Sam’s +$10 Million Portfolio, Shaan's Money Philosophy and The Spending vs. Saving Paradox

As I like to say. I've lost more money than most people have ever made. I'm such a good investor that I've lost more money than you can dream of making. Feel like I can rule the world, I know I can be what I want to I put my all in it like a day's off. What's going on in New York, headed back to Austin tomorrow. But uh I'm good. How are you?

I'm doing great. I'm stationary where I always am and not moving anywhere. What did you say? You tweeted out. You said I'll be in LA Who's up? Or what did you say? I said knock knock who's there. Knock knockers there.

You also said you're looking for a cold plunge that you can buy. That doesn't require you to post on Instagram. Yeah. I can't tell you. I can't tell if you're making fun of me or if you actually want a plunge. Do you? I just feel like it's gonna be like maintenance or something for me though. So I'm not really that interested in that. But um

I thought it was funny, I was like, you know Basically making fun of you, Sahel and the like everybody. Everybody who has a cold plunge He's like, you know what? This is actually a recording studio. that I'm going to use every day. Every day I do this, I'm gonna post every day about this. And it's like it's like yeah, brushing your teeth, man. It's just part of my routine. I just do it. And I when I do it, I wanna bring y'all with me.

We'll have to put an Andrew Huberman fan, a vegan, and like a crossfitter all in one room and see like does uh spontaneous com combustion just happen. It's like we've discovered something stronger than entropy. Is there enough friction to create a fire? There might be between who talks the most. All right, I've got a couple interesting topics today. The biggest one. And I what we're gonna do right now is I wanna do something that I only do privately, I'll do it publicly. So this is that could go different ways, but you could critique me. But basically, like with some of my friends and some people in Hamden, I do this thing called a portfolio review.

Where I explain my financial portfolio and you are allowed to critique it and challenge me. In order to like hopefully make me better. Okay. Uh do you know you know what I'm saying? I know exactly what you're saying. You don't have to keep asking, I know what you're saying.

You ask this question a lot. To our guest. I think it first started with Ryan Holliday and I thought it was like just the most blunt Wonderful question, you go, So what do you do with your money? And I thought that was wonderful. And so that's kinda how I like came up with the idea to do this. And so I figure today

We can do that. Does that sound interesting to you? Yeah. Let's do it. All right. The portfolio review. And I guess I think we're gonna do this like the other way I like to ask the question is If there was a pie chart You know. Uh roughly what percent are you putting over here, what percent are you putting over there, and why? And I'm not like one of those guys. So our friend Nick Huber sent an email out the other day and he put like exact numbers of everything of his net worth. And there's a bunch of people who do that. I'm not that transparent. So I don't

I don't particularly like that, but I'll be very transparent about some things. Yeah, we're not going financially streaking here, but um you know if we can go to the beach, we can uh I'll take my shirt off. Yeah, yeah, yeah. We're gonna go we're gonna pop the top, but we're not we're keeping the bottoms on. Right. Okay. So First, let me say my strategy for this whole thing. The first thing is that

A lot of this is contingent on my previous strategy, which started when I was like twenty one years old was to start and sell a business by the age of thirty. I thought if I did that, that would give me some financial security, which was basically rooted in like being insecure about money. for a very long time and wanting to have like some type of s security. So that's like

A lot of people listening in the YouTube comments I know they're gonna say, but how did you get like blank? Well, we talked about that a ton, but anyway, it was about starting and selling a company. Another thing. Unlike You, Sean. And I think unlike most of our listeners.

I would say I am incredibly conservative. And so that is not the right fit for a lot of people. Right. The reason I'm conservative is I'm gonna break it down into four different accounts, of which my big major account I consider that account my livable money. So I don't actually draw off any of it, but my game plan was to sell a business and have that. Big windfall.

If I wanted to It could just go into uh the stock market and the gains could pay for the rest of my life without ever having to touch the principal. So that's kinda like a The strategy on that. And then also, as of now, I currently live off of my income. So we make income from this podcast, from our other companies.

My wife works. So I live off that money, so I don't actually touch any of the other stuff. Explain'cause I think Without numbers it's hard. Let's pretend for a second. That when you sold a hustle, you made Ten million dollars after taxes. Let's just pretend that's true. Yeah. What you're saying is you put ten million dollars in Vanguard index

And that's your basically like If I need it, that's there. I'm financially independent. But you don't want to touch it. And so you live you pay your bills off of things like this podcast or you know, people buying your digital products or random stuff like that. That's like kind of money in, money out. That's your that's how you fund your lifestyle and You can do whatever you want. And then you have this nest egg that's there.

That's basically what you're saying was your kind of strategy from Twenties was basically live cheap, build a company, sell it so you have that nest egg. Now you're like, I got the nest egg. And I have this income source that's that's Pretty strong that pays for all of my lifestyle stuff. What now?

Specifically. The way that I had planned on it was let's say you had ten million dollars, you can put draw out three percent of that per year. And basically your nut, your portfolio, that ten million dollars. would hypothetically and mostly realistically based off a hundred years of data continue to grow each year. Some years it actually wouldn't, some years it would, but it would average to uh dec each decade it would grow.

Yes, and that number's three percent that I hypothetically would pull out. Of course I don't, but I could. And then finally My strategy is to reduce stress. And to make income from my private companies. And so I am not an active investor of which we are gonna see. And also This is not advice.

I don't know anything. So don't actually do anything I'm saying. I'm just telling you what I do. All right. Also, if this were advice, this is like the financial equivalent of like Try missionary.

Right. You're not even gonna export review is not gonna be like some like crazy backdoor sweep that's you know, uh puts over here, some calls over there, like I'm pretty sure what you're gonna say is I buy the index, I buy some bonds. And then I try to build more wealth through my private businesses. Did I already spoil your portfolio review? Exactly. Let's talk about percentages. Wha w and and what index are you buying is it one or are you buying multiple indexes? What do you think? All right. So I'm gonna break this down into four categories. Category one, I'm just gonna call it the big account.

