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 could ever dream of making. I feel like I can rule the world. I know I could be what I want to put my all in it, like a days on what's going on in New York, headed, back to Austin tomorrow, but I'm good. How are you? I'm doing great. I'm stationary where I was,
M, and not moving anywhere. What did you say? You tweeted out? You said I'll be in l.a. Who's up for? What did you say? I said knock knock. Who's there Knock-Knock? Who's 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 if you're making technology do this. Oh yeah, I can't tell if you're making fun of me or if you actually want a plunge, do you a small part of me that
The plunge, but I know that like, as feel like it's gonna be like, maintenance or something for me, that's, I'm not really that interested in that, but I thought it was funny. I was like, you know, basically making fun of you saw Hill and the like everybody, the everybody who has a cold plunge is 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 going to post every day about this. It's like, it's like, yeah, brushing your teeth, man. It's just part of my routine and I just
do it. And when I do it, I want to bring you all with me. It's pretty just get this on my story every day I'm doing this.
We'll have to put an Andrew huberman, Saint a vegan and like a crossfitter all in one room and see, like, does spontaneous combustion just
happened. 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
What we're going to do right now is I want to do something that I only do privately. I'll do it publicly so this is that can go different ways but you could critique me but basically like, with some of my friends and some people in Hampton, 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. You know I'm saying, I know exactly what you're saying, you don't have to keep asking. I know what you were saying.
No, I'm saying you asked this question. A lot to our guests. I think it first started with Ryan holiday 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 kind of how he 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. Alright, the portfolio review and I guess I think we're going to do this like the other way. I like to ask the question is if there was a pie chart you know,
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. I don't I don't particularly like that, but I'll be very transparent about something.
Yeah, we're not going financially streaking here but you know, yeah, we can go to the beach because yeah. I'll take my shirt off.
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, 21 years old, was to start and sell a business, by the age of 30. 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 security. So that's like a lot of people listening in the YouTube comments. I know they're going to say. But how did you get like
Blank. Well, we talked about all the time, but anyway, it was about starting in selling a company. Another thing on like 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 going to 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 the stock market and the gains could pay for the rest of my life without ever having to touch the principal. So that's kind of 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 explain something without numbers. It's hard. Let's pretend.
For a second that when you sold the Hostile you made 10 million dollars after taxes, let's just pretend, that's true. Yeah. Well 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 of 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 could 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 20s, 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 10 million dollars, you can put draw out three percent of that per year and basically your nut your portfolio, that 10 million dollars.
Would hypothetically. And mostly realistically based off a hunter's of data continue to grow each year some years it actually wouldn't some years it would but it would average to each decade, it would grow. Yes. And that number is 3 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 going to 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? It's like you're not even going to like this portfolio reviews, not going to be like my crazy back door sweep. That's, you know, puts over here, some calls over there. Like, I'm pretty sure what you're going to say is that by the index by some bonds and then I try to build more wealth through my private businesses. Did I
Ready. 10. Exactly. Your portfolio review exactly what let's talk about percentages. What? And what index are you? Buying is one? Are you buying multiple indexes? What? Yeah.
Alright, so I'm going to break this down into four categories, category one. I'm just going to call it the big account. I'm not going to say who I use because I don't want people looking after me or going after maybe the second thing. So there's the big account which is the earnings from my sail. There's other Liquid account which I'll talk about. There's non-liquid stuff and there's private companies stuff. Okay, okay,
okay, so the big, the big account
I have 79 percent of that in vti, so that's just a Vanguard Total Index Fund. Another 15 percent of the pie chart is in short-term treasuries, which are currently yielding. I think 4.9% and I think it's like 60 day term meaning every 60 days as of now, we're rebuilding re buying them. They could be 90 days, I forget but the short term, and then 6% in a real estate fund. That buys, Walgreens, I think it's called like
Oak tree or I don't even know. Just some boring thing that like owns like either hundreds or thousands of wall green buildings and Walgreens releases the buildings
and year-to-date UTI up. 19% one your chart 15 percent five-year chart
57%. That's fine. I'll take that all day. What's vti historically over the last 30 years? I think it's like 8% a year maybe. Yeah, I don't know what 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 1%. Now they're like 5% 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 which is where I keep cash,
which is basically all of 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,
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, the whole Market goes down, I'm Diversified, I will also go down but less so than somebody who is 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
wealthfront. 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 30-ish are like to do that. You basically have to start a business
and not only that, I think you the likelihood of selling a business and getting there is probably higher because if you start a company at the age of 21 and you want to earn
In 10 million dollars, you can assume that more likely than not your first three years. You're going to make minimum wage or in my case, I made 20 grand a year. I made two thousand dollars a month is what I paid myself in the first two years of my business. So that gets you to like the age of 25. Which means you have to average something like two or three million dollars a year in profit because you got to get tax and that will accumulate to like 10 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 differentiation here. It's about selling.
Is Cash, flowing your way
there. That's my opinion. Yes, and the way that my, like, quote big account works is I keep roughly 100 to 200 thousand dollars in my checking account. Any number or savings account. Whatever you use. Any number above that. Go straight into my investment fun. This big account. All right? The second one, I got a sugar. Mama have I told you that? How is she doing? What's her name? Her name is Sarah.
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 with public and December. I think of 2021 we thought that they were going to go out of business. We didn't think are being me was going to work out. Turns out they did awesome. I think what she started working there, I think the valuation of Airbnb.
Be was ten billion. It could have been a teen. I don't remember when I poed. 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? 93 billion 93 billions. So I think it was like 8 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 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 401k that I've always maxed out and then I have Bitcoin that I bought in 2014.
Teen, but basically, it's just sat there dormant forever and I don't even know what it is now. But right I have not sold any of it. Have you ever sold Bitcoin?
Yeah, she'll Bitcoin at a couple different points. Each time I sold was a poor decision and if I tell you the first time I sold, so I bought back going like back was like, $300 stuff. Like, that was my original original by think 400 was my average. It shot up to, I don't know. 3,000 4,000 at one point, I go to a wedding and my aunt I think I told the story before my aunt who
Like you know, an Indian Aunty is a walk into a conversation, she's having with her friends and she's she literally goes, oh yeah, a theorem is very good and I was like my aunt's talk about etherium and saying is very good. And I was like, well, how can you say it's good Tyrion. It used to be this price. Now it's despised, 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
A moment when like your Indian Auntie is on the east coast is talking about assets that like you know a good because they go up and telling her friends, they got to buy and I'm like, this is gonna be a bubble and I was right and wrong. So I immediately go and I try to liquidate everything. I try to sell the whole thing. Everything I have coinbase limits. You got wait, was it really? Because of that? Literally, because of that, I so I that night I go try to sell everything coin basis, limiting me, because you can't just sell, like, lots of lots of stuff at once. They're like, you can only say I don't like it.
