Patrick Donohoe, Author at The Wealth Standard – Your home for finance, economics & building wealth outside of Wall Street

Positive Psychology: Creating What We Imagine with Dr. Paul Jenkins

January 31, 2019 Patrick Donohoe 00:42:51 Comments Off

TWS 04 | Positive Psychology

In the psychological literature, we have known forever that happiness and success are correlated. We think that when we’re successful, then we’ll be happy. Dr. Paul Jenkins, however, says we got it backwards. Dr. Jenkins is an author, speaker, positivity expert, and personal development coach with over twenty years of experience as a professional psychologist. He specializes in positive psychology and delves into the subject. He also discusses the evaluation and creation process, creative discontent, how we tick, what motivates us, and why happiness is a choice.

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Positive Psychology: Creating What We Imagine with Dr. Paul Jenkins

I have an incredible gentleman on the show and his name is Dr. Paul Jenkins. We’ve known each other for quite some time. I had the opportunity to be on his podcast. It’s always a pleasure talking to him. He is a psychologist. He’s a speaker. He’s a podcast host. He’s authored two books Pathological Positivity and Portable Positivity. His podcast is Live On Purpose Radio. We’re going to talk about psychology, his specialty. I have some questions to ask him in regard to how we tick and what motivates us. The environment that we’re talking about this entire season and capitalism. Why environment is important as part of the human experience to grow and to achieve what we’re all after in life. Welcome to the show. Thanks for joining us. Why don’t you introduce yourself to our audience?

Thank you, Patrick. I’m honored to be with you. I’ve enjoyed my associations with you over the years. We go back ways and we’ve learned some stuff in that time. I’m a professional psychologist. I left the tribe of traditional psychology. I jumped onto positive psychology, which is a little different animal because we’re not interested in the question what’s wrong with you? That’s the wrong question but we focus on, “What are the principles that allow us to live at a higher level of functioning to enrich our relationships and our experience in life?” You said that it’s a tall order to take on this topic but it’s pretty simple what we’re after, what makes people tick? In my book, I pointed out that we all have the same agenda. We describe it in different ways. Some people call it happiness and some people call it success. One of my favorite alternate words for it is joy. Whatever it is, it’s that feeling that we’re after, that feeling that life is good, that I’m in a good place, that I can reasonably anticipate good things to come. It creates a feeling and that’s what we’re after you think about it, everything else that we do is toward that end.

The common belief is that circumstances are the means to get there. If I had this, then I’ll be happy. If I had this career, I was making this amount of money, I drove this car, I married this woman, I did this or lived here then, I’ll be happy. It’s like we deceive ourselves, in a sense, in order to create criteria in order to have that feeling. How do you approach that?

It’s not even a new idea, Patrick. This goes back through eons of time. All you got to do is talk to somebody who has, all that stuff that you think will make you happy and they will tell you, that’s not it.

People don’t believe them for whatever reasons. It is interesting.

In the psychological literature, we have known forever that happiness and success are correlated. There is an actual correlation, but we got it backwards because we used to think and some of us still persist in this myth. We used to think that therefore when I’m successful, then I’ll be happy. We got it backwards. It’s the other way around and the research is supporting this in some phenomenal ways. When we are happy, then we are successful. How else are we going to define success, when we’ve got the feeling we’re good? We’ve also found that happiness in all the ways that we can measure happiness is correlated with success and all the ways that we can measure success, including finance, relationship, and health. It’s correlated and its causal and there’s a lot of good support for this now that choosing happiness, that happiness is a choice. Honestly, that irritates and annoys some people because they’re like, “Why would I ever choose this?” They don’t see that they are. My job as a psychologist is to illuminate the obvious, which is cool. I get paid to tell people things they already know. How awesome is that? There are obvious things that are completely unnoticed.

One thing that I think about often is the process to understand this, whether it’s someone that has a session with you or they go to a seminar. It is highlighting the obvious. I thought about there’s a narrative in society that if we put a person and we give them a home. We give them food, job and we forced them into a situation, assuming that they’ll be happy and fulfilled. Their life is complete because we gave them all of this stuff. I find it interesting that it never works. Sometimes it makes it worse but why is that? It goes back to the same thing, if I had this, then I would feel this way. When it’s another person’s initiative, maybe it’s a brother, neighbor, acquaintance or friend that’s in hard times and we want to help them, we have this empathy toward them that we want to give them a job, money or a place to live. We think that because of that, now their life’s going to turn around. Why doesn’t that happen?

Everything that we experience gets filtered through our amazing mind. This is where the key is. I said that there’s things that are obvious but unnoticed, like the feeling of your clothes. Can you feel them? Is it obvious? You didn’t notice before I called it to your attention.

That wasn’t my focus.

The fact that we’re speaking English, did you notice?

We’re speaking. We’re making sounds with our mouth and tongue.

It’s obvious once it’s called your attention, but we get programmed into routines that automatically play out. Until we become aware of them, we’re not in a position of choice. Once we’re aware, it puts us in a position of choice. The two processes that I try to help people understand that are going on in our mind are evaluation and creation, they’re very separate processes. You engage your mind to do both of them. Evaluation is judgment and notice as I bring it to your attention, notice that you’re constantly judging, aren’t you? You judge yourself. You judge your circumstances. You judge your spouse, your workplace, your co-workers, the environment and the economy. You judge all of this stuff and you can’t turn it off because your mind is constantly seeking for meaning. You have to evaluate or judge everything. Just notice that you’re doing it.

The other processes creation. You can’t turn this one off either because your mind is busy creating what is to be and that doesn’t exist yet. We haven’t created it yet. Everything that’s created has to be imagined first, so it’s all driven in the mind. That’s both good and bad news. I’ve shared this story with you once, where I was driving. Maybe you’ve done this before too, where you get lost in your thoughts and you’d go right past your exit and I did this. I was going down to St. George, Utah to visit a client. It’s in the southernmost end of Utah and I knew I had missed my exit when I saw the sign. Arizona welcomes you. I’m like, “This isn’t where I wanted to be. I’m in the desert of Arizona.” Nothing against Arizona, it’s an amazing place but it’s not where I was going. How often in life do we look around and it’s more like, “Crap, this isn’t where I wanted to be?”

We look at our circumstances and we think that that’s causing all of our feelings, which is an illusion. It’s a myth. That’s not what causes our feelings, what causes our feelings is the way we’re judging our circumstances. That puts us in position to do the next step, which is to create something. I’m in the desert of Arizona. It’s not where I want it to be. I looked down, guess whose hands I see on my steering wheel? That bites, first we’ve got to acknowledge I am here because I drove here. It’s my choices that led me to this point and I’m not saying that you blame yourself. Blame is a victim mentality. Response-ability, I break it into two words in my book. The response ability, it’s your ability to respond. It’s your agency that kicks in because the bad news is also the good news. If my hands are on the wheel, what can I do next? Steer it, take it somewhere that gives me power. As long as I’m in victim mode trying to blame someone or something else, I’m also waiting for that someone or something else to change in order for me to be happy, to experience the feeling.

Is it possible to circumvent that? Is it possible to get what your aim is in life and achieve the happiness without accepting responsibility, without recognizing that you’ve got yourself in this situation, having that awareness. Is it possible to start with that?

To get lucky?

Positive Psychology: What causes our feelings is the way we’re judging our circumstances.

I don’t think it is, but it does happen. Is the lesson really learned?

When that happens is it puts people into greater captivity. You know some of the research that’s been done on lottery winners for example. Take finances for a minute because people think all the time, “If I only had enough money or when I achieve or obtain that, then I’ll be happy.” It’s overwhelmingly negative when people happen upon money in significant amounts. I remember a routine that Bill Cosby did years ago. I know he’s taken some flack in the media, but he has made me laugh and brought me joy in my life. I’m ready to forgive him for other stuff.

He did good things. He did bad things.

Welcome to Earth.

Welcome to life. Welcome to the human experience.

Here’s what he said, he was talking about drugs. He was doing a little bit on drugs and he was interviewing this guy, “Why would you ever use drugs?” This guy says, “It magnifies your personality.” Bill’s response, “Yeah, but what if you’re an idiot?” Money is like that. Money is not a source of happiness. Money is a power tool. If you put a power tool in the hands of a two-year-old, you got a problem. It’s going to magnify whatever thinking is already going on in your mind. If you’re trapped in scarcity saying, “I’ll be happy when or if or upon completion of or when I obtained this or that,” you’re going to be more in that mode if you happen upon money. I have seen people who are so paralyzed by fear because they obtained money without understanding the principles that drive that.

It’s more captivating. It doesn’t liberate you. People who don’t have the money and think that the money will bring them the happiness that they seek, they don’t believe that. Some of your audience might be thinking, “That’s easy for him to say, he’s got money.” I’ve been in a bankruptcy. I’ve been on both ends of that spectrum. Here’s what I discovered, Patrick. Happiness is a choice and I can do it with money and I can do it without money. It’s not the money that matters and when I realized that, money is not an issue anymore. That’s so weird. It’s a paradox but that’s what we got to learn. It’s our hands that are on the wheel. We choose happiness and in doing so we put ourselves in position to bring about every other measurable aspect of success, including money but the primary objective here is that little three letter word, joy. That’s what we’re after and you can have it with or without whatever it is you think controls that.

I’m super inflexible but I’ve come to a realization of how important mobility and flexibility is. We started doing some ten minutes of yoga or stuff like that. The lady that does it, it’s like a YouTube thing. She’s different, she talks different and so Synthia said something, “That make sense.” She was talking about what goes on in your mind. Everything, your life experiences in is in your mind. Nothing is in the physical world if you think about it. We had a cool discussion in that regard but in the end it’s a mindset. Positivity and joy are available as it is if you had all of these things that you think was going to ultimately bring it.

Everything that's created has to be imagined first. Click To Tweet

I love the way you look at it a bit backwards. Backwards from I would say how we’re naturally drawn to understand it, which is you’re able to be happy. Experience joy in the moment, as much joy as if you had $1 billion in your bank account. It’s interesting what prevents us from getting there. Because of the theme of this season, the idea of capitalism, I want to extract from what we’ve been talking about the idea that this is an experience that humans must go through in order to understand happiness, joy and fulfillment at a personal level. These experiences I don’t think can be circumvented or skipped over because they won’t be valued. They won’t be understood.

The experience of life is that we’re going to make mistakes. There’s no such thing as perfection in most humans. It’s an idea that if we accept that and we realized that we’re going to make errors, it’s part of the process but that errors are as a sign. Mistakes or falling short, challenges are a sign that there is an incredible lesson and that’s a beautiful thing because it helps build our joy, our potential, our capacity for joy and fulfillment. It’s our experience that we have to go through. You can’t necessarily replace that by providing an environment for somebody or taking the experience away from someone. It robs them and it does make it even more difficult to ultimately experience it. They’re going to have to probably go through even more difficult circumstances in order to have that same result. It’s interesting where, I would say a part of our society politically, economically is we should provide for others that are less fortunate. I understand that empathetic drive and intention there but at the same time, you rob a person in a sense of experiencing certain things that got them in that place to begin with.

At the very least, Patrick, we perpetuate a myth that, “This will make you happy.” No, it won’t. I tend to agree with you. We get to go through these experiences in order to learn that. For me personally, is I went through a bankruptcy. I used to think that people who went through a bankruptcy were flakes or dishonest. I have a whole lot more empathy. I learned it’s not about the money. My bankruptcy essentially divorced me from money. I learned in that experience it’s not about the money, which has interestingly enough put me in a position where money is not an issue. It’s simply a tool and it flows in abundance. Why does it flow? This gets down to the capitalism. The only moral reason that money should ever flow to you is because you have assisted others to achieve their purpose.

It’s the same thing as you’re saying, it’s the opposite. Money is not going to create, you’re going to create the money. The focus is creation as opposed to money and that’s where it flows. The paradox of all of these ideas is pretty fascinating.

The money is the receipt. It’s not the value. The value is joy in whatever form that comes. You assist people to experience joy and money shows up as a receipt for the value that you’ve created for them. That’s a shorthand way of saying it’s not even about the money. The money is simply a receipt for the value and the value flow, as value flows from you receipts come in. As value flows to you, receipts go out and it’s a beautiful flow. It’s a cool thing and it’s not about the money. It’s not the money that’s the value.

Here’s a question I have that I’m curious to hear your response. As you look at me, you’ve met with so many people, you speak, you do interviews, you have a podcast and you’re talking about this all the time. When you look at someone, it might be a patient, it might be an acquaintance and you look at what’s possible for them, what they’re capable of. You can’t tell them. You can’t say you’re capable of all of this and you’re going to do this. You have so much in your life, you have so much to be grateful for and be happy about. You can’t tell a person that. It’s more of like, do you facilitate the experience in which they discover that and then maybe give us some insight on how do you do that?

It all comes down to metacognition in my mind, which is a made-up word. We make up words in psychology because it makes us feel smart but if you break it down, cognition means thinking. If we put that at this level, metacognition is a higher level. It’s thinking about thinking and notice as I bring that to your attention that you can do this. You’re aware now that you’re thinking about your thinking, this is cool because metacognition creates a space and in that space is where choice exists. Until we see it as a choice, it’s not because we’ll roll with whatever we’re programmed to do. You and I are programmed to speak English. It’s not that you chose it, you were programmed this way and that’s naturally where your mind is going to go. Can you speak another language? Yeah, it’s a choice to speak another language until you see it as a choice. You roll with whatever you’re programmed to do and this is true with what I call the victim mentality too. If we’re programmed in a victim mindset, then that’s naturally where our brain goes. Can we do something else? Yes, it won’t necessarily be natural if we’re programmed in a different language. I’m constantly stretching myself to remind myself that I’m programmed.

When I turned 50, I took up guitar. When I was 50, that’s too old, apparently not. I mean guitar is a choice and it’s also very obviously a skill set, you can choose it. You can choose to be positive for example. If you’re programmed with some negativity, you better hire a coach. You better put in the practice hours and be ready to do the hard thing because it’s a skill set too. What are people capable of? When you asked that question, my mind went to Elon Musk. I don’t know if you’ve read the biography of Elon Musk by, Ashlee Vance. It blew my mind. This guy is innovating and thinking things that other people don’t. He’s a weirdo. What is the human mind capable of? It’s capable of Elon Musk. It’s capable of Benjamin Franklin, it’s capable of Thomas Edison or Robert Kiyosaki or Immaculee Ilibagiza. What is it capable of? It’s unlimited when we get out of our own way and these limiting beliefs that have us thinking, “I’m stuck here because of my circumstances.” You mentioned my podcast, Live On Purpose Radio. I have interviewed hundreds of people since 2007. That’s before podcasting was even a thing. I’ve interviewed you twice. I have found an amazingly consistent theme.

Positive Psychology: The money is simply a receipt for the value and the value flow. As value flows from you, receipts come in.

As I interview people about their story, usually there’s a hard part. In fact, every hero story has a hard part in the middle so get used to that. I’m thinking Carol Decker for example, she wakes up from a coma after giving emergency C-section birth to her second daughter. She wakes up as a blind triple amputee. You think, “I guess I can’t be happy now. Well, that sucks. There goes my life.” Her book is called Unshattered, subtitle is Choosing A Beautiful Life. It’s not about whether you’ve got all four of your limbs. She’s got most of one remaining. Chad Hymas, who had a ton of bale of hay fall on his head and fractured three of the vertebrae in his neck, left him quadriplegic. You think, “There goes my life. I guess my life has to suck.” You don’t hear Chad Hymas or Carol Decker saying that. This is interesting too because I don’t think we can truly deceive ourselves.

You don’t think we can deceive ourselves?

No, I think we are influenced by forces outside of us and we shouldn’t be too quick to believe everything we think. It may have come from a source that’s not our friend. That’s a whole other conversation but we get into this deception where we believe that we can’t. As long as we believe that, we’re right.

It’s interesting that you brought up those examples. When circumstances become so dire, when there is extreme disruption or failure, there is a higher probability of overcoming limiting beliefs. Have you found that to be true or is it maybe circumstantial?

