#133: Millennial Investing and House Hacking with Robert Leonard

#133: Millennial Investing and House Hacking with Robert Leonard

#133: Millennial Investing and House Hacking with Robert Leonard

This week on YAP, we are chatting with Robert Leonard, entrepreneur, investor, and previous motocross athlete. Robert is also the host of the popular podcast, Millennial Investing which he started to reach millennials thirsty for financial knowledge. Millennial Investing guides millennial investors getting into long-term stock market investing, options trading, and more with guests such as Matt Higgins, Tom Bilyeu, Lewis Howes, and Kevin O’Leary.

In this episode, we talk about Robert’s beginnings in motocross and the life lessons he learned from it, Robert’s experience in college, and how he got started in investing. We’ll also discuss how you can get started in real estate, how you can invest with a couple thousand in the bank, and Robert’s best financial learnings and advice for those looking to get started. If you’ve been looking to get into real estate investments, this episode with Robert’s step-by-step process is for you!

Sponsored by –

Gusto. Get three months free when you run your first payroll at gusto.com/YAP

The Jordan Harbinger Show. Listen to the show here jordanharbinger.com/start

Social Media:

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Reach out to Hala directly at [email protected]

Follow Hala on Linkedin: www.linkedin.com/in/htaha/

Follow Hala on Instagram: www.instagram.com/yapwithhala

Follow Hala on Clubhouse: @halataha

Check out our website to meet the team, view show notes and transcripts: www.youngandprofiting.com

Timestamps:

01:10 – Robert’s Background As a Motorcross Racer

04:49 – What Motorcross Instilled in Robert

09:17 – Robert’s Experience in College

11:38 – How to Look at Stocks

16:54 – Biggest Lessons From Warren Buffett

19:32 – Robert’s Start in Investing

23:24 – How to Get Started in Real Estate

27:25 – Pros and Cons to Renting

30:21 – What to Do with 20K in the Bank

34:59 – Good vs. Bad Real Estate Investment

38:45 – Robert’s Thoughts on Index Funds

42:30 – Advice on How To Evaluate Speculative Investments

45:02 – Robert’s Biggest Learnings From Michael Michawitz

48:12 – Robert’s Secret to Profiting in Life

Mentioned In The Episode:

Robert’s LinkedIn: https://www.linkedin.com/in/rwleonard

Robert’s Instagram: https://www.instagram.com/therobertleonard/?hl=en

Millennial Investing Podcast: https://www.theinvestorspodcast.com/millennial-investing/

#133: Millennial Investing and House Hacking with Robert Leonard

[00:00:00] Hala Taha: You're listening to YAP Young And Profiting Podcast, a place where you can listen, learn, and profit. Welcome to the show. I'm your host, Hala Taha and on Young And Profiting Podcast, we investigate a new topic each week and interview some of the brightest minds in the world. My goal is to turn their wisdom into actionable advice that you can use in your everyday life.

[00:00:24] No matter your age, profession, or industry, there's no fluff on this podcast and that's on purpose. I'm here to uncover value from my guests by doing the proper research and asking the right questions. If you're new to the show, we've chatted with the likes of ex FBI agents, real estate moguls, self-made billionaire, CEO's, and best-selling authors.
[00:00:46] Our subject matter ranges from enhancing productivity, how to gain, influence the art of entrepreneurship and more if you're smart and like to continually improve yourself, hit the subscribe button because you'll love it here at Young [00:01:00] And Profiting Podcasts. This week on YAP, we're chatting with Robert Leonard, entrepreneur, investor and former motorcross athlete.

[00:01:08] Robert is also the host of the popular podcast, Millennial Investing which covers investing basics and financial advice for investors up to their late thirties. Robert is an accounting and finance professional with an immense passion for stock and real estate investing business and entrepreneurship.

[00:01:24] He started Millennial Investing to reach millennials thirsty for financial knowledge. And this episode, we talk about Roberts beginnings and motorcross and the life lessons he learned from it. And we'll also discuss how he got started in investing and the most cost-effective way to invest in real estate with house hacking.

[00:01:40] If you're trying to build your wealth, this episode with Robert should be right up your alley.

[00:01:46] Hey, Robert, welcome to Young And Profiting Podcast. So glad to have you here.

[00:01:51] Robert Leonard: Thank you so much for having me Hala, excited to be here.

[00:01:53] Hala Taha: Yeah, me too. I think that your topic is so relevant. It's, you host the podcast called Millennial Investing
[00:02:00] and you talk all about investments and real estate investments.

[00:02:03] And I know that my audience really likes this kind of stuff. So I feel like you're going to provide lots of value. You also, in your mid twenties, you are the definition of Young And Profiting, and I want to get into all of your different pieces of advise. And going to really dig deep in terms of stock advise, real estate advise, all that good stuff.

[00:02:21] But first I want to take it back. We like to always take it back and understand the journey to where you got to where you are today. And I did some digging and I saw that you were a motorcross racer growing up. We started at four years old and you competed competitively for 10 years. And by the time you were 14, you were like the second best in the world at that, which is crazy.

[00:02:43] And then everything changed very quickly once, 2008 hit and everything crashed. So talk to us about that. Talk to us about what you were like as a kid, and then how you ended up pivoting into becoming an investment expert.

[00:02:57] Robert Leonard: Yeah, so it's interesting because when I go on [00:03:00] podcasts as guests, a lot of times the host and sometimes the audience is surprised that when I get asked about my background, that I go back to when I was four years old, because most people don't go back that far.

[00:03:09] But like you mentioned, I was a motocross racer and not a lot of people in finance or podcast or investing are in a motorcross. So it helps me stand out. And that's why I always start my story there. And you're right. For 10 years, motorcross was my entire life. By the time I ended up hanging up the boots, you could say I was ranked number two in the world, in my age group.

[00:03:28] And to put this into perspective for people who aren't familiar with motocross, it was like being a prospect to go to a major leagues for any other sport, whether it be baseball, football, basketball, but basically I was expected to be part of the up and coming class for the next level of professionals in about a year and a half or two years when you turn 16.

[00:03:45] But like you said, the 2008 economy crashed. And so that was a piece of it, but it wasn't necessarily the biggest thing. There was really three things that caused me to stop racing. And basically we had a couple of people, very close to us, pass away from racing. A couple, got [00:04:00] paralyzed from crashes and some of them were close to my age.

[00:04:03] I was only 14 at the time. It really hit my dad hard to see that happen. And then also, again, like you said, the economy crashed, so money was tight. Racing is very expensive, and then third, I was racing, ATV motorcross, and there's two different types of motorcross there's ATVs and dirt bikes. And I won't go into the nitty gritty, but basically the ATV industry as a whole was declining.

[00:04:23] And my dad could see that the future of ATV motocross wasn't very strong. And so he said, I'm not going to risk your life and spend all this money on this. If the future isn't super bright. And so their bikes had a little bit longer roadmap ahead. And so we decided, that's enough is enough.

[00:04:38] And at 14 I was done racing. My entire future was gone because all I planned on doing was becoming a professional athlete by racing motorcross, no backup plan, nothing like that. Nobody in my family has ever gone to college. So I had no intention of going to school or anything. Then I'm 14, I'm a freshman in high school.

