April 4, 2024 • 50 mins
On this episode, John demystifies capitalism! He also shares his thoughts on the salary GloRilla was offering her personal assistant and answers a fan question about securing investments.
To learn more about John's Operation Hope initiative, visit: https://operationhope.org/how-we-help/credit-money-management/
See omnystudio.com/listener for privacy information.
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Episode Transcript
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Speaker 1 (00:00):
Welcome the Money in Wealth with John O'Bryant, a production
of the Black Effect Podcast Network and iHeartRadio. Hey, Hey, hey,
this is John Hope Bryant. This is money and wealth,
and this is a trending topic. This is a recording artist,
(00:22):
a rapper is offering in this example, five hundred dollars
a week for a personal assistant. And there was outrage
from I believe millennials, young or just say young people
who value their own talent and skills and intellect. It
(00:44):
was outraged because they said, what is this star doing
paying us broke wages or low wages? She's a star.
How dare her pay us five hundred dollars a week
to be her personal assistant? What is my advice there?
(01:07):
My advice is that you're going to go broke. Now,
my observation is you're going to go broke. First of all,
five hundred dollars a week if you're twenty two years
old and you've not yet stepped into mortgages and car
notes and insurance and all of the obligations that an
adult children and household expenses, marriage, all these expenses that
(01:33):
comes with being further on in your career. If you're
somewhere between eighteen and twenty five years old, is the
perfect job for you, and five hundred dollars a week
is actually very good money, particularly if she pays you
as a ten ninety nine employee versus a W two employee.
Do you know the difference. Ten ninety nine is a
contract employee, right, and a W two employee is an
(01:56):
employee on someone's payroll where they take out.
Speaker 2 (02:01):
And other withholdings.
Speaker 1 (02:02):
I'm gonna break down the different kinds of employment on
another podcast. And even if it was five hundred dollars
a week with withholdings, it's still a great gig. I'll
go one step further. It would be a great gig
in my opinion if she was just paying your travel
expenses and living expenses. Yeah, I said it. I worked
(02:26):
for free, offered to work for free for multimillionaires who
are highly successful because I wanted to be in the room.
I wanted to be in the environment. If somebody can
pay you top dollar, then they want top dollar talent
who's already got.
Speaker 2 (02:40):
All the skills that they need. Why do they need you?
Speaker 1 (02:44):
Just because you value your talent and gifts doesn't mean
somebody else is willing to pay for it. You're a
young person looking to come up. Being in that room,
traveling around the country, maybe around the world, Being on
the right hand of a star in the making. Listen
to how they person negotiating contracts or talking to promoters
and managers and agents. Being introduced as a member of
(03:07):
the crew to leaders and luminaries here and around the
world is priceless. And I would do it for free, Yes,
I said it. I would do it for free, or
I would do it for the least amount that I
could survive on and still move forward. In fact that
I have done exactly that in my life. But to
(03:31):
be before I get to that example, let me just
be very clear. In this example, I think that people
who are crying and screaming and hollering and complaining and
even criticizing this rapper Gorilla, I can't believe I'm saying
this is a name, but you know, hey, whatever works
because she wants to pay five hundred dollars a week.
(03:53):
You're just living in another universe and you live in fantasyland,
and it's not going to last. You need to under
understand how this world really works. When I was coming up,
I had didn't have many jobs. I worked for myself
most of the time, but I worked for a guy
named Harvey Baskin who owns Jeoffrey Restaurant. Jeffrey's Restaurant in
(04:14):
Malibu was still there, and I worked as a bus
boy and then as a waiter, and then as his
personal assistant, making a whopping twenty thousand dollars a year
and having to drive from Compton, California to Malibu. I've
burned up most of my income in gas and car notes.
But the experience I got of being at the right
(04:34):
hand of a guy worked two hundred million dollars calling
today a billionaire was invaluable.
Speaker 2 (04:41):
Right.
Speaker 1 (04:43):
I owed this guy named Davil Mehra a lot of
money because he invested in my dream, and my dream
didn't pay off. I was not a very good businessman.
I was confused. I confused busyness with business back then,
and my offlow seed my inflow. So my overhead became
my downfall. And I started losing money and losing his money,
(05:08):
and he said, you got to go get a job
to pay me back. So I wanted to go work
for a friend of his, making no money, made a commission.
They actually gave me a stipend, which was basically like
an advance on my future earnings. He gave me enough
expense money to cover my car note and rent. Let's
(05:28):
just say back then it was one thousand dollars twelve
hundred dollars a month, and he sponsored me to get
a to take the test for my real estate license
so I could be in a position to earn a
commission and pay back my stipend, my advance, and pay
back Davel Mayor for his investment in the nine thousand
(05:50):
businesses I started back then in my teens that didn't work,
and in the course of working for Stephan Miller, it
was Stefan Cotter and Miller Wait Company, and I went
to go work for this guy and was making effectively
hard money loans in the hood, the inner city. I
didn't realize what I was doing until I realized what
(06:12):
I was doing. I failed the California real Estate test
three times. You can't take the test more than four
times before they say you're too dumb, You're too stupid
to take this test anymore. And at fourth time you
can't take it anymore if you fail it. So, at
least back then it was the case, and so the
fourth time I failed it three times. The fourth time
I finally passed the test, and people laughed at me.
(06:33):
In the office. I was one of very few I
think it was one of two African Americans in the office.
But I was sitting right next to Steve Miller, the
chairman CEO, and I'd ear hustled. I'd listen everything he
had to say. And one day I walked in his office.
It look, I'm tired of being an employee. Make me
a partner, and he laughed at me. The only reason
you're here is the gift as a favorite of Dave,
(06:54):
a mayor. I said, yes, but I can. I know Hollywood,
I know the money you're trying to get me a
loan in South central LA, little old ladies. And these
person was not a racist. They were just trying to
get a big return of their money. The money he
trying to get me to loan in South central LA.
I could loan that money out in Hollywood and for
people who can actually pay you back, but need have
(07:16):
a short term need for capital, and they have assets
and income, unlike the people in South central LA who
had assets and no income. And these are bigger transactions
in Hollywood anyway, I convinced him to do that. He
made me a partner in a new division of the
company with no assets. It's called WCC Funding Corp. Loaned
(07:36):
me his roller deecks. Back then, you know your address
book and your iPhone back then was called a rollerdex,
and you literally rode the deck of business cards and
how many rolls of the rolodecks to fine, how much
juice you had in the marketplace, how many people of
power and influence you knew? And people laughed at me
(07:57):
as I went about this business, having just fail out
the California Real Estate tests three times. First year, I
did zero in business. I paid attention, I hear, hustled,
I listened, I learned. The second year I did nine
million in business. Thirty year I did fifteen million in business.
The final year I did twenty something million dollars in
business and ultimately ended up purchasing my own division. I
(08:22):
did amagine buyout and bought my own company. I explained
the transaction in detail in the separate podcast. But I
never would have gotten that opportunity had I not first
taken a job paying no guaranteed compensation. Did I feel
like I was valuable. I felt like I was smarter
than most people in that office. People were making six figures,
(08:43):
going living in fancy homes. But I had to take
the worst job they had in the best office I
could find. Wanted to meet my obligation to the investor
who I promised to pay him back. But once I
got there, I sound found opportunities, but I had to
go digging in the holes, and nobody else wanted to
hang in and do these initially these hard money loans
in south central LA and ultimately transition that. You know,
(09:06):
rainbows after storms, transition that storm into my own rainbow.
Rainbows only follow storms. You cannot have a rainbow without
a storm first. That's why I tell people in the pandemic,
you don't run away from the office. You run to
the office. In distance working, you don't advocate to stay
at home. All the wealthy people and the successful people
(09:27):
who have been in the office for years and already
have their relationship capital, they're staying at home with their
children or whatever.
Speaker 2 (09:33):
Cool.
Speaker 1 (09:33):
You take your rear end of the office because you
want to be right in the nose of the boss.
You want to again ear, hustle, pay attention. By the
eighth time you walk past the office of the boss,
they'll say, who are you? What's your name? There's nobody
else here but you and me. Look what's should come
in here? And after listening to you, if you might look,
I have this assignment, you want it? Yes, no matter
how bad the assignment is. Yes, And now you've got
(09:55):
a seat at the table, and you're going to get
a crappy assignment.
Speaker 2 (09:58):
But it doesn't matter. Turn it in some gold and
then press the boss.
Speaker 1 (10:02):
So in all these examples, I'm giving you the same example, right,
but it starts with this, How dare you pay me
five hundred dollars a week? Which is a fortune from
my perspective to be an assistant to a star. You
want to be next to the star. You want to
be in the environment. Again, please hear me, If you
hang around nine broke people, you'll be the tenth. I
did a whole episode on that deals with this whole
(10:25):
situation with Oprah and the young lady. I believe it's
miss Henson who I believe was saying she wasn't being
paid properly on Oprah shows. But then you should have
taken the contract. Okay, I mean, don't say yes when
you really mean no. Nobody's forcing you to take this
contract from Oprah. You should be honored to be with Oprah.
I just have a different view of the world. In
(10:48):
Oprah's job is to make a profit, not to pay
you top dollar. So you have to understand how this
game works. You have to understand what hustle means and
investment means, and how to get a return on your investment,
and to show people that you're worth not just paying
you what you're worth, but in my example with WCC funding,
(11:10):
giving me a profit participation in the upside of my potential,
structuring a deal where it's cash plus or income plus
or income plus, a chance to build wealth based on
your contribution, and any entrepreneurs willing to take any smart
entrepreneurs willing to take that deal, and being at the table,
(11:31):
even if you don't get a profit participation, being at
the table with those who already are successful, if you
are smart, will make you successful. So it's R and D,
research and development is investing your time on the front end. So, yes,
I do believe the young people who are talking bad
about the young lady being underpaid are wrong. Yes, I
(11:55):
said it all right, John O'Brien, this is money and Wealth. Hey, hey,
John Hope Bryant, entrepreneur, and it's important I say the
word entrepreneur on this particular segment of Money and Wealth
(12:19):
on the Black Effect Network on iHeart on this podcast episode.
So you know where I sit in the food chain
of capitalism. People say I don't like capitalism, I hate
rich people. No, that's not true. You don't hate rich people.
