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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome back into the Financial Safari. Consumer advocate Thomas Lipscomb here with you once again, continuing the conversation with best-selling author Coach Pete D’Arruda. Also in studio with us is Alan Grissom, tax strategist and entrepreneur. Coach, you were talking about how to avoid some of these nasty, nasty taxes through something called harvesting. Any tax is a nasty tax, Thomas. Right? I agree with that. But if you do the right strategies, you can have more in your pocket. That's what it comes down to. You have to do them legally because you don't want to end up in a jail cell. And so there's great ways. You know, we do a lot of research for that book, Tax Savvy Retirement, that I came out with last year. We talk a little bit briefly about tax loss harvesting there. But, Alan, you've taken it to a different level with what you've developed. Yeah, we really have.

00:47 I mean, when you think about how money is managed for people in the United States, it's managed vastly differently for Uber affluent. Yep. All right? So let me kind of start with that, right? Family offices manage. If an individual has a tremendous amount of money, they may have what they call a family office, meaning that they hire someone who manages their money. They may rent cars for them or buy cars or make investments. There's all kinds of things that kind of go with a family office. But at the core of it, they manage their money. Right. And, you know, at scale, when you have a lot of money, you can afford to pay someone to do that. Yeah. When you are, you know, from, you know, modern income to even, you know, fairly affluent,

01:36 that's still not, you know, at scale, that doesn't make any sense because you're going to lose all your returns paying somebody to manage that money. Right. So what we noticed in the U.S. during my time at S&P was that technology was allowing that management of money to happen at more and more at scale, meaning that you could do it with less money and make it work. So one person now could manage two people or 10 people or 100 people, et cetera. And that was, that's really great because now you can move more at scale. And also the people, you don't have to have quite so much money to have special access to certain investments, et cetera. That's good, by the way.

02:21 Yeah, I think so. Absolutely. So, you know, when you kind of look at that, we were paying attention to that at S&P. But one of the things that was very, very interesting to me was how do you manage your money at, so if I'm a wealthy guy, I could buy the S&P 500, all the stocks, right? Each one of the 500 stocks. 500 stocks. Right. 500 stocks, but you also, it's cap weighted, so meaning that I'm going to have to buy certain, I'm going to buy more. More shares of some, less of other, yeah. So it takes a lot of money to actually do that, just to have one, what, you know, you can buy it in an ETF, which is like a... It's a balance already done for you. It's already done for you, right? Yeah, yeah. And so you're just buying a slice of that, you know, how much money you put in. But if you had to do that individually, it takes a lot of money to do.

03:09 But if you have it, if you could do that, you can also deselect companies. So maybe you already had a lot of, let me work for Apple, and you had a lot of Apple stock. You don't need more Apple stock in the S&P 500. Because that would overweight you in Apple. It would overweight you in Apple, right? Yeah. But so technology allowed companies to start managing individual portfolios in that way. So meaning you could select or deselect each one of the individual stocks. That's pretty neat. That's called direct indexing. So essentially, Coach Pete, it's like with you, we would say, all right, so you can own all the stocks if you wanted to, or you can own fractional shares. So if someone had less money than you, and they wanted to have fractional shares, they could still own that in the same weights, et cetera, and deselect or select each one of

03:57 the stocks. Right. That makes a big difference in how you manage your money and your risk. Because if you work for a corporation for a long time, you've got a lot of risk in that one particular stock that's built up. Seen that from a lot of people, by the way. Yeah. Way overweight at many times. It's very common. And you've seen, like, even the past couple of years, like the NVIDIA multimillionaires, right? Rocket ship. Yeah. Yeah. For everybody. Like, if you own some NVIDIA stock, you know, you've had a high concentration buildup on those. So when I was at S&P, I saw an opportunity to leave and build a company that was focused on this direct indexing, which we did. That allowed us to push that technology out into the marketplace to allow people to manage their money in a better way, in my opinion.

04:43 And so ultimately, that's been very successful, but a key part of it was actually how do you manage the taxes? So Uber wealthy families, a lot of their work and a lot of that money management is all around tax strategies. How do we minimize taxes? And how do you take that to the middle market? How do you take that to the upper markets? You know, how do you bring that down in scale from, you know, the guys who are worth $100 million or $50 million or below, how do you bring that into, you know, mom and pop's guy who has $500,000 that they've saved for, you know, they deserve the same strategies that the Uber affluent. And saving on taxes is even more valuable for folks with a million or under or two million or under, like that kind of category right there. That is exactly what I thought as well.

05:31 Yes. So one of the things that we're really focused on in this industry has really changed is how do you create better tax strategies? How do you mitigate those tax loss harvesting, meaning that you sell your gains and you sell offsetting losses of stocks? Yes. Allows you to do some of that, right? So, you know, really, this is where direct indexing comes in. The S&P 500 stocks don't all move in the same direction every day, right? You're going to have maybe Apple's up one, maybe, you know, maybe Nvidia's down that day or Intel or whatever you would say, right? So ultimately, with direct indexing and tax loss harvesting, you own the fractional shares so you can sell those individuals each day to offset the gains. And so ultimately, you're generating losses that allow you to offset the gains, but you

06:17 keep your portfolio essentially the same while you do it. So it's a, to me, it's a next level strategy that individuals should be using. So at the end of the year, when you have a profit on paper, then you go back and because you're using this tax loss harvesting method here, the profit disappears on paper because you had losses the same day when you're having the gains. That's right. Thomas, it's pretty neat when you think about it. It is incredible. You know, you're smart. It's the only way I'd ever want to lose is if you've got to do it that way. Right, right, right, right, right. Well, you know, the way it works too with watch sales, et cetera. So it's fairly complicated. That's why technology, so that's why the scale and the technology is only, you know, it's fairly recent in terms of being able to do this. But it's actually massive for individuals because, you know, we all, every dollar that

07:06 we save on taxes is actually a fantastic return. It's as good as a really good investment, right? So understanding that fundamentally, you really want to approach things from a tax, you know, viewpoint really kind of plays out really well for tax loss harvesting. So we, I'll have to start a company on those things, which I have sold. We'll probably do more again. But it was very, very successful in the space. And ultimately, you know, I think these solutions, we've seen them really grow. And that is, that's why, because everyone sees the value in it. Let's talk about, you know, when you were doing this full time, the tax loss harvesting methods. And what was the, I know you met with people, I'm sure you saw somebody all distraught saying, I'm going to have this gigantic tax bill. Alan, what should I do?

07:51 And what was the best success story you had on that? So ultimately, there was a lot of very high net worth individuals who really jumped on this early on. So when you're looking at that, I know of one case where an individual had a $30 million company sale, all right, in July, and he's able to use tax loss harvesting strategies to mitigate his taxes by about 90% over the year. So you got 30 million. He sold it in July. And by the time January came around, he was able to reduce his taxes by 90%. Yeah, so he paid taxes. He paid about $3 million worth of gains on that. Instead of $30 million worth of gains. Wow.

08:37 That's amazing. That is amazing. All by using the strategy you developed. Mm-hmm. I mean, that's where people, you know, you throw your arms in the air sometimes saying, Uncle Sam's going to get me. Well, there's one more time. There's one person you called, maybe have him not get you as bad. Hey, there you go. Yeah, there you go. And look, it's all by the code, right? So ultimately, it's how do you do these things? How do you work through it? There's a lot of white papers on this. There's a lot of really smart people who've been behind it. This has been something that's been available for the Uber affluent for years, right? And so the technology has allowed this to be able to be moved where, you know, individuals who have, you know, maybe they've had a million dollars gain. That's still a lot of taxes. Hell yeah. On things, right? It really matters. So you have a white paper, right? Well, yes. Get us that white paper. Okay. And then we'll share it with the audience, Thomas.

09:23 Great. We can collect the information from folks who want it, and then we'll get it to you from when Alan gives us a white paper. We'll get it to you. Sure. So give the number out where people can contact us to get that white paper. Absolutely. Just call 800-662-6808. 800-662-6808. Or text keyword TAX to 600-700. That's keyword TAX to 600-700. Just amazing. We all just thought, you know, when it comes to taxes, we just have to throw our arms up in the air in the surrender mode and just take whatever they're going to give us in a bad way. But there are some ways. It's just amazing that the sale was in July, which is month seven. I can do math, right? And it's 12 months. So they only had five months to enact the strategies and still came out with a tax bill that was 90% less than it would have been.

10:08 Right. Amazing. That's extreme cases. Yeah, but that's what happens. But that's what happens, right? So, you know, look, you know, ultimately, I think that that ends with a great outcome for the individual. And ultimately, you know, that's a it's a really a proof that these strategies do work. So there was a car commercial years ago and the guy would say, everybody wins. Everybody wins except for Uncle Sam. And we don't want him to win anyway. So great strategy. You know, we did a lot of research on that book, The Tax Savvy Retirement. And that was one of the number one ways to shelter on taxes is the tax loss harvesting, the mitigation, the using the tax law in your favor. Like a lot of people get distraught when they see how big the tax code is. But there's a lot of things in that tax code that are in our favor.

10:55 Right. We just we look at the bad things, but there's some good things in there. You know, they have to be you almost need a decoder ring used to get out of a box of Cracker Jacks to figure it out. But I mean, that's why you deal with people that are smarter than you are to do it. And I'm talking about me talking to you because you're smarter than I am when it comes to tax loss harvesting. Yes. There's a lot. You know, when you kind of look at that that business and how it's evolved, there's been a lot of great minds who've moved into that space who are doing a lot of research around it. Right. And delivering better solutions. And, you know, it's been fun to be part of that that growth because it was it is the time where technology has been able to come in and make that happen. Yeah. And what I've been really proud to be a part of is we've been able to take that from the Uber affluent to push this down towards middle markets. Right. So everyone can enjoy our benefit from from these types of strategies.

11:41 So that's really what's important. Used to be something only available to the people in the ivory towers. Right. Now it's available to everyone. And so I'm going to do this, Thomas. Here's my friend. Gold and silver. Silver and gold. That's Yukon. This week is the guy who is making a little announcement. We have a free book to give away. I'm going to give for the next 26 of you who call, you're going to get we're going to actually I'm going to buy the book. It's twenty five dollars on Amazon. I'm going to buy it for you. We're going to send it to you free. We're going to pay the postage and handling the tax savvy retirement. I mean, that's the most important thing in retirement is to make sure you keep what you got instead of sharing it with everybody else. So call now. We're going to share this book with you. No cost or obligation. All right. That number 800-662-6808 800-662-6808 or text keyword tax to 600 700.

12:29 That's keyword tax to 600 700. Alan, really appreciate your time today. Hope to have you on more in the future. Thanks, coach. Yeah.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome back into the Financial Safari. I'm consumer advocate Thomas Lipscomb, still here with you, alongside best-selling author Coach Pete D’Arruda. And Coach, you have brought a friend into the studio today. Would you like to introduce him, or shall I? Well, go ahead and introduce him, and I'll talk about him. Let's do it. Let's do it. So we have Alan Grissom, tax strategist and entrepreneur, has flown in from Nashville. We've got him in the studio here. Happy to have you here, Alan. Nice to have you, Alan. Thanks, Coach. Thanks for having me on. Yeah. You and I have known each other for a while. Well, and in the financial community, like you and I are kind of veterans in the financial community, you kind of start knowing some people or start recognizing some people. And you've done a great job with indexing the market, having indexed. Do you want to tell folks about that real quick? Yeah. So it kind of goes with my history. So I've got a long-standing history in the financial services space.

00:48 The last 12 years before, I had a business with S&P Dow Jones Indices, which is like the S&P 500, the Dow Jones Industrial Average, and a million other indices that you may or may not have heard of. All right. So yeah, we were involved in those businesses or those indices for a long time. And I left in 2022 to create what I thought were investment strategies or indices that would be used in space. And it turned out to have a really successful run. So why do people need indices? Well, for a lot of different reasons. Indices, if you kind of look at that, they're a measure, right? And they can be a tool that can be used in investment vehicles. Like most people don't really think about it this way, but the S&P 500 is an index.

01:36 It measures the U.S. economy, right? It's one of the best measures of the U.S. economy. Yes. And so if you want to tell how we're doing as a country, it's a good way to look at it, right? It may not be perfect in the way it measures it, but it gives everyone a lot of confidence in how we're doing in general in the country. So when you think about that, there's a lot of use cases for it. People invest money in the S&P 500 and a lot of the NASDAQ 100 and a lot of other indices that are out there. And ultimately, the idea, because they're rules-based, they're passive in nature, the idea is that over time, those should perform, and they typically have outperformed active management. Because like most people, even active managers make bad investment decisions over time.

02:24 Yeah. And so that's what a lot of people need to know. I mean, passive is better than active a lot of times, right? It's really proven to be true. I mean, Warren Buffett, he's one of the greatest investors of all time. Hedge funds are supposed to be some of the greatest investors as well. And a few years ago, in the late 2000s, Warren Buffett bet the hedge funds a lunch versus a million dollars. He would give them a million dollars or they could buy him lunch if they could outperform the S&P 500. And over three years, most of them had dropped out. By the seventh year, all of them had dropped out of that bet and bought him lunch. So those are the best investors in the world. So it's really tough for individuals to really outperform active managers.

03:10 Can you do it? Absolutely. Yeah. But it's a tricky world out there. But can you do it consistently? You know, anybody can go to Vegas and win on one spin of the wheel, but can you keep winning when the wheel keeps spinning? So that's where people make mistakes in the market many times. And it's also, it's a lot of work. Yeah. Yeah. Do you really want to put that much time in it? You know, we study the markets actively every day, our team. And ultimately, that's a 24-7 job. Well, yeah. So you're an individual investor back home listening now and you say, I can beat the markets. But when you're trying to beat the markets, you're going against teams of people, not just you. And they've got research teams assigned to one stock. Like some of the big companies assigned five different analysts to one stock. Oh, yeah. That's incredible.

03:55 You know, they're full-time researching and they get a lot more information than we as individual investors can get a lot of times, too, because they're closer to the situation. Got to say that it's really tilted in institutions' favor. Yeah. In a lot of ways. Plus, they have psychologists who know exactly when you're going to sell. And they will move, you know, they can move the markets to certain numbers to make you sweat. And absolutely, turn it over. No moss. No moss is a common term, right? You know, I remember Roberto Duran said that back in the day, remember? No moss. No, yeah. Now, speaking of back in the day, I remember growing up and my parents would always have Walter Cronkite on and he would talk about the Dow Jones industrial average. That's about the only thing you ever heard of back then. And a lot of folks didn't realize that Dow was only 30 stocks. So it's really not as good of a barometer as an S&P 500 kind of index with 500 companies.

04:45 Right. In my opinion, because you get more of an overall view with 500 companies. Makes sense. Right. Well, if you look at this, the history of indexing itself, it goes back to what are you trying to measure? Charles Dow in the late 1800s created the Dow Jones Industrial Average. Before that, he had the Dow Jones Transportation Index, which is the first index. Yep. So why were they doing that? At the time, they were, again, trying to measure what was going on in the United States at the time. Right. And so in the 50s, when we did the S&P 500 was launched, as we know it, it really took a different view because there was more companies or more corporations in the 1950s than there were in the late 1800s. Yeah. And so ultimately, this measure, which is mostly stayed in the same framework, has been a really

05:40 good measure of the economy. And also large cap companies are different than small cap. And so you kind of go through those things. And it really depends on what you're trying to measure, right? So. You know, looking at the transportation, Dow Jones Transportation Index was at 1800s, you said, right? What they have to, would they have horse and buggy and maybe a train? Well, you know, that's a great question. That's a great question. What they had were trains. Okay. Yeah. So when you think about the 1800s and really why corporations are around, early Wall Street, the Buttonwood Tree, and then the early exchanges, they basically traded stocks. But there weren't many stocks. There were a few insurance companies and they traded revolutionary bonds.

06:25 And so for a long time, our financial institutions really were not in place, right? Our government, our federal government was really small. But if you look into the 1840s, 1850s, that's really when we started building railroads and trains. And that became, you know, the jet planes of, you know, of the day, right? So massive improvements in terms of how we could move people, how we can move product around the country. And that became an interest of investing. And there was one guy, Cornelius Vanderbilt, who had enough money to do it himself. Most, the rest of America did not. And so ultimately, that was a big catalyst of creating corporations, was raising money

07:11 by getting other people to invest to create this company to build a railroad. So you and I talked about railroads last night. It's amazing. Back in the 1800s or before that, when they built train tracks, Thomas, they didn't have all the modern technology they had these days to make sure it was level. Sure. When you come up to a hole, how do you put a train track over a hole? You build a bridge. I mean, you think about how long it took to build a bridge. Some of those trellises, you see, are amazing how far up they had to put the wood to get that, to keep the track level. And the amount of weight going over that. Oh, my gosh. It's amazing, really. Yeah. Well, and you look at all the technology and the wealth that came from that, right? Yep. So, you know, the Andrew Carnegie, so the steel, right? Rockefeller. Yep. You know, so John D was, you know, ultimately, you know, a lot of what they were involved

07:58 with as well was, you know, the oil, rock standard oil, all those things, those evolution of what we were doing at the time really drove a lot of wealth and really catapulted us into, you know, the 20th century and beyond. When you think about the game Monopoly, I don't really know. I should know when they developed that, but it had trains. Remember, they had three, four different railroads on there. For sure. They didn't have airlines, did they? But, you know, to invest in the trains and you make money with those trains. And so Vanderbilt, Commodore Vanderbilt did. Then he left his money, and that's a whole other story, to the kids and like grandkids, I guess, whatever. And most of them blew it. There weren't many that survived or the money didn't survive too many generational shifts there. Yeah, that's terrible. It's unbelievable. When you think about the wealth, because most people would consider Vanderbilt the richest

08:48 man who's ever lived. Maybe they could make the argument for John D. Rockefeller. But at the same time, when you kind of look at where the United States was at the time, it's pretty easy to make the argument that Vanderbilt was the richest man. If you look just a few generations away, a guy who was, I think, I've read, and people have made the argument, he was probably the first trillionaire as it relates to not trillion at the time, but relative to the U.S. GDP. Yep. Even that vast wealth was gone by just a few generations. He controlled the flow of goods, right? Oh, yeah. That's the railroad. Because we were talking about, it used to be by water. So you had to build the cities next to a stream or a river or something like that back in the day. And now the train tracks opened it up.

09:33 Or maybe the ocean, maybe the ships would come from the ocean. Now they come to the ocean, they load it on the train and get that stuff all the way out west. He was such a believer in that. But the reason he's called the Commodore is because he was involved in the shipping to start with. Yeah. Trains and boats. That's all he needed right there. Yeah. And so he was vastly invested and very successful in the shipping side of the business. Very ruthless at that side. But then after he saw the trains and he saw the future and he literally sold his ships and bet the future, bet the farm on the future. Wow. And he did that a few times. That guy was, you know, what I love about reading about him was, you know, he recognized what was going on and he wasn't afraid to risk it all. I mean, there were times he went down to Wall Street in panics and cornered the entire

10:22 market. So there's fascinating stories about a guy who I think didn't have even a sixth grade education, but built the wealthiest empire that the United States has ever known. And, you know, and did that with conviction. He understood stocks. He understood corporations. He understood debt. He understood all these things. And it's unbelievable that a guy, you know, which most society would have actually when he was young and making his way, was really shunned by the aristocracy of New York. And they really looked down their noses at him. And over time, he owned them all. Yeah. They weren't looking down too much, were they? That's after a while. It's just funny how a simple idea or an idea turned into a real reality with him. We take railroads for granted these days.

11:11 A lot of people complain about being too close to the train, hearing the trains whistle and getting mad about that. But what if we didn't have that kind of development? How would you move goods across? Because there were no roads back then, or there were dirt roads. I mean, they didn't have tractor-tiller trucks. You had trains. Well, you think about the gold rush and what was happening in the United States at that time, right? So you had the gold rush in California in 1849. You had, how do you get goods and things out west? How do you get people out west? How do you get things back east, right? How do you get the money back east? And so that was a big part. Like, the money part was really what was mattering. You had the great train robbery then. Here comes the money train. I didn't really care about the people part. But essentially, you either had to take wagon trains across or you had to take a boat all the way around.

11:56 You had to move all the way around a terra de fuego around South America and come back up, which was a long and pretty treacherous trip. There was no Panama Canal back then, wasn't there? There was no Panama Canal. In fact, he worked on building. They really explored building a Panama Canal at the time. It wasn't Panama. I think they were looking at another Central American country to go across. But he pushed the envelope in every avenue about how to build at scale. Well, he made a lot of money. And when we come back, we're going to talk about the power of tax harvesting and how you can save a lot of money on taxes by doing the efficient management of your taxation. We'll be right back after this.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Well folks, today we have a very special guest. His name is Professor Cam Harvey. He's the professor at Duke University. Doc, welcome in. Thank you for inviting me. It's a strange financial world. I've been around the financial arena for 33 years. I've watched it before I got into the financial arena. The market goes up, down, all around. People get influenced and enticed, sometimes by big market swings either way. A lot of people sell when they should buy and buy when they sell. But overall, do you think that headlines influence people's investing habits too much? I mean, get in the way, in other words, of people's success sometimes. Yeah, I think so. One of the key things is that the stock market is volatile. And some of that volatility is just what we call noise.

00:47 So there's some short-term news. People overreact to it or underreact to it. And that leads to mistakes in the short term when people should be thinking about longer term investing. It's one of the biggest mistakes that investors make. They look and judge the short-term news to make very consequential decisions for their portfolio. So they should have a longer-term perspective. You know, I grew up, as you did, when we had newspapers. That's how we got our stock news. Like you'd look at, you'd try to find your stocks the next day in the paper and see if you were up or down. Before the internet. Remember those days? Yes. Do you think the internet has sped up the market cycles in people's heads? I mean, we used to say if you didn't have 10 years to wait and leave a stock alone,

01:34 you really shouldn't get into a stock because of the cycles of the market. Your opinion on just overall the rapidity, I don't know if that's a name, but people are trading so rapid they're not really giving time a lot of times for their stocks to grow. Sort of like if you planted a seed and if a seed didn't sprout in a day, you re-till the soil and plant another seed. Do you think patience has suffered because of social media? Definitely. So, it's interesting you give the newspaper analogy. So to get a story into a newspaper was vetted. So you've got professional reporters, you've got professional editors, and you've got this lag of 24 hours. So what it does is it reduces some of this noise.

02:21 Now anybody is a reporter. Nobody is a blogger. There's almost no editorial control. And, and this is a fundamental difference, the more outrageous your comments, the more eyeballs or page views that you actually get. So there's an incentive to actually say things that are exaggerated and that influences people. So I think that the internet and the rapidity of the information has made things worse. And I come from the University of Chicago, the School of Efficient Markets, but I'm not afraid to say that the market today is less efficient today than it was 20 years ago.

03:08 And the reason being because people aren't educated enough or what's the main reason why it's not quite as good as it used to be? Yeah. So people naively measure the efficiency of a market by things like, well, transactions costs, which have come down dramatically. Yes. And you've got online brokers that make it very easy to trade. So what this has done paradoxically, it's increased the number of retail investors. And those retail investors are operating at a very large disadvantage. They do not have big data and quantitative models working for them. And the second thing that's really important is the explosion of passive investing.

03:59 So passive investing is more than active investing now. It's about 53% of all investing. And a passive investor doesn't care about fundamentals. That's completely irrelevant. They just buy according to market capitalization. And what that means, it hardwires into a portfolio a mechanical overinvestment in overvalued stocks and underinvestment in undervalued stocks. So this is very negative for price discovery. It's negative for liquidity. It's negative for systemic risk because these giant buys of everything happen and they can be giant cells of everything. So you put these things together and markets are not what people thought they would be 20 years ago.

04:54 And we've kind of degraded. So the individual investor, I think they're more and more at a disadvantage if they're trying to swing trade or day trade, right? Because you're going against these massive algorithms and AI computerized trading. You really don't stand a chance. You're being led to slaughter as a sheep a lot of times, aren't you? Oh, this is definitely the case. There's a reason that the transaction fees are so low on Robinhood. That's because Robinhood sells their order flow. And you think, well, who would want to pay for the quarter flow? Well, it turns out Robinhood and not just Robinhood, but other online brokers, mainly retail investors. And the hedge funds actually want to trade against a retail investor.

05:43 So a hedge fund doesn't want to trade against Jane Street or Citadel. So they want to trade against a retail investor. If they are, let's say, buying securities from Citadel, they're thinking, well, what does Citadel know? They might know something that I don't. That's a dangerous trade. But if they're trading against a retail investor, no big deal. They're willing to pay for it. And this is just another layer here. And it's not just buying. They're shorting into the buying a lot of times. That's what I see a lot of times is in dark pools they're called too. A lot of times some very mysterious shorts, we'll say. We'll say it nicely that you really don't stand a chance. If you're trying to beat the big boys in this kind of game, sort of like going to Vegas with

06:28 a couple hundred dollars and thinking you're going to beat the big bookies there who know what the spreads are and the games and all that kind of stuff. When did you see a change? I mean, back in the day, because I remember I had a, I think my first, JB Oxford was my first online trading account back in the late 90s. And it was $300 a trade plus a penny per share. And that's when we had the 12 and a half cent kind of levels too. So there's a lot of, a lot of money was made on each transaction. And now they're making money on making it affordable to get in because they can short, when you're buying, they know you're buying. So they can even take your shares sometimes and then they can we short them. Yeah, definitely. So the acceleration really happened about four years ago when the amount of online trading

07:14 really exploded and the price, like the cost of trading just went down dramatically. Yeah. So on your mobile phone, you're checking and trading all the time. So that's when it really took over. The passive investing has been increasing very steadily. So I've actually done calculations and looked at the degree of passive compared to overall investing. So as I said, it's like 53% now, but it is on trend to go to 80%. Wow. And at some point, like what, what is the threshold where markets become really dysfunctional? Yeah. Well, and then you add a lot of these brokerages will let you go on margin. And you know, maybe people are doing home equity lines and that happened in 2008.

08:03 And I saw a lot of people getting a lot of trouble for doing that financially. But people are still doing it because it's like, it's like an online casino. You know, it's fun to win. That's right. And you, a lot of times you lose and now you're trying to play catch up. And that's where people are getting in trouble. They're putting their retirement, what worries me the most is people are doing this with their retirement money. I mean, that's, what's one thing to do with money you can afford to lose, but you can't afford to lose the retirement money. Yeah. So again, the online brokers make it so easy to trade and it's not just stocks. Yeah. So we've got prediction markets also that are increasingly popular. Yes. We can gamble on almost anything. We've got crypto on the side. Yeah. So, so this is basically enabling a large scale kind of gambling.

08:50 Right. It used to be that you needed to get on a plane to go to Vegas. Yeah. You don't need to anymore. That was expensive to do. Vegas is having less people come out there now, mysteriously. Yeah. They had to restructure. Yes. It is. Again, we're with Professor Cam Harvey, folks, a great professor in finance here at Duke University, right down the road from where we're taping this. Crypto, you mentioned that. Your opinion on crypto. I mean, it's come out of nowhere. And, you know, we watch Bitcoin go way up and go way down, has 90% swings. It's not for the light at heart, is it? No. So, Bitcoin is extremely volatile. So, think of Bitcoin as four times as volatile as the S&P 500. Wow. So, think of Bitcoin.

09:35 And it is sometimes sold as a substitute for gold, as a safe haven asset. But, let's consider the following fact. Over the last 14 years, Bitcoin has had a drawdown of 60%, six zero percent, six times. And that's not including what's happening today. So, any asset that's got drawdowns like that, so frequently, is hardly a safe haven asset. So, it is also important to actually differentiate the different types of crypto. Right. So, Bitcoin is a crypto that originally was going to be a method for peer-to-peer transactions.

10:28 That was the original model of Satoshi Nakamoto. Right. It's not. It's a store of value. It doesn't have much throughput. It's got value because people believe it's got value. There's other cryptos that have, like, more utility. So, Ether, which is the crypto of Ethereum, you can do the transfers from one person to another, but you can also use that currency to pay for computing time on the Ethereum system. So, it actually has a value. It has something of use. So, you pay Amazon Web Services for computing time. So, you pay Ethereum. So, it's got some tangible value. And these computer programs are very interesting because they enable yet another layer.

11:16 And that is the collateralized crypto. So, think of stablecoins. Okay. So, these are not volatile. Or, they're only as volatile as the underlying asset. Yes. And these stablecoins are extremely useful. We now have regulations in the US with the Genius Act. And they really disrupt the banking system. So, think of a transfer anywhere in the world in 1 to 12 seconds. That's amazing. Compared to 3 to 5 days. Yeah. So, it really does change the game. So, I would say that I'm more enthusiastic about the cryptos that actually have some fundamental value than ones that are just used for speculation. I was talking to some friends about that same thing.

12:03 Because Bitcoin was originally built to be the transactional coin. Yeah. But no one's transacted. They're buying it and storing it. And so, until it actually proves its worth. Now, I did have in 2012, I had a guy on the show and he talked about the million dollar pizza. Yes. Because the guy used Bitcoin to buy a pizza. And actually, it's two pizzas. It must have been good at Caesars. Right. And that was a million dollars worth of Bitcoin back in 12. And I think Bitcoin right then was around $1,000. It's a billion dollar pizza now. It's crazy. Exactly. So, it's just looking at anything in this world, it has to have a use. And it has to have a use to the general public. Not just like if me and you use it, but nobody else uses it. It has to have a real big use to get the value it's basically claiming right now. I mean, even right now, it's around, as we taped this, around $60,000 a coin.

12:49 We do need to be careful because it's not just the use today, but the potential use in the future. Yes. So, there's always some option value that things could change. But you're right. There's got to be a use case. Yes. And that use case might be viable today and it might be viable in the future. Yeah. Well, fascinating. Folks, this is Professor Cam Harvey. When we come back, we're going to dive a little bit into precious metals and safe retirement strategies. 800-661-7383. 800-661-7383. Or text the word PLAN to 600-700. That's PLAN to 600-700.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome into the Financial Safari. Excited for this segment of the show. I'm Thomas Lipscomb, consumer advocate in studio alongside bestselling author, Coach Pete D’Arruda, America's Wealth, Financial, and Income Coach. You can catch up on the show over at FinancialSafari.com. Again, that's FinancialSafari.com, or just find a search for us, Financial Safari with Coach Pete on Apple, Google, Spotify, wherever you like to listen to great podcasts. Now, this segment here, these next few minutes, Coach, we have a great guest with us. Do you want to introduce him for us? Yeah, well, I mean, he's from Tampa Bay. His name is Sheridan, and he's a great entrepreneur consultant, I think. I mean, we try to say, you know, business owners, but business owners and entrepreneurs sometimes are different kind of people. And so, what do you think, Thomas? You

00:47 had something you really wanted to ask Sheridan. I agree, and I think that's a good lead into it as well, because entrepreneurship, and I'll throw you at this, Coach. You're an entrepreneur. It's a very different mentality than just maintaining a business, as it were. Do you find that to be the same as well, Sheridan? I do. I do. And to your guys' point, there's a delineation between the two. I tend to think entrepreneur is somebody who's, you know, they're trying to get in a business, start a business, find an opportunity, find something that is undervalued, right, and get in, try to get out. They're trying to make a profit. They're trying to quickly get in and out. I think a business owner is different. They are trying to build something. Consistent. Now, something I touch on quite a bit, Coach, and we can actually flesh that out in this segment would be people, although the business is their baby, right? And I think you and I can

01:35 talk to that as business owners. Yes. But you don't want to put all your eggs in one basket. You don't want to have 80% of your net worth tied up in the business for all types of reasons. It can come down to diversification. So, trying to make sure that the two of them are individual and separate, your net worth and the business net worth, I think it's something that's critical and highly overlooked. Yeah, we say you don't want 80%, 70%, 50% in one place, but a lot of people I talk to have 95% of their money. If they're a business owner, basically, like you said, it's their baby. And by the way, folks, Sheridan Murphy, he's a CFP, and he's been working with business owners and entrepreneurs for nearly 10 years. So, he knows what he's talking about. Sheridan, what are some of the mistakes that people are making besides having too much money invested in their business? Which I understand that because, like, I don't know if you have kids yet or not, but I've got

02:20 a daughter and anything she wants, she gets. Even though I try to make it seem like she's not, she's going to get it because I have a soft heart for that. And same with a business owner or an entrepreneur. You have a vision, and your vision is your baby a lot of times, and you'll pour anything you can into that to make sure it succeeds. Absolutely. And it's almost a mistake of passion to an extent, right? Because, as I'm sure you can speak to this too, Coach, business owners like ourselves and the people that we serve, you don't clock 40 hour weeks. You take your business home with you. You're always available. The phone can ring at any time, and you've got to get back to those people, right? So, that's just kind of the, those are the rules of the game to an extent. But I think the mistake that people make is they're so locked into their business, their business is their life, blood, sweat, tears, you know, they're never clocking out.

03:07 But you have to understand that if something were to go wrong, all of that time, energy, sweat, tears could not pay off correctly because, you know, a downturn in your industry, other factors, health, anything could pop up and could really wipe out a lot of the time and effort you put into that if you don't properly diversify and try to build personal assets outside the business. Yeah, and we hear that, but then there's always something. They say, well, I won't do it, but this month I'm going to put all my money in my business because I understand what Sheridan and Coach Peter are saying, but then all of a sudden it all goes back in there. And I'm going to make a comment after this question because I've got to comment about it. And so, but it's a great question. A lot of owners treat their business and personal finances like one big sock drawer, all right? So, what's your framework for separating the two without making it complicated? And I just wanted to comment, I don't

03:56 have a sock drawer. I have a big laundry basket full of socks because, I mean, I don't know anyone who has one drawer for socks. I have so many different, I have winter socks, summer socks, you know, wool socks, the short wearing socks, the white ones, you know, all these kind of socks. I don't have just one drawer. Truth. I could just drive myself crazy if I try to organize it. So, usually I, you know, you try to match them and there's always one that the washing machine eats, right? And so then they end up in the big laundry basket and then it appears out of nowhere because sometimes the socks hide in your pants when you wash them. Mm-hmm. Yeah, they get cut. Sticky things. So, anyway, you know, that's where my mind goes sometimes. No, but anyway, but how can we make sure to separate our business from our personal finance? You know, I talk to a lot of business owners, or I talk to their spouses a lot of times when they come in and they're rolling their eyes when the business owner's talking because they want to go on vacation and the spouse always says, next year we got to get the business running and next year never really comes, does it?

04:45 No. No, and it's funny, what you just described is perfectly illustrative of the issues that I see more often than not. You know, I'll have a show, people that call in, it's, I feel like I did everything right to an extent where the business should look like the sock drawer, right? It's everything folded. Organized, maybe it's color-coded, kind of depends on how neurotic you are, right? But oftentimes it's actually the sock bin where it's, you know, hey, a couple of years ago I set up this LLC, I thought I was doing things right. And then you fast forward a couple of years, man, I've been putting 80 hours a week into this thing and I just haven't prioritized the structure. Why are we doing certain things? Are we making, smart distributions? Are we structured as, more often than not, I think people should be framing this as a LLC, S Corp is usually good for most people. If you grow out of that, that's a good

05:30 problem to have. But for the average person I'm speaking with, that's a good place to start. Make sure you're distributing assets properly. You have a proper salary. Do things with a purpose. And in doing so, you will have a much more organized business, much more organized personal finance, and they can work in tandem. That's really the goal, in my opinion. People, they love their business like a baby. But at the end of the day, I'm trying to make the business a source of wealth, a wealth machine to an extent, that then you can ride off into the sunset whenever you get to the exit point and do so in a calculated manner. You know, if you're not careful, the business is like, especially if it's not run right, the business is like the child that never leaves. They go to college, they come back and they're living in your basement, they're eating all your food, all that kind of stuff. So you have to make sure your business can start supporting you eventually. It's sort of like having the child,

06:16 you spend all the money helping the child grow up and go to the best schools, and then the child starts striking it rich and paying your house off. Like you hear the athletes every now and then paying their mom's house off, that kind of thing. Usually the mom, Thomas, never the dad. Don't know why that is. We're softies. Yeah, we're talking to Sheridan Murphy. He's a certified financial planner, and his specialty is helping business owners and entrepreneurs make sure they have the business run the right way instead of the business running them, I guess we say that. So Sheridan, you work hand in hand with your clients' CPAs to make sure that everything is right and communicated right. What does a good relationship with a CPA look like? You know, that's funny. I have a love-hate relationship with a lot of CPAs, and that's not to take shots at CPAs. What they do is extremely important. They're an extremely valuable asset

07:03 to the team to give you a coach analysis. Maybe they're like the all-star running back, right? They got to be working with the rest of us in the scheme. But the issue that I think we run into oftentimes specific to business owners is that the CPA is there, and they're essentially trying to check boxes. They're trying to make sure that things are done a specific way by the book that they learned. But they're not tax strategists. They are tax preparers in almost every circumstance. Yeah, well, I used to do a show with a guy named Bob Grace in Fort Myers, Florida. He would say that CPAs are historians. They report what happened. But a tax planner is a futurist looking ahead to make sure to protect your behind from the tax man going forward. Now, I don't want the big blanket statement because my CPA is a forward-looking one. Me and him get together and do tax planning

07:51 together. But most CPAs don't. Most CPAs are reporting what happened and almost tattling on you sometimes. You don't need a tattletail. I had two brothers. I know what tattletails are all about. Now, entrepreneurs love the word write-off. You've talked about cost-effective planning and structuring things in tax-smart ways. What's the truth behind write-offs, and what do people misunderstand the most, do you think? That's hilarious, and I'd be remiss as a huge Seinfeld fan if I didn't mention a great Seinfeld line. You don't even know what a write-off is, right? And funny enough, that unfortunately is the case sometimes where people like to throw these buzzwords around write-off this, write-off that. But write-offs, deductions, they're extremely valuable, but I don't think people are doing so in calculated ways. There has to be planning around this, right?

08:38 And I'll give you a perfect example. It is February, right? And people are now starting to meet with their CPA where tax planning, deductions, being strategic with this should happen in Q4 of the prior year. Because if you're in a position where, hey, I had a rock star year, I'm going to have all of this additional income that maybe I did not have the year prior, you need to be planning for that. Maybe you buy more equipment, depending on what your industry is. Maybe you defer some payments. That needs to be happening before the clock strikes midnight at the end of the year. Another issue that we're seeing. So again, make sure that you are staying on top of these things and being active, not reactive. Don't be like Coach Pete, trying to write that term paper the night before it was due. My wife would always have hers done like the day the teacher assigned it and I was waiting to the,

09:24 like the night before. That's just the way I performed back in the day. That was me too. All right. So what does tax conscious in everything we do actually mean in practice? Is that weekly, monthly, quarterly? Give us a cadence about how someone can be tax conscious every time they spend money or every time they decide to do something for their business. Well, I think it kind of rolls into what we just discussed there a little bit where it's, you want to have a purpose for these things, right? And people just pay attention all the time, right? Yeah, more or less, right? And tax is such an umbrella. We're talking about tax related items almost constantly, especially with the business owners and the entrepreneurs, but it's putting a plan in place, right? And typically we want to be doing that at the end of any given year. We want to be revisiting that during the calendar and or tax year, depending on your fiscal year. And if we need to make changes, just making sure we're always on the same page, stick to the playbook,

10:13 as you would say, coach. And if we do, if we need to adjust, we can always do that. But, but that's typically the way, the way I like to approach things is have a strategy, be able to be flexible within that strategy, but make sure that we're touching base frequently. Yeah. This is a term that a lot of business owners hate to hear, but it's a good one to hear risk planning. It isn't sexy, but it's what keeps the lights on. So how should business owners think about insurance and protection, both personal life or life and health and business related without overbuying protection? Yeah, that that's the funny thing. And an example I've used a number of time. My grandfather is a good example where he has a construction utilities business out on the West Coast and he's, he's in his eighties now. And the issue that he's run into is that although he has,

10:59 you know, great employees and he has a successful business, he is all the value of the business. Yeah. He is all the expertise. He is all the contacts. He is the one going out, getting the contracts. He knows what's profitability, the margins, everything. And that's become a blessing and a curse to an extent because he is all the value. He can't really sell the business because he can't really sell himself. Right. Right. So you want to make sure that you have an exit strategy. You want to make sure that you are taking care of risk to your question coach. And maybe that's a key man policy. Maybe that's, you know, a decade, two decades ago, he should have had somebody come in private equity, whatever. Buy, sell, agree, those kind of things. Yes. You have a partner. So a lot of people get in trouble here when, yeah, when they do a good job of running the business, but then the business runs them. And if they leave the business, it's not worth anything.

11:46 So, yeah, we're coming, we're coming against a break here. But folks, if you are a business owner, entrepreneur, want to make sure you have the right plan in place, want to make sure you get that battle plan so that you're not having the business run you, but you're going to run the business. Give us a call right now. We'll sit down with you and give you a consultation at no cost. It's true. We're here for you, folks. The number to call 800-661-7383, 800-661-7383, or text keyword plan to 600-700. That's keyword plan to 600-700. Sheridan, if someone wanted to get in touch with you, they can go to modwealthmethods.com, right? M-O-D wealthmethods.com. That's correct. Yeah. I, coaching, you alluded to right there, trying to get a domain these days and possible. So, it's modwealthmethods.com. Mod as in modern short. I got you. All right. Well, thanks for your time and look forward to having you on again in the future,

12:34 Sheridan. Thanks, guys. Take care. All right. We'll be back right after this.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Each and every week I talk to very interesting people and the most important part is that I shouldn't be the only one hearing it. I really feel that if these people make sense to me that everyone out there needs to hear it. So stay tuned folks and I hope you enjoy this newest weekly segment on Coach Business. Well folks welcome back into the show. This is the time of the show where I like to go out around the world and find someone who is making a difference reporting on people making a difference or just overall a cool guy to talk to and I've talked to him for years over a decade now. I've talked to Niall Nichol. We've had him on the show before and he's one of my designated tech experts and Niall welcome in. How you doing? Man I am doing great and I'll tell you what tech

00:45 is exploding so we will have no shortage of things to talk about. Yeah well before we even get into what I wanted to ask you what do you think is the number one tech aspect that's going to change the way everyone listening does what they do in the next five years? You know it's been in the news so much but quite frankly I don't think people take it as seriously as they should and that is AI. Yeah. And AI has been really since its introduction into the marketplace it's just made huge leaps and bounds but what most people don't realize is it's been in development in serious development for 40 years. Wow. So you take it to the marketplace and you take it from a handful of tech geeks and

01:33 scientists you know like me and you put it out to where literally it's not millions of people anymore billions of people are using it a day it gets smart real fast and it just something called a large language model which means it takes all this information people ask it questions they correct things that it says wrong and all of that and it gets very sophisticated and so when you start getting billions of people using it it gets really sophisticated really fast across cultures and it is going to radically change our landscape in the next five years. Well a lot of jobs that are done today simply aren't going to exist in five years. Yeah that's that's so what makes you happiest about

02:18 this and then what makes you saddest and what scares you the most? There's a three three-part question there. What's a happy thing about this? So the happy thing to me is it's called artificial intelligence and I really wish that they would rename it to assistive intelligence. The reason I say that is it is great I probably use it you know I bet on a on a given day me interacting with it I might use it two hours a day. Well but I use it as as an assistant and it's an assistant that I have to train I have to correct I have to review what the assistant gives me and as long as you interact with this artificial

03:05 intelligence platform whichever one you want to talk about in that capacity it makes me very happy because it lets me get probably I bet it lets me get easily two to three hundred percent more done a day than I do without it. Now by the way I can't just press a button ask it a question press a button and then spit it out because it's also wrong a lot it's wrong an awful lot but just like an assistant you know you hire an assistant you have to train them you have to get them sophisticated you have to review what they've done for you to make sure it's correct and after you build up some trust maybe you let them go a little bit but that's sort of what this is like so that's what makes me the

03:50 happiest. Yeah so unlike a human where you have to tell them the same thing over and over again I think AI remembers it the first time right when you when you correct it it doesn't make the same mistake or does it? Well you would think that would be the case but no as a matter of fact you'll laugh at this and if you don't there's something wrong with us I argue with it quite frank quite frankly often oh yeah in fact I'll even curse at it every now and again does it curse back? Sometimes yeah or it will say Niall now now now but uh the flip side is is um I have had to tell it to do the same thing over or make the same corrections sometimes five six seven times and you might say well why do you do that again it still improves my productivity. I see Thomas nod and Thomas you agree huh? Oh it's totally true

04:41 and I think you know you can think of the AI the artificial intelligence I like what you said there and assisted intelligence uh as this silver bullet but it's not but it is definitely helpful it's uh so it's almost like a footstool instead of a ladder. Yeah I would say so I think I love your description there Niall because I because I agree with you I use it a whole lot and and it's not an end-all solution but it is certainly amazing. So what makes you the saddest about it Niall? The saddest is that I do believe even though I'm telling you where it's going to go in five years or so I think it's over full today um you know it sort of reminds me as we talk technology you know when high definitions televisions hit the market. Oh yeah. Everything had HD on it. You could buy HD sunglasses. Now how did that

05:31 change the sunglass? It didn't change it a bit. It changed the price. Well you're starting to up. That's exactly right. It did change that but you're starting to see AI in everything and AI certainly has its place. It has its place in a lot of devices um you know some of the things that we might talk about like uh lawnmowers uh you know that that were introduced at CES this year um you roll the lawnmower out it gets the weather forecast and it might say you know what I'm going to put off mowing the lawn until three o'clock because it's supposed to rain. It sounds like I used to do but I just put it on for a couple days. Exactly. You wouldn't go back out to do it. Yeah right. And and you might say hey there's HOA rules that only allow us to mow you know between eight o'clock

06:18 and and 11 o'clock in the morning and we can't do it on Sundays at that off limit. So um it could ask you some questions like that and it could learn and then by the way if it happens to be mowing your lawn for you and it's geo-fenced because it will do that um and it finds something peculiar in your yard that you weren't expecting well not only will it document it'll mow around it and you know if it could do something to uh to take care of the situation it will but otherwise at least it notifies you there's a problem. Wow. Now for remote homeowners this is great because after it mows your lawn it goes back and parks in the recharging station and it's ready to go again. You know that reminds me of this Roomba thing we have in the office it goes around in vacuums and stuff and it then recharges itself empties itself out and it's like it's almost self-sufficient right Thomas? Every day when

07:06 it gets stuck on a wire or something or a power cord. In the lawnmower's position it's going to be a beer can that the construction worker threw. Or a snake. Or a snake in the yard. And that's where the that's where the AI is coming into into play because it recognizes those things and it might say yeah you've got beer cans all over your backyard. Who's getting drunk that's gonna call the cops on you? Drinking! Oh you know if you could think of the Roomba and uh or Rumbo whichever way we were to say it uh if you could think of that device that learns what's there you move furniture around and it learns that it has to adapt its patterns or whatever uh you know that that's a great application for AI. It's amazing as folks we're talking to our tech expert Niall Nickel and he's uh he's been uh a guest

07:52 on the show for over 10 years now a decade Niall pretty funny and now you're retired supposedly but you're working harder than ever it looks like. Yeah yeah I had hair at one point in time too not so much now. It's a great hair migration you had the same thing happen it went from the top of your head to your chin. That's exactly right. Hey uh all right so what is the scariest thing to you about AI going forward? The scariest thing to me about AI is uh when it gets into certain applications that it shouldn't be in and that there's nobody checking it or verifying it um it it as I said it does produce bad results um that I still use it um because I'm able to identify that but for people that don't

08:39 uh recognize that it's not perfect um it gets you in a lot of trouble in fact there's been attorneys because quite frankly uh AI today is great for law but there's been attorneys that have used it in briefs and it has it's made up information that's just not correct and it puts it in a brief and let me tell you a judge is not very happy when that happens. Yeah you know and they find it. You can't blame anybody but yourself even if it was AI though you're supposed to do it yourself anyway. It's sort of like Dennis Rodman the famous basketball player for Chicago Bulls back in the day and uh he had an autobiography came out which means it's all about himself he supposedly wrote it and somebody asked him about a quote in the book and he said I was misquoted. It's his own it was supposedly his own book so you know you can't blame anybody but yourself who's got two thumbs and it's to blame you right so you got to be

09:27 careful. Well he did he didn't want to talk about the multiple personality disorder there but we'll just leave that alone. All right well that's that's funny so the CES the consumer electronics show this year there was amazing things I heard about drones that could fly you from one side of the city to another like your own personal aircraft uh robots that could do everything mowing the lawn and then fold your clothes and all this other stuff what what do you think is going to be in the like let's say in two years from now what what from CES is going to be almost a household item do you think? Wow that's that's sort of hard to predict. Yeah it is. A couple of things I would say are going to be radical changes and one of them we're already starting to see a lot but you probably don't realize it and that is smart city technology integrating with smart cars. The way that we're

10:19 seeing a lot of smart city technology right now is we're seeing road signs that automatically update based on road conditions accidents and things like that. You might think that there's a person sending out those messages most likely it's not there's automatic or automated traffic monitoring they start to detect backups and they reroute traffic automatically but now with smart cars you're getting those messages because it knows your route in fact I've got a 2026 model now and I don't even have to tell it when I'm heading home it knows it updates the route if there's any problems and it gives me my ETA so now when my wife calls and says when are you going to be home I could say 13 minutes. You can't blame traffic anymore can you? You used to have that built-in excuse for about 15 minutes. Oh

11:08 yeah it was caught in traffic. No you weren't. Where's my buffer? No you weren't. The car texted me and said you weren't. So is that a 2026 Tesla by the way? Is that what you're talking about? No no no believe it or not I I've driven pickup trucks now for I don't know how long and I bought a 2026 Chevrolet Silverado diesel so I was blown away with the fuel mileage. And it has that technology built into it. Okay that's cool. It does. Wow. It does but in the city I'm getting 25 miles per gallon on our road I'm getting between 35 and 50. Wow that's like the old days back when before they had the catalytic converters in the car. Exactly exactly. Wow that's amazing. Yeah but it does have that technology and and it's it's really awesome from that perspective because it does save you time as

11:54 well. But we are so going to see now I'm not going to tell you this is in two years in fact my prediction on this is we're going to start to see it major metropolitan areas probably in eight to ten years. Okay. But you're going to start to see traffic lights get smaller or be removed overall and that's where we're going to start to see technology migrated into vehicles that are predictive as cars enter intersections. They know what cars are coming what direction and literally they're going to thread those cars together. And so if you happen to think about traffic moving without having to stop it changes fuel mileage issues pollution gets you from your point a to point b more quickly.

12:40 But I'll tell you what the first time we do that I don't know how I'm going to feel about that one. Yeah I'm not going to look. Close your eyes. Some people are doing that now anyway. Yeah oh I know. Well you know they call that the zipper the zipper merge and that's like when people are merging in you're supposed to like one car merges in the other one lets it go they like every other car that's a zipper and that's what you're talking about is no wasted space that's how you're supposed to merge into traffic even though there's that one person that tries to cut in front of everybody it makes everybody mad. I was here first. Then they jam on their brakes and it backs up things right. Yeah yeah yeah yeah and so then road rage happens and all that stuff. We are going to see we are going to see driver-based cars go away and a lot of people don't believe that but it's the insurance companies that are pushing it. Right now you know you hear about accidents that are from automated or autonomous

13:32 vehicles but right now today and the technology is about is evolving rapidly they are a hundred times better at driving and having fewer accidents than the best human that they compare to. Okay. Now you tell me what that does to insurance companies and everything else. Well it will be here. But to me insurance companies then should charge a hundred times less but they won't. Exactly. Because I don't know why they're mouthing off because they make a fortune charging people all sorts of rates when like if my neighbor has a wreck I get I get charged more you know that kind of thing. That's exactly right. To me they better be careful what they wish for they're going to do that FAFO kind of stuff and they're going to be out they're going to be out of business when no one's having any wrecks. Yeah. Won't need insurance. That's good. Yeah. The next thing related to these automated vehicles. Yeah I wasn't either.

14:21 In today's age if you don't know it go look it up. Ask your AI. Yeah really. That's it. That would be an interesting conversation. But you know in addition to that as we start to see that assistive technology in cars and autonomous vehicles you know I don't know about your vehicle mine should idle most of the time probably 95 percent of the time. Yeah. And I figure I drive a fair amount but it's still suicidal most of the time. So what we're going to start to see is shared vehicle services where when you want to go somewhere it shows up and takes you there and you know then it drops you off and goes and gets somebody else but you won't have to really wait. Yeah. But that's not that far down the

15:11 road either. No. We did a movie with a guy named Peter Diamandis back in the day. Him and Elon Musk and Richard Branson were the X Prize people where they had the X Prize with for the I think it was a five million dollar prize for the first person that could launch a rocket have it go around earth once and then come down and land safely. And I think Elon Musk won that award. But Peter said. And now he's doing it right. Yeah. But Peter told me back then this was like 10 years ago he said there'll be a time where you won't own a car and you won't even need garages anymore. And basically you just when you're ready to get picked up you press a button. Sort of like Uber and Lyft do now. But it'd be even better. And it's just amazing to think about it. And it's coming but it's certain people I kind of like the freedom of being able to just get in the car and drive. So if I'm in a bad mood I get in the car and drive around listening to some tunes every now and then. I guess you won't be able to do that. Maybe get in a simulated car and not even go anywhere. Well then maybe that'll be the case. But yeah.

16:01 But yeah I mean think about that you know when we get assistive AI in the home. Right. Obviously if you're getting ready it's easy for a technology like this to determine that. Yeah. And it's looked at your schedule right. It probably has a very good idea of when you're going. In fact you might even get reminders to tell you hey you need to step it up or you're going to be late. Yeah. And you walk out and the car's already there. You didn't even order it. So you know. So you know. It's almost I mean it sounds cool and it's great for technology in the future and all that. But I kind of like the freedom of doing what I want to do whenever I want to do it. I think we're going to have to overcome that with the more of a automated and structured society going forward it looks like. Well the technologists have been that this is one of the issues that

16:47 technologists and psychologists have been analyzing. Interesting. Because especially in the American culture driving is a rite of passage. Right. Yep. Getting your driver's license. It's a big deal. It is. Well guess what. You don't need a driver's license anymore if that's the case. Right. You'll just need an. Yeah. You'll just need an ID. Yeah. But. But yeah there are there are shifts like that that are going to occur. But right now the thinking is is it's going to open you up to some things that you've always wanted to do but you didn't have the time to do. Yeah you're right. Um and so you know like you said you might want to cruise around and listen to tunes. Well now maybe you want to cruise around and just look at the sunset driving down the beach or going through the mountains or in the countryside where you're not driving and you don't have to pay attention to

17:35 the road. Well um and oh guess what now you could have the bottle of wine open right because there's no more open container restrictions. It's almost like being in a limo all the time. There could be a lot of things. You know Thomas has a Tesla. That's right. Thomas has the you have that what do you call it on your Tesla where you don't have to drive anymore. Full self-driving. And you do that right. I do. Yes. So he just basically chills on the way home now. You don't have to have your hands on a steering wheel or anything right. Do you still watch every now and then. I do watch just because uh as we've said assisted uh intelligence as opposed to. Yeah. Yeah. Yeah. Still don't trust it. Still don't trust it. Trust but verify. There you go. There you go. No but it's getting good. It's getting good every year a little bit more. Well now I've caught you. I've kept you a little longer than I wanted to because uh we were against a clock but uh but I really appreciate your time and and I mean I think we should keep in contact. Maybe you have your AI

18:21 contact our AI when something big happens. Yeah well you know what we didn't talk about printed human organs and I'm really. Let's talk about that. Let's talk about that. Here because I like like 15 or 20 years ago I invested in a company called Orgagenics and they were going to print body parts out and I lost all that money because it never did anything but again I was ahead of I think I was ahead of the curve on that because it makes a lot of sense using a little of your DNA you can print out a new liver so you can drink all you want there in your driver's car you can drink all the time now. There you go yeah well they started printing and I don't know because I've seen you at CES I believe once or twice. Yes we did. Or we talked in passing there. Yep. But they've been printing food 3D printed food for a while now and a lot of critics are saying you know what they've gotten to the point that you

19:07 really can't tell the difference. Wow. So now they're starting to print skin for example. Yeah. So if you've got a bad burn or something you need a skin graft no problem. It's amazing. Blood vessels from your own DNA technology they are working on right now and they think they're less than a few years away from hearts and kidneys. Wow. Now heart's a big muscle and a kidney is a big filtering organ vastly different but they think that they're probably going to be able to enter clinical trials trials I can't say that trials in less than two years. What's that guy? Maybe I have too much to drink I don't know. Hannibal Lecter like he liked like with a Keontae liver. Kidney and fava beans. So they can print him out some kidney seed now so there's food for him right? Yeah and then he doesn't even have to kill people

19:52 anymore to get it right. Or he can just get the ones they take out of people it's all been marinated in the body for a while. So this is amazing though. This is amazing to me. The skin thing is a big thing for burn victims though because usually they never recover like the skin always looked bad. Now you can just peel off the bad skin and put they'll put new skin on. It's amazing. Yeah. Yeah. The skin grafts have they're in the marketplace now. Wow. So if you know that you've got something coming up that needs a skin graft they could grow the new skin and and it's not rejected. Amazing. You know it's your DNA. So yeah that is probably to me one of the most exciting things that that really has been progressing well and was a huge big hit at CES. Longivity you'll go up tremendously if you can just print a new heart outfit instead of getting a pacemaker or you know anything like that. I mean just put a new one in.

20:38 That's yours and it won't be rejected because your body will think it's the same one. Uh if we deal with brain aging problems uh guess what but that that's going to be a big big deal. It's I mean that's that is that is a Thomas what do you think about that it's pretty amazing. It is amazing it's uh the words aren't coming to me because it does it can extend so you coach we talk about live to 121 and beyond talk about beyond. Yeah that's important of lifetime income now because lifetime could be even longer insurance companies be mad about that too. Yeah really really. So uh but have you have you yourself Niall have you have you ever eaten uh 3d printed food and known about it before or you eat it and then someone told you afterwards or have you ever had it to begin with? Uh yes I have I did that probably and I'm trying to think it was four or five years ago at CES and and what they did was they gave you an AB a taste comparison can you tell the difference?

21:24 And could and you couldn't? I couldn't. And what was it steak? Um they I I believe they gave me salmon um they gave me hamburger which is easy uh but you know they gave me hamburger and then they gave me some vegetable I don't know if it was zucchini or I wouldn't have been broccoli because I wouldn't have eaten it but um they gave me a couple of things and and quite frankly I I couldn't tell the difference uh the salmon had a slightly different texture but it tasted like salmon. Wow and how about the ground beef uh it's same exactly? Ground beef tastes identical identical um interesting but you know what what they're doing with beyond burger and things like that where they're doing plant-based meats now yeah they've got those to the the point where they're hard to tell the difference quite frankly. It's just amazing I mean uh I mean I guess we're living through a new

22:13 generation generational shifts going on here like uh when they when the horse and buggy was replaced by a car that's about the kind of you know the phone and electricity all that kind of stuff we're seeing that right now on a broader and uh more advanced scale think about it. Yeah well we we talked about AI obviously at the beginning of the segment here but you know we didn't talk about where it's going because AI is just the first step. Generative AI is where it goes next and that's where the AI starts to think for itself and gives you recommendations that maybe you didn't even think about. And this is where we get into 2001 the space odyssey when Hal decided he didn't need the humans anymore so we have to be careful about how much we got them think right? That gets to be the scary part. It is and the Terminator remember the movie Terminator that's when the machines took over they didn't need the humans anymore so we need to make sure we let them know

23:01 that they always need us somehow and plant that into their DNA they always need us friendly humans here. Well we didn't go down talking about some of the robotics because that gets AI and it takes it to a different level so we'll talk about that sometime in the future. Well I mean do you want to I mean I've got five more minutes you do you want to get time I mean the robotics thing it's just so many interesting things I just didn't I didn't know where to even start talking about it here but I mean all right let's talk about the robotics real quick what do you what are you thinking there? So we are starting to see humanoid robotics and the real progress has come out of Japan. Japan has a major health care issue with older folks right for a number of reasons and and so they started working heavily on robotic technology about 15 years ago that was a

23:50 system in health care and one of the things that they found out pretty quickly was the robots did a much better job with the care than the humans did because the patient could be as grouchy as insulting or anything else as they wanted to be and the robot doesn't have a an emotional response right? I hear you. Uh so but what they found was in order to get the human to engage with the robot they had to put a face on the robot and the more human like they made the face the more humans engaged with it well it got to the point even in its infancy with faces that sort of looked human they weren't great um that the health care patients one of the robots instead of the humans uh so guess what they solved the problem

24:42 fast forward to ces 2026 to demonstrate how mobile and agile these humanoid robots were they had a martial arts an mma if you will of two robots fighting now that means they're trying to knock each other over they're not getting up like rock'em stock'em robots except unprogrammed wow and it what it did was it demonstrated exactly how agile the robots are how well they could move and then take a step over to the next booth and you've got robots that are lifting 600 a thousand pounds moving it around in a in a warehouse type setting move over to the next booth and they've got an exoskeleton that you could

25:30 strap on for people that are quadriplegic or paraplegic that does the brain or eye connections to be assistive technology and allow you to move around without a wheelchair or anything like that sort of like robo cop back in the day remember the cop was basically killed and they brought him back and he's put the exoskeleton around him it's amazing how hollywood hollywood is ahead of uh science or science is ahead of hollywood it's like that kind of thing if science follows hollywood sometimes it does by the way those things were all available and demonstrated at the ef this year it's not we're not talking about future technology we're talking about do you want it would you like it delivered you know next week next month or or whatever so what's the price on something like if you wanted to one of those robots to like lift weight lift like move stuff for you and work in a warehouse i guess like 30 000

26:22 well it really varies they start at the low end uh about six to ten thousand dollars for the the home assistive robots that do your house cleaning and can do some cooking and things like that um so low in there but they'll go up to well over a hundred thousand dollars depending on what you want and you know you could take that as far as you want to take it because they have robots that do what you might imagine they might do and that's a porn convention exactly in fact they walked from one booth to the other to go to that convention and as a matter of fact the uh the sex technology uh at ces has actually become about 20 of the ces floor these days sex sells man i'm telling you you know i'd like a big technology emerald gazi chef robot and

27:12 he'd like say bam and then bring my food to me you know like uh remember yeah right chef ramsey one that's cussing in the kitchen and bringing a good food beef wellington from grow program it any way you want to it's just amazing man you know it's also worrisome at the same time because a lot of careers are in jeopardy now when when these robots can do such a great job uh and all you do is i guess how long do you have to plug them in or how long does like one of these robots go without a charge and how long does it take to charge them coach pete oh man i'm shaking my head now no they they decide when they need to be charged based on what they see the workload to be and they just they take the break if you will and go charge them so okay um avid do they need to do a fast charge or you know can they shut down for the night because you're not going to need them for the next four to six to 12 hours

27:58 so if they charge too fast does it become a smoking break a smoking break well good that's a good one i like that there you go thomas wait we got to give you one of these wrong batteries and we've got that problem right well man we're going down all sorts of rabbit holes here with all this stuff it's amazing it really is amazing we're in a we're in a amazing time of uh basically history think about it it's i mean gosh they'll talk about this like they did the roman agents uh 3 000 years from now i think you know if we're still around i agree i agree and some of us may be yeah i can't i can't imagine trying to think you know we we talk in here really we talk short term maybe five to ten years right i can't imagine where this is in in 25 to 30 years i really can't um it's progressing faster than the human imagination can really keep

28:50 up with it yeah and imagination drives this stuff by the way well of course i mean you think about all the stuff you mentioned it's just amazing i mean it's i never even thought you could have a robot do you know back in the day a robot would just like gone lost in space warning mr you know that kind of thing but now the robots are more agile than we are crazy yeah and and by the way they've improved that face technology like we were talking about with recognizing emotions uh being able to have more facial emotions with the eyes the mouth the everything and uh you know they've gotten to the point where if you just do a quick glass and glance and passing you won't know that it's a robot they're that good but remember there was a movie probably about 25 or 30 years ago michael keaton it was dupe duplicity or something where you may invented like five or six robots that look just like him so basically he

29:39 just sat home and he sent them out to work and do all the hard stuff and he took all the credit made all the money and then the then the robots started getting mad at him though they they started getting smart on him you remember that movie ganging up on him yeah what if what if we could just invent a bunch of coach peets and send them out all over the place i only have one question yes sir is the world ready for that i don't think so give him some time give him some time uh folks his name is nile nickel and uh what a fascinating conversation nile we're gonna we're gonna air this uh we're gonna put this on our financial speakeasy network too we're gonna put some good video behind this as well so uh we're gonna air this on radio and uh have this everywhere because it's just amazing what what your imagination after listening to this i mean you could spend some time talking to your get it to come up with more ideas probably well yeah and by the way we didn't even talk about

30:29 setting your ai voices to whatever voice you want do you want a male voice a female voice do you want it to have an accent do you want to train it on somebody my wife doesn't like my grok voice right now she says it's too sexy and she wants me to change it too so you're too sexy for your voice i'm not gonna go there either and well nile thanks for your time today and uh yeah let's uh thomas let's make sure nile gets a copy of this but let's let's make sure to stay in touch now maybe every three or four months we need to talk about some advances if anything really big comes we need to talk about that as well well it's always exciting and i always enjoy the time like our personal meetings when we meet on the road but it's been a little while so we'll have to figure it out where that is the next time maybe we can meet next year or the year after at ces because i haven't been in a couple years so i need to you need to go this year i don't think we need to get there and see what's

31:14 going on man it's a lot of things are changing yeah a lot of things are changing absolutely well listen it has been a pleasure i hope it's been enlightening for everybody yes sir well you take care and we'll be in touch soon i'll nickel folks take care

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome back into the Financial Safari, having a great conversation here with bestselling author Coach Pete D’Arruda, as well as NHL Hall of Fame broadcaster Chuck Kaiton, former voice of the Carolina Hurricanes, also in studio with us is the voice of the Wolfpack, Tony Haynes. I'm consumer advocate Thomas Lipscomb. If you want to catch up on this conversation that we're having, just head over to FinancialSafari.com. Again, that's FinancialSafari.com. By the way, we got a great video there where Coach Pete is interviewing one of his friends who just went to CES 2026. You can see how robots can fold your clothes, flying cars, all sorts of crazy crap that's going on out there. His name is Joe Casey. He was an MIT grad, and he went to Ohio State and then MIT. So he's a pretty smart guy, and it was amazing to hear how fascinated he is.

00:45 He's a tech guy, but he was fascinated with what he saw at CES. It was about a 40-minute interview, and you can watch it and listen to it. It's about FinancialSafari.com. It's also, if you just want to listen to it, it's like CoachListens.com. That's correct. That's correct. It's such a great website and great interview at the end of the day. Again, flying cars, robots that fold your clothes. What can you not want, right, guys? I mean, it's just amazing to be able to talk to people like that, and it's amazing to have both of you guys in the studio. I mean, people that are listening, they've heard you on the radio for years and years. Carolina Hurricanes, if you ever listened to Hurricanes, the game on the radio, Chuck Kaiton was doing the game. Matter of fact, I recognized his voice one time. I didn't know what he looked like, but I heard his voice at a golf tournament. We were in the 18th hole little, what do you call that thing? The 19th hole. Yeah, the box. Yeah, the box. Yeah, the sky box. We were watching a golf tournament, and I just heard this voice bellowing

01:31 from the other side of the box. Nice. I went over, I said, you're Chuck Kaiton. You're Coach Pete. And I didn't get into any trouble because nobody was putting at the time I was talking. So that was good news. They used to do the quiet sign. They'd be waving all over the place. And then, wow, Tony. I mean, it seems like just yesterday I was listening to you do the Wolfpack games on the radio. Well, it was a little bit almost yesterday. I'm only a month into retirement. And what's different about this month? No more paychecks. Well, the paychecks have to come from you. That's right. Their own personal pension, basically. You have to set it up correctly. That's why I'm sitting here. And make sure to, yeah. And it's scary, but it's not complex if you do the right thing. And unfortunately, people wait until the last minute. They start making impulsive decisions and do the wrong thing. So it's important to plan it out, sort of like a game plan. And we're talking about your retirement. You're basically in the first quarter of retirement.

02:16 We've got a four-quarter game, at least. We need to make sure that money lasts longer than you do, not runs away when you're still here. All right. Well, speaking of that, before we get to Chuck's real fun questions, here's mine. Most of my money is tied up in a traditional IRA. Right. I'm at the point now where I have to look at different options. Maybe rolling over part of it anyway to a Roth IRA or annuities or something else. What should be my strategy at this point? A good time to roll to a Roth is when you don't have much income. If you don't have much income, you don't have to pay many taxes. You're in a better position than if you have a bunch of income. And many people can't even qualify for a Roth if they have a lot of income. So there's backdoor IRA options, too, to get a backdoor Roth, it's called. But you're in a good position now to look at how much you still got to pay taxes when you roll it from a traditional IRA or 401K into a Roth.

03:03 So we have to see, well, what's the break-even point? How many years will we have to go now that you have to make up for the taxes you just paid in a lump sum to move that money over? And we do that side-by-side comparison. It makes sense. One thing we can't control is how high taxes are going to go in the future. We don't know what they're going to be tomorrow, much less next year, next decade. And I think it's real important what you said. Coach, when you talk about a Roth conversion as opposed to a contribution is what you're saying. And we had to do that in 2019. We bit the bullet and did the taxes. But we love it now because we have that Roth and both my wife and I have it. You don't have to worry about taxes anymore. Basically, you isolated. You put an offensive line around there that can never – like they protect that quarterback forever. Right. You're never going to get to that money. The IRS can't because you've already fulfilled what they told you how to do.

03:51 Yeah. So that's important for you. Your point was well taken because I did it well after I left the hurricane. So I didn't have to worry about added income. Yeah. And that sometimes throws a wrench in the play and makes it less advantageous than now when you don't have any income. Exactly. You see how savvy Coach is? He uses sports analogies so we can understand what he's saying. I hear you. Well, I love sports too. Offensive line. I mean, Coach beat offensive line. What's important, like you see how powerful and how important a good offensive line is when you don't have a good one. That's right. So when you watch a team consistently getting sacked or if you have a planner who keeps fumbling your retirement, then you're in wrong place. That's true. You don't have to be in a place like that. Great question, Tony. And then also maximizing Social Security, what you're entitled to. Make sure you claim it at the right time. I'm about to start that. Yeah. And then your MRDs later on start taking some money out that the government makes you take out.

04:38 Chuck, you kind of like that MRD because it gives you suspended money every year. That RMD, I mean, yeah, I guess so. I mean, it's, again, one of those bittersweet things. We have to pay taxes because we were, you know, in a situation where we deferred them for a long time. In my case, 30 years of it. So time to pay the piper. But you do it with the strategies that you're talking about here at Capital Financial and the people that help me through it. Yep. We minimize those. We mitigate those taxes. And we also have that lifetime income that you're talking about. And right now I just set up a plan, not only getting the RMD in January because I put that money into a savings account, but now I'm going to start taking money every month. Like you say, that lifetime income. And I'm going to actually turn that faucet on starting in a couple of months.

05:25 That's good. I mean, that's just another stream of income coming in. Absolutely. And so with the IRS, it's either pay me now or pay me later. They're going to get their money. The beautiful thing there, the money you did convert to a Roth, you don't have MRDs on there. You don't have to take any money out of the Roth unless you want to. That's a beautiful thing, too. So it puts you more, Tony, it's all about putting you in control and staying in control, sort of like a driverless car that you're in control of. But you basically have the comfort and safety of having a driverless car. You're never going to get me in one of those. I saw that in the video, but I'm not sure I'm ready to get in that. I don't think our generation is going to be good with driverless cars. I guess I, you know, my nephew in San Francisco took one of those cabs, driverless, and he left his wallet in there by accident. Nobody left to find it. No. Right.

06:11 The next person in there got a windfall. That next person was so honest that they looked at his identification. He had a couple hundred bucks in there along with his credit cards. And the other money again, the wallet came back. And the guy traced him back to the next passenger and gave him his wallet back. There aren't many people like that these days, unfortunately. That's a good American. That's good. Now that you drop a credit card, it's being used within five minutes. Yeah, it really does. Yeah, true story. That was my story. That's amazing. Pretty cool. So it's about automatic pilot, making sure you have your total retirement plan in place when you get to retirement or right after. You don't have one yet, Tony, but at least you're smart enough to be thinking about things like that. And it's important for everybody to at least have a plan in mind. You don't have to have the plan done. Have it in mind. So, Thomas, folks that are listening now, if they have a plan in mind or they want to get a plan.

06:59 And so folks have asked me, well, Coach, when's a good time for us to call, like age-wise? And I always say when you're in that financial red zone, which is age 50 and above, it's time to start mapping out, getting your ducks in a row, mapping out what you have already put aside, looking at maybe Roth conversion strategies, looking at tax reduction strategies. So it is never a bad time, but 50 or older, that's when you're in the ultimate time to get everything organized right. And so if you call right now, we'll help you get that organized. We have an organizer that will help you get organized, and we'll do it all for you at no cost or obligation. If you call right now, we'll introduce you to the firm and make sure that you get comfortable with us, just like we get comfortable with you, and put a plan together that will take you all the way through retirement with no worries on the safe side at all. It's true. Lifetime income. So tell folks how to get that. The next 26 of you call, we'll let you come in, and we'll give you three of the books I've written, and we'll give you a plan.

07:49 It's a golden ticket. It's worth over $1,000. Call right now. All right, folks. You may be sitting on the edge. Remember, the average investor underperforms the market by over 4% a year simply to emotional trading. And we don't want to worry about emotion. We want to worry about the process. We want to develop the plan. The number to call, take advantage of this. 800-661-7383. 800-661-7383. Or you can text keyword plan to 600-700. That is plan to 600-700. Coach, you were talking about running plans earlier. And I'm a soccer guy, so I go back to Germany when they were. Football! Yes. But the German national team, when they were playing the World Cup, and this has been several years back now, you could just see them executing plans as if it was nothing. They would just walk out onto the field.

08:35 It didn't matter if it was, you know, if it was Spain or Holland or France or whoever they were going against. It was a... And granted, they didn't win the series in this instance. But you could tell they had that plan and they were driving. And I think you guys see this. Chuck, I'm sure you see this with Brenda Moore, process over emotion. Well, that's what makes him a great coach because he doesn't vary or vacillate away from the plan, the team. You know, we talk about the team here at Capital Financial. The team comes first. And how you contribute to that team. And it's the same thing in basketball and football, as Tony could tell you. And that's what makes him a special guy with the Hurricanes. You're pretty close to Rod still, right? Oh, absolutely. You just had dinner with him the other night, I think, didn't you? Yeah, I had it with him. What's his favorite meal? Oh, my God.

09:20 You're not going to believe this. He actually, you know, he's the most fit 52-year-old. Well, he's the most fit coach in the NHL, easily, because he still works out like a maniac. Good for him. But he did have hamburger and french fries. I hope I'm not breaking his cover. But he does. Let's go. He eats like normal or obese people like myself. Well, if you're working out all the time, though, it's good. He needs some carbs in here to work out. I thought you said he likes sushi, too, right? Yeah, he does like it. But the bottom line to me is that he'll go off the wagon, so to speak, once in a while. Well, you've got to cheat on a diet every now and then. Especially in the summertime, you know, when he's not stressed out as much. So he'll eat pretty big, but he'll work for two or three hours, work out. Wow. He's a terrific guy, and he's done a great job.

10:08 It's all about balance. Never in my life did I have a workout for two hours. Even when I was in good shape. I know. He's crazy, but he's obsessed. He loves it. Try to maximize the workout time in 30 minutes, get all the stuff done. Tony, what's your favorite food? Oh, goodness. You know, I've always been fond of Italian food. I had a really good chicken parm last night, if that's done right. Spectacular. The power of advertising. Anytime anyone says chicken parm, who do I think of these days? Ray Ferraro. Oh, that's who I think of. Peyton Manning. Oh, yeah. Remember, he would do the chicken parm all the time. The commercials would always happen. Well, he does great commercials, too. He does. You know, I mix it up, though. I think I have a very diverse taste in food. Most recently, I made a salmon piccata at home. You like to cook? Yeah, I do.

