019: How Failure Makes Us Better Investors, Leaders, and Parents with Aaron Amuchastegui

Today, I’m speaking with Aaron Amuchastegui. Over the last 10 years, Aaron has built multiple companies and websites, bought and sold over 700 houses across the United States, and helped take all sorts of ventures from broke to blessed.

I love Aaron because in addition to having a ton of successes, he’s had his fair share of failures, and he’s always been humble enough to talk openly about them. It makes him an amazing leader and a really captivating speaker, as well as a very honest investor who’s built a killer lifestyle for his family.

In this episode, Aaron shares the story of how he lost everything, rebuilt his finances on his terms, shifted his mindset and his values, and inspired his entrepreneurial family to carry them on.

Key Takeaways

  • How failing to pay attention to his cash flow left Aaron with nothing despite having a million dollars saved in the bank. 
  • The mindset shifts that helped Aaron start thinking about the long term when it came to investing, well-being, and even his kids’ homework.
  • Why there’s never been a better time to question the established systems of school, work, and retirement.
  • The value of peer groups and mentors to help you rebuild yourself. 
  • How Aaron thinks about recurring revenue businesses – and why he’s currently so excited about software companies.


When things are going good, you have the money. When things are going bad, you can lose it all in a heartbeat. - Aaron Amuchastegui Click To Tweet


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Connect with Justin Donald


Justin Donald: Alright, well, I'm excited to hang with you here today, Aaron. And this is fun because we had part 1 last night, hanging out, watching the Superbowl, checking out some investment properties that you're looking at and by the way, gorgeous, gorgeous homes, I might add, but I'm so excited to have you here to talk more and take a deeper dive on what you do and just the killer lifestyle you've built for your family.


Aaron Amuchastegui: Hey, Justin. Yeah, it's always fun when we get to dig in with these podcast episodes, with people that we know or have a relationship with because, when we're all hanging out as families or when there's 10 or 20 people, we don't have an hour to actually dig in and ask specific questions and go deeper and deeper and deeper. So, I'm glad that we're going to have a chance to talk about stuff today.


Justin Donald: Yeah, and one of the things I love about you already is just how open you are and how just humble you are that you're willing to share stories of successes, but also failures. And I think that that really makes for a great leader and a captivating speaker. So, I know that you've shared a lot with me, and I'm excited about it. I'm really curious what it was that got you into investing in the first place?


Aaron Amuchastegui: Yeah, it's a long story, but I'll try to shorten my long story to get to the meat of it, but I have a wife, I have four kids now, we had tried a bunch of different businesses. When I first graduated from college, I graduated at the top of my class in construction management, as the height of the housing boomed in 2005. I got heavily recruited in all these different home builders like, come work for me.


I won a couple of these national championships. And everyone's like, oh, come work for us, come work for us. So, I kind of had to choose my place, I got to choose my company. And at the time, I was going to school in Cal Poly San Luis Obispo and I just wanted to stay here privately on a builder, a much smaller company. I've done a couple internships, they gave me a chance at what was kind of a higher entry-level job, I got to kind of run a division, I got to run a little area, our own little housing projects. And that was really, really fun and exciting for me.


And for a fresh out of college, it was like making really, really good money. Yeah, it being at the height of the housing boom, as fast as we built is probably a lot like now, because as fast as we built the houses, the houses would sell. And we were golfing every week because it was really easy. We had the system, the system was working. It was a really bad expectation what life was going to be like.


And so, at first, it was like, okay, I've made it, I graduated, I got the job, I'm making six figures, living the dream, let's have our first kid and the 2007, 2008 market started to crash. So, that was my first example of like, what happens if life is taken away. And we laid off, I don't know, like 70 people. There were five or six of us left, we had to move from Santa Barbara to Sacramento where the company that I was working for, because there were like, the owners and me were the guys that were left. And it was like how to undo this builder. And it was a really rough, rough time.


During that time, I kept trying to start a bunch of different businesses, because we went from getting paid a lot to not working very much to paid half what we used to and working twice as hard. And we were doing the manual labor ourselves and doing all this fun stuff. And I'm like, that's not why I went to college to go do this side. So, we kept trying to start a bunch of different businesses and nothing was working. I found a niche that became buying foreclosures, fixing foreclosures, and selling foreclosures. And at the time, nobody was doing it. The first time we went to an auction, there were three other people at the auction, there were no manuals, there were no books, there was no anything.


And for the next four years, we made a lot of money doing it. And I still didn't have any investments. People would say, “Do you own your house?” I rented my house back then. People are like, “What do you mean? Why don't you own a house?” I'm like, well, because I want to get a deal. If I'm not going to buy a house, I get a deal. And if I get a good enough deal, I'm going to want to sell it. I could look at a house and said I could flip it right now to make $10,000 or keep it as a rental and only make 100. And that was like, I was never even going to consider that.


2013, my life did change. I had a million dollars in cash saved. We had money saved, but we still weren't investing. I hadn't met any investors, I didn't have any mentors. We weren't spending money properly. And all of a sudden, a lot of people came into our business. There were a lot of big hedge funds that started competing with us. I had too many employees, too much overhead. We knew that we were kind of burning money because we would now go to auction every month with the same employees and the health plans and the company cars and weren’t buying any houses.


And I remember, we just bought a first house to live in. And I called my wife and said, “Hey, I need you to transfer some money from your real estate account over to this one because I don't have any money in my account to make payroll.” And she goes, “I don't have any money in my account to make payroll.” And we're again, beginning here like a million bucks cash just sitting in a bank account doing nothing. And we weren't investors at the time. And then, we weren't paying attention to our cash flows. And so, it was like all of a sudden lost everything. And the business wasn't working anymore.


