Join host Steven Pesavento and guest Bronson Hill in an enlightening conversation on the Investor Mindset Podcast. Bronson shares his journey from a W-2 job to achieving time freedom through multifamily investing and syndication. Explore the key principles of making work optional and generating passive income. Gain insights into Bronson's personal experiences, childhood influences, and the power of cash flow over appreciation. Discover actionable strategies for transitioning from single-family to scalable multifamily investments.
Key Takeaways
Resources Mentioned
Interested in connecting with other like-minded individuals? Then join our VonFinch Private Capital Network. Learn more at http://www.vonfinch.com/invest.
About our Guest:
Bronson Hill, a seasoned investor and author of "Fire Yourself," brings a wealth of experience in multifamily investing and syndication. With a background in medical device sales, Bronson successfully transitioned from a W-2 job to achieving time freedom through strategic real estate investments. Having raised over $40 million and worked with 1500 investors, he is passionate about helping others understand the power of passive income and making work optional. Join Bronson as he shares valuable insights and actionable strategies on the path to financial and time freedom.
Download your free strategy guide, The Passive Investor Playbook at http://www.vonfinch.com/playbook
00;00;00;04 - 00;00;08;09
Steven Pesavento
Welcome back to the Investor Mindset Podcast. I'm your host, Stephen Pasavento And today I had Brad sit in on the studio today. How you doing today, Bronson?
00;00;08;11 - 00;00;19;12
Bronson Hill
I'm good, Stephen. It's good to see you, man. It's always good to see you. And I love talking about mindset and we've been friends for a while and just love what you're creating here, man. So excited to add in any way I can. That's a value to your listeners.
00;00;19;15 - 00;00;56;17
Steven Pesavento
Yeah, it's really been cool to see your path and your journey grow, because for the listeners who aren't familiar with you, you were working in a W-2 job, you're working with another operator, putting together investors and bringing in cash and helping them grow and scale their business and then you went out and did that same thing yourself. So in today's episode, I want to talk a lot about kind of your experience and path towards getting to that time of freedom type place where you could truly fire yourself from your job and have the optionality to go and do what you're now doing.
00;00;56;20 - 00;01;10;04
Bronson Hill
Yeah, absolutely. I think a lot of people that I worked with in the medical field, I had, you know, ten years I worked in the medical field and medical device sales. I was making good money over 200 a year. But the thing I didn't have, which was what a lot of people don't have, is that freedom of time.
00;01;10;04 - 00;01;26;06
Bronson Hill
And so let people talk about having financial freedom, but really we want freedom of time. And so I just tried to learn everything I could, and it literally led me on a path to learn about multifamily investing and syndication. And now we're doing all kinds of alternatives outside of real estate, even ATMs and car washes and oil and gas and other things.
00;01;26;06 - 00;01;43;21
Bronson Hill
But really the goal, you know, Warren Buffett says, is to learn how to make money while you sleep, because if you don't, you're going to work until you die. Ironically, Warren still working. But you know, the principles there to make work optional so you can do what you love to do. Now, what you have to do just to make ends meet.
00;01;43;23 - 00;02;02;17
Steven Pesavento
Yeah. I mean, so to be able to put your time and effort into work that you love and having the option to not have or have to do it if you don't want to. Before we get into all of that, let's start out on a more personal note. If we're looking back at your life, what events or influences from your childhood shaped who you are today?
00;02;02;19 - 00;02;18;18
Bronson Hill
Yeah, so yeah, quite a bit. I had when I was growing up, we were pretty middle class. I would say we were kind of lower, maybe middle middle class. My dad was a college professor at a small school, but as a single dad, I mean, he had four kids and so it's kind of unusual. Usually grow with my dad.
00;02;18;18 - 00;02;33;24
Bronson Hill
But the thing that was really interesting is that we grew up and we were go to garage sales, we go thrift store shopping, and I kind of learned this idea of like, Oh, you could buy a brand new watch for 40 bucks, but you could find one of the great stuff like a dollar. And sometimes they were the same.
00;02;33;27 - 00;02;50;03
Bronson Hill
And so that idea of price is what you pay in values where you get it. And then also fast forward a little bit to when I was a teenager, my brother had raised he had basically worked at doing paper routes when he was, you know, 14, 15 and 16. And then when he was 16, he was able to buy his own car.
00;02;50;10 - 00;03;06;20
Bronson Hill
He'd saved $8,000 to be able to buy a $4,000 car. I saw that. I was like, wow, Like, I really want to be someone who can actually make money and what that looks like. And so I got a paper out and what it did, it taught me every single day, no matter what happened, you know, it was in the afternoons or in the week, come rain, shine, snow, whatever.
00;03;06;20 - 00;03;32;27
Bronson Hill
I was out there sometimes on a sled. If it snowed in Seattle and I would be pulling this sled, driving the bike, whatever I'd be doing to go get those newspapers to those people. And it taught me a lot of responsibility. It also gave me some ability to see a cause and effect relationship with money. So those two things are really, you know, understanding what value really is, how, you know, it's price is what you pay, values what you get, as well as just learning a work ethic of, hey, if you go out and you make it happen, you can create anything you want.
00;03;32;27 - 00;03;36;14
Bronson Hill
And so that was kind of some early experiences that really help me with that.
00;03;36;16 - 00;04;05;13
Steven Pesavento
I think it's such a valuable experience. You know, I grew up broke and the idea of getting a deal was always like the core value in our family. If you could get a deal on something, if you can negotiate something like it feels so good and it really plays well into investing because the same kind of principles can be true there and it ends up leading to a much better result, much better types of returns that get you exactly where you want to go.
