The Mindset to Money with Thomas K.R. Stovall – EP 124

Interview with Thomas K.R. Stovall

The Mindset to Money with Thomas K.R. Stovall

Featured on This Episode: Thomas Stovall

✅ What he does: Thomas K.R. Stovall began his entrepreneurial journey as a 19-year-old, selling luxury car accessories online from his dorm room. He quickly made a name for himself, expanding his business from coast to coast. Since then, he has continued to innovate and create. He is co-founder of Mindset To Money and the creator of ImBlackInTech.com

💬 Words of wisdom: “I love to create communities where people feel supported and celebrated and honored and connected and can accelerate the the path to getting where they’re trying to go.” – Thomas K.R. Stovall

🔎 Where to find Thomas K.R. Stovall: LinkedIn | Instagram | Twitter | Facebook

Key Takeaways with Thomas Stovall

• Creating opportunities for black startup founders.
• Mastering the art of connecting with others, even when it doesn’t come naturally.
• Building inclusive communities and going the extra mile to support the underdog.
• Relationships are the backbone of any business
• Why your darkest moments are preparing you for your dream life.
• The success that came from a failed enterprise software company.
• The Mindset to Money framework that’s helping entrepreneurs build passive income online.
• The non-traditional cash-flow investing strategies Thomas uses to offset taxes, build passive income, and generate long-term wealth.

Thomas Stovall Tweetables

“I found it very lonely being in rooms trying to build where I was the only one who looked like me in a lot of the rooms I was in.” - @thomaskrstovall Click To Tweet “I am 100% focused on investments being the lead. My business just supplements my focus on investing.” - @thomaskrstovall Click To Tweet

Resources

• Mindset to Money
• Thomas Stovall on LinkedIn | Instagram | Twitter | Facebook
• ImBlackInTech
• CANDID
• Will Duffy
• AYG 102 – Leveraging Life Insurance to Build Tax-Free Wealth with Will Duffy
• South by Southwest
• Banksy
• One Way Ventures
• Power of Positive Thinking by Norman Vincent Peale
• How to Win Friends and Influence People by Dale Carnegie
• Laron A. Walker
• Microsoft
• Danielle Pierce

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Read the Full Transcript with Thomas Stovall

Justin Donald: What’s up, Thomas? So glad to have you on the show.

 

Thomas Stovall: Justin, great to be here, man.

 

Justin Donald: This is exciting. So, we’ve been talking a lot about a ton of different stuff. And in fact, almost a year ago to the day, you and I were hanging out here in Austin at South by Southwest, and we had just a great time talking about life and business and investing and wealth building. And it really was one of the highlights of South by Southwest for me last year. And just it is my favorite time of year, my favorite event in Austin every year. And so, I look back on our time together as one of my favorite moments of 2022. So, thanks. Curious to hear your thoughts on what you thought of South by.

 

Thomas Stovall: You know, South by Southwest is always, for me, an amazing time. The craziest part about it, I’m on the South by Southwest Tech Advisory Council for the last four or five years now, so I judge the startups from all over the world who are going to pitch at the conference and I end up seeing so many people who I’ve come to enjoy and come to know from all over, you being one of those folks, mutual friend of ours, Brad Weimert. I barely get an opportunity to do any South by Southwest stuff. I’m just catching up on people. So, it’s always a blast getting the chance to see you and talk about life and family. And, yes, it’s a highlight for me too, man.

 

Justin Donald: We had a good time. One of the coolest experiences is there is this pop-up Banksy exhibit that you and I got to go check out with featuring all of Banksy’s art, which is just incredible. I mean, they did it really, really well right there on Congress, the main drag downtown. What did you think? I don’t know if you knew a lot about Banksy ahead of time but that was a pretty special exhibition.

 

Thomas Stovall: Interestingly enough, that’s the first time that I’d ever seen an actual Banksy exhibit. I’ve been hearing about Banksy for years, and it was great to give them an opportunity to actually get in and see his work, find out a little bit about the legacy. I didn’t actually realize that Banksy was kind of this hidden figure, and no one actually knows who he is. So, that was a lot of fun for me to get a chance to see a lot of the newest stuff and how poignant the messaging is.

 

Justin Donald: Yeah, super cool. So, we were just talking and you were recently in a really fun room. You went to Houston. You were invited to kind of take part in this big event. And I think sometimes when we get into these rooms, it’s easy to say like, “Oh, what am I doing here?” and kind of put other people on this pedestal but I know you’re this amazing mover and shaker with just incredible ideas. And I’d love for you to just take a moment to share with our audience here what this was all about. I mean, you were with the mayor of Houston and I mean some pretty successful people in this room.