So, we spent a couple of years in that space of going like, man, like trying all these new things and hustling and applying for jobs again, saying, I may have ever got another chance to do stuff, I would do it differently. I'd be a better steward of my money, I would give more, instead of buying stupid sunglasses and stupid cars and things like that, I would invest in things that mattered like memories with our family. And I remember, I just started to kind of buy some longer-term assets. I bought one apartment by accident, kind of when I was doing a bunch of the… when real estate was going good, somebody say, hey, you gave me one as a deal, I kind of thought of it as a flip, but when everything went to crap, I was getting some rental money from that one. And I started to see that side of it.


Around that same time, I got a new chance to buy foreclosures again. This isn't in a Texas market where there wasn't any competition. It was like getting that second chance. My wife and I had to like rebuild our life, rebuild our faith, rebuild kind of everything through that time. So, we'd be ready for that next moment. And all sudden, we got this new moment, but oh, we could do this differently. So, we bought our first set of houses. And I went to this, it’s a single-family rental conference. And when I went there, at the time, there were only 10 companies in the US that had a thousand or more rentals.


Justin Donald: Wow.


Aaron Amuchastegui: Only 10 companies in the whole US had a thousand or more rentals. And I had flipped a thousand in the past few years and thought, whoa, and that if a guy like me could do it, if I could have just kept those, I'd be one of the 10 biggest holders. And I started thinking if I just kept 10%, if I just kept 100 houses as rentals, when I lost everything, it wouldn't matter. So, it changed my mindset. So, then when we got that new second chance to become stewards, we said, “Hey, now, for every 10 houses I buy, I'm going to flip one or two, but I'm going to keep seven or eight as rentals instead. I'm going to take this a lot slower.” Instead of spending our money on stupid stuff, we started giving away like 30% of our income for part of that just to say thanks. And then, we started traveling.


So, our transition of learning to invest was because we didn't for a really long time, we had a lot of ups and downs in business for a really long time, and it really taught me the lesson that when things are going good, you have the money, but when things are going bad, you can lose it all in a heartbeat. And it made me realize, I should invest more for the long term and less for the short term. It is a total change in mindset.


Justin Donald: Well, you have such a great story and such a unique perspective, Aaron, because you've experienced the peak when everything's going great, and you're what feels like unstoppable, but then you've also experienced losing it all. So, it's one thing to never have had it. It's another thing to have had this unbelievable life. And you could get any toy that you wanted to get, and it was just stripped away basically overnight and to the point that you guys realize, whoa, we're out of money. How do we pay anyone?


Aaron Amuchastegui: Yeah.


Justin Donald: And then, from there starting over and saying, Hey, we're going to do it right this time and we're going to be charitable and giving and good stewards of our money, but I love that you didn't do it just for work, because you have such great intention with the time that you spend with your family and the experiences that you have. And I'd love for you to share just some stories because you've traveled the world with your family, you've gone on extended, like when I say extended, I mean my family, we’ll take a couple months’ vacation, that's extended in my world. You've taken like whole long trips for a year, half a year, and have really created some cool ways to educate your kids. I'd love to hear about that.


Aaron Amuchastegui: Yeah, that’s part of that mindset shift, when you have it all and then you lose it all. And it was really because we didn't know any better. So, people that are just getting started, it's kind of like, yes, I have the benefit and like, I had it all, then I lost it all. So, now I learned to invest, but if you're just getting started and you haven't lost it all yet, there's also an idea of finding mentors and guides to help you because they are out there. I didn't know there are people out there that could have helped me and I think a lot of I'm living a great life now at 40 years old, but like my wealth and my opportunity and my chance to get back would be so much greater right now, if when the money was really coming in, I would have had those guides. So, God has blessed me with that second chance to be able to do it in that downtime, 2013, we lose it all.


And as a father, I mean failure is an epic feeling, and it's the feeling you feel every morning, it's the feeling for the longest time, and it is so hard to not get stuck in depression. And there was so much during that time, it was like, man, but I guess the good part about depression and the good part about reflecting on the mistakes is like, you shouldn't be stuck in the mistakes, but I thought about them every day and I thought about them down to the detail. Man, I can't believe I did this. Oh, I can't believe I did this, I can't believe I spent money on that, I can't believe I made that decision, I can't believe we went over there, I can't believe we didn't do more trips when we had the money, because what we did have during that time was the memory.


So, we didn’t do some trips during that time. And so, the happy stuff that we got to think back of those years prior was the experiences, was those experiences over things. So, we got to hang on. So, two things got to happen, I would say our two years of really being at bottom again. And I met other bottoms in my life that should have been my bottom. That was just a bad business experience to get me there, but during that time, I got to think every day about what I did wrong and what I would do differently if I had another chance. And then also, we got to reflect back on the things that didn’t go right. And what we kind of realized was things were things.


When we lost all of our money, we could look around our house at all these expensive stupid toys, my $2,000 sunglasses, and then you're going, I can't even sell these for 100 bucks to pay my mortgage right now. I can't believe I did this. So, that whole experience over things mindset got instilled in us, hey, we should do more experiences over things, more experience over things. If we ever get a chance, again, we're just going to do experiences over things. We're going to go on fun trips and things as families because even if and all that was with the mindset that was like, so now that we're doing good again, even if we lose it all tomorrow, even if we lose all of our money, all of our business, we'll still have the experiences, we'll still have our experience with our family, because that had started to become the most important, that started as gradual from going, alright, dad's going to go, I'm going to go fly out here to go look at some real estate, you guys should come with me. And the kids would come out. And at that time, they were going to a good private school. And so, like a week, a month, they would come on trips with me and then go back. And we would start to gradually and gradually kind of travel more and more.


