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Show Summary
In this conversation, Garrett Gunderson discusses the myths surrounding money and investing, emphasizing the importance of understanding one’s relationship with money. He explores the trauma responses that can affect investors, the significance of financial education, and the lessons learned from market fluctuations, particularly during the 2008 crisis. Gunderson highlights the need for investors to identify their unique styles and avoid the pitfalls of speculation and hype. He advocates for long-term investment strategies and the importance of investing in personal skills and knowledge. The discussion concludes with insights into new projects aimed at providing financial services to a broader audience.
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Investor Fuel Show Transcript:
Garrett (00:00)
Pure luck,luck and timing. And I thought I was amazing. I thought I was a genius, man. I was a little financial Einstein, not true.
I started buying so much real estate, something I wasn’t even going to see. And I got a little bit over leveraged, a little bit over my skis because I just thought if one is good,
109 is better.
2008 taught me that, you know, anyone can make money on the way up, but it takes real like knowledge to make money on the way down.
Dylan Silver (01:55)
Hey folks, welcome back to the show. Today’s guest, Garrett Gunderson, has been jokingly called Money Jesus, not only because of the hair and beard, but because he has a gift for liberating people from the myths that quietly harm their relationship with money. For decades, he’s helped entrepreneurs question the stories they were told about hustle, sacrifice, and delay, and replaced them with something more honest and sustainable. He’s the author of 10 books, including multiple Wall Street Journal bestsellers, with Killing Sacred Cows reaching number one in making the New York Times bestsellers list.His work is about restoring clarity, freedom, and creating a life that actually feels worth living, one that you don’t want to retire from. To make money more fun and easy, he even filmed a comedy special that you can find on Amazon Prime called The American Ream. You can find him online at garrattgunderson.com. Garrett, thanks for taking the time today.
Garrett (02:45)
Thanks for having me, Dylan. Look forward to this.Dylan Silver (02:48)
Now, when we talk about people’s relationship with money, you might assume, and I think falsely assume, that everyone who is a real estate investor has got their ducks in a row with money. But as someone who’s worked with real estate investors and has a realtor myself, of course that’s not the case, right?Garrett (03:06)
Yeah, man, mean, look, a lot of times we have like, feel like investors and entrepreneurs, it’s like a trauma response. We’re trying to prove something. We’re trying to get somewhere. And sometimes people end up spending optimism, like, that deal is going to close. This is always going to cashflow. And so they get excited and they spend the money before it comes in. And then they find themselves stressed and scrambling. And that’s where they get into the hustle. And so, yeah, we all have this relationship to money, but is it a healthy one? Is it an asset and an ally?Or is it kind of like an enemy because it’s like too unstable?
Dylan Silver (03:39)
The trauma response of the investor, I like that term. I’ve certainly seen a lot of that. And what’s interesting about the on-ramp to real estate investing is you can get started with sometimes nothing. So I’ve seen people firsthand go from ⁓ literally living out of their car to then being direct hard money lenders within a period of years. And you’re like, that’s insane. How does that happen? It happens within the context of real estate.but you still might have some of those old habits, right? Especially if you weren’t taught and who is taught the right relationship with money? I think hardly anybody.
Garrett (05:05)
People are always saying like, don’t they teach this in school? I’m like, because teachers feel underpaid. They’re on a fixed income. They’re in a fairly socialistic system. You don’t want to them teaching your kids about money. They already are tied up teaching about math and science and so many other topics. How are they going to add one more thing? And you know, the economist wrote an article that it didn’t show that teaching kids about money in school actually helped them out in life. Because again, if there’s misinformation or myths, that’s part of the problem.I feel like my journey with money kind of began because I won $5,000 when I was a kid. I was a teenager and I won the Young Entrepreneur of the Year for the state of Utah while I was still in high school. And I got this $5,000. was like, man, I want to invest this. But my mom was like, you’re not 18. I’m not signing off. You’ll go blow that money and waste it. And the first really good investment I ever did was when I was 19 years old. I was my second year at university and I was like, you know what? I want to buy a property. I want to buy something and rent it out to other roommates.
So because I was so young, got a Champlone. My mom had to cosign, but it meant I had no down payment. The Champlone was a down payment. It was under $100,000 for this townhome. It was a really nice townhome, by the way. It had three bedrooms. had a two and a half bath. was two levels. It was pretty nice. I went and took a picture of it just like a year or two ago when I was down at the university for something. And I was like, this is kind of cool. Now got lucky, unfortunately, because I sold it for $170,000.
a year or two after I graduated. So I had it for the three years I was there. Then my, you know, now wife, but was dating her. She moved in and I actually moved into her parents basement when I was just a right out of school. And then my second deal was my brother-in-law was in real estate. like, Hey dude, you got 25 grand. I’m like, yeah. He’s like, well, if you give it to me, I’ll give you about 50 grand three months from now. Cause I just need it for some earnest money. So my second real estate deal, basically made 400%. The first deal, no money down. made 70 grand.
