We are right smack in the middle of a crisis, and we are yet to see some ripple effects that will profoundly impact almost every aspect of our lives. Now is the time to be prepared and take some essential financial actions that will allow you to seize the opportunities that come once the worst is over. In the first episode of this two-part series, Patrick Donohoe elaborates two of the five things you can do to make the best, financially speaking, of the opportunity the current crisis presents. He talks about having the right state and mindset and creating a structure from which you can anchor your goals on. Join in and be prepared to make the best out of the situation and thrive in the post-crisis world.
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Top 5 Financial Actions You Can Do During Times Of Crisis (Part 1)
I’m doing this one solo. There are going to be two parts. The first part is going to be probably number 1 and 2 of what I consider the Top Financial Actions to Take During Times of Crisis. Part two will consist of the Final Three Actions During Times of Crisis. I felt it was important to speak about this. The guests that I’ve had on before, we’ve all spoken to what’s going on with regards to COVID-19. The disruption to the economy. As I’ve had some time to digest, to think about, what is going on? What are the ripple effects based on this rock in the water? How long is it going to last? What are they going to be? What to pay attention to? I’m finally ready to start speaking to that. Things that you as an audience can do to prepare yourself to capitalize on the situation. That’s what I’m going to start into. There are a lot of updates that we’ve been making through the show. We’re creating our resources page for you. You can find it at TheWealthStandard.com. It consists of some of the businesses of guests that we’ve had. It also consists of courses that I’ve done. Let’s go ahead and get into it.
As I look back the world has changed dramatically and it’s happened quickly. I remember 2008, 2009 where I was in some pretty rough shape. I was starting a business and having the financial crisis in sue, it felt quick. It was one week after another week, and it continued to get worse then it gets better. It was one step forward, three steps back. I look at where we’re at as a society and it’s been interesting. It’s easy to talk about the things that you can’t control. It’s easy to put blame on media. It’s easy to say this or that regarding where the virus came from and what China did or didn’t do? What the president should or shouldn’t have done? There are many things that we focus our attention on that we have no control over.
I got caught up in that and I get it. These are some dire times and often when we start to hear statistics and soundbites, it engages this unconscious part of who we are and we start to react to things. I’ve caught myself to that a number of times. At the same time, the guests that we’ve had on and what we’ve talked about, as well as some of the material that I’m reading, videos that I’m watching with a lot of time to study and reflect that I didn’t necessarily have before. I’ve come to at least conclusions to the point of, “What can you do to influence your life?” Some things that you can do, you can control things to be aware of so you can make the best of this and you can capitalize on this opportunity.
Firstly I’m going to dive into is, we’re going to be experiencing some ripple effects. What’s a ripple effect? Ripple effect is, a drop us a stone in the water or rock in the water. You can even have an earthquake under the ocean and you have a tsunami. There’s obviously a spectrum of how big a ripple could be, the magnitude of a ripple. We don’t realize that it wasn’t an earthquake of sorts. It wasn’t a pebble or a rock in the water. It was an earthquake. The earthquake waves are still coming. Some of the statistics that represent this is, if you look at quarter one January, February, and March, we only had disruption to the first quarter in the latter part of March. If you look at productivity, there are different measurements of productivity of people.
The Bureau of Labor Statistics has a couple of them. It was down in quarter one by negative 2.5% which is huge. You have the velocity of money not to get into the complexities of it. When I spend $1 at a coffee shop, the coffee shop then pays their employees and the employers spend money, and then the businesses that the employees spend money. There’s this money multiplier. M2, which is one of the common ways to measure the velocity of money has also gone down significantly, and the stimulus that is done. Whether it’s quantitative easing since 2008, whether it’s what they’re doing now, it’s not working at all. It’s keeping things at bay.
We had some employment figures out, which were shy of 15%, but it didn’t take into consideration some critical weeks. There are estimates that unemployment’s 20%, 25%, maybe even more when you count underemployed in there. GDP is going to take a massive hit because nobody’s out. Nobody’s spending. That right there is going to be a big indicator as to how severe, what the magnitude of this earthquake is. The psychological impact that we’ve experienced. I was talking to my parents, they live in Massachusetts and it’s different here in Utah. I’m from Connecticut, partly from Massachusetts. There’s a term called “maskhole” and it’s coming out when it comes to the masks.
My dad got shootout by these old ladies when he was standing in line and he goes down the wrong aisle or doesn’t go the right way in the aisle. The psychological damage where people are afraid. Whether there’s a reason for that or not, it’s the fact that there is psychological damage associated with people washing their hands, wearing a mask. There are some psychological things that are going to inhibit business, whether it’s theaters, transportation, going to stores in general, people interacting, which is going to have long-term effects. You also have travel. We’ve become this connected world.
This idea of globalization where different countries are doing different tasks. We’ve created a global supply chain because of it. Demand comes from this country, but yet a piece is manufactured in China, in Europe, in South America, Africa and everything comes together. That’s all been disrupted. The earthquake is hit but we haven’t seen the waves. We’ve seen some ripples or maybe some signals as to what’s coming. There are many different reasons why we could be concerned for all of this. These are things that are outside of our control. On this show, I’m going to keep repeating this, it’s based on things that are within our control, having the information that we have.
It’s powerful to look at this from how I view things because I’ve gone through some difficult times, but these are difficult times and nobody’s ever gone through. It will be interesting to see how humanity rises to the occasion. We’ve talked about the idea of creative destruction. Joseph Schumpeter, the idea that, “When there are massive disruptions, humanity rises.” Humanity is going to rise. I know that they’re going to rise. They’ve done it for millennia, they’re going to do it again and figure out ways to be more efficient, ways to create a product, and ways to create the new ways of being entertained and the list goes on and on.
The biggest thing I would say is as this disruption occurs, it’s in a person’s mind as far as what they think something means. The meaning of things is being created by the populous and collective. That’s why it’s important to have your own individual perspective information, trying to prove and disprove not just your opinion, but other opinions so that you can come to the truth. If you could do this, it is known that these are the times where the greatest opportunities are. There’s a field of study called Behavioral Economics, which talks about how people behave around money. It relates to everything.
Financial Actions: The psychological impact associated with this crisis is going to have long-term effects on business and human interaction.
It’s behavior in general as far as stimulus and then the response, what a person does given a set of circumstances that they are exposed to. There is a curve. The curve that I’m going to post is the investor mentality, but I’d also say it’s the business mentality because, during these times, there’s a story going on in people’s minds. We’re going to go back to the way it was. We’ll be able to hang on for a month and then we’ll do a lot of business and be able to pick up there. Businesses are going into the hole. It’s hanging on, hoping that things come back. This curve states that the point of maximum financial risk is where there is maximum euphoria. The whole idea of nobody buys low and sells high, everybody buys high and sells low.
I often post at my other company Paradigm Life our eLearning in our courses called the Dalbar Report. Dalbar is an independent research group. It studies the average returns people receive. It’s mainly alluding to the impact of human behavior when it comes to rates of return, not necessarily market indexes. These emotional stages that you euphoria where everyone thinks everything’s amazing this is leading up to 2020. 2019 was an amazing year for people, investors, markets, businesses, capital, and liquidity. This is the next stage of the curve, which is anxiety and denial. There’s some anxiety now. You started to see sell-off, but there’s like, “I need to get back to work.”
You see people protesting. Denial that this is going to have a long-term impact. Fear is the next stage and then it’s desperation. These three are the ones to pay attention to, denial, fear, and desperation because they can oscillate back and forth. After desperation is panic. I don’t think we’ve seen desperation yet. There’s the next stage, which is the capitulation. Maybe the investment and this business isn’t right for me. You start to see people file bankruptcy and retire early. You have despondency and between despondency and the next phase, which is depression, this is the point of maximum financial opportunity.
State And Mindset
There are other perspectives as far as this is concerned but this curve is consistent with how humans behave. Most of our behavior is unconscious. It’s pre-programmed and we operate in a similar way. That’s why this field of study has been created. That is number one, as far as what you can do to prepare yourself to capitalize on this opportunity, which is state and mindset. I consider this being the watchman at the gate of your mind. What does that mean? I’ve tried to structure the way in which I lead, do podcasts, speak, show up for my family, and show up for myself, is in a sequence. The sequence is state, story and strategy.
State is something I’ve discussed in the show. State is a function of our physical well-being, where we’re focused, and the language that we use. It’s how we describe things. There’s a difference between like, “Crap,” and “Wow, this is interesting.” Even though it can be applied to the same situation. I also look at focus. It’s what I have, not what’s missing. What I’ve gained, not what I’ve lost. You can look at anything, any situation, any circumstance, and find that there is something you will gain from it. This is all unconscious, at the same time most people gravitate toward what they’ve lost. For me, what I’ve focused my attention on and improving is my leadership capabilities, my leadership state.
Being in a zone so that I show up for my team, the audience, and my family because I know that most people are not going to respond in a strategic way. They’re going to respond in a carnal instinct way. How do you do this? First off, you’re going to recognize that there’s going to be way more bad news than there has been already and a lot of it is going to be economic. The economic is going to cause even more ripple effects. It’s a main ripple effect and then multiple ripple effects. As some of you know who’d been reading, when we started to shut down, I sent my office home when we had an almost 6.0 magnitude earthquake. I was here in the office. I was the only one. The building was shaking and swaying back and forth. It was crazy.
The reason why I brought that up is that there have been aftershocks and there’s still going on. It freaks my wife and dog out. For me, I look at, “We’re going to get a lot of aftershocks.” When the earthquake hit, we’re going to have a tsunami, ripple effects, and aftershocks. Those are going to carry ripple effects as well. The worst has not been seen yet in my opinion, from an economic standpoint. I look at being prepared, being in the right state of mind, is going to position you to create a tremendous amount of value for people and capitalize on some amazing opportunities. People will identify leaders more in this environment than in any other environment. In the euphoria environment, it’s difficult to stand out as a good leader.
In times of crisis when difficult decisions need to be made, that is when true leadership steps up and is identified. It’s the yin and the yang. The more severe the state of things in the environment, the more it creates like, “That person is an amazing leader.” The other end of the spectrum is also extended. We’re seeing murders, suicides, home invasions, and tons of crime. People are going stir crazy. The emotional intelligence that exists in people is low. What that does is present a huge opportunity for you to step up as a leader and help a lot of people with who you are in the state that you’re in.
The idea of state leads the story. When you’re in the right state when you’re looking at the glass half full as opposed to half empty. What you have versus what’s missing, what you’re grateful for as opposed to what you haven’t been given or what you deserve or you feel entitled to, it’s also one of those ideas of words because words describe what our story is. What words are we using? Are you using unbelievable or are you using, “This is horrible?” Unbelievable is a word that can connote whether good or bad. At the same time, it doesn’t have the tone or the psychology piece to it to be bad. It’s carefully choosing your words.
Being the watchman at the gate, not letting those thoughts come in, knowing how to position yourself so you can do something about it. The final thing that I would say in regards to a state in mindset is another sequence. The state that you’re in, your physical well-being, what you’re focused on, the language that you’re using, the story that you’re telling. What is going on? It’s disruption. This is a great opportunity. I have a lot of opportunities to serve. Finally it’s strategy. It comes down to the how. First define what the how is, what is the outcome that you’re looking for?
Financial Actions: Being in the right state of mind is going to position you to create a tremendous amount of value for people and capitalize on amazing opportunities.
You start to create your game plan based on that, but you don’t create the game plan before you’re in state and then have the right story associated with it. The final thing is, another sequence that I’ve been using a tremendous amount, especially when it comes to financial advising, are principles, processes and products. Principles are laws of sorts. Gravity is a principle of nature. Honesty is a principle of morality. You also look at other principles when it comes to finance, interest rates, and evaluations. There are principles out there that can be identified. There are also principles of commerce exchange, exchanging with one another, exchanging your services and getting something in return. You also look at principles in people.
People are the true assets. I look at relationships as some of the most valuable assets. Its processes, which is the structure of things. This is going to be number two. Number one is state in mindset. The reason why I want to use structure is because there’s only so much energy we have during the day. It’s an allotment of energy and keeping yourself healthy, keeping your head and I’m going to get into some structure and some strategy as far as how to do that. Being able to have energy focused on the dynamic. Not the approach reoccurring or recurring, but the dynamic, it’s powerful. That’s why structure is powerful because you can set yourself up so that you don’t have to think about things.
Things are done in a certain way. You have a routine, you have habits that allow for all the energy to be focused on dynamic things the day-to-day decisions that you maybe didn’t have to make the day before. The decisions for an opportunity, new content, and ways in which you can be a better leader and do those things. It’s establishing essentially a structure so that all of the routine things you do on a daily basis are pre-programmed. You don’t have to waste your energy on that. An example I heard maybe to illustrate this point is, when we get up in the morning with an alarm clock, the buzz when that goes off, it ignites in every human being an adrenaline rush.
