JF2473: 3 Consistent Themes of a Good Mentor | Actively Passive Investing Show

Travis and Theo talk about how to find professional mentors and decipher if they’re right for you by listing 3 consistent themes of a good mentor. They discuss the potential downside of selecting the wrong mentor and what an incorrect mentor may look like. 

Best Ever Tweet: “Books are great, but people are better.” —Travis Watts

 

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Theo Hicks: Hello Best Ever listeners and welcome to another episode of the Actively Passive Investing Show. As always, I’m your host, Theo Hicks with Travis Watts. Travis, how are you doing today?

Travis Watts: Doing great, Theo. Let’s rock and roll.

Theo Hicks: Today we’re going to talk about mentors exclusively. We mentioned the importance of mentors all the time on the Actively Passive Investing Show, as well as in the Best Real Estate Investing Advice Podcast in general. But we rarely talk about the potential downsides of selecting the wrong mentor and what a bad or incorrect mentor event looks like. If you’re on social media or you’re in the real estate investing scene, everyone’s a mentor. So how do you know who to pick? How do you know what a good mentor is? How do you know what a bad mentor is? How do you sift through all of that? That is what we’re going to talk about today. Travis, do you want to introduce a little bit more about why we’re talking about this topic that we’re going to talk about today?

Travis Watts: Yeah, I think you clarify that really well. We do talk a lot about mentors on our show, but usually in a positive light. Saying things like, “You’ve got to have a mentor. Mentors are so great.” But are mentors always good? To your point, are they even necessary? Debatably, they may not be for you, the listener, but they might also be. We were talking before the show, no one’s really talking about this stuff. At least not what we’ve seen or heard. Talking about bad mentors, or why not have a mentor, or things like that. So we’re going to give both sides of the coin, just to be fair. But that’s what this show is all about. Theo and I are sharing some stories and ways to find mentors or find out rather if they’re right for you, basically. So Theo, why don’t you start out just by kind of reiterating some of the points that we talked about a lot? Good mentors, why have a mentor, powers of mentors, and then I’ll dive into the bad, the ugly, and give the other side of the coin.

Theo Hicks: Perfect. So again, this is based off of my personal experience, Joe’s experience, and then also interviewing and talking with a lot of active successful investors on the podcast, and figuring out what are some consistent themes between the mentorship that these people have gotten. I discovered three consistent themes of a good mentor. The first one, probably the most important, and the first filter you should use when speaking with a potential mentor, is are they actively successful in what they are teaching? So very simple. If you want to become an apartment syndicator, then your mentor should be someone who is actively still doing apartment syndications and is successful at it. By successful, that’s going to depend on what your goals are, but most likely it’s going to be “are they where you want to be?” So if you want to control a hundred million dollars in assets, then your mentor should have a hundred million dollars or more in assets. At the very least, eventually, should work their way up to that.

Maybe your first mentor might have done a couple of deals where they meet those active criteria so I don’t think there’s anything wrong with the stair-stepping mentors. But eventually, in a sense, the whole point is that you might come across someone who is just teaching you how to do apartment syndications or teaching you how to passively invest in apartment syndications, and they’re not doing it themselves, or they’ve done it before and are no longer doing it. Which might seem like it’s a good thing, but the world changes, the economy changes, investing changes so fast and so often now, that what worked for them 10 years ago might not work today. That’s the biggest one, you want to make sure that they’re actually doing what they’re teaching you. They’re not just a guru or a mentor, but they’re also an active investor as well.

Number two –which is kind of connected to number one– is that they have the connections. One of the powers of having a mentor, besides learning from their mistakes, is the power of connections. Something that’s very important is knowing the right people. For example, if you’re a passive investor and you want to invest in a bunch of syndication deals, for example, you can find a mentor who knows a bunch of syndicators so you don’t have to go out there and find them yourself, then go through a vetting process, and hope that you’ve vetted them properly, and then vet their deals fully, vet their market fully. You will still be doing these things, but the referral from a trusted mentor comes with a little bit more trust than you finding someone on your own. By them being active in the industry, they’re by default going to have those connections. If they’re not active, then not only are you going to be lacking from that perspective, they’re also likely not going to have the best connections.

