Wealth Mindset

The Rich Doctor: Creating Financial Freedom To Design The Life That You Want With Tom Burns, MD

TWS 73 | Rich Doctor

 

Why don’t doctors get rich? It’s a baffling question considering how much hard work and service these individuals are putting in every day. And it’s not all about the money, even. Doctors do have a comfortable salary, but most fail to develop and design the life that they want simply because they have no time. Tired of being trapped by his own profession, sports doctor and orthopedic surgeon, Dr. Tom Burns started to look somewhere else to find a way to create that financial freedom he was looking for. After reading Robert Kiyosaki’s iconic, “Rich Dad, Poor Dad” (the very first copy, no less), he knew that the answer to his question is in real estate. Through a combination of hard work, luck and the right people to support him, Tom developed his own real estate portfolio that now provides him the financial means to do what he wants with his life. In his book, “Why Doctors Don’t Get Rich,” Tom shares his story and message with other doctors, creating the beginnings of a community of physicians who are passionate about creating wealth and freedom for themselves. Listen in as he joins Patrick Donohoe in this eye-opening discussion.

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The Rich Doctor: Creating Financial Freedom To Design The Life That You Want With Tom Burns, MD

I have a guest that I’ve been looking forward to interviewing for quite some time. He wrote a book, which is called Why Doctors Don’t Get Rich: How YOU Can Create Freedom with Passive Income Investing. His name is Tom Burns. The first time I met Tom Burns, he was telling the story of how he purchased the very first copy of Rich Dad Poor Dad from a carwash owned by Keith Cunningham in Austin, Texas. He looked at the number on the back of the book when he was finished reading it. He called the number and lo and behold, Robert Kiyosaki himself picked up the phone. From there, they developed a relationship and it was awesome hearing that experience.

The next story I heard from Tom was when he was down in Southern Chile on a cruise. It was an icebreaker ship going toward Antarctica. This guy is an amazing guy and has incredible stories. You are going to love him. Tom is a physician. He started his adult life as a doctor. He’s trained in sports medicine as an orthopedic surgeon. He began his career in Austin, Texas and he continues to practice to this day. Along the way, Tom decided that he wanted an exceptional life and didn’t believe that a career as a doctor would check all of the boxes.

He wanted choice, freedom and time with his family. Through a series of events that included hard work, luck, loyal friends, great partners, patient educators and giving mentors, he developed a real estate portfolio that gave him the financial means to determine his ultimate future. Tom gets to live a pretty extraordinary life and he wanted to give back. He wrote this book. He is specifically focusing his attention on doctors, those in the medical career, which in 2020, they have had some challenging times.

It speaks to his experiences and what he did in order to achieve even more freedom. I hope you guys love the interview. Go pick up his book. You can go to RichDoctor.com in order to learn more about Tom. He has a newsletter and a blog. You can also go to Amazon and purchase his book. The audiobook will be coming out soon. It’s a great interview. I love talking to Tom. He’s such a good guy. I hope you enjoy it. We’ll see you in the next episode, until then.

It’s great to have an honored guest, a revered guest. His name is Tom Burns. As I mentioned, Tom, correct me if I’m wrong, but you purchased the first Rich Dad Poor Dad book ever.

I got lucky and picked up a good book. It happened to be the first one.

That fact alone says a lot about you. First off, how long ago that was, but also what you’ve done with your career and outside of your career. You have these dual careers in a sense as an entrepreneur investor and medical professional. It’s going to be awesome to interview you. When we first met, I don’t know but there’s something special about you. It’s something that I believe others could have benefited from. You took the plunge into the writing a book world. What was the experience like writing that book?

It was something. A friend of mine, the author of that book you mentioned, suggested that I write a book. I never wanted to shy away from a challenge. I said, “Okay.” I didn’t know what was going to happen. I started the process. People would ask me, “Who’s going to be your ghostwriter?” I didn’t have one. I’m a physician and sometimes a doctor’s disease is to do it yourself, but I had a specific reason I wanted to write every word in the book. I was writing to everybody, but directing the book at physicians, using them as an avatar for anybody that makes any kind of a paycheck.

I knew that my words would get through in one of the processes. What happened was I ended up growing because I wrote every word. I found out how to do it. I got editors to help. I learned a lot of terms and things that I hope to never have to remember now. It was a real blessing. It was because I learned a lot about myself and I was at first started writing a book. Somebody suggested to write a book. I’d never done it before. It sounded like a cool challenge.

Life is not all about money, but it’s a great tool to use to get the life that you want. Click To Tweet

What happened was I grew, changed and found out that the problem. I discovered a mission because in my world, in the physician world, there are a lot of unhappy, sad and trapped feeling physicians. Although the books written for anybody to learn about freedom, it was written to the doctors to try to help them because over 50% of them are unhappy. You and I, Patrick, when we get older, we would prefer to have a happy doctor taking care of us. It was a selfish reason I wrote the book.

As I did the research, I developed a website and developed some tools to help them. It has been a process. I’m still a tadpole in the evolutionary world trying to learn how to do this, but it was, it was great. I learned a lot about myself. I learned a lot about the world and learned a little bit about book writing. It was fun. It was a growth process and it was a blast.

I know that it has been months and months in the making, but what an iconic or serendipitous year to release a book like that. The medical world has been stretched in 2020, more so than probably any other year in memorable history. In 2020, I would say this statistic most likely has worsened as far as the medical world asking that internal question, is this worth all the decades of school and hundreds, millions of dollars in opportunity costs, but also tuition, school fees? You coming out with a book, Why Doctors Don’t Get Rich, it is somewhat of a wake-up call to them. You started down this path, but how would you characterize the theme of the book? What you want the medical world specifically to walk away from reading it? What do you want them to understand based on reading it?

I’ve had quotes from people. I felt trapped being a doctor. I didn’t know anything else was possible. I want it to be an instrument of guidance and hope to people that bring them a paycheck and feel like they’re trapped, particularly doctors. We know life’s not all money, but it’s a great tool to use to get what we want. There are certain ways to buy back your time, which is our most precious resource. A lot of physicians, a lot of people in the world don’t have time.

With some extra time, you can start to develop and design your own life. I want people to know that there is an option. It’s not for a special group of people. It’s not that difficult. Once you know the steps to buy back your time, create a little bit of even partial freedom. You take a little pressure off, life gets good and you start to smile a little bit more. The book is designed to give people guidance, hope and a bigger smile.

I know you speak to this in the book. The idea of freedom is it’s in your mind. It’s feeling, a sense of freedom because I know a lot out of people that have a financial amount of money that I would say anybody could consider being free if they had that sum of money, but they don’t feel like they’re free. When you felt that sense of freedom knowing that you didn’t have to perform surgeries, you didn’t have to work in the field that you were trained in, what was that like and how did it impact your work?

On the one hand, it was exhilarating and happened slowly. I wasn’t looking for it. I was doing my thing. All of a sudden, I realized one day, the money coming in from my passive vehicles has eclipsed my doctor’s income so that was exciting at first then it got confusing because what do you do? I wanted to make sure that I had a purpose. Freedom, money, it’s not everything you do. You do somewhat need to have a purpose. We all want to have some worth and a mission in life. It gave me the chance to sit back and see what I wanted to do with it. Selfishly, I traveled some, but then I started realizing that a little contribution to the world might be nice as well. I started looking for a mission and a purpose. It came like that. You can have the money to be free, but if you’ve got a bad home life or you’re unhealthy or your spirituality is compromised, it’s not freedom. It’s somebody with a lot of money.

Robert is the one that inspired this several years ago. He did a private education for a bunch of investors and talked about Maslow’s Hierarchy of Needs. There are these levels of Hierarchy of Needs, and most people get stuck in the self-esteem level where they achieve a lot. They go travel, they buy nice cars, they wear nice clothes. They eat at nice restaurants. It’s a Law of Diminishing Returns. The more that you pursue that, the less fulfilled you are. That’s where Maslow has his self-actualization level where it switches from satisfaction based on pleasing oneself to satisfaction coming from serving a purpose or a mission. Looking at this book, I imagine that was part of being able to offer and create value for those that you have empathy with. What has been your experience along the way, being able to give this gift to those that are in a similar situation as yourself?

It’s been a blast and that was part of that growth. I wanted to write the book to get the information out, then the mission developed. What you give, you get back ten folds. Now, I’m getting the opportunity to talk to people from all over the world and it’s been a blast. That mission has gotten deeper, broader and more focused in my life. It’s given me a great purpose. I’ve got a twenty-year plan to keep going. I hope to be doing something until I fall over and go to the next level. It’s been a pleasant surprise and it gives me a lot of fulfillment. I get to do things like this. I get to talk to good friends like this on Zoom. I’d rather do it live though.