15 grand at a time or something like that. So I'm 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. It kind of wore off Bitcoin shoots up to 19,000 in like the next two months, and I was like, oh my God, what am I doing? I'd miss time. The bubble and then it goes back down to like whatever 3000. I was like, I feel good now and I was like, this is stupid. I shouldn't just feel good and bad.
It's been trying to time this. Basically, I've either believe in this are, I don't in the long term and I should just, dude, I can't believe that you let your aunt that one story suede, like change your actions. That's happened to me multiple. I told you about the Tesla 12, I really own a ton of, like the only stock I owned early on was Tesla back in Tesla was like very like, kind of like a young stock. It was like, maybe like a two or three billion dollar valuation, maybe five and I want that now like 600 billion or a trillion or something to it, went up to basically close to a trillion
Now I don't know what it's at.
I could even do that math, so what's a thousand dollars in Tesla? That's two
billion dollars had. I had a very small amount of money at a college I had like made, like, 25k and my first job or something like that. And I saved enough to like invest that much or 25 30 k or something and I did the math once. Yeah, it's a 900 billion now. So it would have been basically. I remember when I had done the math, it was like oh that 25k would have been like six million dollars by now my child and instead I went on Reddit and there's like I don't know.
Don't read it. There's all these like it's called like Tesla Q. It's basically like a group of people that believe that Tesla is like going to 0 /. Like maybe it's like fraudulent and there's like all these lipos sending they say that they have fake cars, right? Like like there, it's a photoshopped images that fake cars but like, lots of other things like that. Like there would be like guys with bad guys. There's just Garage in Phoenix and look at this and he would go to the garage. And there was only Tesla's parked on six stories that he's walking. He's like they're stashing them here so that you can't
Over there like because if they just leave them in the factory lot it's clear. They're not selling this pot piling up. He's like dude look at this. This one has any. So I put his finger on, 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 / 333, kitty, kitty, like, No. 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, what why I 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 high, I tripled my investment or quadruple my message and I was like, yeah, I'm getting out of the top boys and then, you know, it like hundred X since then, it wasn't really wasn't, right? That's the second
time that's happened to you. The first time I happened to you is what stripe when you had a job offer, I think at stripe and oh no, I'm sorry. I blew the interview. I didn't get the offer.
I only applied to one job, it was striped back.
Thousand and eleven or twelve. So I would have been like employee 20th stripe which is like a guaranteed like if you if you stick it out and you're there for 45 years or seven years and you kind of like work your way up a little bit, even as a junior level entry position, probably would have ended up over like a seven-year period making somewhere between 10 and 20 million dollars and 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
Mentor says, hey this person's amazing. You're like oh thank you Sensei. Like I'll listen here, 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 it was like, Wow glowing, five star review. Basically, I hand it to this guy's guys like, wow, if John thinks this about you, let's do the interview. Anyways, as a formality. Yeah, we gotta do it but like
I'm so excited to talk and we talk and somehow I blew like a 30-30 or 30 point lead during the interview where I am, he's like, okay. So like this is kind of like a sales position like you know, sell me a piece of software that you really liked. I was like as I sell me, this pen a I was like I was like so what I would do is I would basically just ask him a bunch of questions, they do know like ring ring. Hello, like just do it pretend I was like
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 think this is a sales. Probably not your thing. You probably not that good at this. So you know, maybe there's another position we can look for and I was so embarrassed at that point or whatever. I was like I just it's got basically rejected me and said maybe there's some other role for you like you know down in the basement maybe you could fold someone's laundry. One of the engineers laundry and I was like all right fuck it I'm gonna go for this other job instead
and they enter the guy was like it was like so Sean.
What do you know about stripe and like the banking system Sean's like, why I like money? I would like, I would like to have some more of it. We found quite right? Yeah, I think Stripes those crappy, sorry. Sorry. This is strips. Let's see. Adidas logo your love it. That's how bad her view went, so that blue, you blew that one, but that's okay. That's okay. You? Let emotions sway you and I'm gonna give you
A lesson here and that I
never do that. So it's okay. Your weakness is my strength because 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 with my God I'm such a professional that I've lost more money than you could ever dream of making.
When we sold the HubSpot, I think the stock was 367. I think it went up to like 860 and I was, it was amazing. And then I went down to like 250
50. And I remember thinking, like, man is this right? Is this right? What do I do? And so like that, that definitely impacts me. Like, I definitely want to stop
by the way, I literally did it with the HubSpot thing I bought Hub, shot stock, bring it 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 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 worn again, Tesla few. There's all these warning signs about where the economy is going.
I think I have a much bigger Edge just like in my own businesses and in private businesses. Let me 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 take to your investing and yeah basically sold almost the exact bottom of the markets. There's a guy somewhere in air traffic control. He's like the bottoms and he's out, he's out.
Most people only hit rock bottom once in their life. That's like the point of the phrase Nitro. You've got too many timely. Yeah somebody's ass. They're like, they're like oh so what are you doing with your kind of Investments? I'm explaining what I do and they're like so what do you like, you know what, if you feel like your safety, net or whatever? Like and I was like 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
I can't lose all this. Who cares? I could get a, you lose all of it. I'd make it all back. Like I have no I am the safety net. You know a bond portfolio is not my safety net. My 401k that's locked up till I'm 65. I don't think of that as my safety net. I am my safety net. And that's I think that's an approach. Honestly, if you're like high-caliber I see so many people that are hike at really high caliber people that play it so safe with their finances. I would count you as one of these people and
You never look bad. But I also think you leave so much room where like you didn't need to like have you spent a dollar or like I've spent more than 10% of the money from the hustle sale?
No way, definitely not
fireworks that you have even spent a dollar from that
account. No. Not I've never pulled money out of my bank account. The most expensive thing I bought was a hundred thousand dollar car of which I think you bought three like last
one. So
I'm not that you've
got three all-white G-Wagon, let's all say.
So, so the thing, you know, 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 achieve, the thing you exactly wanted and not a dollar has moved in like two years, three years. Or you haven't like move the dollar from it in a way.
Bought you, you spent 10 years to save up for this power tool and they just leave it in the case and I don't know if like I'm not saying that my way is right, but I also know that for me, 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 as I get it done, 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.
The long-term View and I'm like, dude, you're fucking 95. There is no long-term view like there that doesn't exist. Right? And so it took to criticize myself. I am horrible at spending money ramit Sethi who we have in the pot. 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. I think that these are just like personality defects and oftentimes what makes you good at
Being makes you bad at spending and I think that it's 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 not quite halfway in the middle. I think I should of what you believe what I believe. I think it's more like I should loosen up a bit but yeah that's it. I think typically what I've seen is people who earn a lump sum like a start-up where they are poor, and then suddenly they're not poor. Those people tend to be more like me where they're really tight wad in their Frugal and they're cheap.
