Jason Hartman begins the show by looking at important economic indicators. He discusses a strong economy for the next couple of years and then some cooling. He dissects home sales and housing starts data and talks about whey it is important for the future of real estate. In the second half of the show, he brings on guest James Arthur Ray. They talk about an incident in Sedona where 3 people died in The two spend most of this interview discussing what actually happened at the sweat lodge in Sedona when 3 people ended up dying. They also start their look into what wealth actually is.
Announcer 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on Now, here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 0:52
Welcome and thank you so much for joining me. This is Jason Hartman, your host of Episode 1060 Episode One 1060 today, it’s not uncommon, we are going to have a somewhat controversial guest. Well, he really wasn’t controversial until he unfortunately got in the news several years ago. And that is James Arthur Ray. He is an author of a best selling book harmonic wealth. He also presided over a terrible tragedy that happened in Sedona. He talks about that very candidly, on this interview, he was open to that I got to give him some credit for that because I said, Look, I’m not going to do the interview unless we’re going to talk about this. And so we’ll talk about that a bit. And we will also talk about his new book, the science of success. But before we get into that, and Hey, keep in mind, you know, we’ve had all kinds of amazing and interesting guests on the show over the years, we’ve had bill errors. He was on the show twice. The man who made Obama some consider him a terrorist. A domestic terrorist and maybe they’re right. I don’t know. I don’t know. So, you know, I thought that was really one of my most interesting interviews with Bill airs. The first one I did with him, I didn’t think the second one was really that great. And speaking of interesting interviews, I gotta tell you, I’m just going to be very candid with you about this. You know, we all have our self doubts once in a while, right? And I am no stranger to that question myself constantly. Sometimes, I really think I used to be better at this than I am now. So that is why you should go and listen to some of my old episodes. The other thing is some of these core principles I just don’t want to bother our regular listeners with repeating them all the time. Now, regular listeners, you might think, what are you talking about? Hartman, you repeat yourself constantly. I know but that’s just the old age senility kicking in You got to give me a little bit of slack for that, right? Anyway, go back and listen to the old episodes. Of course, you do that for flashback Friday. And I think those episodes are very, very important. So make sure you’re catching all of those. We come to you every Monday, Wednesday and Friday like clockwork. And sometimes we throw in an extra episode on Tuesday, and maybe even Thursday, we sometimes have five episodes per week. If I had it my way, I would do an episode every day because I love talking with you. And I love hearing back from you. The feedback you give me and the comments and the compliments I love those to their fuel. And by the way, thank you for all of those who are writing reviews on iTunes or whatever podcast platform you are consuming our material on. We appreciate your kind reviews. Occasionally we don’t get a kind review and you know what, it’s always political. It’s always political. Isn’t that amazing? You know, people are so intolerant sometimes. I tell you don’t throw the baby out with the bathwater. If you don’t like someone’s politics and listen politics, you can’t talk about personal finance and investing without talking about the political environment. I mean, seriously, folks, you can’t do it. It’s just not possible. You would be missing, like 50% of the equation. If you ignored politics, you must talk about politics. And if you ever listened to any other podcast, hey, I hope you’re not doing that. And if you are, I hope you’re listening to my other podcast, because we have so many podcasts for you, you know, and if they’re not talking about politics, they’re leaving out 50% of the equation, you just have to talk about politics. So some economic indicators before we get to our 10th episode show today with James Arthur Ray. And remember, a 10th episode is where we Talk about something of general interest, not just economics, not just investing, not just that kind of stuff. But let’s do a couple little quick economic updates before we dive into today’s 10th episode show. So good news, again, overall in the economy, the economy is booming, as you know, I think we got a few more years coming maybe at least a couple more years, a couple years to a few is three to five, right? I didn’t say several that would be five or more, right. But you know, we got a couple years of these boom times left, but there are signs of cooling. Do not ignore them. The high end market around the country. Now I don’t mean high high end we’ve reported on that many times. is cooling off cooling, cooling, cooling. And by the way, I must tell you where I’m located today. I am in beautiful Denver, Colorado, always loved this city. You know, we’ve had this kind of like these crisp, cool nights Some mornings, but then in the middle of the day it gets it’s