00;04;05;16 - 00;04;25;04
Bronson Hill
Yeah, exactly. I mean, deals. I mean, I think a lot of us are deal junkies now, especially in the in the industry. But it's it's it's just an amazing thing that you and I quote buffet a lot but there's a great even as a teenager I found some a buffet stuff and it's really spoke to me over the years but he said you know a lot of investing is like you know, buying dollar bills for $0.40.
00;04;25;04 - 00;04;39;14
Bronson Hill
Right. And a lot of people think, well, if it's really a dollar bill, it wouldn't be there. Right. But there are deals that are out there. And I know you guys are doing great deals as well in your business. And so we're all we were looking for that We look for those inefficient markets where, you know, you can get a dollar for $0.40 and it does exist.
00;04;39;15 - 00;04;43;13
Bronson Hill
And that's that's what we love. Right. And I think that's really amazing.
00;04;43;15 - 00;05;07;04
Steven Pesavento
So tell me, you went down the path of becoming an author. You wrote a book called Fear Yourself. Such a simple concept, yet I know towards most of the people that I know who work in kind of a traditional job, they think, well, that's not really possible. I see other people doing it, but they must be making money off of selling me The idea of it, even though I personally know that's not true.
00;05;07;04 - 00;05;11;06
Steven Pesavento
There's definitely those people out there. Tell me what this book's all about.
00;05;11;09 - 00;05;29;04
Bronson Hill
Yeah. So the book is, you know, it's a compelling title, but just the idea of how do you make work optional? How do you allow yourself not to, you know, have to go to work, but that you can find yourself? Meaning a lot of people we work with our business owners. They know, you know, they've got kids going to college.
00;05;29;04 - 00;05;46;10
Bronson Hill
If I if I sell this business, how do I make money? Like, what's the way? Because a lot of Wall Street doesn't offer income or if it does, it's very low income and there's a lot of volatility there. And so through Main Street type of investments that you do that I do. And businesses as well, there's all kinds of ways to generate cash flow.
00;05;46;15 - 00;06;02;10
Bronson Hill
So as an investor, I used to fire this question. I've talked with over 1500 investors one on one. We've raised over $40 million. And I always ask this question, Steve, and I say, you know, what's more important to you? Is it cash flow or is it appreciation? Now, a lot of people are like, well, I don't know. I do a little bit of both or, you know, appreciation, whatever.
00;06;02;15 - 00;06;21;01
Bronson Hill
But I have come to believe, like with almost a like a passion that like I get offended when somebody says something different, that cash flow is just way, way superior is far superior to appreciation. Because if you're going to make a lot of money someday, that's great. You can't leave your job today. You can't pay for expenses if you have cash flow in your business.
00;06;21;04 - 00;06;39;00
Bronson Hill
When I was able to replace, you know, my rat race number, which was not super, I was 60, 70,000 a year through investment income. I was free. I didn't have to go to work anymore. Right. And so that's that's the idea of firing yourself is developing enough passive income in your investments where you actually have you make job, you know, work.
00;06;39;00 - 00;06;50;09
Bronson Hill
Work is optional. And if you do work, you're working the way you want to work and how you want to work. So I do think work is great. It's important. But to have to go to work, I mean, something like 70% of people are not engaged or they don't like their jobs. I mean, to me that's a tragedy.
00;06;50;09 - 00;06;57;21
Bronson Hill
Like life is too short, not to do what we're here to do. And so I think those are a couple of things about fire yourself that I, I really like those concepts.
00;06;57;23 - 00;07;28;15
Steven Pesavento
I think it's once you have an experience like this personally, when you hear Bronson or AI or all these other people talk about their experience, that's just knowledge. But once you go and do it, you actually get to feel what that feels like. Can you believe that it's true in your bones? For me, that was Airbnb. I was 23 years old and I was renting an apartment for a thousand bucks a month and I started renting it full time on Airbnb and I was making three grand a month profit every single month.
00;07;28;18 - 00;07;51;13
Steven Pesavento
And so although three grand a month isn't going to retire you if you've got a family and things like this. But what it did was it gave me that experience to see, well, hey, it's possible for me to take an asset. This happened to be a rental, but that contract and the set up and the business behind it as an asset and turned that into an income stream that I could then multiply and be able to start on that path.
00;07;51;16 - 00;08;00;26
Steven Pesavento
What was it for you, Bronson? What was that investment or strategy that kind of opened up that door to realizing that it's possible to step out of that W-2 life?
00;08;00;28 - 00;08;15;23
Bronson Hill
Yeah, So it actually started for me, I think similar to a lot of people where I had a single family house that I had bought as my first house I bought in my twenties and I had in it moving to another area. And so it was like, well, do I sell the house or I keep it, decided to keep the house and it became an investment.
00;08;15;23 - 00;08;28;21
Bronson Hill
The cash for it initially was kind of a break even, but I didn't want to work in the house, so it started cash more over time. Then I realized, Man, I'm generating like four or 500 bucks a month on this house I think was kind of nice. So I thought, like a lot of people, Hey, maybe I'll get more of these houses.
00;08;28;21 - 00;08;54;10
Bronson Hill
So I started buying single family houses in the Cleveland area, which anybody who's bought in Cleveland knows that there are some rough parts of Cleveland. And I you know, I had a one time, four or five houses. And I just realized, you know, in that experience, it was a lot of work. It wasn't penciling like I wanted, but the first experience was buying, you know, that first house and then over time, I had a you know, there's a saying when the student is ready, the teacher appears.
