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Episode 13: All 7 Sources of Residual Income: How it’s Done
414 Plays7 years ago
Ready for a masterclass in managing the 7 sources of residual income? It’s not like today’s guest makes it look easy – but he definitely shows us how it is possible. And how you can have some fun along the way! Between real estate, owning a business, and even running a music festival – it is never a dull moment.
On this episode of the Uncommon Life Project Podcast, hosts Phillip Ramsey and Bryan Dewhurst talk with Courtney Wooge.
Courtney is a second generation owner of FCIS Insurance. He is also one of the founders of the Tree Town music festival – the premier country music festival in the Midwest – in Forest City, Iowa.
Get ready for a fascinating, wide-ranging conversation. Building wealth for you, the next generation, and where giving back is not a sprint, which makes Courtney a great coach in running a marathon.
What you’ll learn about in this episode:
- How it’s possible to have a hand in all 7 sources of residual income
- Diversify, diversify, diversify
- Why income property can be a great source of cash flow – and a lot of hard work
- The tax benefits and long-term wealth benefits of owning property
- Something completely different – fun and profit in running a music festival
- How to take calculated risks in service of your cash flow
- Setting up for success as a 2nd or 3rd generation business owner
- The mental shifts needed to move from managing yourself to managing a company
- Taking responsibility as an owner
- Using your cash position to leverage the interest on that cash
Recommended
Transcript
Introduction to the Uncommon Life
00:00:02
Speaker
Everyone dreams about living an uncommon life, but how we define that dream is very different for each of us. And for most, it's a lifelong pursuit.
Meet the Hosts: Brian and Philip
00:00:11
Speaker
Welcome to the Uncommon Life Project podcast. We're going to introduce you to people who are living that life or enjoying the journey to get there. We're going to also give you some tools, tricks, and tips for starting or accelerating your own efforts to live an uncommon life.
00:00:27
Speaker
a life worth celebrating and savoring. Please welcome your hosts, Brian Dewhurst and Philip Ramsey. Hello and welcome to another podcast of the Uncommon Life Project. This is your host, Philip Ramsey. And I'm Brian
Guest Spotlight: Courtney Woogie
00:00:40
Speaker
Dewhurst. And we are with one of my good friends, Courtney Woogie today, which is a great story in and of itself, but I'm excited to get into it. He's one of the first guests that has all seven sources of residual income. So we're excited to dive into that.
Returning to Forest City
00:01:10
Speaker
Good story is we're here in Forest City interviewing Courtney because the microphones are hard to come by here in Forest City, I guess, and so we thought we'd take the microphone to him. Welcome to the show, Courtney Wilkie. Thanks, Phillip and Brian. Welcome to Forest City, snowy Forest City this morning, and the sky is blue, but we're going to have some fun.
00:01:23
Speaker
Let's go ahead and give a little background of Courtney, and then we'll jump right into it.
00:01:30
Speaker
By the time this airs, it's going to be very hot out and beautiful and sunny and summery. But when we were driving up, it was ugly. So we're glad that you guys are on the other side of it. Hope it's a sunny day when you guys are listening to this. I hope your listeners can pick up some some things I've learned because I've certainly learned the hard way on some things and the easy way and others. So let's jump right into that. So you haven't always been sitting here as one of the owners of FCIS.
00:02:00
Speaker
Was this always a dream of yours or was this something that just kind of came
From Pharmaceuticals to Family Business
00:02:04
Speaker
to fruition? No, complete opposite. I vowed never to return when I left for city, when I ran off to college. And I did work a stint with Philip, which is how I know him at a company called Abbott Laboratories selling pharmaceuticals in Cedar Rapids. So it was never a dream of mine. Sometimes circumstances just happen for the better.
00:02:25
Speaker
And here I am as my father became ill and decided he needed to make a decision on selling it on the open market or convincing me to buy into the business and have this I guess built in annuity from what financially I see. But it also takes work and a quote he gave me was it takes 99% perspiration and 1% inspiration.
00:02:54
Speaker
Very true. So let's talk about the pharmaceutical days because those are honestly kind of like the golden handcuffs. I used to, I said that before in post shows and past shows. So let's talk about that. Is that something, how did you get out of that?
00:03:10
Speaker
Was it chosen for you or did you make a conscious decision? Yeah, that was a great job for the time being. But yeah, certainly I thought it was all great except for one day when I was on a conference call, they decided that reps were no longer needed in the company. And it didn't matter if my name was Joe or Fred or I was a rock star or a fellow.
