Patrick Bet David Drops the FACTZ on the Future of America

FACTZ

FACTZ caught up with Patrick Bet David in NYC.

Transcript

00:00 Patrick, good to see you my friend.

00:02 Good to see you.

00:03 Good to see you in New York City.

00:04 Yes.

00:05 You have one of the most interesting jobs because for you it's similar to me.

00:07 When someone asks you what do you do for your living, you wear so many hats.

00:09 So what do you explain to someone when they ask you what do you do for a living?

00:12 I would say I'm an entrepreneur, I run businesses, I'm a podcaster, I'm a family guy, but I'm

00:17 a capitalist at the core.

00:19 So what is the main source of income for you would you say?

00:22 The biggest source of income.

00:23 Well, I sold the insurance company.

00:24 So outside of the insurance company today, I don't take any income away from valuetainment

00:27 today.

00:28 I'm not making any choices financially.

00:30 But everything we're making right now with Valuetainment and Bed David Consulting is

00:33 being reinvested.

00:34 Literally everything.

00:35 Into projects, other companies we're running, product development, buildings we're buying,

00:41 that's all reinvested.

00:42 But I've made a lot of good choices in my life financially.

00:45 So I live off of my money that I've made.

00:47 So what's the main goal?

00:48 Like obviously you keep, you know, what gets you excited?

00:51 What are you passionate about right now?

00:53 The vision.

00:54 I think there's real enemies going on today.

00:55 I think there's a lot of real enemies trying to divide people that typically get along.

01:00 You know, we may have differences on four different things and we can hash that out

01:03 and isolate those four things.

01:05 But we probably agree on 28 things.

01:07 I think we're focused way too much on the four, not enough on the 28.

01:11 And I feel like we're going to play our part in making sure we can synergize and unify

01:16 as much as possible.

01:17 So based on that answer, do you see political, you getting more into politics?

01:21 I'm not born here.

01:22 I don't have interest in governorship at all, any of the other jobs, but I will play the

01:26 role of a kingmaker for many years to come.

01:29 What age were you when you made your first million?

01:31 I was 28, 29, 30, late 20s when I made my first million.

01:36 Yeah.

01:37 And so, and you did that through insurance, correct?

01:40 Insurance, yes.

01:41 So what did you do with that million?

01:42 Like once you started making money, were you just kind of re...

01:44 I lived in a two bedroom apartment in Granada Hills.

01:48 I drove a Ford Focus with a quarter million in bank.

01:52 I stayed liquid cash.

01:54 I'm a guy that wanted a lot of savings because I was pursuing the vision long term.

01:58 So I wanted money to be able to reinvest.

02:01 So no, I played a very frugal life for many years.

02:03 So your advice to people financially, do you have one rule that you kind of live by that

02:08 no matter where you are doing well, medium sized income, low income, high income, what's

02:14 the best thing that you learned financially that you can get for just cash flow, even

02:18 cash flow?

02:19 What should people be doing with their money?

02:20 I don't really know.

02:21 I think the first thing is decide who you want to be in your life, how big of a life

02:24 you want to live.

02:25 And don't compare.

02:26 Meaning, if you're the supporting role, and that's what you do, go become a great supporting

02:30 role in the company, be so much of a value to the company that eventually get equity.

02:34 You get shares in a company.

02:36 And if the company goes public, it sells, you make money.

02:38 One of the best advice I got from a Russian businessman, my ex-girlfriend was working

02:45 for him 25 years ago, 22 years ago.

02:48 And I sat with him one day, I said, "What's the key to making a lot of money?"

02:50 He said, "Never work for a sexy company."

02:53 I said, "What do you mean?"

02:54 He said, "Never work for a sexy established company, because you're irrelevant.

02:59 If you get fired or you quit, they don't know who you are."

03:02 He says, "Go work for a smaller company, help it become big, be a voice, be a leader, own

03:08 a piece of the company, and eventually become wealthy."

03:10 So whether that's the life you want to live, or you want to build a company, operate a

03:14 company, that's a different life.

03:16 You're an investor, influencer, content creator, choose the route on how you want to make money.

03:22 Then get philosophically clear on your money.

03:24 Don't get too arrogant.

03:25 Don't get too cocky.

03:27 Don't get too reckless with the money you make and the money you spend.

03:30 Let's just say you have a big month, money comes in, don't go buy a watch you can't afford

03:34 because your monthly income is not the steady one.

