Most of you are busy professionals, working long hours to create wealth. Joining Tom today is Steve Rozenberg, to help us discover how part-time investing can reap massive benefits for you: it can generate income, provide freedom, and reduce taxes.
Looking for more on Steve Rozenberg?
00:00 – Intro
01:29 – How Is Employment Risky?
03:36 – How Do You Start Part-Time Investing?
09:43 – How Do You Determine When You’re Ready For Part-Time Investing?
13:06 – How Do Your Create A Plan For Multiple Income Streams?
17:55 – Why Do You Need A Mentor?
20:29 – How Does A Narrow Focus Help?
21:56 – How Do You Build A Team For Part-Time Investing?
26:48 – How Do You Start With End?
This is The WealthAbility® Show with Tom Wheelwright. Way more money, way less taxes.
Welcome to the WealthAbility Show, where we're always discovering how to make way more money and pay way less taxes.
Hi, this is Tom Wheelwright, your host, founder and CEO of WealthAbility. So a year ago, unemployment in the U S was right around 10%. Today, it's hovering around 6%. What we've learned, I think, during the pandemic is that being an employee is one of the riskiest ways to make money.
So today we're going to discover how to still be an employee, if we want to be an employee, and invest part-time, so that we can reduce the risk of employment. With me today is my new friend, Steve Rozenberg. Steve, great to have you on the show.
I appreciate you having me, Tom. Thank you very much.
Steve is a full-time airline pilot and a part-time investor. I thought it'd be great to have somebody real, who's actually doing this, on the show. So Steve, what made you get into investing in the first place? Clearly, you still like your job, so what got you into investing right off the bat?
Yeah, that's a good question. What precipitated me to get out of the realm of just being a employee, was 9/11. So it was a tragedy that happened, we all remember 2001, and that was the day that I realized that my safe, secure job as an airline pilot, was not safe and it was not secure. Because 48 hours after the towers fell, I got delivered a furlough notice, that basically said, “Hey Steve, thanks for being a great employee, but we don't think we need you. And you're about to be on the street with 50,000 other pilots. So good luck.”
To me, that's when my should became a must, and I realized that I needed to figure out another strategy very, very quickly. So it wasn't necessarily a choice, but it was something that I had to do.
Well, I think make the point exactly is that, we never know when something's going to happen, that's outside of our control. I remember when the job I had as the in-house tax advisor for a Fortune 1000 company, my first responsibility was to let half of my people go.
Literally half of them, and it was just a downsize. It nothing to do with their competence, had nothing to do with their abilities. Simply, I was told, “Cut your staff in half.” That's when I realized that having a single client or a single customer, is really risky business. I love the idea that you're back being an airline pilot, there's lots of demand right now. Obviously, there wasn't even a year ago, but there is right now, based on the times I've been on a plane recently.
So you like being a full-time airline pilot, but how do you even start with the idea of becoming a part-time investor? Now, I get it, as an airline pilot, you've got days on, days off, but let's take a busy surgeon or somebody who is working 50, 60 hours a week. How do you even start? Where do you even start with part-time investing?
Well, for me, it started by reading and educating myself because being… I was 25 years old, when I got hired with my first airline. That's all I ever wanted to do, was to have a job as an airline pilot. Probably like someone else that they have a specialty in their field, and it very quickly came to my attention that the skillset I had was only valuable in a airplane.
So I realized that I could not even drive a truck because I didn't have the qualifications. So I started looking to see what is it that other people do that are successful? I had no idea, and everything was somehow tied to real estate. At one form or another, books I read, I did the Rich Dad Poor Dad, and the whole series and everything, and I thought, “Okay, this resonates with me.”
It wasn't really the fact that I could do it part-time, it was a matter of understanding the value of leverage, and understanding the difference of the fulcrum point of being an employee, and being now in a furlough line, with 50,000 other pilots, or understanding that I could control my destiny. What I said, I never-
Let's talk about that just for a second, Steve. Let's talk about controlling your destiny, because I actually think that's a big deal right now. We have the US government, who frankly wants to control everybody's lives, it appears. They want more entitlements, more people on more benefits, and that's going on all over the world, right?
