3/3/25 AI Revolution & Local Innovation: Chatbots, Modern Intelligence, and Jim Damian's Linean Venture

The Moneywise Radio Show and Podcast Monday, March 3rd BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Guys" podcast call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com facebook: Moneywise_Wealth_Management instagram: MoneywiseWealthManagement Guest: Jim Damian, Founder & Principal Consultant for Linean website: https://linean.com/

• 0:00Speaker 00

  From the padded radio room off Stockdale Highway, here is Money Wise. Call or text in at 661-396-1000.

• 0:09Speaker 01

  I need a dollar, dollar, dollar, that's what I need. Hey, hey. Well, I need a dollar, dollar, dollar, that's what I need. Hey, hey. Said I need a dollar, dollar, dollar, that's what I need. And if I share with you my story, would you share your dollar with me?

• 0:29Speaker 02

  Securities offered through SEF Securities, Inc., member FINRA/SIPC. Investment advisory services offered through SEF Investment Advisors, Inc., SEF Securities, Inc., and Money Wise Wealth Management are independently owned and operated.

• 0:39Speaker 00

  Now, let's start the Money Wise Show.

• 0:42Speaker 03

  Welcome to the Money Wise Show. We are live from the Gero Ellis padded radio room off Stockdale Highway on ESPN Bakersfield, 1230 a.m., 101.1 FM, and always streaming at MoneyWiseGuys.com. You can text into the show 24 hours a day at 661-396-1000. Today, we're your hosts. I'm Sharad Waite and?

• 1:03Speaker 04

  I'm Sammy Abiyawie.

• 1:04Speaker 03

  Sammy Abiyawie. It's great being on the show with you.

• 1:07Speaker 04

  Yeah, I'm excited for today.

• 1:09Speaker 03

  I am, too. We have a great guest coming up, Jim Damian. He has been a local business owner and entrepreneur and even worked for the government for a little while.

• 1:21Speaker 04

  A government official as well.

• 1:22Speaker 03

  He's done it all, private and public service, and we're really excited to have Jim on the show, talk about his new venture and what's going on. So you want to stay tuned for that.

• 1:32Speaker 04

  I have some big questions for him, such as, how do you pronounce the name of the company?

• 1:36Speaker 03

  Starting with that. But Sammy, let's answer some questions first.

• 1:41Speaker 04

  Yes, we have a listener question. With the IRS layoffs, is it going to take longer to get our tax returns this year?

• 1:49Speaker 03

  The answer to that is probably yes. It could. And that's because there was layoffs announced for the IRS. Approximately 6,000 to 7,000 employees have been laid off. That's about 7% of its workforce, at least the workforce that's from its peak.

• 2:10Speaker 03

  So, you know, I actually don't know how much impact it will be. I think on certain filers, it could have an impact on your tax return depending on how you file. So for example, if you want to mitigate potential delays, you may want to consider e-filing, which is generally faster than paper returns. But I mean, how many people do paper returns, Sammy?

• 2:31Speaker 04

  My father-in-law.

• 2:32Speaker 03

  Oh, that's right.

• 2:35Speaker 03

  Those above a certain age, maybe, but man, my, you know, my father-in-law used to file by paper, too. He just insisted on it.

• 2:43Speaker 04

  Paper and pencil and this and that. I'm telling him, hey, go, go, go see, we've got some CPA friends. Go see Tom Maxwell, go see Patrick Hoffman, go see John Duff. There's plenty of good CPAs in our town. We're very lucky.

• 2:56Speaker 03

  They'll happy, they'll be happy to do it for you. Other, other sort of advice, if you're looking at eliminating as much as possible, the probability of a delayed return, certainly opt for direct deposit. That can definitely speed things up. You don't want to get, deal with the mail and the paper check. The post office is also losing people, so avoid that. And then, you know, just make sure that things are complete in your return. The good news is the services that are provided to us to file our returns are just getting better and better.

• 3:29Speaker 04

  That's correct. That's correct. And also, some of the electronics forms and online presence, even for the IRS itself, are pretty self-explanatory. And I'd rather do that versus the paper because that just adds on to human mistakes that you can make.

• 3:47Speaker 03

  So, it's so counterintuitive. I take, take for example, I'm sure you've done, done this, Sammy, in a grocery store, standing in line, somebody's writing out a check, like paying for their groceries, they're writing the check out, they're writing it in their little check ledger, they're handing their check. And sometimes people do that because they think there's this sense of security by, by doing that or paying things by check.

• 4:10Speaker 04

  There's more, there is more fraud that could take place through a check versus anything else.

• 4:14Speaker 03

  Yeah.

• 4:15Speaker 04

  There's a reason why we carry credit cards and debit cards.

• 4:19Speaker 03

  Right.

• 4:20Speaker 04

  And, and, and that's because it's more. You're more prone to get hacked via check versus a debit or a credit card.

• 4:28Speaker 03

  Right.

• 4:29Speaker 04

  As an ex-banker, I know that. Most of the fraud happen through checks, in fact.

• 4:33Speaker 03

  Yeah, it doesn't surprise me. What's the problem is that something that's new, like a new service, that's electronic payments, because it's new, then people are just nervous about it.

• 4:42Speaker 04

  Yeah.

• 4:42Speaker 03

  But most of these cards, especially credit cards, they have fraud protection.

• 4:46Speaker 04

  That's right.

• 4:47Speaker 03

  I guess there's protection on checks too, but it probably takes a little bit more to verify whatever fraud happened with a paper check.

• 4:54Speaker 04

  And the timing and the regulation paperwork that needs to be filed within a certain period of time, yes, it's a little bit more involved than your regular credit card fraud or debit card fraud.

• 5:06Speaker 03

  I wanted to look up the rates. The listener question asking about a delay potential for the return reminded me of the audits, you know, the fact that we have so many of these IRS workers being laid off. How much is that going to change audits?

• 5:23Speaker 04

  Yeah.

• 5:23Speaker 03

  And in fact, some of the layoffs were within the audit department.

• 5:26Speaker 04

  Well, that's a great question, and I'm actually excited to hear what you want to say, because what came to my mind was the 80,000 IRS agents we were supposed to be hiring.

• 5:38Speaker 03

  Right.

• 5:38Speaker 04

  To help a lot of this. Now we are actually letting them go. So I'm interested to hear.

