Join Steven Pesavento in a captivating conversation with Derrick Kinney, author of Good Money, as they delve into transforming negative money beliefs, the impact of mindset on financial success, and the powerful role of generosity in business. Discover how shifting your perspective on money can unlock new opportunities for wealth and fulfillment.
Key Takeaways
Resources Mentioned
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About our Guest:
Derrick Kinney is the CEO of Good Money Framework and the host of the popular Good Money podcast. With over 25 years of experience as a financial advisor, Derrick has built a reputation for helping clients achieve financial success by changing their mindset about money. He is the author of the best-selling book Good Money, where he shares insights on transforming negative money beliefs, using wealth for good, and building a life of impact and fulfillment. Derrick's innovative approach and commitment to generosity have made him a sought-after speaker, consultant, and thought leader in the financial industry.
Are you looking for High-Performance Business & Mindset Coaching? Schedule a call now and see how we can be of service to you. http://www.investormindset.com/discover
00;00;00;21 - 00;00;08;27
Steven Pesavento
Welcome back to the Investor Mindset podcast. My name is Stephen Passive. Entering today I have Derek Kenny in the studio. How are you doing today Derek.
00;00;08;28 - 00;00;10;25
Derrick Kinney
Hey great Steven thanks for having me.
00;00;10;28 - 00;00;39;24
Steven Pesavento
Yeah I'm super excited to talk with you because your book, Good Money, is really an incredible story that I think really outlines something that a lot of people don't fully get. That money's not bad. A lot of people attach bad connotations to money or bad people with money. Let's start out talking a little bit about that, because I think once people understand this and they can change the way they think about money, I really believe it'll change their life.
00;00;39;26 - 00;00;57;27
Derrick Kinney
Yeah. So let me take you into my office. This was a couple years ago, and I saw a voicemail, like blinking in my office. I was there to catch up on a few things and a voice inside just said, Derek, you need to listen to this message. So I pressed it, and there was a frantic woman's voice on the other end of that line, and she said, Derek, you've got to call me back.
00;00;57;27 - 00;01;14;12
Derrick Kinney
I know it's Saturday. Frantically, they're about to send me to jail. You've got to call me. Well, I've never had a message like that before, and I knew it couldn't wait until Monday. I called her right back and I said, tell me what's going on. She said, Derek, I got a letter in the mail and it said, they're going to send me to jail.
00;01;14;16 - 00;01;29;12
Derrick Kinney
And I said, well, don't tell me more about the letter. This was a long time client. Well, it looks like it's called insufficient funds. I didn't move money from my savings to checking. I wrote a check and a balance, and now they're going to haul me off to jail. And I said, okay, first of all, they're not going to take you to jail.
00;01;29;13 - 00;01;46;22
Derrick Kinney
Let me just leave your fears on that. Now, there's not going to be a fitting for an orange jumpsuit anytime soon. But I said, I'll call you Monday and I'll help you move the money with the bank and get that squared away. But why don't we meet next week? I said, and let's unpack what you're talking about here.
00;01;46;24 - 00;02;09;20
Derrick Kinney
So she comes in the office and she tells me a story. She said, Derek, when I was a kid, she was seven years old. She overheard a conversation that her dad was having with a store manager. He had just gone to the store to buy some school supplies for she and her sister, and he had accidentally bounced a check in the store manager said, because you did that, I'm going to send the cops to your house and haul you off to jail.
00;02;09;22 - 00;02;31;04
Derrick Kinney
So she heard this, and now she's like 57 years old and she's thinking, oh my gosh, if I balance a check just like my dad, they're going to try to hold me off to jail. And what happened is it was sort of peeling back the onion in this conversation. This was a woman who never took my advice. She was always complaining about never getting the promotion, not getting paid what she wanted.
00;02;31;07 - 00;03;01;26
Derrick Kinney
And what we realized was she was holding bad money, beliefs. Money was bad. If I mess up with that, I'm bad. I've made past mistakes. Therefore I'm never going to be good with money. And what we realized was those needed to be identified and then rectified. And once we had a game plan to change her mindset within an alarmingly short amount of time, like three months, she got a big raise, got a big promotion, and most importantly, she began to take my investment advice for goodness sakes.
00;03;01;26 - 00;03;17;14
Derrick Kinney
We started to make her some money, but it taught me that whether you're seven or you're 57, bad money beliefs land in your head, and if you don't do something about it, they will continue to fester and grow and hold you back financially.
00;03;17;16 - 00;03;38;09
Steven Pesavento
Yeah, well, it's so true. I mean, when you change your belief, it really does change who you are and how you interact with the world and and what is attracted to you. So what are some of the common money beliefs that you see? And how can people, you know, just in a very brief exercise, how can people identify some of those to make that shift for themselves?