00:03:32
Speaker
Didn't matter if I was a rock star or a dud, budgets were cut and I was no longer needed. So that was really the first shock to my system on, you know what, maybe it is worth it to pursue something that I have an ownership vested interest in.
Transition to Insurance and Entrepreneurship
00:03:49
Speaker
And that was kind of my first taste at, wow, I really am not in control of my destiny when those circumstances happen.
00:03:58
Speaker
Yeah, I was on that same conference call and you and I met for lunch that same day. And I remember both of us were kind of encouraged and excited for the next chapter of our lives because I don't think we would have ever left that.
00:04:12
Speaker
that position, that company because it's good money. It's good money and good benefits and pretty easy. Absolutely. It was a fantastic job while it was there. Great boss, Jimmy G. Shout out to Jimmy G. That's right. He was the man.
00:04:29
Speaker
It just was not sustainable from what, as looking back to it, it was great, but just not sustainable. So did you come right into FCIS out of that or was there a? No, I didn't. So my father laughed at me and said, you know, you had the world by the tail and all of a sudden now it's upside down. And he encouraged me at that time just to get my insurance license, just to go and get it. I had the time. I certainly had the wherewithal to do that. So I did that while I was looking for a new job.
00:04:58
Speaker
and just kind of dabble in my feet into it. So I got my licenses during that time. But I had not pulled the trigger yet because I had gotten another job selling medical supplies for a family-run business I thought was a little more stable. And it turned out to be it was. But I sold medical supplies for the next two years almost before my dad got ill and said, look, it's decision time.
00:05:27
Speaker
you either here's the price, you can either buy into it or I'm going to sell this on the open market.
00:05:34
Speaker
And that's where you talk to your family members and trustworthy people that know the business and make a decision. And as it turns out, it was the worst short-term decision ever, but the best long-term. Because I had to not only sell a lot of my assets to put skin in the game as my dad required, but I had to move my family from a very nice community up to small town Iowa.
00:06:01
Speaker
Um, which was a challenge on are the kids going to adapt? Is my wife going to find friends? So the first year honestly sucked pretty bad, but looking back and now that we're in it the sixth year, it was the best decision we've ever made. Um, because you just roll up your sleeves and you work. And I can see this built in annuity now, as long as we keep things moving. Sure.
00:06:25
Speaker
And also kind of cool for you to step into your father's shoes and see all the hard work that he has done over the years and the sacrifice he's made to make this extremely successful business. And now you get to run it in a little different way. Technology probably is a little different than Gaylord had it. But now streamlining things to the point where now it is yours,
00:06:48
Speaker
A month and a half ago your father passed, is that correct? Yeah, two and a half months ago now and so he had a lot of things already set up and you know life insurance and estate planning and all that stuff was in place which is that's been an unbelievable process to go through and see that it provides a lot of comfort to those of us that are left that he had a lot of mechanisms set up.
00:07:13
Speaker
And that's my hope and dream is that those mechanisms will continue to be set up for other people to drink scotch out of the barrel after it's been aged properly. Absolutely. You've always had this residual mindset, because I remember in pharmaceuticals you had a rental property. And then once you got to Forest City, Iowa, you started having this idea of a tree town and having a festival.
Tree Town Music Festival
00:07:40
Speaker
Tell us about that thought process and how that came to fruition.
00:07:43
Speaker
Well, I've always had the entrepreneur spirit and always believed that you have to have a few different eggs in the basket to be able to have some long-term wealth. I always knew that. I just didn't know the right mechanisms to play. So, you know, you read books and you see movies and you see real estate.
00:08:00
Speaker
How hard can it be to buy some properties and rent them out and everything cash flows? And that does absolutely work. It is a way to get there, but it still does take work. You know, sometimes tenants don't pay and sometimes, you know, you have to do some maintenance things on the houses. So you got to know what you're doing. Sure. But it is absolutely a way where wealth can be built.
00:08:26
Speaker
And Shannon and I finally have sold our last property in Cedar Rapids. We've kept some all these years. And finally, the timing was right where we did sell our last property last fall. So now we've had a couple here in Forest City that we've bought and sold. So we are still continuing on that mindset that for the right property, we'd love to buy because there is some tax benefits and some long term wealth benefits.
