Podcast Interview—The WeInvested Podcast with Wesley Earp
Prosperity Lending: The Mortgage and Money Expert for Business Owners, ft. Alejandro Szita
Episode summary:
Alejandro is the co-owner of a boutique mortgage brokerage that specializes in servicing self-employed borrowers such as artists and small business owners. A lifelong student of economics, he provides his clients with practical advice about money and fi nance on a routine basis. In his upcoming book “Money—What It Is, How It Works, And How You Can Use It to Create Wealth and Prosperity for Yourself and Your Community,” Alejandro teaches the fundamentals of wealth building and answers questions such as “what is money” and “what is value.”
Podcast Transcription:
Wesley Earp: Today on the WeInvested Podcast, we have Alejandro Szita, and he is the Founder and CEO of Prosperity Lending. Alejandro, how are you doing today?
Alejandro Szita: Wesley, thank you so much for having me on your show.
Wesley Earp: Yes, sir. Thank you so much for joining us. I mean, you know, like we mentioned, or like I was mentioning before we started recording, I mean, I think we have a very interesting topic to talk about today and very relevant and I'm, I'm excited and looking forward to learning more about it.
Alejandro Szita: Thank you.
Wesley Earp: Yes, sir. Yes, sir. So, I mean, let's just, well, you know what, before we get started, would you mind letting the people know where they can find you on social media and the internet?
Alejandro Szita: Yeah. The best ways to go to my website, which is www.prosperitylending.us. So prosperity, like something prosperous, prosperitylending.us, and I'm on LinkedIn.
Wesley Earp: Awesome. Awesome. That's incredible. So, I mean, let's just jump right in and start a little bit and, you know, talk a little bit about where you're from and where you grew up.
Alejandro Szita: I am from Chile. I grew up in Santiago, Chile, that's in South America. And I've been back, and I've been in the US for like, close to 25 years now. But I've traveled, you know, to many other countries in Europe and other countries too.
Wesley Earp: I mean, so, you know, how would you say that growing up in Chile, you know, kind of just impacted your outlook on life and success?
Alejandro Szita: Well, you know, when you grow up in a place and when you are set, confronted with a set of things and you don't know any better, you think that that's normal. So when I grew up in Chile, I thought everything was normal until I came to the US and I started to see the differences. But it impacted me because Chile is really connected to the rest of the world, and what happens elsewhere happens in Chile. Here in the United States, we're a little bit spoiled, and we have been spoiled for many generations, and we think we had the exception. We think that what happens in other countries will never happen to us, and that as people can see now, and they will see in the future, unfortunately, it's going to happen. So I was confronted with a very young age with all of those things. Like when I was seven the government was removed by force, you know, when I was eight planes were flying under my house, bombarding the presidential home. You know, I saw the currency being converted from one thing to another and losing a thousand overnight, meaning a thousand of the previous currency became one of the new currency, and on and on and on. So I saw all of those things and you know, when you're in it and you have no other choice, you think it's normal.
Wesley Earp: So, I mean, you know, you, you just mentioned that you've seen you know, some, some things that would, I guess traumatize the average person growing up here in America and in the US. So, I mean, how was that transition for you, you know, just moving from Chile over here to America? I mean, was it, was it a sigh of relief? Did you feel like a sense of, you know, prosperity? How, I mean, what emotional state were you going through upon that, that transition?
Alejandro Szita: Actually, all of those things that I've told you happened over many, many years. It's not that all of it happened at the same time. So when I moved out, I didn't move out here. I moved out in, into, into Europe. I lived in in Europe for many, many years before I came here. I would say it was not a sense of relief. What motivated me was a sense of adventure. You know, I was younger, I wanted to see the world, you know, I didn't know what my niche was. So I was in an exploratory mood, you may say. I didn't, I didn't move out because I wanted to quote unquote escape or, or anything. I just moved out because I wanted to explore new, new opportunities and find myself.
Wesley Earp: Exactly. So I mean, is that like a trait or characteristic that you've always had just wanted to explore and wanting to see more and, and just kind of do, do more?
Alejandro Szita: I've always been very politically incorrect. So part of my political incorrectness is to like go to places, you know, and do things that people sometimes ask themselves. Why is he doing that?
Wesley Earp: Yeah. And there's nothing wrong with that at all. Nothing wrong. Yeah. But I mean, yeah, man, so I mean, you, you sound just like a very adventurous person, man, and a very curious person who you know, just likes to, to ask questions and like to figure things out. So I think that's a great you know, trait to have.
Alejandro Szita: Thank you, Wesley.
