WS1450: Helping 66,000 People Create Financial Independence | Rich Fettke

EPISODE 1450

[INTRODUCTION]

Whitney Sewell (WS): This is your daily Real Estate Syndication Show. I am your host, Whitney Sewell. Man, do I have a few amazing segments for you lined up now. This guy, our guest today, and his wife are just an amazing team. They’ve done some amazing things. In real estate, their story is incredible. He’s going to share a little piece of that with you today. And I know it’s going to encourage you. Whether you are a passive or active investor, you’ll listen closely to our guests today. Rich Fettke is the author of The Wise Investor, a modern parable about creating financial freedom in living your best life. He’s a licensed real estate broker and active investor co-founder of real wealth, a real estate investment group whose 60,000 plus members improve their financial intelligence, secure passive income, and obtain financial freedom. A pioneer in the field of business and personal coaching. He’s a former vice president of the international coach Federation and holds one of the ICS’s first master certified coach credentials. Rich’s work has been featured on TV, radio in print, including in the USA. Entrepreneur magazine and the wall street journal. I’ve enjoyed getting to know rich and Kathy; over the last number of years, I’ve had rich and Kathy on the show a few different times. And every time they bring so much value, I’m honored to have him own for a number of segments.

Today, we’re going to jump into their story to some degree, his background, and we’re going to jump into his book as well, The Wise Investor, and talk about some specific things he has in the book that I know you’re going to learn from and take things home today. Enjoy the show with rich, you’re going to be inspired, and you’re going to learn a lot.

[INTERVIEW]

WS: Rich, welcome to the show. Honored to have you on. I know you’ve been on the show. It’s been a while since you and your amazing bride; you all are despite the entrepreneurial duo. It’s incredible to get to know you all a little better, even speak at some of the same conferences, and have seen you recently. And so honor did get to spend this time with you rich. Thank you just right off the bat. I want to thank you for your time. 

Rich Fettke (RF): Thank you, Whitney. Good to be here. It was great seeing you a few months ago. And yeah, my bright is amazing. I agree; I’m grateful. 

WS: You all just have an amazing brand and business, and looking forward to diving in. Let’s give the listeners a little bit more about who rich is and share a little bit about your focus in the real estate industry. And let’s dive into this book that you’ve written as well. 

RF: Absolutely. Sure. Well, who am I going to? Way back? I was diagnosed with the hyperkinetic disorder when I was eight years old. Today, they’d call that ADHD, but they didn’t. I’m older, so they didn’t have that term back then. So I was put on Ritalin. I was put in the class for the learning disabled and made fun of in school. And so I’ve got this inner gremlin that I still am working to shake that tells me that I’m never going to be successful. I’ll never amount to anything, but what turned things around for me was I got into weight training in my senior year of high school. I didn’t even graduate with my high school class.

RF: It was like, not school was not a good place for me, but weight training really taught me about building discipline, staying focused, coming up with a goal, and envisioning success. And I started to apply those lessons to my educational pursuits and went on to get a degree in business and opened a health club when I was 23 years old. And that’s when I really just got into the business. I love business. I love leading a team. I love working with a group of awesome people with a purpose and mission and going after it. So fast forward, I moved to California as I grew up in Boston, moved to California in 95. That’s when I met Kathy, my wife, and she was doing really well.

RF: I got into business and personal coaching back in 95 when it was new; it was a new industry, and I just loved it and kind of rocketed up in that industry. Cause it was so new. I was elected president of the coaching organization and ended up having a front-page article in the San Francisco Chronicle on myself and my clients.

RF: And so life was just like on fire. Everything was great. Then I signed a book deal with Simon and Schuster, but then I was diagnosed with melanoma, the most advanced form of skin cancer. And they thought it had spread to my liver. And I met with an oncologist. After several months of testing, the oncologist said I had six months to live.

RF: I was 37 years. My wife, Kathy, and we had two daughters, ten years old and three years old. And it was a real shock to our whole family. And so Kathy was a stay-at-home mom at the time. And she’s the one who said, I have to find a way to make ends meet if rich dies. So she went out and. I sought mentors and started to talk to successful people and found that most of those successful people had created their success in their well through real estate and real estate investing.

