In this episode of The Tactical Empire, Jeff Smith and Shawn Rider delve into the complexities of family dynamics and the importance of trust in business relationships. They discuss how to evaluate risk tolerance, cope with financial loss, and avoid scams in the investment world. Jeff and Shawn share personal experiences and insights on due diligence, emphasizing the necessity of maintaining integrity and moving forward after setbacks. This episode provides valuable lessons on balancing personal and professional life while navigating the risks that come with business.
In this episode, Jeff and Shawn dive deep into a topic that’s becoming more relevant by the day—how to spot a scam, vet an investment, and protect your capital. Whether it’s a shady operator, an overhyped mastermind, or a high-return fund that suddenly disappears, they’ve seen it all—and today, they’re pulling back the curtain.
Jeff shares hard-earned lessons from real stories—friends who’ve lost seven figures, deals that looked great but went sideways, and why some “successful” people are just one flashy dance away from collapse. Sean brings the perspective of a cautious investor trying to navigate opportunities while avoiding the traps. They cover:
How to vet a deal (even if you're not an expert)
What “flash dancers” are and why you should run
When red flags show up—and why most people ignore them
The emotional toll of losing money—and how to bounce back
Why due diligence, personal visits, and small test investments matter
The difference between a mistake and a betrayal
Jeff Smith (00:01)
Welcome to another episode of the Tactical Empire. Today I'm joined by Sean Ryder. How are you man?
@shawn_rider_ (00:10)
I good. I always feel like when we have family around, we should just leave the doors open so they can hear that we are normal family people. just heard, I believe it was probably your oldest daughter. Use the phrase, but her. So love it.
Jeff Smith (00:25)
Yeah
Yeah, they're out there brawling with each other with a dog involved. So the five of them collectively are not getting along currently. And my wife is somewhere. I don't know where on the phone somewhere. So all good.
@shawn_rider_ (00:33)
Yes.
Yeah, away from
away from kids fighting, which is par for the course for any. Just let the kids do their thing. I mean, it's amazing when kids can have like a full day of playing together and then it's literally just five to 10 minutes of just shit. And that's one thing that I've learned over time is like, don't let was it a bad was it a bad five minutes or was it a bad day? And, you know, you got to have grace. You got to a little grace with tiny humans. So it's all.
Jeff Smith (00:45)
Yeah.
Yeah.
For sure.
@shawn_rider_ (01:10)
I love it. love it. So something, something interesting made me laugh last week, right? I did, ⁓ let's just call it a sales call, right? A sales call for the 90 day accelerator program. was someone that I did some calls with maybe three years ago, just infinite banking stuff. They ended up, up if it had banking policy, he's been watching our content, he knows of us. He's been in a mentor group that we were associated with in the past, but
Jeff Smith (01:11)
For sure.
@shawn_rider_ (01:39)
He's ready to take his business and his life to the next level. So I jumped on a quick call with him and sold him on the 90 day accelerator. And before we got off the phone and before he paid the investment required, he said, how do I know that this isn't a scam? How do I know that you guys are gonna do what you said you're gonna do? Which we don't make guarantees, but we make guarantees on what we're gonna bring to the table.
We're going to educate you on these main areas that we believe in in the fore apps and we're going to get you more clear and we're going to push you to take action. We can't ultimately make you take action, but we're going to push you to take action. It ⁓ was kind of easier because I knew him. I don't know him as we hang out and we're in person. He's across the country. But it was like, look, you know who I am. I know who you are. You know who Jeff is. We know the same people. So if you pay us and we disappear,
Feel free. literally said this and I said feel free to tag me on a Facebook post and let everyone know that we scammed you out of money, right and then ⁓ this morning this morning you texted me I won't go into detail about it, but ⁓ you know some guys that we know were associated with a group and I Clearly remember you at least three times telling me and posting for people to be careful around groups like that and Just so happens that that group is now indicted in
of federal investigation, believe, correct me if I'm wrong. ⁓ you know, just something we've seen. I've also been in other groups, big, big, huge masterminds where you have successful people and you have other guys that come in and say, hey, I manage big money for big people and other people hand over money to that person and then two years later that person disappears and there's no money. so there are legit scams out there. So my text back to you was
Jeff Smith (03:33)
Yeah.
