3 Degrees of Freedom

Ep 149 - Using Business Systems and Processes Unlock Lifestyle Design with Dan Schwartz

• Derek Clifford • Season 3 • Episode 149

Share episode

Join us in this episode of 3 Degrees of Freedom as we delve into the world of real estate investing and lifestyle design with the brilliant Dan Schwartz, founder of the 80/20 Investor Academy. With over a decade of experience, Dan has honed his superpower - diagnosing root cause issues in businesses and solving them through efficient systems.

We explore Dan's journey of the 3 degrees of freedom, witnessing how he achieved remarkable success by embracing location and time independence while scaling his ventures. Discover the intriguing story behind "The 80/20 Investor Academy" and how it embodies his vision of empowering entrepreneurs through education and community.

With a focus on building sustainable, scalable systems, Dan shares invaluable advice on leveraging resources, creating standard operating procedures, and the delicate balance between systems and hiring the right people. Tune in for a captivating conversation that uncovers the secrets of Using Business Systems and Processes to Unlock Lifestyle Design.

Connect with Dan using the social links below and learn more about his business:
LinkedIn: https://www.linkedin.com/in/danschwartzy/
Facebook Group: https://www.facebook.com/groups/scalingrei
Website: https://www.join8020.com/
EBook: https://www.8020closers.com/

Unlock 3+1 degrees of freedom (time, location, financial + health) with our 5-Point Blueprint! https://elevateequity.org/podcastgift

If you really enjoyed this content and are looking for more, you can continue to learn more about us in several different places for free!

If you'd like to have a FREE copy of our 7 Ways Commercial Real Estate Syndications Protect and Build Wealth, simply click the link below. We are here and vested in your long-term success! elevateequity.org/7waysEbook

Unlock 3+1 degrees of freedom (time, location, financial + health) with our 5-Point Blueprint! https://elevateequity.org/podcastgift

If you really enjoyed this content and are looking for more, you can continue to learn more about us in several different places for free!

If you'd like to have a FREE copy of our 7 Ways Commercial Real Estate Syndications Protect and Build Wealth, simply click the link below. We are here and vested in your long-term success! elevateequity.org/7waysEbook

Derek Clifford:

This time on the show, we've got Dan Schwartz with us. How are you, Dan?

Dan Schwartz:

Derek. Great to be here, man. I'm great.

Derek Clifford:

Awesome. So for those who don't know Dan you're going to get to know him pretty well, the next half an hour to 45 minutes, because Dan is the founder of the 80/20 investor Academy, a community and educational platform that helps real estate investors and entrepreneurs scale their businesses while achieving greater freedom and leverage through systems and teams. Dan's expertise lies in his superpower, which is diagnosing root cause issues in businesses and quickly fixing them with a systems based approach. So you are definitely a man of my own heart, Dan. It's awesome. With over a, decade of experience in the real estate industry, Dan's helped thousands of investors get a grip on their leads to close more deals through his investor CRM investor fuse. And he's passionate about. Empowering entrepreneurs to achieve their goals by limiting inefficiencies and creating sustainable, scalable systems. Dan, it is awesome to have you on the show, dude. I am ready to just tear into it. Are you?

Dan Schwartz:

Yeah, everybody listening, get out a pen and a pad. There's going to be a lot of. Good little gems that hopefully you can implement right away. And we're not just talking like, big, high level, vague stuff that doesn't really matter or apply to you right now. So let's do it.

Derek Clifford:

A hundred percent. All right. So before we jump in fully into systems and processes, let's learn a little bit about you as a person. And in general, more about like where you are in the three degrees of freedom. As we talk about. location independence, time independence, and financial independence. Can you tell us where you are in each one of those and which ones you want to try to expand more into these days?

Dan Schwartz:

Yeah, so time is the 1 that as I tap into new revenue streams, I tend to be more involved until I figure out a way to systemize it and bring other people into it. So I can buy back my time and use my time at higher leverage, higher dollar per hour type of work. Right now, I'm like, in the throes of scaling out this education company and I find myself very busy and on calls all the time. The time factor, yeah. Is going to be the 1st thing I work on location independence. I work from home. My wife and I travel a lot. So we got that down pat and I spent a good chunk of my 20s living abroad in Europe and in Southeast Asia and doing the digital nomad thing. Actually, when I launched the best refuse in 2016, I went to Vietnam where I stayed for 2 months in Ho Chi Minh City and then went to Thailand and then. Did you're up and so I'm no stranger to that all of this, much like you, Derek was influenced by the four hour work week. So that was like, the aha moment where it's oh, the new rich. Yeah. Location. Location and time are the new measures of wealth and not just money or like income or how big your salary is

Derek Clifford:

100% and I don't think that he's ever going to listen to this, but a shout out to Tim Ferris for everything. Shout out to him. Yeah, absolutely. Totally influential and a hundred percent couldn't agree more. It was that book plus rich dad, poor dad that really gave me a lot of my like inspiration for the lifestyle that that I'm doing. So anyway, awesome, dude. It looks like we're, pretty much two sides of the same coin. So let's go ahead and jump right in, man. Can 80, 20 investor Academy. How did you come up with this idea also?

