Why Most Entrepreneurs Overcomplicate Marketing (and How to Fix It) with Allan Dib – EP 264

Justin Donald: Well, Allan, so glad to have you here. Welcome to the Lifestyle Investor Podcast.

Allan Dib: Pleasure to be on, man.

Justin Donald: Yeah, this is cool. I'm glad you traveled all the way here from Australia, which is awesome, and glad to spend some time with you here, and I'm so thrilled about what you're up to in the world of marketing. You've made some major moves, some major changes. You have really a simple framework that produces unbelievable results. And so, I'm excited for you to share just some of what even got you into being this marketing guru that you are, right? You've had over a million copies of your book sold, and then you have an accelerator program, and you help business owners really like, I guess, lean into marketing in a way that isn't overwhelming, but yields incredible results.

Allan Dib: Yeah. Look, I always say my mission, regardless of what I'm doing in marketing or business, is just to simplify the complex. I think that's what thought leaders and authors and anyone in our space really get paid for. It's to simplify the complex. How can we take something that's kind of overwhelming, complex, that's got a lot of bright shiny objects, and almost nothing has as many bright shiny objects as marketing? And there are tons of tools, and now with AI and all of these sorts of things, how can we really simplify this and just get back to basics and make it easy for people to implement? So, it's a privilege to be able to do that every day.

Justin Donald: Well, I love that. So, I'm curious, what are some of the simple marketing mistakes that you've seen entrepreneurs make or, yeah, it doesn't just have to be entrepreneurs, but I would imagine a lot of your clientele or people that are trying to bring something in-house, they've tried to go and outsource marketing, which we have tried, to utter failure and dismay. I feel like we've made many mistakes, but I'd love for you to share some of the mistakes you see entrepreneurs and others commonly making.

Allan Dib: It's funny. I often do keynotes and I say, "Who's hired a marketing agency before in the past?” Everyone puts their hand up. “Who's had a great experience?” And very few hands ever stay up. Everyone's got that experience where they've blown 20K, 30K, 50K, 100K with a marketing agency and got another thing. And so, a lot of what we do is help you own the marketing strategy, own the marketing execution in-house. So, we're kind of the opposite of an agency. We don't do it for you. We help you own that process and build it in-house. And so, one of the biggest mistakes I see is that people try to apply marketing too early when they don't have a message that really connects with their audience.

So, a lot of what we're doing in marketing is amplification. And just like if you're a singer, and we give you a microphone and amplifier. If you're a bad singer, the microphone and amplifier is going to make things worse. They'll throw it out, right?

Justin Donald: Right. We've all been to a good karaoke session, right, of people that they know how to sing. Yes.

Allan Dib: Exactly. So, exactly the same from a marketing perspective. We talk to a prospect and we say, "All right. What's your conversion rate?” And often it's very low. And I'm like, "Alright. So, if we show your offer to 10 people and we have a low conversion rate, and then if we show your offer to a hundred people, you have a low conversion rate, what makes you think we should go out to 10,000 people or 100,000 people?” So, a lot of times, getting back to basics is figuring out, "Okay. Can we fix the offer? Can we fix the messaging? Is there a technology problem? Is there a tools problem?” really plugging the leaks because whenever we look at someone's funnel, there are so many different leaks. And often we don't even have to get any new leads to get a big result.

Most businesses can double or triple their business just by plugging some of the leaks and not getting any new leads, any new clients. It's just like fixing churn, fixing the leaks in terms of their funnel. People are arriving on their website, not opting in, not buying, not doing the stuff that we want them to do. So, a lot of times it's just really getting back to doing super basic stuff. And sometimes my work is criticized as common sense, but common sense is not common practice.

Justin Donald: That's true. That's so true. That's a great line right there. And really, I'm excited for our show today because we're going to do something fun and different that I don't think either of us normally do, where we're going to kind of go back and forth and we're going to ask each other questions and I've got a whole bunch that I'm so curious on about you and what you do, and you're going to do the same for me. We’re going to release it on both of our podcasts. So, it's going to be a ton of fun. But I mean, for us, it was a game-changer. So, exactly what you said about outsourcing, we've made all those mistakes. We outsource to so many people. We blew so much money. We had so many promises that were never delivered upon.

And we finally brought someone in-house, and she is awesome. Her name's Phoebe Mroczek. We love her to death. She is amazing. She's a dear friend. She has just done wonders with our marketing and just is very gifted in that space. And now seeing the other side, I'm like, "Why would we ever go back to outsourcing? If you can find the right person and bring them in-house, that's the key.”

Allan Dib: What were the big needle movers for you when she came in?

Justin Donald: Well, part of it is you're looking for someone that understands the brand and knows your messaging and language and can ask. Like for me, she asks me the right questions to elicit the response that she wants, but she gets it from my voice, and she asks questions that maybe I'm not always thinking about, right? So, there's a message that she wants to craft in her series of questions that get that answer. It’s a different cadence. It's a unique progression of questions that maybe I haven't answered in the past. And so, we get very unique answers on it, which is super cool. And for me, it's neat because I create way more content.

Part of even writing my book, I hired someone that asked me a whole bunch of questions. So, like the beginning of my book was me just capturing all my thoughts. And it was all jumbled. There wasn't like an order. I'm just walking around. We've got this place called Town Lake. It's this beautiful trail around Lake Austin, and I would just walk and talk. And for me, like that's a great way to kind of get my ideas out. But at a certain point, I thought, well, what if I hired someone? They asked me a bunch of questions that got me to think about things that I didn't naturally think about. So, it's still in my head, but it's not like it's on call the same way. It was prompted.

