Go Big Once: The Mindset Behind Building Generational Wealth with John Pennington

Most entrepreneurs try to scale by working harder. John Pennington scaled by changing the structure.

In this episode of The $100M Entrepreneur Podcast, Brad Sugars sits down with John Pennington — a 14-time entrepreneur who built a fund platform that snowballed into $28B in assets under management, 1,000 employees across 33 states, and a New York Stock Exchange listing.

They break down what actually makes growth “unstoppable”: why a fund structure scales when most businesses stall and how to recruit people who are smarter than you by offering ownership instead of a paycheck. John also explains the real mechanics of raising capital — from high-net-worth investors to institutions — and why you must become “institution-ready” before they take you seriously.

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About John Pennington:
John Pennington is a serial entrepreneur and fund builder who has started 14 businesses and learned the hard way why most companies struggle to scale. His breakthrough came through building a general partnership / limited partnership fund platform across multiple asset classes — from real estate lending to multifamily, senior living, office, and industrial — ultimately helping grow a firm to $28B AUM and a public listing. He’s known for pairing structure with elite talent, using equity to attract high-level partners, and playing the long game to raise institutional capital.

About Brad Sugars
Internationally known as one of the most influential entrepreneurs, Brad Sugars is a bestselling author, keynote speaker, and the #1 business coach in the world. Over the course of his 30-year career as an entrepreneur, Brad has become the CEO of 9+ companies and is the owner of the multimillion-dollar franchise ActionCOACH®. As a husband and father of five, Brad is equally as passionate about his family as he is about business. That’s why, Brad is a strong advocate for building a business that works without you – so you can spend more time doing what really matters to you. Over the years of starting, scaling and selling many businesses, Brad has earned his fair share of scars. Being an entrepreneur is not an easy road. But if you can learn from those who have gone before you, it becomes a lot easier than going at it alone.

Please click here to learn more about Brad Sugars: https://bradsugars.com/

Build a Business That Gives You More Time, Money & Life:
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Transcript

Defining The Dream And The Fear

SPEAKER_01 0:00

Stockbrokers make one and a half percent. A mortgage broker makes one percent. A general partner makes twenty percent of the profits. I wanna be one of those guys. When I was 17, I looked into the mirror and I don't know why I said this, but I said, John, you're not afraid of being poor. John, you're not afraid of being old. John, you're just afraid of being old and poor at the same time. I was like, dude, I want to run a huge, huge company. I would look at him and laugh. I'd say, you know, you and I aren't smart enough to run a big company.

SPEAKER_00 0:32

We gotta find better talent, smarter guys than us. So, John, let's talk about big success, big scale. Latest business, number 14. Yeah. Boomed. How? What? Hundreds of millions is not a thing that most people get to.

