The Biggest Investment Trends of 2025 (My Interview on Capability Amplifier) – EP 223

Mike Koenigs: Hey, Justin. Welcome to Capability Amplifier. It's so good to catch up. We were just getting caught up before we started rolling here. And you are the Lifestyle Investor. We've known each other now for years. You've got an amazing brand. What's hot for 2025? And how the hell are you doing?

Justin Donald: Oh, man. Well, let's start first off with I'm doing great. It's so good to see you. I'm glad that we could catch up off air for a little bit and just see how each other's families are doing and what's new. And I can tell you're loving life there in Pescadero and really enjoying that Cabo countryside.

Mike Koenigs: It's so nice. Yep. Watching the sunset, oceans off to my right, and it is exquisite. This is a great time to be down here.

Justin Donald: I love it. I love it. Well, you deserve it. You've been working hard. You've been doing some cool stuff in life. And I'm still so thankful for our years of friendship and some of the cool collaborations that we've been able to do because you're brilliant at extracting ideas from people's minds and helping make it a reality. And so, working together was a lot of fun.

Mike Koenigs: Yeah. Thanks, man. So, tell me. I just want to jump right into lifestyle investing, passive income.

Justin Donald: Sure.

Mike Koenigs: On it. Everyone needs it. I want to begin I want to ask the bombshell question, which is what were the biggest mistakes you made in this past year? And do you have any investing regrets? What fell apart?

Justin Donald: Yeah. It's interesting. I try not to live in a world of regrets. I think even when things don't work out as planned or if they take a weird turn, there's just so much education and so much opportunity to learn in that. So, I have many failures and blunders. And like any other investor, I'm not going to get it right all the time. Luckily, 2024 is actually a really good year. So, I don't have any blunders from 2024. Now, I've got plenty of blunders from prior to that and we can talk about all that but in the moment it is really painful when things go wrong and you make a bad investment, you lose money. It's the worst feeling in the world.

But once you can get beyond that, my best lessons truly have been from like the times where I've lost money because it left such a burn that you're forced to learn lessons. You can't not learn lessons. When things are going great, you just think you're really good. You think you're better than you really are. And often people don't take into account like the economy's helping you, you've got low interest rates, whatever it is. And so, most people think they're better than they really are. It's when you get burned, that's when you really learn some stuff and there's some real introspection.

Mike Koenigs: All right. Any specifics?

Justin Donald: Yeah. You know, I did a deal. So, this is going back a few years now but I did a deal that was supposed to be a senior secured position that was collateralized. So, if things didn't go well, I should have been in first position and there should be assets for me to be able to take. Well, this wasn't properly papered or documented. It wasn't properly memorialized. And so, it left me in a situation where I wasn't able to recoup what I thought I was able to recoup. And there is another situation. And by the way, we'll see how this plays out where we got a personal guarantee, but that person filed for bankruptcy or they're about to. We suspect that they're going to file for bankruptcy. And so, it'll be interesting to see how that personal guarantee actually plays out if they have no assets, right?

So, those are a couple of situations. I mean, back when I wrote the book, when you and I were going through that, we talked about a big Ponzi scheme I invested in and that's still one of my largest losses, but greatest learning lessons. So, because of that situation, I have not had any losses to that magnitude, which is great. And the last few years, really, even though the last few years hasn't been great for a lot of people and it hasn't been great for interest rates, it's actually really been a good season for us and for the Lifestyle Investor community because we've just been like so much safer, so much more cautious, so much more conservative in our investments and so much stricter on our underwriting that we have really done a handful of pretty incredible deals when most people are kind of not doing deals or they're just not getting the returns they want to get.

Mike Koenigs: Okay. So, let's move on into the positive moving future. That's what Dan likes to say. I am super curious so here we are. As of now when we're recording this is the end of the year and you're all about buying your time back, passive income. And for anyone who is not familiar with your platform, it's all about taking risk off the table, buying your time back, and creating passive income. And I'm curious what you're looking forward to in the hopper for '25 that you can talk about so if you've got some big tips, under-the-radar trends, emerging markets, everyone should be paying attention to.

