JF1155: Biggest Secret For Financial Freedom with Colton Lindsay
Colton Lindsay is a top 1% sales agent in his market. Real estate sales are only part of his focus, Colton also focuses on helping others reach financial freedom. He has an entire course and training platform to teach people how to manage their cash flow, which he says is the biggest step in reaching financial freedom. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
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Colton Lindsay Real Estate Background:
- Real Estate Agent with Keller Williams Success Realty
- Closed over 120 transactions and over $20 Million in volume sales over the last two years
- Became ranked in the Top 1% of the sales agents in his real estate market by the age of 28
- Passive and residual income expert through real estate and online digital marketing
- Based in Salt Lake City, Utah
- Say hi to him at http://winningtheinnergame.com/
- Best Ever Book: Ask and it is Given
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Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any fluff. With us today, Colton Lindsay. How are you doing, Colton?
Colton Lindsay: Great, I love my life! How are you doing?
Joe Fairless: I’m doing well, and looking forward to dive in. A little bit about Colton – he is a real estate agent with Keller Williams. He has closed over 120 transactions and over 20 million dollars in volume sales over the last two years. Became ranked in the top 1% of sales agents in the real estate market by the age of 28. He is based in Salt Lake City, Utah. You can say hi to him at his website, which is in the show notes.
With that being said, Colton, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?
Colton Lindsay: Yeah, absolutely. We’re working right now to expand our sales team; we’ve got two senior sales agents, we’ve got three junior sales agents, a full-time admin and then myself. So that’s one part of our business, and obviously, I’ve been working a lot on growing our online presence. I have partnership in a company called Fearless Agent, coaching and training; it’s where we train real estate agents to [unintelligible [00:02:12].25] their schedules and their systems, and then what’s called Financial Freedom Nation as well. One of the things I learned where people are failing, whether it’s a small business owner, a real estate professional, an investor or whatever – they just don’t know how to manage their cashflow, and this is what is actually keeping people from becoming financially free.
I have a whole course and training program on how people can manage their cashflow so they can actually get money to invest and become financially free rather quickly.
Joe Fairless: And are you financially free?
Colton Lindsay: I am. I became financially free by the age of 31.
Joe Fairless: Sweet, congratulations. And how do you define “financially free”?
Colton Lindsay: Financial freedom in my definition is that your passive and residual income pays for your desired lifestyle. If you can wake up, fog the mirror and still get paid, you’re financially free. If you can’t do that, then you’ve still gotta go and work. Now, there’s nothing wrong with working and active income, but you don’t wanna have to be forced to work, in my opinion. You wanna be able to live life on your terms.
Joe Fairless: Yeah, I love that. So let’s focus on the Financial Freedom Nation, managing our cashflow so that we can optimize our finances; talk to us about some mistakes people make.
Colton Lindsay: Number one is they just don’t have a system at all. In my case studies I found out that 90% of entrepreneurs, small business owners, salespeople, even employees that work for corporations or the government – they don’t have any system to manage their money; that’s 90% of them. And of the 10% that have maybe a system, they look at it one time or less per month, so that tells me that it’s just a big old avoidance of the situation, and it stems back from growing up, whether it was your parents, your school, your religion, your community… You just learned a financial blueprint that didn’t teach you financial success, didn’t teach you to manage your cashflow. So that’s number one – there’s just no system to even manage the cashflow at all. They don’t know where to put the money, they don’t know where to start.
I get these questions all the time, Joe, like “What’s my best way to invest? Should I borrow money and do a fix and flip? Should I buy a buy and hold real estate property? Should I put money in the stock market?” and my first question is “Well, what’s your cashflow management system?”, and they’re like “I don’t have one.”
A better question is not “Where should I invest?”, but the better question is “How do I start to manage my cashflow?”, because if you can start managing your cashflow – and this is what I teach in Financial Freedom Nation, it’s seven different accounts, one of those being country donations… I call it “country donations”, but it’s really your taxes. If you can lower your tax bill, that means that there’s more money that you can keep to be able to operate your life. You’ve gotta operate your life like it’s a business, and the biggest, most important account is what I call your financial freedom account; that’s the bucket or the account that you pay yourself first. That’s [unintelligible [00:04:58].24] The Richest Man In Babylon; pay yourself first, so that you can make interest.
