The Dead Pixels Society podcast
News, information and interviews about the photo/imaging business. This is a weekly audio podcast hosted by Gary Pageau, editor of the Dead Pixels Society news site and community.
This podcast is for a business-to-business audience of entrepreneurs and companies in the photo/imaging retail, online, wholesale, mobile, and camera hardware/accessory industries.
If you are interested in being a guest on the podcast, email host Gary Pageau at gary@thedeadpixelssociety.com. For more information and to sign up for the free weekly newsletter, visit www.thedeadpixelssociety.com.
The Dead Pixels Society podcast
Financial Literacy and Entrepreneurial Skills, with Peggy Beauregard
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Peggy Beauregard, a veteran in the world of commercial real estate, graces us with her presence to share over four decades of wisdom. Discover how Peggy transitioned from hands-on property management to becoming a limited partner, reaping the rewards of real estate without the everyday grind. Learn the ins and outs of diversifying income streams and the strategic advantage of turning to real estate as a steady asset class, especially as markets evolve. Beauregard's insights on embracing economic changes are not to be missed for those looking to secure financial growth and stability.
We dive deeper into the crucial subject of planning business exits, particularly as retirement looms on the horizon. Uncover the necessity of significant financial reserves, potentially up to $2.8 million, to ensure a comfortable future. We'll dispel myths surrounding business valuations and reveal why the real payoff is in the profits and dividends earned over the years. With examples of multigenerational businesses, she explores effective strategies for handing over the reins, whether through selling, liquidation, or generational succession, underscoring the need for foresight and preparation.
On a lighter note, we highlight the importance of nurturing financial literacy from a young age. Richard Wilson's approach to instilling entrepreneurial thinking in his children shines a light on the timeless principles of integrity and customer care. These values build a sustainable business and prepare the next generation for future success in an ever-changing world. Beauregard caps off our episode with a call for continuous learning and networking within the real estate industry, offering her expertise and encouragement for listeners eager to enhance their financial journeys.
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Hosted and produced by Gary Pageau
Edited by Olivia Pageau
Announcer: Erin Manning
Welcome to the Dead Pixel Society podcast, the photo imaging industry's leading news source. Here's your host, Gary Pageau. The Dead Pixels Society podcast is brought to you by Mediaclip, Advertek Printing and Independent Photo Imagers.
Gary Pageau:Hello again and welcome to the Dead Pixels Society podcast. I'm your host, Gary Pageau, and today we're joined by Peggy Beauregard of the Nest Egg Builder. She's coming to us from Southern California and she's been investing for 40 years. Hi, Peggy, how are you today?
Peggy Beauregard:I'm fantastic. It's so nice of you to invite me. I'm very honored so.
Gary Pageau:Peggy, tell me a little bit about your experience as an investor over, you know, four decades, the kind of the basics you learned that have carried you now to this point.
Peggy Beauregard:Well, thank you for asking that and commercial real estate in particular, because one of the things I learned early on is that the tax advantages when you are invested in real estate are something that are not offered in the stock market, and I'm kind of allergic to the stock market.
Peggy Beauregard:So I have invested, I've been a lender, I've done my own deals where we bought properties. I put people together, we buy properties, we'd fix them up, and then I became later, after I put enough away, I started becoming a what's called a limited partner, where I would invest my money with somebody else and they did all the work. Because there could be a point and I know we're talking to a lot of entrepreneurs, so entrepreneurs know that there's a point where you're tired of doing all the hard work yourself, right? So I became what's called a limited partner, which means I put my money in with somebody that's still willing to do all the hard work. I work in the commercial world, so I work. That means invest my money because I did work to earn it. Work that means invest my money because I did work to earn it and I put my money in like the self-storage mobile home parks, multifamily industrial retail.
Peggy Beauregard:We're not doing a lot of office right now, but that is coming back a little bit It'll just take a little bit longer and we have to pay attention to all the economies.
Peggy Beauregard:Because we invest all over the United States and we work with other people who want their money invested. Because we can all have our principle working for us and never worry about running out of money, which is why I'm doing this. I expect that I'll be living to be at least 100 years old, because I have that longevity in my family and I don't want to run out of money. I want my money. Working at at least 8% usually somewhere around 20 makes me much happier. I like double-digit returns. Double-digit returns are the best.
