“How important is your education in terms of your success?” asks Stefan Aarnio on his show, Respect the Grind.[Here’s a rough transcript of the entire show]
Stefan Aarnio: Ladies and gentleman, welcome to the show, Respect the Grind with Stefan Aarnio. This is the show where we interview people who have achieved mastery and freedom for discipline. We interview entrepreneurs, athletes, authors, artists, real estate investors, anyone who’s achieved mastery and examine what it took to get there. Today on the show, we have a friend of mine, Bruce Firestone, and he’s well known as the founder of the Ottawa senators and a very successful real estate investor. Bruce, welcome to the show. Respect the Grind. Thanks so much for joining me.
Bruce Firestone: I have total respect for you and also for the grind and I can tell you life, professional life is a grind.
Stefan Aarnio: I love that you, yeah man, you’ve got to respect the grind, now Bruce-
Bruce Firestone: You got to show up every day for work. You know, it’s not a complicated formula. You want to be successful? Show up. Who Was it, who’s our great Canadian basketball player? MVP. Was it Steve Nash out of Vancouver and Steve Nash, the definition of a professional is the day after you play the greatest game of your life, you get up and go to practice.
Stefan Aarnio: Oh, I’m given that a gong. One gong right out gates. Oh my God.
Bruce Firestone: Right out of the gate.
Stefan Aarnio: Bruce, I don’t know man. This could be a six gong show, man.
Bruce Firestone: I know about that, it’s not the gong show. I’ve been on the gone on the Gong show.
Stefan Aarnio: Yeah, well the gong show that’s where they gong you and you get off.
Bruce Firestone: That’s what they call the NHL. You know, do you know what the-
Stefan Aarnio: Oh, two gongs.
Bruce Firestone: No, no, don’t do that. Do you know that the second happiest business day of your life Stefan, is the day you buy an NHL team. You know what the happiest day of your business life is?
Stefan Aarnio: The day you sell it I’m sure.
Bruce Firestone: The say you sell it. Yeah. If you want to get poor, let me tell all your listeners. Here’s a simple formula, number one, get divorced, number two, buy a horse ranch, number three, buy an NHL team and [inaudible 00:01:56] like the current owner of the [inaudible 00:01:59] has done all three.
Stefan Aarnio: Oh, damn. Three gongs right out the gates.
Bruce Firestone: [crosstalk 00:02:03].
Stefan Aarnio: This is like standup comedy, man.
Bruce Firestone: Yeah, it is.
Stefan Aarnio: So Bruce, great, great opening man. So for the people at home who don’t know Bruce firestone, tell us a little about you and how’d you get started with all this stuff?
Bruce Firestone: Well, I don’t want to get my life history, but I’ll start somewhere-
Stefan Aarnio: Don’t start at the sperm and the egg. Let’s start a little bit after that.
Bruce Firestone: [crosstalk 00:02:26], no I won’t do that, but I went to University of [inaudible 00:02:31] and I graduated, I was 19 and I applied when I was 14. I went when I was 15 and I graduated at 19 and I couldn’t find a job in Canada because the age of majority back then was 21 and you had to be 21. If you were 19 or 20 years old, as I was as young civil engineer, you couldn’t get a job because you were considered a child, right? I didn’t consider myself a child and I’m sure none of your listeners are thinking of themselves at 18 or 19 as a child, but back then you were considered legally a child. So, I couldn’t get a job and Australia who just elected their first Labor government under prime minister by the name of Golf Whitlam. And, he did two things. He reduced the age of majority in Australia from 21 to 18 and he brought Ozzie troops out of Vietnam, and so I looked around the world and I said, wow, I guess I could get a job in Australia and it wouldn’t be sent to die in the jungles of Vietnam, either.
Bruce Firestone: And, so a three and a half weeks later, my girlfriend and I, we landed in Sydney, Australia and I lived there for many years and I got myself a master’s degree in engineering science and then I did a PHD at the Australian National University and then my dad calls me up and he says, I want to come visit it, and it comes down to visit me. I was in Canberra, that’s the capital of Australia at the time. And, he tells me his business has gotten into trouble. I said, “You’re business has gotten into trouble dad?”, he said, “Yeah, I just need your help back in Canada for six months”, because I was on the tenure track to be a professor, right? So he says, “Come back to Ottawa, give me a hand for six months”, and that was 1983 and I’ve been here ever since, so six months turned into over 30 years. And, when I came back, this is a true story. When I came back I found out my dad, who was a very smart man, but he and his partners had invested in something called roller disco rinks. I don’t know if you know what that is?
Stefan Aarnio: Oh, we used to have that, when I was in third grade, we’d go to them.
Bruce Firestone: Okay. Yeah. Okay. Well, long time ago now, but I didn’t think you were old enough to remember that anyway, so I didn’t know what roller disco was, so I went to visit these roller disco rinks, and put on roller skates like everybody else and you skate around in one direction with all the disco lakes and Donna Summer playing, and then they stop the music and you have to skate in the other direction. It was incredibly boring. And, so I went to my dad, I said, “I don’t really know if I like this business very much. And he said, “Well, you know, my partner says it’s a cash cow”. So, I went to see the partner and I said to the partner, “How about this, we have six or eight of these places, all in these warehouses, why don’t we trade, why don’t I trade of my dad’s half interest in the operating company for your half interest in the real estate and we’ll keep the real estate, and you’ll keep the operating company”.
Bruce Firestone: And, the guys there, they were quite a bit older than me. They said, “We’d be taken advantage of you. This is a cash cow of a business. It’s a fantastic business, and you’d be missing out on all the cash. I said, “It’s okay. Take advantage of me”. So, they did. And, we ended up with 100% ownership, the real estate, they ended up with 100% ownership of the company. Now, 20 months later, the roller disco craze died. They went bankrupt and I ended up with six a warehouses that I had to recondition, repurpose, I guess for what was then an emerging tech company scene, and they all wanted these one level sort of a open spaces, so our timing was fortuitous. It was a bit of luck, I think we were off to the races at that point.
