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 [Music] um can i let me ask you a quick question before we wrap up getting wealthy like we’re talking nine figures liquid net worth wealth getting wealthy is it is it really hard to do it just from cash flow or do you think you have to sell it sell something sell a business sell real estate sell something capital gains versus income you’re saying liquid so not paper not not your paper net worth liquid which includes things that could be traded in 30 days um very hard very hard to do just off cash flow i believe um i think you know it’s just much slower right because you can i mean just look at the basics right like when you sell something you’re going to sell it for some multiple of the free cash flow that it’s going to generate for you right and so so just by definition 10 or 20 years sometimes it’s 5x sometimes it’s 10x sometimes it’s 20x sometimes it’s 3x whatever there’s different multiples for different industries but like fundamentally it’s a multiple which is a multiplier on how fast you’re going to get the money the value out so let’s say to get to 100 million uh whatever number of years that would take you then have to divide that by five and that’s like how fast at minimum you could have got there just selling the asset um and getting and taking the 5x multiple right so so you know of course you can get there but do i know ways you can get there with the same speed i don’t think so because even those are like i take the cash flow i invested in a thing and then that thing grows faster and like i can sell my stake in that so you know because it’s like you you have a choice so you could spend your time you know you could spend your time building a service or some type of business where you can make significant cash flow two three million dollars a year not work that much but it’s not necessarily an asset that could be sold so there’s a few businesses like this or it could just be like the way the this podcast gets paid like it’s not like a particularly maybe but maybe the podcast isn’t a good example but it’s not you know what i mean not necessarily an asset like your maven course your maven course is not an asset that could be sold but it could potentially make many millions of dollars a year versus you just say you know what screw it i’m not doing that because i have to build a business that could sell so do you prefer do you think cash flow or or an entity an asset that is independent of you and can be sold um i don’t know i don’t think do i prefer is really the right way to think about it it’s like you need both right like for example i you need both for two reasons one is maybe you’re going to use the cash flow to invest right maybe what you’re going to do is you’re going to buy great assets and let them compound over time well where are you going to get the cash flow to begin with right when we had andrew on that last week he’s like i i took the cash flow from the design agency of meta lab and i used it to buy majority stakes and all these other businesses and then let those compound over 10 years and like boom you know so he reached you know that goal and more uh doing that and so you you know maybe you need the cash flow to make those investments right like if you have no cash flow how are you gonna invest in anything and secondly um i like to live a good lifestyle so sometimes casual businesses are great because it’s like yeah sure compounding is awesome but so is you know like [ ] gucci shoes or whatever i choose your choose your thing you’re into like yeah gucci shoes like sometimes those are better than like this yeah dude whenever i hear an old asset whenever i hear buffett talk about the long term and like patience i’m like [ ] you’re like 95. like there is no long term there is you don’t have pain you shouldn’t have patience anymore you should have like you should immediately spend whatever you want to spend there is no such thing as a long-term view for you at the same part let’s see like the headline sampara colon to warren buffett [ ] you’re 95. there well i’m just like you know like if you want to do the mix you have to be fine but like and bezos talks about those two he’s like i’m like i mean you don’t really who cares like you know just live life how you want to live you got it yeah so i’ve always like why are you delaying it it always pissed me off i’m like why are you delaying to have the best time of your life when you’re like old and don’t even want to do [ ] like you you don’t have to do that anymore yeah yeah for sure and you know some people are happy along the way that’s that’s fine but like uh yeah i feel like you had it i feel like you asked me this question because you had an opinion or a story so let’s just skip because i think you have a good opinion or story on this i don’t have a no i don’t have an opinion yet but i’m like with my life now it’s like i can i think that in i think in six i think in a matter of six months i could probably create a business from scratch that does a million dollars a year in profit it would be based off of like my image i’m not saying i have that i’m just saying like i’m sure i could do that plus with like a couple other side projects i think i could very realistically have two or three million dollars a year in cash flow easily but very but yeah easy and maybe i do already have that i don’t even want to say i do or do not but i but like if you did that would have been a weird way to say it would have been a weird hypothetical but okay let’s continue on i got some cool [ ] going on i’ll say but and i’m thinking about where do i spend my time and i’m like is it actually worth it like or should you just not care about cash flow and build something that’s like much bigger that you could sell i don’t know i’m just trying to figure i’m like where do you actually spend time the real answer is what gives you most joy yeah exactly and and like uh whether you don’t work backwards from do i want cash flow or do i want long-term you know capital gains that’s not like the starting point of a decision um you kind of just need to make sure you’re winning in one way or the other uh don’t be weak in either area or like don’t be weak in both basically is like the way to do it like for example you could buy a home in san francisco you’re going to have terrible income from that property it’s not a good income property because in most places san francisco your rent the rent you can charge somebody is not going to out pay the mortgage plus yeah it’s going to make a three percent cap cap but you can go buy you know some home in whatever you know houston or something like that it can cash flow thousand dollars two thousand dollars a month and it’s good income property but it’s you know gonna appreciate super [ ] slow whereas the san francisco home you know in 10 years is going to have