Master Your Finances: Accumulation vs. Preservation Explained Simply

Stephen S. (00:03.483)
Welcome to the show where we interview the nation’s leading real estate entrepreneurs Welcome back if you’re joining us for a second third or hundredth time and welcome to it if this is your first I’m here with my guests today We are gonna be speaking with Jon Schoeller and I’m telling you we are in for an absolute treat We’re gonna talk everything about hard money equity splits Flippin and we’ll see where the conversation takes us. Just remember at investor fuel. We help real estate investors service providers

and real estate entrepreneurs, two to five X their businesses to allow them to build the businesses they’ve always wanted to allow them to live the lives they’ve always dreamed of. That being said, Jon, welcome to the show.

Jon Schoeller (00:42.126)
Appreciate you having me on.

Stephen S. (00:43.797)
Man, super grateful that you took some time out of the day to come on and have a conversation with us and share some valuable insights and some wisdom for our listeners. Just before we kind of get into the meat of everything, tell us a little bit about how you got started in real estate and what ended up getting you to where you’re at now.

Jon Schoeller (01:00.014)
Yes, I’ve been an entrepreneur all my life. Well, not my whole life. I didn’t start as a baby, but about 20, 21, I started my first company and then I kind of graduated into I was I was always buying flipping something right. And that’s not houses and that escalated into real estate into my in young 30s. I’m 38 now. So for about the best decade or so, I’ve been into real estate and started off with

with some partners in Flipping Houses here in Charleston, West Virginia. We’ve done over 300 of those to date, a ton of them. We’re working on probably 25 right now. And then I started lending myself. I own some rentals. I’ve done owner finance. I’ve done wholesaling. I’ve done a lot. I don’t say every strategy because I think we come up with a new one in this industry every other week. But I’ve done a lot of them. I own a midterm rental. I got long term rentals. And so I’m well versed on real estate.

I’ve got my favorites. got my least favorites. And yes, help me reach financial freedom in my early 30s. And now I spend a lot of the time my time traveling the world. Our daughter is six years old. She just went to her 30th country. So we do a lot of traveling. We were just we actually out of the country for nine months. We just got back two weeks ago. And yeah, we also have a YouTube channel that documents our travels as the Scholar family. And we just crossed a million subscribers on that platform. So we stay busy.

Stephen S. (02:22.967)
No kidding. Man, that is incredible. How did you end up finding real estate? Like as a young entrepreneur building businesses in your early 20s, what finally landed you on, man, I should be doing this?

Jon Schoeller (02:24.856)
Yeah.

Jon Schoeller (02:39.096)
So everything every time you research like wealth building like long term wealth building and not only long term wealth building but a safe way to do it or a proven way to do it over the last decades right or not a hundred plus years. It’s real estate. always comes back to real estate. Ninety percent of millionaires are invested in real estate in some way shape or form and I’m actually risk adverse. I don’t like crypto. I don’t like the stock market. I’m in the stock market in my retirement accounts but I’m diversified in my portfolio but I don’t like I don’t like quick movements.

I don’t that’s cool that you can get 300 percent gain in one day, but I don’t like 300 percent losses in one day. So I like to go consistently smoothly and efficiently and I make like to make above average returns and and just keep my money working safely. You know what’s crazy is I’ve been in real estate for this long and I have not lost money on a deal. Now have I lost on a flip? Yes. Inside the businesses we’ve lost on flips. We always pay our investors back and make them whole.

But as far as me myself lending on a deal, have not lost money yet. That day may come, but I think that it has to do with my diligence, my understanding of paperwork, my understanding how to vet people properly, my understanding how to vet the deal. And yeah, just I think that what it comes down to is I just made a reel about this this morning. Most people will never get rich because they’re trying to get rich quick. There is no get rich quick. And because you invest in products and services, not invest.

because you gamble on products and services that tell you that you’re going to get rich quick. You usually lose your money and then you become jaded to the entire thing and then you think this entire industry is a scam. It’s not. It’s because you’re trying to go too fast and so you’re giving the wrong people your money. You’re giving the wrong people your attention and time. This does work. I promise. I’m proof of it. I came from a trailer park and now you know I can make six figures a month passively. And so this is possible.

Stephen S. (04:27.413)
What is, let me ask you this, because I think to your point there, people thinking get rich quick or whatever else, what is the barrier for being rich? Because I think a lot of people that if they just made 20 grand a month, 30 grand a month, they would feel rich. And you and I both have seen how much money is actually out in the world. And that’s not what I would consider rich.

