Preston Pysh  04:46

So Nathan, I mean, when I’m listening to this, most people I think, when you think you just looked at and you take a step back at this, most people don’t have that knowledge to even step into the room to start talking series A round of funding like, how would I negotiate that? How would I know that it’s such a young? I mean, what age were you at this point? 22 years old? 23?

Nathan Latka  05:07

23. Yeah.

Preston Pysh  05:08

So where did you learn this stuff? How did you know that?

Nathan Latka  05:11

That’s what’s great. And this is, I think, an important lesson. Even if you do know it, you should act like you don’t have a clue because what I did is I sent out monthly updates. And what’s it like people I respected and eventually, Preston, people started replying, going, “Can we invest in your series A?” And I wrote back and I said, “What the heck is a Series A?” So I knew a little bit about what it was.

But here’s something else I knew, the more mindshare that I consumed of these people that wanted to put money behind me, the more in they were. So being ignorant and making them become my teacher, even if I already knew everything or thought I knew everything. You have them hook line and sinker.

Preston Pysh  05:51

Oh, dying right now. Yeah, that is just like you took something and just totally flipped it on its head because most people, to be honest with you, at that age, they’re letting their ego kind of get in the way of things. And then they’d be like, “Oh, yeah, I know what a series A is.” And then you did, but you’ve just kind of rolled with it. You went in the exact opposite direction most people would go. And you’re exactly right. I’m sure I’m assuming you’ve read the book “Influence.” Have you ever readout? So you’ve read the book “Influence.” So you understand this idea of buy-in. And once people get their first step in the door, their likelihood of taking the second step is that much further. I love that story. That’s amazing.

Nathan Latka  06:29

So there is nothing from the wisdom and a soul perspective, there is nothing that an older person, and I don’t mean old. I mean, you know, an older person, even me seeing someone who’s 15. I’m going to be really, excited about investing in a 15-year-old IC. Or 50-year-olds are going to be excited about a 26-year-old they see if they can see their younger self in that person.

And so really, if you can study people that you’re trying to attract into your life, and then be a bit chameleon-like, in terms of body gesture in terms of when you talk to them, use their same tonality and speed. If you know they write with a black Uniball ballpoint pen, make sure for that meeting, you bring the same pen so that they go, “Oh my gosh, we’re using the same pen.” It’s like the little things to help them see themselves in you. And then you just become like an arm or a leg to them. It’s a natural extension.

Stig Brodersen  07:18

Wow, that’s a fantastic story, Nathan. And as you know, here on the podcast, we read a ton of books of how to succeed and it kind of feels like you just wrapped it up in like three or four minutes.

Nathan Latka  07:29

While you can’t take the same steps, but what you want to do is you want to study the heck out of them so you know exactly how they did it. And when you feel inside, based on the time you are in your life that you can test a part of their success story and do it differently, have the ego. And it does take good ego to make those changes and do it because you’ll never do the exact same thing and have the exact same story to have the exact same success.

Preston Pysh  07:56

So Nathan, who are some of the billionaires or people that were highly influential for you to just start moving in this direction at such a young age and start creating these assets that you created?

Nathan Latka  08:07

Yeah, there’s a bunch. So one of them is a guy named Red McCombs. I have his book, and we’ll put it in the show notes. But it’s about Red McCombs. He was the founder and creator of Cumulus Radio. So one of the reasons I’m studying him as because I have a podcast like you guys do that is doing really, well. It’s called the Top Entrepreneurs’ Podcast. And the first question I always ask on the show is, “How much money did you make last month?” And it’s usually the CEOs of big businesses. So you know, one guest did $900 million last year, and he’s disrupting the car industry or things like that.

And so the reason I like doing that is that it cuts through kind of all the fakeness and cloudiness online and gets right to the data. And it makes people feel very uncomfortable, which is very entertaining. Sometimes we fight about it, but the reason I study Red is that what he did with Clear Channel and Cumulus Radio is exactly what’s happening in the podcast space right now. It’s exactly the same thing. So when he says buying up radio stations in San Antonio, KWAP, WIOA,  *inaudible Channel Station, KEEP Stanhope Channel, and Tulsa. These are like individual podcasts that he had figured out ways to aggregate and aggregate and aggregate and build synergies. And now it’s a multi-billion dollar company obviously renamed iHeart Media.

So what I try and do is I try and study like today I’m interested in podcasting. Who’s someone’s bio that I can study, or what’s a company that was like podcasting 30 years ago, and who is the richest, most successful person in that space and go study them.

Preston Pysh  09:34

Yeah, I just love the technique that you’re talking about his who is the absolute best at whatever it is that you want to learn, and you want to know, and then study that person until you could finish their next sentence. And that’s something that Stig and I have tried to do in our community as well. And it’s just so refreshing to see somebody else with so much success under their belt at such a young age. And this is the same kind of approach that you’re taking is just like, “What is this niche podcasting specifically, or media in general, and who’s that guy who’s kind of killed it? And let me just study the heck out of them.” And I know you’re a big Warren Buffett fan too, so don’t act like you don’t know who he is.

Nathan Latka  10:13

I will tell you something about Warren. So you obviously you have “Snowball.” You have “Tap Dancing to Work,” all these great books. I’ve read them all. I forget which book it was in, but I remember you know, he always says, you notice this when he gets on CNBC or whatever, and says that he just did a big deal. He’ll always say because you need to make the other person feel good even after the deal. He’ll always say, “It wasn’t a deal that I just barely liked. It was barely a fair price.”

Right? Because if the other person’s watching like the big car dealership chain, I forget the name that he just acquired or bought into, that other person needs to go, “Yeah, baby. I got a great deal.” Right? And if Warren went on CNBC and said, “I just got a great deal.” The other person’s gonna feel like crap. Warren says I got a price I barely liked. So that’s one part.