Go back to those two processes that I mentioned, evaluation and creation. Creation is where we’re going to create something, but we start with evaluation. You used the words dire, extreme compared to what? Something that’s more trivial or not so bad, that also is a judgment. That’s the point, notice that you’re doing it, to be extreme. I read an Instagram post from a friend of mine, Elizabeth Smart. I don’t know when people are going to catch this particular episode of the podcast but as we’re recording it, a young woman who was abducted at the age of thirteen and held against her will, her parents were killed, was rescued. Elizabeth spoke out on that because she at the age of fourteen was abducted and raped every day for nine months. In her Instagram posts, is her heart is going out to this young girl who was rescued. Elizabeth is human too and she’s comparing that circumstance to her own. She’s like, “My parents weren’t killed. I had it easy.” These aren’t her words but what do we mean when we say extreme or extraordinary?

It was always a comparison, you have to compare it.

That’s always compared to what, notice that you’re doing it. As soon as you notice that, then that’s what brings up the metacognitive gap, that space where choice exists. I’m judging this to be bad, is it really? You’ll notice that it can only be bad compared to something better. It’s only good compared to something worse. What if a hard thing happens? Like what? I have people all the time, “This is so hard.” I’m coaching them through setting up a live coaching practice, for example. That’s a big part of my focus is coaching coaches. “This is hard,” and I’m like, “Compared to what? Being abducted? Having your children taken away from you?”

Losing limbs, losing eyesight.

Everything that's invented starts with discontent. Click To Tweet

Compared to losing your right arm, compared to what? I am not here to tell you how to think. I don’t have that authority. I want you to see that you are. In that thinking, thoughts have consequences. It’s those thoughts that have us judging this to be hard, bad, difficult, easy, happy, joyful or whatever. Since you can choose why not choose something that serves you well and gives you that little three-letter word. You need to experience joy not after you accomplish stuff. I mean then too, but life happens not after you do all this stuff.

The label or the definition of circumstances, the word that you put on it that’s a choice. From what you’re saying, it can be defined as something that’s negative and limiting. It can be equally defined as something that’s empowering, liberating, powerful, or great as far as your experience of life.

The hard part of the hero story and everyone has to have a hard part. Maybe this is yours. Here’s a little challenge. Take whatever it is that’s been kicking your butt, whatever it is that you’ve been telling yourself, “This is bad,” and switch it. Try saying, “This is good.” As soon as you do that, you’re going to have a fight on your hands or in your head more likely, where your own mind is going to jump out and say, “What could possibly be good about this?” It’s a pretty good question but it’s not a question, it’s a statement disguised as a question. Turn it back into a question. Watch your punctuation, what could possibly be good about this? First of all, it is good compared to something worse, notice that but then your mind goes into a whole new realm. You start to explore this experience that you’re having in a different energy and that is the currency you get to take to the creation game.

Have you ever been to the Consumer Electronics Show in Vegas?

No, but it sounds fascinating.

200,000 people go there and it’s a show and tell of all the new innovative things that are going to be available to consumers. I went this year and it’s fascinating where you look at the business world, the technology world and you have these annoyances associated with what we have, which aren’t really annoyances. It’s amazing the stuff that we have available to us. I’ll give you an example of a dryer. Most dryers will come with a vent that metal thing that you have to find and get it outside of your house. It’s an annoyance. LG has invented this vent-less dryer. They also invented a proprietary way in which they lower the heat and dry the clothes so it’s not ruining and shrinking them. My point in explaining this, as you look at the innovation that’s going on, it parallels to the human mind associated with what we experience in life.

There are companies out there all the time that are figuring out ways of how to overcome some of the annoyances and inefficiencies. I would say a big thing is the inversion in Utah Right. The pollution idea, that’s an annoyance. There are those that are like, “What can we do to figure that out?” With our own limitations in our personal lives, we can parallel to all of the amazing things that have been created by human beings in the last decade. That have helped and have overcome some of these limitations. Human beings are wired this way. We’re wired to experience difficulty, annoyances, limitations but we’re wired to overcome them and become better because of it. We use our mind to do that.

It’s called creative discontent. When we’re in evaluation mode, when we’re judging, discontent misleads us into thinking that, “This sucks.” Actually, this rocks and that discontent is more appropriately used in the creation mode because it will steer us into innovating, solving or coming up with an invention that addresses the discontent. Everything that’s invented starts with discontent.

Positive Psychology: Since you can choose, why not choose something that serves you well and gives you joy?

You can look at it as an amazing opportunity. Imagine framing discontent and frustration with an incredible opportunity. You’re looking for it but then once it happens, it’s like, “Eureka.”

There’s no question in your mind what you get to work on which is nice to narrow it down because there are so many things to work on. Follow your discontent, it’ll tell you what to work on.

It’s where all the opportunities are. Happiness is boring.

You can experience joy and discontent at the same time. It all has to do with how you interpret it, what you’re doing with it. Those two processes that I mentioned, evaluation and creation.

This has been amazing. I had no idea where the discussion was going to go but I look at how you think and what you’ve been able to create. It’s come from years and years of experience with people. I would say in our day and age, they’re always going to be people that are stuck. There’s always going to be limitations. 100 years ago, it was, “How am I going to have enough food for the winter?” Now it’s, “What are they going to think of me if I don’t post these things on social media?” We always had these experiences where we’re getting stuck and we have limitations, anxieties, and difficulties. The way in which you frame it’s so empowering because it’s absolutely true. There’re amazing things that can come from it if you frame it that way.

Seeing it as a choice changes the game. Some people will resist this because if it’s truly a choice, then it’s my responsibility. The victim mindset doesn’t want to take responsibilities. “It’s my fault. What’s going on in my life, check out my circumstance? This is why I’m not joyful,” and as long as we’re blaming, we don’t have any power.

Why the focus on positivity? What has drawn you? I love your perspective here and the idea of positivity. What is it about positivity that is so attractive, engaging or magnetic?

That is a really interesting question and to me, it’s obvious. That is the way that our mind operates. The model that I’ve created puts these two processes, evaluation and creation on the same model. We can see how our imagination puts us either in a negative energy or a positive energy depending on what we choose. Creation, for example, we don’t know what’s coming. How are you doing next week? You don’t know you got something to do with it, but you don’t know because you haven’t created that yet. When we anticipate or predict that bad things are coming, how do we feel? That’s anxiety and it’s paralyzing. You don’t know what’s coming. If you believe, predict or anticipate what’s coming is even better than the rich abundant stuff you’ve already got, how do you feel?

Positivity drives everything because it's how our mind works. Click To Tweet

This energy drives everything. I get called in to train sales teams. I did a big keynote for the biggest door to door sales conference. It applies in sales and leadership. I get asked to come in and do this retreat for a leadership team in Park City. The industry, the application doesn’t matter. Positivity drives everything because it’s how our mind works. That’s why I am so attracted to it and that’s why the topic resonates with so many people. They can see immediately something that is obvious but unnoticed and that is that their own mind is putting them in a position. If that position doesn’t serve you well, wouldn’t it be good to know that there’s a choice now? It’s a choice but it’s also a skill set we already talked about that. It doesn’t necessarily come naturally, you get to practice and that’s why I’ve set up coaching programs and I’ve written books. I’ve run a YouTube channel and trying to help people with the application of a simple concept, simpler and easier at the same thing because of our programming.

As you talked about positivity, you referenced a number of relationships. You have a professional relationship, if it’s a sales role or a leadership role but also there’s a personal relationship, spouse, children, neighbors, friends. Would you say that that positivity is one of the keys, maybe the key or the most important? How do you rank positivity as the variable to meaningful relationship, which I would guess is probably the common thing that produces that feeling of happiness?

When I’m coaching relationships, there are nine principles that I emphasize. The first one is positivity. For a lot of good reasons, it’s in our most intimate, closest relationships between husband and wife or between parent and child. That’s where we get to experience the greatest measure of joy. That’s why it’s even more important to apply these in our personal relationships, in our intimate relationships. It’s even more important there. It’s assumed in my mind.

It’s one of those simple things, obvious but unnoticed.

Let’s bring it to our attention occasionally.

That’s how I look at happiness and positivity. It’s one of those things if you flip that, the impact that it would have on your relationships on how you carry yourself, your posture, and interaction with people. It’s one of those magical skeleton keys, where it can open every door.

It is and I’m thrilled that’s the foundation of my platform because it is so universally applicable.

Why don’t you give out the best ways in which our audience can learn about you, purchase your books, or subscribe to the podcast? These are some simple principles and ideas that can revolutionize someone’s life.

Positive Psychology: Positivity is where we get to experience the greatest measure of joy.

I would invite you to a couple of different places. I’m spending a lot of time on YouTube. You mentioned the podcast, Live On Purpose Radio. You can pick it up in your podcast app. Those are interviews that I’m doing with inspiring people. Some of the people that I’ve referenced here on the show, they’ve all been on my show. There’s the podcast, there’s the YouTube channel, which is Live On Purpose TV. Go to YouTube and look for Live On Purpose TV, there’re several playlists there. Positive parenting, positive relationship resources, positive leadership and entrepreneurial-ism and have some fun there on the channel.

We’re doing daily videos there. It’s a great way to boost your positivity. The website DrPaulJenkins.com, where there’s a number of things that you can connect with there. I’ve got a products page, I’m offering a free digital download of my mini book, Portable Positivity, which is a step-by-step explanation of the model that I shared with you. Those are some of the first places I would invite people. As you encounter principles that make a difference in your own life, share them with other people. That’s important to the other people, obviously for some good reasons. It also solidifies that principle in your own mind and you become an owner of a new tool that can drastically change the game for you.

The whole principle of exchange, which is providing what you know and ultimately sharing that with others. It’s the principle of knowing in the first place is isn’t necessarily your own knowledge but it’s also for a benefit from others that you interact with it. We can continue on with that but this has been enlightening. We’ll definitely need to chat again because this is one of those things where you can’t escape the environment, which you will continue to discover these principles. No matter where you are in life, there are always going to be different circumstances as you mentioned next week, the month after, next year, ten years from now. There’s always different circumstances and the same principles apply in those circumstances. It’s a conversation, the repetition behind it is going to build that strong backbone so that you can approach life with positivity. Approach life and understand how to achieve that level of happiness.

Practice it because it’s a skillset as well as a choice.

Dr. Paul, thank you again for sharing your wisdom and your experience with us. Keep it up. This has been very enlightening and helpful to me. I appreciate it.

I’m honored to be on the team, Patrick. Thank you for the invitation.

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About Dr. Paul Jenkins

TWS 04 | Positive Psychology

Dr. Paul Jenkins has 20+ years’ experience as a professional psychologist. He is an author, speaker, positivity expert, and personal development coach. He is also the host of “Live On Purpose Radio” since 2007 and Contributor to the record-breaking 60 hours World Hope Cast. His YouTube channel, Live On Purpose TV was launched in 2018 and is steadily gaining subscribers and changing lives.

Dr. Paul illuminates obvious principles, that when applied have life-changing benefits in your personal, family, and professional life. He knows the science behind the brain and relays the information in ways you can actually read, understand and use. It is like having an owner’s manual for your brain. Pathological Positivity and its pocket-sized companion, Portable Positivity, are the manual to power-up your positivity.

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Building A Community Through Affordable Housing with Andrew Lanoie

January 25, 2019 Patrick Donohoe 00:28:04 Comments Off

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TWS FF 3 | Affordable Housing

When starting up a business, there are ideas that are really brilliant but poorly executed, hence its failure. On the other side, there are businesses with less spectacular ideas at first but because of how well it was run, it flourished. Andrew Lanoie, an expert at building teams and connecting people with opportunities, takes us to his journey as he discovers a specific niche in real estate. He shares the different adversity that he faced early on as he focused to address the demands to have affordable housing.

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Building A Community Through Affordable Housing with Andrew Lanoie

Financial Friday

This is our first episode where we are focused specifically on financial strategy ideas, which you can make an investment, put savings and capital. I have an amazing guest for this episode. Hopefully, our long-time audience should recognize his name because he’s been on before. His name is Andrew Lanoie. We have known each other for a better part of ten years and he is an incredible guy. I can’t wait for you to meet him and talk about what he’s been doing for the last several years in relation to a specific niche in real estate investing. Andrew is the Cofounder of Four Peaks Capital and he also is a Cofounder of Park Place Communities. Andrew, you’re always up to something and you’re an incredible entrepreneur. Welcome to the show and thanks for joining us.

Thanks, Patrick. I always appreciate catching up and thanks for having me on.

We met a long time ago at a real estate investments conference. We met in person. We did some business together previous to that. Why don’t you talk about the business you were in then and the transition you made, which is definitely not like a lateral transition? It’s a vertical leap type of transition.

It’s a bit unique. I was in Los Angeles for about twenty years and I was working in the entertainment industry. If anyone has seen the show Entourage on HBO, I basically worked at the William Morris Agency for about sixteen years. I worked at Beverly Hills. I represented comedians and touring artists. I did that for about sixteen years. When the subprime crash happened, my folks who had been retired and living in Florida lost a pretty significant part of their retirement savings. Dad was a plumbing inspector, mom was a nurse and they saved. They “Did everything right,” and still took a pretty big hit. That was my cue to pull my money out of the market were things I didn’t really understand and then start exploring alternative assets. That was around 2009 that I started dipping my toe into real estate.

Affordable Housing: Given the huge demand for affordable housing, manufactured housing and mobile home parks are just simply the vehicle to really put a dent in the space.

You were involved in a few different elements of real estate. Your personal real estate investment, which you did quite a bit, but then you decided to make a business out of it. This is a business in a niche that you’ve shared with us on the Cash Flow Wealth Summit. For the audience of the podcast who don’t know about the Cash Flow Wealth Summit, we are part of an event that’s called the Cash Flow Wealth Summit. It’s an online virtual event that we do a once a year. Andrew and his companies were sponsors and presented on this specific niche, which is very intriguing. I’ve seen it in other companies and what they’ve tried to do in this specific niche of real estate. I love the model that Andrew and his partners have put together. Why don’t you tell us a little bit about the discovery of your specific niche and the opportunity that you’ve realized? What you guys have done to capitalize on it?

Backing up a little bit, it’s always good to know where you are in the market cycle. In 2009, I started buying single-family houses and markets that were all outside of California, which made a lot of sense. Prices were low, the rents were great and good stable markets. I did that for about four years and sometime around 2013, the prices started to rise in the single-family home space. At some point, the investments weren’t penciling out. I started looking around at other asset classes. I looked at commercial, I looked at multi-family and even back in 2013 or 2014, the multi-family felt like it’s starting to get a little frothy. Cap rates were decreasing and a lot of money being thrown around the space. I had a friend who had been buying some mobile home communities in the Midwest. Along with a few other different asset classes, I took a good look at that model and realized there was a massive opportunity there, specifically in manufactured housing. It all falls under affordable housing.

One thing too as you look at some of the adversity that you’ve probably faced early on where you got into this niche, there’s a stereotype associated with that type of real estate. I would say it probably parallels to what most people associate with any real estate investment, which is being a slumlord. When you go to that type of market, people want to stay away. How did you approach that stigma that existed? How did you figured out a way to use that as momentum to make this an incredible opportunity?

The first thing is if you take a step back and you look at the crisis that we’re having in the United States, in terms of affordable housing. You’ve got an annual median income of over $31,000 in the United States. That’s not household, that’s per person wage earner. If you’re looking at take-home pay, someone’s going to see about $25,000 a year over a couple thousand dollars a month. If you quarter that up, you’re looking at somewhere around $600 a month for a housing allowance. You’ve got a median one-bedroom apartment in the US or somewhere around $1,200. You’ve got the median mortgage somewhere around $1,000. 50% of wage earners are basically making this amount or less.

We want people to own their homes and have some skin in the game. Click To Tweet

That was the big eye-opening moment. It’s like, “There’s a huge demand for affordable housing.” Manufactured housing and mobile home parks are simply the vehicle to put a dent in the space. It’s not a very sexy asset class. Going in and buying C-class apartment buildings and turning them around, you’re taking an asset that was once flourishing in a community in good spirit. Over time, maybe it went from 90% to 50% occupancy. Morale is out the window and maybe there’re people selling drugs in the community or whatever. Part of our whole purpose and drive in this space is to return the sense of community to these individuals and families, while still offering an affordable place to live.

