David Richter Reveals His Secret to His Profit First Success

Kevin Harrington
Hi, I’m Kevin Harrington, an original shark from the hit television show Shark Tank and you’re listening to the underdog podcast.

Pamela Bardhi
Hello, everyone, and welcome to another episode of underdog. Today I have an incredible guest here with me, Dave, how are you, my friend?

David Richter
I’m doing well. Thank you so much for having me on here today. Pamela, I’m really excited to be here.

Pamela Bardhi
David Richter, you are an absolute Rockstar. Seriously, I met you in family mastermind. And I was just blown away by you and like just the work that you do. I’m like, I can’t wait to get into your story. Honestly, it’s just amazing. The work that you do now. And I just can’t wait to hear all about how you got there. So if I may, the burning question. What inspired you on your journey to where you are today, my friend,

David Richter
Rich Dad, Poor Dad was the first domino read that in college. And that’s what kind of changed the mindset from Oh, I don’t just have to go to school and get a job and you know, do all that stuff. That’s where I got hooked up into the real estate world was in there for about seven, eight years. First five years, I worked with a company where we were doing like five deals a month grew to about 25 deals like what you see on HGTV. Like fixing and flipping, we were doing some wholesale deals too. And you know, that was a lot of fun. Got a lot of experience there. But one of the last seats I sat in at that company was the finance seat.

Once I dove into the numbers, it’s like, yeah, it sounds cool to do 25 deals a month. But it’s not cool to spend 26 deals a month. So it was like that was one of the things that were another catalyst to what I’m doing today. That I’d go to these other masterminds and these other events. And other people that were moving and shaking in the real estate entrepreneur world. And they were like, Yeah, we’re doing a bunch of deals. But then behind the scenes or at the bar, they’re crying, like I’m losing money.

So I saw this as just a huge opportunity to say like, Hey, we got to make sure that you’re not just making money that you’re keeping it to. That’s where there were a lot of other things that happened in my life. But I moved across the country started helping another investor. One of the first things I did was like, show me your numbers, because like, you could tell me anything, but I need to see your books. And like, that’ll tell me the real story of your company. And it was a mess, just like most people. I mean, it’s just very typical for the entrepreneur to put that on backburner and that’s the last thing to get done.

You know, that’s where we went and cleaned it up. Got it to where he knew, what am I making? What am I spending, like, Where’s all my money, he had a small portfolio? So he was super underleveraged, meaning he had a lot of equity. There was a lot of money tied up in his properties versus what he took in loans. So that was another big eye-opener for him to where we were able to refinance a bunch of his properties puts money in his pocket. And that was when he told me like, Hey, I know exactly what I’m making. Now I know what I’m spending and I was able to pull some cash out because of this whole process.

This has been life-changing. That was the true catalyst for what I’m doing now today, of simple CFO and helping people know their story, through those numbers. And putting people on the team to actually help get them to that point of I am in control of the money in the cash in my business. So that’s where the whole journey came from at a very, super high level without diving deep into any of the stories behind the scenes. But that was kind of the several catalysts that got me from just going to college and just being another. You know, bump on a log there, thinking that I’m just going to go get a job. And just write out my days at 40 years at someplace to where I am today and owning my business and helping people there.

Pamela Bardhi
I love that. David, thank you so much for sharing that. This is your rock, story. I love that. But I want to reel it back just a little bit before we dive into VFO which is so amazing. Because I’m one of those people I really screwed up in my finances early on when I was flipping and stuff. Like yeah, you can make a million you also can spend 1,000,002 At the same time you make nothing at the end of the day.

And you look at your numbers and you’re just kind of like gouging your eyes out. So I feel right like most of your guys that are like what else going on here? But I would love to know what was somebody that was a special person in your life growing up or a teacher or mentor or anything. I would just love to pull it back a little bit kind of to your upbringing.

David Richter
I was very blessed with the upbringing I had my first and still best friends. I’m really good friends, my parents so I know even growing older, how unusual that is. To have that type of support and still have it years later. So they were definitely a big catalyst for me. Then also I had some good mentors growing up, people who taught me the value of hard work. I remember working at a place during the summer kind of like a high-rise building in downtown Chicago. And there was a guy there Clyde Connor, who you know, he was getting up there and age but he like he would run circles around everyone. He was just the hardest worker. And I’m like, Oh man, it was just something that I gleaned from him.

So, there are people like that all throughout my life. I’ve had good mentors in business, good mentors on the personal side. And that’s one thing that I’ve definitely been blessed with my whole life is just a lot of good people that have poured into me. I felt like in the real estate world, too. Like, when I first started, I was really young like 2021. And there were good people in my life there, too. It was the books I was reading and the people I was getting around.

