The Mindset And Systems Of The World's Wealthiest People w/ Patrick Donohoe #TheOnePercent

And I think there's just a lot of social. They're not lies, but there's so much social ignorance out there when it comes to money and why you're doing what you're doing. If I make a lot of money, it's like, then I'm going to be able to do something. Well, figure out what you're going to do, commit yourself to doing that, and then the strategy takes hold and now you can plan for that. But if you don't kind of understand really what you want in the end, then no financial strategy is going to make you happy.

It takes one free person to create change. This is the show for them. We are the creators of the Free world. This is capitalism.com and we are the 1%.

Hey, gang. This is Ryan from capitalism.com.

What'S going on?

You look good. You look really good. You smell a little weird today. Okay, anyway, we'll take care of that later. We'll take care of that after we talk about money. Today I'm going to be joined by Patrick Donahoe. I met Patrick, actually, I think we met for the first time at dinner with Tim Ferriss, which is a cool story all on its own. But Patrick is the advisor that a lot of my wealthiest peers go to and swear by. Like, he's kind of the guy that a lot of my peers will talk about when we're all together. And it's like, hey, who do you use for X? We all talk about, who do you use for Facebook ads? Who do you use for this? Well, Patrick comes up when they say, hey, who do you use for wealth management? Or. Or who do you use for setting up your life so that you have your security and predictability for the rest of your life? Like, who are you going to for financial advice? And Patrick is that. Is that guy. Patrick humbled me a little bit in our time together because I kept asking Patrick for specific tactics to use in your life, and he gave me some. I think the most obvious is when we talked about captive insurance. And he also went on a really cool rant about using IP as a way to have more taxable or tax low tax income, which is a cool strategy. But anyway, the majority of our conversation was actually around the mindset of wealth.

And that was a little bit humbling for me. And it was humbling for me because, guys, I talk about wealth and I talk about business. And I know that I'm ahead of many people, but even I need the occasional reminder to do the right things for long enough to be really, really Clear on what the heck it is that you want. And he gave me a dose of that on this one. And so if I needed it, I have a feeling that you are going to need it as well. So in this, we talk a lot about the mindset of wealth, the mindset of thinking long term. And we talk about some cool tactical strategies that you can use to make more money and to live a more fulfilling life. Enjoy this chat with Patrick Donahoe.

Patrick donahoe, welcome to capitalism.com.

It is a pleasure to be here. You have an amazing place. This reminds me of where I grew up. And all the nostalgia is like flooding into my body.

I'm good. I'm glad. I'd like to start some of these off with a simple question. Patrick, how did you make your money?

Wow.

That's a loaded question. Thanks for the prep time for this.

You know, I connected something. I don't know when it was, but I connected the dots between value and money. And I think it was. It was because I started my business just prior to 2008, 2009, and I was like really successful out of the gate. Like we started in 2007.

And what's like, where is money coming from?

This is financial. Financial services, right? We were doing insurance, financial strategy, pretty much the same thing we're doing right now. But I got everything handed to me cause I was part of a partnership and they lost everything and took me down with them. And I was like on the. My wife was like telling me, go get a job at 7:11. I still remember, like her in tears, like, get a job at 7:11. I'm sick of this. And I was that close. We had like a moving van ready to go to Phoenix, where she's from, where her family was living. We had a place to stay there in someone's basement. Like I was just going to hit the reset button and. And I, you know, went through just a, you know, whether it's prayer or meditation or just huge introspection and. And I was starting to connect the dots with things that I believe. And that's where it hit me where it's like what you have. I tell the story in the, in the book that I wrote, but it's what you have people need. It would have, it would have helped during the financial crisis. It would have made, you know, a lot of successful people, had they had the mentality and had they had the strategies. And so that's when I basically said, I'm going to make it work. And from that point forward, it wasn't about necessarily money. Although I wanted money and I wanted to make money, I wanted to achieve certain things, but it came down to figuring out the way to make. Make people's lives change through constantly finding ways to create value for them.

Yeah. So I. I mean, obviously know that you're in financial services. I. I just have you in my mind as, like, you're. You're the guy who manages the world's. You at least know and implement the strategy of the world's wealthiest people, which we'll talk about. And you've been doing that. I know, since, like, right after the Great Recession. Is that what you were doing? That's what you were doing before?

