Guest Podcast 1: Phuong and Jay Diaries – Benefit From Debt Not Lose From It

Guest Podcast 1: Phuong and Jay Diaries – Benefit From Debt Not Lose From It

In this episode of Business Diaries of Phuong and Jay, Victor Lagos, founder of Lagos Financial, share my journey of starting a finance brokerage during the post-COVID era. He discussed the challenges he faced launching a business with significant debt and how investing in himself was crucial to his success.

Victor delve into the mindset required for entrepreneurial growth, highlighting the importance of staying resilient and focused. Additionally, he explore the pros and cons of investing in property versus business, emphasising the need for a balanced approach to financial growth.

Tune in to hear his insights on overcoming financial hurdles, building a sustainable business model, and making informed investment decisions. Gain valuable knowledge from my experiences and learn how to navigate the complexities of starting and growing a business in today’s world.

0:00 on this week's episode of the business Diaries of Fong and Jay we'll be talking about starting a business in 2022 post 0:06 covert how getting into a large amount of debt actually helped me and where should I invest my money property or 0:12 business Q music Jerome [Music] 0:24 and we have we have the Radio Star right here with this loud voice I mean I I 0:30 aced that intro right that's pretty good well guys today we have a special guest 0:36 joining us on the show he is a residential and Commercial Finance broker who started his business mid-2022 0:42 started working in financial services since he was 19 prior to the GFC being a 0:48 mortgage broker for eight years now and now owned Lagos Financial welcome Victor 0:54 Lagos thanks guys how you doing man I'm good good enjoy all right 1:00 I must be on my a game today I did not mess it up once usually have a couple of tanks and all that but um yeah man 1:06 welcome um for my understanding this is your first podcast it is actually no sorry I 1:13 have been on a podcast before oh yeah yes yeah a buyer's agent interviewed me it wasn't quite as structured as this 1:18 there was a big camera in my face yeah and I had a lapel okay it was uh it was recorded and it was up on YouTube all 1:25 right well that's cool but this one's cool I like this structure better man we try to try to pull out all the big guns for you mate usually it's not like this 1:31 man just like fed today just because you're on the show you know we're like why not why not thanks guys yeah but 1:36 anyways we need to make it look good for people right yeah yeah um Victor I know I just uh introduced you just now but 1:42 can you want to give us a little bit intro about yourself about your business a little plug Shameless plug sure yeah look I only just started in 1:49 July this year Lagos Financial my name is Victor Lagos I've obviously just taken my name I really just wanted to be 1:55 a representation of me at the end of the day like you have a business name but The Branding should represent person 2:00 that you are I'm the face of the business I am going to grow it uh but that's kind of the basis of it but look 2:07 I'm residential and Commercial a lot of residential mortgage brokers don't know how to do commercial 2:13 I do I spent the last couple of years learning it I got my diploma in commercial lending I joined the 2:18 commercial asset Finance Brokers Association so I've got that plus the finance broker Association so two of them I go to a lot of professional 2:25 development I joined another mentoring course so I really put myself out there to to understand commercial lending so I 2:31 can help business owners right consumer lending car loans and mortgages it's usually just for you know mum and dads 2:37 and yep you know I like how I like how you said that with so much convictions like yeah I do I do it too you know well 2:44 he works with um a um another guest that we've I guess done a podcast for before 2:49 and short for him too um Steve police see a pretty big commercial buyers agent 2:54 in Australia I guess um so from my understanding you do a lot of business with him too so if you're listening to his podcast and you're 3:00 looking to get a loan for a commercial property Victor's your guy 3:06 um but yeah let's get straight into a film Yeah man so I just wanted to understand a little bit about your your business like what was what was it like 3:12 getting away from the 905 and whatnot yeah so I've actually been as a as you mentioned 3:18 Jay said I've been a broker for about eight years yep I initially started my broking business so when I first started 3:24 as I broke I was working for a company so I was payg plus I was able to earn commission and that was for about seven 3:31 eight months in 2014 working for a property group and then I started my own business on my own in 2016. so I already 3:39 had that exposure to what what it is like to do it on my own so was it in conjunction with the the payg business 3:45 like at the time though it was I went all in but I borrowed money to start it off so I took a startup business loan 3:51 from ANZ bank and I had no idea what I was doing I Winged It I invested into 3:57 courses I wanted someone to just tell me what to do and I learned a lot but I spent a lot and what I didn't realize at 4:05 the time is that the most important thing is to have clients coming through the door what do you mean yeah 4:12 I think that would help mate I know do you think that we're always thinking at the time I had a really nice website 4:18 yeah you know a little professional videos what were you thinking if it wasn't if you didn't need clients look 4:23 it's not that I didn't think I needed clients I just thought that if I had a nice brand out there that clients would 4:29 come to me right it does it does help though but like uh at the end of the day I reckon that the the business 4:35 relationship between the client and yourself would help right well that's what I did this time around I flipped it 4:40 I don't even have a website yet right so you went customer client first and then the stuff comes after okay correct yeah 4:45 and also I'm self-funding this time whereas previously I funded it from a bank loan right and the problem is that 4:51 because you have to pay interest and you have to pay it back yeah but I didn't have the revenue to pay it back right okay what do I do 4:58 um I mean sorry