My mom was a teacher for a while. My sister was a teacher, now she's a principal. My cousin was a teacher, now he's an assistant principal. My aunt was a teacher so I come from a whole long line of teachers. I was going to be a teacher but I realized early on that I didn't have the patience. I wasn't blessed with the patience that a lot of my family members was blessed with that education requires. To be a good educator especially of young people, you've got to have a lot of patience to make sure you keep them on the right path in their process.
Dustin
They're educators and typically with educators, I always think of Rich Dad Poor Dad when it talks about dad not being financially savvy. Was there any financial education early on? How did you go from a family of educators to being a savvy investor, business owner, entrepreneur?
Justin
It was a long process. If you follow the Rich Dad Poor Dad book, I think many people have read that book. I related to that book because of my background. I had that whole family of educators and in Rich Dad Poor Dad, Robert Kiyosaki’s whole family, his dad was the superintendent of the Hawaii Public Schools. I could relate to that really well and it connected with me. I was in my mid-twenties prior to me diving into financial education. I'd gone the exact opposite route. I'd piled up a ton of debt in college and just chasing my dreams and traveling and doing what I want to do. It took me until I was about 27 years old before the light switch finally flipped on.
Dustin
What was that first thing at 27? Did you go stocks? Did you go, “I'm going to build a business?” What was that first step out of the box?
Justin
I went literally to Rich Dad Poor Dad event. That's where I put in my first business partnership and the same one I carry on to this day with Andy Proper. I brought him to that event. We decided to lock in and drop $25,000 and for a guy at that time, it’s still a ton of money to this day but fifteen years ago that was a ton of money. We didn't have any money. I was already $40,000 in debt probably at that time, not including all the college debt. Andy and I scraped together $12,500 apiece and took that investment and dived into real estate which led to a totally different way that I always thought it was going to. It's been a nice successful journey since then.
Dustin
What’s the connection between you and Hawaii? You're in Indiana now, however, companies grow in and it looks like you're moving back. What’s this Hawaii-Indiana connection?
Justin
It was nice to be that simple but I was blessed. I grew up middle class with a family of educators. With a family of educators, there's a lot of time off in the summer and spring breaks. All of their vacation times were nicely lined up with the kids' vacation times. We're all in school together. During that time off, we traveled a lot. Whether it was getting in the car and go into Florida, whether it was coming out to Las Vegas, whether it was going out to Maine and as we got bigger, we went to places like Europe. I was exposed to a lot of different areas of the world at a young age, even growing up in a small town in Indiana. That little exposure there led me to see that there are a lot of things out there. I connected with it and then getting the opportunity to move out to Hawaii after college. I didn't have anything to hold me back in my twenties and I wanted to go out and do anything. I didn't study abroad. When I moved to Hawaii, it took me there. I fell in love with the island. It’s just a totally different vibe. It's a very small town-ish but it connects with my soul. That's what I love it out there.
Dustin
In Indiana, you're a diehard Boilermaker Purdue. What took you to Hawaii? Was it a job? Was it an opportunity?
Justin
It was a job. If we get a little bit farther back, I'd gone to Purdue. I was the fourth generation in my family to go to Purdue. It was the only school I applied to. It was the only school I wanted to go to. It's in my blood and it's going to be in my kid's blood whether they know it or not. I went there for two years and then I wanted to get out. Normal education wasn’t connecting with me and I didn't know what I wanted to do. I moved to DC and got a job with a technology firm out there, a defense contractor. After I worked there for about eighteen months, I went back to school to finish my full degree. At that time, that second time at school was winding down. I met friends in that defense contractor firm and they had an office in Hawaii. A friend of mine called me up and said, “Do you want to go work in Hawaii?” I said, “Yes.” He goes, “Let me call you back.” He called me back about twenty minutes later and said, “We’re moving to Hawaii next month.” I said, “See you there.” We moved to Hawaii together just like that.
Dustin
I'm curious where do you see yourself in the frame? You bounce back and forth. You’re in Indiana now, you’re going to go back to Hawaii. Do you think Hawaii is your place? Do you get the travel bug?
Justin
I don't know if I have an official place. I love Indiana because my family's there. It has a lot of Midwestern roots. One thing that I will always appreciate about Indiana is I learned to wave at everybody. As you're walking down the sidewalk in Indiana, especially the small town in Indiana, it's very traditional to wave to everybody. Even if you don't know them, you wave. There are a lot of interpersonal skills there. I don’t know what you would call it but there are a lot of things that you learn in the Midwestern. You probably get that in a lot of other areas of the country but I enjoy it. I like getting experiences and that type of life skills and life experience from all areas. I lived in Charleston, South Carolina. There's a lot of stuff there that I love as well. Hawaii has a saying where everybody is an auntie or an uncle if you're a friend of the family. A family is big with me and so going into an area like Hawaii where friendships become a family is cool.