On one of our trips we went out to, we were really having this tough time because now business was going well, again, financially, we're doing good. I was traveling a lot for work. The kids were still going to school, but we were caught up in this mindset of better, better, better, it's like the rat race. I remember when the teacher told us, like our daughter was in second grade. She was reading in a fifth-grade level, but we should really get that up to, like she should really be doing even better. Remember when she was like a kindergarten, going into first grade, we made her do summer school because we felt like she was behind on her reading. And instead of questioning like, well, under what measure is she behind? We were like, okay, we're going to go to summer school.


So, we were pushing harder and harder. And our kids were really starting to become miserable with that. And my daughter was such a good student, she had earned this pass of like, you don't have to do homework. It was like a get-out-of-homework free card. And one night, she's like, Hey, I'm really tired. She'd done gymnastics. “Guys, can I use my get-out-of-homework free card?” And we're like, no, like, you got to do good. It's your homework night, you gotta do it. And she said, “but I earned it.” And she's crying and we're going to bed, going like, man, there's got to be more to all this. It made us really start to question kind of the school system and the thought process, but there wasn't much we could do about it.


One of our trips that we did, we did a trip to Yosemite for about two weeks. And we went down there and we got down there and we were planning on it. We pulled our kids out of school to go do it. We had a great deal on it. We're like, let's go. And the plan was I was going to work, they were going to do their homework, but we were also going to be on vacation, because we had done a lot of vacations like that, where we would go, but we were still kind of tied back home. And we get down to Yosemite. And it was at a time when our kids were, especially my oldest daughter, she was in second grade, she was very stressed about school. She was like one of the best students in the class, very stressed about school.


We got down to Yosemite, and there was no cell phone service, and there was no internet access. And my daughter had forgotten her homework. And so, a couple hours, we all had a lot. I was panicked about my work, Kaleena was panicked about her stuff, Maddie was panicked about her homework. And then, we got to a point where like, you know what, we're just here, let's just do it. Let's just enjoy it. This was forced on us. And we had an epic time for two weeks. Every day we went hiking, we went to Ranger Talks, where they got to teach us things at night, we got to go on tours, they got to learn about glaciation and all sorts of fun stuff, and bike rides and all these amazing family experiences. We had like two weeks of them learning so much about life and nature and we got to have all these epic experiences.


And we started on our drive back to Sacramento at the time, it’s a couple hours of drive, after two weeks of like, wow, feeling so refreshed, but on our drive back, we could see Maddie starting to get stressed. And she's like, Oh, wait, I've got my homework due and we forgot to bring it. And on our way back, we got home, and I said, let's just sit down and try to focus on this thing. Let's just sit down to sit down, let's do your homework, we're just going to get as much done as we can, over the next couple hours. And because of stress, because of focus, because of everything, we got to sit down and we finished all over two weeks of homework in a couple hours.


Justin Donald: Wow.


Aaron Amuchastegui: Yeah, a really interesting part of that was I also had to teach her long division in that one, and I talked about that a lot because I remember, because that's like a somewhat complicated thing, and we did that in that amount of time, too. She was relieved that we got the schoolwork done. And I remember picking her up from school that day, and she was, Dad, you'll never believe it, I'm the only one that knows how to do long division. They didn't even cover that during the two weeks we were gone.


And so, that really helped us change our mindset of school. We started traveling more and more with that whole mindset that we wouldn't do any homework when we were gone, then come back, we do the homework on a weekend and knock it out. The whole four-hour workweek mindset was something that really helps me put my business back together when we started to get those second chances. And so, getting combined that with their education was cool.


We started pushing it further and further, we ended up pulling our kids out of school completely. The first year when we did, every month, we would spend three weeks on the road and one week at home. Sometimes there's only two or three days at home, sometimes we would push it six to eight weeks being somewhere, come back home for two or three days, and then go again. That whole year was so many amazing experiences. And that was the coolest thing because we were like, man, we can't go in that, even if we're broke tomorrow, we're still going to have all that experience, all that stuff.


So, as a mindset shift of the way we started looking at education, the way we started looking at how our kids were really feeling, that we wanted our relationship with them to be the most important. And we started pushing the envelope to say like, hey, right now things are good. While it's good, let's go get some experience, let's make the most of it. And, yeah, we ended up, now we've got a book about that, my wife runs a whole kind of lifestyle group about that. I mean, so many things that we've learned along the way that kind of created those values by accident. A lot of it was like we were never planning to really change the whole school system, like for us, we found out by accident that we could do all Maddie's homework of over two weeks in two hours, and she would be a happier kid. Well, we learned so many times, like if we get another chance, we're really going to make every moment count now. And that's a big part of how we do it.


Justin Donald: I love that mindset shift. And I talk a lot about this in my book, where it's all about that mindset and it's about getting outside of what's normal or what's programmed, what you've experienced from other people, and really kind of creating your own path and figuring out what it is that you want out of life, the objectives that you have, whether it be investing, whether it be education for your kids, even education for yourself. And I love that you've done it. And I also love this mantra that you have, Aaron, which is, hey, we've been given a second chance, we got to run with this, this is a sign that what we were doing before, it wasn't as good or as healthy, or it didn't really give us what we needed. And now, we have a chance to do it in a different way. And I love that.


And I actually do want to give a shout-out to Kaleena’s book because my wife and I are huge fans of it, and I think it's great. And my wife thinks that Kaleena is fantastic and her group is fantastic and loves talking to her. So, tell us the name of the book.