Stefan Aarnio: Wow. I love that story. The house always wins, the gamblers, they think that they can win on roller disco.
Bruce Firestone: Yeah. Well, I’ve tried other things, too, Stefan, I’ve been hockey guy, I’ve been a professor, I’ve been a real estate guy. I’m a real estate broker and real estate investment and business coach now. I’ve tried all kinds of different things, in different finances. I started Ottawa Business News, now called Ottawa Business Journal and the only thing that really worked for me and my family was real estate, so I kind of stick to that now.
Stefan Aarnio: That’s smart. Now, Bruce, one thing I noticed about you, you’re a very highly educated guy, highly intelligent guy. How important is your education to your success these days?
Bruce Firestone: That’s a really good question, especially these days, there are a VC’s that’ll pay you to drop out of college.
Stefan Aarnio: Wow.
Bruce Firestone: Right. People say, look, skip college, skip your four years of university. So, I don’t really know the answer to that and it’s a very complex equation. I had five kids, I have three girls and two boys and I obviously wanted them to get a good education, but at the same time I do recognize that university and college is not for everyone. As a coach today, I have over 350 people that I coach and now put them through the program, and I’ve got some people who barely, in fact, some haven’t finished high school who have been very successful, and I’ve got some people who have PhD’s who are not very successful. So, I can’t really answer that. For me personally, being able to write coherently and to teach and to mentor, it has helped me, but I’m not sure it helps everybody.
Stefan Aarnio: So, what do you think, this is just getting into the coaching space now. What do you think makes someone succeed at real estate or something you’re coaching them in, and what do you think makes them fail?
Bruce Firestone: Well, I think one of the biggest problems that I see, especially amongst the men that I coach, is there always, or seem to be always looking for a shortcut and the only shortcut I think there is out there is the shortcut to failure.
Stefan Aarnio: You’re getting the gong.
Bruce Firestone: Oh my gosh, you’re way to kind, really, I mean-
Stefan Aarnio: This might be an eight gong show, Bruce.
Bruce Firestone: I don’t know about that, but Stefan really, I’m not kidding. About 40% of my clients are female and about 60% are male. And, when I started this coaching thing, after I retired from the University of Ottawa, I thought it would be 90% male, 10% female, but a lot of women, and quite young, very young women in their twenties, thirties and forties, they have come to me about real estate investment and business coaching because they’ve realized that by the time they’re in their fifties or sixties, certainly seventies and eighties, they’re on their own. Like if I were to take you to a retirement residence in Winnipeg or in Ottawa for that matter, Long Beach, California, and there’s 135 rooms there.
Bruce Firestone: I’ll bet you 128 of them are women and seven are men and because all woman are [inaudible 00:08:47], sorry to break the news, but yeah, and so women have come to a conclusion that they really, really need to take care of themselves and their children and their grandchildren and they’re really interested in the kind of coaching that I do. So, 40% of my coaching clients are female and I super enjoy that and women tend to be maybe a bit more detail oriented and they tend to be a little bit more cautious.The men are all looking for shortcuts, I mean they come to me and they say, “Can you teach me how to get rich quick, Bruce?”, I go, “I’m so glad you asked that question. I’m not coaching you”, because if I knew how to do that, I would do it for myself and respect the grind. I mean, I love the title of your show and it’s showing up every day and answering your phone and answer your texts and emails and your messaging and paying attention to detail, and it’s a grind.
Stefan Aarnio: Oh, totally man. I love what you said there about, you’ve got so many female students, it’s probably because of your sex appeal. You’re so handsome.
Bruce Firestone: No, at 66, like I said, that’s yeah, maybe at 40. [crosstalk 00:09:47]. And, one thing about coaching people, anybody, male or female, the big, big thing is trust because you’re a coach and I’m a coach and you have folks really in your hands and you can certainly lead them astray if you wanted to. And so for me, the number one thing in life is trust, and when I was a prof, I used to ask my 22 year olds or 21 year olds in my class, what do you think the most important thing in life is? And, pretty much all of them would say love. I mean we had 21, 22, that’s a perfectly natural thing to be thinking about, but then I would ask them. I’d say, “Well, hold on a second you guys. I think it’s trust”. If you have a girlfriend who’s fooling around behind your back with your best friend or a boyfriend or a partner, what kind of relationship is it?
Stefan Aarnio: [crosstalk 00:10:32] first, then you have a threesome. If it’s your best friend [crosstalk 00:10:36]-
Bruce Firestone: No, no. That’s you, not me.
Stefan Aarnio: [crosstalk 00:10:37]-
Bruce Firestone: I would say to them, by the time they’re 21 or 22, maybe some of them have had that experience, right, it’s not a good experience. And, they kind of go, oh, yeah. So you know, I work with people I like and trust and I will do almost anything to get people I don’t like and don’t trust out of my life.
Stefan Aarnio: Wow. Wow. That’s, you know what? I want to give that a gong. Damn. Now let’s talk about that. How do you get people you don’t like, don’t trust on your life?
Bruce Firestone: Well, you know, I’ll give you an example. A long time ago, my wife had a partner in a small restaurant and the partnership wasn’t working and I went to see him, and I’ll call him Bill. That’s not his real name, but I’ll call him bill. And I said, “Bill, I’ll tell you what, I’ll make you an offer. We’ll buy your half of this restaurant for $50 000 even though it’s probably worth nothing, or we’ll give you our half of the restaurant for nothing”. So, it was a shotgun clause where we’ll buy you out for $50 000, or you can buy us out and we’ll give it to you for, [inaudible 00:11:44], right? [inaudible 00:11:45]. And, so I will precipitate an end to a bad partnership in just about any way, any legal way that you can imagine.
