Jerry Fetta (00:00):
And what I realized, and this doesn’t just go for finances. It goes for really anything is when something is simple, you know, in reality it’s simple, but then it’s made complex. Usually it’s because there’s a third party that purposefully does that in order to create, you know, a sense of inferiority and a sense of false value so that others have to pay fees or pay commissions or whatever it might be in order to have this person to explain what all these big words mean. And so when I first started learning about finances, I was kind of, you know, full of myself. I was like, man, I know what a standard deviation is. And I know about sharp ratios and all this stuff that, you know, you talk to an average investor, they don’t know what any of that stuff means. And then I realized, you know, that it actually, the, the wealthiest people that I knew didn’t talk like that they talked in simple, plain language. Um, you know, one of my mentors at that time, when I started learning about real estate, he said, Hey, the bottom line is, if you’re looking at a deal and you can’t draw it on a napkin is not a good deal. It doesn’t make sense. It doesn’t matter how fancy it looks. If you can’t draw it on a napkin and make sense of it, it’s not a good deal. [inaudible]
Reed Goossens (01:09):
Welcome to investing in the US a podcast for real estate investors, business owners, and aspiring entrepreneurs looking to break into the US market join Reed As he interviews go-getters risk-takers and the best in the business about their journey towards financial freedom and the sheer joy of creating something from nothing
Reed Goossens (01:29):
G’day! Welcome to another cracking edition of investing in the US podcast from Los Angeles. I’m your host Reed. Goossens good as always every with us on the show. Now, I’m glad that you’ve all tuned into learn from my incredible guests and each and every one of them are the cream of the crop here in the United States. When it comes to real estate, investing, business, investing, and entrepreneurship, each show, I try and tease out their incredible stories of how they have successfully created the businesses here in the US how they’ve created financial freedom, massive amounts of cashflow, and ultimately credit extraordinary lives for themselves and their families. Life by design. As I like to say, hopefully these guests will inspire all of my cracking listeners, which are you guys to get off the couch and go and take massive amounts of action.
Reed Goossens (02:16):
If these guys can do it. So can, you know, as you know, I’m all about sharing the knowledge with my loyal listeners, which is you guys, and there’s absolutely no BS on this show, just straight into the nuts and bolts. Now, if you do like this show, the easiest way to give back is to give us a review on iTunes. And you can follow me on Facebook and Twitter by searching at Reed Goossens. You can find the show wherever you podcast on iTunes, SoundCloud, Stitcher, and Google play, but you can also find these episodes up on my YouTube channel. So head over to Reed goossens.com, click on the video link, take you to the video recordings of these podcasts, or you can see my ugly mug, but the beautiful faces of my guests each and every week. All right, enough of me let’s get cracking and into today’s show. [inaudible]
Reed Goossens (03:02):
The pleasure of speaking with Jerry Fetta. Jerry is the CEO and founder of wealth dynamics. He is nationally recognized financial expert featured in Forbes, Yahoo, finance, Chicago, weekly news, New York finance and interviewed on over 45 podcasts with world renowned experts, earning him endorsements and affiliations through his career with big names, such as grant Cardone, Dave Ramsey and Pamela Yellen. Now Jerry’s mission in life is to help create millions of financially educated and solvent families achieve greater financial freedom and share the truth about money with those around them. I’m really pumped and excited to have him on the show today to share his incredible insights and his journey to get to where he is today. But enough of me, let’s get him out of here. Get a Jerry. Welcome to the show head today, mate. Hey
Jerry Fetta (03:47):
Reed. I’m doing good. Thanks for having me on, how are you? My
Reed Goossens (03:50):
Pleasure, my friend and a week from today,
Jerry Fetta (03:53):
I’m in Tampa, Florida. Lovely. How’s the weather out there right now? It’s a, it’s the hot season was my first summer down here. So it’s the kind of weather where you go outside and you’re inside instantly sweaty instantly. So I
Reed Goossens (04:03):
Just got back from Hawaii last night and it was the same, like McGee, you walk outside and you’re instantly like dripping in sweat. Um, w what’d you move to product? Tried to, prior to that, uh, you’re going to laugh. I lived in Alaska. Oh, wow. That’s a huge change because literally the biggest distance you can go. Is that what you born in bro? Born and raised
Jerry Fetta (04:22):
Pretty much. I was born in Montana and then my dad, he was military. So we moved up to Alaska when I was about five they’re really similar Montana and Alaska and I lived there. Awesome.
Reed Goossens (04:32):
Well, let’s get into the show. And the first question I ask about childhood is rewind the clock and tell me how you made your first ever dollar as a kid.
Jerry Fetta (04:40):
Yeah, so I would, I would have to go back to my dad. Uh, he actually owned a handyman business, so he was a painter. He did general contracting, you know, fixing up places. He was a superintendent at an apartment building as well, kind of did property management. I remember working for him and, uh, I remember making my first five bucks with my dad at that job. No. Awesome.
Reed Goossens (05:00):
What were you anything specific? Pick out the paint brushes, you know, clean up the tools
Jerry Fetta (05:04):
He called his Stepin Fetchit. So whatever he needed, I would step in fetch it. Yeah. Got it.