• 5:43Speaker 03

  My understanding of the new 80,000 agents that were going to be hired, they were on track. So I don't know how many they, I think 20 or 30,000 they had hired before now it's been frozen. And there was a lot of that money was supposed to go towards updating the software, which maybe we don't need that many people working the IRS if we have better programs or better software. But get this, Sammy, the current audit rates, at least from the latest information we have from the IRS, it's approximately 0.38% of individual tax returns will be audited. So it's, you know, just under four audits per 1,000 returns

• 6:24Speaker 03

  filed. That seems really, really low. If you look at it over time, though, it's actually a little bit higher than it was in 2010. In 2010, it was 0.25. Instead of 0.38, it was 0.25 of returns were audited.

• 6:41Speaker 04

  Some people might argue, Sherrod, that that's 0.4% too many.

• 6:48Speaker 03

  Really?

• 6:48Speaker 04

  Yeah, we should not have an IRS.

• 6:50Speaker 03

  Yeah.

• 6:51Speaker 04

  In the first place, we should not be paying taxes in the first place.

• 6:54Speaker 03

  Then what would pay for, you know, who's going to pay our military?

• 6:58Speaker 04

  We, we, we need to figure out something different. I'm just saying, I'm not saying me.

• 7:03Speaker 03

  I've, I've heard that too.

• 7:04Speaker 04

  I'm willing, I'm wanting to, to pay my fair share so I can, because I enjoy the freeways, especially here in Southern California. I enjoy the parks, I enjoy the infrastructure, I really, really do. But some people, some people think that, hey, that's 0.4%. Too many.

• 7:19Speaker 03

  I mean, you can say, don't audit anything, I never want any returns ever to be audited. The IRS has actually given some guidance about this and you can read it IRS.gov, but they, IRS has directed its focus informants most, mostly towards high income individuals, large corporations, and trying to avoid audits on those that earn less than $400,000 a year. If you look at the statistics, yeah. We're all right, Sammy. If you look at the statistics of those who make over 10 million, it has decreased over the years, over the last 10 years, but it's still close to 10%. So you have pretty much higher odds.

• 8:02Speaker 04

  That's right.

• 8:02Speaker 03

  If you make, that's a 10 million.

• 8:04Speaker 04

  Yeah.

• 8:05Speaker 03

  A range.

• 8:06Speaker 04

  I'm going to make sure I don't, I don't.

• 8:08Speaker 03

  There you go.

• 8:08Speaker 04

  Get to that threshold, I'm going to remain in that $9 million share.

• 8:12Speaker 03

  You know, it's funny that you say that, but there's still a vast misconception in our country about our marginal tax rate and how the marginal rate works, because some people feel like, well, I don't want to make above a certain amount because then it'll put me into a new tax bracket. What they're thinking is, oh, once I make $1 more, let's say it's than 100,000, everything is going to be taxed at that.

• 8:35Speaker 04

  No.

• 8:36Speaker 03

  And that's just, that's just not how it works.

• 8:37Speaker 04

  That's not how it works, no, that I figured.

• 8:39Speaker 03

  But there are, I'm guessing millions of people out there that are legit, like trying to not make more money because they think they'll have to pay a way more in taxes. So it's like they're, they're cutting off their nose to spite their face.

• 8:56Speaker 04

  Now, now, here, here's the thing. I mean, maybe you, you want to talk about this later, but here's where you need a good financial advisor. Because if you're making that money, talk to a financial advisor, there, there are ways for you to still make good money and find ways to invest in a way that you can manage your tax liability.

• 9:15Speaker 03

  You know, you brought up financial advisors. Let's talk about the industry that we work in.

• 9:21Speaker 04

  Uh huh.

• 9:22Speaker 03

  This was shocking to me. I think it was a Forbes article. Talking about the shortage in the country of financial advisors. I've always had, before reading this, I thought, well, no, there's plenty of us out there. You know, it turns out that countrywide, there's a shortage of over 100,000 advisors. So basically, the problem is similar to other professional industries where we're aging out. And we're, not only are we financial advisors getting older, but the population that really depends on financial advisors also getting older. So 38% of today's workforce is expected to retire within the next 10 years, almost half.

• 10:07Speaker 04

  So there's a crisis in the horizon coming, is what I'm hearing you say about financial advisors. This is something I faced when I was in banking.

• 10:15Speaker 03

  Nobody going into banking.

• 10:16Speaker 04

  No, it's just not that sexy thing that people, you know, graduate from college and you want to go and be a banker, commercial banker, retail banker, whatever. It sounds like we're facing the same thing here.

• 10:27Speaker 03

  Yes.

• 10:28Speaker 04

  In this industry as well, which creates good, great opportunities for people that are looking for a career. Because this could be a career. This is definitely a career. Especially here at MoneyWise, you can say, we have you, we have Chris Pelster, who's been doing this for 20 plus years, same thing for you.

• 10:44Speaker 03

  Yeah.

• 10:45Speaker 04

  This could be a very good rewarding career, not just from a monetary standpoint, but the feeling that you get when you sit with a client and eventually you figure out a way to help them retire and maintain a special cash flow or a certain lifestyle. And the way they leave your office at the end of that meeting is just so rewarding, in my opinion.

• 11:06Speaker 03

  Yeah, it's a very rewarding career. I would, I would recommend it for sure. But I think it has a perception of being like, like the movies, basically, like a stockbroker in the movies where you're cold calling. And I think that's still there.

• 11:23Speaker 04

  Yes.

• 11:23Speaker 03

  In fact, I know there's one of the companies. He's in town who recruits heavily from the colleges and university or local university and colleges. And essentially, that's what they do with these kids is they

• 11:35Speaker 04

  They burn them out.

• 11:36Speaker 03

  They burn them out, but they say, here, here's a piece of paper, write down the hundred people you know. And the hundred and the people that they know, and then you start calling them and you start selling them life insurance. Like you just start selling them stuff rather than, you know, you're not even, you're not a, you're not a financial advisor. That you're just a salesperson.

• 11:54Speaker 04

  That's right. No, there's, see, and I want the listeners to, to understand that there's a difference between be, being a salesperson, which this industry has some aspects of sales. Let, don't get me wrong, but you don't have to be that. No offense to used car sales, salespeople, you don't have to be that aggressive. No. You just have to understand some aspects of sales because it helps. But eventually you're actually sitting in front of somebody that's gonna, and you're gonna affect their life on the long run.