before you go like I do like one thing that you did correctly that I think is is a great way to to 5:04 start off a business is to invest in yourself so the way that the the thing that you did by getting a lot of courses 5:09 mentorships and all that stuff is uh it's great tell me a little bit about that so there's a 5:16 there's a company called the Entourage a guy named Jack delosa started that business still going to to this day I 5:23 signed up for a program there and I was around entrepreneurs and business owners and it was really great I learned a lot 5:28 about the fundamentals you know about you know creating a sales funnel or a marketing funnel but it was they teach 5:36 you what you need to do but not how to do it and the how-to is always the most difficult piece because if you're not 5:41 technical minded if you don't have the time to invest very busy trying to do everything else and you're trying to learn a new skill and then especially 5:48 not in your exact field like because obviously my field is finance right I'm broken I don't know how to build sales 5:54 funnels online and do Facebook marketing but I learned what needed to be done so 5:59 then fast forward I ended up shutting that business down and I joined another 6:04 mortgage broking business I worked there for four and a half years in the last 12 months of working with them 6:11 I actually started running Facebook ads under my own brand Victor Lagos 6:17 commercial Finance broker so it wasn't a conflict of interest I wasn't trying to set up a separate brand it was just me 6:23 right I was representing me I pulled myself out it's like a real estate agent right they might work for Ray White or 6:29 whatever but it's their name their brand their face that goes out to them once you're doing the same thing with their 6:34 as in like you're still doing mortgage broker yeah broken right correct but commercial so the mortgage brokers 6:40 working with only residential oh okay and I and I sort of said you know what I want to actually start learning 6:45 commercial and I asked them for support so my plan was to partner with them and say look that's instead of me being a 6:51 you know employee and you mentioned poig I sat down with the boss and I said look 6:57 I know you know things have been going well and you want to you know you said to me give me a pay rise I said I don't 7:03 want your pay rise I don't want the pay rise what I prefer is a bigger chunk of commission for the deals that I bring in 7:09 so that I can invest in growing this commercial arm because I know that you need to put your money where your mouth 7:16 is correct because if you don't do the work you don't get paid so that's it but look um you touched up on two important 7:21 things that I believe you definitely need um being an entrepreneur on your own business right 7:27 um the number one is early you spoke about um a financial you touch up on financial 7:34 Acumen so basically your knowledge of finance and understanding that without Finance or without proper control of 7:40 your finances and your business you're you're going to be spending more than you make and number two is 7:46 um the it's like knowing that business in general the all this um all the different attributes of a 7:53 good business owner are um is is that like business in general is a skill 7:58 right it's not like you said yourself you know you came from a finance background you didn't know the business side of things and you had to learn all 8:03 that and I do think that's something that um a lot of people don't understand is that they think they're just going to open a business and that's it right 8:09 they're going to be successful because they're expecting what they do it's not the case business owning or or starting 8:14 up your business understanding the system understanding where to find knowledge all the how to's stuff that's a skill in its own right so you've got 8:20 to be you got to be pretty um Savvy with where you find information how you implement down to your business 8:25 yep correct correct um but yeah I think I think what people usually tend to think when they they're doing they've 8:32 worked for many years in a particular field they've done the job they're really good at it right and they they believe that because they know the work 8:38 they can go out on their own and open a business and be very successful at it but unfortunately like Jay said there's 8:45 no other skill set that you need to learn to be able to to grow that that business it's funny you say that because 8:50 that's the thing that I identified so when I when I realized that I need to be I want to be a commercial broker my 8:57 background was always residential I said what do I need to do what skills do I need to acquire and one of those was I 9:03 need to learn commercial lending right so I invested into a course well actually I asked my previous employer they paid for it but I invested the time 9:10 there's like classifies conflict of interest no no because I was bringing the business in to their brand right 9:16 that we were splitting the commission yeah so they were getting paid right okay but that wasn't my predominant role that was kind of secondary my 9:22 predominant role was to serve their clients um that's what I was getting paid a salary for but the commission 9:27 that I was earning from my own deals were the residential or commercial I would reinvest that into marketing so 9:33 that was the second skill I needed to correct to acquire which was the skill of customer acquisition right that's 9:39 marketing and sales right um so then I those two worked hand in hand yeah learn how to do commercial 9:45 lending and learn how to Market and and and and sell out of curiosity what do you think is the number one skill set a 9:52 entrepreneur or a striving this owner has to have mindset the mindset by fire 9:59 really yeah because if you don't have the right mindset it's very easy to get overwhelmed by mindset what do you mean 10:04 so things get are challenging when you when you start a business you have to wear every single hat and you have to chop 10:11 and change regularly and if you're if you don't have the right attitude then 10:17 it's very easy to be overwhelmed give up and not bring your best self when you talk to your customers or your other 10:24 stakeholders or you know it's funny though like the mindset thing is such a cliche though like people don't get it