Discovering Opportunities Around You with Patrick Donohoe – Episode 225

This transcript was auto-generated and may contain errors.

[00:03] Welcome to the prosperity podcast fresh alternative personal finance talk for independent thinkers who prosper outside of Wall Street Here’s your hosts best-selling author Kim DH Butler and no BS money guy Todd Strobel Everybody welcome to the prosperity podcast. This is no BS money guy Todd Strobel. Once again, we have a special guest for you today We have Patrick Donahoe who is the president of paradigm life with us today and this is kind of a real treat because Patrick is one of these guys that can kind of see not only what’s happening today but an unbelievable ability to see what’s happening tomorrow and to position his company and his people in a way to take advantage of that and Anytime you get a chance to listen to somebody with that ability, you definitely want to take advantage of it. So welcome Patrick

[01:06] Hey Todd, it’s awesome. Awesome to be with you. Thanks for that introduction Super well Patrick the one thing that we really wanted to talk about is kind of Where you see the economy at? now You know a lot of people are saying we’re overdue for You know a correction and a lot of people saying that there’ll be no more Corrections, and I’m not sure what Donald Trump says but What’s your take on is, you know, you’re out there working and you know trying to save and Trying to do the best with what money you have. What would you say to those people? Well, I mean, yeah, those are a couple of questions. Let me see if I can get them all Well, the first thing I would say is When somebody is analyzing the economy

[02:03] Seldom are they objectively analyzing it they kind of have like this, you know ulterior motive as far as they’re you know they’re what they’re saying about it and Whether it’s you know for their business or whether it’s to look good I would I would how I look at it is I try to To kind of step back and use the whole Kiyosaki three edges of a coin or three sides of coin. You have you know heads tails and the edge so the the heads is is one opinion the tails is an opposing opinion and And then the edge is really kind of where where you see things based on, you know that analysis But in the end, it’s like it’s I don’t think it’s possible to be objective I think you can have a lack of ulterior motive

[02:48] But as I look at the you know, the economy you’re right There are there are a lot of people that have been you know, speculating on You know the market is overdue The the Warren Buffett, you know market cap to GDP is like almost as high as it’s ever been You have P ratios that don’t make sense You have tons of corporate buyback, you know buying back their own stock to keep the prices high You have high debt levels you have You know lackluster growth. So it’s one of those things where you have a lot of different signs and I don’t know Todd It’s one of those like look at look at Japan. Look at how long Japan has gone on with insanely low interest rates You know not very good growth And not to say that they’re in a good situation. I think there are some things that like totally scare me

[03:39] But at the same time it’s like you have this X factor Which is like the you know human ingenuity to solve problems and who knows what? You know who knows what’s being worked on behind the scenes that could you know, essentially solve some of the the calamities that May have maybe were the case a couple years ago But you know, they may be solved by you know, some genius invention. I don’t know. So it’s it’s interesting I have a few other opinions too, but you know, that’s kind of like my initial reaction to your question We agree. I think that you know, we see technology shifts much faster than we used to and you know Defining the economy by the old rules is kind of frightening But first of all frightened people tend to do nothing and I think that’s probably maybe one of the worst things

[04:28] Yeah, I mean That’s the last thing I would do Todd is not do anything, right? I would definitely keep up on you know, what is going on how to be prepared? I mean that was one of those when I got my you know, my hiney handed to me in in 2008 and 2009 It was one of those things where I said, you know, I’m not gonna let that happen again Like I’m I want to see I want to understand what’s going on So I know what the probable outcomes will be so I can protect myself my family Uh and and clients and that’s what I always try to do is I I try to look at what people are saying Read between the lines. Um, you know come up with Some relevant points that they may be making but I also try to find the opposite opinion, right?