• 12:26Speaker 03

  Yeah.

• 12:27Speaker 04

  And that's the effect you're having.

• 12:29Speaker 03

  I think it brings up another point, which is the perception that financial advisors, and not only are they salespeople, but they're, they're just like transactional paper, paper pushers. When really the most of the people, the largest demographic of people that need financial advice are older. They're, they're in, they're in retirement, even sometimes in the late stages of retirement, which is everybody needs that neutral third party to help them, especially as we age, because we all start to lose our cognitive abilities. We start to lose confidence in making decisions. And then also we start to worry about our significant other in our family. Like what happens if I'm not here?

• 13:13Speaker 04

  That's right.

• 13:13Speaker 03

  You know, who's gonna make sure that like, like things kind of continue on and understand what my goals are with the, the wealth that I've, that I've accumulated. And that's where financial advisors really like, I mean, I can't tell you, we've turned away a lot of business at MoneyWise. Because we have somebody coming in saying, basically wanting us to just make transactions for. For them and and and we're like, well, you you go why you don't need us to do that. You can go online. You can have a bot do that for you for almost nothing like that's not what we're doing.

• 13:45Speaker 04

  When you said transactional, I started looking at our business and how we do things here at MoneyWise and how there are clients that have been here for as long as you have.

• 13:54Speaker 03

  Yeah.

• 13:54Speaker 04

  Sherrod, they started with you when you first founded the company.

• 13:58Speaker 03

  Yep.

• 13:59Speaker 04

  Right. And they're still here.

• 14:00Speaker 03

  And now they're kids or they're grandkids.

• 14:02Speaker 04

  Yes, that's what I was about to say is that when when they get to to that age of retirement, or maybe sometimes they even pass, their kids are become our clients.

• 14:10Speaker 03

  Right.

• 14:11Speaker 04

  So it's not definitely not transactional. Our business model here at MoneyWise definitely is not transactional, and I truly cherish that.

• 14:19Speaker 03

  The number of affluent households, which is considered a home that has more than $500,000 in investable assets, is projected to grow almost 5% annually, which is far outpacing the general population growth. It's it's.

• 14:34Speaker 04

  So so I'm going to ask you a question now. Here I am. I'm graduating from college. I'm thinking about careers. What do I need to do to become a financial advisor?

• 14:44Speaker 03

  Well, I mean, the first thing is to I would recommend you talk to other financial advisors because there is a broader range of of us and what we do, whether you're you you work for a company that's your that's maybe captive, where there can be some advantages to that because they've got their whole ecosystem is all built in, their trainings are very dialed in. So you can get some really good training and experience that way. It's you do it. It does take a few years to learn how to do it, especially if you're young. Like, you know, you how do you advise somebody that's 30, 40 years older than you when you're just this, you know, 20 something year old kid? You do need to go through the go through the the the time and the effort

• 15:28Speaker 03

  to just learn how the world works, you know, how how things are are paid for. It's it's beyond just investments, and I I believe that our industry also is moving much towards that that role where we're not just, you know, giving investment advice, we're giving financial advice. More holistic approach to your to your home. So you know, talk to different financial advisors in different areas and find out what they how they got there and what what their day looks like. And then there are, you know, there's there's licensing that you have to go through. That's that's another kind of gatekeeper for us for our industry. You have to go through these, you know, several tests and exams to to have

• 16:12Speaker 03

  proof that you have a basic knowledge of some of the investment world. And then Certified Financial Planner, I think, is the still the gold standard for credentials, for the certificates, and that's a that's a great a great certificate and to have because you're covering all the different areas of financial advising, estate planning, taxes. All of those things are all covered. So, you know, a lot of a lot, there's some fear, I think, with young people because they they think AI is going to come in and change everything. When in reality, I think we got a ways to go and the the studies prove

• 16:51Speaker 03

  that families are still willing to pay much more for human advice than just relying on on AI or some technology. So, you know, I'm very excited for our industry in the future. It could be a little scary, though. We could get pretty busy. We don't get more more young people coming into the business. But, you know, very fascinating about that shortage that we're having. All right, we're going to take a break now. Very excited to have our guest, Jim Damian. He's a local entrepreneur, business owner, all around good guy. We're going to have him on right after this break. Stick around.

• 17:23Speaker 00

  Money Wise Wealth Management is the only locally owned, independent firm that uses a comprehensive wealth, tax, and estate approach, working closely with a highly trusted CPA and attorney. For information on how Money Wise can help you invest and plan for your future, call 661-847-1000. That's 661-847-1000.

• 17:50Speaker 03

  Welcome back. We're the Money Wise Show. Thanks so much for tuning in. I'm Jared Waite here with Sammy Abiyawi. We're your hosts. We're joined right now by our guest, Jim Damian. He is a local business owner, entrepreneur, and just, just good dude. So happy to have you on the show. Thanks, Jim.

• 18:05Speaker 05

  Jared, thanks for having me. I appreciate it. Sammy, good to see you both.

• 18:08Speaker 04

  Yes. We're excited to have you today.

• 18:10Speaker 03

  Yeah, we, we, we didn't know how to pronounce the name of your new business, but you said it straight. Linean.

• 18:16Speaker 05

  Whenever, the sign of a good business is when you cannot pronounce the name. I was gonna call it like Money Wise or Techno Wise, but they were, I was taken, so I had to go with obscure name, Linean.

• 18:25Speaker 03

  So Linean, and I went to your website, linean.com, didn't learn a whole lot about it, so that's why we wanted to have you on. Like, tell us what's, what's, what is this?

• 18:37Speaker 05

  Well, I appreciate you having me, and it's a little vague on that site because we're just starting out. You know, my first entrepreneurial endeavor was kind of like Ready, Fire, Aim, right? And so we were, so this is, we're building the company with a little more intentionality, and it's all about, you know, listening to the customer base, and we're focused on really a couple of things. One, business intelligence, right? Management of data, big data, and artificial intelligence. And so the word Linean, it's a play on the Latin word for alignment, because we have to align our outcomes, our people, our process with these new technologies that we're all living in. So that's what we're set out to do.

• 19:13Speaker 03

  Yeah, so that's a big area. We're talking about AI and big data. Are you talking about working with small, medium-sized, large businesses? What's your demographic?

