My guest today is Kaulana Shum, someone that I have known since the Summer of 2004. He has made quite a name for himself in software sales and sales leadership. He tells his story of taking risks and pivoting throughout his life and career. He has bought homes in various cities and states as his work has moved him to new locations. He has learned things along the way. Things have gone his way, and some mistakes were made, but the learning never stopped. Everything we experience, but particularly failure, is an opportunity for learning and growth! I know you will like this one!
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Kaulana Shum 0:02
Oh my gosh, what should I start over again? Or should we? What should we uh? Oh, man, that was it. We’re freaking out like we haven’t talked yet for like the last five minutes.
Phil Salter 0:09
Yeah, let’s just do that.
Kaulana Shum 0:10
Phil Salter 0:12
We can’t here’s the thing. We can’t try to actually recreate what we actually just did, because that’s ridiculous.
Kaulana Shum 0:16
Phil Salter 0:17
but let’s just get back into it. Because basically, you’re saying, I know you, you are telling me that you knew you wanted to live in Southern California, right?
Kaulana Shum 0:26
Yep. Yep. And, and I it was it was one of those things where this is back in 2004. When we were in the same singles Ward and Riverside over the summer. That’s where I met you. And Lawrence and member Duke Duke McCrory. And, and so when I was out here, so that was my first time doing door to door sales, and I.
And, anyway, I loved the Southern California so much. So I was like, you know, one of these days, I’m going to end up here, right? And then in Utah, so that fast forward, like, I don’t know, next, over the next like, eight years. My career took off in in Utah. And we bought our first house in 2007. And then, which, which is like the wrong time, and I’ll tell you a story about that in a sec. But we’re like, Hey, we bought our first house, my career was starting to take off. And then in 2013, we bought our second house, and I remember buying that second house, I was like, Hey, this is like, Nicole and I, this is our commitment. I guess we’re staying in Utah, because neither of us are from Utah. We don’t have any family in Utah. So, um, so I was like, I guess we’re gonna be, I guess we’re gonna be utahns. You know, I guess our kids are gonna be growing up here, you know? Yeah. And then, and then I got my first I got a job offer to move out to San Francisco. And, and they’re like, hey, we’ll pay you a ton of money. Right. And like, I remember thinking at that time, I didn’t realize that conversion was as big as it was right? Like a ton of money. In Utah, you know, versus a ton of a ton of money in California are two very different numbers. And so we moved out to California to San Francisco. And then I got an our job offer down in Southern California. And I was like, hey, maybe we should take it. And that’s when Nicole was like, Hey, remember back when we first got married? You said, You said that you wanted to end up in Southern California. And I was like, yep, here we are, like,
Phil Salter 2:16
so was missing me. Did she have to point that out to you? Or did you kind of be like, we were on the fence? We’re on the fence of moving? Oh, that’s what kind of pushed you over the edge like, no, yeah, let’s take this. Let’s take the leap.
Kaulana Shum 2:26
That’s right. So we have like the, what’s the what’s the, the the, there’s a president Abe Lincoln, close, or Thomas Jefferson close or not? No, Thomas Jefferson, like comparison, like the pros and cons of each other. Like side by side. We did like pros and cons. I even did a PowerPoint deck for my wife. I was like, here’s the pros of leaving San Francisco, you know, and here’s all that and then she’s like, here’s the biggest Trump the trump card. He’s like you said, you’re gonna move down here one day, and I was like, Ah, you’re right.
Phil Salter 2:56
You sound like you’re trying to get yourself out of moving down there in a way. Because I mean, the Bay Area,
Kaulana Shum 3:01
you know, you know, how it is with with software, like, the Bay Area, you know, there was something about there’s something about the bay area that like, I love the energy, I love that you could throw a rock and you could hit a startup, you know, like, or, or you could walk out with, with a resume and be like, Hey, I’m a software sales guy. And like, 10 people like make you offers, right, and like, I really love that energy and excitement. And like, there’s a lot of nuance that you kind of like, you laugh that as an outsider, but as an insider, you’re like, I totally get that. Right, like startups, like the funny thing to do pick two of the two most random words and stick them together. And it’s like a startup name, right? So like, you know, uh, anyway, so So the problem was with the set was San Francisco for us was that in order for us to be able to afford to live in San Francisco, we had to leave like, what a live like 45 minutes outside of 45 minutes with no traffic outside of town, right. So in the East Bay, and then the commute to work. Like this is ridiculous coming from from Utah, like where I worked at Domo when I lived in Lehi. So it’s like a it was a 12 minute commute, right? What traffic and whereas in the San Francisco Bay Area, it was like, Hey, I had to take a 12 minute drive to the BART station at like 545 in the morning, so I can get parking and then have to walk 10 minutes to the BART to Bart Barton was six an hour 45 minutes and then want to get to the city. I got to walk in there, like 20 more minutes, you know, and I was like, this is ridiculous, you know, but I was like, this is this is the cost of living there. Right? Like, this is what it was. And so I got really comfortable like, listening to books, read books, I was reading books. I got like a lot of stuff done. Sometimes it just slept and it was fine. You got to like hug your backpack, you know, like so that, you know, no one we’re doing anything. So while you’re sleeping. Yeah, we’re sleeping right like when eyes open when you’re sleeping. But then like my office moved down to San Mateo which is by the airport and the only way you could do that was the drive you couldn’t you couldn’t Bart into the city because then you’d have to take like boober on the other side to like, get to the bottom right. So like that that original hour and 15 minute commute from my house to the city now became an hour and 30 minute drive to San Mateo. And then on the way back, it was like you’re hitting traffic and it was like, two hours to get home at least every single time. Yeah, so there was just no balance, you know. So like, it was really easy for me to like, when I was laying it out, I was like, you know, I got home, I was too tired to like play with the kids, I was kind of grumpy. I’d always stopped by 711 On the way home to pick up some food or something so I could keep myself awake. You know. So I was like gaining weight, you know. And also it’s like, also the weekends like, everyone in the frickin Bay Area, like is trying to relax on the weekends. And so then you’re like fighting traffic to go relax and get where you want to go. So like it was just, it was way too much for us. So we ended up moving to Southern California.