Reed Goossens (05:09):
One of those ranch, ranch, screwdrivers, right. You know, you gotta go get the, go get the wrench screwdriver. Exactly. So Jerry, walk us through the journey to date, right? You you’ve come and started a company called dynamics, which is a financial freedom type of business that helps other people achieve financial freedom through investing in certain alternative assets. But you didn’t just stumble into that. So tell us about the bit of the, the preamble before getting into the business that you’re in today.
Jerry Fetta (05:35):
Yeah. So it’s been, it’s been a runway. Um, if I were to go back, you know, I grew up, um, you know, very low income. My family, we were, we were, you know, food stamps, uh, food bank, um, you know, free lunches at school, that type of family. I remember when I was a kid watching a bug crawl through my cereal. One time that we got from the food bank. And, uh, as I, I had a very, um, very bad relationship with money growing up, my parents got divorced over finances. Um, and so I remember when I was 17 years old, I was working a pizza delivery job. And I remember driving in the car and someone had told me that, that the dollar wasn’t backed by anything. And I don’t know why, but that just struck me. I was like, wait. So you’re telling me I’m going to go to college and get a job and work a career all for basically monopoly money.
Jerry Fetta (06:19):
You know, it’s got no value behind it. It’s just paper. And so that was kind of the beginning of my decision, you know, at the time to get out of the rat race, I wasn’t going to be somebody that traded time for money. Now, I didn’t know you could build wealth, the right. I always tell people, you can either go poverty, denial or wealth. And so I wasn’t going to do denial and I wasn’t going to do well because they didn’t know about it. So I chose poverty. Um, and so that was kind of where I began. And, you know, if you fast forward and I’m sure we’ll cover some of this, as we talk more, actually ended up becoming a financial advisor, kind of mainstream traditional. Um, and this was at the age of 18. I started getting my licenses, um, and, and getting into the business of selling mutual funds and retirement accounts and kind of the normal traditional retail stuff. And, um, you know, transition that into several years later, learning more of kind of the behind the curtains behind the scenes stuff. And that really was what brought me to hard assets, alternative assets, you know, some of the real estate things we’ll talk about today and, you know, founding the company that I run today.
Reed Goossens (07:17):
That’s, that’s super interesting. Particularly when you say that you were told during a pizza delivery, uh, excursion that the money wasn’t backed by anything I know at 18, I didn’t even know what that term meant. So clearly there must’ve been something in your brain that was like, Hey, it’s not backed by anything. So, so walk us through that because so many people who are not financially don’t have a financial IQ, which is what this podcast is about, what we were trying to share with people to, to grow their financial IQ. When you say it’s on backed by anything, what do, what do you mean by that?
Jerry Fetta (07:47):
Yeah, so it has no actual intrinsic or underlying value. Um, and this probably goes back to when I was a kid, cause you’re right for a 17 year old, that’s a weird thing to like catch and be like, that’s significant because most 17 year olds, that doesn’t mean anything. If you tell them that, um, when I was eight or nine, my parents got divorced. This was all in the same summer. My parents got divorced over finance. Um, we lost our house and basically the bank, you know, foreclosed on it. And then the car also got repoed, um, all in the same summer. And then that same summer, I was homeless with my mom living in a trailer behind somebody’s house. Um, and so I, I had the experience of watching us lose real things, you know, losing a house, which is real losing a car, which is real losing a family, which is real because of finances.
Jerry Fetta (08:31):
And so when I was 17 and someone was like, well, money’s not backed by anything to me. I thought of monopoly money. I was like, wait, you’re telling me that we lost all of this important, valuable stuff over nothing. It’s not like there was actually anything backing that money. And I didn’t know about the banking industry now. It worked yet. There’s a lot more to it, but that I think was what resounded for me on, okay. A house has value. A car has value. A family has value. And I could probably see the difference between that and then the dollars which didn’t have value in the fact that those were lost over the thing called money. Alright, what
Reed Goossens (09:06):
We through the financial IQ education journey, because that is also such a great starting point of understanding what things are backed by it. And I love that you say family because family is obviously you can’t trade it for anything. I kind of go trade the value of my family for money or other things, but it’s valuable to you, right. In terms of your, your, you know, your, your, your wellbeing, your mental health and all that sort of stuff. But, but walk me through the financial education piece to get you into the financial advisory role and in journey.
Jerry Fetta (09:37):
Yeah. So with that, I remember, you know, I, I went to the first meeting. It’s kind of, when I got recruited into that business, um, at the time I was actually a personal trainer, right. And so I was a personal trainer. I was a competitive bodybuilder. And so I didn’t understand finances. It wasn’t an area that I had any interest in actually had to stain for it. Um, but I did understand math. I was really good at math. I was in advanced math all the way up to 10th grade. And then I realized they were just going to keep giving me tests. So I ended up quitting on it. But, uh, you know, I, I knew math and I knew with bodybuilding, you know, calories in versus calories out, how much, how much am I adding to my weights? What am I doing with my calories and macronutrients that clicked?