I want to hit on that but I can’t help but want to reemphasize how most investors look at opportunity, especially when it comes to real estate. Sometimes the perspective that we have going in is that this has to meet our standards. This has to meet this qualification, this neighborhood, and this school system. That creates some filters that prevent people from making good investments or at least seeing a good opportunity. Looking at these communities, there is a big portion of the population that is in this category, this income level, and asset level. There’s just been an incredible boom in a sense with regards to new construction apartments. The big booming technology that expanded housing in a sense, but it’s also pushed up prices, whether single-family homes or even apartments.

It’s been very difficult for a certain element of the population to adjust that. This is why I look at the opportunity you have, which is essentially about existing mobile home parks, manufactured housing and what you’ve created as a system. The opportunity is there. There are ways in which you can be profitable with keeping rents, payments, or housing expenses low. The profound thing that lit me up when I talked to you and Mike about your vision regarding the future is, what you’re doing to create a community with these projects and communities that you’re taking on. Can you talk about, maybe integrate Mike’s background, who’s your partner? Then also this element of community that you are integrating into the investment so that it helps, not just with the return on investment but at the same time preserves a lot of good community. Not some of the things that could happen, whether it’s drug trafficking or other illegal activities, in the sense of preventing that which ultimately mitigates your risk?

The median lot rent in the communities that we own is about $280. We’re absolutely sitting in affordable housing. The challenge is in this space is there are a lot of moving pieces and that’s where my partner Mike Ayala comes in. He’s owned and operated these communities since 2007 but he also built a plumbing and HVAC Company from the ground up with about 110 employees in over ten years. He had a construction and a cabinetry company. He is very well-versed in operations, building teams and that side of the business. He and I have very different skill sets, which is why we’re great partners.

Affordable Housing: The goal as a business owner, entrepreneur, and being someone who’s raising capital is to go from wearing twenty hats to ideally wearing only a couple hats which sometimes takes years and years to do.

Back to the business model, let’s say that we find a community in Missouri and we go in and it’s at 50% occupancy. There’re 25 homes that need to be renovated and there are issues in the communities, there’s infrastructure problem and the morale is gone. It’s taking a look at the big picture. We built out a construction company as part of the organization. We’ve got about 40 W2 employees that travel in groups. We’re renovating about twenty homes across the portfolio a month. We’ll go in and spend $5,000 or $10,000 on a home, which could’ve been on demo sheet in such horrible condition. Everything from windows to appliances, subfloors, paint, carpet, renovate thoroughly the unit and all of a sudden there’s a really nice used manufactured home for someone to buy. Maybe that’s a $15,000 or $20,000 home. We also bring in new homes through. We were buying homes through Clayton Homes, which is a Berkshire Company and those are about $35,000, $40,000, $45,000 price point.

If you have your resident hat on, you’ve got two different options for a home there. Essentially in our model, we want as many of the residents as possible to be owners. We do some rentals but it’s a small percentage because we want that pride of ownership. We want people to own their homes and have some skin in the game. That in itself is a big part of the process. You’re literally taking an asset that’s undervalued that’s turnaround project and you’re going in. Maybe the trees haven’t been trimmed in ten years and you have to spend $70,000 in tree trimming. Whether it’s sewer problems because a lot of these communities were built in the ‘50s and ‘60s, infrastructure or road issues. There’re so many things that are on more of a cap X budget.

Slowly as you bring in new homes, you clean up the park, you take out the trash and you get rid of all the tenants that shouldn’t be there, then there are little things. We’ve been planning to build little gathering areas, whether it’s a swing set and a barbecue. Where when the weather is nice, the people can go and get together and do a barbecue once a month, once a week or whatever that is. A lot of the previous owners stopped putting money into these communities, which over five, ten, twenty years started to have a negative effect. It’s literally trying to bring this back up to a really clean, and safe community. Most of our parks will never have pools or clubhouses and things like that. That’s not the reality but they can still be a nice safe place to live.

We’re going to get into the business side of things but it’s one of those opportunities where it’s always been very local. Where you have the complexities, the moving parts I would say, I’m not sure what the turnover is but it’s a hands-on project or an investment. In your experience, you’ve seen mostly local ownership. They’re not operators either, it’s something they had. I remember some of the stories you’ve told me as far as not even having rent rules and you’re not knowing what the occupancy rate history has been. That provides a lot of opportunity number one, to get a discounted asset and number two, to add operational efficiency to it through your team being able to operate in all States. That right there makes it not just a short-term acquisition success, but a long-term success as well.

You need to have a divide and conquer mentality of what you're going to be focusing on. Click To Tweet

A lot of the time when you nailed it, you’ve got someone that inherited the community from their parent over time or maybe they’ve owned it for years. They’re getting older and maybe they’re managing it from outside of that area. The same processes and everything that we have in our communities in Missouri is the same as our communities in Tennessee and the same in Kansas. You’ve got to build out those operational efficiencies across the board. What we call them as the mom and pop or the legacy owners is they probably didn’t go to school to learn how to run a business. They’ve been doing it whether they wanted to get into that business or not. They’re going by what they think is the right thing to do. A lot of the times that’s 75% of the communities that we buy.

We’re going to learn next about how he and his partners operate the business. As you have learned from past episodes, the investment and the idea is one thing but then it’s the operation and actually making it successful, which is entirely different. That usually is what either makes or breaks a long-term opportunity. I’ve had the fortunate opportunity to know you and see your journey. It was about a little less than a year ago where I came out to Arizona. It’s a short flight from Salt Lake and I got to visit with you and Mike and see your vision. I got an idea of how you guys were operating and it was fascinating to me. The idea of putting a team together is not the easiest thing to do. Getting people to work together with a common purpose and finding people but you guys have made that trek. You have put together an incredible team. Would you be willing to maybe talk a little bit more about your business? How you operate the different people you’ve found and their backgrounds? Maybe a little bit why you chose them and the importance of the overall structure of your company as it relates to the success of the investments that you’re putting together.

It goes back to having a world-class team in this space. Anything in affordable housing, in general, is going to be a challenge to operate. As long as you go into that knowing that trying to outsource a lot of things or subcontract certain things, it’s not going to work. We’re currently operating and based in Phoenix. We’re operating in twelve states. Somewhere around 100 employees across the board, including all managers and maintenance at the community. We have different companies. We have a construction company which I mentioned, we’re at 40 folks. Those guys are out in the field traveling. They’re superintendents, supervisors, carpenters, laborers and their sole focus is turning units and renovating units. They’ve got someone on site that’s overseeing them. They know the process, they know specifically how to renovate these homes. They’re different than stick-built single-families. We have those crews that travel around. They’re managed by someone that’s in our home office and obviously, that company has very specific targets. We have X amount of communities that are on the list to renovate. We have multiple crews that are moving. There’s all the auxiliary stuff being licensed in those states and all those moving pieces.

Once a home is renovated, once all the punch list items are done then it goes into the marketing team’s hands where they then market that home for a sale. It’s a different model than if you have multifamily, you’re renovating apartments and then renting them. These are single units that are then being sold. The resident has to come in, they have to put down 5% to 10%. Typically, that’s $15,000, $20,000 on a used home or maybe it’s $35,000 to $45,000 on a new home. In our space and affordable housing in general, that’s one of the big challenges, the down payments from the residents. That goes back to our resident basis that most people aren’t sitting on $5,000 in cash and that’s the reality. That’s a big problem that we’re in the middle of trying to solve. Once we find a resident, they qualify, all of the residents have financing. There’s not a single resident who comes in and buys something with $20,000 in cash. They’re all financed and then they move in there. They’re a part of the community. There’s the management side, which is ongoing in its collections. The managers always typically responsible for showing the unit. I don’t know if that answered your question but a lot of moving pieces in this model.

Affordable Housing: To be a successful operator, especially for an affordable housing, you need a team.

When I’ve known you through this entire process and I have been able to have a backseat view of what you’ve been successful at. You were doing a lot of the discovery and a lot of this stuff yourself for a while. That’s important, especially when you’re starting up a company, but you can’t do that forever. It’s trying to run it a sprint pace for a marathon length. The point is, you saw how everything worked but realized that you couldn’t do everything, especially at scale. Maybe talk about joining up with Mike and then understanding that he has the experience of working with a lot of different people, who all had different roles and coming together for an end purpose. Maybe talk about how you’ve put together your team based on all the different elements of the deal. Where you found people, what are some of their backgrounds and so forth?

Several years ago, we were running as a virtual company and we had people in different states. Our recruiter and HR person were in Portland, Oregon. We had an integrations person in Denver. People were all spread out all over the country. One of the first things that Mike and I started to work together several years ago is, we need to pull everything in. We really needed a brick and mortar office in this space. That was a big initiative in 2018. Months ago, we opened up an office here in Phoenix and we’re in Gilbert, which is a little suburb of Phoenix. We started with maybe six or seven people in the office. Some of the folks who had been working with us for years actually started to move to Phoenix, which was great instead of rehiring for that role. Going back to Mike and what some of his strengths are, everyone stays in their lanes, processes and that part of running an operations team fell on his desk. We outgrew that office maybe two or three times and moved into a new space. We’re at somewhere around 22 full-time people.

The goal as a business owner, an entrepreneur, and being someone who’s raising capital as well as being an operator is you want to go from wearing twenty hats to ideally wearing only a couple hats. Sometimes that takes years and years to do and there’s certainly plenty of things that you can hire for. Bringing in Mike as my partner was huge because he’s experienced in that. We had a very much a divide and conquer mentality of, “Here’s what you’re going to be focusing on.” We’ve got a great partnership and relationship and I trust him. He is working on X and I’m working on Y. Certainly, we have initiatives together and high-level things we’re working on, but it was divide and conquer to get these operations and all the team built.

You’ve also had a seat with being able to observe and be around groups of other entrepreneurs and investors that are putting together deals, whether apartment deals or single-family blocks or tracks. You’ve seen as well as I and we know some of the same ones of big failures but also big successes. I know you have a very close relationship with Ken McElroy and then others that have done very well in the real estate investment, by putting investments together and being successful with them. Who are your primary influences and how has your network helped you to be a better business owner and also a better investor?

It's trial and error. When you try one thing and it doesn't work out, you have to make a shift. Click To Tweet

The past years I’ve read or listened to more audiobooks in that side than I had ever before. I’m constantly looking at different groups to join, looking at different people to get around. It’s interesting, Ken McElroy and I are pretty good friends and he’s done something similar. He’s obviously on a different league and he’s doing multifamily but has an operations team. He has a construction company. Being able to bend his ear on problems that you’re having or anything like that and a mentorship role has been unbelievable. A lot of people that we know have also raised a lot of money and maybe they don’t have the team in place or they’re not an operator but they’re raising money and using third parties or passing it off to someone. That’s a whole different animal in itself. Ryan Moran as an example, we spent some time around Ryan and his group. That eCommerce business and challenges that people have in that space. You get around different people who are all entrepreneurs and going through different growth patterns. Everyone has issues that they’re trying to solve and a lot of time there are some commonalities between that, even if someone is selling a physical product on Amazon versus running a manufactured housing company. You can definitely pull some commonalities out from it.

Business is business and there are business fundamentals, it doesn’t matter what your product or your services is. As I’ve discussed with you and really where I’m trying to focus on financial strategy and financial investment opportunity, is that ideas definitely have merit and I’m not discounting ideas. In this case, it’s a niche market in the real estate industry. There have been ideas that I had been good but poorly executed and ultimately its failure. There’re businesses that have lackluster product or outcome or service, but yet because of how well the business has run, business is successful. I wanted to go down this line of questioning is because as I’ve looked at investment, especially in real estate investment which is more commonly referred to an alternative investment, is that you have cool innovative ideas. At the same time, what I’ve seen as a success and failure has nothing to do with the idea and has everything to do with the underlying business. That’s where we took this direction as far as how the business operates, who are the operators, and who’s on the team? That is paramount to the overall success of the business, which in this case is an investment. You and I’ve had multiple discussions around that and I think we’re on the same wavelength to an extent.

It’s like anything else. It’s trial and error. You try one thing and it doesn’t work out so you have to make a shift. We spent a lot of time in 2017 and 2018 ripping apart different systems and processes, “That didn’t work. Why didn’t it work? We have to do that in-house and maybe it costs a little more upfront but saves money down the line or whatever it is.” One of our big takeaways in this space really to be a successful operator, especially for an affordable housing you need a team. It’s not something that you can go hit an easy button to subcontract out to and there’s everything else along with having a growing company, its culture and all the things that you’ve spent so much time and energy on. There are a lot of layers and complexity to it.

Andrew, this has been awesome. I’m so proud of your success and what you’ve accomplished. I can’t wait to see what you guys do. Why don’t we take a moment for you to talk to the audience about how to get in contact with you? What are some of the types of investments, opportunities that you have? Who’s the right investor for it?

Affordable Housing: The big eye-opening moment is that there’s just a huge demand for affordable housing.

The website is FourPeaksPartners.com and if anyone wants to set up a time to talk with someone on our team, you can send an email to Investors@FourPeaksPartners.com and put free consultation on the subject. We had a pretty big acquisition year of this year and we plan on having another strong acquisition. We’re fortunate enough that we’re still finding assets and decent cap rates. There’re lots of opportunities and we’ll continue to be in a big acquisition trend as long as the deals pencil out.

Andrew, thank you for joining us. Thank you for your support of the show, our friendship and I wish you the best.

Thanks, Patrick. I appreciate all you do.

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About Andrew Lanoie

TWS FF 3 | Affordable Housing

Andrew Lanoie is an expert at building teams and connecting people with opportunities. Formerly a Talent Agent at William Morris for 16 years representing some of the world’s biggest celebrities, including Tim Allen, Taylor Swift, Steve Martin and Tom Petty, to name a few. In 2009, Andrew began investing in single-family residences and acquired well over 100 properties in under 4 years. During this timeframe, he discovered the massive demand for affordable housing in America and chose to leave the agency and focus full-time on real estate investing. After a few initial investments in manufactured housing and mobile home parks, Andrew realized the opportunity for a powerful and positive disruption in the market by providing the dignity of a free-standing home with the affordability of manufactured housing—and hence the creation of Park Place Communities. In less than 5 years, Andrew and his team have closed on over 26 manufactured housing communities in 12 states, with close to 1,800 lots, quickly making Park Place Communities a Top 100 Owner and Operator in the U.S.

With his sights set firmly on becoming a national Top 10 Owner and Operator, Andrew will continue to lead the vision and execution strategies on a daily basis. Andrew will focus on growth through strategic partnerships, scaling the companies, and investor relations.

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The Philosophy And Principles of Capitalism with Yaron Brook

January 24, 2019 Patrick Donohoe 00:32:47 Comments Off

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TWS 3 | Capitalism

With all the talks, debates and different perception about capitalism, consulting an expert can best take us to in-depth understanding of the concept. Yaron Brook, an internationally sought-after speaker, writer, activist and objectivist, walks us through his strong belief in the philosophy and principles and how capitalism should be attached to individual rights and freedom. He explains how we can flourish through capitalism. He also shares how a book handed to him has started his lifelong journey and reinforcement of capitalism started.

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The Philosophy And Principles of Capitalism with Yaron Brook

Equal Is Unfair: America’s Misguided Fight Against Income Inequality

I hope you are enjoying the first couple of episodes revolving around the topic of capitalism. I have the foremost living expert on capitalism, Yaron Brook. Yaron is an Israeli-American entrepreneur, writer and activist. He is an objectivist, which we’re going to most likely talk about and what that means. He also is the current Chairman of the Board of the Ayn Rand Institute. He also is the Cofounder of BH Equity Research and is the author of several books including called Equal Is Unfair: America’s Misguided Fight Against Income Inequality. Yaron, thank you for joining us. Welcome to the show.

It’s great to be here. I’m looking forward to this.

I find your background fascinating in how you came to understand what you do and why you have such a strong belief in your philosophy and your principals. Would you mind taking a moment and informing the audience of what is your background? How did you come to understand objectivism as well as capitalism? I would say a very strong opinion if those that are in our audience have listened to you or watched you before.