You see in France, they're requiring vaccine cards to get a cup of coffee. So there's a lot of other forces trying to control us. Why would you want to be in control of yourself? That's a big theme of ours at WealthAbility, is your ability to create wealth and being in control of your destiny. But why was that so important to you?
Everybody has a defining moment in their life, and I'll tell you a personal one of mine. I remember the days after 9/11. I'd already been given my pink slip, and I was basically waiting for my exit from the airline. And if you remember, during the timeframe of 9/11, at the actual happening of it, all the aircraft, wherever they were in the world, had to circle and land where they were.
So they dispatched all the flight crews around the world to pick up these airplanes and reposition them. And I will never forget this, and again, this is one of those moments that I have. It gives me the chills thinking about it, but I remember walking through, I believe it was Denver Airport at the time. And if ever walked through a airport terminal with no life, there's no existence of everybody.
It's a very huge cavernous eerie building. I remember looking outside at the tarmac, and seeing all these aircraft parked in a jigsaw puzzle, because they were just trying to fit them somewhere on the airport. I remember looking out and thinking to myself, “My life, as I know it, will never be the same again.” I didn't do anything to cause this, but I am basically going to be affected for many, many years to come.
The thing that bothered me, is I knew that I put myself in that position by being lazy. And I believed in an illusion that a safe, secure job would support me. Now at the time, many, many people did, but that was my moment that I realized that I did this to myself. And that's the victim, victor mentality. And sure, there's many pilots I know that, at that moment, they just said, “Well, that's the way it is.”
I took bold steps, into a very unknown, charted territory called real estate. I didn't know what I was doing. Like many people, I made a lot of mistakes. I was very successful. I ended up learning, getting educated, getting trained and mentored, and 20 years from now…. So it's a cycle. If you look today, at 20 years, you look at a lot of the people in the airline industry, maybe a year ago, the same people that I knew back then, that were afraid of losing their jobs, are still afraid of losing their jobs.
You look at me and I say, “You know what? I'm okay. If the airline goes out of business, I'm okay.” Because I took massive action into unknown, scary waters, but I did it because I vowed to myself that day, I would never ever put myself in that position, that I was, in that terminal building, looking out at those airplanes.
Well, I think you make a really good point, that it's taking control of our own lives. I had a similar situation, when I left a big CPA firm. Not on my choice. They brought somebody else in. They liked them better, and I decided to start my own CPA firm. Instead of taking the real estate route, I took the business route.
And I just decided after a year, and I was not making very much money after a year. I'm going, “I don't care.” I remember telling my wife this, “I don't care if we make $30,000 a year. If I make $30,000 a year for the rest of my life, I never going back to work for somebody else.” So part of that is that I like… I'm the youngest of six children. I like being in control because I grew up not being… I had so many people telling me what to do, but part of it also is that I'm going the risk.
Oh, my heavens. The risk of these consequences that we don't know, that they're going to happen. I mean, who knew we were going to get COVID, right? Who knew that we were getting get 9/11? You may just not know that when your business may decide to shut down, or sell out. There's so many things outside of our control, that getting something inside of our control, like investing can have a huge impact.
So you started with the education. You started getting to understand, which I think is the key. Because it's like professional stock market traders. You want to trade paper first, before you actually do the real thing. Because a lot of people learn in 2005, six and seven, that if you go into real estate without practicing and getting the education, you can get hammered.
Again, maybe no fault of yours. Maybe something completely outside of your control, like the collapse in 2008 and nine, but at the same time, it's that education that gets you started. So what kind of education for you, what was the biggest thing that turned the corner for you and said, “Okay, now I'm ready.”?
Yeah. That's a great question. For me. It was understanding that… And this may sound not very intelligent, but it was me understanding that I didn't know what I needed to know. It was understanding that I didn't understand that having a goal, and having an end destination of what I wanted to accomplish.
