The Significance of Relationship Capital

we need credit cards, we need inheritance. All this stuff is important. I'm not discounting it. But after you know, sustenance poverty, which is a roof over your head, food on the table, reasonable healthcare. All other forms of poverty are mindset related. Think about that for a minute. I covered in detailing my book Up from Nothing, and I talked about the five pillars of success, and none of them are about purely money, or actually none of them around money.

There was some connective tissue, there was some energy. They even maybe believed in me, and yeah, maybe it was a little bit of guilt while they've made the first purchase. But after a while they're like, you know, this kid's got onto something, and these are good products. And I sold Avon, I sow yes, Avon I sew omni jury later on in my life out of business, these are multi level marketing companies. I don't do it anymore, but I did it back then. There was a great way

to get started in business with no capital. But you know, multi level marketing, by the way, completely separate thing. I'll do a video on it. I mean, I'll do a podcast on it. Actually not a long term play for you. I sold Stacey Adams shoes through mail order. It was a form in my briefcase with some visuals and remember Layaway, remember sears Layaway some of you, some of you remember that, And I would go and sell it. I mean, I

guess I'm decent at storytelling now. Because I had I didn't have any real assets other than what was on my ass my rear end sorry, and I didn't have any physical inventory, and I didn't have well, I had me and I had these slicks, these marketing slicks, and then I had the rapport with whoever I was talking to. So ninety percent of my sales came from people I knew. Yes, I started with my family, then it went to my friends, and it was my teachers at school, et cetera. That

was the beginning of a relationship capital. I didn't know what it was back then. Then I built a relationship with the banker in my classroom, and then I built a relationship with yes friends in the neighborhood. Of course, I built a relationship with the owner of Max liquor store. That's where my first business came from, the neighborhood candy house, inspired by him discounting me as a young man talking to a man with a college degree. I'm like, yeah,

but I've got cavities. Man, I'm nine, almost ten years old. I'm telling you settling the wrong kind of candy. You wouldn't listen to me. Put him out of business. Out of the candy business relationship capital is how I first got my first acting gigs. I was an actor, was a very good one. My father, Johnny Smith, I wanted to go to business school when I was a young man, and I said to my dad, who was making decent money. We didn't realize until later he was financially illiterate and

technically broke. But we had a nice cash flow lifestyle, and so in the present moment everything seemed fine. We didn't realize it was a house of cards at that time. And I told him I wanted to go to not just private school, I wanted to go to a business school. And I was in my early teens. I wanted to go live with him and I wanted to go to business school. When to move from my mother's house to his house, and so he didn't want to tell me that he didn't know how to get me in the

business school. So he told me find the school and I'll get you in it. Okay, I like a good challenge. So I went to what was the Yellow Pages now you call it the Internet search, Google search whatever. I went to the Yellow Pages, opening up, went the private schools. Found the biggest ad in the Yellow Pages, Hollywood Professional School. That looked like a business school. Hollywood Professional School. Oh, that looks like a business environment. And I called up

and spoke to the head mistress. Had you know, lady in charge? Person in charge? That missus Mann is her name? And was her name? She still passed since passed on mclory. She was ninety at the time. I was talking to her, and Hey, I'd like to you know, hello, not hey blah blah blah. My dad was information got I wrote down how much it was. She told me it was eight forty five in the morning to twelve forty five

in the morning, and you're out of school. I'm like, what I said to myself, what kind of school is this? I mean, I get to go to business school and I'm out half the day?

a school for acting professionals. Hello, and I just got it wrong, got the memo wrong. And they went from eight forty five to twenty forty five because typically your mentor in entertainment on the set and you don't have a normal life, and you don't know how to work with people, and you don't have social skills all that stuff. Well, I didn't have a set to go to after I

got office. So after you went to school from a forty five to twelve three y five, you then had at lunch went to your movie set, which was coordinated, and you went.

entire life. Ome girl hit a U turn and burn rubber and got the I got of there, but a very sweet lady. It was very nice of her to do it. Her and her troubled brother Griffin O'Neil became we became friendly, and this leads to my point of our relationship. Capital I became an actor not because I was talented, because I really well wasn't. I became an actor because I knew these people, got to know these people and they would say, don't.