But most people could pretty much live exactly how they wanted to if they did that. like, what do you think, how do you define rich and that get rich quick bug for people?

Jon Schoeller (05:02.808)
So rich is the catch word there or the hype word, but really what we’re looking for what most people are looking for. They may not know it yet as wealth, right? And this is two things in my opinion. This is in my opinion. This is not just money, but time. So you can be rich. You can make $500,000 a year, a million dollars a year and be time poor. That’s not rich to me. If I can’t go to spend time with my wife and daughter, if I can’t go travel where I want, be where I want, find someone somebody else’s schedule, that’s not rich to me.

Stephen S. (05:24.875)
Hmm.

Jon Schoeller (05:32.206)
or wealthy to me. I guess you could call it rich. Also people get into lifestyle creeps. So they might be rich on paper, but they don’t have $500 of their name, right? They couldn’t get cash out if they had to and they couldn’t stop working. They can’t stop working. They built themselves a little rat race. They’re going handcuffed by their high paying job or their sales position. And if they were to stop working today, they wouldn’t make it 30 days before the bills swallowed them up. So I like to live, you know, I like to live

in a way where if I stop working today, I’ll be okay for the rest of my life. Like I could literally shut off this podcast. know I would need to probably lend my money. But I mean, if you want to call that work, that’s fine. I spend less than 15 minutes on a deal, but I don’t need to go anywhere or be anywhere. I can operate from if you give me Internet service, I can operate from Antarctica. Okay. And I think that that is wealth. Like being able to be

Stephen S. (06:06.391)
Mmm.

Jon Schoeller (06:27.274)
independent of other people’s schedules, other people’s restrictions, and just doing what you want when you want within reason.

Stephen S. (06:35.287)
Man, how important is patience in the process?

Jon Schoeller (06:39.47)
So I’m not a patient person actually, but when it came to wealth building, I surprised myself. Like I never went too fast. That’s because my fear of losing money or my fear of getting scammed or my fear of or my risk aversion outpaced my lack of patience. Like it was stronger than my lack of patience. So I’m not a patient individual. I do like to go fast in general, but that I just learned early on that like everybody else watching go fast and go in these directions.

It looked for a second like they were making progress. And then if you zoomed out or just waited six months, you quickly found out they wound up broke again. This is like gambling, right? This is like gamblers on paper look great. Look like they’re doing well, right? They just with their million dollars up at the blackjack table. But if you zoomed out, look at a spreadsheet of the last 12 months, they’re still negative for the year. Right? You got to really zoom out and look at the whole picture. And also do you want to is that is that your risk tolerance? That’s that sends my anxiety through the roof. Here’s another thing I always say.

You’re not making passive income if you can’t sleep at night. I don’t care how much work it’s taking you. If you’re not sleeping, if you’re not comfortable, if your anxiety is not down, like if you’re always worried about your finances, that’s not passive no matter how much you are or not working. Worry is a form of work.

Stephen S. (07:57.174)
mmm worry is a form of work I’ve never heard it put like that but that is incredible I guess I’m working 130 hours a week

Jon Schoeller (08:05.294)
It’s true and most people are. I’m not saying I don’t worry. I’m a high anxiety individual, but I don’t worry about my real estate investments. I don’t worry. So I worry about other random things. yeah, so I got a six year old. Yeah, am I being a good dad? Am I doing the right things? I always have things to worry about, but those are the things you should be worried about. Those are things that should take your focus. Your real estate investments should not be taking a majority of your focus.

Stephen S. (08:14.736)
Right.

Stephen S. (08:19.165)
Same here. My kids, Yeah.

Stephen S. (08:30.593)
Right.

Stephen S. (08:34.911)
Right. Or whether or not you’re going end up making your car payment this month or you know, whatever.

Jon Schoeller (08:39.714)
Yeah, like, yeah. I mean, if you don’t have emergency funding in place, you shouldn’t even be considering doing anything at all investment wise. This is my opinion, right? I don’t know what you guys preach on here, but I’m if you’re high, if this is the order I would go. First, I would put together a budget and be on a strict budget and learn the difference between wants and needs. If you don’t understand the difference between wants and needs, you’re not going to make it very far. You’re going to spend all your money. Then third, start living well below your needs, right? Like

Make more money than you spend. Then fourth, pay off all high interest debt. This is anything in my opinion above 8 % that’s not a mortgage. Okay, so this is anything, especially credit cards and things like that. Card notes above 8%. These things are just killing you. You’re trying to go invest money and make 8 to 10 % while you’re paying 8 to 30 % on bad debt. You’re just working backwards. Paying off debt, in my opinion, is a form of investing. If I can pay off a 30 % credit card debt and save 30%,

There’s not very many places, if any, that you can safely put money and make 30 percent. So pay off the credit card debt and save yourself, invest in yourself. And so once all that debt’s paid off now, also you could probably go either way with this, but a three to six month emergency fund, depending on your employment. If you’re a nurse, have really safe income, really safe job security, three months is probably fine. If you’re an entrepreneur, you might need a year.

