Heroic Investing
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What’s Next for Real Estate Investors with Pat Donohoe

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Gary Pinkerton starts off the show by discussing Pat Donohoe’s new book, “Heads I Win, Tails You Lose.” Afterward, Jason Hartman interviews Pat about recent political changes and how the U.S. economy will be affected. They also talk about Paradigm Life, the stock market rally, and how Patrick makes the right investment and performs due diligence when acquiring properties.

Announcer 0:04
Welcome to the heroic investing show. As first responders we risk our lives every day our financial security is under attack. Our pensions are in a state of emergency. A single on duty incident can alter or erase our earning potential instantly and forever. We are the heroes of society. We are self reliant and we need to take care of our own financial future. The heroic investing show is our toolkit of business and investing tactics on our mission to financial freedom.

Gary Pinkerton 0:39
Hello, and welcome to Episode 139 of the heroic investing show, a podcast for first responders, members of the military, veterans, and anyone looking to improve their financial future and gain some freedom with their time. We teach America’s heroes how to build passive income, build their startup business, and safely grow wealth through real estate and other alternative investments. We help current and prior first responders put protections and systems in place to enable them to build a life where they can focus on their passion, the service or product that they are uniquely gifted to share with the world and Gain Compensation from my name is Gary Pinkerton. And I co host this show that hopefully you find helpful and inspiring with Jason Hartman. And today is one of Jason’s episodes. So the one I picked for today or the that Jason is going to be running today is an interview that he did on the creating wealth show with a mentor of mine, Patrick Donahoe, so these two guys Jason Hartman, Patrick Donahoe, I’m blessed to have been able to put those two guys together a couple of years ago. And really, it was a bit self serving, because I drew together two mentors that I truly believe in. Patrick, is a gentleman that I met back in 2011, even before I met Jason, and as I was just starting to look into improving my family’s finances, and starting to look into real estate investing as an opportunity or an option for some cash flow, right, getting passive income that enables me the freedom gives me the opportunity to be able to step away from an earned income salary position, if I want to run my own companies, start my own businesses and help others do the same. One of the reasons I’m running this one is because Patrick just came out with a new book, which I think this audience would greatly benefit from reading. And you have the opportunity to get a free copy of that book, if you just reach out to me at Gary at Gary Pinkerton calm, that’s just my name. So Gary at Gary pinkerton.com. And I will send you a copy of the book, it’s an E version or an E book copy, you can certainly go to Amazon and get his book there either in paperback or hardback version, if you’d rather that method. And his book is titled heads, I win tails you lose. So it’s an interesting title. It’s somewhat catchy to kind of get your attention. But the point is that those with financial knowledge, those that understand how to protect their money, how to maintain control of their assets, and how to focus spending their money on things that have the highest probability of providing them success are those that continually generation after generation make out. And, you know, Robert Kiyosaki talks about a coin, where there’s one side, and then there’s the opposite side. So there’s heads and there’s tails. And then there’s the third side, which is the edge and understanding the argument between heads or tails when it’s buy or sell an asset, by standing on the edge, understanding both points of view, and then making your decision based on the situation based on the current mechanics of things, makes it such that our economics of things makes it such that you have the ability to understand the full picture and make a decision, a fully informed decision. And that’s what the truly wealthy the truly professional do. And that’s what Patrick talks about in his book. And so that kind of led to the part of the title as well, I had the extreme pleasure of being able to help him contribute to that book and edit the book. I’ve read it many, many times. And it’s having a substantial effect on people who have read it. So I really push you, I urge you to go read that book. I mean, in there, in chapter seven, he talks about something that he’d coins, the saving and investing pyramid. And it’s the concept or the idea of building a pyramid, where of course, you’re going to lay the bricks on the foundation, build a nice solid foundation and then step up from that to the next tier. And he talks about like four tiers and the bottom tier is really what we do at paradigm life. You know, it’s protections, and it’s saving stuff that has to remain liquid. So your emergency savings, your business savings, your reserves, for your businesses, and for Your properties if you have rental properties, and then when you move beyond that, it’s about direct investment, it’s investing in things that you directly control, you get to decide when to buy and sell when to devote $1 to each one of these things. And because you have that control, as a result, you have less risk, right? Because you have the ability to understand everything that’s happening and control the outcome. And the number one thing to focus on in any situation when you have $1 is your highest performing asset. And he makes a very strong argument in this book that everyone’s highest performing asset, the best asset that has the highest potential is themselves. So investing in yourself is really the first thing that you want to do, once you’re in a position where you’re not going to fall off the pyramid, which in my opinion, is living underneath an overpass and holding up cardboard signs. And that happens when you’ve messed up the first level of pyramid. So so many people out there, because this is what their HR department at work talks about, put all of their money into 401, K’s and yet have thousands of dollars in student loan and credit card debts that are eating them alive with interest payments. It’s