On James Rickards’ “The New Great Depression” And The Greatest Lesson Of 2020 With Andy Tanner

TWS 76 | The New Great Depression


You may ultimately agree or disagree with it, but James Rickards’ The New Great Depression is certainly one of those books that have something significant you can take away from whichever way you go. Coincidentally, it might also be the greatest lesson from 2020 when it comes to business and investing. Whether last year was a good one or not for you, it certainly taught all of us how the environment can affect us and how we can become better prepared to navigate challenges when they come. It was certainly the year when a lot more people began investing in financial education, personal development, and other things that could help them in that regard. With what is going on with the economy, monetary policy, and market behavior, something is definitely coming down and we better be prepared for it. Listen in as Patrick Donohoe shares his thoughts on this with Rich Dad Advisor, investor, author and educator, Andy Tanner.

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On James Rickards’ “The New Great Depression” And The Greatest Lesson Of 2020 With Andy Tanner

Thank you for tuning into this episode. I get to sit down with a Rich Dad advisor, investor, author, educator, and someone who I consider a close friend. He’s been on the show before. His name is Andy Tanner. You can go check him out or He also has a pretty awesome podcast. Andy and I both had the opportunity to interview James Rickards about his book, The New Great Depression. I had a chance to read it. I get to compare notes about our interview, as well as some of the experiences we had in 2020 and what we see coming in 2021. There are lots of stuff going on. You guys are in for a treat.

Before I get to the interview, I have a special announcement. There is a free online virtual event coming up with someone that I’ve known for several years. He’s also a Platinum partner with the Tony Robbins Group. I’ve had a chance to sit by him and learn from him. His name’s Brad Sumrok. He is considered the apartment king and specializes in educating people about investing in multifamily and residential real estate. He has a free event coming up in the first week of February 2021. You can go get more details at

He has a pretty cool lineup of speakers. Robert Kiyosaki is one of the headliners, as well as Ken McElroy, Tom Wheelwright, and Robert Helms from the Real Estate Guys Radio. It’s a free event. It is a great time to educate yourself. There is a lot of movement when it comes to people leaving one state and going to another. When I moved to Salt Lake, there were hardly any people. It seems like buildings are being torn down by the dozen and apartments going up because of the influx of people.

That is a drop in the bucket compared to people going to states like Texas and Florida. It’s a great time for that specific type of investing. At the same time, go educate yourself first so you know what you’re doing. I hope you enjoy that. Brad also has a big presence on Facebook. We’ll post the links on our Facebook page. Make sure you go and like The Wealth Standard Facebook page, as well as Instagram. That’s it. I hope you enjoy the interview.

Thank you for being a part of the show. You’re a part of the show. We’re speaking to you, a good friend, mentor, COVID-19 shoulder to lean, and fashion icon in a sense.

In our relationship, I pretty sure you’re the mentor. I am the mentee or the apprentice or whatever you call me. Patrick, you and I have been friends for a long time. You’re the only guy I’ve ever dated. We had some mandates. They weren’t mandates for healthcare but if there’s a cool movie that we don’t think our wives will like, we took up and go. Thank you for having me. It’s always good to hang out. Bill Gates and Warren Buffett gave a townhall once. They were asked what’s the most important thing they do every day. Both of them said learn and study. That embodies what you do. You always seem so well read and you always are abreast of the latest and the greatest everything, whether it’s a gadget, a technology, a policy or a business philosophy. I love hanging out with you because you stay on the cutting edge of everything.

You’re the smart one because you circumvented all this stuff that stands in between what I’m trying to do and what the end result is. The end result ultimately comes down to psychology, how people behave, and what makes them do this, what makes them do that, how to predict it. I have to learn a lot of those lessons thinking, understanding details and facts. It makes that much of a difference. In the end, human behavior, if you understand it, is predictable.

2020 taught us to be prepared for whatever the environment can bring about instead of always doing knee-jerk reactions. Click To Tweet

Psychology is the most fascinating hobby that I have. People say, why would a guy who wants to teach primarily stocks and options trading say so much about psychology? That’s what drives every decision. It’s that combination of emotion, maybe thrown in with some rationalization and logic. I’m trying to figure out how my brain works, doesn’t work, works with flaws. It’s a fascinating thing and speaks to what we’re going to be talking about in terms of 2020 came to a close. Now we’re in a post pandemic world. There’s so much to talk about in terms of economy, monetary policy globally, fiscal ideas and politics ideas. It’s a great movie to watch.

It’s an ideal case study that will be used for the ages on how people respond, not just individuals but governments, businesses and markets. That’s why I wanted to do this show at the beginning of 2021, especially after you and I both got a chance to interview and talk to Jim Rickards about his book. It’s not so much learning where to invest or what to pay attention to. For me, the biggest lesson in 2020 after COVID was understanding how an environment can impact you, and then being prepared to see how the environment is going to evolve. My business did good in 2020. I don’t know if I did good as a businessperson because my environment changed. I found myself coming to an empty building and not associating with people. I didn’t realize how much energy and motivation, how much I relied on that in the past until I was gone. It was hard.

I’m going to give people a peek behind the curtain. Patrick has a good side office. I don’t know how many people you have employed there, but it was sizeable. He has a good spacious office, several levels, many rooms. I got to tell you, I went up there with the pandemic and everybody, the golf mechanism that Patrick had to burn off all that energy is phenomenal. He’s got dents in it but it held most of them, only a couple of shakes. Your golf game went through the roof during the pandemic.

It’s one of those things where I don’t like to admit it where that’s occupied and helped me balance out what was going on.

I like what you said and this might be the first section we talk about is people write books. Books that are mishmash, you don’t sell well. Books that take a stand and make bold statements. The illusion people have that might be noteworthy as the first thing to talk about is we very much psychologically like shorty. We like to know what tomorrow’s going to look like. We’re not big into negative surprises or if a positive surprise happens. We don’t like uncertainty at all as human beings. When someone can make a prediction, whether it be a good prediction or prediction of a holocaust, an economic meltdown, global warming or whatever inconvenient truth, when someone comes on and says, “This is what the future’s going to hold. This is what you can expect. It’s going to be ugly or it’s going to be the other way,” to get people’s attention and that’s great.

There are a lot of voices right now like that, “I have an opinion.” What you said at the top of the show that is worth noting is to have a psychology of preparation and say that’s a possible future. In talking to Jim, he says, “It’s easy to predict the future. All I do is 1, 2, 3.” I love the idea. I’m an overgrown boy scout. I barely got mine before I was 18, barely got under the wire. They have some good laws, and they have a good slogan, and they have a great motto, which is “be prepared.” As I look at some of the things that Rickards calls for, I think it’s a possible future. It’s one pathway that in his crystal ball he sees what’s going to happen. It’s worth preparing for in case. As an investor, a businessman, and an entrepreneur, that is a great approach. You can’t be scared of ghosts. There’s reason why you’re in the insurance business. Insurance is a preparatory move against something that might happen, not something that will happen necessarily to you.

You hit the nail on the head where life is essentially a balance between certainty and uncertainty. On one side of the scale, you have certainty where if there’s disruption, we get freaked out. There’s this built in fear mechanism to help us to stay alive and want to be alive. If everything was certain, life would be incredibly boring. We want excitement, new and novel. It’s this balance. That’s where understanding the environment in the frame of it’s going to change and evolve, sometimes subtly, sometimes COVID-19 or earthquake where it’s pretty profound. It’s understanding what happens, what could be the results of the environment, and then how you operate within that environment and within that frame. That’s where those that master that not 100% absolute or you nail it all the time, but at least understand and are aware of it, they’re better businesspeople, better professionals, and better investors. They’re better people. They know what’s going to happen and they don’t knee-jerk react, freak out, and go off the rails emotionally.

If you ever write a book or have a show, you feel like, “I have something worth reading to.” People might get the wrong idea with that posture, at least on my side. When you’re talking about knee-jerk reactions, I would say March of 2020, I was mortified. My fear gauge was buried at the top. I knew investing-wise that it was a time to buy. It was a time not to freak out. Buffett always says, “Be greedy when people are fearful and be fearful when people are greedy.” I knew that was a buying opportunity. Nonetheless, the unknowns, you got to work on your spirit and your emotions. I was frightened about this virus, where it could go and what it could do. I’m not as frightened now because I think we got an economic pandemic that’s coming next.

TWS 76 | The New Great Depression

The New Great Depression: Winners and Losers in a Post-Pandemic World (James Rickards)

I found these books called the Way of the Warrior Kid that Jocko wrote to counter balance the Diary of a Wimpy Kid. There’s a story in one of the books where his uncle is this Navy SEAL and he’s this ten-year-old kid spending the summer with his Navy SEAL uncle. He has this threshold of pull-ups. He can only do three. His uncle has him get up to this pull-up bar and do 100, not all at once. He rests and the another, all the way until he gets 100 to get through that plateau. After a couple of days, he was able to do five, and then break through that plateau. The reason I bring that up is 2020, hopefully for most, it was breaking through that threshold because what’s to come as Rickards points out is the ripple effect.

