Ep429: Justin Weeder – Only Go Into Debt to Buy Assets

Andrew Stotz 00:02
Hello fellow risk takers 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 received the following five free benefits. First, you get the risk reduction checklist I've 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. Fourth, you get access to our Facebook community to get to know our guests and fellow listeners. And finally you get my curated list of the Top 10 episodes. Fellow risk takers This is your worst podcast hosts Andrew Stotz, from a Stotz Academy and I'm here with featured guests, Justin Mark wieder, Justin, are you ready to rock? I'm ready to rock. Let's do it. Let me introduce you to the audience. Justin Mark wieder is a psychology nerd turned sales coach. He's the creator of the listen method for closing sales. And the founder of the covert closer a sales coaching and consulting agency based in Denver, Colorado, Justin teaches his students how to collaborate with their prospects, ditching the high pressure sales terrorist techniques that are popular today. Justin, take a minute in Philly for the tidbits about your life.

Justin Weeder 01:36
Yeah, absolutely. So I live out here in Denver with my wife and two cats, my dog, I started the cover closer, because I felt like I had finally found a way to sell that didn't make me feel like I had to take a shower afterwards. And that seems to be kind of a movement that's growing now, which is awesome. And I'm just, I'm excited to be here, man and share this stuff with you.

Andrew Stotz 01:59
Hmm. Well, you know, part of the reason why I reached out and want to get a person like you on the show is because I need to learn. And I think my audience needs to learn how to better bring our products and services out to the world, you know, and we've got sales teams, we are salespeople ourselves, we have everybody that ultimately is selling, you know, themselves in a sense. And I'm just curious for, let's say, the listeners out there that are interested in how they can up their sales game. Just tell us the type of client that you serve, you know, and that kind of how that works. And then after that, I'll ask you just give us some tips. But let's just talk about the typical kind of client that comes to you and what it looks like.

Justin Weeder 02:38
Yeah, of course. So clients usually come to me have a service based business. And their notice their sales team is only closing about 20% of their opportunities, which according to a lot of data across sales. orgs really, actually from Salesforce 20% is the number of deals that are going to close just by you showing up and showing what you got and running into somebody that really needs it. So I help them train their team to close deals and double that conversion sometimes triple it. But without like bringing in some of those Grant Cardone ish sales bro tacking techniques that people really can't latch on to anyway.

Andrew Stotz 03:19
It's amazing that those types of high pressure techniques like are still being used out there. kind of curious. I mean, there's still a huge volume of people that say it's about the volume of calls and the power, then the energy and the demanding and commanding that you're bringing to the situation, why do they even still exist? I wonder do people like to get those calls?

Justin Weeder 03:43
Well, I feel like people don't like to get those calls. But I don't know how into psychology you are. But you know, if you've ever heard of the disc, personality profile, you know, you have the dominant types to 25% of the population. Those guys always find their way into sales. Right? And when it's natural, it works when it's when it's consistent with who someone really is. It works, because that's just who they are. It's not problem, right? But, you know, you try to take someone who's not dominant, or is just lower on that scale, and teach them those same techniques, and it doesn't work.

Andrew Stotz 04:20
Interesting, so you get no people success. And I guess that for dominant type, I am actually a high D type and a high I in the disc breakdown. But, um, for the what what that just makes me think is that actually for most of us, we probably pitch the way we are rather than the way the customer would prefer us to pitch and in fact, I teach a course on how to give great presentations and I I asked my students right from beginning to take a little test on whether your left brain or right brain. Yeah, the reliability of these types of tests are questionable, but it gives you a little indication Are you more likely You go left brain or, as I call romantic, right brain. And then once I do that, then I say okay, so that, for me, I'm 86%, logical left. That means if without thinking about it, all my presentations are going to be logical. So what I tried to teach in the class is that you need to tell stories, because that appeals to more of the romantic, right and Brain, Brain people in the audience. And so you can't just pitch to people, you know, the way you are, you're the pitch the way they are. And maybe that's why a lot of people just go out and they just pitch, you know, their sales is all about the way they are not necessarily the way the client is.