Just to give you an idea, if you took $1,000 every year for the next 25 years – just $1,000 a year – and you invested it to 10% return, which is very doable, just so you know… 10% after 25 years of only $25,000 total invested, you’ll have over $83,000. Now, imagine if you can do more than $1,000 a year, which realistically you can, if you just start the system. There’s two parts to this financial freedom. One is it’s actually the outer world technique, Joe – “Well, how much percentage do I put into my financial freedom account? How much do I put into my long-term savings? How much do I put into my necessities?” That’s the outer world techniques, but then there’s the other side, which is your inner world techniques – what’s keeping you stuck? What’s the limiting belief that keeps you from even identifying where you need to move to next? We help people break through those beliefs, get unstuck and take action, because now is the time to do it; tomorrow is too late.
Joe Fairless: So the first thing is not having a cashflow management system, the second would be limiting beliefs – did I capture that correctly?
Colton Lindsay: Yeah, absolutely. When a dollar comes in, how do you divide that up? Most people just put it into their bank account, and you’ve got a couple types of personalities – one is a saver, they’re a hoarder; they just want a big ol’ nest egg and they just keep it in their checking account and everything comes out of there, but they never grow it. It just kind of sits and maybe grows gradually.
The other is the avoider, the guy that just doesn’t pay attention to it at all. He’s just like “You know what? I’m not even gonna look at it. It’s too much stress, I don’t like it.” You’ve got your spenders, people that spend more money than they even make, and they just spend without regards to where it’s going. You’ve got money monks, people that are spiritually inclined to say “Hey, money can’t bring me spiritual salvation”, so they actually think money is evil, and that’s just not the case. And these are just a few of the personality types here. You’ve got the amasser – he just wants to amass a large fortune, because it helps his ego.
We all have a part of these personalities, but it’s identifying the good from them and the bad, and then just applying the good to your life.
Joe Fairless: That makes sense. As far as your investments with the passive and residual income, when you look at the whole pie of your investments, how does each slice of the pie break out in terms of where you’re bringing that in from?
Colton Lindsay: Great question. What I teach is a bulletproof investment portfolio, and I believe – and these are just recommendations – it’s in the stock market anywhere from 20% to 30% of your portfolio. Now, a lot of real estate people are saying “Well, I’m a real estate guy” etc., but the truth is in stocks you can get anywhere from 20%-40% return on your money per year if you do it the right way.
Real estate – I believe anywhere from 20% to 30% of your portfolio should be in real estate. I particularly believe in buy and hold. Don’t wait to buy; buy and wait. Not to say that fix and flips you can’t make some money there – you can, but that’s transactional, it’s not money pays you for waking up every morning. You’ve gotta operate a business with that, right?
Next is commodities like silver, gold, oil – things like that, things that hedge against inflation, those types of things. And I believe maybe about 10%-15% commodities is what we teach. Business is actually a very huge asset I think a lot of people miss in being able to create financial freedom – if you can create a business that operates without you, that creates a mass amount of cashflow, that one is very powerful, and I think that anywhere from 20%-35% of your portfolio should be there.
Then the final area is cash – I think that you’ve gotta keep about 25% of your portfolio in cash… Because what happens, Joe – remember 2008, the market shifted, and people started selling their assets just to pay for their liabilities. Then in 2011 when assets were really cheap, people didn’t have the cash to buy new assets for the most part, plus they’d lost all their assets, so when the market goes back up, towards 2015, 2016, 2017, they didn’t make money on their assets when because they sold them, they didn’t make money on the assets they purchased because they had no cash to buy it. So if you keep your cash there – it’s not about timing the market, it’s not like “When is the next crash going to happen?”, it’s not if, it’s when, but you can’t time when, so when it does happen, just have cash so you’re ready for it. And have cash so that you don’t have to sell assets to pay liabilities.
Joe Fairless: With your real estate portfolio bucket, the 20% to 30%, what properties have you purchased and that you have?
Colton Lindsay: I like to buy two-bedroom one-bath condos – those are my favorite, because I target lower working class. So if the market is hot, there’s renters for it. If the market is cold, there’s renters for it. So I try to get properties that are for the working class, so that there’s always high demand for those types of properties. That’s my goal.
Joe Fairless: Got it. And what was the last one you bought?
Colton Lindsay: The last one I bought just a couple weeks ago, and I think I paid like $49,000 for it. It’s a two-bedroom one-bath, 700 square feet, I put maybe 5k into it, and it’ll rent for about $750 here in the area.
Joe Fairless: And how many of those do you have?
Colton Lindsay: Of those ones I have five right now that I have free and clear.
Joe Fairless: Got it. So free and clear – how come you choose not to put debt on it?