Our DNA associates that sound the same way you would associate being attacked by a Saber-toothed tiger 10,000 years ago. When that happens, it jars us out of bed and expands the majority of our adrenaline, testosterone, those chemicals that have our body respond that way are expended for the day and they’re gone. There’s a strategy there as far as waking up with peaceful music, which doesn’t necessarily waste those valuable chemicals that you expend and allows you to apply those at different points during the day. What I would challenge you to do is, start to establish a structure for this summer. The next few months are critical. Some of the hardest times are going to come after the reportings from Q2 or quarter two ends in June. The reports usually come out mid to end of July. Creating all of this now is going to prepare you. When a lot of these things go sideways, you have structure, you’re not trying to figure it out then. It’s optimizing your energy.
Craig Ballantyne who wrote The Perfect Day Formula is applicable. Some of you maybe had your routine and it wasn’t necessarily as valuable as it should be. Revisiting daily routine, structuring your day, and your priorities. Perfect Day Formula from Craig Ballantyne is ideal for that because Craig is a genius at that. He’s done that with many entrepreneurs and business owners. It’s a short book and it’s simple. Perfect Day Formula as a resource there where you can start to structure your day and you systematize the predictable. There’s a saying that we started using with my other company Paradigm as how we’re operating and what we’re looking for as far as opportunities are concerned. It’s a saying by the Four Seasons Hotel, which is called “Systematize the predictable so that you can humanize the exceptional.” What that means is, it’s all those routine things that you do on a daily basis. It’s the setup structure for those things. One way in which I have re-evaluated my goals to finalize the redo of some of my annual goals. The way in which I’ve done that is using what’s called the Wheel of Life, which is a self-assessment.
The Wheel of Life is essentially a wheel in which you rate the different aspects of your life, your physical well-being, financial well-being, mental well-being, spiritual, relationships and physical situation. You rate yourself there and it starts to help you evaluate where the areas are that you can make the biggest difference in. You start to create your goals and your routine around that.This is important because the goals that you may have set, they’re probably not realistic anymore given that the environment has changed, at least not all of them. That’s why I’ve reevaluated all of my goals. Looking at establishing where those goals are, that’s going to help propel the daily routine.
Craig talks about it in The Perfect Day Formula, you can start to chip away at some of those goals and have something simple to do on a daily basis and make those micro improvements toward the end results. The morning routine as far as structure is concerned is huge. I’ve redone my morning routine. I come to an office and there’s nobody here. It’s completely quiet and dark. Everybody’s working from home. We have a daily standup with my team, but it’s given me the opportunity to not have any distraction or disruption. I always get the knock on the door when I’m in the middle of something. I don’t turn people away. It’s one of those things where it’s allowed me a lot of time too to be consistent with some of the things that I find valuable.
What I started using is a neurofeedback device called Muse. Muse is a feedback part of meditation. What it does is it allows you to see where you’re at when it comes to your mindset. It’s not expensive at all. I do it on a daily basis. What it does is it shows you where your brain activity is with sounds. When you’re active, all over the place and thinking about this and this, you’re in an active mindset and it measures that by the severity of weather in the environment. You have to wear earphones associated with it, but you’ve got the desert, the rainforest, and the ocean. There’s one that’s general sounds, but when you are active, not calm and not focused, the weather is all over the place. What it does is, the weather and it gets less severe and calm the calmer you get. Eventually, you have birds that start chirping when you are calm and in the zone.
There are days where I don’t get any birds or 1 or 2. There are days where I get 50, and this is in a ten-minute timeframe. What it does, it gives you feedback so that you’re not telling yourself stories. It gives you actual feedback so that you know where you’re at and you know how much time and attention you have to focus on your meditation, your gratitude getting in the zone. That’s one thing that I’ve started doing. Now that I have my goal is getting restructured, I’m sitting back and once I’m in the zone, I start to ask myself strategic questions.
These questions, you don’t have to ask them all in one day. I usually ask 1 or 2 per day. I learned this from Keith Cunningham, Keys to the Vault and there are a few other books that he’s written. The questions are insightful and asking yourself these questions in the wrong state can be catastrophic. That’s why being in the right state, doing meditation, getting in that zone is powerful. The questions are like, “What do I want? What in my control is preventing me from achieving that? What don’t I see? What if I’m wrong? What is the result that I would be ecstatic about? How can I make the biggest difference? How can I be the best conversation on somebody’s day? Who do I need to call? Who do I need to write? Who would benefit from a conversation with me?” This is a big one. Maybe a whole thinking session dedicated to this. “Why am I paid? What must I believe about myself to be paid more? What are the ways I can go above and beyond what is expected that I am not paid for?”
Financial Actions: Structure is powerful because you can set yourself up so that you don’t have to think about certain things.
Here are a few others. “What is the least amount I can earn and live an unbelievable life? What am I spending money on that is not producing the result I want? If I could devote time to one thing, what would it be? What about if my life gave me tremendous enjoyment many years ago but doesn’t now? Is there an opportunity there?” These are a few. These are profound, insightful questions that you can find online. It may not feel like it’s that significant, but asking yourself these questions creates tremendous breakthrough and insight as to where opportunities are. The reason why I wanted to start here these first 2 of 5 things to do in a financial crisis, is because being in the right state, having the right mindset and then structuring your day so that all the different routine, things that you do, don’t expend any unnecessary energy. It will position you for making the best decisions given what’s going on.
The next three are going to be cash and cashflow, dry powder and investments, and assets. I wanted to cover this again because it sets the stage for where the opportunities are, as well as a dry powder, which is more opportunity fund. If you are familiar with the language I use in the book, Heads I Win, Tails You Lose. Finally, investments and assets and we’re going to revisit the financial, the behavioral economics curve when it comes to most the collective state of mind. Where in that state of mind are the best opportunities and the worst opportunities to make a decision or take action on something? Thank you for reading this episode. I will talk to you next time. Take care.
Today, more than ever, we all need to learn to create value for ourselves instead of relying on the system to work for our benefit. We need to rethink how we align our personal finances to achieve genuine happiness. For Garrett Gunderson, societal agreements anchored on materialism and consumerism are what hold us back from creating real wealth for ourselves. A keynote speaker, bestselling author, and the Founder of Wealth Factory, Garrett joins Patrick Donohoe in this episode to talk about what truly makes us valuable as human beings and how we can make our finances work towards that end. On top of all that, he also gives sound and practical financial advice to everyone as we brace ourselves for the inevitable economic impact of the COVID-19 crisis.
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Creating Value During Times Of Crisis With Garrett Gunderson
My guest is a great friend. His name is Garrett Gunderson. He’s the Chief Wealth Architect at Wealth Factory and the author of Killing Sacred Cows, a New York Times bestseller. He also co-wrote What Would the Rockefellers Do? and The 5 Day Weekend. He is also a contributor to Forbes. I’ve known Garrett for a long time. He’s been on the show before. Knowing him for the better part of several years, I wanted to have him here to discuss what he’s seeing and his perspective is regarding the current state of the economy, where it is going, what he is hearing, seeing, and listening to? I was also curious about our response to some of his more controversial videos as well as Forbes articles. It’s a great episode. You are going to enjoy it. Make sure you visit Garrett’s website, WealthFactory.com. He also has a great YouTube channel, YouTube.com/garrettgundersontv.
I’m glad you’re still talking to me after I brought you to my house to work out.
I still think about that. Coincidentally, I haven’t had much of an extreme response to a workout because I got into biking. I crashed my bike coming down to City Creek Canyon. The good memories are the most painful.
One of our mutual friends I went with, I did the Wasatch Crest with Garrett White and I broke my elbow on that. I got a concussion.
We’ve got to get this story about the workout. We live close to each other and I don’t even know how it happened. You’re like, “You should come and work out at my house.” I’m like, “Alright.” I go to your house and you have this amazing set up in your basement and then you have this big blackboard. It has times on there and apparently, there’s a challenge.
It’s 60 seconds because it sounds easy when you say 60 seconds.
It’s 60 seconds of Airdyne which is those bikes that have a fan on it. How many calories do you have to do, 30 in 60 seconds?
Thirty to you get a shirt and 40 to be on the elite side of the board.
I have no idea where I landed.
You got a shirt, right?
Creating Value: We live in an extraordinarily consumerist and materialistic society. The reality is that most of that doesn’t bring genuine happiness.
I got the shirt.
It wasn’t worth it but you got it.
I think it was worth it. It’s a good memory. We’re talking about it. I found myself almost passed out on your floor, your dog was looking me in the face and then I had to use the toilet. It was a great experience. Thanks for having me over. I appreciate it. We should do that again.
We are taking it a little easier these days with workout so there’s a lot more pleasant. We realized we didn’t have anything to prove and being sore all the time. It didn’t make a lot of sense. We do some functional stuff and we take it easy.
Anyone that comes in works out at your house, it’s the nature of a challenge. They’re going to do anything you tell them to do.
I did that at 2,000 higher elevation on an Echo Bike, which is worse. It’s a little bit harder and beefier. I couldn’t talk to people for twenty minutes and then when I finally spoke words, I said, “It wasn’t worth it.” That was my final comment.
Garrett, it’s awesome to have you on again. I know you’re on a couple of years ago and I have tremendous respect for you with what you’ve done with your career and your business. As I mentioned, you’re always pushing limits and trying to understand the economy, life, business, and then communicate that to others. I have tremendous respect and admiration for you so thanks for what you do. We live in a gnarly time. We were talking about how the last months have been crazy from the standpoint of change. What’s been your experience through the last couple of months? What do you find yourself observing the most?
The good part of it is my kids are listening to me more. I’m able to use the concern or the so-called crisis as a way to heighten their attention and talk about why they are afraid. If they are afraid, where does that fear come from? Is it in the present moment? Are they worried about the future? That’s been profound that we’ve been having these weekly family meetings, talking about our family mission statement and our values. I’ve bonded especially with my youngest son during this time in a deeper way. That’s been the good side. The bad side is, I called a family member and they work with hospitals and they research this stuff for 6 to 7 hours a day. The level of concern, fear and frustration. I’m like, “It’s time to change the narrative.” I don’t think it’s healthy to let the media control the narrative because their job is to be profitable. When we get clear that that’s their job, they’re not always using headlines that are accurate.
I stopped reading things about COVID for two reasons. One, the governor of California said within 30 days they were going to have 22.5 million people infected. The second thing is I read an article out in New York where it said it was an apocalyptic sight. Using the term apocalyptic is fear-mongering and there’s no doubt there are deaths. There’s no doubt that there’s this COVID and it’s tough on people to get it tougher than the flu. I went to Utah’s website and they have Utah COVID website and they said, “For every person that’s reported, there are 5.5 people that have it.” I want people to extrapolate one thing that it’s the same death rate as the flu if that’s true. If we’re only reporting 1 in 5.5 and we’re looking at the percentage like 6% death in the United States. If we look at that 5.5, it takes it down to less than 1% so it’s real. I admittedly have flown and it felt good.
I wore a P95 mask. I take those precautions especially for other people that are in my family. As much as it was quiet and sparse at the airport, I felt good. I went to this place 200 acres in Nashville, everybody’s out playing and we built a fire. If you could find a way even if it’s isolated, get out somewhere in nature and reconnect because nature has a parasympathetic context to it. When we’re in a sympathetic state, it’s fight or flight. When we’re in parasympathetic, that’s where we do a lot of healing and relaxation. This has created a lot of chronic stress and that chronic stress has people a little bit more agitated. I started yelling at my son about something and my wife was on FaceTime and she was like, “What is wrong with you?” I’m like, “I don’t know. I’ve given in to the stress and succumb to it too much.”
It has a massive impact on the economy but I want to assure everyone, this economy was doomed already. 2020 was the year. You can go back and watch any of my YouTube videos. I’ve been saying it since 2018. I don’t know when it’s going to hit, but if it’s not at the end of 2020, I’m out. I will never talk about finance again. That was where my stand was. This exacerbated it. The problems were already there underlying. When it comes down to it, there’s one solution to all this and it’s we’ve got to all learn to be value creators. People think that someone can save them. I’m here to assure you, the government can’t save you, corporations won’t save you, and effort isn’t enough. It’s time for intelligent action. We’ve got to discover who we are, what we’re capable of, how we can serve others, and how we can deliver value. Right now, fear is bringing selfishness where people are thinking in isolated thoughts because we’re physically in isolation.