Aaron Amuchastegui: Yeah, so you can find it, it's called The 5-Hour School Week, and if you're on Instagram, that's where my wife does absolutely most of her kind of content, has a huge following, interacts with people, has built so many friendships there, like works with people on there, so it's @5hourschoolweek. Website, you can go to fivehourschoolweek.com, or any version of that type, numbered, we've got all the URLs for that one, but yeah, and the book, you can find it on Amazon and everywhere books are sold.


When we first started doing our journey, we were sharing it on social media. And people started to see what was going on. And we were like, in London traveling, my son was 1-year-old, and I had my three girls, and we're sharing and people just started to go, like, what are you doing? How are you doing that? And we were like sharing where we were, but we weren't trying to say anyone is doing anything wrong. And people just kept asking, and just kept asking questions, and she would get like dozens of messages a day from people going like, I don't get it, why are your kids in school? What are you doing? What is this whole mindset?


We were sharing some of the things we were learning, and I kept telling her like, you need to write a book. You need to write a book and share it. And really, the mindset shift of that or like the idea behind it was saying, all these people are asking questions, like, if you write a book, you only have to answer it one time. And we said, if there's one family that you can help to question the system, then it's worth it. And what I mean by that is, we did it the way that we thought we were supposed to, for no other reason than because we thought we were supposed to.


When my poor little daughter was crying, saying, like, why do I have to go to summer school? Or why do I have to do this? When she was already like, at the top of her class, we never questioned like, is there another way? Is there another option? Could we have a more fun experience? But because of our huge success and our failure, and then our challenge to do things better this time, that helped us kind of go like, maybe there is a better way. The more we started to research, the more we saw, like, we weren't the first to do this, we weren't alone to do this. We were just proud to be able to start sharing it. There are so many other ways.


So, the biggest part of the book is trying to tell people our story, how we accidentally figured out that there is a better way for us, how everybody's way can be different. There's the best way for your family, Justin. There's the best way for somebody else's. And that could involve all sorts of versions of school, people could be living exactly right now with their kids going to the public school, they're going to the practice or whatever, but every family has this kind of perfect opportunity out there for themselves to make it whatever they are, and the ability for somebody to question like, maybe there's a better way than we're doing it right now, because we never felt like the permission to be able to question.


So, the book is just supposed to be someone's ability to say, Hey, you have a right to question what's going on, you're not alone. If you're thinking like, hey, my kid has too much homework right now, or, hey, I can't believe they taught him that in school today, or maybe this whole social thing isn't the way I want it to be, you have a right to question it, and then go seek your answers.


Justin Donald: Yeah. And if there is ever a day and age to do that, and question the system or question what's going on, now is that time because you will not be looked at as an outcast, because tons of people are switching to a homeschool model or some variation of a homeschool model or a variation even of just a standard curriculum that they're in, but maybe, it's in some days and out the other days or shorter times or supplemented education elsewhere, more with like groups or pods, it's really fascinating.


And I think what's really cool is, you guys really champion this whole aspect of experiences. And so, I resonate a lot with you, because that's how I like to spend my money. I don't like stuff, but I love experiences, I love to travel. And you're opening up an opportunity here for people that maybe haven't questioned the way they're doing things, or maybe it's an excuse, well, I can't travel because of school for my children, or I can't travel because it would get in the way. And you're saying no, actually you can, and you can support it. And this is something that my wife and I built, this cool curriculum for our daughter, where we've got all these cool places around the world that we're going to travel to, and the education is going to be part of that.


And so, it's not about what's right and what's wrong. It's just, Hey, what are options that support you and your family and what you want? And maybe you've never even considered this, but it's a cool way to kind of do life on your terms, with the values that you have in place with the people that you really want to spend time with the most or look up to the most. And it's getting out of this way of being a passive bystander, just going through life on autopilot and actually being proactive and saying, here's what I want my life to look like and here's what we want from an education standpoint, here's what we want from an investing standpoint, here's what we want from a lifestyle standpoint, and getting clear on all that. And I love it.


And I love that you have a successful business, multiple businesses, your wife has a successful business, you're teaching your kids to know and understand how to do it, but you're doing it from a standpoint of values first and family time, trumping all, and I think that that's really amazing, Aaron.


Aaron Amuchastegui: Yeah, thanks, man. There's never been a more socially acceptable time to be living this lifestyle, like it is so much easier. Her book has absolutely blown up this year because of that. I think partially because people have seen like, with their kids sitting at a computer all day long, they're kind of like, Whoa, or people now are doing that while they're working from home and going like, so I'm doing this and my kids doing that. Like this isn't fun. Like, part of the reason we want to be entrepreneurs is so we can have the flexibility to do what we want in life, but I get on stage and tried to teach people about Hal’s Miracle Morning and Tim Ferriss’ 4-Hour Workweek, I would say like, why do you want to be rich? Why do you want to have all the money in the world? If you have all the money in the world, what would you do? What would you spend your days doing?


And then, I try to challenge them to actually do it now, to figure out could they actually do it now, why wait until you're a millionaire? I bet you can actually just change some mindset. So, now there's more of a time to question the system, to have the ability to work from home, to school from home, to build your own, whatever, because everybody is doing it. The way that you're creating the system with your daughter, I remember, like, before we went to Iceland, we're like, well, let's study a bunch about Iceland before we go, let's make some videos, let's do some cool stuff. And then, we go, it's going to hit before we go to London, before we go to Paris, where we did some of those really big trips.


We spent a couple weeks down in Cuba. And when we went down there, we stayed at an Airbnb that didn't even have windows. It had holes where the windows were supposed to be, but we didn't stay like in a super nice hotel, we stayed like in a neighborhood. In my mind, it was like you first pulled up, I was like, I can't believe we're going to stay here, but then we invest really, like fully invest in the culture and the experience and the lifestyle, and we're walking around, and just like getting to see how other people live. And those are amazing memories, amazing experiences, amazing ways to learn about socialism, about all sorts of things like restaurants that were hidden in people's houses, where they could sneak you in, but they couldn't have a storefront. And they weren't even allowed to run those businesses, but they're trying to be entrepreneurs.