Stephen S. (10:04.367)
Yeah, especially if you also are a personally branded entrepreneur, because it takes six to 12 months to change that brand, right? To like really get back to making decent money, you know? And I’ve seen that, you know, play out even in my own life of where, you know, I was a, you know, a roofing guy and then a marketing guy and this and that. And it was because nothing would stick fast enough. But I also still had a family to provide for.

Jon Schoeller (10:12.973)
Yeah.

Stephen S. (10:30.705)
And so I’ve seen that play out of my own life of how important having that fund is. So that way, like in the event something happens, it gives me six months where I cannot make any money while I’m still building that process back up and people are kind of relearning like, what does he actually do? Because you can’t be a roofer, a marketer, a real estate guy and all of the things under the sun. You have to do one thing.

Jon Schoeller (10:52.494)
especially when you’re working on the business. I say this all the time. I work with a lot of general contractors through the flipping. Most general contractors, most contractors are a broken ankle away from bankruptcy. They’re a broken ankle. If you can’t work, you can’t provide for your family. You’re probably not carrying insurance because you’re self-employed and your budget doesn’t afford for a year yet. So most contractors are a broken ankle. Most single business owners or small business owners

Stephen S. (11:05.431)
100%.

Jon Schoeller (11:21.686)
or a broken ankle, one medical emergency away from bankruptcy or that business failing because they don’t have three to six months to rely back on. They don’t have proper insurance in place. They don’t have all these things and it’s tough. Look, I get it. It’s tough, but you should be thinking about these things.

Stephen S. (11:38.423)
Yeah, I’m 100 % with you. with that, didn’t realize we were gonna turn into Dave Ramsey here on the show either. save $1,000, don’t spend more than you have, folks.

Jon Schoeller (11:43.342)
Well, I mean, think it’s important. Yeah. Now, one thing about Dave Ramsey, he’s an anti credit card and I’m not. I’m anti credit card for people who can’t pay it off every month, but I’d love me some credit card points.

Stephen S. (11:58.261)
Yeah, totally with you, man. So tell me a little bit about what, like the transition from, started flipping and then you realized, huh, there’s something to this hard money. And then you started getting into that and then you realized, huh, maybe there’s even more to this than I actually realized that actually could produce freedom. Tell me a little bit about those transitions and what really set it off for you.

Jon Schoeller (12:25.644)
Yeah. So real quick, and I know this is for a lot of people, so I wanted to like put the fine line in the sand here. So there’s hard money and there’s private money. Hard money likes to be private money. I’ve never dealt with hard money and I’m not hard money. I deal with primary, only private money. So in all the 300 plus flips we’ve done, all that’s been raised through private money. These are individuals giving us the money directly. This is not an institution. This is not people borrowing money to give us money. This is coming straight from high net worth individuals or people with savings.

or self-directed IRAs that want to put their money to work in real estate. We take that money. We buy a flip with it. Really, we’re money management and house flipping is how we get the return. But for most people, we take the money, we buy the property, we flip it, we hopefully make a profit, and then we pay the investor a return on their money. And so we were doing this to start flipping the houses. We were borrowing the money to flip the houses. And one day I was sitting there.

And I was like, we were getting ready to buy a flip and I’ll sit on the tailgate with my partners. We just walked through it and we were like, should we send this to Jim? Jim’s his first name. Jim’s one of our biggest investors. And I said, no, I’m going to do it. My partners were like, what? And I was like, I’m tired of watching. I’m going to fund this thing. I’ll fund this thing. I’ll do a one third equity split on it. So whatever we make, I’ll keep a third profit. That’s how we used to fund most of our deals with our investors. Now we do more of a percentage base, but we can get to that later. But I said, I’ll do it. I’ll do one third.

