Luke Johnson
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Barry: [00:00:00] Welcome Luke Johnson to the podcast. Luke's financial services guy. I'll let him tell you a little bit about it. but Luke, let's jump right into it. welcome to the show. How are you?
Luke: Hey, thank you, brother.
Great to be here, Barry. How are you
Barry: doing, man? I'm fantastic. It's good to have you too. I've been waiting for this. Um, Hey, really quick. Um, we always get started. You know, what, what got you started in your, in your entrepreneurial journey?
Luke: Yeah, I remember where I was. So, a friend of mine at the university of Kansas, excuse me, it actually, Told me about an internship in Kansas city.
So I was a junior and in undergrad business school at KU. And, um, he told me about this investment firm, this financial planning firm in Kansas city, that they had a top, top internship, in the country, one of the top 10 ranked internships. So it's a, it's actually a really good, quick little story. It's like April or may.
And everyone's already figured out all [00:01:00] their, um, internships for the summer. Right. I mean, we're like less than a month from getting out of the semester, right? Here's me, no planning, right? No thinking ahead, apparently. And, I call and they were all filled up. They interviewed 400 people. They had selected 15.
It was all over long story short, I guess. Um, it's kind of where it started. I wouldn't take no for an answer. And I found commonality with this guy, who this president of his office I had on the phone. He went to KU. I found out pretty quickly. I went to KU, he plays golf. I play golf. And eventually I talked him in, in the next 15 minutes to at least letting me come in and for an interview for this summer internship program that I'm two months late, even being aware of.
And I went in that Friday, put my only suit on, you know, when I'm a 21 year old in college, and he made an exception, told me, don't tell anyone. And I earned the internship. [00:02:00] So I did an internship that summer, graduated, you know, about a year later and then, um, went to work right away. So that's sort of at the very beginning of my
Barry: career.
Yeah, I like that commonality, you know, people my whole life when, when I was growing up would say things like, well, it's not, what, you know, it's who, you know, and they use that as a derogatory. And now I know it's like, well, yeah, it's who, you know, and when you have commonality and you're able to.
Luke: To, you know, string together some sentences, Yeah, but commonality is important, isn't it?
So you, you got your internship and then what was your
next steps? Yes. So, I did, graduate, you know, about a year later.
I wanted to go into the financial world. I just didn't know where and, and sort of, with, you know, which company. And I chose to go work in Kansas City at a, at a large, at a large firm that did, you know, investment planning and estate planning and asset protection, you know, life [00:03:00] insurance products and strategies and all sorts of things, right.
Um, group benefits, et cetera. And so, yeah, I went back to the firm where I interviewed a year later and that was about 23 years ago.
Barry: Oh, wow. And so, so... What made you choose financial services?
Luke: Well, the reason I chose that firm is because of the comprehensive approach. Okay. So I didn't want to be, you know, I didn't want to be like a stock broker guy. I didn't want to be pigeonholed as the insurance guy. Or, um, not there's anything wrong with being, you know, being more nichey, right? I mean, I think we, and that's where we are today.
We're definitely more nichey, but what I mean is I wanted to be able to bring a, um, an objective and very comprehensive approach, you know, to the client. And that's what I felt from that firm versus other firms. Um, but your specific question about what made me choose it, [00:04:00] you know, I don't even know if I knew.
Where I was going, what I was doing, I had five offers. I chose the one I was most comfortable with, for that reason, I felt like it was, and maybe that was their selling point too, right. But, but it was the case, well rounded approach, comprehensive, objective, all those things. Um, so yeah, so I got my start there at the big firm and then.
You know, it only took, it only took, I guess four to five years. And then I was, um, you know, I sort of felt like I'd learned enough, had a enough of a foundation where I wanted to follow the advice that my dad had really given me your five, 10 years earlier, you know, as a punk teenager and thinking, you know, it all, he told me, you know, go out and do your own thing, like essentially truly work for yourself as soon as you can.
And then that sort of. Thought was in my mind. And so I eventually went out and yeah, I started my own firm. How many
Barry: [00:05:00] people do you think should work for themselves?