[05:11] I don’t think people do that enough just because they like to you know, people like to be in groups They like to be in camps They like to be republicans or democrats or libertarians or and it’s one of those things where you know And you said something about donald trump. I mean, yeah people hate donald trump and I would say, you know, they probably don’t Don’t value anything. He says i’m like listen if he says something smart or said something that’s intuitive I don’t give a crap about the rest of the stuff, right? That’s kind of an extreme but it’s one of those you need to be able to look at things You know objectively without this kind of emotional These emotional glasses that you know tend to taint

[05:45] Where people are at and that’s that’s kind of how I try to look at the world and let them edit it Okay, well we’ve got these talking heads on tv that tend to talk about stocks They tend to talk about bonds and they tend to talk about cash and There just doesn’t seem to be Any alternative ever mentioned and my question to you is From what I know of your practice. There are other alternatives aren’t there? Yeah, but but yet again you have to go to the intention right as to like who’s spot, you know Who’s paying those guys salaries, right? It’s like, you know, they they need advertisers who advertises like suddenly if they were, you know talking about alternative investments And they were talking about insurance they were talking about, you know other things

[06:33] They lose their sponsors, right? So they need to kind of keep up that narrative In order to you know retain their advertisers, right? So it’s one of those plus all those companies are public Right, and they all need, you know mutual fund managers to buy their stock, right? So again, it’s a very it’s a very interesting economy when it comes to media Because there’s there is that bias, right? So that’s where you have to look at that opinion not to you know Discount it but you have to look at you know where it comes from and then find an alternative But yeah, of course, there’s lots of there’s lots of alternatives and what’s amazing is that you know, we live in this New economy where there’s innovation after innovation after innovation

[07:12] And I know, you know a lot of tech tech guys And like they’re they’ve cleaned up with angel investing not to say you you should go and invest in like, you know Startups i’m not saying that i’m just saying that you know, there’s all sorts of technology alternative investments ways in which you can do Way better than the market And not have to be in that very antiquated in my opinion antiquated type of financial strategy Let’s say you’re one of these millennials and you’re starting out again What resources would you recommend or what would you recommend that you read or where would you recommend that you go? to get more Of a broader perspective that’s more information and less marketing So I would kind of since the beginning of this show

[08:04] It’s one of those I mean go look at the talking heads listen to them. So, you know that perspective But you find out what the other edge of the coin is I I mean this may be an extreme But I you know, I I look at uh, you know guys to follow on on twitter Whether it’s you know, your peter shifts or or jim rickards or doug casey or not to say that what they’re saying is wrong Or bill bonner, but it’s to find out the other other side of it and you know, sometimes I well more often than not i’m on zero hedge because zero hedge Is one of those pretty amazing blogs that you know, nobody really knows who started it Uh, and but but it’s one of those the the guest people that post on there and some of the stuff that they talk

[08:49] About is is definitely it’s like the drudge report of of media or news, right? Zero hedge is kind of that, you know as objective as possible analysis of Just the traditional mainstream financial opinion. So that’s that’s something I listen to but I I mean I try to follow those That you know are contrarian Not to do what they say but to just see how they view the world rich dad You know the kiyosaki’s podcast is really good Right, and I don’t want to you know to detract from listenership of yours But it’s one of those like rich the rich sad radio. It’s really uh, it’s really good He does have kiyosaki has a lot of millennial millennial followers, but I’d also like you know, I I You know find millennials that have like figured it out, right?

[09:35] There’s so many like even z generation and millennials that you know have not graduated college have You know pursued tech and pursued uh careers in and are making Way more than they ever would At you know the traditional like nine to five corporate america job So I would just if I was a millennial honestly, I would just be like wow. I grew up in a totally different environment And then then what’s being run by the current demographic like think about it the whole like right now A huge part of the world is being run by Baby boomers 55 to 70 years old It’s very difficult to you know to sway and change somebody Uh that is older like that. It’s just the nature of human beings like having habit I would realize that first and then just ask yourself the question

[10:25] Wow, what am I buying into from a rhetoric standpoint? It was created by a generation that is definitely Behind the times does that make sense? Well, I think it makes sense and they also have their own motivation In that they want to take care of that same age group that they’re in And that’s a huge percent financial responsibility that Unfortunately has to be paid for by the people who are still working Yeah, and that’s man. Well another thing too is I mean, I think there’s going to be this like huge like revolution when the millennials and z generation See the amount of debt and amount of crap that the you know, the baby boomer generation is leaving for them Whether it’s government debt whether it’s what the politicians are doing. It’s insane and I don’t I don’t I think they’re oblivious to it

