1
00:00:02,799 --> 00:00:03,279
Hey there.
2
00:00:03,279 --> 00:00:07,759
This is Chris Kidd with the Financial Playbook
podcast, and I wanted to share a quick story
3
00:00:07,759 --> 00:00:14,065
real quick that might give you some creative
ideas on how to do some things with some
4
00:00:14,065 --> 00:00:20,385
leverage and do some more sophisticated
strategies that will save, it'll save you
5
00:00:20,385 --> 00:00:26,225
money, it'll make you more money, it'll it can
protect situations on, having to sell some
6
00:00:26,225 --> 00:00:26,725
things.
7
00:00:27,024 --> 00:00:33,049
So what I did in this particular situation and
this story is, is when we were in the
8
00:00:33,049 --> 00:00:40,489
restaurant business, and we had a number of
restaurants, with my mentor and and some other
9
00:00:40,489 --> 00:00:41,369
investors and stuff.
10
00:00:41,369 --> 00:00:48,074
And, we came up on a a time where we were
closing on a a new one about to get ready for
11
00:00:48,074 --> 00:00:52,094
the opening and everything, so it came time
for, to close on this deal.
12
00:00:52,394 --> 00:00:56,810
And if we didn't get it done, it's gonna cost
us probably about another 30 days, which would
13
00:00:56,810 --> 00:00:58,649
be a whole lot more than what we were sure it
was.
14
00:00:58,649 --> 00:01:03,130
So we needed we needed an extra $50,000, to go
raise.
15
00:01:03,130 --> 00:01:07,770
So I came up with that, and I'd worked out a
deal with him where basically, okay.
16
00:01:07,770 --> 00:01:15,405
Well, we'll come up with I've got $50,000, and
then in, in 30 days, we'll have this closed.
17
00:01:15,405 --> 00:01:17,265
We'll have the restaurant open and running.
18
00:01:17,484 --> 00:01:20,545
I'll get that back plus some extra for my
trouble.
19
00:01:21,004 --> 00:01:27,979
So what I did was I said, well, how can I do
this with with the the least impact, to my
20
00:01:27,979 --> 00:01:29,040
financial situation?
21
00:01:30,219 --> 00:01:36,060
And, I can continue making money on my money
rather than take my money out and go dump it
22
00:01:36,060 --> 00:01:38,079
somewhere and then wait for that to come back.
23
00:01:39,174 --> 00:01:41,275
What's the most effective way to do this?
24
00:01:41,575 --> 00:01:45,754
So I said, well, let me go into my, my trading
account.
25
00:01:46,135 --> 00:01:50,875
And what I did was I borrowed $50,000 against
my account.
26
00:01:51,630 --> 00:01:54,209
I borrowed it on margin, just took the cash
out.
27
00:01:55,709 --> 00:02:00,670
And rather than and I'm not recommending doing
this like this isn't something to do all the
28
00:02:00,670 --> 00:02:01,150
time.
29
00:02:01,150 --> 00:02:02,909
It just happened to work in this situation.
30
00:02:02,909 --> 00:02:04,049
It was a good setup.
31
00:02:04,270 --> 00:02:06,109
The the margin fees were really cheap.
32
00:02:06,109 --> 00:02:07,694
It wasn't gonna cost me that much.
33
00:02:07,694 --> 00:02:14,594
So one of the other things that I did was I
borrowed more than I needed.
34
00:02:14,655 --> 00:02:18,834
And I took that and I said, well, let me find
something that will pay for my interest.
35
00:02:19,134 --> 00:02:23,590
I wanna pay the fees that I'm gonna be charged
on this 50,000.
36
00:02:24,050 --> 00:02:28,689
So I need the extra 10, and I'm gonna put it
into something that's gonna pay the interest on
37
00:02:28,689 --> 00:02:29,189
that.
38
00:02:29,250 --> 00:02:33,270
And then I'm gonna still get the extra money,
off of the 50 that I'm doing.
39
00:02:33,490 --> 00:02:40,034
So my adviser that I had used at the time, I
said, well, hey.
40
00:02:40,034 --> 00:02:40,995
Bring me some ideas.
41
00:02:40,995 --> 00:02:42,055
What do we got here?
42
00:02:42,514 --> 00:02:43,474
Let's find something.
43
00:02:43,474 --> 00:02:48,354
And he brought up a couple ideas, and I said,
this one right here, this was early on in the
44
00:02:48,354 --> 00:02:50,310
the Internet stuff and everything.
45
00:02:50,930 --> 00:02:57,169
And he said, he'd found something that it was
heavily involved in, like, the web phone stuff,
46
00:02:57,169 --> 00:03:04,224
like, things where we have on on these things
now, we've got access to the the Internet at
47
00:03:04,224 --> 00:03:04,965
our fingertips.