Oh, yeah. This is, like, the beginning of 2007.

Got it. So you. So you had a partner that you were in this business with that brought it down?

Yeah, there was a couple of. Couple of partners.

And you went out on your own?

Yeah, after that, and I settled, like, I had to buy them out, and I got a database and a lot of debt, and I didn't know how I was gonna pay it back, but I had a database. And so I started doing webinars, and I just did. Dude, I did webinars before, like, people knew what webinars were. I kept doing the podcast. I remember I was only doing a podcast, like, once a month, because, dude, getting the gumption to actually be confident enough to interview somebody or talk about certain things was. Was hard. I felt inauthentic most of the time, so I was digging out of my own crap.

And what did it take to turn that around? It was.

It was tenacity, first. First and foremost, and it was commitment to not failing. Like, I was a person that grew up playing sports, and I was like, I'm not gonna. I'm not gonna fail. This is something I'm gonna figure out. I'm not gonna hit the reset button. And I look back, and I was like, you know, I. I could have. And I probably would have accelerated the process, but I didn't file bankruptcy. I settled all my debts. I paid back, like, almost a million dollars.

Wow.

And I figured out. So this was, like, early 30s.

Yeah, that's. That's a lot, actually.

When was 2000? Yeah, in 2008, I turned 30. So.

Yeah, that's. That's a lot, Patrick. Yeah, actually, I actually didn't know that part of the story, so. So 10 years later, I mean, you have. You have. Basically, you. As far as I know, you're the guy that a lot of my peers go to to implement all of the financial strategies of the world's about these people like our, our membership is the 1%. 1 percenters kind of go to you to, to implement a lot of the strategies.

Yeah.

And I've told you, you know my, my two steps to wealth, build a business and invest the profits. I am all in on my businesses. I then invest into cash flowing real estate, cash flowing dividend paying stock, other investments that pay me cash flow. But you're a little bit more strategic than that. And so I was hoping you could kind of walk us through what the overall strategy looks like when you're investing in these higher levels.

Well, I first step back because I really believe that mindset will dictate your success because having a lot of money does not mean that you're going to be wealthy. I know that sounds cliche. I've just seen it firsthand so many times with.

I actually don't think, I'm sorry to cut you off, but I don't think that's cliche at all. What do you mean when you say that having a lot of money does not mean that you're wealthy?

Money is like paper and ink.

It is, it's like people have this notion that there's value in money and there's, and there's not, right? The money is in actually what the values and what people do with, with the money. But the funny dude, the funny thing is it's like we're so conditioned as a society to think that money has value, that people figure out a way to not spend it. Like they defer it and they do, you know, IRAs deferring until they're, you know, retired and then they stretch it so that they don't have to pay any taxes on it. It's like, and I know, I know tax strategy is vital, right? But in the end it's like pay the tax and spend the money if you're wealthy because that, you know, what you spend it on is what people are after, but yet they never do it. And so that's where I looked at, you know, I think it's telling to do business with older individuals. I say older, probably past the age of 65. And I know a lot of 65 year olds that live a hell of a better life, a vital life than those that are in their 30s, right? But still it's like those that are at 65, this is like this golden age, right, where you're at 65 and, and suddenly life is supposed to start. I mean, what's wrong with that, right? It's this idea that there's this future waiting for you, because we've been socially conditioned to think that these are the things that we should be doing. And I think there's just a lot of social. They're not lies, but there's so much social ignorance out there when it comes to money and why you're doing what you're doing. If I make a lot of money, it's like, then I'm gonna be able to do something. Well, figure out what you're gonna do, commit yourself to doing that, and then the strategy takes hold, and now you can plan for that. But if you don't kind of understand really what you want in the end, then no financial strategy is going to make you happy. So I look at, you know, older individuals. You know, I was telling you a story earlier where I had this. This. I have this client, and I have a couple of his family members as well. But he's a neurosurgeon, super smart guy, right? He has all these different patents and procedures. Like, it's. It's incredible. But he's on his third marriage, and he wants to set up this legacy for his kids and his grandkids, who he doesn't even have a relationship with, right? So he wants to leave this money to them and leave it in a certain way, right? Where they essentially have access to all of this money, but they have to do certain things to get it. And I'm. And I was like, it would boil my blood, right? Because your legacy really is meant to be established while you're alive, not when you're passed on. And it's. Establishing relationships with your kids and grandkids should be a priority if you really want to benefit them in the long run. So his challenge was way more personal than it was financial. In the end, that's where I kind of connect the dots between everything is personal, even money. And it really comes down to, number one, establishing what you really want. And if money is the solution to what you want, I try to go deeper with people. Why do you want it? What's the reason behind it? Okay. And then look at their behaviors up to this point and figure out, you know, are they going to be able to actually achieve that? And this is where I think with, you know, entrepreneurs and smaller. Smaller business owners that achieve a certain level of success, I think introspection, first and foremost about their business and what they really want in the end is more important than. Than actually figuring out where to invest profits. And then the investment is gonna have an objective the business has an objective. The investments have to have an objective as well.