We do it all the time. We get in our car, we have an end destination. I get in an airplane. I know where I'm going. I have an end destination. I started buying real estate, I had no end destination. I was buying deals because other people told me they were good deals. I never factored them into data and numbers, and I didn't have a reason I was buying them. And of course, real estate has a way, sometimes it's a lot slower, but it has a way of showing you that you've made a mistake.
And when that wrecking ball comes back the other way, as we all know, it does not discriminate, and it does not partial anyone from the wreck that's coming. And I was one of those people. I learned my lesson. The biggest moment for me personally, was understanding that I had to be around smarter people. I had to learn to associate with people that were where I wanted to go.
To me, that was getting coached, getting mentored. I was coached and mentored for at least the last 10 years. I still do it today. And I'm just a big believer of realizing that every day… You're like a tree. You're either growing or you're dying. And every day you have a decision that you can either grow or you can die, every single day we wake up.
And I've learned that the only way of doing that is having that North Star, that end destination, and having that why, that just is relentless, that you are going to get to it. So for me, that's what it was for me. It may sound simple. It wasn't this big prolific thing. It was just understanding that I needed a destination, and I didn't have one.
Yeah, that's a good point. Investing in anything, whether it's real estate, stocks, businesses, etcetera, it's hard work. And having a reason to do it is not just a target, but it's actually a reason for doing it. So that you're not just saying, “Oh, I just want to make some more money.” But it's actually, “Wow. What if, in the next five years or seven years, or 10 years, what if I didn't have to work? What if I could have my dream car, my dream vacation, my dream house, whatever that dream is.”
That's why at Wealthability actually Steve, we actually start with your dream. We always start with your dream because that's the why. What is the why there, and it also allows us to quantify, “Okay, well, if that's true, if that's your dream, what's the cost of that dream?” We hear people say, “Oh, money's not important.” Well, we all know that's baloney, right? You and I do. Because things you want, they cost money. Even if it means time and freedom, that costs money.
So what we have to start with is, we have to go, “Okay, where are we going? Where are we today, and let's make a plan to get there.” Let's get a plan together to get there. So when you were undertaking those initial steps, where you practiced a little bit, had some failures, which is a great way to learn. Mistakes are the best way to learn.
Once you've done that. Now you've got your why, how did you go about creating your plan?
It's funny, at the time… In the flying world, we call it building the plane in the air as we're flying it. And that was very similar to our business model. As we evolved, they kept stacking. We didn't know where it was going to go. We ended up building a very large property management company in the interim, and ended up selling that business and exiting that company.
But what I learned was that… I go back to the same basic foundation. It's a matter of the lifestyle that you want to have. And so people buying houses, it's not four walls and a roof. That is not going to make you happy, and it's definitely not going to make you successful. It's the business model that runs inside of that four walls and the roof, and that business model is dictated by numbers and data.
So you could say, “I want to have the lifestyle, the flexibility, the freedom,” but you have to quantify that. And you've got to put some numbers and data to it. So just like you said… And that took me a while. To be honest, it took me a while to understand that. I don't think of myself as an ignorant person. I'm an airline pilot. I do pretty well, but it was just something that they don't teach us that in school, as we know.
There's no manual that says, “Hey, Steve Rozenberg, here is your book of life, of all the things as an airline pilot, investor, business owner, coach, speaker, this is your life, Steven, here's the manual you have to follow.” We don't get that. So we have to figure it out on our own. And for me, it was one of those things that we just kept stacking it and stacking it. And luckily, I would say the only reason that I feel that I was successful, is I took massive action on a daily basis.
The naysayers, all the people… I just kept getting up every day, as all of us do, we would get knocked down. I would get lied to, stolen from, all those things, but it didn't phase me. It didn't bother me because I knew I had nothing behind me, because I was about to lose my job. So I had to keep looking forward and I had to keep getting up, and I just did not let anything stop me.
