Happy New Year! I'm incredibly excited for you to hear this latest episode with Andy Tanner. Andy is known for his unique insights into investments and financial education. In this episode, we explored many valuable topics, from the origins of the 401k to the importance of financial education for families and the role of asset ownership in today’s technological world. Andy also shared his personal journey, including his and his wife’s survivorship over cancer, which has deeply influenced his approach to life and teaching.

Introduction to Andy Tanner and His Work

Andy Tanner, a well-respected author and financial educator, recently updated his book "Form of Chaos." He is also known for his association with the Rich Dad, Poor Dad team, having spent 14 years traveling and learning with them. Andy’s insights are shaped by his extensive experience in financial markets and education.

The History and Evolution of the 401k

The 401k began not as a planned retirement strategy but as a loophole for wealthy executives to defer income. Richard Stanger wrote the original 800-word section, spurred by lobbying from companies like Kodak and Xerox through Congressman Barbara Conable. Initially, the financial impact of 401ks seemed minimal, but today, they account for $11 trillion. Andy highlighted that Congressman Conable was unaware of the significance of the 401k when it was enacted. Consultant Ted Benna later capitalized on the 401k for employee bonuses, which led to employer matching and the shift from pensions to 401k plans.

Critique of 401ks and Wall Street

Andy criticized 401ks as favoring Wall Street due to the compounding costs that benefit the financial industry more than the participants. He urged listeners to examine the real value of their 401k plans and warned of hidden drawbacks. Financial education and understanding are crucial to make informed decisions rather than relying blindly on such systems.

Personal Background and Family Life

Andy shared his personal journey, including a significant experience when his wife was diagnosed with breast cancer three years ago. Thankfully, they are doing well now, and this period kept Andy at home more, focusing on teaching from his home studio and spending time with his family. Both he and his wife are cancer survivors, influencing their decision to start a family later in life.

Financial Education for Kids

Andy believes in integrating financial education into family life. His children have benefited significantly from being homeschooled, especially during COVID. This homeschooling emphasized vital financial skills from a young age. Andy uses practical experiences and games like the "Cashflow" game to teach his kids about financial concepts.

Investment Philosophy

Andy advocates for business owners to leverage their profits by investing in assets to expand ownership. Owning assets is crucial in a world increasingly dominated by technology and AI. Andy recommends benefiting from AI advancements by owning stocks in various sectors beyond just tech. He values operational cash flow over mere price speculation, aligning with Warren Buffett’s investment principles. True compounding requires reinvesting profits, similar to business and real estate ventures. Andy views stocks as ownership in a business, stressing the importance of sustainable growth.

Real-World Exposure and Financial Activities with Family

Andy involves his children in financial activities from a young age. He shared how real-world exposure, like bringing his kids to real estate dealings and letting them invest small amounts in family ventures, helps them understand ownership. Andy talked about the concept of "sponsorship equity," stressing the role of financial education and involvement in tangible activities like stock trading and buying tangible assets like silver.

The Role of AI in Investing

Joe mentioned using AI tools like ChatGPT to distill information and facilitate learning. Andy expressed skepticism about current AI capabilities in trading, pointing out its limitations and inaccuracies. He believes AI is best suited for organizational tasks rather than financial predictions. Andy criticized the culture of overly relying on financial advice rather than self-education, noting that Wall Street benefits from people’s lack of know-how.

Four Key Pillars of Financial Education

Andy outlined four key pillars of financial education essential for investing: fundamental analysis, technical analysis, cash flow, and risk management. Understanding these pillars is vital for managing risk. He recommended "The Intelligent Investor" by Benjamin Graham for insights on investor temperament and fundamentals like earnings and growth.

Risk Management in Business and Investments

Andy discussed that more control equates to less risk, reflecting on Robert Kiyosaki’s idea that risk is related to control. Having good business systems, like standard operating procedures, legal frameworks, and strong communication, helps reduce risk. Leadership and having a mission and a competent team are also crucial. As an investor, understanding earnings and growth serves as KPIs, which are critical for scaling operations.

Concluding Thoughts

This episode with Andy Tanner was packed with valuable insights on financial education, investment strategies, and the importance of ownership. Andy emphasized the significance of learning through experience and being actively involved in financial decisions. He also highlighted the need to educate ourselves rather than relying solely on financial advisors. Understanding the 401k's history and its evolution provides a great perspective on how our financial landscape has changed. Finally, implementing good risk management practices and focusing on ownership can help secure a stable financial future.

Useful Links:

• The Cashflow Academy
• Grab Andy's Book 401(k)aos
• See the latest from Andy on his website
• The Intelligent Investor by Benjamin Graham

Two Other Episodes You Should Check Out

• The Wealth Hacker: Unlocking Financial Freedom with Dave Wolcott
• M.C. Laubscher: Become Your Own Bank?!

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• Want us to build your clone for you? We’ll handle setup, testing, and integration so you can launch fast. Head to HustleandFlowchart.com/interest to get started!
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Thanks for tuning into this episode of the Hustle & Flowchart Podcast!

If the information in these conversations and interviews have helped you in your business journey, please head over to iTunes (or wherever you listen), subscribe to the show, and leave me an honest review.

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Most entrepreneurs can build pretty incredible businesses for

themselves, for yourself, you know?

Within your control, you could generate some really great

revenue, have a great lifestyle and kind of do it your own way.

But when you go to investing outside of your business or even

adopting new technology like AI, A lot of people get tripped up or

just approach it the wrong way.