00;03;38;12 - 00;03;57;27
Derrick Kinney
Well, think back to when you were a kid. This is normally when these formative thoughts occurred. If you can picture yourself in the kitchen and you see your mom or dad or a grandparent banging their fist on the table and saying, if only we had more money, then we could do the things other people do, or then we could have the joy in life we want.
00;03;58;00 - 00;04;24;23
Derrick Kinney
Or the worst offender of all is when a well-meaning parent or grandparent tells their kids or grandkids, you know, in life, honey, there's the haves and the have nots, and we happen to be part of the have nots category. Well, what that does, that's like a death sentence for your money. And it lets kids grow up thinking that there is a lid on their potential and a lid on their income and a lid on their opportunity.
00;04;24;26 - 00;04;37;23
Derrick Kinney
And I want to rip lids off of people faster than anybody and let them know whatever was told you in your past has passed. It's time to move forward and sometimes press restart on your money.
00;04;37;25 - 00;05;00;10
Steven Pesavento
Yeah, it's it's interesting because as you name a bunch of those examples, I've done a ton of work on beliefs and, and and it's funny when even hearing them after doing the work, I, I remember to myself or I think to myself, oh, I remember that. I remember that feeling, that feeling like we'll never have enough. That's where all of our problems come from.
00;05;00;10 - 00;05;15;27
Steven Pesavento
And the irony that I found is that by changing that belief, it gave me a bunch of relief. But interestingly enough, having money didn't solve the problem. I actually had to change the belief in order to not only keep the money, but continue to attract more of it.
00;05;16;00 - 00;05;33;23
Derrick Kinney
Yes. So true. And it's interesting in that in it's I don't want to make it sound like, as you just talked about steam and you just press this button and suddenly my bad money beliefs have disappeared. New ones have replaced it. It's a constant reminder. And then one thing I realize is, you know, who do you talk with the most every day?
00;05;33;26 - 00;06;16;12
Derrick Kinney
Well, it's yourself. And sometimes you've got to have very convincing conversations with yourself that I might have made past money, mistakes. I might have missed, financial opportunities, I might have done some really crazy things with my money. But tomorrow and today can be a restart for me. You know, we see time and time again of stories of people in their 70s, in their 80s who've had multiple failures financially, personally, business wise, but they find a way to keep persevering and most importantly, learning from their past mistakes and see those mistakes as the pathway to success, not the pathway of confirmation that they're a bad person with money.
00;06;16;14 - 00;06;39;19
Steven Pesavento
yeah, that's it's really key. You can't fail as long as you're learning, but you have to change that belief for that to actually come true. So there's something that really attracted to me, to your message in the book and, and in the things that you talk about. And it is this idea that money is good, that money can have impact, that money can create the things in your life.
00;06;39;20 - 00;07;02;25
Steven Pesavento
I really resonate with that because it's something I teach and something I truly believe. And I found from the investing side that when you step into the mindset of an investor and you start to understand how you can go about not only getting clear on what you want, which is key to investing, but then understand what are the different paths and steps you can take to continue to learn and grow and earn that money.
00;07;02;25 - 00;07;20;13
Steven Pesavento
But those same beliefs supply to creating a great life. So talk to me about the role of impact when it comes to money, and how just focusing on that piece not from a superficial place, not from a place to feel or to to sound good to other people, but to truly feel good yourself.
00;07;20;15 - 00;07;41;03
Derrick Kinney
Yeah, yeah. And let's be honest here. I mean, I like money, and I'm suggesting most of your listeners do as well. I mean, we, we know that more money typically leads to a better lifestyle. There's more peace of mind. The problem that we find is that when people link, I will feel great and I will feel successful and accomplished.
00;07;41;05 - 00;08;00;03
Derrick Kinney
When I achieve two commas, when I achieve X amount in my bank account. And the problem is they don't. And that leads to very high levels of frustration. They think, well, I thought I would feel better, like I thought I would feel accomplished and have no problems at this level again. Now they begin to worry about running out of money.
00;08;00;03 - 00;08;27;08
Derrick Kinney
So it's this very cyclical thing. But let me go back a step. And the impetus for this book came about five years ago, as I was working as a financial advisor, built a 25 year, a career, and had clients all over the country, I began to hear this cultural voice creep into conversations, and it sounded like this money is bad, and if you like money, you're a bad person.
00;08;27;15 - 00;08;53;21
Derrick Kinney
And if you're really successful, that means you're oppressing people to make more money. You're probably just a bad person. And I thought, wait a minute, that is a gross oversimplification of what could be a problem. And I would ask you, if you think back during the Covid times, yes, Amazon stock soared. Yes, Peloton's stock soared. But those companies were providing great value to people.
