I’ve got a slide to kind of describe why I’m qualified and so this particular
I’m qualified and so this particular
I’m qualified and so this particular slide shows how I’m at how popular I am
slide shows how I’m at how popular I am
slide shows how I’m at how popular I am that’s fabulous I have a ski run named
that’s fabulous I have a ski run named
that’s fabulous I have a ski run named after me at Big Sky
after me at Big Sky
after me at Big Sky so that qualifies me right well that and
so that qualifies me right well that and
so that qualifies me right well that and a few years ago I lost a popularity
a few years ago I lost a popularity
a few years ago I lost a popularity contest and now I’m president of the
contest and now I’m president of the
contest and now I’m president of the East Canyon ferry County Water and Sewer
East Canyon ferry County Water and Sewer
East Canyon ferry County Water and Sewer District so that also qualifies me
District so that also qualifies me
District so that also qualifies me thanks Paul for helping me with that so
thanks Paul for helping me with that so
thanks Paul for helping me with that so that and I have had some success with
that and I have had some success with
that and I have had some success with some businesses I’ve had at some retail
some businesses I’ve had at some retail
some businesses I’ve had at some retail business at wholesale business and
business at wholesale business and
business at wholesale business and constructions Moving’s all sorts of fun
constructions Moving’s all sorts of fun
constructions Moving’s all sorts of fun stuff and in some of those I’ve used
stuff and in some of those I’ve used
stuff and in some of those I’ve used debt and have been able to use it
debt and have been able to use it
debt and have been able to use it successfully so anyhow this next slide I
successfully so anyhow this next slide I
successfully so anyhow this next slide I want to talk about what is debt and debt
want to talk about what is debt and debt
want to talk about what is debt and debt is is strictly a tool and so if you’ve
is is strictly a tool and so if you’ve
is is strictly a tool and so if you’ve got some screws that you want to put in
got some screws that you want to put in
got some screws that you want to put in do you want to use a hammer or do you
do you want to use a hammer or do you
do you want to use a hammer or do you want to use the screwdriver
want to use the screwdriver
want to use the screwdriver well it seems obvious to me that the
well it seems obvious to me that the
well it seems obvious to me that the screwdriver is gonna do a better job can
screwdriver is gonna do a better job can
screwdriver is gonna do a better job can you use a hammer sure you can and if
you use a hammer sure you can and if
you use a hammer sure you can and if you’ve got nails can you use the
you’ve got nails can you use the
you’ve got nails can you use the screwdriver I’ve done it it the outcome
screwdriver I’ve done it it the outcome
screwdriver I’ve done it it the outcome isn’t always pretty
isn’t always pretty
isn’t always pretty but can you accomplish it yes does it do
but can you accomplish it yes does it do
but can you accomplish it yes does it do as good a job mm-hmm no it just doesn’t
as good a job mm-hmm no it just doesn’t
as good a job mm-hmm no it just doesn’t and so debt is a tool and so we want to
and so debt is a tool and so we want to
and so debt is a tool and so we want to use this as a tool when it’s used
use this as a tool when it’s used
use this as a tool when it’s used properly so on the next slide I want to
properly so on the next slide I want to
properly so on the next slide I want to talk about the proper use of debt and so
talk about the proper use of debt and so
talk about the proper use of debt and so this one that’s a great way to use debt
this one that’s a great way to use debt
this one that’s a great way to use debt right a jetski how about a family
right a jetski how about a family
right a jetski how about a family vacation how about some new clothes how
vacation how about some new clothes how
vacation how about some new clothes how about going out to dinner or
about going out to dinner or
about going out to dinner or impressing your wife or girlfriend or or
impressing your wife or girlfriend or or
impressing your wife or girlfriend or or any other things that you’re going to
any other things that you’re going to
any other things that you’re going to use debt to acquire something
use debt to acquire something
use debt to acquire something that depreciates hmm
that depreciates hmm
that depreciates hmm that’s interesting so I’m gonna argue
that’s interesting so I’m gonna argue
that’s interesting so I’m gonna argue and I think most most smart people that
and I think most most smart people that
and I think most most smart people that talk about money not me but most of
talk about money not me but most of
talk about money not me but most of these other folks they’re gonna say hey
these other folks they’re gonna say hey
these other folks they’re gonna say hey don’t use debt for something that’s not
don’t use debt for something that’s not
don’t use debt for something that’s not gonna increase your income so now the
gonna increase your income so now the
gonna increase your income so now the next slide we’re gonna talk about what
next slide we’re gonna talk about what
