Speaker: 00:00:00

when you're beaten down and you have nothing, I guess you can either live on Social

Security or you can decide to take a different path.

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when we're talking about taxes and our incomes, sometimes we have to remember that it is

part of that strategy is how do we make money in one way it is reducing our taxes as much

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as possible.

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I mean that's true for all of us, but particularly individuals who are in high income

brackets.

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are spending anywhere from 40 to 50 percent of their income without their choice and

giving it away to the IRS.

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And that's no way to build your wealth.

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You have to develop tax strategies if you're going to develop

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Alan Lomax joins me here today.

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You can learn what he can help you with by heading over to thegreattaxescape.com.

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I'm going to have that as a clickable link in the show notes.

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Really appreciate your time here today, Alan, as we talk about a number of things.

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Thank you, Jack.

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It's wonderful to be with you today and your audience and looking forward to an

interesting and enlivening conversation.

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Well, we're going to kind of do a truncated version of this because everybody likes to

hear everybody's origin stories.

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But you likely over your three decades of experience here now, I'm sure you're kind of

tired of telling everybody how you found your way into real estate.

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But for those who may not have heard it, how did you find your way here?

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Well, I expect that many in your audience are not unlike I was, hardworking, high

achieving professionals, doctors, engineers, architects, entrepreneurs, so on and so

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forth.

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People who've built impressive careers and are still wondering why true freedom feels just

out of reach.

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Like me, maybe you're doctor and engineer.

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Someone who's given years to mastering a craft and still it feels like you're galloping

hard but stuck inside some corral fenced in by taxes and time.

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You've built your expertise, your income, your reputation, but you're still trading hours

for a lifestyle that just doesn't feel like freedom.

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Well, I know how these things feel because I've certainly been there running

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full speed ahead doing everything I was supposed to be doing and somehow still just losing

ground.

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On paper, looked great, was terrific, my career was thriving and at the time my portfolio

was growing and I had a net worth higher than what I had ever really imagined that I could

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attain.

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So if you're a professional listening to these, you know that on paper things can look

wonderful.

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but that doesn't mean you're escaping anything.

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So I just worked harder and harder and then 2008, the crash hit and absolutely everything

that I had worked for and that I had built collapsed essentially overnight.

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But really and truly what vanished wasn't money, wasn't capital, it was a sense of freedom

and I lost my self-esteem.

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my agency, and I lost the belief that my efforts mattered and that I could make a

difference.

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I had shackled myself with this enormous weight of shame that was truly unbearable.

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And I built a life on intellect, on work ethic.

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on doing everything that was right and then suddenly it all felt like it was all nothing.

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But the most painful thing wasn't just losing that capital, it was really losing hope

because at my age, time was definitely not on my side and time is the only one asset you

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can't buy back.

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So that was the turning point and I think it's probably not unusual that rock bottom

points in our life are actually those major turning points.

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I think a lot of people struggled, especially in that 2007, eight, nine timeframe.

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And when you hit that low of the low, I mean, it just kind of your, your compass

completely goes off course, it's hard to even know if you even trust yourself, let alone

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what you think you should be doing.

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So eventually, and it took a long time, I found a mentor.

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Actually, it was a mentor who never actually said a word.

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His name was Doc.

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Doc was a horse.

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He was a thousand pounds of muscle, mistrust, and deep-seated trauma.

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He'd been hurt, and fear had become his language.

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You couldn't halter him, you couldn't really approach him.

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He was really a dangerous horse.

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So as I reflected on this, I realized, well, that's me, and that's where I am at.

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So when I lost everything, it was fear that took over.

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It was not just despair, it was fear.

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So I started to grip tighter on not...

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only money, but I controlled everything.

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I was deeply into the conditioned illusion that more effort will somehow bring it all

together.

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And I suspect many of my overworked, high achieving professional colleagues know this as

well, that we double down our effort and instead of redesigning the system that got us to

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where we were, we

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bring it all together with more work, which brings us more recognition, which brings us

more work, but it doesn't bring us any more money or security.

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So what happened with me and Doc, instead of me trying to force him into anything, I just

waited with him.

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I just stood still in silent, present, contemplation.

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And after some 20, 30 minutes or so,

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A shift started to happen.

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His eyes softened, his breath slowed, he lowered his head, and I simply slipped the halter

on, which was a symbol of trust.