Thirdly, this kind of applies more so towards active investing, but it still applies towards passive investing. This is the Actively Passive Investing Show, and if you want to achieve a passive investing goal, it’s going to take some planning and some strategizing. And something that is really good about mentors that they could essentially give you the same blueprint that they followed to get to their level of success. If your goal is to make a million dollars of passive income every single year, then you can find a mentor who has done that or exceeded that, and then you can get that blueprint from them for specifically how they did that. From setting their investment criteria, the number of deals, how they vetted deals, how they vetted markets, how they vetted sponsors, as opposed to… Again, this is something that happens more on the active side, is having a system where it’s not a do-it-yourself, if the mentor has a system that you are watching and maybe you get paid a little bit, but most of the work is being done by someone else. Because what happens when that mentor goes away? Well, you don’t know what you’re doing, because it’s been done by someone else the whole time.

There’s more obviously, but these are the main three. Are they actively doing what they’re teaching? Are they actively successful at what they are teaching? Number two would be, do they have the connections that you need to get you to your goal? Then three, are they providing you with a blueprint that you actually have to go out and then take action on yourself in order to accomplish those goals?

Travis is going to talk about what a bad mentor is, but just really quickly, obviously, the opposite of all those are also bad. If they’re not active, they’re not successful, if they don’t have connections, and they don’t have a blueprint for you, well then, you probably shouldn’t use them as a mentor. But Travis is going to go over some other examples of what it means to be a bad mentor, so to speak.

Break: [00:07:16][00:09:18]

Travis Watts: Yeah, absolutely I appreciate you sharing those. It was funny. I was laughing through part of what you were saying. I wasn’t laughing at you, I promise. I was thinking back to high school and I took an entrepreneurship class… I think it was my senior year of high school. The credentials of the teacher was that she had owned a clothing business locally that failed. She became a teacher to teach entrepreneurship. So it’s a little bit comical, but just something to think about. If that’s who you’re going to take your advice from, I don’t know. Maybe find someone that failed and then made a comeback, they have a success story. I don’t know. She probably would have been doing that if she had found that rebound, but side note.

Let’s talk about some red flags, things to look out for when finding mentors, to your point. Let’s go into a little more depth and detail. The first thing was about our friends, family, and neighbors. So, an amazing quote from Napoleon Hill, Think and Grow Rich’s author. “The number one reason why people fail in life is that they listen to their friends, family, and neighbors.” But why is that? Well, typically, these are the folks that want to appease you. They don’t want to ruffle the feathers, they want you to be comfortable, they want you to be happy, they want you to be content, they want you to be at their level, basically. There’s nothing wrong with the intentions to any of that, but are they really the best source for the advice? It is so easy to turn to family and friends for advice… But think of it like this, think about a child and asking their parent. By the way, their parent is an employee, working paycheck to paycheck. The kid says, “Mom, how do I get wealthy?” “Mom, how do I build a big business?” Well, the kid is likely going to get an answer, but is it going to be a good answer? Likely not.

My whole thing to this, my overarching saying that I say all the time is “Ignore the 99% and tune in to the 1% of people actually doing what it is you want to do successfully.” That’s the easiest, simplest way I can sum that up is with that saying. “Ignore the 99%, tune into the 1% doing what it is you want to do successfully.” So that’s number one.

Number two is when mentors speak negatively about others. There’s another great quote, Eleanor Roosevelt, “Great minds discuss ideas, average minds discuss events, small minds discuss people.” You don’t want a small-minded mentor, obviously. But it’s funny, I read through some of the comments just on social media occasionally, especially the Best Ever community, our podcast, and everything out there. If you ever see negative comments, and some of these big influencers too that I think are doing a great job at what they do. They’re very, very talented, but you always see a ton of negativity in the comments. I can guarantee you one thing with nearly 100% accuracy, and that’s the people leaving negative comments are not people who are more successful than the person making the content. Every time. There’s all kinds of jealousy and envy and all kinds of issues with that. Just keep that kind of stuff in mind. As we all know, just avoid negative people, generally speaking; you don’t want them in your circle. If you believe in things like “you become the surrounding five people that you spend the most time with” etc. So avoid that.

Number three –something that I’ve fallen prey to, especially early on– is be aware of these highly marketed programs. Nothing wrong with marketing, nothing wrong with sales, but let me give you an example. There’s a common model that I see all the time and that’s they take a well-known, trusted spokesperson and they market a mentorship or a coaching program. But as it turns out, when you show up to the seminar, they’re not actually your mentor or your coach, it’s just a program that you pay. Maybe it’s 300 bucks to get in the first one, then it’s 10,000 bucks, then it turns into 20,000 dollars, then it’s this 100,000-dollar program by the time you’re done. You’re not actually being mentored by the person that you want to be mentored by, the person that actually holds a lot of this knowledge. They’re just hiring contractors and employees underneath them to do the coaching programs and whatever it may be, holding people accountable, that kind of stuff.