Phil Salter 5:50
That was there a big difference. Because I mean, I grew up in Southern California, but I have been an adult outside of California. So I don’t really know that. That grind of the traffic.
Kaulana Shum 6:00
So it’s different. Southern California versus Northern California. Right Southern California. Yeah, there’s trap LA traffic is like horrendous, like Riverside, where you grew up a Riverside and you
Phil Salter 6:11
Kaulana Shum 6:12
Yeah. Riverside like that. That area is like a lot of people live in Riverside. And we got to take the 91 out. By the way, I also got used to like talking about highways. And yeah, I have a number the the 91. You got to take the 91 to the 133 and take it all the way down. That traffic in the morning coming from Inland Empire to Orange County is ridiculous, right? But very, but going opposite directions. If you live in Orange County and go to work in Inland Empire, it’s like a breeze right. But if you’re anywhere along like from Orange County up to LA, it’s also like, shoot me in the face. Like this sucks, you know, and I’ve had to make that commute. But like fortunately, every job I’ve had is not like a daily commute up there like, but like Ventura County, I haven’t had a job up in Ventura County and I went up there once every six weeks or so, to the office and coming back home. It’s like, if you leave at two o’clock, if you leave before two o’clock, it takes you only two hours to get home. But if you leave after two o’clock, it takes four hours to get home four hours to get home. It’s like driving the Boise from Salt Lake City,
Phil Salter 7:15
you know, yeah, that’s and that’s like daily if and that’s a big difference of you saying if between before and after two o’clock? Yeah, exactly. It says, something holds you up at work. You’re like, no. Like, you know, 10 minute conversation just cost me hours. Yeah,
Kaulana Shum 7:32
it’s funny, because like, if I like even in the office, I was like, Hey, guys, I gotta go. And everyone’s like, get out of here. Get out, go. Like, they’re like pushing me out.
Phil Salter 7:40
You gotta at least they understood that’s.
Kaulana Shum 7:44
So it’s been really good, though. In California, you know, like, it’s been really good for our family. What I was saying earlier was when I was when we bought the house in Utah, we did sell because that’s where, as you remember, I was I was living in raintree. Right? with you and with Plex. Yep, apartment complex. And then we move to Belmont. I moved to Belmont. And then from there, I got married, right. And so we bought a house in Lehigh. It was like the right time. And back then in 2007, it was cheaper to buy than it was to rent a place. And so we bought a house. And then we got this. Our mortgage guy was like, Hey, you should do this thing. It’s called a it’s called a five year arm. And it was like a five year arm. That sounds cool. Yeah, there’s an arm. Let’s do it. Because it makes sense, right? And he tried to explain what it was. And it’s like, three months. And for the listeners who don’t know what the five year RM is, it’s it’s a, it’s an interest only loan for the first five years, you’re only paying interest for the first five years. And then at the five year mark, they adjust to what the market is. So we don’t know if the market will drop or market will go up. Either way, you’re not paying down a single dollar towards your principal of the house, which is like, insane. And the only way it makes sense. Actually, let me ask you, Phil, what do you think? Is there a situation where a five year arm might make sense?
Phil Salter 9:04
I don’t know. This is new to me, actually. So my question for you though, first is once the five year passes, is it whatever rate it gets to is that become a fixed rate? Or is it variable for next raid? Okay, but but it’s all based on where it’s at? Yeah. So it could go up or down, but we don’t know. Right? But that’s really, to me, that seems scary. The unknowns there. But it could end up really good. Or it could be like, Oh, dang, that wasn’t worth it. And I feel like at the whole the same time, if you’re only paying interest, you’re not bringing down your principal at all during that five years as well. So that’s not really going to help you either. It makes me seem good for those five years. That’s a sweet five years, but you’re not really helping yourself isn’t in my opinion, but you’re I’m sure experience.
Kaulana Shum 9:44
That’s exactly what you’re you’re right. I mean, it was the first like, so I think our monthly payment was only like 600 bucks. Like it was Yeah. But there’s 100% interest, right and so like, the only way it made sense is if we knew we’re gonna flip flip the house and turn it and sell it within the five years, right like even a mortgage guy. Like, dude, you don’t want to take the gamble of seeing what the rate is going to be in five years. Right? So he’s like, if you plan on selling within two to four years, like, do this, but this
Phil Salter 10:07
is 1007, though, right? Yeah,
Kaulana Shum 10:09
exactly. Like, exactly. So it’s like, so so it was like call it 600 bucks. Let’s say we did say the market didn’t take a crap on us, right? It was like 600 bucks a month, times. Two years, right? I can’t do the math on that. 600 equals 66,000 12,000. We’re paying about 12 13,000 something dollars over the course of two years.
Phil Salter 10:32
Right? Yeah. 72. So $600 for a year, 70 $200 a year? So times 14 1414. Right. So $14,400 for two years. Yeah.
Kaulana Shum 10:42
And then but if the house if the house value went up? By 30 grand, right, then it’s like you quickly made $15,000. While you know paying a very low monthly, yes,
Phil Salter 10:55
it’s a great thing, if you’re going to sell like you said two years, and it goes up in value.
Kaulana Shum 10:59
Yep. Yeah, control. Exactly. And so like it made sense for a minute. And then like, and then one morning, it was one of those things where you’re like taking a shower in the morning, you know, you know, you’re doing this and you’re like, that didn’t make any sense at all, you know. So I called up another mortgage guy. And I was like, Hey, this is what I did. He’s like, You’re an idiot, like you should, should just get a 30 year traditional. And so and so I got a so I got refinance, but the stupid part was because it was 2007 or 2008. He’s like, the money that you put down, you put down $40,000 on a $200,000 house, he’s like, you paid 20%. So you don’t you’re not paying mortgage interest. But now the value of the house is only worth 160 grand because the market took a dump. So now you got to pay, you know, mortgage interest. And I was like, crap, you
Phil Salter 11:48
know, me that you had to get the private mortgage insurance right at that point? Yep. When you’re driving, and I see. Ah, what a bummer. Yeah, it was a bummer. It was
Kaulana Shum 11:55
a total bummer. And so that was in 2008. And finally, like in 2000, like, Oh, no. 16 we finally like made our money. We started like, it started worth being worth the same amount as we did before. And you know, it’s just idiotic, but yeah, no one’s No. Like, I don’t know how to. I didn’t know how to buy a house. Oh, yeah. I didn’t even ask my parents about it. I was just like, I’m just I got a five year arm. I made seven five year arm, you know? So?