Justin Donald: Yeah. I'd love to share just a handful of things I'm thinking about, my third commandment, which is part of my investment criteria. So, one of my lifestyle investing commandments is to find invisible deals. And the way that you do that is you pay attention to where money is being spent, you pay attention where money is being transferred. And so, we're in the midst right now, as we speak, of the largest wealth transfer in the history of the world. You've got baby boomers that are passing. Some experts estimate $80 trillion. I've heard as low as $75 trillion and I've heard as high as $110 trillion over the next 20 years. And it's already begun.

And so, you think about what that looks like here over the next timeline. This is literally the single greatest wealth transfer ever in the history of the world. And so, if you can figure out what millennials like to do, how they like to shop, how they like to spend time, what are they doing for recreation, how do they like to travel, how do they like to work, I mean, if you can figure all these things out, you're going to do really well financially. And so, I like to look at some of that. I like to look at some of the other trends. I like to really kind of pay attention to what's going on. So, if you want, I can kind of give like an overview of a handful of things. I mean, I can either go deep into a handful of things or I can kind of go wide and give you a whole bunch of trends and niches I'm looking at.

Mike Koenigs: All right. So, here's my gut is let's do the top 3 to 5 because just the tip on the millennials and what they like to do, I mean, that's one of those it shouldn't be obvious to everyone and I know it isn't, but I'd love to, you know, let's nosedive into a few of the top ones that are on your radar that like if you had 50, 250, half million, million dollars to put somewhere, where would you put it right now that you are very confident it's going to do something very positive?

Justin Donald: Okay. Well, here's where I'll start. All right. I've got a few genres that I'd love to tackle, and I'm going to save my favorite one for last. Okay. And it's something that you probably want to ask me about anyway I would imagine based on what I know about you. But let's talk about trade with Mexico and let's talk about really this whole idea of the U.S. doing a lot more of the manufacturing where on-shoring, reshoring, whatever you want to call it, where we're bringing this back to the U.S. versus outsourcing everything. And so, I really believe that we're going to see a boom in border towns and in port cities.

And so, there's really only a handful of ports across the U.S. that are the big ports. You've got a couple that are on the West Coast. You've got a couple on the East Coast. You've got Houston. And that's really, you know, it's the biggest in the Gulf but it's not what most, I mean, it doesn't even compete with the other ports, right? And it could be a big player in the future but I think these towns in the Rio Grande Valley, I think you're going to see a boom in real estate, you're going to see a boom in industrial, you're going to see a boom in, you know, it's kind of like a sub-niche of industrial, which would be industrial outdoor storage, IOS. And so, it's kind of like self-storage but on the industrial side.

I think that we're going to see, we're already seeing it, but I think we're going to continue to see a boom there right along these border towns, right in these port cities. And I think that that's going to be a big play for various types of real estate. So, multifamily, I would put up there as well. And so, that's one area that I'm looking at that I'm very bullish about. I mean, we could go down the niche of like industrial outdoor stores. And how I think that because this is a niche market and it's a small market and it's not very institutionalized yet so it's still mom-and-pop or baby boomer-owned primarily so it gives you the opportunity to get in good pricing and there's not a lot of them out there. And so, that is a niche I've been investing in a lot recently. So, that's one area.

I have several different things that we could go down so maybe like three different areas but I kind of combine them as one. Another one is going to be private credit. And so, any time you see the big financial institutions doing major moves, it's got to open your eyes. When you see BlackRock that's never been in the private equity, I'm sorry, that's never been in the private credit space ever before all of a sudden make, what was it, a $12 billion acquisition of a private credit fund with like $150 billion in assets under management, they went from being a non-player like not even on the team, they're not even rostered, right, to being one of the biggest players in this space overnight. So, I am still very bullish there.

I think that there's going to be a lot of people that have inferior products that have high margin that are high leverage. I mean, there's probably a lot out there that's not going to be great, but there's tons of great private credit opportunities which if you don't have a banking sector that is willing to lend money the way that they could and should in the way that they used to, then the private side comes in and they create solutions, right? So, huge fan of that. That's been a big part of our portfolio. I still think buying small and medium-sized businesses where this whole baby boomer retirement kind of theme and craze like we're going to see more of that. So, I talked about it a little bit, but how does it show up?