[00:04:54] I had to figure out what I was going to do. And I did a little bit of self-reflection as much as any 14 year old can do. And I [00:05:00] realized that I was pretty good at math and I really liked money. So I said, why don't I combine these two things and get into investing and finance and accounting things along those lines.

[00:05:11] And so one day I stumbled upon a guy who had a day trading stock course on Facebook as a Facebook ad. And I started to check it out. He was promising overnight riches to everybody. And basically there's a 14 year old kid, of course, that drew me in. And thankfully whether it was my own intelligence or a stroke of luck, I realized that what he was pitching probably wasn't the most realistic thing.

[00:05:34] But what it did do is it led me to Warren Buffett. And so ultimately I ended up studying Warren Buffett's starting when I was 14 until today. So little over a decade ended up going out to Omaha for the Berkshire Hathaway annual shareholders meeting. And that has led to my passion of stock investing today.

[00:05:51] Hala Taha: That's amazing. I love the fact that you pivoted and a lot of people who are really successful that have come on my show have experienced [00:06:00] something really traumatic along these lines. I remember I just interviewed Maya Shankar and something very similar. She was a violinist. She was going to be the biggest violinist in the world.

[00:06:08] When she was around 15, she had a finger injury. She couldn't play the violin again, and she had to totally pivot, but she ended up becoming super successful. And I think there's something to that. What do you think motorcross taught you or instilled in you that made you. 14 year old, who was willing to do stuff outside of school and study somebody like Warren Buffett on your free time, because most 14 year old kids are playing video games in their free time.

[00:06:35] So how do you think that shaped you and your maturity?

[00:06:38] Robert Leonard: At the time, I had no idea. I don't, I wasn't something I thought of. I was like, yeah, motorcross taught me this, so I'm going to do this. But now 10 years later, looking back, it has shaped so many different things. I think probably the biggest thing is hard work and dedication because to be at that level of a sport, any sport, any activity, no matter what it is, business [00:07:00] athletics, music, anything you need to put in a lot of work and time and effort.

[00:07:04] And even though I was a young kid, I was still putting in a lot of time. And so I think just from when four to 14, you had 10 years of hard work and it just becomes innate in you. And so for me, I've just always been extremely hard working. Now on top of that, I think it also taught me to take risks because motorcross is a very risky sport.

[00:07:22] And every single time you get on the bike, you essentially risk your life. And as we record this podcast, I literally have a broken leg from racing. So I'm actually, spoiler I'm back on a bike again, and I'm racing and I just broke my leg like last weekend racing. And it's a dangerous sport, but it's taught me to take risks.

[00:07:40] And I think that helps me be an entrepreneur. It helps me be an investor, et cetera, because when you've taken risks to risk your life, risking a little bit of money here and there is, it seems relatively trivial at that point. When you're talking about life and money. And then the third thing, is it's really taught me at a very young age on how to work with mentorship.

[00:07:59] [00:08:00] And what I mean by that is my dad was my mentor. When I was racing motorcross, he built all my bikes. He was the one that helped me get to the races and all that. My dad was a single dad with just me and my brother. And at the time I had more of the talent than my brother did, so my brother wasn't racing, but he came with us.

[00:08:17] And so me and my dad and my brother were growing all these races. And a lot of times what separated me from a lot of the other kids, my age, where I was hitting all these big jumps that most people wouldn't hit my age. And that came down to talking to my dad, we'd walk the track together and I'd say, Hey, dad, will my bike make this jump?

[00:08:35] And he had a good idea because he built it. So he knew what it was capable of. And basically if he told me I could do it, I would do it. So that has led to business because he was my mentor. And I had to put a lot of trust in him. He guided me and he told me what I could and couldn't do and how to do certain things.

[00:08:51] And so when it came time to find a mentor in business or investing or anything. I already had a ton of experience with a mentor and learn how it worked with my [00:09:00] dad. And so that's been super impactful in business investing in everything else I've done.

[00:09:04] Hala Taha: Oh my gosh. I love hearing this because I think people fail to realize that your experiences are meaningful, whether they pan out to something wonderful or not, just you having that experience of being a pro motor cross racer at such a young age has given you skills that you can now apply in totally different industries in totally different ways, but it's all stuff that you carry with you and makes you who you are.

[00:09:27] And I really believe that everybody tuning in right now get as many experiences as you can, especially if you're on the younger side, even if they won't pan out to anything in the end, because you carry those little skills with you everywhere, and then you can apply them in different ways.

[00:09:41] Robert Leonard: There's a saying, and I'm going paraphrase it because I don't remember it specifically, but there's something along the lines that says you can't connect the dots looking forward. You can only do it looking back. And that's exactly the case when I was racing motocross and I was done racing, I was absolutely devastated.

[00:09:54] I love that more than anything. Hence why I'm back on a bike today. But at the time I was just absolutely [00:10:00] devastated. I had no idea what my future was going to look like, but now 10 years later, I can look back and I can connect the dots on how all these things connected and how it's really helped me today.

[00:10:08] And you don't necessarily need to know how it's going to help you in the future. Just have faith and understanding that if you put in the work, it's going to help in the future some way.

[00:10:16] Hala Taha: 100%, 100%. So let's talk about your college experience. I'm going to start with a story that I remember and correct me if I'm wrong, but something along the lines of you were in biology class.

[00:10:27] And instead of paying attention, you are studying 10-K's and figuring out what your next investments were going to be. So let's move into stock investments and what we should be looking for when you are in class, not paying attention. What were you looking for in those 10-K's?

[00:10:43] Robert Leonard: Yeah. I love that story and I haven't told that story for a while, but it is one of my favorites because when I went into college, like I said, nobody in my family had ever gone.

[00:10:52] I'm the first one to go to school in my family. So I didn't really have much help or guidance to how to pick schools or how to pick a major or anything like that. And it's not because they didn't want [00:11:00] to help. They just didn't have the experience.

[00:11:02] And so I was just there to figure out things on my own and ended up picking a pretty good program. But as part of the program, what I really didn't like, and what I didn't focus on enough was the curriculum. And as part of that curriculum, you had to take three science classes. And so I'm a finance major and, or an accounting major.

[00:11:18] And I'm being forced to study chemistry and biology and physics and all of these classes. And it just made no sense. And so I was a good student, but I would use the, they give you these dollars to print things in your lab at school. And so I'd use all those dollars to print these huge 10-K's. And I would just sit in the back of the biology class and this big auditorium.

[00:11:38] And I would read my 10-K's and I've been caught a few times and because maybe I'd be reading it and I couldn't put it away. And my teacher would come by. And the number of times I've been thrown away, I can't even count. And so I was just really busy studying what I was passionate about, what I felt was going to help me in my future.

[00:11:55] And in terms of what I'm looking for on the 10-K's back then, I didn't really know what I [00:12:00] was doing. I was just getting started. I really just, everybody said, you need to read 10K's to be a successful investor. So I was just reading them as I could. Now, today it's a little bit different understanding as to what we're looking for in 10-K's.

