Learn the Rules Before You Play the Game: Lessons From My Conversation With Jeff Watson

There’s a dangerous phrase in business and investing:

“I don’t want to learn the rules. I just want to do it.”

That mindset eventually gets expensive.

During my latest E-Heroes conversation with Jeff Watson, we talked about self-directed IRAs, risk, education, business, legacy, and why so many people are eager to skip directly to the result.

Jeff has spent years working with investors and self-directed retirement accounts. And one of the most important things he said during our conversation was something you don’t always hear from someone in that industry:

Self-directed IRAs are not for everybody.

In fact, Jeff believes they’re probably appropriate for only a minority of investors, and even then, they shouldn’t necessarily represent everything someone has invested for retirement.

Why?

Because opportunity and risk tend to travel together.

The Easy-Money Years Created Bad Habits

Jeff described the period from roughly 2010 through 2024 as an era when real estate made a lot of people look smarter than they really were.

His description was great:

You could practically “buy and breathe” and make money.

Values were climbing.

Cheap money was everywhere.

Deals that might have been mediocre in another environment still produced decent results.

And people started believing that was normal.

It wasn’t.

Jeff’s point was that the market eventually exposed weaknesses that had been hidden by years of favorable conditions. Deals people thought were great suddenly didn’t look nearly as attractive.

Higher returns come with higher risks.

And when the environment changes, ignorance becomes very expensive.

You Need to Understand the Risk

Jeff wasn’t saying people should avoid self-directed IRAs.

Quite the opposite.

He has personally done successful deals inside self-directed accounts.

He has also done bad ones.

That matters.

Anyone can sell you the upside.

Jeff was willing to talk about the downside too.

The question isn’t simply:

How much money can I make?

The better questions are:

What can go wrong?

Do I understand the risk?

Can I mitigate that risk?

Have I done enough due diligence?

Can I afford the consequences if the deal goes badly?

If the answer is no, maybe the smartest investment decision is doing nothing.

That’s not fear.

That’s discipline.

Learn First

This is where our conversation suddenly connected directly with my own philosophy:

Learn. Build. Experience.

Jeff explained that if you don’t learn correctly, you cannot build correctly.

And if you don’t build correctly, you probably aren’t going to get the experience you wanted.

That sounds simple.

Yet people try to reverse the order constantly.

They want the experience first.

They want the money.

They want the return.

They want the growth.

They want the lifestyle.

They want the win.

But they don’t necessarily want to spend the time learning what makes the win possible.

Jeff told me about someone who recently wanted to complete a transaction a certain way.

Jeff told him it wasn’t legal.

The answer from the other person was essentially:

“I don’t want to learn the rules. I just want to do it.”

There’s the problem.

The rules don’t disappear because you don’t feel like learning them.

Rules Protect You

People hear the word “rules” and immediately think limitation.

Sometimes rules are protection.

They keep you from making a mistake that could cost you money.

They keep you from creating tax problems.

They keep you from walking into a transaction you don’t understand.

And in Jeff’s case, the rules also protect his law license and career.

He was very clear that he isn’t crossing the line for a client just because someone wants a particular outcome.

That’s another lesson entrepreneurs need to remember.

Not every dollar is good money.

Not every client request deserves a yes.

Not every opportunity deserves your participation.

Sometimes the most valuable thing a professional can tell you is:

No.

Expertise Means Knowing When to Say No

We talked earlier in the interview about Jeff narrowing his law practice.

He has become much more focused on work involving self-directed IRAs.

If something falls outside that area, he is increasingly willing to pass.

That is not a weakness.

That’s expertise.

Experts understand where they create the most value.

They also understand where they shouldn’t pretend to be experts.

There are too many business owners trying to serve everyone.

Too many consultants selling things they barely understand.

Too many investors entering deals because someone online told them the returns were amazing.

Too many people asking:

“How do I do this?”

before asking:

“Should I do this?”

Those are very different questions.

Wealth Isn’t the Entire Goal

Toward the end of our conversation, Jeff talked about his book Boaz on Business.

That shifted the discussion from money to legacy.

Jeff explained that the book came out of a difficult period in his life when he was asking God who he was supposed to become.

His answer centered around Boaz.

Jeff talked about Boaz as a man of wealth, wisdom, generosity and influence.

But the part Jeff emphasized wasn’t simply what Boaz accomplished personally.

It was what came after him.

His descendants.

His legacy.

The impact that continued after his lifetime.

And that changes the way you think about wealth.

The goal isn’t simply accumulating more.

The question becomes:

What are you building that will matter after you?

Legacy Requires Structure

Jeff also works with investors who have significant amounts of money inside traditional IRAs and are looking for legitimate ways to restructure those assets, including conversions to Roth accounts.

Some of these investors are approaching required minimum distribution age and are thinking beyond their own retirement.

They’re thinking about their children.

Their grandchildren.

Taxes.

Control.

And ultimately, legacy.

Jeff summed it up beautifully during the interview when we talked about what that kind of planning can create:

Peace of mind.

Money without a plan can create anxiety.

Money with structure can create freedom.

Money with purpose can create legacy.

Don’t Skip the Build

The same pattern shows up everywhere.

People want a successful business without learning marketing.

They want wealth without understanding investing.

They want employees without developing leadership.

They want customers without creating systems.

They want a legacy without deliberately building one.

They want the experience.

But they skipped the build.

And usually, they skipped the learning before that.

That’s why the order matters.

Learn.

Understand the rules.

Understand the risks.

Understand what you’re getting into.

Then:

Build.

Create the structure.

Put systems in place.

Make thoughtful decisions.

And then:

Experience.

Experience the results that come from doing the first two steps correctly.

The Rules Aren’t the Enemy

Whether you’re investing through a self-directed IRA, running a business, creating wealth or building something you eventually want your family to inherit, ignorance isn’t a strategy.

You don’t have to know everything.

But you do need to know enough to understand when you need help.

You need advisors who will tell you the truth.

You need professionals willing to say no.

And sometimes you need to slow down long enough to actually learn what game you’re playing.

Because the people who consistently win aren’t usually the ones looking for ways around every rule.

They’re the ones who understand the rules well enough to use them intelligently.

Learn the rules.

Build correctly.

Then go create the experience—and the legacy—you actually wanted.