The Unseen Strength in Setbacks with James Catledge
01:21:00 Share

Have you ever spotted McDonald's hot, crispy fries right as they're being scooped into the carton? And time just stands still. Ba-da-ba-ba-ba.

This episode is brought to you by Progressive Insurance. Fiscally responsible, financial geniuses, monetary magicians. These are things people say about drivers who switch their car insurance to Progressive and save hundreds. Because Progressive offers discounts for paying in full, owning a home, and more. Plus, you can count on their great customer service to help you when you need it, so your dollar goes a long way.

Visit Progressive.com to see if you could save on car insurance. Progressive Casualty Insurance Company & Affiliates. Potential savings will vary. Not available in all states or situations.

Stripe helps many of the world's most influential companies grow their revenue and build a more profitable business. Whether it's Hertz making checkout a smooth ride for their customers, OpenAI answering unprecedented demand, or PGA chipping away at back office inefficiency, Stripe's financial infrastructure platform helps companies achieve ambitious goals. No matter what success looks like for your business, Stripe helps ensure the complexity of financial systems doesn't get in your way. Learn more at stripe.com.

Today's episode of escaping the drift is brought to you by mando. Are you somebody that stinks? That sounds crazy or more to the point. You got a teenager that stinks because uh, wow this mando stuff They sent me a package of it to try out And if you've got that weird odor emanating out of your teen's room try mando all over deodorant Because this package they got this man I put it on I put it on the boy and I gotta tell you he and his room had never smelled so good

I mean, literally you can use this stuff all over you. I'm talking about your feet, your butt crack, anywhere. Anywhere you got skin, this stuff will work as a deodorant. It was created by a doctor. It lasts for up to 72 hours. And all of this stuff is baking soda free and paraben free. So if you want to try it out, if you yourself are stinky or you got a stinky teen, I'm telling you, this stuff will change your life immediately.

We'll be right back.

of this starter pack. Just use the code Gafford when you go to shopmando.com. That's user code Gafford. It's shopmando.com. You're going to get 40% off. So support our show. Let them know that we sent you. Obviously, this is a paid advertiser, which is how we get to be able to do what we do for you guys. So check them out. Smell fresher. Stay drier. Boost your confidence from head to toe. Try Mando. And now, escaping the drift.

I need to buy a car, so I need my commissions dedicated to the purchase of a used car. And I don't know what that means other than I need a car quick, like, because I'm not going to sell cars. In my mind, I'm going to sell enough cars to get a car to go back and get the job that I think I've secured. Well, I'm there 30 days. I pick out a black Dodge GLH and

I have $9,000 now in cash and a Dodge GLH that's paid for. Now, I think the car was $1,200, okay? So we're not talking about a nice car. And it's so loaded with dents down the side. It looks like they had a door opening contest with this vehicle because the entire side, all the way up front and back panel, in the same location, it's been jammed up a lot.

Or as the used car manager at Troncolli Nissan in Atlanta used to say, James Myrick, man, this car's been hit more times than Joe Louis. That's it.

And now, Escaping the Drift, the show designed to get you from where you are to where you want to be. I'm Jon Gafford, and I have a knack for getting extraordinary achievers to drop their secrets to help you on a path to greatness. So stop drifting along, escape the drift, and it's time to start right now. Back again, back again for another episode of the show that, like it says in the opening, man, gets you from where you are to where you want to be. And today in the studio, I got a good one, guys. This is going to be super interesting.

Not too often do you get to sit down and talk with somebody that has had such a meteoric rise and such a massive flame out. I mean, we all talk about the ups and downs of life, the ups and downs of business, all of these things, but this is a guy, he did a little bit of time, went inside a little bit because he was convicted and accused of $180 million Ponzi scheme. And I kind of just want to hear the story of how all that stuff happens.

Ladies and gentlemen, welcome to the program. This is James Catledge. James. Good. Thanks for having me. Glad to be here. See, full disclosure, I screwed up the first opening. That was word for word almost exactly the same thing, wasn't it? Very good. Yeah. Very good. See, I'm a pro here, James. I'm a pro. Yes, you are. That's how we do it. So let's back up, man. Obviously, you know, you've had quite the life. Yeah, I have. You've had quite the life. And yes, we're going to get to talk about some of the negative things, but I always...

I want to try to find some positive here. So obviously we talked about the show. The idea is helping people get to the next level. And I believe now, obviously, you are a reformed gentleman. You're not somebody that is still looking to do anything that could be perceived as a negative in the world. And you don't reach the heights you reached because you reached a lot of those heights perfectly fine, great business, doing wonderful things. Yeah.

And there's a lot of good knowledge in there that you can use to help others. And I'm, and I love that that's what you're trying to do now. Yeah. I love that. So let's talk about, I always like to talk about nature versus nurture first, especially with high profile, very successful guests. So tell me about, tell me about young James. How'd you grow up? What made you, you? It's, it's a great question. I, on my podcast, I interviewed my mother about a month ago and I learned some things from her perspective. That was quite interesting. Um, and I asked this exact question, um,

what was it like raising two boys by yourself? Mom was a single mom. And she gave me some insight that I guess you don't really remember who you are as a kid. You may have the memories, but who you were is not clear yet. And she said to me that as she went to go to work, I was assigned various chores and all sorts of duties around the house. We were raised in Tennessee, and my dad had left the house by age eight for me. My brother was six.

five. So I'm kind of the man of the house at age eight. I'm in charge of protecting mom, if you can imagine at age eight. And still scared of the dark at eight. Still scared of the dark, very scared of the dark. One of my jobs was to take the garbages out. And I remember having this psychological battle with myself. The street was probably 100 yards from the house and the garbages are out back.

Street lights don't light up the backyard. There is no lighting in the backyard. And I've got to get 100 yards at age eight with two garbage cans. And I'm certain that the woods in the forest is filled with people trying to kill me. I'm sure of it. Yeah. And so I remember taking the garbages down one specific time thinking, you know what?

I don't like how this feels. I don't like the fear. The raw fear was overwhelming to me. When I got back in the house, I thought, you know what? No one else can take these garbages down. My mother won't do it. My five-year-old brother can't do it. He's physically not able to take them down. This is on me to do. And I remember having this thought, how do I personally...

not be so afraid, physically trembling afraid, like talking to myself loudly the whole way, trying to make sure that if there's anybody out here, they don't think I'm afraid because I'm having conversations out loud with myself. But I remember actually grabbing two knives out of the knife drawer, sharp steak knives,

And literally, you know how the garbage cans are. You got the handle there. I remember having a knife in each hand as I grabbed the handles of the garbages and took them down. And I literally had the thoughts what I would do if someone came for me with those knives. Literally had the visceral energy.

plan, inaction, and I don't think I was ever afraid again to take the garbage down. And I took the knives a few more times just to make sure I was ready. But as a boy, I remember having to overcome, personally solve that problem. And it, for me, was a real problem. I was the type of kid that when we come home from being maybe at church or being out to eat with my mother,

She would have me go in the house first. I'm eight and, and, and identify if there's any intruders before she comes in or before my little brother. And look,

No one's more scared than me at eight going in. Did you think mom liked the little brother more than you? Like, hey. Well, he's five. He's five. So he's not really in a position to do it. She's thinking, I don't have to run faster than the break-in. I just got to run faster than my eight-year-old son. So this is, there was none of us that were brave enough to do it without fear. But I remember having these really visceral reactions to fear. And I didn't like it. I did not like how I felt. I felt weak.

I felt consumed by it and I didn't like myself for feeling that way. So I had to go through problem solving to not feel that way. And I think my life's been full of that problem solving presented with something that no one else can fix but me. Well, I think it's very interesting that even at a small age, you realized that, you know, sometimes just changing your,

your physiology, your fit in you, your physical world, just by the act of holding those knives. Yes. Right. Just change the whole process. And I think,

I think if you're somebody out there that's struggling with fear of anything, I think you just got to find something. You got to find that knife to put under the hand of the garbage can. That's right. That's right. You've got to overcome it. You got to solve it. I'll tell you one more on the same line of thinking. I was a Mormon missionary, which was a great privilege for me. At age 19, I was called a missionary in Santa Rosa, California. And I remember feeling like such an imposter. This whole thing, you know, imposter syndrome where people feel like they

They're not qualified for this. They certainly don't know enough to do this job, this task. Many entrepreneurs feel this way, and certainly as a Mormon missionary, I'm called, I have the name tag, I've got the suits, but inside me is

I am not up for this. I really don't know what's going to happen if someone opens the door. Okay. So luckily for me, when I arrived, you get a trainer. Okay. He's another 19 year old, but he's been there longer than you. So he supposedly knows what to do. Well, I had a pretty good trainer and

And I, I like him. I look up to him in a, in a way there was some admiration there from me to him. And he, when I got there, he had torn his ankle or had a sprained ankle or something. And we couldn't do our job for like three weeks. We're in this apartment and I'm basically spending three weeks telling him how good I am.

