Giving is receiving, with Victor Lagos

On this week's episode of The Business Diaries of Phuong and Jay. We'll be talking about starting a business in 2022 post-Covid, how getting into a large amount of debt actually helped me. And where should I invest my money, property or business? Cue music. Jerome.

And we have, uh, we have the radio star right here with his loud voice. Uh, I mean, I hate that intro, right? I hate that. Pretty good. Well, guys, today we have a special guest joining us on the show.

He is a residential and commercial finance broker who started his business mid 2022, started working in financial services since he was 19 prior to the GFC, being a mortgage broker for eight years now and now owns Lagos Financial. Welcome Victor Lagos. Thanks guys. How are you doing man? I'm good.

Good, good. Intro. Very good. much. I'm spot on.

I must be on my A-game today. I did not mess it up once. Usually I mess up a couple of takes and all that, but, um. Yeah, man. Welcome.

Um. So from my understanding, this is your first podcast. It is actually. No, sorry. I have been on a podcast before.

Oh, yeah. Yes. Yeah. A buyer's agent interviewed me. It wasn't quite as structured as this.

Um, there was a big camera in my face, and I had a lapel, and it was, uh, it was recorded, and it was up on YouTube. All right, well, that's. Cool, but this one's cool. I like this structure. Better, man.

We try to try to pull out all the big guns for you, mate. Usually it's not like this matches like that today. Just because you're on the show, you know, like, why not? Why not? Thanks, guys.

Yeah, but anyways, need. To make it look good for. People, right? Yeah, yeah. Um, Victor, I know I just introduced you this now, but do you want to give us a little bit intro about yourself, about your your business?

A little plug? Shameless plug. Sure. Yeah. Look, I only just started in July this year.

Uh, Lagos financial. My name is Victor Lagos. So obviously just taking my name. Uh, I really just wanted to be a representation of me at the end of the day. Like, you have a business name, but the branding should represent the person that you are.

I'm the face of the business. I am going to grow it, but that's kind of the basis of it. But look, I'm residential and commercial. A lot of residential mortgage brokers don't know how to do commercial, I do. I spent the last couple of years learning it.

I got my diploma in commercial lending. I joined the Commercial Asset Finance Brokers Association. So I've got that plus the Finance Brokers Association. So two of them. Um, I've got a lot of professional development.

I joined another mentoring course, so I really put myself out there to understand commercial lending so I can help business owners. Right. Consumer lending, car loans and mortgages, which is just for, you know, mum and dad's. And, you know. I like how like how you said that with so much convictions like, yeah, I do, I do it too, you know.

Well he works with um, a um, another guest that we've, um, I guess done a podcast for before and short for him to, um, Steve, police see a pretty big commercial, um, buyer's agent, um, in Australia, I guess. Um, so from my understanding, you do a lot of business with him too. So if you're listening to this podcast and you're looking to get a loan for a commercial property, Victor's your guy. Um, but yeah, let's get straight into it. Oh, yeah.

Man. So I just wanted to understand a little bit about your your business. Like, what was what was it like getting away from the 9 to 5 and whatnot? Yeah. So I've actually been as a as you mentioned, Jay said, I've been a broker for about eight years.

Yeah. I initially started my broking business. So when I first started as a broker, I was working for a company, so I was paid. Plus I was able to earn commission and that was for about 7 or 8 months in 2014 working for a property group. And then I started my own business on my own in 2016.

So I really had that exposure to what what it is like to do it on my own. So was it in conjunction with the the business like. At the time? No it was I went all in, but I borrowed money to start it off. So I took a start up business loan from ANZ Bank and I had no idea what I was doing, I winged it.

I invested into courses. I wanted someone to just tell me what to do, and I learn a lot. But I spent a lot, and what I didn't realise at the time is that the most important thing is to have clients coming through the door. What do you mean? You know?

What do you mean? That is the bread and butter business. I think that would help, mate. I know I would. I know you think that.

What were you thinking at the time? I had a really nice website, you know, professional videos. What were you thinking? If it wasn't. If you didn't need clients.

Look, it's not that I didn't think I needed clients. I just thought that if I had a nice brand out there, that clients would come to me. Right? Or something. Does.

It does help, though. But like, at the end of the day, I reckon that the the business relationship between the client and. Yourself would help. Right. Well, that's what I did this time round.

I flipped it. I don't even have a website yet. Right. So you went into customer client first, and then they started coming after. Okay.

Correct. Yeah. And also I'm self-funding this time, whereas previously I funded it from a bank loan. Right. And the problem is that because you have to pay interest and you have to pay it back.

Yeah. But I didn't have the revenue to pay it back. Right. So then And I was like, okay, what do I do? So I mean.

Sorry, before you go. Like, I do like one thing that you did correctly that that I think is, is a great way to, to start off a business is to invest in yourself. So the way that the thing that you did by getting a lot of courses, mentorship and all that stuff is, is great. Tell me a little bit about that. So there's a there's a company called the entourage.

