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We were fortunate enough to speak with Josh McCallen on this episode. Josh is the Co-founder of Accountable Equity as well as host for the top rated podcast, Capital Hacking.
Josh opens up about his personal life and journey to entrepreneurial success, he talks about how being busy with 10 children has not stopped him from being aligned with purpose.
Josh speaks of the many private equity options available, and how investing in resorts can be a joy on an entirely different level.
He goes on to describe how he had a change of mind and started thinking differently to build assets and get non taxable cash flow. “Depreciation is like magic” Josh quotes, explaining the IRS’ allowance to offset your passive income.
Invest your time and listen to some really valuable insights from Josh McCallen that will take your investment to a whole new level.
How’s it going, everyone? Welcome to the show today. Today, we have an excellent guest joining us—yes, the one and only Josh McCallen, co-founder of Accountable Equity and host of Capital Hacking, a top-rated podcast. Josh McCallen is a nationally recognized hospitality executive, conference speaker, innovator, builder, and investor with a track record for developing exceptional resort properties and growing world-class operational teams. McCallen began his professional hospitality career overseeing a landmark hotel in Austria.
For over 20 years, McCallen has led luxury residential and hospitality construction programs, building numerous businesses and brands worth more than $150 million. His latest, the historic Renault Winery Resort, saw a 100% year-on-year profit in 2020 despite COVID shutdowns and restrictions. Josh also hosts Capital Hacking, one of the top one percent global podcasts about entrepreneurship and real estate. Josh, my friend, so good to have you on the show. I’ve been really looking forward to this.
Welcome, Dave. It’s like we’re good friends. We got to spend time at one of those conferences together, took pictures, and it means a lot to me to be invited on your show and get to know you better. We even shared stories about our children. Thank you so much for inviting me on.
Absolutely, Josh. Maybe we should start there and tell the audience because I used to think that I trumped everyone by saying that I have triplets, you know, and that’s a big deal. Actually, it was a big number, it was big at the time. But tell everyone how many kids you have.
So, Dave, we have no luck having triplets, no luck having twins, but yet we got the double digits, which is something I’m very, in a funny way, proud of. The fact that our family has been around 25 years almost, my wife and I have been married, and now we have 10 children. Believe it or not, it’s hard for me to believe. I’m one of two, so I was not from a big team. But a 22-year-old lady and a two-year-old little guy named Coyle. The breakdown is six ladies and four dudes, and we’re having a great time. It’s a different way of life for most people. I didn’t know this play life, but it’s a lot more manageable than you think. I think most people think it’s harder than it is. Triplets, my wife and I think, would be harder to do than what we’re doing. For you, everybody’s the same age. For us, we have some bigs, some mids, and some littles. So the littles are pretty much taken care of. We got adult women and men in the house; they’re fine.
Yeah, no, that’s awesome. It’s definitely a zone defense style, to put it that way. You move way past man-to-man. That’s true. I mean, that is really awesome, Josh, and I’m sure that gives you a lot of fuel towards your purpose and your cause.
You know, most people don’t say that on a show. I’m really grateful you said that. It does give us cause. My wife says because we get to be in hospitality and private investing now, she makes a joke when she speaks—she hates to speak, but she’s the best. She’ll say, “Well, Josh and I are pretty much in the people business, people making business, people loving business,” because hospitality is all about loving people. But you know, my whole purpose is wrapped up—thank God it’s very aligned.
Not everybody gets to have so much alignment. Our purpose in taking good care of our kids, purpose in making sure good work for our teammates, purpose in trying to deliver something really special. The way we do hospitality is different. And then, isn’t it cool that teammates like you and I get to have investors join our projects? So now we said, well, maybe that’s our ultimate feather in the cap of our mission—to be able to let private investors have assets that only… I mean, we buy things that are historically trending in the right direction and just awesome resorts. Typically, it’s the billionaires that own these types of things, but we make it possible for everybody to be a part of it.
Yeah, it’s awesome. There’s so much purpose in what you’re doing, what we’re doing, and what we’re focused on. But I do love that purpose with the kids, and to me, that was one of my initial last straw moments in this whole thing. I’m sitting there, you know, I had already cycled through a few different financial planners in the early days, and I’m thinking, how am I going to get four kids through college? How am I going to cover retirement and have some kind of life?