RF: So she got excited about that. She’s like, this is what I can do. Thankfully, the doctor’s diagnosis was wrong. The melanoma had not spread to my liver. It was just Manges, which many of us have in our organs, just clusters of blood vessels, but it was enough on the scan. To have them think that it had spread and metastasised. So that was the thankful thing that I had a new lease on life and made it through after a few surgeries to remove the melanoma cancer free. Now it’s been 20 years since then. But that is what got us into investing.

RF: And that was a spark, Kathy and I did a cash-out refi on the home we owned in San Francisco. And we went north of Dallas, Texas, to a little town called Rock Wall. And we bought five investment properties, single-family homes, and new builds. And these were $145,000 homes that we’re renting for 15-1600 a month. So we’re like, oh, this is good. This is easy. I love this. And that’s what led us on this path. And then fast forward a little bit more. We had friends and family saying, “How are you doing this? How are you living in San Francisco and owning rental properties in Texas?”

RF: So we decided to form a small group to help our friends and family. And then, Kathy started a small radio show in the San Francisco area. So listeners of that show were saying, how did you do this? And we formed this group that we called real wealth. And today, 19 years later, real wealth now has over 66,000 members that we’ve helped create financial independence through investing in real; estate. That’s it; in a nutshell, it is the best I can.

WS: Yeah, no, I love hearing your all story. It’s just incredible—so many parts of that. I appreciate your transparency. Even from the diagnosis at eight, I just think so many people can relate to that, right? In the struggle of that through school. And I don’t know, just getting labelled, I think it’s a crime almost. I mean, I do,. Man, and you’re such an example of it. That wasn’t true. I mean, you were able to come through that, able to do amazing things. I love perseverance. You show through that, even opening your health club at 23. I mean, I just, man, it’s incredible. So we decided to form a small group to help our friends and family. And then, Kathy started a small radio show in the San Francisco area. So listeners of that show were saying, how did you do this? And we formed this group that we called real wealth. And today, 19 years later, real wealth now has over 66,000 members that we’ve helped create financial independence through investing in real; estate. That’s it; in a nutshell, it is the best I can.

WS: So I want to go there for just a moment. You know, would you say the pushback that you received at that time? Were family members or friends may be saying. Hey, rich, maybe you should think about opening this club or this business. Maybe you shouldn’t do this by yourself, or maybe you know what I mean? Like, I just wonder how much that pushback was and how you overcame that. 

RF: Yeah, push back. I was intent on it and was a competitive bodybuilder for about ten years. So I had gone to many different health clubs and gyms, and I would look at these places and say we could do it better. I could do it better. And it was my training partner and me when we were on a trip to Florida, and after several gyms like that, we’re like, we can do it better. So we got home, and I was off-fired up. And then I met the resistance. I realized that I needed to get a loan and have someone co-sign with a bank that owned the property where we put it, which started with an 8,000-foot square-foot facility.

RF: So it was convincing my parents, and my mom’s always been a huge believer in me. She sees ADD as an extra ability. Different benefits come from having ADD and getting to see more and be more attentive to more things. So she’s the one that believed in me. I did have to convince her. Because her concern was that I only had an associate’s degree at the time, and she said, I’m just afraid that if you open this gym, you’ll never go on and get your four-year degree, which is important to her. So I’m like, mom, I promise. I promise if you give me this loan, if you co-sign it, even if it doesn’t work out, I’ll work two full-time jobs to pay the loan back. I’m it’s going to work. I know it’s going to happen. 

RF: Somehow, I sold my parents on it, and they co-signed with me on loan. Partner came in, and it was a life-changing experience running a business. It was just my partners and me in the beginning. And then, over time, we grew that 8,000 square foot facility to 23,000 square feet. We had 24 employees by the time I sold it when I was 30. It was a life changer. I’m always going back to my mom, thanking her for that. Had she not done that? There’s no way I would be where I am today. And I wouldn’t have helped the people that I’ve helped today and all that. So yeah, there was definitely some resistance. It was definitely the naysayers saying, oh man, I heard it’s tough to run a gym, run a health club. And it was hard. Those first couple of years were a grind, but we came through and made it happen. 

WS: Yeah. I think that could speak to people who are maybe in those same shoes as you. But also the parents of those individuals as well. I love that. How has maybe that changed how you have? Thought about even parenting, as far as your mother signed with you and helped push you in this direction, right? Or believed in you. What does that look like now? As a parent. 

