Justin Donald, author of The Lifestyle Investor, has been named the “Investment World’s New Warren Buffett.” Justin joins Bob and Ben to talk about his transition from a business owner on a hamster wheel to a lifestyle investor with control over his time. He talks about his first cash-flowing investments, how he creatively structures deals, and lessons learned from his investment mistakes. And as a special bonus, Justin is a member of the elite investing group Tiger 21 and shares what asset classes he’s excited about. In our passive investor spotlight series, we talk with individuals who have had success investing passively in alternative investments. Throughout this series, we’ll dive into what’s worked for them, what hasn’t, how they vet sponsors.

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Passive Investor Spotlight #5: Buying Your Time Back With Justin Donald

We’ve got a fun episode for you. We have Justin Donald as our guest. You may have seen his name around. He seems to be everywhere. He is the author of The Lifestyle Investor, a Wall Street Journal bestseller, and the host of The Lifestyle Investor Podcast. This is cool because Justin is not just one of those talking head financial gurus who talks a big game and has never done anything. He is the real deal. He has done this himself. He has built a pretty great net worth, has done a lot of deals, and has been in this space for many years doing alternative investment deals. We dive into his story, his background, and headlines.

The whole point is not just to build another hamster wealth but how you buy time, freedom, and do the things you want to do. We’ve talked quite a bit about TIGER 21. This is the group of ultra-high net worth and how they invest in alternatives. He is a member of TIGER 21. We get to hear what he likes and what he’s investing in. Stay tuned.

If you are interested in seeing the potential deals that we have coming down the pike, be sure to go to AspenFunds.us. We have an offerings tab. You can join our Investor Club to be notified and get first access to future deals we have coming down the pike. Enjoy this episode. Thanks for reading.

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I am joined by fellow co-host, Bob Fraser. We are joined by Justin Donald. Justin, thanks so much for jumping on.

I’m happy to be here.

It’s funny because I saw your name pop up even on Facebook and on all these ads. I kept getting followed by your ad crawler. I’m like, “This guy is cool. I want to get him on our show.” We come to find out we have a mutual connection. That was awesome. Here we are. We’re excited. For those of you that don’t know Justin, he is the author of The Lifestyle Investor, which is a number one Wall Street Journal bestseller book. He also has The Lifestyle Investor Podcast. He’s all about investing and he’s got a cool story. Justin, for those who may not be familiar with you, give a little bit of your background and your whole journey into what you call the lifestyle investor.

I’ve got a fun story. As with many people, I started out bound by a job or a business that became my job. I worked hard to create this lifestyle, this business that would provide me freedom and autonomy and it didn’t. At first, it was fun and it was exciting, but it was more work. I feel all the answers had to flow through me. It became much bigger and bigger. I wanted to get to the point where I could work because I wanted to, not because I had to, and that was it. I don’t want to sit around and do nothing. That doesn’t sound interesting to me.

It’s important to recharge and take time off. What a lot of people that I work with and meet experience is this idea of being a slave to something. You’re a slave to the business you own, a slave to the job you have, a slave to the money you make, the material possessions you own, or the security of maybe a routine. I value freedom and being able to spend time as I would like to spend it. I see that others feel the same way.

My goal is to help people buy their time back. I spent time doing this. I learned how to buy my time back. I started buying assets that produced income. That income covered different parts of my cost of living. I had a wake-up call where I had always heard and learned from my mentors that you should be investing in the stock market. That’s where savvy investors put their money and through qualified plans where you’re going to have no access to them until your retirement age and all these things.

I learned this unfortunate truth. The way the returns are advertised makes you think you’re getting a good return. If you do the math, your return is nowhere close to what you may think that it is. That was my case. It was like I got punched in the gut. I got all these statements saying that I had these positive returns. When I ran the numbers, I had lost money. It didn’t make any sense to me. I’m like, “How is this possible?” It says 7% return, but when I do the money and how much I put in, I had less than what I put in. That opened my eyes to the manipulative nature of the financial industry and the things that can be done to make sure that they get more of your money with the frequency that you take less out.