The earthquake happened and now it’s wave after wave where you’re going to have some disruption in different sectors. It’s one of those changing and evolving environments, and how will you respond? Will you respond in that knee-jerk fear-based reaction of 2020? It was the case with most people because that fear went viral because it wasn’t a subtle change. It was a significant boom change. They went throughout the world. You look back on it and that was crazy, how governments responded, how people responded, how businesses responded. It’s a great case study of what’s to come. Hopefully, it’s prepared us to understand how the environment could change, and then subsequently how we operate within that environment.

I have to be careful when I say this. In this world you have to be careful with what you say. That’s probably a good thing because I wouldn’t want to say anything that hurts someone’s feelings or anything less. The first thing we’ll say is condolences to anyone who lost someone to Coronavirus, or who lost their job, or became in a rough economic situation because of this. Let’s say that right there. With that in mind and said, in a way, aside from those types of tragedies, 2020 is a gift. I’ll tell you why. It could have been so much worse. It’s not like a fire drill.

It gave us a glimpse of a few very important things that gives you a chance to be prepared. Let me maybe go further into that. When Coronavirus hit, I was like, “This is going to be devastating.” I remember you called me in March and you’re like, “Is this going to be your best year ever?” I’m like, what do you mean? You go, “Your business is built for this. You have telecommuters everywhere. You have systems set up on the web,” and it hit me between the eyes. I’m like, “How come I couldn’t feel like he does?” Everything you said was true. Here’s what’s interesting, we had more people interested in learning financial education than ever in the history of our business.

A lot of them were very honest about it like, “I feel like a Johnny come lately. I feel like this is something I knew I should have done. I knew I should have studied more. I knew I should have been more prepared. I knew I should have been smarter, but I’m here now.” That’s a great lesson for us to reflect on here is this could have been so much worse pandemic-wise. There could have been a lot like this black plague type stuff. There are worst viruses that could have hit us than this one. It’s going to give you a little bit of time, not much, to think about the economic. People go from social to primal quickly.

I remember I was sick in March 2020. I don’t know if I have Coronavirus or flu but I was sick so I didn’t go anywhere. When we finally went out and we went in the grocery store, we’re looking at these bare shelves. I was like, “This is surreal. This is like apocalyptic. This is nuts.” I never have understood the toilet paper thing. That’s still going on. You take that experience and you say, “This is what prime will begins to look like a little bit. It’s everyone for themselves.” You would never teach your son or daughter to go to a pizza party and grab as much piece for themselves as they could. You say, “You first, please.” The reality is that’s what happened in the grocery store. As you have an economic fallout, there’s a lot of lessons in preparing. How am I going to prepare for those types of grabs and those types of primal behaviors, stock markets, real estate markets and business markets. I think 2020 is a little bit of a gift that way in saying, “What can I do in 2021 when 2022 falls apart, if it does, if there is a new Great Depression as Rickards says?” It’s a gift. It’s a warning shot.

When we talked in March 2020, I think we did an episode shortly after that too. I started seeing a lot of volume of interest in investment. Specifically, Paul Tudor Jones, I heard him speak before. It was February of 2020. He’s one of the founders of Robin Hood and Robin Hood went berserk. There was almost a half a billion dollars in call options credited to the Robin Hood platform. Robin Hood’s average age is like 29, 30 years old as far as users. They rushed in because they saw opportunity, yet they missed a key point which was the education around it. Their education was Reddit.

It was Johnny come lately and it wasn’t just Robin Hood. Ameritrade, E-Trade, Schwab, all those guys had record quarters in terms of enrollments. The difference between those guys and Robin Hood. The average Robin Hood balance is probably $2,000. There were some bad stories and people. They were Johnny come lately to the market. They didn’t respect what investment is. It was more like a run on a casino.

Stimulus is not a nutrient; it’s a drug. Click To Tweet

They got the first domino. They were aware and saw opportunity. The subsequent domino was down the path that seemed easy, not down the path that was less trodden.

What did you take away from Rickards’ interview? When you talk to him, what were some of the takeaways there?

It’s the disjointment. It’s where markets haven’t corrected much at all, the business world hasn’t corrected. What’s to come is essentially going to be the fallout. In the end, extending more toward the eviction moratoriums, you extend unemployment benefits, you provide stimulus. There was also a huge shift to online work, which was vital. The commercial real estate and retail, you look at lodging like my landlord, March and April 2020 was negotiation. We can whittle down this space and work this out, then they got the bailout, and they went to Costa Rica. I didn’t hear from him since.

It’s one of those where my lease is up, that’s why we’re moving the next couple of months. We’re not moving to their spaces. We’re not renegotiating. That’s the example where stimulus acted as a shortcut. It’s a Band-Aid. There are all forms of stimulus, yet when they stop receiving our rent, the other businesses are forced to like, “I don’t have stimulus. What am I going to do?” That’s when there starts to be the disjointment of resource allocation. There could be more money printing. That’s inevitable based on some of Biden’s plans. Who knows, but the piper has to be paid at some point in the future. That’s an artificial market in a sense. There’s always a day of reckoning.

I would agree that there’s what I would call a detachment from what we call fundamentals. When you detach from fundamentals, you’re in trouble. If you were a patient and you have a heart attack and your heart stops beating, that adrenaline shot, that epinephrin, those pads, those are stimulus, those are stimulants. They’re used when you’re dead. They’re not carbohydrates, fats or proteins that will keep that heart running well. They’re not nutrients. Stimulus is not a nutrient. It’s a drug.

When I look at the detachment from fundamentals, I’m completely blown away, especially in the stock market. You’d know more about real estate and I do, but the stock market is detached from fundamentals. What do I mean by that? Things being produced and consumed, value being given to people. There are some businesses that have done well and are thriving. Zoom has been hugely valuable to people. All the online stuff, that’s all great. There are also some fundamental things that are not being produced, that are not being expanded.

The entertainment industry, it’s rough when people don’t go to movies. You can only do so much Amazon, Google+, and Apple TV. The sports, you can still watch the NBA and NFL, those guys we’re pretty highly paid. When you look at ticket sales, revenues, hotdog, game ticketing schedule, and $40 are in your home arena and there’s no one there, this is billions of dollars. I agree with you that every time they do a stimulus, it’s another shocked up at the heart. After a while, the heart isn’t going to come back. It lives on nutrients, not paddles, epinephrin, and adrenaline. It lives on nutrition and we got to get to work where it gets going.

As part of this conversation, there are some fixed variables. There are lots of moving variables and even new variables that get introduced. It’s the element of human nature, and their drive to want to solve problems, and make things better. It’s that drive of the entrepreneur because you have a lot of stuff that’s going to come online that you may not have if it hadn’t been for COVID like new supply chain and technologies. There are tons of opportunities, but yet the point of this whole show, where there are tons of relevance to what Jim Rickards is alluding to is get the forecast right. One of his first rules of investing in how to beat the market is get the forecast. That’s where if you understand some of the fundamentals of the economy, you can look to what is most likely going to happen. It’s never going to be 100%, but getting to 80%, 90%, seeing how the environment is going to move, subsequently how you prepare yourself to act when it does or to act before it does.

The best way to prepare is to learn and to try to bring your behavior in line with what you’ve learned. Click To Tweet

The challenge of fundamental forecasting is half of a forecast. We say this is going to happen. When’s it going to happen? Fundamentals will tell you what will eventually happen. You’ll know the future. You don’t know what the day of the week or the month a year is. It’s the timing. You and I went and saw The Big Short together. They made a forecast based on fundamentals, “We have all these toxic mortgages. We have all this debt that isn’t as good as the rating says it is.” They tried to time it. How many people timed it too early and got it wrong. How many people timed play it and got it wrong? Those guys look geniuses because they happen to have gotten the timing right. Was that because they were brilliant or because they were lucky?

There had to be super high level of negotiation at the end in order to get those contracts that pay out. It’s the decisions that have been made, whether it’s from an investment standpoint or a professional standpoint. The investments, the business decisions that are going to be made, assuming that the environment is going to go back to normal because we have a vaccine. People are in for a rude awakening. He illustrates that. That’s where I would say people want certainty. They want things to go back to normal. They want the variables to be fixed the way that they work because it was working based on what they wanted out of life, yet they didn’t see the structure of uncertainty and how the weight of that counterbalanced the certainty. Now it’s going to come back in multiple forms. Hopefully, people have gotten down the lesson that the environment is going to be evolving. There’s always going to be opportunity business-wise, investing-wise, and personally. It comes down to the awareness you have about the fundamentals, about also the changing fundamentals of an environment, and how you operate within it.

I would tell everyone, be careful with what your vision of back to normal looks like, be careful what you think that looks like. For most people it looks being able to go to a football game again, not having to wear a mask, and being able to go to the grocery store and have toilet paper on the shelves again. That’s what they think normal looks like. It’s almost a vision of the past, things are back the way they used to be. Things are normal and it’s back to how it used to be. When things are back to how they used to be, take a look at the financial statement in the United States. When Trump took office, we had a deficit of about $500 billion.

It’s $4.4 trillion, suddenly. That’s astounding to go from $500 billion deficit to $4 trillion. Our debt’s gone from $19 trillion to $27 trillion and the bonds we’ve issued. That’s not back to normal. That’s a new challenge for Janet Yellen, the Treasury Secretary, and for Jerome Powell, the United States, Europe, the Bank of Japan, and the Bank of China. The dollar is way different post pandemic than it is now. That’s why Bitcoin is so volatile. It’s not back to normal. If the dollar is normal Bitcoin, wouldn’t be doing this dance that it’s doing.