Dustin
I want to take this in an interesting direction. You meet Andy Proper, one of the Cofounders and CEO of WealthFit and you guys meet early on. Is that the tech company?
Justin
It’s the same tech company where we met in Hawaii.
Dustin
You're there, you meet Andy, you get excited about real estate, you guys invest. This starts a very long relationship which leads to you buying and selling three tech/internet businesses. What's that story?
Justin
There wasn't much buying going on at that point. We were building at that time. Our tech company was a nice office. Being in your twenties on the top floor of a downtown metropolitan area like Honolulu that overlooks the ocean, it was fantastic. The problem is every day you’re overlooking the ocean and you're seeing people surfing on the waves and you're in a cubicle and you're like, “What do they know that I don't know? How do I become those people?” Real estate became a vehicle. As we got to real estate, all we knew was we wanted to be the people that control their time and that could do what they wanted to do whatever our passions were. We wanted to be those people and not be held to any certain framework that wasn't something that we drew up.
We thought real estate was the vehicle to get us there. What we quickly learned is that to get that business off the ground, we would need technological solutions that would help the efficiencies of those businesses. Andy and I were fortunate to have the technological background that allowed us to build software to manage those businesses. We realized there was an opportunity to take that software to other investors like us and allow them to use that to bring efficiency to their own businesses. We quickly transitioned from a real estate company to a technological company. Our first company, we learned a lot. We did not know anything about business at all. Years later, we're taking a lot that we've learned through that first business onto the second on the third and now it's our magnum opus here with WealthFit. I'm excited about what we've got here going on with WealthFit.
Dustin
Why do you think you guys work so well together? You hear the horror stories of partners and you hear those out there. For you guys to be through three different companies and worked so well in years, that's a long time.
Justin
It's never been about the company. We always had mutual respect and trust. Those are probably the two things that are going to be most cited by almost any successful partnership. The secret sauce to our partnership is there's always been humility. I always respect Andy’s humility in what he does. He's a fantastic leader but egos have never gotten involved in our many years together. It's just not there. We've been able to recognize and celebrate each other's strengths and have been able to successfully leverage those strengths to realize that any ego getting in the way would have been detrimental. His humility in that process has been really appreciative for sure.
Dustin
What happens when you guys disagree? Let's say there's no third partner involved so it's 50/50. How do you work through disagreements of points of view?
Justin
My wife calls Andy my work spouse. We don't argue that much. It's just a lot of conversation and we go back and forth. It’s because you respect and trust the person so well, that you realize they're coming from a place where they honestly think it's what's best for the company, what's best for whatever decision they made. If you truly respect and trust that person, you're going to take a step back and listen to their opinion. We equally will be able to sway each other. Sometimes we haven’t but in those situations, I can't think of one where we haven't come to some agreement and like, “This is how we're going to roll.” At the end of the day, we make a decision and we stick with it. There's nothing like, “That decisions blew up. I told you so.” There's no, “I told you so.” That's important. Don't try to hold back and say, “I told you so,” over to your partner, that's never going to work out well.
Dustin
What's your advice for the WealthFit Nation in terms of finding a great partner?
Justin
Find somebody who has similar life goals outside of the business. If you're just going into it saying, “I want to build this business together,” that partnership might be great for that business model. Andy and I went into all of our partnerships realizing that we had a vision for where we wanted our lives to be. That's why we’re able to transcend this partnership across multiple businesses. It’s because our vision for life outside of the business shared a lot of similarities.
Dustin
I wish I had gotten that advice because there is no doubt from past experiences that we wanted to build the business but the life vision, that's a gem right there.
Justin
That's where you should focus your time. Find somebody who has similar life goals.
Dustin
You have an uncanny ability with numbers. Andy says there is no one on Earth that manipulates Excel, except for maybe Bill Gates, like you. I've personally witnessed you projecting the income of WealthFit a year ago for a rapidly growing startup. For folks, if you don't know that, rapidly growing startups, a lot of hires, a lot of interesting things going on here. It's an exciting time and yet you projected that a year ago and you managed to be within 1% to 2%. Is there a magic crystal ball that I don't know about?