Stefan Aarnio: Oh, that’s going to be your next book. Ending it in any legal way you can imagine.
Bruce Firestone: No. I’ve been very fortunate. I’ve had very little litigation and really good partnerships, but there’ve been a few bad ones and it all comes back to trust.
Stefan Aarnio: So Bruce, you said you got 300 and something coaching students. There’s a lot of people listening to this show. They want to be in real estate. They maybe want to be a coach themselves. They want to be a speaker. They want to be an author. You’re all of the above. How does Bruce Firestone end up with 300 something coaching clients because that’s very impressive in these days. How do you find your clients? How do people know about Bruce Firestone?
Bruce Firestone: Well, that’s a great question. I’m doing kind of a webinar like this, or a podcast like this for ICF, the International Coaching Federation. I think that’s in December of this year, 2018. And, they’ve asked me that question as well. I started coaching after I retired from the university. I was 60 or 61 and I’m 66 now. And, I think the feeling that people get from me is one of commitment and intense, intense caring. Like, I find the coaching is very gratifying. I say, I’m having so much fun as a real estate investment and business coaching, it really should be illegal, because most things that are fun tend to be maybe a little illegal. Although, I think, yeah, we can smoke weed now legally, right?
Stefan Aarnio: Yeah, I think so, man.
Bruce Firestone: I think that’s been adjusted, right? But anyway, with all seriousness, people realize I’m really intense about what I do, really committed to it. It’s not a hobby, it’s a real business. So, that would be the first thing. And, then the second thing is acquiring clients, it has been fairly, I don’t want to say easy, but fairly direct anyway, I’m coaching coaches now to do exactly this. And, so we’re doing a lot of free webinars where we invite people to come on and learn about how they can protect themselves, and their families for three generations by investing in real estate and how they can have what I call a PB4L, a personal business for life. Those are the two things that I specialize in and I focus on. I just don’t really believe in having a job. You don’t know what job stands for, journey of the broke-
Stefan Aarnio: Oh, man. Just over broke, just over broke, making just enough.
Bruce Firestone: Yeah, the opinion just enough so that you can hang in there, but a lot of people don’t have pension plans. The average Canada pension plan payout in 2016 was $550 a month. Today it’s around $555 a month, so it’s gone up a little bit. And, in the United States social security is a little bit higher, about $1200, $1300 a month, but it’s hard to live on $500 or $600 a month or for that matter, $1200 or $1300 a month. So, people really get that, and when I tell them that, 61 out of the 100 richest families in Canada have all or substantially all of their wealth invested in real estate. That tends to kind of ring true to people. Every neutral fund salesman that has ever talked to you or me and said, look, don’t worry man. I’ll get to eight, 10, 12% over the next five, 10 years. You’re going to be really pleased with this.
Bruce Firestone: And, then you look back after five years or 10 years and you’ve had returns of one or two, maybe three% percent. And in my case, between 1995 and 1999 the CIVC private bank, with a million dollars of my money managed to turn a million dollars of cash in the greatest stock market boom since the 19th century, they managed to turn a million dollars into about $920 000 in five year. A monkey throwing darts at a board. Yeah, and CIB, out of the top step, out of the top thousand mutual funds in Canada in that period of time, I had four of the bottom 10 all belonging to CIVC. So, in the year 2000 before the stock market crashed, I called off my private banker there and I said, “You know what, I’d really like to have my money back,” and he says, “Well, in the next five years we’re going to do better, story about losing two percent a year”, and I said, you know, there are only certain number of five or 10 year periods in your life. Let’s say Stefan, your career last 50 years, right?
Bruce Firestone: You’ve only got five 10’s in 50, so if you spend one 10 year period losing money, you’ve only got four more and then when you get to be 60 or 70 years of age you’re kind of running out of runway. So, that really reverberates. So, when you bring that kind of a message to free webinars, it isn’t very long before people say I’d like to have some life changing coaching from Prof Bruce or somebody that I’ve trained, and so that’s been kind of the main method that we’ve used. And, then what happens, and you already know this, when you get to 100 or 120 people that you’ve coached, word kind of spreads and I have a waiting list for coaching of about 140, 150 names and just as I’m at the stage where I can only do so much, and so right now Stefan, what I’m doing is I’ve developed a course where I’m teaching people to be Firestone institute coaches. So, otherwise, when I pass away everything I’ve worked on will kind of go with me and I’ve got to try and maybe get two or 300 co-coaches across North America, maybe overseas as well, who kind of believe what I do and are trained by me and they can carry it on.
Stefan Aarnio: Wow, that’s tremendous.
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Stefan Aarnio: Now, Bruce, the one thing that I guess everybody at home is wandering when they’re listening to you is, you’re the founder of the Ottawa Senators, NHL Hockey team in Canada where we’re living. I’m in Winnipeg, you’re in Ottawa. NHL is a religion. I want to hear the story about how you founded that hockey team and you said it’s a great way to lose money. I want to know about that, too.
Bruce Firestone: Well, I was being maybe a little facetious, but sure, I’ll tell the story. It’s a well known story in 1983 when I came back to Canada from Australia and found that my dad had invested in roller discos, the company was pretty small, but between 1983 and 1992, we grew that company from a low seven figure number to about $120 million in sales, and I’m mainly focused on real estate and one of the things that I thought of in the early nineties was that the national hockey league was thinking about expanding, and they hadn’t, every 20 years or so they tend to expand. And, I called two of my key guys, Cyril Leader who then became the president of the honorable senators, and Randy Sexton, who’s now scouting with another NHL team. I called them together, actually after we had a pickup hockey game at a local arena and I said, “Guys, I think the NHL is ready to expand again”, and they said, “Oh, that’s interesting”, and I think Ottawa and Gatineau, which was the little city across the border from us in Quebec, I think Ottawa again, it’s now big enough to support [inaudible 00:19:16], that’s interesting.
