Power CEOs (Aired 01-20-2025) : Achieving True Wealth: JP Newman on 4D Wealth

[00:00:00] Speaker A: SA. [00:00:29] Speaker B: Welcome to Power CEOs the truth behind the business. I'm Jen Goday, your fearless host, investor, entrepreneur and business strategist. Why are we here? Because iron sharpens iron. And when we bring industry leaders and executives here to share what's working in business and maybe even some of what's not, we are all able to learn and grow. As a result, our businesses grow and the impact is has a ripple effect that not only impacts ourselves, our teams and their families, but also our communities and our world. Buckle up. You are in for one heck of an episode. Today we are going to talk all things redefining wealth for purpose investing and so much more. I have an amazing guest here today with me, JP Newman, founder and CEO of Thrive fp. Welcome to the show. [00:01:18] Speaker A: Thank you so much, Jen. It's terrific to be here. [00:01:20] Speaker B: Okay, so you have really got a revolutionary way of looking at investing. You have kind of redefined what wealth is and you have a concept of this four dimensional wealth that we were talking about. Can you give us some insight into what is that and how does that redefine what we think of traditionally as success and wealth building? [00:01:41] Speaker A: Yeah, you know Jen, I've had thousands of clients over 20 years of doing this business. You realize a lot of people accumulate money, but they don't feel wealthy. In fact, they live in a lot of fear and scarcity. A lot of things still keep them up at night. Like they just don't really understand that they've actually made it. So how do you know when you made it? Is it a number? Is it a net worth? Like what, how do you actually know? And so this idea after 20 years of talking to investors is essentially knowing what your money is. But there's other dimensions. And without understanding those other dimensions of wealth, you're kind of can have money, but you never feel wealthy. So this whole four dimensional wealth is. How do you know what wealth is and what wealth isn't? And how do you know what money is and what money isn't? And ultimately it turns out it's a mindset along with a framework. So it's both a framework and a mindset. [00:02:30] Speaker B: Okay, so I don't know about you folks, but I really want to dive into this. Tell me more, what is that mindset that we're looking for? [00:02:39] Speaker A: Yeah, well, the four dimensions of wealth essentially once you have your investments in place, which is a whole thing in itself. It's taken me many years to teach people and learn how to actually have your investments aligned up with reinvestment rates, having Your number. But most importantly, there's other pillars that your money needs to support. So for instance, your community is super important. Are you connected to a community? What are your relationships like? Whether it's as a father, as a husband, as a wife, what is it your purpose? Do you know your purpose? Do you know the why that makes you cry? Do you know what you're doing it for? And then ultimately your time, wealth, like is your time, are you waking up happy, living your day in presence and going to sleep peacefully or are you kind of waking up and just bouncing between your text and your cell phones, overworking, not even sure what's next and really like who owns your time? And ultimately, you know, Jenny and I have talked about health is obviously the wrapper around the four pillars of four dimensional wealth. [00:03:35] Speaker B: Well, you know, a lot of times as entrepreneurs specifically, I'm going to speak to the entrepreneurial part. We're really good at making money, we're really good at generating that net worth number and that cash flow number for us. And we tend to be a little bit monetarily focused because we're trying to grow something we're really passionate about. We're trying to make an impact with our business and we're trying to set our families up for success. And a lot of what you just talked about kind of falls by the wayside because we're so focused on the metrics. And a lot of times that's the financial metrics in business. I mean, hey, I know you're out there, let me know, like connect with me. Is that something that you hear, hear a lot about or that you care a lot about? Because we know how to measure our businesses financially. We know how to measure how we're doing on our journey in life financially. Because it's a defined metric. How do we measure some of these other pillars? [00:04:24] Speaker A: Yeah, I think it's really important because I just, again, thousands of people have counseled through this and it's amazing. I know people 100, 200, 300 million dollar net worth and they never have that safety. So on the mindset side, I think that if you understand that the purpose of money is your foundation to support these other pillars. So money is just a currency. It's truly an energy, a currency that is here to really not rule your life. [00:04:48] Speaker C: Welcome back to Power to support your. [00:04:50] Speaker A: Life for everything that's important to you. For instance, for me, my top thing are experiences with my family. As we speak right now, my son is in the control room and having him for the last 48 hours and taking him on incredible high end experiences through Houston. Whether it's dinners with smart people, amazing friends, Even being here with you today is part of one of the highest things in my on my four dimensional wealth. This is hitting my relationships, my relationship with my son. So it's a super important, you know, feeling. I slept well, having great energy. All these different things are, you know, my purpose, this is my purpose is helping educate people out of fear so they don't have sleepless nights and create nights where they feel empowered and they know that they're wealthy. And then once you realize that wealth is not actually a number, it's really how you feel. How is your energy? Are your relationships connected? Is everything that you're doing or mostly what you're doing every day within your purpose? Is it really filling that purpose? And you know your roadmap, all of a sudden you realize money is involved, but it gets really simple because once you know your purpose and why you're doing these pillars actually know