So I hate how you answer that question.

Sorry.

Because figuring out what you want, in my experience, figuring out what you want is a lot harder than figuring out what to invest in. And so I guess my next question is, does anybody really know what they want?

I think there are. That's a great question.

Right.

I think people, if they introspect long enough, right, they can figure out why they're doing what they're doing.

Right.

And I think in the end, everybody wants the same thing. People want to be happy. They want to have good experiences. They want to establish good memories.

Right.

They want to do fun things.

Right.

You, you are a Tony Robbins guy. You've been to some of his events. I just came back from an event, so a lot of this stuff is fresh on my mind. But we have needs. We have things that we're trying to pursue. There's things that are driving us, right. You have six basic needs. And I look at really what the infinite game is that Simon Sinek talks about, and it's the idea behind growing. I think you get to the point where you recognize that growth is an infinite game. There isn't like retirement. Even though we all think that, you know, I'm going to retire one day, retires and retirement is anti life. Human beings are not meant to not do. It kills. It'll kill you. The idea, though, is to grow in ways that, you know, maximize your experience of life and ultimately contribute the most to society. And that could be through building business. It could be through, you know, establishing a ton of wealth and transforming your family's life, transforming your community's life. And I really look at the wealthiest individuals and that pivot between where they're at and really where they want to be is they start recognizing those two principles. Those two, you know, they're called the spiritual needs. Where you are. You're adamant about growing. You recognize that you have to do that for the rest of your life and also the fulfillment you receive by actually benefiting others, creating value for others.

So what I'm hearing you say is that you're identifying these pieces for the individual first before. Before you're ever deciding which magical whiz bang investment strategy totally to deploy. Is that fair?

For sure.

But I imagine that there's like a menu of options that you are picking from when you are crafting the overall strategy. Would you walk us through some of those?

Yeah, I think they're not necessarily products or strategies. I think they're stages Right. I look at kind of financial life in a four different stages, right. I think the first stage is like certainty, right? Certainty is when you have, you know, I would say some of the checklist items usually are, you have no consumer debt, you have adequate reserves and you're saving a healthy amount of money. Right. I call that kind of the certainty foundation. Then you get to vitality, right? And the vitality stage of life really is when you, you start to connect the dots between how you make money and who you are. Right. It's not a 9 to 5, it's not a job.

Right.

It's more of a calling. You're saving more money.

Right.

And you also are, you know, essentially having a fulfilling lifestyle.

Right.

So I think that vitality space and the certainty space, right. Are the two predominant places that I find people. And then you have the financial independence and then financial freedom. I think freedom and independence are much different.

So I'd love to go into that. But first, I can't imagine that most people come to you when they're in stage one and two, when they're, when they're figuring out their price.

You'd be really surprised.

So you work with some of the world's wealthiest people. They can't be coming to you looking for security.

You'd be surprised.

Tell me more.

People are afraid, man. It's like, you know, if there's people that have a million bucks in the bank, right. And are afraid of spending it, it's crazy. And I think that just the conditioning of human beings and this may not be the case for young people that don't have that. It's like when you're there and you experience that, it's like. And I don't, I didn't necessarily experience it, I experienced their experience of it, but just the fear that exists of them spending it, buying a bigger home, going on a vacation, doing stuff with their kids, spending money. People have the hardest time spending money when they are upper, in that upper echelon. It's insane.

