Sam’s +$10 Million Portfolio, Shaan's Money Philosophy and The Spending vs. Saving Paradox

Episode 476: Sam Parr (https://twitter.com/theSamParr) and Shaan Puri (https://twitter.com/ShaanVP) dive into Sam’s +$10m Financial Portfolio, Shaan shares his philosophy around money and they both explore the psychological barrier of spending money once you finally have it. Want to see more MFM? Subscribe to the MFM YouTube channel here. Check Out Sam's Stuff: • Hampton • Ideation Bootcamp • Copy That Check Out Shaan's Stuff: • Try Shepherd • Shaan's Personal Assistant System • Power Writing Course • Daily Newsletter ----- Show Notes: (0:00) Intro (3:00) Sam's Portfolio Review - Pt. 1 (13:00) Shaan’s Bad Investment Decisions (22:20) The F*cked Up Psychology of Spending Money (31:40) Wisdom > Smarts (35:00) Sam's Portfolio Review - Pt. 2 (40:30) Why Shaan Tracks His Portfolio Manually (42:30) Shaan's Money Mindset ------ Links: • Tiller: https://www.tillerhq.com/ • Do you love MFM and want to see Sam and Shaan's smiling faces? Subscribe to our Youtube channel. ------ Past guests on My First Million include Rob Dyrdek, Hasan Minhaj, Balaji Srinivasan, Jake Paul, Dr. Andrew Huberman, Gary Vee, Lance Armstrong, Sophia Amoruso, Ariel Helwani, Ramit Sethi, Stanley Druckenmiller, Peter Diamandis, Dharmesh Shah, Brian Halligan, Marc Lore, Jason Calacanis, Andrew Wilkinson, Julian Shapiro, Kat Cole, Codie Sanchez, Nader Al-Naji, Steph Smith, Trung Phan, Nick Huber, Anthony Pompliano, Ben Askren, Ramon Van Meer, Brianne Kimmel, Andrew Gazdecki, Scott Belsky, Moiz Ali, Dan Held, Elaine Zelby, Michael Saylor, Ryan Begelman, Jack Butcher, Reed Duchscher, Tai Lopez, Harley Finkelstein, Alexa von Tobel, Noah Kagan, Nick Bare, Greg Isenberg, James Altucher, Randy Hetrick and more. ----- Additional episodes you might enjoy: • #224 Rob Dyrdek - How Tracking Every Second of His Life Took Rob Drydek from 0 to $405M in Exits • #209 Gary Vaynerchuk - Why NFTS Are the Future • #178 Balaji Srinivasan - Balaji on How to Fix the Media, Cloud Cities & Crypto • #169 - How One Man Started 5, Billion Dollar Companies, Dan Gilbert's Empire, & Talking With Warren Buffett • ​​​​#218 - Why You Should Take a Think Week Like Bill Gates • Dave Portnoy vs The World, Extreme Body Monitoring, The Future of Apparel Retail, "How Much is Anthony Pompliano Worth?", and More • How Mr Beast Got 100M Views in Less Than 4 Days, The $25M Chrome Extension, and More

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Shaan Puri?

  As I like to say, I've lost more money than most people have ever made.

• 0:06Shaan Puri?

  I'm such a good investor that I've lost more money than you could dream of making.

• 0:21Sam Parr?

  What's going on in New York? Headed back to Austin tomorrow, but I'm good. How are you?

• 0:27Shaan Puri?

  I'm doing great. I'm stationary where I always am and not moving anywhere.

• 0:32Sam Parr?

  What did you say? You tweeted out, you said, I'll be in LA. Who's up? Or what did you say?

• 0:37Shaan Puri?

  I said, knock, knock, who's there?

• 0:39Sam Parr?

  Knock, knock, who's there? You also said you're looking for a cold plunge that you can buy. That doesn't require you to post on Instagram.

• 0:47Shaan Puri?

  Yeah.

• 0:48Sam Parr?

  I can't tell.

• 0:49Shaan Puri?

  We don't seem to have the technology yet to do this.

• 0:51Sam Parr?

  Yeah. I can't tell if you're making fun of me or if you actually want a plunge. Do you?

• 0:58Shaan Puri?

  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. So I'm not really that interested in that, but I just thought it was funny. I was like, you know, basically making fun of you, Sahil and the like, everybody, everybody who has a cold plunge. It's like, you know what? This is actually a recording studio that I'm going to use every day. Every day I do this, I'm gonna post every day about this. It's like, it's like, yeah, brushing your teeth, man. It's just part of my routine and I just do it. And then when I do it, I want to bring y'all with me. Just get this on my story every day.

• 1:36Sam Parr?

  We'll have to put an Andrew Huberman fan, a vegan and like a CrossFitter all in one room and see like, does spontaneous combustion just happen?

• 1:47Shaan Puri?

  It's like we've discovered something stronger than entropy.

• 1:51Sam Parr?

  Is there enough friction to create a fire? There might be between who talks the most. All right, I've got a couple of interesting topics today. The biggest one, and what we're going to do right now is I want to do something that I only do privately. I'll do it publicly. So this is, that 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.

