How the Wealthy Invest Differently: Private Markets, AI Disruption, and Negotiating Better Terms with Brad Weimert & Garrett Gunderson – EP 241

Garrett Gunderson: I'm not one to respond to ads, but if I didn't know Justin, I would buy his book from his newest ad.

Justin Donald: I love hearing that.

Garrett Gunderson: The guy that quietly built wealth is now showing everyone else how to do it. I was like, "Dude, I love it.” I was like, well, I've hearted it. I don't even heart stuff. So, for me to even heart it, I'm stingy.

Justin Donald: Thank you.

Garrett Gunderson: I'm selling more books. He's making more money. So, I think that he's winning, but still.

Brad Weimert: Well, I think the other significant thing about Justin is that he's not on a podium preaching that this is the right way to do it. He's saying, "This is my path. If you want to invest from a Lifestyle Investment perspective, which is what I wanted, this is what you should do.” And basically, every opportunity for contest, he'll be like, "Yeah. No, that's a fine path too. You're going to have a different outcome but it's a fine path too.”

Garrett Gunderson: What I love about the example too, for the Justin Fest here that we're about to go on, is that he was masterful at not letting lifestyle creep take over. Even when…

Brad Weimert: He bought my used car, bro.

Justin Donald: It's a nice car. It's a win-win.

Garrett Gunderson: He was financially independent before a millionaire.

Brad Weimert: It's a huge one.

Garrett Gunderson: That's amazing. And then you kept going, which is such an advantage. When you're financially independent, you have a 10 times advantage over someone who's not, because they're still stuck in the, “I'm saving 10% of my income and then 90% goes to everything else.” You're like, "Cool. A hundred percent of my income can build more assets.”

Justin Donald: That's right.

Garrett Gunderson: And so, be like, "How did you get that far, that fast?” is that you, instead of when you got there, said, "Cool, now I'm going to explode my lifestyle.” And now you've got your own sommelier and you're traveling, but it's well within your means.

Brad Weimert: It's not even pushing the edge of within the mean.

Garrett Gunderson: No, it's not even.

Brad Weimert: It's ridiculous. Like, I know you bought my used car. He's multiples of me and he's buying my used car while I buy something doper, which by the way, I'm pretty f*cking frugal. So, it took me many years of making a lot of money, relatively speaking, to spend any money in a car.

Garrett Gunderson: Yeah. I was different than that. Yeah. I bought a commercial building when I was in my twenties. It was 45,000 square feet. I owned 45% of it and it was one of the like architectural awards and it was a little bit of a stretch for where I was. And so, like I looked bigger than I was.

Brad Weimert: Did it bite you at the time?

Garrett Gunderson: More because of my partner. Yeah, because of a partnership. I didn't have the money to buy it out. When in a partnership, it’s fine if I handle it because he had too much real estate. And if I would've been more liquid, I could have just bought that out for super cheap. And it was like, it just wasn't a good decision to be 100% owner at that time.

Brad Weimert: Yep.

Garrett Gunderson: And yet it was fully rented at that point, and it had a good cap rate. It had all the things, but it was like, because he was going bankrupt, it was like it was cash offer at that point. And I was like, "Man, like it moved fast.” There was no getting financing.

Brad Weimert: So, that's an interesting sort of overarching question of do you stretch a little bit to put yourself in a position where you potentially create motivation that will drive you to work harder and make more knowing that that's a good opportunity? Or do you say, “Hey, this is going to put me in an uncomfortable position,” and push me too much and I might be out of my skis?

Garrett Gunderson: My problem with pushing too much is you make bad decisions for the people you serve. Because now it becomes about your survival and not your service. And so, I didn't like that whole notion that’s almost like boiler room where he is like act as if and buy the vehicle before you can afford it and it's going to force you to, and like salespeople get in that trap a lot of times where they spend optimism. This is a good month. Next month will be better. And so, they constantly run that red line. Now, at the same time, I know that, Justin, you reallocate funds quickly into investments, so your team's like, "Why don't we sit on that longer?” And you're more like, “Because I want more assets.” So, that's where that line is, is I think that, and especially like me being married with kids, I pushed too hard, too fast.

And I didn't really have an end in sight. It was just like more real estate, started to fund. I was just doing all this and it was just consuming so much time and now I'm looking at it going, “What does that cost me from a lifestyle standpoint?” And will I be able to be present? Like, I just hit the point where I don't want any more lifestyle investments from a standpoint of like, “I bought a home. It's beautiful.” Like, I don't want anything more than that. I bought this cabin. It's amazing.

Brad Weimert: You haven’t been to real estate.

Garrett Gunderson: Right. So, now like I bought a second cabin because I was like, well, we have more people sometimes than I can handle the cabin. So, I buy a second one and now I'm going, "Maybe I should sell it,” because it's more management. I have to hire someone to support with it, which means I have to manage that person. And so, for the first time in my life, I'm like, “I don't think that more is better. I think actually less might be like more because now I have time off.” Now, it’s not worrying about it. Now, I have one less employee to manage.

Brad Weimert: So, I love that. And the flip side of that is like Justin and I were just talking about this the other day because Justin basically pushes everything to assets. In the last several years, I've just been sitting on cash just like stacking cash and sitting on it. And the flip side of that for me, or how that's manifested with me, is then I feel like I'm stupid because I'm sitting on cash, which is making nominal returns.

Garrett Gunderson: You don't feel stupid right now though, do you?

Brad Weimert: I feel pretty good right now, but I still feel like if in this moment in April of 25 sitting on cash, you can get 4% to 5% just sit in, which is better than my lifetime with cash signature.

Garrett Gunderson: Literally, in checking accounts with Schwab or something. Literally, in 4% and 5%, yeah.

Brad Weimert: Yeah. And it's not making 10 or 15 or 20.

Garrett Gunderson: Right, because this is where stewardship comes in, sitting in cash. Like, I just remember there was a time where I was comfortable with cash because my business growth was there, but then when I saw like 2020 happen and I could see quantitative easing, I was like, “I have to allocate capital now,” because the battery life on my cash is being dwindled. That cash is becoming worth less, so I've got to deploy it to assets. That's why I bought the cabin I bought, and that immediately went up substantially in value, but I was also utilizing it and enjoying it. It wasn't really a cash-flowing asset. It could be. But my wife's like, "We're not going to cash flow that. We're not letting other people in there.”

And I'm like, cool. And then I have this mentor, I'm going to see him tonight. They mentored John Fetzer, who used to own the Detroit Tigers and became a billionaire, and he lived in the same home his whole life. And I was like, "Well, I don't want to live that level where it's…” but I always tell my wife, I'm like, "What if we said we lock in our lifestyle where it is? We're pretty much doing what we want to do, mostly when we want to do it. We have everything we want other than one thing that I just don't know that the juice is worth the squeeze.” A private jet, right? I just don't know even if I have the finances to handle it, is it worth it? Because it’s a big burn.

Justin Donald: We're going to be talking about that tomorrow night.

Brad Weimert: We're all in that boat.

Justin Donald: So, in my life today, I think I'm moving towards more simplicity than anything. And I just think everything we've talked about are trade-offs, right? So, being aggressive, well, I think the younger you are, the more aggressive you should be when you don't have dependents, when you don't have those sorts of things. But it is still a trade-off.

Garrett Gunderson: A bump in the road doesn't have the same issue.

Justin Donald: That's right. And sitting in cash, like there are a lot of benefits to that. The trade-off is maybe you're not earning as much, but it gives you optionality, right? Whereas whenever I'm in cash, I feel like I need to put it to work. Like, I don't like sitting in cash because I feel like I'm not earning what infl…

Garrett Gunderson: You're an investor first and then lifestyle came after. He's a business owner first. So, there's a little different kind of viewpoint there. And I look at like my investments now, I have 10 books and I look at those books as a piece of real estate. And so, I'm always like you look at Killing Sacred Cows, it came out in 2008. It's still on the list because I'm still putting it out there and I look at it like a piece of real estate that in 2023 I rewrote the whole thing. I cut out 30,000 words, added ‘investor DNA,’ and it started coming back into the list. Because I'm like, yeah, if you own real estate for that long, you're going to paint it, you’re going to change out the carpet, you're going to update it. So, why wouldn't I take this asset that's still performing and give it a facelift? And you gave Lifestyle Investor. You updated that book.

Justin Donald: That's right. Yeah. So, 30% more content.