Justin
I tell Andy, “I project what our expenses are going to be and it's my job to make sure that we stay there.” I get a lot of the benefits and say, “Andy, this our revenue number that we need to hit.” He's like, “I'll go make that happen.” I control the numbers and then I had the very fortunate benefactor of having an executioner and leader who can make my numbers look good because my numbers are just numbers on paper. You also need to have a team around you that can make those numbers come to fruition.
Dustin
I’m interested in the expenses. Andy is a great maker and rainmaker creator. Is he also a great spender?
Justin
He's one of the best spenders. It's funny, there are a lot of great stories around that one. It's my job to manage expenses. When you're growing, you want to do things efficiently in speed but as a startup, you've got to do so while also realizing that you've got to live within the constraints of that startup. You can't go out and be spending and build whatever you want. If you wrote down a different business model where you raise a lot of capital, we just had never done that. We've always bootstrapped. There's a lot to be said about bootstrapping as you learn the market, you learn to sell, you learn to live within your means and you learn to grow something from the ground up.
Dustin
It's weird, you're a tech guy and I'd like to think of myself as a tech guy. You've got an IT degree. To me, tech and numbers are in the same field but they're different. How did you get so good at numbers being a computer coder guy?
Justin
My mom was a math whiz. She worked for the FDIC. She was an accountant. She worked for banks. She's done a lot. A lot of that is inherited but I see things very logically. I've never been a creative type. I'm a very zeroes and ones binary logical thinker. How that relates from numbers to technology is there's a lot of that same thinking process. It crosses against both spectrums there. In technology, I was always a coder. I went to become a database administrator which for real coders or real computer science guys, they wouldn’t consider database administrator as coders and I understand why. There's a logic to creating a process. The if-then loops and stuff like that, there's a logic to numbers to get to a result. You always are starting with a problem and you try to get to a solution. Like in technology and in math, there are multiple ways to get to that solution sometimes but at the very end result, you can tell when the solution is right or wrong. That's why both of them are related to me. I enjoy both of them and I've been fortunate to be successful with both of those fields.
Dustin
I'm curious as to what your advice is for the creative founders. You say you're not creative but understand that in business, you've got to know your numbers. If you've got someone that's incredibly creative and they want to get better, if they can't find a Justin, what's your advice for folks when it comes to understanding the numbers, getting comfortable with them, how important do you feel that is?
Justin
It's important. I've had partnerships or people who didn't know their numbers as well throughout the years. There's a lack of understanding there with what's possible. If you're a creative, realize that that’s your strength and realize that numbers, just because they're not your strength it doesn't mean they're not important. They're extremely important and you need to find somebody. You can hire that but be careful because you want somebody that's invested in your numbers as much as you are invested in the creativity of your business. That's why Andy and I worked so well together. I've invested in those numbers. I love those numbers. Spreadsheets are where I live and I will manipulate them. I can make them tell a story that I need them to tell but the reality is, at the end of the day, those numbers will always tell you the truth if you're willing to look at them. You need to be able to find somebody who can do that. I believe that you’ve got to have somebody that can know your numbers and help you get through that data.
Dustin
That's an interesting thread there that I want to point out to the WealthFit Nation. You’ve got your broker who's invested in the upside here. Then hiring somebody, you're cautioning a little bit of a street higher pay on the salary. You want that guy or that gal to be invested in. Is this a thing that you look to do no matter if you're investing or building a business? Is this just your belief or your philosophy that people need to take the ride on the upside?
Justin
I always want people going on the ride. Having somebody who is invested whether it be financially or mentally or, however. Financial investments are always something that I relate to and can connect with. Having that investment in the outcome of the business beyond just a salary, however, you can drive that motivation for somebody. For me, equity is where it's at but I'm an entrepreneur and that's who I am. For some people, that's not them. I've got a best friend who is probably just as smart if not smarter than me in numbers but he's not a risk taker. He likes sitting there collecting his paycheck. He and I had disagreements on whether that's taking a risk or not, but he doesn't see it that way and that's fine. I like having somebody who views that they've got to risk their skin in the game.
Dustin
You've had your fair share of investments and cash outs in business. You probably could now go and be one of those surfers on the beach, I would imagine. Why start WealthFit? Why get behind something new when you could probably invest full-time and have a go at it and even maybe play some Poker online? Why start WealthFit?
Justin
Education. It's my way to tie back to something that I knew I wasn't meant to do in the traditional format. My parents are all educators. I knew that going that traditional educational route of being a teacher in that regard was not going to be my forte. I have a real passion for education and I have a real passion for finance investing in the business. WealthFit provides a synergy between those two passions for me. It's something that I've been able to connect with in that regard now. I feel like I can educate, not in my own education because I get a lot out of WealthFit as well. There are a lot of things from all these trainers that we've been so blessed to have as part of the community that I've been able to write a lot of information that I don't know and that I can learn from. I'm also proud of the fact that I can be part of a platform and a business that can provide such an array of education to so many different people. That's my own personal connection.