You're saying that when people are really rich, they're actually more risk averse when it comes to spending money.

I would say spending averse.

And do you ever, do you have any idea why that is?

I think because they have connected the dots between fulfillment being a lot of money, not having a lot of money means I can do the things that fulfill me.

Say that one more time.

I don't remember.

Okay, so well, let me ask you this then. When, when you are, when you are working with a high net worth person, what's, what's the, you're, you're filling that first bucket of security, which is, I mean that can't be much more than like a plan you give them or is there something else that you're doing?

Well, it, well it depends, it's subjective, right? So it depends on the individual and where, where they're at. I think, I think these stages of life is more of a mindset, right? That is checking boxes. If you're, if you're not living at least going on vacation or doing nice things, then you're not, you're not, you can't educate, you can't graduate from the vitality stage of life.

So when somebody, I guess what I'm getting at, Patrick, is like, what do you do for these people when they're coming to you?

I get them.

I really expect you to come in.

Discover what they want and I help them get what they want.

So I really expect you to come in with like this, with kind of the strategy you walk somebody through when they're, when they're a high net worth person. And I keep waiting for you to tell me that. And what I'm hearing more from you is that most people come in with like a lot going on and they don't really know what they want or where they want to go. And it's your job to go in and figure out the financial strategy that is going to work for that person specifically 100%.

And I look at, you do have these blind spots that people have when it comes to finances. And I think that these days, especially with business owners, there is tremendous liability out there. And so also as part of that whole foundational strategy, right. It's, you know, creating kind of mirrors so they can see their blind spots. One specifically is cybersecurity has become an incredible. It's bankrupted municipalities, it's bankrupted companies. Right. With security breaches to a database. Right. And so just a simple cybersecurity insurance policy or ensuring that your captive has cybersecurity insurance built into it. I mean those are just simple blind spots that most people are not aware of.

You mentioned captive. I assume you mean a captive insurance plan. Would you walk people through what that is?

Captive insurance companies is basically there's a number of different ways to establish it. You can establish your own, which was kind of the first one. That's where all these big companies do is they form their own insurance companies, they pay premiums that are essentially tax deductible income going to the captives from premiums isn't taxed because it's surplus. And then you have insurable events that like an actuary or an insurance creator makes specifically for your business. So if something happens, your business, then your insurance company will indemnify that loss or like they'll send the company money if there's an insurable event. So cybersecurity, right? So let's say you pay a million dollars into this captive insurance company as a premium and one of the things that it covers is captive insurance, right? So when the money comes out, it's also tax free.

Right.

So let's say you have a breach and you have to pay this, you know, forensic database analyzer. Right. All of this money to, you know, go through and ensure that the breaches, you know, or where the breach is extended to so that you know how to identify your, you know, your customers. Like Target, like Target had Target Marriott. I mean, it's insane. Like these big companies, right, they had breaches and you know, huge amounts of money that they had to actually pay because there's laws, right, where you have to hold a certain amount of insurance or you have to do certain things if your database, if the database is breach.

So, so, so anyway, that's the idea. So a captive is an insurance company that you own. And then this is not something for just Targets and Marriotts. This is, this is a lot of entrepreneurs our size. Yeah. Set up at for two reasons. One, and correct me if I'm wrong, because I'm just interested in this stuff. My old business partner set one up for himself. But, but you set it up to ensure against certain events like cybersecurity attack. But also, I know people use them as kind of a tax. Yeah, I'm not allowed to use the word loophole, so I won't say loophole.

You have to use it for a legitimate purpose. Right. Because most people that have captives are gonna get audited.

Right.

So you have to essentially prove that what the captive is ensuring is in essence an event that will be detrimental to your business or affect your business.

But, but a Google algorithm change or a cybersecurity attack or an Amazon change or tariffs in China could all be for sure. It could all be risks that you could insure. And so am I correct in my understanding that people will set up these, these insurance policies, these captives within their businesses and then they, they basically they separate business, correct? Yeah, but they can, they can take cash from one business, have a policy that is now stored away tax free and you can invest it within the captive and you keep it There for insurable events like a partner's death, a partner dispute, and then that is when the money actually gets transferred back into the business. Depending on what the things that you have set up. Yeah.