So today's guest, his name is Andy Tanner.

He actually spent 14 years traveling with Robert

Kiyosaki, author of Rich Dad.

Poor Dad.

It's the first book that I read right before

starting my own businesses.

And Andy ended up teaching his nine-year-old son, how to invest at

a level that most of us never learn.

And this is how it's investing in other companies.

It's also investing in your own business and approaching technology

in a way that's really smart.

And there's a whole process.

Andy breaks down.

It'll help you reinvent the way that you think of

wealth and controlling that.

Yeah, not only in 2025, but also beyond.

So enjoy the episode.

Let's get into it.

Andy, we're rolling.

We're finally doing this.

I appreciate your time and being here today, man.

I know we're going to have a blast because you think differently

around investments in general.

And you have some really cool insights into technology,

the world we're all living in now, the, I guess the bullish

side and the bearish side.

So, uh, how are you doing today?

My friend,

Man, I couldn't be, uh, more grateful to, uh,

to join your, your show.

You do a lot of great stuff and anytime, uh, anytime

you're invited, it's an honor.

So, uh, appreciate the opportunity.

Look forward to our discussion.

Should be a great time.

it will be, and you already just the, the, you know, the, the cover

of you online immediately when we got introduced, I saw rich dad,

poor dad, one of the advisors there.

I'm just like, well.

Robert Kiyosaki and rich dad, poor dad.

The book got me into this whole entrepreneurship

game in the first place.

It was the first book I read and immediately everything shifted.

I want to say there are 40 million copies in like 90 plus languages.

And, you know, Robert, uh, completely changed my

life and I always give a shout out to Kim as well.

Uh, that advisor team, I, I traveled with them for about 14 years.

Uh, all around the world and, you know, it was funny because

we, we were invited to come as a team as teachers, but for

me, it was all learning, man.

I, I, you know, I was just sharing what I was learning as

a student with that group and, uh, nowadays, uh, you know, I,

I spend most of my time teaching here from my home studio.

Uh, my wife had an illness, uh, about three years ago.

She was diagnosed with breast cancer.

So, uh, we're doing great.

Uh, but that brought me home.

My kids play high school basketball.

So, my biggest focus right now is like, I still

teach from my home studio.

But I don't, uh, I don't care for the travel much anymore.

I, I like to be a, like, like being a dad right now and a husband.

So, that's, that's the priority.

That's

I love it.

Has it always, was it always, I mean obviously did a lot of travel

before, but did you always have that kind of intention for the family and

kind of making it for your own time?

And

percent.

Uh, you know, my wife and I had our, our kids a little late in life.

Actually, we were both cancer survivors.

I had testicular cancer as a younger man, so it took us a

while to get the family going.

And, uh, so it became a big priority once we finally got it here.

Uh, but yeah, and Robert was amazing, um, because, This, I mean,

not to go too far down this road, but, uh, he would invite my kids.

Robert and Kim don't have kids, so he would invite my kids with me.

So, you know, I have, our home movies are a little weird.

You know, I've got my nine, I've got my nine year old son, you

know, standing up on stage in Argentina, you know, diagramming

some, you know, real estate deal for infinite returns, and, so

my kids grew up Rich Dad, and they, uh, it's ingrained in them.

Um.

And when, uh, when COVID hit, uh, I brought my older son

home after eighth grade and we spent a year of homeschooling,

nothing but financial education.

Two years later, his younger brother wanted to do the same thing.

So we, we attacked this thing as a family and we, we jumped in

both feet and you know, they're, they're still in high school.

So we'll see how that turns out.

well, yeah, I mean, no better way to learn at such an age,

obviously even better from your parents, your dad, you know, like

learning the financial stuff.

And it's obviously not, not what's really taught in school.

So you're navigating them at this spongy age, you know, your

Ah, it's so good for the relationship, too.

You know, it's just, we, we just get, we were always good

buddies, but even better.

So it was great.

I mean, this is a great way to start because you're obviously

priming your kids with this awesome financial knowledge and hands on

experience and all that stuff.

So a lot of business owners, you know, mainly that's

entrepreneurs, business owners listening, you know, we're, we're

really good typically at making the money in our businesses.

But I feel like a lot of us, and this is why I bring folks

like yourself onto the show.

I'm like, okay, so how do we, yeah, Expand from that and have

this financial knowledge of you know, how do we You know

leverage things like what what you do in stock markets and all

these other financial Vehicles, but like where do we start?

Like how how would you advise someone who is

rocking with their business?

They're feeling pretty good Or maybe they just want to expand

and don't know where to go Yeah,

there's a saying that the ultra wealthy, you know, you make your

money in business and then you take your profits and you compound by

investing, you know, you acquire assets, you know, businesses

generate cash, but they don't expand ownership unless you're investing.

And you know, the thing I tell my, my sons and the thing I

believe, especially now with AI.

I think business ownership and asset ownership is, is really

important simply because otherwise you're going to compete against AI.

So if you don't expand, you know, what, what we're doing,

uh, it's going to be tough.

It's going to be really tough to, to keep up and battle with that

AI if you don't expand ownership.

And I think stocks are a great way to do that because it's

not just finding, you know, NVIDIA and, You know, doubling

your money on a chip maker, you know, people who, you know, sell

food, people who, raw materials.

Everyone will benefit from AI.

So I'd rather own it than compete against it.

And just as the tech boom of the 90s, you know, blew up

the market, there's potential for AI to do that again.