Dustin
I would be remiss if I didn't ask you this because you've got a mind, you see opportunities, you look at investments and you want to get in early. I get your personal motivation for why WealthFit. What opportunities did you see in the marketplace for starting this? No doubt, there are other people who provide education. What did you see in the market?
Justin
There are tons of content media companies out there. Right now, we went to the social media age where there’s a lot of crowdsourcing content creation. There are a lot of people in similar markets as we are that do that approach. What I liked about that was I thought there was an opportunity to go out there and find actual experts. Not necessarily crowdsource from a large group but niche-crowdsource from true experts that have had the experience. There are ways to teach and then there are doers that can teach. I thought WealthFit had a real opportunity to go find those doers and then take their experience, record their experience, and share that experience. There's a lot of value there that I just don't think that was in the marketplace at the time. We’re looking to fill that little niche in that little corner to provide that and what the doers do and what they've done to be successful.
Dustin
You don't know this but I did ask some of the members of the team. Your prior ventures were virtual ventures.
Justin
They were, they have always been and this is the first non-virtual in twelve years, thirteen years, a long time.
Dustin
We've got now an office in Hawaii. We've got the studio in San Diego. You're getting on the plane quite a lot and essentially, it's different than the other ventures. How would you say you've grown? What have you learned from running a virtual business with people all over the world but now having people in an office? What have you learned along the way and how have you grown?
Justin
I absolutely love it. The team members that we have at WealthFit are tremendous. The biggest thing I've learned is it allowed me to connect with people beyond just a computer screen. It was hard. That first twelve years, we would give tasks and then we would judge the result based on whether the task got completed or didn't get completed or how quickly or how efficiently that task got completed. On face-to-face, there are a lot of other intangibles that go into it beyond task management. There’s emotional management, there's timing, there are life things that come up. When you're virtual, you're basically only managing the task and not necessarily managing the people. As an office-based company, you've got to manage a group of people who have other things going on in their lives and they also have their own emotions, experiences, and desires.
It's been great to take all those things and combine it with their great skills, what they can do and bring to the table to get the best out of people. That's something that I'm continuing to learn about. I appreciate that these people as part of our team trust us. I don't take that for granted. There are a lot of trusts that they've given us as leaders of the company and I respect that trust. I feel like I've got to execute to deliver on the trust that they give me because if I don't, I've let them down. Being there to look somebody in the eye, I didn’t have that connection when I was virtual. Now, looking somebody in the eye, it's a totally different feeling.
Dustin
Is it harder?
Justin
I don't think it’s harder. It's not whether it's easier or it's harder. To me, it's better. I don't care if it's harder. I don't think that way.
Dustin
I want to move us into investing because it's one thing to get entrepreneurial advice but why not get both? Let's get into your brain around investing. In investing, they say pick what you know, stay in your lane. Let’s talk about that.
Justin
That's just me. That's who I am. I want to experience new things, I want to go to different places in business and investing. If I was doing the same thing, that works and I wouldn’t say it doesn't work. Everything works for who they are but I want to invest in things that I get excited about. I know I said when you get excited, get out of something. There's a little bit of difference. If I'm starting a business or if I'm going to invest in a business venture where I have an equity stake in that business, I want to be excited about it. I want to be excited to learn about it. I'm excited about who we're going to impact. There's got to be something where I'm excited about because I haven't done it before and it connects with me. Like I'll never open a dance studio, I don't care about dance but owning an oil well, that seemed cool to me. I wanted to learn about it so I decided to invest in a 500-acre oil lease in Houston, Texas. Then because I felt guilty about that, I wanted to invest in a green energy company and so I did that to balance that out, the karma. I've got to be excited about that. I don't believe in staying in one lane as far as investing goes.
Dustin
Stocks, real estate, oil and gas, green energy, real estate lending, obviously startups online and offline, restaurants. I'm curious as to your process. Let's talk about the oil well, the first time you did it. Was it like you were reading up on investing and you were like, “This is cool?” Did it drop in your lap and then that forced you to educate yourself and then you got excited? How does that work for you?
Justin
It dropped in my lap. The opportunity was there. “Here's an opportunity, are you interested?” “Yes, I'm interested. That sounds cool.” Then I decided to learn about it but I didn't learn about it until I decided that I wanted to invest in it. I already knew I was committed into getting involved in that investment and then I went to learn about it.