So captives, if you do your own, it'll be absolutely specific to your company. But they're a lot of groups these days that make it more feasible because setting one up is really expensive. Plus you have annual maintenance on it, which is also expensive. Now it's relative to the business size. So what you find is that you have companies that will actually both own the company or multiple companies that are owned the capital insurance company. Right. And that makes it a little bit more cost effective. However, you know, the actuarials, you know, have to be done in a way where it indemnifies all the companies involved.

Anyway, I want to get into three syllable.

It's just like it's a way have, you know, a protection to your company.

Right.

For different things that could disrupt it with a lot of tax benefits.

Yeah. So I mean, is that one of the things that you help set.

Set up for? So I look at, I try to stay in my lane.

Right.

It's like I specialize in certain things and I have just an amazing network of people that, you know, provide those type of services.

So that's, that's one area that I think not a lot of entrepreneurs know about is that they can set up that as part of their security bucket and having access to cash that they would essentially control in the event of downside, in the event of something, something going wrong at a certain level. That's the.

I realize it's like it's a strategy and it's a strategy if you're at a, a certain, A certain level.

What, what else. What other tools in your tool belt are you, Are you deploying the tools.

In my tool belt?

Yeah.

So what are you specifically looking for if you were to talk about your audience, like what are some of the things your audience, you know, is, is facing? What are the things that they're looking to as far as what to what to create as a lifestyle? So let's create a business.

I think the perception, and I have this perception still, still is I think we all assume that passive cash flow equals freedom and that if you've got predictable passive cash flow coming in that exceeds your expenses, you can define life on your own terms. I find the hard part is the defining what life on your own terms looks like.

I also would challenge freedom because freedom is not passive income exceeding expenses. Freedom's a Mindset, you can be free without that.

I agree with you.

It's one of those. I agree with you because I know a lot of people that make way more than they spend. Right. Passively, but yet they're not free. So I look at. Let's go on one thing. So I would think for entrepreneurs and business owners is having at least a bookkeeper, a controller, a CFO is vital because those are the accountants. And the mindset of an entrepreneur is typically not the mindset of an accountant. Except you're, if you're Tom Wheelwright. Right. He's not really an accountant, he's an entrepreneur, you know, but you look at really, you know, how your business operates, what its success is. And surprisingly, a lot of business owners, especially if you're, you know, one owner, you look at your bank account as the barometer, right? Yes. To the success of your business.

Yes.

So bookkeeper, we have a great relationship with a company that is a virtual cfo, slash bookkeeper, so that you have essentially an idea of how, you know how your business is doing objectively, not just looking at this, that or the other.

Yeah. So when somebody is coming to you and they're, I mean, your typical client sounds like they're a high net worth person who's got things all over the place and they're saying, can you help me predict or can you help me create a system that is more predictable and develop more wealth and cash flow?

I think I say this, I'll say it this way.

So.

Who'S a person's worst enemy? Who's their own selves, their own worst enemy? Right. And so when it comes down to it, you know, the gap between what a person wants and, or gap between where a person is and what a person wants is typically two things.

Right.

Number one, it's ignorance. Ignorance is a lack of, lack of knowledge. So it's about finding someone or learning, you know, what it takes. But the second part of it, which is the predominant one, is the discipline to actually execute. Right. So if you look at, you know, how, how I look at clients and their situation is is it a function of ignorance or is it a function of discipline and the ability to execute? And there's so much, there's information everywhere. People, I think, can go find what it takes to make more money. And it just comes down to the doing. The doing part.

Yeah, agreed. So, Patrick, I guess I'm just dancing around, like the question.

I know you want all the tactics and strategies.

I do.

That's like, to me, there's a Million of them, dude. And there's ways in which you can value IP of a company and sell it to your kids and have a kind of an inter family sale and turn your ordinary income into capital gains.

Already in.

Yeah. So it's one of those, like, sold. But here's what you realize. It's like.

To me, it's important. Right. But what's more important is. Is why you would do that. Right. And what's the outcome of. Of, you know, the tax savings. Right. Or the cash flow that you.

