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How do you handle stressful situations? Everyone's built a little different — some people can take their hits on the chin and come out smiling. But not everyone can take those hits. The pandemic has taken its mental toll on so many people. Others might still be struggling with past traumas and dealing with anxiety. Their situation keeps them in a state of constant worry and hypervigilance. That state of mind doesn't only harm their mental and emotional health — it can make them sick and more prone to physical diseases. More than ever, it's time to begin mental healing from past traumas, so we can better cope with our daily stresses.  Dr Don Wood joins us again in this episode to talk about the TIPP program and how it facilitates mental healing. He explains how our minds are affected by traumas and how these can affect our health and performance. If we want to become more relaxed, we need to learn how to go into the alpha brainwave state. Since mental healing is not an immediate process, Dr Don also shares some coping strategies we can use in our daily lives.  If you want to know more about how neuroscience can help you achieve mental healing, then this episode is for you.    Here are three reasons why you should listen to the full episode: Learn how trauma can put you in a constant state of survival and affect your performance and daily life.  Understand that it's not your fault. Achieving mental healing will require you to learn how to go into an alpha brainwave state.  Discover healthy habits that will keep you from entering survival mode.   Resources Gain exclusive access and bonuses to Pushing the Limits Podcast by becoming a patron!  A new program, BOOSTCAMP, is coming this September at Peak Wellness! Listen to other Pushing the Limits episodes:  #183: Sirtuin and NAD Supplements for Longevity with Dr Elena Seranova #189: Understanding Autophagy and Increasing Your Longevity with Dr Elena Seranova  #199: How Unresolved Trauma Prevents You from Having a Healthy Life With Dr Don Wood Check out Dr Don Wood's books:  Emotional Concussions: Understanding How Our Nervous System is Affected By Events and Experiences Throughout Our Life You Must Be Out Of Your Mind: We All Need A Reboot   Connect with Dr Don Wood: Inspired Performance Institute I Facebook I LinkedIn     Get Customised Guidance for Your Genetic Make-Up For our epigenetics health programme, all about optimising your fitness, lifestyle, nutrition and mind performance to your particular genes, go to  https://www.lisatamati.com/page/epigenetics-and-health-coaching/.   Customised Online Coaching for Runners CUSTOMISED RUN COACHING PLANS — How to Run Faster, Be Stronger, Run Longer  Without Burnout & Injuries Have you struggled to fit in training in your busy life? Maybe you don't know where to start, or perhaps you have done a few races but keep having motivation or injury troubles? Do you want to beat last year's time or finish at the front of the pack? Want to run your first 5-km or run a 100-miler? ​​Do you want a holistic programme that is personalised & customised to your ability, goals, and lifestyle?  Go to www.runninghotcoaching.com for our online run training coaching.   Health Optimisation and Life Coaching If you are struggling with a health issue and need people who look outside the square and are connected to some of the greatest science and health minds in the world, then reach out to us at support@lisatamati.com, we can jump on a call to see if we are a good fit for you. If you have a big challenge ahead, are dealing with adversity, or want to take your performance to the next level and learn how to increase your mental toughness, emotional resilience, foundational health, and more, then contact us at support@lisatamati.com.   Order My Books My latest book Relentless chronicles the inspiring journey about how my mother and I defied the odds after an aneurysm left my mum Isobel with massive brain damage at age 74. The medical professionals told me there was absolutely no hope of any quality of life again. Still, I used every mindset tool, years of research and incredible tenacity to prove them wrong and bring my mother back to full health within three years. Get your copy here: https://shop.lisatamati.com/collections/books/products/relentless. For my other two best-selling books Running Hot and Running to Extremes, chronicling my ultrarunning adventures and expeditions all around the world, go to https://shop.lisatamati.com/collections/books.   Lisa's Anti-Ageing and Longevity Supplements  NMN: Nicotinamide Mononucleotide, an NAD+ precursor Feel Healthier and Younger* Researchers have found that Nicotinamide Adenine Dinucleotide or NAD+, a master regulator of metabolism and a molecule essential for the functionality of all human cells, is being dramatically decreased over time. What is NMN? NMN Bio offers a cutting edge Vitamin B3 derivative named NMN (beta Nicotinamide Mononucleotide) that can boost the levels of NAD+ in muscle tissue and liver. Take charge of your energy levels, focus, metabolism and overall health so you can live a happy, fulfilling life. Founded by scientists, NMN Bio offers supplements of the highest purity and rigorously tested by an independent, third party lab. 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Manufactured in an ISO9001 certified facility Boost Your NAD+ Levels — Healthy Ageing: Redefined Cellular Health Energy & Focus Bone Density Skin Elasticity DNA Repair Cardiovascular Health Brain Health  Metabolic Health   My  ‘Fierce' Sports Jewellery Collection For my gorgeous and inspiring sports jewellery collection, 'Fierce', go to https://shop.lisatamati.com/collections/lisa-tamati-bespoke-jewellery-collection.   Episode Highlights [06:05] The Pandemic-Induced Mental Health Crisis The pandemic forced many people into a state of freeze mode, not the typical fight or flight response.  As people get out of freeze mode, there will be a rise in mental health issues.  Teenagers are robbed of the opportunity to develop social and communication skills during this time.  [08:24] How Dr Don Wood Started Studying Traumas Dr Don's wife grew up in a household with an angry father who instilled fear. He used to think that she would be less anxious when they started to live together, but she struggled with mental healing.  She had an inherent belief that misfortune always follows good things. Her traumas and fears also led to a lot of health issues.  She also was hyper-vigilant, which she used as a protective mechanism. However, this prevented her from being relaxed and happy. A person's environment can dictate whether they go into this hyper-vigilant state, but genetics can also play a factor.  [15:42] How Trauma Affects the Brain Trauma is caused by a dysregulation of the subconscious. If your brain is in survival mode, it will access data from the past and create physiological responses to them. These emotions demand action, even when it is no longer possible or necessary. This dysregulation prevents you from living in the present and initiating mental healing.  In this state, people can be triggered constantly, which interferes with their day-to-day life.  [21:07] The Role of the Subconscious Your conscious mind only takes up around 5%, while the subconscious takes up 95%. Your subconscious mind cannot tell the difference between real and imagined.  In survival mode, people will keep replaying the past and think about different scenarios and decisions.  You're left stuck because the subconscious mind only lives in the now. It does not have a concept of time.  This process is the brain trying to protect you. [25:04] What Happens When You're Always in Survival Mode Being in survival mode will take a physical toll since it's constantly activating the nervous system, increasing cortisol and adrenaline. When you're in this state, your body and mind cannot work on maintenance and recovery. It is more focused on escaping or fixing perceived threats. Over time, this will affect your immune system and make you sick.  To truly achieve mental healing, you need to get to the root cause of your problems.  However, you also have to develop coping strategies to manage your day-to-day activities.  [30:18] Changing Your Brainwave State Traumatic events are usually stored in a beta brainwave state. Changing your response to traumatic events starts with going into an alpha brainwave state.  The beta state is usually from 15 - 30 hertz, while the alpha is lower at 7 - 14 hertz. Anything below that is the delta state, usually when you're in deep meditation or sleep. People who have trouble sleeping are usually in that beta state, which keeps processing information.  It's only in the delta state that your mind and body start the maintenance phase. This phase helps not only with mental healing but also physical recovery.  Learn more about Lisa and Dr Don's personal experiences with these brainwave states in the full episode!  [34:30] Mental Healing and Physical Recovery Starts with the Brain Recovery is about genetics and the environment. In sleep, your mind will always want to deal with the threats first. It can only get to the delta state once it finishes processing these dangers. Your risk for developing sickness and depression rises if your brain can't do maintenance. Living in the beta state will make it difficult to focus.  [41:40] It's Not Your Fault If you have a lot of trauma, you are predisposed to respond in a certain way. It's not your fault.  There's nothing wrong with your mind; you just experienced different things from others.  Dr Don likened this situation to two phones having a different number of applications running.  Predictably, the device that runs more applications will have its battery drained faster.  [44:05] Change How You Respond Working on traumas requires changing the associative and repetitive memory, which repeats responses to threats. You cannot change a pattern and get mental healing immediately—it will take time.  That's the reason why Dr Don's program has a 30-day recovery phase dedicated to changing your response pattern.  Patterns form because the subconscious mind sees them as a beneficial way of coping with traumas.  This function of your subconscious is how addictions form.  [47:04] Why We Can Be Irrational The subconscious lives only in the present. It does not see the future nor the past.  It will want to take actions that will stop the pain, even if the actions are not rational.  At its core, addiction is all about trying to stop the pain or other traumatic experiences.  Survival mode always overrides reason and logic because its priority is to protect you. [50:57] What to Do When You're in Survival State In this survival state, we're prone to movement or shutting down completely.  The brain can stop calling for emotions to protect you, and this is how depression develops.  When in a depressed state, start moving to initiate mental healing. Exercise helps burn through cortisol and adrenaline.  Once your mind realises there's no action required for the perceived threats, the depression will lift.   [53:24] Simple Actions Can Help There's nothing wrong with you.  Don't just treat the symptom; go straight to the issue.  Don't blame genetics or hormonal imbalances for finding it hard to get mental healing. Find out why.  Also, seek things that will balance out your hormones. These can be as simple as walking in nature, taking a break, and self-care.  [56:04] How to Find a Calming Symbol Find a symbol that will help you go back into the alpha brainwave state.  Lisa shares that her symbol is the sunset or sunrise, and this helps her calm down. Meanwhile, Dr Don's are his home and the hawk.  Having a symbol communicates to all parts of your brain that you're safe.  [59:58] The Power of Breathing  Stress may lead to irregular breathing patterns and increase your cortisol levels and blood sugar. Breathing exercises, like box breathing, can also help you calm down because the brain will take higher oxygen levels as a state of safety.  If you're running out of oxygen, your brain will think you're still in danger.  Make sure that you're breathing well. It's also better to do nasal breathing.    7 Powerful Quotes ‘The purpose of an emotion is a call for an action. So the purpose of fear is to run.' ‘People who have a lot of trauma have trouble sleeping. Because not only is their mind processing what it experienced during the day, it's also taking some of those old files saying “Well, okay, let's fix that now. Right. Let's get that.”' ‘I was getting maximum restorative sleep. So an injury that I would have that could heal in two or three days, my teammates would two or three weeks. Because they were living in these, which I didn't know, a lot of my friends were dealing with trauma: physical, emotional, sexual abuse.' ‘There's nothing wrong with anybody's mind. Everybody's mind is fine except you are experiencing something different than I experienced so your mind kept responding to it, and mine didn't have that.' ‘That dysregulation of the nervous system. That's what we want to stop because that is what is going to affect health, enjoyment of life, and everything else.' ‘I talked about addiction as a code. I don't believe it's a disease. Your mind has found a resource to stop pains and your subconscious mind is literal. It doesn't see things as good or bad, or right or wrong.' ‘If there's a survival threat, survival will always override reason and logic because it's designed to protect you.'   About Dr Don Dr Don Wood, PhD, is the CEO of The Inspired Performance Institute. Fueled by his family's experiences, he developed the cutting-edge neuroscience approach, TIPP. The program has produced impressive results and benefited individuals all over the world.  Dr Wood has helped trauma survivors achieve mental healing from the Boston Marathon bombing attack and the Las Vegas shooting. He has also helped highly successful executives and world-class athletes. Marko Cheseto, a double amputee marathon runner, broke the world record after completing TIPP. Meanwhile, Chris Nikic worked with Dr Wood and made world news by becoming the first person with Down Syndrome to finish an Ironman competition. Interested in Dr Don's work? Check out The Inspired Performance Institute. You can also reach him on Facebook and LinkedIn.    Enjoyed This Podcast? If you did, be sure to subscribe and share it with your friends! Post a review and share it! If you enjoyed tuning in, then leave us a review. You can also share this with your family and friends so they can learn steps to mental healing. Have any questions? You can contact me through email (support@lisatamati.com) or find me on Facebook, Twitter, Instagram and YouTube. For more episode updates, visit my website. You may also tune in on Apple Podcasts. To pushing the limits, Lisa   Transcript Of Podcast Welcome to Pushing the Limits, the show that helps you reach your full potential with your host Lisa Tamati, brought to you by lisatamati.com.  Lisa Tamati: Hi, everyone and welcome back to Pushing the Limits. Today, I have Dr Don Wood who, you may recognise that name if you listen to the podcast regularly. He was on the show maybe a couple of months ago, and he is the CEO and founder of The Inspired Performance Institute. He's a neuroscience guy, and he knows everything there is to know about dealing with trauma and how to get the mind back on track when you've been through big, horrible life events or some such thing. Now, when we talked last time, he shared with me his methodology, the work that he's done, how he can help people with things like addictions as well and depression, and just dealing with the stresses of life, whether they be small stressors or big stressors.  We got to talking about my situation and the stuff that I've been through in the last few years, which many of you listeners know, has been pretty traumatic. From losing babies, to losing my dad, to mom's journey. So I was very privileged and lucky to have Dr Don Wood actually invite me to do his program with him. We share today my stories, how I went with that, and he explains a little bit more in-depth the neuroscience behind it all and how it all works. So if you're someone who's dealing with stress, anxiety, PTSD, depression, if you want to understand how the brain works and how you can help yourself to deal with these sorts of things, then you must listen to the show. He's an absolutely lovely, wonderful person.  Now, before we get over to the show, I just love you all to do a couple of things for me. If you wouldn't mind doing a rating and review of the show on Apple, iTunes or wherever you listen to this, that would be fantastic. It helps the show get found. We also have a patron program, just a reminder if you want to check that out. Come and join the mission that we're on to bring this wonderful information to reach to people.  Also, we have our BOOSTCAMP program starting on the first of September 2021. If you listen to this later, we will be holding these on a regular basis so make sure you check it out. This is an eight-week live webinar series that my business partner, my best buddy, and longtime coach Neil Wagstaff and I will be running. It's more about upgrading your life and helping you perform better, helping you be your best that you can be, helping you understand your own biology, your own neuroscience, how your brain works, how your biology works. Lots of good information that's going to help you upgrade your life, live longer, be happier, reduce stress, and be able to deal with things when life is stressful. God knows we're all dealing with that. So I'd love you to come and check that out. You can go to peakwellness.co.nz/boostcamp.  I also want to remind you to check us out on Instagram. I'm quite active on Instagram. I have a couple of accounts there. We have one for the podcast that we've just started. We need a few more followers please on there. Go to @pushingthelimits for that one on Instagram, and then my main account is @lisatamati, if you want to check that one out. If you are a running fan, check us out on Instagram @runninghotcoaching and we're on Facebook under all of those as well. So @lisatamati, @pushingthelimits, and @runninghotcoaching.  The last thing before we go over to Dr Don Wood, reminder check out, too, our longevity and anti-aging supplement. We've joined forces with Dr Elena Seranova and have NMN which is nicotinamide mononucleotide, and this is really some of that cooler stuff in the anti-aging, and longevity space. If you want to check out the science behind that, we have a couple of podcasts with her. Check those out and also head on over to nmnbio.nz. Right. Over to the show with Dr Don Wood.  Hi, everyone and welcome back to Pushing the Limits. Today, I have a dear, dear friend again who's back on the show as a repeat offender, Dr Don Wood. Dr Don Wood: I didn't know I was a repeat offender. Oh, I'm in trouble. That's great.  Lisa: Repeat offender on the show. Dr Don, for those who don't know, was on the show. Dr Don is a trauma expert and a neuroscientist, and someone who understands how the brain works, and why we struggle with anxiety, and depression, and post-traumatic stress disorder. We did a deep dive last time, didn't we, into the program that you've developed. Since then, everyone, I have been through Dr Don's pro program. He kindly took me through it. Today, I want to unpack a little bit of my experiences on the other side, s the client, so to speak. Talk about what I went through.  Dr Don, so firstly, welcome to the show again. How's it all over in your neck of the woods? Dr Don: Well, it's awesome over here in Florida. COVID is basically non-existent. Oh, yeah. Well, in terms of the way people are treating it, that's for sure. Very few people you see in masks now, everything is pretty much wide open. You can't even get reservations at restaurants. It's unbelievable. The economy is exploding here. There's so much going on. Yeah, I know the rest of the country, a lot of different places are still struggling with whether they're going to put mask mandates back on and all this kind of stuff but Florida seems to be doing very well.  Lisa: Well, I'm very glad to hear that because any bit of good news in this scenario is good because this keeps coming and biting everybody in the bum.  Dr Don: I know. Especially down there. You guys are really experiencing quite severe lockdowns and things, right? Lisa: Yeah and Australia, more so. Australia has gone back into lockdown. I've got cousins in Sydney who are experiencing really hard times in Melbourne and we've stopped the trans-Tasman bubble at the moment. Trans-Tasman was open for business, so to speak, with Australians being able to come to New Zealand without quarantine, but it's been shut down again. So yeah, we're still struggling with it, and the economy is still struggling with it but actually, in our country, we've been very lucky that we've managed to keep it out because they've had such tight controls on the borders. But yes, it's a rocky road for everybody, and it's not over yet, I think. Dr Don: Looks like it's going to continue, and that's creating a lot of stress.  Lisa: Oh, yeah, perfect.  Dr Don: This is what I've said. I think we're coming up to a tsunami of mental health issues because a lot of people have gone into freeze mode as opposed to fight or flight. Some people are in fight or flight. You're hearing about that on airlines: people just losing it, and getting mad, and fighting with flight attendants and passengers, and you see a lot of that. But I think that's obviously not the majority. I think most people are in that mode of just get through this, do what they ask, don't cause any waves, and just get this over with. So that's a freeze mode, and I think when people come out of freeze, you're going to start to see some of these mental health issues.  Lisa: Yes, I totally agree and I'm very concerned about the young people. I think that being hit very hard especially in the places that have the hardest lockdowns. If you're going through puberty, or you're going through teenagehood, or even the younger kids, I think, they're going to be affected massively by this because it's going to be a big before and after sort of situation for them.  Dr Don: And just the social. When we were teenagers, social was everything, I suppose. Learning how to communicate, and talk, and get along with other people, and good and bad. There were always struggles in school with learning how to get along with everybody but that is just sort of squashed. It's going to be fascinating to see when they do a study on the real true results of this pandemic. It's going to be a lot different than many people think.  Lisa: Yes, and I think the longer you ignore stuff, is we're going to see it's not just the people are unfortunately dying and being very sick from the actual COVID, but the actual effects on society are going to be big. That's why talking about the topic that we're talking about today, dealing with anxiety, and dealing with stress, and being able to actually fix the problem instead of just managing the problem, which I know you're big on.  So let's dive in there, and let's recap a little bit. Just briefly go back over your story, how you got to here, and what your method sort of entails in a helicopter perspective. Dr Don: Yeah, basically how I developed this was really because of the life that my wife led first and my daughter. My wife grew up in a very traumatic household with a very angry father that created tremendous fear. So everybody was... Just constant tension in that household. When I met her, I just realised how this was so different than my life. My life was in the complete opposite: very nurturing, loving. So I didn't experience that. I thought when she started moving in and we got married at 19, we were very young, that this would all stop for her. Because now, she's living in my world, my environment, and it didn't.  She just kept continuing to feel this fear that something was going to go wrong and nothing is going to go right. She struggled with enjoying things that were going well. I would say to her, 'We've got three beautiful children. We've got a beautiful home. Everything's going pretty good; nothing's perfect. You have your ups and downs, but it's generally a pretty good life.' She couldn't enjoy that because as a child, whenever things were going okay, it would quickly end and it would end, sometimes violently. So the way she was protecting herself is don't get too excited when things are going well because you'll get this huge drop. So that was what she was doing to protect herself. I just had a lady come in here a couple months ago, who very famous athlete is her husband: millionaires, got fame, fortune, everything you want, but she had a lot of health issues because of trauma from her childhood. When I explained that to her, she said, 'That's me. Your wife is me. I should be enjoying this, and I can't get there. I want to. My husband can't understand it.' But that's really what was going on for her too. Lisa: So it's a protective mechanism, isn't it? To basically not get too relaxed and happy because you've got to be hyper-vigilant, and this is something that I've definitely struggled with my entire life. Not because I had a horrible childhood. I had a wonderful childhood but I was super sensitive. So from a genetic perspective, I'm super sensitive. I have a lot of adrenaline that makes me code for, for want of a better description, I'm very emotionally empathetic but it also makes me swung by emotional stimuli very much. So someone in my environment is unhappy, I am unhappy. I'm often anxious and upset. My mum telling me she took me to Bambi. You know the movie Bambi? From Disneyland? She had to take me out of theatre. I was in distraught.  That's basically me. Because Bambi's mother got killed, right? I couldn't handle that as a four-year-old, and I still can't handle things. Things like the news and stuff, I protect myself from that because I take everything on. It's even a problem and in our business service situations because I want to save the world. I very much take on my clients' issues. I'm still learning to shut gates afterwards, so to speak, when you're done working with someone so that you're not constantly... So there's a genetic component to this as well.  Dr Don: Absolutely. So yours was coming from a genetic side but that's very, very common amongst people who have had a traumatic childhood. They're super sensitive.  Lisa: Yes. Hyper-vigilant.  Dr Don: Hyper-vigilant. That was my wife. She was constantly looking for danger. We'd come out of the storage and go: 'Can you believe how rude that clerk was?' 'What do you mean she was rude? How was she rude?' ‘You see the way she answered that question when I asked that, and then the way she stuffed the clothes in the bag?' And I'm like, 'Wow.' I never saw her like that. She was looking for it because that's how she protected herself because she had to recognise when danger was coming. So it was protection, and I hadn't experienced that so that made no sense to me; it made perfect sense to her.  Lisa: Yeah, and if someone was rude to you, you would be just like, 'Well, that's their problem, not my problem, and I'm not taking it on.' Whereas for someone your wife and for me... I did have a dad who was  a real hard, tough man, like old-school tough. We were very much on tenterhooks so when they came home, whether he was in a good mood today or not in a good mood. He was a wonderful, loving father but there was that tension of wanting to please dad. Mum was very calm and stable, but Dad was sort of more volatile and just up and down. It was wonderful and fun and other times, you'd be gauging all of that before he even walked in the door. That just makes you very much hyper-vigilant to everything as well.  Then, you put on, on top of that, the genetic component. You've got things like your serotonin and your adrenaline. So I've got the problem with the adrenaline and a lack of dopamine. So I don't have dopamine receptors that stops me feeling satisfaction and... Well, not stops me but it limits my feeling of, 'Oh, I've done a good job today. I can relax.' Or of reward. And other people have problems, I don't have this one, but with a serotonin gene, which is they have dysregulation of their serotonin and that calm, and that sense of well-being and mood regulation is also up and down. While it's not a predisposition that you'll definitely going to have troubles because you can learn the tools to manage those neurotransmitters and things like nutrition and gut health and all that aspect. Because it's all a piece of that puzzle, but it's really just interesting, and it makes you much more understanding of people's differences.  Why does one person get completely overwhelmed in a very trivial situation versus someone else who could go into war and come back and they're fine? What is it that makes one person? Then you got the whole actual neuroscience circuitry stuff, which I find fascinating, what you do. Can you explain a little bit what goes on? Say let's just pick a traumatic experience: Someone's gone through some big major trauma. What is actually going on in the brain again? Can we explain this a little bit?  Dr Don: Yeah, this is one of the things that... When I did my research, I realised this is what's causing the dysregulation: is your subconscious your survival brain is fully present in the moment all the time. So everything in that part of our brain is operating in the present. which is what is supposed to be, right? They say that that's the key, that success and happiness is live in the present. Well, your survival brain does that. The problem comes in is that only humans store explicit details about events and experiences. So everything you've seen, heard, smelled, and touched in your lifetime has been recorded and stored in this tremendous memory system. Explicit memory.  Animals have procedural memory or associative memory. We have that memory system too. So we have both. They only have procedural, associative. So they learn through repetition, and they learn to associate you with safety and love, but they don't store the details about it. But we store all the details about these events and experiences. So this is where this glitch is coming in. If you've got the survival brain, which is 95% of everything that's going on, operating in the present, accessing data from something that happened 10 years ago because something looks like, sounds like, smells like it again, it's creating a response to something that's not happening. It's looking at old data and creating a physiological response to it, and the purpose of an emotion is a call for an action. So the purpose of fear is to run, to escape a threat. But there's no threat. It's just information about the threat. That disrupts your nervous system and then that creates a cascade of chemical reactions in your body because your mind thinks there's an action required. Lisa: This is at the crux of the whole system really, isn't it? This is this call for action to fix a problem that is in the past that cannot be fixed in the now. So if we can dive a little bit into my story, and I'm quite open on the show. I'm sharing the good, the bad, and the ugly. When I was working with Dr Don, I've been through a very, very traumatic few years really. Lost my dad, first and foremost, last July, which was the biggest trauma of my life. And it was a very difficult process that we went through before he died as well. And there's a lift, as you can imagine, my brain in a state of every night nightmares, fighting for his life, he's dying over, and over, and over, and over again.  Those memories are intruding into my daily life, whereas in anything and at any time, I could be triggered and be in a bawling state in the middle of the car park or the supermarket. Because something's triggered me that Dad liked to to buy or Dad, whatever the case was, and this was becoming... It's now a year after the event but everything was triggering me constantly. Of course, this is draining the life out of you and interfering with your ability to give focus to your business, to your family, to your friends, every other part of your life. I'd also been through the trauma of bringing Mum back from that mess of aneurysm that everyone knows about. The constant vigilance that is associated with bringing someone back and who is that far gone to where she is now, and the constant fear of her slipping backwards, and me missing something, especially in light of what I'd been through with my father. So I'd missed some things, obviously. That's why he ended up in that position and through his own choices as well.  But this load, and then losing a baby as well in the middle, baby Joseph. There was just a hell of a lot to deal with in the last five years. Then, put on top of it, this genetic combination of a hot mess you got sitting before you and you've got a whole lot of trauma to get through. So when we did the process, and I was very, super excited to do this process because it was so intrusive into my life, and I realised that I was slowly killing myself because I wasn't able to stop that process from taking over my life. I could function. I was highly functional. No one would know in a daily setting, but only because I've got enough tools to keep my shit together. so to speak. But behind closed doors, there's a lot of trauma going on.  So can you sort of, just in a high level, we don't want to go into the details. This is a four-hour program that I went through with Dr Don. What was going on there. and what did you actually help me with?  Dr Don: So when you're describing those things that were happening to you, what was actually happening to your mind is it was not okay with any of that. It wanted it to be different, right? So it was trying to get you into a state of action to stop your father from dying: Do it differently. Because it kept reviewing the data. It was almost looking at game tape from a game and saying 'Oh, had we maybe run the play that way, we would have avoided the tackle here.' So what your mind was saying 'Okay, run that way.' Well, you can't run that way. This is game tape. Right? But your mind doesn't see it as game tape. It sees it as real now, so it's run that way. So it keeps calling you into an action.  And especially with your dad because you were thinking about, 'Why didn't I do this?' Or 'Had I just done this, maybe this would have happened.' What your mind was saying is, 'Okay, let's do it. Let's do that.' What you just thought about. But you can't do that. It doesn't exist. It's information about something that happened but your mind sees it as real. That's why Hollywood have made trillions of dollars because they can convince you something on the screen is actually happening. That's why we cry in a movie or that's why we get scared in a movie. Because your mind, your subconscious mind cannot tell the difference between real or imagined. So that's actually happening.  You were just talking about the movie with Bambi, right? When you were little. 'Why is nobody stopping this from happening?' So your mind was not okay with a lot of these things that were happening, and it kept calling you to make a difference. That's what I never understood my wife doing. That before I really researched this, my wife would always be saying, 'Don't you wish this hadn't have happened?' Or 'Don't you wish we hadn't done this?' What I didn't understand at the time, because I used to just get like, 'Okay, whatever.' She'd go, 'Yeah, but wouldn't it have been better?' She wanted to get me into this play with her, this exercise. Lisa: This is going on in her head. Dr Don: Because it's going on in her head, and she's trying to feel better. So she's creating these scenarios that would make her feel like, 'Well, if I had just done that, gosh that would have been nice, thinking about that life.' And her mind seeing that going, 'Oh, that would be nice. Well, let's do that. Yes.' So she was what if-ing her life. And it was something that she did very early as a child because that's how she just experienced something traumatic with her father. In her mind, she'd be going, 'Well, what if I had to just left 10 minutes earlier, and I had have escaped that?' Or 'What if I hadn't done this?' So that's what she was doing. It made no sense to me because I hadn't experienced her life, but that's what she was doing. Her mind was trying to fix something. It's never tried to hurt you. It was never, at any point, trying to make you feel bad. It was trying to protect you. Lisa: Its job is to protect you from danger and it sees everything as you sit in the now so it's happening now. I love that analogy of these... What was it? Two-thirds of the car or something and... Dr Don: So goat and snowflake? Lisa: Goat and snowflake. And they're going off to a meeting and they're late. And what does the goat says to snowflake or the other way around? Dr Don: So snowflake, which is your conscious mind, your logical reasonable part of your mind, there's only 5, says the goat 95%, which is your subconscious mind. Who runs into a traffic jam says, 'Oh, we're going to be late. We should have left 15 minutes earlier.' To which goat replies 'Okay, let's do it. Let's leave 15 minutes earlier because that would solve the problem.'  