10:56

The other part is and you guys I don’t know if you know this or not. I used three words, five words. Warren used this when he did things like the Heinz deal when he’s negotiating literally cents off the per-share stock price. So these companies his acquiring, if someone gave him an offer, he’ll simply write back and say, “Before I make a decision, is this your best offer?” And usually, people will write back and just shave sense off the stuff.

So just recently, this is about five months ago. It’s January now, about five months ago, we got an acquisition offer for Heyo. And I wrote back, you know, I got to the point where we had four or five people companies interested in buying the company. I said on Friday, it was like a Monday, I said, “On Friday, I’m making a decision which LOI, which is stands for a letter of intent, I’m going to sign.” So I emailed all the four companies that were interested and said, “Send me your best LOI before Friday.” And so they started sending me them throughout the week.

The first email I wrote back to every one of them was before I make a decision on Friday, “Is this your best offer?” And guys, you’re not gonna believe this, the guy that got the winning bid, okay? I sent that same email back to him three times. And every time he doubled his offer because his mind he was going, “Oh my gosh, you must have a better offer from one of these other guys I need to like increase it.” All I did was right back for three days straight., “Is this your best offer before I make a decision?” And we quadrupled the price that he initially started with.

So we sold Heyo. Yeah, it literally just happened. And I recorded the wholesale process, the negotiation, and how it ties in with Warren Buffett on my podcast and a little three-part series on the Top Entrepreneurs. So your audience can search the Top Entrepreneurs in iTunes if they want to listen to that. We recorded the process.

Preston Pysh  12:42

So we are going to have a link to this in the show notes. I guarantee everyone in our audience is going to want to listen to this including myself. So, Nathan, I love that story. Oh my gosh, that is absolutely brilliant. I love it.

Nathan Latka  12:57

Thank you. Thank you for those kind words. I will tell you that studying the biographies of successful people is one of the best uses of anybody’s time. And then where most people fall off… The difference between millionaires and people that become billionaires, I think is because millionaires will just read the books. You know, one of the things that I do is, I have all kinds of psychological things I do in the books where I will then actually…

I’ll tell you guys, can I take an example. Is this okay? This is “about passive income. In Red McCombs bio, okay? On page 46, of the things he talks about was he was trying to use radio, and buy radio ad space, to grow the amount of foot traffic going into his dealership in San Antonio, Texas. And so what he did is he got the top three radio stations in a room and said, “I am prepared, listen to my wording very carefully. I am prepared to give you my entire radio advertising budget for the next month for whoever sends me the best price.”

So in their mind, they’re just there sitting in this luxurious car dealership going his budget must be huge. Well, based on what I just said it could have been $1. So what he did was he implied something. And then because of that implication, he got back amazing deals and discounts from every radio station, pick the cheapest one and then spent his money there. That’s what a millionaire would do. They would read that and go, “Wow, that sounds great.” What I’m doing with that is I’m doing that with the podcast. So I’m in Blacksburg, I reached out to the top three radio stations. I said, “I’m willing to spend next month. I don’t have an advertising budget, but I’ll make one. I’m gonna spend next month’s entire advertising budget for the podcast on one radio station.” I’m literally just like, you know, we’ll post it.

Preston Pysh  14:30

Nathan, your point is this. And I love this point. Most people read it and it just goes in one ear and out the other. And they’re like, that’s a cool story. You’re taking it and you’re copying and pasting it into your life and into an application. And I think that if there’s a moral of the story here for people listening to the show, it’s this. Don’t just read it to read it. Read it to put it into the application. When you’re doing this stuff, these people are giving you the cliff notes and the answers to the test.

Stig Brodersen  14:59

That’s perfect. Nathan, and thank you so much for indirectly promoting our podcasts on our own podcast that we need to study billionaires.

Nathan Latka  15:07

I try, I try. Yeah.

Stig Brodersen  15:10

Nathan, I’m sure everybody’s sitting out there and they’re thinking I want to start, I want to create my very first asset and you know they might be thinking about one that is online or perhaps it’s not. But what do you recommend that you do and how can they figure out what’s the right thing is for them to pursue?

Nathan Latka  15:26

So finding the right assets for any individual is a lot like the first steps of cooking macaroni and cheese, right? The first thing you do is you boil the water, you put on the mac and cheese, and then it gets soft. What you need to do then is to drain the water, take all those little macaroni things, those macaroni things are like your opportunity. Chuck the whole thing at the wall and like four of them are going to stick but there’s probably 300 just chucked at the wall.

The trick is you have to understand you’re going to lose money on throwing the macaroni but the four that stick are going to turn into great waterfalls for you the rest of your life. That is like a faucet of cash flow that you just can’t turn off.  What most people struggle with Stig is they can’t, in their mind set up the bowl of macaroni. In other words, what I do when I first started, I said, “Okay, I am willing to spend, I’m gonna make this up to $10,000 on 10 different assets. I’m going to throw a granddad and see which ones return cash flow.” By the way, I only care about cash flow. In real estate, I don’t care about appreciation. I am a cash flow guy. If it doesn’t make cash for me, I’m out. And so you have to set up a rational test and say, I” won’t spend more than 10 grand, but I’m willing to test it. I’m willing to lose my money.” And then that’s how you uncover some of these truths.

Preston Pysh  16:36

Yeah, I like that. And it also I think a lot of people when they’re trying to create their very first asset, they’ll pick one thing. They’ll invest and in some cases, they’ll invest their life savings in it, which is exactly the opposite of what you just said. And then whenever it might not make it or it does poorly, they just give up and say, “Oh, I’m just gonna keep working this job that I’ve had.” And then it’s just done. They stop right there.