A lot of these programs, by the way, –I’ve also discovered this– if they’re coming from a bigwig guru, so to speak, usually what it is, is that guru has written a book at some point in their life that’s very popular, and their whole program for 10,000 dollars, or 20,000 dollars, or 50,000 dollars, is regurgitating the content of the book. That’s all it is. It’s in person, you’re showing up, you’re sitting in a seat, there’s someone on the stage, and they’re telling you the concepts that are in the book, and the book is 20 dollars. Go read the book. That’s the takeaway there.

Instead, you want to get to the source. You want to make the actual person your mentor, you want to find a way to do that, if possible. Maybe you don’t want to start by looking at billionaires and trying to pick their brains, but maybe a more reasonable approach to that, because that’s probably not going to happen.

Here’s a good example. Tony Robbins charges a million dollars per year –at least this was as of a couple of years ago– for personal mentoring. This is only two or three phone calls per month for 20 or 30 minutes. We’re talking very minimal, a million dollars per year. You think “God, that’s not worth it. That’s a rip-off, whatever.” But is it? Imagine if you were a CEO at a Fortune 500 company, you’re making 30 million dollars per year through your stock options, your salary, and everything else. Well, imagine if you hired Tony to mentor you for a million a year and that resulted in your company becoming a lot more profitable, then you get a two million dollars bonus, let’s say, because of that, as a CEO. Then would that be worth it? I would argue that it would.

Here’s the last thing I want to wrap up with. In my experience, I’ve found plenty of mentors that are willing to give me small blocks of their time, 15 to 20 minutes here, 30 minutes there, maybe an occasional lunch or something, especially if I go to them and make it easy and convenient, and it’s all for free. A lot of people do want to help, it’s just the logistics. But I’m the same way – if someone wants to ask me investing questions, and says “Hey, you want to get a cup of coffee? I’m a 45-minute drive from you.” No, I don’t. That’s an hour and a half just in driving, plus, that’s an hour and a half there. It’s not a good use of my time just to pick my brain and buy me a $4 cup of coffee, I don’t want to do it. You’ve got to add value to that person, you’ve got to make it a little more reasonable.

The last thing, don’t fall for the free seminars. I put a post-up a year or two ago on Instagram about this. No company is out there renting out conference rooms, renting out hotels, hiring staff members, traveling around the US, paying for marketing, just to hand you a free lunch and give you some content. There’s nobody doing that. All these free seminars are sales pitches to other things. Just understand that so you don’t waste your time. If you really do want what it is they’re selling, research it a little bit, figure out what it is, and if that might be the right choice for you. But they get you into these high-pressure sales environments and they’ve got stage people run into the back of the room signing up, that are employees of the company, it’s crazy. Just avoid that, just avoid the free seminars.

One caveat to that – a local real estate meetup group; it’s not a seminar, but it’s a free meetup. I’m not including that in this category. I’m talking about if you’re going to go to the Hilton or the Holiday Inn for some two-day free boot camp or something – nothing’s free. With that, those are some of the red flags, things to think about when looking for mentors.

Break: [00:17:04][00:17:42]

Theo Hicks: I appreciate you saying all that. That last statement you made about attending the meetups sparked the thoughts that I had from a blog post we wrote a very long time ago. I see a lot more passive investors doing this, at least to cover the education aspect of the mentor, and they’re starting their own meetup groups or their own podcasts. There’s a lot of passive investors who are either already successful as passive investors, and they’re creating a podcast where they interview other people who are successful passive investors, and essentially giving out that information, that blueprint that I talked about earlier, even those connections for free. A really good way to find a mentor would be to find one of these podcasts and then just start reaching out to those guests. As Travis mentioned, attempt to get maybe a quick phone call with that individual. If you talk to 20 people, that’s 10 hours, let’s say, if they’re half an hour each, of one-on-one mentorship with 30 different individuals who have different perspectives on passively investing. It’s not going to cost you any money besides your phone bill or something.