Lisa: That analogy is stuck in my head because you just cannot... It doesn't know that it's too late and you can't hop into the past because it only lives in the now. This is 95% of how our brain operates. That's why we can do things like, I was walking, I was at a strategy meeting in Auckland with my business partner two days ago. We were walking along the road and he suddenly tripped and fell onto the road, right? My subconscious reacted so fast, I grabbed him right, and punched him in the guts. I didn't mean to do that but my subconscious recognised in a millimeter of a second, millionth of a second, that he was falling and I had to stop him. So this is a good side of the survival network: stopping and falling into the traffic or onto the ground.  But the downside of it is that brain is operating only in the now and it can't... Like with my father, it was going 'Save him. Save him. Save him. Why are you not saving him?' Then that's calling for an action, and then my body is agitated. The cortisol level's up. The adrenaline is up, and I'm trying to do something that's impossible to fix. That can drive you to absolute insanity when that's happening every hour, every day. Dr Don: Then that's taking a physical toll on your body because it's activating your nervous system, which is now, the cortisol levels are going up, adrenaline, right? So when your mind is in that constant state, it does very little on maintenance. It is not worried about fixing anything; it's worried about escaping or fixing the threat, because that's the number one priority.  Lisa: It doesn't know that it's not happening. I ended up with shingles for two months. I've only just gotten over it a few weeks ago. That's a definite sign of my body's, my immune system is down. Why is it down? Why can that virus that's been sitting dormant in my body for 40-something years suddenly decide now to come out? Because it's just becoming too much. I've spent too long in the fight or flight state and then your immune system is down. This is how we end up really ill.  Dr Don: We get sick. I was just actually having lunch today with a young lady and she's got some immune system issues. And I said, 'Think about it like the US Army, US military is the biggest, strongest military in the world. But if you took that military and you spread it out amongst 50 countries around the world fighting battles, and then somebody attacks the United States, I don't care how big and strong that system was, that military system was. It's going to be weakened when it gets an attack at the homefront.' So that's what was happening. So all of a sudden, now that virus that it could fight and keep dormant, it lets it pass by because it's like, 'Well, we can let that go. We'll catch that later. Right now, we got to go on the offensive and attack something else.' Lisa: Yeah, and this is where autoimmune, like your daughter experienced... Dr Don: About the Crohn's? Yep.  Lisa: Yep. She experienced that at 13 or something ridiculous? Dr Don: 14, she got it. Then she also got idiopathic pulmonary hemosiderosis which is another lung autoimmune disorder where the iron in the blood would just cause the lungs to release the blood. So her lungs just starts filling up with blood. They had no idea what caused it, that's the idiopathic part of it, and they just basically said, ‘There's no cure. She just needs to live close to a hospital because she'll bleed out if she has another attack.' Only 1 in 1.2 million people ever get that. So it's very rare so there's no research being done for it. They just basically say, ‘If you get it, live close to a hospital.' That's the strategy. Lisa: That's the way of fixing it.  Dr Don: And so both of those are autoimmune, and ever since we've gone to the program, she's hasn't had a flare-up of either one of those. Because I think our system is directly now able to address those things.  Lisa: Yeah, and can calm down. I think even people who haven't got post-traumatic stress like I've had or whatever, they've still got the day to day grind of life, and the struggle with finances, and the mortgage to be paid, and the kids to feed, and whatever dramas we're all going through. Like we talked about with COVID and this constant change that society is undergoing, and that's going to get faster and more. So this is something that we all need to be wary of: That we're not in this. I've taught and learned a lot about the coping and managing strategies, the breathing techniques, and meditation, the things, and that's what's kept me, probably, going. Dr Don: Those are great because they're... Again, that's managing it but it's good to have that because you've got to get to the root of it, which is what we were working on. But at the same time, if you don't have any coping, managing skills, life gets very difficult. Lisa: Yeah, and this is in-the-moment, everyday things that I can do to help manage the stress levels, and this is definitely something you want to talk about as well. So with me, we went through this process, and we did... For starters, you had to get my brain into a relaxed state, and it took quite a long time to get my brainwaves into a different place. So what were we doing there? How does that work with the brainwave stuff?  Dr Don: Well, when we have a traumatic event or memory, that has been stored in a very high-resolution state. So in a beta brainwave state because all your senses are heightened: sight, smell, hearing. So it's recording that and storing it in memory in a very intense state. So if I sat down with you and said, 'Okay, let's get this fixed.' And I just started trying to work directly on that memory, you're still going to be in a very high agitated state because we're going to be starting to talk about this memory. So you're going to be in a beta brainwave state trying to recalibrate a beta stored memory. That's going to be very difficult to do.  So what we do is, and that's why I use the four hours because within that first an hour and a half to two hours, we're basically communicating with the subconscious part of the brain by telling stories, symbols with metaphors, goat and snowflake, all the stories, all the metaphors that are built-in because then your brain moves into an alpha state. When it's in alpha, that's where it does restoration. So it's very prepared to start restoring. And then, if you remember, by the time we got to a couple of the traumatic memories, we only work on them for two or three minutes. Because you're in alpha, and so you've got this higher state of beta, and it recalibrates it into the same state that it's in. So if it's in alpha, it can take a beta memory, reprocess it in alpha, takes all the intensity out of it.  Lisa: So these brain waves, these beta states, just to briefly let people know, so this is speed, and correct me if I'm wrong, but it's the speed at which the brain waves are coming out. So in beta, like you'd see on ECG or something, it's sort of really fast. I think there's a 40 day... Dr Don: It's 15 to 30 hertz. Lisa: 15 to 30 hertz and then if you're in alpha, it's a lot lower than that? Dr Don: 7 to 14. Lisa: 7 to 14, and then below that is sort of when you're going into the sleep phase, either deep meditative or asleep. Dr Don: You're dreaming. Because what it's doing in dreaming is processing. So you're between 4 and 7 hertz. That's why people who have a lot of trauma have trouble sleeping. Because not only is their mind processing what it experienced during the day, it's also taking some of those old files saying, 'Well, okay, let's fix that now. Right. Let's get that.' That's where your nightmares are coming from. It was trying to get you into a processing to fix that. but it couldn't fix it. So it continues, and then when you go below 4 hertz, you go into delta. Delta is dreamless sleep and that's where the maintenance is getting done.  Lisa: That's the physical maintenance side more than the... Dr Don: Physical maintenance. Yeah, because that's not processing what it experienced anymore. What it's really now doing is saying, 'Okay, what are the issues that need to be dealt with?' So if you're very relaxed and you've had a very... Like me, right? I played hockey, so I had six concussions, 60 stitches, and never missed a hockey game. The only reason now that I understand I could do that is because I'm getting two or three times more Delta sleep than my teammates were. Lisa: Physical recuperative sleep.  Dr Don: Yeah, I was getting maximum restorative sleep. So an injury that I would have that could heal in two or three days, my teammates would two or three weeks. Because they were living in these, which I didn't know, a lot of my friends were dealing with trauma: physical, emotional, sexual abuse. I didn't know that was going on with my friends. Nobody talked about it. I didn't see it in their homes, but they were all dealing with that.  Lisa: So they are not able to get... So look, I've noticed since I've been through the program. My sleep is much better, and sometimes I still occasionally dream about Dad. But the positive dreams, if that makes sense. They're more Dad as he as he was in life and I actually think Dad's come to visit me and say, ‘Hi, give me a hug' rather than the traumatic last days and hours of his life, which was the ones that were coming in before and calling for that action and stopping me from having that restorative sleep.  I just did a podcast with Dr Kirk Parsley who's a sleep expert, ex-Navy SEAL and a sleep expert that's coming out shortly. Or I think by this time, it will be out, and understanding the importance, the super importance of both the delta and... What is the other one? The theta wave of sleep patterns, and what they do, and why you need both, and what parts of night do what, and just realising...Crikey, anybody who is going through trauma isn't experiencing sleep is actually this vicious cycle downwards. Because then, you've got more of the beta brainwave state, and you've got more of the stresses, and you're much less resilient when you can't sleep. You're going to... have health issues, and brain issues, and memory, and everything's going to go down south, basically.  Dr Don: That's why I didn't understand at the time. They just said 'Well, you're just super healthy. You heal really fast.' They had no other explanation for it. Now, I know exactly why. But it had nothing to do with my genetics. It had to do with my environment. Lisa: Just interrupting the program briefly to let you know that we have a new patron program for the podcast. Now, if you enjoy Pushing the Limits if you get great value out of it, we would love you to come and join our patron membership program. We've been doing this now for five and a half years and we need your help to keep it on here. It's been a public service free for everybody, and we want to keep it that way but to do that, we need like-minded souls who are on this mission with us to help us out. So if you're interested in becoming a patron for Pushing the Limits podcast, then check out everything on patron.lisatamati.com. That's patron.lisatamati.com.  We have two patron levels to choose from. You can do it for as little as 7 dollars a month, New Zealand or 15 dollars a month if you really want to support us. So we are grateful if you do. There are so many membership benefits you're going to get if you join us. Everything from workbooks for all the podcasts, the strength guide for runners, the power to vote on future episodes, webinars that we're going to be holding, all of my documentaries, and much, much more. So check out all the details: patron.lisatamati.com, and thanks very much for joining us.  Dr Don: That's, at the time, we just thought it was all, must have been genetics. But I realised now that it was environment as well. So maybe a genetic component to it as well, but then you take that and put that into this very beautiful, nurturing environment, I'm going to sleep processing in beta what I experienced that day and then my mind basically, at that point, is 'What do we need to work on? Not much. Let's go. Let's start now doing some maintenance.' Because it wants to address the top of item stuff first. What is it needs to be taken care of right now? Right? Those are the threats.  Once it gets the threats processed, then it can then start working on the things that are going to be the more long-term maintenance. So then it'll do that. But if it never gets out of that threat mode, it gets out for very little time. Then, if you're getting 30 minutes of delta sleep at night and I'm getting two hours, it's a no-brainer to figure out why I would heal faster.  Lisa: Absolutely, and this is independent of age and things because you've got all that that comes into it as well. Your whole chemistry changes as you get older and all this. There's other compounding issues as it gets more and more important that you get these pieces of the puzzle right.  Do you think that this is what leads to a lot of disease, cancers, and things like that as well? There's probably not one reason. There's a multitude of reasons, but it's definitely one that we can influence. So it's worth looking at it if you've got trauma in your life. People were saying to me 'Oh my God, you don't look good.' When you start hearing that from your friends, your people coming up to you and going, 'I can feel that you're not right.' People that are sensitive to you and know you very well, and you start hearing that over and over, and you start to think, 'Shit, something's got real. Maybe I need to start looking at this.'  Because it's just taking all your energy your way, isn't it, on so many levels. The restorative side and the ability to function in your life, and your work, and all of that, and that, of course, leads into depressive thoughts and that hyper-vigilant state constantly. That's really tiresome rather than being just chill, relax, enjoying life, and being able to... Like one of the things I love in my life is this podcast because I just get into such a flow state when I'm learning from such brilliant... Dr Don: You're in alpha. Lisa: I am. I am on it because this is, 'Oh. That's how that works.' And I just get into this lovely learning in an alpha state with people because I'm just so excited and curious. This is what I need to be doing more of. And less of the, if you'd see me half an hour ago trying to work out the technology. That's definitely not an alpha state for me. Dr Don: That's where they said Albert Einstein lived. Albert Einstein lived in alpha brainwave state. That's why information just float for him because there was no stress. He could then pull information very easily to float into. But if you're in a high beta brainwave state, there's too much activity. It has trouble focusing on anything because it's multiple threats on multiple fronts. So when we have a traumatic event, that's how it's being recorded. If you remember, what we talked about was there's a 400 of a millionth of a second gap in between your subconscious mind seeing the information and it going to your consciousness. So in 400 millionths of a second, your subconscious mind has already started a response into an action even though your conscious mind is not even aware of it yet.  Lisa: Yeah. Exactly what I did with rescuing my partner with the glass falling off the thing. I hadn't reached that logically. Dr Don: It's funny because that's one of the things that I talked about ,which is sort of, give us all a little bit of grace. Because if you've had a lot of trauma, you're going to respond a certain way. How could you not? If your mind's filtering into all of that, of course you're going to respond with that kind of a response because your mind is prone to go into that action very, very quickly. So we can give ourselves a little bit of grace in understanding that of course, you're going to do that, right? And not beat ourselves up.  Because you know what I talked about with everybody, there's nothing wrong with anybody. There's nothing wrong with anybody's mind. Everybody's mind is fine except you are experiencing something different than I experienced so your mind kept responding to it, and mine didn't have that. So you had multiple... Think about we have a hundred percent of our energy on our phone when we wake up in the morning, right? Fully powered up. You fire the phone up and eight programs open up, right? And mine has one.  Lisa: Yeah. You're just focusing on what you need to. Dr Don: Then noon comes, and you're having to plug your phone back in because you're out of energy.  Lisa: That's a perfect analogy. You're just burning the battery. My all is a hundred windows open in the back of my brain that is just processing all these things and so now, I can start to heal. So having gone through this process with you, like you said, we worked on a number of traumatic experiences, and I went through them in my mind. And then you did certain things, made me follow with my eyes and track here, and my eyes did this, and then, we pulled my attention out in the middle of the story and things. That helped me stay in that alpha state, brainwave state as I probably now understand while I'm still reliving the experience. That's sort of taking the colour out of it so that it's now sort of in a black and white folder. Now, it can still be shared, and it hasn't taken away the sadness of... Dr Don: Because it is sad that these things happen but that's not the response for an action which is that fear or anger, right? That dysregulation of the nervous system. That's what we want to stop, because that is what is going to affect health, enjoyment of life and everything else.  Lisa: Wow, this is so powerful. Yeah, and it's been very, very beneficial for me and helped me deal. For me, it also unfolded. Because after the four hour period with you, I had audiotapes and things that are meditations to do every day for the next 30 days. What were we doing in that phase of the recovery? What were you targeting in those sort of sessions?  Dr Don: So if you remember what we talked about, we have two memory systems. The explicit memory is what we worked on on that four hours. That's detail, events, and experiences. Once we get the mind processing through that, then we have to work on the same memory animals have, which is that associative repetitive memory. So you've built a series of codes on how to respond to threats, and that has come in over repetition and associations. So the audios are designed to start getting you now to build some new neural pathways, some new ways to respond because your mind won't switch a pattern instantly. It can switch a memory instantly, but a pattern is something that got built over a period of time. So it's like a computer. If I'm coding on my computer, I can't take one key to stop that code. I have to write a new code. Yeah, so what we're doing over the 30 days is writing new code. Lisa: Helping me make new routines and new habits around new neural pathways, basically.  Dr Don: You don't have that explicit memory interfering with the pathways. Because now, it's not constantly pulling you out, going back into an action call. It's basically now able to look at this information and these codes that got built and say, 'Okay, what's a better way? So do we have a better way of doing it?' Or 'Show me that code. Write that code.' If that code looks safer, then your mind will adopt that new code. Lisa: This is why, I think for me, there was an initial, there was definitely... Like the nightmares stopped, the intrusive every minute, hour triggering stopped, but the process over the time and the next... And I'm still doing a lot of the things and the meditations. It's reinforcing new habit building. This is where... Like for people dealing with addictions, this is the path for them as well, isn't it?  Dr Don: Yeah. Because I talked about addiction as a code. I don't believe it's a disease. Your mind has found a resource to stop pains, and your subconscious mind is literal. It doesn't see things as good or bad, or right or wrong. It's literal. 'Did that stop the pain? Let's do that.' Because it's trying to protect you. So if you've now repeated it over and over, not only have you stopped the pain, but you've built an association with a substance that is seen as beneficial. Lisa: Because your brain sees it as medicine when you're taking, I don't know, cocaine or something. It sees it as essential to your life even though you, on a logical level, know that, ‘This is destroying me and it's a bad thing for me.' Your subconscious goes, 'No, this is a good thing and I need it right now.' Dr Don: Because it's in the present, when does it want the pain to stop? Now. So it has no ability to see a future or a past. Your subconscious is in the moment. So if you take cocaine, the logical part of your brain goes, 'Oh, this is going to create problems for me. I'm going to become addicted.' Right? Your subconscious goes, ‘Well, the pain stopped. We don't see that as a bad thing.' I always use the analogy: Why did people jump out of the buildings at 911? They weren't jumping to die. They were jumping to live because when would they die? Now, if they jump, would they die? No. They stopped the death. So even jumping, which logically makes no sense, right? But to the subconscious mind, it was going to stop the pain now.  Lisa: Yeah, and even if it was two seconds in the future that they would die, your brain is going...  Dr Don: It doesn't even know what two seconds are.  Lisa: No. It has no time. Isn't it fascinating that we don't have a time memory or understanding in that part of the brain that runs 95% of the ship?  Dr Don: It's like what Albert Einstein said, ‘There's no such thing as time.' So it's like an animal. If an animal could communicate and you say, 'What time is it?' That would make no sense to an animal. 'What do you mean? It's now.' 'What time is it now?' 'Now. Exactly.' Lisa: It's a construct that we've made to... Dr Don: Just to explain a lot of stuff, right? When something happens.  Lisa: Yeah, and this is quite freeing when you think of it. But it does make a heck of a lot of sense. So people are not being destructive when they become drug addicts or addicted to nicotine, or coffee, or chocolate. They're actually trying to stop the pain that they're experiencing in some other place and fix things now. Even though the logical brain... Because the logical brain is such a tiny... Like this is the last part of our evolution, and it's not as fully...  We can do incredible things with it at 5%. We've made the world that we live in, and we're sitting here on Zoom, and we've got incredible powers. But it's all about the imagination, being able to think into the future, into the past, and to make correlations, and to recognise patterns. That's where all our creativity and everything, or not just creativity, but our ability to analyse and put forth stuff into the world is happening. But in actual, we're still like the animals and the rest of it. We're still running at 95%, and that's where we can run into the problems with these two.  Dr Don: Because you got two systems. You got a very advanced system operating within a very primitive system, and it hasn't integrated. It's still integrating, right? So if there's a survival threat, survival will always override reason and logic, because it's designed to protect you. So there's no reason and logic that will come in if there's a survival threat. It's just going to respond the way it knows, does this Google search, 'What do we know about this threat? How do we know to protect ourselves, and we'll go instantly into survival mode.' Again, there's the reason and logic. Why would you jump out of a building, right? If you applied reason and logic, you wouldn't have jumped, right? People will say, 'Well, but they still jumped.' Yes, because reason and logic didn't even come into the process. It was all about survival.  Lisa: Yeah. When the fire is coming in it was either... Dr Don: 'Am I going to die out now or I'm going to move and not die now?'  Lisa: Yeah, and we're also prone to movement when we're in agitation and in an agitated state, aren't we? Basically, all of the blood and the muscles saying, 'Run, fight, do something. Take action.' Dr Don: That's why when people get into depression, it's the absence of those emotions.  Lisa: Yeah, and people feel exhaustion.  Dr Don: Yeah. The mind kept calling for an action using anger, for example, but you can't do the action because it's not happening, so it shuts down to protect you and stops calling for any emotion, and that's depression. So the key to get out of depression is actions. It's to get something happening. So in a lot of people who are depressed, what do I tell them to do? 'Start moving. Start exercising. Get out. Start doing things.' Right?  Lisa: So I run ultras. Dr Don: Exactly. Perfect example, right?  Lisa: Yeah, because I was. I was dealing with a lot of shit in my life at the time when I started doing ultra-marathons. To run was to quiet the pain and to run was to be able to cope and to have that meditative space in order to work through the stuff that was going on in my life. And I know even in my husband's life, when he went through a difficult time, that's when he started running. So running can be a very powerful therapeutic, because there is a movement, and you're actually burning through the cortisol and the adrenaline that's pouring around in your body. Therefore, sitting still and that sort of things was just not an option for me. I had to move. And it explains what, really. It's calling the movement. Like it was a movement because I couldn't fix the other thing.  Dr Don: That's what they'll tell you to do. To get out of depression is to move. What I say is the way to get out of depression is to get your mind to resolve what it's been asking for. Lisa: It's going a little deeper.  Dr Don: Yeah. So it's going down and saying, 'Okay, why has it been getting you angry and now, it shut down from the anger?' Because it's been trying to get you in your situation. 'Don't let Dad die. Don't let this happen.' Right? So because you couldn't do it, it just shuts down. Makes perfect sense but when we get to the resolution that there is no action required, there's no need for the depression anymore. The depression will lift because there's no more call for an action.  Lisa: I can feel that in me, that call. Anytime that anything does still pop up, I sort of acknowledge the feeling and say, 'There is no call for action here. This is in the past. This is a memory.' So I do remind myself that when things do still pop up from time to time now, as opposed to hourly. I go, 'Hey, come back into the now. This is the now. That was the then that's calling for an action. This is why you're doing thing.' Even that understanding

There's a stigma associated with unresolved trauma. Many people don't talk about their traumatic experiences. Unfortunately, we're only taught short-term solutions like coping with stress and managing our emotions. With these short-term solutions, the root cause remains unresolved. The trauma is still present and can affect our everyday lives. In this episode, Dr Don Wood joins us to talk about how unresolved trauma can directly affect our health. He aims to remove the stigma around unresolved trauma, and the first step towards healing is understanding the pain we've gone through. He also talks about the power of our minds from the different stories of his past patients.  Tune in to this episode if you want to learn more about how unresolved trauma can affect your health and life.   Get Customised Guidance for Your Genetic Make-Up For our epigenetics health program all about optimising your fitness, lifestyle, nutrition and mind performance to your particular genes, go to  https://www.lisatamati.com/page/epigenetics-and-health-coaching/.   Customised Online Coaching for Runners CUSTOMISED RUN COACHING PLANS — How to Run Faster, Be Stronger, Run Longer  Without Burnout & Injuries Have you struggled to fit in training in your busy life? Maybe you don't know where to start, or perhaps you have done a few races but keep having motivation or injury troubles? Do you want to beat last year's time or finish at the front of the pack? 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Order My Books My latest book Relentless chronicles the inspiring journey about how my mother and I defied the odds after an aneurysm left my mum Isobel with massive brain damage at age 74. The medical professionals told me there was absolutely no hope of any quality of life again, but I used every mindset tool, years of research and incredible tenacity to prove them wrong and bring my mother back to full health within 3 years. Get your copy here: https://shop.lisatamati.com/collections/books/products/relentless. 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Manufactured in an ISO9001 certified facility Boost Your NAD+ Levels — Healthy Ageing: Redefined Cellular Health Energy & Focus Bone Density Skin Elasticity DNA Repair Cardiovascular Health Brain Health  Metabolic Health   My  ‘Fierce' Sports Jewellery Collection For my gorgeous and inspiring sports jewellery collection ‘Fierce', go to https://shop.lisatamati.com/collections/lisa-tamati-bespoke-jewellery-collection.   Here are three reasons why you should listen to the full episode: Learn how unresolved trauma can affect your life and compromise your health. Discover Dr Don's alternative ways of how he sees addiction. Understand the power of our minds and how it can do anything to protect us from feeling pain.   Resources Gain exclusive access and bonuses to Pushing the Limits Podcast by becoming a patron! You can choose between being an official or VIP patron for $7 and $15 NZD per month, respectively. Harness the power of NAD and NMN for anti-ageing and longevity with NMN Bio. More Pushing the Limits Episodes: 183: Sirtuins and NAD Supplements for Longevity with Elena Seranova 189: Increasing Your Longevity with Elena Seranova Connect with Dr Don Wood: Facebook Inspired Performance Institute – Learn more about Dr Don's books and the courses they're offering by going to their website. The Unbeatable Mind Podcast: How to Deal with Trauma with Dr Don Wood Brain Wash: Detox Your Mind for Clearer Thinking, Deeper Relationships, and Lasting Happiness by David and Austin Perlmutter  Emotional Concussions: Understanding How Our Nervous System is Affected by Events and Experiences Throughout Our Life  by Dr Donald Wood   Episode Highlights [05:32] What Inspired Dr Don to Start His Career Dr Don founded the Inspire Performance Institute because of his wife and daughter.  Dr Don shares that he had a quiet and idyllic childhood. He didn't experience any trauma. His wife had a rough childhood which contributed largely to the unresolved trauma and fear she lives with today. His daughter also inspired his research. She was diagnosed with Crohn's disease at 14.  [11:10] Dr Don Shares About His Childhood He remembers he used to get bad stomach pains when he was young. They would go to their family doctor for a checkup. His grandfather mentioned that he has stomach pains because of the stress at home. Later on, Dr Don realised that he felt the pressure in their home. The stress from this manifested as stomach pains. [15:00] Impact of Unresolved Trauma in Later Life Dr Don believes that unresolved trauma creates inflammation in the body. It compromises a person's immune system and neurotransmitters.  A person gets sick and starts feeling bad because of serotonin neurotransmitters. They are affected by our guts' inflammation. Unfortunately, the only things taught to us are managing and coping with the stress. We do not get to the root cause of the problem.  [18:10] Dr Don's Career Before Inspired Performance Institute Dr Don has been an entrepreneur all his life. Before he founded Inspired Performance Institute, he was in financial services.  He realised that committing to Inspired Performance Institute meant studying again.  To add credibility to his name, he went back to school and got his Ph.D. [20:31] What Causes Addiction Dr Don doesn't believe that addiction is caused by physical dependency. It's more about how the mind connected using drugs and survival.  Because people feel bad, they find a way to stop the pain and feel better temporarily. Most of them find it in using drugs.  The subconscious mind tries to find a way to feel better. The conscious mind builds a habit based on it. The interaction between these two memory systems is a factor in developing addictions. [25:39] Subconscious and Conscious Mind 95% of our mind works on the subconscious survival base. The remaining 5% is concerned with logic and reason. The 5% uses reason and logic to make brilliant things in life. However, when survival needs arise, the part dedicated to survival overrides the other. To learn more about Dr Don's analysis of the Time Slice Theory and how it's connected to how we respond to our day-to-day lives, listen to the full episode. [35:08] Effects of Brain Injuries on Brain Response People with repeated brain injuries might have problems with logical and survival thinking responses. Brain injury patients have lower blood flow in the frontal part when faced with survival situations based on brain scans.  [36:03] Available Help for People Who Have Brain Injuries Dr Don's son had three head injuries since he was young. The third one affected his communication skills and emotions.  He believes that his son has functional damage to his brain. Once they discovered that, they got him into hyperbaric oxygen therapy.  He started getting his blood flow into the areas of his brain that process his experiences.   [40:18] Probable Use of fMRI Dr Don shares that fMRI can be another procedure that can help people with brain injuries.  fMRI can detect abnormalities in your brain that other methods may not pick up. [42:26] The Story of Dr Don's Daughter His daughter was diagnosed with Crohn's disease. It affected her career as an actress.  His daughter's condition made him realise: inflammation responds to unresolved trauma. They managed to resolve her unresolved trauma that happened when she was six years old. Her mind understood that, and her negative response stopped.  [46:01] Talking About Depression In cases of depression, the person's mind puts pressure on them to do something in the past.  Depression then becomes the absence of emotion. It tries to numb you from the stress in your mind. When they get to the cause of what their mind needs and resolves it, their depression eases.  [48:02] Story of Rebecca Gregory Rebecca was a victim of the Boston Marathon bombing. She came to seek help from Dr Don five years ago. She has PTSD. Dr Don helped her realise the connection between her response to daily life and the memory she has. To know more about the process on how Dr Don helped Rebecca tune in to the full episode. [51:43] Similarities of Dr Don's Approach to EMDR Dr Don shared that he also studied EMDr In his practice, he used some of the techniques in EMDr He enhanced them to become quicker and more comprehensive.  Unlike EMDR, Dr Don's approach is faster and more straightforward. The patient can choose which way they would like to do it.  [54:36] Dr Don on Talk Therapies He believes that talk therapy is good. You must deal with a current problem. They aim to resolve the old issues that aggravate the new experiences.  [56:22] How Dr Don's Program Helped His Daughter Crohn's disease is incurable. However, since his daughter underwent their program, her Crohn's didn't flare-up. He believes his daughter's body has more energy to do maintenance and repair issues. It's possible because her unresolved trauma has been resolved.  [56:22] How Stress Connects to Our Other Unresolved Traumas The daily stress that we encounter every day might pile up and affect us in the long run. They might also connect and add up to our trauma, making it harder for us to cope. We misinterpreted experiences when we were young that still affect us as we grow older. Dr Don shares stories of how unresolved childhood experiences may affect a person as they grow up. [01:08:15] People Have Different Filters Dr Don says that people have different atmospheric conditions they grew up in. These factors affect how they filter and deal with their everyday experiences.  Our brain acts as the filter, and all of our experiences pass through that filter. The differences in how we operate upon those experiences are based on them.  Dr Don proceeds to share different stories of his patients regarding the differences in people's minds.  [01:15:06] Dr Don on Smoking  Dr Don says that smokers are not addicted to nicotine. They need the sensation of feeling better. The mind of a smoker associates feeling better to smoking. This link causes addiction.  You can break the habit by introducing a new, healthier factor. [01:19:17] A Better Approach Towards Addiction Many approaches to addiction make the person feel useless. They surrender to never getting better. Dr Don pushes a system that empowers people. He makes them realise they can overcome their addiction by understanding the cause.  [01:24:42] How the Mind Reacts to Pain Dr Don shares that the mind is powerful enough. It will do anything for you to stop feeling pain.  People who commit suicide act in desperation to stop the pain they're feeling.  