Let me ask you a question around, I would say the information that medical professionals are exposed to with regards to finances because it’s a profession where there’s very little time. There are strenuous hours, plus there’s a lifestyle on top of that. The medical world in my experience at least has been the target of a lot of financial advertising. They’re pulled in all these different directions. When you look at the message you’re wanting to send, knowing that, how did you want to separate what you were trying to get across to this world that’s different than the typical advice that the medical world has given financially?

TWS 73 | Rich Doctor

Why Doctors Don’t Get Rich: How YOU Can Create Freedom with Passive Income Investing

One, you mentioned the education. We rarely get any financial education although a lot of younger physicians now are taking some business courses. They’re doing combined MBA and medical programs. People are becoming more aware or medical professionals are becoming more aware. In my instance, I was a biology major and I took zero financial classes. That’s the one thing. They will get targeted for lack of a better word. Nobody feels sorry for physicians and you shouldn’t. We make a great income and it’s a great profession. It’s a fulfilling, wonderful profession. Everything’s perspective, but they get targeted by people. I’ve been in the meetings when nobody knew I was a physician and I’ve heard the person in the front of the room say, “If you don’t have a client list yet, go for the doctors. They’ve got money and they don’t understand what you’re talking about.” That’s a true story.

There’s a section in the book that talks about all the traditional ways to create investments or create money or passive income outside your profession. They’re not bad. There’s nothing wrong with them. Sometimes they are proposed or advertised as the only way. I want them to know there’s a lot of ways for them to create a lifestyle, to create the money and the funds to create their lifestyle. It’s not so much about money, but it’s about buying back that time. If you’re a physician, you have to go provide a service in order to get paid. That’s the way it works. When you have some funds come in that you slept to make or that you were on vacation, or you didn’t do anything to do, and that check shows up, it becomes a little bit addicting.

I want them to experience that feeling and have the time to do what they want to do in life. It can be research to cure cancer or it can be to quit medicine. It can be either end of the spectrum or spend a little extra time with your kids or get off a couple of hours early so that maybe you can pick your kids up from the bus when they come home from school. It’s things like that and the list is endless. That’s what I want them to know is that there are other options and that there is a life out there that is not the one that has been prescribed and advertised to you. We’re only here once and I want the journey to be magnificent.

I had seen this study where this year 2020 specifically has inspired a number of youths that are in school right now to want to pursue a medical career as a physician. I look at where most of that drive and motivation is coming from. It seems to be coming from wanting to make a difference, having a purpose wanting. In the medical world, a physician is so revered because they work on one of the most precious things that exist, which is that human life. They are remunerated highly because of that. There’s a lot of dedication, work and investment of time, energy, money that goes into developing that skillset. What have you seen as time goes on in the medical career where in the beginning, there’s that passion and drive? Does it stay the same? Does it diminish over the course of time? What is your experience collectively? Following up on that question, when you sensed that feeling of independence, how did that change the way in which you serve your clients or patients?

The answer to part one is like everything, it depends. I have partners. I’m still practicing medicine. I have seven partners and they all love what they do. They’re great at it. They’ve been in it a long time. It’s not that everybody’s unhappy. There are people that enjoy the service. If somebody gets in to serve, that may be mission and purpose enough, and they may or may not need anything extra. On the other hand, a Medscape survey shows that roughly 50% of the physicians in the United States have at one time or another been burned out. Burnout means at one time or another, they didn’t want to be a doctor. We don’t want that. That means to you and I, that at one point, every other doctor you see, wanted to not be in medicine at one point. It’s a balance like anything in life. Everybody has different opinions, different things that motivate them. What is exciting to me is there are still a lot of physicians out that are happy with what they do.

Question number two, I continue to enjoy it because it’s been a decade since I haven’t required the income for medicine. Your question is that I was able to enjoy it more on a base level. I could eliminate the things I didn’t like. We, doctors, sometimes we take call calls when you stay up all night and the operator answered the phone. I decided that was infringing on my family time. I stopped doing that. If the hospital has too many rules or whatever, I won’t go into details, but you can stop going there. You’re not there for the money.

I was able to lower the volumes I was seeing. I can spend five minutes with somebody or 45 minutes with somebody. It doesn’t affect my income. It doesn’t affect my life. I’ve developed friends by walking and saying, “I’m Tom Burns. I hear you have a sore knee.” Years later, we’re going on trips together or we’re friends. That’s a blessing. I get to meet twenty new people several times a week. It’s been a blast. It’s been fun. That’s what I wanted every physician to have that, to wake up and realize I get to go in and see patients, not I have to go in and see patients. It doesn’t happen for everybody, but it was life-changing. If it hadn’t been like that, I would have been out of medicine several years ago.

It’s the professional world that has a very similar challenge. At the same time the medical world, the amount of time, effort, energy and money that it takes to develop those skills and be in practice is extensive. It magnifies that principle of being able to educate yourself financially and then develop a strategy to get to the point where you are free. You are independent and you don’t have to do these things. You have a choice now. You didn’t have the choice before, but now the choice is, do I practice because I want to or do I practice because I have to? It’s a very interesting question that most people don’t get to ask themselves. At the same time, those in the medical field, because of the amount of money they’re able to make have that option more so than other professions.

When you have a choice in life, you’ve got freedom. It gives you the choice to decide what’s most important to you. What’s most important might be serving your clients or your patients or whatever your profession or your job is. Your most important thing in life might be to travel and see the world or to be the best parent in the world or the best spouse or the best sibling. Choice does give you the potential to have and design the life that fits you best and that gives you the most meaning and self-actualization, as Maslow would say.

Let’s do this as we conclude. You have an extension to your book, which is a website and some tools that you’ve mentioned. Would you take a moment to speak about the website that you’ve developed and the tools that are there and how those that are listening could take advantage of those?

Choice gives you the potential to design the life that fits you best. Click To Tweet

For everybody out there, I’m transparent. I’m still learning how to do this stuff. I put a knee together but running a website’s been interesting. I wanted something to be useful. I wanted the book to be combined with a website that was a living, breathing organism. I have a blog that I put out and I find myself better on video. As time goes on, I’ll be having videos that have little lessons. They might be mindset lessons. They might be real estate lessons or money lessons. If you look at the book, the first half of the book is all about mindset.

Some of the how to do things is in the second half of the book. The website’s going to be the same type of thing. I’ll put out a blog that either deals with mindset or something concrete with action steps. I’ll put out some videos. I have a little section that will grow, that has some tools, things that I’ve used over time, that I developed to underwrite projects or to do some things like that. There are some spreadsheets and some resources. I encourage people to sign up and get the newsletter. It’s non-spammy. It comes about once or twice a month now. It’s usually got some helpful information. You can look at it or hit the delete button and it’s all there for help. It’s all there for you to grow and develop your own freedom.

Is the URL, the website just RichDoctor.com?

Yes. I’m the world’s worst marketer. You can go there and there’s a little sign-up sheet. It’s for everybody. I come from the doctor world and have maybe some credibility with them. You replace the word doctor in the book with your job, whatever it is, the principles are all the same. They’re all wealth and freedom-building principles.

Tom, thank you for sharing your wisdom. Thank you for writing the book. I saw how much it took and the number of revisions that you had to do. Did you end up doing the audiobook?

I haven’t yet. I’ve had a lot of requests for that so that’s step number next once I get the other mechanics of the website going and that’s about done. That’s probably the next project.

You had eyes on this book of some of the most reputable authors that are out there. It reads well. The information is compelling. It’s clear. I’d encourage anyone, regardless of whether you’re in the medical field to pick it up. Tom, any final words of wisdom or anything you’d like to leave the readers with?

I tell everybody, if you’re not growing, you’re stagnating and you’re going to wither away and die. I tell people that the $15 book is not going to change my life. I didn’t write this book to make money, but it might change your life. Whether it’s my book or your book, which is fabulous, anything. There’s always a little bit of information. You could learn something and then try to combine your education with a little bit of action. You’ll be surprised where it takes you. Life’s got a whole lot to offer and there’s a big world out there that is a lot of fun. I encourage everybody to use a little perspective and realize how much fun you can have and try not to be trapped. I don’t want people to be trapped and unhappy.

That’s one of the secrets of life is constant growth and improvement. I can’t remember what you called it. I call it the infinite horizon. What did you call it again?

It’s the second mountain.

TWS 73 | Rich Doctor

Rich Doctor: Doctors need to educate themselves financially and develop a strategy to get to the point where they are free and they don’t have to do the things they don’t want to do.