So I’ve had a lot of good people pour into me and kind of what I’m doing now today. I’m like, I want to pour back into the people that have poured into me. But yeah, I would say my parents, Clyde, there isJoe McCall. There’s a bunch of people just in my life that helped me through some of the darkest times so there were some things that have happened. Like, even though I have nothing to complain about. There’s always stuff that happened. And there were some people that got me through some difficult times growing up. So a lot of good people that I’ve been privileged to call friends.

Pamela Bardhi
That’s amazing. David, thank you so much for sharing that. And what did you want to actually be when you grew up? Like, what was your dream?

David Richter
So I went to school for teaching, and I thought for a long time, I would be just a teacher at a school or something like that. So I’m teaching in a much different way now, like even on this podcast, so I still have that heart for teaching. But that’s what I thought I would do. I thought I’d be a teacher.

Pamela Bardhi
That’s amazing. You know, what’s really cool is when you look at when you were once a kid. And you look at what you’re doing now and how it connects in some odd way. And you’re just like, wow, it might look a little different than you imagined as a kid. But you’re here and you kind of reflect back and you’re like, Wow, all of the things. Yeah, all of them. You mentioned mentors in your life and people that have helped you throughout those dark times. I mean, that’s, that’s the whole reason why I started this podcast because so many people poured into me.

And a lot of what people were seeing in my world was all the successes and all the things. But what they didn’t realize was all the dark times that I too, went through that other people helped me navigate through. Like my mentors, coaches, friends, and peers, and all of that, and how instrumental that was. Because sometimes they would people look at us, and they’re like, Oh, they’re highly successful. Like, there’s no way that they’ve been through this or any type of failure in their business. While we all know that that’s totally not true, they would be treated like life and business in general. What were some of the challenges that you went through either personal or business? That you kind of were helped through, navigated through it. Any advice that you would give anyone else who’s kind of going through it,

David Richter
So some of it was being able to see other people’s mistakes as well, too. I feel like I’ve always kind of had that just in the back of my mind. Even growing up watching movies. It was like, I don’t want to be like that guy. Like, if he was a dad, or if it was like, a teacher or whatever. It’s like, there’s a bad example of what I don’t want to do. So I felt like, I would glean things from there. Then when I was in business. And, coming up through the ranks in the real estate world. Like working with that company, there were like a lot of cool things that we did.

But then there were some things it’s like, why are we doing this role? Like, why did we make that decision, and that was a lot of as well to like, good experience. Being able to see someone else go through that, and then being able to say, like, Okay, I don’t want to do that in the future. Like, let me write this down, or like x this into my brain. Which helped me when I started my own business to be like. I don’t want to make the same decision, as I saw back then, let me make a different decision today. And not that those people were bad or made awful decisions all the time. It was just like, that’s a different like, I saw how it affected people or I saw this or that. And I want to do it differently.

So I feel like experience has been a really good teacher that I’ve had some specific mentors get me through some specific things. Like when I first started my business, like having those people to reach out to even see is this a good idea? You know, like, I’m leaving the safety, security, even though I had rentals and I had stuff like that. I wanted to start my own business that was different than even in the real estate world, it was helping real estate investors. So reaching out at that time, too, because that was definitely a part where it’s like, oh, man, never done this before.

I feel like I’ve got the bug on the edge, and that I’ve got something that will really help people. So I got on the phone then because I was nervous, as all get out and was like, Is this a good idea? What do you think? Then I had people say, Yes, like that they believed in me and that they believed, that there was a market for what I was doing. And just being able to talk that through with people at that time. When it was a little bit dark than was like, should I go out on my own? Should I actually do this also the guy was working with not the very first company?

But the second one that I was working with where I had mentioned. He was able to pull the money out and all that I really liked him a lot too. And he had just come to me and said you’re going to get a raise. And all this stuff and like it’s starting this day, and I told him instead of a raise, can I like take zero. I want to start my own thing you know, like here and he’s like, oh, man. So that was another mentor too because he also said, You know, I would love to build this with you but if that I see where you’re going you know that’s a really good thing. Could I be your first client so that was also a big shot in the arm as well to have like, okay, good? I did right by him.

So there were definitely some things like that throughout my life where mentors came in at a very key time. Being able to talk about that to talk about the struggles that you’re going through, like what I’m actually feeling like, is this normal? Like, did you ever feel this way when it’s so great? Because right now I’m mentoring a young guy who’s in almost the exact same position I was that many years ago. Like seven or eight years ago he’s with a company. He’s the CEO, you know, like in that position, and just feeling a lot of those things. And I’m like, boom, I’ve been there. Like, I can transfer my direct experience now. And like, I love that type of stuff.