The third deal, my buddy’s like, hey dude, I heard you get into real estate. I got a friend that’s late and delinquent on his house. Like if you could buy it, I got him a job. He can start making payments, but he’s got a lot of equity. And when he can refinance, he’ll split the equity with you. So my third deal, no money down on that deal, $90,000 I walked away with. I thought, dude, I am a genius. So
I started buying so much real estate, something I wasn’t even going to see. And I got a little bit over leveraged, a little bit over my skis because I just thought if one is good,
109 is better.
So I think that the education for the person is essential. You got to know your investor DNA and there’s a hundred different types of real estate, a thousand different types of real estate. Get really good in that one lane. if I would have just stuck to single family, I was crushing in that. It’s when I was like, oh, I should get in the commercial. Oh, I’m going to do some picks and flips. I just got where it was like overwhelming amount of stuff.
Dylan Silver (07:52)
You you mentioned ⁓ really almost shocking returns on those first few deals in a relatively short time frame.Garrett (08:01)
Pure luck,luck and timing. And I thought I was amazing. I thought I was a genius, man. I was a little financial Einstein, not true.
Dylan Silver (08:09)
People oftentimes get caught up in the opposite of that as well. They may have a flip that goes wrong and now they’re saying, I’m never gonna do a flip again. That might be true for some people, right? But on the other hand, these are things that you do have to be able to identify if you’re buying at the right time.you know, a couple of years ago, and I’d say even still right now, it’s not the easiest time to be a flipper, right? When there’s so much new construction happening. Do you think that when you were getting in, there were any, you know, market conditions that were specific to them that really helped those deals?
Garrett (08:43)
Yeah, just the fact that, you know, I bought that property in 1997 and then we started to see, you know, a nice little increase in property values, especially in that area as it started to grow. And then, you know, just the next deal was in Vegas and that place was really growing at the time. I mean, property values were increasing. You had to even buy a house. You had to go into a lottery, which was, I thought, very ironic and fitting for Vegas.because there were so many people moving in and the property buys. And then you had investors coming in just buying and then trying to hold onto it for six months and sell it. So it was like the market timing was perfect. Not because I knew it was good timing. I just happened to be born at that time. And that’s the time I got into real estate.
2008 taught me that, you know, anyone can make money on the way up, but it takes real like knowledge to make money on the way down.
And some people make a killing on the way down, but you have to have a completely different set of skills and knowledge and understanding.
Dylan Silver (09:42)
Yeah, I feel like those people who actually, which is hardly anybody, made it through 2008 and to 2012 and 2014 where you started to see that the upswing, those are some really savvy operators who are sitting on, I would, I guess, a large amount of savings to get through those years. And there’s a lot of people who didn’t make it through that time period who were rolling high beforehand, who had every luxury that they could have imagined and boom, it’s gone.Garrett (10:46)
Right, I remember like in 2006, I had clients that were buying stuff on their home equity line of credit because the money was going up so fast. I’m like, no, you didn’t buy an asset. You bought a car. That’s not going up in value. Like what you still owe that money to the bank. Or I knew people that were buying homes and then refinancing them and saying, dude, I just made 300 grand on my home. I’m like, have a $300,000 additional loan on that refinance. Like, yes, that’s money that’s attached to the home, but you haven’t sold the home.So it’s actually a loan. Like people just didn’t recognize like it was it was like just it was like funny money. It’s like it was too easy. Like you know.
Dylan Silver (11:24)
thehundred thousand that you’re going to spend on, you who knows what, right? Because you can spend it on anything, right? I was just having this conversation actually today with ⁓ a lender who was talking about, you know, are there any stipulations for certain things? You could pocket that money. You can of course roll it in another real estate, which might be advisable, but you can pocket it too. And so when people start to go off the rails, when you’ve made it
some money and you start to not necessarily do any one thing wrong, but it could be a number of things. Are there any common themes that you see folks messing up?
Garrett (12:02)
Yeah, one of the things is they’ll get really good at something and then try something they’re not so good at instead of continue with the thing that really works for them. Another another issue is like people just borrow to consume or they’ll borrow to speculate like crypto is a perfect example. Someone’s like, man, this I’m working hard to find the right real estate deal and get the right vendors in there. And it’s taken all this work and my buddy, he just made more money than me because he bought this meme coin. But the thing is, you have an asset, they have a story.And that story goes away and you still have brick and mortar and you have a capital gain asset that has tax advantages that can cash flow. And so there’s a lot of advantage there versus just buying something that’s built on hype. And so I think that it’s, you, can you not get seduced by these stories that aren’t real? So many people have more money by literally just putting it in the bank because they get seduced in some of the craziest things. mean, look at how seductive gold and silver was recently, because gold had this huge spike, silver had a spike, but this happened to silver before.