• 19:25Speaker 05

  You know, right now, we've, we've got a blend, right? So we want to be focused on people in Kern County. We want to help them adopt these great technologies, maximize their impact on their business, and then we'll see where it goes. But that's kind of like the first year is a lot of that kind of work and helping people prepare for what's coming.

• 19:44Speaker 03

  Yeah, there is so much hype around AI. Just this morning, we had a staff meeting, and I asked some of the, some of our staff, how many of you are using, you know, ChatGPT or using?

• 19:58Speaker 03

  This, you know, a large language model to help, you know, organize some stuff and a good majority of us are using it. I am blown away. I'm absolutely blown away. Right, right when it came out, really, I think. OpenAI was kind of the one of the leaders a couple of years ago. Has it been two or three years now?

• 20:17Speaker 05

  It's been about two years, yeah.

• 20:18Speaker 03

  And I was just like, oh, this is it. This is it. Like, heaven sent. Um, yes, and it just can each, each iteration just gets. Way, way better. So, uh, so then, um, but it is still, it's still, it's, it's just like when the internet. Came out. This is how I, I view it or old enough to remember it well.

• 20:41Speaker 00

  We're in the chat room phase.

• 20:43Speaker 03

  We're, yeah, we're in that, yeah, the message, message board phase, the AOL phase. Well, tell us where, where, where we're at with AI.

• 20:54Speaker 05

  I think it's a good frame of reference, right? It, it, it is as big, uh, as the dot com boom, right? Where we were leaving the grocery stores and you'd see those AOL CDs and you're like, oh, I, I take this home and put it in and then I get on this thing called the web. Wow. But I think it's bigger. Um, it'll take some time to mature, but I, I equate it, I'm equating it now with. The invention of the indoor light bulb. I, I think it's that big. I think over the next few years, it'll change. Every element of society, the way, you know, indoor electricity and the light bulb has.

• 21:27Speaker 03

  Yes.

• 21:27Speaker 05

  So I, I think that's the paradigm shift we're going to be facing. It'll take time and everything will be fine. I don't, I don't think we're headed for doomsday personally.

• 21:36Speaker 03

  Yeah.

• 21:36Speaker 05

  But, um, it, it's as big as, uh, the electric light bulb.

• 21:40Speaker 03

  That, that's a bold claim. I, I guess AI is such a broad term, like what, what is AI? Cause it's been around for a long time, but we're just now equating AI, I think, to, to these chatbots, basically.

• 21:57Speaker 05

  Well, to chatbots, I mean, the technology of what it is, right? I mean, these companies have spent all this time and money. Reading the entirety of the human language, right? That they could get their hands on from news sites, the websites, the books. And so what they've invented is, if you think about it, it's, it's, it's kind of simple. It's, it's really the world's greatest prediction engine. It can predict the next letter, the next word, the next sentence, based on what you input into this bot. Because it is, it's read the entirety of the internet lots and lots of times. So these large language models are being trained to predict things and they're quite accurate. You know, not the future, but they're quite accurate at predicting the way a sentence should look, based on what you typed in previously.

• 22:42Speaker 05

  So it's, it's, it's, but it's moving now beyond just like, it was a cool party trick, right? Where you could type that in or make an image, right? Everybody's kind of doing that. Now, how to scale this to actually use it to drive efficiency? That's where people are starting to get interested. It's no longer just a parlor trick, right?

• 22:57Speaker 03

  Right, yeah. So what this is the business opportunity I'm sure, I'm sure you're seeing.

• 23:03Speaker 05

  Yeah, no, and it's almost so big, you kind of, it's like, that's one of the reasons why we're starting out pretty slow is we want to figure out how to focus. Like, where is the real need in Kern County? A lot of it is training with huge opportunities and huge uptake and people going, just come help train my staff on how to and not to use our chat bot of choice.

• 23:23Speaker 03

  Yes.

• 23:23Speaker 05

  Right?

• 23:24Speaker 03

  Right, yeah. I know there's, I mean, I think there's still some concerns about privacy and what it can, where, what is this black box that everything is going into?

• 23:35Speaker 05

  Yeah, and, and, and you have to know what your subscription agreement looks like, right? And, and I think people need to lean into, we're advising our clients to, you know, subscribe to a paid version that all the staff use because in most of the platforms, if you subscribe to a paid version, they're not using your data to train the model, right? So there's a little more privacy. I mean, at the end of the day, it's in the cloud and, you know, that we have some control over it. But being aware of what the-

• 24:03Speaker 05

  The companies have agreed to, right? They've agreed to things, so you know, you want to hold them to those agreements.

• 24:10Speaker 03

  Yeah, so maybe, can you share a little bit more about what what Linean does? Or what could do for a business?

• 24:19Speaker 05

  Sure, yeah, I mean, I'll give you an example of we're working with a nonprofit. We have a partnership with a company called Kern Futures and it's kind of a collaborative that we're working on for a local organization that's been on the show several times, Kern Dance Alliance.

• 24:34Speaker 03

  Oh, yeah.

• 24:35Speaker 05

  Right, so they have huge amounts of data and they, as part of their commitment to the state of California, they've, they need to aggregate and display this data. Well, using traditional historical tools, I mean, that's a long process with databases and and and data entry and well, we're using artificial intelligence to empower KDA with a new tool that gives real time data and aggregation using AI about the efficacy of their programs. And so we're able to do that very quickly. And that's a good example of a whole new product that we could deliver for the good of the county and for the good of KDA in a very novel way, totally, you know, using just a totally different toolset.

• 25:17Speaker 03

  Yeah, right, which is very, very interesting. We have, I'm thinking of, you know, just our business, we have our, how big is our procedures manual, Sammy?

• 25:31Speaker 04

  It's keep, I mean.

• 25:33Speaker 05

  Wait, Sammy, have you read that?

• 25:35Speaker 03

  Sammy wrote it.

• 25:36Speaker 05

  You wrote it, he wrote it.

• 25:38Speaker 04

  Using, using some of this AI.

• 25:40Speaker 05

  There you go, there you go.