If you can imagine, I'm literally talking myself up, talking my game up to him about how ready I am. And this is 100% brainwashing myself as I'm doing this. Well, the day comes, we've got the ankle better.

And we're going to have to find out what I can do and what I can't do. And your job as a Mormon missionary is to, in many cases, knock on doors. And if a stranger, the homeowner lives there, they open it. And then you begin this very...

quick weird exchange about religion and about Jesus Christ, which is so personal for everybody, including us, the Mormon missionaries. But it's happening on their doorstep with strangers. You're trying to get them to let you in. That's success. If they let you in, there's a full blown discussion

path funnel, if you will, that we're to take them down. Well, we get, we lock our bikes to the stop sign. We're walking the sidewalk and he basically outlines, we're going to do this street, this street, and then the one behind him, we're going home for lunch. And I, I'd been talking myself up to this guy pretty much nonstop. He actually believes what I've been saying about my capacity. My capacity is not nothing. I am unproven, but I've talked it up.

So I make a decision after locking the bikes that I'm going to step into this and kind of own it. And I tell him his name is Merrill Taggart. Okay. Merrill Taggart is from Coeur d'Alene, Idaho. Okay. And I, and I love, I come to love Merrill Taggart from this experience, but I told elder Taggart, that's what we call each other. Let me take the first door. Now,

This is all I can do to even say this out loud to him. But I feel I need to trap myself into this experience. And so I do. He says, are you sure? I don't mind showing you exactly, you know, which I said, no, I'm ready. I'm not ready.

I'm filled with fear, not the fear of the darkness and the forest. And I don't need knives, but man, I need courage because I've now trapped myself, which by the way, is a technique I've come to use throughout my life, trap myself psychologically into victory. And so he says, this would be, this would be interesting. Let's do it. We walked to the first door. I'm praying to God on high. Nobody's home. Please don't answer whatever I'm even knocking softly.

please don't hear this in the back room. Don't answer. The curtains move. I know they're in there. He knocks loud. Like the cop knock. Now he's knocking man. He wants them to open the door. He's prepared. Jesus is here. Yeah, right. The Jesus troops have arrived. So literally the lady opens with the lock, you know, the chain on, pulls it open. And I said,

We are Mormon missionaries a long ways from home. This is literally what I said. This is not in the training. We are Mormon missionaries a long ways from home, and we'd love to tell you why we've come so far from home.

And I just kind of left it like that. That's a solid opening. It's literally what I said. And she, I remember her slipping the chain up thinking, don't do it. Don't do it. Don't open that door. She opens the door. She says, why don't you guys come in? Would you like a drink of water? And now I'm relaxing a little bit. I'm calming down. And he kind of takes over and he kind of does the thing. And he, he's so eloquent. He's so good. It looks, you'd think he's 50 years old. He's so good at this. Well, that was day one.

Trap myself and do it and then I felt comfortable doing the rest of the doors and I end up having a fabulous mission great experience and leadership accountability Responsibility and it changed my life, you know, I never put it together Chris Leake is a friend of mine and he had a massive home services build a business that got sold out to to private equity and

And he's a Mormon guy, he's from Utah. And I never put it together. He's like, oh yeah, dude, all I do is recruit former Mormon missionaries. Right when they come off the missionary. And I'm like, oh my gosh. I'm like, they're banging on doors trying to sell Jesus. To strangers. To strangers. They got no problem asking about solar. No problem asking about solar. No problem. No, you've got nothing to sell that we would have a problem selling. Yeah, and he told me, he goes, literally, he goes,

Every home services building business across the country, they recruit from Utah. For sure. Right from Utah. Absolutely. I can't believe I never put that together. Now, one other thing you'll like about recruiting Mormon missionaries is we're trained at the age of 19 when folks are busy getting their first bar experience and getting their first tattoo perhaps and which piercing do I want next. We are trained in 9 o'clock accountability. At 9 p.m., we are to call immediately.

our district leaders who were other night as a businessman myself you know what i appreciate when i go to a business or i do business with somebody that's using tools that i know make everything easier like square when i go somewhere pay with a credit card i don't want to see somebody typing my credit card number in i just want to see it get swiped and know that it's secure if you got any kind of business that takes credit cards you need to be using square and right now you can go to square.com forward slash go forward slash drift and get 200 off the hardware you need to get signed up let's check it out now

Stripe helps many of the world's most influential companies grow their revenue and build a more profitable business. Whether it's Hertz making checkout a smooth ride for their customers, OpenAI answering unprecedented demand, or PGA chipping away at back office inefficiency, Stripe's financial infrastructure platform helps companies achieve ambitious goals. No matter what success looks like for your business, Stripe helps ensure the complexity of financial systems doesn't get in your way. Learn more at stripe.com.

Are your ulcerative colitis symptoms proving difficult to manage? Tramphya can help you manage the cycle of UC symptoms. At one year, many patients taking Tramphya achieved clinical remission, and some patients also achieved endoscopic remission. Individual results may vary. Tramphya is a prescription medicine used to treat adults with moderately to severely active ulcerative colitis. Serious allergic reactions and increased risk of infections may occur.

Before treatment, your doctor should check you for infections and TB. Tell your doctor if you have an infection, flu-like symptoms, or if you need a vaccine. Ask your doctor if Tramfiya can help you manage the cycle of UC symptoms. Call 1-800-526-7736 to learn more or visit tramfiyradio.com. Have you ever spotted McDonald's hot, crispy fries right as they're being scooped into the carton?

And time just stands still.

It's a physical calendar, not a digital calendar. It's a physical calendar where we've marked all these units of activity that matter, high leverage activities that lead us to what we're after, which is baptisms. People joining the church is what we're after. Yeah, that's a conversion. That's it. Literally a conversion. Literally. Literally a conversion. That's literally what we call it. How many converts? Yeah.

We are calling in at night. If we don't call in at nine o'clock, they call us. If they can't reach us, they drive their bicycles or their car over to find us. This is an army of 19 year olds who are accountable to a structure that ultimately reports back to Salt Lake City. The quantitative activities done that day around the world on behalf of the church. So this is what we're doing for two years. Yeah. Guess what they pay us? Nothing. Nothing. We

We actually pay for the experience. - That's wild. - Yeah, it was so good for me. - No, do look, anything that's, look, whatever it may be that teaches you that level of responsibility and dedication at a young age, be it the military, be it that, be it anything. Yeah, I'm gonna get by on that, that's good stuff.

As a kid, let's go backwards a little bit. As a kid, because you said you didn't get paid for that, what was the first hustle you remember you did for money? What was the first way you got money? Yeah, yeah. That's such a good question. First of all, you think of the allowance and everything and what I had to do to get the allowance. That's easy money. I'm talking about outside money. I know. I would say fabricating my age...

to go work at a car wash where you literally drive the, at the end of the car wash, you drive the vehicles out, then take care of the wheels in the interior to get the tip and take the ticket.

I was 14. Now, you're not supposed to be driving cars at 14. You told me you were 16. 16, yeah, 16. And I just needed the money. I needed to earn my own money. Mom didn't have enough money for bills. And I liked nice clothes. I wanted to wear nice button-down shirts. Izod was a popular brand when I was a kid. I wanted to wear the Izod and the polo. And I just, you know, my mom was Winnie the Pooh and Tuffskins. See, you know, that brings up an interesting point because they say that,

Tough times breed strong men that build great times. And then great times build good.

We kick kids that it build times. That's a fact so it's obviously you because you grew up single mom. Yeah, brother Yeah, no my hustle the cart wash 14 to buy what you want. Yeah that instilled an internal sense of resilience with you So how so you had your kids pre fall right your kids your kids were all six were on the deck all six were on deck like they were they were living the high life and

airplanes, pilots, beach houses, the whole thing. The whole thing. So how did you, how do you not raise worthless kids? It's hard. Yeah, it's hard. And I don't, I can't say as I sit here that we did as good as we could. You know, I think looking back, there's some things we could have done even better. But I will say, and maybe it's through the tough experience that we lived through together, they are more resilient today.

Because they went through it. It's one thing to live in the $8 million house and then move to the $10 million house and then move to the $12 million house. It's a whole other thing to go from the $8 million house to the $500,000 house. To the apartment. Yeah. Yeah. That's a whole other adjustment. And we did it slower than I just said it. We did it slower, but we end up there. Yeah. Yeah.