So now I see on the other side, going through some of these things where it was difficult. It was difficult sometimes, like, working for someone else, knowing that I had this itch inside of me to like, help more people. But I didn’t have it at that point yet to say like, this is what I want to start. So it’s like going through those times to just being able to talk with the people in your life to say, is this normal? Is this okay? Like, should I start this? Should I not? Am I making a decision? Because I just feel like I’m forcing it or because it’s actually time to make it. Lots of good things from a lot of good people have poured into me, like I said,

Pamela Bardhi
I love that, David. Oh, my goodness. I mean, that’s the hardest part is like, how do you decide? How do you get over analysis paralysis? Have you? Well every entrepreneur, I feel like faces this at some point in time. And it’s so difficult, where you’re like, I know this is needed. But if this was wishful thinking, is this what the market is telling me? Is this what you know, like, how did you finally say, Okay, that’s it, boom,

David Richter
One of the big things was that first client the guy that I worked with kind of saying, Yeah, I want the service, I want to pay this. I want to pay this for it, then it was also going to my network into those mentors and saying, Hey, do you think this is a good idea? And then giving me that feedback, and also saying, hey, I’ll connect you to a few people right away too and you can tell them what you’re doing. So that was another huge shot in the arm for me as well. Because it wasn’t just that they were saying that this is a good idea. They were saying it’s a good idea. And I have people that I think would benefit from it from your involvement with them.

So that was another huge shot in the arm. Then another thing was, that it was a decision that I made at a time in my life when I wasn’t on fire or panicking or like had to make this decision. So that was also another key piece that I can look back on now and say, I think that was another good reason I made it. Because this was from my values, my purpose, my drive, versus just something going wrong. Because a lot of people make decisions when their decision-maker is broken. And I felt like at that time, my decision-maker was okay. And I’m going through the proper steps.

I didn’t just start it on a whim, I had the proper channels and people in my life to be able to talk to you, I thought it out. But then I pulled the trigger, then it was like, Okay, this is going to be the start date. This is when I’m ending it with this other guy. This is when you know, like when I’m going to actually go start traveling. And the other thing I tell people, too, is because so many people want to just jump in, like the guy that I was talking about today. When I was mentoring. He was like, I feel like I should be further along. And I’m like, Man, I didn’t start my business until I was like five years older than where you are.

Now. I said what you’re getting right now is good experience from other people. You’re testing the market in different ways. You’re seeing how an owner is handling the business, what do you want to do? What do you not want to do? And that’s what I got as well, too. So I feel like I was building the business for eight years before I started it. Because it was also serving the same people that I was. I was a real estate investor, I had done fixing flips myself, I had done rental property. So I knew how they thought I knew their language. I knew the way that I could help them and speak entrepreneurs and real estate investors. That was another big part of it too.

Because I run to the CFO, I don’t have an accounting background, I don’t have a CPA license, like I have nothing like that. But I know what they need. And that’s why we have the team that we do that has all those credentials behind their name. But that’s why I knew that I could speak to the person. So that’s another thing to do you know who you’re going to be, who your clients are going to be. Because everyone wants to serve everyone when you’re at the very beginning. You’re going to have to take clients that you don’t necessarily wouldn’t take on. Maybe years down the road, but you’re going to be able to niche down.

That’s one thing too, that helped me knew who I was going to serve. And I knew at least the niche, the real estate investing niche. Even though that’s a huge niche, it’s like I still knew the people and the product and like what mattered to them. So that was another big thing as well, too. And real estate investors have masterminds meetups. So if you’re going to be serving an audience, it’s awesome to serve an audience that already congregates in different places as well, too.

So that was another thought process when I started. Like, I’m not going to have to just fish one at a time. I could go out there and speak if I have a message. And I feel like I am out there to give I can give it to multiple people too. So those were some of the things when I wanted to jump ship. Like that, I thought about and said okay, now’s the time. I’m going to pull the trigger. I’ve got some good connections. I’m going to speak at a couple of these places like I’m going to line some of that offer up and then run from there.

Pamela Bardhi
I absolutely love what you have started in your business, I think it’s amazing to have that niche and to really focus on that and hone in on that. As an entrepreneur, your mind is to keep generating and generating and generating. And it’s kind of like, sometimes the entrepreneur is the visionary. Then there’s no integrator yet, right, like it takes a while to find that integrator. And for anyone who’s listening, that doesn’t really know what that means. It means that essentially, the visionary is going to keep pushing, pushing, pushing be the face of the business be the brand, and the business.

