financial planning

Physically Mastering Wealth Series

TWS 27 | Physically Mastering Wealth

Is it possible to physically master wealth? For the first part of the Physically Mastering Wealth Series, Patrick Donohoe discusses why understanding how habits are formed and how behavior is conditioned helps in creating more wealth. It’s all about figuring out what works best and leveraging your resources to produce optimal results. And then doing it again and again. Want to learn more? Tune in for more insight on how you can make creating wealth a habit!

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Physically Mastering Wealth Series

Part 1

One of the driving forces of human beings is freedom, which infers financial freedom too. Several years ago, I set out to discover how any individual, regardless of their financial situation, could evaluate their finances in five minutes or less and have a firm date when they could achieve financial independence. The latest version of this calculator, which is free for readers, can be found at TheWealthStandard.com/calculator. The calculator is going to take you just a few minutes to complete, and it’s going to provide you with a specific financial independence date. Go check it out.

This episode is picking up on something I discussed last time, which is the idea of physical mastery. We show up to life doing pretty much the same thing day in and day out. It’s how we’re biologically wired. There’s so much going on in society now. Information, ideas, opinions, stimuli from every different angle. Look at our phones and how distracting with all the things that we can do. If you want to make progress when it comes to your wealth, you have to understand how habits are formed and how behavior is conditioned.

Without that, it’s going to be a challenge. Ultimately, that leads to taking excessive risks and risks always end in failure usually, especially if you’re taking consistent risks like that, and ultimately will lead to new condition behavior. Hopefully, if you’re learning those lessons, but taking proactive actions will allow you to start to pick up on other people’s failures and discoveries so that you don’t have to necessarily take too much risk and put failure on the line and obviously unintended consequences of that failure.

We’re going to get into 1 of the 2 primary ways in which Wealth Building occurs. I want you to consider this as a possibility for yourself. This is based on my experience. I’ve had the fortunate opportunity to meet lots of different people, experience a busy business, and see not just my own myriad of failures but also those of others in different businesses and industries, etc. These are the conclusions that I’ve come to. They’re not necessarily these absolute conclusions that will not evolve. Of course, they’re going to evolve, but I wanted to talk about the first, which is leadership and operational leverage.

It all boils down to leverage. I want you to consider the possibility that making more money, being wealthier as far as producing income is in proportion to the leverage of your time, number one, and then also relationships with other people. In other words, the idea that sentence is making a bigger impact with the time that you have. The biggest challenge is that 99.9% of us have been conditioned to do the opposite.

If you want to make progress when it comes to your wealth, you have to understand how habits are formed and how behavior is conditioned. Click To Tweet

Let me give you a story. This is a conversation I had with a younger guy, cool guy, good energy, lots of ambition, but he made a comment which points to what I’m trying to get across in this episode. He said first off, he managed a small supplement store of a bigger conglomerate. They were growing successful. He loved his job. He loved being healthy, working out and physical conditioning. He made a comment which he told me everything. We had a longer discussion and went into the details of it.

He said that he couldn’t leave his store for long to go to an event, be away for the weekend and take a day off. He can’t leave because the employees are or assistant managers will mess it up. They’ll screw it up. They won’t do it the way that he does it. In that, this is how most of us are conditioned because we’re raised in the US school system wishes, which is based in the Prussian system.

The Prussian system was designed to train factory workers as well as military soldiers. It’s for us to just follow orders or tasks. We’re not taught to necessarily be a leader. We’re taught to we’re a manager and tell people what to do. This is a huge example between the idea of management and leadership managers manage tasks and tell people what to do they usually use the tactic of fear to do it. That’s what society continues to condition in the political realm, in the school educational system, as well as in Corporate America.

That’s a big difference because that’s not leadership. Leadership initiated more training and conditioning then instead of disciplining somebody, it’s coaching them and continuing to train them until proven processes and principles gave become part of their makeup. It’s been conditioned into them where they would do what you would do. They would do what has been proven to be done. In this case, in this story, processes weren’t documented, training did not revolve around proven and successful processes or principles.

That’s why it led to this very awkward manager-employee relationship, which usually never progresses. This is where I want to highlight how valuable it is to understand the idea of leadership because if this manager of one store, he understands why his store was one of the most successful ones in the territory. He knew what it took to run a successful business.

Those processes, he held them close to the trust because there was so much meaning there. It was him. He was validated. He felt important because he was successful. The idea of leadership is not keeping that to yourself. The idea of leadership is training others to do exactly what you would do to get that success.