00:08:51
Speaker
But I've also had been involved in other network marketing type pieces and always have looked for avenues to get involved in things. Like when this Treetown Music Festival idea approached me, it was never my intent to get into the music festival world. I mean sometimes just by networking and being out
00:09:12
Speaker
uh involved in knowing people things just happen and questions are asked so being in four city i was not going to let this opportunity pass me to be involved in a large-scale music festival in a town i grew up i just didn't have it in me to say no i'm not passing yeah i'm not going to be a part of that
00:09:30
Speaker
But you have to be smart about it. You can't put every egg in that basket and you have to get the right people involved. That's an entirely different business. Entirely.
Innovations in RV Insurance
00:09:41
Speaker
A lot of action happens in four days where the insurance business, it's very, you know,
00:09:48
Speaker
methodical and you have to have a two to three year vision and it's not like you can walk in and somebody just writes you a check for insurance day one. I mean you have to build some relationships and the music industry is very you know cutthroat. There are a lot of musicians trying to make it and you're always
00:10:08
Speaker
being asked by all these musicians, listen, can I play? I'm really good. And then there's 2000 people behind him saying the same thing. So, but a lot of moving parts and a lot of action in four days. Yeah. Now that you're six years into FCIS and is running this,
00:10:31
Speaker
What things do you notice now, like, cause your dad owned this while you were growing up, what things do you know, appreciate looking back is like, oh, that's why dad was doing that. That's why dad said that.
00:10:41
Speaker
Do you have any other moments? Absolutely. It's the relationships that he had built that all I had to do to Philip's point was maybe add some technology to it and add that next level of, oh, we can do that. The relationships were already there with the clubs and the insurance carriers and everything else. It's just the way of doing it 15, even 10 years ago was more
00:11:06
Speaker
handwritten and old school, things that we know as older millennials now, you know, adding some video and some podcasting and some of those things have really changed the game even when it comes to PNC insurance. Yeah. So I think your dad's story is fascinating. Can you walk our listeners through the business when your dad, his name is Gaylord, kind of
00:11:34
Speaker
Had the aha moment and how that kind of well, he was a problem solver. Yeah, he's a problem solver. He saw a problem Yeah, and he figured it out. Yep, and that's in my mind in any business you endeavor in you just have to be willing to Step in and help people and and solve something and the business started in 1978 So it's 40 years old this year. So we're having a little party this year this summer. Um
00:11:58
Speaker
But he was just your average independent insurance agent that you see on every corner of America, just helping people with their houses and businesses and friends that he gets to know in the community. Well, it wasn't until 1981 where he met a fellow named John K. Hanson, and he was the founder of one of bagel industries, very large Fortune 500 company here in Iowa based in four city. And he had an issue with customers buying RVs and the depreciation.
00:12:26
Speaker
And them getting a little upset when they would own these big motor homes and they would have a claim on their insurance. And these things depreciate a lot more than the average automobile does. So on a brand new coach, if you have a claim within the first probably four or five years and you have a note leverage on that RV,
00:12:48
Speaker
You're upside down. Well, the insurance carrier at that time was only going to pay you ACV, actual cash value. What that coach was worth at the time of loss. So if you owed 90, an insurance carrier was only going to pay 60 because that's what it was worth. Not only do you lose your RV, you can no longer camp with your family. You actually have to write a check for $30,000 to make this whole thing right.
00:13:08
Speaker
Wow. So he developed what we now know in the industry is total loss replacement for the RV. Wow. So he talked to Foremost Insurance back in 1981 and took the lead underwriter
Lessons in Business Ownership
00:13:22
Speaker
fishing and said, we got to solve this problem. And the endorsement that was put on it was for the first five model years, the insurance company will replace that RV with like make it model.
00:13:35
Speaker
And then the next five model years is purchase price guarantee. So for 10 years, you have kind of an appreciation protection on that coach. Certainly you guys are in the insurance world. You know, there's a premium to be had for that, but sometimes prices and everything. People were actually willing to pay additional premium dollars for that endorsement because they knew of the issue with them driving this thing down the road and the cause of an accident. And like, I don't want to lose my RV and have to write a check.
00:14:03
Speaker
Especially if they knew somebody who had to do that. That's right. That's kind of what launched us into the national scene. Got licensed in multiple states.
00:14:14
Speaker
got us into the RV insurance world, which still makes up about 65 to 70% of our business. Of course, I have been tasked with growing the business. When you buy something, if you just keep it the same, it's gonna take a long time to pay off that debt. So the idea is one plus one should equal three.
00:14:35
Speaker
So that's where the 99% perspiration comes in, where you just add a little technology and continue to harness what's already been built, and one plus one can equal three. And we are growing, but you can never take your eye off the prize, unless you're ready to. Unless you're ready to perpetuate to the next generation and find your little beach resort down in Florida or Mexico.
