Perpetual Wealth Strategy and Real Estate Part 1

About this Episode

The world of real estate is a dynamic one, constantly evolving and adapting to the changing needs and desires of individuals. This episode delves into the intricacies of how we interact with real estate, the importance of education in this field, and the potential impact of technology on the industry.

Key Takeaway Timeline

  • 01:07 Who is Gary Pinkerton, and why are his insights important?
  • 02:56 What will you learn in this three-part real estate series?
  • 05:06 Why are we so intrigued by real estate?
  • 10:28 How human intuition and creativity shape the value of property
  • 14:48 How the Perpetual Wealth Strategy empowers you to be more efficient with your real estate
  • 19:14 Why real estate is an important financial topic now and in the future
  • 22:32 What’s coming up in the next episode

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01:07 Who is Gary Pinkerton, and why are his insights important?

Patrick Donohoe: Your journey continues now. Hey everyone, this is Patrick Donohoe. Thank you for joining us for a three-part podcast series on real estate titled “Real Estate Revealed: Property, Possibilities, and Profit.” I’m joined by a really special guest, a dear friend and a Wealth Strategist at Paradigm Life, Mr. Gary Pinkerton.

Gary Pinkerton: Thanks for having me, Patrick. It’s always an honor to join you. I genuinely enjoy our conversations and love being at the Home Office of Paradigm Life. Discussing real estate is my favorite topic.

Patrick Donohoe: It’s fascinating how our paths crossed. Over a decade ago, you showed interest in real estate towards the end of your military career. You delved deep into the subject, consuming podcasts, books, and more. We eventually connected through an advertisement on a real estate investment podcast, attended a summit together, and had a fantastic time. It feels like it’s been a significant journey since then.

Gary Pinkerton: Absolutely. When you mentioned my “interest” in real estate, I initially thought you were referring to properties I owned. But in reality, I didn’t own any real estate back then; I was just deeply interested in it. This journey over the past 12 years has been incredible. It’s done exactly what I hoped for and will be the focus of our podcast series. Real estate has been foundational for me. It’s granted me agency in my life, enabling my family to achieve our dreams and financial goals. Everything we’ve accomplished has its roots in real estate. It’s not some magical formula; it requires hard work and understanding. But for me, this was the starting point, and I hold immense passion and love for this topic.

02:56 What will you learn in this three-part real estate series?

Patrick Donohoe: The purpose of this series is to provide education on our unique philosophy and perspective on real estate, which we’ve found most people don’t share. Over time, working with clients, we’ve realized the need for this understanding. In the first episode, we’ll discuss the fundamentals of real estate and property. In the second episode, we’ll delve into personal residences. This topic applies to everyone, regardless of their background. We’ll explore the various philosophies and perspectives people have about home ownership, renting, down payments, and mortgages. Given the myriad of opinions out there, we aim to offer context, share our principles, and provide insights based on our experiences over the years. The final episode will focus on real estate investment. This is where our paths initially crossed. There’s a lot of intrigue in this area. People often see the potential for significant gains in real estate, but there are also considerable risks. I’ve been through two real estate cycles, and while there are many opportunities, there are also significant downsides. We’ll provide a high-level overview, offering context, perspective, and education on types of real estate investments, how to get started, and what to watch out for. It’s going to be an informative series.

Gary Pinkerton: Absolutely. This series is packed with fundamentals. It’s crucial because, in many areas of life, people often act on buzzwords or half-truths without the full picture. They might hear something and take it at face value, sometimes even risking their family’s wealth based on incomplete information. It’s vital to understand the reasons behind real estate involvement and to determine whether it’s a sensible investment or even if owning a home is the right choice.

05:06 Why are we so intrigued by real estate?

Patrick Donohoe: Let’s begin with the fundamentals, the foundational principles of property or real estate. In our discussions preparing for this podcast, we realized that everything is essentially real estate. Whether it’s in the physical or virtual world, it all happens on some form of property, even if it’s intellectual property. So, let’s break it down. What exactly is property? Why has real estate been such a point of intrigue for people throughout history?

Gary Pinkerton: One of the key realizations we discussed is that everything occurs on property. Now, I’m more of a practical thinker, but sometimes I delve into philosophy. When you ask people nearing the end of their lives about their most cherished memories, they often recall experiences with others. We’re constantly advised to prioritize experiences over material possessions. This ties back to the concept of property. Think about significant events in history, like 9/11 or the Challenger explosion. People always remember where they were when they heard the news. Our minds capture moments in pictures, and these experiences, which are so valuable to us, always occur on some property. Whether it’s a memory of being at a store, at home, or somewhere else, it’s all about the location.