because they haven’t built the bottom level that pyramid and so I believe Patrick’s book is one of the most important things you can do for your family’s financial future. And I really push it to get out there and and read that book and I’m offering you a copy of it. If you don’t already have one, or don’t have a source for one, please just go to Gary Gary Pinkerton calm. And so in this in this interview, Jason and Patrick talk about meet the Masters this January. And all of the changes that were happening at the time, they kind of start off talking about President Trump our first real estate president, and the tax law changes that are coming, how there’s a lot of different opinions, but they make a prediction that in my opinion, has really, really come come to fruition. And that was that, you know, Jason makes a comment that people will be more optimistic when they have more money in their pockets. So, you know, he’s commenting, I think it was Jason, I don’t know if I said Jason or Patrick there. But it was Jason. And, you know, he’s saying that he’s, you know, these predictions are going to come true that that America is going to get stimulated, our economy is going to start to turn north. And when people’s paychecks and their quality of life, their standard of living goes up, they’re going to be a little more optimistic. And I think we’re seeing that come to fruition. Everyone, there’s a lot of people who still, you know, believe that he’s he could be a little more refined, he could be a little less awkward in social and international political situations. But it’s becoming more and more hard to deny the fact that some of the business decisions he’s making are starting to turn out to help our economy, no doubt. Another great one from Patrick is that the nature of the uneducated investor is to buy high and sell low. And there’s a report an annual report that goes out that you can purchase called the dowel bar study. And they look at you know, how the s&p 500 how all of the markets have done over time and how the individual investor the average investor has fared, and they do substantially worse than the indices themselves would predict that individuals would do. And it’s because of this kind of buyers mentality or this investor mentality. So I think there’s a lot of nuggets in this about free enterprise entrepreneurship, prospering, having control liquidity and use of your money. And the other things that I’ve talked about, about setting up your your personal financial picture, so that, you know, you can take the steps to perhaps walking away from a W two job, if that’s your goal, or starting your own business. Again, if that’s your goal, you know, in the end, it all comes down to income, right? You know, what we really want and most real estate investors understand this, they understand that the road to wealth is paved with passive income sources. And in, you know, as you transition into retirement, the only real change there that happens is that you have a feeling that that income source, the adequate income that you’re going to need, if you live to 90 or 150 is that the income is relatively guaranteed, if not 100%, guaranteed. If you have that if you have guaranteed income. In my opinion, your net worth does not matter. If you have 100 million dollars, and you don’t have any guarantees that that will stick around to provide an income source for you. It’s useless, while an individual that has no money in their bank accounts, but has a pension from let’s say, the federal government that is likely to continue throughout their life, then that person’s completely secure. So it’s about income, right? So it’s about income when we’re younger, still have working years and want to have the ability to transition to some new job to travel the world to spend time with our kids or our grandkids, take time off work. All of those things simply just require the confidence That we have income to replace that w two, trading time for dollars income that we’re currently doing. So it all comes down to income. And certainly in retirement when you’re having an ability to work or certainly no desire to continue with manual labor, having a guaranteed income is really where it is, right? So it’s not about net worth. It’s not about everything that you hear on television, about pass your money to Wall Street, and they have your solution, they may have your solution for accumulation for growing wealth, but they don’t have a solution for distributing it safely throughout your retirement years. And so I think Patrick, and I think his book, and I think questioning the status quo are really, really important. So this one might be a little bit off of real estate, although they Jason and Patrick get into real estate quite a bit. I invite you to think about this message, consider getting Patrick’s book, read the thing. I think you and your family will appreciate it for years to come. Thanks so much. And I look forward to our off topic episode coming up here on 140. Our next show, thanks so much. And we’ll talk next time here are Patrick and Jason Hartman.

Jason Hartman 11:09
This is your host, Jason Hartman and welcome listeners in 164 countries worldwide. My guest today who will be with me through the entire show is Pat Donahoe. He is the CEO of paradigm life. And he has some pretty interesting, unique tools that help real estate investors. And we’re going to talk about that, but first, I just wanted to get a little debrief because he was one of our distinguished speakers at meet the masters of income property. 2017. So I wanted to quickly be brief on that. also talk about the new administration, and this massive tidal wave tsunami sea change that is coming at all of us, which I think is a very good one. I think we’re in for boy, Happy days are here again. I don’t know. Maybe I’m being too optimistic. But Pat, welcome. How are you? I’m great. Jason, I’m

Pat Donohoe 12:02
great. Yeah, it’s gonna, that happy days happy. I mean, that not many people are happy, but there’s certain people that are

Jason Hartman 12:09
there are some disgruntled people, but when they see their paychecks increase, I think they’re going to get a lot happier. They’re probably not going to give the evil Donald Trump any credit for it because they hate him. But it’s going to happen, you know, the rising tide floats all ships in lower wage and middle wage, people are going to benefit from this massive economic stimulus, which I believe is underway. He’s only been in office a day.