Luke: Wow. Well, I don't know that my opinion, great question. I don't know that my, I don't think I can maybe properly answer it, but, um, how many people should work for themselves?
Well, obviously there's a lot of roles to be filled, right? out in the world. And so, you know, you need CEOs and you need employees and you need everyone in between, but I guess I would say this, the best way I would answer that question, Barry, is, um, you know, if someone has even an inkling or desire If they have something that they're passionate about, they believe they can solve a problem, they believe they will enjoy the heck out of it, and have just that, that even that small little urge or nudge that they're feeling, my gosh, I would say go for it, right?
I mean, not go for it, just like haphazardly without a plan, right? Um, and then you find out. You find out, no, I'm more well suited for this. Or, my gosh, I [00:06:00] think. What you would find if you ask that question to most business owners today is they would say one thing, one of the greatest decisions they ever made.
Barry: Yeah. So your dad gave you that advice. And I'm wondering, is it because of who you were and he gave you that advice because of that? Did you have brothers and sisters? They said, Hey, don't go work for yourself. What was, did he see something in you or is that was his general? Like I would tell any kid of mine to, to go do something for yourself.
Luke: Wow, I love that question because, yeah, not everyone's probably cut out for entrepreneurship and everyone's not built to, to work for a company, large or small. You know, you know what? Um, I've thought back on that because I have a younger brother and he has always worked for, um, smaller companies, larger companies.
company now. back in the Midwest, but he, um, he's very, [00:07:00] he's very good in that role. Like that's his sweet spot, right? He's moved up the ladder a bit and, um, he's had the opportunity even to take over my parents family business. And he chose not to, um, a few years ago, just about four years ago. So, when I look back on that, to answer your question, my dad had an experience.
So my dad came back from Vietnam as a Vietnam veteran. and was in the army, was on the ground, saw a lot of bad things, right? And and had came back and had Really just high school education there in Kansas. And so he didn't have any formal education. He didn't have any training. Um, we were in a smaller town there in Northeastern Kansas, about a hundred thousand people, and he had a regular job for years.
So he went to work. At, you know, just a regular sort of factory type job and he did that for years and then along the way he had [00:08:00] an opportunity to buy a piece of real estate that had a small little motel on it. Okay. This is like, this is like in 19 goodness. This is like 1975. Okay. This is a long time ago, but so he buys this motel and bulldozes it.
And again, he was working at a factory making like three bucks an hour. Right. So it wasn't like he was like, you know, going to scrape it and build like something amazing. I mean, it was like, he had to save, he had to plan and do all that. And so eventually he got that done and he built a four bay self service carwash.
Okay. Oh, wow. I was born. Come along. Now, before I know it, I'm six years old. I'm thrust into the car wash business. Okay. So I met, my friends are playing video games. I don't have a day off at school car wash. And then on Saturday, Sunday, it's car wash, car wash and church. Okay. That's it. Okay. And maybe watch some football.
Okay. So, [00:09:00] so Yeah. He said that because eventually he left that factory job. He grew the carwash business. And then during that time, it actually gives me goosebumps because, my dad actually passed away one year ago and, um, sorry, it's thank you. Um, you know, he left some indelible imprints on my life and this was one of them.
As a teenager who thought, you know, like many thought your parents were like, didn't know a thing, didn't know anything. Right. I remember this one, that one piece of advice. So he leaves the factory job, grows a car wash business, saves up money, starts buying real estate. Okay. We're not talking like he's anything fancy.
We're talking, okay. I'm literally back from like, I'm on summer break and he tells me to go mow. This piece of property. Well, while I was away at school, he, he bought 160 acres of farmland. Okay. And it had [00:10:00] about 159 acres of it was like tall weeds and grass. Okay. And so he sends me out there on a tractor pulling a, you know, a mower behind it.
And I spend hours and hours mowing this. Well, guess what? He did. He turned this 160 acres into a small, beautiful, still there today, right? It's more beautiful than ever. Um, he turned it into a subdivision. He built 30 homes on it. I mean, this is a guy who, like, dropped out of high school, went and fought in the war, comes back and, you know, buys the car wash, saves up some money, starts doing real estate.