00;08;53;21 - 00;09;13;15
Derrick Kinney
So I'm happy for Jeff Bezos making tons of money because he's helping out tons of value to my life. And so what I began to realize was many people, and it became popular in the media to throw stones at the wealthy. Well, you need to be sharing that money all the money that you've had and hoarded in the top 1%.
00;09;13;21 - 00;09;37;10
Derrick Kinney
You need to distribute it out. I said, why? Why would they want to distribute that out? And why should they? And how would a person feel just getting money distributed to them? Now there's a part of the culture that like that when they got their Covid payout and these kind of things. But I suspect many of your listeners, we like to earn it and like to have this story that goes along with earning and doing hard things.
00;09;37;12 - 00;10;04;04
Derrick Kinney
And what I realized was that we can either do two things. We can choose to waste our brain cells in our breath criticizing the wealthy, or we can use our brain cells to learn how the wealthy became wealthy and do that, and then take that newfound wealth and use it for good. And that's how I tied in this whole make more money to do more good.
00;10;04;04 - 00;10;24;27
Derrick Kinney
So let me tell you just a quick story. When I was building my financial planning practice, I started off at age 26. I looked like I was 13. I wondered, why would anybody work with me for goodness sakes? But I had a passion for local education and so I went back to my alma mater, high school, Sam Houston here in Arlington, Texas, where I'm talking to you from right now.
00;10;24;29 - 00;10;48;15
Derrick Kinney
And I brought a $50 Amazon gift card and a $25 Amazon gift card for a teacher and student of the month, because I would have loved, when I was a student to have had somebody come back and recognize students like myself. And these teachers, you would have thought, Stephen, they won the lottery. A $50 gift card was like, oh my gosh, this is like a a Hawaiian vacation because they don't have that kind of money extra on the side.
00;10;48;18 - 00;11;07;24
Derrick Kinney
So give them a certificate, took a picture with them, put that in the newspaper back in the day. And what happened? About a month or so later, I began to get phone calls and one woman vividly. I remember the conversation. She said, Derek, my husband and I want you to be our financial advisor. And this had to be the most unprofessional thing ever.
00;11;07;24 - 00;11;33;13
Derrick Kinney
But I said, ma'am, I'm 26. I'm brand new. Of all the advisors in town, why do you want to work with me? She said, Derek, it's because you care about what we care about. That's stunned me. She wanted to work with me. She knew I was competent and caring and it could be good with money. But she wanted to work with somebody who cared about local education like she did.
00;11;33;16 - 00;11;58;05
Derrick Kinney
And what that did is that was the impetus then of building my business, entrenching myself in my local community as a business owner, becoming known as a friend of the community with $75 a month going to all different high schools in the area, you know, recognizing teachers and students so you can actually incorporate your generosity into your business as a way to strategically stand out.
00;11;58;08 - 00;12;17;24
Derrick Kinney
And what happens is it attracts high net worth people in attracts people who want to work with you because deep inside all of us is this desire, this longing to know, is my life making a difference? And if I can work with a service provider that does, that is an easy way to achieve that high.
00;12;17;27 - 00;12;42;05
Steven Pesavento
Yeah, yeah, there's something really powerful to that. Be it especially because I've found that the more successful financially somebody is, the more that they have to shift from what was driving them at one point in time, driving that from a place of pain, from a place of scarcity, from a place of uncertainty. They actually have to unlock and connect to a new energy.
00;12;42;05 - 00;13;13;17
Steven Pesavento
And oftentimes I've found that that is really through impact. I've I've gone through it myself, have been lost as a result of success. And it's interesting because then what what you're really saying is you're going out and doing the thing that you would already want to do. You're doing good in the world, but as a result of that, you attract more people who are like minded, who either want to do business with you, connect with you, share, make introductions and a variety of other things that help you as a result of something that you would want to do personally just because of your values.
00;13;13;19 - 00;13;30;06
Derrick Kinney
Well, it's so true. And what I would tell people, especially if you have a business right now or you're thinking about going into business, you want to make sure that you have a great product or service. First of all, those are table stakes. You want to make sure you provide great customer service. All of those things are expected today.
00;13;30;06 - 00;14;02;24
Derrick Kinney
So don't think that your generosity will cover a terrible product or service. It doesn't work like that. Or don't think that giving will suddenly cover up a terrible reputation that you might have in your local community. The key is a giving. I used to call it law lawn Yap. Back in the old furniture days, it was. It was when people would craft this fine furniture and they would put these extra touches, maybe this extra button or this extra tuft in the leather to add this extra level of excellence to it.
00;14;02;27 - 00;14;26;26
Derrick Kinney
And that's what giving and generosity it's line Yap. It's like the Sabbath bagel when you buy like the 13th bagel when you buy a dozen at the local bagel shop, it's an extra thing based on already. You enjoy those other extra great bagels, so it's important to know what cause do you care about. And this is where your money and meaning meet each other, often for the first time.