10:54 Nice. People customarily like a chicken piccata. Chicken piccata. I watch a lot of YouTube videos, yours included, but many of them are chefs, and you get these great ideas for recipes. That's pretty cool. So I just made the piccata sauce, but over salmon, it was spectacular. We need to have maybe a recipe show on our Financial Speakeasy network, Thomas. That would be very cool. By the way, folks, we have a 24-7 video network on YouTube and Rumble. It's called Financial Speakeasy. So all you have to do is go to YouTube and say, put in there for the search bar, Financial Speakeasy, or go to FinancialSpeakeasy.com, and it'll take you right to the choice between YouTube and Rumble. It is easy. It's easy. And it's such great content on there. We also have the interview with Joe Casey about CES 2026 on there. We go live every weekday with new stock just happenings and things happening in the business

11:39 world. Great channels. We've got a bucket list show coming. Morgan Patrick's going to be doing that. Maybe get Tony on there about bucket list items, too. That's always fun to do. Chuck will be good on there, too. Yeah, thank you. I would love to help you. Well, we've got to run away, and I know you guys are both out of here after this, so I want to thank Tony Hayes and Chuck Kaiton for coming in and visiting with us on the Safari. And folks, we'll be right back after this.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome back into the program. Coming up, we're joined by Joe Casey, who just got back from CES 2026 in studio with me. Consumer advocate Thomas Lipscomb is America's wealth coach and best-selling author, Coach Pete D’Arruda. Thomas, what do we do on our show? We define our terms. Yes, what is CES? Oh, please don't. Joe, can you help me? Consumer Electronics Show, Thomas. That's right. That's absolutely right. Consumer Electronics Show, where they show all the neat stuff that's coming up that you can't afford. Yeah, exactly. And they tease you because a lot of this stuff's not available yet, probably. But I didn't go, and it's been a long time since I went to CES, probably about 10 years, a decade. But back when I was growing up, my dad had computer stores, and we would go to a show once a year in Atlanta and Vegas called Comdex.

00:47 It was a show with all the new computer stuff that was coming up. Nice. I was geeking out there. But, Joe, how was the event? Was it worthwhile attending? Absolutely. The event was eye-opening. And, you know, I thoroughly enjoyed it. Saw a lot of cool stuff. I mean, just like you said, stuff that's not available yet, but is coming. And got to play off a few gadgets. And, you know, some of the things, and, of course, I won't get into it just yet, but some of the stuff that I just walked out of the CES show and said, you know what, I understand AI now much, much better. Well, yeah, right now it's just basically a Google on steroids is what AI is for most people. But what do you see AI becoming here in the next, let's say, five years and a decade?

01:34 Well, I see it really being a game changer. You know, when you look back at the Internet and when the Internet came out, it gave such usability. It gave companies a way to scale. And you see companies today coming online. I kind of like to look at it like, you know, like Starbucks. Those are what I call atom companies. Those are companies that have to have thousands of stores to, you know, service millions of customers, right? Well, today, AI, you're able to deploy very, very sophisticated software using a cloud base. And companies are able to scale like nothing you've ever seen. I mean, they can go to these billion-dollar valuations literally in a very, very short period of time.

02:21 And just to hear about what AI is becoming and what it is, it just opened my eyes. This year was fantastic. So when you're a startup company, one of the main problems is finding enough people to help you get to become a big company. So I think AI can eliminate that need for a lot of employees, can't it? Absolutely. Absolutely. And, you know, when you look at AI's, the trajectory of AI, and of course, I'm guilty of just using it for, like you said, Google on steroids, going to chat GPT and asking, you know, can you reword this letter for me? Yeah. And, you know, that's just the way I've used it. But there's so much more application when it comes to AI. So who were the big attendees, like who had the biggest booth there at the CES? I would say NVIDIA probably had the biggest display.

03:09 Okay. They had all of their robots and cars. And probably the most interesting thing that I saw, which I saw a lot of interesting things, was the Tensor. I don't know if you've heard of that name before, but Tensor has a robo car that you're going to be able to buy. And this is an autonomous, a Gen Tech type of AI that basically the steering wheel disappears, the foot pedals disappear, and this thing takes you to where you're going. And it was absolutely mind-boggling to watch this. It was just like out of a sci-fi movie. So do you get in the car and you see the steering wheel and the gas pedals and they disappear in front of you? Or do you mean they're not even there to begin with? No, no. They're there. You can drive. Oh, okay. And then when the car takes over, the steering wheel pulls into the dashboard, a screen goes over, the pedals disappear into the floor.

04:00 And that way the driver can't, you can't do anything. Yeah. You just sit back and enjoy. Keeps user error from happening. That reminds me of the movie iRobot with Will Smith and the police were coming after him and the whole car basically could shut itself down. Yeah. What was that show, the movies that the kids liked with the Transformers? Yeah. Where things were turning into different things right in front of you, right? Yeah, totally. Wow. That's pretty cool. Did they have rides available in that car or was it just a display thing? You know, they had it displayed in the Fountain Blue Hotel, and I'm sure at some point, you know, certain folks probably could take a test ride. But it wasn't there for me to do the test ride. I'd love to have done it, but it was in the hotel. You could get in it. You could check it all out.

04:45 It was amazing. The Fountain Blue is an amazing hotel over there. It's a gigantic place. It's a gigantic place. Exactly. You know, I have an office in Vegas, so after work that day, I went over to Capitol Grill, which is right across from, like, Wynn and all the, like, where all a lot of stuff was going on. And in the bar, I looked around the restaurant. I didn't see a single woman in that restaurant. It was all techie kind of guys, so that explains it. It looked like a bunch of NVIDIA guys in there at Capitol Grill. Well, that would explain it for sure. Now, NVIDIA had probably a big display, too, right, because they're a big AI company with the chips. Oh, yeah. Yeah, they had, you know, some of their servers out there. They had some of their robots. They had some video of, you know, futuristic goals that they're pressing toward.

05:33 And, you know, just a huge display. All right. So autonomous cars, that's what I think about the future. You know, that would not have surprised me when I go to CES because you see the futuristic things like that, a lot of AI stuff. What really surprised you? Like, you weren't expecting to see at CES this year. Well, I would say, you know, obviously, AI was going to be there, no doubt. Oh, yeah. But probably the thing that it wasn't, I guess it wasn't so much of what I saw. It was the impression that I took away. And it was like embracing AI as more of a platform that you put in your business, that you put to work in your life.

06:19 That was probably the greatest thing that I took away. Probably the coolest things that I saw was the RoboCar. That was off the chart. A lot of the smart glasses. I don't know if you've ever tried those, but the smart glasses, especially if I was a retiree, I'm 52, the smart glasses is going to be a game changer. If I was a retiree, you know, 60, 65, I'll tell you right now, I would 100% get these smart glasses because they're freaking amazing. I don't know if you've ever tried any. Well, if you haven't. I bought them twice and never used them. I got the first generation, and then I just got the, well, I didn't buy the second one. I got it as a gift at Christmas time, but I haven't ever used them. But I have seen online, there are some, like, non-name brand smart glasses.

07:07 You know, you get these ads on Facebook all the time. One would translate for you. One would tape every single minute of your day just in case you forgot what was going on, which, again, is good for people as we get older, we forget things. So you can't say you don't remember anymore. So you just look at it through the glasses and say, hey, remind me of what this looks like. So I don't know. I kind of like playing dumb sometimes. For sure. Not going to be able to do that anymore. Check. All right. Personal robots. Go ahead. Sorry. I was going to say another thing I saw that was good because I brush my teeth. I know it's kind of corny. But I brush my teeth. I floss. But I hate doing it. But I still do it two times a day. And they had toothbrushes there that you were able to brush and floss at the same time.

07:54 And so it was made by company Soccas. I believe. S-O-C-C-A-S. And check that out if you ever get a chance. It was really, really cool. C-C-A-S. S-O-O-C-A-S. Yeah. I can't pronounce it. Now, that's pretty funny because, I mean, in order to, because there's a gap between your teeth, that's where the floss has to go. So how does it know that? Does it have a camera built into the toothbrush? Well, it has a water. It has a water spout on it. Okay. Yep. That it shoots the water between your teeth. Okay. Well, I have one of those things that squirts water into whatever you call it. Water pick. Water pick. Yeah. Water pick. And when I used to use it, I would never have cavities.

08:40 So it really worked. I have to go to the dentist tomorrow. Well, I was really impressed. You've got the brush and you've got the water pick all in one. And I'm definitely going to get me one of those and try them out. Yeah. Well, that makes sense. I thought you were going to say you just put it in your mouth and it brushes your teeth for you and then you spit it out when you're done. That's the next generation. Nanobots going in and just doing their job for a few seconds. Now, speaking of bots, what kind of personal robots did you see? Well, you know, they had robots folding clothes. They had them moving dishes around in the kitchens. And so a lot of, you know, homemaking type robots that I found very cool because, you know, most of the ones you see are the ones that's, you know, sweeping up the floor. Yeah. And, you know, the little black thing running around.

09:27 We have a couple of those here. We have a couple of those here. You know, I think of when you talk about folding clothes, I think about the Jetsons. Rosie. Rosie was a little maid robot. And so one thing I hate doing is laundry, but I do my own laundry and I really hate folding. So that would be, I would buy a robot today if they would get promised to fold my clothes and hang them. Well, it was a little slow, but I could see over some time that the technology is really, really going to emerge. Now, I met the new owner of Napster while I was there. And, you know, Napster, you know, you remember from the 90s. Yeah, a long time ago. Yep. This guy, he bought the Napster company and he now, that program now, you can use it for

10:12 like young artists. Any artist could use it. And basically, it will take your music that you're making and license it. I mean, it does the whole thing for you. It's really, it's something you probably should check out at some time. That's pretty neat. You know, I remember Napster. I mean, that was the first place I got free music from back in the day. Exactly. That was me too. Yep. Me too. That's great. It's the whole industry and the industry has not stopped since then, really. That's true. How about new players? I mean, like Napster's a new player from an old name, but what about the new ones that are coming that are like, all right, so we got the robots, we got the cars. Oh, Thomas wanted to ask about TVs. Oh, yeah, yeah, yeah. So, I saw an announcement that, and I'm not sure the brand, it might have been LG, but they did a wallpaper television that was less than a centimeter thin.

11:01 Did you see that? Yeah. Yes, yes, that was really cool. I took a bunch of pictures, got some info, and that's something that I'm very interested in purchasing. Yeah, that's pretty amazing, isn't it? I mean, the technology. Absolutely. And there were several different brands there. You know, they had some from China, some various places, but yeah, your major TV brands were there. They had their displays, but the TV, I mean, that screen was super, I mean, you could literally glue it to the wall. Wow. It was crazy. What do you think the price point for something like that's, I guess, a good, the size? What about a 50-inch one of those? What do you think those are going to go for? You know, it's going to be hard to say, but I would say at least, at least, probably you're

11:46 in the lower thousands at this point. Wow. But that stuff will come down quickly as more competitors emerge. You know, we just ordered 200-inch ones for our new auditorium we have on our third floor, and one of them was cracked when we got it, but we didn't know it until we opened it four months later. Well, now you're going to be able to get just these panels and just lay them out across the wall wherever you want. That's amazing, isn't it? It's true, though. It's amazing. Yeah. Well, we grew up with the big, fat TVs. Remember how heavy those were? Oh, yeah. The 32-inch one was gigantic, and it took two guys to move it. Yeah, yeah. Crazy. The tube. Remember the big tube? So we got rid of the tubes, and we had plasma. I mean, I haven't heard the word plasma TV in forever, have you? I mean, those are the big things that never really came.

12:32 Sort of like Blu-ray. Remember, Blu-ray was out, then it was gone. Yeah, that's true. I mean, it's funny how fast things change. I mean, I grew up in, I missed eight-track cassettes, but I had regular cassette. That's what Columbia House was nice enough to send me a bunch of times. The cassette tapes. I still got my collection. I've got a big old tote tray full of them. Nice. So how big was this? Did they have it in the convention center, and they're already spread out to different hotels, or did they have it all over different hotels? That was a little overwhelming. You had several of the convention halls set up, and then they had five of the major hotels. They had speakers and panelists off and on all day long. I thoroughly enjoyed listening to some of the panelists talk, and just hearing some of the techie guys

13:21 and some Hollywood producers and CEOs, just hearing them all collaborate together was very powerful. Well, you know, Hollywood's not going to have to have these gigantic scenes anymore. They're not going to have to pay a whole bunch of people. They'll just have it all in CG. Well, something more advanced than CGI, but they'll be able to do it all on a computer. Sort of like Game of Thrones. Game of Thrones did a lot of that, by the way, too. They did a lot of the graphics added on. One of the gentlemen from Warner Brothers, he was talking about that. I don't know if you know this yet, but they're coming out with a Barbie 2. That's what he said, that they're making the Barbie 2 movie, and it's going to have some of these effects and all this stuff in it, and it's going to be really, really good. Pretty amazing. Now, tell folks, you're not just a normal person that's going to CES. You've got a pretty big tech background. Where'd you go to college? Well, I went to Ohio State, and I've attended MIT, and I love tech.

14:11 I love digging into the stuff. I'm the guy that wants to know how the watch works. I get it. Now, you said Ohio State. Usually when someone says Ohio State, they say the Ohio State. The Ohio State, yeah. Thomas, you've heard that before, right? You watch any football game when the guys announce where they're from. The Ohio State. Which I've been to Columbus. It's a nice place. I mean, I've been to Notre Dame, too. Those are like nice college towns. Yeah. Yeah. I had a subway store not far from campus there on 23, and it was the number one subway store in Columbus because of the college. There you go. It was good old days back then. Nice, nice. Now, you were looking at a lot of things there, and I'm sure, because you're a big investor, too.

15:02 You like to invest in stocks and play the market the right way. Do you see any – did you notice any maybe small companies that no one's ever heard of that you might think are ready to explode with the products they have? You know, I'm still compiling that thought. I'm doing some research, and, you know – Thomas, he doesn't want to share, in other words. He's going to his beard. When he goes to his beard, you know, he's thinking. Contemplating, contemplating. No, I mean, it's pretty neat, though. It's a great way. Oh, yeah. I mean, anyone who's up and coming is going to be at CES, and if they're not there, it may not be tomorrow, but it may not be next year. But the next five years, some of those companies you saw are going to be big names. Oh, absolutely. And, you know, the one thing that I'm looking for when I'm looking for these types of investments, I'm looking for people that have big vision and that are looking to be a disruptor.

15:59 You know, you take Elon Musk. You know, his goal is to colonize Mars. I mean, that's just like way up there. And, you know, these companies, fortunately, you know, when you aim high, that, you know, you might not hit the stars, but you're going to get into the atmosphere of space. And that's what – when you're looking at these companies, seeing the technology and hearing their ambitions, you know, do they have an open architecture that you could see this company really, really making some waves. And I think a recent example – And really the cloud – I would say a recent example of that is NVIDIA. We just had a clip on our show recently where the president was talking about because we provide the chips to everybody. They're that foundational structure. Yes. Yeah. Well, that's important to get those kind of companies.

16:44 But then also the ones that are – no one's heard of yet. Exactly. And then all of a sudden everyone hears about. But it's too late to get in almost. So true. So true. It's the meteoric rise, they call it. So how about Elon's tunnel? Did you get a ride down there in his tunnel? You know, I didn't get in the tunnel, but I saw cars coming out of it, and I was very impressed. I wanted to get in there, but it didn't happen. C'est la vie. What was your favorite interactive display? Because, you know, a lot of these companies spend millions sometimes on their displays. Oh, yeah. Well, one of the displays that really caught my attention was they had a display there where they had an omnidirectional treadmill. And there was a guy that was in the VR suit, and basically he was in Ready Player One total.

17:31 I mean, he had the whole getup. And, you know, they had a bunch of demonstrations going on, lots of people in those suits. And I was watching what they were seeing in the TV, and I thought, oh, my God. Gaming is coming a long way. And this is the evolution of the gaming industry right here. You know, when you think about gaming growing up, it was the fat kid that would just sit inside and play on the, like, sit in front of the TV. But now you have interactive gaming where you can get in shape by playing games. And that makes sense. I told Thomas, and Jose, you've probably heard this too, back in the day I played a game called Halo. Oh, yeah. Halo was on the Xbox back then. And my rule back then, and my bedroom was underneath my workout room, so my wife would hear me because I'd start playing the game like at 12 at night and go all the way.

18:19 But my rule was I had to ride the exercise bike while I was playing Halo. Nice. So it's funny. So when I started being chased, I would pedal faster, even though it had nothing to do with the game. But I was in really good shape, so I made myself work out to play the game. But now you're going to have to work out to play the games because if not, you're going to get killed too easily. Yeah. So it makes sense. Yeah. Good incentive. One thing that did stand out too that I just, I don't know, I just never had thought of this, but listening to a lot of the CEOs of these different companies speak and some of the producers at Hollywood, they are bringing influencers out now and allowing them to stream from the TV set. They're bringing them into these companies and allowing them to stream to their audiences.

19:09 And that's how these movies, they clearly said it. That's how these movies go through these huge ticket sales prior, you know, as the movie's coming out because they let these streamers are coming in. And I thought that was very, very interesting. You have to build the excitement because back in the day, they would maybe six months before a movie would come out. You started hearing about it. Then you started seeing advertisements on TV. But it would be like a six-month runway into the movie. Nowadays, the movies don't even go to this theater a lot of times. They come right to Netflix or Amazon or something like that. So everything's changing. And influencers are becoming a big part of that too. Oh, big part. I was very impressed with that. One word I'll drop in there for you is agentic AI. It's something that you probably want to get to know better. That's going to probably be a trillion-dollar industry before you know it.

19:59 And that's something to really, you know, explore, find companies that are focused on agentic top of AI. That's going to be your autonomous top AI. And that's going to be the big, big thing here down the road. So AI without you having to be around, I guess, right? That's exactly it. Okay. A self-driving car, for example, would be agentic AI. Okay. That's what we always hear about, self-driving car. What else could we, like, what other? You think it would be self-driving planes down the road? You get on a plane and there's no pilot up there? You know, I'm sure that'll eventually be the case. It's kind of scary. I don't want to be that first few guys that get in there and, you know. So anything else that excited you during the show?

20:46 You know, I just going through and just seeing the technology, seeing the massage chairs, that was pretty exciting. Because now they've got them where they'll stretch your whole body out. And so that was pretty nice. Really, just being overwhelmed is probably the word. You can only see so many things before your brain's just, ugh. But it was so many cool things. There was a couple. Oh, I'll tell you something that I saw that was really interesting. And you may have seen these before and you may not have. They had crafts there that are full size. And you can put one or two people in and fly them around.

21:31 It's a giant drone that you can fly your body around in. Like, I could buy this thing, get in it here at my house, and fly on the other side of town to my buddy's house. That would come in handy in New York City where they have a lot of traffic, wouldn't it? You know, you just fly over the traffic. Oh, man. That's pretty neat. I couldn't believe what I was seeing. When I was looking, I was like, wow. Either I'm behind on my knowledge here or this is new. So do you get in it like, I remember Orville and Wilbur Wright, they get in there like Superman. Is that what you do? Is it big enough? It's a big drone, then. It's a big drone. It's got big blades on it. And I'm sure it has some limitations, but you can literally get in this thing and fly over to your buddy's house. You've got to make sure you don't cut somebody's head off with those blades, too, right?

22:17 Oh, yeah. Yeah. The blades were no joke. They were huge. What is it? Battery-powered, I guess, right? Yeah. So did it have new battery technology coming out? Did you see anything like that? Because that's always a big thing. You know, I didn't see very much on that. I'm sure it was there because, you know, obviously the battery is powering all of our stuff. We want better and better. You know, Jackery had some great solar batteries there. They had a huge gazebo design that you can buy and put in your backyard. At the same time, it's a whole charging station. So that was kind of cool. That's pretty cool, yeah. How much was the big drone that could fly you around? I'm interested. You know, I didn't see the price on that. I didn't see no price out there.

23:03 I just think of the last time I tried to fly a drone. It would be like me real life morrowing something. Oh, my God. Well, we had Caesar in our office. He got his drone stuck in a tree. I wouldn't want to get stuck in a tree if I'm in a drone. Oh, my God. You heard about your cat being stuck in a tree. You had to call the fire department to get the cat out of the tree. Now you have to call the fire department to get people out of the tree. Get people out of the tree. Well, my husband's in the tree again. All right, we'll be right over. That's good. That's good. So how did they have the show? I know you said it was spread out all amongst a bunch of different hotels and the conference, whatever they call it, the convention center. How did they have the booths divided? Did they have them in different sections? Like you went to Tomorrow World over here and you went to sort of like Disney. You had different places? Yes. They had it customized by theme.

23:50 And so you could see some of the cars here. You could see some of the health and nutrition things. Oh, that's another thing I saw. I saw this one workout gym. It's called Monster Gym, I believe was the name of. Gym Monster. That's the name of it. And this is the granddaddy of home fitness. It's a very small thing that you can literally fold up, but it's got the technology built into it. It's like having two, 300-pound weights that you can bench press. You can do all kinds of stuff. And it's the whole thing that folds out. And it was made really, really well. I was like, wow. But when you're done, you just literally fold it up and it's like hardly anything. Because that's a complaint a lot of times people have. And they have to go to the gym because they don't have enough room at their house for all that equipment and everything.

24:39 So that's pretty neat. I was really impressed of how functioning this thing was. And you literally pull it out. You do whatever workout. I mean, from squats to bench press. I mean, the whole thing. And then you just kind of package it right back up and boom, it's done. It reminds me of that bed that people used to have. They'd pull it out of the wall and the bed would come out. When you're done, you'd throw the bed back in the wall. That's pretty much it, yeah. But they did have it all divided up by sections. Okay. And it was really neat. So what innovation made you say, why hasn't this existed before? That's a good question. And I would say that it's hard to really pinpoint something. Because I was like a kid in a candy store just walking around.

25:27 The clothes folding thing sounds cool to me. Oh, that's number one. That and the flying, the little drone that can fly from one side of the city to the other. That's neat. Yeah. I would say the drone was probably that. I was like, wow, I'm surprised it's kind of taken this long. Because drones have been out for a long time. Yep. And, you know, and again, I may just be behind in that area. But when I saw that, I was like, wow. The gaming, I'll tell you, the gaming had came a long, long way. Just seeing those people in the full gear. I can't remember the name of what you call that. But just seeing the folks in the VR glasses and the suits. And then watching them play the game on the TV.

26:14 It was just amazing. All right. Two more points and then I'll let you go. But, I mean, your phone. I've always told Thomas, you know, there's going to come a time where we're not carrying our phone around all the time. I mean, it's a burden. But I have my credit cards in here, too. So this is my wallet, basically. But, I mean, is there going to come a time where you don't have to have a phone, but you can still have all the functionality you have with the phone right now? I think so. I think eventually you're going to have some type of futuristic device that, whether that's a band you put around your wrist and it has a small projection that when you hit the button, it kind of pops up and, you know, you got everything kind of almost in the air. Yep. I did see a phone there, though, that was really, really amazing. It was a very, very thin phone that it was like a tri-fold.

27:00 It folded out and it was the size of an iPad. And it was big. But then when you folded it back up, it was basically like this iPhone I got right here. Yeah. That was really interesting. Samsung, it was one of their brands and it was pretty much brand new. So eventually you'll probably see that hit the market at some point. Because you know all these companies are trying to come out with the thing that replaces the phone, right? Oh, yeah. But I guess it's a ways down the road. Now, this wasn't your first trade show. You've been to CES before, right? Yeah. How do you compare this to others? Well, it had been a while since I had been. And this one just seemed to have a lot more action. You just saw a lot more people.

27:46 There were a lot more gadgets. And just I think the thing that I believe really made the difference was the panelists that they had pulled together. And I'm sure they're going to keep doing this more and more in the future. And that was really impressive. So did you go to some of those speeches? Yeah. It was like I went to a conference. I went to a conference and I went to a trade show. What was your favorite speaker? Who was your favorite speaker? It was a panelist that basically was speaking on the future of the coaching and digital marketing industry. Ah, that's cool. And it was a combination of you had a guy there from Twitch. You had a guy. One of them was a Hollywood producer. Substack had a big presence there. I don't know if you know what Substack is.

28:32 It's like YouTube except you own your own stuff. So that was probably some of the highlight of the speaking and panelists. I've told my staff we need to have a Substack page, but it never happens. Yeah. I guess I'm going to do it again. Thomas is getting worried. I see him over there. I was very impressed. The owner of Substack was there and he was talking about where they're at, where they're going, and just how they work with the people that's on their site. So definitely check that out. So you say this year is just more bigger, more faster, more better. It sounds like just everything, the excitement level seems to be higher. I think the excitement level was super high because AI was just everywhere. And if you could just put yourself back in those couple days, you were there for two or three days probably.

29:21 What was the most exciting moment that you had where you just felt excited about the future? Oh, that's when I won. I pulled the handle and all of a sudden this big thing started flashing. It said I won. Oh, yeah? How much did you win? How much did you win? You win a lot? For IRS purposes, we'll keep it under $10,000. Yeah, we'll keep it under $10,000. But I would say probably the biggest thing was leaving the show, I felt like I had a new perspective on what AI is really going to become down the road. And it got me really fired up. I'm thinking about going back and taking some classes at MIT on a GenTech and on some of that AI so that I can better incorporate it into my business and so forth.

30:09 So very excited about it. Well, here's one thing I just forgot. I said it was my last question, but I've got one more here. But blockchain, we've heard so much about blockchain over the years. Were there any blockchain-type companies there showing you what the future is going to be in blockchain? Yes, yes. There were some companies there illustrating some of their stuff and blockchain. Absolutely. And blockchain is going to continue to emerge, especially with quantum computers. And you put blockchains and quantum computers together, that's going to be a huge deal, especially when we have access to it. Yeah, I really think that that's the future of voting. If we can perfect the voter ID, then if people vote on the blockchain, there'll be no more cheating anymore. That's exactly right. And so that's the way to go. One final thing, your favorite restaurant while in Vegas.

30:56 My favorite restaurant, believe it or not, it was just Gordon Ramsay's Burger Bar at the Planet Hollywood. I've heard good things about that, actually. Some of his other places, like Hell's Kitchen is good, but it's expensive and it's a long wait. But the Burger Bar is good. The best steakhouse I've ever been to there is the Golden Steer. Oh, yeah. It's featured in the movie Casino. It's one of the old-timey ones. But it's one of the best steaks ever. So just keep that in mind. You've probably been there before. I'll check that out. All right. His name is Joe Casey, and he's one of the guys that I like to talk to when we talk about tech and also investing. Joe, thanks for your time today. Hey, thanks for having me, Coach Pete. Love it. Look forward to seeing you again soon and hanging out with you anytime, man. Call me anytime. Hey, if people wanted to contact you, how could they do that?

31:41 They could simply just go to CatalystWealthCoaching.com, and you'll find all my information right there. There you go. Thanks a lot, Joe. Take care. We'll look forward to talking to you again in the future. Yes, sir. Have a good one. Bye-bye. Folks, we'll be right back after this. Bye-bye.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome back into the Financial Safari. Thomas Lipscomb here, consumer advocate in the studio alongside America's Wealth Financial and Income Coach, Coach Pete D’Arruda, as well as Stan Moore, CPA. We're calling him Stan the Taxman. What you got for us, Coach? Well, Stan, all right, so we've got one more segment here on the show, and the tax code is 70-something. I lost track, but 70,000 or more pages, right? And we're featuring good things in the tax code today, and we don't have enough time for everything, but we've got a little grab bag segment here now on things maybe when we were doing the first three segments. We said, God, I wish I would have told Coach I want to talk about this, this, or that. So what are a couple topics we can talk about here? Let's tell folks we're going to talk about, then we'll talk about them. What are two big topics that we haven't talked about yet? Well, we touched on depreciation, but one thing we didn't dig into was depreciation for real estate,

00:46 and one of the biggest things that has been out there for a while, not in the – it's in the new tax code, it's in the old tax code, it's called cost segregation. So cost segregation is basically when you look at business real estate, you think about real estate, what is that? Well, it's land, and then it's the improvements that you build on top of the land. It's both. You can't depreciate the land, so you really can't write that off as an expense, but you can depreciate the improvements, and the question is what improvements can we depreciate? Number one, and number two, how fast, right? Yes. So the cost segregation rules allow you to make a special election, and if you identify assets that fall into younger year categories, like you think about your business, the building that you're in, it's made up of a lot of screws, it's made up of a lot of small pieces of metal, it's things that you could go buy in the store and expense it,

01:36 but once you put it all into a piece of real estate, you think, oh, well, it's just one giant piece of real estate. No, it's not. It's really made of a bunch of little things. Breaking it down to the very ingredients. So if you break it down to the little ingredients, it's kind of like deconstructing a Lego figure, right? If you break it down into those little bitty Legos, there's a certain amount of those Legos, which is usually a high, pretty 40, 50, 60% of those Lego pieces of your building can be written off now, and that's what cost segregation does. It usually entails hiring an outside third party that's a specialist in real estate and identifying all of the screws and nails and pieces that go into the entire building. And when you break down those Legos, we write them off, and the depreciation in the tax code will help us do that. So are taxpayers allowed to amend previous years to claim those benefits as well?

02:25 Great question. Yes. You can amend. Sometimes you'll look at a return and see, oh, this should have been done. They had a bunch of improvements in a certain year. And you can go back and amend that. That's a big one, Thomas. I was wondering. I was wondering. I've been doing a lot of work on the home. If people didn't have a good CPA to recommend it, then they might have never known they could have filed something like that. Right. It's not like something that comes up on TurboTax when you're trying to do your return. Not yet, but it could, right? Yeah, it could. But the tax code that we have had extended for 2025 with that bonus depreciation, that's where all of these assets that have the fast write-off and the fast tax impact, it's happening within that bonus depreciation. So if they had not extended that law for bonus depreciation, it would have hurt cost segregation strategy.

03:10 However, we've got it back so it all works together. So it's a win-win now. It's a win-win. We've got another double dip there on the cost segregation and depreciation. I know about, I think, 2022, you helped me with that on my building here, and we did save some pretty good money that year, Thomas. And we've done some more renovation since then, so we're going to look at that here in 2026, another one, another cost segregation. Absolutely. If you look at this tax- It's good segregation. Good segregation. That's the good kind. That's the good kind. That's the kind we want. But you look at the savings, whatever tax bracket you're in, that highest tax bracket will be the dollars that you save times the amount that you spent within the cost segregation rules. You know, the media will title Stan a separationist or a segregationist. Oh, no. We're all about segregation. We want unity the right way.

03:58 This is a good thing in the money. It's the green segregation we're talking about, the good green. We're going to try to make sure to keep as much of that segregated in your pocket than Uncle Sam's pocket. So that makes a lot of sense. So if you're curious about that, all you have to do is text Stan, because it's Stan the Taxman, Stan, to 600, 700. If you have a building, maybe you've made some improvements or you're not sure if the improvements you made qualify. It never really hurt to ask a question, did it, Thomas? No, it doesn't. You've asked me a couple questions over the years you were probably afraid to ask because you say, Coach, Coach, probably he's going to think I'm dumb. But the dumbest thing is to not ask the question. It's true. My dad was a college professor for 44 years. He said the dumbest questions were the ones people did not ask. There you go. There you go. And so remember, he's sitting in a class and you're always hoping, because you didn't understand it, but you didn't want to be the dummy in your mind, raising a hand, so you were hoping somebody else would raise their hand. And every now and then they did. And you'd say, oh, what a dumb question.

04:44 But you were listening. Exactly, exactly. Well, and that's just being together for each other, working for yourself, not having that high school mentality of, oh, what is the cheerleader going to say if I raise my hand or whatever. You don't know until you ask, right? Exactly. You never know until you ask. But Stan, that's a great point right there, and that's something a lot of people have overlooked. I had overlooked it myself, and that's why I have a tax planner. I'm on call with Mr. Stan Moore, Stan the tax man. So, Stan, that's a good one. We have time just to reach back into that grab bag. What else are people overlooking in their favor in the tax law? Well, Coach, you talk about retirement day in, day out. And the Roth IRA was a great retirement vehicle that was created. And we've had it for a while. However, there's been some strategies that have had to be created legally,

05:30 loopholes within the tax code, because if you make too much money, you cannot contribute to a Roth IRA directly. So there's a strategy that says, hey, how can we get the money into the Roth but still not break the rules? And they've created a backdoor Roth strategy. Now, backdoor Roth is not in a tax code. That's just a strategy that advisors have created. And basically what you're doing is you're taking money, putting it into a non-deductible IRA, so you don't get a deduction. But the strategy is to put it there first, and then if you roll it over from a non-deductible IRA into a Roth, then you've kind of circumvented the direct method into the Roth.

06:17 You're just going through a backdoor. Now, there's still some pitfalls. You still have to do some calculations, and you still may have a portion of it or maybe even all of it taxable, because depending on how much the balances are in your other deductible and non-deductible IRAs at the end of the year, you get those forms, $54.98, it's got the fair market value of your IRAs. We have to do calculations on that to see if any of it's going to be taxable with this backdoor. But it is a possibility, and it's a strategy that you have to look into and weigh out the cost. We've utilized it over the years for clients, and they've come out way ahead when it's in their favor. If it's not, you don't do it. But if it is, you do it. And so the strangest thing is you're putting the money into a non-qualified, non-deductible IRA. So every penny you put in, you've already paid tax on it.

07:03 That's right. And so it's important to remember, if you backdoor Roth it, there could be some more taxes due. But all that money now will be tax-free forever, so that's something to look at too. But again, this is why we call it planning. It's because you have to look at it, do the calculations beforehand. We can make really, really good estimates, especially if we're past halfway into the year and say, hey, what's the cost? What's the benefit? Is it worth it to do it? And a lot of times people want to do this in big chunks. So we're usually talking big money, $100,000, $200,000. And it's like you don't want to make that mistake of missing the boat and having more of it taxed than you realize. Yes. Or miss the boat and maybe not have any of it taxed if you do it at the right time. That is a key strategy. But again, we're back to the fundamentals, blocking and tackling and planning ahead.

07:48 My retirees who are now on limited income or getting income from the retirement plans are the happiest when they have some tax-free money coming to them so they don't have to report on that tax return each year. It doesn't seem like much until you get there, but if you can keep more of the money in your pocket and less to Uncle Sam, you come out ahead in retirement too. Sure. Most people retiring are paying at least 15% average federal tax and probably 4% to 5% on the state. So at least 20%. I mean, 20% of something is going to add up on a monthly basis. So again, we're back to planning. It's the tax strategy. It's making sure you know what's out there and looking ahead. Well, you talk about a senior discount. If you can save 20% on your money in retirement, it's almost like getting a 20% discount. So that's a better senior discount than that 10% that gave me at Biscuitville the other day.

08:34 Absolutely. That's good. So that's a big point there. So if you're curious, folks, if you may be in that situation where you might be able to deduct a lot more money than you realize or build up a tax-free income using the backdoor IRA or the backdoor Roth, if you've never heard about that or you heard about it but don't understand it, now's a great time to call. We'll sit down with you and educate you on all the different techniques and tools that you could qualify for to make retirement a lot more advantageous than you ever thought it would be and having all the income that you can in a tax-free manner. Thomas, tell folks, again, if you call right now, let's do this. Let me hit this button too. If I had a million dollars, I'd be rich. All right. So radio, here's what happens. You get in and out of the car or maybe you're in front of your computer at home.

09:20 You listen. You go into the other room. You get a drink. And you missed me in the first segment when I gave away 26 copies of Tax Savvy Retirement, 250-page book that was written in 2025, all about ways that you may be missing out on tax savings in retirement. So somebody who is in retirement and they are taking advantage of the tax law, they are in a tax-savvy retirement. You're in control, in other words. And so I've got a way you can have the at-home manual on how to save as much as you can. And we've also got the in-office manual. That's Stan, the tax man. But we're going to send you a copy of this book and inside it will be a golden ticket. Will you qualify for your no-cost total retirement plan that includes tax planning and financial and retirement planning as well as income planning, very important, making sure you have a lifetime income

10:05 all the way through retirement. But this book explains a lot of those tools and techniques. Thomas, we're going to mail these books out. I know we filled up these segments right in segment one. So if you joined the show late, you would have missed out. But we're going to offer it again for the next 26 people who call or text. We're going to send you a copy of this book at no cost. We're even going to pay the postage and handling for you. So again, it's a true no cost. And then we'll put you on a list where you get the video series along with this book. So each week you'll get a new video on another chapter from chapters one all the way through chapter 15. You'll get 15 different videos. You'll have your own collection in it and explains the chapter in detail. How many times have you got a book, Stan, and you get it and you put it on the bookshelf and it never comes off the bookshelf again? Very often. Because you really don't know why you should open the book. That's right. So if you look at these videos,

10:51 these videos will tell you what page to go to and why it's important for you to pay a lot of attention to certain charts and tools and techniques in this book. And you're going to become an expert overnight in financial, retirement, and tax law by reading this book. And we're going to direct you on how to find the right information in the book. What a great idea. It's almost like a video cliff note version. And so, again, for the next 26 of you who call, you're going to get this book and you also qualify for a tax plan if you're a business owner and you meet what Stan's looking for and you guys can make an agreement there. But you also get a no-cost total retirement plan as well. Thomas, this is a great gift. This is awesome. We're keeping the gift-giving alive here in 2026. I love it. So this is celebrating our 250 years as a country coming up here. Amazing. Again, I've been to Uncle Sam hat on the book. So now, the next 26 people,

11:37 you can have this book as well. All right, let's go, let's go. That number, 800-661-7383, 800-661-7383, or text keyword FREE to the number 600-700. That's right, that's a special keyword to take advantage of this free tax-savvy retirement opportunity. FREE to 600-700. That's keyword FREE to 600-700. Still have the Christmas props in the studio, so might as well use it, folks, for Coach Pete here, Stan Moore, Stan the Taxman, for Thomas, and for Cesar, who's been working the board today. We'll see you next week. Same time, same station, on the Financial Safari! Thank you.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome back into the Financial Safari. Consumer advocate Thomas Lipscomb here with you again alongside Stan Moore, CPA, better known as Stan the Taxman, and America's Wealth Financial and Income Coach, best-selling author, Coach Pete D’Arruda. Catch up on the story by heading over to FinancialSafari.com. Again, that is FinancialSafari.com. You can also check out Coach's free resources over there when it comes to financial planning or ask a question that you maybe want to get in front of him or the team. Again, FinancialSafari.com. Now, if you're in real estate or you're planning to, cost segregation can be a very powerful thing. We've got a lot that President Trump is doing right now. We've been having a great conversation about everything from bonus depreciation, business depreciation, through taxes and overtime and tips.

00:46 There's a lot going on. Lots of positive changes here in the tax code for everybody listening, and that's why this is one of the happiest tax shows I've ever done. I'm loving the conversation. It's hard to say happy in taxes in the same sentence. Yes, rare. I'd be even happier on April 15th. When have we heard that before? Never. So, Stan, what do we have here? I'll tell you. We were talking about the unborn and how can taxes affect the unborn. Well, this is for children. Brand new. We've never seen anything like this before. It's called the Trump Savings Accounts. Now, this starts in 2026. It is basically like a retirement account. It's deferred tax on this, just like an IRA or 401K. And the government's saying, hey, you can put up to $5,000 a year into this tax-deferred account per beneficiary,

01:38 and the government is going to put in $1,000 the first year. Got to like that. When is the IRS giving us money? Hey, before these kids are even filing a tax return, they're going to get $1,000 from our federal government, literally. Now, the boundaries around this is- Here comes the fine print, Thomas. Okay, here's the fine print. But you're going to remember it because on July the 4th, 2026, our country's 250th anniversary, that is the first contribution date for the Trump Savings Accounts, okay? So if you put money in there from July 4th on, it's going to be qualified, and the child has to be born from January 1st, 2025 on. So it might be for the unborn that's not born yet.

02:24 It might be for children that were born in 2025, but that's the basic parameters. But when have we seen anything like this before? Never. Trump Savings Account, and the acronym is TSA. This is a good TSA for once in a while. It is. This show is all sorts of upside down. Nobody likes the TSA at the airport, but everybody likes the TSA when we're talking about saving money. That's amazing then. So July 4th of this year is going to be the first contribution. Wow. And think about this. Not only can the parents put money in, other family members, employers. We're back to businesses again. We've got another double dip here, Coach. Double dip ice cream cone. Here we go. It's not just the child that's going to benefit, not just the family, but employers can put in up to $2,500 that will be excluded from your W-2.

03:10 So normally when your employer gives you anything at all, you get taxed on it. And in this case, they can put up to $5,000, but up to $2,500 is not going to be taxed to you. So there's a big benefit. It could be a charity putting money in. It could be an employer. It could be another family member. It's pretty neat. Yeah. It's amazing. And so just think about this. All that money that's going into investment, that money is going to go into the stock market. The stock market is going to be flush with all this cash coming out of the- Sort of like when they did the 401ks. Yes. It's coming out of the government coffers where Doge has found a lot of poor spending habits, right? Poor spending habits. And it's going to go into a child's account, and the parents are going to be able to invest that money in the market.

03:58 It's going to be a huge influx of capital into our market. Too bad they didn't let us do Social Security that way, right? Oh, boy. Manage your own money in the market. Yeah, you wish. Money that took out of your paycheck. We wish. We wish. So that's good. So what are the fine print levels here? The gotchas? What are people going to look at? Yeah, the gotchas. The tax gotchas. So no distributions before the child is 18, which makes sense. You don't want to blow in it before they're 18 anyway. You don't want to blow it, right? It's just like a regular IRA. 18 is kind of too soon. I would say until 30. Like, leave it alone and go to college for a second. I would think. But they give it to 18. 18 is very generous. You could take the money out, but you're going to have a penalty, right? And it's going to be taxed, just like on an IRA. So you don't want to take it out early. Hey, an IRA, you've got to be 59 and a half, right? So this is 18. It's much, much better. And you'll be able to do rollovers from a Trump account to another Trump account.

04:44 So a lot of details that will be coming out. So that'll be a tax-free roll if you do it the right way. You could do a tax-free rollover. And so that's the long and short of it, but I think it's another double dip. Well, it's another good one in there, right? So they really took some time and put some of these tax write-offs together. And this is a good way to help save some money, too. Now, that's on the younger age spectrum. Now, let's go to the senior, the other side of the age spectrum for our seniors, specifically 65 years or older. 65 plus. 65 plus. Coach, it's not too far away from me. Hey, you know, somebody the other day gave me a senior discount. I didn't complain. I'm only 59, but only 59. But I guess some of them start at 55. So there you go. So there was a lot of back and forth politically on what was going to be taxed,

05:34 what was not as far as Social Security and some of this new tax law. And there's been a lot of questions to me with seniors about, hey, does this mean that I'm going to get a deduction and my Social Security income is not going to be taxed? No, no, no. It doesn't. Social Security income is still taxed, which is a real bummer. People hate the fact that they paid all the Social Security tax in and then one day they take it out and it's being taxed. That has not changed. But what has changed is if you're a senior, 65 years or older, they're in the tax year, you will have a new $6,000 deduction per person. So if you're married, that's $12,000. That's at least a $2,400 to $2,800 tax savings just because you are 65. It does not matter if you're retired.

06:20 It does not matter if you're on Social Security income. It does not matter anything else. You don't even have to itemize. You get this right off the top. Are there income phase-outs on that one too? Oh, coach, the catch. The catch. Yes, there is an income phase-out. So if you're single between $75,000 and $175,000, this deduction will phase-out. Or if you're married between $150,000 and $250,000, which is a pretty decent size, this will phase-out. So if you give everyone that doesn't have much money deductions but then punish everyone who does have a little money and don't give them deductions, sooner or later you're socialism because everyone has the same amount of money. That's a good point. It doesn't matter what you give them. If you don't let them save anything or take it away from them, then you end up with the same kind of mean income, they call it. And it is mean. The means testing.

07:07 Yeah. So, all right. Anyway, it's good to know that a lot of people are going to have some good windfalls, though. That is. And, you know, the Social Security income inflation increases have been very, very small. We've had the largest one in a while, but I know it was only maybe 3%. It was small. And so here is it. You know, more bang for your buck again from our tax bill. It's just coming right off the top. You don't have to do anything special. You just have your age has to qualify. And that's it. Back in the 90s, I was a road warrior. So I basically did all my appointments at folks' houses. And I was all through North Carolina. And North Carolina is a big state when you have to drive it. So I would put over 60,000 miles a year on my car. And it would be a good windfall at the end of the year because I'd get a certain amount of money back per mile, 50 cents or whatever it was back then, per mile. What is the mileage deduction these days as far as what do you get to write off if you're a road warrior like I was back then?

07:53 Is it fairly high? Because gas has gone up a lot. But back when I got to write 50 cents off, gas was basically around 99 cents a gallon. You know, and cars have got a lot more expensive than parts have, too. I don't think the government's kept up with that should be like $5 a mile now compared to like everybody else. What is it now? Is it like it's not about a dollar a mile? It's 70 cents a mile. So it's gone up, but not enough. Well, they really haven't kept up with that at all, have they? Because it's got to keep up with not only with the cost of the gas, but the repair on the car, the depreciation in value. How much the car itself costs, too. Exactly. It's not keeping up with that. And unfortunately, you know, there's some deductions for mileage that you used to be able to get in certain ways that have gone away. But 70 cents is where we're at. That would take Coach Pete from having to write a check to getting a check back. That's right. That was a big amount right there. That would really make a big difference for me.

08:40 And it really saved me because I probably would have been out of business back then if it wasn't for that. That's right. Yeah. So many things are against you as starting a small business. And so it's good to have some things on your side back then. I don't know about these days. Especially if you're investing in assets and purchasing in that small or growth phase. Trying to employ people. Trying to employ people. When you're getting started, hey, at least you're going to have some tax breaks. Now, speaking of automobiles here, we're talking about mileage. There is also a new consumer. This is not really for businesses but for consumers. The car loan interest. Now, remember, we used to have an itemized deduction for car interest. Now, so this is kind of coming back just in a little bit different flavor. However, if you buy a qualified vehicle with a certain qualified type of a loan, okay, we've got some brackets and some loopholes we've got to follow.

09:27 But you can get up to $10,000, again, off of your gross income. You don't need to itemize. Off the top, you can get $10,000 for your interest payments on a new automobile. But it's for personal use only. This is huge, Thomas, when Stan says you don't have to itemize. Yes, because itemization, a lot of people procrastinate and they never get around to it so the government wins. And, in fact, you don't have to itemize, Stan. It's just a check-in-the-box kind of thing. It really is. I mean, it makes a whole lot of sense. And this is something I think many people listening need to take advantage of. Yeah, it's true. And I want to make sure that we get that number out there so people can connect. So, folks, connect right now. The number 800-661-7383. 800-661-7383. You can also text keyword PLAN to the number 600-700. That is PLAN to the number 600-700.

10:14 Now, Stan, the tax man, over there to my left, folks. Stan Moore. And, Stan, if you were doing, like, you've got about a minute now. If you could put a minute ad out right now and tell folks who you're looking forward to represent, who you're taking as new clients here in 2026, who would be the people that are listening now that you open your doors to and welcome as new clients? Business owners that are in North Carolina that value their time and they love to plan ahead because they value their cash flow in their business. You know, I like dealing with people that want to be a good steward of what God's given them, which includes their business. But, you know, one thing God has given us that you can't take back and you can't buy is time. So what's our value? Well, it's our owners' and our clients' time, right? We want to be able to give them time to go out and maximize what they do best, dream big, think big, work well,

11:03 and we take care of the accounting, the planning, and the taxes. You take all that tax worry. Leave the worry to us. That's right. You're like Greyhound and the tax man. That's right. Sounds good to me. If you want to give up your stress, you know, we'll help you with that. Yeah, because taxes can cause a huge stress on people. And, you know, a lot of folks, after they meet with you, they leave happy because they know that it's not as bad as they thought it was going to be because now they have someone on their side. And that's why you become my chief CFO, my chief financial officer for my tax. My tax is every year. It's, again, back to the blocking and tackling. Coach, you know how it is. When you're in the red zone, right, you got to – when it gets really tough, what really matters is the blocking and tackling. If you keep up with the basics, you stay ahead. You know, let us keep up with your books. Let us keep up with your accounting. Hey, we'll know six months ahead before you have a tax bill.

11:49 Who wants to wait until the last second and get surprised? No one likes surprises. If you have a question for Stan, folks, all you have to do is text STAN, S-T-A-N, to 600-700. That's STAN to 600-700. We'll be right back after this.

See omnystudio.com/listener for privacy information.

Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 each and every week I talked to very interesting people and the most important part is that I shouldn't be the only one hearing it I really feel that if these people make sense to me that everyone out there needs to hear it so stay tuned folks and I hope you enjoyed this newest weekly segment on coach business folks it's coach Pete here I'm live on the floor of the New York Stock Exchange with mr. JW Roth who has just launched his public traded company venue JW welcome in coach it's good to be here it's good to be here fun day for you it's a fun day you rang the opening bell today he rang the opening bell we opened the New York Stock Exchange it's funny you know when you're a when you're a kid or you grow up in your you always think of the New York Stock Exchange and how you

00:46 picture it yeah then you get in business and you start to dream about how you know where your company's gonna ultimately go but then to actually do it to stand out there and ring the bell on the New York Stock Exchange it's surreal it's pretty amazing it's amazing you look like a pro up there doing it yeah listen that I got him fooled I got him fooled now all right let's take a step back tell me how you got started in the business world yeah let's do that let's do a quick history here yep a couple minutes yep because that'll help I think folks that are watching it'll help them understand who you are and why you're doing what you're doing yeah yep so you know I did not start in the hospitality or entertainment space I'm the founder at Roth premium foods my background is all agriculture and in and in building food lines so Roth is a prepared food manufacturer but I think about the third largest in the United

01:33 States well we we we build for almost every grocery store in America and we do service every grocery store in America every day bill between a hundred and hundred and fifty tons of proteins for US consumption every week so that's what Roth does being a music nut about six years ago I sat down with my family and our partners and I said you know what I've got another one in me I want to go build another one my son had had been at Roth all the way along was in a perfect position to just continue what we were doing there and in fact I tell people this all the time he's actually in a lot of ways done better than the old man would have done but it gave me the opportunity to then leave I took a handful of my key people and we worked out a transition plan and over the course of a year or so

02:21 transitioned out my CFO and some of our business development folks and that kind of thing and I started venue the idea was as a music fan I've been to I've been to venues all over the world mm-hmm and I can tell you that they're old they're dilapidated especially live music venues outdoor like amphitheaters yeah most of them are 40 50 60 years old and so they lack a lot of what the fan is demanding think about the NFL and major league baseball it's kind of who I copied I took a page right out of their playbook I looked at them and said look at what guys like George Steinbrenner did or Jerry Jones and the Dallas Cowboys you know he took he took old dilapidated stadiums work with municipalities and built unbelievable experiences and unbelievable ambiance in stadiums now so now when you go to a

03:11 football stadium you're not out there drinking a lukewarm beer eating a lukewarm or cold hot dog yeah you're going out there and you're enjoying club service and all of the things that go on with the stadium I wanted to do that in music so I started going around the country hired Ryan and company to start putting public private partnerships together and this last summer we opened the the most premium amphitheater ever built in history Ford Motor Company put their name on it's the Ford amphitheater in Colorado Springs Colorado 92 fire pit suites beautiful owners clubs it's an incredible place today would on top of that we have another billion dollars or so of construction going on throughout the US in in five different markets as we build as we build amphitheaters we're gonna we're gonna do it music with those two guys and I admire both Steinbrenner and Jerry

03:58 Jones what they did in football and baseball amazing business people unbelievable business people I've been to the Colorado Springs location folks amazing yeah the fire so just an amazing place you don't even think you're at it like a traditional concert no Ryan Tedder is interesting you know Ryan Tedder out one Republic has stepped out on stage he's sold out three shows for us this last summer but he stepped on stage and he goes geez I feel like I'm in Dubai you know all of the fire going on and the fire pits going on and it's it's it's incredible it creates an unbelievable vibe and an unbelievable ambiance yeah so I mean this idea though came like let's build amphitheaters or I mean how that that's what you said here's what I said okay I said I wanted I'm a fan yeah and I'm tired of the venues that I go to and they're they're they're they're terrible

04:44 but I go to football games and baseball games I'm thinking man these are nice I could do this so when I left Roth premium foods I left for one specific rate and that is to disrupt the venue space in live music disrupting because I it was something like the major league and football places yeah their video screens are better than the TV at home no question no question and the food is unbelievable I mean you have five-star restaurants now in baseball parks and so you know we built the seafood and chop house in the in the Ford Amphitheater in Carr Springs you know the five-star seafood and chop house inside of a music that's amazing yeah it's got dogs and a slice of pizza right exactly right no more hot dogs and slices of cold pizza all right so now you've made you you've got the idea let's do let's build big amphitheaters and let's get the let the people to come but how did you get the financing in place because that's that's

05:31 a big proposition you see yep you see all the NFL teams and major league teams they have they have to really consider building something new yeah I mean they're there it's tens of millions of dollars to build these and so basically I have three there's three parts to my financing strategy first is the municipalities have to participate so 35% or so of all of the financing comes from the municipality the municipality provides the ground provides the tax incentives it's it's they're a big piece of the financing and then I go out and I pre-sell I build the structure of my amphitheaters like a condominium building where we own the condominium building and then we pre-sell condominiums in the form of fire pits and so about 35% or so of all of the financing for these come from those suite owners

06:17 and fire pit suite owners and then the balance comes from our ability to then finance and and put small amounts of of sale lease backs on the ground underneath the underneath the amphitheater but you know these have these like in McKinney you know it's a 300 million dollar amphitheater to build the it's the it's the most seeded amphitheater in the history of the world that we're building there opens for the 2026 season it's a beautiful if you've not seen what we're doing down there it's incredible but at the end of the day you could never make it pencil if it wasn't for really forward-thinking municipalities like the city of McKinney George Fuller mayor George Fuller he's a forward-thinking mayor he's a wonderful man and he you know in his way of thinking he brought the city council along and next thing you know they're supporting it we have great

07:06 fire pit suite owners down there got a good friend in Troy Aikman Troy Aikman's Hall of Fame quarterback for the for the Dallas Cowboys he and I partnered on on eight as a as a as a sponsor at our venues and then we're building the Aikman clubs and so you know we've just got really good partnerships good sponsorships and so at the end of the day you know we have we have a financing strategy that works and works well and it works good for our public company shareholders yeah that's a good question so a lot of people before they invest in the stock they say well let me see how much debt this company has that's right how are you looking on we have very very little debt we you know over the last eight quarters or so nine quarters I guess we we've built a balance sheet of about a hundred and eighty one million dollars we'll cross two hundred million and add

07:53 a billion dollars in 2025 with a B net with a B net tangible assets and so you know at the end of the day we are we are focused on our balance sheet and as a result of public-private partnerships and mark-to-market valuations we're gonna we're gonna we're gonna cross that number this year now someone is just finding out about venue for the first time and they say gosh how we how do we get an amphitheater like this in our area yeah what are the steps you've been doing and where you're going next yeah so you know right now we're finishing up amphitheaters as we build down through the Tulsa market and Broken Arrow we'll be in Oklahoma City market we're building the Dallas Fort Worth market in McKinney which is an unbelievable venue getting ready to start our construction down in El Paso it's interesting El Paso is such an interesting market people think of El Paso but they only think of kind of north of the bridge right listen south of the

08:42 business bridge is just as big of a market Latin music has exploded it is exploded yeah and that market has exploded and so at the end of the day I tell people all the time don't count El Paso out as might be the most profitable venue we build in the next 10 years for that exact reason when is that on the schedule that you know it will we're booking it and it will open in 26 so we're about 15 months out well let me ask you this if people stop liking music the world ends right yeah if people stop liking music I think the world just ends it's the only thing I can think of that is unifying right at the end of the day 2025 again for the 10th year in a row it's the number one leisure activity in the

09:31 world in the world is live music so bigger than baseball bigger than football bigger than soccer worldwide number one leisure activity live music and it's more and it's most unifying think about this where else can a Republican and a Democrat and an independent all sit together and sing in harmony and be harmonized in whatever they're doing live music right everybody I don't care what what if you're a Democrat Republican or independent you know the lyrics to Hotel California and you sit there and sing it together in unison and it's it's one of the only places that happens doesn't happen in baseball parks because there's two different teams in the Hayden church and they don't have any baseball two teams in the Hayden church live music is the only place where everybody is everybody there is there for one thing and that's to be unified in

10:19 whatever band is playing it's amazing how you can have an album listen to it over and over again at home but then you go see that band live and it's a totally different experience it's so much better isn't it no no no no question it is live music is a I tell people this all the time live music and everybody that's watching this has been they know it's a vibe it's a it's a feeling there is an ambiance about live music you don't get anywhere else and and it's something that you tell stories about music I can play a song and it takes you back yeah you can remember where you were who you were with and what you were doing good point um because that's what music does music creates memories live music creates even better memories because you enjoy it with somebody else yeah and you've got the collective energy of

11:07 everybody around you I think that's right we don't even know the metaphysics on that these days no question I think the group mentality of everybody on the same side no question I mean it just lifts everybody's spirits yeah no question no question album or live that's exactly right so my point my next question is do you ever see live music going away of course no never never not getting better and better it does get better there is a point though I think there's going to be a point where live music even expands so live music today is usually enjoyed we're together and we're at a venue but I see the day coming where live music will be enjoyed virtually virtually in the sense that pay-per-view or live music events that you that's an audio like a 3d room like a 3d room yeah I see

11:53 that coming someday we'll see what happens but um with AI you never know I think with AI I think you're gonna see that happen yep well that's about it's exciting where the uh name venue come from well here's what happened the company started off I named it notes live and notes is obviously music notes right and live is what we do so notes live was the name of the company I started dealing with the New York Stock Exchange and we started looking at symbols and uh and Paul Dorfman said you know some of the coolest companies in the world the name of the company is also the symbol you know what I mean and so there's some there's some thought that a lot of companies then put into that so we started thinking about all of the various symbols and actually venue obviously is a it's a five-letter

12:43 word that we turned into a four-letter word and uh it just it's just so descriptive of who we are it is and then the New York Stock Exchange worked with us to make that our symbol did you get a theosaurus out yeah exactly exactly I do that online yeah exactly word exactly if I can't pronounce one word exactly all right so then uh let's talk we've got a couple minutes here yeah absolutely talk business yep for someone who's watching this and they uh and they are interested in investing yeah what would you tell them as far as a brand new investor what kind of steps should they take and what would you recommend yeah so you know I'd love to have you as a shareholder um our symbol is venu traded on the New York Stock Exchange I would love you have you as a shareholder we are aggressively um disrupting the venue space we are well capitalized we have strong shareholder uh base and support um and I am

13:34 committed to building a balance sheet and a P&L so uh at the end of the day you would be investing in a in a space the music space the live music space that is exploding never been a time in history where the demand of tickets has been higher than it is today and there's never been time in history where the supply of new artists is higher than it is today so here you've got a industry with the high demand high supply we are the exchange we are where fans and artists meet and nobody is doing it better than we are symbols venue live by the way yeah great symbol venue live yep now uh somebody who wants to invest in one of the new places you're building is is that possible for someone to have a stake in the the next amputator absolutely and we have a great team that does that go to our website um venue dot live

14:26 as coach said and when you go there you can click on investing and you can look at all of the venues that we're building any place in the united states um and it will give you information on that you can also come to our offices um whether here in dallas or wherever and and use virtual reality to actually sit in any of our venues or buy a ticket come out to the ford amphitheater this summer and catch a great show i saw the steve miller being the last really good steve miller band was a great show we had this year but we had just so many great shows a fun place so someone should come and look at it because you can actually invest in one of the vip fire pit that's right spaces right yeah right and is that a lifetime ownership it is lifetime ownership and i tell people this all the time too at the end of the day the best way to understand what we do is to experience what we do and the best way to

15:11 experience what we do is come sit in my suite at uh at the ford amphitheater i did yeah you did dang right you did yeah jw roth folks and the symbol is venue dot venue and then the website venue.live then you dot live love to have your shareholder always great coach thank you yes see you later folks bye bye

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome in to the Financial Safari. Consumer advocate Thomas Lipscomb here with you alongside best-selling author Coach Pete D’Arruda. I'm excited about our content today because we have a special guest in studio. Coach, I love how you go out, you find visionaries, architects, people who want to make a difference in the world. And we have a great guest today. Yeah, his name is Jeff Truchon. Now, he's not in studio, Thomas. He is not. He's joining us. We're in studio, but he's up in Maine. Jeff, welcome in. Hey, Coach. Thanks so much. Glad to be here. Yeah, I've known Jeff for years, and he has been a staunch advocate for Bitcoin over the years, and he's getting more and more on that side. Jeff, tell us how you discovered Bitcoin and why you're enthusiastic about it. Yeah, definitely. So I first discovered Bitcoin in 2017, and like most people, you know, saw it run from, you know, $1,000 of Bitcoin to $20,000 of Bitcoin and wrote it off as a bubble and said, this is not sustainable.

00:53 There's nothing here that backs this. And, you know, I really kind of turned a cheek, so to speak. But then COVID happened and 2020 took place. And, you know, seeing kind of how the market responded to 2020 and, more importantly, how the Federal Reserve responded to 2020, we increased the money supply by 40%, printed $4 trillion. And, you know, no shorter than two or three months after the bottom of the market, the market was at all-time highs. So I kind of started to get a little bit dismayed and pessimistic about the future in the sense that, well, we really only have one option every time we run into a problem as an economy, which is to print more money. And when you print more money, of course, we know prices go higher, everything becomes less affordable, and people start, you know, they're basically moving from a place of, you know, working to thrive, and now they're working just to survive.

01:43 And I think we've seen that on full display over the last few years. So that kind of started me down this journey of learning about money. What is money? You know, the history of central banks, the Federal Reserve, what happened in 1971 when we went off the gold standard. And that led me to Bitcoin, and I went into it with an open mind and really spent about five hours studying the asset. And I came to the conclusion that this is the solution to our problem. You know, it's a really big deal. Most people don't understand it. And I think that creates, obviously, a great asymmetric opportunity, and certainly that's been on display for the last few years. You said the phrase, print more money, and it reminds me of the saying, there was a carpenter, and all he had is a hammer, so everything looks like a nail. And that seems to be the only solution our government ever has is to print more money. And it's really not a solution. It's a kicking the can down the road because every time they print a dollar, our grandkids are going to have to pay $100 back.

02:34 I mean, think about it. Yeah, that's exactly right. And my wife was pregnant at the time with our first child. So I'm coming at this looking at, you know, what type of life is my daughter going to inherit? What type of world is my daughter going to inherit? And how can I do my part to leave the world a better place for these future generations? And I believe Bitcoin is really that solution. I mean, you talk about the debt. I mean, prior to 2020, you know, our country was, you know, roughly $20 trillion in debt. I mean, this was a short four years ago. You fast forward to today, and we just breached $35 trillion in debt. In fact, in the last 36 hours, we've added $100 billion to our national debt just in the last 36 hours. So it's out of control. And this is a booming economy, right? I mean, the market's at all-time highs. Unemployment's starting to tick up, but it's been at historic lows. So it's kind of scary to think about what that's going to look like when the economy does start to soften substantially.

03:22 We say the market's at all-time highs. Yet when people call in from the radio show, we don't know them, obviously. They come in, they show us their portfolios. Many people are down. I mean, their 401ks are not performing like we see on TV, where the Dow has been up and down around $40,000, or $40,000 on the Dow, which is crazy numbers. But people's portfolios aren't really reflecting that. It's kind of crazy. We had David Walker, who's former U.S. Comptroller General. We've had him on the show several times over the last 12 years or so. And he was on a couple months ago. And he's very worried about unfunded liabilities. That's Social Security, pensions, you know, anybody who works for any federal government position, the federal government promises to pay them after they retire for a lot of money. And we don't have that money. He thinks we're about $150 trillion when you look at the real debt we have.

04:08 He said there's really no way to get out of that. He doesn't believe in any more money. He actually resigned as a Comptroller General back in the day. And he was in both Republican and Democratic administrations. He resigned because he said, I'm not going to sign checks that are going to bounce. We are basically signing. We're basically sending money all over the place that is not real money anymore, it seems like. It's so easy to send it when it's electronic, I guess. Yeah, it's pretty incredible to see what's taking place. I mean, you look at, you know, our country. I mean, we've been running a budget deficit since 2001, right? So, I mean, we're 23 years strong here and not turning a profit as a country. And even now we're running wartime deficits. So that's really the conclusion that I came to is that, unfortunately, mathematically, we're never going to be able to stop printing money, which means the dollar is really never going to have more purchasing power than it does today.

04:55 So that's what led me to Bitcoin is really understanding the characteristics of the asset as a store of value. You know, when the governments, global governments are printing money, you need to put your money somewhere where it's going to hold its value over time. You want to buy scarce, desirable assets. And for the longest time, that was, you know, stocks, that was real estate. But my belief now is that, you know, the most scarce, desirable asset that the world has ever seen is Bitcoin. And we're starting to see the world really kind of wake up to that, which is encouraging to see. That's important. Now, I learned about Bitcoin from my tech guy back in way back in the day in 2009. His name was Drew. And Drew was 22 years old and he knew more about Bitcoin than I did. And so then in 2011, we did a show called The Most Expensive Pizza because we had a guy on who spent a couple thousand Bitcoin to order a pizza.

05:41 He was proving concept. But that was when Bitcoin was hardly worth anything. So we talked about the guy who he wished that he had not spent those couple thousand dollars on a couple thousand Bitcoin on a pizza because, you know, what Bitcoin has done now. So at 2011, I said, gosh, Bitcoin sounds like a good idea. It was only like three hundred dollars a coin back then. But I could not figure out how to purchase it. It's a lot easier these days to buy a Bitcoin, isn't it? Yeah, absolutely. I mean, you know, this this is really the the the turning point, I think, 2024. We really kind of had the initial public offering of Bitcoin. So for those that have been paying attention, in January of this year, the SEC approved the opportunity for spot Bitcoin ETFs, which is really the first new market type ETF that we've seen since gold was announced as an ETF back in the 2000s.

06:27 So you've got BlackRock, the largest asset manager in the world. You've got Fidelity. You've got VanEck, WisdomTree, Franklin Templeton, you name it. I think there's roughly 40 different spot Bitcoin ETFs now globally, which allows people the opportunity to hold Bitcoin within an ETF in a retirement account. So it's a really big deal. I think it really kind of gives some regular regulatory clarity on the asset, which is as much needed and creates other avenues for people to allocate capital without actually going through the process of buying Bitcoin on an exchange, taking self custody of the asset. Of course, I believe that that's the best way to own Bitcoin if you're going to do it is to own it, you know, in a cold storage wallet. But for a lot of people, you know, that's not the avenue that they want to go. Maybe they have a lot of money tied up in retirement accounts and they're looking for an easy way to get exposure. And these ETFs are really a groundbreaking, you know, development in the Bitcoin space.

07:17 And oddly enough, funny enough, we talk a lot about technology and AI has been such a huge craze this year. And for the last decade, you've seen the QQQ ETF, which is the primary technology ETF, be just an absolutely massive winner for the last decade. As of last week, the BlackRock Bitcoin ETF, IBIT, has actually had more inflows year to date than the QQQ ETF has, which is just incredible to see. So the adoption is here. It's going to be gradual. You know, people are going to dip their toe in with small allocations. But this is going to continue to deserve a place in the diversified portfolio. And that's been our stance for the last couple of years here at Sovereign Wealth Management. There are some other strategies to do to get Bitcoin, too. I've heard folks buy MicroStrategy, that company, because they own – how many Bitcoin do they own now in their portfolio? That's a company by the tech company.

08:05 Yeah, so they're up to about 220,000 Bitcoin. So that's actually the way that we were able to get exposure to Bitcoin here at Sovereign prior to the ETFs being launched. We actually got into Bitcoin about a year before the rest of the institutional adoption started to kind of take place. So MicroStrategy is a very unique case. They're a business development software intelligence company. And they saw the writing on the wall in 2020 when COVID took place. You know, they were holding $500 million worth of cash on their balance sheet. And they realized that cash over a long period of time is a melting ice cube based on currency debasement. So they actually ended up taking half of that $500 million and they started allocating to Bitcoin. And they've continued to allocate for the last four years. And funny enough, when you look at the performance of the high-flying stocks over the last four years, MicroStrategy has actually outperformed NVIDIA by about 300% dating back to August of 2020.

08:55 So everybody talks about NVIDIA. Everybody talks about the AI craze. You know, Apple, Amazon, Meta, Google, you name it. Nobody's talking about MicroStrategy, but they're one of the best-performing stocks in the market for the last four years. Might be a good one to scoop up during some dips, correct? Maybe a couple of shades. Yeah, I think you want to, you know, obviously not financial advice, but you want to kind of do your diligence and understand the value proposition of the stock and what they're doing over there. I think you're going to see a lot of different companies follow suit. You're going to see a lot of people start to announce that they're going to adopt a strategic Bitcoin reserve instead of holding liabilities of a currency, which is what, you know, dollars are. They're going to hold a decentralized, fixed, scarce asset, which is what Bitcoin is. So I think they're a pioneer. They're a leader in the space. And I certainly don't. They're the first. I certainly don't think they're going to be the last. Now, today is Friday, August 2nd, 2024.

09:42 And I want to talk about last, I think it was last week or the week before, I saw that you were at the Bitcoin conference in, or the crypto conference in Nashville, Tennessee. What was it? Was it a Bitcoin conference or a crypto conference? Bitcoin conference. Okay, good. How was that? And what were like three of the main points that stuck out to you from that conference? Yeah, it was pretty incredible. I had attended the Bitcoin conference in Miami in 2023, which was amazing. And as soon as I heard that, you know, Donald Trump was rumored to be speaking at this event, I decided that this was a must-see event. So I ended up making the trip down. It was incredible. There were roughly 20,000, 25,000 people that were at the event. They were at full capacity for fire code when Donald Trump took the stage. I would say that the three biggest things that I really took away from the conference, first of all, you know, if you would have told me four years ago when I first got into Bitcoin that we would be, you know, discussing, this would be a topic of conversation for presidential candidates.

10:37 I probably would have laughed at you. You know, at the time we had Sam Bankman-Fried, FTX. I mean, the crypto environment in general was a complete mess. But, you know, like you mentioned, we had Robert F. Kennedy Jr., who spoke for about 45 minutes and announced, you know, his intent to adopt the Bitcoin strategic reserve for the United States. Also announced his intent to accumulate $4 million, or excuse me, $4 million Bitcoin, $550 per day if he's elected president. So that was an incredibly powerful speech, not just from a Bitcoin standpoint, but he understands the debt. He understands where we're headed as a country and the importance of this asset. I would say the second biggest was obviously Trump being there. You know, Trump really completely took a 180-degree turn relative to where he was a couple years looking at Bitcoin. He viewed Bitcoin as a threat to the dollar, which most people that understand the asset realize that's not the case.

11:27 I believe that Bitcoin will further strengthen the dollar against other global currencies. So he was very, very warm as it pertains to Bitcoin. Right now, the United States owns roughly 200,000 Bitcoin that they confiscated from the Silk Road. And he made a pledge that he would not sell the Bitcoin and that he would actually start to build a strategic stockpile, is how he referred to it, which was phenomenal. And then I would say the third biggest that most people really aren't paying too much attention to is we had Cantor Fitzgerald. Howard Lutnick was actually at the conference, who's the CEO of Cantor Fitzgerald, which is one of the 24 banks, one of the 24 primary dealers with the Federal Reserve, who mentioned that they were going to roll out a $2 billion offering to start allowing for Bitcoin-backed loans. So this has been something that I think is in the works for a long time, the opportunity for you to continue to hold your Bitcoin and actually take loans against your Bitcoin, which allows you to own the asset without selling it.

12:21 So the institutional adoption is here. The regulatory clarity is underway. And I really couldn't be more bullish on the asset looking forward. You just have to understand that this is a very volatile asset. So you need to make sure you're managing your position sizing accordingly. Yeah, it bounces around a lot. So I think I've talked to a lot of folks who say, I'm going to wait until it comes down to buy. But there's no guarantee it's going to come down to where their target zone is. I mean, you know, I think the days where when I bought, I've got three over like 3.3 Bitcoin right now. I'm not a big holder, but I have 3.3. And my average cost is like $30,000. So I thought I was overpaying that. I mean, that's a lot of money. I mean, my first car, the first car that I actually bought myself, a Mazda RX-7 convertible, a 2000 and, sorry, it's a 1991.

13:07 I get old, you forget what decade you're in or what century you're in. In 1991, I paid $29,900 for a Mazda RX-7 convertible. The last year they made it, a white one. The girls loved me back then because of the car. But, you know, I think about it costs more for one Bitcoin back when I bought it than it did that car. But we have to put that in the back seat, so to speak. And we have to know that we are diversifying our assets. And so you might have to hold your nose and buy it at a more expensive than what Coach Pete paid for it. Or if it ever comes back down to that $30,000, I'm going to, I already told Thomas the other day, I'm going to buy three more if it ever comes down to $30,000 again. You set a target when you invest anything and you don't chase. Yes. Well, really, where I've gotten burnt the most in the stock market is when I've chased a stock up and finally bought it.

13:54 Oh, I finally caught it at way high here. I'm going to buy it now. And as soon as I buy, guess what? I am calling the top when I buy things because it goes right back down. So never chase a stock or crypto, but set a reasonable zone and talk with a financial planner first to make sure that you can really afford to buy anything. Because it is a risky asset. We agree on that. And if you need the money tomorrow, it's not a good place to put money in risky investments today, is it? Yeah. I think in general, I mean, the two most important things when you're allocating capital, you want to look at risk tolerance and time horizon, right? Time horizon is incredibly important. I believe if you're investing in Bitcoin, you need to have a time horizon of at least four years, right? When you look back at the halving cycles of Bitcoin, that's how you want to look at it. Yeah. Bitcoin is a really unique asset. A lot of people are worried about buying the top and they think they got in late. That's kind of one of the famous sayings in Bitcoin.

14:41 I believe you're never late to Bitcoin when you look at the macroeconomic landscape and how things are unfolding. Bitcoin is really unique because it's the only asset in the world where the supply is inelastic to demand. And what I mean by that is it doesn't matter whether Bitcoin is $6,000, $60,000 or $600,000 a coin, there will never be more than $21 million. So it's unlike any other asset out there where the supply of the asset is completely elastic to demand, right? So people want to build homes, the price of homes are going to go up, the supply of homes are going to go up. If people want to invest in gold, if gold goes to $3,000 an ounce, they're going to dig more gold out of the ground, right? If a company does phenomenally well and their stock goes up by a factor of five or a factor of 10, a company is going to issue more stock and dilute its shareholders, right?

15:27 With Bitcoin, there will never be more than $21 million. So I'm personally with a long time horizon, less concerned about when I get into Bitcoin and I'm more concerned about how many of those 21 million am I going to own, right? That's the most important factor to consider. And when you look at the runway for this asset, real quick, there's roughly $900 trillion of total wealth in the world. So when you add up all the assets that people store their value in, right? So you look at real estate, you look at stocks, you look at bonds, you look at gold, every asset in the world where people park money in an expectation to grow their capital, there's about $900 trillion worth of wealth. Bitcoin today is roughly a $1.3 trillion asset, right? So I look at that and say Bitcoin is one-tenth of 1% of all the wealth in the world in terms of the total addressable market.

16:14 And to put it another way, 99.9% of all the wealth in the world is stored in assets outside of Bitcoin, right? So when you look at the characteristics of the asset in relation to every other asset out there, I think it has a tremendous amount of wood to chop and a tremendous amount of opportunity in front of it, particularly looking at the global macroeconomic landscape and as things continue to evolve across the world. Great points there. Finally, one final point here. When we talk about Bitcoin and then meme coins come into conversation, a lot of folks, there's a lot of junk coins out there. There's probably, I don't know, what, there's 10,000 or more different kind of cryptocurrencies you can invest in? Is that crypto? Probably about 20,000. 20,000. So what do you tell folks who say, well, I might get Bitcoin, but instead I'm going to buy these that are cheaper?