This has been in a sense from a psychological perspective, a very healthy event. It’s healthy because it’s disruptive and sometimes the system needs a shock. We all get in habits and I caught myself in very similar patterns and habits as you where I wanted things to be the way they were, not consciously, it was more subconscious. I want to go to my office and have those meetings, have my collaboration, and people hear, come home and do this. We want those habits, consistency, and certainty. When it’s not there, we get caught off guard. What’s been challenging about this situation is you don’t know. There’s so much unknown. How long are we going to be home? How long is this going to last for?
What I think it’s done for those that I’ve been speaking to and myself included, I assume you as well, which is we’re learning ways to focus on, things are going well with things that we can control. Simplicity and the essentials of life come into focus. That has been valuable for people. It’s been a breath of fresh air and hopefully, it’s given people a new perspective in a lot of ways. One, what’s happening? How much influence media does have? Where do we find an appropriate opinion so that we can hopefully find our own, not gravitate toward what the common opinion is and stick to that but learn the truth and have our own? There are lots of lessons and lots of principles throughout this entire event, including the financial ones. Everything was fragile and it kept growing and growing. This is something that’s knocked it off-kilter.
I’m happy that I learned my lessons in 2008. I was an optimist to ignorance. 2007 was such a big year for my firm and I was like, “This is always going to get better.” I had a track record since 1998 that every year did get better and it continued to grow. I had this level of ignorance that was making me very susceptible to risk. I was spending money too quickly even though I was calling it investing in my business. You saw the office I had back then, the money I’ve spent on my book, and all this stuff. 2008 hit and it was like, “I’m overextended. I’m redlining.” It was painful for six months to the point where I didn’t know who I was. It crashed my identity. I’m no longer worthy in my mind. I’ve failed my family and I got a lot of gray hair. It was this grind that I got in and what I learned was cash and cash management is so critical. I wasn’t like, “Let’s build six months of savings.” I was like, “Let’s build years inside of cash value insurance that will give me stay in power.”
Let’s be careful with our outgoing cashflow and consistently monitor it just 5 to 10 minutes a week to say, “In a mindful way, is this productive or is it not productive? Do we have enough saved up?” I hired someone right after that that they were brilliant at cash management. It was their gift. I was like cash-in, cash-out, like, “Let’s do it. Let’s go for it.” I became good at spending. This time around, it felt good that when this started to happen, I sent an email out to all my family and I said, “We’re prepared for this.” Everything from food storage makes me sound totally like a Utahn. I always felt weird about it and I’m like, “That feels good.” Having enough cash, I said, “If anyone has financial woes or problems during this, please call on us, we can support.” Instead of being in the grind and in crisis mode to be in like, “Let’s reimagine, let’s recreate, let’s re-engineer everything that we’re up to.”
Anything that I can’t do that I was doing before rather than being in pain about it, acknowledge that that’s not going to happen like I was supposed to give a TEDx Talk in New York. I was supposed to take my son to Asia for a month and do service projects in Vietnam, Cambodia, and take him to South Korea where I taught English. All those plans changed. I looked at it like, “What if this isn’t happening to me, it’s happening for me?” In that context, I now get to spend a lot of time with my wife which there’s only one other time in my life where I was home or around her for 60 days with no travel. That was when we went to Italy. I was like, “This will be our version here to go to our cabin, have a lot of connection, and a lot of time together.” We’ve had more conversations now than we’ve ever had in our life. It’s allowed us to be connected. Honestly, I’ve been doing a lot of righting my wrongs. I look back when I was an ass. I looked back when I was arrogant or stupid. I wrote five letters one time. I find that it gives me a chance to make the whole something through immaturity or whatever like do something different with it.
Life has gotten a lot quieter and you’re able to listen especially to the lessons and focus on what’s the most important. As you are going when we’re still in it, I know that things are getting better but from an economic perspective, we most likely have some challenging times ahead. What would you say are the primary lessons that you’re extracting from this?
The things that are getting concrete for me is that in society we become extraordinarily consumeristic and materialistic. Materialism almost is that feudal times of like, “Look what I’ve got.” “I’m my stuff. I’m my net worth.” Our identity gets wrapped up in this. The reality is most of that doesn’t bring genuine happiness. I had this moment in my office, I’m looking around and I’ve got pictures of my family and my wife, comedy, things that I’ve done, people that believed me from the time I was young, and I don’t have a single award up in my office. There’s not a plaque anywhere. There’s just stuff that were gifts from people or moments that were important. I feel a lot of the pain people have is the definition of societal success. When I went to Italy, the gift it gave me was I used to see my value as my business. If there was a customer complaint, I felt terrible about myself. Not about the complainant but about myself and what that said about me.
If we had a bad month, I felt like less of a human being. I was into materialism. When you and I knew each other for a few years and I built that building, that was my demonstration of like, “I’ve made it.” The reality was I had a hard time making those payments. In 2008, it was like, “We’re going to have to sell this building.” These times, we get to redefine what makes us valuable and what makes us valuable is we’re human beings. Human beings make mistakes, can show love, and in these times rather than pointing out anyone else as like, “You’re wrong with this philosophy,” it’s time to show a little bit more love, compassion, and find ways to connect.
As much as that might sound airy-fairy to the value of significance. All it means is like, “I feel whatever I do to someone else, I do to myself.” One time when I was leaving the airport, the machine didn’t work and I was all pissy with the gate agent. It’s not even his fault and there I am just having to go, “I’m still a human being and I feel bad about it. What can I learn from it?” It’s time to focus on ourselves versus the global economy that we can’t control. It’s overwhelming. When we’re overwhelmed, we check out. We go to escapism and right now is the time to connect.
The lessons that you’re learning, do you see others learning that whether it’s your audience or listeners? I know you do tons of stuff online. You write for Forbes. Do you see these lessons being learned by others?
Creating Value: These times, we need to focus on ourselves and redefine what makes us valuable as human beings.
What’s interesting is my YouTube channel has hit stagnation during this. I had 87 subscribers before and then I’m about 40,000 now. It went up by 8,000 people before the COVID crisis in a month. I had three million views. I’m at a million views and 1,500 subscribers. I was like, “Am I after this for the views, or am I after this for the impact?” What’s been nice is if anyone who wants to go to my YouTube channel and look at the comments, they’re overwhelmingly positive 95% and only 5% negative, smart aleck, called me a snake oil salesman or I need to cut my hair. I see people that are coming forward and going, “I’m ready to learn.” The most positive thing that’s happened from this is people are ready to learn.
Fewer people truly listen when times are good. If I try to point out the problems with the stock market, they don’t want to hear it. If I point out the problems of prepaying a mortgage, they think that’s stupid because you can always sell the home, I’m like, “I got it.” They’re not ready to hear things. The people that are listening are listening so much more intently. Our weekly Q&A sessions are getting hundreds of questions. That’s up big time. We did a virtual Wealth Acceleration Workshop, which we’d only done in person before and we had at the lowest point three times more people online watching it than we’ve ever had in person watching it.
There are some things that are interesting that way. The gift is I’ve been trying forever not to be attached to the road. That didn’t have to be an instrumental part of my business. I think that you’ve done a much better job than me at that. This has created that opening out of necessity where if I don’t go on the road, it doesn’t matter, it’s a choice. It’s not required to feed the firm and that’s a gift. I like being around my family, that’s nice. It’d be nice to not have the kids around all the time. They’re still romance terrorists at this point so I would say my romantic life has diminished.
Our kids are roughly the same age. I can attest to that. In a couple of years, they’re going to be gone. That’s what I’ve seen and observed is people are experiencing the same thing as it relates to their most important relationships. That’s going to change the direction of society as well because things were so busy whether it’s the amount of time we worked and the extracurricular activities that we did. Now everything is simpler which is amazing.
We were a slave to our habits. It’s unchecked and unquestioned.
We were in a sense slaves to material things. Slaves to this has to happen for me to feel and experience this.
I’ve spent so much money and I don’t have any less happiness. I was spending a lot of money in January and February. I had a big December and I was like, “I’m going to buy this and that.” It’s like, “I’m not buying any of that right now.” I feel totally fine. I felt no different.
You mentioned that your YouTube views, the engagement with some of your Forbes articles, what’s received the most response and then how are you characterizing that response relative to the other articles and media you’re producing?
The articles are my best articles. They are the biggest part of who I am and my discoveries are getting very minimal views. They’re very philosophical constructs in the big picture. The articles on Forbes that get the most views are telling someone they’re doing something wrong. Part of it is the people that want to read it so they can debate. The article you know that got the most views is Paying Off Your Mortgage Early Will Destroy Your Finances. The title is a little bit click-baiting. The article doesn’t say that you shouldn’t pay off your mortgage. I’m not the moral authority on whether someone should pay off their mortgage or not, but the methodology of how they do it is instrumental. We’re getting that proven in the COVID crisis because I’m saying if you put too much money by prepaying an amortized loan, that money ends up in equity gel. If you have a time where your cashflow is weak and we’re seeing unemployment on the rise, the banks are never going to lend you the money and you’re going to be more susceptible to being foreclosed on.
People are like, “You could always sell the home.” I don’t think it’s the easiest time to sell a home. I don’t know for sure but I imagine with quarantine, that’s got to be a problem especially if you own one in New York. That got a ton of views so when I said, “Financial planning is broken and then you’re better off to blow your money.” That was the other title. That got a lot of traction like 279,000 views. The articles about the recession and the CARES Act have gotten a decent amount of views. My favorite article that I put out is one of your partners in Prosperity Economics, Todd Langford. I interviewed him and wrote an article on cash value insurance that was all about the problems of universal life. That’s the most pedal product that exists out there. It’s got 8,000 views but that I hope over its lifetime ends up getting millions. It might be a slow go and someone’s going to read it, have it catch on because it’s so important to know. Those articles are very interesting. The bottom line is the title makes such a difference more so than the article itself.
I’d love to understand how you’ve grown with being able to speak and write about hard things especially when you’re telling a person that they’re wrong or telling someone something that is against conventional wisdom. You wrote a whole book about it, Killing Sacred Cows, which is conventional wisdom. It’s what everybody does. Doing that tactfully where you’re able to, not only prove the point but do it in a way in which it helps a person think because you can easily attack in a person who’s going to defend themselves to the nth degree and not learn anything from it but you’ve been able to evolve a lot. Speak to that a little bit about how you approach those challenging topics where it’s telling a person that what they’re doing is wrong but yet you’re doing it in a way where they’re able to learn.
In my twenties, I had this attitude of like, “I needed to go after it.” There was almost anger right to it and I don’t think that that was effective. This mortgage article I lead with when I was in high school in a math class. I saw the math of what happens when you do a 15 versus a 30-year mortgage. When I came home, I’m like, “Mom, are we on a fifteen-year mortgage?” She goes, “Of course, we are. We’re saving all that interest.” I’m like, “Thank you.” I went to college and I had this class from Professor Hamlin on Economics and he taught me the opportunity costs and cost of money. I was like, “If you could earn the same interest that doesn’t matter but you have more flexibility and potential tax about it, then you have more control of your money.”
The big argument people give me is like, “People are going to blow that money.” I’m like, “Let’s say that’s true. They’re going to put themselves at risk if they’re going to blow that money by trying to prepay a mortgage because they’re going to blow the rest, get into it high-interest rate credit card debt. I’d rather see them pay off the credit card.” You get the picture. I admit my initial limited thinking. I start with self-deprecation of saying this is how I thought it was too. I have no dog in the fight. It doesn’t matter what the solution is. If it’s a fifteen-year mortgage and that’s the most beneficial thing for someone, I don’t get paid more or less forgiving that advice. If I use Suze Orman as one example, she is a sell-out that gets paid by sponsors. She’s been paid by the FDIC. I believe she’s been paid by Starbucks because she went from, “You shouldn’t do it,” to “You do it.” She always had a cup of coffee on her show.
It’s hard not to bring bias. Dave Ramsey says, “Everybody should do everything they can to pay off their credit card debt.” How to do it? I’m okay with all the advice on that. I’m not okay with once you do that, you put your money in the stock market because of the things that we deserve a little bit better thinking. That’s been over-promised and under-delivered. There’s too much volatility. People don’t do well handling it. It creates unnecessary stress for them. One of the articles I wrote that didn’t get nearly the traction that deserved was The Stock Market is Still Overvalued. That was when we start to see it. Here’s why. Eighty-four percent of the gains in the stock market go to 10% of the investors. What people don’t understand is, let’s say the market is done 6% over the last twenty years, and that’s more accurate than when people think it’s done ten. Ten comes from the ‘90s, what it did better than that to boost it up to ten and that’s a pipe dream. It’s never happening again because too many companies are going to go out of business through disruption. Here’s why it matters that 84% of the gain goes to 10% of the investors is because of hedge funds, options, and derivatives.