Dustin
Are there any investments on your bucket list? Something you want to get into but maybe thinking about but you haven't done it yet.
Justin
I'm sure there are. I wish I could think of them off the top of my head. I'm not one to shy away from any opportunity to invest in something that I'm passionate about and what that comes down to is I'm excited about investing in what my kids want to do. I don't know what that is yet. One of the investments that I do is it’s not really an investment. I put a set amount of money away every year for each of my children. At the end of this goal, they’re going to have quite a nice little stockpile of cash that they don't know about and they’re not going to know about for quite a bit. What it's intended for is to invest in their education and to invest in something that they're passionate about. I don't know what that investment is yet but I'm looking forward to it. I am looking forward to that part of being a parent when my kids get a little bit older and I can invest in them a little bit more.
Dustin
I think that education is priceless. You're an educator. You know. There are book smarts and then there are actual real-world experiences. I'm curious about these emerging things that are coming out, the controversial ones. I'm curious as to your mindset around them. Number one being Crypto followed up conveniently by Cannabis. Are these investments that scare you? Do you have a moral thought there or it's just a deal?
Justin
No investment scares me but every investment has a bubble and Crypto to me reminded me of some stock investments I've made and obviously, it's played out like that. There are a lot of people who got excited and they chased it out. I had Bitcoin. I bought it for $500 a share but I sold it out at $2,200 a share, so I missed that big huge boat. As soon as I got excited I was like, “I got my 4X return, I'm out,” I got out. I learned from my previous investment to get out. What did I learn there? I missed more of a run. I could have followed it all the way to $20,000 but I've also missed that whole big downswing it had. I'm not scared of any of those investments. I'm excited about the opportunity to learn about them and then it’s just whether I have got the time and the desire at that moment in my life to pursue it any further.
Dustin
Your most worthwhile investment, what would you say that is?
Justin
It's easy to say your education and that's obviously the truth but my most worthwhile investment has been with my friends and family. I love spending time with my friends and family. One of the biggest things about moving to Hawaii is I'm going to lose a little bit of that friends and family time. I love investing, taking my freedom and time and spending it with my friends and family. I stopped by my mom's house right now or multiple times a week because I can. I see my sister and I see all my cousins. When we get together for any family event which is usually once every six weeks or so, there are 40 of us there. That's where I love spending my time.
Dustin
What's the investment you don't want to talk about? Was it that one that I made you talk about?
Justin
That's the thing people need to get over. Everybody wants to talk about their wins. Everybody loves to talk about their wins but that goes against that humility and ego thing. There's as much if not more to be talked about in the losses. Andy and I have not only been business partners, but we've also been business partners in investing. If you read his episode which you should, it's fantastic. He talks about an investment that we made where we ended up losing about $400,000 on. That was the most money I'd ever lost on investment and it was very painful. That story is already there, go back and read his episode. It's a good one.
Dustin
It is, I definitely could validate that. I'm curious what tools or resources do you use to manage all these investments?
Justin
Google Sheets. I've moved on to the cloud. The cloud is where it's all at now but it's amazing. There are a lot of smart people out there. They have built API’s and formulas into Google Sheets and I manage it all there.
Dustin
Have you got any fancy tips? Have you got pivot tables or anything special with this Google Docs?
Justin
I do, but you don't need to be that fancy. You can just check on it from time to time. What I love to do the most is I create a list of everything I have. It's a very basic balance sheet. It doesn't need to be anything crazy but I list every account I have and then I go through it. I update the balances or investment in that and then for the non-bank accounts or the actual more dynamic investments where you have equity and you got to put a value to them, I do that with a straight 3X EBITDA and value that on my balance sheet to keep track.
Dustin
There's a WealthFit article that you put out on
Justin
That was never the goal when I set out. It's the outcome that I got but it was never the goal. Prior to this whole business venture, my credit score was not great. I alluded to that, I was significantly in debt. I was young and dumb and missed payments and all the things that you're not supposed to do. I was adamant about paying that all back. I became debt averse and that’s not necessarily a good thing to be when you’re in a business and an investor. Coming off of that cycle in my life, I became debt averse and so I began doing things intuitively like paying off my credit card as soon as I used it. I would expand my credit limit because I would start learning things like, “Expand your credit limit so you can use it when you need it.” It's valuable advice but doing that also had a positive impact on my credit score that I didn't realize we're going to have.
