Pat Donohoe on Disrupting Real Estate with Autonomous Cars & Flying Cars

Pat Donohoe on Disrupting Real Estate with Autonomous Cars & Flying Cars

On this Flash Back Friday episode, Jason Hartman hosts returning guest Pat Donohoe, CEO of Paradigm Life and host of the Wealth Standard podcast. They discuss a recent Wall Street Journal article about lower mortgage rates and its impact on a booming real estate market. They go into shared economy, self-driving cars, and flying cars. They connect this with a resurgence of the suburban real estate market and how the middle-upper class is looking at retirement.

Jason Hartman 0:00
Welcome to this week’s edition of flashback Friday, your opportunity to get some good review by listening to episodes from the past that Jason is hand picked to help you today in the present, and propel you into the future. Enjoy.

Announcer 0:15
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. Here’s your host Jason Hartman with the complete solution for real estate investors.

Jason Hartman 1:05
Welcome to the creating wealth Show Episode Number 825. eight to five. Thank you so much for joining me today. I’ve got one of our venture Alliance members, one of our clients and a friend who’s been on the show before as a returning guests doing this episode with me and that is Mr. Patrick Donahoe. Pat, welcome. How are you? I’m awesome. Jason, how are you doing? Good, good. And you are coming to us from Salt Lake City, Utah, where we actually did an event. Gosh, that was about a year ago now. Right?

Pat Donohoe 1:33
Yeah, it’s been about that. Leave

Jason Hartman 1:36
Yeah, we did. You live there right down right down the street from your office actually not very far. So path. There’s a lot of stuff going on out there in the investment markets and you’re deep into this every day with your, your real estate and your clients with your firm. You know, buying the financial products that you help them get into. I just thought we’d start this episode by playing a little Wall Street Journal clip about interest rates. And really just sort of highlighting the overall inventory challenge and, and how overheated the housing market is right now. So you want to do that first let’s do it now. All right, let’s jump in here is my high tech playback where I literally hold my iPhone to the microphone. You ready for this, folks? We This is a very homespun show, you know, so here we go.

Pat Donohoe 2:25
I concur healthy market by lorica. Cisco. mortgage rates dropped below 4% for the first time since November providing more kindling when already hot housing market has a crucial spring selling season gets underway. The average rate on a 30 year fixed rate mortgage dropped to 3.97% of the week ended April 20. From 4.08% a week earlier and 4.3% in mid March. According to a released Thursday by mortgage company Freddie Mac, the draft could help encourage buyers who had been put off by rising mortgage rates to dive into the markets and prompt others to rush to buy.

Jason Hartman 2:50
Like how I’m playing that at 1.5 times speed by the way. Can you all keep up with that? I played

Pat Donohoe 2:56
back faster on this before right right again, we are in the spring and people looking to buy homes settlin keeper deputy chief economist at Freddie Mac. These low rates are really going to help out with affordability for most of 2016 mortgage rates, which generally move together with a yield on the benchmark 10 year US Treasury note hovering just above 3.5%. For the 30 year fixed rate mortgage after November election optimism that the US economy will get a boost from Republican plans for attacks overall, increased infrastructure spending and reduce regulations helps drive interest rates sharply higher as investors bet on faster growth, but the tide is turning. Treasury yields which move in the opposite direction of prices approached a five month low last week, as many investors worried that turmoil in Syria and North Korea as well as election uncertainty in France and the lack of progress on tax and spending policy under President Donald Trump would lead to slower economic growth in the months ahead. Almost the entirety of the Trump bump the mortgage rates have been washed away. So he’s a vice president at hsh calm a mortgage information website that in turn could spur the housing market. Economists said a decline in mortgage rates can reduce monthly because the housing

Jason Hartman 3:46
market needs to be spurred

Pat Donohoe 3:49
God,

Jason Hartman 3:50
like I can’t remember a market this hot in recent history. I mean, I don’t know. Maybe Pat, do you think the market is hotter now than It was in 2004 I don’t I was pretty crazy back then.