TWS 27 | Physically Mastering Wealth

Physically Mastering Wealth: Consider the possibility that making more money, being wealthier as far as producing income is in proportion to the leverage of your time relationships with other people.

 

What does that have to do with leverage? If you have one store that’s successful, that’s being run by somebody doing things the way that you would do them, then two stores are possible, then 3, 4, and 5. Let’s say that a district is comprised of five stores. If you’ve done five stores, now you can do a district. If you can do one district, you can do 2, 3, 4, 5, or 10. Now you’re upwards of dozens of different shops that you as a leader are able to have stewardship over it because you have conditioned into employees, proven processes and proven systems.

This obviously supplement stores, but this applies to all industries. The technology industry has mastered this just because of how complex that world in that industry is. The more you understand leadership and how much you can leverage time by employing proven tactics, proven strategies, now you can control a host of resources and subsequently make a lot more money.

I’m going to keep going with this idea of operational leverage because our world is evolving rapidly and people are looking for ways in which they can be more efficient all the time. You don’t have to go out and necessarily invent it. I looked at really two things in the business world that create an immense amount of leverage. The first is the media. The second is technology. It’s the same idea as you’re looking for ways in which you can do more with the time that you have.

Let’s use an example of a story. We’re doing a live event. Zoom-wise, there are a couple of people that are doing the event. It’s basically training that I do a couple of times a year for other financial advisors. I have done this with a partner of mine for years. First off, the business that I run is very different than the typical financial services, financial planning practice because we’ve done it for many years virtually through webinars. This was before webinars even popularized. Before video webinars, we used to go to a meeting.

Adobe Connect is another one that we used way back in the day. It’s super clunky software, but we didn’t have people come into our office, but the typical financial practice is that they went to people’s houses. They had people come into their office. It’s inefficient in my perspective. We were always told, “You can’t do that.”

People will never do that. They’ll never do business with you unless you build that face-to-face relationship. Even early on, we had compliance departments flying out to our office gate because they were like, “No way you can’t build a relationship with somebody. You can’t do business with people without seeing them face to face.” It was a very challenging time.

Obviously, it’s been adopted by a lot of different businesses these days, but my point is it’s very difficult to go from what you’ve been doing to something that’s new. This is why conditioning is so important. Physical mastery requires repetition, but even during COVID, because with this advisor group, I had been talking to them for years about virtual business and meeting with clients over webinars, the technology was easier. Conditioned behavior is like, “No. I can’t do that.”

COVID forced it. This is usually how behavior changes. Either it’s a conditioned change, very strategic we condition change or there’s a massive disruption that forces change. If you think you need to change something, it’s going to continue to compound, grow and fester until you’re forced to change. Might as well rip the Band-Aid off right now.

There’s two things in the business world that create an immense amount of leverage. The first is the media. The second is technology. Click To Tweet

COVID comes on and people start to see, “I can do Zoom webinars. I can do this and that,” before they had to conduct a conditioned behavior to do things a certain way because that’s where they found success. Obviously, it makes sense, but at the same time, this is the idea behind Zoom being hugely beneficial because now you can have 5 meetings a day instead of 2. You can meet with dozens of more people who don’t necessarily have to come to your office in coordinating schedules, getting time off, getting a babysitter and the list goes on.

The idea of just having technology of being able to communicate with somebody face to face across the internet, massive leverage is possible because of that and lots of businesses experience it. That’s just an example because there are technologies everywhere. They are essentially finding ways to replace predictable things that you are currently doing manually. I’m not saying that you replace people as a whole. There are theories around AI and robotics doing that.

I don’t want to go that far. What I’m saying is that there are inefficiencies in how you manage your time. The most valuable time that anybody has is spent in front of other people, like engaging in meaningful conversation, but there’s lots of other stuff that takes away from that, whether it’s paperwork, documentation, appointment reminders, how you do the actual meetings or taking notes.

I can keep going on with examples, but there are technologies that are coming out that allow you to spend more time in the most meaningful things, begin to look for it, and incorporate it into your system and your rhythm. Technology is the first thing. Media is the second thing, whether it’s video or podcasts. When you do a video, you do it once you spend an hour doing it, “I’m going to do this podcast for 15 or 20 minutes.” It can be listened to by one million people, but I only spent 15 to 20 minutes on it. That is leverage.