 

Thomas Stovall: Yeah. You know, when I was first invited to be in the room, I give a little bit of background. It’s 27 people in the room, about a dozen black venture capital fund managers who are running or building $50 million to $100 million funds on one side of the table and about a dozen on the other side of the table, allocators, folks who lead huge endowments, folks who lead huge financial organizations. So, this group of 12 people, they manage multiple trillions of dollars directly. And it was kind of my role in the room to facilitate a level of trust to really build that trust between not only the black VCs but also across lines with everyone in the room to understand how the mission could be accomplished, which is to put more capital in the hands of black venture capital managers so that ultimately more capital can end up in the hands of black founders of technology companies because less than 1% of VC goes to black founders. And that stat has been the same for the last 20-plus years. So, traditionally, I’m not a guy who focuses much on trying to raise capital. I’ve been a tech founder before. I have a patented enterprise micro feedback company and I built it from scratch. Never made much money.

 

So, let’s not pretend that it’s something it’s not but I did get an opportunity to get over ten trademarks and a patent and did some business with companies like Ford and Diageo. And I built it all kind of from the ground up. And as a black founder myself, I found it very lonely being in rooms trying to build where I was the only one who looked like me in a lot of the rooms I was in. So, I actually created an organization called ImBlackInTech. It was a membership organization. It still exists. And over a few years, we built it to close to 6,000 members across 16 countries who had raised and generated close to half a billion dollars in their startups. And these are folks who look like me, folks who on the cover of magazines and on Shark Tank closing some of the largest technology deals that had happened on Shark Tank at the time. And it was really important for representation because I felt that for me walking in the rooms if I was, at that time, I was well into my entrepreneurship journey, I built and lost my first seven-figure company by the time I was 30, and I found that in some of these rooms, I didn’t feel like I belonged.

 

So, if I was feeling that way with as much background and seasoning as I had, I just felt like other folks who maybe didn’t have an aunt or an uncle or a family friend who came from that world who might feel some of the same thing so I wanted to support, celebrate, and educate black founders. And that organization is how I met the guy who runs the nonprofit that put together this matching event between the black VCs and the allocators. So, I still wasn’t sure why I was there because, again, I wasn’t the guy who was focused on raising capital. But when we sat down, he really laid it out. He said, “Thomas, I don’t know a person who’s better at having human beings feel connected in short periods of time. What we need to build is a room of trust. It’s not about the money. It’s about the human connection.” And once we got to that point, I realized that that’s why I was there and that’s what I was able to do in that room. And it was exciting to kind of find my place but that imposter syndrome is always in the background.

 

Justin Donald: Well, it’s so cool to hear what you’re doing and to hear what you’re passionate about, but not just being passionate about it. You’re actually taking action and I love it. And I can vouch for the fact that you’re a great facilitator and great at really just creating amazing chemistry in communities of people, in rooms of people amongst peers, and it is really fun to watch you in action. Now, something you said, 1%, I mean, that has to change. That is way too small of an allocation amount especially in today’s day and age. We need to be opening doors for as many people from as many walks of life regardless of what they look like or where they’re from. Were they born in the U.S.? Were they born somewhere else? In fact, one of the funds that I invest in that I’m a huge proponent of it’s called One Way Ventures. And it’s a VC fund that focuses on immigrant founders. And I just love having a concentration on something like that where you’re giving people a chance who aren’t from here to come to the United States and to do something really amazing and get an opportunity that they may not have in their home country. And I just think we’ve got to do a better job of allocating resources to the people that have the ideas, to the people that have the bandwidth to accomplish it, that have the track record, that have the network. So, I love what you’re doing. I think it’s incredible.

 

Thomas Stovall: I appreciate that, Justin. You know, one of the things that people don’t realize when they think about underrepresented founders or underestimated founders is it gets looked at like as kind of a charity case to a certain degree. But what you find when you look at this group of people is they are grittier. They’ve been through more. They have a level of resiliency that is uncommon to get what they’ve gotten and they’re able to do way more with way less because they’ve been practicing it literally their entire life. So, when you add up all of those into the gumbo pot, what you’re left with is a person who is hungry, a person who is ready, a person who can deal with whatever is thrown their way, and a person who honestly has a little bit of a chip on their shoulder because it’s kind of like you see people who maybe give four or five swings at bat and it’s like, “Man, if I could just get one. Do you know what I would do to that pitch if it came my way?” And what was crazy for me in sitting in the room with the black VCs is having talked to thousands of founders around the world and heard the same story over and over, the same background. It was the identical story.

 

When talking to the black VCs who are not building the company, they’re raising the fund to ultimately invest in not only black founders but obviously, they’re going to see some opportunities there, it was almost the identical issues when they’re going to frankly, mostly white allocators to try to find a way to get their funds filled. And ultimately I think that there’s a misconception that the black VCs are only ever going to fund black people, but they will fund more black people. And the reason why is because it’s not lost on them the level of excellence that is available in this community. There’s less to explain because as human beings, we have a natural bias. You know, we’re going to do what’s comfortable for us. So, if somebody has a similar background, they went to similar schools, it’s just kind of natural to be more comfortable with that. But if you’re a black founder who’s talking to a black VC, there’s a clarity there and there’s maybe an understanding of a business model where somebody’s background might be looked at like, I guess, almost like a blockade, someone else sees it as an opportunity. There’s just so much opportunity there. So, I’m just glad to be able to facilitate some opportunities in that space for sure.