Pat Donohoe 4:04
Well, yeah, I mean, I you look at it was it was that then and you know leading into 2006 2007 two and I would say that right now depends on the area but I would say that it’s still it’s still hot and I mean I don’t know if interest rates are what’s going to really create that demand but I just think looking at whether it’s the the millennial generation, or people relocating I mean there’s a lot of reasons that you can point to as far as the the increase in demand but I still think from what I’m seeing it’s it’s still hot and a lot of areas. Oh, still hot

Jason Hartman 4:41
is like an understatement if he asked me, I think it’s nuts. You know, I’ll give you an example. One of our celebrity clients, we have a few celebrity clients, folks, I will let him remain nameless, but he’s a famous musician. He is looking around for properties in in Los Angeles, you know, for for he and his family. And he sent me this property the other day. I couldn’t believe it. It was a link to a Zillow listing, and I’ll just share how absolutely ridiculous this is. Okay, so this property is it’s this property, they bought it. He did the research, he’s he’s really sharp and he’s really, you know, he listens to our podcast. So you know, he’s got to be super smart. And this property was purchased for $700,000 in 1998. Now, granted, it may have had certainly had some improvements, but it’s it’s just under 2800 square feet, and it’s in Pacific Palisades in Los Angeles. You know, it’s it’s got like, you know, an ocean view, but it’s not right on you know, it’s not like dead on the ocean or anything like that. Okay. four bedrooms, five baths, but get remember, it’s just under 2800 square feet. It’s not giant, okay. And the property is for sale for nine Point $5 million Are you freaking kidding me? And you know, he told me that this is not a super desirable area or anything. And you know, the property’s nice and they did a good job with a with a remodel, but give me a break 10 million bucks. Now what’s interesting about this is the zestimate. You know how Zillow does these estimates that are, by the way all over the board, folks, I just want to tell you, you cannot trust Zillow. Okay, get over it. Zillow is famously inaccurate in a lot of ways.

Pat Donohoe 6:39
But,

Jason Hartman 6:40
but I still like Zillow, because Zillow is better than what we had before. What did we have before Zillow? Well, nothing. So you know, Zillow is quite handy, okay? But do not take Zillow is valuation. Pop, positive, negative, good, bad, higher, lower as the gospel. You cannot Do that. But what’s interesting is and here’s a great example of that. The Zillow zestimate, when I looked at this listing a couple of days ago, when he sent it to me, was, I think $3.2 million or something. Now, this estimate was changed to $11,152,000. So the zestimate radically changed in a matter of three days, two days. And look at this, the estimate. This is so funny to look at this, the estimated mortgage on this $9.5 million property $35,000 a month.

Pat Donohoe 7:40
God,

Jason Hartman 7:42
now you could rent this property for probably, you know, I don’t know $30,000 a month, and people would say, Well, if I rented that I’d be throwing my money away. I don’t know. I think you’d be throwing your money away by buying it especially if there’s a downturn because This is just this market is just built on. It’s just ridiculous. It’s just built on spec. I mean, you know, like, if you saw this house, it’s an it’s a no big deal house. It’s not a mansion. It’s, you know, it’s a nice looking, postmodern kind of 50s style house. But, you know, it’s not a mansion, okay? And for 10 million bucks, I would hope you’d get a mansion. I wrote them back and said, Hey, I give them 2 million for it.

Pat Donohoe 8:27
I just think that’s California in general that I think there’s also some isolated locations that have similar issues. And I think that you have high income earners that are moving into different areas, you know, California being one of them. Silicon Valley, there’s actually a lot here in Utah too. But there’s other kind of centralized locations where you have a lot of high income earners mainly in the tech space that you know, they have that money to more or less throw throw away so i i doubt their nickel and dime, you know, an interest rate or the monthly the monthly rent at 30,000 or 30. 5000 a month, I think that there’s such a big difference for, you know, maybe the normal person, but for those that actually can pay those amounts. I think it’s a marginal marginal difference. Do you think? Same thing or what?