And my kids had to make that adjustment. I'll just tell you a quick anecdotal story to that point. Six kids, right? The youngest boy is Nathan, okay? Nathan today is in college. He's in his sophomore year, wrapping it up at Brigham Young University. Nathan

lived through the heart of the difficulty. My litigation with the United States government lasted from 2008 to 2018. So a decade of the children's life, which is most of it. Yeah.

They only know dad under pressure, right? Whatever pressure one processes when the United States of America is prosecuting you, whatever that pressure looks like and however you handle it, the kids are observing that. And my 18, somehow this 18 year old boy in the middle of all this becomes captain of his football team, homecoming king.

4,000 students in the high school. Homecoming king. There's not 19 of these homecoming kings. There's one homecoming king. Yeah. He is the most kind, gentle young man. When I was inside, and maybe some other time we'll get into how I get inside, but I'm inside a federal prison. Oh, we're going to get to it. Okay, we're going to get to it. Well, while I'm inside, this is the boy who arranged the kids to come visit. This is the boy who made sure everybody was in the car.

This is the kid who watched his dad not only go through it, but maintain communication, clarity, love, support, and made sure everybody in the family knew how good dad was doing and how well dad was doing, how safe dad was, how everything was going well for dad. And I wrote a blog inside. He's the one who published that blog.

Each entry he published. So he had to read it, clean it up, type it, publish it. I think in an odd way, Nathan's life got real, real.

In a significant way, and I think it's blessed him. He is the most amazing, he'd been amazing interview. He's an amazing young man because of what he witnessed dad going through and how he managed it. Obviously he had to make choices to manage the way he did, but those choices he made, I think changed his life forever. Yeah. I think that, you know, obviously I didn't have the same situation you did, but my parents got divorced when I was very young. My father was an attorney in a very small Southern town. Yeah.

rule number one if you're a woman in a small southern town your husband is attorney there don't get divorced in that county it's just a bad move father was not very generous with my mother and the divorce so we still lived in like the ritziest neighborhood of my small town yeah in north florida but we didn't have any money yes we're broke and so going from that situation where you know

you're constantly having to try to keep up with everybody else and there's no way to do it because you're behind. I think that much the same way it did for your kids, I think that burned my resiliency. I think that's what made me. - Yeah, I get it. - That of my childhood, and I look back at my childhood very fondly. - Me too. - Nobody is willing, you hear like David Goggins and nobody is feeling bad for me. - Yeah, exactly. - But that, I think that feeling of less than and that feeling of,

left wanting yeah right right is what created that burning desire in me to get successful so i think i think that's good and it's so tough when you are someone of success i mean it's the biggest fear we always have with our kids and we're constantly trying to manufacture adversity for them yeah and it is manufactured yeah yeah as much as we can manifest i mean

Sports and all that stuff and everything we can manufacture which we're trying to desperately to do Yeah, and dude, my kids are great. But at the same time when they were eight years old They had a you know, they had an opinion on the airline. We were taking yeah, right? Yeah, yeah, and then what seats were it? Yeah, right. Well did Delta know why we're on Southwest? Yeah Yeah, and they had that you know, we had a private jet for a while and they had that stuff and and

And I think they're still very well grounded because I think we do the best we can with them. So let's – because you were very successful early before your trouble. Yeah. So what was the – so you went into what field after – because you went to BYU, I'm assuming? Yeah, BYU. Chalker. Chalker. Not a big surprise based on the story so far. Yeah, what's interesting – and I'll get you to the first breakthrough from a –

So I get home from my Mormon mission and all my buddies are headed to BYU. They're all missionaries. These are my best friends on the planet. We've had this galvanizing experience together as missionaries. And my friend's from St. Louis. He drives down in his RX-7 to Memphis to pick me up. We're loaded with clothes and footballs and shoes and we're headed out. He's been accepted to BYU. I have not been accepted. My grades in high school were too low to be accepted to BYU. I'm like a 2.8 grade point average.

But I know that's where I need to be. I need to be out there, you know, and hopefully while I'm out there, there's a way to get in BYU where you're not full-time day school, but literally your adult night school. And you kind of start there, get your GPA up, and they'll accept you to day school. Okay. No differentiation in the quality of the credits. It's just you're going to school at night. And that worked well for me because I need to work. So we get out there. I sit with my mother every,

it's time to leave brian has picked me up in the rx7 he's ready to leave and we i've not had a discussion about money and i don't have any okay my money's been spent on my mission and i and i haven't been home long enough to have a job yet i'm going to school and so i asked my mom i said look i'm going to school i know you don't have much but you have anything that that

I could get started with. She says, she says this, I'll never forget it. She says, I have $78 in my checking account. How much of it do you want? And so I know right then there'll be nothing. Yeah. And so I tell Brian, cause we're planning on splitting gas money all the way out. You know how it goes. And then Brian's dad's a dentist. So he's got the apartment rented. I'm literally sleeping in an apartment paid for by my friend and

I'm not accepted into this university. I am a total imposter. Yeah. Come on, figure it out. Yeah. I got to figure it out now. And I don't have a car. It's his car. And so I know I need to be out there though, man. I just knew I need to be there. I didn't need to be at home anymore. And so I literally the next day walk to the bus, get a bus route map and

it back then we had help wanted ads in the thrifty nickel of the newspaper so i look for jobs that i think i can do and and i and for whatever reason i'm i'm broke and penniless but i don't feel like i want to do a mcdonald's or a taco but just this is just me in my weird way of thinking i want a professional job right and i'm broke so i want to work at a radio station because

For whatever reason, I think I would be a good disc jockey. And in my mind, coming from Memphis, Tennessee, there was a disc jockey that was so famous, Rick Dees, that I think in my mind I could be a Rick Dees. And so I want to work at a radio station. So I get the bus to Salt Lake City for an interview at the radio station. And the guy says, look,

you know, you don't have any experience in broadcasting. Why don't we put you in sales? We have this long interview about sales and I was a missionary. So I, this is kind of fitting my skillset. Yeah. You're like, okay, no problem. Show me the doors. Right. This, this guy is, is hiring me basically. And I'm so excited because I,

First of all, there's no salary. Okay. The salespeople aren't paid salary. So this is not, you eat what you kill. Yeah, of course. This is a sales job. But nobody's telling you how much you can make either. No, no. There's no limit on what I can make. I eat what I kill. And I frankly like that because there's no limit on it, as you say. Yeah. Well, he says, you've got a car, right? This is the wrap up of the interview, man. Sure. I said, not yet. And he says, well, why don't you come back and see me when you get a car?

And so I left that interview, get back on the bus, and I'm thinking, I got a job here. I got a job here. I have to get a car. So on the way back, I have the bus stop near Mountain Motors in Orem, Utah on State Street. Now, I didn't know at the time I was headed to Mountain Motors. But when the bus stops, I see a used car dealership.

This is where they have cars. So I need a car. I walk into Mountain Motors. This place is run by Persian businessmen, okay, in Orem, Utah. I walk in and I said, look, guys, I need a sales job to sell cars. And the guy says, let me introduce you to the sales manager. He introduced me. He says, what's your experience in car sales? I said, none, but I'm sure I can sell them.

He says, well, okay, we're hiring sales guys. You know, by the way, most people are hiring sales guys. Word to the wise. Most people are hiring sales guys. And I said, here's the little caveat here.

I need to buy a car. So I need my commissions dedicated to the purchase of a used car. And I don't know what that means other than I need a car quick, like, because I'm not going to sell cars. In my mind, I'm going to sell enough cars to get a car to go back and get the job that I think I've secured. Well, I'm there 30 days. I pick out a black Dodge GLH and

I have $9,000 now in cash and a Dodge GLH that's paid for. Now I think the car was 1200 bucks. Okay. So we're talking about a nice car and it's so loaded with dents down the side. It looks like they had a door opening contest with this vehicle because the entire side all went front and back panel in the same location. It's been jammed up a lot. Uh,

Or as the used car manager at Troncolli Nissan in Atlanta used to say, James Myrick, man, this car's been hit more times than Joe Louis. That's it. That's literally the situation with this car. And so I talked them into four...

for my without additional pay like they're going to take care of this car i said i need a body shop to bang this thing out and paint it because i this is ridiculous so they get all that done so i've got 9 000 bucks and this 1200 car and it looks good okay i go back now this this takes a month i go back to that job he goes man i didn't even see you again i'm glad you're back i said i've got an idea and i proposed this now this is my first real hustle

I propose to him that I'm going to be going to school at BYU. Now, I'm not even accepted into BYU yet, but in my mind, that's where I'm going to be. I tell him, why don't you give me... Stripe helps many of the world's most influential companies grow their revenue and build a more profitable business. Whether it's Hertz making checkout a smooth ride for their customers, OpenAI answering unprecedented demand, or PGA chipping away at back office inefficiency.

