Patrick Donohoe

Financial Freedom For Millennials with Daniel Ameduri

TWS 18 | Financial Freedom For Millennials


The road to financial freedom has always been dictated by financial norms, a lot of which don’t really seem like freedom at all. Editor and the Founder of Future Money Trends, Daniel Ameduri, talks about financial freedom and what it looks like for the Millennials. Walking us through the concepts of his book, Don’t Save for Retirement: A Millennial’s Guide to Financial Freedom, Daniel notes that the Baby Boomer generation has inculcated in most Millennials the idea of saving for their retirement and putting their money on retirement funds which has given the younger generation more pressure. Breaking the shackles that are forcing us to commit to that tradition, Dan teaches Millennials how to deviate efficiently from investment and embrace the gifts brought by their time.

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Financial Freedom For Millennials with Daniel Ameduri

On this episode, I have my good friend. He’s become a great friend, but he’s also the Editor and Founder of Future Money Trends, which is a publication business. He has come out with a book, Don’t Save for Retirement: A Millennial’s Guide to Financial Freedom. I know he has been working on this for a while. I had him on the show many years ago. Daniel has been front-running the cryptocurrency, the cannabis, the precious metals and other alternative investment world for quite some time on his YouTube channel and very popular website, You are going to get to love his perspective on life and I think you’re going to get a lot out of reading his book and hearing the story firsthand. Daniel is an amazing writer and entrepreneur. If you’re reading about him for the first time, then it is going to be a treat. Without further ado, welcome, Daniel Ameduri.

Daniel, thank you for spending the time, it’s awesome having you back on. You were on several months ago. It’s a pleasure and I’m super excited about your book.

Thank you for having me on. I should let the audience know that I have seventeen policies, dividend-paying, cashflowing, gushing, safe. I’m dual compounding them too, but I’m sure we don’t want to go down that rabbit hole but they need to learn from Paradigm Life for that.

There are many things you can do as a Millennial if you embrace all the gifts and the things that the world has given us. Click To Tweet

Daniel, I’ve gotten to know you over the years and you’ve done some incredible work. It was awesome to hear more about your story. I never got into that with you even though we’ve had some discussions over the years. Your book is well-written and I like how it opens up your life. How people come to this opinion or perspective of life, there’s a backstory to it. Without that backstory, sometimes it’s hard to buy into a person’s perspective, especially if it’s different than the status quo. Looking at the title of your book, it’s totally against what most people believe. Telling your story and opening yourself up that way awesome. Would you mind maybe talking through what was the book about? What was the purpose of it? What message do you want to send? Who is it intended for? Maybe start there.

The book is called Don’t Save for Retirement. For your audience, we’ve set up a special page at They can read the intro in the first chapter. If they like it, they can buy it. There’s a link. This book started when I was in an attorney’s office setting up my trust, my will and I turned to my wife like, “We know where the kids are going to go. We know where the money’s going to go. What about teaching the kids? What if they get this bad conventional wisdom conditioned into them without mom and dad there who is a fairly strong presence and force against that stuff.” We started brainstorming what we could do. I was like, “How about we write a book? It will be great for the business. It will be great for other people who can read it.” It started with no initial audience in the sense that it was teaching my children, but also keeping in mind Millennials and other people who might be saving the conventional means of retirement and what they could do with their money.

I wanted to bring in what my wife and I did because I didn’t want people to think that, “This guy has got an economic sense on his shoulders and all this stuff.” The intro starts in a bankruptcy attorney’s office. We were messed up after 2008. I got a job making $10 an hour. My wife was a school teacher. We were about to have a baby. Things were wrecked. That’s where the book starts. It starts off how I dug myself out, what it took not just financially, but a change in my mindset and my change in what is even acceptable. The book, Don’t Save for Retirement, I would say almost is a cross between my personal story and personal finance. That’s an alternative way.

It’s not Robert Kiyosaki where it’s all getting leverage. It’s definitely not Dave Ramsey where it’s like, “No debt.” It’s like, “This was my story. This is how I did it. This is all the things I learned along the way.” One thing that rings true with what I’ve learned from Robert Kiyosaki is the poor and middle-class speculate, they just do, no matter what they’re in. Their retirement vehicles, they’re always speculating. The rich preserve and focus on income, which is one of the reasons why I’m so attracted to your company, Paradigm Life, that preservation and income mindset. The advantage of the rich is they’re already rich. However, I learned that if the middle class apply those same principles, they can also be very wealthy.

TWS 18 | Financial Freedom For Millennials

Don’t Save for Retirement: A Millennial’s Guide to Financial Freedom

You use some very strategic words in the book. The one that comes to mind is the idea of control and I thought a lot lately about group psychology, a group narrative. I look at our school system. I look at the workplace. I think it’s programmed into our mind the being told what to do mentality, “You’ve got to do this. I am superior, therefore do what I say.” These days, people are speculating, but they’re not even thinking. They’re doing what everybody else is doing and they’re assuming that whoever’s telling them to do it is going to give them the results that they want, which of course there are many different examples of that not being the case. It was cool as taking control and using your mind to figure out what you want financially is where it starts. Unfortunately, there are these traumatic events, difficult events that cause us to have those paradigm shifts. When you’re writing the book specifically for your kids, if they read the book, what did you want them to get? What was that message? They close the 196-page and it’s like, “What is that next thought?”

That they choose their destiny, that there is no right way or wrong way. Whether they have a job and become great passive income investors or they have a business and they’re investors as well or they’re a stay-at-home-mom or a stay-at-home-dad. I don’t care what they do. I want them to know that they can do whatever they want to do. It is their life and many of us, exactly in line with your question, do what everyone else does and follow the crowd. Everyone else is going to college. Everyone else is saving for retirement. Everyone else is financing their house for a few decades. Everyone else is financing their cars for a few years. Everyone else is buying term because your whole life’s a scheme.

It’s nonstop no critical thinking and I want them to let them know like, “You can do whatever you want and if you want freedom, you have to buy your freedom. It’s not going to be free. It will require sacrifice and it will require good decision-making that will compound. You’re not going to be eighteen and financially-free, but you could be 25 to 40 years old and be financially free as opposed to the alternative plan which is, ‘Give all your money to Wall Street and we promise you in 30 to 40 years, even though you have no idea what your tax withdrawal rate will be or what the funds will even be at, you’ll be able to retire at this magic number that some German politician wanted to win an election.’ He upped the other guy by instead of running on 70, he said 65.” I want people to know that ultimately you choose your destiny and a lot of us have to be woken up and slapped in the face like, “What are you doing? You’re on autopilot.”

I’d love to hear your opinion on what are the events that would cause a person to read this information and not necessarily have it discarded but actually implemented and used. We’re in this period of time where debt is an all-time high, student loan debt, consumer debt. If you look at household income, it’s been stagnant for many decades. You look at people who are not getting ahead and I know that there’s frustration. There are polls. There are headlines that come out all the time about the frustration that exists in America with people not growing, not getting ahead, which essentially is the anti-life because people are naturally compelled to grow. Where do you think the pain threshold is until people snap out of it?

I hope their pain threshold is not bankruptcy or like me, where I was in a bankruptcy attorney’s office with my wife crying. I certainly hope their pain threshold doesn’t go to a point where they get so angry at their job that maybe they do something that gets them fired or damages their resume for the future. Ultimately, that frustration Americans are feeling is because they have subscribed to a middle-class lifestyle that is not sustainable. Much like the national story of what our government is doing, our citizens are doing. I can’t fix the government, but we can all fix ourselves by making some changes in our own lives. In the book, I talk about what my wife and I did. We drastically cut spending.

Did we do it forever? No, but we did it for a year-and-a-half, two years. Even when we weren’t drastically in cutting spending mode, we still live very frugally. I always tell people it took many years. When I achieved that financial independence, net worth millionaire status, not even liquid, but net worth. I was driving a 2003 Nissan Altima. It was a ten-year-old car. I was living in a house, at the time when I purchased it, it was about one time our annual income. By the time I was financially independent, the thing was one-third of our annual income, but I was still doing that and not permanent. Now, I live in a very nice house and I get to enjoy all the luxuries of those sacrifices that I made.

If you want freedom, you have to buy your freedom. It's not going to be free. It will require sacrifice and good decision-making. Click To Tweet

You have to, at some point in time, say stop. For most of us, unfortunately, we’ve subscribed to the unsustainable lifestyle. You might have a car that’s equal to your annual income spread out over a few years. You might have a house that’s ten times your annual income. You might have done a lot of things that have messed you up. That’s where I love the Dave Ramsey personal finance part like, “Start the cutting spending.” Stop doing all this stupid stuff that’s excessive. What I like to do is after I cut the spending is shift the savings of the spending into buying income and training that brain that everything I buy, I want to see a check either quarterly, annually, monthly. I want money coming in from everything I do. One of the things I have in my house in the children’s schoolroom is only to buy assets that cashflow.

We’re all going to get involved with speculation. I’m the worst. I love microcap investing and venture capitalism, especially here in California. Ultimately, 90% of my efforts and my focus is focused on buying income. Anyone who’s frustrated and who is in that lifestyle of trying to keep up with the Joneses realizes that financing everything in your life and spending every last bit of your paycheck, it is not normal. It may be perceived as normal because that’s what everybody else was doing, but it’s not. You have to say no. If you’re reading and that resonates with you, it can be done. It’s going to take a few years to mop this thing up, but you can be financially independent and either quit your job or work part-time or full-time because you love what you do.

These are all amazing points. In the book, what direction are you giving to people? What are the steps that they can take? Starting with whomever that person you were writing to when you were typing out the words of the book and getting them to take that first step then the next step. What are some steps that people can take to go from where they’re at and start to circumvent better or build a bridge over the gap to where they want to be?

The first chapter starts with, “What is wealth?” A lot of people don’t even know what they want. They’re just going through the motions of life. They’re killing time while they’re here on earth, which is very sad. For me, wealth is the ability to be able to do what I want with my time, to wake up when I’m done sleeping, to be free. I think that’s the first step is defining what you want. I always tell people, I learned this from James Altucher. He talked about the three things you want people to say at your funeral. What do you want people to say who you are and then embrace those things? Remind yourself, write it down on a piece of paper and see it every day when you get up. I have daily statements for every single of my kids and my wife and I. I like to remind myself that. Steve Jobs talked about that, ask yourself every day, “Am I happy with what I’m about to do right now?”

The next step is if you decide to become financially free, you need to see what the gap is? What do I need? How much income do I need to pay for my expenses, my monthly lifestyle? Ultimately, becoming financially independent, in my opinion and in the book, is to be able to have multiple sources of income. Instead of having a one or two-household income, think about having how do you get to a 21-household income? Maybe it doesn’t pay all the bills, maybe it just pays the utilities. How good will that feel? It pays all your utilities, maybe it pays the mortgage. However, you want to look at it, how would you like it if every month you went to work and you realize that all your utilities and your mortgage were being paid by passive income?

TWS 18 | Financial Freedom For Millennials

Financial Freedom For Millennials: The Millennials may have been conditioned to believe that they want socialism, but they love the efficiency of capitalism.

It starts small. The book talks about the biggest first step is work where you can cut. For a lot of people, that’s moving, that’s one of the biggest expenses. Whether you’re moving to a further area in your county or you’re moving to another state. My wife and I moved to a desert community in California. The next area is retraining their brain. Instead of dumping all this money into a 401(k), start using these whole life policies to dual compound. Start using different investments that pay an actual dividend that bring a check into your life. That’s the biggest thing I can tell people to have that mindset of start buying things that make you money.

It’s interesting and I’ll be somewhat open here because the first thing you said resonated. Most people don’t know what they want. I think it goes back to the mindset that we’ve been programmed or highly influenced to understand, which is being told what we want or being told what to do instead of us recognize. It sounds trivial but us recognizing that we have a choice of what we want. I had one of my business coaches, I had this meltdown. I didn’t even anticipate it, but it was the rocking chair test. They essentially get you into this state where you’re 95 years old, you’re sitting in a rocking chair and you’re describing what life was about. It was powerful for me and I connected with what was important to me. I connected with what I wanted.

It wasn’t necessarily a dollar amount. It was more about my relationships. It was about the people that I loved as opposed to anything material. At the same time, those material things allow a magnification of the experiences with the people that you love. The second piece is interesting too that you talked about, which is the idea of understanding where you are financially and where you want to be. I look at what most people obsessed with, which is weight and money because it’s measurable. At the same time, how people measure money is fascinating because it usually has to do with either their income or their bank account and that’s it. The true measurement of money, which Robert Kiyosaki heavily emphasizes in all of his books, is a financial statement.

He has a whole book at how to create a financial statement, which is ultimately the scorecard for where you’re currently at but can also help you objectively measure what you need to do in order to get to where you want. Ultimately, the wealth side of things is fascinating, Daniel, because in the end, why are financially successful people so miserable end up committing suicide or getting multiple divorces or alienating children? It’s interesting where people have connected wealth with money but yet, in the end, people would trade all of their money for what is truly valuable to them if they opened up and were vulnerable. That’s where I look at where we’re at in our day and age with society and what’s available to us with technology.

Wealth is the ability to be able to do what you want with your time, to wake up when you are done sleeping, and to be free. Click To Tweet

It’s more possible than ever to live that type of life, but yet the comfort that people have with what society has told them is a success is still bought into. Even though people are starting to see that there’s a different way of doing things and there’s a different lifestyle. “Look at this guy, look at this friend,” but yet they’re still programmed to do what’s safe and comfortable. How did you break out of that? Where have you may be talked about in the book how you have written whether it’s your newsletter or your YouTube channel, like getting people to snap out of it and believe in what is possible.

I would say that what you just touched on, the first thing I thought of was the Millennials. The Millennials are trying to apply the Baby Boomer life plan to a totally different economy. They are suffering and complaining about it. I got rid of my car because I Uber everywhere and I go for nice long walks or I jump on a Lime scooter and I go as far as I want. I don’t have to go back to a parking lot. I flip out my phone and five minutes later, I’m back at the house. You can start a website for $10 if you’re a Millennial, a business for $10. You can freelance anything, sell your skills, you’re going to work from home and you can monetize your own job. There are many things you can do as a Millennial if you embrace all these gifts and these things that the world has given us.

I ordered lunch and I wanted to order some Thai food, so I went onto Grubhub. A lot of people are trying to do the same thing with their investments and their investment mind setting. The Baby Boomers had the best bond market, best real estate market and the best stock market. According to Vanguard, the median account for 65 and older is only $58,000. If that experiment didn’t work for them, and by the way for most people, 401(k)s have only been around since the ‘80s. They passed them in the ‘70s but ‘80s for all intents, purposes and implementation. A lot of people think the 401(k) was with Adam and Eve, and they came out and they had their employer match.

TWS 18 | Financial Freedom For Millennials

Financial Freedom For Millennials: Trying to keep up with the Joneses financing everything in your life and spending every last bit of your paycheck is not normal.

A lot of this stuff is new. It didn’t work and that’s okay. Some of the intentions were probably good. What does work? What’s been around for hundreds of years, thousands of years when it comes to passive income and the way the rich invest? I look at the frustrations of people that it’s a lot of times it’s because they’re adopting and applying these rituals. I was in Africa and I was with the Maasai. I was asking the guy, “What’s your goal in life?” He was like, “I need more cows.” I was like, “You guys cleaned our rooms and you see the bathrooms and the match them. You don’t want a mattress in your house? The houses are made of cow crap. You don’t want a toilet?” He’s like, “No, the elders say that’s not the Maasai way.” I’m like, “Tradition can kill,” like it’s doing to the Maasai, it’s doing to the Millennials here in America and all around the world because they are in the tradition of something that hasn’t even been around that long, especially when you apply the way conventional finance has been applied to for people.

