188. Shawn Patt | The Building Blocks of Business | Pt. 2

Hello, Book Thinkers family, and welcome to our personal development podcast, Book Thinkers Life-Changing Books. During each episode, we interview one of the world's top authors, and as a listener, you can expect to discover new books, new mentors, and new resources that you can use to achieve more and live better. In today's episode, we have the pleasure to interview for the second time Shawn Patt, author of 11 books, all coming out soon, but today we are focusing on Building Blocks of Business. If you haven't checked out our other episode with Shawn, I encourage you to go do it. It was packed with value, and this one is too. Shawn wants to bring you through all the steps of wealth creation, from the basics of finance to securing funding for a business. Shawn is a certified private wealth advisor with nearly 20 years of experience working at RBC Wealth Management, Morgan Stanley, and UBS Financial Services. He is now the CEO of Attala Financial, which is dedicated to providing the education, tools, and guidance needed to solve life's enduring financial challenges. Shawn is also the professor at the Anderson School of Management at UCLA teaching personal finance, and he is an advisor to the Student Investment Fund there. In this episode, you'll learn about how Shawn is using AI to disrupt the financial sector, all about Attala tools, which Shawn and his team created to help you upgrade your finances, using AI, why optimizing your finances starts with understanding yourself better, why you should utilize AI in your business and life so you don't get left behind, how you can get the same amount of knowledge you would get in college for less than $100, and so much more. Now get ready to learn and enjoy this incredible conversation with Sean Patz.

Sean, welcome back to the podcast. We are excited to dive into your second book, Building Blocks of Business. But before we get into it, I'd love to know what inspired you, someone who has said on our podcast actually that writing and English are a weakness. So what inspired you to write a second book?

So actually, it ended up being kind of book 3. Book 2, I wrote for my personal finance class last fall, a book called The Wealth Compass. Which I haven't marketed at all because it's just the core textbook for my personal finance class. So that was really well received. Students had a good experience with it. And then when I was going into my spring class, I was integrating a new AI case study platform that was going to have an added cost for the students. So I was looking through all the materials that they have to buy and One of the materials they had to buy was an accounting primer on the Harvard website that was $8.75 each. And I looked at it and it was 12 pages and just a very bland primer. So I decided, look, let me just do one for the students. And I wrote the accounting primer because The Building Blocks of Business is actually an 11-book series. The first one was just focused on accounting so I could replace the $9 one they had to pay for last year, just so I could keep the cost neutral on the students as we were introducing a new platform.

So you're a glutton for punishment, I guess. 11 books, that's crazy. Amazing. Most people struggle with just one book. What is your— what's the secret to you getting out so many books? I know you like to utilize AI, but like, is there any discipline practices that you're putting in place to get these books written?

Well, here's the key process. The hardest part is getting the original one in the format you want. So for me, the longest one, it took me about a week to do the accounting primer where I would start with my initial outline, expand the outline, and then do it— have it write chapter by chapter. And so it took about a week to get it written and formatted and proofed and to the quality I wanted. But then once I had that, the light bulb went off that I could replace the rest of the textbook for next year by writing one of these introductory books for each one of the topics in my class. Because a lot of students come in and they don't have any basic finance, marketing, accounting. They've never seen these topics before. So I wanted to write a really simple, easy to understand one with a version with a lot of examples. And once I had that first one, I said, let's replicate this one for accounting. Or for marketing or for statistics. And then it would just replicate the outlines. And then first one took a week, the next 11 took about 2 weeks. So it was just kind of once I had it in the right format I wanted, it could just replicate it, modify it, and adapt it towards the different topic.

Well, Sean, I also think that writing is my weakness. I do think about you from time to time when people tell me it's really difficult to write a book. And now I can say that you wrote how many in that final 2-week period?

10 books in that 2-week period.

10 books in a 2-week period. And for anybody that didn't listen to our first conversation, can you talk a little bit about why you think ethically it is okay to be leveraging a platform like ChatGPT to write and put out books? Because a lot of people would say, I don't know if that really counts as a book. And in fact, Sean, I wanted to tell you, I got a book recently in the mail, and it literally says human-made on the COVID Like, people are really, they're really trying to differentiate themselves away from the technology that's available now.