Stripe's financial infrastructure platform helps companies achieve ambitious goals. No matter what success looks like for your business, Stripe helps ensure the complexity of financial systems doesn't get in your way. Learn more at stripe.com. Have you ever spotted McDonald's hot, crispy fries right as they're being scooped into the carton? And time just stands still. Utah County is my territory.

Now, Salt Lake City sits in one county, Salt Lake County. Utah County is on the other side of the mountain range. The radio station is in Salt Lake, but I don't want to drive up there every day. I want to handle accounts in Utah County where I'm going to go to school, where my apartment is. And he says, well, we got a guy down there. I said, what if I outsell him? Will you give me Utah County? He goes, well, you can both be in Utah County.

I said, okay. He says, we also have some orphan accounts in Utah County that they no longer advertise with us. I'll give you that binder full of orphan accounts. And so what I did is I needed the history on how much they had spent. And I built a chart who had spent the most over the longest period of time. Those would be the ones I would start with. And what I did, we had cassette recorders back then. I wrote the commercial.

before I do visit one. And I got the morning announcer who's famous on the radio. Okay. Mark Van Wagner was the guy's name. I'll never forget this because no one knows I'm doing this and you're not really allowed to do this.

I get him to record the copy as though it's a sold commercial. I haven't even visited the place yet to try to pitch it, but I want the commercial recorded by a good, soundy disc jockey. I've written the copy. I like the copy. He likes the copy. Only people who ever approach the morning or afternoon drive car are people who have sold ads.

Well, he's assuming these ads are sold. I don't have the discussion about where they are or aren't. I go down with my cassette recorder that I purchased, play these ads, and I'm getting people to say, wow, who produced that? I say, well, I had a morning guy do it.

And he said, we don't even have a contract with you. I said, not yet. I said, but I know if you see it the way I see it, you wouldn't want to do business with anybody else. Who else is writing your ads ahead of a relationship? You know? And so I ended up having this, Jean Harvey Chevrolet is my very first client down in American Fork, Utah, and they're laying big bucks out for advertising. And it's, it's a, it's an orphan and I'm restoring all the orphans. So eventually I am, eventually it took six months. I'm the number one guy in Utah County.

I go back to my guy and I sit in my sales manager. All these names are coming to me. The memories of these fellows. And I said, look, I need my clothes dry cleaned. I don't have time to iron clothes. He says, he says, here's what you do. Go down and get a 50% cash, 50% trade account out of dry cleaners.

I said, okay, so basically all his ad dollars are half in trade, half in cash. He goes, exactly. They'll do it for 50% to be on the station. I said, what if I do it at my favorite restaurant? He says, okay, 50-50. I said, what if I do it at the gas station?

So I am now... He greenlit? Because isn't that kind of... Yeah, but he greenlit you taking revenue from the station? Not only revenue from the station, but now the other guy in Utah County, he's got dry cleaning. He's asking me. I'm half his age. He's asking me where the dry cleaner is. He's asking me where the gas station is. There's one gas station that we got to deal with. And the restaurants. I ended up at two or three great restaurants. So I am now living...

but seems like a six figure multi six figure income. Yeah. Because everything's half price. Sure. That's right. And I'm earning commissions off the accounts that I'm selling full blow at. So I would say that's my first real hustle because I figured out how their business model worked. And I figured that there's an opportunity here within this. Now I'm going to give you one more and then we can shift back to you got great questions. I don't want to miss any of them.

One more experience I had. So I'm selling these ads in Utah County. I go to Mako Auto Body. They fix, they do paint and they do body repairs. And this is the place I have my Dodge GLH fixed. So I had a little time with the guys in there when they were fixing my Dodge, my door problem. And so I go into the GM of the place and I said, hey, look, you guys aren't on the radio. You should be on the radio. He goes, what?

on the radio. He goes, he goes, what are the odds? We're going to be on the radio and run into the guy who had an accident. And that guy's going to happen to listen to the ad and bring it into make-away. That's, that's, that's not going to happen. And I said, okay. And it dawned on me when he said this, I said, what are you doing right now for culture? How do they find you now? Walk me through this. How do they find you right now? You've got leases, you've got employees, you've got

this big building. I said, there's a lot of expense going on. Are you just hoping to God they find you and drive in here with a busted up car? He goes, kind of. I said, what if I could provide you a list weekly? No, I don't really know where I'm going to get this list yet. What if I could provide you a list weekly of everybody that's been in a car accident in Utah County weekly? He said, that'd be kind of right at the target of what we're looking for. I said, well,

I don't want to talk too much about where I would get a list because I don't know. Talk too much about where I get a list like this, but what kind of value is it to you? He goes, it'd be my whole ad budget. I said, I need to know a number. He said, well, I'd be willing to spend five, 6,000 a month on something like that. I said, I wouldn't make this exclusive to you. There's other people who need a list like this. He said, 8,000 a month and you can't use it with other repair shops, body people. I said, for 8,000, I'll do it.

Now, my little brother who's living with me, figured out James is making money. He's got dry cleaning. He goes out to live with me. I pay him $25 a week to go to every police substation in Utah County. And just get the reports. And print the reports and pay them if they need printed copies. I now have a binder and my girlfriend is good with the Macintosh.

She builds me, we make up the name and trust listing services. We literally build the list contact number. It's all in the police record. Yeah. The whole thing I delivered to him. And I said, look, you do, you can't have this without the eight grand. And I'm going to bring it to you every month. I'm going to bring you four times a month, the list, but every month you're paying me eight grand.

And he says, I'll take this every month of the year, all year, every year. So I'm selling ads, but this little thing dawned on me by listening to this guy. I'm hearing this guy explain that you're hoping to hell that somebody walks in here and needs a thing. We know who gets in car accidents. We know who needs their car repaired. And so I built like an email for them that they could send out with a discount, letting them know that sorry to hear about the accident.

We take all the insurances and we're happy to bring you over in our town car to and from. If you've got a problem, we'll tow the vehicle. Nope. So basically I find out what he's willing to do. I write it in kind of an email for him to use for that list. And we're hitting that list and he's got more business than he knows what to do with. I ended up selling it to a personal injury guy and a chiropractor. See, I would have taken it one step further. Tell me. My favorite technique in business anymore is I call it the Tony Soprano technique.

which is this, which is if I want to build an auxiliary business on a bolt onto something that we do here. Sure. Right. I'm going to say, okay, cool. You can do this. And then I'll go get the best person I can to plug in that already has this existing business. Yeah. Yeah. And then we flood them with customers. And then at the end of six, seven months, I asked a very simple question. How much of your business is our business? Yeah. And when that number tips North of 50%,

well, I'm gonna be your partner now. - Yeah, right. - Now we're partners. - Right. - And that's how it's gonna be because once you get somebody so dependent on that source of business-- - 100%. - They don't have a lot of choice. It's like, listen,

I'll bring you more and we're going to do this, but we're partners now. Absolutely. That's how it works. This is Carnegie Rockefeller moving the fuel around the train car. Yeah, exactly. Exactly. It's the exact same deal. Oh my gosh. The men that built America might literally should be required, required education. Reading a history book. You should watch those videos. Watch those videos. The men that built America for every kid in school. 100%. Absolutely. I can see them having that discussion right now at Carnegie's office. Yeah. Should be, should be absolutely well. That's, that's great. How do you go from that? Yeah. Right.

Yeah. Right. Cause you were making a million bucks at 27. I did. Million a year. Not, not, not, not a millionaire, multimillionaire, but million a year in cashflow. Yeah. You, you know, you want to take you from the radio station. Okay. So I end up staying in Provo working my whole way through college and I'm making $1,000

I'm driving a brand new affinity G20. I'm making good money in college. I'm a six-figured guy in college, okay? And college is boring beyond belief. I'm out earning the professors. And for whatever reason, as a kid, that mattered to me. Like I've taken lessons from guys. I'm out earning economically. And they had such a jumpstart on me. I just, for whatever reason, in my little arrogant mind, that mattered to me. And so I end up

getting offered a job by one of my advertising clients, Miracle Ear Hearing Aids. Okay. So Miracle Ear is a franchise system. And the guy's name is Barry. He's spending lots of ads on our radio station. He says, I own five locations in Las Vegas. He says, I would like you, now I'm 24, 23, 24, wrapping up my college. He says, I want you, if you'll do it,

to manage all five locations. I said, I don't know anything about audiology or hearing, or I don't have any credentials in this. He said, this ain't about credentials. This is about selling hearing aids. I said, well, I'm not, I'm not interested in selling. Which have a massive markup. Yeah. They're huge, huge markup. I think our parks were two or 300 and we're selling about 18, 1900 per year. Yeah.