Garrett Gunderson: But I love that you cut and I added. So, for me, I'm like, cool, I can live where I want and my books can perform. I don't pay taxes on it unless I sell. There's no location dependency. There's just so much benefit to it. And now I'm looking at my other book that's more popular than nine of them combined. One book, which I thought was a throwaway when I was first writing it, I never expected it be as big as it was. And now I'm licensing that to other people because I think I can make it a monster financial book and compete with the biggest ones that have ever existed with bigger distribution because now I give a license to one person. That probably represents at least 1,000 or 2,000 books sold per person. So, imagine I do 500 of those in the next year, 500 times a thousand, or 500 times 2,000. That book, all of a sudden, is one of the biggest financial books of all time.

Justin Donald: Well, think about it, it's digital real estate. Yeah. In today's day and age like that IP becomes just as valuable or more valuable than other things. I mean, Naval Ravikant in his tweets, like if you look at Eric Jorgenson's version of putting that together, he's going to be at our event next week, which I'm excited about. But he did such a great job, Naval and Eric, at crafting this message. But if you pay attention to the underlying themes of it, it's like, "Hey, you actually need to monetize or you can digitize and create IP around your ideas, your brand, beyond just your business.”

Brad Weimert: You can right now. So, I have two questions.

Justin Donald: And I want to tell you…

Brad Weimert: Well, yeah. We have two questions here. Wait. One is the path of exactly what you just said and how long is that really going to last where you can monetize your own IP from an educational perspective in your brand? And what happens with that? The other before we get there, because I think that's a longer conversation, is we're talking about sitting on cash and diving into assets and going into May of 2025 right now. Is now the time to get out of cash and deploy into assets? There's a lot of volatility. There's a lot of crazy sh*t happening politically because now the time to buy into assets or do you think we're going to slide down?

Garrett Gunderson: It depends on the type of asset.

Brad Weimert: In real estate for me.

Garrett Gunderson: I'll let you speak to that.

Justin Donald: Yeah. And I think like, foundationally, the premise of how I invest is going to simply be based on this: As monetary supply expands, so do asset values. So, if you're sitting in cash, you've got a depreciating asset. If you're in assets, other real tangible digital or real estate, real assets, they're expanding. So, part of my reason, so it's not like…

Brad Weimert: Can you use other words for that, that are less confusing for retarded people?

Justin Donald: Yes. So…

Garrett Gunderson: I like the R words just coming out.

Brad Weimert: I was talking about myself, so.

Garrett Gunderson: So, it's fine?

Brad Weimert: No. You know what's funny about that is that usually when I use the word ‘retarded,’ I use it literally, and I very, very consciously don't use it derogatorily to mean stupid. I literally use it in the sense of the process is retarded. In this case, I just slipped and thought it was funny.

Justin Donald: Well, what I'll say about it is like, in more layman's terms, the more money that's printed, the less valuable it is. So, if it sits in assets, assets are going to appreciate or expand.

Garrett Gunderson: The inflation helps that asset.

Justin Donald: Yeah. Right. As the dollars are printed or expand or whatever, it's just going to continue to happen. There's no way we can get out of…

Garrett Gunderson: Are you using leverage or not using leverage too with that much cash because no leverage… As long as you have a horizon, it doesn't matter.

Justin Donald: Yeah.

Garrett Gunderson: Like, because if you buy an asset that as long as you go down and value temporarily but it's desired location, it's going to come back. Now, I want to talk about books for a minute because the first argument I have in favor of books, even with AI being so making knowledge just free and synced is there's nostalgia, just like I buy vinyl. I have records and people still, you go on vacation, people are reading books on their flights and in their chairs and they have them on their nightstand and they have them on their back. Like, there's something about the intimacy of that. And it's also the physical copy means that you don't have something interrupting you. When you're reading from a phone, it can interrupt you at any time. You're watching a video, it interrupts you at any time. So, I think there's something to that.

The second thing is we can take our books and put it into the AI and actually have AI start being us in a form of like getting answers because of that body of work. I do think as time goes on, the more people use AI to do too much of the writing, the more homogenized it becomes, the less unique it is. But like he's using it to supplement it so that it sounds like reading instead of speaking. So, that's a great tool for it. So, I don't know. I mean, I'm glad that I already have it. And I'm going to use humor for my next books, so I think that makes it even more useful because I've written this manuscript. It's 20,000 words using humor to teach finance. I think that that's going to be useful because the pictures that are going to be illustrated and it's easy to read.

Brad Weimert: I agree with all that right now. Right now, but I don't know all that for the next 2, 5, 10.

Garrett Gunderson: I don't know. Yeah, maybe less.

Brad Weimert: Yeah, but after that period of time, I don't know that any of that's relevant. I think that there's still going to be this, I think we've had the transitional phase.

Garrett Gunderson: We're still going to want to live in a physical property, but we may not want the digital things.

Brad Weimert: You got it. Yeah. I just think there's a huge question mark around what knowledge means, what credibility means, and what that transition path looks like. Right now, there's a big question of, like you just said, if you spit it into one of the AI engines, it's clear.

Garrett Gunderson: I still have old people that are going to read it. Younger people won't.

Justin Donald: Well, and think about the whole idea of raving fans. You have a ton of raving fans. So, when you build up that audience and you have it because of your podcast, you have people that they're all in, they're bought in, so you produce more content. They want your content because you have a relationship with them, or they feel connected to you and have a relationship with you. So, the argument of it being extinct in time, like I get that what AI can do. Now, I do think there are niches where AI is never going to touch it, or for a long time isn't going to touch it. But you can tell AI writing versus a real human for now.

Garrett Gunderson: Well, here's, like, so I went and spoke at this event. There's 2,000 people there. I put a QR code up. I gave them an amazing free download of five amazing tools. 17% of the room took it. They bought 500 books and had it at a booth. This booth was this major convention center in Orlando. It was almost three-quarters of a mile to walk to the booth. Four hours and 20 minutes, I signed books. They had a drone filming.

Brad Weimert: You did 4 and 20 on purpose?

Garrett Gunderson: I just thought that was great having us gone through… My wife was born on 4-20. It was perfect for her. But I was like, even today when I finished speaking, A, I used humor and now that I use humor versus my intensity of old, I get approached way more. And then they want their book signed. If I'm giving something else, less people come up and talk to me because they're taking an artifact with them. Even if it's old, even if it's an antiquated way, there's something about: I wrote it, they have it, they have a signature in it. Maybe that'll change, but for now, I think it's got a little bit of legs to it.

Brad Weimert: No, definitely. I mean, there's no question about it. It's just we've seen in the last a huge, probably 20% of our audience at Easy Pay Direct are people that sell education. Right? And it's in every possible vertical from financial to real estate.

Garrett Gunderson: My client, yeah.

Brad Weimert: You are?

Justin Donald: It’s getting slaughtered.

Brad Weimert: That's what I'm saying.

Justin Donald: Education is getting slaughtered.

Brad Weimert: Education is getting slaughtered.

Justin Donald: As it should like all these online marketers are getting crushed.

Garrett Gunderson: High school here in Austin has people three grades ahead already. Three grades ahead. It's an AI school. AI's doing the teaching.

Brad Weimert: Say more about that. I don't know that.

Garrett Gunderson: I just heard about it and I even just saw that like China's going to make it, that they have to learn about AI in school. But I was just talking to this guy that created a ton of private colleges, made hundreds of millions. His whole thing is he wants everything called The Great University. So, your teacher is Socrates for philosophy. And you're having a one-on-one experience, but you actually get a degree at the end. So, just think about how much time in school is wasted with people that, you know, teachers that are tired. They're dealing with students. They're going from textbooks that are printed that are now out of date. Like, when I went to college, our nutrition class taught the food pyramid. I was like, "What the hell? We know the food pyramid is garbage and they were still teaching it because how long does it take to get the updated information and reprinting?”

Brad Weimert: And get it through the government to allow that to be the book that's taught.

Garrett Gunderson: Yeah. So, if all of a sudden you're learning and AI sees your pace and then goes to the next thing, you can skip ahead so much faster because it's cutting through all the noise and all the conjecture and all the tired teacher and all that kind of stuff. So, I don't know a ton of detail. I just heard about it because I just flew here and they're like, "Oh, did you hear about this school?” So, I don't really have the citations for it.

Brad Weimert: No. But I think logically the path is, without question, all kids, all humans learn differently. And so, there are brilliant people that don't want to sit, will not sit and read a book for 600 pages, but can integrate the knowledge from the book if they can interact and ask good questions and get to the answer faster than reading through all of the foundation.

Garrett Gunderson: The new version of ChatGPT. So, I was doing a masterclass last week and for fun, I said, "Write an emotional close about the Rockefeller method using my voice,” and what it spit out I just copied and pasted. Forgot that I had done that. I was going to go back and I was like, I just read it. We had a 43.11% upsell take because that was the thing that I used for it. I was like, "That's crazy. I've never had that high.”

