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Josh McCallen | More is Better

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Hosted by
Mike Ayala

On this episode of The Investing for Freedom Podcast, Mike is joined by guest Josh McCallen. Mike and Josh discuss a series of topics ranging from being a father of 10 children to tax freedom. Josh speaks about how embracing the worst case scenario can have great impacts on your life and businesses and how capital is more than just cash. Mike and Josh talk about how it seems as though people find it easier to invest in real estate over investing in a human but how entrepreneurs often realize the beauty in creating talent and letting talent lead. Mike and Josh also speak about how it is easy to create sadness in our lives but there are so many opportunities to create good, not only for ourselves but for the people around us.


0:00 – Intro
0:34 – Mike explains how he is sharing how to gain financial freedom through real estate investments with his new 9 week real estate accelerator program
1:26  – This course begin in January and you can sign up now through https://mike-ayala.mykajabi.com/real-estate-accelerator-with-mike-ayala

1:38 – Mike shares a brief introduction to his guest Josh McCallen
2:20 – Josh explains how his father-in-law has had the greatest impact on his life
5:55 – Josh shares his hack on how to balance having 10 children and running a business and explains how having one is actually harder than having 10
10:11 – Josh talks about how embracing the worst case scenario has had the biggest impact on his success
11:00 – Josh mentions how his biggest setback has been losing a company
12:40 – Josh speaks about how the philosophy of the ultimate sales machine has impact every company he’s been involved with since he lost his company
15:10 – Josh and Mike discuss how you can create wealth whilst keeping your staff level small but how their purpose is to have staff and to help others
19:04 – Josh talks about we are all flawed and can be easily disillusioned by things
22:48 – Josh states that for all the sadness we can create in our lives there’s also equal if not more opportunities to do good24:26 – Mike and Kara share some information surrounding their couples mastermind. This event kicks off in January and you can sign up for one of the limited spots now at https://www.nextlevelcouple.com/

25:53  – Josh mentions how capital is actually more than cash is the piece of advice he finds himself sharing the most
28:04 – Mike speaks about how we seem to be more comfortable with putting $100,000 into a real estate investment than investing $100,000 into a human
31:24 – Josh mentions how he is a strong believer that as you become an entrepreneur you realize how wonderful it is to develop talent and let talent lead
37:38 – Josh speaks about the three core virtues he runs his company on: joy of service, humility of heart and ministry as your goal
41:08 – Josh talks about how when you’re investing in freedom, you’re probably not doing the same thing that everyone else is doing
42:10 – Josh explains the efficient income fund and tax freedom
50:54 – You can find more about Josh through his podcast, The Capital Hacking Podcast or through his website https://accountableequity.com/


Hey, this is Mike Ayala. I’m all about helping people find financial freedom and one of the best and fastest ways to grow your wealth and achieve financial freedom is through real estate investing. I know I’ve done it. I’m still doing it. Real estate investing is a key component to accelerating my earnings. And I want to share my knowledge and experience with you through my new real estate accelerator program. This is a one-time only program that puts you in the virtual room with me and an awesome small group of investors with one goal in mind, financial freedom through real estate investments. I’ll demystify the complicated world of real estate investing to help you identify money-making opportunities and create profitable new income sources.


This course is designed to help guide you to success with clear instruction, direct takeaways, and honest answers to your questions. We’ll chart a path to your success in real estate Investing together. Anyone from the novice to the seasoned investor can profit from my experience to achieve their investment goals. The nine week course kicks off this January. Sign up now at www.earnwithrealestate.com that’s www.earnwithrealestate.com. Let’s do this together.


Are you looking for freedom, freedom from the daily grind and hustle, or just finding a way to live the life you always wanted. Then join us on the investing for freedom podcast. Our host Mike Ayala will help you discover new ways to find freedom. With tips, insights, and interviews you’ll learn the exact systems he’s used to travel the world and live his best life. True success and happiness are all about freedom. And here’s your roadmap on how to find freedom on your own terms. Welcome to the investing for freedom podcast. Here’s your host, Mike Ayala.


Mike Ayala: Thank you for joining me on the investing for freedom podcast. Today, we are going to have an amazing show. I’ve got a guest on that is very well experienced and versed in many things. But even before the show, he was telling me how to run my show, which was kind of interesting in itself. But no, every time I have a conversation though, with Josh McCallen, it’s just always inspiring and we just have a great time. I always learn something and I don’t think it’s going to be any different today for you guys. So Josh, welcome to the show.


Josh McCallen: What an honor, I’m here to invest for freedom. Am I in the right place?


Mike Ayala: You’re here. You’re here, brother.


Josh McCallen: I cannot wait to get to know your community. Thank you so much for having me.


Mike Ayala: Yeah, it’s going to be good. Well let’s dive into the four questions and then we’ll get into some amazing stuff. So who has had the greatest impact on your life?


Josh McCallen: My late father-in-law changed my life. My wife is the oldest of 10 children. And this guy was a, you know, an accidental father at 17 and he took great care of my wife and then ended up having 10 kids. And so I followed in his footsteps. That’s why we have 10 kids. That’s partially the reason, but no, he was an absolute treasure and he died tragically a year ago, a month ago from a routine treatment at the hospital. Very sad. It was a dangerous thing. They were checking his blood clotting in his brain to see if he was blood clotting and whatever it was a test. The technique actually caused the blood cut and sadly he passed away without any of us knowing that was even a possibility that weekend.


Mike Ayala: Man, that’s tragic. Like you said.


Josh McCallen: It is tragic. He had the most impact on me.


Mike Ayala: That’s pretty wild. That’s pretty cool. We kind of have that in common. My father-in-law has been a huge, huge impact of mine as well.


Josh McCallen: And that’s so rare. It’s rare that, that you get to know your father-in-law. I think most people don’t even know their father-in-law’s very well and it’s even, it’s just, obviously it shows how much I love being part of my wife’s family. It’s been really impactful for me.