00;14;26;26 - 00;14;51;27
Derrick Kinney
Often we spend so much time thinking about how do I make more money we lose track of am I adding value to the client? But clients today, especially post-Covid, they want more from their buying experience than just the product or service. They want an ease of experience and they want an overall feeling that they're making a difference in the world.
00;14;51;29 - 00;15;15;25
Derrick Kinney
To a quick, real quick story, one of the women I mentioned the book was Bebo Calandra, and she did research and they were talking about they they measured how people's brains respond to different advertising. And one group of people watched an ad from a car company, and it talked about the latest engine and the horsepower and the features and benefits, and they measured how their brain responded to that.
00;15;15;27 - 00;15;47;11
Derrick Kinney
Then they did an ad from the same car company featuring people training to be on the U.S. Olympic team, and all the sacrifices it took to get there, and how this car company was helping them achieve that goal. And they measured people's brain responses. Well, the brain responding to the ad about the Olympic team, it mimicked get this the same emotional response as though you're looking into the eyes of someone you love.
00;15;47;13 - 00;16;13;08
Derrick Kinney
I mean, it was this deep emotional experience just from watching a TV commercial. And so what that validated for me, Stephen, was, if you're in business today, please don't fool yourself into thinking I've got the best product, I've got the best service, I'm the best salesperson. People want more. And when you can open this door and say, when you work with me, when you buy from us, you're part of something bigger.
00;16;13;11 - 00;16;27;00
Derrick Kinney
In our local community. It endears you to customers and puts a moat, because there's always competitors who want the same customers that you got right now. You're molding your business and scaling it at the same time.
00;16;27;03 - 00;16;47;02
Steven Pesavento
Yeah. So it's a really powerful philosophy to think from that perspective. How can I do something different than other people are doing to attract people and connect to them emotionally? That actually brings them closer to what they actually want, while also delivering the value that I need to run a business. So let's let's shift gears a little bit.
00;16;47;02 - 00;17;09;14
Steven Pesavento
So let's talk a little bit more personal about you and your situation. You built this business you started when you were 24 or 25. You spent the last few decades building at being out on TV on podcast. You've obviously written a book. Talk to me about what that process was like, getting to the point of making the decision to sell and exit your business.
00;17;09;14 - 00;17;35;18
Steven Pesavento
What led you there? And let's get into some details about how that actually came together. There's a lot of business owners who are, you know, in the process of selling or looking to sell. And I'd love to talk about what led you to deciding, hey, I'm going to move on to a different, different phase of life. And and what, allowed you to be able to, to make that exit?
00;17;35;20 - 00;17;56;14
Derrick Kinney
Well, part of it was a problem I had, and that was when I would examine myself on a regular basis. I would say, dude, how close are you to achieving your goals? I realize as an A personality, I would often run really fast toward things, but if I wasn't measuring how far I was going and if I was in the right direction, I'd be running fast in a circle.
00;17;56;17 - 00;18;16;13
Derrick Kinney
So about ten years ago, I began to take a yearly sabbatical. And I would take. And I still do this every year. I take about five days completely by myself, and typically I go, then my family joins me for a week after that. So I have something to look forward to. But I ask myself three questions. How do I be a better husband?
00;18;16;16 - 00;18;39;10
Derrick Kinney
How do I be a better father? And how do I be a better business owner? So the whole purpose of of that time together is to get real clear on if I'm going to run really fast 52 weeks of the year, I need to take one week to clarify what am I running fast toward? And so it's basically it's as much tech free as possible.
00;18;39;13 - 00;19;03;03
Derrick Kinney
It just thinking and asking myself, what's the ideal situation that when I'm back here a year from now, I can look back and say, I crushed the year. And this was July of 2019. I'm actually in the in the Boston Hotel, kind of overlooking the wharf there. And I'm contemplating what is the future for me as a financial advisor.
00;19;03;03 - 00;19;30;20
Derrick Kinney
I've got some big goals and big dreams. I want to do some national work, and I begin to write a list of all the things I would enjoy doing. And I wrote down, write a book, launch a podcast. Coach, speak, consult could I redo another business and build another recurring revenue stream that mimicked what I had as a financial advisor would be a challenge, but on the list, surprising was not being a financial advisor.
00;19;30;22 - 00;19;54;22
Derrick Kinney
I just sit back and take a deep breath. When I saw that it wasn't that I didn't enjoy it, but I'd been feeling for a while, like I was beginning to go through the motions. I loved my clients, I loved my team, I loved what I built, but it's sort of like that athlete that you love, but you wish they would have retired maybe two years ago in their prime, and you've seen their decline over the past two years.