If they haven’t, there are tons of videos. Google my name and you’ll find a ton of content. I was born and raised in Israel in the period of time when pretty much everybody was a socialist. It was a thing to be. The Labor Party in Israel had won every single election until 1977. You were never exposed to any ideas other than the ideas of socialism. In 1977 as it happens, I was sixteen years old. I was getting together with a friend of mine. We were talking and he was spouting these free market capitalist ideas and I looked at him and I said, “Where are you getting this nonsense from? What happened to you?” He said, “You got to read this book,” and he handed me a copy of Atlas Shrugged. I read a lot in those days and I dove right into it and it blew my mind. It completely shook my world. It challenged everything I believed in from the fundamental beliefs I had about ethics, purpose of life, happiness, morality, politics, economics and about everything. I argued with the book. I didn’t want to believe it. I threw it against the wall. I yelled at Ayn Rand, she wasn’t there.

By the end of the book, I was convinced. It completely made sense to me. It was completely logical. I thought I completely understood it. I was still quite ignorant and I didn’t know it, but I got into basics. It was the beginning of a lifelong journey of discovering Ayn Rand’s philosophy, the philosophy of objectivism and her view of capitalism, how capitalism fits into that. I ultimately became a finance professor but my interest is more on the politics and economics. It’s all grounded in this view of morality, which is key to understanding her philosophy and understanding capitalism. I’ve studied her philosophy. I’ve studied economics. I’ve studied the great capitalist economists. The more I study, the more I’m convinced that the revolution that went through my mind at age sixteen was a true one and the rest of the world needs to catch up. What are they waiting for?

Capitalism is about freedom of the individual to pursue his values as he sees fit without anybody intervening. Click To Tweet

It’s interesting that your perspective continues to be reinforced it sounds by doing debates, by debating the opposite principles. You experienced it in your childhood growing up, but also you continually challenged both sides of the argument, which is profound and continues to reinforce it. How would you come to understand capitalism? When you acknowledged that word and when you look at its relevance in society and in life what is it that is most compelling and most profound?

Capitalism is about freedom. It’s about the freedom of the individual to pursue his values as he sees fit without anybody intervening where the role of the government is to protect that freedom. The founders called it individual rights. John Locke called it individual rights and they were right. These are the individual rights by the freedoms of action. Freedom of action is the pursuit of values necessary for your survival, the rational values that you need. Capitalism at the end of the day is a socioeconomic system, political system in which the government does nothing but protect individual rights, primarily property rights where all property is privately owned.

The government has complete separation of state from economics. Pure capitalism is where the government has no economic role. There is no treasury secretary. There are no regular agencies. There’s no Federal Reserve. There is no role for government. When we get together, what we decide, how we decide to exchange, what we decide to change, how we decide to produce and how we deploy our resources is completely left to individuals. As long as I am not committing fraud, as long as I’m not punching in the face, as long as I’m not committing a crime, as long as I’m not violating your rights, the government has no business intervening in the transaction between us.

The primary argument I want you to address now and this is the primary argument that we all see in society is that mankind isn’t going to do the right thing. They’re going to exploit people. They’re going to cheat. They’re going to steal. They’re inherently evil. Looking at capitalism, doesn’t that accentuate or magnify those flaws of humankind?

Let’s assume all men are evil, they’re scheming and they’re going to screw each other. Let’s take a small group of men, call them saints and have them control everything. The bureaucrats, the politicians, we know that they’re saints. We know our politicians. Even on its own terms, it’s insane. The fact is that there’s nothing to suggest in history that this is indeed the case. Look at us now. Since the invention of capitalism about 250 years ago, since the founding of this country, which is about the same time as capitalism comes together, not an accident that the two happened at about the same time. Since then, life expectancy has more than doubled. We’re wealthier beyond the most fantastic dreams of anybody living 250, 300 years ago.

Nobody could have imagined an iPhone and the fact that we’d be videoconferencing right now. All the tools that are available to us, they barely could imagine. I don’t think they imagined automobiles, flying machines that turned out to be nothing like the jets we have now. If you look at what human beings are capable of doing, of when they’re left free they produce, of how much benevolence and help and cooperation. Think about capitalism. People think about capitalism and think about competition and cutthroat competition. The fact is that 99% of capitalism is about cooperation. It’s about me hiring you and that’s a cooperative effort.

It’s about even competitors. Do you know that Apple uses Samsung product in its iPhone even though it competes with Samsung? Some of the components in the iPhone are made by Samsung. Even as they’re competing, they are cooperating. Collaboration and cooperation is the essential characteristic of capitalism. You see that on a massive scale and versus every other regime. Look at Venezuela, socialism. Theft, cheating, backstabbing, manipulating and people say, “This is socialism,” it’s really a kleptocracy. That’s exactly what socialism is. It is a kleptocracy. Every single regime that’s not capitalist, even in America, I would argue that our politicians are more corrupt now than they were 150 years ago when we were freer. I would argue that people generally in the culture are less honest. People generally in the culture will cut more corners because the government is intervening more.

Pure capitalism is where the government has no economic role. Click To Tweet

I think it’s exactly the opposite, the freer you allow people to be. People are neither good nor bad, but people have it within them to be good. When the right incentives are provided, when they’re left free, when they can benefit or when they can reap the rewards of their own action, they tend to be good. When you try to control them, when you put mother governments on their shoulder to try to tell them what they can and cannot do, they work at corners. They will cheat. I truly believe people are born neither good nor bad, but goodness is a potential in all of us. Capitalism brings out the best in people, the innovation, the hard work, the striving to improve their lives and the value creation that benefits all of our neighbors and everybody around us.

As you debate the opposite opinion because I believe there’s a clear distinction of how humans behave within an environment that’s free. An environment that has laissez-faire, hands-off and one that is centrally planned and influenced to take care of the well-being of all. What is it about the idea of freedom that drives so much disdain amongst people, especially in our quickly changing liberal perspective on things?

I hate to give them the compliment of calling them liberals. Liberals used to be a good word. What drives it is that capitalism demands something of all of us. It demands the best of us. It demands personal responsibility, but not just personal responsibility in the way a lot of conservatives deem it in a shallow sense. Personal responsibility goes deep down on all of our choices. It demands that we pursue a life worth living. Capitalism implies a particular moral code. It implies a moral code of self-interest. Capitalism basically says, “You’re on your own. Go and make the best of your life. Nobody’s going to be responsible for you. Nobody’s going to take care of you. You need to take care of yourself.” It basically encourages that so we reward success. We penalize failure. We reward accomplishment. We encourage and promote and allow for self-interest.

We all know what our mothers taught us about self-interest, about egoism or about even selfishness. Bad things, bad people are selfish. Bad people are self-interested but is that really the case? When Steve Jobs pursued self-interest in making the iPhone and he’s clearly pursuing his interest, trying to make a lot of money and building a product he loves. Is that a bad thing? Is that hurtful to anybody else? No. When great scientists pursue with passion the discoveries they make, that’s not about sacrificing for the world. They’re doing it because they love doing it. They do it to satisfy themselves. Capitalism is about satisfying our own rational values or our own rational needs. As such, it goes against the moral code that almost everybody teaches. This is why on the right among conservatives and among people on the right, they have such a hard time defending capitalism particularly as an absolute. “We need a little bit of capitalism,” they’ll tell us. No, we need capitalism. We need complete absolute capitalism because they’re uncomfortable with the idea of self-interest. They are uncomfortable with the idea of defending and promoting egoism.

Capitalism: The fact is that 99% of capitalism is about cooperation.

We have been taught since we were this big that what’s good is to be selfless. What’s good is to sacrifice. What’s noble is to think of others first. This is what blew me away in Atlas Shrugged. Ayn Rand asks a simple question, “Why is your happiness less important than other people’s happiness? Why isn’t your happiness the most important thing to you?” If you understand how you get happiness, it doesn’t come by exploiting other people. It comes by creating values, but why is your life less important than other people’s life? Why should you live for the other rather than live for yourself? To me, the real essence of capitalism is the morality of self-interest and that’s what the left but also the right, find disdainful. Why the left condemns capitalism and why the right, for the most part, cannot defend it or defend it so poorly.

These ideas are old ideas. I haven’t revisited this in a while in detail, but Adam Smith before he wrote The Wealth of Nations and The Theory of Moral Sentiments, he talked about how we’re driven as a human being where we do have this self-interest. I wouldn’t say it starts with making sure that we stay alive. We feed ourselves, we clothe our self and we fit into society. Then it gets to the point where we’re driven to make a contribution and do things and ultimately by pursuing that, you provide for the well-being of others as a result. The intention of the left, I would say, by forcing people to give up money or to do this so that they can distribute to everyone. Ultimately, the best thing for everyone comes about by a person pursuing that self-interest. What are your thoughts around that?

This is why Ayn Rand is such a revolutionary because she fundamentally disagrees with that of Smith in this sense. Adam Smith correctly observed in The Wealth of Nations and in The Theory of Moral Sentiments that the baker doesn’t bake the bread for you. He baked the bread for himself. He likes baking bread. More importantly in the context of the baker, he’s trying to make a living. He’s trying to feed his family. He’s trying to feed himself. He’s motivated by self-interest. Adam Smith says, “Self-interest is not good. It’s not a model trait. It’s not a virtue. We tolerate it because if you add up the self-interest of all these people, you get a better social outcome.”

Ayn Rand says, “I don’t care about the social outcome. What I care about is your right as an individual to pursue your happiness, your self-interest. I care about the baker as the baker, not what he does to other people but the baker. I want the baker to be able to be happy.” For the baker to be able to be happy, he must be free. Free to make his own choices. Free to have his own ideas. Free to bake whatever bread he wants to make, whether it fits into the regulatory regime or not. As long as his customers want it and as long as it doesn’t hurt them, he commits fraud or he’s putting poison in the bread. He should be able to be free to make his bed as he sees fit and pays employees as much as he wants because I care about the baker.

People are neither born good nor bad; goodness is a potential in all of us. Click To Tweet

It turns out that if you leave people free to pursue their self-interest, the society, if you can even define that term, is better off. Everybody who’s willing to work, everybody’s willing to produce is better off. That is not the reason to defend capitalism. The reason to defend capitalism is in the sense that the founders wrote in the Declaration of Independence. You have an inalienable right to pursue your own happiness. Not society’s, your own. The only political-economic social system that leaves individuals free to pursue their own happiness is capitalism. To me, that’s the moral foundation. It’s about the individual and it works because when you leave people free, they take care of their own property. That’s why capitalism also produces the cleanest environment because private property is clean. It’s a public property that’s polluted.

When the wall came down in Berlin, what we discovered was the filthiest place on the planet was communist East Europe because everything was public property and nobody cared. Everything dumped their garbage in the public space. When you have your own private property, we take care of it. You take care of yourself. In order to make a living, you have to produce values that other people want and therefore you are helping them. When I buy an iPhone for $1,000, my life is better for that. My iPhone is worth much more than $1,000, tens of thousands of dollars if this enhances my life. I’m willing to give up $1,000 because my life is better off by doing so.

Think about that. Every transaction we go through every day when we buy groceries, when we go to a restaurant, when we buy iPhones, or when we consume electricity. Whatever it is that we do, we are benefiting more than what we’re paying. Otherwise, we wouldn’t do it. Capitalism is a system through trade, through the win-win relationships that trade creates. Capitalism is a system that everybody is constantly better off through it as long as you’re working and producing something and earning something. It’s a win-win relationship. Because I’m selfish, because I want to produce, because I want to have a better life, I’m making everybody else’s life better as well because I have to trade with them. That’s the beauty of capitalism and that’s the beauty of this morality, the small defense of capitalism.

You had gone down and talked about this notion of happiness and achievement. You talked about how people pursue achievement. Achievement gives them a notion of self-worth or confidence and that happiness. Would you define happiness in another way or is it in line with that sequence?

Capitalism: The reason to defend capitalism is, in a sense, that the founders wrote in the Declaration of Independence.

Happiness is the sense you get about life that comes from achieving your goals and achieving your values, as long as those values are rational. I don’t think somebody who has irrational values can be happy. If your value is to bring about socialism, you’re not going to be happy. You’re going to be miserable because the existential reality of those values is going to be detrimental to your life. The values have to be rational, pro-life values. Happiness comes from achieving those values. Ayn Rand defined happiness as a state of non-contradictory joy. You have this positive sense about the world and nothing is contradicting it. Nothing is fighting it. The world is good. It doesn’t mean you don’t have problems. It doesn’t mean you can’t be sad. It doesn’t mean tragedies don’t happen to you and you could be depressed for a while.

Overall, your attitude towards your life, your standing order in terms of life is life is good. I achieve stuff I can. I can make my goals. I can achieve my values. People sitting at home, for example, one of the great tragedies of the welfare state is that it basically prevents people who receive welfare from ever being happy. It robs them of opportunity to be happy because without work at whatever level you are capable of, without the challenge, without building, creating or making something. Whatever level you can do it, I don’t think you can be happy. You have to be able to achieve values. If you’re sitting at home playing video games and collecting a welfare check, that’s out the window for you. To me, the welfare state is immoral to a large extent because of that.

I’ve thought about that a lot. I thought about with people and what they achieve. Oftentimes, it comes as a result of hardship and error or mistakes in certain areas and their ability to overcome that and learn and achieve because of it. I don’t think there’s anything that can replace that. I look at a free society and how that allows for those opportunities. It does allow people to understand what they’re capable of. I’m not sure if there’s another way to do that. I don’t think there is.

At the end of the day, you go down to freedom. You have to have the freedom to try. You have to have the freedom to experiment. You have to have the freedom to fail, but you also have to have the freedom to succeed and to benefit from that success that so that everything else is motivated. That’s what capitalism provides. Capitalism is the system that leaves you free to do all those things. That’s how you get great innovation. People try stuff out. They come up with crazy ideas. Everybody around them I’m sure said, “That’s nuts. You’re insane. Nobody can do that,” and then they go do it.

Capitalism basically says you're on your own. Click To Tweet

Sometimes those crazy ideas turn out to be crazy and they fail. Sometimes and maybe less frequently, they turned out to be brilliant and they turn out to be what changes the world. The socialism you don’t have there, socialism under any political system where the state is involved. You basically have to get permission in order to innovate. If you take any great idea in human history and you put it in front of the committee, it’s going to fail. Is Earth going around the sun or is the sun going around the Earth? The committee of the Catholic Church decided, “The sun goes around the Earth. Galileo, you’re all wrong.” They shut him up and they imprisoned him or they put him on house arrest so he could not articulate this fallacy. In a free society, Galileo is out there, “I made this incredible discovery,” and speed at which science would have developed after that would have been so much faster. We would be so much richer now. Everything got slowed down because the committee couldn’t decide if this was a good idea or a bad idea. I always ask my audiences, “Imagine if this was designed by a government committee. What would this look like?” You don’t need to even get the answer. You know what’s going on inside of people’s heads. They can see some monstrous machine that’s too big and doesn’t work and is a disaster. Steve Jobs didn’t need to get permission. He didn’t ask anybody. He just did it.

It’s stifling and it’s interesting what’s going on in our country with the government shutdown and 800,000 people not working.

I would love to see the Federal government fire 800,000 people. We as a country would be richer. We as a country would be safer. We as a country would be far more capitalist and far more innovative if we got rid of these bureaucrats. My only concern about the government shutdown is these people are going to get back pay. I would like to see them fired. I would like to see the government shrink by 80%. You could probably get rid of 80% of government officials. Keep the military. Keep a few policemen. Get rid of everybody else. What do we need them for? They only constrain our lives. They only hinder our lives. They don’t add anything to it.

Have you been to CES before in Vegas?

Capitalism: Happiness is the sense that you get about life that comes from achieving your goals and achieving your values, as long as those values are rational.

I read about it all the time. It sounds like a great time.

It’s this whole topic. You experience the results of this topic. I was in line doing a demo for the self-driving cars and I was talking to the head analyst at Intel who is creating the technological framework for that. The biggest impediment was the government. It was approving this and approving this. It’s one of those things where it can stifle innovation at that level, but it also stifles it at the lower levels primarily the welfare state. How we’re robbing individuals of an awesome experience to figure out their life and to figure out how to overcome challenges and problems and get employment. There’s so much in a human’s mind and their ability to create and prosper. It’s robbed from them over and over again. It becomes a habit and it destroys human life. I would consider one of the biggest tragedies of our day and age.