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And in reflection, I understood wealth is really much like horses.

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It doesn't respond to control, it responds to trust and to confidence.

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You can't force it.

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So you have to create conditions for it.

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And that moment with Doc became that foundation for everything that followed.

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And eventually, for me, it's what brought about the great text, Escape.

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And it has changed everything about how I thought and what I had built next.

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the great tax escape.org.

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What would people find there?

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what's the end goal?

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Well, the end goal is, of course, for professionals to stop exchanging their time, effort,

and energy for money and to build and to utilize their incomes to build capital, to build

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the lifestyle that they truly want.

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There's a number of different ways, of course, to get there.

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think certainly one of the...

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big things about real estate and in the investment world in and of itself is that there's

all kinds of different shiny objects out there.

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And we have to choose a path that is the right path for me.

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And so the path that I chose was after a lot of investigation, a lot of working with

mastermind groups and different people, having my own podcast.

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I finally realized that the thing that I really need to be doing was to become essentially

what is a capital allocator.

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And so what I did is I put together a six-phase system that is the anatomy of how others

can do this very same thing.

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And this really began a five-year journey to building from scratch because I was in a

situation where I didn't have a choice but to build from scratch.

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If you're a high-income earner, you've got capital and you don't necessarily have to start

there, but that was where I essentially had to begin from.

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So phase one is what I did and it's what every rider needs is a herd.

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So I began to build my herd with trusted people who share my vision, my values, and they

became the operators, the advisors, the fellow investors who keep me grounded.

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I learned the hard way that independence without trust is

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just essentially isolation.

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So after the crash, I rebuilt from scratch and I began building a network.

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I've met with over 750 different operators, vetting each one until I found the handful

that I can work with integrity and who have a strong presence themselves and they know

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what they're doing.

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So.

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Anyone's freedom will rise and fall with strength of the herd.

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And if you're a doctor, a professional or whatever, you probably already built a network

for your career.

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So you know how to build networks.

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What you probably haven't done is to build a network that helps you to build your capital.

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And so that's the missing piece for many of us.

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And then phase two is

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really detecting the true stallions.

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Not every opportunity deserves our presence in our saddle.

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And that's why I built what I call the Dill Stallion Detector, and it's a 53-point due

diligence framework that separates the true thrill-breds from imposters.

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So in this phase, it probably speaks to those of you who are disciplined in your

professions already.

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So you know how to do that, but what you need is a system that takes you to where you want

to be and takes you through that due diligence process.

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And phase through is designing the range, which is the infrastructure.

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You need an infrastructure, the ecosystem, the entities, the banking systems, the

reporting, the CRMs, the funnels, the...

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investor portals, the management portals.

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All of these tools are essential really to any aspect of real estate investing, but

they're absolutely critical to capital raising if that is the path that you want to

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choose.

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So you can think of it like an architect.

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Financial designs are built for stability and beauty, just like an architect builds

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uh actual physical structures.

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So phase four is to run through the open range and this is the vehicle that puts it all

together and what we use is a special purpose vehicle that's designed for clarity and

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compliance and it gives us the necessary control to accumulate capital and put it to use

in a way that helps our investors

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to get better terms, better returns, rather than working individually.

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So you put it all together and it protects and also gives the IRS uh strategies that help

you to reduce your tax liability.

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And phase five is to guide with the compass.

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And this...

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is the Wells Dalyan campus, Compass, and with this it is the mechanism for alternative

investing.

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It's an educational program that relieves the anxiety that helps people to move forward

who've never invested in alternative assets to do so with knowledge that gives them the

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confidence and the security to move forward that they need.

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And finally, step six just keeps it all together.

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And this is the system that ensures consistent oversight, course correction when needed,

and gives us the metrics to reserves and to performance and to monitor all of that in a

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way that makes sense for us and our investors.

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So that's where the magic is, is really in the system.

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So that's where I got to, that's where anyone who wants to can essentially do the same

thing.

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Well, I think it's quite remarkable.

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Most people would bail ship at that point where they're, where they were having the level

of problems you were in, that timeframe.

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But in the end, looks like what you did was just kind of doubled down, build out the

systems and learn from that experience.

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I guess if I'd had a choice to go a different way, I probably would have.

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But when you're beaten down and you have nothing, I guess you can either live on Social

Security or you can decide to take a different path.

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And so I decided that just wasn't for me.

