[Music] happy anniversary not necessarily to you but to my company goldsilver.com 2025 is its 20th year in business I Incorporated gold silver back in 2005 and for the very first time I'm going to tell the whole story including all of The Good the Bad and the Ugly but first I've got two quick announcements one for our 20th anniversary we're doing 20 days of deals from Big discounts to gift bundle giveaways and two we've got a new website and a new logo we're transforming the traditional overlapping
coins logo which sort of represented you know when I started uh I was just delivering coins and bars to your door that's the only thing that we did uh we're we're transforming that to some Secure Vault doors and this symbolizes the evolution of the company uh you know because today we do trusts we do IRAs we do uh Partnerships we do joint accounts uh we've got uh instav Vault where you can buy and sell gold and silver just like you do on your stock trading platform on your brokerage platform and
it's that liquid uh so uh what does this 20th anniversary mean for me you know uh this is so long I've got some notes and you can tell that I'm reading once in a while but uh uh you know if you're interested in in business or uh Entre being an entrepreneur uh you probably should watch this but to quote Charles Dickens it was the best of times it was the worst of times so every entrepreneur goes through some trials tribulations and hopefully gets to the part where it's Elations uh in 2005 I started gold
silver in a spare bedroom in my house I was the only one from 6 am. to 6:00 p.m. I answered the phones did every sale I did the accounting customer service and I took out the trash all while writing my first book every night and every weekend I mean all weekends long weekend long um after a couple of years I hired a receptionist bookkeeper and I took on a business partner and gave him a percentage of the company as it turned out he really didn't do that much of consequence for the business but I
really needed the support mentally and having him there to bounce thing off things off of really helped me uh it made it so that I could keep on going you know because it is a battle you've got to be excited excited about it and this was probably the best most exciting time of my life we'd work from 6:00 a.m. to 6: p.m. and then most evenings have dinner together and then talk economics until after midnight and 6 o'clock the next morning we were back at work to do it all over again this was also the time
when I was touring with Robert kosaki and so periodically he'd be at the business and uh or sometimes he'd come to these events uh very often they were on weekends but um uh we were doing these giant real estate Expos and Robert kosaki was the real estate Guru of real estate gurus right at the peak of the real estate bubble in 200 five six seven and8 and uh you know I actually got to speak in 2006 alone to more than 100,000 people live now that's more uh than most uh precious metals people will get to
speak to in their entire lifetimes uh in 2006 I did a million dollar worth of sales and this is a brutal business with rais razor thin margins so you're talking to be competitive your margin your profit margin is two or 3% uh and then you have to deduct all the costs of doing business your overheads uh so in 2006 I did a million in 2007 a million so you're talking you know making 20,000 or 30,000 and then deducting all of your overheads the first seven months of 2008 I did a million dollars and then the book came
out the markets crashed and in the final five months of 2008 I did $28 million and the following year doubled that and the following year doubled that again and it kept on going year after year and that was the growth story but during that crash of '08 in October and November the paper price of silver fell below $9 now I said paper price this is the price of Futures contracts and you can make up as many ounces as you want to when you're creating these Futures contracts but there's actually only so
much physical silver that uh exists and shortages started to De to develop and physical premiums just absolutely skyrocketed I remember a friend of mine in Chicago calling me and telling me Oh my God this the dealer down the street this coin dealer he's charging $18 per ounce for 100 oun silver bars well the reason he was charging more than 100% premium is because he knew that those bars were going to be gone soon he only had a few of them and he didn't know if he'd be a ble to get anymore and so at
this period of time uh the suppliers uh put all of the dealers on allocation uh there were weeks where you know one week I would have just silver eagles that was my only silver product next week 100 oce bars the next week uh silver rounds the next week 10 oun bars and so on and so forth same thing for gold and then there was a week where we couldn't get any silver whatsoever uh and and uh so the only product that we had at the time was kilo bars of gold so if you couldn't buy a kilo of gold I didn't have a product for