It shows up in the real estate being sold. It shows up in these businesses being sold. And a lot of these businesses, the kids don't want it or maybe they don't even have kids, right? And so, either they're going to pass it down and their kids are going to sell it or they're going to sell it first. And that's just kind of what we're seeing. I think another huge one is minority positions, minority equity positions in pro sports teams. We're seeing a lot of the legislation rules for being able to invest in the NFL and be able to have minority equity ownership and a lot of the private equity firms getting into that space. So, that's the space I've been investing in heavily here through a couple of groups that do it, and I've had some great returns already in this space.

And so, I'm a huge fan and I think it's just going to get bigger. You're going to see it in college sports. So, a lot of the schools that are private, they're going to be selling the majority of their stake. I mean, there are people already talking about buying. I mean, there's a handful of groups that are literally talking about buying 51% or more of many of these universities. So, you're not going to see that most likely on the state side like a public school, but for sure on the private side. So, that's going to continue to be great and a great long-term store of value. I think e-sports is something to really pay attention to. I mean, it's huge in Asia, it's pretty massive in Europe, and it's coming to the US. It's very big in Latin America as well.

But it's coming to the U.S. and if you just ask your younger kids what are they doing, what do they like to spend their time doing, you will know all you need to know that this is going to be a major investment opportunity. And so, there's one of the biggest teams, actually the biggest brand in the history of e-sports is a company that because this deal is currently in the works, I'm not going to say it by name, but I'm really excited because I'm part of that investment and I'm very bullish on this space. So, those are a few. Actually, I've got a few others that I'll share.

Mike Koenigs: Okay. Yeah.

Justin Donald: Web3 100% their blockchain, Web3 gaming specifically, different than e-sports. So, Web3 gaming and e-sports, you could put them under one umbrella. You can kind of separate them. We've got a guy in our Lifestyle Investor mastermind that literally is building out one of the coolest versions of Web3 gaming. He was able to poach the person in this position that ran the most profitable division for Microsoft to head it up for his company and it's taking off. And so, they've officially gone live and kind of announced that on social media channels. So, that one I think is going to be cool. We could separate blockchain and out of it and have that as its own category.

Mike Koenigs: Yeah. I want to go down to crypto. Yeah, let's go down that crypto path when you're done with these. These are awesome.

Justin Donald: I will. I will. And I am going to save my best one for last, which it's going to be down the crypto line of things. Something that we're going to see more of and that I'm really excited about, it's something called GP stakes. That's where you can get a percentage of the general partnership as an investor. I'm going to group with that, secondaries. We're seeing a lot bigger of an opportunity to be able to buy in an open market shares that someone might want to sell of a company. Maybe these are even founder shares or employee shares or whatever, so secondaries. And then distressed assets, we're still going to see distressed assets, the economy is that with interest rates as high as they are.

And by the way, I know a huge player in the multifamily space that just went under, just announced to all of his investors that they are wiped out. They literally have cleared the slate of all equity. And this is a monster player in the space with a great name. So, more of that is going to come along. There are some really interesting plays right now in defense tech and fintech, in biotech, in health tech. And even something that I'm seeing a lot of that I'm really excited about are even there's a lot of companies that have these government contracts and these are like long 10, 15, 20-year contracts where you're locking in some massive value. There's a few sectors where the government has these contracts and they're not even showing up on the cap table because the dollars are coming in as grants, not as investments.

And so, these companies are being well capitalized, but it doesn't dilute the investors at all. You're seeing that a lot in defense tech. So, that's a really cool space that we've been investing a lot in. For sure, robotics and AI, I mean, I really want to be kind of riding the big... So far I've invested in in your five biggest AI companies and then a whole bunch of smaller ancillary companies. But one of these five and likely a handful of these five are going to be the winners or the frontrunners now but I do think that in time, that's going to be a huge opportunity. I still think SaaS is relevant, but I think what AI is going to do, you know, AI is going to...