[00:12:10] And for people who don't know, a 10-K is just an annual report, basically that companies put out in are required to file with the SEC in those reports, the document, the things that I'm looking for the most. Is the little hidden nuggets of information that you can't get from just financial statements.

[00:12:28] Because a lot of times people look at 10-K for financial information for their financial statements. And that is valuable, but there's so many other ways you can just log onto Morningstar or we have a tool called TIP Finance. You can get all the financial statements that way. What I'm really looking for is the footnotes or these little stories or details in this report that talk about how the business is doing that the numbers don't show.

[00:12:50] So that's really the biggest thing that I'm looking for.

[00:12:53] Hala Taha: That's super interesting. And so what else do you look for in a stock? Like how do you know when a
[00:13:00] stock is a good investment? And then the other thing I want to ask is I know that in the beginning you were looking at quantitative metrics only, and then you realize that the key was really looking at the qualitative metrics.

[00:13:12] And I personally did very well with stocks. A couple of years ago, I pulled out all my money, but I had 50% gains and I almost never looked at the numbers. It was always qualitative stuff. So I'd love for you to talk to us about that. And then talk to us first though. How do you pick a stock? What are the things you look for?

[00:13:31] Robert Leonard: There are a million different things you could look for when you're looking at a stock and trying to find out whether it's something you want to purchase or not. Really for me, the biggest thing is whether you can understand it or not. And I think that's overlooked. We could do a whole hour long podcast about analyzing financial statements, analyzing key ratios, analyzing whether the business has a moat, the management team, the valuation, a million different really nitty-gritty things.

[00:13:57] But I think at a high level, the biggest thing is just [00:14:00] really understanding what you're buying. And that's typically the biggest advice that I give is I don't really care what you buy. I don't care if you buy crypto or stocks or real estate or sports cards or, whatever it is. I don't really care.

[00:14:11] As long as you aren't understand what I don't like seeing people do is just buy something because other people are buying it. I think that's a, you're not investing in that case. And so that's the biggest thing to find a company you like. There's an author named Peter Lynch, very successful money manager at fidelity.

[00:14:27] He managed a fund called the Magellan Fund. And at the time, it was one of the best performing mutual funds in history. And he wrote this book called One Up on Wall Street. And in that book, basically the premise is that he's telling you that individual investors are able to beat money managers and professional hedge funds and things of that nature.

[00:14:46] And they actually have a one-up on wall street because they can see these products on an everyday basis using what you already know to buy companies. And so in that example if you were an early iPhone user, maybe you knew that iPhone's

[00:15:00] product was great and you could maybe invest in the stock because you knew that they had great products and services.

[00:15:05] So these are the types of things that I'm looking for. Now, you mentioned the quantitative and qualitative piece. That's been a big change in my investing style because as I mentioned, I was really into studying Warren Buffett. And when you start studying him, he's a value investor in a lot of value investing comes down to the numbers, especially back when his mentor Benjamin Graham was bringing value, investing in deep value, investing to the forefront of the investing community.

[00:15:34] And so I had this misconception that if you ran a financial model and the financial model said that the company was stock, that you could just excuse me, that it was cheap and you could just buy it.

[00:15:43] And it would be a great investment. And that's not how it works out because there's a lot of different inputs that go into that financial model. And if your inputs are wrong, then your evaluation is going to be wrong. And just because you have certain inputs doesn't mean that the market is going to agree with you.

[00:15:59] And [00:16:00] so that's what I was doing is I was being too optimistic with my inputs. And so all my financial models were saying that these stocks were undervalued on a quantitative basis. What I didn't realize was that they had no future business prospects. They ran family industries, they had horrible products and services customers didn't like.

[00:16:15] All these different things that led to no future for the business. And so there are ways that you could potentially make money. Basically, I was making decisions based only on the numbers. And what I realized is that there's a lot more to a business and arguably even more value in a business from things that you can't quantify, like the management team, the CEO, how good are the products and services?

[00:16:38] How has the culture, how happy are the employees? What is the industry in the future? Look take blockbuster and Netflix for an example, I don't know this to be a fact, but let's just say the blockbuster numbers were really good. You might be in entice to invest in them based on a quantitative approach.

[00:16:56] But if you looked out into the future qualitatively, you could say Netflix might [00:17:00] completely disrupt them and they have no future. And in that case, that might not be something you want to invest in. So for me, a big transition was you still need the quantitative approach. You still need to do evaluations and you still need to look at the financials.

[00:17:12] You can't necessarily buy a company just because they have good products. But that is a massive piece of it and understanding, how those two come together to really develop a financial and investment thesis.

[00:17:23] Hala Taha: I think that's brilliant. I think that's something that we haven't heard before on this podcast. I feel like we're always told to look the numbers, look at the profitability, all of that kind of stuff and the past growth.

[00:17:35] And I think it's really great that you're saying you got to like the product yourself, know what you're buying and think about other external factors that might not be an a 10-K or it might not be, on Morningstar there for you to just see blindly. So I think those are really great points.

[00:17:51] Let's talk about Warren Buffet. So I know you studied him for many years. He's one of your idols, but it turns out you're not. Take any old advice from Warren and go [00:18:00] pour your money into his stock picks. So talk to us about how to take advice and also some of your biggest lessons from Warren Buffet.

[00:18:09] Robert Leonard: One of the biggest things people get wrong.

[00:18:11] And actually a podcast episode that went out this week for me is why you shouldn't just copy money managers and Buffett is technically a money manager. And so one of the biggest things that people get wrong about Buffet or any professional money manager, and this is something that I did. So I'm speaking from experience is trying to look for them for stock pick ideas.

[00:18:28] So just trying to find out what they're holding and they're required to file it quarterly throughout 13 F. And so you can see exactly what they're holding. And so a lot of people just look for what they're holding and try and copy them or buy that. And I think that's really, some people have done okay that way.

[00:18:42] There are a couple of guys like this guy named and another guy named Kai Spear. They've done really well following this type of strategy, but for most people that's not going to work for a various different reasons. Rather the right way to think about it, in my opinion is not to copy them, but rather to [00:19:00] learn from their principles and think how they think learn how they think and apply that to your life.

[00:19:07] So let's take, for example, Warren Buffett, one of his biggest principles is that in order for him to invest in something, it must be within his circle of competence. And so how can you copy Warren Buffet as an investor? If he has a different circle of competence than you, right? If you're going to follow this principle, Hala, you have a different circle of competence than I do.

[00:19:26] I have a different circle of competence than Buffet. None of our circles are better than one another, but we just understand things differently. And so maybe if you're a software guy, you can probably invest in tech companies because you understand it. Whereas Buffet for a very long time avoided all tech because he didn't understand.

[00:19:43] And so to just blindly copy somebody, this goes back to what I mentioned before is you really have to understand what you're buying. And so for me, that's just an example of how you need to take his principles and apply them to your life, rather than just copying what he's doing. I don't understand biotech.