17:00 What would you say, like some of these other ones that come? I mean, every day someone is inventing a new coin and rolling it out on the market for a fractional of a penny cost, and people pile money in there and lose all that money a lot of times with rug pulls. What would you tell somebody comparing Bitcoin to even something like Ethereum? What would you say to them? Yeah. So I think the most important thing is to do your diligence and understand the asset that you're investing in. I know a lot of people get scared and they see Bitcoin is $65,000 a coin and they think it's too expensive. So I'd rather own Ethereum or some other coin that's about $1 or $5 or $10 because it's more affordable. Right. I think the number one thing that I would say is it's important to understand that you don't need to own a whole Bitcoin, right? One Bitcoin contains 100 million Satoshis, which I kind of look at that as if a dollar has 100 pennies, right?

17:47 So you can own $1 of Bitcoin, you can own $5 of Bitcoin, you can own $50 of Bitcoin. You don't need to buy $60,000 right up front. So I wouldn't look at that price as a deterrent to you getting invested in the asset. The beauty of it is that it is really infinitely divisible and you can allocate as much capital as you like. I personally am not a believer in a majority of the broader crypto space. I think a lot of it is venture capitalists that are looking to, quote unquote, pump and dump and really kind of scam investors out of their capital, which is a really unfortunate aspect of the industry. And I think it gives it a bad name. I think that was on full display in 2022 during the FTX collapse, the Celsius, three arrows, capital, everything that went underwater. So I always say, you know, look at Bitcoin, study Bitcoin, start there.

18:33 And if you decide that you want to branch out into the other crypto assets, you really want to make sure that you're taking time to understand the value proposition of the asset and that you're doing your diligence before you place any capital there. So the tooth fairy instead of coins could give you a couple of satoshis. What do you call them? A couple of satoshis. Satoshis. That's right. Thomas, you've got to play the tooth fairy for four kids. I do. I do. I think I might convert some to a satoshis. I think that's the play. Hey, great interview, Jeff. I want to have you back on in the future. We need to do one on cold storage because a lot of people are getting their money stolen online. And we'll go through maybe a tutorial on how to get the right wallet. And you shouldn't buy them from a third party, by the way, the wallets. Make sure you buy it right from the cold wallet company. But then you have to worry about somebody who made the wallet at that company. Maybe they put a secret code in these cold storage wallets.

19:19 So that's a whole other segment. But I'd love to have you on talking about that in the future. Yeah, absolutely. And again, I think those ETFs are a great way to avoid some of the challenges that come along with cold storage and self-cresting. Great point. Great point. His name again, Jeff Truchon. Jeff, name your company again. Sovereign Wealth Management, located here in Augusta, Maine. Thanks a lot, buddy. We'll talk to you soon. All right, Coach. My pleasure. Thanks for having me on. And folks, we'll be right back after this. You're getting there.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Each and every week, I talk to very interesting people. And the most important part is that I shouldn't be the only one hearing it. I really feel that if these people make sense to me, that everyone out there needs to hear it. So, stay tuned, folks, and I hope you enjoy this newest weekly segment on Coach Business. Alright, welcome back into the Financial Safari. Consumer Advocate Thomas Lipscomb in studio alongside best-selling author Coach Pete D’Arruda, as well as Ray Lucia and Maddie Amini. Welcome back in, guys. Hey, Mr. Amini. A lot of people are curious about how to make money, how to make the money they see on TV instead of getting trapped in a CD at a bank at maybe 5% or whatever. How do you get ahead in this game, this money game? The way to get ahead is to make big returns or find really good investments

00:49 or developing things. Well, you want to talk about developments, I guess, don't you? Yes, we believe in real estate development, especially right now. And, you know, you can build in California, for example, since I live in California and San Diego, we're seeing a lot of bonus density loss changing in California. So, we're able to, in one area in California, take a 4,000 square foot lot and build 26 units. In fact, we looked at another development deal in California, right by the water, you know, coastal, less than one acre, we're able to build 198 units. So, when you talk about real estate- It's amazing when you think about it. It is. One acre, 100, because you're going up instead of out. You're going up. The laws are changing. They're allowing us to be able to build. The rules are

01:40 changing. And when you're able to take such a small piece of land and build up and build lots of units, that's where you're going to get the biggest returns on investment in real estate. So, a lot of people are looking for the right investment in real estate. It's not going and buying a single family residence at the highest peak of per square foot. It's about building square footage in areas where they're allowing you to build up and stack on each other. Is this zoning? They've changed the zoning requirements? Is that why people are able to do that now? Or people never thought about building up? It is. It's, you know, the housing crisis that we have in California alone. And if you go to White House's website, they're talking about in the future- Whitehouse.gov, I guess is it?

02:26 Yes. And what you're going to see is they're going to be funding billions and billions of dollars for a lot of these office buildings to be actually converted into multifamily. Well, that's interesting. So, taking some of these vacant office buildings and now they're going to be big apartment complexes, I guess, right? Absolutely. Wow, that's an interesting concept. And prior to that, what we're seeing in certain geographic areas is being able to bring these developments to investors out there that are looking for a great return and being able to, you know, point out where those properties are is what we do at United Legacy. Now, when somebody wants to invest in something like this, what do they do? What's the steps of that? They can try to do it themselves, but it'd be almost impossible, correct? It would. You know, you need to know how to develop. You need to pick out the geographic areas where this is possible all across the United States and team up with a good organization

03:17 that can help you through that. And with United Legacy, that's what we do is we're bringing in the average American that wants to invest and put them in front of these types of deals. And so, that's why you're one of the specialists at Retirement Master. Yes. Because your specialty is this area right here, the real estate area, the way to maximize the gains on real estate and also invest the right way into real estate. We can't generalize real estate anymore. Is it a good time, you know, water cooler talk, right? Is it a good time to buy? Is it not? Is it in residential? Is it in commercial? You know, we have to ask a lot of questions and we have to be informed. We need a strategy. The world is changing. You can't be a dinosaur and you have to change with it. It's a turning point in the Great

04:07 Reset. When capital is getting more expensive, prices are still at the peak. How are you going to make money in real estate? And so, we believe, you know, there's two ways. One, invest into short-term debt and trust deeds. Two, pick out geographic areas and investments where you could build a lot of square footage with these bonus density. This law is changing. All right. Let's go back to number one, short-term debt and trust deeds. We talked about that earlier in the show, but here's what happens in radio. People come and go, they get in their car, they get out of the car. People might not have heard you on segment two talk about trust deeds. So, explain that just briefly, what a trust deed is and how people can participate in that. The average person could participate, let's say they have $250,000. We secure a $500,000

04:55 property. You're able to get, let's just say, a 10% return on that up front for a 12-month period. Your name is on the trust deed. You are secure with that million-dollar asset. And so, you got to ask yourself a question. Do you believe in a 12-month period, wherever that property is located, that you'll be able to pick and choose, will the values of that property go down by 50%? And so, you're pretty much protected with your principal. You're able to get double-digit returns. And what I like to compare it to, Coach, is to buying an investment property. If I were to go in this market today and buy an investment property, I would have to at least put 30% down. You have a rate now with investment properties with prime borrowers that are buying an investment. It would be about a 9% interest rate

05:44 in today's market. I have to pay my taxes, my insurance, the HOA, and we have to cash flow. And most of the time, it's pretty hard to do that. So, a lot of retirees do not want to even be the property owner. And if you're in California, you couldn't even collect rent during the pandemic. So, who wants those headaches? And a trust deed, we have a great saying, sometimes it's great to be the owner, sometimes it's great to be the loaner. You become the bank. Don't let the word trust deed scare you away. You become the bank. You're not just investing in the real property. You're lending the money. And so, we, as a mortgage bank, underwrite the client. We get an appraisal on the property. You get to pick and choose the property. And we have plenty of room in the

06:34 equity of the property to ensure that we're going to get paid back. And on the other end, why would someone not pay the principal back when they got so much equity in the property? They're going to find whatever way to get that loan back to you. And so, we secure that. We protect the principal. And investors are able to make a 10% return on a monthly basis, in some cases, up front. Now, if you want to find out more about how to, just some information on what a trust deed is and how you could qualify for it, if it makes sense, all you have to do is text the word trust to 600-700. Again, the word trust in the body, the number you text to is 600-700. It just makes sense to find out some information and get that true diversification in the real estate world. You brought up a good point. If someone tried to buy their own property as an investment property, they'd pay about a 9%

07:23 interest rate, which there go the profits. I mean, it's sort of like working at a restaurant and seeing somebody eating all your food before they weren't selling it to anybody. You got the interest rate eating your profits up at 9% interest you have to pay. And could you even get a return of 10% to 12%? Probably not. Murphy's Law would go against you because if you had to make it, you'd probably lose money. Absolutely. It happens a lot of times. So just find out about how to have real estate work for you, not against you. I think that makes a lot of sense. Now, point number two was on that. Besides trustee, what was the next point you made? The real estate development. Development, yeah. Being able to build a lot of units with what we're going to see a lot of micro cities in America, in the downtown metro areas. We're building all around. I'm here in North Carolina visiting you and I see you guys are building everywhere. And so it's all compact. And you

08:11 know, you got the retail, the mixed use. So development deals where you could build square footage, get into these investments, they're going to make you money. You know, when you said micro cities, I picture that with that show about those little tiny houses that people live in. The small ones. You've seen them, right? They look like little work sheds, people living there. I love those. Do you? I'd love to move into one of those. Oh yeah? My wife wouldn't. There you go. You might be forced to move in one if you get in trouble. They've been in the backyard where he has to go to the backyard. I have no comment. You know, we just celebrated our 50th wedding anniversary. Well, congratulations. So I'm very used to sleeping on the couch and sleeping in other places, but I think we're okay for the time being. Yeah. Well, I mean, it's just about making sure that you understand what your spouse wants.

08:57 To stay out of trouble. I wouldn't want to, I mean, I've seen way too many people get downsize from a big house to little house around retirement. And then all of a sudden they're calling us, telling us that they're getting divorced. So I don't know if there's no, I can't, there's no scientific correlation that I can verify yet, but I think so. I mean, I like my space. I don't know, Thomas, I know we've agreed you like space too. I am most certainly introvert. What about you? I love my space. We have a big house, but for some reason my nine-year-old and 11-year-old love to come sleep with mommy and daddy. Oh yeah. Well, that always happens. The big bed. Maybe we should downsize, but my wife wants a bigger home, double and square footage. Wow. And everyone sleep in our room. Oh, that's how that happens. Well, when you have a party at your house, where do most people end up? In the kitchen. Right. So the kitchen is a very important part of the house. To me it is. That's where I go get

09:45 my late night snacks. There you go. So we've got a couple minutes left in the show. Ray, we're in the year 2023. I mean, I never thought we'd ever get to the year 2020 or 2020, but here we are. And a lot of people are wondering what's going to happen in the next 10 years. I know you don't have a crystal ball, but what do you see happening in the money world the next 10 years? Well, I think technology is going to play an ever increasing role in virtually everything that we do. So there, you're going to see trading strategies coming out of the woodwork. You're going to see people like my firm, the CPA firm going through transitions because AI is going to start doing pretty much all of their jobs as far as the technical side. It's one of the reasons why

10:32 I'm in the consulting business with firms such as that to get them more on the advisory side and less on the mundane filling out returns and all that, because a lot of that's going to be done by AI. Listen, I am an optimist. This is the United States. We are in troubling, troubling times right now. And I think as it relates to your financial plan, your retirement plan, whatever the case may be, it does pay to have a very long-term perspective on things such as the stock market and such as real estate, which, you know, and I'm listening to the presentation here and it clearly makes a heck of a lot of sense to me when you can go short-term, get decent rates of

11:19 return and wait out the potential storm that may be ahead of us. So once again, if you can run your financial life a little bit more conservatively than perhaps we ran it up to and including COVID, I think most people will benefit by that. How important is it to have income built into your retirement portfolio? Well, it's critically important. I mean, I'm at retirement age and I'm semi-retired right now. You're never going to retire, Ray. You're like me. You're too happy around the money world. I love doing what I do. And I, you know, with the CPAs and all that, it's really been a lot of fun. And then hanging out with guys like you where we get to mastermind like we did all day today is really a lot of fun. But I think we just have to be a little bit more careful with the riskier

12:10 investments and focus more on income than on growth. Maybe brought that up in the real estate market. He doesn't see, from what I can hear and understand, he doesn't see where there's an upside upside in a lot of traditional real estate. Go out and buy a condo, rent it out to somebody. Buy a small apartment building, a duplex, a fourplex. He doesn't see an upside because the interest rates are too high. I would settle on something that gave me some kind of either guaranteed income or very safe and secure income. Well, let's get that total retirement plan done, folks. And Thomas, we have 10 more spots open, I think, here. Let's give that opportunity to folks. Folks, if you want your very own Coach Pete's Power Plan, it's 22 steps behind the scenes giving you that retirement and retirement income

12:56 plan that you deserve. Thomas will tell you how to do that. It's no cost or obligation, by the way. Folks, we make it very easy. Just call 800-661-7383. 800-661-7383. You can also text keyword plan to 600-700. That's plan to 600-700. You can also change the amount of business. You can also change the amount of business.

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Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Each and every week, I talk to very interesting people. And the most important part is that I shouldn't be the only one hearing it. I really feel that if these people make sense to me, that everyone out there needs to hear it. So stay tuned, folks, and I hope you enjoy this newest weekly segment on Coach Listen. And welcome back into the Financial Safari. Consumer Advocate Thomas Lipscomb here once again, alongside America's Wealth, Financial, and Income Coach, bestselling author, Coach Pete D’Arruda, as well on the line, I was going to say in studio with us, as well on the line is Mr. Phil Graham. Phil, you're so inspiring. It feels like you're sitting right here with us. And I've been to the studio multiple times. Yes, you have. Yes. Where are you joining us from? I'm visually picturing myself there right now.

00:46 Where are you at right now? I am sitting at my desk in Lake Norman. Let's talk to somebody if they're asking themselves this question, maybe they've asked some friends, how much risk can I afford? So, Phil, let's say somebody's 55 years old right now, and they're asking themselves, how much risk can they afford? What kind of answer would you give them? Coach, I remember one time I asked a lady, she was in her 80s, she was retired, and she had a bunch of money in the market. And I was like, Mrs. Jones, if you doubled your money tomorrow, would you change your lifestyle? She was like, well, no, Phil, I've lived within my means, and I'm happy. Maybe I'd take an extra cruise or do something special with the grandkids, but no, I wouldn't change my life. And I remember going, well, Mrs. Jones, if you lost half your money tomorrow,

01:33 would you change your lifestyle? Oh, by all means, Phil, I would definitely change because I'd be scared to death. That's thought-provoking when you think about it. Then why is your money set up like you're trying and hoping and praying to double it, but putting it completely at risk? When you're telling me you already have enough, we need to be more concerned about not losing it, but still getting a competitive rate of return. Correct. Well, then the next question is, what types of risk are there? When we talk about risk, it's not just stock market risk, is it? There's inflation risk, which was kind of off everybody's radar for the last 10 years, and it came back with a vengeance, thanks, Biden.

02:20 And there's tax risk. I can guarantee you, well, we already know taxes are going to go up next year. Looking forward to that. They're going to have to continue to go up, because who's going to pay for this billions and billions of spending that we're doing? Every time you give money away, when you hear the government doing it, there's no such thing as government. It's us, the people. Without us, the government has zero. Zero dollars. And I love asking people, who's going to pay it? And people a lot of times will go, oh, the Americans. I'm like, ah, no, wrong answer. We're the Americans. The right answer is taxpayers. Yeah, well, that's right. Only 50% of Americans approximately actually pay income tax. Yeah. But yet everyone can vote, and they can vote for politicians who say they'll raise taxes. Yeah, because they don't care.

03:06 They want the free stuff. Well, they love it, because if I'm not paying taxes, I'm going to vote for the guy who says he's going to give me more stuff, because it doesn't matter to me. You're going to take the money from the guys paying taxes. So we got- Doesn't make any sense. We got market volatility. We got inflation. We have taxes. Those are- We have healthcare expenses are going up and up and up, partly because we're living longer, which is a good thing, but it causes a lot in healthcare. Luckily, down here in the South, we pay much less. Coach, you and I have some friends up in the Northeast. They're paying over $200,000 a year today for nursing home care. Wow. Well, that'll burn through a million dollars really quick at $200,000 a year. Well, nursing home, big thing too. Now, the traditional long-term care policies is not the only way to make sure you're covered for nursing homes, correct?

03:53 You know, there's a lot of new options, like the traditional monthly or annual payment where you buy long-term care. Yep. Those have kind of gone away. The insurance companies had to keep raising rates, and it just became unattractive. Didn't make any sense to have a policy like that if you really didn't know what you had. If they could keep raising the fees or the cost for it, and also lowering your benefits as a trade-off for lowering your premiums, that wasn't a real policy in my opinion. I've never offered one because I didn't like the fine print. You know, I've done a lot of work in the last few years with what we call asset-based long-term care where- Me too. You know, for example, if you had $200,000 that we allocated to this account, it's still going to earn interest. But if you needed that money for long-term care, they might give you a 5X or a 2X, depending on your age when you bought it.

04:42 You get a multiplier where you're leveraging that, and all the benefits are tax-free because it's for long-term care. So it's a way that you're kind of self-insuring, but you're getting a multiple on your dollars, specifically for long-term care. It's something we look at and need to address because I can tell you, you don't want Medicaid to be the answer. If you have money, becoming a ward of the state and being stuck in a Medicaid bed when you have money is not what you want to try to figure out. You want to kind of plan ahead for this potential expense in the future. Yeah, you don't want to become a ward of the state, they call that there. Also, life insurance, some of the new life insurance policies will enable you to use the death benefit while you're still living to pay for your long-term care.

05:31 That makes a whole lot of sense. Tax-free too, by the way. You know, life insurance is such a really unique tool that sometimes people turn their nose up because they're, you know, maybe from the, you know, the old policies from the 80s or variable life or something, they just have a bad taste. But what's very interesting is a lot of the banks, I'm not talking about bank employees, I'm talking about the banks themselves, heavily put money into life insurance policies. It's called a BOLI, a bank-owned life insurance. For that leverage, the wealthiest families in America use life insurance, not necessarily for the death benefit, which is just an added benefit, but for the ability to take withdrawals potentially tax-free.

06:20 We all think about Roth IRAs, but there's limitations and all these different things, but some cash value life insurance policies can come out tax-free. And then you add what, Coach, what you're talking about on there, the ability to access the death benefit while you're still alive. Beautiful. For either, you know, critical illness or long-term care, home health care, it's an amazing tool that for some people could be a possible solution to solve multiple problems. Well, it's spectacular because if you pass away, there's a big death benefit. If you don't pass away, you can use the death benefit to pay for what you want. But even after the, like, let's say you're only a couple years in, you have probably paid any money in there, and now you're taking hundreds of thousands of dollars out a year of money you never put in to begin with out of the death benefit to pay for your long-term care, and you do it all tax-free.

07:12 I mean, it's a bonus plan. If one of the plans, Coach, has return of premium, meaning you can get your money back, so it's like the only three things that could possibly happen, you're covered. If you change your mind, you get your money back. If you die, your family gets the tax-free death benefit. If you go, if you need home health care, assistance living in a nursing home, you get access to the death benefit for that. So literally, like the three things that can happen to you in your lifetime, there's a 100% chance one of those three things could happen. The tool works for that. We don't want the death to happen ever, but it happens. So we want to make sure we're compensated and our family doesn't have to change zip codes because a lot of people who don't have life insurance or don't have money put aside, and they're the breadwinner of the family. When they pass away, the bank doesn't care. I mean, they need that payment or they're kicking you out of the house. The tax man doesn't care either, by the way.

07:57 They need the payment or they're auctioning your house. And by the way, you never – and we're talking about risks, the types of risks to begin this segment, and that's where we still are in this conversation. One of the risks that people never talk about is real estate. Is real estate guaranteed to go up? Man, I just watched a video the other day, Coach, on these Airbnbs and VRBOs that so many people bought the last couple years because they wanted passive income. Right. And literally this summer, they've gone from 80% occupancy to zero. Wow. And they're sitting on these half million, million dollar mortgages that they bought at the top of the market. I think there's going to be a flood of houses coming back on the market that's going to drop prices, even with interest rates being high. And if we see interest rates tick back down, I think we're going to see prices drop again.

08:45 Yeah. Well, the taxes are – It's not permanent. That's true. You owe tax on the real estate every single year. So even if you pay your house down to zero and you say, I'm fine, you still are not what we call tax-free. So you can't get on the TV or the radio and scream, I'm tax-free because you're never tax-free if you own real estate because they're going to tax you. And then we talked about it. The commissioners, county commissioners, and the city commissioners get together every year and decide how much is going to increase or keep the same your real estate taxes. We've had three tax increases on our property here in the last five years for a total of over 30%. See, they only tell you 10% of the time. And guess what? We don't have that many new people moving to town. So it's not like the cost of the city is going up. Well, you see what they spend to build a new school these days. I think my school probably cost $100,000 total.

09:31 It was a cinder block building back then. And now they're building – they built one down the road here in Wake County for $98 million the other day. And they probably already have trailers outside because it's not big enough. You know, back in the day, we had like one or two of those carts they would wheel through to school. It had the projector on there. Yeah, the AV cart. When that came into the classroom, you knew you were going to have a good day. Or substitute teacher. Either one was good. But nowadays, every single room has built-in everything, built-in TV, not even VCRs anymore, built-in streaming, all this kind of stuff. So that's fine. I'm glad the kids are getting that. But who's giving it to them is anyone who owns any property. If you own a car or a house or a boat or anything like that. Even if you don't have kids or grandkids in the area. They don't care about that. I mean, you're going to get taxed. So you need to make sure your money is in the most tax-efficient manner, the places it can be, and try to reduce taxes.

10:17 But what I'm just saying, when people think that real estate has no risk, it can go down in value. And also, you owe tax on that real estate every single year. And what we're seeing, unfortunately, is that tax increases with a double whammy. Because the value is going up with the real estate, and the tax rate goes up at the same time. So not only is it – it's fun to look at your value go up until you realize you've got to pay taxes on that new value. And also, they realize the county commissioners just met, and they increased the tax rate. So that's a double whammy, and no one's happy with that. But again, nothing wrong with real estate. It doesn't go away. But not all your money should be there. And real estate's not going to give you a lifetime income. Well, and Coach, I think the key point takeaway is it's not risk-free. Right. There is risk involved. And you may love it, and it may be a tangible asset, and those are all great things. But it's not risk-free. Just know the risk of what you're in, and also know the risk of not having a true plan.

11:05 And that's why we talk over and over again about the power of having a Coach Pete's power plan, which is what we call the total retirement plan. 22 steps behind the scenes, encompassing everything from Social Security, long-term care, taxes, taxation, real estate, all the things you have, and we categorize things for you to make it easy to understand where you are right now. Then we figure out with you and your family, or you, if you don't like your family to know, if you're going in the right direction or not. Some guys don't want their family to know anything. Right. So that's okay. One guy said, Coach, the reason I fly first class all the time is because if I don't, my daughters and sons will when I pass away. So you need to make sure that the number one person or persons you and your spouse are taken care of. But then you also need to make sure that if something goes wrong with your lives, or if you're not here anymore, your next of kin is also taken care of. So we do all that in the Coach Pete's power plan. And we've also got a goodie bag of all the things we've talked about today,

11:53 a grab bag of three books, a box set, and the fee and risk worksheet, and also the fee worksheet. We're going to give all that and a plan, a golden ticket for your very own total retirement plan for the next 10 of you who call right now with at least $200,000 dedicated to retirement. We've seen others charge over $1,000 for this, but as long as you have at least $200,000 dedicated to retirement, this offers for you. And our strategies work very, very well for those of you with over a million dollars dedicated to retirement. Thomas, tell them how to do that. Sure. Just call 800-661-7383. 800-661-7383. Or text keyword PLAN to 600-700. PLAN to 600-700. 200-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800-800

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Each and every week I talk to very interesting people, and the most important part is that I shouldn't be the only one hearing it. I really feel that if these people make sense to me, that everyone out there needs to hear it. So stay tuned, folks, and I hope you enjoy this newest weekly segment on Coach Business. Well, folks, welcome back into the Financial Safari. Now, this is the time of the show where I go out across the world and I talk to people who are making a difference, and this week is no exception. Matter of fact, this week I'm very excited to have Miss Van Euron. Now, if you've heard that name, maybe you have, maybe you haven't, but Van is the owner of the Angus Barn here in Raleigh. Van, welcome in. Thank you so much, Coach. It's such a pleasure. I've seen you a lot over the years in your restaurant. Well, and I appreciate that very much. You are a familiar face around there, and everybody there

00:50 loves you. I love everybody there, and so I love the food, too. The food is really good, and anyone who hadn't been to the Angus Barn needs to check it out, but Van, I go there all times of the year, all different days, and it's crowded all the time, so I think you're not a secret anymore. Well, I think you've discovered some of our little places that used to be a secret, too, like our meat locker and our fire pit and places like that. Now, the meat locker is inside-outside, so technically it's listed as outside, right? Yes, well, it's for smoking. Smoking cigars. When everybody, when they changed the smoking law in North Carolina, all my smokers were going, what are we going to do? And I was like, oh, don't worry, I got a place. Of course, I didn't have a place. I'm like, what am I going to do? So I took an old room that was a meat room and turned it into a cigar bar, but then, of course, everyone back there wants to order dinner, and so, of course, we do full menu

01:39 back there, and now it's ended up where you can go as fancy as the wine cellar or as relaxed as the meat locker. Me and Marty Hensley used to go to the meat locker all the time. We still do once in a while, but we went there one time four days out of the five in a week. That's way too much. I said, Marty, we have a problem here. That's awesome. Hey, you don't even have to go there and order any food. You can just go there and bring your own cigar and sit there and enjoy it. It's great to see, I mean, see everybody who knows anybody's around the Angus Barn. I mean, that's when I remember when I was in college, the rumor was that political deals would happen. People would fly into the airport, which is right there. They'd meet at Angus Barn for their meeting, then they'd go back to the airport, fly away. So it's more of a destination type place, and it takes years to develop that kind of camaraderie with the public, I think.

02:24 Right, right, and it just takes a lot of employees and people that I work with that really care and that know how to treat people right, because you can have the greatest building in the world, but if you don't treat people right, you have nothing really. You've had employees that have been with you for a long, long time. I've had so many in the 20-year club that we couldn't fit them all into one room for the party. So I'm very blessed with the employees. Now, one of the things people may not realize, you have something called the wine cellar downstairs, and you've got two private dining rooms down there. Some, one fits almost 40 people, correct? Right. Yeah. We built those rooms because we won an award that put us on the map internationally, where there's only 86 restaurants in the world that actually have it. It's called the Wine Spectator Grand Award. And then everyone was coming in, they said, oh, we want to see your cellar,

03:11 because we've heard you won this great award, and we just had a basement full of boxes. And so we said, oh, I think we need to build a cellar that matches the award that we won. So that's how that came about. Wow. I didn't realize that. Now, the wine cellar down there is one of the largest, I know, in the state, but in the southeast? It is the second largest in the country. Burns is first, and it is the only time in my life that I am okay with being second. Because I've been to Burns. I love Burns. I love their wine cellar, but I just don't want their inventory. Oh, man. I went to Burns one time with Todd Schnitt, who's a radio show host. Right. That's where he's located. Had me to Burns. I hadn't heard of it. And when he took me down that wine cellar, that's the largest wine cellar I've ever seen. It goes on and on and on. I can only imagine what the inventory cost is. On and on.

03:56 What do you think their insurance is? For all that wine? I don't know. Now, tell me, you've done a lot of work with charity over the years. Yes. And you've championed that a lot. I went to a Boy Scout event one time over in the Pavilion. Yes. And unfortunately, I went that day because I won a lot of things at the auction. Right. And so I ended up bringing a lot of stuff. So I helped the Boy Scouts out a lot more than I even planned to. That was great. But tell me about the vision that you had to add on. Because, I mean, you've always been full in the restaurant. Then you added to the Pavilion. And for years, we've gone there for Thanksgiving dinners. It's been the greatest thing ever. Right. Well, we had that land down there. My father actually had it zoned to be a little boutique hotel. Because at that time, there was really no hotels in the area. So we really had been getting so many requests for large groups.

04:44 I'm talking groups of like over 200. Which the only room we had in the Angus Barn was the upstairs dining room that could seat maybe 180. And we could only book that maybe on Sunday night. So we realized what people really needed was a space to have events. Yep. So then we had to go through the rezoning process, which that took forever to get it rezoned. And then we decided to use a lot of my dad's old, like just stuff, building materials, trusses, 10 old stones that he had collected to do all the Daryl's restaurants. Ah, I remember the Daryl's. Those were his. And so he had warehouses full of just stuff that was going to be used to build the next Daryl. So we used most of that stuff in building the pavilion.

05:33 We wanted it to be a space where people could enjoy huge groups of whatever kind, corporate, weddings, you know, rehearsal, dinners, you know, picnics, company groups of all kinds. And so we've we really didn't know what we were doing because when we first did it, because we're used to serving meals, you know, individual meals. We're not used to serving 400 people at one time. That's a lot of that takes a talent, too. Yeah. It has to be hot. You don't want to store it like in warming ovens. You want it to be fresh off the grill. So, you know, people know they know the difference in that. And so we it took us a while to really get that concept down and figure it out. But and we learn every day and we learn every time we do. Yeah. And I've gone to group events at your place and everything comes out like you were individually ordering it.

06:21 But most people, when they think of a group event, they think of the cold, soggy buns and the maybe the chicken. It's not really tender. You know, the rubber chicken that's coldish, warmish kind of thing. You did a real good job. Actually prep everything upstairs in the regular Angus Barn. But we we grill it off, cook everything off down at the pavilion. And that's what makes it so good before it comes right before it comes to the table. Now, tell me about growing up in the restaurant family because your dad had Daryl's. Right. And so let's talk about Daryl's. Daryl's when I used to go to I used to go to the one in Durham because I went to school in Chapel Hill. So the one right down Chapel Hill Boulevard in between Chapel Hill and Durham. I go there all the time. My buddy Skip Dyer. I don't know if you have that name. He was a manager of Daryl's. I didn't know him back then, but I wish I did. I wish I would have. I got some free food, but I didn't know him then. But the whole restaurant was designed like an amusement park to me.

07:08 Like I used to sit in the Ferris wheelchair. Right. Did your dad do that for you? Did he build it like an amusement park? No, he did it because he loved to collect old things. OK. He had this huge collection of old things. In fact, the Ferris wheelchair that you talked about, we've turned that into a table that you can sit in in our saloon. And the next time you come in, I'm going to show you that chair. I want to see that. It is a very cool little table. But he had all of these things that he just collected because he just he loved collecting stuff like that. Sometimes he would go to junkyard sales and just say, I'll take everything you've got. What will it take for me to just take everything off your hands? So he had it in warehouses and he went to this. He went to a pizza inn on Hillsborough Street, which was actually the first Darrell's. It was owned by a guy named Darrell Davis.

07:55 All the students of NC State would just call it. Let's go to Darrell's place. So he was sitting in there and he said, you know, this building could really hold about twice as many people. If we just put a level here and put this here and did this here. So he met with the owner, Darrell. And they said, OK, he said, OK, well, let's do this together. So then it was no longer our pizza inn. Now it became Darrell's. And they named it after him thinking there'd never be more than one. And when it was so successful, then they built more. And I remember that Darrell's. That was a fun Darrell's to go to. I knew a lot of people at State back in the day. So that's where we'd always go over. Next time you come to the barn, I'm going to walk you around and show you all the things from Darrell's that are in the Angus Barn. That'd be neat to see. Yeah. Now, let's talk about you do a lot of great work with charity and you have something called the Walk for Hope.

08:41 And it's coming up right shortly here, October 9th. Right. Right. Tell me about that. Well, it started because my brother suffers from a series of mental illnesses, schizophrenia, bipolar, obsessive compulsive, just all kinds of things. But when he was first not even diagnosed, when all of this first started happening, nobody knew one thing. Every single hospital that my parents would take him to all over the country would say, we don't know anything about mental illness. We know more about tooth decay. We know more about everything. We just don't know mental illness. We don't have any. No money's been invested in studying, researching these and what causes it and what can prevent this.

09:29 Right. So my father, after finally, you know, he was a make things happen kind of guy. And he wasn't used to somebody saying, we can't fix this. And so my father, in his incredible way, he just said, well, you know what? If my son has to be this sick, then I am going to do something where I can make a difference for other families maybe in the future where they wouldn't have to go through what this has been. So he and my mother started the Foundation of Hope. Okay. Then when my father passed away, all of the employees of the Angus Barn who adored him, they started the Walk for Hope to raise money for the cause that he loved the most, which was research and treatment for mental illness.

10:15 Wow. That's pretty neat. So it was started by the employees of the Angus Barn. That's really neat. That tells you a lot about the ownership if the employees do something like that. Yes. And we never dreamed there'd even be another walk. We just thought that would be the walk. And it was so popular and people had such a good time. So then it grew. And now we're on our 34th, coming up our 34th annual walk. Now, for the last two years, we haven't been able to have it. We have had a drive-through. So we are so excited to be able to have the walk again. But it used to be a 10K. That 10K people would come back from, they would be like exhausted because you've got to go up that huge hill on Highway 70. Enter in through Olmstead Park, go around. So we changed to a 5K. You still go through Olmstead Park. It's a beautiful walk.

11:00 But we also turned it into a festival so that people that didn't feel like walking could just come and just have an incredible day. There's stuff to do all over the place. And we have the Embers. Yeah, the Embers. I remember them from college. I don't know if it's the same guys. I think the band stayed alive, though. Well, one of them, the drummer, is still the same. Wow. But a lot of them have just evolved into the group. But it's the Embers. Do you remember the Beach Music Festival? Oh, yes. I remember seeing them down there. They would come to Chapel Hill a lot. They would come to my apartment complex. Yes. I mean, they're still really great. Wow. It's pretty neat. So how can people find out about the Walk for Hope? So all you have to do is go online to walkforhope.com or you can just call 919-781-WALK. Or, I mean, you can just Google it.

11:48 You can sign up. The sign-up process is so easy online. And you pay just one amount just to get in for everything that you do the whole day. But the purpose is that you try to get people to sponsor you to raise money for the cost. Yeah. We did that back in school. I remember that. People would sign up per mile. Right. They would give a certain amount of money and I would punish them because I'd stay out there because I knew I had people pay and provide. Right. And you can also get teams together and come as a team. And it's just the day is really just from start to finish one of the most fun days. And you have shuttle buses too, don't you? Yes. People don't park at the Angus Barn. You've got signs telling them where to park and you have buses running every five minutes

12:33 or so you said. Because that's one thing people hate when they go to events is these shuttle buses may become once every half hour or 45 minutes. Now, that's a huge. Inconsistency. People don't like that. That's a huge ordeal for us. But see, there's 3,000 people that come to this. That's a lot of people. So, and we're expecting more this year. So, we can't really park on site. So, we have a place really not far from the barn. But we do have these great shuttle buses where you have a hospitality host on the bus. Like you're arriving at Disney and they're telling you what you're getting ready to see. That's neat. And so, the minute you enter, there's music and just all kinds of fun things going on. We have a run, a 5K run that kicks off at 9. Then the walk kicks off at 10. And then the food is, you know, I could be arrested if I didn't serve decent food at the

13:20 Walk for Hope because it's the Angus Barn. So, we do burgers and barbecue. Those turkey wings are really good, by the way. Yes, yes. Those turkey wings are filled up with one of those things. For the turkey lounge, right? Yeah, that's right. I love those things. All right. So, then the website is walkforhope.com. Yes. That's Sunday, October 9th. Yes. Her name is Van Ewer. She's the owner of Angus Barn. And Van, thanks for having us. Thank you. Thanks for having the time to share with us today. Thank you so much for helping to promote this cause. It means so much to me and my family. Walkforhope.com, folks. Yes. All right. So, that phone number to call, 800-661-7383. 800-661-7383. Or just text the word PLAN to 600-700. That's PLAN to 600-700. That's PLAN to 300-600.

14:05 That's PLAN to 300-600. That's PLAN to 300-600. That's PLAN to 300-600. That's PLAN to 300-600. That's PLAN to 300-600. That's PLAN to 300-600. That's PLAN to 300-600. That's PLAN to 300-600. That's PLAN to 300-600. That's PLAN to 300-600. That's PLAN to 300-600. That's PLAN to 300-600. That's PLAN to 300-600. That's PLAN to 300-600-600. That's PLAN to 300-600-600. I am too.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Each and every week I talk to very interesting people and the most important part is that I shouldn't be the only one hearing it. I really feel that if these people make sense to me that everyone out there needs to hear it. So stay tuned folks and I hope you enjoy this newest weekly segment on Coach Business. Well folks, a new segment here on the show is I like to feature success stories of businesses, especially local businesses. Because, you know, we're here and we want to support our local businesses. And gosh, if it can support a local business and it can help you out, it can help your belly out. It's a win-win for everyone here. Amen. We have Mr. Ray Arias from Ray's Restaurant and Studio. Ray, welcome in. Thank you very much, Pete. I've known Ray for years and he's been a great guy and always helped us when we needed help.

00:48 And we want to make sure that people know about Ray's Restaurant. Ray, how long have you, well, first of all, tell us your story. Who is Ray? Where did Ray get started? My name is Ray Arias and I was born in Cuba. I grew up in New Orleans. Fun place? You know, I started working with Ruth Chris Steakhouses in 1987. So I opened a lot of restaurants. I was the vice president of operations of corporate Ruth Chris. Worked with a couple of different companies and I moved to North Carolina in 1997. 97. And when Ruth Chris at 1130 Buckton & George, which is my address, moved out, I chose not to go with Ruth Chris at the Saturday Night Open Mountain Restaurant. Yep. And we've been blessed. And the rest, as they say, is history. The rest is history.

01:33 They are jamming, Coach. So I moved into the Triangle from Chapel Hill in 1996. And I remember, I didn't have any money back then, Ray, but I remember everybody talking about how good Ruth Chris was then. And then they moved. What year did they move from the Buck Jones Road over to the other side of Cary? 2004. 2004. And you decided to stay. Correct. And it's been a really good restaurant since then, by the way. And the New Orleans flair to it is really good. I like that. Thank you. Thank you. I grew up in New Orleans, so that's where we have the New Orleans flair. We have a New Orleans-style steakhouse. Thomas, what do you got to say about that? I can't say anything but goodness about the Cajun seasoning. That was good. Now, we went there the other night. I took the company out for Christmas in July, we call it. That's right. It's an annual event. We do it every year.

02:19 And Ray is generous enough to open his doors and find enough room for our company. We're a pretty big company with guests these days. We are big, aren't we? And everyone was happy. So when you make a lot of meals for a lot of people, that's when you know if a kitchen is really good or not. Because every single person's food came out the right temperature. Now, anyone listening has probably been into those, we call it the rubber chicken groups, where you go to see those 100 people sitting down, everybody gets the same thing, and the chicken is cold and rubbery. Have you ever had that great? Oh, yeah. So that is the exact opposite at Ray's, and that's what I love about Ray's. By the way, Ray is not paying me to be on here. I just like Ray enough, and I've liked his service and his restaurant so much over the years, I wanted to at least feature him as a success story, because you can't argue with success, can you? I know a part of that success, his coach also, is it doesn't matter where you are, who you are,

03:07 how much money you're spending, Ray walks from table to table to table and says hello and thank you. I mean, you can't get enough of that. You really can't put a price on that, Ray. No. You know, that looks like, well, you do, you care, and you come out there. If you were ashamed of the food, you wouldn't be able to find Ray. Where's Ray? I think he's taking a spoke break. No, you're always out there meeting people and greeting people, and it looks like you're having a good time, are you? And that's the job. And also, it's fun. Yeah. You know, when I come to work, I feel like I'm in my little domain, you know, hey, wow, it's showtime. Yep. Oh, yeah. You do a good job of it. Especially when you make that bananas foster. The table size. Oh, yeah. Yep. Cherry's Jubilee is good, too, by the way. We try really hard to make sure that we have the best product in the market.

03:53 Yep. And that doesn't ensure that it's always going to be spectacular, but spectacular is what we're looking for when it gets to the table and you taste the food. Well, you're setting your expectations, and you set them high, which is good, because if you were aiming low, you'd probably satisfy yourself, but that wouldn't satisfy other people. So aiming high and always meeting that is the most important part to running a successful business, especially a restaurant. Because a lot of times, you don't get a second chance. I mean, if you mess somebody's food up or if they're not happy, you know, there's a lot of choices, right? They might not come back. One guest that has a bad experience will tell 50 people. Yep. Oh, yeah. A person that has a spectacular experience at your restaurant will tell five. Maybe one or two. Five. Yeah, five. Isn't that interesting, huh? Bad news travels faster than good news.

04:39 Bad news makes news. Yep. Good news, you know, we're supposed to be good. And, hey, we charge you enough money for us to be good. That's our job. But you're comparable to any other steakhouse cost-wise. It's not like you're charging more, but you still get a better experience, I think, than most of the other places. All I know is my ribeye was spot on. You like that? I had a good fillet. Holy cow. Yeah, it was good. Well, now let's talk about, Ray, when the time – now, by the way, you undersold yourself on what you – you used to help Ruth a lot. I mean, you traveled the United States opening restaurants for her. I started working with Ruth a stackhouse in 1987. And I opened quite a few restaurants over the United States, and we helped open restaurants in Taiwan and Taishong and Puerto Rico, Mexico.

05:28 He was original Mr. Worldwide before Pitbull. So, Ray, what job did you have when you started? What position did you come in as? With Ruth a stackhouse? Mm-hmm. I was always a manager's trainer. So, I was training the managers how to train people. And then they made me the vice president of the operation for Ruth's Corporate, and I helped the owners purchase all the equipment and hire the management team and teach them how to do the operations. Yeah. And so, then you worked in that one in Cary on Buck Jones Road for a while, and then they decided – when you got the news they were going to move, what did you say? What did you think? They moved because they thought that the Arboretum was a better location, which it is. And my best friend is the owner of that restaurant, of that franchise.

06:15 Well, I've been to – it's a nice restaurant over there, too. But it's on the other side of town, and Cary, if you know Cary, Cary's like five cities in one. You go from almost where the airport is all the way over to Regency, and that's a big distance. It is. It's a long city. No doubt. So, but it is still in Cary, but you liked the location enough where you were, and you decided – or did you just decide it was time to be like a bird and jump out of the nest, try to fly? It was time for me to go on my own. Yep. I had a little boy, you know. I'm 68 years old. I have a 21-year-old boy, which, you know. And I didn't want to do the traveling and things like that. So, I decided, hey, let's just stay home, have a nice little restaurant. Yep. And we're blessed, and we are doing spectacular.

07:01 Now, you added – and this is great, by the way, folks. This is almost – you almost saw the future, right? You decided to build an outside patio a couple years back, or what's it been, four years back now? Well, we built – well, you know, my vision was to open a patio. I grew up in New Orleans. Yep. Mm-hmm. Like, this restaurant's called The Court of Two Sisters. But that didn't work out for us because people in New Orleans that travel, they don't mind eating the heat or the cold. You need to give people a little more ambience and commodity. You know, people don't eat here when it's 100 degrees outside. And they don't want to feel it when you're good eating. Yeah. So, we opened what we call the Magnolia Room in the Magnolia Courtyard.

07:47 Yep. But it was a courtyard to begin with, and that was not successful. You can only use it about three or four months a year, and you could not depend on the weather. Too hot, too cold, or rainy. It was never good. And now we can use it all year round because two-thirds of it is covered, and we can open up with the windows, and the other third of it is wide open. Well, because you made it an outside patio that had windows that would open through COVID, that was perfect timing to have that through COVID, wasn't it? It was a blessing. Yeah. So, see, Thomas? Because I know somebody that you know, too, who said, you were stupid to do that. You know who I'm talking about. Yeah, yeah. And he hasn't really – has he ever come back and, as Chuck ever said, you were right? You remember how Chuck was talking back in the day.

08:32 It was the best thing you did, and I told you at the time. Absolutely. Remember, you and I talked, and I said, I think that was a good thing. Before COVID even came, I said it was a good thing. Yeah. And because it made your business 24-7, 365 days a year for the outside – not 24-7, but you know what I mean – every single day you could use that outside patio. Matter of fact, we used it the other night. Mm-hmm. Really good place. If you haven't seen the Magnolia Room, you need to see that, folks. And some people are going, this is probably a money pit. Yeah. You could be right, but it's worked out really well. But you're investing in your business, and that's what a lot of people forget a lot of times. The best investment you can make is in yourself. Period. I agree 100%. Period. Instead of sending your money halfway across the world to some investment firm you don't know, and then disappearing sometimes, invest in yourself if you're a business owner. Now, don't go overboard with it. So a lot of guys are now getting all excited and looking at the wife saying, see, Coach says I can spend a lot of money on the business to get all these big screen TVs.

09:24 I'm day trading. That's it. Only if it's worthwhile, right? So you really did make a smart business decision. I told you that at the time. Thank you. Thank you. You needed to hear that because you had that big bird on your shoulder named Chuck Gaten telling you it was a bad thing. Oh, it was Chuck. All right. Now, the most important achievement a parent can ever do is watch their child fall into their footsteps. You're pretty proud right now. I'm definitely very proud of my son. He's 21 years old and very proud of my wife. She's a great gal. She works at the restaurant. She works behind the scenes. And you know my wife. She's a beautiful girl. She counts the money. She counts the money? And she does all the paperwork. Here's $2 for you and here's the rest for the company.

10:11 That's right. That's right. Here's your allowance. And she does a spectacular job. Yep. And so I'm a really, really blessed guy. I have a spectacular family. I have a spectacular staff. We have a staff that worked with us for many, many years. As you know, most of our employees have been there for years and years. Most of them have been there since we opened the restaurant. Yeah. And that's not easy to find. Well, you get the cheers effect when you have people that you like to come see that work at the restaurant. And remember the cheers? Everybody knew your name at cheers. And people look forward to going there. And some people are there almost every night. Oh, yeah. It's funny. You know, whenever I go there, I always look for some friends that I have there. And of course, they're always there. You've got a great cast working in your bar. I love Jeremy. Jeremy's laughter is infectious.

10:56 It's amazing. It's amazing. And you've got Big Mike came back into town, too. Yeah, Big Mike's working with us. And Purcell. Purcell. Purcell's a rude guy. But I guess the standard of a good owner is when people leave, not on bad terms, but they leave to go do something else. But they always want to come back. And they do come back. So if they didn't like you, Ray, they would tell you anything you wanted to hear when they left, but you never see them again. But the fact that they're coming back and working again, that speaks volumes for you. Yeah, thank you. And I'm proud of you having your son, because you didn't push your son into this. And your son now is wanting to come back and follow in your footsteps. If you push your kids too hard, folks, they go the other way. Exactly. I know. My dad's a physics professor, and I'm a financial guy. Yeah, my wife was, my son goes to ECU, and he's accepted to Elon and High Point.

11:49 And when he told us that Saturday that we were having dinner, mom and dad, I'm going to ECU. And my wife, oh, no. You didn't like that? It's turned into a good school down there. ECU's a great school. And then I thought, honey, he's going to school, not you. Let him get what he wants. And he's turned out really good. He loves it. Yeah. You know, he goes to summer school. He wants to finish a year early. He wants to come and work at the restaurant, which I'm really, really. Wow. Which is really hard work. And I have to explain to him, son, you know. Yeah, it's not easy. This is a fun job, but you're going to be here. A lot of hours. And, you know, Valentine's Day, Mother's Day. Yep. And you've got to take your girlfriend out on the- The day after. That's right.

12:36 Send roses the day of, though, guys. You don't want to go on Valentine's Day anyhow. Either the day before or the day of. Never send the day after roses. That's right. That's right. Now, one final thing. High Point University, Nito Kubain's a buddy of mine. Really good guy. The dean or the chancellor of the year. And he's from- He's a Lebanese guy. And he came to America with $5 in his pocket. Wow. What a story of him, huh? Companies beg for him to be on their board. And they pay him a lot of money to be on the boards. Nito knows what he's doing, too. And so I'm trying to- I would like my daughter to go to High Point, but we'll see where she wants to go. She's only getting into the 11th grade now, so we've got a couple of years. But, Ray, I just want everyone to know who you are. I want to then put a voice with the name of a restaurant. And it's Ray's. And it's the best restaurant I've ever been to, as far as in the triangle with the steaks and everything and the service. And you can't be good service. Thomas, you've been quiet over there.

13:21 Any final words? I have been reflecting on that beautiful- Any first words? That beautiful rib I had just a couple of nights ago. You're like a snake. You ate it. Now you won't say anything. You're just sitting there. Exactly. I'm one of the quiet ones. Folks, Ray Arias, Ray's Restaurant. Ray, thanks for your time today. Coach Pete, thank you very much. I love you guys. Thank you. Thank you for having me on. Yes, sir. Appreciate it. Thanks a lot. 800-661-7383. 800-661-7383. Or text the word PLAN to 600-700. That's PLAN to 600-700. That's PLAN. That's PLAN. That's PLAN. That's PLAN. That's PLAN. That's PLAN. That's PLAN. That's PLAN. That's PLAN. That's PLAN. That's PLAN. That's PLAN. That's PLAN. That's PLAN. That's PLAN. That's PLAN.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 each and every week i talk to very interesting people and the most important part is that i shouldn't be the only one hearing it i really feel that if these people make sense to me that everyone out there needs to hear it so stay tuned folks and i hope you enjoy this newest weekly segment on coach business coach pete here thomas guscom right there financial safari radio and tv show we've got a very special report a very special visitor today i don't know how we got him i've got some good friends and they have friends that know this guy but this is richard hart he's founder in the crypto world of a company called hex and a company called pulse chain he's been in the crypto universe for over 11 years which is a lifetime when we talk about crypto and i want to wait and we we don't know where he is because he's in an undisclosed location on purpose but

00:48 richard welcome in hey how's it going yeah all the all my friends that i party with uh they know where i live but random people on the internet you know what are they sending you they're not usually sending you birthday gifts you know they'll send you like a box full of glitter that that explodes so cryptos crypto is really interesting you know it's designed to be censorship resistant so for instance uh china has currency controls and uh if they knew that there was some door they could kick in to stop people working around their currency controls they would and so real cryptocurrencies aren't companies so all the stuff that i do hex.com pulsechain.com uh they're actually just open source some somewhat open source projects that uh you know there's no door to kick in so if i die my website

01:35 goes offline doesn't matter stuff keeps working it's important to know because recently billions and billions and billions of dollars were lost to centralized parties that said they were going to give you interest and instead took big risks with the money lost the money and now are in bankruptcy and cryptocurrency solves that and i hate to see people do the opposite you know so it's very important that if you can avoid working with a company that you do so so richard a lot of folks a big misconception i think but a lot of folks think that the crypto world is a non-correlated asset to the stock market your opinion i de-educate so many people so people i saw a guy on television and a financial show say that he thought they would raise interest rates which would drop the stock market price which would raise bitcoin's price it's it's all tied together and i'm just like dude dude that doesn't make any sense

02:23 so so bitcoin is not a currency it tried to be a currency it's tried to be a currency for 11 years but it totally and completely failed to do that and lucky for us it became something worth more which is a store of value so for instance uh you know two years ago i haven't looked at the numbers in a while there was 7.2 trillion dollars in time deposits there was only five trillion dollars in printed cash well that means that the storing value time deposit market which hex.com does by the way is more valuable than the cash market period that's it so the majority you know the majority of value in the world is not money it is not cash it's actually goods and services and stores of value you know the value of gold which is a terrible asset i might add it's cheaper now than it was 20 years ago yeah it is

03:09 it's crazy so you could you could have held it for 20 years and be down a lot of people are too and they're safe cynicism looking at him with with sad eyes because it's not doing anything an unproductive asset you know you dig it out of the ground to bury it back under the ground in a bank eventually be back in the ground again now look this listen this is 350 000 it's gold this is a quarter million dollars it's gold this is gold like i have a lot of gold but it's not because they're productive assets although i did go up you know up my rolex is all my money i've got like 9.6 million dollars of watches um so what i want to do is i want to de-educate people i think my highest and best use as a thought leader is to to advertise the things other people don't understand and that they get backwards literally cryptocurrency is a risk on asset it goes up when the stock market goes up it goes

03:56 down when the stock market goes down see that every day period yep it's very good yep it's totally correlated and then smaller lower leverage coins or smaller lower market cap coins such as ethereum act as a leverage position on bitcoin so that when bitcoin goes up ethereum goes up more when ethereum goes up hex goes up more and then sometimes they do correlate well in the case of hex like the first time i called the bitcoin top on the day at 65 000 that top call has been a profit every single day for a year and a half only one day was it at a profit the six percent higher high judas candle to 69k which then went straight down yeah remember that the rest has been at 17k so but during that time you know the first time bitcoin dropped from 65 down to like uh 17 or something it would drop 55 on that

04:44 one and now it's dropped 75 on the next one you know hex went up 30x during that drop but on the second drop it was correlated unfortunately um so there's some reasons why um we have our own cycle stuff and our cycle just kind of hit the same cycle there did so cryptocurrencies drop 85 percent every three or four years ethereum's dropped 95 percent amazon.com dropped 95 percent in the year 2000 but then it went on to become half of all the retail sales on the internet in the united states yeah i do and so just because things yeah just because things drop in value doesn't mean that they're not amazing value estimation and bubbles is a human psychology thing you cannot program out of a project people will think something's worth a lot more and then they will think it's worth a lot less and it doesn't

05:30 matter what the thing is now some things have this worse like like this project called luna that went to zero it had something called a death spiral where the lower the price would go the more the supply would go and so the worse the price got the worst it was reflexive it was amplified it was squared so normal currencies that don't have a death spiral program in them they uh they tend to just drop 95 max like dogecoin has been around for years it's not good technology but it's got product market fit it's got users pumps pumps very hard once in a while uh bitcoin's got product market fit ethereum's got product market fit hex.com's got product market fit you know i have i have bitcoin guys trying to make fun of me because hex went down uh 93 maybe even 95. ethereum went down 85 bitcoin went down 73

06:17 but if you look from the bottom up from january 5th of 2020 hex is up versus bitcoin 250x wow wow amazing man so in crypto when you look at top down you're a noob you're an idiot because after these dumps you're still up massive if you yeah well it's all about when you get in that's what it's when you get in and uh and unfortunately the investor the average investor in the stock market crypto market they all do the same thing they buy when it's real high and they sell when it's real low and they should be doing the exact opposite that's how you get killed by the way when you do that when they do that way selling at lows yep that's true that's right and and you know it's people don't realize that like so i'll just i'll give you the greatest hits of stupid things people think that they say so people say uh bitcoin's a ponzi because where does the money come from it's just someone else's

07:06 money that's a cool story cool story bro so when you when you sell your house for more where did that money come magic the next guy yes exactly and when you sell your stock for more where'd the come from next the next guy and when you're in business and you want to sell your next cheeseburger where's the money coming from the next guy and so all of life is the next guy even like literally life like you're having kids and they are the next guy and if they don't have kids at all the game all stops so every speculative instrument has this property that if everyone sells it once it goes to zero and that if people stop buying the price goes down it's very simple and i just don't understand how they come up with such stupid arguments when the highest performing asset class that's ever existed is crypto bitcoin went up 690 million percent that's 69 000 x i think it's more wow i think it's 6 900x

07:58 actually amazing numbers and yeah and it did that in only a decade go like and then put it versus anything else that's ever existed in the history of man they try and compare it to the tulip bubble that thing came and went you never saw it again they try and compare it to the south seas bubble it came and went you never saw it again bitcoin keeps making higher highs now i will tell you it's the top of its s curve people think they're early in bitcoin when it's 13 years old no you're not early you're late you're last the world's richest guy already bought and dumped on your head elon musk already bought said he wouldn't sell and then sold on you it's exactly what he did he said he'd accept for tesla cars and then he wouldn't he said oh it uses electricity i'm a rocket scientist but who knew bitcoin use electricity crazy that's hilarious so does the test i think he even has a computer

08:46 science degree too you're like you know all right yeah true and then um so it's it's just wild to me you know it's funny actually i'll bet you as a percentage of electricity used bitcoin mining at 75 percent renewable is a higher renewable electricity consumption than tesla cars themselves which is interesting um just thought of that so yeah it's true it's a good it is good point thought leadership um so what are other things people say well so first in bitcoin you really are in my opinion buying the top of the s curve things are stealth and then the early adopters get them and then everyone gets them and then they trail off and then some things die i'm not sure bitcoin will do the dying thing like the cassette tape died the cd died the record died mp3s are still doing fine and so all of those

09:38 technologies had s curves and bitcoin is at the top of it you're the last guy to buy and there's no technical innovation there's no roadmap there's no privacy there's no nfts there's no time deposits which is hex.com there's no uh stable coins there's no ability to trade with someone else with no middlemen no counterparty risk there's no you know like it just is trash it's slow expensive no roadmap garbage and it's actually buggy code as well which people don't understand it said two inflation bugs where anyone could mint as many free coins as they wanted and one time somebody did in 2010 they rolled the chain back and then three years ago it could have happened again but they caught it before someone used it lucky lucky and then people say oh well you know if someone tried to actually do that the miners would just fork them out oh really well what if you just cut the miners in

10:24 on the fraud you give them 10 there you go then they wouldn't fork you out would they and that's my idea by the way i invented that idea so this it's you know i got a breakthrough other things people say ownership centralized yep that's true 42 of bitcoin sits in 2000 addresses you want to be specific 41.4 of bitcoin sits in 2137 addresses that's not many at all man yeah it's not many and what are people going to say oh well those are exchanges that are holding other people's coins oh well how's that worked out yeah how is how is giving exchanges the mount gox did that and they have 140 000 bitcoin in liquidation for years now that liquidation has been for nine years now for nine years those bitcoin have been sitting in bankruptcy court in japan 140 000 bitcoin and those will hit the market apparently in

11:12 august apparently in august they're trying to get those to hit the market i don't know about you man but you know and then the us government's sitting on 70 000 bitcoin from the bitfinex hacker and then they're also sitting on ross olberg's bitcoin wow apparently and i don't remember how much he has it's probably you know 50 100 200 dunas some very large number of them and so you've got this thing that was originally started to like fight governments and now governments own a lot of the coins and then people say it's unconfiscatable and like let's find because the government's selling off their confiscations all the time it's not yeah so if this big these big lots of bitcoin hit the market that's going to kill the price i mean well it's like that's not going to be good well yeah but i mean but that's fine you know it just happens that it's at the bottom it's like basically i called the top on the day and then a bunch of idiots wanted to take on leverage and make an extra top to buy and so three

12:02 hours capital who's bankrupt celsius who's bankrupt and they did that sailor who's lost billions uh elon musk and tesla who lost nine percent on their bitcoin play i hear uh the government of el salvador who lost money on their bitcoin play all these losers who lost money and or are bankrupt didn't listen to me they'd listen to me they would be saved and doing great but they didn't you know so i as one of the most successful people in this industry that's been around for the longest and has had perfect flawless operation with his products for years you know hex.com went up against bitcoin 750 fold and then dipped down to 250 fold and has been paying interest the entire time it pays an average of 38 interest per year good interest so the question is how can it do that and you're like well actually all like

12:54 proof of work currencies have been doing that for a very long time bitcoin used to inflate thousands of percent a year that's why it went from no coins no coins existed in 2009 to 18 and a half million coins existing today i think 19 million coins today well how do you go from zero coins to 19 million coins by hyperinflating people don't realize that people think bitcoin is deflationary nope the rate of inflation drops in half every four years but it inflates like heck it used to be you know it was uh when it hit 20k the inflation rate was 3.89 and four years before that it was twice and four years before that it was twice and four years before that it was twice so i didn't realize there's 19 million bitcoin almost that's that's a that's numbers growing it's yeah so a lot of people said it was like a finite kind of stop it it'll stop at 21. it will stop at 21 million it asymptotes 21 million

13:42 and then your question is who's going to pay for the network security because the majority of money that miners make is in block reward and it's not in fees or yeah and so there's this tragedy of the commons that it could be possible that the bitcoin network could fail due to not enough fees to support the security of the network it's kind of it could happen it's interesting and then and then the people that run the software could decide just to change that limit these are socially enforced networks the guys that run the mining hardware could decide just to change the line of code and say you know what we're not going to have the next happening we're just going to keep getting paid the same what are you going to do that would it have to be a group uh effort or could one or or a small no it would cause it would cause it would cause a chain split and then you'd have two bitcoins you'd have the bitcoin that you would have a copy of your coins on two chains you'd have a copy of your coins on the chain that said we're doing the happening and you have a copy on the chain that said

14:30 we're not but the issue is the guys that have all the hash rate could attack at will the lower hash rate chain and just destroy it that's what would happen they could just mine zero blocks forever or split the network over and over again and rewrite history to where it's useless so the majority hash rate chain is very important and that's another part of the reason why hacks is so strong is that we didn't do our own chain we just piggybacked ethereum which already has massive hash rate and we have lower fees we don't have to destroy the environment we just piggyback and add value to the box they were already mining and it worked great you know and you see all these other guys that think they're cooler on their own chains getting nuked and you're like hey yeah don't you wish you were smart like me you know um now that being said we do have our own chain coming out called pulse chain it's a copy of ethereum it's the world's largest for airdrop you're going to get a copy of all your coins on

15:18 a new chain you don't have to do any sign up you don't have to do anything it just works you can go play with your coins on the test net right now so if you had your coins in your wallet six months ago at the the snapshot the the fork of the uh the test net you can go play with your coins and trade them right now and then we're just fixing up a couple things before we can go to maintenance it's it's very good we stopped blowing up the environment we burned 25 of the fees it never inflates and only deflates it gets more rare um it's higher throughput lower latency world's largest free airdrop very cool stuff so pulsechain.com hex.com really good sites now you know when and i hear so many people have sticker shock when they go to ethereum and they look at the gas fees they have to pay for the ethereum and that's yeah that's driving people crazy and that's that's one of the things you solve with hex i think isn't it well it's we solve it with pulse chain so hex is a time deposit contract

16:10 that's on ethereum and then we copy the whole system state of ethereum which is going to give you hex on both chains it's going to be hex stakes on both chains it's going to be all your coins on both chains and what that should do so like if you look at mcdonald's what mcdonald's does is horizontal scaling hey this mcdonald's is full let's build another one and they just build another one and it works fine horizontal scaling works wonderfully fine it works fine for franchises all over the world now if a gas station is full they open up another gas station some reason technologists and software guys they they worship the shiny new thing syndrome where they're afraid of horizontally scaling because it's not cool and they want to do something hard and complex and then they get hacked and so if you want to get the gas fees and ethereum down you've got to either lower their demand by killing users not that good i don't like that idea or increase their supply and ethereum 2.0 does

16:59 absolutely nothing to increase the supply of ethereum as throughput nothing and people think that it does it literally does absolutely nothing to increase the throughput of the blockchain so your prices are going to be the same the fees are going to be the same and so pulse chain actually should really reduce and relieve the load off of the ethereum network and help ethereum be more useful again because the same exact code that's running there is now going to be on a new chain it's already deployed it's already there as long as someone has a front-end pointed at it you're good to go um you know it's if you want the fees to be lower you can either reduce demand or increase supply pulse chain increases supply and it does it more safely billions of dollars has been lost to hacks and bridges what's a bridge the bridge is you lock your coins up on one network and

17:45 it issues a representative token on the other network then you use it and you use it and you use it and you're like okay i want to go back and the contract says okay we're going to destroy this one and release this one but here's what happens with the bridge in the middle there's a machine because they can't natively talk to each other that a machine has to act as the bridge and then that machine has bad code and it says oh uh uh yeah we we blew up those coins but in reality it did and it releases all the money to the wrong guy and then all those coins are still there and so when you already have all your coins on the other side like when the pulsechain.com fork happens all of your coins are already on the other side you don't have to bridge over you can if you want you can take that smart contract risk but uh you don't have to you already have your coins on the side so it's safer than all of these

18:30 other attempts to try and uh scale ethereum it's pretty cool because no one else copied the system state yeah well tell us what uh what inspired you to develop the hex to begin with i mean i've been in bitcoin since 2011 i have mindful bitcoin block 50 bitcoin block rewards uh solo no pool um i'm probably one of very few people to do that you know so every you know couple hours 50 bitcoin would come into my computer now well that's nice now right it's nice now because the price is 30 grand right 22 grand um but then it was 50 cents probably a significant investment so then i'm just bragging about having 25 bucks yeah yeah yeah you see what i mean so in bitcoin it's not how early you got in it's how long you held until the top of the s curve and it's different um so so i was a retired multi-millionaire self-made man

19:22 had a car stereo store miracle cleaner cash advance loans foreclosure bailouts mortgages you name it i retired 2003 at the age of 25 started traveling the world moved down to panama got the crap robbed out of me started traveling europe and uh volunteering for charity and doing all kinds of stuff lived in a hotel five years you name it just traveled the whole world and while i was traveling you know i discovered bitcoin um on a forum called reddit which sucks now but used to be okay then yeah and uh it was a dollar some guy like sold his house for bitcoin i'm like oh that guy's gonna get scammed fake made up money i can't work and and then i heard then i heard the i read the wired news article where it actually found product market fit on the dark net and people were really using it and it's like oh crap this actually will work all right let's go in bought the top helped make the top bought at 30 went right

20:11 down to two 93 down that was my intro to crypto because i was a genius at business but i didn't understand order books or market timing or charts or any of that stuff right i'm a god at that now but back then no i didn't know anything about it like the total what you know um so and that and that exchange by the way mount gox went and went got hacked and lost everybody's money and and locked everyone's like funds and is sitting on a they were sitting on two hundred eighty thousand bitcoin but the trustee sold them in twenty eighteen and now there's a hundred forty thousand left that they're gonna try and issue to people so and he probably felt smart when he was selling them at like 10k but now the price is you know 22k and that's the trustee the guy that's supposed to be in charge of making sure stuff

20:58 like that doesn't happen exactly exactly do you mind if we explore market fit a little bit i'm i'm a consumer advocate i'm not a financial advisor like coach pete here and you were talking about market that uh may change and i think you know we used to talk uh bitcoin on and crypto on the radio and television show and we talked about how you know back in the 80s you had ibm and apple and all these brands that probably nobody knows coming up and you mentioned earlier as well amazon we thought it was going to fall it fell you had mentioned 93 but it ended up being the way to go um what about crypto what are your thoughts on this because you're saying we're hitting the top of the of that second part of the s curve um bitcoin on bitcoin specifically yeah um where do you see that going and what about money yeah i think people are like i'm in it for the technology that's a lie you're in this for

21:46 bad games like everybody else yes but if you are in it for the technology what do you care if it's top of its s curve as a matter of fact just like ethereum like ethereum allows more people to do ethereum allows people to affordably do computation when the fees are lower and the fees are lower when the price of the token is lower and so ethereum is a more useful computer at lower token prices okay but it's a more useful get rich mechanism at higher token prices i prefer the get rich and let's just launch another one let's all get rich and launch another one let's not you know destroy use cases to try and get the price down um that makes sense it does so a lot of a lot of bitcoin guys you know they're mad that bitcoin's not a currency it's okay guys we have functioning like we we have ways to do we have

22:33 ways to transact now we have mediums of exchange now but stores of value are worth 10 times more 100 times more so be happy with the store value i mean sure if you can do the medium of exchange better so like hex is a better store value than bitcoin which is why it's up 250x versus it in two years um but like well it was up 750x in two years now it's a 250x in like two and a half years still good the issue is well yeah it's still good and we accidentally are more secure we accidentally have higher throughput lower fees that's a good accident accidentally have more features and plug into defy but our primary claim to fame is that we're a better store of value and the other stuff is just gravy it's just like the interest like okay you're making 38 interest

23:19 that sounds awesome and you and you might not be making that right like you you might be making much less because you you know depending on how long they stay you know the average steak length and the average steak length in hex there's never been a financial product in the history of mankind where people have provably shown more dedication because the average steak length in hex is about seven years now and that number just keeps going up there is no other financial product i'm aware of that when you lock it you're in and you are not getting out if you buy a house you can sell it you buy a bond you can sell it you buy t bill you can sell it you block up your hex for 15 years you cannot get out without a penalty unless you serve seven and a half you got to serve half your term to get out with a penalty and you'll lose all your interest no rush to get out or you'll have less penalty certainly not i love

24:06 i mean i love the way you put it together though because people can choose what kind of term they want to stake at so it's not like you telling them what they and you know when you get more interest for the longer you you stake it my buddies uh i've got three buddies who told me about hex a long time ago and they're the ones who helped me get in touch with you so i want to paul brian and don so they're the guys that uh that know you and uh they they're you're their hero and i'm starting to really like you as well i haven't been around hex as long but you've got a really good i mean he's got a really good process here thomas because you get to select what kind of stake period you you take with with the hex and the longer the period the the more reward you get right richard i mean it's it's a it's a great concept yeah true and and why not it's it's it's meritocracy exactly so in bitcoin they inflate to reward miners to destroy the environment and murder the price to do so miners sell the bitcoin price down

24:52 they buy pollution it's good quite and hacks we inflate to reward people to defend the price by locking up coins and delaying gratification which also happens to be the most successful investing technique that's ever existed if you have a real product you buy a scam and you hold it longer it you don't scam but if you buy something that has product market fit then that's how you get wealthy you know all these guys that trade in and out getting chopped up by fees making exchanges rich trying to take other people's money from them that wish they didn't have it uh that that's not making the world a better place you know having two guys stare at a screen trying to take each other's money from each other both of these guys would be better walking away going building products and services and getting people's money honestly by giving them what they want instead of trying to take it by force

25:37 you know so so net loss they're they're less than net zero games right like it's just gambling you have a house rake the rake takes some of the money and then you end up with these giant buildings built on losers las vegas is built on losers we talk about that all the time what do you think pays for the concrete and the electricity bill for those lights at night you know it's like you'll add yeah yeah yeah yeah so so that's the other great thing about hacks is there's no negative externalities the bitcoin price and the ethereum price both have to get beat up by paying miners a block reward to secure the network and in hacks we don't have that in a pulse chain we don't have that and it's just they're just more efficient systems so one of the easiest ways to understand hacks is it's just bitcoin with a proof of work change we use ethereum miners instead of bitcoin miners and we inflate to reward you to lock up your coins instead of inflating to blow up the environment

26:24 and that's it that's really the only difference other than we're more secure and you know lower fees higher throughput all that stuff um so so what i was saying is with the cream on top that 38 sounds awesome but the price went up a million percent and so what's bigger a million or 30 million that's a little misleading yeah exactly but it's a little misleading because the 38 multiplies by the million and so you're really getting an extra half a million basically right but but still even if you don't stake the majority of the yield is really from the usd appreciation you know but you can't guarantee that but you can guarantee the uh the appreciation in hex terms so you know that that's you're minting your own inflation with no middlemen no counterparty risk it's just like drawing a pony picture on a piece of paper here's paper here's pen you draw a pony picture now you created something

27:11 of value congrats where'd the money come from a middleman a security can you get rug pulled no you got your asset made your own value by minting your own thing that never existed before and that's exactly what minting your inflation in hexes it's just like minting your inflation in bitcoin but with less uh distribution now i'm sure we have a lot of uh hex hex investors that have been in hex a long time of big fans watching this too but there may be some people who aren't in hex and aren't familiar with hex how easy is it for the the new person to get into hex right now hard it's hard and that's why there's more opportunity you know when it's easy you're not going to get the same gains when when everyone's done it you're not going to get the same gains you know a large part of the profit and speculation is getting into something before someone else oh yes bitcoin guys the quick guys get

28:00 this backwards they go there's no liquidity you're like oh really that's funny because when was the best time to buy bitcoin when satoshi owned 100 of the coins when there was no liquidity there was only one exchange you could buy from mount gox which means magic the gathering online exchange which is just a card game it's literally a card game kids play magic the gathering the url mount gox literally meant card trading website but they just use the url for a bitcoin trading website instead yeah yeah and then you know and when and when did bitcoin's price go up the most when it had the highest inflation yep and and it had the most centralized ownership and the least liquidity but people get it all backwards and they look at opportunity in the face and like you know hex is so small there's only 300 000 people that could possibly hold hex there's only 300 000 wallets i think there's 330 000.