Dan Schwartz:

Yeah, so 80 20, 20% of your input produces 80% of the output. This has been probably like one of the most quoted or like most referenced principles in the business world, at least because it, it applies really well to allocation of time and allocation of capital. So 20% of your time will produce 80% of your desired result or 20% of your ad spend. We'll produce 80% of your leads or it's a law of nature that you see all over the planet from wealth distribution allocations to like, how like road traffic, like 20% of the roads and 80% of the traffic, like 20% of your veins and your body have 80% of the blood or something like, or arteries. There's all these little things that have maybe not an exact 80, 20. Like ratio, it's all about a small amount that has a disproportionate effect on the whole system. And I got obsessed with this Perry Marshall was the guy that turned me on to this concept. Perry Marshall wrote the book, 80, 20 cells and marketing, which had the there was an analogy in there that got me thinking. It was like, if you have a hundred clients. 20% of I'm going to give you 80% of your revenue and then of that 20%, there's another 80, 20 in that where it's 20% of the 20% we'll give 80% of that result. Basically, there's. A small set 5% of your of those 100 clients, 5 of those clients will pay 10 times. More than the other 80% just due to this break, break down and think about that. And it's also, he talks about the example of just like why Starbucks sells high end coffee makers in their store, because they know that a 1% of the people that walk in there are going to buy like this high end thing. And it's this huge profit maximizer for Starbucks that you'd like, would never know in this law I just got obsessed with it because there's probably a lot of entrepreneurs listening to this that you're, you grind, you hustle. But you're also lazy and you're the reason you're grinding and hustling and so you don't have to grind and hustle all the time. It's yeah, you'll do whatever you'll do whatever you can to just chill and have income coming in. So you could do what you want. And that is me to a T. I am obsessed with leverage and the 80 20 principle is the, preeminent law of leverage and it can be applied to everything in life. And if. If I had a tattoo, it would be like 80, 20. So I love the concept. It's really. A way to think it's really the, mental model that I returned to most frequently when I think of a problem, I try to think of the root cause of that issue. What is the 8020 of it? It's part of my language. It's part of how my team and I communicate to each other. It's just like, how can we 8020 this problem? And the way you do it is you go right to the source of the problem. And a lot of the times the source of the problem is you your mindset. Your strategy could be off or the way you're doing your strategy. Is off or it could be avoidance, right? You're just not doing the thing that you should be doing which is funny. Sometimes the 20% is the hardest thing to do picking up the phone and having that hard conversation. Could be the 20% and people shy away from that 20% because it's hard, but you get successful by getting really good at that and knowing when to jump right to that and having that hard conversation. Or making that cut in your life or your process or doing that research or sitting down and building out that process diagram. So you can train someone else to do it. Like, all this dirty systems work that's high leverage activity. And if I'm speaking over your head right now, that's okay. This is important for you to try to figure out. Because the highest leverage work you can do is not working in your business. It's working on your business. And that's the central thesis to my work right now. Yeah.

Derek Clifford:

I love this. The, everything that you're saying is a hundred percent, but I can resonate with this 100% because I look to build processes every single time. And as a matter of fact, I do this. So actively and so readily Dan, that sometimes I will spend so much time building a system or process before I even know that it's something that needs to be repeatable. Like I will jump to, I will jump to for instance, with this podcast that we're doing the very first thing that I did before I knew that it was going to even be something that I wanted to scale up, I built a system so that. When people enter their, information in Google forms, it goes into Google sheets. And then once it's inside of Google sheets, there's a API interface with open with chat GPT basically, so that things get automatically populated from Google forms, from Google into Google sheets. And then I have a zap watching a certain cell, right? And once it gets updated, then it pulls a question in and creates. So I have all these, automation setup. Anyway, that's just an example.

Dan Schwartz:

But don't confuse automation with systemization though.

Derek Clifford:

A hundred percent. Agree. Yeah. 100%. On that same vein though, how sometimes the, whole idea of automation and building systems is rooted in awareness or mindset, like you said, right? So yeah. Do you have any tools for people who maybe just know that they have to automate something? In their business and they know that they want leverage, but they don't know what to tackle or how to even think about it. Do you have any advice for people who are looking for that type of thing?