So, big piece there. I would say, I would bet very few of those people have actually tried to use it. Because everyone I know who uses it extensively, it turns into an extension of them. My employee Right? If I ask him to do the exact same thing as me, he doesn't get the same kind of results. And the more you do it, the more it turns into your flavor. And this is actually one of the experiments I did when I was writing these books, because I'd read all the reports of how Anthropic's version of ChatGPT, Claude, had surpassed ChatGPT on many metrics. So when I started doing these books, I literally did exact prompts on both of them to get a side-by-side comparison. And what I found was Claude was actually better on the outlining process on most of them. So I used Claude for the outlining, but to make sure it had the same writing style that I've developed for all my other textbooks because it's really learned to be my extension. I went back to ChatGPT and had ChatGPT actually do the writing part. So it was really interactive between Claude, ChatGPT, and me as the ultimate auditor and arbiter and one putting it all together, right? Because that's really where the world's moving towards because Net-net, anything from me, right, is represented by me. And here's the other piece. As many people as I talk about this to and try to show them how to use it, they're still stumped, right? I say they keep coming back, how do I write a book? I'm like, use ChatGPT. And they go there and they can't figure it out.

How many more books or how many more book series do you think you're going to end up writing? Do you have any estimate?

I don't think I can fully conceive of it yet because what I've done so far is just map out the core basics. And that was the easy part because that didn't— doesn't require your top 1% expert in topics. I'm gonna in process doing a equity analysis book for my MBA class, but ChatGPT can't do any of the real work on that. I really need to do it. There's gonna be books on lessons from history. I started a series on children's books. So my daughter, we found out, has celiac disease. And so, she and I put together a children's book on being positive and not letting a condition like that weigh you down. And then, turn from the— once we had the girl version, we made the boy version, and then we modified that book for dairy allergies. And then, we did boy and girl on that. And then, my daughter actually had her appendix out this weekend. And thank God she's okay. But there's a book on Amazon now about who needs an appendix. So it's kind of become this little hobby. And now I'm— for like some of my— some other friends where I'm putting their kids in these books, just not online yet. But for me, it's kind of cathartic, kind of a hobby now.

You might have a whole nother business on your hands. Wow, that's amazing. I'm really curious about this whole AI thing because you're utilizing it to write books and there's some authors out there that are like, oh no, it has to be authentically human, blah, blah, blah. How do you feel about AI coming in and taking maybe teaching jobs or finance jobs? What are your thoughts around that? And are you okay with it? Are you scared of it? What do you think about that?

Unfortunately, I don't make the rules of the game. Right? These things are coming. It's not going to be pretty for the labor force. But that's why I think it's really important to get out ahead of it and be on the right side and not be afraid of it. Because, for example, if you're doing PR and you're stuck on it being me, me, me, and you refuse to adapt and use any AI, you're going to completely miss out and be left behind by other firms that are embracing it. Because ultimately, I think it's going to be, right, your experts at the top who are managing AI systems that are really going to be the ones that rise to the top. And unfortunately, there's jobs get left along the way, right? We don't need typists anymore. And But I don't think any of these jobs are going away. We're just gonna need less of them.

Yeah, that's such a great point. And I think what you said before, which was it's an extension of me, is a really cool point. It's kind of like our phones, you know, and I forget who said this. Somebody told me about it. It may have been you, Nick, about Joe Rogan saying, you know, you're, you're not human anymore if you don't have a phone. Like being human is having a phone. Like it's part of being human. So AI could be very similar in the future. And even now it's upon us. It's like, you can't be human without utilizing AI as an extension of you. So I think that's a really, that's, that's an interesting way to think about it and probably a healthier way to think about it moving forward because the people that don't utilize it are going to get left behind and in many ways already are. So you need to know how to use it. That's so, so great.