 

Justin Donald: Well, it’s incredible. I love it. So, I want to dig down a little deeper to learn more about you, kind of how you got started in this entrepreneurial journey that you embarked on, and now becoming an investor and an educator. Let’s take a deep dive here. Let’s go back to the beginning.

 

Thomas Stovall: Let’s go back to the beginning. So, I think that starts with my dad. Is it okay if I actually tell the beginning like the real deal?

 

Justin Donald: Yeah. Please do. I mean, part or the reason I love this show is because we speak the truth and we tell real stories and I’m comfortable making people uncomfortable.

 

Thomas Stovall: So, here’s where this started. My dad is an entrepreneur. He’s owned his own company since as long as I can remember. He’s an insurance man. He owns an insurance brokerage, and he kind of built it from the ground up. It’s not some big, huge enterprise company. My dad did a great job building a wonderful middle-class life for us, took care of us well, and he started off on the railroad. My mom and my dad both grew up in Arkansas, literally picking cotton, Justin. And the life that they’ve been able to build for themselves is unreal but dad, like I said, he started on the railroad. My mom got him in insurance, and he laid the groundwork for me to see entrepreneurship but I didn’t even realize that dad was an entrepreneur until much later in life. I just knew that dad when we left after our lunch at home, he was the one who was able to bring the brown bag and drop it off. It didn’t resonate that he ran a business until, I think, in college. But I remember one of the first kind of pivotal moments for me seeing my dad and kind of understanding who he was, my parents loved to entertain and in our old house, it was late and I think I was in sixth grade or something at the time, and I hear a lot of ruckus in the kitchen. And mom and dad are having a gathering. There’s 10 or 12 couples over.

 

And so, I’m supposed to be in bed but I decide to sneak down and kind of see what’s going on. And I remember sneaking down the stairs and kind of looking around, peering around the corner to see what’s going on in the kitchen. And I see my dad. It’s like a slow-motion movie. He’s standing up tall. Everybody in the kitchen is like in a circle around. I’m leaning in. His arms are wide and he’s telling a story. And again, it was like slow motion. And I remember in that moment, the thought that crossed my mind was, “Man, I wish I was like that.” That was what crossed my mind because I wasn’t like that. I was shy. I was a little guy. I was 5’3, 135 pounds of wet until my junior year of high school. So, I really was very inward, very introspective. And I always felt like an odd man out a little bit. I didn’t feel like I connected really well with others. I wasn’t one of the cool kids, little nerdy guy. When I saw my father at that moment, I saw somebody who I wish that I could be like somebody who was connected, somebody who was comfortable and fun and energetic. And so, my next thought after I said, I wish I could be like that, my next thought was, “Okay. I’ll learn how to be like that.”

 

And I don’t know why that’s how my brain works but I think a little bit like a robot. I didn’t really see it like, “Oh, man. I can’t be like that.” If something just clicked, let me learn. And so, mom and dad had a book on their dresser called The Power of Positive Thinking by Norman Vincent Peale. And that was the first book that I ever read that I would classify kind of as a personal development book. I read that, and then I found Dale Carnegie’s How to Win Friends and Influence People in and around the house. I read that and I read something else. And that kind of started my journey and over the next, I guess, probably ten years, I would just constantly read and study and soak up how to be someone who could connect with people because it was not natural for me. And that’s been the backdrop of my life is really understanding the principles of human connection and trying to get better at it because I never really felt like it came natural to me. And as I kind of grew up a little bit more, my junior year in high school, I came back from that summer and I was 5’10, 165 pounds. I put on 7 inches and 30 pounds of muscle.

 

My senior year I came back and I was 6 feet, 185. My freshman year of college, I played basketball for a couple of years at Tennessee State. I came back from a break. I’m 6’2, 205 pounds ripped to shreds. But you got to understand over a three-year time period, I went from 5’3 to 6’3 and I put on 70 pounds of muscle. And when I would walk into a room, the room responded a little bit different to that guy than the little guy but in my brain, I’m still that little guy. I’m still that underdog. So, I think I got a very visceral understanding of how different the world treats you when you look a certain way. And I’ve never related to being this guy. Now, I’m 6’3, gets about 235. I’ve put on a few more pounds since college. But the world responds a certain way when you walk in a room. And when I see somebody in a room who doesn’t look comfortable, somebody who looks like maybe they’re the outcast or is the underdog, I gravitate immediately toward that person. And I always have something to say. I want to check in with them first. I want to find out how they’re doing. I want to spend some time with them because I know what it feels like to have somebody come and talk to you when you weren’t expecting it. I know what it feels like to have no one come and talk to you and you’re just navigating the room by yourself.

