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 with my i'm such a good investor that i've lost more money than you can dream of making i feel like i could rule where to i know i could be what i want to put at all in it like a day's off on a road less travel 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 him and not moving anywhere what did you say you tweeted it out you said i'll be in la who's up or what did you say i said knock knock who's there knock knock who's there you also have 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 we don't think if you're making technology do this so 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 wants a plunge but i know that like i just feel like it's gonna be like maintenance or something for me i'm not really that interested in that but i thought it was funny i was like you know basically making in fun of you saw and the like everybody everybody who has hold plans is like you know what this is actually a recording studio that i'm am going to use every day every 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 and i just do it and then when i do i wanna bring y'all with me just just get this on my story every day i'm doing this we'll have to put a andrew lieberman fan a vegan and like a crossfit fit or all one room and see like does spontaneous combustion just happened i like we've discovered something stronger than entropy yes is there enough friction to create a fire there might be between who talks the most alright i've got a couple interesting topics today the biggest one and 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 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 do you know what you know what i'm saying i know exactly what you're saying you don't have to keep asking i know what you you're saying you know what i'm saying fuck you asked this question a lot to our guest 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 at your money and i thought that was wonderful and so that's kinda how i came up with the idea do this and so i figured today we can do that does that sound interesting to you yeah let's do it alright the portfolio review and i again 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 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 cooper 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 right i don't i don't particularly like that but i'll be very transparent about something yeah we're not going financially streak here but you know yeah if we can go to the beach we could yeah 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 hot 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 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 at the time 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 l 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 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 my other companies my wife works so i live off that money so i don't actually touch any of the explain i think without numbers it's hard let's pretend for a second that when you sold the 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 wanna 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 kinda money and money out that's your that's how you've 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 twenties was basically live cheap build a company sell it so you have that nest 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 you're 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 of wood but it would average to debt each decade it would grow yes and that number 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 alright also if this word advice this is like the financial equivalent of like tribe missionary right it's like you know you're not even gonna like this portfolio review is not gonna be like it's something like crazy backdoor sweep that's you know you know puts over here calls over there like i'm pretty sure what you're gonna say is that buy the index buy some bonds and then i try to build more wealth through my private businesses did i already do exactly your portfolio review exactly what let's like about percentages what and and what index are you buying is it one are you buying multiple indexes what alright 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 v t 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 a think four point nine percent and i think it's like sixty day term meaning every sixty days as of now we're buying 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 walgreens buildings and wall walgreens releases the buildings and year to date v up nineteen percent one year chart fifteen percent five year chart fifty seven percent that's fine i'll take that all day what what's v historically over the last thirty years i think it's like eight percent a year maybe yeah i don't know what it comes out to so that it 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 which is where i keep cash which is basically the all a 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 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 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 ish air you're like to do that you basically have to start a business and not only that i think you 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 wanna earn ten million dollars you could 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 i made two thousand dollars a month is when 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 taxed 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 differentiation here it's about selling versus you cash flowing in your way there 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 you'll use any number above that go straight into my investment fine of the big account alright the second one i got a sugar mama have i told you that how is she what's your name her name's sarah i've been with there for nine years and sees 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 airbnb was gonna work out it turns out they did awesome i think when she started working there i think the valuation of airbnb was ten billion it could been eighteen i don't remember when it i ipo 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 look 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 zero one k that i've always maxed out and then i a bitcoin that i bought in two thousand fourteen 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 sold bitcoin at a couple different points each time i sold was a poor decision i don't know if i tell you the first time i sold so i bought it bitcoin like back was like three hundred dollars or something like that as my original original buy say four hundred was my average it shot up to i don't know three thousand four thousand at one point i go to a wedding in my aunt i think i told the story before my aunt who's like you know in indian auntie is i'm i'm walk to a conversation she's having