Pat Donohoe 12:40
So what he was doing, he was doing a lot even before he went into office and look at all the momentum that he created there. So it’s, it’s it’s been a it’s been impressive. Yeah,

Jason Hartman 12:50
it’s, it’s pretty amazing. Well, we’re gonna talk about that. And by the way, you are coming to us from beautiful Salt Lake City today. I was actually out there last week visiting you and talking about some business things and so forth. And I wanted to just get your take on meet the masters of income property we had that I just got back last night from Irvine, California. You spoke there along with G. Edward Griffin, who’s the author of the creature from Jekyll Island, very famous author and he was awesome. And Garrett Sutton, the author of many best selling books and the rich dad series and outside of the rich dad series with Robert Kiyosaki. We also have Darren Bloomquist with realty Trac and Adam data solutions talk about what to expect in the real estate market and, you know, a lot of wonky economists type stuff, charts and graphs and, and we’re giving those his charts and graphs, his slide deck to all of our attendees for meet the Masters we had, I think we probably had about 140 people there. And you know, Pat, what do you think of the event?

Pat Donohoe 13:51
Well, I mean, it was the first time I I had been to a meet to masters event, and I’ve gone to lots of different different conferences, but I was I was impressed. Jason, you did a great, you did a great job. And I think it was was really interesting to see just the diversity of topics and and speakers. And and that’s why you know, with with me and kind of how I look at whether it’s my investment or my business, or the economy I I’m big on being prepared and looking at what you presented, or at least your purpose speakers presented or was, you know, from a data standpoint, what the economy is doing from that outcome objective measurement with the reality track guy, but also multiple markets and how they address certain things going on in their specific market. I mean, it was it was intriguing, it helped kind of confirm a few things for me as far as what I think is going on in the economy. But at the same time, it also brought up some other questions that I had, but the people there, the caliber of people was was incredible. I had some fascinating conversations, just in investing, but also with, you know, from an economic and philosophic standpoint, because Gao Griffin was there. Some great conversations as well. So I think that’s, you know, the 50% of the benefit is really the people you get to meet and network with, and get to know. So I had a great time. Yeah, you know,

Jason Hartman 15:11
there’s so much exchange of ideas that happen. And this was the first time we did breakout sessions. So I got some really good feedback about that, even though it was raining and pouring and storming in Southern California, that’s for sure. Who says it never rains in California? I don’t know,

Pat Donohoe 15:27
that went for I went from 18 inches of snow to an 18 inches of rain. It seemed like,

Jason Hartman 15:32
you know, it must be all that global warming, I guess, you know, always the reason the weather’s changing, but you know, whatever. I was freezing. And that’s due to global warming, I guess. You know, that’s magic. You can make any new logic nowadays, you can make anything up. It make anything try to make sense. It’s crazy. So, Pat, you know, Trump has been in office for one day. Literally, yesterday was his first day, his first work day. And already there are companies like Foxconn, I couldn’t believe what I read. Foxconn is the Chinese manufacturer that creates all these Apple products and in China, and their giant, by the way, and and they announced said that they are considering a $7 billion billion with a B $7 billion factory in the US that would create 50,000 jobs. I don’t think that would have ever happened under probably any other president, even Reagan who was considered to be very business friendly. And, you know, basically, it works like this. If if the companies want to bring their goods into the US and access the largest consumer market and the largest economy, the human race has ever known. The US economy, the What is it? About $18 trillion economy 72% of which is consumption. So it’s not just the size of our economy, but it’s the massive consumption of you know, the American Americans are consumers, okay, like no other. Right? And, you know, we can argue whether that’s good or bad, but it is the way it is. And, you know, and so, you know, the the toll you have to pay to access it is a tariff. And, you know, philosophically I don’t really, you know, I love free market stuff. But just from a practical purpose when you have the playing field so unlevel, you know, with Chinese workers making nothing compared to American workers, but you know, then again, that affects American workers, because it pulls down their wages creates unemployment here or under employment. And, you know, the discouraged workers, which aren’t even counted in the unemployment rolls. So people this is you’ve got to peel several layers back of this onion. But Pat, like, you know, it’s, it’s, it’s a better deal. Now, the way Foxconn looks at it, and so many of these other companies to just set up a factory in the US, so they don’t have to pay a tariff. Right. And so that’ll bring, I mean, 50,000 jobs in one swoop. You know, there, there have been many other deals that Trump made before he even was president. And like you said, he set this whole backdrop, this whole context for this, you know, what, what do you think? I mean, what can we expect?