He shares the story of the German sniper. It can represent the power of the mind in reaction to pain.   7 Powerful Quotes  ‘I really started the Inspired Performance Institute because of my wife and daughter more. Mostly my daughter than anything else.' ‘So if I had been a little frustrated with something that worked that day, or is, you know, some other thing that was nothing related to her, she could pick up on that tone change. And then, in her mind, what her mind would be doing is saying, “What do we know about men when they start to get angry?” And a whole bunch of data and information about her father would come flooding in and overstimulate her nervous system.' ‘And so when my daughter was 14, she was diagnosed with Crohn's. And they just told us that you just kind of have to, you know, learn to live with this.' ‘And that's really what led me to develop the program, is I realised that when my daughter was 16, she disclosed to us some sexual abuse that she had had when she was like six years of age that we had no idea. So my wife was, obviously both of us were devastated, but my wife was extremely, she had experienced, you know, sexual abuse as a child and thought she would never let that happen to her child.' ‘How could the body crave a substance that it doesn't know? It doesn't regulate heroin. How could it crave something that doesn't regulate? I believe it's the mind has made a connection between the heroin and survival.' ‘What's happened is your mind has been calling for an action for many, many years, that was impossible to accomplish. But your mind doesn't know that and it keeps putting pressure on you. “Do it, do it, do it.” And because you don't do it, it's using these emotions to call for the action, it stops calling for the action, it shuts off the emotions. And so now depression is the absence of emotion.' ‘I believe in a lot of cases, that's what they're doing, are trying to desensitise you to it. You know, talk about it enough, maybe it doesn't feel as dramatic. And talk therapy has its place so I'm not against it. I think where talk therapy is really good is when you're dealing with a current problem. Where I think the difference between what we do is we're able to get the talk therapy much more effective when you take out all the old stuff that keeps aggravating the new stuff.'    About Dr Don Wood Dr Don Wood, Ph.D., developed the TIPP method after researching how atmospheric conditions affect our minds and impact our lives. In his search for answers for them, Dr Wood connected trauma and their health issues. He also recognised the daily stress they lived with. The only solutions provided came from medications. His experience with his family provided the determination required to develop a cutting-edge neuroscience approach. The program has benefited individuals all over the world. The results have been impressive. Dr Wood has helped trauma survivors from the Boston Marathon bombing attack and the Las Vegas shooting. He has also helped highly successful executives and world-class athletes. Marko Cheseto, a double amputee marathon runner, broke the world record after completing TIPP. Chris Nikic worked with Dr Wood and made world news by becoming the first person with Downs Syndrome to complete an Ironman competition.  The Inspire Performance Institute was built on this simple phrase, ‘There's nothing wrong with you, there's nothing wrong with your mind'. Some events and experiences have created some glitches and error messages for your mind during your lifetime, and all you need is a reboot.   Enjoyed This Podcast? If you did, be sure to subscribe and share it with your friends! Post a review and share it! If you enjoyed tuning in, then leave us a review. You can also share this with your family and friends so they can understand how unresolved trauma can affect our overall health and well-being. Have any questions? You can contact me through email (support@lisatamati.com) or find me on Facebook, Twitter, Instagram, and YouTube. For more episode updates, visit my website. You may also tune in on Apple Podcasts. To pushing the limits, Lisa   Full Transcript Of The Podcast Lisa Tamati: Welcome back, everybody to Pushing the Limits. Today I have Dr Don Wood, who is sitting in Florida. And Dr Don is a wonderful man. He is a trauma expert. He is someone who had a problem in his own family and sought about finding a solution. He is the developer of the TIPP method, T-I-P-P method. He spent years researching, and to understand how our minds affect our bodies. Dr Wood made the connection between trauma and health issues. In addition, he recognised the daily stress that people live with when they've been through trauma, and that the only solutions provided in the normal conventional world and medications. But his experience with his family provided the determination required to develop a cutting-edge neuroscience approach, a real holistic solution that provides immediate and long lasting relief for people who have been through trauma of any sort, whether it's small or large. The TIPP program developed by Dr Wood has benefited individuals all over the world. And he really wanted to create a solution that removed the stigma of trauma. Too many people are afraid to ask for help because of that stigma. And that's why he named the program around increasing performance levels. The name of his institute is the Inspired Performance Institute.  I really love this episode with Dr Don Wood, he is a lovely, amazing person with a way of helping people get rid of PTSD, get rid of trauma out of their lives. So that they can get on with being the best versions of themselves. And that's what we're all about here. He's worked with everyone, from soldiers coming back from wars to victims of the Boston Marathon bombing campaign, to highly successful executives and world-class athletes. He's been there, done that. So I really hope that you enjoy this conversation with Dr Wood.  Before we head over to the show, just want to remind you, we have our new premium membership for the podcast Pushing the Limits. Now out there. It's a Patron page so you can be involved with the program, with the podcast. We've been doing this now for five and a half years; it is a labor of love. And we need your help to keep this great content coming to you, and so that we can get the best experts in the world and deliver this information direct to your ears. It's a passion that's been mine now for five and a half years and you can get involved with it, you get a whole lot of premium member benefits. And you get to support this cause which we're really, really grateful for. For all those who have joined us on the Patron program. Thank you very, very much. You know, pretty much for the price of a cup of coffee a month, you can get involved. So check that out at patron.lisatamati.com. That's patron P-A-T-R-O-N dot lisatamati.com.  And just reminding you too, we still have our Epigenetics Program going. And this, we have now taken hundreds and hundreds of people through this program. It's a game-changing program that really gives you insights into your genetics, and how to optimise your lifestyle to optimise your genes basically. So everything from your fitness, what types of exercise to do, what times of the day to do it. What, whether you're good at the long distance stuff or whether you be a bit more as a power base athlete, whether you need more agility, whether you need more work through the spine, all these are just information that's just so personalised to you. But it doesn't just look at your fitness, it looks at your food, the exact foods that are right for you. And it goes way beyond that as well as to what are the dominant neurotransmitters in your brain, how they affect your mood and behaviour, what your dominant hormones are, the implications of those, your predispositions for any disorders and the future so that we can hit all those off at the past. It's not deterministic, that is really giving you a heads up, ‘Hey, this could be a direction that you need to be concerned about in the future. And here's what you can do about it.' So come and check out our program. Go to lisatamati.com. And under the button ‘Work With Us', you will find our Peak Epigenetics program. Check that out today. And maybe you can come and join us on one of our live webinars or one of our pre-recorded webinars if you want to you can reach out to me, lisa@lisatamati.com, and I can send you more information about their Epigenetics Program. Right, now over to the show with Dr Don Wood.  Hello, everyone and welcome back to Pushing the Limits. This week, I have another amazing guest for you. I've found some pretty big superstars over the years, and this one is going to be very important to listen to. I have Dr Don Wood, welcome to the show, Dr Don. Dr Don Wood: Thank you, Lisa. I'm excited to be here. Lisa: This is gonna be a very interesting, and it's a long-anticipated interview for me, and Dr Don is sitting in Florida, and you've got a very nice temperature of the day, isn't it? Dr Don: Oh, absolutely gorgeous- low 80s, no humidity. I mean, you just like I said, you couldn't pick a better day, it's very fast. I would have tried to sit outside and do this. But I was afraid somebody would start up a lawn mower. Lisa: Podcast life. I've just got the cat wandering, and so he's probably start meowing in a moment. Now, Dr Don, you are an author, a speaker, a trauma expert, the founder of the Inspired Performance Institute. Can you give us a little bit of background of how did you get to where you are today, and what you do? Dr Don: Well it's sort of an interesting story. I really started the Inspired Performance Institute because of my wife and daughter more. Mostly my daughter than anything else. I talked about this, is that I led this very, very quiet, idyllic kind of childhood with no trauma. Never had anything ever really happen to me. You know, bumps along the way, but nothing kind of that would be considered trauma. And I lived in a home that was so loving and nurturing, that even if I got bumped a little bit during the day, you know, was I, when I was a kid, I'm coming home to this beautiful environment that would just regulate my nervous system again.  Lisa: Wow.  Dr Don: So I believe that that was critical in terms of having my nervous system always feeling safe. And that really resulted in amazing health. I mean, I've been healthy all my life. And as an adult, when things would happen, I could automatically go back into that nervous system regulation, because I had trained it without even knowing it.  Lisa: Yeah. Dr Don: that I was able to get back into that. Well. And so when I met my wife, I realised she was not living in that world. And amazingly enough, Lisa, I thought everybody lived like, because I had no idea that a lot of my friends were being traumatised at home. That I had no idea, because everybody's on their best behaviour. If I come over, everybody's behaving themselves and you don't see it. My friends, a lot of times wouldn't share it because of either shame or guilt. I mean, my wife, nobody knew what was going on in their home.  Lisa: Yeah.  Dr Don: And she had one best friend that knew, that was about it. And if you met her father, who was really the bad guy in this whole thing, everybody thought he was the greatest guy. Because outwardly, he came across as this generous, hard-working, loving kind of guy. Loved his family, but he just ran his home with terror.  Lisa: Wow. Terrible. Dr Don: And so, oh, it was terrible. So when I met my wife, I realised, wow, this, because we got close very quickly, because I had the chance to play professional hockey in Sweden when I was 18. So we got married at 19. So very quickly, I was around her a lot, while we were sort of getting ready for that. So I got to see the family dynamic up close very quickly. And that's when I realised, boy, she's not living in that world, which is living in fear all the time. And that's why I sat down with her one day, and I just said, ‘Tell me what's going on here. Because I can sense this tension in here. I could sense that there was a lot of fear going on. What's going on?' And she started sharing it with me, but swore me to secrecy. Like I could never tell anybody because of all that shame and guilt, because nobody really outside the home would have been aware of it. Lisa: Or probably believed it.  Dr Don: Or believed it. Right.  Lisa: Yeah.  Dr Don: And then it was again, that ‘What will people think about me? What do they think about my family?' That's really common, when you have people who have experienced trauma like that. And so, I sort of follow along and said, ‘Okay, this will be our secret,' but I thought to myself, ‘Well, this will be great now, because I'm going to get her out of that home'.  Lisa: Yeah.  Dr Don: And she's going to be living in my world. So everything will just calm down, and she'll be feeling that peace that I've experienced all my life. Lisa: Not quite so simple.  Dr Don: I was like, Well, how is this not helping? Like, why now? She's living in the world that I grew up in because I was very much like my father. I wasn't gonna yell at her, scream at her, do anything that would have made her feel fearful. But she was still living in fear.  Lisa: Yeah.  Dr Don: And if, yeah, and if I said something like, ‘No, I don't like that.' She could tear up and start going, why are you mad at me? Yeah. And I would be like, ‘Oh my God, like where did you get I was mad at you for?' I just said. That made no sense to me at the time. Now I understand it perfectly. What I didn't realise at the time was that people who have been traumatised are highly sensitive to sound— Lisa: Hypervigilant and hyperaware of noise and people raising their voice. Dr Don: Any kind of noise. And what she also, as a child, she had learned to listen very carefully to the way her father spoke, so that she could then recognise any kind of the slightest little change in my vocal tone. So if I had been a little frustrated with something at work that day, or, you know, some other thing that was nothing related to her, she could pick up on that tone change. And then, in her mind, what her mind would be doing is saying, ‘What do we know about men when they start to get angry?' And a whole bunch of data and information about her father would come flooding in and overstimulate her nervous system. Lisa: So then it's like they Google search, doing a Google search and going, ‘Hey, have I had this experience before?'  Dr Don: Yeah.  Lisa: And picking out, ‘Yeah, we've been here before. This is not good. This is dangerous. This is scary.' Dr Don: Yep. And that's actually what led me to the research that I did, mainly because of my daughter, though. So my wife lived with that, she developed Hashimoto's. So she had this thyroid issue with, because she was constantly in a fight or flight state.  Lisa: Yeah, the cortisol. Dr Don: More flight than anything. Yeah, cortisol. And so when my daughter was 14, she was diagnosed with Crohn's. And they just told us that you just kind of have to learn to live with this. And she's going to be on medication for the rest of her life. And we'll just continue to cut out pieces of her intestines until she has nothing left and she'd have a colostomy bag. That's just the way it is.  Lisa: Oh. And she's 14 years old. Dr Don: She was 14. Yeah. She ended up having for resections done, she would go down to you know, 90, 85 pounds. She'd get so sick, the poor thing. No, because she just couldn't eat. Yeah. And she couldn't hold anything down. And they just told us to have no answers. My wife did unbelievable research, trying to come up with answers and really couldn't come up with anything except this management system that they've been given her. And so, I was adopted. So we didn't know my family history. Yeah. So our family doctor was my grandfather. And I didn't know this until I was 18.  Lisa: Oh wow.  Dr Don: I always knew I was adopted. But my mother shared the story with me when I was 18. That he came to my parents and said, I have a special child I want you to adopt, right. Now. I guess you just knew that my parents were just amazing people. And you know, at that time, you know, unwed mothers, that was considered a shame. Right? You didn't talk about that. So that was a quiet adoption.  Lisa: Wow. Dr Don: In fact, his wife didn't even know about it.  Lisa: Wow. Dr Don: Could be my grandmother. And that's, it's interesting, the story, because I should share this too. Because what happened was, is I never understood why my birth certificate was dated two years after my birthday. And what happened was, is that my parents adopted me, like immediately upon birth. But my grandmother found out about it, his wife found out about and sued my parents to get me back.  Lisa: Oh. Dr Don: And so they had to go into this legal battle for two years.  Lisa: Oh, wow.  Dr Don: Now I remember when I was really, really young, I used to get these really bad stomach pains. And I, and they took me, I remember going to doctors, I was really young. I remember going to doctors, but my grandfather was very holistic at the time for an MD. So you know, I was on cod liver oil, and you know, all these different things like, and so what he said to me, he says, No, he's just stressed out because of the stress in the home. You have to take the stress out of this home. He's feeling it.'  Lisa: Yep.  Dr Don: Right. So it's not that my parents were yelling, screaming.  Lisa: He's ahead of his time. Dr Don: Oh, way ahead. But what he realised was that, because it was so hard financially for them, that had a major effect on their life. So I guess I was feeling it. And so they went out of their way to take all the stress out.  Lisa: Wow. What lovely parents. Dr Don: Oh yeah. So it created this unbelievable, unusual home life. And so I never had any real tension in the home.  Lisa: Wow. Dr Don: Well, that was, I guess, as my wife said, we were the perfect petri dishes for this because I was living what we want to be, and she was living in the opposite world of what a lot of people do live in. And so at least I knew what the model was, what we were going for. Lisa: And when we're exposed to trauma very early in life, it has a much bigger impact on your health and everything then when it happens later in life. Is that right? Dr Don: Absolutely. Because we've never learned how to balance our systems, so then it stays, you know, in dysregulation a lot more than it did. And that's really what sort of led me to develop the program, is I realised that when my daughter was 16, she disclosed to us some sexual abuse that she had had when she was like six years of age that we had no idea. So my wife was, obviously both of us were devastated, but my wife was extremely, she had experienced, you know, sexual abuse as a child and thought she would never let that happen to her child.  Lisa: Yeah. Dr Don: So now my poor wife has also got a new, you know, trauma onto her. And so that's where it really came down to, is, you know, she said to me, ‘You could research this and find out what's going on, because I have no answers.' And that's when I started to research and I made the connection between trauma and these autoimmune issues, for example, that my wife had, and my daughter. And so what I discovered is that I believe that unresolved trauma creates inflammation in the body. The inflammation compromises the immune system and your neurotransmitters. So we start getting sick, and we start feeling bad because our neurotransmitter, serotonin is produced mostly in the gut. So the serotonin is affected by the inflammation, which was from my daughter, right? She's not going to feel good.  Lisa: Nope.  Dr Don: And then that just leads to a host of other problems. And it's, it's really, really sad that the only solution that we currently are using is to teach people to live and manage and cope with it.  Lisa: I think, yeah, so we, we know, which is, which is good. You know, we're learning things, how to cope with anxieties, and breath work and all that sort of good stuff. But it's not getting to the root cause of the problem and being able to to deal with it. So when we're in a heightened state of stress and cortisol, and when we're taking energy away from our immune system, and blood literally away from the gut, and and from a neurotransmitter production, and all that sort of thing, so is that what's going on, and why it actually affects the body? Because this mind body connection, which we're really only in the last maybe decade, or 15 years or something, really starting to dig into, isn't it? Like there's and there's still a massive disconnect in the conventional medical world where this is the mind, and this is the body. And you know, from here, up and here, and it's separate. Dr Don: And so on and so forth? Yeah. Lisa: Yeah. And it we're one thing, you know. And so this has a massive effect on our health, and it can lead to all sorts of autoimmune diseases, or even cancers, and so on. So you were at this time, so you didn't have the Inspired Performance Institute at this stage? What were you doing professionally? And then, did you go back and do a PhD? And in...? Wow. Dr Don: I've always been an entrepreneur all my life. So I was in financial services, we did a number of different things. We, my son and I, still have an energy business, we do solar energy and stuff like that. Lisa: Oh wow.  Dr Don: I decided if I was going to do this, I needed to go back and really study. So I went back and got by, went back to school, got my PhD.  Lisa: Wow. Dr Don: And, you know, to truly, to try to add credibility, number one, to what I was doing. Because, you know, people are gonna say, ‘Well, who are you? Yeah, you know, why should we listen to you? You never had any trauma and you're supposed to be an expert? Like, how does that work?' You know, it's the same thing with addiction. You know, I help people with addiction. I've never had a drink in my life, never touched a drug in my life. Now that I say, but I know what addiction is.  Lisa: Yeah.  Dr Don: I don't believe addiction is a disease. I believe it's a code that gets built from pain. Lisa: Yeah, let's dig into that a little bit. And then we'll go back to your daughter's story. Because addiction, you know, it's something I know from a genetic perspective. I have a tendency towards, towards having addictive nature, personality traits. I chase dopamine a lot. I have a deficit of dopamine receptors. And so I'm constantly going after that reward. Now that's worked itself out in my life, and in running ridiculous kilometres and working ridiculous hours, and not always in negative things. Luckily, I've never had problems with drinking or drugs, but I know that if I had started down that road, I would have ended up probably doing it, you know, very well.  Dr Don: You'd be a star as well.  Lisa: I'd be a star in that as well. And luckily, I was sort of a little bit aware of that and my parents never drank and they, you know, made sure that we had a good relationship with things like that, and not a bad one. Have struggled with food, though. That's definitely one of the emotional sort of things. And I think a lot of people have some sort of bad relationship with food in some sort of way, shape, or form on the spectrum, so to speak. What is it that causes addiction? And is it a physical dependency? Or is there something more to it? Dr Don: Yeah, that's why I don't believe it's a physical dependency. Because here's the way I look at it is, people will say to me, ‘Well, if I stopped this heroin, the body's going to crave the heroin, and I'm going to go into withdrawal.' And my response to that is, ‘How could the body crave a substance that it doesn't know? It doesn't regulate heroin. How could it crave something that doesn't regulate?' I believe it's the mind, has made a connection between the heroin and survival. Because you have felt bad, right? Because of trauma, or whatever it is, whenever you took the heroin, you felt better.  So I had a lady come in who had been on heroin. And she said to me, she's, ‘Well, I told my therapist, I'm coming to see you. And he told me, I had to let you know upfront and be honest and tell you I have self-destructive behaviour.' And I just smiled at her. And I said, ‘Really? What would make you think you're self destructive?' And she looked at me, because this is what she's been told for a year.  Lisa: Brilliant.  Dr Don: She says, ‘Well, I'm sticking a needle in my arm with heroin, don't you think that's self destructive?' And I said to her, I said, ‘No, I don't think it was self destructive. I think you're trying to feel better. And I bet you, when you stuck the needle in your arm, you felt better.' That nobody had ever said that to her before. And so I said, ‘Now, the substance you're using is destructive, but you're not destructive? What if I could show you another way to feel better, that didn't require you having to take a drug?'  Lisa: Wow. Dr Don: And I said, ‘You're designed to feel better. And I believe that the brain, what happened is, is it because you felt bad, you found a resource that temporarily stopped that pain.' And you see your subconscious mind is fully present in the moment. So when does it want pain to stop? Right now. And if that heroin stops the pain right now, then what happened was, is that system, you have two memory systems, you have explicit memory system that records all the information in real time. So it records all the data, and stores. No other animal does that. We're the only animal that stores explicit details about events and experiences. We also have an associative procedural memory that we learned through association and repetition over time. So, because the explicit memory kept creating the pain, because we kept thinking about it, and looping through this pain cycle, you started taking heroin, then you engage your second associative memory, which learns through repetition and builds, codes, habits, and behaviours.  Lisa: Wow. Dr Don: Because you kept repeating it your mind built a code and connected up the pain being relieved by the substance.  Lisa: Wow. Dr Don: Now, your subconscious mind is literal. So it doesn't understand negation. It only understands what's happening now. And so if your mind says that substance stops the pain, it doesn't look at the future and consequences of it. It only looks at what's happening. It's only our conscious mind that can think of consequences. Your subconscious mind, which is survival-based only understands. That's why people at 911 would jump out of the buildings. They weren't jumping to die, they would jumping to stop from dying. Yeah, if they didn't jump, they would have died right now. So even if they went another two seconds, they weren't dying now.  Lisa: Right? So it's really in the right now, there's really no right now. It's really in the seconds.  Dr Don: And the very, very milliseconds of what's happening now. And there's no such thing as consequences, it's basically survival. So now, if you keep repeating that cycle over and over using heroin, and then somebody comes along and says, ‘Lisa, you can't do that. That's bad for you. I'm going to take that away from you.' Your survival brain will fight to keep it because it thinks it'll die without it.  Lisa: Yeah. Makes a glitch.  Dr Don: It's an error message.  Lisa: Have you heard of Dr Austin Perlmutter on the show last week, David Perlmutter's son and they're both written a book called Brain Wash. And there they talk about disconnection syndrome. So the disconnection between the prefrontal cortex in the amygdala and the amygdala can be more powerful when we have inflammation in the brain. For example, like inflammation through bad foods, or toxins, or mercury, or whatever the case may be. And that this can also have an effect on our ability to make good long-term decisions. It makes us live in the here and now. So I want that here and fixed now; I want that chocolate bar now. And I know my logical thinking brain is going, ‘But that's not good for you. And you shouldn't be doing that.' And you, you're trying to overcome it. But you're there's this disconnect between your prefrontal cortex and your amygdala. And I've probably butchered that scenario a little bit. Dr Don: No, you got it. But 95% of your mind is working on that subconscious survival base. It's only about 5% that's logical. That logical part of your brain is brilliant, because it's been able to use reason and logic to figure stuff out. So it created the world we live in: automobiles, airplanes, right, computers, all of that was created by that 5%, part of the brain 5%. However, if there is a survival threat, survival will always override reason and logic. 100% of the time.  Lisa: Wow.  Dr Don: So you can't stop it. And it's what I talked about was that time slice theory. Did I mention that when we were going?  Lisa: No.  Dr Don: When I did my research, one of the things that I found was something called the time slice theory. And what that is, is that two scientists at the University of Zurich asked the question— is consciousness streaming? So this logical conscious part of our mind that prefrontal cortex, is that information that we're, as you and I are talking now, is that real, coming in real time? And what they discovered is, it's not.  Lisa: Oh. Dr Don: The 95% subconscious part of your mind, it's streaming. While let's say your survival brain churns in everything in real time, processes that information, and then only sends pieces or time slices, because your conscious mind cannot handle that detail.  Lisa: Oh, wow. So they're filtering it. Dr Don: Filtering it. And yeah, so as it takes it in, processes it, and then sends time slices or some of that information to your conscious mind. Right? But there's a 400 millionth of a second gap in between your subconscious seeing it, processing it, and sending it. And when I read that, that's when I came up with the idea that what's it doing in that 400 millionth of a second? It's doing a Google search, see? And so in that 400 millionth of a second, your survival brain has already calculated a response to this information before you're consciously aware of it.  Lisa: Wow.  Dr Don: And so the prefrontal cortex has got a filter on there to be able to stop an impulse, right? So it's the ventral lateral prefrontal cortex is sort of the gatekeeper to say, ‘Okay, let's not go into a rage and get into trouble. Let's try to stop that.' So we have that part of our brain. However, here's where the problem comes in— You're driving and traffic and somebody cuts you off. And so your first response is, you get angry, because this person is like, ‘Oh, I want to chase that guy down and give him a piece of my mind.' But that part of your brain can say, ‘Let's think about this. Hold on,' you know, even though it's 400 millionth of a second later, the first anger response, then it should be able to pull that back. Here's where the problem comes in. If getting cut off in traffic looked like you had been just disrespected. During that Google search, your now, your subconscious mind has filtered through every experience of being disrespected. And so much information comes in that it cannot stop the response. It overrides it, because now it feels threatened. And our prisons are full of people who had been so badly hurt, that that part of their brain can't do that. You and I can probably do that. Right?  Lisa: Sometimes. Dr Don: Because we can say, sometimes? You know, you can run them down. You can leave the car. But that's where the problem comes in. Yeah, can't stop that, then that rage and all those things come in. And that affects your relationships could affect all kinds of things. And people would say, ‘Oh, you got an anger management problem. We're going to teach you to live with, you know, and manage that anger.' What I'm saying is ‘No, it's a glitch. We don't need all that data coming in.' Right, good response, a Google search is creating the problem. Lisa: Like there's so many questions while hearing what you just said that, and I've experienced in my own life where with my family, where the initial response is so quick, that someone's punched someone else before they've even thought about what the heck they are doing. In the, when you said that, disrespected like this is, you know, I think when I've gotten really really angry and overreacted to something, when I think about it logically later, and a couple of times were of, like, in my early adult years, I was in a very abusive relationship. Thereafter, when I would get into another relationship, and that person tried to stop me doing something, I would just go like, into an absolute fit of rage. Because I was fighting what had happened to me previously, and this poor person, who may have not even been too bad, got the full barrels of verbal assault. Because I just reacted to what had happened to me 10 years previously. And that's the sort of thing where I felt like I was being controlled, disrespected when he went in. So that Google search is happening in a millisecond.  Dr Don: 400 millionths of a second. you couldn't have stopped, impossible for you to stop. And then people would say, ‘What's wrong with Lisa? She's just normally a great person, but where is that coming from?' Up until now, you may not have known that. But that's what it is. And it's impossible for you to have stopped. It was the same thing when my wife and I would say, ‘No, I don't like that.' And she would start to cry. I'd be saying, ‘Gosh, what am I doing to make this woman cry?' It wasn't what I said. It was what I said that activated her Google search, which then flooded into data about her father. She was responding to her father, not to me. We both didn't know that; we all thought that she was responding to what I just said. Lisa: Isn't this always just such complex— and if you start to dissect this, and start to think about the implications of all this, and our behaviour, and our communication and our relationships, so much pain and suffering is happening because we're not understanding, we're not, we're angry at people, we're disappointed with people, we're ashamed of things that we've done. And a lot of this is happening on a level that none of you know, none of us are actually aware of. I mean, I liken it to, like, I know that my reactions can sometimes be so quick. Like before, my, just in a positive sense, like effect glasses falling off the beach, I would have caught it with my bare hand before my brain has even registered it. I have always had a really fast reaction to things like that. That's a clear example of, like, that permanent brain that's in the here and now, has caught it before I've even realised that's happening. Dr Don: You know, and that's why I always say to people, ‘Did you choose to do that?' And they'll say, ‘Well, I guess I did.' I go, ‘No, you didn't.' Didn't just happen that happened before you could actually use the logical part of your brain. And because it was so much information, right? Even though the logical part of your brain would say, ‘Well, you know, don't lash out at this person. They didn't mean that.' It would already have happened. Yeah, I worked with a professional athlete. He was a baseball player playing in the major leagues. And I explained that concept to him. And then we were at a, one of his practice workouts, and his pitcher was throwing batting practice behind a screen. And so as he threw the ball, this guy, my client hit the ball right back at the screen, and the coach, like, hit the ground. Right? And I stopped right there. And I said, ‘Great example.' I said, Did your coach just choose to duck?  Lisa: Or did he automatically do it?  Dr Don: He had no, he had no time to use exactly. The logic. If you use the logical part of your brain, what would you have said? ‘This ball can hit me; there's a screen in front of me.' Lisa: Yeah, yeah. But you know— Dr Don: No way logic is going to prevail, when there's a threat like that coming at you. Yeah.  Lisa: This is why it's important because we need to be able to react in that split second, if there really is a danger and there's a bullet flying in ahead or something like that or something, somebody is coming at us from, to do us harm, then we need to be able to react with split second timing.  Dr Don: But you don't want that logic coming into it.  Lisa: No, but we do want the logic coming in when it's an emotional response. Do you think like, when people have had repeated brain injuries, they are more likely to have problems with this, you know, the prefrontal cortex not functioning properly and even being slower to respond or not getting enough blood flow to that prefrontal cortex in order to make these good decisions? Dr Don: Yeah, absolutely. And if you look at SPECT scans or brain scans of people who have had those kinds of injuries, you'll see that that part of the brain, that frontal part of the brain, the blood flow will drop when they get into those situations. Lisa: Wow. And then they can't make a good decision. And here we are blaming them for being— Dr Don: Blaming them for being— Lisa: —and they end up in prisons, and they end up with hurt broken lives and terrible trauma. And, you know, it's not good if they react and hit somebody or kill somebody or whatever. But how can we fix this? And that one of my go-tos is the hyperbaric oxygen therapy. And I've heard you talk about that on a podcast with Mark Divine in regards to your son. And that is one way we can actually help our brains if we've had had a traumatic brain injury or PTSD or anything like that, is that right? Dr Don: Yeah, my, like I said, my son had three head injuries, one in elementary school, one in middle school, one in high school. And the first one, we didn't see as big an effect. But he did have a problem. The second one, he ended up with retrograde amnesia. And then the third one, we just saw him go downhill and just really couldn't communicate very well, didn't have any energy, had a lot of anger issues and they just kept saying he's got major depression, you need to medicate them. And I was like, ‘No, I believe we've got traumatic brain injury.' But I could not get them to give me a script for a SPECT scan or an fMRI. It was impossible. And I wasn't looking for the structure, because they'd look at an MRI and they'd say, ‘We don't see any damage.' Well, it wasn't the physical damage we're looking for, it was a functional damage that we were looking for. Lisa: Yeah, the blood flow. Yeah.  