I had someone explain this that I thought was brilliant and it was when you take your services and you kind of build out a SaaS model, a software as a service, and you now have this in a cloud. You've built software. You've made it smarter. You've made it recurring. Well, what AI does is it simplifies, it enhances that cloud product or that software as a service. So, for as big of a market as SaaS is, and that's been one of the biggest markets, one of the largest multiples on revenue like it's been such a hot thing for the last 10,15 years. AI, the market's even bigger for what it can do. So, we'll talk more about that. You're well-versed in AI. You're much more an expert in AI than me. I just look at what I like investing in in these AI companies so I know enough to be dangerous and have done pretty well in the space.

Mike Koenigs: Well, I'll just speak for myself. I know I pay attention to the wrong things because I look at it from a functionality point of view, not in a business application. I'm not thinking like an investor, which is frankly a mistake. You know, I get so deep into the tech that I'd be better off as an advisor to an investor because it's like, "What are you using right now?" But those were excellent. And there, as usual, you have this under-the-radar mindset that is so damn good. I really appreciate it. So, why don't we turn a little bit to crypto? So, as of right now when we're recording this, Bitcoin is at its all-time high. I mean insane. I know you've been bullish on Bitcoin for a while and congratulations, by the way.

Justin Donald: Thank you.

Mike Koenigs: Yeah. But just talk about it from both predictions' perspective. What do you believe is happening for 2025? Of course, no one has a crystal ball, but there are certainly trends. The other side of it would be using crypto as a passive income strategy. And for example, a good friend of mine, I was just talking to him the other day, he uses Bitcoin. He borrows against it as an asset. It's basically tax-free, uses that to capitalize his own business where he knows he has confidence he's going to get an ROI. But I'd be super curious just what your 10,000-foot view is and your one-inch-away view.

Justin Donald: Yeah. Well, this is what I saved for last. What I'm most excited about, what I have been talking about for a long time and my money has been where my mouth is for years and years and that is Bitcoin. So, we can break up, we can talk about crypto. I think there's Bitcoin and then there's everything else. And so, that's kind of how I set it up. And it's not that I don't like other crypto. I think there's going to be a lot of money to be made. I think there's going to be some neat protocols and blockchain and tokens. I mean, there's a lot of garbage and junk out there, but people are going to make money there. You know, there's going to be some moonshots but that, to me, most of crypto is like penny stocks.

You're throwing some money in, seeing if you can catch some upside and, hopefully, you can but you're going to have a lot of losers for the smaller, you know, relatively smaller amount of winners. So, that to me is like speculative. That to me is not really investing. That to me is closer to gambling or taking a shot. So, to me, that's money. I always like to do risky stuff with my passive income surplus. So, any time I've got money above and beyond what it costs me to live, that's where I like to invest in risky stuff, if I am, and I give myself the ability to do that with about 1% of my net worth. Okay. But where I'm very bullish is Bitcoin. I'm a huge fan. I made my biggest single investment in Bitcoin on November 4th because I trusted Polymarket to be accurate and really thought that that was the case. And so, I've been investing for a year.

Mike Koenigs: What's Polymarket for people who don't know what that is?

Justin Donald: Polymarket's a betting site that you can literally bet on anything. And in the instance of the election, it was a way to legally wager on who is going to win the election and many derivatives of the election. It could be in the House, the Congress. I mean, they've got even like what's the first thing that Trump is going to do when he's officially in office? And so, you can bet on that. So, I mean, basically it's a guy that built this platform in like a closet of his apartment and it took off and became this huge thing. And I just felt like there was enough data around it that it made sense. And so, I push a lot of chips in right before.

Mike Koenigs: So, I'm just curious, sub-question to that, do you use this as an investing indicator as a way to look in and predict markets beyond...?

Justin Donald: Well, yeah, it's certainly a data point or sets of data points. I mean, I'm not going to make all my decisions based on it, but I felt like there's enough information across the three major betting platforms that told me enough that I could make an educated guess. Now, this is different, though, because I believe no matter who's running the country that Bitcoin is going to continue to go up. I think it's going to go up a lot faster now based on having a pro-crypto government. But there's no doubt to me that when you have sovereign nations that are putting this in as their legal tender like you got a handful of countries that have done this. You've got more that are going to do it.