00;08;54;12 - 00;09;18;17
Bronson Hill
And for me, I have a cousin who had been doing multifamily for years and said, Hey, this seems like a lot of work. Why don't you do multifamily? And I said, Well, I'd love to, but I don't have the money. And that's where I learned about syndication. I learned about the ability to be passive in investing. A lot of people think that owning houses is passive, but I tell people and in the book I use this example, if you can't go from two houses or three houses to 230 houses, you need to get ten x the size of that.
00;09;18;17 - 00;09;34;21
Bronson Hill
What you're doing, it's not passive, you're basically just creating yourself another job. And so there's a huge advantage to be able to do a little bit of work on the front end to vet a team and vet a deal. But then once you invest, you literally receive that mailbox money, right? You're just getting that cash flow and you're not having to do the work for it.
00;09;34;21 - 00;09;55;19
Bronson Hill
So I went from, you know, having an investment that was, you know, somewhat passive with a single family, though I had a manager was another estate to try to do more of it and realizing how much just this really is not scalable. And that's what a lot of people don't realize is that, you know, I want to do, you know, we want to do real estate to become financially free, but it's not through single family typically, unless you've got something set up that will allow you to do that.
00;09;55;19 - 00;10;02;18
Bronson Hill
So I just think, you know, the bigger deal sometimes they allow for people to be more passive in general.
00;10;02;20 - 00;10;23;06
Steven Pesavento
While because they're so much more scalable. All that effort and energy is focused on one building, one asset versus spread out across all these individual buildings. And I mean, I know, you know, my background about 200 single family houses in two and a half years, and I'll tell you, it was not scalable. And that was the direct reason I went into multifamily.
00;10;23;06 - 00;10;47;24
Steven Pesavento
It was because I realized it was dispersing focus over all these different individuals, rural properties, that all had a very different repair requirements, layouts, designs, all these things. And so when you go bigger, it requires a bigger team, but it allows you to be able to bring other people in to the table. So you started out doing Single Family.
00;10;47;24 - 00;11;05;26
Steven Pesavento
That was where you got a little taste of it today. You you were working with a bunch of peers. We have a similar experience where you're talking to folks, you're helping them be able to understand what this investment opportunity looks like and how it can actually set them up in the long term to be able to create the life they want to live.
00;11;05;26 - 00;11;21;16
Steven Pesavento
And what are some of the biggest challenges that you see people who are looking to make this transition or who already have started making these investments? What are some of the biggest challenges that those people see when they get involved? Investing passively?
00;11;21;19 - 00;11;49;06
Bronson Hill
Yeah. So, you know, as a passive investor, a lot of people, they are unfamiliar with investing, you know, like something this is a stock or a lot of people that are wealthy have a money person. And Tony Robbins wrote this book called Money Mass of the Game, which is a really good book. But he basically pulls the curtain back on some of this and says, you know, the average fee for a fund, like a mutual fund or having an investment manager is typically they'll say it's 1.2%, but it's actually around 3.2%.
00;11;49;06 - 00;12;05;01
Bronson Hill
So there's all these hidden fees that they don't actually have to legally disclose, things like administrative free fee, cash, drag fee, whatever. And so that brings you 3.2%. And then if you if you have a a morgan Stanley or a big, you know, fund manager or, you know, like an investment advisor, they're typically taking another one and a half to 2% on top of that.
00;12;05;01 - 00;12;20;13
Bronson Hill
So it's typically around five, five and a half percent, which is most of your returns. So this investment becomes like a savings account. So for a lot of people when they get started, it's just getting comfortable that it's not this is not like brain surgery, right? Where you have to have like, you know, years and years of education.
00;12;20;13 - 00;12;35;19
Bronson Hill
It's just you know, getting into things that actually make sense for you. And a lot of people and I can relate to this as well as they don't want to make a mistake. So analysis paralysis is huge. And you talk about it on the show as well. People will just look at deals and there are people going to meet ups five years ago that I've seen that still haven't bought something yet.
00;12;35;25 - 00;12;49;03
Bronson Hill
And I'm like, Man, why are you even going to meet ups? But I was that guy for six years. I would just show up and I didn't really do anything. I had my one rental and I didn't really scale. I didn't really grow. And then something clicked and I was like, I actually have to do this. Like if I do it, it will actually it will actually change.
00;12;49;03 - 00;13;04;12
Bronson Hill
So my belief is that life has this action bias, right? If you have two people, one person has incredible ideas on how they're going to a wealthy and the other person or some goal. The second one just starts taking action every day, every week. It just reflects and just kind of keeps doing it. The person taking action will always win.
00;13;04;14 - 00;13;28;02
Bronson Hill
And so I think the biggest obstacle a lot of people have is just inaction because everything feels weird until you've done it or you've known somebody that's done it. And a lot of people with the word syndication or Main Street investments or things that are outside of Wall Street, they just feel very different. So I think that's kind of the the first thing you just get people comfortable with, Oh, I'm going to do this and I'm going to get into these projects and I'm responsible, you know, in a way for, you know, my decisions of of choosing to an astronaut.
00;13;28;04 - 00;13;57;09
Steven Pesavento
Yeah, it's really comes down to that decision. And that decision has to be, hey, this is where I'm at right now. It's I'm fearful of what's outside of what I know. But I have to I have to make that decision and step out and have an experience. And if I can make multiple of those decisions and have multiple experiences, I'm going to increase the likelihood that one of those experiences is going to work out well, which is then going to give me the opportunity to build off of it.
00;13;57;15 - 00;14;14;18
Steven Pesavento
But even more importantly is deciding upfront that even when the experience doesn't go well, that it's the purpose isn't actually to make a profit initially. The purpose is to get into the game. The purpose is an experience where you can learn something so that you can then have the confidence to keep doing it.
