Episode of My First Million with Sam Parr and Shaan Puri.
Transcript
Note: This transcript was auto-generated from YouTube captions. It may contain errors and lacks speaker identification. A full Gemini audio transcript will replace this.
Kind: captions Language: en you know I think I’ve changed my mind I think that investing is [ ] stupid we had a friend is raising a fund right now you know I think I’ve changed my mind I think that investing is [ ] stupid I would have bet a thousand dollars you’re gonna say stupid I would have been wrong cuz he’s so [ ] stupid but like why is investing stupid I would love to hear why investing is stupid tell me if I am being like just a baby here and like but it’s just like I just find this like financial arbitrage [ ] to be so boring and like meaningless okay and I watch the TV show billions and I’m like oh that’s cool like they’re doing all those big things it looks exciting and then I’m like well those guys are losers like they’re not actually adding to I mean they’re just they’re wealthy and they’re accomplishing dreams so I respect it but I also I’m like oh my god that’s so soulless and that’s what I think like a lot of like I’ve got friends that create these websites that like they’re already wealthy and they’re building these websites that are like they’re just Hawking [ ] and they will admit that they are I’m like the [ ] the point of this and that’s kind of what a lot of investing is but the friends Hawking [ ] that’s different than investing right that’s just like selling some degree for money right it’s fun it’s definitely from a similar yeah it’s just like why like I like if you’re already can if you already have a little bit of cash which if you’re still trying to get your hair you know go go you got to go for it but if you already got a little bit of cash like do something cool and meaning so ok so here’s here’s I’ll give you two to thoughts on this okay the first is an example that supports your case and then I’ll give you the feel-good reason why you’re wrong so the support your case so I mentor this guy who’s 20 years old and he’s at this point where like he tried to do some stuff I kind of didn’t work out and now he’s like [ ] do I need to go get a job I need to pay my bills I don’t want to go move back home with my parents and so he’s like he’s like about to take this job and he’s like should I you know leave this entrepreneurial path and go get a job because I you know I need to pay bills in two months and I don’t think I can spin something up in the next 60 days that will get so profitable that I’ll be I know I’ll be able to pay my rent and I said you know I empathize with the problem but I said you know let’s just slow down for saying before you go take that consulting job let’s just let’s just talk things through for a second so I said how much money do you need to live every month what’s your burn rate two grand two grand fantastic and I was like so let’s say you wanted a year of runway to go try some [ ] you need to come up with 12 months times 2 grand maybe to come up with 24 grand I said I know you do some investing in the stock market you’re kind of a degenerate you know you like to pick stocks the attractive like Bitcoin and [ ] I was like because at the beginning of the conversation he’s like you know am I good the thing that’s going well is my investments have done well the things going bad is about to have to take this job for my my bills like well those two things don’t add up I was like I was like do you have enough money in the stock market right now that you could just sell and you could use to live off of to chase your entrepreneurial dreams he’s like yeah I could but then I’d have to sell and I don’t want to sell cuz I’m getting you know good returns I said okay let’s do the math real quick what do you think you could generate per let’s take just a twenty four thousand that you mean I don’t know how much what do you have you don’t have to tell me let’s take the twenty four thousand that you need how much do you think you could generate per year in return average he’s like fifty percent I was like ok Minnie Warren Buffett you think you could do 50 percent a year but let’s let’s assume you’re delusional number is correct and that you could do it consistently which is the hard part you could do it for one year for sure but consistently generate 50 percent so let’s say you you do the Warren Buffett you you invest perfectly you get your 50% way above market return and you’re 24 grand has turned into 36 grand now like fantastic congratulations you made $12,000 like you are still nowhere near where you’re trying to get with your goals and if you and how many years would you have to continue to get this absurd return for you to be where your goals are I was like not that many but that would never happen you would never happen right you never get to 50% so anyways I was like you’re you’re talking about this year going and trading all your time for money at a consulting gig when instead you could just sell some of your stock get 24 grand of runway and you could live for 12 months and give yourself a bunch of shots on goal to try to build something that you believe in and you’ll learn way more you’ll have way more fun and you’ll have way more upside than if you go take the consulting job so like you’re crazy so he was of the mindset of well I heard that rich people invest so I want to invest and I want to get return I want my money to work for money he had kind of heard all these things and was in was investing for that reason so I think investing doesn’t make sense when you have very little amount of capital overall and you’re trying to go invest that capital and then you’re trading your time for four dollars in other ways now the other so that’s the argument for times when I think investing would be stupid is when you know if you take a normal return the amount of money that you’re making every month is not every year is not gonna change your life and you’re locking up money in the stable what’s the second point cuz I think the second points gonna be better than the first point the first point that you made was that well only of us if you got a lot yeah exactly if you if you don’t have a lot I’d rather you use that money if you’re entrepreneurial if you’re one of the five 5% of people who actually want to build a business or do something on their own you’re better served investing in yourself and investing and buying your time back yeah and and and going taking a bunch of shots uncle now the second is is investing stupid well I think you’re kind of right that it is not the most exciting thing but excitement is different for everybody but here’s the cool