[00:19:59] I don't [00:20:00] understand energy, these types of things. So I've never made any investments in those industries or sectors. There's a lot of people that make a lot of money by investing in those areas. But for me, I just know it's a hard rule for me. If I don't understand it, I don't invest in it. And so I just avoid it.

[00:20:15] And I think those are some of the biggest things that I've learned. Following Buffet.

[00:20:20] Hala Taha: Oh my gosh. I love that. So let's take it back to college again, at a certain point, your parents basically said, Hey, you're making money. You got to pay rent. And from my understanding that you didn't like that idea, you thought if I'm going to pay something, I want to own my own place.

[00:20:36] I don't want to pay you rent. So talk to us about how you first started in real estate.

[00:20:42] Robert Leonard: That is exactly right. So when I was 18, I was going into college. My dad sat me down. He said, Hey, you're going to study finance. You're going to come out. I know you're a hard worker. You're probably going to get a pretty good career.

[00:20:51] You're probably gonna have a decent salary. So it's not, I don't really like the idea of you making a good salary and living under my roof for free. That just doesn't really make [00:21:00] sense to me. And so this is what my dad was saying to me. And, as an 18 year old kid, I was like, yeah, I get it.

[00:21:05] I don't like it, but I get it. understand. And so I said to him, and I said to my friends and some other family members, I said, you know what, I'm going to buy a house as soon as I graduate so that I can move into their. Then I don't have to pay any rent. I can just pay my own mortgage and I can own it.

[00:21:19] And my dad and my family is very encouraging of me of course, but they thought I was crazy. And they said that wasn't gonna be possible. My friends also the same thing, because none of them have ever owned houses or made any investments. My dad didn't buy his first house until he was in his late thirties, early forties.

[00:21:35] And so it just didn't seem possible to them. Sure enough, if you tell me I can't do something, that's going to light a fire under me even more. And so I worked really hard throughout college to get jobs, save as much money as I could understand the process, etcetera, everything that goes into buying a house.

[00:21:52] And I bought my first house when I was a senior in college. So before I walked at my college graduation, I bought my first house [00:22:00] and I didn't do it as a real estate investment. It was, I wasn't trying to be an investor or anything. I was just doing it simply because I needed a place to live and I didn't want to pay my dad rent.

[00:22:09] Now I did eventually want to become a real estate investor, but that was not the goal at this property. My plan was, I felt like I was a good stock investor. I felt like I understood it well. So I said, I'm going to make all my money. I'm going to build my wealth through the stock market. And then once I'm done with that and I've built my wealth, then I'll put it into real estate because I assumed you needed to be a multimillionaire to buy real estate.

[00:22:32] And so I got into this house and it was a two bedroom house and I lived there for a month or one to three months. And I realized that I never even opened the door for the second bedroom that was there. It was just sitting empty. And I said I could probably do something about this. And so I ended up renting out that bedroom.

[00:22:49] And so essentially I just had a roommate and my total mortgage was like $1,100. And this person was paying me between 700 and $750 a month. So now I'm living for [00:23:00] 300 to $500 a month, somewhere in that range. And I said, wow, this is pretty cool. And I said, there's no way that I'm the first person that's ever thought of this.

[00:23:09] And so I got on the internet and I found out that's actually an investing strategy called House Hacking. And it led me to this resource called BiggerPockets and on BiggerPockets there's thousands and thousands of other people that were just like me, who were investing in real estate.

[00:23:23] They didn't have any special skills. They weren't wealthy yet, but they were making it happen. And so when I just devoured everything I could, and I realized that these people were no different than me that brought down every limiting belief I had about real estate realized I was actually already a real estate investor.

[00:23:38] And then from there, I just have had a massive interest in real estate and have continued to scale.

[00:23:43] Hala Taha: That's so cool. It's really unique to hear that you were 18 when you bought your first house and then you started renting it out and you started to live for free. I had somebody on my podcast early on.

[00:23:54] I think it was like episode number 11. Her name was Dan Zhu. And she also did this. She would [00:24:00] buy a house and then live on the couch and rent out all the rooms. And she told me that she believes that if you live in the house that you own, and you're the only one who lives in it, that it's not an investment.

[00:24:12] Would you agree or disagree?

[00:24:14] Robert Leonard: I would agree. I think if we're going to get down to technical definitions, if you are the only one that lives in the house and is not producing any cashflow for you, I would say it's not an investment.

[00:24:22] Hala Taha: So interesting. So talk to us about real estate. What is the best way for somebody to get started and how much money do you actually need to get started?

[00:24:31] Most of my listeners are probably 25 to 35. Let's say maybe there's some people, there's lots of people in their forties and fifties. So I love all of my listeners, but let's talk about the majority 25 to 35 year olds who are tuning in right now. Is there a certain amount of money or certain amount of ratio of money that you should have?

[00:24:48] Should you have saving saved? Like when do you think we're ready to buy something? Because a lot of us, I think are renting right now, even though we're sitting on cash.

[00:24:57] Robert Leonard: I think hands down the best strategy is [00:25:00] House Hacking, which is what we just talked about. I think for almost anybody, but especially people in that age group that you just mentioned, that is number one.

[00:25:08] The first place I would start is house hacking. Now, when you should do that is different for everybody and how much money you need. We can talk about those numbers. It's going to depend where you live in the country. There's a lot of different variables, but with house hacking. I house hacked my first property.

[00:25:21] I only did $10,000. We can get creative, you can use things called seller credits, which reduce the amount of cash that you need to buy a property. So there are a bunch of different ways that you can get into a house hack, but it's hands down the best way that people should get started. And it can have a massive impact on the rest of your life.

[00:25:39] If you start house hacking when you're young.

[00:25:41] Hala Taha: Yeah. I think if you're single and you don't have a family, house hacking is definitely the way to go. Could you explain what seller credits are? It's something I've never heard of before.

[00:25:49] Robert Leonard: Yeah, absolutely. So I sell our credit is basically in the simplest term is when the seller, when you buy a house, the seller gives you cash back at closing.

[00:25:58] So essentially let's just say somebody makes a [00:26:00] hundred thousand dollar profit on selling the house. If you have negotiated a seller credit with them, they'd take money out of that a hundred thousand dollars and give it to you at closing. And it reduces their profit. Let's just say to $90,000 or something along those lines.

[00:26:13] And now you have that money that you can apply towards your closing costs or down payment, etcetera. And so it's a creative way for you to be able to reduce how much money you need to close. Because now you're getting some money from them to actually pay down what you're required to bring to the table to close.

[00:26:28] Now, somebody is listening and hearing this for the first time. They're like why would somebody give you some of their profits that you can buy their house, right? That doesn't make any sense. So in a very competitive market like today, if you have somebody that offers, I'm just going to use round numbers here, but let's just say, you're somebody selling a house for a hundred thousand dollars.

[00:26:45] If you offer a hundred thousand dollars and somebody else also offers a hundred thousand, but you want a $10,000 seller credit, they're going to net $90,000 from you, but they're going to get a hundred thousand from the other person. So clearly it makes more sense to go with the other person, however, What you [00:27:00] can do is you could technically offer 110,000 with a $10,000 seller credit.