You hate rich people until you become rich. What you
(12:42):
hate is a game system. What you hate is a
system that does not work for you. No matter how
hard you work, no matter how much energy you put
into a project or an initiative or a place of
employment or whatever, you don't see a return on your investment.
You see somebody else much less intelligent than you. Maybe
(13:03):
they're succeeding and you're not. They're on the come up
and you're not. So you say, this must be a game,
This must be some kind of rigged system.
Speaker 2 (13:11):
And so you resent that, and you should.
Speaker 1 (13:14):
By the way, that means the ladder of aspiration is
broken in America, or at least in that environment. And
somebody who's less intelligent than you, you seem to think
is succeeding more than you, which might be true. But
that's no reason to hate the game. Just the players
(13:36):
of the game. So even if you want to distribute
money like a socialist, you firse kind of collected like
a capitalist. I'm gonna repeat that. Even if you want
to distribute money like a socialist, you first have to
collect it like a capitalist. People say, oh, I don't
want to be a capitalist. I don't want to be
I'm gonna explain in a moment how we're all capitalists.
(13:57):
That's right, we are all capitalist. People who say they
don't like capitalism, sorr, I just broke one egg. People
say I hate rich people. No, you don't hate rich people.
You hate rich people to you become rich. Oh, I
want to give the money away, we should just share it. Well,
you can't distribute it unless you first collect it. Well,
I want to work for the government. Where do you
(14:18):
think that money comes from? Hello, government tax revenue comes
from tax payers. All the government revenue that s are
the government income, if you want to call it that.
The budget for the federal government, the largest government in
the world, the largest economy in the world, the United
States of America. We may not be the largest government
(14:41):
because there are other governments who waste money and have
bigger budgets on crap. But we're the largest economy in
the world, and really, I think the most efficient government
in the world. Actually, that's another podcast. Rule of law,
all that stuff. You're a congress person here, you go
out and go shopping with a congressional credit card, there'll
(15:02):
be a front paid story about you within six months
in the local newspaper in your congressional district. That wouldn't
happen in China, wouldn't happen in Russia, wouldn't happen in
most parts of the world. So we do have a
pretty efficient system. But I'm getting away from the topic.
Those who work in the government, those who spend the
money the government, are spending money that you and ize
taxpayers paid into the government. So where do jobs come from?
(15:25):
Eighty eight percent of all jobs, give or take in
the United States of America, the largest economy on the planet,
are private sector jobs. Just about twelve percent or so
of all jobs. Our government jobs. Hello, when you go
to a place like I don't know, someplace in the
Middle East, to go to a certainly third world countries
(15:46):
you often find that the ratio is flipped that the
majority of jobs seventy percent eighty percent of all jobs
are government jobs and the private sector is very small.
So everybody wants to go work for the government where
that works quote unquote, it works if the government says,
got an income from let's say, oil, a hole in
the ground, not from productivity, not because you're an entrepreneurial genius,
(16:11):
not because you guys invented something, but because in this
traditional example, there's a natural resource the world needs and
they're extracting it from your business interests, corporate interests are
extracting those resources.
Speaker 2 (16:25):
Are iron or copper, oil.
Speaker 1 (16:30):
Whatever it may be, from the ground, from your ground
and removing it. At some point, you're going to run
out of that resource and you will go broke as
a nation. But in the short term, people think they're balling,
and so they pay out a bunch of salaries and
overpaid salaries for everybody's working for the government basically and
stealing from the government, and is graft and all kinds
(16:50):
of things going on, you know, which is you know, pimping.
Basically the government bribes, et cetera. Right, so let's now
talk about traditional capitalism. And I just made a bold,
audacious statement that we are all capitalists. So let me
now break down the six forms of capitalism people say
(17:11):
they hate, you know, oh I hate America. Look, capitalism
and democracy are horrible systems except for every other system. Oh,
I want to be a I want to live in
a socialist country. All socialism really means is how do
you distribute the resources? I e. The Nordic countries. I'm
(17:31):
trying to break down the six forms of capitalism in
just one second, but the Nordic countries, a lot of
socialist countries. Well, that just means that once they pull
the oil out of the ground in places that have
become resource rich because of oil, like my friend my
friend's country, Norway, or in other countries in that area
that have oil as an example, or Sweden that has
(17:53):
I believe timber as this resource, they then take that
dollar that comes in the business person and gets let's
say fifty cents of the dollar thirty cents on that
dollar and fifty to seventy cents of that dollar is
taxed and goes to pay for public resources. Right, and yes,
there's no homelessness in that place. As an example, everybody's
(18:16):
got a safety net. But you also don't see those
at the bottom ever achieve a place at the table.
Speaker 2 (18:23):
At the top.
Speaker 1 (18:23):
You see a bunch of homogeneous folks at the top,
mostly white European from certain class structures. So you don't
have any anybody falling through the cracks at the bottom,
but you got nobody blowing hose through the roof at
the top with success who don't look like folks who
are successful there before. Are you following me so far?
(18:45):
So it's a taxing system. What you call socialism is
a way of prioritizing who gets what. It's deeper than that, Yes,
it's socialism. Communism is obviously deeper than that. But I'm
not a fan of socialism or capitalism. I don't believe
that people. Nobody washes a rental car. You know, even
(19:05):
nuns drive a rental car, and after a week of
it being filthy, they take it back to the owner
hurts or whomever, and give it back to them and
let them clean it up. Now there's a random there's
an odd person who is so conscientious that, yes, they'll
go and wash a car that's not their own. But
typically nine times out of ten I'd even say ninety
five times out of one hundred. If you did a
(19:27):
survey of you went to go to a rental car
company and you said that people return the car back
clean and wash, the answers absolutely no, nobody washes. Nobody,
meaning most people don't wash rental cars because it's not
your own.
Speaker 2 (19:40):
So what do you own? You own your human capital.
Speaker 1 (19:43):
So here we go. There are six forms of capital,
and it starts with human capital. You are human capra.
You have an education, you have a knowledge base, you
have a skill, you have a talent. You decide to
market that talent in exchange for compensation so that you
can live. Now, you're not living for free, you're not
working for free. You're not giving Even folks in Congress
talk about they want socialism, they're not. They're not willing
(20:05):
to give it their paycheck which they got, and I'm
going to say here, through capitalism, that willn't give you
that paycheck. And no, they've got a mortgage, they've got
a car note, they've got credit cards. That's capitalism people. Okay,
but I'm gone too far. Let me come back to
the sixth forms. I'm so excited about this. Here are
the six forms of capitalism. You just want to get
right to the meat of this. The first capitalism example
(20:28):
is a worker. The second capitalism example is an employee. Yes,
those are different. The third capitalism example is a salaried employee.
The fourth form of capitalism is a corporate c suite executive.
The fifth form is business ownership. The sixth form are
(20:50):
crazy people like me entrepreneurs. And at that highest level
of entrepreneurship French word built creates something out of nothing,
create value. At that sixth level, an entrepreneur works eighteen
hours a day to keep from getting a job. All right,
that's certainly me. And I don't think I'm working. I
just enjoy what I do. People are like, I'm on
(21:11):
the beach with my iPad, and people are like, guys
walking by me, why are you working?
Speaker 2 (21:15):
Man?
Speaker 1 (21:16):
Because I'm making him feel bad because he's not working.
I guess why you working. I'm not working. I'm writing
something down. I'm putting down my ideas. I love it.
You know I'm not bothering you. I guess I am
bothering you, but I'm not working. I guess it bothers you.
To see me with an iPad on the beach. But
that's how I'm paying for my vacation. Number one and
number two, I'm actually enjoying myself. It's creative expression. You're
(21:39):
obviously tired at the job that you have, versus me
being exhausted at the entrepreneur opportunity I'm pursuing. Once I
get exhausted and I get arrested, I'm back in duty.
I'm rejuvenated. But with tired means you're doing something you
really should not be doing for one more second. Tired
and exhausted or too different things. So I said that
(22:01):
we're all human capital. Remember that, all right. So you
have a talent, you have a gift, you have an expression.
We By the way, America is a capitalist democracy. America
is a capitalist democracy. So it's a democracy rooted in
capitalism and free enterprise. The first example of governance in
America is not a city. It was not a county,
it was not a state, it was not the country
(22:22):
of the United States of America. The first article of
governance in the country was a corporation. It was a
trading corporation that had voting rights from the British that's
you know, this trading company that that trading company.
Speaker 2 (22:36):
You might have heard about it the history books.
Speaker 1 (22:38):
Let's go back to these six examples and I'm gonna
break each down and explain each to you. Feel free
to write this down, replay it, sit down with your
family and go through it, and let's talk about which
one you fit in. Where do you sit at the
table to capitalism. So now you're a freelance worker. You're
obligated to know one. You have freedom, You do, you like,
(23:00):
when you like, wherever you like. You may, you know,
just do pick up work here, pick up work there.
Maybe you decide to work this week not that week.
Maybe you're maybe you're doing spot work. But you're doing
what's called ten ninety nine work, which is you're paid
from a tax basis based on a contract role, and
(23:22):
taxes are not removed and with holdings are not removed
from your check, but you're responsible for paying the taxes
on that check minus business expenses if you want to
treat it like a business. Most people don't. Who are workers.
So you have a ten ninety nine as a contract worker,
and your obligation is to pay taxes under your tax
(23:43):
break bracket on your income as a worker. But it
gives you I guess a lot of freedom. But most
people doing ten ninety nine work at that lower level
of expression. And there are those at a higher level
of expression, but they tend to be business owners doing
ten ninety nine work. I'll get to that in a minute,
but that lel level of expression of your human capital.
They tend to be folks with a high school education,
(24:05):
and it's not and they're not very paid very much.
Is literally hand the mouth, okay, And by the way,
I've been there.
Speaker 2 (24:13):
Employee.
Speaker 1 (24:14):
I've been to most of these categories, by the way,
I just didn't stay in most of them very long.
The second one is an employee. Now you're getting a
paid check. You're now a W two employee. You're paying
taxes and with holdings. You're recognized as part of the team.
You're on the docket for the corporation or company or
(24:36):
enterprise or business or government or whatever, or the nonprofit.
You are recognized as part of an employee group. And
maybe you get benefits like health insurance, et cetera, et cetera.
But you're now invested in that team. You put more
energy in than a worker. They expect you to show up.