Cause to hear again is pretty powerful. Of course. To hear again. So I said, just tell me where the licensing is on this stuff. And do I need some type of medical credential? I mean, what are you talking about? Nope. Yeah. So basically he, he explains all this to me, drives me down and everybody he's employed is like triple my age. Like these people are all like dad, but could be my dad or granddad. And I'm thinking, do you want me to manage these people?

I'm literally right out of college. He goes, no, you know more than they know about sales. He goes, absolutely. You need to be an energy of these people. I said, and you're going back to Salt Lake to run your franchises. I'm just loose down here with your people. He goes, exactly.

So this guy put huge trust in me. I was already making, I think 130 was my last year in college. I made 130 plus I got his free trade. So it's almost like 200 grand in lifestyle. And so I need to make that. And what year is this? This is. Yeah. By the way, it's a while ago. 1991, I left BYU. Okay. So 91. 91. Yeah.

So I moved down here to Las Vegas where we are, and I take this job. I signed a one-year agreement with him. He's given me a bonus on every hearing aid, a six-figured flat salary, 100 grand flat, $83.33 a month. I remember the checks, $83.33 a month. And then I want to say it's like $65 on every hearing aid, every year. Okay.

So there's a huge incentive for me to go store to store, making sure hearing aids are getting sold. And how are you testing? How long is your testing taking? What are you saying? So I'm literally having these older fellows explain to me their process, which they didn't like, you know, it just seems too young to come at them like that. But I did understand the business dynamics of it and the business model. The other thing that helped me a lot is working in radio sales.

I had to understand all these businesses and how they made their money and how they got their customers. I had to intuitively understand to write their ads. Like what is their customer? How do they get there? What are the dynamics? What are the profit margins on their products? I had to understand all that about all those businesses. And so in a really weird way without planning it, I ended up becoming pretty knowledgeable about how businesses work. Well, you became probably an expert through the copywriting process of finding pain points.

Yeah, right. And being able to really provide quickly solutions to those pain points that were very appealing to the masses. That they responded to. Yeah. Yeah. And by the way, when you're spending money. That's what a great copywriter does. Yeah, that's exactly. And that's what I was. I was writing copy. And what ended up happening was the people who make the decision to spend money off the balance sheet.

is the owner of the business, okay? There's rarely a staff member making a decision about how much we will spend of our balance sheet money in this discretionary way. Sure. I usually end up meeting with the person who it matters most to. This is not like delegating to someone else to spend someone else's money.

Yeah. So I end up in these conversations and they really, in a weird way, mentors all these business owners in a really shadow way, mentoring my young mind about how the world looks, how businesses should look, how they could look. Good businessman, bad businessman. I'm able to observe that quickly, transactionally.

So when I moved down here, I understood the hearing aid business intuitively. I'd been writing this guy's ads forever. And he is a mentor to me, a friend and a mentor. I do it for one year. I'm really bored. I'm bored. I'm in Montgomery wards. I'm in Sears. I'm in wherever our locations were. We had a freestanding location over here in Tropicana and Pecos.

And that's where my office was. Dude, I could tell you because I own an insurance agency that specializes in Medicare supplements. Okay. And when you're a young guy, all you're doing every day is sitting with people that are 40 to 50 years older than you. Yeah, man. It's tough. It's tough. And they can't hear you. Yeah. They can't hear me.

And they can't hear you. And they can't hear you. Right, exactly. So you're yelling all day. Yeah. And the wives always can hear and the men usually cannot hear. That was the other dynamic there. I think that's by choice. That may be something they worked out. I think it's by choice. Right. What was it? There was an old couple on like sort of the late night shows and they said, what's the secret to a long marriage? And he's like, what? He goes, I'm sorry. He goes,

I can't hear very well and she doesn't see very well. And he goes, I know what, what's the secret to a long marriage? He goes, I just told you, I don't see very well and she can't, or I can't hear very well and she can't see very well. It's the perfect combination. It's called chemistry. Yeah. She can't see me anymore and I can't hear her anymore. That's great. That's it. So I do that for a year. I I'm attending church, uh, still in the Mormon faith and

And my bishop is an insurance agent, general manager. He's like a GA, general agent for an insurance agency. I don't know anything about insurance. It sounds like a scam. We didn't have any as a kid. My family didn't own any insurance. I don't quite understand the dynamics of paying premiums for 75 years and hoping that when you're gone, some stranger's going to deliver a check to your family for a half million dollars.

The whole thing sounded scammy to me, but I like this guy. This guy's a mentor, really. This Mormon bishop, his name is Chris Zockel. And I say that because a lot of people in this town know Chris. So he, as a bishop, says to me, James, you'd be very good at this.

Stripe helps many of the world's most influential companies grow their revenue and build a more profitable business. Whether it's Hertz making checkout a smooth ride for their customers, OpenAI answering unprecedented demand, or PGA chipping away at back office inefficiency, Stripe's financial infrastructure platform helps companies achieve ambitious goals. No matter what success looks like for your business, Stripe helps ensure the complexity of financial systems doesn't get in your way. Learn more at stripe.com.

Have you ever spotted McDonald's hot, crispy fries right as they're being scooped into the carton? And time just stands still. I may have to hold my nose and jump in on this, and I don't know.

I got a good gig where I'm at. He says, listen, we've got a proficiency test that the CEO of Beneficial Life has designed. Every agent has to take it. Just let me give you the proficiency test. And it will tell us both whether you would be proficient at this. Strangest questions I've ever been asked. I mean, strange questions. So I go through this whole thing. He calls me. He submitted this thing. It takes a couple of weeks to evaluate in Salt Lake City. They send it back. He says, let's get together. I want to go through your proficiency test. He says, listen,

I've scored 60, 70 guys that have worked through the agency over the years.

never seen anything like it. I've never seen anything like it. Your score's off the charts. It's higher than mine by like 10 points. And he's the boss of the agency. I said, well, what does that mean? Because I do not at this point, the way you've explained insurance, I don't like it. So what does that mean to have a high proficiency? It means you would make a fortune. Yeah, you're built to sell it. Yeah. Whatever's going on in you is dynamically designed for this. And I just believed him and I was flattered by the comments.

And he took me under his wing, taught me estate planning seminars where he runs an ad in the local newspaper back in the day. If you were over 65, you read the newspaper. And his flyers were for living trust. Come for a free lunch. Yeah, come for a free lunch. And so I was a pretty good public speaker. And he was very good because he's a bishop. He's very eloquent. And so I would sit there and take notes on his stuff.

how he did his one hour seminar. And then they would fill out a little lead card at the end. What was interesting to them? What they thought was they should do differently. And could he contact them? He has a little lead card. I would gather the lead cards, make them feel welcome. Thank them for coming and let them know I would be the one back in touch with them. That was my job in the relationship. I'm the one that runs all these people down, sets appointments for the boss. So we do this for a year.

And I think just on my split with him, I probably made a hundred and a half just on the splits. And I couldn't believe the money involved in financial services. I was, I was shocked because we've got a lawyer doing the living trust work.

We're doing the estate planning work, which is basically life insurance planning and massive front end. First nine months, a lot of money. Yeah. Massive front end commission. Yeah. They, they small residual, but massive. Yeah. They pay almost the whole first year premium out in commission. 20% in some cases. Yes. Yes. And so I'm not into that juice because he's the boss. I'm just an agent, right? You're on the, you're on the, you're on the producer's contract. Yeah, exactly. So,

I say to him, "Hey, look, I got a lot of guys from my mission that want to work with me." I said, "Is it possible for me to bring them to the agency? And I just need you to tell me what you make on me as a percentage. And then if you'll disclose that to me, I'll split it with you. It's your agency. It's not my agency. So I will train them. I will take full responsibility for training them." And I was a great trainer as a missionary, so I knew how to train people.

and I've been doing this a year, so I've made enough money that I know how to teach this. I said, just give me half your split and I'll take care of the guys. So we do that. I hire five or six guys.

Making a lot of money now. I'm making about 300 grand. We're now three years into this, and I think I made 388 my last year with him. How many agents under you? Six. Just six? Yeah, six. Dude, my guy Sean Mikey came in here a couple weeks ago. He's in Miami. He's got a life insurance program.

Yeah, yeah, yeah. He's got 1,000. What's FFL? He's got 1,000 agents. Yeah, yeah, yeah. 1,000. We're going to get there. We're going to have more than 1,000. We're going to have more than 1,000 in a second. Okay, all right. All right. So just to give you an idea, with one company, one company, I made 59 million in commissions. Okay. That's one company. Gross commissions are over 120 million paid to me personally. Oh, my gosh.