@shawn_rider_ (03:36)
How do we vet people for scams? How do we know? How do you get that feeling? How can we protect our men from putting their money in things like that? You've certainly been around a lot more, quote, successful from a financial monetary standpoint, men that I have. ⁓ You've been in huge groups. You've paid a lot of money to be in masterminds, and you've seen some people get screwed over. You know people personally. ⁓
You know, I won't speak to anything you've done, I've lost money in certain things as well. ⁓ So how do you vet it? How do you vet scams out? How do you protect yourself when you're trying to get a return on your money?
Jeff Smith (04:20)
A lot of people would say a lot of different answers about this. ⁓ I like to know the people and feel like comfortable with the people. ⁓ The thing that you were talking about, they didn't necessarily get scammed per se. ⁓ They got scammed kind of for their time. They got involved with an organization that was clearly not.
I mean, I saw from the outside, but maybe it wasn't so clear. I probably would have thought it was fun if I was involved in it. I mean, I don't know. ⁓ They weren't scamming other people. It was a situation where they had government contracts and shit like that. And so it was, there was just no, it was kind of like, if you saw under the hood of it, it was a coaching organization that was like a Google HQ. And I was like, there's no possible way that they have this kind of like disposable income.
like, because profits matter, right? ⁓ So like, nothing smelled right about it. And so fortunately, I think our guys came out unscathed. mean, I, my, my whole entire goal in life, I say this constantly to anybody is to stay out of prison and to not lose an ass load of money. And so like, those are the filters that I use to try to make sure like, I don't want to be involved in shady shit.
If it feels crooked to me or if it feels like the money's coming from sources that are unsavory, like I'm not gonna be involved with it. Just because like I've been too close to too many people. I've seen people go to prison over stuff ⁓ that I kinda knew were like, mean, Sammy calls them flash dancers. And ⁓ it's just because they come in, they come into money somehow.
some way and it allows them to put on a certain persona for a certain period of time until the money runs out. It's kind of like a Ponzi scheme. And that's not how they all run, but we've seen a lot of this over the last five years because of all the money that had gone on during the last administration, the printing that went on, and then the government contracts that came out of some of that stuff, and then EIDL, PPP, and all these other
games and rackets that people were running and then obviously crypto. So like there's just a lot of things that you have to manage and you have to have your head on a swivel. I'm kind of an old school person like that's why I've always stayed in kind of real estate because I like to be able to touch and feel what I own. It doesn't feel so weird to me. Like I'm not your most savvy crypto investor by any means. I pick some of it up and I
And I learned what I can and then what feels right to me with my risk tolerance. buy like fucking Bitcoin. I was talking to you earlier about shit coins and like there's dudes that used to roll into shit coins and mess with that stuff. And like that is just not for me. ⁓ I'm not a gambler. I like my money to make money and even if it's slow and steady. And so like that's why I don't like the stock market. Quite frankly, I mean, there's money to be made in the stock market and
Maybe I'll trade stocks someday. I don't know. There's a bunch of guys picking it up in the group. ⁓ I just think it's a house of cards as well. So to answer your question, how do you protect yourself against that? You really just have to evaluate your risk tolerance to it. You want to make sure that it's not an amount of money that's going to put you or your family at jeopardy, in jeopardy. ⁓ Can you afford to lose that amount of money? ⁓
Yeah, I've been involved with people not involved necessarily. So don't misunderstand what I'm saying here. Like I know people from masterminds that invested with other people that I know that have since lost up to seven figures of their own money. ⁓ Not business funds, just investment funds on certain things that went crazy. And now most of those, ironically, weren't even real estate deals.
Most of them were what I'm describing as like flash dancers. They moved money around in a shell game with no real like assets behind it. And they held up a persona until the persona ran out. And now like there's a handful of guys that I could name on my hand that have went to either prison already or they're federally indicted right now ⁓ for stealing millions of dollars from people.
And like, these are not people I run around with. These are just people that came in and presented deals. And for some reason people bought into them, which I can understand the allure sometimes the returns are nice or whatever. Right. And, ⁓ a lot of times when you, when you understand, ⁓ the re if the returns are too good to be true, they usually are. ⁓ that's why I mean, we we've seen.
@shawn_rider_ (09:30)
Yeah.