 

So, I never want to be in rooms where I see somebody who’s dealing with that. I love to create communities where people feel supported and celebrated in and honored and connected and can accelerate the path to getting where they’re trying to go. So, I think that’s been the backdrop to the things that I’ve chosen to do. I think that’s how I found my way to entrepreneurship at 19 out of my college dorm room, even though I had no plans on being an entrepreneur. There was something that called me about creating a thing and managing a thing and owning the thing and crafting spaces. I can share more about my entrepreneurship journey but that’s the Thomas Stovall background of kind of how I started and became this guy, and why connecting people is so important to me. I never felt connected.

 

Justin Donald: Well, I love hearing that story. I never heard that story of your dad. That is fantastic. And it’s so great seeing kind of the shift that you made, the different direction, the pivot likely that happened because of that. Now, I know you majored in electrical engineering, but I know you never became an engineer because you got started on your entrepreneurial journey with your first business in your dorm room. So, talk us through that. And I think the rest is history, right? Like, you got a taste of entrepreneurship and then it was like full-blown. You graduate. It’s all about entrepreneurship.

 

Thomas Stovall: Yeah. You know, my parents were clearly thrilled to hear that after my sophomore year, I called them and I said, “Guys, I’m going to get my engineering degree because I know you wanted me to get this thing. I am never going to be a practicing engineer. It’s not for me.” And that was the first time there was actually silence on the other end of the line. I wasn’t sure what they were going to say, but they say, “You know what, son? As long as you’re happy and pursuing what matters to you, we support you. Figure it out.” So, I got my degree but I did start my first business in school. I actually sold custom wheels and performance tires online from coast to coast. And how I started that was pretty haphazard. I got an opportunity to do an internship at Abbott Laboratories, and it was a very competitive internship at the time. And I had a friend who she went to Howard University and she got an internship there and she told me that she was making $14 an hour and I was like, “Oh my God, you’re rich,” because $14 an hour was a huge amount of money back then. And she’s like, “Well, why don’t you apply?” I’m like, “I’m an engineering major. This is a business internship.” “So what?” And I said, “All right. Well, maybe I’ll give it a shot.”

 

So, she hooked me up with the person she interviewed with. And I interviewed and I ended up getting the job. I was the only engineering major in this highly competitive business internship. And I’ll never forget, I had a really cool boss. His name is Pete, a 34-year-old Italian guy, just really lively and fun, and he ended up taking me around the country. Pete took me. I got to stay in my first five-star hotel. I had my first porterhouse steak and he taught me. I try to order it well done. He said, “No, no, no, no, no, no. You’re not getting a steak well-done. Medium.” And I said, “Pete, I don’t eat medium. I’m going to need some steak sauce.” It’s like, “Look, if you’ve ordered the steak properly, you never need to have steak sauce.” Medium. Trust me on this one. This is going to impact your life. You will never order another steak that’s not medium or medium rare.” I said, “I’m not doing medium rare. We’ll try medium.” And I have never had a steak since that time that was not a medium. There were so many new experiences, so many people, so much fun that I had, so much that I learned. And I came back from that summer and I said, “I really think I like this business thing. I never would have seen myself as a business guy, but maybe this is what I want to do.”

 

And I got an opportunity to go back my second summer again at Abbott and instead of U.S. sales, I did a U.S. marketing internship and I had a slightly different experience in my second summer. I got to sit in on a hiring meeting. So, there’s 12 senior managers sitting around a table and there’s me. My boss let me sit in on the meeting and they’re deciding on a role. It’s like a $30,000 promotion. There’s going to be a relocation. It’s a big role. And they’re going through the names of the people who are being considered. Let’s call the first guy Jackson. They put his name on the board and they say, “What about Jackson?” Somebody at the end of the table, “You know, I’ve had a couple of run-ins with the guy. I don’t like his communication style. I don’t think that’s our guy.” Okay. Take his name off the board. And I’m sitting there like, “Are you kidding me? That’s all it took?” The next guy’s name goes up, we’ll call him Johnson. And somebody is like, “Nah, I’m pretty sure he’s a newlywed. I think him and his wife are trying for a baby. He’s probably not going to want to relocate.” And I’m thinking, “Do you know whether or not he has family there? Like nobody’s going to ask him.” And this goes on. They throw name after name up and ultimately they land on somebody whom there’s enough people in the room who generally seem to like the guy and he’s going to get the role.

 

And so, as we’re leaving the office, I ask my manager, I’m like, “Are the people who were up for this role ever going to know that they were even being considered?” He says no. And in that moment, I knew that I never want to be in corporate because I’m 6’3. I’m a big black guy with a goatee. If I breathe on somebody wrong in an elevator who knows what they’ll say about me in a meeting? So, I just knew I needed to figure out a different way where I felt like I had control of my own destiny. And I decided in that moment I was going to be an entrepreneur. And the big idea was, okay, what’s it going to be? I love hooking up my car. I had a ‘99 Nissan Maxima SC with tint on the windows and with 20-inch wheels and with a $2,000 sound system. It was a beautiful car, and that was my pastime. I loved kind of hooking up my car. So, I said, “Well, I’ll start a little custom wheel business. I can buy the wheels at wholesale. When somebody asked me where I got my stuff from, I can say you can get it from me. And at the end of the year, I can write it off as business expense.” That was my big idea, Justin.