really rather warm. But I love Denver. I’ve always loved Colorado. I don’t know if it was john Denver, not his real name. By the way. If you’re ever curious, look up these celebrities. So many of them have pen names. If you will know, the bloom, or celebrities stage names, john Denver, the fashion icon Ralph Lauren. I think his real name is Ralph Lipschitz. Okay, john Denver is like his name in some German name, whatever it is, but anyway, I love singer songwriters. I am getting on a bit of a tangent. It won’t be long. Thankfully, I got to see john Denver in concert before he passed away. What an awesome experience. singer songwriters, they just don’t make them like they used to. That’s one area of life where you can really say that, but it always made me really appreciate Colorado listening to john Denver’s wonderful music and lyrics and all that kind of stuff. So As you will most of you know, I have an exceptionally good taste in music and very eclectic taste in music. I must say most of you do, too. I know that. It’s funny when you ask someone, what kind of music do they like if they’re younger, they tend to only like one or two kinds of music. But when they’re older, their tastes become much more broad. And they like a wide variety of music. Maybe we’ve become in many ways a little more open minded as we age, but in some ways more closed minded. Okay, off the tangent economic update, then let’s get to our guest today, existing home sales, pretty much the same in August. Four months of declines, though now declines, not really due to the strength of the market. That’s what most people think a decline is about. This is due to lack of inventory because demand is so strong. It’s not a strength of the market problem. Okay. In August, the housing starts they were up and there was a lot of multifamily can instruction and still a rise in single family construction, however, building permits fell slightly. So when you look at those two indicators, I just speak to that for just a quick moment. You know, the housing starts that’s when they’re actually starting to build the house before it goes vertical, right? They pour the foundation and they do this stuff in the ground. Right? Was it Henry David Thoreau that had that great quote, I think it was Thoreau might be wrong. That said, we can build castles in the sky, but we can’t make them on foundations of sand or something along those lines, but it’s a great quote. Anyway, look it up because I don’t remember it. I just know it’s good. That’s what I know. Okay, so the housing starts very important, right? The building permits also very important, probably the most long term indicator when it comes to the housing world is the building permits, right? But then the housing starts another one because of course, you can get the permit to build but then you might say And wait, there’s certainly no shortage during a big recession in recessionary times of entitled permitted land with maybe just foundations built, or just, you know, the basic infrastructure of the tract built. And that’s it. They didn’t build the houses, they didn’t go vertical, right. So no shortage of that during recessionary times and builders walking away from projects. But when you look at some of the strengths of the housing starts indicator, it’s you know, again, very forward looking not as much as permits but you know, good gauge of the supply levels. Obviously, you can identify a possible business cycle shift by looking at that indicator, and it covers over 90% of all the residential construction in the US, okay, this is done by surveying builders, right? But the weaknesses, I’m getting some of this stuff from investopedia and Wikipedia, I looked at two sources to talk to you about this today is that there is no differentiation between what’s being built, right the size, the quality, the price point, either start or it’s not right doesn’t matter. It could be building mansions could be building a tenement project in a slum doesn’t matter just as long as it started. That’s a start and it’s counted, right? You know, it only focuses on this one small area of the economy. And then of course, there are things that cause it to really vary a lot like weather, natural disasters, things like that. You know, you’ve got to seasonally adjust this stuff because of, you know, a lot of places in the country they don’t build in the winter, they literally have to wait to start building. So just something to know their builder sentiment rose again, strongest level in 11 months, renewed interest in purchases following this summer low. A lot of people are buying out there the labor market continued to show major strength, major strength, love them, hate them. I’m giving Trump some real credit for that because He deserves it. Now it’s funny. I must tell you not to get too partisan here. Obama is making the rounds, former President Obama making the rounds claiming credit for the booming economy. yet. It’s funny because he blamed george bush for the bad economy he inherited for about six of his eight years in office. So take it as you wish, but those are just facts. Just the Facts, ma’am. Okay. Unemployment filings for the last week fell to a near you ready for this? 49 year low 49 year low, almost half a century low in unemployment claims. Wow. Wow. Wow. Wow. Consumer Sentiment rose to a 17 year high last week. Confidence improved as consumers grew more