53: Invest Your 401K in Yourself with Daniel Blue

10
Jul

Daniel Blue is the owner of Quest Education, a company that helps entrepreneurs obtain capital, pay off high-interest debt, and use self-directed retirement accounts to invest in alternative assets. We talk about self-directed investing, the Wall Street trap, and how to use retirement money for investments with zero penalties or taxes.

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Invest Your 401K in Yourself with Daniel Blue

Our guest is Daniel Blue, the owner of Quest Education, a company teaching both individuals and small business owners how they can use their IRA or 401k to have the pay of high interest debt without tax or penalties, receive business funding with no credit checks, and explore investment options outside of the stock market. So welcome to the show, Daniel.

Thank you for having me excited to be here this morning.

Yes, it’s great to have you here. Well, listen, you know, we spoke before and I know that you have a colorful journey as an entrepreneur. So so tell us a little bit like the short version of how you became an entrepreneur and what’s been your journey today.

Yeah, it’s interesting. I think entrepreneurs, they have a couple ways. I see two ways of actually becoming an entrepreneur. One, you’ve always wanted to become one and maybe when you were a kid, you mowed lawns when you were six years old and you hustled trading cards, baseball cards, Pokemon cards, kind of like the Gary Vee way, right? He talked about how he was just an entrepreneur since he came out of the womb. That wasn’t me. I grew up loving sports. I played sports in elementary school, middle school, and high school. Being an entrepreneur never crossed my mind.

And I kind of went down some dark paths in my middle school years and high school years and ended up stumbling across sales at 18 years old. And I was able to have a successful career in sales. And I truly believe that the reason I’m an entrepreneur today is because of my ability to sell, my ability to communicate, but then more importantly, playing sports. You know, I truly believe there’s a lot of parallels between playing competitive sports. I wasn’t a professional athlete by any means, but just being on a team, I played soccer, I played basketball, learning how to win, learning how to lose, learning how to build culture and battle. A lot of those same things happen in business.

I totally resonate with that. I think sports is a great learning ground for the resilience that you need for entrepreneurship. And when I was running my own business, I was always perked up if someone came in and said, they had a water polo player, which is a really tough sport. It’s not very popular in the US, but you get pushed down on the water quite a lot and it helps you become resilient. And if I knew someone was successful, I knew that they’re not going to break with the first chance. So that’s pretty awesome. So your company, Quest Education, and basically helping people figure out how they should invest, what they should not be investing, how did this idea for this business come about?

Well, I ended up, when I got into sales at 18 years old, I was in a real estate coaching sales industry. And I did that for a number of years. And because I was talking to a lot of real estate investors in that space, I would hear the term self-directed retirement accounts frequently. I would hear people talk about how they use their retirement account to flip a property. They use their retirement account to purchase a property and rent it out. They’d use the money for private lending.

So I’m thinking, I didn’t know you could use your retirement account for real estate. Like I know your retirement account could invest into REITs, but that’s still a stock. You could use your retirement account to flip a house. So that got the wheels turning for me. And I’ve always been fascinated by finances, by money, the world of retirement accounts. And I hit a point when I was about 24 years old where I felt like I hit my peak in terms of being in sales and selling coaching and I wanted something different.

I wanted a different path and I ended up making a pivot. When I was about 24, 25 years old and I ended up working for a company in the self-directed space and because of people I met along the way and mentors and establishing a network, saving up my money and building good credit. Three years ago, I was able to start Quest Education where our mission is to help people access money in their retirement accounts, penalty and tax-free.

Okay, so I really want to dig into this in a minute, but before we go there, the theme of this podcast is about management blueprints, and I’d like to explore this a little bit. So management blueprints are business frameworks that you can use to simplify creating viable company, viable, it says, also you can call it viable, something that is sustainable, that is over time becomes self-managing so people can run it for you, which is consistently growing profitable and adequately profitable. And, you know, some of these systems are, you know, scaling up, e-myth, traction, EOS, Great Game of Business, four disciplines and others. Have you used any of these frameworks? And if so, what has been your experience?