Let's say at nine o'clock and leave at five, or
check in at nine and check out at five. They
(24:58):
expect certain things from you. There's certain policies and procedures
you must adhere to. You can't do as you like,
whenever you like, whatever you like. You're part of a
larger infrastructure, but you're trading your talent for a paycheck.
But you have the comfort of knowing. And it's more
than a worker, right as an employee, but less than
(25:18):
a salary person. But it's by the hour, right, by
the hour. But you know, at five o'clock or four
o'clock or whatever your forty hour week is based on.
You know you can leave, you up and leave. The
rest is not your responsibility. And for that, let's just
say the same in this example. For that you get paid,
let's just say forty thousand dollars, forty thousand dollars a
(25:40):
year as an employee that's checking in at a time
clock on an hourly job.
Speaker 2 (25:48):
Whether you get some benefits. Are you with me so far?
Speaker 1 (25:52):
Just nod your head and say yes, or hit the
like button if you're on a platform that allows you
to do that. In me A note, this is a
very important podcast episode where I really do benefit from
feedback from you, because I'm trying to explain something that
no one explains. It's actually fairly simple, but we've complicated it,
and as a result of that, we confused Americans and
(26:15):
people around the world about what they should be striving
for and what they should be striving against. Number three
form of capitalist and capitalism is a salaried employee. Now,
your boss has a right to call you at eight pm,
maybe even on the weekends, and you'd be smart to
answer the phone call. You don't have the right to say,
in this example, well my you know, forty hour week
(26:38):
is up. Because you're a salary employee, they can't abuse you, right,
they can't abuse the right. That's against the law. But
within a reason, a salaried employee is you know, ride
or die. They're there for when the need is so,
maybe as a worker you're paying twenty thousand dollars a year.
As an employee, you're being paid thirty five thirty thousand
dollars a year. As a salaried worker, maybe you're getting
(27:01):
paid fifty thousand, sixty thousand, seventy thousand dollars a year,
but you've got less freedom to walk away you're on
the hook more for leaning in with management and being
part of the special forces team. Is the lowest level
with a special forces team typically is that salaried employee.
You make more, you got less, so you're being val
(27:23):
you're human capitalist more value. Tend to be college educated.
At that salary level, you're not part of the American
middle class. So you make it between you know, I
don't know, fifty thousand, forty thousand, and let's just say
in this example, one hundred and fifty thousand, it's just
giving you a range. And you're a W two employee,
so you have more risks, so you get more reward.
(27:44):
As an employee, you have less risk and you get
less reward. The worker gets as the lowest level of
risk and gets the lowest level of reward. Corporate c
suite executives the highest level of a corporations chief executive
officer c chief financial officer. Trying to get debunk all
these terms so that you know, humanize them for you
(28:06):
no one to explain how this stuff works. C AO
Chief administrative officers, COO, chief operating officer, vice chairman, which
is typically lower level than the CEO but has gravitas
and typically vice chairmen typically are not full time positions.
But you have the chairman of the board. Then you've
(28:26):
got the board of directors and the chairman board. The
CEO is typically if it's a strong CEO on the
board of directors, so it's a CEO and board member
or president CEO maybe not on the board. Then you've
got these officers, right, secretary of the corporation, all that stuff.
All those people are corporate c suite leaders, the highest
level of a corporation, and they have the highest level
(28:47):
of risk, the most engagement. They work weekends, evenings, Christmas
Eve if the balls ass. They're the special forces team
at the highest level, and they get the highest compensation.
It goes from you know, low six figures, typically you
even have high five figures, but depending on the city
cost of living, low six figures up to literally millions
(29:10):
of dollars if it's a fortune five hundred company, but
typically it's high five figures of income to you know,
mid six figures is typically where most successful companies are
paying corporate c suite leaders. Then you have the sixth
level where you're really starting getting into real risk reward.
Now you've broken out of the company and the confines
(29:31):
and the safety of health insurance of somebody else, taking
on the debt, taking on the corporate risk, taking on
the liabilities, getting somebody else's getting sued, somebody else's brand,
somebody else's reputation, somebody else's you know, balance sheet income statement.
(29:54):
Now you've stepped out and you decided I'm going to
be a business woman or a businessman, and I want
the chance of the big ring. What's the difference between
a business person and an entrepreneur? Is there a difference, Yes,
there is, and people they mangle the two things together.
We used to mangle it together at Operation Hope. I
had to explain to my team you had to separate
(30:15):
these things. Yes, business training and entreprenship training are similar,
but they're not identical. A business owner business training is
somebody who has an established who's modeling what they're doing
on an established business plan. So think about a franchise,
Think about a mailbox, et cetera. Think about a McDonald's,
(30:36):
think about you know whatever. Pick the franchise you like.
Get that in your head now, A restaurant franchise, a
nail salon franchise, a hair salon franchise, a you know,
some kind of professional service. You're getting a professional service
franchise while it's coming up.
Speaker 2 (30:53):
Used to be called Kinko's. And I think even.
Speaker 1 (30:56):
FedEx stores are Federal Express stores are franchises in most places.
These are business plans, pre established. They've shown they work
car dealerships franchises that Okay, you follow this model in
nine times out of ten, maybe even ninety eight times
out of one hundred, you do this, you do that,
and you should succeed along the following lines. You put
(31:19):
this capital in, you put this energy in, you put
this time in. You lean against this established business plan,
you use this established brand, and as a result of that,
you should live a life that has more return than
a corporate C suite executive, the salary executive. It's an
employee or a worker. You're going to get more financial compensation,
more ultimate freedom. Really you're going to step in from
(31:42):
making money. They're building wealth if you're really good at
it as a business owner. But that's different than being
an entrepreneur because it's an established, existing business plan. It's
really important to me that you're with me of this
tick of the watch. So all these are forms of
capitalism you've gone from human capital to maybe financial capital
(32:04):
in the business owner, but you're still using capital, and
it's still capitalism because you're trading your talent and your
gifts and your energy for some form of remuneration. The
last form of capitalism is.
Speaker 2 (32:19):
What I do.
Speaker 1 (32:20):
Entrepreneurship. We are absolutely, unbelievably, undeniably crazy. We're nuttingess, we're
out of our minds. An entrepreneur is doing something that
hasn't been done before, creating value or value didn't exist.
May take two or three businesses, business ideas merging together
and create a whole new business idea. You know, Xerox
was a business, IBM was a business. Steve Jobs and
(32:45):
Bill Gates went in and looked at those businesses sort
of reimagined them through an entrepreneurial spurt of energy. They
created something called Microsoft and Apple, which were reimagination of
traditional businesses along new entrepreneurial lines and created helped to
create a whole new sectors. Bill Gates created Microsoft. I
(33:07):
actually know Bill Gates Microsoft. So it was taking the
big business of computers, macro computing, making it micro software.
That's what that means, micro Soft. I can't get in
his hand and tell you that's what he means. But
that's what that means. And that was the first time
anybody had done it. And then Steve Jobs took something
(33:28):
that would took up a whole room and was pretty boring,
a computer, and he made it personal. The first personal
computer I believed was Steve Jobs. But it is certainly
the first sexy computer. It's the first computer or our
phone or digital advice whatever. They had a sort of
energy and emotions and personality to it and creativity and style, right,
and so that was very entrepreneurial. So can you be
(33:51):
an entrepreneur and a businessman, Yes, you are a businesswoman. Absolutely,
I'm an entrepreneur and a businessman.
Speaker 2 (33:58):
Right.
Speaker 1 (33:59):
That's at the highighest level of risk reward. So I
take the highest level of risk of both human capital, reputation,
brand creating, using my own brand, my own reputation, my
own capital, really throwing the dice at some idea, leaning
into it, probably not getting paid, no existing business plan,
no guarantee this is going to work, may blow up
in my face. And entrepreneurs, I said, works eighteen hours
(34:21):
a day to keep from getting a job. Success is
going from failure to failure. Without loss of enthusiasm, old
a rounded through it. I'm going to get to it.
You know, life is ten percent what life does to you,
and not even saying how you choose to respond to it.
Speaker 2 (34:33):
I take no for vitamins that this.
Speaker 1 (34:35):
Is like crazy passionate, committed entrepreneurship right at the highest level,
and as a result of that, if it pays off,
you get a great return. Even I had a traditional
real estate business, the Promise Homes Company, which I grew
in a unique and different way. Doing well and doing
good was my approach, and it wasn't perfect, but it
(34:56):
really left communities better, left people better. When I was
when I owned the company from twenty seventeen to twenty
twenty one. When I sold it, I'm still a partner
in it, but I'm partnering was now called a joint venture.
I don't own it completely, I don't control it. I
can't just do as I like. I've got to talk
to a bunch of partners. I'll do business structures in
another podcast, explain different business structures to you so you
(35:20):
again demystify how all this stuff works, because there's no
shame in the game of not understanding how something works.
There's no. It's what you don't know that you don't
know that's killing you. But you think you know. My
job is to demystify this so you actually now know.
So I'm now explained that six forms of capitalism. As
a worker is an employee, there's a salary worker employee,
(35:43):
there's a corporate executive, there's a business owner, and there's
an entrepreneur. Can you be an entrepreneur, by the way,
and be in the nonprofit space, Yes, you can be
a social entrepreneur and you're getting a return on investment,
return your capital. That might be spiritual, right, you're just
going about it in an entrepreneurial way, but you're doing something,
(36:03):
creating something that didn't exist before.
Speaker 2 (36:05):
Same rules apply.
Speaker 1 (36:07):
And I found out I was an entrepreneur when I
was nine years old when a banker came to my
classroom and taught financial literacy to our classroom. And I says,
excuse me, sir, what do you do for a living
and how did you get rich legally? And he said,
I'm a banker and I finance entrepreneurs. And I said, sir,
what an entrepreneur is? What you're financing it? And it's
legal I'm going to be one. And I opened the dictionary.