Patrick Donohoe: I recall a book I read years ago, “The Mystery of Capital” by Hernando DeSoto. He delved into property rights and title strategies, especially in emerging countries. The book highlighted how property is essentially an extension of people. As you mentioned, our most cherished experiences happen on property. This creates a high demand for property, leading to exchanges where we pay for its use. Whether it’s dining at a restaurant, visiting Disneyland, or going to the movies, part of what we’re paying for is the property. This understanding has sparked revolutions in the past. In the old world, only a select few could own property. Philosophers like John Locke, during the Enlightenment, emphasized the importance of property rights. Locke’s philosophy influenced the Declaration of Independence. Originally, it was about life, liberty, and the pursuit of property. There’s a significant appeal and demand for property, and understanding this can create opportunities. The profit margin between owning property and what someone else is willing to pay for it can lead to gains.

Gary Pinkerton: Exactly. In a free world, exchanges of goods and services, which are essentially property, must be win-win. When we talk about real property, like real estate, there has to be a value exchange for transactions to occur. Whether it’s renting a place, buying a house, or even having a picnic somewhere, there’s always an exchange of value. If it’s not mutually beneficial, the exchange won’t happen. 

10:28 How human intuition and creativity shape the value of property

Patrick Donohoe: Going back to Hernando de Soto and his book, “Mystery of Capital,” many people aren’t aware of the origin of the term “capitalism.” It actually stems from the word “cattle.” A cow, in its basic form, has various uses. But without human intervention, creativity, and insight, a cow would just be a cow, perhaps used mainly for meat. However, with human ingenuity, we’ve found multiple uses for a cow – from leather to bones and beyond. Now, consider land. In the early pioneer days of the U.S., people risked their lives to head west and acquire property. They weren’t just seeking land to sit on; they saw potential – to farm, to build, to establish a life. Take, for instance, the building we’re in right now. We’ve been here since 2021. It’s in a previously rundown industrial section of Salt Lake City. A Denver group saw potential, bought the land at industrial prices, and transformed these warehouses into co-working spaces. Now, they’re charging significantly more because of the improvements they’ve made. This building, with its brick walls, steel beams, and glass, is a testament to human vision and creativity. It’s a space that hosts events, like parties for the NBA All-Star Game and offers various amenities. It’s a prime example of how humans can take something basic, like a cow or an old building, and transform it into something of greater value.

Gary Pinkerton: That’s a great point. The concept of “highest and best use” in real estate isn’t static. It evolves based on circumstances and human innovation. For example, my town recently experienced a hurricane, leading to shifts in property usage. Some properties transitioned to short-term rentals, while others became staging areas for construction. The definition of “highest and best use” is dynamic, and it’s humans who drive these changes, optimizing our capital and resources.

14:48 How the Perpetual Wealth Strategy empowers you to be more efficient with your real estate

Patrick Donohoe: What we’re emphasizing in this conversation is that we’re all intertwined with real estate in one way or another. At Paradigm, our specialty is the Perpetual Wealth Strategy. Our goal is to help individuals optimize their wealth and achieve maximum financial growth with the utmost certainty. This involves understanding and controlling your behavior and interactions with various financial aspects, particularly real estate. The more educated and dedicated you are to understanding these principles, the more influence and control you’ll have, reducing the risks associated with financial decisions. 

Gary Pinkerton: Everyone interacts with real estate, as we mentioned at the beginning. Our role is to help individuals use their resources, whether it’s money or other assets, more efficiently. When I first met you, I had already researched how the wealthy have accumulated and maintained their wealth over time. This involves being efficient with taxes and safeguarding resources during crises. It often boils down to overfunded high cash value life insurance and owning real property. Wealthy individuals either became rich by maximizing the use of real property or they stored their wealth in real property due to its enduring value.

Patrick Donohoe: Looking at our clients, they come from various backgrounds and life situations. Our advice is rooted in principles that apply universally, rather than specific real estate nuances. Real estate is in high demand because it’s integral to our life experiences. It offers tax benefits, leverage opportunities, and diverse uses. Just think about Airbnb; a decade ago, it was just an idea, but now it’s revolutionized how we use our homes. Especially in recent times, with financial challenges and layoffs due to events like COVID, people have found innovative ways to use their real estate assets. The availability of capital and efficient mortgages also presents opportunities in real estate. The essence of the Perpetual Wealth Strategy is to educate and help individuals find opportunities to interact more efficiently with real estate. Does that make sense?

Gary Pinkerton: Absolutely, it does. Just as the “highest and best use” of a property evolves, we as individuals also change. This isn’t about finding a one-size-fits-all solution and sticking to it indefinitely. As our wealth grows and as we age, our interactions and needs related to real property will shift.

19:14 Why real estate is an important financial topic now and in the future

Gary Pinkerton: When we take a step back and view this from a broader perspective, the significance of this topic becomes clear. We’re not going to have a three-part series on automobiles, for instance. Real estate stands out primarily because of its universal need. While artificial intelligence is remarkable and will continue to evolve, I don’t foresee a time soon where it will replace the need for physical property. 

Patrick Donohoe: Despite the rapid pace of innovation, which is fantastic for efficiency and creativity, there are many roles in business that could potentially be replaced by AI. This isn’t about eliminating jobs but rather elevating people’s potential. By embracing technology, individuals can enhance their creativity, education, and discover new ways to add value, rather than sticking to outdated methods that might soon become obsolete.