Money is flowing. It’s that whole Gresham’s Law where money floats around to the most certain areas. When there’s uncertainty, it flows out of what was certain before. That’s something that he talks extensively about in his book. There is a more and more of a push to Modern Monetary Theory based on some of the stimulus that has made itself, what’s going to be the response to when things go bad, print more money to stimulate. He says that it’s not stimulation. It does not stimulate. It’s going to do the opposite.

Did you read Stephanie Kelton’s book on that by chance?

He references that book though.

I read her book when it came out because I was curious to see how you argue that. The concentration about ideas in that book is astounding. That point and how they’re selling MMT is a little frightening that those ideas can keep you advanced as far as they are to the levels of politicians that it’s getting to. They have an unsolvable problem fiscally. This seems like a bit of a panacea for it, and it’s not. Like you say, it’s fundamentally flawed. Even if it works, the thing about MMT that is really important if that’s our future, and I agree with you. Your forecast, if you say MMTs are our future, you’re probably right with that forecast. What that means is whether it works, it’s almost scary if it works. Talk about the new normal, that changes our relationship with government tremendously because now the value of money is a function of the authority of the state to jail and penalize people, as opposed to a function of value in what we see as valuable in supply and demand.

TWS 76 | The New Great Depression

The New Great Depression: When you detach from the fundamentals, you’re in trouble.


Modern Monetary Theory, if it goes forward and continues to go forward, will fundamentally change our relationship with our currency and our government where currency will no longer be about what we feel is valuable in terms of supply and demand. It will become valuable only and solely because of the state’s ability to punish its citizens for not coming in line. That takes away your independence and makes you extremely dependent on government.

It also weakens the human spirit. This is to balance out what happened. We had stimulus and people relied on stimulus checks. They got unemployment benefits, but if they hadn’t, what would they have learned in that process? That a huge opportunity cost there.

It’s funny, I was talking about this with some family members. There’s this idea that consumer prices look stable like a balloon, not inflating or deflating, stable prices. You got a hole that’s causing it to deflate. The technology is causing deflation and the velocity of money. I’ve talked a lot with Jim on the velocity of money issue when we had our talk, which is deflationary. You have a pump going into the balloon called the federal reserve with money creation that’s inflationary. The amount of inflationary pressure is in all time extreme. The amount of deflationary pressure is all time extreme. When I say all the time extreme, it’s the most money ever printed in the shortest amount of time and the lowest velocity of money we’ve seen since the ’60s.

Have these two extremes on the other side battling each other that makes it look like a stable price. If that hole gets a little bigger or that pump goes too far, you can pop it or deflate it back quick, it’s not as stable as people think it is. Learning how to deal with both, we have to be prepared for both the inflation and the deflation. There’s data that shows both of those exist, so prepare for both. It’s an arm wrestle. You don’t know who’s going to win, but they can arm wrestle in deadlock forever. One of them is going to push the other one over eventually because it’s all fake.

This is where hopefully, I wasn’t misunderstood when I was saying predicting environment or seeing what’s to come. It’s knowing that things are going to change and what causes those changes. It’s the ever-changing variable which is human nature, which is how we respond. People don’t know. You can assume, you can understand human behavior to a point where you can try to predict, but there’s always going to be new variables that people are always going to respond differently. It’s one of those understanding the different tenets of the environment in which you live, you operate your business, you invest, you were a professional and provide services to others, whether you’re an employee or own a business, it’s understand the environment, and then how you respond to it, and how to mitigate risk going into it.

You’re not betting on one outcome. You’re not betting on two outcomes. Maybe you have 3 or 4 ways in which you think things are going to pivot. You have backup plans and you can adequately preserve a couple of months without income, or you can preserve potentially your business and be more agile starting now. Hopefully, those are the lessons that people learned in 2020, so that when other events of similar magnitude happen, you’re in the position of responding quicker, and in order to improve your life, as opposed to how most people responded, which is either they let somebody else improve their life through their stimulus or extension of benefits or whatever temporarily or they relied on parents, neighbors or charity. There’s time and a place for all that stuff. At the same time, I don’t believe that creates the lesson that’s needed for somebody to grow. Hopefully those that had some pain grew from it, so that this next go around your muscles are stronger. You can do more pull-ups.

To get from where you are to where you want to be, you have to first identify where you want to be. Click To Tweet

I think we all have an education deficit where there’s a gap between what we know and what we’d like to know. There’s a degree of ignorance in all of us. What’s funny is the harder I pursue to close that deficit, the bigger the depths that becomes because you realize how much you don’t know. The more you study, the more you realize you don’t know. It’s almost like I chased to close the deficit it expands on me. That’s my thing for 2020 is people say, “I need a stock teacher.” I’m not a stock teacher. I’m a stock student, I’m trying to learn because my biggest fear is ignorance in this stuff. My biggest fear is not knowing stuff. You’re a lot better at it than I am. I think the time we spend studying guys like Jim and reading Stephanie Kelton’s stuff, whether we agree with or not, it helps you know what’s out there. The best way to prepare first is to learn, and then after you learn, you try to bring your behavior in line with what you’ve learned. That’s where you’re so good with your discipline. I couldn’t agree more. 

I would say from a financial standpoint, I went into 2020 super prepared and good. I learned a lot of those lessons, 2008, 2009 by not being prepared, but getting into 2021, what I was surprised by myself is that I wasn’t prepared emotionally. I wasn’t prepared psychologically. I had all sorts of environmental variables that I needed in order to be happy, to feel successful, to be fulfilled, to be excited. A lot of those went away and I had to step back and think about the life I’m living, what I want, what I want for my family, and how I could essentially make an impact on others, which I believe that sense of contribution is built into us where we want to make a difference. It was several months lesson for me. I don’t know if I would have learned. Now I look at my experience with my kids where I don’t have to take them on vacation or go to this indoor skydiving. I have to do crazy things in order to enjoy them, enjoy their company, and be present with them.

It’s the same thing with Cynthia and same with friends and family. I don’t know if I would have got that lesson. It’s what allowed me to enjoy life more and not necessarily have attachments or things that have to happen in order to enjoy it. That’s another interesting thing that is going to happen in the future and partly, it’s accelerated by 2020 is people are figuring out how to be more efficient. Businesses are not going to go to the space they had before. People are not going to work the same way they worked before. They’re not going to go on vacation. They’re not going to entertain themselves the same way. Efficiency is a big thing and I think they’re realizing that they could be happier and be more successful fulfilled with less.

If you don’t know that’s coming, that enjoyment isn’t necessarily a function of having stuff or doing things, or achieving some professional level or money level, wealth level. It’s going to be another big lesson for people where the sustenance level could be zero or very minimal. Now people are going to find themselves saying, “I may only have to work ten hours a week.” A lot of people attach their meaning in life to their work and what they do on a daily basis. That is going to shift at a pretty rapid pace over the next decade. I’m not sure if people are prepared for that.

The simplification is an interesting thing. I had a friend of mine who spent a lot of time in the NBA as a basketball player. They’re pretty well paid. His nest egg is okay. He’s fine. He had a bigger house and he sold his house. He moved to a rural state and started a farm, and he’s ordered chickens and pigs. I’m like, “What do you know about that?” He goes, “I’m going to read about it.” His focus is simplification and narrowing down. It’s going to be fun to watch him because his happiness level is about health and family, and being closer to the land.

You’re right, I had the best year with my family I’ve ever had. It was awesome that way. I was frustrated though. I was scared for myself. I’m not a brave guy. I’d hate to come off that way. I wasn’t scared. I was bothered by my inability to help anybody. I saw people that were scared. I saw people are hurting, and other than teaching them how to trade through it, that was all I had to offer. I realize most people don’t even trade. Most people don’t have an interest in their 401k. Here I saw all these people getting annihilated in their markets and I was powerless to help. That was a good experience to look back on and say, “If this happens again, am I going to be able to help people, or am I going to be helpless to help them?”

TWS 76 | The New Great Depression

The New Great Depression: Modern monetary theory takes away your independence and makes you extremely dependent on the government.


It’s one of those where you can help by giving a person money or the homeless, or you can help by donating to charity. You can help by supporting your favorite restaurant that was impacted by not having enough patronage. At the same time, it’s in your core competency. I read an article and Rickards is the one that spoke to this and turned me on to it. It hurts when one of the companies went bankrupt, and you had so much money go into that company at the bottom, even though they had filed bankruptcy. They had stock in bankruptcy and it totally screwed them. That’s the thing is how much wealth, how much money do people lose during that? It could have been prevented had they understood capital stack, the process of bankruptcy, and what they were doing, and why there wouldn’t be liquidity if they were able to come out of that.

There’s a lot of that to come. Nordstrom is in trouble because of the amount of money they borrowed to stay afloat. When you get into borrowing money to stay afloat, that’s not a sustainable business model, to continue to borrow, to continue to need stimulus. Neiman Marcus and there are so many retailers that couldn’t make it. Meanwhile, Amazon continues to be a behemoth that is unimaginable. Another one that’s interesting is Tesla, the PE on Tesla is $1,600.