Wesley Earp: Yes, sir. So, I mean, you know, let's just switch gears and talk a little bit about, you know, the current company that you're building and, and growing and that you've been working on. You know, and I want to ask, what is Prosperity Lending?
Alejandro Szita: It's a mortgage broker that makes loans to the people that the system has forgotten and doesn't care about them. Those people, believe it or not, are the business owners, but I'm not talking about business owners like Elon Musk or people that make billions and billions. I'm talking about business owners like me. They've worked, they have their own business. You know, probably they are architects, maybe they're lawyers, maybe they're doctors, CPAs, maybe they're engineers or maybe they have a shop or two or three or four. Those people, believe it or not, are the ones that are the most neglected by the financial system.
Wesley Earp: I mean it, why do you think that is? Why do you think, you know, these business owners are, are the most neglected by the system, by the financial system?
Alejandro Szita: Because the financial system became like a cookie cutter machine that caters to 95% of the people. They don't care about the 5% because they already make so much money with the 95% that they, to them is collateral damage. So basically we have a cookie cutter financial system. No one wants to listen. No one wants to invest the time. If you go to a bank, you go to a credit union, not a credit union, I'm sorry, credit unions are a different breed. So I take that back. But if you go to any financial planner or any bank, and you are sort of a business person and you have a, an a sort of an unconventional business model, or if you, you're an artist, okay, we have an artist, you know, he worked only from three in the afternoon to midnight, forget it. No one wanted to listen to him. So if you are one of those people, you're going to have a very, very hard time because they're going to try to place you on the cookie cutter, and then when they can't, they're going to say, you know what? You don't qualify. But it's not that you don't qualify, it's that no one, no one, very few people want to invest the time to find out how you could qualify. I don't know if that answers, I don't know if that answers your question.
Wesley Earp: Yes, sir. I mean, that's the, that's the exact answer that we were looking for. I mean, and it makes a lot of sense, you know, like a lot of the larger institutions, a lot of the big banks, they're making money. You know, they have their bread and butter, so to say or so to speak. So why would they need to venture off and, and kind of you know, do business with people who are, are less conventional. I could see how it could scare a larger corporation. They want to kind of go with the safer choice, but I mean, just to, to have a business and a company that caters towards the the outliers, you know? And just kind of solving the problems for solving problems for those people who are underserved. I mean, I think that's an amazing you know, amazing company and amazing route to take. You know, the next question I want to ask is, you know, how did you get started in this industry?
Alejandro Szita: I got started because the financial world attracted my attention since I was seven. I always remember I was watching tv, they were talking, this is in Chile, they were talking about the interest rate, and I was with my dad. My dad was a businessman, and I saw that he was worried. So I said, I was, I don't know, I was like eight. I said, dad, why are you worried? You don't owe any money. Why should you be worried about the interest rate? And he goes, oh, well, you never understand. It's too complicated. I'll tell you later. But then I went, well, why is he worried? You know, he doesn't owe any money. I know that because he's a businessman. I used to go every Saturday or during the week to the business, you know, I would roam around, play around, talk to people. So I knew that he didn't owe any money, and that sparked my curiosity. Then later on, when I was like 17, I remember I met one of his bank managers, you know, he was a very wealthy person, so I met one of his bank managers and he said, hey, Alejandro, just come to my office whenever you want, ask me anything. Probably he was being polite, but I took it to his word. And one day I called him and said, hey, I would like to go to your office and ask you a few questions. And he says, yes, come over. So I sat down, this is the branch manager guy, okay. And I said, can you tell me how money's created, where money comes from? And he starts to give me half an hour lecture. Through the lecture, midway through the lecture, I, I realized, oh my God, he doesn't know. That really, really, really sparked my curiosity. Here you have a guy who's about 60 years of age, branch manager, decades of experience in a bank. I mean, we're not talking about somebody that is in a grocery store, right? And he doesn't know the most basic question, you know, where does money come from? That, that really shocked me.
Wesley Earp: Yeah, man. I mean, and I think that in itself is a very interesting question. That's something that I, that's a question that I never thought of myself to ask or, you know, to ponder about. Where does money come from? I think that's an interesting way to look at it.
Alejandro Szita: The answer is even more striking.
Wesley Earp: And that's what I was about to say. I would love to hear your answer on that and where you think, you know, money comes from
Alejandro Szita: When an honest person signs a piece of paper saying, in so many more days into the future, I will pay you so and so, money is being created out of thin air. That's what money is. Money is just a promise. Like, when you go, let's say I give you two practical examples. You go to the store, you get your credit card, you make a purchase, you swipe the card, or you put your digit, or now with the phone, you know, you put it through the scanner, it goes blip, some numbers flash, you go out with the merchandise. Believe it or not, those numbers did not exist previously. The credit card company is not giving you any money. That money was created just like that when you said, I want that. So you created money right there. When you get a mortgage to buy your house, the money doesn't exist. Really. When you sign the piece of paper, the final piece of paper saying, I promise to pay this and this and this, boom, the money comes into existence. That's where money comes from. It's when people freely decide to buy something or provide a service and freely enter into an agreement, and I'm talking about an honest agreement, obviously, and they, and they memorialize the agreement either signing or doing a physical action that makes the agreement, you know, like more than a verbal agreement, that that's when money is created.
