Uncertainty

Mathematical Truths: On The Constants In A Non-Constant World With Todd Langford

TWS 12 Part 3 | Mathematical Truths

 

We have reached an age where we reward people for their deep specialization of knowledge. Now, we have experts who have become multi-millionaires from leveraging what they know best. The downside is how, by being someone whose opinions and insights are held at a pedestal, it can be so easy to lose other people’s trust when you admit you’re wrong. Patrick Donohoe explores this topic by bringing back his conversation with Todd Langford, the CEO of Numbers Analytic, Inc. Here, they unpack the idea of the role of mathematical truths and what it informs us of the constants in a non-constant world. Dive deep into this brief but insightful conversation on individual specialization and how the uncertainties of the future impact what we do. 

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Mathematical Truths: On The Constants In A Non-Constant World With Todd Langford 

Humanity and life are messy. Every morning, we wake up to this individual awareness of what’s going on that no one else has. Our self-awareness recognizes our vast imperfections, our past and present mistakes and shortcomings, and our taxing insecurities if we’re being honest. We then venture out into a world of billions of other people who are in the same situation, and then hypocritically judge and discriminate against those who manifest imperfections or differences. Likewise, we envy and scorn those who live up to society’s lofty expectations or at least hide them well. As I said, humanity and life are messy. 

We’re fortunate to live in a world where we don’t have to think that much anymore. It’s a world that no longer rewards generalized knowledge such as the breadwinner of a family knowing how to till the land, break a horse, hunt, skin animals for food, defend against predators, build a house, patch a roof or build furniture. Nowadays, the demand and the rewards go to those with deep specialization of knowledge. Specialization has led to multi-millionaire status by learning how to entertain viewers by opening toys or gifts on YouTube and maybe winning professional video game competitions. Deep specialized knowledge spreads across a wide range of subjects way too numerous to list here but I hope you get my point. 

The math is absolute, but the assumptions that are applied to the formula are not.  Click To Tweet

My purpose here is to identify that with increased individual specialization comes even more trust in the specialization of others. The paradox is that trusted sources might do more to protect pre-existing trust than to deepen their knowledge. More often than not, deepening knowledge requires admitting or at least being willing to admit that you may be at fault. You may be wrong. When you admit you’re wrong, you lose trust. I hope you enjoy this episode’s The Truth About Money segment with Todd Langford. 

That’s when the development of knowledge is in red. It’s in the experience of testing and proving in the real world. That’s where we’ll go next which is this balance between math, factual truths of the equations and how they apply to a non-constant world that’s ever-evolving. Adding a layer to that is as human beings, we all have these limitations. We have to have sleep, eat food and drink water. We can’t just operate at full levelten awareness and capacity for very long. We’re constantly seeking ways to conserve energy. 

When you accept the truth, it’s almost as if you’re now able to conserve future energy because you don’t have to figure something out anymore. This puts things in a dangerous place. Especially the professional context not only has this belief established, but it also puts this layer or force field around it where that force field is built on, “If I’m wrong, I’m no longer a professional.” You look at the different truths that have been subscribed to. You have some of those simple ones whether it’s lightning, thunder, storm, fire or drought. It’s the wrath of God. That was the original explanation of how things operate. Science and math then came along and you’re able to disprove those things. 

It didn’t go well for the Copernicus of the world. The other discoverers of these mathematical factual truths, many of them went to jail or were killed. You don’t necessarily have those consequences now. At the same time, you have people that are stuck in the adoption of belief systems passed on by someone who is a professional or their culture or some other way. It wasn’t necessarily the experience of the factual mathematical truths behind it. Maybe unpack that idea of what’s the role of mathematical truths and constants in a non-constant world. 

You talked about people being jailed for the truth. Maybe it’s not as drastic but in a lot of ways, it’s probably as devastating to them when they shut their mind out because they hear the word professional. They turn their mind over to this other person without ever checking anything that’s been said, without even passing that through common logic to say, “This fits or this doesn’t fit.” There are some real dangers there but the math behind it is absolute. This idea of relative math, that’s not true. There are relative events in nature. There are changes in the components of the mathematics that might be wrong but the math itself is correct. Two plus two is always going to be four. That’s just the way it is. It may be that it shouldn’t be two plus two, maybe it should be one plus three. Maybe it should be some other number in the assumptions that are put in the wrong. 