And then the next element to that is obviously having the integrator who’s actually going to do the daily tasks. And like the operations and all that stuff and kind of crank out and make sure that the business is generating revenue. That it’s not superseding the expenses that there’s enough to go around. So I just love that you focused on that part of it. Because I think that that’s something that I know, I overlooked in my entrepreneurial experience. Because I was so driven to just keep doing more deals, more deals, and then all of a sudden, my liquidity was crap. I was like, what happened? It’s because I took too much on and I was not properly budgeting.

And then all of a sudden, you get to this space, and you’re like, Oh, oops, What do I do? What do I do here? Especially real estate investors, because we get crazy ambitious. We’re like, Oh, my God, we got this deal. We gotta rock we gotta roll we got, you know. So I would love to hear kind of how I mean, we kind of got a glimpse at how you started it. Now how it’s growing and how that need is being fulfilled many times over, especially in the real estate space. This is really some tips for real estate investors, for sure, on the financial side, and then just entrepreneurs in general. Because I know that there’s a lot of startup entrepreneurs listening, established businesses listening. And just different recommendations you would have based on kind of as an entrepreneur.

David Richter
So one of the other big reasons I started the business was one of the mentors when I said, Hey, I’m starting this, they said, read the book profit first. I did I read that book that night took like 10 pages of notes. So this is a great framework to explain cash to the entrepreneur to explain how cash works in their business because cash is different than profit. Cash is different than expenses than income like cash is a different beast. It’s like in its own category. That’s where I said hold on man. This is such a great way the way that he presents it is really good and then speaks to entrepreneur.

And not to bookkeeper you know CPA numbers person. It speaks to the entrepreneur so that’s what really got me started on how I can help real estate investors or just entrepreneurs in general. Because the principles of Profit First transcend business and personal finances. Because the formula for profit first says sales the one that we hear that gets us trapped in the rat race is sales minus expenses equals profit. Meaning I make a sale or I get income in my personal life I pay all my bills or I pay all my vendors or I pay everything else. And then hopefully I have something left over from me.

Hopefully at the end of the day or the end of the year or when I sell my business or like when I’m retired or whenever. It’s like that is someday off in the future for most people. And that’s why people just keep spinning their wheels and keep going on the hamster wheel and in the rat race. And so Profit First the mindset in the formula is sales minus profit equals expenses. I make a sale or I get income in then I take the profit that I want first off the table. Then that the expenses are what’s left over to run the business or run my lifestyle run my ally you know, run those different types of things.

That’s where I wanted to get that message out to people. It’s the same thing as Stephen Covey and the seven habits book and stuff like put first things first that’s really what it’s about. This is about your money and how to do it with your money but you could do this with your time like filling in the most important things first. It’s this concept transcends all that but it’s also a habit that you can build the reason I loved Profit First too. And the whole concept was that it wasn’t just rich dad poor dad telling me pay yourself first. Or the richest man in Babylon a portion of all you have is yours to keep. It gave me practical steps to create the habit of profit versus well to have like, here’s some practical things you could do.

So one of the biggest mistakes I see entrepreneurs make on the financial side is having one big bank account. Where all money goes in all money goes out and it’s just like do I have money in there? Okay, well then I’m just tossing that cashed out. Like I’m just always putting the money out and just always up in the air. If I have money good marketing good. We’ll spend it over there a higher good we have money in there oh shoot. We don’t have money in there I better go to a private lender and get some you know money in my bank account. So it’s like that’s how most entrepreneurs make their decisions by looking at their bank account. And that’s Another thing about Profit First.

It’s like lead to leverage that then let’s leverage your bank accounts and how you look at them to make sure you have some clarity. Because that one account gives you no control. You don’t know what’s yours, what’s the IRS is what you know, like to pay people. If you’re a real estate investor, what’s for the projects on your properties? Like there’s so many things if you get into business that just your money can go 15 different ways. So that’s why the practical steps are something that we teach to is making sure you set up like the envelope system.

So is why I love it because this is personal finance or business finance, you could do this in either one. But set up like the envelope method, which if you’ve heard Dave Ramsey talks about that a lot. This is a concept that’s been around for a very long time. But probably first modernize it to say instead of envelopes now use bank accounts. Set up specific bank accounts for you, that will make you successful. And that will point you in the direction of what is important to you. And I call the three bank accounts like in business, there’s three that I suggest that you open right away.

I call them the Golden Trio in my book profit versus real estate investing. Because I get it even though I’m not an accountant, bookkeeper, I get that I look like that. I’m the type of person that numbers so I love the Harry Potter star wars. Like all that stuff. I’m into all the Geekdom fandom stuff. And you know, they always have three main heroes. Luke and Leia always pushing the story forward for good? Well, your personal life or your business needs those three main heroes for you. Pushing your story forward for good, making sure you win in the end and not just I hope I do. I hope I have some money left over. I hope when I retire or hope you know when I sell the business, it’s all worth it. It’s making sure that you’re winning along the way, too.

