Ep401: Dean Brown – Don’t Hand Money Over Just Because You Trust a Friend

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Quick take

BIO: As a father of five, Dean Brown empowers professional dads to work fewer hours per week while generating more revenue and having more fun while doing it.

STORY: Dean had just lost a high-income job when his friend approached him with an investment idea. The friend wanted him to finance his business idea and get a return on it. Because he trusted his friend and was looking for investment opportunities, Dean gave him $150,000. He’s never received a penny from the business.

LEARNING: Do not hand your money to anyone without a legal contract. First, understand the investment and the risk involved. Don’t be the sole financier of an investment.


“Get lawyers involved, don’t just hand money over to anyone, even for a friendship.”

 Dean Brown


Guest profile

As a father of five, Dean Brown empowers professional dads to work fewer hours per week while generating more revenue and having more fun while doing it.

Working with Dean, they will learn to face their suppressed emotions, limiting beliefs, self-denial, and self-sabotage to better embrace life without guilt, anger, fear, or hate while manifesting their highest vision of peace, love, and profit with their family and in their business.

Worst investment ever

Dean had always been an employee, even though he often toyed with the idea of becoming a businessman. He was an outstanding employee who quickly rose to the top in every job he ever had.

Getting thrown into the deep end

It was not until he lost his most prolific job, where he earned over $100,000 a year in 2008, that he had to start learning how to build a business. He now had to think of the best ways to invest under these circumstances.

An investment idea from his trusted friend

Dean had this good friend who had a great vision and worked on it for a very long time. His enthusiasm was deep and engaging. Dean had a lot of faith and trust in what his friend was doing.

One day Dean’s friend asked him to help him take this idea to the next level. He had developed a one-of-a-kind invention and now needed to manufacture it. However, he needed cash to do it.

Giving his friend money, no questions asked

Dean had some money to invest, and because he trusted his friend, he gave him $150,000 there and then. He transferred the money into his friend’s account, and they agreed that Dean would get a return on the investment, and then they shook on it. That was eight years ago. Dean is yet to see a penny.

Lessons learned

Always have a contract, even where it involves friends

Get a lawyer to write a contract for you before you hand anyone money—including your friends.

Understand the investment and the risks involved

Before you spend any money, be aware of what you’re investing in. Make sure there is an agreement stipulating what you will gain from the investment.

Andrew’s takeaways

A good investment starts with trust

Trust is vital when it comes to investing. Before you give your money to anyone, make sure that you can trust them. Once you build trust, take the next step and evaluate if the idea is good. If the idea is good and you have trust, then now you can execute the idea.

Don’t be the sole financier of an investment

Avoid investments where you’re the only one providing the capital. Be sure that the business has sustainable finances before you get in.

Actionable advice

Don’t take people’s advice at face value, even if they are your friends. Cross your T’s, dot your I’s, and do your research before deciding to invest.

No. 1 goal for the next 12 months

Dean’s number one goal for the next 12 months is to help people get to that place where they do not make mistakes, as he did. And also, they’re able to make a positive impact in their business and family lives.

Parting words


“Don’t spank yourself or grief over the losses. Instead, celebrate the wins and move forward.”

Dean Brown


Read full transcript

Andrew Stotz 00:01
Hello fellow risk taker and welcome to my worst investment ever stories of loss to keep you winning. In our community. We know that to win in investing, you must take risk, but to win big, you've got to reduce it. To join our community go to my worst investment ever.com and receive these five free benefits first, you get the risk reduction checklist I created from the lessons I've learned from all my guests. Second, you get my weekly email to help you increase your investment return. Third, you get a 25% discount on all a Stotz Academy courses for you get access to our Facebook community to get to know guests and fellow listeners. And finally you get my curated list of the Top 10 podcast episodes. Fellow risk takers, this is your worst podcast host Andrew Stotz from a Stotz Academy, and I'm here with featured guest, Coach Dean Brown. Dean, are you ready to rock? I am ready to rock, turn it up, give us an 11 on the volume button. 11 on the volume we are doing it? Well, I want to introduce you to the world. So one moment, let me pull up your Wow. Wow. As a father of five, Dean empowers professional dads to work fewer hours per week, while generating more revenue and having more fun while doing working with Dean. They will learn to face their suppressed emotions, limiting beliefs, self denial, and self sabotage, to veteran brace life without guilt, anger, fear or hate, while manifesting their highest vision of peace, love and profit with their family. And in their business. Being take a minute and filming for the tidbits about your life

Dean Brown 01:49
come from a background of a small town boy growing up in Northern Ontario. My dad was the Mary own the largest business. He was in World War Two fighter pilot veteran. And he was so successful in that small town that he actually loaned more money than the bank. And that was one of those things where he was a very powerful man. And he tried to essentially force me to be the same kind of powerful men. And it forced me to become a warrior because the thing that I remember the most that was most impactful was going home one day when I was about 12 or 13, after having been beaten up by three boys, three local native boys. And when I approached my father to say that I just got beat up by three boys, he beat me because there was only three. And that set the tone, for aggression, for manipulation for a warrior mentality that did not allow for feeling emotions, that put me into a place where everything I gained I gained through aggression, manipulation, and you know, actually making people hurt to get there. I learned some big lessons doing that. And I've come a long way, in the opposite direction since then.