Why Funds Beat Operating Companies

GP-LP Control And Structure Advantages

SPEAKER_01 0:49

Yeah, true. So I started 14 businesses in my lifetime. Three I lost money on, three I made money on. Obviously, this one I make a lot of money on. Um, and then ones in the middle, you know, you kind of make some money on them, right? Yeah. But the other 13, you got them to, you know, you get them to a certain size and they just won't scale. I mean, they it's well, they will, but it's hard, it's difficult, right? But the 14th was a fund structure. And I learned about funds in 1999. And I was watching this uh uh newscaster vilify fund managers on the, you know, these are villains, they they pay low, low taxes, they make a lot of money. And I'm like, I want to be one of those guys. So uh in 2000, it took me five years uh to get the gumption and the confidence and all the knowledge to launch my first fund. And it's a general partnership limited partnership structure. And I learned that, you know, Steve Jobs went public, New York Stock Exchange, as an Inc. And every year, an Inc, the shareholders vote on who runs the company. But in a general partnership limited partnership, the shareholders, the people who have all the money, never vote on who runs the company unless the general partner commits fraud. And I thought, you know what? I don't want to build a nice big company and then have someone say, you know what, John, we really appreciate that, but now I want my son to run it. I don't I never want that to happen. John, we fire on your own. Yeah. So Steve Jobs got fired from his own company, and Steve Schwartzman of Blackstone went public in a general partnership, limited partnership structure. Same thing. The shareholders do not vote on who runs the company. So, but a fund structure was a the 14th business you know that I ever started. Uh, and I did it with some great partners. I had brilliant business partners, but it just I I couldn't stop it from scaling. Yeah, it was it was so um just snowballed. Well, you started the first one. Oh, I got the first fund down. Now let's go to the second one and the third one and the fourth one. And really, you just tweak the asset class. Um so the first fund I ever started, we lent money on real estate. Um, and then the third fund we started uh was we bought large apartment complexes. Uh and then the fourth, fifth fund uh was uh it was senior assisted living for that fund. And the next fund was office buildings, and the next fund was industrial space. You know, it just it just was just separate funds, and they it just scaled like I couldn't stop it from scaling. It was uh once you got once you got the formula down, and so the structure really, really if I look at the four key businesses, the structure was really kind of the key. Um, but you still had to attract great talent. And so, like for instance, when we started purchasing apartments in 2008, 2008 was a bad time. Oh yeah, and I I knew how to underwrite a 200, a 20-unit apartment complex. I can do it. But I needed someone who could underwrite a 1200 unit apartment complex. I know how to do that, so I'm I I had I have to find people with much, much greater talent in certain areas than I have. And so I you know, I would lay in bed imagining at night, there's there's some dude or some lady, she's been working at Wells Fargo for 15, 16 years, and they've been doing loans on 1200 apartment complexes for and they know how to underwrite it. And and I I imagine this person driving to work every day going, one day I'm gonna quit my job and start my own fund. And I'm going, I gotta find that person. I know they exist, right? And so when I found those that person, I was like, you know, I don't want you to be an employee, I want you to be an owner of the general partnership. I want you to come in and own it. Now listen, you're gonna, we have some money for cash flow, you're gonna your salary's gonna go down. But if this works, you're gonna make way more money than you ever imagined running a fund, right? And you know, we found uh, you know, uh my my my original partner, we found two gentlemen who had been doing real estate for I don't know how many years. It was like gazillion years, and uh they were just experts in large real estate, and we were experts in funds, right? So the two of us, boom, we knew how to run funds, they knew how to run real estate, and it was and then we just jumped jumped and brought in more partners that even had more experience, and it just snowballed. And you know, uh 16, 17 years later, we go public on the New York Stock Exchange. We're managing 28 billion dollars of asset under management. We have employees, we have thousand employees in 33 states, right? I had many, many jobs at that point when we retired. I I uh I was the president of over 100 corporations in Delaware. I was a signer, I was a signer on 1,200 bank accounts at 19 different banks. I was uh yeah, yeah, not not not not 120, 1,200. Just scale. Yes, yes. I I I I was the anti-money laundering officer for eight of our Cayman Island feeder funds. That was a job, man. Oh yeah. I I did I did compliance, uh SEC compliance and all SEC issues for all of our employees in the 33 states, you know. Um I had I had many, many more jobs than that, right? But and we wonder why you were tied. Yeah, yeah, exactly, exactly. Yeah, yeah. We went public and I was like, you know what, I'm good. Yeah. And so my partners took off and they've done an incredible job. I'm still a large shareholder, but they've done an incredible job going forward, and they've even raised more money and got bigger and bigger, and they they they they run the company way better than I did, you know. And I we ran it together. I had pieces, but like I said, we had you had to find talent in specific areas to go large. And what we used was ownership in the general partner. Our we believed, and I believed from the first, I was looking for people who didn't want to be employees. I was looking for the mindset they wanted to be an entrepreneur, they wanted equity. And some people had never had equity. They had huge jobs over here, never had equity, and and I wanted I wanted someone that wanted, and in 2008, 2009, people were willing to take a chance. Oh, yeah. And I was able to gobble, I shouldn't say gobble, I was able to acquire partners that would have never been my partner if it wasn't 2008, 2009. If it was like 2004, now when everything was booming, everybody's mind. Yeah, they would have said, nah, John Hennington, no, I don't want to be a spark. No, no, no, no. But in 09, 09, right there, I we got some and then they came in and they were equity owners, and the company just went.