Guy named Jack Tolosa started that business still going to to this day. I signed up for a program there, and I was around entrepreneurs and business owners, and it was really great. I learned a lot about the fundamentals, you know, about, you know, creating a sales funnel or a marketing funnel. Um, but it was they teach you what you need to do, but not how to do it. And the how to is always the most difficult piece, because if you're not technical minded, if you don't have the time to invest, if you're already busy trying to do everything else and you're trying to learn a new skill, and then especially in not in your exact field, like because obviously my field is finance, right?

And broking, I don't know how to build sales funnels online and do Facebook marketing. But I learned what needed to be done. So then fast forward. I ended up shutting that business down and I joined another mortgage broking business. I worked there for four and a half years in the last 12 months of working with them.

I actually started running Facebook ads under my own brand. Victor Lagos, commercial finance broker. So it wasn't a conflict of interest. I wasn't trying to set up a separate brand. It was just me, right?

I was representing me, put myself out there just like a real estate agent, right? They might work for Ray white or whatever, but it's their name, their brand, their face that goes out to the wall. Why aren't you doing the same thing with the as you like you you still do like mortgage broker broking, right? Correct. But commercial.

So the mortgage broker was working was only residential. Oh okay. And I and I sort of said, you know what, I want to actually start learning commercial. And I asked them for support. So my plan was to partner with them and say, look, let's instead of me being a, you know, employee and you mentioned page, I sat down with the boss and I said, look, I know you know, things have been going well and you want to, you know, you said to me, you give me a pay rise.

I said, I don't want your pay rise. I don't want the pay rise. What I prefer is a bigger chunk of commission for the deals that I bring in, so that I can invest in growing this commercial arm. Because I know that you need to put your money where your mouth is. Correct.

Because if you don't do the work, you don't get paid and that's it. But look, you touched upon two important things that I believe you definitely need. Um, being an entrepreneur, owning your own business. Right. Um, the number one is early.

You spoke about, um, a financial you touch up on financial acumen. So basically your knowledge of finance and understanding that without finance or without proper control of your finances and your business, you're you're going to be spending more than you make. And number two is, um, it's like knowing that business in general, the all the, um, all the different attributes of a good business owner are, um, is that like business in general is a skill, right? It's not like you said yourself, you know, you came from a finance background, you didn't know the business side of things and you had to learn all that. And I do think that's something that, um, a lot of people don't understand is that they think they're just going to open a business and that's it, right?

They're going to be successful because they're an expert in what they do. It's not the case. Business owning or starting up your own business, understanding the system, understanding where to find knowledge or the how to's stuff that's a skill in its own right. So you've got to be you've got to be pretty, um, savvy with where you find your information, how you implement that to your business. Yeah.

Correct. Correct. Um, but yeah. I think, I think what people usually tend to think when they, they're doing, they've worked for many years in a particular field. They've done the job.

They're really good at it. Right. And they, they believe that because they know the work, they can go out on their own and, uh, open a business, be very successful at it. But unfortunately, like I said, there's a there's another skill set that you need to learn to be able to, to, to grow that, uh, that business. It's funny you say that because that's the thing that I identified.

So when I when I realised that I need to be. I want to be a commercial broker. My background was always residential. I said, what do I need to do? What skills do I need to acquire?

And one of those was I need to learn commercial lending, right. So I invested into a course or actually I asked my previous employer they paid for it, but I invested the time. Is that does that classifies conflict of interest? No no no no no. Because I was bringing the business in to their brand.

And. We were splitting the commission. So they were getting paid. Right? Okay.

But that wasn't my predominant role. That was kind of secondary. My predominant role was to serve their clients. That's what I was getting paid a salary for. But the commission that I was earning from my own deals, whether residential or commercial, I would reinvest that into marketing.

So that was the second skill I needed to correct to acquire, which was the skill of customer acquisition. Right? That's marketing and sales, right? Um, so then I those two worked hand in hand. Right.

Learn how to do commercial lending and learn how to market and sell. Out of curiosity, what do you think is the number one skill set, a entrepreneur or a striving business owner has to have. Mindset, a mindset. Bye bye. Five really?

Yeah. Because if you don't have the right mindset, it's very easy to get overwhelmed by mindset. What do you mean? So things get are challenging when you when you start a business, you have to wear every single hat and you have to chop and change regularly. And if you're if you don't have the right attitude, then it's very easy to be overwhelmed.

Um, give up and not bring your best self when you talk to your customers or your other stakeholders. Or, you know, it's funny though, like the mindset thing, it's such a cliche though, like people don't get it. Like people who haven't gone through it. Think of mindset. It's usually classified as woo woo kind of thing.

But um, yeah, well. It depends on what what angle you look at it. But I get it like there's a book called mindset which talks about fixed mindset versus a growth mindset. And in simple terms, fixed means just stuck in your ways. Yep.

And growth means you're looking at different ways outside the box. For me. I enter that a little bit different considering what the attribute or skill set I find that it's most, uh, would help you in terms of being more successful as possible is definitely sales for me. My sales and marketing, obviously. Um, because I do believe that sales in general is the lifeblood of any business.

If you're not able to bring in any new clients, like you said earlier, you didn't, you, you weren't focus on or you didn't understand, you had to bring business earlier to. I think there's a balance there, man. Like I wouldn't say like sales is the, uh, the, the, the foremost, most important things. It is one of the, the top, top worst attribute of a business. But you obviously need the people behind it to do the work as well.