It robs us from the productive capacity and it robs them from their productive capacity and it robs us from their ideas. Just because they are on welfare, it doesn’t mean that with the right incentives, if they wouldn’t be the next innovator, the next entrepreneur or the next somebody who created something important. We robbed them when they’re children. Think about the other great tragedy. Under capitalism, education would be private, and education would be competitive. Education would have to be good. Otherwise, I wouldn’t send my kids there. Now, we have an educational system through and through. Particularly, if you’re poor we have an awful educational system that cripples these kids. It doesn’t give them the tools, it cripples them. This is socialism in practice. We have socialism in education. What is the result? Worse than mediocrity, it’s pathetic awful.

Imagine if education was competitive. If entrepreneurs instead of thinking of the next app for the iPhone thought about the next educational product, the next school that they could create, the next chain of schools that they could build where they would drive prices down and drive quality up. Imagine if we saw billboards with, “If your son is inclined towards math, our school is great. Your son or daughter likes to paint, our school is great for you.” They compete on those things and they market and advertise them. That would be a capitalist world. That would be a worthwhile world. What we’re taking is sheer human potential and destroying it by grinding it through a government educational system. I won’t even send a letter through the post. I’d rather use UPS and FedEx. Why would I send my kid to the equivalent of the post office, which is what government education is?

Happiness should not come from exploiting other people. Click To Tweet

In 2018, we focused on John Locke’s life, liberty and property and what those principles were. One of the guests wrote the book, Free To Learn, his name is Peter Gray. He talks about the Sudbury School System and how kids are creative. They’re naturally curious about life and he robbed them of that experience by shoving curriculum down their throat.

Competition is we discover which educational system is best. There will be competition and parents might disagree and there might be all kinds of schools. We would all have different preferences and some would be more successful than others. It would be innovative and we would go through the market process of discovery which educational system was best, just like in any other field. We figure out what’s best through competitive markets. The fact that we denied this of our kids and we denied this of our society and our culture is tragic.

We could probably go on and on because there’s so much to talk about because there’s so much application to human life and our experience on Earth. Let’s end with this. As you’ve researched this and debated this and thought about this to the nth degree, what would you say are the most compelling reasons at an individual level to embrace the principles of capitalism?

The most compelling reason is that you value your own life. You want to be free. You want to have opportunities. You want to pursue your own dreams. You want to be happy. It’s difficult to be happy under socialism, certainly under communism or fascism or statism of any form. The most compelling reason to want capitalism is to want to live. It’s to want to go out there and produce, create, build and make stuff. It’s not even about the money. Although money is nice and money comes with all that creation, but it’s about the sheer fun and enjoyment of pursuing something that you love doing and doing something that you love doing. Making a difference in your own life and challenging yourself and setting ambitious goals and achieving those goals.

Capitalism: One of the great tragedies of the welfare state is that it basically prevents people who receive welfare from ever being happy.

It’s living. Capitalism is the only system that allows you to do that fully. One of the great tragedies in America unfortunately is we think of America now as capitalist. We’re not. We’re this mixed economy with some capitalism still, some freedom and a lot of regulation and control and fascist, socialist structures imposed on us. If we could only get rid of that and we could get richer, get happier, flourish in dimensions we can’t even imagine. Everything becomes better with freedom. The odds get better. Our spiritual life gets better. Our material life suddenly gets better.

Yaron, this has been a fascinating discussion. If you Google your name, there’s a lot of stuff out there. Why don’t you cover the best ways to follow you? Best ways to learn about the Ayn Rand Institute and learn more about capitalism.

First, I recommend everybody to read Atlas Shrugged and The Fountainhead, Ayn Rand’s books. They’re American classics. Everybody should be reading them anyway. Go pick up a copy and they’re available in every format known to man. No excuses. A lot of people are listening to them these days. Download it on Audible and take a road trip. You can find about Ayn Rand in AynRand.org. There’s a ton of content, a ton of material there. If you want to study objectivism deeper, there are lots of videos, audios and podcasts and many years’ worth of content that’s available. Some of it is Ayn Rand herself, some who are leading philosophical students who know her ideas and study them. To follow me, there are a number of ways. The easiest is probably going to YouTube and to subscribe to my YouTube channel. There are thousands of videos up on YouTube of mine and I’m constantly producing more. I do a video show at least once a week, usually three, four times a week. There’s a ton of content being produced constantly. You can do the regular follow me on Twitter and follow me on Facebook. I do have a website, YaronBrookShow.com.

The only political economic social system that leaves individuals free to pursue their own happiness is capitalism. Click To Tweet

As far as your books are concerned, they’re all available on Amazon or on your website?

They’re all available on Amazon. They’re all available in every format that is available. I have three books. One is called Free Market Revolution: How Ayn Rand’s Ideas Can End Big Government, the second one is Equal Is Unfair and the third one In Pursuit Of Wealth: The Moral Case For Finance. It’s a book about the financial industry and why it’s a noble, productive and virtuous model industry. That will shock a few people. As a companion to that, I do on YouTube a talk called The Morality of Finance.

Yaron, it’s been a pleasure. Thank you for your time. Everyone out there, hopefully this has struck a few chords and got you to think about capitalism, the principles of capitalism and the principles of freedom at a deeper level.

Thanks, Patrick.

Important Links:

About Yaron Brook

TWS 3 | Capitalism

Yaron Brook is chairman of the board of the Ayn Rand Institute. He wears many hats at the institute and travels extensively as ARI’s spokesman.

Brook can be heard weekly on The Yaron Brook Show, which airs live on the BlogTalkRadio podcast. He is also a frequent guest on national radio and television programs.

An internationally sought-after speaker and debater, Brook also pens works that make one think. As co-author, with Don Watkins, of the national best-seller Free Market Revolution: How Ayn Rand’s Ideas Can End Big Government, Brook and Watkins argue that the answer to our current economic woes lies not in “trickle-down government” but in Rand’s inspiring philosophy of capitalism and self-interest. Last year, Brook and Watkins released a new book, Equal Is Unfair: America’s Misguided Fight Against Income Inequality, a book that shows the real key to making America a freer, fairer, more prosperous nation is to protect and celebrate the pursuit of success―not pull down the high fliers in the name of equality. Brook is also contributing author to Neoconservatism: An Obituary for an Idea, Winning the Unwinnable War: America’s Self-Crippled Response to Islamic Totalitarianism and Big Tent: The Story of the Conservative Revolution — As Told by the Thinkers and Doers Who Made It Happen. He was a columnist at Forbes.com, and his articles have been featured in the Wall Street Journal, USA Today, Investor’s Business Daily and many other publications.

Brook was born and raised in Israel. He served as a first sergeant in Israeli military intelligence and earned a BSc in civil engineering from Technion-Israel Institute of Technology in Haifa, Israel. In 1987 he moved to the United States where he received his MBA and PhD in finance from the University of Texas at Austin; he became an American citizen in 2003. For seven years he was an award-winning finance professor at Santa Clara University, and in 1998 he cofounded BH Equity Research, a private equity and hedge fund manager, of which he is managing founder and director.

Brook serves on the boards of the Ayn Rand Institute, the Clemson Institute for the Study of Capitalism and CEHE (Center for Excellence in Higher Education), and he is a member of the Association of Private Enterprise Education and the Mont Pelerin Society.

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Using Investments to Navigate the Silver Tsunami with Gene Guarino

January 18, 2019 Patrick Donohoe 00:29:36 Comments Off

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TWS FF 2 | Residential Assisted Living

There is a huge opportunity that exists with providing services to the aging population because it is a massive challenge that most people don’t even realize. They’re not realizing that this is the silver tsunami, and it’s a wave that isn’t going to die. Gene Guarino, President of Residential Assisted Living Academy, talks about his business and some of the opportunity that exists in the residential assisted living space, specifically with residential properties. Join us in this conversation as we explore the huge opportunity not just in housing but in all the different ways in which we could be of value in service to the aging population.

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Using Investments to Navigate the Silver Tsunami with Gene Guarino

Financial Friday

We have a familiar face and name, his name is Gene Guarino. He is the President of Residential Assisted Living Academy. We are going to be talking about his business and some of the opportunity that exists in the residential assisted living space specifically with residential properties, not assisted living like big commercial buildings and so forth. I’m really excited because this is a topic of conversation that I see as a huge opportunity not just in housing but in all the different ways in which we could be of value in service to the aging population. You’re going to love this guy. He has an amazing voice. I’m not going to say, Gene, you have a face for radio because you have an amazing face too. You have an amazing voice and an amazing face. First off, welcome. Thanks for joining me, Gene. Welcome to the show.

Thank you. It’s good to be back

We have a very similar philosophy in regards to the huge opportunity that exists with providing services to the aging population because it is a massive challenge that most people don’t even realize. It’s like staring me in the face because I pay attention to statistics, government spending, deficits and Social Security deficiencies. I pay attention to all that financial stuff that most people don’t know. They’re not realizing that this is the silver tsunami. It’s a wave that isn’t going to die. It’s there and it’s going to be in our face before we know it. Maybe we’ll speak to that generally first and then we’ll get into the housing situation.

When we talk about older people, all those demographic facts and figures, it’s simply undeniable. When we say the silver tsunami of seniors is coming, it’s hitting the shore right now. Somebody like myself who’s a Baby Boomer, but I’m not on the front edge. There are 72, 73 years old, they’re the front edge of the Baby Boomers right now. They’re hopefully enjoying their retirement playing pickleball and golf, tennis, but some of them need help. That assisted living means they’re living someplace where they’re getting help or needing that help. The big crisis is there are not enough caregivers. There are not enough people to take care of them. The kids can’t quit their job. They’re in the prime of their earning career. They’re taking care of their kids and their grandkids. They’ve got their parents above them. It’s a real crisis for a lot of people that financially can’t afford to hire somebody to come in to take care of mom or dad. They need to be brought to someplace and that’s not inexpensive either. It’s staring in the face. All of us that are in an age where our parents are 80 and 90 years old, my parents are both passed away. At 80 or 90, by that point, some of them need some serious help and assistance. When you start to price that out, it’s very expensive. When you look at that, you say, “Which side of that equation do I want to be on, the giving or the receiving side?” There’s a huge opportunity to do good and do well, which is where we were talking about.

The silver tsunami of seniors is coming; it's hitting the shore right now. Click To Tweet

I can speak to this with direct experience because my parents are on the frontend of the Baby Boomer generation. It’s been interesting because my dad ingrained in us to work hard and go all out with everything that you do. He was that way. He’s had knee surgery. He’s had some eyes stuff going on. He couldn’t hear forever. It’s like you start to see your parents. Even though they want to be active and they want to be playing pickleball or doing those things, they’re physically not able. You have different stages of retirement where you have some go-go years where it’s like go for five, ten years in retirement. After that, your body is affected and you need help. There are certain people that have prepared for it where they have a plan. They understand what that future need is going to be. There’s a lot of people that aren’t looking past two years, past three years and it’s going to catch people off guard. Kids are going to have to quit their jobs or figure out a way to keep their parents at home. There are simply not enough retirement assets to be able to sustain ten, fifteen years in some facility or housing that gives them assistance.

Usually, for most people reading, I want to make sure you understand when we say assisted living, most people aren’t in there for ten or fifteen years. What is that three to five years that drains hundreds of thousands of dollars, which in most people’s accounts, that’s their entire estate? That’s the future inheritance that a lot of people who are reading maybe expecting to get or hope they would receive. We have people move in and they’re with us for three years. They’re spending $6,000 a month and six times 36 is a lot of money when you think about their house, their income and so on. Before you know it, they spent a ton of money. It’s usually an event. I wanted to say that too, that if something happens. It comes upon us, but the reality is you’re going be living fine and then somebody gets a little bit older, they fall out of bed. The next thing you know they do need that constant care or that help. Somebody needs to make decisions and all of a sudden that money is starting to flow out of your household or out of that estate pretty quickly. It does add up fast. If you make some good decisions right now, you can be receiving that income now and having a great place for mom and dad and/or yourself to live in.

Let’s talk specifically about assisted living, that window, because I’m curious about that window. Also what are typically the options people have and how does your niche fit into that? Gene, this is something that I want to understand because I pay attention a lot to technology and improvements to lifestyle. I realized that we’re on the brink of a lot of medical improvements that could totally prolong life. What most people thought was the life expectancy of 78 or 80 can extend into the 90s potentially. Let’s talk specifically about the period of time where you slot in. The period of time where people can’t live autonomously. They need some assistance. When that escalates to actual in-home care, like a lot of care with their long-term care needs.

Let me break it down for everybody who’s reading to make sure you understand there are different levels. It starts with independent living. Independent living is that somebody who is 55 or older living on their own or with their spouse taking care of themselves. Sometimes you see communities or age-restricted adults only 55 and above, that’s not assisted living. On the other side, you have nursing homes. Nursing homes is a medical facility, doctors, nurses, gurneys, medication and so on. That’s a nursing home. In between, sometimes people need help, assistance with their ADL or activities of daily living. That could be everything you did after you hit the snooze alarm. It could be bathing, dressing, eating, medication management and so on.

Residential Assisted Living: The big crisis is there are not enough caregivers and people to take care of the olds.

Nobody moves into assisted living unless they need help. It’s not a vacation. It’s not a country club that’s independent living. They move in. They need help. The kids who are 50 or 60, the parents are typically 80 and 90. The kids don’t have the full-time ability to take care of mom and dad. They move them into this home. The average person in assisted living is in their 80s, might be 82, 84. I’ve had residents as young as 49 and as old as 104. Both of those are unusual, but it’s this bond. They’re going to be in that home for the rest of their life. That’s where they typically pass away inside that home. If you’re a little squeamish about that, “We’re all going to die.” Have a conversation with a good friend if you don’t know about that, but the point is we’re all going to pass away.

Most of the people who move into assisted living do not go on to a nursing home. It’s not like TV where they are lying in a hospital bed and flatlining. People pass away in their sleep. It’s not all of a sudden when they’re actively passing. Not to be morbid, I just want to be clear that they’re going to live in that home for a year or two or three. We’ve had some people in these homes for ten years, but it’s typically two to three years. That’s how long they’re in the home. The cost of that, by the way, to make sure you know that is $4,000 a month is the current average in the US. That’s an average home including Medicare, Medicaid. It’s not where I’m going to go. It’s not where you’re going to go. The private pay is $5,000, $6,000, $7,000, $8,000, $10,000 a month. That’s what people are literally paying to live in these homes. That’s a great thing on the business side.

Maybe talk about the difference between traditional assisted living facilities versus residential assisted living facilities for those audience that are new.

I differentiate it by saying a big box or residential. The big box is what you probably have seen 100 beds, 200 beds, 300 beds. It’s a big facility. It might look like a hospital. It could have been a converted institution or hospital for that matter. There are brand new ones now that look like country clubs. They’re $20 million, $30 million, $40 million, $50, million complexes. You would be proud to live there yourself. It’s a beautiful facility. It’s a big box. There are 100, 200, 300 people. That means communal eating. There are bigger activities and lots of people. Thinking about mom that she’s lived in a home for all of her life. She doesn’t want to move to a hotel. She doesn’t want to live in an apartment complex. She wants to stay at home in a home.

There's a huge opportunity to do good and do well. Click To Tweet

The residential-assisted living is exactly what it says, “Residential, it’s a home.” It might have eight, ten, twelve residents in that single-family home in a residential neighborhood. It’s not gated or fenced. There’s probably not a sign in front. It could be the house next door and you wouldn’t even know it. It’s a residential assisted living. One of the big advantages, Patrick, is the idea of caregivers. It’s not the house and how nice the lighting fixtures are, it’s the caregivers. In a big facility, you might have 150 people with ten caregivers on staff during the day, and two or three caregivers at night. In a home where you have ten residents, you’ll probably have two caregivers on during the day and one at night. It’s 24-hour care but the ratios of caregivers to residents is much better in a residential setting.

Human beings always want connection. We thrive off of our relationships, our intimate ones, our friendships. Later in life, this is where I think those come into view as for how vital they are for our livelihood, but just our experience in life. That’s where having good caregivers makes a huge difference to longevity, happiness levels, health and so forth. That’s a vital piece of this is when you know the care is taking place. It’s having the right people giving that care. At the same time, it’s the right volume of attention.

I grew up in a family with seven kids, so there are lots of kids around. When the kids start to move out and it’s mom and dad at home, and when one of them passes away, and it’s mom in a big huge house with four empty bedrooms, it gets awfully lonely. Being in a community of peers their own age where they can talk about things that they did way back when and they can dance together, sing together, enjoy life together, it is huge.