right people vouching for me. And then I turned out to be an okay actor, not a great one, and I had a decent underwhelming career. So I had a relationship with entertainment in Hollywood which went on to help me later on in my life where I learned, you know, to communicate and to compel and to storytell. Probably I'm sure that's where I picked up some of it, and ultimately I decided that, or maybe the industry decided for me. That's that didn't get any meaningful work after a while,

that this was just not for me. And I didn't want to be an alsul Ran. I don't want to be one of the guys who was just an okay actor. I want to be excellent at what I did. Doctor King once said, if you're going to be a trash collector, to be the best trash collector of the world's ever seen. So I want to go find my you know, my destiny, which I knew was in business, which is the reason

I went to the school in the first place. So fast forward now I have befriended Will Marshall and Bill Raphael at the Mayor's office in Los Angeles, and Mayor Tom Bradley. He's pre Internet, so you wouldn't know that he was the first black mayor who was mayor of a city for twenty years, the city of Los Angeles. And he was international. He was common knowledge in Asia,

specifically correct places like Korea. Just an incredible guy. Mayor Tom Bradley the city of Los Angeles, and through Bill Raphael and Will Marshall, who vouched for me in my entrepreneurial zeal. I got to meet Mayor Tom Bradley, and then Mayor Tom Bradley invited me on a delegation trip to Korea, South Korea. I didn't have the money, but

I hustled and I, you know, found the money. So the money you're spending on vacations or buying a stereo or you know, buying the newest iPhone or ipping, you know that couple hundred dollars to a couple of thousand dollars that could be redeployed, you know, the bank of you to invest in your dream. Well, I had deployed money I would give used to floss and hang out.

I deployed that. But things like a trip to well, there was a government trip which you had to reimburse the government for its costs.

a portable computer. Hello, portal computer that was, you know, fifty pounds. I used to travel with a computer box, a leather box that had and it was a little coach seat right, and the front would come down as a keyboard, and it was a screen in the back would flip out, and it was a printer, yes, full printer, full computer, full keyboard. And can you imagine people see sitting next to me and around me, like what's going on with this dude here? And uh uh? But I

was always I was I was really. I was about my I was about my grind. It's about my business. So Bill roth Feel was like sorry. The assistance of the mayor was like, who is this little mappyhead kid kid? Why is he here? And Will Marshall was like, well, the mayor likes him, but really Will Marshall and and and Bill Rafael liked me, and a couple other people there and the Mayor's Office of Small Business Assistance, and and then on time the mayor did learn to like me,

and so everybody else had to tolerate me. And that introduced me to international and I got that bug, and I've now been one hundred countries. And I built a relationship with Mayor Tom Bradley, and later on I went on to help the City of Los Angeles before I found an operation to Hope created a city Lending Agency UH.

I innovated it a private public partnership with the City of Los Angeles and the private sector drifting loan banks in the city of LA But I was told I was too young to run it, so they gave they let this other guy run it who was in it me by the way, and didn't want to acknowledge that I was actually the founder of this idea. But I knew that I had done it, and Tom Brawley knew that I had done it, and he was appreciative that

I wasn't being a bully or not a bully. I wasn't being pushy in trying to make sure I got credit for it. I just was happy that the city was doing it. So that built more rapport with me and the mayor, and other than the fact that I was repeatedly late for meetings, I remember one meeting with the mayor. Please don't do this. Please do not do this. Even black he born on probation in America. You know, twice as smart, twice as intelligent, twice as Will dressed,

you know, twice as early step, twice as late. Please don't do it. I just what I'm about to tell you. For some reason, I'm sitting in my office in West Los Angeles at the Irvine Building at Supovita and San Monica, the south west corner, not next to the four five Freeway, sitting in my marble office building for what was in Brian Group Companies, and looking out south through my Florida ceiling glass windows, feeling and self important. And I had a meeting with Mayor Tom Bradley was a young kid,

you know, twenty one years old or something. I had done a master buyout, bought this company that I had previously worked for. And I'm sitting in my own office. I'll tell you that story later. And I had a meeting with the mayor. But the problem was this was one new clock meeting and it was twelve forty five.