I think one of the biggest challenges with entrepreneurs is, we maybe get our toe banged and we say, “Well, I'm going back because that was no fun.” You're missing the reason why you're doing it. And just like you said, if you don't have that why… Motivation is a battery, it drains over time. And if you have that why, that's what's going to carry you through.
I wish I could say it was this light in the sky, defining moment, but it was just something that built over time, of getting coached and mentored and understanding what is my perfect life? What does Steve Rozenberg want for his family and for his life? For everyone, it's different. And so for me, I can't say it was a defining moment. It was more of a evolution of things over time.
If you like financial education, the way I do, you're going to love Buck Joffrey's Podcast. Buck's a friend of mine. He's a client of mine. He's a former board certified surgeon, and he's turned into a real estate professional. So he has this podcast that is geared towards high paid professionals. That's who he's geared towards.
So if you're a high paid professional, you're going, “Look, I'd like to do something different with my money than what I'm doing.” I'd like to get financial educated. I'd like to take control of my money and my life and my taxes. I would love to recommend Buck Joffrey's Podcast, which is called Wealth Formula Podcast with Buck Joffrey. I hope you join Buck on this adventure of a lifetime.
So I've learned over years, as I've seen a lot of successful and failed business owners and investors, that people… We tend to start with a certain why, and that is, I want to accomplish X. And then what happens is, it's like Maslow's hierarchy of needs. Then we get to a higher purpose. Well, now I want to create a difference. So for example, I have a good friend in Austin, a big real estate developer.
He started out just working with his dad on residential real estate, and multi-family homes. But then what he decided was, “I want to make a difference in the neighborhood.” Now they have award-winning neighborhoods. They actually are constantly getting awards from the different cities where they go in, and they take over three or four different development projects and make a why there.
So I think there's a point here where we start with our initial why, and then maybe our why gets bigger, and we actually get a bigger purpose. And I think that's where we can expand ourselves, and perhaps even go back to what you were talking about, where that's where having a coach or a mentor, somebody who's really driving us, can help us expand, so we can do so much more.
Yeah, it's funny you say that. I think a lot of us, when we get started in a new entrepreneurial endeavor, we're running away from what we don't want in life. And so whenever I've coached people or mentored them, I'll say, “What do you want, what is real estate going to give you?” And they'll go on maybe a five minute tirade of telling me, “I don't want to be told what to do. I don't want a job. I don't want this…”
They're telling me all the things they don't want and I'll listen to them. And when they're done, I'll say, “Okay, that wasn't my question. My question was, what do you want?” Many times they'll sit there and say, “You know what? I don't know. I've never thought about that. I've been so angry at what I don't want in life. I've never really thought about what I want.” And I'm like, “Well, you're going to get exactly what you don't want, because that's what you're focused on.”
And they sit there and, it's the people that always have bad luck. They always have bad luck because that's their filter, and that's what they're aiming towards. And so a lot of times… Again, we evolve and over time, you start saying, “Okay, I know I feel safe with what I don't want now. Now I got to start going in…” Maybe it's an evolution, the second half of our life. I'm a big believer in giving back, and helping as many people as I can. I don't do it for money.
Don't get me wrong. Money's great. We buy a lot of great things, but once we get our primal needs… I had one of my coaches. He became a business partner of ours, Brad Sugars, his name. We sat down one day and he said, “Steve, after you buy all the cool things in life, all the toys, everything. Start buying memories. Buy a concert in Wembley Stadium, buy sunset on the Mediterranean in Greece. Buy the memories that the money gives you.”
He goes, “You're just going to replace all the toys that you buy.” And he said, “I have a book of all the things I want to enjoy in my life, and these are all memories.” I thought, that's an interesting way to live, and I do that now. I have a book and I write down the things that I would like to see, whether with my family, by myself, whatever it is, sunrise over Mount Fuji, whatever it is. These are the things that I would like to experience and that's not something money can buy.
I like that. Let's go back to that mentor, coach thing.