So, I'd like to add, just point out one real risk of that. And Microsoft put out a paper that detailed a lot of this quite well. Overreliance. That human nature, once we think a system is being controlled and is correct and we stop questioning it, we fall asleep on the job. It's think about like the operator, right? Homer Simpson. Right, sitting at the power plant and everything's fully automated and taken care of. So he just falls asleep, right? Humans need some sort of ongoing thing to keep us engaged. And so that's why people who just say, oh, AI said it, or even Google said it, it doesn't make it true. Ultimately, I'm responsible for everything I put out. And that's kind of— it's me.

Yeah, Sean, your episode, this episode will probably come out right around the same time as an episode we're recording with Nick Bostrom, who just wrote a book on the future of AI and what it's going to look like as we kind of roll the, the time span out a little bit. And you're right, like when humans become disconnected or lose the reward systems of being engaged in these systems, I mean, who the heck knows what's going to happen? To go back to the Building Blocks of Success series for a minute, We can, in the show notes, put a link to each individual book. Do you mind giving just kind of an overview or a brief overview or summary of each book in the series real quick? I'm sitting here today with Ken Rusk, who has done hundreds of millions of dollars in business. He's also sold tens of thousands of books and changed countless lives. We're sitting here today because he is sponsoring today's episode. So Ken, tell everybody about your course.

Well, thank you. I built a course called The Path to a Successful Life. It's designed around trying to get somebody unstuck. You know, sometimes you're feeling like you're kind of stuck in where you are and you're not really sure what you want your life to look like or how to go about getting it. Well, for the cost of about dinner and a movie and maybe the time you'd spend on a weekend, you can know exactly what you want your future to look like and how to go about getting it.

You know the power of vision. That's why you watch podcasts like this. So click the link below, get signed up, and let me know what your experience is like.

Yeah. So, um, I kind of lay it out in kind of a format Except for the final one of how kind of what you would go through in business school, right? What are the basic steps you need to go through? So we start out with kind of the basic economics primer, which is really focused on managerial economics and understanding the micro level of pricing strategies and Market structures and stuff like that. Then we move into the intro to finance, really because finance is about kind of the capital, the money and time value of money that makes business work. Then we move into the accounting primer because once you understand the numbers, it's it's about keeping track of them, right? Accounting is everything. Some of the best business people I know. Would close their books not quarterly but daily, right? Because when you're doing that, you're on top of it. You know your numbers, you're on top of it. Then we get into the statistics primer, right? Which really helps you kind of get more proactive and looking at kind of the big picture stuff. And then that leads us right into the primer on macroeconomics, right? Once you get beyond just Your own micro business and understanding your structure. Now you got to get into kind of the big picture in the whole world. So then from there we get we go dive into the human side, and we have the primer on behavioral behavioral finance because ultimately right numbers are great, but humans are humans. So we need to really understand ourselves and where we make errors. Otherwise. Numbers are worthless to us. Then the seventh primer goes into organizational behavior, right? Because as a business grows, needs change on the business, and really you got to have the right team dynamics and leadership and culture in place. It's not necessarily people's most fun topic, but. I've learned it's critical. Number one challenge in running a business is the people side because you're working with people who have feelings and emotions and families and personal lives and problems. And the 8th book in the series is an intro to marketing. So, you got your product. Now, make sure you understand the right principles and concepts and strategies and channels and Really at a basic level for someone who's never done marketing. 9th primer gets into operations management, right? Once you get to the point where you're not just drinking from a fire hose and you got to really think about capacity planning and process design and inventory and these types of things. And then book, then book number 10 is a primer on strategy, right? Kind of tying it all together in a basic way. And I bring in a lot of real-world examples of companies that have done it correctly. And so then these kind of laid out the first 10 core concepts for any business program and realized that the last piece I needed to complete the textbook for my class was a primer on business formation and funding. So in this one, I introduce kind of picking the right type of corporate entity and taxation issues and other legal things to think out. Doesn't give legal advice, but helps you understand at a basic level what are the good questions you should be asking an attorney you work with. And then we get into capital raising and Understanding convertible notes and SAFEs and all the basics of actually getting money and giving away ownership of the business. So this kind of core series, I think once you go through these 11, it really wraps up kind of your basics. Again, it's not going to give you kind of the super deep depth where you learn how to do statistical analysis, but you learn enough Right. So, you can talk the language and understand what people are saying.