Why in the world I was still sitting at my desk at twelve forty five when I had all day to finish what I was doing, which was not really all that important, and get my little behind in my car. You know, we all know traffic in la is ridiculous. Of course I was forgetting late. I was disastrously late, and the mayor still was graciously saw me. Will Marshall and Bill rolferre wanted to wring my neck, but they

gave me. They gave me a pass. Knew I meant well, but that was a lesson, and of course I still remember to this day. I'm just telling you the story, and that has to be now. I mean, it's thirty plus years ago and I'm still embarrassed. But relationship capital got me in the door, and sometimes relationship capital got me to sell, and sometimes relationship capital saved my rear end from embarrassment. Here, let me put it in another way. If you want to have a little grace in your life,

you better show a little mercy. Grace is when you get what you don't deserve, and mercy is when some rancid sob does not get the rear end are telling off that he so rightly or she so rightly deserves. Again, mercy is when somebody who has offended you in the worst way, does not get the cursing out or whatever that they so rightly deserve. But grace is where you and I get the blessings and the gifts that we don't deserve. If you want to have a little grace,

learn to show a little mercy. Relationship capital is the bridge to that. You know, people upset about networking. It's a waste of time. Only broke people network. I hate to tell you, but you know, you go into a meeting and you can't get you can't get your business card out because it runs into the person aside the

other side trying to give you their business card. And then you go home and you put all those business cards in a desk and you never look at him again, and you certainly don't follow up.

to bore you or myself. And you're smart enough to get the gist here. Dave Ormara was a guy on Malibu cinemas. I don't know I met Dave, but I think he just went into his theater one day and struck up a conversation. He owned Malibu Centems back then, and we got to know each other and when to go visit him at the theater. I never asked him for a thing. At some point he started asking me about my dreams. And then, you know, I didn't have a car, so he sold me a car, a little Triumph I

believe it was convertible British job. And I had some dreams and he invested a few dollars in my dreams. And one of the dreams was a mobile detailing business that didn't work. Another one of my dreams was a concert promotion company that didn't work. I was a manager for one of the lead singer of the Platters, J C. Parrish, that certainly didn't work. I ended up signing for When I started signing for at power attorney started signing for his dental work at the dental office, I knew something

was wrong, and I mean, I got cleaned out. He meant well, he's a good guy. But I got cleaned out. And would I hold a concert at Rialto Performing Arts Center. I was the first client of the Rialto Performing Arts Center. You can look it up now, it's been there for twenty eight years plus, but I was a first client

ever to rent the place. And I had an actor come out in a limousine as a VIP guest, and I had fliers all over the city of Rialto, and I had J. C. Pearis of the platters singing, and the real concert roots in the area went and tore all my flyers down as I put them up, gangster gangster stuff. And it was like literally one person in the audience, and that was my mother. That was I think one of two times I got a loan for my mother. She she loaned me five undred dollars to

just this encouragement. I was completely devastated, but everybody gave me a pass because they knew I meant well. They'll get relationship capital. Even the people who sponsored me, who allowed me to rent this performing arts center, didn't hold me accountable for the whole contract that would have bankrupted me. So fast forward. Now again all these I didn't make. I didn't pay Davel Mayor back. Okay, So David Mayer said, look, in order to pay me back, you need a job.