[bctt tweet=”The unfortunate truth of the stock market is that the returns are nowhere close to what you think they are.” via=”no”]

I wanted to learn how to be in alignment with what I wanted to be in alignment with. If someone’s going to make money off of me, that’s fine. They shouldn’t make money when I’m losing money. I would rather it be a win-win scenario. I got into my first investment outside of the stock market. This is where alternative investing began for me many years ago. It was in mobile home parks. That’s how I got started. It’s a real interesting story. I had a friend that was doing it. That made sense to me. At first, it didn’t. He said, “I’m going to sell all my single-family homes and buy mobile home parks. Do you want to go to bootcamp to learn how to do it?” and I said, “No.”

That doesn’t sound interesting to me.

This is interesting to our readers. A lot of folks have jobs. They’ve got some passive investments on the side but are looking for, “How can I grow this?” Others that are high net worth and may be trying to figure out, “How do I get some freedom?” I love the way you talk about buying your time back. A lot of times, you start your own business for freedom, but you end up building your own hamster wheel. Take us on the journey of how you broke out of this and solved this problem and some of the hacks you did.

The interesting thing is I built the business to get out of the rat race. I was on the hamster wheel. What ended up happening is I built a much nicer hamster wheel. I didn’t even realize that’s what it was. I had nice TVs on this hamster wheel. I had the finest wheel with the best axle. I had distracted myself into believing that I had achieved what I wanted to achieve. I realized my wife and I need to be in alignment. She was working a lot when I was off. I was working when she was off. We needed to pair up our schedules years ago. We were about to have our daughter.

I thought, “It’d be great if she could have the flexibility.” She was a high school teacher. It is not flexible but has great flexibility in the summer. I had a pretty heavy lift for the work that I was doing at that time. When I was running the numbers, I realized that if we buy the first mobile home park, it totally replaces my wife’s income after taxes. On paper, it’s not like, “My wife is earning $36,000 a year. The park was producing $36,000.”

After taxes, you would see that the numbers were identical. I bought that park. She was able to retire from teaching. She ended up helping me in the mobile home park business because we decided to buy more. The next one covered our survival income, which was what it cost us to survive without any trips, fine dining, or anything like that. It’s just basic income, groceries, utilities, car payments, etc.

Were you running these parks back then? You’re busy now.

 
In the early days, I was running them. Mobile home parks are a lot different than most other multifamily. It’s a lot less of a lift. There’s not a lot to do. It was just 5, maybe 10 hours a week max. It’s not the same animal as an apartment complex. Most of the residents own their own property, own their own homes. You don’t have to maintain the home. You just have to maintain the utilities to the home. In time though, we bought that second park and it covered our survival income. We bought our third park and it covered our lifestyle income.

At that point, I knew I didn’t have to work. It was a true choice. I get to work. I don’t have to work. What is it I want to do? What is the hour breakdown that I might want to work inside? What am I passionate about? At that point in time, we also had enough profit to be able to bring in a manager to run everything. My wife was able to step aside. That same person who stepped in, who’s worked with me in every business I’ve ever done, runs our entire real estate portfolio. We’re probably close to the top 75 owners of mobile home parks in the US.

What if she wants to become a lifestyle investor? You lose your employee. It’s a problem with this. Somebody has to do the work.

Someone’s got to put in the time. I hope that in time she does graduate to this and find someone to replace herself that she can train and teach to bring in. I’m not afraid to lose anyone. I would be bummed to lose her, but I would be overjoyed to see her following the ten commandments that I outline in my book, The Lifestyle Investor. She can create true freedom, autonomy, and agency in her life.

The stock market has been a pretty rough ride right in the public markets. Going back to your light bulb moment back when you realize, “I’m not taking home much more than I’m putting in.” The way that the whole system is set up is you build this big nest egg. When you’re ready to retire, your cashflow needs distributions. You have a set amount that you hope you can earn, but then you’re eating into your principal every month and you’re taking distributions. A lot of people don’t realize and where the system starts to break down is something that people call sequencing risk.