00;19;54;24 - 00;20;12;11
Derrick Kinney
I didn't want to be that guy. And I realized, okay, Derek, if I'm going to practice what I'm preaching here, I need to go and sell my practice and bet on myself because I wanted to do some national TV stuff and build in more of a national brand and help more people. I didn't want to be that financial advisor.
00;20;12;14 - 00;20;35;28
Derrick Kinney
That was kind of working part time and kind of straddling both and says, I'm an all in or all out kind of guy. I like my clients deserve that and that. So you can relate to that here. So January of 2020, I sell my business. I found a great advisor who wanted to grow. I had built a regional practice throughout Texas and it was a great fit.
00;20;35;28 - 00;21;01;04
Derrick Kinney
As I like to say, I never wanted to hand my clients off. I wanted to hand them up. And I will tell you this. You mentioned that you've got several listeners that are in the process of buying or selling a business. One lesson I learned is I had to get used to putting my ego on the shelf, because I like to think that I was the best financial advisor, I was the best business owner who would want to work with anybody besides me.
00;21;01;07 - 00;21;27;24
Derrick Kinney
Well, then when I sell that, I've got to sell my clients on. Hey, guess what? I found somebody better than me. Yeah, I need to be happy about it. And so when I realized was the goal of selling was not to make and puff myself up, but the win was that I have found somebody better than me who I could entrust my baby to, that this next person could raise them better than I could have.
00;21;27;26 - 00;21;47;20
Derrick Kinney
And so that a year from now, clients can say, Derek, you really picked a good successor. That was the win. And so what I realized was, again, the dollar amount was great. all of those pieces were good because what what took me a while to, to sell was getting my head around the recurring revenue stream that I had built.
00;21;47;22 - 00;22;04;20
Derrick Kinney
You know, when you build up a client base and they like you, you're getting money and revenue from them every year by continually adding value to them every year. It's a great we're all in the in the same boat rolling together business, I think. And so my goal was okay, Derek, if you did this once, let's do this again.
00;22;04;20 - 00;22;16;02
Derrick Kinney
So basically over the past four years now I'm launching and testing different business ideas. So when people ask how's retirement? I bristle at that because I'm not retired.
00;22;16;04 - 00;22;37;11
Steven Pesavento
It doesn't sound like you're at a point where you wanted to retire, you just wanted to shift, or you wanted to climb that second mountain. If you haven't read that book, highly recommend it. Yes. but the the the thing that's I think really interesting is when you're a financial advisor, you're obviously getting paid on a recurring revenue stream and then, you know, you've got these relationships.
00;22;37;11 - 00;23;04;05
Steven Pesavento
And so I had to imagine that it's tough to let go of those relationships and go through that process where depending on how comfortable you are, obviously you don't have to talk specific numbers unless you're up for it. But talk to us about what type of how is a financial advisory valued, what kind of multiple, what type of structure were you able to put in place so you receive all the money up front, or do you have to take a payout over time?
00;23;04;11 - 00;23;09;07
Steven Pesavento
How did that work for you and how did you think through deciding that was the right fit?
00;23;09;10 - 00;23;33;28
Derrick Kinney
Yeah, yeah, happy to talk about it. well, one of the lessons I learned was when you're especially building a business, you want to build it as though you're going to sell the business. You know, one of my favorite movies is a movie called The Founder. That's the story of Ray Kroc, how he sort of Arnold. And there's a scene in the movie where they go to this tennis court and they've sketched out in chalk every movement it takes to make a hamburger.
00;23;34;01 - 00;24;02;08
Derrick Kinney
And it's like this symphonic exercise. And they tested and they want to make sure that there's no wasted time or space. And one of the lessons I learned to prepare to sell several years ago was I needed to systematize and document all of my processes. So whether I sold or not, I could either sell it, which would enhance the value because I'm simply stepping out, the new owner is stepping in and the processes and systems continue.
00;24;02;08 - 00;24;26;21
Derrick Kinney
Along with the great team I assembled or I can say, I'm going to launch this in another city and simply place another franchise model over there. So if you can do that, where were you? Make yourself replaceable. It's what really helped drive the value up of my particular financial planning practice. But generally speaking, what what a buyer wants is consistency, and they don't want any guesswork.
00;24;26;27 - 00;24;55;00
Derrick Kinney
It just like when an author is signed to a book deal, the publisher wants to know how many followers do you have? How many guaranteed people will buy this book they want? They don't want to have any risk. And so the recurring revenue that I built up was about $2.5 million. So based on that number, there's a multiple that gets applied typically, you know, two and a half to three times three and a half times based on the predictability of that revenue.
00;24;55;02 - 00;25;23;08
Derrick Kinney
Now one times revenue is typically discounted because it's less predictable. But what I what a savvy buyer is looking at in a business like mine or any other service business, a how sticky are those relationships? Because essentially there's no contractual agreement that the the client has to stick with the new buyer. The buyer has the onus of quickly building trust with those new clients.