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But it wasn't like I was working alone, like I was developing that network.

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It was very encouraging network.

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mean, for instance, some of you may know Lee Yoder.

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He was a physical therapist in the healthcare field, worked hard at that, enjoyed his

profession, enjoyed what he was doing.

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But like me, he had realized that there was another way to go about it.

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And so he moved into multifamily.

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and developed a multi-family portfolio and is now living a very different kind of life.

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Or Fernando Angelucci, who was an engineer, the same thing.

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He looked at his profession as an engineer and goes, this is great and this is wonderful,

but there's a cap on your income no matter how high that income is.

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He took responsibility for that and utilizing his engineering background, he learned how

to do cost segregations, bonus depreciation, tax strategies to utilize that in the

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self-storage phase.

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And he's put together a technical framework that has given him the freedom.

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So we could go on with different examples like that.

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So it wasn't just me, but I had the examples of other people, other kinds of mentors,

other than just Doc the horse there to help me take me through that.

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So we take different paths and different professionals.

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We realize that when we're working hard,

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ah and working harder than ever but still fenced in by the IRS and structures that really

were not built for building wealth, then we can find our way out of those and we can find

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a way to run free.

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It's a simple truth, but it can change everything.

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It can change the course for any one of us.

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Just to remind everybody, if you like what we're talking about here so far, I would

suggest you check out Alan's website, go to the great tax escape calm.

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That again is going to be a clickable link in the show notes.

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It's important to note that this show only grows if you share it with an investor friend.

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So consider doing that.

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And if you're on watching us on YouTube, give us a like and subscribe.

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So Alan, you're kind of a uh

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just a correction there.

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It's it's dot org rather than docked dot com.

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Yes, no problem

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escape.org.

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I'll have that as a clickable link in the show notes.

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Alan, you mentioned, you know, now, because of, well, let's just face it, the because of

your age, you felt like you didn't really have a choice, you could either live on Social

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Security or double down and figure this out.

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I think it's given gives a lot of people in a similar situation, you know, like it when

when I got into real estate investing, it was simply because I realized there was no way

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for me to save to any kind of retirement, you know, in my W two, it just just wasn't going

to be possible, especially knowing how much you would actually need.

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Like, it's just a good example of you either react to pain, or

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over any kind of gain.

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what, could you talk a little bit about battling through that mindset?

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And it just gives us, gives people the inspiration that it's never too late.

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Like you could turn this around and you could really kind of find a path here towards some

sort of retirement.

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think uh part of that had to do with my history.

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mean, before 2008, I was investing in real estate and it was amazing.

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I mean, my net worth had grown substantially.

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I had freedoms I never dreamed that I would have.

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And so I had had that experience.

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under my belt and I knew what that felt like.

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And I knew that I wanted that back.

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It wasn't just that I didn't want to live on social security.

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I already knew what it was like to have the freedom and the choices to do that.

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And I think that that...

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Knowledge made a huge difference when it came to the fact that I had to start all over

again.

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I knew that I had done it once.

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I knew that it was possible to do it again.

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But it was also just that terror of living in that confinement of social security.

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I mean, there's people...

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who find tranquility and happiness in doing that.

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I just wasn't going to reconcile myself to this is my life because it was, and it's not

the money, it's the choices.

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It's the freedom, it's the opportunity.

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And I plan to live a very healthy life and

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until the day I die and so I want choices and opportunities.

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I don't know if that answers your question or not.

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Yeah, no, it does.

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Because, like I said, you know, it's just one of those things.

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I think social security is one of those situations where it's, it's, it's a lot of people

kind of resigned themselves to the fact versus anything else.

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It's almost a form of giving up financially.

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I don't know how else to put it.

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And maybe maybe I'm miss miss speaking in that regard.

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But

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There's a large chunk of the population that end up in that situation.

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So.

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they do.

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And I mean, part of that is that they've never been taught that there are options.

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They've never really been able to see beyond what's traditionally been put in front of

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Yeah, it's a they don't know what they don't know type situation.

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Yeah.

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It's much like you know, when I when you said your domain name, the great tax escape.org.

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That's a that's a great example of this because the if you want to call it the 1 % or or

whatever there is there's a number of people that are playing this this game that

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normal, most people just aren't aware of like, it's it's I compare it my wife mentioned it

just the other day again, how do farmers make money, they don't spend it.