Justin Donald: Which is higher than…?

Garrett Gunderson: Higher than I've ever had. I've never had that. And I just didn't even modify it. I just read the script. I was like, that's insane. And then one of my clients was like, “Hey, I asked ChatGPT to describe you. Here's the paragraph.” I was like, "Holy sh*t. I couldn't come up with that good copy about how to describe myself. It was phenomenal.” So, like how fast it's advancing because the first version I used to do videos, me versus ChatGPT and finance. And I would just cru-- because it was all just homogenized, lowest common denominator, Dave Ramsey kind of garbage. And I was like, I'm just going to go after it. It's getting better and it's getting better fast.

Brad Weimert: Yeah, no question about it. I just think about it in terms of a business model. Like, I think about if your business model is education and a platform, how long will that last? And I think historically there has always been a question of: did you hit the timing right for the business model? Right? And we're in a very…

Garrett Gunderson: Facebook like hitting the right timing.

Brad Weimert: Everything. You know, Myspace was long before, right? Friendster, long before Facebook. Did you hit the timing right? And by the way, Myspace sold for a billion dollars to Google, I think, right?

Garrett Gunderson: Yeah. Well, think about the Concorde, that airplane. Remember how fast it could get to London? Then it had an issue. And so, they had to revamp and they had to fix it. And you know which day they relaunched the Concorde? September 11th, 2001.

Brad Weimert: Oh, yeah.

Garrett Gunderson: So, that went bankrupt. That's just bad timing. And so, there is an element of that with anything you're doing. Even the right relationship has such an element for something advancing. And I think the two industries that are already done are attorneys and teachers. It's over. I sat on a flight next to a brilliant attorney, someone I know that I've referred to, and the entire time he was using AI to write the plans. And I was like, well, now what I do is I use ChatGPT with all the prompts, and then I send the document to the attorney to see what I'm missing. So, now my last document, I set 30 minutes aside with the attorney. We were done in 21 minutes and everything was done. So, think about how much money I saved. The agreement I had before was $900, and it was simple. And I could have done it with GPT with somebody like, "Oh, you missed this,” and "Do you really want that?”

Brad Weimert: And that's cheap. I went to attorneys for a contract that Justin and I have talked about, and I came back with a $12,000 bill and I was like, “Hey, calm down.” I was like, "First of all, you can't send me a $12,000 bill without letting me know that you're going to go into that crazy…”

Garrett Gunderson: You need some Vaseline before take this call. Yeah.

Brad Weimert: And I still haven't heard back from him. But second, yes, like you should, you can digest a bunch of that earlier, but if you know nothing about it, then you're putting a lot of faith in the robots.

Garrett Gunderson: I just switched banks because of AI, because the bank I was at, I looked at their cybersecurity and I talked to someone that owns, you know, that runs private division, like for the ultra-high net worth people. And he is like, "That bank spent this much. We spent 8.7 billion as a bank. Do you think your money's safe over there? And by the way, we're exposed to 1% for commercial lending. They're exposed to 35%.” And I was like, "Okay, I'm moving today.”

Brad Weimert: Yeah?

Garrett Gunderson: I was like, "Damn,” because it's just going to be interesting because I even wonder what's going to happen to Bitcoin with seed phrases.

Brad Weimert: I do too.

Garrett Gunderson: Because like what if AI could figure that out, right?

Brad Weimert: Huge question of, look, you want to go doomsday on this, you’re like AI could break the entire financial infrastructure in an instant and passwords, encryption, the whole thing.

Garrett Gunderson: It can also change that the people can't lie anymore.

Brad Weimert: That's true.

Garrett Gunderson: That would be…

Justin Donald: it's pros and cons, right?

Garrett Gunderson: It makes you so much more productive.

Justin Donald: Yes.

Garrett Gunderson: Yeah. Like right now, my CMO says he's 10 times more productive because of AI.

Justin Donald: Yeah. Well, and it's figuring out where you can do that like where can you get ahead on the legal stuff. I mean, I just negotiated a deal where I had to buy out some partners, and then I was bringing in some new partners and I thought it should be pretty simple. When I got the bill, it was $90,000.

Garrett Gunderson: I'm feeling good about my $900.

Brad Weimert: I know you said 900. I was like, bro.

Garrett Gunderson: But I mean, it was the simplest of agreements.

Brad Weimert: I know.

Garrett Gunderson: So, it was a revenue agreement.

Justin Donald: Yeah. At that pricing, guys, like big-time firms, they're not going to be able to keep charging those rates. And I love that. I absolutely love that because the last few years…

Garrett Gunderson: Thanks for dropping your d*ck on the table with your $90,000 there. Your little $12,000 pittance.

Brad Weimert: He's got to do something to put something big on the table.

Justin Donald: Well, this is the last thing that I want to be celebrated, guys. This is pain.

Garrett Gunderson: That's a lot of wine.

Justin Donald: This is painful.

Garrett Gunderson: It's a lot of wine.

Brad Weimert: Yeah. And not as much as his cellar to be clear, but…

Justin Donald: There is an argument to be made that you want to have the best legal advice. But yeah, a shortcut with AI and kind of get ahead, that's…

Garrett Gunderson: I still want an attorney for right now. There was an issue, you know, I want someone to defend but I don't want them doing the busy work and charging me their full hourly wage for it.

Justin Donald: Yep. And you didn't talk about title companies. I think title companies are going to the wayside probably sooner than anything.

Garrett Gunderson: Which is great news.

Justin Donald: Yeah. Blockchain.

Garrett Gunderson: When you see all the title fees, I think its, I'm always super annoyed.

Justin Donald: I'm always bothered. Title insurance to me is a total joke. It's a total rip-off. And the fact that we're not more progressive in this sort of area, something as simple as deeds, who really owns it and have it in some sort of centralized database.

Garrett Gunderson: You know, on one of our companies, we just went with an AI bookkeeper. Yeah.

Justin Donald: Okay. That's fun. I'll be interested to see how that goes.

Garrett Gunderson: Like, it's one of my smaller companies that's kind of a startup but I was like, “I want to see how,” and so far so good. I mean, I just like the thought of all the busy work getting eliminated. So, we could have conversations, we could hang out. We're not, you know.

Justin Donald: I like that. Yeah. I'm all for that. Anything that enhances lifestyle.

Garrett Gunderson: Ours are going to be. I think ours is going to be good.

Brad Weimert: But people are still important because when you have three people in a podcast instead of two, one can leave in the middle of it and go bourbon.

Justin Donald: Yeah. And get a frosty glass. I like that.

Garrett Gunderson: This is apparently how they treat mold by the way.

Justin Donald: Yeah, no kidding.

Garrett Gunderson: You just kill it with whiskey.

Brad Weimert: Way different.

Justin Donald: When we drink in here.

Brad Weimert: Yeah. This is actually a gift from one of our banks.

Justin Donald: I love it. I'll just show this off real quick.

Brad Weimert: When Garrett got in, he was like, "Yeah, you know, I was at a wine tasting with Justin last night, but he was spitting out the wine because he's got this mold issue.” And I was like, “I have a mold issue too. And I just think that bourbon makes it feel better.”

Justin Donald: Well, I'm on a very strict protocol as we've, well, I guess we both discussed for a year on a lot of it, but it'll be four months on the whole comprehensive plan, maybe four and a half or five months.

Garrett Gunderson: He’s just worried about his pickleball game.

Justin Donald: Yeah. Well, it's slowing me down.

Brad Weimert: Pickle dickle.

Justin Donald: Slowing me down.

Brad Weimert: Yep. I get it. I probably need to get on that plan. I will at some point.

Justin Donald: I think it'll be helpful.

Brad Weimert: Yeah.

Justin Donald: But it is crazy. I mean, anything that can cause any sort of inflammation, it's just out the window. So, alcohol, added sugar, gluten, dairy, corn products, rice products.

Brad Weimert: Okay, fine. So, let's talk health on that front then. There is a question similar to when you talk about the financial balances of I want to maintain my lifestyle and do I get aggressive to make more money or do I pull it back so that I can live the lifestyle I want to live? Look, there's no question that if you want to live the longest possible days, you can cut out tons of stuff. And how does that impact your quality of life?