I think that the important thing that Nathan’s talking about here too is we had another gentleman on the show. He got a deal with Mark Cuban. In his deal, he worked with Mark Cuban. And that’s what he said, “You have to have these hacks. You have to be just cheap. And just, if you can’t do something with a little bit of capital, in most cases, it’s not maybe something that you should go after and pursue because the upside versus the downside is so lopsided. And you’re just setting yourself up for failure.”

So I think that it’s kind of twofold with what you’re saying here. It shouldn’t take a lot of money to create your first asset. There’s the first thing. Then the second thing is, it might not be the first thing that you try, you might have to try 10 different things until you get something to stick. But when you do get that one thing to stick, then you’re going down that path and it’s amazing how you get like this compounding asset accumulation thing going after you create the first one that works. And I think that’s what people have to have a realization for is you got to get that one thing to work and then after that, they just kind of start accumulating and building at that point.

Nathan Latka  18:01

It is the world’s biggest lie when people believe that they don’t have enough cash to get started finding an asset because you can look at very simple things. You only have $100 and you want to follow the advice that we’re talking about. You would go in and you would start looking for assets that generate cash flow in your daily life that you can buy for less than, you know, 10 or 20 bucks.

An example of one of those that I did very early on, I was like, 17 or 16, because I noticed that in every coffee shop, they had these little things, you put 25 cents in and it spits out chocolate-covered coffee beans or something like that. And I said, “Wow, all I got to do is fill that up maybe once a month, and then I just get a bunch of orders. I wonder what it would cost to buy one of those and do it?” So I just bought a few of those, like 10 bucks each, but they were returning about 12 bucks per month. Like, “Oh cool, okay, that’s two bucks a month for a little unit.” And then maybe you go into pinball machines, and then you go into vending machines, then you go into real estate and then to software businesses. But you have to start.

Preston Pysh  19:02

Hey, Nathan, I’ve heard in another interview and I know this wasn’t a question that we are going to ask. But I think it gets to the point of you don’t necessarily have to have the capital to create your first asset. And I want you to describe your story of how you started your company, Heyo, because really, it was a phone call, wasn’t it?

Nathan Latka  19:18

Yeah, it was many people. They go, “Oh my gosh, Nathan’s on the show right now talking about a software company. But I can’t do a software company. I don’t know how to code. I don’t know where to start.” Well, guess what? It doesn’t matter. I was architecture. So what I did is I went home and I called folks and here’s that once I sold them, and that usually, you know, have to make 10 calls to make one sale. That was my ratio back then. I’m much, much better now, by the way, but I would call and say, “Hey, I need you to go here to my PayPal account and send me 700 bucks for the custom fan page. And this is critical. Listen to these words carefully. I need six months to deliver to you the quality of the product I want to deliver. If I can’t give you that quality. I’m going to refund you out of respect? Is that okay?”

Now, whom the heck is gonna say no to that? Of course, they’re gonna say yes, they’re like, “Wow, this guy’s refreshing. He cares about quality, right?” I mean, in my mind, if I don’t sell at least 100 of these at 700 bucks a pop for 70 grand, it’s not worth me spending the time to learn how to code. So I have five months to sell and if I hit my target, then I have a week to learn and another three weeks to code and execute all these things for people.

So what happened was I hit the 70 grand. I sold 100 of these at 700 bucks a pop. My Paypal account was super full. I then watched YouTube videos from this little man, okay, this little man was teaching FBML on YouTube. That’s a Facebook markup language. So I taught myself for the free Facebook markup language, and then I started implementing these things and then quickly learned the key to passive income is to stop charging 700 bucks per project and instead build software that allows the end customer to use it themselves. That way, I can just be a middleman and collect 30 bucks a month for each person that wanted to use my drag and drop software. And that was my first big, multi-million dollar passive income machine.

Preston Pysh  21:13

For me, the thing that’s amazing here is going back to the example: everyone thinks they’ve got to have the money upfront. You completely flip that on its head, you’re like, “No, I’m just gonna sell something that I don’t even have a product for, that I haven’t even created, that I don’t even know how to create at this point in time. And let me sell whatever that product is, or whatever that might seem like in my head.”

And you’re selling that to people and you’re building the structure. The deal is you build in the time element and you’d give the money back if it didn’t work out. You’re at a loss of nothing. The only thing you’re borrowing is the people’s capital for six months at a free interest rate, which is nice, and then you build it, you make it happen. You just get it done. After you’ve proven the product out by selling it, then it didn’t… I think that that model is just amazing to hear somebody talk about it. It’s a win-win. In the long run, you delivered the product that you said you were going to do. You executed it. But I think that it just tells people and it shows people in a good solid example, that you don’t have to have $50,000 sitting in your bank account to start a company to do this stuff. I absolutely love it.

Stig Brodersen  22:18

You know, Nathan, I think this story is inspiring. And I gotta tell you one thing when Preston called me up and said, “Hey, Stig we should do a podcast.” The first thing I thought was, I have no clue how to do that. How can we ever do that? And to be honest, I’m not sure Preston knew that but we figured it out. So my next question to you would be before starting in podcasts, have you no clue about how to work with a mixer or how to work the mic?

Nathan Latka  22:40

Well, first off, you guys look great doing the podcast. You’ve got the branding everywhere. You got the pre-show, the post-show. You’re ranked high. You’re doing fantastic. I’m about to tell you something that most people are just their mouths are gonna drop. I have no idea how to use a mixer. Zero ideas. None. I don’t do anything on the podcast, except I spend two days each month in the studio, and I record 15 episodes each day for 30 episodes over two studio days. I then take those files which are saved via e-cam on Skype. And I simply upload them to Google Drive. And then I have a team that I pay an effective rate of about $32 per day to produce the 50-minute episode to publish it,  to do the graphics, to do the marketing, to do the show notes, to do everything. It just happens, because I know my time is more valuable than my money.