Dan Schwartz:

Yeah. First of all, if you don't have a proven revenue model, there's nothing to systemize. So step one, prove it out. And that takes manual, like the startup mode. It's hard to systemize something that doesn't exist. So if you are new to the real estate business or really any business. Get five customers on your own. In whatever way you can typically, the way to do it is to have conversations, right? That's an easy thing to track. You have 30 conversations, 5 of them close into a deal. What's your average take for per deal? How much did it cost you to get that deal? Whatever you track these things and then the met the method that you use to have those conversations. Then becomes the thing that you can systemize, but you have to figure out what that thing is first. Otherwise we're spending all this time creating all these systems. And imagine having an idea for a product, building out all of that product, spending a million dollars to design that software, build out all the automations and all the flow and all the onboarding, creating your marketing and your branding, but not having any conversations with people that will actually pay you. And you launch this product and nothing happens. It sounds like a silly idea in hindsight, right? But I freaking did that like many times in early in my career. I got so glued into Oh, I got to systemize this. I'm going to build this whole thing out. People are going to love it. Figure out the thing that will produce the result, then track it and then hire someone that can execute that process and track their work and get good at coaching them to success on that thing. For instance what's a popular where people are getting deals now, right? You send out 1200 text messages a day 50 people reply of those 50 people. You get 3 appointments. Great. Now you have a proven process that will work. Pretty much works the same way every single time, regardless of that conversation. Right? And you can have a process and a script for that, that you can train someone and you can measure how many texts did you send? How many of those people replied? How many replies of those replies? Like, how many people actually were qualified? Did you do a good job eliciting motivation out of that person? Did you do a good job of building trust with that person to get them the point of the call? And you just get good at that 1 little thing. Thank you. But all this is to say is you need to find the thing that actually produces the result that will get you to the income. And if you are confused about what that is, just think about your business as a funnel where it's like, opportunities come into the top. They get qualified, they get pitched and then they turn into a monetization or just in real estate. It's the dispo process wholesaling or you're buying and holding and you're installing a property manager or you're rehabbing it and you're doing all that. Think of your funnel. And if you are just starting out, I would work at the top of the funnel and work your way down. If you are already in business, and you already have approved model and you already wants to start systemizing it, I would actually work from the bottom up. So I would start with your disposition. Then I would look at your acquisitions process and now we have a machine that we can dump leads in without stuff falling through the cracks. Most people do it in reverse. They think they need to. Systemize their lead generation 1st. I don't know. We listen to people sales calls all the time that think that they have a leads problem and their sales calls are way off the mark. They are not asking the right questions. They're coming off as rude. They're coming off as too nice. They are not eliciting motivation and building rapport properly. They're making offers that are not. Multifaceted, they're not doing it visually. They're doing it verbally. There's all these things that are going wrong, yet they think that they have a leads problem. And this is one of those like 80, 20 things, which is you typically, I can have a conversation with someone and I know right away if it's a leads problem or a sales problem, 90% of the time, it's a sales problem. It's just the way that they're monetizing these, opportunities is wrong. And that's just, some spit ball and some brainstorming for you guys to see the truth of the situation. If you don't have a proven model, don't even worry about systemization. Just use this as an educational lesson. If you already have something that's working, use this interview to figure out how to enhance that by documenting it, tracking it, and then putting else, putting someone else in place to run that process while you just look at their stats every single week and coach them to, to get better and compare themselves to the week before that's That's it. That's building a system, but it doesn't have to be more complicated than that.

Derek Clifford:

Yeah. It's very comprehensive. And I love the fact that you started with, make sure you build a pipeline of something that works before you start automating it because it seems like very basic advice. And I think it's, something that applies to a certain subset of our listeners who really want to automate and systematize things and want to be thought through and make sure that they, catch everything. But I love that you got to get through this messy middle, right? Where you start with the business problem and you got to figure it out, right? You just, that's what entrepreneurship is. And once you figure out something where you have some level of success, that's when you can have some proof that will pay for a system. Because let's, be straight here. Not all systems cost money, but most of them do. And the best ones take a little bit of money and time and energy to set up. And so you don't want to make that investment until you find something that, that works really well. So I love that. Yeah, I wanted to, also touch on this too. This is a big question that I've always been moving back and forth on software versus people. There's a place for both, right? And systems is like the intersection between both of those. It can involve a person or sometimes it doesn't, especially now in the age of AI, right? What is your take on having a big team versus having lots of SOPs and lots of processes? Like, how do you know what? What, how to walk that line I know there's a lot to consider here and we're probably maybe over complicating this, but I just want to hear your thoughts on how to think about which one to pursue with a specific.

Dan Schwartz:

Yes, it's 80, 20, right? So 20% of your processes are going to have 80% of the importance to you, the leverage in, in, in the leverage. So in real estate investing, your acquisitions process. If you don't have a, proven and repeatable way to get contracts or get opportunities to buy or flip, that is your 80 20 right there. And so just start with, start there. Like you don't need to have your whole business documented and systemized and sopi. It's the 80 20 principle applies even to systemization itself. You really get good at that and then you can zoom in. So what is the system really? It's just a starting point and an end point. And if you just wrote, like, how do you get from here to here with little squares. Then that's a workflow diagram, right? It doesn't need to be more complicated than that. And then maybe the workflow diagram has some if the seller is qualified, do this. If they're not qualified, do this, right? And you just how do we get to lead is answered to appointment is set. Just map it out and it takes 30 minutes to map it out or if you're in a program the 1, I have, we already have some of these that you can swap in to your existing process, train your team on it. Really? That's all it is. Inputs and outputs and you don't have to have a super systemized, hyper systemized operation. It really just needs to be, you just need to have it dialed in for the things that create the most leverage, which is deal flow, which is the sales process itself, and then once you have that in, then you can get really good at team and scaling and. Actually starting replacing upgrade your dollar per hour, which is like freeing yourself of all the sub hundred dollar hour activities. And bring in on the right people like leads managers, executive assistants, disposal managers, transaction coordinators, things like that to keep you working on the business all the time and just running the machine. Now, when it comes to the software play in with the team. So software is a part of the process. It's not meant to replace team. So basically every department of your business is going to have a tool that serves as like the train tracks for your team to run on. So a CRM is a good example for, the lead manager. For instance, the CRM is like the train tracks for the leads managers, day to day operation. And the best CRMs will have the process. Baked into the CRM where the lead managers wake up, they open up their CRM and it just shows them what they're supposed to do at any given moment. The automation and everything else happens behind the scenes. So technology can serve as the guide rails to the process, but in terms of the execution itself, that's where team comes into play. Team is going to run the execution and create the result using the software as a way to minimize human error and to minimize the need for human input. Ideally. Yes. That's, how I think of it is just train tracks to execution.