And that causes a lot of anxiety people who earn a 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 you know. I mean just like running out of money. I'm going to share without sharing somebody's name. Somebody friend of ours, set me a presentation that they did that they made a kind of like about their life as part of like one of these like peer group things don't happen.
But a different one so we don't we don't plug. No other names have no other groups on this podcast. That's right. Thank you, appreciate that. So so I sent me the thing, I thought 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 think had a couple slides. I thought were really good. So one was. This person had sold her business for over 100 million dollars. So they have like a nine-figure exit of their business and the next slide. 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 is bike is two thousand dollar bike so awesome by most expensive purchase most expensive item I've owned since it's been like 10 years or something like it's like whoa and I until I recently bought a condo finally like last year, this was the most expensive item, I owned love this bike and then I was like, okay, interesting and then and then there's another slide that said top 5 Financial mistakes. That I've
Learn to cope with love that title and has five interesting ones about basically like sold this to early sold this to Hurley was gonna buy this and talk myself out of it because it was a fee associated with it. I would have made like 20 million bucks on that, you know. So I think that's just a great exercise that go on which is like you can survive a bunch of bad mistakes. And if you're going to play the game any like any good start of investor has an epic anti portfolio, a bunch of businesses that they passed on that they should have invested in.
And that's that is part of playing the game. You can't play the, you know, it's like being a basketball player and you know that Michael Jordan commercial. He's like, I've missed three thousand game-winning shots or whatever. It's like, yeah, that's what happens when you're eating play. You're Going to Miss shots and like, you can't. Yeah. Every everyone has like, I literally know 15 people that have the same Uber story from like, that was like, that was like, the famous 14 years, which is, I passed on Uber, I passed on Uber. Everyone said I passed on Uber. Like, 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 kalanick. The
founder calls him out as like, you know. Yeah, he's like,
dude, I think my wife, he's like, I think my wife, my children and Travis kalanick, meaning I was super close with them and I still pass on that, and that cost me a hundred million dollars. Actually, I think that's like a famous story says, so yeah. Everyone has that story then. And, and let me give you two other
sides. And since then it's been, there's two slides called my effed-up relationship with money. I think I can read this. Let me see. So 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 the money I know that money is good for one other thing, make you more money, you know? Like that's that's something 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. Like I feel guilty spending on myself, my parents were the same way they spend on their kids or spend on like other things but they wouldn't spend on themselves and that's annoying. They they did it and now I'm doing it, he said I bought
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 because I'm comfortable losing 500k, an investment just like that, but if you said, five spend 500 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've been looking at. I should be helping been looking at your company. Well, I've been looking at your company Shepherd. I think it's like 3,000 a month for an assistant.
Of which I desperately need, but I'm like three thousand dollars a month that's but well, the it's not a fee, whatever. The payment is the person who hired them. Like you pay 30 percent of their salary as a Head Hunter 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 this the the person's being the person's salary and I'm like, well, that's 36 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
Really the key my own name. I really be valuable, and that might be a 15-year relationship. Now, I'm talking about a five hundred thousand dollar investment, but I could also put that in vti and it would compound a present. And now you've talked yourself out of it when I was buying my wife's wedding ring, I was like, 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 80 years because we might live to be like 110, that means that that's only eight hundred dollars a year and that, that's okay. 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 talking about? It's 100% most immigrants that I'm bit around, have or not? Most, but met, this is sounds like a very much, an immigrant problem, right? Of, which I'm the exact opposite of an immigrant. But that's why I do, that's why I like those guys identify with. All right, listen up. One of the greatest things I ever did at my old company. The hustle was, I hired this woman named Step Smith step is amazing. She is so good at breaking down complex.
He's and help me give me predict Trends, which businesses are going to blow up. She's so good. In fact that Andreessen Horowitz one of the most famous Venture Capital firms in the world. They stole her from me and they poached it from me. That's okay. I still love Steph and now she's the host of their podcast called the, a 16z podcast. It's their long-standing and chart-topping podcasts, and it's awesome. And step is the host step comes on. MFM my first million all the time. You guys love her, she's a fan favorite. And she's one of my
It people and so you should check this out. So each week, the a 16z podcast gives you Insider access to the people and ideas at the edge of innovation steps. It sound with luminaries like apples co-founder, Steve Wozniak, Neal Stephenson and all types of amazing people. So check it out. It's called a 16z podcast. That's all one word. A 16z podcast. Check it out. We have this is this funny experience yesterday. Where another friend who also
Mega mega wealthy where we met him and we met up with this person in person. They were like, you know, I really want to like shifted to like family mode. Like I'm ready to like meet somebody have a kid like you know like I want to do that part of life now we're like that makes total sense. Good on you your you know you did the money thing. The business thing you you scratch that itch you proved you could do it now, you're in your 30s and you're saying you know what? I have 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 Family Guy. I want to do that. So that was where we left a conversation.
And now my business partner, Ben Ben Levi, he's like the man with like checking in on people checks in, on everybody, he's always riding me the stream of updates about like what people are up to, and it's great and so he's like, you know, that friend. He's like, he's like doing something new and I'm like, like, not just doing one thing news. I guess he's like for projects, he's cooking up and I was like, oh, that's interesting. Like, what happened to the whole? Like I want to actually focus on like like finding a partner? If starting a family, like, what did I say? Oh yeah, he still wants to do that.
We start in four companies. I mean that it doesn't seem like that's gonna be very conducive to like you know, put 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 with a lot of smart friends that are not that wise about like decision-making. So they're intelligent for sure, but they make decisions
As they don't really make sense. If you zoomed out a little bit, how old is this person? I do. Like, I do mid 30s 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 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 wisdom power. You know what I mean? That's what I'm saying. Like I'm not telling you, you gotta go get married and have kids but if you told me you wanted to get married have kids and then instead,
You're spending all your time, doing these other things that are going to completely make you busy. And if I asked you, why didn't you why hasn't this happened already? It's like, oh, I'm so heads down in my company. It's a cool. So, why are you getting heads down? And for companies now, that doesn't make sense either, and I texted Ben I go, man. We're yeah, I'm guilty of this in other areas of my life, right? Because again, if you spot it, you got it. So anytime I notice something other people I'm like we're in my life. Do I make the same stupid mistake? And I was like, oh, it'd be like, like, yesterday I canceled. I do something. I very rarely do. I almost never do this.
I canceled my workout because I was like, had to doctors appointments, and I was like, if I, if I do, this will work out the middle of day, then I'm just not gonna get any work done today. Cancel my workout 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.