Think about Christopher Columbus. What happened in his timeframe was four ships went out and none of them came back. Mathematically, zero minus four means we lost four ships. The analysis at the time was they fell off the side of the earth because the earth is flat. The math was right but the analysis of what happened to the four ships was incorrect. You’ve got Christopher Columbus that does some math work, looking at the skies, looking at different things and figuring out, “The Earth is round.” I believe in those pieces but the only way he could find out was by proving it. 

Even though the math was right, it might not come out that way. He had to send ships out to go find out if it was true. Prior to that, the fact that four ships didn’t come back could mean a lot of things. They went down in a storm or it could even be that they found a place that was a lot nicer than where they were and they didn’t want to go tell anybody else because they were afraid their place wouldn’t be as nice anymore. Who knows what happened to those four ships? We know now that they didn’t fall off the side of the earth. Something else clearly happened. 

Over time, that happens. When we learn mathematics in grade school, everything is one-dimensional or maybe two-dimensional from the standpoint of two plus two is going to be four. Everything is considered constant. One of the differences we get into is when we get into more advanced math. Even financial math is more advanced math because it adds a dimension and it’s the dimension of time. That’s a big one that gets left out often. When we add that dimension of time, it changes the formula. It doesn’t mean the math is right or wrong. Pure mathematics is still the same. It’s just that now, we have different components in there. 

One of the unfortunate things that skew the math when we add the element of time is we have to add other assumptions that are not constant or not guaranteed to be in a certain area. For instance, we’re going to look out 30 years into the future. If 30 years is our time frame, that is absolute, but what happens over the 30 years? Interest rates, taxes and inflation fluctuate. We have all these assumptions now that we have to guess on and that makes the end result flexible. It makes it move around. It makes it not absolute. The math is absolute but the assumptions that are applied to the formula are not. 

There’s no way around that outside of using past experience. That’s a dangerous thing to some degree. If we use past experience for what’s going to happen in the future, it can be one of those traps that put us back to, “This is the way it’s always been done. This is the way the environment has always occurred in the past. Therefore, it’s going to occur that way into the future.” Some things act like that but with technology, we have no idea what the future looks like and that’s one of the big unknowns. 

Thirty ago, who would have thought that everybody walking around would have a cell phone in their pocket at all times? That they could not get more than 10 feet away from without being anxious and bothered? What kind of stuff is going to continue to the future along that same line? We have no idea what’s even going to be invented that we’re not going to be able to live without. The impacts of that both on inflation and on opportunity can’t be weighed. We can only guess. 

TWS 12 Part 3 | Mathematical Truths

Mathematical Truths: One of the unfortunate things that skew the math when we add time is that we have to add other assumptions that are not constant or not guaranteed to be in a certain area.

 

You also have preferences. There are many different forces that will impact life and the purpose behind what you do financially. You’re right. You are basing your future on the assumptions now. It’s similar to how we look back on what people did 200 years ago with a completely different moral code, set of circumstances, concerns and environments. We assume that they should have every bit of knowledge, experience, and wherewithal that we have today. It’s not fair. It’s the same thing looking into the future. It is changing at a rapid pace, and yet there are some widely held constants that are used that are essentially hurting whatever the future experience is because they’re based on today. 

It’s similar to all planes have to create a flight plan. What’s the constant in the flight plan? It’s the starting place and the destination. What happens between the starting place and the destination? You have altitude changes, speed changes and pitch changes. There are all sorts of things happening. That’s why even though a pilot may fly the same route a million times, every single time he flies it, it’s a different environment. The idea is that there must be constant open-mindedness and an open door to what’s happening at the moment. Are the assumptions the same? Have they changed? If they’ve changed, what do I do about it? The requirement almost to stay in the course is to constantly be asking questions that challenge the previous assumptions. 

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About Todd Langford

TWS 12 Part 3 | Mathematical TruthsTodd Langford is the Founder & CEO of Truth Concepts, Partners 4 Prosperity, and Prosperity Economics Advisors.