Jerry Fetta (10:16):
And so when I looked at finances, I realized it’s all just math at the end of the day, there’s a lot of complex vocabulary. You and I know this being in the private placement industry, you look at a private placement memorandum bringing in a hundred pages of Greek. Um, but the underlying is just what’s the math of the deal. And so I knew that. And then as I started to learn about finances and get licensed, I learned more of the vocabulary. And I think learning that at such an such a young age, put me at an advantage because that’s, I think the barrier to entry is a lot of people could understand the math if it weren’t for the vocabulary. And so I kind of had to go through this process of getting state licensed and federally licensed. And then I kind of lived in breathed, did that for several years. Um, and then that kind of gave me, I think, a little bit of an easier time when it came to, okay, well, how do I actually apply this thing called finances?
Reed Goossens (11:03):
And talk to me about how you then take that into being a business, because before we press record here, you’re talking about your passion about educating those people who are, who don’t have financial, uh, financial IQ that they’re like yourself. They grew up in a broken home. They grew up with, with, with issues, with financing because people are scared of it. And they have that sort of hidden head in the sand type of mentality. So how did you, was that a driving factor to go off and starting the company that you’ve started to die in order to share the knowledge with people less fortunate than you,
Jerry Fetta (11:35):
You know, to a degree? Definitely. I look at, you know, especially coming from wall street because that’s where I kind of began. Um, and now I don’t do anything with wall street and, and what I realized, and this doesn’t just go for finances. It goes for really anything is when something is simple, you know, in reality it’s simple, but then it’s made complex. Usually it’s because there’s a third party that purposefully does that in order to create, you know, a sense of inferiority and a sense of false value so that others have to pay fees or pay commissions or whatever it might be in order to have this person to explain what all these big words mean. And so when I first started learning about finances, I was kind of know full of myself. I was like, man, I know what a standard deviation is.
Jerry Fetta (12:13):
And I know about sharp ratios and all this stuff that, you know, you talk to an average investor, they don’t know what any of that stuff means. And then I realized, you know, that it actually, the, the wealthiest people that I knew didn’t talk like that they talked in simple plain language. Um, you know, one of my mentors at that time, when I started learning about real estate, he said, Hey, the bottom line is, if you’re looking at a deal and you can’t draw it on a napkin is not a good deal. It doesn’t make sense. It doesn’t matter how fancy it looks. If you can’t draw it on a napkin and make sense of it, it’s not a good deal. And so for me, I looked at, okay, well, my dad, you know, working class guy and my mom’s stay at home, um, you know, very simple people, very simple family. I don’t think either of them went to college, but when I realized that when, when we really simplify finances down, it’s something they could have understood they could have won with. It was just not ever given to them and that simple, true, and real format for them to actually grasp it. And so to answer your question, I think that is a passion of mine is, you know, a D D Mr. Cade and mystifying, and kind of simplifying finances and making sure that that’s accessible to anybody that wants it.
Reed Goossens (13:14):
And that’s just an interesting thing because so many people, as I mentioned earlier, don’t have the ground work in financial IQ, financial, just understanding how to read a P and L right. Little simple things like that, but that’s sort of that keep it simple. Stupid is so important when you’re looking at deals and that’s not, and I’m not just talking about real estate, obviously shows very heavily focused on real estate. But when you’re talking about any investment into anything, whether it be a business or the stock market or into gold or whatever it might be, you need to break it down into its fundamentals. And I think having, I keep it simple, stupid mentality really helps bridge that gap in terms of the language that we use in a, like how you sort of said, people try to complicate things to add fees into it. So it sort of, you know, people get deer in the headlights and they can’t understand really what’s going on behind all that gibberish that you’re talking about in, in a PPM. Um, but, but talk to me about dynamics now and, and, and who you serve the average client that, that comes into your firm and invest with you into your alternative assets.
Jerry Fetta (14:17):
Yeah. So Walt dynamics has a couple of different, uh, focuses. And so with, um, kind of everyday people, right? One of our things is financial education. And so we have a program and a platform online called wealth dynamics university, and it’s, um, you know, hundreds of hours of content on finances, and that really can help anyone at any stage. Um, you know, someone just starting out, if you would have put that in my hands at 18 man, that would have been amazing. And so that’s something we provide. And then we also focus on, on, you know, getting people solve it too. And that’s a big factor is I think people sometimes get prematurely interested in and tax planning and some of this advanced stuff. And it’s like, whoa, you, you have an upside down net worth or, or you spend more than you earn. And so that’s an area where we help people.
Jerry Fetta (14:59):
And then with, you know, investing, when we get a client that’s maybe more sophisticated, um, you know, in some cases they have a million dollar net worth they’re accredited. Um, you know, that’s where we, we, we really helped them with advanced strategies, whether that be helping them find passive income sources, looking at different deals, um, integrating that in with their tax planning, um, you know, we’ve done some incredible stuff just in, in the tax arena. That’s a lot of fun. And so we look at that estate planning, legacy planning, and those are kind of all the things we focus on. Um, but our main audience is usually, you know, we see a lot of people that are 25 to 45, right. In that zone where they’re kind of in their prime earning years. Um, you know, they usually do have families. They usually have kids.