And then, at the end, with so many different experiences, and now my oldest daughter, she's a great entrepreneur, she started a few different businesses, like, she'll be way more famous than I will be super soon via online with all the different stuff that she's doing. I think she's in this animation stuff, she sells custom-made stickers, like high-end vinyl stickers, there's stuff that I hire to do now. So, we got to change our lifestyle. And for great reasons, we get to encourage people while you're doing it, and then it gets to rub off on our kids, and my oldest daughter is the best example of…


I mean, the first couple of years, this was like a gamble. Like, we think we're doing the right thing. And we'll know in 10 years if we mess up our kids or not. Now, that's still true, like we'll know in 10 years if we made the right bet or not, but now, it's been seven years. And Maddie, my oldest daughter is the best example of she is so much happier now, so much more confident. She has several different businesses, lots of great friendships, people that she's friends with because she wants to be, not because she has to sit next to him in a classroom. And getting to see her really thrive in life, is that benefits us, that's why we do it all, that's why we're entrepreneurs, that's why we also add the homeschool, the experience, that sort of thing.


Justin Donald: Well, you guys have such a great lifestyle, and I love it because your lifestyle first. It's figuring out what values matter most and then you're living those out. And I think that that's tremendous, but it's also a great reminder that peer group matters, and your coaches and mentors matter. And if you're not intentional about who you're bringing into your life in those roles, then it's going to default with people that you're spending time with. And they may not be the people that bring you up. Hopefully, they are; likely, they're not. And so, you've been very intentional about putting mentors in your path and learning. At first, you didn't have it, you saw it, you wished that you would have had it, you were able to then get some mentors in your world to help you. I think that's great, but what you're also doing is you're influencing the peer group that Maddie has and your kids have, and you're influencing their coaches and mentors, and what a great way to help your children get off to the right start in whatever it is they want to do.


As parents, I think it's imperative, like one of the most important things that we need to do is influence the peer group that positively influences the peer group and the mentors and the people that we surround our kids with, but we also need to do that for ourselves. So, how are we doing it for them if we don't do it for ourselves? And I'm curious how that has kind of proved to be a really good opportunity for you and how you've been intentional because, Aaron, you're incredibly intentional. This stuff's not happening by chance. This isn't happening by dumb luck. This is happening because you have set your intentions on what you want in life, what you want for your family, what you want for your kids, what you want for lifestyle, for travel, for adventure, you name it. So, I'm curious how you've really kind of manifested this in your life.


Aaron Amuchastegui: Yeah, I mean, the peer group is so important. Having mentors, having advice from people is so important, and I didn't learn that lesson until I was in my 30s. I had a very like, what should have been a normal childhood. Like, I went to school, I did public school, I went to college. And I grew up in this, there were like 20 kids I went to preschool with, I graduated from high school with those 20 kids, but I'd known them my whole life. And there were a couple hundred people that graduated in my class, but it's like, I never really had to learn how to meet anybody, because when you're young, you sit next to them in the classroom. I went to the same school, same set of friends forever. So, I never actually had to learn how to go meet people until I got to college.


And I really struggled with meeting people, I went to college, and I made a lot of bad decisions with just drugs and alcohol and just stuff that really got me down the wrong path, because I had this normal social experience that people are always like, what about your social life for your kids? Doesn’t homeschool mess them up? Well, I had a very normal social experience growing up that people would say, and it really did not prepare me for the real world, it wasn't a real example of what life was going to be like.


So, I got to learn early in my 30s that, man, I wish I would have had some mentors, I wish I could have talked to somebody about, Hey, I'm making this much money, what should I do? Or hey, am I making the right decisions? Or hey, all of a sudden, there's a new competitor in my business, and I'm burning a couple $100,000 a month in overhead, but I don't have the moral strength to be able to actually lay people off. It was like somebody to help me through those things, I joined my first mastermind member set of peers as I joined GoBundance.


And it's a great mastermind, you've been to events with me, it's a really fun group of guys that I got to talk about and that was the first time I actually got to talk to people that were experiencing the same things as me. And I'll tell people, if I would have known GoBundance, or had people like GoBundance around me in 2010 and 2011, I knew worth hundreds of millions of dollars now, I would not be working at all and I would be even getting to be able to do so much more because of just how much I have gained from those experiences since I got them.


So, I learned early in my 30s, and there's the book that says you're going to be the combination of the five people you hang out with the most, you get to be more about who you're with. And a big reason we started to homeschool was because we started to really believe that, we understood that we were going to be about our peer groups. So, we would join mastermind, so first, I joined GoBundance, and then I saw these guys, Jon Vroman, Front Row Foundation, great friend of ours, and he started Front Row Dads. And I saw these guys going and spending a weekend just masterminding on being better dads.


And I started to see people, like online and other places that I would see them performing at high levels. And I would say, I want to meet that person, I'm going to meet that person someday. And now, some of my closest friends have been very intentional about some of that stuff. When I was at my bottom in 2012, and had still yet to have gone to any self-help, anything, I read Hal Elrod’s Miracle Morning and Tim Ferriss’ 4-Hour Workweek that helped me pick myself up and start focusing on rebuilding myself.


Well, now, Hal and I are great friends. Now, Hal and I are chatting all the time. And he was hanging out with us last night, too. And there's a lot of people in my life that before I had even started setting intentions for, I could look up to them, they could give me great advice. And now, they're my closest friends that I get to hang out with all the time. And I think it's really possible, I mean, I even challenged people, like find someone super famous that you're like, Hey, I’d never get to meet that person, but really work toward it. And I've got to have friendships with a lot and conversations with a lot of people that I would have thought was impossible.