Here’s what’s fascinating. What you said is that the root of the word capital, like capitalism, comes from cattle. The nature of capitalism isn’t the cattle itself. That’s not capital. The capital comes from the derivative use of cattle, how people figured out to use a cow for not just milk, not just meat, but leather for instance. I look at the world of immense resources and people look at the value in a piece of land or the property. That’s not where the value is. The value is our ability to take our mind and make use of that in a variety of different ways. Look at what we live amongst every single day, whether it’s Grubhub, uh, whether it’s the Lime scooters. These are essentially resources that people figured out how to look at some friction or some frustration and to get a solution to it. That’s all around us, but yet not understanding the fundamentals and subscribing to the status quo doesn’t open your mind up to what those possibilities are. That’s why the Millennials don’t like capitalism. It’s because everybody else is coming up with ideas and they’re not.

They may have been conditioned to believe that they want socialism, but look at every aspect of their life, they love the efficiency of capitalism.

It’s an amazing world we live in and it’s evolving so quickly. It’s awesome that there are more books like this coming out. They are reinforcing not just talking points, but they’re reinforcing principles that have been around for a long time, but also ways in which you can capitalize on the current environment to achieve the outcome that I would assume most people want.

In the book, I provided the links of the different companies I invest with. Obviously, your company is mentioned in there when it comes to my whole life policies. I didn’t hold anything back. I put it out there and the same thing goes with my letter at If I’m investing in it or writing a check, it’s in there. If not, it’s not in there at all.

Daniel, what are some other ways in which they can follow you, learn about what you’re up to, learn about Future Money Trends, some of the video stuff that you’re doing online. Why don’t you throw those out there?

I would love for them to go to They get the Weekly Wall Digest free. It shares a lot of the different stories and things that my wife and I went through and did to become financially independent as well as some stuff that I teach my children, as well as any investment, passive income or speculative that I’m actively involved in. They get to also read the first chapter of the book.

Daniel, it’s a pleasure talking to you. Thank you so much for taking the time. Hopefully, we get to do a follow-up soon.

I hope to see you soon.

Thank you.

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About Daniel Ameduri

TWS 18 | Financial Freedom For MillennialsDaniel Ameduri is a self-made multi-millionaire, a full-time skeptic of conventional thought, and a proud father of three. He is the co-founder of, which, with nearly 150,000 subscribers, it’s the most widely recognized online authority in investment ideas and economic advice. He’s been featured in The Wall Street Journal, on ABC World News Tonight, and on Russia Today TV. Daniel correctly predicted the collapse of Lehman Brothers, AIG, and Washington Mutual on “Vision Victory,” the YouTube channel he launched in 2007 and which now has had more than thirteen million views.


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Becoming A Tech Company with Jared Hobbs

TWS 17 | Becoming A Tech Company


If you want to survive in today’s global business, you have no option but to become a tech company. Experienced software engineer and entrepreneur Jared Hobbs shares his insights into what companies are doing these days that most people are not entirely aware of. As he dives deeper into how companies have evolved and are evolving, he also discusses how this evolution has impacted the tech world. Jared shares some concepts on how to get investors and how and when to capitalize your company other than the traditional ways.

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Becoming A Tech Company with Jared Hobbs

We are in the season on entrepreneurship where we’re focusing our guests, the topics of discussion, the questions all around the idea of the entrepreneur. Previous themes have been on capitalism, on the notion of life, liberty and property. It’s been fun to focus the episodes, the guests, the questions around this central theme. We’re almost at the end of this season on entrepreneurship. I hope you have been learning a lot. If you’re here for the first time, welcome and go back and definitely check out previous episodes. I know you’re going to get a good course on the idea of the entrepreneur.

This episode is different because I’m interviewing not necessarily a professional speaker or presenter, but someone that I have a lot of respect for. He’s my neighbor and become a friend. He has been in the technology space for quite some time. He works and is part of the foundational software engineering team for Carta. Carta is one of those multibillion-dollar companies that has owned the space of organizing the ownership of public and private companies, not necessarily the ownership but employee ownership. There are other things that they’re doing as well. They’re very innovative and are owning this space.

Jared had this front-row seat of looking at the world from that perspective, which is very unique and it’s led to some high-level conversations with him and I. I’ve learned a ton about how the business world is changing from how companies are getting capital, how they’re being valued. Also from the standpoint of what employees are expecting of companies in that space, which I believe it’s shifting to non-tech companies. Jared in the interview argues that all companies are essentially becoming tech companies, especially if they want to survive in this day and age. It’s a fascinating interview. It’s a perspective that most do not have. We tried to stay as high level as possible because there is some terminology, that technology lexicon that most don’t understand. I believe that we got some good nuggets out of Jared. I may have him back on because there were some things that we’ve talked about offline that I was so intrigued by and wanted to discuss and explore further, but due to the lack of time, we weren’t able to. I want you, depending on your role, to look at this interview from that perspective, wherever you are in your professional space, if you’re an employee, if you’re an owner or if you’re an entrepreneur or maybe a combination of the few things.

First as an employee, I find it interesting how employees are being compensated differently these days and they’re not necessarily looking for companies where they can work for 30 years. They’re looking for companies that align with values in a sense, but also the notion of work has changed. They’re more working to live instead of previous generations who were living to work. I find this interesting because it has put some pressure on companies because if one company is offering what employees are demanding, then that company is going to get high-level employees, high engagement, high retention. Whereas a company that doesn’t necessarily keep up with those times is going to lose top talent, have turnover and probably is going to lose a lot of money. I believe that this space is rapidly evolving as far as what employees are demanding as part of their overall compensation and overall experience in the workplace.

From an investor standpoint, that’s another role that is interesting to look at, the businesses that are coming online these days. You have multibillion-dollar businesses that aren’t profitable, which means that they are spending more money than they’re making. We get into that conversation as well. Also from an entrepreneur space, that perspective, which is what are the various ways in which you can be capitalized? Not necessarily just money capital, but also how do you associate with those that have built big businesses, big companies? They’ve done it with this new way in which companies are capitalized through venture capital, private equity and navigate those waters, which can be pretty treacherous if you don’t know what you’re doing. There’s capital, not just in money, but also the experience that surrounds a lot of incubators and other spaces in which these types of companies are coming online.

It’s a fascinating topic to me. I hope you get a lot out of it. I feel that this is a conversation that needs to happen more because I see in my own business how things are changing. I’m observing the world around me, whether it’s industries that have been around for hundreds of years to companies that have a very good reputation. Things are being disrupted very quickly and it’s going to be an interesting couple of years. You are going to learn a lot from Jared. He moved into the neighborhood. I’ve been there for several years now and we have a lot of things in common. He has a tremendous amount of knowledge associated with his craft and his field. Hopefully, you’ll learn from him. Without any more delay, let’s get to my very fascinating interview with Jared Hobbs.

I have a special guest. I have been talking a lot about the way in which our society is evolving, how business ownership is evolving, how entrepreneurs are evolving. It seems so fast, it’s hard to keep up with. I brought in my neighbor. His name is Jared Hobbs and he moved into the neighborhood from Palo Alto. It was cool because when I first met him, his wife is a Latina. His dog was the same name as my dog and he liked the same type of music. It was cool. It’s was like my kindred spirit moving in next door. Jared is a software developer, software engineer and he is part of the founding engineering team with Carta. It’s been fascinating to have conversations with him. I wanted to have him on because he has some insights into what companies are doing these days that most people, including myself, aren’t entirely aware of.

We’re going to get into how the evolution of companies and employees has impacted the tech world, how it’s evolving into the rest of the business world from an ownership standpoint and how companies are being capitalized these days. How are they getting investors? What options are available to you? Also, if you’re the entrepreneur or the business owner, there are many ways when you can capitalize your company other than the standard traditional ways. However, there are a lot of unknowns, so we’re going to talk through those because Jared has been at the forefront of that for the last several years.

Most companies in Silicon Valley are valued more for their network effect and potential to make money rather than what they're making now. Click To Tweet

As investors, that’s another thing that I find difficult. These days you have a lot of companies that are multibillion-dollar companies that early on didn’t make any money. They made money from a revenue standpoint but weren’t necessarily profitable. Meaning they were spending more than they were making, but yet they grew and became these huge industry giants. I want to talk through that as well because for me as an investor, you want a company to be profitable. You want it to be earning cashflow. Looking at a company that’s not doing that immediately sets in some concerns.

I want to talk through how as an investor, you look at a company that is capitalized in a modern way and how to determine whether there is some viability there worth investing in or not. Jared, let’s get into it. I know we’ve had some pretty high-level discussions. We talked a little bit now in regards to what you have been a part of. Maybe start with what was your experience like in Palo Alto. How has it been to see different companies on the Carta platform and how they’ve been able to transform based on what tools had been available to them that may not be available or even known about to other businesses?

The business world in Silicon Valley is different. It’s a bubble. It’s different than any other business type that I’ve seen. It’s the only place where you can have a business raise millions and millions of dollars and not have any cashflow, not have any money coming in.

That’s fascinating that people would put money toward that.

It seems like a lot of those companies valued more on their network effect, on the potential to make money rather than what they’re making now. What you’ll see is a company, a couple of founders that have an idea. They start getting some traction and they take their idea to Sand Hill Road in Palo Alto where all the investment firms are. They pitch that idea and these investors see that maybe these people do have this strong network. They’re looking for the next Facebook and the next Uber. Even if this business isn’t making money and they’re burning more money than they are taking in, that network effect is what’s valuable.

What’s the payoff for them? First off, the full potential thing. I think everybody has potential. Looking at those that achieve, what do they look for as the variables to determine whether or not it’s going to be successful?

Venture capital is funny. They’re looking for that one payoff. They’re going to be throwing money at a lot of different companies with the hope that one of them pays off. Most startups fail. That’s a fact. Most of them won’t make it past Series A in financing and they’ll shut their doors. If a venture capital firm finds that needle in the haystack, that one company that will make it to a unicorn or a decacorn status, then it was all worth it. It doesn’t matter that they lost money in all these other companies.

Is there a formula for that or is it just throwing money at the wall and hoping that one investment sticks?

TWS 17 | Becoming A Tech Company

Becoming A Tech Company: Silicon Valley is the only place where you can have a business raise millions and millions of dollars and not have any cashflow.


I’m sure some firms are like that, but for most of the firms I’ve noticed, they look in multiples of an ARR.

What’s ARR?

ARR is the Annual Recurring Revenue of a company. Some of these early-stage companies will have ARR and it will be low, but they’ll be valued based on a multiple of that. Also, investors will look at proven track records of the founders. If a founder had a previous successful startup, they’re more likely to fund that person because they’ve proven themselves. If a founder has not proven themselves and they don’t have a team that’s worked on successful startups before, but they have good ARR numbers, that’s a good signal for those VCs.

You can go the VC route and go and pitch these bigger firms to get that type of capital to start. Crowdfunding is the one that comes to mind. What are some other ways in which smaller businesses or entrepreneurs with ideas have gone to the marketplace as opposed to borrowing money from mom and dad, going to a bank and getting a loan? It received capital and then taken and turn an idea into something tangible.

There are a lot of success stories with companies like Kickstarter, GoFundMe and Indiegogo. A lot of these are exchanged for our product. I haven’t seen a lot of companies give equity through these crowdfunding platforms. I’m not even sure if they’re allowed. Actually, I’ve seen a couple on Carta that have gone that route. The problem with that though is your cap table gets inundated with all these people, all these very small investments. There are laws where you can’t have more than a certain number of people on your cap table. It gets tricky if you try to fund that way.

Do you think that will change? Is there pressure to change it?

I think there is pressure to change it. I know Carta is lobbying the Congress right now to get a lot of changes from happening, especially in the accredited investor space. They’re trying to slack those rules a little bit to make it easier for the average person to invest in privately held companies. A lot of the early-stage startups will go to the bootstrapping route. They’ll try to build their company based on their own savings. The founders will be the main seed investors. Other companies will go to Angel investors, which are wealthy individuals that usually give money in the very early stage, in what we call the pre-seeding stage.

What are some of the more popular Angel investing platforms that people may not be aware of?

Normally a startup will fund their platform or their development using their own money, friends, and family money and angel investors. Click To Tweet

Angel List is the main one that I’m aware of. I’m sure there are other places too. Just go into networking events or pitch competitions, you’ll meet these Angel investors. Normally, a startup will fund their platform or their development using their own money, friends’ and family’s money and Angel investors. If they start seeing some traction that maybe they have a good idea here, they’ll go to a seed-stage fundraise. There are a lot of Angel investors that participate in seed stage. There are also VC firms that participate in seed stage. There are also incubators, Y Combinator, Techstars, Idealab, things like that. These are great. They usually will give you a small amount of money. I think Y Combinator is something like $120,000 in exchange for 7% equity.

Let’s take a back step and describe these stages. At least myself, I don’t know if I understand it 100%. Usually when you have an investment in a new company, there’s essentially one stage. You put an investment, a loan. You put a capital contribution and then you start spending it and hoping you can bring in revenue. That seems like the only stage. Talk about these seed stages and these different series stages and how that all works.

Speaking from what I know in the Bay Area, how it usually goes is you want to raise money. You’ve decided to take on outside capital in exchange for equity. You build a pitch deck and then you start shopping around. There are different pitch competitions where you show your idea off and then you get people that are interested. They start throwing money at you. You sign a term sheet and then you start working. Usually, what happens is there’s a pre-seed stage and that’s usually friends and family, individual contributions, things like that. That’s just to test, do maybe market research to see if you have an idea that could become profitable. After your idea has been proven and you think that you can build this thing, you need to raise more money. That’s your seed money.

Do the people that put seed money in get paid off and they’re out or they stay in and now the company becomes bigger because there’s more money in it? How does that work?

Every new round of financing that a company takes on, the existing investors will get diluted. A lot of times, the company will give those investors an opportunity to put more money in to get their percentage back up to where they were. A lot of times, these small investors don’t want to do that. They just want to cash out. Usually, when you’re raising a new round of financing, it’s an opportunity to provide liquidity for the existing shareholders. Maybe if you’re raising a Series A now, your seed stage investors want to get some liquidity out from their investment. They’ve probably been around for five years or less. They want to see some return.

Is that the term of the initial term sheet or is that determined when the next round of funding comes in?

It will usually always be written into the term sheet of when they can get their money back out and everything. When you’re raising money, the shares that you give them are usually preferred shares also. In cases of an exit, an acquisition, an IPO or something, those preferred shareholders get their money out first before any common shareholders do.

Do founders usually take a common or do they also have preferred?

TWS 17 | Becoming A Tech Company

Becoming A Tech Company: When companies go public, it’s usually because they need to raise more money.


Some founders do preferred, but most founders’ stock is common but it’s a higher level of common than normal common. Debt gets paid out first, then preferred shares, then founders’ common and then common.

When you go to these different stages, how do the valuations change? If you’re going to bring in new capital, you’ve proven an idea, but then what does that mean? How do you value the next stage? If the idea is proven, is there another theory or formula to determine how is it going to be valued and what determines the next stage after that?