If the market is down about 25%, you’re selling those positions. You’re taking realized gains or losses and reducing your principles. The pie you’re using to generate those returns decreases over time. It has a dramatically negative effect. As an example, in this mobile home park, you aren’t eating into your principle. In fact, your equity is growing over time as you’re paying down your mortgage, as the market’s appreciating. You can generate. You can live off the cashflow purely, not on any principal or equity. Talk a little bit about that.

It’s so interesting. I have a lot of friends that are in the market. The market is great when it works for you, but having all your eggs in that basket is a pretty risky endeavor. If you look across the wealthiest people in the world and even more notably here in the US, you’ll see that it is a smaller percentage than what the financial services industry wants you to believe that it is. A lot of people that are in a big position in the stock market are at the point in their life where they’ve made their wealth and want to maintain it, not necessarily grow it at a crazy clip.

[bctt tweet=”In mobile home parks, you actually aren’t eating into your principal. In fact, your equity is likely to grow over time. ” via=”no”]

Anytime you sell something, there’s going to be a tax consequence. As you do that, you’re dipping into that principle. On the private side of things, there are so many ways to access capital. You can borrow against it. You can refinance it. All of that is debt. You’re not paying taxes on that. You’ve got the cashflow to cover it. You have access to capital if you need that capital via refinance or lateralized loan. At a certain point, you can get an unsecured loan. You can get balance sheet lending.

There are so many ways that you can do it down the road, but it’s a great place to start. The cashflow that it kicks off is nice. As you keep acquiring, it gets to a point where you have to repurpose that money. In my journey of mobile home parks, I remember this realization of, “I’ve got a new problem.” Some people are going to probably scoff at this, but it’s that I had to repurpose some funds. I had enough coming in every month that there’s surplus and I don’t want to just sit on it.

That’s what got me to the point that I started opening up my view and my analysis of anything and everything alternative. I had capital. I had the place. I had it every month. I needed to figure out the best way if I wasn’t going to continue to scale the mobile home parks. I didn’t want to do that. I enjoy learning new things and creating better hedges with my portfolio. My goal is to be in everything. I want a little slice of everything. No matter what happens in the economy, I can still do well.

How did it take you to make this transition to being a lifestyle investor?

I went to this bootcamp and learned how to do it. It was a great session. I found a park within months of graduating from that bootcamp. In one failed swoop, my wife was able to retire from teaching less than six months later. We had our basic bare minimum survival income inside of those 6 months as well, then probably another 6 months later after that. A year total, I had covered what it cost us to live. It’s not necessarily my lifestyle income, but at least what it cost us to live. That was about $10,000 a month.

It might be a little bit harder because valuations are so high and cashflows are so low, but the principle remains. There are always good deals out there. We were looking at cashflowing real estate investments with a great upside potential that is cashflowing at 10% unlevered and nuts. It’s a good deal. No matter what, there Is always something that’s working. You got to have enough view to see where it is working. You start the mobile home parks and got a couple of those. Where did you go from there? You’ve done a lot of investing since then. What year was that when you bought your first mobile home park?

I did some lending in the beginning, but my first park was in 2009 or in 2010, that I owned the property myself.

 
There’s nothing good timing as an investment strategy. Luck is the best investment strategy possible.

During the time, prices were a lot higher. I was more of the debt, so it was a good situation. When I was on my own, the timing worked out. This is one where if you’re going to dollar cost average over peak and bus type of markets. You’re going to be fine. Mobile home parks don’t decrease in value. It’s not like a single-family home that is based on the neighboring homes’ comp. This is based on net operating income. You’re making an offer based on a multiple of the profit or the operating income that is already coming in. I like that.