SPEAKER_00 7:19

So, two things out of that then. Firstly, you got the strategy correct. And secondly, you got the talent. Let's go strategy. What was the difference in strategy of this one versus the previous ones? How did they almost, I guess, teach you? Because I define scalability as the next sale costs less and is easier. You know, so it got easier as you got bigger in this one. The strategy was on point. What did the first 13 teach you that led you to that thinking?

SPEAKER_01 7:49

So I just I'll answer that in a kind of a just a holistic right. People say if you can go back in time when you're changing things. No. Because I lot the the three the three companies I lost money on, if I wouldn't have lost money on those companies, I would not know. I would have lost on this company, right? So I learned these things way back when losing so I would not go back and tell myself, don't do this, don't do that. Yeah. Because those learning losers, I mean you wake up on some some Monday mornings and you're like, how can I make payroll by Friday? You know, and you're like scrambling and you're learning how to how to how to solve solve problems. And I used that skill set when I when I w started that first fund in 2004. You know, so I it's just I I don't know if I go into the details there in time we have, but it's just a uh uh it's a process through life where people want to go back and change their past, but that means you'd be different today. Yeah, right.

SPEAKER_00 8:44

So yeah, so the people thing, did is that something you had to learn over time, or were you always find the best people type guy?

From First Fund To Snowball Growth

SPEAKER_01 8:51

No, it wasn't always. I I earlier businesses, I was just wanting to hire employees. I wanted to hire good employees. But this is what happened. Uh I'll give you the the strategy here. So I'm uh 40 years old when I start my first fund, okay? And I played my life game out. And I always said to myself, I want I want once in my life, I want to go huge. I want to go for the stars, right? And if you're going for the stars and fail, well, you know, so usually what I do, you know, it takes a year or two to see if a business will work. And then if it fails, you've lost a lot of money. And then you take another year to find another business. So now you're four years into a smaller business. But a really, really big business, it's gonna take you five to six years to see if it really works or not. And if it fails, you've lost six years and a lot of money and you're gonna have to. So if I'm 40, I'm I was I was like, well, John, if you wait till you're 50 and you go it and you go big, you'll be 56 and you'll be as square one. You don't have enough time to recover and retire. So, John, if you don't go try to go big at 40, you're never gonna do it because you're a conservative dude. You know you're not gonna risk your family. That's just the way you think. You look in the mirror and you think this, right? And when I was 17, I looked into the mirror, and I don't know why I said this, but I said, John, you're not afraid of being poor. John, you're not afraid of being old. John, you're just afraid of being old and poor at the same time.

SPEAKER_00 10:20

How did your 17-year-old wisdom?

Hiring Owners, Not Employees

SPEAKER_01 10:23

I don't know. I don't know how I did that, but I was I was, you know, when you're 17, you're thinking, what am I gonna do in life? How am I gonna make money, right? And I just kept narrowing it down to what is it really, what's really in there, right? And I I was afraid, right? I was seriously afraid of not being able to figure out in life which whatever. So that that mirror, I I said it to myself for years, and that drove me through the the companies I failed at and the ones that did okay and the ones that did great, it was just John, John. And so by the time 2015 rolled around, we're managing eight billion. And I knew at that point I'm never gonna be poor again. Right. Yeah, you know, but we're gonna eight. Yeah, yeah, yeah. So I'm I'm conservative. I'm conservative, right? So when we were managing 100 million, I I went, how much how much are we managing? 100 million? And then someone says, we're managing 500 million. I went, what? And then when someone said we're managing the first billion, I was like, no, no, it can't be a billion. So I got my calculator out and I'm like, how, how, how, how much is a billion seconds? Yeah, yeah, yeah. It's 31.7 years, right? I said, wait, a billion seconds is thirty, and we we're managing a billion. And then like a year and a half later, we were like three billion. I was like, what? And then we hit when he six or I was like, okay, I'm never gonna be poor again in my life if I if I choose to be, right? And Warren Buffett always says this you only have to get rich in in the United States once. You see people get rich and they're broke, rich and broke, they're idiots, right? I think they risk too much. You get rich once and you kind of have to change the game, right? It's like if you're ahead in a game by a lot of points, you play differently, right? They all protect it. Yes, yes. And I'm I'm like, you know what? I'm gonna protect it.