Yeah, 54 days left, I think,
right? Yeah, Monday. I'm on 49. 49 days
left. Yep. Yeah. 49 days left to get abs.
I'm eight weeks away from being that guy. So so, but I guess I
The point is that's an area of my life, where I make a stupid decision that's 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 is doing that with your relationship. Their main goal is to get married 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
And the most valuable because it's like a lever you don't have to be that hard working or that smart. If you have great judgment, if you pick the right things to focus on pick the right, people to work with pick the right place to live. You don't have to be like 9,000 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 just really emphasize that point to me about like, you know,
Does not equal wise and the goal is wise not smart. I
think that's a good one. I like that and it's like when you're driving and you say everyone such a horrible driver. It's like dude that is get you to it's like there's like some weird emotion and logic that don't make sense there. And then my final accounts of which you can these last two you're going to have a lot of opinions on the last one, or the second to last one is mine on liquid stuff of which it's roughly 3.8 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 $550 left. I own a ranch. I own some vacant. Lots in Austin, and I'm a small owner in some storage deals, 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 not, that would be around five hundred thousand dollars of startup Investments. The way that I see that is I've done roughly 50. I think 40 will probably not work 10 will work of which three might pay back, everything plus a little bit and I've reduced the principle by a significant amount.
Just in assuming feature net worth and anything above that, whatever it maybe it will work. What do you think about that?
Yeah, I think basically startup investing is is so so long time Horizon, right? Like you have to assume that these are going to take seven to 10 years before they pay out. So even if they are worth X, they're not really worth X to you. Yet 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 never calculate net worth because I think that's
It's kind of useless because it takes into account illiquid things that are going to either like, go to zero or go way up in value. Like my own businesses are going to either go to zero or go way up in value, most likely, and there is liquid. So what does it matter? I can't do anything with them right now. Anyhow. So I basically only calculate liquid net worth when I calculate it. So that doesn't include any my own businesses. And I also don't include any startup Investments because it's not liquid yet. That doesn't means not valuable, but it is 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 Culp, our media. I assume that has zero Equity value. I live off that income and then 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 40 or 50 million in Revenue, in my head, I
Umm, 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 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 well I just I don't mark it a zero I just I'm not calculating total. Net worth, I've only calculating liquid. So if I try to calculate total net worth and it included, I 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 not a great.
Thing to up like I'm in search of a better metric.
Well, there's earning so an income, do you measure income, but that income is
like only things that are, you know, it's going to buy his way too hard to get to things that are only generating cash flow today. So it's not going to count really any like an
axle. So I mean 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 we're to come from?
Yeah, not religiously but it's mostly like steady. I kind of 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 like in the same range roughly 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. I'll kind of 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 25 or 30 thousand dollars a
month. Yeah, I think I'm at 30 30 km month of burn, life, life,
expenses and I 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 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 Jedi mean, what are we gonna do without it? It was insane to me. I've got
another friend that spends 80 thousand and I'm like, gasping, right? But I guess like everything changed. When you get when you get two different
Levels. But so anyway, that's kind of like my portfolio. I want to say that a, this is an advice but also I basically do the most simple conservative stuff I use tiller. Have you heard of tiller? I think the website is tiller hq.com. It's like a plug-in and I track this in Google Sheets. What do you do track anything like your accounts and any other cities apps somewhere like connecting my shit to these random startup apps like our the you know I don't want to can I don't want to put all my stuff into these apps so I because I'm not that concerned.
With it in general.
You're the fewer things that you're concerned about the better, in general? Yes. You just lighted really like a tional checks and balances. So every three months, I sit down and by hand, I write that I write out where I'm at with liquid stuff, where I'm at income-wise at where I'm at, monthly burn wise, every three months. I do that.
There's like a there's like a logistical problem. Let's say your wife has a 401k 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 are five accounts, plus a checking, plus a savings. Plus, like, let's say that you each have like a Robin Hood account or an ETrade account. Plus her previous before you were married. Maybe, checking or savings. I mean, like it kind of can accumulate whether you have money or not that you have 8 or 10 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 no or finder access a bunch of stuff, especially the crypto stuff, how she could get to that. I've told her three times I'm like you're not really paying attention.
Enough to remember this like 90 years from now. Something happens. It's like I don't know what's going to have with that. I that I am 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 treated like a spa day is like, right. I think you talked about this concept of worry time you like, I just scheduled some worry time in the future. Every time that I do with this, I don't call it worry time because 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, today's that day. It's me.
So let's have a little Financial picnic. All 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 was 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 have you you as being quite crazy. I've got one friend that made like a hundred and fifty million dollars and they invested like the majority of it and only two things there. Next company. And
House and they're like, I basically don't own any like, bonds, equities. I got very little savings. So I consider that person be crazier than you, right? Or a similar amount of crazy. But potentially on 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, would you say crazy? Do you like is this kind of like oh this bomb on the streets? A little crazier? Is it like wow that she's hot. But she's crazy. Like which one am I? My heart go crazy. Or am I?
Bum crazy more like bet it all him on black 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 by Angel Investments. I don't view you as
The absolute Optimum way for me personally to make money, but I love them because I learned 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. So I use money as a tool. That's the first name. Money is a tool to enable a better lifestyle. I think I abide by that law. The second thing is money is no fun when you're stressed about it. So there's a city like a strategy that just says,
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 like it could be a nothing. It could just be literally sitting in 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 0
I would still have three years of Runway and again, I'm me, I am my own safety. Net. If you give me three years of Runway, I'll have it all back and more by then, like, you know, if I needed to to make money a focus. And so I do that. So to me, I'm like, if I have three years of life, expenses, put away, but what am I worried about, right? So I do that. The third thing is, I know if I'm in, which gear am I in wealth creation mode or wealth preservation mode? So will I view myself? Still hasn't wealth?
A shit about 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 and things that I believe in and I know I'm going to make mistakes. I'm gonna have some things that go to zero. I'm going to 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 shouldn't sell like the
The only investment mistake I've made is just
selling, okay? But are you actually going to you've just acknowledged and we'll go, well, we can make fun of me after this, but you to acknowledge that. So are you making
- exactly? So I made that.
But okay, so you're not going to sell ever or often.
I'm buying things, I basically default to say this is only, you have to break glass if you're going to sell this. So basically, like you have to really have a reason like either you need the money and you got to sell the thing or something in the world has changed that caused.
As you to like, re under write this. Now, I would argue I kind of did that with the last time that I sold when basically like the post covid, kind of like what's money printing is going on, what's going on in the economy? Everything all the stocks crash, I thought. Okay, we've had a 13-year bull market, we're probably not just going to have six months of bad times and then back to the good times again, like I still kind of believe that that's true, but I should say, I wasn't in a place to re-enter right. That, that those Investments because I was now thinking about
Macro stuff. We're like.