you and there was actually about 3 days where we were out of business we couldn't get anything there was nothing there but in trying to figure out the supply demand equilibrium during that period of time it allowed margins I mean this dealer uh in Chicago was charging more than 100% silver eagles on eBay were going for more than $30 while the spot price is below n so the multiples of uh you know the premiums were huge so even at when I I was able to charge a 10% margin or a 12% margin and I was
still some of the best prices out there but that uh the the uh Capital that we made uh during the crisis of '08 the global financial crisis allowed me to hire a bunch of employees to build an automated re automated website and it really launched goldsilver.com uh without that crisis I would have been struggling for years but uh everybody was charging these high premiums I wasn't charging as high a premium as most other dealers but it still allowed the profit that caused goldsilver.com to
become what it is today now during the next three years real estate fell by half while gold went up gold tripled and silver went up five times during the the three years following uh that that crisis and uh silver falling down below $9 and so all of the investors who I was presenting to at these Learning Annex real estate wealth Expos with Robert kosaki and all of the other events that I was doing the ones who were listening had the opportunity now if real estate Falls by half and gold triples and silver goes up
five times that means that anybody that sold in ' 0607 or early '08 who was listening and then bought gold or silver could end up with up to with gold six times more real estate if they sold the gold in 2010 11 12 they could have bought the three times they could have about six times more real estate with gold and up to 10 times more real estate with silver now nobody can catch the tops and the bottoms but during this period of time it would have been easy in just three years to increase your
real estate holdings by double maybe triple uh so those investors that listened during this period of time at those Expos I was presenting the um Robert Schiller's real estate index that data now nobody back in 2006 7 or8 had ever heard of Robert Schiller so I was showing these Real Estate Investors real estate data that they had never seen now it's called the standard and porest so the S&P uh case Schiller real estate index and it's the most popular set of data you can look at for trying
to discern whether real estate is in a bubble overvalued undervalued you know where it is at any given moment uh the first time I presented this was back in 2004 but anyway um in 2008 I also got to interview a congressman and presidential candidate at the time Ron Paul what a guy let me tell you uh in 2009 uh I moved out of my house the company moved out of my house and into a offices in Santa Monica uh my producer Dan rubach joined us and we started the YouTube channel uh I also started doing these
very inspirational company meetings and we would do visualizations you know we'd all give a report on what we accomplished last week what we're trying to accomplish in the coming week uh then we do the uh visualization and we would end by all reciting the company Mission and for gold silver it was uh saving the middle class one investor at a time and we really believed that we were doing that and we still believe it uh for for the media team it was enlightening the world that maximum Prosperity can only
be achieved with individual Freedom free markets and sound money and that's true now every once in a while I would do something else an extra special thing and if you want to see what these meetings were like you might want to take a look at this video of the money speech from Atlas Shrugged uh it's it it's I I really believe that this is worth watching uh if you want to understand and um the rot that has happened in our society and continues this is very well described in the book Atlas Shrugged anyway this 2009 was also
the time when people in our company were trying to push us toward these big expensive marketing firms and the the best thing that happened was uh Dan would then play this YouTube video clip of this comedian Bill H from the late ' 880s early 990s and basically this uh act that Bill had this one uh skit was uh you know is anybody here in the audience in in marketing do you do marketing and the people would raise their hand and then you'd go kill yourself and people would laugh and he goes no no really kill
yourself and it got funny you know it sounds bad but it got funny as he did this for the next five minutes and you know and took it from all different angles anyway so um we we believed that we had our own method of marketing and we were the only ones with a a full-time um you know we had two animators uh Dan and myself so we've spent millions and millions of dollars on this YouTube channel making free uh uh education and doing all of these animated things and I believe that that has come back to us in
the trust that you know if any of you are clients I I really want to thank you because it it's only because of you that we could do the education but 2009 was also the year that we filed our taxes for 2008 when we had the uh you know the big uh runup and uh that's you know that the crisis of 2008 and that 28 million that we made at the end of the year uh we didn't make that much that was sales we make uh you know a few percent of that but it's also when I found out how much the government punishes success and