SPEAKER_00 12:02

You know the crazy thing, and you know, coming from Vegas, people don't take their money off the table in business either. They they keep running that thing.

SPEAKER_01 12:10

And I wonder why they do that.

SPEAKER_00 12:11

I you know what? I think that's very few people, John, though, learn how to sell their business. Very few people. Exit. I I I literally say to every business owner, you will have an exit in your business. You get to choose pine box, shut it down, or actual sell. Now, if you want to sell it for value, it's gonna take us two to three years of planning to sell that thing for value. And most like you look at the baby boomers right now, holy heck, you got like across the U.S. right now, we got just under 40 percent of businesses are owned by baby boomers who got th five to m at most ten before they gotta be out. There's a massive transfer of wealth coming, and I don't think that that they understand it. But I I sit with most people and I ask them, you know, like a simple dumb question is, have you trained your managers? And they look at me like, no. And then a super dumb question is, well, what's your business worth and what do you want to sell it for? Right. And they look at me and they go, Well, I I'm gonna pass it on to my kids. No, you're not. Your kids don't want your business. So it's interesting that, you know, in your business, you almost from day one built the sell strategy into the business. Talk more about that building the sell strategy in.

SPEAKER_01 13:25

Yeah. So it's it's it's it's the mentality of um some there I've say I have friends that have this mentality. They run their own businesses and they go to work and they want to handle everything. And I I was the opposite. I wanted people to c I wanted to be able to leave my business, and that's a true business. If if I have to go in and I have to run everything every day if it doesn't run, it's not a business really. It's a it's it's it's it's it's it's a job and you learn for an age. That's right. You work for yourself, you work for yourself, but it's a job. So if you can, if you can leave your business for weeks at a time and it runs, maybe it doesn't run exactly as as right, but it still runs, you have a real business. And that's the underlying goal of a entrepreneur is I want to create a real business where I'm not running it every day. I'm the present CEO. I'm visualizing where this business is gonna be in two or three years, and I'm creating uh contacts or relationships with customers or or uh wholesalers that is gonna expand or acquisitions that's gonna expand this business, right? So that's the kind of the vision that I had when I said I want to go big at at 40.

SPEAKER_00 14:33

Yeah, your buddies that are the bottleneck of their own business, you know, it's it's great to be the rock star on your way to a million-dollar year business. Yes, you shouldn't be. But you you can't be the rock star at 100 million.

SPEAKER_01 14:46

And this this is this is why I think your your your company coaching uh your product is because a lot of entrepreneurs get to a certain size and they can't figure out how to make that transition from I'm intricate in the business, but that's not really my role anymore. It was when you started it.

SPEAKER_00 15:07

Aaron Powell Yeah. How do you build the managers and the management team to get to$10 million, then how do you build the leadership team to get$100 million and beyond? And I think that goes back to your point of hiring great people. At some point you've got to professionalize management of the organization or professionalize leadership of the organization to get it.

Scaling To IPO And Massive AUM

SPEAKER_01 15:25

And and we used equity rather than a high salary and bonuses, we used equity to find that type of person I just explained. To attract the talent. That's right. That's right. Because our my goal was look, in the beginning, my my first me and my first partner, I was like, dude, I want to run a huge, huge company. And I I would look at him in lab, and we'd like- I'd say, you know, you and I aren't smart enough to run a big company. We gotta find really big better talent, smarter guys than us. And and we did, we did. We found partners that were smarter, way smarter than us, and uh and just took took it to heights that I never could have imagined. Yeah.