So, yeah, uh, sales is to bring the business. But if you, if you're selling something and there's not a substance behind it, it's kind of hard to, to, uh, to for people to believe. Oh no, I, I get that, but I'm, I'm just saying, um, and I think that's why a lot of companies in general value their sales team so much is because without them, there's no business coming in. And without the business coming, there's no business in general. But see, I think there's people out there that are big visionaries.

correct? Um, entrepreneur at heart. But they're not actually good salespeople. Yeah. And I think what they do is they identify who's the good salesperson.

Correct. And they bring them into that field. And that that touches upon, like, what you've always said, like without the business itself, it it relies on a team. It's not just a like for you for you. You're a one man band at the moment.

I've got one support staff at the moment. And in terms of, uh, scaling or growing the business, what's like what's the next recruit you're looking at, another salesperson or not yet? Yeah. Can I can I rephrase that question in another way, though? Like it's to me.

Let's listen to the story that you've actually taught us. Uh, up until now, it's I get the sense that you're very self-aware. You are? Yeah. So you understand your strength and your weakness.

So just, uh, piggybacking on Jay's question, what sort of weaknesses do you have at the moment that you want to fill in for your business? Yeah, that's a good question. So marketing is definitely something that I'm not, um, abreast to. What? What's going on?

I know it's ever changing environment, whether it's Google or Facebook or LinkedIn. Podcasts? Yeah. Books. Radio logs.

You mean. Yeah. Yeah, sure. And, um, rather than hiring someone up front, you know, saying you want to be my full time marketing manager, pay me, you know, salary and get them to do everything. I think it's important to work with businesses like you guys because you can outsource a lot of it.

And you just do this day in, day out. Mhm. I'm not trying you're not trying to do everything for everyone in marketing. Right. So and that's, that's something that.

It's pros and cons like um I'm not trying to like um say that we're not, um, efficient or successful in driving traffic to your business, but I think there's a pros and cons in terms of saying in-house versus agency, which is better. We have we've had this conversation with another marketing expert, too, and he says that, um, in terms of, um, in-house, what you get is you get, um, more, uh, I guess dedication to the business, considering that's all they do. They and they invest it in just that business, right? Opposed to other agencies, you've got them focusing on, you know, 5 or 6 other accounts as well. So it really depends on where, um, what you value more.

Um, and what works for you more really. Right. I truly believe that the jury's still out on this particular aspect anyway. So, yeah, I mean, if you. Find on the size of the business and how long they've been around, like, I'm just a Start-Up, right?

So for me to invest a lot of money in hiring a full time base in Australia, yeah, that's going to eat into a lot of my 100% correct. Pros and cons of everything, I guess. Right. Um, so look, and one more question before we move on to the next topic is, um, mindset, man. What did you have any mind blocks or roadblocks coming into your business?

Um, one that we find that a lot of entrepreneurs or Start-Ups have is that they say, you know, everyone's doing it. Um, so it won't work or the market is saturated with that service. I won't do it. Is that is that something you went through? I get it.

I mean, in my in my field, specifically the mortgage broking Barkingside. There's about 18,000 brokers. Oh. Too many. It's a lot around Australia.

Is it around Australia? Yeah. And anyone you talk to probably has dealt with a mortgage broker before. Yeah. So how do you compete with that?

And so I get it for someone entering the industry. Now what's your point of difference? Right. What about the number of lenders that are out there for for mortgage brokers to look into? Oh yeah.

There's a lot. I've got like 30 just on residential. Another maybe 20 for commercial. So there's enough to go around. Is that what you saw?

Oh yeah. There's plenty of lenders. That's not that's there's abundance of money out there that, you know, from lenders that are willing to lend the money to people. But you've got to understand their policies, their appetite, like in terms of what type of customers they want to acquire. Yeah.

You know, they're um, they're niches, they call it. So it's hard to juggle that. And that's just the technical aspect. Right. And then we talked about, you know, getting the customers, if you're new to industry and you have to go out and find customers, how do you find them.

And you have to tell them and demonstrate to them that they're a better broker than the guy they've spoke to before. And if you're new. Like, how do you compete with that for me? I've got a point of difference. I've been in the industry since I was 19.

I'm 35 now, nearly 36. I've worked inside the financial institutions, work for a big bank. I used to approve home loans, so I was the one saying yes or no. So now I know what to present to banks, because I just present what I used to want to be presented to. Correct.

Right. Do you find it hard as being as big a new business that you know, your your brain is not totally out there? Do you find it hard to get clients at the moment, or is it, uh. To be honest, I'm quite blessed because, uh, before I started the business, as I mentioned to you guys earlier, I was running Facebook ads. That's how I reached out and connected with Steve Parisi, the buyer's agent.

He saw my ads, and he's like, I like what you're doing. Yeah. He's an I bought a referral partner now. Yeah. Also, I left on good terms with my previous employer because I helped them grow their business and we learnt a lot from each other.