If I'm sending 30 percent of my time on Wikipedia, that means I'm not informed enough to be making an intelligent decision about this. 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 30 or 40 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 as is has been repeated many, many, many times and isn't exactly new for an and the counter example, that is
Balaji said all the crazy stuff about what was his argument that Bitcoin is going to a million because like this reason in dollars going to have that shit scares me and I'm like, I don't understand that. That's so new. And it legitimately scared me where I was like I
do, I don't try to do that because with 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, Linda effect says that this things that a stay valuable because it's been valuable and I'll like cling to that evidence, but
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 going to 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. So here's Theory a about where the
world is going right now, about
what here's thesis a here's thesis be, here's the easy to see and then I basically
Calise inherently just one of them just intuitively. Make more sense to me. Does it? Really 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 go. Now stack, the evidence. Okay. Now, which one appears to be the strongest thesis. So instead of going to turn 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 Balaji whose life you
actually talk to them.
Just consume and
probably not always sometimes. But like not always like, you know, like biology 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. What he believes to be true. 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 the, you know, the money printing is, you know, is out of control. Inflation is higher than they were admitting and that this is what is the result of this? It's
Right. 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 is at the tail end of the cycle. So you're gonna read that book, you go watch this talk. So you're like, all right, that's one. Another thesis, you have some people who say, no, you know what, this is going to bounce back because even with all the problems America has, the dollar is still the best thing we got out there. And that when all the all the countries of the world, get weaker, they'll actually flee to the, whatever this relatively strongest currency is and maybe that's the doll.
And the dollars going to drink the whole milk shake basically say. All right. Cool. That I didn't make this some something I found out it's called like the the straw that drinks the shake or some shit like that. People talk about
some There Will Be Blood because if I had a long
strong all the way over there, I drink your milkshake, I drink it up. So you really 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
True. Can I hedge? So it's like, you know, I don't think this guy's right putting might be and if he is what Hedgewood 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 Achilles heel in this is that I do get drawn to the to a bit of the sexy. Underdog opinion, the conspiracy opinion, the kind of like this is the country with the most contrarian opinion appeals to be inside because I'm like, oh shit, it could be a mystery that we're onto 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 so.
Yeah, 70% of my stocks or whatever like you know, it doesn't have to be that dramatic. Like I should just put into place smaller hedges in those and track them and like cool if that's true, then six months from now. I might be seeing more of this. Let me check in at that time and see if the signals have grown stronger or
faded, right now, you're in 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
Be more like them when it comes to personal finance. Mmm.
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 find 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 I'm not that interested frankly. And like well-managed, who are those people? You obviously like Andrew, our friend, Andrew Wilkinson, tiny tiny.com. He took the company public so you can actually go and see the numbers. So, you like Andrew, I like, Andrew like Xavier. I like a savior. Yes, side bulky. I think. Had had really interesting things to say about what he does. Like, give you just a funny example. So side, by the way, he owns this thing called
WP why it's called awesome korpi started as a Blog called wpbeginner 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? And yes,
as in directional. Yes. I don't know the exact numbers but he basically has a business. That's amazing. It's a monopoly. It prints cash and then he does interesting things with this cash.
Like, he owns like I don't know 40, gas stations or some shit like that. It's like, why do you want gas station dude? Is that a good idea? Bad idea. Doesn't that take up a bunch of time or not? He's like no, these are triple net leases. I just own the building's that other people operate in and they pay for all the maintenance. So I was like, okay, interesting. So I did a call with him once and he's like my mentor taught me one thing which was okay, you want it. You don't spend, it's kind of like the way. I don't know. The math. I'm not mad. I'm gonna say a math term even though I don't know math is like you don't spend like the first derivative
He's like, basically, what most people do is the cash comes in from the business that they spend that money on life expenses. 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 that 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 such a thing. He's like, yeah. So like I wanted to have a kid before we had a kid, I bought a gas station, gas station, make six grand.
A month that pays for this kid. Wow. And that's what this is how his brain works. I was like, interesting again desus line it up. Say does that, does that seem like a way of life? I'd like to do maybe, maybe not but like I want I find it interesting because he says different things in most people. He does different things than most people and how he runs his life and how he burns his businesses. And what he does with the money, 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 are 30 to 40 percent minority stakes and businesses that I can help in these two specific ways and they're going to keep running it. So they get a little liquidity. They get to retain control and I'm going to help them break through the plateau to get to the next level. He's like I love doing that, I look for those deals and so when I invested in Shepherd it was exactly as I exactly that mindset. I was like what's a great business that I already believed in 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
as your contribution to that already, do you think that your contribution has paid dividends and 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 to write. Like I'm already, I've already paid back at another 33 percent of my money or something like that on that investment. So like, you know, wow that thing's gonna, you know, in terms of how could I put my money in the
I'm gonna try to get eight percent or this things. Clearly this thing's going to 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 bounce back, but I put that money into to work in a place where I felt like I had a little more control and could see a path to a much greater return with with more risk. Of course, this episode is like the personal finance.
Sewed. I'm very curious to see if you listeners actually enjoy this stuff. Next time we got to get back to like the business building stuff because 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, I want to leave with something tactical. So I have this list of questions that I sell. I have this document that I have, but I call it the decision register where I basically write down every major decision that I make and so forth.
Apple. The very first one that I have in this list is from when I was 18 years old, it says quit prebend. This is sort of my was 20 21 years old. So I'm at the, I'm a senior in college. I'm pretty mad. I take the mcats but I decided not to go to med school,
the most obvious obviously, good decision you've ever made. So I then I have the,
here's the compass, even worse. Doctors would be the worst doctor. I'd like we can fix this the obvious way, but let's try something stick out your tongue, I'm gonna use that for yourself. All right, so and then I have an
Thomas has, did it seem big in the moment because one learning was a lot of the biggest decisions didn't actually seem big in the moment, but turned out to be an important decision. And then I basically have like, kind of the, what was the one decisive reason? Why? So, if I boil down, like, not a long list of pros and cons, like, what's the one thing that like the main reason I made that decision and then outcome and Lessons Learned. And so,
I'll give another example decision,
cell to Twitch and not to Facebook. Those are the two final companies that we had.