I have another story. I have a good buddy who is successful in a specific construction niche because he was able to find a foundation raising. When a foundation settles and cracks, he found a very efficient process that was developed in the Midwest that he went out and learned and then brought to Utah. Now he has locations in Northern and Southern Utah where he has these systems that he’s used to raising the foundation and do it inexpensively as well as efficiently quick.

It’s what he’s done to train his staff. He started to use media. He’ll record how this machine is operated, how you do a phone call, how you go out and do a bid. He found all the different successful ways in which he did it, and then he’d created media that trained staff in order to do it. That’s another form of media being an ideal way to leverage the most predictable things because he found that time and energy were being spent in training. Leaves doing it manually every single time. There were certain things in training that were predictable that he had to do over and over again.

He started to use media as leverage so that he could spend his time doing more meaningful things. There are lots to unpack here. I’m not going to do it in this show because there are so many different examples, but building physical mastery around the idea of leadership is for you to constantly be finding ways in which you can be more valuable with the time that you have.

It creates massive wealth for people you look at, whether it’s district managers or executive-level positions. They understand operations and leadership of people, so that with the time that you have, you’re able to have stewardship over lots of different production because you understand the dynamics of leadership people, relationships as well as proven and successful processes.

TWS 27 | Physically Mastering Wealth

Physically Mastering Wealth: Building physical mastery around the idea of leadership is for you to constantly be finding ways in which you can be more valuable with the time that you have.

 

I’m going to give you some books. You guys can go check out the show notes on TheWealthStandard.com for some of the best books that are out there. I mentioned a lot of this stuff in my book, which is Heads I Win Tails You Lose and get a free copy by just going to the website under the resources tab. There’s a couple of other Cameron Herold. I’ve known Cameron for several years. He has several books on this. One of the first ones was Double Double, but he has other ones called Meetings Suck. He has a Vivid Vision. He’s a great author. It’s very easy to read books and understand. They have actionable things that you can do.

Another one, a couple of books by Jocko Willink, Dichotomy of Leadership. It is an awesome book. He also has Leadership Strategy and Tactics, which is a field manual that gives you playbooks of how to find opportunities to better lead your team instead of just managing them. There’s Traction by Gino Wickman. This is a way in which you can incorporate processes into your business and find successful processes and have your team replicate those processes.

The CEO within another great book that I’ve come across, and then most of the stuff by John Maxwell is absolutely incredible. That’s part two, which is production leverage. You are producing wealth which I believe is the one you have the greatest return and there are infinite possibilities, but you have to understand the ideas of leverage.

Find ways in which you ingrain that in your mind because your body and mindset is pretty much influenced to do the exact opposite because that’s how we have been raised in this United States society, under this hierarchical management-driven, fear-driven, whiplash-driven society, and that’s not the way to lead. That’s not how you create leverage. Next episode, we’re going to talk about financial habits, some of the few things you can do to institute financial habits that will create wealth. Thanks for reading. We’ll see you back next episode. Bye.

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Todd Langford Series: Mathematics And Finance – An Introduction With Todd Langford

TWS 86 Todd Langford | Mathematics And Finance

 

quote by the Mathematical Association of America says, “It’s time for all members of our profession to acknowledge that mathematics is created by humans and therefore inherently carries human biases.” This intriguing statement makes us think what math is and its role in general. To help us answer these questions, Patrick Donohoe brings on Todd Langford in a series of episodes that revolve around the principles of math and how math specifically relates to finance. Todd is one of Patrick’s original mentors and the CEO and Founder at Numbers Analytic, Inc. Today, they discuss why most of the significant innovations resulted from accidents and also touch on the importance of mathematics and curiosity.  

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Todd Langford Series: Mathematics And Finance – An Introduction With Todd Langford

I’m going to introduce a series that’s going to begin. It’s going to be an episode per week. Short episode but it’s a snippet of a couple of long interviews that I did. Let me introduce the topic, subject and why. I came across a quote that led me down one of these philosophical paths. I had lots of breakthroughs and understandings of certain fundamental, simple things. I wanted to express that with you and expand upon it in a number of episodes. Who knows how long it will go for? I want you to understand the quote, at the same time, it led me to understand other things. The quote is by the Mathematical Association of America.  