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When when we're talking about taxes and our incomes, sometimes we have to remember that it

is part of that strategy is how do we make money in one way it is reducing our taxes as

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much as possible.

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I mean that's true for all of us, but particularly individuals who are in high income

brackets.

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are spending anywhere from 40 to 50 percent of their income without their choice and

giving it away to the IRS.

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And that's no way to build your wealth.

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You have to develop tax strategies if you're going to develop wealth.

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You know, when you were building, you could use the example from from the first time

around to the second.

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What has been one of the most challenging aspects of all of this?

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You gave us that list earlier.

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But were there any of those that are like some of the more daunting or harder, the harder

to kind of get over?

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hardest was getting out there and developing a network that was truly the most challenging

thing, particularly given the state of my mind and that I felt like at that point in time

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I really had no self-worth and I certainly had no network financially.

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And it was just challenging.

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It was the most challenging thing was deciding I am going to put myself out there again.

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And I did it by doing a podcast.

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those first episodes, I would hate to go back and watch them.

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They were pathetic.

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But the...

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The about them, it was a terrifying experience to open myself up to that and to begin

doing that process.

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So terror was the big challenge there, is just coming over that, overcoming that terror

and just getting out there and doing it.

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It was the biggest challenge.

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After that, everything else has fallen into place.

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oh without a great deal of difficulty.

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mean, my background is in organizational systems and so building systems comes pretty

naturally and I've had a lot of experience doing that.

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So I was putting myself out there and building that network.

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Hands down, that was it.

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It was just for having to face your peers again.

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What was the hold up there?

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Was it typically you blowing this?

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I don't want to say out of proportion, it kind of, sometimes it seems like the people in

our network are a bit more welcoming than we give them credit.

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It was me.

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The issue was me.

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It was an internal issue.

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I I put up all those fear barriers.

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were, I mean, everybody from the get-go, everyone who was on my podcast, as terrible as it

was to start with, were...

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were supportive, kind, helpful in every way, shape and form you could think of.

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The obstacle was not the people, the obstacle was me, myself and I.

246

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You mentioned earlier part of your, picking your stallions was, was to make sure that the

people were acting with integrity, I think was what you had said.

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Was there something that happened that kind of burned you in the previous run that made

you kind of fortify that piece of it?

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Not really, but it is just that in meeting with some 750 people, you just begin to realize

that people have different skill sets.

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And I wouldn't say that really, that narrowing it down to the people that I'm working

with, not necessarily that people are not trustworthy.

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I think by and large, most people are.

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But there are people who are just better established and who have track records to show

that they're established.

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so trustworthiness doesn't have to rely upon, oh, I think this is a good or this is a bad

person.

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The trust comes from

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seeing what the track record is, knowing what their performances are, and taking that even

a step further, are they willing to show where they've failed and where they've succeeded.

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And when they can do that, as well as show you that, we failed here, we learned from this,

that's trust building in and of itself there.

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And so that's the...

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In terms of what I'm talking about, in building trust, that's really what it is.

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It isn't that anyone out there is necessarily mistrusting or not trustworthy, I guess I

should say.

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It's just that there are operators out there who have an established record upon which I

can base my trust in them.

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Well, this time around, did you find, you know, maybe it's just because the experience the

first time, did you find anything easier, whether it's you mentioned funnels and CRMs and,

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some of those tools?

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Have you found some advancements in those in that realm that made things maybe a little

easier on the technical side this time around?

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Well, certainly in the last 10, 20 years.

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well, really the last 10 years, there has been a lot of advancement in the development of

CRM tools.

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You know, probably 20 years ago, I would have had to have done all of that on a

spreadsheet, and that's pretty challenging to keep track of that.

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Transitioning from that to online CRM's is like the difference between night and day.

267

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So yes, absolutely that makes it easier and then in the last couple of years the AI

applications have simplified so many many processes and integrated things that were

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Isolated from one another and pulling those integrations together

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simplifies so much about the entire systems building.

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So yeah, that's much easier than what it would have been some 20 years ago, that's for

sure.

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So if somebody goes to the great tax escape dot org, what type of information would they

find

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Well, there's a couple of things there that, you know, some people may find themselves in

the situation I was in.

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You may have to build it from scratch.

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And so that's probably really not the place for you, but if you have some capital and

you're willing to learn how to take that capital and to invest that capital, there's a lot

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of things that we can do for you if you go to thegreattaxascape.org.