• 2:22Shaan Puri?

  Okay.

• 2:23Sam Parr?

  Do you know what I'm saying?

• 2:25Shaan Puri?

  I know exactly what you're saying.

• 2:26Sam Parr?

  You don't have to keep asking. I know what you're saying.

• 2:30Sam Parr?

  You know what I'm saying?

• 2:33Sam Parr?

  You ask this question a lot to our guests. I think it first started with Ryan Holiday, and I thought it was like just the most blunt, wonderful question you go, so what do you do with your money? And I thought that was wonderful. And so that's kind of how I like came up with the idea to do this. And so I figure today we can do that. Does that sound interesting to you?

• 2:51Shaan Puri?

  Yeah, let's do it. All right, the portfolio review. And I guess I think we're going to do this like the other way. I like to ask the question is if there was a pie chart, you know, roughly what percent are you putting over here? What percent are you putting over there and why?

• 3:05Sam Parr?

  And I'm not like one of those guys. So our friend Nick Huber sent an email out the other day and he put like exact numbers of everything of his net worth. And there's a bunch of people who do that. I'm not that transparent. So I don't, I don't particularly like that, but I'll be very transparent about some things.

• 3:19Shaan Puri?

  Yeah, we're not going financially streaking here, but you know, yeah, if we can go to the beach, we could.

• 3:27Shaan Puri?

  I'll take my shirt off.

• 3:30Sam Parr?

  Yeah, yeah, yeah, we're going to go, we're going to pop the top, but we're not, we're keeping the bottoms on.

• 3:34Shaan Puri?

  Right.

• 3:35Sam Parr?

  Okay, so first, let me say my strategy for this whole thing. The first thing is that a lot of this is contingent on my previous strategy, which started when I was like 21 years old, was to start and sell a business by the age of 30. I thought if I did that, that would give me some financial security, which was basically rooted in like being insecure about money for a very long time and wanting to have like some type of security. So that's like, a lot of people listening in the YouTube comments, I know they're going to say, but how did you get like blank? Well, we talked about it a ton, 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

• 4:17Sam Parr?

  conservative. And so that is not the right fit for a lot of people.

• 4:21Shaan Puri?

  Right.

• 4:22Sam Parr?

  The reason I'm conservative is I'm going to break it down into four different accounts, of which my big, major account, I consider that account my livable money. So I don't actually draw off any of it, but my game plan was to sell a business and have that big windfall. If I wanted to, it could just go into the stock market and the gains could pay for the rest of my life without ever having to touch the principal. So that's kind of like the strategy on that. And then also, as of now, I currently live off of my income. So we make income from this podcast, from our other companies, my wife works. So I live off that money. So I don't actually touch any of the other stuff.

• 5:01Shaan Puri?

  Explain, because I think without numbers, it's hard. Let's pretend for a second that when you sold the hustle, you made $10 million after taxes. Let's just pretend that's true.

• 5:11Sam Parr?

  Yeah.

• 5:11Shaan Puri?

  What you're saying is you put $10 million in Vanguard index, and that's your basically like, if I need it, that's there. I'm financially independent, but you don't want to touch it. And so you live, you pay your bills off of things like this podcast, or you know, people buying your digital products or random stuff like that. That's like kind of money in, money out. That's your, that's how you fund your lifestyle and you could do whatever you want. And then you have this nest egg that's there. That's basically what you're saying was your kind of strategy from twenties was basically live cheap, build a company, sell it. So you have that nest egg. Now you're like, I got the nest egg and I have this income source that's, that's pretty strong that pays for all of my lifestyle stuff. What now?

• 5:53Sam Parr?

  Specifically, the way that I had planned on it was, let's say you had $10 million, you can draw out 3% of that per year. And basically, your nut, your portfolio, that $10 million would hypothetically, and mostly realistically based off 100 years of data, continue to grow each year. Some years it actually wouldn't, some years it would, but it would average to, each decade it would grow. Yes. And that number's 3% that I hypothetically would pull out. Of course, I don't, but I could. And then finally, My strategy is to reduce stress and to make income from my private companies. And so I am not an active investor of which we are going to see. And also, this is not advice. I don't know anything, so don't actually do anything I'm saying. I'm just telling you what I do.

• 6:38Sam Parr?

  All right.

• 6:39Shaan Puri?

  Also, if this were advice, this is like the financial equivalent of like, try missionary. Right? It's like, you're not even going to like, this portfolio review is not going to be like, like crazy backdoor sweep that's, you know, puts over here, some calls over there. Like, I'm pretty sure what you're going to say is that buy the index, buy some bonds, and then I try to build more wealth through my private businesses. Did I already spoil your portfolio review?

• 7:08Sam Parr?

  Exactly.

• 7:09Shaan Puri?

  Let's talk about percentages. And what index are you buying? Is it one? Are you buying multiple indexes?

• 7:14Sam Parr?

  Yeah. All right. So I'm going to break this down into four categories. Category one, I'm just going to call it the big account. I'm not going to say who I use because I don't want people looking after me or going after 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.