Jeff Smith (09:32)
I've seen deals come across my desk that are like crazy. mean, three, 4 % a month returns. You do stuff like that and it's pretty crazy ⁓ to see. I mean, you're talking 50 % returns on annually a year. ⁓ Some of that stuff is just inconceivable if it's stacked on other people's money. And so like at some point,
You're a piece of the pyramid and you need to understand that like there's money and this is where people get burned on that shit because like you can be a part of the pyramid and you can get in and get some money and you can get out and you can get out unscathed but you the gamble is where you're coming in in the pyramid and then how long you'll stay in it because that's the allure and that's the hard part right if it really starts paying
@shawn_rider_ (10:19)
Right.
Jeff Smith (10:28)
Like I know a story of a guy who paid, oh man, what he's, he's one of Garrett Gunderson's partners. Actually, if you know, Garrett Gunderson from wealth factory who owned and founded that company, he is a partner in whatever he's doing now. And, uh, he wrote a book with him not too long ago, but this guy ran like a hedge fund and was super wealthy and he was a money manager for a bunch of people. And he was getting 8 % returns a month.
on an investment, 8 % a month, not annually, not APY, monthly. so he went in with this crew. This was 2008, like timeframe. It started in 06. They were paying, paying, paying. He started pushing more more money in there. Then he started pushing his client's money in there. Then he started pushing his business partner's money in there. And in 2008, halfway through,
They got paid for two and a half years, but then the rug got pulled and it stopped and the cash stopped. And so I have seen that happen in the last three years, many times, many times. So you can get brought into a deal where they're like, this is super sexy deal. You're going to make X amount a month or X amount a quarter. And they pay it for a while. And then all of sudden there's no phone calls returned. There's no emails returned. There's no.
@shawn_rider_ (11:38)
Mm.
Jeff Smith (11:54)
They don't exist anymore. ⁓ so it's just, it's, it's crazy out there. And so it, but, but it does have a tendency. You have to just be a little bit savvy. You can do background checks on people. If you're going to give them your money, can background check them. It's cheap. It's inexpensive. ⁓ If you know them, that's even better. Like if you're going to spend a significant amount of money with people, I think this is a lot of, I mean, this is what people don't understand a lot of the times.
@shawn_rider_ (11:57)
So.
Jeff Smith (12:24)
Like if you're going to give somebody a few hundred thousand dollars of your money, like why wouldn't you spend 1200 bucks to fly to them and go out to a steak dinner and have a conversation with them? There's not too many people that would ever rip me off or go to federal prison that I wouldn't be able to smell out at a two and a half hour dinner.
@shawn_rider_ (12:49)
Yeah.
Jeff Smith (12:51)
And I mean, there are people that are shifty. Don't get me wrong. But like, I do think that that's like part of investing is like making sure that that relationship is tight. like you, there's nothing wrong with seeing where they live. Like, is that really theirs? Did they rent that fucking car? Like, what does their life look like? Is there a wife to actually be found or is she just on Instagram?
There's just some simple cues with a lot of these guys that you could tell that they're not built for the long game. For me, I'm super graceful in that I've made every mistake in the book, admittedly. And so I don't expect anybody to be perfect at all. But if I show up and want to hang out or be in your town and go to lunch or something, if I'm going to give you a quarter million bucks, I would expect the story to kind of add up.
You know what I mean? Like drive me by some of these properties that you own. Let me see how you upkeep your own properties. Like there's nothing wrong with that. And I know you haven't done that. So I don't want you to get like pucker factor, but like, ⁓ but, it's probably worth two grand a year for you to spend some money on travel as much as you're throwing out ⁓ being a financial investor. ⁓ Cause why not? I mean, I know you don't like to travel.
@shawn_rider_ (13:59)
Bye.
Jeff Smith (14:14)
and it makes your skin crawl, like at the end of the day, anybody that's your operator should be like, sure, come on down. We'll have fucking Chipotle work out. I'll drive you by fucking 15 of the properties and like you can fly out that evening.
@shawn_rider_ (14:30)
Yeah, you hear that Justin, hear that Justin? Jeff is telling me to come. You're taking me out to dinner, right? You brought Justin up in front of the group and educated us and that's what turned me on him. Now Justin's a great operator. He did invite me down actually to hang out I think last year. I haven't made it down there yet. So Justin's great.