like people who haven't gone through it 10:30 think of my it depends on what what angle you look 10:37 at it yeah but I get it like there's a book called mindset which talks about a fixed mindset versus a growth mindset 10:42 and in simple terms fixed I mean just stuck in your ways yep and growth means you're looking at different ways outside 10:49 the box for me I I enter that a little bit different considering what the attribute or skill set I find that 10:54 that's most would help you in terms of being most successful as possible is definitely sells for me my sales and 11:02 marketing obviously um because I do believe that sales in general is the life lifeblood of any business right if you're not able to 11:08 bring in any new clients like you said earlier you didn't you won't focus on oh you didn't understand it you had to 11:13 bring business earlier I think there's a balance there man like I I wouldn't say like sales is the the the foremost most 11:20 important things it is one of the the top top what's called actually over business but you obviously need the 11:25 people behind it to do the work as well so yeah sales is to bring the business but if you if you're selling something 11:31 and there's not a substances behind it it's kind of hard to to for people oh no I get that but I'm just saying um and I 11:38 think that's why a lot of companies in general value their sales team so much is because without them there's no 11:43 business coming in and without your business coming there's no business in general but see I think there's people out there that are big Visionaries 11:49 correct um entrepreneur are hard but they're not actually good sales people yeah and I think what they do is they identify 11:55 who's a good salesperson correct and they bring them into that right and that touches up on like what you've always said like without the business itself it 12:03 it relies on teammates not just saying yeah for you for you you're a one-man better at the moment I've got one 12:09 support staff at the moment in terms of uh scaling or growing a business what's in like what's the next recruit you're 12:15 looking at another salesperson or not yet yeah can I can I rephrase that question in another way though like it's 12:21 to me listen to the story that you've actually told us up until now it's I get the sense that you're very self-aware 12:27 you are yeah so you understand your strength and your weakness so just uh piggybacking on Jay's question what sort 12:33 of weaknesses do you have at the moment that you want to fill in for your business yeah that's a good question so 12:40 marketing is definitely something that I'm not um abreast to what what's going on yeah 12:45 I know it's an ever-changing environment whether it's Google or Facebook uh LinkedIn 12:51 and 12:57 um rather than hiring someone up front you know saying you want to be my full-time marketing manager pay my you 13:04 know salary and get him to do everything I think it's important to work with businesses like you guys because you can Outsource a lot of it and you just do 13:12 this day in Day Out I'm not trying you're not trying to do everything for everyone in marketing right so and that's that's something 13:19 there's pros and cons like I'm not trying to like um say that we're not um efficient or successful in driving 13:27 traffic to your business but I think there's a pros and cons in terms of saying in-house versus agency which is better we have we've had this 13:33 conversation with another marketing expert too and he says that um in terms of 13:39 um in-house what you get is you get um more uh I guess dedication to the 13:45 business I've considering that's all they do they now they invested in just that business right opposed to other 13:50 agencies you've got them focusing on you know five six other accounts as well so it really depends on where 13:57 um what you value more um and what works for you more really right I I truly believe that the 14:02 majority is still out on in this particular aspect anyway so yeah I mean if you found on the size of the business 14:09 I'm just a startup right so for me to invest a lot of money in hiring a 14:14 full-time race in Australia yeah that's going to eat into a lot of my 100 correct pros and cons of everything I 14:19 guess right um so look and one more question before we move on to the next topic is 14:24 um mindset men what did you have um any mind blocks or roadblocks got coming uh 14:30 into your business um one that we find that a lot of entrepreneurs or startups have is that they say you know everyone's doing it 14:36 um so it won't work or the Market's saturated with that service I won't do it is that something you went through 14:41 I get it I mean in my in my field specifically the mortgage broking side there's about 18 000 Brokers no too many 14:49 it's a lot around Australia around Australia yeah and anyone you talk to probably has dealt with a mortgage 14:55 broker before yeah so how do you compete with that and so I get it for someone entering the industry now 15:02 what's your point of difference right what about the number of lenders that are out there for for mortgage brokers 15:08 to look into oh yeah there's a lot I've got like 30 just on residential another maybe 20 for commercial so there's 15:14 enough to go around inside when you say oh yeah there's plenty of lender that's not that's there's abundance of money out there that you know from lenders 15:20 that are willing to lend the money to people but you've got to understand their policies their appetite like in terms of what type of customers they 15:26 want to acquire you know their um their niches they call it so it's hard to juggle that then that's just the 15:32 technical aspect right and then we talked about you know getting the customers if you're new to Industry 15:37 and you have to go out and find customers and you have to tell them and demonstrate to them that they're a 15:44 better Broker Than the guy they've spoke to before and if you're new like how how do you compete with that for me I've got 15:50 a point of difference I've been in the industry since I was 19. I'm 35 now nearly 36. I've worked inside the 15:57 financial institutions work for a big bank I used to approve Home Loans so I 16:02 was the one saying yes or no so now I know what to present to Banks because I just present what I used to 16:08 want to be presented to correct yeah do you find