Jerry Fetta (15:37):
They’ve, they’ve tried a lot of the right things if we want to call it that, you know, put money in the 401k, try and pay off the house, put money in the bank. But a lot of times when we speak to them, they’ve, they’ve come to the conclusion that they feel like they’re running against the grant. They’re running against the current, that’s going faster than they are, even though they’re doing all the right things. Um, and so they’re looking for, okay, well, what is it that wealthy people are doing? Because they don’t seem to have the same issues I’m having, and there’s gotta be another answer. And that’s often who we end up speaking to and working with.
Reed Goossens (16:08):
And that’s, that’s great. I think I’d love that in terms of breaking down into wealth dynamics university to help bridge the, again, bridge the gap between what you are ultimately selling and listen to you, you have a, you have a full profit business. Let’s not beat around the Bush, but you need to have the training coming into. And I think so many businesses, you know, thrive when they, when I break it all down in, into such easy digestible bites like you’re doing in your business. I think that’s an extremely, uh, incredible work that you’re doing. So, so kudos to you. What has been the biggest challenge mentally, you see when you’re onboarding someone that they try to get or get around, and maybe you already mentioned it with the turtle, with the term, I’m doing all the right things, right? Like this whole narrative that we’ve been fed by me growing up in Australia, or here in the United States, in the Western world that, you know, we’ve got to go to school and you’ve got to get a job and you’ve got to work 365 and then you can retire. Right? Well, what’s been the biggest hurdle mentally when people come, come knocking on your door.
Jerry Fetta (17:10):
I think for the average person, you know, it’s, it’s usually going to be one or two things. And I think both of them are interrelated. I think, you know, it’s either going to be like you mentioned doing all the right things. It’s almost a sense of, of pride and accomplishment of like, you know, I have a college degree, I own a home. I have a car, I have money in the bank. I have money in retirement. And so with my business, you know, in a very nice way, we’re kind of invalidating all that. We’re saying, Hey, you shouldn’t, you shouldn’t be doing any of this stuff. This is all feeding money to banks, wall street. And the IRS, those three groups are not your friend. And so sometimes that’s a barrier for somebody that that’s what their parents did. You know, that’s what they were taught growing up.
Jerry Fetta (17:47):
That’s what they saw their peers, families do. And so to say, Hey, I’m not going to do any of that stuff. It really is kind of a, a make or break moment on, you know, am I, am I willing to try something different to get a different result? Or do I want to stay comfortable with what I know? Um, and so that’s kind of what we’ll see on the flip side. The other thing we’ll see is, you know, somebody that’s kind of disenfranchised by that. Like, they’ve, they already know like, Hey, I shouldn’t do the 401k at work and I shouldn’t do this. I shouldn’t do that. And that’s great, but they’ll try and skip other steps they do need to do. And so they kind of have this mentality of, you know, screw the system, don’t follow any of the steps, but if you show them any steps, often they’ll try and bypass and skip them just because last time the steps were bad and they weren’t good things. And so there’s a differentiation between, okay, what you were doing. You realize it was wrong, bad idea, not doing it, but there are other steps in there. Other, other, other foundations to be built in order to get into some of the stuff that we’re talking about.
Reed Goossens (18:41):
And, and let’s get into that, right? Like, so what, what are the types of things? And we spoke a little earlier again, offline, we talk about real estate, alternative assets. You don’t like to invest your peop your client’s money into the wall streets of the world. So what are you investing in today, um, in terms of your alternative assets?
Jerry Fetta (19:00):
Yeah. So one of the first things that we have people do is we have them actually get out of the banking system, right. Putting money in the checking account, in the savings account. So we will, we will focus on, you know, obviously they’ve got to earn income, but then it comes down to where am I storing that value until I’m ready to invest? And so we’ll look at things like life insurance, gold and silver as kind of a store of value. Um, and that’s a really simple gradient because anybody can do that. You know, and most people, if they’re putting money in the bank, it’s just as simple as let’s, let’s put it in the life insurance policy instead, or let’s put it in gold and silver instead. Um, now as far as doing deals, usually when someone’s starting out, we’re focusing on passive income producing assets.
Jerry Fetta (19:38):
And so, um, often those are going to be, um, on my clients. We like to put them on the debt side. I feel like they’ve got a lot more security as, as a, as a first position, private lender on a real asset than they do as an equity partner. And oftentimes the yields are higher too. Um, so we’ll look at private lending funds where there may be lending on a mobile home park or multifamily real estate, or, you know, a mortgage note on a, on a property or a subdivision. Um, something like that. We’ve even, we’ve even done water rights, right, where you’re, you’re, you’re lending to the subdivisions water rights and, and their water comes on because of the loan you extended. And so those are things we’ll look at for beginnings, um, you know, investors that are just starting and then it can, it can advance all the way into, you know, multifamily partnerships, you know, foreign currency trading, life, settlements investing. There’s a lot out there, oil and gas. Um, and that all comes down to, you know, the client’s level of education and experience, um, this idea of, you know, being a sophisticated investor or an accredited investor. There’s a lot that goes with that other than just the financial statistics. It’s actually, what is the track record of the, of doing deals in the past? What’s the knowledge and understanding level of the investor themselves,
Reed Goossens (20:46):
And how much do you play a referee in educating those people on? You mentioned oil multi-family, uh, lending funds. Are you acting as that quarterback or you just sort of more reliant upon the client, understanding the risks involved with say an oil field investment?