48
00:03:05,264 --> 00:03:07,905
But before, they didn't have that.
49
00:03:07,905 --> 00:03:14,865
We had flip phones, and, a few of them were
coming out with, Internet access where you
50
00:03:14,865 --> 00:03:16,805
could get on the web really slow and
everything.
51
00:03:17,519 --> 00:03:23,039
And, there were some things that I've been
reading on how that was going to be the way of
52
00:03:23,039 --> 00:03:23,599
the future.
53
00:03:23,599 --> 00:03:28,639
And by I'm trying to remember how many years
that they have within a handful of years, there
54
00:03:28,639 --> 00:03:35,605
were gonna be over 1,000,000,000 web phones, or
phones cell phones with web access, on the
55
00:03:35,605 --> 00:03:36,745
planet being used.
56
00:03:37,205 --> 00:03:40,245
And at the time, there were there were very
little people.
57
00:03:40,724 --> 00:03:42,665
There wouldn't hardly anybody doing it.
58
00:03:43,205 --> 00:03:46,569
So I said, this right here is a good place to
put the money that will grow.
59
00:03:46,569 --> 00:03:48,110
I'll make money off of this.
60
00:03:48,330 --> 00:03:53,930
I'll pay, for my fees, and I'm gonna end up
making money, even more.
61
00:03:53,930 --> 00:03:59,530
So, it turned out to be a really good deal that
I was making money all over the place on this
62
00:03:59,530 --> 00:04:04,455
deal, and, I didn't have to use any of my own
money.
63
00:04:04,515 --> 00:04:09,155
I didn't have to sell anything and cash out and
take capital gains hits or anything like that.
64
00:04:09,155 --> 00:04:14,115
I was able to leave it in there and let that
keep on growing, and, it it worked out in
65
00:04:14,115 --> 00:04:15,155
multiple different ways.
66
00:04:15,155 --> 00:04:17,949
So don't always just look at it like, okay.
67
00:04:17,949 --> 00:04:20,689
Well, I have to go pull out cash to do
something.
68
00:04:22,014 --> 00:04:26,514
There's creative ways to finance stuff, and
this just happened to be one of them.
69
00:04:26,574 --> 00:04:32,514
So make it a great day, and be great until I
see you again next time.
00:00:02,799 --> 00:00:03,279
Hey there.
2
00:00:03,279 --> 00:00:07,759
This is Chris Kidd with the Financial Playbook
podcast, and I wanted to share a quick story
3
00:00:07,759 --> 00:00:14,065
real quick that might give you some creative
ideas on how to do some things with some
4
00:00:14,065 --> 00:00:20,385
leverage and do some more sophisticated
strategies that will save, it'll save you
5
00:00:20,385 --> 00:00:26,225
money, it'll make you more money, it'll it can
protect situations on, having to sell some
6
00:00:26,225 --> 00:00:26,725
things.
7
00:00:27,024 --> 00:00:33,049
So what I did in this particular situation and
this story is, is when we were in the
8
00:00:33,049 --> 00:00:40,489
restaurant business, and we had a number of
restaurants, with my mentor and and some other
9
00:00:40,489 --> 00:00:41,369
investors and stuff.
10
00:00:41,369 --> 00:00:48,074
And, we came up on a a time where we were
closing on a a new one about to get ready for
11
00:00:48,074 --> 00:00:52,094
the opening and everything, so it came time
for, to close on this deal.
12
00:00:52,394 --> 00:00:56,810
And if we didn't get it done, it's gonna cost
us probably about another 30 days, which would
13
00:00:56,810 --> 00:00:58,649
be a whole lot more than what we were sure it
was.
14
00:00:58,649 --> 00:01:03,130
So we needed we needed an extra $50,000, to go
raise.
15
00:01:03,130 --> 00:01:07,770
So I came up with that, and I'd worked out a
deal with him where basically, okay.
16
00:01:07,770 --> 00:01:15,405
Well, we'll come up with I've got $50,000, and
then in, in 30 days, we'll have this closed.
17
00:01:15,405 --> 00:01:17,265
We'll have the restaurant open and running.
18
00:01:17,484 --> 00:01:20,545
I'll get that back plus some extra for my
trouble.
19
00:01:21,004 --> 00:01:27,979
So what I did was I said, well, how can I do
this with with the the least impact, to my
20
00:01:27,979 --> 00:01:29,040
financial situation?
21
00:01:30,219 --> 00:01:36,060
And, I can continue making money on my money
rather than take my money out and go dump it
22
00:01:36,060 --> 00:01:38,079
somewhere and then wait for that to come back.