• 7:34Shaan Puri?

  Okay.

• 7:34Sam Parr?

  Okay. So the big, the big account. I have 79% of that in VTI. So that's just a Vanguard Total Index Fund. Another 15% of the pie chart is in short term treasuries, which are currently yielding, I think, 4.9%. And I think it's like a 60 day term, meaning every 60 days as of now, we're rebiding, rebuying them. They could be 90 days. I forget, but the short term. And then 6% in a real estate fund that buys Walgreens. I think it's called like Oak, Oak Tree, or I don't even know. Just some boring thing that like owns like either hundreds or thousands of Walgreens buildings and Walgreens releases the buildings.

• 8:19Shaan Puri?

  And year to date, VTI up 19%. One year chart, 15%. Five year chart, 57%.

• 8:26Sam Parr?

  That's fine. I'll take that all day.

• 8:29Sam Parr?

  What's VTI historically over the last 30 years? I think it's like 8% a year, maybe?

• 8:33Shaan Puri?

  Yeah.

• 8:33Sam Parr?

  So that it's just boring stuff. And then bonds prior to like when the economy was killing it like three years ago, I think bonds were like 1%. Now they're like 5%. And so I'll take that all day. And I think like a savings account, like a high yield savings account is also like three or 4%, which is where I keep cash.

• 8:55Shaan Puri?

  Which is basically 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,

• 9:08Shaan Puri?

  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.

• 9:26Sam Parr?

  Yes. My opinion is that most people, if they are trying to make a lot of money, should try to make money through starting a company or owning equity in a company. And then as their cash flow comes in, as long as they don't need that to start another business, they should mostly do what I'm doing, which is what I've done before I did this, I was just in wealth front.

• 9:45Shaan Puri?

  And by the way, you said this on a different podcast, I think it's worth saying. So you were like, I wanted to be kind of like rich by 30 ish. And you're like, to do that, you basically have to start a business.

• 9:58Sam Parr?

  And not only that, I think you, the likelihood of selling a business and getting there is probably higher. Because if you start a company at the age of 21 and you want to earn $10 million, you could assume that more likely than not, your first three years, you're going to make minimum wage. Or in my case, I made 20 grand a year. I made $2,000 a month is what I paid myself for the first two years of my business. So that gets you to like the age of 25, which means you have to average something like two or $3 million a year in profit. Because you got to get taxed and that will accumulate to like $10 million. I think that's very, very challenging. And I think it's a little bit.

• 10:33Shaan Puri?

  It's about selling. Yeah, that's, that's the differentiation here. It's about selling versus, you know, cash flowing your way there.

• 10:39Sam Parr?

  That's my opinion. Yes. And the way that my like quote, big account works is I keep roughly 100 to $200,000 in my checking account. Any number or savings account, whatever I use, any number above that goes straight into my investment fund of this big account. All right. The second one, I got a sugar mama. Have I told you that?

• 11:03Shaan Puri?

  How is she? What's her name?

• 11:05Sam Parr?

  Her name's Sarah. I've been with her for nine years. She's my sugar mama. My wife actually made money before I did. My wife went to Penn, very, very smart woman, went to an Ivy League school, got a job at Facebook, and then worked at Airbnb. She's been there for like six or seven years. Airbnb went public in December, I think of 2021. We thought that they were going to go out of business. We didn't think Airbnb was going to work out. Turns out, they did awesome. I think when she started working there, I think the valuation of Airbnb was 10 billion. It could have been 18. I don't remember. When I IPO'd, I think it was 100 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.

• 11:51Sam Parr?

  What are you looking at Airbnb's stock right now?

• 11:52Shaan Puri?

  93 billion.

• 11:53Sam Parr?

  93 billion. So I think it was like 8 billion during the pandemic, if I remember correctly. I don't remember exactly. We haven't sold a lick of that. The other stock of which we own is HubSpot. When I sold to HubSpot, I was given a bunch of stock. I have not sold any of it, other than the amount that I had to take out to pay taxes. And that's like a legal thing, like they automatically take that out. My intention is to not sell any of that in the next five years. Maybe I will, maybe I won't. As of now, I don't need the money. I like both Airbnb and I like HubSpot. I'm not selling any of that at the moment. I also have a 401k that I've always maxed out. And then I have Bitcoin that I bought in 2014, that basically has just sat there dormant forever.

• 12:36Sam Parr?

  And I don't even know what it is now, but I have not sold any of it. Have you ever sold Bitcoin?

• 12:42Shaan Puri?

  Yeah, I've sold Bitcoin at a couple of different points. Each time I sold was a poor decision. I don't know if I told you the first time I sold. So I bought Bitcoin, like back was like $300, something like that. That was my original, original buy. I think 400 was my average. It shot up to, I don't know, 3,000, 4,000 at one point. I go to a wedding and my aunt, I think I've told this story before. My aunt, who's like, you know, an Indian auntie, is, I'm walking to a conversation she's having with her friends and she's, she literally goes, "Oh yeah, Ethereum is very good." And I was like, I was like, my aunt's talking about Ethereum and saying it's very good? And I was like, well, how can you say it's good? Oh, Ethereum, it used to be this price, now it's this price. It's very good.