When we look at the other, now this, those are commissions paid to me, not some gross number we now cut into that. That's the number that's on the records with me. So I figure out with Chris splitting his number that I'm good at this. I'm good at leading people. I'm good at teaching people. I can make complicated things simple to understand, intelligible. And so I tell Chris, I want my own agency.

Could you help set that up? I figure he's going to get some juice on that. No, no is the answer. And so I don't know that it takes me months to figure out that he's not helping me.

that he's working the back channel against me. So I call beneficial life, the head court. I'm the number one guy in beneficial life. You say I'm going to bounce. And I said, I didn't even know to do that. I didn't even know to do that. I'm still Tennessee Mormon missionary. Loyal. I don't know this. Yeah. I'm an Eagle scout. Yeah. I don't really know how to do that kind of stuff yet. So I, yet I called them and I said, look,

I would like to have my own agency and I'll move wherever I'll move to the Midwest. I'll move Northeast wherever you need me. I'll do it. And they said, well, Chris has to sign off on it. And we've been asking him for about nine months to sign off on you. Cause you'd be an incredible general agent. We know you would be James.

I said, what do you mean? He's got a sign off on it. You guys don't make that decision as a company. He said, we don't because he hired you. He brought you in. He gave you the proficiency test. He in a weird, weird way owned you. Yeah. I said, well, I said, here's the deal. I said, if that's the case, I, I, I

I can just tell you now my days are limited here. I'll, I'll find another way. Yeah. And, and they said, we don't want to lose you. I said, well, then figure it out. Get Chris, get Chris to do what he needs to do. So I go to Chris. Now, by the way, Chris and I are still friends. We had breakfast the other day. Chris and I are still very, very close. Yeah. I love Chris.

But this is a, this is, well, he's looking at it like it's business. And it is, it is. I totally respect his position here. Yeah. But, but this is a young, ambitious entrepreneur. And, and I promise you, if that's who you are, you can't let stuff like this stop you. You can't let this stuff get in the way. Yeah. But let me ask you a question in that situation. This is where Chris screwed up, right?

Would you have done a deal with Chris where you got to be a GA and paid him a 25% kick? Not 25, but I'd worked out a deal with him. Yeah, and you'd have been happy to do it. You'd have been happy to do it. Happy. It would have been easier for me to do that. I'm married now. I just got married at this time, at this age, and she didn't want me to leave. I'd have stayed. Yeah, but my point is, dude, you can't cut the deal. You can't be greedy.

Like you don't, you don't get to keep it like here over the years. We've, we've, we have amazing people that work at our company. Right. And we've had over the years, some people that split off and want to go do their own thing. Yeah. I want to go up in their own company. I'm like, man, I wish you well, it's hard. Yes. It's really hard, but I wish you well, because that's the nature of the beast. And I think if you start trying to, you know, you know, I always ask people, I want to leave here. I go, I go, is it about money or is it about a dream? Yeah. Yeah.

And if they say it's about money, I go, then don't do it. You're stupid. Like, it's going to be really hard to make money doing this in this economy. If it's about a dream, if you've always had a dream to own your own shop, go do it. Yeah. And you're relentless. Go do it. Yeah. Go do it. Anyway, sorry about your story. No, no, no. That's right on. But you get your own agency eventually. Well, here's what I do. I let Chris know, you either cut me loose.

Or I leave one way, you know, I'm leaving anyway. And he says, I just can't do it. So I did the hard thing. I went and found a office to lease. I take the receptionist who's at Chris's office with me, Elizabeth. She's my receptionist. She's been processing my apps, doing my paperwork. So if I leave, she leaves. My six guys leave. I tell my wife we need desks in this empty cavernous space that I've rented.

I need one for Elizabeth, I need one for me and the six guys. So we buy Office Depot desks that you have to assemble. My wife spends a weekend assembling desks with an Allen wrench. Those desks get all set up. We're now running an agency. I don't have a contract yet. I have a logo. I have a brand. I do not have a contract yet. So a guy that I really admired who worked for Chris and had left maybe a year prior,

Went out on his own. I go have lunch with him. His name's Scott. You may know this guy. Scott Childress is his last name. Name's familiar. Scott Childress was a baseball player for the California Angels. Rebels, California Angels, and then he's at Zockel's agency, and he's very good. Okay. Very good. So I said to Chris, I need a contract. Who are you using? He says, oh, I've got your contract. I know what you need to do. I said, tell me. Tell me what you're doing. And I'm at this point...

I don't just follow people around. At this point in my life, I've seen enough, been without enough. I keep my own company, if that makes sense. I take data very rarely and move. If I'm headed in a direction, it's hard to move me. So I'm basically investigating Scott's idea. But I do need a contract.

And so he says, listen, I'm with a company out of Atlanta, Georgia called the World Marketing Alliance. I said, never heard of them, but it sounds real cheesy. That's what I said. World Marketing Alliance. I said, it sounds like Amway. What are you talking about? And nothing's more disgusting to me in my mind at this age than some type of MLM stuff. Okay. I'm a licensed guy. I'm professional in my head.

Dry cleaning. Okay. So in my mid nineties, that was, that was the way of the business. Primerica. That was the way the business. It's all over the place. And I, and I'm disgusted by the idea of it. And this is just my little arrogant way of thinking. Okay. It's not right. It's just the way I'm thinking. Okay.

So he says, World Market Alliance, you'll have your own contract with all the carriers. We've got lots of technology, lots of tools, lots of software. And I'm thinking, okay, that sounds great. It's a split. Yeah. And I said, I did ask him, I said, how much do you make on my efforts? He goes, well, if you do nothing, I make nothing. But if you succeed, you'd be a first generation manager to me. And he says, the great thing, James, is you can build your own general agents. Right.

And I thought, okay, that means I'd never lose a James Catledge. If I find one, I don't have to lose him for his ambition. He can stay. And so that was very appealing to me. The idea that I could hire someone with my mindset, my skillset, and they never leave. And so I go on, it takes me about eight years, but inside that culture, that's where I made $59 million with that one company. Okay.

Now, if you want to know how it ramps up. Now, we can't. We're going to run out of time. We've got to skip ahead here. So you're making a truckload of money with insurance. Truckload of money. Truckload of money. Everything's fine. I'm going to make it a truckload of money. We've got to get to it. We've got to get to it. Okay. How do you go from you're so incredibly expensive. You're killing it in insurance. You're crushing it in insurance. Yep.

how do we wake up i'll tell you in a pond we didn't just wake up in a ponzi scheme and it was not a ponzi scheme although that is the the the journalist view of this uh here's what happened uh world market alliance is sold

My mentor, Hubert Humphrey, sells it to Agon, a publicly traded company. I stay around one more year. We renamed the company World Financial Group. I leave. Better name. Yeah, definitely. I leave World Financial Group, take about 300 guys with me. They write me a check for several million dollars because they're going to keep the rest of my guys. And now I sign a non-circumvention on the rest of my guys. I'm not going to take them. But I do have 325 that left with me.

I start my own company. I now go get my own contracts. Agon provides me with one of my contracts, by the way. And I end up recruiting 8,000 agents. Not direct, but through my organization, I have 8,000 licensed guys. We are selling, you just cannot imagine the volume of transactions that are happening. But how do you go from there? I'm getting there. I'm getting there. I have a real estate. Everybody, this is back when your housekeeper owned three rental properties. Okay.

Okay. Sure. Okay. We all remember this, right? Everybody owned rental properties. We have no real estate to offer inside our portfolio. None. We're insurance, we're annuities, mutual funds. There's no real estate. It seemed like an omission. So I tasked my CFO to go find us real estate. I don't want everybody to be with Century 21. It's a conflict. It doesn't make sense to get them all real estate license. We could lose half our guys.

I said, find us an opportunity to offer real estate to our clients so that we have that in the quiver. He brings me a father-son developer team out of the Dominican Republic. They pitch us on their existing hotel operation. They want to turn into a timeshare operation. Now, they're going to leverage their existing paid-for hotel

They're going to create timeshare fractional interest in it while they build out a new property. And then we're going to leverage fraction that one and build out a new property. So we're going to build three properties. The brand we're operating under is Maxim. You know, the men's magazine Maxim. This is our partner in branding. This is just the real estate side of my business. Okay.

My guys are offering anywhere from $15,000 to $300,000 condominium fractional interest in the Dominican Republic on the ocean called the Maxim Bungalows. So if you're Googling this, Google Maxim Bungalows, Dominican Republic. That's our property. For five years, we sell $180 million worth of condominiums on the ocean in the Dominican Republic. In the sixth year, my partner and we...