Bruce Firestone: And, they said, “Hey look, that’s great. So?”, and I said, “So, I think we should be the bidder”, and Randy Sexton who an MBA from Clarkson in the states and a real gung ho kind of guy said, “Yeah, let’s do it”, and sort of Cyril Leader who is a CA and a little bit more cautious of how much is it going to cost. And so I said, “I don’t really know. I don’t think anyone knows”, and we guessed around $35 million US dollars, which was what an NBA team was going for at that time. And, the actual inspection fee in the early nineties was 50 million US dollars. So, what we did was we bought 600 acres of land, and the concept was really simple. Let’s take an NHL expansion franchise, in an NHL caliber arena, put it in the middle of 600 acres. Use about 100 acres for the actual arena and stadium itself, and drive the value of the [inaudible 00:20:09] property up, pretty simple, and sell the extra land.
Bruce Firestone: And, it sort of worked in the sense that we bought the 600 acres of land in the west end of Ottawa for $7.2 million, which is $12 000 an acre. And, today here we are 25 years later, it’s trading for about $830 000 an acre of half a billion dollars. So, we had a good concept and a good plan and I thought that worked, and I’m going to tell you a little story involving Winnipeg, if that’s okay.
Stefan Aarnio: Oh, Bruce, sorry, I lost you there. One more time.
Bruce Firestone: I’m going to tell you a little story about Winnipeg if that’s okay.
Stefan Aarnio: Yeah. Please tell us about Winnipeg.
Bruce Firestone: Okay. So, part of my plan to bring back a national hockey league team to Ottawa was to go and visit all the NHL owners. I knew a few of them. I knew Arts or Griffiths and Frank Griffiths out in Vancouver and I knew Bill Wurtz in Chicago and a few other owners, and that was helpful, but I visited every single owner in the national hockey league sometimes three or four times to say all kinds of nice things about Ottawa and tell them all kinds of lies about myself. And, I remember, I don’t know if you know the name Barry Shankara?
Stefan Aarnio: I don’t know the name.
Bruce Firestone: So, Barry was the owner of the Winnipeg Jets, and I went out to visit a Barry and watch the Winnipeg Jets and introduce myself and tell him nice things about the Ottawa and myself and our company and why they should expand and grant a franchise to Ottawa. And, Barry turns to me says, “Bruce, do you want a new one or a used one?”, and what he was saying, was do you want an expansion franchise or do you want to by the Winnipeg Jets and move them, because Winnipeg, I think was losing a fair amount of money then. And, of course Winnipeg did eventually lose its steam for a while. And, I said to Barry, “I absolutely do not want an existing franchise”, I did Not want to take a franchise from a group of fans and move it to Ottawa, I said, “I want to start with a negative brand”, and that to me is a negative brand.
Bruce Firestone: And, I to this day, Gary Bettman and I are on the same page as far as that is concerned and that is these franchises should not be on wheels. They should not be moved unless there’s absolutely no other possibility, because again, an expansion franchise, look what happened in Las Vegas, how, what a fantastic story that was last year as they went to the Stanley Cup final in their first year. It’s an amazing story. Unprecedented, I think, but it’s a new franchise and it belongs to the Vegas and the fans there. And, same thing that the auto centers had a very, very intense love affair with its fans. It would have been completely different had we relocated the jets.
Stefan Aarnio: Right, right. And you know, it’s ironic because the Jets we’re in the final four last year and Vegas had for manitobans on their rosters. So, bunch of [crosstalk 00:22:58] coming to play in Winnipeg. Real, real crazy-
Bruce Firestone: Traitors.
Stefan Aarnio: Traitors, there you go. So, I loved the scheme, you get 600 acres, you’re going to put an NHL franchise in the middle, it’s going to drive the value of the land. So, how’d that project end up going, was a successful, did it work?
Bruce Firestone: Well, we had a fair degree of success, and I’m big on self capitalization and bootstrap financing, it’s something that I’ve really spent a good part of my career dealing with, and that applies to almost everything. It can apply to real estate. It can apply to hockey teams, you name it. And, to finance a $50 million acquisition hockey team, to finance, a seven, eight million dollar piece of land, to finance $240 million stadium. I really believe in self capitalization. So, we became really good at sponsorship and signage, and selling things like media rights, and product rights, like beer, pouring rights and stuff like that. We raised a lot of money, but the one that I guess I’m kind of most proud of was before the team, before the senators were actually even granted a franchise or expansion franchise, we sold 15 000 PRN’s, priority registration numbers, that people actually paid money for. They got a bumper sticker, Bring Back the Centers, where they actually paid money for that. And we sold 15 000 rights to get a season ticket to a team that didn’t exist.
Stefan Aarnio: Wow. That’s money. You’re printing money. Bruce Firestone printed money over here. Now, Bruce, one thing I want to hear about is you mentioned, you started out with a couple of warehouses that you bought out, I guess, you got out of these roller rinks or whatever. And, then you said, you’re a low seven figure company. Grew to 121 million. What’s in the middle there, man? That’s some magic in the middle.
Bruce Firestone: Yeah. Well, there is some luck involved, and I picked it up, for example, a shopping plaza early on in my career right there in 1983, I think it was. And, it was five older folks, older being kind of the age I’m at now, which I thought was really old, and to them, they had rented that Plaza to one tenant for 25 years. And, it was a large a food company, like a Loblaw or Sobie’s or something like that. And, for 25 years, those guys had rented it to that company for a $1.65 per square foot, triple net. So, that’s how you look at commercial leasing.