When talking about these tech companies, there are two valuations. There’s the fair market value, which is the value of the common stock and there’s the preferred price, which is what investors are willing to pay for it. They’re both valued in different ways. The common stock, that valuation is required on form 409A of the IRS Tax Code. That’s usually done by an external third party. Carta is the biggest provider of foreign aid in the United States. There’s a Black-Scholes statistical model that goes into that valuation. There are a lot of little knobs and levers that they can pull to tweak the valuation.

There’s a discount for lack of marketability because a lot of times these companies aren’t making any money, so it makes it a little harder. For comparable companies, they only have public companies that they’re able to compare to because private companies aren’t releasing their financials. It’s a little hand-wavy on how that math works because it’s not an apples to apples comparison. For preferred stock, the investors are the ones that value the company. They do their own due diligence before they invest. They’ll also look at comparable companies. They’ll look at their own portfolio of investments and see any similarities there. They will give you a valuation. When you hear about a tech company being valued at $1 billion, that’s not their fair market value. That’s their preferred price that the latest investors have put on their company.

One of the biggest IPOs in history happened, Uber. It was good for a lot of people, but it wasn’t good for others. There are a lot of later-stage investors in Uber that lost money on the IPO. They can keep money in and hopefully it will be more valuable in the future, but how does that happen? A lot of these big companies that have been funded and capitalized this way are now going public. WeWork is another one that’s about to go public. WeWork, their financials is like they’re bleeding money and they’re going public. They’re bleeding money, why would the public market invest in that? Maybe go through the Uber thing first.

Uber is interesting. They went public at an $80 billion valuation or something like that. They were private for a long time, so they had many rounds of private financing. I don’t know exactly offhand how many rounds they did, but it was like Series F, Series G. It was up there. Every round, it dilutes more and more. Seniority goes to the latest investors. Early investors are way down at the bottom of the chain also.

The early investors lost more than the latter stage investors.

Probably, I haven’t looked at any of the public records on it but that’s what I would imagine. With that company, especially now that they’re public, people are seeing their financial. They’re seeing how much money they’re losing. There’s been an analysis done where they said there isn’t anything that they can do to become profitable other than raising the prices. If they raise their prices, no one’s going to use it.

There's capital not just in money but also the experience. Click To Tweet

WeWork is still private and they’re bleeding money. If they don’t raise any more money, they’re going to go out of business. Their options are ultimately to do another round of funding or to go public and they’re trying to go public. Why are they going public? How do you characterize the mentality of somebody willing to buy shares in WeWork if they’re bleeding money?

Companies, when they go public, it’s usually because they need to raise more money. They can’t raise any more private money. Their investors don’t want that. They want out. I’m not sure in cases like that why the public would buy into it when these private investors want out. It’s economics that I don’t understand.

They’re going to go and they’re going raise money and people are going to invest in it because it’s the sexy thing to do.

A lot of times, the companies that aren’t making money even publicly, their values keep going up. I don’t know if it’s a fear of missing out thing. People want in on a company that they believe can 100x in value. You look at earlier IPOs like Google, Amazon, Facebook. Facebook has pretty high evaluation at the time. Compare those to recent IPOs, those things were like nothing. These IPOs keep getting bigger and bigger. Who knows if we’re going to hit a ceiling? We’re in some bubble that’s going to pop and everyone’s going to lose money on all these investments.

Let’s go now to the employee side of things, which is pretty fascinating. We’re going to mention some books and some other people to follow so you can keep up. This is the business world that we live in. It’s not like it’s going to go away. It’s so big and it’s evolved so much where it’s going to continue to evolve. We’re going to approach it in a few ways, but we’ll talk about some books and some other people to follow to keep up with these not necessarily trends but the way in which business is evolving. I want to talk about employees. The employees of Uber or WeWork and I’m talking more about not necessarily the Uber drivers, but the employees that are the developers helping with the technology, the design, the R&D. If WeWork is bleeding money, don’t employees know that they’re bleeding money? How does that preserve the culture of the company? What are these companies doing that’s different than the companies in the past?

When we talk about burn, it’s a normal thing especially in tech startups. If you’re not burning money, you’re not utilizing that capital that you raised. Investors don’t like that. They want to see you spending that money. If you’re not spending it, why did you even raise it in the first place? There’s a yearly or a monthly burn rate and a company will have a runway of time that they can burn this money before they’re out of money. They usually raise money before that runway ends. I’m not sure about WeWork in particular, but I’m sure they’re expecting to burn a certain amount of money. They know how much they’re making, how much they’re spending. Their investors are probably expecting them to burn a certain amount every month. If they’re burning more than that, they could be in trouble. If they’re not hitting that burn target, they’re also in trouble. Without knowing their specific plans and what their investors expect of them, there isn’t much we can do. I’m sure their employees probably know about those things too if the company is transparent about their financials.

Let’s get into how employees are compensated these days. It’s been different in the past, and that’s some of what Carta is trying to make easier. Maybe speak to that because employee retention is important.

In the past, people have gotten a salary. They might have gotten other perks. They’ve gotten their benefits, their health Insurance, 401(k) maybe, things like that. Nowadays, especially with platforms like Carta, which make it easy to grant options to your employees, it’s expected now. If I’m a recent graduate in a technical field and I’m looking for a job, if that company doesn’t offer equity as part of my comp package, I’m not even going to look at that. It’s something that’s expected now like, “If you’re not offering equity, then I’m going to go somewhere else that is offering equity.” Especially living in Palo Alto, you meet a lot of different people. What you notice is the people that have money that can afford to live there, that have a house are either business owners or they’re employees that won the stock lottery. If you want money, if you want to be wealthy, you need to be an owner. You need ownership. Without that ownership, you’re living paycheck to paycheck. You’re not going to become financially independent that way unless you can take part of that paycheck and invest it in something that’s going to make you an owner.

TWS 17 | Becoming A Tech Company

Becoming A Tech Company: Most startups will fail, so your options could end up worthless; but if it succeeds, it can make you a lot of money.


It started as more of a tech phenomenon. Do you see it evolving into other sectors?

Definitely. I think it was Fairchild Semiconductor in the ‘70s that was the first company to offer equity to their employees. It stayed in the tech sector for a long time. Platforms like Carta make it so easy to grant employee equity that lots and lots of more companies are doing that. We’re now in a period of time where every company is a tech company. Every company relies in technology. If they require technology, they require a software already, you’re going to manage your company’s ownership on a platform like Carta. Why not carve off 10%, 20% of your company to give to the employees? It makes them happy. It makes them work harder because now they have a vested stake in the company. There are all sorts of different rules that you can put into the contract to make sure that they stay. Most option grants come with a one-year cliff. You don’t get any grants until you’ve worked there for a year. After that one-year cliff, it vests on a monthly basis. It incentivizes employees to stay there until their options vest at least as a minimum. Other companies will offer refresh grants. As soon as one of their grants is almost done vesting, they might give them another grant that vest it another four years to keep them around.

How many companies are on Carta? Do you know more or less?

There are a lot.

Hundreds, thousands, tens of thousands?

There are thousands of customers, something around 8,000 companies. There are close to 800,000 employees.

Based on what you have experienced from the time you started, do you agree with the theory that this is going to be the new way in which employees are paid or compensated?

Definitely. Equity is probably more important than your W-2 salary. Your W-2 salary can go up incrementally. It’s not going to make a big difference. If you’re working at a company that gives you decent equity and you’re helping to make the value of your company go up, as soon as there’s a liquidation event, an IPO or an acquisition or something, those options are going to be worth way more than your W-2 salary.

Raising a new round of financing is an opportunity to provide liquidity for the existing shareholders. Click To Tweet

From the business owner’s standpoint, why would this make sense for a business owner? We’ll get the first one out of the way, which is this is what employees are expecting. It’s similar to the standard expectation of employees now is that they get healthcare. That wasn’t the case necessarily many years ago, but now it’s an expectation. Going into this way of receiving compensation, that’s going to become an expectation. How does it make sense for a business owner to do this?

One thing, it’s to stay competitive, you’re going to have stock options to your employees. There are tax benefits also for the business owner. With option grants at least, you’re not giving away any stock until it’s the option to buy stock. You are giving your employees the option to buy stock at a discounted price. A lot of employees won’t exercise it until a liquidation event. They’ll do a buy to cover option where they’ll sell everything and then they’ll use that money to pay to exercise the option and the tax that’s necessary. Our CEO at Carta told us many times that he believes there are four stages of employment, where we started out in slavery and moved to indentured servitude and right now we’re in a payroll.

Most society in general, the employment world.

The future will be ownership where you’re not paid just by a monthly paycheck. You’re also given equity and you become part owner of the company that you work for.

How do you determine by employee to employee? Do they all get the same or is it different based on levels of experience, expertise, how long they’d been there or is it equally split across the board?

It’s totally up to the company. It’s very flexible in that, especially in an early-stage company, they might want to give more equity to those founding team members because it’s a lot riskier for them. They’re quitting maybe a job in Corporate America. They’ll work in untested or unproven startup. Once a company is in a later stage, Series B, Series C, maybe the company is making money.

Those are the liquidity events that you were talking about?

Yes. Once that happens, a later stage employee, employee number 200 or 300 will probably get a lot less equity. A lot of times it’s proportional to the risk involved.

TWS 17 | Becoming A Tech Company

Consider Your Options: Get the Most from Your Equity Compensation

Is there a formula to help with that?

I don’t think Carta has that formula. I know that we have an internal formula that we use for our new hires, but every company will be different. Before, our general rule of thumb was 0% to 20% option pool for employees. The first 10% goes to your first ten employees at 1% each, then the other 10% is allocated for all the rest of your employees. You can refresh that off option pool with later rounds of financing and things like that.

For me, a lot of these intrigued me for a while, especially since we’ve started talking. Looking at this being a topic that I am assuming most people don’t study or are aware of, what are some of the recommendations you have for them to learn more?

To learn more about options, there are books and blogs. There’s a book that’s a required reading for Carta employees. It’s called Consider Your Options, which talks about ISOs and NSOs and RSUs and all these different equity instruments. Our CEO at Carta, Henry Ward, He’s got some great blog posts out there. You can find them on Medium. Also Carta’s blog itself, there are a lot of great posts on equity, on 409 valuations, on all sorts of startup-related issues.

There are some required readings at Carta which I found interesting. Zero to One, Peter Thiel’s book and The Lean Startup. The one that was interesting to me is How to Win Friends and Influence People, which is an older book by Dale Carnegie. Why do you think that is a recommended reading?

I think that was one of the first books that was recommended to all new employees to read. It helps an employee gain leverage. It helps with the business relationships, personal relationships and to build this leverage that you need to gain the advantage over competitors, over even your boss, your manager. In the business to business world, you need to build leverage in order to win a contract or to get funding.

Did you know the whole Warren Buffett story behind Dale Carnegie? The only certificate he has in his office wall is his graduation from the Dale Carnegie Institute. I find that interesting. It’s all businesses relationships ultimately. There are some definite core principles and core values around relationship in that book. Jared, this has been awesome. I know you dove into a variety of topics and bounced around. What do you want to use as maybe your final charge to readers in regards to this specific topic?

To the business owners, to the entrepreneurs, there’s so much money out there. There are so many ways to get money. If you think that raising outside funds is the way to go, go for it. If you think that you can bootstrap it and not have to give away part of your company to become successful, that’s also a great way. There’s real value in the accelerator and incubator. If you can get into something like Y Combinator, I totally think that it’s worth it to give away 7% of your company for that network that you’ll get by getting in there. For the employees, keep pressuring your companies to give equity if they don’t already. It’s something that will help you out. Most startups will fail, so your options could end up worthless, but in the chance that your company succeeds, it can make you a lot of money.

There’s a piece in the book that I wrote, as well as a lot of what I believe is employees essentially have all the information at their disposal to be successful. The gap between where you are and where you want to be isn’t necessarily the lack of information. It’s where to get that information. It’s also to understand more about yourself and how you equate to value in the marketplace. A lot of the charge I give people sometimes is go out and look at the marketplace, whether it’s or and see what the market is offering. Look at where your position is currently, but more importantly is where you want to go. See what is required from you, either an at experience standpoint, a skill standpoint, a certification standpoint. That information is more valuable than ever, which will enable you to make more money at a much quicker pace than the standard 3% to 4% cost of living increases most people are expecting.

Know what’s you’re worth, that’s a huge thing.

That creates the baseline to becoming worth more. Jared, this has been awesome. Thanks for taking the time.

Thanks for having me.

I appreciate it. See you again soon.

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About Jared Hobbs

TWS 17 | Becoming A Tech CompanyJared Hobbs is an experienced software engineer and entrepreneur who has started several small companies. Jared graduated cum laude from the University of Mexico in 2008 with a bachelor’s degree in Computer Science. Jared specializes in creating and developing applications for financial technologies, mass data analysis, image processing, image correlation, and other business-class applications.

In addition to his small business ventures, he is currently working as a Lead Software Engineer for Carta, Inc. where he has played an instrumental role in helping the company grow and scale from 6 employees to well over 300. Jared lives in Salt Lake City, Utah with his wife, children and dog.


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The Driving Principles Of Human Progress with Dr. Walter E. Williams

TWS 16 | Principles Of Human Progress


Human progress and societal growth almost always influence each other. The increased pressure and the ability of man to rise to challenges paves the way for more learning and growth. In this episode, Patrick Donohoe interviews Dr. Walter E. Williams, an economist, commentator, and academic, to talk about societal or human progress. Dr. Williams explains that the core driving principles and structure of society is paramount to the idea of capitalism and discusses the environment in which capitalism most thrives.

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The Driving Principles Of Human Progress with Dr. Walter E. Williams

Thank you so much for reading into this episode of The Wealth Standard. We are still talking entrepreneurship. A couple of episodes left before we move on to our next season. This is an episode I had been looking forward to for quite some time and it’s with an individual named Walter Williams. He is a Distinguished Professor of Economics at the George Mason University. He is also the former chairman of the audit committee, also a best-selling author of Up from the Projects: An Autobiography on race economics. How much can be blamed on discrimination? It’s a question in the subtitle. He also wrote American Contempt for Liberty as well as Liberty Versus the Tyranny of Socialism: Controversial Essays. Walter also told me that there was a video done based on his biography, which is called Suffer No Fools. All of those links can be found at

I’m going to do some commentary on my interview with Walter Williams. I’m going to do a pre-interview commentary and then some post-interview commentary and give you an idea in the pre of why I am asking the questions I’m asking. In the post, I’ll expand on some of those ideas if you’re interested. The first thing that’s influencing me to think and to make even more sense out of entrepreneurship and what is essentially some of the resources I can provide you as budding, existing or experienced entrepreneurs is first a book that is intrigued me called The Mystery of Capital. The reason why it’s intrigued me is that it’s an individual who definitely leans toward free-market economics, laissez-faire, capitalism. He’s a pro personal liberty. At the same time, he’s talking about some fundamental structure of society that is paramount to the idea of capitalism. It’s caused me to think differently. I’m still in the process of thinking about what he is saying, what it means and how it could improve my understanding of capitalism, of human nature and help me to be more fulfilled and satisfied with what I’m doing in life. This is some of the points that he makes. Pick up that book. He’s a great writer. If you haven’t read it before or if you’re intrigued by some of the themes we’ve had, this is definitely a guy to follow.