I'm not gonna say who I use because I don't want people looking after me or going after me. The second thing, so there's the big account. Which is the earnings from my sale. There's other liquid account, which I'll talk about. There's non liquid stuff and there's private company stuff. Okay. Okay. So the big the big account. I have seventy nine percent.

Of that. in VTI. So that's just a vanguard total index fund. Another fifteen percent of the pie chart is in short term treasuries, which are currently yielding I think four point nine percent. And I think it's like a sixty day term. Meaning um every sixty days as of now, uh we're rebuying rebuying them. They could be ninety days, I forget, but the short term. And then six percent in a real estate fund that buys

Walgreens. I think it's called like oak. Oak. tree or I don't even know. Just some boring thing that like owns like either hundreds or thousands of Walgreen buildings and Wal Walgreens releases the buildings. And year to date.

VTI up nineteen percent. One year chart, fifteen percent. Five year chart, fifty seven percent. That's fine. I'll take that all day. Wha what's VTI historically over the last thirty years? I think it's like eight percent a year, maybe. Yeah, I don't know what it comes up to.

So that it's just boring stuff. And then bonds. prior to like when the economy was killing it. Like three years ago, I think bonds were like one percent. Now they're like five Percent.

And so I'll take that all day. And I think like a savings account, like a high yield savings account is also like three or four percent. Um, which is where I keep cash. Which is basically all a w way of saying wealth preservation at this point. Which is not where most people are at. Wealth creation is where most people are at. Wealth preservation is where you're at, where you're basically like

Um You're just trying not to lose the nest egg, the big the big account, let's say. It's about Just keep up with inflation, maybe beat it a little bit. Okay, if the whole market goes down, I'm diversified, I will also go down, but less so than somebody who was concentrated bets trying to make a bunch of money. Yes. My opinion is that most people, if they are trying to make a lot of money, should try to make money through starting

a company or owning equity in a company. And then as their cash flow comes in, as long as they don't need that to start another business, they should mostly do what I'm doing, which is what I've done before I did this, I was just in wealth front. And by the way, you said this on a different podcast. I think it's worth saying. So you were like I wanted to be kind of like rich by thirty.

Yeah. And you're like, to do that. You basically have to start a business. Um and not only that, I think you uh the the likelihood of selling a business and getting there is probably higher because if you start a company at the age of twenty one and you want to earn ten million dollars You can assume that more likely than not, your first three years you're gonna make minimum wage, or in my case, I made twenty grand a year.

Uh, I made two thousand dollars a month is what I paid myself for the first two years of my business. So that gets you to like the age of twenty five, which means you have to average something like two or three million dollars a year in profit. because you gotta get tax and that will accumulate to like Ten million dollars. I think that's very, very challenging. And I think it's a little bit about selling. Yeah. That's that's the di differentiation here. It's about selling versus Yeah. Cash flowing your way there.

Th that's my opinion. Yes. And the way that my like quote big account works is I keep roughly one hundred to two hundred thousand dollars my checking account, any number or savings account, whatever I yield. Any number above that goes straight into my investment. Fine. This big account. All right.

The second one. I got a sugar mama. Have I told you that? How is she? Her name's Sarah. I've been with her for nine years and she's my sugar mama. My wife. Actually

made money before I did. My wife went to Penn, very very smart woman, went to an Ivy League school, got a job at Facebook, and then worked at Airbnb. She's been there for like six or seven years. Airbnb went public in December, I think, of two thousand twenty one. We thought that they were gonna go out of business. We didn't think Air B and we was gonna work out. Turns out They did awesome.

I think when she started working there, I think the valuation of Airbnb was ten billion. It could have been eighteen, I don't remember. When it I PO'd I think it was a hundred billion. I don't know what it is today, but it's tens of billions. Her stock. Did wonderful. So we own a bunch of Airbnb stock, of which we have sold none of it.

What are you looking at Airbnb stock right now? Ninety three billion. Ninety three billion. So I think it was like eight billion during the pandemic, if I remember correctly. I don't remember exactly. We haven't sold a lick of that. The other stock of which we own Is HubSpot.

When I sold to HubSpot, I was given a bunch of stock. I have not sold any of it other than the amount that I had to take out to pay taxes. And that's like a legal thing. Like they they they automatically take that out. My intention is to not sell any of that in the next five years. Maybe I will, maybe I won't. As of now, I don't need the money. I like both Airbnb and I like HubSpot.

I'm not selling any of that. At the moment. I also have a four one K that I've always maxed out. And then I have Bitcoin that I bought in 2014 that basically has just sat there dormant forever and I don't even know what it is now, but Right. I I have not sold any of it.

Have you ever sold Bitcoin? Yeah, I've sold Bitcoin at a couple of different points. Each time I've sold What's up? Poor decision. I don't know if I told you the first time I sold, so I bought Bitcoin like

back was like three hundred dollars or something like that. That was my original original buy 400 was my average. It shot up to I don't know, three thousand, four thousand at one point. I go to a wedding. And my aunt, I think I told the story before. My aunt Who's like, you know, an Indian auntie.

Is I'm I walk into a conversation she's having with her friends and she's She literally goes, Oh yeah, Ethereum is very good. And I was like I was like, My aunt's talking about Ethereum and saying it's very good and I was like

Well, how can we say it's good? Oh, Ethereum, i it used to be this price. Now it's this price. It's very good. And I was like, Oh, it's good because the price is going up? And I was like pretty sure there's bubbles. I've read something about this. This is I think the moment when like your Indian auntie you know on the east coast is talking about assets that like, you know, a grid because they go up and telling her friends they gotta buy. And I'm like, this is gonna be a bubble. And um I was right and wrong. So I I immediately go and I try to liquidate everything. I try to sell the whole thing. I everything I have. Coinbase limits me. Wait, was it really because of that? Literally because of that. I so I that night I go try to sell everything. Coinbase is limiting me because you can't just sell like