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So for professionals who are busy,

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In the healing profession, designing, building, or leading, whatever it is, the system

does the heavy lifting for you.

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You don't have to start from scratch.

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It's the accumulation of every lesson I've learned, every structure, every vetted operator

and system that I've built.

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And by going there, we'll help you break free from the IRS corral.

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and help you to let your wealth run wild.

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And we do that through education.

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We do that through bringing these operators together, putting together the special purpose

fund of funds where we can collectively put capital together so that when we go to these

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operators, we get better.

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better terms, better returns for our investors than what they could do going directly to

the various different operators.

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So it's an educational system, it's investment opportunities, and when it comes down to

it, more than anything else, it's a mentoring uh system that helps you take the education

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and helps you overcome those personal obstacles, whether they're fear, whether it's

anxiety, whether it's just making those decisions.

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Is this the investment or is this the investment?

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There's a mentoring process there for everyone.

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Well, Dr.

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Lomax, this has been a great conversation.

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Again, I'm going to direct everybody to your site, the great tax escape dot org.

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You said you had a podcast.

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What's the name of that?

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Streams to impact.

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dreams to impact.

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I'll try to find that and put that as a clickable link as well.

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So you can subscribe to Alan's podcast there.

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But before we jump into the rapid fire and close out this episode, is there anything else

we should have tried to hit on?

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Well, you know, there's just not time to hit on everything.

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But I think that one thing that I always like to touch on, and that is really what is

wealth for?

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And is it just to spend money or?

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what is, what's really our purpose, what's our meaning, and how is it that we can take

that wealth and help us to thrive and to flourish.

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And Martin Seligman's research really points out that there's really five aspects to a

life that flourishes and that the

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Perma and it's just it's positive emotions, engagement, relationships, meaning and

achievement and bringing more of those into our lives gives us just the why for which we

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develop all of those, all of our wealth financially.

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Yeah, that's one of those recurring things in our in this podcast is is establishing your

why because it's the only only way to to drive you it's either pain or having a strong

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enough why in which to drive towards.

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Well, sir, this has been a fantastic conversation.

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Again, it is the great tax escape.org.

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And if you're ready, we'll jump into the rapid fire and close out this episode.

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00:31:21,667 --> 00:31:22,782

I'm ready.

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What lie do real estate investors often tell themselves?

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I think it's hard to narrow that down to one line.

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There's so many.

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I guess one of the big things is you can never have too much leverage.

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Then rents will always increase with value add.

318

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The exit cap will always be lower than the entry.

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Appreciation will take care of everything.

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With a good property manager, short-term rentals can be passive.

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And so all kinds of lies that we tell ourselves in real estate.

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And I've done all of them, so I know.

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I know.

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I've been there.

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If you could go back in time and give your younger self a piece of advice, what would it

be?

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it would be just be you.

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In the end, that's all we really have is ourself.

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And if we can't be true to ourselves, what do we really have?

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So yeah, just be you.

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And I wished I had learned that at 20 rather than 40.

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Do you have a book recommendation or what are you reading right now?

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00:32:30,558 --> 00:32:32,238

Well, yeah, I've got several.

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Carol Dweck, the mindset is terrific.

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And because without a mindset, we're just not going to grow.

335

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And Angela Duckworth, Grit helps you to put that mindset to work.

336

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And for investors, Brian Burke's book, The Hands Off Investor is a fundamental,

understandable book, real well-written book.

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for investors to really start understanding alternative investments.

338

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And finally, what process or tool have you implemented that has had the biggest

time-saving impact?

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Well, you know, when I first thought of this question, I thought, well, chat GPT.

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And then I thought, no, that hasn't really saved me any time.

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It's just given me the ability to cram more things into the time that I already have.

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So really the time saver is when I really learn to slow down, to become mindful.

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And I found this in the presence of Doc, and that is just to be presence and to appreciate

every present moment.

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And that's where the time saving is really at.

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Well, this has just been fantastic.

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00:33:42,561 --> 00:33:47,591

One last time, the great tax escape dot org clickable link in the show notes.

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Really appreciate your time, sir.

348

00:33:49,234 --> 00:33:51,037

This was fantastic.

349

00:33:51,546 --> 00:33:54,179

Well, it's been wonderful being with you, Jack.

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Wonderful podcast you have, and I've really enjoyed it.