The moment that the U.S. pursues and starts this Bitcoin reserve, the moment that happens, the other G7 countries are going to have to fall in line. They have to. They would need to keep up. And the moment you have that happen, that's when you start having more companies like MicroStrategy, who they already got a ton on their balance sheet and they've got a Treasury reserve in Bitcoin and they use leverage, and there's a lot of cool things Michael Saylor is doing. But there's going to be, I mean, there's already a handful of companies that are doing this, but I predict that a lot more than these Fortune 500 companies are going to do it.

I mean, this is something I even see as super relevant for my businesses is having money allocated at part of the Treasury or part of what we use for capital reserves and different businesses being allocated partially or maybe even the majority in Bitcoin specifically. So, to me, there's a lot of ways that you can do it, a lot of ways you can own it. I mean, we now have ETFs. That makes it easy. I still prefer cold storage and owning your coins directly because I think it's safer. You can hold them on an exchange like Coinbase or something like that but I still like you having custody of it. But if you're feeling like the... I mean, so what's going to happen is as it gets easier to own Bitcoin, more people are going to do it. So, the financial institutions are in it.

There are ETFs on it. It's just so much easier to buy now. You can invest just in MicroStrategy if you want, like a leveraged play on it. So, it's easier to invest now. The more ease that exists, the more institutions that go in, and the more sovereign nations that go in, the more of these countries that create a reserve, the more the price goes up. It just validates it. But these financial institutions are making it really easy to buy. You know, BlackRock, the largest asset manager in the world made it really easy with super low fees to get into Bitcoin. You can just buy an ETF, IBIT.

Mike Koenigs: And are you using ETFs also besides buying Bitcoin itself?

Justin Donald: So, every strategy I just shared, we use and there's a way that you can self-direct your accounts and you can get in that way. So, you're going to have retirement accounts like Roths and other products where everything grows tax-free. So, yeah, I'm a big fan of that for myself, for my daughter, for my wife. I mean, these are all like if you think about what asset is going to perform the highest, like what's the best return for the next ten years out of all asset classes, well, you can make a strong argument that it's Bitcoin because the previous ten years has shown that.

Mike Koenigs: Yeah. And how do you I say equalize between what Buffett and the old guys say, where it's just stupid and a pipedream and dreaming crazy? What's your response to that?

Justin Donald: I think there are people that are brilliant at what they know and what they have expertise in, what they have 10,000 hours or more in. And I'm going to listen to their advice on that because they're brilliant in that. But if you haven't invested the time, if you haven't invested the 10,000 hours or even a fraction of those hours, then you're not an expert in that. And so, I'm not going to you. I'm going to someone else that's put in that time that knows that space. If you've got a guy like Michael Saylor, who is his company, MicroStrategy, owns more Bitcoin than virtually everyone, right? I mean, there's very few people, countries, companies that own as much as him. That guy has put some time into it.

I'm going to trust what he says over the people that don't have area expertise there. But I'm going to pay attention to Buffett on he likes insurance companies and he likes to buy companies for the long haul. And he has a playbook of when he buys and when he sells and he's brilliant at it. So, I'm just going to follow people for what they're brilliant at and keep it at that and recognize that no one knows everything about everything. So, I need to specialize. If I want to get smart, if I want to get educated, I just need to go to the experts in each thing but I also need to make the decision myself based on my due diligence, my homework, not based on what someone else says. I need to take into account many opinions before I make the decision myself.

Mike Koenigs: Right on. Well, here's what I'd like to do. Well, first of all, I have to say, we don't spend enough time together. And the first time we spoke, I saw this genius in you, and I was like, this, what you do and what you know is so freaking valuable, Justin. I can remember saying, "Everyone wants what you've done and everyone wants what you know," and you're selling the ultimate dream, which is freedom, but you're doing it through such a diligent, creative mindset, but you're also so systematic. So, I want to end with the mindset question, which is, what is your primary question or if you look back at your first principle thinking, what is it? And I think I know the answer, but I still want to ask anyway because I'm curious if it's evolved or changed. So, what's your immediate response?

Justin Donald: You know, it's interesting. I mean, I know what I learned from Tony Robbins way back in the day is, am I enough? Am I loved? So, it probably would fit somewhere in that. I mean, I love people. I love community. I love building out programs and helping people just live a better life. And so, part of me is like I wonder if today it's like, am I having enough impact or am I having impact at the level that I know that I can? Deep down, of course, I want to be loved and I want to be around amazing human beings and I want to pour into them and I want them to pour into me. So, it could be that but there's a part of me. I mean, I could have done none of the Lifestyle Investor stuff like this stuff is...