It's that big.

So, you know, I, I've told my sons, I said, any white

collar, you know, job or career you might enjoy, great.

Great.

But you're going to be competing against computers now in a way that

is exponentially un, you know, it's growing in a way we can't predict.

Owning it is probably better than competing against it, in my opinion.

I don't know if I'm right, but it makes sense to me.

Hmm.

you know, like maybe let's break that down and,

Yeah, I,

yeah, let's do that.

I, uh, I agree with Warren Buffett.

Um, most people, if we were to turn on CNBC right now, those people

aren't interested in owning stocks.

They're interested in trading stocks.

And it's price, price, price, price, price all day long.

Nothing but what's up, what's down, bear, bear, bear, bull, bull, bull.

They are always making predictions where, if you read Warren Buffett's

letters, you know, he had a great one to the shareholders about

three years ago where he said, the most important metric, and

you know this as a business owner, it's your operational cash flow.

In other words, how much money do you make from the business?

So, the nursery rhyme, I guess, or the Apesoft's fable level

of this is a golden goose.

Nobody bought a golden goose to say, I think the price of this

goose might go up next week and I can sell it for a quick buck.

Every single child can understand that the operational cash flow,

which is the eggs that it would lay, that allows you to compound.

True compounding really has a reinvestment element.

for listening.

So if I have a business and I'm compounding, I'm buying

a share of another business.

Real estate syndications are the same thing, aren't they?

Um, you have a group of people that, what a beautiful word, share.

And, and, so when I look at stocks, I don't think about a piece of paper

that goes up and down in value.

I think about, you know, myself in my garage trying to build an iPhone.

And failing or trying to try to come up with a vaccine and

failing or trying to do quantum computing like Google and failing.

And yet these entrepreneurs will share the value that they give

to other people with me if I'll share a little money with them

and buy a share of that pizza and sharing that operational cash flow.

I like that.

It's, it's built into the word.

Yeah, exactly.

It's the share and.

a beautiful word.

The fact, the fact Steve Jobs would share his genius with me, with the

likes of a guy like me, and he put me in my garage to build an iPhone,

I'm not coming out alive, I'd starve in there, I'd never get out, so.

It's a, it's a great lever of, a great way to lever other people's

genius and, When I think about stocks, if you want to start where

to start, think about net producing.

When I brought my son home, we went for home school,

one of the first lessons.

We went to the gas station, filled up the car.

It's like a hundred bucks or whatever it was.

Then I took him home after that consumption.

And I showed him on my American Express statement how much

fuel we put in the air.

You know, how much fuel we put into the sky.

And it was, it was a good number.

I said, this is going to basketball practice and,

you know, going around.

But then I took out my broker statement side by side and I said,

you know, we own some Exxon Mobil.

And we have dividends and we write a lot of options on that.

And not the capital gain, not the price move, but simply the

dividends of being a fuel producer.

An energy producer far outweighed consumption.

And I said, so stocks are a way to become a net producer where

I'm producing more in the world.

that I'm consuming.

Then we did it with our AT& T bill and our, our Apple phones and we

just went through all these areas of things where we had consumption,

but we also were participating in the production on all the stocks

I owned and it was, it's a, it's a way to become a net, a producer.

That's a real great way to, to build wealth.

I like that.

And that's, and that is kind of like Warren Buffett, I guess.

You know, it's like, okay, well, you're gonna, you're investing

in the things, you know, right.

The things that you're using that, you know, there's demand for in the

I mean.

Warren Buffett is, is a genius.

I wouldn't pretend that he's not, but I think his genius

overshadows something more important, which is his temperament.

If you looked at the stocks he owns, they're not the best ones,

um, in terms of price, uh, but they have what he calls a moat,

you know, um, Coca Cola, he often 2 billion drinks a day.

And uh, so I went out and bought some, you know, this is okay,

I want to be a part of that.

And it, you just, the cola wars proved it, you know,

Pepsi tried, no one's going to take down that castle, right?

And so, I don't think about risk in terms of stock price movement.

I think about terms of risk in the moat.

You know, if you took that Coca Cola company, you know, started in 1886.

Okay, what's it survived in, in that 150 years?

Um, you know, World War One, World War Two, uh, plagues, uh,

9 11, uh, global financial crisis of 2008, recently a pandemic.

You can't kill it.

You just can't kill it.

And so that's where I see the risk management in just,

they're not going anywhere.

You know, it's, it's solid and they always bounce back up.

You know, if, if you had a chance to buy, you'd always

want to buy it the worst times.

hmm.

Well, and that's the overall rule, right?

It is yeah, yeah Mm

So we're talking about kind of these, these long lasting

companies like Coca Cola.

And then you already mentioned NVIDIA, you know, has had some

pretty steep movements already.

Insane.

And of course, they're leading the whole AI thing.

So, you know, I'm curious of there's, I guess,

two ways to look at it.

I'm sure there's more, but like, how do you look at the

stocks that you're looking at?

You know, or the, or the shares, let's call them.

And then you mentioned dividends too.

So I know

Yeah, and you you asked a great question.

How's the person get started?

So, you know this having done so much business when you embark on

a venture of business ownership You know the entrepreneur Or

you embark, uh, as an investor.

What you're really doing, whether you know it or

not, is you're starting a personal development program.

You're embarking in personal development.

Uh, your weaknesses, at least it was for me, are rooted out

very quickly and they are put on display for the whole world to see.