Gary Pageau:Everyone would love to have a 20% return. I think these days.
Peggy Beauregard:Yeah, well, they're not always.
Gary Pageau:It's probably not realistic for most people, but knowing that you know my audience is primarily, you know, small business owners, entrepreneurs in that space, who you know they're running primarily service businesses, right they're. You know they're processing other people's work. They're not really building a capital foundation. What would you say to those folks in terms of maybe diversifying their asset allocation to consider maybe some real estate or commercial investments, or even just buying the building they're leasing as an option?
Peggy Beauregard:Oh, absolutely Well, and you have to set that up differently so that you get the right tax deductions. But we know how to do all of that and we consult on things like that. Absolutely, we should all have at least two or three or maybe four or five or six different income streams coming in. Can't just depend on our own business for that, particularly if we're looking to transition in some way. We look at very different ways, like can you do some sort of consulting? Can you affiliate links? All these people have affiliate links.
Peggy Beauregard:Well, you refer someone to someone else and get paid a little bit every time you refer someone. So, just, it's just little things like that. Again, I think real estate is the best because you can invest in a multiple number of different real estate and have cash flow coming in from five or six or 10 different assets and you're set. But yeah, you always have to be looking, because when you're in, when you're entrepreneurial in the business world, the economies keep changing. So you've got to be prepared because you never know what's going to disappear or what's going to reappear or what's you know.
Gary Pageau:Look at, we don't know because I mean, I mean you're exactly right Because, like, for example, you know, in our space, the photo imaging space, right, there is the chemical film print. You know dynamic, right where you took a roll of film and you process it and you need to're printing on. You know glass and tile and and ceramic and wood and canvas and there's all these great things where people are printing on um. So so the process changed, but the hopefully that the business didn't change that much. So but that also gets into some of the things that I think business owners wrestle with, which is reinvesting back in their business, Because if you're one of these small photo companies and you have all these opportunities to buy equipment, to do all these other things, you may actually be limiting your growth potential because you're tying a capital you could be using elsewhere.
Peggy Beauregard:Right and you don't know where you're going to need that. You were talking about that and I was thinking you know, eight tracks are gone, right, well, and all of that's gone. You know, I have a computer now. I used to be able to put, I used to be able to put a dvd or cd, and now there's no place to put any of that. And I found a whole bunch of pictures that are on cds and I'm like how am I going to see what's on there? Now they've got those cam, whatever those things are that you, that the pictures just keep running Digital picture frames.
Peggy Beauregard:And they go on the Internet and they go to all your family and I don't know, my family's got all everybody's got their own color. So if they've all been having dinner together, and when they get home they hit this thing and it changes the color. So you know that person got home. Ok, like that's a whole world. Whoever I mean whoever thought of that. I think that is genius, because then you just hit it when you walk in, you don't have to worry. My sister's like call me when you get home and I always forget because I'm home, yay.
Gary Pageau:So anyway. So let's get back to that sort of equation that a business owner needs to look at in terms of you know investing, because they would say, hey, they're investing in their business, but you know. Let's say, you know their business probably isn't getting your 8% to to 20 percent, that your target number is right. I mean, if they're, if their business is getting you know five or six percent, it's probably doing pretty well these days. Just knowing how the, you know the, the that business world is. So do you? Is there a formula or an equation or a guideline you have for people to start looking at redirecting some of their capital into outside of their own business? Is there a number or a percentage you think they need to reach?
Peggy Beauregard:Yeah, Well, I think you just opened a can of worms. Really, I talked to a lot of people about money, money working for you and retirement, because we some of us are never going to retire but we still want to have that money there that you need to look at how much it's costing you to live, how much it's costing you to live and you've got to take.
Peggy Beauregard:So there's some things that you're using for business right now, but one day like your phone, your phone you can write your phone off right now, but one day that'll be your own and you will have that expense coming out of your own pocket. You need to look to see that you need to have somewhere like between 10 and 20% of whatever your money is. So most people who need between 10 and 20% of whatever your money is, so most people who need between $60,000 and $100,000 a year need to have about $2.8 million put away and have that money working for them. When you think about that, most companies aren't going to sell for that kind of money. Right, You've got to be putting your money away. When you are making a profit, you need to take part of that profit and put it into a savings account of some sort or life insurance policy that has compounding in it and then use that cash value to invest that money into something else.