One of the big things that affect your credit score is the ratio of your rollover type debt. What they consider rollover type debt is your credit card debt and stuff like that, stuff that has a fluctuating account balance. If you can keep that down to zero, you're doing well. Because I was so debt averse, I was making payments on my credit cards three to four times a month. At the end of every week like on a Saturday, I would write a payment to my thing. My credit card limits were going up and my balances on those reports are always at zero. You do that for 12, 18, 24, 36 months, soon you’ll end up with a perfect credit score unintentionally. If that's something that you want to go after, I’m sure there are tons of places where you can find tips and tricks. To me, it happened inadvertently.
Dustin
I understand you're a frugal guy. I'm sure you could buy a Lamborghini or at least lease a celebrity but it would seem so against your nature. I want to know what is your guilty spend. What's your splurge? Life is good, you may be a little looser. It was a bad day for you and you get a little loose. What is that thing that you like to splurge on?
Justin
Everyday items, whatever that is. I don't like to say no too often. I’d say no to myself more than I probably should but it's more life experience. If it's something that I can do with friends or family, I'll say yes every time, whether we're going to Purdue ball game or Purdue football or basketball game, whether we're going to Costa Rica for two weeks, going to Hawaii for a couple weeks, go into wherever we're going, I'll do it every time. I splurge on experiences with people that I care about that bring a lot of value to me. When it comes to buying a Lamborghini, I love Lamborghini. They look cool but I've only owned four cars in my life and one of them is because I left Hawaii for the first time. I’ll be 40 here in a few months and I've only bought three cars. I don't like to make that type of big purchase just for myself to get enjoyment out of. I get way more enjoyment out of sharing that experience with other people.
Dustin
Knowing how you grew up and it took you 27 to think outside the family box essentially. You mentioned the kids. What are you doing to train them to be WealthFit?
Justin
I do a couple of things. My son will be seven years old but since he was five, I bought this game. There's a Cashflow game by Robert Kiyosaki with Rich Dad Poor Dad that I've gotten when I was in my twenties as well but they had made a kid's version. As soon as I found out my wife was pregnant, I bought that game. I bought it off eBay because they weren't posted at the time. I kept it in the game closet for five years. As soon as I thought he could understand it, I got it out. It's been fun to play that type of game because we're competitive people but the great thing about that game is everybody can win that game. It's about following the game, following the rules and if you make the correct decisions, everybody wins. He loves saying that he's the Cashflow kid. He loves it. The second thing that I'm doing is WealthFit. That's the culmination of everything that I wanted, my secret thing and like Andy shares that same thing. I talked about we share a lot of the same life goals. We obviously became fathers and parents around the same time and we both have all boys at this current time. We've been always following that same little path and WealthFit allows us the opportunity to create an educational platform that when the time comes, we can share that with our children as well.
Dustin
We mentioned Rich Dad Poor Dad. For our audience that is hearing about Rich Dad Poor Dad by Robert Kiyosaki for the first time, it had a great impact on all three of us. We were fortunate enough to get him on the show. If you haven't heard that episode, it's a great episode. Check that out. He's done some amazing work and hopefully, we can get him to create of course for us here at WealthFit. I want to ask, you already dropped it, you hinted at that whole debate with kids on entrepreneurship upbringing versus traditional college. You're a diehard Boilermaker and you hinted that. What do you think are you going to do with the kids for college?
Justin
Both, I come from a family of public educators. There are a lot of things that you learn in college and in the public education that may not be as what you would say are traditional business or investing or entrepreneurship education, but you learn how to work in teams in projects. You learn a lot of other interpersonal skills that you can get out of that type of formal group educational setting. It might be a little harder to replicate outside of that arena. Where traditional education is left off is it doesn't do a very good job of creating business-minded entrepreneurs in the traditional sense. Their goal is to serve the mass and with WealthFit and with financial education, you're fit in a niche. It's an important niche that helps the mass so when they come out, they have jobs and we will all be over to provide that as well.
Dustin
My understanding is that you take in a lot of information: business, news, politics, market data. You're looking at your investments. How do you manage this? You've got all this input coming in.
Justin
You guys just don't know how to shut valves off. There are seasons and times for everything. During basketball and football season, I probably turn in a little bit too much Purdue consumption but that's okay. In my twenties, I was way more into politics as a lot of people are, there are teenagers and young twenties. They're idealistic about the world. They think they can change the whole world. They can if they're focused in but you got to be able to funnel that stuff out. I don't want people to turn themselves off to it all. You lose out on a lot of perspectives if you don't understand the people. I like to listen to a lot of different media because I learn a lot about what's going on and what's impacting the world around me and the people around me. When you're creating businesses and you're working with teams and you have a lot of different people you get to interact with, you need to know what could be impacting these people? What challenges could they be having in their lives that would allow me to connect with them or to maybe find opportunities to improve what we're doing? There's a lot of intrinsic value in being able to even have a water cooler conversation. We don't have any conversations around the water cooler but being able to have a water cooler conversation with a team member is valuable about some things that are going on in the world.