It said, “It’s time for all members of our profession to acknowledge that mathematics is created by humans and therefore inherently carries human biases. It’s an interesting quote. I’ve stepped back and caused me to think about what math is. Did humans create it? Does math carry biasesIt’s an intriguing statement. I’m going to unpack it in a sense. As I began exploringI found out number one, there’s been this debate going on for quite some time between two campsThe intuitionist camp says that the human mind created math. There’s another camp called the Platonists who argue that math was a discovery of the human mind. I was reading and understanding both points of view. I realized that in the end, I’m not sure if it matters that much. 

Most of the significant breakthroughs came from accidents. Click To Tweet

It caused me to question what the role of mathematics is in generalI wanted to explore it at a more practical level. What did it have to do with my life? What would it have to do with my profession? What would it have to do with anyone else’s lifeSome of the conclusions are math is a more objective way to evaluate a hypothesis or an assumption. Some simple examples, this comes down to the scientific revolution being able to prove and understand what goes on below the surface. What I mean by that is a surface observation or an assumption we can make is maybe based on how a child looks outside and sees the sun rising in the East and then going West, and it sees it again. You can reason the sun revolves around the Earth. 

You can see how these surface observations can lead to faulty assumptionsI was on a hike with two of my kids, my youngest son and my fourteen-year-oldWe got up to this peak, it’s on the East side of Salt Lake City. It was an amazingly clear day. You can see all the way across to the other side of the great Salt Lake. I thought of there, I can see why someone would assume that the Earth was flat. These general surface observations have been disprovenScience has disproven it because there was an assumption made. A person wanted to test that assumption and realized that it was false. Those are simple examples. That trend has gone on for quite some time and it’s led to an insane science of revolution and the miraculous life we get to live now.  

I look at math more objectively, I’m not going to say pure objectively with regards to math but more objectively, testing out an assumption or hypothesis. That’s where I realized I’m going to get down to some basic truths. This is what I came acrossI’ve come across this a couple of times, this thinking model called First PrinciplesElon Musk credits this way of thinking as to why he’s so successful with Tesla, PayPal, SpaceX, SolarCityyou list all the companies. He says that he finds opportunities using the First Principles thinking methods. Let me unpack that and relate it to the mission of the showThis thinking modelfirst principles, predated MuskThis was something that was maybe born during Aristotle’s times. It was used by Copernicus, one of the most famous physicists of our modern time, Richard Feynman, who’s deceased. His way of thinking, his books, you can see it there when you understand first principles. He also used it to understand the core of something.  

TWS 86 Todd Langford | Mathematics And Finance

Mathematics And Finance: People don’t want retirement; they want to be independent.

 

What is first principles? First principles essentially boils down a problem or an idea or assumption to the fundamental truth. From that fundamental foundational level, you reason up from there. Musk says that the way in which most people think is reasoning or thinking by analogy. How he describes that is people copy what other people are doing, and then they try do it with slight variation. They look at the activity, the solution something that other people are doing to solve a problem and make slight variations and tweaks to that. First principles goes to that deeper level. Instead of assuming the truth of the world is flat, you go to the deeper level to understand what is that fundamental core truth. Going back to the mission of the show, I’ve made a claim in the book I wrote in 2018. It’s also the purpose of the show and reasons why I have certain guests on is because I have the assumption that people want to achieve a meaningful life.  

I also have an assumption that people want to be financially independent. That’s the mission of the show, to empower people to those ends. It caused me to think. I realized something that, to me, this idea wasn’t born using this rational line of thinking. The financial services industry specifically financial planning, retirement planning is a multi-trillion industry, finance, personal development. Achieving these ends of financial independence and a meaningful life, I don’t believe that they’re wanting to achieve. I believe that these financial industries are pushing for this end result of retirement and being successful with the way in which you manage money until that point in time. This goes to thinking by analogyI don’t believe that retirement is what people want. They’re solving for retirement. This comes from experience working with people as a financial advisor. They don’t want retirement. They want to be independent.  

They don’t want to necessarily work in something they don’t like. That’s why they want to retire. They also would rather do other things than work all the time, which is why they want to retire. Financial independence is possible sooner than 65. It’s pushing this date out to 65 years old. I don’t believe that’s necessary anymore. I don’t even believe it was ever necessary. If you have this end result and you have this entire system designed around this end result, right then that narrative is going to continue and new entries into the system are essentially going to think by analogy and try to make improvements. Maybe it’s the mutual fund, the ETF or the asset allocation model. It’s still to the same end result but there are slight variations to it. I want you to you to consider that as a possibility of why you are managing your money. What’s the purpose? Why are you investing? Boil it down to the fundamental truth. What will that give you that you don’t have now? What problem will it solve? 