28:49 um you're like yeah that's awesome that's called opportunity and when everyone has a wallet there will be a lot less opportunity like you know like when it's easy to buy there will be a lot less opportunity you want to get in while it's hard to buy um so basically like the majority of hex trading is on chain so you can really there's the the minimum amount of fake crap these are you can see who's buying who's selling whether they staked how long they staked for whether they usually sell when their stakes are over whether they restake what other coins they like you can see this all it's on chain they don't know the person's identity but you know the address yeah so it's pseudo anonymous so in hacks you would just buy bitcoin or i'm sorry do not buy bitcoin you would either buy yeah either buy ethereum or usdc and a little bit of ethereum and then you could go to oneinch.io or matcha.xyz or ethhex.com and just

29:37 swap them on chain so you install metamask you go to your exchange you buy the coins you put them in your metamask and then you go to the website you connect your metamask and swap them and that that last part's the beautiful part because no there's no counterparty risk when you leave your coins in exchange they could disappear they can never give you your coins again so if you do use an exchange i like to trickle the money in here's a little bit of money give me my stuff here's a little more money give me my stuff okay have some more give me my stuff don't ever put it all in and then oh oh i can't have my stuff now you want me to beg you you want me to write you some essays about my life history and they do this they do this all the time so you limit your counterparty risk with exchange by doing multiple transactions and then you put it in your wallet now you're in control and now you can't get screwed by your exchange you know there's no counterparty risk this is what cryptocurrency was

30:24 invented for it's also what gives you all the gains how many people out there try to start businesses and outperform bitcoin even people that started bitcoin businesses didn't outperform bitcoin just holding the coins beat all the businesses you didn't every every dollar you pay a developer you didn't buy a coin with every dollar you pay to go to a trade show you didn't buy a coin with then you look at these coins that have gone up 10 000x like hex did you're like dang i wish i'd bought the coins you know well yeah i want to get back to hex in a minute but let's talk about the exchanges for a minute too because they've been all over the news like the rumor that maybe coinbase might be in trouble and people put their money there they assume their money is safe layoffs yeah it's not really safe everyone's got okay so so what it's not your money yes here's what people don't understand when you deposit your money these changes you're no longer your coins

31:10 they get mixed in with everyone else's money and you are not a secured creditor because you're not a secured creditor and you don't have a ucc1 form filled out it means that in bankruptcy you get paid last and all the secured creditors get paid first so you you need to not give your coins to these exchanges not your keys not your coins and they try to tease you with little pieces of interest to get you to like staking interest there but it's not it's not worth taking the risk these exchanges picking up picking up pennies in front of freight literally and the trains have crushed people so many times and i beg with them i plead with them i begged people to take their coins off of block 5 and celsius and all these stupid lenders cred the big them didn't listen they lost all their money all right so now let's and i invented a product that replaces that that does it better i'm just

31:57 like well let's go back to hex let's talk about i mean what i mean still what inspired you to do that because there were a lot of uh there were a lot of coins out there or bitcoin and all that but you said there's got to be a better way and you designed hex i guess right well originally originally it was okay ethereum is better than bitcoin let's just have a coin that we give for free to bitcoin holders that lets them transact on the ethereum network and then it evolved then i was like all right well let's have price performance too what kind of features can we add to it well what's the only thing that the price chart cares about buying and holding all right well let's just monetize buying and holding directly if you buy and hold we'll pay inflation all right let's do that and then oh well we got to simulate compounding interest so how can we simulate compounding interest because it takes too much computation to keep writing to the database every day all these inflation numbers to all these people and we go oh okay we'll have a share price

32:44 and mathematically the same instead of beating up the database to pay everyone the rewards we just give the new guys less and then the ratio is the same because they're just dividing up the same inflation anyway and so you could either give the old guys more shares or the less guys or the new guys less the ratio is still maintained the same and guess what that gives us that gives us a share price chart that only goes up into the right forever in hex terms man that's compelling the share price chart that only goes up into the right forever so it's like getting bitcoin mining hardware for free with no overhead no electricity costs no facilities cost and in bitcoin your miners become worth nothing over time because they aren't efficient enough the new ones make them make them obsolete and hacks the earlier you get in the better share price you got you just it's you get become more powerful over time not less yeah that's good and so and then it

33:34 just evolved and we're like all right well well how else can we on-ramp users well let's have uh let's have people be able to turn their ethereum directly into hacks and a smart contract in the beginning and then we don't have to you know beg exchanges and middlemen oh please middleman exchange you know victimize our users but let them on-ramp you know um and then we were like oh well let's have a referral program too but let's just cut it out after a year let's put it on a timer so that the referral program stops after a year to maximize efficiency because that's middlemen i mean referrers are kind of middlemen right so it's good in the beginning but let's let's have it disappear and it all worked perfectly perfectly flawlessly for years it's over a thousand days in perfect operation now and uh you know the price went up a million percent 10 000x before staking if you'd

34:19 staked you would have got some people made an extra 2x if you were staked on november 19th there was something called the big payday you got an extra 33 percent no matter what if you were staked for one day you got an extra 33 pretty good and so like it's it's awesome but it doesn't show on the price chart it shows inverted on the price chart because some people sold that so they dumped the price on that day okay but then it just went right up and so i kind of like so giving people these high ap uh wise is awesome or allowing having the system allow people to mint their own high ap wise is awesome but it it would be even cooler if those apis were lower and you just got that extra on the price chart yes yes so they're both good you know it's like uh it's kind of like a stock split you know

35:06 you're changing the units but it's the same stuff yeah so it's well yeah and the difference is like inflation and hex is nothing like bitcoin they have to sell it in bitcoin yes you don't have to sell your hex inflation you don't have to because you don't have any costs well there's so much excitement around hex i went to your uh your event in vegas a couple months ago and you had all the hex all the hexakins thomas we're called hexkits i like that and uh band there was so much excitement there and uh you know i so many people haven't heard of hex so in in the outside world so i'm trying to at least educate people on the this they had more than that more than bitcoin those you know i remember when there was ads on taxis and buses and billboards in the uk back when hex was up 113x and everyone cried and yelled and screamed scam and screamed ponzi and then it went up another 10x and then it went up another 10x

35:59 and if you had bought when you saw the 113x you know the 11 000 on the on the taxi cab you murdered it only in crypto does this happen i mean any any place else in the world that you see you're going to make like get rich quick it is a scam there are but actually people actually get rich quick in crypto it's crazy now be careful because there's a lot of stuff that goes to zero and stays a lot i would say most things will go to zero and stay you got to buy something that's got product market fit do not get scammed see that was going to be because if you lose your stack it's gone you can't get it back so that's what i was going to ask you richard because a lot of folks here there's so many different choices now and in the uh the crypto world and and it used to be when you talked about crypto people who say bitcoin they assumed that that was all crypto and it's not this bitcoin but

36:46 but there's so many choices what do you tell folks who are looking at these like i don't know there's like thousands of different uh choices uh how do you know this is gonna sound it's gonna sound funny and i'm gonna give you the best answer i can i'm a richard hart maximalist the stuff i invent is awesome the stuff i didn't invent very often turns out not to be awesome if you don't like me you don't like the products i've designed bitcoin exists it it gained three times less than ethereum after the covet dip so after the at the bottom of the covet dip when the stock market dumped massive and crypto dumped more massive uh bitcoin got up so it bottomed at uh 3800 and then went up to actually i can't remember the exact bottom was but the price went up about 20x

37:36 that's good it went to 69k i think 38 38 hundred was that bottom and then ethereum bottomed 88 and went up to 5 000 better so it's three times more a lot better but now uh hex went up hundreds of thousands of fold and so i would i would definitely recommend ethereum over bitcoin and you know it's biased i did invent these things but go look at the reasons that they're great right do you like go look at the price chart so we we're only up probably 70x versus uh ethereum we're up 275x versus bitcoin now after a huge drop you got to look at the bottom up if you look top down bitcoin will always look like a bad investment i can show you four places that bitcoin dropped like 80 percent but it went up 690 million

38:24 percent right so you know if you're looking top down in crypto you're not really looking at the right way you got to look bottom up or at least look at both that's why i invented charts you know like if if after a big dip the little line where the price is is way higher than all this all these guys are in profit and you'll notice that they're the majority of the chart at least in mike yes yes well let's get in the time machine and let's go to the year 2030 what what do you think the uh the environment will look like at that time and where do you see hex and uh and pulse chain i i think that uh bitcoin's s curve will continue to be topped out you'll see very mediocre gains in bitcoin you're just barely up from five years ago currently so top five years ago was 20k price now is 22k um after five years and let me tell you my rolex watches are up a lot more than that my patek

39:15 philippe watches are up more than that so by my rolexes have murdered bitcoin's gains depending on when you buy right right you could have bought that dip and did a 20x you're not going to get 20x on your watches um so i i think that uh you know ethereum will flip bitcoin for sure and i think pulse chain is going to be a very very strong competitor for ethereum and it's weird because we're helping them reduce their fees but how are we doing that by removing their users so it's the same code it's just more efficient so like uh i think pulse chain is gonna be massive and you're gonna have hex on two i mean we're gonna have five price charts we're gonna have pulse x the hex on the pulse chain hex on the ethereum chain uh pulse x which is a fork of uniswap that peer-to-peer trading with no counterparty risk that also has fee burning built into it and then we've got an incentive token to

40:05 incentivize people to bridge over their assets and and provide liquidity so that uh it's like a freemium way to get people to try out the new awesome stuff to get them nice worked well for hex the first time yep coupons works you know freemium works that's how bitcoin got me i double clicked in exe they got me to get some free coins and then i went in and bought the top i bought the top i bought the top because they gave me free coins so you know i'm just doing the same thing for other people that got me so thomas you you had thomas is sitting you had you heard of hex before today i had not no just just in small conversation what are you thinking right now here in this i think it's very interesting i'm uh i'm 37 years old i'm a little bit younger than coaches here i'm a little bit i i am but i i'm not 25 years well i'm not involved in the crypto world at all though but this sounds very interesting to me and i've kind of looked at it from the side you mentioned uh you know

40:52 the dark net dark web earlier and how transactions used to kind of begin in those worlds and lately we've seen musk offer you know you can buy a tesla with uh crypto well he took it but he didn't need to do that away yeah yeah but you know following coaches question 2030 do you think that uh commercial adaptation adoption would be sorry commercial adoption will increase yeah okay i i bought the world's largest diamond 500 555.55 carat wow from sotheby's in the uk i paid crypto did okay yeah now they wouldn't accept crypto for their hammer fees which were 20 of the price but they did accept it for the the actual very interesting so 80 of that price uh i paid okay my 9.6 million dollars of watches that's 85 percent paid in crypto my three million dollars of cars i think that's

41:40 like 90 percent paid in crypto hey so crypto's being accepted places we don't hear about sometimes yeah yeah yeah yeah very cool i like that a lot now when you say crypto is it just bitcoin or is it other crypto currencies now being accepted i don't i don't use okay so you use it like ethereum maybe or whatever whatever i don't i mean i'm i would feel so bad if i said i was always dumping the ethereum my ethereum guys might not uh use policy um i mean here's here's another beautiful thing about ethereum mind you you know uh i'm creating something that kind of competes with it helps it but also competes with it you've got zero knowledge proofs on there you've got real anonymity all these guys that steal bitcoin hack bitcoin they're stuck with it they can't get rid of it because they get caught bitfinex hacker

42:30 stole 70 000 bitcoin from bitfinex couldn't get rid of it tried to get rid of it jail nice jail but the guys that hack ethereum they get to keep their hacked value because the mixing actually works and so you need privacy as a business so that your employees don't know what your other employees are making your suppliers don't know you're paying other suppliers your customers don't know what other customers are paying you need privacy to operate in this universe which is why it is a fundamental human right there's a reason everyone doesn't get your email password or get to see all your nudes there's a reason why you've got curtains on your windows why you lock your doors people need privacy and ethereum offers it with tornado.cash bitcoin doesn't everybody that tries to use coin mixing or coin join gets wrecked so and even monero monero attempted to be anonymous and used to have a large

43:16 anonymity set might still have a large anonymity set but here's a problem now you've got monero no one accepts it and the exchanges don't accept it and so what are you gonna do with it it's very extremely hard to do anything with it yeah so they attempt they really tried to make an anonymous currency and then they had a critical bug where if you used your coins sooner than an hour after you got them you weren't actually anonymous oh wow wow that's a that's a really big bug yeah and no one ever tells you about these bugs no one ever tells you about the bugs no one ever tells you about the 85 and 95 dips yeah i do because this stuff is already amazing you don't have to sugarcoat it or lie about it it's already amazing if this stuff's so amazing that if you literally told people not to buy it they'd buy it anyway because the price charts are so good so there's no reason to lie about this stuff bitcoin had two inflation bugs where anyone commits as many free coins as they wanted monero

44:03 had an inflation bug they caught it before it was used avax had an inflation bug xlm had an inflation bug bite coin had an inflation bug uh raven coin had an inflation bug a hacker minted 10 percent of the supply and then just dumped it on exchange hex will never have an inflation bug because our consensus code is locked and isolated it's like a safe within a safe all these other currencies are just one safe they don't lock and isolate their consensus code to where it can't be accidentally effective we do yeah yeah so so richard let's look at this let's let's assume we have some novice people watching people who have not invested in crypto yet what's uh what's the advice for people who are watching right now the easiest way to onboard and get into the crypto world i mean i i think if you set up an account at kraken.com um they don't have the most liquid order books but unless you're buying a

44:52 million at once in a market order it doesn't matter if you're using limit orders it doesn't matter they do support anonymous coins like monero i do support their founder's ethics his mind space is in the right place he's not a government shill he's really a crypto guy they don't directly list hacks yet maybe one day they will um i've recently seen them adding a lot of stuff that sucks so maybe they'll add hacks um it's just crazy that like the thing that could have saved so many people is listed so few places that's a good point so here let me ask do you hate your users do you just hate your users yes so like coinbase was was introducing one crappy coin after another like every week back in uh like last may may of 2021 and all that and that it's much yeah so why you know coinbase coinbase just had two

45:38 of its uh managers indicted by the did not know that oh for uh inside wow yeah and then uh that was just yesterday that that would probably be like maybe 18 hours ago that's gonna and you know like uh their the coinbase stock has gone down 90 percent only straight down from its launch no pumps just death you imagine buying that 250 and that's 50 coins to get people wrecked i just hope i think that if coinbase were to list hacks i could save a lot of their users and their reputation um it's it's uh it's crazy that i've been basically predicting the future for years now call the top on the day tell everyone not your keys not your coins tell everyone bitcoin's going down nobody listens and then i'm always right and then some people are like oh that guy he was a guy that's right and all these guys that

46:25 have more followers they're all bankrupt so maybe don't follow the bankrupt guys you know follow right to the poor house all right final final topic and off topic tell me about the necklace oh this was a gift actually so when we had the referral program you know we had a referral program this guy hex toys um he unwrapped a lot of users and i think he did well with the referral program and we had this big two-year anniversary in the uk he booked us an after party and he got me probably the best gift i've ever received this is double-sided rose gold with platinum uh sapphires diamonds and it was made by getting bobby white in the uk and so if you go on youtube and you search bobby white hex there's a 10 minute video of watching him make this from scratch he takes a blob of gold and melts it and he cuts each hexagon out by hand no machines he hand saws these hexagons

47:17 concentrically over and over and over again and then tack welds them together and handsets each stone there's like i don't know a thousand stones wow it's just looking really amazing yeah um and so now i got all this other rose gold stuff to go with it now this is not actually rose gold but it looks like so this bulgari like yellow gold it does look like rose gold and this is a rolex saru gmt master 2. this is like a quarter million this is 350k and i'm sorry this is 350 this is 250. i don't know what he paid oh my gosh who would know i mean with all the stuff on there it's probably probably what's priceless almost when you think of it let me let me ask you why do i over why do i buy all this crap because it's it gets me because you can why did i buy the world's largest diamond yeah i raised 27 million for charity and no one cared wow i raised 27 million to save

48:07 people's lives the pulse chain sacrifice phase got 27 million dollars of cash in the bank generated for the sens foundation to do medical research no one cared we got one article i bought the world's largest diamond hundreds of articles and it only cost four million that's ridiculous that is ridiculous life is not fair it's ridiculous life's not fair so people want me to act like a fool to get attention fine i'll act like a fool yeah well i think you're i really think you're a really fascinating guy man next time you're in vega we'll communicate on twitter but next time you're in vegas let me know yeah more raleigh so thank you so much man it's really been wonderful i it sounds like you guys uh i do a lot of interviews and it sounds like you guys are smarter than us i like it's all him we appreciate you brother all right you take care it was good talking to you hey wait before i go can i

48:53 show my your yeah yeah oh yeah sure sure yeah follow me on twitter twitter.com slash richard hart win there's a quarter million people follow me there instagram.com richard heart official mostly me flexing with my cars and fancy stuff and then uh youtube.com richard heart you know i'll do the three hour four hour five hour eight hour long live streams and i'll tell you everything about everything so and i got free self-help books that i've had published for years that could change your life t.me slash scivive s-c-i-v-i-v-e they're free very nice youtube is my jam i'll definitely catch up on that sounds great appreciate your brother all right y'all have a good day now is you

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Each and every week I talk to very interesting people and the most important part is that I shouldn't be the only one hearing it. I really feel that if these people make sense to me that everyone out there needs to hear it. So stay tuned folks and I hope you enjoy this newest weekly segment on Coach Business. Well folks this is the time of the show where we go out across the world and find someone who's making a difference, someone who I've seen succeed and I don't think there's a better success story than this one. We've got Chris Gronkowski on with us. You may recognize that last name. His brother kind of has done some things with the football back in the day and still maybe going forward we'll see that maybe we'll never see Rob Gronkowski out there but Chris is a success himself. You may have seen him. He had three years in the NFL as a fullback which is a

00:48 hard position to play folks. That means you take on the biggest linebacker you can find and have a collision on almost every play but Chris has been on Shark Tank back in I think 2017. I saw him on there and he struck a deal with a couple guys. We'll find out who when we talk to Chris. Chris welcome in. Hey thanks for having me. So tell us about your life. I mean what inspired you to get into football and then what inspired you to get into your new career here? Yeah for sure. So yeah it's kind of funny. Everyone thinks we're this big football family. We grew up playing a lot of hockey actually. Born in Buffalo, New York. A lot of hockey. A lot of baseball and actually didn't step on the football field until high school. Wow. That's really when it started but the older brother Danny, my second oldest, he was a beast. He was 6'6", 235 in high school. He looked like a man out

01:36 there playing with little kids and you know when you look like that you're pretty much forced to play football. So that got him out on the field. He started balling out. He ended up being the starting quarterback. Once you see your older brother doing it, it just becomes contagious and you want to do it too. So I jumped on board. I started training. I started playing football as well my freshman year and then you know all the other brothers just followed at that point. So Rob, what number is Rob? He is the fourth out of five. Okay so I'm the oldest of three and so my younger brother started beating me in basketball and I put basketball away after that. So it's because the little brothers get picked on by the big brothers a lot. So we roughed him up but he got better and so that's what happens. You steel sharpening steel we call it. That's right man. That's why Rob got

02:23 so good. I just kept showing him what was up. So somebody went to the University of Arizona. Did you go there or did I know Rob went there? Yeah so Rob and I both went there. I ended up going to the University of Maryland first and transferring over to Arizona and Rob and I played together for my last two seasons there. And you know we actually both left. Went to the draft at the same time. I was a redshirt senior. He was a true junior. So we entered into the NFL together. Well that's pretty neat too when you think about it. Yeah. And so you were you ended up playing for but did you go to Buffalo? No so little youngest brother Glenn ended up in Buffalo first season. I went to the Cowboys out of college and played there for a year. Went to the Colts, played there

03:09 for a year and then got traded to the Broncos for a year. So I used to do a show with Terrell Davis in the Denver area. So Terrell's very popular out there. Oh yeah. Oh yeah. I missed him by a few years. He's a really cool guy. I mean there's a lot of cool guys in the NFL and he's got he's got like a lot of the guys that retire get in really good shape when they retire and then other guys go the other way. Terrell Davis has stayed in really good shape and I don't know I think you have too. I saw you in Shark Tank. You look like you're in pretty good shape too. Yeah it's hard for me to stop. You know you're doing it your whole life. For me it was I was trying to just keep weight just by doing everything I can eating everything I possibly could. So I was big man. I was I was 30 pounds heavier than I am now and the cool part is is you pretty much did a bulk your whole life. Like man people people bulk and then they cut. Well I bulked you know for the first 26 years of my life

03:58 to be able to play fullback. So there was a lot of muscle underneath all that extra weight I was carrying and when I dropped the 30 pounds I was shredded at that point. You know you could you see the muscle and that was when everyone started saying like why why aren't you playing football and people just don't realize it's it's not about what you look like. You know it's how you perform on the field and you can't perform looking like a bodybuilder. You know that's that's not football. You know football is more about functionality. It's actually probably beneficial to have a little extra body fat to kind of protect yourself cushion yourself a little bit. And yeah I mean it's not a bodybuilding competition. It's not who looks the best performs the best. It's you know who performs the best on the field. It's a long season too just like life is long. And so like when you when a lot

04:43 of the NFL guys in particular the careers are pretty short. The lifespan in NFL we we're so used to seeing maybe Tom Brady but Tom Brady is a is not normal. It's not at all. You shouldn't go 25 years in NFL. So you have to plan ahead and you've done a good job of transitioning from from that NFL. I think you've taken that that same kind of mentality though working all the time and key and bettering yourself and and you developed a new career and I want to talk about that. Yeah for sure. Yeah I was done playing. You got to stay busy. I think that's one of the hardest things that you transition out. You're so used to this scheduled lifestyle. You have practice in the morning. You show up you have an itinerary. You know you go through it the entire day and you know you leave exhausted and you get ready for the next day. Once that's over there's no one there telling you what to do anymore and a lot of guys fall off. A lot of guys don't know what to do. A lot of guys have enough money too to kind of

05:31 cruise and don't realize that you know you kind of miss that competition and accomplishing things every day and working as a team. So it becomes a challenge once guys leave. But I tried to stay as busy as I possibly could so that wouldn't happen to me. Went right into a business with my wife when I was done playing. She started a Netsy shop when I was in my third season. Three teams, three cities, three jobs later she's like I am not looking for another job. I'm gonna do something online. It just took off. So I joined her. I did that for about five years and then the opportunity came knocking. You know I wanted to get back into sports and fitness. That's who I was. That's what I was always doing. That's what I was talking about. That's what I grew up doing. So I thought of the idea for a shaker bottle. I was here in Dallas super hot out. Had a plastic bottle just sweating

06:17 everywhere. I took a sip. It smelled awful. I tasted awful and I'm like man there's got to be something better out there. So I went home that day. Tried to look for something. There's just nothing out there. Created a bottle for myself really at that point and realized really quickly that a lot of other people were looking for something similar. Yeah well I mean it's it's important when you when you make the protein drinks especially if you don't get it stirred up right. I mean it's all globbed up and it looks nasty and it tastes nasty. So you want to be able to drink it as fast as possible. Yeah and if it's warm it's even worse. Yeah so that was that was really the goal was make the best shaker bottle that I could and it wasn't just for the gym. I really I was a simple guy like I wanted one cup I could use all day every day. I'll bring it to work. I'll go home. I'll bring it to the gym. I'll use it at the house. I'll use it by the pool. Bring it on the airplane. I just give me

07:03 one cup. I'm cool. So that was kind of the goal with it was you know just give me one I can use for everything including the gym and including blending and mixing powders. Yeah well I've tried that I've played that game before and I've got one of yours I've got one of your shaker bottles here they sent us man it's pretty cool looking I'm going to give it I'm going to give it a run this afternoon and by the way folks Chris Gronkowski we're talking in former NFL player and owner of the company Ice Shaker. Chris we saw you on Shark Tank let's talk about that how fun was that to get ready for. So yeah Shark Tank Shark Tank it's it's it's the real deal uh it's kind of like getting ready for the big game you know you've got you got to prepare for it uh you've got to have that confidence going into it and um you know you get nervous for it as well just like just like a big game uh you're going to go out there and those first couple seconds you know before that big hit before that

07:50 first play starts you're kind of sitting there like oh man you get a little shaky and that's how Shark Tank was but uh once you start going once you get that pitch down once you get uh things in motion it just becomes like a game man you start flowing the confidence is there because you prepared and uh you know we're lucky enough to get offers from all five sharks and walk out with a deal. Yeah you had the uh the show A-Rod was on there uh taking I think uh in somebody's place that day and and you had Barbara Corcoran on we've had her on the show she was entertaining too but yeah you got everybody gave you offers which is unusual many times and then you had guys wanting to partner up so what finally happened? Yes we ended up closing with Mark Cuban and Alex Rodriguez so it was kind of like the trifecta we had the NFL down we had the MLB we had NBA all in there so two guys that were into sports and it was a great fit. Now before you guys came on Shark Tank you had

08:41 some sales but not many sales right? Yeah we had um we were about six months in uh we had about $80,000 in sales so nothing crazy a lot of it was just generated uh through doing shows right and uh just just online sales. So after the Shark Tank appearance what happened? So yeah it took off the Shark Tank effect is the real deal uh we went to we did about three million in sales over the next 12 months after after airing on Shark Tank. It's amazing numbers and so again I see it it's all over Amazon I guess you guys are at GNC any other places? Yeah for sure so uh GNC Vitamin Shop, Lifetime Fitness is a big customer of ours we're starting to work with Do It Best, the hardware store uh we're in Walmart as well uh so yeah it's it's all over the place. Tell me it's a quality it's a quality shaker bottle I mean it's

09:29 it's important to have a one you really rely on and can trust and this looks like one that I that I would definitely keep in my gym bag. Yeah absolutely I mean it's it's going to be the best shaker bottle you're going to have uh and then it's going to really function as really everything else that you need as well yeah if you need a water bottle it's there you know if you need to mix up some margaritas you can do that with it too it'll mix that up it will act as a an agitator but also as a strainer for your drinks as well uh you could put hot drinks in it we don't recommend you shake them but you know I like to take the lid off it's got a wide mouth on it you could easily fill coffee it actually will stay hot for too long where you're going to end up putting ice in it just to be able to drink it uh but yeah man really you can really not not just for the gym but it's not just a shaker bottle it really can be used for everything. Yeah it's a neat bottle again the name is

10:16 Chris Gronkowski folks and hey Chris a side note for you I was at your brother's and you might have been there too that night over at the palms in uh Vegas the palm hotel his retirement party about three years ago that didn't work. I was there somewhere. That was a fun time but uh see retirement parties all aren't always about retirement sometimes it was a fun time fun time. Yeah that was we're gonna have to have another one. Hey do this for us when when you guys hit 10 million in sales I want to hear from you again. I like it. I like that too man it's a good job. Is that in one year or is that what is? When you get 10 10 yeah in 12 months 10 million. That's okay. That's a good goal. I'd like to call you in a few few weeks. Well cool brother we'll take care and then folks again the the company's name is ice shaker and you can find it most anywhere quality items are sold. Chris thanks for your time.

11:04 Thank you so much for having me. Folks we'll be right back after this.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Each and every week I talk to very interesting people and the most important part is that I shouldn't be the only one hearing it. I really feel that if these people make sense to me that everyone out there needs to hear it. So stay tuned folks and I hope you enjoy this newest weekly segment on Coach Business. Well folks this is the time of the show where we go out across the nation and talk to someone who's making a difference or a good author and we've talked to a lot of good authors and a lot of the authors are telling you their story and you know I've written books and I'm telling you the financial story but we like to go out and talk to folks that have written books that really have to do with life, life in general and today's no exception. Today we're going to go out right outside of Washington DC and talk to an author and motivational speaker and keynote speaker

00:50 his name is Alan Stein Jr. He's a keynote speaker, author and coach. You like Thomas? He's a coach like Coach Pete, right? Love it. He teaches proven strategies to improve organizational performance in sports and business and I'd like to add in life because sports and business is life and Alan's programs empower effective leadership, increase team cohesion and develop winning mindsets and habits which we like to talk about in the financial world. Welcome in Alan. Well thank you so much Coach Pete. It's great to connect with you. Yeah now let's let's go through tell us about yourself. I mean what got you to where you are today? What what what did what did you want to be when you were growing up and how did that work out? Well I've been involved in the game of basketball for the vast majority of my life and have seen the game from every perspective. You know the first third of my life

01:35 I spent as a player. The next third of my life I spent as a basketball performance coach and now what's kind of neat is I'm spending this next third as the proud parent of three children that all play youth basketball. So basketball has kind of been the the red thread throughout everything I've done in my life and I'm very thankful for everything the game has afforded me. Yeah so you've talked to a lot of famous people through life. Can you tell folks that are listening are famous people any different than regular people? No as far as being human beings the humanity is definitely the same but I will say that the vast majority and I'll actually reframe it you know the famous people that I've had a chance to work with and be around have been famous in the game of basketball. So instead of famous I'll actually call them high performers because they're very elite at what they do and while they are the

02:22 humanity is the same for every person walking the earth high performers definitely do things differently than your quote-unquote average Joe if you will. Yeah and and that's that's a big thing because we're all given basically the same talents it's up to us to magnify the talents find out the one we really like to do I've really seen in my life when when you're when you're around people who are enjoying what they're doing for a living they don't feel like they're working. Oh absolutely and you can put me in that category I've been incredibly thankful and immensely grateful that my entire career you know 15 years as a basketball performance coach and the last five as a corporate keynote speaker I absolutely love what I do it's what I'm passionate about I feel it's my calling and you know just the opportunity to serve others is really something that fills my bucket so you can definitely put me in that camp

03:11 of people that feel really grateful to do what I do for a living. Now I've got a copy of like the printout I went to your website by the way and tell the folks your website's address. You can go to alansteinjr.com and then I have a supplemental site at strongerteam.com which is where you can get info on both of my books. So yeah I was on I was on your website saw the book raise your game you have a preview on it so I printed that out and it's fascinating you have the the forward in this book is by Jay Billis and just a just a little note Jay is has participated in my group we're doing a movie on Dick Vitale that's going to be coming out hopefully on a major TV network that Dick Vitale is familiar with that should be coming out sometime this year and Jay was one of the best interviews we had for that movie about Dick Vitale tell me about Jay Billis. I mean Jay has been first of all

04:00 he's been a friend and a mentor of me personally for the past decade but as someone that has had a massive impact on my perspective and and my life and someone I'll be forever indebted to Jay has taught me countless lessons that I've then turned around and applied as a parent to my own children and have even applied you know from stage when I'm speaking to corporate audiences. Yeah and again I'm a UNC guy and I can put up with Jay as a Duke guy. We talked about that before the before we started taping here it's uh it's it's it's it's great to read a book that I know you have a lot I wrote just the first chapter here it looks like you have a whole lot of passion in what you're writing about and and anyone who's out there now and who's ever read a book which hopefully everybody's read a book but you can tell when you read certain books

04:48 that the author really cared about the subject they were writing and that's where I see when you raise your game book. Well I appreciate that and you know if you don't mind I've got a quick story I'd love to tell that actually ties uh this is kind of kismet now this ties Jay Billis to ESPN and to Dick Vitale all of which you've mentioned so far in our brief conversation but I think this this will really paint a picture of the type of guy that that Jay Billis is uh back in 1998 Jay got a call that would actually change his career forever um at that time he had pretty much done you know local mid-major level games but this call he got from ESPN uh asked him to be the sideline reporter for the biggest rivalry in all of basketball uh Jay's alma mater Duke against your beloved UNC Tar Hills yeah

05:36 who at the time Duke was ranked number one and and UNC was ranked number two respectively and the game was going to be called by Mr. College Basketball himself Dick Vitale wow and Jay was thrilled at the opportunity so a week before the tip-off uh the ESPN producers held a meeting to game plan and to strategize and it just so happens that Dickie V was out of town for a speaking engagement and while Jay was not required to attend he decided to go anyway and he figured he might as well you know demonstrate to the ESPN brass how seriously he was taking the job and the producers announced that Vitale recommended that the broadcast heavily feature UNC guard Shaman Williams who Dickie V had been adamant about was the game's player to watch so the lead producer asked Jay if he agreed and I think 99 out of 100

06:23 people in this situation would just smile and nod their head I mean why would you contradict the most recognizable face in college basketball on your first day on the job but Jay but Jay did just that and Jay said respectfully I see things differently I believe UNC forward Antoine Jamieson is the player we should focus on he's the most efficient and effective player in all of college basketball and as the rookie in the room on the first question he was asked you know Jay decided to go against the grain and offer insight that directly contradicted his Hall of Fame colleague Dickie V and Jay then made a really bold claim you know taken back by surprise the producer asked for a deeper clarification and Jay explained that Jamieson puts up incredible stats despite the fact that he only has the ball in his

07:11 hands for very little time he said Jay said I bet you Jamieson doesn't have the ball in his hands for a full minute the entire game now if this claim is true this would be extremely rare I mean how how could you know a college basketball game is 40 minutes long and what player worth watching would only touch the ball for less than a minute but the producers were so impressed with Jay's confidence and they decided to run with it in fact they actually assigned an intern to take a stopwatch and chart how long Jamieson had the ball in his hands well in the game to to coach Pete's I'm sure grin UNC decimated Duke 97 to 73 and Jamieson ended up with a career high of 35 points and 11 rebounds so he was obviously the right player to watch but you know how long he had the ball in his hands probably about 59 seconds 53 seconds

08:01 Jameson was absolutely the most efficient and effective player in all of college basketball but the cool part and the reason I love that story is you know Antoine Jameson wasn't the only one who made the most of that game you know Jay Billis did too you know Jay seized an opportunity with ESPN and he cemented a really important lesson that I've carried with me ever since and that's don't be afraid to show up and don't be afraid to speak up and that's that's one of many lessons that that Jay has has taught me over the years and folks we're talking to Mr. Allen Stein and he's the author of the book Raise Your Game and you've got a quote on the in the book from Kevin Durant too who's a pretty famous basketball player in his own right yeah I had a chance to work with Kevin when he was in high school I was his performance coach when he was here at Montrose Christian in a suburb of Washington DC

08:49 so I had a chance to start working with Kevin before he became arguably one of the greatest scorers the game has ever seen he's got a quick shot too you know the thing about Antoine Jameson is is I remember he would he would he basically showed up out of nowhere nobody even expected him to be a good player I mean he was not a highly rated recruit I didn't think coming into Carolina of course we didn't have the internet like we do today but he had the fastest shot he would touch the ball and get an offensive rebound and the ball would be maybe in his on his fingertips for half a second to be back in the goal so that's how fast when you said he scored 30 some points in 53 seconds that that's why it makes sense but Kevin Durant has a real quick shot as well from outside yeah and one thing that makes both of those guys extraordinary is they have very high basketball IQs and they're very decisive

09:36 you know they're not they're not ball hungry they know that as soon as they get it they need to either make a move or make a pass and they're incredibly efficient players remember uh Kevin Durant was coming down I think it was came down to UNC in Texas and he ended up going to Texas so you should have uh maybe I wish I would have known you more than I could have talked you into talking him into coming to UNC he was one of the like he was a one and I think he was a one and done at Texas wasn't he I mean a lot of these back then that was not really not many guys did that yeah he was a one and done and and he's one of the rare few that that was actually the right decision because he made an impact on the NBA the moment he stepped foot in the league all right that's a good point here so making snap decisions or doing things in haste many times it doesn't work out in your favor and so I think we can tie the sports world into the financial world because when you see the best

10:25 coaches and the best players like look at Larry Bird back in the day he wasn't the fastest guy he sure wasn't the uh the highest jumper but just like Wayne Gretzky who also wasn't the fastest skater they both had that intelligence level and they knew how to they knew they needed to improve and they did improve and so in the financial world a lot of people listening to the show probably saying what does sports have to do with the financial world many people listening right now know their portfolio isn't like it should be but don't know what to do or haven't taken the steps to make it better would you agree that preparation is a is a big key and success in the future oh absolutely for high performers in any area of life it doesn't matter if it's basketball or business uh you want to make preparation your separation because it's something that that you have control over and you know whether in the financial world or the sports world you know you need to be very deliberate with what you do

11:12 and you have to have very high discernment with the actions that you take so nothing is haphazard yeah makes a whole lot of sense now uh we got about a less than a minute here but I mean what would you tell folks if they were if they had uh just enough money to buy one of your two books here that we talked about which one would you recommend well I would say go ahead and invest in the new one which will be available April 12th it's available for pre-order now and it is a follow-up to raise your game and this one is called sustain your game high performance keys to manage stress avoid stagnation and beat burnout and the reason I say start with the new book is I think coming on the heels of a two-year global pandemic where stress stagnation and burnout have been at record-breaking highs this would be a great book for folks to dive into you can search for it on Amazon or you can just go to sustain your game book

11:57 dot com folks his name is Alan Stein Jr again the book that we've been talking about the most though is raise your game it's available everywhere books are sold Alan we hope to have you on in the future again I would love that thank you so much coach Pete yeah thank you and folks we'll be right back after this

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Each and every week I talk to very interesting people, and the most important part is that I shouldn't be the only one hearing it. I really feel that if these people make sense to me, that everyone out there needs to hear it. So stay tuned, folks, and I hope you enjoy this newest weekly segment on Coach Business. Well, folks, welcome back into the Financial Safari. We've got a great set of guests today. If you're like me, you don't understand fully the tax code because it's about 80,000 pages, and every now and then government comes out with some good things, and we don't realize it. And unfortunately, sometimes even our CPAs don't realize it. We're going to talk about something called an ERC. And you may not be familiar with that term. You may be familiar with the term the

00:48 PPP, the Payroll Protection Program. But the ERC is something I think is even better, and it's so overlooked. It's amazing. We've got Mark Sullivan and Josh Z joining us to talk about it. Guys, welcome in. Hey, thanks, Frank. Now, let's go to you. Let's start with, well, I don't know who wants to go first, but whoever wants to jump in and go first, tell me what this is, and then let's get into the benefits of everyone listening who's a business owner. I'll really talk about what it started and our quick backgrounds is we're entrepreneurs. You know, I'm a commercial real estate investor, not a tax guy, you know, and through the pandemic, you know, with the PPP and EIDL, I have a couple other businesses, and one was really suffering. And someone told me, hey, President Biden amended this ERC, employee retention credit,

01:34 back in March of 21. So this is a month later. Here's another opportunity to see you could, you know, help out your business as far as another stimulus package and COVID relief fund. Oh, okay. I'll take a look at it. So coming that it's from the treasury department, I was thinking I had to talk to my CPA or my tax professional. Well, come to find out, they just, it's just a little too overwhelming for them. And it's not on their radar because it's more of a payroll credit. And, you know, when I got struck, I struck out about with five or six different people, I said, hey, here's an opportunity, you know, and I take the initiative of kind of like the book, who not how, and got the right who's around me, you know, Mark's one of my partners. And we just continued to build it. And, you know, now we're helping, you know, hundreds of thousands of companies. So, okay. But what is it? What's an ERC?

02:22 Mark? Yeah. The easiest way to look at what ERC is, it is a refund to the business owner on W-2 wages that have been paid out during the pandemic. Okay. And more specifically, three quarters in 2020 and three quarters in 2021. So three and three. So, yeah. So is it like PPP where it needs to be forgiven? No, it's not a loan. It doesn't need to be forgiven. It is one of the best credits out there with tax law. You talked about 80,000 pages. Well, they've added several hundred pages with this ERC. So what we've done with the company is we've gone out, even though we didn't have decades of experience with payroll, we've gone out and hired experts. You know, our fulfillment directors on the board of the American Payroll Association. We have multiple attorneys

03:08 looking at this, many CPAs and CPPs to basically provide a service to business owners and a way to be able to have them come in, get themselves qualified easily or not. And then we'll actually file the credit for them. And then it's a waiting game with the IRS. Several months later, they'll get a check back from the Federal Reserve. When the IRS is after you, there's no waiting game. When you, when the IRS is trying to, when you're trying to get help from the IRS, it's a big waiting game. So it's pretty funny when they're chasing you, it's tomorrow. Now let's talk about the IRS. So if someone's done a PPP, can they also qualify for the ERC? It sounds like we're doing alphabet soup here, but can they qualify for the ERC even though they did the PPP? Yeah, that's actually why most people don't know about this program, because when it came into legislation with the CARES Act, you could not do both. So there's a lot of misinformation where people think you cannot,

03:57 or you can only qualify if you've had a business loss, a revenue reduction. But this has been amended as recently as well, you know, December 2021. So just a few months ago from the date of this, of this radio show. So yes, you can do both. And we're talking about big money here. A lot of times we're getting a credit amount to the company that's bigger than what they received with PPP. So it's big money. And it doesn't create a tax situation, you said, because it's not going to be a forgivable loan. Basically, that's what the PPP was. So a lot of people still had to pay income tax state-wise on that. Right? So all right. Yeah, they'll get you a little bit on this. You don't count it as income, but you do need to reduce your payroll expenses. But at the end of the day, it's great money to the business owner that they can use for practically anything. So if a business owner has still made money during 2020 and 2021,

04:50 they still may qualify for the ERC. That's pretty good. Because a lot of people were thinking, I know a lot of CPAs were thinking, if you didn't lose money, you didn't qualify. Especially with PPP too, when that came out, you had to lose money. And then the ERC, I think that's been looped in with the same kind of, in the same bucket, I think, and a lot of, it's been overlooked. Because I just heard about it from talking to somebody who knew you guys and said, you got to talk to these guys about the ERC. And folks, by the way, if you're watching or listening, you can go to ercaction.com to find out more and to put your own information in, if you're a business owner, to see how much you would qualify for, ERC action, A-C-T-I-O-N. Now, guys, what have you seen? What are some of the main advantages of the ERC besides being overlooked, I guess? What are some of the things you've seen that people have said,

05:39 gosh, I wish somebody would have told me about this? Well, I think one of the biggest things is, you know, part of this credit is it's up to $26,000 per W-2 employee, 26,000 employees, you do the math. But like what you talked about is a lot of CPAs overlooked a lot of these, a lot of this part of this credit is because it has been amended a few different times. And we've had people say, oh, yeah, my CPA or my tax professional looked at this in the middle of summer, I didn't qualify. Well, that might've been true at that time. But since then, you know, they added another amendment. If you've had a supply chain disruption to your business, that could, you know, help you receive this credit. And so I tell everybody, do not pre-qualify yourself. You know, Forbes just did an article that says 70 to 80% of businesses should be able to

06:26 qualify for something like this. That's amazing. I know we have a lot of business owners that are watching or listening and saying, gosh, I didn't, I've never heard about this. And, you know, we all have business owners, we all have CPAs, we have a busy life. And so we want the CPAs to handle the tax code for us. And under the CPAs get overwhelmed with the number of people wanting help. And sometimes they overlook things or maybe they heard the ERC before the December 2021 changes. And so that's why it's, we always say the tax code is a living and breathing entity and it's constantly changing sometimes for the better. And I was amazed because I think this is one of the best things I've seen the IRS is giving anybody who's owned a business. And again, to find out more, all you have to go to, go to ercaction.com, put your information and see if you qualify or not. And I think that's what kind of differentiates us. So one thing I always tell people is don't get

07:14 mad at your CPA or tax professional. And, you know, like if you're going through a divorce, you don't call a real estate attorney, you call a divorce attorney, you know, your CPA specializes in your income in 1040 and 1120s. We specialize in this area. We have CPAs and payroll professionals sending us business because it's, it's pretty hard to understand. But do it, don't prequalify yourself. And the part of our system is it literally takes you five or 10 minutes on ercaction.com to go through the questions and to see, you know, what range you're qualified for. At that point, you're uploading a couple of documents and then it takes us about a week or two to get back to you on the exact amount you're approved for, for your business. It's amazing. I went through it. I was amazed to find out how much I could get back for myself, even though I made money in 20 and 2021.

08:01 So, you know, because, because our supply chain has been interrupted, the number of people that we could see reduced because of COVID, they weren't coming into where they, well, they couldn't or didn't want to come into our office. And then a lot of people didn't show up to their Zoom calls and things like that. So it's, it's, but it's still been amazing to find out that there's something that's so beneficial to most or a lot of business owners out there and no one's talking about it. I mean, I have not seen one story in the media about it. Have you guys seen, I mean, I haven't, maybe you guys have, but well, you said Forbes is talking about it a little bit now, but not before then. I haven't seen anything. Yeah. The biggest reason for that, if you can kind of posture this with PPP, cause there's a lot of overlap first, both of the, of those programs, PPP and this ERC are COVID relief funds. ERC is the last remaining of the COVID relief funds out there.

08:51 Okay. So when it first came out again, you couldn't do both, but who was benefiting on the back end? Basically who was disseminating that information to business owners? Lenders. Lenders were making one to 5% on the back end of all the PPP loans. Yeah. With this program, it's not going through lenders. It's directly with the IRS. So you would think, well, lenders aren't in there. You would think accountants would help you with this. But as Josh mentioned, this is payroll tax and accountants don't do payroll. They do yearly taxes. They don't deal with where this credit lies on a 941 form. They don't deal with that form. Who does that with the business owner? Well, typically software programs like QuickBooks or ADP or Gusto. And so software programs aren't designed to calculate this credit because it's a busy work calculation if you want to look at it that way. And so there was

09:37 no infrastructure, hence the need for our business to be able to have good people like you to talk to business owners and let them know about what this credit is. It is getting a little bit more noticeable out there in the business world. But again, like I mentioned, it's only been opened up recently, less than 12 months ago, and really opened up even less than three or four months ago. And so it is basically a new credit if you want to look at it that way. So the most important thing, I think, is that people do it the right way and don't get bogged down in the details. And that's what you guys can handle is help people streamline the process, sort of like being that guide boat through a canal, making sure people navigate the rough and unsteady water is the right way to make sure they get their entitled money. Because I think a lot of mistakes can be made from finding out about it to filing for it, can't it?

10:25 Yeah, with every amendment and change to this program, it's affected how you should be able to file. I mean, just the logistics of it. So we see very, very, very often where we will actually run through a second time with someone's ERC credit if they actually have filed for it. And we're getting on average, you know, eight, I mean, sometimes one to two times the amount of the credit back. So it is a complicated credit. They've made it complicated, the IRS code on this. And so you do need to follow the rules and guides to make sure that you're not getting in trouble on the back end as well. When you said IRS and complicated, I laugh because they never make anything complicated. Yeah. Yeah. All right. So we've got about a minute or so left. What would you tell folks who are, I mean, let's say we've got a business owner who's got 10 employees and he or she was able

11:11 to survive through COVID. They may or may not have got a PPP loan, probably did. And now they're, you know, they're debating on whether to going to ercaction.com and finding out about it. What would you tell them? I would tell them first is what is the cost of this? They're probably wondering, okay, how much are you guys going to charge me? Well, the one thing we saw as a bottleneck is like you said, if you, if the IRS is coming after you for money, you know, they're going to be knocking on the door in a day. This actually takes six to eight months to receive the money. We decided we are not going to charge anything up front. We're literally going to walk them through the whole process, do the whole filing and hold their hand until they actually receive the money. Once they receive it, our fee is 15%, whatever that credit is when they get the money. So that was one thing we also said as far as, you know, getting this off the ground is people

11:57 don't want to sit there and wait for six to eight months after they paid for something for that long. So it literally will take eight to 10 minutes to go through the questions on ercaction.com. And that point in a week or two, we're telling you how much you're approved for. Then we're sent off the IRS six to eight months later, you're receiving a check. So no upfront fees and then when, when, and if they get the benefit, you get 15% of it. That's pretty, that's a pretty good deal to, as a business owner to get 85% of money, you never would have gotten to begin with. Correct. Yeah, exactly. Makes a lot of sense. Folks, I'd encourage you to go to ercaction.com, find out what it would mean for you. And I really appreciate your time today, Mark and Andy, and hope to have you on again in the future and talk about maybe some of the changes that come up in the tax code as we go along. Thank you, Coach Pete. Thanks, guys. Take care. And folks, we'll be right back after this.

12:44 Thank you.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Each and every week I talk to very interesting people and the most important part is that I shouldn't be the only one hearing it. I really feel that if these people make sense to me that everyone out there needs to hear it. So stay tuned folks and I hope you enjoy this newest weekly segment on Coach Listens. Well folks welcome back into the Financial Safari. Now this is the time of the show where I like to look around locally and look around what's really happening current and Jennifer I think we have a really good guest today don't we? We do we got Brooke Poluccio with us who is with Keller Williams preferred and she is a licensed real estate agent. It's always good to have a real estate agent on to see what's really going on in the pulse locally. We watch tv and we see what's happening nationally but we are it's a gold mine here but

00:48 first of all welcome in Brooke. Hi everyone thank you I'm really happy to be here. Happy to have you because we haven't had a real estate agent on in forever. We really haven't. Almost a decade I think. I don't know why but we're here we got to we have a microphone. Well and we should have them in more often because the way the market is nowadays we need to have them in. Yeah it's a crazy market now. Brooke tell us about the market. The market is hot out here. Yes yes it is. You know it's a great time to buy a home but also to sell a home. I mean this is the lowest our interest rates have been in 30 years. It's just it's crazy. I mean it's such a hot market right now. I can't believe how low interest rates have gotten. No they really are and they're staying there right now. Under three. If you're not under three you need to refinance or you need to decide maybe this is the time to finally unquutter your house and move. Yeah that's true. And also in the fall time is one of the cheaper times to move.

01:38 It is. You know moving expenses are less. Sellers are quickly to sell and buyers are quick to buy in this market. I mean it's just a really really good time. A big reason why people used to move is to go to a certain school or be in a certain school system. These days my daughter I know she's still working from home school from home. It almost defeats the purpose of moving for the school but eventually we'll be back to normal I hope. I mean yeah and we have great and the thing is in North Carolina and our area in the Triangle area we have some of the best school districts. I mean you can't beat that part of it. You know people are just they they really are set on a certain school district and that's where they want to move and that's what we do. We make it happen for them. Now if somebody is thinking of selling their house right now any any tips for them. By the way folks you can always reach Brooke. Brooke with a e so b-r-o-o-k-e-i at k-w.com and you could call her at 919-473-6341 if

02:31 you'd like to have your house looked at appraise wise or you look if you want a buyer's agent on your side. We will give a free consultation and we would just love to hear what your home goals are in the near future. So I mean as a buyer specialist right now in this market I am able to give the time to look at houses to feel what the buyer's needs are and the seller's needs as well. We do both sides of the transaction. You always want somebody to advocate for you. That's a big mistake because a lot of people don't realize that. They do not realize that when they when they drive down a neighborhood and people see that for sale sign outside of that house keep in mind that that real estate agent is advocating for the seller. So as a buyer you want to have somebody advocating for you and guess what you don't even

03:17 pay us. We get paid by the seller the listing firm. Yeah well that's important. Well because a lot of people think well gosh I don't want to pay two people for something but you're not getting paid out of their money it comes out of what the total would have been anyway right. From the listing yep. Yeah so so how important I really think it is. Jennifer you know when when we buy houses a lot of times we forget about that but having somebody on our side who understands the dirty tricks. Right exactly. The paperwork all the things that go into it and here's here's a little advice I have is visit the house more than just with the real estate agent sometimes like if you're if you're if you don't have a buyer's agent go by yourself ride by different times of the day not the time they wanted you to show up. Right exactly. And different days it may be a perfectly peaceful neighborhood Monday through Friday. But on the weekends you never know how many cars are going to be out there. It could get I mean. You never know and that's what a buyer's agent could do they could tell

04:05 conform you on that because they're they're held liable a lot of times if you don't disclose that stuff. I mean as whether it's us showing you a home marketing your home finding other homes on the MLS at the end of the day we're there for you to help guide you through this process. It can be scary for her first-time home buyers. It's scary anytime you buy a house. It's a very big decision. It's one of the biggest investments that most of us will make in our life. I mean you know that it's a very big investment and it can change our lives and we want to just make sure that you're you have knowledge on the market what's happening and that we're there to guide you advocate for you be there for you and even after you're in your home whatever we will still be in contact with you. We always want to take care of our clients and make sure that they're

04:53 getting everything they need especially in this hot real estate market. It is it's going crazy. I've talked to people in the past where they had bought a house and put a lot of money in or renovating it and they didn't renovate correctly and I wrote about my that in my book the fine print fiasco years ago how people spend too much money on things that aren't going to add value to the house right but now it's almost anything you've done right adds value to the house because people want it so bad people are buying I've heard and I don't know maybe you can tell me I've heard people are buying even not even seeing the house they're buying from somewhere else a different state a different country they're just buying because they see it on the Zillow or somewhere else right? Well yeah sometimes we see these properties that go on the market they're about under $200,000 and they they go quickly there there's multiple offers on them because people aren't really thinking about oh the floors oh the walls I mean this is an invest some of them are investment

05:40 properties right we had somebody that was buying one for their daughter who was going to UNC and they they want to they want to flip the house they want to totally gut it and they got it was a hot property there was multiple offers I mean they go quick. That was a strategy I had a roommate back in the day and I was renting a townhouse from a room in the townhouse for him and his dad had bought the townhouse for him when he was starting college and his plan was to dump it after the after John got out done with college problem is John didn't want to leave Chapel Hill. Chapel Hill's a nice place. Nice Franklin Street. Yeah it was Finley Forest condos the problem with Finley Forest back in the day is they built the roofs this would be the condominium complex but they built the roofs flat so when it rained the water stayed you didn't even need a pool you had a pool on the roof so there was always leaks

06:25 there so that was big problem but so we always have to look at different things that could be problems down the road building a pool is that a good idea? I would say building a pool is a great idea I mean if you like to use it right especially with this pandemic going on I think we're gonna see I mean right now in the real estate market I have heard more people wanting a pool in their backyard because you know I'm from Las Vegas so everybody has a pool in their backyard. Staycation. Yeah exactly I mean that's where I grew up and if you did not have a pool in your backyard you were like looked at like what so I mean now with you know not even the pandemic but for privacy or whatever it is I mean people are starting to realize they do want their own pool and if they could build that and they have the land for it why not as long as there's no you know covenants or anything like that right

07:12 put a big fence around there and get an umbrella policy for your house too and your personal coverage because if someone hurts them if they break in your pool and they drown you're liable which is crazy I've never agreed with that. I haven't either. See back then I think that a lot of people wanted big yards with green grass and everything. Until they had to mow it. Right. Until Sunday morning came. Oh yeah. So I mean now yeah I would definitely I have definitely heard of more people wanting pools in their backyard and think about it I mean with new construction well that's that's also booming. A lot of people now are sitting on a very valuable asset and they may have not really liked the house for years and now might be a good time to downsize you know sell your house now for a really good price and and again just like I say with life insurance never cancel your current life insurance policy to get a new one. What if you sell your house you know where

08:00 you live. Well not only that but people that are older they want a ranch because they don't want the steps. You want that first floor master bedroom right. You want that first floor master bedroom. Yeah. Yeah. And in today's society with COVID you know are you doing a lot of virtual meetings with people. That's a good point. I try to get out there in person as much as I can. Nothing like seeing it right. Right exactly. There's a few like there are open houses like I have one this Sunday coming up in Raleigh and I will go virtual as well as be in the house. That's good. Give you both. Right. You still have those people who want to cling on to this virtual during the pandemic which is understandable. Quingons. Right. You know they're nervous to go out and they want to stay home. I get it. I totally get it. But then you know I try to get in there as much as I can. Take precautions.

08:46 Use hand sanitizer. All the stuff. All the stuff. Go through the process. And then you know try to get people more comfortable with going back into open houses. You know we talk about when people buy a car and I've done it before too. You go kick a tire. Right. What good does that do. What's the equivalent of kicking a tire if you're trying to buy a house. Is there like slam the doors or like fill the windows. What is a kicking the tire thing. Because you can't do that unless you're in person. Right. Exactly. Well I think to start off I would just say you need a realtor. You need somebody that's that's the first step. You need an advocate. Because once you walk into that house your realtor is going to guide you through what you if you have questions. If they don't know the answer they will find out for you. But you get your inspection period. You get everything with buying

09:34 that house. And your realtor is right there by guiding you the entire process. The entire way. So I mean I would say that is the I would just say that's the most important thing. Because in a house you can fix things. You can negotiate. But you want somebody that's there for you advocating for you on your behalf. I agree. And her name is Brooke. Brooke Iappelluccio. Iappelluccio. That's right. And her phone number is 919-473-6341. And I work with my Aunt Teresa Lund who is getting a team at the start of next year. And we have been doing great together. So we can answer any questions you have or anything like that. There's the old phrase the stars are aligned. Right. The stars are really aligned right now. Even if you're buying or selling. If you're buying it's still some good deals out there. But it's

10:19 more important than ever to have a really good real estate agent or a team behind you. And also if you're selling. Same thing. Get the best price possible. Get these bidding wars breaking out. Keep raising the price. Folks if you want to reach Brooke. Brooke. It's B-R-O-O-K-E-I at K-W dot com. Brooke. Thanks for your time today. Thank you so much.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Well, folks, this is the time of the show where we go out across the world and find someone that I think is interesting. And as a return visitor this week, he is from St. Petersburg, Florida. His name is Niall Nickel. Niall, welcome in. Hey, it's always great to be with you, Coach Pete. Now, I like to look at Niall as one of my tech experts around the country, folks. And we've communicated for years about the advancement in technology. And I saw online through technology that Niall was in Vegas at the CES, a consumer electronics show. And I wanted to go through with you, Niall, some of the great things you've seen. Number one, how was Vegas? Well, Vegas is always great. You know, the one thing that I noticed this time about being in Vegas is the consumer electronics show was so huge, it was almost impossible to move around. I've heard. Just to get from hotel to hotel, and I'm not exaggerating, it could take you an hour to an hour and a half.

00:49 If you had the fortitude, walking was actually shorter. Yeah. But the first day, again, no exaggeration, I walked just a little bit over 20 miles. Wow. You have one of those little things on your wrist that tells you how long you walk? Well, of course. You know, I'm a tech guy. You know, I have our West Coast offices in Vegas, and I happened to be out there last week. But I forgot all about the CES. I know it was busy downtown Vegas, though, and that's where you were. Yeah, absolutely. You know, any of the hotels on the Strip and the convention center, and it was just a zoo. Yeah, I call that downtown. The real downtown is Fremont Street, where the original Vegas was. But, I mean, everyone goes to the new Vegas, and we call that downtown now. Well, that's true. As a matter of fact, my first visit to Vegas was in 1969, and it was in the only Vegas that existed then, which is now the old Vegas.

01:37 Can you believe the growth over the last decade in Vegas? About three million people now in that area. No, I really can't. You know, every time I'm out there, I am blown away by the number of new high-rise casinos. It's crazy, isn't it? It is. You know why they build them? They make money. They make money. They would not be building them or lighting them up if they weren't. Now, this was the 52nd consumer electronics show all the time, isn't it? You know, it's amazing that it's been going on that long. And, of course, you know, there were other shows prior to it, but it's been kicking around for a long time, you know, when we were talking about the latest advancement being transistors rather than what we see today. You know, and this was your 20th, I think you said, right? So you've been to about almost half of them.

02:23 You know, I haven't counted, unfortunately. I started doing these shows probably somewhere in the mid-'80s, and I've missed a few here and there, but for the most part, it's been every year. So 20 is a conservative estimate. My dad was a college professor, and for 41 years he taught physics, still does part-time. But he also, during my high school years, he had computer stores in North Carolina. He had a chain of four computer stores. One of the great things about him having computer stores, one of the bad things was I had to work for him all the time or for very low pay. But one of the great things was every single year we went to a show called Comrex, and it was in Atlanta, Georgia, which had all the advancements coming up in the computer generation. I assume that the Consumer Electronics Show is even that on steroids. Oh, yeah. As a matter of fact, I used to go to Comdex in Vegas, and that took up, at that time, not even the new convention center.

03:12 It was the convention center in the Las Vegas Hilton that's been renamed a couple of times now. And when I went there the first time, I thought that was huge. And I look at what it is today, and I don't even think the food concessions would fit in that old convention center. The Las Vegas Hilton used to be famous for their Star Wars exhibit. That's what I remember that one for, the pink flamingo one. Let's talk about – give me – if you could, and I know you do because you walk around there, and you said it was hard to walk. But on your slow walk through the CES, what were five advancements that really stuck out in your head that you can see being tremendous marketing opportunities or something really happening in advancements in technology? Yeah, there were a couple of major things that I looked for, and the first one that I came across was 5G technology. Now, everybody's thinking 5G on their cell phones, and 5G stands for fifth-generation technology on cell phones.

04:04 We see all the big carriers, AT&T, T-Mobile, Verizon, Sprint, all talking about their 5G rollouts. But 5G, as it turns out, is really starting to take off everywhere in communications, with the exception of cell phones. It doesn't make a lot of sense on cell phones. But I was starting to see a lot of AI deployment, smart logistics, smart cities, adopting 5G and AI technology, and even bigger happened to be in the healthcare area. So, everybody was talking about 5G maybe rolling out and sort of being in the marketplace in two to five years. It's starting to roll out now. But when I'm looking in all of these other areas, industrial areas, from manufacturing to logistics to healthcare, 5G is really taking off in a big, big, big way.

04:56 Yeah, when I see 5G, I see it on my cell phone every now and then for my home internet. But, I mean, I don't see much of a difference between 5G and the regular G. So, I think we're confusing with all these numbers before letters. The average consumer gets confused. I know I do. Well, one of the things that they're doing with this technology is if I look at 5G technology and what it's capable of communication-wise, you know, if I look at 4G technology on our cell phones or maybe if we've got a wireless hotspot today, it does something in the order of maybe 500 kilobits or kilobytes, I should say, communication speed. And that sounds pretty fast because some people's home internet connections aren't that fast. But if I look at the 5G technology, 5G has the capabilities to go literally almost up to 1 gigabit speed.

05:46 And that's just huge. You know, it's 100 times faster than what we're seeing now. So, maybe to put it into real terms, you could download a full-length, high-definition movie in literally about two seconds. Now, now you're speaking my language. Fast. So, and, you know, when we're talking on the phone, we absolutely don't need that. So, they're getting really sophisticated about this technology. It detects the type of traffic that's going over the network. And if you're just talking, it's going to put you on 4G technology or maybe even 3G technology, the lowest level technology to support it. However, if you're in a real-time medical application where you're doing remote surgeries, for example, the imaging and the connection time, what they call latency, how long it takes you to do something and it respond on the other end, needs to be super low.

06:43 And they're using 5G technology for that. Okay. Well, so, speed is good. And speed helps a lot of folks, especially with downloading the movies and everything. So, let's look at the virtual reality world. Anything new coming down the pike? Well, virtual reality was one of those technologies. Now, it's starting to pervade literally every area. Probably one of the neatest applications I saw out there, because it is going to be in every department store you could imagine, was a mirror that you would stand in front of. The camera would take an image of your face. And then it was a cosmetic product line that was doing this. They would recommend the best colors for your hair and skin tone and all of that. And then they would show you what the makeup they were recommending would look like if it was applied to your face as you're standing in front of the camera.

07:35 So, you sort of see this in real time. And I thought that was pretty cool. But the next part sort of blew me away. Since they were doing that analysis, they looked at your skin. And if they noticed anything that maybe looked a little funny, they'd say, you've got this blemish or this defect. And it's not a big deal. But we've got products that will help you for that. Or if it was a big deal, they'd say, hey, this looks a little suspicious. We recommend that you go see your dermatologist as soon as you can to have this looked at. And if you'd like, we could send you an image of what we're talking about. Wow, that's pretty cool. So, yeah, you start to see things like that. When you start to see the in-car navigation systems, well, we all have those, whether it's on our cell phone or whether it's embedded in the car today.

08:23 And as you start to see those now, as you're driving down the road, rather than just having something pop up about where it's at, you're starting to see a pop up that might be the restaurant. And it might give you a little advertisement for the restaurant and tell you what they serve, what their specialty is, and all of that. And it might even be a message from the manager that's augmented over the top of your map. So you're not losing your map, but that AR technology is putting all of that new information on there. How about new advancements in driverless technology? Driverless technology, I can't believe the advancements that they're making. As a matter of fact, I can't believe that we don't have a lot more driverless vehicles on the road. In fact, my prediction is, is before the end of this year, we're going to start to see a lot of driverless vehicles on the road.

09:13 When we look at what they could do and how they're doing it, first off, the accident rate for driverless vehicles is about 1.100 of what it is for driver-assisted vehicles. So they're doing a much better job with the driverless vehicles. They're not perfect yet, but I'll tell you what, they're so much better than the average driver, which includes me and you. I'm pretty happy with what they're doing. So that's really a good thing. But when you take the driverless cars and you take smart city technology where the car could communicate with the traffic lights that are on the road, now what it does is as the car is approaching an intersection, it's either slowing down or speeding up.

09:59 You noticed I didn't say stopping because it's going to allow cars basically to seamlessly weave through each other, if you will, in the intersection, not have to stop, which means traffic will flow better, faster, lower emissions and less impact. And oh, by the way, you'll get to your destination faster. So it might slow you down from 50 miles an hour to 20 miles an hour, but you're going to keep moving, and it takes care of all of those things, keeping proper following distances, making sure that there's no collisions with the cars coming through. In fact, the only thing we have to worry about are cars that have drivers in them not knowing how to handle things like that. Well, yeah, that's what I've told my friends. I said, you know, as soon as this becomes a thing, we're not going to be allowed to drive anymore.

10:46 It'll be illegal to be on the road. You'll be a criminal wanted by everyone if you're on the road driving. You know, this reminds me of model railroads. My dad had a big train set back in the day, a tremendous train set, where he had a bunch of trains, like six or seven trains at one time going all over the tracks. He routed it so they never had to stop, but they were crisscrossing each other. That's what you're talking about there, it sounds like. Yep, it's just a crisscross interleave in the intersection. You know, can you imagine going into an intersection when you see another car going into the intersection? No. I mean, obviously it's going to take some getting used to, but that's what they're talking about. I just want a lot of pillows around me in the back seat when my car is driving itself, just in case. Just in case. It says it doesn't like you much. That's right. Now, let's talk about 3D printing, because years ago I heard about the technology where no one would have closets anymore.

11:34 No one would have to go to the dry cleaner. No one would even need laundry machines. They would just get measured by a scanner. They'd walk in each day, and the next morning their clothes would be printed out for them. And in the evening they'd take the clothes that were printed out, throw them in a recycling thing, and it would recycle that material and make new clothes the next day. How close would we do that? Well, we're probably not super close to that. But as far as 3D printing. Yeah, well it is. And now what they can do is they could scan your body, and they can make clothes today that perfectly fit you. That's pretty cool. And I mean fit you perfectly, and the clothes that fit today, because you really enjoyed a great dinner last night, may not fit tomorrow. So, yeah, some things like that certainly are coming. They're taking a lot of those clothes that they custom make for you, and they're upcycling. So when you get done with those clothes and they don't work for you anymore, you upcycle to another location.

12:24 Somebody grabs them at a discounted price and things like that. Those things are starting to be popular. But what I noticed in the 3D printing area that blew me away is 3D printed metal has been a difficult thing. They've been able to print metal in 3D for quite some time. But the problem has been the durability and reliability of it. So they've been working over the last number of years to make metal parts, because sometimes they have to, out of 3D technology. And they have got that down absolutely positively. In fact, I was blown away by what they could do. Metal parts that look every bit as good as a precision CNC mill part, manufactured part. So now if you're somewhere and, you know, you need a solid part that breaks in a vehicle and there are no replacement parts, as you said,

13:14 the repair shop is going to have the capabilities to print replacements now in just a matter of an hour or so. So phenomenal what they could do. The other thing is, is they're starting to use carbon fiber technology in 3D printers. So where you could replace a part with a carbon fiber part that's typically stronger than steel and much lighter, they're able to do that now. And they haven't been able to print with carbon fiber technology for quite some time. So that was a new addition to things. By the way, what was the attendance at the Consumer Electronics Show this year? You know, I'm going to give you my prediction. I bet you their prediction comes out at about 200 or 250,000. I think it was probably closer to 275 to 300,000. It was the most crowded I've ever seen. Yeah. So what was the biggest wow you had in how many days?

14:01 You were there like three or four days? I was there for three days. The biggest wow that I had wasn't really one particular thing, but it was where voice assistant technology is literally appearing in everything. And when I mean everything, everything from your freestanding fan to toothbrushes, you're starting to get voice technology in it. And when I talk about the smart toothbrush with voice technology, everybody goes, okay, wait, what are you talking about? So, you know, obviously we all struggle with getting our teeth brushed properly. We get in a hurry. Maybe we don't get the top right corner or something like that. Well, now they've got smart toothbrushes that could tell where it's at in your mouth.

14:47 Is it at the top, the bottom, inside, outside? And it gets the dwell time, how much time you're spending brushing in that particular area, what sort of pressure you're putting in that area and all of that. And before you put that toothbrush down, the voice assist app could come back and say, hey, you know, you really did a lousy job on the bottom left corner. You need to spend about 10 more seconds on that. So the voice technology getting into everything is it pairs well with the AR technology, the AI technology, the artificial technologians, the driverless technology. All of these things are starting to come together. And really, we're going to see an explosion in new things in the next few years. Well, it sounds really exciting of all these things in technology world, but we still have to live a day-to-day life.

15:34 And so these things, a lot of things you've said that you saw are going to make life simpler, not just for the folks that want to be the first person on the block to have something. And one final thing, we talk about voice technology. It needs to be, if I'm telling my car to do something or my toothbrush or even my wife to do something, they need to understand what I'm really saying. And when I talk to Siri, about three out of every four words, she really doesn't understand as good as she should. And so if I'm giving orders to a car, it has to understand me 100%, not, let's say, 70% like Siri does. You know, that's why they're trying to roll this technology out, quite honestly, into more and more things. Because the more places they put it and the more times people say, no, that's not right, or they give the same command over and over, it clearly recognizes that it's missing something.

16:20 And it helps us refine and better define that technology. So as the technology becomes a little bit more ubiquitous, we're going to find that it's going to get a whole lot better. And that's going to happen on really an exponential rate. So we're going to see some vast improvements in a short period of time. Well, sounds really exciting. Folks, again, his name was Niall Nickel, and he is our consumer electronics expert talking about the Consumer Electronics Show in Las Vegas. Niall, hope to have you on again. If you see anything that really is resonating after you've been to the trade show, been to this big event, if you see anything out in the public that really is coming on strong, let us know and we'll get you on quickly. We'll do it. You take care. Thanks. Folks, we'll be right back after this.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Each and every week I talk to very interesting people and the most important part is that I shouldn't be the only one hearing it. I really feel that if these people make sense to me that everyone out there needs to hear it. So stay tuned folks and I hope you enjoy this newest weekly segment on Coach Listens. Hi, this is Steve Sedahl. Retirement can open the door to pursue a passion that maybe you've always wanted to do. For many, it's checking off items on the bucket list. For others, a chance to share that passion and inspire others. Many retirees are finding that public speaking can be one way to get that message out there. The big question is, how do we even begin? Enter Grant Baldwin, professional speaker, author, and entrepreneur.

00:46 His new book, The Successful Speaker, Five Steps for Booking Gigs, Getting Paid, and Building Your Platform, tackles the process in a no-nonsense way and can help you get your speaking business off and running. I had a chance to talk with Grant recently about his book, his business, and his passion for helping others. Grant, welcome. I'm curious how the process for you has been to go from a speaker, where you built your own business, to now sharing that with others and helping them get started. We found out that a lot of people who are interested in speaking just go, I've done some speaking, I enjoy speaking, speaking is one of those things I'd love to do more of, no idea what to do from here. So we've tried to really demystify and break it down and show people just a step-by-step process of exactly how to find and book gigs, whether that's, you know, for some people they want to do,

01:32 you know, 50, 75, 100 gigs a year. And other people are like, I don't want to do that many. I've got a full-time thing going, or I'm headed toward retirement. And like, I wouldn't mind doing five or 10 though, here and there. And I just, I just don't know how to find those five or 10. So yeah, that's definitely what we're going to show how to do inside the book. So how did you get started in speaking? Because you certainly have done a fair amount of that yourself and obviously have a passion for teaching others. Yeah. So if we go way back in time, back in high school, I was really involved in my local church and my youth pastor had a really big impact on me. And so then after that, I was like, I want to, I want to do that. Like I, he was a great speaker and really made an impact in my world. And so I went to, went to Bible college and then worked at a local church as a youth pastor. So there I had a lot of opportunities to speak and really enjoyed. I enjoyed speaking, felt like it was one of those things I was

02:17 decent at, wanted to do more of. And again, no idea what to do from there. I had no idea how much do you charge and who pays for speakers and, uh, and, and, uh, what do you speak on? And all the, like the ins and outs of the speaking industry. So after that, I met a couple of guys who are full-time speakers and just started to learn the business and basically went from zero because everyone starts at zero to the point where I was doing about 70 gigs per year. Uh, and I loved it. It was great. I had like amazing opportunities to just really make an impact, make a difference and speak to a lot of audiences and, and help a lot of people and change a lot of lives, including our own. Uh, and then it got to a point where I had a lot of people who were asking me, Grant, I see how you went from zero to 70. How, how do I do that? I want to do that. Or again, some people who would say, I don't want to do 70, but I'd love to do, you know, two or three or five or 10, but I don't know what to do. And so we started teaching some of that, just taking what we had learned, some of the

03:05 systems and processes and tools that we had learned, uh, by being in the trenches for several years and just started teaching that. And so that's the core of what we do today. Like you mentioned, we run a company and training program called the speaker lab. Um, and yeah, and teach people the, the ins and outs of all things speaking. You're very passionate about the teaching part of this too. I really like that. Yeah, I really enjoy it. I mean, I figure we all have to work. We all have to make a living. We all have to eat and live indoors, but if we're going to do that, I'd rather do something I enjoy. And speaking is one of those unique things that is certainly something that terrifies a lot of people. Like some people listening right now, maybe like there is zero chance I ever want to get on stage anywhere. Uh, but there's also plenty of people who are saying that sounds amazing. I would love to do that. So I know that the difference it has made, uh, in my own life, I know the difference that I've been able to make in the audiences that I've spoken to,

03:51 but I also know that the speakers that we've worked with, the impact that's made for them, for the audiences that they speak to. Uh, so really there's, there's very much a ripple effect of the difference that can be made with speaking. So if you've got something that you'll, you want to be a speaker, how do you know what's the right topic? How do you know what direction to go? Yeah. So there's definitely a blend there of, of figuring out what you want to speak about, who you want to speak to and what is the market actually care about? Because just because you care about something or just because you think something's important or you think other people should find it important, doesn't necessarily mean that anybody cares about it or it doesn't mean that anybody pays speakers. So if you said, I am deeply passionate about teaching dogs, how to do the personal finances and budgets for families, I was like, that's great, but it doesn't mean anybody cares about it or they care enough to hire speakers to come

04:37 in and talk about that. So there's definitely an overlap. Now, if you want to do like a real practical exercise, one thing you can do is if you say, okay, I have a sense of what I want to speak about or who I want to speak to, uh, go to Google and look for other speakers who are doing something similar. So you might do a search for, you know, personal finance speaker or investment speaker or retirement speaker or parenting speaker or marriage speaker or customer service speaker or whatever. Right. And ideally what you want to find is speakers that are a step or two ahead of you. So you don't want to be looking, you know, light years ahead. So if you said, okay, I want to, I want to be a personal finance speaker. So let's look up and see, you know, what, what's Susie Orman speaking at or what's Dave Ramsey speaking at? Like, like that doesn't work. Okay. We want to look for people who are again, like maybe a step or two ahead of you. And the point here is let's say you start browsing around Google and you can't find anyone who's doing it. That is not a good thing. Now some speakers might think like, oh, that's

05:27 perfect. I'm going to be the first. Like, no, no, no, no. Like we're looking for existing opportunities that exist in the marketplace. So if you can't find anyone that's doing it, there's typically a reason why. So you want to look for other speakers who are doing something similar. Another thing you can do is you can do a search for the type of event that you might speak at. So you might do a search for personal finance event or retirement events, or if you have an idea of who exactly you would be speaking to, what's the, you know, if you were speaking to realtors or insurance agents, you might do a search for that of, you know, realtor conference or insurance agent conference. And so if you're doing searches for some of these and you can't find any around your topic or around your industry or around the audience you would speak to, again, that is a red flag that there may not be opportunities that exist. So just doing some simple searches there and trying to get a sense of what's already in the marketplace. What is it that people are already hiring speakers to

06:16 talk about? That'll help you to help you get going in the right direction. Grant, what about someone heading into retirement? They've got years of experience. They're willing to share. Is there a market for someone like that? Yeah. So here's the problem. Here's the challenge that a lot of speakers run into is that when you, when you're in that type of spot where it's like, Hey, I've got a lot of life experience personally, professionally, there's a lot of different things that I could talk about. And I'm trying to figure out how to narrow it down because one of the things that we teach speakers is that you need to be the steakhouse and not the buffet, be the steakhouse, not the buffet. And here's what I mean by that. So Steve, let's imagine that we were going to go grab, um, go grab a bite to eat. We're looking for a good steak and, uh, we have a choice. We could go to a buffet where steak is one of a hundred that they offer and they're all mediocre, or we could go to a steakhouse where that's all they do.

07:04 They are the best in class at steak. They don't do tacos. They don't do pizza. They don't do lasagna. They don't do waffles. They don't do anything else. They do steak really, really, really well. That's what you want to be positioned as, as a speaker. So even though at a steakhouse, whoever that chef is there, they could probably cook a really good hamburger. They could probably do a spaghetti really well, but their best is at steak. That one specific thing. That's what you want to do as a speaker. You want to be the specialist, not the generalist because it's counterintuitive because oftentimes we think the more topics I can speak to, or the more audiences I can speak to, the more opportunities I have. The opposite is the, is the truth though. The more specific I am, the more narrow I am, the more focused I am, the easier it is to book gigs. So you want to narrow it down and try to be the specialist and not the generalist. I like that. That's a great analogy.

07:53 We're talking with Grant Baldwin, the author, the successful speaker, also the guy behind the speaker lab, speaker lab.com is where you'll find him. So as, as we begin to narrow down that topic and we, you know, we're kind of getting there, what do we do next? Yeah. So it really, uh, you like, you can take all the different things that you speak about or who you could potentially speak to. Uh, once you feel clear on that, and once you've again, kind of gone back to that, what we would call the validating your expert positioning. And that's where, again, you kind of do some of that market research to see who some of the speakers are that exist in the marketplace and feel like, okay, I feel like I got my topic. I feel like I got my audience. Uh, we basically teach what we call a, uh, the speaker success roadmap. This is a five-step process that makes the acronym speak S P E A K. Uh, so the S is kind of what we've just covered so

08:39 far that select a problem to solve the P then as you prepare your talk, you figure out what's the solution to the problem that I'm going to solve. And so this could come in the form of a keynote or a workshop or breakout or a seminar. Uh, we also talk and teach you about, um, creating the talk itself and storytelling and using humor, delivering from stage, the environment, the audience, uh, all of those different, those type of art side of the, of the, of the talk. Um, because the reality is that your best marketing is a great talk. The reason that you and I might go back to a certain steakhouse time and time and time again, isn't because the font on the menu, it isn't because, uh, you know, the, the, uh, decor inside it's because the steak is really, really, really good. So in any, any of us right now, anybody listening, if we were going to come to your town and visit, and, and I tell you what, I love tacos. So if I was coming to town and I said, Hey, I'm looking for the best taco place in town. What do you got? Most people are going to have

09:26 some place in mind. If you're a taco enthusiast like me, and you're going to have that place, not because of, of anything about it other than the food is really, really good. And so the same thing is true for your product, so to speak, as a speaker, your product is your talk. It is your presentation. So it's the type of thing that you want to make sure is polished and, and you can deliver well. So it's the type of thing that people are like, wow, you've, you've got to have, you've got to have this person. You've got to have John, you've got to have Steve, you've got to have Sally and because they are so good on stage. They're so good to work with. And that can ultimately make a big difference for you as well. Part of what you do too, is, is the marketing aspect of this and how important is that? And what kinds of things do we need to have to get our word out? So to speak. Yeah. So once you have the, the, let's go through that, the select a problem to solve, then you've got the P that prepare your talk. The E is establish yourself as the expert. This is where you're drawing the line in the stand. You're planting your flag

10:15 saying, all right, I'm the go-to expert. I'm the go-to authority on this subject. Or topic. And so there's two key marketing tools that you need. You need a website and you need a demo video, a website and a demo video in this day and age. If you don't have a website, you don't exist. Like people will not take you seriously. And then on the demo video, a demo video is, I want you to think about like a movie trailer, a movie. They have, you know, 90 minutes, 120 minutes. They boil it down to two or three minutes for a movie trailer. And the point of the movie trailer and the point of the demo video is to make people want to see more before someone's willing to hire you, before someone's willing to put you on stage. And especially before someone's willing to pay you, they need to get a sense of how you are as a communicator. Are you good at what it is that you do? What is it that you talk about? What's your kind of style of presentation? Are you humorous?