And so, that for me was a very therapeutic but effective way to just capture that mind chatter that you have and get it out on paper. And so, from a marketing standpoint, it's that same thing, right? It's being able to ask questions that help me think about a different response that leads me down a path where I can create new content because I am intellectually stimulated by a new series of questions.

Allan Dib: Yeah. I mean so much of, I mean, it sounds a bit cringe to call it thought leadership, but so much of what content creation or thought leadership and all that is just curation, capturing the ideas, capturing the stuff. And so, whether it's out on a walk or wherever else, it's just capturing all of that so that you can use it in your marketing, in your content, in your new book, in your whatever. Super valuable. Not many people do that.

Justin Donald: A hundred percent. Now, you have this big thing on lean marketing.

Allan Dib: Yes.

Justin Donald: And I'd like to dive into this a little bit more. So, more results, less waste, right? And so, how can business leaders apply this method to scale more efficiently, in your opinion?

Allan Dib: Yeah. So, one of the things I looked at when I looked at all the best marketers in the world, they weren't doing like a thousand different things. They were doing one, maybe two things, and they were going really, really deep. And I thought that was interesting because we see so many people now saying, "You've got to do this and that, and be on every platform and show up 10 times a day,” and all of that sort of thing. And it's just overwhelming for the vast majority of people.

Justin Donald: Totally.

Allan Dib: Yeah. And I just saw this paradox. It's like, hang on, the best marketers in the world they're doing like one or two things max, and they're going really, really deep. They're either a podcaster who's just going super deep on podcast or a YouTuber, or they've got their email list nailed, or they're an author or whatever else. I was the same. I mean, we're literally just now seriously adding a second channel to our business, where the book has been the main channel for many, many years, still generates tons of lead flow, 1-Page…

Justin Donald: The book, The 1-Page Marketing Plan. Link this thing off. It's gold.

Allan Dib: Thank you. I appreciate it.

Justin Donald: Now, we're kind of laying into lean marketing right here.

Allan Dib: Yeah. So, look, some of the biggest wins in life and in business I've found comes from subtraction. So, Colin Chapman, he was the chief engineer for Lotus Formula One team. He said, "If we add power, we can go faster on the straits, but if we reduce weight, we can go faster everywhere,” right? So, where can you reduce weight in your marketing, in your business, in your offers? And every time I've simplified my business, I've reduced the number of products. I've made it easier. I've made it simpler. I've made more money. And so, a large part of what I'm doing is subtraction. What are the few things that really, really move the needle?

Because when you look at it, there's that 80/20, and really, the 80/20 can be applied to itself. It's the 64-4, right? There's 4% of things that really make 64% of the difference. So, if we can just focus in on those, it makes all the difference.

Justin Donald: Allan, that's really counterintuitive because I think everyone wants to add to it. I think, for me, naturally, I'm just like, well, what else can we do? What other floors can we create, right? What other channels can we get on? What other partnerships can we form? So, I love this idea of subtraction. Let's simplify. What are some things that you see that can be quick implementations for teams right now? Like, they could just go out and they can run with it. Like, what you said right there is great from a subtraction standpoint, and that I would say like more top down. Holistically, that is great and actionable, but are there any specific things?

Allan Dib: Really quick win you can get is just with a reactivation campaign. Can we reactivate people who've either churned or maybe didn't buy a funnel somewhere down the track? Almost everyone has that list of people who we spoke to them years ago or a year ago or whatever else. They didn't quite get over the line. Maybe it wasn't the right time or whatever. Very few people have a system to do that. So, reactivation campaigns can be really, really powerful.

Justin Donald: Yeah, I love that. Let's talk about scaling smarter here for a second. You've built and scaled many successful companies. What key challenges shaped your approach there on scale?

Allan Dib: Yeah. People talk about scale a lot when they haven't mastered the basic thing. It's like I talked to clients and they're like, "How can I use AI to automate all of my sales or automate all of my marketing?” I'm like, “Dude, you didn't even know how to do the thing, right? So, how are you…?”

Justin Donald: You're not even marketing it well. Yeah.

Allan Dib: It's kind of like if I want to manufacture shoes. I need to know, okay, we get the leather, then we get the sole, then we stitch it together, then we do this, then we do that. And then I instruct an engineer to say, "Okay, this is the process. Now, let's do it at scale. Let's build the machines. Let's build the factory. Let's do it all at scale.” But if I don't know how to do the thing, it's just not going to happen. So, scale really comes from that. What about you? How have you approached that?

Justin Donald: Yeah, it's interesting. I think in different seasons of life, I've done plenty of trial and error, right? So, it's different seasons of life, different things have happened. So, in an earlier business, when it was really the business creating my income, I had this recognition. So, this is pre-passive income. We talk about hitting a lifestyle number, a freedom number that covers your lifestyle expenses. So, before I hit that and I had a business, I recognized two things. Number one, I need better systems. I need better SOPs. I knew the business really well at that point in time. So, now it was refining those processes and also refining them at scale because at a certain level, a certain system can work, but once you get to a point where you're doing more business, that same system often doesn't work.