00;25;23;10 - 00;25;46;12
Derrick Kinney
but also they want to look at the age of those clients, you know, in the financial services business, one of the enemies and one of the the red flags is, is this too much of an aging financial planning business? You know, what's going to happen if everybody's in their 80s? Well, we like to think we could retain the assets, but what if they get passed on to son or daughter who I don't have any relationship with at all?
00;25;46;19 - 00;26;10;22
Derrick Kinney
So all of those are variables that you have to evaluate. You know, when I actually bought for businesses prior to selling my own, and what I realized was it really helped kind of uniquely prepare me for that, because I wanted to build a marketing plan to sell my business. You know, this was I love marketing, promotion, letting people know what I'm doing.
00;26;10;24 - 00;26;32;12
Derrick Kinney
I and I always feel like if you're a financial advisor who's struggling right now and people don't know who you are, that's your problem. You have the skill set to identify what problems people have. You just have to better market that and communicate that. But letting people know that in this system that I built, Derek steps out the new owner steps in and things continue on.
00;26;32;12 - 00;27;03;09
Derrick Kinney
And to prove that out, we ended up having a 99% client retention on the sale. Now, part of that was I stay local. I'm pretty visible nationally. So so they kind of feel like Derek is still around while things are happening. But the new owner did a great job, especially during Covid. The timing couldn't have been better to, and I would just tell somebody who wants to buy a business now, whatever you do, change the least amount possible.
00;27;03;12 - 00;27;25;00
Derrick Kinney
You know, I'll tell you one quick story. There's a dry cleaner, locally here about four years ago, his name was Mr. Johnson. My kids loved to go to the dry cleaners because they loved to see Mr. Johnson. He had a candy dish. He would say hi to them, shake their hands, give them high fives. Well, Mr. Johnson decided to retire and move, and he sold that dry cleaning business.
00;27;25;00 - 00;27;56;17
Derrick Kinney
Highly successful. And within two weeks, there were major changes made. Suddenly, the artwork was off the walls and instead were posters about how to get your paints dry cleaned. For 399, they replaced Mr. Johnson with a person at the counter who could barely speak English and clearly didn't like to be around people, and within an alarming short amount of time, I could notice there were less and less clothes on the rack, and within three months the place was out of business.
00;27;56;19 - 00;28;26;06
Derrick Kinney
Here was a cleaners that was thriving under Mr. Johnson. New owner comes in changes everything in the place, goes under. He probably lost at least half $1 million. So what I would tell people is don't change the people, make it about you're only changing and you're honoring the previous owner. You want to make sure that previous owner feels like they have a place in the hearts of those clients, and you're thanking them publicly, appreciating them.
00;28;26;09 - 00;28;39;07
Derrick Kinney
Well, if it wasn't for Tina, we wouldn't be here today. Let's give Tina a big round of applause at that nice client transition meeting you have together. All of those pieces are ways to really grow, but also get paid what you built and worked hard for.
00;28;39;10 - 00;28;57;26
Steven Pesavento
Yeah, I think there's some some really powerful things there, especially if somebody is preparing to sell. If you're building a business, you should always be preparing and open to selling, even if you don't plan to. but for you in particular, it sounds like you had a nice exit. You had built a business that was ready to sell, so you're able to get a higher valuation.
00;28;57;26 - 00;29;23;01
Steven Pesavento
You you're able to make that transition go well. You're a financial advisor. So I have to imagine that you're pretty focused on the public markets. but I'm curious, did you invest in other businesses? Did you buy businesses that were different from the financial, the financial advising business, or do you invest in privates like private real estate, private equity, private credit?
00;29;23;04 - 00;29;32;27
Steven Pesavento
What is kind of your investment philosophy and strategy, and how did you end up taking that, that wealth that you had built and then put it to work, to continue working for you?
00;29;32;29 - 00;29;51;25
Derrick Kinney
Well, I love investing. I love the whole concept. It sounds so basic, but the concept that I can take my money and my money can go make other money for me. I just love that concept. It's so beautiful. And one of the things I would enjoy doing with my clients is occasionally there'd be IPOs that would come out.
00;29;51;28 - 00;30;11;21
Derrick Kinney
Now at the broker dealer I was at, we didn't have access to the pre IPOs we could just buy at the moment. It went public and I we did this with Chipotle and Google and a number of visa stock specifically. I put well I would always make sure that my clients trades of course went in first because that was to make everything with integrity.
00;30;11;24 - 00;30;37;05
Derrick Kinney
I put in $100,000 and that was my biggest investment to that date. And it grew to $1 million, over a couple of years. And because visa was one of those investments that the track record was there, you know, people were spending that was already part of consumer behavior. Even Google, when it went public, it was a Dutch actionable thing when it went public and it hung out at like $80 a share for like two hours.
