Speakers: Sam Parr (host), Shaan Puri (host)
Intro & Peptides [00:00:00]
Shaan Puri: We call you the most interesting man in tech and I stand by it. One of the reasons you’re great is because you made money in all these random ways that I wouldn’t have even ever thought to. You’ve got a $450 million fund now. He also started Thistle, a food delivery business that’s doing over $100 million a year. You’re in SF running around like rich people, weirdos. What’s hot? What are the kids into?
Sheil Mohnot: Everyone is on peptides and everyone’s got their dealer. I can’t say who was doing this, but on the pitch I was like, “So, how do you plan to be legit with this whole thing?” And he basically pulls up a picture of the co-founder with Trump and Kennedy. He’s like, “Yeah, we’re pretty sure we’re going to be able to get some things through.” Say it with me: Crony capitalism.
Sam Parr: One of my best friends is completely jacked and he does not really work out. He does EMS.
Shaan Puri: It’s going to go viral because it’s going to be hated and loved at the same time, which is what you need.
Sam Parr: Dude, I’d rather take drugs.
Shaan Puri: This is the only podcast where you’re going to get AI and a Triple H reference from wrestling. I mean, the range is incredible. We’re going to get cancelled for this episode.
Sheil’s Background [00:02:30]
Shaan Puri: So, one of the reasons you’re great is because you made money in all these random ways that I wouldn’t have even ever thought to. You created a domain auction thing and made millions of dollars that way. I think you did a Fee Fighters thing once, credit card fee fighters thing.
Sheil Mohnot: Credit card processing. Yeah.
Shaan Puri: Credit card processing. You’ve got a $450 million fund now. You’re probably, if anything is in fintech, I go to you as basically like, “Hey, gut check. Is this smart or is this dumb?” Because it’s easy to fool me, it’s hard to fool you.
Sam Parr: He also started Thistle.
Shaan Puri: Yeah. A food delivery business that’s doing over $100 million a year. So all these different spaces. The guy got married in the metaverse at a Taco Bell. Whatever the hell that means. We call you the most interesting man in tech and I stand by it. I have yet to meet a more interesting man in tech. Welcome Sheil back for round three or four.
The MFM Effect [00:04:00]
Sheil Mohnot: So happy to be back. Also I got to tell you since the last time I was on so many things have happened as a result of me being on.
Sam Parr: Like what?
Sheil Mohnot: Okay. So, I was hiring a chief of staff and a bunch of people applied, but one person applied and the person who got the job, my current chief of staff, is a huge fan of MFM. And she was debating leaving her current thing, which was paying her a lot more money, her previous thing. And then she was like, “Fuck it. I got the opportunity to work with this guy who was on MFM. I’m going to take it.” And so, my chief of staff joined because of MFM.
Sam Parr: That’s a lot of pressure for you. I hate when people say that when they’re going to like they’re like, “I’m willing to take this big pay cut to work for you.” I’m like…
Sheil Mohnot: It’s a lot of pressure. Last time I was on I talked about wanting to get better at photography and video with AI and this guy Jacob reached out and he was like, “I can help you.” And we went out for hours in New York shooting. He showed me all this cool stuff. And then I mean your audience must be like the nicest people out there because also recently I went back and looked at the YouTube comments—usually a cesspool—but you guys are so nice. Everybody that listens to your podcast is super nice. Nobody was like, “That guy has a big nose” or whatever people would say on YouTube comments. Everyone was like just talking me up, talking you guys up. It’s great.
Shaan Puri: Ari, the bots are working. Keep paying them. All right. So, we wanted to brainstorm with you. So, we asked you to bring some ideas, businesses that you think are interesting, would be cool to start. I think we said $10 million ideas, which I don’t even know what that means, but here we are. Sheil brought five ideas. Let’s run through some of the ideas and then I want to talk about some… Oh, actually, wait. Before we go to the ideas, you had a great thing on there’s this idea of this 50-year mortgage and you’re my finance guy. You’re my fintech guy.
The 50-Year Mortgage [00:06:30]
Sheil Mohnot: Yeah.
Shaan Puri: 50-year mortgage. Trump is like, “More years the better.” Is this a good idea or a bad idea?
Sheil Mohnot: Give me context. I don’t really follow the news.