Jason Hartman 9:12
Well, yeah, I agree with you, you know, when you’ve got a billion dollars, who cares about 10 million, right? It’s no big deal. Or if you’ve got even 100 million, that’s only a 10th of your wealth, but just understand that this house, I mean, you’ve got it. I mean, how could anyone argue that we’re not in a bubble? Okay, when this house is basically 30 $500 per square foot 3500 bucks per square foot? Are you kidding me? I mean, look, you could you could live in Las Vegas and like, you know, I am tempted honestly, to just buy a mansion right and you know it on one hand, I want to I’ve owned big houses before they’re like a burden. You know, they’re it’s takes a lot to manage a big house. Remember, you’re listening to flashback Friday. Our new episodes are published every Monday and Wednesday. And you know, I’m a big promoter of renting the home in which you live rent a high end home and own lot of rental properties you rent to other people. But I mean, I’m looking at like one place that I’m vaguely interested, okay, I’m not like our serious buyer, but I just have to tell you, I do get tempted just like all of the rest of you listening. Okay, and this house is is $2.3 million. It’s innosight at 600 square feet. So how much is that? I think that was 272 per foot or something. I can’t remember I did it. Initially. Pat, you have a calculator handy here.

Pat Donohoe 10:41
Yeah,

Jason Hartman 10:41
well, this was a listen to scam 2.3 million now. I’ll get it faster than you. I’m doing it already. At 600 square feet. That is Yeah, $267 per square foot. So that’s literally like, you know less than a 10th of the price of the place in LA. You could buy yourself a private jet. Buy and own a private jet. Okay? Now granted, you’d have to run it if you have to commute to LA and pay for all the operating costs. But I don’t know, man, that’s just crazy. I mean, that’s just crazy. And this is how I

Pat Donohoe 11:15
how I look at I mean, those are those are typically prices that are driven more by the supply and demand of primary residences, not necessarily rentals. And I’m not again, I’m not familiar with California markets, but you look at what’s for rent or what’s for sale in San Francisco. Right. And those are just the prices that I just don’t really sympathize with. And but I would say at the same time, these are people looking to live kind of in an exclusive area, as opposed to, you know, by buying for a different a different reason, right. So I think that, you know, maybe you know, this morning, you’re the real estate expert, but what’s, you know, what’s really the difference between kind of the supply and demand of primary residence areas and the supply and demand of more kind of rental median home price areas?

Jason Hartman 11:58
Well, yeah, that’s an interest Question. I mean, they’re the supply and demand is pretty tough in in the, you know, just regular hundred hundred and 20 hundred and $40,000 rental property market to, as everybody knows, I’ve been talking on the show about how we were just struggling to get more inventory of properties. And again, if we wanted to sell our souls and just take and recommend crappy properties to our clients, yeah, that would we’d make a lot of money for a few years doing that, but I, you know, unfortunately or fortunately, maybe it is fortunate actually, you only have one reputation in life. And it lasts for many decades, if not forever. So you really can’t sell your soul. It’s not a very good equation, you know, regardless of the morality of it, but just from a business perspective, it’s, you know, not a good idea, right? You know, how long can the bubble go on? I don’t know. But you know, we are way out of whack with fundamentals when people are paying 30 $500 a square foot for a house and one other thing, I just Gotta mention, you know, remember if you live in the Socialist Republic of California, and you can afford that home, you are paying 13.3% state tax in Nevada, a 45 minute ride away in your private jet, your pants zero state income tax. Okay. So that’s pretty significant also, and not to mention everything else. But hey, yeah, interesting side note there, Pat. Let’s go back and hear a little bit more about what’s going on with the interest rates here. Okay,

Pat Donohoe 13:29
bridge payments for allow buyers to purchase more expensive homes than the other ones before. It kind of said a surge of additional buyers this spring wouldn’t be entirely welcome. It’s driving more demand into a market that doesn’t have much in the way of supplying

Jason Hartman 13:39
us home prices. Rose 5.9% in the 12 months ended in January, the fastest rate since mid 2014. According to the s&p corelogic Case Shiller indices, which by the way, Pat, as you all know, has so many flaws because only profiles, the 20 markets and you know 1415 of those depending on how you look at it our markets I wouldn’t touch you know, they’re too they’re too cyclical. So yeah. Shiller is not a very good perspective. But again, it’s one of those other things. We’ve got 400 markets in the US, and they’re profiling only 20 and calling that the national real estate market isn’t that scary?