It’s a fine line, I kind of go back and forth between is it worth paying someone or should you just go the free route? It’s really dependent on what you’re investing, and probably for passive investing, it’s going to be more of the free route. I don’t even know of passive investor mentorship programs that do have what we’re talking about with the tiered programs. But again, ultimately, just find the person who meets those criteria of are they successful? Are they active? Do they have connections? Are they not talking bad about people? It could be a family, friend, or neighbor if they, again, meet those other criteria. If you want to pay them, fine. If you want them to go the free route, there are ways to do that as well.

Another question we talked about was, do you need a mentor? Yes, but every single person who is successful might not have had a paid mentor. But in some form or fashion, they talked to someone, they read a book, they spoke to someone who’s successful. So technically everyone had a mentor, depending on how you define that. But ultimately, if you’re in a rut, or if you keep making any mistakes, you’re not taking action, then having a mentor can help push you out of that and toward your goals. From there, you can keep them, you can find someone else, it really just depends. I think a lot of what we’ve talked about today can help you avoid making a lot of mistakes and spending a lot of time, effort, and money on a mentor who’s not actually a mentor, but is something else entirely. Those are my final thoughts. Anything else Travis that you have to say?

Travis Watts: Just, in conclusion, mentors have cut the learning curve the most for me. I’ve read a ton of books, I’ve listened to all the podcasts, seminars, everything that we always talked about… But mentors really have cut the timeframe, the timetable the most. It’s been the most impactful. We were doing a segment several episodes ago where we were doing self-quotes. I have a self-quote. It’s “Books are great, but people are better.” That’s a quote by me, so take that to the bank.

Theo Hicks: Can you tell a quick story of how you found one of your mentors that have helped you along your path investing journey?

Travis Watts: Yeah, absolutely. That’s why I threw that last-minute caveat in when I said don’t go to free seminars. Not to be confused with free events, because sometimes there’s a huge difference. Two of my most impactful mentors came from a real estate meetup group that was local to me. One of my friends got me into this group. This is where I first discovered that some people could be full-time passive real estate investors. I didn’t know that was a thing, never heard of that, didn’t even know what that meant. But that’s what these two guys were, and had been doing this for decades.

In the group, of course, I had a short conversation, I didn’t tie up a ton of their time, they wanted to talk to other people as well and mingle. But then I made a point to follow up and just said, “Hey, I’d love to just get 10 to 15 minutes of your time. I promise I won’t take more than that. I just had some questions about what it is you do. I’m very intrigued by that, and that sounds like a path that may help me a lot too, coming from an active real estate background.”

Because I gave that kind of detail, I kind of set the stage that way, and I promised not to go over 15 minutes –which I didn’t– they said, “Sure. Let’s connect. Happy to do it.” We didn’t have to go drive and meet and do coffee, just phone calls. That led to phone call two, to phone call three, and eventually, I got the point. They were great mentors to help shed some light on what it is, how it works, say, “Hey, here’s the portfolio, here’s how it’s done over the last 10 to 15 years”, the realities of it, the pros and the cons of it, the risks of it… They’ve really helped break that down in just a few conversations. I took a lot of notes. That’s a prime example right there. I didn’t try to go to Elon Musk and say, “Hey, can I bring you out for coffee?” No, I just went to a reasonable step. Somebody successful doing what it is I wanted to do, to your point. That’s one story.

Theo Hicks: I’m really glad you shared that, because there’s something I want to bring up, but I forgot, and then what you just said triggered the thought in my mind. Your mentor doesn’t need to be necessarily — it can be someone who labels themselves as a mentor or a coach, like that’s kind of like what they do, like they have a business where they do coach people… But at the same time, there’s a lot of value in having a mentor who doesn’t necessarily label themselves as a mentor. Travis kind of gave a perfect example of that – it was just some guy who’s just been doing it, and Travis asked him for advice or tips. He didn’t have to sign up for a full program to get access to a portal to get the information, he just talked to him. Again, nothing necessarily wrong with those types of mentorships. But I think when people hear “mentor” that’s what they think about. They don’t think about the story that Travis just told of someone that he met at a meetup group and who he spoke to, and he said that that’s one of the mentors who had the biggest impact on his journey. I just wanted to mention that in closing.

I think this was a very good, valuable episode, and some information that a lot of people don’t talk about. Travis, thanks for your stories, and thanks for joining us. As always Best Ever listeners, thank you for tuning in. Have a Best Ever day and we’ll talk to you tomorrow.

Travis Watts: Thanks, Theo. Thanks, everybody.

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