• 13:26Shaan Puri?

  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 your Indian auntie on the east coast is talking about assets like, you know, are 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 immediately go and I try to liquidate everything. I try to sell the whole thing. I everything I have Coinbase limits you.

• 13:54Sam Parr?

  Wait, was it really because of that?

• 13:55Shaan Puri?

  Literally because of that. I so I that night I go 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, oh, you can only sell like, I don't know, 15 grand at a time or something like that. So I'm trying to max it out every day and try to sell. And at some point I got time to time by the fifth day or whatever. I was like, okay, let me just leave whatever else is there. It's fine. It kind of wore off.

• 14:18Shaan Puri?

  Bitcoin shoots up to 19,000 in like the next two months. And I was like, oh my God, what am I doing? I mistimed the bubble. And then it goes back down to like, whatever, 3,000. I was like, oh, I feel good now. And I was like, this is stupid. I shouldn't just feel good and 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.

• 14:38Sam Parr?

  Dude, I can't believe that you let your aunt, that one story sway like change your actions.

• 14:45Shaan Puri?

  Oh, that's happened to me multiple. I told you about the Tesla one too. I basically own a ton of like, the only stock I owned early on was Tesla. But back in the Tesla was like very like, kind of like a young stock. It was like, maybe like a two or three billion dollar valuation, maybe five. And.

• 14:59Sam Parr?

  What's it now, like 600 billion or a trillion or something?

• 15:02Shaan Puri?

  It went up to basically close to a trillion. Now I don't know what it's at.

• 15:06Sam Parr?

  I can't even do that math. So what's a thousand dollars in Tesla?

• 15:09Shaan Puri?

  I would have had, I had a very small amount of money out of college. I had like made like 25K at my first job or something like that. Saved enough to like invest that much or 25, 30K or something. And I did the math once. Yeah, it's at 900 billion now. So it would have been basically, I remember when I had done the math. It was like, oh, that 25K would have been like $6 million by now. If I just held and instead I went on Reddit and there's like, I don't know if you know on Reddit, there's all these like, it's called like Tesla Q. It's basically like a group of people who that believe that Tesla is like going to zero slash like, maybe it's like fraudulent. And there's like all these people sending-

• 15:45Sam Parr?

  They say that they have fake cars, right? Like, like they're Photoshop images.

• 15:49Shaan Puri?

  Not fake cars, but like lots of other things like that. Like there would be like guys who'd be like, guys, there's this garage in Phoenix and look at this. And he would go to this garage and it was only Teslas parked on six stories and he's walking up and he's like, they're stashing them here so that you can't tell where they're like, because if they just leave them in the factory lot, it's clear they're not selling this piling up. He's like, look at this, this one has, and he's like, putting his finger on it's got dust. He's like, look at this, this hasn't moved in months. And I was like, he's right. Thank you. You slash 333 kitty kitty hot, 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 15 different CFOs. And I was like, that does seem fishy. Why, why have

• 16:32Shaan Puri?

  so many CFOs come, looked at the books and left in a very short period of time? That doesn't sound right. And I basically took all these signals and I sold and I was like, so I tripled my investment or quadrupled my investment. And I was like, yeah, I'm getting out of the top, boys. And then, you know, it like 100X since then. It wasn't really, wasn't really-

• 16:53Sam Parr?

  And that's the second time that's happened to you. The first time it happened to you was with Stripe. When you had a job offer, I think at Stripe-

• 16:58Shaan Puri?

  No, no, Stripe, I blew the, the interview. I didn't get the offer. I only applied to one job. It was Stripe back in 2011 or 12. So I would have been like employee 20 at Stripe, which is like a guaranteed, like if you, if you stick it out and you're there for four or five years or seven years and you, and you kind of like work your way up a little bit, even at a junior level entry position, probably would have ended up over like a seven year period, making somewhere between 10 and 20 million dollars. And- My mentor is the mentor of the guy who's interviewing me. That's his mentor, right? Mentors have like a pretty big influence. If the mentor says, hey, this person's amazing. You're like, oh, thank you, Sensei. Like, I'll listen. I, he, my mentor had written a blog post saying,

• 17:43Shaan Puri?

  I met this kid, he's 21 years old, he's an entrepreneur, and he's got the highest like bias for action of anybody I've met in the last 10 years. And I was like, wow, glowing five star review, basically. I hand it to this guy, this 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 30, 30, 30 point lead during the interview where I, he's like, okay, so like, this is kind of like a sales position, like, you know, sell me a piece of software that you really like. I was like, I was like, sell me this pen, eh?

• 18:24Shaan Puri?

  I was like, I was like, so what I would do is I would basically just ask him a bunch of questions. He said, no, no, like, ring, ring, hello? Like, just do it, pretend.

• 18:33Shaan Puri?