[00:27:05] Now their net gain is still a hundred from both people, but you still get $10,000 towards your closing costs. And now it reduces the amount of cash that you need to close. So that's what I've always done is I've always offered a little bit more than asking so that I can get some cash back in that case.

[00:27:20] You're essentially just financing the closing costs, but when you don't have a lot of money, I personally believe that's okay. And I think it's a great way to reduce the amount of cash you need to get into a deal. It's a little bit creative. It's not that difficult though. If you start to understand it and I've used it on every single real estate deal, I've had my house hacks and my other traditional ones.

[00:27:41] Hala Taha: This episode of yap is brought to you by Gusto. If you're a small business owner, you got to listen up, running a business is super hard. We all know that there's endless to do lists employees to take care of and your ever present bottom line. So first of all, give yourself a pat on the back for staying on top of it.

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[00:30:53] Oh my gosh. That's super smart. So we're in a sharing economy, and millennials tend to like to [00:31:00] rent things. They don't want to own their car. They want to take Uber. And it's part of our culture too.

[00:31:06] Be in this rent mode. And I feel like that's why there's a lot of 30 year olds right now who don't own their own house. They're still renting, even though they've got cash in the bank, that's sitting there and they could definitely be owning a house. I'm the, I'm one of those people I could own a house right now.

[00:31:20] I'm renting and it's because I'm scared to be locked down somewhere. And it's just to your point, I don't feel like it's an investment if I'm living in there. So I just don't see the point. So can you talk to us about your personal opinion when it comes to the pros and cons of renting versus buying?

[00:31:37] And if you think there are any pros to renting?

[00:31:40] Robert Leonard: Yeah. There are pros and cons to both. And I think if you really just look at the numbers, there's a point in which up to it's roughly around five to seven years, somewhere in that ballpark that renting financially makes more sense if you invest all the money.

[00:31:54] So let's just say you had $20,000 to put down on a down payment for house. Instead of putting that [00:32:00] down payment on a house you rented and you put that $20,000 into the market. Technically from a financial perspective, I believe the models show anywhere from five to seven years is how long renting is better.

[00:32:11] But then anything past that usually owning is better. If you've stayed at the property for that amount of time. Now that's purely quantitative. And we learned from stock investing business and finance and investing is not just quantitative. There's an entire field called behavioral economics. And so behavior for humans and psychology is massive when it comes to these things.

[00:32:31] And so you can't just look at it from a numbers perspective. You have to look at it psychologically. The reality, in my opinion, is that most people, if they don't buy a house and they have that $20,000, they're not going to invest it. Or maybe they're not going to invest all of it. And if they don't invest all of it, those numbers drastically change.

[00:32:47] Maybe it only makes sense to rent for three years instead of, five to seven years. I think that the psychological piece is very hard to get those people, to actually invest all of that money that they would have put into a down payment. So that skews, which is better and which [00:33:00] is worse now also, there's a lot more headaches with owning a house.

[00:33:04] You have to handle all the repairs, maintenance, taxes, getting a mortgage, etcetera. There's a lot of things that go into it. Whereas with a renter you're in out pretty much whenever you want, you don't have to worry about fixing things, etcetera. You're pretty free. Now you can exit. I've never rented.

[00:33:21] I've only ever owned homes, but I've been able to get out of all the properties I wanted. Now it's not a guarantee, right? If you try to get out of a property in 2007, 2008, 2009, you're probably going to be stuck with it. But for the last decade, 12 years, you've pretty much been able to get out of a house that you own just as easy as you could have rental.

[00:33:38] And so it really depends also if you're going to be moving a lot, it depends. If you, if that's gonna be the case, then you probably don't want to own because you're just gonna up and leave, for sure. And so you really just have to think about your lifestyle and if you're going to live in a city, it probably doesn't make sense to own.

[00:33:54] You're probably better off just renting, but if you're more in the suburbs, maybe you consider owning. It depends. If you have, you need a [00:34:00] yard for a dog and all these different things. So there's a lot of things that are psychological or just, real human life that you need to consider that are not just numbers.

[00:34:08] Hala Taha: I think that what you're saying is super smart. And I think I'm doing the worst thing sitting on a whole bunch of cash in the bank and not investing in anything. So I'm going to toss you this question. If somebody I'm going to give a number that a lot of people listening is more realistic for them.

[00:34:25] So let's say somebody has $20,000 in the bank. What would you tell them to do with it?

[00:34:31] Robert Leonard: House Hack without a doubt, without hesitation, I would house hack. Now, one of the biggest pros for renting that people have, and I'm guessing you probably have a similar experience as to why you like renting is just the flexibility, right?

[00:34:44] Being able to go wherever you want. Now with house hacking, you only have to live there for a year. Typically your lease is going to be a year anyway, so you only have to live in the house act for a year, and then you're not going to sell the property because you want it to be an investment, but you could go live [00:35:00] somewhere else.

[00:35:00] You could go rent at that point. You can buy something else if you have some money, etcetera. So when you house hack, you're not locked into that property for 5, 10, 20 years. Like you don't have to live there that long. You can own it for that long. You don't have to live there. And so you said $20,000 and I'll walk through my most recent house hack as an example.

[00:35:19] So this is my third house hack. It was a $400,000 house and I needed about $23,000 to close on the property. However, I negotiated a $10,000 seller credit. So now to close on a $400,000 asset, I only needed 12,000, $13,000. Okay. So now if you had 20,000, you put 13 into it, you saved the other seven for reserves so that you're not fully the pleading your cash.

[00:35:46] Now you have $7,000 in case you need to fix anything, whatever the case is. Okay. And so my mortgage is $2,000 a month for round numbers and I rent out it's a duplex. So there's two units. I live in one of the units. It's very nice. [00:36:00] It's not super fancy, but it's nice. Two bedrooms.

[00:36:02] It has a basement. It's three stories. It's pretty nice. And I don't feel like I'm living in like an apartment or anything. I feel like I have my own space and the unit next to me pays about $1,400 a month in rent. So now my portion of this is only $600 a month to live here. And that's cheaper than you could rent anything in this area especially my, like how nice my place is.

[00:36:23] And if you think about it the tenant is living in the same property. I am same type of unit and they're paying 1400 and they don't own it. I'm paying 600 and I do own it. Now it gets even better. So I could live here as long as I want. I own the property, I could stay for as long as I want, but if I want to leave after a year.

[00:36:41] No problem. I move out after a year. So because of the way the financing works, you have to be there at least a year, but after a year, you can leave, go wherever you are. So let's say I leave after a year, I rent out my unit. I think market rents, honestly right now for this unit is probably closer to 1600.

[00:36:56] So let's just say I get both units to 1600. Now we're at [00:37:00] $3,200 a month in income from this property. Remember that? I said my mortgage is only 2000. So now I'm profiting $1,200 a month. All I had to do was live there for a year and now I have cashflow every single month coming in for $1,200. Now, either I go and I house hack again, if I do it a second time.

[00:37:18] Now, when I'm done that in a year, I have $2,400 in cashflow coming in, or if I'm done house hacking, I could go rent. Let's just say my rent is $1,400. Now you take the 1200 in cash flow from your first house hack and now you apply it towards your rent. And now your rent is really only like $200 and you can live wherever.