Garrett Gunderson: For me, I got diagnosed with kidney disease in 2023. And it was pretty bad. So, I basically went like, "Alright, whatever I got to do.” My blood pressure is 192. I was like, "Got to figure this out.” And it's actually been simple because once I got over sugar, like part of my problem was not eating frequently enough because I thought intermittent fasting was the best thing. And for some people, it is. For other people, it creates cortisol issues. It creates other issues. So, I just ate as soon as I got up and then I just had certain approved foods I could have. And so, I just started saying, "All right. Now that I know what I'm eating, it's actually been really nice.”

And then now that my health's a lot better, I can introduce like I could just go have a meal and it's no big deal. I take milk thistle and Nema base if it's a meal that's not ideal. It doesn't really impact me. And I can look at my blood work because your blood pretty much tells the truth about what's going on with your health. But before, what would happen is I didn't have enough of a plan. So, I would get busy and then I would get hungry and then I'd make bad choices, especially later in the day. Now, I don't have that hunger at night, so I don't have any bad choices that are tempting me. I could be in a hotel room with all the candies. Doesn't bother me at all. And the years passed because I wouldn't eat enough during the day or whatever. I'd be like, "Oh, screw it.” I'd eat the M&Ms and then I'd feel bad about it because I know it's not good for me.

So, if we're going out to eat, like when we went out last night, it was like everything on that list was pretty much approved. I just get total dessert and felt completely fine. I don't feel like it impacts my lifestyle. Now, I have a house manager that makes a lot of my meals, so she's making it tastier because I just avoid salt and I avoid any inflammatory thing. So, it's more like sweet potatoes instead of rice or it's meat and vegetables. So, for me, it's been really nice, but I wouldn't have thought that until I was on the plan.

Brad Weimert: Yeah. I was at TED in Vancouver last week, which I've been wanting to go to forever.

Garrett Gunderson: How was it?

Brad Weimert: It's pretty disturbingly left leaning and it's like coming, but like, we're in a weird world and so it's gone into this sort of like aggressive far, far edge. And I feel the same…

Garrett Gunderson: And the edge on both sides.

Brad Weimert: Absolutely. This isn't about left-right. It's like both sides on the far edges. It's scary. And so, there's a little bit of that and amazing, amazing, amazing people. And like you, we've all seen TED Talks that you watch them, you're like, "What the actual f*ck?” I'm so glad that there are people that are doing what you're doing and focus on this. But John Mackey was speaking and one of the things that he said at one point was once you, I don't know if he said it there or I heard it through context, but he said, “It's interesting because people feel like eating these foods are going to pull away from the rest of their life, but once you condition yourself to eat foods that are actually good for you, you don't want the other things.”

Justin Donald: Right. That’s so true.

Garrett Gunderson: I had pizza once in the last year and I thought, "Oh, this is going to be a big treat. I've got all my old high school buddies up at the cabin,” and I was like, "Gross.” It just was gross. It was weird. I was surprised and then didn't feel good. Your body, you know, really inflamed. Like, I went to pull my rings off. My fingers are swollen. I was like, "Not worth it.”

Justin Donald: Well, and you don't notice that until you do an elimination diet, get out of your system. Then when it's been gone for a while, you reintroduce it.

Garrett Gunderson: You just get inflamed the whole time, right, before…

Justin Donald: Yeah. Feels it, right? You actually feel how the impact that it actually has, which is pretty fascinating.

Garrett Gunderson: Yeah. And to eat really healthy in America is harder.

Brad Weimert: It is harder.

Garrett Gunderson: Yep. It is harder. Everything's so processed, so many things added to it. And so, when I look at people that are struggling with that, I feel for them because if you don't have a lot of wealth, it's even harder.

Justin Donald: Or the education. You have to have the education and the money to do it, right? So, those are two hurdles.

Garrett Gunderson: Yeah. When I was young, I didn't even know the difference. Like, I remember…

Brad Weimert: I already did.

Garrett Gunderson: I started in the financial business and people take you out to eat all the time to court you. And like I'm eating crème brûlée for the first time and, all of a sudden, I'm just gaining weight, you know? And what's going on, man? It was like, "Maybe you should go to the gym.” And I was like, "What?”

Brad Weimert: I had a friend from Indiana and I was…

Justin Donald: I think I know this friend.

Brad Weimert: You do. I was like 22 and at this point, I'm on my health journey already and I'm pretty dialed for what I thought was good at the time, right? But I was at his house one night and we're hanging out and I was like, "Do you have any like vegetables?” And he is like, "Yeah.” And he goes to his fridge and he comes back and he had heated up some tater tots and those were the vegetables that I was getting.

Garrett Gunderson: Tater tots.

Brad Weimert: But like legit. He thought that was like a vegetable. He was like, "This is good.”

Justin Donald: It's a potato. A deep-fried potato.

Garrett Gunderson: This is healthy enough for you.

Brad Weimert: Yeah. That's probably not actually potato, anyway. I mean, there's part potato in there, but…

Justin Donald: Right. Yeah. Agreed.

Garrett Gunderson: It just changes as your palate changes for sure. It's like when I first got married, my wife is just, she ate five of the most basic foods and then I started taking her like to nice places. The luxury once enjoyed, kind of becomes a necessity.

Justin Donald: Oh yeah.

Brad Weimert: Yeah.

Garrett Gunderson: Right? That's the truth in exchange.

Justin Donald: That's the truth. Dude, be careful. That's the lifestyle creep right there.

Brad Weimert: There is also, in almost all those places - not almost. In all of those places, in nice places, there is an opportunity to be kind of a pain in the ass, but special order in exactly whatever way you want. And that can be as simple as like, "Yeah, give me the steak. Don't cook it in whatever sh*t. You just grill it and don't give me sauce. Just give me the f*cking steak.”

Garrett Gunderson: That's all I say.

Brad Weimert: And the meat's going to be amazing like the quality of the meat is great in great places. And that's it.

Garrett Gunderson: So, like once I got off salt, and then every now and then, I go to a restaurant and tell them to hold the salt, but they can't help themselves. Everything tastes so salty that it's overwhelming. We just oversalt everything, which is table salt. So, like your palate changes.

Brad Weimert: It was also table salt, and then there's like salt-salt, right? So, my parents actually told me this. So, Mortons added iodine to their salt as a feature of salt in their youth. So, when my parents were growing up, Mortons came out and they were like, "There's iodine in the salt and it's beneficial for your health.” Now, the perspective on that now is that's f*cking terrible.

Garrett Gunderson: Yeah. I want to see what happens 10 years from now. We're going to find out cold plunge is the dumbest we've ever done, and I'm going to be pissed that I cold plunge.

Brad Weimert: There's, I hope, tons of sh*t lined up. Oh, I love it. I've got two in the back here right now.

Justin Donald: Yeah, I do.

Garrett Gunderson: Well, my son's like, “I watch you,” and he says you only need 11 minutes a week. And I immediately went from like three to five minutes of time to two minutes. I'm like, "Sweet, I'm going with that.” I don't know if it's true, but that just sounds better.

Brad Weimert: Yeah. Right. We don't know. We'll know something different later. There are some things that are very clear, like in the future we're going to be like, "What the actual f*ck were we doing?” A bunch of our surgeries, we were fusing discs together. Like what? Clearly, that's the wrong answer but it's the best thing we know how to do now. I'm optimistic of the next five to 10 on the medical front like really highly optimistic.

Garrett Gunderson: You guys seen like bringing back wolves from 10,000 years ago.

Brad Weimert: Yeah.

Justin Donald: Yeah.

Garrett Gunderson: It's wild.

Brad Weimert: Unbelievable.

Justin Donald: Crazy.

Brad Weimert: Legit Jurassic Park.

Justin Donald: Yeah. Right.

Garrett Gunderson: Yeah. But like we're going to bring the wooly mammoth back.

Justin Donald: Yeah. I will say this is an area where I feel like there's outsized opportunities on the investment front too, right? So, getting these cutting-edge companies that are doing all types of innovative things in the world of science, in the world of health, in the world of longevity, in the world of robotics.

Brad Weimert: How do you pick them though?

Justin Donald: That's tough. So, I mean, I like to look at the industry leaders in any given time, and I like to kind of pick the top four, five and distribute to all of them, right? And then you can see who the outliers are over time. And then if there's an idea with a company that's maybe emerging that just is kind of on its own where I feel like they could stand out in time, I might put some money in there. But again, these investments all come from my surplus income, right? It's all above.

Brad Weimert: And it’s like looking for AI metric situation. If you lose it all, it doesn't change your lifestyle.

Brad Weimert: Do you have a high percentage allocation for that?