00:15:02
Speaker
What mind shifts have to happen in your head from going to a pharmaceutical rep
00:15:08
Speaker
managing yourself to now managing accompanying others? Well, there's some parallels with making sure you have a schedule and understanding your own finances and cash flows and trying to predict the future. But the differences are you're now responsible for everybody that works here and you're now responsible for your own rent on the building and your own paycheck.
00:15:37
Speaker
So it's a different shift when you have the responsibility. It actually, when you wake up in the morning, it's the first thing you think about. Versus when I was in pharmaceuticals, the first thing I thought about was not that I'm going to have to go catch my own food today.
00:15:55
Speaker
So a lot was given to you, right? You had a bag and you had to carry and you got a gas card and a vehicle and life was good, where the shift now is you can add your 100% in your own value.
00:16:12
Speaker
So it's a different mindset. It's not for everybody. You have to be prepared for it, but it can be extremely rewarding on days that you just don't feel quite right. You can say, I'm the boss. I'm just going to go and golf today.
00:16:31
Speaker
But you also have to be prepared for the other side of it that if you miss something because you're golfing or having fun, you just have to be willing to accept that. Yeah. Tell us what's your advice your dad gave you when you switched into business owner mode.
00:16:45
Speaker
I think what he, aside from the 99% perspiration, 1% inspiration, he said, congratulations. You now are an owner of a company. You only have to work half days. I said, you know, by God, you're right. I'm only working half days. He said, well, what I mean by that is you get to pick the first 12 hours or the second 12 hours. And it's not that you're always on the grind working and, you know,
00:17:12
Speaker
doing things constantly for 12 hours, you're just always thinking. I would say for 12 hours every day, I may at least put some thought into outside of normal eight to five working hours of how can I do this in
Diversification and Strategic Growth
00:17:26
Speaker
the business? Or how can I help this individual or company? Or what if I did this, what would happen? And it's a lot easier to work when it is your own. So it just becomes more natural.
00:17:41
Speaker
So it's good and bad. Some people that we have great employees here at five o'clock, they can shut it down and go home and they don't have to think about insurance policy until eight o'clock the next morning. And I was there in pharmaceuticals. When I got home at two o'clock or 2.30 in the afternoon, and I didn't think about work until the next morning. So now it's a shift in thinking where
00:18:12
Speaker
There's a lot more thought put into it, but I can also do that and play golf at the same time. Sure. That's great. Okay. I want to go to, cause you're the first guest that has all seven sources of residual income. So I want to go through them individually and then kind of talk about your situation. And then after that, I want to talk about how do you intertwine all of them together to have a cohesive plan for you and your family moving forward. So let's go through them.
00:18:38
Speaker
Let's start out with the first one which would be banking. How do you bank and how do you make that residual? So because of my Partners that are sitting here. I have learned quite a bit from Brian about the banking industry because I believe your history has been in the banking industry, right? Yeah, for sure. Yeah
00:19:00
Speaker
So, they have set me up on a policy where I can use my own cash to create interest off of it. So, how do banks make money? Well, they make money on interest, right? One of the things they do is make interest on the spread. So, I am always trying to utilize my cash position on where I can make a little bit of interest on that cash. So, I would say that's just off the top of my head.
00:19:28
Speaker
what I perceive myself as a bank. Certainly do I carry a debt load? Of course I do. I had to buy a business. Debt is a part of normal things when you're growing businesses and buying things. But if you can, if your interest rate of your debt is less than maybe the interest rate you're making in the market, you've in a sense made yourself into a bank and created that spread. Sure. Good. Okay. Number two.
00:19:54
Speaker
to his real estate yep so i have uh i wanted to be uh sorry for those people that didn't want to hear political propaganda here but i tried to be the donald trump of cedar rapids before his political career back in the early 2000s and buying property like it was my job and i worked at uh you know avid labs and i figured you know what i'm gonna try to do something for myself and i just started buying these little houses 40 or 50 000
00:20:23
Speaker
a pop, you know, 10% down payment isn't very much. So I was buying these things and renting them out for four or five hundred bucks. And so I got up to I think eight of those things before I realized either I'm going to have to do this full time or I'm just going to have to start selling some because it was at that time I started to have a family and my time started to get less and less on dealing with rental property type things.
00:20:47
Speaker
So, when my wife and I got married, she also had a house that we kept and rented out. And over the last 15 years, we have bought and sold different real estate. And, you know, per hour, if I had to break down my hourly rate on what I was doing, yeah, it might be 30, 40 bucks an hour.