Pat Donohoe 18:15
Well, I, what I and I try not to speculate a lot. And that’s why I’ve, you know, last year, I started to go through a lot of his books, and get an idea of how he did business, because I just came to the conclusion that the way in which he would run a country would be similar to his philosophy of business. And I think he, you know, so far, it hasn’t been too much time. He’s stayed true to that. And his his passion, is getting deals. And he made that very clear in his in his campaign. And looking at what he’s doing right now, I think he is, you know, he’s making the wager to the rest of the world, which is, you know, American, he said, This inauguration speech in America is his first. And so if there are deals out there, that is weighted more toward the trading partner, rather than America, he’s going to he’s going to change that. And so, if that’s, you know, the reason Foxconn decided to make that announcement, but I mean, you look at like the, you know, reinstituting, some of the negotiations with NAFTA, reinstituting, that, and also, you know, the Trans Pacific Partnership, and he that was Those were his first orders of business, which sends a signal to all the trading partners, which is you guys better, you know, do deals with us, you better do what we say or else you’re going to, you’re going to lose, and I think people are, I think trade partners are thinking they know, he’s serious. And so it’s good. It’s gonna be interesting. And I would say, you know, once you give me some feedback there, I would say that there’s always going to be unintended consequences to that. Because you are, you know, removing production and price structure through, you know, how a product is created from a country where it’s cheaper, you know, In all thing, you know, all things being considered cheaper than the US, you know, really the terrorists and the taxes they’re gonna have to pay. And whatever deal that is negotiated, you know, if it doesn’t come out to a net cost of the same, you know, it may adjust prices on the upward so that even though people have more money in their pocket, they may be paying higher prices. I mean, that’s the rhetoric that I’ve heard. So it’s gonna be interesting to see how the deals actually play out, and what the consideration is given, you know, from the United States to this trading partner.

Jason Hartman 20:33
And this may sound like, you know, Trump is being a tough guy jerk, right. But that’s only because when you compare it to the terrible deal, that prior administrations, especially Bill Clinton, but they, every one of them have sold out the American worker, okay, it’s not just Clinton, I mean, you know, this goes way back, okay, and everything in between. But Clinton was one of the biggest offenders I believe, you know, they just sold out the American worker. And so now to get things back to like, equilibrium, that’s, that’s all that he’s doing, you know, is getting, like a reasonable deal. Back and, and not incentivizing these companies to leave American soil. I mean, it’s just been, it’s just been terrible. They take all these jobs with them, they have no loyalty, it’s kind of like in sports, how they, you know, in the old days of sports, and I don’t know much about sports, because I have way too much to do than watch, you know, sports games on TV. But you know, in the old days used to have the home team, right. And the home team was a pretty, you know, solid home team. And you knew who the players were year after year, and, and you know, they change out a little bit, but then when you had free agency began, there was no such thing as a home team anymore, right? Because all those players moved around all the time. And they just became, you know, you could call them capitalist or you go on prostitutes, whatever, right? They just, they just begin looking for the best deal, right? And they had no like allegiance to the hometown anymore, or the home team. And that’s what’s happened with these big multinational corporations, you know, they have no allegiance to the people that made them successful. All these companies, they, you know, they got successful selling to the American consumer, but they don’t feel any need to give back and create jobs for American consumers. Right?

Pat Donohoe 22:28
Well, I think I think you look at you know, whether it’s the Clintons or with President Obama, they former President Obama, I guess I should say now, but they, I think if you look at him, his, you know, the narrative was he was the world, he was the world leader, he wasn’t the just the US that I think he looked at himself as a thought leader for the world. But at the same time, that’s, that’s, it’s, that is not really how I think those healthy relationships are created, because the cultures around the world are much different than the culture of the United States. So I think as you know, he would try to pander to people, or he would try to be nice or make friends and us in a certain sense, right, he gave up he gave up a lot. And he gave lots of when we’re still giving a lot of money to the outside the outside world as this kind of sign of charity, I think they, you know, whether it’s a cleanser or other him, it’s this, well, we need to give, we are so prosperous, and we have abundance, and we need to give to other people, but that it never works. And typically, we get the raw end of the deal when it comes to and so that’s where I think with Trump, you know, he’s a businessman, he’s not emotional. He’s not trying to be a world leader. And I think, you know, when he was preaching on the campaign trail, he wasn’t just preaching to the American public, he was sending a signal to the rest of the world. And like I said, I mean, that’s just how I look at it from an information standpoint, looking at what the result is going to be because of some of his initiatives. That is where I’m, I’m just curious, because really, those those big changes, where you’re removing, you know, removing jobs from other countries, you’re removing their ability to produce, what’s its gonna, what is it going to do there, plus, we have big trade balances our trade deficits with China and with Mexico, which with Mexico, probably, you know, reduce once they he renegotiates, NAFTA, but you know, looking at, you know, the holders of treasuries, if we start to, you know, mess with China, they could just, you know, keep selling treasuries, and who knows what that’s going to do to the bond, you know, to the bond market. So there’s all these, you know, there’s all these derivatives of the actual initiative. And I’m just curious to see how that’s going to go into effect things.