optimistic about their future, the economy and of course their own financial Picture mortgage rates, they’re up. As you know, they went up a little bit more highest level since May. This is causing a lot of people to make buying decisions, get off the fence and buy buy buy market indicators say they will not fall anytime soon. So, if you want to really know about interest rates, don’t listen to Hartman, yours truly because I absolutely suck at predicting interest rates, go to grants interest rate observer, because that guy is the expert on interest rates. He is really the interest rate guru and he gets it wrong a lot too. Okay. But he gets it right. So that’s who I would defer to because, hey, I’ve been right about many predictions, many, many predictions I’ve made. You’ve heard them all here on the show, and hey, it’s all on tape. Just go back and listen, the last thousand episodes for the last 13 years. And you’ll know what I’ve been right about and what I’ve been wrong about, but really the only thing startling miss that I’ve made his interest rates. I just thought that would be a lot higher a lot sooner. Boy, was I wrong? Hey, I admit when I’m wrong. Okay. existing home sales. Yep, booming. That’s pretty much the picture for the economy but the existing home sales again, very limited by the inventory picture. Hey, since I’m going a little long here, why don’t I just go a little longer and we’ll do the second half of James Arthur Ray tomorrow. I know it’s a 10th show, but we’ll just give you a Tuesday episode this week as well. Okay, our Hawaii event profits in paradise coming up is going to be an awesome event. Be sure you join us that will be in beautiful Waikiki Beach, most iconic hotel there. You’re going to love it. That is coming up. Go to Jason Hartman calm to register. And also looking forward to the new guests. We have joining us for the venture Alliance who took advantage of that awesome venture Alliance. discount when it’s bundled with the profits and paradise event. There is an airfare war going on to Hawaii right now airfare is very cheap. We have a discounted room block on the hotel for both events or just one whenever you want to do, it’s just going to be an awesome event. This is a totally new event. Remember, just to understand the landscape of the different live conferences we offer, we have the oldest one, creating wealth, okay, the creating wealth event. That is the longest running event that I’ve done where I discuss the philosophical aspects of investing. Then, in 2015, I believe it was we added jQ Jason Hartman University, the real hands on one where you do the math, you get out your pen and you get out your calculator and you do the math, of analyzing real estate deals. And then one time, and we probably should do this one again. We had a software event where we talked about really States software and technology. And we’re gonna do a little bit of that at profits in paradise again, as well. So that’s going to be really, really fun. And then of course, we have meet the masters of income property that used to be every January, we had our 20th anniversary event this January, with Ron Paul as our main keynote speaker, but we had a bunch of other awesome speakers at that event. And we are pushing that one back now, probably to march so we can space out profits in paradise. The profits in paradise event that you are joining us for in November
Jason Hartman 15:39
is going to be a resort location type event that we do every year. So this time it’s in Hawaii. Next time it’ll be someplace else with kind of resort feel a lot of people bringing their families to this event and really making a vacation out of it. Join us for that Jason hartman.com for more info. So, one last thing before we get to our guest today, and I tell you, this is good news. Yay. Finally, finally, I’ve been saying this needs to happen for years. And it, it seems to be the movement is that way the footing is toward some real antitrust investigation into Google and Facebook. Hey, I know a lot of you listening work at these great companies, and they are great companies. But it is not right to have these companies control so much of the planet’s information. It’s not right for wall street in these few banks that we have to control so much of the world’s banking either. I don’t like big I don’t like centralized I don’t trust it. And you shouldn’t either. Any time in history, the things have become big and centralized. It has led to disaster. Facebook and Google are very biased companies. They shouldn’t Not be controlling all the world’s information as they do, they need to be either regulated like utilities, or they need to be split up under antitrust laws, or they need to make their algorithms public and open source. So everybody can see what’s going on. Something’s got to give. And I’m glad that we’re moving in that direction. So you’ve probably heard in the news about this leaked White House document. Let’s hope that that’s true. Because when companies get much bigger than governments, okay, and you don’t have the constitutional protections with them, like free speech, you got a recipe for disaster. These companies are much larger than many governments around the world. Okay. Hey, let’s get to the first half of James Arthur Ray. We’ll do the second half for you tomorrow with of course my intro and commentary. Hopefully it won’t go too long. And here we go.