Mike Koenigs: It was a huge risk. You put a lot on the line. I mean, when we started, it was a risk to you. It's like, "Who the hell is this guy?" I can remember the moment and thank God little miracles just tumbled. And I was just telling a story about you today. You spent more than a decade building deep, meaningful relationships. So, when you came back and you asked for some support to build Lifestyle Investor Mastermind, you had a ton of referrals and a ton of connections who I think saw your genius as well. So, I interrupted you, but I wanted to just acknowledge that part of you but keep going.

Justin Donald: Yeah. I mean, the reason I did it wasn't, you know, it's interesting because it became a very profitable enterprise. But in the first number of years, I never spent a cent of it. It all went to impact. It all went to other investments that I did. And so, like, I didn't even use a single cent to live my life for years. And so, now I actually do draw a small salary from it but it's actually pretty modest compared to what it produces. So, I never really started it for that. But, I mean, the whole idea of having impact and being able to teach people the things I'm doing and be able to have them come and join me and the deals I'm doing and go out and do these epic trips, which now we do these killer trips across the globe inside the Lifestyle Investor mastermind.

We just did this killer Napa trip. We're going to Japan, which is going to be incredible. We're doing a New York City trip. We did a Mexico City trip a few months ago. We're just doing some awesome stuff. And so, for me, it's fun to do life. It's fun to do business and life together and be around like-minded people. So, yeah, I think it's more like, am I making a difference? Do I have impact? And am I around people that I love and that love me?

Mike Koenigs: Yeah. Well, you have that collaborative mindset for sure. So, let's end with besides just going to LifestyleInvestor.com learning more about your programs, is there any other call to action you'd like to make?

Justin Donald: Well, something that we've done in the past, so we've got these strategy sessions that we do when people are like, "Hey, I want to figure out how to move from point A to point B, like what's next? What should I do?" And so, we've been charging $499 to do one of these strategy sessions. And I'd love to just give it to your community for free. So, if someone goes to LifestyleInvestor.com/Consultation, they'll get the opportunity to do a free strategy call with someone on our team that's very well-versed in all the things we do. We've got a ton of courses. We produced this vetting deals course this year, which is epic. We've got a tax strategy masterclass that's just incredible.

We've got all these new products and for some people, it's great to get inside community and create some mentorship. But for other people, they can just learn a few things on the fly. So, that's probably what I would say is LifestyleInvestor.com/Consultation and we'll give you that session for free.

Mike Koenigs: Awesome. That's a great gift. And I'll just put in my two bits because I've known Justin now I don't remember how many years ago. We met on that trip to Fiji. We connected right away. We had the good fortune of working together and one of the babies was the Lifestyle Investor brand. But I personally introduced you to someone who we were talking about before this started, who is a remarkable human being. He's still working with you as a private client for a quarter million a year, and you don't take anyone on to do that, but you're friends too. You have always practiced what you've preached. You're well-grounded morally and ethically.

And everyone I know who I've turned on to you has always thanked me for it and said you just made a huge difference both from a value perspective, but also from a wealth creation perspective. So, thank you for that, and thank you for always taking care of the people I send over to you.

Justin Donald: Yeah. Thanks for the kind words. And I'm never going to treat someone that you send me with anything less than the highest level of respect just because that's how I want to show up for anyone anyway. But I love your intro. You hang out with an incredible crew of people, like-minded, big thinkers, huge action takers. So, it's fun. If I can work with people that will actually like put into action the things we talk about and see that they manifest and create these huge results, I love it. It's so fulfilling for me. So, thank you.

Mike Koenigs: Awesome, man. Well, next step, head on over to LifestyleInvestor.com/Consultation.

Justin Donald: You got it.

Mike Koenigs: Right on. And thank you so much for your time, Justin. I really appreciate it. Yeah. Let's spend more time together.

Justin Donald: Sounds good. My pleasure. Always love hanging out, Mike.

Mike Koenigs: Thanks.