next slide we’re gonna talk about what is good debt what what can we spend
is good debt what what can we spend
is good debt what what can we spend money on and use debt and so this is
money on and use debt and so this is
money on and use debt and so this is just a picture of a duplex and so that’s
just a picture of a duplex and so that’s
just a picture of a duplex and so that’s that’s one of the ideas and so if you’ve
that’s one of the ideas and so if you’ve
that’s one of the ideas and so if you’ve got some income producing assets and and
got some income producing assets and and
got some income producing assets and and I’m real technical on income producing
I’m real technical on income producing
I’m real technical on income producing assets and it’s not necessarily a
assets and it’s not necessarily a
assets and it’s not necessarily a depreciating asset so a duplex well you
depreciating asset so a duplex well you
depreciating asset so a duplex well you can technically take some depreciation
can technically take some depreciation
can technically take some depreciation on it it’s not a depreciating asset it’s
on it it’s not a depreciating asset it’s
on it it’s not a depreciating asset it’s going to increase in value over time and
going to increase in value over time and
going to increase in value over time and if you use a little bit of debt you can
if you use a little bit of debt you can
if you use a little bit of debt you can get into this and have someone else pay
get into this and have someone else pay
get into this and have someone else pay your mortgage off it’s kind of a neat
your mortgage off it’s kind of a neat
your mortgage off it’s kind of a neat idea there there’s another way to look
idea there there’s another way to look
idea there there’s another way to look at using debt properly at one point in
at using debt properly at one point in
at using debt properly at one point in time I owned a retail business and this
time I owned a retail business and this
time I owned a retail business and this was back in the 80s and 90s and we would
was back in the 80s and 90s and we would
was back in the 80s and 90s and we would buy our product six months in advance of
buy our product six months in advance of
buy our product six months in advance of when we needed it and that was just how
when we needed it and that was just how
when we needed it and that was just how the life cycle would go and we would
the life cycle would go and we would
the life cycle would go and we would take shipment on the product and at that
take shipment on the product and at that
take shipment on the product and at that point in time interest rates were much
point in time interest rates were much
point in time interest rates were much higher than today and I recall the
higher than today and I recall the
higher than today and I recall the credit manager from one of our companies
credit manager from one of our companies
credit manager from one of our companies called and said hey it’s the end of the
called and said hey it’s the end of the
called and said hey it’s the end of the month and I get a bonus if you pay your
month and I get a bonus if you pay your
month and I get a bonus if you pay your bill early and for every month you pay
bill early and for every month you pay
bill early and for every month you pay your bill early I’ll give you two
your bill early I’ll give you two
your bill early I’ll give you two percent off of that bill okay now I I’m
percent off of that bill okay now I I’m
percent off of that bill okay now I I’m not real smart but I’m adding this up
not real smart but I’m adding this up
not real smart but I’m adding this up and I’m thinking okay so annually for 12
and I’m thinking okay so annually for 12
and I’m thinking okay so annually for 12 months if I got 2% a month that’s 24%
months if I got 2% a month that’s 24%
months if I got 2% a month that’s 24% well that’s a no-brainer I can go to the
well that’s a no-brainer I can go to the
well that’s a no-brainer I can go to the bank and I can get money for 10% at the
bank and I can get money for 10% at the
bank and I can get money for 10% at the time and so I ran down to the bank and I
time and so I ran down to the bank and I
time and so I ran down to the bank and I said hey I need to borrow some money I
said hey I need to borrow some money I
said hey I need to borrow some money I remember what it was how much it didn’t
remember what it was how much it didn’t
remember what it was how much it didn’t matter so I borrowed
matter so I borrowed
matter so I borrowed money and paid the bank 10% I took my
money and paid the bank 10% I took my
money and paid the bank 10% I took my big discount right up front off of what
big discount right up front off of what
big discount right up front off of what I owed and then every time I sold my
I owed and then every time I sold my
I owed and then every time I sold my product I had some extra cash and I’d
product I had some extra cash and I’d
product I had some extra cash and I’d pay the bank down so I wasn’t even
pay the bank down so I wasn’t even
pay the bank down so I wasn’t even paying the bank the full amount so it
paying the bank the full amount so it
paying the bank the full amount so it was a terrific deal was a great use of
was a terrific deal was a great use of
was a terrific deal was a great use of debt and it actually made money for me