Jason Hartman 18:00
It’s my pleasure to welcome James Arthur Ray. He has recently become a bit of a controversial figure due to the sweat lodge incident that happened. You heard about that on the news. We will talk about that today. But he’s also a New York Times bestselling author of his newest book, I believe is harmonic wealth, the secret of tracting the life you want. also the author of the science of success, how to attract prosperity, and create life balance through proven principles. James, welcome. How are you? I’m doing well. Jason, thank you for having me. Good. Good. It’s good to have you on the show. And I appreciate you saying that nothing was off limits. In terms of our discussion today. You’ve been involved in something that was pretty tough for a lot of people. Tell us about the sweat lodge incident that happened in I guess Sedona, Arizona, is that correct?
James Arthur Ray 18:47
Yeah, that was back in 2009. So it’s been quite some time.
James Arthur Ray 18:52
years, and my former company at the time, which was a very successful company, in fact, We hit the Inc 500 in 2009. And I was really blessed to have, you know, a lot of exposure through the movie, The Secret and the book, The Secret, which you’re probably familiar with. And we had a workshop, a five day intensive in Sedona in 2009, which was really about how to lead your life more powerfully and productively. And going into some of the challenges that life has thrown at all of us, Jason and how to find the gift in that even though it’s extremely difficult, and little did I know that we were going to get tested on that level, much more than we could have ever imagined. And so we have this five day deep dive where people were, you know, exposing to me in a very intimate setting, a lot of their childhood trauma and their their emotional issues. And we were working through those At a very deep level, to help integrate them heal them and, and literally, again lead our lives and our businesses in more productive way. We had a lot of professional people there. We had cosmetic dentists and doctors and lawyers. And it was a really great group of people. At the end of the day. We had an experiential event at the end of that five days. And it was a kind of a graduation event as a metaphor of going in to a sweat lodge. With all the baggage that we had been carrying throughout our lives, and then leaving it there and in reemerging and reinventing ourselves coming forward. something went terribly wrong. And we won’t know specifically what happened to this day because the state of Arizona the detective did not really do the follow up. He never did his due diligence and followed up on the materials and so forth. If that were there, but what the doctor from Harvard combing through 4000 pages of medical evidence found and testified actually, in the what was to become my trial was that it was toxins it was actually poisons, most specifically pesticides that got into the open pores and the systems of participants. And at the end of the day, three of my friends and my clients died, lost their lives in that sweat lodge. And if you’ve ever lost anyone, Jason that you care about, you know how that feels. It was horrific. And it would have been enough in and of itself, in fact, sometimes more than enough to know that three people that I cared about, and it’s been all these five days, working with and wrestling, helping them wrestle with their trauma and their emotional issues, lost their lives. It was in exam hits us of everything I’ve ever stood for live for. And as I said, that would have been way more than enough. But it didn’t end there. I mean, from that point on the media saver zona came after me for manslaughter, which is literally ludicrous because as a business person, Jason, I’m sure you would agree. There’s not one business person on the planet who would intentionally harm his clients and think that that’s going to be good business practice. And so I was acquitted of that. But what ended up happening in the trial was that they found me negligent in that really means that things could have been done better. I own that take full responsibility for that. Things were overlooked. God, I wish they hadn’t been. But as a leader, I’m fully responsible for that. And so that’s what I have two bears full responsibility, and that’s the price of leadership. And so what I talk to entrepreneurs about and business executives all around the country is that if you can’t step up to that degree of what I call absolute responsibility, then you better stand down because when something goes sideways in your business, there’s only one person in the crosshairs. And that’s true, whether it’s my former company, James Renner national, or BP Oil, or Enron, or Goldman Sachs, or any of those types of things that go sideways. You know, the person in the crosshairs and is fully and absolutely responsible is the CEO. And the challenge for us as CEOs, Jason is that we are held responsible whether we’re in a small business or a large business, my business at the time was 10 million a year. And as I told you, we hit the Inc 500. So it was a fairly successful privately held company. And so as a CEO, you’re responsible for a lot of things that you They have no control over