it harder than being a new business that you know your brain is not 16:13 totally out there you find it hard to get clients at the moment or is it to be honest I'm quite blessed because uh 16:19 before I started the business as I mentioned to you guys earlier I was running Facebook ads that's how I 16:25 reached out and connected with Steve police the buyer's agent he saw my ads and it's like I like what you're doing yeah he's not my number one referral 16:32 partner yeah well also I left on good terms with my previous employer because I I helped them grow their business and 16:38 we learn a lot from one each other we helped each other a lot and then my number two uh referral partner so 16:44 they're referring me all the commercial clients right and then you just pay them a referral fee or whatever yeah and that's um the things a lot of people 16:50 don't realize too is relationship yeah man just your your um networking is so important as a as a business in general 16:56 because joint ventures partners are real that's a real thing right they give you a lot of business if you're partnering 17:01 up with people who lack a certain aspect in their business to drive the sale across for example it buys agency in a 17:07 mortgage broker right they complement each other really well so you really got to find those those networks where they 17:13 they'd be giving you must sort of work say that that means you don't have to work so hard to find uh leads right 17:18 because they're feeding you something at the same time as you're doing it obviously yeah exactly and for us uh 17:24 similar to you with your buys Agency for mortgage broker we've got marketing uh Partners who Feed Us leads for 17:30 production because that's what we focus on right yeah perfect what uh sorry um I'm interested because you say you're 17:37 still in great contact with your your previous employer yeah and that was basically in the last nine to five right 17:42 yeah sorry so I think this is a question that people don't really dwell upon it's like how do you how did you transition 17:49 from that to your own business and how did you maintain that relationship yeah 17:54 so in other words like how did you quit yeah well it started when I planted the seed like I mentioned where I said I 18:00 don't want the pay rise yeah I want to get a higher commission and I want to invest in this and I want to partner with you guys in the future yeah and 18:06 grow the commercial lamb of the residential business so you guys are residential I'll do the commercial and they said yes so that was a good win for 18:13 me so that's the trajectory that I was on and there was no hesitation he was like okay I'm not going to pay you 18:18 higher but I'm gonna get well I mean they they recognize that I was you know bringing yeah I was ambitious and I was 18:25 actually helping their business uh quite a lot and I had that that ability and and I was driven right but what happened 18:32 was we were leading towards that agreement and it just kind of made more sense to do it on my own because they 18:39 were already getting quite a lot of um momentum doing what they were doing and if I then sort of latched on and 18:48 said I'm going to do the commercial side then I needed to have support but the 18:53 support they had was built around their residential business not around commercial right so it was like well 18:59 rather than I guess sharing the the profits and then having to reinvest that 19:04 to grow my business within their business let's let's do it on my own right and 19:09 that took that took a bit of Courage right because I can imagine the feeling that you were sad when you've gone up to your bus okay all right I'm doing this 19:16 on my own now like they were upset actually they were upset because you know they invested that time and 19:22 obviously they pay for my course and they were like you know we thought you wanted to work with us and I was like 19:27 well well you do I do you still and then that's the thing it because we we established that relationship 19:33 um and that trust they said well why don't we just keep working with you for 19:39 the commercial deals like the original agreement right but I just I can still have my own business which I do and 19:45 every time they have a commercial inquiry it comes to me so nothing's changed not really well yeah I mean I don't go 19:51 to the team meetings anymore I'm not under the brand no but then in terms of the the uh client flow and everything 19:56 nothing's changed they're still getting the commission you're still getting your commission yeah and then nothing's changed what's a win-win for them is 20:02 that they when I operate when they send me a referral it's not like a regular referral where I present as Lagos 20:09 Financial I operate under their brand a white label kind of like Whitely yeah I still get access to my old emails yeah 20:14 correct yeah like I said man um joint venture partner is so important in any 20:19 industry like I feel like people are a lot more open about it correct businesses are more a lot more open about like creating relationship as 20:25 opposed to burning positions and competing with each other instead you know yeah exactly yeah and there's a lot of business out there like it's a two trillion dollar industry in residential 20:32 yeah and then there's more in the commercial as well yeah yeah you know so two trillion dollars yeah it's big wow 20:37 that's big money and freaking property is a big industry yeah even if you get one percent of that that'd be great I 20:43 think I think residential property is about 10 trillion wow dude that isn't that's insane all right I think I guess 20:49 uh we'll be moving on to the next topic this is the one you want to hit up film yes so I did read that you had a little 20:55 a bit of a personal running with debts right so how did you become someone who 21:00 is in debt to now someone giving out that yeah it's funny it's true I make money from 21:09 selling debt essentially well I sell customers to debt providers yeah because that's what I at the end of the day I've 21:15 got to present customers to say why is this a person that this bank or this lender should give money to yeah so I 21:20 got to sell them and then ultimately there I love it because it's a win-win-win scenario yeah they they want the debt they've gone objective and they 21:27 don't care about the debt they want the objective whether it's