00:21:05
Speaker
for those analytical folks but all in, if you spread out your real estate risk enough, it's very hard to lose money as long as you buy the properties right. I think this is an important part I want because we talk about this a lot with our other, you know, just a lot of clients and different things. You basically
00:21:27
Speaker
harvested that portfolio to make a bigger capital investment into not only FCIS, but then the building that FCIS sits in. Absolutely. So when I made the decision to buy the business, I needed a strong down payment. I needed some equity. So where would I find equity? Well, in my rental properties. So yeah, I had some other, you know,
00:21:50
Speaker
a boat and my house in Cedar Rapids. And there was some other pieces of equity I pulled from, but it was primarily property. And I was able to 1035 exchange that into the building we're now sitting in. So, you know, there are, if you do it within two years, I don't know, I'm not a CPA, but there are ways you can exchange property and continue to get a bigger piece of property that like this commercial building that we're now in. Without paying tax. That's correct.
00:22:19
Speaker
So let's jump because I think this is important. So we'll jump to number four. That's just traditional business. So FCIS is a traditional independent insurance agency. So that's number four. And then that is paying rent to your kind of number two real estate. Absolutely. So since the building is separate from the business, the business can be anywhere. It can be in Texas in a rental space.
00:22:44
Speaker
But I have an LLC that owns the business and it's just what's called a triple net lease back to the insurance agency. So the business is responsible for the rent, the taxes and the insurance. And so my LLC that owns the building is just really a holding place to continue to collect the rent to pay off the debt. And once the debt is paid off, then you've got something.
00:23:11
Speaker
So when you bought into FCIS, you really bought into two different assets. That's correct. And it didn't happen at the same time. I bought the business number one because my dad still wanted to rent on the building. He wanted to go fishing and hunting even more than he was doing. He thought, you know, that's a little cash flow for him. So I bought into the business to start. He wanted to understand that I was actually going to be
00:23:33
Speaker
continuing to work the business and not just be, you know, 50 to 60 percent of second, third, fourth generation owners have failed. I mean, it's no secret. You read any book because they want to just reap the rewards without the hard work. Absolutely. And it's I can see that in other things. So I made a conscious effort that I'm not going to let that happen. And so after year two is when I then bought the building after I had a little bit of equity built up in the business.
00:24:02
Speaker
my father felt comfortable enough like, listen, you need the reward now of owning the real estate. Let me cash out of it and start that perpetuation plan that we have talked about so we can then build into a longer term plan that was built quite well for both of us. But it takes a lot of communication and attorneys and accountants.
00:24:22
Speaker
Get your pens out folks, this is like dropping knowledge. So number three is investments and so you have a retirement plan and you do that.
00:24:34
Speaker
maximizing that benefit through your business. So the business is not only building equity in the business itself. That's right. Real estate. Yeah. So the businesses can also be considered an investment because the idea is to grow them. But there's, there's traditional ways for one case by mutual funds, buying stocks. Um, you know, I had another idea when I was younger that I was going to be a day trader. Well, I did that for about four days and I'm like,
00:24:59
Speaker
At the end of the day, I really didn't make anything. I bought and sold some stuff and it was fun and it was a rush. But then I'm like, I don't want to spend my time looking at tracking all these stocks all day. This is just going to make me stressed out and smoke cigarettes and do things I shouldn't be doing. So I did that for four days and I figured at the end of four days, I didn't make any money doing it. So I figured that wasn't the best route for me to go.
00:25:25
Speaker
I retired from day trading, so now it's more of a long-term approach. You can't follow the bumps up and down in the market. You have to trust your wealth advisors, as I have here, and you have to look at things for the long term.
00:25:42
Speaker
401ks, certainly if you have cash and you want to take a risk, you know, buy some mutual funds and buy some stocks, but don't put all your eggs in that basket. It can be fun and rewarding, especially the last year or so when we've had a pretty good market.
00:25:58
Speaker
One of a go was there for city was back in the 70s It was known as the little town of millionaires because the stock price of one of bagel was just hollering and quadrupling and just going up So crazy, but all these people were millionaires on paper. Uh-huh, right? What happened to half of them when the stock came back down? Yeah, they were broke on paper
00:26:21
Speaker
So it was like at the end of the day, their life didn't get any better. Certainly half the people took that stock, diversified it when it was high and were smart about it.