 

 

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What Is Your Relationship With Risk? With Todd Langford

TWS 12 | Relationship With Risk

 

Tony Robbins once said, “The quality of your life is in direct proportion to the amount of uncertainty that you can comfortably live with.” However, none of us start out with a healthy relationship with risk. As humans we have fear around risk – a fear of failing, a fear of getting exposed, or a fear of finding yourself to be not good enough, you name it. But what exactly are we fearful about? Is that fear justified when you get down to the facts? Join in as Patrick Donohoe goes back to a segment of his interview with Todd Langford, where they get into the idea of risk, how to control it, how to influence it. As you listen through the segment, think about where you can take more calculated risks in your life, where you understand the stakes and what you stand to gain in the end.

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What Is Your Relationship With Risk? With Todd Langford

Our topic is risk. What is your relationship to risk like? Have you ever taken a risk and lost? Have you ever taken a risk and gained? Risk aligns well with the statement from Tony Robbins, that the quality of your life is in direct proportion to the amount of uncertainty that you can comfortably live with. At the same time, we have fear around risk. Todd and I get into the idea of risk, how to control it, how to influence it. You’ll enjoy this segment of the conversation. There’s a lot of risk being taken right now, risk with personal savings, within investments, business and monetary policy of our government in a very interesting time where we’re making these pretty big bets. I look at things we can control and influence. Those things are typically outside of ourselves. At the same time, I believe that when we understand our relationship with risk at a deeper level, then we can direct this risk energy in the right areas, not to take away from the relevance of cryptocurrency or blockchain technology, but taking a risk betting everything, a future and personal savings.

I believe that there is no control there. Not even much influence unless you’re Elon Musk and can put a $100 million into Bitcoin. The purpose of me bringing this up is I believe that you can take this risk energy and channel it toward the things that create a meaningful life. The things that Tony Robbins alluded to the quality of life, improving the quality of life, the meaningfulness of life. How do you redirect the risk? I look at, ultimately, the most important things people strive to achieve. It usually revolves around relationships, family and profession. My question to you and what I want you to think about through this conversation with Todd and me is where can you take more calculated risks where you understand the stakes and you also understand the gains? The gains are a multiple of the risk that you put on the table. It’s that whole idea of asymmetric risk reward. What can you do in your relationships? Can you apologize? That’s risky. Can you ask somebody out? Can you ask someone to marry you? Can you be open with a friend? Can you speak your mind, speak your truth? It’s risky, but is the reward worth the risk?

What about your profession? What about your business? What risks can you take that you can help more people where you can take that next step, where you can leave the comfort of a job that you despise, but it pays well. Go and do something on your own or work with a group whose values and mission align better with who you are and what you are about? Risks are misunderstood. Risk is a good thing. If you think about it, you can make it so that risk has no loss. There’s always a lesson. Case in point, you ask somebody out and they say no, wrong person, which gets you closer to the right person. Asking somebody to marry you, they may say no. Either you can keep being persistent or you know that you need to move on. That’s a positive thing. It depends on what you focus on. Risk in business is always necessary to stay relevant, to stay agile and to always keep a pulse on the needs of your clients, your employer, so that you can continue to create even more value. Guys, thanks for supporting the show. I hope you enjoy this short segment with my dear friend, Todd Langford.

It’s the reason we can’t shut our minds down in whatever it is we’re doing. I’m not saying don’t bring in the experts to guide you, but there’s a responsibility on your part to take that a little bit further and say, “If this happens, how do I react to that? If things don’t map out exactly like this professional has said it’s going to go, it’s going to be on me to make the decision and make the adjustment. I’ve got to keep my mind open. I’ve got to be able to understand at some level what it is I’m being told and not take it hook line and sinker.” Unfortunately, we’re going to be the ones that are responsible for what the results are. If we shut our mind down, the only thing we can do, which is where the society has gotten at some level and it’s the blame game, it’s not my fault. It’s because somebody else told me this, or it’s because I read this or it’s because I did that. If somebody else’s information, you are ultimately responsible for it. You have to take the effort and time. Keep your mind turned on.

Risk in business is always necessary to stay relevant, keep a pulse on the needs of your clients or employer, and continue to create value. Click To Tweet

I’d love to hear your thoughts on this. When you experience fear, it ultimately comes from the nature of risk. There’s an unknown. In large part, the future is what’s unknown. There’s a part of us that thrives to establish certainty or safety. It’s one of those natural instincts. Invariably, what happens is when you place the control or influence of the future on somebody else, it creates an amplified amount of risk and subsequently, more fear, because it’s not you that has come to conclusion. It is somebody else that has come to the conclusion and you are ultimately leveraging them because you don’t have responsibility or skin in the game to the discovery of the assumption by which you’re acting on. The fear is not going to go away. It’s going to go up.