Bruce Firestone: $1.65 per square foot is a very low number, and they were coming to the end, they were in the 25th year of a 25 year lease. And, to the older fellows who owned that Plaza, they thought that was a huge issue, a big problem because it was going to be 100% vacant if they couldn’t renew it. So, I went to them and I said, “Look, I’ll buy it from you, what do you want for it?”, and they named a number and I thought that was very fair. So, I bought that. And what I did, I went to see the food company and I said, “So, your lease is up in a few months, would you like to renew?”, yes, we would. So I said, “I want a $3.50 a square foot”. And they said, “Well, who are you to talk to us? We’re a big company. You’re just, who are you?”, I said, “I’m the new owner”, and [crosstalk 00:26:22]-
Stefan Aarnio: That’s the gong right there. I’m the owner, baby.
Bruce Firestone: I am the new owner, right? I’m CEO bitch, isn’t that how it goes?
Stefan Aarnio: That’s Mark Zuckerberg right there.
Bruce Firestone: Yeah, that’s Mark’s card, right. At least in the early days. And, so I said, “I’m the new owner and this is commercial leasing, it’s not like residential, there’s no over-holding permissions”. So, I said, “If we don’t come to an agreement, you’re done”. Well you can’t talk to us like that. That’s just the fact. And, so they offered me after paying $1.65 [inaudible 00:26:53], they offered me $1.85, a 20 cent increase over 25 years. I said, “No, that’s not gonna work. You’re done”. So, they vacated, and what I did was I called up a local architect, his name was Barry [inaudible 00:27:01], he was a young guy then, quite famous now, and I said Barry, I got this plaza, I don’t know what to do. So, we put some lipstick on it, we put a new canopy on it and we divided it up into smaller spaces, and I rented it out for an average of about $8.50 cents a square foot. So, in commercial real estate, when you go from $1.65 square foot to eight or $9, your value just multiplies by that amount.
Stefan Aarnio: Wow. Damn, it feels good to be a gangster. Bruce Firestone, the gangster coming in.
Bruce Firestone: [crosstalk 00:27:33].
Stefan Aarnio: I’m the boss, man, that’s gangster. Okay. So, tell me about that.
Bruce Firestone: So, then what happened was, the following year after we had renovated it and their income just went through the roof. After that, I got an offer for, millions of dollars to buy that thing from me, and I sold it. Now, I have to tell you that if I would go back in time and talk to that young Bruce Firestone, I wouldn’t have sold it. What I would’ve done is I would have followed the Warren Buffett method, but applied to real estate. Warren Buffet, what he did when he came back from the Korean War as a young marine was he invested in the stock market in his system was really simple, buying really good quality brands. The stock goes up in value. It pays dividends.
Bruce Firestone: You use the dividends to pay down the debt that you used to acquire those stocks, the difference widens over time, you refinance, you pull money out tax free, you rinse and repeat. That has made Warren Buffet the richest investor, I think, or at least one of the richest investors on this planet, and so what we do is today, we apply exactly the same methodology to real estate. You buy good quality real estate in good locations. You animate it, you add value to it like I did with that plaza, you drive its value up. You drive the debt down, you refinance, you take money out, tax free, you rinse and repeat, right, and build a big empire, but back in those days, I didn’t know that. So, I sold it and I use those a few million anyway to do some other things.
Stefan Aarnio: Wow. Bruce, I love the lesson, the Warren Buffett lesson.
Bruce Firestone: Yeah, there you go.
Stefan Aarnio: And you know, I think another great story, I don’t know if you’ve read Donald Trump’s art of the deal.
Bruce Firestone: Oh, yeah.
Stefan Aarnio: Trump doesn’t own the land under Trump Tower, some barons in Germany owns it and in New York and Manhattan, all that land is owned by German barons from like the 1600’s.
Bruce Firestone: I couldn’t have put it any better, but the Trump Family does own the land under 40 Wall Street.
Stefan Aarnio: Oh, well they got that for a million bucks. I mean, that’s a crazy thing.
Bruce Firestone: Yeah, and it’s one of their most valuable assets today. And, they have a long term land lease with the building owner, but they own the land.
Stefan Aarnio: Yeah. And, that’s the thing. I love what you said, the high value land holding onto that. And then, I guess it’s almost like Monopoly. I’ve recently in my own real estate game, I’ve selected one neighborhood, I got one little neighborhood. All my focus is going this one neighborhood, and the plan is never sell. Never sell. [crosstalk 00:29:53]-
Bruce Firestone: Attaboy. That’s exactly right. And, you know what? You can take care of yourself and your family when you have a family Stefan, for three generations. And, the Europeans who have been doing this for a long time, like the Duke of Westminster, they’re on the seventh duke, he’s like in his twenties, he’s super good looking and he’s worth about 14 or 15 Billion British pounds, but that’s exactly what they’ve been doing.
Stefan Aarnio: Wow. The never sell. Now you said another thing inside of what you said there that I love and that was Warren Buffet buys great brands.
Bruce Firestone: There you go.
Stefan Aarnio: I want to ask you this, Bruce, what are the things more important? Having a great business or having a great brand?
Bruce Firestone: Well, you can’t have a great business without a great brand.
Stefan Aarnio: Oh man, he’s just, he’s just hitting it every day. Tell me about that Bruce.