And so I believe he said that to me because he said it to both my brother and I, and I took that advice. He saw, Hey, working at a dog food plant is not great. It's not glamorous. It doesn't pay well. It's kind of stinks, you know, as much
Barry: as, as good as it sounds, it probably wasn't glamorous, right? [00:11:00]
Luke: He, his advice was, man, he experienced it.
He experienced 20 years, 25 years at, you know, carrying your lunch bucket to the dog food plant. And he experienced. A car wash business that you only had to be there a couple hours a day and he developed some land and, and then they sold the car wash and retired a few years ago. And, and, you know, my dad really set a great example of, you know, hard work and just.
Having that entrepreneurial spirit and making
Barry: it happen. Let me tell you everything. I know this is an interview with your dad. I'm, I'm thinking, man, I, I, I, I wish I could have interviewed that guy. Um, everything about him, I honor because being a Vietnam veteran and I'm a veteran, but Vietnam veterans, I think, oh, wow.
That's a different level of devil. Number, number one, number two, he came back [00:12:00] and, and I'm, I'm, I think what early eighties he started building his business. It seems like,
Luke: yeah, somewhere right around there. Yes.
Barry: Yeah. Early eighties builds his business. Start. He has the vision to buy a piece of land, you know, get rid of the, what it was on there, built something.
And then start slowly building his, I would call it as empire. He probably wouldn't, you know, and, but I think, man, that guy,
Luke: what's his name? my dad's name is Kelly Johnson. Kelly Johnson
Barry: is the American dream. Rolled up into one and now he's got a, a son who's a high powered, you know, financial guy. So all of that guy, his dreams came true in my opinion.
And, and man, what a, what a, what an honor to have him as a dad. So thanks for sharing
Luke: that. Yeah, man. And I, and the last thing I thank you for saying all that. Um, yeah. Yeah. [00:13:00] His, it's a whole nother story, but maybe another time. Yeah. His, his funeral and his services was quite special with all the military and the, and the flag folding and, and, um, the music and all that.
So a lot of military out there, but you know, it's cool. So he's not here. And what I got to help my mom with is sell off some more of the remaining property last year and put a whole bunch of, extra money in the bank. So my mom, yeah. Yeah. So they lived on a different 80 acre piece of property the last 11 years, but he still owned a few other chunks.
And I said, mom, I said, Hey, I'm a, you know, I'm a sort of a strategic consultant asset advisor, you know, I'm in the wealth, you know, building business and all that. And, um, I said, mom. Do you want to have to mess around with 30 acres over there, the 40 acres over there and the 80 acres over there and the 10 acres over there.
And so, no, of course my mom does it. She's 69 years old. She wants to play golf and go play with her grandkids and, you know, enjoy life. And, which she'd been enjoying life for a little while. Yeah. And, [00:14:00] um, and so I got to help her in late 22, in early 23 here, sell off a bunch of acreage. Sell off the home place in 20 acres.
We had everything done except 60 acres that she still owns, but all of these other assets we got to exit. And frankly, you know, that generation to my parents would, it doesn't matter, you know, and they're not wealthy people and they didn't have an empire or anything, but it is the, I think it is the American dream, so you're totally right.
But what's really cool is I just said to my mom, you know, after those last few transactions and a few more dollars in the bank, I said, mom, I want you to know one thing, all your work with dad, he left you in a great position. I truly do not want you to worry about money. And when you go out, right, and you decide where you're going to dinner, I want you to go get steak and lobster and you don't need to go chintz out and go to the burger and salad place or whatever.
Okay, go order that fillet, go to the lobster joint, right? Fly first class to [00:15:00] see us here in Scottsdale. Like you cannot. Out, you know, you can't spend all the money that you and dad, you know, we're blessed to, be able to accumulate. And so my dad, he's not here. Um, but I know he did most of, most of the work and my mom supported him, but it's really cool just to, um, have experienced that with my own eyeballs that he left my mom in a very, very enviable
Barry: position.
Just everybody's listening. Just listen to what happened. Like a guy had a dream and he lived it. And, and. I'm sure there's ups and downs and frustrations and all kinds of problems. And so if you'll just, you know, keep your head down, surround yourself with great people. You're gonna, you can live a great life and leave a legacy.
