FACTZ caught up with Patrick Bet David in NYC.
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00:00 Patrick, good to see you my friend.
00:02 Good to see you.
00:03 Good to see you in New York City.
00:04 Yes.
00:05 You have one of the most interesting jobs because for you it's similar to me.
00:07 When someone asks you what do you do for your living, you wear so many hats.
00:09 So what do you explain to someone when they ask you what do you do for a living?
00:12 I would say I'm an entrepreneur, I run businesses, I'm a podcaster, I'm a family guy, but I'm
00:17 a capitalist at the core.
00:19 So what is the main source of income for you would you say?
00:22 The biggest source of income.
00:23 Well, I sold the insurance company.
00:24 So outside of the insurance company today, I don't take any income away from valuetainment
00:27 today.
00:28 I'm not making any choices financially.
00:30 But everything we're making right now with Valuetainment and Bed David Consulting is
00:33 being reinvested.
00:34 Literally everything.
00:35 Into projects, other companies we're running, product development, buildings we're buying,
00:41 that's all reinvested.
00:42 But I've made a lot of good choices in my life financially.
00:45 So I live off of my money that I've made.
00:47 So what's the main goal?
00:48 Like obviously you keep, you know, what gets you excited?
00:51 What are you passionate about right now?
00:53 The vision.
00:54 I think there's real enemies going on today.
00:55 I think there's a lot of real enemies trying to divide people that typically get along.
01:00 You know, we may have differences on four different things and we can hash that out
01:03 and isolate those four things.
01:05 But we probably agree on 28 things.
01:07 I think we're focused way too much on the four, not enough on the 28.
01:11 And I feel like we're going to play our part in making sure we can synergize and unify
01:16 as much as possible.
01:17 So based on that answer, do you see political, you getting more into politics?
01:21 I'm not born here.
01:22 I don't have interest in governorship at all, any of the other jobs, but I will play the
01:26 role of a kingmaker for many years to come.
01:29 What age were you when you made your first million?
01:31 I was 28, 29, 30, late 20s when I made my first million.
01:36 Yeah.
01:37 And so, and you did that through insurance, correct?
01:40 Insurance, yes.
01:41 So what did you do with that million?
01:42 Like once you started making money, were you just kind of re...
01:44 I lived in a two bedroom apartment in Granada Hills.
01:48 I drove a Ford Focus with a quarter million in bank.
01:52 I stayed liquid cash.
01:54 I'm a guy that wanted a lot of savings because I was pursuing the vision long term.
01:58 So I wanted money to be able to reinvest.
02:01 So no, I played a very frugal life for many years.
02:03 So your advice to people financially, do you have one rule that you kind of live by that
02:08 no matter where you are doing well, medium sized income, low income, high income, what's
02:14 the best thing that you learned financially that you can get for just cash flow, even
02:18 cash flow?
02:19 What should people be doing with their money?
02:20 I don't really know.
02:21 I think the first thing is decide who you want to be in your life, how big of a life
02:24 you want to live.
02:25 And don't compare.
02:26 Meaning, if you're the supporting role, and that's what you do, go become a great supporting
02:30 role in the company, be so much of a value to the company that eventually get equity.
02:34 You get shares in a company.
02:36 And if the company goes public, it sells, you make money.
02:38 One of the best advice I got from a Russian businessman, my ex-girlfriend was working
02:45 for him 25 years ago, 22 years ago.
02:48 And I sat with him one day, I said, "What's the key to making a lot of money?"
02:50 He said, "Never work for a sexy company."
02:53 I said, "What do you mean?"
02:54 He said, "Never work for a sexy established company, because you're irrelevant.
02:59 If you get fired or you quit, they don't know who you are."
03:02 He says, "Go work for a smaller company, help it become big, be a voice, be a leader, own
03:08 a piece of the company, and eventually become wealthy."
03:10 So whether that's the life you want to live, or you want to build a company, operate a
03:14 company, that's a different life.
03:16 You're an investor, influencer, content creator, choose the route on how you want to make money.
03:22 Then get philosophically clear on your money.
03:24 Don't get too arrogant.
03:25 Don't get too cocky.
03:27 Don't get too reckless with the money you make and the money you spend.
03:30 Let's just say you have a big month, money comes in, don't go buy a watch you can't afford
03:34 because your monthly income is not the steady one.