We helped each other a lot. And then my number two, uh, referral partner. So. So they're affirming all the commercial clients, right. And then you just pay them a referral fee or whatever.

Yeah. And that's, um, the things a lot of people don't realise too is. Yeah, man. Just your, um, networking is so important as a, as a business in general because joint ventures partners are real. That's a real thing, right?

They give you a lot of business if you're partnering up with people who lack a certain aspect in their business to drive the sale across, for example, buyers agency and a mortgage broker. Right. They complement each other really well. So you really got to find those, those networks where they they'd be giving you muscle work. So that means you don't have to work so hard to find, uh, leads.

Right. Because they're feeding you some leads at the same time as you're doing it, obviously. Yeah, exactly. Um, and for us, uh, similar to you with your agency for mortgage broker, we've got marketing, uh, partners who feed us leads for production, because that's what we focus on. Right?

Yeah. Perfect. What? Uh, sorry. Um.

I'm interested because you you say you you're still in great contact with your previous employer. Yeah. And that was basically in the last 9 or 5, right? Yeah. Correct.

So I think this is a question that people don't really dwell upon is like, how do you how did you transition from that to your own business and how did you maintain that relationship? Yeah. So in other words, like how did you quit? Yeah. Well, it started when I planted the seed, like I mentioned, where I said I don't want the pay rise.

Yeah, I want to get a higher commission and I want to invest in this, and I want to partner with you guys in the future and grow the commercial arm of the residential business. So you guys do residential. I'll do the commercial. And they said yes. So that was a good win for me.

So that's the trajectory that I was on. And there was no hesitation. He was like, okay, I'm not going to pay you higher, but I'm going to get well. I mean, they they recognised that I was, you know, bringing, you know, I was ambitious and I was actually helping their business quite a lot. And I had that, that ability and I was driven.

Right. But what happened was we were leading towards that agreement. And it just kind of made more sense to do it on my own, because they were already getting quite a lot of, um, Momentum doing what they were doing. And if I then sort of latched on and said, I'm going to do the commercial side, then I needed to have support. But the support they had was built around their residential business, not around commercial.

Right. So it was like, well, rather than, I guess, sharing the, the profits, um, and then having to then reinvest that to grow my business within their business. Let's, let's do it on my own. Right. And that took, that took a bit of courage.

Right. Because I can imagine the feeling that you guys had when you got up to your boss like, hey, uh, I'm doing this on my own now. Like, they were upset. Actually, they were upset because, you know, they invested that time and obviously they paid for my course. And they were like, you know, we thought you wanted to work with us.

And I was like, well. Well, you do. I. Do you still. And then that's the thing, because we we established that relationship, um, and that trust.

They said, well, why don't we just keep working with you for the commercial deals like the original agreement. All right, but I just I can still have my own business, which I do. And every time they have a commercial inquiry, it comes to me. So nothing's changed. Not really.

Well, yeah. I mean, I don't go to the team meetings anymore and not under their brand. No. But then in terms of the, the, uh, client flow and everything, nothing's changed. You're still getting the commission.

You're still getting your commission. Yeah. And then nothing's changed. Well, what's a win win for them is that they. When I operate, when they send me a referral, it's not like a regular referral where I present as long as financial I operate under their brand.

A white label. Kind of like white label. I still got access to my old emails, so. Correct. Yeah, that's it again.

Like I said, man, um, Joint Ventures joint venture partner is so important in any industry. Like I feel like people are a lot more open about it. Businesses are more a lot more open about like creating relationships as opposed to building bridges and competing with each other instead, you know? Yeah, exactly. Yeah.

And there's a lot of business out there, like it's a $2 trillion industry in residential. And then there's more in the commercial as well. Yeah. Yeah. You know, so $2 trillion.

Yeah. It's big. Wow. It's big money. Yeah.

And probably the big industry. Even if you get 1% of that, that'd be great. I think I think residential property is about 10 trillion. Hmm. Wow.

Dude, that is insane. Mhm. All right. I think I guess this, uh, we'll be moving on to the next topic. Uh, this is the one you wanted to hit up, Phil?

Yes. Uh, so I did read that you had a little a bit of a personal run in with that, right? Yeah. So how did you become someone who is in debt to now? Someone giving out debt?

Yeah. Yeah. It's funny. It's true. I do give out debts.

I make money from selling debt, essentially. Well, I sell customers to debt providers. Yeah, because that's what I. At the end of the day, I got to present customers to say, why is this a person that this bank or this lender should give money to? Yeah.

So I got to sell them and then ultimately they I love it because it's a win win win scenario. Right. They they want the debt. They've got an objective and they don't care about the debt. They want the objective whether it's property or to buy a business or whatnot.

That's true. They want the objective and not they actually they don't really think about that debt. So what about solution man? Not about the process. Always.

Yeah. So my I have a tagline. And that tagline is I will teach you what the banks want, and that's how you can benefit from debt and not lose from it. Yeah, right. And that's come from my own experiences.

And and, uh, you know, to answer your question for, you know, when I was 18, I, when I was working full time at Kohl's at the time and I went to Saint George Bank and they gave me, you know, $18,000. No, sorry, $12,000 straight off the bat. Um, no questions asked. Personal loan. I used it to buy a car.