Jason Hartman 24:02
the game. Of course, that’s part of the game because you can’t control everything in your business. Otherwise, you’re going to be a solopreneur. Things can always go wrong, of course. So let’s just kind of understand a little more about the sweat lodge incident. There were 52 people in there, right? And three of them died. Is that correct? That’s correct. Okay. Had you done that sweat lodge experiment before? Was that a normal thing for you to do? I don’t mean to say experiment, but experience is probably the better word. Was that a normal thing in your courses to do the sweat lodge,
James Arthur Ray 24:33
just in that particular one? And yes, we had done it for three years prior. So here’s another responsibility that I bear. I used to do a lot of experiential activities. Jason and I know the power of those because there’s a transference. When we face our fears, and we step up and we do things that we often you know, imagine to be seemingly insurmountable, then we can step back and go in into our business lives and our daily lives and say, Wow, if I did that, then I can also do this. And so I know the power of experience or learning. And I had that in all the events that I did, whether it was a corporate event, or a public event, but that particular experience of sweat lodge was only in that one event. And, you know, one of the responsibilities in hindsight, is that I participated in the sweat lodge as well. So I was in there for the 12 rounds, and I, I was wrestling myself to conduct it to bring in the water to do everything necessary. You know, in hindsight on all my other experiential activities, I didn’t participate, you know, I had other people run the the activity, and I stayed more in a leadership and observational role and so So in hindsight, you know, maybe things would have gone differently. Who knows? If I had not been a participant in that?
Jason Hartman 26:08
Yeah. So with that, I mean, I believe, and I’m trying to remember the story when it was in the news, and I know you did a lot of interviews years ago, I remember the story for sure. I believe many of the victims families had claimed that you force them that you push them that there was peer pressure. And that’s why they stayed in. How do you respond to that?
James Arthur Ray 26:31
Well, first of all, I did not do any interviews. The only interview and the only thing I’ve done maybe maybe asked her to ask her your time. Yeah, was the only thing I’ve done is a documentary that cnn put together on my life called enlighten us, which is on Netflix. Now, that’s the only thing of record that I’ve done. I did do an appearance on Piers Morgan. Right after I got out of prison. I went to prison for two years for negligence and so back to your question. You know, the records will show and unfortunately the media, in my opinion, take it or leave it does not have any journalists any longer. No media has I was stationary. There’s very little in the real world sadly, sadly, of real journalism and investigative journalism nowadays. It’s sensational headlines. I
Jason Hartman 27:26
mean, look that’s been around for a long time that component of it bleeds it leads type concept, but right the media outlets just don’t have the budgets to investigate anything anymore. So it’s all become politicized agenda eyes, if that’s a word, I’ll make it up. And, um, you know, just sensationalism it because you just got
James Arthur Ray 27:51
to say economized because, you know, what they’re looking for is ratings period. In my lawyers, to your point, my lawyers even gave the facts too many so called journalists, and it just, it wasn’t sensationalized enough to utilize and so the fact is everyone’s signed a release form. That said they were not coerced, there was no coercion. Some people chose not to participate, which was fine. Something. There was one person who never participated. There were several people who participated for a short amount of time and then left and that was fine. Some people left and came back in and it was a tent. You know, there’s no way I could have forcibly kept them. One person, you know, crawled out underneath the back of the tent because he’d had enough. And so again, that doesn’t sound as exciting as this guy, forcibly making them. I mean, you can’t make grown adults for him. He can’t force them to go in and do something.