Jason Hartman 24:38
It’s all very, very complicated. For sure. This is not simple stuff, by any means. And it even gets, you know, trade is complicated enough, but you want to start talking about foreign policy, in terms of, you know, war and peace, and that gets incredibly insanely complicated. But, you know, just to comment on your point, Pat, about giving to other countries. A lot of it becomes like, you know, you support someone, and then they become your enemy later. This was true with Osama bin Laden, it was true with Saddam Hussein. And it just, it just always seems to happen you all you need to do is wait 15 or 20 years, and then that same group that you support, it becomes your enemy, because they’ve got your technology, your arms, your money, you know, when and it’s just ridiculous. But speaking of giving, you know, and most people probably are going to totally miss this one. But Obama quietly sent 220 $1 million to the Palestinian Authority. Just hours before leaving office, that was a busy day and leaving office. Yeah, I

Pat Donohoe 25:42
saw that

Jason Hartman 25:43
there was a Business Insider article and, and believe me, Business Insider likes Obama and hates Trump, at least the way I read it, because they are extremely critical of Trump. And now I didn’t think they were very critical of Obama at all. So they’re, you know, seemingly very left leaning. But yeah, they said, you know, he’s, and, you know, you could call the Palestinian Authority, terrorist organization, you know, one man, but then again, you know, you can say one man’s terrorist is another man’s freedom fighter. And I totally get that. This is very complicated stuff. But it’s just important that people know, Obama sent a quarter of a billion dollars to the Palestinian Authority, just a couple hours before he, you know, walked out of the White House, it’s amazing,

Pat Donohoe 26:24
well, it’s gonna be very new, if you look just at the spectrum of how, you know, the presidencies have been running the country, it’s completely, it’s going to be completely opposite. And I, you know, from a Trump standpoint, I think that if, you know, people read his books, specifically, the art of the deal, they’ll see you in the evidence is all there as to why he says what he says, why he’s doing what he’s doing. And really, you know, the intention behind all of his actions. And that’s why, you know, I think that from a business standpoint, you know, he’s, he’s making the right call. But, you know, from my perspective, you know, this was a clean slate, you know, a blank canvas, it’s one thing, but, you know, he’s now dealing with eight years, two terms of policies that he really didn’t support any of, you know, he didn’t for any of those policies. So now he’s, you know, you have unwinding you have, it’s just, it’s gonna be fascinating to see how he deals with it. Because he understands business he understands getting the right people around him. And I think he’s do I think he’s doing that. Now. It’s, I don’t know, I now it’s looking at the result, what’s the result going to be? You know, what he’s instituting it’s gonna be, it’s gonna be a fascinating, fascinating couple years.

Jason Hartman 27:37
This, it’s hard for me to say I really support Trump in a lot of ways, but in some ways I do. But you know that he is such an oddball, he is such a wild card in terms of our history, that we really have to just wait the first hundred days, right to see what happens, because this is going to be unlike any other presidency. Let’s just hope we get the chance to see those first hundred days, because, you know, Madonna says she wants to blow up the white house now. I hope the Secret Service arrest her for that, because, you know, that’s illegal to threaten the President’s life. But these these are the tolerant people, right?

Pat Donohoe 28:14
Well, it’s interesting, Jason, and I, you know, a lot. So last night when I went home, you know, I have a 12 year old, you know, Hannah, but my 12 year old daughter, you know, she starts, you know, we have a very, you know, very detailed conversation about Trump, and, you know, Hannah, she goes to a Publix public school, but a lot of what the teachers are saying a lot of what the parents are saying is very anti Trump. And so we just had a very friend, I’ve had this on a lot of topics with her, but we had a frank conversation about why people feel that way about him now. There’s, there’s things I like about Trump, there’s things I don’t, I didn’t vote for him. I and so I look at you know, what I talked to her about it was more of how do you how do you analyze a situation? How do you analyze a person? And really, you know, everything was about just these kind of misnomers and these kind of false things that people look at Trump and, you know, come to a conclusion about and then emotionally react. And now you have these, you know, in insane protests and marches and gatherings where they don’t really know what they’re doing and why they’re doing it. That makes sense. And I love this theater. You know, your take on on that because there’s been this overwhelming animosity toward toward him.