Pat Donohoe 14:12
It is, you know, I think especially as you know, you you have people growing out, you know, going from kind of an urban side and put and pushing out and you see the Salt Lake with all the different suburbs, but it’s all right. And maybe the technology has made it easier to to build and it’s and it’s faster and so if you look at people you know, supplementing you know, their their lifestyle with, you know, it could be like freelance type of work or working remotely or seeing a lot of different industries go there doesn’t matter where a person lives, they can live in the middle of nowhere. So I think it’s, it’s unfair to use that type of assumption when you’re dealing with just, you know, scarce amount of markets because, yeah, there could be there could be a push to increase prices or increase supply in areas that people aren’t even looking at. Just because I would say jobs are becoming a lot more mobile. Yeah, becoming a lot more mobile. And as we’ve talked on your show and your podcast about, by the way, give our listeners the name of your podcast. It’s called the wealth standard. The wealth standard

Jason Hartman 15:13
radio, I think is what you call it, actually. Yeah, the wealth standard. give out your website, tell people where they can find your podcast.

Pat Donohoe 15:20
It’s the wealth standard calm. And the company that I own is called paradigm life. It’s paradigm life.net.net. Yes, it’s hard to get those columns a lot of times for the name you want, right? It is there’s like an Australian crystal company that owns calm and we’ve been negotiating in Japanese for the last last couple of years. That’s google translate

Jason Hartman 15:41
these these Exactly. These domain names are just like real estate on the internet, you know, and it’s, it’s the same kind of thing. But the other thing that we talked about on your show when you interviewed me is about of course, the self driving car, the autonomous car and I hate to even mention those words anymore because we talked so much about it, but my prediction Is that we are going to see the rise again. The the resurgence of suburbia, suburbia, and ex Serbia the Serbs are coming back, maybe there’s been all this move toward the city for the last several years. But I’m telling you, the autonomous vehicle and now Uber said, Uber announced just last week, by the way, that they are going to test self flying cars. And did you did everybody see it’s been floating all around the internet last week, the self flying car, and Google is backing this one. And, you know, it might actually happen. And this time, you know, we’ve been, I mean, we’ve been hearing about this stuff for decades and decades. And you know, of course, it was in the Jetsons. I watched the cartoon as a kid and, but the self flying car that you could summon, and it would just pick you up. And when I was at CES with two of our venture Alliance members, Gary and Fernando a few months ago, you know, we saw the social Flying helicopter there that just picks up two people, you know, there’s no driver, it just picks it up picks you up and that that already works too. So you know it I mean, real estate This is a game changer for real estate it you know, if you’re buying expensive real estate thinking that it’s going to hold its value through the self flying and self driving car revolution is. I mean, we’re on the heels of it. It’s not far away, folks. Be careful.

Pat Donohoe 17:27
Yeah. Well, he there’s another video that came out Jason where he was he was pushing for tunnels. He was pushing for tunnels where the bit where the cars actually go underground and accelerate speed and the Reno traffic jams, etc. Or if you saw that one too.

Jason Hartman 17:40
I did. I saw that video and I think there was another Elon Musk thing besides his Hyperloop which is under transportation idea was the tunnel thing of musk bill. It was Yeah,

Pat Donohoe 17:51
yeah. Yeah,

Jason Hartman 17:52
I saw that too. And you know, Pat, when I saw that, all I could think of this is just massively expensive. Way too expensive. thing in the car. You know, they said the car was going 127 miles an hour. I think. I think self driving cars is really all you need to solve a lot of the transportation problems, and the self flying car would be the next step. But building tunnels and new roads and all that that’s just too expensive man,

Pat Donohoe 18:19
I think it’s safe to say that there’s this fascination not just held by Elon Musk, but there’s this fascination with with transportation and travel and doing it more efficiently. And and I’m not sure exactly what the driving force is. Pardon the pun, but it’s more I in my opinion, it’s Yeah, it’s really kind of creating a lower amount of time between two points, right? It’s creating kind of a closer proximity even though it could be a very huge vast amount of space. Right? So I think that’s really kind of the driving force behind it. But I look at you know, suburbs and you know, I don’t know if people want to live like in in suburbia or in an urban city and I think people like nature like to be out in the open But it’s that transportation idea that, you know, that doesn’t exist right now that makes it feasible for everyone. But I think it’s being pushed and evidence is in what all these, you know, these tech tech guys and tech, tech printers coming up all sorts of ideas, whether it’s the hyper looper, flying cars or Yeah, the autopilot features. Yeah, it’s just a matter of time. But that’s definitely going to be a game changer because people are going to be able to live really anywhere. And I think plus the advent of smart homes and having homes completely off the grid that’s coming too. So those two, those two variables can change can change a lot.