Phil Salter 12:22
I don’t know. Like, the question I have is where you renting it? And the meantime, because you leave? Yeah, sell till 2016. And you end up moving away? And we didn’t sell till six, like 32 months ago? Like, oh, wait a minute. Okay.
Kaulana Shum 12:36
Oh, we just barely sold it. So on 13 we’ve been in the house for five, five and a half years. And our family’s growing. Right. So we had two kids at the time. We have three now. And, and the two kids in the townhouse, we’re just kind of getting kind of close. Like it was just kind of small. So we’re like, Let’s buy a house. And so what the yard and interestingly, back then it was all up to me. It’s all again, you know, buying him. I’m a sales guy, like, but like making purchasing decisions and like, wheeling and dealing is like kind of a game, you know. And so we’re like, Alright, let’s look for a house and all the houses that were you know, it’s funny, it was like, I was choking when when Nicole would be like, hey, look, this house. It’s like 385,000 and I’m like, Oh, that’s like way too much. Right. But like looking back, I’m like, if I bought it, it’ll be worth like 600 now, you know, but yeah. But anyway, we saw this house. I was like, marginally more expensive than the townhouse. But it had a really big plot of land. It was it was a it was a model home. In the community right next door to the town house. It was like a, like a two minute drive from our from our townhouse. And in the model home, interestingly, wasn’t a it was not one of those model homes where they like deck it out. It was like the opposite. They’re like, this is the base model. This is what you get
Phil Salter 13:53
for you. Okay.
Kaulana Shum 13:55
It wasn’t nice, right? It just had a big yard. And so, um, landscaped yard, which is important to us, right. And so, we, we saw it, and it was on the market for 30 days, and, and they dropped it like $10,000, right. And I was like, this is our chance, right? Like, they’re, they’re desperate sounds like they’re desperate. And so we walked through it, and we’re like, we like the house. Don’t love it. He’s got some good bones, you know, love space. It’s like a 3000 square foot home, which is like, huge compared to what we had in the townhouse. And so I told I told Nicole, I was like, hey, let’s make an offer for it. But let’s like, let’s like, let’s lowball it, you know, and see what happens. And our mortgage guy or our realtor was like, are you sure you want to offer that little, you know, and like, yeah, you know? And he’s like, okay, so he puts the offer through, and like, within like two hours, we get a counteroffer back and you’re like, Hey, we’re really interested in this, but you got to raise the price. And we’re like, no, like, we want this price. You know, because what’s the worst thing to say? No. And so we went back and forth with our realtor. And like, I think we were using Buy like a nominal like five grand or whatever. Right and and then they accept it within the hour right? And then like later on like the mortgage the the realtor was like, dude, I can’t believe you did that. He’s like a totally worked out. He’s like, dude, you know why they bought so quickly was because they they bought in our house and contingency they had to sell that house to get into and they need to sell it within 10 more days like they’re screwed. Like, why didn’t you tell me this earlier? Because then I would have I would have been offered even less, you know? Yeah.
Phil Salter 15:25
Oh, sounds like he might not have had your best interests in mind. Like, he’s no, it’s kind of funny that he’s like, so surprised. It’s like, Listen, this what you do, bro? That’s your job, man. You know, like, that’s so hard to find like the, because you don’t really know until you work with someone and maybe learn in retrospect, like, Oh, dang, I don’t realize that they were as bad as it were. Or maybe you’re like, Oh, they actually were better than I thought. Because when you have to learn more realities, but kind of seems like he wasn’t the best.
Kaulana Shum 15:49
Yeah, you know, and the thing was, was like he was young, like I actually I actually were friends on LinkedIn. He actually moved to the software industry afterwards. He was he was young, I think it was probably I don’t know, maybe three or four years younger than I was. And it was, it was his first first real real estate gig, you know? Okay. So I think it was like the junior Rep. Like, I think it was a I don’t know how real estate works. I think he’s like attached to a feel like a more senior. Yeah, I
Phil Salter 16:14
think that’s pretty common. Like, they kind of get the advantage of having being part of a brokerage that they give them part of their commission, but they get their help, like, Hey, can you help me? Maybe with the Patreon or figuring things out? So yeah, maybe that’s what it was? Yeah, no,
Kaulana Shum 16:27
whichever cases we sold the house, we didn’t buy the house. And then we had to sell it to move out to San Francisco. So we turn around sold it because because we talked him down, the value of the house also went up margins a little bit. And so we were able to walk away with like, like a decent amount of cash. When we moved 10 months after we bought the house, so
Phil Salter 16:48
this is all while you still own that one. That original? Yeah.
Kaulana Shum 16:50
So we know the other one. Yeah. And we’ve been blessed with like, some great like, render, like, tenants. And some, one of the families was there for five years, five of the seven years that we realize, Wow, that’s so nice. Yeah. And so and then we had and so I feel bad. Because call it a year and a half ago, we’re like, we got this wild hair up our nose, or like, we should sell it, you know? So we told the, the tenants were like, Hey, we’re thinking about selling the house, right? And then all sudden, they’re like, Well, you know, and then we’re like, hey, just kidding. After after like a month, we’re like, just kidding. We’re not. And then they’re like, well, we’re already looking for a new house. So. So they ended up like buying a house and I’m leaving, we’re like, shoot, like now we got to find.
Phil Salter 17:34
That’s a hard what actually happened to us. We were living. We were living in a townhome before we bought our condo actually be renting before we bought this house. And they told us like because we’re using some, like management company in the management company came to us and said, Hey, they’re going to be selling it. And so and I don’t remember the specific details is something about maybe as having to leave earlier than the contract, but probably not that. I don’t remember, all I know is we’re like, Alright, fine. Let’s look again for house because when we look to the past, or like, I think it was in a place then we had a little higher budget than in the past. We looked and we end up finding this house. And we’re like, sweet, so we go to them like, hey, guess what? We found a place it’s gonna be fine. And then the bachelor come he’s like, Oh, they decided not to sell and like, why did you freakin tell us? You know, it’s like, I’m like glad because you know, we found this house and we love it. It was the it was the perfect house. Like all the houses we looked at, at the time in our budget, see, oh, yeah, we actually liked and we really liked and we’re like, what’s the catch? You know, but we worked out so good for you. But I was gonna ask you as a did you go through a management company when you’re renting this house? Or did you kind of do it yourself?