Dustin
When does it become noise? Do you feel it and you get overwhelmed?
Justin
I don’t get overwhelmed. There's a lot that's noise but that's why I say it's a valve you got to be able to turn it off and you've got to know when to prioritize. There are seasons of work. We're obviously at WealthFit right now. Any startup, there are seasons of work like this for a startup where you get to dial it in and focus and you've got to be able to turn off that noise. If you're one that's easily overwhelmed and that can’t cycle through that information and silo it, I would recommend not taking it at all.
Dustin
Do you do it only in the morning or throughout the day? Is it like a valve?
Justin
For me, I focus well for short spots, 45 minutes is usually about my focus time and then I need fifteen minutes to do something else. I can get intense for 45 minutes on something and then I'll spend the next fifteen minutes that hour doing whatever it is. It could be task management, organizing what I need to do for the next hour. It could be reading an article but then I'll use that to unplug and then I'll cycle through that ten times, twelve times a day, 45 minutes on, fifteen minutes off. Not intentionally, that's how it usually works out because that's how I know my mental clock. I can usually do something for about 45 minutes and then I have to take a break.
Dustin
Do you have any other special routines? Anything you do in the morning or maybe at night that coincides with that?
Justin
Nothing special that might be special to other people but nothing special in that regard. I always like to debrief with Andy. Andy and I debrief every morning. When I'm in Indiana, as soon as he gets to the office, we're debriefing. If we're together in Hawaii, we're debriefing that breakfast. We get up early, getting off about 6:00 AM and then we go to breakfast about 8:00 AM. We spend that hour prepping for the day, going over whatever we need to do. We take some intentional time in the morning to make sure that we’re all focused on what we need to get done for that day. Spending a little bit time on the big picture stuff for the week and then the big picture goal or the company goals for that quarter, for that month.
Dustin
I want to give a little love to the WealthFit team. I don't know that this came out in Andy's episode but for those of you who are just getting to know Andy Proper, the Founder, we have an episode with him. He is known for taking a nap or a meditation. This comes from a WealthFit team member. Do you do this as well?
Justin
I've attempted. I’m not nearly as good as he is. One of the things about traveling back and forth in this season, where I'm traveling back and forth between Hawaii and Indiana is time zones mean very little to me. I'm not very good at being able to step away. I say step away for fifteen or twenty minutes every hour. I'm not very good at being able to lay down for fifteen or twenty minutes and I should be. When I do it, I do it more because I'm a little jet-lagged or because I got up at 3:00 AM Hawaii time and now it's 3:00 PM. It's been twelve hours since I've been up and so I did twenty minutes because it's been a twelve-hour day and I've got three or four more hours left. I don't do it intentionally as much as I should.
Dustin
This is a follow-up to that from a WealthFit team member. Flying back and forth, this is a good size flight from Hawaii to Indiana. Any tips on travel and staying healthy? It's chaos sometimes to travel. What do you do?
Justin
A lot of systems. I try to stay close to my time zone I'm usually at. In Indiana, we’re in Eastern time zone but when I get to Hawaii, I try not to get on Hawaii time zone. I shift my evenings, my evenings become my mornings in Hawaii. I'm up at 2:30 AM or 3:00 AM and then my evening is three hours than in the morning. It's from 3:00 AM to 6:00 AM is when I have my me-time. When I get home at 6:00 PM, I eat dinner and then I go to bed at 7:00 PM and I'm in bed at 7:00 PM. I never try to shift my time zone. It works for me. When you're traveling that much you've got to have some body rhythm and sleep rhythm and that's what works. The other thing is I splurge. That is the one thing I do. I am frugal but I will fly in the back on the way to Hawaii because the time zone works that I leave at 8:00 AM. I get to Hawaii at 4:00 PM. That's fine but when you leave Hawaii to come back to Indiana, you're usually taking red-eye. There's no way around it. You're leaving at 4:00 PM and you're landing at 9:00 AM. For me, that means now that I've been blessed with the opportunity in the financial situation I'm in on, I splurge for the first-class ticket every time on the way home.
Dustin
Do they have the bed on any of those flights?