RF: Yeah. Now we have adult kids—one daughter’s 30. We have a grandson now who’s two and a half, which is pretty awesome—our other younger daughter’s 23. Now our parenting style has been much about using questions. Kathy and I both went through coach training back in 1995 and 1996. And the power of the coaching that we learned is very Socratic, realizing that most people have most of their answers or are resourceful. And they find those answers somewhere. And so, as parents, we always would ask our daughters questions. We wouldn’t tell them what to do, what they had to do, or how they had to do it. It was very Socratic curious; tell me more, what do you want? What’s next? How are you going to go about that? And I think that’s empowering for anyone, whether you’re a parent, whether you’re a coach, whether you’re a business leader, all of those things is asking, curious, asking the question, realizing that people are creative, that people are resourceful, that people can find out their answers, whether they need to, whether I be through books or podcasts or finding a mentor.

RF: So I just see that my job as a parent is to empower my kids to believe in themselves. To draw out the answers for them and to show them how to be resourceful instead of micromanaging and telling them how to do things. And that’s the way we treat all of our employees at real wealth too. 

WS: Love that. Yeah. I have so much to learn from you.

RF: Always learn, and man, me too. 

WS: That’s awesome. Now I appreciate you sharing that. I mean, just like your mother believed in you, right? And man, they took that leap of faith in you, supported you, and loved that. But then even to the diagnosis at 37. Well, what an eye-opener. Right? And how that changed everything for you all. And it’s almost a blessing now that happened. But what a blessing that it was not correct. I cannot imagine. Wow. What rejoicing happened when you figured out that it wasn’t true? But so many things have happened, and you all built the real wealth brand, and I think even last time you were on the show, now that I’m thinking about it, maybe we talked about EOS a little bit and how you all have implemented that and how you’re caring for employees. And we work through that a little bit and, so I love your all’s desire to care for your employees, the culture, you know, the focus on culture and how well you all have done that.

WS: But I want to dive into what you call real wealth, but you recently wrote a book. I called The Wise Investor book. And I want to dive into what that is like; what is that about? Let’s dive into why you wrote the book; give us some details.

RF: Sure. Yeah. So the wise investor is slightly different from most financial and real estate books. It’s a parable; it’s a modern parable. So it’s a story. And it’s about creating financial freedom and living your best life. That’s the subtitle, man. What can I say about it? It’s a parable. It’s like if you took rich dad, poor dad, and the Alchemist. And the richest man in Babylon, I blended it into a book. It’s that style of the book. And the reason I wrote a story is for two reasons; number one, I wanted the reader to finish it. And my first book was a non-fiction book. The one that I signed with Simon and Schuster called extreme success was a non-fiction personal development coaching book.

RF: And I’m proud of it. And I also know, and. And statistics that 86% of people don’t finish non-fiction books. And so I didn’t wanna write another book that people weren’t gonna finish. So I wanted to write a compelling story. That was a page-turner that could share the lessons and emotionalize the information. That’s what a story does. I think a story can take information like investing, financial freedom, business, being a better parent, being a better spouse, and being more present. These are all the lessons I wove into The Wise Investor, which emotionalizes this information and the lessons. So it sticks because the reader can see themselves and the protagonist, they can see themselves in maybe the protagonist’s wife or even the mentor, or even, you know, all these different characters. It’s like, oh, I experienced that same type of lesson, or I need to hear this lesson. And so that’s why I wrote a parable, and that’s why it was important to me.

WS: Yeah. I love that. I think about my boys, even my daughter; now she’s three. It’s like when my wife or I read a good story, you can see it in their faces. Right? I mean, they are just on the edge of their seats, and it’s hard for them to sit still for school for 15 minutes. But man, when you’re reading the story, my wife can read a story for an hour and their eyes are just glued on her. 