Jerry Fetta (21:07):
Yeah, we definitely do a lot of education upfront. Right? One of the first things that I tell my clients is never invest in something you don’t understand, um, and, and understanding meaning I can draw it on a napkin, right? If I can, if I can do that, then I know that I got the deal down. I know what it means. I know how it works. So we really try and create, you know, and that’s where wealth dynamics university comes in. Someone’s ready to do an oil and gas deal. We have a certification on that. They’re going to watch that there’s quizzes, there’s practicals. They’re going to test out. We actually can show a certification saying this client knows how oil and gas works before we ever connect them with oil and gas fund company. Um, so on the client side, it makes for a lot better experience. And then also the fun side. They love us too, because they’re getting really quality investors. They’re not getting people that are going to rock the boat. Um, they’re not getting people that are going to want their money back when COVID happens, because they didn’t have, you know, savings set aside. Um, and so it kind of is a win-win for both sides. And that runway is really what I attribute that to. That’s
Reed Goossens (22:03):
Awesome. And I think that’s a great snapshot into your business and how you’ve set up so many awesome systems, uh, to help fund the different vehicles that you want, ultimately your clients to invest in on. I think that the, if you, you know, you don’t ever give a man a fish, you teach them how to fish, right. And that’s so important. So how are you only attracting accredited investors that you’ve got, or you’re open to unaccredited investors as well?
Jerry Fetta (22:25):
Uh, we do both. It really comes down to the, the fund, right? So I kind of break it down into three tiers. There’s what I would consider to be a qualified investor, which means that the person is solvent. They’ve got some reserves set aside, you know, they don’t have consumer debt and they can start doing some very basic beginner deals. And then you get into what I would consider a sophisticated investor. That’s somebody that’s got a net worth of at least $250,000. They’ve done some deals, they’ve got a track record. Um, and then we get into the accredited stage, which is, you know, a million dollar net worth, um, you know, significant deal history. Like it has to be both sides of that equation. I can’t just take someone with a million dollar net worth. That’s never seen a PPM before. And I’d be like, Hey, we’ll go play with the big boys.
Jerry Fetta (23:04):
Right. Um, and so we kind of help all three of those phases. Um, and, and it’s, it’s different with everyone. We tend to attract a lot of people who aren’t yet accredited, who really want to get there. Um, as, as, as somebody that’s in the industry, you know, the reality of when you’re, when you’re accredited there’s deals, you can do that. You can’t, you can’t do if you’re not accredited and it’s, it’s like the curtain opens up and there’s all of this extra stuff that can make you so much more money than what’s out there.
Reed Goossens (23:28):
Right. And then that’s, and that’s the journey of most people, including myself, including yourself, like you start from zero, everyone starts from zero. I’m not just born with a million dollars net worth. You’ve got to go create that way. Well, some people are, you know, that’s not, that’s not, that’s all the two of us, but most of the people you’re trying to attract is through learning to create better seeds and a foundation for their family to, to, to be really generational. And I think that’s, that’s really important and, and attracting those people who are on the cusp of, yeah, they may have a good income, but they may not necessarily be qualified as a, an accredited investor. And I, I come across the same people who invest directly with me, they, you know, we’ve, we’ve actually had to shift only to accredited investors as we do bigger and bigger deals, but I still get those people coming through saying, Hey, I’m right on the cusp. It’s like, well, he is something that I can throw you in. Um, whilst you, you sort of grow your experience and your net worth to, to qualify, um, as, as an accredited investor, um, you mentioned earlier some, some pretty interesting things that I’ve picked up on that you’ve got passive income producing assets. Are you pulling everyone’s money together and feeding it out to different operators? Or are you sort of, you know, say the lending business, are you acting as the lender as well?
Jerry Fetta (24:38):
Yeah. So typically it’s going to be a direct introduction where we’re going to take a client. That’s got, you know, a hundred grand and we’re going to connect them with the right fund. Um, we try not to act as the, as the intermediary where we’re collecting the money and we’re lending it out and, and keeping us spread. I think there’s, there’s too much that can go wrong with that. Um, so we try and connect directly to the fund. I do have a couple of funds myself, where I am the issue where, and we do our own deal, finding our own operating. Um, and so it’s going to be one of those two avenues, but generally speaking, we’re not going to collect it and then do like a sub agreement where we lend it out to someone else and pay the spread back to the client.
Reed Goossens (25:11):
Got it. No, no, that’s, that’s, that’s perfect. It makes sense. Right. So to the funds that you do run, what are you investing in actively today?
Jerry Fetta (25:18):
Uh, so today I have a lot of, uh, from, from, from my own portfolio of private lendings, I have, um, secured private lending on, uh, homeowners association, dues contracts. That’s a very, very secure one and very interesting one that’s kind of outside of the box. Um, so I do that. I have, you know, some, uh, private lending on mobile home funds, um, private lending on, uh, restaurants in Alaska. Um, I do some Forex investing oil and gas investing, uh, life settlement investing. I own quite a bit of gold as well. Um, and I, I kind of stay within that realm. I’ll obviously I do a lot of life insurance too. Um, so those are kind of my main things that I stick with.