(36:29):
Yes it wasn't a Google search back then, it was
a dictionary. And listened up to the dictionary Western's Dictionary
entrepreneur French word, build something out another and create value,
blah blah blah. And I was like, okay, whatever that is,
I'm doing that. And I said, you finance entrepreneurs, mister banker, Yes,
I do. Okay, then I'm going to make sure that
I qualify myself so you can finance me. And where
(36:52):
did the operation hope come from? Well, I said, I
now know what my example is going to be. What
I'm going to do and become an entrepreneur. And I
went to the licker store and told the liquor store
on he was selling the wrong kind of candy. He said,
go away, little boy, I've got a college degree. I said,
that's nice. I've got cavities. I'm telling you selling wrong
kind of candy. You should be a joint venture partner
with me. I can tell you how to sell some
real candy. He laughed at me. Well, I ended up
(37:15):
putting me out of the liquor store, out of the
candy business, because I was nine years old.
Speaker 2 (37:20):
I knew what I was talking about.
Speaker 1 (37:21):
And when I was ten years old, I put the
liquor stor out of candy business in Compland, California at
my home at one five five o two South Freeley
in Compland, California. So I knew that I was wanted
to be an entrepreneur way back when and I did
my first joint well, it was supposed to be a
joint venture. He didn't listen to me, so it was
really a market takeover by my new small business, all right.
(37:42):
And I was actually a worker for a short period
of time. I actually worked with him as an employee
to learn what he was doing how I was doing business.
I was so call that research and development R and D.
I worked for three weeks and quit once I realized
where his inventory came from, where he bought his product from.
With the wholesale was what he bought it for, what
the retail rate was, what he charged, what he marked
(38:04):
up to, what the profit margin was the difference between
the whostale rate and retail rate. And I went to
where he bought his product with an investor for my mother,
but she was my capital provider, my investor. She said,
life is tough. I'm not gonna give you money you're
gonna to I'll give you this forty dollars an investment.
You're going to pay it back with interest. That's a banker,
right backer. And I put links around the candy business.
(38:25):
I was at the bottom of the food chain is
a worker capitalism level one, and I was at the
and I was at almost at the top of the
food chain as a business owner capitalism number five. Because
because a candy house is actually an established business plan,
you can go to the internet search one a business
plan for candy houses now, or go to my Operation
Hope team at the One Me and Black Business Initiative
(38:47):
or our Hope and Side location and they'll help you
find and build a business plan for a candy house
or a buffler shop, or a nail salon or nursery
business or daycare, whatever it is you want to do.
So then I asked this banker, are there other bankers
like you in the world. He said, yes, they're probably
a million bankers in America. There were back then ten
(39:08):
thousand banks. I said, is your job to lend poor
people money?
Speaker 2 (39:12):
Yes? All you have to do is prove that you
can pay it back.
Speaker 1 (39:15):
I was like, and if I don't pay you back,
I don't get debt, because that's what happens with the
gangsters around the corner. You don't pay them back. He's like, no,
we just issue a notice of default. We impacked your credit.
Like okay, well, I'll take that deal all day and
all night. And this applies to everybody in the country. Yes,
now you know my passion and why I want to
raise credit scores to people so you're bank qualified. Lower
(39:37):
your debt level so you fit the debt to income ratios.
Increase your savings so the banker knows you have a
little cushion in case you run into hard times. Those
three things are the baselines for becoming bank qualified. And
I want to get an entire generation of young people
and struggling families and folks are too much of the
(39:57):
month at the end of their money to be able
to qualify for their dream teams. The bank says yes,
when right now they may say no because half of
black folks have a credit score below six twenty, not
poor people, everybody. And so you may think as racism.
It may just be your credit scores. Thinks may think
that maybe that your death income ratios are off my job.
I now know looking back at my childhood. I didn't
(40:18):
know it back then that at ten years old, I
both figured out what I was supposed to do.
Speaker 2 (40:22):
For a living and what I was going to do.
Speaker 1 (40:25):
Sixteen years later in founding Operation Hope, which is now
the largest financial literacy, coaching and empowerment organization in America
and probably even in the world. We have three hundred
offices across this country, a seventy million dollars operating budget,
four point five billion dollars invested through our partners in
underserved neighborhoods. The only nonprofit allowed to operate side of
a bank branch in US history, and we're killing it,
(40:46):
raising credit scores fifty to one hundred points, lowering debt
thirty eight hundred dollars in some cases, increasing savings two
thousand dollars, and making people bank qualified and giving them
their dignity back at scale. All that came from that
kid a school classroom, getting a financial literacy course in
home economics class, which doesn't exist anymore. I'm going to
solve that and change that in my lifetime as well.
(41:07):
By the way, the silver rights movement in the suites
not the streets. The colors now green, not black or white,
or red or blue.
Speaker 2 (41:14):
It's green.
Speaker 1 (41:15):
But today I wanted to explain to you the six forms,
the basic forms of capitalism. Are there more forms?
Speaker 2 (41:22):
Yes? Is there more structures? Yes?
Speaker 1 (41:24):
And I've got more episodes. Well, I'll break some of
this stuff down, but let me know that you got this,
that you understand what I'm saying. And figure out now,
have a conversation with your husband, wife, your son, your daughter,
your cousin, your partner, your friend. Which one of these
six are you? Which one of these six are people
you love? Do you want to be in appeinationship with
somebody who's a worker or an employee, a salary employee,
(41:44):
a corporate executive, a business owner, an entrepreneur. If you're
the higher you get on that scale, the less time
you're going to have for a traditional life. But the
more the higher you upon that scale, the more resources
and the opportunities you have to live a free life.
But you'll find as you get up that scale from
one to six, you get up that you know certainly
four or five six levels of capitalism U that your
(42:09):
balance of time will be out of balance. You will
always be fighting for time. Whereas you're a worker, you
may have all the time in the world, but you
also won't have any resources to do anything with that
time in the traditional sense, meaning financial resources. Okay, so
there you go, Love and Light yo yo, John Hope Bryant.
(42:37):
This is Money and Wealth on the Black Effect Network
at iHeartRadio. This is a fan question cast Underscore seven
three three three from Instagram. Cast East Underscore seven three
three three from Instagram. Ask when starting a business, what
are the steps you recommend to secure alan or investment?
Speaker 2 (42:58):
Love the question.
Speaker 1 (43:00):
I would suggest you go to Operation Hope, get a
Hope financial coach. We scholarship. You all in for free.
So you get Hope Light initially coaching and counseling. Calling
out of the blue. You tell them I sent you.
They'll give you Hope Classic, which will allow them to
go deeper. You can go into You can sign up
to one Million Black Business Initiative one MBB and get
(43:21):
business training, a business plan help. They'll help you develop
that and they'll help you put together a budget and
a financial statement, an income statement, a balance sheet. I'll
explain all those things on one of my podcast series,
Different Structures of a Business and the tools the bases
you need for a business. But once you have that
in place and ready to go to market, you may
(43:43):
if you're coming up from nothing like me, you may
need to have a non traditional approach. Now, ninety six
percent of all black businesses don't have an employee, which
means you don't have infrastructure, systems, books and records for
the business. You're really your business, but your more busyness
or a self employment. You have no employee except yourself.
So you may have to use your personal credit score
(44:06):
in order to secure a business loan or to use
a personal loan for a business purpose. When I was
coming up, I had to use credit cards. A Pep
Boys card was how I maintained my car, which I
drove around to do marketing and sales calls. The department
store credit cards back then it was Montgomery Wards, it
was Sears.
Speaker 2 (44:26):
May see things like that.
Speaker 1 (44:27):
The department store credit cards is where I bought business
clothes and business suits and business shoes that allowed me
to look presentable when I went to business presentations. I
had a credit card from all these different kinds of
companies because I didn't have traditional capital. Capital is both
debt and equity. So investment money you don't have to
(44:49):
pay back on a schedule is equity, and debt is
an investment in the form of a loan. You pay
back on a schedule with payments. Okay, I'm over answering
this question, but so you may have to use credit cards,
loans from families and friends. The more sophisticated version of
that today is a cloud sourcing platform that you can
(45:10):
use to you know, people are cloud sourcing all kinds
of things, cloud funding, funerals and cloud funding. You know
somebody going to college where you can cloud fund a
business investment opportunity, and of course the most traditional thing
is to put together a business plan and go get
a business loan, a small business loan SBA, a loan
(45:33):
from state government agencies, city government agencies like here in Atlanta.
You have invested Atlanta, which operational partners with, and you
can get a loan and sometimes a forgivable grant. Yes,
every now and then the government will is trying to
spur small business creation in your area and they will
give you a forgivable grant. I need to do it.
One of these podcasts that differentiates a nonprofit from a
(45:57):
for profit and explain that structure, which I just decided
to do at this very moment, and I'll also explain
the different types of corporations and all that stuff. But
leading back to the question, the top of the food
chain here is to be able to get a loan
from a bank and secured or unsecured line of credit
(46:18):
or a loan commercial loan that doesn't require a personal
guarantee because you've prepared such an incredible business. You have
a cash flow, you've got maybe you've been running a
business now for three to five years, and you've got
enough revenue from the business itself, and you've got three
employees and a retail place and making this up and
cash flow from dependable, reliable, consistent clients that the bank says,
(46:40):
we don't have to rely on the individual credit. We
can work on the we can rely now in the
business credit. The business is credit, and we'll make a
loan to the business. It doesn't require personal guarantee from
the individual. The way I started this answer was the
individual is the credit because they are a self employment project.
So those are some examples of how you can start
(47:02):
seeking financing for get a loan or investment for your business.
Those are not there all the examples. You can do
a private placement to try to raise money, which is
like a form of crowdsourcing, So look up the phrase
private placement, but to be very careful about how you
do that because you can run into securities violation the
SEC Securities and Exchange Commission if you don't do that
(47:23):
exactly right, and you're not getting folks who are qualified
to be investors in a private placement as investors, you
don't want to go get the proverbial little old lady
who can't afford to lose a thousand dollars, so you
don't want her investing in your project and she loses everything.
You have enough of those people and you didn't clarify
well what they're investing in, you could be breaking the
(47:44):
law and not know and end up with handcuffs on
and I don't mean from a jewelry store. All right,
A good question. I hope I answered it well. Kudos
to you.
Speaker 2 (47:55):
Cast Underscore seven three three three for critical Thinking. John O'Bryant.
Speaker 1 (47:59):
This is the Money and Wealth series on the Black
Effect Network at iHeart wherever you get your podcast, Tell
a Friend, Love and Light. Money and Wealth with John
(48:23):
O'Brien is a production of the Black Effect Podcast Network.