One of the other things I like is to find businesses that I can buy from Baby Boomers that are starting to retire. You can find some great prices and great opportunities. In some of these cases, these people maybe weren’t even going to sell their business. They were going to close up shop and retire. It’s neat to be able to buy a business. The way inflation is and monetary supply is expanding, you want to be in assets. An asset’s going to appreciate at the same level as the monetary supply. Over the last few years, we’ve pumped in about 40% of the money and circulation through stimulus-quantitative easing practices.

You’ve got all this money. The dollar is being devalued. You want to be in some asset that can hold its value. I love real estate. Real estate’s great. It’s a great starting point, but my goal is to be on the cutting edge of whatever trend is in the future. I was much earlier on mobile home parks. It took a lot longer for Wall Street to pick up on this. I had done single-family homes a little bit as well in there. Those picked up steam. I was early on the curve, the other areas would be eCommerce and even cannabis. We’re seeing a lot of positivity in each of those industries.

One of the things I write and talk about in my book is this whole idea of invisible deals. You can do that in real estate, where you find deals that are off-market. You try to buy something without all the competition. That same thing exists outside of real estate. You can find a company that maybe isn’t looking for money or doesn’t need money. Maybe you make a case that you’re a strategic investor. You’ve got a good network.

You have the opportunity to give them a war chest that they’re going to be able to use later if and when they need it. If not, it’s a good protection. You can help them grow their business. It’s endless. If you study where millennials, for example, are spending money, then you’ll see a lot of trends of likely opportunities and businesses for the future. That type of spending is going to continue on for a period of time. I’ve been able to make some pretty good investments around that.

That’s something we’ve talked a little bit about on the show before. I used to be a commercial lender and did a lot of SBA loans and acquisition loans where you can go and buy these businesses. You can lever them up with the SBA program as extremely generous terms.

[bctt tweet=”If you want to be a good investor, you have to be willing to educate yourself and spend time with people who are good at it.” via=”no”]

You can buy and go build a franchise or name it using SBA funding.

A lot of times, depending on how you structure the equity contribution, you can put in as little as 10% down, which you can’t even do in real estate. You’re getting unlevered cashflows in the double digits a lot of times. You add a little bit of debt on there. You’re taking on more risk because this is an active business you have to run.

It is a job. You’re sinning against his ten commandments to do that. Talk about what are some of the businesses that you’ve purchased. You’ve had this framework. Even as you’re buying these businesses, you still don’t want to create a job. You want to create more time-purchasing power. What are the businesses that you start to see some opportunities early on? These were Baby Boomer businesses, but what types of verticals?

By the way, I love franchises as well. Those can be incredible. You got to be careful because, in most, you’re buying a job. There are few where it’s truly a passive endeavor. You can create a system where you plug people in. I own an Orangetheory Fitness franchise where one of my partners operates and runs that business. My big sticking point is, “I’m going to be the capital partner. I don’t want any operations. I’m happy to help periodically, but that’s it.” We did that.

I bought a dog training studio during COVID. By the way, I don’t own a dog. I’ve never owned a dog. I know nothing about dogs. During COVID, I noticed everyone was buying a dog. Everyone who told me they would never buy a dog bought one. I saw what these dogs were doing and the frantic nature of people going crazy with these new puppies destroying their homes. Anyway, I bought a dog training company, which, coincidentally, Patrick Mahomes trained his dog in Kansas City.

That business was one that we were able to get a loan. It didn’t cost much to put down. There was a salary that the previous owner was paying himself $75,000 a year. I worked in Cutco. That’s how I funded my college and early career. That’s how I learned how to work with people. I brought one of my managers from there to run the dog train company. He was making $65,000 a year. He got a $10,000 pay raise, plus I gave him a ton of equity.

I said, “You run it. I’ll take care of the money. I’ll help periodically on strategy stuff, but I want you to own it. You’ve got a lot of upsides.” We ended up scaling this company and doing a great job. At one point, we had a profit between $10,000 and $12,000 a day for a stretch of a couple of months until we fully booked all the meeting appointment space that we could for the year. We decided, “Let’s flip this thing. Let’s ramp it up. We’ll sell it.” We did at a year and a day. We made 11X our investment. We’re able to repurpose that into another business.