Reed Goossens (25:57):
Awesome. So you sounds like you own the real estate, so you would just in the note carrying space, is that right? That’s correct.
Jerry Fetta (26:03):
Yeah. Yeah. And there’s, you can go both sides. You can go equity or no, what I’ve found is on equity, it’s typically going to be, you know, a, a smaller preferred return. It might be a four, six, 8% dividend with a split. Um, and then equity on the back end wanting to sell her on a refinance. On the note side, I can get eight, 10 or 12% yield right away. Now, granted, I don’t get anything on the cash out other than my principal back, but I have a way where I offset that by collateralizing against my gold or my life insurance first, that way I still get the appreciation and then I’ll lend out for the cashflow or the yield on the back end of it. And I kind of have both happening still.
Reed Goossens (26:37):
And how do you account for the taxes given that you’re sitting in first position?
Jerry Fetta (26:42):
Yeah, so basically it’s just earned income and earned interest income. So when I get the income in it’s, it’s being treated as 10 99 as it comes in, um, you know, just like any sort of income and I have my own tax planning. I do. And so you can put that into qualified plans. You can use trusts. Um, you know, you can also, if you’re, if you’re collateralizing, you can write off your interest expense on your gold loan and your life insurance loan or whatever that might be. So that is one, one thing I would say is with, with private lending, especially because you’re not getting the depreciation, you’d get on the equity deal. So you’ve got to make sure you put those tax, those tax strategies in play kind of more on the manual side. Like you have to look at, okay, what what’s going to come in and what do I need to plan for and how am I going to mitigate that versus on a multifamily partnership that might already be spoken for just through depreciation and deductions on the deal. Right.
Reed Goossens (27:29):
Right. And for those people who listening just want to quickly summarize there, what Jerry has explained, you essentially all they going, picking up these life insurance policies and then borrowing against it to use that money as the lending source for these deals. Right. And so you’ve got you, you, you get paid back, you also going to pay back your life insurance. Your note is technically, but, but your money is sort of working for you double it, double the speed, right. That’s essentially. Yeah. Yeah. I’ve had a couple of, uh, had, um, uh, Mr. [inaudible] from the cashflow ninja on the infinite banking system and how that essentially is what it boils down to. I didn’t realize you could do the same end goal. Maybe you want to touch briefly on that. If it’s same, you know, back of the napkin top of placing money in a hard asset, you borrow against it, you then go and use it to do something else.
Jerry Fetta (28:16):
Yeah. And that’s pretty much the extent of it. Right. Um, you buy it, you buy physical gold, right? So you’re not doing paper, you’re not doing ETFs. You’re not doing, you know, digital shares of gold. You’re buying actual, tangible gold. You’re putting that in a depository as collateral. And then you’re getting a loan against that, that collateral. Typically, they’re going to give you, you know, 75% loan to value ratio. Um, when you, when you calculate in tax deduction, principal pay down your interest cost is usually two to 3% and that’s on an annual basis. And then historically like gold for me is a long-term investment. I don’t trade it. So if I’m buying gold, my plan is I’m going to keep it for at least five years, if not longer. Um, for me, ideally, I would never get rid of it. So if you look at the track record of gold, historically over the long-term, it’s about an eight to 10% annual growth rate.
Jerry Fetta (29:02):
And so that’s substantially higher than life insurance, life insurance. You might see a three to 5% annual growth rate. And so I can get that compounding faster. The difference is gold is what’s considered a re-evaluation asset, meaning it can go up in price or down in price. And so there is a risk of a margin call, and that’s why you’ve, you’re doing gold loans. It’s a little more aggressive than life insurance loans, because life insurance, you can’t lose money on it. It just, it’s always going to grow. It’s never going to lose, um, so very similar concept, but it’s something I love because the IRS can’t tax alone. Right. I sell gold, that’s a taxable event. Just like if I sell a property, that’s a taxable event. So the using the debt really does help.
Reed Goossens (29:39):
I would imagine leverage point of 75% really keeps that buffer in there because of that reevaluation metric that’s going on with a physical asset. Right.
Jerry Fetta (29:49):
Totally. Yeah. And if you look at, um, the standard deviation of gold, it’s usually, uh, about an average of 15%, meaning it might average eight to 10% on any given year, but it’s got margin, you know, 15% upward, 15% downward from that eight to 10%, which is considered a normal range. So that, that 75 LTV helps. And then I usually will keep 10% of my reserve and my, my credit line in reserves as well. Um, and when it does go down on my margin calls, I actually buy more of it. I don’t pay the loan off. I buy more gold, right. Because that extends my, my asset base, which means my LTV has dropped because I own more gold and I’m buying the goal on sale, which is preferable than just paying the debt down. And I never see that money again.
Reed Goossens (30:30):
Right. No, and it’s interesting. What, what, what facilities is set up like, you know, I know the life insurance companies are set up to handle the life insurance policies to then take the lineup. I didn’t realize on the gold of their gold brokers out there that do that, do exactly the same thing in create, create the line for you and carry the paper.