And, for somebody in the audience who's interested in buying some books, I'm just curious, what's the average cost of each book in the series?

I think each book on its own, I think I have a hard copy at $5.99 right now.

So, what's 6 times $11? $66, $70 plus a little bit of shipping. I mean, You could spend 6 figures on a college degree and learn all the business basics in undergrad, or you could spend under $100 and get the entire experience for far less money and in a lot faster of a time. Because I have all of the books. There's some content on the Book Thinkers IG for everybody that wants to go check it out. But I mean, you can get through these books pretty fast too.

It's meant to get you up to speed or even I was showing my mom the series and she grabbed a few of them because she forgot all these topics and she just needed a refresher on t-stats and different things in statistics.

So I'll ask one final question and kick it back to Luke. Not final question, but one more question in my string of questions, which is, I mean, you teach at the collegiate level. Like, do you think that college is becoming less valuable when information like this is so readily available. And somebody like you has taken a college textbook and essentially made it available for less than $100 online. And I mean, listen, when I think back to my business degree in college, you pretty much just summed it up in the 11 books.

Unfortunately, I'm a little cynical because I believe Uh, your most important reason you get your degree and where you go to UCLA is for the letters behind your name, job placement, and networking. The actual education you're getting from the class is maybe 5th or 6th on your list. So, um, again, that's not why you're going there in the first place. Um, the cool thing is now, um, we can bring down the cost, and then the next step we're doing with the, this book series is we're going to work to integrate AI case studies. So all these, the whole book series will be posted on, on our website, atalatools.com. And then as people go through there, right, you'll click through and now you're going to have these nice interactive case studies that will actually be led by another AI system. So I'm working with a company that's doing those, but that's in the pipeline.

It's so amazing that you're giving just like everything. You're like, here's all the tools you need to get your finances right, to get your business started, and to go off and figure things out. That is like so cool.

Yeah. Well, and thanks, Luke and Nick. One last point I want to make, kind of addressing your point. I learned portfolio management and how to invest Through Google back in. I didn't learn it when I was at UBS. Our training program was horrible, didn't teach anything. I learned use Google and started looking up articles, and I'd find what they reference, and I'd search for that article because the reality is all the information is out there to learn anything you want to do in the entire world, and it's been out there. So the information, everything I teach at UCLA, right, students can learn on their own. The reason they come to me and the reason we built our website is we're almost at a point where there's too much information out there. And how do you know what to believe? You read one thing says one thing, one thing says another. ChatGPT hallucinates. How do you really know? So I realized that people come to me to help filter this stuff. And that's kind of like the goal of the website we're building, where we can help filter out this information for a greater audience, not just UCLA students. Because you go to Google or ChatGPT, it's like, what do you believe now? There's just— it's hard.

Yeah, I mean, that's, that's great points. And I think something too that I'm just like, my brain is stuck on is college for networking. You know, like, we are in a time where there's a lot of loneliness in the world. And I think part of that is like less and less people are going to college, they're not getting those friendships that you may get. And that's just a really interesting point. Because I've been very gung-ho against college recently in my life. Like, oh, you can learn it all on Google, don't spend all that money to go to college. But just that, that networking piece is, I think the thing that may be like missed in this world of social media and Learning on Google, that, that may even be the big piece that's missed. So if somebody could answer the call to that, that could be really, really powerful.

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And now back to the show.

Yeah, it's the mental health piece, right? We're humans, right? We do better when we connect. Where online learning, it's horrible. It's not a fun experience.