It needs to be retooled, right? You'll notice that on like a plateau for a while. It's like we got to retool. So, one of them was systems, and then the other one was people. It was hiring great people and hiring people that didn't need to be micromanaged. So, for me, I am not a micromanager. I don't enjoy it. I have done it. It is not my favorite. And I also find that people I have to micromanage are not the type of people that generally take initiative the way I would like to see them take initiative. So, it was really kind of stepping back and saying, "Well, the business I like to be in is where I'm a macromanager.” I want to just hire awesome people that will figure it out. Maybe they're not like crushing it right out of the gates, but they have the capacity to crush it, right?

They have the aptitude and the IQ, the EQ. They have the behavioral assessment that helps support the fact that I know that they could build themselves into an executive caliber role. So, even though they might not come in as an executive, are they predisposed to being an executive with reps, with repetition? And so, when I find people that have the work ethic, they take the initiative, they're problem solvers. I can trust them. Like, that's the game changer. I've given many talks on the type of people I like to partner with, whether it's a legit partner, whether it's an operator running a business, or whether it's like a key hire for different roles. I have like this hierarchy of things that is really important to me, and I just named a handful of them.

But they've got to care about the success of the team and the business as much, if not more so, than you do. They need to care about their success. They need to be loyal. They need to be honest. You need to be able to trust them. They need to work well with other people if their role is working with other people, and if their role isn't, then they just need to be a tactician at that thing.

Allan Dib: Yeah. And I want to understand a little bit of it because I think we run similar businesses. So, you run an online mastermind essentially. So, what does the program look like? So, is it like group calls? I know you said you've got some gated content where you've got tax strategies and things like that. Tell me a little bit about the mechanics of how it works.

Justin Donald: Yeah. So, we have a lot of free resources. We've got a lot of sessions that we've done for members only that we've opened up, maybe like a keynote or a message to our larger community. We've got a free community as well. And so, the part that's gated would be anything really like mastermind specific. And so, the cadence of what we do is we generally do two education calls any given month. So, our focus is world-class education. If I feel like it's something that I am an industry leader in, I will teach it. But 9 times out of 10, I'm not like I know where I'm specialized, I know where I'm good, and then everything else, I'm just sourcing the best in class in that, whatever it is.

Allan Dib: It's like a webinar, sort of.

Justin Donald: Yeah. We would do that virtually. Then also, so that's two times a month we do education, and then one or two times a month we do deals. And these are highly curated, highly diligent deals that often produce cash flow. That's kind of our goal that the majority of the deals that we do produce cash flow, but we have people in our community that they've gotten to lifestyle investor status, like they make more than what it costs them to live. So, we're not exclusively cash flow, but we're still probably 75% of our deals cash flow. So, that's the virtual component of it. Once a month, or on average once a month, we do about 12 in-person meetups that are smaller, so think 15 to 30 people. Any member can host one. We've got someone on our team back.

She's awesome. She supports any event that we would do, so a member could host one. We can just set up a cool one, like we did a really cool one in San Francisco and Napa Valley, and we did another cool one that was Porsche Racing in Birmingham, Alabama. And just cool stuff like that. Then we have a Spring Live event that's about 125, 130 people. So, that one's usually in May. Our fall live event is in September, and recently, the last two years, we've opened up about 20 to 25 seats, or maybe I should say 15 to 25 seats to non-members. So, it's mainly an event for our members, but we'll actually interview some people that we think could be right fit, often referrals of members, and open the doors to them.

And then our December retreat is our big one. That's about 250 people. Spouses are included at any of our events that we do. We really want when we're talking about investing and creating your investment criteria and your asset allocation and tax strategy, all these things that are really important, we want spouses to do it together. We want them to feel comfortable and learn and grow together. And so, that end-of-the-year retreat in December, that's always just members only.

Allan Dib: Nice. And they're all in the US. Is that right?

Justin Donald: Yeah, they're in the US. The live events are always in Austin. The monthly events will travel all over, so we'll have one generally in a different… So, we'll have like 12 different cities for those. Then we'll do one or two epic experiences. So, like I told you, we're doing Japan, where we're going to hit up many of the Michelin Star restaurants out there. We did a Mexico City one, which was epic. Hit up a bunch of the Michelin star restaurants, some of the top 25 rated cocktail bars, like just really cool experiences. And then we're actually doing a smaller trip here to Dubai and Qatar with some of the Lifestyle Investor Mastermind members as well in November. We did one last year to Hong Kong and Taipei City, which was neat, hitting up Taiwan before that changes. And then we're talking about next year doing San Sebastian region, that region in Spain,

Allan Dib: It's very, very smart what you're doing because you are really building community. It's not just about, “Hey, get my course, get my content, get my training,” or whatever. And I think that's something that we're building right now. Like, you are doing a lot of in-person stuff like that. And that really builds community. People come for maybe content or deal flow, whatever, but they stay for community.

Justin Donald: A hundred percent. Yeah. And that's an interesting thing that we had to learn is the reason people show up is different than the reason they stay, right? So, how do you find someone that's interested in the Mastermind? Those reasons, and often it's from the podcast or the book, but we have a lot of member referrals. Like, our members are diehard, and we're a high price point. And so, what's really cool is we have a very high renewal rate, especially at our price point. But we found the reason people renew is the community, the networking, the experiences. Now, it helps when they have good tax strategy and they save some money. It helps when they have good deals, but our goal isn't to always be providing deals.