00;14;14;20 - 00;14;31;18
Bronson Hill
Yeah, 100%. I mean, that's really well said and I think it's, you know, it's almost like when you have a workout that's like a way you've never worked out before, you're like, Man, I didn't even know I had a muscle there. And it's hurting. You know, It's like, I'm going to think investing is like that. Where it's like it's working a muscle that's underused or you didn't know you had.
00;14;31;21 - 00;14;45;06
Bronson Hill
And really, you know, it's typically going to go one of three ways. Either the investment is going to go great, is going to go okay or it's not going to go well regardless of how it goes. Most of the time it goes just fine and you will learn. And I think the biggest investment we make really is in our own education.
00;14;45;06 - 00;15;00;04
Bronson Hill
And so you can if somebody has, you know, $5 million, you know, put $5 million in one deal and, you know, you put a small amount, you put 50 K, 100 K put a small amount in which for somebody who has 5 million, for some people, that's all their net worth. But if you're putting a smaller percentage of your net worth, you'll learn.
00;15;00;04 - 00;15;13;21
Bronson Hill
And I think that's the thing that you'll, you know, you'll be able to gather from. Oh, okay. There were some signs here that this was going to go this way and I would not invest with these guys again or, yeah, this happened and I really like this. These are things and I'm a take and I really this was a great experience, right?
00;15;13;21 - 00;15;27;23
Bronson Hill
So you're going to learn on both sides. And I think it is. That's really how we learn. I mean, it's almost like I don't pay attention a lot of times unless I'm invested in something, right? If I have invested time or money and this is a way where you invest money, you're going to pay attention.
00;15;27;26 - 00;15;49;15
Steven Pesavento
Yeah. I think the other mistake people make I'm curious here what your thoughts are on this, is that they make that investment, they take that action, and then as a result happens because they don't have enough experience or they haven't made enough of those bets over a long enough period of time, they start connecting the outcome to the wrong thing, meaning if things really go well, they connect.
00;15;49;15 - 00;16;12;07
Steven Pesavento
Hey, I'm a genius. I pick the right person. They're a genius. They're doing the right thing or things don't go well. They blame others, which very may well be the people to blame. But once you have enough experience and you've done this for a long enough period of time and you've talked enough investors, you start recognizing there's a bunch of things that can lead to a great investment.
00;16;12;07 - 00;16;29;24
Steven Pesavento
Some of those can be the market, some of those can be the operators, some of those could be the economy. All of these different factors all play into a result. What have you seen yourself going and working with investors both during really good economic times and during challenging economic times?
00;16;29;26 - 00;16;52;22
Bronson Hill
Yeah, it's a really good point. A lot of times the things we learn are not helpful and you'll see it with, you know, investors or people that, you know, maybe have a business and they just think that they're the biggest geniuses in the world. But it's just really kind of luck and timing and being fortunate. And we've had things that we've done well, you know, in our business where we've been phenomenally successful, like phenomenally successful and other things, we have absolutely.
00;16;52;24 - 00;17;11;26
Bronson Hill
I would say we've absolutely gotten destroyed and it does happen personally. But in like it's all been learning. I mean, I share in my book a story of how I traded options. My net worth was about 200 K and I lost $70,000 in one day. Right? That is a very bad day. And what I learned is I'm not a great options trader, right?
00;17;11;26 - 00;17;25;11
Bronson Hill
I'm not the guy to be working that formula to be doing that. And that was incredibly valued. And I know people that have lost over $1,000,000 in the deal. And so somebody listening can be like, Oh my gosh, that sounds so I've never you know, but I mean, the amount is not as important as what are the lessons, What are the things that you learn.
00;17;25;18 - 00;17;42;06
Bronson Hill
And so when you talk to people who have been doing this for ten, 20, 30, 40 years or people like Buffett, it's all the lessons, It's all the things you learn. It sometimes you can learn the things you learn in times of successes that, oh, I'm, I'm pretty great at this. I'm pretty awesome. Whatever. Well, it could have been it was the right thing in the right place at the right time.
00;17;42;06 - 00;17;58;19
Bronson Hill
It could be that you simply got lucky. And, you know, a lot of us, we don't learn in those situations. And so I think it's so important to just continue to remain humble and just always be looking to learn and be looking at your strategy and say, well, you know, what happens if things don't go the way I want?
00;17;58;19 - 00;18;15;19
Bronson Hill
What if things shift? What if they change? Because they can shift? We watched it in multifamily, right? It happened very, very quickly. Where, you know, went from being this is a super I mean, if you've invested between between 2010 and 2020, it was like you're a genius. If you're just in there, maybe 2018, you're just a genius because you own it.
00;18;15;20 - 00;18;31;24
Bronson Hill
So every kind of got really cocky then, Oh, this thing can't go wrong. Well, we've watched rates rise. You watched a lot of operators struggle much a lot of bridge debt situations kind of get in trouble. And so, you know, it's just it's so important to just stay humble and continue to learn and just be open to feedback from the market, from others.
00;18;31;24 - 00;18;37;29
Bronson Hill
And just to keep learning and realize, you know, maybe I'm not as smart as I thought and I just need to learn.
00;18;38;01 - 00;19;05;22
Steven Pesavento
Well, I think that's that's a really, really valid point. And it's this idea that you have to take risk in order to create returns. But the more that you learn, the more that you can understand how to reduce the risk and increase the return. And somebody who's been operating for nearly the past decade in real estate since the first day that I got into the game of real estate, I was told that the market's going to crash the next year, the Fed is going to raise rates and the whole game is going to change.