Justin Weeder 05:46
Totally, right. totally right. I mean, empathy, in general is lacking. And that's actually a big part of what I teach my students is something called the empathy equation, which is simple, three questions you ask, and you can fully understand where someone's coming from. But if you don't know what those questions are, you've never been taught that, which is another other problem. Most people think that sales is an art that you should just be able to get on the phone and be persuasive. Right. But it's, it is an art, but it's also science, like you were saying, it's a mix, right? Yep. And if these folks are just kind of flying by the seat of their pants, some of them are going to be good, and some of them aren't, and they're not gonna understand why. And that's why you want me to process right, like, you step A through Z, you don't go from, you know, just any alphabet letters that you want, whatever area you have to go order of operations. And if you approach sales like that, it becomes very repeatable. And then if something breaks, you can look at your equation and go, where did this break, and then you fix that, just that one piece, and then the whole thing runs a lot smoother.

Andrew Stotz 06:49
It reminds me of that the book called the game. never hear that book. The Underground by Neil Strauss. Yeah. See her secret underground world of pickup artists. And what I realized, once you read that book, you realize these guys have the same pitch. They're doing every single woman that they come to, and they're just perfecting that pitch. And that process they have literally, yeah, they're practicing that. And I was like, Oh, my God, how many times have I gone up to someone that I wanted to talk to, let's say a woman as an example. And I'm fumbling and stumbling about what I'm going to say I'm trying to say something smart, these guys have already thought it all out the whole process, and they're just executing that 100 times. And I just like, so maybe that's part of the key is having, you know, and when we started this podcast, and you and I were talking before I turn on the recorder, you know, we were talking about how I was structure, maybe, maybe I'm actually good at structure, and I should be doing more. Yeah. When it comes to the selling process.

Justin Weeder 07:50
Yeah, yeah. I mean, structure allows for freedom, in my opinion, right? Because that's the only way you can truly iterate and know what works and what doesn't. Otherwise, you're just flying by the your gut. And for some people, that works, right. But those are kind of the savant level people that are at the top of the curve. Not everybody can be there, and they're trying to be something they can't be right. So when you add a structure into it, then you know exactly where you're at all the time. And you need to flourish a little you can, if you need to be more strict, you can do that, too.

Andrew Stotz 08:24
So what's, what's the best way for people to reach you if they're interested in your method and learning more?

Justin Weeder 08:31
Yeah. So I would say hit me up on Facebook, I'm Justin, mark on Facebook. But you can also go to my website, and you can get a free guide to the method that walks you through creating your own response, like, Hey, what's your number one objection, you write that down, I'm gonna walk you through each step to create that response, like you were just talking about, right? If you have the whole thing mapped out, you can't go wrong, because you know, where you're at the whole time. Right? Um, you know, it makes me think of Napoleon. Right? Napoleon was supposedly a great general, he was a great general, but the reason why is because he thought of every contingency. So he's never surprised, right? Love him or hate him. I mean, he was never he took over entire Empire. He was never surprised because he'd already thought it up.

Andrew Stotz 09:12
Yeah. Okay. So I think we all got to go check out the website. And also we'll have links in the show notes. So for any of you that want to learn more, just come to the show notes and click the links and you can go there. Well, that was a great introduction to what you do. And I think you've given us some good tips. So now it's time to share your worst investment ever. And since no one ever goes into their worst investment thinking it will be tell us a bit about the circumstances leading up to the intelligent your story.