So I’ve been around a lot of sales companies where it’s very loose. They just relied on raw talent. They just relied on getting leads and relying on talent. And talent can only get you so far, right? Just winging it can only get you so far. So as I got older and eventually started my own business, I wanted to focus more on some things that I was not personally focusing on and they were not my strengths, which were processes, systems, efficiency, things like that. So I joined a mastermind group and through this mastermind group, they kept mentioning EOS and traction and Gino Wickman. And so I ended up reading Gino Wickman’s traction book and then Rocket Fuel.

And then I took some of those principles from traction in terms of our Monday leadership meeting with our executives, quarterly rocks, having a big 10 year, big, hairy, audacious goal as far as where we want to go, our one year picture, our three year picture. And I think the main thing that helps you is just making sure that people are rowing the boat at the same time, making sure that there’s transparency and making sure that the mission is just super, super ultra clear and people can actually see where it’s going and you can pinpoint the places within the business that are struggling and try to find some solutions, so people can all come together.

That’s awesome. So how long have you been implementing EOS and what have been the results for you?

So, I would say about two years. The first year we just winged it. We were able to do seven figures just winging it because you’re a creature of habit, right? When I was an employee working at these other companies and then I started my own business, I felt, okay, I’ll just do what worked for me, right? Which is just relying on talent. And again, that can all get you so far. And I knew that there was gonna be a better way of doing it. So two years ago, we started implementing traction.

And of course, there are some growing pains in terms of, you know, like, OK, why are we changing? You know, what we’ve done has worked. However, being able to implement some of these traction methods as far as just, you know, having not pointless meetings, but just really making sure that people are on the same page, how I feel like it really helped was when we hit some tough times. You know, we hit, what stands out to me is two tough times where COVID was one of them.

You know, we had to go from working, you know, there’s 14 employees that I’ve got. We used to see each other every day at the office. We used to fist bump each other and say hi and just have that camaraderie and see each other. And then all of a sudden we’re working from home and we’ve never done that before. So that was really tough. So I actually believe if we did not implement some of the traction methods, that it would have, there would have been a different result.

And then we lost a lot of affiliates, a lot of referral partners, you know, because a lot of the people we did business with during COVID, you know, they were negatively impacted. So, you know, we got hit a few different ways. So if you can have a really strong foundation and good processes and systems and accountability, when those rough seas hit your boat, you’re going to be in a better position to sustain that adversity.

Okay, that’s really cool. So let’s dig into these ideas that Quest Education is promoting. The first one, let’s talk about the self-directed plan. So what does it mean, a self-directed plan, and why are these important?

Self-directed just means you get to control your own money, Steve. So they’re important because people have been conditioned to think that the money in their IRA or their 401k can only be invested in Tesla stock. It can only be invested in a mutual fund. It can only be invested in Wall Street. And that is not true. Self-directed means that you have the ability to invest your money pretty much wherever you want.

Self-directed means that you have the ability to invest your money pretty much wherever you want. Click To Tweet

So if you wanna have your retirement account own a piece of property and flip it or own a piece of property and rent it out, you could do that. You want to use your retirement account to invest directly into Bitcoin, you could do that. If you want your retirement account to own precious metals, you could do that. Maybe you want to be like the bank and do some private lending, some promissory notes, you could do that too in a self-directed retirement account. So it gives people a lot of control, a lot more creativity within their own money.

Ok, so give me some examples. How does that work? You mentioned on your web page and LinkedIn page that people can actually use their 401k to actually fund their business. You also talked about just mentioned it earlier that people can flip houses using 401ks or IRAs. So how does someone do that?

So the popular self-directed plan that we help people with is called the Solo 401k. So if you’re going to get one thing, you know, out of this podcast, whoever’s listening right now, write down Solo 401k. If you’re an entrepreneur, if you have no W2 employees, the IRS says you can open up a Solo 401k. And hands down, this retirement account vehicle is one of the best on the planet. And one of the main things that makes it unique is it has a loan feature, where you actually can take money out, penalty and tax free, a certain amount. I’ll give you an example.