Kaulana Shum 18:40
So we originally the first six years, we did have our own because we were we were living like two minutes away. Right? So like, we had for the first year and a half of renting it out. We had three tenants. It was like three short term tenants. Right. And like, it was kind of a pain in the butt. The first one was I don’t I don’t really remember who why she moved out. Oh, she just bought a house. She came in, she moved out from out of state and bought a house. And so she was out second family moved in. friends of ours actually, which was kind of weird. Like I worked with them, so I knew how much you made. And, and so he they only stayed for like six months. And then we got that third family moved in and the third family super long term. And because we’re that third family was so good at that about paying. I was like, You know what, I’ll be an absentee landlord. And like, we’ll just move in, and they just paid us like there was a little there’s a couple of hiccups over the course of five years, but like nothing to evict them over, you know, and it worked out, you know, and so when they moved out, though, I was like, Well, I’m not. I haven’t been to Utah, like after moving away. We’ve only been back like a couple times, you know, so I’m not going to go back just to find a tenant. So I had a friend that owns a management company, a property management company, and call him up and he’s like, Hey, I’ll Strike you up a deal. And I was like, perfect, let’s do it. So he, he actually did all the work for me. And we were able to raise the rent to cover basically a cover his fee. So we’re still making the same amount. And the, the good news is that because we put down 20% on the house, we’re cash flowing every single month, which was, which was nice. And, and the way to do that is you just don’t spend that money, you stick it in a bank account. So like when something comes up, you got money to be able to do it. And we ended up it came in handy a couple times when we’re like, oh, man, like we’re a little short this month for whatever. Right? So that was kind of pull from it. I’m sure there’s a tax implication now that I think about it, but Oh, no.
Phil Salter 20:40
We used to like doing your but it seems like that’s something people probably need to realize. It’s not like, Oh, I have this ring coming. Oh, by the way there’s going to be repairs is going to be does it come up and you can’t just you have to have money set aside. So it’s not just money going into your pocket necessarily. Yes. But you know, that a three month they’re paying your principal for you, they’re paying those things. And so it’s that’s building its value for you. Yeah, as well as the market, you know, since during this time was increasing, right, so the value is going up as well. And that way, so that’s cool.
Kaulana Shum 21:12
So there’s there’s a certain value also in the tenant, right? So like, when I was without the property management company, I was dealing directly with the tenant, and just great, great, great tenants, like I would be friends in real life if I was if we live close to him, you know, and I remember like, when something came up, he’s like, Hey, man, like, just FYI, the dishwasher broke. But we just went ahead and just replaced it. And I was like, Oh, that is like, unheard of. Well, you know, and at that point, I was like, Look, I’ll pay for it. Because it’s, it should be my responsibility. But back then they paid for it. Or, or Hey, FYI, the paint chipping off over here. I just want to end repayment for you or whatever, like having them do all that stuff was like, I mean, it was so low maintenance for me. I just paid for like when the AC went out, you know, I just
Phil Salter 22:02
I think anyone listening should realize this is a typical, right? It is very atypical.
Kaulana Shum 22:07
Yes. And to the point where like, I was like, This is way too easy. And that’s why I like you’re such as I mean, it was it was kind of my own doing when they moved away. I was like, anything, you know,
Phil Salter 22:18
but I mean, it’s good of you because you want to give him a heads up, but it’s like, oh, no, maybe Libra thought I should have been a little more certain before I brought it up, you know?
Kaulana Shum 22:25
Yeah. And the other thing too in Utah, I don’t know if it’s if it’s a common practice in Utah. And California, you raise the rent, the longer someone stays there, you continue raising the rent, which didn’t, which is not normal. I thought that was I thought that was weird. I don’t know if that’s did you have to deal with that at all, when you’re when you’re renting from the condo?
Phil Salter 22:44
I’m not that I was only there for like 10 months or a year, but I have I remember being in an apartment for five years and the rent being raised at a certain point. I mean, that’s pretty normal. I’m pretty sure. That’s I think that’s normal, you know, and that’s the one that must be Yeah, I
Kaulana Shum 23:00
don’t know, right. So like, and so when, after, like three years, Nicola was like, Hey, we should probably like raise the rent to like market value. And I was like, but I don’t want to, like lose our tenants. So we’ve made a conscious decision not to raise the rent. So like, by the time they left, I think it was it was it was it was a good deal all around, because like our our taxes only rose like marginally. And so it wasn’t like we’re paying any more, really for our mortgage. So we’re like, you know what, like, let’s just keep a good thing going. And let’s not raise the rent. Because here’s another thing too, like if you threaten to raise the rent, and they end up moving them like that one month of the house being the property being vacant, like, however many hundreds of dollars or 1000s of dollars if you’re in California, and was it worth it for?
Phil Salter 23:49
Yeah, that’s the calculations, right. I mean, that’s a really good point. You know, the question is, How easy is it to get great tenants again, if they’re that great, then yeah, that is worth a lot to you. That’s its own asset. Like you were kind of saying, I think it’s hard because you get
Kaulana Shum 24:02
these tenants and our tenants on paper weren’t great. They had they just came out from bankruptcy. They’re just moved here, you know, but the reason why I took him was because I met them. I saw their bank account, you asked him for the bank account information, they have like, enough money, and they’re, you know, and I was like, you know, I they seem like really good people, which I guess that’s probably not the best way to run a business. You can’t just go by gut, but
Phil Salter 24:31
it works out for you this time. Yeah, totally worked out for us. Right. And so I think ultimately comes down to that gut feeling I was thinking about some things I’ve come across recently where I feel like my default is to be like, skeptical of that approach you because I’m doing this podcast, I have a photography business and people offer to do things I can help you with this. I cannot be with that. And I’m always like, get out of here your scammer. That’s my first thought. You know, as I started realizing lately, why don’t I start asking questions and then determine from those questions and how they answered them. Yeah, you really Have something that could help me because if you can show me that you some, you know, some proof or some mystery of like, when if you put $100 here, I can get you 300 here, you know, whatever the numbers work, I’ll give it a shot. Yeah, asking those questions, but then ultimately, someone could be throwing a bunch of fake numbers and you got to go your gut. That’s kind of your, your last test, I think.