Justin Weeder 09:39
Yeah, of course. So this was a few years ago, I was working in finance, and I was making the most money I've ever made, right? Maybe the year before that. I've just broken six figures and now it was in the multiple six figures. And that kind of ramp up in money definitely changed my lifestyle a lot. I've got a new car and I was getting promoted. And it was just, I mean, life was good. And we were making a ton of money. One day, a coworker of mine goes, Hey, I just sold this house, or I just bought this house. But I think I'm going to flip it like, do you want to buy a house? And I was like, No, I'm good. And actually blew him off. Right, which was Thank God. That's not the story, though. I tricked you. But so I blew him off. But it got me thinking, like, Man, what if I could buy a house, right? Like, I've always wanted to right now the house we live in is like falling apart. We were renting it. And we were also like, subleasing it from my mom, which is, which was the landlord did not know about. And that made my girlfriend, my wife now, but girlfriend at the time made her really nervous, because she's like, What if something happens, like we're not, we're not tied to this house at all. And it was falling apart, we always had to go through, like my mom to get to the landlord, because he didn't even know that we were living there. And she had moved out. So anyways, we wanted to get out of that house. So we started looking at houses. And you know, everybody's telling us Oh, the bidding is in because we live in Denver, right? And so if you didn't come with a lot of cash, basically what our realtor told us was, you don't come with all the cash, dude, like, you're just gonna have to find a house and take what you get. You know, because it's like, everybody's out bidding each other. And even if the houses aren't appraising, they're still out bidding, because the inventory so low. And so then we're suddenly my wife, we're like, well, maybe we shouldn't buy a house, let's just, you know, let's just stack our cash and wait. Until one day, we got this wonderful idea while we're out driving on a Sunday afternoon, after eating brunch. And we drove past a Richmond Holmes side. And it's like, brand new homes from, you know, from the three hundreds or whatever, there's the inventory. There's the inventory, right? So like, okay, let's, let's pull in there. So we go, we pull in there. And we looked at this house, I think we signed the paperwork that day. Like we looked at the model, and it was beautiful, man, like, we were like, this is incredible. And we just, we couldn't even believe it. And then we like optioned it out. And it came up to, you know, just shy of half a million dollars. And we're like, doing the math of like, what the mortgage would look like. And it's like, okay, yeah, we can totally afford this is totally fine. Right. So we pulled the trigger, like then in there, you know, guy one call close. But it was awesome, was a great experience. That sales guy was super professional. I'm very picky like that, like I won't, I won't deal with a salesperson who's not a professional. So anyways, the guy that you

Andrew Stotz 12:30
are primed and ready, though you've been thinking about it for why Oh,

Justin Weeder 12:34
yeah, that's right. Yeah. And we'd already kind of tried and got told no, but now this roller coaster. So we were stoked, really excited, like picked up a lot. Everything. And then they went through and, and they built this house over the next nine months. And it was awesome. Like we would show up, we probably were going to the build, like once or twice a week. And then towards the end, it was like three or four times a week pretty much every day we just you obviously the house is only like 20 minutes away from the

13:01
Select, like we're walking in there like a picnic

Andrew Stotz 13:03
out in the front. We all the garbages and they're throwing away all this stuff. And you have a leg of the picnic lunch with some tea and yet, okay.

Justin Weeder 13:12
Like no joke, literally describing we've got some food one day after they poured our back patio. And we wouldn't got some food from like a Wendy's or something, went out there and just sat there and ate it just talking about the backyard and

Andrew Stotz 13:23
watch the cement dry.