 

And I started that business. I bought my first domain name I’m thinking ‘99, and I went on to keep doing that business all through college, after college for a few years. That one domain turned into I own like 1,800 website domain names now. It started me off early, but after that, I was blessed to be able to go out to L.A. at 25. I apprenticed at a real estate private equity investment firm and that’s when I first got my taste of how business actually operates. And I got to be in the boardroom when this firm was putting together presentations for multibillion-dollar investment firms. They approached for capital. I got to be on the construction floor when properties that they purchased residential homes in San Bernardino, Riverside, and L.A. counties got renovated in 30, 45 days, just like the stuff you see on TV. I got to be at the closing table when these properties would end up getting sold 90 days later first to investors or first-time home buyers. So, I saw the whole process.

 

And what stuck with me the most was when they would be sitting there doing deals with folks, who they were going to invest with or partner with, I would notice this weird pattern. They’d sit down the first 15, 20 minutes of the meeting. They’re talking about nothing or what seemed like nothing to me. They’re talking about where they golf, talking about where they travel, what schools their kids go to, who they know in common. And this all felt like, what are we talking about here? When are they going to actually do some business and talk about the deal? And at the end of that, they may spend 10 or 15 minutes talking very high level about terms and then they end the deal, they end the conversation, and pass off to attorneys. And I couldn’t understand where the business actually happened.

So, I pulled my boss aside again, a guy I was apprenticed from and I said, “I don’t understand what happened. It didn’t look like you guys actually did any business.” He’s like, “Son, this is how business is done. You’re talking about millions and millions of dollars being moved. If they’re in the room, they’ve already been vetted by somebody. So, we’re not doing a bunch of stuff to figure out, kind of if they’re competent, we know they’re competent. They could be sitting here. They don’t know this door exists unless they’re a certain level of person.”

 

What I’m listening for is, do I want to marry this person, right? Because we’re talking about this level of money being moved and being in partnership with them for 10 years or more with a fund. This is akin to a marriage. So, I need to understand who’s in your network who I know and trust. Where do you spend your time? Who knows you that maybe I can check in even more to do the under-the-surface stuff? What are your kids focused on? What do you focus on in terms of your family values?

 

And this is the first time I’d ever heard a conversation like that and was stuck with me is that relationships are really the backbone of business. They’re the currency of business. And trust is what gives that currency its value. There are only two ways that trust can be earned through consistent, disciplined actions over time, and it can be shortcutted if someone who has the trust of another person brings someone else into the room and says, “I trust him. You should trust him or her.” That’s how it can be a shortcut because you know when you move at a high level, you break that trust one time and that trust is no longer present. So, people are very careful with it.

 

And I took those lessons back to Chicago. I started my own real estate investment firm. Eighteen months later, I built it from $3,000 in my savings to a seven-figure investment firm with well over a dozen properties. And I was doing renovations, just like the stuff you see on TV and working-class communities on the South Side of Chicago. And it went really well about my dream home at 27, just living a life.

 

But no one told me how to build a team. No one told me the challenges of building a business that quickly. And real estate is an unforgiving beast. If you make some of the wrong decisions early on, it can be really difficult. There are no redos. You don’t get to go, “So sorry, can I redo that mortgage that I bought at 100% financing with an adjustable rate mortgage? And now, I’ve got three of those that are going to adjust any day now and they’re all on my personal credit and I count, I’m now overleveraged. And now, they’ve adjusted and my mortgage is now $4,000 more per month than I would like.” You don’t get to do those things over.

 

So, I had a lot of stuff that ended up happening a few years into it, and I found myself at 30, that house of cards fail and I started back over and literally lost all my properties, all my money, and moved back in with mom and dad. At 30 years old, my same stuffies that I grew up with were there to greet me and it was humbling and humiliating. I would not trade it for the world because it taught me the virtues of those relationships that I built. It taught me that the same people you see going up are the same people you’re going to see coming down and if you’ve built anything of substance, you’ve had some downtimes, and you’re going to need some help from somebody. It taught me that the small amount of money that I made was really a drop in the bucket in the big scheme of things, and to just be humble about it.

 

I learned so much about the world, about myself. I probably was in a state of depression for a year and a half or two because I know what it feels like to wake up and not want to get out of bed. I know what it feels like to feel like the entire world, people who once thought very highly of you are now laughing at you, maybe judging you. I know what it feels like to have somebody say, “Hey, how’s business?” Oh, the market, huh? You know, some tough times. But they were the backdrop for kind of what happened next. I feel like I’m talking too long.