Stig Brodersen  23:33

I love it. And I just want to say there for people out there. So I spoke with Nathan like, I don’t know, four or five months ago, something like that. And I used to edit our podcast myself. And after speaking to Nathan, I was like, “Stig, what are we doing?” So we hired someone to do it. So at least they had a positive spillover.

Preston Pysh  23:53

The last thing I want to discuss right now is our efficiency of running our podcast compared to Nathan’s efficiency because let me tell you, folks, he is making us look silly.

Nathan Latka  24:09

How long have you been doing it?

Stig Brodersen  24:10

Well, you were episode 72 and we do once a week. So…

Nathan Latka  24:13

A year and a half year. I mean, I will tell you, I think, look, I’m hugely competitive. I don’t get into something unless I know I’m willing to hustle over the long term to make sure I can get to number one. And that was the same as the podcast. So we are going up very, very fast. You guys are, I think, ranked like 26 in the business right now. We’re a little bit below that. But you know, part of what I know will help us win is to make sure that we’ve got a system in place that is not dependent on me doing things because the people that will create the most valuable content and have the podcasts with the most listeners are the ones that will do it the longest. And the ones that do it consistently at a very high level of quality. So I’m trying to figure out what can I pay per day to make sure I hit those habits and how much of my time per month will I need to invest to hit those limits.

Preston Pysh  24:59

Yeah, you’re just much more strategic than us. I’ll say, Nathan. You know, Stig and I are just like, “Hey, we’ll talk about this today.” I know people that are listening to this are just gonna be floored at how thoughtful you are about success, and how to kind of go about it in a strategic manner.

So with that said, as we’re listening to this podcast, and people out there are trying to think of ideas for creating their first assets, I know that you’re a resource-heavy person and that you’ve read a lot and you’ve thought about it a lot of different things because like us, none of our ideas are original. We’re taking ideas from other people, and you’re doing similar things, based on what you’re saying. So knowing that what are some of the most essential resources and references that you have in order for people to create their very first assets?

Nathan Latka  25:47

I like the question, but I don’t like the question, Preston. Here’s why: a lot of people think there’s a silver bullet to this kind of stuff. And it is so much more art than science. All you can do is study what other people have done and then try and analyze patterns between your own life. So like the way I think about assets is this, and maybe this will be valuable in the show notes. I am now meeting one very, very wealthy successful person per day, right 15 or 30 over two days with the podcast. I also meet people in my daily life. If I meet somebody, and I sense they’re talented but unhappy, I’ll figure out what asset I can use my cash to put behind them that they will be happy building. Does that make sense?

Preston Pysh  26:31

It makes total sense. But I guess Nathan, for me, you’re in a position where you’re purchasing assets. And that kind of goes into what we normally talk about on our show where we’re talking about what can you do with your retain cash flow in order to invest it at a great rate and a great return? That’s what you’re doing when you’re doing that. But for a lot of people, they’re not sitting on you know, let’s just call it a million dollars to put behind a person that they know is just a total workhorse and somebody who has a talent for creating things. Put yourself in your shoes when you were kind of coming out of college. And what were some of those assets and those people that you kind of latched on to that gave you that knowledge on how to build and how to kind of up your game from the very beginning to being that intermediate player in the space?

Nathan Latka  27:16

Well, let me just say, I like attaining assets for free using my influence and persuasion. So like, that’s one of the big reasons I did the podcast. Every episode is now a bartering tool that I can use to influence other people and get the hard assets that I want. Every person in their life influences some other people and it’s very easy to get assets, just using leverage that you inherently have. You just have to find what that is again, you know, my store I mean… Literally when I put myself back when I was 19. I made 70 grand, okay? But then we got to 30 grand per month then I was using a lot of that money to hire employees and paying myself then we raised 550. Then we raised 2 million.

My first big deal was there was a lady named Erin in Blacksburg, Virginia, which is where I was, at Virginia Tech, who was a realtor. And I said, “Erin, I mean, I hear Real Estate’s a good thing to invest in. If you ever see a deal, email it to me.” I mean, that was like, my first time thinking about like hard assets. And she just wrote me back and said, “Yeah, there’s a three-bedroom. It’s a duplex, three-bedroom, two-bath on each side. You know the sale price Is $215,000 in Blacksburg, Virginia.” And she said, “I think it’s a great deal. I think rent could be about 2400 bucks per month. You know, a mortgage payment if you only put 5% or 20% down is going to be about 1500 bucks was going to cash flow grand per month.” She emailed me that on a Friday night at about 4:30, at about 4:35 I wrote back and I said do the deal. I didn’t research. I hadn’t even seen the house.

It comes down to Erin. That’s what I mean. It comes down to people. You see if I did all the studying myself, reading the motivational quotes, studying the books, and all that, I can only scale that so big. I would much prefer to find people that are just intelligent people that I can work with and do that. And so a lot of my early cash flow, maybe this is what you’re getting at, Preston. A lot of my early cash flow. Like you’re thinking I couldn’t do that real estate deal if I couldn’t put 20% down. But my early cash came from me selling fan pages like just grit and hustle to sell fan pages so I had a lot of money to play with.

Stig Brodersen  29:25

Well, Nathan, that was another fantastic, fantastic story, and Preston and I now we just simply afford here. That was why people might hear a post like we were like, “Tell us more. Tell us more. We want to do duplexes in Virginia now.” I mean, it sounds good.

One of the things that we definitely are into that’s Warren Buffett. I know that you’re into Warren Buffett as well, Nathan, and even though that you have been successful with a software company, and people might be thinking, “Well, Warren Buffett and software that doesn’t go hand in hand.” Still, you attribute your success to what you have learned from Buffett. So how has he influenced your career and your business decisions?