you know whatever more than doubled in value and so you know it’s there’s appreciation properties and income properties the same thing like i think you just do whatever gives you the kind of whatever’s whatever gives you juice today and you think might give you juice going forward and then you got to say all right before i do this i got to make sure it’s going to be strong in either one of these either it’s got to be awesome for cash flow or it’s got to be awesome for for appreciation and if it’s awesome for cash flow basically i’m just going to use the cash flow to buy assets that are going to appreciate with somebody else doing the work instead of me doing the work it’s you kind of end up at the same point either way yeah i don’t know i just been thinking about like how to spend time you know who’s killing it and has done a really good job of like putting off making cash is our friend nick huber i am an investor and so i get to see some of the numbers of his storage deals and i don’t think he crushed it like in terms of personal cash flow for a long time but like the way that things have compounded i’m like oh holy moly if you just eat [ ] for like six seven years and pick the right asset things look really cool yeah i think he’s done great and also i think he is like i think he personally has great terms for with his investors meaning like i think it’s quite favorable to him yeah incredible in a bad way but like he makes sure he gets to eat right whereas at the beginning if you have no capital you like you know you sort of make a deal with the devil in a way where you’re like all right i’m going to take no management fees no acquisition fees and a low carry i think now he’s like look i’m good and i know it so i’m going to take a higher fee higher higher acquisition fee and i’m going to take you know my healthy carry um so you know good on him i think a lot of people in real estate are able to do that pretty well uh i know somebody’s crushing it in real estate and they they do just that they they have like a you know fifty percent carry on the deal or something something crazy and they’re like yeah because my deals are big hits and i win so like it doesn’t make sense for me to do this at any less than that there’s this uh that’s like next level winning all right and then i forgot to tell you this but this is the most important thing uh i can’t believe we didn’t talk about this earlier to be honest with you because if you’re listening to this and you like what you’re hearing right now and you haven’t gone and subscribed to the my first million podcast wherever you get your podcast then that’s the thing you’ve got to do there’s nothing more important than doing that right now and don’t do it because i said to do it do it because you want to do it do it because that’s who you are there’s this awesome you know who foo fighters are you know dave girl dave grohl’s the lead singer foo fighters yeah and they’ve been writing hits forever before that he was the drummer nirvana so he’s like just wrote hit after hit for a long time and someone asked him about uh he’s like you know you write hits and and what’s your process and like uh a a fan was asking about old music and but and he stopped he goes wait a minute let me cut you off here he goes i don’t write deep cuts i write hits and it was just like he’s like everything i write i read it to be a hit sometimes it is sometimes it isn’t but it’s all meant to be and that’s like your real estate friends he’s like i write hits that’s why he gets that 50 carry exactly exactly and respect i i respect somebody who’s like i’m playing the game and i play to win the game you know i’m not playing something else i’m not going to tell you i’m not playing the game i am playing the game and playing to win that’s actually like uh i really respect people who just clearly play the game and they’re like open about it like yeah i play the game i’m playing to win and here’s you know like good if you if you dislike the game or dislike me that is your your choice and i actually dislike people that are the like uh virtue signal types where it’s like they are playing the game but they’ll do anything in their power to like make it look like they’re not playing the game and there’s a lot of that like in silicon valley there’s a lot of that here’s how that plays out that i see there’s person starts the company bullshits about like why they’re doing the company or why this problem is the problem they decided to spend their life on technology like you’re you know you’re doing this because it’s good business not because you really wanted to help you know small to medium-sized enterprise businesses save money on whatever right like that wasn’t your actual intention you probably like that that you have happy customers and that they’re good you know you’re helping them but like let’s be real uh taking away the money have you ever seen on silicon valley we’re saving the world one cloud processor at a time or some [ ] exactly it’s like yeah and then they’re like they’re like they’re like uh someone calls them out they’re like dude this is all rich guy like kid rock just was the singer for the for the uh for the show and he’s the poorest guy here yeah exactly and so so i think silicon valley you see that a lot you’ll also see that with the origin story about like you know why they decided to do this you’re like oh are you sure you decided to do this because you know your cousin got diagnosed with this you know rare thing and that’s why or or was it that you ran paid ads at five different products and this was the one with the highest click-through rate because i’m pretty sure when i was talking to you it was this was the highest click-through rate cool that’s my company right like there’s a lot of that um so the other one is the guy who started dollar shave club um i saw an interview with him and some of the times he’s like i started dollar shave club because i was just sick of going to walgreens and i had to ask them to like open up the razors and then another interview he was like he’s like man my father-in-law is like crazy and he likes us to buy random stuff and one time he bought a shipping container full of cheap razors and we just had to figure out a way how to sell them all yeah exactly that’s why we did it and you know i’m in the two percent of the population i think you are too where we’re like oh sweet respect for trying to flip the storage container and then realizing there’s a business there versus like you know you know the kind of like the shark tank version of the story which was like we were just so fed up with our options right and like i get again i get it i’ve done that i might do that again but am i a little bit disgusted by it yes uh same thing with the same thing with i’ll do that usually when i have business partners not when it’s my own business um like when