The idea of The Mystery of Capital, we’ve used that word so much, but we haven’t gone to the root of that word and where it came from, which the first thing that was intriguing to me. It comes from the root of the same word of cattle. There’s a difference between cow and cattle. Where capitalism came from was the idea that human beings figured out a way to take a piece of property and turn it into so many different things. That’s what de Soto defined as capital. Not necessarily the cow itself, but the human being able to figure out how to create forms of value. Whether it’s the hide turning it into leather, whether it’s meat, whether it’s milk, whether it’s the other parts of the cow, which I think human beings have figured out a way to use every single part of it. That’s the capital, not necessarily the cow itself.

The second is essentially the environment in which capitalism most thrives, which is essentially the physical world full of resources and what goes from simply a resource into what he considers as capital, which is I would say the multiple derivatives of resources. That’s where it’s fascinating to me. Because capital is created there, but there are a structure and an environment in which it thrives better. He goes through and he talks about, I’ll use two examples. The first example is property in general. A property can be defined through intellectual property, an idea. Real estate is obviously physical space. He talks about in the United States, we have a very interesting property system, a legal system, a title system, which he goes to the history in it. The history is pretty fascinating.

It talks about how it’s not a perfect system, but it’s one of the more objective systems that are out there, which shows ownership and that ownership can be legally defended. That is a degree that creates a degree of certainty that allows that human mind to start exercising its tendency to provide those derivatives like a cow. Figure out a way to turn what was essentially a very monotonous routine, just playing into the derivative of it. Turning a property into a golf course. The golf course is the capital, not necessarily the property. Turning a blank lawn at your home into a beautiful landscape. I think that derivative is capital.

The human mind engages once that degree of certainty is there. He goes through a lot of the legal systems of property, real estate specifically in other parts of the world. He talks about the poorest third world countries. There are literally tens of trillions of dollars of capital that’s possible if the legal structure was in place to provide that degree of certainty. Because the human mind is not going to start acting in that way until there is a degree of certainty in which the outcome is more definite than if the property wasn’t able to be verified as that specific person. Therefore, their work to create capital would be for naught. Business is the same way. He talks about the ability to form a business in the US. Of course, there are clunky systems here, but relative to other parts of the world. He uses examples of having his research team go into some South American countries and try to form a business and set up shop. In some instances, it took several months. In some instances, it took over a year and it was extremely expensive to do it. It was full of red tape, full of clunkiness. Therefore, the ability to provide that foundation of certainty prevents and inhibits the human mind from being able to create a legitimate business and improve, innovate and make it even better to provide even more value for people for that. It’s Adam Smith’s invisible hand to be exercised.

It was fascinating and it’s caused me to think about, what is the proper role of government? Is government the best institution to create that system? Maybe, maybe not. It’s created the US property system, but is there a better system? How can governments go from a more loose and subjective system to an even better objective system than what the US has, whether that’s blockchain or otherwise. I think we’re always looking for a more solid foundation, a higher degree of certainty. It’s not conscious, we seek that. It’s caused me to reflect and I asked Dr. Williams a few questions in that regard about the environment and the importance of the environment.

The second thing was I joined the Tony Robbins Platinum Partner Group, which is this membership that you have a couple of separate events that you go to, but you can go to all of his conferences and events. There are typically eight to ten. He does most of them and you get to go to all of those as part of the membership. It’s a huge time commitment, huge financial commitment as well. I pulled the trigger there because I had some experiences that caused me to understand more about myself, what I wanted in life, my relationships and what was holding me back. I decided that I didn’t want it to be an event or an experience that was fleeting. I wanted it to be lasting. That’s why I chose to inundate myself or to immerse myself in that environment for a year.

I’ve been in Amsterdam, Dallas and Las Vegas. I’m going to San Diego and then there are a couple of other events. That immersion is working and it’s allowing me not to drink the Tony Robbins Kool-Aid, but it’s causing me to understand more about myself, more about the importance of psychology and also to value others. Whether it’s those that fit the confirmation bias or those that are a completely different opinion. I think there are so many things that are amazing about Tony Robbins, but it’s not like I believe and in an agreement with 100%. Maybe because of ignorance, it might be because of my experience. Nonetheless, there’s so much value in what he has been able to create as an environment in which people learn and experience that has allowed me to see things.

What’s fascinating about this episode is I did not think he was going to go in the direction that it went. He answered questions from a very interesting standpoint because he’s at a point where he’s not trying to build his career. He’s at a point where I would say people focus more on legacy than they focus on growing and expanding. He’s in his early 80s. He’s isn’t necessarily concerned with an image. I don’t know if he’s ever been concerned with his image. He has taken a stand that is very admirable because it goes against the grain of what the racial norms are as well as with the social norms, the political norms. I think you are going to like this episode. There definitely is so much more that could have asked and expanded upon, but for the sake of time and respect for him, I cut it short and stayed at a very high level. Without further delay, please welcome my guest, Walter Williams.

Dr. Williams, it is an honor to have you on. Thank you so much for your time.

Thank you for inviting me.

I have to say I am somewhat intimidated because I have a great deal of respect for you and what you’ve done throughout your career. It took me a long time to come up with some of these questions. The first thing I wanted to ask you is, if you were to boil down your philosophy about society or human progress, what would you say are the core primary driving principles that you would arrive at?

My stepfather told me when I was a teenager that if you ever want to get somewhere in this life, you’ve got to learn to come early and stay late, which means that you have to work hard to get what you want. If you come early and stay late, you’ll eventually succeed at most things that you’re trying. In a sentence or two, that’s my philosophy.

If you are in a society where there is discrimination, you have to be better than others. Click To Tweet

It’s interesting that it seems we’re innovating to work less. That’s the drive. Do you see that and what would you say to that?

I’m in my 84th year of life, I’ve seen a lot of changes. I see that people are forgiven for doing things and saying things that would not have been forgiven many years ago. Forms of behavior are accepted now that would not have been accepted before. I think that we’re the worst for it. There are all these modern ideas that you shouldn’t scold people, you shouldn’t hold them accountable. You should not punish them for doing the wrong things. You don’t do very much for the individual, that’s not very compassionate at all.

What would you say are the unintended consequences of that?

You have a society of people that are less accountable. I remember when I was about twelve years old, I was shining shoes and I’m making a little money for myself. One of my responsibilities with the money that I was making was to save money, pay for my school lunches, which is $0.15 or $0.25. I adopted the habit of spending my money and then going to my mother Wednesday or Thursday and asked her for a loan. I would always pay her back. One time I asked her for a loan and she said, “No, I’m not going to give you any money.” I thought she was the meanest person on the face of the Earth. It must have been very hard for her to see me come home from school and virtually inhale the refrigerator. I was starving. However, it’s the last time that happened. To bring it up to more modern times, I was telling that to my wife. I have a daughter who’s now 44 years old, but when she was young, I was telling her the same thing. My wife thought I was awful and she could never do that to my daughter.

I definitely see that. I have two teenagers and a five-year-old and it seems that the society we’re in, things are so easy to come by. Answers are at our fingertips. Food is plentiful and it’s conditioned people to want the here and now without doing much work. I think failure comes a lot, not necessarily because something was done wrong but because they didn’t have the persistence to carry it through.

What you’re talking about is the downside of affluence. We have so much wealth. We as parents, we try to give our children what our parents could not ever give us, but we wind up not giving our kids what our parents did give us that is discipline, responsibility and respect for authorities.

My wife grew up in Mexico and it was not a very nice neighborhood at all. It’s one of those stereotypical neighborhoods. That is to the tee what I would say she started out as a parent wanting to provide kids everything that she had dreamed about. There are unintended consequences to that because it forms habits that don’t necessarily serve a human being later in life.

TWS 16 | Principles Of Human Progress

Principles Of Human Progress: If you ever want to get somewhere in this life, you got to learn to come early and stay late.


We see this with our youngsters expecting things to be given to them on a silver spoon. Kid’s graduating from college not knowing very much, but expect to be a vice president first month at doing the job.

It’s the reality that we live in. I look at how you have championed free markets, personal liberty and limited government. I would say that is definitely not the guiding principle that society is using. Where do you see what we’ve been discussing with the mindset and perspective of the rising generation as it relates to the principles that you have championed for so long?

I’m not very optimistic. I hope I’m wrong about not being very optimistic, but if you ask the question, some people have asked me, “What can we do? Where’s our country headed?” I asked people, “Americans as human beings, are we any way different from the Romans, the Spanish, the French and the British?” These are great empires of the past that went down the tubes. They went down the tubes for generally the same thing that we’re doing now, that is bread and circuses. People are expecting the government to take care of them. As a matter of fact, in 1887 at Queen Victoria’s Jubilee, that if someone had said that Great Britain would become a third-rate nation challenged on the high seats by a six-rate nation, Argentina, and almost lose, you would have been put into the insane asylum. It was inconceivable that anything would happen to Great Britain, but however it did. What’s happening in the United States, we’re headed the same way, maybe at a different rate but we’re going down the tubes.

Our basic, big problem that most Americans do not appreciate is that we have a moral problem. The big moral problem that we have as American people is that the average American believes that it’s okay for the United States Congress to forcibly use one American to serve the purposes of another American. That means to take your money and my money to give to farmers, to bail out banks, to get the poor people, to give foreign aid. All the thousands of federal programs, the average American thinks that is okay. That’s not a part of our history. It’s nowhere authorizing the United States Constitution for Congress to be in the business of taking the money of one person and giving to another. As a matter of fact, if I did the same thing privately, I would be condemned as a thief and in prison because that is nothing more than legalized theft.

I’m not making the argument about taxes. We all should pay our share of the constitutionally-mandated functions of the federal government, but there’s nothing in the constitution that authorizes Congress taking the earnings of one person and giving it to another. I’m not saying that I’m not for helping our fellow men in need. I think helping one’s fellow men in need by reaching into one’s own pockets to do so is praiseworthy and laudable. Helping one’s fellow men in need by reaching into somebody else’s pockets to do so I think is worthy of condemnation. For the Christians among us, when God gave Moses the Eighth Commandment saying, “Thou shall not steal,” he probably did not mean thou shall not steal unless you’re going a majority vote in the United States Congress.

I read a quote and I was thinking about it, “Beliefs are a poor substitute for experience.” I look at what you said on the surface, it seems like it is a moral good where people are being taken care of. At the same time, you don’t provide and don’t allow for the actual experience of people to take care of others and be charitable.

The emerging people are the most charitable people on the face of the Earth. That is all these welfare programs did not start until the 1950s or 1960s and maybe a few in the 1930s. We went from a poor nation in 1792 until about 1930s and became the richest nation and the most powerful nation on the face of the Earth without all these programs that people say are necessary. For example, Social Security, people say that is necessary. Social Security system started in 1936. What in the world did we do between 1792 and 1936 to take care of old people? Old people died in the homes of their children. There is something to be said in the Biblical admonition to honor thy mother and father. With
Social Security and all these programs for elderly people, they don’t have to honor their mother and father. They can get somebody else to honor their mother and father through tax code. We have some basic moral problems in our society and I don’t see any cure for them.

If anybody wants to promote wealth and liberty, they should also promote free market economic systems. Click To Tweet

On top of what we’ve been talking about, robbing of experiencing charity, taking, giving and contributing to somebody else’s life for their wellbeing. It also comes down to I would say it’s a drive that we have to overcome adversity. Every movie that is popular out there seems to have a similar theme where somebody overcomes adversity, they overcome a challenge. When you essentially are robbing people from saving for their retirement or robbing people from getting a job and experiencing how to navigate those waters and improve their resume. You’re essentially replacing those experiences with a supplement or a Band-Aid to it. It goes to that saying, “Beliefs are a poor excuse for the actual experience.”

The tragedy cannot be avoided. People tend to think that what we see has always been, and that’s not true. For example, you’re talking about people working. The last time I asked my mother for money, other than in loans for lunches, was when I was twelve years old. I had all kinds of jobs after school and that we live in a Richard Allen housing project, which is part of the slums in North Philadelphia. I did afterschool jobs, shining shoes, shoveling snow with my cousin on the Redding railroad platform and caddying golf courses.

All these work opportunities do not exist now for young people. You’ll never see a thirteen, fourteen-year-old caddying on a golf course. You’ll never see a thirteen, fourteen-year-old kid shoveling snow off train platforms. The railroad workers union does not want to see a kid doing that for $20 when their member can get $200 for doing the same thing. They’re able to use the law to block that opportunity. There are many work opportunities that are gone. The tragedy is that the average person thinks that is always this way. That is the regulations and the behaviors that we see now, the average person thinks, “It’s always been that way.”

I look at my great conversation with my thirteen-year-old and she’s one of the more entrepreneurial, loves always to be active and has wanted to work for so long. She didn’t fathom this idea of a paper route. That’s what I had when I was her age. She has this bug inside of her to work. It’s a process and the experience of doing something and getting remunerated for it. There are lots of tendency for leisure, but it seems that the more we’re progressing as a society, the less fulfilled and happy we are. Do you think it’s because of that dynamic, not being able to have these types of experiences?

I think it’s that and many other things that we just accept. For example, if you look at some of my columns, I give references to it, the behavior of students towards teachers. Students curse out teachers, teachers are assaulted. For example, in the City of Baltimore in 2015, on average, four teachers were assaulted each school day of the year. When I was coming up as a kid, one would not dream of even cursing at a teacher, much less assaulting a teacher. I remember holding my hand out in elementary school for the ruler. I did something wrong and the teacher whacked my hand with a ruler. A teacher doing the same thing now would be fired if not carried off to prison or corporal punishment. People now replace what worked with what sounds good. I remember I got my butt spanked a whole lot. The worst time to get a spanking is in the summertime when the windows are open and when your friends outside can hear you copping a plea. You go outside and they start teasing you. My mother, if she was doing the same thing now, somebody would send Child Protective Services to arrest her.

We could probably spend an hour talking about just accountability and the nature of accountability and how that is essential for growth. Something intrigued me and I know who Hernando de Soto is. I’ve been going through one of his books, The Mystery of Capital. It talks about the infrastructure as an essential piece of establishing capital and having the human mind engage and create the capital, and then exchange with it. I think it’s a byproduct oftentimes of a free market society or laissez-faire capitalistic society. It caused me to think about how the US, the flaws we often give it that there’s such an incredible infrastructure here. It’s made me think through what is the proper role of a government? What is the proper role of establishing these types of fundamental foundational systems of law? Why is it that some countries like the US established that and others don’t?

I think that one of the things that go unappreciated about capitalism is that throughout mankind’s history, the way that people accumulated a vast amount of wealth was through plundering, looting and enslaving their fellow man. With the rise of capitalism, it became possible for people to accumulate great wealth by pleasing or serving their fellow man. Finding out what their fellow man wants or needs, and getting the resources to produce it in the most efficient manner. If you look at wealthy men through history, how did Henry Ford become so wealthy? He produced things that satisfied his fellow men. Bill Gates, how did he become so wealthy? He didn’t rob anybody. He just produced Windows programs that satisfied his fellow men.

TWS 16 | Principles Of Human Progress

The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else

If you look around at the world, and if you were to rank societies according to whether they’re at the free market and of the economic spectrum or the communism of the political-economic spectrum, rank countries according to personal liberties. You rank countries in terms of capital income, you’d find something that’s not strange at all that the countries that are closest to the free market end of the economic spectrum not only have higher income, but they have greater protection of their liberty. The countries that are towards the communists end of the economic spectrum, those are the people who are the poorest in the world and tend to have the fewest freedoms. If anybody wants to promote wealth and liberty, they should also at the same time promote free-market economic systems.