Nathan Latka  30:02

You know, I will tell you guys say you study billionaires. I’m about to put a blog post out or maybe I’ll do an episode on it. Almost 90% of people who are billionaires, current today, January 2016, or summer 2016 are worth a billion dollars. Almost all of them were doing the exact same thing when they were 13 years old. Can you guys guess what it is?

Stig Brodersen  30:24

Selling newspapers?

Nathan Latka  30:25

That is exactly right. Every single one of them, Warren Buffett, Red McCombs, Mark Cuban, every almost every billionaire when they were either 12 or 13. They were doing a newspaper route. And then I question myself, why? If so many billionaires were doing that exact same thing at 12 or 13, that’s instructional for parents listening right now. Like what is the modern-day delivering newspaper out for your kids so you can set them up to be billionaires. They take you on nice vacations when you’re older.

Well, what it comes down to is discipline, right? Getting up at 3 am every morning to delivering paper routes, is something that takes a lot of discipline. So it’s a mindset. It’s a mindset. It’s being able to get up every morning excited about what you’re doing and execute it.

Now, the second part of it in the newspaper route industry is if you out-hustle the people doing, you know delivering newspapers to streets down from you, you can acquire their route, right? So the same things, the same mindset principles that Warren Buffett is using to get the Heinz deal. It’s the exact same principles he was using to acquire the newspaper out when he was 12 years old. It’s just he’s done it so much. Now he has it perfected. So you have to build these habits into your daily life.

Stig Brodersen  31:41

Well, did you deliver newspapers when you’re 13? Nathan, I’m just curious.

Nathan Latka  31:44

I did not I will tell you what I did. What I did was I refereed soccer games. When I was very, very young, I would make 30 bucks a game and each game would be about 45 minutes. And then if you refereed 40 games, you would get a $200 bonus. I was making a lot of money doing that I reinvested that money when I was young. I mean I was literally… I was probably younger than you’re allowed to be working. I took that money and started buying like hemp. You know, if you ever see there are like bracelets you can make with hemp you like… So I would make those and then I would sell them on the school bus. And I’ve kept like, I had a little plastic like a box with liners in it where I had everything sorted and I have little custom order forms. I still have it over here. I’m gonna maybe I’ll take a picture and put on Instagram and you guys can put it in the blog post.

But that I’ve been used the refereeing money to do that. And before the refereeing money, what I was doing was I was convincing my mom to buy a hundred piece bags of candy from Costco for about $5.99. And I would take that bag of candy and sell each piece for $1 on the school bus because everyone always had $1 if their parents give them cash to buy lunch, and so parents hated me. I mean, oh my gosh, they hate me. But I made so much money selling hundred piece bags of candy on the bus.

Stig Brodersen  32:58

The main thing I’m disappointed about is that I used to deliver newspapers when I was 13. And I have a hard time figuring myself to be a billionaire that when I’m 34, like Nathan. I’m 31. So I still got three years to go. And oh, you’re not saying it’s impossible, but…

Preston Pysh  33:13

You’re gonna make it, dude, you’re gonna make it. No doubt.

Nathan Latka  33:17

You can’t think the trip to becoming a billionaire and people think I’m crazy when I say this. But I mean, I plan to be a billionaire by 34. I plan to run for president and win big in 2036. I want to run the world’s largest hedge fund, which means I need about 100 billion dollars under management. I want to do that by the time I turn like 50 or 60. I want to build the world’s largest *reef, which I’ve started doing because I’m acquiring storage unit facilities. I mean, I have goals that are individual goals that people spend their whole lives going after. But the trick is, I’m already planning right now, how I’m going to hit all those things. And I can literally in an Excel sheet if I keep doing what I’m doing, daily habits show you how I become a billionaire by 34.

Preston Pysh  33:54

So now here’s the thing. I think for certain people that would be listening to the show, they would hear that and they’d say that’s totally crazy. That’s totally nuts. But I’ll tell you, I’m listening to that. And I don’t think that that’s not at all… I think that that it is going to happen. And I think that the mindset is probably one of the most important things we can discuss right now because there’s a book called “Think and Grow Rich.” We did a review on it. I forget what episode it is, but we wrote an executive summary for people to listen to. I guarantee you. I don’t even know if Nathan’s read this. But I guarantee you, Nathan’s read this book, and he’s nodding.

34:29

So this is what that book is all about. And it’s the mindset. It’s not the idea. You didn’t hear him say, and one ounce of what he just said, I think by the time I’m 34, that I could potentially have a billion-dollar net worth. You didn’t hear him say that at all. What you heard him say is when I’m 34 years old, I’m going to be a billionaire. Okay? And whether it’s true or not, it doesn’t matter but in his mind and in his head right now, that is happening, folks. And that mindset of it is going to happen. And I’m gonna figure out every way possible in order to make it happen is the mindset that separates people who become billionaires or have a high net worth, or whatever it is that you want to accomplish. It doesn’t have to be even net worth. It could be, I’m going to be the best soccer player in the world, or I’m going to be the best javelin thrower or whatever it is that you desire. It can be yours. But it has to start with your mindset in fully knowing, without one doubt, one iota of a doubt that it’s going to happen. When you start there, you are going to automatically start figuring out what are the milestones that have to happen between time now and that date that you put in the sand that it’s going to occur.

And I guarantee if we sat down with Nathan with a video camera and said, Nathan, show us the map and the path of how that’s going to happen. He could roll it out and show us exactly where he’s going to be at each point in time in order to achieve each one of those milestones with the end date of 34 years him being a billionaire. He has that. I promise you. I have no doubt in my mind because when you think like that, and you know something’s gonna happens, you figure out and you find the solution in order to get there. And that’s extremely important.