And that, that is exactly what he's done. So, you know, really quick, you know, where are you at today? You know, what, how's your, your, your business and. What are you [00:16:00] working on now?
Luke: So the business has evolved. It's been really an interesting journey. You know, it started out in like comprehensive financial services in the truest kind of traditional sense, right?
Investment management, some insurance, life insurance, sort of work, all sort of insurances and working with professionals, retirees, business owners. Um, young people, older folks, you name it. Um, and then, you know, then eventually right after about five or six years, I started my own firm today, though. It's evolved.
It's really evolved over the last 10 years. So I've been doing it 23, but the last 10 have been really interesting. And even the last. Even the last five. So what it looks like today is I really made a big shift even in the last five years where I wanted to create a client experience and wanted to do it in sort of like, um, a family office [00:17:00] style.
So like an elite suite of services, if you will. Right. So how did I, how did I go about that? So I started thinking to myself, well, what do I really love to do? What do I not love to do? What should I do less of? What should I do more of? Those kinds of things initially. And then I acted on it. So I, you know, moved the wealth management services, the traditional work over to a partner of mine.
Um, so, I, you know, I deal with none of that day to day operation anymore. Right. So we're not going to, where I'm going to spend my time, where I'm going to spend my time. Is working with, um, business owners predominantly that own, you know, whether it's small, medium, large companies that have typically a set and it doesn't have to be a business owner, right?
But any person who has some level of on the way to building wealth, or they built wealth, have some sort of affluence. [00:18:00] They have a set of problems, and they're usually the same three or four or five problems. And it has to do with, legacy wealth transfer. It has to do with, um, they're frustrated about how much they pay in taxes.
I'm not a CPA. I don't do their tax returns. Right. But we introduced them to certain strategies that have tax efficiency with those with them. And so today, what it looks like is sort of a very kind of niche unique. Wealth and strategic asset planning company. So what I mean by all those words is we essentially look at everything.
And then where I come in is I'm identifying. Um, essentially holes in their castle or holes in their boat, right? So that could, those categories could include, you know, do we need to shore up any, any estate planning for the purpose of tax efficient wealth transfer? Okay. Do we need me for that? Do we need a partner of mine?
Do we need a proper attorney or all of us? Um, [00:19:00] what about yeah. What about going forward, though, you know, based on the success that someone is having, right? The client is having where can we strategically place capital to be more again tax efficient, right? And so. As we go along, whether it's estate planning, asset protection, building wealth outside of their business, if they're still running a business, and many of my clients are, some of them have small businesses and some of them have larger businesses and have really accumulated a high net worth, right?
So it's not really about the clients. You know, there's no minimums in my firm. we want to work with really, really good people, but folks that appreciate. I guess the level of expertise and service that we're bringing, because we understand the law and we understand strategy that's out of the internal revenue code, and then we bring in the right professionals along with ourselves.
to really just sort of make sure that there's no more holes in the boat, right? That everything is buttoned up,[00:20:00] we're going to reduce, we're going to reduce risk. We're going to reduce tax risk. We're going to essentially look, you mentioned the word generational or legacy earlier. Yeah. We talk about generational planning a lot because it's not just about today or the next 10 or 20 years.
But. What do we want to see beyond that? So we go about it in a very strategic way. And so it's not, you know, the work we do is not predicated on, you know, the stock market or real estate or one particular, you know, tax. Code or piece of law, but it's really about how can we take all those things and advantages and laws that we do know.
And we're very, we're very aware of and bring all that to the table for the
Barry: client. Gotcha. Gotcha. So what, not, not what's the biggest mistake. I think we get caught up in the biggest mistakes, but what's one of the most common mistakes or things that you help someone that you see people doing that you're like, don't do this [00:21:00] with their, with their
Luke: wealth.
Boy, I love that question. Um, you know, I, I think what I think one of the things that's really like an overarching kind of thought is folks have preconceived notions. Mm-Hmm, , these things are actually called, Garrett Gunderson is a, um, like a financial expert and author, and he has this book called Sacred, um, has to do with Sacred Cows.