Jason Hartman 19:38
Absolutely. And I love the way you did that pun about the driving force. That was good. But I’ll tell you what the driving forces the driving force is real estate prices. That’s the foundational concept that underlies everything in our life. You know, the preamble to the National Association of Realtors is under all his law. And okay, and they couldn’t be more, right. It’s all about real estate prices. It’s about getting from the location in which most people live. That is the less expensive suburban location to the more expensive location. That is the Job Center. That is essentially the game plan in every locale around the planet. Okay. Just a reminder, you’re listening to flashback Friday, our new episodes are published every Monday and every Wednesday. The work location is the concentrated city location, at least formerly, I know this is changing and there’s some real disruption going on to this. And the living location is the lower priced suburban location, okay, or x urban location anyway, or it’s in a you know, maybe it’s one set of suburbs to another for example, Orange County, Calif. where I spent most of my adult life. And you know, you’d have people that couldn’t afford to live in Orange County, they would live in Riverside and commute to Orange County to work. And Orange County’s kind of suburban in and of itself, not really a city. So you saw that all the time there, and they live in Riverside San Bernardino commute to Orange County. And there’s an old saying in real estate, you know, drive until you can qualify, drive until you can qualify. And that’s basically been the rule. And I’m telling you, folks, if you or your friends are spending money on a high priced real estate, you better really be careful, because if you are paying a giant location premium, that in my opinion, I listened. I could be wrong. I’ve been wrong about a couple things, but right about most, my prediction is that that concept is being massively disrupted. Okay, and the first time I heard about this idea was when Paul Zane pilzer, who’s a great author? I’d love to get him on the show we haven’t had him on yet. He wrote a book that I read in maybe the late 80s, early 90s called, or 90s, called unlimited wealth, the theory and practice of economic alchemy, which was fantastic. It really shifted my thinking a lot of stuff. And he said, Look, you know, if if you live in Los Angeles, and think you got to live in LA, because, you know, you’ve got to be close to work or close to whatever you want to do in Los Angeles and pay super high real estate prices. What happens when there’s a cheap bullet train that gets installed that gets you to Phoenix in 45 minutes? Right. That’s a game changer. Now, granted, that never happened. Okay, even though he talked about that 30 years ago or something, but the concept is already with us with a self driving car. And that is that doesn’t require a bunch of infrastructure. It doesn’t require a bunch of environmental impact reports. A lot of fighting. This is just a technology that’s just going to happen because it’s fragmented. And when it all gets networked together in cars can drive 100 miles an hour, three feet off each other’s bumper, because there’s no chance of accident, because the computer system will network the cars together and control them. You know, you’re not gonna need to build any new highways. Peter Diamandis told us about how the packing density of that self driving car is six fold, it’s at least six times higher than we have now. And you take the packing density and increase it by 600% of the cars on the road. And then you increase that you basically double or triple or if you live in Los Angeles, quadruple the speed of the cars in which they’re moving right? From 25 miles an hour to 100 miles an hour. Really, what’s the big issue here with transportation, you’re you’re good. I mean, you could you could be to an outlying area in no time and work in the expensive area. And then you know, you take Skype and virtual reality and you know, email and all the other technologies we’ve already been using for years and add them to that. And it’s just really a game changer.

Pat Donohoe 24:04
Well, I think also it all comes down to, you know, the matter of real estate and and space. But think of it this way, if you start to get just continually have this increasing demand and this increase in density with regards to downtown areas and metro areas or business district areas, it’s just going to cause people to figure out solutions. So if you look at some of the things you you mentioned, which is, you know, virtual reality or the ability to very easily do to do video conference calls, you now have these kind of robots that have an iPad screen on them and you can log into the robot and kind of control your way around the office. I don’t know if you ever seen videos that showed the future of work is just fascinating to me, because I think, you know, you really look at the, as I said before the advent of those that are working as freelancers or maybe working but you know, part you know, the two days a week or three days a week at an office and the other two days off That right there could create a totally different dynamic when it comes to the amount of space needed for a business because a business may have, you know, 50 employees, but have, you know, really space for for 15 or 20? Now it’s like, Okay, well, how do you fit 50 employees in there, that’s when you look at, you know, just this ability to have people work from home, or work in other locations, and then kind of come in for a couple days, during the week, I just think you’re going to see a lot of a lot of change, you know, in regards to just how businesses run, especially with the up and coming generation, the millennial generation, who, I don’t know if they would articulate it like this, but they are just naturally efficient with certain certain things obviously have, you know, a few wires that haven’t really connected yet, but I think that as they kind of get some experience underneath them, there’s going to be this kind of manifestation of all the things they’ve been learning from a technology standpoint, there’s going to totally change the game when it comes to work and career. So I think that’s also going to affect I mean, there’s so many different variables, right? But in the end, it’s, you know, really paying attention understanding what the fundament mean and then knowing how to invest it right? Yeah,