Dr Don: And once we discovered that that's what it was, we got him into hyperbaric oxygen therapy, and he started getting the blood flow into the areas that he needed to process what he was experiencing. And so if you can, you can imagine how difficult that would be, somebody saying, well just go over there and do that. And you don't have the ability to process it.  Lisa: Yeah.  Dr Don: And so that frustration there is anger would be coming from just complete frustration.  Lisa: Yeah.  Dr Don: That he just couldn't do it's like, you know, you ran in somebody and you couldn't lift your right leg.  Lisa: Yeah.  Dr Don: Right. And somebody said, ‘Just start running.' ‘I'm trying.'  Lisa: Yeah, yeah.  Dr Don: It would be very, very frustrating.  Lisa: Yeah, I mean, having worked with, you know, my mum with the brain injury for five and a half years, and I will tell you, man, that is so frustrating. And still, even though she's had well, you know, must be close to 280 or something hyperbaric sessions, and gone from being not much over a vegetative state to being now incredibly high functioning. But there are still some pieces missing that I cannot get to. Because obviously damage in the brain where parts of the brain cells are, have been killed off. And we, you know, I'm really having trouble with things like vestibular systems, so, or initiation of motivation, and things like that. And hyperbaric can do a heck of a lot, it can't fix areas of the brain that is actually dead. So I, you know, and we don't have SPECT scans over here, this is not available. We don't do them. Dr Don: Yeah. And they're hard to get here. I just don't understand them. Lisa: They're very frustrating, because they just are so powerful to understand. Because when you see you've got a problem in your head, that it's actual physical problem, then, you know, it takes away the blame the guilt, and you know, like, I was having this conversation with my brother, and I'm, you know, talking about Mum, and why isn't she doing this, that and the other end. And I said, ‘Because she's got brain damage, and we can't get her to do that thing.' ‘But she's normal now. She should be doing that now.' And I'm like, ‘She's much, much better. But in that part of the brain, I haven't been able to recover.' It is still a thing. That is the year. That is, I am, not that I'm giving up on it, but you know, there are just certain things that we haven't quite got the full thing back. Dr Don: The SPECT scan would show that. And you'd probably see it, or do they do fMRIs there? Lisa: I haven't checked out fMRI because yeah. Dr Don: Check out the fMRI.  Lisa: I only heard you say that the other day, and I didn't, I knew about SPECT scans and I knew about. Dr Hearts and all the SPECT scans that he's done, and Dr Daniel Amen and the brilliant work on it all and I've searched the country for it. And New Zealand there's, they've got one that does research stuff down in New Zealand and I think but it's it's nobody can get access to it. And it's just, oh gosh, this is just such a tragedy because then we can actually see what's going on. Because people have been put on antidepressants. They've been put on, you know, antipsychotic drugs. Some things that are perhaps not necessary. We could have, we could have dealt with it with other other ways, like hyperbaric and like with, you know, good nutrients, and even like your program that you do that would perhaps be the first line of defense before we grab to those types of things. But— Dr Don: The fMRI would definitely probably help you. So it's, you know, a functional MRI. Yeah. So it's going to give you blood flow. I just had a young boy come in, nine years, nine years old, having real issues. And anyway, his mum's gone everywhere, tried everything. And I said, have you done an fMRI? She says, oh we've done the MRIs. But, and I said, ‘'No, you need an fMRI.' She'd never heard of it. No, I was telling her about it.  Lisa: I hadn't even heard about it either. Dr Don: She didn't want to do SPECT scans, because SPECT scans are going to put something into your system, right? So she didn't want any kind of dyes, or any kind of those, you know, radioisotopes and stuff like that. So the fMRI is the other answer to try to get that. Lisa: Oh, okay. I'll see whether they've got that, they probably haven't got that either. I'd say, probably having Dark Ages with a lot of things. Dr Don: There's so many things like that, that would give you answers that they just don't do, which is surprising to me. Because when you think research, I mean, you find out how effective they are, why wouldn't they do it? You know, they just won't. Lisa: Oh, yeah, like one of those doctors who was on my podcast, and we're talking about intravenous vitamin C. And he said, I said, ‘Why is it taking so long when there's thousands of studies proving that it's really powerful when there's critical care conditions like sepsis, what I lost my father to?' And they said, ‘Yeah, because it's like turning a supertanker. There's just 20 years between what they know in the clinical studies to what's actually happening in the hospitals.' He says at least a 20-year lag. And this is just, when you live in New Zealand, probably a 30-year lag. We're just just behind the eight ball all the time, and all of these areas of what's actually currently happening.  I wanted to go back to your story with your daughter. Because she's got Crohn's disease, 14 years old, diagnosed, having to hit all these restrictions, and that she's going to have to manage it for the rest of her life. And she will never be well. What actually happened? Because we didn't actually finish that story. Dr Don: Well, like I said, so she had, you know, suffered for many years with that, and she's an actress, so any kind of stress would just aggravate it. So she would constantly be getting sick, because, you know, the more stress she has, the more inflammation she's creating, and then she would just get sick and go back to the hospital. So it has really affected her career. So that's when my wife said, ‘You've got to come up with some answers.' And so I did the research. And I really believe that it was a trauma as a child that continued. Because this is when I made the connection between unresolved trauma and inflammation. Inflammation is the response to trauma, whether it's physical or emotional. And the purpose of the inflammation is to protect the integrity of the cell. So the cell gets into an enlarged space. So it sort of puffs out, gets enlarged and hardened to protect it from getting penetrated from any kind of foreign invader.  Lisa: Wow.  Dr Don: So the idea behind it is, it's a temporary pause, because there's been an injury. So the idea is, we need to protect this area. So let's protect it and not let anything get into the cells while, until the danger has passed. So this temporary pause in the system, temporarily suspends the immune system, temporarily suspends the processing of the cell until the danger passes, and then the immune system can come in and clean up, right and take care of everything. The problem was, is that my daughter's trauma was never resolved. So those cells in her intestinal area stayed in an active cell danger response, in an inflamed response, because as far as it was concerned, she was continually being assaulted.  Lisa: Wow.  Dr Don: Because it kept looping through the trauma. Yeah. So once we took her through this program, and we resolved it so that we were able to stop her mind from constantly trying to protect her from this threat as a six year old, because your subconscious doesn't have any relationship to time. So if you think about something that happened to you when you were six, that's happening now. So in her mind, she was being hurt now. And until we got that updated, so it's like a computer, I say your brain is a computer. Your body is the printer.  Lisa: Oh, wow. That's a good analogy. Dr Don: And so if the brain has an error message, it's going to affect the printer.  Lisa: Yes.  Dr Don: So in her mind, that trauma kept on looping. As soon as we got that corrected, and her mind understood that there was no memory— the memory was still there, but the activation of our nervous system stopped, the inflammation went down. Lisa: See, that's it, like your body's calling for action. I've heard you say—  Dr Don: That's when it processes the emotion.  Lisa: Yeah. So when you think back to a traumatic event in your life, and you start crying and you're reacting as if you were right there in the in, which, you know, I can do in a split second with some of the trauma that you know, been through. That means that there is a high-definition in your brain, that those moments in time are just locked in there, and causing this, the stress response, still now. And that's why you're crying years later, for something that happened. And it's actually calling for action. It's telling you to do something. But of course, it's a memory you can't do something. Dr Don: So action required, you know I think that's the glitch, the error message that I talked about. So if you think about something that happened to you five years ago, and you start to feel fear, or cry, your heart starts pounding in your chest, your mind is saying ‘Run,' five years ago, because it's seen it in real time. Now, it's impossible to run five years ago, but your mind doesn't know that. So it's going to continue to try to get you to run. And so a lot of times when I talk to people who have depression, one of the things I asked, I'll ask them is, ‘What are you angry about?' And they'll go, ‘Well, no, I'm not angry, I'm depressed.' And I'll say, ‘What's happened is your mind has been calling for an action for many, many years, that was impossible to accomplish. But your mind doesn't know that and it keeps putting pressure on you. Do it, do it, do it. And because you don't do it, it's using these emotions to call for the action, it stops calling for the action, it shuts off the emotions.'  Lisa: Wow.  Dr Don: And so now depression is the absence of emotion. Lisa: Right. Dr Don: And so what is done is to protect you, it's shut down the request. Lisa: Everything down. So you go sort of numb, numb and apathetic and just— Dr Don: Because you can't do what it's been asking you to do. And so it's been calling for that action for many, many years. You don't do it. And so it says, ‘Well, this isn't working. So let's just shut the system off for a while. We won't ask for the action anymore.' And so that's why the people are depressed. And as soon as you get to the cause of it, what has your mind been asking you to do and you resolve it, then your mind stops calling for the action. And then the depression will lift. Lisa: You had a great example of a lady that you worked with. Rebecca Gregory, was it from the Boston— can you tell us that story? Because that was a real clear example of this exact thing. Dr Don: Yeah. So Rebecca came to see me five years after the Boston Marathon. She was three feet from the first bomb that went off. And so her son was sitting at her feet. So when the bomb went off, luckily she shielded him, but she took the brunt of the blast. She lost her left leg. And five years later, she's having post-traumatic stress, right? And she says, ‘I have nightmares every night. I heard about your program. I heard that you can clear this in four hours.' She says, ‘Iy sounds too good to be true.' But she says, ‘I'm completely desperate. So I'll try anything.' And so she came in and sat down. And what I explained to her as she started to talk is, I said, ‘Rebecca, do you know why you're shaking and crying as you're talking to me right now?' And she says, ‘Well, because I'm talking about what happened to me.' And I said, ‘That's right. But your mind thinks a bomb is about to go off. And it's trying to get you to run.' And I said, ‘But there's no bomb going off. It's just information about a bomb that went off. But your mind doesn't know that.' And that, she'd never heard before. And so what we did is over the next four hours, we got her mind to reset that high-definition data that had been stored about the bombing into a regular alpha brainwave state, right, where it's very safe and peaceful.  So she could recall it and she could talk about it without the emotion. Why? Because, now we're not going for happy, right? You know, it's still sad that it happened. But what we're trying to stop is that dysregulation of the fear, the call for the run. That stopped. And you can watch your testimonial on her on our site, and she just talked about, she goes, ‘I just couldn't believe that you could stop that.' Lisa: But in four hours.  Dr Don: And then now she can go out and she spoke all over the country. You know, she was a very high-profile lady who did a lot of great work in trying to help people. But she was still suffering with post-traumatic stress. Yeah, trying to help people who were experiencing post-traumatic stress.  Lisa: She knew what it was like.  Dr Don: She was living it. Same thing. I tell the story, it's another dramatic one was a US Army sniper who had to shoot and kill a 12 year old boy. Lisa: Oh, gosh.  Dr Don: And when

Douglas Skipworth has had an entrepreneurial heart from a young age. He began his journey in community banking and worked on earning his CPA and CFA certifications. Since then, he has been in the residential real estate industry for about 20 years and is passionate about partnering with others to develop thriving real estate businesses. He currently co-owns CrestCore Realty, which manages 2,500 properties in Memphis, TN. Along with his partner, they have built several real estate companies in brokerage, management, lending, and construction.  In this episode, he discusses his life and business, the advantages of community banks, ideal criteria for investing in a new deal, the importance of connecting with others and shares helpful advice on education for today’s world. Listen in as he shows us hows real estate and adding value to others tie it all together.  Episode Highlights: How Much It Helps Your Business If You Connect With More People Effects Of Borrowing Too Much Money For Education How Local Banks Help In Real Estate Investing Importance Of Establishing A Relationship With Local Community Banks Douglas’ Interest In Helping Certain Types Of People Via His Businesses   Connect with Douglas: Website: crestcore.com Email: Douglas@crestcore.com - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -  TRANSCRIPTION  Intro: Hey guys, this is Eden your co-host. Welcome to the show where we talk about all aspects of commercial real estate investing. Today, Don is interviewing Douglas Skipworth. Doug has been investing in real estate in the past 20 years. And today he'll cover a lot of subjects including community banks, relationships in real estate and some philosophical issues like college and financial freedom through self-educating yourself with the tools that are available to us nowadays. I want to mention, again, our new website that's forming a decent shape you can visit us at DonandEden.com. Also, remember you can always reach out to us I answer all emails personally: Hello@donandeden.com. So, let's get started guys. Lady: Welcome to the commercial real estate investing podcast with Don and Eden where we cover all aspects of real estate investing with special attention to off-market strategies. Don: All right. Hey, Douglas. Welcome to the show. Douglas: Hey, Don. Great to be here. Don: Yes, I think you deserve it because you've been doing real estate since 2001. Right? Douglas: That's correct. My partner started in 2001. And I started in real estate in 2002. Between the two of us, we're going on 20 years. Don: Wow. So, you guys have been through a lot, right? So, you started, the market was going up, then there was a bubble, and then everything changed. And then you guys probably had to make some adjustments and change business models. Now, when the markets have been going up for a few good years. Douglas: Yeah, it's so funny, because I don't know when you always talk about the good old days. I don't know if the good old days were when things were running up, or the good old days, because we were, you know, we were buying and refinancing and things were great or when things kind of went bust, because that was a huge opportunity for us personally to add to our portfolio as other investors busted in community banks had deals to give away and then rates have been so low for the past 10 years that that's been a good time. So, if you kind of look back at the past 20 years it has been the good old days. Don: Yeah, I don't know who said it. I'm pretty sure it's Warren Buffett. "When there's blood on the street, buy real estate." Douglas: So true. Don: Yeah. So, tell us about the early stages of your career. How did you get started? What did you do? How did you even hear about real estate? And what were your goals at the time? Douglas: Great question. After college, I knew I wanted to start a business. So I kind of jumped into commercial banking and accounting, got my CPA and my CFA certifications to learn all I could about business and then I was working in New York City at the time and I had an opportunity to come to Memphis to work with an owner-operator of a real estate business when he was ginning up a tech company. It was kind of like a proprietary Zillow back in the early 2000s. It was a great chance for me to get on the owner-operator side of the business because I kind of knew from my first few years I wanted to be a business owner. So, I just kind of jumped in real estate tech and was learning a lot about real estate and I moved into a neighborhood and bumped into a guy who was a jogger. So, he and I started jogging together. He was in manufacturing, managing plants across the country mechanical engineer by training and he had in high school, a mentor who owned real estate and so he was building wealth through real estate while working his full-time corporate job. And I was working in real estate on a data in business side working with realtors and appraisers on the residential side. So, we had a lot of commonalities, shared some interest, but he kind of told me about what he was doing with his investing portfolio of properties, both multifamily and single-family, I got interested. So, I started doing the same thing on my own. And we would jog together and share war stories and share best practices and really developed a friendship and almost a partnership. So, we decided we wanted to try and do a deal together that neither of us had done. So, to kind of share the risk. We ended up doing a tax sale because we had never bought a tax sale, either of us. And so, we just kind of shared the risk on that and it went well. Then we shared the risk on another one and another one and then we bought a little portfolio together and then we bought a few more together then we started doing some third party management together and fast forward to today we've got several hundred units together, we manage several thousand units together, we've got a brokerage and property management and maintenance company would do some hard money lending. So, we've enjoyed our friendship and business relationship. Don: That's truly amazing. I mean, I think, you know, going on a jog, and then meeting your future business partner that you're going to do so many things with, it's just outstanding. And that's why people always say that when you are trying to get into real estate, then you should always say that this is what you're doing to people. Because people are going to tell you something back and they're going to tell you, hey, you should talk to this guy or I've heard about somebody who does that does this and then you get ideas. So, you always gotta talk to people. And that's a great example of how talking to people, getting to know them, listening to them, changes your life in a good way. Douglas: That's a great point. Especially I was laughing about This was somebody the other day, because when I was working in banking when I was working in accounting when I was working in real estate technology, I would tell people that and nobody seemed interested or knew what to talk about. But as soon as I started investing in residential and small multifamily properties, and I would mention that everybody had either thought of it or had a friend or a family member who had been an investor at one time, or were thinking about doing it themselves or just buying a house. So, to your point, it just opens up a wealth of conversations and connections, that being a real estate investor and talking about it highly encourage people to do that. Don: Definitely. Now, there's another thing that I want to talk to you about because I just had this conversation with my friend and you just mentioned it that you went to college back in '01 he said, right? Douglas: I wish and I graduated in '96. So, I'm a little older than that. Don: Yeah, so a little bit older. So, this is exactly the time where you're growing up, I believe. I don't know how old you are. If you want to share it. Douglas: I'll be 46 in two weeks. Don: 46. Happy birthday! Here's my question. So, you are growing up at the times where your parents must have told you for the people that were close to you to go to college, right? Get a degree if you want to be successful in life, right? Now, my generation, I'm 30 years old, and I never went to college. So... Douglas: Awesome.  Don: I've been investing in real estate since I'm 23 years old. My background is kind of different because I wasn't growing up in an environment that tells me that I have to go to college because we had the internet so we could hear other people talking. And so, there is the age of information where you could get a book for 10 bucks so you can listen to a podcast for free, right and get all the education you need. So, my question to you, would you recommend going to college in modern times or just jumping right in and just getting an education from a different source? Douglas: If you're entrepreneurial enough, and you have a plan and you have a determination, then yeah, you can do it on your own. There is a lifelong learning component that podcasts, books, resources now are at our fingertips as well. Well, it's just meeting people's mentors and connections. So clearly have learned more since I've been at a school then I learned in school. But for the right person, so for example, I got a master's in accounting. When I was out of school, I worked full time went to school at night, and I got scholarships and the company paid a little bit. So, to get that degree to get that knowledge and earned that credential at a private university cost me $2,000 of my hard-earned money. All the rest of that money came from somewhere else, which was, which was a good lesson that I learned how to do real estate as well. You don't have to go out and spend all your hard-earned money and borrow. There're ways if you can get creative, you use other people's money. So, what I wouldn't suggest for 99.9% of the people is to go borrow $70,000 a year to get an education, an undergraduate... Don: Exactly what I see. I mean, I see the age doing that. And I'm thinking you guys are taking debt for so long and you're also investing time. So, you're taking debt and investing time and I don't like doing one of them. I don't like investing my time for a long term period when I don't know if it's going to bear any fruits. And when you invest your time and your money, it kind of sets you back so much. Douglas: It's applicable in this because education is so important, whether you're learning through podcasts or books. Yeah, one of my mentors, he owns 5200 unit multi-family, mostly low income that they do a phenomenal job across the Southeast. And he told me many years ago, "Never borrow unless you're borrowing against an income-producing asset." That's where I was like, man, I can't borrow to go to school' I can't borrow for a car. I got to borrow against an income-producing asset, whether it's a business or a real estate piece of property. So that's a valuable lesson that a super successful multifamily investor gave me 20 years ago and I've never forgotten. So, very much on point to not borrow for that education, not borrow significantly for that education. Because it's going to put you back. Don: Yeah, I agree. And I think what I'm going to do, you just gave me an idea. I'm just going to record an episode later on that will talk about that subject specifically. I want to get back to borrowing money because I know you have a way of borrowing money. You're borrowing money from community banks. Douglas: Yes. Don: So, tell us a little bit about that. I know it's different now, you can make things happen when you work with the community bank. Douglas: Yeah, so we've worked with community banks since 2001. Part of the reason we like working with, some of the benefits is their local that you can go to church with them, to school, kids playing on sports teams, living in the same neighborhood. So, there's more of a story relationship aspect, and then there's also the local component to it. So, they're going to work with you and get behind you and understand that and then they're going to be a lot more interested in that relationship and kind of support you. They can't do as big a deal. They got lending limits, but they also have access to other local investors and kind of keep you in mind. So, for us, it's just been a great relationship. The Real coup for us was when the bad times hit for other investors and those banks had property, they were taken back. And they were looking to get it off of their balance sheet because they did not want to own real estate. And they didn't give it away. But there they created a win-win. It was kind of a "your price, my terms" situation, whereas they would say, "Hey, we want it at this price. We need to get it off at this price." And we say, "Okay, these are our terms." And if they said, "Hey, here, the terms we need," then we'd say, "Well, this is the price that we need." And we picked up hundreds of units during that '08 to 2014 probably working with community banks and borrowing and all the money from them on those deals. Don: Yeah, that's amazing. I know, multifamily was doing pretty well in '08 relatively. So, it's very smart to buy them at that time. I wish I was investing in real estate at that time, life would have been different. So, I want to ask you about your relationship with this bank. So, when you establish your relationship with the community bank, how do you do that? So how do you choose the bank? Is it more personal? Are they looking into your financials in a more personal way, not as strict of a guideline is what I'm asking. Douglas: There's no doubt to have guidelines. But you're right. It is a relationship. If someone were to look for a relationship with a community bank in their location, start with friends, family, mentors, anybody who knows somebody who was either sympathetic to you personally some way or to the real estate property investing or learning on real estate. So that's how we've established those relationships. There are plenty of local community banks that don't want to have anything to do with what we're doing. They don't like lending on real estate, they've got too much real estate, whatever. But some lots are in it's through those relationships where you develop a business strategic partnership with the banks. Don: Would you say that these loans are typically more expensive than what you would get with a regular loan? Douglas: So, for us, we kind of looked at loans and there's the traditional mortgage market where you can price things pretty cheap, but you got to have good credit. And then there's the community bank. And there are private loans. There's hard money lending. So, there are several different routes. Community bank financing is pretty cheap. It's got some strings attached, because they want you to jump through some hoops more so than a private lender would, more so than a hard money lender would. It will be things they're going to review past couple years of tax returns, they might run a credit check on you, they're going to ask for you sign a personal guarantee. So, they're going to be some things that some other lenders aren't going to have. But again, they're going to look out for you and they're going to keep you in mind when they're talking to other investors. Other investors want to get out of deals, they're going to say, "Hey, we're going to talk to Don and Eden they're doing this'' or "sell your properties to Don Eden, and we'll finance it" where they can just assume your mortgage or assume your loan. So, we've done that with banks and through relationships, which is a lot harder to do with national lenders as you know. Don: They lend for properties that are in their area, or they could lend for properties anywhere in the US? Douglas: Primarily they'll lend to either properties that are in their area or borrowers that are domiciled or headquartered or located in the area. Don: Yeah. Douglas: So, they will do deals outside of the state if it's somebody they know locally. Don: Yeah, that's very interesting. Yeah Douglas: It's great. And it becomes a network and they become part of your network, and they become one of your strategic partners. And you can develop relationships with multiple community banks and work with all of them. And it's a great mutually beneficial relationship. Don: Terrific. Yeah, I think that's critical information for somebody who's listening to that show. And they want to get a loan for a property that they want to buy and they don't know who to talk to. I guess that's just an option that you got to consider. Go talk to your community bank, establish a relationship and get to know the people there because real estate is a long play. You do something where you plant seeds right now, and you wait for the seeds to sprout in the future. So, I guess that's one seed that you got to plant right? The community. Got to go and talk to people when you want to do deals. Douglas: It's been everything from helping you find new deals to financing deals to providing opportunities for other lines of business. So, they can help you finance because you built up a track record with them and they understand who you are and how you operate. So, they become a champion for you within their organization and the community. I couldn't recommend it highly enough. It's been one of the keys to the foundation of our real estate business. You've got deals, financing, and management when it comes to investing and finding deals, financing or paying for those deals and then manage them after the fact. So that financing piece is huge, whether it's your cash or somebody else's cash. Most real estate investors use somebody else's cash. So, a community bank is a great option. Don: Awesome. You manage over 3000 units and you also invest in real estate. So, you bought together with your partner over 800 units and you haven't had any money partners or equity partner so you've done this by yourself, complete with both of your hands. And that's amazing. I gotta say, I host a lot of people here on the show. Most of the people that try to syndicate, try to get to raise funds, and then buy their deals. You've been investing for better of two decades right now, and you've been doing that on your own. But I want to ask you if you've been investing in real estate and creating your wealth, why do you still want to do property management? Is it because of your investments? Or is it just because that's your core business? Douglas: Probably all of the above. And we feel like part of what we're here to do is to serve people profitably, you know, so we're in business to serve. Because we have our rental properties, we have to do property management, and we'd like to have our rental properties for the duration. So, we need to do property management and then managing properties for others is a skill that we have developed so we can get paid for it, we can get better at it and we can use it to serve others. So, it's kind of a mutually virtuous cycle of things going around where we get better, it helps us manage our properties better but helps us serve our clients better. So... Don: Win-win-win-win-win. That's many things in real estate. Douglas: Absolutely all the way around. And that's why we've expanded to Jackson, Tennessee, and Dyersburg, Tennessee and you know, hopes to expand into Eastern Arkansas, Central Arkansas, North Mississippi, Central Mississippi over time because it benefits all of us to do that. Don: It's what I like about real estate that you could find so many things to do in real estate that creates a win-win-win-win in different types of businesses. It's not the way that it is in real estate. You can create a business that creates wealth for you, that helps you with taxes that appreciate that cash flows, and that is being managed by you as another business. It's just amazing. So, we've been doing all that. It leads me to ask you, what would be the criteria for buying a new deal? Douglas: We've kind of bootstrapped it on our own. So, we're limited because we don't have equity partners and we don't syndicate. We usually have to have the financing in place. So that's assuming a loan, or some type of owner financing, or working directly with a bank that can provide the purchase money. We're super limited on what we do, which just leads to more deals for everybody else clients and that's great, but we're super selective at this at least we have been for the past 20 years we look forward to someday where we can just go out bad things all cash and not worry about it. But so, we're selected looking for different things, whether it's a single-family home, small multifamily or small commercial building. The recent thing we bought a property management company and bought the building. So, we're now an owner occupant of our office in that building. So that's a great win-win. Don: You buy the tenant and the building and you're the owner of both. Douglas: Exactly. So that's the most recent that was a month and a half ago. So that's been great. Don: You've been working with your partner surely but slowly, right? You've been managing properties, investing, buying them one by one with your money, creating long-term wealth, going to stay in your family forever. What would be the next step? Douglas: One thing we've been very fortunate on it's just building and surround yourself with some great people and building a good team. We've got folks who help run the businesses and operate the day today. And that's been awesome for us. So, continuing to develop those folks and grow opportunities for them as well as for ourselves. So, with the businesses we have now, which are really real estate services, brokerage, property management, maintenance, like said financing, then we have some business services, we provide some virtual assistants and some business back end support to our businesses and a few others. Just growing those real estate service lines and business service lines in this geographic area is our next focus personally for the next five years. Don: Awesome. So, what kind of areas are you guys going to focus on it in case anybody wants a property manager or wants to consult with you on a few things that have to do with real estate? Douglas: Yeah, so we help folks like ourselves, people who are wanting to build wealth, people who are wanting financial freedom, people who are looking to create an income or buy something to pay it down over time in resident real estate, small commercial real estate, multifamily real estate in kind of this MidSouth Mississippi, Tennessee Arkansas area around Memphis, Little Rock, Jackson, Mississippi. So, anything related to that brokerage, property management, maintenance, construction, lending, helping people fix and flip, helping people bridge loans into a long term loan. And then we provide virtual assistant services for folks who are doing real estate services, whether it's just somebody operating on their own or a brokerage or property management company, we're happy to help that because we've got a lot of experience. We got about 120 virtual assistants right now in the Philippines that work for 18 companies. Again, we feel our calling is to help people succeed through business and real estate. That's what we're trying to do and we're trying to help other people do it too. Don: Try and make an impact when you’re already wealthy. That's the next thing is to try to make an impact and help other people and that's truly a remarkable goal. So, what would be the best way to contact you Doug in case anybody wants to get in touch? Douglas: I love to talk to anybody. Easy to send me an email at Douglas@crestcore.com or find me on LinkedIn or find me on BiggerPockets. Those are probably the three best ways to get in touch. Don: Right. So, I want to thank you very much for being on the show today, Doug. Douglas: Love that, Don. Thanks for having me. Lady: Thanks for listening to the Real Estate Investing podcast with Don and Eden. Stay tuned for more episodes. Till next time!