Justin Donald: Yeah. So, I really like the model after single-family offices. So, what billionaires do, I want to focus on that. They seem to be the best at it. So, really, it's about 1% in early stage, and it's about 4% to 10% in venture, which is going to be starting around Series A. So, call it 10% or 11%, somewhere in that, depending on how aggressive or not you want to be. I'm on the more aggressive side, so I'm probably sitting at 11%.

Garrett Gunderson: How much of it is it the right idea, the right team, the right processes, or just like the leader?

Justin Donald: Founder. Always founder first.

Garrett Gunderson: Like, Michael Jordan comes to the Bulls, the Bulls are transformed immediately, right?

Justin Donald: Yeah. I'm going to put my money on the jockey 9 out of 10 times and then hopefully it's the idea parlays with that jockey.

Garrett Gunderson: That was Michael Milken’s initial strategy with junk bonds is you go, "Who's the superstar at a small enough company and get really high interest rates, but that's not that risky because this is a superstar?” And then what happened is he became so popular that there was too many funds coming in to actually fund superstars and that's where he got in trouble.

Justin Donald: Interesting.

Garrett Gunderson: Yeah, because it's like back in the day of, I don't even know if it's around anymore, but I remember Money Magazine, the best thing we do is see what they say is the best fund and then just short it the next year. Because they're going to get a huge influx of money. It's more than they can truly allocate. And now they're buying stuff that's not good because they have them in their philosophy.

Brad Weimert: I think that's a huge takeaway because that stuff is happening left and right, right now. And there are, if you listen to people that talk about kind of macro trends, you look at can the market absorb it? Right? There's a conversation around GPUs right now and compute power and there was a huge, maybe perceived over-indexing on NVIDIA. So, NVIDIA spiked and it's declining and leveling out maybe. But the hypothesis is kind of that, which is so much money raised to it that, was it the right choice or not? People got excited and they're like, "Oh yeah, dump it in.” But tech changes too. So, we'll see.

Justin Donald: And location of competitors coming in and changes. Yeah.

Garrett Gunderson: Right. And you don't know who's work, like…

Justin Donald: Where’s it been?

Garrett Gunderson: Comes out with something.

Justin Donald: Is it offshore? Is it onshore? Yeah.

Brad Weimert: Well, I mean, yeah.

Garrett Gunderson: The worst example is crypto, where you just had people that were literally hiring people off of like 1099 websites to develop something, hype it up, and there wasn't regulation, so they were just cashing out, and then people had nothing. It was just a story.

Brad Weimert: So, that's a really interesting, I mean, this is an elaborate one that like you might have thoughts on, but it's that our crypto is a security conversation, right, i.e., should they be a regulated asset class or should people basically be able to gamble with them? And so, you've got to divide between certain things like Bitcoin, Ethereum, the big coins, and then you've got meme coins. Meme coins are unequivocally gambling, right? Like, they're gambling, but they're still perceived to be an investment by a bunch of people. So, should the government or somebody step in to help regulate that to prevent idiots from thinking they're investing in something?

Garrett Gunderson: Well, who funds the government because they're already strapped in not doing a good enough job of regulation, right? So, they're already behind the times with stocks, with NASDAQ even, and now we're going to say, go regulate this other industry. But that was pillaged by people that were like, "Cool, there's no regulation here.” So, it's easier to do an initial coin offering than it is initial public offering and we could just skim the crap out of that thing.

Justin Donald: Yeah. Well, IPOs are flawed from the very get-go with the cost, the time, the difference, how you have to report moving forward. Like, you are really hamstrung after you sunk, what, $40 million in.

Garrett Gunderson: What's your opinion on this? Because I think we're probably aligned, but I just think the stock market's irrelevant now. I think it was a brilliant idea initially. The interest of building the stock market was big ideas require capital and so they went public to raise that capital. No big company raises public capital. It's all private capital 100%. The only reason they go public is for one thing: to take money off the table.

Brad Weimert: Yeah.

Garrett Gunderson: So, it's absolutely a problem because you have underwriters that have the interest of saying that it's going to be a valuable stock, setting the price based upon their own gains. If they don't like you watch…

Brad Weimert: Let's back out of that and simplify that a little bit because if you're in that space or you're thinking about that, you know right away. But one of the things that frustrates me about business or has throughout my journey is it's hard to jump into conversations like this and hear those things and follow them. If you don't have any of the context to the path, and like the person that's starting a company or at a million or two or three or whatever, and they're figuring it out, you missed 18 steps to get to actually that conversation. And the historical relevance of that is that a hundred years ago when people wanted to raise money, they did so through the public and they did an IPO so that the public could invest in the company and they could grow.

And today, in the last 50 years, specifically through Silicon Valley, I think, and you could add context to this, but venture capitalists, PE firms, et cetera, will dump money into private companies that never hit an IPO. And so, all of this money, like hundreds of millions or billions of dollars, get invested into private companies for ideas that aren't even making money yet.

Garrett Gunderson: Media hype.

Brad Weimert: Yeah, media hype. And then they build and then the thought is eventually you can go public, but the purpose of going public today isn't to raise money. It's that the founders that got involved in the first place can cash out. They can take the money. Basically, they can sell their shares, the available shares to the public and pull that money back and say, “Hey, I made some money.”

Garrett Gunderson: And let's make it worse.

Garrett Gunderson: And let’s make it worse. There’s only a fiduciary responsibility to the shareholder, not to employees and not to customers, creating a conflict of interest of how the company runs.

Justin Donald: Well, and let’s take it a little bit further because 25 years ago, there were 10,000 listed companies here in the US. Now, we’re at 4,000 because it’s hard to stay listed. So, now, you’re at– so you have 4,000, right, at 4,000 companies listed when you have literally hundreds of millions of companies worldwide. So, you can either go the public side of things, which is less than 0.1% of the total companies out there that are investible companies. Or you can actually create some expertise, find some people that have expertise if you don’t have it, and invest on the private side.

Brad Weimert: Where actions are plentiful, you have to learn.

Justin Donald: You have to learn.

Brad Weimert: And one of the challenges, if you want to get into the private markets. Instead, another way, if you want to invest in companies that haven’t gone public, you need to do it through some other vehicle. And usually, that vehicle is some fund that is raising money and they’re taking money to raise it. And so, Garrett, one of the things that you’ve talked about quite a bit is the problems with people that are selling mutual funds and all of the sh*t fees that go into mutual funds or stocks, et cetera. So, for somebody else to trade for you, they’re the ones making money, not you. And the same thing can be true in the private market because these funds take 2 and 20, and their incentive is to keep investing in new things and they’re taking that money ever– they’re 2% off the top all the time, no matter what.

Garrett Gunderson: And if you want to remove value to a customer, venture capital is probably the quickest way to do it.

Brad Weimert: Remove value from the customer.

Garrett Gunderson: Remove value from the customer, because it’s all about valuation of the company, which often is, make a sh*ttier product, water it down, move fast, and then exit it. There’s so many issues that happen here. So, this 4,000 issue that you’re talking about, if you’re a small company that goes public, you run such a major risk of getting shorted to death. So, what happens is you create artificial fear and pessimism around a small company and you keep buying options that basically are put options saying when that company lowers value, you get that, the money goes to you, because this is the entire crappy illusion that’s not real.

Hey, $1.5 trillion was lost from the market today. Not true. It was transferred. That money didn’t evaporate, it went into someone else’s hand. But people just go, oh, the market’s down. And they just accept that as the truth. And so, I have a really close friend, they sold their business to a public company, small public company. They got shorted to death. So, when they sold, the stock was worth like $3.50. It’s now worth like 3 cents.

Brad Weimert: Oh, geez.

Garrett Gunderson: So, this company they built, and they should have had $20 million they took off the table. They made a million bucks on the whole transaction.

Brad Weimert: That’s painful.

Garrett Gunderson: Because of that company being public. So, with mergers and acquisition, like think about it, the sharks, all of those statements are true and real. And so, that’s part of the reason you see 10,000 down to 4,000. Obviously, it’s arduous and there’s all these other rules, but the small companies are just bait.

Brad Weimert: So, let’s go tactical on this. So, Justin, you spend basically, now you spend a sh*tload of money so that other people on your team audit deals and figure out what’s good and what’s not. How do you find the private vehicles that you can invest in to get into the private companies that are exciting in those spaces?

Justin Donald: Well, it’s all relationship based.

Garrett Gunderson: Relationship to people.

Justin Donald: Yeah. You got to find the right people. You got to build the relationship.

Garrett Gunderson: You have a reach and reputation.

Justin Donald: Yep. And they have to want you in it because they don’t need your money, right? They can find the money, so…

Garrett Gunderson: You’re bringing them ease, you’re bringing them the community, you’re bringing them– there’s advantages, right?