Jason Hartman 29:24
Yeah, it’s, it’s really amazing. I mean, two of my friends who I had a few friends at the inauguration and also the march in Washington, and two of my friends sent me videos, where they walked up to people just turn on their camera and their smartphone walked up to people and videotaped asking them why they were there. And one guy they, you know, just by asking the question, he got this very hostile threatening response, like the crowd was going to just kill him. I mean, it was unbelievable to see that and then the other one, a couple of the people he went up to They didn’t know, they just said they wanted to be part of something basically, that was like the, the overriding theme of these people, they, they really just, you know, they were, they were there for women’s rights, but they didn’t know which rights or what Trump was doing to hurt women, or they couldn’t explain it at all, it was shocking. Now listen to in all fairness, some people did know why they were there, and they had a reason to be there. And, you know, whatever the reason was, they knew it. But a lot of people are just like, these lost souls looking for a cause, you know, a great point. It’s crazy. It really is. Well, Pat, just sum it all up. And let’s move on, you know, sum it all up with what what do you think is gonna happen with the economy, the real estate market? You know, any, any thoughts?

Pat Donohoe 30:43
Well, the crystal ball in front of me, you know, it just, I don’t have a crystal ball, but I look at you know, my thing is I, you know, I look at him from a business standpoint, and I know exactly what he’s trying to do. And, and really, I would say, it’s for a business person, that’s that the options are very limited. So what he’s doing, I think, right now are the right things, I just think he’s, he’s really creating some momentum up against a lot of resistance. And that resistance is, you know, $20 trillion of deficit, you know, even more of unfunded liabilities plus, you know, a half a half a trillion dollars of overspending per year. So you look at what he’s going up against. That’s what I’m curious to see, as you know, his isn’t going to make a difference where it’s going to actually get us back on the right track. And there’s just a lot of ground to make up. But I really do think that when people have more money in their pockets, they think differently, they’re more optimistic, they’re more positive. And so hopefully, you know, that that helps from a consumer sentiment standpoint, but really looking at how the other aspects of the economy are going to affect his initiatives. That’s where I it’s a it’s a, it could go so many different, so many different directions. But remember, Jason, he did say, in a few different audio blips during his campaign that, you know, he was open to, you know, not bankrupting or renegotiating debt or doing something like that, which I think is I think that’s interesting. And I don’t think he says, I don’t think Trump says things without, you know, really understanding the the intention behind it. So I think he has been thinking about what to do with the debts. I’m very curious to see how he, you know, how he deals with that when the, you know, when the when that comes due? So

Jason Hartman 32:33
it wouldn’t be Wouldn’t it be great if the country could just declare bankruptcy and have a whole reset and start over? Yeah, awesome. Well,

Pat Donohoe 32:41
I mean, I would say, Is there another way, I mean, you can you can print ourselves to oblivion, and, you know, keep fusing the Federal Reserve and that monetary policy to do but the other other is just renegotiate, renegotiate, and default, all right, which they’re going to call something different. But when that happens, I mean, it’s going to be that’s going to be an interesting, interesting series of events. But anyway, that’s, that’s kind of what I think is I think he’s on the right track, I think it’s going to be, you know, it’s going to be a good kind of stimulus or, you know, injection of adrenaline and then beginning and hopefully that carries, carries through.

Jason Hartman 33:15
Yeah, we shall see, we shall see, it’s going to be really fascinating to watch this. Well, Pat, tell our listeners a little bit about what you do, and especially how it could be used for real estate investing. I’m a client of yours, Gary Pinkerton, who’s in our venture Alliance. And you also joined our venture Alliance mastermind group recently, you know, it’s been really enlightening to learn from both of you about some really creative techniques that you can use to, you know, increase your your financial wealth, protect assets, and also, you know, especially use that in a real estate investor context.