03:37 But yeah, so pick and choose what kind of a life you want to live.
03:41 Then when it comes down to money, get your philosophies clear with finances, and then
03:44 do not be too reckless with your money.
03:46 I'm a guy that's cash is king philosophy.
03:48 When the Yankees called and had the opportunity to be minority owner, the only reason we could
03:53 get that done is because I have cash.
03:55 If I didn't have cash, the first thing they want to see is your finances.
03:58 So cash is king in my opinion.
03:59 Whether you're making 60 grand a year, or you're making 20 million.
04:03 Yeah, yeah.
04:04 Real estate market.
04:05 I see someone like me, I'm trying to go into place, but the prices have went crazy high.
04:06 And some people aren't getting paid enough to even afford those prices with inflation.
04:07 Any advice to people as far as what they should do?
04:08 As far as in the real estate game right now, and again, I know that might not be your expertise,
04:19 might not be a black belt on it, but you do know how to properly, you know financial freedom
04:26 in a way.
04:27 Well, I mean, here's what's wild.
04:29 So yesterday, interest rates were 30 or fixed for somebody with a 720 credit is 8%.
04:34 As of yesterday, a little over 8%.
04:36 What does this mean?
04:37 A year and a half ago it was 3%.
04:39 So we did the math.
04:40 If you want to get a $500,000 loan, a year and a half ago, at 3%, your payment is $2,100.
04:51 The same exact $500,000 loan, today, at 8%, is $3677.
04:57 Let me say this again.
04:58 From $2,100 to $3,700.
05:01 What the bank is going to do to where you find out if you can afford that income, you
05:05 take that income, you divide it by 36%.
05:09 So if you take $2,100, it's going to show $5,500, which means the bank's going to say,
05:13 do you make $5,500 a month to be able to afford a $500,000 loan?
05:16 That's how the bank is going to do the math.
05:19 Do you know today, to afford that same $500,000 loan, at 8%, went from $5,500 income to $10,000
05:26 a month.
05:27 People didn't double their income in the last year and a half, 80%.
05:30 So it's a very valid question you're asking.
05:32 So now you may say, well, people aren't selling their homes.
05:34 They're not dumping them.
05:36 They're not dropping it at 20, 30, 40% discount.
05:38 So why is that happening?
05:40 This is kind of confusing.
05:43 It's because people still have some cash.
05:45 People are saving their low interest rates that they have.
05:48 They don't want to sell a house, gain $200,000 in equity, and go buy another house at 8%.
05:53 That just doesn't make any real sense to do something like that.
05:56 But eventually, this is going to flip.
05:59 Meaning, the economy is eventually going to say, hey, you've got to either sell the house,
06:04 rents are going to stay here, or you have to buy a house, or you're going to be renting
06:08 for a while, so if we stay in this interest rate for too long of a time, people will become
06:12 minimalist, renting is going to go up, you're going to get more of these black rock companies
06:16 that are going to buy these bigger buildings and rent them out because they know you can't
06:18 afford to buy a house.
06:21 It's a very weird, weird economy today.
06:24 Cash buyers are buying houses, no problem.
06:26 Like commercial right now, property two years ago was an $89 million property in my area,
06:32 Fort Lauderdale.
06:33 Then it goes to $69 million.
06:35 Then $59 million.
06:37 Today they will dump that property at $32 million.
06:40 $89 to $32 million because eight buildings in many communities, you don't have the kind
06:46 of workers that they want.
06:47 People are working from home right now.
06:49 People are working from Zoom right now.
06:50 But eventually, this thing's going to figure itself out.
06:53 But it is a very difficult time for the average person to want to buy a house with the 8%
06:59 interest rate.
07:00 - You lived an insane life.
07:01 You didn't come with money.
07:02 Do you consider yourself even new money?
07:03 Not even new money, but you're a self-made guy.
07:04 I think people respect that.
07:05 What's something that you love to tell yourself, your younger self?
07:06 If you had three rules to tell younger people like that, maybe you learned on your way,
07:07 the most three important rules that you wish you could tell your younger self.
07:08 - It's a good question.
07:09 I would say my philosophies got clear when I figured out that I was going to be a business
07:10 man.
07:11 I was going to be a business man.
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