11:01 Are you interactive? Are you, how do you engage in with the, with the audience? How do you keep the audience with you? So all those are factors that they are looking for literally in just a couple of minutes. They don't need to see a full video, but just a couple of minutes that gives them a sense of, yeah, this is a good speaker. This is someone that would be a good fit for our audience because when they put you on their stage, they are putting their reputation on the line. So they want to make sure that if they're going to do that, and again, especially if they're going to pay you money, that they feel confident. Yeah, I've vetted this person. I've researched this person. I've seen them speak. They do a good job. They would be a good fit for our event. So those are the two key marketing tools that you need. You need a website and you need a demo video. And is there, is there help out there? Can people, are you somebody that could help us do that? Is there a way to do that? Yeah, a hundred percent. I mean, you know, inside of our elite program, we actually help you create both your website and your demo video. We do some of those

11:48 things for you because it can be something that is intimidating for people who are not tech savvy. Now, I would also caution you and say that you want to do this with excellence, but make sure you also remember that you're creating version 1.0, that each time you speak, you're going to get better. You may get better demo video footage. As your speaking business grows, you'll probably update and improve your website. So realize you're creating version 1.0. Still do it with excellence, but work with what you've got and improve as you go. But yeah, inside of our elite program, we actually, like you mentioned, we actually help you create your website and help you create your demo video. The SpeakerLab.com is where you start there, folks, if you're interested. And what about fees? And is it okay to talk for free? Yeah, great question. So when it comes to speaking fees, there's a couple different variables and factors that go into how much you should charge, right? Because speakers always want to know,

12:34 how much should I charge as a speaker? How much can I make as a speaker? And the reality is, is that it depends, which I get is a horrible answer. So one, I'll give you the shortcut answer, okay? And then I'll give you kind of the thought process behind it. And you may have actually used this, is we have a speaking fee calculator. It's totally free. You can go to myspeakerfee.com, myspeakerfee.com. You answer a couple of questions. It tells you what you should charge as a speaker. It takes you less than a minute. Again, totally free calculator. Play around with it. It's really fun. So that's the shortcut answer. The other answer would be, what you should charge depends on a couple of variables. It depends on your industry. You can charge more in some industries versus others. You can charge more speaking to corporations than you can to churches. You can charge more speaking to colleges versus

13:19 elementary schools. So there's some markets where you can just charge more than others. Another factor or variable is going to be your experience. If you're a brand new speaker who's just getting started, you've only spoke a couple of times, you typically won't be able to charge as much as someone who's been doing this for many, many years and just frankly is a better speaker. And then the third variable is going to be your marketing materials. So if we go back to the website demo video, we talked about earlier, when an event planner is considering hiring you as a speaker, they're going to look at yours and other potential speakers' marketing materials. And so your stuff needs to look on par with those. So if you say, let's say I want to charge $10,000 as a speaker, then your stuff needs to look on par with other $10,000 speakers. Because whether we like it or not, whether we admit it or not, people still judge books by their covers. And so if someone looks at

14:07 your website and your website isn't good, they are going to assume that you aren't good as a speaker. It may not be fair, it may not be right, it may not be accurate, but we all do it. And so you want to make sure that your website and your materials look sharp. Now, to the second part of your question there, should you speak for free? What I would say is that speaking for free can have kind of a bad rap. We oftentimes think of it as a negative thing, or if you speak for free, it doesn't count or something, something silly like that. The truth is, is that it's okay to speak for free as long as you know why you're doing it. Don't just speak for free out of the goodness of your heart. You've got to make the transition here that you are running a business. Now, if speaking is just a hobby, then sure, go speak for free all day long, every day, and it makes no difference. But if you're doing this with the emphasis on, I want to make money, I want to make a living from this, I want to share my

14:53 message, and I want to do this for as many people as possible, then you need to receive value for the value that you are delivering. Now, the value that you receive may come in the form of a check or may come in other forms. So for example, some speakers may speak for free, and they do it for lead gen, meaning if you have some other type of product or service or coaching or consulting, it may make sense for you to speak for free because you're going to generate additional clients out of that that may be more beneficial and more lucrative than what you could have made from the event anyway. Another reason may be just to practice. The way that you get better as a speaker is that you practice. The more reps that you get in, the better you can become. So it may make sense for you to speak for free a few times just to start to get the practice in. Another reason may be to network. As speakers, there's a certain amount of cachet and credibility and authority that goes along with being a speaker.

15:41 And so if you're at a conference or an event with other speakers there, it may be a good opportunity for you to kind of rub shoulders and connect with some other speakers that may be there that you're interested in connecting with. So there's certainly value there that you can receive that may not always come in the form of whether or not you've got to check at the event. Interesting. And so Grant, one of the things that you've said in your podcast and what other speakers that I've heard you interview, they talk about how important it is to, it's yes, you've got to be dynamic and make a killer speech, but at the same time, you've got to be sort of be around and be helpful and be present with the organization. Yeah, 100%. Part of what they're paying you for is what you do on stage, is what you deliver from the stage, right? So I'll tell you this, if you're a great speaker on stage, you're amazing on the platform, but you're a pain in the butt off

16:31 stage. And by pain in the butt, I don't mean like you're a prima donna or you're a diva or you're demanding or anything like that. I mean like you're unorganized or you're sloppy or you drop the ball on things or you're not detail oriented and you said you're going to be at a sound check at a certain time and you weren't there or you were late or you're rude or anything like that. Like that's the type of speaker people don't want to work with because you've got to think about this from the event planner's perspective. When you're putting on an event, there are hundreds and hundreds of spinning plates and you as a speaker are just one of those. So the easier you can be to work with, the easier that you can make the life of the event planner, the more likely they're going to want to be to work with you. So yeah, who you are on stage in terms of your speaking, your presentation, that really matters. But who you are off stage may be just as important, if not more important.

17:19 So the book is called The Successful Speaker. And so that's out now. We'll say that it's out now. And how else do we reach you and where else can we find about The Successful Speaker or The Speaker Lab? Yeah, everything we do is at thespeakerlab.com, thespeakerlab.com. And like you mentioned, the book is The Successful Speaker, Five Steps for Booking Gigs, Getting Paid and Building Your Platform. Depending on when people listen to this, we have information about the book and potentially pre-ordering it, if the book isn't out yet, over at thespeakerlab.com slash book, thespeakerlab.com slash book. But if you're listening to this after the book comes out, then you can pick up the book at Amazon or Barnes & Noble or wherever books are sold. Great. Anything else you want to touch on that we haven't talked about yet? This is all very exciting stuff. Yeah, I would say this. Like everything that we've discussed, everything we've gone over, speaking is in the systems that we teach, speaking is very

18:08 simple, but it's not necessarily easy. It's simple, but not easy. And what I mean by that is it does require work. It requires discipline. It requires effort. Just because you heard these steps and maybe you nod along or maybe you took some notes and you're like, oh yeah, I can do this. Like it still requires effort. It still requires work. So it's kind of like, you know, if you're going to lose five pounds or 10 pounds, what do you got to do? Like everybody knows we got to do two things. We got to eat right and we got to exercise. That's it. You got to pay attention to what you eat and you got to exercise. It's simple, but it's not easy. So it still requires work. It still requires effort. So you can absolutely be a successful speaker. You can make a dent in the world. You can change your own life through your speaking. You can make a huge, huge impact both financially and personally for yourself and for others, but it requires you to take action and to make an effort.

18:55 Thanks again to Grant Baldwin, author of The Successful Speaker, Five Steps for Booking Gigs and Building Your Platform. The book is available everywhere. Amazon, Barnes and Noble, places like that. You can learn more about Grant himself at thespeakerlab.com, thespeakerlab.com. You can also find his podcast, The Speaker Lab, wherever you get your podcasts. I'm Steve Sedahl.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Each and every week I talk to very interesting people and the most important part is that I shouldn't be the only one hearing it. I really feel that if these people make sense to me that everyone out there needs to hear it. So stay tuned folks and I hope you enjoy this newest weekly segment on Coach Business. So we're talking with Debbie Boyd and you have spent 20 years or so in the mortgage business, in the finance business, and you're here to kind of shed some light on what you're thinking is happening in the housing market. Correct. Thanks so much for having me. There's a lot going on in the market between the Fed and the Senate. It seems that mortgage rates are going to be in the headlines for quite a while.

00:49 Well and again mortgage rates now they've creeped up for the it's the highest they've been in several years at this point when they're when they're looking over four maybe even five percent. Right and they're going to keep going up they're not going to ever come back down not not in the foreseeable future. Why do you suppose that is? Well the Fed we you know we have a new Fed manager and he's he is pretty different. He is not going along and getting along. He thinks that the economy is expanding and when the economy can expand it can take a hit. We need to get rates up for the country for interest rates in general paying back banks trying to get banks rolling again and move the economy along and inflation is going to be changing a little bit as well. So the Fed is going to raise

01:39 interest rates the next opportunity they get and they'll possibly raise them to maybe three times next year. That's because they feel that there's growth in the expansion of our economy now and we can take the hit. We can consumer confidence is high our jobs are good we've got the lowest unemployment a long time. The economy can support an interest rate increase that's that's their opinion. And do you concur? Well I mean you know you kind of have to go along with it and a lot of people I think are really going to be scared when the rates go up. They get scared the market gets shaky every time it happens. But we we're needing to move the money upwards. There is a shortage if you really read the news much in most local housing markets. There's not a lot of entry-level first-time homebuyer houses

02:30 and that's forcing the prices up anyway. So when the economy is doing well prices are going up. That's just the that's just the way America works. That's the way capitalism works. So supply and demand these first-time homes because there's not a lot of supply are increasing in cost taxes are going up. I think everything is going up and that's what happens when the economy starts chugging along again. If you remember interest rates back in the 80s were 10 11 percent. So this is really nothing. We've been on sale for years. Well that's exactly right and and uh yeah I was I bought my first house back in the 80s and yes it was double digits. Right I looked at a rate sheet here that we had back let me see what year was this. Um this was back in October of uh 80 and uh

03:18 rates were at 10.875. Wow. So um you know I mean mortgages have always been expensive. This is I mean practically free money is what we've had the last eight nine years. Well and so how is this going to affect the the first-time home buyer? Are they are they going to be scared out of the market? Is this going to kind of have a negative effect? Well I mean I think everyone is going to be shocked when the rates start going up because most people don't understand what triggers the rates going up. But it's kind of like the price of milk or the price of a beer or whatever you want to buy. You know bread costs a lot more than it did 20 years ago. That's just what you pay if you want it. So yeah it's going to get it's going to not everybody does you know owning a home is not an American right. It's a privilege and you have to

04:08 save money and have good credit. So it's one of those things we go back to that you know maybe you have to save longer. You know back when our parents were buying homes they had to save money for a long time before they had a down payment for a house. So you know we're in this instant gratification um kind of society where we want it we want it now and we think everybody deserves it and that's just really not the case. You're going to have to work for it. And then as the as the interest rates go up I mean that that influences the bond market in another way. I mean that goes down right? Right the bonds yeah yeah as interest rates go up bonds go down. So um bonds are not a good buy right now. This is a really in the next couple of years you're going to need to rebalance your portfolio. If you don't have a financial advisor I'm also uh one of those um we're starting to see a lot of rebalancing and I'm

04:59 going to get my clients rebalancing in about not yet probably the next eight months but not today. The market's still going up but at some point you know we've been on this roller coaster for eight years now and it's been going up. Um it's going to come down eventually and I think we need a reality check and just prepare for that. You know a lot of the young financial advisors that are in the business today don't remember when the market fell. They weren't even in the business then. Sure. So it's going to be the older people that remember and they're the ones that are scared. Well let's talk about that for a second. I mean if someone is heading into retirement if they're mid-50s and is it between mid-50s and mid-60s they're thinking about retiring now uh what what should they do to prepare at this point? Well you know they they do need to sit down with their financial

05:46 advisor. If they don't have one call me and and I'll find out where they're at in the system. I've got people in their 80s that are fully in the market because you know they've got enough money to live on. This is going to be given to their children as a legacy. Well their children are just going to give it back to me or some other investment advisor to invest in the market. The stock market is the way to make money over the long haul. So you're if you're going to need your money out in the next few years you might want to start pulling it out slowly now or move it into more type of annuities that pay a fixed rate to where you're safe and secure and you can't lose money. If it's in the stock market the stock market can drop 20 percent and I'm guaranteeing you that it will in the next few years. It's just how you prepare for it and do you have enough time to climb back up after that. I'm 53.

06:36 53. I might have got an IRA. It's in the stock market. There's no way to get it out and I don't know that I want it out. I've got 20 years before I retire. I'm not in that big a hurry. I can weather a 20 percent drop and then a 40 percent increase. So I can weather the storm. Everybody has a different tolerance for that risk though. And I think too you know you say get with an advisor and maybe get with an advisor that's more focused on distribution than acquisition if you're getting close to retirement? Well sure sure you've already acquired what you have. Now I think it's my turn when you hit your 60s and 70s to figure out how to dole that out to make sure you have enough you know in their 50s is when you should do all your planning. That's when you need your long-term care before anything

07:23 happens. That's when you need to look at how you're going to distribute your money and how to make your money stretch. Once you're 70, 75 now we kind of get into that how do we disperse that money in a tax-free way to your beneficiaries and your kids, your grandkids? What kind of things can we set up that's tax-free for them? So it's a process. Not everybody's at the same place at the same time. Absolutely. And you know with the tax laws that passed late last year and that does seem to be having an influence and I'm kind of hard-pressed to figure out if it's all good or all bad or somewhere in the middle. Well you know it depends. Everybody asks you know when do we know? It depends on when you die and and we don't know that. So you know you're you're saying do you take your money out now?

08:12 Do you think your taxes are going to be higher when you pass away? I don't know if I'm hit by a truck tomorrow you know I will have prepared today and what I've done today is going to work. If I live into my 90s now I'm concerned with do I have enough money to last that long? Pay for medical and who knows what that medical is going to be like. So I always tell my clients you're going to need more money than you think and you're going to need it longer for what you think. But when you are done with your life you're going to want to leave it tax-free or as tax-free as you can get to your kids, to your grandkids whether that's in a trust or it's like mine is in an annuity that gets to be passed to my kids tax-free and my kids are teenagers now and I'm in my 50s. So I have a little different

09:00 slant on a plan than I'm in my 70s. So Debbie we got to wind things up here but I mean do you have any other thoughts that you want to leave us with? I would say if you're going to buy a house you buy it sooner rather than later. The interest rates could be up in the sixes by next year. So buy it now. If you have credit issues take care of those sooner rather than later. Just start to work on it. Don't wait and think things are going to get better. The economy is going to keep changing. I think you need to get your money in order. You need to plan better. Most people plan for their vacations more than they plan for their finances. That's great Debbie. I appreciate it. Thanks for all your time today. You've been very helpful. Thank you. For the Financial Safari News Network, I'm Steve Sedahl.

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00:00 You're listening to the Financial Safari News Network. Each and every week I talk to very interesting people, and the most important part is that I shouldn't be the only one hearing it. I really feel that if these people make sense to me, that everyone out there needs to hear it. So stay tuned, folks, and I hope you enjoy this newest weekly segment on Coach Wissens. For the Financial Safari News Network, I'm Steve Sedahl. Now, cryptocurrency, making news frequently, Bitcoin often in the financial headlines, whether it's way up or way down. But what is cryptocurrency and how does it work? Joining me today is Heather Wagonall. Heather is a financial planner. She hosts her own radio show called Unlock Your Wealth Radio. I caught up with her recently to get her take on cryptocurrency.

00:46 Heather, welcome. First up, let's start with a basic definition. Cryptocurrency is pretty exciting and phenomenal, and actually we know a lot more about it than we think we do. So let me ask you this. Do you have a credit card? Of course. In your wallet? Of course. Maybe a debit card. One of those two, yeah. Okay. Have you ever gone online and used a quick pay system to push money to your friends? Maybe you PayPal send a friend money. Yes. Or quick pay with Zelle. Okay. That's cryptocurrency. So you are already using forms of cryptocurrency because what is cryptocurrency? Is it a carrier pigeon grabbing a bag of money flying to where you're giving the money? No. It's just numbers in an account, right?

01:33 You take your physical money, your hard-earned blood, sweat, and tears, and you go deposit it in a bank. And so that activity makes you put the trust in the bank because I was able to walk in. I can touch this and feel this, so here's my money. Okay? And so then it goes in there. But what we don't think about, we think about our U.S. dollar backed by the full faith of our government. Yes. Which on any good day could be good. Understood. It could be not so good. Exactly. And our value of our dollar changes, but we don't think about the dramatic fluctuations in our dollar because we still can buy a soda pop. We can still go out and do things. So we have an idea of what a dollar buys. But if you are trading in currencies and you're doing currency arbitrage with other countries' currencies, for example, or other commodities, there's a fluctuation in it.

02:27 And so what we see with any of these cryptocurrencies is that it is just another medium of exchange. Me trading my best efforts for the best efforts of others. I always like to quote that from Hank Reardon's speech from Atlas Shrugged when he went on trial. And so that's all it is. It's just stored value. So instead of a bank, you have this wallet. You know, you have your cryptocurrency wallet. And the difference when you make a transaction with cryptocurrency versus your credit card or debit card is the difference between pushing and pulling. So, for example, when you go to a merchant and you hand them your card and you say, hey, you know, I want to buy these pants. They're 100 bucks. OK, charge my card 100 bucks.

03:13 So they run your credit card through the machine. You authorize it. And then they pull 100 bucks out of your account. All right. Yes. That's how regular credit and debit cards work. With cryptocurrency, you negotiate $100 for that same pair of pants. But instead of them pulling the money, you push it to them. As if you opened up your physical wallet and pulled out the paper money and handed it to them, you push them the money. Now, what gets confusing are the fact that it's now a traded currency and we watch these fluctuations. Oh, and it's up and it's down. You know, and it does. I should say it does. It has fluctuated wildly, you know, as of late, as more people are talking about and trying to understand it.

04:00 And the challenge is, is that it's a what you would call it a volatile currency. Like, let's say we're retraining in some other countries' currency. You know, think of all the destabilized countries around here and how wildly their inflation is or how their currency is all over the board. It's still a subjective thing, and if you do currency arbitrage, you know, which means that you're trading in currencies trying to get the best value of $1 for another, and so you move your currency about to try to maximize that. This is just another opportunity to maximize your investment and have another way to exchange. Now, the benefits are it's decentralized, meaning no government can control the currency. And that's a good thing for people. And people don't realize that, you know, I had a discussion with an attorney a couple of weeks ago for supper, and that was her thing.

04:49 She was like, but the full faith of the American government is behind this currency. And I said, yes, but what happens to the government when it goes sideways? Then what happens to all that currency? And she's just like, but it's the U.S. And I said, yeah, but what if you were standing in Zimbabwe? Right. You know, I'm a Zimbabwean trillionaire. I have a trillion Zimbabwe dollars. It's a piece of paper. It's backed by the full faith and government of Zimbabwe. But right about now, I can't even go to Starbucks and get my favorite latte with that. Right. Of course not. You see what I'm saying? I do very much. So with cryptocurrency, there's only a finite amount. See, the American government can dilute our money.

05:36 They call it quantitative easing or whatever. You know what I mean? Right. They change the languaging so they can soft pedal it to us. But when they print more money than they have coming in, it deflates the value of our currency. But with cryptocurrency, there's only a finite amount that can ever be distributed in any particular coin that they have. So with the cryptocurrency, at some point, all the money will be in circulation. And so then the value can only stabilize and go up because, as we know, when there's limited supply and there's demand, prices rise. So your value of the currency would rise. And we don't have to worry about whether it's not stored in some bank. It's in your wallet.

06:22 You know the value of it. But so does everybody else because it's part of that public ledger, which is what they call the blockchain. The Foundation for Economic Education is called FEE, and their website is FEE.org. But the Foundation for Economic Education put out a really great introductory e-book to cryptocurrency. It's called What is Cryptocurrency? And all you have to do is visit their website, and you drop in an email address, and bam, you'll have it in your inbox. And it's a really good primer. I think it was 36 pages, if I'm not mistaken. But it explains everything from soup to nuts about what it is in these very simple terms like I'm explaining it to you. And you don't have to have a college degree in mathematics to figure it out.

07:11 I mean it's just like there's only so much gold to be mined in the world. There's only so much silver. You know what I mean? So if you can think about any commodity, it's just there's only so much. It's a finite resource. Once it's completely mined and once all of the Bitcoins are out there, then it's just going to continue to be a stable and increasing store of value. When you mine Bitcoin, all that means is that you're trying to solve the equation to add the next block in the blockchain. And whoever solves it first is the one that gets paid, and you get paid in cryptocurrency. You get a unit of cryptocurrency for solving the transactions. But the challenge is people have spent so much money, and they have buildings full of mining equipment, which is essentially super fast processors.

08:02 Imagine your home computer stripped of everything, but it's computing capability. So you're not on the internet. You're not horsing around playing games. There's no games. There's nothing. It's just raw computing power. And you've got people that have these mining farms where they're housing buildings where the amount of electricity right now is higher than the cost of the profit that they're bringing in right now on this Bitcoin. But ultimately, once it's all mined, it will go up. But you're competing against that. So mining is not as profitable as it once was because, again, there's so many people competing for it now. Absolutely. Now that the gold rush is on. So, Heather, where can we learn more about you?

08:48 Well, if you want to learn how to manage your money effectively and overcome your personal and professional challenges, all you have to do to learn about my biology-based approach to money management and success is to visit my website at unlockyourwealthradio.com. And if you want to learn more about how to protect yourself against identity theft, frauds, and scams, visit moneycreditandyou.com. Well, you know, we always want to make sure that we're working with all of our resources. And so we need to think in terms of physiology first. And so when we get excited about something like, ooh, cryptocurrency, I'm going to make a ton of money, or ooh, options trading, I'm going to make a ton of money, we want to curb the enthusiasm, if you will, and make sure that we're not being overly zealous because that changes our physiology.

09:35 And then we lose resources. We can't think critically. We can't evaluate properly. We don't listen to the downside risk because everybody is, oh, man, it's going up! And you get hung up in that emotion. And so just make sure that you take a pause and make sure that you do your research and you're well thought out in a highly resourceful state when you go to make financial decisions. Because, you know, it may not make you, but one financial decision can break you. Great advice, Heather. Another thanks again to Heather Wagenahl for sharing her insight into cryptocurrency, what it is and what it isn't. For the Financial Safari News Network, I'm Steve Sedahl.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Each and every week I talk to very interesting people and the most important part is that I shouldn't be the only one hearing it. I really feel that if these people make sense to me that everyone out there needs to hear it. So stay tuned folks and I hope you enjoy this newest weekly segment on Coach Business. Well folks I haven't done one of these interviews in a while but I found somebody who I've known for a while I thought would be a good guest on the show, a great guest on the show, someone who has had numerous success stories throughout his life and when we talk about living you know it's one thing to go to work nine to five and then retire and you know have a nice life but it's a great thing to have something that you can leave behind or a success story that people know and we're lucky enough to go to Las Vegas today and join Joe

00:49 Sugarman. Now that name may not ring a bell yet but what he's going to tell you may ring a bell what you've seen on TV or what you've heard about in the past. Joe welcome in. Well thank you Pete. It's a pleasure to be here. Now let's talk about it when you look at at your life and I don't think you know I'm 51 I don't think I'll ever retire and I don't know if you're retired yet you know mentally or physically or whatever but I don't think you're ever going to retire. No I absolutely am not that's for sure. Now when we think about and you're an entrepreneur by trade and let's talk to the audience about your very first success story and also your very first stumble. Well you're probably listening to the biggest failure you ever heard here in your life. I have failed more times than

01:36 you could possibly imagine but I had one thing going for me and that was I had this belief that I was eventually going to be a success and so no matter how many disappointments I've gone through I just hung on to that and I also had this philosophy that you achieve your greatest success when you're going along a certain direction that you think you should be going and then something comes up and it takes you 90 degrees in another direction and that's where you make your fortune and that's what happened with Blue Blocker. I had a friend of mine that was taking me down the 405 in Los Angeles to see a product and we're driving along and I'm squinting and a friend looks over at me and says hey you're squinting why don't you try this pair of sunglasses. So I put them on and I said wow and

02:26 I'm not squinting and everything is so clear and so sharp where'd you get these? And he says oh those were the sunglasses that were made for the astronauts and I says made for the astronauts well this might be a great mail order item and he says no no the company it's making is going out of business and and uh you're not you don't want to be interested in that. So I kind of dismissed it except when I got back to Chicago which was my hometown at the time I realized that one of the we were doing a 12 page insert for United Airlines and one of the companies that we were featuring uh and their products uh the company went bankrupt and I had to fill up that page. So I called my friend and I said I said please send me that pair of sunglasses I'll figure out a way to make them

03:17 uh cost effective but I need something immediately to put in this catalog and I've got two months to to to source the product. So he sent me the sunglasses I wrote an ad it took me it took me like an hour an hour and a half I was in a tremendous rush and the ad ran along with the the 11 others and uh I was amazed it was the most successful ad in the entire insert it was just unreal and so I took that success and I built on it and started advertising all over the United States and every magazine I can get my hand on that I did very well I mean I we sold like a hundred thousand pair in like six months now

04:02 now remember that number a hundred thousand pair in six months because about that time infomercials were coming out they were becoming very popular and I was telling some friends I said you know I think this blue blocker sunglass would be a great uh infomercial and they also they laughed I said what are you talking about you got to try on a pair you got to look through the lens you got to do this you got to do that and I said no no I think I could make this a huge success on an infomercial so I said I'm going to try so Pete what I did was I tried I created an infomercial I ran it now remember I said it took me six months I sold a hundred thousand pair I sold a hundred thousand pair in one month on an infomercial and I ran these infomercials for six years in my final year we were

04:48 shipping three hundred thousand pair a month three hundred thousand pair a month and we sold eventually 20 million pair all over the world the United States Australia New Zealand uh England every English speaking country you know we were selling blue blackers and our infomercial was running in those markets and this was way before the internet what year was this oh this is 86 87 it's amazing by taking a product that had failed already and making it better or marketing it better well probably marketing it better way before the shark tank yeah now the shark tank what if that was around back in the 80s you think they would have had you on I think so it was we were very unusual I

05:34 mean we innovated a number of things like for example in 1973 we introduced toll-free order taking and prior to that nobody had ever used it it was illegal it was illegal you were not allowed to use the toll-free number to take credit card orders it was illegal went from there to 900 numbers real quick didn't we well you know what was really interesting was I would get customers that call us up and says Joe please sign my name just send me the pair of sunglasses I'm I'm late for something or I need to I need to get them right away or whatever so for about a year we would do that we should we'd sign people's names and then ship out the thing and then one day I decided to take a chance that I put in the coupon

06:20 that we always ran toll-free orders call and I listed a toll-free number we were deluged deluged and I I mean the response was so great we did so well and then then I get a call from AT&T at the time and they said Mr. Sugarman we know what you've been doing and I said what do you mean they said well you've been using the toll-free number to take credit card orders haven't you and I said oh yeah yeah I was worried I thought I was you know going to be really taken advantage of here so they said well we have been following your success and we are so impressed with the results that you have achieved using toll-free numbers take credit card orders we want everybody to do that now and we wondered if you could be

07:09 featured in one of our full-page ads in the Wall Street Journal and I said well sure so I was and toll-free numbers took off and it just changed in industry catalogs space ads print ads everything just took off like crazy and we were the start of that well the things we take for granted these days simple toll-free number getting orders on toll-free number now we can order online and and by the way folks if you've probably seen one of these infomercials it was for blue blocker sunglasses right Joe yes absolutely the originals that's right yeah now they made a comeback just a few years ago with the movie the hangover that's right and that was an interesting story you talk about product placement we had a couple guys come to our office and buy six pairs of blue blockers paid paid full

07:57 price for them and they casually mentioned oh we're gonna probably put this in a movie so you know I didn't think much of it because a lot of people say those things you know they're just hoping to get a discount so we didn't give them a discount next thing we know it's in the hangover and it's been and people are buying it because it's in the hangover and Zach Galifianakis became a famous guy wearing them and we didn't pay a penny for the product placement as a matter of fact we made a profit I mean it was really something else so that's really good now that's a big success story and and I've tried those sunglasses on they really do make a difference I mean they really do make a difference when you put them on yeah well we block the blue light not not only the ultraviolet a and ultraviolet b but we block blue light and people don't realize blue light has been proven

08:44 to cause all sorts of eye disease and if you block blue light you sleep better at night you your eyesight is better during the day I mean it's it and a lot of people don't realize that we educated the market in that respect and we've saved a lot of vision as a matter of fact blue blockers you can fire a bullet at it and it won't penetrate the lens or you can hit it with a hammer and it won't shatter and that's really important because we get reports from time to time where people were in a car accident if it wasn't for their blue blockers they'd be blind the blue blockers yeah no so my sole purpose in life is helping others and you can help others by providing a good product by writing a book and sharing your knowledge by helping people financially there's all sorts of ways to to help others and

09:35 that's my goal in life is to help others well you know you mentioned it blocks the blue light out and keeps the blue lights from happening and I uh I never want to see a blue light behind me when I'm driving so maybe they'll work there too yeah just ending on a joke now Joe how can people get in touch with you or how can people find out about uh the blue blocker sunglasses well uh they can go to our website blue blocker that's b-l-u now no e b-l-u-b-l-o-c-k-e-r blue blocker.com also amazon.com amazon features our products as well yeah I remember when amazon first came out I said who's going to go to of jungle site to buy a book shows how much I know folks again his name was Joe Sugarman Joe we really appreciate your time today well thank you thanks for having me I appreciate it Pete and folks

10:20 we'll be right back after this you

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00:00 And folks, this is the time of the show where I go out across the world and find someone who's making a difference, who's made a difference, or who might make a difference. And we've got someone who is doing all three. Her name is Kelly Roach, joining us from Westchester, Pennsylvania. She's the author of a great book called Unstoppable. She's a business coach. And I think if you, if someone helps you with your business, they're helping you with your finances as well. Kelly, welcome in. Thank you so much for having me. Excited to be here with you. Now, how long have you been doing what you're doing right now? I have been the CEO of my own company for five years now, but I did business coaching and strategy and teaching and mentoring in business and sales and marketing pretty much since I graduated from college. You know, once you get momentum going, it's easy. But you say in the book that anyone can get this momentum and it doesn't really matter how old you are or how many times you might've

00:47 failed in the past. You shouldn't let past affect your future, should you? No, not at all. And absolutely. If you look at the most successful people around the globe in any entity, whether it's athletics or business or any realm, the people that are most successful are often the most unlikely. A lot of them are the ones that had the most challenging situations, the biggest setbacks, maybe the best excuses for why they wouldn't or couldn't succeed. And that's because success in any realm really comes down to perseverance, discipline and determination more than anything. To look at, you mentioned Julia Child and she was 39 before she published her first cookbook after working in advertising and media and her TV debut didn't come until age 51. It's amazing. And she's not the only one. I mentioned people throughout the entire book. And I mean,

01:35 we could write a book just about the fact that most of the champions that we look up to as game changers, you know, whether it's an inventor or someone that created a key breakthrough in science or television, whatever it is, almost all of them really don't strike that kind of intersection of greatness, you might call it until they're in their second or third or fourth career. And later in age, a lot of a lot of people are in their 40s or even older when they finally hit their stride with success. And that's why people should never be intimidated by the stage of life that they're in or the age that they're at, because that has nothing to do with who's going to ultimately succeed. I talked to a lot of folks who are approaching retirement from their final job or what they think is going to be their final job in the 60s. And many of them don't want to stop working,

02:23 but they're tired of doing what they're doing. That's a good time to try something else out, isn't it? Oh, my gosh, absolutely. I mean, so many people now later in life are starting new businesses, starting new careers, trying something for the first time. And there's just endless opportunities. And plus, when you have that wisdom and that experience behind you, the flexibility of finishing your serious career and being able to then start something new is really exciting, actually. Now, you talk about how taking action is important, but taking intentional action is the key. Can you explain to the listeners what that is? Definitely. Well, that's one of the biggest struggles I think people have, actually. You know, I think that people want success, you know, and are typically working hard in whatever realm it is that they're trying to create a breakthrough in. But what I see a lot of times is that there's a

03:12 whole lot of action without the right strategy behind that. And because of that, a lot of times people are busy as heck, but they don't have any results to show for it. And it's because they're working on things that are in their comfort zone versus breaking out of their comfort zone and doing what's actually necessary to create the results that they want. So it's all about intention. It's about knowing the things that are actually going to make a difference for you and committing to taking action on those things versus the things that are just going to get you more of the same. Sort of like we see these basketball teams or football teams who do really well when they're playing the cupcake teams. But when they start playing teams that are just as good as them, they fail miserably. And I have the oldest of three brothers. So I was always having to push myself

03:57 extra hard because my little brothers would always have me pushing them when we played ball or whatever. I would always dominate them. But then there came a time where they started dominating me and I knew I had to go get better at better competition out there for myself. Right. And I think that's an important life lesson that for all of us, we need to constantly be working to surround ourselves with people that are further along than we are. There's two types of people. There's the type of, you know, person that's intimidated by that and runs in the other direction and wants to be the best, smartest person in the room. And they stay stuck where they are usually. And then there's the people that challenge themselves to be the least experienced, the least successful in the room, always surrounding themselves with people that have done what they want to do and have been where they're trying to go. And those are the people that are ultimately going to achieve their dreams. And folks, we're talking to Kelly Roach. She's the author of a great book called Unstoppable,

04:46 available everywhere. And she's known internationally as the authority for entrepreneurs and business leaders who want more success, freedom and fulfillment in their lives. And Kelly, getting back into what we just talked about there, you say in your book, stop resenting the 1% and join them. Absolutely. I think it is insanity that there's been this media campaign for several years now, dating back probably four or five years around kind of this, this hating of wealthy people and this despising of the 1%. And what's incredible is that if you look around, there's many, many people out there, almost all self-made millionaires, you know, did it through starting their own business, bootstrapping their way, probably taking out personal credit card debt in order to do it.

05:33 And there is still an abundance of opportunity out there for anyone that's willing to do the work, willing to get out of their comfort zone and make it happen for themselves. I mean, I'm a personal example. And I started, you know, coming from a family that I grew up, you know, just above the poverty line. And I got into a fortune 500 company, I worked my way up, I got promoted seven times in eight years, and then I branched out to help other people break into that top 1%, which it's a number that anyone can achieve if you're willing to do the work. There's always going to be people surrounding you telling you you can't be done or you shouldn't try it. And, you know, sometimes maybe we shouldn't like jumping off a cliff is not a good idea if you don't have a parachute, but jumping into something higher than you're in right now, business wise, I think it makes a lot of sense. Even if you get knocked down, get back up, you learn something

06:19 from that. Yeah, absolutely. And I mean, the thing is, is everything starts with an intention, everything starts with setting a goal, you can't both resent something and attract it at the same time. So if you want to create more wealth for yourself, you want to have greater financial success. A first step is releasing those feelings of negativity or resentment that you have towards the people that have already worked very hard over their lifetime to achieve that very thing that you desire. Well, look at Colonel Sanders. It wasn't until he was 62 when he franchised Kentucky Fried Chicken. So I'm sure he had a lot of people around him telling him, you know, your chicken's good, but it's never going to fly, no pun intended, all across the nation like this. But he sold it for 2 million 12 years later. And that's, he got ripped off, but he made some money, didn't he? Exactly. And I mean, there's story after story of people just like that.

07:07 Well, so you talk about in the book also how to cultivate an entrepreneurial spirit. How does one do that? Absolutely. So I think in every situation, you either accept the status quo, or you ask yourself, is there a better way? Is there a faster, more efficient way? Is there a more profitable or productive way? And one of the things I say to my team all the time is work harder, get better, improve yourself. And that is the entrepreneurial spirit. It's looking at every day as a new opportunity to work harder, get better and improve yourself so that you can achieve your goals and dreams. And I think it all comes back to that. It's amazing how many young entrepreneurs when millionaires we have in their twenties these days, isn't it? Oh my gosh, it's so funny. I used to think I was young, like when I started my business and when I was growing my business. And now there's

07:56 like teenagers and college kids and it's, it's just unbelievable. And that's what I mean though, about the entrepreneurial spirit. It's a mindset, it's a thought process, and it's a system of taking imperfect action towards the things that are going to help you achieve your goals. I think one thing people need to realize it's not golden every day. I mean, just because you see the finished result when the person is doing real well, it doesn't mean it was a graduated way to do that. There was ups and downs the whole way, wasn't there? Absolutely. And I think social media makes it really difficult for people to understand what success really looks like, right? Because no one posts pictures or writes posts about their worst day and their failure. They post that one moment, right? And you don't see everything that led up to that moment, sometimes for decades for that person

08:44 leading up to that. And so I think that you can't compare someone else's chapter 20 to your chapter one. I think that's really, really important. Yeah. One of the things you never see someone post a picture when they have a bad hair day. And I've got a couple of girls I know, they won't let me post their picture until they look at it and approve it. Yeah, that's pretty funny. Exactly. And so, and you know, the perfect picture is always posted. It's like my brother used to go to Vegas a lot, and I would hear from him about once every three years about how much he won. And you know, all the other times he went, we didn't hear from him. So you never know. It's only, you know, you shouldn't judge yourself compared to others, I think. And finally, you need to act like a CEO, you talk about in the book. What is that final point? Yeah. I mean, I think the bottom line is, is we are the CEO of our own business and our own life and our own financial destiny.

09:30 And the decisions that we make, which every single day is thousands, every day, we're making thousands and thousands of decisions that are ultimately going to impact our destiny. Unless you're coming into every day saying, how am I going to intentionally harness the power of decisions that I make today to ensure that they put me on the path to where I want to be without having that CEO mindset of ownership and accountability for where you are and ownership and accountability for where you want to be and how you're going to get there. It's probably just never going to happen. Fascinating points in a really good book, folks. The name of the book is Unstoppable. Her name is Kelly Roach. And if you join this interview late or want to hear it again, it's an entirety. You can always go to financialsafari.com. Click on that as heard on the show icon. Kelly, thanks for your time

10:17 today. Thank you so much for having me. This is great. Folks, we'll be right back after this. Thank you.

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00:00 Well, folks, this is the time of the show where we go out across the world and find someone who's making a difference or has some great information for our listeners. And, gosh, if you've ever thought about buying a house or if you're buying one now or if you're in a house, we've got some trends coming up in the next five years. We're going to talk to a senior director of research and study at TransUnion. Her name is Niddy Verma. She's joining us now on the show. Hey, Niddy. Hi, Chris Peep. Thanks for having me here. Yeah, let's talk about some of the trends you see upcoming. What's happening right now and where you see the overall real estate market and mortgage markets going? So, as you know, first-time homebuying experience is quite a milestone for consumers in our economy. And our data predicts, TransUnion predicted from the study that we would expect about 17.1 million consumers to enter the first-time homebuyer market in the next five years.

00:52 That number would look like about 3 million consumers in the next year or so. And the reason that number is so important is because when you compare that to the last five years that we've just gone through, that was about 12.9 million consumers who entered the first-time homebuying market. So, certainly, our study predicts that we expect a lot more consumers to enter, to experience their first-time homebuying purchase, as well as the fact that most of these consumers are very young consumers. They're in that age group of that 20 to 39, and that's where the growth is coming from. What's the average cost of a house that those types of people are buying, the first-time homebuyers? An average new mortgage loan that consumers buy is roughly just about $200,000 based on our Q2 2016 data.

01:40 Okay. So, that's a pretty good house then. Absolutely. So, these younger consumers, you know, between the ages of 20 to 39, have certainly been a big driver of the first-time homebuyer growth that we've seen. What I mean by that is that when you looked at 2015 first-time homebuyers entering the market, about 60% of these consumers were within that age group of 20 to 39. Now, certainly, we all know that millennials are becoming of that prime age of entering their first mortgage experience. But if you compare that number to about 15 years ago, that number was about 44%. Certainly, that's grown as more and more younger consumers are enabling growth in the first-time homebuying market. This is a good study here because all we hear about on the media is how the young folks aren't finding jobs, but evidently some are because there's so many more that are applying for the mortgage to get that first-time house.

02:35 Absolutely. So, more and more younger consumers, unlike that conventional wisdom, do participate in the first-time homebuyer market. They're participating at a much higher rate. And here's something important to look at as well. You know, 15 years ago, about 17% of these consumers were in the age group of 20 to 29, which is really the younger end of the first-time homebuying experience. When you look at that 17% now, meaning at the end of 2015, that number is 28%. So, we've seen a lot of growth happen within those younger consumers. They are enabling their first-time homebuyer mortgage growth in the market. And those consumers, those younger consumers, are important simply because it's a big milestone for them.

03:20 They're able to create a higher housing stability for themselves. They're able to take advantage of the gains from the deductions they can do against their taxes, whether it be from mortgage interest or real estate taxes they pay. But they're also really critical for our community growth. The reason they're very important for our community growth, Coach Pete, is because they create a domino effect in terms of creating jobs, whether it be jobs for construction, for home improvement projects, buying more products and services, having higher credit needs as we go forward, as well as for people that they're buying these homes for, because then those people can move on to their next home or their next property and so on and so forth. And it really is a life cycle of domino effect that these first-time homebuyers, these younger consumers, are providing in the economy now that we haven't seen in the last 15 years.

04:10 Well, I'm 50 now. In my first house, I was 30. And this is my third house I'm in now. So, my first house, there was $109,000 back in 1996. I remember that because that was a lot of money. And I've moved up, you know, as I've gone on. And it's pretty funny. You're right. So, as they move in, they get acclimated with that fact of paying a mortgage payment. And as the family grows, so does the needs for a bigger house. Absolutely. So, they're enabling people like you who may be sitting in these homes and are ready for that next step. Well, interesting study and interesting guess. Again, her name is Nidhi Verma with TransUnion. Nidhi, thanks for your time today. Thanks for having me here. Yep, folks. And if you want to hear this interview again in its entirety, you can always go to financialsafari.com. And click on that As Heard on the Show icon.

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00:00 Folks, this is the time of the show where we go out all across the world and find someone who's made a difference or maybe you've seen on TV. And this week is no exception. We have a repeat visitor on the show. If you've ever watched a TV show called The Shark Tank, you've probably seen her on there as well. Her name is Barbara Corcoran. She is joining us here on the show. Barbara, welcome in. Hey, Coach. Nice to be here. Yeah. Now, let's talk about, you know, just in general, the business environment that you're seeing. How is the business environment out there globally? I know on The Shark Tank, you guys have a lot of different business owners come in or entrepreneurs with ideas. And I noticed you have all six sharks on there many times when I'm watching this year. Has that made it more competitive? Have there been more loans available? Or what do you think is going on there? That's a lot of questions at once. Let me start backwards on you, OK?

00:45 You're one of those guys that shoot through a lot of questions on the first one. Too much coffee. There's a lot more. That's all right. I need another one to keep up with you. But there's a lot more competition, not just because we've had six sharks on the set at once, which, of course, makes it a more crowded set. It makes it harder to be heard and harder to get your bid in and harder to overbid and second guess what the next guy is going to do. So that's bad enough. But you know what? We've all gotten more aggressive. The deals have gotten bigger. We've had a lot of big moneymakers. So there's a lot of gold walking into that set. I remember in season one or two, you figured you might make a few bucks, but you expected to lose more money than you could make. Now, all of a sudden, each of us have good deals where we're making a lot of money. So we get greedier. Instead of getting nicer, we're getting greedier. And so that's upping the ante. On top of that, the entrepreneurs that have been coming in are getting greedier and asking for more money.

01:33 And so it just seems like the stakes are higher. It seems a little bit more serious. I have to pinch myself at times to get myself to loosen up. And even a couple of times this season, I didn't want to have dinner with my fellow sharks. That's not like me. I'd love to have a glass of Pinot Noir and talk about the day. But no, a lot of us didn't want to talk about the day because we're pretty upset about losing deals to the next guy. It's kind of crazy. It's kind of gotten too crazy, I think. Speaking of wine, I think Mr. Wonderful is the big wine guy there, right? Oh, who wants to buy a brand named O'Leary Wines? Why didn't he make scotch or gin or something? O'Leary Wines? How big could it be? I think he's crazy. I had my first Maine lobster roll the other day, by the way. I know you're big fans of those guys. That's different. So let me tell you, don't tell my other entrepreneurs, please, but they are my favorites.

02:20 They're both drop-dead gorgeous. They're both phenomenal entrepreneurs. They're sending me checks all the time, and they're building a huge franchise. They are so friendly. Whenever they take pictures of us together, they have the decency to airbrush my face, and I look exactly their age, which is young 30s. I love these guys. I love everything about them. But sadly for me, one of them is now engaged. I'm like, doggone it. You sure you're making the right decision? Let me slow you up on that one. One down, one to go. Yeah, yeah, yeah. And my favorite one is the one engaged. Doggone it. I don't even like his girlfriend. I haven't met her yet. That's how it all works. That's how it all works. Yeah, yeah, yeah. Now, hey, let's talk about on-deck lending. I know I've seen a lot about that. You've got a special contest coming up with those guys. I think all entrepreneurs need to know about this because I talk to a lot of business owners,

03:08 and one of the hardest things they have to do each day is figure out that cash flow. Money coming in, money going out. And Barbara, one of the things I see, it sure goes out a lot faster than it comes in. Everybody's short on cash. If you're building a business, your hopes are over, like, ahead of your capacity if you're any good at a business. So you're always short on cash. Coming to the holidays, for some reason, it's a big money crunch. You need capital. And you can't really get it through the traditional sources unless you're a giant company anymore. The banks have gotten very greedy about holding on to the money. You have to prove you're going to pay it back. And a young business cannot prove they can pay it back. So there is a real need for online lending like OnDeck does. They're the largest one in that space, and there's a reason for it. One, they're good at it, but also, very importantly, there's a real need for it.

03:55 Now, why we did this contest is for two reasons. I love young businesses. I love entrepreneurs. They love young entrepreneurs and new businesses, and so we got together. But what's fun about it, it's like playing Christmas or Santa Claus for me because we're giving $10,000 to three winners, and we're also giving three winners an hour of my time in New York City where I'll really understand their business and tell them what they're doing right and what they could do better and what they're doing wrong. And so I feel like I can make a big difference, and OnDeck feels they can make a big difference with the lending. So I think it's really a fun thing for me, a lot more exciting than a lot of the other things I do with my days. You know, with banks, regular banks, I see that they want to loan money to people who don't need to borrow money. That's what it seems like a lot of times.

04:40 So the business owner who is struggling and trying to get ahead, I mean, what's a good way for them to get a loan? Go to OnDeck Lending, I guess, right? Yeah, they go to OnDeck Lending, and you'll get the money you need. And most money needs that businesses have are always short-term. It's not like they're trying to build an apartment building. They're trying to hire extra help over the holidays or getting extra stock because they know they can get the orders in. Basic things that make great common sense, no matter how you look at it, yet common sense isn't good enough for the institutional lenders anymore. What they want is proof you'll pay me back. So who can prove they'll be paid back? The huge businesses. But think about who's really producing all the new jobs in America. It's small lenders like OnDeck. It's small businesses that are hiring people.

05:26 It's small businesses that are making our economy what it is. And yet the banks are lending to the big companies that really don't need the cash. I know it breaks my heart, actually, but that's the way it is. I hope it's going to change, but that's the way it is. Well, let's give the listener a fly-on-the-wall advantage to get a head start to be a winner in the Seal of Approval contest, Barbara. How does someone get there? Oh, it's like trading, you mean. That's right. Well, it's very easy to enter. Everyone can go to Facebook.com, OnDeck Capital, and it takes one to two minutes just to fill out the form. And basically what the form is is tell us what you do with the money. Now, I think if you're wise, you realize I'm judging it. I don't want any highfalutin words like burn rates and all that kind of nonsense that turns me off. What I really want is a common-sense reason why you'd spend the money on what.

06:16 And if you want to really appeal to me, make sure it amounts to sales, how I'm going to increase sales. Because when your sales are going up, every other illness in a business is cured. I know that because I've lived it, I've worked it. So give me a reason how this money is going to be spent that's going to increase sales. And you've got a much better shot at winning, much better shot. Because I'm the judge, and that's what I believe in. You know, how many entrants are you expecting? How many people entered last time? Well, last time we had thousands, but we had three winners. But I have to say these three winners stood apart the pack, stood above the pack in such a smart way. And to prove that, they've taken the money and they've really expanded their business with it. It wasn't just talk. They really kept the heat on their business, took the money, it gave them a new momentum, and they've been able to carry that through the entire year.

07:02 Sadly for them, they disqualified this year. They can't win it two years in a row. We need three new winners, and that's who we're looking for. Well, hopefully they took the money they borrowed, and now they're making enough where they don't need to borrow again. No, they haven't been borrowing money. One of the winners took their small business. It was a male grooming shop, very different than any other shop in Dallas, and now he's turned into a franchise. He's doing very well. A baker is producing her little cupcakes, which couldn't be shipped, and now she's producing them in little jars. And then one woman who had a health care product, an exercise slash health care product, took the money out and really aggressively sought sales, and now has it through a giant chain in her area where she lives and works. So they all did very good things with that money.

07:50 And, of course, I'm sure it was more due to my great advice. I'm sure it had nothing to do with the cash. Well, wouldn't it be great to see one of the people that got one of these $10,000 loans sometime on the Shark Tank looking for millions of dollars of investment capital? Well, you are a good coach. You know what? I never even thought of that. No wonder they call you the coach. My gosh. You're coaching me. I'm insulted. The coach is hungry now after you talked about cupcakes, Barbara. I'll tell you that much. Oh, yeah? You know what I think? I think you should be going over the $10,000 from online lending on that capital. I can't even get that straight. I guess I'm still early in the morning. I think you should be thinking about going for that cash. Forget about the cupcakes. Oh, yeah. Cash over cupcakes. You've got to have a good idea. A guy like you has got to have a good idea. You can buy a lot of cupcakes with cash, can't you?

08:36 Yep, yep, yep. Get that cash from on deck. Well, folks, her name is Barbara Corcoran. You can see her on Shark Tank every single week. They have great ideas coming before them. And some don't get funding, but they get orders from me, like the Ice Age guys with the Paleo Diet. I ordered a box of their food after being on the show, even though they didn't get funding. Did you reorder? Did you reorder? This is the question. Well, I haven't got the first box yet, so as soon as I get the first box, I'll probably order a second box. And, folks, again, if you want to find out about this contest, it's Facebook.com. It's at On Deck Lending, and it's a $10,000 scholarship, basically a loan program for three lucky people. Her name again, Barbara Corcoran. Barbara, thanks for your time today. My pleasure. Nice seeing you with me, Coach. Yep. Again, Barbara Corcoran from the Shark Tank. You can catch her every single week on TV. I don't think it's ABC, the Shark Tank.

09:22 And if you want to hear this interview again in its entirety, you can always go to FinancialSafari.com. Click on that As Heard on the Show icon. We'll be right back after this.

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00:00 And folks, this is the time where we go out across the world and find someone who's made a difference in the world or is doing something I think is interesting to you. And today we're going to talk about something that is on a lot of radar screens. It's real estate investing. We've even heard national commercials now by famous talk show hosts about real estate investment trusts. So I thought today we'd visit with Dr. David Lynn from Scottsdale, Arizona. Just happens to be in studio today with me this morning. And he is a specialist in investing in real estate and something called private equity. David, welcome in. Thank you, coaches. It's a pleasure to be here on your show. Now, let's talk about it for the listener who is just starting in the world, in the financial world, or they're not really sure. All they have is stocks, bonds, mutual funds, which a lot of people do. They call that proper diversification, right? That's not proper diversification, is it?

00:46 No, it isn't. And the common allocation is the 60-40 portfolio, stocks and bonds, basically. But adding alternatives, particularly real estate, into that mix can lead to higher income and lower volatility. So it could be that this is modern portfolio theory, Markowitz, going back to the 50s. And it's what a lot of institutions, endowments use. And it results in just better returns and lower risk. Yeah, a lot of the colleges, the endowments for the colleges use a particular model to make sure that they have good balance. And because they have to sponsor a lot of these endowments, they don't want the money to go away. Absolutely. It's about a risk look at your portfolio. So it's not just overall return or income. It's what you need to pay for that income, right?

01:32 So if you have a drawdown, for example, the global financial crisis was a great lesson for a lot of investors, a lot of managers. The drawdowns in some portfolios were 40, 60, or more percent. It's hard to come back from that kind of drawdown if you have a lot of it. So really, volatility is the best proxy for risk. And so when you're down, for example, 50%, you need a 100% return just to get back to par. So very difficult to do that. So risk and volatility are very important. And real estate is one of those things. It's not very correlated. It's very low volatility. It's very high income. So it's a great addition to portfolios and a great income generator. We talk about when people lose money in the market, then they get happy years later. When they finally get back to where they started, they recover. But we always say recovery is not gain. You're just getting back to where you started. So you've lost all that time that you could have been building money because you were just

02:20 trying to play catch up. And that's not a good philosophy or strategy for those in retirement, is it? Right. That's why we like real estate. I mean, 80% of their returns in core real estate come from income, rain or shine. And it's underpinned by leases with solid tenants. In our case, medical tenants. These are doctors and hospitals. So these are folks and businesses who really have solid balance sheets. They're always going to be there. They're always going to need medical services. So a very good growth area. So that's why we love real estate. And we think it should be a part of everyone's portfolio. Now, let's talk about real estate. Because when I hear real estate, many times people think you're talking about these shows you see on TV where people are buying and flipping houses. And a lot of people don't make money in that, by the way. They lose money because they're trying to do like they see on TV, but they don't come out good. That's residential real estate.

03:05 First of all, let's start with the difference between investing in residential versus commercial real estate. Sure. If you can envision a giant pie, real estate is the largest asset class out there in the world. And in this country, it's about $30 trillion. Roughly half of that is commercial real estate. And commercial real estate is all about people paying rent. It's about the business, really U.S. corporate firms and cash flowing businesses. It's not about single family homes and that sort of thing. So it's much more transparent. It's much more easy to quantify. It's really an investable, much more investable asset class. It's where a lot of people around the world make their money. And if you talk to wealth management clients, it's typically real estate is a big part of their family wealth.

03:51 And it's also much more easy to accumulate and manage commercial real estate. So residential real estate is much more management intensive. It's really not institutional, as we like to say in the business. I don't see many people in commercial real estate, though. I see a lot more people that are trying to do the residential. So when we look at risk versus return, would you say it's a better ratio for commercial real estate versus residential? Or is it a toss up? Or does it all depend on the place you buy and how you buy it? Well, you know, a very important distinction is that commercial real estate, a big part of the return is about income. It's also underpinned by good quality credit leases. And these are contractual obligations that go anywhere from a year to five years, 10 years, 15 years. So it's more bond-like and it's safer than residential real estate. So big difference.

04:37 And you have more data about the investment returns and markets. So it really is more similar to bonds. And it's becoming a more formalized asset class all the time. There's more data, more information, more players. It's growing in size as an investable asset class. And it's in institutional portfolios. It's been in those endowments and pension funds for decades. So it's really a tried and true asset class. It's just that when it gets out to the individual investor, sometimes it's hard to package. And so often you don't see it coming down to the retail investor. So income-producing properties, big deal. And folks, we're talking to Dr. David Lynn from Scottsdale, Arizona with Everest Medical. Now, you and your company makes REITs and also private equity. Explain to the listener what a REIT is, R-E-I-T, a real estate investment trust.

05:27 But explain to them what that really is in a nutshell. Yeah, sure. A real estate investment trust is a way of pulling properties. And it's a vehicle for making it easier to invest in commercial real estate. So instead of investing in one particular property and having the knowledge and information to do that, you invest in a professionally managed pool of properties. You diversify risk. And instead of getting a K-1, you're getting a 1099. So it's just a lot easier. And you're diversifying the risk. So otherwise, if you had to go out and buy a commercial property yourself, it's a lot of work. It's a lot of money. Essentially, focusing your risk, there's a concentration problem of your risk being in one or two properties. So the pooling of money, basically, not only can you invest in a building you never would be able to invest in yourself or afford to do it yourself,

06:15 you're getting several buildings. So you're spreading out risk. And when the company looks behind the scenes, you try to get income-producing properties. So when you're investing, you're basically, the minute you invest, hopefully you'll start getting income from those properties. That's exactly right. So we take all the work and a lot of the risk out of the whole complexity of commercial real estate investing. So you really read what we have to offer. You don't have to go and visit the property or manage leases or TI expenses or capital expense. It's very complex. It's a lot of work, a lot of friction. So it's essentially a mutual fund for real estate. And for that, you get a very strong high current return. That's a quarterly return, quarterly coupon, and a very strong total return. If trends have continued to go the way they've been going, which is high appreciation, it's a hard asset class.

07:03 So there's a lot of comfort, I think, for investors more and more in having something that's tangible, cash-flowing, with good credit underlying it. Now, you guys concentrate in something called MOB, medical office buildings. Explain what that is. Yeah. And if I can just make a little quick plug for one of my books, it's called The Advisor's Guide to Commercial Real Estate Investment. And that's available on Amazon. And it talks about the various ways of investing in commercial real estate, including the medical sector. The medical sector is, I think, a great sector to invest in. Yeah. It's a huge part of our economy, as we all know. People keep going to the doctor, don't they? They don't, unfortunately, stop getting sick. And we're an aging population. We're retiring about 10,000 baby boomers a day. And people are living longer. We have Obamacare, the ACA, kicking in, adding 30 to 40 new million insured people into the system.

07:55 So, really, demand has been very strong. It's going even further. The MOB is the outpatient medical service delivery vehicle, if you will. And it's where most of us get our medical care. If we can avoid that big central urban hospital, we go to an upscale MOB in our affluent suburbs. And that's where the doctors want to be. It's where the hospitals want to grow. It's profitable. And it's all about the growth of outpatient care delivery over the last few decades. Well, it makes sense, because I've always said long-term care facilities, too. Because people are getting older, we need somewhere to go. Long-term care is a good investment. But when we look at, when I talk to somebody about trying to set up a good portfolio, look at something called ROI, return on investment. So, if someone is investing in a real estate investment trust in MOBs, like you're talking about,

08:43 what is a good goal for the return on investment per year, as far as income, income investment? Yeah, and just to put it in perspective, the other part of this are publicly traded REITs. And they're listed. They were on the S&P 500. They have their own part of the exchange now. So, actually, there's a REIT index. And those are good. They offer liquidity. They're lower in yield. They're about low threes right now, which, in our universe of alternatives, it's actually pretty good. Because you can get in and get out. Yeah, on a day, right? On a relative basis, compared to corporate dividends and AAA bonds, that's actually a pretty good dividend. We offer private vehicles, in general, are more than twice that, typically. And so, it's a higher income. But a very important thing is that the volatility is much lower. So, publicly traded REITs have a volatility of, you know, it's really about the same as small cap stocks.

09:32 And so, you're getting the equity beta of the stock market. And so, it dilutes some of the advantages of real estate, which is it's really not correlated with the stock market at all or the bond market. It's completely independent. And it's very low volatility. Just consistent income. And so, you know, 5% to 7% cash and cash dividend every quarter. And then total returns in the highest single digits to the mid-teens are totally feasible. Well, when you're building a portfolio you want to last, you want correlated and non-correlated assets just in case something happens again, which it will. We want to make sure we're covered and we're fully diversified. And that's fully diversified, by the way, having correlated and non-correlated assets. Yeah, Coach. I mean, that's well put. But, I mean, you want a balanced portfolio.

10:19 And if you're, you know, stocks and bonds traditionally were that. But real estate is even less correlated and less volatile. So, real estate is even less volatile than bonds. Yeah, very, very important. Folks, you know, as with anything, investing, it takes risks. So, you need to make sure you get educated, get a good education, get a good planner on your side that can explain this fully to you. But it's a good part of a portfolio, I think. David, thanks for your time today. Thanks for having me, Coach. Folks, if you joined us interview late and want to hear us again in its entirety, you can always go to FinancialSafari.com. Click on that as heard on the show icon. We'll be right back after this.

See omnystudio.com/listener for privacy information.

Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 And folks, this is the time of the show where I go out around the world and I find someone who's making a difference, has made a difference, or will make one. Maybe an author or a speaker or someone with great information. And we've got a return visitor. And of course, you know, folks, if I bring him back on the show, we had a real good response the first time. We're going to go to Tampa, Florida and visit Niall Nichol. And Niall is a guy that I've known for years. He's an expert when it comes to, in my opinion, he's an expert when it comes to social media and utilizing LinkedIn and Facebook to generate interest in what you're doing. And Niall has some very interesting information about LinkedIn. But first of all, welcome in, Niall. Hey, it's always great to be with you, Pete. Yeah, now LinkedIn, most people know what Facebook is. Facebook is a social site for people to go and share pictures and family stories and talk politics.

00:48 I see all the time on there, too. But LinkedIn is more of a business-oriented site, isn't it? It is. You know, LinkedIn is that professional type thing. Facebook, I look at it, is where you really get to know and like people. Or hate them. LinkedIn's where you learn a little bit more about them to see if maybe you really want to do business with them. Right, right. And so, I mean, LinkedIn, their stock has not performed anywhere near as good as Facebook, has it? Well, no. And I'm not sure what it's going to do now since Microsoft has decided to buy them for, you know, umpteen billion dollars. That's certainly, I think, going to make them less aggressive. But we'll see what happens as that develops over the next few years. When you think about it, we should have developed an idea like that and sold it to somebody. You know, there was a site years ago before Facebook called Classmates.com. Are you familiar with that site? You know, it's still out there.

01:34 Yeah, it's still there. But, I mean, when's the last time you visited that? Well, I have a class reunion coming up. So you went there. Class reunion, I might mention. But so they're actively doing things on Classmates. But other than that, I hadn't been there for quite a while. Well, you know, when I had my 30-year reunion last year or the year before, one of those years right there, I know that whoever was organizing it was organizing it all through Facebook. You know, it's much easier. Almost everybody's on Facebook. And you go to Classmates and, you know, there are just not that many people there. You used to have to sign up. It used to cost money to be able to see pictures or something. Facebook, everything's free. That's exactly it. And, boy, that free has leveraged an awful lot of people. You know, LinkedIn is free, but also you can pay for different things. And you've got something. You want to talk about six tips here to help people on LinkedIn, don't you?

02:20 I do. And you mentioned something there that I think is very worthwhile focusing on for a moment. It's free, at least right now. Right now. They've been moving for more of a revenue-based platform. Microsoft may keep it free in the near future, but I suspect that we're probably going to see, at some point in time in the future, LinkedIn go to a paid-only subscription service. In the meantime, why not position yourself and get what you can for free because it's going to position you, and probably you'll be grandfathered in with that free value anyway. And if you do these six things, you're going to get tremendous value all over the Internet, not just on LinkedIn. Okay. So, LinkedIn, professional site. If you have any kind of business, if you're in business for yourself or trying to promote something that could be a good business,

03:08 LinkedIn is a good site to be on, right? It's a must site to be on. You just cannot be in the business world today without being on it. If you look at getting a job, for example, 95% of all of your Fortune 500 companies are going to LinkedIn as their first source of potential applicants. Wow. 95%. So, you know, if you're in that pool, you've absolutely got to be there. If you're trying to network with people, then certainly you've got the ability to be found very easily, as I mentioned, all over the Internet, not just on LinkedIn, just because you're on LinkedIn. So, you absolutely want to be on LinkedIn. Well, big things. All right. So, I've got a list. I'm starting to keep it right now, like Santa Claus. I just put number one and a dot. What's the first thing of the six tips that you're giving us right now today about LinkedIn?

03:55 So many people with LinkedIn either don't put a profile picture up there or they put a very sorry profile picture up there. When somebody doesn't know you and they're looking to get to know you, it's what we've been told all of our lives. People look into our eyes. And so, they want to be able to see a clear picture. They want to see your eyes. They feel like they get to know you when they're doing that. How important is just this one tip? Interestingly enough, 80% of the time somebody spends on your profile, they spend looking at your profile picture. Wow. And it might creep you out, but really, they're trying to get to know you. They're trying to see what they could see in your eyes and figuring out what it's telling them. And it's meaningful to them. So, make sure you have a good picture there. Picture's worth a thousand words, isn't it? It absolutely is.

04:40 And in this case, it may be worth a whole lot more than that. And I picture the cop shows you see on TV where the investigators spend a lot of time interviewing the suspects, even though they don't call them that. But they spend a lot of time watching their facial expressions, don't they? They absolutely do. And so, you know, you want a very good picture. Well lit, current. You don't want somebody to meet you after seeing your picture and realize that the picture is really 20 years old. So, just spend some time and get a good professional headshot. All right. Good professional picture. Number one. Now, what's number two? Number two is the area that's right under your name. And that I refer to as a headline. If you don't set it up and you have the ability to modify it and customize it, it will be your current position at your current company. Which is sort of a waste of time. Now, if you load that with keyword rich, unique selling proposition type statements.

05:32 USPs as a lot of people call them. That headline is going to be spidered, which means it's going to appear in the Google and Bing search results. Are you ready for this? Within four hours. Well, almost instantaneous. You make sure that you get all of the keywords that people are searching for to find you. If it's a job that you're looking for, make sure that you've got that job that you're looking for in that headline. You've got 120 characters there. I refer to it as 120 characters of gold. Make sure you get it there because that's what allows you to get visibility all over the internet, not just on LinkedIn. So, if you were like applying for a dog catcher job, it would be catches, strays quickly would be a good title, wouldn't it? Well, and you said dog catcher. Somebody's probably going to type that in.

06:18 So, you probably want both of those words in the phrase. That's sort of the keyword loading. And what you did is absolutely correct. You want to turn it into a statement rather than just a bunch of words strung together that makes sense. So, yeah, absolutely. All right. What's number three? Number three, if you're on LinkedIn, you're there because you want people to contact you either for business, for opportunities, for a job. They've got this nice little button down in the bottom corner up top of that profile piece where your headshot is that says contact information. Make sure you have it completely filled out. And make it super easy for people to contact you. If you don't want to give your home number, office number, or mobile number out, set up a Google Voice number and put that Google Voice number on there so people can actually reach out and call you.

07:11 They can email you. They can do whatever they want. But make sure you're super easy to contact. You know, I've had that happen when I read an article someone wrote and then I found them on LinkedIn because I wanted to interview them on the show and I couldn't find how to contact. It was almost like they didn't want to be contacted. That's crazy. Yeah, they set their privacy settings, they lock it down and, you know, you could send them an in-mail on the LinkedIn system, but roughly those in-mails cost about $10 a piece. And you're on a paid subscription, maybe you've got some available, but why do you want somebody to go through that? Make it easy for them to contact you. Makes a lot of sense. Well, that's number four of the six tips. You want to make sure you've got a few connections. You want to look like you're a well-connected person that maybe a few people actually like. So don't just have a handful of connections, you know, 10 or 12 or 25.

08:00 And interestingly enough, about 70% of all of the LinkedIn profiles have less than 125 connections. Shoot for that 500 plus connections. And realistically, if you've been in business or you've been alive for more than a few years, you should be able to get 500 connections. It's really not that difficult. So make sure you get a number of connections that you look well-connected, people like you, and maybe I will too. The true definition of power in numbers, right? Absolutely. And there's also some advanced strategies with that. The more connections you have, the greater visibility you have to look, search, and see things on LinkedIn because it's not just who you're connected to, but it's who your connections are connected to as well. It's expounding by exponential numbers how many people you're really in contact with or have a relationship with.

08:51 Okay. What's number five? Number five is get some recommendations. In the old days, when you came in with a resume, you always had a sheet of references, you know, people that they could call and check out. Are you really who you say you are and all of that? Correct. On LinkedIn, it's even more important because what they want to be able to see is they want to be able to see not only what you say about you, what others say about you, and then they're going to go check out the people that are recommending you and what they're about. So if you've got your mom and dad and sister and brother recommending you, that's certainly not going to be anywhere near as good as maybe an ex-boss or a current boss that's, you know, talking about the stellar job you've done, the performance, and things like that. Yeah, that makes a lot of sense.

09:36 What's number six? Number six and the last thing is now we're getting under the section under where our picture and name and all of that stuff is, and it's called the summary. You've got 2,000 characters there. And this is probably one of the best things you could do on your LinkedIn profile. But what you want to do there is you want to tell a story. You don't want to simply just list facts and figures and, you know, what you've accomplished and things like that. You know, the best storyteller I ever saw in person was Zig Ziglar. He was a sales trainer back in the day, and he would tell stories, not give facts. And that's what you're saying right there. Stories really do sell, don't they? Yeah, and, you know, as you're trained in sales, that's the pitch line is stories. Sell facts tell. Yeah. So use the stories. They'll sell.

10:21 And obviously, if you're on LinkedIn, you're selling yourself. Whether you like to admit to that or not, you're trying to get people to buy what you're selling. And so make sure you've got a good, engaging story to tell there. So if anybody is watching right now, they're in business for themselves, they're working for a company, they're trying to market themselves, and they don't have a LinkedIn page. What would you tell them here in about a minute? Well, what you absolutely want to do is just go set it up. Right now, it's free. You could do everything that we've talked about, everything that we've talked about for free. Go back and listen to this, and just follow these six tips. And if you do, you're going to have a LinkedIn profile that is going to put you in the top 2% of everybody on LinkedIn, and it's going to put you number one on the internet. Fascinating. And folks, if you want to listen to this again, if you're joining us later, if you want to watch it, you can go to financialsafari.com.

11:07 Click on the As Heard on the Show icon. There'll be a way where you can listen to it or a direct link to see it on Facebook. Niall, thanks for your time again today. Hey, it's always great to be with you, Coach Pete. Yeah, and folks, we'll be right back after this.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Folks, this is the time of the show where we go out across the world and we find someone who's made a difference, has written a book, or is making a difference currently. And if you've ever been on a computer, which who hasn't these days, and you've heard of something called social media, which is a way where you can express your feelings and see what other people are doing, you can also get yourself in a lot of trouble. So we're going to go to Maria Mattarelli, and we're going to, she's an expert agile coach and technology specialist. She's been on CBS, Fox, NBC, and ABC. I'm going to ask her about how you can tweet yourself out of a job. Maria, welcome in. Thank you so much. Great to be here. Now, this is the headline I got, is how to tweet yourself out of a job, and that's why we wanted to get you on right away, because a lot of people are on social media. We've got an election cycle right now, and that's where people can say things maybe they shouldn't say.

00:47 Not only can you tweet yourself out of a job, you may get a visit from the special agents for the government there, because Secret Service, if you say something wrong about a political candidate, many times you get on that radar screen. Don't you? Yeah. You know, there's quite a few strong opinions being shared out there these days. You know, we call them keyboard warriors. A lot of times you're typing away, but you realize everyone can, once you press that send button, even if you try to delete it later on, many times there's a record of what you said, correct? Oh, absolutely. And I think that this can all be summed up very well in a quote I saw online, and it said, I fundamentally changed all of my beliefs on, you know, my political and religious beliefs based on the post that I saw on your Facebook wall. Said no one ever. So how often are we really swaying people to fundamentally change their beliefs based on what we're saying?

01:38 I know I have a favorite basketball team. It's University of North Carolina's college team, and after a game they don't play too well in, you go to the message boards, and there's people saying all sorts of stuff about the players on there. A lot of times people are venting so they can go to sleep that night. Like, you just vent it out like the diary. You used to write it on a diary, but the diary was your own. You put it under your pillow. Now millions of people can go under your pillow if you write it online, can't they? Yes, that is a big difference. Your diary should not be put out on the Internet to be forever saved in a public place where everyone can see. I would agree with that. I think that I've even heard people say, type up an email and don't send it, or, you know, write down what you're thinking and just hit delete, right? So there should be a better way to vent or get out any of your thoughts or frustrations without necessarily putting out very polarizing messages widely broadcasted.

02:29 Yeah. Well, I mean, you said in this press release, I got free speech is a fine thing. Unfettered self-expression is a precious gift. But in this era where we carry portable publishing devices in our pockets, it should definitely have limits. And a lot of people don't think about that, I don't think. Do you? Here's what I think. I think the mentality is people think of social media as theirs, their wall, their posts, right? And without thinking about who can see it. Now, I'll tell you what's been the most effective posts that I've seen. Let's just talk politics for a second here in the most vague way possible. And I've seen people post things that are facts, that is a video clip that, you know, even taking a candidate and showing them saying one thing and then doing something different or saying opposite things. You know, when you get facts, when you get things that you just can't deny it's there, I can now use that information to make an informed decision on my own.

03:24 Whereas, on the contrary, when you have people that are posting things that are just very emotionally charged, that is usually what becomes the most polarizing. And just the other day I saw someone post online, all right, I'm cleaning out my friends list here because I just lost about five or six people who continue to want to express their strong opinions on politics. And, you know, that isn't getting us anywhere good. Yeah, yeah. And a lot of times people will post something that they think is true, even though they're not sure, they haven't verified it, then other people pick it up as fact. And all of a sudden it grows like wildfire and it's not true to begin with. Everything's instant now, right? So it's so easy to misinterpret. Another phrase that I've been throwing around recently with some friends is you can't tell tone in a text.

04:12 So whether you're typing it in a text message, if you're posting it on Twitter, any other social media, it's very difficult to tell the tone. And that's how things get misinterpreted. That's how, you know, and usually people are typing on the go, right? So there might not be a lot of thought that went into how something was said. And then we get these, what did you call it? These online warriors, these internet warriors. Keyboard warriors. The keyboard warriors. Yes. The keyboard warriors. They're crusading on the mission of whatever they are trying to push. And, you know, a lot of times I think it is misunderstanding. And what I would love to see is I would love to see us come together more. I would love to see people not be so opposing on views because so many times it's the silliest things that are just blown out of proportion.

05:02 You know what I find myself doing, by the way, folks, we're talking to Maria Mattarelli, and she is an expert on the technology here we call social media. But what I'll do these days when I'm online reading an article, instead of reading the whole article, I'll just go down to the comments. It's a war zone down there in the comment lines. Oh, yes. Yes, it is. And it's interesting because, yes, the keyboard warriors love the comments. And it's almost a 50-50 split at times. You know, in fact, you know, you have so many different views. And my question here is what's being accomplished? Yep. When you have that back and forth, I feel like it's people blurting things out but not really being receptive to listening. And it goes back to the statement of most people, the problem today is communication is that people don't really listen.

05:49 They just wait for their turn to talk. Yep. And I feel like that's even more magnified in text because before you even stop to think about what you just read, most people are saying, oh, oh, let me tell them. And, you know, here's what I'm going to say next. Oh, wait, wait. This one's good. This one's good. And you're not truly, like, communicating. It's just words being talked at each other in written form. Well, they used to say you have one mouth and two ears and use those ratios when you're having a conversation. But now you've got one brain and ten fingers. You don't stand a chance. Oh, that's so true. Yeah. So let's look at this. How can people, and it's okay, I guess, if you're retired or self-employed, you might be able to get away with it, but you might lose some potential clients if you're self-employed and you become known as the keyboard warrior saying the wrong thing all the time.

06:37 But someone who has a job and maybe they're tweeting away or they're on Facebook or whatever during work hours or even not even during work hours but are saying things that are politically charged or are drawing attention negatively to their company. They can put themselves in a lot of danger as far as losing the job, can't they? Oh, absolutely. And it gets back to us not realizing the implication of what we put out there. So politics, we've seen this countless times over again where people do tweet something or they do post something inappropriate or one of the worst or silliest is posting while at work about either not wanting to be at work or something else. And then how is that person going to get hired again? So it's so much deeper than just your current job. It's your employability.