debt and it actually made money for me
debt and it actually made money for me so it it actually made sense so those
so it it actually made sense so those
so it it actually made sense so those are just a couple of the ideas of what
are just a couple of the ideas of what
are just a couple of the ideas of what is good debt and when is it appropriate
is good debt and when is it appropriate
is good debt and when is it appropriate there’s a ton of really good examples so
there’s a ton of really good examples so
there’s a ton of really good examples so the next slide if you’ve got a million
the next slide if you’ve got a million
the next slide if you’ve got a million dollar investment and you’ve got an 8%
dollar investment and you’ve got an 8%
dollar investment and you’ve got an 8% return on this thing and there’s a
return on this thing and there’s a
return on this thing and there’s a couple of different philosophies on on
couple of different philosophies on on
couple of different philosophies on on how to look at it one extreme is no debt
how to look at it one extreme is no debt
how to look at it one extreme is no debt zero debt no we’re not gonna do debt
zero debt no we’re not gonna do debt
zero debt no we’re not gonna do debt never never never never how many people
never never never never how many people
never never never never how many people are gonna write a check for a million
are gonna write a check for a million
are gonna write a check for a million bucks here yeah lots of us so the other
bucks here yeah lots of us so the other
bucks here yeah lots of us so the other extreme is hey I’m gonna borrow
extreme is hey I’m gonna borrow
extreme is hey I’m gonna borrow everything I can borrow I’m gonna borrow
everything I can borrow I’m gonna borrow
everything I can borrow I’m gonna borrow a hundred percent of this or 90% of this
a hundred percent of this or 90% of this
a hundred percent of this or 90% of this and based on that my returns sure look
and based on that my returns sure look
and based on that my returns sure look good I’ve got 10% equity my return on
good I’ve got 10% equity my return on
good I’ve got 10% equity my return on investment actually my zeroes are wrong
investment actually my zeroes are wrong
investment actually my zeroes are wrong I go to an 80% percent versus an 8% so I
I go to an 80% percent versus an 8% so I
I go to an 80% percent versus an 8% so I just those needed to be percentages so
just those needed to be percentages so
just those needed to be percentages so an 80% however if you’ve got that much
an 80% however if you’ve got that much
an 80% however if you’ve got that much debt and we all remember 2008 2009 2010
debt and we all remember 2008 2009 2010
debt and we all remember 2008 2009 2010 what happened the market tanked all of a
what happened the market tanked all of a
what happened the market tanked all of a sudden this million dollar property is
sudden this million dollar property is
sudden this million dollar property is worth what six hundred thousand some
worth what six hundred thousand some
worth what six hundred thousand some places less than that so now you’ve got
places less than that so now you’ve got
places less than that so now you’ve got a six hundred thousand dollar property
a six hundred thousand dollar property
a six hundred thousand dollar property that you still owe 90999
that I’m gonna be a high of around 65
that I’m gonna be a high of around 65 percent of debt to equity and I’m gonna
percent of debt to equity and I’m gonna
percent of debt to equity and I’m gonna write it down to around 40% and then I
write it down to around 40% and then I
write it down to around 40% and then I want to real everage and if I stay in
want to real everage and if I stay in
want to real everage and if I stay in that zone then I’m not stressed when we
that zone then I’m not stressed when we
that zone then I’m not stressed when we have a downturn in the market I can
have a downturn in the market I can
have a downturn in the market I can still afford to have the cheapest rent
still afford to have the cheapest rent
still afford to have the cheapest rent out there and if I have the cheapest
out there and if I have the cheapest
out there and if I have the cheapest rent I’m gonna keep it rented and then
rent I’m gonna keep it rented and then
rent I’m gonna keep it rented and then I’m gonna be able to make the payments
I’m gonna be able to make the payments
I’m gonna be able to make the payments and eventually I’m gonna have the thing
and eventually I’m gonna have the thing
and eventually I’m gonna have the thing paid for or I write it down to where I’m
paid for or I write it down to where I’m
paid for or I write it down to where I’m about a 40% debt 60% equity and then I’m
about a 40% debt 60% equity and then I’m
about a 40% debt 60% equity and then I’m gonna borrow money against that and buy
gonna borrow money against that and buy
gonna borrow money against that and buy another property and then there’s a
another property and then there’s a
another property and then there’s a snowball effect
snowball effect
snowball effect I like real estate so and in fact is we
I like real estate so and in fact is we
I like real estate so and in fact is we talk a little bit about real estate I
talk a little bit about real estate I
talk a little bit about real estate I what are some of the the different kinds