DE 26: Tax Strategies and Real Estate Investments with Thomas Castelli   Thomas Castelli is a licensed Certified Public Accountant (CPA) in New York. He is certified in Real Estate Financial Modeling and Tax Strategist. He comprehends that putting resources into real estate, joined with tax strategies and arranging are critical to limiting the taxes and building long term riches. He holds equity positions in several multifamily properties and participated in the syndication of an 82 unit apartment complex as a general partner. All his experience in investing and tax strategies are really helping him in finances. Highlights: Difference Between GP and LP Thomas’ First Investment How Much Money Is Needed To Invest In Real Estate How Many Partners A Partnership Should Contain And How Should The Partnership Split Be.   Connect with Thomas: Email: ThomasCastelli@NewBabyloncapital.com or Thomas.Castelli@WholeCPALLC.com Podcast: Real Estate CPA   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -  TRANSCRIPTION Intro: Hey guys! Today I'm going to interview Thomas Castelli, Thomas is a real estate investor. And I think the most interesting thing about him is that he invested in his first real estate deal as a limited partner and that is something that we haven't discussed yet. A lot of people here don't know the difference between a limited partner and a general partner, also known as the sponsor or the syndicator. And today we're going to talk a lot about the difference between these two types of investments and how you can get into real estate as a passive investor with not a whole lot of money and learn a lot about real estate in the process also, while you make money, so that's a great opportunity. And I think it's a very important episode for everybody who is considering to invest in real estate. So, let's get started. Lady: Welcome to the Commercial Real Estate Investing podcast with Don and Eden, where we cover all aspects of real estate investing with special attention to off-market strategies. Don: Hey, Thomas, welcome to the show. Thomas: Hey, Don, thanks so much for having me on today. Happy to be here.  Don: Of course. How's your day going so far? Thomas: It's going great. The weather's not too great here in New York. It's been raining for the last few days. But other than that, I can't complain. It's a good day. Don: Yeah. Well, you know, it's only going to get colder from now on, right? Thomas: Yeah, yeah, yeah, this the one bad thing about living in New York is it could be really hot in the summer and the nineties, and then go all the way down to the teens if not lower, when you move into the winter months.  Don: Well, you know, I live in Florida, we have warm weather all year round. But then in the summer, you got the hurricanes and you got the rain. That's just non stop, and you can't plan anything. And so, you can't go out and do anything because whatever it is you're trying to do. There's going to be rain, and there's going to be sun and there's going to be rain and there's going to be Sun. It's just super annoying. But yeah, I'll take that over New York every day of the week.  Don: Yeah, well, I would too. I don't blame me. Okay, so, tell us a little bit about who you are, how you got into real estate and then what you're doing currently. Thomas: My name is Tom Castelli. I'm a CPA. I work for a company called the Real Estate CPA as a tax strategist and I primarily do tax consulting for real estate investors. So, I help them come up with a plan to minimize their tax liability each year. The super exciting job keeps me really in touch with real estate investors and what's currently going on. Outside of that, I am an investor myself. I got started as an investor on the LP side back in 2015 when I started to make a few Limited Partnership investments with someone who basically would become my mentor. I made my first LP investment in a 48 unit apartment building Class D apartment building and got full renovation in Columbus, Ohio. That was pretty exciting. And from there, I started learning more and more about syndications. That ultimately culminated in me participating as a general partner in the syndication of an 82 unit apartment complex in Jacksonville, Florida, actually down in your state.  On the Investment side what led me to syndication though was when I was in college, I was pretty much saying, ‘Oh, I don't want to like live the normal nine to five life.’ I need a way out of this and start researching real estate, you know, the Rich Dad, Poor Dad, all that. And then eventually it led me to a meeting of RIA meeting out here on Long Island, and I met a syndication group and I went to their three-day seminar where they went through syndication A to Z, and I fell in love with syndication. That's where I met my mentor. And that's the person who I started investing with on the LP side, and it all led up to that eight units GP. Since that point, I haven't been too active. I've made a few investments in LP since then, but at this point, just kind of waiting for us to be putting this property on the market. Don: I know we already discussed that on previous shows. You know the difference between LP and GP, but I'm sure some people are going to listen to that, and they're not going to understand really what we're talking about if they're new to all the terms. First of all, I like it that your first deal was an LP so you invested with somebody else, and then we're going to talk about that, but first, how about you give us a brief explanation about the difference between limited partner and a general partner and then the way that a syndication process works. Thomas: Yeah. So, the limited partner and investment, you're the passive investor, you're the silent partner or the money partner some different terms people say. You're investing with the general partner, and you're not taking an active role in the business or the investment. You're just kind of sitting back and collecting your check. I think the biggest aspect for a limited partner when you are investing is to understand who the general partner is, what their track record is, do they have experience with the assets and just have an overall idea of what market you're investing in that can be pretty important. But for the general partner side, the general partner to deal they are responsible for putting the entire deal together from A to Z.  So, it's finding the property, going through the acquisition process, including due diligence, and then ultimately overseeing the property management than any renovation plans you have for the property, that entire processes and ultimately selling it. They're also responsible for raising the capital from investors, the LP’s and making sure that they are handling Investor Relations properly communicating with their investors. They're also responsible for getting the debt financing working with a bank or perhaps to Fannie/Freddie or mortgage brokers, however, we're going to go about getting that loan, that is their role. They're pretty much responsible for the entire thing, which is why as a limited partner, when you don't have that control when you don't have that management, say, it's very important to know who you're dealing with on the general partnership side. Don: Yeah. And I would like to add a few things. So as a limited partner, the advantage is that you're passive and so you don't have to worry about too many things. So, the only time you have to worry about is when you're getting into the deal. You have to do some research, you have to know the market, just like you said, that's pretty much it. You invest the money and you should be getting some nice returns. I always say that if I wanted to retire, I would just invest all my money as a limited partner with other people that I trust and just go to a cruise or something and just have fun forever because you get good returns. You could get, I would say 15%. It's pretty normal to get on a yearly basis. If you know who you're investing with, and you have experienced and you could even get a 20% return on an IRR based on for five years. So that's the advantage as a limited partner.  The advantage for the general partners, also known as the sponsors of the deal, is that essentially, they collect money from investors. So, they raise capital, just like you said. Typically, they have to raise about 30% of the purchase price of 20% for a down payment, and then 10%, for CapX, what is known as the repairs, or the implementing of the value add plants or the property. And so, what happens is that they raise the 30% from other people, and they get a split of 30% of the entire deal. So, let's say that they improve the building that's worth 10 million to a point where it's worth 13 million, so they would make 1 million in profit if they get 30%, roughly 1 million, so 900,000. Yeah, you are a CPA. And then that is the reason why you decided to invest as a limited partner because you wanted to keep your day job, right? You wanted to be a passive investor. And you also wanted to get into investing in syndications, right? And learn as much as you can. Thomas: Yeah. One of the things is like when you're first I guess, taking on this investing adventure that some investors go on is it's good to have the experience on the LP side first, because you kind of get to see it from the back end angle, and you experience the entire process from A to Z as an investor from the investor's perspective and you ultimately learn a lot about how to do it if you're looking to be a general partner. So, that's one of the reasons why I started there. Don: Okay, great. So, let's talk about your first investment. The LP. So, the limited partner investment. So how much money did you invest in that deal and how many units was it? Thomas: 48 units in Columbus, Ohio. As an LP, I invested about $10,000 into a deal. It wasn't all that much, my parents invested a lot more but that was just the point where I got my foot in the door. On that deal got a lot of behind the scenes looks at what was going on. I was on a lot of property management calls. So, the property needed a gut renovation. I remember seeing pictures of this thing. It was like we went in there when we first acquired it. And there was, there's a lot of needles on the ground, bad things going on in there. So, pretty much had to vacate the majority of the property and go in there and do significant renovations to both the interior and the exterior of the property as well as new signage, print to reposition the property, and then leased it back up. And it was overall an exciting deal. We had some issues with the property manager, had to get rid of him and replace them. But overall, great deal, great return, I think we did 32% over 18 months.  Don: Wow!  Thomas: It was pretty solid. Don: Wow, that's nice. What I like about that is that you can get into a real estate deal with $10,000. So that's for everybody out there. Right? So, it's exactly what the message that all the internet gurus are trying to say like Grant Cardone and people trying to say just invest in real estate. It's that easy. So, all you need to have is $10,000 in savings. Even though I know a lot of our sponsors and general partners are trying to raise at least 25,000 typically. So that's what I see most of the time. Thomas: Yeah, you know, that's accurate. You know, at this point, I think it was the relationships I developed with the sponsor that allowed me to get into the deal at that level. I guess it partly depends on the relationships you have. You can build a relationship with people they might allow you to get in at a lower level. I could also look at crowdfunding. I think in crowdfunding thing with the Reg A offerings it is you can get in like with as low as $1,000 into some of these properties. Don: So, you invested in that LP you made some good money. And then how did you proceed with investing in real estate? Did you invest in it in another LP before you became a sponsor yourself? Thomas: Yeah, after that I invested in another Limited Partnership investment. It was eight units in Covington, Kentucky. That I was through a coaching program or a mock coaching program like the beta version of it. By investing in that property, I was able to go through the mock coaching program. And that's where I learned a lot about market research, learned a lot about the acquisitions process, how to underwrite deals, that side of things. And also, we worked very closely together after that, looking for new properties in that market. It was an exciting time building relationships with brokers. So that was my second LP investment. From there, I made another one. And that was in 17 units in Covington, Kentucky. We currently have a duplex left where we're looking to sell from now on. But then there was the general partnership was next. Don: Okay, so let's talk about that phase. I'm sure it's the most exciting phase of your life being a sponsor of a deal for the first time. So, I know you worked on the acquisition side, which means that you were the one who created the relationship with a broker, you were the one to do all the due diligence and get the deal. So, you got to deal with those are your part right? And that was in Jacksonville in Florida, which is an emerging market. Everybody's talking about Jacksonville for a while. I've looked in that market also myself. I was looking at 80 units over there at a time but then the numbers did not work. I know you did that back in '17, where it was a little bit easier to find something good in Jacksonville. So that's about, First of all, I want to know why you chose that market. So that's the most important thing. Because I know that everybody always says, the first thing you have to do is pick your market. So why, why Jacksonville? Thomas: There's a lot of reasons. It was at the time, it was one of the top growing cities. If you look at employment, which is pretty much one of the most important aspects. It had growing employment. It also had diverse employment through multiple sectors. So, it was not really at risk of anyone sector being damaged in the outlook for that was pretty strong. So that's one of the reasons why I wanted and we looked down there was for that, you know, that reason alone. The second reason was we had a contact with a very, very good property manager who's already in that market. It was a natural fit to start looking down there. This property manager was great at helping us on the due diligence side and connecting us with brokers. So those are some of the reasons that we started looking down there was primarily for those two reasons I'd say. Don: Okay, so you're looking into the deal and then you decide to create connections with brokers right in Jacksonville? So how did you go about that? How did you do that from New York? Thomas: At this point, I was pretty experienced that cold calling or cold calling basically brokers and sellers directly for other deals we're looking for in Covington, Kentucky prior, I called the property manager way to contact with and I said, ‘Hey, you know, we'd love to hear about what are the top brokers you're currently working within the market? Who should I contact if I'm looking to pick up some properties in Jacksonville?’ And she provided me with contact information. So, brokers and I contacted pretty much all of them and one of them we struck up a really good relationship right off the bat. And he started sending me a handful of properties. And from there a lot of the properties were not really what we're looking for. One of them was all right, but the value add component was completed already. So, it wasn't much meat on the bone but so he sent me one good property and that was the property with a pursuing. Don: Okay. So, what made you feel like this property was good? How did you see that? Thomas: So, the first thing was that it was being managed by this property manager already. So that was the first aspect because we felt very comfortable with this property manager and the level of expertise they had in the market. And because they already managing it, it was just favorable right off the bat to us.  Don: We also saw that they could tell you all the insights and tell you exactly what they see from the inside, right?  Thomas: 100%. That was one of the I would say, if not the primary reason for us going forward on the value add. So, I did see opportunities to fix up some of the exteriors of the property. There's some curb appeal, that could have been some re-signage and curb appeal that needed to be upgraded on the exteriors. The interiors, weren't all renovated to the same level at this point. So, there's a lot of opportunities to go in there. And as the units were turning naturally, it was already stabilized. Think it was 90% or 92% when we purchased it, so it was pretty much as units turned, we were able to go in there and renovate the units to the market standard raise the rents. And that was ultimately LOI driver for us. And one of the reasons why we liked it, we liked the upside potential. Don: Okay, so you renovated the entire 80 units? Thomas: Not the entire 80 units. I think it was about half the units needed the interior upgrades, the other half is already in pretty good shape. I walked about half the units on the due diligence side, one of the partners in the deal walked the other half. And overall, some of us were nice. The other ones not so much. So, the ones that weren't up to standards were the ones we renovated. I believe it was about half. Don: Okay, so you renovated about 40 units. How much money did you invest after you did all the work in every unit? Thomas: That is a great question. I don't have that number offhand. I think it came into a bit around for the unit very, because not all the units need. Don: You can say roughly. Nobody's going to check that. Thomas: Yeah, yeah. I think it was roughly between $3000 and $12,000 per unit. It just depends on how much work that particular unit needed. Don: Okay, so let's say that you invested $8000 in each unit. So that would bring us to around $320,000 in CapEx. Thomas: Yeah, that's very accurate for the number. Don: Okay, so you bought the property for how much? What was the purchase price? Thomas: The purchase price was $3,850,000. Don: Okay, and then you invest another $320,000. Right? Thomas: Correct. I think we're coming under budget with that. We have some CapEx, some money sitting in our CapEx account that we may end up just distributing back to our investors at this point. Don: Okay. And so, did you reduce the expenses too or just increase the NOI by raising the rents for these improved units? Thomas: The property on the expense side was pretty much being run pretty efficiently already.  Don: Your managers pretty good over there, right? Thomas: Yeah, there wasn't much to lower on the expense side, it was more or less work we did on the upside.  Don: Okay. So how much were you able to push the rents with improvements of the units? Thomas: Some were one unit, some that were two units, we had three units. Two units to the ones I know offhand was $650 when we got into it and were able to raise them anywhere from $750 to $825 is what we’re pushing right now.  Don: Wow. Okay. So, if you improve to $800, you improve 40 units by $150 Premium per unit, right? Thomas: Yeah, give or take. Don: Okay, so that would be $6,000 a month. Thomas: Okay. Don: Okay, so a year that would be $72,000 increase to the NOI. Now if you divide that just for the listeners to understand the value add here if you buy $6000 every month, that's the rent premium $150 for 40 units that they improved, times 12. That would be $72000. And then if you divide $72,000 by the cap rate, which is the formula to understand the value, you divide NOI, by the cap rate. So let's divide the NOI premium here which is $72,000, by the cap rate that you would buy a multifamily market cap rate, I would say 6%. Right? So that would bring an increase of about $1,200,000 to the property. So let's take out the CapEx, which we improve the property at $320. So, you got an increase of about $880,000, to the property, give or take, am I right? Thomas: Yeah, give or take. I think that the property being valued right now, around $6,000,000 is what we're getting some offers on. Don: Wow. Wow. How is that even possible? That's even more than... Thomas: Yeah, yeah. I think you know, what it comes down to is that the markets just so hot down there. Don: Yeah. Thomas: That people are willing, perhaps maybe overpay a little bit to get into some of these assets, which is, I guess, a horse of another color. Don: You know, when I think about that, I can say what I think about that because I've had this conversation with one of my friends just recently. So, I think something is going on because there are all these baby boomers now retiring, right, and then you have all these trusts and all these funds and all these institutions are just trying to preserve capital, and they just want to park money anywhere they can. They don't want to have dollars, they just want to have something real. Don: So Something is going to happen. But you must have heard it before. So that's why I think the cap rates are getting so compressed. And I think people are just, the larger institutions and the larger trusts are just buying everything for ridiculous prices. You said you bought this property for how much? Thomas: We bought it for $3.85. $3,850,000. Don: Somebody's overpaying you about $600,000. If you get offers for $6 million. Thomas: Yeah, yeah, I'd have to go back and check the exact numbers to see exactly where the rents are and everything where the NOI is today. Yeah, I know that we are getting offers that are right now above valuation would be so I just think it's because of the popularity of the Jacksonville market. Yeah, I mean, I when we're looking at these assets, we're looking at cap rates at 6.5% to 7%. Now the cap rates down there like 5% like 5.5%. Don: Oh it's 5%, that's why Yeah, that's why that makes sense. So, if you increase the NOI by $72,000, right, that's another $240,000. Yeah, I mean, that's crazy. But you know what, I think what you did right was the fact that you picked the right market at the right time. Thomas: Exactly. Don: That was the home run for you. Because when I heard about Jacksonville, and how much is booming that was already 2018, late 2018. And you picked it up in 2017. And so that's why you were able to strike such a good deal because it's just exploding over there. Thomas: Yeah. And you know, it's interesting. One of the reasons why Jacksonville is also our focus is some of our partners had investments in Jacksonville already from 2013. So, they were riding the market up since back then. So, they got in even earlier. And some people were saying that we at that point in 2017, had missed a big run-up, but that's not the case. It says continue to move up. Don: Nice. So as a general partner, how much money do you think you're going to be making on that deal? So just for somebody who's trying to get into that field, being a limited partner or a general partner, I want our listeners to understand how much money you could be made from just one deal. What're your estimates? Thomas: On the front end of the acquisition fee, we had a 1% acquisition fee. So, the acquisition fee came out to be $30,500 roughly, which wasn't all that much. But in this industry, I've always been told that the acquisition fee keeps the lights on, it's your fee for putting a deal together. But really where you make the most money is absolute pays the bills. And then on the back end is really where you make the most money and were projected, the deal is 80-20. So, we have 20%, the general partners of 20% of the profits on the back end. Don: So, investors must be very, very happy. Thomas: Oh, yeah, no, they are. So we had to use crowdfunding we use the crowdfunding site called Realty Shares. And they raised about 90% of the equity for the property. So, their investors are getting should be very happy with what they're getting from this property and at the act and we'll sell our management chunk is going to be anywhere from $350,000 to a little bit over $400,000 just estimating how much will be making as a general partnership team on the back end. Don: So how many partners are you? Thomas: Five partners. All roughly split the management side equally, so give or take there are some differences in there, but I mean, just for the sake of argument is roughly the same. So, let's just say we use a round number we make $400,000 each partner that we walk around with roughly $80,000 from one transaction. Don: Yeah. And that's at 20% split, which is below what a general partner is typically making. So right now, I know that it used to be 70-30. Those are the general split. So, 30% for the GP and then 70% for the LPs. And it's even going to the place where it's going to be 65-35 and 60-40 is what I'm hearing right now because the market is a little bit tighter. So, the sponsors of the deals, they want to make sure that they're making money because it's difficult. It's not easy to find a deal. It's not easy to find money. So yeah, they want to get paid. And so, I think if you were to do the same deal on a 65-35% you'd be making around 150,000. Right? Thomas: Sounds about right. Don: Nice. So that's great. I'm very happy for you that you struck your first deal. You were able to make a decent amount of money like that. Also, you had partners. Sometimes in a GP, you'd have two partners, three partners but five is a lot, I'll say. Thomas: Yeah, you know, the reason why we have along with this one, this is a big learning experience. So, one of the partners does this full time that has a very good business out of it. And the rest of the other four partners, myself included, were mostly in it for the learning experience. So that's why we were happy taking the lower amount on the general partnership side, just to make sure we saw the entire experience from A to Z, and that we'd be better equipped to do ones ourselves going forward with likely a smaller partnership, because like you said, when you're splitting that amount of money between five people, it's still a decent chunk of change, but it's nowhere near the amount of money you could be making two $300 off of one transaction. Yeah, a group with two people doing a deal. Don: Yeah, it gets two people doing that kind of deal and today's market on a 35% 65% split, I'd say that they'd be making about $300,000 each.  Thomas: That's significant. One of the things my mentor always says just do one of these deals a year, you're going to set yourself up nicely. Don: Good. Yeah, yeah, that's very nice. What are your plans for the future as far as your CPA in a Real Estate company, are you going to keep doing syndications or you're going to just keep your job and I know you're 28 years old, which is very young, so you got a whole lot of time. Thomas: That's a great question. After I did that deal, I was pretty much planning to go right back into syndication and do another one. But I decided it makes more sense for me to focus on as a CPA, I work directly with real estate investors. So, keeps me very in tune with what's going on, give me a chance to rebuild my savings basically, to invest in more syndications. And at this point, once we liquidate this building, once this building goes to market, it's closed down, I'm going to take whatever money I get from it, essentially, and start looking for another syndication. I'll probably do something smaller with one or two partners or I'm even open to doing JV with no investors if we find the right deal. So that's pretty much the future and be focused on that in 2020 & 2021. Don: Nice. So yeah, if you want to JV you're going to need to have some connections. So, what if people want to connect with you and get to know you, what would be the best way to do that? Thomas: The best way to get in touch with me would be to shoot me an email. You could reach me at ThomasCastelli@NewBabyloncapital.com -that's for the real estate side of things. If you're interested in connecting talking about the services of a CPA or real estate accounting and tax services, you can reach me by checking out the ‘Real Estate CPA’ podcast actually has a great podcast for real estate investors and then also can reach me at Thomas.Castelli@WholeCPALLC.com again, it's Thomas.Castelli@WholeCPALLC.com. Don: Nice. Okay, Tom. So, thank you very much for coming to the show today. I hope you're going to have a great day and good luck in the future. Thomas: Thanks. Lady: Thanks for listening to the Real Estate Investing Podcast with Don and Eden. Stay tuned for more episodes. Till next time!