 

It’s the infinite second mountain because the second mountain will lead to the third mountain, the fourth mountain. Once you have something that you’ve achieved, in order to have that fulfillment and that enjoyment of life, you have to continue to achieve these milestones.

That first mountain might be about acquisition. There’s a book called The Second Mountain by David Brooks. The first mountain is about acquisition, which we all get into when we start, but the second mountain is more about contribution. The third mountain, the fourth mountain, we always find more mountains to climb, more to contribute and more growth to achieve. That’s what keeps you young. It gives you purpose and makes life fun. It gives you a chance to do things like this.

I’m going to ask one more question. There’s a quote that I think about quite often. It’s, “The quality of life is in proportion to the quality of relationships.” I know that you have valued relationships more than anything else. You mentioned it with regards to some of your patients. You in the book, it’s very evident of all the different seminars, all the different meetup groups and associations that you’ve attended over the years. Speak maybe to the importance and value of relationships and how they’ve helped you develop over the course of time.

We’re pack animals. We love people. I love doing this with you right now. I’d rather be face-to-face. I’d rather we be in a group of 300 people as well. You and I go on a cruise together frequently. That’s fun for me. Often, I’ll go to seminars where maybe I could be teaching some of what’s going on, but I’m going there to see the people. Relationships, when you meet other people, everybody’s so diverse. Everybody has a talent and you can learn from other people or you can live through their experiences. That’s what life all about. It’s a giant world. It is a giant passion for mine. I have my core values and they are adventure, growth and connection. We talked about all that.

The connection is so important to me that I put it as my top three of my core values. I want to be with people. This is fun what we’re doing now. It’s fun to go connect with people. You will learn and grow, and your life will be better for it. Your life will be enriched by the experiences of others. I can’t encourage people more to keep up with connections and start with your family. Family connection is most important. Those are the people that count. Broaden your circle, it will make your life a beautiful thing.

I’ll end with this comment where our society is evolving to this place where relationships are the true value of life. We have been blessed with technology such as this video conference software whether it’s energy or transportation. This is a year of disruption, but it’s going to pass. The way in which society is evolving, it’s going to, in my opinion, decrease the efforts and what we’re going to have to do in order to maintain our lifestyle expenses. That’s where, again, going to the value that people seek sometimes is right in front of us, which is our relationships starting with our intimate relationships, going to kids and going to friends. It’s no longer going to be a choice where we’re going to have a lot more time on our hands as a society. The principle of satisfaction and fulfillment is right in front of us. It’s meeting new people. It’s enjoying time with the ones we love. You don’t have to wait until someday. That day could be now.

The best time to start is always yesterday and now is the next best time. Don’t let technology run your life. It’s great that we have this, but there are 7.5 billion of us. Let’s go out and meet some of them.

I can’t wait until we meet up face-to-face again. It’s been a few years. It was in Austin. It was summer of 2018. This is a year that has made us value those personal interactions even more so. I’m sure the next time will even be sweeter. Tom, thanks again.

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Achieving Your Goals And Beyond

TWS 68 | Achieving Your Goals

 

Once they’ve reached their goals or a certain level of financial independence, most people will always ask, “What’s next?” And reaching that sense of achievement, the bar essentially gets raised as they realize that the horizon extends beyond where they thought it would be. On today’s podcast, Patrick Donohoe takes a look at one of the fundamental variables that he believes is necessary to not only achieving what you are after, but for what’s after that and then what’s after that.

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Achieving Your Goals And Beyond

Thank you for tuning in. I am grateful for this episode. There is, of course, a lot going on in the world now. The things that I believe are happening are for a reason like COVID. In some of the political situations that we’re in, there are reasons there. Disruption oftentimes helps us to understand ourselves, our lives, and what we want at a higher level better. I see so much of that. The reason why I’m starting off this way is because between the last episode and this one, I had the chance to review a lot of the responses that came in from my request for some of you to do a survey. In response, I would send a signed book out. I didn’t realize I’d have to be sending books outside of the United States, but there were several of you that filled out surveys that were in other parts of the world, Australia, New Zealand, Middle East, and the UK.

First off, I thank you for taking the time to fill out that survey, and your insight was invaluable. Additionally, because the sample size wasn’t as high as I would have liked, I wanted a couple of hundred in there, I sent another email and I had an overwhelming response, hundreds of responses come in regarding some of the information I wanted to know in order to take the right direction with a digital course that I was preparing. Your response and your candor was amazing. I couldn’t help but be drawn toward the responses, the obstacles that you’re facing in life, your dreams, and what you want out of your life. It’s inspiring to me. I wanted to start by saying thank you. Also, what I would say humbling in a sense for me is that I have already started to put the course together. I’ve recorded the first module. I did so with the intent of doing some iteration once I got your feedback.

As I read the feedback, as I looked at responses and I tried to put myself in your shoes and understand your world, it made me excited because the first module that I recorded for this digital course, I plan on releasing toward the end of 2020, the first part of 2021. It is right in line with what I believe is going to be hugely valuable to you. I’m going to give you some insight into this first module and make this a little bit shorter of an episode. In doing that, I would like to make some observations in regard to what I see as some universal challenges people are facing, which I believe there are some universal solutions to that. I’m going to first start off by saying, there was a couple of responses that came from a question about what type of content would you like inside of the course?

They said, “We don’t want any personal development or mindset information.” I chuckled because that’s exactly where I started. I realized what they were saying and why they were saying it. There’s a lot of heavy mindsets out there with a few practical applications to back that up, but believe me, there’s going to be a lot of that. I probably wouldn’t do the course if I couldn’t start with mindset first. That’s what I’m going to focus on the topic of the show. There’s something I believe, and I see it not just with my own experiences, but the experiences of thousands of clients I’ve gotten to do business and my firm’s been doing business with. I’ve also networked with a lot of successful people. In the end, there’s something interesting.

Number one, there’s some conflict as far as what we’re motivated by. That conflict is the fact that we want finality to what we’re working on, what we’re doing, and what we’re putting our attention to our resources behind. We want this finality or this certainty of the conclusion. The idea behind that is a degree of fulfillment, achievement to that feeling, and we believe that feeling, once it’s achieved, will last for the rest of our lives. That’s the conflict is that life is an infinite game. There are things that draw us into wanting to always be achieving more and going beyond what we’ve already accomplished. Most people don’t realize that until they’ve gained wealth, they’ve achieved their goals and they’re at that point and they realize, “What do I do now?” It’s unequivocal that happens. There’s no doubt in my mind that it does not happen. People reach that point and it’s, “What’s next?”

When a person gets that sense of achievement, the bar essentially gets raised. Click To Tweet

That’s where I look at several of you who have responded having achieved a lot and in most circumstances would be considered wealthy and financially independent. At the same time when a person gets to those levels, that sense of achievement, the bar essentially gets raised, or the horizon extends beyond where they thought it would be. That’s what I’m going to speak to you. As I look at one of the fundamental variables that I believe is necessary to not only achieving what you are after whatever that goal is, it’s essential for achieving what’s after that and then what’s after that. I’m going to start with an example. One is Elon Musk. The other is Jon Huntsman, who I’ve talked about before. He’s a billionaire. He passed away, but his family is in Utah and I’m somewhat familiar with them. I’m going to start with Elon Musk.

For those of you who know Elon’s background and have read his biography and seen interviews with him here and there, realize that he has some pretty significant reasons for what he does. He has these dreams. He has this purpose behind what he’s doing that goes way beyond Elon. With the companies he owns, I’m going to speak specifically to SpaceX, it has this grandiose dream of what it wants to accomplish. The reason behind Elon’s drive is to essentially extend our experience of life out into space in the solar system. There are also many resources associated with what would be valuable on earth, but wouldn’t have to pollute, wouldn’t have to take our natural resources here. I’m not going to get into the complexities of the details of that, but he has these huge grandiose dreams and reasons to benefit humanity.

The interview that I saw alluded to the fact that Elon’s heroes that drove him to want to pursue commercial and private space exploration or travel demonized him. They scrutinize and ridicule him for what he was doing. In one of the interviews, I saw Elon was emotional. His heroes that he looked up to his entire life even up to that point were the ones ridiculing him. How many of us whose heroes would crush our dreams would give up at that moment? Because Elon Musk’s reasons were significant and far beyond appeasing heroes, mentors, people he looked up to, it’s what pushed him through the ridicule, the feedback, and the achievements that SpaceX has made despite numerous failures is significant. Now I’m going to go to Jon Huntsman.