Justin
Yes, all of them. I got to lay down. The whole laid down flat and it changes everything. When you get home at 9:00 AM, you've been gone for a week and a half or two weeks, your three kids don't care if you're tired. They want to play with you. I get, “Daddy's got to make sure he's rested so he can make sure he can make time for the kids when he gets home.”
Dustin
Another question from a team member. How do you define happiness?
Justin
Do you enjoy what you're doing a majority of your day or your life? I enjoy what I do. For a lot of people, flying back and forth from Hawaii to Indiana as frequently as I do every two weeks would be torture but for me, I enjoy being in that office and being around all the team members we have. I enjoy being back in Indiana and being around my friends and family and stuff like that. I get to experience the best of both worlds right now and I get a lot of joy and happiness out of being able to do what I love to do with work. I get to do what I love to do when I'm outside of work.
Dustin
You're a positive guy, you've got a great attitude and you make the comment that you learn a lot from the losses. This is also another question from a team member. When you've had adversity or obstacles in your way, when the chips are down, when the investment isn't looking great. How do you overcome it? What's your attitude around that?
Justin
It's funny you bring that up. The first thing I think of is my best friend who I was a college roommate with. He was killed in a car wreck when we were in college together. I think of him a lot. There's this moment in my life where I was 23 years old. He had just got out of the Marine Corps. He was in San Diego. He was one of the first people in Afghanistan. He was in Australia on September 11th then they went right to Afghanistan from there. When he got out, we went back to Purdue together and we were roommates. There was this time I just got out of the class and I called him and said, “Come pick me up.” He was like, “I'll be right there.” He knew that I was always working on pushing myself and he was always working on pushing himself. I was sitting there waiting. I was like, “Where are you?” He shows up about 25 minutes later and he was like, “Let's go.” I looked at him and I was like, “Where is the car?” He was like, “There's no car, we're running.” I was like, “We're running? I'm not ready to run.” He was like, “Yes, there's always a good time to run. Put your bag in the lockers.” Luckily, he knew the building I was in, there were lockers and so I threw my bag in there and he said, “Let's go.”
I was in no shape to run but he looked at my ankles, “Just get behind me and look at my ankles. Don’t look anywhere else, just look at my ankle.” We run about three and a half, four miles back to our apartment and every time I wanted to quit, he was like, “Just don’t. Take your next step. Look down on my feet and don't stop.” I literally fell into the lawn of our apartment complex and I threw up. It was not a pretty sight at all but I got to the end of that. I realized that no matter how hard or how much you want to quit, if you keep your head down and look at that next step in front of you, you'll eventually make it to your goal. Whenever I've been challenged in my life, I think of that and it's allowed me to put things in perspective.
Dustin
That's not necessarily your defining moment but that influence of your friend and his passing makes you think that anything can happen in life. What would you say then is your biggest defining moment?
Justin
There have been a lot of challenges. Everybody has their own story of adversity. I was 23 when that happened and then less than a year later, he passed. At that time, he and I were literally best friends. I was the one who had to pick out his casket. I was the one who had to make a lot of family decisions with his family that was there. His family was there but I knew him the best. He had been away at the Marine Corps for four years and he and I had always stayed in touch. I made a lot of decisions there and I grew up a lot. It allowed me to see that life is short. To me, he was always a better person than me. From then on, I learned a lot about not taking for granted every opportunity that comes across your way and says yes to a lot of things that you normally would say no to. If you want to say no to, ask why you're saying no to something and then if you think you should say yes, take the chance.
Dustin
Justin, it's been awesome having you on. I definitely want to pick your brain more about investments. Maybe there's a round two coming in a later episode more on that. I'm curious how can people keep tabs with you? Obviously, they can go to WealthFit and check out what we're doing there but are you a very social media guy? Are you a Snapchatter?
Justin
I am not. I'm starting to learn that I am older than I think I am. I was talking to Andy about this like I'm still the traditional email guy. I've learned a lot of people on my team members are probably not email guys anymore. Email is fading and that's very shocking to me as a form of communication but I'm on social media. You can find me on Facebook. I’m not one who posts a lot. I'm on Facebook because my wife posts a lot of pictures of our children and I want to see those. I'm there, you can find me on social media. You can follow me on WealthFit.com. You'll see articles and podcasts and if you'd like, you could reach out to our great customer service team. I would love to talk to anybody who has any follow-up questions. Send an email at Support@WealthFit.com and they'll put you in contact with me.
Dustin
Justin, thanks for being on the show.
Justin
Thank you, Dustin. I appreciate it.
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