Lots of lots of stuff at once. They're like, uh, you can only sell like I don't know, 15 grand at a time or something like that. So I'm s trying to max it out every day and try to sell. And at some point I got time to time by the fifth day or whatever, I was like, Okay, let me just leave whatever else is there. It's fine. Uh and it it kind of wore off. Um Bitcoin shoots up to 19,000 in like the next two months. And I was like, Oh my God, what am I doing? I mistimed the bubble. And then it goes back down to like whatever, three thousand. I was like, Oh, I feel good now. And I was like, This is stupid. I shouldn't just feel good and bad. I shouldn't try to time this, basically. I either believe in this or I don't in the long term and I should just Dude, I can't believe

That you let your aunt that one story sway like Change your actions. Oh, that's happened to me multiple. I told you about the Tesla one too. I I basically own a ton of like the only stock I owned early on was Tesla. B back when Tesla was like very like kind of like a a young stock. It was like maybe a like a two or three billion dollar evaluation, maybe five. And um What's it now, like six hundred billion or a trillion or something? It went up to basically close to a trillion. Um No, I don't know what it's at. I can't even do that math. So what's a thousand dollars in Tesla? It's two billion dollars. I saved enough to like invest that much.

twenty five, thirty K or something. And I did the math once. Uh yeah, it's at nine hundred billion now. So it would have been basically I remember when I had done the math. It was like, Oh, that twenty five K would have been like six million dollars by now. Um if I just held and instead I went on Reddit and there's like I don't know if you know on Reddit, there's all these like T it's called like Tesla Q. It's basically like a group of people who that believe that Tesla is like going to zero slash like Maybe it's like fraudulent. And there's like all these people sending it.

Fake cars, right? Like like their fake Photoshop images. But like lots of other things like that. Like there would be like guys who'd be like, Gosh There's this garage in Phoenix. And look at this. And he would go to this garage and there was only Tesla's parked on six stories. And he's walking up, and he's like, they're stashing them here so that you can't tell where they're like, because if they just leave them in the factory lot, it's clear they're not selling. They're pot piling up. He's like, look at this. This one has and he's like putting his finger on it, it's got dust. He's like, look at this, this hasn't moved in months. And I was like, he's right. Thank you, you slash three three three kitty kitty. Like, you know. And I was like just taking all these signals from people on Reddit that were like, look at it. And I think at one point they had had like 15 different CFOs. And I was like, that does seem fishy. Why why have so many CFOs come, looked at the books, and left in a very short period of time? That doesn't sound right.

And I basically Took all these signals and I sold, and I was like so h I had tripled my investment or quadruple my investment. I was like, Yeah, I'm get out of the top, boys. And then uh You know at like 100x since then. It wasn't really. That's the second time that's happened to you. The first time it happened to you was with Stripe, when you had a job offer, I think at Stripe. No, no, I blew the the interview. I didn't get the offer. I only applied to one job. It was Stripe back in two thousand and uh eleven or twelve. So I would have been like employee twenty at Stripe.

Which is like a guaranteed Like if you it's if you stick it out and you know you're there for four or five years or s seven years and you and you kinda like work your way up a little bit, even at a junior level entry position. Probably would have ended up Over like a seven year period making somewhere between ten and twenty million dollars. And um

My mentor is the mentor of the guy who's interviewing me. He that's his mentor, right? The mentors have like a pretty big influence. If the if the mentor says, Hey, this person's amazing, you're like oh Thank you, Sensei. Like I'll I'll listen. I he had my mentor had written a blog post saying

I met this kid, he's 21 years old, he's an entrepreneur, and he's got the highest like bias for action of anybody I've met in the last 10 years. And I was like, wow, glowing five star review, basically. I hand it to this guy, this guy's like, wow, if John thinks this about you, Let's do the interview anyways as a formality. Uh yeah, we gotta do it, but like I'm so excited to talk. And we talk and somehow I blew like a a thirty thirty thirty point lead uh during the interview where I um he's like Okay, so like this is kinda like a sales position, like, you know, sell me a piece of software that you really like.

I was like I was like sell me this pen, eh? Um So what I would do is I would basically just ask him a bunch of questions. Do it. Pretend. And I was like Uh

And I just I don't know, like I don't know what I said, but whatever I said at the end he's like Yeah, that wasn't very good. Yeah, I don't think this is a sales probably not your thing. You're probably not that good at this. So um, you know, maybe there's another position we could look for. And I was so embarrassed at that point, or whatever, I was just like, ah, this this guy basically rejected me and said, Maybe there's some other role for you. Like, you know Down in the basement. Yeah, maybe you could fold someone's laundry, one of the engineer's laundry. And I was like uh this other job instead. And the inner the the guy was like uh He was like, So Sean, what do you know about Stripe and like the banking system? Sean's like, uh Yeah.

Well, I like money. I would like I would like to have some more of it. Big fan of stripes, white stripes, uh crest wiping stripes. Sorry, sorry, those are strips. Uh let's see. Adidas logo, you know. You ever been to Stripes Company Store? Love it. That's how that interview went. So that blew it. You blew that one, but that's okay. That's okay. You let emotions Sway you. And I'm gonna give you a a lesson here in that I never do that.

So it's okay. Your weakness is my strength. So it's good because I don't sell anything. As I like to say I've lost more money than most people have ever made. I'm such a good investor that I've lost more money than you can dream of making. When we sold the hub spot, I think the stock was three hundred and sixty seven. I think it went up to like eight hundred and sixty. And it was it was amazing. And then it went down to like two hundred and fifty. And I remember thinking, like, Oh man, is this right? Is this right? What do I do? And so like that that that definitely impacts me. Like I definitely want to sell it. I literally did it with the HubSpot thing. I bought shot stock

Right around when you when you sold and then it went up and it was like oh and everything was going up during that period of time. And uh then when the whole market crashed, I was like, you know what, I don't really want to be in the stock market right now. This isn't very fun. I don't know like there's all these war again, Tesla Q. There's all these warning signs about where the economy's going. I think I have a much bigger edge just like in my own businesses and in private businesses. Let me just get out of like public market stock picking, which I'm not Like I don't know if I'm very good or very bad at it, but I just think generally is a bad strategy to to take to to your investing. And Yeah, I basically sold almost the exact bottom of the market. Like the literal bottoms. Like I sold and there's a guy somewhere in air traffic control. He's like

The bottom's in. He's out. He's out. Most people only hit rock bottom once in their life. That's like the point of the phrase. Right. Yeah. Somebody was asking me this the other day, they were like, They're like, Oh, so what are you doing with your kind of like investments? I'm explaining what I do. And they're like, um So what do you like, you know, what do you do for your like your safety net or whatever, like And I was like S safe. Like you're looking at it. He's like, What do you mean? I was like

Am I still me? If I'm still me, I'm safe. Like what do you want? I can lose all this. Who cares? I can get I can lose all of it. I'd make it all back. Like who I have no I am the safety net. I uh you know, a bond portfolio is not my safety net. My four oh one K that's locked up till I'm sixty five. I don't think of that as my safety net. I am my safety net. And that's uh I think that's an approach. Honestly If you're like high caliber, I see so many people that are high c like really high caliber people that play it so safe.