Justin Weeder 13:25
Yeah, it was just some enjoy was the most interesting thing in the world does. So, uh, yeah. And then everything went off without a hitch like the house was built. We got the mortgage, we signed for it, we moved in. And at the time, we had just spent the last like, six or seven months not buying anything for ourselves, because we didn't want to waste any money. We wanted to pay down debt before moving to the house, right. And so we actually got all of our debt paid off before we moved in, it was one of the conditions of our mortgage. And but what we did is we went and spent open a bunch of credit cards, and spent a bunch of money filling this 4000 square foot house with all the stuff we didn't have, like furniture and dishes and light fixtures and getting at, you know, $25,000 landscape job in the backyard and all you know, basically all the associated costs, right? And we thought was great. And it was great. It was great for the first six months. And don't get me wrong, the house is beautiful. And it was just I just felt this creeping suspicion that something was wrong. And I couldn't get over. It was like I was walking around. I felt like a zombie. You know, like, I just had this massive anxiety and then around that time I started my business, right? And I started going through and learning all these things from gurus. Right. And gurus in their programs also teach you about money, right? And they go credit card debts very bad doesn't matter if it's on 0% or not, it's very bad. And I'm starting to see all these things I didn't pay off, because the other thing that happened was they changed my job. So I had risen to a director level position at this company. And six months after we moved into our house, they came to us and said, Hey, we're gonna change your pay, which is within there, right? And I've met Adam, that's within there, right? But I looked at the pay plan. And I said, this is not gonna work for me. I mean, if you make these adjustments, it'll work for me. And they just couldn't do it, you know, that business is business, right? So I had to step down from that management position and be back on the phone. And it took me a couple months to get ramped up. And so during this time, I'm starting to see these credit cards, no interest expense, time expiring, and they haven't been paid off. And, and I'm learning about money, too, because now I grew up, really, I grew up poor, like, my mom was a single mom, God bless her. She raised me did a good job, I think, hopefully. And, you know, but she didn't know anything about money, either. She never had a credit card until I was already out of the house, right? And then then school, they don't teach you that stuff. So I just I just didn't, I didn't know I figured, well, they're giving me the credit. I can afford it. It's fine. I'll pay it off. You know, like, I'm making an adult in a month, right? It's what adults do. America is founded on debt, right. But I just didn't know how it all worked. But like, America's debt is obviously different than personal debt. I just didn't know that. And so I just and I justified it to myself. And so as I start learning, it's like this way to start, like, just crushing down on me, man. And I start thinking all the time, and like, I look around at our habits, and I'm like, dude, we're just using the same room. We have a four bedroom house, and no kids, we don't plan on having kids for a while. Why don't we have this four bedroom house dude with like, a full back yard and two spaces, and two home theaters and a basement that's unfinished and like, and then that, that summer, after I started realizing all that stuff, our sprinkler system had to be fixed. And I was like, you know, a major expense. I don't remember how much but I was really upset about that. Because it was right outside of warranty. And I'm just looking around, and I'm learning about it going, man, if I lose my job, for sure, for sure. Or something happens, like we're screwed up, and we have this $3,000 mortgage, like, what are we doing? Why are we doing this, we could be investing this money. We should have stayed where we paying 900 bucks before she just got over it. Right? And it was so scary. And I was just depressed all the time. So that affected work that affected me trying to start this business and affected my relationship to me, my wife was like, what's wrong with you? And I was just like, Who's stressed out? You know? And then when you're stressed? The spending, you think makes you feel better? Yeah, just keep buying more stuff. And that's what I did. I just kept buying more stuff. And you know, like, I bought, I'm not I don't regret it, but I bought 1000s of dollars for the books, you know, and I bought for my

Andrew Stotz 18:03
bookshelves,

Justin Weeder 18:05
then you need bookshelves. Yeah, exactly. You know, I bought recording equipment for my business, you know, coaching programs, I just was spending spending, spending spending. And it I just kept the whole kept getting bigger. The more I spent the hole bigger the hole gotten, it was just like, What is happening here? I

Andrew Stotz 18:22
was just I was really depressed. Honestly, what was the bottom? Like, what was the moment where you kind of realize you were at the bottom.

Justin Weeder 18:31
So we ended up and I'm going to, I'll fast forward because that's a whole other story. But we ended up selling the house and moving to Minnesota to kind of chase an opportunity to work at a startup that ended up not working out very well we move back. And it wasn't until we move back. That we were sitting there looking at our finances, and we really pulled everything together and looked at the numbers and we were like, this has got to stop. You know that? Like we can't keep doing this where we are. We're never gonna get out. You know, and we need to make the lifestyle changes today, right now. And it was a tough conversation because both of us we got emotional and we wanted to blame the other person and it's not gonna help us get through this right? want someone to blame. And so in our typical we're family fashion, we banded together we figured it out. And you know, we're moving in the positive direction also.

Andrew Stotz 19:29
Hmm. So tell me what lessons did you learn from this experience?

Justin Weeder 19:35
Yeah, well, I learned that you should use debt to buy assets, not to buy shiny stuff. And on a deeper level, I learned that you can't ever be happy with something else. You got to be happy with yourself. The only happiness you can ever experience comes from inside you. A car might make you temporarily excited, but it's not gonna make you happy. You know, a fast computer might make you more efficient at work. Breakfast not gonna make you happy that happiness has got to come inside. And when you have that feeling, then you don't have anything to lose. And then all of a sudden everything becomes easy.