So we bought it. It sold after two and a half months after falling out of contract one time and sending me into a nervous breakdown. But it sold and I think I made fifteen thousand on my 115 in like three-ish months. I don’t have the numbers in front of me, but I made a fantastic return. And then I was like, wait a minute. That was a whole lot easier than a rental. That was a whole lot easier. I was on the flipping side of it too because of the nature of the business I was in. But like if I wasn’t on the flipping side, Jim or other investors, they never even see these deals.

They don’t have to find them, they don’t have to walk them, they don’t have to manage them, they don’t have to put lock boxes on them, they don’t have to put utilities on them, they don’t have to make sure they’re insured, they don’t have to do anything. They don’t even have to walk the property or even see a picture of it if they don’t want to. They have to wire money to our lawyer and then they have to receive the wire back. After you’re established with a borrower lender connection, you can literally have less than five to 10 minutes in a deal.

Stephen S. (14:34.295)
Mm-hmm.

Stephen S. (14:39.062)
Mm.

Jon Schoeller (14:47.406)
Meanwhile, me and my partners are running around the property management, changing out the carpets, changing out the windows. I’m over there messing with the pool boy, right, for four hours. And these are things that you’re going to start off doing. once you get later in life and once you build a considerable net worth, you start to look back and you go, what’s my time worth? Even if I value it at $100 an hour, which I would say is low for most entrepreneurs. If I say I’m worth $100 an hour and I spend four hours with the pool boy,

Stephen S. (15:06.071)
Mm.

Jon Schoeller (15:15.278)
Well, they actually lost, I just lost $400 because nobody’s paying me that. Right? Same thing. If you guys are going over to change your keys at your apartment, that takes an hour round trip. You got to take $100 off your cash flow that month. You won’t. You won’t because you want your numbers to look sexy and you don’t want to count your time. But if we’re counting our time, be honest. Take $100 off your cash flow that month.

Stephen S. (15:19.574)
Right.

Stephen S. (15:31.659)
Right.

Stephen S. (15:38.279)
Right. Yeah, you’re 100 % right. Why do you think that there’s at least something that I’ve seen as kind of a trend is, is you have people that brag about never using their own money and, you know, they supposedly are doing millions of dollars a year, know, whoever it might be, right? No names mentioned. like, but but like, why is it that so many people brag that supposedly you’re doing, you know, a ton of a ton of deals that about how, I’ve never used my own money.

Jon Schoeller (15:53.474)
Yeah.

Stephen S. (16:07.275)
versus like the benefit of if they would use their own money for it.

Jon Schoeller (16:11.554)
Yeah, it is. It’s a little bit of a catch 22 there. So it is possible to do real estate without your own money. All the flips that we’ve done, although I have funded quite a few, we’ve technically done those without any of the own money of the company. We don’t have to put our money in. We raise all the money to do the deals, but we still have overhead and office space and things that we do pay for. So, yes, it is possible to do deals without your own money. Should you go try to do a deal with zero dollars of your own money and be broke? Probably not, because if you get into a bind, you got to pay the investor back.

So you should have access to your own money. And then to your point, well, if you’re making all this money, right, by using other people’s money, eventually you should put your own money to work too. Like what do you, you just letting it set in a bank account and make less than 3 % interest. That sounds dumb. So eventually you should be using your own money too. I love using my own money. I love sending my money out for 15, 25, 35 % interest returns, right? I don’t want my cash sitting in a bank account at Chase. I made that mistake before. I’ve lost.

tens of thousands of dollars thinking just saving my money was a good idea and it was at first, but I could have been invested in a high yield savings account, but I didn’t know what I didn’t know. Right? 5 % on a couple hundred thousand sitting in the bank is considerable amount of money you’re losing. Right? And so we didn’t know what you don’t know. So to your point, yes, leverage other people’s money when you don’t have your money or if you need more money along with your money, but absolutely put your money to work too because that’s the whole job of a steward of your own money.

You need it to be making money too.

Stephen S. (17:38.911)
Right. Now, so with with like to your point there, when you said you should have access to your own money, like to do a flip, like especially if you got in a bind, you got to make your investor whole. Right. Because I think that is kind of the sexy thing people hear is it’s like, I can do real estate with no money and I can do it without my own money or whatever. And so somebody that that comes in that literally has two, three grand set aside that, you know, they’re

paycheck to paycheck in their job, whatever that might be, and they get into a situation where they get into a flip, how much do you think somebody really should have saved that they could lose before they got into a real estate deal to do like a flip versus like a wholesale, which obviously, you know, they don’t have anything to do with the flip process. It’s a little less risk there. But how much do you think somebody should have saved before they start flipping?

