"When Is It Safe to Quit My Job for My Business?" — Transcript

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1. 0:00I own a design build ADU company based
2. 0:02out of city of San Diego.
3. 0:03>> Design build?
4. 0:04>> Uh design build. So we're
5. 0:06>> Okay, got yeah, sorry.
6. 0:06>> Yeah, general contractor. And we use
7. 0:08those verticals for our own infield
8. 0:09development deals that we we just hold.
9. 0:12So we just hold them long term, use the
10. 0:13appreciation to offset that income. My
11. 0:15wife's a real estate professional, so it
12. 0:16works.
13. 0:17>> Good old reps. Yeah.
14. 0:18>> Yeah, thanks. So we do $5 million a
15. 0:21year. Looking to go to 10.
16. 0:23>> Okay.
17. 0:23>> Incredibly supply constrained. I work
18. 0:25with my dad, that's one thing I didn't
19. 0:26mention.
20. 0:27>> Is he talented tradesman? Workers?
21. 0:29>> Absolutely. Absolutely. So the design So
22. 0:31we the the margins are quite different
23. 0:33on both. But in the design the
24. 0:35the margins are like 80%.
25. 0:36>> Yeah.
26. 0:37>> It's ridiculous. On the construction
27. 0:38we're about 30%. We do fine.
28. 0:39>> Yeah.
29. 0:39>> Um the one of the constraints is I work
30. 0:42with my pops. Sorry dad, if you ever see
31. 0:43this.
32. 0:44>> Yeah.
33. 0:44>> Um he's yellow pad of paper guy and
34. 0:46there's just no way around it. So
35. 0:47>> um
36. 0:48We do good job. He has We've never
37. 0:49marketed once. We've never paid a dollar
38. 0:51for
39. 0:51>> Is he 80 or is he 60?
40. 0:52>> 68.
41. 0:53>> Oh.
42. 0:54>> Yeah.
43. 0:54>> Yeah. He's got some years. He's got some
44. 0:56years left. Yeah, yeah.
45. 0:57>> No, he he's the man. He's the
46. 0:59>> 80 you're like, "Huh." You can tough it
47. 1:00out, you know. [laughter]
48. 1:01>> Yeah, right.
49. 1:02So uh this is what's stopping me.
50. 1:04There's a there's a
51. 1:06uniqueness to this. So I'm actually
52. 1:07professional firefighter and have been
53. 1:08for the past 18 years.
54. 1:09>> Okay.
55. 1:10>> And so I have yet to go all in on this
56. 1:12company because that's what
57. 1:13>> Yeah, broke all in.
58. 1:14>> That's that's kind of like what we do.
59. 1:16And I work 10 days a month. I'm a
60. 1:17servant I have a servant's heart. That's
61. 1:18what I enjoy doing. There's it's a
62. 1:19selfish endeavor, right? Like I I help
63. 1:21people because it makes me feel good
64. 1:22about myself.
65. 1:23>> everyone does everything, right? Yeah,
66. 1:24sure. Okay.
67. 1:25>> Um I'm I've at this point 3 years ago I
68. 1:27should have been I should have been
69. 1:28retired. I should have left the fire
70. 1:29department, but I haven't.
71. 1:30>> Okay.
72. 1:30>> So that's what's stopping me. My
73. 1:32question is what objective criteria
74. 1:34should I use um
75. 1:36to figure out when is the you know, the
76. 1:37right time to leave the fire department?
77. 1:38>> What are you making right now?
78. 1:39>> At fire department?
79. 1:40>> No, I
80. 1:41>> Yeah.
81. 1:42I make a hundred and sixty-eight
82. 1:44thousand dollars a year.
83. 1:44>> that.
84. 1:45>> Yeah, [laughter] right. Um so our our
85. 1:47margins are are pretty good. We make net
86. 1:48about 1.2 million a year.
87. 1:50>> Are you you're 50/50 with your pops?
88. 1:52>> Uh no, he wants to go 50/50, but there's
89. 1:54there's a lot that goes back into it.
90. 1:55The reason I got involved because he got
91. 1:56sick. He was diagnosed with cancer.
92. 1:57>> Okay.
93. 1:58>> So, this was to make sure that his jobs
94. 2:00weren't losing money. For a long time I
95. 2:01looked I'm like, "Pops, you you paid $20
96. 2:03or you paid $20,000 to do their job?"
97. 2:05>> Yeah.