For more podcasts from the Black Effect Podcast Network, visit
the iHeartRadio app, Apple Podcasts, or wherever you listen to
your favorite shows.
Speaker 2 (50:00):
The tapp
Welcome the Money in Wealth with John O'Bryant, a production
of the Black Effect Podcast Network and iHeartRadio. Hey, Hey, hey,
this is John Hope Bryant. This is money and wealth,
and this is a trending topic. This is a recording artist,
(00:22):
a rapper is offering in this example, five hundred dollars
a week for a personal assistant. And there was outrage
from I believe millennials, young or just say young people
who value their own talent and skills and intellect. It
(00:44):
was outraged because they said, what is this star doing
paying us broke wages or low wages? She's a star.
How dare her pay us five hundred dollars a week
to be her personal assistant? What is my advice there?
(01:07):
My advice is that you're going to go broke. Now,
my observation is you're going to go broke. First of all,
five hundred dollars a week if you're twenty two years
old and you've not yet stepped into mortgages and car
notes and insurance and all of the obligations that an
adult children and household expenses, marriage, all these expenses that
(01:33):
comes with being further on in your career. If you're
somewhere between eighteen and twenty five years old, is the
perfect job for you, and five hundred dollars a week
is actually very good money, particularly if she pays you
as a ten ninety nine employee versus a W two employee.
Do you know the difference. Ten ninety nine is a
contract employee, right, and a W two employee is an
(01:56):
employee on someone's payroll where they take out.
Speaker 2 (02:01):
And other withholdings.
Speaker 1 (02:02):
I'm gonna break down the different kinds of employment on
another podcast. And even if it was five hundred dollars
a week with withholdings, it's still a great gig. I'll
go one step further. It would be a great gig
in my opinion if she was just paying your travel
expenses and living expenses. Yeah, I said it. I worked
(02:26):
for free, offered to work for free for multimillionaires who
are highly successful because I wanted to be in the room.
I wanted to be in the environment. If somebody can
pay you top dollar, then they want top dollar talent
who's already got.
Speaker 2 (02:40):
All the skills that they need. Why do they need you?
Speaker 1 (02:44):
Just because you value your talent and gifts doesn't mean
somebody else is willing to pay for it. You're a
young person looking to come up. Being in that room,
traveling around the country, maybe around the world, Being on
the right hand of a star in the making. Listen
to how they person negotiating contracts or talking to promoters
and managers and agents. Being introduced as a member of
(03:07):
the crew to leaders and luminaries here and around the
world is priceless. And I would do it for free, Yes,
I said it. I would do it for free, or
I would do it for the least amount that I
could survive on and still move forward. In fact that
I have done exactly that in my life. But to
(03:31):
be before I get to that example, let me just
be very clear. In this example, I think that people
who are crying and screaming and hollering and complaining and
even criticizing this rapper Gorilla, I can't believe I'm saying
this is a name, but you know, hey, whatever works
because she wants to pay five hundred dollars a week.
(03:53):
You're just living in another universe and you live in fantasyland,
and it's not going to last. You need to under
understand how this world really works. When I was coming up,
I had didn't have many jobs. I worked for myself
most of the time, but I worked for a guy
named Harvey Baskin who owns Jeoffrey Restaurant. Jeffrey's Restaurant in
(04:14):
Malibu was still there, and I worked as a bus
boy and then as a waiter, and then as his
personal assistant, making a whopping twenty thousand dollars a year
and having to drive from Compton, California to Malibu. I've
burned up most of my income in gas and car notes.
But the experience I got of being at the right
(04:34):
hand of a guy worked two hundred million dollars calling
today a billionaire was invaluable.
Speaker 2 (04:41):
Right.
Speaker 1 (04:43):
I owed this guy named Davil Mehra a lot of
money because he invested in my dream, and my dream
didn't pay off. I was not a very good businessman.
I was confused. I confused busyness with business back then,
and my offlow seed my inflow. So my overhead became
my downfall. And I started losing money and losing his money,
(05:08):
and he said, you got to go get a job
to pay me back. So I wanted to go work
for a friend of his, making no money, made a commission.
They actually gave me a stipend, which was basically like
an advance on my future earnings. He gave me enough
expense money to cover my car note and rent. Let's
(05:28):
just say back then it was one thousand dollars twelve
hundred dollars a month, and he sponsored me to get
a to take the test for my real estate license
so I could be in a position to earn a
commission and pay back my stipend, my advance, and pay
back Davel Mayor for his investment in the nine thousand
(05:50):
businesses I started back then in my teens that didn't work,
and in the course of working for Stephan Miller, it
was Stefan Cotter and Miller Wait Company, and I went
to go work for this guy and was making effectively
hard money loans in the hood, the inner city. I
didn't realize what I was doing until I realized what
(06:12):
I was doing. I failed the California real Estate test
three times. You can't take the test more than four
times before they say you're too dumb, You're too stupid
to take this test anymore. And at fourth time you
can't take it anymore if you fail it. So, at
least back then it was the case, and so the
fourth time I failed it three times. The fourth time
I finally passed the test, and people laughed at me.
(06:33):
In the office. I was one of very few I
think it was one of two African Americans in the office.
But I was sitting right next to Steve Miller, the
chairman CEO, and I'd ear hustled. I'd listen everything he
had to say. And one day I walked in his office.
It look, I'm tired of being an employee. Make me
a partner, and he laughed at me. The only reason
you're here is the gift as a favorite of Dave,
(06:54):
a mayor. I said, yes, but I can. I know Hollywood,
I know the money you're trying to get me a
loan in South central LA, little old ladies. And these
person was not a racist. They were just trying to
get a big return of their money. The money he
trying to get me to loan in South central LA.
I could loan that money out in Hollywood and for
people who can actually pay you back, but need have
(07:16):
a short term need for capital, and they have assets
and income, unlike the people in South central LA who
had assets and no income. And these are bigger transactions
in Hollywood anyway, I convinced him to do that. He
made me a partner in a new division of the
company with no assets. It's called WCC Funding Corp. Loaned
(07:36):
me his roller deecks. Back then, you know your address
book and your iPhone back then was called a rollerdex,
and you literally rode the deck of business cards and
how many rolls of the rolodecks to fine, how much
juice you had in the marketplace, how many people of
power and influence you knew? And people laughed at me
(07:57):
as I went about this business, having just fail out
the California Real Estate tests three times. First year, I
did zero in business. I paid attention, I hear, hustled,
I listened, I learned. The second year I did nine
million in business. Thirty year I did fifteen million in business.
The final year I did twenty something million dollars in
business and ultimately ended up purchasing my own division. I
(08:22):
did amagine buyout and bought my own company. I explained
the transaction in detail in the separate podcast. But I
never would have gotten that opportunity had I not first
taken a job paying no guaranteed compensation. Did I feel
like I was valuable. I felt like I was smarter
than most people in that office. People were making six figures,
(08:43):
going living in fancy homes. But I had to take
the worst job they had in the best office I
could find. Wanted to meet my obligation to the investor
who I promised to pay him back. But once I
got there, I sound found opportunities, but I had to
go digging in the holes, and nobody else wanted to
hang in and do these initially these hard money loans
in south central LA and ultimately transition that. You know,
(09:06):
rainbows after storms, transition that storm into my own rainbow.
Rainbows only follow storms. You cannot have a rainbow without
a storm first. That's why I tell people in the pandemic,
you don't run away from the office. You run to
the office. In distance working, you don't advocate to stay
at home. All the wealthy people and the successful people
(09:27):
who have been in the office for years and already
have their relationship capital, they're staying at home with their
children or whatever.
Speaker 2 (09:33):
Cool.
Speaker 1 (09:33):
You take your rear end of the office because you
want to be right in the nose of the boss.
You want to again ear, hustle, pay attention. By the
eighth time you walk past the office of the boss,
they'll say, who are you? What's your name? There's nobody
else here but you and me. Look what's should come
in here? And after listening to you, if you might look,
I have this assignment, you want it? Yes, no matter
how bad the assignment is. Yes, And now you've got
(09:55):
a seat at the table, and you're going to get
a crappy assignment.
Speaker 2 (09:58):
But it doesn't matter. Turn it in some gold and
then press the boss.
Speaker 1 (10:02):
So in all these examples, I'm giving you the same example, right,
but it starts with this, How dare you pay me
five hundred dollars a week? Which is a fortune from
my perspective to be an assistant to a star. You
want to be next to the star. You want to
be in the environment. Again, please hear me, If you
hang around nine broke people, you'll be the tenth. I
did a whole episode on that deals with this whole
(10:25):
situation with Oprah and the young lady. I believe it's
miss Henson who I believe was saying she wasn't being
paid properly on Oprah shows. But then you should have
taken the contract. Okay, I mean, don't say yes when
you really mean no. Nobody's forcing you to take this
contract from Oprah. You should be honored to be with Oprah.
I just have a different view of the world. In
(10:48):
Oprah's job is to make a profit, not to pay
you top dollar. So you have to understand how this
game works. You have to understand what hustle means and
investment means, and how to get a return on your investment,
and to show people that you're worth not just paying
you what you're worth, but in my example with WCC funding,
(11:10):
giving me a profit participation in the upside of my potential,
structuring a deal where it's cash plus or income plus
or income plus, a chance to build wealth based on
your contribution, and any entrepreneurs willing to take any smart
entrepreneurs willing to take that deal, and being at the table,
(11:31):
even if you don't get a profit participation, being at
the table with those who already are successful, if you
are smart, will make you successful. So it's R and D,
research and development is investing your time on the front end. So, yes,
I do believe the young people who are talking bad
about the young lady being underpaid are wrong. Yes, I
(11:55):
said it all right, John O'Brien, this is money and Wealth. Hey, hey,
John Hope Bryant, entrepreneur, and it's important I say the
word entrepreneur on this particular segment of Money and Wealth
(12:19):
on the Black Effect Network on iHeart on this podcast episode.
So you know where I sit in the food chain
of capitalism. People say I don't like capitalism, I hate
rich people. No, that's not true. You don't hate rich people.
You hate rich people until you become rich. What you
(12:42):
hate is a game system. What you hate is a
system that does not work for you. No matter how
hard you work, no matter how much energy you put
into a project or an initiative or a place of
employment or whatever, you don't see a return on your investment.