00;30;37;05 - 00;31;03;25
Derrick Kinney
And I thought, what's going on with this company? And of course, we know where Google went. so those, those types of things always intrigued me. And I've continued to invest in companies that go public. I really like ETFs a lot. I like Spy, I like some of the more broad based exchange traded funds. one of the things I'm also very, intrigued with now and actually buying our pre-seed companies.
00;31;03;28 - 00;31;23;24
Derrick Kinney
So like in my book, I talk about the four lanes of investing. You got your lane one checking and savings lane to that, 3 to 5 your money lane three is more the retirement long term. Lane four is more the speculative money where you might buy the crypto, or you might buy something to have a good cocktail, story to tell to somebody.
00;31;23;26 - 00;31;47;01
Derrick Kinney
So there's a couple companies out there. One overnight oats, grassa. Olive oil, or a ring. There's companies like this that they go to investors and say, hey, we're growing. And ideally you want to get in on the pre-seed, for example, that this this is going to sound crazy here, but one of the Bitcoin plays that was very intriguing to me.
00;31;47;03 - 00;32;07;16
Derrick Kinney
I bought into this about a year and a half ago. There's all these landfills and they generate methane gas. And what happens is I got to do something with it. And many places are not generating electricity off of the methane gas because to mine Bitcoin, it's an enormous electricity cost. And so I put money on.
00;32;07;16 - 00;32;13;00
Steven Pesavento
Was like we Derrick, sounds like we know some of the same people I'm in. I'm in a lot of those deals.
00;32;13;03 - 00;32;34;01
Derrick Kinney
Okay. Yeah. So very it's just intriguing because Bitcoin itself is fraught with ups and downs. But this was kind of a unique way to about helping an environment and, play a part in an investment trend. So I would just encourage investors listening right now that, you know, you're going to be told, hey, S&P 500 stocks are grade.
00;32;34;01 - 00;32;48;18
Derrick Kinney
Really all those things are good, but you want to have some in that speculative side just to feel like you're part of the action. You don't want to put everything there. Put a little bit there to have a story to tell. If you lose some, you might lose some, but if you hit one, you're going to feel good about how you made that decision.
00;32;48;18 - 00;33;11;20
Derrick Kinney
Like for example, right now I'm really intrigued with all these weight loss, issues that are going on. That's very, very intriguing. It's a trend that's very appealing to me. physical fitness is very appealing. All of those categories are very intriguing to me. So I like to be on the on the front end. But again, you always get the most arrows in your back when you're the first one on the trail.
00;33;11;23 - 00;33;37;00
Steven Pesavento
So, you know, investing in a company like Space-X or Momentus or this power company that we're talking about, what these are obviously speculative. Super cool story behind them. That's the reason I invested. I thought, oh, this is cool. A little bit of play money. I almost think of it more as gambling than investing, but it absolutely does have a strong investment opportunity.
00;33;37;07 - 00;34;01;05
Steven Pesavento
What type of percentage do you personally think about when you're going to go into things from a portfolio allocation standpoint, into things like that, that are more speculative, where it's the possibility that it's going to go to zero and plan A might not end up becoming a company or getting approved by the FDA. But if it does, it could go ten x 20 x 100 x.
00;34;01;10 - 00;34;05;01
Steven Pesavento
How do you think about allocation for for something like that?
00;34;05;03 - 00;34;23;26
Derrick Kinney
Well, I always ask myself, can I afford to lose this? And how bad would I feel if I lost it? And how many bottles of wine would it cost me to feel better about losing it? So all of those factors into the cost structure, you know, what I look at is do I need the money for income?
00;34;23;29 - 00;34;47;29
Derrick Kinney
Do I need the money right now? Because those are high, as you know, they're highly illiquid. Basically, once you put them in, you're either you're saying goodbye to them in some form or fashion in that they're going to completely go away or they're going to pay, and you don't know when they're going to pay. but what I've done, and I think a lot of investors can, can take a cue from this, is it's always good to have what I call a play account.
00;34;47;29 - 00;35;03;07
Derrick Kinney
In other words, have a little bit of money that you're willing to. It might be $100, $1,000, some people $10,000. Whatever it is for you to be able to put some money in there, to be part of it. And and also what I find as it's not.
00;35;03;07 - 00;35;24;08
Steven Pesavento
Investment advice, but allocation wise, are you thinking like 1% or you're thinking 5%? Because one of the biggest mistakes that I see people make, and obviously everybody's got their own allocation. But you know, I, I'm a professional real estate investor. So we buy big apartment buildings. And, you know, because I do it for a living, I feel very comfortable in that asset class.