One major player sells it off and it dips super quick. So I think the key is the wealthiest people. Like if we look at Warren Buffett, he says, everyone would become a much better investor. If I said you could only make 20 lifetime investments, you get really selective that people, instead of diversifying, they diversify, they spread themselves thin, they get into things they don’t understand and focus is what really creates wealth. Diversification preserves wealth.
So when you’re on the way up, if you diversify early, you actually don’t create the growth that’s possible and you have more things that can go wrong. So it’s almost like you’re raising the white flag. You’re like, I don’t really know what I’m doing. I’m going to buy something over here and something over there. That fragmented type of advice doesn’t get you there. And I’ve had people say, well, Warren Buffett, he said he talks about like compound interest is this great thing. No, he doesn’t use compound interest. He buys companies that are stocks. He buys the controlling share of Geico. He buys out, sees candy completely.
And then he puts a methodology in those companies based upon who he is. He doesn’t get seduced by the dot com dot bomb era. He doesn’t get seduced by crypto. He sticks to what he knows. I call that investor DNA. What are your core values? What are the things you deem important that you want to pay attention to? What are your core competencies? What do you have skills that you’re willing to work on and learn and grow in? And then what are your core drivers, the things that you want to learn about, the things that you want to experience? And then you focus to get that wealth because risk isn’t in the investment.
Risk is in you, the investor. So some people are great at real estate, others aren’t, because some are going to seminars, some are analyzing things, some are looking at deal flows, some say no to deals, others go, this looks good and I’ve heard real estate’s good. They’re not good investors. You’ve got to become a good investor.
Dylan Silver (14:41)
Yeah, and it’s I’ve had many people on the show and outside of the show, talk to me about what makes someone, you know, a good fit for a certain type of investing, let’s say, you know, short term rentals, right? If you’re a short term rental investor, it’s not just, hey, does this deal underwrite? It’s also do you enjoy constant communication and changeovers? Because if you don’t, and you let’s say, take your foot off the gas for two, you know, bookings,Now your account is tanked because you got some bad reviews and no one’s booking and you’re like, I can’t be a short term investor any longer.
Garrett (15:15)
Yeah, my wife and I when we had our first house, we decided we’re gonna move. We’re like, you know what? Why don’t we Airbnb this thing? It’s such a nice house. But then we had to provide furniture for it because we were moving and taking the furniture we liked. And after a few weeks, she’s like, I hate this. There’s so many interactions I have to deal with so many people is like, she’s like, some people are just looky lose. And they’re asking all these questions. She’s like, I don’t want to do it anymore. And then we just turned it into a rental. And then it was easy. You know, so yeah, it depends on like, who are you? What do like to do?Dylan Silver (16:24)
The thing that I see most, and you mentioned it earlier, is that scope creep, right? Like, hey, I’m gonna do this because I see this right now and this looks easy, or I hear people making great money. And oftentimes, it’s funny how this works, you start to hear about these things when it’s like right at the peak. And so if you’re getting in right at the peak, if you’re a multifamily syndicator in 2021, right, you’re like, this is amazing, I’m just gonna buy this property, it’s gonna appreciate that, you know, no vacancies, know, things can happen, right?Garrett (16:54)
Yeah, there’s a there’s a story of JP Morgan. And he was like going out to the get his vehicle in the valet gives him a stock tip. And he’s like, it’s time to sell his like now you’re getting stock tips from the valet. This thing’s overvalued, you know, like just and that’s the thing. That’s that hype cycle. Right. I mean, when all of sudden and I feel like honestly, I feel like the hype cycle is intentional.Dylan Silver (17:11)
andGarrett (17:19)
I feel like companies that are going public create a hype cycle. try to, they buy, they, know, they pay for the PR, they get everyone talking about them. So you go, I’ve to get in on this. And it doesn’t do as like, think about how many IPOs fizzled. They were big talk and like WeWork was one of the most famous ones that completely fell apart because it was so fabricated, but everyone was like, this is a great company. You know, look what happened to Uber with that. Look at, know, there’s a Facebook when it actually did IPO.was didn’t do well for a long time because there was so much hype around it that it’s this artificial belief. And by the way, stocks are just supply and demand. It’s just, are you willing to pay for it? And if you’re willing to pay for it, the price keeps going up. And if people aren’t willing to pay for it, the price goes down. It’s supply and demand. That’s why a company like way back in the day, like Enron was worth a hundred dollars a share one day and the next day it’s worth zero. Cause as soon as they found out there was fraud, they’re like, wait, we bought into something that wasn’t real.