Mike Ayala: Same, same. Maybe we’ll dig back into that a little bit, but I’m curious, is the 10 kids just random or was there really…


Josh McCallen: So we got to a nine naturally meaning like just going with the flow, as I always say, it’s easier on the dad. More fun for the dad has no pain or consequences for the dad. Poor moms. It hurts so much being a mom. But when we got to nine, Melanie actually was saying, you know, thanks for being generous. I’m generous, but maybe we’re done. I go, hold on honey. We were like in striking distance of double digits here, we got to, please, can we have one more? So then we had number 10 and he was a little guy. We’re six ladies, four guys. And we’re in our mid-forties. We’re old people now, but we’d been married almost 25 years. So it all, it actually was no twins. My wife says no shortcuts. We just had that many children.


Mike Ayala: You know, I’m always inspired watching you too. And you know, a big thing that Kara and I, I don’t know, I don’t think I’ve ever told you this, but you know, we’re huge on being successful in business and you know, the whole investing for freedom. I mean, the reason why we do what we do was because I always wanted to be a present father and I wanted to keep my family first. And I’ve watched you from a distance and your wife is involved in the business. It’s amazing what you guys do.


Josh McCallen: Yeah. And we haven’t even told the audience, but we build resorts. Like we’re like the house flippers of resorts. We’ve done it many times now, and they’re not small, either hundreds of acres, golf courses, restaurants, and Melanie is part of it. So we can get into that later. But I mean, I’ll tell you, She didn’t know she was going to be a part of it. But as we launched out as a group of syndicators, so you know, quick story, I was in the business before my wife got in the business of real estate development. By when I learned how to raise capital, you know, I left the fat cats of this world that have all the money and created these awesome syndicates where everybody can own these resorts together. And that’s when Melanie got involved. So it was about three and a half, four years ago. And she’s awesome at helping us.


Mike Ayala: You know, so many people blame, many excuses, but you know, family, I don’t have enough time, my business, and you guys have 10 children and work in the business together and make it look so eloquent. Like, give us the hack. What’s the hack.


Josh McCallen: Okay. Here’s the hack. I will tell you that when you’re out there, you’re listening. You’re 25 years old. Mike has been an inspiration to you because he’s explained to you financial literacy and freedom. And you’re probably like, man, one kid sounds hard. Here’s the first tack, one kid is the hardest, Ironically. It is challenging. We all remember who has some children, man when you’re the only child, when you only have one, it’s like, you’re their babysitter, their dad, their playmate, their discipline, you’re everything to that baby. And therefore they need 99.9% of your day. As you have two, there’s a little diffusion of playtime. Then three can be trickier, but also maybe a little better. If one of them’s a little older, well, fast forward to 10 and we have adults on the team. Okay, Mike, we have, we call them the bigs, the mids and the littles and the bigs, the mids, and the littles all have responsibility. That’s the other cool trick. And the old hack is from the olden days we raise them like baby boomers were raised where we let them get hurt and we’re not afraid of mistakes. We might, you know, you might get chastised for making a mistake, but it’s okay, You’re allowed to make mistakes. And here’s the thing. As long as you specifically messes, right? If messes get made or accidents happen, just fix it. I mean, that’s our number one rule. If you don’t fix it, then we go crazy on you. But so Biggs, the mids and the littles, everybody’s a boss to somebody. So there is true subsidiarity going on in our house by necessity, right? You could never be a helicopter parent with 10 kids. So [07:27 inaudible] the kids have a pretty good life, right? I mean, they get away with things every once in a while I find a stash of candy upstairs because they brought it upstairs. Like, they’re just like, like baby boomers, man. They’re living their own little life in this ecosystem of relatives. I think it’s pretty good for them. We’re very grateful for being able to be part of it.


Mike Ayala: I love the hack.


Josh McCallen: Let the bigs take care of the mids. Let the mids take care of the littles.


Mike Ayala: I’ve said this to so many business owners when they start talking about real estate and thinking about getting into rentals. And I’ve told so many business owners, one to 10 rentals is like one to 10 employees. It’s like the hardest right. Because you’re doing everything. You’re the manager, you’re the sales guy. You’re the bookkeeper. You’re everything. It’s the same with rentals, but I’ve never, I’ve never heard somebody tell me that when it comes to children. So I love that.


Josh McCallen: think about it. You get it right. I mean, like, it’s actually helps me in business a little bit and Melanie too now, I think we realized we cannot avoid every single mistake. So then you end up teaching and training people how to deal with mistakes better and overcome. And I think ultimately it makes our organization a bit stronger. I think it definitely makes our kids a little bit stronger.


Mike Ayala: I love it. I’m going to start encouraging everybody to have more than 10 employees, more than 10 rentals or more than 10 children.


Josh McCallen: Or at least more than one child. I think it starts to get beneficial at 2, 3, 4 or 5. I’ll tell you what, man. I’m from a two person family. Mike, as your children are growing up in two, I never perceived or conceived of having more. So it’s been a journey for me the whole time. Now my wife kind of, she knew how to chart the course and watching my father-in-law actually, that’s the first thing I learned from my father-in-law when I was dating my girlfriend, Melanie and I go to her house. She still has a little baby brothers and sisters, and they’re walking around on tables. And I remember thinking as a guy who hadn’t seen a baby in 10 years, at that time, this little two-year-old’s walking on the top of a table and one of her tricks, her name was Maura, and she’s still lovely. She’s now an adult. She would put her toes over the edge of the coffee table and like, talk to me. I’m like, you know, giggle. And I’m thinking, is he not going to stop her? She’s got to fall any second now. And now that I think back to the fall was like 20 inches. Who cares? She would’ve fallen. It’s not a big deal, but when you’re nervous, that actually creates a super negative energy. Like you’re anxious and a stubbed toes a big deal. No, no, no, You better be bleeding pretty bad before you come and complain about it to us. We liked that.

Mike Ayala: I like it. If you could narrow it down to one thing that has had the greatest impact on your success, what would that be?


Josh McCallen: And this one feeling is pretty common to me, but I think is rare to others. And I embrace all of the unit practice with me. And that is embrace the worst case scenario. And so you know, you do that pros and cons list of every decision, but when you can embrace the worst case scenario, you’re like, wait a second,  I’ll get through that. Then of course you can take the next step forward. So there’s a, I just have a strong ability to embrace the worst case scenario. So therefore risk is seen as a maybe not as scary to me, you know, because I can see how the, it’s literally not going to set off a nuclear bomb. So let’s just keep going forward. So moving forward and I think the technique I use is I embrace the worst case scenario, then move forward.