You're talking about… You're starting to get specific. You're starting to get your data together. You're starting to get that. Actually who helped you define what you were going to do in your investing? Because I always found that the most focused investors are the most successful investors. And this will make you rich.
Was there somebody who helped you do that? How did you actually get that narrowed focus, so that you could be ultra successful in what you were wanting to do?
That's a good question. I would have to say it wasn't a one person. It had evolved for the things that I wanted in my life, but I will tell you the biggest success I had, believe it or not, was from my business coaches, not real estate coaches. Because I learned that whether you own a piece of real estate, or you own a business, or you own ownership, they're all run under the same chassis. You have marketing, you have sales, you have operations, you have finance, IT and maybe HR.
But if you don't understand those, at least the first four, the marketing, sales, operations and finance, if you don't understand that, you're not going to have a successful rental property portfolio. You're not going to be able to advise people on a business. It goes on and on. That is the chassis that as you well know, that's the chassis that everything runs off of. [crosstalk 00:21:16] At least that's the way I was taught.
Real estate is a business.
And when you approach it as a business, it's a whole different matter, when you invest in this business. So eventually you had to come up with a team.
I presume you don't do this all by yourself. I never met a successful entrepreneur who did everything by themselves. I think that's actually… I say the three most expensive words in the English language are, do it yourself.
Yes, very true.
[crosstalk 00:21:45] ever is, if I want it done right, I have to do it myself. I've learned I'm old enough to know that if I want it done right, I need to find the person who can do it better than I could do it. How have you gone about building your team?
Yeah, I am a huge fan and a huge believer in leverage. And so what I do and the way I was taught, is the first thing I had to do is, I had to figure out, what am I not good at? I want to focus on my strengths and I want to delegate my weaknesses. So I learned very early on, everything that I am, either it's low level, low enjoyment tasks or something that's…
I'm not skilled at taxes. That is not something… Could I do it? Maybe I could, but is that the best use of my time? I would say probably not. So I started learning how to delegate my time, because you, I, everybody, we have 24 hours in a day. No more, no less. How we utilize that time? And again, I'll go back to one of my coaches. We were sitting there one time and I was at… He was on the board of 11 businesses and we were having lunch.
I said, “How do you do this?” I had one business and it was driving me crazy. And I said, “How do you do this?” And he said, “It's a matter of saying no. You have to say no more.” And so we went on through this conversation and he said, basically it's a matter of putting on blinders, and being more focused. He's like, “You say yes to everything, but you're really saying no to many more things. You just don't see them.”
And I said, “Well, that's easy for you. You're this multimillionaire, you've got these businesses.” And he said, “You don't understand. I was never going to be this way until I started saying no.” And that was the moment that I thought, “Wow.” That was that Aha! moment I had. And he said, “Until you start saying no, there's an opportunity cost for everything you do.”
So I started realizing, and what we started doing with our property management company, which is a very time-intensive, employee centric operation, because we're not selling a widget, we're selling services. We learned how to get very specific, and how to outsource and leverage right person, right seat, with our business, to where we were able to bring our payroll cost, down from 60% to 33%, which as you know, is a hard feat to do, in a employee centric operation. Because we started to understand the value of leverage and systemization, automation and policies, procedures.
And because of that, we were able to scale so much faster because we laid the groundwork and the funneling. And it was really that moment of him… Again, maybe it was right time, right moment. I don't know. And we're sitting there and he said, “Steve, that's why your phone is rang 11 times, and mine hasn't rang once during a lunch.” All of a sudden, everything came into focus. I need to say no more.
And he said the problem is, when people want to be successful, they think they need to do more. They want to pile everything on their plate. He said, “When you look at successful people, we clear our plate and we allow what we want on the plate. You're doing it backwards.”
There's a great quote from Warren Buffett, that he became a millionaire saying yes, and became a billionaire saying, no.
