Entrepreneurship: Endgame

DK Episode 8 - July 21, 2019 - Duration: 26:54

Drawk Kwast explains entrepreneur endgame to those who are ready for it.

Video 3 of a 3 part series on Entrepreneurship:

Entrepreneurship Part 1: Getting Started
Entrepreneurship Part 2: The Pivot
Entrepreneurship Part 3: Endgame

Transcript

0:00:10.0 Drawk Kwast: This video isn't for everybody. Now, if listening to that you got a little smirk on your face and said, "Oh, Oh, I know what he's doing. He's starting the video off by telling people that the video isn't for them, which will make them want it more." [laughter] Well, if you had that response, this video is probably for you. Let me explain. The content that I'm about to give you here was originally intended to be kept private for my Total Experience Immersion clients. These are men who paid for consulting and training services from me. They know all my tricks. [laughter] It was actually though, in talking to one of these guys about the content in this video, where he suggested, "You know what, there's gonna be guys that know this shit, that learned it from somewhere else," fair enough, "That would be able to use the information in this video." So, I'm publishing it for everybody.

0:01:30.3 DK: But here's the thing. This video is only intended for two people, the two types of people that can benefit from the information. These people are Total Experience Immersion graduates, and people that are entrepreneurs, that are already making on their own independently $10,000 per month gross. That's who this video is for. Now, if that is not you, I've got something for everyone. [chuckle] As PT Barnum used to say, right? If that's not you yet, that's fine. I'm gonna give you some instructions. Start at the beginning, you'll eventually make it back here. You can look online for my other videos. They're all free. If you want more, you can go over to amazon.com and type in my first name into a search, D-R-A-W-K, and you'll see my books. Those are great places to start. Start there. Build up your arsenal. Come back here in a few years once you've got it. Okay.

0:02:55.3 DK: What I'm gonna tell you right now, it's gonna be hard for me to get through this video, and let me explain why. I specialize in going from zero to something. That's what I do. I start off with nothing, and I build something out of it. That's my skill. I'm a fire starter. There is a fatal flaw to fire starters, and that is what this video is about. This video is to take you to the edge of my competence, and to show you how you can go forward from there. A good teacher will teach you what he knows, but he'll be real honest with you about what he doesn't know. And no bullshit, this is the edge of what I know. So the fatal flaw that these fire starters have, me, my friends, were summed up [chuckle] in this brilliant statement. I didn't come up with this. I just laughed my ass off the first time somebody used it to describe me.

0:04:27.7 DK: What they said was, people watch in absolute horror as me and my friends jump out of an airplane without a parachute totally unprepared, as we tell people, "Don't worry, we'll build a parachute on the way down," and somehow survive. The people that are incredibly competent, or incredibly lucky, or incredibly rich, this extreme, we don't plan for rainy days. We don't plan for next year. We're so good in the moment that we think we'll always be able to pull it off in the moment. But sooner or later, you've lived long enough to find out that that isn't true. And if you don't know what I'm about to tell you, you're gonna go from zero to something and back down to zero again. Now, true, you'll be able to go back from zero to something again a little quicker than you did the first time, but you're gonna continue this cycle. Here's how you break out of it.

0:05:58.4 DK: Okay. We already covered that you've got a successful business. This is not about stabilizing your first business. You already know how to do that. If you have a stable business, you should be pulling in at least $10,000 a month gross. Hopefully it's a low overhead business and most of that goes to your pocket. Now, if you're not there yet, and you're like $9000 or something like that, and you're one of my Total Experience Immersion graduates, that's okay, keep listening. This little bit will get you there, and here's what this little bit is to bridge that. I've done the math, I've seen the statistics. Once people know what they're doing, which is you guys, the difference between success and failure is such a thin sliver that if you're stuck in a rut, you can literally put 10% more effort in in the right place, and you'll get out of that rut and you'll plow forward, you'll be at that $10,000 a month, very quickly. You don't need to double your efforts, you don't need to get up at 4:00 in the morning, unless you were already getting up at like 5:00 in the morning, then there's your extra hour a day, right? Just a little bit more time, a little bit more effort in the right place and you'll get there.

0:07:35.8 DK: Okay. So if you're there, let's talk about this whole parachute thing, you went from nothing to something. You're a fucking entrepreneurial superstar. Most people can't make something out of nothing, most people specialize in making nothing out of something. [laughter] You need a little bit of a contingency plan here, and here's what I mean by this, how many entrepreneurs do you know that make lots of money and spend every single penny of it every month? They are so confident in their ability to make the same amount of money next month that they are ill-prepared when either the rules of the game change, which they always are, or somebody out there inversely as stupid as they are smart fucks all their shit up. Maybe it's a dumb employee that gets you sued, and that's it, and you're done. You need to understand that businesses are like people, they are either growing and expanding and we have a plan and we're moving forward or we're dying, and this is the missing piece for those Total Experience Immersion graduates.