Amazing, Nathan, I absolutely love that you shared that because most people that think that stuff and have the confidence behind it, don’t share it. And I think it was great to hear you say that. And so people can hear that mindset and understand what it is you’re going after. I just love it. I absolutely love it.

All right. So Nathan, talk to our audience about opportunity cost, specifically talk to them about the opportunity cost of their time and working efficiently and effectively.

Nathan Latka  36:35

Yes, the opportunity cost is a very, very real thing. I’ll give you an example. I just sold Heyo. So now I don’t have a salary. I don’t need a salary, but I don’t have one. And one of the things that were going to happen after I sold was I was going to take a position making a lot of money on a salary for a very successful company that everyone listening right now knows very well. My fight or flight mind that like security, by the way, every human-like security says to take that job.

But here’s what I know, my biggest successes in life come when I first create space in my body. And second, that space can be filled with something amazing. The trick is for humans, it’s like cutting your body wide open with a big gash. People can’t operate in that amount of uncertainty for a week or two weeks, or whatever it takes for you to find the big thing to fill that gap with. So what I did is I said I’m not making an offer. I said I have so much confidence in what I’m doing. This offer is not going to help me get to where I want to be in, you know, four or 5, 6, 8 years. So I’m going to say no, I’m going to gash myself. I’m going to be comfortable in a space of not knowing what’s going to happen and just trust the fact that my mind is going to bring me things that are much higher value than that job would have done and it’s happening.

But you have to create that space first. You can’t hedge and try and plan everything before you create that space because your mind will bring you success.

Stig Brodersen  38:12

Yeah, I definitely think you’re right about that, Nathan. And I think that I wouldn’t call it a mistake because that sounds so judgmental, but what a lot of people are doing is that they’re giving away their best hours to someone else. Because when is it that they’re most productive? Whether it might be in the morning or it might be after lunch? It’s definitely not 7 pm whenever they’re exhausted, coming back from work,. So that’s another reason why they don’t start off and making this venture that you’re talking about. Like the drain for energy, you need to have that energy in your control before you can start creating your own business.

Nathan Latka  38:45

Yes. Let me give you a great example because this has happened with several folks that I know. I don’t do consulting or coaching because I don’t want the money. I don’t want that responsibility on my mind. But sometimes if I liked somebody, I do it. There was somebody who was working in a corporate job. And I said,  “Listen,  I understand you have kids, I understand you’re married, I understand you have real expenses. You’re not using your mind to its full potential, but you’re never going to unless you cut your safety net and burn the boats. I need you tomorrow morning, when you go to the office, sit down with your boss and tell him you have to quit because you know, you’re capable of so much more. And you don’t see path or avenue at this company.”

Do you know what happened? You know what they say about deal-making. When you walk away, you’ve got to walk away. And usually, what happens when the person you’re negotiating with feels like you’re gonna walk away, they give you a much better deal. You know what his boss said, “We’ll double the salary.” It’s a one or 15-minute conversation. And it was all just his mind being okay with operating in a space where he had no job so that he could tell his boss, “I am quitting, I am leaving. And here’s why.” That’s what I mean when I say it is a mindset more than anything else.

Preston Pysh  39:53

So did he stay?

Nathan Latka  39:55

He still left.

Stig Brodersen  39:57

Perfect.

Nathan Latka  39:59

And now he can tell like as he’s looking at new things to do, he can say, “Listen, like I was making 400 grand in salary at this other place like I was doing 200. I was gonna leave now I was making 400. I mean, unbelievable position.” That has now leverage for him. Anything he does, he can say that and that little piece of leverage gives him so much credibility across anything else he wants to do. It’s very powerful.

Stig Brodersen  40:21

Nathan, I have the next question. I do want to talk about real estate because I know that you are starting to invest in real estate and having your own business. I know you are also into stock investing, and there are so many different asset classes out there. How do you figure out where to put your money?

Nathan Latka  40:37

I put my money where somebody I know well and that I trust and respect tells me to put my money. And I don’t mean a financial planner, by the way. I mean, somebody in that asset class that for whatever reason, can’t take advantage of a deal that they see and they bring it to me. So realtors, right? Maybe they for whatever reason they see a great deal on the MLS and they can’t take advantage of it. You want to be the first person on the top of their mind that they’re gonna deal with. Or if someone is, I just started getting into buying raw land, right? And all kinds of sites sell raw land. And so I just did a deal. It’s a small deal, but I bought a piece of raw land for 1600 bucks. I just sold it for 6500 bucks, but it wasn’t cash. What I did was I did it on a note. So that person is going to pay that off by paying me 200 bucks a month, or I forget the term, but a lot of months. And so basically, I put in 1600 bucks. Now I have a little cash flow stream of 200 bucks a month for the next foreseeable future. Now I’m thinking how can I do more of these deals, larger acreage, more people? Who can I connect with that will bring me deals? So you just have to find people that interest you, and then just go hard in those spaces.

Stig Brodersen  41:41

Yeah. And another thing, Nathan, is that I think we touched on this in the interview too, but here on the podcast, we’re big on reading and we know that you are too. The difference is perhaps the very special reading technique that you have. Could you tell us about that technique and how others can apply the same thing?

Nathan Latka  41:59

Sure. So I found a book a children’s book at the library that I knew I had no interest in the content, I picked it up and I said, “I’m only practicing this to figure out how fast I can read and still retain content.” So it’s I mean, there are some very simple things that I did. by the way, you can’t do this on a book you’re interested in, because then you won’t practice the habits that you need to read fast, because you want to study everything.