Gary Pageau:Right.
Peggy Beauregard:That's why we like to teach people about how to invest, what it takes to save the money, and then how to invest it.
Gary Pageau:Yeah, because I think that is one of the things that always I know in my marketplace, where I talk to business owners who are looking to exit and maybe they expected the valuation of their business to be higher because they think so highly of it and they just think, well, of course it's worth more. I've done all this work and the reality is the reward came before when you were taking your dividends or your share or your payout or however they were. You're getting paid. That was your reward. The sale for the business is really future potential.
Peggy Beauregard:And here's one other thing Most people don't know how to set themselves up to sell their business. I started, I met this gal. Actually she's quite an amazing woman and I'm sorry her name slips my mind at the minute, but she wrote this book called Quit no. She wrote it's called Exit Rich and she tells you all the things you need to do to get ready to sell your business. So, just as a suggestion read a book or call her and there's people that will consult with you on all the things you need to do to make sure you're ready to sell. What is it that? Not the asset, the class of business they all sell for different, you know, two or three times of whatever their grosses or their net, depending on what the appraisers say.
Gary Pageau:And all different multiples depending on.
Peggy Beauregard:Yeah, the multiples and your EBITDA and all that stuff. You've got to know all of that.
Gary Pageau:But you know, sadly, you know, I think when some people get into some businesses they are not thinking about how they're going to get out of it, right?
Peggy Beauregard:When you go into real estate, that's one of the before you even put your money in, you want to know what the exit strategies are. So that's the great thing about real estate is are there exit strategies? And we've got people that what they do is that some of them like turn the property, fix it up, sell it in five to seven years or whatever their timeline is. We have other people that actually buy you out because they don't want you in. They want to be owners. So you get money back and now you have all your money to reinvest. So you need to know your exit strategy.
Gary Pageau:But I would say that's true for almost every business, right that no matter what you're doing, you should have an idea how you're going to get out of it, whether it's even just liquidation, right? Like, hey, listen, I know after 10 years I'm just going to liquidate and be done, and I set my finances up for that. You're not forced to do that, but you know, or else I'm going to sell. And then how do you set up the business to sell at the right?
Peggy Beauregard:multiple that you want? Yep, my grandfather started Arborist. He was Arborist, started a business in the depression and it went three generations and they just sold it to another company. So, yeah, you need to know. So what how it used to work is. My children will take over the business, right, but that's doesn't really exist that much anymore.
Gary Pageau:I don't think well it does, may not exist. I mean, it's interesting because it kind of depends on the industry too. Right, like I like there's one segment of the industry that I work in, the the volume photographer, and it's right, the people who take school pictures, and there are businesses there that are 100 years old and they're run by the grandkids and it's it's amazing how they've trained and there's multiple examples in that business of of multi-generational family businesses and they know they're an anomaly because they know most of them don't make the transition Even beyond the second generation. It's very unusual because sometimes the kids are not the best people to take the business over.
Peggy Beauregard:That's right. It all depends on how you raise them and then what their interests are. That's why we like to start talking to our children when they're four and five years old and bring them into the business to start working on it early, so that they you as a parent will know whether this is the right thing for them or not, so that you're prepared that they're not going to be the right people to run your business life yeah, yeah.
Gary Pageau:Well, you know there's a lot of people don't, who don't want to, you know, address the reality of life decisions, right, they want to put things off, and put things off, and put things off, and I think business owners can do that too. They're so focused in the day-to-day operations that they don't look at you know the way out, what maybe the best out, and you know either, if the kids aren't going to take it over, all right, do any of the employees want to buy into it? How will that?
Peggy Beauregard:you know, because there's a lot of robbins, tony robbins. The only thing that tony robbins has is tony robbins. So what did he do? He brought all the people that are his that work for his company.
Gary Pageau:They own the company what's going to happen when he's not on stage anymore?