If you're an entrepreneur, if you have no W2 employees, the IRS says you can open up a Solo 401k. And hands down, this retirement account vehicle is one of the best on the planet. Click To Tweet

We’ve got a client, she was working a nine to five. She really wanted to get out of corporate. She wanted to start her own online business. And she needed some capital for inventory to launch that business. And she wanted to access about $20,000. She didn’t want to put it on a credit card. She didn’t want to get a loan from the bank. She wanted to use her retirement account. So she went to her financial advisor, told him, hey, I want to take 20 grand out. Can you help me? And he’s just like, yeah, but you’re going to pay 30, 40% in penalties and taxes if you do that.

And she’s like, there’s no other way. And he’s like, nope. So we helped her take the money she had in her retirement account, moved it over to a solo 401k. Then she took $20,000 out, penalty and tax free, used that money to buy a product, launched her business, and now today she no longer is working that nine to five job. She’s working solely from home with her Amazon business, her eBay business. So, you know, that’s one way. Another thing I see happen a lot, Steve, is I see people losing money faster than they’re making money.

And what I mean by that is they owe credit card debt and they’re paying 20% interest. And then they’ve got the retirement account that’s making let’s just say 8% a year. If they’re losing 20% and making 8% I know you’re a smart guy, Steve. I mean you’re losing money fast and you’re making money. You’re bleeding, right? So what people also can do is they can take money from the retirement account, penalty and tax-free, pay off that high interest rate credit card debt and then they’re actually able to replenish the money they took out from the retirement account to pay off the debt, they’re putting it back inside the retirement account.

So they’re not robbing from their future, but more importantly, they’re paying off that nasty 20% interest rate credit card debt. Their credit score goes up, they’re sleeping a lot better at night. So we take great pride in what we do, Steve, in terms of like, we’re not here to shove product down people’s throat and sell them insurance, sell them real estate, sell them stocks. We’re here to solve problems and people come to us at different points in their quest. Maybe they need help with credit card debt. Maybe they need funding for their business. Maybe they are leery of the stock market and inflation and they like the idea of investing outside the stock market. So it really just comes down to how we can conserve and help this individual.

That’s very fascinating. And it got the views turning in my head. So what are the options? Obviously, I mean, I always thought that as a business owner, as an entrepreneur, the best place to put my money is my own business because I have the most control over it and I can leverage it and create much bigger growth than I could do in the stock market. But what do you see? What other options people use? You talk about the Wall Street trap. What is the Wall Street trap and Wall Street traps and how do you avoid falling into them?

I mean, that’s where knowledge comes in. You know, back to the story I told about my client that needed 20,000 from a retirement account. She went to her financial advisor to take it out to fund her business and the advisor wasn’t able to give her a solution. And that’s just because how Wall Street is set up. Follow the numbers, follow the math. They make money based off of assets under management, right? They’re making one or 2% off of trillions of dollars. So the more money that’s in these accounts, the more money they’re generating.

So why would they teach you how to access your money penalty and tax free to fund your business? Why would they teach you how to use your retirement account to pay off your debt or how to use your retirement account to invest into real estate? It goes against their business model. So that’s the trap that they’ve got you in. And unless you know, otherwise, you’re just going to be doing the same thing you’ve always been doing. Right. So what I see a lot of Steve is I see a lot of people doing investments where they have a little bit more control, like you mentioned, but they’ll use some of the money to invest in their own business. They feel a little bit more confident and more control there.

I also see some alternative investments where they’re using the money to maybe invest in a private equity. You know, maybe they know somebody that owns this solar company or owns this other company over here that has nothing to do with Wall Street. It’s not publicly traded. And they’re able to scoop up some shares and invest into this company that’s on the ground floor. Obviously every investment is going to have some risk. But then I see people use their retirement account to invest into precious metals.