what you do. You reverse engineer a number. [00:06:00] Speaker B: Oh, we know those terms, right? [00:06:02] Speaker A: So then you actually reverse engineer and say, okay, I'm living this lifestyle today. This is either enough or it's not enough. But if it's not enough, let's take the next 36 months, let's not go more than 36 months. It's too much for the brain. We can dream of long term things. Let's make a three year vivid vision plan for you of what you really want. We're going to call that your abundant lifestyle. So you go from what is your current burn rate today, what are you spending today? Is it satisfying for you? And then if it's not satisfying for you, what do you need to grow financially? That will be that foundation for these four pillars of wealth. Once you know that, then we actually work on a framework for you. So we go beyond mindset at that point. We work on a framework, we talk about reinvestment rates, there's a wealth pyramid of ratios between liquidity, cash flow and speculation. [00:06:49] Speaker B: I'm going to stop you right there because we need to dive into this because I work with many, many entrepreneurs and they don't understand this key concept. So can you go a little deeper into that pyramid really briefly and explain what that means? [00:07:01] Speaker C: Because we have people who are very. [00:07:03] Speaker B: Savvy, but we also have a lot of people who ask the question about, hey, like how do I turn my income into wealth and how do I think about investing? So, so liquidity, what investments, where is our money? If we're Liquid, where is our money in each of these levels? [00:07:20] Speaker A: So first of all, you gotta know. Most people don't even know their burn rate. When I ask people, what do you spend? Like you're stressed about mining, you're not even up. What are you spending and what are you making? Most people don't even have a general idea or they have some idea, but they don't want to exactly know. And that creates more fear and more anxiety if you don't know. So the first thing is know where you're at, know where you want to go. But essentially, let's say, for instance, now you're making. Let's say you have 100,000 a year of income and you want your dream abundant lifestyle. I want to travel. I want to go to the mountains. I want to spend two weeks a year on vacations with my family. I want to do more with my church. I want to like for me, right now I'm working on a young professional center. I'm raising $3 million right now for a young professional center so the young people can meet in Austin. That's right up my whole world, whether it's my for profit, like my apartments or my nonprofit. I like building communities. I'm all about building communities. So this is right up my alley. So once you kind of know that, let's put a number to it. And here's how it works on the number side, let's just say, for instance, Your number is $250,000 a year. It's a very humble number. And for most people, by the way, here's the answer, it's 250,000 to a million dollars a year will buy you a dream lifestyle. If you want planes, three houses, or wine collections that could cost you more, or super yachts. But for most people, between 250 and a million dollars a year after taxes is your dream lifestyle. So then, like, once you kind of know what that number is, we start building. And remember that cash flow is the winning formula, right? Like people talk about net worth, net worth is a vanity number. It really doesn't matter. We all know we can puff up our balance sheets. What actually matters is what you're bringing in through your cash flow. And winning the game, winning the finance game is super simple. When your total cash flow, between your active income, what you make at work, and your passive income, what you do with your investments, when that equals your dream lifestyle, guess what? [00:09:17] Speaker B: You've made it. [00:09:17] Speaker A: You've won. Hallelujah. Guys, there's a time we can breathe and say this is what I'm going for. This is my dream. This isn't an Instagram dream. This is my dream. This is exactly what I want. I know what it's going to cost. And now I have a framework and a plan to do it. And it's going to be based on cash flow. When cash flow equals that dream lifestyle, you've won. You can relax and until then, have a lot of fun, right? [00:09:44] Speaker B: That's right. [00:09:45] Speaker A: Let me take you a little more in detail how that works or not. [00:09:48] Speaker C: I think. [00:09:49] Speaker B: Yes. I don't know if we have enough time before we have to break to go into really depth, but I want to kind of highlight this for everybody who's listening, because I heard that that number is very personal. We've talked about success being very personal, but you must know your baseline. What are you taking in today? What are you spending? Because if we don't know where we're starting, it doesn't matter what our dream is. We don't know how to reverse engineer and make that actually happen. So, yes, it's a little bit scary. We need to actually pay attention to where our money's going and what we're spending it on. And I'm going to add something to what you said, because this is something that's really important for entrepreneurs. We're going to do this in our business, but we're also going to do this in our. We're going to do this in business and in life. Because sometimes, and I see this all the time, jp, entrepreneurs have very cash flow positive, super successful businesses and they come to me and they go, my business isn't successful, but they've got a 38 net profit margin. And I'm like, what are you talking about? No, what you're really saying when you think your business isn't successful because you don't see enough money in your life is that your lifestyle exceeds what your business is bringing in. And that's very common. And we don't want to mix the two. So separate out what that looks like in business and life so that you really have a good understanding, because we don't need to be stressing over a business that's not successful when we actually have a successful business. And we just need to scale it so we have the income that we want. So let's really separate that out. I think that's really important. [00:11:07] Speaker A: Super important. [00:11:08] Speaker B: And it's something that I