00:26:32
Speaker
Paper money is cool, but it doesn't mean anything until- You convert it to real assets. That's right. Gosh, knowledge. So then you, Tree Town is its own separate business and legal structure and you have- It absolutely is.
Impact of the Tree Town Music Festival
00:26:46
Speaker
That was designed as a partnership. So that was my sort of taste in, you know, I always had my dad as a partner, but having family as a partner is a little different than just having other business partners. You know, for those that are in stock clubs and things, it's sort of the same thing where you're putting a
00:27:02
Speaker
Each putting some skin in the game and you're all trying to run a business so certainly it hasn't come without its bumps in the road partnerships or can be can be very good because one plus one can equal three but.
00:27:17
Speaker
three divided by two can also be zero if you don't do it right. So there have there have been some bumps and that industry is a little different than insurance but it is continuing for and we've got our fifth year this May. So this is a big concert. It is one of the premier
00:27:34
Speaker
music festivals and most of it is country there is a rock night on thursday night but most of its country premier music festivals in the midwest sure so it quadruples the size of four city and uh there we can in in four days people come in and you know it's on the one and bagel campground sure uh lots of uh electricity and water and power out there and such and
00:28:01
Speaker
Heritage Park has a lot of ground that the stage gets put up and it becomes a mini city. And again, a lot of activity, a lot of zeros and commas come in and go out in four days. But it's cool to be a part of that, especially the city you grew up in.
00:28:18
Speaker
It absolutely is and I feel kind of like a farmer because I'm constantly watching the weather and saying what's the weather going to do and how's the attendance, how are the people going to react in those four days. But it's another LLC that's on my tax return and
00:28:39
Speaker
And it's a startup that i got involved in that takes some time sure you know any startup will anybody tells you that you're gonna make money right away is lying to you. I heard this once the the japanese they say basically they don't want to make any money out of business for seven the first seven years.
00:29:00
Speaker
Yeah, I mean seven years if you can't have a plan to make some money after three or four, you can always inject money back into it if you're growing like bananas and that's all fine. Look at Amazon, Facebook, all those tech companies, they didn't make money for a long time because they needed all that cash to grow. It was easy to dump fuel back on the fire, but there's value in that growth.
00:29:26
Speaker
Yeah, there's cash in the bank, but there's also value in the growth of the business because that still is worth something. I always tell people it's kind of like a slingshot. The farther you can pull that rock back, the farther it's going to shoot out. Sometimes you have to keep pulling it back and it's hard, but it's going to make you go for it. It's extremely hard when you're spending all your cash and you're building something. And there are some inherent risks there with what happens if the slingshot breaks, right?
00:29:54
Speaker
Like one of your competitors just completely undercuts you and in two weeks you're done. And that's an extreme case. But it can happen. You've heard of that. It absolutely can happen.
Seven Streams of Residual Income
00:30:07
Speaker
But that's why you diversify. You keep some mutual funds. You have some real estate. You try to become a bank.
00:30:15
Speaker
So the next one is a subscription model or affiliate revenue. How do you fit into that category? Subscription or affiliate model. So I guess off the top of my head, I would think that is more like an annuity where people are paying into a club and you really don't have to pump the gas much to continue to generate this revenue every month.
00:30:39
Speaker
I would say FCIS for you is exactly. I was just going to say that as long as we continue to have good policies for our customers, certainly they continue to pay the premium and we continue to help them. That is more of a subscription model. That one's a little more challenging, I'll be honest.
00:30:57
Speaker
We deal with a lot of RV clubs, which that's an easy subscription model. People pay $50 a year to be in the club and they provide a magazine and all these other things. That's more of a traditional subscription clubs. So I haven't started a club yet, but that could be the next thing. We might have just come up with something. That's right.
00:31:21
Speaker
Could be at least today the snow shovelers club. Yes of Northern Iowa where you you can pay a fee and you get a new shovel every year
00:31:30
Speaker
Very powerful right now. That's right. It would be very powerful. All right, let's go to six, which is royalties. And when I think about you and Brian and I were talking before we had this interview, we thought the tree town festival for you is definitely royalties. Yeah. And how you kind of collaborate all that together. But yeah, we do agree. It absolutely is. The value in the festival is the brand.