  And I was like, and I just, I don't know, like, I don't know what I said, but whatever I said at the end, he's like, yeah, that wasn't very good. Yeah, I don't think this is a sale, it's probably not your thing. You're probably not that good at this. So, um, 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, ah, 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 engineer's laundry. And I was like, all right, fuck it, I'm gonna go for this other job instead.

• 19:00Sam Parr?

  And the other guy was like, uh, he was like, so Sean, what do you know about Stripe? And like the banking system? Sean's like, uh, well, I like money. I would like, I would like to have some more of it.

• 19:12Shaan Puri?

  Big fan of, big fan of stripes, white stripes, crest whitening stripes. Uh, no, those are strips, sorry, sorry, those are strips. Uh, let's see, Adidas logo, you know.

• 19:22Sam Parr?

  You ever been to Stripe's convenience store? Love it.

• 19:26Sam Parr?

  That's how that interview went, so that blew it. 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. So it's good because I don't sell anything.

• 19:43Shaan Puri?

  As I like to say, I've lost more money than most people I've ever made.

• 19:49Shaan Puri?

  I'm such a good investor that I've lost more money than you could dream of making.

• 19:55Sam Parr?

  When we sold the HubSpot, I think the stock was 367. I think it went up to like 860. And that was, it was amazing. And then it went down to like 250. And I remember thinking like, oh, man, is this right? Is this right? What do I do? And so like that, that, that definitely impacts me. Like, I definitely want to sell.

• 20:12Shaan Puri?

  I literally did it with the HubSpot thing. I bought HubSpot stock

• 20:17Shaan Puri?

  right around when you, when you sold and then it went up and it was like, oh, and everything was going up during that period of time. And then when the whole market crashed, I was like, you know what? I don't really want to be in the stock market right now. This isn't very fun. I don't know. Like, there's all these, 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 just get out of like public market stock picking, which I'm not like, I don't know if I'm very good or very bad at it, but I just think generally is a bad strategy to, to take to, to your investing. And yeah, basically sold almost the exact bottom of the market. Like the literal bottom. Like I sold and there's a guy somewhere in air traffic control. He's like,

• 20:59Shaan Puri?

  the bottom's in, he's out, he's out, let's go, pump, pump, pump. Let's move.

• 21:05Sam Parr?

  Most people only hit rock bottom once in their life. That's like the point of the phrase.

• 21:09Shaan Puri?

  Right.

• 21:13Shaan Puri?

  Somebody was asking me this the other day. They were like, they're like, oh, so what are you doing with your kind of like investments? I'm explaining what I do. And they're like, um, so what do you like, you know, what do you do for your, like your safety net or whatever? Like, and I was like, safe? Like you're looking at it. He's like, what do you mean? I was like, am I still me? If I'm still me, I'm safe. Like, what do you, I could lose all this. Who cares? I could get, I could lose all of it. I'd make it all back. Like, I have no, I am the safety net. I, you know, a bond portfolio is not my safety net. My 401k that's locked up till I'm 65. I don't think of that as my safety net. I am my safety net. And that's, uh, I think that's an approach.

• 21:52Shaan Puri?

  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 count you as one of these people. And you never look bad. But I also think you leave so much room where like, you didn't need to, like, have you spent a dollar? Or like, have you spent more than 10% of the money from the hustle sale? No way.

• 22:19Sam Parr?

  Definitely not.

• 22:20Shaan Puri?

  5%? Have you even spent a dollar from that account?

• 22:23Sam Parr?

  No, no, 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.

• 22:32Shaan Puri?

  So I'm not that, I'm not Persian, I'm Indian. About one car.

• 22:41Sam Parr?

  You've got three all white G wagons. That's all I'll say.

• 22:45Shaan Puri?

  So, so the thing, you know, this is one way I think about it. Like you worked for 10 years every day to build this company and you sold it. You achieved the thing you exactly wanted and not a dollar has moved in like two years, three years. You haven't like moved a dollar from it. In a way you bought, you spent 10 years to save up for this power tool and then you just leave it in the case. And, and I don't know if like, I'm not saying that my way is right, but I also know that for me, uh, my philosophy is money is a tool to be used to enhance your life. And if you're not really using it, and then you work hard to like go get more money, it's like, it doesn't really all compute for me. What is the way you think about that to like, make that feel right?

• 23:29Sam Parr?

  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 95. There is no long-term view. Like that, that doesn't exist.

• 23:39Shaan Puri?

  Right.

• 23:40Sam Parr?

  And so it to criticize myself, I am horrible at spending money. Ramit Sethi, 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. Uh, 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 uh, 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.

• 24:20Shaan Puri?

  Right.

• 24:20Sam Parr?

  But yeah, that's a, I, I think typically what I've seen is people who earn a lump sum, like a startup where they are poor and then suddenly they're not poor. Those people tend to be more like me where they're really tightwad 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 raised. Do you know what I mean? Just like running out of money.

• 24:50Shaan Puri?

  I'm going to share without sharing somebody's name. Somebody, a friend of ours sent me a presentation that they did, that they made, kind of like about their life as part of, like one of these like peer group things, not Hampton, but a different one. So we don't, we don't plug no other names of no other groups on this podcast.