Jerry Fetta (30:45):
Yeah. Yeah. So that’s actually, I own a gold bullion company too. So that’s something we do is we, we facilitate the loan help with the underwriting. We have a secure depository that actually holds the collateral. Um, and so that’s, that’s something we are able to do all of that in house for our clients.
Reed Goossens (31:00):
That’s, that’s awesome. That’s well done. And it’s something that I would, we could probably spend a whole episode just talking about gold bullion. We want just have to get you back in and talk about it, but no, you’re just really interesting stuff. And, and I love that you really packaged up everything from the university through to creating different revenue streams for your clients, by being a gold bullion broker or by being, you know, uh, in the life insurance company, um, or expert. So, so like the infinite banking system, we spoken about many times on this show before. Um, I guess as we come here to wrap up the show, what are you big? What’s your sort of vision and horizon for the next five to 10 years, both personally and, uh, in the business.
Jerry Fetta (31:37):
Yeah. So for me personally, over the next five years, um, I’m really focused on my own personal family office. Um, and it’s, it’s really the idea of a family office. If you study old money, not, not new money in wall street, if you study the, the Carnegies, the Rockefellers, they all operated off something called a family office. And so that really is when you take your personal wealth portfolio and you scale it like a company, right. You actually hire employees and they help with refinancing deals. You know, finding deals, underwriting, you know, everything you can imagine on the or board of your wealth is going to happen. And so that’s where my personal focus is at, um, from a business focus, you know, we’re really an expansion mode. We were working with, you know, thousands of clients across the us. Um, and so right now we’re working on, you know, hiring staff, um, you know, really growing our systems, our infrastructure, bringing more people on. Um, we kind of have the base of, of, you know, our offering and the, the service we provide really down and locked in. And so now I really is time to scale that out to
Reed Goossens (32:34):
Awesome. I think that’s great. And it’s, it’s the beauty of building. Great. And I’m going to talk a lot about on this show is having the ability to take a client in your funnel and be able to answer every single question that they can have it regardless of their sophistication along the totem pole, because you want to have that, that, that sort of drip feeding of information to people who are just coming in, just getting started with their financial IQ, all those more credited investors, you really want to go ramp up and potentially create a family office for them. That’s, that’s super exciting and everything you’ve, you’ve created underneath that. So, so well done. Uh, I think that it’s going to be an awesome career for you, uh, in the business in the next couple of years, uh, at the end of every show, we’d like to dive into the top five investing tips, ready to get into it. Let’s do it, mate. What’s the daily habit you practice to keep on track towards your goals.
Jerry Fetta (33:21):
Daily habit that I practice, I measure everything by stats. So I actually have graphs, literal graphs, and I track all of my important metrics and I enter them, my graphs. I measure that I look at it on a daily basis.
Reed Goossens (33:33):
And what, what, what’s your, what’s your number one metric? You look at.
Jerry Fetta (33:36):
Number one metric I look at in my company would be a, it’s a graph called the value of service delivered. And so we actually track the denominated value of what we’re delivering to our clients every day. And that’s something we measure week over week. That’s first more important than revenue, right? Um, so that’s on the, on the, on the business side, on the personal side, it’s passive income. That’s something I’m always looking at, always looking to grow. Um, you know, that is the holy grail of becoming financially independent.
Reed Goossens (34:02):
Awesome. I love it. The value of service delivered. I think that’s such an incredible metric to look at, because again, you don’t even have to worry about revenue because that will fit. That will figure itself out once you have that, that metric worked out. So, so awesome. Well, well done. Um, question number two is what is been the Mo who’s the most influential person in your career to date
Jerry Fetta (34:22):
Influential person in my career today, man, that’s a hard one. Um, by to pick one of them, I have a mentor and a friend of mine. He’s actually a partner in one of my funds, is that his name is Chris. And he was the one when I, when I got out of wall street, didn’t know what to do. He’s the one that sat down and told me about, you know, note investing, private lending. Um, so he’s, he’s somebody that I definitely attribute a lot of my, my knowledge and, and current success to awesome,
Reed Goossens (34:46):
Awesome stuff. Well, thanks Chris, for all the help with cherries with Jerry’s future here’s Chris question number three is in your business. What is the most influential tool? And when I say tool, it could be a physical tool, like a notepad or a journal or a phone, or it could be a piece of software that you cannot run the business without. What is it?
Jerry Fetta (35:04):
Yeah. So this is a great one. Actually we have something called the blueprint of financial freedom. And so I wrote this book, um, this is, this is literally what I did step by step by step in order to become financially independent. And we turned it into a blueprint. And so what we did is we were able to take any, any client, any prospect, anywhere, figure out where they’re at and map out what their next steps are. Um, and we can do that within a matter of minutes. So that’s been a very valuable tool to us and our clients.