It doesn’t mean that all investors average to 6%. It means that some people got 30% and other people got nothing because it went to the few that were in the hedge funds that were selling short. I don’t think people get that. They’re investing in companies they don’t believe in. They’re taking risks that are unnecessary because the world has done a good job in making stocks synonymous with investing. I have this whole comedy bit I’m starting to work on which is about Wall Street. If we surveyed the world and said, “Do you trust Wall Street? Yes or no?” It’s got to be 90% would say no. You don’t think warm fuzzy feelings with Wall Street. Every movie about Wall Street, Gordon Gekko, Wolf of Wall Street, Jordan Belfort, there are these terrible movies about harming people or stealing money and yet this is what people are doing. My premise is, would you let someone from Wall Street babysit your child?
The answer is no because you’d come back and be like, “They’re missing 8% of their body. We lost some toes. Hopefully, they’ll grow back and recover.” It’s like, “Why do we do that with our money?” It’s because of social agreements and social agreements are what creates the pain of materialism and consumption. Social agreements have a spill less worthy than we are. I feel like we need to have what someone else has. It creates jealousy and this is, unfortunately, the consumption-based system that we’ve got into. My problem with it is capitalism has become more about taking than giving. It’s become more about competition than creation. That’s why I’m more like a free market. We’ve got to stop having an agenda for someone and telling them what to do and they’ve got to discover things. They’ve got to make mistakes, they’ve got to learn lessons, and anytime we try to so-called protect them, then we rely on a government that’s not capable of protecting anyone because they’re not functional themselves. That’s my little diatribe on that.
That’s human nature. There are so many things that we consistently observed but never understand the nature of the root. My oldest daughter was like, “Why did Donald Trump come up with Make America Great Again?” We were having this competition of questions where you have to answer a question with a question. I asked her, “Where did the word America come from?” That sparked a cool tangent. The point is, most people do not know where that word comes from but you look at it, it’s our country. It’s on Donald Trump’s hat. Everybody talks about that all the time. With the stock market, what you do with your money, there haven’t been enough questions asked around it. Why does it exist? Why do we do this? Where did it come from? What’s the end objective? It’s been preplanned for us, therefore we don’t have to think about it and can focus on other things.
The biggest issue that we face as a nation and as a world is that we’ve lost sight of how to create a vision. The vision exists within a box of well-intentioned preachers and teachers and not so intention governments and the corporations. If we left money on the side for a minute and realize that’s a byproduct and you said, “What do we want to do?” What some people want to do won’t pay as much as other things. That’s the nature of value, what people value, and what people are willing to pay for it because that’s part of a free economy. If we don’t identify ourselves as our money. If that’s only an indication of the value we’ve created in the past and a ledger of that and that snapshotting, what that means is it doesn’t dictate the value we create in the future.
What’s been lost upon people is there are two more precious forms of capital. One is our mental capital, and if we develop that by investing in ourselves to gain knowledge, insight, wisdom, tools, and strategies. The second thing, which it’s an unprecedented time to build is relationship capital. We can build relationship capital because when people are in fear, they’re looking for leadership. Here’s the secret that I’ve had a hard time learning my own life. The secret is not knowing everything. The secret is listening and then what you did with your daughter. Asking questions that moved the narrative to one that’s productive. If you could ask great questions and listen, you’ve got the keys to wealth. I feel like now is the time to ask better questions and ask different questions.
I don’t know if you remember this. This was when Killing Sacred Cows came out and we went down to Vegas and you spoke. That was the first time I heard Keith Cunningham. I love him. He’s such a cool guy.
I remember when I was speaking at that event, he walked into the room. From the back of the room while I’m speaking, “I love Killing Sacred Cows. It’s a great title. What a title.” I was like, “That’s cool. Let’s speak of it. That’s who I love.” He tells it like it is.
He’s big on principle. He’s big on questions but there’s something that he talks about all the time which is thinking. It’s the idea of listening, asking questions, but then taking time to think. This has given people a lot of time to think.
Creating Value: People are taking unnecessary risks because the world has done a good job of making stocks synonymous with investing.
Yes. If you’ve heard him speak before, he’s like, “You read the book.” Hear his voice. It’s hilarious because he has this thick Texas accent but the point is this is at least for me, I never asked why am I doing this? What am I trying to achieve? Sometimes we ask those questions but we only go one or two layers deep. If you keep asking yourself questions about, why do I want to do that? If I had that, why would that make a difference? If I didn’t have it, where would I be? What would I think? What would I feel? The end-objective is way more important than sticking to a status quo and gain the same end-objective as everybody else. Those are the simple deep questions. Help us understand why we’re doing what we’re doing, what we want and hopefully give us direction as to things to adjust or get rid of to get what we want. I’ve gravitated and I’m not sure what your opinion is toward Ray Dalio but some of the stuff he says is amazing.
Risk management staying with a beginner’s mind, learning, and not learn it. A lot of that is so profound.
It’s so simple but it’s the Pareto Principle, the 80/20 rule where you get 80% of everything off and 20% of effort and information. I was reading that and it hit me. I’m like, “This is like COVID where we’re getting way more satisfaction with so much less noise, activity, and busyness.” It’s profound and those are valuable lessons. I know you’re always pushing the limits, growing, and trying to be more valuable. What would you say is your intention behind some of that writing? What are you hoping people will gain by understanding more about their mortgage and market? Also, more about the idea of value and where value comes from, purpose and legacy, the stuff that you are clearly passionate about? What are you hoping others take away from that? What’s the ideal outcome you hope for them?
The one thing that’s always at the core of it is a personal responsibility. The only way that we grow. With that accountability and personal responsibility, we become less duped, less reliant, and we can learn. There’s no learning. For me, without personal responsibility, there’s no way to have a relationship with someone. If I can bring that to them because I can help them think and learn. In doing that, I continue to write in a way that is simpler and simpler. Simple does not mean discounted, it means understandable. If you look at Killing Sacred Cows, people can understand the book but even when I did the audiobook, it was too elaborate at times. The sentences were too long and they become redundant that way. I’m using vocabulary that why did Make America Great Again work as a campaign is because everyone gets to define what great is subjective. Everybody could understand it even if they were in third grade.
If I write to sound intelligent, then I’m not connected. I’m not giving the reader the resources. If I could take what feels complicated and make it understandable, they’re empowered. I don’t write for everyone to agree, but if I can at least get them to question at least one thing and go, “That’s a valid point.” The one article that has the most views, half the reason it has the most views is that it’s very polarizing and people will defend their life that paying off a mortgage is the best thing you could do in the world. My grandfather said, “You can’t be the man who has paid off his mortgage.” I’m like, “I don’t even know what that means,” but obviously, he cared about his grandfather and so it’s a way to honor his ancestors.
I think we’ve got to shake loose ancestral damage. We can honor our ancestors and be free moving forward. We have a lot of ancestral knowledge that was limiting based upon the consciousness of the time and the situation. As situations change, the context changes if we keep the content the same, then we create unnecessary pain and we don’t honor ourselves. Too many people rely on everyone else. If I can get them to rely on personal responsibility, I feel like I’ve done some good in the world. That’s where I come from.
This is profound because I look at what’s been done in the past and this is a general statement. There were good intentions and they wanted something as an end result. What’s most important isn’t the way they did it. What’s important is the end result of why they did it. I’m not sure if the result has changed that much. We live in such a modern society where things are easier. They’re quicker. They’re more efficient and they take less energy. Going into the method and then the objective, the objective is way more important to understand and be clear about before you get into methods. You’ve always preached that. What’s been awesome is to observe you over the years and how consistent you’ve been to the principles you believed in pre-crash and then post and you continue to write about the same things but it’s different.
That’s where I realized people need a certain environment to absorb that information. Be able to rewire their methods but then also understand at a clear level what the objective is. People are now somewhat humbled and I include myself in it. There are a lot of valuable lessons I’m learning through all this. When you’re in that state, that’s when you start to think about what you were doing and ways in which you can improve it. The beauty of humanity is solving problems.
We’ll make mistakes along the way. It’s part of the learning and that’s okay. A lot of pain and humanity is perfectionism. That’s why we get so stuck in what’s right and what’s wrong. It’s my way or the high way. I get it. You don’t want to make a mistake and you don’t want to admit it if you made a mistake because it shows vulnerability or whatever it is. If we can acknowledge that then we can learn from it and move on. Anything through my career is when I had a strong belief in something and someone showed me evidence of why that might not be the case. I remember my business partner, Les, and I was sitting down analyzing 401(k)s. We’re like, “If this thing got 15% in investment, nothing could beat it.” With the tax deferral and then we started going, “What’s going to get 15% long-term?” I could understand for a year because we used to think of hard money lending at that time and it was going nuts.
You thought he was being conservative. We start looking at like, “What were tax rates?” We sat in a hotel room and after three hours we were like, “These things are riddled with fees. They have penalties that keep people stuck inside of them. They haven’t managed their cashflow appropriately. How much more powerful if you’re economically independent and have cashflow to cover your expenses, then every dollar you earn can be reinvested versus only 10% of it?” This world unfolded and I’m like, “I’ve got to admit that I was wrong. I’ve got to tell people that I’m cashing out my 401(k).” That’s not comfortable. I didn’t want that news but I think that intellectual integrity is the key to the evolution of our financial world. If I learn new things that are different than what I believe, I have to be willing to say, “I was wrong.” In real estate, I’ve done wrong. I’ve made mistakes with investing.
The good news is I haven’t in the last decade. People could point out that I could have gotten better returns, but the reality is my returns came in my business and I captured and transferred that into personal wealth through my cash value. That is very simple to me. I’m sitting on it because I’m going to buy some businesses through this crisis. That’s going to be good for those employees. It’s going to be good for the business owner that might’ve gotten nothing instead he got something. I feel like I’ve got a clear value system.
What advice are you giving the most or the things you’re talking about the most with your audience? What are some of the things you are advocating not to do, things to do and be focused on and things not to do and not be focused on?
It’s too early to allocate capital to investments. We don’t know how long it’s going to last so get access to cash. Do refinance and get equity. Put that in your bank account. If you have a line of credit, tap into it. Pay the interest for a few months. Put that in cash because the banks are going to cut that down. Unfortunately, I have been giving advice on how to get money from the CARES Act and the EIDL’s and the PPP because we paid the tax, they’re offering it, and it’s important for the smaller businesses. I was frustrated to find out 80% of people got the loans were big businesses and hopefully they are returning the money. There are a lot of big businesses that if they went out of business, I wouldn’t miss them for two seconds, but there are a lot of small businesses that I would care about that would suck to see them go out.
Refinancing to get lower outgo. I’m telling business owners that they should move to production-based compensation where they give minimal salary and they give a lot more upside. What happens is during good times, business owners make a disproportionate amount of money and during downtimes, they lose a disproportionate amount of money. If you can create a structure where everybody’s in the boat and they understand when it’s sinking and they all need to work towards being it rising or when it’s rising, they all benefit from it rising. That’s a big game-changer and it’s better for nowadays economy. It was okay to pay people time for money in the Industrial Age, but we’re not in the Industrial Age anymore. You can get more out of people and they can get more out of what they do too. You work together in a team format.
Those are cash-and-cash management, compensation, and making adjustments quickly. Don’t wait until it’s too late like I did in 2008. Everybody got paid but me. I wrote an article in Forbes called Are you the only one not getting paid right now?. That’s a problem because sacrifice leads to destruction. It’s important to take care of yourself during this time. Otherwise, you have nothing to give. You don’t want to run out of the room because you tried to get everybody else to be okay. When I have partners, we hemorrhaged money because we had 42 employees. I didn’t even have to tell them what to do because I didn’t have time. I didn’t have the bandwidth and I lost two people that would normally delegate that stuff. What I should have done is take a week off, sit down with everyone, figuring out what they were going to do, whether they were going to stay. All I did was pay people to mourn than be confused about what to do and then take on a burden that cost me years of my life when it came down to it.
That’s great advice. It’s advice that doesn’t come from information. There’s a difference between information and experience. One of the greatest lessons that we learned was during the times when things went haywire, we lost, and we’re not prepared. Now you’re going to protect yourself from not doing that again. It’s an example of how long the bull run was and how quickly things started to unravel which is going to continue. Let’s end with you talking about what’s exciting for you. What are some of the things you’re working on, you’re doing that lit up about?