Colton Lindsay: Great question… Because you can’t grow wealth quicker with leveraging it; when I first started buying these properties, I didn’t wanna have to lie awake at night and think “Okay, well if I don’t have a tenant in there” or “If I have a sewer line break” or “If I have some sort of issue… I just don’t wanna have to deal with coming out of my other business or my own pocket to fix it. I wanted that business to sustain itself. Actually, the newer properties we’re starting to leverage out through refinancing, through doing 15-year notes through a local bank here, so that we take that cash and we reinvest it to other properties. So we’ll take it from 5 to 10 probably in the next 12 months for sure, that part of the business.
Joe Fairless: Okay, so you are going to be putting debt on it, and taking that money and investing in other stuff.
Colton Lindsay: Yeah, absolutely. One of the other things too that I have with those — if I have a giant line of credit… So if I wanna do a short-term, three to six-month hard money loan, I can do that. Or if I come across a good deal to do a fix and flip, I’ll do that. So it’s not like I just set the money there, I leverage that money. But when we first started, I just didn’t want the headache.
Joe Fairless: What other properties do you have besides those condos? Or is that the portfolio?
Colton Lindsay: That’s what the portfolio is now; I’ve liquidated everything else. When I originally started, I started with single-families as well, I started with spec homes, which really was my worst idea ever; I won’t do that again.
Joe Fairless: Why?
Colton Lindsay: I did it in 2007, I built a house with 350k and sold it for 270k… And it’s speculation, it’s capital gains, and I prefer to do passive income. I don’t wanna invest for capital gains; capital gains to me is a bonus. It’s a way to build wealth, but it’s transactional and it’s a business; I think it falls more into the business category than it does real estate investing.
Joe Fairless: I love the buy and wait approach. The approach that I take is similar, but I always wanna do a 1031 exchange. Is that in your arsenal?
Colton Lindsay: Yeah, that’s our long-term plan – to upsize to more apartment complexes. We will with time, when we have enough properties and we have enough areas there. But honestly, my real estate is one of my smaller focuses right now; we’re doing a lot with more of our business and online businesses, because there’s a lot of residual money made online right now. So that’s where a lot of our focus is.
Joe Fairless: And when you say “we”, who’s “we”?
Colton Lindsay: People I partner with. I’ve got several different partners. Bob Loeffler is one of my partners at Fearless Agent. I have a social media director, so she helps me market through all of our social media. I’ve got just some different coaching programs and partners there.
Joe Fairless: How did you find your social media director?
Colton Lindsay: I went through a recruiting process. I built my sales team out, I learned that hiring and recruiting is really a huge part as a business owner, and I mastered that process there. So I defined what I was looking for in that social media director, I put out a bunch of ads, took in about 50 different applicants, boiled it down to about 4 or 5, and then narrowed it down to two, hired them both, one failed pretty quickly and the other one succeeded.
Joe Fairless: For someone who is hiring a similar position – and that person would be me, so I’m selfishly asking this – what’s the compensation…? And you don’t have to tell me that person’s compensation, but just generally, what would that position be compensated?
Colton Lindsay: I think that really depends on what the job description is. Basically, for what we did is I have a good social media following and it was becoming a challenge for me in being busy with my life and not wanting to work 100 hours a week to keep up with social media… So I just defined, “Okay, here’s my platforms – YouTube, Instagram, Facebook, and then we’re gonna be shuttling all of our audios into iTunes and Stitcher for podcasts.” So I needed someone that could organize a message, versus me just randomly crapshoot.
I defined what I wanted that message in essence to look like, what our target was, and our goal is to 10x our subscribers and our engagements. So I set that as the parameters, and then I figured out “Okay, well how many hours a week do we need for this?” and then based on that I put out just what I thought I would be willing to work for on it, and then I just kind of negotiated from there.
Now, each market and each place is different, so it could be anywhere from a 20-hour a week job to a 40-hour a week job, and then you’re gonna be anywhere from 2k to 5k a month, just depending on where they’re at with things.
Joe Fairless: That is very helpful, thank you for that. Colton, what is your best real estate investing advice ever?
Colton Lindsay: Do it now. Don’t wait to get started. Start buying.
Joe Fairless: How old are you?
Colton Lindsay: I will turn 33 this Saturday, actually.
Joe Fairless: Alright, well happy early birthday. When did you buy your first place?
Colton Lindsay: My first property I bought – I think I was 23 years old, and that was actually a spec home… So my first one, a failed spec home.