Mike Ayala: I like it. It’s good stuff. What was your greatest setback and what did you learn from it?


Josh McCallen: Yeah, biggest setback is I lost a company. So the recession I was working for a rich developer, a hundred million dollars plus family office. And we were building the best houses in the world, like $10 million flip houses. And I was a project lead and all that cool stuff. And then the recession comes not a big deal for him. He kept me paid for a while. Eventually a year later, I keep resigning. He lets me go. I take every dollar amount I have and 2009 and I buy a franchise and I had the concept that, you know, franchise by a service-based franchise, they give you leads. You do the work, you’d run a system. You created an operating process. Well, I was dead wrong, man. If you ever buy a franchise, take it from me. You’re still the number one salesperson. And I just, I hired a salesperson. I did everything wrong and I took my foot off the gas and lost a company and lost everything. So that was 2010. We started from scratch again.


Mike Ayala: You’re always the salesperson.


Josh McCallen: You have to be, If you own the business, you damn well better be the salesperson. In a good way, sales are a transfer of great value or they’re not, if they’re not, maybe it’s the wrong company, don’t do it. But if you believe in the company, then sales are a great thing is our companies and since that day, Mike, have you ever heard of that guy Chet Holmes.


Mike Ayala: Yeah. Love him.


Josh McCallen: The ultimate sales machine from like 12 years ago.


Mike Ayala: Pigheaded Discipline.


Josh McCallen: Yeah. Pigheaded discipline. He passed away years ago. And so I’ve gotten to know Amanda Holmes who owns his company. And I’ve offered to buy his company by the way, Amanda, if you’re listening to this, the offer still stands. We will buy the ultimate sales machine because that philosophy, and she does listen to these things. She cracks me up. She just texted me last night. She won’t sell the company right now. I’m like, come on guys, look at me. But that philosophy, the ultimate sales machine has impacted every company I’ve ever done since I lost that company. Because everything is better when you’re selling. And if everyone in the company is selling now selling again is transmission of a great good and of course there’s an exchange of economics because you need to keep the great good built and keep it going. Therefore, wait until I share with you why we do this Great, good, whatever this great Good is. Please join us. We’d love to take great care of you. And yes, we’ll pay a fair price and yes, it won’t be cheap because it’d be so valuable. And that premise yeah, I could go and I can go into hours. As a matter of fact, we summarize it for our staff. We have 200 staff members today and we teach a philosophy that’s in our core values called sales are sacred. And what we’ve done now is we’ve recognized by buying distressed resort businesses. You know, that’s basically what we are now as a turnaround company. And so we buy distress things. What’s usually the flaw of this distress thing, sales, you know, it’s not always the physical buildings that’s causing the problems. It’s usually the philosophy of the sales, the heart, the culture, and we teach sales are sacred. And what we’ve learned by buying businesses with staff and taking care of their responsibilities, they have families is that every sale at first you think, oh, this is important. We should make sales. This is what a company was built to do. And I always say, that’s like the surface. Don’t worry. Keep going deeper. There’s people that work here that are the general level teammates, the building teammates, the executive teammates, every one of them wants to pay their bills and take care of their kids. The sale is part of our sacred commitment to them. And so the entire philosophy of our company is sales are sacred because we think of the people we’re paying their livelihood for at every moment. Now, of course we add great value to the guest, but that philosophy saved the day when we started buying these really tired, old resorts.


Mike Ayala: It’s so good. And I just think that, I think it was one of the first times I ever met Ken McElroy and he made the comment, nothing happens in business until someone sells something. And I was just like, when you say sales are sacred, it takes it so much deeper because like you said, every version of it, I mean, yeah, you have to have sales and business, but sales are sacred. It’s such an interesting.


Josh McCallen: Well, I mean, especially companies like ours, you know, you and I both have a lot of friends that have made incredible wealth by keeping their staff levels small. And that is not a bad strategy. Okay, though, there are people out there that know how to run companies without staff or with one staff member and they still make a lot of money. It just goes to show, not all of us have the same purpose in life. That is a different purpose. That person’s purpose is beautiful. Our purpose is to have staff, we were built to be with, and for others, we’re very Dale Carnegie and the businesses we run are built on great people. So then our whole business is really about the great people and taking care of great people. And there is a beauty in the fact that 200 families rely on me and our teammates to sell. It’s a burden that you can find other ways around it in this world. You can find ways to hire nobody and still make money. And that’s wonderful. It’s just not my calling. Our calling is to actually be a vibrant place where you want to work and you see your value. Remember, those of us who are investing for freedom are probably higher earning executives that are learning about what you teach financial independence. And maybe all of us want freedom of all kinds, but I don’t think it’s the anti against your philosophy of investing for freedom to build a company that’s good for those people that work there, because remember, we all feel better when we’re working and giving, even if it’s for our family, we do feel better, our psyche is built on being good to others and to provide value, I think. And if you take that out of everybody’s life, it can leave a void and you end up filling that void with some sad things sometimes. So we know our purpose, we’re super grateful. And in our scenario, people are a part of our purpose.


Mike Ayala: You know, I remember one of my first mentors, his name’s Barry Lipparelli. I actually had him on the show, I don’t know, probably a year ago. And the guy probably like 85. And so it was just a conversation. But I remember when I started my first business and he really started mentoring me, he was talking about how noble being an entrepreneur is and how, you know, employing people. And I didn’t really fully understand what he was talking about then. Cause you know, I was a young guy and I was just like, I literally used to call it stacking bodies, which shows you like how, you know, out of tune and off base I was, I was like growing so fast. I’m like, I just got to stack bodies. Like I’m just, I was just gathering employees.


Josh McCallen: Throw bodies at it. That’s actually an expression we do say sometimes, but I don’t mean it in a negative way. Like when we build a new business, we’re like, we need bodies. We need bodies now.


Mike Ayala: No, it’s good, I was just kind of piggybacking on what you said because, that never left me because he was talking about, and I agree with you, it’s not right or wrong. I mean, like you said, there’s solopreneurs Who’ve, you know, I know a couple of guys that have like, it’s them and a few contractors and they make $4 or $5 million a year.