SPEAKER_00 16:01

Yeah. I think that's the thing. But uh let's go flip it over a second. Scale requires capital. Yes. You want to scale exponentially, grow a business, you require capital. One of your key skills has been raising capital. Tell me more about how that works, why it works, and why were you damn good at it.

Equity To Attract Elite Talent

SPEAKER_01 16:18

Yeah. I I I'm a good capital raiser. I'm not a great capital raiser. Uh and so I had to find, again, people who were great capital raisers. Um and what I found over the years was there are three really different personalities in raising capital. Uh, we found that there's a personality that can raise capital from high net worth individuals, there's a middle personality that can raise capital from uh family offices and banks and stuff like that. And there's a there's a third personality that can raise capital from institutions. And so usually up the scale, your first couple years, it's high net worth, high net worth, high net worth. Then you try to go to the family office, and it takes you a few years to get into the institutions because institutions, they don't even come out to see you unless they can write you a$30 million check. Yeah. And they won't even fly out to see you, and they don't want to be 30% of your fund. They want to be like less than 15% of your fund, but they want to write you, they want to write you at least a$30 million check. And they do questions, they asked you questions and due due diligence that you have no idea how inclusive it is. So it takes you years of being like one of my partners, early partners, we were we had an auditor, we had all of our funds were always audited. But in our town, we had um there was an auditing firm. They were 50 man-ish, they were local, they were good. I'd used them for two decades. And when we started our third fund in 2008, he goes, We can't use them anymore. Why? And he's well, we need the big, the big accounting firms. I said, Why? And he goes, Because when an institution three years from now flies from Boston to come see us, they're gonna want to know who your authors are, and you need to have the big four. And when when you tell them one of the big four names, um Deloitte and Touche, right? They're gonna go, okay, go the checkbox. Yep, check the box. If you tell them A B and Gep. If they say A B C company, it's all I said, they're gonna go, what? Yeah, you know. So he and I said, but they're triple expense. He goes, exactly, John. We have to become a company worthy of an institution before the institution comes. We can't wait to them come out and say, oh, we'll change. No, no, that doesn't work that way. They're coming up to see you. You already have to be. So we had to become things that we didn't want to be yet. We had to become a registered investment advisor. We had to become um uh we we had to use the big four, right? We had to have SOC2 type one audits before we were asked to do them, right? So our vision was always we're going bigger and better. And so, and once you get to that level, for instance, let's see. My first fund was 2004. We got our first institution in 2010. Six years to attract that institution to actually write us a check. But after you got that first one, it was like you get it was like a snowball.

SPEAKER_00 19:01

Yeah, it's it is like it's a long-term plan.

SPEAKER_01 19:04

People want to go after institutions. Now, listen, I've seen people their first fund get an institution. I don't know how they did it.

SPEAKER_00 19:10

I probably relationships.

SPEAKER_01 19:12

Maybe, but it it takes years and years of prepping your team, training your team, getting your team to act and talk like an institutional worthy uh investment.

SPEAKER_00 19:22

That's an interesting thing because I don't think most people understand how much you have to grow into your goals. And businesses have to do that the same way humans do. So how did did that strategy just be something natural to you, or did you have to learn that? Where did that come up for you?

SPEAKER_01 19:37

No, that and that was one of my partners. He he was uh we hired we hired him as an employee, as an operation officer. We said, you know, you used to work at big the big financial firms. Can you make us more institutionalized? Okay. And within a year, he was he was a partner, right? Because we couldn't, we couldn't let him go. We we had to have him. And he convinced us we have to spend the money now, triple the audit cost to become, and that got us into that mode of just spending the money now. We have to we have to keep our salaries low, spend the money now, invest in our company because this is could be huge, and I want it to be huge, right?