That’s a big one in itself for the uninitiated. A PE is simply how much money you pay to get $1 out of a box that makes dollars. Picture Tesla as a box that makes dollars. When $1 comes out, how much did you pay in price to get that dollar? $1,600. You either believe you’re going to live for 1,600 years, get the money back, or you believe they’re going to have 1600% growth, which could happen. You could grow a company by 1,600. If you took Tesla’s PE and superimpose that on GM’s stock price. I don’t know how many thousands of dollars GM would be going for right now.

My point in saying that was what you were able to do, where it’s education. It’s like people want to take advantage of the volatility in the market and what’s happening with companies as they’re restructuring. They’re always looking for opportunity. At the same time, novices get her pigs get slaughtered. It happened quite a bit. Education is the key if you want to participate in that arena, especially in an arena as complex as options. That’s a big piece of what’s pushing market’s so high. It’s the amount of leverage that’s out there in derivatives.

Tell us a little bit about your business. We’ve talked about 2020, but 2021, what’s on your list? Where’s your focus? When you think of 2021 and what you’re going to get done or positions up to do, what’s on that list?

It’s all business at this point. What I focused on 2020 and still focusing on are two things. Number one, I realized that there’s so much efficiency in my business. Number two, I realized that people weren’t necessarily the solution to all of the inefficiencies. That’s where I adopted this slogan of, “Systematize the predictable so you can humanize the exceptional.” Where I looked at what makes the world go round from a human relationship standpoint is human connection, human relationship. That’s what is exceptional. There are a lot of technology and systems that are behind the surface that can make it so that there’s more of that. That’s where my big focus has been. It’s to take my technology game to a higher level. From a process standpoint, it’s pretty good, but we’re developing some technology right now that will essentially create better experience, more efficiency, and make things simpler.

Going back to a message to those that are listening to this. I’m not the only one, I’m not smart by any means. Companies are out there doing the exact same thing, but at a way bigger scale. That’s where the disjointment of resources is. Task oriented jobs are going to be a thing of the past. I believe that the skillset that is going to create infinite possibilities is the ability to connect with people, to speak to market, to write, to do things that invigorate the human spirit. You may think it’s even maybe a job that’s meaningless at a grocery store. There’s still so much value.

You go to a restaurant over and over again mostly because of the experience you have with people, not necessarily the food. If you think about it, that is going to be the commodity. The commodity of all commodities is the ability to connect and speak to people, to communicate a message, to sell to market. Those are skillsets that are humanizing the exceptional. A lot of my focus is to integrate a lot of the technologies that are out there that can make essentially what we do.

It’s ironic, technology to humanize. Technology should serve the human. That’s what it’s for and should do.

What are you working on?

I’ve been with the Donohoe’s more often in 2020, 2021. I don’t think Hawaii is going to happen yet for us. That trip with Hawaii with your family was insane. I want to do some more of that. I don’t want to live more, and a lot of personal goals that I have. I thought 2020 was a wake-up call for my health because I thought I can’t be heavier, and prediabetic and all this. That was a big one. A lot of personal things. From a business standpoint, the word I would describe my goals is selective growth. To be a little bit pickier about which type of student we will welcome, and yet grow in terms of language platforms. We serve the U S pretty well, but there are many people globally that we don’t serve, and technology can help us with the language barriers. We’re going to be more selective. Some people that are not fun to teach and not ready to teach, and not in the right mindset to teach. Temperament is a big deal to me and we have better students if they have a good temperament. We’re going to be more selective but yet still grow.

There are two sides to relationship. You got to have both sides in order for something to grow. Maybe we can end with something like this. You taught me something a couple of years ago that I had heard before. It’s a great common statement. Maybe you can break it open or unpack it for me. In order to get from where you are to where you want to be, number one, you have to identify where you want to be. That has to be defined. The gap that stands in the way is information or it’s motivation. There’s all the information for a person to do amazing things in life. It’s free and it’s there, but it comes down to the motivation to do it.

TWS 76 | The New Great Depression

The New Great Depression: Systematize the predictable so you can humanize the exceptional.


Sometimes that’s built in. Sometimes it’s coached. Human behavior is so baked into who we are, our habits, the way we operate. It doesn’t change overnight. That’s something that’s profound when it comes to hiring employees, when it comes to bringing on clients, bringing on partners, bringing on contract groups. Those that help you do certain things. There are habits built into that are easily identifiable if you know what you’re looking for. In the end, that motivation, that mentality, that drive which creates that human connection dynamic, whether it’s business-wise, friendships, business-client relationships. It makes a huge difference because if it’s not there, the cost is not worth it. It’s way too extreme.

It always seems to come down to some personal development, and keep on evolving and developing every single year, learning from what the history was and putting in the next.

We’ll end with that. This is Jim’s book. I didn’t have it when I interviewed him. He talks about the environment being in the new Great Depression, but he had some optimistic things to say. In the end, that’s the environment that doesn’t have to be your life.

Thank you so much, Patrick.

Same with you, Andy. Thank you for your time.

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About Andy Tanner

TWS 76 | The New Great Depression

With a long time passion for Teaching, Investing, Entrepreneurship, and Self Development, Andy has devoted his career to training and inspiring motivated people all over the world.

Andy’s passion for helping investors and entrepreneurs shows through in everything he does: The Cash Flow Academy Show podcast, regular investing update videos and commentary, interviews with top experts, and focused training programs. The goal with The Cash Flow Academy is to make everything fun, simple, and real.



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One Man’s Journey of Discovering Himself and the Fragile Nature of The World Economy

Tom Dyson was the co-founder of the Palm Beach Research Group with Mark Ford – which became one of the most successful financial publications.
You can follow Tom on Instagram HoboFamily and his new newsletter ‘Postcards from the Fringe.’
In this episode, you’re going to listen to Tom’s story of divorce and business failure to traveling the world with his three young children and ex-wife. Before leaving, Tom sold all of his assets and possessions and bought physical gold.
Tom’s transformational story re-invigorated his passion for writing about finance, investing, and economics. His refined perspective is almost prophetic, given the current state of the world.

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About Tom Dyson

Tom Dyson is the editor of Postcards from the Fringe. He’s a former London banker and money manager. He’s currently traveling around the world with his ex-wife, three kids, and a suitcase.


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Investing: The 2020 Kickoff

TWS 1 | 2020 Kickoff


It’s a new year, and just like the numbers 2020, it’s time for another topic to see things clearer in The Wealth Standard podcast. In this first episode of a new season, Patrick Donohoe invites us to look forward to deep diving in investing. He outlines the season for us, giving a background on why he chose the topic and the structures of the episodes to come. As with Patrick’s mission throughout the past seasons, we’re all just after more freedom that will allow us to improve our satisfaction and meaning about experiencing life. He brings that into a whole new angle with investing. Tune in and get excited about the great and awesome learning ahead this 2020!

Watch the episode here:

Listen to the podcast here:

Investing: The 2020 Kickoff

This is the first episode of our new season where we’re going to be talking about investing. I’m excited to outline the season, why I chose the topic, the structure of the episodes, what I have going on, which is going to be perfect for this specific topic. Also, the topic aligns well as a capstone in a sense of our previous five seasons. This kickoff episode will be relatively short and I’m excited to have the guests I have on. I’ve already done a few episodes. The conversations and the topics that I’m thinking through are going to be awesome. I can’t wait to learn right alongside you.

First off, let me take care of a few things. Thank you for your support for the 2019 season, specifically the support in the second season on entrepreneurship. That was a long season. There were many different episodes in there, a lot of different topics and tons of information. I want to make sure that you knew that the invitation to the Tony Robbins Unleash the Power Within event is still open. You can still register. If you go to, Jeffery’s information is in there. He is the representative that I work with at the Tony Robbins organization. There’s a steep discount for all of the tickets. It’s going to be amazing. It’s in Northern California in March. For dates, information, get ahold of Jeffrey. It’s going to be an amazing event. I’m excited to meet you there. Those of you who have signed up. It’s an event that is powerful and it works well to what I’ve been talking about over the last couple of seasons. You are going to see some more language and topics. I can’t wait for that and we’ll definitely have a report from the event from my office as well as the audience.

Let me make sure you are tuned into how to download new episodes. If you’re new, you can subscribe to your app and it will auto-update the episodes, so make sure you do that. We also have a YouTube channel. Almost all, if not all of the episodes are videos. Go to our YouTube channel. Subscribe to the YouTube channel as well. It’s a great way to be notified of new episodes. Also our email list, we’re going to be a lot more proactive with our email and engage a lot more with you because I’d like this to be not just me speaking to you and conveying information as well as guests doing that, but vice versa. It’s you talking about your experiences with this theme, questions you have, comments you have and deals you’re working through. I’d love to have those questions and also your feedback so that we can talk about the things that are the most important to you.

You are your best asset. Click To Tweet

Another reason why I chose to talk about investment is because of some of the events that I’m attending. I’m going to a business mastery event. I’m also going to an investment summit with a group that I had joined and invested with. They are mostly doing a startup type of investment in the energy sector, but they have an investment summit every year in Southern California. I’m excited to talk through that. These are not investments that I usually make. In fact, I’ve never made these types of investments and I consider it very speculative. The investment in part made sense to me because of the group that I got to hang around with. Not only am I invested financially, but also from a time standpoint and from a network standpoint, it’s a great opportunity. I can’t wait to learn from that event and then report back to you. I’m going to the finance event that Tony Robbins puts on for his Platinum Partners. It’s my second year going. The previous one was in a Whistler. This one’s going to be in Sun Valley, Idaho.