Jon Schoeller (18:26.924)
Yeah.

So for the example you gave, that person’s probably just not ready yet. You shouldn’t be borrowing other people’s money unless you know without a doubt you can pay them back. Okay? So we’ve never shorted an investor. Now, if you want a one-third equity split with an investor, sometimes the investor just gets their money back, which sucks because they didn’t make any interest, but they’re always made whole. If you’re listening to this and you ever plan on buying money, the days are gone where the investor loses as well. It is your responsibility.

Stephen S. (18:33.335)
Hmm.

Jon Schoeller (18:56.206)
to vet the deal. It’s your responsibility to make sure it’s profitable. It’s your responsibility to make sure it sells. You’re borrowing somebody else’s money, right? Always pay back to people. Like I always say, be a Lannister, right? Always pay your debts. If you watch Game of Thrones, you’ll get that reference. All right, always pay your debts. yes. So what happens if a deal goes over or if you’re not profitable on the deal and that deal loses 5, 10, 15 grand? How are you going to make the investor whole with the table? You should have some of your own money. Now, do you need

Stephen S. (19:10.209)
for sure.

Jon Schoeller (19:26.318)
I’m not telling you to have 180 grand sitting in the bank and then go borrow 180 grand to do the flip. That’s not what I’m saying. But you should probably have 10, 15, 20 grand in case the deal doesn’t work out and you have to bring some money to the table. The likelihood of you borrowing 180 and the deal worth zero at end of the deal and you have to find a whole 180 is very unlikely. You had to do something really crazy there. But you borrow in 180 and then the deal doesn’t work out and maybe you can only sell it for 172. Can’t happen.

Flips lose money. We just lost 30 grand the other day on a flip. Okay, flips lose money. We’ll lose 42 grand next week on another one. Right? When you do hundreds of these, you lose sometimes. You got to win more than you lose. So I like to bring up my losses more than my wins because I want people to know that’s the reality of this. Where’s the 42 grand coming from? Our pockets. We got to have access to that. So you should either have income or access to capital in case things go bad.

But if things go well, then yes, it’s possible to just leverage other people’s money all the time and keep stacking your own capital so that one day either you don’t have to use OPM, other people’s money, or you can mix it with your money. Right? Or you can take your money and put it elsewhere and keep. So that’s what I do. I’m able to borrow a lot of money now at 10 to 12 percent because people want a safe place to put their money and we have an outstanding track record. They don’t want to go hunt random investors. They don’t want to take the maybe. They just these people are in wealth preservation.

Stephen S. (20:35.852)
Yeah.

Jon Schoeller (20:54.126)
So there’s wealth accumulation and there’s wealth preservation. Accumulation is when you got to take more of a gamble or you want to take more of a gamble or you need your money to the velocity of your money to be faster. You need to make more money faster. You need it to be turning. And there’s some people that have 50 million dollars chilling in the bank and they just need that to make a consistent 10 % and they’re good. Right? 10 % on 50 million is 5 million a year doing nothing. Okay, so there’s people like that. So those people what we call lazy money.

Stephen S. (20:54.359)
Hmm.

Stephen S. (21:14.742)
Yeah.

Stephen S. (21:19.201)
Right.

Jon Schoeller (21:22.946)
You find that money and then you take your money and you put it to get put it somewhere where you can make 15, 20, 25 percent. Maybe with a new borrower or a little bit more risky endeavor or somebody that just a good partnership where you’re getting a third equity split. Right. There’s places you can go find and put your money and they don’t have access to that person.

Stephen S. (21:42.571)
Yeah. So you obviously speak the language like it’s second nature, which comes through a lot of time. But where did you learn all of this? How did you shortcut your learning in the beginning even potentially?

Jon Schoeller (21:53.262)
Allah.

Jon Schoeller (21:57.326)
So I’m not sure if it was a shortcut, but there is a hack. So it did take me time. I mean, I’m years deep now and I do say this about real estate. There is a get rich quick scheme. I think it’s real estate. Most people never get rich quick. So if you get rich in five to ten years, technically you got rich quick. Most people just think get rich quick. They think in months or days or weeks. Leave no leave that alone. But years year to two to five years is possible. And so what I did my hack is I got around people who were actually doing it.

Stephen S. (22:16.801)
Hmm.