Jon Huntsman, a billionaire. He’s created multiple companies. I’m not going to get into the details of that either. In one of his books, I remember distinctly that the drive that helped him pursue the various ventures and opportunities that he had was his drive to cure cancer because his mother had cancer, died of cancer, and he was driven to cure it and found that through business. It was why he pursued certain business ventures and so forth, because of those grandiose reasons for achieving something that was beyond him, his lifestyle, and his purpose. That’s what I’m going to keep talking about. I look at the levels that we’re at in our life and I believe what got us here are the results of certain reasons. What’s going to get us beyond where we’re at now are going to be different reasons.

As I got into the formation of this digital course that I’ve been working on, that’s what I concluded is getting yourself in the right mindset, having the wealth perspective or mindset as you approach life, business, profession, job and relationships. As you approach it that way, number one, it’s understanding the reasons why you’re doing what you’re doing. The second is to be crystal clear about the results that you want. I believe reasons continue to evolve over the course of time but as you find yourself with obstacles, which the majority of you have, many of you don’t have obstacles. It sounds like life is going amazing, but there was one comment in the feedback that said, “Everything’s going pretty good right now. I’m waiting for that curveball or that black swan of that event that’s going to knock me off-kilter.” That person understands how the cycle of life works.

TWS 68 | Achieving Your Goals

Achieving Your Goals: What got us here are the results of certain reasons. What’s going to get us beyond where we’re at now are going to be different reasons.

 

The idea is that I don’t think we have to react and wait for those events to happen, which throws us off-kilter and forces us to change, innovate, and grow. I believe we can do it strategically. That’s where understanding what motivates you and understanding and getting clarity, gaining clarity in yourself, crystal clarity about your reasons for what you’re doing must exist first. Those reasons have to be way beyond what you achieve. That’s where there are these corresponding reasons to achievement ratio that I’ve seen in my own life and in thousands of other people as well. I’m not saying that those that achieve wealth, prestige, and accomplish their goals didn’t start with reasons strategically. However, those reasons exist if you dig into what compelled them to do what they did.

The second is clarity of results and outcomes, what it is you want in the end. What is the definition of your ideal life? What is financial freedom? What does life look like and being crystal clear about that? There are a fear and reluctance people have in defining that from my experience, which is they don’t want to fail. They don’t want to state something and then ultimately not live to those expectations. I get that. That’s a natural fear that we have. That’s why it’s important to number one, understand reasons, have clearly defined outcomes and results. What happens next is a quote that I’ve gleaned and am inspired by, which is by Tony Robbins, “It’s when your shoulds become musts, then your entire life changes.” We know what we should do. We know who we should talk to. We know what we should change in our business or change in our job. At the same time, they’re not musts because our reasons are not strong enough.

I’ll end with this. I’ll claim that I made getting into this wealth mindset aspect of this digital course that I’m working on was that, over the last several years, I claim that you and me have been presented with all of the opportunities to make $1 billion. Whether it’s relationships, information, books, people that cross your path that you may or may not form a relationship with, all of that existed, yet we didn’t have the $1 billion reasons or even the $1 million reasons for some of you. That’s where we start in the course. It’s not the end of the course. It is simply the beginning. What happens as you start to define your reasons and get clarity beyond what you have now, as well as start to define the actual results you want from your efforts, tactics, and strategies? That’s when your shoulds become musts and it opens up the space for some amazing things to happen.

I’m going to end with that. I first want to say thank you to those who took the time, candid, and clear. I hope the exercise helped you understand what you want and what’s holding you back. That’s a big step in being able to overcome a challenge, to get or achieve what you’re after. Hopefully, it benefited you. The course is going to be awesome. I’m excited to give you some additional updates on that, but I’ll conclude for now. Thank you for reading. Thank you for your support. It means the world to me. Go out and produce, go out and touch somebody’s life, and live an amazing life yourself. Take care.

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Experiencing Life: The True Essence Of Wealth

TWS 67 | Wealth Experience

 

We may have different notions of what it is like to experience wealth, but the reality is that experience in itself is wealth. It depends on how present you are to capture the full essence of that experience. Whether or not you have achieved the monetary value that you would associate with financial abundance, true wealth lies in your ability to savor the daily experience of life, to be present in everything you do. In this episode, Patrick Donohoe reminds us that life is short and can even be shorter than we imagine it to be. Why wait to celebrate the wealth that you already have? Join in and participate in Patrick’s two-part challenge that will help you grasp the true meaning of wealth.

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Experiencing Life: The True Essence Of Wealth

I’m excited to be with you. I have a short one for you. It’s going to be simple, a couple of points, but I think they’re profound and awesome. Before I get to that, I wanted to thank those of you who responded to my request over the last several episodes to provide feedback in a survey. In response, that’s going to help me to frame and design a digital education course specifically for the blog audience. Your ideas are amazing, how candid you were, how truthful and honest you were, it was humbling. I’m grateful to you. Thank you for doing that. If you have not received the book that I had promised you, it is on its way. Here’s what I’m going to talk about.

The reason why I decided to do this, I’ve been up in my studio doing an event that is for financial advisors. I’m doing it with two of my partners, Todd Langford and Kim Butler. I’m in a familiar set. I did a lot of the episodes previous to COVID-19, but you see some different colors and some different branding. It’s the Prosperity Economics Movement. This is specifically an event for advisors, but there are some things that came up in our event. There are also some topics that have come up in some personal relationships that I have. Surprise, they align with a lot of the things we’ve been discussing and talking about on the show.

Wealth is found in experience and is relative to the degree of our presence in that experience. Click To Tweet

That’s why after multiple hours, I think almost ten hours of recording, I’m going to talk about this because I think it’s that important. Hopefully, it resonates with you. It’s simple and profound. Now first make the statement that for me, and in my experience, I’m not sure how it is for you but ultimately people pursue wealth. They pursue material things. They pursue achievement. They pursue success because ultimately they want improved, meaningful relationships. Whether it’s relationships with an intimate partner whether it’s a relationship with children, with parents, with neighbors, with friends. It’s to achieve milestones in levels in order to experience life at a different level, not by yourself, but with those you care about, those you love. Most everything involves a relationship. You’re investing your business whether you own a business or you work for another business, the quality of your life oftentimes is in proportion to the quality of your relationships.

Understanding relationships is powerful. This is an event where we’re talking about providing financial advice to people, but the personal conversations I’ve had are in relation to some family and personal relationships. Here’s what it boils down to. It’s interesting but first, people do not want to change especially if the change is insinuated by somebody else. That’s number one. Number two, people don’t want to be wrong especially when it’s insinuated that they are wrong by somebody else who thinks they’re right. Here’s the fascinating thing. Even though people don’t want to change and even though they don’t want to be wrong, they still want different results, better results.

You’re probably asking yourself the question or thinking through your mind that overly used cliché which is the definition of insanity is doing the same thing but expecting a different result. If a person doesn’t want to change and they don’t want to be wrong, isn’t that doing the same thing they’re already doing if they truly want different results? Yes, but here is an amazing thing. When you insinuate a person needs to change or that they’re wrong, it’s not that they won’t change or that they won’t be willing to do something different, but it’s how the approach occurs. He’s since passed, but we talked last time on the show about Dr. David R. Hawkins and the levels of consciousness that he has, which is a very interesting conversation. In that level of consciousness, it talks about force. In the force component, this is a big part of financial services where you have an ego-driven industry where people are telling each other what to do. It presupposes that they’re telling somebody what to do, it’s because they’re not doing what they’re supposed to do, which means they’re wrong. If they’re not doing what they’re supposed to do, it means they have to change. Instantly you have this battle that occurs when you’re below that line between force and power.

As you look at having a true intention of either giving people advice, knowing that there is this path that they could be on that will give them the results that they want, but yet they don’t want to feel like they’re being told what to do or that they have to change or that they’re wrong. How do you go about doing it if that’s what your genuine intention is? Here’s the epiphany. When you approach people in a neutral or an accepting state, these are two levels that David R. Hawkins talks about on his levels of consciousness. Neutrality and acceptance are you go into a relationship and there’s no judgment. You’re curious about their life, their day, what they’ve learned recently, what they’re doing. You make compliments, you acknowledge them and you have to be genuine and doing this. You can’t fake this, but that’s the idea of neutrality and acceptance.

TWS 67 | Wealth Experience

Wealth Experience: There are ways in which we can show up and really capitalize on the experience of life.

 

You love a person, accept them for who they are and celebrate that and genuinely want for their happiness. As they experience your non-judgment, as they experience you that you’re curious about them. You’re curious about their life. You’re curious about their interests. You’re curious about their day. If you make a mistake, you are apologetic. You’re humble about it. If that’s where a relationship starts and then you start to discover what a person wants, what new results they want, then they will typically approach you with wanting advice. With wanting direction, with wanting feedback, with wanting perspective, with wanting your opinion.