One thing I’m doing is a one-man show. I had this dream where I was directing a one-man show, and I don’t know if you’ve ever seen the one-man show that Bo Eason did call the Runt of the Litter. That’s one of the first ones I’ve seen. Mike Tyson did one called Tyson that Spike Lee directed. Billy Crystal did one called 700 Sundays. I feel like entertainment is the gateway to transformation. If I could bring entertainment into a normally tough dry topic of money that I could help with giving people new confidence and give them an experiential way to learn how to create value. I act in it, that’s where I’m going to practice it, do a full run-through. I played four characters in it. I dance at the end of it. It’s this full expression to give people permission to have the freedom and engage in a way that delivers value. I have a director, screenwriter, and comedic writer. It’s been a big collaboration but it’s one of the most fun things I’ve ever done.
Are you filming it?
It’s a practice. We’ll run through it from beginning to end. We are recording and I’ll start listening to it. We’ve been working on stage direction, props, and the characters. I do acting. I had never acted before. I’m doing everything from a little stand-up in it to playing my guitar while I run people through an exercise. In the end, I dance as a sign of expression and I’m not a dancer. It’s like, “Let go of what people think and let’s be ourselves,” type of thing.
When is that due to?
I was going to perform it for the first time in June 2020.
Creating Value: There are two precious forms of capital: one is our mental capital, and the other is relationship capital.
Is this something that’s videoed or something that’s done in live performance?
It will be live. I’m hoping I got someone on the board of Hale Centre Theatre that saw me do stand-up and said, “I would love to have you do a Hale Centre gig.” When this COVID thing is over, I’ll film it and do a full production and they’ll be right here in your backyard. I love to get a bunch of people. For me, it’s my love bomb on humanity.
Garrett, how can the readers tune in to you, your YouTube channel, your social media, follow you and keep learning from you?
YouTube channel is the way. You’re going to go Garrett.live in an internet browser or you can go YouTube.com/garrettgundersontv. Either way, subscribe, I’m doing videos there. That’s the best way to stay connected. I respond to almost every comment.
This has been enlightening, to say the least. I expect nothing less. Garrett, thank you for your time. I appreciate it. Thanks for sharing your wisdom with the audience. I can’t wait to see the one-man show.
You’re always out there as a symbol of abundance. You have always been a man who has been abundant and sharing. You are willing to tell people how you’re doing things, what you’re up to, what mistakes you’ve made, and how you do it differently. I appreciate that about you because not a lot of people are willing to share at that level. Thanks for who you are and how you show up.
Thanks, Garrett. That means a lot. I appreciate it. Take care.
Garrett B. Gunderson has dedicated his career to debunking the many widely accepted myths and fabrications that undermine the prosperity and joy of millions of hard-working, honest business owners. Gunderson’s company, Wealth Factory, empowers its members to build sustainable wealth through financial efficiency and organization leading to clarity, peace of mind and financial confidence. You may recognize him from his appearances as a guest contributor on CNBC, Fox News, ABC, and many others.
Gunderon is the New York Times bestselling author of “Killing Sacred Cows: Overcoming the Financial Myths That Are Destroying Your Prosperity,” “Portal to Genius,” and “What Would the Rockefellers Do?: How the Wealthy Get and Stay That Way … And How You Can Too.”
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The rest of the year is going to be tough for real estate as unemployment is expected to rise as the economy undergoes a slowdown. There is not much to do but to brace ourselves for impact as this economic downturn inevitably affects the real estate market in a really bad way.
Real estate adviser and two-time bestselling author Ken McElroy joins Patrick Donohoe in the podcast to talk about recent market developments as the nation goes through an economic downturn caused by the COVID-19 pandemic. Ken sees a harsh reality ahead for real estate investors, especially those dealing with rental properties, commercial retail centers, and other specific spheres in real estate. He cautions investors from overleveraging in an increasingly uncertain market to avoid being caught in the imminent crash.
Real Estate And The Market During COVID-19 With Ken McElroy
I know we’re in challenging times. I hope you are learning about ways to thrive. You’re going to learn something about this interview, especially if you are interested or invested in real estate. There is no one better than Ken McElroy to speak to what’s going on in this environment. Where are the opportunities, what to do and most importantly, what not to do? I hope you’ve enjoyed the last couple of episodes, the Richard Duncan ones. I know they were deep. Hopefully, that inspired you to learn more about monetary policy and its relevance given what’s going on and what’s likely to come based on the Fed’s inevitable involvement.
You’re going to see something that I’ve been seeing over the last couple of months, whether it’s Ray Dalio or Tony Robbins or other very influential and successful individuals who are taking the time to teach others and putting so much relevant information and content out there for free. If you go to KenMcElroy.com, there is so much there relevant to what’s going on that you have access for free. He has a free newsletter and email list. If you are involved in real estate, you’re definitely going to want to tune into his social media channels and listen to what he has to say.
He is living and breathing what’s going on and has contacts with some of the most amazing people, not just in Arizona and in the country but around the world. He also partners with Robert Kiyosaki. They’ve written some books together and he’s written his books. This guy is amazing, giving and focused on contribution. Tune in to what he has to say. It’s important especially if you are involved with real estate. Additionally, Ken does have a behind the wall platform specifically for more professional real estate investors. I was able to get some money off if you want to participate in that. It’s a few hundred dollars a year. Use the code Patrick.
If you are in professional real estate and own multiple properties or syndicated and raised money, this is the information you want to have. Kenny is the master. You are going to enjoy it. We have a lot more coming to you in the future days. One thing that I would encourage, though and I know this is time to focus and spend on personal development. The last couple of seasons that we’ve had all focused around the principles of entrepreneurship. I believe these are the times when the entrepreneur is getting ready to strike and find ways in which they can provide value to the world and it’s everywhere. Make sure you’re on our email list. There are a couple of opportunities coming.
Head over to the WealthStandard.com. We mentioned a variety of books throughout this episode. Thank you for your support. We’ve been getting lots of new subscribers to the YouTube channel as well as readership. Thank you so much for tuning in. I hope you enjoy this interview with my good friend, Ken McElroy who is a Rich Dad advisor. He is the principal at MC Companies. He has been a real estate investor for the better part of three decades. He has done over $1 billion in transactions. He’s written books and he’s focusing on boosting goodwill and doing that through mostly his social media channels as well as KenMcElroy.com. You are in for a treat. Please welcome my guest, Ken McElroy.
Kenny, it’s amazing to have you on. It’s been far too long. You’ve been doing incredible things online. It looks like you’re having a lot of fun doing it.
It’s been such a blessing. I’m full balls to the walls on real estate. I had been for years, buying, building, managing and all the things that come with that. I haven’t been able to do a lot of this because of that. We’re on lockdown and I’m like, “Let’s use this as an opportunity.” It’s been a great opportunity to dig and study, call lots of people and figure out what’s happening. I want to apply it to my own business, but I also teach what you and I love to do. It’s been a massive blessing. I hate what people are going through, but for me, it’s been a great blessing to be able to dig in and try to teach so that people don’t make some of the same mistakes.
It’s one of those times where when disruption happens, you learn many lessons and you find all sorts of opportunities. At the same time, it probably wasn’t what you were anticipating. In our conversations over the years, you were anticipating something. I don’t think anybody could have called what happened with the whole COVID-19 and everything shutting down.
Going back through the cycles, there have been a few staying in the 2000s. We had 9/11, which I went through. That was super small, but it did make a massive correction. There was the dot-com and then we had the run-on with cheap money. It’s been different, all of them. This is something different. It’s horrible what’s happening. For me, it was going to be something. I thought it was going to be corporate credit, personally. That’s being exposed right now but it happens to be this which is exposing corporate credit, which is now not being talked about. That was a big deal. This is different.
You can never tell. There are certain fundamentals and looking in the rear-view mirror, it’s always easy to identify similarities, but it’s about, what’s the windshield and what’s going to happen as a result? I still think we’re in the thick of it. That’s what’s always impressed me about you is that you don’t necessarily settle on a bias or an opinion. You have them. At the same time, you always question them. You realize that other people know certain things and have a different perspective. It sounds like you’ve been in the information-gathering mode to identify what’s going on, how are things going to be effective, and where are the opportunities? Maybe speak to that a little bit as far as some of the things you’ve been studying or now aware of, and what you’re seeing maybe as the fog that’s starting to disappear from the windshield.
What I love whenever I chat with you is I’m a psycho guy and you love economics. For me, you’ve got the recession, recovery, expansion, the hyper supply, and then you’ve got the recession and the recovery. It’s a big bell curve. I’m always trying to figure out what I’m missing. I’m decisive like you, but I always keep my mind open. I always want to know. Every time I see the mess up in my life, it’s what I don’t see. For me, in 2018, it’s tough to buy. People are overpaying for things, rents are growing like crazy, and it’s great. There are lots of money and lots of syndications. People are like, “Aren’t you in the market?” I’m like, “No. We’re going to focus on ops as you know we did.”
In 2019, it only kept getting crazy. My partner and I, Ross, I said, “We should sell. Look at how much these are worth. We’re going to make millions of dollars because cap rates are in the low fours and even less. We bought these things at 5, 6, 7. We should exit on a bunch of projects.” We sold right around $250 million worth of stuff in 2019 through the whole year. It took most of the year. I only say that because I didn’t know it was going to be at the peak. I didn’t know if we had 1, 2 or 3 years left. I didn’t know but I knew that I had made a lot of money. I knew that what we bought to what we paid to what we sold, that was a lot. I was trying to take care of our investors. Like anything, you’re not supposed to time everything, but I’m like, “Maybe we leave some meat on the ball for the next guy.” For me, when the fundamentals got out of whack, I said, “It doesn’t make sense to me. I can’t get equity and pay 6%, 7%, 8% and have cashflow of 2% or 3%.” I don’t want to be in that situation. That’s why we got out.
Real Estate During COVID: When disruption happens, you learn so many lessons and find all sorts of opportunities.
You’ve had several different cycles you’ve been through. There are a lot of investors that may not have exited in a timely manner. Based on your experiences of the past, I know in the past you’ve kept a lot of properties through down cycles. What would you say are some of the questions and concerns you’re getting from those that hear the birdies chirping, “You don’t have to pay rent and there are going to be laws where you can’t be evicted?” How do you usually respond to those concerns? Even though it’s early on in this, I still see the feedback we’re getting where the majority of concerns is, “Am I going to get my rent?” Is this something that now I’m going to be personally obligated to deal with?
We still have 8,000 tenants. We still own a lot of property. I have commercial and I have self-storage. We have a multifamily, mostly Class A and B. We have ground-up construction that we’re doing. We own a management. We have a construction company. I was at the office on Zoom calls with my leadership team on these exact issues so I can speak to them directly. First of all, as a company, we’re all plugged into the National Apartment Association and the National Multifamily Housing Council. There was a survey in April for 13.5 million apartments. Universally, everybody collected about 89%, which was pretty good. At the end of March, we weren’t sure. We did stress tests on all of our projects. There are only two major components that you’ve got to cover. One is your operating expenses and two is your debt. Those can be very different from property to property. Some can be principal interest. Some can have high property taxes and high expenses. Every property is very different. That’s where the management part came in. We were super cognizant about that. We knew what our minimum thresholds were for recollection. We thought that we were going to collect around 75%. We ended up collecting into the 90s. There was a whole team of people working on this.
Do you do anything differently?
We did a lot of things differently. It depends on where the property is. If it’s in an area that is pretty high-end healthcare, for example, no issues. If it was a senior property, no issues. If it was student property, trouble. If it’s anything that’s service-related or tourism-related, trouble. A lot of it depends on where it is and who’s in it. For us, this is where good property management comes in. If you filled your properties with good people that have good credit before, they’re going to come in and sit down with you and work with you. If you have it, then you’re going to be a little more exposed. As Warren Buffett says, “When the tide goes out, you see who’s swimming naked.”
For us, that was a big focus, running criminal credit and background checks on every single person, making sure they could pay. These are good people. They don’t want to be booted out. We don’t want to boot them out. We created our own internal program that we’re working with all of them individually. We have 8,000 people. The numbers were roughly about 60% paid. The others had all kinds of scenarios. It was a case by case. We did this in 2008. We said, “Your life has been interrupted a little bit. Let’s sit down and work this out. You don’t want to move out. We don’t want you to move out.” I’d rather have a good tenant with a good credit history in our place than not. I’d rather have them than a vacancy. I also knew now, it’s not going to rent much at the moment.
We went on damage control with our lenders. We went on damage control on our ops. We cut out all CapEx projects. We cut out all marketing. We hit every single line item, except the employees. We kept everybody. We said, “How can we run this building, not spend anything and then hunker down our cash?” That’s what we did. Even with all that, we’re quite concerned about May 1st. When you think about it, everything hit mid-March. People had already paid for March. They were only two weeks away or one week away from paying April rent and a lot of them were still working. That’s done. Now a lot of stimulus money came in, but we’ll see. May 1 is going to be a big test for this industry.