what are some of the the different kinds
what are some of the the different kinds of returns that you can get on
of returns that you can get on
of returns that you can get on investment I know if I put money in the
investment I know if I put money in the
investment I know if I put money in the bank I’m getting a lot I’m sure you guys
bank I’m getting a lot I’m sure you guys
bank I’m getting a lot I’m sure you guys are getting a lot in your savings
are getting a lot in your savings
are getting a lot in your savings accounts point zero zero zero zero zero
accounts point zero zero zero zero zero
accounts point zero zero zero zero zero one something like that I mean it’s it’s
one something like that I mean it’s it’s
one something like that I mean it’s it’s really awesome and if you go get a CD
really awesome and if you go get a CD
really awesome and if you go get a CD you’re gonna get like 1% by I think on a
you’re gonna get like 1% by I think on a
you’re gonna get like 1% by I think on a CD bonds ah there somewhere three to
CD bonds ah there somewhere three to
CD bonds ah there somewhere three to five percent depending on the grade of
five percent depending on the grade of
five percent depending on the grade of bond I know there’s some some towns in
bond I know there’s some some towns in
bond I know there’s some some towns in California that might be a little higher
California that might be a little higher
California that might be a little higher but it’s better be careful on those
but it’s better be careful on those
but it’s better be careful on those stocks now there’s some folks that do
stocks now there’s some folks that do
stocks now there’s some folks that do really well and get maybe eight nine ten
really well and get maybe eight nine ten
really well and get maybe eight nine ten percent on stocks consistently maybe
percent on stocks consistently maybe
percent on stocks consistently maybe some people even do better than that
some people even do better than that
some people even do better than that if you own a business most business
if you own a business most business
if you own a business most business people are looking in that fifteen to
people are looking in that fifteen to
people are looking in that fifteen to twenty percent they’ve got some risk
twenty percent they’ve got some risk
twenty percent they’ve got some risk involved and and that’s what they’re
involved and and that’s what they’re
involved and and that’s what they’re looking at and that seems to make some
looking at and that seems to make some
looking at and that seems to make some sense private equity firms that they
sense private equity firms that they
sense private equity firms that they want 30% this it’s just the that’s
want 30% this it’s just the that’s
want 30% this it’s just the that’s that’s what they want when they’re gonna
that’s what they want when they’re gonna
that’s what they want when they’re gonna invest in the company they’re looking
invest in the company they’re looking
invest in the company they’re looking for a 30 plus percent return on
for a 30 plus percent return on
for a 30 plus percent return on investment and of course you got the
investment and of course you got the
investment and of course you got the angel funding guys and and that you know
angel funding guys and and that you know
angel funding guys and and that you know lucked out and invested in Mark
lucked out and invested in Mark
lucked out and invested in Mark Zuckerberg and those guys did
Zuckerberg and those guys did
Zuckerberg and those guys did exceptionally well and so there’s kind
exceptionally well and so there’s kind
exceptionally well and so there’s kind of your extremes when I do real estate
of your extremes when I do real estate
of your extremes when I do real estate and I do
and I do
and I do this kind of debt and and we look at my
this kind of debt and and we look at my
this kind of debt and and we look at my returns on investment and I’m getting
returns on investment and I’m getting
returns on investment and I’m getting 23% 13% somewhere in there and we
23% 13% somewhere in there and we
23% 13% somewhere in there and we haven’t talked about the appreciation
haven’t talked about the appreciation
haven’t talked about the appreciation which that might be a couple more
which that might be a couple more
which that might be a couple more percent that you can add on the
percent that you can add on the
percent that you can add on the depreciation which is what Uncle Sam
depreciation which is what Uncle Sam
depreciation which is what Uncle Sam lets you have but it’s it’s cash in your
lets you have but it’s it’s cash in your
lets you have but it’s it’s cash in your pocket so there’s some some advantages
pocket so there’s some some advantages
pocket so there’s some some advantages to it so how much is the right one for
to it so how much is the right one for
to it so how much is the right one for you I guess that’s something you guys
you I guess that’s something you guys
you I guess that’s something you guys get a answer for yourselves but a
get a answer for yourselves but a
get a answer for yourselves but a balanced approach seems to make a lot of
balanced approach seems to make a lot of
balanced approach seems to make a lot of sense so thank you guys for everything
”
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