How that relates to kids is really realizing the same thing. So, we realize, like, Hey, you shouldn't just be friends with the people that you're next to, you should be intentional about who you give your time to. You should hang out with people that are going to help better you. Like, you should really focus on who you hang out with, but yet, at the same time, so we were bettering our lives. I was going to Mastermind’s, but my kids were going to school and they had to become friends with whoever they were sitting next to, because the teachers don't let you decide. No, you have to be friends with everybody, even if they have good values, bad values, they make good decisions, bad decisions. Like you have to be friends with people, even if they're mean to you, even if you don't share anything in common. And we don't believe in that.


And one of the biggest benefits of homeschool, people get so worried about, what about socialization? Well, I love their socialization so much more now, because they get to choose their friends. If they don't want to be friends with somebody, we say, okay, you don't have to be friends with that person. We don't force it. Sometimes I'm disappointed, like, there's times when we're like, Hey, friend of mine, oh, let's have our kids hang out and then they don't get along well, and it's like a bummer, because you're like, Oh, I was really hoping for that, but that was our old lifestyle. Our old lifestyle was like, No, you have to do this. You have to be friends with that person. You have to do that.


So, now, they get to choose. My kids’ closest friends are, I mean, now, a lot of us live in the same city, so it's cool, but for years, they would get to talk to them on Zoom and they would get, when we would go to these family meetups, to other countries and place around the US, that's when they got to hang out with people they will like. So, now they choose their friendships too. They hang out with people that build them up, they hang out with people that support their values, they hang out with people that make them feel good. And I wish I would have learned when I was 10 and 15 years old, that that's how I should choose my friendships instead, and that I had a right to choose my friendships.


Justin Donald: No kidding. Imagine knowing that and learning that. And it's amazing to me, too, like, my mom is very intuitive. And so, she'd always say, and I admire this about her, and I feel empowered to have the same conversations with my daughter, which is, she would say, Hey, I think this person is great. And here, the qualities that I see. Or hey, I don't know that I like the influence that this person has. And here's why, and I can tell you 100% of the time, she was right, and I didn't see it. So, I see that as a huge role.


And you were talking about peer groups and who you hang out with. And I've had David Osborn on the episode on the podcast before, a handful of episodes ago, and he's a mutual friend. He was hanging out with us last night for a Super Bowl party. And I know you guys have done a bunch of deals together. And one of the deals that you've done, I love, I don't know how much you want to go into it, but it's a program or software, a platform where I've done some investing, and I think it's really cool. So, I'd love it if you feel like you want to share any of those details, but I also get that some of this is proprietary, so you may want to keep it confidential.


Aaron Amuchastegui: Now, man, we really believe in an abundance mindset, with the idea that there's plenty to go around. One of the books that we released this week, not this week, this year was like how to buy foreclosures on the courthouse steps. And all of my secrets are in there, all of my secrets down to the very details are in there. And I had so many people go; the game of the courthouse steps was that it was a secret. Why would you tell anyone your secrets? Like some people were mad at me, like friends, they're like, why would you do that?


I would say because I can tell people everything that I will do. And the people that deserve to succeed, they're going to take all my advice. And some people aren't going to be interested in putting forth the work, some people will even go, Oh, that's a lot of work, I'm going to go find something that's less, which is power to them. And some people are going to go, Wow, jumping over fences and checking out these deals, like the rush of that is exciting. So, I believe in that abundance mindset that we can share some secrets in it, and it really doesn't matter.


David and I are great friends. And he was one of the first highly successful people I got to meet in GoBundance. And part of that gets to become the power of intention, too. So, now, we're very close. And when we first met, I was like, Wow, that's pretty great that he has all of these businesses and the horizontal income, and how that's going. And now, we're business partners in several businesses, and I hang out with him more than I hang out with just about anybody.


And one of the first times I reached out to him was kind of as a mentor, I had been a subscriber of this company called Foreclosure Listing Service, and that's our company out in Texas. And I would buy the data, at that time, it was just a spreadsheet. And we had to buy the spreadsheet. And I go to auction, I'd buy and sell houses. First time I reached out to David was like, hey, it was after the GoBundance meetup, I was coming to Austin, I just bought some houses down there and just wanted to say hi and tell him about what I was doing.


And the first time we were at the meeting, we talked and I shared with him my story. He shared with them his ego, so how can I help you? And he was kind of like, so what do you need? And I said, I don't have an ask, I'm not here to ask you to partner on anything, I was just coming to meet you and tell you that when you spoke, it resonated with me and a little bit about what I'm doing, and wasn't thinking we were going to do any deals together. It's just like to kind of meet and hang out, and told him at that time, I was working on this deal with these guys, the Roddy’s for the Foreclosure Listing Service company.


The next year, I had built this white label software. I built my own software to buy foreclosures on the courthouse steps. And again, all my secrets were in there, everything that it was going to take for me to get it, and I had reached out to those guys at that time. I said, Hey, I want to sell my software to your customers. And they were looking at that, we looked at it, we built this white label, I spent about $50,000 making a version of my personal software for others. At that time, I didn't have very much money. I was just now getting good again. So, $50,000 like all that I had, like that was my investment, I was investing in this.


And long story short is we didn't get to come to a deal, because at the time, now the software is ready, now ready to release, I proved I could get it, we couldn't agree on all the terms of everything, which is disappointing. And I remember, thinking like, God, why did you send me down this path, if I was just going to fail? Like, I didn't have the money to do this. I remember coming up with this idea, like I prayed about something, it came to me, I'm like, Alright, this is the path I'm supposed to go on. And I'm like, why did I come up with this deal?