Andrew Stotz 02:58
Knowing that story really makes you know what I read about you come to life, you know, I think about suppressed emotions, self denial, self sabotage. And you talked about guilt, and fear. And then you flip the coin. And you talked about peace, love, and profit. And you talked about family. So really interested to learn more about you, I appreciate you sharing that story. Damn, well, I want to learn more. So now it's time to share your worst investment ever. And since no one ever goes into their worst investment thing he will be tell us a bit about the circumstances leading up to it, then tell us your story.

Dean Brown 03:42
So there was a time when I was deciding that I was going to be a businessman as opposed as opposed to an employee. For the longest time, I was always an employee, I always rose to the top quickly in every job that I ever had. And I lost my most prolific job at over $100,000 a year running printing presses making Sears catalogs that might remind you as to quite you know, that dates me a little bit. And that happened in 2008. And from there, it was time to start learning how to build a business, learning how to invest learning the best ways to invest and under these circumstances to share how not to invest. So I have a friend, and we're still friends, believe it or not. And he had a great vision and had been working on it for far longer than I had as far as building a business goal. So I had a lot of faith and trust in what he was doing. His enthusiasm was deep and engaging and like being around that, you know, you've kind of are invested in it, so to speak. And he wanted me to help him at a particular level. To build his business to the next level. He needed a cash flow investment to help him get to a place where he could actually manufacture a particular machine. That would I don't want to say any names. I Don't want to give anything away. But he was he needed to get some plastic molding done. Some some research turned into actual, you know, development of this particular invention of his, which is one of a kind. And I had some money to invest. So we were, of course, at my kitchen table, we were talking, this guy's a friend of mine has been for some time. So I trusted him. And I said, Okay, fair enough, here's $150,000. And I just at the table and transferred it into his bank with a handshake with an understanding that there would be a return on that investment. That was eight years ago, I haven't seen a penny. So there is your worst investment I've ever heard as far as my life is concerned. And I did mention that we're still friends, and we are still friends, because he has not turned away and he has not ran away. He's still working on the business. But COVID has turned a massive twist into everybody's plans. And his business is essentially one on one training with individuals that has been, of course, quite restricted. So the machine that he created, is sitting there gathering dust and unable to be used and unable to be promoted. Because even if it were promoted, the people that would buy it wouldn't also be able to use it. So there has been no sales, there's been no revenue, and there has been no advancing. There you have it.

Andrew Stotz 06:25
And was there a point in time where you kind of realize, I don't think I'm ever gonna see this again?

Dean Brown 06:31
Yeah, they're sure what it was when he actually reached out to me again, and asked for more money, and even asked me to help him market his product, now I was willing to market his product with him or for him. And when he did not follow my instructions, that's when I realized that this was pretty much a wash and there was gonna be no, if there was going to be any revenue, it would be just to support himself, not to repay the loan. If you were to do some math, that's it's well past $150,000. Now that he owes me, we still communicate, he's still struggling, he's actually living in his truck at this time. So it's not one of those where he's, you know, had the greatest of fortune. And as a friend that I respected before and respect his path, his journey, his belief in himself. I still hold that friendship, dear. I'm just able to distance myself from the investment and just say, Okay, I guess that's gone. Mm hmm.

Andrew Stotz 07:31
And can you tell me what did you learn from this experience,

Dean Brown 07:35
write a contract. Get lawyers involved, don't just hand money over just because you feel trust or feel an affinity or a friendship, or that this is a good idea. I'm doing the air quotes thing here. Be aware of what you're spending what you're expecting back and write a contract and make sure that there's some form of reimbursement, some form of