Andrew Stotz 20:10
Yeah. Wow. So maybe I'll I wrote down some things as you were talking that I maybe I'll share kind of what I was thinking about it, you know, one of the things about debt. And as a financial analyst looking at companies, I would say the number one risk factor that any company faces is debt. Because with debt, a bank can force you into bankruptcy, basically. And if you were to run your business with no debt, you're not gonna have as much money to grow your business. But nobody can force you in a good example right now is my, one of my businesses with my best friend Dale here in Thailand is a factory, a coffee factory, and we've existed for 25 years. And generally, we don't have much debt. We're completely financed by ourselves. So the end result of that is that when the crisis came, we immediately reviewed our debt and tried to pay back everything we could that wouldn't, you know, that would cause us trouble. And then that way, we can go through a lot of difficulty, we can go through negative cash flow periods of time. But the point is, nobody can shut us down. Yeah, that is the freedom of debt. But also I can see, after analyzing 1000s of companies over 30 years, it's the number one risk that causes a company to have to go through an emergency. There's some other risks, like, you know, the concentration of your customers, there's other risks, like foreign exchange risk and stuff. But that, to me, is number one number. Second thing is that I thought about is the idea of keeping costs low. And you know, I just love the word frugal, it's such a great word, and frugal, basically, meaning, you know, to be very, very careful about your spending. And I, the way I approached that concept, when I was young, is that my goal was to live deeply below my income, live at a level that is deeply below my income. Now, the best way to do that is increase your income, by the way, hardest way to do that, but the hardest way to do that is just cut your costs. Yeah, so I did both. And you know, but I can say, the funner way, the more fun way is to make more money and just keep your costs where they are. And I can remember here in Thailand, a friend of mine work for the Ministry of Finance, and he and I were good friends for years. And, but he's like, man, gotta stop walking around Bangkok with a backpack and driving a Toyota. And you don't have any watches on and you don't have anything, you know, you got to you got to live up to your class, man. And I was like, now I'm okay with it as it is, you know, I think I'm, I have, I'm happy with how my bank account looks, you know? Yeah. Oh, yeah, I just the second thing is, the first thing is debt is just the most dangerous thing. The second thing is keeping your costs really low, I have a course called How to start building your wealth investing in the stock market. And in this podcast, I also talk about create, grow and protect wealth. And basically, there's kind of two main ways that we can create wealth. The one is that we have our own business. When you're a business owner, hopefully your company is making profit, and that's generating wealth for you and your family and your other shareholders. But the other way that you can create wealth is if you were making $100,000 a year in a job, and you were able to, let's just say you spent 90,000. Okay, you're creating wealth of 10,000 in that month. But if you could get that 90,000 down to let's say, 60,000, now you're generating, you're creating wealth of that, you know, 40,000. So the point is, is that, you know, let's look at it. Yeah. So there are, I used to only talk about the one way which was to do business, but come on that majority, people aren't going to do that. So take pride in living deeply below your means. And you will be creating wealth every single month. And I think that that also, I learned a lesson from a great book called The six month fix, and it was about how to turn around a business. And he said, the only thing you can control right now are your costs. That's true. Yep. And you can have a dream about the products you're going to get out and you're going to do all that and the customers yet, but that's you don't have control of that right now. Yeah, so and then the third thing I just thought I'd mention is just, you know, you You said something like in you said, get, you know, go into debt to buy assets. And I just thought I would just explain, you know, what is an asset. An asset is something that you purchase, that you expect to bring you future economic benefit. And it may be an asset that can make you more productive. So that assets not necessarily bringing you cash, but it's helping you generate more cash and therefore For a brings you economic benefit. Or it could be an asset could be buying a house that you rent out as an example. And that asset is bringing you cash every month from the rent that someone's paying. But I think it's an important distinction to distinguish what is an asset versus an expense. expense is all the different stuff that we buy for consumption purposes. And that's like that bookshelf that we talked about, you know, that you may have to buy because you bought all the books. In a sense, it's an asset, but it's not really going to bring you additional much value in it may fall in value, you know, pretty quickly. So I think that the importance of understanding the debt, the thing about living deeply below your means, and then the idea of what is an asset, anything you would add to that?