00;19;05;24 - 00;19;31;02
Steven Pesavento
And for eight, almost nine years, nothing happened and then something happened. And so this is part of the game of investing in real estate or investing in general is that things happen that are outside of your control. But the more experience you have, the more knowledge that you have to react to those situations and to put guardrails in place to help prevent losses when those types of things do happen.
00;19;31;09 - 00;19;50;15
Steven Pesavento
So if you're an LP and you're out looking to make investments and you've got some money that you want to get placed, how would you recommend people think about reducing risk while increasing returns when they're going to go make an investment, whether it's in real estate, alternatives, business, anything in between?
00;19;50;17 - 00;20;06;16
Bronson Hill
So yeah, I think the question of reducing risk is really important. There's two things I want to say about this real quick is the first thing is your education, your your network will really help you a lot as a passive investor getting around in the right rooms. You can ask people, Hey, I think about investing with this. What do you think about this deal?
00;20;06;18 - 00;20;24;11
Bronson Hill
Finding people who've been doing it for five, ten years? I think for a lot of passive investors, they don't know any other passive investors, and that's the benefit of going to conferences. We have our event in Los Angeles each October, the Advanced Investing Summit, and, you know, things like that. Even local meet ups, depending where you're at, if you're in in a larger mid sized market.
00;20;24;13 - 00;20;52;24
Bronson Hill
So that's that's one thing. And I would say, you know, the education, the networking is really important. And then I think just continuing to look at a situation and say, what is the evaluated risk here? What is the one or two primary risks in a situation that in this project that could go wrong? And I think about I try I think, okay, this is what I think could not go well in this in this area and then ask an operator when you're having those questions, those calls with operated out of, Hey, what do you think is the biggest risk of this deal?
00;20;52;29 - 00;21;17;21
Bronson Hill
And then I thought of one more. The third thing really is going back to my point about cash flowing deals. If I have a deal that cash flows very quickly or it's it has a predictability in the cash flow, I start to reduce my risk basis. When I start getting paid. So if I have a deal that I know somewhat predictably or historically that, hey, I'm going to get half my money back in a couple of years, that's reducing my risk with every payment, right?
00;21;17;21 - 00;21;33;01
Bronson Hill
So I think that's something to think about and think about is and again, I'm not we do some that are speculative, some that are higher, you know, long term in their development type of things. I think that's great. But there's also just you know, you can reduce your risk as well by having cash flow in your deals because money is back in your pocket now.
00;21;33;01 - 00;21;35;01
Bronson Hill
You can put it into something else.
00;21;35;03 - 00;22;02;10
Steven Pesavento
Yeah, I think cash flow can solve a lot of issues. If there's a deal that has cash flow early and often, then obviously you can hedge against some of the challenges. But in order to get that cash flow, you're typically giving up greater back in total return. And from my perspective, I think different investors need different things. A lot of people are very attracted to high back end returns and I think it can be a great way to multiply money really quickly.
00;22;02;16 - 00;22;33;18
Steven Pesavento
What is your perspective on it? I hear from you cash flow is king focused on cash flow, but if somebody is starting out with a lower net worth and they've got bigger goals, the only real option in order to multiply that money is either make a lot more money on the active side doing your business, your job, whatever that is, or is to make strategic investments that can multiply greatly while allowing the portfolio to grow so that you can then turn that into cash flow at the right time.
00;22;33;21 - 00;22;34;18
Steven Pesavento
How do you think about it?
00;22;34;25 - 00;22;47;02
Bronson Hill
Yeah, there's actually two two points I like to think about with that is that, you know, when I heard all these calls, you know, with investors is either someone has time or they have money. And if you don't have money, then by default you can make time or half time. So for me, I was working a full time job.
00;22;47;02 - 00;23;02;09
Bronson Hill
I didn't have a lot of money on my list. Even though I was making good money, I didn't have a lot of money. And so I chose to say, okay, to scale this, I want to figure out how to create value for other people in raising money. And so when we raised the first 15 million in the first couple of years, that dramatically changed my net worth, right?
00;23;02;09 - 00;23;24;26
Bronson Hill
So there's ways people can grow much faster. So I think if you're willing to put in the work now for somebody, but it just depends how people want to set up their life, maybe in your business you can create more money there and you can invest. But I would say either it's going to take a little more time to generate cash in your business or find a way to get in the business of investing real estate, syndication, whatever that business is, and raise money or find deals, kind of do it that way.
00;23;24;28 - 00;23;43;00
Bronson Hill
The other thing that you were mentioning is cash flow versus appreciation. I think, you know, for retirement accounts, you know, if you're years out, I think I think speculative deals can be great. I think it's I think it's great. I just think in general, when someone's looking at, hey, I've got to do this job and in a certain situation, we don't know.
00;23;43;02 - 00;23;55;00
Bronson Hill
Even if you're making great money. I mean, kind of what started this for me as well, I had a couple of physicians I worked with that made over $2 million each per year, but they were working 60, 80 hours a week every week, and they couldn't take much time off. And I just thought, well, that doesn't look like freedom to me, right?
00;23;55;00 - 00;24;13;19
Bronson Hill
I wanted it. And for someone like that, could they say, okay, of the 2 million they're making or somebody making 200,000, whatever, can you take half of that and start investing it right? I start putting money in to develop these skills about investing. And I think the cash flow, once it starts to increase over time or you find investments that increase, I mean, right now in real estate, it's a little harder.
00;24;13;19 - 00;24;29;12
Bronson Hill
That's why we've transitioned to do a lot of business and other alternatives outside of real estate. But I do think I do think cash flow is great, but there are situations where someone has a sizable net worth and, you know, if I'm worth three or four or 5 million, I don't really know. I've got enough liquidity. I can deal with speculative all day long.