So what are those three accounts’ profit owners pay and owners’ tax? Those are the three accounts to set up in a business that is all for the owner’s benefit. To make sure the owner is actually paying himself on a concert or herself on a consistent basis from the owner’s comp bucket. The profit is like icing on the cake. Like, why did you start this business, I want to make sure that you’re actually getting a return from it. And then the owners tax making sure when tax time comes, you’re able to pay it and not have to worry about it. So those are the three main accounts. That’s where setting up those three accounts will help you as an entrepreneur.

Then on the personal finance side, if you’re like, hey, I haven’t started my business. One of the accounts I would set up differently from like, where you get your bills paid from or your income. Set up a freedom account, set up an account, call it freedom. And say this is either freedom from my current job. Or like I want to go on vacation to this place or like set an account that’s different. That’s for your values and what matters to you, you’re family. Like what matters to who you are as a human being.
So I would set that up on the personal side too. If you haven’t jumped into the real estate world or into the entrepreneur world set up that freedom account. That could be the way you buy your way out of the rat race as well, too. So that’s just something to think about. But there’s some practical steps on how you can be helped as a business owner. Or even in your personal finances to kind of get you out of the rat race and into a better light.

Pamela Bardhi
That’s amazing. David, thanks so much for sharing that. I mean, it just, it’s insane to see these thoughts seem so simple. But then the actual execution of them is really nowhere close to that. Because we don’t think of other stuff. We’re like, we want to crank out, we want to make it possible. We want to do this and we want and then it’s like, whoa, whoa, whoa, whoa, whoa, slow your roll. Like, where’s this going? where’s that going? Do you have enough cash to last you the next six months, 12 months, like you said, make sure you have enough set aside for taxes?

And just like we get superly ambitious of money, big time. And like entrepreneurs like me like I was always like, Oh, we’re gonna make more. We’re going to make more we’re going to, you know, we’re just going to keep cranking out keep bringing out keep buying properties. It’s like, and then timelines didn’t fall through the way that I wanted them. So my first couple deals like I was just like, Oh, my God, you know, cash really is king. Yeah, really, is the key to sustaining any business. This is one of the reasons why most small businesses fail within the first how many years, David, the stats on

David Richter
This 90% fail within 10 years of all businesses, and it’s like 50%, within the first five,

Pamela Bardhi
And they say the number one culprit is because they run out of money out of cash, which is insane to think about. Because it’s like, that tells you like the entrepreneurial mindset of just kind of like pushing their business and believing so much in their brand. But then like, the hard part is how do you take yourself out of the brand? And try to think in the eyes of a consumer. That’s when you need the mentors, you need. Everybody kind of backing that? Was the finance side saying, okay, is this making sense? Are you spending more than you generate?

Are you know, so there’s so many different elements to this. And to any entrepreneur who’s thinking about starting either their own business or in the real estate investment space? What would be your recommendations in terms of a financial thing? Because the number one question I get asked David is. How do you invest in real estate when you don’t have much? Or how do you start your own thing in the beginning? So, any tips that you have on that would be super helpful?

David Richter
Yeah. So real estate is one of the lowest barriers to entry which is like the nice thing and the not nice thing. Because you got like a lot of different types of people that come into the space. You know that from all different backgrounds and all different philosophies and values and everything. So that’s where it can get a little bit dicey because then there’s people out there that aren’t ethical and stuff. But as long as you’re ethical like you can go out there and you can make money in a lot of different ways in real estate. Like, do you want to take down deals with no money down and like with selling on terms and learning that from a good mentor? Or is it like a wholesale deal? Like, do you need that cash generator first, I have no cash?

So let me learn how to wholesale a deal. So there’s definitely multiple ways. That’s why I love real estate too. There’s like 1000 different ways to make money in real estate. That’s why most of the millionaires that are made have real estate and hold real estate of some sort. And that has contributed to their wealth. It’s like, that’s where you have to listen to people like Pam. The people she brings on, or like people in that type of sphere that other people respect. And you might have to say, teach me how to do this. Let me go on YouTube, do they have content, like, let me learn how to talk to a seller? Learning how to negotiate learning how to do that with people.