• 25:09Sam Parr?

  That's right. Thank you. I appreciate that.

• 25:10Shaan Puri?

  So, so he sent me this thing and I thought it was really great. Basically it's like, you know, here's my life story and here's what I do with my money. And he had a couple of 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 is this $2,000 bike. It's an awesome bike. Most expensive purchase, most expensive item I've owned since. It's been like 10 years or something like, it's like, whoa.

• 25:50Shaan Puri?

  Until I recently bought a condo finally, like last year. This was the most expensive item I owned. Love this bike. I was like, okay, interesting. And then, and 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 talked myself out of it because there was a fee associated with it. I would have made like 20 million bucks on that. You know, so, so I think that's just a great exercise to go on, which is like, you can survive a bunch of bad mistakes. And if you're going to play the game, any, like any good startup investor has an epic anti portfolio, a bunch of businesses that they passed on that they should have invested in.

• 26:33Shaan Puri?

  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 where he's like, I've missed 3,000 game winning shots or whatever. It's like, yeah, that's what happens when you're, you play, you're going to miss shots and like you can't.

• 26:49Sam Parr?

  Yeah, everyone has like. I literally know 15 people that have the same Uber story. Like that was like, 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 that. I think Gary Vaynerchuk, like in the beginning of his book, he like gives a compliment to Travis Kalanick, the founder of Uber.

• 27:08Shaan Puri?

  He like calls him out as like, you know.

• 27:10Sam Parr?

  Yeah. He's like, dude, I thanked my wife. He's like, I thanked my wife, my children and Travis Kalanick, meaning I was super close with them and I still passed on that and that cost me a hundred million dollars.

• 27:20Shaan Puri?

  Exactly.

• 27:20Sam Parr?

  I think that's like a famous story he says. So yeah, everyone has that story.

• 27:24Shaan Puri?

  Let me give you two other slides. He says, then it's, then there's two slides called my F'd up relationship with money. I think I can read this. Let me see. So it says, I work hard to make money and I got good at it, but then I hoard the money I make. I put it in bank accounts. I look at it constantly. And besides hoarding, I know money, I know that money is good for one other thing, making more money. You know, like that's, uh, that's something I, 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. Uh, 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, but they wouldn't spend on themselves. And, um, that's annoying. They, 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.

• 28:07Shaan Puri?

  All the profit from this, I must spend on something hedonistic. I must, I must spend, I can't save this money. Didn't work. Still saved it. He goes, I'm comfortable losing 500K on an investment just like that. But if you said five, spend 500K to improve your life and I guarantee it will improve your life. I can't, I can't do it. I can't get myself to do it.

• 28:24Sam Parr?

  I'm the exact same way. I've been looking at, I've been looking at your company. Well, I've been looking at your company, Shepherd. I think it's like 3,000 a month for an assistant, of which I desperately need, but I'm like $3,000 a month.

• 28:38Sam Parr?

  But well, the, it's not a fee, uh, whatever the payment is to the person.

• 28:41Shaan Puri?

  If you hire somebody, you pay 30% of their salary as a, as the headhunter bounty wants. That's it. So it'll be like three, it'll be like three grand for the year is for most people. That's like, let's say an average.

• 28:51Sam Parr?

  But I mean, I have to pay the, uh, the, the, the person's, uh, the person's salary. And I'm like, well, that's 36 grand a year, but if you do that over five years at the rate that we're growing right now, that's $90,000. Like I'm ruining the compounding.

• 29:04Shaan Puri?

  She might really be valuable and that might be a 15 year relationship. Now I'm talking about a $500,000 investment, but I could also put that in VTI and it would compound 8% and now you've talked yourself out of it.

• 29:16Sam Parr?

  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 80 years, because we might live to be like 110, that means that that's only $800 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, is he an immigrant? Is this guy an immigrant that you're talking about? It's 100% most immigrants that I've been around have, or not most, but this is, it sounds like a very much an immigrant problem.

• 29:46Shaan Puri?

  Right.

• 29:47Sam Parr?

  Of which I'm the exact opposite of an immigrant, but that's why, that's why I like those guys. I identify with them.

• 29:52Shaan Puri?

  We had this, this funny experience yesterday where, um, another friend who also mega, mega wealthy, where we met him and when we met up with this person in person, they were like, you know what? I really want to like shift into like family mode. Like I'm ready to like meet somebody, have a kid, like, you know, like I want to do that part of life now. And we're like, that makes total sense. Good on you. You're, you know, you did the money thing, the business thing. You, you, you, you scratched that itch. You proved you could do it. Now you're in your 30s and you're saying, you know what? 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 want to do that. So that was where we left the conversation. And now, um, my business partner, Ben, Ben Levy, he's like the man with like checking in on people. Checks in on everybody. And so he's just always providing me the stream

• 30:37Shaan Puri?

  of updates about like what people are up to and it's great. And so he's like, uh, yo, that friend, he's like, he's like doing something new. And I'm like, uh, like not just doing one thing new, he's 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 finding a partner, starting a family, like, whatever that is. Like, oh, yeah, he still wants to do that. It's like, we start in four companies. I mean, that doesn't seem like that's gonna be very conducive to like, you know, put your focus on something, right? And it's like, yeah, I agree. And I go, how can this keeps happening? Like, we have so many smart friends. I said, there's a big difference between smart and wise. And I think that's what

• 31:16Shaan Puri?

  we're seeing is basically with a lot of smart friends that are not that wise about like, decision making. So they're intelligent for sure. But they make decisions that don't really make sense if you zoomed out a little bit.