Wesley Earp: I mean, it, you know, I think that's a really good point, really good example. And I mean, you know, it sounds like credit to me, which is exactly what America is built on and most other countries are built on today is credit.
Alejandro Szita: Exactly. For sure. In the actual, in the actual, in the colonial times, you know, when in the 1700s, you know, when America was just starting out the currency that people used was the British pound, but there were not enough notes. There were not enough coins. So people periodically run out of the British pound. So they invented their own currency called the actual script, the script, which just a piece of paper that said so and so and so, you know, has this type this money. And that was a piece of paper that was traded as money. If you were a farmer, you could go to a bank and you can say, hey, I have so many bushels of wheat or whatever, and the bank will give you a receipt. That receipt became money that you then use to buy supplies and things like that. So it's, it's the production of things. It's the exchange of things in a free society that creates money.
Wesley Earp: Wow, man. I mean, and that, and that definitely makes a lot of sense, man, about how we got to where we are today. And I mean, in today's time, in today's world, credit is one of the most powerful things that you can have access to. I mean, yes. You know, if you, if you have good credit and you know basically what to do with it, how to access it, you know, the possibilities are, are limitless for you.
Alejandro Szita: Yes.
Wesley Earp: I mean, it, you know, just kind of doing my research and reading up on you, you know, one of the things you believe is that it is a good idea to own property right now. So what I want to ask is why do you think it's a good idea to own property right now?
Alejandro Szita: I've read a lot of books about people that are a lot clever than me. Financial planners, economists, I know a bunch of formulas, rules, blah, blah, blah. There is a difference between what is practical, feasible, and theoretical. A lot of people tend to focus on theoretical. Oh, if you did this, if you put it on the market, if you bought so much bitcoins, if you did that, all of that is theoretical. Because what happens is this, you need to, and I'm not the one that said this, you know, this is another philosopher, another guy a lot clever than me that came with this. He said, if you really want to save, if you really want to build a nest egg, you have to make the saving a bill. You have to make the saving a necessary expense that you can't do anything but do it. So when people get a mortgage, initially, when they get the payment coupon, to them, that's a bill, and they pay the money, and they think that that money is disappearing, but that's not what is happening. Out of the money that you pay on the mortgage, an increasingly percentage is coming back to you. It's like you're paying yourself. Now, somebody that reads a financial book who criticize me and say, hey, but that's inefficient. That's not a good rate of return. You could do this other thing, blah, blah. And like I said, he will be right, theoretically speaking, but in practice, for most people, buying a home, it's one of the best savings techniques they can do. Yes. It's not as good as, I don't know, having a super hot investment. Yes, there are other things better that he or she could do, but guess what? We won't do them. Even though all these things exist. We are not going to do them. But the mortgage, we are.
Wesley Earp: Exactly. No, and I mean, that's something, I mean, I think that's a very, very interesting and very true statement that you just made because, I mean, I was thinking about it a couple days ago. You know, buying a home, you know, when you, when you pay your mortgage, it, you don't have to think about, okay, where do I want to invest my money? What's the next hot thing? And you know, with the average person, your average business owner, your average W2 worker, I mean, we have so many different things going on, we may not necessarily want to think about where can I put this money to invest it? So I think owning a home and, and paying, paying down on your mortgage is a great alternative to that and is a, a great, just safe kind of thought free investment.
Alejandro Szita: Yeah, there are, there are a couple of others, but I don't want to take all of your time talking about those. But there are a couple of others that are just as good as the mortgage, but they are not intuitive. And the problem with these things is because investments are advertised by Wall Street, the propaganda and advertising machine is so big that whenever I say these things, immediately get a backlash and people criticizing me because they go, no, you're not. But it's because of the propaganda. This is what I've seen in real life. I've seen in real life that people buy a home and let's say they have no other investment, they get way ahead in life. That if you try to save in stocks or bonds or any of those things.
Wesley Earp: Exactly, man. And like I said, like if you, if you want to have alternative investments or different types of investments, it takes, I feel like the average person may not have time to, to do the research to understand those alternative investments, those different ways of investing. So, I mean, mortgage is just, I feel like something that having a mortgage and buying a home is something that everybody is accustomed to, they're used to, and you can just kind of do it automatically. Like you said, it, it just becomes that bill where, you know, you just save.