Let’s segue and talk about the opportunity. You’ve been doing this for five or six years now, which is teaching people how to find the right home, the type of home that has enough bedrooms. That it would make financial sense to convert it into a residential assisted living facility. Talk about that, but then also use this time to talk about the new opportunity that you have coming.

Residential Assisted Living: If you make some good decisions right now, you can be receiving that income now and having a great place for mom and dad and/or yourself to live in.

I own and operate these homes in Arizona, but I train people all over the country how to do it in their own state. I own and operate homes. I train people how to operate the homes and the real estate as an investment. Where to do it, how to do it, all that part, but the business is where the real money is made in the operations of it and doing it correctly. The training itself, that’s what it is. There are people that literally want to invest. They want to get into this game. They don’t want to be an owner or operator. They want to invest money and get a return. We’ve already launched it, but there’s a company that we are creating, launching and moving out, which is just investing in these types of residential assisted living homes.

What are some ways in which people can get ahold of you? Where they can learn more about the academy or maybe some of the things that you’re up to, such as being able to learn more about this type of investment.

I’m going to give you three different things. RAL, which is residential assisted living. RALAcademy.com is our main website. The FamilyLegacyHomes.com, that’s the website that we’re launching for investing in these. If you want to learn more about what residential assisted living is, I’ve got a free introductory training that you can go to. It’s RAL101.com.

We’ll talk through what you have seen as the experience of your students that have gone and acquired homes and operated them. What their experience was? What their success was? What were some of their challenges? Also, segue into the importance of operations of this type of opportunity. How the investment opportunity you’re clearly setting up for 2019 is going to help with that and the business associated with it. Gene, I know personally quite a few people that have gone down to Phoenix and gone to your academy. I’ve seen some incredible successes. Do you mind maybe talking about the experience that you’ve seen with students?

Nobody moves into assisted living unless they need help. Click To Tweet

There are a lot of people that want to get into this business and that’s why they come to the training to learn which part of it they want to get in. I jokingly say it but I’m completely serious, “You’re all going to get involved in one way or the other.” Either own the real estate, the business, both or lie in a bed and write a check to somebody else who does. When they come, I always tell them one of the fastest ways to get started is to buy an existing business, an existing home with the business in it already. We call that paying for speed because you might spend $300,000 on the business plus whatever the value of the real estate is, but it’s cashflowing immediately.

Let’s say it’s getting you $10,000 a month in income, paying $300,000 for the business to earn that $10,000 a month and those numbers are real and they’re huge. To get that, that’s why they’re willing to pay the $300,000. In our training, we teach them what to look for if they want to buy that, what’s important, what to do, or what not to do. The other part of it is to instead of buying that existing business, come and we’ll show you how to buy the right house in the right location and start the business. It may take a year to get open, but you didn’t pay the $300,000 upfront. You may be paid a $100,000 along the way to get that house converted, get the business up and running to get to the same spot.

What’s been the experience because it sounds like a no-brainer as far as the direction that you would go to be able to cashflow right away at a high amount and getting the property ready. I’ll reverse that. You’re not going to cashflow right away. You’re going to spend some time converting it until you start to cashflow. The weight would be worth it.

For everybody reading, this is great because, Patrick, you and I had a little pre-conversation and I love the way you set it up because you said, “Tell me some of the problems people have.” The experiences that people have, if they do it right, everything can be beautiful. Here are some of the things that you can do wrong. Buying a property or a house that’s too small. If it’s only licensed for six residents, it’s hard to be profitable. If you’re charging $10,000 a person, you’re going to do fine. Normally in that six-bed facility, it’s hard. The only way to make money there is if you live in the house. You’re the manager. You’re the caregiver. It’s not what I’m teaching you how to do. It’s not what I encourage you to do.

Residential Assisted Living: The residential-assisted living is exactly what it says, residential; it’s a home.

On the other hand, somebody who says, “I’m going to buy an existing business,” they spend $2 million, $3 million on one that they could have created for a lot less than that if they took the time and took the effort to get to that point. They overpaid that knowing what to pay and where to do it. One of the biggest mistakes people make is picking the wrong location. That’s why we harp on that and make sure that people do it right. It’s location. A lot of people come to us and they say, “I’ve got a perfect house.” I look at the house and I say, “You’re right. It’s the perfect house. If you could move it 30 miles to the west or the east or something, you’re going to make money.” If it’s in the wrong location, you and I aren’t going to drive out to visit mom. The placement agents aren’t going to place somebody there in the home because they don’t want to drive 30 miles to get out to that house. The caregivers can’t get there because they don’t have a car and there’s no bus line. Location is critically important. I could go on and on. Some of the most successful students not only do they do exactly what we said, “Here’s where to do it, here’s how to do it, here’s how to get started,” but then they kept it going.

I remember when you were there with Robert Kiyosaki, we were in a room. He was literally yelling at us, “You’re being lazy if you’re not using other people’s money.” He drops the f-bomb all the time. We know that. Somebody asked a great question. He said, “What happens when you reach your goals? What do you do?” His response was brilliant. It was, “Keep on going”. It’s all about momentum. Our most successful students, not only did one doing it exactly the way we said, “Here’s how, here’s where, here’s all that,” but as soon as they got the first one there, right onto the second one, right onto the third one, they end up with five in a few years or nine within a few years. That momentum carrying them to where they want to get, that’s powerful.

Looking at those students, they understood that there was a huge opportunity. They learned from you as far as how to identify the right property. They also understood the business side of it, which was the operational side. We’re willing to do that. Obviously, one property may not be worth that, but doing multiple is where there’s a huge opportunity. Let’s segue into the last couple of pieces, which is, you now being able to offer something where people can participate in this opportunity but not necessarily have to be on an operator. They can be an investor. Let’s talk about that briefly and then we’ll end with something that I’ve done with the other Financial Fridays, which is you talking about the operations of these businesses that would support this type of investment. The experience that you’ve had over the years and where you see the most important pieces of operations.

Family Legacy Homes was created to give people the opportunity to invest in these projects. The reason why you’d want to invest in versus own operate is basically how hands off and how passive you want to be. The closer you are to it, the more work and effort you put in, the higher your return. If you want to be more passive, write a check and receive checks. Your rate of return, in this case, is still significant. If you want to be the operator, if you want to be hands-on, you’re going to get a much higher rate of return. What we do is basically we have students that are creating their homes. They’re buying the homes or building the homes or starting the business. They’re raising capital for it. We manage those people who have the capital and want to invest in those projects so they can participate that way. That’s the two sides of it. This one is getting the business up and running. This one is investing in. It’s a win-win for both of them. That’s what Family Legacy Homes’ goal is.

We're all going to die. Have a conversation with a good friend if you don't know about that, but the point is we're all going to pass away. Click To Tweet

We’ve had these discussions before where the opportunity previous to Family Legacy Homes wasn’t purely passive. There was an active element to it, but now you have a passive opportunity. This is where the control of a business is you’re delegating that to somebody else. Talk about how you developed your operational understanding in regards to this industry and how you’ve set up your team to be able to provide a successful opportunity.

I always like to start with the end in mind. If you’re going to be the investor, the first most important thing you’re looking for is a good operator. That’s where the end in mind. How did I get started? I was hands on. There was nobody to teach me how to do it. There was no RAL Academy. I went to a caregiver training, the actual school in Arizona. It’s 104 hours of training, TB test, background check. Not because I’m going to be a caregiver, but because I needed to know what those caregivers were going to know. From there, I hired a manager. The manager then hires the caregivers. They operate that business on a day-to-day basis. Frankly, as an investor, you don’t need to know any of that minutia. There’s so much detail that goes into what I simplified for you. There’s a manager. There are caregivers. Somebody needs to fill the home with those residents. There needs to be marketing to fill those beds. Keep them full and the relationships. Patrick, you and I were talking about how important it is to be able to communicate and relate to people because it’s not just the resident, but it’s the family, the kids, the grandkids and communicating with them effectively so that this operation, this business itself has so many moving parts.

A good operator is what you’re looking for. Somebody who understands the business from the smallest detail all the way through and understands how to delegate and give somebody else the authority to be able to operate. My manager, I might speak to her physically once a week. We may text back and forth three or four times a week. I’m as hands off of an operator as you possibly can be but I’ve got my fingers on everything. I’ve also got the right people in the right positions. They’ve got the empowerment, the ability to make decisions. They’ve got the finances to be able to carry out whatever it is they think needs to be done. It’s a well-oiled machine because of the way I’ve designed it to operate.

I would add to that you taught it. The best way to learn something is to teach it. If you taught it to hundreds and probably over a thousand by now. That’s the thing is you look at business understanding and scaling a business, which this is an example of that. Understanding how the processes at a fundamental level are vital. In this specific business, it’s not operations. It’s operations of a specific opportunity, but there’s so much of the personnel that needs to be in this specific persona having an attitude or perspective of life that is somewhat hard to find. You’ve experienced it, but I look at the impatience that exists in society. This is definitely not a position at one of the central homes that does this type of care if you want patients. That’s a recipe for disaster. Looking at an operator that understands the business, they can hire the right people, get everything coordinated is vital to the success because it’s very people intensive.

Residential Assisted Living: “You’re being lazy if you’re not using other people’s money.” – Robert Kiyosaki

I want to make sure the audience understands. Patrick is not suggesting, neither am I that you’d be a caregiver or the hands-on manager. What he’s saying is to oversee that operation, you need some insights, some encouragement and so on. It’s any business. Storage units might be the only one where it’s like, “Yes, you would have empty rooms and make sure the locks work. I can collect money and the heat works.” There are humans involved here. Don’t be afraid of the idea of hiring people either. There are a lot of amazing people out there who are looking for the right spot. One of the things, Patrick, that I always find interesting in this industry, the caregivers, the managers, they don’t want to be baristas. They don’t want to be a waitress. They don’t want to be something else. They want to take care of these seniors. We started this whole conversation with this doing good and helping others. It’s doing good and giving them the opportunity to help those seniors, the seniors get the help, and the families get the peace of mind. In the meantime, the money that is made is very significant.

It’s one of those successful investment comes from a successful business. The elements of your business of this industry, you’ve had it by hands-on experience, by teaching it. You know it’s successful and what isn’t. You know what a successful caregiver is, you know what isn’t. If people are making an investment, a return of that investment comes from people paying their rent and their family paying their rent, probably part of it. In order for it to be long-term successful, they have to keep paying rent and to keep being happy with the services that they’re getting. It’s one of those like it’s a business where it’s a massive opportunity, untapped opportunity. At the same time, it’s one of those things where you have to have the operations down. You have to have a business down and understand what success is and understand how to get it at a scalable level.

I wanted to touch on that because you said scalable. I want people to understand that one of these homes, the single-family home can generate enough income for most people to live very comfortably. We go through all the scenarios. Paying $10,000 a month after all expenses and income from one of these homes or residential assisted living home, most families can get by on that comfortably. You and I may be not, but most people can. If you had two or three of those in the same area, we get some of the economies to scale the management team itself, the caregivers and so on. Imagine two or three times that amount of money, it makes your life easier. It’s like having one child is hard, having three is almost easier. It truly is.

The concept of that, but now bigger picture scaling. There are students that I have that their goal is to do thousands of beds, hundreds of homes. Once you get to a certain level, then the big money. The big money that is not necessarily smart money. They’ve got a lot of money that wants to get into this niche, into this market right here. They’re willing to write really large checks. That’s what we’re gearing up for. Some of the students were coming through the training, building a big enough portfolio that the big guys are going to come in and pay multiples. That’ll be astronomic compared to what I would want to pay or willing to pay. They are. They do. That’s the end game. That’s two to five years out. This opportunity is coming to shore now. The Baby Boomers aren’t turning 82 for another ten years. You’re in the right place at the right time and this is the place to get in, absolutely.

Always start with the end in mind. Click To Tweet

Gene, I’m super excited for your success. We met shortly after you started. To see some of those that have gone through your academy and the success that they’ve had, it’s inspiring. It’s awesome that you’re taking it to a new level. Congratulations to you. Let’s give out ways in which our readers can learn more about you, follow you and learn more about the opportunity one more time.

RALAcademy.com and The Family Legacy Homes is the investment part. RAL101.com for free introductory training.

Gene, thank you so much. I can’t wait to hear about more of your success.

You too, Patrick. Thank you, everybody.

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About Gene Guarino

TWS FF 2 | Residential Assisted Living

Gene Guarino is a Certified Financial Planner in the US and in Australia. He is the President of the Residential Assisted Living Academy. He owns and operates Residential Assisted Living Homes in Phoenix and Scottsdale Arizona. Gene has been a real estate investor for over 30 years. He has owned and operated 16 businesses and has been an angel investor in numerous others. Gene has written 4 books and hosted 2 radio shows and has spoken to over 250,000 people in 4 countries over the past 20+ years on business and investing. Today Gene is focused on just one thing, Residential Assisted Living. With over 77,000,000 Baby Boomers coming of age, the need is greater than ever and getting bigger every day. Gene’s goal is to help those people and to train others to help them as well. To “Do Good and to Do Well.”

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Capitalism: Its Fundamental Truth And Moral Dimensions with Jason Rink

January 17, 2019 Patrick Donohoe 00:58:42 Comments Off

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TWS 2 | Capitalism

Capitalism is one of those esoteric terms in a sense that most people know but don’t understand what it means. Kicking off the year by doing a deep dive into this concept is Jason Rink, award-winning producer and director of documentary films, an author, a marketer, and a self-proclaimed capitalist. Jason talks about capitalism and how it relates to us individually. He also shares how he has come to believe its relevance and the magic it holds when understood properly. Toppling down some perspectives, Jason addresses some of the misconceptions that keep people from having rational conversations with each other about it. He gets down into the entire market economy together with money, trade, and survival as he bakes the fundamental truth and moral dimensions about capitalism that people have to realize.

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Capitalism: Its Fundamental Truth And Moral Dimensions with Jason Rink

This is one of our first episodes for season one 2019 where we are focused on the theme of capitalism. I decided to have one of my good friends, Jason Rink, to join me for this first guest episode. The reason why I brought Jason on is him and I have interacted and I consider him as an individual who understands the philosophy of capitalism better than most. He is a nonbiased party so there’s no institute behind his title or a book behind his title. He represented the concept of capitalism as far as this philosophy is concerned. All the different activities of his professional life in such a manner that this is going to be an invigorating conversation. Jason, you do so many different things. It’s hard to keep track of you sometimes but why don’t you introduce yourself?

First, I just want to thank you for having me on. I’m super stoked to have this conversation with you. I’m honored because your show has been around for so long. You’ve had so many different guests on it, people that I respect. You were telling me about some of the other people coming on this season and I’m like, “I’m surrounded by some giants.” I’m humbled to be a part of this. Part of my career, I was in commercial banking for years. When the bailout started happening in 2007 and 2008 and the financial crisis started to visit upon the US economy, I was working at Chase Bank in the Equipment Finance Division and in Business Banking. It was along that period of time I got introduced to Ron Paul.

I was not a political person at the time, but Ron Paul had some ideas that resonated with me personally. As I started looking into what he had to say about the Federal Reserve and started to say about Austrian economics, I started to get interested in these ideas. At the same time, I found myself here in the belly of the beast. As things started to go south during that 2008 crisis, I started to see, “Some of these things Ron Paul’s talking about are happening all around me.” I felt conflicted as well because here I am working for the Federal Reserve at the big banks. It was during that season of time that I started to dive deep into Austrian economics and monetary policy and some light reading on the side. That set me off on a course of being personally interested in these ideas.

Fast forward, I have a video production company. I’ve worked with a lot of free market-oriented think tanks and organizations because I support what they’re doing. I have done some work in the infinite banking realm with Nelson Nash. At the same time, I do a lot of work with some big brands like Toyota, Mazda and Aston Martin. I’m out in the world. I’m a business owner and I’m a capitalist. I’m out there creating jobs and generating income for my family. I’m applying the principles that I believe about free-market capitalism, sound money, and being smart with how I invest in preserving my capital and all of that. I’m doing it out in real life. It’s the lab for all the ideas that I’ve embraced.

That’s what’s going to be cool about this conversation. It is to talk about what you’re doing and the drive behind it that has to do with anything. Capitalism is one of those esoteric terms in a sense that most people know but don’t understand what it means. They don’t notice what it means as it relates to them individually. I met you during this same period of time at FreedomFest down in Las Vegas, which is put on by Mark Skousen. You at the time were part of the production team at the Tenth Amendment Center.