i’m when i’m the only when i get to just be a cowboy on my own i’ll just do what i want be like yeah i don’t care if this is bad for the business it’s fine the other day i ate a i ate an entire jar in one sitting of peanut butter from it was the jiffy cheap [ ] and i just felt so bad about myself but i didn’t regret it and that’s kind of like how you feel but i wanted to do her stuff for my friend mission statements are like a pint of and jerry’s like if it feels good doing it and you may not regret it but but you feel guilty about yourself the the other version of this is like people who on twitter are like uh they call this like [ ] posters or they’re like you know they basically they basically try to signal like you know i’m not gonna just i’m not one of those investors who blogs about content and tries to yeah i’m a cool man i’ll tell you the real deal and i’ll i’ll make jokes and blah blah it’s like they’re the ones trying to carefully curate their brand more than anyone if you actually meet these people they’re like so conscious about their brand uh and like you know how how many followers they’re getting and like how viral their stuff is going and like they are you know like uh they’re they are so meticulous about that stuff while trying to give off their appearance it’s like bed head right it’s like oh no i just woke up like this it’s like oh are you sure you don’t use a product called bed head that like you know like makes it look slightly messy but like you know you’re actually carrying where every strand of hair goes and so you know i have more respect for like um people who are like yeah like you know like pomp or sahil or they’re like yeah like people really like to hear about bitcoin so i just tweet bitcoin [ ] all the time it’s great like i like bitcoin and they like bitcoin so i’ll just tweet like i’ll just set up a calendar i’ll be like yeah i’m gonna tweet bitcoin stuff because i figured if i get a big bitcoin following that’ll be really really good for me or like you know sahaja’s like yeah i put it i put out these threads about these like finance topics because i think i’m good at it and they go viral and then it gives me all these dope connections versus like you know i just want like i feel that knowledge is um you know knowledge needs to be accessible for all and free and that’s why we need to democratize knowledge yeah i want to democratize financial knowledge like i used to work on wall street and the insiders know things that the rest of us don’t so i quit my job and started writing twitter threads about finance to democratize finance it’s like no no no no no you didn’t do any of that you wanted followers and so you did what it took to get followers have you noticed how the word democratize is the new disrupt democratizes like you know what is democratized uh it’s the new democratize is the new um no offense but that’s a democratized democratize is like about to fool you this is good for me and not good for you but i’m going to fool you by saying i’m democratizing something for you buy my service buy my product yeah by the way i do all that i do this myself i again i know it i spot it because i got it right i’ve done all this before with my e-commerce brand i’ve done the origin story thing with uh my fund i do this too like my fund is called the all-access fund because i wanted to give access to every access to all to be able to invest in the deals i do do i feel good that other people get access to good silicon valley deals yeah sure is that why i did the fun [ ] no that’s not why i did the fund right i did the fun because i was writing checks and i wanted to write bigger checks and more checks into more companies and more and that was more than my personal bankroll would allow so i raised money from other people to do that and i get you know like so now i get to write more checks into more awesome companies that’s why i raised the fund not because i wanted to democratize access to like you know angel investing for like you know a a middle school teacher in uh tennessee i can’t stand democratized we’re gonna democrat democratize this by only charging you fifty thousand dollars for this piece of clothing instead of i’m like i’ve seen people like we’re gonna democratize knowledge and it’s like a five thousand dollar course like [Laughter] you can democratize these nuts what do you think ben was today uh were we with it or what i thought today was a hit i thought today was a huge hit this is uh yeah other than like the steph smith episodes or robbed your dick this is uh this is a plus territory ah great are we gonna have to cut out my uh democratize these nuts and then so we have to plan the mfm summit so uh i agree that making a destination is cool i have a thing that i uh you’re gonna have to bleep bleep out what i’m about to say but i know the thing i know the thing yeah yeah i got the guy i got a really like famous house that person might be interested in hosting us i don’t know if that’s just gonna be a dinner right like that’s gonna be like no no no no no no no no we might be able to do a proper thing there but i don’t know if the logistics are going to work out so i think but but i think that we could do like something outrageous you know we have to think about what outrageous means but i do think we can have something outrageous i think a cruise ship i like it that’s a it’s not a bad idea a cruise ship or like some type of famous venue or [ __ ] we could just go to hawaii just do it like in the beach in hawaii we can figure something out but we do need to do it people fly out like if people are gonna have to travel for it i think to get the value again the the easiest hack is first make it a couple days where people get to hang and meet each other so do it make it like a two day thing and then and then secondly just make it already fun if it was just a vacation if there was no content on top but it’s like then you combine some content uh getting to meet us and getting to meet other people in the community plus already it was a good like kind of vacation type experience then that’s cool right and like i don’t know let’s do like bring a fitness component bring a like let’s bring all the components of the stuff we talk about where there’s like you know experiences beyond sitting down and listening to people talk it’s like why not do a group workout or like let’s get an mma guy to like you know take us through a set like take people through a session or something i don’t know like something like that down all right let’s schedule it i i do do you like that 500 price mark price point this i mean we should do this as an nft no doubt we should make this an nft and then only nft holders can attend and then they could flip their nft to somebody else if they want to but make it a limited number of nfts uh for this down all right that’s it all right that’s the episode