 
What business did you repurpose it into?

This is an interesting transition into another way of investing. My partners who have run some of these different businesses or franchises have cash. We’ve done well. They don’t need my money anymore. They can go out and do their own business. The banks still think they’re too young or don’t have enough experience. They want a personal guarantee or some credit line that they know is there.

I’ve been able to negotiate equity in many different new products. The newest one is KidStrong. We’ve got several KidStrong franchises that we own. I didn’t have to put any cash into this. I’m leveraging my balance sheet for an opportunity to have equity where it’s going to be no money out of pocket. It’s a unique way of structuring a deal to create a win-win where all parties can feel great.

For someone that’s reading this and says, “How do I do this as a passive investor?” You have some ideas there where maybe you find an operating partner or you leverage your balance sheet. Maybe for someone that is thinking, “This could be something I can go actively do,” what are some of the pitfalls that you find? For investors who may be ready to take the leap out of the public markets and get started, what are some of the scars you carry from early experiences that you advise people to look out for?

My goal is for people to learn from my mistakes. I made plenty of them. Luckily, not all of them have cost me money, but certainly, some have. Early on, I’ve got a funny chapter in my book where I talk about what not to do when you invest. Here are all the poor decisions that I made. Avoid all these decisions. This one cost me a lot of money. One of them is thinking that a deal’s a good deal because a buddy did it or thinking that because you are a successful entrepreneur, you can be a successful investor without putting in the time.

It’s amazing to me, this utter ignorant confidence that some people have where they invest maybe a whole bunch of money, not in a well thought out plan, not in a bunch of different industries on the same spot, one deal, horrible terms, industry that maybe not growing. There’s a lot to learn. If you want to become a good investor, you’ve got to be willing to educate yourself. Number two, you’ve got to be willing to spend time with people that are good at it, that can teach you. Your peer group matters. Your mentorship matters. That’s what I encourage people to do. Learn from everyone else’s mistakes so that you don’t have to lose as much money.

People invest. They go to school. They go to college and maybe get a Master’s degree. You go build and develop your career. People spend enormous amounts of time and energy to develop a career. The same person would spend 0% of their time, not even an hour a week, thinking about my investments, how do I maximize more investments, or how do I invest. They’re not educating themselves to make their money or time work for them.

[bctt tweet=”If you lose money, you have to work twice as hard to get it back.” via=”no”]

People maximize that, but they’re not maximizing their balance sheet. It’s not that hard to do. This is not rocket science compared to the stuff that a banker or a retailer has to know. It’s nothing compared to that if you got to go do the research and take the time to make your balance sheet work for you. People don’t spend the effort. That’s one of our missions in this show. It sounds like yours as well, which is great.

I remember there was a deal when I was a banker. This was illuminating. A lot of skills that maybe you learned in Corporate America don’t always translate to business ownership. There was an individual that took out a massive loan. They maxed out the SBA program at $5 million. He put all of his cash for his equity contribution and all of his life savings to purchase his business. It was a rock quarry. He was a C-Suite executive of a large company. “How hard is it to run a small rock quarry?”

Fast forward a few years later, it’s a sad story because he lost everything. He walked into the bank, handed the keys back, and said, “I can’t do it anymore. I lost everything.” That’s the worst horror story but it is true. You have to know what you’re good at and what your skillsets are. Can they translate to this endeavor? Surround yourself with the right people who have done it before with mentorship, with people you can learn from and not make the same mistakes.

Diversification is important. You hear about this a lot in the public. Equities have stocks, bonds and fixed income. You have to have a good portfolio allocation, but you want to do that same thing on the private side.

That’s a little bit of a crack, too. In the great financial crisis, we saw the correlations of everything went to one. It didn’t matter how diversified you were in the public markets. It all went to crap at the same time.