And so when you, if you really want to start investing or

entrepreneurship, uh, You're going to learn things like

an improved temperament.

You're going to learn way like discipline, you know,

keeping an even keel your temperament, which is hard for me.

Cause I was an emotional guy.

I would get really excited or panic.

You know, it was really tough for me to overcome, uh, is to

just become an even keel guy who, uh, who has discipline, who has

consistency and most important.

And it's why I'm an education advocates.

Why I'm in the business is, is to learn four important.

Uh, financial education, uh, curriculum.

If you go to school, you know what's there.

Biology, and science, and literature, and

art, and mathematics.

You know, the STEM stuff, history, all that's there.

But there's four things that if you can learn, In financial

education, you're well on your way to becoming an entrepreneur or

an investor and they are thus Um, the first one's called fundamental

analysis where There's just certain fundamental fundamental things

that business should do whether it's your business and when you're

going to buy It has to do with the financial statement and you

should look at that financial statement There's just got to be a

certain amount of growth Criteria.

And that's how you, you know, any entity anywhere in the world,

you look at assets, liabilities, income, expenses, statement of

cash flows, you know there's health there or sickness there.

You look at the financial state of the U.

S., very, very sick.

Uh, you look at a financial statement like Joe, you know,

probably pretty healthy.

And so

at least.

for sure.

They're not hard to beat.

It's not a high bar, but, but, uh, you know, and so fundamental

analysis, the ability to analyze the business and say, Hey, this

is good business as of today.

Now tomorrow, who knows?

That's where that moat comes in.

It's like, yeah, it's probably gonna stick around.

The second one.

Especially if you're going to be an option trader is,

is technical analysis and that's your price movement.

That's your study of the emotions of the market.

You know, the, the company's one thing, but the buyers

and sellers are another.

And that's just information gathering.

But the third pillar is cash flow.

How do I position myself within this information to have a profit?

And then finally is the most important one, risk management.

That's where my team is just crackerjack, man.

They're awesome.

You know, I've got guys that are professional risk managers, Series

4 Option Principals, and they, uh, You know, guys like that, they help

you deal with the sudden change.

And the insurance of when the unforeseen happens.

Every single thing you find in, as an investor, will fall

within one of those four.

It's either a fundamental issue, a technical issue, a cash flow

issue, a risk management issue.

And if people can learn those, that's where I would start.

Is with temperament, discipline, learn the four pillars.

And then you can have a foundation to invest.

Yeah,

I just think of, you know, we talked about AI already and how, well,

there's no real temperament with AI.

It's purely, you know, it's logic and it's, it is what it is.

And, um, you know, I'm curious of what you think would be the, I

guess the most difficult of these four to deal with, you know, um,

and because you had the temperament thing, uh, you know, emotional.

I feel like a lot of people are emotional when

it comes to this stuff.

I think it depends on the person.

Uh, you know, the engineers, uh, seem to have a good temperament,

but they're actually more afraid than you think, because they, they

overanalyze, you know, they're terrified of some type of mistake.

I think the most, I don't know if it's the most difficult,

but the most important one, if you, have great risk

management, then that gives you the ability to move forward

because you know you'll be okay.

Um, if, if I, you know, if I have a seatbelt, if I have a helmet,

you know, whatever it is, if I drive my car, the more safety

mechanisms I have around me, more confidence I have to invest.

I think that risk management is the most important one.

Uh, once you get that down, it takes away the fear, frankly.

And, and, you know, as an entrepreneur, I would imagine

there's, are there certain, let's talk about risk management,

you know, as someone with a business, are there some,

you It's fundamentals there that you would recommend.

I think so.

Robert Kiyosaki, I was upset that I didn't see how obvious this was,

but I remember this like it was yesterday, he had a flip chart out

and he wrote, he wrote this, he says risk is related to control.

Um, the more control you have, the less risk, the less control you

have, more risk and no control, well that would be gambling.

Uh, we have no, you know, where round and round it goes, where it

stops, we don't know, we can't say.

And so, in a business, I think part of the, part of what brings

controls is you want to have good standard operation procedures

where You kind of remove, maybe not the human element, they still

have to follow those procedures.

But you want to McDonaldize things as much as you can.

You want to have systems in place, legal in place, great

communications in place.

You know, those are the, the fundamentals.

Um, You know, inside of a, of a, of a business triangle.

Leadership is important.

That's a fundamental.

Having a mission, uh, is really important.

Having a team really reduces risk if you have a great team.

So those are some of the things I think as an entrepreneur

you can think about.

Probably the least important one is your product.

Um, but if you have great systems, Great standard operating

procedures, great legal, great communication, and, you

know, some stable cash flow.

You know, you're controlling a lot, you know.

I don't know if you can get total control, but the more control you

have, the less risk you'll have.

That's the basic principle.

Yeah.

the idea of having solid systems, I mean, that any business at any level

should have great solid systems, even if it's just you and yourself,

but like that can carry into so many different projects or investing,

you know, even if it's outside of your own business, there's still

systems and, you know, you need that support when you go anywhere.

Yeah.

Yeah.

if, if you have a business.

You, you have to know your, uh, your key performance indicators

and monitor those, and if something needs to be tweaked, you get a

system to address, you know, what that is, and you, you tweak your

system or improve your system, but, you know, key performance

indicators are fundamental analysis.

You know, it, it really is how your business is running.

And, uh, as you analyze business as an investor, there are

key performance indicators, especially valuation indicators.