Kaulana Shum 25:21
Yeah. And that’s, that’s 100%. What I did was just the gut. And thankfully, like I said, there was only a couple of times over the five years, I’m like, they didn’t pay me my mortgage, they didn’t pay me rent, you know, and then, and then they like, caught up on it, like, the next month or whatever. And also, the other thing for me, the reason why it worked out for me was that living in California, all of a sudden, my my income had to increase from my cost of living. So I think I was only paying like 850 bucks for my mortgage over at the townhouse. And so I was like, what’s the worst at the very worst, they’ll pay? I’m only out 850 bucks. Yeah, like, that’s, that’s the worst. And it’s like, every saved up over the course of however long they’re there, I can cover that in the, in the in the, in the savings I got from the rent, you know, in that bank account. So,
Phil Salter 26:08
so they were paying enough they had a you had enough surplus after paying the mortgage from what you’re charged on that it was accruing. So it’s like, yeah, you’re right, like the money was there. Ultimately, you pay the mortgage that month, if someone’s not living there. So you know, bringing down your principal, it’s still like, yeah, it’s not the ideal. Well, that’s the worst case scenario, that’s
Kaulana Shum 26:26
not so bad. In fact, by the end, after we had enough money, like padding in there, we ended up throwing extra towards principal. So like, every month we’re paying, I think was like $280 extra towards the principal. And so it was really fun after I mean, but by the time we sold it, so we had the mortgage for almost 15 years. So like, now the principal was was a lot larger percentage than it was before. So it was kind of fun to see, like, every time I checked, like the balance of our mortgage, which was not very often like once every few months, I’m like, hey, like we’re making, we’re making a difference here. Like what do
Phil Salter 27:02
you mean, the percentage going towards principal was Yeah, increasing. And it started to kind of maybe ramping up, you’re like, Oh, this is right. In the beginning, you’re like, Tang, so little goes towards, it’s all like, yeah, it’s so much towards interest. And then slowly over time, that percentage towards interest goes down, and the principal amount goes up, and you’re paying the same amount every month, obviously. But yeah, it totally was like, just it was fun to see it, you know? Oh, yeah. That’s cool. That’s cool. Yeah. Yeah. So would you say ultimately, you like learn from the whole experience? Like, if you were to go back? Would you do anything differently? Obviously, things worked out and you learn things, but yeah, I would have
Kaulana Shum 27:39
hindsight, 2020? Sure. Um, I would have, I would have kept the second house, we had to sell that second house, because we did the I did the math on that. And I was like, well, because I didn’t put down 20% of the house on that one, I only put down like, I forgot how much I put down on it. It doesn’t matter. It wasn’t enough. But that was what I had to charge and rent would barely cover would barely cover the mortgage that we had to cover, you know, and that was like that means that means any problems that arise, we can’t cover that. Right. And I believe we had to pay for a gardener. I don’t know about that. Right? So I was like, if you’re paying a gardener 100 bucks a month to come and mow the lawn and do this and that I was like, that puts us over, right. And so we’re actually losing money. every single month. I didn’t know that. Freaking the software company, its software industry in Utah would explode over the next you know, six years. And if I kept it, we would have made, like, if I sold it today, it probably be worth you know, $300,000 more than I paid for it, you know,
Phil Salter 28:44
but I didn’t know like you say hindsight, right?
Kaulana Shum 28:48
Yeah, yeah. Plus, it was I didn’t need the stress, right. Like, I didn’t need this. I couldn’t handle the stress. And so, but but again, like if I did anything differently, I might have maybe I would have seen how I could have like, I don’t know, I would have seen it if I could have made the monthly payment a little bit lower. So I could have like, feasibly because like you read Rich Dad Poor Dad, you know and Rich Dad, Poor Dad, it’s all about passive income from like rental properties and stuff, you know, and so I have a friend that that owns like six properties in Utah,
Phil Salter 29:19
just kind of as like a final thing I would. I’m curious All right, I have a thought is so you know, you’re talking earlier about the arm, you know, the our mortgage. And yeah, obviously if you went back and you talk to yourself and say, Hey, here’s some things to consider. You should probably do just traditional, because now mortgage or whatever. But I’m a big believer that mistakes are a good thing. And that you’re without them. We if we if we are so cautious, we never make mistakes, then we’re going to not be living a full life. And they’ve been so risk averse. So long in my life that like until recently I realized I need to start stop being so afraid of taking risk and see what great things I can actually accomplish. You know, it’s true. How do you feel about that idea?
Kaulana Shum 30:03
I it’s 100% true. And as you know, when we first met, it was because I took a job selling door to door in Riverside, right. And like, risk was very low. When I was in college. Like, I remember, in college I had, like, I remember looking at my bank account and being like, 450 bucks in the bank account, like I’m doing going to Del Taco to my boys, you know, like, you know, it didn’t really matter how, like, it was so easy, as long as rent was paid. And I was going to class on time, I was like, man, things are good. You know, I’m, in fact, that summer in Riverside. I think I came back to school with the exact same amount of money in my bank account as I did when I went down there. Like I didn’t make any money. I just paid for my experience down there in Riverside. And then when we got married, when I got married, I remember pulling up a bank account and like saying, like, okay, so rent is how much for this apartment and then being like, dude, it was read was like $580 as a married couple, and then like, probe Center Street Provo, and I have like, $660 in my bank account, and I was like, I’ve got to get my act together. Quick, you know, I need a job, you know. But I realized that bestest, my mentality has always been take some risks, because that’s just the way it is. Let me let me tell you this story, too. So the very first job I got was 17. When I was 17 years old, I was a lifeguard and at a at a private pool. So it was like super cushy, like, I think the two years I did it. I didn’t even have to, like ever jump into the water. Unless I wanted to like cool, right? Like, it was there pay me to get a tan it was it was pretty awesome. I got paid 515 an hour. Unless I was doing a party then it was like 565 an hour, you know? 80 bucks. Yeah, big bucks. Right? It was like, okay, you know, I went to college when I was at BYU. I don’t know if you remember. That’s how I knew Dan Morgan was working at teriyaki sticks.