Our goal is to educate people so they can learn how to fish themselves. And so, we don't want people to stay because they feel like they need the deals. We want them to know how to do the deals. We want people to stay because of community. It's going to be hard to find a community as incredible as ours. And so, once they're in and they see that and experience it, a lot of these guys and gals, they're partnering up. They're helping each other grow their businesses or buy new businesses, or partner on a business. And now we have different tiers of the Mastermind. So, Lifestyle Investor’s our flagship offering. We've got Tribe of Investors, which is our mid-tier offering. So, it's like a light version, like a 50% version of Lifestyle Investor.

And then we've got our young adults program called Lifestyle Investor Foundations, and one of the cool things we're doing there is we're grooming, this is like 18 to 30 year olds. We're grooming them to be able to partner with the Lifestyle Investor members for the businesses that they're running, starting buying, et cetera.

Allan Dib: That's cool. That's really clever because a lot of coaching programs are like, “Hey, it's about the information. It's about…” But information degrades in value over time because you've implemented it, whatever. You've done the tax strategy. Great. I've got that. So, I don't need to stay any longer.

Justin Donald: Yeah. Estate planning. You do it once, you're probably good. Maybe you should revisit it once every year, every two years, but it's not like it's changing a lot.

Allan Dib: Yeah. But community gets more valuable over time.

Justin Donald: Bingo. We always tell people we've got, what, 115 to 125 members, somewhere in that range, that are all experts in their craft, and their craft is different. So, it's like all these niche-y things, all these niche-y businesses. Like, one of the guys in our group has the largest O-ring company. They're the largest O-ring manufacturers. So, just those little O-rings, right? We've got another guy that was one of the largest steel manufacturers. And so, it's like all these specialized businesses. But what also happens, we invested in this company, and some of this, I got to be careful what I speak because some of this is not public, but I'm excited because I'm going to meet Mark Cuban here in a couple of weeks because he's also an investor in this company.

Allan Dib: That's good.

Justin Donald: And as they've scaled, they've been able to add robotics and AI to their automations. And so, now you have these other guys that have done this in their businesses, manufacturing, that can weigh in and help this company. So, for us, we feel like we want to invest in these deals, where we can get a good return, but part of the way you get a good return is you have such smart outlier people that can weigh in to help shape and shift the return by making the company better, by their unique expertise.

Allan Dib: That's cool. What is your funnel flex? I've heard you on a podcast, or I've read your book, or whatever. What happens next? How does someone get into your world? And do they have a call with someone in your sales team, has set a closer sort of scenario, or how does that work?

Justin Donald: Yeah. So, it kind of depends where they initiate. So, we do free strategy sessions. I mean, generally, we have a cost on the strategy session depending on where someone enters the funnel. There are different promotions where we'll do a free strategy session. And anyone that learns about it on the podcast here, we always want to honor a free strategy session, or even for your group, we would offer that. And then so from there, someone on the sales team would be able to help steer them, what's the right path? Should they go into a course? So, we have an online course. We have these masterclasses: a tax strategy masterclass, a vetting deals masterclass. We've got a mobile home park investing masterclass.

We have all these different masterclasses that could make sense, a passive income masterclass. And then we have the different tiers of masterminds. And so, that's one way that people can get in. Another way is through the book. And the book could lead to different courses. We have a bunch of people that buy a course, and then they're like, “Ooh, this is really good. I want more. What's the next step?” And they might reach out to us. We are trying to streamline into more of a one-on-one call so we can really cater the content and education that we provide to help people get from point A to point B, whatever it is. And each person's a little different.

We'll have people that are total novices, have never made an investment once in their life, to experts that invest for a living. And our community can satisfy any place someone is, but our sales team is so good at identifying what is next for them. What is the best next step?

Allan Dib: That's really cool.

Justin Donald: Yeah. What about yours?

Allan Dib: So, most people discover me either on a podcast or a book. So, they read the book. Taki has a term, Taki Moore.

Justin Donald: I love Taki.

Allan Dib: Taki's a legend, so great mutual friend, but he has, it's called Brandwidth. So, it's the amount of time someone has spent with some of your content, and I think that's a really, really powerful concept. And a book is great for that. Someone spent six hours potentially listening or reading the book. It could be even more podcast and long-form content, as you know, really, really powerful as well. So, someone might have listened to a hundred hours of your podcast until they're like, "You know what, this dude is legit. It sounds really good.” So, for us, it's usually either the book or they've heard it on the podcast. They'll opt in for some of the resources, like the 1-Page Marketing Plan Canvas.

And that's when someone from our team will reach out and say, “Hey, noticed you opt in. Do you need any help? Do you need any resources?” So, figure out basically how can we be helpful on their next steps. So, for some people, they’re just starting out, we'll send some helpful free resources. Other people are like, “Hey, I just really need help right now.” And we'll connect them with someone in the team who can talk about our accelerator program, where we help them build their internal marketing strategies in their team.

Justin Donald: I love it. In talking to you, I’m like, we need a team up and do some of this. There’s for sure a lot of value I can get from you and your team. And I would hope that there’s value you could get from us and our team, and I think it could be really fun. One of the questions I have for you, I talk a lot about creating the life of your dreams and really not being on autopilot, but being proactive, living life by design. Part of that is a business by design, and so, you’ve got a lot of people that I think are slaves to the business that they’ve built. They’re not really business owners. They’re owned by their business. And so, a question I have for you in building a business, like how do you build a business that runs without you? Because leaders want growth, but they also want freedom. A lot of them sacrifice the freedom for growth, right? So, what advice do you have for building a self-sustaining business?