wanted to kind of expound on. We do have to take a brief break, but you guys are going to want to stick around Because JP is going to break this down so we can really get into four for purpose investing and make sure we are successful financially and with all of the pillars of health and well being. We'll be right back. Welcome Back to power CEOs truth behind the business. I am here with JP Newman and we are talking about our favorite topic folks. Money. How do we generate the money we need, have the financial security that we need so we can live our best life? And as entrepreneurs we know a lot of times we're really good at making it. We're not so good at understanding how to generate, turn that into wealth that works for us in other ways. So I've curated it. You asked, I listened. We are going to dive right in and get down and dirty with this framework for moving forward and really on purpose investing in the life that we want with jp. Tell me more. [00:12:16] Speaker A: Yeah. So what's really important is once you know your number of where you want to go, then let's start on a framework. And I start with the wealth pyramid. And the wealth pyramid is really simple. At the bottom is your liquidity. Liquidity is anything that you have in your portfolio, cash, stocks, it can be crypto, anything that you can sell in seven days and create cash from it. That is defined as liquidity. [00:12:36] Speaker B: So let me ask you because this question's going to come up. Well, but Jen and jp, when I go for a loan, they only take about 50% or consider 50% of my stock portfolio. So how should I be looking at this definition? [00:12:50] Speaker A: Is anything that truly you could validate, you could cash in, you could call on the phone in seven days, have that. Cash is the number of your liquidity at the bottom. So it's not what it might be worth. It's not a mark to market value. It's cash value is how you think of what's it worth today roughly. So you should think about your liquidity. At the center of the heart of this whole thing is the wealth pyramid. And the wealth pyramid goes around cash flow. And so you're looking at how much cash flow do I have coming in? And that's like the very, very heart of what you're doing. Cash flow is your liberation. Remember that is the ticket to winning. And the very, very top of the pyramid is speculation. And that's about 5%. That's like almost nothing. It's 5 or 10%. What I found through the years is that most people, because they don't have a plan, they tend to over speculate and they tend to put too much at that risk, at the top of the pyramid, where your money is, your money is slow and boring. It's a little bit of cash flow every time. And the way you kind of look at the formulas is this. You basically have to ask yourself, and it's different for every person, how much liquidity do I need to sleep well at night? I tell most people the answer, depending on your lifestyle and where you're at in your life and your age is somewhere between six months and two years. It just really depends on your style. And defined as liquidity is the way I defined it, then everything else you should be working on, your investments that create more and more cash flow for you. Here's the fun part. Once you know you have 6 months or 12 months, whatever your cash flow is, let's just say in your liquidity bucket, let's just say you have $100,000 more cash than you need, you've already got the number. This is the fun part. Pick five, no more than 10, max, of things that you love to invest in. What I would define as things that you're interested in, things that you believe in and things that you understand. Because most people, here's how they invest. My friend here said this, Elon Musk said this, CNBC said this. And you're investing with what other people think. And you don't understand the investment, and you don't understand the risk you're getting into. And remember, every time you lose money because you didn't understand the risk, exponentially, you're seeing yourself further and further backwards. And it's so easy. If you just go simple, calculated, and slow, you will win the game. Trust me. I've just. I've seen this so many times. So in other words, let's just say you identify for you. You're really into AI and real estate. Let's pick five or six companies that you love to follow anyways. And I like to use the analogy, it's almost like going to the store, even like shopping for a leather jacket. Like, you know, the leather jacket you want, it's Italian and it's got zippers. Think of your investments that way as well. You're going shopping, know the prices and wait till it hits a sale price. And strike. Don't be in a rush. Wait. And as soon as you get that on the sale, guess what it goes. It goes from your liquidity bucket. You bought it on a sale, and it goes into your cash flow bucket. And now your cash flow bucket's growing. And then what do you do next? You Wait for your next sale. Shopping when there's a jolt in the stock market, when crypto has a bad week, when real estate, like in this cycle, real estate is going to go through, it's already started a discounting period. This is the time in those areas, know them well, understand them. And I promise you a couple things if you don't understand them, if your best friend told you about something, but he doesn't have quite the answers, and if it's angel investing or series A, I promise you those are all the top of the bucket. Those are all going to be speculation. You may not think it's speculation. Your friend may tell you it's a sure thing. I just had a very funny AI pitch that was a sure thing until I asked five questions and then I realized it wasn't a sure thing. So again, but at the same time, I'll tell you, on the top of the pyramid, bet on people. I say bet on the jockey, Bet on people that you love and then on areas that you love and people that have track record of winning. And you know what, like, let's say we were to do an investment together on either side. I get to be in relationship with you now. So there's some investment capital and I use a small amount of money. I have a set amount of money at the top of my pyramid. There's small investment chunks, but it's just to get started with something. If that company or that idea is doing well, then I can double down, triple down. So, for instance, I