Alejandro Szita: Yeah. And another thing that I want to say that here in America, we are very lucky, and I will tell you why. In a country like mine in Chile or Argentina or any, or even in Europe, getting a mortgage is not easy at all. Rates are extremely crazy, and you are not going to get the same deal. Here in America, all you have to do is just have a job, make a little money. You don't even have to be a millionaire. You don't have to be a well-to-do person. You know, you don't have to be a genius at math or anything. And you go to the bank and they say say, well, it's five, it's six. And now people are bitchin' and say, oh, five and six is expensive. But guess what? In my country it starts like at seven plus, plus inflation. So by the time you have inflation, you are like a 13 and a 14. And people think that that is normal. And not only that, then you need to pull like 20% or 30% down. And not only that, then you need to have to show that you've been at work for like five years, that you are this, that you're, that you have so much money in the bank. The barrier to home ownership in other countries is so much greater that, that's why I'm saying that here, we are spoiled. We don't know how easy it is. Take credit cards, forget about going and getting a credit card in my country or in Europe. If you are not already a well-to-do person, forget about, if you're just working for a company making a little money. They're going to just laugh in your face and they're not going to give you a single dime. That's the reality of other countries. So even today, with all the problems, all the volatility and everything, and all the stuff that is going on, we're so much like here than in other countries.
Wesley Earp: So I mean, as a business owner or a self-employed borrower, what type of mortgages are available to me?
Alejandro Szita: There are, we have like seven methods in addition to tax returns, to qualifying a person that wants to get a mortgage, because for a business owner, a tax return is a bill. What does an entrepreneur do with a bill? They try to minimize it. And now you have this bank that says, show me the bill, and then I'll see how much money you make. And you go, hey, but that, you know, the two things don't match up. If you are a W2 employee, yes, then it makes sense. So we look at bank statements. If bank statements doesn't show how much the person makes, we look at what he owns. If that doesn't, you know, I've had, like, I had a very famous, a rapper artist that wanted to buy his home. He was a very special, he's a very special individual, completely out of the ordinary and completely way beyond, you know, most normal people. He had all the money to buy his home in the bank account in one of his bank accounts, all of it, and more. He could not get a mortgage. Can you believe that? So we have another program that if you have all the money or a little bit more to buy the home, we can use that. We, we don't tie it up, but we can use that to qualify the, the business owner to get a home. So we can use business bank statements, personal bank statements. We can use your assets, we can use how much you have in your bank account. We can use the business type you have. If you work with the CPA, we can, we can work with your CPA to actually audit the, your business and produce a letter. And with that we can qualify you. We can also qualify you just with the down payment. If you have enough down payment and you have a credit score that is not shot, we can also qualify you. Bless you, man. So there are many ways, there are many ways besides, you know, the tax return.
Wesley Earp: Incredible. I mean, and you know, we just kind of talked about this a little bit earlier or just a moment ago, but I want to ask, you know, how do you grow wealth? I mean your own wealth as well as wealth for, for the community and your community?
Alejandro Szita: That's such a good question. I want to try to answer the best I can. One of your guests, I think Penelope said something very interesting. She says, one thing is the ability to make money, and one thing is the ability to hold onto it. And they are two different abilities. I always thought that as long as you made enough money, you were going to be fine. But then I discovered, through failure that that's not necessarily all true. So this is, this is what I've seen how other people make money and how I try to copy them. If you are sort of business oriented and want to have your own business, have your own business, that's the best investment you can ever do. It's going to be hard. It's going to take a few years, it's going to be stressful, but when you pull it off, that is going to be your best investment. And then along the way, create pockets where you throw money at, but that the money is not lost. Like one pocket is a mortgage, for instance, another pocket, pocket is a well structured whole life life insurance. And again, some people listening to the podcast are going to go, no, that's a bad investment. You make little money, do this, do that, blah, blah, blah. And they will be in theory, right. But in practice, wrong. So you create this pocket, the mortgage, the whole life, life insurance policy, the investment in your business. So at the end of the month, you end up with nothing. But it's not that you end up with nothing, you are tricking yourself into saving and putting money away in all these different places. And then you keep doing this for a few years and lo and behold, now you have all this money, quote unquote appear out of thin air that you didn't even know you had.
Wesley Earp: I mean, and you know, you're giving us really valuable and useful information right now. I mean, that we can, that we can go out and act on immediately. You know, I agree with you 1000%, having those pockets where you put money, you know, have being able to put money into a mortgage or being able to put money into a home or utilizing that whole life insurance policy. I mean, which is what a lot of wealthy people, are vehicles that a lot of wealthy people use in order to grow their wealth, have access to liquid cash. I mean, it's just, the flexibility that these options give you is, is unlimited.