Searching here, searching there...How do investors find rental properties that align with their financial goals? Is there a way to provide them access to these assets? Today, I am talking with Dan Ganguly, president of HomeUnion and founder of INVESTimate. As an entrepreneur, he’s always looking for a new solution to an existing problem. So, if a realtor needs a feed for homeowners, a property manager needs a feed of investment properties to present to potential buyers. You’ll Learn... [04:05] Questions for Investors: What’s your budget? Risk preference? Age and stage in life? Do you need cash? [05:13] Two Brands Connected: HomeUnion’s where investors search for properties; INVESTimate’s where property managers and realtors work with investors. [06:30] Business Model Change: Internet-only to tool that increases engagement between property managers dealing with investors. [07:43] Where to Start: Build a relationship sooner than later in the sales cycle process. [09:00] Help property managers build better Websites as a front door for people. [13:53] What does the local property manager do? Signs up with service, pays monthly fee, and puts on private/white labels. [14:58] Realtor gets MLS feed for home buying; property manager gets MLS feed with intelligent filters and big data for investment buying. [15:15] Everybody knows their #1 prospect is their existing customer because they already know, like, and trust you. [16:12] Other Options: MLS, Zillow, and similar Websites focus on finding stuff (schools, pools, etc.) that get people into a neighborhood. [16:35] INVESTimate: Offers big data platform with 110 million properties, 20 years of transactions, 200,000 neighborhoods, and more than 9 million rentals. [19:30] Is everything 100% accurate? No. Property is highly individual. [20:15] INVESTimate: Investors get best of both worlds when making a transaction. [21:45] Different risk-reward gradients/categories help people make the right decision. [26:45] Feedback from Property Managers: How has this changed their business? [32:05] Bottom Line: Business owners make money, get a door, and much more. Tweetables It’s a fish net to grab fish, and then we nurture the fish until they buy. Your #1 prospect is an existing customer because they already know, like, and trust you. We can’t force them to buy, but give them a reason and product to buy. Bottom Line: Business owners make money and get a door. Resources HomeUnion INVESTimate MLS Zillow Realtor.com DoorGrowClub Facebook Group DoorGrowLive Transcript Jason: Welcome, DoorGrow hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you’re crazy for doing it, you think they’re crazy for not, because you realize that property management is the ultimate high-trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show. And today, I have a very special guest. I’m hanging out here with Don Ganguly. Don is the CEO of Homeunion, is that correct? Don: Yeah. I’m the president of Homeunion and founder of Investimate. Jason: President and the founder of Investimate. Don, I want to welcome you to being here on the Door Grow Show. Don: I’m glad to be here. Jason: Don, you have an interesting background. You have a lot of experience in entrepreneurism, I think people would be really interested here some tidbits from you today, and some insights. I’m excited to get it into your business and service. But let’s start with you. Can you give us a little background on you and just some of your experience and what lead you to where you are now in business? Don: Sure. I’m sort of a vocationally reformed engineer. This is my third company. The last one we did was actually an outsourcing service company for mortgage banks and services. We were actually helping originators doing the big boom and people [...] were getting a loan. When everything fell apart we were helping the services service those loans and try to keep people in their houses. We touched I think over $75 billion of service. That company ended up getting sold to Oracle, to a banking software company. But it was the progenitor to this whole Homeunion and Investimate thing that we founded because we were able to see all these properties all over the country that had some pretty decent prices and a good rental price ratio. When we looked at that, we figured there are all these homes that made good investments and people that live in the coast don’t get access to these assets. We looked at that and said, “Is there a way that we could provide access to rental properties the way people buy stocks and bonds?” If you look at the way rental properties are bought, we base them a little how homes are bought. So people go to a listing site, they get a list of properties, they do some back and beyond below calculations, figure out the rent, go to the neighborhood, or pick up the neighborhood, call a realtor, and then bounce around and try to find the right property that they like. If you’re look at an analog to that and say, “Hey, if you go to a wealth advisor and say, ‘I’ve got this much money to invest, what should I buy?’” The wealth advisors are going to say, “Okay. I got some stocks, here’s the idea, and here’s the score, here’s Apple, here’s Facebook, which one of these do you think you want in your portfolio and let’s go through a list.” The question they ask you often is, “Hey, what’s your budget? What’s your risk preference? What’s your age and state in life? Do you need cash?” And then they put a portfolio together that’s got a little bit of this and a little bit of that and it all enlines to your financial goal. We took that playbook and we brought it to this Investimate product that we built which says, “We can ask investors the same type of questions about their real estate investments and then let the system go out and find the right assets and build them a portfolio or a set of assets that need those financial criteria.” The non trivial exercise because to do that, we actually had to calibrate everything from a risk and reward stand point. Right? How risky is this house? And what’s in that house type of thing. That’s how we came to this. As an entrepreneur, you’re always looking for a new solution to an existing problem. Often, the existing stakeholders don’t have the answers. You got to think of something a little bit different. That’s how we got into this business. Jason: Help us understand these two brands, how they’re connected first and what they are. Just the overview. Don: No, I’m happy to. Homeunion used to be a retail platform where investors can come in and basically search for properties and invest. The first incarnation of Homeunion, we were actually serving as overall asset managers for these properties and then farming out the actual work to property managers on the ground. And then last year we made the call, it was becoming too big a business for us. We’ve done over 200 other transactions and we didn’t want to be in property management. We ended up giving those properties out to the property managers that were managing it, productized it and provided it as a platform for property managers and realtors that are working with investors. The product itself has been tested for four and a half years, it’d done $200 million of transaction within 5% of forecast and a good use by investors to buy properties all around the country, highly exercised. What we just see is the business model from being an internet only model that brought consumers to my front door to a product that would then serve people like property managers who are actually dealing with investors day to day, giving them a tool to engage with their investors. That’s the connection between the two. The Homeunion brand is an internal user of the investment product. So any leads that come in there are fed to our property management partners in various locations because we are not in the business. When we engage with that investor and they want to buy a property, then that property is managed by one of our partners. Both of them actually feed into the advantage of the property management tool. Jason: Let’s take our typical listeners. We’ve got a property management business owner, they got a small business, maybe they’ve got 100-200 doors on their management. They’re wanting to grow their business, they’re trying to deal with team changes, and staffing, and operations, and trying to systemize things for the first time ever. And then we have these solutions available that they can use to support in bringing investors. Where would they start with your services? Don: Yes. If I look at businesses such as yours and others, you’re helping them grow doors. How do you grow doors? You grow doors by finding more investors and having investors buying more doors, right? The property manager either at the bottom of the food chain which is that when the investors already bought that property, then they put their hand up and compete with four other property managers and say, “I’m the best guy in this market and you should come and put your property with me.” Or they can be more proactive and go up the food channel and up that funnel and have a conversation with the investor when the investor starts looking for that property. Be early in the solutions process. What happened to them is if you’re at that point in the fulcrum then you are actually able to participate in the property management process more naturally rather than doing it after the fact. Jason: If you’re part of this process earlier in the sales cycle then they’re going to have this relationship with you that’s already set and you’re by default mostly going to get the management contract. Don: You got it. Because you've been partnering with them ahead of time. At the same token, let me just take the other side of the coin there, the good work that you’re doing and others are doing is that saying, “Okay, listen, you need to market your business in some fashion. You need to get traffic on your website. You need to put content up.” There are various stakeholders that are helping property managers build better websites, you have a business in that, and a better front door for people to come in. When those people come in, then what do you have for them? That’s where we come in. I’ll give you a simple analog. If you’re a realtor, what do you need? You need an idea speed to your local MLS. Otherwise you can’t show any property. When a company comes in and says, “Hey, I want to buy from you.” If you have a website that doesn’t show any properties or you don’t have an ability to send that buyer of homes to buy then you can’t participate. It’s a minimum stake for a realtor. Jason: [...] tool. Don: If I am an “investor realtor” and that sort of property management, if I’m catering to investors then I need an ability to serve up investment properties or properties that are more likely to be good investment. Or put another way, I need to give you an investment lens through which to look at these properties so that you can then engage in buying a rental property through my system. If I don’t have that then I’m back to the bottom of the food chain because I’m searching here, I’m searching there, I’m doing all of these. If a realtor needs a feed for homeowners, I think a property manager needs a feed of investment properties that it can present to its potential buyer, if the property manager wants to jump up the food chain. That’s what Investimate provides. If you’re a property manager in a particular market and we’re in 15 or 16 markets around the country, we have real time connections to the local lifting services, what we would do is we would white label Investimate for your website so it would say, “ABC Property Manager” with your logo and your color on the front. When you use Door Grow or another service to drive investors to your website, then they come in and they have a way to search for rental properties in your patch or around the country, if you allow them to. Because you still get a referral fee for that and engage with you in that fashion. That’s one part of it. The second part is if you look at the realtors and I go back to the home buying because everyone gets that business. If you go to the home buying end of the business, what happens? The realtors are all over that bill when it reels its head. When a home buyer says I want to buy, you have a short window in which to grab that person and about 20 realtors are all over it from leads, from various places. The name of the game and how quickly can I get that person. On the investment side, nobody wakes up and says, “I just have to buy rental property in the next 24 hours. Otherwise I’m going to have a hissy fit of some kind.” That doesn’t quite work that way. When people make that decision saying, “Hey, maybe I should be in real estate, I know a lot of wealth is built that way. I should be out of the stock market, or I’ve already bought two properties, I think it’s time for me to buy another one. I got some excess cash.” What they need is a steady dive of stuff that fits their preferences and in nurturing. It’s very different from the home buying. The investment platform actually comes with a set of campaign management and a set of investor support services. When you’re under Investimate, and you’re a customer of ABC Property Management. So you come in and say I’m Jason. You register you start using the site, we call you and say, “Jason, we’re investment support with ABC Property Management, we’re here to help you use the system and help you understand what’s in here.” You get acclimatized with the system, you understand what it is, we get an idea of your preferences and the system also captures your preferences. Now, you’ve told me you like sci-fi movies or romcom and I now keep sending you scifi and romcom till one day you watch that movie, because that’s how investors work. They drip feed them until they put their hand up and say, “That’s probably interesting.” Now I got to buy box. Once I get that buy box, then I call ABC Property Manager and say, “Hey, I’ve got Jason who’s got X amount to invest. He’s looking in Austin. This is sort of his buy box, this is the sort of the property he’s looking for. Please help him out and do the local due diligence.” We serve that lead up at that point. It’s the website, it’s a set of intelligence filter that connects to the local listing service, and it’s a whole analytics lens that allows them to search like they would search with stocks and bonds. I can get more into the data side of it, it’s much deeper than that. To answer your question what does that local property manager do? He signs up with the service, it’s a small monthly fee, and he private labels it, white labels it on his website, and he’s off to the races. The way we make money, really, most of it is from when there’s a successful transaction. What we ask for them is to load whatever lead customers they have into that proprietary database that always stays there on and then these people as they come in, it’s a fishnet to grab fish, and then we nurture those fish ‘til they buy. It’s a long term way to keep their brand in front of customers and leads and others. I’ll tell you something that a lot of the property managers are working with, not only loading customers, they’ll think, “Hey, here is a whole bunch of people we touched in the last five years. We didn’t do business with them but we touched them in some fashion. I want those registered to me.” And a lot of them wake up and are prospect of buying stuff. All because once you see the product then they’ll say, “Yeah. I’m interested and I will use this to buy something.” That’s what we bring to the tables. What a realtor gets from a strict MLS feed for home buying, a property manager gets an MLS feed with a bunch of intelligent filters and big data for investment buying. That’s what we’re doing. Jason: I love the idea. Everybody listening knows or should know that their number one prospect is your existing customer. They already know you, trust you, and like you. You’re already probably managing a property for them. They’re one of the most likely to do business with you again, and if you have opportunities, a property’s available and they’re already investors, it would be a very easier thing to get them into an additional property. They’re going to have a high level of trust with you. If you have this easy pull of properties that they could see and view and they’re getting dripped, and they’re getting notified, and they’re in your funnel and system here, then eventually something is going to grab them. They’re going to go, “Hey, this looks like a deal I could sink my teeth into. I’m going to go for this.” For the skeptics that are listening, you’ve got the property managers that also do real estate and they’ve already got the MLS and they’re like, “Wow, why don’t I just put the MLS on.” And they can just look for property, any property. Let’s really clarify the difference between just having the MLS and having the Investimate tool. Don: Great question. The MLS or Zillow or Realtor.com or any of these sites, are geared towards you looking for school pools, stuff that gets you into a neighborhood to live in. What we did is we created a big data platform where we have 110 million properties, we have the entire US Housing Stock, we have 20 years of transactions. We have 200,000 neighborhoods, we have an initiative here with University of California where we collect over 9 million rentals all over the internet so we could put that into our model, and we do a couple of different things with it. We process over $200 billion of properties to bill them out. What we do with it is first thing we’ve done is we calibrated neighborhoods from A to D as a neighborhood investment grading. Think of this as a bond grading so the D is not, we’re not in D neighborhood. C is not necessarily saying it’s a bad neighborhood, it just says it’s a neighborhood that’s a little bit more volatile, you get in with the lower quantum of money, it’s a high yield property, that neighborhood property isn’t going to give you as much growth. But you can pull me a portfolio depending on what else you’re trying to buy. An E neighborhood has a higher quantum of investment. It’s a more expensive neighborhood, view is not going to be that great, and you are going to see a lot more growth. The question is should I buy Apple stock at $800 and buy five units of Apple stocks or should I buy something that’s $50 and buy hundred units of it? Or should I do a little bit of both? We’ve given them a risk reward calibration so they can look at both of these things. Then we forecast, we have a model that estimates the rent. We have a rent valuation model, we have a cascade waterfall where we compare to [...] and a bunch of other things to say here’s a range of the rent. We then estimate the price and see if it’s above or below what we model the price to be at. Based on that we come up with a big range on their property. Then, we provide a con of rich neighborhood information on the renter. If you go to an investment, you’ll see how much money do the renters make, what’s the average income, how come they can afford the rent, where are the rents on this neighborhood, am I an outlier rent? Once my renter goes, “I’ll never be able to fulfill it because I’m the only guy in that neighborhood where my renter’s paying higher among everybody.” There’s a ton of good strategic data and there’s price trends and rent trends on that neighborhood. When investors go in, it’s a shame when you look at the stock. What’s my risk in this stock? What’s the previous growth has been? What’s my dividend play? What had done historically? What is it expected to do? What other research can I get around it? It’s that one place where all that information is encapsulated. The potential rental property buyers are doing what [...]. They’re going to go to Zillow, find new property, we’re doing a back of the napkin, going to a rental meter, finding the rent and then coming back, going to a realtor, looking at the neighborhood, they don’t like it, go to another one. We put all of that into one piece on the back of big data. Like in many model, is everything 100% accurate? No. Property is highly individual. You and I may be living next door to each other and you’ve done a lot of great things in your property. You may be a little bit different than mine. How do we do that? The property manager solved that last mile problems. The model, the data helps them create a buy box, instead of guard rails, instead of neighborhood, it’s a type of property. And then the property manager goes and then says, “Yes, the data is right on this one. The renter’s exactly what we said.” or “You know what, this property is gutted on the inside and it’s not going to work.” It’s a combination of that site, of the platform, and the local property manager at the point of purchase. Investimate, you get the best of both in terms of making a transaction. Now, why is the property manager the best partner? Because he or she has to manage that property afterwards. They’re not going to go in and say yeah, the rent’s going to be $2,000, no problem. The moment it closes, then they come back and say the rent’s $1,500, that’s the beginning of the end as far as their whole credibility goes. All that big data is underlying the investment lens of [...], just going in that a little bit more. When we look at the MLS, we pull the listing services every 30 minutes. It’s real time. We apply 50 to 60 different filters to pull stuff in. We exclude stuff. If they’re common, if we don’t like them, we exclude those things, exclude D neighborhood. There’s a set of filters that go in, then we [...] the rich data, then there’s a que where a set of eyeballs do a quality check. Then, it makes it into the platform. It’s a highly curated investment focused platform that’s available for the property manager to showcase to his or her client. Jason: Alright, that was a great explanation. Basically, what I’m hearing is this is like MLS. It includes all the MLS stuff but it’s better. It includes more tools, more resources geared specifically towards the investor, and they’re able to make decisions. This is maybe a random question but I’m really curious about these different gradients or different categorizations that you have of risk reward and how are people making this decision whether they want As or Ds? Don: It really depends on the risk profile, at the end of the day. If you go for a C property, when do you buy a Triple C bond? A Triple C bond is a high yield bond for sure, because it’s not an A bond. But when you buy Triple C bond, you also know that there could be defaults, there could be things that wreck your returns. You’re getting that high yield to compensate for the risk. When you buy a Triple A bond, it’s more deterministic. In a higher end neighborhood, you’ve got rents that are not quite as high to the ratio of the property price, but you’ve got renters that tend to be more stable, that have been there longer period of time, and their homes tend to appreciate. But it requires more money to get in. It all depends in the investor’s personal preferences, are they looking for money now, are they looking more to build a portfolio and after 15 years when it’s all paid off that’s [...]. Are they looking for growth where they wanna spin around and flip it in five years? That’s a whole different discussion, they you go after more growth properties. You need at least five years for real estate before you cover all your transaction costs, or three plus years. It just totally depends on the investment and their requirements. They might buy some properties for cash flow, they might buy some for growth, and they might buy some that’s in between. We hear investors say hey, I need cash flow, that’s my number one determinant. Other investors might say I don’t really need any money right now, but I wanna build up a portfolio that will grow and be safe. Others will say I need to cover my mortgage, and maybe make a little bit of money, then the balance in the middle, but I really need properties that are going to appreciate. I don’t really care about cash flow, but I don’t want to be out of pocket. Those decisions then drive the type of properties, neighborhoods, locations, cities they end up with. Jason: In your platform, curious, what do you see being the most popular for the investors that are typically using this with property managers in that categorization? Don: Where people buy, 40% is what I call the B neighborhoods, 40% are on the C neighborhoods which are the high yield neighborhoods, and 20% are the As. As are obviously more expensive, and your buy will shrink when you get to the A neighborhood. That’s roughly what I see. Jason: Got it. This would obviously work for non-property managers that are using it. Maybe their intention is just to use and look at this for their own stuff, or to look for flips, or turnkeys, or different types of deals than just some sort of long term management situation. Don: It would work for realtors, any realtors that’s dealing with investors, they are also using the platform. We’ve got a number of realtors that signed up. The realtor piece is a little bit different. I’d sell you a home and you’re not going to buy another home from me for the next 7 to 10 years typically, I’m not going to come every year and sell you a home. Once I sell you a home, if I’m smart, I know you could be a potential investor. I say hey, if you’re looking for rental properties now, here’s a site that gives you local and national rental properties, and I’ll help you out with it. For the realtor, it becomes a cross sell. For a property manager, it’s an upsell, it’s one more property or a new guy coming in. But for the realtor it’s a cross sell to a customer or lead that already spent the money getting that customer or the lead. Now you say what else can I get out of their wallet? And this product does that. In terms of flippers, we’re not really geared towards flippers. We’re not showing the big distressed assets out there that you can find and rehab. The big thing for the flippers are rehab numbers. How much do I have to put into this property to actually make money on it? I’m buying it $40,000 on the market, I put $20,000 in it so I’m already in $20,000. I can make another $20,000 because I can sell it at market. That requires on the ground running around and understanding what those rehab cost. They can use the system to identify stuff, I’m sure. But at the end of the day, I think these are people driving around neighborhoods or trying to find distressed assets that need that. There’s not an inordinate focus and people on that on that platform, just because our partners are not really chasing those types of deals. We need a partner on the ground for this, solving the last model. Any investor can come in and use it for sure. Jason: Property managers that are already working with you and using your system in doing this, what sort of changes or feedback or results have you been hearing from them? What are they noticing and how has this changed their business? Don: One thing a lot of them are noticing is that a lot of their customers or their leads are waking up and they are engaged in looking at properties. There’s two, three things they’re saying. One is they’re making offers and new properties, in some cases they’re selling properties to the system which helps the property manager get a listing. They get that listing, and if the investor is selling the property, they can get to keep the property management because it’s a rental property that they’re selling it as and they’re not kicking out the renter going to a homeowner. I think a lot of people like that because there’s no erosion or churn of their portfolio from that perspective. Jason: What’s happening is even though properties are selling, which would normally turned into a property management business, they’re able to retain the management contracts and keep the tenants in place. Don: That’s right. Jason: Love it. Don: For those investors that are willing to do that, there’s some that will want to sell in the open market for whatever reason. I think if we can increase the velocity of this, and as more and more people get connected to the investment network when you push something into that, it goes across, gets eyeballs everywhere. It may move a lot faster because the investment on the other end will want a rental property that’s already rented with a track record of history from that property manager, because the property manager will be able to give us what’s been happening in the last two or three years in performance on this property. That becomes a lot more attractive than to buy a new one and then do all this stuff to it. Jason: So this is a proven property, they’re able to see that it’s rent rolled effectively, and this extends the reach then of this ability far beyond what the local MLS would provide because investors would be out of state and beyond are able to see this opportunity. Don: And realtors are not that interested in selling rental properties to investors. The MLS and stuff like that, they get the least amount of attention from realtors. Putting it on this platform puts many more eyeballs. We get 120,000 users on the platform today. Remember, we’ve been at this for four years, four and a half years. As the assigning of these property managers, they’re going into this. The [...] account is increasing dramatically month over month. Out of that, not everyone’s a buyer today but big enough sample size there that people would look at it and say this is something I want to buy. And the more product you put in there, the better you are. Jason: Say they sign up, how easy is this to get connected into the website? Is it just some javascript code snippet that would be added to a page, or just some HTML like an iframe… Don: Good question. It’s not iframe, it’s a hyperlink linked with their subdomain that gets added to their website and we can put it right over… For example the DMI franchise is rolling this out to a lot of their franchisees. We spoke to their website company and made sure that the logos and the colors and all that was consistent in how they wanted the brand to look for all DMI franchises and put it out there so they have the same experience, it’s stuff like that. It’s not a massive task, it’s a quick task of getting it up and running. They don’t even need someone familiar with website development on their end to put it up. Jason: Fantastic. I would imagine besides that, they’re able to feed in maybe their list of clientele, or how do they get clients using or into this system? Don: They send a file of their clients and their leads, and we separate the two. That gets loaded and tagged to them in the CRM for good. Anytime they do anything, they’re forever tagged to them. We look at the clients one way, we look at the leads one way, and they get a mail from Jason at ABC Property Management saying hey, we just implemented this new tool, come check it out, here’s all that it’s got. A series of mails inviting them to come check out the tool, what’s in it, and then we engage with them as investor support for Jason’s property management company, help them utilize the tool. That’s all branded to Jason, it’s not branded to anything else, it’s all branded to Jason. The backend calls are made to investment support to help them use the system, that’s all Jason. Then, they start receiving some weekly properties that are hot in their particular market. If they put their hand up, we answer questions and take [...]. Jason: Great. The bottom line, everybody listening, that business owners are all thinking is this makes me money, right? They’re getting the real estate deals, they’re getting commissions on the real estate deals, anything else that I’m missing? Don: They get a door... Jason: And they get property management contracts. Don: Yup, and let’s say for example we have property managers in California. A California property manager’s customer wants to buy in Austin, so the Austin person then can get a referral from the California buyer because the California buyer is not finding something in the price range they want in California. One thing they always ask, our customers, is do you want to show only your market or do you want to show all markets? There’s pros and cons to it. If you only show your market, then that investor can only buy in your market and that’s all they get and you always get the door. The con is if they ever decide to buy somewhere else, they’re not going to buy through you because you didn’t show that. Or, you show all markets and then if they do decide to buy somewhere else, then you get a referral fee from that. By the same token, you get inbound traffic from someone else. That’s the idea of that. But we give people that option, because we can show one, or two, or all. Most people tend to keep it fully open, but when you have people that say I don’t want to show anything other than my city. We’re okay with that as well, it’s the business owner’s choice. Jason: So this has other potential benefits of really setting up a referral network, getting some deals. Don: Yup. We’ve had situations where property managers just got a door, because somebody is buying a property. Then the person says they need a property manager, so then we get the door. Sometimes, they get the whole thing. If an investor wants to buy in their market, then they become the buyer’s agent, obviously they give up a referral fee back into the system so others can get paid. They get the door and that commission. At the same token then, they refer someone, they get a fee from that person from the door and the commission; it works both ways. Jason: Alright. Don, this sounds fantastic. Is there any other common questions or things that you think people listening might be curious about related to this? And then how can they find out more? Don: I think one thing we had expectations on, this is a long term relationship with your investors. Let’s say you’ve got 400 doors and 150 investors, the investors get exposed to it. It’s not that okay. In 60 days, they all come in and say great, now that you’ve given me this, here are 10 properties that I’m going to buy. They will buy over time, but what’s important is they are now much more connected with your brand and you start seeing deals happening with these investors when they decide to buy. We can’t force them to buy, but we give them a reason to buy, and we give them a product to buy. That’s the one thing. The second thing is we do need the property management person trained on the system. We have a training program and all of that. When we transfer that investor in the right time, they need to be able to use the system to find the next property and the next one if this one doesn’t work out. Because ultimately, they’re the one fulfilling that. A property management company sometimes has not been in the sales process, they’ve always been at the other end of the food chain. They’ve got to think that if they want to climb the food chain, they do need some competence and strive to be able to go and get that property and close the property with the investor. Although we’re taking a lot of the analytical work in a way by systems giving them all of that. They get a very clear buy box, but they still need to fulfill that buy box. Jason: Let’s wrap this up, how would people find out more about your Investimate product, and how would they demo this and learn more about the business, and how do they get started? Don: They would go to investimateroi.com, in there is a little video that talks about the product, an explanation of what it does for property managers and realtors, and an ability to set up an appointment for a demo. The best thing to do is always look at a demo. If they go there and they schedule a time, just like we’re doing here, we’ll get them on an online webinar and we’ll take them through the product and explain what it does, and see if it’s a fit for the business. It’s simple enough, yeah. Jason: Fantastic. Don, this has been really interesting, really insightful. I think a lot of people’s wills returning as they listen to this. I think that you’ll probably be getting some demos of people checking it out. Don: Great, thank you. Jason: Thanks for being on the DoorGrow show. Don: Glad to be here. Jason: You can check that out at investimateroi.com. I appreciate Don being on the show. If you are a property management entrepreneur that wants to add doors and make a difference, then make sure you check us out at doorgrow.com. If you want to join the most awesome community of property management entrepreneurs on the planet, we are hanging out inside the DoorGrow Club. It is a free Facebook group, you can go to doorgrowclub.com, make sure you join the group. We will see you next time on the DoorGrow Show. Until then, to our mutual growth. Bye, everyone.  