Derek Clifford:

Yeah, no, it's a great way to put it because the way that I think about it is that you're giving these software tools to your team members to help augment what they do. Because in business, right? At least in the business that that, we're both in, you gotta find something that you're really good at and specialize in that one thing. And then hire out the pieces that other people are good at that, has a need in your business. And then that way, that one person is doing their talent, their skill, the thing that they like to do, and it's easy for them to do, and you're pretty much building. A dashboard around them or providing them with information to help them do their job better, right? You're allowing them to split test some certain things. If you need to, for instance, for, if it's sales, at least you're split testing. Or if it's lead generation, you're doing different copy, you're testing which platform to go on and you have the metrics in front of you so you can adjust and tweak. So you're providing information and allowing things to information to flow easier so that your team can do their job better. That's the way that's how I looked at it. And, I just came to that realization once listening to you talk. So I, appreciate it.

Dan Schwartz:

Yeah, exactly. It's like you have two ways of doing things. One way is you doing the task. So let's say it's you doing all the cold calling. So that's 1 reality is where you just do everything. You're using the tool. You're just doing all of the work to make the calls. You're logging all the results of the calls. You're updating the information, making the calls, updating the CRM, blah, blah, blah, blah. Okay. That's 1 reality. The other reality is in order for you to get out of that role, but still have it happen. You need 3 things. One, you need the actual documentation for how to do that thing. The step by step checklists, plus a process map that kind of shows how to do it. And that's it. With ai, you can actually create SOPs in 10 minutes now, and I did this the other day. I don't know what I've been, I don't know how, I didn't come up with this sooner, but this is all you have to do. You turn on the camera and record yourself. Doing the thing on Loom is the tool I use Loom. Then you upload that video into a tool called De Descrip and De Descrip creates a transcription. Of all the words that you said, and then you tell GPT, I want you to create a standard operating procedure that includes a purpose statement, the steps of execution, and a definition of done that summarizes the output using the following transcription from a video I shot, paste the transcription, click enter. There's your S. O. P. So that's step 1. So now I have a documented process for how I did that. It took me 15 minutes without having to do any extra work. I'm just doing the thing I'm already doing and I just turn the camera on. So that's easy. No added time. And then you have to have someone execute it. That's step 2 is hire the person to execute the documentation that you just provided. And then step 3 is the technology. So having the tools and the tools can be a script, the documentation itself, the software program itself, the KPI scorecard or whatever you're using the track it like all of the tools necessary to do it. So once you have those 3 things in place, you go from you doing it to you not doing it. And the thing will happen just as well or better than you were doing it before, which chances are you were doing it reactively and randomly and not consistently. And now that someone else is only doing that and they have it dialed in and tracked and measured and using software, now it can be done consistently and all you need to do is just coach that person to success. By comparing their performance week after week and see what the trends are in the outputs.

Derek Clifford:

Yep. And the idea would be that it's in a place where it's very easy for you to check those metrics and they can check the metrics. So the visibility is 100% crystal clear. Now, I love Descript. One thing I wanted to give as an alternate tool is you can use otter. ai, which we're using right now on this call. To record it provides so an, outline directly in the software interface, and then you can use that for chat GPT. But I love the fact that you can use your transcript from what you're talking about in Descript and then drop it into chat GPT. The, caveat that I would say with that particular workflow is that you need to have your whoever it is, it's stepping in for you to do that. They need to go in and quality check the, what chat GPT is because as of right now, it's not exactly perfect. And there's some things that may leave out or is vague. And so you do need that human element, but dude. 20% of the work will get you 80% of the effort, just like you said, exactly. That's exactly how we've been doing our SOPs over the last two years. And it's been a complete game changer. So a hundred percent, man, I love that. We're thinking on the same page here with that. All right. So what I want to talk about now is your, gift here is examining root cause issues. Can you help identify like in the 80, 20 Academy investor Academy and in just in conversations in general, what would you say is the most commonly occurring problem? That can be diagnosed and fix that comes up and no pressure here if you can't come up with anything, but I'm just curious, like what you keep seeing over and over again as a common root cause.