And how often are people just buying into a story because they read about it, they heard about it, people are talking about it. And with social media, that feels crypto so big, right? Like there’s times in social media, like this thing’s going to 3 million. And if you’re not in, you’re an idiot. How could you be so stupid? And people will go like, I don’t want to miss out. And that FOMO kicks in. I mean, the thing that moves the market up and down is fear and greed. And people know how to play on that. And the media is one of the biggest culprits of it. And people that might not have your best interests at heart.
Dylan Silver (18:22)
Yeah.Garrett (18:40)
are telling you something and they’re doing something different and that’s the issue. That’s why look for long-term more stable assets. Look for things that grow and appreciate but also create cash flow. Look for things that create tax advantages. Look for like more three-dimensional investments and that’s why the masses are told, just buy an index fund and wait for 30 years. Dave Ramsey says if you invest $100 a month for 40 years, you can be a millionaire. The truth is only if it’s the best market of all time because the last 40 years includes the 90s whichpushed it from a 10 % return to 12.7 % return. At 10%, it doesn’t come close to a million. And by the way, by the time we consider inflation, inflation cuts it in half. Actually, the million dollar one for 40 years actually turns out to be $300,000 of purchasing power. So all of that kind of stuff is nonsense. I’ve said it and forget it. I think you’ve got to invest in your skills. You got to invest in your knowledge and then you invest in those investments that align with it.
So there’s some people that are great at real estate and some people that aren’t great at real estate. comes down to the individual.
Dylan Silver (19:35)
You think?You mentioned silver and gold. I looked at like the historical data of the dollar to gold and it was something I want to say it was under $50 per ounce of gold at some point in time. And now we’re at $5,000 for an ounce of gold. And this wasn’t like
200 years ago, this was like, you know, 90 years ago, right? And so that’s what three generations or however many, you know, life cycles. And so if you’re thinking like, okay, that million dollars is gonna last me, good luck with that, right? So, you know, it’s not just a matter of, you know, putting your money away, you also have to keep up with inflation and like ever increasing inflation as well. And no one knows what’s gonna happen. So, you you do, to your point, have to be looking at, well, what’s the best thing that I can invest in?
other than assets that go up in value, physical assets, yourself of course is going to be one of those things. ⁓ We are coming up on time here though, Garrett. Any new projects that you’re working on and then as well, what’s the best way for folks to get in contact with you?
Garrett (20:46)
So if you DM me on Instagram, Garrett B. Gunderson, and just put in their books, you mentioned I’ve written some books, I’ll give a few of my audio books for free, like What Would the Rockfellas Do?, which is how do you, no matter where you’re starting, start to create a legacy. Then I’ve got Money Unmasked, which is how do you heal a relationship with money, which we started this with. And then Killing Sacred Cows, the one you mentioned, what are the financial myths that once you understand them, you can avoid? That book’s phenomenal for any real estate investor. Killing Sacred Cows is…going to really help anyone that’s big on real estate and why that’s a much better investment than the stock market if done properly, why it’s three dimensional versus one dimensional and what the myths are that get people not to think that way. So yeah, if they DM me on Instagram, the project I’m working on right now is I’m leveraging like a family office is the ultimate advantage for wealthy people. They have a financial team that only works for their family, but you got to be worth at least $300 million to have one that’s just for you.
There’s things called multifamily offices that they might have 50 to 100 clients, but the ones I refer to start at nine grand a month, you know, kind of out of reach for most people. So then from the time I was in my early twenties, I saw family offices, like I want to build this for people on the way up. People that are making like 350,000 of revenue, not income people that are million dollars of revenue that no financial person can help them with all those things. And I, because of artificial intelligence and this command center we built, I partnered with the good CPAs and attorneys.
I have amazing financial professionals to help people get those comprehensive services for a fraction of the price because of the efficiency we create. So rather than paying $600 an hour to an attorney, we have it inside the system. They train the system. They look at everything. And now they’re only having to spend a few minutes per file because we’ve trained it to analyze on the way that they would do it. And so now people are saving a ton of tax. They’re saving a ton of interest. They’re getting all their house in order, which means no slippage or breakage. And it just saves them a ton of time.
I’m really passionate about it. Yeah, it’s called Multiplier. GarretGunness.com, you can kind of check it out. We’re not really offering it to the public right now. We’re offering it only to our existing clients, but we do have a program that’s kind of an entry level into there.
Dylan Silver (22:53)
Garrett, thank you so much for coming on the show. Thanks for your time today.Garrett (22:56)
Thanks for having me, man. Take care,