Peggy Beauregard:well, they've got that. They're working on that yeah, right they've got. They've got everything that he's ever said recorded.
Gary Pageau:I don't know what they're going to do with it, because all tony and tony will make him into a hologram or something and he'll just I don't know what.
Peggy Beauregard:AI Exactly.
Gary Pageau:I don't know. I actually had a guest on the podcast a while back who was actually one of the fire walkers trainers for Tony Robbins, so I got. So this is sort of a Tony Robbins revisited top section of the podcast.
Peggy Beauregard:Yeah. I've walked the fire a few times, not just with him, but with others also. Oh, that's cool. Yeah, it's hot. No, it actually is cool. You don't even notice, so people get all crazy about it. And Tony Robbins was the easiest one I ever did. It was like five steps. I'm like oh, I'm good with this.
Gary Pageau:Happened to be raining too so that was nice, and they know what they're doing, because they've done so many of them too right.
Peggy Beauregard:Right, that's right, right. And so all entrepreneurs. They've done so many things of whatever they do, and they're experts at it also. One of the things is, again, our communication with our children. Don't start early enough in life.
Peggy Beauregard:Again, our communication with our children don't start early enough in life and then and then people get upset because their kids don't want to come into the business, but they didn't bring them in the business when they were five or six years old but don't you think people would argue that that is disrupting like the work-life balance wouldn't?
Gary Pageau:wouldn't most people say you know there's your work life and your personal life and those should be well, now it's kind of intertwined. But what would you say to folks who are saying well, you know, it's two separate, I'll bring them in later. Why is five or six the age? I guess is the question.
Peggy Beauregard:I heard a Catholic priest tell someone else that if you give me a child, by the time they're five I will give you a Catholic, and I took a lesson from that. And if you give me a child and I talk to them about money, by the time they are five they will understand money. They will understand not all of it, but they will understand not all of it, but they will understand the basics of it. They'll understand what it takes to buy something, for instance. They'll understand what the work is like. Any job I've ever had, I've always felt I should be doing everything. So how do I know what to expect of an employee if I haven't done it myself? Right? So that kind of thing. And how will your kids? How will you know if your kids like it or not if you don't bring them into it early?
Peggy Beauregard:right part of their life. Right, this is what mom and dad do. Right, it's what I'm gonna do. I go to a family office club richard wilson's family office club and he his kids, say they want something, and he tells them okay, let's think of ways you can earn the money so you could buy that. And he's got them out on the street with their lemonade stands. They are doing all I mean really seriously. I mean part of the book I'm putting together.
Peggy Beauregard:I will have his recording and transcription in the book about how he talks to his kids. All his kids know everything there is to know and they're not quite teenagers yet, but they've started about money at a very young age because it's part of life, right? We learn how to walk, we learn how to talk, we learn how to do that. You know, tie our shoes and tell time. Why isn't money a part of that? Why isn't?
Gary Pageau:kids today can't even make change, so which is what shows that it's gone to the extreme on the other end? Right yeah?
Peggy Beauregard:Oh yeah, make change, yeah, but I mean, but all of that, we we don't look at it as part of life, and yet it is part of life. We make up these stories but we don't know, you don't know what other people are thinking. And if you actually sat down and talked to your kids and listened to them, they have ideas right. That could probably make you a millionaire If you listen to them and take it in, because kids come from nothing. And then about this age of seven or eight or nine, all of a sudden you see they start acting differently and now they start closing down a little bit and just life changes and we, just we don't start early enough with our children. My dad was in the service but he wanted to be a farmer. So when I was a little tiny kid, I was out there, uh, bailing hay. Well, they bailed the hay and then we had to move the hay and we had to feed the cows and we had to be kids and we did all of that, but we were just little kids.
Peggy Beauregard:I know how to farm. I live on a third of an acre and I farm. I know. I know that it's important to have things go to seed so you could take that seed so that you could have more.
Gary Pageau:Like how much do you think being raised with that sort of taught you about long like um, either long-term planning or delayed gratification right, because I think that's an issue with today's folks is, you know, I'd rather spend the money now and not have it for later because who knows what will happen well, that's just part of the upbringing.