I had a client that bought a bunch of Bitcoin with their retirement account last year and he’s up big in his retirement account. Even with Bitcoin dropping down, I mean, he bought last year, so he’s sitting pretty. I also see a lot of people do investments in the private lending world, promissory notes, where they find different deals that need money and they use their retirement account to lend their money on this real estate project, for example, and their money is being used to develop this apartment complex, for example, and their money is going to be tied up for a couple of years, maybe a year, maybe two years.

And while they’re waiting to get their money back, they’re making a return on their money. Maybe they’re making 10% a year. And I’m just using arbitrary numbers. I’m not here to sell investments, but I mean, there’s deals all over. I mean, I think everyone can know the name, Grant Cardone. Grant Cardone has a huge real estate fund. If you had a self-directed retirement account, you could use the money in there to invest into his syndication fund, where you can invest alongside of him. You can’t do that with your IRA that you have at Fidelity, but you can with a self-directed account.

That’s fascinating. So what are some of the programs that Quest Education provides to people who want to learn about how to do that, how to use their retirement accounts to invest in their own business tax free or invest in properties or solar, this kind of stuff. What kind of programs do you offer?

So our ideal client has a 401k from an old job or an IRA and that account is worth at least $30,000 or more. And a big reason why is the solo 401k is the most popular plan. It’s superior to the IRA. For example, you can contribute new money into a solo 401k. Depending on the income that your business makes, you can contribute up to $58,000 per year. And you can even make those contributions under Roth contributions where that money would grow tax free and stay tax-free.

So, I mean, Steve, imagine someone putting in $50,000 a year into a Roth Solo 401k. They did that for five years. Now they’ve got a quarter million dollars and over a period of time, that thing can grow to over a million dollars and that’s 100% tax-free. An IRA, for example, you can only contribute $6,000 per year. So we do work with some people on the IRA accounts, those are usually only for individuals, W-2 employees. They have no entrepreneurship going on. They have no side hustles.

So if you’re someone that has an existing retirement account and this is something that appeals to you, you always could head over to danielblue.me. You can head over to my company’s website, Quest Education, and talk to one of my reps. And they would be there to walk you through the process. Maybe you don’t have $30,000 or more in existing retirement account, but what you’re hearing intrigues you and you want to learn more about it.

I do have a course, it’s called The Quest Way, How to Make Money Tax-Free. If people head over to danielblue.me, they’ll see a link to the course. And I break down the nitty gritty, some of these concepts that you and I are talking about on the surface, but I share a lot more in the course and helping people understand what’s possible and some action items that they can take on their end. So, you know, that’s always a good place to start with the digital course too.

And that sounds like a great opportunity. So what about the future? Where are you planning to take Quest Education? What is your vision of your five to 10 years out? What kind of company are you going to be?

So right now we’ve got about 1,000 customers in all 50 states. Everything that we do is over the phone. We have the ability to, over a series of phone calls, help people understand where they’re at today, identifying some problems, some solutions, and then painting the picture of the possibilities and educating them. So we can do that over the phone. We pull back the curtain and give them the game for free, essentially. And after speaking with us, if they want to do business with us, obviously, you know, I’m not a nonprofit.

I’ve got staff and I’m here to make money too, so I can continue to invest in my team and develop my employees. So there is a fee to work with us, but our model is unique in terms of we give the education up front. And then if people want to work with us, great. If not, that’s okay too. But to go back to your question, a thousand clients off 50 States right now in 10 years. I want to be able to get to the point where we got, you know, 10, 20,000 customers.

And that’s extremely, that’s possible because so many people are not aware of a self-directed plan, solo 401ks. They don’t know how it works. So it’s just a matter of getting our marketing strategy nailed down, getting people to know more about us. Obviously, if we’re going to 10X, 20X the amount of customers that we have, I’m going to need a lot more employees than 14 employees. And that’s my purpose in terms of, and this goes back to the sports team. I was never the superstar on the team, Steve.