Without that, I would say sequence, you approach those two primary resistance variables, which is they don’t want to change and they don’t want to be wrong. When you start to establish a meaningful relationship using what I said, those two levels of consciousness, neutrality and acceptance, it’s where people start to be compelled by you, empowered by you and ultimately seek after your perspective and advice. At that stage, you provide insight into, “What are you trying to accomplish? What do you want?” You provide guidance at that point.

It’s an interesting dynamic. I want you to think about some things that you do in your life where you may have the right intention of telling your kids what to do, tell your neighbor what to do. You see the path that they’re on and you want them to have the results that they want, but yet there’s resistance to what your opinion and feedback are unless the dynamic of the relationship is neutrality and acceptance. Try that on for size. It’s something I’ve learned probably a decade ago, but because human nature is designed, especially in males we’re designed to solve problems, especially when it comes to relationships we have with the opposite sex females who sometimes are not necessarily wired the same way.

I hope I don’t go down a bad path here and say some politically incorrect things. I’ll speak specifically to my relationship with my wife. When my wife has challenges and she’s facing a problem, when I go in there and solve it and then say, “We’ll do this or do this,” it immediately creates conflict. When I go in with a spirit of listening and she downloads, talks and she gets things off that are pent up, I realized over the years that she doesn’t want solutions. She wants me to care, for me to be there. Even though every fabric of my being is a solution, it’s not necessarily what she wants. That’s a totally different conversation as far as your intimate relationships are concerned.

What I wanted you to get from this is I’ll summarize. Number one, relationships make the world go round. Ultimately, it’s what we all want. We want more meaning and more quality to those relationships that improve the quality of our lives. That’s business, that’s investing, literally everything. When we insinuate, when our energy, questions, mannerisms, state makes a person wrong or that they have to change something, the guard goes up. It’s like an instant force field. The idea is to get the guard down for them to be open, enrolled, the state of neutrality whether it’s the statements you make, how you answer questions, the energy of acceptance and neutrality is powerful.

As you approach relationships that way, you don’t judge, you listen. You try to understand, not solve. It is going to create an environment for that relationship to grow. Ultimately, you could have all the solutions. If you approach it the wrong way, people resist it. If you approach it in a strategic way, people will embrace it and love you for it. I hope you learned something from this episode. I appreciate all the support. It means a ton to me. Share it with friends, neighbors and family. I would love nothing more than that. That’s it. We will see you next time. Go out there and create some value for yourself and for others. Take care.

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Wealth Mindset Exercise: Visualizing The Ideal Life

TWS 61 | Wealth Mindset

 

The starting point of wealth is in your mindset, not in your assets. Having grown accustomed to certain beliefs about money and wealth, we have in us a self-imposed threshold of what we allow ourselves to wish for as our ideal lifestyle. Have you ever asked yourself what kind of life you really want? What does financial independence mean to you? How much money it will take to get you there? How far beyond that point are you willing to go? In this episode, Patrick Donohoe invites you to participate in this mental exercise that pushes your imagination to its limits and takes you to a world of possibilities. Do you want to know what wealth really means to you? Join in on this exercise now!

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Wealth Mindset Exercise: Visualizing The Ideal Life

Thank you for tuning in for this episode. I’m glad you’re here. I have some things to talk about that hopefully will be a good segue from the last two episodes before this. I hope you took advantage of purchasing that book series called The Tuttle Twins. If you don’t know what I’m talking about, head over to TheWealthStandard.com. You will learn about the two episodes specifically with my good friend, Connor Boyack of the Libertas Institute as well as the author of those fine books. For this episode, I’m going to pick up on that theme. The reason why I wanted to have Connor on is because there is a lot of angst based on some cultural divide or maybe a socioeconomic divide that calls for justice and more equality.

I wanted to have him on because sometimes given the fact that we are not taught to critically think and debate ideas and ultimately encouraged influence to choose a side. We don’t get to think through concepts and issues. I put myself in that category forming opinions based on certain things and not being open to other perspectives. I’m not going to get into that now but I look at wealth inequality. This is something I do for a living. It’s talk about money, investing and strategy. I feel that it’s my stewardship to keep talking about this because it’s prevalent in the news. That’s why I wanted to talk to Connor and get his perspective on things from a libertarian standpoint, but also talk about where we are with understanding ourselves, our beliefs about money, and then figuring out what to do about that.

That’s where I went to children because oftentimes, we’re masochistic in a sense. We have pain and anxiety tolerance, and it’s high. When it comes to our kids though, that’s where we start to draw lines. What we realized is that both our conscious and unconscious behavior about money is teaching and influencing them. Let’s get into it. Going off of Aristotle’s quote about excellence, “It’s not a onetime act, it’s a habit.” It’s having a certain mindset which I believe is necessary. A dollar amount in the bank will not create this amount of cashflow, and the number of doors or property and the amount of business interests will not replace this. I believe that this mindset and this perspective is irrespective of the amount of money and wealth that you have. That’s the starting place. From there, you have a strategy. There’s a formula that I use which state story and strategy. The most important thing is the state, which I believe comes from the belief system that you have about money and wealth, and what’s possible for you. That’s going to be the biggest barrier to you achieving what you want.

TWS 61 | Wealth Mindset

Wealth Mindset: We have an idea of what an ideal life would look like, but we never really explore it.

 

I’m going to take you through some exercises. I hope that this expands your view and your belief in what’s possible for you. I’m going to do some follow-up episodes getting into a specific calculator and formula that you can use to start having some breakthroughs, some realizations, and setting some goals potentially. You’re going to get a kick out of it.

The Ideal Life

First, wherever you are, I want you to think about on a scale of 1 to 10, how are things going financially? How’s your financial life? You can put one being that you’re on the verge of bankruptcy and all you do is worry about money and it’s affecting your relationships with yourself. It’s affecting your health and your work, then ten being financially free where you can do what you want, when you want, with whom you want. You feel completely free. I want you to rank yourself and understand that that ranking is a gut feeling.

We understand where we’re at, whether or not we’re able to look at our financial statement or our bank account. We have an idea of where we’re at naturally. I want you to first be aware of that. This next part is going to be interesting. Sometimes we have this what I call the infinite horizon which is this light at the end of the tunnel or this pot of gold at the end of the rainbow. It’s this thing in the distance that never seems to get any closer. Sometimes we have an idea of what an ideal life would look like but we’d never explore it. There’s a psychological way in which you can be open to what you want. That’s what I want you to start thinking about. What does life look like at a ten? What does life look like on your terms. If you were to be financially free, what would have to happen?

This is where I’m going to stretch the perspective. I did an event with good friends of mine who are also in the financial services space. I love doing events with them. We meet every week, we brainstorm, and we come up with cool ideas. We do an event for financial advisors. We had a guest speaker who I consider a good friend. He’s also a colleague. He’s been a mentor of mine. He has inspired me in many different ways. His name is Garrett. He did an exercise on this event that I was impressed by. I also have thought about a bit, but never connected its relevance to the topic we’re on until my preparation for this. I feel that the purpose of this exercise is to connect with who you are, what you want, and then what growth means. I want you to take another moment. You’ve ranked yourself on a scale of 1 to 10 and get a gauge of where you’re at and now understanding what a ten looks like. What I’m about to do expands beyond a ten, which allows you even more room to understand what you want.

Excellence is not a one-time act. It’s a habit. Click To Tweet

First, I want you to imagine that starting next month, whatever month it is next, you receive an additional $1,000 of income on top of everything that you’re making. What would you do with that? Would you save it, pay down debt, go out to dinner at your favorite restaurant a couple of times or take out? What about an additional $5,000 a month? If $5,000 additional money came in every single month on top of what you’re already making, what would you do? Would you maybe look at moving where you live? Would you look at putting money away for college education, savings or build up a reserve? Now, $10,000 a month. If every single month on top of what you’re currently making, what would you do with an additional $10,000 a month? Would you get a new car, upgrade your wardrobe, pay off debt, give money to your kids, go on vacation? What would you do with an additional $10,000 extra per month?

What about $30,000 extra on top of what you are already making? What would you do with that money? Would you get your dream home, quit your job, start your own business or go to an event? Would you move your parents to a nicer place? Would you put money away or save it? If you had an extra $50,000 a month coming in every single month on top of what you’re already making, what would you do? Go to $100,000 a month more than what you’re making. Now $250,000. Every single month, money came in. What would you do? Every single month, $500,000 showed up in your bank account more than what you’re making. What would change? How would you feel? What would you do? What would you not do? $750,000 every single month on top of what you’re making right now, and then finally $1 million extra every single month.