Peggy Beauregard:We give every. We give our kids everything. Now I mean when I went to school, when we graduated. We graduated from high school after 12 years of school and then we graduated from college after four or five years or whatever it took. We didn't, there wasn't a graduation for every year. You didn't get a reward not participating. You had to wait.
Gary Pageau:Right.
Peggy Beauregard:Right. Until you got through the 12th grade in America, there was no graduation there was. You passed to the next Right. You got your report card and you looked at it and you went oh, I'm going to the next grade Barely or whatever. It happened.
Gary Pageau:Good things come to those who weighed is what I always heard.
Peggy Beauregard:There's that line, but why do we give kids immediate gratification for everything?
Gary Pageau:I'm sure there's a lot of psychological and social constructs around there which we could delve well into, but then we'd be not actually on our topic, which is how business people can build their wealth this way.
Peggy Beauregard:You have to wait till you're 16 to drive a car. You have to wait till you're 21 to have a drink. You have to wait till you're 18 to vote, but you can start a lemonade stand at seven. But you could start a lemonade stand at seven. But you can start a lemonade stand at any age. That is correct.
Gary Pageau:Unless you need a permit, which I hear now they're doing in California. They're making Well you?
Peggy Beauregard:can go get a permit. Nobody said how old you have to be to be a permit, and I'm sure you need to have somebody with you that can sign for you, because you can't sign your own at your 18.
Gary Pageau:So so there's a lot of discussion that you know things are different now. You know the old rules don't apply. Things are different now and you know, you just don't understand. But there's also a school of thought that says certain concepts, certain things are universal, they're timeless and they don't change. And these are what we got to focus on. So what are some of those timeless things you think small business owners need to focus on to get either their business ready to sell or diversify?
Peggy Beauregard:well integrity, keeping your word, taking care of your customer. Your customer may not be right, but you still need to treat the customer with the golden goose. They're the golden goose. That's why we have our eggs right. We have the eggs you've got. You've got to take what's important. Why did you start this business? Did you start this business to make money or did you start this business to serve? We started our business to serve. We want to show people there's a way to have a better life by investing in real estate, good tax deductions and to be able to build so that you can have anything you want without breaking your butt and having a good life like and all those things are important but you know it's interesting because I would think some of the things you were just talking about were kind of like.
Gary Pageau:You know, because of the Internet, with air quotes going or you know, things are different now. People just will look for a quick fix or something like that, and you know that may be advantageous to some people. There's always outliers who can capitalize on something like that. But for the most part, for the vast majority of people, it's what you are talking about Just going in, slogging, doing the you know, having integrity, doing the hard work every day and just showing up every day and treating your customers right.
Peggy Beauregard:That's it, and what you want is you want your customers to keep coming back, because you make more money with a repeat customer than you do getting a new customer.
Gary Pageau:Right.
Peggy Beauregard:So keep those customers and treat them like the golden goose. I don't know what else to say about that.
Gary Pageau:Well, I'm sure you have a lot more to say because you have your own podcast. Where can people go to learn more about your podcast and your website and all the things you guys offer?
Peggy Beauregard:oh, thanks for asking. So we actually call ours a show because it's live and we have it every tuesday at 2 pm pacific, 5 pm eastern, and it's at the nest egg builder showcom and we have different speakers. Come on, so you might be a good speaker. We have the. We have the people who have the real estate. Come on. We have cpas and all the different aspects of real estate. Come on, and and a few bonuses here and there, and the idea is that you get to learn something that you didn't know before, and and it's every week, because you never can learn too much.
Gary Pageau:Absolutely Well. Thank you, peggy, for your time and for your knowledge. I have learned a lot and I've been reassured that the next generation, if raised properly, will be able to take care of us in our older age.
Peggy Beauregard:I hope so, and if anybody does want to get a hold of me, I'm on LinkedIn. I'm happy to set up a time to have a conversation with anyone.
Gary Pageau:Great Well, thank you so much. Peggy, Take care.
Peggy Beauregard:Thank you, gary, it's been a great honor.
Erin Manning:Thank you for listening to the Dead Pixel Society podcast. Read more great stories and sign up for the newsletter at wwwthedeadpix.