It's this, it's this term, right? That it's like when you hear something long enough, right? Like a rule of thumb, like, oh, you always should do this. Right. Oh, it's kind of like, let's go back to the, generation or generations progress. What was the sort of, kind of definition of freedom or the American dream?
It was like a lot of times it was buying a home and paying it off. Yeah. Yeah. And I'm not here to say don't pay off your home. I'm not going to get into that. I'm not you should, you know,
use leverage or not, you know, I'm not going to get into that. Discussion. But I think the overarching thought is people really we [00:22:00] encourage them. We give them a set of facts and we ask them to think critically, like to take everything that they possibly have thought of and think they know and see if they can do us the honor, the privilege of setting all that and really doing themselves a favor, said all that to the side and go through this planning process with us.
Where we dig into everything and look and see where we can improve their, the Barrett family castle, if you will, or the Barrett family estate. And so I think the answer to your question, I've got, I could give you a few answers, but I think the one thing we see a lot is folks. Like they've heard things like, oh yeah, or they go off of maybe their neighbor or their most successful friend.
Oh, right. Well, he bought, rental property. So I should do that too. Or, you know, he buys only mutual funds. So I should do that too. Right. [00:23:00] Whatever. A million examples. Right. And so. What we ask our clients to do is, is actually just like, listen, think critically, wipe away as best you can. I mean, we all have, we've had, I'm 47 years old, like you and we have all these life experiences.
So we've been kind of molded and shaped, you know, based on those, but we asked the client to follow us down this path and this journey. And the one thing we always let everyone know is that I'm looking to keep my opinions actually out of it 90 percent of the time. And you might ask, well, how can you do that if you're giving advice or suggesting strategies?
Yeah. We want to suggest strategies that are backed up by law and math. Yeah. So two plus two is four. And if the tax code or business law says this is. Tax free or this is tax deductible, which again, the [00:24:00] CPA is going to do all that work and the tax returns. And I'm not a CPA, but, but I'm not an attorney.
So we're not going to do their trust or their, you know, or their limited partnership, but if the law says this and two plus two is four, and you put those together and it solves a problem. My opinion is, is pretty much removed from it and we simply set forth a set of facts and laws that we believe solve a problem.
And that alone, Barry, has really resonated with folks. Yeah,
Barry: that's really good. There's a, I'm going to paraphrase it. There's a quote that says, Hey, when the, when there's data available, let's go with the data. When it's an opinion, let's go with mine, right? And, and that's a basic human emotion, right? That's what we want to do.
And there's a lot of things and I'm in the process of this and, and, you know, I made a lot of mistakes growing up and with my money and consumer [00:25:00] debt and all kinds of other bad strategies. And, and, and then I, I just, Made a decision to stop making those dumb mistakes. And I think consume staying away from consumer debt is a rule of thumb that I think is fine, right?
But I switched it to stay away from all debt. Right. Except for house. Well, as I'm getting older at 47 and, you know, we've been blessed and worked hard as well to, to do some things. And I'm, I'm having a hard time moving away from that. And I know I, I need to, because of what you just said, based on the law and math.
I'm going to move away from some of that, knowing that I'm going to cautiously do it because it has worked at some level for the last, let's call it 10 to 13 years. Right. So it's
Luke: hard. Yeah. [00:26:00] Yeah. And you know, the thing with leverage, the only comment I'll make there is. I mean, our wealthiest clients have used what we call intelligent leverage for often decades, right?
So a lot of folks have made a lot of money. A great example would be like commercial real estate, right? Something like that where, Hey, how are we going to go buy this 20 million building? Well, we're not going to buy it with cash, regardless of interest rates or any other factors we're likely going to raise.
A few bucks, two to 4 million bucks, whatever it takes, maybe 6 million. And we're going to go right. You know, we're going to go borrow right. The other 14 million. And so you take on a lot of debt in certain investment scenarios. Um, but what you're doing is you're taking on the debt so you can buy.