Allan Dib: Yeah, so this basically getting the right people into place, like you need similar to yourself, getting the right people into place is key and understanding where your genius zone is. Like, my genius zone is not HR, it’s not meetings, it’s not planning out every little thing. I’ll blow my brains out. I don’t want to do any of that stuff, right? But I want to work in my genius zone, which is writing, connecting with cool people, podcasting, recording content. So, that’s where I’m going to deliver the most value for the business. And I was glad to hear about your schedule, which is like, hey, I work from 11:00 AM till 3:00 PM three days a week or four days a week or whatever it is. And I’m similar. I probably work maybe 25 to 30 hours a week.

Justin Donald: Love it.

Allan Dib: And I think, if you’ve got the right people in place, if you’ve got the right systems in place, you don’t need to do more than that. And especially if you are working in your genius zone most of the time. And because a lot of the work that you and I do, like we’re creating content, it is very, very draining, right? So, it’s not, well, I don’t know, for me, at least it is.

Justin Donald: It can be for me. It depends on the season, depends on if I’m in flow or if I have to force flow. If I got to force it, then it is so draining. Sometimes I get in these zones and I can just come up with stuff. I’m like, I’m on it. And I know you know what that’s like.

Allan Dib: I do. I do. So, really, recovery and also, I want to be the model for my clients. Like a lot of my clients are like, man, I’ve just been slaving away in this business forever and I want them to see that there is a way that you can build a lifestyle and a business that you love. And a lot of them think about, hey, I’m just going to work really, really hard for 10 years or whatever, and get that big exit and then I’ve made it. And I’ve had those exits and they’re nice, right? But you pay a sh*t ton of tax. You’ve exited the business, you’ve built this baby, and you’re like, okay, what now, right? And so, it sounds really, really good, and there are good things about it, for sure. Paid my house off. I bought all the nice toys, all of that sort of thing, but now, I’m leaning a lot more to like exiting without selling. So, can I keep the business? Can I keep the cash flow? Most of the benefits of exiting without exiting, right? And without having to pay the tax and all of that sort of thing where I can just keep this cash flow machine and also, not lose my purpose, like the stuff that I’m doing.

I wake up excited on a Monday and think, awesome. I’m going to speak to some cool people. I’m going to write some stuff. I’m going to, whatever it is. And so, if I’m working on my genius zone, I’m moving the business forward, I’m also enjoying what I’m doing, and so, I want to live the life that I’m really telling other people that they can do. So, I don’t want to be a hypocrite where you’re saying one thing, but you’re doing another.

Justin Donald: Yeah, I love that. And by the way, I wish you would’ve been in our ecosystem at the time of your exits because we save our members literally millions, in some cases, tens of millions of dollars, with some of the unique strategies we use on a business exit. So, we can really do a lot for people year to year with an active business, but there are so many unique strategies when someone exits that most people have no clue exists. And so, that’s what we love teaching the world, anyone in our ecosystem.

Allan Dib: You came into my life too late.

Justin Donald: Well, I have a feeling you’re going to have more business exits. So, I think, to a certain degree, it’s like some businesses, they are ripe for systematizing, turning into a lifestyle business, running it. And when I say lifestyle business, it doesn’t necessarily mean that you’re just like, I guess there’s a couple different ways of looking at it. I mean, you can still grow it and scale it while having very little of your time, but there are some businesses that is likely not feasible and you probably need to exit it to get to where you want to be, right?

Allan Dib: Yeah. Well, think of it this way, every business is a lifestyle business. Just some of them are bad luck.

Justin Donald: Amen to that.

Allan Dib: And I think this is actually another Taki phrase. He calls it the Lifestyle Empire, right, where you can make a lot of money and have a lot of freedom, whereas there are some businesses where you can make a lot of money, but you don’t have much freedom. Like, I think of things like a Silicon Valley venture-backed business. You can exit for a billion dollars if you really do everything right, but man, you are slaving away for 10 years plus to do that. And then there are businesses that don’t make much money and don’t have much freedom. You think of the restaurants or something like that, where they’re just horrible businesses and it’s just hard to make money. You don’t have a lot of freedom, all that sort of thing. So, I love to be in that spot where you’re building a lifestyle empire where there’s a lot of leverage, a lot of scalability, but also, a lot of potential freedom.

Justin Donald: I love that framework and Taki really is the best framework, so I got to get them on the podcast as well. We’ve talked about it, so we just need to– it’s always hard for you Aussies to get the time zones right between you and us, but along those same lines, how can marketing support a lifestyle-focused business model?

Allan Dib: Yeah, so great question because lead flow kind of solves a lot of problems in your business, right?

Justin Donald: Yeah, that’s right.

Allan Dib: And really, cash flow, lead flow, they’re very well connected. So, every business is full of problems. And so, cash fixes a lot of problems, not every problem, but a lot of problems, right? So, if you’ve got a good cash flowing business, you can hire really good people, you can put in really good systems, you can do all of those sorts of things. It’s the businesses that are kind of in that vicious cycle where they’re not making much money. I’ve got to kind of skimp on hiring. I’m going to skimp, or I’ll just do this myself to save money or whatever else. So, that’s kind of a difficult place to be.