Alejandro Szita: Yeah. And if you're living in Southern California, Northern California, if you buy $1,500 worth of silver or gold, you don't have to pay sales tax. So just buy a few you know, silver coins. Now again, somebody's going to come and say, hey, that's bad. You know, you're wasting your money. You should buy this, blah, blah, blah. But guess what? You buy the silver coin, it sits there, it does nothing. It gets you 0% of return. But guess what? It's there, you have saved and put away some of your money because this is the, I'm just going to tell you this, and if I'm making it sound too complicated, just stop me Wesley, okay. This is a secret, not a secret, but this is something that I discovered to my shock. If you have, let's say a hundred bucks on stocks, then the stocks dive and now you have 80, okay? And now stocks go up another 20%, most people will go, well, a hundred hundred went down 20%, now go up 20%, another hundred. And that's not the case. Look at this. If you own a hundred, goes down to 80, okay? 10% of 80 is $8, right? That's $16. So 80 plus 20%, that's $96. So you see went down 20%, went up 20%, you're not even where you were before. And one, two or three years went by. So from year one to year three, you think you are at the same point, but you lost. Now compare that to having your hundred bucks and earning, four or 5% rate of return, people go, oh, four or 5%. That's crazy, man. I can get seven here. But guess what, this 5% rate return will beat fluctuations of 10, 20 or 30% on the market any day. And of course, no one working for Wall Street will ever tell you that.
Wesley Earp: Exactly. I mean, yeah, and especially in today's time, man, where a lot of the news articles are saying that we are in a recession you know, the market, the markets are down. Inflation is high. So, I mean, you know, what I want to ask you is that, what can an individual do to survive and thrive under any economic conditions and, you know, under any political system?
Alejandro Szita: That's such a good question, Wesley. And I will say this, if you like reading and have fun, I'm going to answer it. But the best, the best ever explanation I found to your question, it's in a book called, I will remember this book. This is a book, this is a fictional book, but this fictional book tells you the story of a guy on a Nazi concentration camp and how he created a company in a Nazi concentration camp. That's the best book that answers the question. And I'll remember before the end of the podcast, and I'll remember, I'll tell you the name, but this is how you do it. Find out what you're good at. No matter what it is, don't think about the money. Don't think, oh, well, you know, lawyers make so much money, I should study law. No, because if you don't like law, even though you have lawyers that make a thousand dollars an hour, you're not going to make anything. Don't choose your career only because of the money first, choose your career because you have fun, because you know that you can do it. And because you can do it well, and you don't mind doing it over and over, then focus on, focus on how you can make it profitable, but don't do it the other way around because you will fail. And I'm talking from experience and then connect with local people. Don't depend on this all the time. Don't depend on your cell phone, on the computer. Yes, we're doing this podcast through the computer. Yes, I use Zoom to talk to my customers, but guess what? I also see them face to face. I never, we have to go local. You know, the powers that, don't like us. Just to put it mildly, you know, people that are listening to this podcast, I'm sure that they will understand what I'm talking about.
So don't depend on what the powers that they want you to depend on. They want to hook us on this electronic thing, you know, and we can use it, but don't depend on it. Go out and meet neighbors. Go to a cafe and meet neighbors. You know, talk to your neighbor. Maybe you've never, I mean, I'm not talking about you, but I'm saying to the listeners, maybe they never talked to their neighbors before. Find out what they do for a living. Because when things get tough, these are the people, you and them are the people that are going to survive all of this that is coming and on any financial situation. Because the greatest joy that we get as, as human beings is interacting with other human beings. That's where really our joy comes from. And of being of service to each other. And then if, if we are acting that way, the money will follow. Yes, you have to know a few rules about money. Yes, you have to know a few techniques, but if you don't have the human connection first, all of those techniques are meaningless. Yes, there are people that make a bunch of money on the internet. Yes, there are people that publish a book and they sell 20,000 copies, and they become a millionaire. But that, that is like going to Vegas. That's counting on going to Vegas and winning, you know, the slot machine. Yes, it happens, but that's not what is going to happen to 99.9% of anyone listening to this podcast. Not even me.
Wesley Earp: No, I mean, I think that's a great point, man. Just, it just emphasizes the importance of networking, you know, networking outside of your cell phone, like you mentioned, getting out there and talking to the people getting involved with their community, getting involved, getting involved with the people around you. So, I mean, I just think it's a great piece of advice. I mean, and you know, something important too is that you mentioned is understanding what you're, you're good at or what you're passionate about, you know, and figuring out how to monetize your hobby or how to monetize something that you like doing. And I feel like that'll make work more enjoyable to the point where if you enjoy what you do, it never becomes work.