Something larger that can create a larger windfall, larger return at the end, right? And so, as opposed to if you always had to only use cash that you could put together. Right. Then you're a little more [00:27:00] limited in what you can do, of course, and most all the wealthiest families we work with have used leverage and smartly used debt to really amass a significant amount of wealth.
And, you know, the key there is intelligent leverage, not just go obviously borrow money for every single thing that you want or see potential opportunity with. Yeah,
Barry: I'm, I'm really working on, you know, three legs of the stool. Number one, my, my business is, is one of the legs of the stool. Like I would say it, well, I would say it's the main leg right now, 47.
Um, and then there's the market we put in every month, pretty substantially now. And then there's real estate, which we just bought our first, second property, right? Like it's, it's, it's the scariest one for me. Cause I'm like, holy crap. And, and our first one honestly was, was, a vacation home.
Because, you know, if I think about it, like I [00:28:00] thought about it, I'm like, what's there's, if we diversify, then if we have that for 30 years, number one, you don't have to go on any other kind of vacation. You've got your own little home there. Right. And then the other is, is if I have that for 20 or 30 years, it's going to appreciate it, you know, unless something crazy happens and it's, and then I want to get into other real estate.
I just. I'm going really slow there because I don't want to wake up and have a bunch of tenants that I don't like.
Luke: So, yeah,
Barry: do I want to really have those? And, and, and really, if I, I've thought about it, if I want to do that, um, I want it to be managed properties, which is a lot
Luke: more, I'd have to have a lot more,
Barry: cash available to get that to be a true statement.
So now what I'm trying to tell you is I got two of the stools and part of building the third part. [00:29:00]
Luke: Yeah. Yeah. You know, you know, one thing I'll share right now, maybe it's to be helpful for one or more listeners. I love talking about, um, you know, putting money to work in other locations and this isn't some long discussion.
I'll just share this. So I had the opportunity, most people in the business world, even if you're not, you watch TV, you've come across the show shark tank. Yeah. And so most people have seen that. So last time we talked, I don't know if I mentioned this, but I had the opportunity to spend a significant amount of time, gosh, probably four or five hours with a small group of us guys, maybe 10 or 12 of us with, Kevin O'Leary, Mr.
Wonderful. Yeah. So we literally, we hung out, we had a drink, we had dinner, we had an after dinner cigar. Like it was, this was in Dallas, Texas and just a few years ago. And. And so, you know, I've watched all those episodes and all that, but that's not my point. And so what my point is though, is after the conversation with, [00:30:00] with Mr.
O'Leary, he confirmed some of the things that we've been preaching had been preaching to our clients. And one of those things, and I love his, his, technical words here. He says, you know, poop, poop, who happens, right? That's like phrase, right? Poo poo happens. And when poo poo happens. If it happens, like your business probably fine.
My business hopefully be fine. But like, what his point is, is, is not just diversify, but plant. I always relate it biblically, you know, with my Christian faith, but I talk about planting seeds. Right. And doing right using, you know, being a good steward of your blessings and planting seeds for a future harvest.
So what we talk about a lot and what Mr. Wonderful, Mr. O'Leary was, was really getting at in our conversation was taking, right, taking cash, taking assets away from the business rather than pouring every dollar back into the business, which you hear a lot of [00:31:00] right. Now, if you're a startup, different conversations, I mean, It's not again, not rule 500 percent forever, but taking cash out of your, you know, out of your discretionary piggy bank, if you will, or out of your cashflow investing in.
Other businesses and I'm talking real estate, what have you, what I want to do, though, and what my wife and I are doing is we invest in several things. We invest in 3 more private companies this summer. I only mentioned that for no other reason other than I did the due diligence for several weeks. We have equity ownership in 3 other companies.
Um, one of them's here locally and two of them, you know, find online social media and see the, see what they're doing, but we don't have to, I did the due diligence. I got super comfortable and I'd reviewed dozens. These just happened to be the three that we landed on. And what do we do? We invest as a limited partner.
What would do limited partners do? They write a check and sit back and relax. Okay, [00:32:00] good. So we're not running that clothing company. I'm not running that whatever widget making company. I'm doing nothing. You know who's running that? The guys who are experts at those businesses. Right, right. Not the guys that raise the money.