SPEAKER_00 20:17

Let's go back to the raising capital and average business owner. Um, where where can they start learning the raise capital thing? Where does the because they're gonna have to do it. Yeah. And they're probably not getting debt money. You know, probably not getting debt debt.

Strategy Lessons From 13 Businesses

SPEAKER_01 20:33

If they can get debt money, you go get it, because it's cheap, it's cheapest, right? It's cheapest. Uh investor money is more expensive, but there's no payment every month, right? Uh debt money you get, it's cheap, but you have a payment you gotta make, right? So we, you know, most of our funds were, hey, we're gonna get investor money. We're gonna pool 99 investors into one pool called a limited partnership. And we would file under a 506B, uh 3C1, and that allows you a hundred investors, 99 investors uh of accredited investors, 35 non-accredited investors. Then above that, there's a 50 uh a 3C7. And a 3C7 allows you 2,000 investors, but they have to be qualified purchasers, all of them. A qualified purchaser, a quiet purchaser is someone who has a$5 million net worth. A qualified client is someone who has$2.1 million net worth, and an accredited investor has a million dollar net worth. Or now, if you're a lawyer, if you're uh if you have financial licenses, you can be an accredit investor, and there's a couple of exceptions there. In a 506B 3C1, you can have 99 investors, 35 can be non accredited. Now, this is a fund structure. A lot of people, they're not large enough to become funds because funds are kind of expensive to get into the game if you're gonna raise and do big things. A lot of people are, you know, they they want to raise$3 million,$6 million. They're not really big enough yet to be a fund. So they're kind of a limited liability. Company. But I would say when you write your limited liability company documents, you need to write them kind of like a fund where the passive investors don't vote every year to take the president out. Yeah. Right? So you have to kind of mirror fund documents because most funds out of New York and Boston are called two and twenties. They're 2% manager fee, 20% of the profits. And I gotta tell you, when I learned in 1999, I was like, wait a minute, real estate agents make 3%? Okay. Uh stockbrokers make one and a half percent. Uh a mortgage broker makes one percent. A general partner makes 20% of the profits. I want to be one of those guys, right? I was like, you know, over over a no, there's always a minimum. You have to make a minimum, like a pref for your for investors, but over the minimum, you hit the if you hit the minimum, you get 20%. I was like, I'm in. That's what that's what I want to do.

SPEAKER_00 22:54

I won't I want to stretch out listeners' thinking just for a second. Because you're right. Most people go to the private placement memorandum, they only want to raise a small amount to run this one business. What if we stretch their thing and say, well, what would you have to do to need a fund? How many companies would you have to be buying? Because I don't think people realize that it's cheaper to buy a company than start one. It's cheaper to buy a company than buy customers, even. Like marketing is more expensive than buying a company. And the time. And the time to do it. And the like and and buying a company is equity deployment, not expense deployment. And so when we look at that, and it's like, what would you have to do to go, okay, how many do I need to buy in order for it to be worth doing a fund? I mean, I know when me and Doug came to you guys and started learning this stuff, we're like, holy shit. We need to start our own fund and go and buy a bunch of, you know. Okay.