I mean, the numbers just don’t add up. No matter how many times you get promoted, you keep getting cut down with taxes. How are you going to get there? Really wanting to provide for your family and make a real life was a huge motivator for me, as I’m sure it was for you.
Absolutely. I appreciate you being so good about explaining that to everybody on the other side because most people feel trapped a little bit. Even if they’re very high earners, salespeople, business owners, they feel a little bit trapped. But I’m all yours; we can talk about so many things you and I.
Yeah, so this is a great segway, Josh. Why don’t we talk a little bit about your background and what got you into the hospitality business? How did you get into private equity? How did it all start for you?
For us, it’s like a daisy chain. It starts with me being a scrappy young guy growing up with a single parent and a lot of government assistance. Some people can really respond well to that background, while for others, it can be a heavy burden. For me, work always felt great. From the age of 12, I always had enough money to pay for whatever we needed. This leads into college, and then I had a cool experience living in Europe as the administrator of an old hotel. It was actually an old monastery from 700 years ago, now a boutique hotel. I got to work there with college students as an administrator.
Fast forward, after years of living in Europe, in Austria, outside of Salzburg, we moved back to America. I had this passion to develop human-scale land development or projects where people’s souls are uplifted by the buildings and by the experience. My wife thought I was crazy because I didn’t have any connections in the building industry. I used lending as my pivot. I left Europe, used residential lending, and anyone can start in residential lending. It’s straightforward, living on sales commissions. If you think of it as a stepping stone, you’ll learn how loans get collateralized, how investors look at loans, how developers need loans, and how to approve them. You’ll meet developers.
I spent a year trying to meet developers, broke into residential lending, and helped a big family office with their real estate assets. It was their capital, our sweat equity, and we helped them build buildings. I got a nice paycheck, but no equity. After the recession of 2008, we started buying hotels on the beach in New Jersey for New Yorkers and Philadelphians. These affluent areas had old, dumpy hotels. We created a prototype hotel in New Jersey as a restoration project and built a successful brand for that family.
Years later, we built so much wealth for that family, and they offered me a chance to leave and take a small piece of what we built. Today, we created a syndication group called Accountable Equity. We’re doing the same work we did for the family offices, but now we get to do it for 150 to 300 great people who never would have had the privilege of doing these wonderful projects. It’s a win-win model of fundraising and operating.
In hospitality, over the last nine to ten years, we learned that money doesn’t buy you good service; you have to train. Beach resorts in the Northeast are awesome for a few months, but not the rest of the year. How do you swell to be a big company in just a few months and then contract without losing money? You train. Our heart became a philosophy of what service can do for people and how to teach to be a servant with positive humility. This mental and emotional pivot became our ultimate calling.
We really pour into our people so that they’ll pour into our guests. We build the right culture with three hallmarks: joy of service, seeking humility as a strength of character, and joining our ministry of serving with love. The goal is for people to feel loved when they leave. If you switch the idea of delivering great service as a transmutation of love, it adds value to the workers and the guests. These are the secrets revealed to us over the years, and now we know why we’re on the path to buy so many good resorts.
Powerful, Josh. Absolutely love it. It’s definitely one of those things—you see the difference between entrepreneurs who are really scaling successful businesses. It’s people who have core values, traits, and principles in how they run their business. That’s the difference. Everyone says they’re great at doing something, but when you tie in those values and uphold them, it really becomes instantiated with the people. That is a massive difference.
I’ve heard so many great things about the resorts, not only from a return perspective but also that people have fun there. People are getting married, especially during the pandemic, and having transformational life events at these places. You’re able to uphold these values, which is super powerful for the team you’re building and your investor community.
That takes my breath away, Dave. First of all, we got to get you out to one of the properties. We’re hopefully going to acquire several more this year. Right now, we’re outside of Annapolis, where we own a major portion of an entire island called Kent Island. It’s just gorgeous. I’m looking out at the marina right now and a beautiful 200-year-old inn, a really successful wedding venue in its first full year already. Up at Renault Winery is the one that all of your friends and my friends are invested in. Hundreds of us—MC Lobster and all the great people.
You said it, but I want to hit it. When you own a resort and you drive down to see it, eat dinner, and bring friends, it’s a totally powerful experience. You treat it like you’re the owner. At first, we saw it as more like mathematical returns, but now we’ve developed that pride of ownership. It’s not just me; our investors feel it too.