23
00:01:39,174 --> 00:01:41,275
What's the most effective way to do this?
24
00:01:41,575 --> 00:01:45,754
So I said, well, let me go into my, my trading
account.
25
00:01:46,135 --> 00:01:50,875
And what I did was I borrowed $50,000 against
my account.
26
00:01:51,630 --> 00:01:54,209
I borrowed it on margin, just took the cash
out.
27
00:01:55,709 --> 00:02:00,670
And rather than and I'm not recommending doing
this like this isn't something to do all the
28
00:02:00,670 --> 00:02:01,150
time.
29
00:02:01,150 --> 00:02:02,909
It just happened to work in this situation.
30
00:02:02,909 --> 00:02:04,049
It was a good setup.
31
00:02:04,270 --> 00:02:06,109
The the margin fees were really cheap.
32
00:02:06,109 --> 00:02:07,694
It wasn't gonna cost me that much.
33
00:02:07,694 --> 00:02:14,594
So one of the other things that I did was I
borrowed more than I needed.
34
00:02:14,655 --> 00:02:18,834
And I took that and I said, well, let me find
something that will pay for my interest.
35
00:02:19,134 --> 00:02:23,590
I wanna pay the fees that I'm gonna be charged
on this 50,000.
36
00:02:24,050 --> 00:02:28,689
So I need the extra 10, and I'm gonna put it
into something that's gonna pay the interest on
37
00:02:28,689 --> 00:02:29,189
that.
38
00:02:29,250 --> 00:02:33,270
And then I'm gonna still get the extra money,
off of the 50 that I'm doing.
39
00:02:33,490 --> 00:02:40,034
So my adviser that I had used at the time, I
said, well, hey.
40
00:02:40,034 --> 00:02:40,995
Bring me some ideas.
41
00:02:40,995 --> 00:02:42,055
What do we got here?
42
00:02:42,514 --> 00:02:43,474
Let's find something.
43
00:02:43,474 --> 00:02:48,354
And he brought up a couple ideas, and I said,
this one right here, this was early on in the
44
00:02:48,354 --> 00:02:50,310
the Internet stuff and everything.
45
00:02:50,930 --> 00:02:57,169
And he said, he'd found something that it was
heavily involved in, like, the web phone stuff,
46
00:02:57,169 --> 00:03:04,224
like, things where we have on on these things
now, we've got access to the the Internet at
47
00:03:04,224 --> 00:03:04,965
our fingertips.
48
00:03:05,264 --> 00:03:07,905
But before, they didn't have that.
49
00:03:07,905 --> 00:03:14,865
We had flip phones, and, a few of them were
coming out with, Internet access where you
50
00:03:14,865 --> 00:03:16,805
could get on the web really slow and
everything.
51
00:03:17,519 --> 00:03:23,039
And, there were some things that I've been
reading on how that was going to be the way of
52
00:03:23,039 --> 00:03:23,599
the future.
53
00:03:23,599 --> 00:03:28,639
And by I'm trying to remember how many years
that they have within a handful of years, there
54
00:03:28,639 --> 00:03:35,605
were gonna be over 1,000,000,000 web phones, or
phones cell phones with web access, on the
55
00:03:35,605 --> 00:03:36,745
planet being used.
56
00:03:37,205 --> 00:03:40,245
And at the time, there were there were very
little people.
57
00:03:40,724 --> 00:03:42,665
There wouldn't hardly anybody doing it.
58
00:03:43,205 --> 00:03:46,569
So I said, this right here is a good place to
put the money that will grow.
59
00:03:46,569 --> 00:03:48,110
I'll make money off of this.
60
00:03:48,330 --> 00:03:53,930
I'll pay, for my fees, and I'm gonna end up
making money, even more.
61
00:03:53,930 --> 00:03:59,530
So, it turned out to be a really good deal that
I was making money all over the place on this
62
00:03:59,530 --> 00:04:04,455
deal, and, I didn't have to use any of my own
money.
63
00:04:04,515 --> 00:04:09,155
I didn't have to sell anything and cash out and
take capital gains hits or anything like that.
64
00:04:09,155 --> 00:04:14,115
I was able to leave it in there and let that
keep on growing, and, it it worked out in
65
00:04:14,115 --> 00:04:15,155
multiple different ways.
66
00:04:15,155 --> 00:04:17,949
So don't always just look at it like, okay.
67
00:04:17,949 --> 00:04:20,689
Well, I have to go pull out cash to do
something.
68
00:04:22,014 --> 00:04:26,514
There's creative ways to finance stuff, and
this just happened to be one of them.
69
00:04:26,574 --> 00:04:32,514
So make it a great day, and be great until I
see you again next time.