Jason Hartman 28:54
Yeah. And, you know, just for the record, I mean, I agree with you on that. However, We both I’m sure would also agree that when you’re in any kind of group dynamic, there is some element of wanting to conform wanting to belong, which is, you know, essentially what peer pressure is right? Even if it’s not overt it plays in, right? It’s I mean, look at you deal in psychology and human nature. That’s what we’re going to talk about in the second half of the interview here in a minute. You would agree that that there’s something there to that, right.
James Arthur Ray 29:26
Absolutely. I would agree to it. And that’s, you know, my whole niche of work is in leadership and performance. And so, my whole advocacy the entire week, was that you have to take your power back, because fact is 95%, according to psychology of what we do on a daily basis is driven by your unconscious. And that’s been programmed into you by what Robert Keegan from Harvard called socialized mind. And so the greatest battle you’ll ever find Jason is the battle to be unique and That’s a battle that never ends. And that’s part of really leading your own life. And that’s what I continually advocate is, hey, you make decisions for your life based upon what’s right for you and your purpose and your values and your vision, and break away easier said than done, but break away from socialized mind and following the herd. Yeah, you may say that, but it doesn’t mean it doesn’t exist in the group dynamic. I already acknowledged that it does exist in the force it exists and, and again, as strongly as I can advocate, and as strongly as I encourage, it’s still easier said than done, because since the time we were in traditional school, we have not been rewarded to be unique. We’ve been rewarded to conform.
Jason Hartman 30:49
Yeah, no, no question about it. That’s part of the part of the whole assembly line. None no one is especially the public school system, but any school system really in in any human Human group, it goes that way. Talk to us. Now if you would, let’s, let’s switch gears a bit. And, you know, I’m sure my listeners would love to ask questions of you on this subject and so forth. But there’s a lot out there. There’s the documentary, there’s, you know, many news reports, just look online. And there’s, there’s much information about that. So I won’t attempt to even scratch the surface on that here in this interview, but I’d like to talk to you about harmonic wealth and you know, some of your work and switch to a more positive angle here. harmonic wealth is your newest book, is that correct?
James Arthur Ray 31:33
No, it’s not actually. harmonic wealth is my New York Times bestseller it came out in 2008. But we can certainly talk about it because I know your your show is centered on wealth. And my objective in that book and I don’t know that I’ve achieved and in fact, I know I haven’t achieved it, is to redefine what wealth really means. You know, if you ask 99% of the people, what wealth means they’ll almost instant We say money. Well, if you trace the root of the word wealth back to its origins, Jason, what you’ll find is that it doesn’t mean money at all. Wealth means well being. And so I work with people who have 678 figure businesses all day long. And while they’re making a lot of money, they’re not very wealthy. Because no one worries more about money than the rich. They worry more than the poor do. Because the more you have, the more you have to lose. My whole book on harmonic wealth was about how to have harmony and well being in all areas of your life. And I suggest that there are five what I call the five pillars financial is one of them. It certainly, you know, is there, but there’s also relational, there’s mental, there’s physical and there’s spiritual. And when all five of those are in harmony, then you’re really starting to live a wealthy life. One thing I will tell you is that in 2009, my then money manager sat across from me after my third quarter meeting with him and said, You’ve done it, you can retire comfortably. For the rest of your days. I had, you know, 15 million in the bank. I hit my net worth was way beyond that. I had a $10 million annual company ahead. You know how some of Holland drive in Beverly Hills and a condo on the Big Island of Hawaii and media appearances in New York Times bestseller and little did I know Jason, that within 30 days, all of those things would be gone. Gone. My life savings, everything gone. My company, my Inc 500 company gone. And so here’s what I can promise you. Wealth is not what you have. wealth, true wealth is what you’re left with with all you have is gone.
Jason Hartman 33:57
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