It’s completely exponential. This is the difference between renting a place and how you feel when you lease a car versus actually owning it. That pride of ownership is significant. What other types of investments can you get into in the private equity world where you can see, feel, and touch your investment? This is all about experiences. You’re getting your returns, and then you get this amazing experience on top of that. It’s a home run, Josh. Really awesome.
Dave, you’re more than kind. You can almost feel it through the microphone. At first, we saw it as mathematical returns, but now we have this pride of ownership. I love the idea of letting our investors share each other’s beauty. They’re wonderful people, so they’re all in the accredited status. They’re great people—either business owners, salespeople, doctors, or dentists. They want to meet other like-minded people. We created this forum four times a year at no cost to them. If you’re an investor, just come and have a full day with catered meals, get to meet the staff, kick around the tires, and get to know everybody. We move it around the properties, so you may be an investor in Renault, but in the fall, you can have a day with us at the property down in Annapolis. It doesn’t matter which property you’re invested in, we’ll host you.
Awesome. That’s awesome, Josh. Let’s come back a little bit to the resorts and some of the operations, but let’s talk a little bit about wealth strategy. I know we talked about this on your show, and our viewpoint is really, and I think you share this as well, it’s a wealth strategy for a reason. This is a very holistic view that you want to put in place to protect and grow your money, to multiply your money, to position your mindset, position yourself, and all of these different types of things. Tell us about your personal wealth strategy, how that’s evolved for you, and what does that look like?
Yeah, I can tell you the good, the bad, and the ugly. We had a fundamental shift, and this is a rare opportunity that I do feel privileged to have. I was working for that very wealthy family, and because I grew up thinking the harder you work, the more you make, I never stopped working. We were very aggressive at buying properties. I did the construction management, we did the training, we were there when there were crises. I always thought, “Oh, here’s how you make wealth—you run your business really well, and the proceeds are the profits.”
There was a new shift in my mind about six years ago when we had finished three mega turnarounds for the family office. All of a sudden, they did a bank refinance, and I was owed a portion of that. I thought to myself, “Oh, that’s how the wealthiest people think.” They build up the asset, they do earn profit from it, but that’s not the actual way that they benefit big. The big time is sometimes they’ll do a refinance and pull down money out of the debt on the same business they already own. For most CPAs, that will be a non-taxable event, depending on your CPA.
So now they have millions and millions of dollars all at once, instead of $150,000, $500,000, $700,000 a year. They do get that too, but maybe it goes down a little bit because they use it for debt. But now, all of a sudden, they have five extra million or 25 extra million, which is what happened in our case—almost 40 extra million all of a sudden. I was like, “What?” Here we are trying to make a million and a half a year, 2 million a year in profit, thinking that’s amazing, right? And then all of a sudden, I watched how that can be transmuted through debt into big, enormous capital events. That was a big shift.
This is a big mental shift I just want everybody to embrace. Then you have to say, “Well, how do I get a piece of that?” Mr. Dave will say, “I don’t have 10 million or 100 million dollars to start projects like that.” I’m sure you guys talk a little bit about Rich Dad Poor Dad and the Cash Flow Quadrants, have you?
Yes, it’s all about picturing that crisscross. If you’re driving, as Dave said, he loves my old joke: if you’re driving in a Tesla, you don’t even need to hold the wheel. Just grab a pen and paper, draw an X or a crisscross. At the top left, you put the employee—money comes in, W-2. Below that, self-employed money. This is how the money works, and this is how the wealthy think. The B means you own an operating business that you don’t have to work at, that’s the top right. Then I is the bottom right—the investor.
Tom Wheelwright, who works with Rich Dad Poor Dad, says if you want to invest like the best, be treated the best by the tax code people, you need to have a B, a big business, or an I, or both. If you want to get hurt by the tax people, then have all your income come as an employee. He’s not saying being an employee is a bad thing; he’s just saying that’s where you get hurt the most with taxes. This mental shift of using debt as an investor allowed this gentleman to have non-taxable cash that’s sitting there.
He was an investor, so he then took the cash. He didn’t go out and buy cool stuff; he actually bought more properties, which is why the tax code wants you to do it. This is what Tom Wheelwright helped me learn. The reason they give you these benefits is so you actually start more businesses. I watched with my own eyes—that is the natural instinct for proper entrepreneurs. Great, we built nest eggs. Now in my world, I take investors; he didn’t. So now, what do I do? I pay it back to the people who gave us the money upfront.