With their finances, I would count it was one of these people. And You never look bad. But I also think you leave so much room. We're like, you didn't need to

Like Have you spent a dollar? Or like have you spent more than ten percent of the money From the hustle sale? No way. Definitely not.

Five percent. E have you even spent a dollar from that account? No, not I've never pulled money out of my big account. The most expensive thing I bought was a hundred thousand dollar car, of which I think you bought three like last month. I'm not that I'm not Persian, I'm Indian. So the thing you you know, the this is one way I think about it. Like you worked for 10 years every day to build this company and you sold it, you achieved the thing you exactly wanted.

And not a dollar has moved in like two years or three years, or you haven't like moved a dollar from it. In a way. You bought you you spent ten years to save up for this power tool and then you just leave it in the case. And and I d I don't know if like I'm not saying that my way is right, but I also know that for me Uh

My philosophy is money is a tool. to be used to enhance your life. And if you're not really using it And then you work hard to like go get more money? It's like that really all compute for me. What is the way you think about that to like make that feel right? I think that's an incredibly fair criticism. And my joke is when Warren Buffett talks about the long term view, and I'm like, dude, you're fucking ninety five. There is no long term view. Like there it that that doesn't exist. Right. And so the it to cr to criticize myself. I am horrible at spending money. Ramit Saiti, who we have on the pod, he does a really good job of like saying like look, you could earn income and you should be good at that.

You also have to get good at spending. I'm quite bad at spending. I think it's just rooted in emotional instability and being insane. Uh, I think that these are just like personality defects and oftentimes what makes you good at saving makes you bad at spending. And I think that it's uh like a therapist issue that you need to work out. And so I think that's an incredibly fair criticism. I think the truth is half is it's not quite halfway in the middle. I think I should of what you believe and what I believe. I think it's more like I should

Loosen up a bit. Right. But yeah, that's it. I I think typically what I've seen is people who earn A lump sum. Like a startup where they are poor and then suddenly they're not poor. Those people tend to be more like me, where they're really tight wide and they're frugal and they're cheap. And that causes a lot of anxiety. People who earn significant amount of cash flow throughout the years and get used to it, they tend to be a little bit more offensive and a little bit less conservative.

But I think it's rooted. Definitely in like childhood trauma and shit like that. Like just like how you're raised. Do you know what I mean? Just like running out of money. I'm gonna share without sharing somebody's name. Some a friend of ours sent me a presentation. That they did.

That they made uh kinda like about their life as part of uh Like One of these like peer group things, not Hampton, but a different one. So We don't we don't plug no other names of no other groups on this podcast. That's right. Thank you. I appreciate that. So

So uh he sent me this thing and I thought it was really great. Basically it's like, you know, here's my life story. And here's what I do with my money. And I he had a couple of slides I thought were really good. So one was This person had sold their business for over a hundred million dollars. So they had like a nine figure exit. Of their business. And

The next slide and so it's like Here's the picture of me the day we sold for over a hundred million dollars. Next day it's like I bought this bike. Um this bike it's this two thousand dollar bike. It's an awesome bike. Most expensive purchase uh most expensive item I've owned. Sense.

It's been like 10 years or something like it's like whoa. Um until I recently bought a condo finally, like last year. Uh this was the most expensive item I owned. Love this bike. And then I was like, okay, interesting. And then and then uh there's another slide that said top five financial mistakes that I've learned to cope with. Love that title. And there's five interesting ones about basically like sold this too early, sold this too early was gonna buy this and talk myself out of it because there was a fee associated with it. I would have made like twenty million bucks on that. You know, so so I think that's just a gr a great exercise to go on, which is like You can survive a bunch of bad mistakes, and if you're gonna play the game, any like any good startup investor.

Has An epic anti portfolio. A bunch of businesses that they passed on that they should have invested in. And um that's That is part of playing the game. You can't play the g you know, it's like Pick a basketball player in and you know, that Michael Jordan commercial where he's like I've missed three thousand game winning shots or whatever. It's like Yeah.

That's what happens when you're you play, you're gonna miss shots and like you can't Yeah, every everyone has like I literally know fifteen people that have the same Uber story. Um like that was like the f that was like the famous one for years, which is I passed on Uber. I passed on Uber. Everyone said I passed on Uber. Like I I I know a ton of people have said that. I think Gary Vaynerchuk, like in the beginning of his book He like gives a compliment to Travis Kalenick, the founder of the like calls him out as like, you know, I think my wife he's like I I thank my wife, my children, and Travis Kalenick, meaning I was super close with them.

And I still pass on that. And that cost me a hundred million dollars. Exactly. I think that's like a famous story he says. So yeah, everyone has that story. Um let me give you two other slides he says. Then it's then there's two slides called My Fed Up Relationship with Money. I think I can read this. Let me see. So he it says I work hard to make money and I got good at it. But then I hoard the money I make. I put it in bank accounts, I look at it constantly. And besides hoarding I know money I know that money is good for one other thing, making more money.

You know, like that's uh that that's something I I realized. And it's like, you know, I really like put a lot of my own self value on money. Here's some things that I do that are dumb about money. Uh like I feel guilty spending on myself. My parents were the same way. They They would spend on their kids or spend on like other things, but they wouldn't spend on themselves. And um that's annoying. They they did it and now I'm doing it. He said, I bought a business that was a cash flow business and I said, Okay, this is my cocaine fund. All the profit from this I must spend on something hedonistic. I must I must spend, I can't save this money. Didn't work. Still saved it. He goes, I'm comfortable losing five hundred K on an investment just like that.