That you have?

Because these days, I think most entrepreneurs, like, have what it takes to be really happy, but they're not.

I think that's very insightful of you. I have to ask why you think that is.

It's the experience. And I think it's also social conditioning. You know, what have we been taught about money? Like, what is society taught you about money? I know you have a totally different mindset, but it's still there, man. It's like it's in you, what you should do and what you shouldn't do. Even though it kind of conflicts with what you believe. Like what. It's still. It's still in me. Right. So what are we taught about money?

I mean, the one that jumps out to me is like, that people think that money is the root of all money's evil. Okay.

What else?

Rich people are bad. Yeah.

What else?

Money is freedom.

But are we really taught that socially?

I. Yeah, I would say I was. That money equals freedom, but that making money is also hard.

High risk equals high return.

Sure. That money and time are correlated.

Mm. It's a great one. Oh, we do a whole, like, thing on that.

We could. Yeah, we could.

That's actually. That's a profound one. Maybe we should do. Maybe we should do that. Here's the thing. It's like that inside of us prevents us from taking action.

Right.

So it's a dre. It's addressing those.

Right.

And it's defining what freedom is. It's defining what time is. It's defining what your business is. I think some of the best, and I think all investment is people, either you or somebody else, because you're either going to do something with it or somebody else is going to do something with it.

Right.

Okay. So from a business owner perspective, if, you know, you're. If you want to grow as a business, what do you have to become better business person? Right. You need to. What are aspects of a business that you see most people don't get?

I think the biggest one is People forget that business is about value creation for customers, not about plugging into the right system that creates a bunch of money, for sure.

And most people don't go into a business that way.

Right.

They ultimately learn that.

Okay.

But that is true. So one thing that I was. It was awesome that you wrote a vision. You wrote, this is where I want to be at the end. Of all the things I looked at, that is what compelled me the most. Right. Because I've realized just with looking at business, looking at other people's business, looking at their lives, there isn't vision. The vision is like 6ft, 6 inches.

In front of them. Right.

The vision is in a year, two years, three years, five years, right. Now, you may not hit that, but you need to have a trajectory of where you're going.

We all need an aim, for sure. And, man, I'm shocked. I think, that I am sometimes weak at setting an aim and going for it. And I think I'm better than most people.

Why is that?

Why am I better than most people?

No, why do you set an aim and don't think you can actually get.

No, no, it's not that. It's that I think part of the, like, the hardest thing that I do is deciding what is an ideal or what is. What is a worthy aim. What is a. There's. We could do anything we want. In today's world, everything is accessible. Choosing what is worthwhile, cutting everything else and going after that.

Yeah, yeah, that.

That to me is half. Half of freedom is deciding what's worth pursuing what. What is worth going after. And then I think kind of the numbers and all that sort of just play out as long as it's a worthwhile pursuit. So.

So ask you a question.

Yeah.

Would you knowing about the worthwhile pursuit of another business be important before you invested in that business 100%.

Or the.

Person that's taking your money and investing.

Yes, 100%.

That's the thing that hit me, and I see a lot of it these days.

That was really insightful.

2008.

I'm sorry, I have to give context to this because I see so many business proposals from people that want to be invested in. I see so much people who talk about how they're killing it. And so the temptation is to follow the numbers or to evaluate it logically. But. But I have. I've said it, and this has stuck among my peers is. I say, you're missing soul here. And like, there's, like, there's a. There's a missing reason. There's a missing purpose behind it. Where if all of the numbers fell away, is there something else there that still matters?

Well, numbers measure something, dude.

Correct.

What is it measuring?

Yeah, it's, it's measuring value that other. For other people. And I think most people see that as the end game, but it's really the byproduct. And when you're investing in something, I think you're investing in the central reason why the business exists in the first place. Because if the numbers don't work this quarter, this year, there's still some core value there that is eventually going to lead to profit.

But why would it lead to profit? What's that Catalyst?

Because other people value it enough to be able to spend money on it.

What else?

What was the question?

What is the catalyst? What is the, what is the catalyst to eventually making it?

I, I think, I think it's just that people value it, that there's, that there's, they want it more than they want the dollars. Where do you get.