If you’re listening to Dave’s show right now, and you’ve only ever invested in mutual funds, what I’m about to say will break so much of your strategy in your mind. There’s a way to actually have cash every year, and after about a five-six year period, get the cash back. Depending on where you invest, sometimes you get to still own the thing you invested in. Try that on Wall Street. If you ever want your 100 grand back from a mutual fund, how do you get it back? You sell it. It’s just stuff that you and I have walked through—Alice in Wonderland’s looking glass. We’re like, “Oh my gosh, this is how the wealthy think.”
That’s gold right there, Josh.
That’s how my whole mind has shifted. For the truth being, I’ve put everything in on red. So we have two basic strategies as a family. One, we use whole life insurance to make sure we have large overfunded life insurance policies, which are like savings accounts. I can’t explain that perfectly, but it’s really powerful. Call me if you want to hear more.
Yeah, you’re using the infinite banking strategy.
It’s so cool. Yes, I do that for a safety net. Then I overinvest—and this is positive or negative, depending on your perspective—I overinvest in my staff and my business. Melanie and I have a philosophy that five years into this, we’ll start really pulling capital for ourselves. But until then, I’d much rather have what sounds crazy but a very expensive executive team, so the company is safer, better, stronger, and more diversified. That is me taking cash that we could use to buy a minivan and putting it back into the business by putting the best and most important thing of a business, which is the people. Some say we spend more than anybody else in our space on leaders, but we really want the best leaders. We’re not the smartest person in the room; we want a smart room. So we heavily invest in the B, if you want to think of it that way.
Yeah, no, that’s awesome. If you look at the risk-return profile, typically businesses have the greatest return profile. They also have greater risk. However, if you’re running the business and you have complete control of that, you can manage that risk. You can put your foot on the gas pedal when you need to and really grow that. That’s how the ultra-wealthy are really making their fortunes. It’s not only being an investor and a really prudent investor to access private investments, but it’s also managing businesses, scaling those, and that’s where you see exponential returns.
I really like your philosophy on the strategy, and I think it’s something that is underlooked because people are conditioned by this $30 trillion stock market that says, “Put your money with us. You’re not smart enough to manage your own money, so give it to us. We’ll take care of it.” But in reality, all they’re doing is hitting the indices at the end of the day. What we’re talking about is really multiple different things at one time. You talked about the infinite banking strategy you’re leveraging for protection—it’s providing you liquidity, compounded tax growth, you can pass it to all those wonderful kids of yours without any probate or taxes. That’s amazing. You’ll never outlive your money, and you can create tax-free income streams from that. It’s a super powerful strategy.
As you look at assets, the wealthy people are not selling their assets—they’re borrowing against them to buy more assets and continue optimizing the asset base they have.
That’s a mind-bender, isn’t it, Dave? The first time you broke through and learned that? I’m serious, it was about six or seven years ago when I first watched the family office do that. Growing up, I thought you ran a really great roofing company someday to have a bigger paycheck every year—make $500,000, take $500,000. The rich are doing it on real estate. Typically, businesses within real estate are the holy grail. A roofing company is wonderful, a smart idea, but how about a business where the business is attached to mega amounts of real estate? That’s like getting two assets in one. That’s kind of what the resort world is. We have really large cash flows, but it’s grounded—it has root real estate value, building value, it benefits from inflation, all that good stuff. Oh, and it’s better financing. A roofing company has one type of financing; a company that has real estate has a much better financing structure, which creates better wealth strategies.
This is a really good segue. Let’s talk a little bit more specifically around taxes because I know that’s a key strategy not only of your personal wealth strategy but of your existing business. We have lots of conversations with people about depreciation, cost segregation studies, things like that. Let’s talk about how you’re deploying that within your existing business. How does that work, and how does the investor really take advantage of that?
Big topic. Dave and I are about to break into a big topic, and it may be overwhelming if you haven’t thought about tax this way. Remember, go back to that one book—try to download it if you haven’t heard it yet, my friends—Tax-Free Wealth by Tom Wheelwright. He’ll teach you one phrase: if you want less taxes or no taxes, you have to change your facts. He has a funny phrase: if you want to change your taxes, you’ve got to change your facts—tax facts. You cannot do any games with the IRS; you can only follow their code unless you want to go to jail. None of us want to do anything wrong. What we’re doing is exactly following their code. The code allows you to depreciate. Tom Wheelwright calls depreciation like magic—the IRS lets your income be depleted.