So, if you can fix the lead flow issue in your business and that unlocks so much else, that means you’re going to have revenue, that means you’re going to have profit, you’re going to be able to hire the right people. Hiring the right people means you can deliver a better product, means you get more referrals. So, it just solves so many things downstream. So, everything’s downstream from lead flow in a business.

Justin Donald: I love that. And it brings up an idea, a thought that I have on most entrepreneurs that I have met, put almost everything they make back into the business. Okay? And by the way, we all know the odds of business success, right? In the first five years, it’s only 5% that survive. Okay? So, you have a 95% likelihood your business is not going to make it. And most entrepreneurs are plowing all their capital back into their business. And so, one of the things that I think is unique about what we do is I study all the billionaire data, all the single-family office data, the infrastructure that supports these billionaires. And it’s interesting to see the asset allocation because these individuals are so wealthy.

Most of the data that I look at is new wealth, not wealth that’s handed down from generation. Like, actually, if you study the billionaire charts and who’s become a billionaire and whatever, actually, you have a higher percentage today for the first time in a long time. This is kind of a trend over the last three years. You have more billionaires that are new money than old money being handed down, which is a really interesting thing. And then you have this whole concept of wealth not making it beyond three generations.

So, only 10% of wealthy families have any sort of real wealth by the third generation. And so, you have this lack of education around money because it takes one strategy to make the money, and then a totally different strategy to grow and maintain the money, right? So, you go from this concentration playbook to a diversification playbook, and so, we’re always trying to help founders put less into their business because there’s an amount that you need to reinvest into your business. It’s likely not everything, and in case the business fails, let’s allocate like billionaires do.

Allan Dib: This episode sounds like a catalog of all my past mistakes. So, I’ve never had anything catastrophic go wrong in business, but I was always like, you know what? If I put it in the S&P 500 or whatever or I’ll get a 7% or 8% return or whatever, but hey, my margin is like 50%. Why don’t I put that back in my business? So, speak to that. A lot of people have that thought process.

Justin Donald: Yeah. And so, to a certain degree, that makes sense. But it’s also seasonality, it’s also based on the economic times. Just because that worked last year doesn’t mean it’s going to work this year, right? Hopefully, it does. But what if you hit the season where that doesn’t work? What if another COVID happens where that doesn’t work for most businesses out there? You had a very small sliver that took off during that time, but most were materially impacted and that’s the whole reason we had PPP and all the other government subsidies and handouts, at least in the US, and I know that it happened in other countries as well.

And so, my argument to that is, if you have all your eggs in one basket and that basket ends up breaking, now, you’re in trouble. So, it’s not to say that the S&P solves all the problem, but there is a time and a place for the S&P, like the wealthiest people in the world, they put 15% to 25% of their net worth in the stock market, typically in index funds, in the S&P index, other indexes as well, because that’s the lowest cost way to manage those dollars. But most of your billionaire class have about 50% to 60% in alternative investments. So, think, real estate, private equity and private credit, and crypto, we’ll throw crypto on there. The other three are the biggest three, but crypto’s definitely made a big emergence, especially Bitcoin specifically. And this is outside of their primary business. Okay? So, your average billionaire is putting 20% to 30% of their net worth in private equity.

Allan Dib: How much should I be allocating and at what stage? Like, I’m assuming you’re allocating more as this business gets more mature earlier on, you’re investing more in the business, or how do you think about that?

Justin Donald: Yeah. You probably in the early days do need to put more in, but just because you’ve done that all these years and now you’re mature doesn’t mean you need to keep pouring in just as much money, and just as much money may not grow it the way that it did before, right? So, I think we need to be judicious about the dollars and the actual result of those dollars, the ROI on that investment back into the business because what if you could get the same result with 30% of the money you’re putting in or 50% of the money in versus 100%? What if we could carve off 50% of that and we could start allocating 5% to 15% to private credit and 20% to 30% to private equity and 10% to 20% or 25% to real estate, right?

Like, now, you’re diversifying, if anything happens to your business, you don’t have all your eggs in one basket. If economic times kind of turn a little bit, you’re hedging your bet. And this is the formula that most of the wealthy have done, and then pro Bitcoin in there for anywhere from 2% to 5% of your net worth as well. That’s really what these family offices are doing.

Allan Dib: And so, would you do that from the very beginning or would you do that as the business grows? Like, when is my trigger to say, all right, I’m going to invest off the farm?

Justin Donald: I mean, I would have some allocation that does not go 100% into the business, even at the beginning. That’s what I did. I thought that was, for me, the smartest play. And keep in mind that I think a lot of people, especially entrepreneurs, they’re trying to maximize their dollars, or especially, even I would say people in corporate America that are high income earning W2s, their goal is like, how do I get the best return on my money? And so, you see a lot of entrepreneurs saying, well, I could get 30% ROI on my dollar, so I’m going to put it back into the business.

But the wealthiest people don’t put the majority of their money anywhere. They spread it out. So, no matter what the economic season is, they can get a return, right? So, there’s part of that money that’s in fixed income, for example. Usually, it’s 5% to 10% that’s earning them 4% to 5%. Could they be making more than 4% to 5%? Yes, but that builds a liquidity pool that if they need to pull that money to make an investment or put it in their business or whatever, they have the money available, right? So, the goal isn’t to make 15% or 20% on that money. The goal is actually to make 4% to 5% on that money, because if we have another turbulent season, that money is likely going to perform and the other money may not. That other capital may experience some fluctuations or volatility, right?