Jon Schoeller (22:27.51)
If you are not surrounded with people actually doing the things that you want to accomplish, you are handicapping yourself to an extreme degree. I’m not saying I do not subscribe to you have to leave your old friends and family behind. I’m not saying that, but you got to get new people around you. So if you want to flip houses, how many people do you have right now that you can go meet up with, call, text, email, and talk house flipping with? Are you in part of a community? So I do run a community as well. I won’t pitch it unless you allow me to at the end of the thing. And it’s not the reason I’m on this call.

but I do run a community and I say the value of a community is the education is 40 percent. It’s great that you get education from a community. 60 percent is the network. I want to be surrounded with people doing the things that I’m trying to do and that way if I need money I know where to access it. If I want to win my money I know who to lend it to. If I have a question about a certain deal I know who to bounce the ideas off of. If I have questions about subject two but I’m only really educated on flipping I got someone in my network that I can ask about it. Most of you listening to this

have your same network of friends that you grew up with, and you guys talk football and basketball and drink it on the weekends, or just like, that’s fun. You need that too, that’s life. You should have that balance. But if you’re trying to make money, you need people on your phone that make money.

Stephen S. (23:44.311)
That’s so simple, but so missed by so many people. And I think it’s because we hear the cliches of like birds of a feather flock together or you you are the five people you spend your time around, but like legitimately there is truth to it. But the way you said that was just in such a fresh way. Like you need to have life, but at the same time, like if you want to make money, you got to have people on your phone to make money.

Jon Schoeller (23:47.277)
Yeah.

Jon Schoeller (24:06.894)
The best people are the ones I can talk about, know, LeBron and the Lakers winning last night, but then also follow up that next text of the same person and be like, how’s that flip going? I like that mix, okay? That’s me. But I am actually not the guy that goes to the big real estate meetups. I’m not the guru guy. I don’t subscribe to a lot of the mindsets of the big gurus that some of you may follow. I’ll bring up one, Grant Cardone. I unfollowed him about a year and a half ago. I I personally…

Some of you may love him and I get it. I think in my 20s he served his purpose for me, but he’s also changed a lot in my determination. But I don’t want to be in suits at events all the time and be in these like Hooty Tooty like I don’t I don’t do well in these events. I don’t go to I don’t go to country clubs. I don’t go to look I own a bunch of $30 shirts. I’m sitting in sweatpants right now my car. I just flashed the ECU this morning. It’s a 2008 and I had to get the power steering working again. Okay.

But that’s just me. If you like these things, then follow these people. I just I think that I want people around me that are balanced. I want people that can talk money, talk real estate. But if that’s all they talk, I have those people around me too. But I’m going to get exhausted after a day or two. I’m going to just be absolutely mentally drained and exhausted if all we’re talking about is ROI, financially speaking.

I want to talk other things too and talk life. I want to talk about outer space for a second. I don’t care what we talk about. I just don’t want to be talking about that all the time, but it is okay and healthy to have that as part of your life. And you should because I want those people around me too because look, whether you love or hate money, I suggest you don’t hate it or you’re going to drive it away from you. You don’t have to be obsessed with it. You should just respect it and understand that if you want to live the lifestyle we live and live in America, live in a capitalist society, you need money. You need income.

Stephen S. (25:39.873)
Hmm.

Jon Schoeller (25:58.476)
And if you want to do the things you want to do and have the freedom of your schedule and do the things with the people you love, when you want to do it, you got to have money. And more importantly, passive money. Love it or hate it, either play the game or you can hate the game and complain, you pick. But I’d rather play the game by my rules, in my opinion.

Stephen S. (26:06.359)
Hmm.

Stephen S. (26:20.351)
Yeah. If you had to go back to the beginning, what would you do different and what would you do the same?

Jon Schoeller (26:26.296)
Get around these, get around people. was sitting, was… Quick answer. Get around people that are doing the things I want to do faster. And at the time it was business, so I should have been around more business owners. But what I was doing throughout my entire 20s, talking to the younger audience here, and some of you 30 year olds are still doing this. I was living for Friday, Saturday. Get drunk. Go back. I was running a business at this time, so I was doing a lot of things right now, saving money. But I wasn’t…

I wasn’t escalating myself and I surely was not figuring out private, private money or any type of passive income. I didn’t have any real estate investors in my circle. So maybe on Friday I could go out and party with my friends for that balance. But on Saturday I should have been in a meetup somewhere. I should have been around a community of people that were older than me and more established and more experienced and had the lifestyle that I ultimately wanted. I wanted that back then I was in my 20s. I wanted the Ferraris. I wanted the big house. I wanted all that stuff.