Josh McCallen: They make more than me. That’s fine.


Mike Ayala: I said what the purpose though, you know, and I’m curious on this note because I’ve found myself. So when I sold my first business in 2014, you know, I had grown to over a hundred employees and probably hired a thousand different employees. It was, you know, some of it was seasonal and I was so burnout, Josh. I remember, I remember telling Kara I wanted to find a business that had no employees and no customers. I was just so like…


Josh McCallen: I like the no employees part, I’ve heard that before. I’ve never heard the no customers.


Mike Ayala:  I think the only like, and by the way, I’ve totally retracted from that. But, you know, I started thinking like what kind of businesses there that that is. And I think literally it’s only stock trading, which I’m not interested. As I like, kind of went through that journey. I mean, so I’m curious in seasons, have you ever gone through seasons where you lost that?


Josh McCallen: So, you know, thank God. My original heart was in academia actually at first. I mean, I was always a business guy, grew up pretty humble and poor. I always hustled stuff at the playground. I sold cotton candy, all that crazy stuff. But then I had this deep root actually had a deep religious conversion. And I wanted to just be working ministry of any kind, you know, at first as an 18 year old kid. And so I studied theology and history and philosophy and just really dug into the mind of what makes us whole and happy. Anyway, that was when I was really young. And so I always thank God for that time in my life, even though I’ve gone on to do business ever since, really, because it does keep me grounded a little bit like this last few years, you lose a company, you get disillusioned with a lot of things, right? You lose a partner, a wealthy partner changes their course and decides their kids are more important than the business you built,  those types of things are disillusioning. So back to whether or not you want to work with a lot of people, less people know people. I think I feel good that I’ve come to some basic ground foundational rocks, some granite. And I think one of the granite things I’ve found is that we are all flawed and we have the potential to really do sad things. And we can hurt each other’s feelings sometimes, intentionally, sometimes accidentally all that is true. I mean, everything that makes you disillusioned is really happening in this world. And then you just have to say, am I going to focus on that? Or am I going to focus on the good things that we can actually possess? And you and I around some great people. Great thinkers, great, you know, people who do a lot of great meditation, you, and I, I don’t know if you know how [20:52 inaudible] probably better than I do, but guys like that, look at how much good that dude’s done with miracle morning just by being grounded. And, you know, he says you should focus on your purpose every day and try to do something good for others. And do a miracle morning. So that actually, I’m letting that inspire me rather than the oppressive stuff. So let’s fast forward into business. When you own a business, the one of the first things I will disillusion you, Billy, Sammy, Jenny, Rod, whoever’s listening is you’ll get disillusioned if you’re trying hard to give a good work environment, then you might make a shift and downsize, and now you have to let Bill go and Jenny go, and then they Sue you. And you’re like, but wait. But I actually care about them. Why are they suing us? And there’s usually some preposterous reason or something like that. We have hundreds of employees. This statistically is inevitable. And that was the last disillusionment I’ve had, which was, I can’t believe we’re not trying to hurt anybody here. There was this cause and that effect. But even that I say to myself, no wonder people want to have no in place. You know, you’re sitting, you’re killing yourself, not taking a paycheck for years and you’re still having people misinterpret an action or a comment or whatever. And you’re like, man, I’m really not trying to hurt anybody here. So why  does something bad happen to us? And you just come back to, I have one little thought if we were to let that overwhelm us one or two crazy situations out of 200 active employees, but I’m sure we’ve had 350 since we got here and most leave cause it’s seasonal or whatever. I always say, while you’re with us, we’re going to try to make as great an impact on your life. And we ask that you’ll do the same for our guests. And if this is a seasonal thing for you, Mr. Smith, God bless you. That’s fine. Please enjoy your time with us. And hopefully you take a piece of the good we’ve created here and that, you know, that’s just how we’ve come to grips with this. For all the sadness we can create in each other’s lives. There’s also equal if not more potential to do great good. And let’s just focus on those things for now and not be disillusioned by the fact that sometimes it doesn’t go the right way.


Mike Ayala: You know, I think I’m going to name this podcast more is better, more kids, more employees.


Josh McCallen: Well, the more kids helps you get rid of any, you know, attachments. I will tell you that much. Cause you know, you just don’t know when we’re not helping a kid or something and I’m fine with that. That’s just the way our, that’s our calling, man. We love it.


Mike Ayala: More properties, More investment Partners.


Josh McCallen: We need more properties. We went out this year to buy five resorts, actually eight total we tried to get, we had three under agreement. It’s been an aggressive year because as you know, everything else is not on sale. Multi-Family self-storage, everything’s expensive and overpriced, maybe. Resorts and hospitality is actually on sale. So I’ve been trying to buy, I mean, this is like what they say with this is a Warren buffet moment for us, buy the damn things when they’re on sale. But the bankers have been the challenge, not the investors. Everybody wants to join us. So we’re trying to figure out the banking model because this is just a deep thought Mike, when the banks will throw money at you, the assets go up in value sometimes more than they should because there’s so many bankers throwing money at you. When bankers won’t throw money at you assets go down in cost, but maybe having a higher intrinsic value, it’s that whole anomaly. So we are betting on the long-term with our projects.


Mike Ayala: I like it. It’s good stuff.




Mike Ayala: Hey, this is Mike Ayala.


Kara Ayala: And Kara Ayala.


Mike Ayala: Kara, I don’t want to brag or anything, but I definitely label us as a high performing couple.


Kara Ayala: Well, I wouldn’t object to that.


Mike Ayala: What I mean is we’re aligned. We work together, we achieve together and we aim high in everything that we do


Kara Ayala: And we succeed together because we know how to support each other to make sure we reached those goals.


Mike Ayala: In business and in family life.


Kara Ayala: It wasn’t always that way though, but we’ve grown and we’ve learned and just reap the rewards of learning to communicate better and working together in a very deep and valuable level.


Mike Ayala: Yeah, and making our partnership thrive as a couple is something that has just accelerated our growth in a ton of ways. And that’s why I’m so pumped to share that with other couples through our next level of couples mastermind.


Kara Ayala: Yes, I am so excited about this because it’s another thing that we get to build together. And it’s something I wish we had for ourselves as a tool to use years ago.