If you are new and haven’t watched the video series that I did, I think there are 3 or 4 episodes, please check them out on our YouTube channel. I went through and gave an overview of what I was learning and what was being said. I’m going to do the same thing with the one this coming February in Sun Valley. There are going to be a lot of people there, a lot of networking. I’m hoping to not just do solo episodes, but have some surprise co-hosts with regards to these events. It’s going to be busy months for me, but I’m excited to keep giving you information, teaching you and sharing with you ways in which you can get closer to your financial independence.

TWS 1 | 2020 Kickoff

2020 Kickoff: What might be good and wise and prudent investment for one person may not be that for another.


Why investment? I chose investment or investing and all the subcategories: investment strategy, investment theory, philosophy, as well as wealth strategy. Why investment plays a role or should play a role? What is an investment? How to make a wise investment? What’s wise and not wise? Why is it wise for one person and not for the other? There are a lot of topics in there, but the objective was to have this as a capstone to our previous seasons. For those of you that are new, in 2018, I went on this path of life, liberty and the pursuit of property, which is a very famous saying from the 1700 from a man named John Locke who inspired the Declaration of Independence, Thomas Jefferson, “Life, liberty and the pursuit of happiness,” which is what most people are familiar with. I chose this topic because of how intrigued I was based on what John Locke meant by the rights of life, liberty and property.

We spent a season on life and looked at life as you are as your best asset. Liberty, the second season I perceived that as what everyone is after when it comes to wealth strategy, financial strategy, which is financial independence and freedom. The property, which I consider resources, is the physical world around us. As the human being interacts with the physical world, amazing things happen. In 2019, we spent an entire season talking about capitalism, which is the infrastructure from a societal standpoint that best houses those rights and allows human beings to capitalize on those and pursue interests in the smoothest way possible.

As the human being interacts with the physical world, amazing things happen. Click To Tweet

A guest that I wanted on but wasn’t able to make it happen due to some illness and health issues on his part was Hernando De Soto, who wrote a book called The Mystery of Capital. It’s an amazing read into the nature of the system in which people interact and how the system itself, the foundation, and the infrastructure facilitates or inhibits progress and prosperity. I’ll probably speak a little bit more about that whole idea and I’m hoping to still get him on the show. Those were the seasons. The last season was entrepreneurship, which is essentially the individual and what they can do to improve themselves and subsequently improve their financial situation by understanding the structure in which they operate capitalism as well as the rights of life, liberty and property.

There have been some incredible stories about what readers have been able to understand with regard to ways in which they can improve themselves to make more money in their profession or maybe you switch professions or maybe switched companies. Also, from a wealth strategy standpoint, how could they start to make investments, make wise choices when it comes to where they put their money? We’re going to expand on a lot of that because investment, in theory, is the end result of all of this. When you invest, you hope to get more than what you put in. From a financial standpoint, that’s getting more money back then you put in. From an investment standpoint, not everybody qualifies to use that definition because a lot of people lose money, then the majority of time, you have individuals who don’t know what they’re doing.

When you invest, you hope to get more than what you put in. Click To Tweet

Whenever there is a gain, it’s not because of anything that they did or understand. It just happened. I put that right in line and parallel to gambling. It’s one of those things where investment and the evolution of our society is interesting because there could be tons of opportunities and options. At the same time, what might be good and wise and prudent investment for one person may not be that for another. We’re going to talk through that and use examples because we’re not just going to talk philosophically about investment. I’m going to have investment providers on here. People that have a business in which they take money from other people and give them a return and how their business operates in ways in which you can do due diligence.

I’m going to have a Securities attorney here, who has been around a lot of private investments. He’s seen the good, the bad and the ugly. As you can probably imagine, there’s a lot more ugly than there is good. I look at the different topics and hopefully, that is going to allow you to understand business and investment at a higher level. Most importantly, it’s the purpose of investment. I look at the deep-seated perspective that the United States has, especially Americans when it comes to what their end results of investing, wealth management, wealth strategy, which is our retirement. I talked extensively in my book about the nature of retirement and how flawed it is. It’s a very difficult thing to do.

TWS 1 | 2020 Kickoff

Heads I Win, Tails You Lose: A Financial Strategy to Reignite the American Dream

Planning and subsequently retiring is very difficult and risky as well. I look at the pursuit of financial independence, which we’re going to keep defining over and over again. It’s much easier and it can happen much sooner, and I believe it’s what people are after. I’m going to discuss that whole philosophy throughout the season. You look at most investment products and they support the theory that I’m talking about when it comes to retirement. If that’s what you subscribe to right then, there are tons of financial products out there that are designed for that end. If your pursuit is financial independence, financial freedom, then you have to look at how investments play into that different end result. We’re going to be talking about what financial independence is and expand on how to achieve that.

What are some of the criteria? It’s not the same for everybody because I believe financial independence is a mindset. Having certain things in place, whether it’s cashflow, working in a profession that’s meaningful and aligns with who you are and you’re continually growing and making a difference in other people’s lives. All those are components of it, but it’s going to be different for everyone based on where they’re at. We’ll get into that in much detail. I think 2020 is a pretty significant year. It’s the year of clarity and I’m hoping that you are starting out on a good footing.

My goal is to build upon the philosophical foundation that was established in 2018 and 2019. I believe that you, as an individual, are after ways in which you can improve your degree of independence. Money is a huge part of that. We’ve approached it philosophically. Now we’re going to get into the practical with regards to investment strategy. At the same time, I want you to step back a little bit and think through what I mentioned and hopefully take this into the next several episodes, which is what is the purpose of you making investment? What is the purpose of you working? What is the purpose of you continuing to want more? Where is that drive coming from? What’s the end result of it?

In the book that I wrote, Heads I Win, Tails You Lose: A Financial Strategy to Reignite the American Dream, I argue extensively that what we’re all after is more freedom and more independence. That is going to allow us to make decisions that are going to improve our degree of satisfaction and meaning with regards to life and our experience of it. I believe that you’re after that, I’m after that and I’m hoping that the dialogue, the discussions, the information that I go through with all of the guests as well as solo and with some surprise co-host, that reinforces what you want for yourself. I believe it’s possible. I’ve seen it many times. I realized that there are a lot of challenges that stand in the way of that.

Financial independence is a mindset. Click To Tweet

First and foremost, being the whole financial world is structured to help you retire. If you want to retire and you want to be financially independent, you have to rethink the investment choices and the financial products you’re using because it makes a huge difference. We’re going to get into a lot of that. I believe there’s no better time in history to gain clarity about your wealth strategy, your investments, your financial future. I believe the next years are going to be exciting because of everything that’s going on. There are many different innovations that are going to allow less work and more meaning. I also believe that with the Baby Boomer generation, the older generation, the amount of money that’s going to be transferring from one generation to another in the tens of trillions of dollars is going to shift how businesses operates.

It’s going to shift the demand for different goods and services. It’s going to shift where people are living and how they’re living. It’s going to shift employment. I believe that the disruption that’s going to happen is much needed. It’s an opportunity where you, as a good steward of your wealth, can take advantage of incredible opportunities to make money, start a business, join a force with another business, and to acquire another business. The sky’s the limit and I believe that what you want for yourself is possible. I’m going to focus on the information, the opportunities as well as answering the questions that you have working through some of the challenges you face in order for you to achieve those ends.

Thank you for reading this episode. It’s the introduction. It’s the kickoff. I’m excited to bring on the next couple of guests. In the first episode, our guest has been in the financial industry for a long time in a traditional sense. As you’ll see in the discussion, it shows you how inline people are. They are successful with some of the principles and things we’ve talked about in previous seasons. I had my good friend, Andy Tanner, on the second episode who brings an incredible perspective when it comes to money, financial freedom and financial education. From there, you’ll have to wait and see. Thanks for reading. I appreciate it. Thank you for your support. Make sure you bookmark the website, See you next time.

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Tony Robbins Unleash The Power Within
San Jose, CA
March 12-15, 2020
Special Event Pricing for Listeners of The Wealth Standard:
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Discounted price = $495
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Property As A Wealth Strategy with Paul Moore

TWS 7 | Property

Wealth isn’t simply a bank account balance or a dollar amount of monthly cashflow, rather, it’s a state of mind. John Locke, the philosopher whose words we used as the backbone of this season, argued that the law of nature obliged all human beings not to harm another in their inalienable pursuit of life, liberty and property. He lived at a different time period, the mid-1600s, yet the liberties he fought for would produce a similar mindset we are seeking when it comes to wealth. One of the keys to wealth is the principle of property. Paul Moore, managing director of Wellings Capital and host of the podcast How To Lose Money, talks about the importance of understanding knowledge, education, and experience, and how that relates to property.