But even then I didn’t have anybody around me with that stuff. Like I wasn’t seeking it out. So how did I what did I think by osmosis? I was going to like just get this information and this knowledge and this in this experience and I was just talking with the same people every day. And so just as soon as possible build up your network. Now there’s there is the quote that you were alluding to these quotes and there was one quote and I changed it a little bit a little bit, but it was your network equals your net worth. I don’t think it equals your net worth.

right? Because you could hang around with five multi billionaires and you’re probably still not going to be a billionaire. Your net worth would climb. But I will say this, your network determines your net worth. So it’s not a one for one, but it absolutely guides your net worth. Like if you hung out with me for three weeks and just took in all the information that I know, you’re probably going to go apply that in some way, or form. I’m not saying perfectly, but your net your income would increase in some way, or form.

Stephen S. (28:02.443)
Mmm.

Jon Schoeller (28:21.038)
This is the investment in the community for me or an investment and a network for me. It just does. It just works that way. You just you go. Oh my gosh. Like the difference between someone knowing between a high yield savings account and not they have a hundred grand sitting in a bank. That’s $5,000 a year just on a difference of a bank account. That’s just one one nugget. Right. And so you don’t know what you don’t know. And it’s not going to just come to you if you’re not reading the books. If you’re not if you’re not watching the podcast if you’re not

Stephen S. (28:40.759)
Right.

Jon Schoeller (28:50.35)
going to the networking events. If you’re not working, it’s not going to just fall in your lap. It’s just not like your YouTube algorithm, your Instagram algorithm, all that determines your network network as well because it’s just flooded with the things that you’re already interested in. That’s what those apps are built for.

Stephen S. (29:06.391)
Right.

Jon Schoeller (29:08.494)
So just like a never ending circle. You’re just feeding yourself this loop of the same information over and over and until you step outside of that, nothing’s going to change. Sorry, I went on a little tangent there, but…

Stephen S. (29:16.727)
Yeah, 100%. You’re good. Say that one thing you said about your network one more time for the people in the back. That was so good.

Jon Schoeller (29:23.278)
So I do not think that your network equals your net worth. That would mean a one to one essentially. But I do think your network determines your net worth. If you hang around with a lot of low net worth individuals or no net worth individuals, there’s a good chance that that’s what yours will reflect. If you hang around a lot of high net worth individuals on a consistent basis, I do think that your net worth will increase. Now from there, some luck comes into play. I never want to dismiss luck. Timing happens, right?

I got really lucky that I ran into the two partners here in West Virginia in my early 30s and they agreed to meet with me. I got really lucky that I found my wife at Beach Week in 2008. Right. And she’s a she’s a great determining factor for my net worth today because she supported me this entire time. It has been our stable income when I didn’t have it. But like that was luck. Right. So luck comes into play. But there is that one quote. I don’t like to do quotes too much, but it’s true. The harder you work, the luckier you get. Right.

The other one was luck. Luck is when preparation meets opportunity. I like that one a lot. So maybe you’re just doing a bunch of education right now and nothing’s happening to you. But when the opportunity comes, you must be prepared because if you do not know how to speak the lingo, if you don’t know how to take advantage of the opportunity, the luck part is not going to happen because you’re not going to know what to do with it. You’re going to fumble it.

Stephen S. (30:22.263)
You bet.

Stephen S. (30:30.241)
Hard work.

Jon Schoeller (30:50.488)
So you should just be educating yourself at least I would say 10 hours a week and that’s not asking a lot 10 hours a week. You know, it’s a two hours give or take a day on a weekday and this could be a mix of things but you should just be like educating yourself on an area that you’re highly interested in and then that way when you meet somebody like say if Stephen has a deal and he starts talking to me and he goes

Hey, I think we can make a 13 % ROI on this. I think the ARV, and he starts using all these lingo. I know what he’s saying. I’m on it. And I can have that conversation and almost that false confidence that most people need in the beginning. I’m not saying lie, but there can be a false confidence about you, which you need to have. Because if Steven starts saying these things to me and I’m like, what’s an ROI? He’s just gonna move on. He doesn’t have time. He’s busy. He’s a real estate investor or whatever the case may be.

I need to be able to hold the conversation and that comes through education.

Stephen S. (31:47.159)
100 % well So so glad we had this conversation today if people want to connect more with you see what you’re working on If your groups a paid group, but I’d ask that you don’t plug it if it’s a free community Then you’re welcome to say that’s a if that’s the best place to community They’re connect with you for more. But where can they go to see what you’re working on and and learn more about you?