You make $100,000 of rental fees this year in cash—it’s in Mr. and Mrs. Smith’s bank account. But when you do your taxes, your building had you bought a new HVAC system or something, it looks like you lost $100,000 because of something called depreciation. The IRS lets you say plus $100,000 in cash, minus $100,000 in paper losses or depreciation as if the building’s wearing out, which it kind of is, but as if the building’s going to be worth zero eventually. If you do that in the same year—$100,000 up and $100,000 down—how much do you make according to the IRS? You made nothing. People get a little confused. The IRS knows exactly what you’re doing; you’re following their code. There’s no profit left, therefore no tax.
This plagued me. Our resorts have tons of passive losses annually, meaning you depreciate things, you continually buy things. Our investors typically do not have a tax liability for the income they make from us, up to them and their CPA. When we went out to figure out how to finance equipment, this is the nuance we came up with. We looked at the normal ways to get equipment for restaurants and golf carts and all the good stuff that resorts need that make us money—catering equipment, tents, chairs, all the stuff we charge rent for to our guests sometimes. Typically, it’s a lease contract with Bank of America subsidiaries or U.S. Bank subsidiaries. You’re signing a contract that allows them to own the equipment even though you have possession of it.
I always wondered why they do it. Why does Bank of America and all these people let me hold the equipment, pay them monthly, and then I get to keep the equipment when it’s all over? It was never called a loan; it was called a lease. I watched our friends like Dave Zuck do it with ATM machines. The structure is they’re keeping the depreciation. We broke out and created private leasing companies for our investors. This is like, if you’re going to have an expense, what if the expense went to an investor and became an asset?
What we’ve done is create these two, three, five, 10 million dollar leasing companies. Instead of us going to Bank of America to get equipment to run these properties, we’ll let our friends and investor friends own the leasing company. We will literally sign a monthly payment contract into a private leasing company that we all own—you, me, and the investors. We will keep and own the equipment and allow the IRS code to work to perfection and depreciate it in year one. Lots of details there, but bottom line is that’s why we call it the Efficient Income Funds. We’re up to like four of them now, mega successful. It allows the investors to get money back really quick—all their invested capital and some yield. The bigger reason is they use it to offset other income—passive, not work income. Lots there, Dave, but that has become a really special part of our life, and we have hundreds of people that really appreciate that. We do it every year.
Yeah, no, I think that’s such an awesome strategy that you put together recently, Josh. Tell us, from a depreciation standpoint, you’re purchasing equipment for your resorts, so are you at 90-100% depreciation on that?
Thank you for asking. If all things could be wonderfully perfect in this world, it could actually be 100% passive losses. So you write a $100,000 check or even a $50,000 check. By the way, sometimes I have these start at $10,000, so they’re meant to be strategic tools for investors. If you only have $10,000 of passive income, then don’t over-invest in this. Use it to its perfection—offset that with an investment in a passive loss. Typically, it can be 100%, but we never promise 100%.
We say between 90 and 100%. So you write a $10,000 check, you’re going to have what is called a minus statement from us, our K-1, because you’re the owner of the fund, therefore you’re the owner of the business. You get to write it down because you own that equipment. That’s that word—depreciation. Buildings take years and years, but equipment right now only takes one year. This year it’ll change in the future, but for right now, if you buy a business piece of equipment, the IRS specifically says you can write it off in one year, even though it’s going to last 30 or 15 or whatever it’s going to last. They let you write it down to zero.
So you write a $10,000 check, you get a negative $10,000 profit, meaning you get a fake loss, but over here you’re making money. We’re still writing your checks every month, but now you get to offset something else you already owed. Maybe you have a big gigantic rental portfolio that you’ve owned for a long time, has no more depreciation left, and you’re going to pay taxes. You could actually choose to invest about the same amount and remove the taxes from your problem.
Absolutely. Let me stop you right there for a sec, Josh, and let me kind of summarize that for investors. This is what’s super powerful about this concept, but people may not think of it in the broader context. Again, we kind of talk about the traditional way that we’re all taught is to put money in 401(k)s and the market. Let’s say you were to save up a nest egg, you have $4 million at retirement at age 65, and they’re going to follow the theory which says you’re going to withdraw 4% a year and hope you don’t outlive your money. So 4% on $4 million, you’ve got $160k pre-taxes, so that’s probably more like $110k-$120k because taxes are going to be going up.