00:31:52
Speaker
Right. Because anybody can open up their checkbook and book Keith Urban, Toby Keith and say, I want you to come here. And if you write him a check, trust me, they will come. I've seen it. They will jump on their plane. If you wire them a whole bunch of money and they will come play for you. But what the challenge is, is to create that brand, which is where you get the royalties. If you can create a brand, you can, that's the value in the royalty is
00:32:17
Speaker
the Tree Town Music Festival, people know it, and they know what to expect when they come up there, and they're always willing to maybe spend that $150 ticket to remember that good time they had. Because it's a memory, and you can't put a price on memories. Absolutely. But certainly to the artists, that's pretty cut in black and white, where their music, they could be sleeping, and they will get a royalty because their music was played on Spotify or somebody downloaded it.
00:32:47
Speaker
so that's again more traditional but still the the music world i think the royalty is in that that brand i agree and lastly our favorite network marketing well you know
00:33:04
Speaker
I've been involved and my wife is more involved in a lot of these things and you know everybody traditionally says well it's just a Ponzi scheme. Well I mean in any it's not really a Ponzi scheme because it's not a house of cards that's falling down. Certainly some of them like any business model has fallen down but you look at any organizational structure right there's one person at the top and you've got people under you that are moving the bus forward that creates this big tree effect.
00:33:32
Speaker
And it's no different than network marketing. They just do not use traditional advertising to do such. So my wife has been involved in networks. She's been involved in a wine distribution company called the Direct Sellers. But Sellers is like a wine seller. It's not S-E-L-L-E-R-S. It's C-E. Yeah, very thoughtful. Very good brand. They're probably getting some royalties off of that.
00:34:01
Speaker
And back in the olden days when I had a million ideas as well, if people remember the quick star in the Amway days. Oh, yes. And you were approached by every single one of your friends. And I was a young entrepreneur trying to make in this world. I'm like, you know, that is a heck of a business model. I am in. And did it create income? Yes, it did. I had a couple people under me and we were putting the lotion on ourselves and drinking.
00:34:27
Speaker
Yeah, drinking the juice and we're going to work out and drinking the powders and those models. It has worked for my wife. She is a full-time nurse. She's a go-getter. She absolutely is. Shout out to Shannon.
00:34:42
Speaker
Yeah, being mostly a full-time mother and a full-time wife to me, she's got a lot on her plate. Sometimes it's hard to even fill up the gas tank. She has so much going on. Absolutely, yes. Sometimes the gas tank doesn't get full, but we look past those things.
00:35:00
Speaker
And we still continue to deal with the time that we have during the day to do these things. And part of what she does is when she's at home with the kids and doing random things is, you know, she gets involved in these network marketing opportunities because you can do those from anywhere. As long as you have a mobile device, you can do it from anywhere. I think the other big thing for me, because I'm the pro network marketing of this equation for Phil and I,
00:35:28
Speaker
But when you look at the startup cost for FCIS and bonding into this and reorganizing basically your entire portfolio versus your wife getting started at a network marketing company, talk to listeners about that different investment level.
00:35:42
Speaker
Yeah. So the buying into an existing business takes a check if you're going to buy anything. It's like buying a car or buying a piece of real estate. Typically there's a down payment involved and there's some equity involved. Sure. But with network marketing, their whole play is little to no money down, right? Like for 50 bucks, hardly any skin in the game, you can buy a packet and then it becomes your equity is your labor and your time.
00:36:09
Speaker
your advertising ability to talk to your friends. Sure. Right. Some others, you know, put billboards up and advertise all over and pay money to do that. Well, there's a lot of free advertising platforms, Facebook, you know, Snapchat, all these things where that network marketing piece has picked up. But you have to use your labor and your time, right? Every minute is worth something.
00:36:33
Speaker
And if you can utilize that, it can become where you're sleeping and you wake up and you have $300 more than you did have when you went to bed. Sure. So let's kind of start wrapping this up because I want to start kind of go over time. But I would say for the seven sources of residual income that you just talked about, in each one of your examples, I think the way that they all tie together is they're all dealing with more cash flow for you and your family.
00:36:59
Speaker
And that's the way you went into it. And I would say for you, you're never afraid to make a calculated risk as long as it helps you with your cash flow. And that's how they all are kind of organized for you and your family and that's how they fit together.
00:37:16
Speaker
because it's pushing you forward or moving the bus forward as your analogy is, to help you in cash flow diversifying all the same, all without taking your eye off the ball where one of them might take way more time than the other. They're all streamlined together for the cash flow.
00:37:33
Speaker
So, that's what I would say unless you have other thoughts. Yeah, I would agree. I would add that it's never a utopian world where you just follow these 10 steps and you will just be set for life. It never works that way but if you can do all seven, chances are if you actually spend some time doing it, three or four of them are going to pop and do pretty good. And yeah, maybe one or two is a failure.