I want you to think about those dollar amounts, the exercise, and I want you to connect with something. Number one, at what dollar amount did you not know what you were going to do? I also want you to connect to at what dollar amount did you start thinking about giving money to others where your lifestyle was complete? You are living in the home of your dreams. You had no debt. You were making investments. The worry factor of money was no longer there. Maybe a new worry set in which is, “With all this money, what am I going to do?”

Breaking The Threshold

The reason why I wanted to do that exercise is because I do believe that there is a threshold to what our ideal lifestyle looks like, what the ideal life is, and what it takes financially to achieve that. I don’t think we ever had this conversation with ourselves or anybody else, whether you feel guilty or you feel that you shouldn’t have that type of lifestyle and that others are more deserving of that. I don’t know. These are all belief systems. I want you to start connecting to that and opening up your mind as far as where you’re at, the money that you’re making, the thresholds, the glass ceilings that do exist. They exist for all of us. I want you to start positioning yourself now on what I consider a hierarchy. I talk about Maslow’s hierarchy of needs every single episode. It’s something that’s important to me because it helps me categorize, formulate, and structure ideas and lots of different information in a simple way.

TWS 61 | Wealth Mindset

Wealth Mindset: There is a threshold to what our ideal lifestyle looks like and what it takes financially to achieve that.

 

When I look at that exercise, it’s to merely open you up to possibilities. Opening your mind to what would you do and what do you want. Subsequently, it breaks beyond the threshold of you and it gets to others. What would you contribute? Who would you help? What experiences would you create for those that may not have the blessings, the opportunities, and the drive that you have? This is where the hierarchy of needs, that physiological, that carnal need like your food, shelter, clothing and those survival instincts from a financial standpoint. This is the category where people are in debt like credit card debt and high-interest debt. They’re living paycheck to paycheck. It’s a survival mentality. They don’t have any savings. They’re struggling to get by. They spend every single dollar that’s in their bank account and go into overdraft every month. This is like that physiological section where you’re surviving.

Graduating from that as you start to resolve those things, you start to pay off debt and eventually get out of debt. This is the safety tier-two of the hierarchy of needs. Maybe you have a good credit score now and you’re responsible. You purchase a home instead of renting. You start saving a double-digit percentage of your income starting at 10%. You have liquid reserves, 6 months, 12 months. You’re essentially creating that safety net for yourself. I look at the next stage, that tier-three as a relationship. It’s where you’re incorporating the building blocks of good, financial wherewithal starting with having a budget, saving money, establishing a will and trust, potentially a college fund for your kids or an education fund. You maybe start investing. You started looking into ways in which you can make more money.

The next rung is self-esteem. Self-esteem is where I would put maximizing your income. Realizing that one of the best investments is in yourself and taking some money in getting a course or getting a certification or learning something new. It allows you to be more valuable to others and subsequently earn more money. This is a stage where you have a spending plan as opposed to a budget. The spending plan is different. Spending plan is, “What lifestyle do I want and how can I create a spending plan where I can have that lifestyle and enjoy life at a different level?” Spending plans and budgets are different. This I believe is when you start to identify with that ideal lifestyle. Maybe some of those thoughts came to mind when you were doing this exercise a moment ago. At what dollar amount would you be able to do what you want to do, live where you want to live, and have fun with the people that you love?

My parents live on Cape Cod in Massachusetts and usually every year we go and visit them. A few years ago, I got to take my dad on this little plane and do a tour over Cape Cod. He had never seen Cape Cod that way, but it was awesome to have that experience with him. I prepaid for a great white shark excursion on Cape Cod to have one of those other experiences with my brother, my nephews, my dad, my uncle and my son. Unfortunately, there’s a wind storm and it knocked out power to the little airport. We did usually was the spotter plane for this boat that went around. Someone was probably looking out for us and that wind soar came in that we did not do the shark tour. That’s on the bucket list. I have some big bucket list items to contribute to the experiences of others.

Your belief systems are what stand in your way to achieving what you want. Click To Tweet

Those are examples of what I’m talking about. This is where you start to put together what you dream about and what you want to provide as experiences for yourself, your family, and then subsequently people that you love, that may not be able to have the same experiences as you. Finally, you get to self-actualization. It’s this final rung, which you’re growing for different reasons. You’re maximizing your income for different reasons. You’re investing for different reasons. It’s now outside of yourself. You’re growing to contribute to others. It’s not just live a lifestyle that you love, but you do the things that you’re passionate about. You support causes, you create memories and you establish your legacy. Also, self-actualization like career on your terms. You’re working to live. You’re investing, you’re managing to live because you have connected to that lifestyle and not the other way around.

I hope that you guys are connecting with this. The reason why I want to do it is to start getting you to understand that there is a position you’re at financially. That position that hopefully expanded you into $1 million a month. What would I do with $1 million a month? Also, it connected you to where you’re at in the pecking order of things or the hierarchy of things. Are you in desperation? Probably not because you’re reading this blog. Are you in safety, in a relationship, or in self-esteem? Are you in self-actualization? That would be amazing. I want you to connect to where you are and then over the course of the next few episodes, we’re going to speak about what life looks like at those stages above and beyond where you’re at now, and then subsequently, ways in which you can quantify that. You can establish some potential milestones on the way to whatever that ideal lifestyle is for you.

Make sure you stick with me because I’m doing this for a number of reasons. Number one, I’m trying to connect a lot of the previous episodes to actionable things that you can do. Also, I’m hoping you realize by now that the majority of this is psychological. What you believe about money is what you believe about yourself. It’s what you believe you’re worthy to achieve. I look at many different influences that have caused us to think about money and most of them I would say are limiting. Connecting with those and realizing those are simply beliefs. You didn’t necessarily consciously create those barriers for yourself. That will open you up to the importance of strategy and how do you implement strategy, because changes need to be made in order to get to the next level. If the cause is not worthy of the efforts to establish goals, change habits, then you’re not going to do it. It may be an act here and there but as Aristotle said, “It’s not going to be a habit.”

TWS 61 | Wealth Mindset

Wealth Mindset: It’s all about what you believe about money, what you believe about yourself, what you believe you’re worthy to achieve.

 

We’re going to connect potentially some spreadsheets. You know that I posted the Hierarchy of Wealth spreadsheet calculator on the website, TheWealthStandard.com as well as the Financial Independence calculator and other spreadsheets using some of the things I’m talking about. I’m hopefully formulating a way in which there’s a program created so that you can go through some goals, go through ways in which you quantify those goals, and subsequently start charting a path to achieving those goals. That’s where we’re going. Thanks for reading. It’s a shorter episode but I appreciate your attention. I appreciate your participation. Hopefully, you gained from these exercises and there will be more to come in the subsequent episodes. Head over to the website. We have some cool resources there. If you like what you read, give us a great ranking on iTunes because that always helps. Share this with your friends and family. That would be amazing. You are awesome. Thanks again. I’ll talk to you next episode.

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The Wealth Mindset: The Difference Between Being Wealthy And Being Rich

TWS 58 | Wealth Mindset

 

Mindset is what differentiates being wealthy from being rich and mindset is not a buzzword; it is something concrete, something you can take action upon. We are so used to thinking that success is dependent on strategy and tactics. We want the shortcuts. We want a step-by-step formula that we can follow to the letter. But all the brilliant strategies and tactics in the world will not give you what you want if you are not in the right state to experience a wealthy life. Ultimately, success is a function of you – of how you perceive, optimize and utilize what you have at this very moment. Listen to Patrick Donohoe as he explains why so many of our beliefs around wealth and success are turned on their heads and how we can put ourselves in the right state to build efficiency around what we have at this moment.

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The Wealth Mindset: The Difference Between Being Wealthy And Being Rich

It’s been fun for me to talk about what’s on my mind, what I’m experiencing, what I am perceiving in the lives of clients and the business, and my general observations about the environment that we’re in. I hope you have found value in it. I’m going to wrap up a lot of those thoughts in this episode. I had the opportunity to attend Tony Robbins’ Virtual 360 Business Mastery. It’s an event I’ve attended about half a dozen times. It’s the first time in a virtual format. It was good and I want to frame the last couple of episodes with what Tony incessantly talks about, which is state, story, and strategy.

First, I hope you are doing well. I hope you are seeing the environment that we’re in and you’re finding opportunities. You’re finding things to be grateful for. You’re essentially putting yourself in the right mindset and state to capitalize on opportunities because it’s easy to get distracted. It’s easy to be frustrated. It’s easy to look at the environment and use it as a scapegoat for falling short of what you are trying to achieve, your goals, what you wanted for 2020, your business, your profession, and etc. As much as I look at those frustrations out there and potentially, they are more extreme now than before, in the end, it’s those things that we achieve and accomplish that are most meaningful to us. Right now is an opportunity to dig deep, understand what you want, what you want to achieve, and then find within you the strength to pursue and overcome what those challenges are, which stand in the way of getting what you want and achieving the life that you want.