07:24 And even people will say, oh, I have privacy settings set or I only have certain people following me. Other people can't see it. But what might not always be at the forefront of our minds is that things can be shared, screenshotted, tweeted, retweeted, and shared in an instant. And that's what going viral is all about is one message that gets shared over and over in a fraction of seconds. Yeah. And I would not recommend being friends with your boss on social media. I had an employee about four years ago. He was on Facebook and he took a picture of a yellow pad and said, I'm bored in big letters, big magic marker. So what I did on another yellow pad in a bigger magic marker, I wrote, you're fired, and I put it back to him. So I was joking, but his name was Rob. He was lucky that I liked him because I said, if you're really that bored, I can find a lot more for you to do.

08:13 So you can get yourself in a lot of trouble and get a lot more work when you do that. You have to be careful, don't you? Well, first of all, good play. That's hilarious. And yes, you are so right. And I actually had someone the other day who I sent a friend request to and they said, oh, I just have my own policy. Absolutely no business contacts on Facebook. It's only personal, family, and friends. And I replied back and I said, I completely respect that. That's a really great approach. Everybody uses social media for their own intent. Now, for me, I use it for business focus. I own my own company, Formula Inc., based out of Chicago. And we do consulting, helping businesses be more efficient, travel worldwide, speaking at conferences. And my brand is online. So what I think that some people might not know is that whether you have your own company or if you work for someone else, you still have a brand.

09:05 Whatever your skills are, whatever it is that you want to do in your career, you know, look at LinkedIn. That's the most professional networking site, you know, almost like listing your resume and your profile experience. And there's so much opportunity for that. So, you know, I want to challenge people to think, what is the next step that you want in your career? And think about what you put online and how that can help you get there. So, for example, if someone wants to become a manager someday or get a pay raise, let's just start with getting more money, right? You know, what can you do to be a better leader? What if you shared articles on leadership? What if you attended conferences in that topic? And, you know, it goes so much deeper than just blurring our thoughts out on the Internet. You know, thinking about what's your end game in life, in your career? And how do you want people to see you that are around you?

09:53 So there's positive and negative ways you can use it just like any other tool. And that's why I think people need to pay attention to that and really embrace it. I mean, like you said, there are ways people can maximize the benefit of being on social media. And, Maria, we've got about one minute left. Anything else? One thing I knew about you beforehand is your PR people gave me a note that you don't have a home. You travel the world on one-way tickets. I thought that was amazing. The Internet is your home, basically, isn't it? Yes, yes, it is. I've been homeless for almost three years. Places I've been, Sweden, Vancouver, Morocco, Istanbul, Shanghai, Dominican Republic, all over the world. I was just in L.A. yesterday, in Atlanta today. And I want to inspire people. I want to show businesses how to work better.

10:39 And it's truly been quite the adventure. My wife would want to know where you leave all your shoes. Sadly, I have abandoned many. I do have one storage unit left a few hours south of Chicago. And I currently have three pairs on me. One pair of flip-flops, one pair of heels, and another pair of sandals. And it's an interesting thing because I used to have hundreds of pairs of shoes. And they were adorable. And my favorite were the five-inch heels with slingback peep toes. And, you know, the challenge is that what I realized was that having all that stuff didn't make me happy. And it didn't get me to where I wanted to go. So, you know, just a last inspirational thought to share here, what I found is that when I started selling my things and went on the road and started, like, pursuing my passion and just traveling and working with other companies, other people, like, that's where I found real fulfillment.

11:34 And being able to do something bigger and better than just working in the same place, doing the same thing every day. Yeah. Well, it makes a lot of sense. And, folks, really, be careful with social media. But you can harness that power and turn it into a positive. Maria, thanks for your time today. Yeah. Thank you so much. Folks, if you joined this interview late and want to hear it again and send it to you, you can always go to FinancialSafari.com and click on that As Heard on the Show icon. We'll be right back after this.

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Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 And folks, this is the time of the show where we go out around the world and find something that's interesting to me. And I think that from what we've heard over the last 10, 11 years, if it's interesting to me, it's probably interesting to you. And we're going to talk today about the trends that exist in the retail real estate market and what's going on in different states and cities and the trends that are developing. And I thought we'd visit today with Hassam Najee, who is CEO of Marcus & Millchap, which is a real estate investment brokerage firm. Hassam, welcome in. Thank you for having me on the show. Yeah. Now, let's talk about this. Because this is a fascinating trend. I travel a lot, and I live in Raleigh, Durham, North Carolina, the Research Triangle, and I get on a plane, and I'll land in Kansas City. I'll land in Austin, Texas. I'll land wherever. And different places, I see booming real estate, and in other places, I see it looks like a lot of for sale signs

00:45 and depression and beat-up kind of buildings. So what kind of trends are you seeing nationally? Well, if you look at the big picture, things have actually improved quite a bit. I think the strength of the U.S. economy is somewhat understated. And if you ask the average American how well they think the economy is doing, you're probably not going to get a very enthusiastic answer. But if you look at the numbers, they actually show a lot of strength. We've added about 5 million jobs on top of recovering the 8.7 million that we lost in the recession. And real estate, as I'm sure everyone recognizes, is really driven by job growth and population growth and demographics. So if you look at having regained the 8.7 million jobs that we lost and then having put another 5 million jobs on top of those over the past five and a half years,

01:35 that really speaks to a lot of economic strength. If you look at the U.S. consumer, a surprising statistic that I share with our clients, who most of the time are surprised to hear this, is that retail sales in our country are up 22% above the 2007 peak. So at a time when the economy was really booming before the Great Recession, and there was a lot of windfall coming out of refinancing homes and a lot of cash floating around, the level of retail sales back then was 22% lower than it is today. Even if you look at retail sales on a per capita basis, because of population growth, obviously, today's level is 15% higher than the peak back in 2007. The point being that the economy is in much better shape at a national level than most people realize.

02:25 Unemployment is back down to around 5%, and we're just now starting to see some wage growth. All of that speaks very good on the side of the demand for really all kinds of real estate, but in particular retail real estate. But to your point, it's not the same everywhere. The market variations are huge. And so where do you invest, and how do you basically select those markets? To us and most of our clients, the most important indicator is jobs. So if you look at the job leaders around the country, Dallas, Fort Worth comes in at number one with over 100,000 jobs in the last 12 months. Another surprising statistic, because everyone thinks that all of Texas has been affected, or other energy states have been affected by the lower oil prices. And even the answer to that is that there are major differences because of the local economic composition.

03:13 So Dallas is doing very well. New York, Los Angeles, Chicago, Atlanta, Washington, D.C., Phoenix, Seattle, even Philadelphia, a market that you don't hear too often about in terms of being on a top-ranked economic strength. And Boston, those are the top 10 job-creating metros over the past 12 months through February. And so if you look at their real estate markets, they really mirror the strength in job creation. Philadelphia, home of Villanova University, by the way. Absolutely. I was born right outside of Philadelphia, so I remember Villanova up there. But let's look at this now. When we look at it, and of course, your firm, you have $33 billion real estate brokerage. So you guys know what you're talking about. Matter of fact, you were number one in completed commercial real estate deals in 2015.

03:58 So you guys are a good barometer because you're looking all across the United States. But when we look at the, like you said, Texas experiencing what we think a downward trend because of the oil markets, but the tech sector has really accelerated the growth in Dallas, hasn't it? Absolutely. So if you look at a lot of the markets that are rattled off and some other ones, like Denver, like Austin, like Portland, Oregon, that are having very, very strong economic booms, it does go down to the local drivers of those job creators, technology being one of them, a very important one, professional business services being another one, trade. So a lot of the gateway markets that are part of the international trade are doing well. They are adding a lot of jobs. So those are the key variations. A lot of the metros in the middle of the country, Cleveland, Milwaukee, Cincinnati, Kansas City, are adding jobs,

04:51 which is the positive side of the national trend in this recovery. But they're not adding as much or they're not moving as quickly as some of these other metros. They don't have the same, whether it's technology or import-export drivers. And, of course, manufacturing, even though it's doing better, has not been a major driver in this recovery. You know, one of the things I ask, and being in the financial world for 23 years, I always ask the question, why? Why and how? So Cleveland and Cincinnati, why are they experiencing a boom in population? Those metros are not seeing as many jobs as being created. But from a real estate perspective, you mentioned our national footprint. We do have 1,600 investment professionals in 80 locations, including all over the Midwest, by the way. And so don't throw out the book, judging it by its cover, because a lot of the Midwestern markets, pretty much, I would say, across the entire Midwestern region,

05:45 provide a lot of reasons for California investors, for New York investors, and other more, let's call it, high-value markets, to move capital and invest in retail real estate or other forms of real estate in places like Indianapolis or Milwaukee or Cleveland, because they have a more steady economic environment. They don't build as much real estate, and their yields provide a nice arbitrage or a nice spread. So you can sell a quality property in Southern California, which produces a 4% or 5% annual yield, and then you can replace that asset with a very good quality asset in Cleveland or Milwaukee or Indianapolis that offers a 6% or 7% yield. So the movement of capital and the horizon of an individual private investor or an institution that happens to own a lot of commercial real estate

06:39 really can be greatly enhanced by looking at the differences between the markets and the risk-reward balance between markets. Yeah, very, very important. Folks, we are talking to Hassam Najee. He's CEO of Marcus & Millichap, which is a $33 billion real estate investment brokerage firm located in, well, he's located right outside of L.A. And I want to talk about this because we look at investing, and when we talk about stocks or real estate, when is the best time to invest in something? When it's at an all-time high or when it has a chance of recovery or it's lower, and you do good research and you think it's a good long-term hold? Well, I've always believed that real estate really works well over the long term. It always has. We have cycles without a doubt, the economic cycle, the real estate cycle, and those will always be with us.

07:26 But as you say, if you really do your research and pick your markets well and pick the asset well, commercial real estate is a phenomenal vehicle for wealth creation. One of the ways that a lot of private investors, smaller individual investors, high net worth investors, or small partnerships, families, friends get together, pool their money, and invest in commercial real estate, one of the big vehicles for it is the single-tenant retail, meaning frequently your restaurants, fast food restaurants, for example, McDonald's, Burger King's, Wendy's, or your drug stores, Walgreens, for example, or auto parts stores, that have one tenant committed to stay in a particular building over many years, usually long-term leases. They take care of basically the fixed expenses and so on.

08:11 And so it's a passive investment vehicle for individuals that want to get into commercial real estate and don't want to really have to learn a whole lot about managing the day-to-day aspects of an apartment building that has many tenants and turnover and things like that or an office building. So that vehicle has become very popular over the past, let's say, 10 years, as more and more baby boomers have gotten closer and closer to retirement age and have looked for all-term investments to get a very competitive yield without having to be the hands-on manager of a commercial asset or learn a whole lot about all the management aspects of it. So that's one area of retail. We've seen a major boom in over the last 10 years, and we're the leader in brokering those types of assets across the country.

08:58 Yeah, the worst kind of education to get is one where you're learning the hard way, isn't it? Exactly. And that's, I mean, part of our job, a very large part of our job, is to provide that education through our services and through our market research. We have not only the 1,600 brokers that I talked about who, on a day-in and day-out basis, are looking at properties, talking to owners, talking to buyers, but we have a very active research department of over 30 people dedicated to analyzing markets and the economy for our clients and producing somewhere close to about 1,000 publications a year just to keep the investment community educated. We have about a minute left here on this segment, but what are the steps someone needs to go through if they are trying to decide if investing in commercial real estate makes sense in their portfolio? The first step is to really set your own goals and objectives,

09:44 understand what it is you're trying to get out of it. If you're looking for a quick investment or maybe a, you know, one- or two-year horizon, commercial real estate is probably not the best vehicle. It's much more suited for at least a three- to five-year, three- to seven-year horizon, number one. Number two, it's really important to think about people that you know that are invested in commercial real estate, friends, family, associates. I mean, within a few calls, usually people can find someone they trust who can share experiences and make sure you're teaming up with a very active local broker that knows the business, that can provide really good research, not just in their own market area, but throughout the industry. And so it's not something that you can just jump into. It's clearly not as liquid as buying a stock in a company

10:30 because it's more of a hard asset investment. That's part of its benefit over the long term, but it also requires a lot more homework off front. Yeah, yeah. So it's just a part of a balanced portfolio, folks, but you should never invest in something you don't understand. And that's why it's very important to get educated before you ever do anything and make sure you consult with the right folks. Asam, I really appreciate your time today. It was my pleasure. Thanks for having me on. Yeah, hopefully I'll get you on again in the future and go through some of the more trends, see what's happening in about four or five months. That would be great. And folks, if you've joined this interview late and want to hear it again in its entirety, you can always go to financialsafari.com and click on that As Heard on the Show icon. We'll be right back after this.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 And this is a segment of the show where we go out and I find somebody who's made a difference in the world, folks. And usually it's an author, and we've got a great author in studio today. His name is Stephen Xavier. He's known as America's Top Coach. And he's been offering executive coaching and business advice to top leaders at some of the biggest and best Fortune 500 companies since 1987. He's author of the book Not On My Watch, and we're going to talk to Stephen about this. He's been published dozens of times globally in business trade and academic publications as well. He's also been a frequent contributor to Fortune, Forbes, Wall Street Journal, L.A. Times, and the New York Times as an expert in business leadership and workplace issues. Now, Stephen also has clients. They include an impressive array of Fortune 500 corporations like ABC Television, Disney, BMW, Xerox, Wall Street Giants, Goldman Sachs, and Credit Suisse.

00:52 Stephen, that's a big bio, but welcome in, buddy. Hey, thanks so much, Coach Pete. I appreciate it. Now, this book is amazing. Not On My Watch. Let's talk about what inspired you to write the book and what you found in your research, and did it contrast or compare to what you really thought was going to – what you're going to find when you're doing the research? Well, the book came out in 2009 and is still available on Amazon and Kindle. And ironically, Coach, the book was about the exodus or potential exodus of the late boomers who believe in the workforce. And as you and I know, when the economy tanked in 2008, 2009, millions of people in that 50-plus-something age range that were about to exit for early retirement withdrew and had to go back into the workforce. So the bad news was the book didn't take off because it was a little bit too late or a little bit too early.

01:43 But it's still a great book. And now, when people left the workforce, what happened next? I mean, you know, what you do is when you're forced out, when you leave when you don't want to, you usually want to get back on your feet and find another job. But I think you'll argue that that's been a lot tougher than people thought, right? It's been a lot tougher. And ironically, the book was about helping the most senior executives in my client companies identify top talent and develop and grow those people as the next group of leaders in the years ahead. The good news is that it's still very timely because companies still have to look at succession planning, look at talent development, and still grow people. But from an article from Forbes in fall of 2015, it came out that there are 94 million people of working age in America who are out of a job.

02:31 It's amazing. It's incredible. And to your question about what these folks do, the number of executives who are outplaced in that 2008-2009 timeframe, Coach, probably upwards of 70% have never come back into the workforce at that executive level. Everything from flipping burgers to just taking their retirement and learning how to pinch pennies and never came back. It's really a sad state of affairs in some respects. Well, let's say that, and I don't even think we have 400 million people in America. Let's say we did, though, just to make the numbers round. And you've got 94 million. Let's round that up to 100 million, right? So that's 25% of people that aren't in the workforce that want to be. How are unemployment numbers that Congress gives us or that the government gives us? How are those numbers 5%? Well, you know, what's funny is only a few weeks ago, Forbes did an update, and that number now has crossed the line to about 110 million.

03:24 So roughly one in four people of working age are out of a job. So that low number of unemployment, understand how that number works. Those folks who got laid off on unemployment have now come off unemployment, and they're counted as unemployed when there are tens of millions more who are not being recognized. This is like if you're in a car and you're revving the engine all the way past the red line, right? And the engine can't take it after a while, and it blows up, right? We've got so many people now. When you look at the number of people that are drawing benefits from the government versus the number of people that are working, the numbers are way out of whack. We've got way too many people that are drawing and not enough people working to supply the people that need stuff. Oh, exactly. I mean, one kind of scary statistic was in November of 2014 is it was the first time in American history where 51% of Americans were drawing a check from the government.

04:16 Yeah, that's worrisome. Who was it that said if once we get past half the people that are drawing off the government, the government basically doesn't exist, it's going to die? Who was that? One of the old philosophers. Was it Ben Franklin or somebody once said that? When you've got more takers than givers, you're in trouble. Yeah, not sure who, but they were very wise. Now, let's talk about your book. You talk about leadership skills. I know you've addressed a lot of that in your book and also management training and making sure people are doing the right thing. Is it ever too late for someone to refine their skills and get back in the workforce? No, definitely not, but I think there's sort of really two different avenues here. Avenue one is if you are in the workforce is to be assertive and proactive and go to your leadership and talk to them about what they can do to help you grow yourself so you're viable, so you're relevant. If you don't do that, you're going to fade out. You'll be on the chopping block before you know it.

05:03 It's easy to get left behind, isn't it? Very easy. Then the other folks that are in leadership roles right now I think have a responsibility to start looking downstream because they won't be in their job forever either. So who do they then pick and how do they pick those people and grow and develop them to give themselves increased credibility as a true leader and develop a good platform beneath them to ensure the company's success? Folks, we're talking to Stephen Xavier. He's America's top coach and author of the book Not on My Watch. It's available on Amazon and Barnes & Noble, and it's a great read, especially if you ever thought about what's going on in the corporate America structure. Stephen, I mean, what's happened here with corporate America? We see downsizing happening over and over again. IBM's in the news constantly, it seems like, for their cutting of the middle management.

05:49 But after a while, you run out of middle management to cut. You have to cut other people. What's going on with some of the big corporations these days? What you said, Coach, is exactly true. And I think one trend that really disturbs me as somebody who's worked in some of America's biggest companies, as you know, is the day of the big layoffs of 1,000, 2,000, 5,000 people has faded because they don't want the front page news. So now the layoffs are 100, 50, 150, 200, which stays under the radar. But over the course of a year or more, they have laid off 1,000 or 2,000 people. It's a trickle down. It's like just little drips, but they add up to big rivers, don't they? The little drips. Now, let's look at it when somebody does have that moment where the company calls them in and tells them it's time to leave, even though they don't want to. We see a lot of mistakes on my side here in the financial world.

06:37 We see a lot of mistakes made with their 401ks or whatever. People cash them out sometimes, which sometimes they need them to live on. Sometimes they don't know what to do. Sometimes they think they're hurting the company by cashing in the 401k. You're only hurting yourself, though, because you create a tax time bomb situation. Plus, that 401k was supposed to be for your retirement. And if you take it out before retirement, what are you going to do in retirement? I mean, have you seen that in your research as well? I really have. And, Coach, I mean, you're the expert here, but I did outplacement consulting for years during my early lean years building my practice. First of all, let's say this. You're a 40- or 50-year-old male or female, X number of years in the company, and suddenly called in by HR to give you an empty cardboard box. They give you a check and a package, and they say, you know, today's your last day.

07:23 It's such an emotional and devastating thing for people to go through. The tendency is to make a rash decision. So when I would be the guy delivering the news, then doing the workshops in the days that follow to help them get back on their feet, I always tell them, never touch that money. Never make a decision. Never sign a paper. Take a few days. Think it through. Call your CPA. Call someone like you, Coach, who's a good advisor, a financial advisor. Make those decisions days or weeks after the event. There is no rush. You have to protect yourself. It's been said that when people lose a job, they go through the same stages of grief that if they lost a loved one. That's kind of crazy, but it really is. There's stages, right? Oh, absolutely. You go from sad to then frustrated to mad, right? There's probably something in between there. Remember, the first stage is shock and disbelief because you come in for your normal work day and carrying your lunch and your bottle of Gatorade.

08:15 Next thing you know, you're back in your car and you have to call your spouse or call other loved ones and announce this awful news. It's humiliating and it's devastating. There's the old saying, the work family. And when you think about it, you spend more time with your fellow employees than you do with your family many times, don't you? It's true. And what's funny is in our modern era of technology, people don't realize this, but on average, 38% of relationships actually start in the workplace. And who would think? Yeah. And so when someone retires, this is one thing to don't think about. You're losing your work family when you retire, not just the boss you hate. Oh, exactly. You're losing your family, your structure there. And so a lot of people have trouble adjusting and don't ever adjust and then go right back into the workforce whenever they can after they retire. It's true. Or die young, sadly. Yeah. So you really have to, how important is it for people to have goals as they reach retirement?

09:03 After they get into retirement, have things they want to do every single year? I think it's really important. And I've had enough friends and even family members retire early in the early to mid-50s. And they thought, oh, I'll golf till the day I die. Well, you know what? By the end of year one, they become so bored. They realize that that brain power they had and the skill and experience they had can still be utilized, whether it's through volunteering or a great part-time job, boards and committees. You've got to keep your brain and your body viable and healthy and focused in doing something. So goals are critical, Coach. And again, folks, his name is Stephen Xavier. He's America's top coach. The name of his book, Not On My Watch. And folks, if you join this interview late or want to hear it again in its entirety, you can do that at any time by going to financialsafari.com and click on the As Heard On The Show icon.

09:52 Stephen, thanks for your time today. Thanks so much, Coach. Appreciate the opportunity. And folks, we'll be right back after this.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Well folks, this is the time of the show where I go out amongst the world and find somebody who is in the money world or making a difference in the money world. We've got an excellent guest today. We're going to Sherman Oaks, California. We're going to talk to a guy named Cleveland Brown, who is CEO of PayScout. And we're going to talk about a recent class action lawsuit involving Visa and MasterCard and surcharges and things like that in the credit card world. I mean, if you're like me, use a credit card a lot and this could put a dent in your wallet maybe. Cleveland, welcome in. Thank you for having me, Coach. Yeah, let's talk about this. What is going on out here? Fill in the listener on the class action lawsuit and let's go through some of the pros and cons of it. So in terms of the lawsuit, there was a class action lawsuit where merchants were basically suing Visa and MasterCard for a host of different areas.

00:49 But one of those is the ability to be able to be in control of surcharging customers for using their credit card in store to offset their cost that they're paying to the card issuers and acquirers. So that was in actually January 2013. And one of the pieces of that lawsuit allowed merchants in the U.S. and the U.S. territories to add a surcharge to credit card transactions. So that's been enacted. It's now in play for Visa, MasterCard, and American Express. And it's a hot topic in terms of should merchants surcharge or should they not surcharge? I've always looked at it as a cost of doing business when I take credit cards. I mean, I have to pay the bank's fee and I don't pass it on to the consumer. But now I think that's a thing of the past, it sounds like.

01:36 It is now a thing of the past. And if we look historically, look at merchants and how they're built, that cost of doing business. There are some misdeeds done by merchant service providers in terms of really being transparent in how merchants are being built. And that's one of the reasons this settlement came in play is because of that. So really, merchants now having the ability to understand how they're being built and then determine should they pass that surcharge on to consumers. I think there's an educational process that can now take place that didn't exist before. Yeah. Well, the educational process is going to cost you more out of your wallet when you buy something. That's the educational process. I mean, they can do all the spend they want, but I mean, I don't agree with it. And you said they can do up to 5%.

02:21 I think in your press release there it said about 5% they could charge as a surcharge. Correct. It's actually up to 4%. 4%. Yeah. And that surcharge, if you look at the policy, Visa, MasterCard, they do not like the fact that merchants can surcharge. And that's more from a competitive standpoint of cash versus credit and discouraging the use of credit cards. But in terms of the policy, they did cap it at 4% or the equivalent of the fees that you're being charged by your particular provider. So that's where it's at currently. Currently, 10 states have restrictions that go above and beyond the settlement. So, you know, California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas.

03:09 There are restrictions on surcharging, but those are mandated at the state level. And there's restrictions in those particular states currently. So the states you did not mention, there's no restrictions at all that merchants can charge whatever they want or up to whatever their fee is? Correct. Up to that 4%. Okay. Absolutely. Are there any restrictions from certain issuers like Visa, MasterCard, that counteract this or counterbalance that? No. Unfortunately, with the lawsuit, they cannot counterbalance that. However, like I said, once again, there's an educational process. So the consumer understands that if they use their credit card, there could be a surcharge. And there's a lot of rules in terms of surcharging that consumers need to be aware of in terms of policy. And basically, the policy states that merchants must, when someone enters their particular store, whether that's physical or virtual, right there in the front, there has to be a sign that says, we surcharge for credit card transactions.

04:08 In addition, at the point of sale, they have to disclose once again that they're surcharging for a credit card transaction. The third layer of that is on the receipt, they have to differentiate the surcharge from both the cost of the good and the sales tax associated with that good. So it's very clear to the consumer how they're being surcharged so it cannot be abused. So that's the policy that stands now. In addition, the merchant, they have to register with the card associations before they can surcharge. So a merchant can't just simply say, hey, you know, I'm going to surcharge. Let me start billing consumers. They have to register with the card associations 30 days in advance. There's a particular ID associated with that particular merchant so they can't abuse the system.

04:54 And, folks, we're talking to Cleveland Brown, he's CEO of PayScout, and we're talking about the recent class action lawsuit that now allows merchants to pass on the credit card processing fees to you, the consumer. And I wanted to – it reminds me of the day back when gas stations used to advertise a cash price and a credit price. Seems like we're going back to those days. Yes. So interesting that you bring that up. So with the cash price versus the credit price, and once again, it's unfortunate because merchants look at ways that's spinning things. So the reason why there was a credit price and a cash price is they didn't disclose it to you, but you were receiving a discount for using cash. You were not being surcharged for credit. I know it sounds crazy, but that's the way they spun it, and that's why they were able to have those two prices available.

05:43 So you got a discount for paying cash. You know the old joke, if you go to a restaurant and they take cash, most of that goes under the table and never gets reported. There you go. One more thing, Cleveland. This is something a lot of people don't realize, too. When you have these rewards cards, which a lot of people do, the merchant themselves has to share in the reward you're getting. Like if you get 1% cash back, that fee's also added to the merchant when they accept a card like that, isn't it? That's correct. They are impacted by that. It's interesting when you look at the perspective of the consumer hitting the consumer's wallet versus hitting the cost of doing business. And there's a number of perspectives. From a merchant perspective, you know, I hear in terms of the rules that this only applies, first of all, to credit card transactions. So the merchant can educate the consumer, you know, use your debit card.

06:30 Use a prepaid card. Use cash. You don't have to use your credit card, per se. And they are not allowed to surcharge if you pull your card out for a debit or a prepaid transaction. It applies only to credit transactions. Interesting. And what merchants do is they say, look, there's alternative payment methods. What's the most convenient for you? And the more convenient that's available, a lot of merchant city customers should pay for the convenience. The same way you would pay more for an airplane ticket versus a train versus a bus. So there's different perspectives, you know, in terms of the way people look at these things. Are you seeing a trend coming now? Are a lot of the merchants passing this fee on? Are many of them skeptical of doing it? Because I've got to tell you, if there's a store A and a store B and store B doesn't charge a merchant fee, guess which one I'm shopping at?

07:15 Yes, absolutely. It's the power of the purse. 100%. So are you seeing a lot of merchants accept this and do it? Or are some skeptical and leery of doing it? I would say definitely skeptical. Australia is a country, and I just want to bring this up, where they have surcharging. And surcharging is basically accepted across the board. And they went through a particular process similar to us where they abused the surcharging. It then became regulated, and now it's an accepted practice. So what I'm seeing in the U.S. now is that the merchants that have the high-ticket items that have less of a customer service piece of their business when it comes to working with consumers, they are looking at surcharging. For example, jewelry stores with high-ticket items. You know, the impact of 3%, it's a pretty big impact to their bottom line when you're talking about large tickets.

08:06 So we're seeing a trend with those types of merchants, those types of verticals, actually using surcharges. Right. However, when we're looking at restaurants that have, you know, the customer service aspect is critical, you're not seeing it. They're very skeptical. Exactly the analogy you gave earlier, they're looking at what their competitors are doing. They're looking at the disclosures that can turn customers off and, you know, the impact on the customer's experience. So we're not seeing a trend in terms of those types of businesses currently surcharging. It's really the high-ticket items and really, you know, kind of government agencies, you see that as well. Well, it's interesting. It's something to consider. Folks, again, this is what's in your wallet. Now what's in your wallet could be more fees.

08:51 If you're not careful, the merchants are passing that along. Cleveland Brown, thanks for your time today. I appreciate it, Coach. Thanks for having me. And, folks, if you join this interview later and want to go listen to it again in its entirety, you can always do that by visiting FinancialSafari.com and click on that as heard on the show icon. We'll be right back after this.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 So, folks, if you've watched at all the stock market, you've heard of this term. It's called IPO, and that's Initial Public Offering. And I was just talking the other day to somebody in the money world about this, and it's funny, IPOs 20 years ago, everybody wanted to get in one because it was a forbidden fruit. And if you had the right relationships, you could get into a company right when it was coming out, as far as trading the stock. And many people made a whole lot of money. But unfortunately, many people in the history of IPOs have lost money as well. So there's no guarantees when we talk about IPOs. And Facebook is a good example of this. When it IPO'd a couple years ago, it went rocketing up to almost $50. And a lot of people, that was the only price they could get it right at the beginning is $50 a share. It came out, I think it listed for $17 or $18, and then it ended up going all the way up to $50.

00:49 So if you got in early, or if you were one of the people that was inside the wealth circle, we call it, the friendly circle of getting in before everyone else, you made some money. But a lot of people bought at $50, and then Facebook went down into the teens, and then has made a U-turn and gone back up again. So it's not about what you get, it's when you get it a lot. And we've got a company called Alibaba that's coming out. They're going to be IPO-ing here very shortly. And they are anticipating $20 billion in their IPO. And this year in general, 2014, is on track to be an $80 billion year for IPOs. That's a fascinating number. And we've got a guest joining us from Atlantic City, New Jersey area. His name is Ken Wisniewski.

01:36 And he's going to talk about these IPOs and what's going on. Ken, welcome in. Thank you very much, Pete. I appreciate the opportunity. Yeah, now I've read that you agree with me, I think, on this part here, where IPOs are good in the short term, bad in the long term. Explain that concept to the folks out there. And maybe if I didn't do a good job explaining what IPOs are, introduce IPO concept to the listener. Yeah, no, I think you did a great job kind of explaining the IPOs. I think IPO has become a real buzzword out there over the past probably decade or so just related to new stocks that are coming out that kind of maybe are seen as being undervalued and having really high feelings to really grow. And I think, you know, that that started going back several years ago with Google

02:25 and then obviously trended over in the Facebook. So when we hear about IPOs now, I think there's a lot of hype around them and people kind of view it as the opportunity to get in on the quote unquote ground floor and watch it really explode from that point. You know, when you think about ground floor, it's a relative term because some of the people on the inside are in a lot cheaper, so to speak, than people that are in at the IPO price, aren't they? 100%. People that have had the opportunity to get involved in kind of the pre-public offerings have, you know, really nice levels of stock that they might have bought at varying different times and in turn, you know, have it at a much lower rate. So when these IPOs occur, a lot of times what you'll see is, you know, some of them kind of gaining some sort of liquidation, you know,

03:11 where they're selling some level of their stock and obviously seeing a nice appreciated value on top of what they quote unquote were into it for. Now, Alibaba is an interesting concept. It sounds like, you know, it sounds like you go there to buy the flying carpets and stuff like that. It sounds like something from, it's like a Mideast kind of sound, but it's a China company and it is a buying place, I guess. I mean, how would you describe Alibaba? It's basically what Amazon is here in, you know, the United States, but the difference between Alibaba and Amazon is also, it also connects you to a lot of other portals that sell products. So Amazon, you know, all the kind of sells is products that are somewhat connected to Amazon. In this particular case, it also sells products that are outside of the Alibaba kind of domain, if you will.

04:00 So they also make a lot of revenue through kind of referral. So the interesting thing is it kind of combines what Amazon does and in some ways what Google does. And obviously it's been extremely profitable in the China market, and they're obviously looking to take that and try to transport it over here into the U.S. market. And that's a fascinating thing because it remains an interesting IPO here in America, yet most all of its revenues are coming from China, correct? Yes, and I think that the reason they're looking at doing the IPO goes back to kind of the onset of our discussion, which was really the hype that really surrounds it. By doing the IPO here in America, it gives it relevance here in America, and it enables it to probably be able to kind of launch with some level of relevance into the United States sector

04:47 and obviously take advantage of our very large population of e-commerce buyers. So I think the IPO in this particular case is one that really plays on hype but also plays on an opportunity for kind of almost media promotion in the fact that it provides a lot of credence to the company, you know, just as it's even beginning to launch here in the United States. And folks, if you're just joining us, we're talking to Ken Wisniewski, and you may have seen him on MSNBC, Bloomberg TV, Fox News, and Fox Business discussing internet marketing, social media, and such things as tech. And his insights here, we're talking about the IPO market. And Ken, I really think this is starting to remind me of the Y2K years. You remember they were just launching out anything with a .com was going up like crazy

05:35 because when we're talking about Alibaba and just what's the fascination and the magnitude of this wave coming in with this IPO, this could be the largest IPO in history, couldn't it? Yeah, you know, the one difference, I guess, that we look at there is that they've got really tremendous revenues already, Alibaba. Yep. You know, the question is, you know, when you look at kind of some of these other IPOs that maybe sit somewhat on the peripheral, you know, companies, you know, Snapchat is a company that's been talked about a lot. They don't really have any revenue at all. You know, they're working at an operating loss. So they're based all on kind of hype and, you know, expectation. When Alibaba's case, I mean, the only thing I could say about them that would be concerning is, you know, have they peaked?

06:21 You know, is this kind of their highest valuation? And then are they really not going to have the opportunity to kind of see that growth? You know, people could take the counter stance that, you know, there's, even if they can't defeat Google or the Amazon marketplace here in the United States, and they're a second player in that space, even if they have 20 or 30 percent of the market share, that's a tremendous amount of revenue. And obviously they could still be a very good bargain, you know, even at their IPO price. Now, when we talk about there was a fantasy island back in the day, and they had the tattoo his name was, and he would always look up and say, the boss, the plane, right, the plane. And so let's talk about in the IPO market, let's pretend to your tattoo, and you're talking about Coach Pete, the play. How can people play this stock IPO to make the most money in this IPO period

07:10 for Alibaba and maybe other ones? What's a good play? The interesting thing with Alibaba is that there's also a very unique play that you could do that is one that I haven't really seen very often, and it's the fact that Yahoo a few years back had made a very large investment during that kind of friends and family period that you talked about, Pete, where they were able to kind of make that investment in Alibaba. And now as Alibaba is going public, Yahoo is going to actually sell about 25 percent of their equity or their shares that they control, which is about a bottom line, you know, after taxes and everything, about a $12 billion bounce to Yahoo. So one of the things that I found interesting is that, you know,

07:58 potentially you would have the opportunity to be able to get in on the IPO and still have the Yahoo stock if you were to kind of purchase Yahoo stocks. Yahoo stocks have kind of skyrocketed here recently, not based upon anything that Yahoo is doing, but really based upon what they've done with their investments. So it's an interesting play and a different type of play and one that maybe ultimately provides you a bit more security if you were going to go and felt strong about Alibaba but were concerned about that quick rise and maybe a settling. Yahoo provides you with that opportunity to get engaged with a little bit of that, but at the same time still see the benefit and the security of maybe having another kind of company that's been in the marketplace for some time, you know, contributing towards that stock as well.

08:45 So that's a good indirect play. And, you know, I was wondering, and I just checked Yahoo's price, it's been going up like crazy here in the last couple of years, and it's probably because of that fascination and basically the mystery of what Alibaba is going to do because Yahoo still exists, obviously, but we saw the same thing when Twitter came out. There were some companies that had invested in Twitter, and they rocketed up before the IPO but then came down afterwards. So would investing in Yahoo now be almost like the wrong time to get in, like you want to buy the rumor, sell the news kind of thing, and basically the price of Yahoo is Alibaba already baked into that price? Yeah, it is a little bit now. You know, the time would have been a little while ago when this kind of wasn't as prominent

09:30 and, you know, people weren't kind of paying so close attention to it. The only reason that I could see that being a realistic play would be the fact, and it's kind of a unique scenario, where if Yahoo kind of goes and takes this $12 billion kind of asset that they're going to have left with after they sell this and turns around and can make another very strong investment in another company, you know, or even purchase a company, that could be an interesting way for, you know, you to be able to get engaged with some of these other companies that are kind of up and coming, and keeping in mind that Yahoo still owns a very large amount of stock in Alibaba. Right. 75% more of it they're still going to have as opposed to selling their whole position.

10:16 So to me, I kind of feel it might be the safer play, and again, I guess I can make a more definitive notation on that if I knew kind of what Yahoo was going to do with that $12 million. If they were going to utilize that to a great degree, Yahoo could suddenly become a very intriguing play, not necessarily because of what they're doing from their search perspective, but what they're really doing from their investment perspective. Yeah, and people need to be very careful here, because a lot of people get burnt. They fall for what I call the excitable hype, and everyone gets excited. It spikes up. You're buying into the spike because it's never going to be any cheaper than today, and this can last a day or two or a month or two, but eventually, again, Facebook came out with a bunch of hype too, but eventually it came back down,

11:02 and the buying opportunity was a lot better later, not right then. If you're not in, you know, again, if you're not in at a very cheap price, not one of the insiders, sometimes it's better to wait not only for Alibaba, but also for Yahoo. See what happens there. One final point. Alibaba is not a site where they are selling merchandise. They are a collection of sites, so to me, they are almost like eBay and Amazon together instead of just buying Amazon, and Amazon makes a lot more money because they control all their profits, and they are the site, but explain your opinion on Alibaba as a shopping network, I guess. People go into the, it's like a flea market, I guess, and they go in there, and it's all different shops, right? Yeah, it's true. They do have some aspect of it as their own kind of product that's similar to Amazon, but they do make a lot of money with that kind of shopping kind of network,

11:50 if you will, which is more almost, if you think about it, like a Google. You know, people, you know, have their listings, and, you know, through their paid search, and in turn, you know, people come through that marketplace and make those purchases, so they've kind of combined e-commerce from that perspective, but, you know, my feeling is that ultimately, you know, Amazon really does control the market share here in the United States. I think they're only kind of growing in kind of popularity and kind of, you know, with some of the creative things that they're looking to do. I feel that they continue to be at the forefront of probably innovation related to delivery and whatnot, so it's going to be tough for Alibaba to come in and really, you know, move them off their perch, but, you know, people are also cost conscious. If Alibaba can find a way to leverage costs at a better price

12:38 and things people can buy on Amazon, you know, let's be honest. You know, brand favoritism doesn't necessarily, and brand loyalty doesn't mean that much if you've got to pay more money. People, you know, nowadays have the opportunity to buy the same thing somewhere else at a lower price with a quick of amount, so, you know, that's going to be the area that I think will make the most interest and intrigue is if they're able to, you know, be able to compete at a lower price. Well, it is fascinating, and it really is something that people need to, I guess, spend some time researching and watching. It'll be a fun thing to watch, and Ken, I want to have you back on in the future to talk about what happened after it came out. Perfect. I'd love the opportunity. I appreciate the chance today to talk about it. Yeah, now let's pivot. That's the term that's used a lot these days in the political world. Let's pivot away from Alibaba for a minute. Let's talk about, I want to talk about Snapchat for a minute,

13:25 because Snapchat is something that a lot of kids used to send pictures to each other they shouldn't be sending a lot of times, but how do you think they can monetize? How will Snapchat monetize themselves? Because I saw, I think I read an article, what are they, $3 to $5 billion valuation on them now for some odd reason? Yeah. Why? You know, I guess just pure critical math. They feel a lot of people are using it, but ultimately this is kind of that hype game that you come up with. You know, we've got people using it. We've got people using it. Oh, we'll find a way to monetize it. And I think it's very difficult to do. Facebook was that same type of company, but Facebook kind of had, you know, at least some model and had some revenue. The thing that Facebook's really been helped by is the fact that they're kind of the leader

14:12 in the kind of the mobile marketing space. You know, Google kind of dropped behind Facebook in the mobile marketing side. So Facebook's really seeing the revenue growth there. I have major concerns that Snapchat will be able to monetize to the degree to meet anywhere that type of valuation. Don't get me wrong. I think it's got a place. I think it, you know, has, you know, value. But I think if you look at it as a, you know, $5 to $10 billion valuation, in this particular case, I don't think it's justified. That's a lot of money. Now, Facebook had offered the Snapchat guy, what, $500 million a few years ago or something? It was a great number. I mean, I would have sold it in a heartbeat myself and gone to work on some others. But he's basically, the valuation is what his company's being put at now,

14:59 but he hasn't made any money yet, has he? No, he hasn't. And, you know, I think, you know, nowadays a lot of it is just really Facebook and Google and these companies, what they really look at is, you know, they try to build some things for their kind of components that they're working on. So they'll build divisions. They'll try to create aspects. But then they also view growth through acquisition. So if somebody's got a good idea and they think they can take it and roll it into their grouping of services, that's probably where, you know, Facebook really saw kind of that opportunity was, hey, this could be an extension of what we're already doing. We'd be able to find a way to monetize it. And the other big thing is they like to take competitors off the table. You know, if people, if kids, you know,

15:45 which it's primarily the younger generation that Snapchat's really endeared to, if they could pull these people, you know, the kids back, that maybe are losing a little bit of steam on Facebook because it's not as cool as it used to be and they can ultimately keep them within their quote-unquote network, you know, it's probably worth the $500 million. You know why it's not cool anymore is because their parents have found it. 100%. That's what always happens. They don't want their parents seeing what they're doing, babysitting them and stuff. So now in your research, and you spend a lot of time researching these trends here in the social media markets and whatnot like that, the internet, but what do you find the most fascinating as far as the upcoming year and maybe the next decade? What do you see coming down? What are the trends? I mean, I think one of the biggest areas

16:31 that I really look at as far as trends is just kind of expansion from the mobile advertising space. You know, more and more people are doing searches on their mobile phones and it's really been a change in landscape. You know, Google's still catching up. There's a lot of companies still catching up. You know, their websites aren't even really viewed all that great, you know, via mobile phone. So I think right now the biggest area that I see opportunity in and growth in is really around the mobile marketing space and this is where, you know, ultimately Facebook is seeing such tremendous growth in and I'm certain that there's a lot of other players that are kind of looking to enter into that kind of space. I think the social media side of things is, you know, ultimately something that plays into mobile,

17:17 but I think just business in general is really controlled so much by mobile now and that's one of the biggest things I think to look at as far as when you're kind of trying to understand companies, how well they really translate to kind of the new environment that's out there. Right. Well, all right, so let's finally, and I know I've kept John, but I want to keep you, this is fascinating, this internet in general. I mean, I'm one of the guys, I'm 48 and I'm one of the guys that said I will never have the computer on in the same room that I'm watching TV. I would never disturb my TV watching and yet my wife and I sit in chairs in the TV room at night and we're both on our iPhones the whole time and every now and then we'll look up and see what's on TV. That's how fast this has changed, Ken, and it's kind of crazy, isn't it? You're not the only one.

18:02 I think what you just described is probably pretty commonplace for many people and I think that just the way we even watch TV, the way we kind of do a lot of different things are really controlled so much by our access to information and the ability to get things. You look at TV commercials now, what is kind of the one prominent thing you see? You see they're trying to push people to their website where they can engage with them, where they can collect data. So, you know, everything is really being pushed towards, you know, more towards your phones and your mobile devices than anything else. So, you're absolutely right. You know, this Sunday the NFL kicks off. There'll be a lot of people sitting there watching, quote unquote, the game, but at the same time on their phones, checking their fantasy leagues, doing whatever they're going to be doing. So, it's kind of almost an accessory

18:49 to any type of media that's out there now. It's almost like interactive TV, but it's not the interactive TV we envisioned back, what, 15 years ago. It's even better, I think. The clunky, the clunky interactive TV. This gives you more of a personalized experience. Very fast, too. Now, we have a lot of business owners who listen to our show and let's do a pretend thing here, finally. Let's pretend that I'm a business owner and I've got a $100,000 advertising budget for 2015. This is about the time we're sitting down forward looking for budgets and let's say I want to regionally let people know I exist using the internet and I want to basically appear bigger and better than any other, let's say, financial firm because I'm in the financial world here and I've got a $100,000 advertising budget and I just want to be the man in North Carolina and I want to attack North Carolina through the social media

19:35 or through internet. How would you, if you were me, how would you spend that $100,000 to get the best bang for your advertising buck? Great question. Obviously, Google still dominates. It's where almost everyone goes to begin with with any type of searches. So you'd want to have good presence on Google from that localized search. So you'd want to be able to allocate some of that budget towards kind of ratings and rankings on Google would be probably a good amount of that budget. You know, maybe let's just throw out arbitrarily 50% of it. Additionally, with the fact that Facebook and some of the social media tools give you the opportunity to drill down into demographic and geographic areas so well, we'd want to allocate a portion of that budget into some of these social media channels

20:21 to be able to kind of endure to the audience and also the audience that's definitively in our marketplace. So we would also use that. And then beyond that, the other 25% would probably look at utilizing across the board with a lot of other scenarios as far as promotion of content. Content is one of the biggest areas where people really, you know, we talked about it, you know, sitting, watching TV with your iPhone, you know, a lot of people are doing research, kind of reviewing things. So more and more, people are drawn to companies, drawn to businesses because of an article or a piece that they wrote about something very specific to them. So content marketing, if you will, to me, is one of the best opportunities to really be able to drive new business. And again, especially if you're

21:06 talking about being in the financial space where research kind of comes hand in hand with that, content marketing is another area that we would also focus heavily on as well. The old saying, content is king, is coming back now, isn't it? Absolutely. You know, I preface it by saying good, engaging content is king. Too much of a bad thing is still a bad thing, right? Too much fluff nobody wants to read. Yep. Now, one of the things that I see pushed a lot and I see people that go to these sites before they do anything are sites like Yelp and Angie's List and even Groupon. You know, they go there. Yelp and Angie's List are ranking places and Groupon actually has a little ranking capability as well. What's your opinion on sites like that or are there any new ones

21:51 that are coming on the horizon? You know, I think if you look at Yelp, it's kind of coming under scrutiny here lately because, you know, there's the notion that, you know, probably 70 to 80 percent of their kind of reviews are potentially, you know, bogus. And, you know, to me, that's where, you know, Angie's List is a little bit different. It's behind a paywall. You have to have the ability to kind of have an account. So, you know, if you were going to, you know, trash somebody, you know, you're kind of, your name appears with it. So Angie's List to me has more value and credibility to it. And additionally, I can go back and research that person. So if, you know, if you look and Ken Wisniewski is on Angie's List and you were going to use a contractor and,

22:36 you know, I ripped them, but then you go in and you look at everything and all I do is go on and rip people. You know, you could probably cross my name off the list as somebody you really want to pay attention to. Yeah. The anonymity of Yelp and these other services to me over time are really starting to, you know, kind of people, again, while they're influenced by these scenarios, I think are starting to understand that how credible really are they. And I think, you know, Yelp's one of those companies that, in theory, you know, has great value, but in reality, I think, you know, it's just a location where, you know, your closest competitor can go on there and spend a couple of days writing bad reviews and, you know, just try to, you know, ultimately, you know, take business away from you by putting up bogus information.

23:22 So that's the challenge with the anonymity on the internet that obviously is something I think is starting to change. That's a scary thing when you think about it. Somebody anonymous can destroy your business and I talked to a real estate agent last year and he had this, I think it was eOpinions or one site where someone, it was one of his competitors was coming in under all different kind of login names so it made it look like it was a bunch of people but it was one person writing all, because the use of the English language was the same and all the different kind of comments even though they were supposedly from different people. you could tell, right? And so he contacted the site and I forget what site it was now to tell him that it was bogus and all that and the site said we'll be happy to take it down but you'll have to pay us $25,000 to do that. So it's almost like legalized extortion, wasn't it? It is

24:08 and you know, I do think that one of the things we'll start to see over time is more transparency in that. I think that companies are beginning to look at moving away from these anonymous kind of listings because again, you know, I think there's just too much of this that kind of goes on out there. So as far as like companies that are going to kind of be coming up in that area, you know, I think there's, you know, there's kind of that's going to be the general notion that, you know, hey, you need to kind of tie your name to this and you know, again, it's easy to bash someone when you're anonymous or you know, not even, you know, really have any real insight into them. You know, you just made this kind of case based on conjecture but it's a little bit different to really be able to go out and bash someone or talk negatively about them when you've got to put your,

24:53 you know, your picture next to it and you know, you basically open yourself up for scrutiny as well. Folks, his name is Ken Wisniewski and Ken, how can our listeners find you if they wanted to, you know, read some of your writings or just ask you something? Sure. Well, they can visit my, on my corporate website which is webimax.com or I actually have a site that I post a lot of information to related to stocks and different scenarios related just towards the marketing industry at simply just kenwisneski.com which is K-E-N-W-I-S-N-E-S-K-I.com. Fascinating. All right, so I want to have you on after this IPO settles down a little bit and we'll talk about it. How's that?

25:39 Perfect. I appreciate it. Thanks again. Thanks for your time today, Ken. Folks, we'll be right back after this.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 And this week we've got a fascinating guest on, folks. He's had over 32 1⁄2 years' experience in the military. He's a military veteran, a former sergeant major, and battling finances in the military. And he's written a book, Journey of Preseverance Accomplishments, Achievements of Fighting Finance Sergeant Major. And his name is Dr. John Medley. Dr. John, welcome in. Thank you. Glad to be here. Let's talk about this. One of the things I like to do when I interview folks is I like to see what your motivations were to write a book, because I've written several books, and it's not something you sit down in the middle of the night and crank out in one night. It's a process, and the very first step in that process is you have to get fired up enough to want to write a book.

00:46 So what was your process in writing your book? What was the catalyst? What got you excited about it? And what did you find out when you wrote it? Okay. My book, of course, is about my journey in the military and civilian life as well. My journey was replete with problematic conditions and situations that my military training and education prepared me to resolve based upon the mission-related knowledge I gleaned from one assignment to the next. As my journey advanced and problem-solving became a skill, I longed to take my experiences to a higher level that would be meaningful to others. Thus, I launched a personal goal referred to as the development of independent professionals.

01:37 In this book, I address the achievement of that goal and the extension of my knowledge of tried and tested methodologies, values, lessons learned, principles, philosophies, and idioms to the readers who may be interested in applying the tools of establishing a success environment while avoiding the pitfalls otherwise encountered in the journey as they proceed to future leadership and management positions. My journey began with the completion of basic training, advanced individual training or infantry training, and airborne training.

02:22 And after that, I was prepared to go to war and kill the enemies of the United States. But after being notified that I was going to get on to the truck, going to the administration company where all the administrative types were located, I followed my orders and wound up in the finance corps, which was a mistake because I was actually selected by the adjunct and generalist corps, the administrative field, to perform as a personnel technician. Anyway, after a couple of months, I made a name for myself, and the finance troops decided not to let me go to the AG corps. In the meantime, I got a notice that 21 soldiers had been killed in a training accident.

03:15 And as I got the records of those soldiers together, I perceived their voices urging me to complete those records accurately as possible. And that brought a tear to my eyes as I closed out the individual records. And I got the realization that this job, this is the nature of the job, how important it was. And those memories stayed with me for the rest of my career. To sum it up, 30 years later, there was an airplane crash, and it killed 248 soldiers who were returning from the Sinai. And I was alerted by my NCO on my deployment team.

04:04 And I answered the phone, and he said, Sergeant Major, we need to turn on the TV. So I did, and the news, after a few seconds, it was obvious what had happened about the plane crash. So I instructed my NCO to identify all those soldiers who were killed, identify who was killed, and then identify whether they had dependents on the local area. And they proceeded to do that. About 9 o'clock, I was briefing the finance officer, a lieutenant colonel, on what I instructed the B team to do. And as I was instructed, as I was briefing him, I could see that his concern became obvious.

04:53 Just as he was ready to speak, one of the survivor's spouses came in with two toddlers. And she was crying and bawling, and she just fell to her knees and said, you need to help me and embrace the finance officer. And the emotions just filled the room with energy. Anyway, a sergeant came in with a cigar box with the checks that I told him earlier to create. And we gave the check to the finance officer after asking the dependent what her name was and identified her. And the finance officer gave her the check, and she just jumped for joy. And we were all elated over her actual reaction.

05:44 And it just made the whole effort worthwhile. So when she left, the colonel and I talked, and I told him, I said, please be sure to relate the arrival of the dependent and her reaction when she got her indemnity check. So that experience way back then paid off. And when I retired, I decided to get my degree. I had a bachelor's degree, and I worked after retirement and got my master's degree. And then the realization that I wanted to write a book in simplistic terms so they understood all my experiences and lessons earned and what have you were.

06:31 I wanted to put forth in simplistic terms. So I got a Ph.D. It took me about a year and a half to get that. And that's how I came about to write my book. Well, we hear about – yeah. And, you know, here's what – when I think of finances in the Army, and this comes to mind because I remember growing up, we'd hear about the $100 toilet seats and the $1,000 screwdrivers. You remember those days when, like, military waste was alive and well. Yes. Yeah. Yeah. Yeah. Things like that happen normally within the spectrum of the comptroller of the installation. And you have people that have their budgets. And you have a supply system that responds to any requests for supplies.

07:22 And occasionally somebody fact fingers a requisition, and you wind up getting something you never ordered. In my case, I was in the finance office, and the 6th Infantry Division was just formulated. The 101st had moved to Vietnam. And I was – my mission was to build a finance office for the newly activated 6th Infantry Division. So when I requisitioned some pay tables, I sent it to the unit supply. They requisitioned, and instead of ordering me $100, they fat-fingered $1,000. So lo and behold, I had a truck backing up with $1,000 pay tables, which I had to store in my attic.

08:12 Anyway, that's the way those things happened. And the finance and accounting field is subordinate to the comptrollers. And the finance and accounting pays the bills. And, of course, the finance side pays the payrolls. They pay the vendor payments and any contractual payments. And they also pay travel reimbursements. Well, let's look at this. I mean, you know, and we've got about a minute left here in the interview. It's a fascinating interview about the book, Journey of Preserverance Accomplishments. If you could put your finger on one thing that you learned or experienced in – besides what you've talked about already, working in the finance office in the military, what would it be?

08:58 I would say the valuable experience that the retiree brings to society after serving anywhere from 20 to 40 years in the military. These skills come from a variety of retirees that worked in different fields within the military. And there's a large number of – in my case, it would be comptroller field or finance and accounting field. And with that, I bring a lot of skills, knowledge, and leadership principles and values and traits.

09:49 These traits, for example, I came in the Army with only a high school education. But as I proceeded, reading material and so forth and studies, and then associating with young officers, then there was a trading of knowledge and experience and a gaining of traits that you weren't born with or you weren't raised with. So that transferred in terms of leadership development. And as a result of that, for 20 years to 30 years, you have all that experience and that knowledge, and it converts to valuable traits and qualities that you can bring to the economic environment when you retire.

10:41 Well, it's a great read. And, folks, I recommend you pick up a copy. Again, Journey of Preseverance Accomplishments. His name is Dr. John S. Medley. John, thanks for your time today. Thank you. And, folks, we'll be right back after this.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Well, folks, this is the time of the show where I go out and find someone who's interesting to me, especially when it relates to the financial world. And sometimes the people we talk to you wouldn't think we'd normally be talking to. And today I'm going to talk to a guy named Ken Courtright. He's joining us from the Illinois area. I think you're right in Chicago, right, Ken? Yeah, about 40 miles southwest. Right in Chicago. Chicagoland, I think we call it out there. And I want to start with, we'll get into what Ken does, but Ken, tell people how we met. We met at a Best Seller Summit, didn't we? Yeah, about a year or so ago we bumped into each other for the first time. And I was there because the year before I had written a book and I wanted Brian Tracy to endorse my book.

00:46 And so I had our gal send Brian a copy of the book and it turned out he didn't endorse it, but he called us a week later saying, you know, is there a chance that Ken could co-author a book with me? And so, you know, by default when Brian Tracy writes a book, it becomes an international bestseller. And I was literally at the Best Seller Summit just drafting off of his guaranteed bestseller-dom. But it was great to work with him and write a book with him, so that's why I was there. And that was in Hollywood, California, right? Yeah, Hollywood. Got interviewed on the red carpet, the whole deal. It was really cool. My kids loved it. Yeah, and I also have been in a book with Brian Tracy. He's a fantastic individual, real knowledgeable on the business world and how to make money and one thing,

01:31 but number two, how to keep money. You can't a lot of people make money and then lose it right back, don't they? Exactly. Yeah, and the point of my participation in the book was that I was in the middle of about a one-year tour. When I do presentations from stage, people want me to talk about a topic called S-curves. And it's a financial topic. And what it is is I did a pretty exhaustive search on what happened to Corning Cookware in the late 60s. And after 30 years of dominating their space, they got a letter sent out to all divisional leaders in the sales department saying, you know, after 30 years of month after month after month of better sales than the month before, not only have sales dropped this month, we're predicting we might be out of business in 6 to 18 months because competition was in every country.

02:26 They were making a very similar product at half the cost. And Corning knew they were, no pun intended, they were cooked. And so the part of my book is that Corning has gone down as probably one of the greatest U.S. resurrection or turnaround stories. And what they did is they simply went to all of the people in the fabrication facilities and said, listen, we're going out of business, so what other product can we make with the same equipment, same people, nights and weekends? We have no more money to dump into, you know, taking a long time to figure this out. And it turned out that 18 months later, they were the global dominator in fiber optic cable. Then they asked the same question. Then they became the global dominator in Gorilla Glass, which is glass for laptops and TVs.

03:14 And now they literally dominate four different industries. And it's all because they asked what's now called the legacy question of, you know, what else can we do with our resources, our people, and the time we have, and bring in an additional source of revenue to our household or to our business? And so that's what that was about. And that actually launched a whole other company of ours, and that's how we met the second time. Well, the funny thing about that is when we talk about corning, I mean, everyone's had corning cookware forever. I mean, my grandparents, that's all they cooked with. And then the competition set in, and so they said, well, let's come up with ways to make sure that we can't be beat out by other people or keep the revenue source going. And we talk about this when we talk to individuals out there.

04:01 It's all about income. So their income was dwindling, so they found ways to maximize their income so they didn't lose their company. That's exactly what they did. And the title of my part of that book is Stacking S-Curves, and that's actually a Jack Welch phrase from GE. And he coined that phrase. And it just means, you know, you know when that revenue stream or that main product line is maturing. And what almost always follows a mature revenue line is usually a dip, usually going into desolation. So they just said, hey, okay, this product line has ran its course, and we better stack another S-curve, another revenue stream on top of it. And they've been stacking S-curves ever since. Well, the S-curve term, now explain to the listener what an S-curve is, just an elementary explanation of an S-curve.

04:48 Yeah, absolutely. It's literally, if you look at a graph of revenue, every company goes through this, every product launch goes through this. And what it is is, it looks like the letter S. So if you can imagine, let's say your company sells widgets, the first couple years or first couple months selling the widget, the growth is not very extreme of your revenue month over month. So it's kind of a picture like an 8% going up and to the right. But then when you get market penetration, when you perfect your product or your company and your idea has some marketing behind it, the revenue chart shoots up much, much straighter up instead of to the right. So it goes from about an 8% monthly climb to, as a figure of speech, maybe a 40% monthly climb.

05:34 But there comes a point where the world catches on to that product line or your company's idea, competition springs, and it's pure supply and demand. There will come a time with every product line, and you can go through the biggest companies in the U.S., they've all gone through this, to where when competition comes, that graph of up and to the right is going to go from not so steep to very, very steep while you're growing aggressively. And then again, it goes back to not so steep. Sometimes you can keep it growing into perpetuity, but most of the time, the reason they call it an S-curve is the top of an S. At the very top, it actually dips down again, and that's where you better reinvent yourself. And so the definition of an S-curve is exactly what we're talking about here.

06:23 It starts out slow, and then it goes almost straight up in the air because it's hyper growth, and then it flattens out again, and inevitably it will drop down and continue to drop. So the old saying, what goes up must come down. It happens in businesses. And we see that in the financial world, too, for folks who are basing their retirement on having all their money in stocks. And it's great when the market's going good. They have plenty of income, but if the market goes the other way, some people put their retirement in jeopardy, Ken, and we try to, and that's why we do the show, try to tell people there are ways where you can diversify. And when we talk about diversification, and the main reason I wanted to have you on today, and besides a great story about Corning, and anyone who has an iPhone or one of the kind of devices like that, that's gorilla glass right there, the glass on that. Now, some people would argue you drop it, it still breaks, but it's harder to break it, isn't it?

07:12 Right. Well, what do they call that, planned obsolescence? I mean, if it was literally unbreakable, Corning's S-curve would be sharply down. That's right. Yeah, you have to, like, well, tires. Tires have to wear out and have to go flat, or the tire companies would go out of business. But let's talk about this. When we look at the overall portfolio for folks, we talk about something called diversification. And diversification just means having many streams of income from many different places. And you have something that you call it the income store, and it's a way for people to invest in money-making websites. Yeah. What actually happened is we go back almost 20, 22 years when we first started growth consulting. We would walk into a company, in essence, ask them 30, 40 questions, assess where they're at, where they're going.

07:58 And we were pretty successful from the mom and pops. We've had conversations and helped out McDonald's and Harris Casino. And that was a blast, and we did very well. But five, six years ago, we made a company decision that when it comes to growth consulting, we believe in location, location, location for a retail type of business and for any type of business. And so the biggest location or the biggest intersection or the biggest highway in the world is the Internet highway. It has the most traffic. So we made a decision about six years ago, not having anybody on staff that was a web developer, web designer, web programmer, that we were going to go into growth consulting only with websites. And so six years ago, we began partnering up with real authority figures across the country, whether they're a pro athlete.

08:51 We have GMs from NFL football teams to very, very fast-growing entrepreneurs that their names are somewhat famous today. And we would partner with them, build them an authority website very similar to WebMD. And in two, three years, these sites started making some pretty good revenues. And we're now sitting on anywhere from a couple hundred websites up that we share revenue with, with some fairly famous people. Well, that led into some of these affluent, famous people calling us up saying, hey, this is phenomenal. I would like to invest in another one of these for my wife or my daughter or my friend. And unfortunately, we would have to say, you know, hey, we can't take your business. We build authority websites.

09:38 And the reason they work is you're an authority. You personally are an authority. And you write great content. You have great information when we interview you. But a couple years ago, we were getting that over and over and over that people wanted to just write us a check and then split revenue with us from a revenue-generating website. So about two and a half years ago, we said, you know what? We have to go into the web brokering, web buying, and web management business. And so today what we do in one sentence is we take people's money, we take companies' money, we take private equity firms' money, and we will literally fly all over the world to find the perfect website for them to buy with their money. And we will only allow them to pay two times earnings.

10:26 So if somebody says, hey, Ken, I have $100,000. I don't know what to do with it. They give it to us. I've gone to Romania. I've gone to London. I've gone to Canada. I'm getting ready to go to Belize. I'll go anywhere. If I find a website that has had very consistent and growing revenues for years, and I will only pay two times earnings, so when we buy that asset, we just bought that person or that company or that private equity firm an asset, producing a 50% return. If you buy it two times earnings, you get a 50% return. And then what we do is we lock that into a consulting performance agreement. We split the revenues 50-50, and then we'll literally guarantee for them into perpetuity, which is possible with this. It's an intangible asset. It can be done. We'll guarantee a 15%, 18%, 20%, some way, sometimes up to a 22% return depending on the industry and the website.

11:18 So we take people's money. We buy assets that have been producing for a long time. We add them to our mix of 400-plus revenue-generating sites that are seen by over 100 million people, and we can actually guarantee them on three different levels. So we're having a blast, and it allowed us to hit the Inc. 5000 list, and I just heard we might have hit the Inc. 5000 list again. Well, it's a good idea to diversify people's portfolio. I think you get it away. We talk about correlated and non-correlated assets, correlated assets to the stock market or stocks, bonds, mutual funds, anything that's tied to interest rate environments. And then you have non-correlated assets where you can produce revenue from other streams. And it just makes a lot of sense for people to at least examine that, and that's why I wanted to have you on. But one of the things you shared with me when we talked in person in Hollywood was WebMD,

12:07 the site that a lot of people go to and hear about. Ken, how much does WebMD make in that kind of revenue every single year? Sure. As of last year on MarketWatch, they brought in $532 million in ad revenue. The year before that, they did a little bit better. I think they're on track this year for $580. So that is the one website we have studied the most. We have found a way to somewhat reverse engineer how they're making some of that revenue. And it's a powerhouse. That website never gets affected by a Google algorithm or a search engine algorithm change. And it's because they have 505 doctors that write quality content every week, every month. And it's just a phenomenal website. So that's what we modeled, and we've had quite a bit of success doing it.

12:55 But it really goes to prove that the people that said you can't make money on the Internet never consulted with a company like WebMD, I guess. That's true. I mean, a half a billion dollars of annual revenue from a website. Every time I say it, it's hard for me to believe. And your website, Ken, what is that? Pardon me? What is your website? You can find us at IncomeStore.com. IncomeStore.com. And, folks, again, his name was Ken Courtright, joining us from Chicagoland. Ken, you have a fantastic organization there, and we really appreciate you coming on today to tell us about the different kind of streams of revenue that exist today. Yeah. Thanks for having me, Coach Pete. And, folks, we'll be right back after this.

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00:00 And welcome back in, folks. Today, we have Peter Leeds joining us from Toronto, Canada. Now, he's a financial analyst and investment personality who specializes in mass market investor education. And no better person to go to than something that has hit the mass market in people's minds, at least. People are hearing about this topic everywhere I go. When people find out I'm in the financial world and have a radio show, they want to know if I've heard of bitcoins. And Peter's going to talk about the good, bad, and ugly of bitcoins. Peter, welcome in. Thank you. Now, let's talk about it from square one. Let's pretend that somebody's listening and we run into this also. People have never heard of bitcoins. What are bitcoins, Peter? And why have they taken such an approach here? Or why are they coming on like a storm in the financial world?

00:47 Well, if you think about right now paying a bill online with your conventional bank, they have a bank of computers that keep track of that and make sure that the money is going to the right places and that you're paying the right bills. Now, imagine if all those computers are spread out all over the world in all different countries. And that's exactly what it is. It's a decentralized network of computers all linking in to allow bitcoin to exist. And now, bitcoin itself is just a reflection of value, kind of like a coin that increases and decreases in value. And people, you know, so far it's been bitcoins have been increasing in value. So people think it's a good idea to get an investment in this. But that is sort of peaked out when it hit $1,100 and it's coming back down since then. So people are starting to realize, well, wait a minute.

01:33 What is the value of this based on? And besides it being based on what someone else is willing to pay you for it, there's no underlying inherent worth. So it's a way to buy things. It's a currency, I guess, but it's not a physical currency. In other words, you can't carry it around in your pocket. It's electronic currency, isn't it? That's correct. It's a digit in your electronic computer digital wallet. It's, you know, your computer program that keeps track of it. And I liken it to a pile of dirt where if someone is willing to pay you twice for your pile of dirt than you paid for it, then sure, it's a great investment. But at the end of the day, you know, reality sinks in and you're left there with a pile of dirt. Yeah, and so I know you've compared it. I saw an article where you compared it to like the gold mines of the past, the bitcoins. Yeah, exactly.

02:19 I mean, it's a lot like the mania with the gold rush. It's also a lot like, you know, the marijuana stocks right now, people are overpaying for them or the Dutch. Tulip bulb mania from the 1800s where people were paying ridiculous prices for tulip bulbs. People who got involved with that early, they probably did okay financially. But at the end of the day, the moral of the story is that the mania eventually ends, the attention eventually ends, and the whole thing comes crashing down. Yeah, and one of the exchanges is having trouble right now. I guess there's a couple different exchanges where you can trade your bitcoins. I guess you can buy them on there too, but one of them basically shut down. Yeah, absolutely. There's about two-thirds of the activity in Bitcoin takes place in China, and that is also where the majority of the exchanges are located.

03:06 Just like a stock exchange where, you know, you go on there, you can buy and sell Bitcoin. Mt. Gox has basically disappeared, but not only has it just disappeared with people's, you know, they held people's money that's now lost. There's been a rumor of $350 million American dollars worth of Bitcoin, 140,000 of them, just disappeared. And the thing is, first of all, nobody's quite sure yet what happened to that, you know, I'll call it money. But also, how do you prosecute that? Or what regulatory body do you go after for them to go after and try and figure out what happened? And the short answer is that it's not even decided yet who's in charge of it. And basically, that money is just lost. My thing about Bitcoins has always been, I had a client who had a teenage son who wanted to take his college education money out of the stock market and put it into Bitcoins a couple years ago.

03:58 Or was it about a year and a half ago now? And that's when I first became, I didn't know what Bitcoin was. So I said I had to start researching it. But my main complaint, Peter, has always been, you know, if there's no regulatory body, what's to stop the people who are in charge of Bitcoins from just keep, quote unquote, printing more or adding more to their pile and telling you that everything's fine? I mean, it doesn't make sense to me. Well, there's, you know, it's hard coded into the system that there can only be 21 million. So there's a finite supply. But the problem is that people now are worried that, you know, if you're a smart computer programmer and your grandma's basement in Estonia or somewhere, you figure out a way you can create more Bitcoin or you can double spend them and stuff. And it puts the whole system at risk because there's no country backing it.

04:48 There's no one keeping an eye on it to make sure that it's all legitimate besides some of these early computer programmers. But the thing is, people are hacking around this stuff and trying to figure out ways to take advantage of the system. So the average consumer really, I mean, they are in the dark when it comes to how to properly buy Bitcoins. And then once you buy them, you have to find someone who will take them in return or in exchange for something else. Yeah, exactly. I mean, there's, you know, some of the legitimate businesses are taking them now, like some casinos and Virgin Atlantic Airways and stuff. But, you know, what I'm arguing is that we're going to start to see the beginnings of an attrition rate where merchants go, you know what, this is not a good idea. It's not worth it anymore. And they're going to back out of accepting Bitcoin. And that's something that, you know, it's so early in the game that you haven't seen that yet.

05:34 But this in the coming months is going to become more and more common. Now, you're in Canada, and I know Canada has a taxing body. They like to tax and make money. The government does. And I know in America, any transaction, like if I buy or sell a stock, I have to report that sale if I made money to the government. Is there a regulatory or way to look at the profits people are making in Bitcoin? I mean, there's no taxing authority that's really looking at this right now, are they? Well, I'll tell you what, Pete, that I'm an American and a Canadian citizen. So I'm dealing with about 85 tax lawyers from one month to the next. So, and, you know, the problem with the Bitcoin is that it's not beholden to any country. So who's in charge of it? I mean, it's not under the umbrella of the American taxation government body.

06:20 It's not any specific country. It's absolutely untraceable, and it's not linked to any specific country. So you've got all this legal sort of climbing up this legal hill, first of all, to try and figure out, first of all, can you tax it? And if you should tax it, so far, Washington state is the only state that has come out and said, okay, this is actually money. Whereas the other states have not got to that point yet. So when they say it's money, then you get taxed on it in certain ways and you have to report, there's all these requirements, regulations that you have to, you know, tell the IRS and et cetera. And this is something that's happened so far in Washington, but it won't be long. I mean, regulation is coming down the pipe and eventually the government will do what they do, which is regulate and tax.

07:06 Yeah. Yeah. And folks, we're talking to Peter Leeds. He's a widely known financial analyst, and I consider him a pretty good expert on penny stocks and bitcoins. And we're talking about this topic here, which is very unusual topic in the money world because it's come on like a storm. A lot of people are, you know, bragging about the profits they've made, especially younger folks. And we're talking about bitcoins. And I'm trying to warn you a little bit about before you jump in with both feet, if you ever decide to buy bitcoins. Peter, are these being sold a lot or other people out there making commissions when they sell them? Or how are these, you know, how are these transacted? Well, you know, for example, with the casino example I gave you earlier, yeah, they'll say, yeah, we'll buy bitcoins. But they're smart about it. They take a little bit of a rip off the top and then they convert that money to American dollars right away.

07:52 So if, you know, the bitcoin is worth $1,000, they'll give you $950 for it. They'll take it and they'll sell that bitcoin right away and convert it. And that's because they're being smart about it. That way they're not vulnerable to the volatility. A mistake would be a merchant who sells their goods, you know, and bitcoins at a certain price because, and this keeps the bitcoin because eventually bitcoin can drop in value. And all of a sudden you've inadvertently given a sale for your product. You've sold that, you know, 50% off because the price of the bitcoin has come down, you know. You know, and it's a parallel, but it's not a real parallel. But, you know, it's sort of like gold. I mean, gold skyrocketed up in price and gold was only worth what somebody would pay you for it. Of course, gold always has a value. It has an intrinsic value because it's gold. But in bitcoin, you can't melt a bitcoin down and make a ring out of it or anything.

08:39 You're trapped with an electronic currency. But, you know, gold skyrocketed and then came back down. And like you said, when people exchanged a good for a service and they took gold, they try to monetize that gold right away by selling it to somebody else. Yeah, absolutely. I mean, there's a lot of countries all over the world that will accept gold and they'll recognize it. And, you know, if you look at the American dollar, it is just an idea that we all agree upon, but it is backed by the American GDP and the entire nation of America. You know, so there is some kind of concept of value underlying it. When you talk about bitcoin, there actually is nothing there, not even the concept of the GDP. It's all about, you know, it's worth what someone else is going to pay you for. And that always makes me very, very nervous. As a speculative stock investor, it makes me incredibly nervous about it.

09:28 And, you know, this is the type of thing that it could hang around for a while or it could disappear tomorrow. And, you know, it's all about dealing with, you know, that in the best way. Like, you don't want to be the one left holding the hot potato, right? Yeah, yeah. And that's the thing that's worrisome, too, because, I mean, you know, like even the U.S. dollar, it was backed by gold for a while. Now it's backed by the strength of the U.S. government. But the bitcoin has nothing behind it. Absolutely. And, I mean, you're just starting to see some of the vulnerabilities now and the risks whereby, you know, 140,000 bitcoin go missing. And then people go, well, wait a minute. How do we get that back? And you realize, okay, maybe it's not so bad to, you know, be linked into a country and pay banking fees and trade in American dollars. Maybe the concept of the digital currency, which at first the benefits were that it was untraceable and there's no fees on it, no banking fees, no taxes.

10:21 Those are the benefits, but they also then eventually people realize that those are actually the negatives. There's a purpose for taxing and regulating and paying banking fees, you know. And it's about, you know, being able to recover the money if you lose it and knowing that someone is keeping an eye on it and that sort of thing. Yeah, yeah. Well, it's a very unique concept, folks. And, again, bitcoins are, you need to approach them with caution if you, and especially if you have children or grandchildren who are getting all excited about this. Peter, what would be the final piece of advice you'd give anybody out there who's talking to somebody who is excited about bitcoins or themselves maybe are thinking about jumping in and buying bitcoins? If you're hearing about anything in the mass media, it's too late. People are getting early. They're going to do fine. People are getting into bitcoin now.

11:06 You're making a mistake. Yeah, good point. Folks, again, his name is Peter Leeds. He's joined us from Toronto, Canada. Peter, thanks for your time today. Anytime.

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00:00 Well, today's guest is what I consider one of the national experts on Obamacare. He has analyzed the law through and through, and I wanted to talk about today some of the myths of loopholes in the Obamacare law, because everyone's out there, I've seen people trying to promote ways to get around it, and gosh, believe me, if there were ways around it, everyone would be taking advantage of that, especially ones who are having to pay for it out of their own pocket. Of course, we're going to join right now with a nationally known expert. You've seen him in Wall Street Journal. You've seen him on MSNBC, Bloomberg, and all sorts of radio programs across the country. It's the U.S. code that was supposedly going to protect people from Obamacare in the U.S. code number 42, but you've analyzed that, and it really doesn't, does it? Well, yeah, that's correct, and the reason people are confused by it, as people may remember,

00:53 they rushed through that law, and they made a lot of mistakes in the law, and that's one of them. I'm not a lawyer, but I've talked to any number of lawyers. I've talked to people on both sides of the question, those who support it and those who don't support it, and I think Obamacare is the newest way for lawyers to make money because there's so much in the law. But in that particular case, people are reading it, and if you read it one way, it says, yes, you don't have to buy the insurance. But if you read it the way, and as lawyers explain to me, it's the intent, and that's what the courts will look at.