You see somebody else much less intelligent than you. Maybe
(13:03):
they're succeeding and you're not. They're on the come up
and you're not. So you say, this must be a game,
This must be some kind of rigged system.
Speaker 2 (13:11):
And so you resent that, and you should.
Speaker 1 (13:14):
By the way, that means the ladder of aspiration is
broken in America, or at least in that environment. And
somebody who's less intelligent than you, you seem to think
is succeeding more than you, which might be true. But
that's no reason to hate the game. Just the players
(13:36):
of the game. So even if you want to distribute
money like a socialist, you firse kind of collected like
a capitalist. I'm gonna repeat that. Even if you want
to distribute money like a socialist, you first have to
collect it like a capitalist. People say, oh, I don't
want to be a capitalist. I don't want to be
I'm gonna explain in a moment how we're all capitalists.
(13:57):
That's right, we are all capitalist. People who say they
don't like capitalism, sorr, I just broke one egg. People
say I hate rich people. No, you don't hate rich people.
You hate rich people to you become rich. Oh, I
want to give the money away, we should just share it. Well,
you can't distribute it unless you first collect it. Well,
I want to work for the government. Where do you
(14:18):
think that money comes from? Hello, government tax revenue comes
from tax payers. All the government revenue that s are
the government income, if you want to call it that.
The budget for the federal government, the largest government in
the world, the largest economy in the world, the United
States of America. We may not be the largest government
(14:41):
because there are other governments who waste money and have
bigger budgets on crap. But we're the largest economy in
the world, and really, I think the most efficient government
in the world. Actually, that's another podcast. Rule of law,
all that stuff. You're a congress person here, you go
out and go shopping with a congressional credit card, there'll
(15:02):
be a front paid story about you within six months
in the local newspaper in your congressional district. That wouldn't
happen in China, wouldn't happen in Russia, wouldn't happen in
most parts of the world. So we do have a
pretty efficient system. But I'm getting away from the topic.
Those who work in the government, those who spend the
money the government, are spending money that you and ize
taxpayers paid into the government. So where do jobs come from?
(15:25):
Eighty eight percent of all jobs, give or take in
the United States of America, the largest economy on the planet,
are private sector jobs. Just about twelve percent or so
of all jobs. Our government jobs. Hello, when you go
to a place like I don't know, someplace in the
Middle East, to go to a certainly third world countries
(15:46):
you often find that the ratio is flipped that the
majority of jobs seventy percent eighty percent of all jobs
are government jobs and the private sector is very small.
So everybody wants to go work for the government where
that works quote unquote, it works if the government says,
got an income from let's say, oil, a hole in
the ground, not from productivity, not because you're an entrepreneurial genius,
(16:11):
not because you guys invented something, but because in this
traditional example, there's a natural resource the world needs and
they're extracting it from your business interests, corporate interests are
extracting those resources.
Speaker 2 (16:25):
Are iron or copper, oil.
Speaker 1 (16:30):
Whatever it may be, from the ground, from your ground
and removing it. At some point, you're going to run
out of that resource and you will go broke as
a nation. But in the short term, people think they're balling,
and so they pay out a bunch of salaries and
overpaid salaries for everybody's working for the government basically and
stealing from the government, and is graft and all kinds
(16:50):
of things going on, you know, which is you know, pimping.
Basically the government bribes, et cetera. Right, so let's now
talk about traditional capitalism. And I just made a bold,
audacious statement that we are all capitalists. So let me
now break down the six forms of capitalism people say
(17:11):
they hate, you know, oh I hate America. Look, capitalism
and democracy are horrible systems except for every other system. Oh,
I want to be a I want to live in
a socialist country. All socialism really means is how do
you distribute the resources? I e. The Nordic countries. I'm
(17:31):
trying to break down the six forms of capitalism in
just one second, but the Nordic countries, a lot of
socialist countries. Well, that just means that once they pull
the oil out of the ground in places that have
become resource rich because of oil, like my friend my
friend's country, Norway, or in other countries in that area
that have oil as an example, or Sweden that has
(17:53):
I believe timber as this resource, they then take that
dollar that comes in the business person and gets let's
say fifty cents of the dollar thirty cents on that
dollar and fifty to seventy cents of that dollar is
taxed and goes to pay for public resources. Right, and yes,
there's no homelessness in that place. As an example, everybody's
(18:16):
got a safety net. But you also don't see those
at the bottom ever achieve a place at the table.
Speaker 2 (18:23):
At the top.
Speaker 1 (18:23):
You see a bunch of homogeneous folks at the top,
mostly white European from certain class structures. So you don't
have any anybody falling through the cracks at the bottom,
but you got nobody blowing hose through the roof at
the top with success who don't look like folks who
are successful there before. Are you following me so far?
(18:45):
So it's a taxing system. What you call socialism is
a way of prioritizing who gets what. It's deeper than that, Yes,
it's socialism. Communism is obviously deeper than that. But I'm
not a fan of socialism or capitalism. I don't believe
that people. Nobody washes a rental car. You know, even
(19:05):
nuns drive a rental car, and after a week of
it being filthy, they take it back to the owner
hurts or whomever, and give it back to them and
let them clean it up. Now there's a random there's
an odd person who is so conscientious that, yes, they'll
go and wash a car that's not their own. But
typically nine times out of ten I'd even say ninety
five times out of one hundred. If you did a
(19:27):
survey of you went to go to a rental car
company and you said that people return the car back
clean and wash, the answers absolutely no, nobody washes. Nobody,
meaning most people don't wash rental cars because it's not
your own.
Speaker 2 (19:40):
So what do you own? You own your human capital.
Speaker 1 (19:43):
So here we go. There are six forms of capital,
and it starts with human capital. You are human capra.
You have an education, you have a knowledge base, you
have a skill, you have a talent. You decide to
market that talent in exchange for compensation so that you
can live. Now, you're not living for free, you're not
working for free. You're not giving Even folks in Congress
talk about they want socialism, they're not. They're not willing
(20:05):
to give it their paycheck which they got, and I'm
going to say here, through capitalism, that willn't give you
that paycheck. And no, they've got a mortgage, they've got
a car note, they've got credit cards. That's capitalism people. Okay,
but I'm gone too far. Let me come back to
the sixth forms. I'm so excited about this. Here are
the six forms of capitalism. You just want to get
right to the meat of this. The first capitalism example
(20:28):
is a worker. The second capitalism example is an employee. Yes,
those are different. The third capitalism example is a salaried employee.
The fourth form of capitalism is a corporate c suite executive.
The fifth form is business ownership. The sixth form are
(20:50):
crazy people like me entrepreneurs. And at that highest level
of entrepreneurship French word built creates something out of nothing,
create value. At that sixth level, an entrepreneur works eighteen
hours a day to keep from getting a job. All right,
that's certainly me. And I don't think I'm working. I
just enjoy what I do. People are like, I'm on
(21:11):
the beach with my iPad, and people are like, guys
walking by me, why are you working?
Speaker 2 (21:15):
Man?
Speaker 1 (21:16):
Because I'm making him feel bad because he's not working.
I guess why you working. I'm not working. I'm writing
something down. I'm putting down my ideas. I love it.
You know I'm not bothering you. I guess I am
bothering you, but I'm not working. I guess it bothers you.
To see me with an iPad on the beach. But
that's how I'm paying for my vacation. Number one and
number two, I'm actually enjoying myself. It's creative expression. You're
(21:39):
obviously tired at the job that you have, versus me
being exhausted at the entrepreneur opportunity I'm pursuing. Once I
get exhausted and I get arrested, I'm back in duty.
I'm rejuvenated. But with tired means you're doing something you
really should not be doing for one more second. Tired
and exhausted or too different things. So I said that
(22:01):
we're all human capital. Remember that, all right. So you
have a talent, you have a gift, you have an expression.
We By the way, America is a capitalist democracy. America
is a capitalist democracy. So it's a democracy rooted in
capitalism and free enterprise. The first example of governance in
America is not a city. It was not a county,
it was not a state, it was not the country
(22:22):
of the United States of America. The first article of
governance in the country was a corporation. It was a
trading corporation that had voting rights from the British that's
you know, this trading company that that trading company.
Speaker 2 (22:36):
You might have heard about it the history books.
Speaker 1 (22:38):
Let's go back to these six examples and I'm gonna
break each down and explain each to you. Feel free
to write this down, replay it, sit down with your
family and go through it, and let's talk about which
one you fit in. Where do you sit at the
table to capitalism. So now you're a freelance worker. You're
obligated to know one. You have freedom, You do, you like,
(23:00):
when you like, wherever you like. You may, you know,
just do pick up work here, pick up work there.
Maybe you decide to work this week not that week.
Maybe you're maybe you're doing spot work. But you're doing
what's called ten ninety nine work, which is you're paid
from a tax basis based on a contract role, and
(23:22):
taxes are not removed and with holdings are not removed
from your check, but you're responsible for paying the taxes
on that check minus business expenses if you want to
treat it like a business. Most people don't. Who are workers.
So you have a ten ninety nine as a contract worker,
and your obligation is to pay taxes under your tax
(23:43):
break bracket on your income as a worker. But it
gives you I guess a lot of freedom. But most
people doing ten ninety nine work at that lower level
of expression. And there are those at a higher level
of expression, but they tend to be business owners doing
ten ninety nine work. I'll get to that in a minute,
but that lel level of expression of your human capital.
They tend to be folks with a high school education,
(24:05):
and it's not and they're not very paid very much.
Is literally hand the mouth, okay, And by the way,
I've been there.
Speaker 2 (24:13):
Employee.
Speaker 1 (24:14):
I've been to most of these categories, by the way,
I just didn't stay in most of them very long.
The second one is an employee. Now you're getting a
paid check. You're now a W two employee. You're paying
taxes and with holdings. You're recognized as part of the team.
You're on the docket for the corporation or company or
(24:36):
enterprise or business or government or whatever, or the nonprofit.
You are recognized as part of an employee group. And
maybe you get benefits like health insurance, et cetera, et cetera.
But you're now invested in that team. You put more
energy in than a worker. They expect you to show up.
Let's say at nine o'clock and leave at five, or
check in at nine and check out at five. They
(24:58):
expect certain things from you. There's certain policies and procedures
you must adhere to. You can't do as you like,
whenever you like, whatever you like. You're part of a
larger infrastructure, but you're trading your talent for a paycheck.
