-Was your debt ruined? Were you able to maintain even though you had a lot of debt?
-Debt, that is not something that you want to play with like or mess around with you just... If it's not
something that you've done before like what if you can't pay that back you're in a worse off position?
-So, when you went into business. When you finally decided, "This is it I'm gonna do this", and
maybe this was the website business, that was the first one. You were already in debt at that point,
correct? Did you incur additional debt a star or did you go to happy grandpa who's been paying
for most of your significant life events? How did that look? So, I had that credit card debt
but I did not get business loans or any other debt to kind of move forward. It was I found a way like
a website I don't have to really buy anything. I have to you know $10 domain name or whatnot.
-Yeah, there's no capital overhead or anything like that. -Yeah, so I found a way that I didn't need any
capital. I could just my time, I had to donate my time. Like, I've kind of developed the philosophy
that I think that debt to fund a business is it's pretty risky. You know, if you're
going to get a loan if it's not something that you've done before like what if you can't pay that
back you're in a worse off position? Like the worst-case scenario is pretty awful, right? If I
get a $50,000 loan and my plans don't work. I'm more of the philosophy and recommendation that
you find something that doesn't take a lot of capital and get out there and sell it and make it.
Like you and I could go into we'll just say we could go to dollar tree and find a one-dollar item.
We could grab it off the shelf and we could go door to door selling it. We could find somebody
to pay two dollars for it like there's some things. It's a matter of can you sell? That's
the biggest skill but a lot of people think no what I need is the money. You got to
have money to make money. It's like, no, you've got to have the get-up and go. You've got to have the
drive. You've got to be able to sell. Yeah, that's a good point because obviously there are a lot of
you know tangible product-based businesses that rely on supply chain and all of that stuff
in order to and so hard capital is required to get started. But yeah, how would you... how
how could you go about that? -That's a really good point because for that type of business I can see.
I mean, to go to dollar tree I've got to have a dollar or if I'm going buy a hundred of
them I need a hundred dollars so then I can go. But services are different. -Yes. -A service is your time
and so you can you know in my recommendation it's not selling you know yourself at an hourly
rate. Whether it's fifty dollars an hour or two hundred dollars an hour. My recommendation is
to create an outcome. -Sell the result. -Sell that result that you can get. So, if you're if you're
a therapist and you know a family say a marriage counselor, marriage therapist. Instead of selling
your time by hour, yeah, if you come in we'll do a hundred dollars a session or whatever it is.
If you say you know what? This is the result. You're gonna have this type of relationship. We're gonna
conquer these things and eliminate this in your marriage and add this to it. That's the end result
it's five thousand dollars to get there. It's like. -It's like bidding on a construction project or
any kind of design project or something. You know what I mean? Where it's like this is the result.
This is what I would charge you if this were a satisfactory deliverable.
This is what, this would be worth twenty-five hundred dollars and then competitor B says
I'm bidding it for twenty-one hundred dollars but here's what you would get. I mean, there's
a similar mindset of rather than breaking it all down. -Another thing that I'll do
is I will charge upfront. I have them pay me in advance. So, why would I need debt? If you're
talking about inventory and they do you know big corporations do their net 30, net 90, or whatever.
That is so scary to me. I wouldn't even touch stuff like that like, oh yeah, we'll film
your videos. We'll edit them. We'll put them on Youtube and 60 days after that you can pay.
No, my business would fail. Yeah, i guess a business that knows how to leverage that
oh I'll get a million dollar loan or 10 million dollar loan and if they can make that work
but that's scary. -Well. So, I guess that's for people who maybe are tempted to use
credit cards. You know where it's not an official went to the bank got you know co-signers loan...
But it's saying, I've got a pretty good deal and I need money right away to fund it and I'm
pretty sure I can. If you're talking about I need to spend a hundred bucks to get business cards or
you know miscellaneous things. I don't have time. I don't know how to design a website and I know
I need one so I'm going to spend 500 bucks versus 5,000, right. There can be reasonable expenses where
you know let's just put that on a credit card but you know what the outcome is right if
this business doesn't succeed. Then I've got a two thousand dollar balance on the credit card
or whatever that I've gotta pay off. But in terms of you map out this master business plan
and you're going to get this money part of it's going to go to marketing part of
it's going to go here, you're going to do this on product development, and inventory and all
this stuff. It's like there's so many unknowns. It's not going to go as planned. It will not
go as planned. It won't even go a fraction of the way as planned because there's going to be
every step along the way there's going to be things you've got to learn.
To chance that by debt is just so risky to me. Did you in your experiences, was your debt
ruined? Were you able to maintain even though you had a lot of debt and you were definitely
hand to mouth and that sort of thing? I mean, did you have to repair your credit scores?
I mean, how bad are they? How bad did it get. -I think at one point I was probably
about thirty thousand dollars in debt and that none of that money funded my business. It was
all bought just in stupid decisions as a college student buying the recording gear and buying a
car not realizing that it would be bad to buy it on. You know and expecting to make money from my
sales job and that just over the years I would get some money. I'd have a really good month in my
business or when I was with world financial group and so I'd say, "Oh, I can pay off my credit cards",
thinking that was a smart thing. What I should have done is paid the minimum and put the other
in the bank. But I would pay off the credit cards but then I'd have a rough month and guess what?
I'm back to spending my credit cards again. So.. -Well, it's a vicious cycle. -It really is.
So, debt is not something that you want to play with like or mess around with, you just.
I really had to learn what is good debt and what is bad debt. Good debt makes you money.
Like I have a mortgage on this house, this property. My mortgage payment is drastically
less than the amount of revenue that I have coming in. It's an asset it
makes me money. Any other type of debt if it's a bad debt just don't ever do bad
debt it doesn't make anything. -It doesn't generate anything. -Yeah, what's the point?
-Like maybe there's one way, if you're thinking oh, well, here's a plan I can see. If I got
this loan of ten thousand dollars it would allow me to do this. What if you found another way?
Is there a way of doing it with just 1,000? I bet you could figure it out like I always thought
of this analogy. Is there a sports car you really like? -No. -D you like Ferrari?
-Sure. -Okay. So, let's say you love Ferrari. -Let's say McLaren. -A McLaren okay. So, a McLaren and let's
I'm just going to make up the scenario here. Okay, you love the McLaren but you're living
paycheck to paycheck. You don't have any money in savings and I came to you and I said, "Scott, I have
a brand new Mclaren and I'm gonna sell it to you for twenty thousand dollars", you could find a way
to come up with twenty thousand like the what's the McLaren gonna cost, 250 thousand dollars?
-Yeah. -Because if you came up with the 20,000 you could then sell it. I mean, would it
what if I came down maybe even lower the number? Let's say it's ten thousand dollars? Like you would
just do whatever you could try and make it. We can always figure things out. -Well, I would max
out a credit. I mean, I would get 10 grand off the credit card and then buy it and I'll take it back.
Yeah, it's not going to take you anywhere, happy? Did you go into debt
to marry your wife, to get a ring and all that? -That's why I fell into the trap of
credit cards is because no one actually. -What did she say or think? Did she care either way?