Once you can get clear about those end results, then you try to remove the constraints between where you are and where you want to go. What does this have to do with math? If math is a better way to evaluate rather than just by observation or by copying what somebody is doing and making a slight variation to it, it’s the measure of the evaluation of these assumptions. If you go to financial planning, investment planning, there are these surface level assumptions that are being made about rates of return, income, purchasing power, taxation. There are a number of things as far as assumptions being made in the financial services industry. I looked at have those claims been properly evaluated. This where I’m going to move to as far as this series is concerned. I am going to have on as a guest of mine, a man that was one of my original mentors, Todd Langford. He’s the developer of financial strategy, financial advising, financial planning software. He’s been doing that for many years on multiple systems and platforms. In general, he’s a good man. Also, he’s curious about life and an engineer at heart, wanting to know how things work, the truth behind how things function. Because of that, he’s done some pretty crazy, bizarre things.  

Ignorance in a particular field or idea allows you the ability to learn more. Click To Tweet

He has these crazy multistage fireworks display and this big ranch that him and his wife, Kim, live on. He’s programmed this metal 3D printer laser cutters from his phone. Everything in his home, he has managed, programmed and automated. He built this massive solar complex that powers not just his house but other houses. He built the structure behind ithow the batteries worked and how the solar panels would be facing and the pitch of the roof. He’s a brilliant man. He understands the principles of math specifically how math relates to finance. To be able to evaluate at a more objective level the claims made about what money should be doing both the end result but also the methods to get to those end results. I hope you enjoy this series. The series will go on for most likely several weeks, several months. Who knows? Thanks for tuning in. I appreciate the support. We have some new stuff coming out, some tools that relate to this subject. Make sure you bookmark the website and also look out for some emails coming from us. Take care.  

Todd, first question I have for you is our relationship. You’ve always been a curious person. What’s the driving force behind that curiosity? How would you characterize that?  

I always like to see a different way of doing something. Kim relates it to my code and the way that fits in. Sometimes, one direction of answerI may not like the answer that I get, so I try to attack it in another way to see if those two come up the same. Where that differential is drives the idea somewhat of efficiencies. It’s pretty easy to get into a rut of, “This is the way it’s always been done.” In order to keep me from getting into that road of this is the way it’s always been doneI tend to try to do it a different way.  

What do you discover in the process? Let’s say you find that it’s been done this way. That way is inefficient, inaccurate, it could be done a better way. What happens in the experience of that discovery?  

TWS 86 Todd Langford | Mathematics And Finance

Mathematics And Finance: When you don’t like the answer you get, try to attack it in another way to see if those two come up the same.

 

Often, ignorance in a particular field or idea allows you the ability to learn more. It allows you to innovate a lot easier because you’re not smart enough to be on the path of what somebody’s already discovered. If you look at history on innovation, most of the significant breakthroughs came from an accident. The reason they came from an accident is because the tried-and-true way that everybody had always done something was limited on how far it could go. When they made a mistake, they figured out it’s not that what we were doing is wrong. It’s that our thought process was off base. We have to shift our mind and thinking into a place. It’s difficult to get out of the box that you’ve created for the way things have always been.  

Since those accidents occur from the outside, I find myself a lot of times seeing things that you’ve always heard were true but maybe they’re not. When you dig pretty deeply on things, you find that the label professionahas an interesting connotation. These are mainly the people that are considered professionals. They’re supposed to be the ones that know it all but a lot of times you find out it’s just that they know a little bit more than everybody else does. If you dig a little bit deeper, sometimes you find out maybe they don’t know everything that’s there. I found some of that out. You mentioned about the solar project. As I was going through some of the solar stuff, I would come up against peopleI would question them like, “Can I do this? They said, That won’t work.” I would back it up and say, Here’s the math. Follow me with the math behind what we’re talking about doing. They’d look at it and there’d be this pauseI was like, “That could work.” The only way I could find that was doing it because nobody would give me a definitive answer. 

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About Todd Langford

TWS 86 Todd Langford | Mathematics And FinanceTodd Langford is the Founder & CEO of Truth Concepts, Partners 4 Prosperity, and Prosperity Economics Advisors.

 

 

 

 

 

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SPECIAL EPISODE on COVID

“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.

Stay safe, stay healthy, stay positive.

 

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About Jason Hartman

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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