And even as you're on your own, your own business, you

want to have KPIs in hand,

Are there, so when it comes to fundamental analysis, just

to understand some, you know, for, for folks listening here,

and I want to obviously send them down to more resources

after this too, to go deeper.

What are some of those KPIs that you would recommend really

understanding and studying on the fundamental side?

uh, as an investor or business owner,

Uh, I was thinking investor, but you know, in business owner, I

don't know if you, if you want to cover a little bit of those.

Let's talk a little bit about investor.

That's probably the easiest one if you were a beginner

and you just want to start to invest There's a couple of

books you could read there's there's one that's really hard.

I don't recommend it It's about this thick.

It's called Securities Analysis.

It's by Benjamin Graham, who is Warren Buffett's mentor.

And it's doorstop, man.

I mean, you, you, you, you got a robber coming into your

house, just throw that book in the, in the hallway and

Yeah, exactly.

it'll stop any door.

Um, the other one is a better one, a little easier to read,

called The Intelligent Investor, also by Benjamin Graham.

That's more of a book on temperament than on securities analysis.

But it does talk about two metrics that really help you see value.

Market knows this, um, it's earnings and growth.

Uh, if a company is earning money consistently, what does that prove?

Well, number one, it proves that people want the product or service.

So that's really important.

We have proof of concept.

And number two, it means they're operating in the

time being at efficiencies to where there's a profit there.

So it proves efficiency and it proves people want the stuff.

Uh, growth means that it's headed in the right direction.

More and more people are liking it.

So those are pretty basic fundamentals, you know,

earnings and growth.

And we have all types of.

Valuation, EBITDA, you know, enterprise value, EV over EBITDA

is a metric that is a lot like price earnings and peg ratios

are price earnings in the growth.

And so those, those little ratios are important.

Understanding the work that is done is really important.

Do they do great work and are they efficient in the work they do?

And if you, if you do that, You can have the confidence

to scale in at a small amount.

You don't have to buy the whole company by a few shares.

Um, first shares I bought about 10 shares of a stock

that was 16 my first time just to see if it would work.

So 160 was my first investment.

You know, just see if the button would really give me

checks out and Yeah.

Uhhuh

So yeah, um, you know, on the, on the business side,

if you own your own business.

Those KPIs are very similar.

You know, can we grow?

Can we scale?

That's a big buzzword now.

Scaling up, that's a big buzzword.

Which means growth, you know, that's all it

same thing.

Yeah.

fancy word.

But it's essentially the same.

Now when, when you own a business yourself, you're going to have more

nitty gritty and more hands in it.

Nice thing about investing and buying a business, Buffett

doesn't mess with the management.

He doesn't micromanage.

When you're buying a stock, you get to buy the management.

They come with it, included.

It's turnkey.

Uh, batteries included, right?

Uh, you have the management team in place.

Warren Buffett said this.

Uh, I hope I don't destroy this quote, but he said, uh,

The ultimate irony of the investment business is that an

obstetrician can deliver babies better than the husband or wife.

And if you take dentists as a whole, they can fill teeth

or pull teeth better than the patients try to do it themselves.

But in the investment world, somebody who believes in American

business and will seek out the lowest way to participate in

business and do it consistently will achieve results that exceed

those, uh, of the Wall Street professionals, the group, in

fact, it's the only industry you can think of where the.

Professionals efforts subtract value from what

the layman could do himself.

I think the key in that quote that I picked out is the

lowest way to participate

Uh, and that's stock ownership.

You don't show up to the work You don't drive your car to the office.

You have the management built in They're they're the ones checking

the kpis and managing all this stuff And you simply participate by

receiving a dividend Maybe you sell some options for you know, increased

cash flow and compounding power You Uh, but it really is about ownership

and it's a, you know, you play Monopoly and you just buy the board.

And I always tell my family in the family trust, I tell my sons,

I go, you fricking better never sell our real estate ever because

if you can acquire a piece of land on the earth, there's only so much

earth, you keep it in your family.

You don't give it up.

Well, it's the same with American business.

If you can acquire some shares.

Of our gross domestic product and the work that's being done.

Why would you ever want to relinquish that ownership of

those shares of the, of the GDP?

I mean, Warren Buffett's got 5 percent of the S& P now.

It's about how big he is.

And, and that's what one man can do.

Uh, and so ownership is more important than working.

I think work for ownership, not for paychecks.

Yeah.

Work to

that.

Yeah.

And I mean, we can build that into us, you know, what

we do as business owners.

You know, I've had really smart folks like Roland Frasier, uh,

who's been on this podcast and he's, you know, he's got, I don't

know, 30 plus businesses, but, you know, he's not technically, uh,

yeah, he's not on the, you're not going to find him on an org chart.

That's what he always says, you know, and.

That's one strategy, you know, he has ownership equity and things

But in the way that you're saying through shares and the stock market.

Well, there you go You can kind of do something similar,

you know, you're not Operating anything you're you're doing

your own analysis on your side

The, epiphany that escapes and it, it having done this for

30 years, it, it is such, um, it's an enigma to me that, that

people think about the risk.

They think it's almost entirely that I'm scared that the stock

market will crash or that the value of my shares will go down,

that the price will go down.

That's not it.

Warren Buffett said it.

Operation, operating earnings is what you're concerned about.

Who cares what the price of the goose is, it's whether or not it

will continue to lay the eggs.

And if the goose is a hundred dollars and it's laying,

you know, a ten dollar egg a month, You, you, you're fine.