All are going down and locks up. It’s the same thing. True diversification is getting into alternatives. It’s not just real estate alternative. Everybody loves real estate. Real estate’s a great play, but there are a lot of other ways to play businesses like ATMs. We’re looking at lots of different deals like venture debt deal that we’re putting together. There are so many other ways that are completely different from everything else. That’s true diversification.

When I say diversification as well, I even mean diversification of income streams. Are you dependent on all of your money from 1 business, 1 opportunity, 1 real estate play? I want as many as I can get and not swing for the fences. I want to hit singles and doubles. I don’t need any home runs. Home runs create bad due diligence. There’s this emotional component of cashing the check before it arrives. I don’t need that. My mission is don’t lose money. Can I get a good return and not lose money and protect against losing? I don’t need a 20%, 30%, 40% IRR. If I get it, great. I want to make sure if things go wrong, I at least get my money back. That right there is where you lose the most.

 
If you lose money, you got to work twice as hard to get it back. You have forever lost that opportunity cost of what it could have produced. Sometimes you still need to learn that lesson as well. Some people don’t learn the lesson until they’ve lost money. It was valuable for me. It was hard at the moment, but losing money has made me such a better investor. Some people are afraid to do it because maybe they’ll lose money. You might lose money on the public side or in whatever else you might be doing. If you do, you should learn lessons that are going to equip you not to make that same mistake again. Those lessons will make you smarter, better and willing to hang out with others that are smarter and better at whatever the thing is that you’re doing.

You’re a member of TIGER 21. That was one of the key data sources we used in researching invest like a billionaire. How are the ultra-wealthy investing in TIGER 21? You can talk more about it, but it’s an organization that has this high net worth.

They’re focused on alternatives.

One of the cool data pieces there that we’ve pointed to a lot is that 50% or more on average of all their investors are invested in private alternative deals. That’s either real estate, private equity, or venture capital. The average retail investor is between 0% and 5% may be in a true private alternative. It’s this big discrepancy. We’re doing this whole show to educate that. Talk about your experience being TIGER 21, rubbing your shoulders with a lot of these successful investors, and maybe the different mindset that they have in approaching deals. They just don’t throw it into 80/20 portfolio and forget about it for many years.

It’s an interesting group. I’ve tracked these stats for a long time. I share these all the time on my podcast. Where do the wealthiest people have their money invested? There has been a long run of studies, data points, a lot of different groups publishing this data, but your wealthiest people most certainly have over half of their net worth in real estate and private equity. That’s a slam dunk. In many cases, it’s high into it. Overall, as a group, it’s broken out into about 25% in public equities, 25% in real estate, 25% in private equity, and then 25% all over in a bunch of different things.

TIGER 21 was founded on the basis of this whole real estate place. You’ve got a lot of people that are in real estate, but you also have a lot of business owners. If someone exits a business, a lot of people look at this as the place to maybe move on to once maybe you’re done with an EO or a YPO. You also have a lot of other people that are there with investments. They’re looking to raise capital. They have unique deals. You’re going to see a lot of interesting investments. That doesn’t mean they’re all good deals. There’s a lot of opportunities to dig in and learn. It’s chapter-specific as well. There are over 1,100 members. Each chapter is its own animal. I’m here in Austin and I love my chapter. Some of my closest friends are in this group. It’s been a lot of fun.

What about the mindset is different from the TIGER 21 crowd from the non-TIGER 21 crowd?

[bctt tweet=”Your wealthiest people most certainly have over half of their net worth in real estate and private equity. ” via=”no”]

In TIGER 21, it’s not weird to be on alternative investments. Even if someone is not heavily in it, it’s normal. It’s the way that it is. You certainly have some people that what they do is heavy in the public equities, but it’s a small percentage. If you look at the breakdown overall, one of the biggest things you’ll see is that a lot of people built their wealth in private equity in real estate. They’ve often transitioned a lot of that wealth into the stock market. A lot of people think, “Wealthy people have a lot of money in the stock market.” They didn’t typically make their money there.