Jeff Smith (14:39)
No, no, I'm just saying
Well, the
reason I like him as an operator so much, admittedly, and we'll call him out by name, and so that's tough, is because he doesn't act like everything's right. He's got his ass beat on a bunch of deals. But you have to understand, if someone won't tell you that, they're full of shit. Because real life is real life. nothing goes perfect. If I told you I'm done.
100 burrs and like they were all great like you better fucking tighten up your checkbook and get the hell out of there and Because like that's not reality every single project almost I Can't think of one project that went exactly as I planned it like even the one I just did which was a fucking masterpiece took three weeks longer to refinance than I wanted it to and so
I mean, like there's just portions of a thing that are out of control. So like, I mean, I guess a really good way to vet people if you're looking at what to invest in.
@shawn_rider_ (15:56)
share.
We've been trying to close on a property in Texas for three weeks like and it's like we need they need one signature from one person It's like what the what the hell is going on here? that's just before we even own the thing. It's it's it's frustrating Well, I am I am a product of a lot of American greed episodes. So I love hearing stories ⁓ but like what I Don't know anyone that's lost like multiple six figures in one of these scams ⁓
Jeff Smith (16:10)
Yep. Yep.
@shawn_rider_ (16:29)
I know of people, but I don't know them personally enough to ask. so hopefully they didn't invest enough that breaks them. like, correct me if I'm wrong, have you had conversations with people you know that have lost high six, maybe seven figures? Like what goes through their head after that happens as a human?
Jeff Smith (16:49)
man, have like, yes, the answer is yes. And I've had conversations with two people I could name immediately that lost seven figures each. it erodes, it's such a bad thing because it really just erodes their trust in people. like, they're not in a good mental state after that happens, right?
@shawn_rider_ (17:06)
Right.
Well, it erodes my trust as an outsider. That's why I sent you that text this morning. And I was like, how do we vet people? Because like, I just, I'm, I'm really, people think I'm risky. I'm really risk averse. And so like, I could definitely liquidate all my assets that take attention and put them into some of these funds and be fine for a very long time. And it'd be much easier than owning some shit, you know? ⁓
But like I couldn't imagine that would be my whole nest egg, which again, you wouldn't want to do, but when you run the numbers, it is enticing. It is enticing. ⁓ But like seeing other guys from afar go through it turns me off to it a lot.
Jeff Smith (17:51)
Yeah.
Well, I would say the same thing that I would say about partnerships. You've probably heard me rail on the fact that people should get over their scarcity mindset with regards to partnerships. And it's because it's small thinking. Now, if you do your due diligence and you know the people and you run background checks and you evaluate the deal,
@shawn_rider_ (18:16)
Mm-hmm.
Jeff Smith (18:28)
Like part of people, like they just aren't prepared to invest a certain sum of money. Now, if you
If it's an insignificant amount of money to you and you're willing to do the due diligence and learn what a good underwriting deal looks like, what a good underwritten deal looks like, ⁓ Part of that is on you. Part of it is on being a ⁓ capable investor that takes your time to vet some of these deals and understanding, and I'm not saying these guys,
Deserve to lose money. That's shady as fuck and like people should not have been doing what they did Because most of the guys that are in trouble took the money out of a business or an investment and they used it for lifestyle and like that is the most disgusting thing that I think a a Fiduciary could possibly do and they should get in trouble for it, right?
If you're going to take a million bucks of somebody else's money and pull it out of an asset and then live off of it, like that's fucking shady. And but I think as capital raisers like myself, I think that you have to protect your reputation above all. Like, so if if you have to be willing to make things right. And then over time, I think that that kind of sorts itself out.
Because those guys that aren't going to have that type of integrity aren't going to stick around long, right? They're not going to be able to raise money very long because they didn't do the right thing by their people. Like that's why capital reserves are a very important thing. That's why also having something buttressed up against the debt, like whether it's collateralizing the actual asset or having a bunch of capital sitting on the back end that you could make your
investors hold with is super important.
@shawn_rider_ (20:40)
Yeah, well we have a young rider joining the episode here for those visuals. This is my son. He pretended to be sick this morning and is home from school. He wants to go play some football. Well, I kind of cut you off so you didn't get to answer the fun part of the question for me and my brain. What do these guys say after they lose seven figures?