Listen to the podcast here:

Property As A Wealth Strategy with Paul Moore

What is the key to wealth? Is there a magic bullet or a fast track? This year in the podcast, my focus has revolved around these questions. 2018 is almost over, as is season three where we are focusing on the principle of property, where are we? First, I chose the phrase, “Life, liberty and property,” because it’s a simple way to describe the foundational principles to achieve wealth. What I came to realize is that there is a natural human inclination to be wealthy. There always has been. There is an essential variable to consider when determining whether or not there is a key or a magic bullet. That variable is the definition of wealth. Ultimately, what I believe we are seeking is the combination of two mindsets, the state of mind that comes from being free and the feeling of certainty regarding your vision of the future.

Wealth isn’t simply a bank account balance or a dollar amount of monthly cashflow rather than a state of mind. Think about it. John Locke, the philosopher whose words we used as the backbone of this season, “No one ought to harm another in their inalienable pursuit of life, liberty and property,” lived in a time period, the mid-1600s, that’s impossible to fathom. Yet, the liberties he fought for would produce a similar mindset we are seeking when it comes to wealth. This mindset is available to all and is why I wrote the book and why I do this podcast. It’s so that you too can believe that it’s possible for you.

Season one, life. Do you consider yourself your most important asset and invest in ways to be more valuable to others? Season two, liberty. What are you pursuing? Independence and freedom or retirement? Season three, property. Does your wealth strategy, including your investments align with what you know or do you delegate that responsibility to someone else? My guest is the co-host of an insightfully charming podcast, How to Lose Money, which is one of the best ways to learn about business and financial strategy. Paul Moore is an experienced businessman, a real estate investor and the Managing Director of Wellings Capital. Let’s turn our brains on and get ready to learn.

TWS 7 | Property

The Perfect Investment: Create Enduring Wealth from the Historic Shift to Multifamily Housing

My guest is Paul Moore. Paul is the Managing Director of Wellings Capital. He’s also one of the hosts for the How to Lose Money Podcast. He is an acquaintance of mine and I can’t wait for this interview. Paul is also the author of The Perfect Investment. Paul, welcome to the show. Thanks for taking the time.

Patrick, it’s great to be here. Thanks.

I had a wonderful time in your podcast when I was invited to it. I had heard of it before, but the theme is amazing. It’s an incredible opportunity for you as a business person to learn from the failures of others through the theme of losing money. It’s pretty fascinating. I told the story on it that I’ve never told before and it was a great opportunity. I’d love to hear your background and how you got to the point you’re at right now with your real estate investment company as well as the podcast.

I wanted to be a parapsychologist in junior high. I’d seen the movie Ghostbusters at some point and it seemed like a good idea. I didn’t have any counsel. No one told me, “You’d probably be good at this or bad at that.” I found out there was no degree in that, especially not at the University of Utah or out in that area. I went and got a petroleum engineering degree, which sounded like fun drilling oil wells but I never used it. I went on and got an MBA. I went to Ford Motor Company for about five years. After that, I started my own company. We’re an HR outsourcing company, a staffing firm. About five years into it, it turned out that a lot of publicly traded companies were interested in gobbling up companies like ours.

When we sold our company after five years for almost $3 million, I thought, “We are smart.” I started investing and I thought, “I’m an investor now. I’m semi-retired at 34 and I’m an investor.” I found out that I wasn’t an investor at all and I wasn’t at all qualified to make the decisions I was making. I confused investing with gambling. I ended up losing a lot of the money I had made in that company, but I did get into real estate, which was a great move.

It’s much easier to avoid failure than it is to copy success. Click To Tweet

Losing money is one of the best investments you can make. We approach life knowing certain things and we try to go to school. We try to gain an education by reading books or listening to podcasts, but there’s nothing that’s a better education than losing and feeling a level of pain. From a human standpoint, it’s an indicator that something needs to change. You experienced that firsthand as do most successful investors. What was the early lesson that you had that woke you up to the fact that you weren’t necessarily the investor you thought you were?

I started losing money. I invested $100,000 with a guy who had this amazing foreign options trading thing. He was showing us how we could make 3% a month on our money. He was doing them. At least my paperwork said I was getting 3% a month. It’s $3,000 a month and it looked great on paper. Then I went down to visit him in Charlotte and I had this funny feeling. Something he said didn’t add up with what I had heard about him. I had this gut. I went to consider investing another $100,000 and I left there with a distinct impression, “I should not invest more with this guy.” I wish I had followed my gut and withdrawn the $110,000 or whatever I had in there but instead I didn’t.

About two months later, the FBI caught up with him. He still won’t tell me and the other 2,000 investors where he hid the $18 million offshore. He’s even faced with 153 years in the federal penitentiary. He still hasn’t told anybody where he hid the money and I’m not sure why. That was one of the many examples of things I invested in where I confused investing and speculating or gambling. I think investing is when your principal is almost completely safe, and you’ve got a chance to make a return. Gambling or speculating is when your principal is not at all safe and you’ve got a chance to make a return. I confused the two and found myself about $2.5 million in debt for those reasons and other reasons ten years after I sold my company in 2007. It was a tough time.

How did you piece it all together? I introduced you to the theme of this season’s podcast where we are combining the first two seasons, which talk about the importance of understanding knowledge, education, experience and how that relates to property. That combination is what creates an element of value. Looking at investments or property, you experienced investments that didn’t create value, they did the opposite. You have seen successful investments now, I’m assuming. What are some of the differentiating factors between the investments that lost money and the investments that gain money? We’ve talked about gambling versus investing. What are some of those variables that determine whether it’s a successful investment?

There was this guy on a TV commercial from the ’70s. He was a little whiny guy. He was sitting across the desk from this guy with his huge chair and he said, “Son, we only hire people with experience.” The kid turns around the camera and said, “How do I get the experience?” The experience of losing money and the experience of doing a lot of these things gave me a lot of the wherewithal I needed to make money now and to make smarter investments. Lack of due diligence was a big part of it. Trusting one other person’s word who was investing or who was paid to tell me to invest with them was helpful. This is the experience thing and the reason I told that little story is I was always surprised.

We put together a lot of successful real estate deals through the 2000s and beyond. I was always surprised when people say, “No, I don’t want to invest in that. I don’t know anything about it.” I’d say to myself at least, “You’ve got tens of millions of dollars, but you don’t want to invest $200,000 in this wireless internet project?” Warren Buffett said, “I invest in things I understand. I don’t invest in general on the internet because I don’t know where it will be in ten or twenty years. The internet will never change the way people chew gum.” When I stopped investing in things like the wireless internet or throwing money down to a bottom of an oil well or things that had a risk and things I didn’t know the outcome of, I began to do much better. The bottom line is I stopped swinging for the fences and I started trying to hit singles and doubles and that’s when everything changed.

Tell us about Wellings Capital. What are some of the projects? Who’s on the team? How do you determine who’s on the team? Tell us the story behind how you put that company together, which has resulted in some successful investment.

TWS 7 | Property

Property: The experience of losing money and doing a lot of things gave me a lot of the wherewithal I needed to make money and to make smarter investments.


Wellings Capital has three principals: Wade Myers, Dr. Brian Robbins and myself. Wade and I had been talking since 2007. He’s a Harvard MBA. He’s got a property management firm that has 220,000 doors under management. It’s not multifamily. It’s doing condos, HOA, POA type of work. He bought quite impressive companies. He’s had some big failures and big successes. He told me he never had any experience in real estate. He didn’t understand it. When I showed him a draft copy of my book, he read about four chapters and skimmed the rest and two hours later he said, “I want it. I want to invest.” We invited him to join our team because he’s got an incredible 55 different M&As and startups, acquisitions, plus some failures. He has invested a lot of money in Hollywood films. A big hit was I Can Only Imagine. The big money guys were behind that. He’s done well over the years and made a lot more money than he has lost.

My other partner, Dr. Brian Robbins, has been a serial entrepreneur as well as a pain management physician. I had asked him to invest with me in a multifamily project I built from the ground up in North Dakota and he said, “It’s too risky.” A Hyatt hotel that my friend built that I helped him with, “It’s too risky,” wireless internet, “It’s too risky,” something else, oil and gas, “It’s too risky.” When he heard about multifamily and I showed him the demographics that I think are going to make multifamily a great investment for decades to come, he was fairly stunned. He said, “This is something I can get behind,” then he jumped in with both feet.

What year was that when he joined up?

That was in 2013.

What’s your take in the multifamily space now? I’ve observed, and I have a personal investment in several multifamily projects in various states. I look at what the market has done even in the last four years and how much money has come into it, how much syndication is being done to either do a ground up or acquire and remodel and value-add play. I see more and more as weeks go on. How are you looking at the multifamily space these days? What are some of the conclusions you’ve come to?

First of all, we’ve concluded at the title of my book. It’s The Perfect Investment because it does a great job balancing risk and return. The Sharpe ratio measures return divided by risk for a whole lot of different asset classes. Multifamily and self-storage are at the very top of the list. They’re performing about 460% better than the Dow Jones and the S&P 500 in the return divided by the risk because the beta, the up and down of multifamily is much more stable. It’s much more predictable. Freddie Mac and Fannie Mae, according to a report I read, haven’t had a single foreclosure in multifamily in three or four years. Where else can you get something like that? We’re talking about nationwide. That does speak to the great underwriting and the conservative underwriting that they do.