Reed Goossens (35:30):
I, it goes back to what you’re creating. Once you get them hooked on your ideas and what you stand for, you can get them into the university. You can get them into all products that you’re trying to, to, to, to, to make sure that they’re getting into in order for them to achieve the financial freedom. So love it, love it, love it, love it. Um, in one sentence question in one sentence, what has been the biggest failure or mistake in your career? And what’d you learn from that mistake or failure? Biggest failure,
Jerry Fetta (35:57):
Not, not looking for myself. And what I mean by that is, is, you know, taking whoever’s word for whatever, without inspecting myself, what it looks like, and what’s actually going on. Um, and I could rattle off so many times that that happened where you hear somebody say something and you’re like, oh, okay. And then it turns out that, you know, there was more to it or there was something missing. So, you know, what I’ve learned from that is always look for myself, always check if it’s something that, that matters enough to have a conversation about or to track that it matters enough to actually see it with my own eyes and see what’s really going on.
Reed Goossens (36:29):
And, and you just, you’re talking about a trust factor there, right? Like you can’t just like, don’t just take someone’s word for it. Oh, it’s a great deal. Get involved.
Jerry Fetta (36:36):
It can be that it can also be, you know, everyone’s in a different level of, of logic, right? Being able to look at something and come to conclusions. And so, you know, in a deal, I might see something that someone else doesn’t see. And it doesn’t mean that they’re untrustworthy. It just means they haven’t maybe had the experience or the massive volume of looking at deals to be able to notice something. And so they might be, you know, 100% doing their best job, but it’s not me at the end of the day, that’s looking at it. So, you know, I’m all about outsourcing delegated, hiring, but on the things that really matter, I always want to give a final inspection and just make sure before we sign off or before we get involved.
Reed Goossens (37:09):
That’s awesome. And I think the experience that you bring to the table is also identifying those blind spots right. In people’s deals or in their financial planning or anything that, that might come to you because you are that third party that’s like has a different perspective or a different lens. And that’s the value of partnering up with different people like yourself, because you, you bring that type of value to the table, given all your history of experience, you know, investing money across many different platforms. Um, final question Jerry is where can people reach you to continue the conversation they want to be in your sphere? Where do they go
Jerry Fetta (37:37):
Best place? Um, I mean, you can Google me, Jerry pheta Instagram. If you go to add Jerry fed on Instagram, you can follow me there. Um, you can go to our website, wealth dynamics.com. We have a ton of free content. So even if you want to kind of just, you know, creep at a distance and listen to podcasts, read blogs, watch videos, go to wealth and amex.com and definitely, you know, consume some content there. And you can follow us from there on social media.
Reed Goossens (38:01):
Well, awesome. Well, I’m definitely gonna add you on social media. And you mentioned the book before you went, give you one more plug.
Jerry Fetta (38:07):
Yeah. So the blueprint to financial freedom. If you want a copy of this too, you can go to Jerry pheta.com/b to AF that’s the letter B the number two, the letter F stands for a blueprint to freedom and not to you. And it’s a very, very thorough, right? So that’s something you could, you could hire us to implement it, but we did give you enough there where you can read it and just go do it yourself if you want to as well.
Reed Goossens (38:28):
Awesome. So that was Jerry feda.com dot B P T F. Right.
Jerry Fetta (38:34):
So I know Jerry fetid.com forward slash B to F B to F letter B, number two, letter F.
Reed Goossens (38:41):
Got it, got it. Go to the beach Fri, make sure we have all that in the shot as well. Jerry, I want to thank you so much for taking some time out. He decided to jump on the show. Some of the things that I took away from today’s, uh, conversation is your ability to look at things differently. And it probably starts with that one conversation about money all the way back in the day. And you had the self-awareness what’s it backed by and not, I know a 17 year old person wouldn’t most of us wouldn’t wouldn’t have asked that question, but then slowly picking through, um, you know, going and educating yourself becoming more financially independent in your own IQ, but then going out and helping others and in creating systems within the business. So you can offer a really great smorgasbord of options for different people coming through your funnel, whether it be someone just starting out or someone more advanced into some very complicated, uh, lending strategies around, you know, life insurance.
Reed Goossens (39:31):
We talk in the infinite banking system, but also around gold and how you can be your credit, got a gold bullion broker to then create debt around that, to go to lend it and make the money work for you in an in and out. And then everything around that you’ve got the education I think is super, super awesome. So, so well done, but I think we covered it all. Awesome. Okay. Well, thank you so much again for taking some time out of your day to sh to jump on this show, uh, enjoy the rest of your week and we’ll catch up very, very soon. Thanks for reading. Well, they have another cracking episode jam pack with some incredible advice from Jerry. Remember head over to Jerry fedex.com that’s F E T T a.com forward slash B to F if you want to grab a copy of his book, incredible stuff here that he talks a little bit about in this episode, please get remembered or rewind and take down ton of notes, because there was some really good tidbits there about creating multiple passive income streams through reusing a different stuff like insurance, um, investing in insurance, brokerage companies, a lifetime insurance companies, and also investing in gold.
Reed Goossens (40:33):
I want to thank you all for, again for taking some time out of your day to tune in, to continue to grow your financial IQ, because that’s all about here on the show and easiest way to give back to this show. If you do like this shows you give us a five-star review on iTunes, I’m going to do it all again next week. Remember be bold, be brave, and go give life. [inaudible].