with her friends and she she literally goes oh yeah ethereum is very good and i was like i was like my hands talk about ethereum and saying is very good and i was like how can you say it's good oh ethereum it used to be this price now it's spice 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 you're indian on the east coast is talking about assets like you know good because they go up and telling her friends they gotta buy and i'm like this is gonna be a bubble and i was right and wrong so i i immediately go and i try to liquidate everything i try to sell the whole thing out everything i have coinbase limits you could wait was it really because of that literally because of that i so like that night i can 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 you can only sell i know fifteen grand at a time or something like that so i'm just trying to max it out every day and try to sell and at some point i got time 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 nineteen thousand into like the next two months and i was like oh my god then what am i doing i'd miss time the bubble and then it goes back down to like whatever three thousand i was like feel good now and i was like this is stupid i shouldn't just feel good at 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 suede like change your actions oh that's happened to me multiple i told you about the tesla one too i had basically on a ton of like the only stock i owned early on was tesla bet back in tesla was like very like kind of like a a young stock it was like maybe like a two or three billion dollar valuation maybe be five and i looked it now like six hundred billion dollars or a trillion or something it went up to basically close to a trillion now i don't know what it says i can't even do that math so with a thousand dollars in tesla there's two billion dollars i i i had a very small amount of money out of college i had like made like twenty five k my first job or something like that i saved enough to like invest that much twenty five thirty k or something and i did the math once 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 if i just held and instead i went on reddit and there's like i don't know you don't on reddit there's all these like called like tesla queue it's basically like a group of people that believe that tesla is like going to zero slash like maybe it's like fraudulent and there's like all these like sending they say that they have fake cars right like like there go to shower images not fake cars but like lots of other things like that like there would be like guys who've bet garage there's just garage in phoenix and look at this and he would go to this garage and there was only test us parked on six stories and he's walking them up and he's like they're stash them here so that you can't tell where they're like because if they just leave them in the factory a lot it's clear they're not selling this pot piling up he's like look at this this one has and he's like put his finger on it's got dust he's like look at this this hasn't moved in months and and i was like he's right thank you u 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 fifteen different cfo and i was like that does seem fishy why why if so many cfo 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 had tripled my investment or quadruple wine mess and i was like i'm i'm getting out of the top boys and then you know like hundred x since then you it wasn't really wasn't really natural the second time that's happened to the first time it happened to is what when you had a job offer i think at stripe but 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 eleven or twelve so i would've 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 seven years and you and you kinda 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 ten million and twenty million dollars and my mentor is the mentor of the guy who's interviewing me he that's his mentor right the mentor have like a pretty big influence if the mentor says hey this person's amazing you're like oh thank you sensei like i listen i hear my mentor had written a blog post saying i met this kid twenty one years old he's an entrepreneur and he's got the highest like bias for action of anybody i've met in the last ten years and i was like wow glowing five star review basically i hand it to the sky guys guy's 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 a thirty thirty thirty point lead during the interview where i he's like okay so like it's is kinda like a sales position like you know sell me a piece of software that you really liked i was like i was like sell me this penny and i was like i was like so what i would do is i would basically just ask him a bunch of questions because said no like ring hello like just do it pretend i was like and i just i don't know like i know what i said but whatever i said at the end he's like yeah that wasn't very good yeah don't think this is sales probably not your thing you're probably not that good at this so 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 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 engineers laundry i was like alright if i i'm gonna go for this other job instead and the inter the the other guy was like he was like so sean what do you know about stripe and like the banking system sean like well i like money i would like i would like to have some more of it be found kinda white stripes crest white stripes so those strip sorry sorry this is strip let's see adidas low you ever been stripes convenience store love it yeah that's how about interview went so that blue you blew that one but that's 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 because 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 with my i'm such a good incredible that i've lost more money than you can dream of making when sold the hub i think the stock was three hundred 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 man is this right is this right what do i do and so like that that that definitely impacts me like i definitely wanna stop i literally did it with the hubspot thing i bought hubspot stock bring right around when you when you sold and then it went up and i was like oh and everything was going up during that period of time and then when the whole market crashed i was like get what i don't really wanna be in the stock market right now this isn't very fun i don't know like there's all these war again tesla queue 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 general ease a ad strategy to to take to to your investing and yeah basically sold almost the exact bottom of the markets so it's like the you all bottoms like i sold there's a guy somewhere in air traffic control he's like the bottoms in he's out he's yeah most people only hit rock bottom what's in their life that's like the point of the phrase right i you've got chance lead yeah