Pat Donohoe 33:52
Well, so looking at what paradigm life life does, and we are, you know, we have about 4045 employees, 3030 advisors, and we do just financial consultations. And so we’re, we’re insurance based financial advisors, but looking at really one aspect of the business it is working with real estate investors and business owners. Now, we’re different because we, you know, we use insurance products, we don’t use Wall Street based products for financial planning, savings, preparing for retirement, etc. And the reason why you know, work so well with real estate is because you’re not choosing between doing our program and strategy and investing in real estate. So looking at what initially attracted me to the whole strategy in general was, at the time I had property, I had a couple rental properties and that is the that’s the direction I wanted to go as far as my finances were concerned. And I met a woman who has named her name’s Kim Butler, and she was one of the original rich debt advisors and she taught me Her strategy, she taught me how it worked, and why it’s different than the mainstream. And so today, you know, we, we just teach individuals how to use these products to improve their family to improve their business, and really just replace what they were using a 401k, or IRA or some sort of Wall Street based product, or strategy to to accomplish. But then for the business owner, and the real estate investor, really how it works is similar to how most executive executive retirement packages work. And that’s what’s fascinating is that you have these huge corporations, huge, huge bank executives, that you would think are set up for retirement through a 401k and market based investing. But they’re not most of their retirement packages are all set up through the exact products that we use that we use, but yet they’re paid for buy, you know, essentially their employees and Wall Street kind of creating this, you know, this idea of raising raising capital through stock and offerings, and then mutual funds, and then packaging those mutual funds around a 401k. And IRA, I mean, you have this whole kind of charade that helps fund these, you know, very rich, luxurious benefit packages of executives. So the more I’ve read and learned about that, the more we’ve incorporated those aspects into our strategy, so that, you know, the the mainstream person that is, you know, maybe low six figure income can take advantage of some of the same benefits, which, you know, in my opinion, are on par with any type of projection that a traditional financial planner gives you. But in the end, I mean, I’m, I, I’ve owned several of your properties, and I’ve had a number of others. My whole financial plan, for me personally, and for my family’s all business, are insurance products and real estate investments. So essentially, we’re just doing what I what I do when I learned, you know, from proven, you know, proven track records of the past, and, you know, today’s working out really well. But at the same time, you know, the market hitting all time highs doesn’t help us because it creates that euphoria, that feeling of euphoria on investors, but looking at kind of the, you know, the past and the history of market cycles. It’s, you know, once we do correct again, that’s when people will see the especially our clients will see the tremendous value that it has,

Jason Hartman 37:24
well, that’s the problem with the market hitting all time highs. And most people that are bummed out about that, you know, it’s already happened, and a lot of that’s priced into the market. And now you’re at a more dangerous point with more risk and more volatility, though, you know, when when that happens? So it’s, it’s, it’s that double edged sword, but when you mention that, it doesn’t help you. It’s because that’s, you know, money flows in there, because it’s like the, the the drunk guy who can’t get enough for the gambler who can’t get enough, right, that they just, you know, they just look at this speculative it’ll go on forever. You know, I remember that. It was like the, the the famous story about john D. Rockefeller, right before the Great Depression, he knew the market was overvalued. When his shoeshine boy was giving him stock tips, or something like that. I don’t know, I’m slightly mangled that story, but

Pat Donohoe 38:20
will tell people it’s how people view the world. I mean, you have you have those that view the world from a rational standpoint, and then from an emotional standpoint, I think, you know, looking at when it comes to, to money, it’s very short term. And when it’s growing and gaining, you know, that right there is such a, it’s a, it’s a very short, short lived part of a market cycle. That’s typically what people focus on. And so once it corrects, that’s when usually people will step back, and start to rationally analyze what they’re doing and why they’re doing it. And what happened. So right now, it’s like people are in that that kind of buzz of earning really good returns, and the market is at highs, their balances are growing. And that right there is, you know, most people do not make significant changes. At that level, the changes are typically made at the bottom. And that’s why, you know, you buy low, sell high, but everybody buys high and sells low. And that’s just the nature of the, you know, an educated emotional investor.

Jason Hartman 39:19
That is the way it always seems to work for the small investor, the institutional levels, you know, the institutional investors don’t necessarily have that, because to some extent, they control the markets, right. But they also have just better research and, you know, theoretically less emotional angle on investing. So, yeah, you know, most people get in at that really frothy stage when they’ve heard lots of stories for the past few years about people making fortunes. And then you know, the market corrects and they lose, and then they, they hold on down as that that slope goes down. I almost wish I could really show a graph to explain this. But a lot of our listeners have seen it. And as that, as that slope goes down, then they, they they keep holding on, they keep holding on and they think, oh, it’ll change, it’ll come back. And then they finally sell at a low point in the trough, because they just can’t hold on any longer. And they, you know, they need access to whatever capitals leftover. And the nice thing about income property, is that because it’s multi dimensional, you can keep adjusting your strategy. That’s one of the things we talked about it over the weekend. But can you share just as we wrap it up here, you know, any quick example that you want to give before you go on how this works, you know, maybe a little more mechanically.