My second car, actually, uh, first car I bought cash was $1,000 at 18. And making dumb decisions already a lot. Yeah, yeah. But but even before that, um, you know, to share a personal story, like, my mom is actually, uh, Filipino background, and a lot of Filipinos, um, have got issues with credit card debt. And it's not because they're they're bad with money.

It's because they always intend to pay it back later. Right. So they'll look after their family and they'll they'll have the intention to pay it back, and that's fine. But credit cards allow you to spend more than you earn, and that's what you're in. You end up in a, um, in a trap.

And if you can't pay back your debt, your credit cards in clear it in full, then you carry that over and then you have to pay interest on that. And then if you're paying the minimum, you're paying interest on interest. So the compounding effect works against you. That's why they you know, laws changed. And at the beginning, at the bottom of credit card statements, it actually says if you pay the minimum, it will take you 20 years to pay up.

It actually says the estimated term that's that's new. And never used to say that because you just say, I've got a bill $150, I'll pay it. But if you just pay that and you're paying, say, 20% interest rate or more, it'll take you 15, 20. 20% interest rates. Credit cards are expensive.

Oh yeah. That's right. Yeah, yeah. So I'm I'm thinking about loans. Yeah.

You're right. Yeah, yeah. Cool. So, um, and I just, you know, I got into the finance game when I was 19, and so my income went up and then I was able to get more credit cards because, you know, why not? Banks are happy to give you credit cards.

And I don't know, it was weird because I kind of had this feeling like it was a bit of like a trophy. So I had like five credit cards. I'm like, yeah, look at this. You know. But I was intelligent too.

Like, I never I was never late on payments. And I used to do what's called balance transfers. So I would actually like get one card to pay out the other. But does it pay less interest? But doesn't that incur interest on itself because that's basically called a cash advance?

No, not for balance transfer. Balance transfer is like uh, I think that's when correct me if I'm wrong, uh, that's what banks want you to basically take your business to take on your debt so that they can get the interest from you. Right? So that's why they allow you to do. It's like a refinance or a debt consolidation.

Yeah. Let's do a thing like, can you still do that? Yeah, you. Can still do it. So say say you've got 20 grand owing on your credit card and you're paying 20% interest rate because you weren't able to clear the balance because it's too much, you know, 20 grand, you can clear that one hit.

So then instead of paying it off in like, say, 20 years, by paying the minimum, you go to another credit card provider and you they offer, you say a 0% or a 2% interest rate for a balance transfer. So then you apply for a $20,000 credit card, and they then pay out that other card directly. So the debt moves from that that institution to this one. The problem with that, and this is what my mom used to do, and it happened to me as well, is they pay it out, but they can't enforce you closing that card. So you're like, awesome, I've got a better interest rate.

I've got 20 grand on here, and now I have 20 grand available here. Hmm. So you then. Spend on that card. So now you've got 40 grand worth of debt.

Right. That's how easy it is. To fall into this. Trap. I just want to reinstate that.

This is not financial advice. Yeah. Um. Yes. Yeah, that's a good.

Let's go back to the story with, uh, with with your. Well, these are rough numbers, but I didn't have 40 grand, and I didn't. I wasn't silly where I just allowed it to get to that point. But I did use cards to cover off expenses, and, um, and I wasn't able to clear them, so I was carrying a lot of personal debt for, for many years. And, um, the way, the way out of that is to really, you know, be honest with yourself.

Um, and and look at it and say how much? How much income do I have? How much do I spend and what's left? And then you have to. Then whatever's left, you need to pay the debt back and stick to that.

So then at one point, I even had a second job working out. I was working at Macquarie Bank at the time. Where was Macquarie? No, no, sorry. It was a different a different institution.

But I was also working at Bunnings and um, what I, what I actually did was I had a personal loan and personal loans have their own BSB and account number. So I actually told payroll to pay the personal loan directly. So every hour that I put into that second job, it went straight into the smart. So it didn't even allow me to spend it on anything else. Oh, you can do that.

Of course you can. Yeah. Wow. Okay. Well, it's just it's my name, right?

It's just an account number to them. It's just an account, but it's an actual loan. It's after tax rate. Yeah okay. Yeah, yeah.

That's interesting. So you got to yeah. You got to be disciplined. And then and then the other thing you can do is um, if you've, you know, if you've got other accounts that you're using, say for savings or that, you know, to pay back that you can tell payroll to pay multiple accounts. Not all payroll will do that, but some for bigger banks or institutions.

They'll pay like, you know, 500 there, 300 there, thousand there. And they'll do it for you. So that way you don't have, you know, the temptation to spend it on something else. That's like how I usually give my money to my wife. And I'm gonna deal with that.

I just don't get into debt in general. Yeah. And then you have to worry about it. I'm getting debt. It's too.

Easy. That's the problem. And unless you got the right, um, uh, mechanisms that you put in place the right structures, um, and even just, you know, the right mindset, it's very easy to fall into this debt trap. So. So you're 185 credit cards and a personal loan.