Given us good offers that we turned out more money from Facebook to take the twitch offer. Did it seem big yet felt big in the moment. Why? Because after six years of a start-up, I was tired and Facebook was looking at us, like we were going to save their kind of gaming initiative. You know, they were looking at us to like, make that make it happen. Well, as liked, which has already won. I like, I can just cruise control when I'm here. Like, let me just go play for the winning team versus trying to like take the underdog from the bottom of the league to the top in terms of this industry. And
And you know, then it's like, you know, one of the Lessons Learned is, you know, I don't know what the other side was. So I know what I got out of it, but so I think it was a good call. I'm happy with the decision, but you never know. And that's how a lot of these decisions go. So I have this decision register. Now a version of it would be like there's a bunch of investment decisions here, you know, like not buying a theorem and Bitcoin. When the smartest people I knew, literally working in my office, we're doing it at the time. Didn't seem like a big decision. I just kind of overlooked. It didn't even realize. This was a
Decision. I was making seemed weird, I just kind of laughed at something because it seems strange rather than leaning in and trying to understand why, why are you so excited about this? I like, hmm, could I place a small test or BET, right? So terrible decision bad call,
you know, and I didn't pay attention to a
signal which is what the nerds do on the weekend. We'll probably all do you know, in a few years and this is what the Nerds were doing on the weekend back, then they were really interested in cryptocurrencies. Okay. So anyways, I have this like decision register. Now with it, I have
A bunch of like questions that I ask when I'm going to make a decision. Let me pull that dock up real quick.
And you've been is this a running document that you've had for 10 years? No, I started it. Like
45 years ago but I back I tried to go back and figure out like,
and it's like a Google Docs. Google doc, exactly.
And I highly highly recommend this because, again, judgment and decision-making. Is the most important thing you can have, people are terrible at actually honing that.
They always say, oh yeah, I learned a lesson. Really what was it? Did you did you write down what you were thinking then and what you've learned since now like, you know you we put very little effort into this and so I basically realized one Edge, one source of alpha is to take a disproportionate amount of time then most people, it doesn't take that much time, right? It's like, you know, a couple hours twice a year, but just doing that exercise can improve my judgment at a rate maybe two or three x, what a normal person's would
Would do and then all of a sudden, people like man, you know, how do you know, like whatever, where do you get this wisdom from God? Sean, you're so good at your
soul ties. Yeah, you're such a good at decision-making. Like those abs like to
do something. Yeah, put it on me. So, here's the decisions that. Here's the questions I asked for an investor. So here's what I have to run through. I say, what is the decision? Explain why I'm doing this in a tweet length. So I have to be able to explain why I'm doing the decision in a tweet length. What alternatives did I consider then I consider any alternatives.
What am I feeling? And I have some options. Like extreme fear pessimism neutral boredom, fatigue, greed, extreme greed, fomo, right? Like those are things, that could be feeling right now. How long have I been thinking about this decision? Is it a few hours few days weeks or months for years who and what tipped me over the edge? So what is like kind of the last conversation or podcast or thing? I read that like
Made me make take action. What are the secondary benefits of this? So like, can I sleep better at night because I'm not worried about a margin call or something like that. If I took away all the secondary benefits, what I still make this decision. Yes, or no? What makes me think? I'm right. So, I have to write, why do I think I'm right about this? What makes it, what makes you think? I might be wrong upside if I'm right downside, if I'm wrong. So I have to define those two. I say what follow-up decision. Should I make to make this decision more successful? And then how do you predict that this is going to play?
A out and I have to, like, answer how I predict it's going to play out. And then, I basically set a date and says, what date will you revisit this? And so, I'll go revisit this. And so, I did this for when I sold all my stock. So I can go look at this right now be like, was I right was I wrong? Do I, what can I learn from how I was thinking thin? So that the next time, I can think better basically about this like how many decisions do you have that you've documented this way? I think I have done this maybe four or five times. Now in the last like two, three years, you know like selling you and was one for example.
Making a big financial decision investing in, you know, private company, you know, deciding to rent, instead of buy a house right now, things like that.
Do you consult your wife when you do these things as well?
No, I probably should she wishes I did, but I don't.
Well, not necessarily like asking for permission but, like, getting your her perspective. Yeah, that's the problem. I want her perspective, but I feel like there's like this. This is the most of psychology me is like kind of turns into asking for permission. It's a boy.
Point is, you know, like you gotta be aligned to do this. Like, what if she's not aligned? Maybe I'll just do this, which she ate and how much decision or how much like when you're selling the milk Road. You saw the last company I think before you were married. But when you're selling the milk Road, are you like? Hey, just so you know this is happening or is it like hey it's happened? No, no, I talked to her but I got her opinion on it and you know, several times during the process and she's very hopeful that it's more of the like stock or startup investment side.
Really remark is. I'm like, man. I'll have to explain so much context because it's not an area. She pays attention to, she doesn't pay attention to stock market, she never bought a stock in her life. She doesn't know about startup investing Angel, Investing or these companies, so I'm like, oh man, the context for that is really hard, but like, selling a decision to sell the company, or by a company, that's much easier to explain, right? No, I consult my wife, a ton on this stuff but I think it's more so of, like, I just need to speak This. And like, I need you to just like, be a brainstorming parros on the little bit like that.
Character on billions the like the office, like Wendy's like mine psychiatrist a psychologist whatever I feel like, she's like windy, like her demeanor is like, so even Keel. Yes, he's calmed. Just like I could see her being like, I'm gonna help you with this decision versus like this is our decision, I'm gonna have my opinion, you're gonna have your opinion, then we can figure out whose opinion is reportedly. Yes. And I think that I have a history of making emotional decisions and so I'm a lot of times I need someone just be like, hey, don't be crazy. Don't do this, right.
Now, just let me sleep on it. Just wait, just wait, dude. The decision register is good. I think you should. I think you're very talented. I'm these Frameworks. I'm going to probably steal that for Hampton because I think it's quite good. So you have to post it on the YouTube link. So yeah, I can actually read it. I do something similar, it's different. This is more organized, put it. I'll put a link to it in the description, the show notes for YouTube and whatever. And you can just I'll just make it a template people can make a copy of it for themselves.
And that's on, well, plug your thing small boy. Is it? That coordi?
Calm doc. Oh yeah,
a boy spelled normal or like baller
boy. Not be. Oh, I do not like. Is it like boy, small normal. This is the small boy doc. Oh yeah, dude. That thing is growing like crazy. We have like 100,000 people on the list now and it's amazing. That's like in a very short period short period of time.
Did you start at zero? I started
40K 38k, I think.