0:09:07.1 DK: If you hit a number and you're happy there, you need to go past it, or you're not gonna be there for very long. You're either going to grow or you're gonna die. So, if you're not quite pulling in the 10K per month, take the advice of putting in a little extra 10% more time, money, focus, whatever in the right spot. You already know where this is, you just need to put in the effort and get there. Once you get there, here's the thing, it's not about one business, it's not about two businesses, it's about building a fucking empire and having a legacy. If you put all of your marbles in one bag and somebody sets that bag on fire, you're fucked and you're back to zero. That's not how we play the game once we know how to play the game. If you haven't heard this before, this is gonna freak you out a little bit. The number seven, that's the number of businesses or projects on average that is a successful entrepreneur has. Why?

0:10:36.3 DK: Well, there's a little psychology I could explain about that magic number seven, it's actually seven to nine, but we'll keep it easy, seven. [chuckle] And have that conversation another day. My Total Experience Immersion clients, they remember this, that magic seven and nine thing of what your brain can handle. Okay. So, if you have one business, you need to start your next one, and once you start that one, you need to start your next one and your next and your next and your next. And the whole time you're doing it, you still have to have your original business growing. Now, I realize most of you are going, "son of a bitch, I can barely handle one." Yeah, well, it's time to take your game up. You will be amazed that when you push yourself a little bit more, you learn that there are resources there that you didn't even think you had. What you remember is that your first business was a fucking pain in the ass.

0:11:40.2 DK: Yeah, you had no idea what you were doing. Congratulations on the luck to make it to where you did. Because believe me, there was some luck involved there on top of all the perseverance and pushing, pushing, pushing, pushing, pushing, pushing forward. So, the second one is easier. And when you learn how to manage two at the same time, something magical happens. Going from one to two is difficult, not as difficult to starting the first one, but it's difficult to go to two. But once you go to two, you'll realize that the third is easier and it keeps on getting easier, because the more you do it, the more practice you get, the smarter you get, the more you know how to set things up, you understand the psychology of your employees or your contractors. So you know how to set the boundaries that they can kinda mostly be on their own. Why? Again, because if you just have one business and it's not growing, it's dying. And even if it is growing, something can happen and knock that out. So you need multiple businesses, about seven of them.

0:12:54.4 DK: How do you come up with the business ideas for this? If you watched my last video about the pivot, you already understand the basics of this. Let's say that you're in the oil business, and you're constantly complaining about the quality of oil barrels. This is like the pivot. Well, wait, why don't you take what you know from the industry and build a better oil barrel? It's like a pivot, but you're staying in both places. So, you get into another business now making oil barrels and maybe that business works, maybe it doesn't. Maybe it takes you a couple of tries to get your second business, but once you figure it out, once you get things generally under control, maybe you start bitching about the people that are delivering the barrels. "These transportation people. Oh, they're terrible, they're always late, and sometimes I get the wrong number of barrels." You say, "You know what? Let me try delivering my own barrels."

0:14:16.2 DK: Okay, you give it a try just with yourself. You start delivering your own barrels and you do this like a real business, separate from your other business, meaning one business builds the other business for services that it's providing. You make it work for yourself. "Always eat your own dog food," you've heard me say that many times. You always use what your businesses produce. You are the customer, so you understand the customer's experience, and you know what to do to keep the customer happy. That's how you start building multiple businesses. And that way, when something happens to one of your businesses, the others are there to fall on. And after you've done that pivot thing a couple of times, start to pivot further and further away from your first business. See, your first business, you happened to pick something and you made it work and you went with that. Your second business was something very close to that, but if your third, fourth and fifth business are all in that exact same industry, if something happens to that industry, you're fucked. So you need to start pivoting into other industries with what you know.

0:15:41.5 DK: And by the way, I'm not saying that this is gonna happen in a month. This is kind of my last video for you, Total Experience Immersion guys. This is my parting advice to you. This is what you may do for the rest of your life. You may be 80 years old before you start your fourth business. I don't know. I don't know how long this is gonna take you, I don't know how good you are. [laughter] Here's the next thing that you need to know. You need to type this into a search engine, 'cash flow insurance'. Cash flow insurance. I'm gonna tell you what this is, because I wanna open your eyes to what the ultra-rich are doing. The ones who generation after generation build more and more wealth for their family. It's simple. They are the bank. Am I telling you to start a bank? Fuck, no. [laughter] I'm telling you that you wanna be the bank for you, and your friends, and your family, and your businesses.

0:17:13.3 DK: Super, super briefly, because this is outside of my specialty. Again, my specialty is from zero to something. Once you've got something, this type of adventure kicks in. Here's how this works briefly. You take out a whole life insurance policy. It's gonna take you a couple of years to be able to pay into that policy before you can take a loan against the policy. This sounds crazy. Why would you wanna take loans out against a whole life insurance policy? Briefly let me explain. When you put your money in the right type of whole life insurance policy, you're going to get paid about 4% plus per year on that policy. It's like a savings account, only it makes way more, usually somewhere around like 5.5%.