Kristen: Alright, Hello and welcome to Cerius Business Today. This is Kristen McAlister and I’m joined today with interim executive Don Labowsky. Don, thank you for joining us today. How are you? Don: I’m doing very well. And yourself? Kristen: Fantastic. What are some things you’ve found and were able to leverage the internal resources in order to make that a smooth transition? I understand that you met all of the timeline goals, all the budget goals and still got this entire transaction done. How is the impact with the internal team and being able to leverage that with your skill set? Because it’s never just one person. Don: No, no it’s never just one person, and certainly I was just part of a team and I only had the supply chain piece; there were many other pieces to this successful transition. But I think that the big thing is communication; being open and honest with people and setting expectations and setting timelines, and saying this is what needs to be done in this amount of time and let people go do it. And I was very lucky that the team rose to the occasion and did all those things when they needed to be done in the correct order and were able to achieve all the goals that were given to us. Kristen: Fantastic. What are the attributes of the company? You were really with a great team. What were some of the attributes that you think helped make it so successful? Don: Well they had a very, very dynamic Chief Operating Officer/ CFO, the person that was in that role was incredibly engaged, incredibly detail-oriented; very, very positive. And they also had a CEO that they had brought in about a year ago who came up with this whole fibbit, had the experience, had been working with several different companies in both markets. And had the courage and strength to really suggest this and get board approval and to move forward with it. So they had a very, very strong visionary and the number two person was a very, very strong operator, and that’s what I think was key to that transition being so successful. Kristen: Fantastic. I know it went about as well as any transition possibly could go. Looking at some of the others you mentioned you stepped into, what were some of the more challenging ones then, and what you did to turn them around? Don: One was I was asked to take over as President of a company. It was about a 12 million dollar company, had been bought by a larger company and after the sale they realized that the books were cooked basically, and the owners of the company that was purchased were all fired. And there was roughly 300 customers that had to be informed that they had been overbilled for years, that had been informed that we would make it right and that we would want them to continue their business. So you had a very big challenge going after the customers and saying yes I realized I’m the new guy, I realize the company did not bill you properly, we’re going to make it right, but we’re also going to ask you to keep with us and continue to buy from us, services in this case. And you also had to deal with staff that felt like criminals because all were unwittingly part of this. They did not know what was going on. It was all kind of done by a very small group of people who modified information after it had been sent in by the individuals. So they all kinda felt like they were not worthy and they were part of the conspiracy as one might say. But ultimately what happened is we lost no customers through this process, and the staff was brought around and they eventually figured out that hey we’re not the source of the problem and they stayed on board. We were able to turn it around. That company was then again sold to another company in less than a year. Kristen: Don I have to say when things are going wrong I want you on my side. Don: [laughs] Well, I guess I like the adrenaline rush of walking into a firefight, you never know what you’re going to find. Krsiten: We hear that a lot. We’re looking at CEO’s who are possibly looking to transform their company and make some type of a pipette or they’re in a very challenging situation that needs to be turned around. What are your top 3 pieces of advice for that CEO? Don: Well first of all I think engage everybody in the solution. No one person even at the top knows what’s going on in all aspects of the business. So you’ve got to engage everybody and you’ve got to focus on solving the problems, not reacting to symptoms. Too many people just focus on the symptoms and really don’t want to find out what the underlined reasons are why certain things are happening. And I think the next point would be to really quantify everything, you’ve got to get away from feelings and gut urges and whatnot and break down the numbers and figure out what can you measure. And if you can’t measure something, figure out then how to measure it especially if it’s important to the business. And if you can’t measure it, then leave it out for a little while, at least for the first round trying to figure out what to do. And the most important thing though is to really take that zero-based budgeting approach. Forget about what you have been doing. What you have been doing got you into trouble somehow. We don’t know how, but somehow something you’re doing got you into trouble. So what would we do if we did business from scratch? How do we start over? And what would we be considered to be important, and what would we not consider to be important, and really look at those critically and leave behind any of those things that you know “we’ve always done it this way” or sometimes people call them sacred cows or protected areas or something. You really can’t have any. When you walk into an urgent situation, you cannot have anybody who’s off-limits or beyond the scope of what the turnaround project is. Kristen: Don, thank you. It’s difficult when you’re CEO or business owner, you’ve been in your company for so long, you really become myopic. So that outside perspective you offer is tremendous. Thank you so much for sharing your expertise, and your experiences, and feel free to join us in the next couple of episodes of Cerius Today, and again Don thank you for all that you’ve shared. Don: You’re welcome. Thank you for the time.

Kristen: Alright, Hello and welcome to Cerius Business Today. This is Kristen McAlister and I’m joined today with interim executive Don Labowsky. Don, thank you for joining us today. How are you? Don: I’m doing very well. And yourself? Kristen: Fantastic. We’re going to start off with some easy questions here. Probably one of the questions we get the most from CEO’s, they have a tough time imagining that these couple of executives are available whenever they are needed. Who are they? How did they become an interim executive? Can you give us a little background on you and how you ended up doing interim executive work? Don: Ah sure, and it’s kind of a funny story. I was actually helping, trying to help somebody else get a job with a particular company. I took the CFO of a local manufacturing company out to a job to see if he had a spot open for my friend who was a marketing person and he said he did not. But what they had was an opening for an interim product manager, they had their product manager leave on a very important project six months before it was due to be introduced and it needed to have the engineering finished, prototyping done, FDA approval done, and get it set up at the trade show all within six months. All when their project manager left to go to a competitive and they were really stuck. And so I said that well I can do that, and I went in took charge, and got hired by them obviously took charge, and got the engineering done, got the prototyping done, got the FDA approval introduced to that trade show in New Orleans and that product went on to be a core product for them for 14 years. Kristen: Well that’s jumping into the deep end. Don: Yup [laughs]. Kristen: Do you typically get brought in for similar types of challenges? Let’s see the range that you’ve seen in interim executives? Don: The challenges are all over, and I think it’s again these are situations where the company is in some type of a transition. In that they have a high urgency need, they have limited time, sometimes limited cash, sometimes there’s legal issues involved, sometimes somebody left who was very important to the process and I think that they have a very high urgency need but it’s only a temporary need. And they expect to be able to, once they get through this transition period they expect to be OK. That’s where I think interim executive shine. Kristen: One of the questions we get is how’s an interim executive going to be accepted by the interim team. How does that transition both coming in and out? Especially when there’s a very strong family-oriented culture in the [2:28] company. How do you trust them when you start there as well as when you’re leaving? Don: Well I think the staff always has a feeling that something is going on despite the fact that management may try to downplay or even sometimes hide the need for these transitions. Whether they’re in trouble or whether somebody left, or other situations. I think the staff often knows. I’ve found the staff to be very receptive to having somebody from the outside come in, and actually they’re very, very willing to talk about what they think needs to be done, which is always one of my rules is to engage people from the top to the bottom in whatever the solution is needed because everybody’s got their own idea. They’re been watching it for years, they knew that something was going to go wrong, or they knew that something needed to be done and I found them to be very receptive. Kristen: Fantastic. We tend to get the same feedback is they’re waiting and willing to bring someone in with open arms. That’s not on. When you go in, I know you’ve got a very strong engineering background, very strong project management as general manager, when companies bring you in and projects have a short timeline, there’s a high potential for error. And they’re typically off-course and off-track when you walk in. What are some of the common things that you see them not doing right and you’re able to do a course correction? Don: Oh boy. I think that there’s several things. I think that sometimes companies get stuck in a rut doing certain things certain ways, and you can ask them, “Well if you were doing things over, how would you do them differently?” They’d say, “Oh, if we were doing things differently we’d do it this way.” Well why not do it that way now and make it a course correction. So you have to come in and expect to use what I call a zero space budging approach. In this regard we’ve always done it this way. If the only reason someone can give you why someone is doing a particular action is that “we’ve always done it that way,” then you immediately know that something needs to be investigated. I think the other thing is to always look at what the impacts are. There’s a pain point somewhere and you have to be able to find the impacts where they’re feeling it. Are they feeling it in the cash flow? Are they feeling it in the sales? Are they feeling it in the overtime? Are they feeling it in high customer returns? And then to be able to separate the difference between problems and symptoms. A lot of people will come in and say, “Oh if we fix the symptom we’ll be fine,” but you may not fix the underlying problem. So I think you’ll have to be able to go in there and always be able to differentiate between the problems and the symptoms. Kristen: Great advice. We say that quite a bit. I know you recently had an assignment where the company was going through a major business pivot, completely transitioning the company. At Cerius we’re seeing that a lot. We’re seeing it in the marketplace, we’re seeing it in the number of clients. One of the challenges that we have from CEO’s is “I know a certain number of my employees are going to be on board and they’re going to get it, and another percentage are going to fight it every step of the way. Especially taking into account your recent assignment, how do you convey the messaging to the employees and to the team to have them part of that pivot? Don: We have to make sure to communicate what’s going on and why it’s going on, and how it impacts them individually. In the most recent case where a company did make a major pivot, sold off their entire revenue stream in order to allow them to go to a different market. The people who were left running that particular area were obviously going to be losing their jobs, and so you had to work with them, communicate with them, be very open and transparent, and also work with management to give them the incentives to stay. So there’s the financial incentive to stay and I think we were in our most recent engagement, we were to keep everybody on board. Nobody left early, and they stay motivated and engaged through the entire process. Kristen: That’s impressive. I’m guessing few companies can say that when they’re in that type of a transformation. What are some of the challenges you see when companies are making that kind of a pivot? Not just with the employees, but with the organization as a whole. Don: Well it’s really remaking the company. It’s trying to build the airplane or change the wings while you were in the air. You’ve got to continually generate revenue. So I was in charge of supply chain, so we continually had to produce the product and build the generators and ship the concentrate and buy all the wrong materials; all while this change is going on. So we also had to be concurrently setting up what was happening in the future. In this case they wanted a west coast contact manufacturer set up which we found and got one set up in Salt Lake City, as well as turn the rest of the equipment and the assets over to the buyer who happened to be in Atlanta. But this all had to be going on while still paying the bills. And that’s where I think where the challenge comes in. Kristen: Thank you so much for sharing your expertise, and your experiences. Feel free to join us in the next couple of episodes of Cerius Today, and again Don thank you for all that you’ve shared. Don: You’re welcome. Thank you for the time.

Don Van Winkle joins the show to discuss the primary traits that lend themselves to “good” leaders. First and foremost, Mickey and Don discuss the overarching need for a leader to prioritize the evolution of themselves and the needs of the company, always striving for greater awareness of what both they and their organization will become tomorrow—and how to start working toward that future today. Please forgive the sound quality as the interview took place in a less than ideal location.  Highlights Some CEOs may have inherent traits that lend themselves to leadership, but truly good leading stems from the ability to evolve with the needs of the business. A connected leader should strive to balance confidence and humility, knowing that there is still work to be done and also that their team has the capability to make it happen. The smart CEO exhibits a level of interest in others and personal disclosure that inspires other people in turn. People want someone who will listen and appreciate what they bring to the table and who brings that to other functional areas of the company. The elements of connected leaders are deeply related to the financial wellbeing of our businesses, rather than mutually exclusive ideas. Personal Evolution Exceeds Natural Abilities 0:27 Mickey: In Colin’s absence today, we’ve invited an executive and leader we admire, Don Van Winkle. Don, you and I have known each other for sixteen years. In the time that I’ve known you, you were a bank executive; president of a bank; chairman and CEO of a supermarket organization; CFO and COO of a retail clothing organization; director of a virtual CFO company; and in the last few years you’ve given council to a whole lot of CEOs. 1:33 Don Van Winkle: It’s fairly eclectic, but I’ve never been bored and I’ve always been able to add value. I’m curious how businesses and CEOs work, so it’s served me well. 1:44 Mickey: All of this time you’ve spent working with CEOs and being a chairman, what’s important for you about being an effective CEO? What does a good CEO look and act like? 1:56 Don: We have in our mind’s eye what a CEO “looks like,” how they dress and how they communicate. A lot of people are just born with that, but you can’t rely on it. You have to be able to evolve. I see a lot of CEOs who have the natural attributes, the presence, the smarts, the pedigree, but if they don’t keep evolving and becoming more fully who they are, they end up running into a wall. 2:25 Don: I’ve seen people who don’t necessarily come to the table with all of the natural attributes. But because of their authenticity, compassion, vision and abilities to grow and make hard decisions, they become really good CEOs. The Powerful Combination of Confidence and Humility 2:40 Mickey: This week I was at a company we have a new relationship with that is extraordinarily successful, very high growth and particularly modern, working in the data-driven, internet-rich world. I was with the CEO and he clearly sees that even though he has led this company to massive growth and been there for fourteen years, the company keeps growing into new challenges. He is interested in what is next for him and all of the people that count on him. How do they need to evolve in order to be strategic for the next era of their company? 3:29 Mickey: I’m struck by this great combination of confidence and humility. He’s still open to the idea that there must be something to be better at today that they didn’t need to be great at yesterday. 3:57 Don: Good CEOs are not just evolving, they’re conscious of the impacts of their attitudes, presence, and vision on other people and they have humility about it. The ability to admit when you are wrong in front of colleagues is powerful and way underused. 4:30 Don: If you’re wrong and everyone knows it, acknowledge it so you can move on. This is part of the personal evolution you need to go through in your stewardship of the organization. The days of the “all knowing, I’m in charge, move forward, and just listen to me” methods are way behind us for enlightened, good leaders. 4:55 Don: The conditions are different; it’s a different generation, with different needs. Openness as a Means to More Effective Work 5:58 Mickey: The rate of information exchange in our world today drives a level of dynamic, emerging, wild and unexpected change that requires communication to be open between the senior leadership and all of the other elements. The smart CEO today exhibits a level of openness and interest and personal disclosure that inspires other people to expose. 5:47 Don: If you’re trying from the wrong angle and it’s inauthentic, it will backfire. If your motives and questions come from authentic curiosity, people listen and respond. 6:23 Mickey: When the United States was at war in Vietnam, there was a politician who had to report the deaths and progress of the war almost every day. Someone told him he needed to smile more, and it looked grotesque on camera while he reported body counts with a slight smile. 7:05 Mickey: Telling someone to be more humble, open and vulnerable is too instructive. That’s why I like the combination of confidence and vulnerability. Truly effective CEOs are really clear about where they’re confident and they’re really clear where they’re uncertain and inviting people to participate. 7:40 Don: Several years back, I was the CFO and COO of a sportswear design distribution. When I got there, there was no infrastructure but there were these great visionary artists. I got to put the infrastructure in to include the IT, accounts payable, and customer service. I got to appreciate who they already were and to listen in order to tie it all together and coordinate so everything played off each other well. 8:14 Don: It was my first experience in orchestrating interaction. People want someone who will listen and appreciate what they bring to the table and that brings that to other functional areas of the company. 8:38 Mickey: As in our first episode, the distinctions between leaders, bosses and bastards are down to care and bridge, which you demonstrated in your story. You cared about the possibilities of their business and helped them create a much more effective bridge to where they wanted to go. Investing in the Evolution of Leaders 9:29 Mickey: A question I hear a lot is, “Do leaders ever really change?” Some people say, “No, people are just how they are. Don’t waste your leadership development dollars.” What do you think about investing in the evolution of leaders? 10:18 Don: If you are conscious of what you bring to the table, but you’re aware of what you can improve, you keep evolving. You’re a better spouse, parent, colleague and friend. The CEOs who think they’re “fixed” and are not consciously evolving end up becoming very flat and toxic to their organization. 10:44 Don: Leadership is inspiring the discretionary effort that separates commitment from compliance. Leaders have to be authentic and collaborative to inspire and be respected. 11:38 Mickey: You look at becoming fully ourselves as evolutionary. Is the evolution ever over? 11:43 Don: I don’t think so. If we ever get to the point where I am who I am and that’s all I am, I’m bored. We need to constantly evolve and there’s nothing you can’t refine in the development of yourself as a leader and a human being. 12:12 Mickey: The rate and quality of the evolution of enterprise never exceeds the rate and quality of the evolution of its leaders. Leaders do evolve. 13:31 Don: In terms of evolution, engineers typically are smart, problem-solvers, tenacious, but as CEOs, until they understand and appreciate ambiguity, they can be toxic CEOs. But when they can learn to appreciate that there are gray areas to people and situations and meld that into their other skill sets, they are good CEOs. People do not work like on/off binaries. The Toxic Leader (a.k.a. The Bastard) 14:25 Mickey: What are some of the attributes of a toxic leader? For us, that would probably fit in the “bastards” domain. 14:42 Don: When I was in the grocery store business, I had a senior executive who was insecure—big physical presence, articulate, loud voice, but beneath all of that he was a very insecure human being. His insecurity undermined those he was supposed to be directing. Never put insecure people—those who are not for other people and conscious of their own evolution—in charge of other people, because they have a primal need to undermine their credibility and who they are because they feel threatened. 15:31 Don: They use bullying as a way to get things done. It doesn’t work. If the leader can’t acknowledge where they’re doing well and not as well, there’s no point in engaging. 16:17 Don: I look for people who are genuinely interested in the development of other people A true leader knows they are going to do well if the people around them are thriving. 17:13 Mickey: Last time we talked about the stories we leave in our wake. How do the stories that are told about a leader when he or she is not around affect their capacity to lead? 17:41 Don: A lot of entrepreneurs are people who did not fit well in the traditional corporate world, but the skill set that got their startup running will not take them to the next level. If they’re either unwilling to bring in the right level of management or talent or change themselves, they lose trust because they’re not willing to extend themselves through other people. I work with one individual like this; he’s predictable, not evolving. A fine human being, but he wouldn’t let people in. 18:31 Mickey: This would be an example of a toxic story about that person’s leadership. The story goes something like, “Really a wonderful person, used to be really valuable and no longer relevant.” Evolving to Support Mission-Critical Results 19:06 Mickey: What do these different aspects of leadership evolution have to do with mission-critical results? 19:31 Don: People need to know and respect your basic intelligence in vision as a leader and at the same time appreciate that you acknowledge who they are and what they bring to the table. They can see through your whole perspective that you’re more collaborative, but you’re not a pushover. Good leadership is a function of being intellectually curious about who the human being is that is delivering that skill set and desiring to bring out the best in them. A leader shows how they play off another individual and they look to you as the hub between them. 21:06 Mickey: I know you did a lot of commercial lending. Did any of this come into play when you were deciding who to give money to? 21:30 Don: Banking is a lot of technical analysis; you’re looking at numbers, so it’s very objective. This side is very subjective. You have bankers who do it totally by the numbers and bankers who understand and can feel whether “this is a good guy.” But you have to integrate those two. 21:51 Don: You see such a wide variety of executives that you start to identify patterns. How they treat people and who they hire tells me volumes. Are they just flushing as much cash out of their organization and minimizing taxes, or are they truly thinking about building a balance sheet that’s more financeable and stable over time? 22:39 Don: To your question: absolutely. You have to get to know the subjective side and overlay that with the objective. 23:38 Mickey: There’s something important about that notion of: “Great leaders evolve.” I love that when you make decisions on where to risk capital, that you take into account the rigorous financial and technical analysis and the social awareness of who is going to execute all that. You have the elements of connected leaders deeply related to the financial wellbeing of our businesses. 24:34 Don: “The fixed man for fixed duties” is a threat today. It’s no longer relevant, but we still have some of that fixed man for fixed duties mentality. The people I look for now are very adaptable, curious and learning. Connected leaders know their peripheral vision—their view of the world—keeps expanding hugely by aligning with other people who have skill sets they don’t have. 25:17 Don: Great CEOs not only create an environment, but they identify and consciously develop a high level of input with the people around them. It’s very collegial and it’s gratifying, both to work with someone who is that CEO and to be that CEO. 25:35 Don: That flies in the face of a lot of information over the years about “what a leader is.” A leader is someone who is intentionally developing and bringing out the best in people, even in a “selfish” curious way, because he or she knows we’re better facing the uncertain world and making the best of it for all of us.  