somebody who's asked this slur they were like they're like oh so what are you doing with your kind of like investment i'm explaining what i do and they're like so what are you like you know what do you for like you're safety net or whatever like and i was like safe you're like you're looking at it he's like what 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 you know a bond portfolio is not my safety net my four zero one k that's locked up to till i'm sixty five 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 high like really high caliber people that play it so safe with their finances i would kinda it was 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 have you spent more than ten percent of the money from the hustle sale no way definitely not five percent you 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 so i'm not that i'm not person that we have india one car damn you've got three all white g wagon that's all say so so the thing you you know the this is one way i think about it like you worked for ten 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 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 i don't know if like i'm not saying that my way is right but i also know that for me my philosophy 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 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 that that doesn't exist right and and so it to to criticize myself i am horrible at spending money ram sat who we have on the pod he does a really good job of like saying like look you can 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 saving 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 incredibly fair criticism i think the truth is half is is 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 i i think typically what i've seen is people who earn a lump sum like a startup 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 wide and they're frugal and they're cheap and that causes a lots 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 raped you know what i mean just like you're running out of money i'm gonna share without sharing somebody's name some friend of ours sent me a presentation that they did that they made kinda like about their life as part of like one of these like peer group things don hampton 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 sent me thing 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 he had a couple 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 is 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 this bike it's this two thousand dollar bike awesome bike most expensive purchase most expensive item i've owned since it's been like ten years or something like it's like whoa and like until i recently bought condo finally like last year this was the most expensive item i own love this bike and then i was like okay interesting and then and then then 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 it was a fee associated with it i would've have made like twenty million bucks on that you know so so i think that's just a a great exercise to go on which is like you could survive a bunch of bad mistakes and if you're gonna play the game any like any good startup up 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 is like i've missed three thousand game winning shots or whatever it's like yeah that's what happens when you're you need 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 like that was like the 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 i think gary vaynerchuk like in the beginning of his book he like gives a compliment to travis ka the father like calls him out was like you know yeah he's like dude i think my wife he's like i i think my wife my children and travis ka meaning i was super close with them and i still pass on that and that me a hundred million dollars exactly i think that's like a famous story so yeah everyone has that story and and let me give you two other slides and he says then it's then there's two slides called my f 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 that 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 they would spend on their kids or spend on like other things where they wouldn't spend on themselves and that's annoying that 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 he i'm i i must spend i can't save this money didn't work still saved it because i'm comfortable losing five hundred k and 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 i can't get myself to do it i'm the exact same way i've been looking at i should be helping i've been looking at your company 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 a month but well the it's not a fee whatever the payment is person few hire money you pay thirty percent of their salary as a as the head hundred bounty once so that's it so 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 the person's being 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 ruining the my own you might really be valuable and that might be fifteen year relationship now i'm talking about a a five hundred thousand dollar investment but i could also put that in v and it would compound eight percent and now you've talked yourself out of it when i was buying my wife's wedding ring i was like 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 it's he an immigrant is this guy in an that you're talking about it's one hundred percent most immigrants that i'm bid 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 a immigrant that's why i that's why i like those guys identify with you we had this this funny experience yesterday where 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 wanna like shift like family mode like i'm i'm ready to like meet somebody have a kid like you know like i wanna do that part of life now and we're like that makes total sense good on you you're you you did the money thing the business thing you you you've you scratch that it you proved you could do it now you're in your thirties and you're saying you know what i i'm not really i don't really have a partner i don't have kids that seems fun i'm i do see myself as a family guy i wanna do that also so that was where we left a conversation and now my business ben ben levi 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 you know that friend he's like he's like doing something new and i'm like like that's just doing one thing like he's like four 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 find a partner starting a family like what i like yeah he still wants to do that it's like be starting 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 but they make decisions that don't really make sense if you zoomed out a little bit how this person i don't like i a 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 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 for wisdom power you know what i