Like you know, you're not really good at this entrepreneurship thing at the moment.

allowance back, in his food stipend. I'd work for free if he made me a partner in the company in a new division that I would lead. And to a humor me, Steve said, sure, he was a capitalist. He's like, I get a free employee, I need to pay you. And he left and well then I think, you know, I failed the real estate California real estate test three times. You can only pass it fell at four times before they think you're too stupid and won't let you. FELT want to let you take it again. I passed the

fourth time. First year did zero in business, second year did nine million, thirty or fifteen million, fourth year twenty four million. I did a measured buyout and bought my employeer again. I'll get into that in another podcast. I'm twenty early twenty something at this point, and Davel Mahyra was proud of me, and Steve Miller was shocked. And how did I get that deal done? By the way, I opened the Yellow Pages again found the biggest ad for a law farm in Century City. It was a

Jeffer Mangos, Butler and mar More. And I couldn't say Jeffer, and I couldn't say Mangos without mangling it, and I couldn't say Marmorro. So I called and asked to Jim Butler partner. He answered the phone, and I told him what I was calling Viio, that I was going to do a measurement buyout. He says, you you can't do that. You can't tell me what I can do. I'm not you know that's racist. He's as slow down, ye man. He said, I'm telling you, I know you've Miller and

you don't want to buy that business. Let me make a phone call. So he hung up, call me back and said, look, you're the only guy making any money over there, why don't you just buy your own division.

was called Cedars Bank. It's changed names several times, but William Hannah, who was the CEO don't call on Bill's name was William and I had a relationship with William Hannah, and I convinced him to give us a twenty five thousand dollars line of credit for Operation Hope. And Operation over had you know, no budget, like one hundred thousand dollars. I mean we had no we were just starting out and the government shut down. Maybe had a couple hudred

thousand dollars. Think the government shut down was twenty ninety four, I believe, but certainly we couldn't We couldn't justify us line of credit. He gave me his line of credit. We ran through it pretty quickly.

Do not make this loan. I wanted one hundred thousand dollars line of credit, and William overrode his chief financial officer at the bank. He under his own authority, and I guess if I default it, he'd been reliable for He gave me that loan extension, and I said, I'll pay you back. And I not only did I pay him back, I paid him back early. Because I knew that my reputation was writing on that. So I went and hustled to hustle, worked hard, and I made my

highest priority keeping my word to William Hannah. And that then turned me keeping the word about a twenty five thousand dollars line of credit, which turned into one hundred thousands line of credit, which turned it into a to me paying the whole thing down to zero, then turned

into a million dollar line of credit. Hello, and then it then turned ultimately into them leading a consortium of banks for a multi million dollar line of credit at that point, the largest line of credit to an unscared line of credit to a nonprofit organization in California at that time, Community's nonprofit.

didn't have it. So I rode the bus. Got a job at Glassdoms for Fish as a bus bus boy, worst shift, seven in the morning, breakfast shift, and and I had to get the bus to get there. I had to get get up and get going at five in the morning. And after a few weeks, I'm like, oh no, this is not my crowd. Lawyers, it was doctors. It was you know, all good people. But they were the folks serving the people that I'm trying to access. I'm trying to get to the folks that they are

clients to. They were vendors to wealthy people. I didn't want to be a vendor, even a high end vendor at a couple of I was an hour as a lawyer or whatever. I wanted to be the dude, right, So I quit and then I went and drove further up the coast to Malibu to glad the Jeoffrey's restaurant just been opened. Geoffrey at the end, beautiful man, great human being, since passed on the glory. Harvey Baskin was his lover and was his financier, and Harvey at this

is the first time I've ever seen this. Harvey just got to give him the restaurant as a toy, like this is a gift. He was just like, No, here's a restaurant for you. You want to be in a restaurant business. Here It's called Jeoffrey's Malibu. It's still there. And I got to know Jeoffrey. They gave me a Monday evening shift as a busboy, then a waiter. Translation. I was a really crappy busboy and a waiter because a Monday shift is horrible. You put your worst performance there,

adding care I work. I got to know Jeoffrey, got the but Jeoffrey wasn't the financier. He was just a face. I got to know him that I had to get to know Harvey, So I got to know Harvey a little bit and Harvey had two Black Ribbean assistants. Okay, with Harvey's got a little soulle in him. He's got he's got a little flavor. He's got these two brothers or his assistance. So I got to know them too, and enough people vouch for me, and I got to know Harvey, and then he was like, well, you want

to come work for me? Yes, So I took a pay cut, if you can believe that, from being a waiters, they got tips to go become effectively a twenty thousand dollars a year a personal assistant to a guy worked two hundred million dollars. Now, don't start talking about fairness. And oh you know I'm not being paid enough. No, hold on to the story. Now, I got to work in this beautiful mansion on the beach. I saw ocean crashing in every day. I saw this guy walk around

in a Jesus robe. I call it a robe. I'm sure you have any underwear on. This just was Harvey. Long beards, some sandals, and he did.