I know that’s why you’re here. I have titled this episode Being Wealthy Versus Being Rich because there is a difference. Being wealthy is finding the opportunity to live life at a high level whether things changed or not, and regardless of the environment. It’s understanding that deep down in our day and age, there’s so much to be grateful for. There’s so much that we are able to experience. Oftentimes, we succumb to this disease of abundance where we forget and have this short-term mentality of how we live versus those that live 50, 60, 100 years ago. I believe that being able to find that opportunities are an interesting paradox. The more you’re in that mindset, the more likely you are.

The mindset of being content, satisfied and happy with where you’re at, with what your life is about, whether things changed or not, that mindset is most likely to get you what you believe is the environment that will make you happy. I’ll talk more about that paradox here. You’re probably saying throughout all of these episodes, what does this have to do with wealth? Why don’t you just tell me what to invest in? Why don’t you tell me where to put my money and give me a shortcut? In the end, wealth is a mindset. The tools, tactics and products and these are what I find interesting. There’s so much debate out there regarding the difference between this product and that product. This has higher fees and this has lower fees. You should invest in this thing and that thing.

In the end, I would say successful investing and becoming wealthy is a function of strategy, but I believe strategy comes after you understand the mindset of what I talked about. It’s interesting, there are many people, whether it’s a real estate project that has been successful, whether it’s single-family homes, multifamily, industrial or storage. There are many different aspects of real estate and people advocate for one or the other, pros and cons, but there have been people that are successful in that area. You also had people go bankrupt in certain areas.

I had the opportunity to go to Southern Utah with my family and some neighbors. It was a huge lake. It’s the Grand Canyon that was dammed up. It’s called Lake Powell. It’s such a unique place. There are hundreds of feet of water and you have these big rock walls. The water is 85 degrees and it’s hot. It’s in the hundreds every single day. When we were there, there were these beautiful boats and it was a new brand. I know some of the executive team. I did not necessarily experience them with high favor in regards to their business practices years before. Typically, during 2008, 2009 when I knew some of them. Yet they had these beautiful boats and they are all over. They’re the most expensive boats on the water, only to come to find out that there were some practices that they had where there are lawsuits, embezzlement charges and several other things associated with it.

Mindset comes first before strategy. Click To Tweet

What I’m trying to say is on the surface, some things look like they are successful. Some strategies and products and investments look like they’re going to bring you success, but there’s so much below the surface that if you’re uneducated, you ultimately learn the hard way. Whether it’s business, stock market, real estate, commodities, gold, Bitcoin, and other cryptocurrencies, those products are important, but they’re not the most important. In fact, they’re the least important. We had several episodes in years past about the Rich Dad B-I Triangle. They talked about successful business as well as investment in the business. The least important thing in that triangle is the actual product itself. Yet that’s where all the focus is.

The State Paradox

For me, I look at what creates success and ultimately success is a function of you. That’s where I want to frame the context now with the equation that I’ve talked about in the past or the formula I’ve talked about in the past, which is state, story and strategy. State is a function of your language, your focus and your physiology. State is ultimately what everybody wants, but they think that some environment is what’s going to give it to them. “If this happens or if it weren’t for COVID-19, I would be this. If it weren’t for the stock market, I’d be this. If it weren’t for the job market, I would be this.” There are all these contingencies that stand in the way of getting what people want in their minds because they believe that strategy and environment have to align in a certain way in order to experience what people want, which is all internal for me.

That’s the irony and that’s why there’s a paradox. I believe that understanding yourself and your mindset, and being mindful of yourself, self-concept and there are other terms for it. The idea is the experience of achievement is a feeling. There’s a focus there and there are also words used to describe it. This is the paradox, being in that state is most likely going to get you closer to what you want or think you want, as opposed to thinking that what you want is ultimately going to give you this specific state. It’s a paradox in a sense because I believe that if you’re content, happy and fulfilled based on what you have without anything being added to you, it is most likely going to attract the things that you want. They will get you and grow you to the next level.

Emotionality Vs. Rationality

Hopefully, that makes sense. I’ve spoken to these principles in a couple of previous episodes. That’s where I look at whether it’s the parody of The Opposite George and Seinfeld or all the different paradoxes that are out there in relation to some of the most important aspects of life. It applies to money as well. That’s the difference between wealth or being rich. What I would say is when it comes to what you want, being in that state is going to help you to have the right focus, the right language in order to perceive the right strategy for you to get what you want. What I would say is, as I’ve mentioned in one of the episodes, a big part of wealth is winning those battles between your emotions, reality, logic and rationality.

There are such heightened levels of emotion regarding what’s going on. Elections are part of it. There are also states that are doing specific things. You have the debacle with the post office. What I’m going to do is I’ll use the example with the post office. What people place as meaning under the post office is that it should exist, be funded and get money so that there’s fairness in the elections. If you remove the post office, you don’t allow that to happen, then there’s somehow not going to be fairness and justice. There’s a couple of different ways to approach that argument. There’s an emotional side of things that typically aligns with a political party and how you think things should be run in our country, but then you also have a rational side of things. I would say that wealth is understanding both sides, then being happy whether it goes one direction or another direction.

If it goes one way or the other way, then your happiness is now contingent on something that’s outside of your control. With the post office and don’t confuse the former Postmaster General with me because his name is Patrick Donahoe. It’s spelled with an A instead of an O. How I look at what the post office as far as service is concerned is the amount of money that the taxpayer has given to them over the last ten years, which is upwards of $100 billion. That’s $100 billion that needs to be given to them because they’re not creating the revenue as far as expenses are concerned. There’s a $100 billion shortfall if you measure out all the different bailouts they’ve been getting over the last ten years and specifically the $25 billion.

TWS 58 | Wealth Mindset

Wealth Mindset: Being in a state of fulfillment gets you closer to what you want, not the other way around.

 

If you look at the service of the mail and what it specifically does. This is where there’s a proper role of government when you break down the fundamentals of it, but the government has taken this role in solving everybody’s problems. If you look at it going to the rational side of why the specific government was created and what its role is versus what it is now, that’s the rational side of things. There is so much emotion and I might even get you blowing up on me, unsubscribing, and giving me hate mail. That again proves my point where there’s so much emotion involved with these discussions that people do not peel back the layers of reality and rationality. Ultimately, the post office provides us with service in an incredibly unprofitable way. $100 billion of opportunity costs where that money could have either not been taxed printed by the Federal Reserve.

The private sector has solved a lot of those problems anyway. We can deliver things to people’s houses. There are some technical things involved in that, but look at what we’ve been able to do as a human race, especially in the last few years with technology. There’s so much complexity in the different innovations that have occurred. The iPhone 12 is about to come out. There’s so much computing power and so much below the surface of that screen that is brilliant. Sometimes you step back and think about what went into that and how was that created, all the different supply chains, materials, the innovation and the design. It’s incredible. The complexity of that shows that human beings can get together and provide a product and service that is way more efficient than typically a government can provide because that’s not necessarily their role

The rational side of things is what’s being displayed now, but emotions are attached to this argument because it’s associated with elections. Elections go into the different parties and then it goes into who’s right and who’s wrong. It goes into all of these deeper levels of emotion. I’m not saying from an emotional standpoint that this party is right or this party is wrong. Going into a rational conversation, you have to understand where your emotions are and specifically as they relate to potentially being wrong. Maybe there’s another opinion that might be important to understand. Having those stifled or muted for a moment to understand the logical side of things or even another perspective. If you can win that war, that’s true wealth. The last thing is having a lot of money and having a miserable life.

I’m going to use another example. There are more people that are planning on leaving California because of the proposed income tax hike, which taxes the wealthy, the higher echelon of society there because quarantine has impacted the lives of many people. At the same time, if you think about the rational side of things, the buzzword is justice, social justice, economic justice and wealth inequality. I’m not going to get into the details here because these are highly emotional topics and I’m bringing them up because I want you to discern between the emotional side of things and the actual logical side of things in order to come to a conclusion. Hopefully, in most cases, you realize that most of the stuff you get emotionally stirred by, affected by and influenced by has little meaning to the quality of your life which was fascinating to think about. I won’t go down that tangent. As far as taxes are concerned, the understanding that people are affected by COVID-19.

As individuals or human beings, we seek comfort. It’s natural for us. It’s part of Maslow’s Hierarchy of Needs. We see seek safety. What’s interesting is when safety and comfort are given to somebody without any effort on their part, what it does is cancels out the experience of comfort. It also robs the individual of one of the primary things that separate us from the animal world or the animal kingdom, which is our ability to rationalize, problem solve, think through things and come up with solutions. When somebody achieves, especially an achievement that puts their economic wellbeing in jeopardy when somebody overcomes that. They find another job, they move to a different state, they get training and learn something new and are now more valuable and get a different job. The impact that has on the human soul and what a person is able to feel about themselves and the confidence that they have, that is what human beings are capable.