Mike Ayala: We’ve still got slots open for the next level of couples mastermind, which we designed for high performing couples who want to get in the room with us and other couples to focus on growth.


Kara Ayala: Growing your relationships, partnership, your wealth, just growing everything by making that bond as strong as it can be.


Mike Ayala: The mastermind includes a couples mapping and goal setting retreat in Austin, Texas, and just so much more. It’s going to be awesome.


Kara Ayala: It’s going to be so awesome.


Mike Ayala: You can sign up today at www.nextlevelcouple.Com. The event kicks off in January and spots are limited.


Kara Ayala: Hope to see you there.


[Interlude End]


Mike Ayala: You may have already alluded to this or answered it, but what is the single piece of advice you find yourself sharing the most?


Josh McCallen: You know, our capital hacking podcast is all about the principle that kind of changed my life. And that is capital is actually more than cash. So everybody listening here is building their human capital right this minute. And between you and me, I think, you know this, you and I would take a great colleague, a great young entrepreneurial staff member someone we could build another business unit around, actually it would be more valuable their human capital that they’re building than a direct investment sometimes. So a direct investment of half a million dollars may, It’s absolutely fantastic. And we appreciate it, but boy, we need teammates right now that are going to help us shoulder the burden so that we can keep going. Cause we just like your groups and all the things that you do. We actually have a lot of great opportunity. Now we just need teammates that that can keep up with the growth. So human is actually more important than cash. So everybody listening has probably more value they can add than they thought, because I think we all get tempted to think investors have all the value to add and I love investors. We created a whole community about being good to our investors, but we like to call it a more of a fair trade. You know, we put together and That’s why we changed our terminology to capital syndicator, not a real estate syndicator. We call it capital because I’m aggregating some of the best people. Like if you come to our learning grow events or whenever you can come to one of our events, Mike, you’ll be like, oh my gosh, that’s the guy Who’s the vice president of hospitality and Operations, this is the vice president of development construction. These are like world-class players. Yeah. Because guess what? It takes those world-class players to make investments work. And anyway, so we’re really focused on people right now.


Mike Ayala: I love it. And I’ve been keying in with, you know, some of my business partners. And we’ve talked about this on the podcast with some of the clients that I coach. I don’t know exactly when this hit me, but I want to run it by you because I think this a lot of times when I mentioned this comment, people look at me like deer in the headlights. And I think everything that you’re talking about is like the core thesis of this. And I don’t remember exactly where I was over the last, It was a year, year, and a half ago when I was talking to somebody. And it’s interesting as you know, real estate investors, we’re really comfortable taking a hundred grand and putting it into an asset or whatever. Let’s say it’s a million dollar asset. We put a hundred grand into it. So 10% down or whatever. And then we expect, you know, a 10% return just using simple math because I’m not that smart. And so you know, it makes $10,000 a year. We put a hundred thousand dollars into it cash and put a bunch of leverage on it. And we’re happy because it’s 10% return. But how many people will not put a hundred grand invested into a human or when they do say, Hey, I got to put this a hundred thousand dollars salary out there. They expect this human to just increase their revenue by like unreasonable terms. And really at the end of the day, I’ve been challenging some of my clients and thought processes lately. Like if we would just think about humans and when you say human capital, like, that’s why I wanted to just kind of run this by you because I know you’ll get it. Like so many times when I’m like, just hire, go hire somebody. Like you need to get out of your own way. My clients will go, Like their eyes just start spinning. Nobody’s going to do it as good as me. I can’t, I don’t have enough capital. These are real estate investors. These are people that understand leverage, but they don’t understand leveraging humans like leveraging people.


Josh McCallen: Really. Yeah. I mean, this is, I mean, you know, we changed our department about four years ago from HR to human capital. So  if you work with us, you go through the HR, HC department, not the HR department. And we train every week on capital, we teach them the fundamentals of our service culture and commitment, and then we teach them on their skills. So I have overcome that challenge mentally. But you know what it takes if you’re going to agree with your philosophy, Mike that we can invest in people in and their return on that doesn’t have to be 7000%. It can be a hundred percent return on their money and consider that a win 10% would be the bare bones by the way, you and I would probably, it would be hard for you not to spend a hundred thousand dollars on a teammate only brings in 110,000 new or, you know, all things being equal.


Mike Ayala: Just thinking about net.


Josh McCallen: Yeah. I mean, I think the metric for me is usually I’m excited about bringing on an executive if we can expand the business plan. And then as far as replacing myself, that’s been my goal. Like there’s a deeper question you’re asking, can you replace your skillset in your company, so you can grow the company, very deep stuff we’re going into right now. This is very much like the EOS system. And I’m sure you’ve heard of that. I’m sure you talked about the entrepreneurial operating system.


Mike Ayala: I have an amazing EOS. She’s awesome.


Josh McCallen: You have an implementer.


Mike Ayala: Yeah.


Josh McCallen: Yeah. So we’re in the process of that right now, we’re using the system. We started with EOS and then we moved over to a system called the elite system with Don Weiner elite execution system, EES based on a lot of the same principles. And I will tell you, it is brutally hard to transition out of being a strong performer in your business to a strong performer on your business. And I’m not saying we’re even hitting 50% out of a hundred right now. We’re not, but we’re doing the discipline. You know, we’re changing, we’re changing our processes, our meetings, our titles, our org charts, our standard operating stuff. So we’re in the middle of that right now. But back to your point, I am a firm believer that as you become an entrepreneur, hopefully you start to realize how wonderful it is to develop talent and to let talent lead. I guess there’ll be a test Mike in a year or two, a couple of years, you can come back. Remember how I taught my bigs, middles and littles. And if you’re a big you’re in charge of the middles, that philosophy is what I think you’re getting at too. If you can insert talent at any of those levels, they can take over the portions you were doing on the other levels. You’re doing the right thing. Now, it all comes down to, can you actually implement a new teammate efficiently? And none of us are great at that. I remember Jack Welch. I think he’s the GM guy, right? He said, 50% is the best he ever thinks he got to. So half the people were total disasters, half the people were right. So we also have to recognize that my wife loved that. Like five years ago, we heard a speech on podcasts, brought her some recording. She’s like really 50%. Cause she gets, she and I of course complement each other. So she always gets furious If I hire the wrong person, then you do every once in a while, you hire the wrong person. And she’s like, well, why did you do that? I’m like, guess what? I’m not perfect. I get it. I made the wrong mistakes. So this year we did actually hire a few executives in the anticipation of growth. And I was all about it. Cause I was like, I need a key player over here and who can do 30 hotels at a time. I need to keep player over here. Now we’re probably going to hire into fundraising because we’re growing that as well. And I need some more support there, but you know, I recognize my weakness. And before I hire another senior teammate, I’m going to learn the process of hiring and implementing at a higher level. So anyway, that was me going to giving you all my mistakes.