Bruce Firestone: As a civil engineer, I was not a convert to the importance of branding for a lot of years. I didn’t realize or recognize the importance of branding and I would ask, marketing gurus, people who really know the marketing business, why is brand important and do you know what they say, a brand is important because it’s important. It’s obviously important. And, that’s kind of like Shakespeare’s a rose is a rose. It doesn’t really, for an engineer like me-
Stefan Aarnio: [crosstalk 00:31:06] Aristotle, it’s tautology, this is true because it’s true.
Bruce Firestone: Yeah. And, I get that when you define consciousness, the only way to know your conscious is to be conscious, but for a marketing guy, and I asked a lot of them for like a decade and a half and then I finally figured it out myself. Here’s what happened. You do some marketing for your coaching practice to them, and that builds the brand. The missing link is the brand builds trust, and trust gives you an opportunity to sell. You ever bought something from somebody you don’t like and don’t trust, probably, but maybe only once. And, so the missing link there is the trust factor, which, you’ll hear me talking about that over and over again. Branding builds trust, trust creates the opportunity to sell. When I sell people on Prof Bruce coaching or becoming a Prof Bruce co-coach, it’s fairly easy for me if they already like and trust me, I hope they can trust me. So, branding is really important and you cannot have a great business without a great brand. And you know, the one thing that really frustrates me about real estate is that most real estate investors don’t get that, you go to their rental properties and there’s garbage in the front and the weeds are growing. The grass hasn’t been cut, they don’t have uniform blinds, some kids have their maple leaf and other kids has the cannabis leaf up, and some have [crosstalk 00:32:28]-
Stefan Aarnio: [crosstalk 00:32:29].
Bruce Firestone: And, it looks like heck, and I said, “That’s your brand”, and the other thing that frustrates me about real estate investors, many of them, is that they spend more time with their dog than they do what their real estate investments.
Stefan Aarnio: We got to hear more about that. Bruce, I got to pull on that coconut off the coconut tree. Tell me about that, man.
Bruce Firestone: Well, I’ll tell you where it’s going. Let’s say, Stefan, you had a nice house in Winnipeg that you bought for $400 000, and that’s of the cost of a Ferrari, so if you had a Ferrari, I have an old Saab, but if you had a Ferrari in your parking lot or your driveway, would you lend it to anybody? Would you lend it to somebody who decided they were going to put their cigarettes out on the dashboard and cut up the back seat, and put dings in it, no you wouldn’t. You wouldn’t be out there polishing and every weekend and he’d be taking care of it in the snow and winter, you’d be putting it away, you’d be protecting it. And, I talked to the people I coach and I give an example. I have a really nice town house in Ottawa that I rent to a lovely couple out of Toronto and that moved to Ottawa two years, they pay about $2500 a month in rent and in two years that’s a less close to $60000 in rent they’ve paid us, at the end of the second year of the. The Lady House called me. She didn’t call the property manager. She called me, and said there are ants in my kitchen and I said, “Oh, that’s terrible”, I said, “Listen, I’ll tell you what I’ll do.
Bruce Firestone: I’ll go to crappy tire and I’ll pick up a six ant traps for five bucks, and I’ll put them in a plastic bag. I’ll drop them off and hang them on your door. Just put them in the kitchen, that will be the end of the ants”. And, my wife turns to me and said, “Bruce, why are you doing that? Why can’t as property manager do that? Why can’t she do that?”, and said, Dawn, I love my wife dearly, but I said Dawn, these people had been kind enough to give us $60 000 over the last two years. I can spend 20 minutes picking up a few ant traps and delivering them, I don’t mind, it’s customer service. It’s going out of my way, and there’s almost no other business that you can be in where you can get $60 000 out of somebody and you get one call in two years, they’re fantastic people and I have a hard time explaining to real estate investors, look, you should be spending at least as much time on your $500 or $400 000 property as you do on your Lamborghini or Ferrari or for that matter, your German shepherd.
Stefan Aarnio: Wow.
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Stefan Aarnio: Bruce, this leads me into my next question with you. What is your obsession? Everybody I meet on this show has, they’re very successful. They have some sort of obsession. They think about it all day, every day. They wake up in the morning, they’re thinking about it, they’re go to bed at night, they’re thinking about it, what’s Bruce Firestone’s obsession?
Bruce Firestone: Well, obviously I am quite in love with my wife of 33 years. I am. I think about her all the time. She’s an unbelievable partner because my life, like many other entrepreneurs has not just been ups, there have been some downs too, I would be lying to your listeners if I said it was all ups and it isn’t, so certainly one of them is my wife’s and my five kids and my two grandkids. The other obsession for me beyond the coaching that I do is trying to help people understand that business is really not that complicated. If you have a good business model, if you provide good customer service, if you have a great brand. If you pay attention to detail, if you continue to be focused over a long period of time, you’re bound to have success and you need to narrow your focus is Malcolm Gladwell would say, it takes at least 10 000 hours to become proficient as a coach, as a podcast or whatever.
Bruce Firestone: That’s really important and I’m really passionate about that, and especially about business models. I had pushed the ball up the hill and down the other side in terms of real estate business models. I used to do lots with technology companies, but now it’s probably 80 or 90% real estate in 10 or 20% everything else and most people think the only real estate business model is buying a few residential properties and renting them out, or flipping houses, or whatever, but there are probably 40 or 50, maybe even 60 really fantastic real estate business loss that can be billion dollar companies and there’s one right there in Winnipeg where you are showing up there, Sean [Obear 00:37:28], I think I’ve mentioned him to you before. He lives in Winnipeg, he’s one of the young people I’ve coached, he runs a company called tire chalet, and tire chalet, again, the business proposition is really simple. He owns a company called Total Storage and what they do is they store winter tires in summer, and summer tires in winter, it’s a fabulous business and he can expand that throughout Canada and anywhere where there’s snow.