Dan Schwartz:

Yeah. So I'll go high level and then I'll zoom in yeah, 80, 20 is all about fractals where you zoom in and the, 20% of the 20% of the 20% high level. It's as simple as this, you're the founder of the business, yet you are also your own employee and. You are doing the lead management. You're doing the sales calls. You're updating the CRM. You're figuring out how to do the marketing. You're doing all the bookkeeping. You're doing the payroll. You're figuring out how to pull comps, run the leads, talk to the leads, follow up with the leads, figuring out the dispo, making hires, interviewing people, blah, blah, blah, blah, blah. You're doing every aspect of your business. I call this person brute force, Bob. And it's, the. Intuitive way that we as humans know how to execute something largely because we went to school and that's how they taught us to do things. It's just the attack and do the things and not really think about how to do things that might necessarily get us out of doing the things. And the crazy part is. Even if, this sounds like you if you're brute force, Bob, then exactly what I'm talking about. You're on this podcast because you're looking for more things to add to your plate, which is like the definition of insanity, right? So it's you're already juggling all these things, half assing everything yet. You're still logging on the webinars, signing up for things, thinking that like this, there's another shiny object, gold nugget. That's going to cure everything. And the problem is that's the problem, like that method of operating your business will not get you to the next level. It didn't get any successful person to that level. You can make a million dollars for sure. Just hustling your ass off and doing everything at a half ass level. However, if you want to become wealthy and you want to achieve the 3 degrees of freedom, you have to shift your identity from brute force Bob to 80 20 Adam or 80 20 Amy or the ladies listening. 8020 Adam has a completely different mindset to operating his business because instead of the tactic or the deal of the day being his obsession, the whole business is the product to him. You see your business as the product and you realize that if you don't start to hire people, then you're always going to be the one left holding the bag and you're always just going to be an employee of your own operation. Learning leverage and learning to think 8020 means that you're. You're constantly building systems for other people to do their job well. So that eventually you can just spend your time working on the business. And what that means is you get good at a different skill set from working in the business. You get good at hiring operators, building systems, root cause analysis and strategic thinking and networking. Those are like the on the business things and management and leadership. When you get really good at that, you've earned the right to then go above the business. Which is like even bigger thinking where it's instead of trying to figure out how to do a deal, a real estate deal, you're trying to figure out how to allocate capital and invest into existing operations of income. And that's like business investing and Warren Buffett. That's Warren Buffett. Yes. Works above the business. So that's the transformation.

Derek Clifford:

I was going to also say too, and then also finding the people when you're at this level, you're at a position where you're procuring talent to plug into your business as it scales. Because a company that. Has five people has different problems in a company. That's got even 10 or 20 people. It's just, that's just the way it is. Like you have to start having HR. You got to start filing different taxes. Now you're talking with different investors. And so each as you grow throughout the business. You as the individual generally, at least when you're starting out, have to do everything like you have to be the pioneer and all these new areas first. Yeah. Until you can eventually find your find a COO or something to start doing that for you. And then that's at the point where you can really start scaling. But let's be honest you and I are at this point right now where we have to at least do something in this new. Endeavor and then plug a talented person in to that spot or expand someone's role, to be able to cover that for us, if we want scale in that one area. And so I just love that. You talked about changing your mindset from going from an individual contributor to being someone who builds things right. And yeah, it's a workflow.

Dan Schwartz:

Exactly. You can't exactly, you have to build you can't just constantly just be putting out fires all day and expect that you're going to build stuff in between the fires.

Derek Clifford:

So good. Yeah. So, good. Okay. So let's talk about advice for creating teams. It's clear that you have a team. I remember when we first met, there was one of your team members that was also on the call with me, which is very, smart move. I love how you did that. And I may try to do that as well going forward. How do you advise people who are maybe looking for their first or second or third hire? Maybe they've got a virtual assistant and then you're looking to bring someone on as either a partner, a co owner, or maybe even a W2 employee. What advice do you have for people who are trying, they have established sales process and it's too much work for them to handle on their own and they need some help with vision and operations and stuff like that. What, advice do you have for people who are looking to build from that point forward?

Dan Schwartz:

Are we talking real estate investors or any entrepreneur? Yeah,

Derek Clifford:

I think let's try to touch on both. Maybe we'll start broad with entrepreneurs and then go to real estate.