That’s one huge way to get started, then, as far as the actual financial side goes. If you’re not inclined to the numbers at all, hire a bookkeeper right away. Like, hire someone on that site not handle it. If you are just starting out, it’ll probably be less than 100 bucks a month too. If you find someone that’s just if you’re doing less, you’re doing your first deal, pay them by the hour. Just to put in that first deal for you and like do it very simply. So like, start there, because most people like us work with a lot of people. And most people don’t know, what am I making. What am I spending? What am I keeping, like simple numbers like that? So if you do that, you’ll be way ahead of them, too.

Pamela Bardhi
I love that David knows it seriously. And I mean, the creative financing that you could do in real estate is just unbelievable. And to any entrepreneurs who have businesses right now, especially in the real estate space. What would be some other recommendations that you would say like big things to look at? Or like a myth buster, or like a, like a financial myth-buster that you can bust right now for us, David? Something like that.

David Richter
Our financial, financial mythbuster a lot of people think that business owners have it together when it comes to finances, but they don’t. So you’re in the same boat. As almost all people, a lot of people come to us and they’re embarrassed. Like they’re talking like, my books aren’t up to date. I don’t really know what I’m making or spinning. I’m like, Okay, well join the Club. Like, you’ve just you’ve joined the club of people who have now admitted it. Because most people are out there just floundering. And a lot of people on the outside think, oh, you’re a business owner, you got it together, but you wear so many different hats.

One of the hats of a business owner is that finance person, and that’s the hat. They want the least like they’re throwing it as far away from them as possible. So that’s another one. That’s where it’s like, that’s a key role through marketing and sales, you have to bring the deals in, you have to generate income. Or whatever it might be that you’re selling. But on the opposite side, you have to have the finance portion, so you’re not losing the money. It’s not like putting the money in. And then there’s holes in the bucket of your business. So that’s the other thing too, is making sure that there’s the yin and the yang there that you’ve got the marketing and sales. And then you’ve got the finance to make sure you’re not losing out on money that you’re already making.

Like, don’t do that. That’s another huge one as well, too. I could keep going on. But there’s just a lot of things out there that people think like, Okay, I have to hoard all this money. Or I have to spend every dollar that comes in real estate investors hate lazy money. But I also know that they love having cash when they need it. So it’s like, that’s the dichotomy, too. They’re like, I want to spend, you know, like, I want to invest all the money out there. But then property or rehab doesn’t close on time.

And they’re like, oh, shoot, where am I going to get the cash? So it’s like, in those times, they’re glad when they work with someone like us to make sure they have a reserve. That they can tap into to say, okay, it’s fine. It didn’t close, we’ve got this money here. This is exactly what it’s for, to be able to cover when a property doesn’t close on time. Because properties usually never close on time. You know, like when they say like, 90% of the time, it’s it feels like that it’s always getting pushed back for something. So that just helps you in those situations as well, too.

Pamela Bardhi
Oh, without a doubt, David, I mean, I can tell you that’s happened to me several times. To everyone does go kind of like Oh, and you know, real estate? Yes, you’re absolutely correct. We don’t like losing money. We see it in there. We’re like, hey, this should be making some more money. Can we put it in some sort of life insurance policy or put it in this and that it’s compounding and rocking and rolling? Oh, my goodness. And so for a business owner, what are some other financial tips that you would recommend in terms of them kind of like maximizing what it is that they’re doing?

Because I know like, everyone kind of talks about things like counts with compounding interest in doing this and doing that. And ended up like you being in the nitty gritty of the finances all the time with so many different companies. What would be your best recommendation of like, hey, for any entrepreneur, here’s like a safe thing that’s gonna kind of grow your money over time? Or whatever you’ve seen with the most rate of success,

David Richter
What I’d like to say here is master the fundamentals. Like before you try and get fancy and do the compounding interest. Like I want you to do that stuff. You got into business, not just to have lazy money just sitting around or that so I get that. But we have to master the fundamentals of what are I making. What am I spending, what do I want to keep? Keep putting that as a priority. In my business, there’s so many people we talk to, that either pay themselves next to nothing. Or they’ve never thought about what I really need to bring home. So it’s like really diving into that what will make my spouse happy, you know, like, what will make sure we’re on the same page.
A lot of people don’t talk about that either. We work with a lot of people there and couples and like in business, they’re not on the same page. Because honestly, the entrepreneur is scared to talk about because he doesn’t know or she doesn’t know the numbers of the business. So she, they’re always fearful to talk about it. So I would say master the fundamentals, then there’s obviously stuff that I like, there’s the real estate is a big one. Like, if you’re not in real estate, and you’re in some other type of business, that would be an investment to look into. And Pam has all the connections, we have all the connections in the real estate world.