property yeah or buy business or what no that's true they want the objective and not they actually 21:33 they don't really think about that so what's about solution man not about the process always yeah so my I have a 21:38 tagline and that tagline is I will teach you what the banks want and that's how you can benefit from debt and not lose 21:44 from it yeah right and that's come from my own experiences and and uh you know 21:49 to answer your question from you know when I was 18 I when I was working full-time at Coles at the time and I 21:55 went to St George bank and they gave me you know eighteen thousand dollars no sorry twelve thousand dollars straight 22:01 off the bat um no questions asked personal loan I used it to buy a car my second car actually 22:07 and the first car bought cash was a thousand dollars eighteen and making 22:13 dumb decisions already I love it but but even before that um you know to share a personal story 22:20 like my mom is actually a Filipino background and a lot of Filipinos have 22:25 got issues with credit card debt and it's not because they're they're bad with money it's because they always 22:30 intend to pay back later right so they'll look after their family and they'll have the intention to pay it 22:36 back and that's fine but credit cards allow you to spend more than you earn and that's where you're in you you end 22:42 up in a um in a trap and if you can't pay back your debt your credit cards and 22:47 clear it in full then you carry that over and then you have to pay interest on that and if you're paying the minimum 22:52 you're paying interest on interest so the compounding effect works against you that's why they you know laws changed 22:58 and at the beginning at the bottom of credit card statements it actually says if you pay the minimum it will take you 20 years to pay off it actually says 23:05 estimated term that's that's new never used to say that because you just say I've got a bill 150 all right I'll pay 23:11 it but if you just pay that and you're paying say 20 interest rate or more it'll take you fifteen twenty twenty 23:17 percent interest rates credit cards are expensive man oh yes yeah that's right yeah you're right okay cool so um and I 23:23 just you know I got into the finance game when I was 19 and then so my income went up and then I was able to get more 23:30 credit cards because you know why not banks are happy to give you credit cards and I don't know it's weird because I 23:35 kind of had this feeling like it was a bit of like a trophy so I had like five credit cards I'm like yeah look at this 23:41 you know but I was intelligent too like I never I was never late on payment and 23:46 I used to do what's called balance transfers all right so I would actually like get one card to pay out the other but does it pay less interest but 23:52 doesn't that incur interest on itself because that's basically called a cash advance 23:57 transfer that balance transfer is like I think that's when correct me if I'm wrong that's what banks want you to 24:03 basically take your business to take on your debt so that they can get their interest from you right so that's why they allow you to do it's like a 24:09 refinance or a debt consolidation that's still a thing like can you still do that yeah so say you've got 20 grand owing on 24:15 your credit card and you're paying 20 interest rate because you're not you weren't able to clear the balance because it's too much yeah 20 grand you 24:21 can clear that one hit so then instead of paying it off in like say 20 years by paying the minimum you 24:28 go to another credit card provider and you they offer you at say a zero percent or a two percent interest rate for a 24:34 balance transfer so you apply for a 20 000 credit card and they then pay out that other card directly so that that 24:41 moves from that that uh institution to this one problem with that and this is what my mom used to do and it happened 24:47 to me as well is they pay it out but they can't enforce you closing that card so you're like awesome I've got a better 24:53 interest rate a 20 grand on here and now I have 20 grand available here then spend on that card so now you've 25:00 got 40 Grand worth of debt right that's how easy it is to fall into this trap I just want to reinsert that this is not 25:05 Financial advice yeah um yes let's go back to the story with uh with 25:12 uh well these are rough numbers but I didn't have 40 Grand and I didn't I wasn't silly where I just allowed it to 25:18 get to that point but I did use cards to cover off expenses and and I wasn't able 25:24 to clear them so I was carrying a lot of personal debt from for many years 25:29 and um the way the way out of that is to really you know be honest with yourself 25:36 um and and look at it and say how much how much income do I have how much do I spend and what's left and then you have 25:43 to then whatever's left you need to pay the debt back and stick to that so then 25:49 at one point I even had a second job working at I was working um at Macquarie bank at the time where 25:55 was Macquarie no no sorry it was a different a different institution but I was also working at Bunnings and um what 26:00 I what actually did was I had a personal loan and personal loans have their own BSB and account number so I actually 26:07 told payroll to pay the person to learn directly so every hour that I put into that second job it went straight into 26:13 the last month so it didn't even allow me to spend it on anything else oh you can do that of course you can yeah wow 26:18 well it's just my name right it's just being account number to them it's just an account but it's an actual loan it's 26:23 after tax rate yeah okay yeah that's interesting so you gotta yeah you've got to be disciplined and then and then the 26:28 other thing you can do is um if you've you know if you've got other accounts that you're using say for savings or debt you know to pay back 26:35 that you can tell payroll to pay multiple accounts not all payroll will do that but some for bigger Banks or 26:42 institutions they'll pay like you know 500 there 300 there a thousand there and 26:47 they'll do it for you so that way you don't have you know the temptation to spend it on something else that's like how I usually give my money to my wife 26:56 or just don't get into debt in general yeah and then you have to worry about it I'm getting that it's too easy that's 27:02 