Jason Hartman 26:02
absolutely. good points. good points there pad. Well, hey, I just wanted to wrap up the episode here today and ask you, what your clients I mean, you have you have hundreds, if not thousands of clients, maybe have 10s of thousands. I don’t even know

Pat Donohoe 26:17
that far, you know, not that many.

Jason Hartman 26:19
But you know, they’re all investors. They’re all I’d say your clients are kind of well off at least upper middle class, if not in the wealthy class. What are they saying to you? What is the sentiment out there? I always just like to ask other business people and investors, kind of what they see going on, you know, everybody’s got a perspective.

Pat Donohoe 26:41
Well, this this is again, there’s not one overarching theme that all of our clients are saying, This is what I feel this is what I think this is what I’m doing. This is what I’m afraid of. This is what I’m excited about. It’s it’s all over the place. But as you know, as you asked that question what what really comes to mind is you have this kind of idea that Those that are in their 50s have always grown up with, which is the idea of retirement, right? Where you, you work for 30 years, 35 years or whatever, and then you, you know, live the rest of your days on the beach and, you know, playing golf on, you know, in, you know, community in Florida or something like that, right? That’s kind of the stereotype. But what I’ve really seen is this kind of reinvention of that where they’re finding second careers, they’re looking to be contractors or freelancers or consultants. And, and I think it’s partially due to knowing that they’re going to be living until 80s 90s, potentially, but it’s also

Jason Hartman 27:40
longer than that. And so, so is there wait before you go on, I want to ask you, is there a sense there that they’re going to run out of money to retire did it Yeah. Okay. Got

Pat Donohoe 27:52
me looking at how interest rates are and how much risk you have to take in order to have yield. There’s there’s this Yeah, they’re looking for, you know, obviously higher yielding investments but it’s also just the amount of money they’ve accumulated just is simply simply isn’t enough when you factor in, you know, taxes and inflation and lifestyle and then how long your money is going to have to to last. And that’s why

Jason Hartman 28:16
a great a great problem to have too much life left at the end of the money, but it’s still a problem it is living longer, but you

Pat Donohoe 28:24
better plan for it. Exactly. And I just think that it’s, I’m not sure if they would, you know, define everything that I’m really diagnosing right now as such, but I would say that, that is the the concerns that I see are basically you know, they kind of reverse engineer right into those, those two things, which is there, they know they don’t have enough money and they know that they’re gonna be living a long time. And they don’t feel like they would be a productive part of society, if they just, you know, hung up the stethoscope or hung up the boots or whatever they do for a profession is trying to kind of reinvent themselves and figure out how they can not necessarily work. Work a full time gig for the man, but find ways in which they can be productive as a consultant or a freelancer or contractor type of a type of position. So it’s,

Jason Hartman 29:10
you know what, I think that’s good. I think that’s healthy. Now, the one thing you didn’t say that I want you to tell the audience is, what what’s the typical age range you’re talking about? When you talk about your clients? Like, how old are your clients? What’s the sort of the average age?

Pat Donohoe 29:24
Well, it might be surprising, because people typically will say that, you know, they’re there. They align with who you are. That’s the age but now our our clients are our low 50s is our average client. So if I would say, Yeah, right, and between kind of 45 to 55. Is that is that sweet spot, but on average, you know, typical, our clients are just a little bit above 50 years old,

Jason Hartman 29:45
isn’t a mind boggling that the government says, Well, you can start withdrawing from your retirement account at age 59. And at age 70, you’re forced to take distributions. I mean, that seems so young by today’s standards, right? Is This Really? Yeah, it’s just the whole, it’s based on this. Yeah,

Pat Donohoe 30:03
it’s based on this kind of axiom of what has always been the case, which has existed for, you know, multiple decades now. And I interviewed Ted benna, who’s the actual first financial advisor and consultant that did a 401k. And he

Jason Hartman 30:21
had invented the 401k. Right?