Multifamily has got a lot of big things going forward. Number one, in 1995, the government tampered with the housing market and they thought that anybody who could fog a mirror should be able to get a loan. Homeownership skyrocketed from its historical low 60s to 69.2%. In 2005, I had a friend who was making $40,000 or $50,000 a year who bought a $600,000 mansion as his second home. He had no business doing it, no way of paying the mortgage. It was before Airbnb. I don’t know what he was thinking. He lost that back to the bank in a matter of months. That was happening all over the US homeownership. When things plummeted from 69% to about 63% from 2005 to 2015 and every percent dropped meant a million new renters.

Fall in love with the numbers. Don't fall in love with the property. Try to be as objective as you can. Click To Tweet

There were all kinds of other renters coming into the renter pool as well. Number one, Baby Boomers, the smallest group of renters are the fastest growing group. The statistics say that when a Baby Boomer starts renting, they’ll never purchase a home again on average. The second group is Millennials. That’s the largest demographic group in US history with about 80 million strong. In general, they don’t see the reason to be tied down to a 30-year contract on a seemingly overpriced home when they might have new friends, new opportunities, new jobs in another part of the city, the state or the country next year. They’re much more transient and they have much more debt as well. They’re on the position with the slightly more difficult qualifications than 2005 house standards to qualify for a mortgage. They’re not quite there. Even though Millennials are starting to get married, starting to move into homes, on average, they rent far more and for far longer than Baby Boomers historically. Third, we’ve got immigration. Immigration is still playing a very significant and increasing role in the US demographic picture. Immigrants rent more often and for longer than people born in the US. I think we can look out for many years and say that this is a great investment.

In my book, I called it the perfect investment because it seemed to balance. It was a property, which is a big thing. You own a hard asset. You get all the tax benefits. There are twelve significant tax benefits you get from owning real estate directly and you get this fairly stable, fairly predictable, single or double typically. Although a lot of multifamily syndicators have been hitting homeruns for a long time. I see that coming to a place where maybe they won’t happen anymore. I’m even wondering how people are affording and why are people even investing in multifamily right now because the perfect investment is no longer perfect if you can’t find a deal that makes sense.

That’s where I was going to go because what I talked about on your show was the product could make all the sense in the world. There could be the right cap rates, there could be the right market. It doesn’t mean the investment is going to be successful or the apartment complex is going to be successful. My first question is going to be around not necessarily the market or the metrics that you do due diligence on, but how do you know you’re working with the right person? Then the second thing is there were a lot of apartment investors back in 2007 and 2008. I know in the single-family market why people were leaving their homes.

Another tangent that’s interesting and this came from the chief economist at Fannie Mae where people during 2008, 2009 weren’t even in default about leaving their homes. Fannie Mae went into bankruptcy or was taken into receivership. Because of that, people thought that they had to leave their house. That’s another side issue. My underlying question is what constitutes a good investment, not necessarily from the return, cap and market standpoint, but the operator’s standpoint? Talk to us about how important that team is.

We think that the right property manager and the right market make up about two-thirds of the likelihood of success in buying a multifamily asset. It’s incredibly important to have a market that’s large enough to support multiple significant national or regional property managers. If you might have one that goes South, and we’ve had that happen, you want to have other options. That’s one thing, the property manager. Going back to more of the philosophical level, it’s incredibly important. In our design, we have a built-in gut check thing, like the guy who invested $100,000 within Charlotte years ago. It’s incredibly important to follow your gut. I don’t know about you. I know you’re married. If you’re like me, your wife might have better instincts in some ways than you. She may not know anything about business and my wife doesn’t, but she can somehow spot a phony or a fraud and say, “I don’t know why.” I go, “I want reasons.” She goes, “I just don’t think you should invest with them.” We need to learn to listen to our gut and sometimes it sounds like the voice of our wives.

TWS 7 | Property

Property: Our brain at a very deep level allows us to be able to see things in a deeper and a more sensible way than we do.


Have you done that with your wife, had her do gut checks with the people that you’re doing business with?

Yes. I ignored her many times. Those were some of the things I lost money on. The wireless internet company in North Dakota, several of us started that company. She was like, “I don’t think that’s going to work.” I said, “It’s got to work. Let me show you.” I thought we were going to make a huge profit in the third month and here we are seven years into it, shutting it down. There are other times I have listened and now I eagerly seek her out. Even if she doesn’t meet the people in person, I lay it all out for her and I try to get her feedback. Now that she knows I listen, she’s way more likely to try to take a deep breath, be reasonable and not let fear drive for what she had some in the past. That’s why I was able to discount her advice. I said, “That’s just fear. I’m not listening.” That was not a great thing. She didn’t go with me on that trip to Charlotte but she if she had, I know she would have seen through that guy.

I’ve had my wife be part of business discussions and retreats and off sites but as far as bringing on key people, I’ve never had her involved. That’s an incredible idea. It depends on your spouse and their knowledge of people in business investment and so forth. I would definitely agree that she’s one to understand body language and understand the tonality at a level that is almost instinctive.

There are 3,000 signals we send off between tone, eyebrows and body language and all this stuff. We don’t consciously know what those things are, but our brain at a very deep level can make 40 quadrillion calculations per second. Our brain at a very deep level is involved with some quantum physics that I don’t understand. It allows us, and especially our wives in general, to be able to see things in a deeper and a more sensible way than we do. I’ve found that over the years, I’ve often shut that part of me off because on paper it looked like such a good profit and the wireless internet was a perfect example. It was a lot of greed on my part and it was one of the worst investments I ever made of time and money.

The balance of human emotions. That’s a game we’ll always be playing. Maybe talk through some of the elements of your book because using the word perfect could be a slippery slope in a sense. Talk to us about how and why you chose that word to define the core theme of the contents of the book.

One of my favorite internet marketers is Perry Marshall. We had him on as a guest on our How to Lose Money show. He has a book called The Ultimate Guide to Google AdWords so I named my book The Definitive Guide to Multifamily Housing. I thought it was great but everybody I talked to about it seemed indifferent or yawned. I had a friend who goes, “Multifamily, after skimming your book, it’s like the perfect investment. You should call it that.” That’s too big of a claim.

Age, wisdom, and counsel all goes into the mix of knowing when to cut your losses and get out and when it's time to start another business. Click To Tweet

I didn’t know much about self-storage at the time. I realized that I couldn’t think of any investment I’ve ever seen, and I was a couple of years into this that was a better investment with a better balance of risk and return. That’s why I had the audacity to name it that. It’s selling quite well. I just don’t know what to do with my next book because I might write a book on self-storage someday. A lot of people in BiggerPockets, which is the ultimate forum for real estate investors with a little over a million strong, a lot of people want to come in and they want a house hack. They want to be a single-family landlord. They want to build up a portfolio of 100 single-family homes and they don’t realize the incredible toll it takes emotionally and in every other way on you to do that.

I’ve seen one person after another who gets up to ten or twenty single-family rentals of whether they’re duplexes or mobile homes or whatever. They sell off the portfolio in frustration. They never make any money because there are so many hassles involved. My argument in the book is there’s a better way. There’s a better way than dealing with toilets, tenants and trash, and that is to invest with a great trustworthy syndicator. The book goes through all the different reasons. Multifamily is a great investment and then a lot of the demographics, a lot of the reasons Freddie Mac and Fannie Mae love it. Then how to find a great syndicator using that same test, that gut-level test. One of the great things toward the end is I talk about a couple of things. Number one, I talked about the various tax savings that commercial real estate provides, which are incredible. I talk about my big why which is my, “Why I’m doing this?” at the very end.

I look at the Trump tax cuts and a lot of the stuff that went through a lot. There are some big benefits to investors, especially in commercial.

A friend of mine showed me how you could take $20 million and turn it into $211 million and throw off $130 million in cashflow over twenty years. He said, “Where else can you get returns like this?” I was like, “That’s amazing.” He said, “If you play your cards right, this passive investor might pay virtually zero in taxes over those two decades.”

Your podcast is fascinating and some of the topics are fascinating. I’m going to definitely start listening because I had seen the best lessons in failure, especially when money is lost. As you have experienced, you’ve learned firsthand 100 ways that people are losing money. What are some of the primary lessons you’ve taken from that and applied to your businesses?

It’s great because it’s a weekly reminder of what not to do and that’s a key for this. I could tell you how we grew our company and sold it for $3 million in under five years in Detroit. That was great. That seemed smart and everything, but I couldn’t replicate that. If I heard that story, if you heard that story from me, it worked out well. The timing, the relationships, all these things, there’s no way to easily replicate that. The lessons I learned from that and the lessons I could teach from that, were pretty small. If I hear all these guests and if they hear me talking about how I lost $500,000 or how one guest lost $70 million, I can say, “I’m not going to do that.”

TWS 7 | Property

Property: Making a good investment comes down to not just investing because of an idea, but investing in the people that are actually supporting and running it.