The other investor money, you know, in addition to ours, the guys that have expertise. So the commercial real estate deal, the X, Y, Z company, the widget making company, that's what I'm encouraging a lot of our clients. We're not giving advice on that, but we just share that concept like, Hey, if you have a business, you got to pour capital back in.
I get it. Right. I've had a business for nearly 20 years, but just like Kevin O'Leary said. And even if poo poo doesn't happen, wouldn't it be nice to own real estate, own private companies, maybe buy a current company in your city, let the current management and employees run it. And maybe you could put in your two cents.
So a little bit of work, [00:33:00] grow it and exit in three to seven years. But my, our goal and my goal for my family is to also have right seeds for a future harvest where I do not. Get pulled in 14 different directions. I want my money to go to work for me and other areas where I, I have a liking to, I want to be involved in, but I definitely am not going to spend the time, the years, the resources to get educated, right?
I'd rather write a check as a limited partner and let the experts do the work. I love that,
Barry: you know, and I actually had a chance to, to one day meet Warren Buffett. He was eating lunch at a restaurant and it just got lucky. Right. Got a little picture with him. I'll show it to you one day, but I actually had a conversation with, and I won't say the name of the company because you know, if they wanted to, they'd be on the show.
I don't know. [00:34:00] But anyway, he bought and. The guy who owned it is the son of the founder. And he said that Warren Buffett, he'll talk to him. And Warren Buffett's like, Hey, that it's your company running. And I'm like, cause you hear those stories that Warren Buffett does that. And then here's a guy I'm talking to and it's a Kentucky company, which is cool.
But he's like, yeah, man, he just, if I, they'll he'll answer the call. And I'll talk to him and, and give him what I'm going through. And he'll basically just tell me, yeah, man, I trust you. And that's why, that's why I wrote a check for the company. So you could make those decisions. So, let me know if you need anything else.
And I'm like, wow, what, what, and it sounds to me that that's exactly what you want to do. Right. And
Luke: I [00:35:00] continue doing is, you know, what Warren Buffett sounds like what he does there and definitely I'm no Warren Buffett by any stretch, but it's the same thing I think we've seen with a lot of successful investors.
Yeah. Some of them, which are clients of ours is, is they do the due diligence. And, you know, just the business I'm in, I'll see one to five deals a month, like just come across our desk. And we say no to most of them for different reasons, but, um, do the due diligence, spend a lot of time, understand the guys leading the ship, driving the boat, so to speak, what they're doing, how they're doing it.
Um, you gotta go off your gut to some extent too, because I will say this, you know, this sounds cool sometimes and sexy to talk about. But once I didn't do enough due diligence. With my own money, it was just I decided after meeting a gentleman, he was in the energy business. And so I want to mention this too, because it's not all roses and rainbows and, you know, make a 10 X return and it's just so easy every 3 to [00:36:00] 5 years.
It definitely doesn't work that way. Right? But I wrote a check. A substantial check for me at the time, about eight, nine years ago, I had a funny feeling in my gut, but the guy convinced me to do it. The guy, the founder of this company was in the energy space. None of the other details matter, but I wrote a check and within a handful of months, he called me and said, eh, the deal, the fund didn't work out.
It's a zero. Wow. Like in, like in less than six months. Right. Oh, wow. Ran the deal. I won't say he ran the deal on the ground, but he, I mean, he was overseeing it. So I guess he ran the deal on the ground. He didn't, he didn't run it to the, to the heavens. Right. He didn't run it upward. Um, and so that was a real like wake up call.
Yeah, that was, let me think back. It doesn't matter, but I'm curious. Yeah, it was almost 10 years ago. So, and thankfully that's the only one of those I've experienced, but it was a real gut punch because yeah. You know what? I got [00:37:00] lured in by the potential rate of return, the sexiness of the deal, wanting to have, um, a stake in the energy business down in Texas, right?
And this guy came to me and many other guys that we all knew each other. And he, lit a bunch of money on fire based on how the deal went. So, but I wrote the check. I take responsibility. You know, a lot of people like to blame everybody, right? But I go, you know, at the end of the day, my name's on the check.