Now, if you compare that to what Josh was just describing with his depreciation, let’s say you had $4 million in assets in his EIF fund and some other private investments that are kicking off depreciation. You could take that same $4 million, and for round numbers, let’s say you’re making an 8% cash-on-cash return. Now you’re actually making $320k with the same amount of capital. By the way, if you’re doing it right with this depreciation concept, that $320k is completely tax-free. You’re not paying any taxes on that, which is massive. Your capital appreciation still keeps growing. Every few years, when you have another liquidity event, that capital keeps growing, and that’s how you build legacy wealth. I think it’s really excellent.
Yeah, you did a great job. Part of these shows and why I’m so honored to be on your show today and other shows and my own show is, we didn’t grow up this way. I did not know this. Even as an adult running a, I was the president of a big resort company. We had 500 teammates seasonally, and I ran $20-$30 million in revenue annually. I never had a clue about this. It’s not just you who’s listening right now that doesn’t know this. Almost no one realizes this is the way the rich have always done it.
This is why the tax code has—do you want to hear the stat? This was a Tom Wheelwright stat. There’s a 6,000-page tax code. Page one says—I’ll read it. Page one, “All income is taxable unless stated otherwise,” meaning this is the IRS writing. Page one, second paragraph, “Nothing is deductible unless stated in this code.” So first sentence, “All things are taxable unless we state otherwise. Nothing is deductible unless stated otherwise.” Then it has 5,999 pages about deductions.
Tom’s basically saying the first page is what we all thought—”Oh yeah, I just got to pay 100% taxation. Of course I do. Whatever’s taxable, everything’s taxable.” Then he has 5,999 pages that explain how the wealthy have always done it. You and I are unlocking that for normal good families now.
Yeah, absolutely. It’s really like Kiyosaki always said—this country is just lacking in financial education. We’re learning all these other skills and things like that in the academic world, but we’re not learning how to get smarter about our financial future. That’s where you can really have the greatest impact because wealth actually leads me to a great question for you, Josh. Describe what wealth really means to you.
You know, there’s a couple of different definitions. I think the generic one, a good one, is it allows you to have the freedom to choose the things that you can contribute to the most. If you have financial independence, which could be called wealth, then you may end up dedicating your time to build your company, but it’s going to be more of a mission and a ministry. You still might do just as much hard work, but you’ll be doing it from a different point of view. Wealth is the idea that money gives you freedom from the daily grind, but it also comes with a good bit of responsibility.
Accountability is in the business name that we created on purpose because we didn’t just mean one way—we always try to have multiple layers to our names. Accountability is… I have a good friend, Bob Wells, who defines accountability. I have other ways to define it, but I love his, which says you have the ability… I can’t remember the last phrase, but his point is it’s not that you’re being punished for having accountability; it’s proof that you have the ability to control. So it’s not a negative word. My point is, we have to make these choices, and in learning and listening to good people like you and me, it takes time. You don’t have to make any decisions after you hear a great podcast like Dave’s.
Maybe it just opens that window, and then you’re at a dinner party with one of those famous wealthy people or someone who’s wealthy in your life, and you hear them say things like, “Well, we own this warehouse business, and what we’re going to be doing is leveraging it to buy seven more warehouses.” You’re like, “Wait a second.
That means he’s going to pull money out of warehouse one, pay zero taxes, and buy seven more warehouses. Why is he going to do that? Oh, because now he gets seven paychecks or eight paychecks instead of one paycheck.” He didn’t actually write a new check. It’s mind-bending, but this is just the beginning of the iceberg, right, Dave? It’s just the beginning of the idea.
It’s just the beginning, right. That’s another great Kiyosaki quote: “Your financial IQ equals your net worth.” The more you can learn, the deals just keep getting bigger and bigger and multiplying, and your risk goes down as well.
