Patrick Bet-David: I Built My Insurance Empire By Hiring Young Latina Girls (Part 2)

Okay, so coming out of high school you enrolled in the U.S. Army. Mm-hmm. And you were there for three years? Two and a half years. Two and a half years. Now at one point your mom actually goes back to Iran? Yes, she does. So it's March of 1997. My mom runs out of money in the States. And she says she's gonna go back to Iran. And she says you have two choices. Come with me back to Iran or stay here. But those are your choices. I said I'm obviously not going back to Iran with you. I said I'll figure it out. So I went and stayed with my sister for a month. I went and talked to my dad. I said, hey, dad, what if I move in with you? And then he says, well, if you move in with me you've got to be home at this. I said it's not gonna work out. I'm gonna give you another heart attack. So I go live with my sister. And I convinced my sister to let me live with her for a month. I sell my Chevy S10 long bed with low-profile wheels and a beautiful system in the back. And for $1,700, it was the owner of the car was a former MS-13 leader. The way I know this is because my dad's like an artist. And San Bernardino was selling this beautiful truck that you've got to buy for $2,100. I said I'd love to meet him. I go to him. He's tatted up everywhere, MS-13. He says, what kind of an artist is he? I said, dad, he's from Mara Sabatrucha. You know what MS-13 is? He said, this is part of a community he's from. I said, dad, this is a very different kind of a community. And it was I bought it for $2,100. I sold it for $2,700. But the next day after I bought it, I got arrested in LA. There was a club in LA back in the days, Arena. If you know it, you probably don't brag about going to Arena. It wasn't a club you bragged about going to. I was 16 years old. I got arrested that night. And they thought I was part of MS-13. They kept me till 3 o'clock in the morning. And then they realized I'm not part of MS-13. And because the registration hadn't changed yet. Anyways, so yeah, so I'm living with my sister at the time. I stay up till 4 o'clock one night partying in the Jacuzzi downstairs with a bunch of my friends. I come up. She's like, I'm about to get evicted. What'd you do? Landlord's upset. I said, I'm going to figure it out. Pull out. I go outside to get my car, Chevy S10, Toyota Corolla 83 that my mother had left me when she went back to Iran. I can't find the car. Where's this car? I'm walking. Am I drunk? Did I forget where I parked it? I'm walking. I can't find it. Call the police. Ripple police comes. They're looking everywhere. You sure you parked this? I'm telling you, I parked it here. Anyways, they found it a few months later in Tijuana. But I call my dad. I said, Dad, come pick me up. Take me to the recruiting station. He comes, picks me up. I go to the recruiting station. I meet with the recruiter, Jesus Guerrero, who recruited me at 14 years old, saying you should join the Army. But I didn't do it for four more years. I said, if you can get me to go to the Army tomorrow, I'm in. And long story short, he says, we can't. I said, I'm not joining. Two weeks later, I'm in South Carolina, Fort Jackson. And I call my mom. I had a 30-second call. I said, Mom. She says, what's up? I said, I'm in South Carolina. What are you doing in South Carolina? I said, I joined the Army. She says, we escaped Iran so you wouldn't join the Iranian Army. Now you're joining the U.S. Army? I said, yes. I got to go, Mom. There's 20 people behind me. Boom. So you do the Army thing for three years, and then you go to Santa Monica College. Yes. For not very long. No. Two semesters. One and a half semesters. Then you drop out. Then I drop out. So what do you do next? So I went to Santa Monica Community College because Arnold was my hero at the time. And he went to Santa Monica Community College. So I was going to go be a bodybuilder, Mr. Olympia, Mary Kennedy, be a governor, be a Hollywood star. That's kind of what I was going to do. But then while I'm going there, I start working at Bally's. And then I get opportunities to go to this biggest club. The biggest club Bally's had at Hollywood, El Centro. 43,000 score for club. Beautiful club. And they gave me this job. So I go there. Then I performed, and they moved me to Chatsworth, Bally's. And I said, I'm done with Santa Monica. Going from Chatsworth, Bally's to Santa Monica is a long drive. And I said, I'm done. And then I meet a girl named Jean Vieira at Venice Beach who worked at Morgan Stanley Dean Wood. And we start dating. And she picks me up in all these nice cars all the time. I said, what do you do for a living? How do you make this kind of money at 24 years old to have these cars? She says, I work at Morgan Stanley Dean Wood as a broker, financial advisor. Then I get my job at Morgan Stanley Dean Wood about the day before 9-11. And then, obviously, I stayed in the industry for 20-plus years. Okay. So you start at Morgan Stanley. You go to Transamerica at one point? Yeah. So I'm at Morgan Stanley for a year. Then I go to Transamerica World Financial Group for seven and a half years. And then I start my own company. That's in 2009. That's in 2002. April 15, 2002 is when I go to Transamerica. 2009, September 23 is when I start my own insurance company. Exactly. PHP Agency. Yes. Tell me what that is. PHP Agency is a financial marketing organization selling life insurance and annuities. We started off with 66 agents. And we grew to 45,000 agents in 200-plus states and 200-plus offices, 49 states. And we just recently sold the company a year and a half ago to Integrity Marketing Group. And the money came from Silver Lake. But I was excited. It went from one office to a few hundred offices nationwide. Okay. So what exactly do you guys do? So say, for example, I meet him. Okay. And I say, so what do you do? I'm doing XYZ. Are you happy with your job? Not really. How much money are you making? 