[00:37:35] And the caveat here is that first year, $1,200 times 12, roughly $14,000. I had to put, remember I said 12 to $13,000 into the property. So in one year I'm entirely getting my entire down payment back just in profit. And I still own a $400,000 asset for however long I own it and that's going to appreciate, and then when I sell it, I have all the equity that I gained in the property as well.

[00:37:58] So for me, [00:38:00] house hacking, is absolute cheat code to building wealth, especially for somebody, if you can do it young.

[00:38:05] Hala Taha: Oh my gosh. I might call this episode House Hacking. That was so genius. I feel so motivated. I have the idea of buying a family home where the bottom level is my studio and I have in-person interviews one apartment I rent out and I live on the top apartment.

[00:38:21] That is like my dream. And now you've validated that I should probably go figure that out.

[00:38:26] Robert Leonard: Yeah. My only recommendation is I'd probably go side to side rather than up and down. If you can. You live in, I think you said you live in an apartment, so you're probably used to the up and down type thing.

[00:38:34] I personally like side to side better just cause you don't have anybody above you or below you like making noise and things like that, but yeah, totally. That would be absolutely awesome. And you could do it in so many different ways.

[00:38:43] Hala Taha: Oh my gosh. It's genius. So let's dig into real estate a little bit more.

[00:38:48] I want to know what is a good real estate investment versus a bad one. Like when you're on Zillow and you're searching around, like what should be a red, what are your red flags? Let's there.

[00:38:58] Robert Leonard: So [00:39:00] red flags are, it's the first thing I do is I look at the one. It depends on your strategy, right? If you're, I can't say broadly, because if you're a flipper, your criteria is going to be different.

[00:39:09] If you're buying a rental, it's going to be something different. If you're buying a house hack, it's something different. So for me, I don't flip. I personally buy long-term rentals and I, house sack. So for a house hack, basically what I do is you calculate what your mortgage payment's going to be, calculate what that property could bring in for rent for any of the extra credit space that you're going to rent out.

[00:39:31] And you find out what your portion is going to be. Now, if that's acceptable to you, then great, you can move forward. If it's not, then you're probably not going to be interested in it. Now, when we get into a more traditional rental, you can say a regular rental property that you would think of when you hear of rental.

[00:39:48] There's really two things that I focus on and that is the monthly cashflow per door. So how much profit per door per month is this property making? And the second thing is the cash [00:40:00] on cash return. So that is based on the amount of money that I put on the property. How much cash am I generating per year on that?

[00:40:07] And so the reason that those two metrics are important is because you could have a property that cash flows $500 a month. That's great, right on the surface. My threshold is roughly $250 a month per door. So if you have something that's making $500 a month per door, that might sound great. But what if you put in a million dollars to get $500 per month, that's probably not great.

[00:40:30] Whereas you have something that makes $250 a month, but you only put 10 grand into it. I mean that, you know those. So on the surface, the 500 seems better than the two 50, but when you look at cash on cash, the cash on cash for $250 a month is much better. And so you can get as detailed or as nitty gritty on these return metrics as you want.

[00:40:49] There are some people that have super complex financial models to do this, but for me, I boil it down to those two numbers, because if you hit, both of those are metrics, whatever you set your benchmarks to [00:41:00] be mine personally is $250 a month. And I like 15% or more cash on cash per year. And as long as you hit those two benchmarks, what I've found is everything else takes care of itself.

[00:41:10] And so I simplify it, focus on those two things and to quickly get to that point, this is not a hard and fast rule. It varies depending on where you live in the country and there's some caveats to it. But for the most part, how you can do this analysis really quick is what we call the 1% rule. And what the 1% rule is you take the monthly rent that the property will bring in and you divide that by the purchase price.

[00:41:32] If it's more than 1%, you probably have a good deal. If it's less than 1%, you might not have a good deal. If it's close, maybe. If it's way below 1%, you probably don't have a deal. So when you're looking at 50 different properties to analyze, rather than doing an analysis on all of them quickly to a 1% rule, knock out the ones that aren't even close, finalize the ones that are close, do a full analysis, and then you can decide.

[00:41:58] Hala Taha: That is extremely [00:42:00] brilliant. So let's go back to investing a bit because actually your advice is to, from my understanding to really evaluate, know what you're buying, everything like that. A lot of investors that come on the show, when I ask them for stock advice, they're quick to say just throw your money in S&P 500 index fund.

[00:42:21] And that's your best bet. Don't. Even if you're not in finance, don't even worry about studying stocks and picking your own stocks. Just trust the market, do the S&P 500 index. So what are your thoughts on index funds? Do you have one that you like the best? Do you feel like you're better off picking the stocks that you know, and love and trust?

[00:42:40] Like we were talking about before?

[00:42:41] Robert Leonard: Great question. And it is something that's very commonly talked about and I think most people. That say that I th I do think the S&P 500 is great. I think most people should do that. And if you really want to have the best returns, you will, 95% through random number, but somewhere between 90 and a hundred percent of people will probably do better by just [00:43:00] buying the S&P 500 fund and never buying individual stocks.

[00:43:03] Now, the problem with that is psychology. People are psychological animals, and we're going to hear these people that are making money from, buying these individual stocks or make it sound like they're making money from these individual stocks, and they're going to want to get involved.

[00:43:17] And so whether you should have a hundred percent of your portfolio in S&P 500 or individual stocks is really up to you. But I have this framework that I've created that helps people deal with FOMO, which is what I just mentioned. It's just the fear of missing out. And so it's funny, but I relate it to an itch, right?

[00:43:36] Let's just say your arm is itchy. If your arm is itchy and you don't do anything about it, it just continues to get itchier and itchier, right? And then eventually it gets so itchy that you have to scratch it. And you just have no choice. You have to scratch it. And FOMO works the exact same way.

[00:43:50] You might be able to, you hear about Tesla and you hear how all these people are making a ton of money. And so you have that itch, right? You want to invest, but you tell yourself, you shouldn't okay. Then [00:44:00] Bitcoin comes around, you missed it the first time in 2017. So that, that itch passes by the edge keeps getting worse and worse, right?

[00:44:06] 2020 comes around and you miss Bitcoin again. Okay. Now three inches or three opportunities have passed and now you're really itchy. Now this next opportunity comes around, say, it's Dogecoin or something else. Now you really have a lot of pent up fear of missing out because you didn't participate in all these other opportunities.

[00:44:24] And so you go pretty much all in on it. You put way more money in than you should, because you're like, I need to make up for all these opportunities that I missed. And then you lose a ton of money. Typically, almost everybody loses money on those types of situations. My framework is different and I recommend to people that you actually do participate in all of these events.

[00:44:43] So that first time that you have a little itch, scratch it, put a little bit of money into it. You don't have, don't go all in, just put a little bit of money. And so what happens is you participate in all these events. You probably lose a little bit of money, but at least in total losing a little bit of money along the way should add up to less than if you just wait and [00:45:00] pile in with all your money.

