patrick donohoe We sat down with Patrick Donohoe, President and CEO of investment education firm, Paradigm Life, and an investor on the Fundrise platform to talk about the importance of financial literacy, the investments he stays away from, and his belief that there are really three sides to every coin.

What is the importance of financial education?

Though I work in wealth management, my real passion is for investor education.

Early on, I spent time working in financial consulting and saw the darker side of finance—people getting into trouble with debt and living outside of their means. It wasn’t intentional, of course. Most people just don’t know where to begin learning about financial management.

I started Paradigm Life in 2007, right on the brink of the collapse in 2008 and 2009. I saw first-hand what happens when you’re not educated. Lives and families can be completely destroyed.

Now I’m on a mission to educate the masses. We’re trying to position the Paradigm Life team as financial myth busters, demystifying the rule of Wall Street and the banks.

You recently organized the Cash Flow Wealth Summit. What was the impetus behind it?

My main objective is to get empowering content in front of more people.

Most people think their path should be: school, a job, and then a master’s degree in order to get a raise. But, there are so many opportunities right now to do something non-traditional and so many industries on the brink of change.

Companies like Fundrise and Lending Club are replacing needs that Wall Street traditionally filled. Industries are getting flipped on their heads.

The idea behind the Cash Flow Wealth Summit is to provide useful tools, motivation, and inspiration to allow people to leverage what they’re passionate about, better themselves and their income, and try something new.

How does real estate fit into your portfolio?

When I graduated college, I was on a real estate kick.

As soon as I saved up enough money, I bought a duplex. I rented out the nicer top half and my wife and I lived in the basement apartment. She hated it, but that’s a story for another time.

From there, I started leveraging rates and mortgages, and slowly acquired 6 rental properties. Shortly thereafter, I brought on partners to help me scale my business.

During the 2008 crash I was forced to sell a few properties and, then when things normalized in 2009 and 2010, I started buying again. I then started to look to diversify in order to mitigate risk. There weren’t many options at the time beyond multi-year limited partnerships and private placements with minimums of $150k - $200k.

I do think that we are on the brink of another bubble and, with that in mind, I’ve started to look for more short-term investments to round out my portfolio.

I learned about Fundrise just over a year ago and have added several investments from the platform into my portfolio. I like that I’m being offered deals I’d normally see for $150k for lower minimums, which allows me to more easily diversify.

What is the best piece of investment advice you’ve ever received?

Nobody is ever going to try to sell you an investment and say upfront that you’re going to lose all your money. Everyone comes to you with just the pros.

Remember, there are 3 sides to every coin - heads, tails, and the edge - the wisdom to know the difference.

What investment trend are you wary of?

I can only pick one?!

There are three primary wealth destroyers: inflation, fees, taxes. Anything subject to those is a bad deal.

In three words, what makes a successful investor?

Stewardship. Education. Perspective.

Last question - What is your favorite Fundrise deal that you’ve invested in?

The 3 World Trade Center offering. Though it’s the lowest yielding Fundrise deal I’ve seen, it’s tax free, safe, and there’s a bit of a sentimental and historic component for me.

This offering is evident of how powerful this industry is and how it’s reshaping Wall Street—an industry that needs disrupting big time.

More on Patrick:

Patrick started Paradigm Life in 2007 to teach investors, business owners, professionals and families sound financial principles. Patrick is also the host of Paradigm Life’s podcast which has been on the air since 2007.