did a deal in Austin. It's a group that has figured out that mushrooms the mycelium, the roots can eat through plastic and they're launching a diaper that comes out. And this person's had repeated success. But I know if that's actually they crack this, it's gonna change plastics in the world. We can save our oceans. I have to be part of that because I believe in the jockey track record. She's already had two big successes and that is a really important thing to me. So why wouldn't I put a little money in there? And I can tell you, I did that investment three years ago. It's just launching. I've already gotten the relationships, the knowledge of me sticking through the cutting edge of how we're gonna get rid of plastic. It's already paying off for me before I see any kind of return on investment. [00:17:43] Speaker B: Because honestly, there's two things that we can't lose. It's our knowledge. It's our knowledge. And truthfully, if we hold our integrity and we build our relationships, that's going to be the gift that keeps giving us. And we've talked about that a lot here. And what I heard in what you just said with your speculation bucket is, folks, 5 to 10% so many times I agree with you. Everybody goes on the next best thing or what everybody's listening to. You know, when I buy, I buy when stocks are on sale, when everybody else is leaving. [00:18:11] Speaker A: Shop on sale. [00:18:12] Speaker C: Yeah. [00:18:13] Speaker B: When everybody else is leaving, they're freaking out and those numbers are in the dumps. Like, that's when I'm buying. Because I know if I invest in the right companies that I know enough about and I'm educated and I look at their economics and I do a lot of research on what I have stocks on as well. But I know that, I know that. I know if I buy it on sale, it's going to go up. [00:18:33] Speaker A: Exactly. And the last piece of this is that once you know your pyramid and where you're trying to get to, then try to come up with your own reinvestment rate. And a reinvestment rate is, if I had to take all my investments and once a year look at my portfolio, what do I want to get as a return on that money that's going to get me to my abundant lifestyle again? We're once again, we're connecting this to an emotion and an experience of how you want to live. It's not just a number out there. And then you get really clear. So, for instance, let's say you have a reinvestment rate of 10% and you had $100,000 to invest, then your goal is to make $10,000 a year. If it's a million dollars, you're trying to make $100,000 a year. And here's a really key point. A lot of people, they trust their financial planners. But as you guys know, you get your statements from these big houses, they don't want to tell you how you're doing. They don't like, they hide it from you. So you really have to stay on top of. And I would really suggest that quarterly, you either find someone, an accountability partner on this, or you find someone that can actually, in English, help you with the reports. So you can see how are you doing on your reinvestment rate. And when I do my reinvestment rate, I have allocation buckets. I have five buckets from the safest. What's the safest? Treasury bills, savings accounts, CDs, and then the most risky, which is my 5, which is only 5 or 10%. That's the speculation. That's the diapers. That's a startup company that's doing diapers with, you know, that's gonna be plastick eating. [00:19:53] Speaker B: It's an AI startup in a lot of cases these days. [00:19:55] Speaker A: Correct, Correct. And it's so much fun to do that. But I know when to stop. I've got. It's almost like I've given myself poker chips to play in that thing. I know when to stop and I know when I find the right person that I want to be in a relationship with. And now I know where it fits. Everything fits and it's really clear. And for me, I've been doing this now for about 10 years after going through interviewing tens and twenties to so many people from the top investment banking houses. And I was so amazed. Jen. They really don't manage money while it's very one dimensional. Get up diversified portfolio of stocks or they'll tell you basic things, but they're not looking at your whole picture and they're not even connecting it to your happiness or your purpose or your relationships or how all these things interact. This money is really important for me. So I can take my kids on the dream vacations. And that's actually what I've done every year as my kids have gotten older. I like to take them for two to four weeks on dream vacations. [00:20:48] Speaker C: I love that with the family. [00:20:49] Speaker A: That's like. And I know when I'm in those dream vacations. We've been all over. We've been to Slovenia, we've taken sailboats, we've been to Japan and there's highly curated. My emotional experience when I'm having those trips is one of gratitude, joy and all that hard work. When I'm having a really hard day at work or something's going on, I know why I'm doing it. And I get all this time being anchored into my why and not just stuck in my how. [00:21:15] Speaker B: Yep, I totally. [00:21:16] Speaker A: Does that make sense? [00:21:17] Speaker B: It does. And unfortunately we do have to, we do have to conclude. But jp, as people are listening to this and they're wanting to learn more, I know you're very big on education. I know you have a podcast. How can people reach out to you? They want to learn more about this. Because a lot of times as entrepreneurs we miss this bucket. And in a previous episode we talked about the rule of 130 and if all your net worth is locked up in your business, it's time to diversify and think about what's going to give me that cash flow. Outside of just my business, how can. [00:21:42] Speaker C: They reach out to you? [00:21:42] Speaker A: Yeah, a great way to start would be to listen to my podcast. A lot of this is on my podcast and it's, it spells it out in detail. And that would be at investing on purpose. And investing on purpose is on all the major, Spotify, Apple, YouTube. You can watch it, you can hear it, but that's a great way to start. And I'd say if you really want more information, my company is called Thrive FP, which is Frank Peters. So thrivefp.com and on there you'll learn a lot about. Again, I do cash flow real estate. So within