Joe Fairless: Well, they hooked you early.
Colton Lindsay: Yeah, they did.
Joe Fairless: So you said your focus a lot now is on the business side of things. What are some tips you’d give a Best Ever listener who’s looking to start an online business that’s real estate related or has real estate components to it similar to what you’re doing?
Colton Lindsay: I think you’ve gotta hire a coach and a trainer, because basically we’re living in an information age now, and your information must be relevant, and the information that you’re getting has to come off of the back of people that have walked the path before you. Everything I teach and I train is not something I invented, I learned it from someone else. So to get to where I’m at, I’ve spent a couple hundred grand in just education over the last eight years. So invest in yourself very first and learn the process, and then just start.
The key is start, do it right now. That’s the answer to all your life’s questions – do it now, because you might be dead tomorrow.
Joe Fairless: Who did you hire when you got started and how much did you pay?
Colton Lindsay: I’ve done several areas. I’ve started [unintelligible [00:15:51].06] in early 20’s with Garret Gunderson, the Financial Freedom Fast Track; I think that my first investment was about $7,500 there. I’ve learned from Adam Markel, Tony Robbins, Thomas Tadlock, and these are just a couple of them. One of them is called Success Resources America, an awesome company; I’ve probably invested 30k or 40k with that company alone in the last few years. I’ve done a lot with the Tony Robbins programs, I’ve spent a pretty penny with them; I have one-on-one coaches, business coaches… It’s just all over the place, a lot of different places.
Joe Fairless: For someone who hears those numbers – I’m not one of them, by the way, because I have a business coach through the Tony Robbins program and I embrace bringing on consultants and mentors, but for someone who hears those numbers and doesn’t have the same mindset that I have, where it is an investment and it is worth it, what would you say to that?
Colton Lindsay: Well, I’d say you can choose to be right or you can choose to be rich. You choose. So you can stick with your idea that “Hey, I don’t need that” and be where you’re at, or you can say “You know what, I prefer to be rich, I prefer to learn from someone that’s done it and produces at a higher level than me.”
Joe Fairless: Are you ready for the Best Ever Lightning Round?
Colton Lindsay: Yeah.
Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.
Joe Fairless: Okay, best ever book you’ve read?
Colton Lindsay: Best ever book I’ve read is “Ask And It Is Given” by Abraham Hicks.
Joe Fairless: Best ever deal you’ve done?
Colton Lindsay: The best ever deal I did was a 1.2 million dollar commercial property, which was pretty awesome. I loved that one.
Joe Fairless: Will you elaborate on it?
Colton Lindsay: It used to be a bar and a restaurant, and some of my past customers wanted to start a wedding venue or event venue, so we found it, purchased it; it was just a fantastic idea. We turned it from just being a place that was run down — it was actually remodeled really nice, but it was dead, the business was dead. It was located in a spot that didn’t make sense for a bar, so we reposition the venue to be a great place for a wedding and an event center, so that’s it in a nutshell.
Joe Fairless: What’s a mistake you’ve made on a transaction?
Colton Lindsay: Oh, man… I’ve made a lot of mistakes on transactions. I think one time I accidentally included some of my clients’ washer and dryer, so that sucked, having to write a check for that.
Joe Fairless: [laughs] I was just on a call with someone, the last call I had, the last interview I had, and he missed the home inspection deadline, so he had to pay for like chimney sweep and chimney line, or something.
Colton Lindsay: Oh yeah, that can suck. We missed closing costs once; that was a $5,000 mistake, so… Shit happens; you just deal with it and move forward.
Joe Fairless: And how can the Best Ever listeners get in touch with you
Colton Lindsay: Facebook.com/ColtonJLindsay. Check me out on YouTube, just google “Colton Lindsay”, or check out my website, ColtonLindsay.com.
Joe Fairless: Excellent. Well, Colton, thank you for being on the show, thanks for talking about your approach. You got into your portfolio allocation – stocks, real estate, commodities, business and cash, and the logic behind each of those, the percentages, as well as mistakes… Having a cashflow management system… I should have asked this – what system do you use? Is it a software, or an Excel spreadsheet, or something?
Colton Lindsay: We actually designed our own program. It’s a cashflow management program called The Financial Freedom Budget Tracker, and it’s all done through Excel. You guys can reach out to me if you want a copy of it.
Joe Fairless: Sweet. Well, thanks a lot for being on the show. I hope you have a best ever day, Colton, and we’ll talk to you soon.
Colton Lindsay: Okay, thanks. See ya!