Yeah, I, I 100% agree. So having it all in one place where you can go, it's like you got the books, you got the website, like that's amazing. And I think more people should learn from that too. And like whatever their expertise is, like put it all in one place, get all the books out, and you can do this with the help of AI, which is really cool. So I would love to like talk a little bit about You know, maybe this, you can tell us a little bit about some success stories in your series because some people have gone through them and I would love to hear some of those stories.

Success stories as far as?

Yeah, like people that have gone through, gone through your books and like done some of the, you know, some of this, gone through some of the tools on AtlaTools. Like what are people telling you? What is the feedback that you're getting about it all?

So when students are going through this, it kind of Especially once they get onto the website and they start really putting numbers down and mapping things out, right? It just kind of blows their mind, right? So for example, one of my students, he's looking to buy a home, right? Not one around here, but somewhere in, I think it was Oklahoma Section 8 housing. And so he came to me with his model on Looking at his debt-to-income ratio and, right? And he's not even in my personal finance class. So, I point him to the right textbook and then he goes on the tool and he's like, oh my God, because he had used Dave Ramsey's debt-to-income calculator, right? Where you go on the website, you plug in all your details and it gives you your ratio. And he learned you had to be under a certain number and he thought it would work. Shows it to me. I'm like, uh-uh, because he didn't include property taxes, didn't include insurance, which aren't debt but are part of your debt-to-income ratio. And so it really opened up his eyes to kind of, whoa, whoa, there actually is a higher level that if you just go too basic, you're gonna, you're gonna miss stuff. Another good example for not just buying a home, but for modeling out a real estate project, right? They came to the website where they could learn the sequence on what to do and why the different things are included on building a pro forma for a real estate project. And then they've got the tool where they can map out the 10-year rate of return. And we saw that on the, the triple net lease that didn't have rent increases. The return didn't look very good over time. So you can not just looking at the price today, but really modeling out over a 10-year, 7, 10-year time period what your rate of return would really be.

Shawn, I was clicking around on Atala Tools a little earlier and your website and platform, they're gorgeous. But let's talk about the functionality a little bit. Why should somebody in the audience click the link in today's description and check out your platform? What are some of the tools that you offer? What are some of the benefits for being a member and subscribing?

So, there's lots of free tools that you don't have to be a paid member to experience. But really, the number one tool while some— why someone should get on our website today is our financial plan tool. So this is where you can map out your entire financial life, how much money you make, how much you spend, not just today, but from now through the end of your life, including kids' college goals, Social Security income, all the different features. Sounds hard and complex, but we've got it mapped out in a simple click-through process where within 5 minutes You could map out your whole financial life. So, the dirty secret that most financial advisors don't want you to know is they usually build a financial plan like this so they can charge a fee and manage your index funds, where usually they're just babysitting your fund. So, if you come to our platform and learn how to pick your own index funds and not pay a fee, and pay our $20 a month fee, right? That's a flat fee to map out your financial life. Someone will save over 30 years close to $1 million. So, they'll actually save money by learning to take control of their life versus turning over the keys and overpaying people to do it for them.

Yeah.

Luke and I were on-site filming with a client recently and we were talking about how as AI gets introduced more and more and more into the financial management space, there'll be less need for an actual advisor paying that fee like you're talking about. And so it's fun that not only do you have this platform, but you're also kind of leading the way and at the head of the AI game. And so you'll continue to integrate as much as possible and as much as needed. And so it seems like a pretty safe bet to invest in this platform and kind of self-manage because you'll always have the best tools.

So, we're not there yet. But the first paper came out this week by University of Chicago showing that ChatGPT, without knowing what the company is, name of the company or period, just income statement and balance sheet, was better than the average stock analyst on predicting whether a stock would be up or down in earnings. That's the base level. We're going to take that concept on the TALA Tools because our other crown jewel product is a discounted cash flow model builder. So for publicly traded companies, we map out the proper way to value companies with base case sample projections. The next step we're going to integrate in a future product is going to be fully AI-built forecasts because we believe that these models will be better than the average analyst. But then that provides a transparent market view that top-tier analysts can then use and see how their worldview varies versus ChatGPT and what the market expectation is. So we've got all kinds of goals in there, and, and we'll also have, uh, your own eventually on Atala Tools, your own AI financial advisor built in. Because the problem why no one can ever email me or ask a question in class— well, how should I invest? Well, I don't know enough about you. With our platform, we will know enough about you because you've given us all your details that the AI built into our system will be able to give you good advice because it will finally know enough about you. It won't just be the generic, uh, just buy this index fund, right? Because it'll understand your future liabilities, it'll understand your risk tolerance, and Because all this will be built in. So it's gonna be a lot of fun.