Alejandro Szita: Yeah, yeah. Like you, for instance, you obviously like doing these podcasts, so you will find a way or you are already in your way to monetizing this. And then another thing that, and just to finish what I was saying before, there are, there are cities in England and there are counties, there are cities in other countries where, where they run out of money, they literally run out of money. And what those communities did, they invented their own money, they invented their own script, and they're called local currencies. If you google these local currencies, you will see how there are many, many towns in the United States too that have completely bypassed the currency system and the community has united, they have created their own currency, and they, and they network within each other, and they thrive regardless of what's happening outside of their community. So when the shit hits the fan, that's one thing that we can do. But if you're just alone in your house and you just depend on the internet, and now they cut the internet down, what are you going to do?
Wesley Earp: Exactly. And see, me personally, I'm a conspiracy theorist, so I believe that's what the, the news and the government and the internet has been trying to get us to do, is to be afraid of each other. So we don't talk to each other. And so we forget that our neighbor is a, a good person or a cool person. So that's what they want is to, is for us to be afraid and, and stay cooped up in our houses and not not speak to our neighbors.
Alejandro Szita: Yeah. Yeah. So if you want to do something now, just buy a silver coin. It costs like 25 or 30 bucks. Buy a silver coin, doesn't matter because it's just the habit. Buy a silver coin, go to your neighbor and say hello. If you just did those two things, you're on your way to wealth, believe it or not.
Wesley Earp: It's a great point. I mean, you know, and something else that I want to ask you that I think is a very interesting concept or a very interesting idea is, you know, how can I use a reverse mortgage to buy a home?
Alejandro Szita: Oh, that's incredible. This, they invented a new financial instrument back in the 1960s, in the early 1960s and throughout history, but this began in the 1960s. You had elderly, you know, in the generation of the thirties, the forties and the fifties, people were told and were brought that you should pay off your mortgage. Okay? So in the sixties and the seventies, many financial planners started to notice that there were a lot of seniors that had paid down their homes, but they had pretty much no money. They were surviving out of social security, a little bit of income there, but they could not have more money. So if you are house rich and cash poor, and now you go to the bank and you say, hey, my house is paid off, my house is worth x. Just give, let's say your house is worth 500. Just give me 50 Gs. The bank is going to go, well, show us how much money you make. Show us your credit. And if you don't, they're not going to give you, or even $1, even, even if your house is worth a million dollars. So that's the first shock to people. Then reverse mortgage is simply a mortgage that a financial institution will give you, but it's not a mortgage that depends on your credit score. It's not a mortgage that depends on your income. It's a mortgage that depends on you being a certain age and you have to have a little money. It's not, for instance, you have to be able to continue to afford to pay for hazard insurance for your home. You still have to be able to pay for your property taxes, and you have to have a little money left. When I say a little money left, I'm talking about $500, $550.
If you, if you are in that condition that you have money but your soul is trapped, but you can't maintain your home, but you cannot afford to pay a new mortgage, then reverse mortgage comes along. Let's say your house is worth a hundred, they give you 50% of the value of the home as a rule of thumb. So if your house is worth a hundred thousand, they give you 50. If your house is worth 500,000, they give you 250. If your house is paid off, then you can get the 250 in cash in one go, or you can get it as an annuity and they stretch it for as long as you live. Now, that is in principle what a reverse mortgage is, and it's called reverse because instead of you paying the financial institution, now the financial institution pays you. So that's why they call it reverse, because payments now come to you. And then what happens is the financial institution has said, remember what I was saying at the beginning, that you signed a piece of paper and then the money is created? This is the same thing. You sign out a piece of paper, which is a mortgage, like any other mortgage, and now they go and sell it and they go, look, this person is going to be in the house. This person is this age. He or she may die in 20, 30 years and they sell the piece of paper. And that's how they make money in the backend.
Wesley Earp: Yeah. Meaning it sounds like a great option for someone who's looking for liquidity or extra flexibility and I mean, yeah, it sounds like a good option, man. And it, and it's something I feel like is important for people and the listeners to know that exists, something that's out there and that they can tap into and they can really utilize.