Stefan Aarnio: Wow. I love it, Bruce, I love what would you said about the 50 business models, I’ve almost got to have you back on the show just to talk about 50 real estate business models because that’s some pretty kick ass stuff and you’re right, most people they get obsessed with buy, fix, sell or buy, fix, hold, or buy and hold or whatever, and [crosstalk 00:38:10]-
Bruce Firestone: Yeah, but let me just give you an example of something, let me give you an example if you don’t mind, I’m sorry, I don’t mean to steal your show, but let me give you an example of something that has just absolutely taken off on us in Ottawa, and I’m sure it would work just as well in Winnipeg, I had clients in Winnipeg, I had clients in Saskatoon. [inaudible 00:38:26], believe it or not, Abbott’s for BC Duncan, Scottsdale, Arizona and other places, and we’ve been experimenting with this model and it’s been a phenomenal success and that is just putting workshops into the backyards of people, real estate investment properties. Today, almost everybody has a side gig.
Bruce Firestone: I don’t care if you’re a government worker working for the Manitoba government, provincial government or the municipal government, almost everybody, whether they’re 25 or 20 years of age, or they’re 65 years of age, or even 75. They all have side gigs, so we’ve been building and putting workshops in the backyard and renting them out and it’s been a dramatic success. Those are the kinds of ideas that maybe weren’t being applied to real estate. Another thing that we’ve been doing, and I think I did mention to you when you were here in Ottawa, is we’ve had a lot of success in the apartments that we manage with tech packages. We put multimedia packages into these apartments, so the moment a tenant moves in, the Internet is on, wifi works. Netflix is there, Spotify is there, Magic Jack phones are there. It’s been a huge winner, and it’s a great profit center for the landlord, too.
Stefan Aarnio: Wow. I love the words. Animate the property, that really stuck with me.
Bruce Firestone: There you go.
Stefan Aarnio: Now Bruce, what do you think, we’ve gotta wrap up here in a couple minutes, but what do you think causes failure in most people?
Bruce Firestone: No problem.
Stefan Aarnio: Do you think it’s just the get rich quick disease is creeping in or what do you think causes most people to fail?
Bruce Firestone: Well, failure has a number of causes and I think the one that I see over and over again, more in my Canadian class than in my American class, is a lack of ability to focus and to finish, and if you think about it, let’s say you owned a little residential duplex and typical Canadian investors will, oh my gosh, the plumbing needs to be fixed, and the electrical needs to be fixed, and the furnace doesn’t work, etc. So, we would fix that, but then we would say, oh, we don’t have enough money to paint it, we don’t have enough money to put saw down on the front lawn, we don’t have enough money to fix the steps coming into the house, we don’t have enough money to put blinds in, it’s the last three percent of investment of an investment in pretty much everything, whether it’s a tech business, or service business, or real state business, it’s the last three percent that everybody actually see’s, and that Canadians have a real tough time financing and finishing.
Stefan Aarnio: Man, I got to have you on again, Bruce.
Bruce Firestone: Thank you for that.
Stefan Aarnio: I think it’s money, the finishing. Now, if you could go back and Bruce, you said you’re not the youngest guy anymore. If, you could go back in time and talk to 15 year old Bruce Firestone, what’s a piece of advice you’d give yourself?
Bruce Firestone: I wish you hadn’t asked me that, because I have thought about that.
Stefan Aarnio: All right, well, I’m glad you thought about it, you came prepared to the show.
Bruce Firestone: Well, yeah, I guess, well you just said it just means I’m 66 months, 36, but in all seriousness, I wouldn’t talk to the 15 year old. I would talk to the 38 year old Bruce and the 38 year old Bruce was a successful businessman. He was a bit brash and arrogant, I think maybe a bit pushy. He had a $120 million a year, very profitable company, tens of millions of dollars of cash or cash equivalents in the bank. He was bidding for an NHL team, media from all around the world where we’re interviewing me and life was pretty good, right? And, I had five kids and a great, beautiful wife, big house, what more do you want really out of life?
Bruce Firestone: Well, I made a mistake. And, for example, we owned a 30, not 38 no, sorry, 28 townhouses, free and clear. There were no mortgages against them, my wife and I, and we had a little business called Peta, P-E-T-A, which stands for people eating tasty animals. No, presidential executive travel parts, okay. And, it was kind of Airbnb before there was Airbnb, so we had 28 of these units, and fully paid for all the debt was paid off and we were making about $3000 a month. We didn’t have Internet back then, but what we had was we had basic cable I guess, and we had telephones, fax machines and it was fully furnished. Everything was there ready to go and we rented them out to tech executives and others, government workers who were relocating to Anova, so fabulous business.
Bruce Firestone: We’re making about $3000 a month and if you think about it from the point of view of the companies that were booking with us, paying $100 a night for $3000 a month for a two or three bedroom fully furnished apartment was much better than pulling say used, depends if you’re coming here for six months or three months in a hotel room for two whole [inaudible 00:42:59], which would cost them six or $8000 and it wasn’t really a good lifestyle for them. So, we were very successful and we were probably making about 80 000, maybe close to $90 000 a month in gross operating income and netting about $55 000 a month and that was just one of the things that I owned and we owned and good business and we liked it. And, if I were talking to that 38 year old, I would have said put that business presidential executive travel apartments in your wife’s name.
Bruce Firestone: You put it in the name of the Strauss with the lowest risk profile. My wife was a stay at home mom, because when the senators went bankrupt, that’s a public thing. It was bankrupt in the mid 2000’s and wiped me out and lots of other people as well. 485, and $500 million bankruptcy, and I had to restart my career. Imagine what it would’ve done for me in the mid 2000, 2007 I think, if we still owned presidential executive trouble apartments in my wife’s name, but we had 50 or $60000 a month in net operating income out of that, and no debt. That would have made a significant difference because even at 66 years of age, I worked 3500 hours a year and it’s been a long climb from 2007 to 2018 to get out of that situation. So, I would say to that to you and to your listeners, develop an arm reserve, that’s what my dad would have called it and never ever, ever pledge it for any loans and put it in the name of the partner with the lowest risk profile. So, at least you’ll have something in case all the other stuff that you’re working on doesn’t work out.