But you have the comfort of knowing. And it's more
than a worker, right as an employee, but less than
(25:18):
a salary person. But it's by the hour, right, by
the hour. But you know, at five o'clock or four
o'clock or whatever your forty hour week is based on.
You know you can leave, you up and leave. The
rest is not your responsibility. And for that, let's just
say the same in this example. For that you get paid,
let's just say forty thousand dollars, forty thousand dollars a
(25:40):
year as an employee that's checking in at a time
clock on an hourly job.
Speaker 2 (25:48):
Whether you get some benefits. Are you with me so far?
Speaker 1 (25:52):
Just nod your head and say yes, or hit the
like button if you're on a platform that allows you
to do that. In me A note, this is a
very important podcast episode where I really do benefit from
feedback from you, because I'm trying to explain something that
no one explains. It's actually fairly simple, but we've complicated it,
and as a result of that, we confused Americans and
(26:15):
people around the world about what they should be striving
for and what they should be striving against. Number three
form of capitalist and capitalism is a salaried employee. Now,
your boss has a right to call you at eight pm,
maybe even on the weekends, and you'd be smart to
answer the phone call. You don't have the right to say,
in this example, well my you know, forty hour week
(26:38):
is up. Because you're a salary employee, they can't abuse you, right,
they can't abuse the right. That's against the law. But
within a reason, a salaried employee is you know, ride
or die. They're there for when the need is so,
maybe as a worker you're paying twenty thousand dollars a year.
As an employee, you're being paid thirty five thirty thousand
dollars a year. As a salaried worker, maybe you're getting
(27:01):
paid fifty thousand, sixty thousand, seventy thousand dollars a year,
but you've got less freedom to walk away you're on
the hook more for leaning in with management and being
part of the special forces team. Is the lowest level
with a special forces team typically is that salaried employee.
You make more, you got less, so you're being val
(27:23):
you're human capitalist more value. Tend to be college educated.
At that salary level, you're not part of the American
middle class. So you make it between you know, I
don't know, fifty thousand, forty thousand, and let's just say
in this example, one hundred and fifty thousand, it's just
giving you a range. And you're a W two employee,
so you have more risks, so you get more reward.
(27:44):
As an employee, you have less risk and you get
less reward. The worker gets as the lowest level of
risk and gets the lowest level of reward. Corporate c
suite executives the highest level of a corporations chief executive
officer c chief financial officer. Trying to get debunk all
these terms so that you know, humanize them for you
(28:06):
no one to explain how this stuff works. C AO
Chief administrative officers, COO, chief operating officer, vice chairman, which
is typically lower level than the CEO but has gravitas
and typically vice chairmen typically are not full time positions.
But you have the chairman of the board. Then you've
(28:26):
got the board of directors and the chairman board. The
CEO is typically if it's a strong CEO on the
board of directors, so it's a CEO and board member
or president CEO maybe not on the board. Then you've
got these officers, right, secretary of the corporation, all that stuff.
All those people are corporate c suite leaders, the highest
level of a corporation, and they have the highest level
(28:47):
of risk, the most engagement. They work weekends, evenings, Christmas
Eve if the balls ass. They're the special forces team
at the highest level, and they get the highest compensation.
It goes from you know, low six figures, typically you
even have high five figures, but depending on the city
cost of living, low six figures up to literally millions
(29:10):
of dollars if it's a fortune five hundred company, but
typically it's high five figures of income to you know,
mid six figures is typically where most successful companies are
paying corporate c suite leaders. Then you have the sixth
level where you're really starting getting into real risk reward.
Now you've broken out of the company and the confines
(29:31):
and the safety of health insurance of somebody else, taking
on the debt, taking on the corporate risk, taking on
the liabilities, getting somebody else's getting sued, somebody else's brand,
somebody else's reputation, somebody else's you know, balance sheet income statement.
(29:54):
Now you've stepped out and you decided I'm going to
be a business woman or a businessman, and I want
the chance of the big ring. What's the difference between
a business person and an entrepreneur? Is there a difference, Yes,
there is, and people they mangle the two things together.
We used to mangle it together at Operation Hope. I
had to explain to my team you had to separate
(30:15):
these things. Yes, business training and entreprenship training are similar,
but they're not identical. A business owner business training is
somebody who has an established who's modeling what they're doing
on an established business plan. So think about a franchise,
Think about a mailbox, et cetera. Think about a McDonald's,
(30:36):
think about you know whatever. Pick the franchise you like.
Get that in your head now, A restaurant franchise, a
nail salon franchise, a hair salon franchise, a you know,
some kind of professional service. You're getting a professional service
franchise while it's coming up.
Speaker 2 (30:53):
Used to be called Kinko's. And I think even.
Speaker 1 (30:56):
FedEx stores are Federal Express stores are franchises in most places.
These are business plans, pre established. They've shown they work
car dealerships franchises that Okay, you follow this model in
nine times out of ten, maybe even ninety eight times
out of one hundred, you do this, you do that,
and you should succeed along the following lines. You put
(31:19):
this capital in, you put this energy in, you put
this time in. You lean against this established business plan,
you use this established brand, and as a result of that,
you should live a life that has more return than
a corporate C suite executive, the salary executive. It's an
employee or a worker. You're going to get more financial compensation,
more ultimate freedom. Really you're going to step in from
(31:42):
making money. They're building wealth if you're really good at
it as a business owner. But that's different than being
an entrepreneur because it's an established, existing business plan. It's
really important to me that you're with me of this
tick of the watch. So all these are forms of
capitalism you've gone from human capital to maybe financial capital
(32:04):
in the business owner, but you're still using capital, and
it's still capitalism because you're trading your talent and your
gifts and your energy for some form of remuneration. The
last form of capitalism is.
Speaker 2 (32:19):
What I do.
Speaker 1 (32:20):
Entrepreneurship. We are absolutely, unbelievably, undeniably crazy. We're nuttingess, we're
out of our minds. An entrepreneur is doing something that
hasn't been done before, creating value or value didn't exist.
May take two or three businesses, business ideas merging together
and create a whole new business idea. You know, Xerox
was a business, IBM was a business. Steve Jobs and
(32:45):
Bill Gates went in and looked at those businesses sort
of reimagined them through an entrepreneurial spurt of energy. They
created something called Microsoft and Apple, which were reimagination of
traditional businesses along new entrepreneurial lines and created helped to
create a whole new sectors. Bill Gates created Microsoft. I
(33:07):
actually know Bill Gates Microsoft. So it was taking the
big business of computers, macro computing, making it micro software.
That's what that means, micro Soft. I can't get in
his hand and tell you that's what he means. But
that's what that means. And that was the first time
anybody had done it. And then Steve Jobs took something
(33:28):
that would took up a whole room and was pretty boring,
a computer, and he made it personal. The first personal
computer I believed was Steve Jobs. But it is certainly
the first sexy computer. It's the first computer or our
phone or digital advice whatever. They had a sort of
energy and emotions and personality to it and creativity and style, right,
and so that was very entrepreneurial. So can you be
(33:51):
an entrepreneur and a businessman, Yes, you are a businesswoman. Absolutely,
I'm an entrepreneur and a businessman.
Speaker 2 (33:58):
Right.
Speaker 1 (33:59):
That's at the highighest level of risk reward. So I
take the highest level of risk of both human capital, reputation,
brand creating, using my own brand, my own reputation, my
own capital, really throwing the dice at some idea, leaning
into it, probably not getting paid, no existing business plan,
no guarantee this is going to work, may blow up
in my face. And entrepreneurs, I said, works eighteen hours
(34:21):
a day to keep from getting a job. Success is
going from failure to failure. Without loss of enthusiasm, old
a rounded through it. I'm going to get to it.
You know, life is ten percent what life does to you,
and not even saying how you choose to respond to it.
Speaker 2 (34:33):
I take no for vitamins that this.
Speaker 1 (34:35):
Is like crazy passionate, committed entrepreneurship right at the highest level,
and as a result of that, if it pays off,
you get a great return. Even I had a traditional
real estate business, the Promise Homes Company, which I grew
in a unique and different way. Doing well and doing
good was my approach, and it wasn't perfect, but it
(34:56):
really left communities better, left people better. When I was
when I owned the company from twenty seventeen to twenty
twenty one. When I sold it, I'm still a partner
in it, but I'm partnering was now called a joint venture.
I don't own it completely, I don't control it. I
can't just do as I like. I've got to talk
to a bunch of partners. I'll do business structures in
another podcast, explain different business structures to you so you
(35:20):
again demystify how all this stuff works, because there's no
shame in the game of not understanding how something works.
There's no. It's what you don't know that you don't
know that's killing you. But you think you know. My
job is to demystify this so you actually now know.
So I'm now explained that six forms of capitalism. As
a worker is an employee, there's a salary worker employee,
(35:43):
there's a corporate executive, there's a business owner, and there's
an entrepreneur. Can you be an entrepreneur, by the way,
and be in the nonprofit space, Yes, you can be
a social entrepreneur and you're getting a return on investment,
return your capital. That might be spiritual, right, you're just
going about it in an entrepreneurial way, but you're doing something,
(36:03):
creating something that didn't exist before.
Speaker 2 (36:05):
Same rules apply.
Speaker 1 (36:07):
And I found out I was an entrepreneur when I
was nine years old when a banker came to my
classroom and taught financial literacy to our classroom. And I says,
excuse me, sir, what do you do for a living
and how did you get rich legally? And he said,
I'm a banker and I finance entrepreneurs. And I said, sir,
what an entrepreneur is? What you're financing it? And it's
legal I'm going to be one. And I opened the dictionary.
(36:29):
Yes it wasn't a Google search back then, it was
a dictionary. And listened up to the dictionary Western's Dictionary
entrepreneur French word, build something out another and create value,
blah blah blah. And I was like, okay, whatever that is,
I'm doing that. And I said, you finance entrepreneurs, mister banker, Yes,
I do. Okay, then I'm going to make sure that
I qualify myself so you can finance me. And where
(36:52):
did the operation hope come from? Well, I said, I
now know what my example is going to be. What
I'm going to do and become an entrepreneur. And I
went to the licker store and told the liquor store
on he was selling the wrong kind of candy. He said,
go away, little boy, I've got a college degree. I said,
that's nice. I've got cavities. I'm telling you selling wrong
kind of candy. You should be a joint venture partner
with me. I can tell you how to sell some
real candy. He laughed at me. Well, I ended up
(37:15):
putting me out of the liquor store, out of the
candy business, because I was nine years old.