way of thinking about investing like for anything to work you need leverage right so you were on the hustle but day to day you write zero emails probably you don’t write the daily email you don’t do the trends report this podcast is the most active thing you do for the Hustle is that correct it we could say yes for a sake of argument okay so first sake of argument your your argument is correct I’m leverage so your leverage because you got a bunch of humans doing work for you cool another form of leverage is media so people are gonna let we’re gonna stalk for one hour and then this is gonna get listened to for hundreds of thousands of hours out there so media is another form of leverage and then the last one is capital capitals another form of leverage and so here’s the cool way of thinking about it which is if you have capital investing is your way of allocating capital to things that are either a gonna return the most or be gonna like change the world in a way that you care about and so capital is your way of influencing the way that the world goes because you get to assign units of energy to different companies and causes that are that are gonna go do do do I get that I think that’s a great point I think that with the what I’m completely burnt out of it’s just lame-ass investments what’s a lame-ass investment like you don’t have to use a name if you want to kind of code name something like I’ve got a friend that gave a lot of money to some like an investor who’s gonna buy a bunch of multifamily real estate and it’s simply a like I’ve don’t ever see this I don’t touch it like that this is a 7% yes simply an asset class and it’s just a thing on a spreadsheet and I’m like oh my god that’s so boring like that like I just I can’t decide if I’m being a little like [ ] hater or yeah but my or like when I have we have some friends who are buying companies and they just look for anything that like checks the boxes of does net churn this and is the acquisition cost this and that’s it that’s all I mean like mechanical yeah yeah and I get it and I’m like all right that’s a great way to make money but it’s just like so [ ] lame sometimes I’m like oh my god you guys like can you like can we please do something exciting so okay so here’s the here’s the rub okay let’s say you don’t invest you’re gonna either a park cash and on the side and do nothing with it probably lamer than investing in it and having the cash grow or be you’re gonna what’s the what’s door number see so what else would you what do what would you prefer to do with your capital besides invest or leave it in cash either start companies and even if that means I don’t run them or that’s investing yeah I’m not saying investing using I’m using investing because I can’t think of a better word no investing is cool I mean investing is great but I’m just saying like arbitrage is again starting a company is arbitrage but I think you understand what I’m saying yeah I get where you’re coming from I don’t know I I just I just hit me last week where I’m like oh my god this is I don’t want to talk about a carry fee ever again or I go like this is just so [ ] lame when like you see like like I think it happened when I was traveling I’m like I just see these normal ask people at the gas station and they’re with their wives and kids and like they’d like I would I’m Way more fascinated by just make that person just a little bit happier or a little bit better not like how do I eat gout a little more profit out of this service do you thing I’m like it’s like I saw these I remember be at this gas station and I saw this mom give her kid like a like generic coke and I was like like help this mother like Oh either afford or learn that this thing or that thing is now is like how can we help her make a better decision may be a better decision easy not how do I get five per second I think I actually understand what you’re saying now which is it’s not that investing is stupid it’s not that putting money in some place and getting a return is stupid what you are starting to get annoyed over or tired of is the amount of the amount of your mental energy that goes towards thinking about how to reproductive devote mental energy and not we’re just money go it’s kind of like I get that money you gotta do something with the money might as well put in a place that’s gonna grow might as well fund a company that’s gonna do something but it’s about mentally spending cycles thinking about how do I get 7% verse 8% versa tax-efficient 9% versus just mentally spending those same cycles thinking about something else if I kept reading a book talking to a person building something cool writing a song whatever it’s gonna be is that is that more accurate yeah just like get out of this financial arbitrage circle-jerk and actually make a difference and have an exciting wonderful life you I vote myself and others I’m with you on that I’m with you on that I catch myself doing that all the time where I’m like how many hours is my brain spending on you know in this financial game and there’s some so amount that’s correct but it’s very easy to slip into more than more than what you need more than what’s adding value I love that TV show billions and I’m like oh man like Bobby ox raw rod this powerful billionaire guy he’s going to war versus other people that’s [ ] awesome I love that yeah he’s an alpha and I’m like but he’s also just a jerk-off who’s just trying to like squeeze pennies out of this thing at that thing and it’s complete nonsense right you know I mean yeah I think you know I think what also happens is important which is in your 20s you’re trying to figure out what you like twenties in many ways about feeding ego it’s like whether you’re partying trying to make friends trying to date people trying to you know get your get your name on the map in you know your career or your industry I feel like a lot of people including myself their twenties are spent feeding the ego and then your 30s are spent figuring out that okay my ego is either full or it will never be full and I actually want to feed the soul in some kind of way actually become more conscious of how I spend my time and my energy and and then there’s this constant push and pull of like maybe I just want to make a bunch of money like maybe I’m not ambitious enough well I think you can over money focus and there’s like these debates that I have my head I sounds like you do too I think you could do both and I think that I guess the point is I’m beginning to realize I love the builders more than the alligators like yeah yeah yeah exhibit [ __ ] a builders over alligators all day okay yeah good that’s a good that’s a good way to end the podcast you [Music]