the pyramid, my specialty is cash flow real estate. Be happy. If you want to look on the site, take a look and any questions, feel free to reach out at that point. All the information is there on the website. [00:22:19] Speaker B: Fantastic. And I want to ask you what is the one thing you want to leave our audience with as an action step that they can take today that will move them forward in this journey? [00:22:26] Speaker A: Yeah, you know, I would say the very first thing to do is know your burn rate. Really know today, it's early in the year, it's January. Take a look at Allocate where you're at. Are you happy? And if not, I call it the Starbucks exercise. Go to Starbucks, go anywhere and take a piece of paper and Write your dream 36 months in the future of what you really want. What does it look like? What does it feel like? And be audacious. Don't stop and say, I can't do that, I can't afford it. Use your muscle of what you actually, really, really want. That is a great place to start. And from there we can do all kinds of fun things as far as the launch of your financial plan. So I'd say your burn rate is step one, the seven steps to four dimensional wealth. Step one is know your burn rate. Step two is the Starbucks exercise. [00:23:11] Speaker B: There you go, you guys have it. Please do this exercise and if you've already got an idea and you're already on this journey, many of us are, it's always a good idea to go through this motion again. To know, am I on track? Am I happy? Can I sleep at night? And what that is because for many of us, our investment number gets kicked down the curb and it just, once we reach it, we forget that we reached what we set out and we start looking at what's next. What's next? It's a good idea to sit down with this exercise and do this. No matter where you are in your process so that you can really embody that and go to sleep at night and feel really good about yourself. We do have to take a brief break. I encourage all of you to reach out to jp, check out his podcast, it is phenomenal. And we will be right back after these messages. [00:23:59] Speaker C: Welcome Back to power CEOs the truth behind the business. And yes, you've got it. It is time for our AI segment of the week. I am here with our resident expert in all things AI, Dr. Alan Badot. Welcome back to the show. [00:24:14] Speaker D: Hi Jen, it's great to be here. [00:24:17] Speaker C: So let's talk about what's happening in the news with regards to AI because a lot of people are like, what is this? I don't understand it, what does it mean for me? And I'm going to start with the executive order that dropped on Tuesday. The White House saying thou shalt get out of the way, expedite permitting, open up the opportunity for electric to AI infrastructure. What does that mean for us in business? [00:24:47] Speaker D: Well, it means, it means a lot of things, quite honestly. There are, I mean we know that there are power challenges. You know, these, these, you know, you can even take a look at mine bitcoin mining and you know, any, any sorts of, of those types of activities. You know, AI is, really causes the systems to just crunch and crunch and crunch and crunch and use power that, you know, many, you know, traditional data centers didn't really have to run into. And you know, as we, as we use AI more, that just simply means we're going to need more power, we're going to need more water, we're going to need all of those resources in order to keep up with our appetite for, you know, these automations and these AI agents. And just fundamentally the power grid cannot sustain some of those. And so you have a couple of options. You can either start looking at nuclear again or you can start looking at building, you know, other, you know, types of. I know I'm going to get in trouble if I say this, but you know, clean coal type of, you know, power, you know, systems in order to, to really help facilitate these, you know, the growth of these systems. And you know, the reality is though, is that, you know, there are not a lot of states that are even contemplating building more power. I know that, you know, a few years ago when I did a study for dhs, you know, West Virginia was the only state that actually, actually exported power. You know, and that's, that's a little bit, that's a little scary. And, but from A business perspective, it gives you some other opportunities. You can start looking at, you know, ways that you can develop software that monitors these things, ways that you can do a lot of other, you know, automated, you know, monitoring of the systems, the infrastructure, you know, those kind of things. But it also gives an opportunity for folks to look at ways that we can try to accelerate AI, but not use so much gpu, not have these large monster models in order to do, you know, everything that you want to get done. There's going to be a real surge in trying to use smaller models to get the same type of work done. And that's, that's an ongoing research area. You know, today that is really just starting to explode. [00:27:13] Speaker C: So basically in business we're always looking at how can we work smarter, not harder. How can we become better, faster, more effective and more efficient. So we're going to start seeing that in AI modeling and how, how they're actually using. Is that what you're suggesting? [00:27:27] Speaker D: Oh, yeah, yeah. You know, it used to be, you know, as software engineers, we always thought, you know, even, you know, even, you know, folks that were developing, you know, simulation models and those of things we always thought the easiest thing to do, let's just throw more compute at it. We can do it faster and we can do it bigger. If we throw more compute at it, we're running out of compute and, you know, we can't keep doing that. So we've got to start looking at ways that we can develop these things more efficient. That means our software has to be more efficient. How we move data around has to be more efficient. How we store data, how we, you know, analyze the data, all of that stuff has to become more efficient. And that's really the only way that we're going to keep up to, you know, with, with the trends that we're seeing. Because let's face it, you know, you can't build a power plant in a year and when the government gets involved and they're