Dan Schwartz:

Okay. So starting broad with entrepreneurs, you need to do a time audit. And we do this exercise called the freedom focuser. Which is you're just basically on a spreadsheet, logging all of the types of activities that you do, and then rating them on this scale between 1 and 4. 1 being, I hate doing this thing. It gives me no joy and I'm not good at it. 2 being, this is an obligation. I'm okay at it, but I don't enjoy it. 3, I actually like doing this. But I don't love it. I like doing it. I don't love it. That's just like work. And then for I absolutely love doing this. This gives me energy. I want to do more of this and it has high leverage and impact and you rate and then basically what you're doing is. What is the task that takes up the most of your time that is a 3 and then you're sorting by how much time being the 1 that has the most time consumption is the 1 that you're going to outsource 1st. You just figure out of that laundry list of things that you're doing as brute force Bob, what are the things that you don't enjoy doing that take up the most time that becomes your job role for who you're going to hire. Now there's a mindset with hiring that you need to understand and it's that don't throw people at a problem expecting it to solve the problem. That's the 1st thing. The 2nd thing is that there are people out there that love doing the stuff that you hate. It's, the ultimate gift of humanity, the fact that humans can compliment each other and build things and, execute things on a very wide scope of personality differences. And the thing that you actually hate to do that takes up all your time, someone else can do it 6 times better and it fuels them and it gives them energy and it, serves their ideal life. And so understanding that truth. We'll set you free because then you can just go and bring that person into your world and give them an opportunity to do what they love. And so it's a mindset thing. If you've hired someone before, and it didn't work out. Don't use that as. As an excuse not to do it again in the future, because there's a right way to hire someone, there's a right way to train someone and the right way to manage someone. And I think when you hire that 1st person, let's say it's a VA that's doing some admin stuff that you're not good at tracking stuff or data input typically are things that entrepreneurs don't like to do then what you want to do is instead of. What I call transactional leadership, you want to focus on transformational leadership. And this is another mindset thing is you don't need to be Steve jobs to hire someone. You don't need to be some charismatic leader personality type. You can be dorky, nerdy, behind the scenes, computer analytical person and still be a great leader just being yourself and how you do that is you don't lead from charisma. Of course, it helps to have a little bit of charisma, but you lead. Through what I call transformational leadership. So transactional leadership is you just don't you just give people a task to do and then you check to see if they did it. And then if they did it wrong you yell at them. And if they did it you say, great, here's the next thing. Just transactional do this. I'll check and then based on if they did it right or wrong, we'll decide what's next. That's micromanagement. That will take you down a path of sorrow and despair.

Derek Clifford:

No one wants to do that. Think, put yourself in your assistant's shoes. That's yeah, I know where you're going with this, but yeah, please keep going. That's amazing.

Dan Schwartz:

Yeah. It's really important because it. I wish someone told me this from the get go with a little bit of extra effort, you can get the most out of. Other people and they'll actually enjoy it and it's just through shifting the style from transactional to transformational, which is as simple as getting really clear on the outcome that this person is to deliver getting super clear on the outcome means that there is a very clear end result that this person is responsible for. They know where in the organization that they fit. They know how their impact is felt. They know what happens right before they're involved. They know what happens right after they're involved and they're very clear on what their job role is. They have all the tools to support them. That's step 1 to be a transpirational leader. Step 2 is that you're actually measuring their work. And this is something that you can't just lead from intuition. You have to lead through metrics. And this is like an 80, 20 Adam, like brute force. Bob will just execute willy nilly and 80, 20 Adam will execute by the numbers. Everything you do, even like they even like an executive assistant has numbers, like, how many emails do I have in my inbox? Every morning is something that we track and she's in charge of making sure that it's as minimal as possible. How many projects have been completed this week? Everything has a number, especially with the real estate business. Like how many leads came in? How many were qualified? How many offers did you make? How many got accepted? Boom. They're your main KPIs right there. And you, and so, the last point though, is to coach people to success by tracking their number. How do you coach people? You ask them questions. You don't ask them, why didn't you hit that number? You ask them, what is your process for doing this right now? Let's dig in and see if we can make it better. Instead of why didn't you hit that number? It's what were you what is your thought process in designing this process to get to this point? And you ask questions on these weekly calls where you're looking at your numbers and maybe you're hitting your numbers three weeks in a row. Maybe you've got to raise your targets a little bit in that case. Or we're way off the mark 3 weeks in a row, in which case we got to dig in and work coach them to fix that and use their muscles to zoom in and fix the process and get an edge. Instead of giving up and going to some other strategy, you're coaching them just to look at the numbers and just to get better at the thing that will produce the result. That's a completely different style of leadership. And that's the one that's going to make you really, wealthy. And I would train your team how to think that way too, when they start to hire people. I could go off and on for another hour on this topic, but it's important.

Derek Clifford:

Yeah, no, this is great. And I think the one point that I want to make, you just went in and covered it, is that I think by allowing the people that are working with you. And I hate to say working for you because usually you're working with someone. That's, the way I think about it.

Dan Schwartz:

Totally. Totally. I never feel like a boss.

Derek Clifford:

Exactly. Same here. I think what we're doing is we're trying to work together as a venture and we have a common goal of achieving our objectives and you as a You know what the business's purpose and vision is. And that's why we're working together as a team. So there's that mindset there too. I think that the other pieces and you touched on this is that you should empower the people that are working with you to solve problems, right? That gives accountability. It makes their work interesting because if you give them a whole bunch of manual entry, right? And you tell them, I want it done this way. And they're basically just manually entering things. What if You gave them the ability to make this permit, to make this faster and easier. And they found a way to do it with a macro in Google sheets or in Excel, right? Or they found a software that's 5 a month or something that will help make their position. If they're paying them seven or 8 an hour, right? That will help leverage their time. So that instead of spending seven or 8 an hour, you're spending 5 a month. To help make, to help reduce the time they spend by half or more than that. That's the idea, right? Is that empowering so that you give the accountability to you, the people you're working with the solution and the accountability are all together as a team when you think that way. So I just love it, man. I love what you're saying.