As we end some of your concluding thoughts, where were you most influenced to believe the way that you believe, think the way that you think? What are some of those pivotal experiences that you had, whether it’s reading a book or meeting somebody or a person of influence that caused you to think in a different way?

Being 84 years old, I’m very happy that I got most of my education before it became fashionable for white people to like black people. What I mean by that is that when I got an A grade in a class, it was an honest to God A. When I got a C, it was honest to God C. Nobody is feeling sorry for me. They held me to high standards. They weren’t giving me any breaks because they say, “This is legacy of slavery or discrimination, etc.” They held me up to very high standards. I received my Doctorate in Economics from UCLA and I had some very tenacious professors that didn’t cut me any slack.

When I took the PhD exam, there were sixteen students who took the exam and thirteen flunked. The professors came to me and they say, “Williams, your exam was among the worst, but we think that you can do better.” They gave me reading lists. They gave me this and gave me that. The next time I took the PhD micro exam, I passed it. If I had gone to Harvard or Berkeley, they might have taken into account slavery, discrimination, etc. and given me a break and just pass me anyway. As a result of having gone to UCLA, Harvard or somewhere of these liberal departments, I’m a better economist as a result.

Would you say that there is a correlation between the extremity of the experience and the actual growth? Let’s say as it pertains to an individual. Because of the increased pressure and your ability to rise to that challenge enabled you to learn more, think more, be challenged more and subsequently grow more.

If you look at any sport, football, boxing, basketball. What the coaches talk to these young people playing, they don’t give them any break. They’re not treating them with kid gloves. They’re trying to get the best out of them and that works when people say, “We’re not going to accept any less than the best that you can do.” Fortunately, I had that experience.

Were you born or identify with a level of confidence at an early age, or was it instilled by your parents? Where did that confidence come from, because most people would cave to that and quit, but what allowed you to rise up?

A hard environment allows an individual to dig deep and understand what is possible for themselves. Click To Tweet

My father deserted us when I was three and my sister was two. My mother raised us. She would always tell us, “If you’re number two, you’ve got to do better. You’re in a society where there’s discrimination, you have to be better.” She wasn’t telling us the message that somebody should feel sorry, somebody should give you a break. It was very high expectations. One time when my mother was told how I was misbehaving in school, she took away all of my privileges until the next report card came out and I had improved my grades. That’s tough. She is very important in my life and she’s responsible for setting me up for success.

As a final question, how have you used that, whether it’s with your daughter or your students over the years? How have you created the environment in order for them to grow the most in your presence?

I owe my students up to high expectations. They have to cut the mustard and nothing less is exempted. My daughter is a little bit different because fathers are a little bit weaker with their daughters as opposed to their sons. I was not as pressing with my daughter. Nonetheless, she turned out to be a very good and very successful person.

Dr. Williams, it’s been incredible. Thank you so much for what you’ve written about, what you stood for so many years. What are the ways in which readers can learn more about you and also purchase some of the books that you’ve written or read some of the articles that you’ve published?

There’s a lot of material that I’ve done and it’s on my website, it’s Also, there’s a video made based on my autobiography that I wrote and it’s called Suffer No Fools. That’s a one-hour video and that’s available at my website as well.

Dr. Williams, thank you so much and I appreciate the time. This has been a great conversation.

Thank you for inviting me.

TWS 16 | Principles Of Human Progress

Principles Of Human Progress: Having an environment in which you’re able to be persistent should be an opportunity to celebrate as opposed to be afraid of.


Take care.

I’m going to get into expanding on a few of the things I talked about pre-interview. I hope you liked Walter Williams. If you haven’t heard him speak, he’s one of those guys where you listened to him, you experience him and you immediately know there is a lot of wisdom and experiences over the years that have caused him to reflect and solidify his view of the world. It’s because of the environment he was in, in which he was able to be nurtured and grow. I found it interesting the first response to the question I proposed, which is, “How would you describe your primary driving principles?” If you boiled everything down to all of the things that he’s experienced, read, teaching students, human progress. It was hard work.

I’m not sure if it’s hard work, meaning the time. I think it’s more of the intensity around the work and the persistence, that dynamic as it relates to work. The reason why I say that I’ve talked about the notion of the Second Law of Thermodynamics, which is the idea of entropy. Where when something dies without an environment, it stays the same. With the environment, it determines what it becomes. That goes to the First Law of Thermodynamics, which in large part is that energy can’t be created or destroyed, it essentially transforms. I found it interesting where the environment, the example I used that I heard from Blair Singer was if a tree falls in the forest, it dies. If it stays in the forest, it essentially becomes part of the forest. It decomposes and it becomes food for the other trees and plants.

If a tree falls in a different environment, like when it falls in the swamp, there’s way more pressure than if it fell in the forest. That pressure turns it into something different. The higher degree of pressure in that environment allows for it to become coal and then eventually a diamond. You have one outcome based on an input. Here’s the input of a dead tree. This is the outcome. The environment is what determines that. I think it was interesting because when there’s an environment of pressure, I believe human beings will often rise to the challenge or quit, but if they do rise to the challenge, what they become in the process is incredible.

Having an environment in which you’re able to be persistent, especially as it pertains to an entrepreneur, looking at how difficult something is should be an opportunity to celebrate as opposed to being afraid of. That goes to what I’ve been learning a lot about psychology. Not from a formalized standpoint, but psychology in Tony Robbins’ definition. That psychology is defined as the way in which we create meaning of something. I think psychology as it relates to who we are, in large part, has to do with the environment that we’re either in or have been in.

I think in those environments are often not chosen. That’s where I’m going to speak to. How can you choose your environments and that dynamic versus not choosing an environment and ultimately have it chosen for you? You look at one of the episodes with Andy Tanner talking about this idea of free speech in a difficult environment, which students want to be protected from emotional harm. I think that protection about emotional harm is the greatest harm itself because it enables this crowd effect. Essentially the psychology and perspective are determined by the group and the crowd, not necessarily by the individual. A hard environment allows an individual to dig deep and understand what is possible for themselves.

I believe that as you choose your environments and the higher the pressure is, the more you’re going to grow and the more you’re going to become. This is where it comes down to, why won’t a person choose those difficult environments? I think it boils down to the principle of fear. I look at fear and it’s interesting because what people are afraid of all boils down to the very same thing, which is a feeling of being discarded, a feeling of being worthless, insignificant, not smart, not loved. That fear is often a defense mechanism. It initiates by being judged. I heard a cool definition of judgment that has caused me to reflect on that. The quote is that, “Judgment is a mask that comes from the fear of being vulnerable.” The fear of being vulnerable is that people will see your weaknesses and then not value you, discard, discount you and ultimately not like you, love you or appreciate you. People have this fear of that, which is incredible.

People today replace what works with what sounds good. Click To Tweet

In the end, if you understand those fundamentals, you’re going to realize that it isn’t your problem that someone’s judging you. It’s the person who’s judging’s problem. It’s their fears that are causing them to act that way. The more you understand about yourself and who you are and the meaning that comes from the circumstances of your life, the better you’re going to be able to put yourself in challenging environments in order to grow the most. That’s what I’ve been thinking a lot of and it helped me because I look at how much noise that’s out there in our world. It’s difficult to concentrate and to focus. I believe that within that noise, our chords, there’s this harmonious formula in which we have a better experience of life, but also become successful, which is a part of that fulfilling experience of life.

I’m not sure what each note is of those chords because we all know what noise sounds like. My kids play instruments but going to elementary school orchestra concerts, that’s noise. You’d probably rather listen to something else. I look at then going to a symphony or an orchestra that’s very well-trained professionals. It’s one of the most gratifying experiences. The same instruments, same music but completely different experience because of all of that noise come together in a harmonious way. I think there’s a formula in essence for success, a formula for growth, a formula for fulfillment. I don’t 100% understand it, but that’s what I’m thinking about and seeking. Not just for me, but also for you because I believe human beings are after very similar things. They are after the way something feels. They’re after whatever environment, dynamic or thing gives that sense, emotion and that feeling. I believe that we make it hard to do, which is also funny.

I enjoyed Walter Williams. It caused me to reflect because here’s a guy that has nothing to lose. He’s already made his legacy. He’s written some incredible books. He’s also taught thousands of students and made a difference. He’s at the latter part of his life, and for him to answer the way that he answered the first question was interesting and fascinating. I can see how it led to the success that he had in his industry. I think facing the environment that he was in. He’s an African-American and he is basically cutting against the grain of the liberal agenda, which is often the stereotype of that racial segment of society.

I also look at his views on economics and politics, which is also extremely against the grain. It’s free markets for capitalism. That puts him in a very interesting environment in which he’s probably thought deeply about the important things of life. This is the way in which he decided to answer those questions, which I think should tell us something. I hope you guys learned something from this episode. I’ve got a couple of cool episodes coming down the pipe before we wrap up the season. I hope you’re getting a lot from the show and it’s helping you to be even more successful than you already are. I’ll talk to you next time.

Important Links:

About Dr. Walter E. Williams

TWS 16 | Principles Of Human ProgressBorn in Philadelphia, Pennsylvania, Dr. Walter E. Williams holds a B.A. in economics from California State University, Los Angeles, and M.A. and Ph.D. degrees in economics from UCLA. He also holds a Doctor of Humane Letters from Virginia Union University and Grove City College, Doctor of Laws from Washington and Jefferson College and Doctor Honoris Causa en Ciencias Sociales from Universidad Francisco Marroquin, in Guatemala, where he is also Professor Honorario.

Dr. Williams has served on the faculty of George Mason University in Fairfax, Virginia, as John M. Olin Distinguished Professor of Economics, since 1980; from 1995 to 2001, he served as department chairman. He has also served on the faculties of Los Angeles City College, California State University Los Angeles, and Temple University in Philadelphia, and Grove City College, Grove City, Pa.

Dr. Williams is the author of over 150 publications which have appeared in scholarly journals such as Economic Inquiry, American Economic Review, Georgia Law Review, Journal of Labor Economics, Social Science Quarterly, and Cornell Journal of Law and Public Policy and popular publications such as Newsweek, Ideas on Liberty, National Review, Reader’s Digest, Cato Journal, and Policy Review. He has authored ten books: America: A Minority Viewpoint, The State Against Blacks, which was later made into the PBS documentary “Good Intentions,” All It Takes Is Guts, South Africa’s War Against Capitalism, which was later revised for South African publication, Do the Right Thing: The People’s Economist Speaks, More Liberty Means Less Government, Liberty vs. the Tyranny of Socialism, Up From The Projects: An Autobiography, Race and Economics: How Much Can Be Blamed On Discrimination? and American Contempt for Liberty.

He has made scores of radio and television appearances which include “Nightline,” “Firing Line,” “Face the Nation,” Milton Friedman’s “Free To Choose,” “Crossfire,” “MacNeil/Lehrer,” “Wall Street Week” and was a regular commentator for “Nightly Business Report.” He is also occasional substitute host for the “Rush Limbaugh” show. In addition Dr. Williams writes a nationally syndicated weekly column that is carried by approximately 140 newspapers and several web sites. His most recent documentary is “Suffer No Fools,” shown on PBS stations Fall/Spring 2014/2015, based on Up from the Projects: An Autobiography.

Dr. Williams serves as Emeritus Trustee at Grove City College and the Reason Foundation. He serves as Director for the Chase Foundation and Americans for Prosperity. He also serves on numerous advisory boards including Cato Institute, Landmark Legal Foundation, Institute of Economic Affairs, and Heritage Foundation. Dr. Williams serves as Distinguished Affiliated Scholar at the Mercatus Center at George Mason University.

Dr. Williams has received numerous fellowships and awards including: the 2017 Bradley Prize from the Lynde and Harry Bradley Foudation, the Fund for American Studies David Jones Lifetime Achievement Award, Foundation for Economic Education Adam Smith Award, Hoover Institution National Fellow, Ford Foundation Fellow, Valley Forge Freedoms Foundation George Washington Medal of Honor, Veterans of Foreign Wars U.S. News Media Award, Adam Smith Award, California State University Distinguished Alumnus Award, George Mason University Faculty Member of the Year, and Alpha Kappa Psi Award.

Dr. Williams has participated in numerous debates, conferences and lectures in the United States and abroad. He has frequently given expert testimony before Congressional committees on public policy issues ranging from labor policy to taxation and spending. He is a member of the Mont Pelerin Society, and the American Economic Association.


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Doing Business Your Own Way.. And Succeeding! with Kim Butler

TWS 15 | Doing Business Your Way


Positive influence from significant people can bring a positive impact to your ventures in life and in business. In this episode, Kim Butler, the Founder of Partners for Prosperity and Cofounder of Prosperity Economics Movement, walks us through her experiences in business. Inspired by Dan Sullivan’s Strategic Coach, Kathy Kolbe, and Robert and Kim Kiyosaki, she relates how their guidance and definition of success has given her the freedom to be herself. Shaping your habits can pave the way to shaping your life. Kim says by controlling these habits, you can serve yourself better. Learn more about Kim and be inspired by her journey. Indeed, you can succeed in doing business your own way.

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Doing Business Your Own Way.. And Succeeding! with Kim Butler

Our guest is none other than a good friend of mine. She is my mentor. She is also a financial advisor. We’re part of something called The Prosperity Economics Movement where we essentially train advisors on the principles and strategies that we both practice. Kim was one of the first Rich Dad advisors to Robert Kiyosaki. She’s written a number of books which you can check out on Amazon. By far my most favorite is Busting the Financial Planning Lies, but she’s written several other books as well. She and her husband, Todd Langford, are great friends of mine. We’re business partners and we get to meet every single week. This is a little bit different meeting for Kim and me. She’s an incredible individual. She’s so experienced and she has had a lot of success in her field. I can’t wait for you to meet her if you haven’t heard of her before.

We do have a couple of episodes left if you are tuning in for the first time. We essentially have the show broken into three yearly seasons. We started that in 2018. Go and check out those past episodes. We have been focusing on the principle of entrepreneurship. It’s going to be over soon and I’m going to be announcing the new season, which I’m excited about. We also have some cool guests that will be appearing soon. Make sure you tune into those episodes. Without further ado, I’m going to introduce you to my great friend, Kim Butler.


Kim, it’s awesome to have you on. It’s always a delight for me to talk to you. We are part of a few different initiatives and businesses. At the same time, we don’t get a lot of time to speak on some of these higher-level borderline esoteric things such as what our theme, which is entrepreneurship. You have extensive experience and it’s interesting especially as we’ve come to know each other better where the business is such a fun and dynamic thing that keeps the entrepreneurial spirit alive for a long time. Most business owners and entrepreneurs don’t get the experience that you do because you have been heavily inspired by Dan Sullivan’s Strategic Coach, not only as a student but also as a teacher and mentor. There’s something about being able to teach principles and teach about certain concepts, especially as it relates to a business that starts to become part of you, your nervous system, your emo, how you’re wired, how you respond to certain things versus react to certain things. Walk everyone through your experience in business and what are the events that shaped the way you look at it. Define how you look at it first and then talk about the events that helped to shape that and continue to shape it. 

You do know we have to start with fourth-grade in milking a cow. My parents bought me a cow to milk and I sold the milk. From fourth grade all the way through twelfth grade, I earned a lot of money enough to put myself through a private college for four years. That entrepreneurial experience shaped how I think and how I look at things. My parents are not entrepreneurs and yet they were. They were teachers and principals of schools. They had a farm and they certainly saw the value of forage and teaching me and Tammi, my sister, all of the good that goes with building a business. 