You can't take care of other people unless you take care of yourself first. Click To Tweet

It was 2012 because I had made a movie called Nullification with Tom Woods and Michael Bolden of the Tenth Amendment Center. It was all about the Tenth Amendment and the idea that the States have the right to push back against federal legislation that’s unconstitutional. It’s a controversial idea. That was the first feature-length documentary I ever made. I was at FreedomFest. My film was there and that’s when you and I had got connected first.

I was there at the little film festival that they do as part of the conference and I saw you there. It was that next winter in 2013 where we were at an industry event. I was walking along and I saw you. You had a very distinct glasses and you had a Tony Stark goatee. I was like, “You’re that guy.” That’s when we hit it off and then I saw you again at FreedomFest and from there, we’ve kept in contact. You’re part of the Prosperity Economics Movement that I work with. What links us is the ideas that we’re going to be discussing. That’s our backstory and this is where I want to go with the conversation.

From a very general standpoint, I wanted to talk about how you understand capitalism, why you’ve come to certain conclusions about its relevance, and how magical it is if properly understood. Address some of the misconceptions that are out there. It’s a misconception where people don’t understand it or have this idea about it but it’s a third in line behind religion and politics as far as discussion points. People feel so strongly about it where their emotions take over that belief and you can’t have a rational conversation with anybody about it. That’s how strong this topic is penetrating into the language and vernacular of the United States. I want to get into this confused sense of morality as why there’s this big Bernie push as well as Alexandria Ocasio-Cortez push. Why is it so appealing but why it’s the same drive as just the pure sense of capitalism? It’s not that there is a tall order to this conversation.

Let’s see if we could solve this thing and get both sides together hand-in-hand.

How do you understand capitalism and what’s the story behind that?

Capitalism: When we look at human beings and society, we all fundamentally have to find a way to survive and to provide for ourselves and for our families.

The word capitalism, people bring with certain understandings or ideas about the word. You can’t throw the word out there by itself. If you throw the word Trump out there, you’re going to get some polarized opinions. If you throw the word Jesus out there, you’re going to get polarized defendants and then all of a sudden there’s this other word, capitalism, and it’s almost as big of a grenade in a conversation. Digging back into my own understanding, I don’t think I ever had a negative perspective personally on capitalism. I was neutral on the idea.

When I started to dig into learning more about money and government, I started to recognize that a way to define capitalism that worked for me is I started to see it as the market or voluntary exchange. When I say the market, I’m even thinking at its smallest sense. When you go into a farmer’s market in a city where you’ve got all of these different entrepreneurs selling their goods: the vegetables, charcoal, toothpaste, candles and soap or whatever it is. The farmer’s market is the purest form of trade. I don’t think there’s anybody out there who looks at a farmer’s market and they’re like, “That’s an evil capitalist thing.” It is because this idea of the marketplace where people come together as buyers and sellers of their own free will voluntarily exchanging goods and services. That seems very normal. That resonates with this all at a human level. That is what I see as the fundamental truth that’s baked into the idea of capitalism.

There are so many different examples that we can cite but I want to reverse engineer the whole idea of a farmer’s market or a market in general where people come to exchange their goods and services. This comes down to the drive there. What’s the initiating drive for someone to go to a farmer’s market?

When we look at human beings and society, we all fundamentally have to find a way to survive and to provide for ourselves and for our families. The fundamental drive here is how am I going to generate the things that I need to live? When you go to that fundamental level, there are a couple of different ways we can do it. The primary way is for me to go out and try to gather together all of the different things that I need to survive, my food, my water, my shelter, all of those things and create them by myself through my own work and through my own hands. What you see is the way that this is developed throughout society logically when you look at how this all comes together. As people gather together in society, it turns out that some people are better at certain things and other things. We find ways to become more efficient. We find ways to become more effective at creating certain things and not other things.

What we do is we start to specialize in making certain things then we trade to other people for things that they create. This whole market economy or the flourishing of certain people specializing in certain skills and products and other people and then finding a way to exchange those things in the marketplace, that coming to life is a function of just trying to find the most efficient way to survive and to care for ourselves and to generate some leisure. Baked within this whole market thing are concepts of money, trade, survival, craftsmanship, and all of these things. That’s where it comes to life. The farmer’s market is the outgrowth of that development. It’s the development of social technology. If you think about what the marketplace is, it is a social technology. It’s something that makes it easier for us to survive on this planet.

We are much more likely to survive individually if we gathered together with others. Click To Tweet

If you look at the word that keeps coming to mind, what initiates is people want something. What is it that they want? I’m not even asking them what they want, it’s why do they want it? All human beings we are wired. This is going to sound not politically correct, but we’re wired to do what’s best in the best interest of ourselves. This is the nature of it. The politically correct thing which people look at morality is that we have a stewardship to take care of other people. That’s true to an extent. At the same time, you can’t take care of other people unless you take care of yourself first. The first thing is that the initiating drive is self-interest. It’s you as an individual because people are driven to survive but as you go up through the Maslow’s Hierarchy of Needs, it’s not the needs of a society, it’s the personal needs. Those are personal needs which start with physiological then they go to safety then to relationships. They go to self-esteem and to self-actualization. These are all personal needs that we are self-interested in. People are out there, they wake up in the morning and they’re the center of attention.

Even us gathering together in tribes, in groups or in societies is about self-preservation. What we find is that we are much more likely to survive individually if we gathered together with others to help us navigate the world that we’re in and nature. Even this idea of getting together with other people, that’s a self-interested drive that drives us there.

Going through the Hierarchy of Needs, it’s physiological. You need to eat, have some shelter and then you need some safety. What’s after that is relationships. Start with intimate relationships and then going to the communal type of relationships. Other people are a part of our makeup. It starts with us. It starts with our drive and everybody is this way. Everybody’s wired this way. What’s also fascinating is that we all are wired slightly different as to what we think is our best interests. That aligns with unique strengths, unique abilities, talents and so forth. The purest sense of capitalism is what provides us with the opportunity to go out there uninhibited and pursue what is best for us. It’s not like the capitalism word is in the Bible or the ancient scripts. This word came about right as the birth of our modern era toward the Scottish Enlightenment and around the Adam Smith period of time. Also, the Karl Marx and Friedrich Engels who wrote The Communist Manifesto. This is where the idea of capitalism started to be demonized. Also, you have some of the purest writings as far as societal morality with a lot of the Scottish Enlightenment.

Those thinkers gave birth to this idea of what happens to humanity if there is this structure in place in which people can take who they are, what they’re best at and operate for their self-interest. The end result is what provides people what’s best for them, the most selfish thing possible has to be able to provide the best thing for somebody else first. That’s where the confusion is where people are naturally self-interested. We want preservation, we seek all of these needs that I went through. What you pointed out is that as we have a community, most people are self-interested and get what they want. Other people are involved in that process. They’re benefited just as much as the initial individual with they’re trying to meet their self-interest.

The Communist Manifesto

We’re self-interested, we’re moving through the world in a way where we are looking after our own interests. However, it turns out that the best route to that is to find how we can create the most value for others in this marketplace. It’s an interesting design. For me, it’s a spiritual concept because I’m like, “This is incredible.” It’s this irony that like, “Here we are breathing out CO2 which is like poison. By the way, there are these things called plants that suck it in and then they generate this oxygen thing out of it. By the way, that’s what we need.” This whole market economy that’s based on, “How can I best serve other people that are going to bring the greatest amount of good back to myself?” It’s a paradox on one hand and on the other hand, it’s like, “Society in humanity has been engineered to function in this way.”

Once you start to see it that way, it becomes a beautiful thing. The Bernie Sanders of the world, they’re not out there railing against the farmer’s market to be clear. They’re railing against a more “complicated form of capitalism.” As our society has changed as it seems, it’s gotten much more complicated. In reality, the same fundamental principle is still at play. There are some new factors that have been introduced. Now we’ve got to navigate around in this marketplace in order for us to achieve those two basic goals and provide the most value to provide the greatest good for ourselves.

I’m going to go to a couple of principals then move to that point. This is where the most confusion exists in regard to the conflict of morality. Adam Smith is most known for his book, The Wealth of Nations. His first book is The Theory of Moral Sentiments. This is where he breaks down that people have a natural drive to understand and be moral. He calls it the impartial observer where there’s this angel on our shoulder when we’re tempted to do something that may be immoral. We think and we ask ourselves. It’s as if we have this observer on our shoulders looking at us and we’re caught in between, “Do I make this decision to do something dishonest or do I be honest and do the right thing?” How do we know it’s the right thing? There’s no board that says, “This is the right thing to do.” It’s like we have that wiring inside of us and then we have this compelling force to do the right thing that he calls the impartial observer.

Most people demonize capitalism because it exploits others where it takes advantage of others where a person benefits by making others worse. That’s where the biggest disconnect. The true nature of a capitalist is going out there, taking a risk and doing it because it meets some level of self-interest but other people have to benefit more so than the person that is creating whatever that goods and services in the first place. When you inhibit that, you inhibit human nature. You look at what stagnation occurs when you don’t allow a person to think and when you don’t allow them to figure things out.

When a person has removed from them the opportunity to figure things out, to survive and to figure out their life, it is one of the greatest harms cause on an individual. It is done all over the place with the banner of doing it as morality and as the right thing to do. The right thing to do is to give this person food and housing. Give them a structure and safety net. That’s not what makes us thrive, even though this confused sense for morality puts us in this where it makes sense. We need to give to them so that it helps them. Giving hand out, safety nets, food and whatever the case may be is where the biggest prevention of where human beings thrive. Maybe we gravitate toward that because you brought up this idea of what capitalism has become, which is more corporatism. Is that capitalism?

The further you go, the more there is the to unpack sometimes. On the one hand, we’ve got this idea at play where people don’t always act morally. People’s self-interest can be directed into a way that generates some negative results in culture and society. This has been a problem that’s been with us for a long time. There’s this balancing act where people left to their own devices will just run roughshod over everybody. If you can be powerful, you can dominate others and you can take advantage of others then, of course, you will. There is this other force at play and it’s from that, that this whole moral argument comes up. How do we best act together as a society and ensure that certain people are taken care of and other people aren’t taking advantage of others? It’s in that context that these discussions about government and the outgrowth of government end up being things like corporatism. Whether or not the government can serve as an impartial entity that can help take care of certain people or certain things. As we start peeling the layers of the onion, there’s all different social dynamics here.

The purest sense of capitalism is what provides us with the opportunity to go out there uninhibited and pursue what is best for us. Click To Tweet

One of the books I found most helpful in navigating this whole terrain was The Law by Bastiat. What was so useful about that book and why it’s one of the most important pieces of philosophical writing that I’ve come across is because it forces us to look at this idea of whether or not we, as individuals, can carry out certain actions as moral actions and whether we can delegate the immoral actions to another entity to carry them out on our behalf. When we start talking about this whole idea of morality and whether or not capitalism’s moral or whether or not we’re going to go about taking care of the needs of the less fortunate and things, you’ve got to wrestle with this idea. It’s because most people won’t look at carrying out theft or violence against another individual as a moral idea.

If I were to be violent against you to take something that’s yours and give it to somebody else, as a society we don’t see that as a moral good. Yet there is something that takes place when we take that same activity through a process of democracy or voting. We put it into this thing called government. It is run by people which are populated by flawed individuals. We’re worried about taking advantage of other people and being self-interested in running roughshod and then we just create this thing called a government. It’s supposed to become a neutral good entity that can then carry out what is the same thing, theft, and violence against others.

Somehow there’s a magic that occurs in that process that makes that moral. That feels a little bit of a rabbit trail but what I’m pointing to is this idea that we have a lot of people with different ideas about what government is and what force and violence is. Also, what the role of government is. When we start getting into these ideas about capitalism and the government gets involved in all these things, we start getting into a question about morality. We have some people on the side of the moral argument that says, “We can’t trust people and businesses to be moral. We can only trust the government. People are people and businesses are groups of people and governments are just groups of people.”

We’ve got the same problems all throughout that. What I hear going on in our society around this discussion of capitalism is that it’s more a discussion about who is moral, what institutions are moral, and what institutions have the incentives to be most moral. When we get into that discussion with this dance of me being self-interested yet having to serve and provide the most value in good for my fellow man, that’s accountability and an incentive structure that’s built into capitalism that generates the best out of me. What I see over here in this design of government is that that same accountability doesn’t exist because the government is based on a force. It’s extracting resources from this area and moving them over to this area, which is fundamentally an immoral activity.

The Wealth of Nations

You said it was a rabbit trail and I followed every piece. This is the crux of it. In the end, we all have to have an agreement that we as human beings, we’re all here trying to figure out the same thing. We all have flaws and we all make mistakes. The idea is do you try to create a system in which mistakes aren’t possible? That’s where the government goes and that’s where stagnation can be proven time and time again. Do you allow individuals to make those mistakes and then have the structure of the environment in which they’re making a mistake done in a way where the rights of others are as protected as possible?

The system now is very difficult to get away with doing something immoral, especially in a business sense. It’s being done quite often whether it’s hacking or cybersecurity issues or certain fraudulent businesses. Those don’t last very long and are weeded out very quickly because of how we’ve been able to share information. There’s a restaurant that I liked going through on the way into work and also going home instead of Chick-fil-A or other fast food type of restaurant if I have to get something on the fly. It’s like a health food store. I went in there and the Department of Health was in there doing their inspection.

It’s one of those things where it’s like, “If this place served in a dirty way and people got sick from it, they’re going to be out of business.” You have Google, you have Yelp and the word is going to spread quickly. It’s one of those things where the government is trying to play this role of the moral authority saying, “This is good and this is bad. You have to do what we say because we’re protecting people.” I would say, “I get that. It is a good intention but is there a better way to do it where you’re not taking away the rights of others?” I see the intentions of the government in that authority, but I also see the intention of individuals and special organizations. It comes down to what is the best structure to make the most amount of progress and create the most happiness and prosperity possible for humanity?

Maybe there was a time in which there needed to be certain government or some oversight or some protection or whatever. I’ll grant that to somebody. The question is whether or not anything’s changed. What is interesting is when you point to the things such as Yelp where there’s a mechanism for us to govern ourselves. When you think about what hierarchical government emerged out of it was because it was looked to solve some deficiencies in governing ourselves and holding ourselves accountable. I just want to look at how much has changed. You look at something that’s happening with Uber. The normalization of getting into cars with strangers to get rides, which is bizarre. I took an Uber in Uruguay. Years ago, I never would have thought of getting into a foreign country into a stranger’s vehicle, but the mechanism exists now that I can have total comfort in doing that. It’s brought the costs of transportation down. It has granted access to transportation to people who didn’t previously have it. It’s granted opportunities for employment to people who didn’t previously have it. It’s brought together all of these different things and it’s provided a solution. What’s interesting is who’s angry about it.

Who’s the moral authority?

It’s two-fold. On one hand, there is a company called Uber that’s got some things that they’ve developed. There’s also a function that empowers me as the rider and the driver to rate each other about that experience. There are a series of different checks on what’s happening within it. It’s not been put together by the government. The only thing that I’m seeing that’s top down in it is the company and they can only carry out the function if they’ve got the margins to do it.

The further you go, the more there is the to unpack. Click To Tweet

The moral element too is that if Uber wasn’t doing the right thing, they’d be out of business but they’re also providing a service. The reason why you were comfortable with it is that of the internal makeup of the feedback system, of that feedback loop. If you are in Uruguay and all drivers have one star, are you going to get a ride or are you going to go in a taxi or are you going to walk? There’s a built-in impartial observer that is saying, “You have to do the right thing. You’re not going to kidnap Jason and take $100 out of his wallet because the cost of doing that is so much more. What you gain from it is so much less than what you would gain by doing the right thing.”

You touched another aspect of this moral dimension, which is competition. Uber’s had a little bit of a rocky road because their CEO has run into some allegations about sexism in the workplace and some other things. Those may or may not be true or whatever. I don’t know the details but what I do know is that he was removed or stepped down as CEO. Lyft, on the other hand, started picking up a whole lot of more share in the marketplace. Here’s this other company that holds the whole thing accountable. They see an opportunity where like, “We can be better. We can be better people. We can run this company different.” That is not something you have to hold government accountable frankly.