That's, uh, quite a lot of debts for someone who's 18 years old. Just got into the workforce and whatnot. How long did it take you to get rid of all of the the debts? Uh, well, I had a I had a window when I was debt free when I was probably about 25 ish, so I managed to clear it all. Pay it off.

Second job and everything I said. But you know, old habits die hard. Yep. I went and got a new car again. Yeah, I got a new car.

I got a car loan and then. Yeah. Yeah. Look. And then.

And then I told you guys when I started my own business, that was in 2016. Um, I got a start up business loan, uh, which was an overdraft, and I didn't really understand at the time. I didn't know what an overdraft was. I just thought it was a loan. But overdrafts aren't designed to carry.

They're not like a term loan. You don't hold them for a long period of time. They're designed short term only. So that put me into trouble because I didn't have the revenue or the client to pay it back. So instead of, you know, rushing and trying to find customers because customers don't want to come to you if you're desperate.

Right. Yeah. They can sense it. Right. So I, um, and I wasn't really that confident with what I was doing, but in terms of the business, I was a Start-Up, etc..

So what I did was I, um, I sold my investment property because I owned a property at the time that my parents helped me buy. Um, it wasn't the greatest investment. Uh, there was no thought process behind buying it. It was purely because it was in the same suburb that our family home was. So it was just, you know, move and relocate.

Right. And my parents were my first tenants there and, um, sold that. And I cleared the debt and I paid back. I had a credit card as well, business credit card, which I had maxed out. Oh my God, I know.

Oh my God. I love that old habits die hard. What changed for me was actually my my wife. So she we met in in 2016 and, uh, she's very good with money. So she'd never had a credit card before.

She never had any debt and she just was good at saving, whereas I was the opposite. Right. And, um, and I was open with her, and I told her about my debt, and she she went red in the face, like she was thinking, like, what. Have I done? Yeah.

Yeah. And I'm like, well, yeah. So we obviously got to figure. This out. And we're on this relationship, which is good man.

I commend you for that. Thank you. Well, that that's. What I think is one of the issues that a lot of people have is they're not open and honest about their finances with their with their, you know, partners. And if you're not, then it's always difficult to achieve financial goals because you're on different pages, um, and you're keeping secrets because a lot of people keep secrets with how they spend money.

Um, so by, you know, putting it out, putting it all out on the table, we were able to, you know, look at it for what it was and, and come up with a plan. And the plan helped that I sold the property because I was able to get rid of that debt. And then that's when I joined my last employer, so I. Yeah, right. Um, and that was a commission only role.

So when I first started, I wasn't paid. So I was already sales, like you mentioned before. Um, you know, getting that skill, I was basically calling people that were online leads. And so coming, coming from a debt background and, and needing to clear all that and having that, I even had a capital gains tax that I need to pay for selling that property. So I have more and more debt.

Like. Textiles. Panicking. Well, you thought you'd probably clear your debt by selling your property, but you actually incurred more debt. I incurred more debt because I had spent that.

The profits already on the business, which I started up. So I should have kept money aside for the taxes. So anyways. And that's something people don't really do. Most of the time they see money comes like, oh great, I got all this money, I'm gonna spend it.

They don't see like the, the, the tax, uh, like aspect of it usually. Well, that's the thing that changed for me. Not just the tax, but it's understanding how much do you need to spend because, say, bank accounts will track how much you spent in the past, but they'll never tell you how much you need to have in the account. And that's what you need to be aware of. So it's like, say you got payday today a thousand bucks and you're like, awesome, I got 1000 bucks available.

But next week you got an electricity bill, a phone bill, and Red Joe's Jew. So really, that thousand bucks is probably like 200 bucks max. Negative. 1000 or. Negative.

Yeah, yeah. But but then you go out and spend a thousand bucks and then you're like, oh, crap, I actually forgot I needed to pay that. Yeah. So now where do I get it? Credit card?

Yeah. You see. So anyways to. So I don't go too long, I just, I just say what changed for me. I then started the concept and this is what, what really flipped.

It's when you spend on credit cards you're stealing from your future self. Yeah, right. When you save powerful giving to your future self. Powerful. Love it.

Powerful. Powerful. So like so basically I flipped that and said I want to now give to my future. So I don't want to steal for my future self. Because if you buy something on credit card today, you get instant gratification.

It feels great for the moment, but it passes very quickly and then your future self is like, oh thanks past self, now I'm going to pay this back. Yeah, right. You got to feel that great feeling. Now I've got to. Pay the shit.

Back. What a dick. Put a dick right. But if you save, you put money aside progressively. It feels good while you're doing it.

And then in the future, when you need to buy something and you've already got the money put aside for it, it's like, thanks, PA self, you looked after me. Yeah. And then you get to carry that good feeling in the future because you know that free. Real free. Yeah.

Yeah. Because, um, I just want to tie everything back into, uh, the I guess the overarching goal of this podcast, which is business in general. So, Victor, um, the topic was how getting into a large amount of debt actually helped me. Can you tell us about how, I guess your past experience with debt has helped you, um, run your business so far? Yeah.

So now I didn't borrow any money, so I launched the business purely off the back of receiving revenue from my clients. Yeah, right. And I also, um, I also started to look at money that's coming through the door. Yep. Before I make expense, uh, decisions to spend money.