Mike Ayala: No, I think it was good. And you know, when you’re even talking about, I mean, Gino Wickman talks about this, like it really takes a year. I mean, unless you see it immediately, it takes a year to figure out if, you know, if somebody is really going to make it or not. And I read a Harvard study that it takes the average person for an average position. We’re not necessarily talking, it’s an average position. It takes eight months for them to figure out what their core job really is and be fully functioning at it, which is interesting in itself.


Josh McCallen: That’s interesting. I wonder, I always say it as an entrepreneurial company, We don’t have that kind of luxury, especially if you’re expensive and we’ve hired some very expensive players lately. And we came down to using the other thing that Gino and those people talk about, which is identify your core values and stick to them, hire and fire for those reasons. We’ve boiled it down to because we’re a rapid growth company. We really are growing internally each year, year over year and then expansion goals. So we have both types of growth. And at this point I realized, you know what, we’re not going to hire anybody that can do 30 hotels at a time. You know why? Because they probably don’t know how to do work. Because when you’re doing 30 hotels at a time for Marriott, you have 16 different crews doing each thing and managers doing management of managers. And then you get to take all the credit. I’m like, you know what? That person probably doesn’t actually not open up a hotel. And so what we’ve realized this year is the word scrappy. You know, we love the idea of scalability, but scalability comes after you prove to me you’re scrappy. Like we’re kind of in that stage, Mike, where we’ve scaled back, we actually had a big kind of revelation or epiphany as we’re going through one of these EOS type systems where I’m like, I made that. That’s why that mistake happened. Cause I was thinking of scalability over scrappy. And we’re not big enough to make that kind of mistake yet. We don’t want to make any mistakes nobody does. But if you’re going to make a mistake, aim small, miss small from the movie, [35:04 inaudible], aim small, miss small. So right now, you got to be talented enough, but more important than talent is you have to be scrappy, scrappy to us as you’re going to get your hands dirty when you need to get your hands dirty. And you’re going to understand the pieces and the components to go into the success. And then as we get bigger, you’ll move up a scale instead of coming in too high and not knowing how to get back down.


Mike Ayala: You know, it’s interesting. Just, I mean, obviously we’ve had other conversations, but even just sitting here and anchoring in and you talked about your values it’s one thing to scale an organization and have that organization keep up with systems and processes and you know, HR, but when you’re talking about human capital and that whole philosophy and how important that is to you, I mean, that’s even harder to scale, right?


Josh McCallen: It can be harder to scale. So I do think I was at a conference the other day and someone said to this guy, you can do it this way. It’s easier. You can do it this way. Why are you doing it this way? And he said, because I believe that’s a higher calling and I just feel called to that. So for us, it is about developing the people and it is harder this way, to be honest with you, but I think it’s more enduring. So let me give you one stat that has made me feel comfortable, that we might be on the right track. We made it through Corona and COVID without having missed a distribution without any problem, any fundamental problem. Clearly we got punched in the belly. We’re in hospitality. We pivoted because we had the right kind of people to pivot into different experiences that so weddings and stuff at a higher rate and whatever, we had 16 different things we did during the pivoting. They all seem to have worked out. So we came through it stronger. We now have multiple new revenue streams that work, even after Corona COVID. But the other big thing is we’ve never had, you know, how like you go to a restaurant and you’re on the Austin, right? You’re in Austin now. And some restaurants still say this section’s closed due to no staff. Or this counter is closed because of no staff or our hours got cut by two hours because of no staff. We’ve never had that. We’ve made it through with staff and it’s because staff have incurred, recruited other staff to and stayed. And we ran, I would say 10% less staff than we would have liked during some of the peak times, but not 50% less. And now we’re at full staffing again, and our prices are higher. We do pay more, a little bit more. Everybody did during those growth, those growth months of the COVID, but we have a happy, productive staff. And I credit that to sticking true to the core values. And we never told you what the three core virtues are. We say these three virtues, you cannot work with us. Not because you’re not great at your job, Mr. Marketing expert, or Mrs. Front desk expert or whatever. But if you don’t want the three virtues of [37:53 inaudible], so our core businesses [37:56 inaudible] revive the soul in French. And we run businesses with this culture. And we say, you got to have three virtues, joy of service, humility of heart, and ministry as your goal. So joy, humility, and ministry. Do you want those three things? And what we, we explain every one of them, joy just means don’t take the job that pisses you off. Every job has its goods and its bads. And if you hate these, this job, but you took it because we offered you a paycheck, don’t take it. We’ll fire you pretty quickly because you actually have to like it. You got to bring that with you. Humility means you seek humility as a strength and not everybody in the world does. So we try to only hire people that see this point. I said, listen, this makes teamwork more possible. This makes you are grateful for the work you get to do. It permeates everything. Plus it shows that you are equal to dignity of every other teammate and just as equal to dignity as the guests, that’s humility. And then ministry means this is the secret. As a matter of fact, there’s probably going to be a book coming out called soulful service eventually. For all industries, if you can encourage your teammates to choose, to make their work a ministry, it makes everything so much more valuable in ministry, just as a spiritual word, but it’s a fancy word, but it really just means two small things. The tasks of your work, not so that the task gets done, that’s just surface level. But so that the beneficiary of the task feels loved. So it’s like a really weird thing. I always say, think of Thanksgiving charities. When you go out to feed the poor Thanksgiving, have you ever done that Mike? You guys like bagged turkeys or something like that? I did it. I did as a high school guy. I should be more charitable. I should do it now, but I remember, you know, what they told me to do, make a brown bag of canned goods and make 50 of them. I’m like, okay, I’m in the back bagging canned goods. Then they tell us, driving around with these people and drop them off at these people. So we get out of the car, we hand them a bag. What the heck about that as charity or ministry, it was the intention that the person feels loved. So the work was simple and not fancy. And yet the ministry happened because they felt our love through the paper bag. So we always say, you can transmit that kind of love through any kind of work. And we want to hire people that actually want to transmit good. It’s just a cool little thing. And if you put together hundreds of people vibing that way, man. It’s powerful. You got to come up and see it bud, come on out to one of our resorts.