Dan Schwartz:

But what happens though, when you're the leader and you're constantly jumping in. To do this stuff instead because, the other people are doing it wrong. What do you think that does for your team morale? Oh, yeah. The morale is terrible. Yeah. They're going to, they're going to think, first of all, they're going to think that, one, you don't trust them to execute it. Two, they're going to always rely on you to come in and jump in and execute it, which kind of defeats the purpose of them being on your team to begin with. And three, it's going to always belittle everybody else in your team. Because they're never going to be able to execute as well as you that's not true. Sorry. They will be able to execute as well as you, but not if you don't give them enough rope to actually do it. Sure. And so there's this concept called an accidental diminisher. From this book, the multipliers, which is a really good book. I highly recommend it. For instance, if you are like the rescuer, there's six types of accidental diminishers. You like are always trying to go in and create guardrails for people. So, they don't make mistakes. Then they're going to become dependent on you which will weaken them. Yeah. And then there's like the idea guy, the entrepreneur that's constantly coming up with new ideas, thick stuff and like all this stuff. You're going to overwhelm your team who will either shut down or spend, more time chasing the new idea than they were completing the old idea. And so there's all these intentioned things that managers will do that actually hurt their team and diminish what is possible and like really just. Allowing them to make mistakes and coaching them on not making mistakes again in the future is much better way to do it. I actually I failed to mention that I went on a two month sabbatical last year after I got married.

Derek Clifford:

Heck yeah, man. That's awesome. First of all, congratulations on your nuptials. But yeah that's, great, man, because that's exactly what happened with Tim Ferriss. It's Bible number one for me. It's he's, when he went to England or something and he thought his business would fall apart, it actually thrived. And so I just love that you took, some time away. Now Dan, dude, we could go on for forever and I wish that we could, because it seems like we have so much in common and I really want to continue this conversation outside of the podcast. But what I want to do now is I want to head into the final part of our show, which is the rapid round. It's the same six questions that we ask every one of our guests. And they're meant to be answered in quick succession. So about less than 30 seconds each. So if you're ready, let's go ahead and do that. Are you ready?

Dan Schwartz:

Sweet. Yep. I didn't prepare. So let's do this.

Derek Clifford:

No that's, that always makes for the best ones. Number one, name any resource that was, or is essential in your journey to pursue your three degrees of freedom. I love the thoughtfulness here.

Dan Schwartz:

Yeah. I keep thinking Who Not How, the book.

Derek Clifford:

Amazing book, everything that Dan Sullivan writes is incredible. But I know exactly, why you're saying that. Also the freedom multipliers exercise that you talked about, like putting your, stuff putting how you want to spend your time. I saw that with another group that my wife is a part of, and I'm, getting, I'm having, I'm getting the feeling that it's out there also which is really, cool too, but probably not yeah. Amazing. Yeah. All right. Number two, if you woke up and your entire business was gone. And you only had 500, a laptop, a place to live, and some food. What would you do first to rebuild?

Dan Schwartz:

Oh, man, that's all you need, dude. Man, I would get on Facebook and I would make a post saying there's two ways to run your business. You can do it the way that you're doing it now, that's not working really well. And there's another way involves thinking in a leveraged way where you're building an operation around other people and the ideal lifestyle that you want. I can give you the tools to do that, but it's going to take some effort and investment. Type below if you want, to have a conversation and then I would figure out, I would get on these calls and I would like, really work with these people to build a plan for how they can create the income and the freedom that they want with their business, whether it's investing or whatever they're doing. And then I would pitch them. Hey maybe if you haven't worked with anybody before, then you can say, hey, let me work with you. Just pay me like 3 K down or whatever it is. And then a percentage of the performance. If I help you get another 20 K a month or something, I want X percentage of that and I'll go all in and I'll help you. And I'll just figure out how to help that person. That's how I would do it. I would have conversations, figure out how people need help and I would use your skills to help them problem solve and, get what they want. Sometimes people just need a third party to talk to about their business. Cause a lot of people are feel like they're they're suffering in silence, give someone an opportunity to not do that.

Derek Clifford:

There's a real power in listening. And I just love that your response is basically do leverage your talent, what you have and get it out there and find a creative way to solve a problem for other people.

Dan Schwartz:

And if you don't have it, if you don't have a talent, then exactly. I'll find a creative way and be honest about that and say, Hey, I've never done PPC before. I promise you that I'll get, you don't have to pay me unless I get work done. And I actually create results for you. It's a great way to do it. Brilliant. Work for free performance based, that's how you will make money. And I didn't even spend 500 to do that. That's just my food money.

Derek Clifford:

Amazing. Number three, what does your self reflection and goal setting practice look like?