[11:19] But they’re the ones that are going to be fitting that fitting that bill, you know, and I would say you know if you can reason if you can research that you will you will discover a lot of opportunities because typically the opportunity comes when there’s disruption and I think we’re in the midst of Way more disruption that then we can even fathom. Um, and so that’s where I would that’s where I would start But yeah, I think millennials have a huge a huge opportunity But it’s gonna be by doing things different than they’ve been done I mean, I think that’s like that should be their motto, you know Well, I think that You know overall the cynicism is out there. They’re not satisfied with what they’ve seen happen so far

[12:05] So I think that’s the first step Um, i’m just curious. I mean who’s going to be the first person who refuses to turn the key on to the printing press for money Well, it’s on you know, and i’m not sure how much more they can do right just because of where we’re at as a as an economy and the amount of Debt that’s out there how low interest rates are I mean it’s gonna there’s not much more they can they can flood And that’s where I know I think millennials are are waking up to an extent Um, I was hoping that you know the the ron paul Gravitation would have continued past his presidency run several years ago. I think rand paul has kind of helped But yeah, I think too many young people are frustrated with what’s going on

[12:52] And they don’t know really the cause of it And i’m not sure what it’s going to take for them to to see it But I would say you know plugging into non-mainstream news outlets non-mainstream opinion Is going to give you that other side of the coin so that you can you know sit on the edge And really see what’s what’s fact and what’s fiction. I think every generation Lovingly wants to give advice to the next generation and they want the next generation to do better than what they did but the find a job Work for 30 years max out your 401k and retire advice What do you think of that? Well, I know, you know my opinion because we know we know each other but I mean, I think that’s It may have worked at at a time but

[13:42] Again, you look at who that benefits It’s clear why that you know propaganda and why that narrative is so popular But I think it is, you know, the worst advice. I think that’s the worst advice period I think that’s it’s really good advice if you want to live a miserable life So if that’s what you want to strive for then, you know, that’s the path you want to take Give us some ideas of Alternatives that you know, hey, i’ve got a job. I’ve got some extra money First of all, I should have some extra money instead of debt Which is I think the millennials are starting to figure out Where do I put that money so that it can outpace inflation with this low interest rate environment? Well, I would I would start like one step behind that question and that step is

[14:33] You know the the true investment and the true asset is is yourself right and you don’t want to ever You know think that anything is is more important than that what I mean by that is You know if you can figure out how to be valuable to somebody else. That’s where money comes from And right now the opportunity that exists to do that Is is limitless literally there’s so there’s trillions of dollars in circulate circulation worldwide and It’s one of those things where you know, you can use your background in technology You can use your background in marketing Even though you may not know marketing you experience it daily and it’s not very difficult to pick up I would say first like finding something that you love

[15:19] And then figuring out your role and whatever business that looks like and it may have to be another business for for now But I would I would really try to find out like what you love doing not what you have to do to pay your bills that’s where I would start and I think that’s really the You know the the signal associated with discovering where your true genius and asset is And you’ll make more money than any investment could ever give you that’s where you start The second thing after that is is more of finding a place that you’re not going to lose money That’s where that’s where you start and there’s proven things It’s not in the you know traditional wall street thing by putting money into betterment or putting money into

[15:58] You know acorns or some robo, whatever I think that’s been sold because it’s convenient as like an investment But that’s just a more convenient way to do what your grandparents did and what your parents are doing That’s not going to work find assets that you know have performed over time and are agnostic to market cycles So insurance is obviously what what we do So that’s that’s really where the foundation is and then in addition to that it’s finding investment in things that you can control But I would say the first thing is like, you know, just coming to grips that you are your best asset You can go out and use that asset and make money tomorrow, right and make a lot of it an investment cannot replace that

[16:40] and discover that Improve on it then take a percentage of what you make And and set it aside into something that’s not going to lose but something that will accumulate it’ll gain over time And then you know the investment side of things my big thing is like i’m agnostic to investments even stock stuff Like I have a good really good friend of mine Andy tanner And like I love what he does and that’s that’s where his that’s where his money is because he understands it That’s his expertise. That’s his education is is trading and understanding markets and and that’s fine If that’s what you want to do do it But from a passive standpoint if that’s not your genius if it’s not where you want to invest your biggest asset