 

And some parts of the story, from the people are dealing with stuff, I just want them to know that when you’re at your worst, those are the times where even though you can’t see it, that’s the stuff that’s going to give you what you need to go through some of your best times because you’ll know what to say in those rooms. When you’re sitting across the table from somebody and it looks like a really pressure-packed situation, you’re going to look back and say, “Is this all we’re dealing with? I’m willing to walk away from this because I’ve been through worse than this.”

 

Justin Donald: Yeah. I love your story and I love you going into so much detail. And the reality is, when things are going really well, we don’t learn lessons as well, as when things are going very poorly. When you had an expectation that something was going to be over here and it’s in the opposite direction, you can actually receive– it’s like all the ego gets stripped away and you can actually receive wisdom if you allow yourself. Once you process through shock and embarrassment and all the emotions – grief, depression as you’re cycling through it, you can actually get to a point where you’re like, okay, what’s the lesson in this?

 

There’s some sort of gift here. What is that gift? What am I learning now that’s going to prepare me for later? And some of it can easily be that you are more relatable for other people that go through it, right? You can be a better coach. You can be a better mentor. You can be a better peer and friend. But some of it is– some people just don’t learn until everything’s taken away and they’ve realized they don’t know as much as they think they know. And I can tell you, in my valleys, those have been the times that I’ve learned the most and it’s been hard. It’s not like I want to learn, but on the other side of the coin, it’s like, if I don’t want to experience these emotions again, if I don’t want this situation to repeat, I have to learn the lessons. So, I’m glad that you did. And it also was a nice pivot because this is what really transitioned you to getting into the tech space, right?

 

Thomas Stovall: Yeah, it is. So, I went through that two years of time trying to figure out what was going to be next. And Justin, I’d lost my confidence, I’d lost my money. I had all these ideas, but I didn’t really know what to do next. And I tried a couple of different things over a couple of years, but what I settled on was the idea of building a technology company. This is maybe around 2011. The startup boom was happening and everybody wants to be a founder. And I thought to myself, if I can build an enterprise technology company, I’m not going to have the overhead of a real estate investment company. Very naive point of view. I didn’t know how much it costs, actually, an enterprise software company, but that was what I thought at the time. If I can just build something in the software space, I can have the same scale, but I won’t have the cost.

 

So, I reached out to a guy who I knew from college who we’ve started our companies around the same time at Tennessee State. He’s a year older than me. His name is Laron Walker, one of the most brilliant people I’ve ever met in my life. And Laron, he built a software company, but they did a lot of work with companies like Microsoft, where they would go in and do kind of project-based work. So, they weren’t necessarily doing entrepreneurial projects, they weren’t launching apps, but they were making millions of dollars and they built a global team doing project-based work.

 

So I hit Laron up, and it just so happened that he was in a position where he had some capital, he had a great team, and he was ready to do something that was a little bit more entrepreneurial. So, I said, “What do you think about us doing a project together where I go out and build the company, we do a technology partnership, your company actually builds the products, and we split the whole thing 50/50?” He said, “Let’s give it a shot. What’s your idea?” So, I said, well, when I was out in L.A., apprenticing at this real estate investment firm, I got an opportunity to interface with folks who ran larger companies who were investors in this fund. And I’ve noticed the same narrative that when they were younger in their careers, they would have maybe a couple of dozen managers who they managed, maybe a couple of hundred employees.

 

They were able to actually have their thumb on the pulse of what was happening in that organization, much better, but as they progressed in their careers and went higher up the food chain, at some point, they end up in this ivory tower with thousands of employees and hundreds of managers. And there’s just no way to get the information from the people who know the business best, who are on the ground for making it happen, which are your customers and employees on the ground floor. There’s no way to get that information in a civilized way up to the top. Middle managers, very transparently, with lots of you at different times because it’s not in their best interest to always tell you what’s happening inside of the organization. And by the time you get the information that you need at the top levels from the balance sheet, because the Titanic is now going in the wrong direction, a lot of times, it’s too late to fix it.

 

And so, I thought, what if there was a way to actually get feedback directly from every place in the business in an organized manner, both qualitative and quantitative, where if you’ve got, let’s say, a restaurant group, and one server is actually making a difference, the feedback can go to that server, their boss, regional, corporate, like all in real time. You can find out anything about any aspect of the organization. So, I went to architect that and I called it CANDID. It was a micro feedback company, and we actually built with layering a patented software. We ultimately decided to rearrange the ownership structure a little bit. So, I raised a little bit of capital, just friends and family, about 100 grand, and I got the first round built and kept the majority of ownership.

 

And we went out and tried to build a company. And we were about a decade too early on that, but during that time is when I learned a lot about myself, I learned a lot about connecting with others, I learned about pitching my wares to people and getting a ton of no’s. But ultimately, it led me to build I’mBlackInTech, which was that membership organization. And I think that’s the biggest part of my founder journey was creating spaces where other people, folks who were maybe ahead of me on my journey and behind me on my journey were able to connect in rooms and really get the support that they needed to grow their companies, both the emotional support, but also, in some cases, the funding, the knowledge base, the peer network. So, that was an amazing time for me and I wouldn’t trade it for the world.