Stefan Aarnio: Wow. Bruce, that is another show. We got to have you for two more shows now, man.
Bruce Firestone: I’m really happy you allowed me to be on your show. I really support the work that you and others do to help other people live the best values they can and be the best version of themselves they can be.
Stefan Aarnio: Amazing. Now, Bruce, top three books that changed your life?
Bruce Firestone: Well, I would have to say that in my early career, it was, ‘What they don’t teach you at the Harvard business school’, followed up, it was written by the head of IMG, and then he wrote another one, ‘What they still don’t teach you at Harvard business school’. So, those two books by the head of IMG, he’s now passed on, were very influential, and then another one later on was written by Tony Shay, who’s the head of Zappos if you know Zappos?
Stefan Aarnio: Mm-hmm (affirmative). Mm-hmm (affirmative).
Bruce Firestone: Zappos is an online shoe store. It’s headquartered in Las Vegas and Tony’s is an unbelievably brilliant guy. It was called delivering happiness. And, Tony called me up and asked me if I would give him a book review when he wrote the book. I said, sure. He said, well, we’ll be sending out some advanced copies. It’s free of course, but one of the things I’d like you to do is put a review on one of your blogs. I have a few blogs that are fairly well read on a certain date. We’re going to try and get on the New York Times bestseller list. I said, no problem, I’d be happy to do it, and then I get a package from Tony and from Zappos, and I opened it up and there’s not one copy in there but two, and I thought, oh, my gosh, they made a mistake and then burst out laughing and realized no, that was intentional. Tony is all about over, what is it, under promising and over delivery.
Stefan Aarnio: Right.
Bruce Firestone: And, so he sent me, not one but two, he didn’t tell you that, but he sent me two copies and of course what I did was I put the extra copy on twitter and said to anybody if you want to read it, it’s free, I’ll give you my second copy, but you have to do a blog update or review on a certain date. And, so tens of thousands of people did it and we got Tony onto the New York Times best seller list. So, delivering happiness I think is worthwhile, too.
Stefan Aarnio: Wow. I love that. Now, Bruce, we’ve got to wrap up here. What’s the one thing that young people need to succeed these days? I’m talking millennials, generation z, the young people coming up now?
Bruce Firestone: Well, I have five of those millennials, and I see how hard it is for these young people, they’re kind of searching for themselves and they’re also looking for meaning like that. Like in my generation, I think there was some of that too. I think probably in every generation, but this generation, at least from my experience of working with millennials, having five kids who are millennials, teaching so many of them is they’re looking for meaning. And, so one of the things that I think is really important for young people is to find their why. Mr Sinek, I’m sure you know him, he does a YouTube video, ‘Finding your why’, and it’s got a few million views. And, for young people I think it’s really important that if they have, I think it’s about an 18 minute Ted Talk, finding your why and if you can find your why and find your purpose and your calling so that you work at something you love, then you’re never going to work a day in your life.
Stefan Aarnio: Wow. Bruce, you’re just, you’re just hitting it over and over again. Now, how can people get in touch with Bruce Firestone if they want to know more.
Bruce Firestone: Well, the best way to find me is on my personal website. It’s a brucemfirestone.com. You got to put the m in there, that’s my middle name, brucemfirestone.com and I really enjoy hearing from people. There’s no obligation. I’ve got the blogs that have thousands of articles on them, so I think they’ll find that helpful, and they can email me at any time. Bruce@brucemfirestone.com. That’s probably the best way to get ahold of me.
Stefan Aarnio: Amazing. Thanks so much for being on the show, Bruce. Respect the grind.
Bruce Firestone: I really appreciate it. And one thing I’d like from you Stef, if it’s possible, is to link, like and promote it to the folks who follow me.
Stefan Aarnio: I’ll get my team to reach out and we’ll send you a package and you can put it on all your social media.
Bruce Firestone: Well, I really appreciate it. I can’t thank you enough, and I wish you all the best with respect to grind.
Stefan Aarnio: Thanks Bruce.
Stefan Aarnio: Hey, it’s Stefan Aarnio here. Thank you for listening to another episode of my podcast. Respect the Grind. Now, if you liked the content on this podcast, you are going to love my new book. Hard Times Create Strong Men, that we live in an age right now where the men have become weak. Society has become weak. The mindset has become weak. What does it mean to be a man? That whether you’re a man or a woman, you’re going to find value in this book. Hard Times Create Strong Men which reveal the philosophy and the power of what it takes to be strong in today’s market economy. Go ahead and get a copy of Hard Times Create Strong Men at hardtimesstrongmen.com/podcast. That’s going to be a special offer just for podcast listeners. That’s hardtimesstrongmen.com/podcast. Get the book. You’re going to love it. It’s going to change the way you think. I’m Stefan Aarnio, Respect the Grind. We’ll see you on the next episode.
Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD
Real Estate Investment and Business coach
ROYAL LePAGE Performance Realty broker
Ottawa Senators founder
MAKING IMPOSSIBLE POSSIBLE
FREEDOM VIA REAL ESTATE INVESTMENT AND PB4L, PERSONAL BUSINESS FOR LIFE
FEHAJ, FOR EVERY HOME A JOB
Feature image courtesy of: VIC CVUT – Own work, CC BY 3.0, https://commons.wikimedia.org/w/index.php?curid=7193842
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