rewards failure uh how they will take I mean I had spent 40 years starting companies and failing starting a company closing it I had one company that did go bankrupt but 40 Years of trying and failing to learn what I learned that led to the success that goldsilver.com had and so when they took when they started taking 50% of everything uh they were actually taking 50% of 40 years not 50% of what I made that year it's all the struggling putting everything back into the business living for the business and
that's what I did with all of my businesses and so uh the government uh just punished the hell out of us for creating Prosperity trying to create jobs all I was trying to do was expand the business and they were taking half of all the profits uh imagine how much I could have grown or uh how much less I could have charged or uh the number of jobs I could have created if they allowed me to keep that and then in 2010 I moved up into the Malibu Mountain mountains which was phenomenal I loved it up there and the best thing I ever
did for myself was I finally in 2010 and 11 I treated myself and I bought my Tesla Roadster and uh uh it was you know I i' had always just kept everything in the company the place I moved up to in the Malibu mountains I didn't buy some big home I was renting a little tiny Place uh that was actually it started out as a hunting cabin back in the 1930s and uh so and it was phenomenal my fireplace was made from uh petrified wood it was just this quaint little tiny place that I was renting uh but uh uh
you know driving those roads in my Tesla Roadster those roads are like a piece of spaghetti draped across a mountain ridge with these Bank turns they're the roads that all the car magazines use for test driving their cars they're some of the best roads in the world and I got so that I could just dance on those roads doing four-wheel drifts through all of the uh Corners it was phenomenal part of one of the best parts of my life but every evening I drive from our office in Santa Monica uh up to Malibu and now all
of that is ashes and my heart goes out to all the people that lost everything in the fires the California wildfires that we've seen throughout most of January uh and then also something that's pretty funny 2011 and 12 we're pretty sure that uh we had these we had an IT department uh and doing user interface and stuff like that and uh we're pretty sure that they were using our servers to mine Bitcoin cuz suddenly the computers slowed way down and nobody could figure out why our computers were so slow and then the
minute these guys left everything was fine again so I I have no no idea of how much Bitcoin they've got but uh you know that was pretty funny now these were great years financially but the government was taking more than 50% now I focused on education during these time and I this time and I I let others run the company and during that time we hired some very bad people and I don't mean bad like incompetent I mean bad like evil uh there was uh three people that were having weekly meetings we found this out
years later using the company boardroom to try to they were plotting trying to figure out how to steal the company from my partner and myself uh and uh they hired other bad people this one person that was acting as the chief operations officer uh uh hired somebody and pretended like they didn't know each other and we found out years later that they had known each other for years and the guy that he hired would come in on weekends and he stole our entire customer list and went over to another
company where he was able to use that customer list and he was on commissions so he's able to make more but during that period of time we started losing $100,000 per month this was all coming out of my pocket 100% you know the the first losses I was able to pry uh some of our the the profits that we had accumulated my business partner and I I was able to pry some of it out of his hands but uh you know after that it was just me uh and you know during this period of time with those bad employees
uh one of The Hires that uh we had uh in the accounting department our CFO told a joke and it was uh derog I wasn't there I can't control this but he told a derogatory joke about Filipinos and this one person in in accounting her grandson was Filipino and so I get this notice that we are being sued for $120,000 for a hostile work environment well during the depositions and stuff the investigation it turns out that she had done the same thing with her last three Employers in California a company
is guilty until proven innocent when you are being sued by an employe employee you are automatically guilty and you have to prove your innocence and uh and so her modus operandi her uh the way the way she got by was to get a job work for six months sue the company take a year off she had done this to three other companies and uh and so we were a victim and I wouldn't pay her and I fought it and it actually cost about a $120,000 in legal fees to end up with a a settlement where you know they were