And so, real estate, generally, over the long haul is going to grow at about 10% a year. Okay? Maybe a little less in some markets, maybe a little more in other markets, but it’s a great store of value with some tax benefits to it. And so, those tax benefits can help you keep some of your money today that you can then invest back into your business or into other investments. And so, I think people need to get out of the mindset of how do I earn the highest return on all of my money? No, no, no. We have these different pools of money and we need to be comfortable at 4% to 5% here, 9% to 10% here, 12% to 15% here. Hey, let’s swing for the fences with 1% of our net worth. That’s it. Let’s not get too crazy.

I know a lot of entrepreneurs are like, I know how to run a business, so I’m going to go ahead and plow a bunch of money in other startups. The wealthiest people at max have 1% of their net worth exposed to early-stage investing, right? At max, they have 10%. They have 4% to 10% generally in VC, venture capital. So, that’s still early stage, just not as early as angel seed, pre-seed type of investments. But once you understand that the wealthy have 1% in early stage, or let’s call it seed, they’ve got max 4% to 10% in VC, well, the rest of it is a lot safer, secure. So, it’s like 11% on the early side at the max. Well, I know a lot of people that put more than 11% of their net worth into riskier stuff.

Allan Dib: Yeah, I’ve seen a lot of fortunes disappear because someone was way too concentrated, especially in a business, because in a business, all sorts of things can go wrong that are out of your control. Like, you could get sued or some government change, some regulation change, some whatever. And if you just keep reinvesting in the same thing, you’re really, really exposed.

Justin Donald: Totally. Real quick and on that point, but hold your thought because I want to get to it. Think about a bank, banks being the most conservative lenders out there, one of the number one things they look for when they look at lending you money is concentration risk, right? So, entrepreneurs don’t often think about that, but that’s the first thing that banks think about and I think we as entrepreneurs need to be thinking more of concentration risk, to your point.

Allan Dib: One thing that I’ve started to really think a lot about and I feel dumb for only thinking about it so deeply recently, is tax strategy. Previously, I was like, yeah, my accountant, my lawyer, they’ve all got it handled or whatever, and they’re okay, but they’ve got a ton of clients, and I’m not on their mind all day long, and as my business grown and evolved and there’s different things, I was looking at, I’m like, tax is my biggest expense by far, right?

And if I was in e-commerce selling bottles or whatever, I try and figure out how do I get the plastic cheaper. How do I manufacture it, the lid cheaper? Where do I source this stuff from, because that’s an input expense? And I’m like, this is my biggest expense. And I’ve spent so little time on actually really understanding it in depth. I understand it a little bit. So, I’ve spent the last 6 to 12 months, just going really deep understanding all the different strategies. I’m sure I haven’t even scratched the surface, but this is something that a lot of people don’t pay attention to and don’t structure correctly for. And there’s a million different ways and it’s a very complicated topic as well.

Justin Donald: It totally is, and this is the fun of it, like when you learn that tax strategy is the biggest game changer of them all, it goes from being boring to really cool. All right, so I do a lot of keynotes as well, actually, not as many as I used to, but I still love to do some keynotes, I like to at least do six a year. And the first question that I ask, I say, “Hey, who here wants to know the single best investment that I have ever made?” And before you answer that, this is an investment that everyone can do. It’s an investment where you can make 30% on your money. It costs $0 out of pocket. Like, I really build this up and I have a lot of fun with it, and people are guessing, oh, real estate or private equity or your company, and not once in my entire time of speaking, and this is even when I was doing, what, 15 to 30 keynotes in a year, not once has anyone ever guessed the real answer. I’ve had some good answers where they’re like, investing in yourself, investing in your marriage. I’m like, all right, these are really good. All right, we touche. But my answer to this one is world-class tax strategy.

And to your point, you had said, I don’t think my CPA is thinking about me all day every day. I would venture to guess, your CPA is not thinking about you at all because they are building algorithms and AI that can actually file returns for you. The only way that they make money is by getting more people. So, what a CPA is doing is trying to file more returns and they’re trying to build an infrastructure so that they can scale filing returns. Their job is not to help you save money.

And in fact, when you go to them with a strategy and say, “Hey, I learned about this great strategy, I’d like to implement it,” guess what they’re thinking. You want me to read up on this and waste time from getting more returns that I can file, when I don’t know the tax code, I only know how to file. So, I look at CPAs primarily, unless they’re specialized and it’s a very– let’s talk, less than 1% of all CPAs are specialized in and actually proactive, but most of them are just compliance oriented. I’m going to file your return. I’m going to stay within the confines of what I know, which, by the way, is very little. Ask your CPA if they have read all of the tax code. Ask your CPA if they’ve read half of the tax code. Ask your CPA if they’ve read 10% of the tax code. Like, ladies and gentlemen, I guarantee they have not.

So, what I learned is that the CPA plays a role and it is an important role because we need to file taxes, but the tax strategist is the game changer. And I would much rather pay money to a tax strategist. To any tax strategists, my favorite question is, whatever your cost is, I don’t care what your cost is, can you save me more money than I am paying you? And then your tax strategist should coach your CPA on how to file. And what you will learn really fast is your CPA has no clue about any of this stuff.