0:18:24.9 DK: Okay, so great, you have a savings account, basically, with a good interest rate. Well, there's a lot more to it. There are tax benefits to this, there are legal benefits. Like in most states, if you get sued personally, they can't touch that. But here's what you can do with it. Once you've paid into it enough, you then can take out a loan against it. Now, I said, "Being your own bank," and that's exactly what I mean. There is no credit check, none of that bullshit. You're loaning yourself money. And when you loan it to yourself, you're still maintaining all the interest, because it's not borrowed from the account, it's borrowed against the account. Are you with me so far? So here's how this works, let's say normally that you would take out a car loan and that car loan would normally pay so much money to the bank, right? You're paying for the points on the loan, you're paying for the loan. Well, now you're the bank, so you borrow against your whole life insurance policy.

0:19:56.2 DK: Now, the life insurance company, they actually don't give a shit, which is why this is so easy, because if you don't put the money back, they don't pay that when the benefit comes around, so they're covered either way. They don't care. And instead of paying a bank interest, you're still getting the high interest against the principal, and if you wanna pretend in your head that you're borrowing this from a bank when you pay your loan back to yourself, you can add a couple of percentage points on it, if you want, just like what the bank would get, but only now it's going to you. This is how the rich fund stuff, this is how the rich go multi-generational. You wanna fuck around with credit cards and stuff like that, there are times to do that, you wanna fuck around with home loans, there are times to do that, but once you've got a solid core business, you find someone that is a certified cashflow insurance specialist, and they gotta be good at this, and you have them structure something like this.

0:21:17.0 DK: You start paying into it. You over-fund that fucker. And in a couple of years, you'll have a nest egg there that you can actually borrow against to start your business, but instead of borrowing and owing interest on the loan, you're actually getting paid interest on the loan. So, this is the top of the mountain stuff. And I'm not a specialist at that. I don't claim to be, that's not what I teach. I teach a zero to something, I'll get you to your first million basically. [chuckle] Once you're there, you're kinda on your own. So that's the thing. That's the advice. So if you were one of my Total Experience Immersion clients, and you got the link to this video going, "Holy shit, I have no idea what I'm in for now, what's this crazy fuck gonna put me through after all the shit he put me through." No, it's just this video, this is it, this is the rest of what I know. This is once you hit a million dollars, time to move on and make more money.

0:22:33.2 DK: So, what are you gonna do? You're gonna research cashflow insurance, find somebody that's certified in it. It's time to start being totally above board with your bookkeeper if you haven't been. [chuckle] And it's time to grow up as an entrepreneur. You're a mature entrepreneur now, set that up, start paying into it. Start working on your next business, self-fund yourself, do not pay percentage points to a bank when you can be the bank. Realize that your businesses are either gonna grow or they're gonna die. Things are gonna come out of left field. You need multiple businesses in multiple industries. If you're a Total Experience Immersion client, you know if you're ready for this, and this is what I'm gonna leave you with. There is a thrill that we get as Fire Starters, making something out of nothing. And at some point, your achievement just doesn't seem worth it. It's like you got there, but you're not as happy as you thought you'd be.

0:24:01.5 DK: It's because you're a fire starter, you're not a manager. Hire a manager, you're a fire starter. Go start another business. So, if you're still in the beginning stages and you wake up every morning going, "Aaah ... I don't know how I'm gonna hold it together, shit, I will... Aaah." Then probably not there yet. And to give you an example, an extreme example of what I'm talking about, I'm not gonna use his real name, but we'll say, we know a guy, [chuckle] from Orange County, he had a very, very large business with lots of employees. One month he had enough money to pay half of them. You know what he did? He had one choice, and it was a gamble, literally. He took the money that he had about half of what he needed to pay all of his employees to Vegas. He found a place that would let him put it down and on a roulette spin. He got it right.

0:25:10.2 DK: He had about 50-50 odds. Not quite. And he managed to make his money, he managed to pay off his employees, he got lucky, could've went the other way. So if that's where you're at, where you're still doing things like that, you're not there yet. But if your business is matured and you're starting to get kind of bored and annoyed with it, you're not a manager, hire a manager, you're a fire starter. Start another business. That's all I got. Keep on starting businesses, and after the first one, you self-fund everything with cashflow insurance. Later on, the person that put that together for you, he'll tell you about awesome things like building family trusts, and how to ensure that when your kids come into your money, that it doesn't destroy them, and how to make rules for the generations after you. So that your kids and your grandkids and their kids don't blow through the family fortune, so it continues to grow. That's all I got. And when you get there, I expect at least a phone call.

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