RF: Yeah. That’s how we operate as human beings—for thousands of years. Think about Jesus and all the stories he shared. Even the Buddha, like, it doesn’t matter. You look way back in the stoic it’s usually stories. And then, I went about it and hired a certified editor from a story grid. So there’s this story grid: this guy, Sean Coin, who has analyzed what makes an amazing story. Joseph Campbell’s work, the hero’s journey, and all these blockbuster movies. Follow the same type of hero’s journey. So I hired someone to work with me on this story. We would meet on zoom and talk out the story and the characters, and I would share the lessons I’ve learned. And then I’ve learned from the members of real wealth over the years about investing, about creating financial freedom, all these things, all the stories and lessons from my coaching clients, and then we wove this into that story.

RF: So I kind of did the who-not-how it’s like, okay, now how can I get this book written? But who do I need to help me get this book written and do it in a compelling way? 

WS: For sure. Are the characters real people, or how do you frame that? They are fictional people based on real people, and it’s a fictional story, but it’s based on real-life events. Absolutely. So when on our podcast at the real well show, Kathy’s been doing that for. Podcasting came out in 2005. It’s crazy, but we interview people on that, as you do. And we look at their journey, like, where were they? What did they do? And where are they now? And these stories are so compelling and inspiring that I absolutely will some of those stories into the main characters of the wise investor because they need to be shared. It’s really powerful. 

RF: So basically, it’s the main character. His name is Ryan Brooks. It tells a story of his life over five years. And in the beginning, he starts, he’s a W2 employee. He’s making a good six-figure income. He’s maxing out his 401k. But his spending habits are crap. He’s not aware of where his money’s going. He’s got lifestyle creep, and he has no time. He’s trying to climb the corporate ladder, and he has no time for his wife, kids, or even to live. So it kind of shows that story of him meeting a new friend, meeting a new mentor who guides him, and showing him a new way to create financial freedom. And this guy, Ryan, becomes wealthy in more ways than he ever thought possible. 

WS: You mentioned a lifestyle creep. What is that? 

RF: Lifestyle creep is like when you start to make a little more money. And you get a pay raise and all of a sudden you get a nicer car, and then you get another pay raise, and you get a bigger house, and then you get a boat. And then you start going out to eat more, your lifestyle starts to go up with your income, and you never have any money left over magically, right?

RF: It’s like, why don’t you want to have money to invest? And so the big lessons around, most people that I’ve met and most people we’ve talked to in our network. Even some of us investors don’t have a personal financial statement when I talk to them at conferences. They don’t know what their net worth is. They don’t know what their monthly cash flow is. They don’t even know their real expenses in those different categories. So that’s one of the first lessons the protagonist learns from the mentor is just that we want you to write down all of your expenses. I want to see where your money is going over a month. And then, he gives them the challenge of reducing those expenses by 20%. And he thinks it’s impossible. He’s like, there’s no way I could reduce my expenses by 20%. But he figures a way. And that’s what so many of us have to do. And including myself, I’ve been through this. I went through it not being aware, making more money, but not aware of where that money’s going and putting that money to work. I think that’s key. 

WS: And this is kind of a side question to the story, but I want to ask you, have you found a great way to track personal expenses, or how do you manage that? I know listeners, and many of us have tried to do that well. Any tips around that?

RF: Yes. I think the best thing I ever did was hire a bookkeeper for our finances. So I was trying to do it myself. It’s like, well, I should be able to manage this myself and track all the expenses. I should be able to put a couple of hours a week on our books, but I would avoid it. I would put it off. There were other more important things to focus on growing the business and taking care of the kids. And so one day I finally said, you know what, thanks to my coach. I have a coach I speak to every other week. He’s the one who challenged me. He’s like, right, rich, why are you doing your books? And so I bit the book. I hired a bookkeeper, and that’s been a game-changer. And now he creates these reports. He creates a monthly net worth statement, monthly personal financial statement, our balance sheet cash flow statement, and our budget. And now, all Kathy and I have to do is sit down, print these reports out, and look at what’s working and what’s not. What adjustments do we need to make when we’re going to deploy some capital into an investment? Yeah. So getting a bookkeeper is that’s the biggie. 

WS: Yeah. I appreciate your focus on that. And we won’t spend a ton of time there. Let us do a whole show on that. I feel like that would help so many listeners, right? I think getting a handle on your expenses is crucial, as you mention here. But to clarify for the listeners as well. Now, this is a bookkeeper that’s for your finances. It’s not like for the business, just business like your entities, your operating business, those things, but it’s like, how much am I spending on E on eating out? This month, is that accurate? 