Pat Donohoe 30:23
Well, he discovered it that the actual code existed from the whole, you know, Reagan era and how they were going to redo the entire tax code. So

Jason Hartman 30:32
and it’s just like 1986, he discovered when did he discovered was

Pat Donohoe 30:35
that early 80s, late 90s. At Well, the phone came, you know, was, you know, put into the tax code and in 1978, and then the 82 is when he discovered it, and the person that he created the whole plan for actually didn’t end up doing it. But that’s when he discovered it and and he did it for other clients, and then it just started take off, but it was never really meant as a retirement plan. But there’s this I know there’s this rhetoric out there this this kind of social agreement that we all have that, you know, at 60 years old, we retire and at 60 or 65, or whatever the ages, but that is all based on just when life expectancies were maybe five to 10 years after your retirement age and now they’re well beyond that. But yet the you know, that that that date that 60 years old, that milestone is still very, very much intact.

Jason Hartman 31:26
Yeah, way it’s in people’s mind. But I tell you, folks, if you really want to get this, I mean, look at you all know, people who are 5067 years old, who are very young, and some of them that have an age well, and you know, hopefully that’s not you listening, that are very old at that for their age, right, like, I mean, I have a friend of mine, I’ll keep them nameless. He doesn’t really listen to the podcast anyway, because he’s hypnotized by wall street and constantly complaining about how he’s getting screwed and losing money. But, you know, probably because he knows me He will never be investing in real estate Because I don’t know, you know, it’s like your friends and your family. They don’t listen to you total strangers, thousands of them will listen to me. It’s just weird. I could be a podcast topic by itself. I know. It’s a strange thing. It’s a strange phenomenon about human psychology. But you know, he’s hold is my friend. He’s probably 53 or four maybe. And he looks young. Right? But he acts like a grandpa. I mean, he just acts like a grandpa. I don’t I don’t get it. Like, you know, he’s got his whole life ahead of him, but low testosterone.

Pat Donohoe 32:33
You think

Jason Hartman 32:34
that’s the grandpa thing? Oh, yeah. Okay, well get into the gym start working out. But yeah, exactly. Good stuff. Well, Pat, thank you for joining us today and filling us in on some of that and hold but what I was gonna say about the age thing is just all you need to do to understand the paradigm shift here is watch some old movies. And I’m not talking that old. Just watch some movies made in the 70s. Okay, that’s not that long ago. Okay. You know what? The world of movies and history and so forth. And just watch how they portray and look up on Wikipedia the age of that actor or actress right? and calculate the age they were when they did that movie, right? Say it’s, you know, Robert De Niro, for example, right from a 70s movie or something like that. And, you know, calculate his age when he did that movie, the year of the movie, the age of the actor today, just do the math, and just look at the portrayal and I dinero just, I don’t know why it came to mind. But you know, he did. But it could be anybody. And just look at the way they portray, say like a 40 year old, and it’s just like a 40 year old back then was much older than a 40 year old today. I mean, it’s just, it’s dramatic. The shift is really dramatic. People don’t think enough people notice that or give it credit. It’s amazing. And you know, if you listen to my longevity and biohacking show costo co hosted with Fernando, you can learn a lot more about how to stay on and live a long time and hack your Biology and, and do do more.

Pat Donohoe 34:02
So one more point, Jason, you look at really another one of these driving forces in the economy. It’s this fascination with being healthier, living longer having more vitality. And that’s just as a drive, I think, by most most human beings, especially Americans. And so if you look at really that bad demand, there’s a lot of money, a lot of r&d, a lot of companies that are just, you know, compounding on one another’s ideas to crack that code. And so that’s also going to be another again, one of those variables that is going to determine a lot of what the future is going to look like.

Jason Hartman 34:38
Good stuff. Well, Pat Donahoe, thank you so much for joining us today. And we will see you at the next venture Alliance mastermind meeting coming up in just a couple of months. So we’ll look forward to seeing you there.

Pat Donohoe 34:49
Okay, likewise, thank you, Jason.

Jason Hartman 34:52
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