You don’t because there’s no competition.

At the heart of capitalism is this other thing that’s brutal and it’s called competition. It is a force of nature. It eats the company’s and people’s lunches. It’s a force of moral good to make sure that the greatest value for the greatest number of people in the way that the market demands it.

The Law

There’s such a strong presence of what humanity is capable of but there are so much wisdom and potential in our minds. The issues and the challenges that exist now, whether it’s healthcare or nutrition, you can start to list all the different calamities that are out there. If there’s a problem, you would assume that there is a solution but in order to accomplish that solution, another person has to come up with that. The structure to best do that has always been the incentive a person has to do what’s best for themselves by first doing and figuring out a way to be of value to somebody else. The more of that exists and the quicker, we’re not only going to solve the existing problems that we have. There’s going to be more overall prosperity but here’s the deal. What did we solve in regard to problems? You solve the problem of people dying when they’re 35 or 40 years old and you created industrialism where you started to have more progress in society but there are other problems that occurred despite that. Those problems were solved and then there were more problems once those problems were solved and so on and so forth.

It’s always going to be part of the human experience. There are always going to be difficulties. There are always going to be challenges because we’re humans and we have that side of us. At the same time, the ultimate solution to that is right up in the mind of an individual. It’s the ideas they come up with and the incentive that they have to bring those ideas to the marketplace. When you inhibit and stifle that incentive, that is where the system breaks down. I’ll cite one example and then we can get into the other side which is the confused sense of morality. One of the examples I saw is when Facebook was put on trial. They went to Congress and had to explain to Congress certain elements of how Facebook worked. For better or for worse, has Facebook done some stuff they shouldn’t have done? Yes. They’ve done a tremendous amount of good. That wasn’t celebrated.

The good that they did as far as connecting the world wasn’t celebrated. What they were able to do as far as connecting families and connecting businesses and creating community accountability, that wasn’t celebrated. It was, “You’re taking people’s data and you’re taking private things,” which granted, that’s something that they did. The lack of understanding of what Facebook does was so surprising to me in the questioning. It was going back and forth of Zuckerberg not explaining what the whole privacy issue was about but having to explain what his business was. It just shows the complete disconnect of those type of individuals in that they’re not coming up with solutions. They are playing the role of God telling people what they should and shouldn’t do coming from a fallible place. That’s the idea of this morality. Is it moral for one infallible person to tell another to do or for an infallible person to figure out ways in which to provide value for others?

When we look into the different areas where most people are going to say that capitalism has failed or where we’re experiencing the negative impact of capitalism, when you start looking into most of the sectors that are being discussed, they tend to be the sectors that are most heavily regulated or that government has created the strongest cartels. You start getting into this whole other dimension of things that people don’t talk about which is this idea called regulatory capture. This idea that government or a body that oversees something, there’s an incentive to then capture that governing body and influence it for your own purposes.

This is one of the things that we saw when the mortgage crisis started to unfold. It turned out that the entities that were supposed to be rating the different bonds were paid off. They’re receiving fees from the people they’re supposed to be overseeing and that creates some other outcomes. In America, it’s been a long time since we haven’t been the richest nation on the planet, at least on paper. I don’t know what the P&L looks like. When you go to places where people have been living on under $1 a day and you start looking into the transformation and the human flourishing. The access to opportunity and capital that is happening in places where people had been living on under $1 a day and now those people and nations are rising over the last years.

The data shows that it has everything to do with the loosening and the expansion of opportunities that we’re defining as capitalism marketplace, being able to voluntarily exchange. In most of those places, it’s been the forces of government or cartels or the destruction of the value of the money that’s been making that prosperity be nothing but a dream. Alexandria Ocasio-Cortez and Bernie Sanders, they can talk about how bad we have it here in America and how bad capitalism is and something needs to be done because of the 1%. Everybody having that conversation in the United States is in the global 1% and always has been. It’s only because we’re so rich and prosperous and the fact that capitalism and human ingenuity can outperform and out create the forces that try to keep it at bay. We have the luxury to even talk about these ideas while the rest of the world is trying to figure out how to get out of those first couples of stages of the hierarchy of needs.

Life is always going to be challenging because we're humans. Click To Tweet

Why are the emotions so high than when it comes to these ideas? Why do yelling and screaming and emotional tirades seems you can’t have a rational conversation? Why are they so high?

Part of it is because they’re as good as it is. There is a problem and I do believe that there is an unlevel playing field in America and people see it. Some people are feeling that maybe in some areas it is more difficult to become wealthy to achieve the American dream and all of these things. Most people are not informed and they’re not educated. Most people are busy trying to work their jobs, care for their families and get a little bit of leisure time on the weekends. They’re not diving into Mises, Hayek, Bastiat and Adam Smith.

When the capitalism label is placed on the most visible people in organizations that are the richest in the nation, the label is misapplied. Most of the richest in America have taken advantage of regulatory capture in ways that aren’t necessarily good. People see that but they don’t see how it’s happened. The capitalism labels misapplied. It’s used by people in the media who have an agenda to try to demonize it and who wants to empower the government for certain other things. It’s an uneducated population in my estimation that doesn’t know the difference. That’s where the emotions get high because some people are struggling and envy is at play.

There’s nothing easier than us to look at somebody who’s got something we don’t have and for us to think that they’re doing something to get it. At the same time, there are things at play that have shifted the playing field away from the average person and the middle-class individual that needs to be addressed. It doesn’t need to be addressed to redistribution through government because that’s where the problem originates. People don’t want to look there. It’s easier to look at the corporate boogeyman than it is to look at the ballot box or it is to look at democracy, which we hold in such high regard.

The danger of this topic is you can go in so many different directions. I want to recap what you said and make a few comments. I want to pivot some influential things. You’ve already mentioned The Law by Frederic Bastiat and have some influential whether it’s books, people, podcasts that help you understand some of these principles. You’ve come to have a belief in a perspective of things that are atypical. You talked about playing field and also where things seem unfair and I look at the opportunity and also what people have. The opportunities that people have now are a lot more even than they’ve been in the past because of what people have access to.

Capitalism: The more personal the problems we have as a society are, the more local the governance and the policies are.

I was watching something where this guy, he wasn’t a trained chemist or physicist. He spent years doing it, he discovered how to extract sugar from plants that would replace the sugar that we have but also would create biofuel. He spent years doing it and came up with it and felt so strongly about it. It took him a number of years to get very prominent people on his board. Here’s a guy who didn’t graduate from MIT or didn’t graduate from Harvard and get an MBA or have a doctor or PhD behind his name. He went out and figured things out and used the resources that were available to him and created something amazing. They’re saying it’s going to revolutionize just food, fuel and emissions. My point is people are all wired differently. If we agree to that, not everybody’s going to have the same life. Why would you want the same life? It’s all different. I see some of the things that come from us being in this communication-rich society where we see others, we see their life, and we see what they have. We see the things that they do and there’s envy there. The thing is there’s never going to be equality when it comes to what people have. The equality is always going to be in the environment in a sense, but people are all different. How you’re wired to bring value to the marketplace isn’t who you are right now but it’s who you develop yourself into.

This guy spent years doing it. He just didn’t wake up one morning and suddenly he’s going to become a billionaire. There was so much that went into that. The development of his passion and skills and strengths, his drive to go out there and create an organization and create community and hire people, there was so much effort behind that to provide value in the marketplace. That’s where I would say there’s this use of equality where the rich have all of this and you don’t, and you’re entitled to that. They shouldn’t have that, you should have that. This goes to politicians and people playing God that they’re not fallible and they’re going to come to figure out the best way to distribute all the different resources. It’s such a toxic thing where you lob humanity in a sense and that goes on because it is occurring. Money is taken from people involuntarily and distributed to different programs, which in a sense looks so inhumane. Why wouldn’t we give them food stamps or why wouldn’t we provide housing for them? I agree that there are certain circumstances but at the same time, people are wired to figure life out. They’re not wired to have things done for them where they just sit in their house and do nothing.

There are exceptions for this. The best thing that’s happened for me is being on the brink of poverty, being on the brink of bankruptcy. Being on the brink of not being able to feed my family. If everything was taken care of for me, I would never have learned anywhere near the lessons that I’ve learned. This is where we all have to as far as capitalism understand how powerful it is. We all have to understand that we’re all fallible. We all have to understand that there’s no such thing as perfect in this life. This doesn’t exist and it’s never going to exist in government’s and it’s never going to exist with pure capitalism.

At the same time, what is the most humane thing to do and what is the fairest? The fairest is to protect people from their natural rights, the life, liberty and property but at that same time, the problems are not on the shoulders of government to figure out. Problems in the purest sense when it comes to capitalism are for individuals to operate in a system where their mind works. They can come up with ideas and there’s friction in that process. Look at what we have seen in humanity over the last 50 years or even the last ten years and how much that’s improved our lives. It all originated from an idea in a person’s head and them acting on that idea. There are these principles of capitalism wired into our society but at the same time, there’s a big force against it which is trying to rob some of those liberties. That was how I looked at some of the things that you said. You have some of the final comments and words and then talk about some of the more inspirational things that have helped you understand this perspective that you have and we both share.

I saw an article where it was like, “Fidel Castro’s grandson’s Instagram feed was felt like leaked.” He’s on yachts and hanging out with babes and he’s living in Europe. What’s been generally true is that in societies where these more collectivist, socialist type of economic policies have taken root, there’s almost always a class of people who sit on top of that system. They live exactly like the people that were being demonized in order to get that system put together. We’ve got a lot of examples we can look around at in the world with what’s going on in Venezuela, Cuba, or whatever. We’ve got the ability to see what’s happening in other places. I just hope that we can see and look at the lessons of other countries and other times and use that to discern where we should go as a society.

There's nothing easier than looking at somebody who's got something we don't have and think that they're doing something to get it. Click To Tweet

It brings us full circle back to the film I made, Nullification. When we start getting into these issues, Nullification was very much about this idea of federalism. The more personal the problems we have as a society are, the more local the governance and the more localized the policies are. We should wrestle through those problems instead of looking to establish one-size-fits-all legislation and policies to go over 330 million people in one country. In that whole process, as more and more power has been sucked up to Washington DC, we’ve lost a lot of community and humanity in our own cities, neighborhoods and towns.

The front porch communities of old don’t exist much anymore. We don’t know our neighbors, and this is all related to the idea of how we are designed to be our brother’s keeper. It is for us to take care of one another and to look after one another from a voluntary sense and not only through capitalism. Capitalism is the way but there is something in us that we are wired to care for those in our tribe. I see a lot of what’s going on as a result of a breakdown in that. I see the tribalism that’s happening on the national political level and the ugly politics. All of that comes back to remind me that ultimately we are responsible for our own humanity. We’re responsible for the way in which we carry ourselves and demonstrate the moral code that we would like to see demonstrated by others. It’s the most fundamental idea.

I’m on the board of an organization called the Libertarian Christian Institute. We have a podcast as well and we’ve had 100 episodes. Part of what’s driven us as an organization and me to be a part of it is because we want to talk about the ideas of capitalism from a very moral Jesus-centered perspective. When I think about what’s influenced me, I am very influenced by the Bible in the treatment of money and in the treatment of capitalism. The word doesn’t appear but a lot of principles of capitalism are very evident. If you had Larry Reed on, he could say about that. The book that he puts out, Was Jesus a Socialist? is a great little book to read on this idea.

The other things that have impacted me are talking with other entrepreneurs. As I become an entrepreneur, as I’ve seen what that takes, I’m a believer that not everybody is designed to be an entrepreneur. We’re all wired differently. I’ve talked to more and more entrepreneurs and learned more about who’s out in the world creating businesses. I echo your sentiment that there’s never been more opportunity and I also believe that the more entrepreneurs you’ve talked to, the more you can see them as true heroes. Entrepreneurs are creating value, they’re creating jobs and new ideas that as a society and as a world, we are solving all of the problems together for one another. That’s what’s inspiring me to spend time looking at, reading about and talking to other entrepreneurs. Also, the people who are capitalists that are out in the world to see what they’re up to and the problems that they’re solving in society.

The Theory of Moral Sentiments

One of the things that you said that resonated is echoed from The Theory of Moral Sentiments, that original work by Adam Smith where people are driven. That’s this innate thing that we have to take care of one another. However, doing it involuntarily, being forced to take care of somebody else, you don’t have that same drive and it goes to Christianity where are the two greatest commandments. Those commandments of loving, it’s loving others but also loving others as we love ourselves. It incorporates the idea of understanding ourselves and our role in society and humanity. Capitalism is not this high-level thing that’s associated with a society or a country. It’s very individual and if you understand what those principles are, it could give you a different perspective on what you do on a day-to-day basis. Understand your relationship with yourself but also understand your relationship with others and how others help you but how you could potentially help others.

From a group side of things or a bigger picture, understanding these principles and then aligning yourself with other individuals does help our community and our society adhere to them on a higher level more so than there exists now. People are not reading, they’re not thinking, they’re not having conversations around these types of macro topics. It’s around the very superficial thing that allows the creeping in of the ideas of being forced to be moral. It’s that Robin Hood mentality where you rob from the haves to give to the have nots because they don’t have, and we should take care of them. We won’t go down that rabbit trail, but I’ll give you the final word.

Patrick, I’m going to take an opportunity to plug you a little bit. One thing that needs to be true is people need to take responsibility for their own financial autonomy. People need to surround themselves by other people who can help them to become more autonomous and more in control of their own financial future, destiny and access to the capital that they need to be able to fulfill on whatever the dream, the idea or the mission is that they’ve got out there. At the heart of all of what we’re talking about, I would see it as very immoral for me to ever throw up an obstacle in the way of somebody else trying to fulfill on what they believe their mission, purpose and calling is in this world.

It turns out that often that has to do with the work that we do in the world because we’re wired for service. The work that you’re doing in the Prosperity Economics Movement, the work that you’re doing through Paradigm Life, I see that as something that empowers and grants people the tools. Not only the tools of knowledge but real financial tools to be able to achieve those things and to become an entrepreneur, to become a steward of the resources they have. Whether it is to give, to solve the world’s problems through entrepreneurship or whatever it is, they can be the captain of their own destiny. That’s all I got to say. I enjoy the time we can speak together. I wish you the best.

Thank you. We’ve known each other for several years and you have some incredible creative talents and you’ve been able to own it. You were doing a little freelance stuff here and there when we first met but mostly working for others. You’ve taken the entrepreneurial calling that has been inside you for a long time and you owned it. You took some risks and went out there and you’ve been incredibly successful. If anyone wants some video or marketing work done, Jason’s your man. It’s JasonRink.com and they can follow you in your social media where you’re very active. Jason, you’re the man. Thanks a ton for being on and having this cool conversation with me.

Thanks.

Make sure you stick with us because we have some more scintillating information and conversation about capitalism. Take care.

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About Jason Rink

TWS 2 | Capitalism Jason Rink is an award-winning producer and director of documentary films, an author, a marketer, and a self-proclaimed Capitalist. Prior to starting his own company, he spent 10 years in commercial banking, and four years as a producer and director at Emergent Order, a creative agency in Austin, Texas. Jason has worked with Academy Award-winning actor Richard Dreyfuss, Congressman Ron Paul, Senator Rand Paul, and brands such as Aston Martin, the Charles Koch Institute, and Mercer.

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CEO Paradigm Life

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Patrick Donohoe

Positive Psychology: Creating What We Imagine with Dr. Paul Jenkins

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Positive Psychology: Creating What We Imagine with Dr. Paul Jenkins

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About Dr. Paul Jenkins

Building A Community Through Affordable Housing with Andrew Lanoie

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Building A Community Through Affordable Housing with Andrew Lanoie

Financial Friday

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The Philosophy And Principles of Capitalism with Yaron Brook

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The Philosophy And Principles of Capitalism with Yaron Brook

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Using Investments to Navigate the Silver Tsunami with Gene Guarino

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Using Investments to Navigate the Silver Tsunami with Gene Guarino

Financial Friday

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Capitalism: Its Fundamental Truth And Moral Dimensions with Jason Rink

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Capitalism: Its Fundamental Truth And Moral Dimensions with Jason Rink

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Patrick Donohoe

CEO Paradigm Life

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