• 25:41Speaker 04

  No, I mean, when, when, when I first came to MoneyWise, we had a bunch of things that we wanted to put in place, efficiency wise. And, and frankly, I did not, I never heard or used ChatGPT two and a half years ago or two years ago when I first came and Jared introduced me to it. And then I, he said, hey, just get the paid version and see what. Well, a project that would take you ten hours now takes you an hour or less sometimes, as long as you are very good at, and I'm learning, still learning this, how to input the right questions and asking it to be very accurate and just keep, I mean, it's, it's just amazing. I've helped my brother write a business plan in English, translated it

• 26:26Speaker 04

  for him into French within a couple of hours.

• 26:30Speaker 05

  Yeah.

• 26:30Speaker 04

  Using, using AI.

• 26:32Speaker 05

  Yeah, it's a whole new world. I mean, it really is a whole new world, and that's a great example of how people are using it.

• 26:37Speaker 04

  Yeah.

• 26:37Speaker 05

  And, and, and now, like, the next thing that we're working on is, okay, you know, let's build a customized chatbot that is maybe built on ChatGPT, but references your policy manual.

• 26:49Speaker 04

  That's it I'm talking about.

• 26:50Speaker 05

  Cause like, hey, can I do this? Well, if you could Google search and find, you know, what your regulatory bodies say you can or can't do, or even just, you know, how many vacation days I am allowed to take in a year.

• 27:02Speaker 04

  Right.

• 27:02Speaker 05

  Imagine, and this is something we're working on with clients now, having your collection of data available in a private customized chatbot where I can ask, hey, what, what's the deal with, you know, if I work past six PM again?

• 27:15Speaker 04

  Right.

• 27:15Speaker 05

  I forgot.

• 27:16Speaker 04

  Right.

• 27:16Speaker 05

  Right? You don't have to send an email, you just chatbot it.

• 27:19Speaker 04

  Right.

• 27:19Speaker 05

  Right? Using a large language model augmented by your SOP manual.

• 27:23Speaker 04

  That's right. Yeah.

• 27:24Speaker 05

  Awesome.

• 27:25Speaker 04

  It's so great.

• 27:26Speaker 05

  And you're ready because you've done the work. And a lot of the things we're working on with our customers now is getting ready to adopt it because if you don't have good documentation, you don't have your data squared away, you don't have your basic systems integrated, you're not ready.

• 27:38Speaker 04

  Yeah.

• 27:38Speaker 05

  So getting ready for the AI revolution is a big part of what companies in Kern County are doing.

• 27:43Speaker 04

  Yeah.

• 27:44Speaker 05

  You guys are like leading the way. Sammy, thanks to you, man.

• 27:46Speaker 04

  So, so you said, you, you, you said two things that are very interesting to me. You said individuals and companies. So, so companies getting the, the processes, getting the systems in place. Coupled with the training of individuals, which is, I think, very, very important. And making sure that the whole staff of the company is aware, or at least trained, to use the tool. Because I, I believe that it's not coming to take jobs away. The people that are going to lose their jobs are the people that are not using AI.

• 28:17Speaker 05

  Yeah.

• 28:17Speaker 04

  To their advantage, in my opinion.

• 28:18Speaker 05

  Yeah.

• 28:18Speaker 04

  Would you agree with that?

• 28:19Speaker 05

  I agree. A good friend of the show and of mine, a guy named Darren Alexander said, AI is not going to take your job, but a really creative person using AI might.

• 28:29Speaker 04

  Yeah.

• 28:30Speaker 05

  So, so companies need to be aware. And I think one of the things that's happening now, I mean, Sam, you said, hey, it used to take me 10 hours. I did this in an hour. I had nine productive hours. Well, what we're seeing is there's a lot of people who go, well, I'm not going to say I use this thing. I've reclaimed half my day and I'm just as productive, but. So, how do companies reward and incentivize that time-saving without going, way to go, Johnny. Here's more work.

• 28:56Speaker 03

  Yeah.

• 28:56Speaker 05

  Like, the equation, I mean, the old school management tactics, if they're not gone because of the pandemic, man, they are really better be gone because of AI, or else you just get chewed up and spit out as an organization.

• 29:07Speaker 03

  Yeah, 100%. And we're joined by Jim Damian. He is owner of Linean and also has been a business owner here in town. And your, your previous, your last gig was working for the county as the economic, what was it, title?

• 29:24Speaker 05

  I, I forgot. It's been like two months.

• 29:26Speaker 03

  Two months?

• 29:27Speaker 05

  No, Chief Economic Development Officer. Working with the county was a, a great joy.

• 29:32Speaker 03

  Yeah, well, tell us about that. How was that gig?

• 29:34Speaker 04

  And, and, and did Linean come from working for the government idea?

• 29:39Speaker 05

  You know, I don't, it didn't, it's hard to say. I, I don't know where the idea came from. I mean, it just was kind of there and I just ended up activating it, I suppose, but, um.

• 29:51Speaker 05

  Working for the county was great. I mean, the county of Kern's an awesome organization. It's 9,000 people strong, right? It's a $4.4 billion organization. So it was a real joy to be a member of that team. With government, we are known for being rigorous. We're not known for speed all the time. That's a feature, not a bug. Efficiency, you know, sometimes, look, read the papers. Right? Everybody now knows efficiency matters. So it was a very interesting time to be part of the county. And I loved it, learned a lot, feel like I added some value. But I turned to the private sector, I said, what do we need? What does Kern County need? It's nice to have people that work for the government. It's important, we need these people.

• 30:34Speaker 05

  And the 9,000 of my former colleagues are, you know, vastly, by and large, are doing great work. But I feel like what Kern County needed was some more private sector opportunity, some more jobs, some more good jobs, some more technology jobs. So that's why I wanted to come back out into the private sector and try and rebuild that, build those opportunities for people that want to be in the AI revolution, to be able to have a place locally to do that.

• 31:02Speaker 03

  Yeah, and so there's nobody else doing this?

• 31:05Speaker 05

  Oh, everybody's doing, are you kidding me? There's like thousands, you know, there's probably 50, you know, AI companies in Kern County. And I mean, I think at the end of, you know, in 24 months, every company will be, it's like, it's like the early days, say, well, we're a technology company. What does that even mean? I mean, everyone's in tech, look at the technology in this room. It's more than they had to put a man on the moon.

• 31:22Speaker 03

  Yeah.

• 31:23Speaker 05

  Right? At this station. So everybody's using AI. But yeah, we'd like to think we have a special, you know, what we offer is a little bit unique and a little bit special, sure.