Phil Salter 32:03
Kaulana Shum 32:04
Yep. on campus. And this is this was actually a very, like, prolific memory, right? This is actually just changed my outlook on everything I did, right. So I got paid, I don’t know, somewhere like 515 520 an hour or something like that. And I only worked like 20 hours a week. So it wasn’t like very much I made 100. Yeah, so I made about like 200 and something dollars every two weeks, and call it like 200, like low 200. So it was never that high. One week, my boss was like, Hey, we got women’s week coming here at BYU. I need someone to work some extra hours. And I was like, me, I want it like I need I’m gonna make some money, baby, you know, and I put in a ton of overtime, like a ton of overtime. And I remember thinking I was like, Man, this next paychecks gonna be sick, you know, except we didn’t say sick back then we said something different. I don’t know what we said back in 2005. Right. And, yeah, talk, I think I’d like off the off the hook
Phil Salter 33:04
back then maybe off the show, this could be all that in the bag of chips.
Kaulana Shum 33:08
And so I remember being like, man, I worked so many hours. And I cut my paycheck and I pulled it out the envelope. And it was like $255 and I was like,
Phil Salter 33:18
what I like so much extra work, you know, for another extra 50 bucks or something? or less.
Kaulana Shum 33:26
And I was like, Man that wasn’t working at all, you know? So and So, um, my experience. So when I first got married, I was like, hey, Nicole, I don’t want to work at teriyaki steaks, like, unless we’re both working. But even then, like, we’re not going to pay. Like I got, if I if I did this, like all month, it wouldn’t even pay for one month of rent for for our little apartment. So she was like, Hey, you should do summer sales again. Right? And so I went down to Austin, I did I end up doing two summers in Austin selling pest control. And I actually did really, really well. That was that was actually the very first time in my mind. This was like my first like, entrepreneurial like, this is up to me to like my success is based on me walking down the street and knocking on doors, right? Yeah. And the first like, couple months. First call it like maybe six weeks. I was terrible at it right? And I’ve followed all the training, I did everything that like my manager was like teaching me to do you know, and I was like super frustrated because at that point, I probably only made like maybe three or $400 or I don’t know some really crappy. And I was like not even worth it. And then I remember I remember one time. Like before I hit the doors I was out I was sitting on the street like on the curb and Nicole called and she’s like how you doing? I’m like freaking hate this job. You know, like, I don’t know what I’m doing out here. And she’s like, Listen, like you keep on trying to do what other people were trying to tell you to do. Just be yourself like people like Kalani shum, right. Just be yourself and Sell. And I was like, okay, you know, so I threw out all the training, and knocked on the next door to very literally the next door. I don’t say literally very often but literally the next door and knocked on it and made and sold that guy, right. And I’m like, Oh, yeah, and I didn’t follow a script, I just kind of did my thing just was Kalina shown, you know, and and that day I sold like three accounts which was like, I would go all week and maybe sell three before you know and I sold three in the day. And then I and then if you do the math on that, like the hours I spent doing that was like way more than $5.20 an hour. And so I did that for a couple of summers, I went during the school year, I knocked on, I just picked that was my job I went and sold. I mean, you name it Comcast. So Comcast for a little bit, I sold the fiber optic internet, I sold whatever, right? And, and the reason why I did that was because I could spend three hours a night and make 150 bucks, 200 bucks, right? for three hours a night. And I was like, I’m never going to go back to an hourly job again, right, like I can, where I have control over how much I made. Wow.
Phil Salter 36:10
It’s basically just realizing, oh, my time is worth more. If I’m selective of what I do with it. I need to do things that make sense. And not waste those precious hours that that I’m other value. You know, honestly, dude, when you told me the story about your wife saying to people, like you’re, you’re good, or what do you say people like the people that come on the show? Just Yeah, yeah, that gave me the chills dude. Like, literally, I was like, dang, it’s so true to be authentic to who we are. And maybe some people their authenticity is like following the script. I’m not saying that’s not there’s not a player that maybe maybe that’s them. But if that’s not you, like, That’s amazing. Like if we can really realize our own value, not just in the hours that we put in, right, like our hours are worth something but ourselves, we are so valuable. And we have so much to offer. And if we can be authentic to who we are and believe in ourselves, oh my gosh, like, nothing can stop us. And that’s, that’s, that’s 100% The reason why my career went towards sales. And then like now towards like sales management, right? Because like,
Kaulana Shum 37:15
the first the first four years of marriage, I was on 100%. commission. And, and it was like, dude, like, it was great. Like, the amount of time I put in all sudden you get a paycheck. And it’s like, ooh, like, this is a lot better than that, what I could have done, you know, working for wherever, right? And so, the only problem was, was that the back then when before we had kids, oh, yeah, I’ll take all the risk, you know, all the risk. And then we had our first child, Paxton, and I was working at a company called no more mortgage. And it was a call center. It was a it was a two step close. It was like I had to call a bunch of people, and like, qualify them and then pass them off to to a closer basically, and we had to like follow up, we totally follow a script like that, which is contrary to what I just told you earlier, I was really good at reading that script, though. While I was successful, but um, but the paychecks I was getting at that job, were I’ve never made more, take that back up until that point, or for it for 10 years after I’d never made more money in a single paycheck, then when I worked at no more mortgage, but I also didn’t make as little money on a paycheck as I did a no more mortgage. And the problem was, is that I do the math, right? I’d be like, Alright, if we made extra money, I threw it in savings. You By the way, like, one thing I learned early on when I was a kid was you save money, right? Don’t like save up for a rainy day. And so like, we made a lot of extra money that went in a savings account that was unattached to our personal like our banking or checking account. So it’s hard to get money out of it. Like you had to go through a process, get money out of it. So we’d get money, we’d throw it in there. And then I’m like, okay, with a checking account. We need to pay mortgage on the first and it takes two weeks for me to get paid on these deals. That means this week, I’ve got to sell X amount of dollars worth of whatever right? And that was super stressful, right? And like I started like gaining weight I started like just being on house I was drinking energy drinks, double fisting it, you know, like just just a lot of you know, couldn’t stay awake or stressed all the time. And that’s when I was like, dude, I’ve got to change the way I make my money, right? Like I don’t want to do sales. How do I how do I do this? And had a conversation and with a guy who worked at omniture if you remember omniture omniture was the CEO of Domo, Josh James he started omniture which got bought out by Adobe. Who you worked for or you worked for or you never
Phil Salter 39:48
Adobe know, obviously the inside sales and inside sales something.