Mike Ayala: I am coming. You had me at come on up.


Josh McCallen: Come on. You’re a tough sell. You’re very tough.


Mike Ayala: No, I’ve been watching some of your events from social media in a distance, and I’m like, I got to go to that. Do a great job. So Man, this is awesome. You’re awesome.


Josh McCallen: Yeah. You know what? This is how it works. This is why you do investing for freedom too. The reason you do what you do, I watch you. And the reason you’re so bold online, speaking the basic truth, like right? You know, independence is based on you making commitments for you that are, you know, set a goal, strive towards it. You’re going to have to make sacrifice. But when you get there, it’ll be worth that. And shoes, I imagine part of the core philosophy is when you’re investing for freedom, you’re probably not doing what everybody else is doing. There’s a certain contrary and understanding of life because everyone else’s trapped is kind of your thesis, right? Like if you do whatever, what we were told to do when we were going through the indoctrination machine, you’re trapped. And so what you’re doing is opening people’s eyes to that. And I think it’s your ministry, man. Imagine you get excited Like we would, if someone were to hear what you said and found some freedom.


Mike Ayala: That’s a huge win. Speaking of finding freedom you were talking briefly about this efficient income fund. I’m so curious.


Josh McCallen: Tax freedom.


Mike Ayala: Well, like, you know, and you mentioned him, but I remember like Tom Willwrite the first time I was listening to him. He said, you know, you want to know how to make more money, save more of what you already made. And I was like, oh my God. Like that was revolutionary. Even though it was like so simple, right?


Josh McCallen: Yeah. Oh, he’s revolutionary. So those of you that haven’t had a chance to meet Tom Wheelwright, I’m sure. Has he been on your show yet?


Mike Ayala: No.


Josh McCallen: I’m sure he would love your show. You should just, I’ll send him a note if you want, but even on our show and I don’t know him on a personal level, but I’ve been to many of his seminars, many of them in his book, everybody can download his book on audible right now. It’s called tax-free wealth by tax-free wealth. I’m looking at it. By the way I drink my own. Kool-Aid look it’s right there. It tax free wealth tax free wealth. So he just basically simply says, if you read the IRS tax code as a roadmap to wealth and freedom, it’s right there in front of your eyes. And you know, for guys like you and I, we help make freedom available for so many people because one of the best ways is if you buy real estate and then you get the benefit of depreciation on page 36, he writes in bold letters. Depreciation is what does he call it? The magic. He said, depreciation is like magic. And it’s because you own something that’s throwing off positive cash to your bunk or your bank account. And the IRS at the end of the year says that they consider it a passive loss. And that magic is how the wealthy have always protected their balance sheets from taxes. They buy depreciating things. So lots of fancy things I just said there, if you don’t know what I’m talking about it, it gives you a chance to read that book or to maybe hear another show that he’s done. But in general, he’s saying, if you change your facts, that’s another famous quote of Tom, right? Change your facts, what you own, you will change your tax. Yeah, because I grew up like everybody thinking the tax taxes were a penalty. If you make more money, you just get more penalty. But his whole point is why don’t you just buy an asset that depreciates, and then you will pay less tax and have a higher balance sheet. Well, anyway, fast forward real estate is awesome for that. You know, you, you probably do the, do, do a bonus depreciation on your funds. Or cost segregations. Yeah. This is where for those of you listening, this is where you can buy a million dollar building and the equipment and the stuff that’s inside the HVAC and all that, the roof, even things that don’t last for very long, they let you write them down through a cost segregation. So you get a pretty big negative one document. At the end of the first year, we took that strategy learned from some of the best. And we built small funds, like a million dollars, $2 million that allow investors to invest 10 grand, a hundred grand and whatever they put in, they get back in a negative K1 that year. So if you write 10 grand in our goal is to make sure you have a negative 10,000 K1. Why is that powerful? Because you still own it. The IRS is letting you say you don’t own. Because of depreciation and got a loss. So you could theoretically write the check for whatever you have in passive income this year, that you didn’t offset with some other asset, 10 grand, 20 grand, a hundred grand, and then save all of the taxation you would have been banged on for that year. So these little efficient income funds think of them this way, we’re doing what bank of America does. We’re doing What? The hedge funds like Blackstone and Carlyle group, we’ve created a captive leasing fund. And we take this equipment that we would have bought anyway with cash as a, as an operating company. Or I would have leased it as an operating company because the resorts have tons of equipment, golf carts, kitchen, equipment, rental equipment. We buy all this stuff and we rent it to our guests, right? Or we use it. We would normally sign a lease with some big anonymous wall street banker. They would own our assets. We would lease them. They’d get all the depreciation. We’d pay a fair rate. Well, we figured it out is we could pay our investors that massive return. I mean, massive return and actually save a couple of points and still it’s good for the investors, but it’s way better for us than it would have been if we just gave it to bank of America. So we created these very strategic, efficient income funds that are efficient for the investor. No taxation, they’re efficient for us, lower tax, lower cost. I mean, and basically investors get a hundred percent bonus depreciation and checks through ACH, Just for a few years, you’re all paid back. You make your money, you call it a day. It’s big boy stuff, man. It’s big boy stuff, but we made it achievable for every accredited investor. Just like what you and I have been doing for years. How cool is it when you take the strategies that only, only the banks used to be able to do and just give these strategies to regular hard-working business owners, investors, people like that.


Mike Ayala: You’re doing it. I mean, I bet the moment that that clicked for you. I mean, you’re, you’re doing it on, you know, something that, like you said, you would already be leasing it from….