Shaan Puri: Sure. So right now, a 30-year mortgage is generally the maximum in the United States. So, you pay off a home over 30 years. Trump wants to address the affordability crisis, which is a real problem, and said, “What we should do is extend mortgages to 50 years. So, you have 50 years to pay it off instead of 30 years.”
Sheil Mohnot: I think it’s a terrible idea because basically what happens is you give people more money. So the monthly amount that they pay monthly goes down a little bit but actually you’re not earning equity in the home after the average length of time that somebody our age stays in their home is relatively low and by that time they’ll earn no equity in the home or almost no equity.
Shaan Puri: I think the average person spends six or seven years right now. It’s not a lot.
Sheil Mohnot: Yeah, I think that’s right. Six and a half years.
Shaan Puri: And on a 30-year mortgage, I think the way it’s set up right now, something like the first 15 years is just interest. Is that right?
Sheil Mohnot: It’s not just interest, but you’re not earning that much equity. And so here, you’d be earning less. But the thing is, actually switching from 30 to 50, it doesn’t change the payments that much. And the real problem is the 30-year mortgage kind of worked well for an America back then, which was you bought a house in your upper 20s and then you retired by 60ish and you owned your home outright. So even today for when people retire, the median American when they retire almost 80% of their net worth is the equity in their home.
Shaan Puri: Wow.
Sheil Mohnot: Yeah, your home is your retirement plan and part of that is for Americans, you can’t spend it. If you could spend it, you would spend that money, but because it’s in your home, you can’t spend it. So, I don’t think the 50-year mortgage really solves anything. And actually, probably what it does is drives asset prices higher.
So, Japan did this in the 80s. They had a bunch of problems like interest rates were zero and asset prices went through the roof. At one point, a single property in Tokyo was worth more than all of the real estate in California. It was an insane bubble. And part of that was they extended mortgage times to 50 years. And actually, some people got a 100-year mortgage. So your grandkids are on the hook for the home that you buy. And asset prices went through the roof. And then leverage is nasty when it collapses. When prices drop a little bit, you’re pretty screwed. So home prices have actually gone down so much so that they’re still half of what they were in 1989.
Shaan Puri: In Japan.
Sheil Mohnot: In Japan. Yeah. In Tokyo.
Shaan Puri: Did you say one property was worth more?
Sheil Mohnot: Yeah. Which property? So, okay. It was the land value under the Imperial Palace. And so, that’s about a half square mile of space in Tokyo.
Shaan Puri: So, okay. So, maybe a bad idea. Yeah. From what I understand, because when rates drop here, basically the sellers just raise the price because they’re like, “Oh, you’re buying not really on the whole price. It’s like, what do I owe per month and what can I qualify for? If my monthly payment is X, I can afford that.”
Sheil Mohnot: What happens is when your monthly payment goes down, whether it’s because you stretch the payments over 50 years or the rates go down, what happens is the sellers just can justify a higher price and it didn’t affect anything. You just end up paying more. Because I think in a 30-year mortgage, you pay whatever the home price is plus 50% because the interest compounds over 30 years. And if it’s 50 years, you’re going to basically pay almost double the list price of the home because you pay so much more in interest.
Exactly. So, I think the solution—like we do have an affordability crisis. No question. But the solution is not to induce demand because if you induce demand, what happens? You have the same fixed amount of properties. You’re just making prices go up. So the solution is creating more supply like making it easier to permit, all this kind of reform to build more housing, make it cheaper to build housing.
The Lifestyle Affordability Gap [00:10:00]
Sam Parr: I was listening to this person who had a different take on affordability. He was like, “Are things less affordable today than they were in the ’60s?” He goes, “Look, here’s the deal. In the 1960s, your version of a family vacation was a road trip to a state park once a year. Okay? You never traveled. You didn’t go on a plane. You lived in a 1,800 foot home in Dayton, Ohio. Okay? Like you had a crappy car, you didn’t eat out, and you never took vacation. Now, young people today, they want more things, which is totally fine. They want to go international once a year. They want to go on these cool trips. They want fancy phones, a new home. Even the average home nowadays is a new home with two ACs and a beautiful build with a really nice kitchen and really nice bathroom.” And they’re like, “Is it less affordable or do people just want more stuff?”
And it was an interesting take where I was like, “That actually does have a good point.” Because even when I grew up, I didn’t go—this isn’t like a “oh I was so poor”—but I didn’t go on a plane until I was 18 years old. We didn’t take vacations like I do now. I remember the AC was broken one summer and we just