When did you start it? So I had 38k from
like your old email newsletter 52, Tuesday type of thing. And then basically at this start of this year ish like maybe February or something six months ago. Yeah. We five six months ago started any paid marketing. Yeah. Paid marketing
on a little bit of a marketing you know still I think half is like organic or something like that so you know it's like
Half organic growth, half paid growth to newsletters, man. The best, the best that I take all the credit. I take a closer to 100% of the crap that I get one hot. Not your effort, not your day-to-day hard work. It's all me of just saying newsletters are cool. Exactly I'll take that. I'll take 100. Newsletters are awesome. Dude. My my decision register for why to start the milk Road was like I think I know how to do this because I watch Sam do this like from scratch with the hustle and like
I think if you took the hustle plus crypto, that would work that was like, you know, the whole thing is like, pretty sure how Supple script it would work. Secondary
benefit hustle, plus, anything will work like this, do the hustle Plus, or as you say, it's like, you're like the milk Road of business and Tech news. Yeah. You know, what's the hustle? It's like the milk road, but for this thing, but, no, the milk Road, the Hostile plus anything. It's all that will work for the foreseeable future, I think.
Well, you know what?
Funny. I don't know how much you get hit up by these people who are doing newsletter, businesses, probably all the
time. I ignore them,
you ignore them. I've learned to ignore them because my friend remain has this great little framework. He says, which is that every business is hard. It's just hard in one of two places. It's either hard 0 to 1 or it's hard one to end. And what he means by that is like, it's some bizarre, really hard to get started and get initial momentum and then some businesses are really hard, like it really easy to get initial momentum. But then turning that into a valuable business that's like at scale
Is really hard and I would say, because of this podcast, people basically. See Sam did. It was that are Sean. Did it with a newsletter. I too will do you know, Dai version of this so I can I'll do the whatever version of this news letters are very easy 021 businesses, they're not easy one to n and as I've talked to people that are doing this and they're asking for a kind of advice or whatever. I'm
like, talk to me in six
months until one of the I am gay straight up. I go you're gonna drive, this is dry.
Going off a cliff that you don't even realize it yet, and I was like, he's like why? And I was like, you know, to explain this to you will take like, it is a time and like, explain what? I think you should do instead. I don't really feel like coaching that, but I'm just gonna tell you, like, please don't fall in love with this as is because I'm telling you that this isn't, this isn't going to work. This is not the answer to making something that's successful. Like, this is very easy to see, just the subscriber count going up or like, if you're in a hot space, like a, i you'll get easy saw sponsorship revenue for like, you know,
the next 6 to 12 months.
But like if you want to take this to the Finish Line, where this thing is spinning off millions of dollars a year in profit and you're able to sell it for maybe tens of millions of dollars, which is what all these people, I think would dream of doing. That's where the real skill comes in in this. And I think that is a lot of these people. I do not feel are equipped to do that based on what I hear their plans are
the person who's done it best. I think is awesome Reef for morning because it's 10 years old now. I think they publicly said that revenue is in the 70 to 90 range. I forget exactly what they said publicly but
I'm like that 200. 250 employees, I forget I went to their office. Dude, he's got like a tech office set up. It's like a beautiful office like he's done it all the right way. Where I mean, he's made a bunch of Errors, just like everyone but that they he's done. Such a good job of having durability and long term View. And also short-term like moving quickly, that guy's a machine. He's one of the more impressive operators of the thing is, people see that they see the hustle and they see just like the tip of the iceberg.
Right like this Iceberg Theory like when you see an iceberg in the water, you're only seeing you know the top little bit you don't see the giant. 90% of the mass is under the water. The benefit for me, with milk Road was I was there when you were doing just events and then blogs and he pivoted to the newsletter, we were to Mastermind groups were checking in every month. Every month we would meet. We've talked about what's going on, what you're trying to do. And so I got to cease The Five-Year under the water, like buildup.
And I think most people don't have that like that's a that's just luck. Basically, for me that I had that and that's why milk Road was able to work a lot better than if I hadn't had that most people don't have that, they're just trying to copy what they see on the surface level and that will get you kind of the 01. I don't know if that's going to get you the one to end. I, I think, for most people not, I think if you're great entrepreneurial, make it work, no matter what. The problem is, you survey 10 entrepreneurs, they all think they're a great entrepreneur, but we sort of by definition, not everybody's above average. Right? Like you get maybe one out of the 10 are the problem is
I'll 10 think that they're that one and you know that's gonna be yeah they're challenging what they don't see is that morning Brew at this point, how the hustle, I don't know how many employees they have now, but they don't saw ads. But with morning Brew in order to make 70 or 80 million dollars a year in Revenue, you need 80 salespeople. And if you have 80 salespeople, you also need 30 like people to like handle the stuff that they're selling. You also need my evergreen content. Like, you guys, talk about what's going on in general, with General business.
People who are doing these, AI newsletters right now, they're like, here's the latest new demo and AI guess what? 18 months from now that shit's not going to be interesting at all to anybody, and the advertisers are going to realize that the type of person who just wants to like see it. AI demo is not very valuable to advertise to milk road work because people who read about crypto like what's going on in crypto, were crypto investors. Crypto investors are a very valuable audience segments and that it so that was very different.
Isn't that just like so crypto AI? They're all just topics, right. They're all just the new thing. No. No. Because the people who write about crypto, we're putting tens of thousands hundred, thousands or millions of dollars into those portfolios and we're very valuable customer, that's not true with an AI reader, right? But they don't see that. They just see the surface level stuff. They're not thinking about it. Critically enough to realize that they're just writing this like kind of current momentum where every day. There's like a mind-blowing demo and people are curious 18 months from now that fit that's going to fatigue out. That is not going to be the case that and then
Also, your advertisers are going to realize that like cool advertisers of the random guy who likes to see, like, you know, the cool stuff that a, I could do that's not translating into a lot of money because that's not a very valuable audience demo. It's not going to
work. And you can't be a mercenary about the content. Like, a lot of people are like, oh, I just hired this person overseas and we use AI to actually make the content and that's really hard, not impossible, but it's hard at the end of the day. When you have a newsletter, you have to get someone to act, you have to say
I'm going to be at this location at this time and if no one shows up then you're shit. Sorry and getting people to do that. It's really really, really hard. It's very challenging at the end of the day, it's about getting people to take an action whether it's to buy something to show up somewhere and that's really fucking hard. If you're a mercenary versus a missionary and you're like, all in on this shit, that's why milk road work because you said, I one of the cool things, you guys did was I invested this much money into crypto. Here's my portfolio, you can see it as we go. I am a, I'm in this shit.
It and I'm going to talk about that. And then I just, I talked about the stuff that each day, it was basically, what is the thing I'm most curious about that was the only guiding principle. It wasn't like news, it wasn't announcements. Like if those were in the letter, these other cool that's fine. But the lead story had to be the thing that I thought was most interesting which was sometimes Twitter drama which was sometimes a cool product which is sometimes a price analysis, which is something whatever. And
That's very different than if you hire a journalist or an aggregator to basically like summarize headlines from stuff. And so you know that work for us, I don't think that's the only way to make it work, but it was one of the ways where it felt very different. And like you said, like if we said hey we're going to be here at this time and date people would cut people would come because they were excited and they were excited to meet us. They were excited to meet other people that are like them and the brand, you know, had some influence on people which is what you need in order to
To do this. If you just throw up a quick beehive newsletter and you get like you know, 12,000 subscribers and like you know, the number of subscribers is really the wrong metric. I guess that's the other way of putting it people. It's the easiest metric and again the easiest metric is not the right metric necessarily the easiest metric to look at, but I don't think it's the right metric to look at for a newsletter.