Jon Schoeller (32:11.662)
Yeah. So first of all, I don’t like plugging the paid community immediately anyway, because I don’t believe that you should pay for anybody’s paid community until you know what they’re about. Right. That’s that get rich quick thing I’m talking about. So I think you should follow me first for free information. You can follow me on Instagram at The Frugal Investor. I also have a YouTube channel I haven’t posted on in about a year. I’ve about 60,000 subscribers on that and it was growing quickly. But that’s just my name, Jon Schoeller. And I walk through a lot of flips. I talk about some real estate on that as well.

Stephen S. (32:15.969)
For sure.

Stephen S. (32:23.425)
You bet.

Jon Schoeller (32:41.238)
But the Frugal Investor is where I’m most active on Instagram and I give a ton of free knowledge on there. Like and that’s where you should start. So like real quick on that note, and this goes for me or anybody before paying for anybody’s network or thing in which I do think can be worth the investment. Follow them first. Follow them for a little while first. Don’t just let one flashy real or one flashy paid ad trick you into spending 5, 10, 20. Some of these courses are mind boggling.

Mind boggling. We had a person come in our community the other day that spent forty thousand dollars. I think if you get into that territory, you either already need to be making millions of dollars or just take the forty grand and go put it down on a flip and learn that way. Just go put the money in a deal and learn that way. But anyway, follow people first, see what they’re about. And more importantly, I want to see if someone’s staying consistent. This is what I did before I joined communities. Does Stephen talk about real estate consistently for

three, two to three months. Or did Steven hit me with a flashy ad about real estate and then I go to his page and he’s talking about crypto because he’s just trying to make money through core sales. I’m out. I want somebody who’s experienced actually doing it that that’s real, that’s personable, that’s going to show me how to do this because if you’re going to just send me your cookie cutter course, that’s cool. And maybe that is worth a couple hundred bucks at most, maybe 500 to 1000 if it’s a good course and update it.

Stephen S. (33:48.951)
Mm.

Jon Schoeller (34:07.736)
But if you’re just going to send me that, that’s not going to help me answer all my questions and it’s definitely not going to hold me accountable. I want a community around me that asked me, hey, Johnny, you said last week you were going to go walk some flips. Did you do that? Right? Same reason you… Sorry, I know I’m on attention here, but I want to give an example of this and why it’s so important. People, don’t pay for a personal trainer at the gym to show you how to work out. You can get that information anywhere on the internet.

thousands of free workout routines. There’s thousands of diet plans all over the internet for free that you can go follow. And if you’re a self-motivated individual that’s going to go to the gym and follow that, you’re good. You pay for a personal trainer to hold you accountable. That’s pretty much it. Yes, their knowledge as well, right, if they know how to do a certain exercise. But what high net worth people pay personal trainers for sometimes is to make sure they do the thing that they said they’re going to do.

They’re only going to go to the gym. They’re only going to do it if somebody’s holding them accountable. So you’re paying for accountability. This is why also sorry, I can I go one more thing? Are you all right? So a financial advisor. Most of them are most of you do should not be with a financial advisor because they’re taking a percentage of your income, a percentage of your portfolio and that builds in compounds over years. It could be hundreds of thousands of dollars, but there’s a caveat. There’s a caveat to this.

Stephen S. (35:06.465)
Mm.

Stephen S. (35:10.144)
You bet.

Jon Schoeller (35:29.518)
Are you going to invest and keep yourself investing on your own? If you’re not, then you should have a financial advisor to hold you accountable. I would rather them take 5 % 10 % of your entire portfolio, but they actually catch kept you in the market for 30 years. Then you never hiring anybody and not going in the market. I’d rather have basically what I’m saying is I’d rather have 80 or 90 % of 20 of 10 million in 30 years than

100 % of 100 grand because I never invested the money. You see what I’m saying? So a lot of times what you’re paying for is accountability. Anyway, I had to go on that tangent. had to get that off my throat. This is, look, I joined, I just love talking about this. I love teaching others. I’m not getting paid for this. I just enjoy, absolutely enjoy doing it.

Stephen S. (36:16.159)
I love it, man. Well, thanks so much for being here, Jon. Everyone, hope you enjoyed today’s show, and we’ll see you on the next episode.

Jon Schoeller (36:17.824)
Yeah

Jon Schoeller (36:22.638)
Thanks everybody.