The main thing is communication. You took a proactive approach and communicated with tenants, acknowledging what was going on and then starting to identify opportunities as opposed to them trying to figure it out on their own.
In fact, we were talking about, “Give me the stats on April.” She said, “We have 100 some people paying rent that were on the payment plan. We had 26 people that we had to put abandonment notices on one project. On those people, twenty of them came in right away.” It’s a process of working with these people. Multifamily is going to be fine long-term because now we’re starting to get money. It’s going to take a big hit. I have lots of friends in the retail space. I’ve got these horror stories. I had one friend. He’s like, “I have fourteen tenants in this retail center and only two paid.” I was like, “Who are they?” He’s like, “Your wedding shop, water store, restaurant, bar and dry cleaner.” That is going to be one of the bigger issues in commercial retail. That’s going to start to show up here in the next 60 to 90 days.
The office space too because everyone was forced to work from home and be remote. They’ve figured it out. I’m assuming the success stories that exist are realizing, “I don’t have to pay to park. I don’t have to pay for snacks. I don’t have to pay for utilities where you can operate a little bit more thin as you come out of this.
That’s more of a long-term thing. I own some office buildings. We were able to get everybody to pay, but there are going to be reliant companies. Let’s say it’s got a franchise. They have 20, 30 franchises in town and they’re not making money. They’re not paying the franchise or the management company can’t pay the landlord. All those things are going to happen. Ultimately, people are going to rethink at the end of their leases. They’re going to go, “I don’t need this much space. It looks like we can operate remotely.” Not to mention the fact that retail was already on a shoestring.
Everybody’s direct-to-consumer now. You can order stuff from Walmart, Target, Home Depot or we all know Amazon. The new normal is to go on your computer while you’re sitting there eating breakfast and order whatever you need. It comes right to the door and it’s there at night. No longer do you have to drive down to the store, throw it on the back of your car and drive to the house and unload it. That’s the new normal. A lot of those businesses are done for good. That’s horrible. A lot of people are going to lose a lot of money.
My bit concern about all of these, you look back at all of these different things that have happened for unemployment. Most of the time, unemployment at the worst has been 1.9 to 2.2 billion people. We’re in the mid-twenties. We’re like 10x. Everybody would say, “It’s temporary. They’re all going to go back to work.” That’s not true. Whatever the number is, it was 22 million, but maybe 14 million, 15 million of those people will go back to work. We’re going to be left with massive unemployment. It’s going to take a long time to work itself out. Those are people that pay us rent. Those are the people that buy groceries. They go to restaurants and they do dry cleaning or they don’t do your dry cleaning, all those kinds of things. The economy is humming along and that is what everybody’s missing.
That demographic is still operating on a shoestring. This is probably a good transition. A lot of the stimulus that the government has proposed, CARES Act being one of them, which was part business, part individual. Do you see that’s made a difference in given confidence? Maybe add into the unemployment, specifically the federal unemployment who’s boosting the state unemployment, if that’s making a difference. Do you think the stimulus or government intervention has been making a difference?
I do. We got our PPP money for our own company. We needed it. We didn’t lay anybody off. We’re not considered as a central business because we’re housing. I have friends that haven’t gotten any. I have a good friend that owns a lot of gyms in town. He’s got 900 employees. He hasn’t received a nickel because he’s over 500 employees. These are real people with real businesses crashing. That’s on the business side only. On the renter side, they might own businesses. They might have jobs or whatever it might be. That unemployment, that stimulus money is super helpful for people. You never know what they’re going to do with it. That’s the truth.
Do you think there’s going to be more stimulus specifically relating to real estate? I know that there wasn’t anything announced, but from what you’re hearing, I know that the associations you belong to probably have lobbyists and influencers who are trying to push for certain provisions, especially if they start to mess around with eviction laws.
The thing is we’ve been all over the eviction stuff. I had a conversation with the governor who I’ve known twenty years back when he owned Cold Stone Creamery here in Arizona. We’ve been all over these things. On one hand, they’re saying, “You can’t boot anybody out.” By the way, we don’t want to. On the other hand, they’re saying, “You’ve got to pay your mortgage.” We’re saying, “If we can’t get the income, then we’re not going to do it here.” Our biggest concern is what the lenders are going to do. If they’re going to give us any forbearance. Right now, the forbearance programs aren’t that great. They let you bounce three months, but it’s due on a balloon in the fourth month. It needs to be tacked to the back of the loan and give everybody a little bit of room.
I’m most concerned with my buddies that are in those retail centers. They’re not going to be able to pay their mortgages. They’re going to have to go into default. The lenders have to move forward in defaulting them. The problem that we’re seeing is what does a lender do? If you’ve got a loan on a center, you want to work with the guy that owns the center or the partnership. The truth is they’ve got to take a look at the center too and go, “Which one of these businesses are going to make it and which ones are not?” It’s the same thing with the multifamily. I was playing golf in Arizona. Golf courses are essential, as you can imagine.
I was playing golf with a bunch of buddies in my business. I had one friend that had three properties in escrow. The buyer had wired $1.2 million to escrow and the agreement flowed that money all the way to the seller, which was his group. The lender said, “We’re not going to loan on these.” They said it happened on another deal where they had $500,000 up and then it happened to him where he at another deal where he had $500,000 up. What’s happening is anything that got valued in January, February, maybe early March, the lenders, if they haven’t locked rates. They haven’t given the full commitments. We see a little bit more risk here and we’re going to take a look. A lot of arguments are happening on deals that are in the works. That argument will be interesting. The lenders are changing their tune because they see more risks moving forward. Just like you would or I would, I don’t blame them.
I don’t either. I would say given the liquidity that existed, they kept doing their job. It put them in a predicament as well as the property owners. Let’s maybe transition away from the pessimistic side of things. There’s certainly enough there to be concerned about, but I look at your experience through 2008, 2009, 2010, as well as previous downturns in the economy, you anticipated then, you’re anticipating now. It doesn’t make sense to plant any seeds in winter. What are you looking for that would make you excited to get back in and start planting some seeds because Punxsutawney Phil poked his head up and saw his shadow?
First of all, people need to adjust their paradigms, their belief systems on what’s happening. I did a video on YouTube on this issue. I did these concentric circles and I called it lag. I said, “Here we are with COVID-19. The first circle is unemployment. The next circle is our loan default. The next circle is our bank REOs. The next circle is when you buy. These things, it’s like a balloon. When it inflates through this recession or before this recession, during this hyper supply. It slowly inflates and so you have to wait. You have to give it time to deflate. Those guys I was telling you about, they are in trouble. They’re going to fight like heck. They’re going to try to do cash calls. They’re going to use their cash reserves.
They’re going to try to hold things together as long as they can. That might be a month. It might be two years. All of this stuff has to unwind on its own. At the end of the day, it’s going to be the people who have the most cash reserves and what the banks are willing to do. If the guy is a 100% occupied and he’s got a center that’s 50% occupied, he’s still not going to make it. You have to wait. Once a bank gets something back, as you know and I know from personal experience, they don’t write it down right away. That will sit on their books for a while. They have to like, “What do I do?” It could take months for that to happen. We’re looking at a long period of time here.
What would you say especially for the amount of run-up that existed after 2008, 2009 when there was tremendous stimulus and interest rates were low? For those who have been through cycles, it’s easy to say, “If that’s what they’re doing, then asset prices are going to boom.” We’re at right now in that debt cycle. Do you see that things are going to get better soon? Do you think that they’re going to get worse? Do you think it’s going to be different this time around? Is it a cycle that goes back to the way it was? Is it a cycle that learns its lesson and then rebounds from the lesson?
What happens to every cycle is people don’t learn their lesson. What’s happening is, as we were talking about, I have nothing against all these syndicators that are going out and raising money and buying stuff. I hope they all did fine. The truth is I was bidding on those things. I know the numbers. I’m not going off on speculation. I was losing deals to people that had $1 million, $2 million, $3 million higher than I was willing to pay. I knew the underwriting, the numbers, the debt, and everything. Those people aren’t going to make it. They’re going to have a higher vacancy and flat rent growth. We’re going to start to see concessions and all those things are going to pop. Let’s not forget what drives real estate. It’s jobs and it’s population movement too, which is not happening at the moment. It’s jobs. If you’re in Florida, I don’t have to tell you that tourism in Florida, Southern California, and in some of those areas, they’re going to hit pretty hard.
If you’re in healthcare, you’re probably going to have a little softer scenario. You have to look at what industry. I have friends in student housing and they’re toast. I have two kids. They’re both at my house down the hall. I’m paying and I’m wiring money to the University of Arizona. They’re on Zoom calls in their bedrooms taking classes and they don’t know what they’re going to do forward. People are starting to look at that, education and college education. Is it worth it? All those different scenarios.
Real Estate During COVID: We’re going to be left with massive unemployment that is going to take a long time to work itself out, and those are the people that pay us rent.
The student housing guys are getting nailed because they moved out. In a lot of cases, it was mandatory that they had to move out. They going to move back in. School is going to reopen. There are all these things that are going to happen. It’s fascinating. You have to watch. There will be massive opportunities in all of those areas. Things are going to come back. I don’t know about you, but are you going to take your family on a cruise ship in the next three years? That’s my point. I feel the same way. I know a lot of my friends feel the same way.
Those behaviors are going to change. All of a sudden, Miami hotels, the theme parks, all the things that you wouldn’t do when you were down there before, as part of that experience catching a cruise ship out of Miami is different. It’s gone and changed. It’s going to have a ripple effect. The people that work for all those different businesses, they don’t own homes there. They rent there. The restaurants and all that stuff, it’s propped up based on a lot of these things. Certain areas are going to do well. Interestingly, I was talking to a friend of mine. The Cleveland Clinic is nationally revered, even internationally revered. Cleveland is super strong. First of all, it was never in a bubble. At the same token, they got all these doctors and all this healthcare stuff going on there. I’m not advocating to buy in Cleveland. I’m saying that it’s interesting to me that you have some areas that are doing well and others that aren’t. You’ve got to pay attention to the jobs and population.
If you’re the syndicator, you raised money or you own and you didn’t liquidate and sell in 2019, and you’re in the middle of this, when do you not hang on, especially if this is your first go-round? I’m sure that’s a lesson that we’ve all learned. How long do you hold on to an employee? How long do you hold on to a property? How long do you hold on to an investment? When is the time to let things go? When is the time to maybe hold on?
There are a lot of scenarios that have to do with this question. Let’s talk about debt first. Let’s say you have an interest-only loan that now is going to have the principal part kick in, which is a scenario that could be happening too. They bought something a few years ago. That extra principal could be the difference between them going down. If I were them, I would be negotiating longer IO or Interest Only as an example. The debt has a lot to do with that question. When you get to the operating expenses because I’ve been through these before. The very first thing to get paid is the mortgage. The very second thing that gets paid typically is payroll. The third thing is property tax, insurance, and then everything else starts going into net 30, net 60, net 90, and net 120. You start to manage all and I’ve been through this.
What happens is, unfortunately, the maintenance, the advertising, the marketing, and all those kinds of things. Those are the last things to get paid because you’re trying to keep the lights on and all that stuff. At some point, some of that has to pop. You’ll get a lien. You can insure the property and then they let the lender know. All that stuff could take a long time. Generally, I’ve never known anybody that says, “I’m done.” It’s usually the lender that’s going, “We’ve got a problem here. We’re going to have to move this into some kind of foreclosure.” My guess is there’s going to be very few people that do it voluntarily and it will be done via the lender. Sometimes it might cash call their way through it. I have that resort I own. We’ve been shut down since March. Our burn rate is high. We’re getting killed and I’m just writing checks to keep it. Oddly enough, I don’t have debt on it. It’s operations. It’s everything else, but it’s still $100,000 a month, just to keep the thing with no revenue.
You need another priority of urgency essentially. What is the most important thing to pay first and then pay last?
What will immediately trigger you as a red flag is the non-payment of the mortgage. That’s usually the first thing that’s paid and everything else is a train wreck after that. Unfortunately, it’s going to happen.
Let’s do this. This has been helpful. We’re still in the thick of it. The dust is still settling. At the same time, you’re looking at certain things based on your comments about what to pay attention to, whether it’s employment, specifically jobs and how that’s flowing. You’re also looking at how things are going to land in the retail section and how travel and vacation are going to change. There is so much from even a psychological standpoint. People going out have to wear masks. Our governor in Utah came out and said, “We’re going to do a second wave, but now we want everybody to be wearing masks everywhere.” It’s interesting to see how things are going to adjust from a society perspective. You’re an investor or a syndicator or both. What are the top three things that you would not do? What are the top three things that you would do?