00;35;24;08 - 00;35;47;20
Steven Pesavento
So I'm not going to get a ten tax return. But I may need A2X and the, the, the, the likelihood of me having a total loss is low. It's possible, but it's lower on average over the long term. But then I see people getting super excited about these things. And they're pumping in 20, 30, 40% of their wealth into deals that are highly speculative.
00;35;47;20 - 00;36;02;02
Steven Pesavento
And from my perspective, that seems highly risky. Are you thinking like a couple percentage points or what do you think the max is for somebody who's not like an expert at picking CPG or tech companies to invest in?
00;36;02;05 - 00;36;22;10
Derrick Kinney
Yeah, I mean, I, I tend to limit that to probably 5 or 10%. And again, it just it depends on your situation. I mean, I, I, I might like to be at 20% and be perfectly fine with that or more. Just depends on the deals and so forth. What I like to do is, is use it as fuel to increase my finances.
00;36;22;10 - 00;36;42;10
Derrick Kinney
So if there is a deal I want to get into, like I need to go get another speaking gig, I need to get a few more coaching clients. I need to add more value to people to generate some revenue to get into that. So that way it's a win win. I want to be in like for me, if you were to ask me and Derek, would you rather have a super nice car or buy an investment?
00;36;42;12 - 00;37;02;19
Derrick Kinney
I would pick the investment just just because it's like, I love my Jeep, but that investment is it just feels like I'm buying something. I'm betting on somebody else. And either way, if I can bet on other people and their expertise, it's like the ultimate form of leverage that that grows people into very wealthy people.
00;37;02;22 - 00;37;23;00
Steven Pesavento
Well, Derek, this has been super great. I've got one more question after this, but I want to give you a chance. I know you're working on some really incredible things. You're focused on helping teens learn about money and make some changes in their life to grow. So I want you to share a little bit about that and more importantly, where people can follow you or or check out your podcast.
00;37;23;00 - 00;37;25;26
Steven Pesavento
And then we'll get to that last question before we wrap up.
00;37;25;29 - 00;37;45;18
Derrick Kinney
Yeah, yeah. So I mentioned, kind of off the air, having sold my business a couple years ago, there's a there's a couple pain points that are really convicting to me and I want to help solve. And one of them is I see teenagers who aren't getting all the opportunities I think that they want or deserve it. It comes down to communication.
00;37;45;18 - 00;38;08;20
Derrick Kinney
How do they how do they communicate with adults in ways where adults know them, like them, and trust them? So we launched a new program called Simple Teen success.com online. We made it free, training on soft skills, money, skills, life skills. That's a real passion of God. But another a place where people can find us is get the raise you want.
00;38;08;20 - 00;38;29;19
Derrick Kinney
Dot com. One of the things I want to do is help empower people to not just say, hey, go make more money. We want to help people actually make more money where they're working out or in their business, so that they can then give more, invest more. get the raise you want.com. Also LinkedIn and and Instagram are big, big places where we have a lot of presence as well.
00;38;29;21 - 00;38;47;02
Steven Pesavento
Amazing, amazing. Well, I definitely recommend you guys go buy the book. Good money. Really powerful concepts in there. And I think it can answer this question that I'm about to share. But Derek, for those people who are listening and they're thinking of themselves, man, a lot of this stuff really resonates with me. I want to make some changes.
00;38;47;02 - 00;39;00;04
Steven Pesavento
I want to think like an investor. I want to have a better relationship to money. But I just I aren't taking the action steps. What do you recommend to those people so they can move in the direction of making that change they desire?
00;39;00;07 - 00;39;25;17
Derrick Kinney
Ask yourself one question what is at stake if I don't do it? what's at stake if I don't do it? If I don't make more money or save more money or invest more money now, will it cost the fact that my kid can't walk across the college graduation stage? Well, why not feel the sand scrunch between my toes as I'm chasing my grandkids on the beach?
00;39;25;19 - 00;39;46;24
Derrick Kinney
Or will I not enjoy the flexibility and freedom that I want? What's at stake? You know we can set a goal. I'm a big goal setter, but sometimes we've got to go negative, as crazy as our sounds and say, dude, how will my life be terrible? And other people who I care about their lives really suck if I don't take action today.
00;39;46;27 - 00;39;54;00
Derrick Kinney
So I would just call on ask yourself what's at stake? We only get one life. Let's take action today.
00;39;54;02 - 00;40;10;17
Steven Pesavento
Amazing. Lean into that pain and use it to move you in the direction you want to go. Derek. Kenny. Amazing having you on super grass. I feel like we could go for another couple hours, so maybe we'll have you back on in the future. But, thanks so much for joining us and we'll see you all in the next episode.
00;40;10;20 - 00;40;10;29
Derrick Kinney
Thanks to.