Justin Donald: That’s right. So, they’re looking for smart money and they’re looking for relationships and they’re looking for people that can actually add benefit beyond just the dollars, but this gets into the question of top quartile, bottom quartile. So, if we’re talking about the public side, let’s look at mutual funds and ETFs here, your top core tile is at like 9.5%. Your bottom core tile is at like 7.5%. So, you got about a 2% delta there.

Garrett Gunderson: 84% of the return in the market goes to 10% of the investors.

Brad Weimert: What are you talking about? Can you break that down?

Justin Donald: So, your best-performing mutual funds, yes, are going to perform really about 9.5%. And then your worst-performing ones are going to perform at about a 7.5%. So, you’ve got about a 2% delta there in that, between good and bad managers.

Brad Weimert: For mutual funds. Got it.

Justin Donald: So, if you go over on the private side, let’s just take private equity, which is going to be later stage, your bottom quartile is like 4.3%, your top quartile is 25%. So, you’re literally at a 20% plus delta.

Brad Weimert: It’s a more inefficient market. So, that’s another way. Mutual funds, it doesn’t really matter. You’re going to get a decent return, you’re going to get a more stable return.

Garrett Gunderson: If I put money in mutual funds, which I don’t, I just go index fund.

Brad Weimert: Index fund, if you’re going to do it…

Garrett Gunderson: If you’re going to index fund…

Brad Weimert: You’re better off in index than mutual.

Garrett Gunderson: An expensive mutual fund with like a fiduciary, might be 2%. Index fund might be like three basis points. If you look at that, over a 10-year period of time, it’s a difference of getting a million dollars and $200,000 return. That’s the difference. People think, oh, it’s only a few percent. No, it’s compounded and cost is algorithmic.

Brad Weimert: So, mutual funds, the delta is only 2% between the good and the bad ones, good and bad performing mutual funds. All you need to pay attention to in mutual funds are fees, basically, because even if they’re performing poorly, if they’re taking 2% or they’re taking 50 basis points, 0.5%, huge difference. Private money, if you’re looking at investing in a venture capital firm or a private office or a PE company, they could return 4% or they could return 25%. So there, it makes a lot more sense to figure out…

Garrett Gunderson: Tens of millions of dollars or hundreds of thousands of dollars.

Brad Weimert: Yes.

Garrett Gunderson: That’s the variance.

Justin Donald: It’s all about having the relationships, knowing the right people. And by the way, it’s even more extreme on the venture side. So, the earlier stage you go, the bigger the gap, right? Because I think, bottom quartile on venture, I think, is like negative 7%. And top quartile, I think, is 27% or 28%. So, it’s the biggest…

Garrett Gunderson: Because they intentionally kill companies in venture. So, this company’s not performing as much, you’re done. We’re going with our pony over here that’s crushing. So, they might go, we’re making 10 investments. We think that one is going to be a superstar. We think two will be okay. And we don’t care what happens to the other seven.

Brad Weimert: Yeah. Because that’s the business model.

Garrett Gunderson: That’s the business model.

Brad Weimert: And it’s not even 1 in 10.

Garrett Gunderson: Well, it’s like a credit card. It’s like when credit cards first came out, they were pretty low interests and someone at Harvard was like, you know what? If we just start charging 20% or 30%, the default rate exponentially goes up, but we still make more money. And that’s similar to venture.

Brad Weimert: So, the question then, because the notion of it’s all about relationships is super frustrating for somebody that’s new and getting started and doesn’t have a network, doesn’t have the opportunity, can’t spend a lot of money to be a part of Lifestyle Investor every year. So, are there any other ways that you can find those good opportunities or audit or assess those and figure out, hey, is this a reasonable private investment to get into?

Justin Donald: First off, I think getting that investor IQ down and building a foundation, actually, understanding what you’re doing matters before you ever put any money in anything. And we have so many free resources on that Lifestyle Investor, the LifestyleInvestor.com/roadmap, like all kinds of things that can help people out in that. We’re building a due diligence AI that’s going to be able to spit out, I mean, we’re already in the beginning stages and it’s doing well, but we want to continue to iterate on it. So, I do think that the AI is going help in that, but AI is still so far away from being able to say, this is a good deal, this is a bad deal. Here’s the real risk, here’s not.

So, you can’t get that, but you can program these AIs to diligence in a way that you want them to be diligence in. So, I think that that exists, but I also think that the shortcut often is money, right? It’s like, how do I spend money to get access? How do I spend money for peer group or for a mastermind or for a mentor or whatever? And some people have to be willing to bite the bullet to do that if they’re in a position to do it. And if not, well, then you’re relying even more, I think, on your relationship skills that you’re offering enough value to someone else that they see value in bringing you into things.

Garrett Gunderson: There’s a couple things that I’ll just summarize here. What Justin just said was, if you have more time than money, you get the free resources and you build up the IQ. If you have more money than time, you buy your way into the relationships. So, when I was 20 years old, I was at a university that we had a professor that retired as a fund manager at 53 years old. He managed $5 billion in municipal bond funds. And one day, he just mentioned he wanted to get in better shape. So, as a 20-year-old, I said, “What do you like to do?” He’s like, “I’d like to work out and play racquetball.” I’m like, “Great, you have a partner.”

And when you’re young, it’s amazing how many people want to pay it forward. So, I just got into rooms I didn’t belong in when I was in my early 20s because I was just willing to be inquisitive and curious and had gratitude, and people like to kind of pass that torch. Now, if you’re like in your 40s and you’re just starting out, it’s a little bit different game. You even have to put some grits.

Brad Weimert: Let me add another part to that equation because, yes, if you have a lot of time, you should spend it sweat equity, learning, growing, et cetera. If you have a bunch of money, then you can spend money to do it, but the gap between those two is making more money. And so, we were talking about this earlier, but there is a question of when do you try to invest money for something and when do you make more money?

And I’m so risk averse. I’m always looking at how to protect the likely best and the likely worst. How do I play into both of those? And so, I don’t go as heavy into like, f*ck it all, let me just make a bunch of money. I’m always trying to control for it through the path, but there is something to be said for, don’t worry about investing in anything and just worry about building your core asset, which is yourself and your core business or cashflow engine so that you have money to invest in the thing later, invest in the relationships, the exposure, et cetera. At least, that’s been my approach.

Garrett Gunderson: The three things that you should do before growing your money is learn to make more money, learn how to keep more of the money you make. You just get more savvy at how do you save tax, how do you save interest, how do you remove non-performing investment fees, how do you design insurance property. Then you figure, like the whole time through, how do I grow myself? Because the more valuable you make yourself, the easier it is to build a network.

And part of that just comes down to look, like when I meet with Justin, I might not know something that could help him, but I know someone who can. So, literally, he was like, oh, yeah, this person that you introduced me to, so I’m always looking to make connections and it’s not– I don’t care about getting paid on any of that. It’s just, if I could be more valuable for the relationship, and then you worry about when you’ve got those three things and you never stop growing yourself, but then you go, all right, now that I’ve learned how to have a little financial intelligence, I’ve learned how to sell, communicate, market, now, it’s how do I grow my money? And too many people want to just go and get Bitcoin at 200 and then they’re mad that they– but like the people I knew that bought it at 200 were nerds, dude. They were like tech geeks.

Brad Weimert: Also, it could have been very wrong. Also, it could have been speculative of this.

Garrett Gunderson: All right. But it was like part of their DNA to research it and to want do. Like, I was going to buy at 300 and they wanted me to meet them in a McDonald’s parking lot, I’m like, I’m good. I’m out. Like, that wasn’t for me. So, we just have to recognize like, it’s when people are fantasizing about being in that club of being able to invest, they’re not thinking about actions they could take to get themselves there and they look at someone who’s already there. But when did you start investing?

Justin Donald: Well, I started investing just in the stock market, not knowing anything that I know today, listening to the council that I had around me when I was 18.

Garrett Gunderson: Right. So, like people are looking where you’re at now and they don’t look at all the steps it took to get to this point.

Brad Weimert: Right, yeah. I’ve said this a bunch of times, but like, I have a number of friends that are 10 years older than me and in a completely different financial situation, and I have to consistently, consistently remind myself, it’s not my job to behave like these people, how they’re living right now. It’s to learn how they behaved when they were where I am right now. And it’s such a relevant thing because you look at people that are crushing it and then you try to model what they’re doing in their life now, and it’s like, no, no, no, no, no, no. They’re so far beyond that, right? They’ve got stuff on autopilot so they can go out and be a jackass.

Garrett Gunderson: I know people that– all of us know that tried to invest with the big boys that were using their like 1% or forwarded 10% money with their core money.