But if you said five spend five hundred K to improve your life and I guarantee it will improve your life. I can't I can't do it. I can't get myself to do it. I'm the exact same way. I should be helping. Well, I've been looking at your company, Shepherd. I think it's like Three thousand a month for an assistant, of which I desperately need, but I'm like three thousand months. Well well the it's not a fee, uh whatever the payment is for the person. But if you hire somebody, you pay thirty percent of their salary as a as a headhunter bounty once. That's it.

So it'll be like three it'll be like three grand for the year is for most people. That's like let's say an average. But I mean I have to pay the f uh the the the person's in uh the person's salary. And I'm like, Well that's thirty six grand a year, but if you do that over five years at the rate that we're growing right now, that's ninety thousand dollars. Like I'm ruining the compounding. She might really be valuable and that might be a 15 year relationship. Now I'm talking about a$500,000 investment, but I could also put that in VTI and it would compound 8%. And now you've talked yourself out of it. Oh man, this is the most expensive thing I've ever bought.

That's a lot of money. But I guess if we're married for eighty years because we might live to be like a hundred and ten, that means that that's only eight hundred dollars a year. And like that's okay. Do you know what I mean? Like there's all these weird mental gymnastics that crazy people like me have to do. So this guy is he an immigrant? Is this guy an immigrant you're talking about? It's one hundred percent most immigrants that I've been around have or not most, but met this it sounds like a very much an immigrant problem. Right. Of which I'm the exact opposite of a immigrant. But that's why I don't that's why I like those guys. I identify with them. Um we had this uh this funny experience where um Another friend.

Who also mega, mega wealthy. When we met him in when we met up with this person in person, they were like, you know what, I really want to like shift into like family mode. Like I'm I'm ready to like meet somebody, have a kid, like, you know, like I want to do that part of life now. And we're like, that makes total sense. Good on you. You're you know you did the money thing, the business thing, you you you you Scratch that itch, you proved you could do it. Now you're in your thirties and you're saying You know what, I sh I'm not really I don't really have a partner, I don't have kids. That seems fun. I'm the I do see myself as a family guy. I wanna do that.

So that was where we left the conversation. And now um my business partner, Ben, Ben Levy, he's like the man with like checking in on people. Checks in on everybody. So he's just always providing me the stream of updates about like what people are up to. And it's great. And so he's like uh that friend, he's like he's like doing something new. And I'm like uh like not just doing one thing news, I got these like four cr projects he's cooking up.

And I was like, Oh, that's interesting. Like, what happened to the whole like I wanna actually focus on like like finding a partner, starting a family, like He's like, Oh yeah he still wants to do that. It's like We start in four companies. I mean that doesn't seem like that's gonna be very conducive to like, you know Putting your focus on something, right? And it's like, Yeah, I agree. And I go How can this keeps happening? Like

We have so many smart friends. I said There's a big difference between smart and wise. And I think that's what we're seeing. Is basically We've a lot of smart friends that are not that wise about like Decision making.

So they're intelligent for sure. Um But they make decisions that don't really make sense if you zoomed out a little bit. How old's this person? I don't know, like I don't know mid thirties or something like that.

I think some of that will come with age. I think that we're in a weird circle of which many of the listeners l listening to this, they have a higher income than most people their age. And I think that like sometimes maybe your earning power is ahead of your brain power or wisdom power. Do you know what I mean? That's what I'm saying. Like I'm not telling you you get you you you gotta go get married and have kids. But if you told me you wanted to get married and have kids And then instead you're spending all your time Doing these other things that are gonna completely make you busy. And if I t asked you why didn't you Why hasn't this happened already? It's like, oh, I was so heads down in my company. It's like cool. So why are you getting heads down in four companies now? That doesn't make sense either. And I text up in I go,

Man, we're you know, I'm guilty of this in other areas of my life, right?'Cause again, if you spot it, you got it. So anytime I notice something in other people, I'm like Where in my life do I make the same stupid mistake? And I was like, Oh, it'd be like Like yesterday, I canceled I did something I very rarely do. I almost never do this. I canceled my workout. 'Cause I was like had two doctors appointments and I was like, if I if I do this workout in the middle of the day, then I'm just not gonna get any work done today. Canceled my work out. I was like

But my number one goal. right now in life is to get fit. I would get more value out of becoming more fit. than making another dollar. You have fifty four days left, I think, right? Uh yeah, Monday uh

No, I'm on forty nine. Uh forty nine days left. Yep. Yeah, forty nine days left to get abs. I'm eight weeks away from being that guy. So so but I but I guess like the the point is that's an area of my life where I make a stupid decision. That's an unwise decision to say, hey On one day I said, This is my main goal. And then three days later

I'm prioritizing something else above my main goal. What? That doesn't make any sense. And same way this person's doing that with their relationship. Their main goal is to get married and have kids. But they prioritize a bunch of other stuff. And I was like, that's not intelligence, that's wisdom. Like that's basically having good judgment. And I realized that like wisdom or good judgment is the thing that's most short in supply and the most valuable because it's like a lever. You don't have to be that hardworking or that smart.

If you have great judgment, if you pick the right things to focus on, pick the right people to work with. Uh, pick the right place to live. You don't have to be like nine thousand IQ. You don't have to know everything about everything. You don't have to be the hardest worker. But if you have poor judgment No amount of hard work or like intelligence really saves you. You kind of screw yourself. And so it just really emphasized that point to me about like, you know.

Smart does not equal wise and the goal is wise, not smart. I think that's a good one. I like that. And Yeah. Everyone's such a horrible driver.

It's like dude. Uh it's like there there's like some weird emotion and logic that don't make sense there. And then my final accounts of which You can uh these last two, you're gonna have a lot of uh opinions on. The last one or the second to last one is my non liquid stuff, of which it's roughly three point eight million dollars in real estate of which I have a mortgage on My house, I think my house was nine hundred and fifty thousand dollars that I bought. I have a mortgage of like five hundred and fifty dollars left. I own a ranch, I own some vacant lots in Austin.