• 31:30Sam Parr?

  How old's this person?

• 31:32Shaan Puri?

  I don't know, like, I don't know, mid 30s or something like that?

• 31:34Sam Parr?

  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 or wisdom power. Do you know what I mean?

• 31:49Shaan Puri?

  That's what I'm saying. Like, I'm not telling you, you gotta go get married and have kids. But if you told me you wanted to get married and 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 asked 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 texted Ben, I go, man, we're, you know, I'm guilty of this in other areas of my life, right? Because again, if you spot it, you got it. So anytime I notice something in 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 did something I very rarely do. I almost never do this. I canceled my workout, because I was like, had two doctor's appointments. And I was like, if I, if I do this workout in the middle of the day, then I'm

• 32:34Shaan Puri?

  just not gonna get any work done today. Cancelled 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.

• 32:45Sam Parr?

  You have 54 days left, I think, right?

• 32:47Shaan Puri?

  Oh, yeah, I'm on day, uh, no, I'm on 49, uh, 49 days left.

• 32:51Sam Parr?

  Yep. Yeah, 49 days left to get abs.

• 32:54Shaan Puri?

  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 decision. That's an unwise decision to say, hey, on one day I said, this is my main goal. And then three days later, I'm prioritizing something else above my main goal. What? That doesn't make any sense. And same way this person's doing that with their relationship. Their main goal is to get married and have kids, but they prioritize a bunch of other stuff. And I was like, that's not intelligence, that's wisdom. Like, that's basically having good judgment. And I realized that like wisdom or good judgment is the thing that's most short in supply and the most valuable. Cause it's like a lever. You don't have to be that hardworking or that smart.

• 33:34Shaan Puri?

  If you have great judgment, if you pick the right things to focus on, pick the right people to work with, uh, pick the right place to live. You don't have to be like 9,000 IQ. You don't have to know everything about everything. You don't have to be the hardest worker, but if you have poor judgment, no amount of hard work or like intelligence really saves you. You kind of screw yourself. And so it just really emphasized that point to me about like, you know, smart does not equal wise and the goal is wise, not smart.

• 34:01Sam Parr?

  I think that's a good one. I like that. And it's like when you're driving and you say, everyone's such a horrible driver. It's like, dude, that is you too. Uh, 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 going to have a lot of, uh, opinions on. The last one, or the second to last one is my non-liquid stuff of which it's roughly $3.8 million in real estate, of which I have a mortgage on my house. I think my house was $950,000 that I bought. I have a mortgage of like $550 left. I own a ranch. I own some vacant lots in Austin.

• 34:41Sam Parr?

  And I'm a small owner in some storage deals, a Brooklyn building and one or two small things. And the other non-liquid stuff is angel investing. Now here's what I do and you tell me if I'm wrong. I reduced, I value it at, so the principal sum that I put in, plus I even put a large discount on that, of which it's not, that would be around $500,000 of startup investments. The way that I see that is I've done roughly 50, I think. 40 will probably not work. 10 will work, of which three might pay back everything, plus a little bit. And I've reduced the principal by a significant amount,

• 35:24Sam Parr?

  just in assuming future net worth. And anything above that, whatever, maybe it will work. What do you think about that?

• 35:29Shaan Puri?

  Yeah, I think basically startup investing is, uh, it's so, it's so long time horizon, right? Like you have to assume that these are going to take seven to 10 years before they pay out. So even if they are worth X, they're not really worth X to you yet. They're these little eggs that are, that are, you know, going to be hatching. And so I'm with you. Basically, when I calculate, I never calculate net worth because I think that's kind of useless because it takes into account illiquid things that are going to either like go to zero or go way up in value. Like my own businesses are going to either go to zero or go way up in value, most likely. And they're illiquid. 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. So that doesn't include any of my own businesses.

• 36:14Shaan Puri?

  And I also don't include any startup 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.

• 36:24Sam Parr?

  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 50 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.

• 37:02Shaan Puri?

  Like my e-commerce, I don't, I don't include it in the calculation.

• 37:06Sam Parr?

  Even though that business is doing great, you, you include that as zero still?

• 37:10Shaan Puri?

  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 net worth, yeah, I didn't include it. I put some conservative number there, but I don't even really bother because what's the point? In fact, I think the whole net worth thing is like, um, not a great

• 37:30Shaan Puri?

  thing to, like, I'm kind of in search of a better metric.

• 37:34Sam Parr?

  Well, there's earning, so income, do you measure that?

• 37:37Shaan Puri?