This is one of those episodes where we talked about stuff that I personally care about. I could talk about those newsletters crap forever. I could talk about personal finances forever, this rate, it might be a high ratio of things we love to talk about, but maybe our audience doesn't all entirely love but I'm very eager to see the response to this. I could talk about this stuff forever and by the way, I
think that's the only way this podcast can work is like I was watching this thing. Joe Rogan Joe Rogan doesn't go on very many other podcasts, but
One of the ones who goes on is like this breaking points news thing that he likes. So they interviewed him and they go Joe, you know, like everybody does podcast it, everybody does interviews. Not everybody's having like, what's your like what you hate, what you've created with Jerry, like what are you doing, differently? Breaking points is awesome. Yeah, I know. Breaking points. Yeah, soccer and I forgot what her name is a. Yeah, the woman, they're two, they're good, they're good. And so they and what do you say at first? He just tries to rush off. He's like, I don't know, I don't like, I don't know.
It's like kind of like fake humility but also like a that he's trying to make a point, which is it's not some calculated thing and then they get the guy pushes he's like but there must be something like whether you whether you planned it or you intuitively doing it, like, you agree. There's a difference between what you're doing, what other people are doing, and there's a difference in the results. You're getting, like, just if you had to think about it, what if you had to answer? What would you answer? It's kind of kind of pushing him and he goes, he goes, I think that's the thing. I don't have a like, I don't come.
Min with this sort of like plan or agenda. He goes look, when I started this podcast, I didn't think anybody listen, you couldn't even tell if anybody was listening and he's like, so I just really had nothing to lose, and I just decided to do it the way I wanted to do it. So like I just wanted, like, if I'm chilling with my friends, were smoking weed and that's what the episode is great. Because that's what I wanted to do. If I'm fascinated by this alien conspiracy and I can talk to the scientist great that's the conversation. I want to have everybody told me like this needs to be 1 hour long.
And he's to be shorter. Three hours is just too long. He's like, but I didn't like how the conversation was going to be in an hour. I liked having the three-hour conversation so that's what I did even though it like you know broke the rule, it wasn't like audience driven he goes and so now he's like basically that's what was working so I just decided not to change it. Is that basically I just this podcast is a massive education for me. I have the conversation. I want to have in the way that I want to have it and you know, I just don't do things that are like
Into this. The audience is really responding to this. He goes that's how you end up like those late-night. Talk shows where everything is just fake. Like the host is fake, the interactions are fake. It's just like, it's all biggest political professional, but it's the least real thing. And he's like, I don't think people like that. Actually, he goes podcasts are professionally unprofessional and he goes, I, he goes, I just don't read the comments and I don't try to do things based on what the ratings reviews are going to be. It goes, I realized the only way for this to be interesting was if I'm actually interested in it.
Is that you can't fake being interested in it for very long. It comes through. He's like so the only way to do this is if I'm interested in it and then I'm just the audience will be what it's going to be at that point. Like it'll just be the other people who are interested in this and that's sustainable for like, kind of forever. And I thought that that is it relates to like, hustling minhas. He said this thing to me once he goes he goes, I'm not he goes, I'm like, why don't you want to tick tock bro like why aren't you more on Instagram? Like you could be killing it, do these are growing. I'm giving all the logical reasons to be.
He goes, I don't want to be on because I know to do that to win in those games. You just have to dance for the algorithm like whatever the algorithm wants. That's what you got to do. And he's like I just don't want to do that. I want to be an artist, he goes the best. He's like I come from Comedy and the best people who are the best comedians. They they're free. They just do what they want and they are the judge. They don't care really like, they pick up on signals from how people react to it, but like they are the ends decision maker of if something was good or not.
He's like, you see this in everything? Is it goes, he goes, I want his love basketball. You see, it's on the basketball court, guys like Steph Curry or Luke Advantage. They're free. They're just playing how they want to play, and that's it. They don't, they're not like overthinking it. They don't, they don't, they don't have this, like, voice in their head, that's constantly judging it. And thinking they're actually free to just create their art. And he's like, that's what he's like, that's like how the best people operate and rogin said the same thing about comedians, he goes if you watch, Dave Chappelle, he'll do these shows in front of, like, 50 people. He's
Done shows in front of 50,000 people but he doesn't 50 people. He's having a great time. He's having a great time because
he's out there, smoking a cigarette and
chills, he's just smoking to say. He's talking, he's not even doing plan material. He's like he's having a great time because he just likes doing it this way. And that happens to have gotten him a huge fan base and he's like that's kind of my like if you wanted to say, what's your strategy is like, that's my strategy. And I think that that's just like a more admirable way to approach like content creation versus this. Like I'm gonna just cater to this.
Moving Target of like, what my audience? What, what the audience wants?
Well, there's a there's there's a way of like not truly caring but then you also like, I like seeing our feedback. We had a guy message us and he's like someone died in my family and I listen to you as a ton and that and not, my God, that's, that's sick. And or though some will be like, man, I love when he talked about this. I'm like, that's awesome. I feel good about that. I want to make people feel good as well while also making myself be selfish and only talking about what I want to talk about, but it there is a small
All motivation of feels good to make others feel good but we're we don't like go crazy on that.
Yeah, yeah. Yeah, exactly. It's just a who ultimately who's in charge, right? Like you might have three co-founders in your business but ultimately push who makes the decision, if push comes to shove. Obviously you all talked about it, you all have a say, but if it is issue needs to be made, who can who can make a final call in a tough to sit tough spot. And I think that's in on the content side. I think that who makes the tough call in the end has to be. Do you think it's good?
Good. Do you like it? Are you interested in it? Alright, to me that's the highest like order decision maker. Well,
sir, I think this is a good one. What do you do? You want to wrap here? Yeah, let's wrap it up. All right, we have a bunch of stuff next week. That's the pot.
I feel like I can rule the world. I know I could be what I want to put my all into it like a day's
travel never looking back.
All right, everyone, that's the end of my first million. However, I've got good news. You see, if you liked this episode, we actually have another podcast. The hustle has another podcast, it's called The Hustle Daily Show to daily podcast. That has everything you need to know about business and Tech and only a few minutes. It's awesome. Our best writers, like Zack Crockett are behind it. It's incredibly fascinating. I listen to it daily so check it out. The hustle Daily Show.