Pat Donohoe 40:38
Sure. Yeah, and obviously, visuals always help here. But I but I think you said you’re gonna put some links in the, in the show notes, because we, you know, a lot of our education is free, it’s online, you can, you know, learn about it, without, you know, really any, any obligation, but, you know, from a mechanical standpoint, and I’ll look at it from a real estate perspective. So what I and I’ll just use me as an example. So, you know, each year, I have 2020 policies, just because you know, of how you fund them and some of the IRS restrictions, because there’s a tax benefit to having them. But as I do that, every single year, it typically is a function of my income, so a percentage of my income, and then I, you know, reserve a certain amount for, you know, rainy day for overhead for the business. And then the differential between what I have, and that reserve amount that goes into kind of my Opportunity Fund, and I hold them all inside of the equity of these insurance policies. So in the inside the insurance policies, the you know, the the money is private, it grows tax free, it’s not, it’s not correlated to the market. And then looking at the biggest benefit, my opinion is the fact that the insurance company gives you a line of credit against it. So what I do is, I essentially, you know, look for opportunities, and I’ve participated in a lot of syndications. Recently, I purchased some of your properties. So how that goes down is I’ll basically take a loan from one of these policies or across a couple of the policies, and I’ll go and acquire a piece of real estate or put money into an investment. And then as those investments pay out, as opposed to depositing that money in a bank account, I’ll take it and then I’ll pay back the the loan that I took out against it. So it helps kind of with the, you know, the, the expenses associated with with the return, so it helps my tax standpoint, but also the entire balance of whatever I put into this piece of property through that loan, that whole balance is still in my that equity or cash and earning a tax free tax free return. So essentially, my money is able to do two jobs at the same time. But in the mechanics of it all what helps me is it keeps me It keeps me disciplined, okay, keeps me disciplined to keep putting money aside every single year. And it also keeps me disciplined to make sure that I make the right investment, I do the proper due diligence, because if I take a loan, to acquire this investment, or acquire this property, hey, that loan, even if the property or the investment goes defunct, I’m still on the hook to pay back this this loan. So it helps me really assess the property differently. And then when I do receive any type of return, as opposed to, you know, buying a you know, going on vacation or buying a car or you’re doing something consumptive which I’m not saying is bad. But as it pertains to the actual investment, it keeps me disciplined to take those returns, and pay down this line of credit, which I can then take out again and use to acquire other investments. But again, it gives gives me some order and structure as to how I manage my finances. Does that make sense?

Jason Hartman 43:54
Yeah, yeah. And, you know, that’s an interesting thing you point out, it’s the very worst, and you know, it’s much better than this. But like, at the very least, at the very worst case scenario. The one thing that is really great about income property as an investment, and is you were comparing it to yours. It’s that’s also true with yours. It’s a forced savings program. Because it you know, it’s not really very easy to access the cash in your real estate, the equity in your real estate. I mean, you you can certainly refinance, during the crazy boom time before there was a bust. They were giving out ATM cards based on Home Equity, and I thought, oh my god, we’re definitely in a peak here. You know, when that kind of stuff happens, and that product made, by the way, still be out there, but it’s really just against a pre established home equity line. But you know, it’s in people don’t think of it as available capital, really, a lot of people don’t. So it’s nice because it’s sort of tucked away. And you know, that that is a good wholesome discipline, at the very least, and you know, there’s so many things that are so much better about it, but Just wanted to point that out. So I like that comparison. That’s good. Well, it helps.

Pat Donohoe 45:03
It’s like a it’s the irrational barrier, right? So it’s you, you have to actually do quite a bit and wait, which you know that time helps you rationalize the decision. And typically, you know, if you do have an immediacy of access, your irrational side of things could grab that without really thinking through it and make the wrong decision.

Jason Hartman 45:25
Right. Absolutely. And that’s what happens to all the stock traders and the gamblers and all of that stuff. So, good. Good point, Pat. give out your website.

Pat Donohoe 45:35
So no websites paradigm life.net pa ra di g m. Li fp.net. And on there, we have, you know, our learning portals which are free to access, so they’re pretty easy to find through through the website.

Jason Hartman 45:50
And just to make it a little easier, I’ll pronounce it. It’s peridinium parody, para para digan life dotnet. That’s not a.com. That’s a dotnet. So Pat, thank you for sharing that parodic them with us. And we’ll have you back on the show as things evolve in the economy and look forward to hearing more and I guess I will see you in Las Vegas in March at our next venture Alliance mastermind meeting. Oh gosh, there’s so much to do in Vegas. It’s really hard. We always do a couple fun activities. And on this one we are really struggling with, you know which one to pick. There’s so much to do here. So I look forward to seeing you in March. Okay. Now same with me, Jason.

Pat Donohoe 46:32
Thanks for having me on and I look forward to venture lines and March.

Jason Hartman 46:36
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