Alejandro Szita: Yeah, and there is one more thing you can do. I mean, there are a few more things that you can do, but one thing that I found that is extraordinary is you can buy a house with a reverse mortgage, and you do it this way. Let's say you already have a house, you've been there forever. The house, you know, needs a lot of improvements. You don't want to invest the money. You are, you are done, you know, after so many years, you just want to move on. You sell it, you sell it, you pay everything. And let's say you have now 300,000 net after everything is paid off, let's say you, you want to move to another state, which is cheaper than California. You know, in California with 300, 000, you cannot buy much. But if you go to Florida, if you go to the Tampa Clear Water area, which I know a lot and I love there, you can buy something. But this is what you can do. Let's say you have 300,000. Instead of using this now, remember the reverse mortgage, we give you 50% of what you have, or 50% more. So you take the 300,000 and now you can buy a $600,000 home with a 300,000 reverse mortgage that you don't have to pay down. So with the 300, you can buy a $600,000 home, but you don't have to pay that mortgage for as long as you live. They call that a reverse purchase. So not only you can get money when you own a house that is nearly paid off, but you also can use your money or your savings, you can double it and get a house through a reverse mortgage or a reverse purchase. I don't know if that makes sense.
Wesley Earp: No, it definitely makes sense. I mean, and it sounds like a reverse purchase can give you more buying power. So I mean, and this is, what would you do with that increase buying power? How would you personally utilize that, that extra buying power, that extra money?
Alejandro Szita: This is how I would do it. If it happened to me, and if I sold my home, like in California and I made 300, 000, I will save a hundred, I will put it in savings on some kind of an investment. And with the 200, I will go and buy or look for a $400,000, hopefully new home. I will go to a place like Florida or a state where with 400,000, for instance, in I was looking the other day, my wife was looking the other day in Georgia, you have nice towns outside of Atlanta. One of them is Dala. I know about Dala because I have a very good friend that lives there in Dala, with 400,000, you can buy a pretty nice home. So if I'm coming, I'm most likely new. So if I'm coming from California, I was in this house, I could barely have enough money to live, and now I have 300,000, now I have a hundred thousand dollars in savings, and now I have a new house. So that's a pretty dramatic change of circumstances that before the reverse, it was almost impossible to, to get to.
Wesley Earp: That's incredible. I mean, and that's, that's a you know, something to think about and I think a very interesting way to utilize that reverse purchase. So I mean, yeah, that's super dope, man. That's super dope and I appreciate the game and the advice. Yeah.
Alejandro Szita: And if the numbers are bigger, like, because in California, you know, your house could be very, well be a million, you know, so if when the numbers get bigger, the possibilities also get bigger.
Wesley Earp: Exactly, exactly. Yes, sir. So, I mean, you know, one question that I want to ask you is that, you know, a little earlier in the interview you mentioned that you've been curious about entrepreneurship and running businesses and learning how money worked since you were a, a small child, you know, so I mean, you know, from your dad running and owning businesses, owning a business to you, going down to talking to your bank branch manager at the age of, you know, 17 or so. So I want to ask, is this an interest or a skillset that you were born with that you've always had, you know, entrepreneurship or is it something that kind of developed over time?
Alejandro Szita: The interest and the curiosity was always there since I can remember. But this is a very big field. It's full of lies, it's full of propagandas. So it took me many, many years and it took me many, many failures to sort out, sort out the weed, you know, what was really true, what was really practical, what you could really do and what, and what you couldn't. Also, it all depends at the level that you are, you know, when you are starting up is one thing, because let's say you read a book by, I don't know, by a billionaire, you know, oh, I became a billionaire and blah, blah, blah. But guess what? The book is not telling you what he did when he was not a billionaire. He's telling you what you did, what he's doing now that he's a billionaire. If you try to do now in your position what he's doing now, you're not going to succeed because you have to be a billionaire to do what he says on the book to do. So every step of the way has a different approach, has a different vision. But to answer your question, to get to that realization, it took me 40 years. So it was not an overnight success by any means.
Wesley Earp: No, man, I think that's a good point because, you know, I feel like when you're trying to succeed and you're trying to figure it out, trying to get your business started, it is a lot of propaganda, man. And it, it is a lot of lies. And, and just, you know, you have to take that time to kind of go through that trial and error, you know, and try for yourself and say, okay, maybe that's not the route. Maybe let me try this different route. So it does take a lot of that man, which I guess can frustrate the average person or cause a person to want to give up. But if you can keep persevering through that trial and error phase, I mean, you can do anything.
Alejandro Szita: Yeah. And one of your other guests as well, I was listening to one of your podcasts and one of your guests, I think it was Penelope, was mentioning Rich Dad Poor Dad. Rich Dad Poor Dad has a phrase in the book. Really interesting. He says, you have to fail faster because failure is your teacher. If you are afraid of failure and you're shining it away, you, it is going to take you a long time because you need to fail alone many, many times and you need to fail really, really fast. Exactly. So you acquire the experience quickly. So don't be, don't be afraid of failure, of course, try to not fail, but if you have to fail and then just do it again and fail and then you'll get it.