Yep. So I don't I don't look at it from. Okay, I've got that. And then I'll, I'll be able to earn the money to pay it back later. Now, look.

Okay. How much how much guaranteed income do I actually have? And then if I'm going to put it on the credit card, the card is going to be cleared. Yeah, right. Because the revenue will come in the month after.

So. Oh okay. You know what I mean. So in my industry it's a little bit different than I don't. If I win a customer I don't just invoice and get paid.

Straight away. The banks pay me, right? The lenders pay me because I introduced them business. And if I settle a loan, say today, I don't get paid until the end of the next month. So that's.

Tough. It is tough. Yeah. Especially with, like, callbacks to and all that. Well, claw.

Backs is what makes things really difficult. And that's that's why, you know, good marketing helps you to stay in touch with you. Could you explain to me what claw backs is? So not many people know this, but say you're my customer and I worked months to help you, and I. You know, you're happy I did the deal.

The bank pays me a commission. If you then decide, say, three months later. Uh, Victor hasn't been in contact with me. Um, I want to buy another property, and, um, you know, you know, Joe Bloggs, broker, um, is in contact with me. He wants to now help me buy another property.

Um, he then does a loan for you, but he refinances the loan I set up for you. Victor set up right? The bank says. All right, Well, this loan was paid out in full. Only after a few months.

And anything between when it first started and two years. Um, that commission that I earned has to be paid back to them in full. It's tough. So all of. It.

All of it? Yeah. 12 months. It's all of it. Uh, second year, it's like 50% reduction, but.

Wow. So basically, all that work you did was nothing. Exactly. So. And it's a very good chance I would have spent that money to write, depending on the time.

That's true. Yeah. So that then affects my other clients too, because I've made revenue from other customers that I now need to use to pay back the bank. That's that's pretty cutthroat. So it basically incentivises you to keep in constant contact with them to refinance their loan every year.

Or is. How does it work? Well, even. If I finance it myself, I still got a pay clawback anyway. So it kind of makes sense for you to stay with that bank for at least two years before you change you.

You pay clawback on yourself as well. Yeah. I mean, of course I'd get commission on the new Deal anyway. So but it's like I'm doing double the work for the same amount of money. That's interesting, but it's still.

Better than if you went to another burger, right? Because at least you're staying with me and the revenue stays with me, as opposed to me paying back. And I lose you as a customer, right? So you'd need to you basically need to try and find the best deal possible for your clients. Well, regardless of what you're like, even now, with all interest rates rising, you need to constantly be working, like communicating with your clients.

You're already close clients. Exactly to try to get the best deal for them still. Yeah, yeah, yeah. Well, the good thing is I can contact their existing banks a lot of the time and ask for a reduction on interest rate if their repayments have been on time. If I compare with other because I don't know if you guys know this, but banks have got two forms of pricing.

They've got front book and back book. Front book is uh new customers. So they'll give you, you know, discounts and nice interest rates to win your business back. Book is existing customers and they call it a loyalty tax. So actually the more lower you are, the higher the interest rate you pay.

So so you're like, oh, I've been giving you been paying all my payments on time. I've been loyal to you as a bank, but you're giving me you're charging me a higher interest rate than you are to new customers. But why would they do that? Wouldn't it be better for them to keep the old customers? You would think that.

Yeah, well, that's just like business 101. Like keeping keeping, uh, current customer happy to keep paying. Yes. Well, in Australia, it's something that I think it's unique to Australia. Banks don't do this overseas.

It's something to do here. But to an extent, I can't really complain because if I do, then it means that there's a lot of customers. I can't help out there because if all the banks are constantly dropping their rates, yeah, there's no opportunity for me to refinance anyone because they're always on the same rate as anyone. Does that make sense? Just, um, before we close up on just this, uh, section, I want to ask you, majority of business, is it new loans or is it refinances?

Um, not a bit of both. So, yeah. So one thing that changed for me, um, starting this business compared to the first time around is I've got multiple marketing channels. Like, I don't just stick to one. I've got nine referral partners now.

Right? When I started, I had two, which is my previous employer and that buyer's agent we talked about, and now I've got like six more. And. That's big. Seven paid.

Off. Four months. Yeah. So you've been really active in like, uh, networking. A lot of networking.

Yeah, I joined the networking organisation. So I, I go and I, and I set up calls and, and we have coffees or we have, you know, one to 1 or 1 on one zoom and, and I really just talk and get to know them, understand their business. But the, the key thing is to give first. So I always look for providing referrals to others. Yep.

Uh, and then the law of reciprocation kicks in. That's why my my my my business tagline is giving is receiving. Yeah. So the more I give, the more I receive. The more I receive, the more I give.

So anyways. I think that's, um. Sorry. Just before I let you go on there, I think that's the tagline. That's the, um, title for this podcast.

Um, Jerome. Giving is receiving. Giving is receiving. Give to grow. Give to grow.

Yeah. Yeah, but but there's more to that. Giving is receiving is not just I'm going to receive later because I give. And then of course, I know that I'm receiving at the same time. But it's also, if you think about it, when you do something good for someone, the best part of it is when they get something good out of it.