98. 2:05>> So, they've now saved a million dollars
99. 2:06in the bank and um yeah, so we're not
100. 2:08we're we're 70/30 but any point we could
101. 2:10go 50/50 and I do everything.
102. 2:12>> Okay. What is margin on the five again?
103. 2:14>> Uh overall 1.2 to split between like 80
104. 2:17and 30. We're on the on the planning
105. 2:19side of it and I work with other
106. 2:20developers as well so I do their plans
107. 2:22on the front end and they do the infill
108. 2:23development because they work cheaper
109. 2:24than me.
110. 2:25>> let me just so
111. 2:26>> Yeah.
112. 2:26>> 1.2 let's assume that if you pull the
113. 2:28lever you'd be a 50/50.
114. 2:30>> Yeah, for sure.
115. 2:30>> So, the question is I make $168,000 a
116. 2:33year
117. 2:35and in one thing
118. 2:37and I make $600,000 a year in another
119. 2:39thing.
120. 2:40And I would like to know when I am
121. 2:42secure enough with my $600,000 a year to
122. 2:43make up for 168.
123. 2:47>> Yeah, so to reframe it actually the
124. 2:48reason
125. 2:49>> [laughter]
126. 2:50>> I'm I'm just trying to
127. 2:51>> Yeah, no no no absolutely and I love
128. 2:53where this is going. The catalyst for
129. 2:54this question [laughter] was me
130. 2:54listening listening to your podcast this
131. 2:55morning that you just did.
132. 2:57>> Yeah.
133. 2:57>> Um and that's I don't want to get It's
134. 2:59not about money. Like I have I have more
135. 3:01than I could ever have dreamed for. Like
136. 3:02ever ever. It would It doesn't matter,
137. 3:04right? And so you're going to get to the
138. 3:06other side of this I've left and I'm
139. 3:08I've created another job. I'm going to
140. 3:09have to quit another job that I don't
141. 3:11like, right? So, it's it just seems like
142. 3:13you know, you having done that gone to
143. 3:14the other side of it where are you going
144. 3:16to find meaning? What do you do on the
145. 3:17other side of this thing? Look for
146. 3:18something else to do, right? So, I'm
147. 3:19just
148. 3:20>> Well, I think I'm a big believer that a
149. 3:22man must have a quest.
150. 3:23>> Sure.
151. 3:25>> And I I am not religious but I was once
152. 3:30and one of my favorite uh parts about
153. 3:32this is that before God gave man a wife,
154. 3:35he gave him a job.
155. 3:37And so I see work is inextricable
156. 3:40to how we live.
157. 3:41Right? And so
158. 3:44you I mean fundamentally you started
159. 3:46helping your pops out with this business
160. 3:48and running this business because you
161. 3:49had 20 days a month on your hands cuz
162. 3:51you had to do something, right?
163. 3:53>> For sure.
164. 3:54>> And so, this seems much more like a what
165. 3:56do I do with my life question
166. 3:58overall.
167. 4:00And so, if you were to leave the fire
168. 4:02department, what Like, I guess funnily,
169. 4:04like why is there a problem? Because I
170. 4:07think the premise of this was
171. 4:10I'm at 168. I've got 600k a year waiting
172. 4:13for me here, and if I actually spend
173. 4:14more time on it, I'm sure I could grow
174. 4:15it, which I'm sure you could, cuz you'd
175. 4:16have the time back. Um but I don't want
176. 4:19to quit. And so, that was the premise of
177. 4:21our discussion.
178. 4:23And to me, that's like, then don't quit.
179. 4:26It Like, you're like, I I don't want to
180. 4:28quit. And if you tell me to quit, I'm
181. 4:29going to tell you I don't want to quit.
182. 4:30And I'm like, all right, don't quit.
183. 4:32>> [laughter]
184. 4:32>> Yeah, but no, I I do want to quit. And
185. 4:33to be honest, I
186. 4:36And I would ask a question about like
187. 4:37all this, but they when they're going
188. 4:38over all things key man errors, I just
189. 4:39circled all of them.
190. 4:40>> Yeah.
191. 4:40>> And we're supply constrained. It's
192. 4:42ridiculous if we're just playing
193. 4:43>> And if you had 10 more full days a month
194. 4:45back, you could probably figure out some
195. 4:47of these things.
196. 4:47>> I think so, too.
197. 4:48>> Yeah.
198. 4:49>> Yeah.
199. 4:49>> So, what are you going to do?
200. 4:51>> That's a good question.
201. 4:51>> Yeah.
202. 4:52>> I got a 45-minute flight tonight to
203. 4:53figure it out.