 

Now, that group of people who I’ve built, I’m able to look back on them now. That’s what have me be in that room in Tulsa, Oklahoma, a couple of days ago, sitting with a couple of dozen people who literally have the ability with the swipe of a pen to move billions, trillions of dollars. And there I am a decade later, after having built a failed startup, influencing rooms that are going to impact thousands of startups that come behind me.

 

Justin Donald: That’s incredible. Yeah, it’s fun to see it all come full circle. And even inside that community, I know you got big into the education space, right? And so, you were helping people create their own five and six-figure products, some seven-figure products, different launches in that educational space. And it’s always a fun experience when you have– I describe this as a problem, and a lot of people listening and watching this may not see this as a problem quite yet. At one point in life, you’re trying to do whatever you can to get by, make sure you got money, make sure you can save, make sure you can invest, and then a lot of people often realize this opportunity with passive income and it’s like, oh, man, I need passive income really bad. And you work so hard to get passive income.

 

But then there’s a new problem that exists when you surround yourself with the right people, you do the right things, and that’s when you have this surplus of cash flow that you need to figure out what to do with. And again, it’s kind of funny because most people is like, yeah, I want that problem. But it truly is a problem that I feel we need to be good stewards of this extra capital coming in. And so, I’d love to talk real quick. I know you don’t have a ton of time, but I think it’d be fun to hear even your transition into your newest and most current project of Mindset to Money and how that became what it is.

 

Thomas Stovall: Sure. So, while I was running my membership organization and my technology company, I’d been in business since I was 19, full-time. I’ve only had a job for nine months in my adult life, long enough to save that $3,000 to buy my first property. And so, I’ve been coaching and consulting. I’ve always had masterminds, things on the side for high six-figure, mid-seven-figure entrepreneurs.

 

2018, I had a mastermind at Q1, and there were seven, eight people in that mastermind as the young lady in that group who the year before, she’d done maybe 170 grand of revenue. She had an online course that trained people how to launch online courses. That was her business and really cool program, very solid. And we went through– she went to a million dollars in revenue that year. So, she went through my mastermind. We tightened everything up. She left Q1 well on our way to do a million. She ended up doing $3 million that year, $10 million the next, and she’d done $20 million since.

 

And so, what I saw when I looked under the hood and I’m like, wait a minute, I’m looking at online course, webinar, a bunch of people on the webinar, cash drops at the bottom. This looks like a model that I really need to pay attention to, and I’ve never given the online education space any real attention. But I couldn’t ignore it, I had seen it with my own eyes.

 

So, I spent the next year and a half really looking to understand how to take my expertise, which for me is around attraction-based marketing and sales, how to get people to come to the table saying, “Thank you so much, Justin, for giving me the opportunity. Would you please allow me to pay you 50 grand to be in your mastermind? I know you don’t take everybody.” Like, how do you do that versus someone coming to the table and saying, “You got to be here, convince me, why do you care?”

 

So, I’ve gotten really good at that. And I wanted to take my curriculum, which I built. So, I had multiple programs and put that online and I could not find the experts who could take what I did and give me the software tools, the framework, put it all together to sell my unique way in the online space. I spent tens of thousands of dollars hiring these different folks who were all the wrong people, wrong skill set. And I basically was training them while paying them to do something for me.

 

So, a year and a half later, I got enough pieces of the puzzle figured out and I built my own sales automation framework and it’s called Deep Funnel, and I basically dropped it on my now business partner’s company. She had an online course that was at the time I met her doing– so we first started talking to in about 90 grand a year. After year one of less kind of going back and forth, she did three quarters of a million. Year two, I put my sales automation framework around our business and she did over a million dollars in sales while firing her sales team, while cutting off ads for the whole second half of the year.

 

So, I knew we had something, and she was in a magazine and she gave all the credit. Like they asked her, “How did you do 4000% growth inside of two years?” And she said, “Thomas K.R. Stovall is my coach, and that’s how.” And the doors start knocking them down. And ultimately, I wasn’t trying to build a company where I did a bunch of consulting. I really wanted to get my time back. That’s why I was in the online education space.

 

One thing led to another and I switched my lens a little bit and I started to, instead of trying to put my courses out, I focused on allowing my framework to get out a little bit and help other subject matter experts who wanted to turn their expertise and the passive income online. I started doing that. And I’ve helped a number of people do multiple five-figure launches in days, $70,000 in 14 days, $123,000 in 14 days. These are all real things that sound ridiculous, but for people who are already making a couple hundred thousand dollars, maybe you’re more coaching, training, speaking, consulting from the front of rooms or on stages, they have a defined customer avatar, and they just want to take their existing framework and put it online in a way where they’re not taking sales calls, where the sales are automated, where it’s organic. That’s what I’ve built.