If they say thank you, you really, really help me. That is the best feeling that you get as opposed to I just got paid right. It feels good to get to. It's a hard, um, mentality for consumers to actually understand, right, that that particular tagline you just said there. Yeah, it's it's sort of counter-intuitive, like, uh, to to receive a thank you, but what can what can I do with I think.

I can't do that. Exactly. It gives you energy, of course. But anyways, what just to finalise on the question. Where was the question again?

Setting up. Giving is receiving. No before. That tagline. How do you get all the leads?

Yes. You talked about the leads, right? So when when I do different multiple marketing channels, I've got Facebook ads which are for refinances, right? I've got referral partners that are purely commercial. I've got other referral partners that's Residential.

So it's, it's an array of, of different types of customers because I can do all of them. So I don't I don't when you said if it's just refinance or purchases, it's it's a bit of everything. Wow. Okay. Cool.

So maybe niching down all the time may not be the solution. That's interesting that that goes counter-intuitive to what I, I've been thinking about. Like, um, as a company, you should be niching down to one particular product, for example, right? Yeah. Whereas you have like nine channels for nine different things.

Well, some of them are the same things, right? Yeah. It's just about knowing who the for my referral partners, what type of customers do they have that I can serve. Okay. Because they may not do residential customers.

So why am I promoting residential to them? Right. They may not do commercial. So why am I talking about residential? Right.

So guys we're getting waved down by our producer drone. But so we got to move this along. So, um, sorry to cut you off there, but, uh, so the next topic, guys, this is probably, um, a one for those who have a business, I guess, and have been doing pretty well and. Have lightning round, I have I go. A little bit more, uh, capital to play around with.

The question goes, where should I invest my money in property or business? Victor, what's your thought on this one? Well, for me. Obviously with your property, of course it's a property. But just give us some insights.

Well, for me, I invested in the business first, so I. So basically, I put money into marketing. It was about $60,000 that I put into into lead generation and marketing. A lot of that didn't work, didn't pan out. So it was gone.

But at least it was my money. It wasn't borrowed money. Then when I started my business, I was sitting on a whole bunch of savings and I thought about it. I'm like, do I keep that aside and put it into my business, or do I invest it into a second property? And I thought about what how would I feel on the other end of it?

On the one hand, I've got all this cash, but I've got one property, the other hand, I've got two properties, no cash, but I've still got a business. I thought, that feels better to me. Okay, right. Well, it depends. I guess it depends where you're at in your life.

And if you think that, uh, if the business needs an injection of cash and to to gain more leads, gain more businesses, or do you want, do you want to diversify and buy a property so that you can have two streams of income? I call that the risk mitigation here. Like this. This is a form of risk mitigation because if you buy the house, that means you have like a hot asset there in case anything happens with your business. I mean, business, you can start with like literally $0 these days, right?

Yeah. Um, really? Yeah. If you don't have money, use your time, I guess. No, I mean, I guess.

Yeah. No. That's true. Yeah. Well, that's for me.

It was like exactly that. I'd known I'd done it in the past. I sold a property, and that got me out of debt. So I know that worst case scenario of the business fails. I'll have some equity in the properties.

I'll have access to cash while I, you know, get my feet off the ground to find. A new job. Mitigation. Yeah. So what's the verdict then?

Business or property? If you had to. If you had to choose one right now it's. I don't think it's a hard yes or no or it just depends. On.

You. Yeah, yeah. Depends where you are in life. Yeah. But also that gives me that gave me a push to be, um, putting myself out there to get new clients straight away because I didn't have capital to invest in the business.

It was purely off the back of revenue from past customers. Correct. So it's like it puts pressure on you. But that's what sometimes what you need. If I was sitting on, say, 60 grand of cash that I could have invested into websites and whatnot, yeah.

Then I may have been complacent in terms of putting myself out there. So that's hungry. Yeah, I'm so hungry. So so that worked for me. For other people that may not.

And they might end up, you know, frozen and be like. What to do with. It? Yeah. What do I do with it or you know.

Well, I actually I was in this, in this, um, I guess, um, predicament not too long ago, I had some cash from the previous business I sold, and I was like, what to do with it? And to be honest, I ended up building another business. But, um. Yeah, I mean, it really depends on where you are with your life and what you want to do with your money. There's a great saying.

I just want to share with you guys. Uh, I heard this recently, and I say this quite a lot, and there's there's two real ways to create a small fortune in in life. One is to spend less than you earn and invest the difference. And the second one is to provide something of value that other people are willing to pay for. So why not do both?

Why not do both to diversify? Yeah. And with that. That we end the podcast. Now, guys, if you enjoyed that episode, uh, actually, no.

Sorry. I hope you actually did get a lot of value from that episode. If you do have any mortgage or financial questions. Uh, Victor Lagos is your guy. Uh, Victor, I just want to quickly, uh, thank you for coming onto the show and, um, yeah, look forward to working with you more in the future, man.

Awesome. Thanks. I really appreciate the insight that you have. Thank you so much, man. No worries man.

Thank you so much. Thank you. Music.