Justin Weeder 25:47
I know, I think you nailed it. I mean, definitely way more succinctly than I could have for sure. But you're absolutely right. You know, debt is just, it's, it's so scary. And once you realize what it really means it's,

Andrew Stotz 25:58
you know, well, you know, you're not alone. There's millions of people in America and around the world that have been accumulating debt, particularly during this time, where, you know, it's such a difficult time. So let me put this in context. And the next question, I'm going to ask you, I want to think about that young man or woman who is either starting to get themselves into debt, starting to overextend themselves or already kind of in it a bit. So based upon what you learn from this story, what you continue to learn what what action would you recommend our listeners take to avoid suffering the same fate?

Justin Weeder 26:33
Yeah, I would say, get educated on how money works, and do your best to understand compound interest.

Andrew Stotz 26:44
Hmm, great advice. And I one thing about compound interest, and most people do not understand, but since I'm a finance guy, I understand. We see the concept of finance of compound interest is basically if you if you, if you let's just say you put money into the bank, $100 or whatever, it's going to earn interest and that interest is going to earn interest. And that's going to compound over time, and then it will have an exponential rise in your 30, year 40, year 50. So the first element we have to know about compound interest is that the impact of it, the substantial impact of it doesn't happen until year 20, or 30. That's the first thing about compound interest in most people don't realize you have to keep money. The second thing that most people don't realize, they think about, oh, I'm gonna have passive income, because as I build up my money, I'm gonna, you know, it's going to be I'm going to be receiving money every month from my, from my wealth, right? No, no, no, that's actually not the case. The assumption, when you calculate compound interest, you are assuming that every single bit of cash flow and gain that you receive is reinvested. Yeah, you can never take anything out of it, or you will end up with a linear rather than exponential line. And that's a second thing that a lot of people don't realize is it? So two things. Number one, you've got to keep it in for a long time. And the second thing is every single bit of income that comes from it, you cannot take it out and do a vacation getaway or whatever, you've just destroyed the compounding element.

Justin Weeder 28:16
It's so true, because it takes that time. And you know, God, even if it's just a little bit of money, it still helps. Like you just can't, what we started doing. Can I share one more thing? Yeah. Well we started doing in this household, is we calculate the compound interest of what's something that we want to buy? So we say what's the real cost of that? Right? If it's a $500? PlayStation, okay, cool. $500 compounded over 30 years is more like 20 grand or something? No, I'm not gonna buy a $20,000. PlayStation. I'll put the $500 in my account.

Andrew Stotz 28:47
Yep. Yep. That's a great way to do it. Well, last question, what's your number one goal for the next 12 months?

Justin Weeder 28:53
Yeah, my number one goal is actually to get completely out of credit card debt. So we will, in the next 12 months, no matter what, we will have zero revolving debt.

Andrew Stotz 29:03
Fantastic. That's exciting. By the way, your advice, I just thought that actually you just gave a second piece of very good advice, and that is to calculate the compound value compounded value of something that you want to buy. And for the listeners out there, you can do that in Excel as an example, you can do that on a calculator. You just say, you know, one, plus whatever interest rate is raised to the number of years and then you multiply that times the value. And then that is such a great and powerful tool. So I think that I want to make sure we get that as the second piece of advice that you gave. Well, for sure, I totally broke a rule I'm sorry. No, no, that's a good one. No, that's valuable. Alright 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, my listener, reduce risk and increase return in your life. To achieve this, I've created our community at my worst investment ever.com. And I look forward to seeing you there. As we conclude, Justin, I want to thank you again for coming on the show and on behalf of East Arts 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?

Justin Weeder 30:21
I would just say you know, thank you very much for listening and keep an eye on that spending and don't do credit cards.

Andrew Stotz 30:29
Boom. Oh, that's a wrap on another great story to help us create, grow. And as we just learned from Justin protect our well fellow risk takers. This is your worst podcast hose Andrew Stotz saying. I'll see you on the upside.