00;24;29;12 - 00;24;45;14
Bronson Hill
So we've got deals we've done where they're potential 10 to 100 X type of deals. And when you ever have a deal like that, there's a decent chance that that goes to zero, right? So there's things that, you know, every investment has its own risk and reward profile and you've got to figure out based on your situation, really what your goals are.
00;24;45;14 - 00;24;55;07
Bronson Hill
So that's a challenge of a conversation like this is I'm not in everybody's shoes. And when I was an investment advisor for a few years, you could have specific conversations around it, but everybody stories a little bit different.
00;24;55;09 - 00;25;19;13
Steven Pesavento
I think that is the challenge is that when you're in education mode and you're out there learning cash flow is a good safe option because cash flow is what actually pays the bills. Once you get enough cash flow together, once you have enough recurring income, then you have that optionality of being able to decide, Hey, maybe I don't actually want to go do X, Y, Z, I want to focus my time elsewhere.
00;25;19;15 - 00;25;43;19
Steven Pesavento
And you have the ability to make that decision versus you can't beat appreciation until it exits. And so I have many deals that are very appreciation focused and I'm doubling my money every 3 to 5 years and it's phenomenal. It's going to grow a lot of wealth and I think it's a great strategy. And yet on the other side, moving more money into income allows me to have more optionality.
00;25;43;19 - 00;26;10;19
Steven Pesavento
And it's about understanding my perspective, where you're at and what your goals are. Because if somebody, for example, has $500,000 to their name, they probably should focus on trading time to get more money. Like you talked about. We have Andy Higgins on the podcast recently is talking about being in that advisory role for businesses where you can trade your skills to be able to create value for the company.
00;26;10;22 - 00;26;29;29
Steven Pesavento
It's a great option, but if you're somebody who is making two or $3 million a year or $1,000,000 a year or you have five or $10 million in net worth and all you need is a couple hundred thousand dollars a year to be financially free. You have the option with passive income to be able to flip that over and be able to be in control of your life.
00;26;30;02 - 00;26;46;29
Bronson Hill
Yeah, exactly. I mean, really, it comes down to giving you options and giving you the ability to make those decisions. This is the one thing that we're really challenged to me, and actually challenges me now is that, you know, as an investment advisor, you would try to help get people in the right type of investments, that is, for a few years.
00;26;46;29 - 00;27;02;02
Bronson Hill
Then I realized, man, I just I can't do this based on what I know and I wanted to get an alternative assets. But even to you, I have all these calls with investors. You have these calls, your team has calls with investors. You can't tell them how much, hey, you should put this much in this deal or this is the way you should allocate, because it depends on a lot of factors.
00;27;02;02 - 00;27;18;16
Bronson Hill
And really what it comes down to is it depends on the own person's risk tolerance and their own desire for, you know, if somebody is 30 years old and they're like, I want to put 100% of my net worth on some really risky stuff, they have the ability to do that versus somebody else's. 30 could say, I don't want to lose anything.
00;27;18;16 - 00;27;35;13
Bronson Hill
I have. And they might say it's all going in 100% and some really conservative thing, right? Or somebody who's 80 years old could say, I want to invest this where I would invest this way and the thing is, when we take responsibility for our own investing and that's what we're doing here, we're not delegating it to Wall Street.
00;27;35;13 - 00;27;54;13
Bronson Hill
We're not delegating it to an investment advisor, because all of these people that I worked with, there's some people that have been critical. I had one guy this is a really funny story about a guy who invested with us about 500 K and one investment and a couple hundred had another investment in his in investment advisor was like, I strongly encourage you not to work with Brunson because of this and this and whatever.
00;27;54;13 - 00;28;17;12
Bronson Hill
And I'm thinking like well E and I just respondents like, you know, either this guy is not wealthy or he didn't get wealthy using the methods that he's recommending. Right. And that's the challenge is that it's it's do what I say but not what I do. And so they did a study and they found that over 50% of large investment funds excuse me, over $100 million a year, the fund manager had $0, invested.
00;28;17;14 - 00;28;39;24
Bronson Hill
Right. So Wall Street has this incredible mis alignment of interests where they will always get paid. And we have a whole chapter on this in the book about watch out for Wall Street. So I would just say, you know, for you, you got to take responsibility for your own investments, your own education, and just be ready to try different things and figure out what your own risk allocation is and what it is you want to accomplish.
00;28;39;26 - 00;29;07;26
Steven Pesavento
So kind of shifting gears here, you have a family, you're working in a W-2, you start kind of going down this path. Why do you do this? Why do you put yourself in this position to help others get invested, to take the risk, the personal relationship risk of helping guide people down this path when there's no guarantee that the result is going to be what we're all hoping it's going to be.
00;29;07;29 - 00;29;12;23
Steven Pesavento
So why do you do what you do? What's what's really driving you?
00;29;12;25 - 00;29;29;21
Bronson Hill
Yeah. So yeah. And just, you know, full disclosure here, we've had a couple deals that have struggled. We've got a couple multifamily deals. We had capital call situations on and it's been some really hard conversations with people that, hey, we're not exactly sure how it's going to go. Are we going to, you know, have a profit or are we going to retain the capital?
00;29;29;21 - 00;29;50;16
Bronson Hill
I mean, it's been really challenging. I think it's important that we in the industry, we talk about that. But I do think that, again, what I'm really passionate about is when someone is able to fire themselves, they can choose how they want to spend their time. And to me, you know, it's interesting. Warren Buffett has a quote about making money where you sleep or else you work until you die.