Like if you need those connections for what you want to do, you’re at the right podcast. The other thing I would say, too, I do like the whole life insurance policy is not as an investment. But as an efficient vehicle to put your money to be able to then lend out also. Once you start building up that nest egg in that reserve account, like in Profit First. If you have a reserve account or for your cash, you might want to convert that to something like a whole life policy. Then it’s just crazy what you can do there compounding interest, even while you have the money out. Like you never touch the money. There’s just a whole lot of benefits to it. I could go on. But those are just a couple of things.

But before you get into any of the craziness, or any of the like, oh, I want to double, triple, quadruple. Let’s master the fundamentals and make sure you’re not losing money. Because most entrepreneurs and business owners, work with real estate investors. Will you sleep, not because they’re losing money, because they don’t know if they’re losing money or not. They don’t even know what’s going on. And that causes them great anxiety and pain. And that’s where it’s like, can you get someone in your life before it gets to that point? So you’re not losing sleep? Because you don’t know what’s happening. So that way you at least know so you can turn the dials in different directions. There you go, master the fundamentals.

Pamela Bardhi
Love that, David, I love that. And I mean, you built your company from the ground up. And really it’s like its own concept of its kind, right, like simple shift. I haven’t really seen anything like it, to be honest, then I think it’s absolutely phenomenal. Now, what would be your biggest tip to an entrepreneur who’s starting up. Or who has a business right now just in general the entrepreneurial space,

David Richter
I mean, I’m very biased. I would say like, implement profit first. So you know what you’re making and spending and how you can direct your cash. You’re going to do it anyway. Or it’s going to be done for you, the money is going to come out, and you’re going to be like Where the heck is all my money? So your money is going to be controlled by something. If you’ve got the one big account, it’s all going to go out and you’re gonna be like, where did it all go? If you have multiple accounts, and you’re directing the flow of your cash, then you can say. How much am I paying myself? Where do I want to spend this money? It’s very clear, what’s mine, what’s other people’s, and what’s for the business? That would be one huge thing.

Because I’ve seen it, we’ve worked with people that have literally jumped into real estate. And it’s like their first deal. They’ve done this and they’ve been like, oh my gosh, this has taken so much pressure off of us to know like I close a deal. This is where I’m putting the money in this account, this profit account. And this is how much percentage to pay myself like that satisfaction, I tell them you have an advantage. The person that’s doing 1000 deals can also do this. But they have bad habits up to this point. They’ve got things in their life like we have to kind of train them and untrain them on some of the things that they’ve learned. Then tell them like, Hey, if you want a business that serves you, this is how you do it.

So no matter where you are on your entrepreneurial journey, you can implement this at any point, the earlier the better, obviously. But if you’re at that 1000 deal, Mark, you can do it too. But now you’re going to be doing it from the 1000 deal, Mark. And like now at your 10,000 deal, you will have had 9000 deals on this system to be able to pour into. So I say I’m definitely biased, but this would be one of the things that I would say set it up cuz you’re going to learn marketing, sales operations. Those are the sexier things to people like systems, how do I automate? Or like, how do I get the marketing, what’s the different channels?

You’re going to get a tonne of that you’re not going to get a tonne on the finance side. This will probably be one of the only conversations that you have or listened to on a podcast like this that talks about it. That’s not just the dry, boring, just typical run-of-the-mill finance stuff. So it’s like if you implement this, you’re going to be taking a big piece. Putting it in place that a lot of other people don’t have or don’t haven’t done. That will give you a head start in business and give you security in a place where a lot of people have insecurity. There you go.

What Would David Older Self Tell His Younger Self

Pamela Bardhi
I love dropping the gems data jumping the job. That’s right. And this is my favorite question. But what would your older self tell your younger self based on what you know? Now it could be business, it could be personal, it could be anything.

David Richter
Don’t worry so much. That’s probably what I would say don’t worry, things work out. If you do what’s right. You can sleep at night. Like if you are always like that. I love the book, The Four Agreements. I didn’t read that until later in life. And one of the Four Agreements that you make with yourself is always Do your best. And if you do, no one can touch you. So that’s how I try to live my life now, like, things are going to happen, bad things are going to happen. You know, clients are going to leave, or houses are going to blow up or like the deal is going to fall apart. Don’t worry about it, don’t make that consume you. If you’re out with your family, be with your family, don’t worry about that.

You know how many times I wasted time, like with my family being on a trip or something. I was looking at my phone or like worried about something, and it’s like, This is dumb. I’m not gonna even be worried about this a year from now. And it’s like, I’m letting it consume me now when I could be playing with my daughter right now. So it’s like, take that. And really, I wish I could have internalized that sooner because now I feel like I’m getting to the point where things happen. I’m gonna roll with it. Now, though like, I don’t want it to ruin the playtime I’m having with my daughter right now. Or if it’s business time, I’m going to dig into it. Like I’ve got the time right now let’s go in, and let’s solve this.