I have several tax strategists. And I had a CPA early on that he questioned everything. He didn’t want to do it. My tax strategist would show in the tax code, literally, here is the tax code that outlines this exact strategy we’re going to use. And my CPA didn’t want to do it because he didn’t know it. He’d never done it before. He didn’t understand it, right? And so, I had to move on and get a new CPA. And now, I’ve got a CPA that is wonderful. He’s actually really proactive. He does a great job and he works well with my tax strategist. Okay? So, now, when he hears something from the tax strategist, he’s like, ooh, that’s really good.

And in fact, I wonder if this could benefit my other clients. Like, that’s the type of CPA you want. My current CPA actually does read the tax code and is really good on that front. But think about it this way, you save $30,000 a year in taxes. Okay? Doesn’t sound like a lot. I mean, anyone would take $30,000, right? That’s great. You do that over 10 years and you invest it. I always tell people, invest it in the deals that we’re doing. Let’s just give century old numbers, all right. The stock market. Let’s just talk S&P 500 only. S&P 500 is around a 9% to a 9.5% return before taxes. Okay? So, it’s actually less after taxes. So, 9% to 9.5%, let’s just be generous and call it 9.5% for the last 100 years, okay?

Alternative investments are just under 15%. So, you have over 50% greater return on your money in alternative investments. And then what we’re doing in Lifestyle Investor, we’re generally outperforming that. Okay? But let’s just use 15%, 15% on that money over 10 years. Now, that’s over a million dollars. But let’s take that out 30 years. That’s over $13 million. That is a life-changing, legacy-changing, family-changing money all from just taxes. And by the way, I guarantee for entrepreneurs, we can save you way more than $30,000 a year.

Allan Dib: I wish it was only $30,000 a year that I’d blown. And the thing that I’ve learned, and I’ve learned this in many areas of my life now, in my health, in my wealth, in my business, that it’s on you to know the core strategy. Like, yes, CPA can help. Yes, a tax strategist can help. Yes, all of that, but you’ve got to be the one driving it. So, no one’s going to ring you up and say, hey, I found a new strategy that you could incorporate here or this way or whatever. So, you’ve got to really be on top of it. Same with your health. No one’s going to ring you up and say, hey, I think you should go do this and this test or whatever. So, you can have your team of advisors, you can have your strategy team and all that, but you’ve got to really be on top of some of the core things in your life.

Justin Donald: Yeah. I try and share with people that the story for me is I tried to outsource my financial education to others who are experts. And I found out real quick, I mean, look at all money managers. In the last 15 years, only 5% have outperformed the S&P 500 index. So, that means 95% of money managers out there, you are going to pay more for less performance. And it gets even worse, over the last 30 years, it’s under 1% that outperforms the S&P 500 index. So, if you are investing your money for the long haul with a financial advisor, there is a 99.9% chance you are going to pay them more money to make a less return, lesser than what you would if you just invested in S&P 500 index on your own. Okay? So, knowing that, I totally shifted my strategy and I said I can’t outsource this to someone else. I have to in-house this. This has to be something I choose to learn, get good at, and take ownership of.

And tax strategy falls into that same bucket, right? I cannot outsource this completely. If I can find the right tax attorneys and tax experts, which I have, they can be a component or a layer of it. But I still need to be doing my homework and my research and I need to be upping my game in the tax world, coming up with creative strategies. I just sent one to my attorney and to my CPA this week that I found, and I was like, “How have we never found this one? Tell me this doesn’t work. It looks to me based on the tax code that this works. How have we missed this for all these years?” But they didn’t catch that one and I did. And it’s to the tune of about $150,000. That’s real money. But we wouldn’t have found it if I wasn’t studying it.

Allan Dib: So important. And now, I’ve gotten to the stage where I spend a certain amount of time on my wealth strategy, just like I spend certain time on my health and things like that. So, just having allocated time for that because we can get so busy in the weeds running the business. And our biggest expense like tax, like all of the investing and things like that, just kind of goes by the wayside.

Justin Donald: Yeah. Well, we’re kind of wrapping up on our time here. Tell us where we can find more about you because today has been invaluable. This has been awesome. This has been really wonderful for me and I’ve got to imagine other people are really enjoying it too. So, where can we learn more about you?

Allan Dib: Yeah, I’m at LeanMarketing.com, and my books are The 1-Page Marketing Plan and Lean Marketing. And how about yourself?

Justin Donald: You can go to LifestyleInvestor.com. We’ve got free resources to all different types of courses and masterminds and masterclasses, but probably the best place to go if you want a strategy session where we can help kind of create a plan for you, specifically geared towards where you are and where you want to go, go to LifestyleInvestor.com/consultation, and then one other gift I’ll give your audience is if you go to LifestyleInvestor.com/roadmap, we have a two-hour session that we did, my COO Ryan Casey and I on the asset allocation of the billionaires and how they do it, how they break it up, and we get into a lot of details. And then we talk about really the road map to passive income with a passive income calculator, so you can actually figure out how to hit your freedom number through asset allocation and through the returns in each category.

Allan Dib: Amazing. Thanks so much, Justin. It was so, so cool catching up and talking to you.

Justin Donald: Thank you. Thanks to you as well, Allan. Thanks for coming into town. This is a blast, always is, hanging out with you. And I look forward to the next one, and I love ending every episode here to our audience with a question to them and my question is, what is one step you can take today to move towards financial freedom and really move towards a life by design? Most people live a life by default that’s not on their terms. How do you move towards a life by design, one that you want to be fully invested in on your terms? So, what’s one thing you can take from Allan today to move in that direction? Thanks, and we’ll catch you next week.