01:38 And if people rely on that, on what some people are saying about it, they're going to end up in trouble. Well, the president has eliminated all but the individual mandate from the law as we speak, and who knows, he may, as it gets closer to election time, even eliminate that by the time this all is said and done. But right now, the law is clear. You must buy insurance or pay the penalties. I wish you were otherwise. I don't like the law as much as anybody doesn't like the law, and I've had to wade through a

02:25 tremendous amount of it. And at this point, people who rely on that interpretation are leaving themselves open to liability. So I'm strongly urging them not to rely on it. And the people I talk to on both sides of this question have said it any number of times. What can I say? Some people are making a lot of money and a lot of bruhua about that section of the law. And I've been at Washington hearings. I've been down to Washington on the point. And it's just not there.

03:11 You must buy the insurance unless you're getting it from your employer, unless there's certain exclusions. And by the way, there are a heck of a lot of exclusions now. You're just leaving yourself open. What can I say? It's there. It's the law of the land. And I don't think it's ever going to be repealed, by the way, even if the Republicans take the Senate this fall and hold the House. They don't have enough votes to override the presidential veto. And he will veto any sort of changes in the law.

04:02 It's sad. So let's talk about, I mean, you are, of course, the COO of Information Strategies. And I know as a commentator and reporter, you've interviewed several thousand businesses over the years. I mean, I'm sure you've talked to small, medium, and large-sized business about this law. What do you think the true impact is going to be? I mean, you know, nothing's for nothing, Don. So if the government's making a company pay for health care for all the employees and they weren't doing it before, something has to give. Absolutely. And what's going to give are small businesses. The president recognized the political aspects of it when he postponed, unilaterally, by the

04:48 way, and illegally, in my opinion, an opinion of a lot of constitutional lawyers, the mandate for the companies between 51 and 100 employees. A lot of what the president has done, if people went to court on it, would be declared illegally because the law, while the law gave the government tremendous latitude, there are certain things which the president has unilaterally postponed that clearly indicate the impact on small business. And it's going to affect it.

05:36 It's going to affect companies. He's hoping that with this mandate, people, companies will start hiring employees. But every study that I've seen, despite what the government says, indicates small businesses are not hiring that 50th employee. A lot of businesses that were considering offering health care to their employees are simply not doing it. It's cheaper to pay the penalty than it is to provide health care insurance if you're not already doing it. And the other problem is the cost of health care insurance went up in 2013 for most small businesses,

06:27 averaging between 13% and 23%, depending on what survey you take. And that's a big hit for many small businesses. You've been in a recession. We're supposedly out of a recession. I'm not necessarily agreeing with that point of view. And small businesses are just faced with almost a Hobson's choice on this issue. And for many of them, the decision not to offer health care insurance or what is even worse, in some cases, saying, well, here, I'm going to bump your salary up $1,000.

07:13 Go out and get your own insurance. And when that happens to people and they see the cost of insurance, even on the exchanges, if they can get on the exchanges, clearly indicate that this law has been bad for small businesses and for people in general. And despite what the government might say, the net effect. It's interesting. The government is claiming that health care spending, the rate of increase has slowed and fails to take into account the impact of consumer-directed health care, which was projected three years ago to fully impact in 2013.

08:04 And no one ever mentions we've gone to consumer-directed health care. Major companies like Deere, GE, et cetera, have all gone to consumer-directed health care programs, health savings accounts, health reimbursement accounts, et cetera. And that's having a major effect because people are starting to realize the true cost of health care. And, by the way, the law is going to make it even more so because many of the exchange insurance policies available have deductibles of $5,000. That's a heck of a big deductible.

08:50 And the co-pays have gone up. Excuse me. Well, here's one of the things that I was wondering the other day, and I saw this come across the newswire, and I'm sure you're familiar with this, is the threat by the Obama administration saying to businesses that, let's say a business has 52 employees right now, and to get under that 50 threshold they lay off four people. Well, Obama is going to, through his attorney general and whatever else he has out there, tell the company that they're going to have to prove that the reason the company got rid of four employees was not because of the health care. So if you go below 50, you don't have to cover them. And so it's almost like, I mean, this is a can of worms that we have no idea where it's going to end. Absolutely.

09:37 I saw that as well. And, again, these are threats. The attorney general has used the threat in a great many cases, not only for this but for other things as well. They're trying to use the impact of government and the IRS. The scandal, by the way, I think the worst scandal the IRS did with the conservative 501Cs, it's just the tip of the iceberg of how they're doing it. And that particular one is going to hurt. But any company can demonstrate layoff for employees.

10:26 If the money is not there, you can't pay the employees. Excuse me. So, yes, I saw that as well. I get worried about that. We should really worry about this administration and how it's turning the laws upside down in order to accomplish its goals. And when you have to coerce American people, hopefully they'll at some point stop and say enough is enough. Well, it's just amazing, Don, because let's just say here we've got about 30 seconds to go and I just want to get your quick opinion on this. But what if George Bush was doing this?

11:13 What do you think the media would be doing? What do you think the Democrats would be saying if George Bush was doing this? Oh, my God. They'd be saying the next coming or the first coming of the Caesars if Bush was doing it. But as a member of the media sometimes I cringe at what we do on occasion. I'm not a conservative. I'm an online newsman. I sit on a medical marijuana board, a nonprofit, so I can't be considered too much of a conservative. But I do feel that the media has not done its job of really holding this administration's toes to the fire.

12:00 And it's a shame because they're doing a disservice to the American public. Well, you know, the difference between, I guess, a Democrat and Republican, conservative or not, is a conservative just smokes a smaller joint than a liberal does. I like that one. I'll have to tell that one at the next board meeting. Well, you know a conservative is a liberal who was mugged last night. Well, folks, that is a great interview. Don Mazzella, again, joining us from New Jersey. Don, we're going to stay in touch with you and see what happens here going forward. But it's just a confusing world we live in, isn't it? Yes, but I'm convinced the republic will survive. Yeah. Well, folks, you heard it right from Don. Don, thanks a lot today.

12:45 And, folks, we'll be right back after this. Let's do it.

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00:00 Folks, a couple weeks ago I had a segment where I was talking to Ed Lyon, who's a tax attorney and a fellow certified tax coach like myself. And we were talking about the Obamacare pocket guide, all the things that you need to know about health care, and the 72-page basically manual about how to make sure you do it the right way, how you file the right way for health insurance. And number one, the reason we did that is because the government is forcing upon us things that we don't want. And I hinted that that wasn't the only thing. That was only the tip of the iceberg. And unfortunately, today, we're going to go over one of the other pieces of the iceberg as far as government regulations, and it's called the EPA, the Environmental Protection Agency, which has been launching hundreds of regulation missiles at the general public that we haven't even seen yet.

00:52 They're stealth missiles, and they are going to start landing and exploding on your checkbook and retirement balances. And today, I've got Brian the Plumber, Brian Mountain, who is an expert in plumbing, but he also is an expert on what's going on behind the scenes at the EPA, because Brian is having to follow some of these regulations that are coming down the pike. Brian, welcome in. Hey, how you doing, Coach Pete? Good. Now, let's talk about this. I mean, I don't want to scare people, Brian, but when you and I were talking the other day, I said, we've got to have you on because there are some things that are coming that people don't realize. Let's start with the simple thing. Every house has something in it that makes sure that cold water comes into the house, but what comes out of the shower in the morning? Cold water? No, we've got hot water, hopefully. So what is that thing called, Brian? Well, we've got a hot water heater that heats up the hot water.

01:40 Before I even start, here's the thing with the EPA. I am not a code anti-code, a code anarchist, or however you want to label it. These things are over and above. If you don't have protection or don't have a code, you have Haiti when the first earthquake or typhoon that comes through. The whole place fell apart. It's country down. Right, right. Yep. And so I'm not anti-code. It's just what I think we're addressing here today is just an overreach by government on stipulations, which we'll get into in a second, I'm sure. It's going to come down to your wallet and pocketbooks out there. Well, now let's talk, because when we were talking, you said that there's something that, you know,

02:25 because you don't need a hot water heater every day, the average consumer won't find out about this until they need a new one. And therefore, the outrage will be sustained over a longer period of time by shorter amounts of people. In other words, not everybody all at one time. Right. Staggered. So there'll never be an uprising that there needs to be because people aren't going to be hit all the time. And by the time the regulations are in there for a couple of years and your hot water heater goes out, that's when you as a consumer are going to find out just what an effect the EPA is having on your wallet. So let's start with the hot water heater and what you told me, and then let's get into the new regulations for piping, and then let's also talk about some of the other stealth regulations that are, again, a regulation from the EPA is another word for a tax, isn't it? Yeah, absolutely. It all trickles down.

03:13 What you're talking about here is kind of like out of sight, out of mind. If you do, you know, you're not staying up on the, the common person is not staying up on the regulations on water heater. That's my job. And I am usually the bearer of bad news. And very simply, you know, I hear it every day from customers. Hey, I just put a water heater in six years ago and it didn't cost me. It cost me half of what you're trying to charge me. Well, look, you know, six years ago you didn't have the thermal expansion tank regulation. You didn't have the adherence to the different materials that you have to use and that sort of thing, which in the first thing out of their mouth is, well, we got by just fine without it. Well, you know. Government doesn't think so, huh? Exactly. Government's trying to tell you how to live again, right? Right. So here we go. So, you know, what we talked about before, folks, is that anytime you hear the word code change or regulation,

04:03 that is, you might as well just think in your head when you hear regulation, it's going to cost you money. Because companies like us, and we're not alone, every company does the same thing. We get a code change or a regulation we have to follow. We get the cost of it. We put a nice little bow on it, and we defer to the customer. What I try and tell people, well, maybe you have a business where you can defer the cost. But eventually what it does is it trickles down to the person that doesn't have a business, that can't defer the cost, that ultimately has to pay for it, which ironically is the same people that these politicians that enact these codes swear to protect. We call that the domino effect, and we're not talking about pizza, are we? No, we're not. So, you know, and speaking of that, whenever I go to a restaurant and they've changed the menu, it's new and improved, or it's a different kind of material.

04:50 It's all nice and, you know, very elegant menu. Guess what I know is going to happen when I open up that menu? The prices are going to be higher. Sure. And so that's what happens when you get a new regulation. Nothing the government does is a way to reduce money. It doesn't seem like it's always more regulations mean more money out of your wallet, less money for you to spend on things you want to spend on. So the hot water now, the heaters you said now, with somebody, if they're used to paying like $500 for a hot water heater, it could be up to $2,000 by the time all the different regulations are done in a couple of years. Yes. Well, this – now, what the government admits to and what really happens is two different things. Well, sort of like health care, right? Sure, sure, sure. Hey, if you have your current hot water heater now, you can keep that hot water heater, right? That's right. Until they say no and everyone take their current hot water heaters out. Brian, I don't trust the government these days, so we need to be careful about what we joke about because maybe it will come true, right?

05:42 Right, right, right. Well, what the government is saying is that – this is their numbers – that it's going to cost to get up to compliance here with the new codes and the new efficiency ratings. It's going to cost an average of $120 to $143 per water heater. Now, the thing is, is that's the government numbers. And don't forget, folks, we're like every other business, mark up those costs. And that is what the government admits to, which we already talked about. It's probably not going to be the case. What I'm hearing industry-wise from manufacturers is that this is going to increase the price, our cost, of $500 to $700 for the unit itself. Now, that does not take into effect the retrofitting that's going to have to happen on these – not to get too particular on them, but on these different devices, you're going to have a good bit of retrofitting that's going to have to happen to go back.

06:36 To make the new product fit, in other words, right? Yeah. And you want to make sure that's done right because you don't want the guy coming in with a big hammer saying he's going to make it fit his way, right? You want it done right. That's the thing. Well, we always have to adhere to the preexisting code, and that adherence usually ends up ultimately costing money, too. Well, one of the main reasons – in other words, they're going to make these new hot water heaters have gigantic jackets on, so they're going to be so insulated. They're going to be insulated to the point where it's just unnecessary insulation a lot of times. Well, they're talking about that, but, I mean, trying to get a prototype idea out of some of these, they are keeping it real close to the vest. Right. And they're not letting anybody know, especially technicians, yet because they – honestly, I don't think they have a prototype of it. This is all new development stage, and this regulation is going to take into effect in 2015.

07:23 That's when the mandate is. So they are really running full time here trying to come up with something. I love that word mandate when it's come to government. We've heard that way too much with the health insurance law, by the way. Right. Well, yeah, I hear this a lot. If it's such a good idea, shouldn't it be voluntary? Yep, yep. Well, the government knows what's best for everyone, Brian. You know that. Now, folks, we're talking to Brian Mountain. He's a licensed plumber in North Carolina. He's actually my plumber. He's come and done a lot of work for me. Now, Brian, at my own discretion, I had you come in and put some low-flush toilets in because they flush real good and they use a lot less water. But the government didn't make me do that. I did that on my own, and now I'm saving money on water. Right. That is my whole philosophy on this.

08:10 You can create incentives through insurance companies and tax credits and that sort of thing to incentivize people to do these things without the IRS gun or a mandate. Right. You know, and you probably get more people to comply and less fight about it. There's enough incentives out there, and a lot of these things do make sense. Right. You know, the difference is what I don't like about it, and I'm sure Pete feels the same way, is the coercion. Yeah. Yeah. Now, because you're on the inside of this, you see what the regulations are coming down from the EPA. How many different regulations are coming down right now that people don't even realize? Well, just in the— I mean, probably hundreds of them, right? Well, the EPA alone has released 1,300 new regulations this year alone, which translates into literally thousands of pages.

08:59 1,300 new regulations, and here's what I've seen with regulations. It's always an increase in tax. I mean, they call it what they want. A regulation is going to be costly for someone, Brian, and if it's costly for someone, they are going to pass that expense down to the end user, the consumer, aren't they? Right. That's what I was talking about, cost affirming. I mean, this is economics 101, folks. I mean, this is how it's been for the free market and capitalism. This is the downside or upside of it, however you want to look at it. Well, the way it fits into our show here is that the more money the government is making you pay, the less money you have to do things you want to do in the future. And now, one of the other things I wanted to cover here—we've got about a minute left, and I think we can cover it in a minute—the government has another regulation about sprinklers in houses, correct? Right. Well, they're trying to make this in North Carolina.

09:46 This is more of a statutory-type code. Okay. But they're mandating, but they're hoping by 2018, any new construction residential—and when I say this about North Carolina, expect other states to follow suit. You hire a building contractor for a residential house that you're building, it's going to be mandatory that you have fire sprinkler systems. Okay. It's residential, right. And you and I were talking about that. It's not a bad thing to have sprinkler systems, but you don't need the government telling you what to do. But when you looked at the numbers, no one has ever passed away that had a sprinkler system in the house because of fire. No, it's 100%. No one has ever died on a residential fire when it's been sprinklered. Not only that, but see, if you show people the facts of it and you're building it, building the house, you're going to escrow all that added cost into the—

10:36 The actual loan itself. —into the cost of the house right over 30 years. And say it costs you $10,000 to put it in. Over the course of a 30-year loan, that's not really that bad. Nope. Not only that, but you have the—of course, it saves lives. The data proves that it saves lives. Well, how much is life worth? I think it's worth more than $10,000. No, yeah. But again, it's still not—I mean, you're—as a libertarian-type view here, it's fine to make it available and suggest people do it or show them the numbers like you're talking about. But to make people do something is not the American way. That's not what we're here for. That's why we left England 200 years ago, right? You got that. So because we got tired of being told what to do. And I'm Portuguese, so I wasn't in England to begin with, Brian. But my—but my—you know, I'm just talking about the reason why our country was founded is because freedom of choice and individual rights for all.

11:26 And we used to pledge allegiance to the flag back when I was in school. Right. Well, I was called—you know, we talk about liberty, and sometimes it's misdefined. Yeah. And I always think of liberty as being the maximum absence of coercion. Yep. Good point. And if you—you know, these are the things—we're getting back to the home sprinkler. If I come out as an insurance carrier and I say I'm going to save you 13% to 20% on your insurance over the lifetime of the home. Because you have a sprinkler. Yeah. And what's more important than your family, your kids, your wife, and the statistics prove it? I mean, I think if I explained it to people, 99% of the people out there would voluntarily do this. But we just don't want to be told what to do anymore. I think we're tired of that. We went through that at least 18 years, a lot of us, when we were with mom and dad. We were told what to do. Right.

12:11 So we just want to have freedom of choice. And I think insurance companies would love this, too, because it's less money they have to pay to replace the house. So if the sprinklers come on, it stops the fire from spreading. Sure. It saves them money. Municipalities— Saves lives and material. Firefighters save lives. Yep. Saves lives on firefighters. Firefighters' lives, too. That's right. Municipality costs on putting out fires is very costly, sure. So there are some good regulations or good ideas behind some of the regulations. Let's put it that way. But they're using the wrong approach to get it out to some of the people. What do they say about good intentions, Peter? Oh, yeah. Well, the best intentions, the best laid intentions always have some hidden consequences that you don't think about. Look at the health care law. Right. Now, you have a special offer for our listeners here in the Research Triangle Park area, the Raleigh, Durham, Greensboro, all the area around here. What's your offer for the folks? People get in contact with Coach Pete, and they can just give me a call.

13:00 I got a $25 gift card. That gift card is transferable. In other words, if you don't need any plumbing, you know somebody at church, at work, or any golfing buddies needs plumbing, go ahead and give it to them. You can give it to them as a gift. It's free of charge. It's worth $25, and I'm happy to do it. They can get a checkup on their plumbing system. They can see if they might need a new toilet or anything like that. Anything, time, and material. Now's a good time to, by the way, with these regulations coming down the pike, it's a great time to replace your hot water heater if you're close. Yeah, that's what I was, that's coming in 2015. That is going to absolutely charge. Probably double the cost, won't it? Yeah, $500 to $700 we're looking at. And one more thing, folks. If your water heater is in a vulnerable area like a finished room or a crawl space or an attic, 9 to 11 years is average on a water heater, and the best thing to do is be proactive before it goes just from a simple secondary damage.

13:52 Brian, why do people, why do builders, why does anyone, why do architects put a hot water heater in the attic? Okay, that's, everybody asks me that all the time. Heated square footage. That's what it is. Yeah, but I mean, you know, we've heard this story. People will come home from a vacation and walk in the house and it's raining inside because the hot water heater broke or had a leak when they were gone, and the pipes keep filling it back up. They think, you know, the house doesn't know, it keeps filling up what it thinks is a hot water heater, but instead it's just dumping it all in the house. And what's worse is people think they're fine because you have a water heater pan underneath the water heater. About half the time it works, half the time it don't. Folks, a $25 gift certificate, if you call right now, and I think it's invaluable these days to have a proactive approach towards all your plumbing needs before the regulations kick in and cost you a lot of money.

14:39 The number to call right now, call us and we'll make sure Brian gets your number and gives you a call back and gets you that gift certificate. It's 800-661-7383. 800-661-7383. Brian, thanks for your time today. Oh, thanks for inviting me in. Folks, we'll be right back after this.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 And, you know, the economy's been picking up, and so has the real estate market since 2008 when we hit a rock-solid bottom, and it's starting to recover. And a lot of people now are looking at houses or looking at moving up into a bigger house or maybe even downsizing. So when it comes time to buy or sell a house, you need somebody on your side, somebody who's going to help you. And a real estate agent can be your best friend or, unfortunately, sometimes your worst enemy if you don't do a good job of picking them. And I've got a book in front of me. It's Inside the Cell, Real Estate Top Agents Reveal Unspoken Secrets and Dangers of Buying and Selling Your Home. We're going to go live now to Washington, D.C. area and talk to a brother team, Hans and Steve Weidler. And they have been ranked in the top 100 of real estate agents out of 1.1 million in the country, and that was by The Wall Street Journal.

00:50 Guys, welcome in. Thank you. Thanks, Coach. Now, let's talk about this. I mean, it is confusing because if you don't do real estate every day, you can miss little things, and that's why people need to get an ally on their side. And let's talk about this before we go any further. There's two different agents in a cell many times. There's a buyer's agent and a seller's agent, and I think a lot of people out there try to do it themselves because they think they're going to save money. Does it cost any money if you get a buyer's agent on your side? Well, we – you know, that's an excellent question. And, you know, where we always try to advise our clients to start out in the process, especially if they're new, is just, you know, the old rule, follow the money. And it's a little bit confusing in a typical real estate transaction because a seller hires a real estate agent typically and pays that real estate agent a commission.

01:44 That's the listing agent, and the listing agent typically turns around and pays a portion of his or her commission to the buyer's agent. And so the buyer, in effect, doesn't pay their own broker anything directly. It's paid through the seller's side. So right there, there's a little bit of a confusion because, you know, even though your buyer's agent is theoretically working for you and protecting your interest, he or she is being paid by the seller. That's the first step of confusion. Yeah, we see that a lot. So when we're talking about pitfalls, when people go to buy a house, what pitfalls should the consumer avoid when working with a real estate agent? Well, you know, one of the big ones, you know, stems from what Hans just explained, which is that structure.

02:38 You know, if you think about it from the listing agents or the seller's agent's perspective, if they're able to engineer their transaction in a way that a buyer agent broker is not involved, they can effectively double their compensation. So right there, there's a huge perverse incentive in the structure that incents the listing agent not to actively market the property to other agents if their business is set up to accept that type of what's called a dual agency where the buyer is not represented by a separate buyer broker and is only represented by the seller's listing agent.

03:24 Well, I like the way your book's laid out because you were talking about that, the dual agent, and you've got in the book, here on page 25, Tales from the Trenches, a dirty dual agency deed. Now, what is that? Well, I mean, there are stories, you know, we could tell. There are a whole bunch of stories you probably couldn't even put in print. But, you know, there are times, for example, when, you know, if you're representing a buyer, for example, and a seller's agent, a listing agent, has an offer that another client of his or hers has written, sometimes they do things that are not necessarily in their client's best interest. So, for example, they stop communicating with the other buyer's agent. And we, you know, we have stories where, you know, we have a client interested in a specific property.

04:14 A buyer client. A buyer client interested in a specific property. We try to get a hold of the seller to schedule an appointment to show it. Meanwhile, the seller is giving us misinformation. The seller's agent is giving us misinformation. And they end up ratifying a contract before the seller even knows that there's another interested party in their property. Wow. I mean, that's, you know, that's, you know, that it's rare that that happens, but it does happen. And it's extremely unethical. And the challenge is, and one of the reasons we wrote the book is, in that situation, we are ethically not allowed to contact the seller directly because we don't represent the seller. We have to go through their agent. So, the seller very often, you know, never finds out about, you know, these shenanigans and, you know, cost them money.

05:02 Potentially cost them a lot of money. They're potentially leaving money on the table. I've talked to people before when they were selling their house, and they were wondering just how much work was being done to try to sell their house. Like, there would be one house that's for sale down the street, and it always had balloons outside and open houses, but the house that the people were trying to sell, their agent wasn't doing anything. How can someone know out there if their real estate agent is really working hard to sell their house? That's a great question. You know, we have a lot of tips in the book of, you know, how to really make sure, you know, that your agent is working for you and has structured their business in a way that they're motivated, you know, in a way that, you know, their incentives are aligned with yours. So one of the things, you know, always ask for is ask for your agent's marketing plan, and, you know, we have weekly meetings or conference calls with our clients and review our marketing plan and what we're doing, what's happening, what the feedback we're getting.

05:55 And then we make tactical adjustments. If things aren't going as we hope, we talk about other things we could be doing or do differently to try to drive traffic up and sell the house. And the key is, you know, listening to the market and getting feedback from buyers and buyer agents to find out, you know, why the buyer didn't write an offer. You know, sometimes, you know, sometimes an offer comes in on a property and it's low and the seller is annoyed with the offer and feels, you know, maybe insulted by the offer and by the buyer. And, you know, it's really not that buyer they should be insulted with. They should be insulted with all the other buyers who came through the property who didn't take the time to write an offer. Right, right. And, folks, we're talking to Hans and Steve Weidler.

06:41 They are authors of the book Inside the Cell, Real Estate, Top Agents Reveal Unspoken Secrets and Dangers of Buying and Selling Your Home. Here's a problem I have a lot of people tell me they have is trying to figure out the exact value of their house when they want to put it up for sale. I mean, that's when you really need a real estate agent on your side, correct? Yeah, that's one of the key, you know, I think success factors or differentiators for a good agent who really knows the market and has a handle on it. And, you know, ultimately, however, even the best agents, there are some homes that are very idiosyncratic, unique to the market. And, ultimately, the price is determined by what a willing, able, and ready buyer is prepared to do.

07:30 So, you know, what we advise our clients to think about is when you engage an agent, you want their marketing plan and everything that they do to be as powerful and professional as it possibly can be. And if your home still isn't selling and you've eliminated all the other possible factors, you at least know that you've identified price as the remaining issue that's holding people back. Yeah, that's important, too. Does that make sense? Yep, it sure does. I mean, you have to find out, you know, what the market will basically give for what you're trying to sell. It's capitalism 101, isn't it? Right, but specifically, for example, if you have a home and it's cluttered and doesn't show well, it's got a funny smell, and it's not selling, you don't know whether it's because you didn't take the time to clean up your home or it's a price issue. If your home is sparkling like a jewel and it's not selling and all your other marketing is professionally done and in a comprehensive plan and still not selling,

08:24 then you know price is what's holding you back. Yeah, on the other side, my wife and I were searching for a house a couple years ago, and we went in one, and it had candles burning there, and it had a strange smell of room deodorizer, and we figured out they had cats, and they were trying to cover that smell up, and I'm allergic to cats, so they were trying to cover that up a little bit too much. Now, tell me about this. In your book, you talk about something called the white elephant. What is the white elephant in the real estate world? Well, the white elephant is the question that every buyer wants to know, but they don't ask, and that is, we have a whole chapter of it in our book. It's about liquidity, and the thing about real estate is most buyers are asked the question,

09:11 is this a good investment? Well, the real question they're asking is, when it's my turn to sell, how am I going to do? And a big factor in that is, you know, real estate is not necessarily a liquid investment. Some markets are more liquid than others, and a home that, you know, buyers might think they're getting a good deal on a home in a market because they're getting 10% or 15% off the asking price. Well, there might be a reason they're getting 10% to 15% off the asking price, and that same home that might be, you know, you might be buying it in a strong market when it's your turn to sell

09:56 and the market might not be as strong. Instead of a 10% or 15% discount, you might be facing a 25% to, you know, 40% discount. So, you know, what a good real estate agent should do is help advise your clients about, you know, yes, this particular layout works for your family, but in our experience, for example, this won't, this isn't a, this doesn't have the broadest possible appeal, and, you know, that's a red flag for possible liquidity issues down the road. So the question we always tell our clients to consider is, you know, or the way to think about it is, you know, real estate, I can tell you with almost 100% certainty that real estate will appreciate over time. What I can't tell you is where the peaks and valleys are, and there will be peaks and valleys, but the longer your time horizon is in that home, the less risky of an investment it is.

10:49 And so you want to anticipate not only what your needs are today, but three years down the line, five years down the line, 10 years down the line. No one has a crystal ball, but, you know, a good real estate agent will help their client sort of anticipate, you know, the flow of the home, how their needs might change, and whether or not this is a longer-term invest home for their clients. Well, it's a fascinating topic. Again, folks, the book Inside the Cell, Top Agents Reveal Unspoken Secrets and Dangers of Buying and Selling Your Home. You know, there's a lot more to selling a home than sticking a for sale sign in your yard, and I think everyone needs to know that, and there's a lot on the other side when you're buying. Folks, we're going to, if you've joined this interview late, we're going to post a complete copy of it on financialsafari.com,

11:34 and you'll click on the As Heard on the Show icon. We're also, later on this year, going to try to go up to D.C. and do a video session with Hans and Steve and give you some of the video versions of what they're talking about, because I always believe that a picture is worth 100 words, a video is worth 1,000. Guys, thanks for your time today. Thank you. No problem. Thanks. It was a lot of fun. And, folks, we'll be right back after this.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 And this week, I'm very proud to announce a world-renowned guest. Folks, his name is Mr. Tom Hopkins. He's joining us from Scottsdale, Arizona, and he's written several books in his day, and he's still writing today. The book I have in front of me, the one that is a real good book, it's called Victory featuring Tom Hopkins. It's the world's leading experts reveal their secrets for winning in health, wealth, and success in the new economy. Also, how to master the art of selling financial services with Tom Hopkins. Tom, welcome in. Well, thank you, Coach, and it's good to be on your program. And I've heard great things, and any way I can maybe give some ideas to the folks listening, that'd be wonderful. Yeah, well, hey, in the economy we're in now, I think it's important for people to

00:47 identify to themselves what they're really looking for in the financial world and in life in general, and then align themselves with people who share the same goals. And, Tom, I've seen so many people, when I talk to them nationwide, and they'll call and they'll say, Coach Pete, the problem is I don't think my advisor is on the same page as I am. Yeah, that's so true. So, as I totally believe, Coach, that people who are very successful, those that are talented, those that are true successes in their industries, they really do good when times toughen up. And I found that I watched a lot of the students that come to my training. And from 2002 to 2008, that six-year period, everybody was making lots of money.

01:40 Attitudes were great. The economy was just really perking along. And then all of a sudden, 2009, we started a shift and a turn. But what I'm finding is the people that are fundamentally sound with what they do, the people that are really good at the field of sales and marketing and building their businesses, they do real well in tough times. I remember back a couple years, in the early 80s, when I was selling real estate. Gosh, people left the business in droves. Interest rates went up to 18%, believe it or not, on a home. But I did well. I prospered because I feel I outworked most of the people. And one of the challenges that I find, Coach, is that a lot of people lose their attitudes

02:32 when there's negativity in the economy and they start buying into the thing that things are slow. And if they buy into that, believe me, they will be slow for them. Where I always felt like, hey, slow market, less competition. People don't go out and work like they used to. And I'll outwork everybody. And that's how I prospered so well in tough times. Yeah, there are two emotions here I see that build momentum upon themselves. And when it gets going, it's hard to stop. And they are greed and fear, Tom. And both of them have like they're out of control sometimes, aren't they? Oh, definitely. Yeah, that's so true. You know, fear is a powerful motivator. And I think fear was one of the things that caused me to want to strive to be successful.

03:18 I didn't go to college. And when I quit college, I'd only gone for 90 days. And, of course, I came home and my dad said, son, I'll always love you. Even though now, based on you quitting college, I know you'll never amount to anything. But believe it or not, Coach, that was my kickoff when I really said, oh, yeah, I'll prove I can be a success. And by my dad saying that, I got highly motivated and luckily got out of construction, found the real estate business, spent eight glorious years in that industry, and then wrote my first book. And, well, I've been teaching almost four and a half million people. I've come to my program. So it's been quite exciting.

04:04 Yeah. Well, you've written over almost 20 books, I guess, in your life, correct? 17. 17 books. That's a lot of books, Tom. You're holding the last one, the victory book. Well, hey, that's a lot of books. I've written five books, and it just takes a lot of time. You have to be passionate about what you're writing about, of course. And then it takes a lot of time to research and make sure the editing gets right and all that. But the ideas are coming from your heart a lot of times in these books. And what do you see here? You've talked to a lot of people with money, I'm sure. What do you see? Is there an underlying trait or overall trait of people who have done the right things? And have a lot of money? Is there something you can identify that our listeners can maybe hope to refine in their own knowledge base? That got the people with money to, number one, make money, and number two, keep it?

04:53 Well, making it can be easy. Keeping it's extremely difficult. And that's why it's so important that you do research, that you do search for people that are like-minded as you are in the financial services field. I was very fortunate to have some folks work with me. And one of my largest accounts was Sandy Weil. And, of course, I served a lot of his 100,000 agents with our training. So I think it's important that people realize that in tough times they don't last, but tough people will last and prosper. However, again, if they stay totally grounded on fundamentals, I think also to build a net worth, you have to set your goals.

05:43 They have to be put in writing. And I think you have to commit how much a month you're going to actually put away in your own investment program. I get so upset when I do meet some financial consultants, advisors, whatever, and they aren't every month writing a check into their own program. Yeah. And I say to them, how can you ask people across a kitchen or dining room table to make a monthly commitment to invest in their financial planning if you're not doing it? And so I really get on their case because I don't think, you know, I think my best real estate years were when I owned a lot of real estate because I could totally relate to someone looking for a property.

06:30 And that's the same with financial planning, I think, and services. You have to make a monthly commitment so you can look across the table and say, John and Mary, a highlight in our life is every month the first check we write is into our debt freedom and financial independence program. And I know you're going to feel the same way as we get you started in this program. I agree. I mean, that's almost like going to a restaurant and finding out the people in the kitchen aren't eating the food they're cooking there. That's a great analogy. I'll use that. Because, I mean, you have to. I mean, if you don't believe in your own product, then why are you offering it to other people? Yeah, definitely. You're phony if you aren't buying what you sell. Yeah, I agree. I agree.

07:15 Now, you mentioned written plans and goals. I mean, how important is it for folks to write down what their goals and plans are? Well, see, we have a world of wishers and dreamers. I don't think you move from a wisher-dreamer role into a totally successful person until you have a blueprint, and I call it your life's blueprint. You know, the building you're in right now and the building I'm in right now, not a shovel of dirt was turned on that vacant plot until a man in his mind took the architectural renderings and put them to paper. And that's the same with your life. You know, it's just so important that you become goal-oriented to where you write down, I'm going to have a new car.

08:05 I'm going to have a new home. I'm going to have X millions of dollars net worth. You've got to put it on paper. You know what I do, Tom? I go find a model of the car I want, like a toy almost, and I buy it and I put it up on the shelf. And I know I'm not that crazy sometimes. I have a Gulfstream 5 model up on my desk. Now, that's $50 million, but you've got to aim high. I had a Learjet picture, and then I got the model, and finally, sure enough, it took me 10 years of commitment, and then I got my Lear developed. So, yeah, I'm with you, man. You've got to see it in your mind and put it on the paper so you can visualize it and see it coming into your life. How important is it for anyone out there to have someone or one or more people to hold them accountable for what they're trying to accomplish?

08:58 Well, I think networking has become very popular today, and that's surrounding yourself with like-minded people. I had four fellows in four other industries that I met with once a week. We had breakfast. We exchanged leads. We psyched each other up. You've got to stay away from the negative people. Our world is more negative than positive, and I don't think you're going to achieve a high degree of accomplishment unless you're up and positive and excited about what you're going to do in the future. Yeah, I agree. It's almost like when you see maybe game seven of the NBA playoffs, and the player goes to the free-throw line, and he's usually a 90% shooter in practice, but now all the pressure's on, and he misses the front end of the one-on-ones.

09:45 That happens, too, because pressure can overtake you, and negative thoughts. I mean, you need to think positive. You need to think you're going to make the free-throw. Exactly. You've got to see it and visualize it, and it'll happen. Now, let's talk about shortcuts. I mean, we talk about, I mean, you know, people are jealous these days. It's jealous in nature because we have so many TV shows, reality shows, showing you how rich everybody else is, and you're not. And then people start trying to take shortcuts to get to, you know, to have that house they see on the lifestyles of the rich and famous. Tom, in your experience, do shortcuts help or hurt somebody's long-term plan? I think it really hurts them long-term, and you said the right term. You can cut corners and possibly try to short-circuit and make things happen faster than they should,

10:31 but I just found that if I found good mentors, if I read good books, if I had a CD in my car that was uplifting and positive, doesn't always have to be motivational. Even music can get your adrenaline pumping, get you psyched up for the day. But I think it's so important that we just, those that want to become achievers, and there's only about 5% of the American population that are pure achievers. The rest are kind of non-achievers. They're just coasting along, waiting for something to happen instead of making it happen. One final question. What do you see here in the next 20 years? What do you think are going to be the technological advances out there? What do you think is going to happen here in the next 20 years, here in America or worldwide?

11:18 Well, I think that technically we are definitely going to see high technology take into a lot of account into business. But I will always come back to the truth. I don't care how much technology there is, the people business, getting to have your own personality and temperament, finding ways to have people like and trust you, finding a way to, you know, build long-term relationships. All of these things will always be true. But again, I think we have to realize that Internet has taken a tremendous toll on those people that aren't professional. But I do believe the automobile business, the real estate business, the financial services business, will always need that person at the table or desk that can create a rapport, can lower defense barriers,

12:11 can help this person say yes to making a good investment. Yeah, I agree. Folks, his name is Tom Hopkins. He's written over 17 books or 17 books so far. And if you join this interview late or want to hear it again in its entirety, go to financialsafari.com and click on the As Heard on the Show link. Tom, thanks for your time. Good to talk to you, Coach. Thanks again. The pleasure was all on this side of the microphone, Tom. Thank you.

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00:00 Today we have in studio Charles Davies, and he's with Dream Living Realty. He's right in the research triangle here. And I wanted to just spend a little time and talk about what's going on in the real estate market. We've seen some ups and downs in the last decade and just talk about trends and some mistakes people are making, too. Charles, welcome in. Hey, welcome. Yeah. Now, let's talk about this. I mean, everyone needs a house or they need a roof over their head. And my brother, who is younger than I, he's in Charlotte, and I still remember this about 15 years ago. He called me. He was all excited. He said, I've figured it out. I've got just enough money to make a monthly payment on a house. I can qualify. The mortgage people are going to give me the money, and I can get it in a house. And I said, time out, Jeff.

00:45 I said, let's talk about this for a minute. When you say just enough, what does that mean? He said, well, I'll have to cut back, and I won't be able to eat out, but I'll be able to move into a house. I said, you're forgetting one thing. And he said, what's that? And I said, it costs about 1.25 a month, not 1%. In other words, if you have a house payment of $900, you really need about $1,100 because there's a lot of unforeseen things that happen once you move in. And I talk to a lot of people when they move in the house, and there's a lot of expenses they didn't anticipate, and then the taxes and homeowners insurance, all that kind of stuff. But let's talk about this. A lot of people that are listening are watching the news, and they see, especially here in our area, house prices are going up, aren't they? They are going up, and a lot of times you're seeing a lot of multiple offers, and homes are selling for more than what the list price are.

01:38 That's fun. If you're selling a house and you have people bidding to get your house, it makes you feel pretty good, doesn't it? Oh, yeah. Now, that is a whole lot different than when I sold my last house. When we moved, my wife and I moved, and then we decided to sell our old house. We had to, but we wanted to move first and then sell next. And we were having to – we didn't have multiple offers, Charles. We had people trying to undercut us back in the day. This was 2011 or so. This was at the bottom of our little cycle here in the triangle. Now, the advantages were we – when we bought the house we're in now, we were in control. And when we went to sell the house that we had before that, we weren't in control anymore. But now people are – there's two different sides to the story you're on.

02:23 I'm sure you represent people who are buying and who are selling. If someone's trying to sell their house right now, could you give them just a couple of tips of how they might be able to sell it better for more money? Yeah. The very first thing in selling a home nowadays, because there's not that many homes on the market, is to have your home prepared very well so that it shows well. Staging is called, right, Dren? Yeah. Dream Living Realty, we have a stager that will come to the home and help the homeowner organize the home so that it looks appealing to buyers. We have a professional photographer that comes in and takes pictures to ensure that we have a good online presence. And when homebuyers are looking for a home online, we want our homes to pop by the pictures, and then we kind of capture them with the remarks about the home.

03:14 If you had to identify one major mistake people make when they're selling their house, what would that be? Right now, it is a seller trying to overprice their home because the market is so well. Okay. The key thing is really you want to price the home very well, but be very wary of your competition so that you're priced well enough that you can create a situation for multiple offers. So, again, that's a problem, I think. If people overprice it, it doesn't look like they are willing to budget all, then they're not going to get as many offers as somebody who looks more flexible and prices their house fairly to the neighborhood, in other words. Exactly. Yeah, because no one wants to overpay and no one wants to get caught holding the bag. What if you overpay and then the market goes down again?

04:00 Now you're way out there on an island, aren't you? Exactly. Okay, now buying a house. Buying a house is an exciting time. It's also an apprehensive time. But if someone's listening now and they're thinking of buying a house, what would be some tips you'd tell them about how to look for the house and what they should do going forward? Well, the very first step would be to get a pre-approval, speak with a mortgage broker or mortgage banker, and find out how much home you can afford. If you're trying to be a smart buyer, you don't want to max out and go with the highest price point like you were saying before. Sort of like my brother, right? Yeah. What you want to do is just to make sure, what I tell my clients is to tell the mortgage broker how much you can afford and then have them work backwards to tell you what that price of the home would be. Okay.

04:46 Once you have the pre-approval, that's kind of your golden ticket to go out and look at homes. At Dream Living Realty, we have a very creative Home Hunters website, which sends listings automatically as they hit the marketplace and the buyers can look at the properties. And if they have questions about a certain property, they can write notes in the website and I get to see those notes and can respond back. Also, I encourage my buyers to drive by homes just to check out the neighborhood and make sure they're comfortable with what they see before we schedule an appointment to go check out the home. Yeah, that's a good point because I always say, and I'm not a real estate person, but I mean I'm a financial guy, so people will call every now and then when they're going to buy a house and ask if there's any tips I can give them.

05:32 And what I say is when you find a house that you like, before you go forward with that, I say drive by at least three or four different times and different days of the week. So go in the morning, go in the afternoon, go in the evening, and then go a couple different nights and make sure there's not any wild parties happening in this peaceful looking house. Exactly. And there's this, especially here locally, and I see it on the news all the time, there's this house in a very expensive neighborhood where evidently somebody bought it and they're having parties every night in it. It's a multi-million dollar house in a very small, rich neighborhood, and they're partying every single night over there. I think I know that house. Is it a house in downtown Raleigh? That's right. Yeah. He actually was having a club. Yeah, a club in the house. That's right. Well, he called it a party to get around the rules. But it's just you have to know what you're moving into because the worst time to find out you're moving into a partying neighborhood you weren't expecting to be a partying neighborhood is after your moving truck pulls up into the front driveway.

06:27 It's too late then. It's too late then. You've already signed the paperwork. Yeah. And so, I mean, that's a big mistake I see is people not really knowing the house. They know what the real estate agent showed them that one time, but they didn't come back and see it afterwards. Exactly. And that's important to me, I think. It's very important. And once you do identify a home that you'd love to purchase and love to live in, the next step would be to write up an offer. Yep. If you're working with a good agent, they're going to do the comps for that home to tell you what a fair price would be for that home. Now, with today's market, you do have to be careful because there could be multiple offers. And if indeed there are multiple offers, there's things you can do to try to make your offer stand out over someone else's offer. If someone's looking for a house right now and they haven't considered a real estate agent because they think that they'd have to pay some money out of their pocket,

07:14 they need to understand the difference between a buyer's agent and a seller's agent, don't they? Most definitely. Now, will you go over what a buyer's agent can do for someone who's looking for a house? Yeah. A buyer's agent is specifically working for that buyer and they hold all their fiduciary duties to that buyer. Any information they find out about the seller, they are obligated to let the buyer know so they can make an educated decision in writing up an offer. So it's like having a team on your side and helping you because there are a lot of things that you as a real estate agent notice that a traditional buyer wouldn't notice, right? Exactly. I mean, you see things. I'm sure. All the time. You walk in the house and you'll be able to tell them truthfully if it makes sense or not because you want them as a client long term, not just a one transaction kind of client. Exactly. Yeah. And one thing I like what you do, because Brittany in our office is using you right now, is that she's told you what she's looking for in a house.

08:06 And since you're going to be her buyer's agent, you've created a personalized website for her where she can just check on every day and see if there's any new recommendations you have for her. I've never seen that before from any real estate agent. I think that's a real good idea. Yeah. And in addition to that, we also have our Dream Living Realty pre-foreclosure website. Dream Living Realty has a foreclosure department that basically we just do foreclosures in. At any given time, we have about 30 to 40 listings of foreclosures. Well, how foreclosures work is we know about six months up before the foreclosure hits the marketplace. And we have all of that inventory, the pre-foreclosed inventory, on our website so that our clients can see those homes.

08:51 They can check it out if they like the address and they do a drive-by. They like what they see in the neighborhood. I can schedule a showing to show them the home before it even comes on the market. So it just helps with getting them the best deal possible. Makes a lot of sense to me. That way, yeah, they can get a real good deal before a lot of other people know about that deal. Exactly. Folks, his name is Charles Davies. He's with Dream Living Realty. Is that the name of your website, too? My website is DurhamNCRelocation.com. DurhamNCRelocation.com. Charles, thanks for your time today. Thank you. It was a pleasure. Folks, we'll be right back after this.

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00:00 And welcome back in. Folks, this week we have a very special guest to me because back in the late 70s, my father, who's a college professor, he was curious about computers, curious enough to open a couple of computer stores. And we sold some Apple computers back in the day. The Apple that we all remember growing up 20 or 30 years ago are not the Apple's of today. But we've got a guest here on the show. His name is Owen Linsmeyer. And he has written a book called Apple Confidential 2.0, The Definitive History of the World's Most Colorful Company. And Apple computers sure is. And he's joining us from San Francisco today. And Owen, welcome into the show. Thanks for having me. Now, let's talk about Apple. I mean, I've got an iPhone myself. I've got an iPad.

00:45 In our studio here and in our financial firm, we use Apple's NPCs. And some guys love them and some guys hate them. And I'm sure in the history of Apple, you've seen that, too. I mean, Apple has been hated as a stock in the past, and it's been loved as a stock. It's been hated as a company, loved as a company. Either love Steve Jobs or you hated Steve Jobs. And let's talk about the book. What caused you to write it, and what did you find out when you were writing it? Well, I started writing the book back when it looked like Apple might be going out of business. And I thought that this was in the late 90s. And I thought it would be interesting to explore their history, where they had been, and try to see if the company had a future. And up until the late 90s, Apple had a history of making almost the exact opposite of the right decision at the most crucial moment in its history,

01:35 from the idea of not licensing the operating system for the Macintosh, letting Windows take over, just a whole series of those stories. And yet it prevailed in the end. So I thought it was an extremely good story to tell. And there was a lot of history that people had not yet heard, because Apple's marketing machine was so good at basically putting out an image of the company that wasn't necessarily, didn't comport with the facts. Well, I love this book, because it answers a lot of the hows that people have been asking the question, how? You know, how did that happen? How did that happen? Or why did they do that? And how did the company, Apple, almost get sued by Carl Sagan, the Cosmos guy? And how did they dig themselves a little bit deeper in this battle they had with Carl?

02:25 Oh, gosh, you're going way back for the Carl Sagan thing. That, I believe, was an instance where one of the products that they had under development, somebody internally gave it the code name Carl Sagan. It was never meant to be produced or sold as that. It was just an internal code name, more than likely just designed to allow people to track the leaks that were coming out of Apple. And unfortunately, it leaked out. And the real Carl Sagan, the scientist, heard about it and got all upset and decided to sue Apple. So it was one of these things that kind of bit them in the butt. They were actually honoring him by giving him a code name, but he didn't take it as that. That kind of story is the kind of thing that I was digging up in Apple Confidential 2.0.

03:17 And it's the kind of thing that nowadays would be very difficult to get any information out of Apple. That kind of story. They've really clamped down on leaking. Now, Steve Jobs wasn't the only person that started Apple, though, was he? No. Most people know the two Steves, Steve Jobs and Steve Wozniak. But in my research, I uncovered the actual partnership paperwork. And there was a third person, Ron Wayne. And Ron Wayne was given 10% of Apple because the two Steves realized if they both split the company and they disagreed on something, well, then neither one of them could actually get the other to do something. So they needed basically a tiebreaker. And Ron Wayne was an older gentleman that Steve Jobs knew from his work at Atari.

04:03 So he convinced them to become a partner. Unfortunately for Ron Wayne, he decided after just a few weeks that it really wasn't going to work out. And so he sold his 10% share of Apple for $800. And if he had been smart enough to hold on to it, he would be a multibillionaire today. But to his credit, he, to this day, insists it was the right decision to make at the time with the information he had. So he's a really classy guy, very smart man, and does not live in the past and regret this decision. Again, folks, we are talking to Owen Linsmayer. He is the author of Apple Confidential 2.0. And let me ask you this. In your studying of Apple throughout the years you studied and looking back in their history,

04:53 what would you say, number one, their best decision as a company was, and number two, their worst decision as a company? Well, in retrospect, I would probably say it's the same decision by the same person for different reasons. It was when Gil Emilio brought Steve Jobs back to Apple. Again, Apple was in dire straits at the time. It had been through several CEOs. And Gil Emilio was brought in from National Semiconductor to try to turn around Apple. And he realized that he needed a new operating system. And they went around and looked and tried to find somebody who had a good operating system that they could use to base the Macintosh operating system on. And they ultimately chose Steve Jobs and his next operating system.

05:42 And I got to say, when I first heard it, I thought, wow, it's brilliant marketing, bringing back the founder. But I also thought it was the stupidest move that Gil Emilio could have made personally for himself because it was clear that Steve was not going to allow Gil to stick around, even though he was supposedly only being brought in as an advisory role. And sure enough, very shortly after being brought on, Gil Emilio was booted out by Jobs in a coup d'etat. And Steve took over, and I was a little apprehensive about his abilities because he had not been successful when he previously ran Apple. He had not been successful when he ran Next. Yet he must have learned a lot from those failures

06:27 because clearly he turned around a company that was on Beth's door and turned it into one of the most powerful, successful companies in the world. So I think it was that one decision that was both the worst for Gil Emilio and the best for the company at large. Well, this is a fascinating book. I mean, it is packed with information that goes and ties in the correlation to the performance of Apple with the products they were announcing and goes through the good, the bad, and the ugly. Folks, if you're looking for a real good read and one that will sit on your bookshelf for a long time, this book is called Apple Confidential 2.0, The Definitive History of the World's Most Colorful Company. Again, the author who we've been talking to right now, Owen W. Linsmayer. And, Owen, what we'll do for people that are just joining or want to listen to the interview in entirety again,

07:14 it will be posted on financialsafari.com. And we really thank you for your attendance today on the show. Thank you very much for having me. It's always great to talk about a great company. Thank you.

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00:00 And we've got a fantastic guest today. He's joining us from Las Vegas, Nevada. I've heard it called lost wages before. Las Vegas, Nevada. And he is the author of The Ultimate Obama Survival Guide, How to Survive, Thrive, and Prosper During Obamageddon. His name is Wayne Allen Root. Folks, you may have seen him as a host on CNBC. He's been on Fox. I mean, he's everywhere you look these days, and the book is fantastic. Wayne, welcome in. You know what's funny, Coach Pete, is I wrote this book as a political book. When you hear that title, The Ultimate Obama Survival Guide, it certainly sounds like a political book. And it opened up as the number one book in the United States of America at Amazon in the political category. But then the same day it went to number one in the finance category.

00:45 And the next day it went to number one in the economics category. And I think most people who bought it thought of it as a financial book, which is good, because I'm on your show, which is a financial show. So it started out as politics, but I'm a small businessman. And everything I write about, I write from a financial perspective, how it affects a businessman or woman like me. And that's what this book wound up becoming about. It went from politics really to being a finance book, telling you how to get your finances in order over the next, you know, over the second term of Barack Obama. Well, isn't it funny, though, how – and it's not really funny, I guess ironic – how politics and financial matters overlap? Well, they're the same thing. I mean, in other words, I've been a guy that's been in politics my whole life. I don't remember if you mentioned it in the opening. I don't think you did.

01:30 But you may not know I was the vice presidential candidate of the Libertarian Party in 2008. And so I was on the ticket. Bob Barr, the former Republican congressman, was the presidential candidate. I won the vice presidential nomination, and I'm a political observer and commentator on Fox News and thousands of conservative radio talk stations. But all I ever talk about is money because, to me, politics is about money. It's about the economy. Everything else is like number 10,001 on a list of what's important from 1 through 10,000. You know, abortion, gay marriage, stem cell research. None of it matters if you can't run a business. None of it matters if you don't have a job. It's like one of my heroes, Ronald Reagan, once said, you know, when your neighbor loses his job, it's a recession. When you lose your job, it's a depression and a tragedy.

02:19 And so if you can't find a job in this economy, does abortion really matter? All that matters is, first, you've got to be working. So I think politics is, first and foremost, about economics. And that's how I wrote – you know, that was the angle, how I wrote The Ultimate Obama Survival Guide. Well, it's a great book, too. And, yeah, here's what I talk to. I talk to people every single day throughout the nation. And what they tell me, Wayne, is they just want the government to leave them alone. They want to be left alone. Business owners are getting trampled by all these regulations, rules, taxes, you name it. We're getting trampled as small businessmen out here. Well, you're talking my language. And I come up with the facts. See, that's the problem is that very often people on the left and the Obama team doesn't like facts. And when you give them facts, they get scared and they try and change the topic and they demonize you.

03:05 So here's a fact. You know, you mentioned we don't want government in our lives. We just want to be left alone. Too many regulations. But did you know the exact number of regulations since January 1st until March 31st? I don't have updated numbers for the second quarter. But for the first quarter of 2013, the Barack Obama administration added 6,118 new government regulations. That's an average of 68 a day. Listen, Coach Pete, I don't know how that's possible. I think he's got like 24 hours a day sweatshop going. And lawyers are being whipped in the sweatshop to come up with ways to destroy business and block businessmen from making money. But how could you ever come up with 6,118 new government regulations in three months? And that came on the heels of the fourth quarter, which was terrible, right?

03:54 It was in retraction. Our country's going in reverse. And to solve the problem, they stuck 6,118 new regulations in the way of every businessman and woman in America. This is crazy. So I come up with stats that they can't debate. Nobody could argue with that. That's a real number. You know where I got it? Regulations.gov. I got it from the government's website. And guess what's happened since then? I don't have the updated final number, but I know that the average in April and May was 72 new government regulations a day. Remember now, I just said the first three months, it was 68 regulations a day. Now it's been 72. So the economy keeps getting worse, and they keep adding more regulations. And people wonder why there's a correlation between those two, or if there's a correlation.

04:42 You're darn right there's a correlation. One is causing the other. You can't run a business with 72 new regulations every day because no small businessman can possibly keep up with the regulation. Well, it's like an out-of-control train coming down the tracks, isn't it? Going faster and faster down the hill. Well, yeah, and you can't believe what you hear in the media. So many lies. You know, last month, or I should say last week or two, I guess it was about two weeks ago now, there was a new jobs report for the month before, the month prior, which was June. And the jobs report for June said 195,000 jobs created. And that was about a couple weeks ago. People were jumping up and down saying, well, the media was anyway, saying, what great news we're in recovery. Well, you know, if you read headlines, you're reading lies.

05:28 The headlines are set up so that you get excited and you buy the newspaper or you tune into the news show. But then when you go to the eighth paragraph, that's where they bury the real lead story, the facts. And if you dig down into the unemployment report, yes, overall, they claim 195,000 jobs are created, but they were all part-time jobs. Hey, Coach Pete, last month, 360,000 part-time jobs were created in the United States in one month. Guess how many full-time jobs are created? Zero. Zero. Negative 240,000. So we lost good jobs. We gained part-time jobs. And so when you look at the start of the year, since January 1st through July 1st, 130,000 full-time jobs are created in a country of 330 million people.

06:15 That's the total number of net positive full-time jobs created, 130,000. You need 100,000 a month just to keep equal with population and birth. You need 100,000 a month. We created 130,000 in six months. None of that deals with the 9 million or so people who lost their jobs in this Great Depression, number two. So when you talk about how bad things are, 101 million Americans are on food assistance. Only 97 million Americans have jobs in the private sector. So more people get food stamps and food checks from the government of all kinds. They have all kinds of names. They call it the overall umbrella is called food assistance. More people get checks from government to pay for their food than have jobs in the private sector in the United States in the year 2013.

07:02 If those numbers don't make you just open your jaw in awe, I don't know what else I could say to prove to you that the economy is in reverse right now. Yeah, and folks, we're talking to Wayne Allen Root. He's the author of The Ultimate Obama Survival Guide, How to Survive, Thrive, and Prosper During Obamageddon. And on the cover of the book, the book is almost 450 pages, by the way, folks, and a great read. On the cover, we have a comment from Ann Coulter. She says, Wayne shows you how to capitalize and prosper through hell. And that's what it sounds like here, Wayne, because as independent people out here, we're independent thinkers. We're trying to make our own money. We want to have our own retirement. And by the way, Obama says you can only have a certain amount of money in retirement plans now, which is crazy. How does the average American listening to our show right now who's trying to plan for retirement, how do they combat all the silliness out there in the political world to make sure their retirement is as comfortable as they wanted it to be?

07:56 Well, you know, before you worry about making money, I think you have to worry about protecting your money. I think that's the most important thing is protecting what you've got, even more than thinking, how can I double it or triple it? Because in this environment, the answer is you probably can't double it or triple it. It's very difficult. But you certainly better make sure you protect what's already there. So if you're listening right now and, you know, you make X amount of dollars and you have X amount of assets and you say, well, how do I protect it? Well, here's the first thing. I went out and I interviewed for my book 18 of the richest men in America. Okay? It just happened to be that somebody said, yes, I'll participate in your book, 18. That's where that number came from. I called them and 18 said yes, and they wrote 18 separate chapters. And then I went and looked at what they all had to say, and here's some of the commonalities that 18 men who are almost all worth $100 million or more said the average middle class person has to do.

08:45 Number one, here's the one thing they all agreed on, all 18. You have to move to a no-tax state. You have to get your assets to a Nevada, a Florida, a Texas, a Tennessee, an Alaska, a Wyoming. Those are the no-tax states in the United States. I live in Las Vegas, Nevada. See, I'm already ahead of the ballgame. I knew that 13 years ago. I moved to Las Vegas because I wanted to get the hell out of New York, California, two states that I had lived in most of my life. And I couldn't stand the taxes. And I moved to Nevada where the income tax rate is zero. So these really rich guys pointed out they don't understand how the average middle class person doesn't get this. These guys would say things to me like, I'm worth $100 million, Wayne, and I would never give an extra $1.50 to the state of California.

09:31 Why would 48 million people live in California and be willing to pay 13.3% state income tax when I'm worth $100 million? I wouldn't even think of paying that extra money to the state. That's why I live in Florida, Texas, or Nevada. That's where almost every one of the millionaires moved. And none of them started out there. So you've got to get there because they all pointed out that over a 40-year working career, you might have an extra half million to a million dollars on the day you retire just because you live in a no-tax state. So that was the first tip they all gave me. The second one was they all said don't worry about whether gold is going up or down today. In the long run, gold is the greatest insurance policy in the world. And over time, you'll always do great. Gold's done great for 5,000 years. It has done better than paper money issued by the United States government or any other government.

10:19 So gold is done fairly lousy of late, but it doesn't matter. That's a short-term blip. That's like predicting the stock market today or tomorrow. Over time, gold always does well. So here was the stat they gave me that just blew my mind, Coach Pete. I just couldn't believe it. In 1913, if you had a million dollars in cash stuffed in your mattress, today it would be worth $40,000. A million dollars in 1913 because of inflation and the value of the dollar has gone down so much is today worth $40,000. But if you put the same million dollars in gold, today it's worth somewhere north of $70 million. $40,000 versus $70 million in exactly 100 years, 1913 to 2013. How's that for a long-term positive appreciation?

11:07 So they said, don't worry if gold goes down this week or this month. Consider it a great buying opportunity. You're getting in cheaper. Over the long run, the U.S. dollar will go down. And we just recently heard Ben Bernanke just a couple weeks ago report that, yes, siri, the economy isn't so bad. We're going to continue QE3 and 4 and infinity. We're going to keep printing money because there is no choice. He just came out and finally admitted that. And that's going to make gold go up in the near term. So I think gold's a very important part of anybody's strategy to protect their money and even to try and multiply their money. Good thing. I think energy stocks are good with Barack Obama as president because anything that is limited, you can't get enough of it, is going to go up in value. And Obama keeps trying to put coal out of business and he won't issue any drilling permits for oil.

11:55 And so it becomes more valuable and the price goes up. So most of my 18 millionaires and billionaires thought you should invest in oil and energy. And here's a big one. People are moving like crazy to the states I just recommended, Nevada, Texas, Florida. There are a lot of states that are financially healthy and growing with population. And then there are states that are dying. I call them Democrat blue states. You know, they're high-tax states. Everybody's leaving. No one wants to live there. New York, California, Michigan, Maryland, Illinois, terrible states financially. They're train wrecks. So you want to buy the bonds, not of every state in America, only of the good states that are a good financial condition that people are moving to that have a great financial future. So that was another hint, suggestion that a lot of my millionaires and billionaires gave.

12:43 And then here's one from me, Wayne Root. You want to homeschool your children. You know, I grew up here last 13 years I've been in Las Vegas. My kids grew up here. They're educated here. The Vegas schools are the worst in America, but all the schools are bad in America. We just have the worst SAT scores in history in the United States of America. The dropout rate is mind-boggling all over the country. But here in Las Vegas, about 45% of the kids drop out of high school. Wow. And the ones who do graduate are, you know, are dumbed down so badly they can't even attend community college without remedial math and English. So my kids were raised here homeschooled. My daughter is a straight-A student at Harvard. So if you want your kids to have a future in this America and you want them to make big money and have a great career and a profession,

13:29 you're going to have to figure out something to do other than to allow them to go to public schools. To me, even though there's a financial show, Coach B, nothing is more important than the future financial opportunities for your children. And they're not going to have any opportunity if you let them get educated in public school. I cannot agree more with that. I mean, that is so true. I mean, people are getting brainwashed every single day. Hey, let me ask you one final point here. We've got about a minute left here on this segment. But you talked about the states that are doing so bad, and I've heard it through the grapevine now that when states like, you know, California out there, out west, right next to you or Illinois, when they get into so much trouble where they can't pay their debts, they're going to try to hit up the federal government to help them bail themselves out, which will mean us in the good states, the states we're working hard at and not getting all these giveaway programs thrown out by the state.

14:20 We're going to have to bail out big states like that, aren't we? Well, you know, you have to bail them out if the country is run by Barack Obama, you know, in the next three years. You have to bail them out if the country is doing well financially. Maybe that has to happen. But if the country is bankrupt, I don't think we're going to be bailing out the states when the federal government is so bankrupt. Right now it owes just under $17 trillion. If you add an unfunded liability, it's about $100 trillion. I don't think there's the money to bail anyone out at this point, and I don't think there's the political will to get it passed. It'll have to pass the United States Congress, and the House is run by Republicans who will never allow that to happen as long as they keep the House. So I don't think they're going to be able to pull that off on us. But I will tell you this, Pete, I know time is short. I'll keep it short. My millionaires and billionaires in the Ultimate Obama Survival Guide also recommended for that reason, investing with your stockbroker here in America,

15:13 but investing in foreign stocks and mutual funds because they feel America is really not going to do as well for the next five and ten years as other countries all over the world, especially the emerging markets. It won't grow as fast because of the tax policies and regulation policies of Barack Obama. So invest globally. Think internationally. Don't think everything is about America. It's not. There's lots of great countries to invest in. Folks, his name is Wayne Allen Root. Again, the name of the book, The Ultimate Obama Survival Guide, How to Survive, Thrive, and Prosper During Obamageddon. If you join the interview late or want to hear it in its entirety again, you can go to financialsafari.com. Wayne, I hope to have you on again in the future and talk about more of these topics and also when you have another book come out. Thank you, Coach Pete. Love to be on and talk to you anytime.

16:01 My website's rootforamerica.com, and the book is The Ultimate Obama Survival Guide. Have yourself a great day and a great weekend. God bless. You too, my friend. Folks, we'll be right back after this. We'll be right back.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 And we have a fascinating guest joining us today. He's joining us from Hong Kong, China. His name is Dr. Peter Treadway, and he's author of the book Investing in the Age of Sovereign Defaults, How to Preserve Your Wealth in the Coming Crisis. Dr. Treadway, welcome to the show. I'm glad to be here. Matter of fact, thanks for taking your time. I mean, it's a 12-hour difference between where we are here in the East Coast of North Carolina and where you are in Hong Kong, but I really appreciate you taking time out today to talk because you said something very interesting right before we came on the air. You said the world changes by the minute. Let's talk about that. Okay. Well, probably the biggest change by the minute is what's happening in Japan.

00:48 The Japanese government made this giant about-face and instituted a program of quantitative easing and fiscal stimulus program, which has basically had the effect of, well, stage one, it kind of destroyed the Japanese yen, which went from around 80 to over 100 in a really short period of time, and at the same time the Japanese stock market rallied. But now we're in phase two where the market is saying, wait, maybe this is not such a great idea. I don't think it's a great idea. And so we've had almost a collapse in the Japanese market in the last week. And this is very important out here because the Japanese yen,

01:37 the weakening of the yen is negative for other countries like Korea, Germany. And so that's a major topic here. Japan, of course, has a huge amount of government debt, which the yields on Japanese government bonds have gone up significantly, although they're at ridiculously low levels. But Japanese bond prices have declined. Japan is a major country, which we sometimes forget about, but it's a major part of the global economy. And the global economy itself, Europe's in recession, China's slowing down, and the U.S. is sort of chugging along at a low rate.

02:24 But the U.S. is in positive territory. The GDP numbers were revised down slightly. But the U.S. is the star of the global economy right now. Well, Dr. Treadway, I'm 47 years old, and I went to undergrad at UNC Chapel Hill. And I see you went to UNC Chapel Hill for your PhD. PhD in economics. That's correct. So I remember, as a 47-year-old, I remember the day when everyone was worried about the Japanese economy eating everybody up. I mean, they were on autopilot, and it looked like they were on turbocharged, too. And then all of a sudden, something happened, didn't it? Yeah, well, what happened was they had a giant real estate and stock market bubble, which sort of peaked in 1990.

03:14 And then the prices collapsed. I think Japanese real estate prices went down 87%. And the companies in Japan and the consumers were basically in sovereign, and they've been saving ever since to sort of recover from that. And I think that process has probably ended, but, I mean, it was a 20-year process. Now, Japan is almost an exaggeration of what's facing Europe and the U.S. less so as well, because Japan has a basically aging population, which is certainly true of all the Western countries, and it actually now has a declining population. And Japan faces an enormous amount of entitlement benefits that are owed to its senior citizens and have been promised.

04:07 And this is true in Europe and the U.S. as well. And so Japan has a huge level of debt. The Japanese government debt is roughly, well, on a gross basis. It's 240% of GDP, about half that on a net basis if you subtract out their foreign exchange reserves and some other things. But they've got really high levels of debt right now, and they're going to have to start growing again, or they're going to have to default. And they'll default broadly defined. You can default on the obligations towards your citizens, or you can default on your bonds, or you can do both. And you can default in several ways. You can not pay, or you can inflate your currency so that essentially you're repaying in really worthless or currency that has a much lower value.

05:04 So – go ahead. Well, I mean, why should people in America care what's happening in Japan? Should we learn from it, or should we expect the same thing to happen here? I know we have so many entitlements here. Some are good. A lot are bad. And I've also heard that entitlements are a way to destroy an economy from within. Do you want to comment on that? Yeah, your question is your answer. That's why we should care about Japan. My book kind of looks at all of the major countries. I mean, these are the countries that are the wealthiest, that people are educated. Why are they having all these problems? And what has happened in all these countries, although each one is a little different, is that in a democracy, we vote for what we can't get out of the market.

05:50 So we vote – the majority of people are not wealthy, and they vote for essentially entitlements and benefits that ultimately the government can afford. And what happened also when – you know, we put in Social Security. We had a – there were very few recipients. You know, the recipient-worker ratio was very favorable, and that's gradually declined over the years. And with the aging of the population, that's going to be made worse in the future. So, yeah, there's one positive thing that I want to sort of get in here, that technology is accelerating globally. And the major corporations are, in my opinion, the big beneficiaries of this.

06:43 The major corporations use technology. You don't have to own a tech stock to really be long tech, because the major corporations, whether it's Starbucks or Coca-Cola or any of the major corporations, Procter & Gamble, they benefit from the acceleration of technology. They wouldn't be possible if it weren't for technology. Technology – you know, we started in the 19th century getting rid of sailing ships and replacing screw propeller ships. Then we had the refrigeration. We had the railroads. We had the telephone. We had the telegraph. We have airplanes. We have the internet, fiber optic cables. All of this makes it possible to manage and run a global corporation and global brands.

07:33 Here in Hong Kong, you know, you walk down the street, so many things are the same. And some people don't think that's bad. But, I mean, you have all the European brands here as well. You know, American music, everybody knows all of the major artists all over the world. This has become globalized. And the corporation is the largest. Singapore, the bank with the largest number of employees is Citibank. You know, American corporations are really the – that's where the center of technological innovation is going on. And Japan – Japan has a lot of great corporations.

08:19 But Japan has a bad economic model. It's very protectionist. And the Japanese home market is protected from imports. And that's really hurt the major corporations in the long run. They'd be better off if they didn't have that protection. And I think Japan is going to have to change its economic model. But you asked me a question, what should this matter to Americans? And all of the major countries basically have the same problems, although some are – Europe is much more socialist so far anyway than the United States. So far. Yeah, that's another subject. But, I mean, the U.S. is still freer, and information flows very freely in the U.S.

09:05 That's important. You know, let's talk about the subtitle of your book. We've got a couple more minutes left before we have to end this segment, but I'd love to have you on again in the future. But how to preserve your wealth in the coming crisis. Our average listener out there is more worried about their own financial situation, what they're going to do going forward, what they can do to minimize the effects of any crisis that does come in the future. What would be your blanket statement kind of recommendation? A couple of – one is take some money and put it in currencies that are not – basically have governments that are not over-indebted. And it's not so – it's actually getting easier for Americans to do this. I mean, if you have an account at one of the major brokerage firms, you can buy Singapore dollars. You can buy Hong Kong dollars.

09:53 You can buy Swiss francs. You can do all of this online. So I have some money outside the U.S. in – outside the U.S. dollar. Now, the second thing, though, I've become more and more a bigger fan of the American and global corporations. They will be able to fight off governments better. They'll be able to deal with all the regulations that are getting thrown at them. And smaller companies, I think, are going to have more of a problem. And the big companies, as I said, I think they're the beneficiaries of the acceleration of technology. And that favors capital. That favors the companies that use the technology. You don't have to figure out whether Samsung or Apple is going to be the winner.

10:43 Because all of the major S&P companies are using technology. So I'm sort of bullish, I guess, on relatively bullish. I think you have to own the stocks of the major corporations. It can't be 100% in cash. And I'm really not a fan of bonds. So that's – you know, bonds, you're supposed to buy bonds when you get old and clip your coupons. But how much are they worth today? I mean, it's a reality. And if we flip from – we're in a deflationary environment right now or disinflationary. If we flip to inflation, bonds are all going to have capital losses. And by the way, I am not a gold bug.

11:30 The gold is – in a disinflationary environment, gold is not a great investment. And if we flip to inflation, it will probably keep up with inflation. I don't think governments will ever allow a gold standard to be reinstituted. I have a lot about this in the book. And I'm a – the gold standard worked from 1880 to 1914. It was like the economist heaven. It was great human progress, low inflation, economic growth. Capital flowed around really one currency. It was gold. But 1914 ended it all with the World War I. And it never got put back together correctly. And I don't think governments now will ever allow gold – the gold standard to return.

12:17 Because that would mean they'd give up control of monetary policy, which they will not do. Folks, his name is Dr. Peter Treadway. He's joined us from Hong Kong. And the name of his book is Investing in the Age of Sovereign Defaults, How to Preserve Your Wealth in the Coming Crisis. Peter, thanks so very much for your time today. Well, my pleasure. Folks, we'll be right back after this. We'll be right back.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 In this FinancialSafari.com interview from mid-June 2012, Peter Rashawn and Coach Pete interview former pilot and American hero, Sully Sullenberger. And welcome back into the Financial Safari, your weekly show aimed at educating you on all aspects of your money, your finance, and your financial decision-making. And Coach Pete, we have a very special guest on for this special Father's Day weekend edition of the Financial Safari. We have Sully Sullenberger, the captain that had the miracle in the Hudson, of course, that landing. And he's writing books, in fact, a multiply published author now, several books out. And we wanted to bring him on the show because he is really making a difference in people's lives.

00:49 And welcome in, Captain Sully. Great to be with you. Thank you. Coach Pete, we wanted to talk with him about that miracle in the Hudson and about the books that he's been writing. Yeah, that was Flight 1549. I'm sure Sully remembers that well. Yeah, January 15, 2009. That's one of those events that people remember where they were when they first heard about it. I was telling the producer of the show, we'll never see an event like that again. I don't think no one got hurt. Well, everybody survived, all 155 people. We were very grateful for that. A lot of people did their jobs exceptionally well that day. Now, you've become a pretty well-known author here. I wanted to talk about your, I mean, the book that I like, Making a Difference, Stories of Vision and Courage from America's Leaders. What inspired you to write that? And let's talk about some of the leaders you talk about in the book. Well, of course, leadership is incredibly important, especially now we're facing as a society so many large and complicated problems that it may take generations to solve.

01:41 And so these are things I've been thinking about my whole life. And of course, in the last three years, these mind-bending three years that we've had to travel the world and meet world leaders from all walks of life, I began to hear these incredible, sometimes funny but always inspiring stories that I just had to put on the page and I had to share. So what were some of the best ones that you found in the process of writing the book? Well, the very first one we profile is Admiral Thad Allen, the former Coast Guard Commandant, who was brought in in the darkest hours of the response to Hurricane Katrina to fix it. And just through the power of his personal leadership and courage, he was able to turn it around with incredible skill and quickness. And he did the same thing with the Deepwater Horizon oil spill in the Gulf and with the 2010 response to the earthquake in Haiti.

02:30 Another one is Jack Bogle, the founder and retired CEO of the Vanguard Group, a mutual fund pioneer, an absolute maven in terms of the financial world. Another is Jim Senegal, the co-founder and recently retired CEO of Costco, who is someone who's done well while doing good. He's found a way in a very difficult business, retail, to reward his shareholders, to provide great value for his customers, and still make it a great place to work. Yeah, I fought Costco for a while, but I went in there a few months ago, and it really does have some great savings for the customers. And I was amazed. If you look at the name badges of the employees who worked at Costco, they have the year that they started, and it's often 20 or 25 years ago that gives you a great indication of if it weren't a great place to work,

03:16 they wouldn't have stayed that long. And interestingly, one of the bellwether measures that Jim Senegal used to see how he was doing at Costco was that the price of the Costco hot dog has been $1.50 since 1985. That's 27 years now. And I can't think of anything else that's been the same price for 27 years. Right. That's good savings. Well, at Costco, they seem to have a system. They seem to have systemized how they have a process to getting the product to the stores, getting the product in the consumer's hand, and getting that savings. And I think having a system is very important to many things in life, training a pet, educating a child, and really making a difference. And how much of the system, the training, the preparation, and the exit planning, Captain Sully accounted for all of your passengers to be able to survive that miracle on the Hudson.

04:05 Well, it certainly was all that and more. It was a culture in which we operated. Again, it takes great leadership to have an effective and collaborative and a safe and high-quality culture. And so these people that I profiled in there from all walks of life, a very diverse group, some particularly well-known but whose stories have not been completely told, and some not well-known at all, but all of whom viewed the world in the same way, as an opportunity for good. And as one of them says, Gene Kranz, the legendary NASA flight director who with his team helped bring Apollo 13 safely back from around the moon, he says leaders have to be able to check their ego at the door. They have to be able to do things for the right reason, you know, for the greater good of the group and not just for their own personal needs.

04:54 Absolutely. You know, your goal as a pilot was to get 100% of the time, get the people who got on the plane, let them get off the plane safely, correct? Absolutely. And that required great vigilance on every flight because, you know, out of a 42-year flying career, 20,000 hours on the air where we worked very hard to make it routine and never be surprised by anything, I never knew when or even if on one day I might face some ultimate challenge, but I had to be ready for whatever might happen and be able to solve the problem the first time, even if it was something like this that we'd never specifically trained for. And you had your flight planned to begin with, but you also had to have some contingencies in place if things didn't go as planned. Absolutely. That was one of the challenges of being an airline pilot when things go so well, 99.99% of the time, but being vigilant enough and avoiding complacency.