You're going to get your money back.

You're fine.

It's in, and if the price, I mean, imagine Buffett, about

half his wealth is in companies that are not for sale, like

Fruit of the Loom, Dairy Queen, Geico, Duracell Batteries.

Geico Insurance, all these companies that have no price.

Um, they're not for sale on the market.

They're not listed.

And so, you know, like, the prices of my homes don't fluctuate.

Because they're not for sale.

The prices of my stocks don't fluctuate.

Mine don't because they're not for sale.

That, that stock market only matters to me if I want to give up the

golden eggs that the goose delivers.

And I just don't see the point in doing it if, if I can, if the

option market is there and I can sell premium and if the dividends

are there and you get a double digit return off those two efforts, the

hell do you care what this price is?

I like that.

Yeah.

And that, that enigma, it blows my mind.

If you turn on CNBC, not one person talking about product

that I guarantee you turn it on right now, they'll be

talking about a damn price.

They will.

And it's just not how it's done.

It's just not how it works.

So, dividends and options, are those the two things?

I mean, that's the, that's the cash flow, right?

Yeah.

I mean, there's There's only six things you can do.

You can buy a stock, sell a stock, buy a put, sell a

put, buy a call, sell a call.

Now the combinations of those get really exciting.

There's a lot of combinations of those we can learn.

But all wealth building is, is learning to conduct, conduct

a transaction intelligently.

It's all it is.

And, and that's what financial education boils down to,

is how do I conduct these transactions in a way that is

going to, uh, Produce cash flow.

Well, you're exactly right people poo poo dividends and It's crazy.

They think a dividend is never gonna move Inflation makes

prices go up makes the cost go up, but it also makes the The

the cash flow go up the gap between the two Warren Buffett

bought coca cola at three dollars and twenty five cents a share.

That's his cost basis I think it's a two dollar dividend

Wow.

that thing's paying for itself every 18 months or whatever, time

after time, and the compounding, when you're compounding it

at 50%, that's astronomical.

So it's, it's not what the dividend is today, it's what the dividend

will be tomorrow and 10 years from now, and hopefully people can think

dynastically, you know, legacy, to where when I die, hopefully

my kids have been educated well enough that they can, you know,

Become stewards of, of the dynasty and pass it on to their children.

Hopefully.

Yeah.

Hopefully that's a great, great goal and legacy.

It's well, you know, on that point, because I keep going back to, I

love the fact that you educate your children and you know, like, that's

what I've, I have a five year old and a 12 month old at this time.

And

you're in the hot, you're, you're in the beautiful sweet spot.

I

mean, Santa Claus and

Oh yeah.

and, I mean,

already questioning Santa at five, which I'm like too young.

Come on.

ha, good for

But the, what I'm thinking here is that, you know, they're at

such an impressionable time and, um, it like, what are some of

these things you mentioned, uh, real estate, you know, like don't

sell the real estate, you know, that's yours and all these assets.

Um, What are some some things that you just think that we should all

know that kind of like you taught your children at this young age so

well, I gotta give a plug to some Rich Dad.

They have a game, uh, called the Cash Flow Game.

Yeah

And we started playing that game before they could do math.

Mom and dad were the auditors, so we did the math.

But they just needed to understand the arrows, the

direction of cash flow patterns.

And so the game was number one.

Number two is we would take them with us.

Uh, when we do real estate.

And we started buying stocks very young.

First thing I just said, what would be a fun company to own?

And one of them chose, uh, Disney.

So we went on a business trip to check on how

the operation was going.

And we stood in line.

Uh, for many hours bonding as a family as we stand in line, uh,

lot of demand right?

Yeah, and they look around like, man, we're doing well.

This is good stuff.

My other son, I hate McDonald's.

I can't stand their food, but kids like it.

So he bought McDonald's and he walks in like he owns the place,

you know, when he's seven.

And that idea of ownership at a young age that you could

own these incredible companies was very natural to them.

In the real estate, once they had a little lemonade stand money,

you know, not much, when we would do a syndication, we would, Uh,

let them pool some of our money.

That's probably co mingling of funds that I'll get arrested for,

but I think a few bucks chipped in by the kid, uh, that we keep

track of on the side is okay.

And so they, they understood this stuff, and then also, they were

just blessed to hang out with, like, one of my son's favorite guys is,

I don't know if you're familiar with Than Merrill, he's, you know,

you know

here in San Diego.

Yeah, so Than is one of my dearest friends and, and, you know,

he texts my son all the time, you know, telling him to push

it because Than's an athlete.

My kids are athletes and, uh, and so hanging out with, with guys like

Than, you know, they understood.

I remember Than was pitching a, a syndication.

They have a, like 2.

2 billion fund, I think now.

That's a lot of, a lot of money.

Assets under management for a guy fans age but but We watch those

things together and I said son, what do you take from fans pitch?

He goes Sponsorship equity.

I says, you know, that's it.

He said I like the sponsorship equity so yeah, just involving

them and and they have their own

What we call they have their own brokerage accounts and

so those are the things we do

with your kids, you've involved them.

You know, let them know.

Um, we make a sacred pact.

We don't talk about, You know, our cash flow net worth with

other people, but they're involved in the stocks.

They're involved in the, you know, they, they buy, uh, silver.

They have little silver coins.

They don't have a lot of gold, but they have silver and

you just let them make some mistakes, you know, let them,

It's a game.

You know, it's, it, it truly is.