Brad Weimert: Yeah, right.

Garrett Gunderson: And it destroyed them. Because I’m like, whoa, you’re over the wrong phase and you’re trying to do things. It’s like going to the gym, never lifting, and seeing someone lift heavy weights and think you’re going to lift those heavy weights. There’s steps to get to those weights and it takes strength over time.

Brad Weimert: That’s a great analogy. One of the things that I like about your stuff in general, Garrett, is that you have these concrete frameworks and very convicted beliefs around the frameworks, but those basic structures that are like, no, these are the building blocks and systems are– I think even if the building blocks and systems are flawed in some capacity, having a framework and structure to follow that is flawed is far more important than having no framework at all.

Garrett Gunderson: The biggest flaw with most people’s framework is that they think passive income is from being passive, not active. The more active you are up front, the more passive your income can become, but people want passive from the beginning, therefore, they chase risky investments and highest return. Like, let’s just think about it. Just from a supply and demand standpoint, why would I be able to just go put money into something right now that would yield me? Like, I meet people that are like, dude, I found this guy’s doing options. He’ll make me 10% a month. I’m like, fantasy, never going to happen. I can promise you’re going to lose 100% of it. And I’m like, let me just show you, and I’ll pull out a calculator on my phone. I’m like, let me put 10% a month in for 30 years. Tell me the smallest number you would put into this. And then I’m like, tell me what this number is on the calculator. You can’t read it because it’s not a real number. It’s more than the money supply. I’m like, it’s just we want to believe the fantasy of the story more than we want to believe the work that goes into sustainability.

Brad Weimert: And I think one of the questions for that is, anytime you get one of those traditionally outsized return numbers, the question is for how long? And almost, always, when somebody gives you a number like that, if you are patient, and one of the things that Justin and I have talked about quite a few times is, and I think I probably have adopted this from you, is when somebody puts pressure on you on a deal, I’m out. Like, if you have an urgent deadline, I’m out. I just, I’m out. Okay.

Garrett Gunderson: I like that because it’s like you don’t want to be rushed.

Brad Weimert: No. I will not.

Garrett Gunderson: I think maybe rushed, right? I’m also like, if they can’t explain what they’re doing in a paragraph or less, it’s fraud.

Brad Weimert: And so, that’s one of the things that I’ve gotten from you is, I think, actually, the last time we recorded on Beyond a Million, you said, if you can’t break down your investment strategy in one page, I’m out.

Garrett Gunderson: And that’s like, I think I learned that from just hearing Warren Buffett talk and he made one of his biggest investments off a one-page document and it was in the 90s where everybody’s bringing him internet deals. And internet stocks aren’t even around anymore. Back then, there was a thing called an internet stock and they were like, this guy’s an idiot. He’s missing the boat. But he’s like, no, it can’t be described in a way that makes sense, so I’m out.

Brad Weimert: I don’t get it.

Garrett Gunderson: Right.

Brad Weimert: I can’t invest. If I’m under duress, if you are peppering me, if you are harassing me to get this done, how can I make a decision that’s a non-emotional decision?

Garrett Gunderson: Risk is in the investor, not the investment. There’s just risky investors out there. Some people are fantastic at real estate. Other people, they should never do anything with it. Some people are good at business, other people aren’t.

Brad Weimert: Well, let me say that another way too, because some people are fantastic in real estate and have a very high risk profile. And some people are fantastic in real estate and they have no risk profile or very low risk profile, and they can both be great. But if you aren’t aligned with one or the other and you don’t understand that you’re getting into high leverage, risky real estate proposition, then you probably shouldn’t do it.

Like, I have found myself in a situation, I’ve found myself in all those buckets, right, where you have somebody that has a good track record in real estate, but the way that they operate is misaligned with how I want to operate. And if you can see that on the front end and you can be patient enough to understand that, then you can pull away from it and say, I’m not going to get involved.

Garrett Gunderson: The cabin that you came to, I knew it was a good investment because I know the area. I’d been researching areas around there for like the ideal cabin for 10 years. The reason I bought the second one, it wasn’t for sale. We just started hosting barbecues at my place and asking, hey, do you know anyone that’s going to sell? And he is like, well, in three years. I’m like, what if I bought it now? And, they had rent it to you, right? Like, it wasn’t even on the market.

And so, it’s Mongolian Plumbing. So, this is what Mongolian Plumbing is. The Mongols go to Russia, they’re fighting a war. And they see toilets that you could flush and they’re like, “Damn, this is amazing.” So, they steal the toilets, get them home. They didn’t understand the plumbing. And that’s how a lot of investors are. They don’t understand all the unseen factors that make it sustainable.

Brad Weimert: I love that. It’s really good. I want to highlight something else and all. Now, I’m just like fluffing both of you, but like, legit, there are great things that I’ve gotten from knowing both of you from a financial perspective, great things from a relationship perspective, of course. But I was hanging out with Justin years ago, and we were talking about the– I can’t remember if it was specific to this deal or not, but I’m driving around in COVID, beginning of COVID, and I see this empty lot for sale, like f*cking downtown Austin, like, downtown, downtown. And it’s “overpriced.” And I see it and I’m like, “I need that. I buy it.” So, I buy it right away.

The neighboring lot, he had segmented a giant lot and he had segmented and sold half of it, and there was somebody in between. It doesn’t really matter. But the other lot, “wasn’t for sale.” And Justin said, “Well, do you have a relationship with him?” And actually, it wasn’t this deal, you told me this years earlier, but he said, “You need to build a relationship with this person.” And I learned it because, actually, I did this exercise with another person that didn’t go anywhere with, and it was like this 85-year-old guy, I was trying to buy his building. And so, Justin was like, we’ll build a relationship with him.

So, I would go in and hang out with this guy. That one went nowhere, but I wanted this lot next to mine. So, I spent two and a half years drinking sh*tty beer and whiskey with a neighbor and ultimately bought his lot. And it took a whole bunch of bizarre conversation, nuance, but it was relationship. And he wanted it to go to somebody that he liked, respected, trusted. And it took that time to build the relationship. And there is the adage of like, everything’s for sale at the right price, but it’s everything’s for sale with the right person also, right? It’s not just the right price, it’s the right terms. And those terms include the relationship that you have.

Garrett Gunderson: Yeah. I wouldn’t have got the house that we’re in now if it wasn’t for that, because my wife’s best friend is in our neighborhood and knew the person selling the home and…

Brad Weimert: It’s a nice in.

Garrett Gunderson: And I was like, and when we were the first ones to walk through the home because we literally decided the night before we’re going to sell the other house and this one came up. So, we immediately went and it had a swimming pool in it. And so, my kids had a swimming shirt. So, I’m like, I’m using my comedy charm. I’m going hard, but it was during a time where everything was going for more than was being asked. An investor offered them cash, and I was going to finance, but it was because of my wife’s friend being like, do you really want this to go to an investor in this neighborhood? Or do you rather go to a family?

Brad Weimert: Oh, damn.

Garrett Gunderson: I know the family. And so, we ended up…

Brad Weimert: And that made the damn…

Garrett Gunderson: The difference, right?

Brad Weimert: That’s wild. That’s wild, because usually cash just takes it.

Garrett Gunderson: And I just, yep, man, I’ve definitely like as– when we walked and saw you, I was like, all right, I’m going to turn on all the charm in the world. Like, first off, she didn’t have kids, so my kids were stressing her out. So, immediately, it was like, tomorrow, I’m like, get the kids, get them away from her, and I’m just going to talk to her. And yeah, we built a relationship.

Brad Weimert: Well, that’s a big…

Garrett Gunderson: She was the owner and realtor, which helped.

Brad Weimert: So, this is like a fundamental sales and marketing tenant, which is know your audience, right? And so, this applies to so many things in life, but this is a really good thing. When you’re going to any negotiation, if you don’t understand the person that you’re trying to negotiate with, and negotiates, in this context, sounds kind of like a dirty word, but like, if you don’t understand the motives and desires of that person, how could you possibly help them get what they want?

Justin Donald: And the values speak volumes to like, what do they ultimately want?

Brad Weimert: Well, and that’s why I wanted to unwind the life negotiation because the word negotiation can be dirty. But like, really, if you look at it the other way, which is what you just said, which is how I look at it…

Garrett Gunderson: Doesn’t have to be antagonistic.

Brad Weimert: No. Look, there’s no way for me to create a win-win-win if I don’t know what your win is, right? And so, I can’t do that until I know who you are, what you’re about, what your values are, and what matters to you. And I might, by the way, find out that your values are so stuffed off of mine that there’s no win for us, right? And then, okay.