Wesley Earp: So I mean, you know, when you were just getting started on your journey, I mean you mentioned it was a 40 year road. What would you say are some of the roadblocks or some of the lessons that you've learned kind of throughout your career and throughout, throughout this journey?
Alejandro Szita: That people try to sell you stuff and because they try to sell you stuff, they give you information that when you use it doesn't get you anywhere. This is what I've seen. Technology change, we have the internet and all that, but there are certain principles that never change. And I will tell you what they are. Anything that is worth it takes effort. Anything that is worth anything will take you effort. What do I mean by effort? You're going to have to read a book, you're going to have to watch a bunch of videos. The best is to get a mentorship. Once you figure out what you're good at and what you want to do, go to work for someone who's already done it, for someone who's already successful and be humble. Even if the guy doesn't want to pay, you know, I was for 10 years, the slave of my mentor and I love him and I will sit in front of his desk, I will watch him make the phone calls. I will do all of the dirty work for him. Meaning the, not the dirty in the sense that it's bad, but the dirty in the sense that it takes time. You know, you don't make any money and so on. That's what you have to do. You have to find your mentor, do all the dirty work, pay your dues. It may take 10 years, some people listening to this and say, no man, you are crazy. Just go, you know, invest in Bitcoin. I'll be a millionaire tomorrow. But you, you know, if you're a millionaire tomorrow, you're going to be on poker tomorrow too. Anything worth anything will require time, will require patience. So this is the first lie that you're going to encounter. Oh man, you've been at it for two years. You're doing bad, man. You're not a millionaire yet, and you've been two years doing this. Wow. What are you doing wrong? No, it takes five years from 0, 0, 0, 0, 0 until you are well to do. It takes a minimum of five years. Oh man, you are old. That's old school. You know, today with the internet you don't have to do that because blah, blah. I have a friend, I read on a book. And that's the biggest barrier. You'll be confronted. Everything you have to do for success, somebody is going to push it down, somebody's going to say, this is not true, it's not going to work. So the role is littered with mental blocks and propaganda. If you're able to overcome that, then you'll be very successful.
Wesley Earp: How do you define success as an entrepreneur and a CEO?
Alejandro Szita: Being able to do what you love and pay all your bills and have money extra.
Wesley Earp: Agree. Agree. I mean, and so we might have just hint on this a little bit, but what would you say is the most important reason for your success?
Alejandro Szita: Persistence and not being afraid of failure. And having an open mind and, and I can tell you this, after a lot of failure, copy somebody who is already successful in your field, copy them. Like, don't think about it, just copy them. You know, when you look at history, most of the problems we have today, people already had them for thousands of years. I'm a history buff, so I love going into history. I always find that the problems we have today, people already had them, people already solved them. Yes, we have more technology. Yes, things are a little bit different, but human nature is not, the human being of today, of 2020 is pretty much the same human being of the Roman Empire. Yes, different customs, you know, different this, but it's basically the same guy or the same girl with the same problems, the same aspirations. It's just that the environment looks different. So all of these problems have already been solved. If you like history, like me in history, you'll find all the solutions that are already there that people are not using today. And one of them is have a mentor. I don't know if I answered your question, if I went on a tangent.
Wesley Earp: No, no, you answered my question perfectly. How would you like for people to remember you and your company?
Alejandro Szita: I would like them to remember me as somebody that helped them to success because it's in the service of others that we have success. There is no other way. Any other way is temporary, is transitory and it gets to nowhere. If you are of service to others. I mean, you are worth, in my opinion, is defined by how of a service you can be to others.
Wesley Earp: Incredible. I mean, you know, what does the future of prosperity lending look like to you?
Alejandro Szita: I see that there is a tremendous niche of the people on the way to success. I'm not talking about the guy who is already well to do or a billionaire. I'm talking about the guy who is making it, who is starting to be successful, is becoming more and more successful. That guy or that gal is ignored and the system, maybe in the fifties, maybe in the sixties, maybe in the America of yesterday year, that guy was valued. Today that person is not valued anymore. Today the only people that we value are the billionaires, politicians, or you know, people that have extreme views. But the regular person that is making it in the field of the arts, in the field of engineering, in the field of law, or any professional is really ignored. So the future of prosperity lending is to become a premier financial institution for those people.
Wesley Earp: That's incredible man. Alejandro, thank you so much for your time today. I really appreciate getting a chance to pick your brain and just you know, get a chance to see how you operate and how you think. So thank you for your time today.
Alejandro Szita: Wesley, it's been a pleasure meeting you and thank you for having me.