• 31:30Speaker 03

  Well, it's not your first time to the rodeo. You founded Streia, is that right?

• 31:35Speaker 05

  That's right.

• 31:35Speaker 03

  And built that company, tech company, up from the ground up.

• 31:39Speaker 05

  That's right.

• 31:40Speaker 03

  And then Bitwise had their way with it. I'm sure you've been following the outcome of these people at Bitwise.

• 31:48Speaker 05

  Of who?

• 31:50Speaker 05

  Sure, sure, I've never heard of these people. Yes, no.

• 31:52Speaker 03

  I was just shocked, it was just like, last week or week before last, a couple more people came out, you know, I think they pled guilty to basically wire fraud or money laundering.

• 32:02Speaker 05

  Yeah, this thing's got a long tail. And there's a lot of people who are caught up in either as victims or, you know, there's a few perpetrators out there probably. But yeah, what a terrible experience for.

• 32:18Speaker 05

  A number of companies and for our whole community, but I think that we've learned from that. And, you know, my hope is that entrepreneurs in all cities around the world, especially in America, and especially in California, look at the behavior and go, okay, that's not the right way to do it. There's no shortcut to success. It's three yards and a cloud of dust, over and over and over and over again. And then if you're really lucky, you know, you can survive. And if you're really, really lucky, you can, you know, do really well. But this idea that it's get rich quick, or the rules have changed, the rules have not changed. Creativity, honesty, ethics are still what power successful business, whether it's AI or not. And I think this was just another reminder, not our first in Kern County,

• 33:03Speaker 05

  hopefully our last, but I am, I get nervous because you see new business models pop up and it's, you know, there are some that you go, wait a second, walk me through that again. But, you know, we all, we all, we are optimistic and eager, especially those of us who are entrepreneurs.

• 33:17Speaker 03

  Well, I'm curious how you, how it feels to be starting up a business again, and sort of how you're able to take the lessons learned from, from Stria now into Linean.

• 33:31Speaker 05

  I love it. I'm an entrepreneur. I love starting another company. I feel like I'm a little older, maybe a tiny bit wiser. So my pace is going to be a little bit more methodical. So I were not, you know, we don't have 50 customers. We have like a real small number to start because we want to refine and perfect our offering. So, you know, it's the second, it's a second chapter of entrepreneurship from you and the pace will be much more deliberate.

• 33:56Speaker 03

  You sound like Amazon or Blue Origins. I don't know if you're familiar with this, but Blue Origin and SpaceX have two very vastly different, polar opposite strategies. SpaceX is just, let's, let's go full bore. We want, you know, we want to fail so that we can keep going and we don't care how many rockets we blow up. We're just going to do this. And Blue Origin, totally different. You know, it's just slow and steady and, and very methodical about it. It's yet to be seen, I think. So I mean, SpaceX is leading so far, but it's yet to be seen sort of long-term how this plays out. It's sort, you're sort of, kind of. Yeah, I don't know. It sounds like you're doing it different.

• 34:35Speaker 05

  Well, I'm trying to. I love the comparison, by the way. Amazon, SpaceX, Linean. That's good, baby. I love it, Sheri. No, but I think, I think, and those are two, you know, we, those are, in the, in the history of companies in the world, those are rounding errors, right? They're so big, so monolithic, but we can learn from their methods. What's planning? What is the, what is the benefit of failing fast? There's some benefits. What are the benefits of planning? And so I think entrepreneurs who are paying attention get two different models, two different schools of thought.

• 35:05Speaker 03

  Yeah.

• 35:05Speaker 05

  And that's really valuable. And it's cool that they're so open with many, both those companies are very open with what works, what doesn't, and it's, it's kind of fun to see.

• 35:12Speaker 03

  Well, when I, I look back on my beginning years of starting MoneyWise, and I think, oh, my gosh, I was so naive. Like, I had no clue. I thought I was okay at the time, but now I look back, I was like, I was an idiot. Like, what was, I didn't know at all, but I don't know that I would have done it if I would have known. So, like, you know, coming back to, you know, starting up again, being a little older, how do you overcome the problem, the issues that can, that come, come from being maybe conservative?

• 35:43Speaker 05

  I, I think the, the biggest lesson, you know, in chapter one of entrepreneurial journey is, what can you control and what can you not control? And I spent a lot of time worrying about things I could not control and trying to control things that I really couldn't. And so not having to worry about those kinds of things is a relief. But who would have started a company if you knew the, the rates, right?

• 36:05Speaker 03

  Right.

• 36:05Speaker 05

  I mean, it's like that, I, I used, I remember, I don't know if you guys ever saw when you were kids, that Bugs Bunny, you know, Bugs Bunny cartoon, and he walked out off a cliff, and he could walk on the air. But then somebody threw him a book and it said gravity, and as soon as he read the book, he could no longer walk on the air. And I think entrepreneurship's like that. If you really know the statistics about failure rates and hours worked and all that, I mean, you might not do it.

• 36:28Speaker 03

  Right.

• 36:28Speaker 05

  It's kind of good. Ignorance is kind of bliss when you're starting out the first, the first chapter, right?

• 36:33Speaker 03

  Oh, totally agree. We're, we're going through this right now, right, Sammy, with the restaurant? And we have a restaurant that'll be opening up at the Woolworths building, and neither of us have ever.

• 36:42Speaker 04

  Yeah.

• 36:43Speaker 03

  We don't know anything.

• 36:43Speaker 04

  I mean, it's one of the things I think your brother Matt and I have always talked about, hey, we want to flip burgers. We want to do this. We want to do that. It's one of my passions. I love feeding people. I love cooking, but we've never ran a restaurant.

• 36:54Speaker 03

  No, and you look at the statistics of restaurants that fail and just, you know, recently like one out of five restaurants have gone out of business in the last few years. It's like, it seems like the worst business to get into. I have to fight just like this, the pessimism, you know, that is there and be like, well, I, I just know this, this could fail. I just know this could fail, but you know, we gotta just do our best and it's, uh, it's very challenging.

• 37:18Speaker 05

  Yeah. I mean, but what'd you say? One out of five fails?

• 37:21Speaker 03

  Yeah.

• 37:22Speaker 05

  Well, I mean, look, four out of five don't.

• 37:23Speaker 03

  Yeah.