The thing about control, we’ve talked about that in the past. We want to push in that direction. I like your wording of influence. That’s probably a better word we’ll get into. We’re never completely in control. The idea is that the level of control that we can secure, that’s probably indirectly proportional to the amount of anxiety we have. That’s what the issue is. As soon as we start to give that control up willingly to somebody else, it’s got to raise our level of anxiety because we’re in a period of hope. Hope it comes out instead of being able to direct the course.

Going back to the simple example of an airline pilot, they don’t know what the environment is going to be like, but they have the instruments and the training. As the environment changes, they know what to do. Technology response to it just as much, if not more, than the pilot. This is the ability to influence. You can’t control the environment. Environment is going to be the environment. People are going to treat you a certain way. You’re going to wake up with energy one day. You’re going to wake up with not much energy one day. You’re going to wake up and something happens to government, laws, your employer and to the clients you have if you’re self-employed. There are all sorts of things that are going to happen that are outside of your control.

That’s where you establish a degree of certainty around influence so that when that environment changes, that is when you are able to respond. There’s a preparedness there. That’s what mitigates anxiety and fear. When it comes to the math side of things, mainly speaking to financial math, people these days are concerned about money and their future. What’s the environment that they’re making conclusions about what could go wrong in the future based on? How would you describe that environment?

Part of it is the unknown. That’s where a lot of that fear comes from. You hear people rattling stuff around about, “What happens if the dollar disappears? What happens if this or that?” Bad news, unfortunately, is exciting for a lot of people. People want to be the first ones to tell whatever different news it is in some form and add their bias to that, about how they think it’s going to happen to drive emotion. The bottom line is we all make decisions based on emotion if we make decisions based on our beliefs, not necessarily on the truth.

TWS 12 | Relationship With Risk

Relationship With Risk: We’re never completely in control but the level of control that we can secure is indirectly proportional to the amount of anxiety we have.

 

That becomes a discipline or a conscious effort that we have to separate our beliefs, the hype and our natural tendency to go to the fear, to step back and be able to say, “What is the truth? What is it that I have influence over? What can I change in this scenario to fix that?” It goes back to what you were saying about the pilots, it’s to have those tools in place, to have the knowledge. That’s one of the biggest tools we have, is using our brain. That’s one of the things that’s easiest to shut down and let somebody else fill that void or that difference, is turning your brain over to somebody else because they’re a professional.

When you get into a crunch, what do you do? You’ve given up your best tool, that’s your brain, to be able to think through what’s going on. Knowing that you have that tool is a key piece. There was the guy that I was listening to, Sean McDowell, Josh McDowell’s son. One of the things he talked about when he was teaching kids was the idea of knowing something versus knowing you know something. There’s a key, huge difference in those two. What he talked about was he had students that knew the answers, but they might fail a test and then he had students that gave a little bit more effort to the point that they knew that they knew the answer. The difference is, in knowing the answer and writing the wrong thing down because you can talk yourself out of it versus knowing you know the answer. In life, that’s a big piece. When we know we know what we know, we’re invincible because we can rely on our knowledge to get us through an anxious time instead of reverting to the fear and talking ourselves out of what the real answer might be.

The environment right now is interesting because, number one, there’s so much information, perspective and opinion out there. The degree of understanding when it comes to math and science is, in large part, instituted by a system that people don’t like. How many kids do you know that love going to school? If you don’t have a curiosity associated with learning, you’re going to be checking boxes and learning in order to pass a test as opposed to learning to have knowledge, which is more of the practical side of things. You have an interesting environment where life is pretty easy. Even someone in a less fortunate circumstance in the United States has likely access to healthcare, to shelter, to entertainment that kings of old didn’t have anything close to. Yet they’re still upset, frayed, unhappy, depressed, unsuccessful people.