mean that's what i'm saying like i'm not telling you you get 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 gonna completely make you busy and if i ask 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 a ben i go man we're yeah i'm guilty of this into other areas of my life right because again if you spot it you got it so anytime i noticed something to 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 do something i'm very rarely do almost never do i canceled my workout because i was like i had two doctor's appointments and i was if i if i do this a work workout in the middle the day then i'm just not gonna get any work done today canceled my workout 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 yeah fifty four days left i think right yeah i'm on day no i'm on forty nine at 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 district that's a un undo 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 very enough kids but they prioritize bunch other stuff and i was like that's not intelligence that's wisdom like that's basically having good judgment and i realize 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 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 intel really saves you you kinda screw yourself and so it just really emphasize 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 it's like when you're driving and you say everyone's such a horrible driver it's like dude yeah that is you too 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 these last two you're gonna have a lot of 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 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 snap 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 network worth and anything above that whatever maybe it will work what what do you think about yeah i think basically start investing is you so 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 there these little eggs that are that are you know gonna 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 kind ill liquid 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 and they're ill so what does it matter i can't do anything with them right now anyhow so i i basically only calculate liquid net worth when i calculate it i so that doesn't include any of my own businesses and i also don't include any startup up 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 my e commerce i 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 as zero i just i'm not calculating total net worth i'm only calculating liquid so if i tried to calculate total network worth that it 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 network worth thing is like not a great thing to like i i kind in search of a better metric well there's earning so income do you measure income but then income is like only things that are you know it's gonna bias us way too hard to the things that are only you know generating cash flow today so it's not gonna count really any like an i mean do you measure your income on a monthly basis so i measure every month i like do like a report right look at like alright what was my income this month and where to come from yeah not religiously but it's it's mostly like steady i and i kinda know the one or two things that are variable i'm oh that's what that was at this month plus you know it's 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 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 yeah i think i'm thirty thirty k a month of burn life life expenses and i and 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 it definitely adds up but that's just like you do need the jet i mean what are you gonna do without in it wasn't 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 the 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 i i use tiller have you heard of tiller i think the website is killer hq dot com it's like a plugin and i track this in google sheets what do you do you track anything like your account i don't these apps because i'm i'm not connecting my shit to these random startup apps like i you know i i don't wanna i wanna put all my stuff into these apps so i i because i'm not that concerned with it in general you know the fewer things that you're concerned about the better in general yes just like surely like 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 liquid stuff where i'm at income wise and where i'm at monthly burn wise every three months i do but there's like a there's like a logistical problem let's say your wife has a four zero 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 like let's say that you each had like a robinhood account or an each trade account plus her previous before you're 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 or vice versa do you 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 find or access a bunch of stuff especially crypto stuff how 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 nine years from now if something happens it's like i don't know what's gonna have with that i 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 it like a spa day it's like right you i think you talked about this concept of worry you're like i just schedule some worry time in the future time i what 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 the day it's basically like let's have a little financial picnic alright 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 just trying to spend on on this and i just don't really wanna think about it another way do you know anyone who's crazier than you i mean i have view you as i was 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 in only two things they're next company and a house and they're like i basically don't own any like bonds equities i've 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 we do say crazy do you like is this kinda like oh this bum on the streets a little crazy is you're like wow that she's hot but she's crazy like which one am i my hot go crazy or my bum crazy more like bet at all him i'm black like like tuition money or this game of ro 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 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 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 of abusing 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 thing money as a tool to enable a better lifestyle i think i abide by that law the second thing is money's is 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 like it it could be in nothing it could just be literally sitting in a a big 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 if i you 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 of focus and so i do that so to i'm like if i have three years of life expenses put away what 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 well i view myself still as in wealth creation mode 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 