I didn't think much else of it. And a couple years later, the owner of the Roddy Foreclosure Listing Service, he passed away. And I'm going to reach out to the family and say, “Sorry to hear my condolences.” And that was it, and I didn't think anything else of it. And one day, I got a call from them, and they reached out and said, Hey, so I remember you showing us your software that you wanted to do, and that didn't go anywhere, but do you have any interest in buying the company? And one of the funny things about my story of David, that time, so I reached back out to him, I only had a couple conversations with him at that time, but I said, Hey, I need your advice on something. Could we do the talk? Can I have a few minutes of your time?


I'm telling him, Hey, I've got this deal. I'm trying to figure out how much it's worth, I don't know how to value it, and what do you think? And he goes, Alright, let me get you some info. And he'll call me back. And it’s probably a day or two later, and he said, Okay, the conversation was something like, Hey, I'll tell you, but I'm only going to tell you if you let me partner with you on it. And one of the funny things was, it had been like on one of his vision boards on the Roddy report for some time. He’s very well known in Texas in real estate. He had wanted to be involved with the company for a long time.


So, that became our first partnership and our first partnership deal, but the way that we structured a lot of deals is sometimes we go in on deals and we both pitch in equal money, and we both have different values that we add. And those are very simple. A lot of the beginning deals, though, were involved in me finding David as an investor or other people as an investor, they invest, they get paid back a lot, like how you've done your investments. And then, after they're paid back, then we share a partnership forever.


And that partnership involves various levels of involvement, but having a mentor that's also an investor, there are different roles. He does a great job at finding big picture stuff, he does a great job of helping me think about the things I'm not thinking about and introducing me to all the people I can think of. And I like operations, I like setting up operations, getting people in place. And now, I've done a few different businesses like that. Recurring revenue businesses are my new fun, exciting thing, like I do well, like buying and selling houses, and I do well buying and having rentals. It's very awesome, that's not as sexy anymore. Now, making money and what I get from my rental income is sexy, like, that's the lifestyle.


So, I do absolutely love it, but some of the stuff I'm the most excited about right now are these software companies, are these businesses, are the recurring revenue-type businesses, because I think they create this really cool opportunity to try something new, to like use our brain and learn some new things. They also have a possibility for some big like, exit someday, either really big horizontal income or a chance to sell it, but our partnerships are a great example of kind of like being intentional and setting visions for both of us, like future-type stuff, and then getting to work together and finding partners that you like, partners that you want to be partners with and being able to create some awesome things.


Justin Donald: I love it. That's so awesome. And thanks for getting into the details on it, because it is so fun when a mentor turns to friendship. You've got a mentor, and you look up to them, and then all of a sudden, you're friends and you're equals, and you both bring something to the table. I think that's cool. You mentioned horizontal income a couple of times. And I just want to clarify for our listeners that your earned income from your job, that's vertical income. And when you have assets that produce income, that is considered horizontal income. This is all terminology from GoBundance.


And so, I just want to make sure that every time that Aaron's referencing that he has this horizontal income, it means that he has multiple income streams that come from assets that don't require any of his time to be able to earn that income. And that's ultimately what you want, you want to move towards that. And it starts with just one stream of income, and then you want to add to it and ideally, even diversify across those horizontal income. So, maybe you have an expertise in one area, like Aaron has in single-family homes. And so, you can buy these, you can figure that out, you can scale it, you can cover all your expenses, but like Aaron, I have done the same thing where I've been in real estate and then, because I've figured it out, because I've mastered it, it becomes a little more boring. And I want something new, something fun, a new challenge, and I know that's what it is with the software companies for you. And I think that that's so cool because I see that show up the same way for me.


People ask me all the time, why did you stop doing real estate? And I'm like, well, I didn't stop, I'll still do it, I still do, but I've shifted my focus because it's about the growth and learning new things. And I actually like to be a novice all over again, I love entering a room where I know nothing. I'm the least sophisticated person in an area, and I've got to be asking questions, again, to learn. And the new business that I have, my new brand, The Lifestyle Investor, really stemmed from that. And I remember running into you actually, Aaron, at Traffic & Conversion Summit. And I'm pretty confident that out of 6000 people, I was probably number 6000 or number 5999 in expertise in anything online. Like I had never done it, I didn't know it. And it's funny because I've taken that info, and I've been able to build some online businesses like you have. And I think that that is just so cool.


I'm curious, with all the success you've had, you don't have to work, but you do work. And you do work, because you're finding new things that are exciting, but I'm curious, what is it this year that has you most excited? What's this year about for you?


Aaron Amuchastegui: And there's so much there that I want to just hit on first, really quick. We talked about mentors, like have mentors, have friendships, things like the Traffic & Conversion Summit, like I can't wait till we get to live events again, because when you get to devote three days of your life, just listening to people that are million levels above, like I left Traffic & Conversion with a list of 60 things I wanted to do. Well, I accomplished 20, but those 20s were game changers in our business.


And so, if you keep continuing to learn, like go attend things, invest in stuff like that, invest in podcasts like this, there's so many ways to get to kind of continue to learn as we get to grow that. And when Justin said horizontal income, we'd like to define that as like money that you get when you sleep. There's a GoBundance member that, like he was paralyzed for a certain amount of time, like some kind of sickness came over and then, for like four months, he couldn't talk or couldn't move or couldn't get out of bed.


At your job right now, like a lot of people that have normal jobs, if also you can't get out of bed for four months, like unemployment or disability is the only option, and that's not your same pay, but horizontal income is the money that you would get, if all of a sudden you were paralyzed for four months, or God forbid, you die, that your family would still get, except you don't have to work anymore. And we like to call our lives, like, if you can have enough horizontal income to cover all your expenses, you're a hundred-percenter. And that's what Justin said, well, if you get that, you don't have to work anymore.