They gave you this experience. They didn’t necessarily give it to you based on their experience in it. It was more to provide you with an environment and an experience. What do you think was the cause of that? Have you ever asked them like, “Why did you buy me the cow? Why did you let me do this and sell this and go to forage and continue to support that?” I’m assuming, there was some support on their end for you to do the business. 

Mindset determines 99% of the deal. Click To Tweet

In the early stages, there had to be a lot of support because of the nature of it. A fourth-grader is a pretty small human being and a cow is a big animal. My dad was a farmer and a forager as a child. He very much wanted Tammi and me to have that experience and we have talked about it. It’s been a while but I definitely know the story. He wanted us to learn business principles. You and I know and talk about how important principles are and how reflective they are in all of our lives if we can just pick up on something that teaches principles. Because when we have good solid principles, they impact our entire life and that’s what he wanted us to learn. 

Now you may be graduated from school when you left home and how your experiences to get into the business that you’re in and to become part of Coach. Describe some of the experiences in which you were able to take what you learned growing up and apply that to that next phase or next level. 

There’s an important detour that I took that I’m almost a little embarrassed about, but I want to share it because it has such an important message. After graduating from college, I did not want to be involved in sales in any way. 

Why is that? 

How sad that is because entrepreneurship, frankly just being human requires selling. 

TWS 15 | Doing Business Your Way

Doing Business Your Way: Good solid principles impact our entire lives.


You sold milk. 

I know, as I said, I’m embarrassed by it. You ask why? I don’t know why. I don’t have a good answer for that. I did go to a liberal arts school, but I don’t think that was it. Something in my experience turned my perspective and maybe it’s because I didn’t know any better. I’m not sure. I remember very clearly that I wanted a job in management. I didn’t want a job in sales. Yet one of my favorite books now is by Daniel Pink and it is To Sell Is Human and it is. It’s something that we do every day. We sell ourselves on our own ideas. We sell others on things that we want to be done. We sell our family on where we want to go to dinner that night. We’re selling but for whatever reason, I had this bizarre detour. 

Most people have that and I don’t want to go into the psychology of it because I’ve thought the same thing and felt the same thing. At the same time, there are some principles behind providing some products or services that inspire you through that awkwardness. I don’t want to go on that tangent necessarily. Go to ways in which you overcame that and then maybe transition to how you became involved with Rich Dad and then going into Coach from there. 

Very quickly in my first corporate job, I did realize that in order for a business to make progress and a profit, selling was necessary. While I did have three years as an employee, I very quickly realized that the ability to get results, to get paid for my results instead of my time and effort, that is a Dan Sullivan thing, to cross over the risk line from time and effort to results was absolutely necessary. Fast forward a little bit to continue to address some of your questions on the entrepreneur side, getting involved with Robert Kiyosaki and Kim Kiyosaki and their perspective. Also right around the same time getting involved with Dan Sullivan and Strategic Coach and his perspective and also at that same time getting involved with Kathy Kolbe and her perspective. You certainly have your Kolbe profile and know the value of the Kolbe profile, which indicates how you get results. 

You put all of that together and I became a very focused, very onpoint person/entrepreneur as it related to my passion that I think did start way back in fourth grade and that was money. I loved personal finance. I loved money. I loved making money. I loved all of the aspects of money and how it flows through economies, both nationwide, worldwide and also down on the small side to our own personal level. All of these things contributed to that. An entrepreneurial environment with money, those two things go hand-in-hand and the good that can be created from understanding principles that relate not only to one’s personal economy but also to any business that you’re going to operate. 

Our businesses are either growing or dying. There is no such thing as maintenance. Click To Tweet

It sounds like you had three events, Rich Dad, Strategic Coach and Kolbe all at once and then everything from that point forward was complete euphoria, wasn’t it? Walk us through what happened from there at a high-level and how the principles that you were learning, identified or clarified and then reinforced and then became part of how you started to operate differently. 

What was very gratifying now that I can look back on it is the various things that I was involved with were all sending the same message. As an example, I had always been working on what I now call typical financial planning. This is the early ‘90s for about five years. I had a nice practice. I was very good at it and yet I wanted more, which got me to Strategic Coach. I had always been working on typical financial planning and yet I wanted more. That led me to a conversation with Robert and Kim who at that point, Rich Dad Poor Dad book wasn’t even out yet. It was a conversation and yet it was a reinforcement of principles because I had started to learn from a lot of my other real estate clients. Robert at that point was another real estate client that there were fundamental personal financial principles that I was not being taught in typical financial planning with the designations that I had and the training that I was going through. I knew that these principles existed because I had worked in that entrepreneurial world for so long.  

As I joined Coach and at this point, I was a student of Coach and I still am. I still attend every 90 days and yet I hadn’t started coaching at this point. As I’m learning from other entrepreneurs and other real estate investors in my own what was at the time a face-to-face practice, these entrepreneurial principles align with these financial principles in very clear categories on one side of the table. The more typical financial planning type thought process, I don’t even want to use the word principles in the typical financial planning space, aligned more with the corporate employee world that I did not want to be a part of. There was a very clear division there and thankfully everything that I was doing was supporting that more entrepreneurial principle-based, as we use the term now, prosperity economics. Because of Coach, I was led to coin some of the words like prosperity economics to identify some of those principles and then everything else did support it. Yet there are still challenges because as you know now, you and I spend every day fighting the battle of Wall Street, the banks and corporations and the typical financial planning message that is so prevalent in our society. 

Think about it, you’ve hit on a couple of things which are going through my mind. One, in particular, is the idea of what you were driven to do as a result of your college education, which is, “I want to become a manager.” I don’t know if kids wake up and say, “I want to become a manager of something.” I look at how our school systems are run, I look at how society is run, I look at how most corporate businesses are run. It’s very hierarchical and also there are managerial principles there. You’ve seen a lot of decay in that world in a lot of different respects. It has become so ingrained in us based on the different stages of our life that it followed a very similar structure. Whether it’s an elementary school, middle school, high school, K12, then you get into college. You’re taught to do things this very methodical way. Go to school, get a job, get a degree, get another job, go up the corporate ladder and get benefits.  

There are always these boxes to check in order to achieve success. Most people check all the boxes and are suddenly like, “This is not what I thought it was going to be.” A lot of people are realizing that the corporate world is changing. It’s so ingrained in us to think a certain way that when there is a different idea such as prosperity, economics, doing things in a different way or just because it’s different, it makes people concerned and ultimately feel threatened to an extent where you’re challenging the status quo. 

TWS 15 | Doing Business Your Way

Doing Business Your Way: Coaching is cool because you get to share wisdom with other entrepreneurs who then share with their employees and families.


It’s been interesting for us to have that experience together because a lot of the work that we do together is with financial advisors. They are now taking what they have given as advice and suddenly being in the position to say, “I probably shouldn’t have done that.” Because of saving face, reputation and identity, they have a challenge in shifting gears. With business, let’s go back to that. When you look at business, business is always evolving. It’s an infinite game as we talk about, the way in which a business is run or an entrepreneur sets his vision and establishes a business and carries forward that message. Tomorrow and next week and next year, things adjust. You being involved in Coach for the many years. I don’t know where you’re at right now. What has been your experience in seeing the different types of economies and different shifts and how entrepreneurs and businesses have essentially either succeeded or failed and why? 

One of the singular messages that I love that comes from Dan Sullivan and down to all of the entrepreneurs everywhere. One of the cool things about coaches is that you get to share so much wisdom with entrepreneurs, which then get to share that wisdom with their employees and their families. That is the importance of mindset, especially as it relates to what’s going on in the economy with which your business is operating and what you can and cannot control. The overriding message and this was super clear in the 2008, 2009 era. I believe it was also clear in whatever the recession was before that, I don’t remember the exact years. 

That’s the early 2000s. 

It is that you don’t have to participate. You as an entrepreneur, like your family, as an individual, as a salesperson, even as an employee do not have to participate in whatever the recession/thing that’s going on in that larger economy. People hear that and think, “I’m stuck. I don’t have a choice.” I have fallen subject to that same mindset. There are times I forget that I do not have to participate in whatever is going on out in the mindset of the economy and the actions of the economy. You and I’ve had conversations that I’ve gotten off the phone and thought, “Here I was in scarcity mode talking with somebody that’s important about whatever it was that I was afraid of at the time.” I too forgot that I do not have to participate in whatever the mental climate is of the worldwide economy, the nationwide economy, even down to the state and my personal businesses, which then affect my personal finances economy. Overriding principle if you will, message if you will, that individuals can focus on the one thing that they can control, which is their mindset. That mindset determines 99% of the deal. 

In the end, it’s what everyone is essentially looking for, a mindset. The material world has to be aligned in a certain way in order to achieve that which is interesting. It plays into what we were talking about before, which is that’s how we’re wired. That’s what we’ve come to believe collectively. There are a lot of individuals that are writing and talking about very similar things because there is an aspect of the future that you can probably predict, but there’s so many that you can’t. All that exists is right now. Talk about, as you’ve experienced other entrepreneurs, their businesses and Strategic Coach covers an array of different businesses and industries and even countries. How have you shaped your business and your life based on what you’ve learned and/or taught? 

You don’t have to do business the same way that everybody else is doing business. Click To Tweet

The ability to work virtually as in over the phone on the web, but also with the capability that it comes with. For example, flexibility around hours and physical space, etc., that’s something that many strategic coach entrepreneurs are pursuing and loving. The internet was a big part of that and the realization that you don’t have to do business the same way that everybody else is doing business. Strategic Coach and my Kolbe profile gave me the freedom to be myself. Kathy’s definition of success is the freedom to be yourself. The vision is to realize early on the creation of the internet and the capability that it enabled to be able to work that way. Strategic Coach is giving you the support that you can do it, go for it, think big, think differently and get different results accordingly. 

As I look at the other entrepreneurs inside Coach, there are under 60 some different industries in there and the ones that are doing the best are creating the businesses on their own terms. They’re building the teams around their own vision of what they feel like their business is capable of, regardless of what their industry is doing, regardless of what other businesses like theirs are doing or regardless of what the accountant says should be done. They’re basing it off vision and a set of principles that may be different than our principles, but their own set of principles and their own skills and talents identified sometimes by Kolbe and other profiles out there that help them do that. It enables them to love their work and to have worked not be so all-consuming 24/7 like you might think is happening in a virtual firm, but to have it limited within a particular window so that love is getting the top skill and capability of an entrepreneur. That entrepreneur’s family and church community and whatever else is involved with are also getting the top skill of that entrepreneur. 

There’s been this gravitation going from working to live versus living to work. It’s interesting where these up and coming generations, Millennials and even the generations after that have figured out ways in which to do things differently and more efficiently. Ultimately, it comes down to the experience of life. In the end, that’s what everyone is looking for. They’re looking for a sense of happiness, a sense of fulfillment. I think work is a part of that. At the same time, if they’re connecting that all happiness, fulfillment, success comes from work, then that’s not necessarily the most principled way to look at it based on the experiences that I’m sure that you’ve had over the course of time. That’s where you look at in our day and age and what exists as a possibility when it comes to designing your life and designing the rules for that. 

There’s something that Andy Tanner had taught me regarding getting to where you want to go with whatever successes, however, you define success. There’s where you’re at and there’s where you want to be. There are usually two variables that prevent you from getting there. It’s ignorance or discipline, but then I threw another one at him, which is most people don’t know where they’re going. They don’t know what that end result is. They haven’t written their rules are defined, “This is what I want, this is the lifestyle I want to live, this is where I want to live,” and then figuring out a way is the gap, ignorance or is the gap, discipline? Ignorance means do you have the knowledge? If you don’t have the knowledge like, the knowledge is there. What is available at our fingertips possesses pretty much all the knowledge you need in order to make that a reality, but then it comes down to discipline. 

I look at discipline as one of those main variables that prevent a person from living a fulfilling life, which is being able to identify that they have a specific makeup and structure of their nervous system, of their belief system. How that dictates the direction of their life and having to replace a lot of those beliefs and replace them with new beliefs and then being disciplined to execute. It’s interesting where you’ve been able to do that. That’s what I’ve respected about you and Todd for so long. You’ve said this is the life I want to live. This is where I want to live. You live in a beautiful location in Texas. When I first walked into your house, I was like, “That’s Kim, that’s Todd and that might be a combination of Kim and Todd.” You’ve designed your life and that’s so admirable. Talk about whether I’m off or on there and then what are you focused on right now to continue to shape this life and shape your business. 

TWS 15 | Doing Business Your Way

Doing Business Your Way: We are in the habit of controlling our thinking.


Thank you for the compliment. It’s super cool that you can see that in our home, which is our business also. In answer to your question, what’s interesting to me about discipline is and I’ll quote Dan Sullivan again, “It’s more to me about habits than it is about discipline.” The Dan Sullivan quote is, “You are 100% disciplined to your current set of habits.” I look at my habits a lot and as you know, we are in the habits of controlling our thinking. Whether you are doing a lot of that or a little of that, that’s having an impact. We have certain habits about how we eat. Good or bad habits, they’re habits. What are you doing around that area? Certain habits around what kind of input we have to our thinking. For example, Todd and I choose not to watch TV because we do not care what that input is. 

We watch movies but not TV, there’s an important distinction there. The controlling of habits is something that we can all do and look at our habits and how they’re serving us. To pick up on your second question more about the vision is something that Todd and I are adamant about and we talk about it more and more every day. It’s that human beings or business owners cannot coast. There is no such thing as maintenance. I’ll give you an example on the physical side. I’ve worked with a personal trainer for many years. She’s the same gal and we do our work now over the web because she still lives in Arizona. At some point in our relationship, I said, “I’m good. I just want to maintain.” I want to be in maintenance mode with my weights and my cardio. That didn’t work. You can’t maintain. There is no such thing as coasting. You are either growing or you are dying. That might be abrupt language but I fully believe that it’s that big of a dichotomy and that we need to be focused on growth. 

One of the questions that Todd asked me when we first started dating is, “What are you all about?” Without even thinking the word “growth” came out of my mouth. It’s something that we are very conscious of. Our businesses are either growing or dying. There is no such thing as maintenance. Our lives, our mindset, our spiritual approach, our inspirational if that works better for people, our work, everything is either growing or dying. That vision is part of that growth and a vision is very different than a goal. A goal is specific and measurable. We can achieve it, it has a timeframe and it’s realistic. A vision is out there a little bit more in the future, a little fuzzier. Yet to me, it’s that vision that I’m always striving for. Goals too but I prefer to focus on the vision. 

I was thinking about something and it plays right into what you’ve been talking about. I’ve mentioned this to you before. Blair Singer, another Rich Dad advisor, he explained at one of his events the Second Law of Thermodynamics, which is the idea of entropy. The theory states that if you completely remove a system from the environment, it doesn’t die. There is no system without an environment that exists. The environment is going to dictate going from one stage to another stage. He explains it as the higher the pressure of that environment, the more success is going to come out on the outside or growth or enhancement. 

He explains it with if a tree falls in the forest, what will it become? It will become part of the forest. It will become the food for the trees or whatever. If a tree falls in a different environment and goes from one stage of life to the next, if it falls into a swamp per se, where there are lots of pressure and organisms. A lot more is going on than if it fell into the forest, then it becomes over the course of time, coal and then it becomes a diamond. It shifts to different elements, a much different outcome than if it fell in the forest. The idea is, from what you’re saying, we live in an environment. We can’t control that.  