I didn’t score the most goals on the games, but I love to give assists. I love to make defensive plays. I love to just make those tackles and just things that don’t show up on the stats to help the team. And I think that carried over to today with me being the owner of Quest Education. Like I wanna see my employees buy houses. I wanna see them start families. I wanna see them have a bunch of money in a retirement account to invest. And for us to do that, we have to continue to serve and provide a superior service to our customers and have a great experience and then have, you know, awesome employees to keep on our mission.

So that’s, I love that. And how do you actually, beyond the education piece, how do you help people be successful? Do you help them find investment opportunities? Do you manage some of these non-Volstead type investment opportunities like private equity funds or, you know, real estate opportunities, what can you offer people? Or is it not in the purview of Quest Education?

Yeah, by intention we’re designed, we’re not financial advisors, we’re not here to sell investments, we’re purely an education company, so we help people set up the accounts, but we do have an amazing network of financial companies that we refer our clients to, our customers to, when the time arises. So, for example, you know, we’ve got customers, we had a customer not too long ago, they need help with an estate plan. We’ve got an attorney out in Ohio that we work with that does wills, trusts, estates. Maybe a customer needs help getting funding for their business, maybe an SBA loan or a line of credit.

We’ve got a referral partner in the funding space, CPAs, accounting, tax services. We don’t do that, but we’ve got a trusted referral partner that can help in that arena. Different investment companies, obviously we don’t sell investments, but you know, if somebody wants to hear some other options to invest their money, we’ve got a couple different third-party investment companies that we can refer our customers to. So we do take great pride in terms of, okay, how can we solve different problems within their situation going back to what I talked to you about earlier. So we’ve got a great network to help people and pretty much every financial capacity.

Ok, that’s it sounds like this is a great resource. So if you’re out there and looking for a way to tax efficiently, invest in your own business or in other opportunities and you want to be self-directed, you don’t want some vast manager or asset manager in a Wall Street office making decisions for you and churn your stock in a way that perhaps you don’t intend to and get the, you know, whatever, three, 5% return per annum, but you want something more exciting, maybe something that you understand more deeply and you can make decisions on your own, then definitely check out Daniel’s program.

and definitely check out Daniel’s program. So, Daniel, please repeat where they can find out and sign up for your course, and also where any other information that they can get, maybe before signing up on the course, do you have some white papers or, I don’t know, blogs that they can check out? Would you mind sharing these as well?

Yeah, if they go to danielblue.me, that’s the hub that has all my articles that I wrote for Forbes, It got the link to my podcast, How Winners Win. I drop a podcast every week. I talk about financial literacy. I talk about entrepreneurship, just being able to help people win in their personal, financial, their business life. That’s why we came up with the name How Winners Win. So go check that out. And it’s got a link to the course, the Quest way, how to make your money tax free.

And then it’s got a link to my company that I’ve been talking to you about Steve Quest education and so it’s got that link to that company and then it’s also has a link to my book I’ve got a book coming out in August it’s called blueprint to your best retirement it talks about the solo 401k talks about the self-directed account a retirement account world so that drops this August so that’ll be a good way for people to dig a little bit deeper in this stuff. So if you’re looking for some free information, checking out my articles on Forbes are a good place to start.

Subscribe to the podcast as well. And then maybe if you don’t have an account set up just yet, but you want to learn, the course is a great way to get started. And then if you have an existing retirement account, and maybe you’d like to explore a better way to utilize that account, then head over to Quest Education, which has the link on danielblue.me. So then that way, one of my reps can speak with you. And we’re not here to give you a sales pitch over the phone and try to one call close you. It’ll take a few phone calls for us to see exactly where you’re at and be able to best help you.

Okay, so definitely check out danielblue.me, the book, the podcast, How Business Is Made. I love that title. I’m gonna check it out myself. To learn more about how you can be more in charge of your own future. Daniel, thanks so much for coming on the show. And to our listeners, please stay tuned. We’ll have another one next year, another exciting entrepreneur coming on the show. And if you enjoy the show, please think of us and rate and review the podcast on iTunes, Apple Podcasts or go over to YouTube and rate us there. That would be great. And we’ll see you next week.

 

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