the problem and unless you've got the right um mechanisms that you've put in place the right structures 27:08 um and even just you know the right mindset it's very easy to fall into this debt trap yeah so so you're 18. five 27:15 credit cards and a personal loan that's uh quite a lot of debts for someone who's 18 years old just got into the 27:21 workforce and whatnot how long did it take you to get rid of all of the the debts uh well I I had a I had a window 27:28 when I was debt free when I was probably about 25-ish so I managed to clear it all paid off 27:35 second job and everything I said but you know old habits die hard yep 27:42 again yeah I got a new car I got a car loan and then yeah yeah look and then 27:47 and then I told you guys when I started my own business yeah that was in 2016. um I got a startup business loan uh 27:55 which was an overdraft and I don't really understand at the time I didn't know what an overdraft was I just thought it was a loan but overdrafts 28:01 aren't designed to carry they're not like a Term Loan you don't hold them for a long period of time they're designed 28:07 short term only so that put me into trouble because I didn't have the 28:12 revenue or the client to pay it back so instead of you know rushing and trying to find 28:19 customers because customers don't want to come to you if you're desperate right yeah they can sense it right so I um and 28:24 it wasn't really that confident with what I was doing but in terms of the business because the startup et cetera 28:29 so what I did was I um I sold my investment property because I owned a property at the time that my parents 28:35 helped me buy um it wasn't the greatest investment uh there was no thought process behind 28:41 buying it it was purely because it was in the same suburb that our family home was so it's just you know move and 28:47 relocate right and my parents were my first tenants there and um sold that and 28:52 I cleared that that and I I paid back I had a credit card as well business credit card which I had maxed out oh my 28:58 God oh my God what changed for me was actually my my 29:04 wife so she we met in in 2016 and uh 29:09 she's very good with money so she'd never had a credit card before she's never had any debt and she just was good at saving whereas I was the opposite 29:16 right and and I was open with her and I told her about my dad and she she went right in the face like she was thinking 29:22 like what have I done I'm like well yeah so we also got to 29:30 figure this out and with the honest relationship which is good man I commend you for that thank you that's what I 29:35 think is one of the issues that a lot of um people have is they're not open and honest about their finances with their 29:41 with their you know partners and if you're not then it's always difficult to achieve financial goals because you're 29:46 on different pages um and you're keeping secrets because a lot of people keep secrets with how they 29:51 spend money um so by you know putting out putting it all out on the table we were able to you 29:58 know look at it for what it was and and come up with a plan and the plan helped 30:04 that I sold the property because I was able to get rid of that debt and then that's when I joined my last employer so 30:09 I yeah right um and that was a commission only role so when I first started I wasn't payg so I was already 30:16 sales like you mentioned before um you know getting that skill I was 30:21 basically calling people they were online leads and so coming coming from a 30:26 debt background and be and needing to clear all that and having that I even had a capital gains tax that I need to 30:32 pay for selling that property so more more debt like textiles panicking well you thought you'd probably clear your debt yeah selling probably but you 30:39 actually incurred more debt and good more debt because I had spent that the profits already yeah in the business which I started up so I I should have 30:45 kept money aside for the taxes so anyways and that's something people don't really do uh most of the time they 30:50 see money comes like oh great I got all this money I'm gonna spend it they don't see like the the tax uh like aspect of 30:55 it well that's the thing that changed for me not just the tax but it's understanding how much do you need to 31:02 spend because see bank accounts will track how much you spent in the past but they'll never tell you how much you need 31:07 to have in the account and that's what you need to be aware of so it's like say you got payday today a thousand bucks 31:13 and you're like awesome I've got a thousand bucks available but next week you've got an electricity bill a phone bill and regrow's due so really that 31:20 thousand bucks is probably like 200 bucks Max or negative 10 100 or negative yeah yeah but but then you're gonna 31:26 spend a thousand bucks and then you're like oh crap I actually forgot I needed to pay that yeah so now where do I get it credit card yeah you see so anyways 31:33 to so I don't go too long I'll just I'll just say what change for me I then started the concept and this is what 31:39 what really flipped it's when you spend on credit cards you're stealing from your future self yeah all right when you 31:46 save powerful giving to your future self Powerful Love It powerful powerful so like so basically I I flipped that and 31:52 said I want to now give to my future so I don't want to steal from My Future Self because if you buy something on credit card today you get instant 31:58 gratification feels great for the moment but it passes very quickly and then your future self is like oh thanks past self 32:05 now I've got to pay this back yeah right you got to feel that great feeling now I'm going to pay this back what a dick for myself right but if you save 32:12 you put money aside yeah progressively it feels good while you're doing it and then in the future when you need to buy 32:18 something and you've already got the money put aside for it it's like thanks parcelf you looked after me yeah and 32:23 then you get to carry that good feeling in the future yeah yeah because um I just want to tie 32:29 everything back into uh the I guess the whole overarching goal of this podcast which is business in general so Victor 32:35 um the topic was you know how getting into a large amount of debt actually helped me can you tell us about how I 32:41 guess your past experience with