Vision is part of growth and it is very different than a goal. A goal is specific and measurable. Click To Tweet

The environment that we live in requires growth. Things are growing, they’re dying and they’re taking different stages. When it comes to our life, there’s a lot of similarity and parallel where the environment is going to dictate where we’re at the next level. If it’s the same environment that exists right now, then as we go into different stages, it’s going to be the same and there’s going to be such a lack of fulfillment there. I’ve correlated to the best thing that you can do in order to achieve different results is put yourself in different environments and the environments which are conducive to the growth that you want. 

Sometimes that means being uncomfortable. 

It always means being uncomfortable and maybe not because it’s friction. Friction is where all the opportunity exists. That’s another principle, the more pressure, the better the outcome in the end. Kim, this has been awesome. Thank you for sharing your wisdom. I was excited about this conversation. It was perfect. Why don’t you tell our audience, if they’re not already following you, where they can pick up some of your books, how they can follow you on social media and pay attention to what you’re up to? 

TWS 15 | Doing Business Your WayThank you for that. The best place I do believe is our main website We do have a podcast called The Prosperity Podcast. We have quite a few books on Amazon as well. Lookup for Kim Butler as the author and you can track those down. We have a social media presence primarily on Facebook and LinkedIn. I love what is available in the blog and the podcast, because those are able to go a little bit more in-depth. I do believe that sometimes social media is a little too sound bite-ish. I encourage people to dig in. 

Kim, thank you again. It’s been such a pleasure.  

I’m happy to do it, Patrick. Thank you. 

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About Kim Butler

TWS 15 | Doing Business Your WayKim Butler is the founder of Partners for Prosperity and Co-founder of Prosperity Economics Movement. She is the host of The Prosperity Podcast; author of the bestselling books Live Your Life Insurance: An Age-Old Approach Revitalized, Live Your Life Insurance: Surprising Strategies to Build Lifelong Prosperity with Your Whole Life Policy, and the new book Busting the Real Estate Investing Lies: Build Wealth the Smart Way: Through the Most Time-Tested, Least Volatile Path to Financial Freedom.


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A Conversation Around Politics, Entrepreneurship, And The Dynamics Of Capitalism with Peter Wehner

TWS 14 | Dynamics Of Capitalism


Capitalism is the greatest economic system in human history because it’s lifted more people out of poverty than any system in human history and allowed for the conditions for great human flourishing and great technological advancements. This is according to Peter Wehner, a New York Times contributing Op-Ed writer covering American politics and conservative thought and a popular media commentator on politics. Wehner is also a veteran of three White House administrations and author of the books Wealth and Justice, The Morality of Democratic Capitalism, and The Death of Politics. In this episode, he dives into the aspects and dynamics of capitalism.

Watch the episode here:

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A Conversation Around Politics, Entrepreneurship, And The Dynamics Of Capitalism with Peter Wehner

My guest is incredible. Probably the best top three interviews I’ve had. We are talking about entrepreneurship, but we also weave in capitalism. We talk about a lot of what the theme was in 2018, life, liberty and property. It was awesome to talk to this individual. He is super intelligent and very distinguished. Peter Wehner is my guest and he is a Senior Fellow at the Ethics and Public Policy Center. He also is a contributing editor at the Atlantic Magazine. He is also a contributing columnist for the New York Times. He is the former Director of the White House Office of Strategic Initiatives and Senior Advisor to President George W. Bush. He has authored a few books, Wealth and Justice: The Morality of Democratic Capitalism and The Death of Politics. Welcome, Peter. It is amazing to have you on. I’m excited about this conversation and to talk to you about your book as well as some of the things that you’ve been preaching.

Thanks for having me on. It’s a pleasure to be with you.

I talked to you a little bit about what we’ve been doing, which is focusing on the topics that include life, liberty, property from some of John Locke’s writings. As well as what capitalism is, entrepreneurship, and the framework where most people want to be a part of. Not necessarily just in the US but around the world. I look at what you’ve written about and understood it for quite some time studying and looking at where our society is and what has made us successful versus other nations perhaps. How have you come to understand capitalism in general and the aspects and dynamics of capitalism?

My belief is that capitalism is the greatest economic system in human history because it has lifted more people out of poverty than any system in human history and allowed for the conditions for great human flourishing and great technological advancements. Capitalism unmitigated and unrestrained has some problems. Part of what democracies and free societies have to do is to soften some of the rougher edges of that. That’s a prudential judgment. What does that mean? What programs have to be done to do that? You have to weigh the costs and benefits in terms of the effects on economic growth and all the rest.

It’s my belief that capitalism works because it’s most consistent with human nature. I’m a big believer in the idea that you have to confirm your economic and political systems to certain realities about human nature. I think capitalism accords to that and aligns with that. It understands as Adam Smith talked about what selfishness rightly understood is. You have to take into account what drives and motivates people that you can’t believe simply altruism, even though altruism is a part of human life and human experience. People act in ways that advance their self-interest rightly understood. You have to create certain incentives that will lead human beings to act in the ways that are both expected of them but also advances the common good.

I think the American understanding of capitalism, by and large, is the right one. Limited government entrepreneurship, free markets, skepticism about the ability of the centralized government to dictate decisions and believe that it has the capacity to anticipate and direct all aspects of human life. It has improved and right. There’s an epistemological modesty that capitalism understands, which is that you can’t get a small group of very bright people who can run economies. The way that economies work best is letting people by and large to be free to act in ways that want to act.

Let me go into two things that you had said because I find this interesting. It sounds like there’s this altruistic pull of human beings to be charitable to help others, to contribute, give back. There’s also this invisible hand, maybe more self-interested. It seems like those two things are pulling against each other. Are they mutually exclusive or is it may be a mischaracterization of those two concepts?

I don’t think of them as mutually exclusive. I think that they can be complementary. They’re distinct and they’re part of human nature. Think about your own life, the lives of your friends and your family, you probably see both of those elements in them. There are times in which you see altruism, self-sacrifice, selflessness, acts of charity, sympathy and compassion. Those things are real and they exist. They should be encouraged where they can. On the other hand, all of us act in our self-interest as well. That’s the way we’re designed. That’s the way that we operate. Most of life is acting in our self-interest provided that it doesn’t run over the rights of other people, and none of us are completely selfless, self-giving, completely compassionate and completely sympathetic. You have to take that into account.

The way that economies work best is by letting people be free to act in ways that they want to act. Click To Tweet

That’s not a bad thing as long as it’s channeled in the right way. The trick here is to try and take those human realities and direct them in a way that advances the common good. The founders understood this. Their view of human nature was correct, which is that people are capable of virtue and nobility but also acts of recklessness, irresponsibility and evil. You have to take both of those things into account. My own sense, I’m a person of the Christian faith. The Christian understanding of human nature is essentially correct. It’s that too, which is the advice and virtue are intermingled in people’s lives and in people’s hearts. It’s a complicated mix. People in different seasons in life lean in more of one direction than another. The challenge in individual lives, as well as a society, is to try and emphasize, give force and power to the higher things and to mitigate the lower things.

I do want to hit on a few of the things you said. Go to this idea of central powers dictating what people should do or taking care of them is the banner sometimes in which central governances is looked to as a virtue. What is it about that structure that people don’t end up liking? The ideal side of things that they push through or talk about sometimes is intriguing. I see why they would appeal to people, but when it comes down to it, why do people kick against that? Why does that impede human progress or does it?

Let’s take facts and circumstances. Sometimes when the centralized government, the national government who’s acted is advanced, great good, and sometimes, often it’s done the opposite. I’m somebody who believes in limited government and is wary of centralized government. I’m a lifelong conservative. That’s what’s shaped my beliefs in part because the way I understand conservatism is that it’s based very much on the human experience. It’s a negation of ideology, Russell Kirk and others have said. You have to take into account what works for the human condition. I’d say that there are several reasons for it in terms of why one is skeptical with centralized power. One is simply on the efficacy standpoint. Peter Schuck wrote a book about why government fails. He refers to himself in the book as a militant moderate.

He’s not an ideological person, but he’s an empirical look at what it is about a large government that doesn’t work very often, that fails where the efficiency is not what it ought to be. Anybody who’s worked there, if they’re honest, would concede that fact. How often these grand promises and hopes that are sincere and don’t translate into reality. I think you could look at much of the great society and see that. Even programs which have done some good but have also are themselves extremely inefficient like Medicare and Medicaid. I wouldn’t argue that no good comes out of them. I don’t think that’s sustainable, but those programs are not nearly as efficient as they could be.

TWS 14 | Dynamics Of Capitalism

Dynamics Of Capitalism: Most of life is acting in our self-interest provided that it doesn’t run over the rights of other people.


I’d say the inefficiency and lack of efficacy for centralized government is something that we need to be alert to. There’s the concern that the founders themselves had and many others who had, which is when you centralize power, there’s the danger of authoritarianism and even totalitarianism. That as the old maximum goes, power corrupts and absolute power corrupts. We’ve seen time after time that when people get a tremendous amount of power, when it’s unchecked and it’s on challenged, that can lead to some very bad conditions and situations. That was the worry of the founders. That’s the reason that they set up our system of government of checks, balances, and separation of powers because what they wanted was not an efficient government. They wanted a government that protected against tyranny.

I think that’s a second reason that people need to be wary about centralized government. The third reason is that if you go back and you read Adam Smith in a certain way and probably more specifically this idea about which is that there’s this mythology among Progressives, which is that if you get a group of wise men, wise women, they can oversee, conduct, and determine how human society can act and all realms that simply isn’t possible. They can’t do it. There are so many imponderables in lives, so many contingencies in life that the idea that a centralized state or a group of individuals would be able to make those judgments. I just don’t think works.

The fourth thing I’d say is George Will, a marvelous book that he wrote called The Conservative Sensibility writes about the American founding. He says, “That’s essentially what conservative’s need to conserve.” which is the idea of inalienable rights. Natural rights, rights that precede government. His argument and I think it’s a valid point that government, if it gets too large, too centralized, can undermine those natural rights. He makes the case in a pretty persuasive way that the belief in natural rights would tend to lead one toward a more limited government.

Let’s go to your book because you look at the idea of capitalism and just the word itself formulates a specific reaction in people as far as my experience is concerned. It’s not necessarily based on logic and thought through education debate where a person comes to an understanding. It’s more based on what has been heard. What society believes about that word? Talk about your best-selling book, Wealth and Justice: The Morality of Democratic Capitalism and weave that into the conversation. Talking about how that can essentially be a message that will hit on the principles that make capitalism good for society as opposed to what most people react to, which is that it exploits people and takes advantage of people. It’s all about the wealthy and them getting their own.

People are capable of virtue and nobility, but also acts of recklessness, irresponsibility, and evil. Click To Tweet

I coauthor it. It’s a monograph of the American Enterprise Institute with Arthur Brooks, who was for many years President of an American Enterprise Institute. He left to take a professorship at Harvard. Arthur is very good in a very sober and thoughtful voice on this thing. We wrote this book and the situation is more acute than it was when we wrote it. One of our concerns was Americans in general and particularly young Americans were losing faith in capitalism as a system. We see that in polls, and you’re probably more familiar with them than I am. The support for socialism is higher than at any time in my lifetime, probably higher than at any point since the early part of the twentieth century.

You see this in contemporary politics with the Democratic Party who are two of the hottest political figures in democratic politics, Bernie Sanders and Alexandria Ocasio-Cortez. They’re both self-proclaimed democratic socialists. If you watch the democratic debates, you see Bernie Sanders and Elizabeth Warren essentially taking an anti-private enterprise stance. There’s almost a reflexive hostility to anything having to do with capitalism or corporations. It doesn’t mean that those certain corporations don’t deserve criticism, but it’s a reflex. You’ve seen this rise in respect and to some of the enthusiasm for socialism and the decline in competence and capitalism. That’s a problem. Some of that is undoubtedly a result of the great in 2008. I think that the income gap between the most wealthy and the rest of the society probably had more of an effect on the general public than a lot of people on the right thought that it would.

It seems to have permeated society and the belief that the very rich are making out like bandits, the rest of us are not and so much of the gains in wealth, money from the market, that has happened. We’ve had wage stagnation from pretty much the entire part of the 21st century. Wages had been much flatter and it’s a complicated set of reasons for why that’s happened. I wouldn’t blame that on any single president. Certain deep trends are in play here, which I’m guessing you’ve covered. There seems to be a lack of faith in capitalism. That’s given rise to populism, which I’m wary about as a conservative. I think populism can often be antithetical to capitalism and it can be antithetical to reason itself.

I think it first goes to reason because I would say there’s less reason. It may be the delusion of information that’s all around us and individuals who can’t fit anything else into their head. Therefore they take the efficient approach and leverage the belief system of someone they feel is like them. It’s interesting to see how society has been wired to think a certain way and it’s not necessarily the beliefs associated with reason, debate and personal individual understanding. Its group thinking dictated by very persuasive people like your AOC and Bernie Sanders.

TWS 14 | Dynamics Of Capitalism

Dynamics Of Capitalism: It’s important for the defenders of capitalism and free-market to make those arguments and not to be dismissive toward the critics.


I think that’s right. There’s a rage at the system, the establishment of healing. It’s almost a quasi-nihilism. You see this toward capitalism and the politics in general, which is this idea that we have to burn down the village to save it. Things couldn’t be worse. Let’s just toss the whole thing aside. That’s what explains in part of the rise of Donald Trump. I’ve been a very strong and persistent critic of Donald Trump in large part on conservative grounds. What he tapped into is a sense that people wanted a wrecking ball to come in and shatter things. That’s deeply anti-conservative impulse, but he tapped into it effectively.

I’ve told friends of mine who were pro-capitalism and pro-free-market as I am. It is important to do a study or set of studies to understand what happened. What explains the loss of faith in capitalism, the rise in affinity for socialism. Both attitudes and specific episodes and incidents that explain it to understand in a thoughtful way what is driving it. What are the attitudes? What is associated with free-market and capitalism and to think through how do we tell the story? What’s the narrative? What’s the tale we have to tell to remind people why capitalism is a system that has brought so much human flourishing and then so much to encourage human dignity?

I think it was Orwell who said that the first duty of a responsible man is a restatement of the obvious. Sometimes you have to restate what’s obvious or what you thought was obvious. I’ve noticed this in life, in politics, and in economics and all sorts of realms, which is sometimes people forget to make the arguments in some fundamental way. Why is it that we believe what we believe? That’s understandable. You think that certain victories are one, that arguments are settled and you just act on that assumption. Sometimes without quite realizing it, the floor breaks and all of a sudden, that confidence that people had or that understanding those shared assumptions are gone.

I think when it comes to capitalism, it’s quite important for people who are defenders of capitalism and free-market to make those arguments. Not to be dismissive toward the critics, not to laugh at them, not to say these ideas are stupid. Therefore, it shouldn’t be repudiated. Don’t even engage in name-calling, just say socialist and hope that is enough. We have to do more fundamental work to make the case again, and in a sense to win the hearts of ordinary Americans. To explain to them why capitalism is an economic system worthy of their loyalty.