 

And so, I found myself with a little bit of surplus because that started going really well. And I reached out to you, I think it was around 2020. And I said, “Justin, I’m starting to make a little bit more money, then I know what to do with– tax brackets are changing. I know what’s coming down the pipeline. What do I do?” I don’t know how to invest. I may have been an investor of real estate in the past, but I don’t consider myself an investor. I don’t know anything about taxes and all that.

 

And I didn’t really know what you did fully at the time, but I knew that you did something around investing. We got on the phone. You were gracious enough to give me an hour and you laid out everything and even allowed me to audit the mastermind for a few calls. And that’s where I heard the difference in the conversations there, where you get on a call about a deal and 80% of the call is about the taxes. And it just wasn’t my perspective before. But inside of the mastermind is when I really got acclimated to thinking about tax strategy, which is forward facing, what kinds of assets and businesses do we need to buy, and what quarter to offset the money. We know what’s coming in versus rearview mirror at the end of the year, trying to find a handful of write-offs, which is not enough when you start making real money.

 

And it’s just been a total shift in perspective learning about cash flow investing. I always knew that working for 40 years and trying to fill a nest egg to one day siphon from it till I die, it’s always felt like it didn’t make sense for me, but I didn’t know what did make sense until I met you and started talking to you about the lifestyle investor focus of cash flow investing in simply buying some assets that replace your earned income with passive income. And that really resonated.

 

So, that’s what I’ve been focused on. And I’ve even taken a narrower approach where the things that I’m buying, I’m focused almost exclusively on passive income generating assets that are managed by third parties and nontraditional, so things like crypto mining rigs that are actual physical hardware that I’ve bought that have qualified for 100% bonus depreciation in year one. So, I’m literally buying an asset that I get 100% of the depreciation in year one, comes right off my net taxable income. That was a fantastic purchase in 2021.

 

But then that left me with, out of a bunch of cash with hardware, and I’m gaining coin. Both those machines generated about 35 Ethereum for me in about a year, but they didn’t give me cash. So, my next purchase was a business that I bought in 2022, an e-commerce business that also is run for you, so is managed by a third-party company that builds it. They run it. It is US based. It’s dropship, it’s not products that come from other countries. So, those are the types of opportunities that I’m looking for now are assets and businesses I can buy online that are nontraditional, that are managed by third parties. So, I have 100% of the ownership. I get 100% of the money and they are managed by third party.

 

So, I don’t have to spend my time. I want all of my time. I want all the money. And I want to have the lifestyle, the space to go out and enjoy myself and spend time with family and friends. And I think that’s the perspective that I’ve learned from The Lifestyle Investor group. The core shift for me is understanding that my businesses, they give me great earned income, they give me some surplus.

 

I used to think investing was what you do with your cherry-on-top money. Now, I understand that investing is how you go from doing very well, being well-off to becoming wealthy. And I never understood that before. But now, I understand fully and I am 100% focused on investments being the lead. My business just supplements my focus on investing.

 

Justin Donald: Well, that is music to my ears because my greatest passion in life is to try to help people see this path, this opportunity. This really does exist. And it’s been an honor to have both you and Danielle Pierce, your business partner, who’s just an incredible woman, part of the Lifestyle Investor mastermind community. I mean, you two are just world beaters, doing great things, totally innovative, totally outside the box in the way that you think. It really is so refreshing. Man, I feel like we could talk for hours longer, but I’ve got a hard stop I’m up against here. And I want people to be able to find you online. So, where can people learn more about you, Thomas?

 

Thomas Stovall: Well, if you go to MindsettoMoney.com, that is the membership organization that I now focus on. We train regular people who are working-class folks up to business owners, entrepreneurs, how to do exactly what I just described, which is fine, kind of the nontraditional assets and businesses that they can purchase that will accelerate their retirement by anywhere from a couple of years to a couple of decades. We have monthly masterclasses. You just led one where we bring in experts to train folks on everything from how to create your own private family bank to how to fund your private family bank with non-direct recognition, whole life insurance, business stuff, mindset stuff. You name it. So, MindsettoMoney.com is our national community for financial health.

 

Justin Donald: I love it. Well, I got a chance to be a fly on the wall and watch you open that thing up, and then share some content that I thought and we thought would be applicable to the group. And man, it’s a special place. You’ve got a cool community there of hungry people, people that want to do what it takes to get to the next level. So, it’s really special.

 

And I love your focus on kind of the bank replacement strategy. And for anyone that didn’t catch the session that I did with Will Duffy, go back and watch that podcast because it’s an incredible, just hour of information on how to create your own bank. How do you get out of the regular banking system and create your own bank for investments and lifestyle and everything? And I know Thomas is a big proponent of this as well.

 

So, hey, this was awesome. Thanks so much for the time. And I just want to wrap things up and close out our session today, our podcast episode, the way I do every week. I love asking my listeners, my audience a simple question, and that is this. What’s the one step you can take today to move towards financial freedom and living the life that you truly desire on your terms, not by default, but by design? Thanks, and we’ll catch you next week.

 

Thomas Stovall: Thank you, Justin.