• 37:23Speaker 05

  Right? You just gotta keep your eye on the, look, McDonald's wasn't in and out. I mean, you know, look at all the great places and, and I think people are going to flock to the, the new building, the World War's counter. I mean, I, I, I would be more worried about an overflow of great, happy customers than.

• 37:39Speaker 03

  I hope so.

• 37:40Speaker 05

  I'll be one of them and so will my brother, Sammy. It would be awesome.

• 37:43Speaker 00

  Me too.

• 37:43Speaker 04

  Yeah. So he's been doing really good though. Yeah.

• 37:45Speaker 03

  Uh, lastly, we got it. We got a, a comment question here from a listener and it says, this is interesting. What is your chat bot of choice? I personally like the chat GPT paid version, but I'm a little biased. Chatroom LOL. Do you remember when AOL would pack your mailbox with their programs for free 40 hours LOL?

• 38:05Speaker 03

  I do remember that.

• 38:06Speaker 05

  I remember that. We had, because even though we got free AOL, we lived in Tehachapi and you still had to pay by the minute for the dial up. And so I remember my dad getting a phone bill and he's like, I thought you guys said it was free. Like, yeah, the software's free, old man. But come on, dude. Anyway, but yeah, they're all great. I mean, um, the big ones, right? Chat GPT is the kind of the OG and great for a lot of things. Um, Gronk is good.

• 38:29Speaker 03

  Yeah, I guess it's coming up and coming Gronk.

• 38:31Speaker 05

  Yeah. Um, the other, uh, the Gemini, right? From Google is pretty great.

• 38:36Speaker 00

  Claude.

• 38:37Speaker 05

  I'm a big fan of Claude. Uh, Claude's new, the new engine from Anthropic is really special.

• 38:42Speaker 03

  Yeah.

• 38:42Speaker 05

  Um, so, and they'll be, they'll probably be new ones. I mean, look, we just had our, uh, awakening to, um,

• 38:48Speaker 03

  Deep Sea.

• 38:49Speaker 05

  Deep Sea.

• 38:50Speaker 03

  Yeah.

• 38:51Speaker 05

  Boy, you know, so I think we're, that's the thing about this technology. It's changing by the day. And so old, the old school rules of, well, we deploy it, we test it. And then a couple of years we upgrade. Those are over. You gotta be nimble. You gotta be quick. And the good thing is you can be, it doesn't cost an arm and a leg. Somebody's got. All, almost all the knowledge on the earth, written knowledge for 20 bucks a month.

• 39:13Speaker 03

  Yeah, right.

• 39:14Speaker 04

  That's amazing.

• 39:15Speaker 03

  I mean, and it can, it can.

• 39:16Speaker 05

  What can we do as a society?

• 39:18Speaker 04

  It's, it's, it's amazing. Like I'm in the car driving after I drop off my kid or even with my kid in the car. We talk to Chad GPT and ask questions and things like that. It's just an amazing tool.

• 39:27Speaker 03

  You can choose what accent you want to talk to you back. You can interrupt it and have like a real conversation. It's just phenomenal.

• 39:33Speaker 04

  Yeah, it's, it's amazing.

• 39:34Speaker 05

  Yeah, the, the, in this book I read by Kissinger and a couple of really smart people called Genesis. They talked about the idea that now the, the world's knowledge, you just have to wait for one in, you know, a million or 10 million people Edison, you know, to come along, right? They, they call them polymaths, right? These polymaths who could master multiple veins of intellect. You don't have to wait. You have it. It's on your phone. For this couple hundred dollar device, you have almost the entirety of the world's knowledge. Now it's missing creativity. It's missing ethics. It's missing wisdom. Uh, it's not thinking yet. It's still predicting, but golly, it sure seems great and it sure seems smart. I don't know. They say it's not thinking, but it sure pretends like it is, isn't it?

• 40:17Speaker 03

  Oh, for sure.

• 40:18Speaker 04

  For sure. Yes.

• 40:19Speaker 03

  It's really amazing.

• 40:20Speaker 04

  That's a very good way of putting it actually.

• 40:22Speaker 03

  Yeah.

• 40:22Speaker 04

  Just how Jim said it.

• 40:24Speaker 03

  Jim, thank you so much for coming on the show.

• 40:26Speaker 05

  Thanks for having me.

• 40:27Speaker 03

  Very interesting. Wish you the best of luck in your new venture. Uh, and, uh, we'll look forward to having you back, uh, soon after the robots take over. You'll have to come, come and protect us from it all.

• 40:37Speaker 05

  Have your chatbots send a note to my chatbot and we'll work it out. Thank you guys so much for having me.

• 40:42Speaker 03

  That's Jim Damian. He's our guest. We're money wise. We're going to take a quick break. We'll be back.

• 40:45Speaker 00

  Are you curious to learn more about how you can be money wise? Check out the money wise website at moneywiseguys.com to get more info.

• 41:05Speaker 03

  Welcome back to Money Wise. I'm Jared Waite here with Sammy Abiawi. Got some great messages and comments. Let's get to it, Sammy.

• 41:14Speaker 04

  Yes, sir. I see the 10-year Treasury yield that has dropped from about 5% to 4.40% since January. With the economy expected to slow down over the new next few years, do you think interest rates will keep falling? And when might we see mortgage rates drop enough to really help home buyers?

• 41:33Speaker 03

  It's a great question, Sammy. It's good to have you on here, too. You lived and died by interest rates for most of your career in banking. And I've always said that it's just, it's as difficult to predict where interest rates are going to go, if not more difficult than it is the stock market.

• 41:52Speaker 04

  I would agree with that. And frankly, I was expecting interest rates to start falling. And that's the expectation of what the feds had signaled in December. But now with the economic data I'm seeing, tariffs potentially, higher prices, inflation is still kind of like sticky a little bit. I'm hesitant to say where interest rates are going to go.

• 42:15Speaker 03

  Yeah. One of the reasons why it's harder to predict interest rates than the stock market is because over the long run, the stock market has only gone one direction. It's only gone up because it's building equity. It's building actual product or a service that you can see over time. Whereas interest rates are like a seesaw. There's two sides of it. And today's a perfect example where we saw rates go down. That means that on the other side of the seesaw is the price of those bonds go up. And why did the price go up? We had money moving away from the stock market and into the bond market, driving up the prices of bonds, which drives down the rate.