Garrett Gunderson: And it’s good to know that you’re not just all in cash. You bought some land.

Brad Weimert: Well, I have a bunch of land.

Justin Donald: Well, one thing about you, Brad, is you generate your thesis. You do a lot of diligence, you do a lot of market research, and you develop a thesis on what you think it’s going to be, and then you go two feet in. And that has served you really well. I’ve seen it over and over and over. And so, yeah, you might be sitting in cash more than you want, but I also know that you’re good at deploying that cash when you finally find what it is that just really, your intuition tells you this is it.

Garrett Gunderson: I know people that wait for the deal and find it and stay patient, there’s an article written in the New Yorker by Malcolm Gladwell. I don’t love the title. It was called Predatory Investing, and he was talking about Ted Turner and how Ted would sit on piles of cash and then buy when everything was in distress and would even reacquire businesses he sold because then they would get into trouble. He called it– but it was like the returns he was getting versus everybody else because he was willing to be patient and wait for the right deal, well, served him.

Brad Weimert: So, two things, one, you have a ton of leverage when you’re in cash, right? So, sitting in cash, being, like you said, you played it well to be able to buy something when somebody else came in cash.

Garrett Gunderson: I bought both of my cabins for cash. And I had a lower offer, $50,000 less than the person that they didn’t get the cabin to. I can close in five ways. Okay?

Brad Weimert: Yeah. So, the other side of that that I want to highlight is just like the notion of predatory investing, I think that’s a great headline, right, and catchy and whatever, blah, blah, blah. But like the fact of the matter is it would just be stupid to buy it at the top of the market. When you have a better macro approach and you can see it, it is just smarter to sit on it and wait. And in no way, if you do it right, in no way, does it have to be a win-lose in the situation when the market’s down and somebody has pressure and needs to sell? You can actually buy over market in that situation where they get a better win than they possibly…

Garrett Gunderson: Lost the whole thing.

Brad Weimert: And you get a better deal because you bought it at that time.

Garrett Gunderson: The worst-case scenario is real estate is it goes to the bank, because that’s going to be an REO death trap that takes forever. And if they get something versus nothing…

Brad Weimert: Well, but that can go into the predatory consideration. What I was getting at was like, yes, and you can at the same time offer them more. And you can still create a win where like they’re getting more than anybody will offer them right now, and they don’t go…

Garrett Gunderson: And they get out of their stress.

Brad Weimert: And they get out of their stress and they get a f*cking killer deal and you got a killer deal because of the timing. And I think that’s a beautiful reality if you have the thought process to do it.

Justin Donald: And now, could be a great time for that with interest rates high, asset values are lower. There’s less transactions taking place. There’s a lot more negotiating ability.

Brad Weimert: 100%.

Justin Donald: And a lot of people are getting squeezed right now. You may not read about it, but I know tons of people that are financially pinched. They owned assets. Now, their assets own them. They did it with aggressive leverage. Now, they can’t cash flow it. And not just like big commercial properties, I mean, we’re talking just like too many private residences or too many, whatever.

Brad Weimert: At every wealth category too. So, you can have somebody that has one house, you can have somebody that has 10. But at every category, they could have just been overleveraged or their lifestyle could have spun out of control or the business could have been down, whatever. There are tons of these circumstances.

Garrett Gunderson: I know people that bought in Puerto Rico after one of the major hurricanes. And now, I mean, they bought properties for two and a half million that are worth 10, because everybody’s like, ah, I don’t want to touch that. But that’s the time that they’re like desperate and they want help. And if you can help them…

Brad Weimert: Well, and you said something that I think is important, and I don’t remember the words, but basically, terms is what I heard. And that is right now, we’re in a place because interest rates are high that so many things you can suggest owner financing, you can suggest, instead of me going out to a bank and getting a loan, the person that owns the property might be willing to just work out a deal where I just pay them for a while. And I will pay them less than if I mortgaged it through a bank for some period of time and they will be happy with it.

Justin Donald: And it’s non-recourse on you.

Garrett Gunderson: And it doesn’t show up on your credit or credit rating, yeah. Yeah, it’s powerful.

Justin Donald: The higher the interest rate, the more likely you will see seller finance. I mean, that is one of the big wins of this time, this season that we’re in as you’ll see, way more seller finance. I’ve done a bunch of it.

Garrett Gunderson: And you’ve got people that bought pre-2023. I mean, there’s some amazing interest rates on there.

Brad Weimert: Dude, I’m not going to do this because it’s still egregiously priced, but I just looked at a property on Lake Austin. And Lake Austin is unique because there are 240 homes in Lake Austin. It’s limited, 240.

Garrett Gunderson: Just really limited.

Brad Weimert: And you’ve got all this big money coming in for all the tech companies, et cetera, et cetera, right? And 240, historically, you might see.

Justin Donald: And boat slips are even less than that, right?

Brad Weimert: It’s way less, less than that. So, boat slips are now, you cannot put them in.

Garrett Gunderson: Yep, you have to have grandfathered in.

Brad Weimert: You have to have them grandfathered in. So, boat slips are super valuable. People will buy boat slips for $1 million, $3 million for a f*cking boat slip. Yeah, yeah, yeah. So, I look at this lot and it’s like, the trick with Lake Austin is, it’s the closest lake, it’s a river, but it’s the closest lake to Austin, and the closest area is called Terrytown, and it’s legitimately eight minutes from downtown. So, you can have a lake house where you’re actually still living in the community.

Now, the next chunk up is like 15, 20 minutes from downtown. Now, if you go to the other side of the lake, it’s 25, 30 minutes from downtown, and then you go up a little further and it’s 35, 40 minutes. Now, you could say those are all nominal. They’re not really. When you think about lifestyle, eight minutes, you can be there in and out in the same day. 25, now we’re like, yeah, you can be in and out same day. 35, 40, you’re looking at kind of like a weekend thing. Maybe, it depends on your lifestyle, right? But I looked at this house and somebody bought it– sorry, not house. It’s an empty lot in Terrytown. So, this is like the most desirable place you could possibly be on Lake Austin. Eight minutes from downtown at tops, tops. They bought the lot two years ago for 13 million and they bought it cash.

Justin Donald: Wow.

Brad Weimert: Here’s the thing, and this is why you need to know your buyer or know your seller, know your audience, right? Bought it for 13 million, but they bought it cash. Now, that tells me things, right? They also don’t live here. They wanted to develop the property. They went through all the sh*t to do it, blah, blah, blah. Now, it’s listed for 11. So, they’re just trying to get rid of it.

So, you look at these little signs and you say, “Okay, well, there’s some leverage here.” And then you think, okay, they’re trying to get rid of it, what do they need it for? And that’s a question, I don’t know. Will they finance? Will they not finance? Now, I still think that that property in this current market, 11 million is out of control for what it’s worth, however…

Garrett Gunderson: Undeveloped.

Brad Weimert: Undeveloped.

Garrett Gunderson: Vacantly.

Brad Weimert: Oh, it’s also limestone, not a flat lot. You have to do things, but– and if you actually want to make money on this thing, you really need to build it out to the fullest. You go highest and best use, right? Highest and best use in this thing is probably building like a $25, $30 million place. So, now, you’re in just a different category of what you’re building, right? But not my play right now. Not my play right now. But you look at these things and you think, okay, if you just know the extra pieces of the person to negotiate the deal, the deal totally changes.

Garrett Gunderson: Yeah. Great points. I feel like that’s a great ending point. Know the person, get to know their situation, and gives you some eyesight into things that you otherwise maybe wouldn’t have known that another buyer wouldn’t know. I love that. That’s good. And I hope at some point, you buy that property on the lake.

Brad Weimert: I will. It’s probably not that one right now, but unless you want buddy up on it.

Garrett Gunderson: That one’s tough. I would rather take a nice home already done, already has the boat slip. Just, it’s legit when I told her. I was talking to the seller where they built, yeah, the realtor. And I was like, I don’t need an hour right now because whatever you think, you’re going to pay for a building.

Justin Donald: That’s good.

Garrett Gunderson: This is fun, boy.

Justin Donald: This is awesome. Okay, we could do it. Thanks for coming into town, Garrett.

Garrett Gunderson: Thanks for having me. Thanks for hosting.

Brad Weimert: Always good to see you.

Garrett Gunderson: Look forward to a meal tomorrow.

Brad Weimert: Yeah. We will get Justin there.

Justin Donald: Oh, I think I can do it.

Brad Weimert: Awesome.

Justin Donald: I think so.

Brad Weimert: Love it. Till next time.