I feel like I'm kind of watching like the beginning of PayPal, you know, a financial disruptor coming in like that. It's so good. It really is so cool. Like, I'm just— you're talking about it and I see this huge vision for it, which is really awesome because I feel like, I don't know, I mean, I've looked around, there isn't, there isn't anything out there like this that I've seen. So it's really cool that you're on the, like, the cutting edge of this. Do you feel that way about it?

Again, I'm super excited about this launch for it because it's the only competing products that can do anything like this are going to be $400 a month designed for a financial advisor. And so they're not accessible for an individual.

Right.

This frees up the individual to have 4 different advisors or accounts anywhere. And then you're the ultimate decider, and you manage the whole process because you've got a nice easy platform to do it. Because most people can't do it in a spreadsheet. It's hard to do. Um, took years and years to get it to this point. Um, so it's, uh, gonna be fun.

Well, it's definitely amazing to see, and I, I think it's so cool just like watching this. I mean, I feel like we've— even in the time that we've known you, the progress that you've made is insane. And it's going to be really cool to see what happens over the next 6 months, year, 2 years. It's, it's really cool. So like I said, I kind of feel like I'm seeing the birth of the next financial disruptor in the industry, which is amazing because there hasn't been one of those in a long time, it feels like. So very, very cool.

Thank you. Appreciate it.

Nick, do you have any other last questions that you'd like to ask before we wrap up?

No, listen, I, I think it's cool that you're making all this available for for such a low cost, both on the book side and on the Atala Tools platform side. So I'm excited to just sit back and see what you do, my friend. I'm impressed.

I appreciate it, Nick.

All right, so I have 2 more questions. The first one, and I know we've kind of talked about where we can find you, but just to restate it because repetition leads to retention. So yeah, where can people go to find out a little bit more about you and order all the books?

All right, so, uh, to find out more about me, You can go to atalafinancial.com or find me on LinkedIn. I like connecting with people. To find the tools, you go to atalatools.com. To find my books, I wanted to make it easy. So, it's tinyurl.com/shawnspat, S-H-A-W-N-S-P-A-T-T. So, uh, every— that will link you direct to the Amazon page.

Beautiful. And we'll make sure we put all that stuff in the show notes. Okay, this is the final question. It's a little bit different than the other one, but still kind of hypothetical, which I like to ask if we have a guest on for the second time. All right, it's this: you're magically 18 today. You're starting with all the knowledge you've accumulated, but none of the money or connections. What are the maybe 1 to 5 things you would do to get to the level of success that you're at now within a couple of years?

This is easy, right? I would become an expert in using AI. I would reach out to— again, you can learn everything you want, anything you want to learn. You tell AI, design a course for me in XYZ topic. I can learn anything. It'll teach you anything. I would get really good at using it, and then I would start reaching out to successful older people that I know are not using this, and I would offer to come help them utilize it and demonstrate it. Because I think you're— the skill set you would have would make you invaluable to that person. They would never be able to let you go. Because they will never get quick enough at copy and pasting and, and really integrating it into their workflow process. But a lot of them really would love to use it. They just kind of don't know how. So though that skill set, I think, will, will drive anyone to the top over the next 5 years.

So powerful. I mean, if somebody actually takes that to heart today, whoever's listening to this, take it to heart. You can become pretty wealthy by doing just that. And then also by following, going through all of Sean's books and getting on Atla Tools. So amazing, Sean. Thank you so much for the value that you gave us today. This was an incredible talk and I had such a blast chatting with you.

All right.

Thanks, guys.

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