[00:45:01] And to eventually once you've done this 2, 3, 4 times, you realize you're like, yeah, this just doesn't work out. Like I'm not going to keep doing this. Clearly it doesn't work. You learn from firsthand experience and then you never deal with FOMO again. And it essentially cures you of dealing with FOMO.

[00:45:19] So in terms of individual stocks, S&P. That's how I approach it. I put, I think most people should be in the S&P 500, but if you have a little bit of FOMO from individual stocks, put a little bit of money into it, don't put your life savings and go from there. Follow that framework that I just went through.

[00:45:35] Hala Taha: I think that is excellent advice. And speaking of FOMO, I keep hearing about NFTs and I keep wondering oh my gosh, am I not moving quick enough? I really don't have the time to understand it to your point. I don't want to invest in something I don't understand. And then I hear about sports cards investing, and I hear about starting my own coin.

[00:45:56] You don't know how many people have come up to me? I don't even remember what it's [00:46:00] called, but they're like, Hala, you need your influencer coin or whatever it's called. Like you have to do one, and it's just so overwhelming. So I want to know, are you personally investing in some of these speculative things like cryptocurrency, NFT is, are you personally investing in them and do you have any advice in terms of how we can evaluate those types of things?

[00:46:19] Robert Leonard: So for NFTs sport cards, things along that line, I'm not involved in them at all. I'm not saying I never would be, but right now I'm not, I do have a small position in Bitcoin. So you could classify that as, one of the, in that category, but I've held Bitcoin for a long time and I don't necessarily see it as speculative.

[00:46:37] I don't have a huge position. I just have a little bit of money there. And because of that FOMO framework that we just worked towards, that's why I put a little bit of money into Bitcoin, but to solve this issue of whether you should be involved in sports cards or NFTs and all these other things, you could again go through that FOMO framework and say, am I going to just put a little bit money into it if you want, if you feel [00:47:00] like you're going to regret not being involved, but a little bit of money into each one and just see what happens, don't go all in on them. Maybe just put a little bit of money that you're okay. Losing. I understand you're probably going to lose it and go from there. And so one of the things I often do is I sit down and I asked myself.

[00:47:14] Would I be more upset that I didn't put money into this and I missed out on the upside or would I be more upset that I lost this money? And from there you can pretty much decide what to do. If you're not going to be upset about losing $500, then put the $500 in and you'll know what yeah, I'm happy.

[00:47:31] I participated in the upside. Great. If I didn't, I'm less mad about that, that I lost it. And so that's how I think about it now. I actually just had Tom Bilyeu on my podcast, founder of Quest Nutrition. He's huge in the NFT space. And we talked a lot about NFTs. I get it, but I don't and it's certainly not within my circle of competency.

[00:47:51] So I just avoid it at pretty much all costs. I have cured myself a FOMO, so I don't have FOMO of NFTs and sports cards and things of that nature. [00:48:00] And so I just, I personally don't participate. I have no interest in it. I don't understand it. And it may be great in the future, but I just, it's not for me right now.

[00:48:09] Hala Taha: I think your FOMO framework is really good advice and I hope everybody takes heat. Cause I think that's a great way to get experience. See if you like it, see if it's doing anything for you in terms of the returns. And then if you lose that little bit of money who cares, you can make money in other ways that we just talked about.

[00:48:26] So as we wind down this interview, I know we both interviewed Michael Michalowicz and he is the author of Profit First, which happens to be one of your favorite books. So talk to us about some of your biggest lessons that you learned from Michael.

[00:48:40] Robert Leonard: Yeah, so my brother actually just started a landscaping company and I bought him profit first and give it to him as a business.

[00:48:46] As first little business owner, I think Michael has taught so many great things. He has a lot of different books. He has the pumpkin plan, the toilet paper entrepreneur. He has a bunch of great books and. There's so many different things that you can learn from him. But for me, [00:49:00] Profit First is one of my favorites.

[00:49:01] I'm an accounting guy, finance guy background. So I just love that he has this really defined framework for entrepreneurs to build out their financial models or financial plan within their business to many business owners, side hustlers, whatever it may be, have no idea where their money's going. They don't know if they're profitable, things like that.

[00:49:21] And so I think it's really important. He teaches just to really know your numbers and really understand what's going on within your business, know where all your money's going, etcetera. And probably my favorite thing is that he focuses on profit in that book. He talks about how there's these people who brag about how much revenue they make, but really what matters is the profit?

[00:49:43] Why does it matter if you make $10 million in revenue, but if you only take home $10,000, what if somebody made 20,000 in revenue, but made 15,000 in profit, they took home more money than you, right? So why does the revenue matter? It's because it's one of those things that people can easily brag about and it's this bragging [00:50:00] or, this notion that you're doing well.

[00:50:02] And so he has this idea where you really need to focus on profits. And for me, I think that's really important, especially in today's day and age, being a stock investor, being a real estate investor, too, but specifically in the stock market, we see a lot of companies that are not profitable, getting massive valuations, some of them with questionable business models to ever get to profitability.

[00:50:21] And so just this idea that's really grounded in really businesses meant to make profit. And if it's not making a profit, do you really have a business? And so that's the biggest thing that I really like from his book.

[00:50:33] Hala Taha: I totally agree. Even me running a business right now, when I tell people like, oh, my first year I made $2 million in revenue.

[00:50:40] Everyone thinks I'm so rich. And I'm like, no, that's not the profit. So to your point profitability is a big deal. And sometimes I think about like how much money I was making in my corporate job. And I'm making the same, I'm making more money now as an entrepreneur, but I think about it and I'm like, wow, I have all this headache.

[00:50:57] I have all this overhead of all these employees to pay for [00:51:00] all these processes to make. And I'm pretty much making the same as I was working for somebody else with a lot less time over time, it will be worth it. But it's so true. Like it's it's not just about revenue. It's about the profit at the end of the day.

[00:51:13] Robert Leonard: Exactly. It's so important. And I think it's lost in today's world with unicorn valuations and things like. I personally believe we need to focus on profits in all biz, all avenues of business. And so I just, I really liked that takeaway from the book.

[00:51:26] Hala Taha: Okay. So last question I ask all my guests and this is something you can drop your last piece of wisdom. It's what is your secret to profiting in life?

[00:51:35] And I know we've been talking about stocks and investing in money, but it doesn't have to be about money. It can be about profiting in life in any way.

[00:51:43] Robert Leonard: I think that I could cop out of this answer and I could say House Hackingthat is the way, but I'm not going to do that.

[00:51:50] I think because we've talked so much about that. I think it's easy to understand how sack it could be. That answer. I think my answer is fitness and [00:52:00] I, personally am a very active guy. This probably comes from being an athlete and, racing, motorcross, etcetera. But I, personally believe no matter who you are, I think you need to have a component of fitness in your life.

[00:52:11] And now a lot of times people get me confused and think that they have to go out and be an Olympic bodybuilder or, do crazy things like that. And that's not what I mean. I just mean get out and sweat every single day, whatever that means for you. Maybe it's going on a walk, maybe it's lifting weights.