And learning the rules early, like you said, the cash flow game.

That's one I haven't played.

I've seen before though, so I'll, I'll be picking that up.

it is, it is, when, when we're in, when we would travel to Australia,

or Argentina, or Paraguay, or Rome, all these places, and my kids,

Robert would call them up on stage, and they'd dissect what really

appeared to be pretty complex stuff.

Go to a book signing and everyone wants my kids to sign the books, you

know, they're one in the morning.

They're keeling over and They said we want to be rich not famous dad.

I go bingo.

That's a big lesson.

You learn right there Don't be famous be rich But but what

was interesting is all of that people would say how'd you

kids learn all this and I says listen All kids are geniuses.

My kids aren't any different.

They're not magic.

Okay?

There's nothing special about them.

They're, they're just kids.

But the financial education, they didn't ascend to a great height.

The education was brought down to them.

That's the secret of a great teacher is we didn't try to push them up.

We brought the education down to within their grasp.

And that's what the cashflow game does is it, uh, it is so good.

So many lessons and that's why they could get on stage and

understand those cashflow patterns.

Cause it was ingrained in them since they were very little,

like before they could do math.

I'm, I'm picking that up for, for them and for me just

Yeah, pick up the cash.

Five years old, she won't maybe do the math yet.

Well, you and your wife can do that.

And we would have, and it's a long game, like Monopoly takes

nine hours to play, right?

Same with the cash flow.

So we, we just had a little hiding place under a lamp

table is where we'd put it.

And we just put the game under and we'd pick it up where we left off.

So 45 minutes, they can, they have an attention span for 45 minutes.

Ha ha ha.

Yeah.

Well, what I'm thinking, Andy is like, so we've talked

about AI before and I think of, AI is such a great way to

distill information and make it actionable and to learn rapidly.

And like you mentioned, um, you know, the books earlier,

like the thing I do is like, I love to use things like chat.

GPT is a tool to, you know, if I have the actual resource,

maybe upload it, or it obviously has a lot of knowledge.

Are you using AI yourself or your team in ways to enhance, or maybe,

you know, do some of the process that we're talking about here?

You know, the more I use chat GTP, the less impressed I am

with it, and the more I realize how far it really has to go.

It's true.

Anyone experienced in sales or rhetoric and understand the

difference between a rhetorical context and a veridical one

Understands that that version of AI has been programmed rhetorically

not veridically I would never use it to trade in a million years.

I wouldn't trust the data It's really really good at saying.

Hey, here's This spreadsheet reorganize it for me or it's

really, really good at saying, well, semi good at saying,

here's this math problem.

Go do it for me or write this blog, but the the inaccuracy

is, is a really big flaw because it's, it's, it's taking.

from the world of knowledge, which is highly rhetorical with an agenda

trying to convince someone, and as a result, accuracy is sacrificed.

So there's certainly something to, I mean, we've been

trading with, what is AI?

It's a buzzword for more advanced algorithms than we had before.

That's all it is.

We don't have general AI yet.

We're way far away from that.

We're just getting really good at algorithms that

can do a lot of tasks.

Um, trading, most of it's been done by computer for the last decade.

I'd say 90 plus percent of the New York Stock Exchange

is just Set it and forget it.

And they're just trading high frequency fiber optic, you know, and

read flashboys and you get a, you

Oh yeah, that's true.

So, you know, do I use AI?

I don't use it hardly at all with my trading.

I might use it for, it's going to tell you what's past, you know,

what's the five great stocks that will make me rich, you

know, tell me what the future is.

AI can't predict the future.

It'll tell you what the past was or what now is.

Well.

You know, NVIDIA has been good.

Well, that doesn't mean anything about the future.

So, we're a long ways of replacing education with AI.

People want that because they're lazy.

Don't get all get on a rant if we go down this road.

We have a culture of advice, is what we have.

That's why Wall Street's rich, it's called Assets Under Management.

Why do they have Assets Under Management?

Because people don't know how to do it themselves.

So they wax rich, insanely rich.

That's why 401Ks are so awful.

Is they wax rich with mediocre results.

playing off people's ignorance, pretending, very much pretending,

that they can predict the future better than you can.

I'll go back to Buffett's statement, they subtract value from what the

layman can do himself, for sure.

It's the only industry we can think of like that.

Um, it's, it's terrible.

So, education is where it's at.

Advice is for people who are lazy and don't want to go to work.

I, really, what they're asking for free money.

Andy, give me a stock pick.

What they're really saying is give me money for free that

I don't have to work for.

I just got to push a button.

That's lazy.

It's not, it's not how wealth is, is built.

It's built by education, not the culture of advice.

I love it.

Okay.

Thank you.

And I'm happy I asked that and I

That's a long winded, you put a nickel in me, you

know, it's terrible, you

that's great.

20 answer on a 10 cent question.

I don't know It's

in terms of resources and going deeper, like let's because there's a

lot here and you tease the 401k, you know, just how that's such an awful

machine that you wrote a book about.

It's actually right behind your head there.

So what are some resources folks?

Can people people can go down a little deeper with you?

And also though, you do some, some, um, workshops pretty often that

maybe we can invite folks to it too.

first edition of Form of Chaos, which is this old vintage one,

you know, the publishers ten years later asked me to write a

new one, so I just finished it.

So don't go out and get this one, it's ten years old, but the

new one's coming out, and you know, whenever those guys, my

part's done, I've written it, so it's all in their hands now.

So however long that takes.