The environment is evolving at a rapid pace where life is going to get easier. Transportation costs are going to come down. We already have entertainment in spades, but even more and better-quality entertainment. You’re also going to have energy costs and food costs come down. There are some revolutionary things on the horizon. The environment is changing to the point where science and mathematical truths have been discovered that has designed this environment for people that don’t necessarily understand the underlying trues and math associated with it. When you think about that, Todd, what do you think is going to be the result of human beings and their experience of life?

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About Todd Langford

TWS 12 | Relationship With RiskTodd Langford is the Founder & CEO of Truth Concepts, Partners 4 Prosperity, and Prosperity Economics Advisors.

 

 

 

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Seeking The Uncertainty You Can Comfortably Live With

TWS 76 | Uncertainty

 

The great Tony Robbins once said, “The quality of your life is in direct proportion to the amount of uncertainty you can comfortably live with.” But up to what extent is it comfortable? How do you measure the amount of uncertainty you can handle in life? In this episode, Patrick Donohoe shares a breakthrough that had him realize the ways we all are seeking uncertainty in life just as much as certainty. He tells us about some of the reflections that occurred to him on what we need to do in order to take in more without reaching beyond the limits of how much uncertainty we can live with, most especially when it comes to our finances. 

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Seeking The Uncertainty You Can Comfortably Live With

Thank you for tuning in. I’m excited to be with you. I’m grateful for your support. I’m excited to share with you some things that have been on my mind that have impacted the way I’ve viewed my life, my financial life, viewed financial life of clients that I have. I’m excited to share that with you. As a side note, there has been a group that is advertising and marketing underneath the #TheWealthStandard and they’re promoting different courses and other things, this is not us. This is not me. Please, if you have come across them, we’re reporting them, doing some cease-and-desist stuff. We’re on top of it but we wanted to let you know that’s going on. There are some people who have purchased some of their material that is associating the reason to this show, which is not true. This is not our group. This is not us, so please be cautious.

I’m excited because I had this breakthrough and the breakthrough occurred in a software training that I host every year, at least I have for the last few years. It’s Financial Advisor Facing. I’ve gone and participated in this training many times. It’s also something I’ve felt strongly about hosting here at my office so that my team can participate in it. In 2020, it was different because of COVID and quarantine, so the majority of it was live but it was virtual. Nonetheless, I had some thoughts that I hadn’t had before. It starts with a quote that I learned from Tony Robbins. I’m not sure if he is the author of this quote. He’s the author of some pretty amazing quotes. This is an amazing quote but he also uses quotes by others as well.

This quote says that, “The quality of your life is in direct proportion to the amount of uncertainty you can comfortably live with.” Uncertainty in his words is a need that we have. He believes we have six human needs. Certainty is the first one. Uncertainty is the second. It’s a contradiction there. You also have significance, love and connection, growth, contribution. These needs that we have, one of them being uncertainty is that we want variety in life, adventure, we want new. We want different. If everything was the exact same thing, we ate the exact same thing, we wore the exact same thing, we did the exact same thing every single day, life would suck.

We're all seeking uncertainty. Click To Tweet

At the same time, we want a degree of certainty. The uncertainty side of things is the new movies you get to watch, the new clothes you get to buy, the vacation you get to go on or the new place you get to visit, the new car that you have, a new experience, skydiving, bungee jumping, scuba diving. The uncertainty is this adventure. It’s doing things that are new and exciting. Comfortably live with, that’s a very interesting word and this is where the epiphany is.

This school I go to, this training, the software program that we put on is called Truth Training. It uses a software program called Truth Concepts. I first learned about this software during this 2009, 2010 period of my life, where it was a very vulnerable time in my life. I was in the middle of getting crushed by the 2008 and 2009 timeframe where I almost went out of business. I almost went bankrupt, lost my family. It was very challenging. It was a scarce point in my life where I was afraid. I lacked certainty. I had way too much uncertainty going on.

That is what I pushed. Truth Concepts is geared around validating the financial product, financial strategy claims. It’s objectively looking at scenarios whether it’s a mutual fund, a piece of property, an alternative investment, it doesn’t matter. It’s objectively analyzing it so that you can see between the lines, the fluff of a sales pitch and understand what’s truly going on. It was humbling. It gave me not only a realization of how individuals are making investments and planning their life financially but also gave me confidence in what I was doing.