Dan Schwartz:

Yeah. So I set goals based on lifestyle. I very rarely make income goals personally. I do make them in my business, but it's more so what is the ideal lifestyle vision? For my wife and I, and then I reverse engineer based on that. For instance, if my, if I want to spend all my day on the beach, then I won't have a business that requires me to be on zoom by sitting by my desk all day. But I don't really want to be on the beach all day because sand is annoying, but I do like to have conversations with people and yeah, no, of course.

Derek Clifford:

I, all I got to say is that sitting by the beach gets old cause I've done that.

Dan Schwartz:

Yeah. I've actually tried to work with my laptop on the beach. It is not as cool as the pictures.

Derek Clifford:

It doesn't work. Yeah, absolutely. Reading a book though, or listening to an audio book. Yeah that's, awesome. Anyway, exactly. All right. Number four, what are the core work habits you have that you attribute mostly to your success nowadays?

Dan Schwartz:

Work habits. I know that I am, I inherently will do whatever is on my calendar. My best work habit is to put my priorities on my calendar first for the week and everything else will work around that. If I got it, if I want to. There's a quote that's show me your calendar and you'll show me your priorities. If you say you want to work out, show me your calendar. You have to be intentional about this stuff. If you want to spend more time with another, put the date night on the calendar. And so I think living and dying based on my calendar and it's people want to book in time with me. It's going to be in between the, my priorities. It's not going to supersede my priorities. It's called the ideal week, right? Put down what are all the ingredients for an ideal week, bake it into your calendar and then use a tool like Calendly that will read your available slots. And So that other people can book in, between your priorities and not hijack your week and your priorities.

Derek Clifford:

Yeah. It's huge, man. I love it. All right. Number five, what books or book do you recommend for people to jumpstart their success? I think we already touched on that in number one, but maybe you want to mention another one.

Dan Schwartz:

Yeah, who not how hundred million dollar offers Alex or Mosey is another really good ones about creating offers and creating a, sales process that like, we'll get people to pay you a lot of money and premium pricing, I think is important. Don't try to. Try to sell stuff for, cheap. Figure out how you can sell stuff for the most because you'll have better clients. Yes. And it'll be faster for you. More commit more

Derek Clifford:

commitment as well. Like higher quality. Yeah. People who are more committed. Love it.

Dan Schwartz:

Alright, last question and this and that also speaks to like hiring. Don't skimp on paying people. Pay people as much as you can.'cause you're gonna attract amazing talent. And if you can see the r o I in that talent. A salesperson will make you 2, 000, 000 extra, so it might be worth it to pay them 250, 000, right? It's a very easy trade off. Best investments you can make.

Derek Clifford:

Last question I have for you today. What tool or process has become one of your most important time, money, or energy saving ninja magic tricks that you use every day?

Dan Schwartz:

So I use a tool called newsfeed eradicator on Facebook that blocks the newsfeed. So I don't have to go into that vortex. I highly recommend it. It's a Chrome extension and it replaces your newsfeed with a motivational quote.

Derek Clifford:

Dude, that's awesome. Love it. Love it. All right. Hey, Dan, this has been incredible. And we're at the top of the hour here. And I just want to thank you for all of your incredible advice. And I know that there's, maybe something going to happen later on, hopefully a collaboration or something, because Man, we think a lot alike and I just love the way that you're looking at things. And I think in many ways, you're a couple of steps ahead of me myself as well. And so I just admire everything that you bring to the table and for people who want to learn more about you how can they find out about what you got going on and what do you want to, what do you want to share with the audience?

Dan Schwartz:

Yeah, so I run a program called the 80/20 Investor Academy. We show you how to create a scalable real estate acquisitions engine that can ultimately function without you. So if that's interesting to you, then go to join8020.Com and we can just dig in and really if you work with us or not. At least I can get you some focus and clarity to see what your next step is going to be. And I have a free group as well called scaling real estate investors. We do weekly live trainings for free myself and my, head coach, Eric B who is an absolute rockstar when it comes to getting deals closed. Just go to ScalingREI.Com to join the free Facebook group. And if you want to chat with me, it's join Join8020.Com.

Derek Clifford:

Awesome. Dan, thank you so much for coming on the show today. This has been an amazing podcast and I'm pretty sure that the audience has at least taken a page of notes from you and your wisdom here. I love it.

Dan Schwartz:

I hope you implement it. Just I know the habit to do everything yourself is very strong, but the, habit. Is something that you can fix and you can hijack and you can create a better habit towards systemization and leverage.

Derek Clifford:

Yes, a hundred percent. So listeners, thank you guys for listening all the way to the end of the podcast. Please, wherever you're watching or listening to this, please like subscribe, comment. We really appreciate the engagement because then it helps. Get amazing people like Dan coming on the show and attract amazing people like you as listeners to come in and listen and be able to take action on all this incredible content. So Dan, thank you again for coming on the show, dude. It was a pleasure.

Dan Schwartz:

Thank you, Derek. And keep it up. I love this podcast.

Derek Clifford:

Amazing. Thank you so much. Have a great day, everyone. We'll see you next week.