I would just say briefly, You know, if people really

understood, uh, the, the origins of the 401k, where it came

from, they'd be flabbergasted.

There was no point was there a group of smart women, smart men

that got together, think tank or brain trust that said, let's

figure out a great way to retire.

This is not like an engineered machine.

It's more like the evolution of a beast, like an organism

that evolved across time.

And, uh, and so I won't go into that history, but I didn't put it in this

book for fear people would be bored.

And then when I showed the publishers the real history,

they said, Oh, you're a moron for not putting this in here.

But it was basically, uh, you know, a 30 or 40 year evolution to

where, uh, it was off label use.

The, the original 401k section was 800 words.

And the guy who wrote it said, was a guy named Richard Stanger,

who's still around today, much older, but but Barbara Conable,

late Barbara Conable from New York, Congressman, got Craft in or Kodak

in his ear and Xerox in his ear saying, Hey, we want a loophole,

uh, for our rich executive bonuses.

You know, Carter, President Carter was failing in his presidency.

He's got Iran and, you know, gas prices trying to do

tax reform to do something.

And, uh, these guys saw an opportunity.

So they go to this congressman and he hires this young lawyer

right out of Temple University, 20, 20 something young guy says,

write this, this, uh, Well, I was interviewing Richard, you know, I

was talking to him on my podcast and he said, Andy, we, we put

this to the, you know, Conable was on the House Ways and Means

Committee, he was the chairman.

And they put it to the, uh, the IRS and also the Congressional

Budget Office and the Treasury and all of them have to run

analysis on it to say, what will the impact be to, the U.

S.

government.

How much money are we going to lose by deferring this?

And they came back, I about fell out of my chair when he said

this, they came back and their analysis said if they enact this

law, the difference to the U.

S.

budget will be less than a million dollars.

There's 11 trillion dollars in 401ks just in the United States today.

Wow,

So, Conable goes 20 years later, he writes this book

called Congress and the Tax Law.

So all his speeches he gave, no mention of 401k in it,

even once, not even once.

And he's at a party, and Barbara Conable's at this party, and his

colleagues come up and say, Hey, congratulations, you've been

nominated for Man of the Century.

Because you invented the 401k and Barbara Combs says, I did what?

Uh, what's a 401k?

He had no idea.

For 20 years it was growing.

Calls up the Ways and Means Committee and says, Do

I have anything to 401k?

And they say, Yeah, you sponsored the legislation.

He said, I'd forgotten it completely.

It was a favor to my buddies.

At Xerox and Kodak.

So, uh, it sat there for two years from 78 to 80.

And a guy named Ted Benna, who was a consultant, uh, was working

with a bank that wanted to get these big bonuses for them.

And they had this legislation called ERISA that had frozen the law.

And he found that little loophole and he said, What if we gave

them bait, an employee match, And, uh, the employer match was

born, and next thing you know, people gave up their pensions.

If, if you look at a pension, uh, it's a function of the financial

statement on the cash flow side.

Income expenses.

Never touch the assets or liabilities.

It was a cash flow issue.

Lifetime income.

Pension.

The people didn't have the financial education to see that

when pensions were replaced by a 401k, that it became a balance

sheet issue, a net worth issue.

And now it's basically an hourglass that's gonna out, you

have to outlast your retirement for the hourglass shrink.

So, it's a horrible deal.

I won't even talk about how much Wall Street makes on this.

Um, they make the lion share the money.

They make more money than the 401k guys do through compounding costs.

It's a bad deal.

So, you don't need to buy the book, but, but, uh, You know,

it's, it's just something you should investigate of

whether it's really worth it.

And that bait is food that conceals a hook.

So even though that employer match looks like money and smells like

money, tastes like money, there is a hook inside of that bait

that is not seen by most people.

And if you really do the math on it, there's a real question

about whether it's even worth it if you do the long term math.

Which I've done so, um, so yeah, resources, people can find me.

We could take people, you know, I founded the Cashflow

Academy not because I was beating Warren Buffett in an

investing contest 20 years ago.

Uh, I founded the Cashflow Academy because people had said, Andy,

you have a talent for making stuff pretty simple and pretty plain.

And so since then, uh, we've been very blessed.

You know, about a third of our students are outside the U.

S.

Uh, 170 countries now we're in.

And, uh, we're very blessed to teach people as far as they

want to go with investing.

If they just want a little bit of knowledge, we

can give them a little.

If they really want to become a full fledged stud option

trader, we can do that too.

you know, if you, if you'd like more information, uh, we

can give you a little link.

It's the cashflowacademy.

com.

You know, T H E.

the cashflowacademy.

com And then just put a forward slash in there

and then put in hustle.

We thought that'd be appropriate So the cashflowacademy.

com forward slash hustle and we've got a fun ebook.

It's free And it'll tell you a little bit about uh a little bit

about that fundamental analysis and getting out of the rat race

So it's a great place for someone just to start if they just want to

do something for free and and uh learn more about financial education

Awesome.

Andy.

I appreciate you so much, man.

I love the way that you educate the pace and the style.

And I, I.

Your kids are lucky for one for learning for so young,

I don't know if they'd agree.

I don't know if they'd agree with that.

they'll look back and thank you guarantee.

we get along pretty well, we

it sounds like it.

So appreciate you.

We'll be chatting soon.

And, uh, thank you very much.

Oh, Joe, I had a great time and, uh, hope people found

value in our conversation.

Thank you so much.

Absolutely.