Institutional-Grade Systems And Audits

The Art And Ladders Of Capital Raising

SPEAKER_01 23:50

So uh my first fund, the fund documents, the legal documents, cost me about$35,000,$30,000. Okay. So, and we were lending on real estate, okay? So my third fund cost the same documents cost a quarter million dollars. Okay. Now, so so you ask, well, how big would you have to be to have a quarter? So the the third fund, we were raising money from Australia, from Hong Kong, from France. And so what you're doing is in one document, you're combining the IRS of Australia and New Zealand and the US and France into and Hong Kong all in one document. And you're combining the SEC regulations and the SEC of Australia. Yeah. That's an expensive document. If you want to raise money for a real estate fund overseas, a US real estate fund. But the first fund, we weren't raising money internationally. We were raising money in five states, and we were doing loans in five states. So it really comes down to, I think, the upfront costs. How big would the would the capital raise have to be to justify a quarter million dollar piece of paper with a bunch of papers with ink on it, right? Yeah. And so that's kind of how you have to, you know, think of think think about it. But my first fund uh with with$30,000 of the uh upfront cost, and then putting it into place. I personally, my partner, we had to go like 14 months without a paycheck. Yeah. Now we had two other guys, two of friends of ours that wanted to become, they couldn't do it. They had lived their lives where, you know, they had car payments and house payments and second mortgages and stuff, but they were great guys. They just couldn't go 14 months, 15 months without a paycheck. And then the two of me and another guy could. So we did, and then at after about that year, year and a half, we brought in two more partners. And those those were those guys were the big boys in the real estate industry, and we were already cash flowing by that time, right? And so I guess in the roundabout way, that's kind of what I'm saying. It's kind of like how big is your mummy? Now, why could I go 14 months without a paycheck? The reason is I looked in the mirror when I was young and said, I don't want to be old and poor at the same time. So all my businesses, I was like, I have to, when I when the years are good, I can't go buy a new car. I have to put that in the war chest because I might get a bad year. And that's why I said when we finally hit in 2015 the 8 billion, I was like, I don't have any war chest anymore. I'm I'm good. We're making so much money, I'm never gonna, you know. But but all my 14 businesses, every time it was going good, the years, I just live the same life. And a lot of people, and I think you're you'd coach this way, a lot of people, when they start making a lot of money, they start spending a lot of money. There's there's there's three different levels of of wealth. Um uh rich people, they view money, you give them money, you know what they think? How can this money make me more money? Now, the middle class person, um, they get more money and they go, okay, this money can help me get a bigger house with a bigger payment. This money can help me, this salary can help me get a bigger car with a nicer car. That's how they think. And the poor people think this money can help me eat today. So I can eat, that's one mentality. Middle mentality is this money can get me more in debt, but I can live a better life. And rich people are like, I just want this money to figure out how to make more money. That's the three different things. So if you're in the middle and you're thinking, how can this money make me more money? That's how I thought. I got this extra money, I'm making good money. Oh, I gotta put this away. I gotta save this, I gotta invest this. I can't go buy another car. My boys tell me, uh, it's a great story too. Um they my my son, they'll tell us on stage. My sons are on stage a lot and they they do presentations and they'll say, Yeah, my dad, he was driving a car with 200,000 miles on it, a dent in the door, right? And he uh, and he has my um one of his business partners agreed to be a mentor to one of my sons. So he goes up there, you know, to this guy's house and he goes, I drive I go through these private gates, I drive through this beautiful rolling hills. I come to this cul-de-sac, there's a a house, a white house. I knock on the door, I think there's gonna be a butler. Go away, you know. He walks, he goes, There's beautiful white couches, there's an indoor basketball court, there's an outdoor pool, there's a view off the deck of the whole valley. It's gorgeous, right? He's got sports cars in the in the garage. And he says, um, he says, uh, I want you to be my, my son's, my son, he says, I want you to be my mentor. And he goes, well, let me tell you a secret. You know, rich families send their kids to Ivan League schools, then to Wall Street, and they come home and run their family fund, right? The family office. And he goes, I know that's why I'm here. I want you to teach me how to do funds. He goes, Your dad knows more about funds than I do. We're partners, but he knows more about funds than I do. And uh and he goes, But you're vastly more successful than I'm my dad. I I want you to teach me. And he goes, Let me tell you a secret me and your dad make the exact same amount of money. And my son, he goes, I looked at the ceiling, I looked down, and I said, I gotta go. And he drove home. I never I was sitting in the in the living room watching football. It was a Saturday afternoon, and uh I heard the door slam.

unknown 28:56

Bam!