So, in one sense, I'm a hundred-percenter, I could live the life that I want, I could live the life and not work again, but why do you continue to work if there's different things, there's more that we could be doing. It's easier to be a hundred-percenter during COVID, because I can't go to three countries a month. In the past, we could, like we're flying a lot less right now than we were. We're still getting as much as we can. So, the reason to keep working as for that next level is for those extra experiences, there's a lot of amazing experiences we've had, but one of the things that we can't wait to do is take Mike, when we have our next big exit.


Like, when we do that, we're going to take all of our family and our extended family over to Africa for a month and relive with the safari trip that I did. Well, if you're taking 50 people to go do something like that, that becomes pretty expensive, but what a memory, what a memory for everybody, a lot of people maybe would never be able to have themselves. So, that's some of the things that drives us. I also had a conversation with a guy. He was kind of like, Aaron, I don't want to create a business very big anymore. His business was worth a couple million bucks, and I just want to go deliver water to people on my motorcycle.


And it was very honest, he was like, hey, he really wanted to help these people in third world countries get water and he was having more impact. And I remember telling him, like, do you think if you sold your company for 10 million bucks, you'd be able to get more water to those people? And so, then you would if you'd like to do it yourself. So, you can deliver it yourself on your motorcycle and you can get 100 people water a day, or you could make 10 million bucks and put 10 million bucks towards something like that, and you can probably get 10 million bottles of water out there.


And so, the reason we still work hard is for what's next, is for legacy, is for raising the bar. I've got four kids. So, we've got enough for my life to be horizontal, but for all of my kids’ lives to be horizontal when they grow up and have kids and have that same life, I'd actually need four- or five-times horizontal income I have right now, if I want our generational wealth to be hundred-percenters forever and they want to keep raising the bar. This year, we are really excited about living in a new town and the kids getting involved in some new stuff.


COVID was really hard on our family in the sense that the travel was so much of our identity and so much of that got shut down. One of our solutions, we bought an RV back in July, we went on a three-month road trip, we hit 17 states, we were able to figure it out. So, instead of flying all over the place and doing stuff, we're like, let's go make the most of this. And we really got to look back at 2020 with some awesome memories, even though you would think that it would be the total opposite for people with our lifestyle.


I think this year, like what I'm the most excited about, everyone is content and happy with kind of this new idea of Maddie’s building a whole bunch of stuff online, taking acting classes. The girls are in acting classes and swimming and tennis, and they're making friends and they're getting involved. And everybody just kind of has a flow where it's very kind of low pressure. So, that's super exciting this year. We're going to buy a couple more businesses here. From the business side of things, I think there's some great opportunities to buy some other businesses, that will be great. One plus one equals three businesses, like this business is worth X, and this business is worth X, but when you work them together, there are three times as much.


We've had a couple of acquisitions that we bought some competitors, that we could essentially buy them even though they weren't profitable, because when we bought them, we got all of their gross profit, none of their expenses can be just essentially bought by their customers, like there's some neat things out there. I'm excited to do a few more of those this year, and try to do some more experimental-type real estate things, like some weird market pushes happening. There's some places where I think the market's going to go down. There's another place where I think we're going to see crazy skyrocketing real estate over the next year. And so, we're getting a lot of dust off of new parts of our brain, but family is really good and really happy and who knows what experiences we're going to have.


Last week, we bought some scooters, spent an hour, just like scootering around, the six of us, like around this park, and we had a blast. So, we're going to be doing a lot more stuff like that, every day, every week, like, hey, what can we do to make that most of the life that we're working with right now?


Justin Donald: That's awesome, Aaron. And I'm so glad, I'm so thankful that you guys moved from California here to Austin so that we can hang out more. I just think that's great. And it's funny, I mean, we've used so much of our time, it's flown by, I have tons of other questions and things we could talk about, but we'll have to save that for another time, but I am excited to hear, you and I will need to catch up at least at a minimum on some of these new real estate opportunities. I have some ideas as well, but where can our listeners find you?


Aaron Amuchastegui: Yeah, my name is super unique. So, if you start typing Aaron, you start Aaron, and you get maybe A-M-U-C-H done on Google, it's going to autofill you all the crazy questions that people ask about Aaron Amuchastegui. Most of them say Aaron Amuchastegui’s wife because, yes, she is way more famous than I am. And so, if you're interested in homeschool stuff, you really need to find my wife on Instagram, @5hourschoolweek.


I am really interactive on Instagram right now, and that's just @aaronamuchastegui. The aaronamuchastegui.com has a lot of different stuff about my businesses. I host a podcast, I host the Real Estate Rockstars podcast, where I talk a couple times a week about mostly real estate stuff. We just interviewed Justin for our podcast, too. So, your listeners get to learn more about you from the other side over there, but yeah, I love interacting with people. We've got the 5-Hour School Week book, the how to buy foreclosures book and all sorts of stuff, but if people have questions, find me on Instagram, send me a message. I interact with people a lot on there.


Justin Donald: I love it. Well, thank you so much for spending time with us here today. And to all of our listeners, I just want to close out today the way that we always close out, which is take action, take a step towards the life that you desire and towards financial independence and freedom towards a life that you're designing by choice, not by falling into and defaulting by autopilot. And I'm just so excited for having amazing people that are in our network, like Aaron, like his wife, Kaleena, and just our whole network is incredible. And I'll be featuring more people on the podcast from our friend group here soon. Thank you.


Aaron Amuchastegui: Thanks.


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