All money's flowing beautifully. I'm paid. Company's paid. My clients are being paid. Everybody's winning. In the sixth year, it's 2006-7. The world's turning upside down economically. Yeah. Okay? Vegas specifically. Money is less available. People don't have 401ks, IRAs. They're being depleted. There's less money to borrow, less liquidity in the market.

My partner says, you've got to increase cash flow here so we can... Stripe helps many of the world's most influential companies grow their revenue and build a more profitable business. Whether it's Hertz making checkout a smooth ride for their customers, OpenAI answering unprecedented demand, or PGA chipping away at back office inefficiency, Stripe's financial infrastructure platform helps companies achieve ambitious goals. No matter what success looks like for your business,

Stripe helps ensure the complexity of financial systems doesn't get in your way. Learn more at stripe.com. Have you ever spotted McDonald's hot, crispy fries right as they're being scooped into the carton? And time just stands still. Finished this third property. I said, what do you mean? We're selling these units.

And you're basically taking the money assigned to room 101 and building it. What do you mean we need to increase the capital? He says, I'm telling you, Catledge. That's the way he spoke to me. I'm telling you, Catledge, father, son, you've got to increase cash flow or we have a problem.

I said, well, what could be the problem? We've got two finished hotels that are paid for. We're in the middle of the third cash flows type, but we're selling the units as we go. The clients have contracts. And by the way, the largest law firm in the world, Greenberg Taurig is paper and all this stuff. So this is all vetted. Everything's legit. There's no, there's no schemes that I'm aware of. He says, uh, we're going to run out of cashflow and I'm not worried about you. And I'm not worried about your people. I'm worried about the clients. I said, well,

Well, you have to pay the clients. They bought the units, so it's not constructed yet. You have to pay them their dividend that they're due until the thing's constructed. He says, we're not going to be able to do that. So my clients don't know anything about the Dominican Republic except for me leading them there. Sure. They couldn't find it on a map except we took them there. And we did take them all there. And they're all going there to do the transaction.

I meet with the largest law firm in Nevada here who is my lawyer for my company and my business dealings. Lionel Sawyer and Collins is my firm right downtown Vegas here. My attorney says to me, I'm concerned your partners are not using the money the way you think they are. Yeah. I said, well, what's your legal advice? He said, I want to meet with their attorney here in my office. We bring him up from Santa Monica.

They meet together. At the end of that meeting, my guy comes to me and says, I'm so glad we got that on the record. I made lots of notes. You're involved in a crime, an ongoing crime. He says, I've got all the notes on it. The guy basically explained that they're taking new money and using it to pay old obligations. That is the definition of a policy scheme. I said, okay, so what do we do? He says, you need to sue them.

and get a receiver appointed to the property so they don't further diminution the damage to your clients. So I do. I pay $1.3 million to a law firm in Miami, Florida that my attorney helped me select to sue in the Turks, Dominican Republic, and Canada where these guys are from.

in federal court in Miami. I spend 1.3 million, 644 clients are in this lawsuit. We're all plaintiffs. My salespeople are in this thing because we all own these units too. My wife and I, my mother, all of our friends, we're all in this stuff. We own these condos. The judge says after nine months of pre-litigation in the court, pre-trial stuff, he says, I'm closing the resorts. We're turning them back to the bank.

And you guys need to sue separately the salespeople and the developer. Don't just sue the developer. The judge instructs my 644 plaintiffs to put the target on their salesperson, which is not me necessarily, but I'm running the company, and then name the company. So I now have 644 potential lawsuits, individual plaintiffs who have a claim that a judge has suggested they have.

So this turns into a nightmare. SEC, IRS, Department of Justice, all the windbreakers decide they need to take a look because the judge has suggested this.

They take a look. I tell the FBI, I meet with the FBI and I let the FBI know, Hey, listen, I'm available for as long as you need to meet. So you understand everything that's going here on here, the moves I've made, the moves my people have made. So you understand the products we sell. I'm available for whatever you need.

We meet for 14 hours against the counsel of my lawyer. He says, don't ever meet with them. Don't ever meet with them because they will figure out how to create a case if they don't have one yet. But I just felt like they needed to know how it was all working. I just felt like aiming the missiles at me would be inappropriate and certainly disproportionate to what really happened. And so I wanted to be helpful.

Well, I didn't understand that cooperation means you've got to say you did something wrong. Confession. It means you, yeah, you have to say you did something wrong and then we charge you and then we go lenient on you while you help us get the other guy. I said, I will never do that. You're talking to the wrong guy.

I have nothing to confess. I have nothing to admit to. There is not an email. There is not a Blackberry. There's not a text message. There's never been a smoke-filled room. And oh, by the way, if you think I'm the dummy, you think we got in a room and decided to split the dough and I would take 20% and he would get 80? Yeah. You met the other guy. You think I'm the 20 guy? Yeah. Okay. So this is the discussion I'm having with the authorities.

And I said, look, I was paid pure commissions. That's all I've always been paid. My guys were paid pure commissions. My clients were paid the returns they were promised. All my paperwork, my lawyers. I will never admit to something I did not do under any circumstance. Well, seven years into the tenderization of the United States government, the process, my attorney convinces me that the crime that they will likely convict me of

is worth 28 years in a federal prison. Yikes. So you can either find a way to find something you did wrong that is a crime so that we can plead guilty to it, or we go in and hope we don't gamble on 28 years.

And I said, I did nothing wrong. There's no evidence. I know what went down. There's plenty of ways. I own this stuff. I own this. I have contracts where I put my money in this stuff. My mother's in this stuff. If this is about facts, if this is about truth, there's no case. If it's about anything else, they could probably win.

if it's about a narrative, if it's about rich guy versus poor guy, I'm going to lose on the rich guy gamble. He said, well, let's face it, James, you got all your money. You're paid 36 million directly, 36. These folks may live in a cardboard box. Now you're going to put 13 of them up on the stand with Kleenexes. Yeah. You got an airplane with pilots, your handicaps five, you've played Augusta national. You've been all over the world. So you're,

It's going to be hard for a jury to believe you didn't know something that you didn't know. Even if you were willfully blind, that's a crime. So we get into all that. And in the end, two weeks before trial, my attorney says, let me go negotiate a deal for you. You must let, don't be delusional here. Don't be arrogant. Don't be delusional. And I'm telling your audience, I'm telling you right now, I don't care how smart you are, how sharp you are, how clear you are.

I want you to understand you can be convicted of a crime tomorrow afternoon if it's the government's wish to do so. So don't be arrogant. Don't be thinking, oh, you shouldn't have gotten in, shouldn't have got yourself into something. There's nothing to get into here except real business, okay? And everybody that's in real business could be taken down tomorrow afternoon if they're arrogant enough to be so. If they want to do it. Yeah, it's all about...

what they would like to do and the narrative they can create with a jury. And my attorney- So what did the jury end up giving you? I didn't end up going. I was convinced by my lawyer to plead guilty to one count of mail fraud. Which was how long? I pled guilty to a five-year cap, meaning no matter what the judge says, I cannot be sentenced to more than five years.

So that's what I agreed to. And mail fraud has up to 20 years in the statute, but I wasn't going to be open-ended in my plea. No. I pled to a cap of 60 months.

And I went in and told the judge that I felt horrible about what had happened. This is called your elocution. Horrible about what happened. I had no intention whatsoever to harm anybody. I didn't need to harm anybody. There's no motivation for me to harm anybody. I would have made more money had the project continued forward with no harm. But...

We find ourselves in a situation where responsibility has to be taken. I'm willing to take it. I'm willing to do time on it. And so I played guilty to one count of mail fraud and allowed myself to be sentenced to 60 months in a federal prison. And I was very blessed. What happened to your personal finances? Did they come get your, did they attack your personal finances? They don't come get them. You use them to defend yourself.

You end up in eight years with no cash flow living. Did they hit you for restitution on all this? Sure, sure. Yeah, I have a restitution agreement, which I honor with the U.S. government, which is a manageable situation, which anybody that's got restitution, it can be structured where it's manageable. And I have one and I honor it. Okay.

but I did 14 months is the bottom line. That's what I want to get to. I did 14 months inside. And, and I will be honest if, if I compare my mission to those 14 months, those 14 months changed my life forever. The guy I am right here today could not, I like me today. Yeah. Okay. Now I like me then too. I was a happy guy. You made me then you'd like me then, but I have a depth of compassion and sensitivity that simply was turned off

prior to going inside. I don't know when it got turned off. Maybe it got turned off as a kid when dad pulled out, but it got turned back on inside. And, um, and I was able to help a lot of guys. They changed my life. I made a difference. I had influence on the yard and, um, you lead wherever you go, by the way, I don't care if you're inside, outside you leaders lead.