SPEAKER_01 28:57

Dad, what is going on? And the next two months, I mean, I mean, so my wife got a new Range Rover. Yeah. I bought a Tesla. I bought my Tesla, my dad a Tesla for his birthday. My dad. Uh my kids got new cars, my father-in-law, mother-in-law got a new car. I spent like a half a million dollars the next month, two months in cars, right? So the bag was out, the out of the bag. I wish I could have stayed under the radar for about five more five more years. But he goes, My dad was, we're living in a normal home, and he was right at 200,000 miles on a dent in the door, and my partner had sports cars and all this stuff, and it was but anyway, that was years ago. So, yeah.

SPEAKER_00 29:34

You know, it's really interesting, is you know, I remember the first time I filled my own bucket, and you know, I had all the things that were on my bucket list sort of thing and the dream chart. And then it was like, maybe it's a bigger bucket, you know, instead of one nice car, let's get a multiple. And maybe it's not just one nice house, it's two nice houses, and that sort of stuff. And eventually, uh and I think that was a part of me being first-time rich to, you know, that that I don't know, wanting to look rich more than be rich type thing.

SPEAKER_01 30:05

Well, that that's human nature, right?

SPEAKER_00 30:07

For me, I don't I don't deny myself that stuff because I'd worked my tail off to do it. Nowadays, though, I see doing these podcasts is more important and giving back, and teaching others to me is more important than doing that stuff. But you know, it I think we all have to get there. So let me just finish this up with one very simple question that's not that simple. All right. Um person sitting on a million bucks a year now or a million dollar a year business, what's the two or three mindset shifts they've got to make to go for the hundred million, to go for the exponential and the scale?

Fund Mechanics, Exemptions, And Costs

SPEAKER_01 30:53

So yeah, so you you let's just say, let's just take a dentist, okay? They make really good money, they work three days a week after they got their business up. They they they're they're they they they're all four days and they work three days. I've seen this over and over, right? And they make a real they have a really good life. So you're gonna talk this person out of that really good life so they can have a uh generational wealth, okay? They have plenty of money for them and their family. And so that's a you know, a a kind of a decision the person needs to kind of make because they're gonna have to risk you know, they're gonna have to risk a lot to go big. So would that dentist decide, you know what I'm gonna do? I'm gonna drill teeth three days a week and two and a half days a week that I used to not work. I'm gonna try to build a fund or investors and go buy more dental offices. And in 16 years from now, I'm gonna have 45 dental offices all working in these five states. And then I'm gonna retire because I wanted to go big. And I think it's a personal thing. These people have worked hard, they have a great life. Who's gonna talk about that great life? There are some people though, and I was when I was 40, just once in my life, I want to go for it all. I want to go large. I don't want to start a business and make it work. I want to go for a and see if I can. What can I do in this life? And so I don't know how you would talk. I think it's just a mental desire in someone that just wants to try to go big once in their life. And that dentist has the ability. He has the time and the money to do it. If he learns how to raise capital investors and how to duplicate himself, which you can do, um, 16 years from now, you could have 45 dental locations and you could be generationally wealth, wealthy, not just wealthy. Right. So I that's kind of the roundabout. So I don't know how to answer that, except for you got to find the right person who really believes and wants to try it once. Now they might fail at it. This is the problem. This is the problem and the great thing. You get to fail at stuff, right? Can you imagine you're living a life where not you couldn't fail anything? It'd be boring, right? And but you know, say it'd be safe, but boring. But so I I I don't know how to properly answer your question.

SPEAKER_00 33:12

But that's the old saying of if you knew you were going to succeed, yeah, what would you start? Yeah, there you go. And I think that, you know, very bluntly, most dreams die on the on the never started list rather than on the actually failed list. So John Pennington, thank you.$100 million. Let's go. Thanks for joining me on the$100 million podcast. If you've got value from today's episode, make sure you've subscribed and share this with all of your friends. Never miss a strategy that could change your business and your life. And remember, the fastest way to scale is to learn from those who've done it. That's what this show is all about. See you on the next episode.