[17:19] Which is you then you know, that’s not where you put money initially So I would say yeah, that’s kind of the the order or the hierarchy is yourself first Uh, then you know things that are proven that you can’t lose Uh, and then after that it’s you know in investments that uh, really you understand and have control over I love the way you talk about finding something that you really enjoy doing because this is another topic. That’s very popular Um on our show and that’s the concept of retirement doesn’t work Yeah, we’re not meant like human beings like the idea of retirement I can see why it’s appealing Because people hate what they do for a living and they hate going to an office They hate commuting they hate not seeing their family

[18:06] They hate being told that they’re an idiot by their boss They hate like the the you know, the the the meeting and the meetup and your quarterly objectives and I mean I can see why they want to retire Right, I but the thing is it’s like if you find something it’s that it’s cliche by now Right, but if you find something that you love you’re gonna do that all the time in indefinitely So that’s where I would say. Yeah, it’s one of those It’s a it’s a focus standpoint. That’s where you know, todd this is kind of being somewhat vulnerable Uh, like probably about a year ago Um, I I started to read some books a different way And it really discovered something that I did not want in in my business And it was something simon cynic said he he wrote

[18:52] Uh, you know start with why? Find your why leaders eat last and there’s he’s he’s an amazing guy Anyway, he said something that was profound. He said that you know, really there’s there’s a lot of juvenile delinquency these days whether it’s Drug abuse whether it’s suicide whether it’s um, you know Having children, you know in your teenage year, you know early teenage years. It’s like there’s there’s a lot of that right now and Like high levels of depression add, you know highly medicated kids and and he basically said most people will say oh it’s the parents or it’s the it’s social media or it’s Um, you know, it’s it’s media right or it’s their friends or it’s the culture Whatever is shaping that he basically said no it is the parents

[19:41] But it’s not because of what you think it’s because parents are treated like cattle They’re treated like they’re on you know, a train car during then maybe not that extreme But it’s one of those things where they’re treated so poorly. They’re degraded They’re treated like you know a nothing and then that happens over and over and over at the workplace every day Then you expect them to go home and be like a mentor and inspirational to their kids like give me a break so that’s what he said and I was like, holy cow like I I don’t want that at all Like I don’t want anybody having to experience that and feel like that when they go home and face their family And there’s a lot of stuff i’ve done here

[20:22] Uh to reshape the culture So that’s one thing I would say is like if you find something that you love Go find somewhere that has an amazing culture a business has amazing culture that values you if you yell that I would not deal with that for one day So find a business that has an amazing environment and culture and you’re seeing a lot more of that these days That is uh, some incredible words of advice one more time just for our listeners Can you give the name of the author in the book? I don’t remember so simon cynic. So s-i-n-e-k Uh simon like simon says I I don’t know What it may have been a podcast interview and maybe it may have been a video. I can’t remember Todd but there’s like like that guy is awesome. Just go watch his videos. It’s pretty it’s pretty amazing

[21:11] He’s pretty amazing. I certainly encourage our listeners to do that. I know I certainly will um Let’s flip back to the traditional I guess corporate america again and Savings is important But yet, I know you’re not a fan of the 401k. So why don’t you kind of differentiate the two? Well, it’s not you know, it’s it’s kind of like I don’t know if your only experience is like a uh Like a ford fiesta and you’re gonna and you based your opinion on ford As like oh the ford fiesta sucked so all ford cars suck Right. It’s one of those things where the 401k I mean, I know like we say we say it all the time But I I try to catch myself. It’s not the 401k right, it’s Essentially what it does for you and in my opinion it it does more for the financial advisor and more for the government

[22:10] Than it does for you So it’s more of like what it does for you sucks not it, you know the 401k You know wasn’t born from like the devil right the 401k is just it is what it is It’s why it was set up what it does for the government what it does for the financial services industry and what it does for you It’s at an imbalance And that that’s where I look at, you know how you should look at a 401k or any any qualified plan Right. It’s like and and andy tanner the guy just mentioned like he wrote a book called 401 chaos Um, and uh, and it’s awesome, right and i’ve um I’ve met ted benna. I’ve had a couple really awesome conversations with him. He’s the one that Designed the first like retirement plan around the four around the 401k