telling you to get out of the way, that means that there's regulation, that means there's all those other things that come into play. And we'll be lucky to see a new power plant, especially if it's nuclear in three years. That's, I think that's a wish list, quite honestly. It'll take, you know, a little bit longer than that, I think, because just the realities of that, you know, people don't want it in their backyard. You know, these other, you know, solar type type activities are just not strong enough. They're not, you know, consistent enough to provide the kind of resources that we need in order to do that. [00:28:58] Speaker C: Yeah, and the unpopular, the unpopular public opinion things that, that, that's a PR crisis really that we're going to face. Because when I think about the maturation of the tech industry in general and when I think about AI, like the last couple of years has been like an AI boom, but now we have to start thinking about we have a little bit more limited resources going to take time to build. Let's be real, it takes time to build that anyway. [00:29:22] Speaker D: That's right. [00:29:23] Speaker C: It's not like the lead times on electrical componentry are tomorrow. It's like there's a lot of long lead time involved and so it's going to take time to build the infrastructure. So what do we need, what do we need to do as we entrepreneurs start integrating AI? Because this is going to become a more press forward situation, they're going to be discussing the negative impacts of power and AI and those kind of things more in the news because we know negative news sells. So as the public becomes more aware of that, what do we as business owners have to think about from a priority standpoint so that if we are integrating artificial intelligence and we are being transparent about it, that we don't run risk of, of brand damage with the integrations that we're using? [00:30:12] Speaker D: Yeah, that's a, that's a really, that's a really complex question right there. Because, you know, you want to make sure that you're as transparent as you can be with the models that you're using, how you're trying to sustain, you know, your business at the same time and how it's impacting your customers. But now you've got to think about those other ancillary effects that we haven't had to think of in the past. We always thought, you know, you plug your computer and you develop your model and then you, you know, provide good things for your customers. And then, you know, everything else though is somebody else's problem. You know, it could get to a point where if you're a business owner, you may be paying some sort of carbon tax or some sort of AI tax in order to say, okay, I'm using AI, but now, now I'm taking care of the environment or now I'm doing all those other things that is good for the community. And I hate to say that, but I think that's where we're going to get to eventually, where it's going to be such a competition in order to get some of Those resources until we get up to speed on those, that they are going to find a way to tax it. They're going to find a way to do something that is, is really going to allow them to track it and get that, get that info out to the public who's the biggest consumer, AI resources or you know, those sort of things. And I think you just gotta be careful in how you're doing it, how you're using it, you know, what you're, you know, we always said you got to have an ethics plan for AI. That's the, one of the most important things that you can do. But now maybe your business plan has to start thinking about how much resources are you gobbling up as you're running some of your models. It's going to get to that point. It's not yet, but I think it's going to get there. [00:31:58] Speaker C: So as we, as we think about this as executives, as founders and even as investors, because I want to move into investors and maybe we don't have time before the break to hit that nugget, but we have to be thinking long term about this and what are the implications. And I think that we're in an interesting crossroads because we're at inauguration now. We have a new administration, we have changes to the governmental structure in general. The public has spoken about what they want. They want improved economy, they want a lot of things. How do you see in the tech world and as entrepreneurs that, that, that might play out or shake out because we're, we're all sitting on the sidelines going, okay, what does this mean for us? What does this mean for our business and how does this mean in our AI integrations? [00:32:44] Speaker D: Well, you know, I think the incoming administration, one of the things that they have been focused on very early is, you know, I remember one of the campaign slogans was drill baby, drill. Right? I mean that's what you know, they're trying to do. They are very energy focused on trying, not only trying to sell it, but trying to, to really create more. I think one of the things that you're also seeing is that there are some states, Wyoming is a good example. North Dakota is another example. West Virginia is another example. You know, there are three states right there that are usually at the top of the list as far as having energy, being willing to work with, with businesses to build new data centers, because that's a, that's a big business. And so, you know, that focus and that, that tie in together with a new administration that is really, I would say more positive Toward the, the energy industry just creates additional opportunities for, for business owners to start looking at and doing some smart things around that. [00:33:49] Speaker C: Yeah, thank you for your insights on that. And I'm not going to dive into the investment portion. I think we'll, we'll do that after the break. But as we think about permaculture, sustainability and some of those things, what are some of the key things that you see the companies you working with integrating into their AI and their, their thinking as we move forward? Because I know you work with some enterprise level companies. What are some of the things that are working versus some of the things that maybe we can pass that by because it doesn't work so well. [00:34:19] Speaker D: Yeah, I think, I think their biggest things that they're trying to do are just use models that are much more