The first thing that I would not do is I would not buy. This is an interesting question. You have a big following and I have a big following. I get people too like, “I’m in the middle of this deal. Should I buy this or should I buy that?” I’m like, “No. I guess it’s not the time to buy. This is a time to step back and watch because there are a lot of risks. That’s the first thing. I also don’t think it’s a good time to over-leverage because a lot of people are trying to refinance. It’s a good time to possibly do a no cash-out refinance and get a lower rate if you can. I also think that going with a floating rate is probably fine for a while, as long as you don’t have that big penalty for any refinance.
We did this on an office building oddly enough. It has a 5% prepayment penalty. To get out of it, all we had to do is list it up a little bit more. For me, that was like, “It’s great.” It cost me $100,000 to get out of this loan. That’s good. It does not yield maintenance or any kind of a large prepayment. That’s another one. Be careful with that. I don’t think going with a floater is bad. Zions Bank out of Utah, I talked to them. I’m doing a 2.75 off their balance sheet. It’s a floater, but it’s the first ten years fixed. I’m like, “Great, I’ll do that.”
I know my first ten years are fixed, but I could refinance at year 7, 8, whatever if I want to move into a fixed. That’s another one. The other thing that I would be careful about as any self-management, that’s the third one. I know it costs money to have a management company, but this is the time when they show up. I’m telling you. A management company, especially a big one, they have relationships with the lenders. They have relationships with banks. They have relationships with vendors. They have relationships with all these people. They’re also working on your behalf so this is not the time to fire our management company and self-manage and try to save that little bit of money because there are all these hidden mistakes that could be made by doing that.
This is super helpful because you’re speaking from a lot of experience and you also network with many other investors. What are maybe the top three things that you would be doing?
The first thing I did, we said, “Let’s maximize our cash.” How can you maximize cash? The first thing we did was we stopped all CapEx. Anything that was in any way budgeted for 2020, we said, “It has to go through me.” No new floors. No new appliances. No new this, it has all go through me. Unless it’s emergency and health and safety. That was number one. Just that move alone is millions of dollars. The other one was no value adds. That does not exist right now. We’re not going to rent something for more in the coming months. No value adds at all. If you had a property that was based on a value-add strategy, stop. Let’s offer those at lower prices, which will be good. If you have somebody in a higher-priced unit, maybe you can move them to a less expensive unit and keep them as a tenant. That was another one.
The other thing that we did is we took a look at all the rest of our cash reserves, and then we did stress tests. We started to take a look at where we were on all the cash and all the projects. We ran those out based on a number of scenarios to see where we were. We knew specifically what would happen if we collected 90%, 80%, 70%, where we’re going to start to see. Those are the things that you can do right now. You can also prepare your partners for a cash call. You should be super proactive about that. I did that with my resort. I said, “This is what’s going to happen in the next 90 days. I’m going to need X amount of money from each of you to preserve this asset.” They all sent their money in. If that continues, then we have to do it again. If they don’t, then we’ve got to move into the operating agreement and start a dilution process to maintain the assets. That’s number one.
The other one is what we’re doing here. Learn, listen and study is the second thing I wrote down. This is the time where education is everything. They should be listening and learning. From Robert Kiyosaki alone, he probably sends me three YouTubes a day and unfortunately, they’re all like 40 minutes to an hour. Just from Robert, I got 2 or 3 hours of stuff to listen to. I have friends sending stuff around and it’s the greatest thing ever. Everybody has a different view. Read, watch and learn as much as you can. You can speak professionally to your lender, your investor, and your employees on your strategy because you have to have a strategy. This is the time when leadership shows up. A lot of times, people are going and blowing, and they’re not very good communicators. This is not the time to do that.
The third thing that we’ve done well is we worked with all of our tenants, all of our employees, and all of our lenders. I have a report every single day. I know every single day where my delinquency is and where my occupancy is on every single property that we have. I’ve never done that before. Usually, I look at that every other week. I glance at it. I focus on 1 or 2 buildings. I’m looking at this daily and we’re managing right down. That’s why I knew that we had 26 abandonment notices at one property because I was tracking that. We’ve never had to do that before.
I was on the phone with the asset manager and say, “What’s going on with these 26?” They said, “Twenty other people came in and talked to us, and now we’re working with them.” They have six left and we can’t evict them as you know, but that’s not the point. We’re trying to get them to the table so we can speak to them, talk to them, and work with them. We don’t want to evict them. This is why I’m saying the management is so important. I’ve got many years of property management and we’ve got all the bullets and all the guns. We’re putting everything out that we can. We’re using all the experience and all the skills that we can as a team to manage this. You cannot do it without somebody that knows what they’re doing.
That’s where I was going to go, Ken. One thing that I’ve realized from those that I respect and you’re part of it. When all of this stuff started to go down, there became this surge of goodwill where it’s those that had the experience, those that knew what was going on not specifically, but generally speaking started to share, teach and network. This is one of the best times to do that and share. I would say technology is at a point where there are many different networks out there that you can be a part of, associations that you can be a part of to share what’s working for you, but also share what’s not working.
The point is it’s sharing, giving, and putting that out there so that you don’t have to solve the problem on your own. You don’t have to make hard decisions by yourself. You can crowdsource that in a sense. What’s been impressive to me regarding what you’ve done over the last few months is you’re all over the internet, all over social media, and I’m like, “Does this guy have a camera crew following him around 24/7?” Maybe speak to some of the things you’re doing, not these types of interviews, but other things you’re doing to educate investors based on your experience and what difference that’s making?
I know one of the things we talked about is not trying to self-manage your property. I’ll tell you one story that blew me away. We belong locally in Arizona to the Arizona Multihousing Association. I was the Chairman of the board years ago and so is my partner, Lesley Brice, who’s also a partner of our company is the past chair. There was an email chain going around with all our competitors, all the major management companies. We were all on it. It was like 100 people. Everybody was posting, “This is what we’re doing on the delinquent. This is what we’re doing on occupancy. This is a challenge we’re having over here.”
What happened is everybody showed up. It was the most awesome thing to see because these are people that a lot of times, you’re going head to head with on a project or a deal or something and it was remarkable. That’s what I’m talking about. People are stepping up. I’ve been blessed. I’m on EOS, Entrepreneur Operating System. We rolled that out a couple of years ago. We can touch all of our properties and all of our employees immediately through the EOS system through cascading messages and all that stuff. We had all this and the systems set up already.
What happened was we all started to meet through Zoom. I had a Zoom call with the whole management team. We have our ops person there. We have our construction person, our head of maintenance, our COO, our head of marketing, our president on there. We have Ross on there and I am on there. We’re all talking about all the stuff that was happening to us individually. We’re working on them collectively as a team. It started with, “What are we going to do? How are we going to pay our mortgage?” Everybody’s on that call. Here’s the head of our marketing company. She runs our whole marketing team. I’m like, “I’m afraid that we’re not going to be able to pay for our mortgage.” She’s engaged, our COO is engaged. It all cascades down.
We had some properties like our senior properties that are paying 100% because they’re not working. A lot of them are not working and they get their assistance checks, no issues there. I didn’t think about that. We have other properties that are heavily in service. We were at 60% collected. We’re like, “What do we do here?” In a lot of ways, these things show up and because of the experience that we all have, we’re working on it collectively together and so is the industry. Being able to throw that out to the National Apartment Association and National Multifamily Housing Council and work on some stuff collectively, we get these best practices and things that are going on all over the place and we roll it right out.
When I’m speaking to our governor about something, trust me, I’m finding out from the Texas Apartment Association, Atlanta Apartment Association and The California Apartment Association. They’re handling things like rent control, homelessness and all that stuff. I’m bringing all that data in and sit down with Doug and say, “This is what’s happening.” When he asked me the question, “Does rent control work or what should I do here? What should I do there?” I know because I’ve done all my homework beforehand and that’s the power of being plugged in.
Real Estate During COVID: Lenders are changing their tune right now because they see more risks moving forward.
That’s also an important point because there are those in those positions of leadership that are not as informed. The connections that you have is one thing, but at the same time, a lot of that information, probably the majority of it came from others through this networking principle. This has been super helpful. Hopefully, everyone’s getting a lot a lot out of this episode. Maybe speak to ways in which the audience can be engaged with you. I know that you’re speaking to the large investors and syndicators, but you also have a lot of relevant information in content for the smaller investor, maybe the one that’s doing it themselves, and maybe doesn’t have partners or investors.
That’s what I did. I started taking all that stuff that we were doing as a company and then all the information that we’re getting from everybody. I started putting it on our website for free at KenMcElroy.com. You can look at our Plan To Pay, our PTP program, which is the exact form that we use for each tenant. It’s on my website for free. All these different things that we’re doing, I put up there for free because I don’t want people to lose their real estate. I don’t want people to go into default. I want people to make great decisions.
That’s why I’ve been doing all these videos. I go, “This is the time when people need this information. I’m going to start doing two videos a week,” which is not easy to do for me because of all these other things we’ve got going. When the PPP came out and the EIDL came out, I didn’t know what to do with it. I didn’t even know what it meant. I found a senior tax advisor, Eric is the guy that does 100 of our tax returns every year. I go, “Do you understand this?” He’s like, “Absolutely.” I go, “Would you do a podcast with me?” He’s like, “Absolutely.” We did that. That turned into a TV interview on Fox News because we interviewed Eric. I put it on the website for free because I want people to see fully transparent and authentic on exactly what we’re doing. These are the exact things we’re doing. This is the time to do that, to help people out.
This is the crucial time where emotion can get the best of you without good information and oftentimes emotions come from the lack of information. That’s evident in a lot of different respects. It will continue to be because this isn’t over. We’re in the thick of a very disruptive event. At the same time, this is life. Life’s not linear. It always throws curve balls at us. That’s the beauty of it because some of the greatest lessons come from that. What’s been impressive to me is the example you gave of all the different competitors that you have, all these big investors, property managers that came together.
These are the times where we have many tools to share. Capitalizing on that allows us to experience the humanity in people, but also get the answers to questions. You don’t have to guess. You don’t have to do it alone. You can use evidence and you can use the information of those that have tried it and have done it successfully. That’s where I’ve been impressed with your team and your group and how much marketing you’ve done against the investment of goodwill. Who knows how that’s going to pay off? You know as well as I do that it always does in some form.
Maybe it does pay off. Like you, we have 30,000, 40,000 people that get our newsletter every week. These are the questions they ask. Part of the KenMcElroy.com, I give everything away to charity. Books, tapes, everything I do goes to our foundation, which we have as well. I take the questions that people gave me on Facebook, Instagram or any of the LinkedIn stuff. We turn them into videos and we turn them into podcasts. We’re trying to deliver that to real people in real-time. That’s what we’ve been trying to do.
What are some of the books that you’re reading right now and finding relevant for the times?
The best part was there’s so much stuff. I go back to The Creature From Jekyll Island, which I know we’ve read many times. I read a book called The Paradigm Matrix, Collusion. Everybody’s got a different slap and a different viewpoint on things. Any of the Jim Rickard’s books, Currency Warsand all that stuff. We wanted to take this to the next level. I know you’re super comfortable talking about that stuff is how do you double the amount of money supply and not have massive inflation. What do we do? For me, I’m trying to be ahead of all that stuff. I’m trying to study trends.
Robert Kiyosaki and I were in Texas. We flew down there privately because we didn’t want to fly commercial. We went to a ranch and study trends, lag procession with Buckminster Fuller, we studied those things for a week. When you drop a pebble in a pond, you see the ripple effects that are called procession. This COVID-19 is creating processional effects. It’s creating processional effects in the restaurant, tourism, cruise ships, healthcare system, and all those kinds of things.
We’re trying to study those things. The real way to make lots of money, not that this is about making money, but you can, is to try to understand a trend. If you can understand a trend like you did on the cash out insurance. That was a trend and it still is. It was a great one. You built a nice career off of that. Those are trends. It’s the same thing with multifamily, retail, industrial, condos and everything else. They’re trends, all of them. Those are the books that I’ve been studying. Pour yourself into something. It’s a great time to be super confused and talk to as many people as you can.
Now is the time to gather information. You said something else that was profound, which is to listen to what’s being said and the person saying it. It’s also to ask questions. It’s not to take things at face value, but to find other perspectives. Oftentimes, the opposite perspective helps. You can weigh the perspective that you resonate with, but you have the opposite that helps refine it and maybe change it. That’s one of those trying to rub off the fog on the windshield.