It’s essentially being robbed by providing stimulus, unemployment benefits and a Band-Aid to what’s going on. I know some people are down and out more so than others. At the same time, you stifle the experience of life that’s most meaningful when you rob people of being able to figure out their own problems and overcome their own challenges. This now goes into the proper role of the government. Is it the government’s job to tax more and then give to those that are impacted by this? I understand the arguments on both sides, but my point is to bring up this high emotional conversation. It helps you realize how much that impact the quality of your life, especially when it comes to the things that you can’t control and don’t have much relevance to your specific environment and your specific life.

There are ways to be more efficient with what you already have. That’s where all strategy should start. Click To Tweet

That being the case, this goes to the state. You look at what you want from your life, where you’re at right now, and the gap between where you are and where you want to be. Inside of that gap is a state. There’s a story that comes from the different states that you’re in. Usually, the state is it’s the stock market’s fault or it’s my employer’s fault, or my colleague got a raise and I didn’t, and it’s not fair, or this happened or that happened. We always have excuses. We always have a story about why we’re not in the place that we want to be. That’s unfortunate but looking at a state shift, being able to change your state and there are three variables to state: different physiology, different focus and different language. When you start to use a different language, you start focusing on what you have, not what you don’t have. You’re able to think back on the times where you have achieved, overcome and succeeded. That then is going to be a different story and the way in which you perceive strategy, tactics and things to do.

I know all of you want shortcuts and want the things to do, want the strategies, want the tactics, but without state and story, those will rob you of the experience and most likely, it will not help you even if you did get them. I believe that most people with the wrong state and the wrong story will not be able to use strategy in an effective way to get them from point A to point B and overcome that gap. It’s natural for us to respond to the circumstances of life with excuses, “This happened, this person left me, this person cheated me, my employer this, my employer that, the government this, the government that, the president this, the president that.” When we started to take accountability for our life, that’s when our state can change and doors of opportunity open up to apply a strategy.

The Efficiency Formula

Now, I’m going to give you some strategy. I do tactics but I’m going to give you some simple ones as an example. Many of you had read the season I did on capitalism. If you remember Hernando de Soto, which I tried to get him on the show two dozen times. He’s old and was sick, but he wrote the book, The Mystery of Capital. It’s a fascinating read. I’d encourage all of you to read it. It’s written in a simple way where most people without an economic background can understand and benefit from. Capital comes from the word cattle. The reason why it comes from the word cattle, in and of itself a cow, he didn’t say it was where the value was. Capital is created as a byproduct of the cow. What that means is here’s the cow, now how do we optimize the different elements of a cow, the meat, the leather, the milk, it keeps going on and on, the different types of meat. My wife is from Mexico and they eat cow tongue there and intestines. There’s an optimal way to look at all of the different elements of a cow and essentially derive additional value more so than what’s experienced on the surface, which is just a cow.

It’s the same thing with petroleum. Petroleum was just oil. It was this nasty stuff in the ground that bubbled up and ruined crops for farmers. We’ve learned to make many different things as a derivative of that. That’s capital. What I’m trying to get to here is in your specific life, there are ways to be more efficient with what you have. That’s where I would start. That’s where all strategies should start. It’s not adding, but being more efficient with what you already have and deriving opportunities from what’s going on. Let me give you some examples. Interest rates have been extremely low and I was able to refinance all my rental properties. I have a small mortgage on my home but other than that, no personal debt. I carry mortgages on all my investment properties. I was able to increase cashflow by thousands of dollars by refinancing with very little money out of pocket. I was able to skip some payments as well.

It’s finding ways to be more efficient with what you already have. That’s a great example of doing that. If you have personal debt, refinancing personal debt and ultimately paying it off, student loan debt and car loan debt. It’s being more efficient with your cashflow. The second thing for me is being forced based on what has happened with shutdown and quarantine. You’re not spending as much because you’re forced to not spend in a sense. Many of you may have an Amazon addiction, but it’s looking at what comes in and what goes out. From a spending standpoint, I know that there are record levels of people paying off their personal debt because of this increase in discretionary income. That’s another thing, it is to pay attention to what’s coming in and what’s going out. I’ve referenced you need Budget, which is a software I use for my personal finances. Go over to the website, TheWealthStandard.com. There’s a link there. You’ll get a little discount for signing up, but you need Budget.com.

Now that you have maybe some handle on where your cashflow is and an efficient spending plan, you’re going to find equity. You’re going to find the difference between what you make and what you spend. That’s cashflow. One of the things, and this is a very simple way of doing it, it’s a psychological shift, which is setting up a separate account. I call mine the Donohoe Family Fund and it has rules associated with it. Out of that fund, no money is spent on consumption. It’s all investment or putting money into a financial product. This fund is completely separate from your checking account and operational account. Sometimes people have found it useful to have those accounts at different institutions. I have mine at the same institution but what it is, is to separates. It creates rules around it and stick to those rules.

TWS 58 | Wealth Mindset

Wealth Mindset: Focus on what you have, not on what you don’t have.

 

Looking at that, when money comes into this specific account, I usually advocate six months of liquidity, whether it’s in a specific liquid guaranteed safe environment product, not a bank account but more of a product. We use insurance with my company, Paradigm Life, but even inside of this fund, it’s having at least six months of liquidity. That’s even before paying off personal debts. I would say having that liquidity, those reserves, there’s something psychological that happens when you know that you have money in the bank that can last you six months. There’s something that happens that triggers something and creates a level of safety and certainty that allows you to operate a little bit differently. You then essentially go through what to invest in and what type of assets.

There are two things I’m going to bring up. I’ve been working on ways in which we can do some online technology applications that are more self-assessment in nature. I’d love your help. One of them is specific to what I’m talking about. It’s called the Financial Independence Calculator. It’s in an Excel spreadsheet. I would love for you to access that. I’m going to ask for your email address because I want to request some feedback. I’m developing some software and getting some feedback from you will help with the whole user experience that people have. If you would download that, check it out. What it does is it gives you a Financial Independence Day. It is a function of your saving, your investment cashflow, as well as your ideal scenario in which you produce and work. I hope you like that one.

That’s a great first investment but there’s a second part, a second calculator called The Hierarchy of Wealth. This is something I talked extensively about in my book, Heads I Win. Tails You Lose. If you don’t have a copy of that, that’s also available for free, both the PDF and the audiobook in TheWealthStandard.com. You can go to Amazon and buy the book or download an Audible book. There’s Kindle as well, hardcover, softcover, but this is a way in which you can get access to it for free. You can learn about The Hierarchy of Wealth there. There’s a calculator that they developed. It’s in an Excel spreadsheet. What it does is it helps you to identify all the different assets that you have and it ranks them in a specific hierarchy.

The hierarchy that I came up with is a function of risk and control and you will see that in there. That will help prioritize what I call your opportunity fund. Once you have money that goes above and beyond your liquidity, your six months or some of you may want 12 months or 18 months, depending on your comfort level and what gives you that feeling, that psychology of certainty. When there’s money above and beyond that, it becomes your opportunity fund. An opportunity fund is to make an investment. Making an investment, you want to know, “Where are the opportunities to invest?” What I would say is to understand where your other investments are first. That’s where The Hierarchy of Wealth comes from.

The Hierarchy of Wealth will help categorize all the assets that you have and then give you some insight into potentially where are some types of investments to think about first. For me, one thing I am adamant about regardless of where my investments are and how my assets are allocated. As I mentioned, Business Mastery by Tony Robbins. I’m huge about personal development and investing in myself to become a better leader and to understand business strategy, leadership strategy, operational strategy and financial strategy within the business. I believe that’s where the most control that you have and where you can ultimately find the best returns. I believe your business and your profession is what creates liquidity. That liquidity is then invested, which creates cashflow and subsequently degree of wealth, and more options when it comes to money.

This is a shorter episode but I’m glad that you are on. Please go to TheWealthStandard.com to access those two free self-assessment spreadsheets. I’d love to hear your feedback. That’s it for now. There are going to be some cool guests. One specifically is going to talk about education and what’s going on with our kids and options you may not have thought about before. We’re also going to probably get into some other libertarian type of topics. It’s going to get juicy. Thank you for your support. If you like what you read, head over to iTunes, Spotify and give the show a good rating. That always helps to get the word out. Share it with friends and feel free to share all these apps and other resources with your friends as well. I will talk to you next time.

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