That’s where they’re going to maintain maybe a portion of their wealth. In the long-term, there’s probably some truth to that if you can find a smart way to do it. You’re distributing it out over ten different hedge funds to get a nice allocation or you’re doing low fee index fund. This is a long-term play. To have some exposure is good. Overall, the mindset is, number one, you want to be around other people that are smarter than you and me. Two, you want to get as much opportunity to learn and get involved in extra deals or education. It’s a fun group of people.

There are probably a lot of lifestyle investors there.

We’ve got a good number of lifestyle investors, even from my organization, that are part of that group. A lot from TIGER 21 is part of The Lifestyle Investor Mastermind. It’s a nice group each way and transfer of people. There are a lot of people still building their business in. The majority of people are people that have a substantial net worth and are looking for what they can do with it.

Markets are melting down. Multifamily is at an all-time high, low cap rates, difficult to find a deal in certain categories of real estate. Inflation is ripping higher. Where are you sticking your new money? There’s always something good. What’s good now?

You can still find some deals in real estate that are good. There’s a lot that’s overpriced. I’m still able to find some good industrial warehouse distribution center assets, some hot and I like that. I’ve done some self-storage conversion. If you buy a self-storage straight up, that’s going to be pretty expensive, low cap rate. If you do a conversion, there are some opportunities there. In the world of multifamily, I still like mobile home parks a lot.

Cannabis has been a huge winner for me, especially structuring the deals the right way with highly profitable companies. There are about 600 regional banks that will work with cannabis companies. You can get access to financial seed bank statements and know if a company’s a good company to invest in. We’re still the Wild West here. If you think about the money that people made during prohibition, there’s going to be ample opportunity for something similar like that as cannabis becomes more and more legalized and at some point, federally legalized.

 
eCommerce is going to continue to boom. There are some technology plays that are exciting. There are also ways that you can de-risk the tech play. Most of these VC funds are 10-year funds where sometimes they’ll exp extend it 1 or 2 years. There are unique ways to get in and out in a shorter period of time between a Series A and a Series B and maybe get in on a Series A extension or get out on a Series B secondary. You get the majority of the growth. That’s the largest growth jump from Series A to Series B. It’s only a 2 or 3-year wait as opposed to 10 plus. That’s a unique strategy.

I’ve got into a lot of other secondaries where these companies have exited. In 2021, 3 of the deals that we did in my mastermind went public. There was some good opportunity there. Finding the right deals for me, I want to get the money back quickly. I’m not trying to sit in an investment for ten years. I would like to know shorter than that if it did well or didn’t do well. I’d like to get some cashflow on it. Ideally, I’d like to get that principal back so I can reinvest it quickly into something else.

The thing that I love is taking the same dollars, getting them back, and putting them to work somewhere else. In the example, one of the things I write about is the whole velocity of money. If I take $100,000 and invest in a multifamily deal, which is 1 example of many where I got that back in 1 year, 1 year and 1/2, took that, put it into maybe a senior secured debt vehicle with warrants or equity kickers. I get that back in a year. Maybe it’s a one-year note. I put it to work over in the dog training company.

Meanwhile, you’re keeping your equity quick kickers and letting it ride.

It’s house money. I’ve got no risk in the deal. The same dollars are creating equity across the board in 3, 4, 5 different deals over the course of 5 years.

Justin, you sound like you’re having fun.

It’s a blast. It was interesting. In 2018, I took the year off and my family traveled. We went all across the globe. We hit up 13 different countries and had so much fun. What I did during that time when I didn’t have to do anything was I figured out how I spent my time. I did a lot of journaling. I recognized that I did the most was reading, learning and educating myself, teaching my friends how to have financial freedom, and doing investment deals. Those are the four things that I did outside of hanging with my family. I decided, “It would be fun to take my hobby and make it into a passion project.” That’s where Lifestyle Investor came from.