But I’m going to do what’s right, and I’m going to make sure that doesn’t mess up my whole entire day what I’m doing that really matters. Because at the end of my life, I want the most to say I’m glad that David Richter lived my daughter, my wife my family. Like those people, I want my clients, of course, to say that I want the people that I’m affecting to say that. But my family, you know, like these people, my daughter, my flesh and blood, I want her to say dad was there for me. Like dad played with me, Dad was there for first day of school. That’s on my calendar for next Monday, to walk her into school and be there for her first day of kindergarten ever.

Like, I want those to be the things that she remembers. So it’s like, don’t worry about all that other stuff. Especially if you’ve got good team members, if you’ve got a good system, if you’re a good person, don’t worry about that. Worry about what really matters? Am I putting the things that matter on my calendar? Are they happening? am I letting these other things in my life ruin these relationships or ruin these things? Where it’s like, I’m not even going to care about this in six months, or even three months? You know, like, why am I worried about so that would be something I would tell my younger self.

Pamela Bardhi
I love that. David, thank you so much for sharing that. That’s amazing that super inspirational. Absolutely love that. And now for you like what’s up in the next like three to six months? What’s up in your world? Sure.

David Richter
So I mean, we’re keeping growing this business we have we’re working with people all the time, at simple CFO. And what we do mainly is to take off those financial headaches. Like the bookkeeping, the CPA portion, like we implement a dashboard. So you know what I’m making, what I’m spending what I’m keeping like we do a lot of that. And how do we do that we put a financial leader on the team? Someone who’s not going to talk to you like a bookkeeper. Or CPA and like just the language that’s like, what are they talking about? They’re going to talk to you like a normal human being a business owner and say, Where are we headed? Like, let’s make sure your business is pointing that direction. Helping you take all those different things off your plate.

So that’s what we do. So over the next three to six months here, like we’re still pushing, we’re still you know, growing. We’ve got a lot of big deals in the pipeline as well, too, with like different franchises and stuff like that. To be able to help and serve them. But I’m just looking to do this, you know, sell more the books too, because I’m not looking to sell a bunch of copies. But I know for everyone who’s read it, that emails me they say I feel heard in this book. I feel like this person who was going through this rough time, and I want more people to get that message too. Because there’s so many people that think they’re on an island by themselves.
They’ve never, no one’s ever gone through these struggles, or they feel dumb, like, Hey, I am inadequate, like, Hey, I shouldn’t know this. This should be something key for a business owner. Well, it’s not taught to us anywhere. Like, get some of that basic information. So you have at least a core. That’s kind of what we’re working on. I’m getting this message out, got a podcast as well to the profit. First of all, I want to just try to get this message out as much as humanly possible. So people don’t have to be stuck in their rat race. Whether it’s on the personal side or on the, you know, real estate investing entrepreneur side.

Pamela Bardhi
I love that. David, thanks so much for sharing that you got to let everyone know kind of where to find you where to find books, simple CFO, all the things.

David Richter
It’s really complicated. Just kidding. It’s simple, simplecfo.com. If you go there, it’s a one-stop shop. That’s where the book is the podcast, you can book a call there no obligation. We’re just going to see, are the right fit. Or do we have someone in our network that is the right fit for you? Because I care about helping people like what you need. We’ll find that for you on the financial side, especially if you’re in the real estate world. We work with other people too. But that’s kind of our niche that we’re in. So simplecfo.com.

That’s where you can find all the stuff related here. If you want inspiring stories, and you don’t want to read the book. We have the podcast to have a lot of people that have implemented the Profit First system. Either in their personal life or in their businesses. And you know, just the benefits of that. So if you’re like, hey, what he was talking about sounds good, but like I’m not sure if it would help me. There’s a lot of good people there that are saying. How it has helped them and taken a lot of that financial headache and burden off their plate.

Pamela Bardhi
That’s amazing, David, I’m sure everyone’s gonna want to connect with you after they listen to this amazing episode of yours. So thank you so much for being here today for your inspiration for your work. All the things a lot of the things I needed to hear myself to write. So as entrepreneurs sometimes we’re just so far ahead. We’re like, I come back on Earth. Let’s look at these numbers real quick. Oh much for that David, you’re amazing. Thank you. So that’s it for today’s episode of underdog. Catch us next week, always dropping on Thursdays. And remember, if you’re interested in real estate, or want to learn how to create more money and magic in your life. Check out meetwithpamela.com and let’s chat. Sending you so so much love.