trying to get me to settle for $225,000 and I had done a counter suit where I had a leg to stand on and she didn't and I said here's the deal you drop your suit and I'll drop mine and that was it but I had spent $ 120,000 in legal fees battling that and then uh at about the uh same time uh California uh we filed a bunch of 1099s and for California it sent up a red flag and they thought that I was paying uh employees as private contractors and they wanted all of our records printed out on paper it was going to cost us
$40,000 to print out every single uh purchase that we had fulfilled and then uh and uh sh and ship these all to the California Auditors and then have Iron Mountain come and pick them up and shred them and we finally convinced them to take it electronically after battling California for months they said sure we'll take it electronically we sent them the files and they said oh you didn't do anything wrong you just it it looked like you were paying uh contractors employees as contractors to
get around paying some taxes and all of the you know the government makes it a nightmare to hire people actually they make it very difficult on businesses now so uh we started losing about $100,000 a month like I said it was all coming out of my pocket and at the same time we went into something called the precious metals nuclear winter so this is 2013 14 and 15 and uh during that period of time across the entire industry precious metals dealers were selling their companies closing merging uh declaring
bankruptcy uh there you know there was this there were the Discounters uh some of them ended up in jail uh they dipped into customer funds and stuff like that uh there was this one guy toling uh he was always the cheapest out there and you could say you know we we had very competitive pricing but you could always save a few pennies by going to toling well uh a lot of his his clients he ended up uh going out of business owing them $20 million worth of precious metals and he ended up in jail uh so during this period of time and
this went on for several years $100,000 a month $100,000 a month I was paying $100,000 a month to work my ass off and worry myself to death and only get a couple of hours of sleep per night and then there was this employee who never really seemed to fit he just didn't seem to like his job looking back on it we should have parted ways years earlier but in California uh you have to build a case against an employee before you can fire them or they can sue you if somebody's doing their job and they
don't uh uh really bungle things if you can't prove that they are not a good employee uh in California like I said you're guilty until you're proven innocent when a when a uh employee sues you and so I uh he worked for us for several years but he never seemed to like it and then suddenly he gets real happy for like a month uh we thought that he was enjoying his job no what was actually happening is he had decided to change careers and we found that out when he quit he was going to become a
cop which he never did uh and he stopped doing his job we found that out later he was just coasting and collecting a paycheck that is the reason that he got happy now his job was to check the fraud filters on the merchant account the merchant account is your credit card account the ability to take credit cards and and uh you come in in the morning and there's all these charges from overnight then you have to check them in the afternoon and when it's a when it's precious metals purchased 100% on a card
instead of you know only a portion on a deposit on a card and the rest to be wire transferred or by check when it's 100% on a card you have to be very careful uh thieves are targeting precious metals dealers all the time and so you have to make sure that this is a legitimate uh charge we may have to contact the person that was making the charge some of them are just obvious and you just kick them out well he stopped doing his job stopped and he didn't kick any of these out now the way the fraud
is discovered the the theft the crime is discovered is a very long process because somebody gets a cred whoever uh the credit card number was stolen from they get their credit card bill uh a month later uh two months later they open it up and they say oh my God what is this $25,000 purchase from gold silver and nobody knows and uh so they call the bank and they dispute that credit card charge with their Bank uh when they dispute it the bank investigates that takes a few weeks and then they reimburse the person that had
the fraudulent charge on their card do you think the bank takes the hit no the bank goes to the merchant and just grabs that currency out of their account doesn't even tell them uh you find out when your bank account balance is that much lower and then on top of this now that was $600,000 of stolen goods uh and these uh fraudulent charges that came in uh the month after and then for two more months after he left the company uh and then on top of that the bank contacted us set up a meeting and they determined that we