Our readers are about to have some fun, too, because Justin said that he is going to give our readers a special link. Check those out. Justin, what are you going to do for our readers here?

I’m so excited to spend time with both of you, guys. You guys are a blast. I love your thesis, strategy, energy, and desire to educate. I am excited to be on this journey with you. For any of your audience that wants a free copy of the book, just pay for shipping. You can go to LifestyleInvestorBook.com and can get yourself a copy there. You can get it on Amazon if you want to pay for it.

One of the cool things that I’m excited about and inspired to do is partner with a company called Love Justice International. They stop human trafficking in 24 countries around the world. All the proceeds of Lifestyle Investor go to that organization and help what it is typically predominantly children and women that are being enslaved in some way, shape, or form. However you do it, if you get it on Amazon, if you get a free copy and do the shipping, any of the proceeds that we have in any of our products, 100% of the book goes to Love Justice, and then a portion of all the other sales for everything else we do goes there.

Readers, get the free book. It’s going to give you some great nuggets. Justin, thank you so much for joining us on the show. I’d love to bring you back on down the road and hear what other deals you’re doing.

Important Links

• Justin Donald
• The Lifestyle Investor
• The Lifestyle Investor Podcast
• Orangetheory Fitness
• Love Justice International

About Justin Donald

“Entrepreneur Magazine calls Justin Donald the “Warren Buffett of Lifestyle Investing.” He’s a master of low-risk cash flow investing, specializing in simplifying complex financial strategies, structuring deals, and disciplined investment systems that consistently produce profitable results. His ethos is to “create wealth without creating a job.”

In the span of 21 months, and before his 37th birthday, Justin’s investments drove enough passive income for both he and his wife Jennifer to leave their jobs. Following his simple investment system and 10 Commandments of Lifestyle Investing, Justin negotiated deals with over 100 companies, multiplied his net worth to over eight figures, and maintained a family-centric lifestyle in less than 2 years. Just 2 years later, he doubled his net worth again.

He now consults and advises entrepreneurs, executives, and successful media personalities on lifestyle investing. Justin has also appeared on nearly 100 podcasts, including Entrepreneurs on Fire, The Mike Dillard Show, Making Bank, Achieve Your Goals, Capability Amplifier, Tractionville, Inside Personal Growth, Conscious Millionaire, Franchise Secrets, the Accelerated Investor, and Unbecoming.

Justin distilled his lessons and proven investment system that reliably generates repeatable returns into The Lifestyle Investor podcast and the best-selling book The Lifestyle Investor: The 10 Commandments of Cash Flow Investing for Passive Income and Financial Freedom, released in January 2021. The Lifestyle Investor was an instant hit, making the USA Today best seller list, breaking #8 on all of Amazon.com, and #1 on the Wall Street Journal’s best seller list. All proceeds from copies of The Lifestyle Investor go to Love Justice International, a nonprofit fighting human trafficking in 17 countries.

Justin is a lifelong leader and trainer with a track record of achievement. In his 20s, he worked with Cutco/Vector and quickly became one of the top managers in the company, and one of the youngest to achieve Hall of Fame status. His personal playbook of best practices was deployed nationwide as a training program to onboard sales representatives.

While in this role, Justin began investing heavily in real estate and owns several profitable real estate related businesses, a large portfolio of multifamily rentals, OrangeTheory Fitness franchises, and several other successful operating companies. His entrepreneurial ventures include IFM Restoration, a residential maintenance and rehab company founded in 2016. IFM recently funded its Series A with S3 Ventures, the largest venture capital firm in Texas, leading the round.

Justin is a member of Tiger 21 and a board member of Front Row Foundation International. He and Jennifer contribute to various causes privately and through their church, fighting cancer, building clean water wells in third-world countries and other humanitarian efforts. Additionally, they sponsor multiple children through Compassion International. The Donalds are based in Austin, Texas, and love adventure-based international travel with their beloved daughter.”