Kaulana Shum 39:52
Yeah. Anyway, so you knew that you knew that you knew that little like the the stories right and so anyway, I talked to this guy. He was he was single. It was like 29. And he was like, I was like, hey, so tell me about your job at ometer. He was like, dude, I love it. And he’s like, yeah, you get a base commission or base salary. And you make Commission on top of that. And I’m like, Whoa, tell me about the salary. Mission thing, again, a base salary thing? Like concept. Yeah. And so I was like, Okay, and so he’s like, Yeah, man, I just closed the $4.2 million deal. Last year, last month, and I’m like, I had no concept for like, sizes of deals, no concept, right? And I was like, what kind of commission rate do you make on that? Right? I’m thinking like, I don’t know, like a point two 5% or whatever. He’s like, Oh, I make like 18% on it. And I did the math. And I was like, dang, oh, wait, you make 80%. And you have a base out of base. Like, tell me what you got to do. I’ll work for you. Like, like, you just tell me and I’ll follow you, you know. And so that’s what got me into software sales, right? Because I was like, okay, like that, that might create the stability I need, while giving me the flexibility to take my risks, right, which is like, you get a base salary that pays your bills. But then after that, like everything else you make on top of that, is gravy. And like that, to me was like, the perfect mix. Yeah, so that was the software, probably 2010, I worked for at task. And then from 2010. Till now, like I’ve been in software ever since.
Phil Salter 41:17
Good for you, man. And it’s like that kind of being in sales. There’s that pressure. Obviously, you found what worked like I need to be able to have that security so that it’s not just stress completely. But you have to believe in yourself. And and it’s kind of entrepreneurial in a way in and of itself. And that Hey, man, like you said, when you did door to door, it’s about what I can, like, accomplish here. Yeah, I don’t go to work. And like, just try not to get fired or get my salary. You know, like, that’s another way to live your life. And there was my arm again on my chair. But, uh, that’s really awesome. It’s an adjustable arm on that. Yeah. Yeah. Every time we lean on it, it goes down. It happened before we started recording. That’s why But no, but honestly, you have to like, what was I saying? Gosh, no finding what worked for me, right? being myself. I know what it’s done to me as you. Like, ask questions. Go to people that know more than you they’re doing. Maybe he was doing kind of what you’re doing. But at a level that you said, I want to be where you are. Yeah. How did you What are you doing to be here and not being so stubborn or like self conscious, or let the ego get in the way and say, I don’t want to be embarrassed if he realizes how low I am. Or maybe I don’t want to seem like I don’t know what I’m doing. Or there’s a lot of things that go out of your mind that can stop you from reaching out to someone that’s so valuable. So that’s a really good note. here’s
Kaulana Shum 42:31
here’s something to that, like, here’s I tell this to anybody that ever asks, like what what, like, what’s what’s helped me in my career, right, which is, it’s my network. At the end of the day, my network is the most important thing. Almost every single job I’ve ever had was because of somebody I knew, right. And the job I have right now I work for a company called Red gate software. And I got job, I got the job because of someone I worked with at the last company, who used to work at Red gate and went back to red gate, and then brought me along with them. Right. And it’s like, I wouldn’t have done this job unless I worked at the last place. And so what I was gonna say was the net network thing is something that’s kind of like a garden, right? Like, and it’s funny because like, I’m if, like, Phil, I’m the worst at communication sometimes on the phone. And my friends I talk to on a regular basis will say the same thing. They’re like you text Kalina, like 5050 chance that he’ll text you back, you know, and I hate I hate that. Because I don’t mean to be like that. But the problem is, is that like I’m so like, it takes a lot of like mental energy to make sure you’re on top of developing and what’s the word like, like watering your plants, like maintaining maintaining your, your relationship to your network, one of the things that I’ve tried to do, and I and I will put a lot of time and energy towards this is continue to network and meeting new people. So I’ll try to take an hour, once a week, to go and talk with somebody that I haven’t talked to in a while, or meet up with somebody new, right. And it was hard during a pandemic, you can meet up for lunch and stuff, but like, I’ve met with so many people now learn something from them, right. And like, and I take that and it’s interesting, because like, I saw this one time I did this, I met up with somebody. And he showed up, he showed up with a notepad. And and I was like, Oh, that’s kind of weird, you know, but then like, as I said, stuff he’s like, that’s really interesting. And then like you pause pen and like write it, you know, and I’m like, oh, like I feel like kind of a little bit of pressure now, you know, but like, I like that idea. Right? Like, I’m
Phil Salter 44:32
like, this is a new person every week once so that I
Kaulana Shum 44:36
can you know, like I haven’t like like one of one of one guy was just a friend of a friend, right? Like I moved out here to LA and one of the guys I worked with in San Francisco was like I’ll do one of my best college buddies was down there. You should hit him up. So I hit him up and he’s like, Yeah, let’s go grab a coffee, which is what people do in California, but which is what you don’t do in Utah. And so and so I showed up and was Thinking my sparkling water and you’re drinking his coffee, but like, I was able to kind of pick his brain a little bit about like the software world in Orange County, which Orange County is not like San Francisco, there’s not like software everywhere. So it’s important to have that little network. Yeah. Especially like if you’re in a niche. So I, as you as you, as you may know, I was I was part of my career was in sales development, which is outbound prospecting, like the prospecting side of sales, right? So I was really good at I still am very good at like the processes, and establishing a strategy to build do some like, outbound like phone calls and emails and things, right. And that sales development world is very niche in the sales industry. And, and so like, when we moved down here, it was really important for me to get to know who was who else was doing that in the area, right. And there’s only like, a few, you know, so it was important for me to like, reach out. So I do LinkedIn networking a lot. I actually pay for a thing called revenue collective, which is a networking company where I network with other software sales leaders, you know, and so I actually, like, put effort into like maintaining these relationship building and maintaining these relationships.