00;29;50;16 - 00;30;15;26
Bronson Hill
Well, he's 92 years old, I think 83 years old. He's still working right. So it's the idea of and he actually describes it a bit of tap dancing to work. Well, what if whatever your job is as somebody listening, if you could tap dance to do what you want to do every day, to work with the people you want to work with, to travel, you want to me last year I was able to travel six times internationally, was able to finish writing my book, spend time with my daughter, take her camping, do the things that I want to do.
00;30;15;26 - 00;30;37;12
Bronson Hill
And now I'm working hard. I feel like I'm really out there trying to do things, but I have the flexibility that I didn't have before. And this year, in 2024, I've got a trip to go to Everest base camp in the April-May. So those are those are kind of bucket list kind of things. A lot of people think, Oh, I'll start living life when I have the life deferred plan, when this and this and this happens, but they don't do anything to try to get themselves there.
00;30;37;12 - 00;30;55;27
Bronson Hill
So that's why I think it's so critical. And we also don't know, like you or I or any of us, God forbid we can be disabled, we can have an issue. I have you know, I have a daughter. You know, there's responsibilities I have. So having some sort of something set up that I don't have to just simply do the time for money, trade or this business has to function and there's no way it can function unless I'm there.
00;30;56;03 - 00;31;08;15
Bronson Hill
Those are those are things really to start thinking about, I think, for everybody, because freedom, in my opinion, is really a freedom of time. And so if you if you have the ability to fire yourself, you should 100% figure out how to do it.
00;31;08;18 - 00;31;41;14
Steven Pesavento
Yeah, I think it's really powerful because in order to create that life, you have to take risks. You have to go out on a limb and say, Hey, I'm going to do this regardless how many times I get knocked down, I'm going to get back out and I'm going to keep going on this path because I believe that in the long run, it's either going to stop me or my family or both to be able to live the kind of life that we all want to live and to not be stuck in fear because of the unknown, but instead to head into the unknown.
00;31;41;16 - 00;32;05;05
Bronson Hill
Yeah, I mean, it's it's I think I think it really comes down to what do you want your life to be about? And to me it comes down to your huge Tony Robbins and personal development guy as well. And just the idea of like, why are we here? What are we doing here? And it reminds me of a story about this boy is walking along the shore and he's taken and he picks up the starfish and throws it back in the ocean because he sees that they're going to die because they've kind of been washed ashore.
00;32;05;07 - 00;32;18;18
Bronson Hill
And this old man comes along, said, what do you do? And he's like, you know, there's thousands of mal, you're not God. What do you think are going to make a difference? And he picks up a starfish, looks at it as he throws in the waters. It will make a difference for that one, right? So as all we're doing, man, I'm getting fired up here, but just making a difference for people.
00;32;18;18 - 00;32;33;21
Bronson Hill
So that's what we're doing. That's what you're doing. And by our educating people, we can get them out of a system like The Matrix. That's I mean, that's, I guess a kind of a severe thing to say, but it's like a lot of people are just stuck in a job. They don't like doing something. They don't necessarily want to do or they don't know how to get out of it.
00;32;33;21 - 00;32;46;07
Bronson Hill
Even if you are very prosperous, how do you get out of that to where you actually can experience life on your terms? And I think that's the thing that and really do what you're here to do. I think that's the biggest, most powerful thing that I found.
00;32;46;09 - 00;33;06;16
Steven Pesavento
Well, it makes me a little emotional thinking about it because at the end of the day, the saddest thing is that most people don't really make a change until they go through, until they're forced to, because they go through some kind of really difficult time. The loss of a loved one, a divorce, being fired from a job, essentially being forced into that direction.
00;33;06;16 - 00;33;29;24
Steven Pesavento
And yet we have the option to get ahead of it. You know, we don't have to lose somebody really close to us in order to go out and do the hard thing. If we can connect to what that's really going to do for us. And I think being the example in your great example is is a super important, valuable role to be able to show other people that it's possible.
00;33;29;27 - 00;33;58;03
Bronson Hill
100%. And you know, there's another quote. I'm a I can I quote in a book guy, but there's a quote about I think it's attributed to Nelson Mandela, but just said it when we let our light shine, it allows others to give them permission. Right. And so as for you going after your dreams, me going after my dreams, individuals doing the things you're creating those things in their life that we're here to do, and us living out our passion that even like a faith quote of, you know, the glory of God is is man most fully alive, right?
00;33;58;03 - 00;34;16;17
Bronson Hill
Like when someone's fully alive, you can see it. You can see it in their eyes. You can see it in their passion that they're they're just taking the bull by the horns and they're living courageously without fear. And they're they're they're a powerful force. Right. And and that's the kind of person that I want to be. And that's what I want everyone to discover for themselves, that, hey, I am a powerful person.
00;34;16;17 - 00;34;29;02
Bronson Hill
I can create, though I'm not I'm not I'm not a victim here. You know, I'm not a victim. I can create a new vision for my life. And that's I know why you do what you do or why I do what I do. And I love that you talk about mindset because that's like 80, 90% of it, right?
00;34;29;02 - 00;34;40;24
Bronson Hill
There is just getting the right mindset and be able to change for the situation that you have. So my hope is people really get set free and get a vision for their life that's very that's much bigger than what they had before.
00;34;40;27 - 00;35;03;11
Steven Pesavento
Yeah. And I mean, the truth is it's the work that we're talking about Bronson. It can truly change people's lives. Yet it's a very difficult road to be on because we're talking about money, and money is connected to capitalism, and capitalism is one of the most powerful tools out there yet when what we're talking about is truly making an impact.