He said, say, hey, hey, John's slow down now. Everybody listening now, He said, John, you got to figure out what business you're in. Do you want to pick my brain or pick my pocket? One lasts longer, pooh man, because I asked. He said, you've gotten you know, tens of thousand dollars worth a free consulting if you've asked me every question on the sign here, and I'm going charge you for that. But you don't want to pay

the bill. I mean, nothing in life's free. So I pulled that one hundred dollars bill back, and as much as it hurt me, I took everything I had and I paid the bill for this multi millionaire. You may not think that that's not fair, but life's not fair.

of my other podcasts. I think about being homeless. Bill Rogers of what's now Truest Bank used to be sun Trusts a mentor, Jim Wales before him, the CEO before him, Brian Jordan, the first Horizon Bank. People like Charlie sharfon Wells Fargo, Doug McMillan at Walmart. Guy who made the biggest bet on me I didn't know it was Marraghetti who runs three hundred fifty billion dollar areas Management today CEO.

And Tony Wrestler his the chairman of areas CO invested in my real estate company, which I then built with a forty million dollar investment, no business plan, no PowerPoint presentation, nothing but my credibility in my word. And I built that company from zero to two hundred million dollars in acid value, just under that one hundred and eighty and

seventy million dollars in asset value. And I sold that company in December Christmas Eve twenty twenty one, they say, clipped a coupon on Wall Street and paid off eighty nine million dollars worth of debt and equity, including my investors with interest that I promise him. And I still am proud of that to this day, no favors. And I've done four billion dollars plus worth of deals.

And he was sitting in a government meeting one day and somebody, some company had a fine and they had to figure out what to send five million dollars, and he just said, well, you should send an Operation Hope. I got the five million dollars through my nonprofit because he believed in me and I had a relationship with him. I can do that all day and all night, and I might in the description list a number of these names. Doctor Dorothy Hype, you know, wasn't just men, women too.

Doctor Dorothy Hype was a mentor. It was civil rights, it was social justice, it was entertainment. It was business, it was banking, it was finance. All quarters of my life, relationship capital right that I honored and treated. And I'd go in a room. The first question I'd asked is you know, I look at the pictures behind their desks. Tell me about your children, tell me about people love

talking about themselves. Most people want to talk about themselves, not asking the other person about tell me about yourself. And I was always just genuinely fascinated and interested in other people. And it was authentic, like it wasn't a game, and I never would ask for anything. And at some point, and yes, it took longer than you might like, but at some point in all these relationship, people say, look

what can we do together? I like you, Like I had this conversation with this one billionaire and I brought him a business deal and he cursed me out. He's like, man, stop bringing me business deals. Like I don't need to make any more money because I pay more taxes on income than I do on capital gains. It's a whole another video for another time, another podcast, another time, which is all the white it's whole ridiculous political conversation about

taxing billionaires is so crazy because they don't owe. You know, the secretary pays more taxes than a billionaire because a billionaire doesn't make any any active income. Billionaires make passive income. Okay, it's a whole nother thing, but it's just look look up the word passive income. Look up you know capital gains. The taxing capital gains is twenty percent and the tax on regular income. Is you know thirty five thirty eight you had. This local tax could be as much as

forty five to fifty percent. So anyway, he said, I'm good. I don't need to make any more money to paying the reer in. I got to pay a bunch of taxes on it. I'm good. I've paid my debt. I'll do this because I like you. That's it. That's why I'll do this deal. So if people don't like you, don't respect you, don't admire you, they're not doing anything with you. I don't have to. Nobody owes you a thing except a hello and a goodbye. So I'm saying

now goodbye. I love you too much. Go to Operation Hope, sign up and get the silver rights alright to deserve.