efficient, you know, and that's hard. That's really hard because now, you know, you've seen some performance on some of these models that are, you know, the 7 to 8 billion parameter models that are doing fairly well against some of the much larger ones. And you know, that is, that's causing a shift with some of these enterprises to say, you know what, maybe we're going to, maybe we're going to try some of these smaller models and we're going to break down the problem even more to see if we can get more specific, more focused on what the actual problem is instead of trying to just model an entire ecosystem. And I think that trend is going to become even more important for these large enterprises because there are not a lot of, you know, folks that can afford their own giant data center. Right. And if you think about it, you've got pretty much everybody is going to wind up using some sort of Amazon or an Oracle or a Google or whoever that is to run their, you know, their, their environments and their systems because they're already established. It's, it's. And you know, those, those, those folks are really going to drive the bus on that. [00:35:33] Speaker C: Thank you for your insights. We are going to take a brief break, but I'm going to bring you back right after the break so we can dive further into these, these conversations. Welcome Back to power CEOs Truth behind the Business. Before the break, we were talking with Dr. Allen about the executive order that came down the pathway that has been paved and opened up for increased AI infrastructure and some of the implications that we have to consider as entrepreneurs. So I want to dive right into the next question. I want to talk about what this. [00:36:04] Speaker B: Means for those of us who are investors because there's a lot of investors. [00:36:08] Speaker C: Who watch this and it's important for our founders and CEOs to understand where's the money going, because that answers some of our questions on strategy. So as this, this executive order has paved the way to kind of get rid of roadblocks to building AI infrastructure and data centers, if you will. What as investors, if we're looking to get into that market, like, what are the considerations that we have? Because it's a lucrative market right now. We know that because we can look at the public documentation and the profitability of the bigs that are in this game. But what do we need to consider? What should we be thinking about when it comes to investing as it comes to artificial intelligence? [00:36:50] Speaker D: Yeah, I think this whole energy dynamic with compute and the algorithms and all those other technologies are really going to, you know, they're, they're converging, they're converging a lot faster than, than many of us thought even it was going to, you know, early last year. And so what that does is it creates some opportunities though for investors to look at companies that are specializing in, you know, certain areas, whether it's, you know, technology breakthroughs and, you know, data center monitoring and automation to, you know, technology breakthroughs, even for, you know, the energy companies themselves and trying to figure out ways that they can do things more efficient, more clean, you know, all those, all those things. And so as you know, these, these large entities continue to really pave the way. There's usually opportunities for smaller businesses to take advantage of that because, you know, they can get hyper focused where, you know, a market size that could be a couple hundred million dollars is big for a small business. But you know, these giant megalith companies and private equity firms, that's, that's not something they're usually going to be interested in because it's just too small for them. So, you know, pay attention to, you know, the things that are happening. Pay attention to the things that, you know, the technology breakthroughs that those folks are coming up with that will allow you to really accelerate your ability to either develop something new, a new algorithm, a new service that you can provide to your customers, or even a new technology itself that will really enhance something else. Because those are the opportunities, I think, that folks usually are not quite paying attention to. But you'll hear three, four or five months down the road, oh, somebody did this. And you're like, oh, darn it, I thought about that. Why didn't I do that? Well, it's going to be an opportunity for many of us to really jump in and, and take advantage of some of those. [00:39:00] Speaker C: Yeah. And I really believe that speed of implementation is everything because if we sit on the fence and we wait six months, that opportunity is going to pass us by. Because if we're thinking about the infrastructure side of things or, or the breakthroughs once it's there, like it's, everybody else is running to catch up. So we want to make sure that we're there in positions uniquely to take advantage of the height of the selling and the exit, honestly, as investors. So I want to ask now a slightly different question because earlier, before the break, you talked about getting the models, AI models getting smaller, more effective, more efficient, niching down to solve very specific problems. And can we use these smaller models that use less of the resources to do the same thing? And so as business owners, there's a lot of us who have sat on the sidelines as executives. We've put planning for AI. We keep kicking it down the curb. And we don't think that the time is now because in the news we're seeing the big companies, Microsoft said we're throwing $80 billion into infrastructure for AI, for example. We see repositioning of the companies that are at the top of the charts. What does that mean for us? And is the time running out for us to start that AI strategy and to get on that bus? [00:40:21] Speaker D: You almost want to think about it as a doomsday clock. I hate to say that, but the clocks, the clock's almost gonna strike midnight. And the problem is, is if you know, the longer you wait, the faster you're gonna have to try to do something, the more likely you're going to make a mistake. And you're, you've got to take that first step. If you haven't done that already, then, you know, you really maybe have a few months in order, maybe in order to, to