Phil Salter 46:11
Excellent. So if anyone could take from this is that whether you’re in software sales, or in any type of thing, find that where you can network with people that do what you do, build those communities, do it at a higher level, yeah. And also help people that are coming up in the world to because you never know what that’s gonna do for you, as well. So it’s all really good stuff. Man. This has been just a fascinating conversation. And I’m so glad that you took the time man
Kaulana Shum 46:38
to do it. This is fun. This is fun. I wanted you know, there’s it was I also wanted to spend some time reminiscing, you know, there’s a lot of stuff to reminisce about, but like it was just, there was a 2000 2004 to 2006 was a really fun, fun time for me at BYU. You know,
Phil Salter 46:55
me too, man, I have such fond memories of those years, those summers, those semesters hanging out, like, we were living in the same complex, and I think it was the spring semester 2005. And then we ended up getting the same being coming roommates, because we are near each other and we became roommates. And just honestly, just one last thing I’m gonna say, before I let you go is the story. I was asking to start with this open with this, but we just jumped right into it, which was awesome. But I, we, we did this thing where we kind of did like a little like, in our church congregation, there was a thing where we made like movies, like, did like printing where we do, like, we’d show our videos, you know, our movies to the to all the people. And we did that a couple times. But you doing that you had this MAC, mac book. And you were like editing it. And I was like, do this stuff that I think is so cool. Like, I was interested in those things. And, and you inspired me, you didn’t even go into this as a career, but just at the time, just your enthusiasm and your the fact that you figured things out, and you learned how to do this stuff, really excited me and it didn’t make me change what I studied in college, I ended up going into digital media. Yeah, I thought I was gonna do something with video or photography, but I do that kind of on the side. But just that idea, but doing that guy got me introduced to a certain kind of thinking and learning and, and that I think indirectly led to where I am now. You know, it’s just part of that step, we could look back in retrospect and say, Oh, that was a moment that made me shift. And then something else happened later, that made me shift again, but like this hadn’t happened, I wouldn’t have been here to do these other shifts. So I, I hold you in high esteem. For reals, and I have great fond memories of you as a friend in those times back back in the day. So I always thought that you would end up acting by the way. And something I wanted to do, you know? Yeah,
Kaulana Shum 48:47
well, because like you have, I mean, you got your I listen to your podcast, you have a buddy that actually should like be like, hey, hook me up with that as an extra somewhere, you know, I’ve been wanting to do either a podcast or like a YouTube channel or something. But I still I really, I truly had a hard time trying to think of like, what’s the topic, you know, like, you know, and that’s why I like, I like the whole personal finance, like this whole thing that you’re doing, because this is pertinent, as important to me now as an adult than it was when I was like, 23, you know, yeah,
Phil Salter 49:17
we’re on this. We’re basically the same age. And it’s a certain point where you realize I realized there’s people out there who are different levels at this age, stage of their life, but there’s plenty of people that are like me that and even people who have higher you know, beyond beyond where I am still want to say how can I do more? How can I learn more? Like, you know, you start to take it seriously, like, Man, I’m, I’m almost 40 like I need to do, like get stuff in line, you know? Yeah. And what I’ve, what I’ve learned from this is not originally it was like, hey, I need to be ready for retirement. But I’m certainly realized through all these conversations, why would I wait till retirement to start living my life, like I can start building wealth like immediately and that’s what I’m working on now is like, Okay, get some passive income. Let’s get things rolling. You know, so it’s been really exciting. It’s been
Kaulana Shum 49:58
a I have a That’s, he’s like maybe 10 more years. He’s like, 10 years older than us. Yeah. Just so much further along his career than me, you know, he’s in the st. He’s in software also, but like, just so much further along, he can afford, like, he was able to afford a house in California, which is crazy to me still, you know, like, um, you know, he’s gonna afford to, like travel when he wants to travel. And I was just like, how do I get there? You know, and, you know, and it’s interesting, because I met him up at I don’t know if this is like, worth recording. I mean, like, I don’t know, if it’s worth, like, adding in there. But like, a minimum, but a beach one time, we’re just chilling, hanging out. And he’s like, dude, you got to get out of sales development, right? Because sales development, such a niche in software sales, he’s like, that is your ceiling right there, like, go and like, get into, like, start managing a team. That’s not software that sales a little bit. And I was like, but the hard part is you take a step back, when you leave, like I rose to as high as I was going to get in sales development. In order for me to go to the next level over the closing, like account executive stuff, I’d have to drop down a level or two even, you know, and then pay as well. And that was like really scary to me, you know, and so like, but I took his advice, because I mean, dude, like, a lot more advanced in his career than I am. He must know these things, you know. So
Phil Salter 51:17
that’s what it takes, man. And that’s why man, this is stuff that’s come up. What I’ve talked about is just like, sometimes we have to make pivots that seem like can be a blow to our ego or can be scary or can be like a step back in the hopes of making steps forward. But you get some good advice and you say, you know what, I’m gonna go with my gut, you’re going to take the risk. So awesome, dude. Thanks again, colada for joining me today. It’s been so awesome catching up and just kind of hearing your story and where you’ve been over the last decade and a half since we really see each other. If anybody wants to add to the conversation, if they have questions for Kalina, about what it is to be in sales, software sales, or anything like that, or what are anything that you can email me at No Better Time firstname.lastname@example.org I can forward those questions to Kalina. And who knows, maybe we can have another conversation, you know, dig into something, but thanks for listening. Until next time, just realize it’s never too late to take those risks to learn new things, you know, whether you’re 25 or 55, you can make changes that will improve your present, not just your future. Alright, thanks again. Thanks a lot. Bye
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