00:37:57
Speaker
Right but if you're shooting sixty seventy percent success i did that a good thing which is what my experience has been some of them have not done so but others have just taken off by a little bit of fuel and help you make the other ones may be a little more successful money to their in light is the old school investment theory of diversification.
00:38:18
Speaker
When you look out over the next 10 years, you got six years under your belt, what are you most excited about in terms of just building your business, your family, and just continuing down the path that you're on? Yeah, I'm most excited about
00:38:33
Speaker
I think just when it boils down to it, getting some of the debt paid off and knowing that I have a plan put together to continue to use the cash flow and the growth of some of these things to just continue to get the debt paid off where I can really be a bank and go from a 2% spread all the way up to a 7% or 8% spread.
00:38:54
Speaker
and it becomes a fast-moving rock down the hill. So yeah, the rock isn't moving really fast for me right now. I'm not a very patient guy, so maybe it's moving faster than I think, but I'm just looking forward to that rock moving really fast where I maybe don't have to always work
00:39:12
Speaker
12 hours a day where my mind can be maybe other places and I have some open hours in the day to maybe pursue something else, maybe some philanthropy.
Future Goals: Philanthropy and Wealth
00:39:25
Speaker
One of the steps Warren Buffett talks about is if you've created this wealth, why not give back to other things that you believe in once you've reached that pinnacle?
00:39:36
Speaker
So that's kind of what i'm looking for is paying off the debt and then switching my mindset to perpetuating to the next generation and giving back. And he saw that with your dad and that not only the way he had things taken care of you know for you and your family but also i think that was probably a big cat catalyst for for investing in tree town and going back to forest city.
00:39:57
Speaker
Absolutely. That's one of the reasons why I did that because I wanted others to benefit from that event and they have. But it is rewarding to give back, as you guys know. If you make $100 and you give $20 back to somebody that didn't have anything, I mean, that can be more rewarding than making $1,000. Very cool. So how would our listeners find out more about you? How would they reach out to you? Well, I don't know. I guess just Google my name.
00:40:31
Speaker
I don't know. I would say you can go to www.fcisinsurance.com or you can go to www.treetownfestival.com. Buy your tickets. Yeah but buy your tickets to the festival, come up to Four City and you know certainly I'm an open book if you
00:40:50
Speaker
see me and you want to come up and chat with me, you're more than welcome to. I may be a little busy, but I promise I will give you an ear for a minute and chat with you. I'm very social. For sure. My last question, unless Brian has any more. I don't know. So your father passed away two and a half months ago. If he were here today, what would you tell him? What would you say to him?
00:41:14
Speaker
Well, that's a tough one, see, because he knew he was going to die in the last two months of his life, and we really, you know, thank the good Lord above, we really had two straight months of talking, and it was the best blessing ever. It was somewhat of a curse because you knew the end was near, but
00:41:34
Speaker
You know, honestly, I had I asked him everything I wanted to. You know, certainly there's specific things where if a customer calls and is upset or a partner gives you the wrong rub, you're like, you know, what would my dad do? You try not to get in that mindset because you're still your own person. But honestly, I would I would ask him why the hell didn't he get his colon checked out earlier? Yeah. So another public service announcement. You know, he was diagnosed with stage four colon cancer and it's a very preventable thing. So
00:42:02
Speaker
If you're 50, please get it checked. If you have a family history, you have to do it when you're 40. So mine's coming up here pretty soon. Colonoscopies are getting a lot easier. And I would just ask him, why the hell didn't he get that checked out earlier? Because he would still be here today. That's a good point. Guys, thank you so much for listening. If you have any questions for Brian and I, please feel free to reach out. Our website is www.wealth. What in the world is it? Oh my gosh.
00:42:32
Speaker
Yeah, guys, if you have any questions, please feel free to reach out to Brian and I at www.uncommonwealth.com. Our phone number is 515-650-3009. We would love to hear where you guys are at, any questions you'd have. Thank you so much, Courtney Woogie, for your time. And you've been listening to Uncommon Life Project. This is your host, Phillip Ramsey. And I'm Brian Dewhurst. Thanks for listening, everybody. Have a great day. Thanks, guys. You bet. Bye.
00:43:01
Speaker
That's all for this episode of The Uncommon Life Project, brought to you by Uncommon Wealth Partners. Be sure to visit uncommonwealth.com to learn more about our services. Don't miss an episode as we introduce you to inspiring people who are actively pursuing an uncommon life.