05:42 So if something bad did happen, you could just, you could handle it really well. So, you know, it absolutely required great commitment, great leadership to do that consistently on every flight, on every day for years. You know, I say that because there are some amazing parallels between being an aircraft pilot and also being a financial planner because things don't go as planned a lot of times in the financial world. Matter of fact, there are some Wall Street firms that say that people only have a 92% chance of not outliving their money when they retire. In other words, they have an 8% chance of not having money through retirement. And we often joke that if, like, if you were getting ready to take off and you came through the intercom and told folks that you had a 92% chance of landing safely, I think everyone would pull the slide and jump out before you could take off. Yeah, that wouldn't be good enough for me.

06:29 I mean, so what we've done in aviation is we went from, in the decade from 1967 to 1976, your chances of dying in a major jet airline accident in the U.S. were about 1 in 2 million today. They're about 1 in 20 million. So we've kept on getting it stronger and better and safer all along the way. And we kept innovating like we did on that flight that day. By the way, my favorite definition of innovation is to change before you're forced to, either by regulation, by competition, or by circumstance. And the more and greater you're able to change, the more of a competitive advantage it becomes and the more you're able to turn adversity into an opportunity. Well, I've talked with several motorcycle riders, Captain Sully, who said that there are really two types of riders, those that have crashed and those that will. Lucky that it's not that same way in the air because you are prepared,

07:19 and it's always better to be prepared than to be surprised. But regularly checking up on your progress and doing those maintenance inspections and seeing how you have been doing and making sure that you are staying ahead of that curve, that's vitally important, isn't it? Oh, absolutely. In fact, one of the takeaways of the book, and there are lots of leadership books written for or by CEOs or for salespeople, but my book is written for everyone, whether you have a big job or not, a fancy title or not. These are techniques that, from these very personal stories, these dozen people we interview, that everyone can learn, that each of us can learn to be more fulfilled at work, more effective at work, at school or at home. And even if you don't have a title, you can be a leader, and many people are. And so there are a lot of people right now in every walk of life who are doing these things,

08:05 who are being leaders. They not think of themselves that way, but by the way they act and the way they treat others, they are. We are talking again, friends, with Captain Sully, of course, the pilot for that miracle on the Hudson, where all of his passengers did survive his emergency crash landing into the Hudson River several years ago. He has also authored some great books, Making the Difference and Highest Duty. We've had a great time having him on the program. And another couple questions here from Coach Pete. Well, I know you went to the Air Force Academy to begin with, correct? I did, and then graduate school at Purdue and then University of Northern Colorado. Yeah, so, I mean, it takes a lot of skill to do what you've done. And retirement was just around the corner when this accident happened. And, I mean, what would Sully have been doing if this accident didn't happen?

08:51 Oh, I was going to keep on working for a long time. I mean, I'm a lifelong learner, and I had become an expert in these things over my whole career. I'd done more than just fly, I'd become an expert in managing risk and leading in difficult situations. In fact, that was one of the classes I helped develop at the airline and taught to many of our colleagues. So I was going to fly as long as I could, probably until at least age 65. Because, you know, in the airline industry, we've had a lot of difficult challenges, airline bankruptcies, loss of pensions, huge pay cuts. And so I was setting myself up for my next career even well before this. Well, Sully, a drill I like to do with everyone I talk to is ask them if they could get into a time machine and go 10 years into the future, where do they see themselves? I see myself doing more of what I'm doing now as a speaker, as an author, as a consultant to industry,

09:42 as a CBS News aviation and safety expert doing on-air commentary about important issues that people care about. I'd like to do more of that. I want to continue to make a difference. In fact, my personal goal is that even though we, my crew and I, and all the first responders, were able to save the lives of all 155 passengers and crew three years ago, that if I am diligent and work very hard, and if I'm particularly adept, and if I'm fortunate, it may be that my greatest contributions lie ahead. And whether it's in quality control and process control or safety for industry, or whether it's applying what we've learned in aviation to medicine and improving patient safety, which I'm working on with many others right now, I hope that we can continue to make important contributions and make a difference. I saw a great article on you almost right after it happened in People magazine.

10:30 I don't remember that article or not. I do. I remember it well. There was a cover photograph of us. That was February 2009, so just a month after our emergency landing in the Hudson. And the writer actually was in my high school. She went to my high school. She was one year under me, Nicole Wysensee. Oh, yes. I remember her well. That was a well-done piece. I had a crush on her in high school. That transitions nicely into my next set. It's on the Internet. She'll find out. Speaking of which, Captain Sully, you talk a lot about making the most out of relationships. What do people need to be doing and thinking about when they are forming and building relationships to really help make the most out of each relationship that they have here in life? I think that they need to do what many of us do and what I try to do every week when I would come to work as an airline captain.

11:21 What people don't understand or appreciate about what it's like to work for a large airline is that we fly with people all the time that we've never met before. And so at the beginning of a week of flying, one of the responsibilities of the captain after the introductions are made is to quickly take this collection of individuals and form an effective team to align goals, to set the proper tone, to open channels of communication, to create a shared sense of responsibility for the outcome among all of us. So if something bad or some challenge were to happen on the very first flight, that we can as effectively deal with it as we'd normally develop over weeks or days of working together. And so it's that kind of vision, a kind of personal connection, a kind of creating an environment in which we can all do our best work.

12:09 That's so important no matter what we do. And so, again, leadership is really the key. And then making a personal connection even with large numbers of people is what the best leaders are able to do. A group of strangers form a team as they all ride together in an aluminum canister in the sky. We're talking with Captain Chesley, Sullenberger, and Sully. Captain Sully, we certainly appreciate the time. Thank you so much for all you've done. And we appreciate the great information that you've shared with us in your books. Thank you. It's called Making a Difference, Stories of Vision and Courage from America's Leaders, available for Father's Day. All the best, Captain Sully. Thanks for being with you. Thank you so much for listening to this interview on the Financial Safari. Remember, folks, if you have any questions about this interview or your financial situation,

12:55 you can email the team from the Financial Safari at comments at financialsafari.com.

See omnystudio.com/listener for privacy information.

Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 In this FinancialSafari.com interview from early February 2012, Coach Pete interviews former SEC Enforcement Branch Chief Pat Huddleston. And welcome back into the Financial Safari. And this week we have a very special guest, folks. I mean, you need to turn your radio volume up. You need to get a pen out because we're going to have Pat Huddleston on. And Pat is a former SEC Enforcement Branch Chief. And now he's an author and he's on top of things, folks. He's a watchdog. But his new book is called The Vigilant Investor. A former SEC Enforcer reveals how to fraud-proof your investments. Pat, welcome to the show. Thanks, Coach. It's good to be with you. Well, this is a fascinating subject here.

00:46 And unfortunately, Pat, and very unfortunately, it seems like every single week there's a new scam that pops up. It's like mushroom around a tree, isn't it? It is. And it's more than every single week. I actually blog about a new investment scam every single weekday and usually have to choose from between two or three that have broken in the previous 24 hours. I mean, so is the reason why or why are people falling for these kind of scams? Is it too good to be true, but they want to believe anyway? Well, you know what it is, Coach? It's something that people haven't heard before. And it's something we're coming to understand a little bit better as we are able to map the brain and how it works. It turns out that every healthy human is almost pre-wired to fall for this. We have these certain cognitive biases that lead us into these scams. And it's not that it's too good to be true, but they want to believe it anyway.

01:33 What I tell people at Investors Watchdog, I say, listen, the truth is, if it sounds too good to be true, you're talking to an amateur scam artist. I mean, people hear about these Nigerian email scams, you know, just let me borrow your bank account for a little while, and they tend to think that that is representative of the scams that are out there, the scams that are going to try to take your money. And they think, hey, you know, I don't need to be too smart to avoid that, so I'm safe. What I tell people is those Nigerian email scamsters are the guys who flunked out of scam school. They are the lowest level of competency operating out there. The scam that is most dangerous to your life savings doesn't look like a scam. I've blogged on three scams in the last six months that promised a whopping 5%.

02:19 So what I really try to get across to people is, look, sure, it's true that if it sounds too good to be true, it is. But if it sounds reasonable, it might also be a scam. So you really have to understand a little bit more about how you think in the investment context in order to protect yourself. So those are the polished ones, I guess, that people, hey, this is legit because it's not too good to be true. But then, in fact, it's worse than the ones that are too good to be true sometimes. Oh, that's exactly right. Because, listen, and these guys have learned from Madoff that you don't have to promise the world. Madoff, his returns were suspiciously consistent. He was able to keep them so, obviously, because it was a Ponzi scheme. But he wasn't promising returns that were even as much as some of his hedge fund counterparts were earning. So, you know, the midway competent investment scamster is going to promise you something,

03:07 a percentage point or two above what a legitimate investment can earn. Because he knows that's all he has to do to get your attention. He's not going to promise to double your money in 90 days. Well, the Vigilant Investor is, of course, based on your experience as a former SEC enforcer, that's Securities and Exchange Commission, folks. And as well as your current work as an SEC recommended receiver and CEO of Investor's Watchdog, what motivated you to write the book? Well, Coach, I had just, as an attorney, private attorney representing investors, after leaving the commission, I had had to tell so many senior citizens that their life savings was gone and it wasn't coming back. And to be the one to have to deliver that news was tough, but not as tough as them having to receive it. And it was, and I remember the day in July 2006, I'd had to have a conversation with a

03:53 guy like that. He was about 70 years old, white hair, professional, and he had come to me because he'd known about my SEC experience and that I sometimes was able to get people's money back. But he had lost his to a free agent scam artist who didn't work for a broker-dealer, didn't have an insurance policy. And I had to tell him, look, we could get an impressive verdict, but we're not going to be able to collect on it. And so after I said goodbye to that man, it hit me like a physical impact. And I'm not, that's not hyperbole. I felt an impact in my body and thought came to me at that moment, when are you going to get off your can and try to stop this from happening rather than just have these sad conversations with people? And so that's the moment that Investors Watchdog was born and that's what we've been doing ever since. Of course, the desire to get the word out there led us to the blog and then finally to write

04:41 the book where I tell people, you know, how we go about investigating these things for our clients. Well, you've got a fascinating gallery of pictures there, like fancy offices and, and different scam opportunities or what they spent the money on at the vigilantinvestor.com. And I recommend people go look at that because you, like you said, it's somebody's life savings we're talking about here. And you can't go back and get that if it's scammed away and lost. I mean, it's gone, isn't it? Well, that's right. And it has to be before you give them the money, because once you give your money to a Ponzi scamster, it's not coming back. It's not like you can see how it works for 60 days. And if you don't like it, get out. They'll send you a little bit of money, but it's somebody else's money. Yeah. And the court appointed receiver is going to want that back from you eventually. So it's got to be on the front end.

05:28 You know, one of the things too is you talk about the fact that just because people are dealing with like a major brokerage house, one that's advertised on TV, the millions of dollars of advertisements per day, just because your broker works for them doesn't mean he or she might not be doing some bad things as well. Correct? Oh, that's exactly right. I mean, the biggest firms on Wall Street have ripped us all off. Nobody remembers Elliott Spitzer for anything other than his most recent trouble. But back in 2000, 2001, he exposed that the biggest firms on Wall Street were recommending that we buy things while believing in their hearts that they were lousy and were going to crash. That is just the name of the game. It's all about money. The moral in that industry is more money is good, less money is bad. Now, there are an awful lot of good ethical people in the business, but they work in a

06:14 system that sort of leads them to at least consider misconduct. And so you just, you have to account for that by doing your investigation on the front end. We do a Brokers Behaving Badly segment on the show every now and then. It's tough for us to pick out the most egregious one on the scam wise because there's so many of them out there. Boy, there really are. I sympathize. We could do a whole show every single day about all the scams out there, but I don't know if, I guess people like bad news. People like to listen to bad news. That's why the bad news sells on the TV. But to me, people just need to be a little bit more vigilant before they get into things. And how much money has been lost per year in these scams out here? Well, the FBI, the latest statistics are $40 billion every single year in the United States alone. And that's depending on how you count it. That's between one and two Bernie Madoff worth of losses every single year.

07:02 And it's the same the world over, Coach. It's, you know, sometimes I blog on scams in Europe, in Australia, in Asia. You know, the East is opening up, but China is just chock full of investment scamsters. So you just have to learn a little bit about how you think and learn some of the tools that we put in the book about how to check for this on the front end. And I'm not trying to scare people away from investing altogether, but I just wanted to know the lay of the land. And the way we think, we naturally sort of shy away from learning the truth. We don't want to feel vulnerable. And so we don't really go there, if you understand. But we have to. And researching the advisor's history sometimes is good, but sometimes that doesn't tell you what they're going to do in the future. So we see a lot of the scams pulled off by people with no criminal record whatsoever beforehand.

07:50 Yeah, that's the most challenging case, isn't it? And that's why you have to look for, they may not have any disciplinary history. And that's why there are other things you need to check. You need to confirm whether they have the educational history that they're telling you about. And you have to know how to confirm that things are going well all along. As your monthly statement comes in, there are tactics for making sure that you're really have in your account what they say you have. And we tell you how to make sure that you're writing your check, independent third-party custodian rather than some company that this advisor has set up. Absolutely. Receive your money. Oh, yeah. And you feature that on your website again, thevigilantinvestor.com, where you show a very, very complex scam that was pulled off with a tremendous amount of internet equipment in one room and all sorts of things where people would fall for because they walk into a very

08:36 immaculate office and they just assume that the people are legit. And that's the farthest thing from the truth many times, correct? Well, that's right. That's exactly right. Technology has made it much easier to pull off these scams. And people need to just sort of reject the idea that it's only the stupid, the greedy, or the gullible who fall for these things. That may be true as regards a Nigerian email, you know, double your money in 90 days. But regarding the scams that are most dangerous to you, no, that's not the case. Well, I'd love to double my money in 90 days, but we know that that's not going to happen usually. Now, we've got a couple minutes here, and I want to have you on again in the future because there's a lot of things to talk about. But let's go through what are some of the common frauds that investors need to know about. And hopefully, folks, if you're listening, you haven't fallen for one of these that are common right now. Yeah. The thing that's most dangerous right now, Coach, is promissory note scams.

09:22 We see that a lot when the market is volatile because people want stability. And so whatever the sort of the underlying representations are about how these guys are going to make money for you, they lay on top of it a promissory note, you know, just a simple contract that says, I promise to pay you back your investment on this date with this amount of interest. Now, in a lot of cases, those things have to be registered under the securities laws, but they're not. But you can understand how the promissory note makes any investment, any scam even, seem safer because it's a signed contract, and we all believe that a written agreement is enforceable, and it purports to pay you a set amount of interest. It makes you feel like, you know, your returns are not going to fluctuate with the market since you've got something steady.

10:08 And, you know, mentally, we all associate interest with government obligations, savings bonds, CDs, things that tend to be safe. So be very aware of anything that includes a promissory note. Secondly, I would say be really careful of anything that's involved real estate these days. You know, the real estate crash is in the news, and some people are out there saying, hey, look, we can make a lot of money from distressed real estate. Really, Coach, anything that's in the news, scam artists will grab a hold of and use as the center for a scam. Yeah. And because CD rates are so low, many people are trying to live on their savings. So they fall for these artificially high interest rates of promissory notes, and it sounds like a promise, so they think it's legit. And we see that a lot, too. We see it when they compare the promissory note to a real guarantee through the insurance

10:54 companies, whether an annuity, an immediate annuity, or maybe one that has an income rider on it. And they usually, sometimes, unfortunately, the promissory note may have a little higher interest rate, so they put their money in an unsafe promissory note instead of that insured contract through an insurance company. Well, that's right. And you hit upon it when you say, you know, maybe just a little bit more. Again, they're not going to promise you the moon. It's just a percent or two more than what a legitimate investment can earn. Well, we've got so many more topics to talk about, folks. We're going to have Pat Huddleston back on. Pat, of course, is a former SEC enforcer. He's author of the book, The Vigilant Investor. And tell them about your blog, how they can get in touch with you. Well, they can read the sample chapters, see what the reviewers are saying, very nice things, at thevigilantinvestor.com. If you want to visit us at Investors Watchdog, that's the email address.

11:40 If you want to email me directly, it's pat at investorswatchdog.com. But I encourage people to go on that site and follow the blog, because reading about these scams can help protect you. Pat, thanks a lot for your time today. My pleasure, Coach. Look forward to being with you again. Thank you so much for listening to this interview on The Financial Safari. Remember, folks, if you have any questions about this interview or your financial situation, you can email the team from The Financial Safari at comments at financialsafari.com.

See omnystudio.com/listener for privacy information.

Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 In this FinancialSafari.com interview from November 2011, Coach Pete interviews entrepreneur Cameron Johnson. And welcome back into the Financial Safari. Of course, folks, your weekly show looking inside the complex financial world. Each and every week we like to go out amongst the world and find somebody that I want to bring in onto the show and basically get people to pay attention to. And this week we are very lucky to have Cameron Johnson. Now, who's Cameron Johnson, you're saying? What better person than to tell you who Cameron Johnson is than Cameron Johnson himself? Cameron Johnson is from Roanoke, Virginia. He's joining us live on the Financial Safari. Cameron, welcome in. Hey, thanks. It's great to be with you.

00:45 Now, who is Cameron Johnson? First of all, tell folks how old you are. Sure. Well, I'm 27 years old now, but I started my first business when I was nine. And it was a small printing business, printing greeting card stationery, anything that I could print for friends and family and neighbors. And when I was 12, I started selling Beanie Babies over the Internet. And that's when I started making real money. I started making $50,000 a year when I was 12. And then I just expanded into a number of different other Internet companies. And when I was 15, my company was doing about $15,000 a day in revenue. So when I was in the ninth grade in high school, I was getting checks in the mail for about $100,000 a week. I made my first million before I graduated high school. And then I went on to start a few other Internet companies and then do some other things. And I've always wanted to try and take what I did and share the message with as many people because I consider myself no different than anybody else.

01:36 I started with, obviously, a fourth grade education when I was nine and didn't have any money. And it's all about where you start and where you build over time. There's a mantra in the news media world, and it says, if it bleed, it leads. And so we always hear negative news. But in this day of negative news and people complaining that they can't find a job and everything, isn't it true, Cameron, that really life is what you make of it? I agree 100%. And, you know, part of my success, obviously, can be contributed to the Internet because, you know, if it weren't for the Internet, I obviously would have been limited to a lemonade stand. But at the same time, part of my success can be attributed to the fact that I didn't know any better. I hadn't been taught to think inside the box. I hadn't grown up my whole life with people telling me, no, you can't do that or anything else. And if I had, I would have just, you know, worked that much harder to prove somebody wrong. But, you know, I think with the economy the way it is now, and, of course, that's becoming a cliche, the economy is great in many pockets of society.

02:29 Obviously, if you don't have a job, then the economy is not pretty great for you. But what that means is, you know, I've had entrepreneurs tell me, hey, I can't start a business now because I can't get a loan. And what I say is that's the best thing ever. I've never taken a loan, and I had 12 different businesses I started. They were all profitable. And they were profitable because I started with as little capital as possible. And I think when you start small, one, obviously, it's easier to make money. And two, it doesn't matter as much if you fail. You know, you just pick yourself up and you go on. But I think by being limited with access to capital, I think it forces people to be creative and think outside of the box and bootstrap and figure out a way to get things done that don't, you know, without, you know, using capital. I always say if I had access to millions of dollars with my different businesses, there's no question that it would have ruined not only my idea but my company's.

03:16 And there's no question we probably would have lost money instead of made money. Well, you're more frugal with your money if it's your own money. And that always amazes me, too, when people say they can't open a business because they can't get a loan. What do you need a loan for? So you can buy fancy furniture that you're never going to use? Right, exactly. I mean, you know, what's your return on investment on something that just sits there? I've always been one that's been interested in ideas. And I think with the Internet, it just enabled me to take my idea. And I'm not a tech person. I'm not a computer person. I can't program websites. Even though I had Internet companies, I always just surrounded myself with people that complemented my skills and, quite frankly, were probably smarter than me. And I might have the idea and I might put up some money, but it was always a matter of teamwork and, you know, surrounding yourself with people that can complement your skills so that you work well together. Absolutely. Well, we have a mantra here in the financial planning world is that no financial planner can do everything.

04:03 That's why I surround myself with attorneys and CPAs to handle the estate planning and the tax planning. I just do financial planning. That's an 80-hour or more-a-week job as it is. Exactly. And that's the same way. I hired my first attorney when I was 12 years old. I've been paying taxes for a good 15 years now. And that is what it's all about is surrounding yourself with experts. You know, I've been in a program for probably nine years now called The Strategic Coach. And The Strategic Coach teaches you, you know, do more of what you're great at and focus on your unique ability and surround yourself with other people whose unique ability is something different. And hire them to do whatever it is that you need so that you can focus on what makes you money. So what are you doing these days? So I'm doing something that's totally different. If I gave you 100 guesses, you probably wouldn't get it. Totally different than anything, any of my past businesses. I'm the president of a Ford and Lincoln car dealership that my great-grandfather started back in the 1930s.

04:54 And I just recently took over the company. And we have 100-plus employees. And we're growing. And we're doing well. And the economy has obviously dealt the car industry some bullets. But we're doing well. And we're thriving. And it's obviously something that's different from an Internet-based business. But that's probably why I love it, you know, the challenge every day. Yeah. Well, there's a lot of challenges out there. And getting back, I saw you on Donnie Deutsch years ago, you talked about how you sold Beanie Babies. And they were your sister's Beanie Babies, correct? Yes. And she was six years old when you basically bargained with her. You gave her some money for her Beanie Babies. And then you went on the Internet and sold them for a lot more than that. You're exactly right. So I talked to my sister, which, you know, it's not hard negotiating with a six-year-old. I gave her $100 for her Beanie Baby collection. And in five days, I sold her for $1,000 on what was then a brand-new website called eBay. And it was in 1995.

05:40 And I said, wow, if I can make $900 in five days selling Beanie Babies, I need to figure out a way to get more Beanie Babies. And, you know, one of the lessons that I learned just growing up as a kid and just being, you know, adventurous, if you will, I learned that sometimes it's easier to ask forgiveness than permission. So what I did was I looked up the company that made Beanie Babies, and they're in Illinois. And I just decided to type up a letter on my computer, never told my parents, never asked permission, and mailed this letter and said, I'm the president of Cheers and Tears printing company. I'm interested in selling Beanie Babies over the internet. Please send me more information. And they basically sent back an order form, and they approved me to be, you know, an online retailer for them. And I was sort of off to the races. It was easy, obviously, because you had a product where you had people camping out at, you know, shopping malls and Hallmark stores and that kind of thing.

06:26 But I just realized that I could instantly make more money selling a Beanie Baby-type physical product than I could, you know, printing greeting cards. And that was just a stepping stone in my businesses. Well, let's look at this now. You've always had a positive attitude, it sounds like. What can you tell somebody out there who may be not as positive as they should be on their own financial situation or their own situation in general in life? Well, the first thing I would tell them is that they're the only person that can change it. You know, the world around them is going on. And, you know, that might not be the thing that they want to hear or need to hear. But it might be exactly what they need to hear is that, you know, you're the only person that can change it. The first chapter, I wrote a book a few years ago called You Call the Shots, Succeed Your Way and Live the Life You Want with the Secrets of Entrepreneurship. And I think that that is what it's all about is the first chapter is called Put Yourself

07:15 Out There. You can be the smartest guy in the world. You can have the best invention in the world. You can have a cure to cancer for all that matters. But you've got to be able to put yourself out there and go and take whatever your idea is and market it and turn it into something. And you can't just wait on someone to come to you. I really think it's about what you can create. And it's about taking something from nothing and turning it into something. Absolutely. Now, for folks that are out there listening, maybe they say, well, I'm retired. I don't need to listen to this. But I do have a grandchild or child that may benefit. Have you written any other books? Yeah, well, my book kind of follows my story from when I started, when I was eight all the way. It came out when I was 22 or three. And then I worked for Oprah on a TV show she did for ABC. And I was on her show pretty regularly. And so that book was called You Call the Shots.

08:00 And what I love about it is that I'll get an email from a 12-year-old who says, hey, I'm ready to start a business. I'm ready to go to the next level. And I'll also get an email from someone that's 80 years old and says, hey, this is one of the first emails I'm sending. But this new world of the internet keeps me connected to my grandkids or keeps me connected to my children, wherever they are. And I think that's what's so powerful about the internet is that it opens you up to a global marketplace if you're a business person or an entrepreneur. But also, even if you just use it to keep in touch with your family, it's obviously an inexpensive way to do that. You know, Cameron, several years ago, I was in someone's house and they had a photo, one of those digital photo frames. And this one would actually update itself through the internet. So like if these were grandparents, so anytime that they took a picture of the grandchild from halfway across the world, it would update onto their photo album.

08:48 So they wake up in the morning and new pictures would be there. But I think that company went out of business. I don't know if there's one out there, but that's a great idea for somebody. Exactly. There's a perfect idea. And talking about, you know, this time of year, Christmas gifts and holiday gifts, I think, you know, that's kind of a no-brainer. I think, you know, we're going to see more and more of that technology. The cost of technology just continues to come down. I mean, you know, the cost of everything else goes up, but the cost of technology goes down. I remember when I spent my life savings when I was, you know, maybe 11 years old from my printing business and I bought a new computer and I remember it was a compact and I remember it was like $4,800 and it was literally every dollar, you know, I had and I had to give the cash to my mom so she could go to the computer store and so that I could get it. And, you know, obviously you can buy a new computer today for less than $400.

09:34 So it's just amazing that the opportunity costs have come down so much for starting an internet business. It's just like a domain name alone used to be $70 through Network Solutions and now you can go to GoDaddy and buy yourownname.com for $7. I mean, there's literally, the barrier of entry just couldn't be any easier. Absolutely. And one final point. Now we're talking to Cameron Johnson, folks. He was a millionaire by the time you were, was it high school, right? Yeah, probably about 17. 17 years old and right now he's 27 years old. So this is 10 years later. Cameron, if there's a template for success, what would it be? I think there are two keys. The first is to put yourself out there. You've got to go for it. You know, obviously you need an idea, but you've got to go for it. The second thing is to start small. I meet so many entrepreneurs that think they either need to borrow money from friends or

10:22 family, they need to get a bank loan, or they want to blame that as the reason for them not starting. It's easy to say, I don't have enough education. I don't have enough connections. I don't have enough money. You need to just get started and you're going to learn along the way. And you can write a 20 page business plan or you can write a 200 page business plan, but I bet your business starts making changes probably after page three. So it's more important to just get started and get going. You can plan forever, but you've got to be, you got to get started and take action. You just identified one of the major enemies in anything in life. It's called procrastination. Yes. People will find any reason whatsoever not to do something, won't they? Yes. And they'll find an excuse as well. You know, I've always just been one that maybe I was naive growing up and obviously looking back, I probably was, but I just said, hey, why not me?

11:09 I would pick up the pages of Business Week magazine as a teenager and I'd say, hey, why can't I do that? You know, I have the same tools at my fingertips, the computer, the internet, whatever. That's what it's all about. It's connecting people. Hey, Cameron, Rob, our producer has a question for you. So did you, if you got in trouble in high school, did you get grounded from your business? You know, it's funny. My mom used to say like she would literally have to set her alarm to wake her up at like two 30 in the morning to tell me to go to bed. But as far as grounding me, when I started buying my own computer, when I was 11, I used to always say, how can you take it away from me? That's not grounding. That's stealing. So it's just like my parents helped me set up my own checking account when I was 11. And my mom got her own when she was 14 and her dad passed away. So she didn't think it was that big of a deal. So I got my own checking account when I was 11. And I used to always say, you can't open my mail.

11:56 It's illegal. It's addressed to me. So I always tried to keep everything private and close to my chest and just did everything myself. Folks, Cameron Johnson, 27-year-old multimillionaire from Roanoke, Virginia. Cameron, I hope to have you back on in the future on the Financial Safari. Thanks. We'd love to do it. Appreciate your time today and having me. Thank you so much for listening to this interview on the Financial Safari. Remember, folks, if you have any questions about this interview or your financial situation, you can email the team from the Financial Safari at comments at financialsafari.com.

See omnystudio.com/listener for privacy information.

Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 And welcome back into The Financial Safari, your weekly show aimed at educating you on your money, your finance, and your financial decision-making, now turns to a very special guest. We have Harvard economist Harry S. Dent Jr. joining us on the program. He is the author of many books, and your most recent book, Mr. Dent, is The Great Crash Ahead. Tell us a little bit about why you've authored this book, The Great Crash Ahead. Well, you know, I mean, Pete, we had books way back to the late 80s, early 90s, talking about the great boom ahead and how the baby boomers would drive up our economy with spending, borrowing, house buying, and all this stuff. And now, you know, in 2008, we came out with a book, The Great Depression Ahead, saying, hey, baby boomers are going to save, not spend. The economy is going to go down. And we have the greatest debt and real estate bubble in history. So this debt and real

00:49 estate bubble has to unwind and deleverage over the coming years. And it's going to cause like a depression-like environment. The government's trying to stop this, but they're not going to be able to stop it. So we said that in the last book, 2008, the government's going to stimulate, it's going to work for a while, but then it's going to fail. And then we're going to go back into a deeper crisis. So we're telling investors and businesses, hey, we're getting near the end of this stimulus period. The government's running out of bullets. You've got to protect yourself against the next crash, which will be a lot like the last one in 2008, 2009, where everything goes down. So you have to protect your assets and reinvest after the crash, which will probably be maybe two years or so from now. And so what do we need to look out for? Or are we already seeing the

01:37 warning signs, perhaps domestically or overseas, that this great crash is upon us? Well, again, first of all, Pete, I mean, we think the great crash already began. I think the stock markets peaked from this stimulus rally in late April, early May of this year. I think commodities peaked as well. I think we're in the first downturn that happens when people say, oh, something's a little wrong. And then we probably get a rally until late this year saying, no, it's probably OK. And then next year we get into a deeper downturn, like we saw from May 2008 to November of 2008. So that's what we're generally looking at. The government's run out of bullets to stop this downturn. The debt keeps hanging out there for U.S. Home prices are not coming back. Unemployment's

02:27 not getting better. And Europe's starting to melt down after we melted down in 2008, which we think triggers the next crisis over the next few years. So again, it's just like realize we've had this great bubble boom in everything, stocks, real estate, commodities, gold, silver, everything you own today since the early 80s. Hey, take your profits, get safe and let this bubble burst, which the government's trying to prevent, which they can't with 92 million baby boomers moving towards saving instead of spending, and then reinvest when the bubble crashes in different areas, bonds, stocks, and real estate. And in the book, we discuss how these different areas are likely to unfold over time. They won't all bottom at the same time. Well, Harry, looking at the market hovering around 12,000

03:14 on the Dow, and many people are getting excited about that. Isn't this a good time, in your opinion, to maybe lock in some gains and get out of the market for a while then? Yeah, we've been telling people recently, we told people to get out at near these levels back in late April, early May, in August again, and we're saying, I still think the tendency of the stock markets is to rally into year end, especially in years like this. So I think between now and year end, yeah, you lock in your gains. Basically, whether you have gold or U.S. stocks or Asian stocks or whatever you have, sell on rallies. Sell on rallies, get out, and just wait for this crash to unfold. Whether it takes one year or two years or three years, we think the odds of a major crash in the

04:03 stock markets and real estate and everything else is between early 2012 and, say, mid-2014. So the next two and a half years is probably the most dangerous time in your life, and it should see a reoccurrence of the very crisis that the government prevented after the meltdown in late 2008. It's going to come back, because they didn't change the situation. They just put Band-Aids on it and put it off. So the average investor, though, Harry, when the market starts to go up, they buy into the rally instead of doing what's smart selling into the rally, correct? Exactly, Pete. The smart money sells into the rally. You will notice that George Soros, who's the best probably hedge fund manager in the world, he played gold on the upside. He got out early a few months ago.

04:50 Other people are doing the same. The smart money gets out once they've got 90% of the gains, and they let the last 10% go to the sucker. So, yes, it's still possible stocks could go a bit higher. Gold could go a bit higher. We put a ceiling on gold probably around 2,000. It may or may not get there. The stock market may go up another 10% or so from here, but on rallies, we say, get out. The smart money learns it's better to get out of a bubble early than too late. Now, Mr. Dent, we talked with author Burton Malkiel. He's the author of A Random Walk Down Wall Street, and he says that he's never seen anyone who could accurately predict or time the market. Now, what you are talking about is not exact timing. You're more looking at trends here,

05:36 correct? Yeah, we're looking at the long term. An economist tells me you cannot predict the long term. I would say to you, you are wrong. We predicted this boom in the late 80s, and we predicted this bust in the late 80s, early 90s, decades ago. People spend money predictably by age. New generations do this. Young people cause inflation. Older people cause deflation. Most of the key trends in the economy we can predict over the rest of your lifetime. So, economists are wrong about this. They don't understand the economy. But you're right on the other side. The short-term trends, you know, in 1987, the stock market's at 2,700 one day and 1,400 the next day, a 40% correction. What difference

06:22 does that make? That's the short-term is much harder to predict. It's based on investors getting overconfident, underconfident, overbuying, overselling. It's based on political events and news events around the world, just like we're seeing now in Europe. Every correction we've seen in this market in the last two years of this artificial rally from government stimulus has come from concerns over Europe's debt crisis. So, we started the crisis with our subprime private debt crisis in the U.S. Europe starting the next crisis with their public government debt crisis. Their crisis is going to build back into our private debt and real estate crisis, and then it's going to hit China. It's going to hit the rest of the world. So, this is a domino effect.

07:08 People need to realize governments have done nothing to change the fundamental situation. Baby boomers around the world and the U.S. and Europe, especially Southern Europe and Japan, are going to continue to age, which means slowing economies. So, we're not coming out of this. There is no magic bullet or stimulus. So, this debt crisis is going to come back, Europe, U.S. and then China. Now, Harry, I talk to investors all across America, and especially the ones that are 55 and older, they are extremely worried because they are trying to get income from this money they've saved all their life, and it's getting harder and harder to do. What would you tell the person right now who's in that financial red zone, which is about five to ten years away from retirement or in retirement, what are they to do with the money they need to have guaranteed income from in the future?

07:55 Well, you know, normally, again, that's the case. You're 55 plus, and in fact, that's exactly age 54 to 55 is when people start shifting out of equities into fixed income. The problem is, the U.S. government and the Fed has said, you're not going to make any money on a safe fixed income investment. Short term, you get zero on treasury bills. Long term, you now get 2% on treasury bonds, which is a very, very bad deal, given 4% inflation currently, even though that may come down, down the road. So you have to say, look, I'm willing to forgive short term income to preserve my capital and investments, whether I put in a fixed annuity with an insurance company or a guaranteed payment with insurance company, or I just sit in safer investments.

08:42 Well, again, that's one of the areas that the team members from the Financial Safari really specialize in is that preservation of capital, making sure that your money is safe and growing for your income into the future. And if you'd like the team members to design a true income plan for you, call right now, 800-661-7383. We'll design a plan based on safety first, folks, making sure you won't lose that money you absolutely need to have for retirement. Again, that's 800-661-7383. So those fixed or income generating annuities, Mr. Dent, could be a good idea. Or the U.S. dollar, the UUPs, an ETF that has been going up in crashes over the last few years, especially late 2008, early 2009. The U.S. dollar benefits from us restructuring and eliminating

09:32 debt that we created in the 1990s and 2000s. So there's a lot of things you can do, but the biggest priority for an investor, protect your capital, because we've had the greatest bull market run in commodities, real estate, and stocks and history. Protect your gains, don't get greedy, and don't take extra risk here to make a couple extra percent, even though the government has made that the priority. The government has said, don't save money, spend money, because of low interest rates, and don't invest in safe fixed income investments. Invest in higher yield things. If you invest in higher yield assets, junk bonds, stocks, and commodities, including gold and silver, you're likely to get killed in the next two to three years.

10:18 And folks, Harry Esten is the author of many books. The one that I'm looking at right now is The Great Crash Ahead. Harry, that's a pretty fitting title these days, right? Isn't it? Yeah, you know, it is. I mean, the first book recently, after the great boom and all our positive books, was The Great Depression Ahead. And that was late 2008, as this was starting to settle in. And we said, you know, the government's going to stimulate it first. It's going to work at first, but it's going to fail. 92 million baby boomers now want to save for retirement, not spend. Their kids are out of the nest. $42 trillion in private debt. People don't understand that private debt is way greater than our government debt. That is what started to melt down, especially in the financial sectors in 2008 and early 2009. This is going to melt down again. The government has done nothing to

11:03 address this problem. They're just putting Band-Aids on it. It's going to come back. And I think the European crisis is going to stimulate this. Harry, could this second crisis coming out of Europe be worse than our private debt crisis in the housing bubble as far as the effect on the American economy here? Well, yes, on our economy here, because Europe has a bigger public or government debt crisis. Most people in Europe, outside of England and Ireland and Spain, don't borrow as much money as we do against real estate and stuff. So when this next downturn hits, I think it's actually going to hit the U.S. harder because we have such high consumer mortgage and financial sector debt with all the leverage and all these hedge funds and all this Fannie Mae and Freddie Mac, I mean,

11:51 Wall Street toxic loans. We have the worst of that outside of England. So I think England, Ireland, U.S. gets hit worse in this next stage, and then it spreads to China. Again, you're looking at trends to give you these indications of how the market will most likely behave into the future. And you're predicting this sometime between 2012 and 2014? Yes. And now our indicators are telling us more likely sooner than later. I think the markets, to us, the great crash ahead has likely already started. When the markets peaked in late April, early May, including commodities, we've seen the first downturn just as we saw in early 2008, after the last peak of the bubble in 2007. Then markets came back up in 2007, looked okay,

12:40 and then the big crash began. We're seeing signs that the next great crash could begin maybe now, but more likely the beginning of next year. And we could see a big crash into the summer or fall of next year. So we're just telling people there's no way to determine that altogether short term. We can predict long-term trends very accurately. Short term, we're just making very good educated guesses. But the patterns in the markets tell us we could see the next crash start to melt down between January and, let's say, September or October of next year. So be cautious. I mean, just for eight or nine or 10 months, just be cautious. And if this happens, you're going to have buying opportunities ahead. We've been talking to and getting the insight from multiple published

13:25 financial author, as well as Harvard economist, Harry S. Dent Jr. And Mr. Dent, thank you once again for joining us on the Financial Safari. Okay, thank you. Well, those are the predictions based on the trends and demographics that Mr. Harry S. Dent is looking at. But if you would like to look at your own financial situation to help protect what you have saved, friends, pick up the phone, call the team from the Financial Safari right now. Your local trusted advisor is standing by. The number to call is 800-661-7383. Again, that is 800-661-7383.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 And welcome into the Financial Safari, your weekly show aimed at educating you about your money, your finances, and your financial decision making. Your host, published financial author, Coach Pete D’Arruda, of course, here in the studio. At any point during the program, if you have a question on any of the subject matter or would like a complimentary review of your current portfolio to make sure you are moving through the future into a positive financial direction, pick up the phone, call the team that you listen to right here on the Financial Safari for a complimentary review of your current financial situation. That number is 800-661-7383, 800-661-7383. And to begin this edition of the Financial Safari, we have a very special guest, a guest that we've had on several times over the past couple years,

00:45 Mr. Harry S. Dent Jr. He's going to give us some information and insight on what he sees going on in our economy and what it means to you as an individual investor. Mr. Dent, thank you for taking the time to join us once again on the Financial Safari. Nice to be back. Well, it's been a little while since we've had you on. And when we had you on in the past, the market's been going up, up, up. And I just wanted to get your opinion on what you think is going to happen as we roll into 2012, Harry. Well, I do think that the Fed's whole stimulus policy keeps running out of steam, something we've been forecasting would happen. They've been very vigilant, though. They keep coming up with larger doses of stimulus, QE1 and QE2. And who knows? There may still yet be a QE3 because QE2 already seems to be fizzling out very early on. And if the economy continues to weaken,

01:36 as first quarter GDP did or seemed to, then they may have to come up with another stimulus plan. But of course, you can't just keep stimulating the economy and then it fails, stimulate and fails without at some point, not just the citizens, but particularly the bond market, the investment markets finally start saying, wow, this is sounding a little bit like Greece here. And so we think, you know, the markets are not showing signs of topping yet. We do think they're still probably going to be up for several months to come, maybe late this year, somewhere around October, give or take. But as we've been saying in the last couple months in our newsletter, the markets are just going to be more choppy now. The markets are uncertain about Europe. That debt crisis keeps coming back, as we've been warning it would. And the markets are not quite sure what's going to happen at the end of QE2. Do they wind down slowly or are they forced

02:26 to come up with QE3? So right now, the markets are kind of going more sideways and down a bit. But we did tell people to start selling silver and gold just before the recent drop in silver. And we're saying, you know, down the line, gold and silver are going to top. The dollar is going to turn up. That may have already started to. And ultimately, down the line, stocks and other things are going to fall as well. So we think we're kind of getting near the end of this rally. But it's probably now more for commodities, gold and silver and stuff. And it's probably later this year for stocks. Well, I would like to congratulate you because when we had you on the show last time, you had mentioned a couple ETFs that were related to silver and gold. And I think they tripled or quadrupled since you mentioned them on our show. Yeah. And this is the latest bubble. And that's one of the things we're telling people. You have

03:13 to understand that the Fed is so desperate to revive the economy when baby boomers are aging and saving instead of spending, when all this debt wants to be leveraged. And you're not going to rekindle lending by banks, partly because people don't want to borrow anymore because they're too much in debt, just like businesses, and because banks are tighter. So housing's not coming back in demand. There's foreclosures forever. Lending's not coming back. So the government has resorted to pushing up the stock market and commodity prices and stuff to make the wealthy feel wealthier. And the wealthy are the only people spending now. Everyday people continue to show signs of slowing down. And it's more like the people at Louis Vuitton are spending more than ever now that stocks have doubled in two years, thanks to the Fed. I mean, the Fed has literally pushed money in the economy with QE1 and QE2.

04:01 This money does not get lent. So it turns around and goes into the investment markets and drives up. So they're creating a third bubble. And of course, bubbles burst. So again, we see in the next year, high chance that gold, silver, oil, commodities, stocks here and internationally are going to top. And we're going to see another crash play out into 2012, 13, and perhaps as late as 2014. So this is a time for people to start protecting themselves against what everybody does not want to see. And that's a repeat of late 2008, early 2009. And that's what we see happening. It's just a question of when the government runs out of bullets, and particularly when the bond markets say, like they did to Europe last year, and they're still saying today, you know, Greece and Portugal

04:47 and Ireland and Spain and all this stuff. Hey, we've had enough. The stimulus isn't working. We're worried about deficits. We're worried about excessive debt. And they start raising interest rates. And then the game's over. Then the government really can't keep stimulating without being punished by the bond market. Well, Mr. Dent, could it be even scarier than just a bubble popping? Could it be a whirlpool? In other words, dragging other things down with the collapse that might come in the next couple of years? Yeah, unfortunately, that's what happens. Demographics are slowing around the world for the developed countries. I mean, that's still 65 percent or more of GDP. And since debt, you know, you've got debt and real estate bubbles around the world. And that includes in China and in India and Bangkok and in the emerging world, not just the developed world. You've got all this debt and real estate bubbles that have to deleverage. And it all affects everything. I mean, real estate

05:37 is the one thing that's not recovering in this country. And it's what's going to kill this recovery. So this is going to be a worldwide downturn. And unfortunately, as we've been warning for decades now, in this sort of downturn, when a major bubble around the world burst, everything goes down. So the typical things that financial advisors tell you, oh, you know, diversify and be in real estate and be in small cap and large cap and international and bonds and commodities. When everything goes down, there's no place to hide. You have to protect your capital and you have to basically get out of these assets and preserve your capital before they all collapse. And again, we saw in late 2008, early 2009, everything went down except for one thing, the U.S. dollar, the one thing everybody's saying on TV, oh, we got this worldwide debt crisis and then the dollar's

06:24 going to collapse. The U.S. dollar was the only thing that went up the last time everything crashed. Gold went down. Silver went down. Commodities, oil absolutely crashed. Real estate crashed. Stocks crashed around the world, even more in China and India than they did in the United States because they were more bubble-like. So to us, this is a very dangerous period ahead. And we're just looking over this year. I mean, we're starting to get people out of gold and silver and out of things like the Swiss franc and the euro into the U.S. dollar. We're still looking at doing that more in the future. And somewhere later this year, we're probably going to be wanting people get out of stocks here in international. But we're not saying that yet. The stock market only looks like it's in a correction here, and it does look like it's going higher before it peaks.

07:11 With the amount of debt the U.S. has amassed, do you think the dollar can retain its strength again? Yeah. Yeah. I mean, here's what people don't understand about all this debt. The dollar has gone down 60 percent since 1985. It's gone down during most of this boom because we created so much debt. We debased the dollar by creating dollars. When banks create credit and the Federal Reserve encourages the creation of credit and lowers interest rates and has lax lending regulations and stuff, credit grows exponentially. And that's what happened. I mean, just between 2000 and 2008, private credit went up $22 trillion from $20 to $42 trillion, way more than our federal debt. And that debases the dollar because you're creating more of them. What people don't understand when you go into a bubble burst, the reason people don't understand it, we've only seen it once

08:00 in the last century, and that was in the early 1930s. When the bubble burst, a lot of debt gets written off against all these assets and real estate and stocks and business values that are falling, and you basically restore the value of the dollar, that the dollar goes up because you're destroying private debt even faster than the government is creating public debt to deal with the crisis. And so that's what we've been saying. It's going to happen. The U.S. dollar has been beat down now for 26 years. It's gone down recently. And we're telling people, look, take a half a position in the dollar, and we're going to be looking sometime in the coming months to say, okay, now take another position. Have a good bit of your portfolio in the U.S. dollar, which means actually a U.S. dollar index. Because if you just hold dollars, then they'll preserve

08:46 their value. But if you're in the dollar index and the dollar goes up versus all these currencies that up until now have been going up and the dollar is going down, you actually make money. And the dollar was up. The dollar index was up 23% in late 2008 when everything else collapsed. U.S. dollar and treasury bonds were the two safe havens. Everything else went down. Mr. Dent, one of the biggest concerns that we hear about the government from the average investor is about the national debt and the level of that debt. Is that very debt through quantitative easing, in fact, holding up the value of the market right now, giving those same investors a sell opportunity? Yeah, yeah, it really is. If you understand what's going on, like we said earlier, the Fed and the government's desperate. I mean, not just fiscal stimulus and cash for clunkers, most

09:31 of their stimulus has gone into supporting the banks and major businesses and basically keeping the markets up. So people keep their confidence up and the wealthy people who spend the most money keep spending money. I mean, because the everyday person is not much the government can do. Because housing's not recovering and most of the net worth of the everyday household tends to be in their house and they don't tend to have large 401k plans and large investments and business interests and stuff. So the government's creating this bubble on purpose. And it's a dangerous thing to do because bubbles burst. So yes, that's what the debt is doing. And all they're doing is adding trillions of dollars to the federal debt, trillions of dollars into the Fed's balance sheet, which goes into this investment stuff. This money literally goes into driving up the market. That's

10:19 why the markets have just gone almost straight up for two years, which is, by the way, not healthy. No good market advance ever does that and lasts. So yes, it's a bad thing. And they're only making a bubble, a debt credit riddled economy worse in the name of, well, we can't afford to have this crisis. Well, to me, I hate to be crude, but it's like somebody, they're really, really sick and they just swallowed some mercury or something or something very toxic. What the body would do is flush it out as quickly as possible. It's called diarrhea. It's called throwing up, whatever it does. The economy was basically trying to do this in 2008, get rid of this debt, get rid of all these toxic loans and securities because they're threatening and weighing down the whole economy. But the government just said, no, we're not going to go through this detox or whatever you want to

11:05 call it, similar to the typical crack addict or heroin addict saying, you know, it's so painful to detox. I'm just going to keep taking more heroin until I die because that's kind of what the government's doing. And at some point, the markets will put an end to this. But you as a person can understand what's happening and can protect yourself by locking in your gains. It bubbles, you lock in the gains when it's bubbling up and you don't sit there in the bubble and let it go crash again. And we've had two major crashes just in the last 10 years or so, 2000, 2002, and 2008, 2009. We've seen what happens when bubbles crash. The only way to protect yourself from a bubble is to get out. You can't diversify away from it. You have to get out and preserve the capital you have. And you've got to sell excess real estate that you don't want to live in for life

11:53 because, as we said, it's going to go down farther, particularly commercial real estate. He is Mr. Harry S. Dent, Jr., founder of the H.S. Dent Foundation, predicting the great crash ahead. In fact, that's the title of his upcoming book. And Mr. Dent, we'd love to have you back on the program when that book comes out. We'll do that. Thanks for your time, Harry. Okay. Thank you, guys. You take care. Okay. Bye-bye. Bye-bye.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome back into the Financial Safari, and as we like to do each and every week, I like to touch base with a well-known author, someone who's written a book that I think is a game-changer in the financial world, and today we're lucky enough to have Roger Lowenstein. And Roger has written several books. The one I really like is The End of Wall Street. Roger, welcome into the Financial Safari. Hey, Coach. It's a pleasure to be with you. Yeah, well, the pleasure is on this side of the microphone, as it always is, Roger. But tell me, what caused you to write this book, and what kind of feedback have you got about the book? And let's tell the audience a little bit what the book's about. Sure. You know, I had just gotten off a book, this is 2008, on the pension crisis, which I thought was developing, particularly among public sector employees, and I was sort of looking forward to taking a little time before I figured out my next book.

00:47 And then, lo and behold, Bear Stearns, a firm you may remember, crashed and had to be bailed out by the Fed. And Fannie Mae and Freddie Mac, you may remember those darling institutions, had to be bailed out as well by the Treasury. And, you know, the whole system seemed to be crashing down. And for a financial writer like me, that was too good an opportunity to pass up. So, it's kind of funny, I remember that when I first started working on the book, my working title was something like Six Days It Shook the World. I was thinking of when Lehman Brothers failed and AIG had to be bailed out. And then I changed it to, I think it became three weeks it shook the world, then three months, and, you know, we're just still shaken now, three years later. So, I just got rid of that title, and it seemed to me that this was really the apocalyptic end to the era of gross over speculation to the philosophy that you can let big banks and Wall Street do whatever they want with no kind of regulation.

01:42 You know, that the market always knows best that this failure was really going to be won. And obviously not that it's going to do away with speculation forever, but that this crash was going to sort of mark a dividing line before and after in our lives or economic lives. You know, I have to say, three years out, it still feels that way. We're having a tough time getting back to any semblance of normalcy. You know, we keep being reminded of jobs and so on. So, the subject of the book feels almost more important now than when I wrote it. And I know the average investor out there, we've been on over six years on the radio, and we talk to folks throughout the nation. They're confused, they're baffled, and they want a little bit of certainty so that they know when they put money into what they consider a retirement account, it's going to be worth more than they put it in when they do retire, Roger. And that's the main problem I'm seeing out there is people just don't have confidence in where they're putting their money.

02:31 Yeah, a lot of investing in this country, I think, done on the basis of, I'll get out before the music stops. I don't just mean ordinary investors, I mean banks who issued mortgages, and they said, well, we'll sell these mortgages before the guy goes bad. And then, you know, the people who bought those mortgages said, well, we'll package them up and sell them out to, you know, investors overseas or someplace before we get stuck with the hot potato. And even Chuck Prince, who ran Citigroup, you know, at the time, the biggest bank in the country said, you know, he, you know, speaking of the mortgage crisis, and knowing that, or the mortgage bubble, and knowing that it was going to come to an end someday, he said, and it's a quote, when the music stops, you know, we'll stop, but while the music's playing, we've got to keep dancing. And that's, you know, any, any child who's played musical chairs knows, you know, when the music stops, there's not a chair for everybody.

03:19 But I think, you know, we went through such a long period, investors large and small, of thinking that, you know, each one of us thinking, well, we'll get out in time. And, you know, it's going to take a while to get back to some semblance of security, you know, sometime before markets readjust to, you know, what are real housing values that the economy can grow from on a normalized basis. And absolutely, folks, if you're just joining us, we're talking to Roger Lowenstein. He is author of The End of Wall Street and several other books. I want to talk about a couple other ones. But he also, he's an American financial journalist who graduated from Cornell, reported for The Wall Street Journal for more than a decade, including two years, writing its column that's called Heard on the Street. That was back in the early 90s, I think, wasn't it, Roger? Yes, it was. You're dating me, Coach, but it was in the, actually, it was about 89 to 91 I did the Heard.

04:09 Then I went to write the book on Buffett, but that was when I did the Heard. So you were writing for The Wall Street Journal when we had our last big boom, I guess, the bull market cycle there, the one that was going like crazy into the dot-com and then the bubble that burst in year 2000. Yeah, I worked for The Journal in the late 90s when, you know, I remember the day that Netscape went public, August 10th or 15th or something, 1995. But the stock, I think it went up 80%. And then, you know, after a while, it seemed just normal for IPOs to double and, you know, some of them even tripled on their first day. And we know how that one ended. And I think the lesson to investors that, you know, you were referring to before, again, is that you can't invest on the basis of, well, everyone's buying this thing. It's going to double. It's going to triple.

04:55 You know, you have to invest in the basis of, you know, what's the underlying value? Well, you know, what is this company? Who are its customers? You know, who's the competition? If the thing is grounded, if the investment's grounded in fundamentals like that, you don't really have to worry about these market swings because, you know, because the companies are going to come back. But if you're just investing on this, you know, bull market psychology, I remember, you know, Mary Meeker, the high-tech analyst in that era, you know, she was asked about the high price of the price line, another one of those darling IPOs. Her explanation was bull market. Well, that sounds great during the bull market, but it's no comfort during a bear market. And as we've seen, bear markets can come with a vengeance and hang around like an unwelcome houseguest for a long time. So you just have to stick to those fundamentals and ask yourself, what is this business really worth?

05:40 And think from, you know, what is the stock market pricing it at today? Well, those days in the late 90s and even into the early 2000s during the dot-coms, I mean, it was not unusual to see stocks go up $30, $40 a share in a day. And as Archie and Edith once explained there on Archie Bunker, those were the days. Yeah, those stocks didn't have any earnings either, don't forget, you know. You know, I should have opened up my own little company back then and came out public, just put a dot-com at the end of anything, and you could have made money back then. That's right. That's right. So The Origins of the Crash is another book you've written, and so we have to look behind the scenes, I guess, if we're trying to invest. And our average listener has, you know, hundreds of thousands of dollars they're trying to save for retirement, but they don't know where to put it. They don't know what money manager to select. They don't know if they're with the right one. Back in the day, of course, there's an old saying, a rising tide raises all boats.

06:28 So they thought they had an all-star money manager, but, of course, when the tide went out, their boat went back down. So how does somebody select the right money manager or strategy here going forward if they're, let's say, 60 years older or higher and they want to have a comfortable retirement? Well, a few things. You know, one thing I would do is say that don't pick a strategy for today, you know, that you think is going to work now, but not yesterday, not tomorrow, because today is going to change awful fast. You know, the strategy, I mean, the only strategy that I have faith in, the only strategy I've written about all my career is long-term patient value investing. You look for money managers who pursue opportunities, who buy securities that they think have an intrinsic value that is significantly more than the price. And that means, that doesn't mean buying a financial fund or a high-tech fund or this fund or that fund, because a good manager knows that value can appear anywhere.

07:23 He's looking for value wherever it arises rather than being wedded. You know, if you do the other method, I'm going to go into financials, I'm going to go emerging markets, whatever it is, you're really trusting your ability or the manager's ability to time sectors. And that's a tough game to play. And, you know, one very good indicator, I think, of whether the manager talks the talk and walks the walk is their turnover rate. You know, if you've got a fund, say, say if you're looking at mutual funds where they're holding their stocks at two, three, four years, which is going to mean their turnover is only going to be 20, 30 percent a year or something like that. You know, then you've got a manager who's willing to buy a stock and sit with it for a few years. On the other hand, if you've got a fund where the turnover is 80, 90, 130 percent, 160 percent like some of them, you've got somebody with happy feet who no sooner buys a stock is looking to get out of it.

08:14 And, you know, we can call that a lot of things, but I don't call that investing. Absolutely. It's unfortunately very close to – I was just in Vegas a couple weeks ago. It's very close to the Vegas kind of mentality these days in the stock market. It is the Vegas mentality. I mean, you've got these flash funds that drive – what is it? Tens of thousands of millions of share orders and, you know, trying to arbitrage discrepancies that occur in less than a second. I mean, explain to me how that's investing. Explain to me how that makes markets more efficient or helps markets allocate capital. It is, you know, in my mind, you know, hijacking markets to technologists. It reminds me of that 2001 movie where the – what was it, Hal, the computer, took over the spaceship. I think markets should be – serve two functions.

08:59 They should serve companies who are trying to raise capital, and they should serve investors trying to price stocks at sensible prices. And, you know, I would clamp down on this casino stuff. I'm all for, by the way, a higher tax on short-term trading, on the derivatives trading that don't raise capital, that are just sort of side bets on these things. I want to make markets efficient and sensible for long-term traders. And this sort of trading that makes markets more volatile and you see these thousand-point moves in a day, that doesn't do me any good. Great point. And, folks, if you're just joining us, this is the Financial Safari. We're interviewing New York Times bestseller Roger Lowenstein, author of The End of Wall Street. You really need to get a copy of this, folks. But if you're searching for solutions that provide guaranteed growth so you'll have retirement income as long as you live,

09:47 if you're weary of the fog of the market and want more growth than you think your CDs or other traditional accounts are providing, call right now. Call us at 800-661-7383, and we'll get together with you and get you on the path that you deserve. It's crazy. You know, just a couple weeks ago, the price of crude oil came down, I think it was 38%, yet the price of gasoline at the pump only came down about 9% because of the futures trading built in. Yeah, I mean, tell me about that. If the price of oil is not going to reflect the on-the-street demand for gasoline, you know, jet engine fuel and the rest of it, what is it reflecting? And who is it serving? And you can see that in a lot of markets. And actually, that's exactly what we saw in the mortgage market because instead of mortgages being issued sensibly by bankers who were evaluating the ability of homeowners, prospective homeowners, to finance those mortgages,

10:37 mortgages were allocated by the investment market. They were simply a function of how much money was pouring in to mortgage securities, which is a function of how many people were frustrated with the low yield on safer bonds, treasuries, you know, and decided to go out the curve a little more and throw money into mortgage securities, irrespective, as we learned, of whether those securities were any good. We're talking to Roger Lowenstein, who's the author of The End of Wall Street. It's a great book. He's written a couple other books. He used to write for the Wall Street Journal. Roger, we've got a little time here. I want to do a rapid-fire segment here with three different questions to you and just get your opinion and see where this goes. But number one, are there too many mutual funds on Wall Street? Absolutely. Every time a fund gets a big infusion of cash, they open up a new slice, a new variety, a new flavor. You know, we don't need thousands and thousands of mutual funds.

11:25 There aren't thousands and thousands of capable managers. So I really look for someone who's been in the business, has a long-term track record, doesn't trade too much, and has a patient value philosophy. Yeah, I mean, mutual funds were a great idea at the beginning. It's my opinion they were, but it was trying to make it simpler for someone to pick stocks because there were too many stocks out there. So you get a collection of stocks in a basket. But now I think there's more mutual funds than there are stocks. I mean, I'm, you know, look, I'm a director of one mutual fund. I believe in the concept of the mutual fund industry. But as you say, when you have more funds than stocks, you know, I think we have the cart and the horse backwards. Then we look at 401ks, and, you know, I think there's a lot of games played in 401ks. And do you think that people who have a 401k all the time or most of the time, do they have the best selection of mutual funds in their 401k?

12:11 Or is it maybe just ones that are put in there because they're not selling anywhere else? Coach, I really sympathize with people with 401ks because they're being asked to do something that ordinary Americans weren't before. You know, when I have a flood in my house that we just had up here in Massachusetts, I'm not the expert on how to fix the flood and how to drain the water out. You know, we call a flood guy. He's a good guy. You know, that's not my line. So all these people who have other day jobs, they're doing their best job to try and manage their portfolios. And I empathize with them. I think if many people make a mistake, it's owning too many funds in their 401k and trading them too rapidly. You know, I would think of them, instead of his funds, I would think of them as friends. You know, pick a few of them. Pick a few you want to stay with, you know, over a long term.

12:59 And, you know, don't be so quick to invite them into your house. You know, just as you'd pick a friend. This is someone I trust driving my kids to school or whatever. Well, you're trusting funds with your money. That's important, too. So I would own fewer of them and own funds. You'd be comfortable owning for a long stretch. Yeah. And it's just there's going to be – we're seeing a lot of changes on the horizon in the 401k market, hopefully to the betterment of the person that puts money in the 401k. Those changes could not come fast enough, in my opinion. I agree. I really think folks need to pay attention to what's going on in the financial world. Again, we're talking to New York Times bestseller Roger Lowenstein, author of the book The End of Wall Street. And, Roger, if people are depending on Wall Street for their retirement income, I really think they need to take a step back. And they need to examine the ultra-wealthy investment secrets.

13:46 Learn about strategies the ultra-wealthy have been using to create and preserve wealth, even in a sour economy. And you can do that by calling right now at 800-661-7383. We will give you a guide to get on the right path for retirement. Again, that's 800-661-7383. And final topic here is income planning. How can somebody put money away that they know is going to be there in the future? What kind of vehicles are you recommending for folks who, if you use a laddering strategy for that income ladder, the amount of money that they're going to have each and every year, regardless of what happens in the stock market? Well, you know, the first rule is, you know, this is a rule we try to follow, you know, in my house, is if you're going to need the money in the next two years, don't put it in the stock market. Because you just don't want to be in a position of having to sell in the week or the month when the market crashes.

14:37 And obviously, market volatility is something we have to live with. So you just can't be sure. So if it's college semester money for a year down the road, there's nothing wrong with the savings bank. I know they're not paying interest now, but the money is going to be there, right? There's nothing wrong with a well-researched municipal bond. Right now, a lot of them are yielding, you know, pretty decent yields. You do have to be careful because municipalities, you know, not all of them are as safe as they used to be. I would really stay away from long-term bonds. You know, you have treasuries yielding. You need a microscope to see it. What is it? You know, 2%. And, you know, someday the economy is going to pick up and those yields could rocket up. And, you know, I say this because, in particular, because people think of treasuries as safe. They used to anyway. But there's nothing safe about a bond yielding 2%, you know, because when yields go up, that bond is going to crash.

15:27 Absolutely. The house money, the money you're going to need, you know, in the near-term stages of that ladder. Boy, I'd keep that in something safe. Now, and finally, as a subtitle of the income planning, as an investment advisor, I've been able to do a lot of research. I've got a lot of tools at my disposal. But there's a big problem there in the annuity world. Those are savings vehicles offered by insurance companies. And the big problem is there's over 1,600 different annuities out there. I found a few that work for income planning and making sure people get money for the rest of their life. But I've seen a lot of abuses out in the annuity world. And have you found any good annuities? You know, I'm not an expert on the differences in the individual annuities. I like the concept of annuities a lot. I mean, you know, basically, you're giving someone who has a pot of money and saying, in effect, you're giving them a lifelong pension.

16:14 And I think that's a great concept. But, Coach, you're the expert on where the abuses are. I would say, you know, if you want an annuity, go to someone like yourself or someone who can detect which ones are safe. Because as a concept, I really like them. Well, I mean, and again, in the financial world, there's too many choices for the average person, just at most anybody, because there's so many choices. And you talked about 2001 Space Odyssey when Hal, the computer, took over. And, you know, back when I was younger, we started playing chess on the computer. You could play against the computer. And depending on how hard you made it, the computer would either win or you could beat the computer if you put it on the easiest level. Heck, I played chess on the computer. You played chess? Yeah, I played chess. But unfortunately, as you went up on the levels, the computer started beating you all the time because it was thinking way far ahead and even faster and smarter than any human being could be.

17:02 And that's what people, when they try to day trade out there, they're going against supercomputers these days, aren't they? Yeah, you know, and my thoughts for people who feel as you do, that there's so many choices and, you know, computers are running all over the place. Keep it simple. Don't try to do too much. Own a few stocks. Own a few funds. Warren Buffett likes to say there are no call strikes in investing. They don't penalize you for not swinging. So you don't have to compete with Hal, the computer. And, folks, this is, again, we've been talking to Roger Lowenstein. He's the author of The End of Wall Street. And, Roger, how can someone get a hold of this book? You can go on Amazon. You know, you can go to any bookstore. You can go to Barnes & Noble. It's there. What a great... And paperback now, too. Yeah, and paperback. You know, what I like about paperback books is you can read them at the pool. You know, you can be laying down and read it without the hardcover sticking into your skin there.

17:50 So paperback books... Isn't that nice? And they're a little lighter, too. So I guess if they were the heavy books, you can work on your biceps when you're reading. But the light books, you can, too. Folks, Roger's got a great book. He's got several books I'd recommend you pick up a copy. Roger, thanks for your time today on The Financial Safari. Coach, always a pleasure. Folks, each and every week we bring national experts on just so you can get a flavor of what's going on in the world, especially this national economy. And it's not just us telling people to take safety and make it a priority. You really need to look at what's going on in your portfolio. You need to get a true plan in place. And you don't need all your financial eggs in one basket. Call us now at 800-661-7383 and get a true plan in place for you. We'll be right back after this.

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Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome back in to the Financial Safari. And now we're joined by another very special guest here on the show, Bob Wiedemur, who is president and CEO of the Foresight Group, a macroeconomic and risk assessment firm that helps investors and businesses make better decisions through well-informed and objective economic forecast and analysis. And Bob, you had a part in writing America's Bubble Economy and Aftershock. And these are two books that talk about the fall that we had in 2008 and what we could see here in the near future. So what are you looking at as far as what you do see coming here around the corner? Well, thanks, Coach Pete, for inviting me on. In terms of around the corner, I'm going to be a little boring. I don't see a lot for, let's say, the remainder of the year, the second half.

00:45 I think we'll see a continued slow economy. We might actually see a slight rebound in the housing market from abysmal lows simply because we were hit so hard by the expiration of the tax credit. But if there's any excitement, so to speak, that will come, it'll be in the stock market. And we might see that falling to, say, $9,000 or maybe even a little lower this fall. Well, Bob, I like the subtitle of your book. You know, the title, Aftershock, Protect Yourself and Profit in the Next Global Financial Meltdown. And when you talk about the bubbles bursting in here, and you want to tell the folks the difference between bubbles bursting and down market cycles? Yeah, thanks for catching on. That's probably the most important single thing we try to teach in the book is that this isn't a traditional business cycle. And we might add the business cycles are a little overrated already.

01:32 If you think about it, is the economy of the 1840s really like the 1940s? Was the economy of the 1950s really that close to the 1980s? Not really. I mean, even China wasn't much of an issue 30, 40 years ago, and now it's a huge issue. So the economy is really evolving, and we see this as just part of the evolution. And right now, part of the evolution is that we've pumped up four bubbles, the consumer spending, private credit, housing, and stock market bubble. And those are starting to pop. Obviously, the housing bubble popped once, I mean, popped, and it's taking down the other bubbles with it. So the virtuous cycle of bubbles going up is becoming a vicious cycle of bubbles going down. So we don't really see this as a down cycle that inevitably popped up. We see it as a bubble pop that may be reinflated by the government for a little bit, but will then continue to pop in the future. And you call this a bubble quake, correct? Yes, that's one of our terms for it, exactly.

02:19 Well, it was pretty amazing. You predicted this long before it happened. So do you want to give us some of the indicators you were using or some of the foresight that you used to predict this truth that's happened now? Sure. When we were writing the book back in 2005, I mean, one of the things we were looking at, at least in housing, for example, was that housing prices were starting to go up rather rapidly, almost heading toward 80, 90, and made in place over 100% since 2001. This is by 2005, 2006. Yet income had only gone up about 2%. So it was really hard for us to see how that could be justified economically. And that's really the fundamental of a bubble is something where the asset prices are getting way beyond any economic justification. That's one example, and I think a pretty important one. Now, we all lived through it, too, in using our houses as ATM machines, a lot of folks did, and two or three mortgages on the house, over 100% borrowing capabilities from house.

03:09 I remember the 125 loans that were all over the place out there. That's right. And the adjustable rates. Now, you said there's six different bubbles out there, right? Right. Before I just mentioned consumer spending, private credit, stock, and real estate, the other two are the aftershock, which we write about in the second book. And the next problem to come is as those four bubbles all start interacting in a vicious cycle going down, they put increasing pressure on two bubbles that we really haven't had to worry about at all before, one being the government debt and the other being the dollar bubble. And these bubbles are still, right now, somewhat stealth bubbles. More and more people are getting aware that there's a problem, although if they think it's a problem, they think it's probably our grandchildren's or children's problem. What we're saying is because the other four bubbles are popping, it's really going to put a lot of short-term pressure on the government debt and dollar bubble. And when I mean short-term, I don't mean this year or next year.

03:55 But over the next three, four, five years, we're going to see those bubbles start to burst as well. Well, the increased government spending and the radical increase of the government debt is also putting pressure on themselves as well. Exactly. So, again, a lot of that is just the government's reaction to the downturn. A lot of it is just a lost tax revenue. So that's forced the government debt up much more rapidly. It's also forced the government to start printing money because they can't borrow necessarily. For example, last March, they had trouble or thought they would have trouble borrowing. So they ended up buying their own bonds. They became the biggest buyer of Treasury bonds and Freddie and Fannie bonds in the market. That's done with printed money. So they're both borrowing and printing. And for a short time or for a while, a few years, that works. But fairly quickly, it's going to cause huge problems.

04:41 And that's the result of those first four bubbles bursting. Now, Bob, you have a very special device that you have used in the past to find out about the dollar bubble. And you call it bubble vision glasses that you put on. And you can see with your bubble vision glasses what's happening here in the economy. Well, again, I think in the short term, I think it'll be fairly low key. But what I see underlying this, and we've seen it just last week, the Federal Reserve is talking again, somewhat subtly in somewhat rumor form, but they're talking about increasing their purchases of U.S. bonds. And that could be Fannie, Freddie, or U.S. Treasury bonds. There's even talk it might be as much as $5 trillion. When you do this, you're essentially increasing the money supply. Our money supply has already increased 300%, almost 300%, from $800 billion in 2008 to over $2 trillion today.

05:28 And people aren't really aware of just how much you've increased money supply. And in some ways, they don't really care because we don't see the inflation yet. But inflation can be slow to take off, especially in a down economy. But it does come. You cannot increase the money supply three, four, or as the government or the Fed's now sort of talking about, four or five times without getting some pretty significant inflation. So that's what we see as the next issue, but not for the next year, probably not even for another two years. But inflation will start to come, not just what we've already done, but what we think will come in terms of the Fed printing more money over the next year. And I know you've said it's not just the American bubble economy. It's the world's bubble economy, correct? Very much so. I won't say all governments are alike. That's not true. But governments often react to things in somewhat similar ways. And that, again, is to print and borrow, to deal with short-term pain.

06:15 And they're not worrying about the long-term consequences. China has had an enormous rebound from the big collapse of its export markets. And that's because the Chinese government has essentially forced banks to lend. And they can control the money supply. They control the banks. I'll give you a quick example. In the first quarter of 2009, Chinese banks lent out more money than in all of 2008. Think what would happen if the U.S. government was able to force banks to do the same thing. Well, we would have a big boom, but we'd also have a huge bubble brewing under all that. And it also can create bubbles. China, all this borrowing or lending has created a huge bubble in real estate. And it's also created some huge problems in the monetary system. They're not going to show up this next few months, although the property bubble might start bursting in the next 6, 12 months.

07:00 But it's going to show China's made a big mistake. And so has a lot of other countries in Europe and elsewhere around the world done similar types of things. Now, for the average listener hearing the macroeconomic view and what's happening all over the place, you know, what can they do, though, for their little microeconomy, the family economy they have? I know you have a chapter covering your assets, how not to lose money. And I think that's very important for everybody out there to pay attention to the two rules you have to make sure people don't lose money, right? Well, there are. And I think it's important to emphasize that sometimes it's a time to pull in your horns. That people always ask, well, how can I make sure I get that 10%? And that's important. Don't get me wrong. And I think there are ways to do that. But it's most important sometimes to be careful about losing money. In 1928, Charlie Merrill of Merrill Lynch, you know, the people who are bullish on America,

07:46 said pull in your horns and sell your stocks. Sometimes there's a time to do it. So that's one of the rules right now is to reduce your exposure in the stock market significantly. I know it's got a rally going on right now, but ultimately the rally is based on air. Fundamentally, you're having a bubble pop and the stocks will go down. It's reduced or eliminate your exposure to stocks. And the second thing is be very careful about long-term bonds, because in an environment that will be pro to inflation, those bonds can lose an enormous amount of their principal. That's something we haven't seen before, but even other people are talking about a bond bubble. Interest rates of 2%, 3% for 5- and 10-year bonds are just extremely low for any normal, reasonable expectation of inflation. So be careful of those two, stocks and long-term bonds. So those are simple rules that people can pay attention to, and it doesn't mean to go out and sell everything they have right now,

08:31 but it does mean to pay more attention. Because have you bought potato chips lately, Bob? Have you gone into the store and bought a nice, big, fat bag of potato chips? How do you open it? Do you tear it apart or do you just pop it? I tear it. I open it, but, you know, both of the two sides. Okay, so it's a nice, big, fat bag until you open it. Then there's hardly any potato chips in the bottom. All the air comes out. So that's a bubble right there. That's a bubble on a micro view of economy right there. Exactly. And, Coach Pete, you make a great point. When I say be careful or reduce your exposure, as I always indicate, no panic. Nothing should ever be done all at once. Move gradually. Move a bit. See how the economy goes. See how the stock market goes. Timing is hard to get perfectly. So the key thing is to be aware of these issues, to be aware of what might be coming, to move

09:16 gradually, but to move. Don't be frozen. Deer, they have lights. But move in that direction and see what happens. But move gradually. No panic right now, by any means. So it's not the time just to sit back and watch the TV. I think somebody said with a six-pack of beer and just watching the economy. Now you have to be proactive instead of reactive. Exactly. We do see a lot of folks, Bob, that have what we call paralysis by analysis. They don't know which direction to take. They don't know what decision to make. So they end up making no decision at all. And that can be the worst result there is. That can be pretty disastrous to somebody's personal economics, can't it? Exactly. And that's the biggest problem, is that people get scared. They don't want to make any decisions. And the things they're most comfortable with, say stocks or real estate, maybe haven't done very well, or maybe they've had some big losses from them.

10:02 So they go, oh my God, the things I'm comfortable with didn't work. And I just don't want to move into things that are uncomfortable. For that, I would suggest read the book, read Aftershock. Maybe talk to a financial planner that shares some of these views as well and can maybe help guide you and push you along a certain path. But again, it's also not a reason to panic. It's not saying, oh my God, I've got to sell everything immediately or all my real estate or all my stock. No, it's time to look at reducing some exposures. When there are potential for risk ahead, it's good to reduce your exposure to the risk. I know, Bob, when you wrote your book, I'm sure, called Aftershock, by the way, folks, a great book. But when you wrote the book, I'm sure you had some doubters out there. And I'm sure the same people who did not agree with the way you predicted things in the past still probably don't agree with what you're looking at in the future, correct? Correct. But people are fairly quick to say, you were right in the past, but they don't agree with what

10:48 you're seeing in the future. You know, the old rule is to agree with whatever is proven, but they just don't agree with whatever is not proven. And you're predicting the future. So I certainly have some supporters who doubted me earlier and certainly agree with what I predicted in the past because it came true. But yeah, they're still skeptical about what's to come. So it's kind of funny. And we'll see what happens over the next couple of years. But so far, I think we're much more on track than most of the doubters by a long shot. Well, America's Bubble Economy was the book in 2006 that predicted the crash and Aftershock. Definitely good book. We very much enjoyed that. We certainly appreciate you being here on the financial safari with us today. Thanks, Bob. Very good. Thanks a lot, Coach Pete. Again, that was Bob Wiedemur, author of Aftershock, a New York Times bestselling book. Before we go to break here, if you would like a second opinion or review of your finances,

11:34 give us a call right now. Pick up the phone and dial 800-661-7383. That's 800-661-7383. We'll be right back.

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