• 42:55Speaker 04

  That's right.

• 42:55Speaker 03

  So you have these two moving parts that are fair. And then it's like, you could be in a high interest rate environment, but we could have very low economic activity, kind of like what we saw during COVID. But there's so much disconnect. And if you're looking at predicting... Yes, the the overall feeling or the overall expectations that rates will come down. But like you said, Sammy, we thought they would come down last year way more than they did.

• 43:26Speaker 04

  And let's not, let's not forget that we had low interest rates for quite some time.

• 43:30Speaker 03

  Yeah, twenty years.

• 43:32Speaker 04

  Twenty years of low interest rates. So, so, so certain things have to readjust. Now, does, does it help? Especially real estate investors when we talk about, about this rates of treasuries and how it affects the 10 year rates for commercial and industrial lending? Yes. Right? But we're still, we have other things to think about. I mean, like, if, if this tariff things go up, like, takes place tomorrow, for instance, and, and, and the price of lumber goes up.

• 44:05Speaker 03

  Right.

• 44:05Speaker 04

  Coming from Canada, how is that going to affect our home building activity here in the US?

• 44:09Speaker 03

  Right, it's going to impact, it's going to hurt it.

• 44:11Speaker 04

  Yeah, it did in, in, in the first term of President Trump.

• 44:14Speaker 03

  Right.

• 44:15Speaker 04

  Right? Look at the, the home prices, look at the lumber prices and how it was actually sticky for quite some time. It did not go down right away. So to, to your point, it is not just, hey, we want to reduce them now. There's a lot of levers that get pushed and sometimes without somebody pushing them. It's just how the market, like you always say, shared. The market adjusts itself.

• 44:38Speaker 03

  Yeah, yeah. And, and interest rates are just at the, at the cutting edge of that. You have most people thinking about, I think they're thinking about mortgage rates when they're thinking about interest rates.

• 44:50Speaker 04

  Yeah, which is different. You know, mortgage rates, I think, where, where are we right now? In the sixes?

• 44:55Speaker 03

  Yeah, six and a half.

• 44:56Speaker 04

  And, and, and by the way, it's lower than, than it was, I think, 30 days ago or so.

• 45:01Speaker 03

  Yeah.

• 45:02Speaker 04

  But for, for us to see an impact on home buying, on the activity of home buying and increasing that, that, the home buying rate. I think in my opinion, those rates need to be in the fives. You know, when I first bought my house 24 years ago, my first house, I was very happy with five, five and a half.

• 45:19Speaker 03

  Oh, yeah.

• 45:20Speaker 04

  Five and a quarter, five and a half. I was, I was a happy camper.

• 45:23Speaker 03

  Right, right.

• 45:24Speaker 04

  Right? And, and then rates went down. Some people that I know, friends in my circle, they have two percents, two and a quarter, two and a half percent for their 10 and 15 year loans.

• 45:34Speaker 03

  Right.

• 45:34Speaker 04

  Mortgage loans, that is.

• 45:35Speaker 03

  Yeah.

• 45:37Speaker 04

  In order for us to have that type of impact on home activity and mortgages, yes, those rates need to go to be in the fives, in my opinion, but.

• 45:46Speaker 03

  Well, if you look at what Fanny and Freddie are predicting for mortgage rates, their latest forecast projects a 30 year fixed mortgage rate to be about six and a half percent this year, going down slightly to 6.3 in 2026, which is slightly higher than previous estimates. So again, these are constantly revised. The S and P global ratings are forecasting an average rate of 5.9 by the end of this year. And then next year, next year, dropping down to five, five and a half, which is kind of what you're talking about. I, I, we had Alan Maderos on last week, a mortgage lender, and he said that, um, he, you know, there's a, there's a psychological

• 46:32Speaker 03

  number that then all of a sudden people are like, okay, now, now I'll refi or I'll buy a house. And he thinks once it gets below six, then people will feel better. So if it's a 5.9, for example, people are more willing to buy that house versus it was a six, 6% mortgage. And, but it's so hard to predict. And we want to remind our, our stance here at Money Wise in terms of buying a house. You don't buy a house when the interest rates are right. You buy a house when you can afford it.

• 47:00Speaker 04

  That's right.

• 47:00Speaker 03

  And that's a simple calculation and ratio for you to figure out.

• 47:04Speaker 04

  Based on your income, based on your savings, based on, on, on levers that you can move and are in control of.

• 47:11Speaker 03

  That's right. And the good news is if rates do go down, you can refi.

• 47:16Speaker 04

  That's right.

• 47:16Speaker 03

  But if you buy, get into a house when you can afford it, then you can always. Afford it. That's the good news. You can lock it in and yes, it may be feel high that the interest rate is, but we're really, we're just below historic averages for a more 30 year fixed mortgage. It's just psychologically, we've been used to having it down in the threes or the fours.

• 47:34Speaker 04

  That's right.

• 47:35Speaker 03

  And man, how great are those people who locked in at two and a half or 3%? I mean, it's just, you basically have a free money loan. If it's above the inflation rate, you're, the bank is paying you to carry that loan.

• 47:47Speaker 04

  I had a call from a friend last week asking me, hey, I got a 3.75% and I want to keep like, I said, why would you do that, man? Why?

• 47:55Speaker 03

  Right.

• 47:56Speaker 04

  Why? It doesn't, like your money at the bank does not pay you that.

• 47:59Speaker 03

  Right. That's right. I mean, yeah, we've got, there's a lot, lot there to unpack. In fact, tomorrow, we're going to have a great show. We're excited to have attorney Leonard Welch on. He's with Young Woolridge. He is a bankruptcy attorney. It's been many years since we've had Leonard on the show, but it'd be a great time to tune in. We have a ton of questions to ask him about bankruptcy. There's so much misconceptions about it. So want to, do not want to miss that show. If you missed any of this or previous shows, you can go to moneywiseguys.com or wherever you listen to your podcasts. There you will find us. Also, as we leave the show, remember these three things. Be smart, be safe, and always be money wise.

• 48:42Speaker 02

  Securities offered through SCF Securities, Inc., member FINRA/SIPC. Investment advisory services offered through SCF Investment Advisors, Inc. SCF Securities, Inc. and Money Wise Wealth Management are independently owned and operated.