204. 4:54>> [laughter]
205. 4:56>> Like,
206. 4:57what I like, well, let's do it. Let's do
207. 4:59it.
208. 5:01Why wouldn't you quit?
209. 5:03>> [snorts]
210. 5:04>> Cuz the money's not a thing. So, the
211. 5:05money's gone. So, because you obviously
212. 5:07numbers-wise, obviously you quit and do
213. 5:09the business. Okay.
214. 5:11So,
215. 5:12why not?
216. 5:14>> And
217. 5:15forgive me, cuz you got to all pay
218. 5:16taxes. So, I work for the most one of
219. 5:18the most affluent fire departments in
220. 5:19the nation. We work
221. 5:20>> Rancho Santa Fe is super
222. 5:21>> affluent area in in San Diego. Um I used
223. 5:23to work for a department that ran 20
224. 5:25calls a day. We run three calls a day. I
225. 5:27work 48-hour shifts, and I get more done
226. 5:29at work than I do at home because of
227. 5:31that. I've created key man errors
228. 5:32because I can just do it all work.
229. 5:34>> Yeah.
230. 5:34>> And so, to be honest, I go home, and I
231. 5:36have two young children, and so, I get
232. 5:37all that work done. When I go home, I am
233. 5:39I am there. I coach
234. 5:39>> You're like, "Honey, I got to go to
235. 5:40work." You know.
236. 5:41>> No, and she laughs. She's like, "All
237. 5:43right, for sure. Whatever you want to
238. 5:44do." Yeah. I'm like, "Oh, I'm so tired."
239. 5:45And it's like, "Well, we slept all
240. 5:46night." So, it's like it would be insane
241. 5:49um to walk away from that, and I have a
242. 5:50a super like high seniority position as
243. 5:52a captain
244. 5:53>> Yeah. Well, it sounds like you're
245. 5:54getting paid for study hall.
246. 5:55>> I mean
247. 5:56I hope my chief doesn't see this, but
248. 5:58yeah.
249. 5:58>> Yeah. All right.
250. 5:59>> [laughter]
251. 6:00>> Um
252. 6:01well, fundamentally, if if you're
253. 6:03working 100% of the time that you're if
254. 6:05you're if like
255. 6:07if you become less productive as a
256. 6:08result of leaving the job, I see that as
257. 6:10a double net negative.
258. 6:11>> For sure.
259. 6:12>> So,
260. 6:15if you quit the job, would you get more
261. 6:17done in the other business? Don't just
262. 6:18ask Let me just ask cuz like the math
263. 6:20equation is can I make 168,000 more
264. 6:23dollars of profit times two cuz you got
265. 6:25to split it, right? So, 300 and whatever
266. 6:28$40,000
267. 6:29uh of profit, and you guys are running 1
268. 6:312 on 5, right?
269. 6:33>> Mhm.
270. 6:33>> And so, 25-ish percent margins. So,
271. 6:36multiply that by four. So, 350 by four
272. 6:39So, probably like, you know, another 1.2
273. 6:42to 1.5 million dollars a year, whatever
274. 6:44the math is. Um of top line. If you quit
275. 6:47the fire fireman job, that would be your
276. 6:49break even. Can you do that?
277. 6:51>> Yeah, for sure.
278. 6:52>> For sure?
279. 6:53>> Yeah.
280. 6:54>> But I thought the time you get back
281. 6:55would be less productive.
282. 6:57>> I mean, I say that because I'm doing
283. 6:58other during the day, right? I'm
284. 6:59doing whatever. I'm right? So, if I
285. 7:01would, you know, dove all in, remain
286. 7:03focused, and and and went for And and
287. 7:05you cut the parachute, you have no
288. 7:06choice. I would have no choice. I would
289. 7:08like to think that it's in my nature to
290. 7:10make it happen.
291. 7:10>> Okay. So, you'd like to quit.
292. 7:12You're comfortable. You think you grow
293. 7:14this thing more.
294. 7:15>> Yeah.
295. 7:15>> And you're afraid to do it.
296. 7:16>> There you go.
297. 7:17>> And you rationalize why cuz of the other
298. 7:18reasons, but you know that's not really
299. 7:19true.
300. 7:20>> It's like a therapy session, yeah.
301. 7:21>> [snorts]
302. 7:23>> So, does that Does that give you the
303. 7:24answer?
304. 7:25>> It does.
305. 7:25>> Cool.
306. 7:26>> Appreciate it.
307. 7:26>> Rock and roll. Appreciate you.
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