And, uh, my life is for, I am friends today with a fraternity of brothers, some guilty, some not most are, and it doesn't matter inside. It doesn't matter. Um, and, and that, that fraternity to this day is important to me. They'll call out of nowhere and I'm there for them. And, um, I would never met these men. I've never been in their neighborhoods. I did. I'd never known them. And many, many,

Very high net worth, very successful entrepreneurs also inside that there's a lot to learn. So what's the focus now? Well, I'm a consultant today in the very space that I had all my success in. I helped several local financial services firms and then some that are national. I've developed a piece of technology that's quite profitable, a subscription-based model that scores clients on their retirement readiness and tax efficiency, and

AI based subscription model for financial planners so that they've got my brain in every appointment. So if they're sitting with someone and there may be new or maybe have a lot of experience, it literally, the AI is, was inferenced on me. It was trained on me and how I would handle an appointment, what I would do, what I'm looking at, the questions I would ask. So that's what I'm doing today. That's what you're doing today. When you are,

When all of this kind of came down, right? And obviously your whole life changes in an instant. Yeah. It goes the other way.

You know, a lot of the people that you, you know, you thought you were doing right by me. Dude, I have a similar, look, I don't have a $180 million problem. Sure. But I had a million dollar problem. Yeah. Where I had taken money from my friends and family and people that I knew. And investment. Investment in something that wound up not being what it was. Yeah. And I ended up having to pay it. I paid it all back because I didn't want to have that. Luckily, I mean, look, a million dollar hill is, $180 million is a lot different than a million. Yeah. And since then,

You know like some I have a friend of mine that's doing a very good business right now He's got a very good business model. It's very smart It's very sharp and I was gonna try was supposed to get in as an investor to it prior to them doing a series B Fund raise the problem was the valuation that I was granted would have would have not been the valuation series B was was being offered at and it screwed the deal up a little bit and that's fine I get attorneys getting away things all the time and

But, you know, he hit me up now, came back and was like, hey, and this is a good friend of mine. I believe in this business. It's a good business. But he said, hey, you know, could you put it out to your people and see if anybody wants part of the Series B? And I just, my response was, bro, I can't do that because I will never again raise money for anything that I don't have total control. I totally agree. I just won't do it. It's a wise position to take. Yeah. And I love him and I love the business. I was going to invest in his fund, but I just won't do it. Totally. Totally.

I was naive. Because of this. I was naive to many things there. And I'm not blaming anything that went on to naivete, but I did not know enough about cash controls on a real estate venture to be that deeply involved. I was the, I was the, basically their sole source of capital. And we were very proficient at our part of it. But I,

Too proficient to not know enough about the other side. I just didn't know enough about the other side. I think, too, if you look at that time, if you look at that time, because I was in real estate at that time, and you look at how fast everything was going. It turned upside down. Everything was going so fast. Yes, yes. You know, I mean, no income loans and nothing was getting vetted. Liar loans. People just in a deal and just...

I just made 50 grand in this house, so let's just buy that one. It's just everything was going so fast. - Correct. - On every level. - That's the era. - On every scale. You look at, I at the time, during that boom time, right when I first got into real estate, I was selling, there was a company here in town called SunVest.

that was doing condo conversions all across the country. And we would just go to these real estate shows in like San Francisco and just stand in front of the room and then just literally present five projects and then sell 200 condos. Absolutely. And like 300 grand. Fundings everywhere. And then two years later, I'm sitting in Vegas selling those units that I was selling for $350,000. I'm selling them as foreclosures for 40 grand, 30 grand. It was crazy. And it just...

you know so so look i'm not gonna i'm not gonna fault you for going as fast as all of us did at just a much bigger scale yeah i just i could because i was anybody that wants to throw stones at you at that time i was in them i was living it yeah we were all we were all running fast that was one of many things we were doing we were still running the big financial services firm this was a division of that this was extra money this was extra exhilarating it was extra good lord and and we were good at it they they loved us they and

You know what? I don't know how much it made me think this goes on a lot and we just don't know it. As long as the project finishes, nobody asked the questions. See, I think skimming goes on a lot. I think of all these big buildings that get built in my mind. I'm thinking there's probably guys like me that raised the funds to build these big structures and the guys building it and have everything padded and invoiced way beyond reality. And this thing's getting skimmed on the whole time. As long as it gets finished. Well,

Nobody's got the questions. Rule number one of any construction project is never let your contractor get ahead of you. That's it. Ever. That's it. Ever let them get ahead of you. I don't care if you're remodeling your bathroom or you're building a high rise. You never let your contractors get ahead of you. That's exactly right. You're always building incrementally in arrears to the work that's getting done. Correct. The only thing you're ever fronting is material. Exactly. That's it. So let me ask you one more question before we go, just because I think this is something that

a lot of people, like this whole story, right? The thing that I think probably we didn't talk about that I find that I want to understand is the reputational collateral, the damage that was taken. Great question. Right? Like, how do you deal with

Yeah. With somebody at your heart that you feel like you're doing the right thing. You're just trying to do the right thing. Yes. Yes. You're crushing. Yes. You're doing this. Everybody around you is making money. You feel like you're doing the right thing. And then all of a sudden I got to believe, especially in the circles that you're, you're in with that tight net church community. Yeah. Right. You are a pariah. Yeah. Yeah. Let, let me, let me deal with this. Cause this was hard. This is such a great question. This is a great, this is a great question. Let me, once, once it's destroyed and it doesn't take long to destroy it,

You have to come to the, and this is really important to get, you have to come to the reality that you didn't build your reputation. What you actually built was your character. And that's all you ever had control of ever anyway. And so I believe a lot of my rise again, my second rise, if you will, my return, my restoration is tied to character because the people who knew me before are still with me today.

When I was released, I had hundreds of people that I know, contacts, even victims, people who lost money that know I had nothing to do with it, come to me and say, you're starting over. Do it with me. You're starting over. Let's do it together. I know you need a break. Consider what I'm doing. All of these moments happened, and I attribute it, and I wouldn't have known it ahead of time, but I certainly wouldn't have planned for this to occur. But you realize that how you manage the...

difficult times will determine where you land when the storm clouds pass. Like, like either you grovel and become a sourpuss and become a victim and become, this is, this is terrible. You should never done this to me. I, government has taken me down a road I should never been on. Or,

You say, you know, I can't do anything about this. I've got to focus on the controllables, control the controllables. What I can't control is how I treat people. What I can't control is how I manage this situation. What I can't control is my spirit. My spirit cannot be taken. You can take everything from me, but you can't take my soul. I have to give that to you. And so you make some decisions in the difficulty that frankly are part of the chemistry that's already you.

It just doesn't get tested until this moment. And it's in that testing you realize, you know what? You can have the reputation. I'll take the character. Because with character, you got it all. You got it all. And you're totally at peace with who you are day and night and your friends who you're friendly with.

They're the friends who know you. It's not the guys who want to get in the plane. It's not the guys who want to get to Augusta, go to the Super Bowl with you because you're rich. It's the guys who love you, who know you, who can look you in the eye. You're their trustee on their family estate because they know who you are. So I think the lesson for me that I couldn't have learned unless I got to the backside of it is character is all that mattered anyway.

I think we'll leave it at that, man. If they want to find you, James, where do they find you? You know, I have a podcast inside out with James Catledge. It's on YouTube, Apple, Spotify. The whole story is told there in small bite-sized increments. It's an honor to be with you today. And I appreciate being a guest here. No, thanks for coming in, James. Well, listen, man, if you listen to that, I think there is a, there's definitely, I think that last question is the takeaway, man. We talked about so much stuff today, but listen,

Life is going to give you ups and downs, and sometimes those are self-created, sometimes they're not. But at the end of the day, you need to focus more on who you believe you are than who other people think you are. We'll see you next week.

What's up, everybody? Thanks for joining us for another episode of Escaping the Drift. Hope you got a bunch out of it, or at least as much as I did out of it. Anyway, if you want to learn more about the show, you can always go over to escapingthedrift.com. You can join our mailing list. But do me a favor, if you wouldn't mind, throw up that five-star review, give us a share, do something, man. We're here for you. Hopefully, you'll be here for us. But anyway, in the meantime, we will see you at the next episode.

With HubSpot's built-in AI, you can get more done than ever before. Breeze agents help you do things in seconds that used to take hours. And CoPilot keeps you two steps ahead, giving you the right insights at the right time. Get started today at HubSpot.com slash AI.