So it’s very simple. I got this book, I ignore every three words on the left-hand side of the page, left and right side of the page, I only read the middle and let my peripheral vision just kind of suck up everything else. I set a little using my finger, I made it move at a constant level on every line. And I if my mind said, “Wait, slow down.” I wouldn’t let it because I didn’t need to slow down because I didn’t care about what the children’s book said. I just needed to practice absorbing information subliminally.

Now once I got that down to an hour and I was cranking 600-700 words per minute, the average human does 300 maybe 247? Something like that. When I started doing this people go, “Nathan, you read this fast, you don’t retain information.” I say baloney. Not only do I retain it, but I also put it into practice in real life.

The way that I do that, it’s very simple. Anything that I think is a quote that’s going to just like get me fired up in the morning, I’ll just underline it. Any name that’s mentioned in the book, I circle. And any piece of literature like other books referenced in the book, I will double underline. And then after I read each book, I’ll go back through and I’ll look at all those things. And I will list in notes. People mentioned in this book, other books to read from this book. And one of the reasons and here’s a secret I’ve never shared. One of the reasons I can retain so much information is it’s all connected by one string. So if I read a name in this book by Red McCombs that I liked, I’ll go read their bio. And so the thought line in my brain is Red McCombs book, he mentioned the best governor in Texas and I read his book. So it’s always a chain and that’s what allows me to retain information so fast.

Preston Pysh  43:42

Amazing. I  don’t read books like that. Now, whenever I do read, I mostly use Audibles, listen to books. But sometimes whenever I am reading a hard copy, I do something similar where I’m highlighting and taking notes in the book. And then what I do is I tab the pages on the notes so that I will go back and reread the book. If I can reread something in, you know, a half-hour to an hour and I can hit all the highlights and the most important sections that I had in the book. But I’m not speed reading it like you are. I don’t know if that would work for me or not. But that’s a very interesting discussion and interesting that you started off with a children’s book in order to discover the talent. That’s pretty neat.

Nathan Latka  44:31

Yeah. And what makes it easier to is I know the general buckets of things I’m thinking about so I mentioned earlier, real estate, reads, hedge fund, right? So anytime I’m reading and any one of those buckets are mentioned, I have a little symbol for each of those buckets, which allows me to very quickly. After I read it, go back through and just jot down all of those notes for those buckets, which helps me get closer to those goals.

Preston Pysh  44:55

So I got a question that’s a little off the cuff here. So you’re talking hedge fund versus owning a publicly traded business. So are you studying Dalio because he’s probably the best living example of a hedge fund? Why are you going down the hedge fund desire versus just owning a corporation and growing into a multi-billion dollar enterprise? Why? I’m kind of curious why you choose that route because a lot of people want to shy away from… Or my opinion is, I want to shy away from the hedge fund thing because I think you’re kind of handicapped by the timing in which people give you capital. So I’m kind of surprised by that.

Nathan Latka  45:30

I plan to do both of those things. One of the things that when I say hedge fund is you have to think okay like I read “King of Capital,” right? I’m sure you guys probably read that book. But I study all these hedge fund guys, I love Dalio’s all-weather fund. I love unconventional success, which is how Yale’s Dave Swenson. How he manages Yale’s endowment and the asset class portfolios that he goes after. So that’s how I do my asset class in terms of just my cash and where it’s going in terms of the stock market.

The reason I bring all that up is that you have to then say, okay, you want to have the world’s largest hedge fund. How do you start? How do you get your foot in that space to create momentum? And it’s very, very simple. It’s this a lot of companies that are smaller, where the CEO has a very large ego, and just wants to take a company public. So he or she can say I took the company public. You can go search and look for companies that have market caps that say less than $10 million. In those businesses that are that small, the simple expenses you incur annually for the reporting to be public, are through the roof. If you simply buy that company, take it private, and eliminate all the overhead for the reporting, it’s cashflow positive.

So I can start acquiring publicly traded companies, lots of them using this model, and run it like a private equity firm, basically, but I’m not killing jobs. I’m just killing the CFO or the person doing all the publicly traded reporting.

Preston Pysh  46:53

That’s interesting. Are you saying that because they have to go public, they’re having the report things that were aren’t necessarily something you’d have to report at a private level, and that’s why it looks like it’s not making that much money? Is that the essence of it?

Nathan Latka  47:08

Exactly, the administrative costs of being public range, I would say it depends anywhere between $750k and $1.3 million per year. Just reporting fees and fees to the stock exchanges.  I mean, all that stuff. So you can literally suck out almost a good deal. $1.3 million in annual cash flow from these businesses that look like they’re not doing anything publicly. But you can suck that cash out of them by just taking them private.

Preston Pysh  47:32

And that’s your 10% right there on the bottom line? That’s interesting.

Stig Brodersen  47:37

Can I ask you, Nathan, so when you are acquiring because you know, there are all these regulations in terms of how much you own and then you have to make a *tender offer and all that, how do you process whenever you want to acquire say such small company, also to make sure because I guess it’s a very liquid too… So how do we make sure that you will get the company at whatever current market price, how do we ensure that the price doesn’t spike?

Nathan Latka  47:58

I don’t even know that I had to think about this. This is the value of having such confidence telling people that you’re going to do something because then they ask you great questions like Stig did and he knows exactly what to research to make sure you can do it right. That’s the value of just going and shouting your big goals to the world all the time. Stig, I have no idea what you just said. But it’s recorded. And I’m gonna go ask somebody smart how to do that. I’m gonna figure out a way to do it.

Stig Brodersen  48:20

I love you said that because before the interview, Preston said to me, “You know, we need to speak to him, that Nathan guy about Facebook, because we have a Facebook page, and we have no clue how to use it.” Yeah, exactly. We just are just on Facebook, because we think we have to be on Facebook. We have no clue how to use it. I can tell you something about *tender offers. Who knows?