debt has helped you um run your business so far yeah so now I didn't borrow any money so 32:48 I launched the business purely on off the back of receiving revenue from my client yeah right and 32:54 I also um I also started to look at money that's 32:59 coming through the door yep before I make expense uh decisions to spend money yep so I don't I don't look at it from 33:06 okay I've got debt and then I'll I'll be able to earn the money to pay it back later now look okay how much how much 33:13 guaranteed income do I actually have and then if I'm gonna put in the credit card the card's going to be cleared yeah 33:19 right because the revenue will come in the month after so okay you know what I mean so in my industry it's a little bit 33:24 different than I don't if I win a customer I don't just invoice and get paid straight away 33:30 the banks pay me right the lenders pay me because I introduce them business and if I settle alone say today 33:37 I don't get paid until the end of the next month so that's tough it is tough yeah especially with like callbacks too 33:44 and all that well clawbacks is what makes things really difficult and that's that's why you know good marketing helps 33:50 you to stay in touch with you could you explain to me what uh clawbacks is so close not many people know this but say 33:55 you're my customer and I worked months to help you and I you know you're happy 34:01 I did the deal the bank pays me a commission if you then decide say three months later uh Victor hasn't been in 34:08 contact with me um I want to buy another property and um you know you know Joe blogs broker is in 34:15 contact with me he wants to now help me buy another property um he then does does a loan for you but 34:22 he refinances the loan I set up for you Victor set up right the bank says all right well this loan 34:28 was paid out in full only after a few months and anything between when it first 34:33 started and two years um that commission that I earned has to be paid back to them it's tough so all 34:41 of it all of it yeah 12 months it's all of it uh second year it's like a 50 reduction oh wow so basically all that 34:47 work did was not nothing exactly so and it's a very good chance I would have spent that money too depending on the 34:52 time that's true yeah so that then affects my other clients too because I've made revenue from other customers 34:57 that I now need to use to pay back the bank that's that's pretty Cutthroat so it basically incentivizes you to keep in 35:04 constant contact with them to refinance their loan every year or is how does it work well even if I finance it myself I 35:10 still got to pay clear back anyway so it kind of makes sense for you to stay with that bank for at least two years before you change so you you pay callback on 35:18 yourself as well yeah I mean of course I'd get Commission on the new deal anyway so but it's like I'm I'm doing 35:24 double the work for the same amount of money that's interesting but it's still better than if you went to another broker right because at least you're 35:30 staying with me and the revenue station for me as opposed to me paying back and I lose you as a customer right so you 35:35 need to you basically need to try and find the best deal possible for your clients wow regardless of what like even now with all interest rates Rising you 35:42 need to constantly be working like communicating with your clients you're already closed clients exactly to try to 35:48 get the best deal for them still yeah yeah well the good thing is I can contact their existing Banks a lot of 35:53 the time and ask for a reduction on interest rate if their payments have been on time if I compare with other because I don't know if you guys know 35:59 this but banks have got two forms of pricing they've got front book and back book is uh new customers so they'll give 36:07 you you know discounts and nice interest rates to win your business backbook is existing customers and they 36:14 call it a loyalty tax so actually the more loyal you are the higher interest rate you pay so you're like oh I've been 36:20 giving you been paying all my payments on time I've been loyal to you as a bank but you're giving me a you're charging 36:25 me a higher interest rate than you are to new customers but why would they do that wouldn't it be better for them to keep their old customers you would think 36:31 that yeah that makes that's just like business 101 like keeping keeping current customer happy to yeah they keep 36:38 paying you well in Australia it's something that I think it's Unique to Australia Banks don't do this overseas 36:43 it's something to do here but to an extent I can't really complain because if I do then it means that there's a lot 36:50 of customers I can't help out there because if all the banks are constantly dropping their rates yeah there's no opportunity for me to refinance anyone 36:56 because they're always on the same rate as anyone does that make sense just um before we close up on just this uh 37:01 section I wanted to ask you majority of your business is it new loans or is it refinances 37:08 um not a bit of both so one thing that changed for me um starting this business compared to 37:15 the first time around is I've got multiple marketing channels like I don't just stick to one I've got nine referral 37:22 Partners now right when I started I had two which is my previous employer and that buyer's agent we talked about and 37:27 now I've got like six more yeah so you've been really active in like 37:34 networking a lot of networking yeah I joined the networking organization so I I go and I set up calls and and we have 37:41 coffees or we have you know one to one or one-on-one zooms and and I really just talk and get to know them 37:47 understand their business but the the key thing is to give first so I always 37:53 look for providing referrals to others and then the law of reciprocation kicks in that's why my my business 38:00 tagline is giving is receiving yep so the more I give the more I receive the more I receive the more I give so 38:06 anyways I think that's um sorry just before I let you go on there I think that's the tagline that's the um title 38:11 for this podcast um Jerome giving is receiving giving his receiving growth gift to grow yeah yeah 38:18 but but there's more to that giving is a trip is not just I'm going to receive later because I give and then of course I know that I'm