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 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 just shouldn't sell like the the only investment mistake i've made is just selling okay but are you actually gonna you've just acknowledged and and we'll go well we can make fun of me after this but you can make acknowledge that so are you making that yes exactly 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 you gotta sell the thing or something in the world has changed that caused you to like re write 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 going money things 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 and i still kinda believe that that's true but i should say i wasn't in a place to re under write 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 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 the 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 lin 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 and and and and the counter example that is when biology said all the crazy stuff about what was his argument that bitcoin is go to a million because this reason dollars gonna that shit scares me and i'm like i don't understand that that's so new and it legitimately scare like i do i don't try to do that because with what 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 wanna hold the stock forever so then i go find the lin effect that says a lin 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 and you can't learn everything right like you can't just say i'm gonna go learn the world of like finance like this is too broad is impossible to do so here's what i do i go through it 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 go now stack the evidence okay now which one appears to be the strong thesis so instead of going and try 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 end you biology who's like do you actually talk to them or just consume and not 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 ins solvent that the you know the money printing is you know is out of control inflation higher than they're admitting and that this is what what is the result of this it's x right then you have ray that says look i've been studying empires and 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 go read that book you go watch this talk here you're like alright 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 it when when all the all the countries in the world get weaker they'll actually flee to the whatever of this relatively strongest currency is and maybe that's the dollar and the dollar are gonna drink the whole milkshake basically like alright cool that i i didn't make there's some something i forgot it's call like the the straw that drinks the shake or some shit like that people have talk about from there will be blood because if had a long straw all the way over there i drink your milkshake so i drink it up so you basically line up a bunch of arguments and then you kind of like you lit get them like a lawyer you're like whatever evidence do you have that supports this what examples do you have 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 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 con the most contrary opinion appeals to be inside because 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 wanna 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 there's it doesn't have to be that dramatic like 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 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 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 i i talked to to get ideas on what game are they playing to generate more money so i don't i don't really seek or or i'm not that interested frankly and like well who for those people you obviously like andrew our our friend andrew wilkinson tiny tiny dot com he take the company public so you can actually go and see the numbers so you like andrew yeah i like andrew like xavier i like xavier yes side bulky i think had real i i had really interesting things to say about what he does i i'll give you just a funny example so s by the way he owns this thing called w why it's called awesome corp he started as a blog called wp p beginner which was a blog on how to use wordpress now he owns tons of wordpress plugins ins 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 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 that he does interesting this with this cash like he owns like i don't know forty gas stations or some shit like like why do you own gas station stations dude is that a good idea of about idea and does does that 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 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 okay you wanna you you don't spend it's kinda like i don't know the math i'm i'm gonna say math firm even though i don't know math he's like you don't spend like the first derivative money he's like basically what most people will do is that 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 spend 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 yes 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 this is how i was brain work and i was interesting again thesis lining 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 than most people and 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 you know he was the one who was like you know what i love buying businesses i but there's another strategy i do where i buy these are thirty to forty percent minority stakes and businesses that i can help in these two specific ways and they they're gonna keep running it so they get a little liquidity they get to 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 it was i've exactly that mindset i was what's a great business that i already believe in i'm a customer customer of that i can buy a minority state 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 do you think that that your contribution has paid dividends in their business yeah yeah course yeah where last two months have been the highest two months of the business in the history of the business so it's great and for me that's great too right like i've already i've already paid back i don't know through three percent of my money or something like that on on that investment so like you know wow that thing's gonna you know in terms of oh i put my money in the stock market to get eight percent or this thing's clearly this thing's is 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 bounce back but i put that money to to work in a place where i felt like i had a little more control and and could see a a path to about a much greater return with with more risk 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 because i think that that is interesting to more people and it's also interesting to mean you but i'm very curious to see if this is useful for people