00;35;03;11 - 00;35;21;25
Steven Pesavento
And I'll be honest, when I got started in the business, in business in general, I wasn't trying to make an impact for others. I was trying to get myself out of broke, fear, pain, all of those negative things that I grew up with that drove me. And then I had a life changing experience, the loss of a loved one.
00;35;21;27 - 00;35;44;27
Steven Pesavento
And over those the past four years, I've been on this journey. And despite having the best of intentions, it's still a challenging road. And so I just encourage anyone who's listening who this resonates with to keep moving forward. Because if you're doing things for the right reason and you get connected to that driving purpose, it's not something that you decide.
00;35;44;27 - 00;35;55;06
Steven Pesavento
It's something that is decided for you that you discover It can really open up a whole new way of living, even though there's challenges along the path.
00;35;55;09 - 00;36;20;09
Bronson Hill
Yeah, there's a great book. The Author, How Elrod wrote The Miracle Morning, and another one of his books is called The Miracle Equation. And it basically I might get this slightly wrong, but he has the idea that, you know, once you have, you know, incredible determination, you decide, this is where I want to go and this is a cause that's worth I mean, it's worth everything is worth giving all of my energy, basically living and dying for in the sense, you know, and they say, well, that's extreme.
00;36;20;09 - 00;36;35;20
Bronson Hill
It's like, well, your purpose is that important. Figure out what you're here to do, going out for that purpose. Then he says, you combine that kind of goal or that focus with unwavering faith that, you know, no matter how long it takes. Right. If it if you knew was going to take a month, these arms can travel for a month, whatever.
00;36;35;24 - 00;36;53;28
Bronson Hill
What if it takes you ten years? What if it takes you longer? Would you be that committed? Is that goal that important? And then when you make that decision, it doesn't really matter how long it takes, how hard it is, whatever the obstacle is, because you've already decided, Hey, this is worth me giving my life for. And so I know it's kind of subtle.
00;36;53;28 - 00;37;09;27
Bronson Hill
With that book, The Miracle Equation was really powerful just to learn, Hey, if the other day doesn't really matter, if we get this done and we get to our goals and we raise, you know, $1,000,000,000 or some huge company or we're able to you know, one of my big whys is ending modern day human slavery in the world, which is a huge, bigger, higher, audacious goal if that happens or not.
00;37;10;04 - 00;37;25;04
Bronson Hill
That's those are still causes that I want to give my life towards. And I'm going to keep taking action of those things until they happen. Right. And so that's I think that's really powerful. And you know, that guy Tony Robbins talks about, you know, you're basically, you know, it's in your moments of decision that your destiny is shaped.
00;37;25;07 - 00;37;40;12
Bronson Hill
Once you make that decision that, hey, I'm going to get after my purpose, I'm going to get my job, I'm going to do whatever the thing is that you feel you're here to do or you want to do. Things start to change and know you've experienced that as well. An incredible success in your life. Stephen How you just encompass all these amazing things.
00;37;40;12 - 00;37;43;13
Bronson Hill
And I hope that for all your listeners as well.
00;37;43;16 - 00;38;02;07
Steven Pesavento
Yeah, and to be honest, I've accomplished a lot of amazing things, but I still have major moments of pain and challenge, you know, trying to figure out what is the best direction to go and how to get there and how to have the biggest impact and how to make sure the team is is paid for and that they can get to their goals and that the investors and all of these things.
00;38;02;07 - 00;38;26;11
Steven Pesavento
And so despite success, there is still challenges. And so important to remember that because that if you know and recognize that it's going to happen and that it's part of the journey, then you'll be able to continue moving forward. So I know we've got a hard stop here. So before my last question, why don't you share with the audience where they can get a copy of your book or where they can follow you for for more knowledge and wisdom now?
00;38;26;15 - 00;38;45;18
Bronson Hill
So, Stephen, thanks so much for having me. I really appreciate you having me on the show. You can check me out. You can check out my website at Brownstone Equity dot com. We've got the first chapter of the book there you can download for free. You go to Amazon and buy the book and yeah, you can also learn about our stuff and other social media as you get a search hill you find me there, but thanks for having me on.
00;38;45;18 - 00;38;46;27
Bronson Hill
It's been a lot of fun.
00;38;46;29 - 00;39;09;26
Steven Pesavento
Yeah, it's been. It's been great having you. And I know one of the key themes of this conversation has been about how do you how do you put yourself in a position to create a better life? And so what's your advice for all the people who are listening, who are on the path towards creating their ultimate dream life, Yet they know what they need to do, but they're not taking action towards doing it?
00;39;09;28 - 00;39;30;01
Bronson Hill
Yeah, I mean, it's just like for me, I had I went to real estate meetups for six years and I really didn't take any additional action. I just kind of kept learning which learning is good. But again, if I were to have learning or action, I would just take action. What would it really change for me is when I made a decision, when I said, you know what, in three years I want to be out of my job and I had a good job and my family is like, You're crazy.
00;39;30;01 - 00;39;47;05
Bronson Hill
Why would you want to leave your job? Right? You have this great job and you're working 20, 30 hours a week. But I wanted to be able to create something that was different. It was my own. So I think anybody listening and watching this or listening to this is just figure out what you want and then make the decision like, Hey, I'm going to do this or this is this amount of time.
00;39;47;05 - 00;39;58;20
Bronson Hill
And then your subconscious, once you make that decision, we'll start to go to work and help you figure out how to get there. And so I think that's the biggest thing make a decision and then start taking action toward that goal every day. Every day, just every day.
00;39;58;20 - 00;40;08;06
Steven Pesavento
Do something a Well, thanks so much for listening to this episode and thanks so much for joining us. Bronson We'll see you guys on the next one.