be able to take advantage of something. Because the problem is, is that you know, somebody else in your market or your industry is already doing it and you're going to try to catch up. And that never works out well. And, you know, it gives you, though, the opportunity to really stand on the shoulders of some other giants that have paved the way. You don't have to try to invent or develop your own large language model. Use the ones that are already out there. There are so many of them that people don't realize, go to hugging face, for goodness sakes, and you'll be able to almost choose from, you know, hundreds of large language models that are out there. Of different sizes. And you can even look for data that can help you train your models if you want to, or you can go to a specialist and they can help you develop them. But it's not that hard anymore. And if people continue to push that down the road and kick the can down the road because they're either, you know, nervous about doing it, oh, they don't have the budget to do that. Well, you got to find the budget. You got to figure out a way that you can do that. Because waiting until 26, you may not be around until 26, because you will feel the impacts within the next two to three months, more than likely because the government is already looking at it. So if you're a contractor, a government contractor, and you're not doing it, you're way behind. If you're in the commercial sector, whether it's the call centers, the medical industry, heck, even mining, for goodness sakes, you're way behind because others are already doing it. And just continuing to wait and make excuses means that either you don't have the knowledge to do that and you really need to go get some, get some assistance on that, or you think that you don't need it. And if you are one of the ones that think that you don't need it, I can give you a ton of examples where folks have said they didn't think they need it and they are almost out of business. [00:42:52] Speaker C: Yeah. And I've seen it as well. We've talked about this before, and it's really important that we're, we're asking ourselves a question. If my competition all of a Sudden has a 40 to 70% reduction in their operating expenses, can I still afford to compete in this marketplace? Because the reality is we think our competition doesn't have this, isn't utilizing this. But the reality is if they are developing this and they're piloting it and they're now rolling it out company wide, they're going to eat us for lunch. And we're seeing that in a couple. [00:43:21] Speaker B: Of industries that are like, no, we don't have tech. [00:43:23] Speaker C: Well, guess what? Those are the most ripe marketplaces. And I hear it all day long. I know you do too. I hear it on the investor front. I hear it on the business strategy front with the clients that I, that I coach. So I know that you have AI ready. You have an AI readiness event coming up. I know you have a tool. I know you work with companies to assess are they ready, and if so, at what, what do they need to do to get ready. Can you talk a little bit about that and then share how we can reach you? [00:43:51] Speaker D: Yeah, we have, we have a process that we use that we, we look at a lot of different things from a technology perspective, from a, a process perspective and even a management perspective. And what we're trying to do is we're trying to help companies get ready. You know, they think they're ready and they're, you know, they take that first step, they realize they're not ready or, you know, their, their processes are old and they're trying to do some different things with it and they just don't really work at the speed that AI works. Agile development is a perfect example of that. When you're using AI to develop code, you know, you don't need a two week sprint anymore, you need a two hour sprint in some cases. And so what you've got to do is you've got to make sure all of those pieces fit together. And what we're trying to do is work with companies, go through an assessment, see where they are, get them built up, give them some ways that they can get some early wins and then when they have those, then they can really start to look at, okay, you know, how do I want to take this to my customer, how do I want to save money internally, you know, increase the capacity of my current employees? All of those things become relevant then. And that's what we're, that's what we're trying to do. And you know, I'm, you know, I talk to folks about this all the time. I talk to it on my show, you know, as well, AI Today with Dr. Alan Badot at, you know, 6:00 Central Time on Wednesdays. And so please pay attention to those things. I'm happy to answer, you know, emails on, on LinkedIn, any of those things are ways that folks can get a hold of me to ask those types of questions. [00:45:29] Speaker C: Fantastic, thank you. And our action step for the day, folks, is if you're not looking at AI, if you don't understand, if you're ready for integration, or if you're thinking about your next integration, today is the day to reach out to Alan, because Alan is there. He has resources that can help you very rapidly assess where you are and help you get to where you need to be. Dr. Allen, thank you so much for joining us again today. [00:45:49] Speaker D: Thanks again, Jen. [00:45:51] Speaker C: And you, yes, you, I'm talking to you. You have an action step. Today is the day for you to get off that bus or get on the bus of AI and understand what can this do for my business, for my company? If you're an investor, today is the day to dive into. What does that executive order actually mean? If I'm in the real estate space, how can I leverage that? What are the things that I can do to take advantage of this train that's coming? And it's going to run us over if we're not on the train. We don't want to be caught on the track. So today's the day to take action. Know where you are, get your baseline, reach out to experts such as myself, such as Dr. Allen on LinkedIn and let's move that train forward so that you are set for inevitable success in your business. Without further ado, all the good things come to an end, including this show. But the good news is we will be here same time, same station next week. So until then, win today, win this week and I'll see you next time.