No matter how strong your argument is, it's never as strong as you think it is. Click To Tweet

Let me use some way to abstract of an example as you may use to. There is a documentary that I saw called Behind The Curve. It was essentially about this millions of people that came together stating that the world is flat. That documentary was done by a non-flat-earther. It was interesting because he took this approach and it’s a very irrational thought, but yet millions of people were gravitating toward this. It was all driven by this emotional desire that they have to fit in within a group. Usually, a group of people that don’t believe what everybody else believes. What’s fascinating to the point you just made is the individual who was doing the documentary, they interviewed astrophysicists. They were saying, “Do you know that there’s this group out there, millions of people that believe the earth is flat?”

It’s fascinating because it takes you through this psychological urge of what I think you’re speaking to because the astrophysicists in the end said that, “These people don’t know what we know, so we can’t assume that they do and make an argument from that standpoint.” You have to meet them where they’re at and why they’ve come to that conclusion. If you start to make them wrong or make them feel stupid, it’s just going to strengthen their argument. That fits within the confines of what you’ve been talking about.

That’s a very interesting observation. I’m intrigued. I like to see that documentary. That whole area does fascinate me, I must say. I don’t know if you’re familiar with the work of Jonathan Haidt, who is a marvelous moral psychologist. He used to be at the University of Virginia. He’s now at NYU. He wrote a book called The Righteous Mind. He spends a lot of time with a group called Heterodoxy, which is an effort to defend free speech on campuses against speech codes and so forth. Jonathan himself has been on an interesting journey and interesting pilgrimage. He started out as a traditional person who laughed at Progressive and is much more of a centrist. In part because of what his research has taught him. I’ve learned a lot. He’s a very intelligent, thoughtful guy and a very good guy as well.

His work on confirmation bias and motivated reasoning is outstanding. I’ve learned a lot from it and it goes to the point that you’re making. I think a lot of us believe that the positions others hold and that we hold are derived through some disinterested analysis of the facts, reasoning, and that reasoning has brought us to what we believe, free of emotion and all the rest. What we know about brain science and human nature, the more we’re looking into these things. It is so much of what we believe is a product of transrational or subrational forces. We have dispositions, tropisms, and predilections were products of our families of origin, our life experience, the people we’re around, and the communities we’re a part of.

TWS 14 | Dynamics Of Capitalism

Dynamics Of Capitalism: There is a chance to get some deeper understanding when people feel safe and when they feel heard.


That sense of fitting in with communities is extremely strong. We know from brain science that when you get information that confirms what you already believe, it’s a dopamine effect or rush. On the flip side, when there’s information that challenges certain basic assumptions, your brain puts up often a shield to block those things out. It’s genuinely uncomfortable for people to hear information that challenges them. I’d say in my own life, politics and just human relationships, that’s one area where I’ve changed. In the past when I would have differences with people, I would often write long emails, fact base, point-by-point. People who know me would think I was built to respond to some of these issues in terms of debating. Empirical evidence, premise facts to support it, conclusion.

What I’ve discovered is no matter how strong your argument is and it’s never as strong as you think it is. Let’s just assume for the sake of argument. You and I were having a debate. The case I presented against you was overwhelming by any objective standard. The odds are not only that, you wouldn’t change your position if I overwhelmed your case. You would probably, as you were indicating, dig your heels and more. It’s quite rare to shift people. I’ve seen this in theology, in the world of Christianity, in the world of politics and all sorts of world. Where there is a chance to get some deeper understanding is when people feel safe, when they feel heard. When they believe that you know their arguments and at least can state them and understand them even if you disagree with them. If there are a human connection and a human relationship, if you have in a sense standing in somebody else’s life and that will allow them to let you in and to make their case, and vice versa.

Alan Jacobs, who is a professor at Baylor used to be at Wheaton, wrote a book called How to Think. He refers to a foundation that when they conduct debates, the first thing that they require is that the people are debating. Person A states the position of person B in such a fair-minded way that person B believes that it is a fair restatement of their views and vice versa. That is the precondition before the debate goes on. If that thing happened more often, we’d get a lot further along. We know this from the social science evidence. We are as polarized as we have been since reconstruction. It’s a deeply polarized society and when that happens, people tend to go into their own camps and they shut off people who have alternative views. I think that’s happening in all realms, including in the realm that we’re talking about free-market and capitalism. That goes to the larger discussions we’re having, which is how do you make the case in a way that the people who could conceivably be open to an alternative case are.

You’re hitting on everything that has been going through my mind. What you said was brilliant. That’s where I look at just my experience and what I was trying to get to with the whole idea of central governance. People don’t like to be told what to do. There’s this fighting response to it that I think goes into what you were referring to as our unconscious or what’s built into our wiring. That right there includes a lot of when we had to survive where we don’t necessarily have to survive anymore, but yet those instincts are still there. When a person feels attacked, I would assume that it’s very similar to being attacked by the sabertooth tiger or some animal.

Human life and experience is about learning things and recalibrating new facts and conditions that arise and trying to adjust accordingly. Click To Tweet

That’s where I look at AOC and I look at Donald Trump in a way, especially where in a sense they understand psychology. They’re using what people will respond to as talking points and statements. People fall prey to it all the time. I look at the psychology side of things and going to where economics is and usually, the argument for capitalism tends to be rational thinking. I look at how human beings are wired. The majority of it’s emotional. That’s where I look at the values and principles approach has something that intrigues me as opposed to labels like capitalism, Democrats, Progressives or Liberals. It’s looking at principle as opposed to labels because the labels immediately there put you in that camp or excludes you. If you’re in the camp, you’re going to believe what the camp believes and if you’re excluded, you’re not going to believe it.

Labels exist for a reason because they label something. They identify world views, but I think that the labels by and large are probably counterproductive. Once the labels are cast out, then you’re putting people in categories, they’re putting you in categories. It becomes awfully neat, tidy and untrue. It doesn’t allow for flexibility and nuance, which is what human life and experience are about. You learn things, you refine your thinking, you recalibrate, new facts, new conditions arise and you try and adjust accordingly. If you’re in these ideological boxes, it’s very hard.

I’ve had these conversations with Trump supporters because I’m a lifelong conservative and I worked in three Republican administrations and in a Republican White House. I have a lot of friends who are Republicans. I’ve been so critical of Trump. They’re puzzled or upset by it. I’ve had a lot of conversations, many of them good. Sometimes it takes an effort to make sure that the relations don’t fray. It’s been helpful for me because I’ve been able to hear their perspective and understand where they’re coming from. I must say that there are times in which one makes an empirical claim as it relates to Donald Trump that is a criticism of him. Let’s say something about that he has lied and there’s demonstrable evidence that it’s a lie. It’s been fascinating to me how it just doesn’t breakthrough.

It is as if they think that that’s the thread and the whole thing can come apart. If they can see one thing that the whole project comes apart. I’ve experienced this throughout my life in politics, particularly when you’re in the White House. Many of the issues that you confront are complicated issues. They’re very intelligent people arguing different policies and different points of view. Often the decisions are 60/40 or 65/35. It’s not 100% arguments on one side and 0% on the other. That’s part of what discretion, judgment, prudence and wisdom is in governing. It’s the ability to hear these arguments which sound potentially equally persuasive thinking through we choose the one that is most appropriate given the circumstances we’re in. What are the contingencies that we have to anticipate but are unknowable? If you’re deciding a set of policies that you want to roll out, what’s achievable politically and not? What’s the composition of Congress? You might want to push some elements of privatization of Social Security, which you could believe is the right thing to do, but maybe it’s not achievable.

TWS 14 | Dynamics Of Capitalism

The Death of Politics: How to Heal Our Frayed Republic After Trump

Maybe you have to do something ahead of that. These are all very complicated issues to take into account. Often they are choosing one set of policies over and against another one or 60/40, but then when you get into the actual discussion, those differences disappear and that weighing of pros and cons disappears. It’s as if all the arguments are on one side and not on the other. Once you settled on a position, there seems to be some reflex that we have that says, “I can’t concede a single point to the other side because if I do it, I weaken my case and I can’t possibly weaken my case.” You have people shouting, talking points at each other, talking past each other, and refusing to engage each other and saying, “That’s a valid point. I think you’re right. I just think that the other arguments on my side outweigh the good point that you’re making.” It’s all very complicated and very challenging stuff, but I think in part explains why our politics is as broken as it is.

For the readers, I love having these conversations. Hopefully, this is valuable to you. Some of the things you’re saying, it comes down to this relation to human connection. I think all people want to connect. They want to have a relationship. At the same time, there’s this instinctive protection that they have where they want to look bad. They don’t want to be wrong because what that does is it invalidates their identity to an extent, but when you break down those walls, it’s amazing what can happen. People, either value is a value or a principle is a principle or it’s not. Most people would concede to capitalistic principles if it wasn’t labeled capitalistic principles. These are principles of life in a sense. I’ll end with this and I’ll let you have the final word. There’s something I’ve thought about, which was interesting to me.

I have little kids, two teenagers and a five-year-old. We went to the Disney Aulani Resort on Oahu. When I was there, there’s this central pool section. There were these two guys that had these big earrings, big guys with these tattoos on their arms, hardcore guys. I was able to have a conversation with them. They were there with their kids. We were in this environment in which the walls were broken down and you can have that connection, yet if I went to their neighborhood and was walking down the street at night, the environment changes, walls are up and the outcome is not going to be the same. Human beings are wired in a certain way and we want certain things. They’re very similar yet because of these walls that come up and are reinforced, it’s difficult to have the connection that’s needed in order to make even more progress.

That’s a very interesting story and I think it touches on these deeper truths that we’re talking about. An awful lot of this is what you described, which is a sense of identity. That’s basic to human beings, feeling of belonging, and feeling of community. It’s pretty rare to find people who will take stands that will put them at odds with the community that’s most important to them. That explains a lot of the political tribalism, but we’ve got to find a way to try and break down these walls you’re describing. There’s some lovely verse in the New Testament about breaking down the dividing walls that exist between people. When those walls are up, it usually means that life is going to be harsher, less sympathy, more anger, more antipathy. People begin to view other folks not as individuals that you disagree with, but as enemies at the state, enemies of your cause.

We need other people with other experiences to help us see and to understand. Click To Tweet

What can quickly kick in is the dehumanization, which is if you see things differently than I am. It’s not because you’ve analyzed things wrongly and you made an intellectual error, but you’re morally defective. There must be something wrong with you. If you don’t see things the same way I do, then you don’t value the same things that I do. In fact, you’re a threat to them. We see that in contemporary politics. We know from the data that the attitudes that Republicans, Democrats, Progressives and Conservatives have toward each other. It’s much more personal than ever before. There’s a feeling that these are not just differences of policy, but they are character flaws and faults. If you feel like you’re being attacked on that fundamental level, you’re an alien, a malicious force, a malignant force, that you want to hurt me and you want to hurt everything that I know and love. When that happens, a lot of bad stuff kicks in and we’ve got to break through that. We have to deepen the understanding and sympathy that we have for one another.

In the book that I wrote, The Death of Politics: How to Heal Our Frayed Republic After Trump. I tell a story in one of the chapters about CS Lewis and Owen Barfield. CS Lewis was a great medievalist and scholar in England. He was probably the most important Christian apologist of the twentieth century. He started a literary group in England in the 1930s. He and JRR Tolkien were the mainstays of that, but there was a person named Owen Barfield who was a British philosopher and poet and somebody that Lewis knew for many years. Lewis in his book Surprised by Joy describes what he refers to as first friends and second friends. For him, it was a person named Arthur Greeves, somebody who knew since his childhood. He said, “First friends are the individuals that when you start the sentence, they’re able to complete it. They’re your alter ego. They see the world largely the same way that you do process it the same way.” We all need that. That’s part of what human community, human attachment, human relationships bring to us. Lewis described what he referred to as a second friend and that was on Barfield. He said, “The second friend is the person who’s not your alter ego, but your anti-self.”

That’s the person who describes who reads all the same books you do and draws all the wrong conclusions from those books. He has a section where he talks about these debates that he had with Barfield and they were pretty intense. They were esoteric debates, but they were about the role of imagination and reason. Lewis says that he and Barfield would go at it hammer and tong late into the night learning the power of each other’s punches almost unconsciously beginning to absorb what the other person was saying. Out of this dog fight, a community of affection grew. The punch line was that Lewis and Barfield both treasured their relationship precisely because they took all the world somewhat differently than the other. They felt that their aperture of understanding was grayer because they had each other in their life.

Barfield later said that, “When Lewis and I debated, we didn’t debate for victory, we debated for truth.” That’s just an entirely different way of approaching dialogue and conversation, which is, “Do you have something to say where I can learn?” “Can I come out of this conversation knowing something that I didn’t before? Knowing something about you, something about the nature of the world, something about the experience that helps me see things better than I would have?” That goes back to what we were talking about, which is epistemological modesty. Even if in some abstract sense you or I were 100% correct in our understanding of a particular issue, there’s still no way that we could know the full truth and reality of things on any number of issues. That’s not within our capacity. That’s why we need other people with other experiences to help us see and to understand. If we were able to take that to heart and to incorporate it in our lives and embrace it, a lot of things in life would be better than they are.

I’ll say something to that. There’s a concept and idea that I love to use, which is three sides of a coin. Most people look at coins with two sides. There’s the edge, which is the third side. The concept is heads is one opinion, tales is another opinion, but then your opinion should sit on the edge where you should evaluate. Where are the arguments? Where the perspectives are coming from and then rationally come up with your own. I tried to look at that because you’re hitting the nail on the head with a lot of stuff we’ve talked about when it comes to perspective, what truth is, how people come to truths, and then how people change and essentially go from one side of the spectrum to another. Everything you’re hitting on is fascinating. I’d love for our audience to learn about you. Would you mind talking about your book and where they can pick that up? Also, how they can follow you. I know you are contributing to The Atlantic as well as The New York Times. Maybe talk about those outlets so that the audience can follow you.

The book that I just wrote, which was published by Harper Collins is called The Death of Politics: How to Heal Our Frayed Republic After Trump. It’s an account of my life in politics. What I’ve learned, why I believe politics is important. I think it’s a low moment and a dangerous moment, but I make the case that we need to do something about it because justice matters, and politics, it’s about a lot of things. It’s got its dark undersides as all professions do. It’s finally and fundamentally about justice. The book I wrote in less than a year, but it’s the product of a lifetime in politics. People can get that on Amazon, Barnes & Noble or any of the other outlets. I’m a contributing editor for The Atlantic Magazine. I’m a contributing opinion writer for The New York Times. I’m a Senior Fellow at the Ethics and Public Policy Center. People can follow my work there. I’m on Twitter @Peter_Wehner. I write about all sorts of issues. I’ve written about capitalism, politics, faith and friendship, and then from time-to-time, I interview people for The Atlantic. I did a couple of interviews with David Brooks on his book, The Second Mountain, and then with George Will and his book, The Conservative Sensibility. For me, it’s a lovely way to earn a living, which is for me to write, think, talk to intelligent people, and try and learn along the way.

Peter, it’s been such a joy to speak with you. This has been an awesome conversation for me and I’m hoping readers got as much out of it. Thank you again for your time. Thank you for the good that you’re doing. We’ll have to connect in the future sometime.

I’d like to do it. I enjoyed the conversation a lot. Thanks. Take care.

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About Peter Wehner

TWS 14 | Dynamics Of CapitalismPeter Wehner is the author of The Death of Politics. He is a New York Times contributing Op-Ed writer covering American politics and conservative thought and a popular media commentator on politics.

Wehner is also a Senior Fellow at the Ethics and Public Policy Center and veteran of three White House administrations.



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