Michael: Hello everyone, this is Michael Gross of OptionSellers.com, here with your monthly guest expert interview. This month’s guest expert is Don Singletary, author of the Options Exposed Playbook. Don spent 25 years as a consultant for commercial commodity hedge plans, helping him to implement option strategies to lower cost and increase their efficiency. He has also spent much of that time as an individual options trader. He is going to bring a unique perspective on that to you today. Don, welcome to OptionSeller.com Guest Expert Series. Don: Well, thank you very much, Michael. I’m glad to be here. It’s my pleasure. Michael: Don, let’s start off by telling us a little bit about your background and how you got started in the trading industry. Don: Well, there is a lot to talk about today about options and making money, so I’ll get to the buy out part pretty quickly here. I started in broadcasting at the age of 15 and I grew up in a small town that only had 2 radio stations. I worked for both of them- they used a different name at each one. While I was in high school, I became a licensed broadcast engineer, continued electronics in the Air Force, worked countermeasures during the Vietnam era, and worked for the Motion Picture Bureau at the Florida Department of Commerce and Economic Development. I had the pleasure for several years, a week every month, I spent in Hollywood, California. It’s a pretty remarkable “bubble-world” out there, and it still is. Patty and I were just starting a family in those years and that took a lot of travel, so I gave being a stockbroker a try. One of my specialties there was introducing customers to the covered call writings, sort of a specialty of mine. Now, back in those days, in the mid 1980’s, it was very much a bull market. I think a drunk monkey with a dartboard could’ve made money. As luck would have it, I got to be a broker during those few months. I got a good offer to teach at a technical college right before the big bust in October of ’87. I took a lot of my customers in cash before I left, not because I was smart or I knew a market crash was coming, I just needed to make a lot of money and they had become friends of mine and I didn’t want to leave them hanging. I kind of put them all in cash and gave them a proper goodbye. Now, when the market crashed 30 days after I left to take the college professor job, my clients thought I was a genius. That’s certainly not true- I was just lucky! So, the greatest work and financial undertaking I ever had was the last 20-25 years. I never saw it coming. I don’t think anybody grows up to be a consultant to private corporations for risk management. I never even knew such a thing existed. I spent thousands of dollars on commodity books and the best option modeling software that I could ever find, and I bought a few of the newest and most powerful computers in the early 90’s. I think I thought I was going to be a trader and make a lot of money, but fate stepped in. That was coming, but it’d be later. It was something I never even thought. I got a call from a commodity producer who’d seen some of my option modeling that I’d faxed to a buddy. That phone call resulted in the working in risk management for the next 25 years. I got to work with some amazingly smart and creative people at the top levels of some major corporations, and it was just my good luck. I really got an education that money can’t buy. Michael: Well, we’re hoping you can share some of the pointers you picked up there with us today, Don. I know one of the reasons we wanted to have you on was that you kind of have a unique insight and you have insight into the commercial side of this business, but you’ve also been an individual investor, so you have insight into that side as well and can give maybe people a perspective from both sides of that coin. Before we get into that, Don, I want to talk just a minute about you book, Options Exposed Playbook. Just a great options book for anybody that’s interested in learning about options. Don does cover some option selling strategies in there that I thought were very excellent discussion of. Don, you told me a great story earlier about how you came about writing the book. Can you share that with our listeners? Don: Yeah, I’d be glad to do it. I was winding down my standards of risk management consulting, and I decided to stay home. There’s an old saying by Ernest Hemingway that says, “I drink in order that my friends are more interesting”. I wanted to take some time off and give that theory a test. Fate wasn’t to be. A friend of mine had called and we often talk investments. He said “Hey, I got something here I have to show you. I want to get your opinion. You’ve got to see it!” I said okay. So I met him for breakfast one morning and he showed up with two or three pages he had printed out on the Internet. Attached to the papers, the first thing I saw was that he had already made out a $3,500 check to some investment guru to buy this system. Now, my friend, he’s usually not that excitable, but he was just real excited and said “Look here”, he put his finger on the paper, and I read with him. It said “98% winners for 5 years”. It promised that anyone could probably turn $25,000 into $2 million in that 3-5 years, and that it would only take a couple hours a week, and it took almost no work. I stopped believing in the tooth fairy a long time ago. There are people that live in Austin, Texas in a little bubble who still believe in him, but I’m not one of those. So anyway, I took a good look at the pages he gave me and this magic system used vertical credit spreads, covered calls, and iron condor spreads. It promised the subscribers all they need to make themselves plenty rich with almost no work and in quick time. Now, years ago, I did a stint in the Air Force and I lived a while in West Texas. West Texans have a colorful way with language, so I told my friend a little saying I picked up back in those days in West Texas. “If a fella comes at you with a ten gallon hat pulled over his ears in an ear to ear grin, and he seems too glad to see you while shaking your hand a bit too much, you better look down and make sure he ain’t peeing on your boots”. We’ve all seen them, and we get these kinds of things in e-mails and in the regular postal mail all the time. By the way, Boone Pickens didn’t say that, but maybe he should. I took a couple of sheets and scratch paper and I showed my buddy how to do these pre-strategies. I had a little experience with them doing options. But I just told him, this is all the guy is really doing and he is doing it over and over again. Personally, I don’t believe for a minute the fantastic claims he makes. My friend interrupted and said, “Well, if he’s half right, I’m going to do really good!” I said “Yeah, that’s true! I can’t argue with that!” After I took a couple of pieces of note paper and scratched out some diagrams and made a few notes, suggested a few places where he could find some more information, he tore up the check and he said “You should write a book about this”, and I was giving my friend all the reasons why I was not, absolutely not, going to write any book on options right now. I left that meeting thinking that I had done my good turn for the day. When somebody tells you not to think of elephants for the next 2 hours, every time you close your eyes it’s all you can see. So, I started thinking about it if I was to write this book. I’m more or less retired now, but if I were going to write this book, what would be in it? Before I knew it, I was consumed by it and it only took about 10 weeks to write the book. That’s the Options Exposed Playbook that I have and I was a lucky man as far as selling really well right away. I got very interesting e-mails from a lot of readers. Some had absolutely no experience and ranging all the way up to Ph.D’s who were asking me about the inadequacies of the Black Scholes Formula, and that’s a conversation that I did not want to get into. Before I finish this story, I was preparing for this interview this morning, and here’s one here from The GURUS Selling System. It says “I know I’m reaching you on Sunday, so I’ll be brief, but you’re about to miss out on the best opportunity to make money you’ve ever seen….You see, this guy selects trade recommendations with a high probability of doubling your money. For example, on May 16th, made 106.9% gains in 3 days. May 17th- 70.4% in 2 days. May 23rd, I made an amazing $8,000 in 24 hours.” Now, these kinds of ads prey on people. Often, it’s people who are desperate who could believe an ad like that. Here’s another one that says “Just 7 days, you pocket $2,000 on one trade and you make $725 the next day in 4 short days. You make another $950 and people make $100,000 a year this way”. These types of ads cater to people- not a sophisticated audience, but they cater to people who are hardworking people and think like my friend did that if they’re half-right, they’re going to make a fortune. One of my motivations in writing that book- I don’t spend a lot of time in it bashing these kinds of systems, I think that’s a waste of time- I simply wanted to save beginner and small intermediate investors, beginners small and medium sized accounts, I wanted to save them from playing the slot machines. I noticed in your book and mine, as we did this completely independent from each other years ago, we used casinos as an example when we talk about selling options. In my book, there’s a line in there that says “You went to a casino and the manager said ‘you’re kind of stupid. We’re only going to let you play the slot machines’.” You can’t sell options if you’re not sophisticated yet because you don’t have the experience. The slot machines pay out 95-98% of the money that’s put into it, and there’s always somebody that’s at the machine ringing and flashing its lights. When I go to Las Vegas, the first thing I do, just to remind me where I am, is I go down… Las Vegas is a Petri dish for human behavior, and I’m a people watcher…. I go down and I pick out rows of a hundred slot machines. At any given time, one of them is ringing and flashing loud bells and whistles, but I’m looking at the other 99 who all have losers sitting in front of them. Those things are like parking meters. The more you play, the more you lose. I think buying options can be that kind of game, but somebody hits it big once in a while. It’s like playing golf- you tell somebody about your hole in one you made for years, but you never talk about the ones you lost flushing them into the woods. I think investing and gambling may have some of that human behavior in common. There’s an old saying that says “Experience is what you get when you get what you didn’t want”. I’ve had a lot of experience! Michael: Well, your experience has certainly resulted in an excellent book, Don. Wanted to congratulate you on that and certainly recommend that to anybody reading the book. I wanted to go back and touch on the point you made about the guy selling courses for thousands of dollars, and usually selling them to the people that aren’t really educated that much in trading, although not always. Even experienced investors sometimes will buy these courses. I don’t want to bash all of them, because I know some of them have some good information. Don: Sure they do, Michael. One of my favorite books is by the old guy Will Rodgers. It’s what keeps me humble- that and investing. He said that everybody’s ignorant, just about different things. When I’m talking about neophyte investors, who earnestly are hardworking people, are very prodigious people in their work and their demands, and they’re just trying to do better, their motivation is absolutely stellar. Anyway, go ahead. Michael: Sure, no, that’s a great point. But there are a lot of these courses at there that they are charging these thousands of dollars for promising outrageous profits. In fact, I wrote about one in the upcoming newsletter where there’s a guy on CNBC now that said he took $4,600 and turned it into $460,000 in 2 years. I would be a little skeptical of those types of claims. The thing about it that a lot of these people don’t realize, even these courses that are good, a lot of that information you can get by picking up a couple of books for $30, $40, $50 a piece. Your book is a perfect example. When I talk to you about this book, I said “So, are you selling a course? Do you have a seminar?” and you said no, I just wrote the book to help people understand how to do this, so you don’t have anything you’re selling. It’s purely a book that is showing people option strategies that have worked for you, kind of bringing a perspective of both the personal and individual investor side to it. When you wrote the book, what would you think the biggest difference is or maybe the biggest advantages of being a commercial player or the advantages of being an individual investor? Don: That’s a great question. A lot of people- just hate the word hedge fund, which when you’re in risk management working with a corporation, usually ad commodities, it’ll be something like cotton, coffee, or orange juice or sugar. The goals of the commercials and the individual speculators are almost polar opposites. In helping people with their commercial risk management plans, and the term hedge fund is not the same as a fund you use to hedge for risk management. I don’t want to get into the semantics of it, but there is a big difference between the two. Commercial players I work with and the people who use hedge funds, their motivation is to preserve their capitol, to eliminate risk, and to get the highest possible margins on their products that they can. Now, some of them are selling commodities and some of them are buying them, and these can be commercial players on both sides of the same market, of course. It’s not just the speculators vs. the commercial players. I’ll give you an example: Maybe a speculator is selling a $5 bushel call for a relatively small premium and maybe this plant makes ethanol and has to buy corn. If corn goes over $5 a bushel and he has to pay that price, then he’s not going to have much profit margin, if any at all. So, what he does is buy a $5 corn call and if pollination doesn’t occur right, or weather gets too hot, or demand ceases or whatever the reason, if corn prices soon pass $5, instead of going out of business or having a year so bad he has to work the next 2 years just to make up losses, then they buy $5 calls and pay too much for their product, corn, which helps them make ethanol. At the same moment, somebody else on the other side of the market is saying, maybe a speculator, “Boy, corn has got some of the lowest stocks it has had in 5 years. Last year topped at $4.60 and maybe it’ll hit over $5 this year. Maybe I can afford to spend a few hundred dollars to bet that corn prices are going to hit the ceiling. Then, these two orders at the markets someplace meet, the transaction occurs, and everybody’s happy with what they did. It’s just about a zero sum gain. I don’t really see what we did. In fact, we used to have a rule and I explained this to my customers because I knew the CEO’s I was talking to would be talking about risk management. I discouraged them from using the word “profit” at all, and substitute the word “margins”, because we don’t care. We lose a bunch of money in a risk management account, and they say they’re startled to hear me say that. I say “Well, if it means you make more profits, then that’s fine! A higher profit margin is the goal and we’re not going to call them profits because they aren’t profits for the company.” Motivations in conserving capital to get rid of price risk and delivery risk, weather, or government upheavals, or changes in the laws and all those things. Plus, frankly, in the risk management programs, they can make some very creative contracts about buying options that they can offer their potential customers to give them an edge over their competitor…. things like that. Michael: Okay. So, a lot of the things you did in the commercial side of it was really helping to manage the true definition of hedging, where you’re helping them manage their risk for the price of the commodities they’re actually working with, whether they’re taking delivery or selling them. You have speculators on the other side that are taking the other side of those trades and both sides are getting what they want. Don: Many times, I work for an orange juice company, _____, at a processing plant, and they had a lot of their products sold, but they still had millions of gallons of orange juice in the tank. It wasn’t priced yet, it wasn’t sold, and they had uncertain profit margins to consider. Another of my clients, at the same time, was on the other side of the market. It was a very large grocery store chain, and they knew how much shelf space they had for orange juice, and they knew from years and years of selling orange juice about how much they were going to sell in the coming year. All the orange juice they know they have to put on the shelf but they haven’t bought yet is a price risk to them. If you had a freeze and all of the sudden prices went up and people who couldn’t even deliver the orange juice because of the damaged crops, the grocery store still has the same shelf space and demands from their customers. So, they would hedge and release themselves by selling options and contracts to speculators, they could insulate themselves so the contingency of price and delivery risk, that kind of thing. What’s fascinating is I felt like Dr. Jekyll and Mr. Hyde for working both sides of the market, but, actually, they weren’t really at odds with each other, they were at odds with the risk that was in the market – and both of them could successfully make trades to help meet their margin goals. Michael: Yeah, that’s a great point. A question we get often here is, a lot of people ask, “Well, you guys are selling these options. Who’s buying these deep out-of-the-money options? Yeah, sometimes it’s other speculators that are buying lottery tickets, but a lot of the time it’s these commercial players that don’t want to buy them, they have to buy them to insure their business. It’s like buying insurance. Don: Absolutely. It may be from a speculator who said, “Man, I’d never do that. Who’s crazy enough to take the other side of this trade?” 80% of the options expire worthless, as you point out in all of your material, too. That’s pretty good odds from the start. The thing I love most about selling options, and this is all in your book and mine I supposed, it doesn’t demand that you have to guess price direction. The amplitude of the price changes, nor do we have to do that within a defined time. Buying options is like standing on one leg and shooting at a moving target. Selling options can be like making a partnership with gravity. Gravity and time decay both work regardless, rain or shine, 24/7, in all kinds of conditions. They’re not dependent on the stock market and commodities, and they don’t depend on public opinion or on anything. One of the things about the financial channels, and, you know, this is July of 2016 and we’re in the middle of this presidential thing going on, which is the real Petri dish of human behavior, I think. It’s interesting no matter which side you’re on. It’s just crazy what the news channels do. It was all about the candidates a few days ago, they were running out of news, they were getting in experts to talk about every contingency that might happen. It was a slow news day, so they would take the small stories and somehow embellish them a little bit and bring them to the top so they could keep listeners, so they can sell adds, so they can make more money. It’s really funny on the financial channels, they even do that. This tragedy that happened in Orlando, Florida 2 days ago, now the financial channels are not talking about politics, but they’re talking about terrorism and what that means to investments and which investments would be best if there is a terrorist attack. These guys, with all do respect, they have some very bright people, but they have a tough job. They have to show up every day to a non-scripted program, and this goes for network news, too, and they have to take whatever is in front of them and make it sound like the sizzle on a steak and sell it to the listeners every day. With TV, they’re able to do that. Aaron Spelling, I think it was, said one time “The TV, you don’t have to be really good at programming because TV is a medium that has a default that’s kind of the most effortless thing to do- you just sit there and watch it.” I do it, everybody does it sometimes. It’s a rest for your brain sometimes, or whatever your reasons. It’s interesting and all of this fast Internet information everywhere we can get, it’s a lot of toxic half-truths and innuendo information. My mother-in-law, who’s in her 90’s, I tried to keep her from watching the news because she would just buy a new lock to put on the door every time she saw the nightly crime report. I think investors made that mistake when they watch the financial channels, and maybe some of the other news. It’s just a type of telescopic fear. It’s like you never think about an asteroid hitting earth. Matter of fact, just 3 weeks ago, there was a comet that came within 2.2 million miles of the earth and it was ½ a mile wide, and it would have had a giant impact and probably killed hundreds of millions of people. But you didn’t hear about that in the news, and we’re always in that unlimited risk like that, or satellites breaking, or things like that. I think unlimited risk gets a really bad rap because people are always taught to be afraid of it. There’s some merits that you go into in some great detail, and you and James Cordier’s material about what unlimited risk is and what other people sometimes fear. There’s a way to understand it and a way to be able to use and to do it intelligently and within the laws of a very good mathematical probability. You guys do a great job with that. Michael: Thank, Don. I appreciate that. You made a great point there I want to go back to for just a second, because I think it’s important and we talk about it a lot as well. The role of the media in both stock and commodities prices… we talk about, in some ways, you can actually use it to your advantage. The way you do that is by doing your own research or knowing where to go to look for that fundamental research on your own, and knowing what’s important and what isn’t, because if the media, like you said, they have a slow news day or they feel like covering something, they can take something that’s really, in the big picture, somewhat insignificant, and make it seem like it’s a big story for that individual stock or commodity. That can move the price- maybe not for the long term, but for the short term. If you know what the real story is, you can take advantage of that as a trader. It’s one of the reasons we spend a lot of time on fundamental research here and we recommend individual traders, if they’re trading on their own, they do the same thing. Don: Right, and that’s another reason why I love commodities. I have great respect for the work that you and James do there. It’s because you study the fundamental information on these markets. You know where the corn stocks are, you know the seasonal patterns, you know when grain pollinates, you know when the harvest begins, you understand world market, and you understand the United States Market. There was a story on TV on something that kept the commodity prices really not in sync with the true supply and demand. You have the ability because of your experience and because you stay up on these things- that’s your job. You can talk with your investor and let them know that it’s a puff news story or rumor or whatever. A number of years ago, there was one case of mad cow disease in Canada or someplace that crossed the Northwest United States. This sent ripples through the commodity markets, just on potential that we might not be able to buy a steak in 6 months. As a result of that, on down the line, prices went way up on the cattle. A lot of people that thought they wouldn’t be able to afford cattle got rid of the breeding stock and we’re still recovering from that, even though it was years ago. It takes a specialist in commodities and in these markets. Each market can be very specialized, and I don’t know very many people, any people, who are good at all the commodities markets. I know people claim to be, but I’ve never seen it and I’ve never heard of it. You have to go with 4 or 5 markets that I’m familiar with and have experience with and it’s kind of like writing a book. You have to write what you know and you invest what you know. You take things that you have all that experience in, rather than take a whack at something that might look attractive temporarily but you really don’t understand the market. That’s the value of having somebody like you at Option Sellers. These high net investors you serve, that’s the pivot and the very heart of what you do. The other side of that is being able to know the math and understand the mechanics of the market and things like seasonal volatility, and you incorporate fundamentals in there. With a high net worth investor, they can do things that most of my readers probably will never be able to do. They have a large enough capitol. You take a small investor that’s just starting out and maybe has an account of $10,000. There’s no way he can afford to draw down $5,000 the first week he makes a commodities option investment. I find net worth investors are not only able to tolerate that, but able to use the system that you guys use. I think it’s amazing and they can have a great deal of success with that. The huge benefit to investor for the types you do, I don’t recommend people start off dealing with a highly complicated commodity market, and the strategy that might be a naked option with unlimited risk, because, for a small investor, that can put you out of business in 2 days. You’re done. I teach that we’re going to start this way, we’re going to practice it, and we’re going to build it slow and sure and they can be able to do that. They can’t afford the same programs you offer for high net worth investors. For the people who do fit that category, I’ve never seen a better way to do it than what you guys do. Michael: Well, I appreciate that Don. I do, that’s a great point to make, as well. I do agree with you. I think there are some advantages of economy of scale when you get into and working with higher dollar amounts. Obviously, that’s one of the reasons why we have our minimum where we do. There are strategies that can fit almost any size of investor. It’s just a matter of matching the strategy. Let’s talk about that a little bit, Don. You’ve traded commodity options, you’ve traded stock options, do you have a preference for either one or an advantage(s) you think one might have over the other? Don: Yeah, well, like you just said, you’ve got to find suitable investments for the right advisors. For myself personally, since I have a lot of experience in both stocks and commodities, I stay in both. To me, normally, people will trade stocks first because some of the volatilities and some of the limits on all the smaller accounts, and they will start off in stocks and things. Those are the people that I suggest in my book a great deal, and I don’t talk a lot about commodities in there because I don’t want to give beginning investors the impression that they can make a killing in commodities. I’d start to sound like one of those ads I read a moment ago. Those things are doable, but they have to be doable to the right investor. Giving advice to my readers, one of my favorite trades is the vertical credit spread. They can put a capitol on a risk and make a relatively high return in 30-60 days out selling some options, and then they buy an option further out-of-the-money so they put a cap on any lawsuits they might have. When you do that, you can compute the risk of war ratios and it helps you with your money management in the account. Just like a floor trader, your first job every morning is to get up and survive to invest another day in preservation of the capitol, whether you’re a large investor or a small one. That’s number one above everything else. Now, I don’t get paid for selling any advisory services. I just do not want to do that. I ran around for a long time and managed a lot of money in hedge accounts and things, so it’s not something that I want to spend, at my age, the rest of my life doing. So now, I just love being able to write and share some of the information every day. I had a note here that I wanted to go over with you… These days, the old pros that learned years ago when they were doing Black Scholes computations, slide rules, it’s so 1985, to tell new investors that you don’t have the experience, you’re better off not even going with those options at all. You go find yourself different stocks. I read a Warren Buffet story one time that had a great impact on me. You remember the old mutual funds, and still many people have them these days. The ETF did kind of a better version of some of that type of investing. I don’t miss mutual funds lately, but I don’t choose investing in them. It’s because of what I read that Warren Buffett had said. I’m paraphrasing, “If I own race horses and I have a stable of 80 horses, and I know that 10 of those horses win 90% of their races. I’m not going to run all 80 horses, I’m just going to run the winners and stop picking now when the market has a new normal because of the news channels, the types of investments, and the sophistication. I think you have to find some winning bets. Frankly, 80% of options expire worthless; they’re certainly investigating to be able to go there. But you don’t race the whole stable, even though they are all thoroughbreds, because you just tend to jot down your profits. We live in an age with Internet and all the toxic information along with the good. The trick is being able to shift that out and to be able to discern which kind of investment is right for you.” I think Warren Buffett was on to something there. You know what they say about normal- it’s just a setting on the dryer. None of us are normal. Our needs and aspirations and everything are just not the same. I think those are decisions everybody has to make for themselves. Michael: I love that analogy of the racehorses and I also like the way you applied it to the options because it really does carry over like that. As you mentioned, if Warren is listening to the OptionSellers.com Radio Show, we certainly invite him to call in and give his opinion on that. Don: Well, he has been known to make millions off of covered calls. Michael: I know. It’s surprising if you go in at times in different part of the Wall Street Journal articles about who bought or sold these many options in the options market, and you don’t picture guys like Warren Buffett and Carl Icahn making these big option trades. You see them taking positions in stock, but they sell a ton of options. It’s well documented. Don: They’ll buy a great dividend stock these days that’s 2 ½ or 3% and then they sell covered calls on it. I don’t have their numbers in front of me, and I never will, but they might be able to make 5-15% more a year depending on the markets and the timing, but they can make a very nice return. Putting your money in the bank these days, you remember the old rule of 72... you just divide the annual interest rate into 72 and you get the years that it takes to double your money. If interest rates are 2%, it’ll take 36 years with your money in a bank savings account in CD’s to be able to double the money. For most of us, that’s just not acceptable. Michael: Yeah. I agree. I want to go back to something you mentioned because I did want to re-visit your book for just a second. You describe some really solid option strategies in there, but you said your favorite option selling strategy, you preferred vertical credit spreads. That’s one of our favorite strategies, too. Can you maybe just go through a quick description of how you would write that if you’re writing it on a stock or commodity, for instance? You probably talk about stocks in the book, so maybe just talk about how you would do that on a stock. Don: Sure. Well, first of all, I’d pick a stock. The nice thing is, and you go over this in your material too, anybody selling options has to understand that one of the major advantages is that I don’t have to guess prices direction or the amplitude of the timing. I just need to know where I think the stock price will not go. Then, in ¾ of the time, I’ll make money with it. That’s the whole thing. Vertical credit spreads limit themselves to this. If I had a stock that I think is going down or that it has already gone too high, I don’t try to press the reversals, but maybe it starts reversing. You want to be able to try and sell some options. With the market near it’s top all-time highs now, there’s a school that thinks it’s going higher, a school that think it has got to turn around and go lower, citing the bad economic news given daily now. I have no idea which one is going to be right. That’s why I don’t sell the apart, out-of-the-money call if I think the stock is going down. That leaves you with unlimited outside risk, because if price overruns your strike price, you’re going to be in the hole- it’s going to cost you and you’re going to lose money. With a vertical credit spread, you go just a little bit above the strike price. You go a little bit above the price where you sold the call and you buy a cheaper, less expensive call, and that puts a cap on your potential losses. So, with a cap on your losses, let’s say you’re a beginning option writer in stocks. You may collect $150 in premium by selling the call at a lower strike and then by buying one of the higher strike you might spend a third or a half that money, say $50 out of $150 to put a cap on your losses. So, if you have losses that are at the most $500, and you can make $100 profit off of it, that’s 20% in 30-60 days, which is great return on your money. Michael: Now, that’s a great strategy. I was glad to hear you say that because a lot of books and going back to some of these courses out there, they’ll talk about things like converted butterflies and everything. I know those can have their place, but a lot of times, especially for individual investors, they can be difficult to implement, especially if you’re doing it on a larger scale. We always say simple is better and vertical spreads are a great, simple strategy that can also be very effective. Don: One of the things, I get a lot of e-mails from my readers, and a lot of these people have never dealt with options. Most of them have little stock experience. A lot of them, frankly, are young millennials who had a couple of babies, they’re married, and they’re working as hard as they can, and they have money saved and they want to be able to use their laptop or iPad or whatever it is to be able to fiddle with options to try and make a little extra money. Of course, I try to tell them fiddling is not the preferred word and let’s get to work. You can make some money that way, but you have to be very, very careful about what you do as part of that with money management controlling your risks. The vertical credit spread and small steps are able for that. Another thing about most of the e-mails I get from my readers- almost everybody and I think that as a society, the financial planners have taught us to think this way. Maybe they’ve heard too many bank commercials, I don’t know what it is, but people immediately start thinking in terms of making thousands of dollars over years of time. I think that doesn’t allow them the focus that they need. It’s fine to dream and have a plan, we all do it, but when you wake up in the morning and you have something in front of you that you have to deal with, investing some place, so I try to tell them just to find an easy goal. Maybe start with trying to make $50 or $100 a day or a week or whatever suits their account. That’s very doable. You can’t get up in the morning and make several hundred thousand dollars and put it away and wait 20 years to collect it. I suppose there are some ways you could do that, but for an individual investor, you have to deal with what’s in front of you. I think trying to help people focus their attention to something they can do right now to begin to achieve some of the longer-term goals is the way to go. Michael: Yeah, that’s a great point. It’s a great discussion on options there, Don, and I appreciate that feedback. Let’s just talk a little bit briefly here to talk about how you pretty much trade for a living now. Would you say that’s a fair assessment?... or professional trader? I know you trade a lot of your own money, but do you have an opinion on the stock market right now for 2016? What’s your outlook? Don: Well, it depends on what the talking heads on the network say. What’s so funny to me is that those guys can come out one day and explain a bull market and then get up the next morning, go in at 6:30, and they’re talking about the bear market that we’re in and they never bat an eye. They can change. There’s a reason for that- it’s almost impossible to forecast what the market is going to do next. I can’t do it- I’m not that good. For that reason, I choose options and I try to make my money by knowing probably ¾ guess on what’s not going to happen instead of trying to predict what is going to happen. I think my odds are a lot better. I know it’s a disappointing answer, and when they get these experts on CNBC or wherever, at the end of the interview they say, “Well, what do you think about the market?” They always have a good answer and then they back-petal a little bit. Then, when it’s all said and done, I’m thinking, “What exactly did you say?” It’s confusing to me. I can’t tell the future. All of us can connect the dots backwards, but trying to do it forward is just impossible, which we talked about the other day. Nassim Nicholas Taleb has a book called Black Swan, and it’s about improbable events. If you’re a little bit of a sophisticated investor and you love to figure the odds of investing I think it’s a must-read. It’s a really interesting book. Whether you’re an investor or not, it’s a little walk down probability and philosophical terms. Michael: I’m familiar with the book. It’s a great book for especially sophisticated investors- somebody that’s really looking to get into trading and understand the nuances of it. Your answer was not disappointing at all. In fact, the guys that say “I don’t know what the market’s going to do. Nobody knows what it’s going to do”, those are usually the guys that really know what’s going on. I like that answer. Don: It’s like you say in your new material- sometimes you can take a news event or whatever happened, whether it’s stocks or commodities, sometimes those over-reactions or under-reactions can present some great investment opportunities. Michael: I agree 100%. One of the things we like to say is, and it takes people a while to get their arms around that, because it’s almost the opposite of what everyone else is doing, but you’re saying “Look, I don’t know what the market is going to do. I’m just going to pick something I think it’s not going to do.” Once people can understand that approach, it changes their whole outlook on how they invest. Don: That’s right, and a lot of people will tell you otherwise. But by and by, just keep your boots dry. Michael: Yeah. That takes a minute to think about, but that makes a lot of sense. Going forward, I know we’re not making predictions here, but do you have any favorite sectors of stocks or commodities or anything you’re keeping an eye on for the rest of 2016? Don: Well, I think part of the new normal that is developing, and we don’t know if it’s right, hindsight or not, but I look at the individual stocks and the ones that are my favorites are not gambles on new technology, but trends because of disruptive technology. The greatest example of that right now is a stock that I own known as Amazon. To these people, there seems no end. Half of their income now is from AWS, Amazon Web Services, in this cloud computing that they’re selling. They’re not even famous for that and it’s half of their income for the company. I’ll be the first one to tell you, on our way downtown, my wife asked me the other day what I want for Father’s Day. I said, “Well, I have a few items”, and she said, “Well, I’ll take you shopping”. Immediately I’m thinking, “Whatever it is, I can get it cheaper on Amazon and have it here in 48 hours”. I’m guilty. I know people do this all the time but I’ll admit it that I walk into brick and mortar stores and I’ll find something there and I’ll just think that I can make a better deal by internet shopping. I’ve done it for years. I’ll step outside the store and get a cup of coffee, get my iPad, and I’ll order one. A lot of retailers get mad at me for saying that, but it’s just the elephant in the room- that’s what people are doing. Not in every instance, of course, there is still people who enjoy going through the deals and being able to go out, it’s a social activity. When I need something, I’m busy and I don’t want to spend 30 minutes in the car to go down and buy what little item I needed- I’ll just order it online. Again, that’s my point with disrupted technology. This is what happens for investors, too, specifically smaller investors. Maybe you and I were investors a few years ago and we didn’t have the same information the pros have, we didn’t have instant quotes, and our smart phone has more electronics in it than the Apollo 11 Moon Mission to put a man on the moon. Commissions have fallen- first it was the discount commissions, you know, Charles Schwab and those who were innovative in that area. Now, electronic trading on a portable computerized device - iPhone, iPad, Tablet, Microsoft, whatever it is – that has displaced a lot of the brokerage business. For small investors who want to use self-directed accounts, it’s a perfectly great way of doing it. Conditions are low and you have the same (virtually) news and quotes that the pros have. Of course, for high net worth investors, they have the option because of their accomplishments of being able to probably find an easier entry point by finding somebody like you guys. Michael: Well, yeah. I agree with your assessment there. Disruptive technology is really affecting almost every industry. It’s certainly a sector to keep an eye on if you’re a stock investor. Don, just on a personal note, what’s your favorite investment book? Not counting yours or mine… Don: Well, like I say, although it’s not written as an investment book, I like books like Black Swan. I’m a voracious reader and I always have 2 or 3 books going at one time. I’ve got all 3 of the Taleb books right now and I’m alternating between them. There’s such good information out there in many things. I’ll just say Black Swan for right now, it’s not the book of a lifetime, but it’s one of the books I find pertinent in the type of environment that we have to invest in. We have to be aware and keep in mind those black swans – if you’re read the book or heard those terms, those are things that seem to come out of the blue and they’re totally unexpected but they have a very profound and lasting impact on society and culture and finance and everything else. It’s a wonderful topic and it’s very interesting to explore. Michael: Absolutely. Don, how can investors buy your book? If they want to get a copy of it where can they go? Don: One word: Amazon. The quickest, fastest way to get the best price, just go to Amazon.com and you can search for Options Exposed Playbook. That’s it. Michael: Excellent. Well, Don, this has been a great interview. We really appreciate you coming on. We hope you’ll be willing to come back again sometime to give us some great information here. Don: You bet, Michael. It is a pleasure to be able to talk with you more. I appreciate the opportunity and I want to thank all of the listeners you have out there and the people who have been reading your blog. Thank you very much, good day, and I’ll see you later. Michael: Great, Don. Thank you.