I think your risk does go down over time. Listen, at the end of the day, one of our themes in our Capital Hacking show is that really the capital, besides cash capital, human capital, is more important. That’s why you and I—I’m an avid listener to these shows. I love these shows. I listen to more shows than most people in America, and I also listen to books and read books every week too. We all have to kind of get out of the matrix. I used to joke, “The matrix is telling us, ‘Drop it in the 401(k).’ There’s a reason—it’s like a monologue. It’s like that booming, ‘Drop it in the 401(k). Don’t ever invest on your own.'”
Excellent, Josh. Switching gears for a sec, running a super successful business, a super successful father, proud father—you’ve accomplished a lot. From a personal development perspective, what is the one practice that has yielded the biggest results for you?
I actually have the answer to this one. Sometimes it catches me off guard, you know, I’ve heard it before. This year’s focus on delineating goal setting down to action plans and being more detailed about milestones and really charting the course with precision. My life has always been pretty clear what I was working on, and I think it was communicated well to the teams, but not all the way down. As we get to be hundreds and hundreds of teammates now, it’s becoming more and more obvious that I’ll end up being the bottleneck if I don’t change again and again. Setting goals with precision and with action plans.
Excellent. If you could give just one piece of advice to listeners that would significantly impact their wealth trajectory from what you’ve learned, what would it be?
If I can give two—one is just in my heart right now, so maybe there’s a reason I’m about to share this. My wife used to always say, “You can be replaced everywhere at work, Josh. You just can’t be replaced in the family.” The kids that are your kids, it doesn’t matter how rich or poor you are, there’s just never going to be you. You can’t be replaced. However, every single company could find a way to do it without you. That’s just an important wealth strategy—people are so much more important than the cash.
From a wealth strategy point of view, I’m a big believer, depending on where you’re at in the equation of your wealth growth, I would encourage people to start with house hacking or the strategy of house hacking. The simple premise is to buy a house that you can rent out the rooms and not have to pay. It actually exists in 100 different ways. People who want to buy an RV this year, they buy an RV, put it on an RV listing agency, and they actually get paid to own an RV. I just love that double-win strategy.
It starts with house hacking, but you can hack everything. I have a friend, Dave Van Horn, who talks about college tuition hacking. Ever hear that one? They save up, don’t pay a dollar for college, get all the loans they can for college, take all their money, and buy a duplex in the town with colleges. Then they sell it at the end to pay off the debt. It’s great, right? There are all kinds of strategies.
That is gold right there. This is what gives me so much fire about this business, Josh. When I was looking back, I’ve got four little kids, and you’re wondering how you’re going to pay. I was so diligent about putting $100 a month in their college 529 plans. I’m telling you, they got to college after 18 years, and it was like a 5.5% return over the long haul. Had I had this knowledge and was doing some of that college hacking like you talked about or leveraging the infinite banking strategy and put it into the EIF fund or some syndications, that is completely the difference between going to a state school and going to a private school for all of your kids.
Robert Kiyosaki—we’re talking about him like he’s dead. He’s not dead. He’s wildly alive. But he wrote stuff like, “Never say, ‘I can’t do it.’ Say, ‘How can I do it?'” That permeates good entrepreneurs. You can take that and do that in your own private investing.
Here’s the last secret, Dave, and this is why you and I do shows. The network and the community that come around these shows will help you, even if it’s not just you, Dave, or me. The community that surrounds these shows or shows that are moving in this direction of financial independence, of taking some responsibility for your own investing in a good way—there are so many great people like this. There’s such an abundance mindset. I go to the Real Estate Guys seminars all the time.
Start with the people—the first person you know that has a personal relationship with you or a community that you’ve come to get to know. Just take one step. You don’t have to write checks; you just have to get into the community.
Absolutely. That goes to the idea that you are a product of the five people that you spend the most time with. When you start spending time with like-minded people, other professional investors who are talking in these ways, you get new ideas, new exposure, new insights. It can be super powerful. Josh, it’s been such a pleasure to have you on the show. I can’t wait to get out to one of the resorts really soon. Now that things are finally kind of opening up and getting a little bit more freedom, it’s really awesome. How can our listeners get in touch with you and follow more about what you’re doing?
It’s an honor. Let me say this. The fun way would be Capital Hacking. We have a ton of fun there. Dave’s show happened about 30 shows ago, so you can hear Dave on Capital Hacking. Where I live my day job is at two words: AccountableEquity.com. We have free eBooks there that explain what we do in very simple language, and we’re just trying to build a community.
Awesome. Josh, thanks again so much for coming on today.
Thank you, brother.