03:37 But yeah, so pick and choose what kind of a life you want to live.

03:41 Then when it comes down to money, get your philosophies clear with finances, and then

03:44 do not be too reckless with your money.

03:46 I'm a guy that's cash is king philosophy.

03:48 When the Yankees called and had the opportunity to be minority owner, the only reason we could

03:53 get that done is because I have cash.

03:55 If I didn't have cash, the first thing they want to see is your finances.

03:58 So cash is king in my opinion.

03:59 Whether you're making 60 grand a year, or you're making 20 million.

04:03 Yeah, yeah.

04:04 Real estate market.

04:05 I see someone like me, I'm trying to go into place, but the prices have went crazy high.

04:06 And some people aren't getting paid enough to even afford those prices with inflation.

04:07 Any advice to people as far as what they should do?

04:08 As far as in the real estate game right now, and again, I know that might not be your expertise,

04:19 might not be a black belt on it, but you do know how to properly, you know financial freedom

04:26 in a way.

04:27 Well, I mean, here's what's wild.

04:29 So yesterday, interest rates were 30 or fixed for somebody with a 720 credit is 8%.

04:34 As of yesterday, a little over 8%.

04:36 What does this mean?

04:37 A year and a half ago it was 3%.

04:39 So we did the math.

04:40 If you want to get a $500,000 loan, a year and a half ago, at 3%, your payment is $2,100.

04:51 The same exact $500,000 loan, today, at 8%, is $3677.

04:57 Let me say this again.

04:58 From $2,100 to $3,700.

05:01 What the bank is going to do to where you find out if you can afford that income, you

05:05 take that income, you divide it by 36%.

05:09 So if you take $2,100, it's going to show $5,500, which means the bank's going to say,

05:13 do you make $5,500 a month to be able to afford a $500,000 loan?

05:16 That's how the bank is going to do the math.

05:19 Do you know today, to afford that same $500,000 loan, at 8%, went from $5,500 income to $10,000

05:26 a month.

05:27 People didn't double their income in the last year and a half, 80%.

05:30 So it's a very valid question you're asking.

05:32 So now you may say, well, people aren't selling their homes.

05:34 They're not dumping them.

05:36 They're not dropping it at 20, 30, 40% discount.

05:38 So why is that happening?

05:40 This is kind of confusing.

05:43 It's because people still have some cash.

05:45 People are saving their low interest rates that they have.

05:48 They don't want to sell a house, gain $200,000 in equity, and go buy another house at 8%.

05:53 That just doesn't make any real sense to do something like that.

05:56 But eventually, this is going to flip.

05:59 Meaning, the economy is eventually going to say, hey, you've got to either sell the house,

06:04 rents are going to stay here, or you have to buy a house, or you're going to be renting

06:08 for a while, so if we stay in this interest rate for too long of a time, people will become

06:12 minimalist, renting is going to go up, you're going to get more of these black rock companies

06:16 that are going to buy these bigger buildings and rent them out because they know you can't

06:18 afford to buy a house.

06:21 It's a very weird, weird economy today.

06:24 Cash buyers are buying houses, no problem.

06:26 Like commercial right now, property two years ago was an $89 million property in my area,

06:32 Fort Lauderdale.

06:33 Then it goes to $69 million.

06:35 Then $59 million.

06:37 Today they will dump that property at $32 million.

06:40 $89 to $32 million because eight buildings in many communities, you don't have the kind

06:46 of workers that they want.

06:47 People are working from home right now.

06:49 People are working from Zoom right now.

06:50 But eventually, this thing's going to figure itself out.

06:53 But it is a very difficult time for the average person to want to buy a house with the 8%

06:59 interest rate.

07:00 - You lived an insane life.

07:01 You didn't come with money.

07:02 Do you consider yourself even new money?

07:03 Not even new money, but you're a self-made guy.

07:04 I think people respect that.

07:05 What's something that you love to tell yourself, your younger self?

07:06 If you had three rules to tell younger people like that, maybe you learned on your way,

07:07 the most three important rules that you wish you could tell your younger self.

07:08 - It's a good question.

07:09 I would say my philosophies got clear when I figured out that I was going to be a business

07:10 man.

07:11 I was going to be a business man.

07:12 I was going to be a business man.

07:13 I was going to be a business man.

07:14 I was going to be a business man.

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07:18 I was going to be a business man.

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12:03 I was going to be a business man.

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