were a risky business because we had had all of this fraud we never had had the fraud before that it was only this employee not checking the fraud filters and they uh instituted what's called a reserve account and they withheld 25% of every charge uh and until they got to $600,000 now 25% that means that uh they're going that we had to stop all uh 100% charges on credit card you could not buy precious metals uh from us all on credit card and then I reduced the um deposit that we would take now I was the first
one to come up with a fully automated website and the way I figured it out is we can take the risk of taking an order from a client and it is risky because if the price drops the next day some of the clients wouldn't send the currency and we have to sell back to our suppliers because we've already locked in a price and we take the hit of the change in the spot price plus the amount of profit that the supplier made and so it can be uh enormous losses if a client rigs on their promise uh once they purchase so
anyway uh we were taking a 10% charge well the the 25% of the 10% is 2 and a half% so I cut that back to just 5% that we're taking on the card but 25% of 5% is 1.25% and that's about our entire profit margin so we're making sales and we're covering the cost of business but we're not making a dime and so you've got a $600,000 reserve $600,000 worth of fraud that's 1.2 million uh dollars which means you have to sell $125 million worth of precious metals or 100 uh $120 Million worth of precious
metals to make up to just to get back to break even then on top of it just keeps on getting better on top of all of that uh somebody in our finance department was uh chatting with somebody in an online dating room and disclosed some of the things about the business and who I was and a couple weeks later gets an email from me supposedly it wasn't me uh uh saying to transfer to hurry up I need this transfer now the cut off time for transfers in California is 2:00 5:00 p.m. on the west coast and I need this
transfer to Himalayan power company of singen China of $200,000 and then 10 minutes before the cut off time hurry up I really need this done today and they did it now every business you have to have checks and balances to prevent uh employee theft and so the checks and balances here are the person in the finance department can create the wire transfer but they can't send it it has to be approved by somebody else that they don't talk to very often in a different department that way uh in order to have employee
theft there has to be uh conspiracy going on between people and so it's extremely unlikely and it's never happened to me but both of these people honestly believed that that was me and so they sent $200,000 of our profit you know 200,000 of out of our bank account to Himalayan power company of Singin in China and that was the last we saw of those funds and at this period of time my business partner abandoned me he resigned from the company he kept his stock he set up an LLC in another state
and made himself a consultant to goldsilver.com so that he could still get paid and so he would be safe and he could keep everything he had but if the company crashed I would go down in flames while he would remain untouched and financially I had put everything back into the company I loaned it all of my metal the metals that I had accumulated over the previous eight years I've been paid back since uh I got down to my last $100,000 and remember we're losing $100,000 every 30 days so I was 30 days from having to close my
doors or declare bankruptcy which would have ruined my rep loss of reputation loss of your trust and uh and the loss of my YouTube channel and these things were everything to me so during this period of time I had uh hired a new president who helped me turn the company around I moved to Puerto Rico and I sold the company with what's called an atrisk earnout uh and uh on the on the sale price so I had to meet certain targets to get the price that I that we had agreed to on the company I met all of
those targets and there's a profit share which I still enjoy to day so it's still like owning some of the company but this has removed all of the pressure and lifted the burdens and it's allowed me to focus on just the education because that is what gives my life value uh I have to feel like I'm helping people like I'm informing people and when I read the comments I know that my life does have value and it keeps me going uh I could stop I don't have to do anything anymore but keep on going uh because I
feel like I'm helping people uh and this is allowing me to work on the biggest thing that I will ever do it's my magnumopus I have been working on it for years it's purely economics and it should benefit everyone so the hardest thing that I've ever done was writing my second book the second hardest thing was my first book and the third hardest thing was goldsilver.com yet it has all been rewarding and worth it because of you and if you're a client of goldsilver.com all of the education that we have done
you have made possible so I feel like I have changed the world just a little bit and all for the positive and if you are a client of goldsilver.com you should feel the same sense of accomplishment because without you I couldn't have done it I want to thank you for watching we'll see you next time
Post a Comment