Failure is much easier to avoid than success is to copy I think. People like Tony Robbins might say, “No. I can show you how to get successful.” I agree that’s a point as well. For me, it’s been easier to replicate not failing than it is succeeding. One lesson we’ve learned is lack of due diligence, jumping in quickly and falling in love with the property. A lot of our investors, a lot of our How to Lose Money guests are real estate investors. For some reason, a lot of them seem to lose a lot of money in 2007, 2008 and 2009. That’s when I was $2.5 million in debt. Thankfully, that was all tied to real estate, so I was debt-free thirteen months later right in the middle of the recession. Speculating versus investing has been another big lesson. Picking things for wrong reasons, like saying, “I like the Buffalo Bills. I want to invest in Buffalo.” Not that Buffalo is a bad market, I just picked that out of the air but you get the point. It’s easy to do things like that or it’s easy to justify things. It’s easy to fall in love with the property. Donald Trump when he was about 30 or 40, I heard an interview with him. The only thing I remember about it was he said, “Don’t fall in love. It’s so easy to fall in love with the property and then use every argument after that to justify why that’s a great purchase.” We all do this with cars. We do it with future spouses. We do it with investments, “It’s got a leaky basement, but the kids need a wading pool. Right, honey?” It’s maddening in all the way we justify what we want to do. My thing on that will be fall in love with the numbers. Don’t fall in love with the property. Try to be as objective as you can.

Another piece of advice would be to get great counsel. I know you spend a lot of money every year on coaching and masterminds and all that and I am starting to dive back into that as well. We’ve got a mentor. We paid $25,000 one time for this mentor and they’d been worth their weight in gold. That’s in the multifamily space and I recommend them to people all the time. We still use them four or five years later for questions. Another harder to quantify thing would be what you do with the lessons you’ve learned. I can argue both sides of this. I’ve heard both of them on the podcast. You’ve got somebody who says, “You just paid all your tuition in this horrible loss. Are you going to quit and start some new business?” Ours was, “Are you going to start out as a freshman in another business, a freshman in college again? Or are you going to dive back in and take all you’ve learned since you’ve paid the tuition and go deep and use that lesson to expand on and succeed?” That’s one argument.

The other argument on the other side of the coin is you’ve got to know when to cut your losses and get out. I’ve heard guests passionately tell that story of why you’ve lost enough and that with the wireless internet business. If we would have cut our losses four years ago and had just taken the $300,000 or $400,000 loss, then we would have been way better off than where we are now. That’s another argument but those don’t seem the same. Years, age, wisdom, counsel, all that goes into the mix and we’ve got to know when to do the one and when it’s time to do the other. Those were some of the main lessons we’ve learned from our How to Lose Money guests.

We’re in this information sharing world and oftentimes information has a candy wrapper on top of it. I thought it was refreshing to see the theme of your podcast. It was a pleasure to be on there because that’s when things get real and that’s where the true education is not by the shiny objects on the surface, but what went on to create them in the first place. There are so many points you’ve made throughout this interview that I would echo. In the end, financial tools, whether it’s real estate. Whether it’s a stock, a business, some startup or venture, it’s one of those things where the less you understand, the less involvement and value you can bring to the table the more risk you have.

As it pertains to real estate, it’s a fundamental need that we have and it’s always going to exist. It’s not necessarily just investing because of that idea, but it comes down to investing in the people that are supporting and running it. It is where I’ve seen the majority of issues. It’s not just your failure to learn from but one of the criteria I have is I won’t ever put money with people that I’ve earned who have not failed. It’s understanding what happened, what they learned from it and what they did in those moments of failure. Oftentimes it’s not even what they say but what those who were involved as an investor said during those times.

That’s what tells the story about things not going as planned, which tends to be the case with humanity. You want to know what their principles are, what their mission is and what drives them. Also what values they have so that you can get a barometer as to what decision they’re going to make and how it will affect the money you’ve given them and invested with. In your book, you talked about real estate. You talked through certain details of your story. One thing you said in there was where you talked about your purpose, the purpose of that company, your why with what you’re doing.

Real estate is a fundamental need that we have so it's always going to exist. Click To Tweet

I don’t know how much you’ve heard about human trafficking, but people are starting to hear about it thankfully now.

The Operation Underground is here in Utah, the big one that Tony Robbins sponsors. There are tons of money in there. The ex-Special Forces guys.

If you took the total record profits from General Motors, Nike, Apple and Starbucks and combine those, double that number, and that’s less than what is believed to be the annual revenues from human trafficking worldwide. It’s a big deal. They say there are over 30 million people trafficked and a lot of those people are sex trafficked. I want to believe that if I was alive years ago, pre-civil war, that I would have been fighting for abolition. I’d be fighting to free slaves. If I would have been an adult in the 1960s, I want to believe that I’d be fighting for civil rights. We’ve got an emergency here that doesn’t get headlines and it’s not caused a civil war. It’s not causing marches on Washington, but it’s slavery and it’s a big deal.

My company Wellings Capital and I are dedicating ourselves to donating a significant portion of our profits to fighting human trafficking and rescuing its victims. We’re identifying organizations we can back and we’re already doing that. I’m also part of a group called Our goal is to build a billion-dollar office complex in Dallas, to use that as a prototype and then build other office complexes around the country and say, “We’re giving 100% of our syndicator, of our internal profits to fight human trafficking.” That’s in the works and we’re excited about that. There’s nothing to do with that now except maybe visit the website, but I’m excited about that. My goal is to donate $1 billion to fight human trafficking and rescue its victims through my influence and personally over the next years.

Can you give out those website addresses again and if there are other new sources, feeds or groups that are out there that people can learn more about the human trafficking problem?

One I would go to is They’re based near Kansas City. They’ve got an incredible gut-wrenching movie out called Nefarious. If anybody wants to get ahold of me, I’ll send you a copy of the film. I’m friends with the director. He’s got 800 hours of film footage and he’s making a lot of films. He’s made other ones since then but Nefarious is the one that had opened my eyes. We also have We’re looking for a CEO to run that company. Then my company is Wellings Capital. We’re at

I knew it was a problem and you travel around and in airports there are signs everywhere to keep your eyes open and pay attention. From the numbers side of things, I didn’t know it was that big.

We talked about Apple, Starbucks, Nike and GM times two. Let’s go down to small. One preteen or teenage girl can generate up to $500,000 a year in revenue for her trafficker, for her slave owner. Think about that. Think about what that means to that girl.

I didn’t know it was this prevalent and this big. Thank you so much for sharing that and at a minimum, helping me be more aware of it. Thank you for what you’re doing by dedicating some of your profits to that cause. What are some of the groups that are getting together and what type of impact are they having? Is it slowing down or is it going to take a while to eradicate as it seemed like a social epidemic?

There are some great groups. There’s one well-known group that’s rescuing girls in places like the Philippines, but the reports I have are that 99% of those girls are going back to prostitution later. It’s a tough situation and now it’s becoming more prevalent. There are more ways to kidnap these girls and social awareness in airports and all over the place is going up. However, the problem I think is probably getting a little worse.

Where’s the concentration in the world? Is it international or is it the US?

It’s both. There are some statistics that say one out of every 500 girls will be trafficked. I don’t necessarily believe that because I know of people of the places I’ve visited, but I don’t know anybody in my personal sphere or anybody that I’ve ever heard of personally be trafficked, in the news but not myself. I think it’s probably more prevalent in other countries. This documentary, Nefarious, goes over some of that.

The Operation Underground Railroad, which is out of Utah, they have a documentary out as well. Hopefully, the awareness continues to rise. I didn’t want to end on that sad of a note but still inspiring that you are trying to do your part to make a difference. Thank you for that.

Thanks. I’m glad you asked about it. We all have a part to play in this. They asked Mother Teresa how to feed a billion starving kids and she said, “One mouth at a time.” We are making a difference and good will prevail. I’m sure of that.

Paul, we appreciate your time and thanks for joining us.

It’s been great. It’s been an honor to be on your show. Thank you so much.

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About Paul Moore

TWS 7 | PropertyAn expert in the real estate space, Paul Moore of Wellings Capital graduated with an MBA from Ohio State and entered the management development track at Ford Motor Company. After five years, he departed to start a staffing company with a partner. They sold it to a publicly traded firm five years later for $2.9 million.

Along the way, Paul was Finalist for Ernst & Young’s Michigan Entrepreneur of the Year two years straight (1996 & 1997). Paul later entered the real estate sector, where he flipped over 50 homes and 25 high-end waterfront lots, appeared on HGTV’s House Hunters, rehabbed and managed rental properties, built a number of new homes, developed a subdivision, and started two successful online real estate marketing firms.

Three successful developments, including assisting with the development of a Hyatt hotel and a very successful multifamily project, led him into the commercial multifamily arena. Paul is the author of The Perfect Investment – Create Enduring Wealth from the Historic Shift to Multifamily Housing. Paul also co-hosts a wealth-building podcast called How to Lose Money, is a featured guest on numerous real estate podcasts, and is a regular author for Bigger Pockets. Paul is married with four children and lives in Central Virginia.

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Patrick Talks “Multi-Family” Real Estate With Michael Blank / Property, Episode -4

Patrick Donohoe welcomes Micheal Blank as his special guest for Property, Episode-4!

Michael is an entrepreneur, investor and personal development coach.  Originally, Michael made a large amount of money developing software during the dot com boom, and after diversifying is career, he found a passion for investing in multi-family properties.  His company Nighthawk Equity currently controls over $65 million in performing multi-family assets all over the United States and he dedicates tons of his time helping others become financially free in 3 to 5 years by investing in apartments buildings with a special focus on raising money.