And I'm a small owner in some storage deals, uh, a Brooklyn building. And One or two small things. And the other non liquid stuff is angel investing. Now here's what I do, and you tell me if I'm wrong.

I reduced I value it at So the principal sum that I put in Plus I even put a large discount on that, of which it's now that would be around five hundred thousand dollars of startup investments.

The way that I see that is I've done roughly fifty, I think. Forty will probably not work. Ten will work, of which three might pay back everything. Plus a little bit. And I've reduced

the principal by a significant amount. Just in assuming future net worth and anything above that, whatever, maybe it will work. Wha what do you think about that? Yeah, I think basically startup investing is uh You it's so it's so long time horizon. Right, like you have to assume that these are gonna take seven to ten years before they pay out. So even if they are worth X, they're not really worth X to you yet. Uh they're these little eggs that are that are, you know, going to be hatching. And so I'm with you basically when I calculate

I I never calculate net worth because I think that's kind of useless because it takes into account illiquid things that are gonna either like go to zero or go way up in value. Like my own businesses are gonna either go to zero or go way up in value, most likely. Um and they're illiquid, so what does it matter? I can't do anything with them Right now, anyhow. Uh so I I basically only calculate liquid net worth when I calculate it. So that doesn't include any of my own businesses and I also don't include any startup investments because it's not liquid yet. That doesn't mean it's not valuable, but it's just not liquid yet. So I don't I don't even apply the discount because it doesn't matter. It's not in my calculation. And that's my last category, which is private companies. So those include like any course I do, this podcast, speaking fees, which is like called par media. I assume that has zero equity value. I live off that income. And then the the next big company is Hampton.

As of today, I assume that is worth zero. I've taken zero salary from it. I will likely take a dividend at the end of the year. But until that business hits like Forty or fifty million in revenue. In my head, I assume it's worth zero. I do not include any of the private businesses that I operate or own.

as part of my net worth. So we are totally aligned on that part. Like by e commerce. I d I don't I don't include it in the calculation. Even though that business is doing great, you you include that as zero still? Yeah, I well I just I don't Mark it at zero. I just I'm not calculating total net worth. I'm only calculating liquid. So

If I tried to calculate total net worth, yeah, I'd include it. I'd put some conservative number there, but I don't even really bother because what's the point? In fact, I think the whole net worth thing is like um Not a great thing to up like I'm I'm kind of in search of a better metric. Well, there's earning so and income. Do you measure income, but then income is like only things that are, you know, it's gonna buy us way too hard to get to to things that are only, you know, generating cash flow today. Um So it's not gonna count really any like assets.

Do you measure your income on a monthly basis? I measure my every month I like do like a report where I look at like all right, what was my income this month and where'd it come from? Yeah, not religiously, but y it's it's mostly like steady. I can and I kinda know the one or two things that are variable. I'm like, Oh, that's what that was at this month plus you know it's It's like in the same range, roughly. Um so yeah, I know I know what it's coming in every month. I know roughly what's coming out every month. I don't really keep track of spending too much. Um I I'll I'll kinda calculate spending Every couple months just to be like Am I did I add anything significant here? What's your spend right now?

I think I spend maybe twenty five or thirty thousand dollars a month. Yeah, I think I'm at thirty thirty K a month. Up burn. Life life expenses. And I feel that that's a lot. That sounds like a lot to me. That sounds insane to me. We have a friend who told us that that They are currently spending

Three hundred thousand dollars a month. And I was like gasping. I was like I can't comprehend that. And then they listed it all out. And I was like, yeah, that definitely adds up. But that's just like You do need the Jet. I mean, what are you gonna do without it? It was insane to me. I've got another friend that spends eighty thousand and I'm like Gasping. Right. But I guess like everything changed when you get when you get to different levels. But

So anyway, that's kinda like my portfolio. I wanna say that A, this isn't advice, but also I basically do the most simple conservative stuff. Uh I use Tiller. Have you heard of Tiller? I think the website is Tiller HQ dot com. It's like a plug in and I track this in Google Sheets. What do you do you track anything? Like your accounts in any other place. I'm like, I'm not connecting my shit to these random startup apps like you know, I I don't wanna con I don't wanna put all my stuff into these apps. So I'cause I'm not that concerned with it in general. Um

You know, the fewer things that you're concerned about, the better. In general. Yes. You do just occasional checks and balances. So every three months I sit down and by hand I write down I write out Where I'm at. with the liquid stuff, where I'm at income wise and where I'm at Monthly burn wise. Every three months I do that. But there's like a

There's like a logistical problem. Let's say your wife has a four oh one K from her job from like eight years ago. Yeah. And you have one from each job that you've had and you haven't combined them. That's like six accounts potentially, or five accounts, plus a checking, plus a savings, plus Uh like Let's say that you each had like a Robin Hood account or an E Trade account plus um her previous before you were married, maybe checking her savings. I mean, like

It kinda can accumulate whether you have money or not, that you have eight or ten accounts and like what happens if you die and she doesn't know about all of them, or vice versa. Do you know what I mean? Yeah, we do have that problem, which is if I die, I don't think she's gonna be able to like know or find or access a bunch of stuff, especially the crypto stuff. How how's she gonna get to that? I've told her three times, I'm like, You're not really paying attention enough To remember this. Like nine years from now, if something happens, it's like I don't know what's gonna happen with that. I I that I am a a little bit concerned about. However The rest of the stuff. Again, I just do it by hand and I make a day out of it. I treat it like a spa day. It's like you I think you talked about this concept of worry time. You're like I just schedule some worry time in the future. That's what I do. With this. I don't call it worry time because I

I'm not trying to feel worried during it, but same thing. I just schedule a little a day every three months. I'm like oh Today's the day. It's basically like let's have a little financial picnic. Right. Let me open up some of these baskets and see what's inside. And let me take stock of what's going on. And I think once a quarter for me is the right amount of energy I'm trying to spend on on this. And I just don't really want to think about it otherwise. Do you know anyone who's crazier than you? I mean, I view you as being quite crazy. I've got one friend that uh made like a hundred and fifty million dollars and they invested like