[22:58] Which is a section of the tax code and it’s not what he intended, right? And it’s it was no it wasn’t even supposed to be even remotely close to that But yet it became this like amazing vehicle Uh for corporations for retention purposes, uh, it also became an amazing vehicle for financial advisors, um as well as the government so Super why no one of the the biggest problems is is that you really can’t access the money until you’re 59 and a half So the next question our listeners always have is what’s an alternative? Well, I would say again going back to that the hierarchy that I talked about before. I mean, honestly, it’s like if not to say that i’m advocating this but I would I would argue you can cancel your 401k and liquidate it and pay all sorts of penalties invest in yourself

[23:49] And you’ll make a heck of a lot more than those penalties and what the return is that you that you made on it I’m not saying that that’s what you should do. I’m just saying that You know, yeah, it’s one of those See the downside of that and then look for alternative and educate yourself about the alternatives and there’s a lot of them Right and you have you know, you have insurance as a really amazing vehicle when it’s done the right way uh, you also have alternative investments, uh, but again, I would say it needs to be a vehicle where you have the control to Uh to invest in yourself and maximize maximize you because I did this analysis a few years ago that looked at like if a person Figured out a way to educate themselves to get a 10 percent raise every single year

[24:33] Right instead of the like, you know the the typical three percent keeping up with inflation Right that 10 comes from doing more being more being more valuable creating more value Uh educating yourself and getting another position or whatever they would do that Like that would outperform any investment like you have so much more control over that So wherever you do put that money besides a 401k make sure it you have control over it to invest in you Um, and and you know also all alternative investments That is just some extreme wisdom, that’s awesome. Um, let’s fast forward just a little bit And so many of our clients that come in are say in their 50s They aren’t properly positioned for retirement

[25:20] And they need to somehow or another catch up. Do you have advice for them? Yeah, well i kim butler, I mean obviously this is she’s on the podcast You know, she she uh, she recommended a book to me years ago called boomer reinvention I think you guys have talked about that before Uh, but I would I would say for those that are not prepared like don’t try to invest and be prepared Right. I would say just come to grips that you’re not prepared and then if you’re 50 It’s like you can live to 120 130 years old. I would say You know just go into the profession and why do you want to retire? What don’t you like about your situation? But then more importantly ask what do you like? Like what do you love doing?

[26:03] and You know, I had a uh, a cool conversation with a guy earlier this year and he was this chemist um at um Clorox super cool guy. He wasn’t the stereotypical chemist Like he had like a mohawk and believe it was bleached and you know He was just really smart and he worked there and he did all sorts of other cool stuff He’s like, yeah, I just I don’t want to do that anymore. And like we just came up with the plan We’re like, okay. Well, tell me about like the consulting world in in that industry Oh, he’s like, oh, yeah, we pay some of those consultants like more than I get paid and i’m like Okay, so like why wouldn’t you do that? That Is one of those things where people I don’t know It’s like they’re just not wired to think that way figure out a way to do it outside of the business that you’re in

[26:51] Whether it’s consulting Um, whether it’s being on a board uh And start to look for opportunities there and they’re honestly Todd like they’re everywhere And that’s where I I think a big part of the future and you know, don’t hold me to this obviously But I really think in the next like 10 years There will be this like transformation of people with the ability to work Remotely work wherever they want, right? As long as they have an interconnect internet connection They have a computer they have you know video capability I think that the ability to actually do like virtual work Like is going to be so abundant and it’s going to make things so much more efficient For companies, right improve profitability

[27:34] Um improved lifestyle the employees like it’s gonna I think it’s going that direction That’s just that’s just neat. It happens right now like there are positions everywhere Just go look for them And and that’s what I would say to the 50 year old that doesn’t think that they’re prepared is like, okay Discover something that you can can do Um, that’s valuable that you love doing and that’s that’s where I would start super You missed your old joke where you said the guy that worked for Clorox and had bleached hair So I had to remind you that He’s just a super cool guy and you know, we we figure out a way for him to uh work, uh, 10 hours a week And he hasn’t done it, right? But we figured out a way he could make more money than he’s making right now working 10 hours a week