Nathan Latka  48:38

That’s the point though, is to tell the world and the world will help you get that goal.

Preston Pysh  48:42

We’ll be more than happy to help you with that one there, Nathan.

Nathan Latka  48:46

Maybe we will record it in an episode. Well, the first deal I do, maybe that’s what we’ll do. We’ll do it. It’ll be very cool.

Preston Pysh  48:52

Absolutely. We’re always game.

The last question we got wrapping it back around to retained earnings and you’ve made enough money that you’re going to invest it now. We’re really curious because we know you read a lot of books, Warren Buffett, I think I heard that you had read all of Warren Buffett’s shareholders letters which Stig and I absolutely love and recommend for everybody out there. But what book and we’ll even give you two, have kind of impact your investing approach and your investing philosophy or maybe was something that you said, “Wow, I haven’t done any of this stuff. And it’s kind of warped my way of thinking,” that it had a profound impact on you?

Nathan Latka  49:26

Yeah, it’s kind of like the personality tests. I don’t take them. I don’t commit myself to one or two books because then you self align. Your personality and your ego become attached to those books. I’m going to tell you two books and then I’m egotistically attracted to those things, which means I might miss opportunities, you know what I mean? So, I mean, what I’ll tell you is one of the first books ever I read on this was “Rich Dad, Poor Dad/” which many people probably have heard of. “Think and Grow Rich” is important. You know, what I’d rather do actually, is tell people the pattern of how I’m reading and they can fill that pattern with whatever interests them.

Preston Pysh  49:59

Here’s what I like about this, and this is my takeaway from what you just said. The thing that Stig and I are trying to push on our audience and let them know the importance is just reading in general. And we’re talking about like these people that have accomplished at ridiculous levels, the common thread amongst all of them is they’re just total learning machines. And they read like a fence. And so Stig and I, we do about a book every two weeks, that’s about our bandwidth. As far as reading, you’re doing two books a week. So you’re reading at a pace. It’s double the speed that Stig and I are doing or even more than that, and that’s the key takeaway that I think comes out of this question for our audiences are listening to you is, this guy is reading fence.

And if you think that he’s just sitting around making these deals, and he has the magic touch, you’re kidding. I mean, he does have a magic touch. I will say that, but he is reading like a fence and he’s just absorbing so much knowledge from doing that. And I think that that’s the key takeaway here for a lot of people is, you’ve got to come up with something that you’re just continuing to grow and to continue to educate yourself. And you’ve got to start with people that are at the top of their game for whatever it is that you’re looking to research or study or become great at.

So, Nathan, what an interview. I love this. This was so much fun. And I want to give you the opportunity to give people a handoff to some of the places where they can learn more about you, your podcast, whatnot. So please take this opportunity to tell people in our audience where they can learn more about you.

Nathan Latka  51:30

Yeah, well, guys, I’d love to connect with any of you guys, especially if you have questions like Stig did about taking these small market companies private and maybe people that do this, I’ll show them the financials in the inner workings and in a very private way. But I’d love you guys connect with me, the quickest way to do that is if you just text Nathan, my name to the number 33444. That’ll give me your email. What I’ll do is anyone who does that, I will send them the deal documents on the first-ever asset purchase I did when I was 202. And that way they can see the first deal. They’ll see the email chains of how he negotiated it. And I think that’d be valuable. So again, that’s just text the word Nathan at 233444. And guys do that now. If you’re jogging right now, you’re probably working up a sweat and you’re going, “I’m going to do this after I shower when I get home.” Just go on the side of the trail right now, do it. If you’re driving, just pull over and do that now. Otherwise, you’re going to forget: Nathan 233444.

Preston Pysh  52:24

So, Nathan, I’ve got a quick question to ask you, have you ever gone out to the Berkshire Shareholders Meeting?

Nathan Latka  52:30

I haven’t, but I think I need to.

Preston Pysh  52:33

We are taking our community, the investors podcast to the Berkshire meeting this year. It’s at the end of April, at the start of May. I know you’ve got a very busy schedule, and it sounds crazy.

Nathan Latka  52:44

I’m in.

Preston Pysh  52:45

You’re in. I love it. I love it. So Nathan is going to come to the Berkshire meeting with us. We’ll get your credentials to get into the meeting. You don’t have to worry about that. Stig and I will work that piece of it. But we have over 200 people signed up from our community, flying out to Omaha, going to the meeting this year, and it’s just going to be a blast. That’s the whole weekend, we’re just going to have a great time. We’re doing a pub crawl on Saturday night out in Omaha in the market district there that they have. We’re going to be going around, we’re probably going to hit I don’t know, five to seven different bars and just have a great time with our community.

So if people want to still sign up, there’s a link on our website to sign up. I don’t know if you want to start bringing some of your community into it. But we’ll give you all the information after we’re done recording, Nathan, and I know there’s going to be lots of people in our community, they’re going to want to talk to you when we’re out there. So this is going to be just a blast.

Nathan Latka  53:36

I don’t know what’s even on my calendar then. But I will move it all. I will be there with great opportunities with good people. You just have to jump so I’m in.

Stig Brodersen  53:45

Perfect.

Preston Pysh  53:46

I love it. All right. So that’s all we have for you guys this week. What an episode this was fun. Nathan Lakha. Thank you so much for coming on our show.

You guys we put out a lot of information. If you go to our show notes, you can see all the links for all the stuff we talked about. We talked about a couple of different books and stuff like that. If you want to go and sign up on our email list, we send out free executive summaries for every single book that we read. So if you sign up on our email link there, we don’t send out any advertisements or spam. So just sign up on that. And we’ll send you guys our free executive summaries for all the books that we read. So that’s all we have for you guys this week. And we will see you guys next week.

Outro  56:16

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