It's a hard thing to do. And I think once we realize that every time we say yes to one thing, we're saying no to something else, we are always making that decision. So let me ask you a question, just to get everybody on board here. How much time do you spend investing right now?
Oh, my investment time is very minimal. Again, I do have a team. I believe in being surrounded by smarter people than myself. I would say, when I'm looking at my data and my numbers, I'm probably doing maybe one to two hours a week, of my investment strategy. Because I'm a big believer in having stuff brought to me. It's kind of like pulling a string or pushing it. I like to pull the string and I like data that I need to know, KPIs and metrics that I need to see, that will allow me to make a decision. As we all know, real estate is not a fast moving project.
I got to tell you, it's great, Steve, hearing an airline pilot talk about KPIs and metrics.
That's not something you often hear from an airline pilot. They're more talking about speed and elevation, etcetera. So let's kind of wrap this up. If you could, what would you say would be the top three things that somebody can do, if they want to not necessarily replace their job, but maybe not have to work. So have enough, eventually passive income. Obviously it takes work to get there, but what are the top three things? You're always talking about action. What are the top three actions you think people ought to take?
Yeah. If it's okay, if I could just say one thing. A lot of people ask me, they'll say, “Steve, why don't you quit your job? Why do you keep being a pilot, speaking around the world, owning real estate? Why do you do all this?” And my question back to them is, “Why do you not? Where is it written that I have to quit my job because I'm successful?” If I love what I do, why can't I keep doing it?
So my advice to me was if you love what you do, don't think that you have to quit your job. If you are not happy or those things, I get it. But going back to your question, I would say the top three things is number one, you've got to have that end destination. It has to happen. Once you know your end destination, you have to create the strategy to get you there. It's kind of like, if you want to go to Disneyland, you have to realize what freeways are going to get you to Disneyland. That's number two.
And number three, you have to take action. You have to walk out the door and get in your car to get there. It's never going to happen on the couch. The biggest challenge is, people talk to themselves in and out of success every day, because of what they think, as opposed to just taking action. I don't like taking blind action, I think focused and intentional action. So you got to start with the end in mind. Just as you said, you've always got to start with the goal. You've got to create the strategy or the roadmap to reach that goal. And then you've got to get off the couch and take action.
If you do those three things, 20 years from now, you'll be like me and say, “You know what? I don't know how it happened, but it happened by taking action.” I know how it happened now, but at the time, I was just taking action. I was doing what I was told. If I could add a fourth, I would say, surround yourself with mentors and coaches. That is the key. I would not be where I was, had I not surrounded myself with people that could show me the path.
What's interesting, Steve, is that you've really just illustrated the pattern that we actually use with every single client, because that's what we're teaching. There's a pattern to this. You start with the end in mind. You then create a plan of action, a strategy for getting there. Then you got to take the actual action, you've got to implement that plan of action, and you've got to surround yourself with a great team, which again, with a great team, then you can build the processes.
Like you say, the policies, procedures, all of the systems that you need, so that you don't have to be there all the time. The good news is that, on top of having the freedom that you clearly have, Steve, is that I would suspect, or I would hope that you got a good tax team around you and therefore you have freedom from taxes as well. So there's all sorts of freedoms we get.
The key is that once we get educated, we have a choice. And the choice is, do we take action or do we not? But until we get educated, we have no choice at all. And some of us are forced into it. You were Steve. I was. I was pushed into it by losing a position. Some of us take action even when we don't have it forced upon us. And however it's going to happen, I would encourage everybody, take control of your life. It is your ability to create wealth, that we're talking about because it's not that hard.
This is the great thing. Anybody can do it. Even an airline pilot. Now I'm just kidding Steve.
No, you're right. You're right.
Yes, anybody can do this. There are fundamental principles. What Steve's described is a pattern that we seeing work, over and over and over again. And when you follow that pattern, when you get that great team around you, you're always going to make way more money and pay way less taxes.
You've been listening to the Wealth Ability Show with Tom Wheelwright. Way more money, way less taxes. To learn more, go to wealthability.com.