Speaker 2 (37:20):
I knew what I was talking about.
Speaker 1 (37:21):
And when I was ten years old, I put the
liquor stor out of candy business in Compland, California at
my home at one five five o two South Freeley
in Compland, California. So I knew that I was wanted
to be an entrepreneur way back when and I did
my first joint well, it was supposed to be a
joint venture. He didn't listen to me, so it was
really a market takeover by my new small business, all right.
(37:42):
And I was actually a worker for a short period
of time. I actually worked with him as an employee
to learn what he was doing how I was doing business.
I was so call that research and development R and D.
I worked for three weeks and quit once I realized
where his inventory came from, where he bought his product from.
With the wholesale was what he bought it for, what
the retail rate was, what he charged, what he marked
(38:04):
up to, what the profit margin was the difference between
the whostale rate and retail rate. And I went to
where he bought his product with an investor for my mother,
but she was my capital provider, my investor. She said,
life is tough. I'm not gonna give you money you're
gonna to I'll give you this forty dollars an investment.
You're going to pay it back with interest. That's a banker,
right backer. And I put links around the candy business.
(38:25):
I was at the bottom of the food chain is
a worker capitalism level one, and I was at the
and I was at almost at the top of the
food chain as a business owner capitalism number five. Because
because a candy house is actually an established business plan,
you can go to the internet search one a business
plan for candy houses now, or go to my Operation
Hope team at the One Me and Black Business Initiative
(38:47):
or our Hope and Side location and they'll help you
find and build a business plan for a candy house
or a buffler shop, or a nail salon or nursery
business or daycare, whatever it is you want to do.
So then I asked this banker, are there other bankers
like you in the world. He said, yes, they're probably
a million bankers in America. There were back then ten
(39:08):
thousand banks. I said, is your job to lend poor
people money?
Speaker 2 (39:12):
Yes? All you have to do is prove that you
can pay it back.
Speaker 1 (39:15):
I was like, and if I don't pay you back,
I don't get debt, because that's what happens with the
gangsters around the corner. You don't pay them back. He's like, no,
we just issue a notice of default. We impacked your credit.
Like okay, well, I'll take that deal all day and
all night. And this applies to everybody in the country. Yes,
now you know my passion and why I want to
raise credit scores to people so you're bank qualified. Lower
(39:37):
your debt level so you fit the debt to income ratios.
Increase your savings so the banker knows you have a
little cushion in case you run into hard times. Those
three things are the baselines for becoming bank qualified. And
I want to get an entire generation of young people
and struggling families and folks are too much of the
(39:57):
month at the end of their money to be able
to qualify for their dream teams. The bank says yes,
when right now they may say no because half of
black folks have a credit score below six twenty, not
poor people, everybody. And so you may think as racism.
It may just be your credit scores. Thinks may think
that maybe that your death income ratios are off my job.
I now know looking back at my childhood. I didn't
(40:18):
know it back then that at ten years old, I
both figured out what I was supposed to do.
Speaker 2 (40:22):
For a living and what I was going to do.
Speaker 1 (40:25):
Sixteen years later in founding Operation Hope, which is now
the largest financial literacy, coaching and empowerment organization in America
and probably even in the world. We have three hundred
offices across this country, a seventy million dollars operating budget,
four point five billion dollars invested through our partners in
underserved neighborhoods. The only nonprofit allowed to operate side of
a bank branch in US history, and we're killing it,
(40:46):
raising credit scores fifty to one hundred points, lowering debt
thirty eight hundred dollars in some cases, increasing savings two
thousand dollars, and making people bank qualified and giving them
their dignity back at scale. All that came from that
kid a school classroom, getting a financial literacy course in
home economics class, which doesn't exist anymore. I'm going to
solve that and change that in my lifetime as well.
(41:07):
By the way, the silver rights movement in the suites
not the streets. The colors now green, not black or white,
or red or blue.
Speaker 2 (41:14):
It's green.
Speaker 1 (41:15):
But today I wanted to explain to you the six forms,
the basic forms of capitalism. Are there more forms?
Speaker 2 (41:22):
Yes? Is there more structures? Yes?
Speaker 1 (41:24):
And I've got more episodes. Well, I'll break some of
this stuff down, but let me know that you got this,
that you understand what I'm saying. And figure out now,
have a conversation with your husband, wife, your son, your daughter,
your cousin, your partner, your friend. Which one of these
six are you? Which one of these six are people
you love? Do you want to be in appeinationship with
somebody who's a worker or an employee, a salary employee,
(41:44):
a corporate executive, a business owner, an entrepreneur. If you're
the higher you get on that scale, the less time
you're going to have for a traditional life. But the
more the higher you upon that scale, the more resources
and the opportunities you have to live a free life.
But you'll find as you get up that scale from
one to six, you get up that you know certainly
four or five six levels of capitalism U that your
(42:09):
balance of time will be out of balance. You will
always be fighting for time. Whereas you're a worker, you
may have all the time in the world, but you
also won't have any resources to do anything with that
time in the traditional sense, meaning financial resources. Okay, so
there you go, Love and Light yo yo, John Hope Bryant.
(42:37):
This is Money and Wealth on the Black Effect Network
at iHeartRadio. This is a fan question cast Underscore seven
three three three from Instagram. Cast East Underscore seven three
three three from Instagram. Ask when starting a business, what
are the steps you recommend to secure alan or investment?
Speaker 2 (42:58):
Love the question.
Speaker 1 (43:00):
I would suggest you go to Operation Hope, get a
Hope financial coach. We scholarship. You all in for free.
So you get Hope Light initially coaching and counseling. Calling
out of the blue. You tell them I sent you.
They'll give you Hope Classic, which will allow them to
go deeper. You can go into You can sign up
to one Million Black Business Initiative one MBB and get
(43:21):
business training, a business plan help. They'll help you develop
that and they'll help you put together a budget and
a financial statement, an income statement, a balance sheet. I'll
explain all those things on one of my podcast series,
Different Structures of a Business and the tools the bases
you need for a business. But once you have that
in place and ready to go to market, you may
(43:43):
if you're coming up from nothing like me, you may
need to have a non traditional approach. Now, ninety six
percent of all black businesses don't have an employee, which
means you don't have infrastructure, systems, books and records for
the business. You're really your business, but your more busyness
or a self employment. You have no employee except yourself.
So you may have to use your personal credit score
(44:06):
in order to secure a business loan or to use
a personal loan for a business purpose. When I was
coming up, I had to use credit cards. A Pep
Boys card was how I maintained my car, which I
drove around to do marketing and sales calls. The department
store credit cards back then it was Montgomery Wards, it
was Sears.
Speaker 2 (44:26):
May see things like that.
Speaker 1 (44:27):
The department store credit cards is where I bought business
clothes and business suits and business shoes that allowed me
to look presentable when I went to business presentations. I
had a credit card from all these different kinds of
companies because I didn't have traditional capital. Capital is both
debt and equity. So investment money you don't have to
(44:49):
pay back on a schedule is equity, and debt is
an investment in the form of a loan. You pay
back on a schedule with payments. Okay, I'm over answering
this question, but so you may have to use credit cards,
loans from families and friends. The more sophisticated version of
that today is a cloud sourcing platform that you can
(45:10):
use to you know, people are cloud sourcing all kinds
of things, cloud funding, funerals and cloud funding. You know
somebody going to college where you can cloud fund a
business investment opportunity, and of course the most traditional thing
is to put together a business plan and go get
a business loan, a small business loan SBA, a loan
(45:33):
from state government agencies, city government agencies like here in Atlanta.
You have invested Atlanta, which operational partners with, and you
can get a loan and sometimes a forgivable grant. Yes,
every now and then the government will is trying to
spur small business creation in your area and they will
give you a forgivable grant. I need to do it.
One of these podcasts that differentiates a nonprofit from a
(45:57):
for profit and explain that structure, which I just decided
to do at this very moment, and I'll also explain
the different types of corporations and all that stuff. But
leading back to the question, the top of the food
chain here is to be able to get a loan
from a bank and secured or unsecured line of credit
(46:18):
or a loan commercial loan that doesn't require a personal
guarantee because you've prepared such an incredible business. You have
a cash flow, you've got maybe you've been running a
business now for three to five years, and you've got
enough revenue from the business itself, and you've got three
employees and a retail place and making this up and
cash flow from dependable, reliable, consistent clients that the bank says,
(46:40):
we don't have to rely on the individual credit. We
can work on the we can rely now in the
business credit. The business is credit, and we'll make a
loan to the business. It doesn't require personal guarantee from
the individual. The way I started this answer was the
individual is the credit because they are a self employment project.
So those are some examples of how you can start
(47:02):
seeking financing for get a loan or investment for your business.
Those are not there all the examples. You can do
a private placement to try to raise money, which is
like a form of crowdsourcing, So look up the phrase
private placement, but to be very careful about how you
do that because you can run into securities violation the
SEC Securities and Exchange Commission if you don't do that
(47:23):
exactly right, and you're not getting folks who are qualified
to be investors in a private placement as investors, you
don't want to go get the proverbial little old lady
who can't afford to lose a thousand dollars, so you
don't want her investing in your project and she loses everything.
You have enough of those people and you didn't clarify
well what they're investing in, you could be breaking the
(47:44):
law and not know and end up with handcuffs on
and I don't mean from a jewelry store. All right,
A good question. I hope I answered it well. Kudos
to you.
Speaker 2 (47:55):
Cast Underscore seven three three three for critical Thinking. John O'Bryant.
Speaker 1 (47:59):
This is the Money and Wealth series on the Black
Effect Network at iHeart wherever you get your podcast, Tell
a Friend, Love and Light. Money and Wealth with John
(48:23):
O'Brien is a production of the Black Effect Podcast Network.
For more podcasts from the Black Effect Podcast Network, visit
the iHeartRadio app, Apple Podcasts, or wherever you listen to
your favorite shows.
Speaker 2 (50:00):
The tapp
Host
John Hope Bryant
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