RF: 100%. Yeah. So we have our, basically, we have a CFO for our company, and we also have a director of finance. So our director of finance runs the whole thing financially at real wealth. We are keeping track of things and our whole QuickBooks account and everything. And we have an outsource CFO who is experienced, you know, he only probably puts in maybe five hours a week for our company, but he’s an experienced CFO. He’s worked with multiple companies, so he can really help guide us as a business on what’s working, where we need to make adjustments, all that stuff, percentages, and ratios. But this guy Sam, who’s our personal bookkeeper. I hired him through a company called belay, which belay provides executive assistants; where I found my executive assistant belay also has bookkeepers and trained bookkeepers with experience. So I hired Sam through belay. And I think probably been working with him for five or six years. And so he knows our finances better than I do. It’s really awesome.

WS: Love that. I appreciate that insight there too. I’ve talked to belay numerous times about virtual assistance, and I know they’re like the cream of the crop or seem to be anyway, as in virtual assistance. Well, I appreciate that side note there. I want to jump back into the book, and you talk about this mentor a little. Is the mentor’s focus mostly on real estate? And if so, why? 

RF: Yeah. That’s his main focus.

WS: I mean, I would hope so. 

RF: Yeah. Right. Exactly. Also, I’ve seen you create the greatest wealth for us as a family and for the members of real wealth and the people, I associate with. And I have friends who are financial advisors, I have friends who invest in the stock market, and they do well. The ones who do it right. But the mentor basically just says real estate is his favorite method of acquiring wealth and creating cash flow, and he goes over what so many of us know, like the five ways to benefit and profit from real estate investing, from appreciation to all the tax benefits of it. The hedge gets inflation, you know, all this stuff that we know, and he explains it to Ryan, the protagonist. And though it’s kind of a new thing to Ryan. And as he’s learning these lessons, he’s like, oh man; I didn’t even realize all these benefits of investing. 

RF: So the mentor he invests in stocks, he invests in crypto. He is gold, all that stuff, but real estate is his primary. Wealth building vehicle really.

WS: Love that. I feel like it’ll be one of that kind of like rich dad poured ad or some of those that are like, it’s the eye-opening part that has to happen or the mind expansion that, Hey, this is a real thing, this is possible for me, right? And I feel like that’s just crucial before you ever dive into the actual dynamics of how you take down a single-family home or multifamily or all those things, right? It’s like understanding that I can do it. 

RF: Yeah. Yeah. And the mentor even says, he goes, I started in a single family, and that’s how I got, started and learned it. And then he said, now I invest in multifamily. I invest in mobile home parks. I invest in soft storage. So he’s this blend of so many people I’ve met at these conferences, like you, Brandon Turner, Carl Yor, or Kenny McElroy. It’s like, he’s this blend of these experienced investors, and he has wisdom a lot more wisdom than I do. I know that.

WS: Rich, I’m grateful for your time today. I don’t want the listeners to know too. We’re going to do a series of rich, so we’re going to do another show or two with him and dive more into it. And what is real wealth and that right financial mindset, we’re gonna jump into shortly. So rich, thank you so much for your time today and even sharing real, just being transparent about your story and some of the hardships that have helped shape you and Kathy, your business, that that has just become so amazing. And so I know that’s helping so many people because you all are willing to be so open about it. And struggles of making it happen, right? And how you all have done that. And even this book looking forward to diving into that a little more, tell the listeners how they can get in touch with you and learn more about you.

RF: Sure. Our company is really simple. It’s just realwealth.com. In social media, I think I’m the only Rich Fettke in the world. So, just Rich Fettke, which is F E T T K E and then The Wise Investor is available now. It’s on Amazon, all major booksellers as a Kindle or ebook, and also on Audible as an audiobook. And it’ll be coming out soon as a hardcover once the supply chain issues are dealt with here, it’s coming out really soon as a hardcover.

[END OF INTERVIEW]

[OUTRO]

Whitney Sewell: Thank you for being a loyal listener of The Real Estate Syndication Show. Please subscribe and like the show. Share it with your friends so we can help them as well. Don’t forget, go to LifeBridgeCapital.com where you can sign up and start investing in real estate today. Have a blessed day. 

[END]