I love what you said about bias. I don’t know if you realize what you said, but that’s it. I talk to people all the time and they have a paradigm of what’s going to happen. They have a belief system based on their belief system, based on maybe something that they read or something that they’ve learned from years ago or whatever. They’re stuck. The one thing that I’m always searching for is the truth. The truth is the truth. What happens for me is I put my own biases in front of the truth. I put my belief system in front of the truth. I start to believe my crap. That’s what kills people.
If you could take a thought and you can make it a thing, stick it out here, look at it, observe it, it’s not necessarily yours, and you can analyze it, you can be objective with it, you’ll be a lot further along. What happens is I see it in people’s comments. They’re like, “That’s crap,” dislike or thumb down or whatever you want to call it. I love that stuff. They’re so close-minded. They don’t have to necessarily agree, but they should at least say, “Why? What about this? What about that? I’m thinking about this.”
Maybe they’re right but instead, they take this position about, “This is going to be a V. We’re going to hit bottom. Twenty-five million people are going to go back to work in a week.” That is not going to happen. That’s what they think. It was a long U. There’s the V versus the U. Everybody’s debating that. I don’t know the answer. What I do know is that the more I study and get out of my old way, then the better I’m going to be because the truth is going to be the truth. Whatever happens, it will happen no matter what I think, no matter what you think, no matter what anybody thinks, it’s going to roll out on its own magically. We have zero control over it. If you can back away from that and look at it for what it is, you’re going to be better off.
One of the greatest fears people have been magnified based on social media is the fear of being wrong, the fear of looking bad because you were wrong. That’s the thing. Everybody’s wrong. We have one perspective and that’s where it goes to what you were saying before. The smartest people are the ones that realize they don’t know anything. They operate like that even though they’re brilliant. Our friend, Andy Tanner, he’s totally like this and I know you are as well. There are many others that have so much wisdom, but yet they’re the last to say that they know anything or know what they’re talking about even though they do.
It’s the mindset of being open to other perspectives that either reinforce or potentially tweak the way in which they could see things. Plus life is always evolving. It’s changing and different things are happening. That could be the same pebble. It might be a rock. It might be a little leaf landing on the water creating a ripple effect, but it may not last that long. Who knows? At the same time, if you’re not open to seeing how something different is going to impact things going forward, it’s going to be hard to navigate those waters.
I got dinner with Robert Kiyosaki. I’ve been in hundreds and hundreds of meetings and dinners, lunches and breakfast with him and had hundreds of conversations with him but there’s one thing that he’s never done. That is he’s never ever told me what he thinks about something and 100% of the time, he wants to know what you know. He’s listening to you. He’s trying to figure out how to change his position. He’s not taking your position. He’s trying to change his position. If more people did that, instead of trying to talk over somebody while somebody else is talking, if they sat and listened to what somebody was saying intently and they were super aware, they could become super-objective and not so fixed, then they would learn more. I like to learn from other people. I don’t have to take on your position, but I can respect it. I would rather say, “That’s not how I see it. I see it this way.” I would rather have a conversation because you still might change my position.
That’s the part that frustrates me. It’s when people have fixed positions on things. Robert taught me that. I already know. He’s going to do the same thing you did, “What book do you read? Tell me about it. What did you learn from it?” I already know that’s the exact conversation he was going to have and he’s going to say that exact question. “Did you watch that video and what did you learn from it?” That’s what he’s going to say because he already sent me two videos. I haven’t seen either one yet because I’ve been working all day. I’ve got to watch it because I know he’s going to ask me that question.
I did the cardinal sin of podcasting with Richard Duncan where I’ve recorded almost two hours of a show. It was that intriguing about some of his thoughts about what’s going on and he has a new book that’s coming out as well. He has a completely different perspective than most economists. My mind opened up to many different ideas as far as how the monetary system works. He’s a brilliant guy.
If you look at Chris Martenson, Richard Duncan, Robert Kiyosaki, Mike Maloney, they all have different views. That’s what I love. I want to know what they see. I want my position changed because I’ve made many mistakes having a fixed position. You get killed by what you don’t see.
Your greatest fear is the opposite of what most people’s greatest fear is.
I get killed every single time just because I’m blind. I’m like, “What was the lesson there? What could I have seen better?” It’s always to ask better questions.
There are new things under the sun, but I don’t think there are many truths that are new under the sun. They manifest differently. I look at the events that are going on and there is so much good if you look for it. Yet most people are drawn to popular culture and opinion. Unfortunately, most of it is pessimistic and there’s truth in there. At the same time, there’s a lot of truths in some of the optimistic perspectives. They’re just a little bit harder to find. I look at this being one of the greatest lessons that society is going to learn in our generation. We’re less than a few months into it. That’s what’s crazy about it, how quickly it happened, how disruptive it is and will be. At the same time, it’s creative destruction. There’s so much creativity. That’s where humanity shines. It’s during these disruptive difficult moments.
It’s so true. The difference in hardship is between the ego or humility. The ego is super personal. It’s all looking at things out. It has highs. It has lows. It’s more of vertical growth, whereas humility is more of horizontal growth. It’s more about empathy. It’s more about leadership. It’s more of a big picture. The reason people have fixed positions or the reason that they react, they comment quickly and the reason they get defensive is all ego. If people can get that in check and start to look at it from the other person’s perspective, you don’t have to take it on and have empathy around that. You’ll learn a lot more. For me, when I first studied that book, Ego is the Enemy years ago, I had a lot of a-has in there. A lot of my belief system and a lot of things that I used to do were based on ego. Once you move that aside, the world opens up.
Real Estate During COVID: Now is not the time to buy. This is a time to step back and watch because there is a lot of risks.
I love Ryan Holiday’s stuff. It shows the balance of perspective between ego and humility. It’s a profound concept. That’s a book that you can read a hundred times and still get something out of it.
I had no doubt that you had read that book.
Thank you for taking the time. There’s been so much value here. Maybe end with some of the best ways for the audience to follow you, learn from all the stuff that you’re putting out there. Is it KenMcElroy.com? Is that probably the best place?
Go to KenMcElroy.com and then you can go to our company, which is MCCompanies.com if you want to see what we’re doing there. I’ve been putting everything up on KenMcElroy.com. I’ve got podcasts and I’ve got videos and most of those are free. There’s some stuff behind the wall, but that’s for real estate investing and education. Anything that’s been happening now and anything that we’re doing as a company, I’m putting up there for free, forms and all that stuff. You don’t have to buy anything. Get on your email system, and then you have access to everything. Hopefully, it will help some people.
This was years and years ago, we were on a beach and I was like, “Ken, you need to do membership. You need to put videos up there. You need to put all this stuff you’ve ever done up there.” It’s so impressive to see what your team is doing and how much value that’s creating. Thank you for tuning in. Ken, do you have any final words?
All I would like to say is we’ve been here before. It’s a little different. This is a virus. It’s not a financial meltdown. It’s not planes hit in the World Trade Center. It’s not dot-com bust. The same fundamentals are going to happen. There’s nothing to be afraid of other than be safe around the health piece. Pay attention because this is the greatest time. People are getting wealthy if they make the right moves.
Kenny, thank you so much. We’ll have to do a follow-up in a few months to see where everything lands and what life looks like then.
For over two decades, Ken McElroy has experienced great success in the real estate world–from investment analysis and property management to acquisitions and property development. With over $750 million investment dollars in real estate, Ken offers a unique perspective on how you will get the biggest return on your investments.
Ken is the author of the best-selling books The ABC’s of Real Estate Investing, The Advanced Guide to Real Estate Investing, The ABC’s of Property Management, and most recently his book on entrepreneurship: The Sleeping Giant, where he shares his real-life examples and ideology of how to be successful in business and in life. As the Real Estate Advisor to Robert Kiyosaki of The Rich Dad Company, Ken is also a chapter contributor in the newly released Rich Dad book, More Important Than Money: an Entrepreneur’s Team.
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“The beauty of the soul shines out when a man bears with composure one heavy mischance after another, not because he does not feel them, but because he is a man of high and heroic temper.” Aristotle
What a week!
In this special episode, Patrick takes a moment to share his thoughts on the week and what he is doing. Then, he sits down with his good friend Jason Hartman to share their perspectives on COVID-19, the markets, the economy, and the massive opportunities available.
Listeners who have been learning over the last few seasons must see this as a perfect environment for you. Moments like these magnify the value of the right mindset, anticipation, and preparedness. Although there are temporary physical concerns which I encourage you to be vigilant of, I hope you are poised to take some action.
Jason Hartman is the Founder of the Platinum Properties Investor Network and host of the Creating Wealth podcast, which is heard in more than 180 countries. Jason is a genuine self-made multi-millionaire and serial entrepreneur who owns 21 businesses in investing, financing, real estate development, and SaaS software. He has owned properties in 11 states, had hundreds of tenants, and been involved in several thousand real estate transactions. He has visited 83 countries, enjoys adventure, fitness, and lifelong learning.
Jason Hartman is the host of 23 podcasts with listeners in 189 countries, over 15,000,000 downloads and over 5,000 episodes where he shares powerful strategies for business, investing and living the good life. Check out his podcasts and resources at www.JasonHartman.com or www.HartmanMedia.com Available on iTunes and your favorite podcast platforms.
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Patrick is the President and CEO and started Paradigm Life in 2007 after learning from his mentor Kim Butler about financial strategies outside of Wall Street.
With a background in economics and marketing, Patrick immediately realized the opportunity to teach investors, business owners, professionals and families on a large scale using modern digital media and communication technology. Since 2007 Paradigm Life has worked with thousands of individuals in all 50 states.
Run-of-the-mill advice is everywhere. But in order to achieve different results, your strategy has to be different.
In this book, you're going to learn about a hundred year old strategy that's tried and proven to give results. Are you ready to
shift the way you think about investing?
WHAT THE PROS ARE SAYING...
Once in a great while, a person comes along who can explain financial concepts so clearlu that all of a sudden,
what had been a mystery becomes obvious. For many people, Robert Kiyosaki was that person when he wrote Rich Dad Poor Dad. For me,
that person was Patrick Donohoe when he first explained what you're about to learn in this book.
Tom Wheelright, CPA
Author of Tax-Free Wealth, of the Rich Dad Advisor Series
"Patrick's book explains why every American is experiencing worry, fear, and uncertainty with thier finances.
'Heads I Win, Tails You Lose' outlines a better way to take back control and live a life you love."
"Storyteller, man of honor, humble seeker of truth - these are the words I think about when Patrick comes to mind.
I've been looking forward to this book for quite a while and am pleased to tell you, the reader, it is worth the wait."
CEO, Partners for Prosperity
"Patrick is someone that I call upon to learn the strategies of the world's richest people. 'Heads I Win, Tails You Lose' provides
a creative approach for managing wealth outside of the old and tired methods used by everyone else."
Founder of Capitalism.com
Book Nailed it
A should-read for anyone looking to be smart with thier money, and smart enough not to just follow the herd.
Robert K. Cunningham
Very enlightening and actionable!!
If you want a real path to Economic Independance and not a theory this book is for you.
Wise if I read this years ago.
Great book, made me change my thinking on my investment situation.
Take back control of your money
The truth about money. You will be surprised with the information. WOW!
A must read
Outstanding book. Details information most people are not aware of in creating a sound financial programs.
...a critical financial strategy
I simply couldn't put this book down, I read it cover to cover in 1.5 days! #VeryEngagingRead
ABOUT THE AUTHOR
Patrick Donohoe is the Founder and CEO of Paradigm Life and PL Wealth Advisors. Patrick and his team teach thousands how
to build wealth, create lifetime cash flow, and leave a meaningful legacy.
Patrick was recently honored by Investopedia as one of the Nation's Top 100 Most Financial Advisors. He is a highly sought
after presenter and speaker at financial-based events around the country and is the host of The Wealth Standard podcast.
Patrick grew up in West Hartford, Connecticut, and attended the University of Utah, where he received his bachelor's degree in economics.
He lives in Salt Lake city with his wife and three children.
WHAT'S INSIDE THE BOOK?
THE CHAPTER LIST:
1. ORIGINS OF THE AMERICAN DREAM
2. THE PERPETUAL WEALTH STRATEGY™
3. QUESTION EVERYTHING
4. BREAK AWAY FROM WALL STREET
5. AVOIDING THE INVESTING AND LENDING TRAP
6. THINK FOR YOURSELF
7. A SOLID FOUNDATION
8. B ELIKE THE WEALTHY
9. MYTHS AND TRUTHS OF INSURANCE
10. SAVE, BORROW, INVEST, AND BUILD WEALTH
11. START, BUILD, AND PROSPER YOUR BUSINESS
12. YOUR FINANCIAL FUTURE
13. MAKE THE SHIFT
14. TAKE BACK CONTROL