80 grand a year. What are your dreams? I want to have a house. I want to send my kids to private school. What kind of money do you need to make to do that? A quarter million dollars a year. How soon is Vlad going to pay you 250 to be able to do that? Not anytime soon. What are you going to do? Stay here? You want your dreams to become a reality? I want to do something big. Great. Why don't you get an insurance license part-time? I'm going to teach you how to sell the product. And then from there, maybe make $1,000, $2,000, $3,000 a month part-time. And then if you later on get good at it, you can go full-time. Then maybe you can become a broker. That's pretty much what we do. So you sell insurance, life insurance, and other types of insurance as well? Not auto insurance. It's strictly life insurance. Strictly life insurance. Life insurance and annuities. I used to be Series 7, 66, 31, and 26, where I could sell stocks, bonds, mutual funds, commodities, futures. But in PHP, it was only insurance and annuities. Okay. PHP stands for People Helping People. Yes. Okay. Now, selling life insurance is a very old business in America. And very hard. You guys did not come, you know, you're not the first, you know, the first to do this. How was it you differentiated your company from all of the established companies that have been doing this for probably 100 plus years? That's a great question. So here's what I did. At the time when I was working at Bally's, I sucked in my first month in sales. A month later, I'm about to go back into the Army and Cisco, my boss, he says, I said, I can't sell memberships in the gym. You want me to sell gym memberships at a mall? He said, just trust me. Go there. You're going to work with a couple of guys. These are professional hustlers. You're going to work. I said, great. I don't know if you're familiar with Fox's Mall. So I go to Fox's Mall. Yeah, it's in Englewood, right? It's in Englewood. It's like right by, yes. So I go to Fox's Mall. And a day later, two days later, a week later, I sell my first membership to a girl. $75 down $30 a month. I can't believe she's giving me a credit card in a mall to sign a 36-month contract. Then I sell my second, third, fourth, fifth. Then I become the rookie of the month. And so then I realized I can sell. So then the question is, am I going to sell memberships for the rest of my life? What product do I want to sell? The good news was I worked under a couple of guys that were very good in sales. So they taught me good habits. Cisco was a professional at Bally's. Dexter was charming. Ruben was systematic. Joe Reyes asked the right question. Molina was great on the phones. I'm watching everybody to kind of learn how to get better at this. And then afterwards, I'm looking at all the industries. I'm like, am I going to do real estate? Am I going to do this? Am I going to do that? And then I chose financial industry. So the part about PHP that differentiated us than everybody else is, while I'm at Transamerica, I'm watching what's going on with elections. I'm watching what's going on with social media. In 2004, if you remember, Ron Paul, in his 60s, raised $6 million in 24 hours on Myspace, running for office. I'm like, 6 million. It was a record-breaking number. Nobody could believe an independent guy raising $6 million in 24 hours on Myspace. Then I saw Obama come and give his speech at the DNC. And a one-term senator becomes a two-term president. In his first campaign, he raised money from a bunch of Hispanics, $5, $10 Facebook ads. He was the first guy that understood the part of the Hispanic vote. And then everything was about woman power, women boss, girl boss, girls in business, entrepreneurship. Then a data came out showing me that for every dollar that's made, 75 cents of the decisions made by women, more than 25, because they're the ones that's going out there doing most of the shopping. So you're thinking, who's pulling out the decision? So then when I saw all of that stuff, and I read a book called Blue Ocean Strategy. I don't know if you've read it. Fantastic book. In Blue Ocean Strategy, it explains how the whole concept is that most people are in a red ocean. For example, let's look at the podcast site. Who was the first person interviewing hip-hoppers that got as big as you did? That got as big as me? As big as you. I don't know if I can think of anybody. You mentioned Charlamagne. Yeah, I was going to mention Charlamagne. He kind of came up around the same time. But it's really the two of you guys. Yeah, and he was working under The Breakfast Club. So watch this now. So you guys have a blue ocean. Everybody else is trying to do what you guys are doing. They're now in a red ocean. It's too late. You've dominated the marketplace. You have a big itch. Now, if you don't recreate yourself and improve, a new guy can come up. But the whole concept about Blue Ocean Strategy is don't directly compete with somebody. Find a way to differentiate yourself from other people. And the formula is actually very simple. Increase something others are not doing. Decrease something everybody else is doing. Eliminate what everybody else is doing and create something new that nobody else is doing. So for us, I looked at this and I said, here's what we're going to do. One, we're going to target women as insurance agents. Because at the time, out of 100 agents, only 17% were women. Insurance industry didn't recruit women. They recruited men. 83% were men. Then a report came out from Lymra saying the average insurance agent was a 56-year-old white male. Wait a minute. The biggest generation is boomers, but millennials are big. Why are we not targeting this interest? And so maybe the insurance industry was dying because their agents were going over. They went from having a half a million agents to like 200,000 agents. People were leaving the industry. So I said, perfect. Here's what I'm going to do. I'm going to bring young girls and I'm going to target minorities. Minorities kind of like myself. So Hispanics, African-Americans. And then we'll compete in a marketplace from an angle where if I go to a house, if I'm selling you and your wife, your wife may not like me. She's done. She's not going to buy. You and I may hit it off, but she may be like, babe, I don't trust this guy. When she walks over to the bathroom, I need to text you or go over there. But if a girl comes to your house to sell, she's going to be like, oh, I understand her because she's a wife, like, because she's a mom like me. And you're going to want to buy from a woman maybe more than you're going to want to buy from a man. So we went that angle. And then the average agent today is a 34 year old Hispanic female in the company. Fifty one percent of our company are women. Fifty four percent are Hispanic. We're the largest percentage of that in a marketplace. And that was our advantage. That was our edge. Obviously, social media helped because at the time nobody wanted to touch social media. So that was the advantage we saw as a differentiator. And then by the time we had already taken off, everybody tried to copy us. It was already too late. I love it. I love it.