I signed it. He didn't come and strong army. I wrote the check. Barry, it was a huge wake up call because the due diligence we do now is, and I do for myself, just talk about me personally, higher level, a lot of it. And then when you write the check though, the nice thing is you're not doing any of the day to day.
And then hopefully those deals work out. but it's an opportunity to make a return. If you want to say, you know, grow your nest egg, grow your wealth, grow your net worth. but you're not involved and you're not spending any [00:38:00] time. And frankly, You wouldn't want to be doing that anyway, because you're, you know, you and I are any investor, we're investors.
We're not operators. We're not experts on the deal. So it's just another way we've seen many investors accumulate wealth over the years by taking capital and planting those seeds, you know, in other locations. Yeah, that's very
Barry: valuable. I appreciate you, you sharing that because it's not all going to work out every time.
Right. And, but, but I want everybody to listen to what he just said is he took. personal responsibility and didn't blame other people for the mistakes that he made. And, that was, I think, able to let you make other Um, deals down the road, because if you blame someone else, you don't want to make that mistake again.
Right. And so you're, you're not going to write another check because if you're blaming someone else, you, you think that you might have to do that. But when you take ownership, you're okay to write another [00:39:00] check because you're okay to take ownership if that doesn't work out. And so I learned a lot there.
Thank you so much. Um, what's, what's one last piece of advice you would give, give everybody just this, and I know you, you don't like rules of thumb, but I'm going to, I'm going to press you toward it. Hey, a better way to ask it. You ready? What, what piece of advice would you give yourself 20 years ago? that you wish you had known that, you know,
Luke: today.
gosh, a few of them come to mind, but one of them is right is when, you know, you feel called to something or feel drawn to something is just go for it. Right. And an example would be like, so I moved to Scottsdale, Arizona, no way. And What happened in 08? Remember that year? Remember 08, 09? Oh,
Barry: yeah. I remember.
We started a business the next year. That's what happened in 08. That's what happened
Luke: for you. Yeah. Our investment accounts weren't doing so hot that [00:40:00] year. And then in early, early 09 there and then real estate took a real beating, right? Especially in the Phoenix. Scottsdale area, Las Vegas, Naples, florida.
Those were some of the hardest hit between 08 and 2010. And I wasn't where I am today in business, but I thought, my goodness, You know, real estate was worth a dollar. Now it's worth 50 cents. I mean, you know, yeah, people love, people love sunshine in the desert and playing golf when they retire. I was just driving around in this new city, you know, building my business in another location, cause I had moved from Kansas city, you know, so if I would have gone forward, if I went and raised money, if I would have gone to, you know, client, you know, that's, that should have, what it could is.
And I just don't want to live life. And we encourage our clients like. You know, in the work we do when we feel good about something or confident about an opportunity, um, once you've done all that diligence and done your homework, it's like, man, if you feel called to something and [00:41:00] you feel pushed that direction, not like on a whim, not something silly.
Gosh, just, I mean, we have one, you know, God has blessed us with this one life and a finite amount of time on this earth, like goodness, like after you do all your homework and you critically think about something, if you're just feeling called one direction and, and if you're feeling called to entrepreneurial, right, that, that's if you have that spirit, that entrepreneurial spirit, I would, um, yeah, I would say go for it because there were things in my, okay.
You know, over the last 20 years that I did not go for, I did not do because of fear, right? Fear of failure, fear of failure most of the time. Right. And if I, you know, and I don't want to live in the shoulda coulda woulda world, you know, anymore. Um, the goal is to become the best version of yourself and live out every possible Expand every amount of energy that you have working toward those, you know, hopes and [00:42:00] dreams and goals and not looking back, you know, when you're retired or sitting on the couch and talking to your grandkids and just dreaming about that thing you should have done and You know, whatever that is, right.
Whether it's run a marathon or get into business or buy a piece of real estate, right. Whatever that is, right. Yeah.
Barry: Go for it. I love that, Luke. It was an absolute just pleasure having you. I think the value you gave was unbelievable today. So I really appreciate having you on. Thank
Luke: you. Thank you so much for having me, Barry.
Really appreciate it.