And I would add, I would add that it's the people that are running the company that are doing. Oh sure, right. And what they're doing, why they're doing it, what are they after? And that's where I look at 2008, 2009, and I, you know, there was some investment that I partnered with, you know, in 2005, 6, 7, and part of the partnership that I was, I was in also invested. And I personally guaranteed stuff. And that's where, you know, I lost a lot of money. And it wasn't because the idea was bad. It was that the people were bad.

Now or that the people were short sighted.

And that's what I was about. That was what I was about to say. Did they have bad principles and were evil people? No, but I looked at their experience, right? And I looked at their values and I believe that they were in conflict, right, with their actual business value proposition. And I see it today. There's a lot of people raising a lot of money. There's trillions of dollars circulating out there.

And I see it.

You know, I'm in Salt Lake, right? And there's a lot of other like tech hubs, right? But there are tech companies everywhere. None of them make any money, Right. They're all spending more than they make with the hope that one day they'll make money. And I know that there's a whole business model there. Yeah, I had, my neighbor is like the lead developer for Carta, right? And they do all, you know, Carta is. And he was like, no, that's not how Cap table is working. If look at this capitalization strategy, I'm just like, okay, whatever. Okay, I get it. Right? But, but in the end, it's like these are, these are companies that are, that are people being run by people. Right? For what end, for what purpose? Right? And that, I think, allows you to ask the questions that are typically not asked. Now, you're gonna want to look at their financials. You're gonna want to look at, you know, the direction they're going, their partnerships or contracts. I get all of that. But people skip over the people skip over the people part. Due diligence skips over the people part. And that's where I look at, you know, the. I don't invest with many people. I mostly invest in, you know, stuff that I control.

Right.

Which is mostly real estate based. And then I give money to people who I know, I know their values. I know what they've done in 2008 and 2009 when shit went sideways. And I've seen other things that have gone sideways and what they did, I always look for that. If I will never. I mean, this is just me. And I might be short sighted. I will never invest in someone that has not lost any money. So I want to know, I want to know what happens when things go wrong.

Because eventually something always goes wrong. It does.

Like we were talking downstairs, it's like, it's the S curve. Right? Right now we're in this, like, huge.

Yeah. Are we ever.

But no tree grows to the sky, right? No economy grows to infinity. There's going to be correction. It's economics, it's math. Like, that's how innovation occurs. And we're human beings, we're innovators, we're always finding better ways to do things. Which unfortunately displaces the stuff that was doing that job previously. Right.

Hey, guys, we're going to actually put a little pause right here because Patrick and I went into some, some deep stuff already in this. And if I could get somebody to do one thing, it would just be to set aside some time to think about what it is that you want and what you're doing all this for. And I hate it when people tell me to do that because I spend a lot of time thinking about that.

And I know a lot of us will cover up not knowing what it is that we want, what we've decided with more action, with doing more, finding the next thing. And so before we actually get into anything of more depth, I actually decided to cut this into two parts. Because I think you can't do anything until you have effectively decided what it is. Let's not even say what you want. Let's just say decide what it is that you're going to do. Decide what you're going to pursue. Decide what is actually worthwhile to go after. Until you've done that, there's no amount of strategy or tactic that matters. So we're going to, we're going to pause this here and we're going to pick up the rest of my discussion with Patrick on a future episode. And in that one we talk about the number one investment that you can make with the highest roi. Spoiler alert. Just like everything, it always comes back to who I hope you enjoyed this. Let me know what you thought on Instagram. I'm ryandaniel Moran and you can access more like this by subscribing to the podcast and heading over to capitalism.com we'll see you on the next episode. Back with Patrick again for part two.

Hey capitalists. Real quick. If you enjoyed this interview with Patrick Donahoe from Paradigm Life and you'd like to start learning and implementing the financial strategies of the world's wealthiest people, Paradigm Life is giving away a free perpetual wealth 101 guide to capitalism.com listeners, just visit capitalism.com paradigm and you'll get exclusive access to this free course that will take you down the path to financial independence. Visit capitalism.com paradigm that's capitalism.com P A R A D I G M Paradigm. Capitalists like you create the change we need in this world. Thanks for listening.