[00:52:25] Maybe it's running. Maybe it's riding a bike, whatever that is. Get out sweat a little bit. Every day, it'll have a massive impact on your life. It'll have a massive impact on your career, your relationships, your business, whatever it is you want to do. I think it is so overlooked and I think it can have a massive impact on whatever you're doing.

[00:52:41] Hala Taha: I could not agree more. Honestly, when people ask me these types of questions, like what is your number thing for self care? I'm like working out, breaking a sweat, getting that heart rate up. When you work out, you're smarter, you think faster, you're more creative, you're more relaxed. You're more confident like it just elevates your whole life.[00:53:00]

[00:53:00] And anybody that I know who doesn't work out is usually has a very limited mindset. I've just noticed that people who don't work out tend to have a very limited mindset. They tend to be more negative. They tend to be less confident. Like it just really helps move your life. I couldn't agree more. I think that's a great one.

[00:53:17] And most people don't say that. So thanks for sharing that.

[00:53:20] So Robert, tell us about your podcast. Where can people go find you? What's the best way to reach out to you?

[00:53:26] Robert Leonard: The best way to reach me a couple of different ways I give. So whatever people like the best, but I host the podcast. We have two different segments on the show.

[00:53:32] One is called Millennial Investing that is tailored towards millennials. We helped teach stock investing and personal finance to millennials. Then we also have another segment on the show. The millennial investing one comes out on Wednesdays, Real Estate 101 comes out on Mondays. And so you walk through all different types about real estate to connect with me personally, you can find me on Instagram or Twitter.

[00:53:53] Username is @therobertleonard on both. And something I'm super excited about is I just launched a [00:54:00] free community where people can learn, it's called investorshadow.com and people can shadow me on my real estate journey and learn every single thing I'm doing in my real estate business for free. So I share all these details.

[00:54:12] Like all the nitty gritty down to, how do you get your lawn mowed for a long distance rental? How do you handle tenants that you potentially live with through a house hack, all these different things that people can't read from books I share by getting them, allowing them to shadow me. So those are the different ways you can connect with me.

[00:54:28] And if anybody has any questions, I'm happy to help.

[00:54:31] Hala Taha: Oh, my gosh. It's so cool. So exciting, Robert, this was such a great interview. I had so much fun. Thank you so much.

[00:54:36] Robert Leonard: Thanks so much for having me.

[00:54:38] Hala Taha: Thanks for listening to Young and Profiting Podcast. If you enjoyed this episode with Robert, be sure to subscribe to this podcast.

[00:54:44] So you never miss an episode. I think this conversation was jam packed with actionable advice that can help you get started in investing. And I hope everybody feels motivated to go out there and build their wealth. Robert says that when he looks at stocks, we need to determine whether we understand them [00:55:00] or not.

[00:55:00] While he looks at quantitative factors, he also emphasizes the importance of qualitative factors. He says that we need to know what we're buying like the product ourselves and check out other external factors that just aren't about the numbers. Some advice Robert holds onto is from Warren Buffet, whatever he invests in must be within his circle of competence.

[00:55:20] I think that's brilliant. Invest in your expertise because naturally have a better pulse on why that company will do well. In the future. I loved learning about Robert's pivot from being a motorcross research with stock investor. He raced for 10 years and when he was 14 years old, he was number two in the world in his age group.

[00:55:38] But when the 2008 stock market crashed racing became very expensive. He couldn't afford it anymore. And a lot of people he cared about were getting hurt by the sport. Instead of having a defeatist attitude, he made a positive pivot in life. He knew he was good at maths. He liked money, so he decided to go into finance.

[00:55:55] And now he's an incredibly successful investor. What I want you to take away from Robert [00:56:00] story is that sometimes our life doesn't go as planned. We try so hard to be in control, but when life throws us curve balls, we have to remember that we have options, and there's just not one path to success.

[00:56:11] If you enjoyed this episode and you want to learn more about making your best money moves, go check out my YAP Live, Take Control of Your Financial Future.

[00:56:20] Guest: I always think of learning these things like eating a pizza. Everybody wants to, everybody loves pizza and I love pizza. It's one of my favorite things in the entire world. And you can't eat the whole thing at once. You have to eat it piece by piece, and that's the only way that you can get through the whole pizza.

[00:56:34] And so I think learning to invest or learning the stock market is the same idea. You have to start with the first piece and you have to eat that and then work around the pizza before you can understand it. And also remember this, that knowledge is like, anything else you're going to compound on it. And if you keep working at it, you're going to start to understand things.

[00:56:52] It's like water dripping on a stone. Eventually it's going to make an impression and if you keep working at it, you can figure it out. Trust [00:57:00] me, I am not the smartest guy in the world. I'm smart in spots, but I'm not the smartest guy in the world. So I've been able to figure some of this out and it's just by doing some work and really paying attention.

[00:57:09] And I really encourage people to do this. And if I can. Everybody could do it.

[00:57:13] Hala Taha: Again. If you liked this episode and want to check out a similar one, go check out my YAP Live, Take Control Of Your Financial Future. Now, as always, I want to end this episode by giving a shout out to one of our recent Apple Podcast, reviewers dropping us in Apple Podcast review is the number one way to thank us here at Young And Profiting Podcast.

[00:57:32] I read all of our reviews and I love to get your feedback. Our latest review is from Carrie Hegi all the way out from Australia. She says amazing host and content. I absolutely love this podcast. It's an incredible host and content. The content is much needed, and I've learned so much from Hala and her amazing guests for anyone that hasn't checked out the episodes yet.

[00:57:53] Please do so and Hala, I just wanted to say that I listened to your podcast every day while drinking my coffee and getting ready for work in the morning. [00:58:00] It's one of the best parts of my day. Thank you so much. And please keep sharing. Wow. All the way from Australia, somebody is listening to my podcasts every single morning.

[00:58:09] I am so grateful that you've made us a part of your morning routine. And I think that anybody who listens to YAP every single day is going to really seriously level up their life fast. If you guys are out there tuning in and you love Young And Profiting Podcasts, go ahead, write us a five star review. It is the best way to thank us.

[00:58:26] All of our reviews and it is so special to me when I hear your feedback and it makes everything worth it. We don't charge, we don't do patreon on, we don't do anything like that. We just ask you guys for your support, drop us an Apple Podcast review. It helps with social proof. It helps its rankings.

[00:58:41] And it's super important for us. The other thing I'd love for you guys to do, if you listen to the end of the show, you have bragging rights, take a screenshot of this app right now, upload it to your Instagram story tag me @yapwithhala, I will reshare it. I will repost it and then let's chop it up in the DMS.

[00:58:59] I love [00:59:00] to connect with my listeners. I love to hear what you guys love about the show, what you guys want to see more of what you guys want to improve. I love getting your feedback. So again, take a screenshot of this app. Show me that you listened to the end of the show, upload it to your Instagram story and tag me @yapwithhala, and I'm going to repost it and reshare it.

[00:59:18] You guys can also find me on LinkedIn, just search for my name. It's Hala Taha. Big thanks to the YAP team as always. This is Hala, signing off.