receiving at the same 38:24 time okay but it's also if you think about it when you do something good for someone the best part of it is when they get 38:32 something good out of it they say thank you you're really really help me that is the best feeling that you get as opposed 38:38 to I just got paid right it feels good to get it's a hot it's a hard um mentality for consumers to actually 38:44 understand right that that particular tagline you just said there yeah it's count it's sort of counter-intuitive 38:50 like for just to receive a thank you but what I can what can I do with us what can I do with that exactly it gives you 38:55 energy but anyways what just to finalize on the question wait what was the 39:01 question again giving is receiving not before that 39:06 tagline all the leads yes you talked about the leads right so when I do different 39:11 multiple marketing channels I've got Facebook ads which are for refinances right I've got referral partners that 39:18 are purely commercial I've got other referral Partners that's residential so 39:23 it's it's an array of different types of customers because I can do all of them yeah so I don't I don't when you said if 39:29 it's just refinance or purchases it's it's a bit of everything well Okay cool so maybe niching down all the time may 39:35 not be the solution that's interesting that goes counter-intuitive to what I've been thinking about like as a company 39:41 you should be niching down to one particular product for example right yeah or whereas you have like nine channels for nine different things well 39:48 some of them are the same things right yeah it's just about knowing who's the for my referral Partners what type of 39:54 customers do they have that I can serve okay because they may not do residential customers so why am I promoting 39:59 residential to them right they may not do commercials so why am I talking about residentiality right so guys we're getting waived down by our producer 40:06 Jerome but so we're going to move sorry to cut you off there but so the next topic guys this is probably 40:12 um a one for those who have business I guess and have been doing pretty well 40:18 and has lightning round a little bit more uh Capital to play around with the question goes where 40:24 should I invest my money in property or business Victor what's your thought on this one 40:29 well for me obviously with your your own property of course you'd say properly but just give us some insights well for 40:35 me I invested in the business first so I so basically I put money into marketing 40:42 it was about sixty thousand dollars that I put into into lead generation and and marketing a lot of that didn't work 40:48 didn't pan out so it was gone but at least it was my money it wasn't borrowed money then when I started my business I 40:55 was sitting on a whole bunch of savings and I thought about it I'm like do I keep that aside and put it into my 41:03 business or do I invest it into a second property and I thought about what how would I 41:09 feel on the other end of it on the one hand I've got all this cash but I've got one 41:15 property the other hand I got two properties no cash but I've still got a business I thought 41:21 that feels better to me okay right it depends I guess depends where you're at in your life and if um you think that if 41:28 the business needs an injection of cash and to gain more leads again more businesses or do you want do you want to 41:34 diversify and buy a property until that you can have two streams of income I call that the risk mitigation here like 41:39 this this is a form of risk mitigation because if you buy the house that means you have like a hard asset there in case 41:45 anything happens with your business yes I mean your business you can start with like literally zero dollars these days right yeah 41:51 um really yes if you don't have money use your time oh I guess you know what I mean okay so yeah no that's true yeah well 41:57 that's for me it was like exactly that I'd known I'd done it in the past I sold a property and that got me out of debt 42:04 so I know that worst case scenario's business fails I'll have some equity in the properties I'll have access to cash 42:09 yeah while I you know get my feet off the ground yeah so what's a verdict then business 42:15 or property if you had to if you had to choose one right now it's I don't think it's a hard yes or no 42:22 or this one yeah yeah but also that gives me that gave me 42:27 a push to be um putting myself out there to get new clients straight away because I didn't 42:33 have Capital to invest in the business it was purely off the back of revenue from past customers correct so it's like 42:39 it puts pressure on you but that's what sometimes what you need if I was sitting on say 60 Grand of cash 42:45 that I could have invested into websites and and whatnot yeah then I may have been complacent in terms of putting 42:51 myself out there so that they're hungry yeah because they're hungry so so that worked for me for other people that may 42:57 not and they might end up you know Frozen and be like what to do with it yeah or what I do with it or yeah you 43:02 know well actually I was in this in this um I guess um predicament not too long ago I've added some cash from the 43:08 previous business I sold and I was like what to do with it to be honest I ended up building another business but um yeah 43:14 I mean it really depends on where you are with your life and what you want to do with your money there's a great saying I just want to share with you 43:20 guys I've learned I heard this recently and I say this quite a lot and there's just two real ways to create a small 43:26 fortune in in life one is to spend less than you earn and invest the difference 43:32 and the second one is to provide something of value that other people are willing to pay for so why not do both 43:40 yeah and with that that we end the podcast now guys if you enjoyed that 43:47 episode uh actually no sorry I hope you actually did get a lot of value now done at that episode if you do have any mortgage or financial questions uh 43:53 Victor Lagos is your guy uh Victor I just want to quickly uh thank you for coming on to the show and um yeah look 44:00 forward to working with you more in the future man awesome thanks I really appreciate the Insight that you have thank you so much man no worries man 44:06 thank you so much music 44:13 [Music]