Gary Pinkerton: Absolutely. Real estate represents a significant investment for everyone, whether it’s your primary residence or an investment property. Given its typically illiquid nature, making the wrong decision in real estate can set you back for over a decade. It’s crucial to make informed choices. 

Patrick Donohoe: To sum up our discussion, the concept of property is truly intriguing. The rapid pace of innovation and the incredible creativity we witness in various fields, from graphic design to entertainment, all take place on property. Regardless of technological advancements, the relevance of property remains constant. Even if we were to colonize Mars, as Elon Musk suggests, we’d still be dealing with property.

Gary Pinkerton: Exactly. Ownership of property is foundational to capitalism, freedom, and our country’s values. The World Economic Forum’s recent statement that by 2030, people will “own nothing and be happy” seems contradictory. I believe, and I think you’d agree, Patrick, that happiness and ownership are not mutually exclusive. In fact, they’re intertwined. Understanding how to navigate the realm of property ownership is vital for our families, our futures, and our visions.

Patrick Donohoe: I couldn’t agree more. Owning property is not just about the physical space; it’s about securing our freedom, our rights, and our future. It’s essential to grasp this concept for the sake of our families and our aspirations.

22:32 What’s coming up in the next episode

Patrick Donohoe: In our upcoming episode, we’ll delve into an intriguing topic, which is essentially where you lay your head. Whether it’s through renting, owning a home, living in an RV, a car, or even camping out in a tent, everyone has their unique preference. This choice plays a significant role in our lives. It’s crucial to understand the factors that influence where we live, the reasons behind our choices, and the best practices for purchasing a home. I’m eager to explore this topic further. And, let’s not forget, in our third episode, we’ll shift our focus to real estate investment. 

Thank you, everyone, for tuning into this first episode of our three-part series. We look forward to continuing this discussion in the next episode.

About Patrick Donohoe

Patrick H. Donohoe IAR, AIF®, RFC®

Over two decades of experience in the financial services industry, Patrick has seen the challenges people face in managing cash flow, risk, and investment performance – especially for business owners, real estate investors, and entrepreneurs. The struggles lead to continuous uncertainty and unease, – negatively impacting the areas of life where they have the most significant impact.

At Paradigm Life, where Patrick serves as CEO, he leads the company mission of helping Clients overcome these challenges through proven, economically sound, and time-tested strategies. Since 2007, Paradigm Life has guided over 8,000 clients nationwide to new levels of financial independence, helping them create and follow a path to thrive personally and professionally.

Patrick’s journey into the financial industry was unique. Growing up in a middle-class area in central Connecticut, the child of two teachers, he wasn’t taught much about money, investing, or business. His interest in finance was sparked by studying Economics & Statistics formally and reading Rich Dad Poor Dad in 2002, which opened his eyes to the financial potential of all human beings.

Patrick’s first real taste of personal finance came during college, where he worked in a call center that provided debt consolidation strategies as an alternative to bankruptcy and, later, in the mortgage industry.

He founded Paradigm Life in 2007 and, like many during the 2008-2009 financial crisis, learned firsthand about the unpredictability of the business environment and economy. That period tested him but also shaped him. Amidst the struggle, he worked tirelessly, providing consultations and webinars to help people navigate the financial storm. In 2011, those efforts started to bear fruit, allowing him to expand his team and build a strong company culture.

This journey compelled Patrick to write “Heads I Win Tails You Lose – A Financial Strategy to Reignite the American Dream” in 2018. The book encapsulates his financial philosophy and the wealth strategies Paradigm Life uses with Clients, rooted in his career experiences. To date, the book has sold over 60,000 copies.

Patrick also co-hosts several podcasts with over 1,000 episodes combined.

As a veteran of the industry, Patrick gets the challenges Clients face. His personal and professional experiences have equipped him to guide others through the complexities of personal finance. While he is passionate about numbers and objective analysis, he strives to prioritize making financial theories accessible and practical for Clients without getting lost in the complexity.

On a personal note, Patrick has been happily married since 2003 and has three children. He’s a Utah Jazz fan, plays Ice Hockey, and loves spending time in the mountains with his friends and family.

About Gary Pinkerton

Gary Pinkerton

RICP, Wealth Strategist

Gary Pinkerton is a Navy veteran, Wealth Strategist, and Retirement Income Certified Professional (RICP) who is an avid real estate investor and business owner who has always been passionate about personal financial management. Gary grew up on a dairy farm in Illinois, where he learned the importance of hard work, high standards, and integrity, before embarking on a 25-year career in the US Navy’s Nuclear Submarine program. Now living on the Florida gulf coast with his wife, Sue, and two sons, Jake and Ryan, Gary improves people’s lives by teaching The Perpetual Wealth Strategy, originally learning about it when he became a client of Paradigm Life back in 2011

If your financial interests are in real estate & small business, or you simply want to learn from the best, schedule a free consultation with Gary today.

You can learn more about Gary by visiting his website or listening to his exclusive podcast Gary’s Gulch.

A Wealth Maximization Account is the backbone of The Perpetual Wealth Strategy™