See you.
Jeff Smith (21:01)
Well, mean, it's like the stages of grieving. Like they want to kill the motherfucker first, And like, sorry, your kids there. But ⁓ yeah, I mean, that's the natural inclination at the beginning. And then they go through the phases. ⁓ Ultimately, at the end of the day, though, ⁓ and this is what I've said to everybody, is like, you just have to move forward. what, like they have great businesses. They've obviously been able to accumulate an assload of money.
Like what does looking backwards, ⁓ excuse me, with animosity or being sad or mad or any of these emotions, what is it doing for you going forward? Now, should you be, is there a lesson to be learned? Absolutely. Make sure you're channeling that energy, though, in a productive manner. Like a lot of these guys get stuck, like beating themselves up or
like negative self-talk or like you said, never investing again because now they've been burnt and they would never trust anybody with their money, blah, blah. There's always ways to continue to move forward and make progress in a quick, meaningful way. ⁓ Maybe you just have to restructure how you're operating in the deal though. Like if I'm gonna give somebody a million bucks,
maybe the next time you come in, you're the CFO of the fucking project. And like, that's your role. And then you take your personal assistant and you put your personal assistant in the role of CFO, and they're in charge of giving you weekly or monthly reports. And then none of that money's, because you're cross-referencing it on the bank account and the deal and the builders invoices or whatever you're doing. ⁓ There's ways to mitigate that that can build your confidence back up.
So the answer is never to like shrink into a hole and live this existence where you like hate people and don't do anything. like, you just have to learn the lesson and then structure how you are capable of moving forward. And there's sometimes, I mean, there's trauma associated with this stuff as much as you would think it was weird, but a lot of different things.
@shawn_rider_ (23:25)
If I want to crawl into a hole for three days, let me crawl into a hole for three days. Now, I mean, the closest thing, like I said, I lost some money in some investments. Definitely had some grievance, some frustrations, mad at myself, mad at not following the quote rules that I had had in place. You know, could argue it was just getting greedy because it was, it really wasn't huge returns. It was just better returns for the money I had parked somewhere. And, you know, very shortly after that,
Jeff Smith (23:29)
That's fine. Three days.
@shawn_rider_ (23:54)
you know, a company went bankrupt. You know, I got a little money back, but not nearly as much as what I put into it. ⁓ But I was very frustrated, but I still woke up every single day and did what I needed to do to move forward. And then, you know, a few years ago when I was going through some litigation, right, I was very, very upset about like the lawyer bills I was getting in the mail every single month and to the point where like I would just let them sit on the counter for a few days. And I just told myself like, as soon as you get the bill, open it, look at the number.
write the check and put it back in the mailbox. Once I started doing that, it just shortened the timeframe from like that grieving process and it was just like moving forward. same thing here, right? Like losing money is never fun, but it's part of the game. The alternative is not making any money or parking money and it not doing anything for you until you're 70 years old, which we are not proponents of. So ⁓ Jeff, I appreciate the fun topic today. If you want, send the people out.
Jeff Smith (24:53)
Well, mean, God willing, if you're being burned, it's for smaller amounts of money and you're learning your tuition is a little less than some of the people we're discussing on here. like you should be learning these lessons as you as your investor career and DNA grows. ⁓ But you shouldn't allow it to limit like these horror stories that we're talking about on this. I don't want that to persuade you to stay away from investing in, first of all, yourself.
And then businesses and things that you can control. There's ways to avoid all of this stuff that we're talking about on this show for sure. And so I don't want you to go away with any limiting beliefs. These are just some weird things that we've been chatting about on the back end. But you just never know when when businesses or people are are set up as a house of cards and how fragile some of that stuff is. And so if you like this episode, let us know. And
I'm going to stop coughing eventually, but probably right after this ends. join us on the Tactical Empire community on Facebook and like and subscribe our YouTube channel and send Sean and I a DM if we can help you with any of this. Like I said, we are not financial managers or planners or licensed in anything, and I was not involved in any federal investigations, nor have I been involved in anything like this. So I do know people.
And this was an interesting ⁓ episode for sure. Makes me think about a lot of different things. So good luck out there. ⁓ Keep your money moving forward and working for you. And we will help you out next week. So take care, folks.
people.