TWS 76 | Uncertainty

Uncertainty: Improving the foundation of certainty that you have with your financial life will allow you to experience even more uncertainty than you currently experience.

 

It was right. It was beneficial. It helped people. It started to help me as well. It gave me more certainty. This is the realization that I had at a much deeper level is if uncertainty is what is required to have a higher quality of life, if it’s not balanced out with certainty, it puts you in this position of not comfortable living with uncertainty. You’re uncomfortably living with uncertainty. In essence, improving the foundation of certainty that you have with your financial life will allow you to experience even more uncertainty than you experience.

Going to human needs, these driving human needs that we have most are not aware of those. I’ve been aware of them for quite some time. It doesn’t mean that I understood them. I continue to understand how those needs manifest in me whether it’s the degree of certainty that I’m looking for, it’s the degree of uncertainty that makes me feel alive and excited and gives me that adventurous experience of life. There’s also the need for significance, the thing that allows us to understand that we bring value to the world. There’s also the need for love and connection but there’s also a need for growth.

There’s also a need for contribution, which is giving back, being of value, of service to others. As we look at where we’re getting these needs, one of the big things I’ve learned in my personal development is to strategically position myself so that it’s not this random way in which I’m meeting needs. It’s not this random impulsive behavior that has me doing this, that and the other, and hopefully getting what I want in the end but it’s strategically doing it.

What gave rise to more people wanting to invest is the dream of doubling and tripling a return and what that would mean to their life. Click To Tweet

That’s where in addition to revisiting this software, how financial products work, the combination of financial products and how taxes and inflation and other impacts other financial influences out there give either rise to the claims that are being made or in question the claims that are being made. It allowed me to step back and ask myself the question, “What are our people after?” The driving force behind human behavior is these needs.

As much as I was in this training, there was also a lot of buzz and excitement with regards to what was going on Wall Street, mainly in a few different companies, GameStop, AMC, where you had a group on Reddit and other influence that were combining efforts of retail investors and influencing the rise of certain stocks, which squeezed out those who were short-selling those stock, which are mainly hedge funds. There’s lots of buzz. There was lots of excitement. There was lots of adventure there.

A lot of people made a lot of money but as you can guess, the excitement and buzz led to a lot of people losing money. In the end, what I wanted to do with this very short episode is highlight the fact that we’re all seeking uncertainty. What gave rise to more people wanting to invest was that dream of doubling and tripling, 600% return of what that would mean to their life. It’s exciting. You also had those that were driven by this unbridled control of their behavior and lost money.

The lesson and the connection I made is there are things that are going to pull me, pull you toward adventure, excitement. I believe that degree of certainty that you have as your foundation will allow even more of that. Unfortunately, that’s not the case with everyone but those that understood this principle, whether it’s using the words that I’m using to describe it or using others. If there was a foundation of certainty, certain things that you can count on whether it’s cashflow, your profession, your business, your liquidity, the financial products you have that did provide certainty of outcome or the highest degree of certainty for that outcome, these bets, these risks made you feel alive but did not take you out of the game.

TWS 76 | Uncertainty

Uncertainty: You can experience more uncertainty, adventure, and excitement in your life when you improve the quality of the degree of certainty that you have.

 

That’s my breakthrough is before, I was very prone to creating more certainty and more certainty in my life but not equating that certainty to the amount of uncertainty that I could experience. I don’t get a big rise by making those types of bets in the market. That’s just me. I like to have experiences with my family. I like to make bets in my business as far as trying this thing, trying that thing, developing software, developing a course, developing ways in which I can create more value for clients. That gives me a lot of excitement.

Because I have a degree of certainty that backs me, I’m allowed to push more and more of the limits that were in place previously. I encourage you guys to do the same thing. Don’t let your impulses, your passions be a quilt, strategically position yourself to take advantage of those. That’s what gives us this higher quality of life. However, the positioning is where you create whether it’s financial education, it’s a degree of certainty and the financial products that are at the foundation of your financial life, whatever the case may be. Just look at that, it’s a balance. You can experience more uncertainty, more adventure, more excitement in your life when you improve the quality of the degree of certainty that you have. That’s it. Stay tuned for a couple of episodes that you guys are going to enjoy that are forthcoming. Go out and create some value, have an amazing life. We’ll see you next time.

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