Josh McCallen: I be paying the debt anyway. So why not give all the wealth to my investors? That was our strategy. And it’s big just to give you a sense. I mean, it’s a combination of your preferred returns. Single digit preferred return is not double, but then 40% typical tax savings for somebody of higher learning income. So you take a hundred grand, you get 40 grand in tax savings potentially year one, plus you get yield. So your IRR are in the 30% conservatively. Why? Because the tax code has incentivized us to do this. And of course you have to check it out and make sure it’s right for you. But it’s a killer cashflow strategy that gets rid of taxation.


Mike Ayala: That’s cool. Well, and it’s, I don’t want to say backed by, but you got to, you got a great company. I mean, obviously anybody listening to this has heard how amazing you are at doing what you do when it comes to human capital and running the organizations that you run. And so I, again, I’m not saying it’s backed by that, but that whole company is the one that’s making the payments for the golf carts.


Josh McCallen: Yeah, you said it perfectly. And that’s why, you know, recently the family office club, Richard Wilson, and I partnered on these cause we’re on our third one. And he, and I’ve gotten to know each other over the years. He’s that guy that every single one of us gets emails from him I swear every week. I mean, Richard C. Wilson, the family office club. He’s a great guy. I don’t know if you go to any of his events, Mike, you should come with me. But he he’s been watching that fund and he did a webinar with me and he’s like, I had to join you. So he ended up partnering with us because he’s like, this is the number one question I get at family office level is do you have any end of year tax incentivized investments? And he’s like, this is the nicest one I’ve seen. Cause you don’t, you don’t, you get paid back. We pay monthly, we pay a monthly 25% cash on cash. Believe it or not. It’s unbelievable. And you get your money back quick and now you’re done and we’re done. You’re done. It’s very cool.


Mike Ayala: I love it, man. Well, what have we not talked about that you think.


Josh McCallen: We haven’t talked about? My stylist new jacket, cancel any equity jacket. I’m the logo guy, man. I’m in all these little Facebook videos. I always have my different logos on, but no, no, I think we’ve touched everything except for when are you coming up with the kids to our winter Wonderland up here, we call it vintner Wonderland at one of the resorts, ice skating and villages and hot cocktails. It’s the best Mike, you got to come see it.


Mike Ayala: I would love to, at some point, you know, I’m probably entering that phase where I maybe get to start bringing grandkids.


Josh McCallen: Are you really?


Mike Ayala: Well I don’t want to, I don’t want to rush.


Josh McCallen: Don’t rush it.


Mike Ayala: Yeah. Dylan’s 21. So I don’t, I mean, I was 21 when I had him. So we’re getting there. We’re getting there.


Josh McCallen: Yeah. Well, no seriously brother. We’re ice skating up here. We have a professional hockey rink, like call out outside. You got to look it up to believe it at Reno winery. And I do honest to God would love for you to come up and be my guest and bring the family. And it’s so fun and we bands, you’d love it.


Mike Ayala: You know, we just got back from Thanksgiving in Wyoming and my wife made a comment cause there was an ice skating rink in rapid city and she made this comment. She said, I’ve never been ice skating.


Josh McCallen: Ice Skating’s harder than it looks. And it probably looks pretty hard. So I I’m always amazed that it’s full. You build an ice rink and we have like 500,000 people a day go on that ice rink. And then they, of course they come off the ice rink and buy delicious cocktails and fire pits and sit in front of music. So I’m telling you, this is as easy as it gets. You get to stay at the warm hotel. You got to come. I don’t come. I’m not going to leave. It’s open after the holidays. You got to come after the holiday.


Mike Ayala: I’m going to come see you. Well, good stuff, man. Appreciate it. Where can people go find you if they want to know more about the efficient income fund or accountable equity or Josh?


Josh McCallen: Well, like you I’d love for anybody who would enjoy listening to some shows. We have the capital hacking podcast. It’s just capital hacking. Mike’s on it. Episode 112, he was on the a 112th episode Mike Ayala and it was awesome. You’ll hear things you’ve never heard before. Check it out at least that episode. And then www.accountableequity.com spelled out two full words. That’s our that’s our community of investors all over the world.


Mike Ayala: Nice man. Well, I’m inspired. I’m expanded and I appreciate your time. I know my audience is going to love it. And I’m still debating. Is it going to be bigs, middles and littles or is it going to be a more, is better? I’m not sure what yet.


Josh McCallen: More is better. You know, Yeah. I love either one, man. The bigs, the mids and the littles. You got to see them too, man. They’re on some of my YouTube, my videos, I cracked me up this weekend. We did a video and they were following me around and I was pretending, I didn’t know who they were. So I have sometimes my jokes don’t land Mike and I have a feeling there’s people that are probably watching that going, who are those kids? They’re following them around. Every video they’re in is because I kept saying, who are these kids? Get them away. Anyway, I find it funny, but last joke. Okay. Cause this, this actually happened a week ago. I was doing a, I get to do a guest speaking at our own training and I make a joke cause I’m cutting weight, Mike. You’d be very proud of me. I’m down a bunch of weight. And I’m in front of the audience and there’s a picture of me from 20 years ago and I’m like 180 pounds. Now I’m like 220. And I looked so much thinner. And I point to one of our teammates. I said, Brianna, yes. I promise I will cut the weight. I know you’re always asking me, when am I going to cut the weight? So I’m joking that Brianna is telling me I’m fat. And I was just so dead pan joking. And afterwards she got harassed by a bunch of other teammates were like, how could you talk to Josh like that, man? That’s not nice. She’s like, I didn’t say it. He said so anyway, my jokes sometimes do not land. And people get mad at teammates for calling me fat, but she never did actually. And she’s right. I need to cut the weight. See right there. See that’s confusing. Did Brandon actually say I need to cut the weight? I don’t know.


Mike Ayala: I think we should give the audience Brianna’s emails so that they can find out.


Josh McCallen: She is so mean to me, Brianna is so mean to me. She’s out there serving cocktails and yelling at me about my weight. It’s the best.


Mike Ayala: Well again, brother, I appreciate you. And look forward to coming and visiting.


Josh McCallen: Thanks buddy. Thanks for everything.


Mike Ayala: Cheers.

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