The majority of it in only two things. Their next company and a house. And they're like, I basically don't own any like bonds, equities, I got very little savings. So I consider that person to be crazier than you. Right. Or A similar amount of crazy, but potentially at a larger scale. Are all of your circle of friends like you, or do many of them say the same thing like I'm saying, which is like, Man, you're not conservative enough. When you say crazy, do you s like is this kinda like

Oh, this bum on the street's a little crazy, or is it like wow, that she's hot, but she's crazy. Like which one am I? My hot girl crazy or my bum crazy? More like bet it all in on black. Uh like like tuition money or this game of roulette. Right. I don't view myself as that crazy. I think I have a pretty healthy view on money. I'll explain it to you in a few sentences. Number one. Money is a tool to enable a better lifestyle. That's what it's for. That's how I use it. So that's the first thing. That includes spending on lifestyle, but it also includes learning things. My angel investments, I don't view as

The a absolute optimum way for me personally to make money. But I love them because I learn so much about where the world is going from startups and I like being around entrepreneurs. That's those are my people. So I'm using money as my tool to like make my life more like how I want. Um

So I use money as a tool. That's the first thing. Money as a tool to enable a better lifestyle. I think I abide by that law. The second thing is money's no fun when you're stressed about it. So there's basically like a strategy that just says I don't need to I don't need to be stressed about this. So what is my amount of money that I know is my like safety net. So like, you know

Basically, Can I have two to three years of expenses? put away. That's just in n like it it could be in nothing. It could just be literally sitting in a g a bank account Doing absolutely nothing. But it's not doing nothing. It's enabling me.

To be free with the rest of the money because I know that if I lost everything, if somehow everything went to zero. I would still have three years of runway and again. I'm me, I am my own safe net. If you g if you give me three years of runway, I'll have it all back in more by then. uh like you know, if I needed to uh to make money a focus. And so I do that. So to me I'm like if I have three years of life expenses,

Um Put away? What what am I worried about, right? So I do that. The third thing is I know if I'm in w which gear. Am I in wealth creation mode or wealth preservation mode? So well I view myself still as in wealth creation mode. You know, when I sold my company, it wasn't for as much money as you sold your company for. I think if I had sold my company for as much as you did,

I might Do things slightly differently. But I still view like most of my investments as like More on the aggressive side, more concentrated bets.

In things that I believe in. And I know I'm gonna make mistakes. I'm gonna have some things that go to zero. I'm gonna sell some things at the wrong time. I would say the only leak in my game is really just that I sell things at all. I really should shouldn't sell. Like the the only investment m mistake I've made is just selling. Okay, but are you actually gonna you've just acknowledged and and we'll go we'll we can make fun of me after this, but you've acknowledged that. So are you making that Yes, exactly. So I made that but Okay, so you're not gonna sell Ever or often. I'm buying things I basically default to say this is

Only you have to break glass if you're gonna sell this. So basically, like you have to really have a reason. Like either you need the money and you gotta sell the thing. Or Something in the world has changed that caused you to like re underwrite this. Now I would argue I kinda did that. With the last time that I sold when basically like The post Covid

kinda like what's g money printing's going on, what's going on in the economy, everything all the stocks crash. I thought okay, we've had a thirteen year bull market. We're probably not just gonna have six months of bad times and then back to the good times again. Like I still kinda believe that that's true. Um, but I should say I wasn't in a place to re underwrite that that those investments because I was now thinking about macro stuff where like

If I'm spending thirty percent of my time on Wikipedia, that means I'm not informed enough to be making an s intelligent decision about this. Uh uh, you know, I'm like I'm learning about it. But where do you get the information from? Do you get it from current people. So for example, I like to I prefer to get information. I try to read books that are at least thirty or forty years old. And to figure out like I try to learn about stuff, what's it called? Like the Lindy effect, where it's like I try to learn about stuff that has is has been repeated many, many, many times and isn't exactly new. For and and and the counterexample of that is when Biology said.

All the crazy stuff about what was his argument that bitcoin's going to a million because this reason dollars in a high that shit scares me. And I'm like, I don't understand that. That's so new. And it legitimately scared me. I do. I don't try to do that because W what I what I find happens with that is I already have an opinion in my head and then I just go find evidence of it. Right. I already want to hold the stock forever. So then I go find the Lindy effect that says ah.

Lindy Effect says that this thing's gonna stay valuable because it's been valuable. And I'll like cling to that evidence, but it's really just reinforcing some bias I already had in my head. So instead what I do And you can't learn everything, right? Like you can't just say, I'm gonna l go learn the world of like Finance. Like this is too broad. It's impossible to do. So here's what I do. I go through and I say what are

People that I consider to be smart. Saying and thinking right now. And I go try to line up Contenders. It's like Here's Theory A about where the world is going right now.

about what yeah, here's thesis A, here's thesis B, here's thesis C. And then I basically say Inherently, does one of them just intuitively make more sense to me? Does it re does it resonate in my gut that one of these just feels more true than the other? Okay, let me that's the first test. Second test. What evidence do they have that backs up their belief? Let me now stack the evidence. Okay, now which one appears to be the strongest thesis. So instead of going and trying to learn about the topic, I take people who Already

Like have strong opinions about this topic and I go try to find what is the spectrum of opinions about this. So on one hand, you have Bology who's like Do you actually talk to them or just consume information? N not always, sometimes, but like not always. Like, you know, like Bology, for example, he's just very public about his thesis. So you don't need to like talk to him, right? It's like He's publishing every day. He's like I moved out of America. I got out of the dollar, and here's the sources I'm citing that I'm tracking that basically says that the banking system is insolvent, that the you know, the money printing is uh you know is out of control, inflation is higher than they're admitting, and that this is what what is the result of this? It's X, right? And then you have Ray Dalio that says, look. I've been studying empires and all empires come to an end. Here's the cycles that they go through, and I think that America's at the tail end of the cycle. So you go read that book, you go watch his talks, you're like, all right, that's one another thesis. You have some people who say,