[28:17] That’s simply awesome So much of our time is spent with people who have managed to accumulate money And now they’re worried about trying to get it to the next generation. What’s your advice to them? Um Oh man, I have I have some I have pretty strong opinion about about that that May be somewhat conflicting But here’s here’s where where i’m at I would say if you have money and you know that you’re going to uh pass it on number one like there’s an efficient way to do it and You need to have but you have to have that set up most people don’t set that up And it ends up like ruining families I know a number of cases like more than I wish I knew about where families have been just completely ruined

[29:09] Because of the poor preparation on part of the parents Right, and uh, and it’s one of those there’s an efficient way to do it and there’s an inefficient way to do it But then the second part of it is like I mean this may sound really bad, but your kids didn’t earn the money um, and you did and if they You know if they have that mindset they’re like waiting for the inheritance or waiting for money Then I think that’s a bad sign and I would say that you know You you want your money to improve the world you want to leave your legacy I think everyone is like hardwired to do that. Um, I think your money can empower people Um, if you if you pass it on a certain way And I think that’s where you want to empower people you want to improve their lives

[29:54] Not make it worse I think the worst thing you can give somebody is a handout give them money that they don’t earn And you know, this is a philosophy. I practice with my kids, right? I don’t you know, we Do nice things with the kids, but if they want stuff I never say no Right. I say, okay Yeah, of course and they you know, we’ve set up kind of like an intra-family banking system And they have to borrow and they have to figure out a way to make payments And I repossessed lots of ipads I repossessed bikes and there’s tears But in the end it’s like if you just give stuff to your kids huge disservice like my kids are you know, I Should be 13 in a couple weeks Um, and then 11 year old they don’t have phones

[30:39] Yeah, I don’t let them I mean it’s one of those like i’m like, okay figure out a way to like be productive with your phone Right and yeah, let’s talk about it But right now there’s no need. So anyway, I I have all sorts of opinions They’re todd and some of them are very kind of atypical But I would say that you know The worst thing you can do with your kids is give them stuff best thing that you can do is give them wisdom But give them stuff give them things Right, and i’m not saying that i’m like the epitome of of a of a good parent like I have wade Like there’s so many better parents that I know than than me and I try to you know Just always try to you know, catch myself and be an amazing example to my kids

[31:17] That’s one thing that i’m adamant about is that I want to teach them I want to have them be really understanding of who they are and how they can discover ways in which they can improve not just their life but improve others lives because oddly enough If you are driven by improving other people’s lives Your life is going to be improved better than any other motivation I try to like instill values in in uh, my family my wife is You know, she grew up in in mexico in a cinder block home with a dirt floor, right? So she has very strong like she wants her kids to You know, obviously not go through a lot of the stuff that she went through But she wants them to you know, really be contributing citizens contributing people

[32:04] as opposed to you know, uh An entitled, you know and and which is kind of becoming in a sense, uh, very common, right? So that’s kind of where yeah, I would say the next generation think about that It’s you want to empower people you want to leave a legacy You don’t want to propagate or perpetuate poverty more mindset poverty than anything else which is giving money to people that didn’t earn it Well patrick, you certainly have shared an incredible amount of wisdom with our listeners today Could you maybe give us a website or some place that our listeners could go through to find out more information? Yeah, my website is uh param life.net. I do a podcast to uh, the well standard uh, you can find facebook find me linkedin like I try to be

[32:49] Somewhat active there. I could do I could do a better job But um, but yeah, yeah, just just follow me wherever I I sometimes will write stuff on Uh, you know social media so uh, and then also yeah are the podcast is kind of where I really do my venting sessions Uh, patrick donahoe. Thank you so very much. This is no bs money guy cod strobel for the prosperity podcast Uh, thanks again to all of our listeners and wow, this is one of the best interviews I think we’ve ever done. Thanks again patrick. Hey my pleasure Thank you for listening to the prosperity podcast to take control of your money and have it work for you Visit us at partners for prosperity.com If you liked this episode, make sure you subscribe and leave a review