Andrew Stotz 08:01
great advice, I, I just, I wrote down the name of friend of mine as my notes as you were talking, so maybe I'll summarize what I took away from it. Basically, I've had pretty much the same situation, I had a very good friend, and we're still friends, who had what I consider to be a pretty good idea. And, and we decided to embark on it, and I was pretty much funding it, and he was executing it. And it took some turns along the way. And, you know, went this way, in that way. But he stayed working on it. And never, I never felt like he was, you know, ripping me off or anything. But it just said, you know, we kept just going into different directions, and then it would get straight, and then it would go and it would start going better. But then, and then we hired someone he hired someone that you know, came in and that cause more cost to go out. And then after that that guy kind of wanted to take the business in a certain direction. And he had a lot of very good ideas, too. And so the three of us were, you know, they were running the business, and I was basically financing it. And then there just came a point where I said, Look, we have to monetize this. And we have, you know, three months to do it. I said, and I'm not going to fund it beyond that. And yeah, when the three months came, I said, we have to sit down and I had to say, you know, I have to pull the plug. And you know, what I learned from that was I always say, you know, first it starts with trust. never invest in someone you don't trust. If you've got trust, you can go to the next step, which is idea is the idea good. You have trust, but the idea is bad. There's no point. But if you have trust in the ideas good Yeah, you go to the next step. And the next step is execution. What I really realized deeper as I got deeper in his and he was going to have a hard time executing this. Because it brings me so you've got you know, trust you got a good idea but if you don't have execution, can't do it. And then the last one For me, the last one is capital. If you're the only provider of capital, then you know, it's just not a real business. So you got to have trust, gotta have a good idea. You got to be comfortable that they can execute. And you've got to make sure that there's capital there otherwise, you know, you just end up being in a corner. That's, you've reminded me and I have to say, coach, Dean, you're coaching me right now, I want to tell you that that was my worst investment ever. And I lost considerably more than what you lost in that one. And it was very painful. And we're still friends, I don't think I'll ever get anything back from it. And But yeah, I can relate to your story 100%.

Dean Brown 10:40
And it's amazing how I mean, the simple fact that you can relate means there's far more than two guys, Andrew and Dean out there that have gone through this. So I'm hoping that your listeners can hear this before they falter and end up soaking up a ton of money into something that isn't worth their investment.

Andrew Stotz 11:00
So then, in order to serve those listeners, I'm going to ask you this question. And I know you've already said, you know, write a contract. And that may be the answer to this. But I want you to think, for that person that's faced with the same situation, based upon what you learn from this story and what you continue to learn what one action would you recommend our listeners take to avoid suffering the same fate?

Dean Brown 11:21
I'm thinking more and more market research, I was going by the word of his experience, because I had none. And I did not delve into any market research whatsoever. I just took his word for it, and my trust with him as a friend. I've since learned, cross your T's dot your i's and do some research.

Andrew Stotz 11:48
Great advice. Last question, what's your number one goal for the next 12 months.

Dean Brown 11:52
My number one goal for the next 12 months is to help people get to that place where not only do they not make mistakes like I made, but they're able to make positive impact in their business and their family life. Because in 2020, and well into 2021, we've seen a massive impact around the world with respect to revenue opportunities, and home life challenges. And there's a paradigm shift going on around the world. And my my goal, my mission, my purpose, we didn't delve into the fact that I'm a two time suicide attempt survivor. So there's a lot of power involved in what I do and why I do it. And it's divine inspiration that got me there. I made the mistakes I made for a reason, so that I don't make them again, and I can teach other people not to make them before they do rather than after. So I have a great, powerful mission to help dads, businessman experts, be in that place where they work less, earn more, and have time for family

Andrew Stotz 12:53
that we have, we have another thing in common. And at my young age, I went through a couple suicide attempts and through addiction and all that Luckily, I made it through so well. Yeah, it's great to talk to you and listeners, there you have it another story of loss to keep you winning. My number one goal for the next 12 months is to help you mind Listen, reduce risk and increase return in your life. To achieve this, I've created our community and my worst investment ever.com and I look forward to seeing you there. As we conclude, Dean, I want to thank you again for coming on the show. And on behalf of a Stotz Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Dean Brown 13:43
Yes, indeed. I do. Thank you. So don't spank yourself, celebrate the wins and don't reward when the losses move forward.

Andrew Stotz 13:52
And that's a wrap on another great story to help us create, grow and protect our well fellow risk takers. This is your words podcast host Andrew Stotz saying. I'll see you on the upside.


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About the show & host, Andrew Stotz

Welcome to My Worst Investment Ever podcast hosted by Your Worst Podcast Host, Andrew Stotz, where you will hear stories of loss to keep you winning. In our community, we know that to win in investing you must take the risk, but to win big, you’ve got to reduce it.

Your Worst Podcast Host, Andrew Stotz, Ph.D., CFA, is also the CEO of A. Stotz Investment Research and A. Stotz Academy, which helps people create, grow, measure, and protect their wealth.

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