No, you know what, this is gonna bounce back because Even with all the problems America has The dollar is still the best thing we got out there. And that in w when all the co all the countries in the world get weaker, they'll actually flee to the whatever the relatively strongest currency is, and maybe that's the dollar, and the dollar's gonna drink the whole milkshake, basically. It's like all right, cool. Um I I didn't make some Something I forgot it's called, like the the the straw that drinks the shake or some shit like that. People talk about that. From there will be blood. He goes if I had a long straw

All the way over there. I drink your milkshake. I drink it up. So you basically line up a bunch of arguments and then you kind of like You litigate them like a lawyer. You're like, what evidence do you have that supports this? What examples do you have? And then you basically say, look, okay, even if I don't know what's totally true. Can I hedge? So it's like You know what, I don't think this guy's right, but he might be. And if he is, what hedge would I wish I had in place?

just in case. And like, you know, this is the most likely thing to be true. So then let me like allocate things that way. So that's generally how I try to approach things. I do like that. I would say However I know my my uh my Achilles heel in this is that I do get drawn. To the to a bit of the sexy underdog opinion, the conspiracy opinion to kind of like

This is the contr the most contrarian opinion appeals to me inside'cause I'm like Oh shit, there could be a mystery that we're on to that nobody else really fully like people don't believe it. That makes me want to believe it more. And I think that's led me to make too drastic of a decision in the past of like selling all of my Tesla or selling, you know, seventy percent of my stocks or whatever. Like you know, like it it doesn't have to be that dramatic. Like I should just put into place smaller hedges in those and track them and be like, cool. If that's true Then six months from now, I might be seeing more of this. So let me check in at that time and see if the signals have grown stronger or or faded.

Right now you're in Ed a little bit in advice giving mode because I'm asking you questions. But To swap it.

Who do you look up to where you're like, I need to be more like them when it comes to Personal finance. Mm. I wouldn't say there's somebody on the personal finance like managing your own money. But there are a lot of people

That I look up to or or find uh I talk to to get ideas on What Game are they playing to generate more money.

So I don't I don't really seek or f well I'm not that interested, frankly, in like Well who are those people? You obviously like Andrew, our our friend Andrew Wilkinson, tiny

Tiny dot com. He took the company public so you can actually go and see the numbers. So you like Andrew. Yeah, I like Andrew. You like Xavier. Uh I like his Xavier, yes. Said Balke, I think had real uh uh had really interesting things to say about what he does. Like I'll give you just a funny example. So S Sa Said, by the way, he owns this thing called WP Well I actually it's called Awesome Corp. He started as a blog called WP Beginner, which was a blog on how to use WordPress. Now he owns. Tons of WordPress plugins. I don't know how big it is, but I bet it's worth half a billion dollars, of which I bet he owns most of it, and it probably does many, many, many tens of millions in revenue and probably

Tens of millions of profit. Right. Yes. And uh yes, as in directionally, yes. I don't know the exact numbers, but he basically has a business that's amazing. That's a monopoly. It prints cash and then he does interesting things with his cash. Like he owns like, I don't know. 40 gas stations or some shit like that. It's like, why do you own gas stations, dude? Is that a good idea, bad idea? Does it take up a bunch of time or not? He's like No, these are triple net leases. I just own the buildings that other people operate in and they pay for all the maintenance and stuff. I was like, Oh, okay, interesting. So I did a call with him once and he's like my mentor taught me one thing, which was um

Okay, you wanna y you don't spend it's kinda like the I don't know the math uh I'm not I'm gonna say a math term, even though I don't know math. I he's like you don't spend like the first derivative money. He's like basically what most people do is the cash comes in from the business. Then they spend that money on life expenses. No, no, no. You only spend the second derivative. It's like

Cash let's say a million dollars comes in from your business. You don't get to spend that million is not spendable. The million has to be invested into something. And then the income from that investment, that's what you get to spend. You do that, you'll never go broke. And I was like, Oh, that's interesting. He's like, Yeah, so like I wanted to have a kid before we had a kid. I bought a gas station. Gas station makes six grand a month.

That pays for this kid. I was like, wow. What? And that's the how his brain worked. Interesting.

Again. Thesis, line it up. Say does that uh does that seem like a way of life I'd like to do? Maybe, maybe not, but like I w I I find it interesting because he says different things than most people. He does different things than most people and how he runs his life and how he runs his businesses and what he does with the money. Um You know, he was the one who was like, you know what? I love buying businesses like but there's another strategy I do where I buy these like thirty to forty percent minority stakes and businesses that I can help in these two specific ways.

And they're they're gonna keep running it. So they get a little liquidity. They get to r retain control and I'm gonna help them break through the plateau to get to the next level. He's like, I love doing that. I I look for those deals. And so when I invested in Shepherd, it was exactly that it was I've exactly that mindset. I was like

What's a great business. That I already believe in and am a customer a customer of. that I can buy a minority stake, let them keep running it. but then help them get to the next level by doing these two things. And um Has your contribution to that already do do you think that that that your contribution has paid dividends in their business yet? Yeah, of course. Yeah. We're last two months have been the highest

Two months of the business. And the history of the business. So it's great. And for me, that's great too, right? Like I'm already I've already paid back, I don't know, three three percent of my money or something like that on on that investment. So like, you know Wow. In terms of the oh, could I put my money in the stock market try to get eight percent?

Or this thing's clearly this thing's gonna do two hundred percent a year, basically. I don't know, unless something bad happens. So that's like you know, a great use of okay, yes, I maybe I sold my whatever Amazon stock or whatever stock, HubSpot stock, whatever it is. And I missed the kind of like a little bit of the balance back, but I put that money into pri to work in a place where I felt like I had a little more control and and could see a gr a path to a much greater return. Um with with more risk, I of course. This episode is like the personal finance episode. I'm very curious to see if you listeners actually enjoy this stuff.

Next time. We gotta get back to like the business building stuff,'cause I think that that is interesting to more people. And it's also interesting to me and you. But I'm very curious to see if this is useful for people.

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