  But then income is like only things that are, you know, it's going to buy us way too hard to get to things that are only, you know, generating cash flow today.

• 37:46Shaan Puri?

  So it's not going to count really any like assets.

• 37:47Sam Parr?

  No, I mean, do you measure your income on a monthly basis? I measure my, every month I like do like a report where I look at like, all right, what was my income this month and where it come from?

• 37:55Shaan Puri?

  Yeah, not religiously, but it's, it's mostly like steady. I can, I kind of know the one or two things that are variable. I'm like, oh, that's what that was at this month. Plus, you know, it's, it's like in the same range roughly. So yeah, I know, I know what it's coming in every month. I know roughly what's coming out every month. I don't really keep track of spending too much. I'll, I'll kind of calculate spending every couple of months just to be like, am I, did I add anything significant here?

• 38:19Sam Parr?

  What's your spend right now? I think I spend maybe 25 or $30,000 a month.

• 38:23Shaan Puri?

  Yeah, I think I'm at 30, 30K a month of burn, life, life expenses.

• 38:27Sam Parr?

  And I, and I feel that that's a lot.

• 38:29Shaan Puri?

  That sounds like a lot to me. That sounds insane to me.

• 38:32Sam Parr?

  We have a friend who told us that they are currently spending $300,000 a month. And I was like gasping. I was like, I can't comprehend that. And then they listed it all out and I was like, yeah, that definitely adds up, but that's just like.

• 38:47Shaan Puri?

  You do need the jet. I mean, what are you going to do without it?

• 38:52Sam Parr?

  It was insane to me. I've got another friend that spends 80,000 and I'm like gasping.

• 38:57Shaan Puri?

  Right.

• 38:57Sam Parr?

  But I guess like everything changed when you get, when you get to different levels. But so anyway, that's kind of like my portfolio. I want to 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 tillerhq.com. It's like a plugin and I track this in Google Sheets. What do you, do you track anything like your accounts?

• 39:19Shaan Puri?

  I don't use any of these apps because I'm like, I'm like connecting my shit to these random startup apps. Like, you know, I don't want to, I don't want to put all my stuff into these apps. So, uh, cause I'm not that concerned with it in general.

• 39:32Shaan Puri?

  You know, the fewer things that you're concerned about, the better in general.

• 39:36Sam Parr?

  Yes.

• 39:36Shaan Puri?

  But just like

• 39:37Sam Parr?

  Surely like

• 39:38Shaan Puri?

  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 that.

• 39:50Sam Parr?

  But there's like a, there's like a logistical problem. Let's say your wife has a 401k from her job from like eight years ago.

• 39:56Shaan Puri?

  Yeah.

• 39:57Sam Parr?

  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, uh, like, let's say that you each had like a Robin Hood account or an E-Trade account. Plus, uh, her previous before you were married, maybe checking her savings. I mean, like, it kind of can accumulate whether you have money or not, that you have eight or 10 accounts. And like, what happens if you die and she doesn't know about all of them or vice versa? Do you know what I mean?

• 40:22Shaan Puri?

  Yeah, we do have that problem, which is if I die, I don't think she's going to be able to like, know or find or access a bunch of stuff, especially the crypto stuff. How's she going to get to that? I've told her three times and 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 going to happen with that. I, that I am a little bit concerned about. However, The rest of the stuff, again, I just do it by hand and I make a day out of it. I treat it like a spa day. It's like, right? I think you talked about this concept of worry time. You're like, I just schedule some worry time in the future.

• 40:52Sam Parr?

  Worry time.

• 40:52Shaan Puri?

  That's 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, oh, today's the day. It's basically like, let's have a little financial picnic. Right? Let me open up some of these baskets and see what's inside. And let me take stock of what's going on. And I think once a quarter for me is the right amount of energy I'm trying to spend on, on this. And I just don't really want to think about it otherwise.

• 41:17Sam Parr?

  Do you know anyone who's crazier than you? I mean, I view you as being quite crazy. I've got one friend that made like a hundred and fifty million dollars and they invested like the majority of it in only two things, their 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.

• 41:39Shaan Puri?

  Right.

• 41:39Sam Parr?

  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?

• 41:50Shaan Puri?

  When you say crazy, do you like, is this kind of like, oh, this bum on the streets a little crazy? Or is it like, wow, that she's hot, but she's crazy? Like, which one am I? My hot girl crazy or my bum crazy?

• 42:04Sam Parr?

  More like bet it all on black, like, like tuition money or this game of roulette.

• 42:10Shaan Puri?

  Right. I don't view myself as that crazy. I think I have a pretty healthy view on money. I'll explain it to you in a few sentences. Number one, money is a tool to enable a better lifestyle. That's what it's for. That's how I use it. So that's the first thing. That includes spending on lifestyle, but it also includes learning things. My angel investments, I don't view as the absolute optimum way for me personally to make money. But I love them because I learn so much about where the world is going from startups. And I like being around entrepreneurs. That's, those are my people. So I'm using money as my tool to like, make my life more like how I want.

• 42:51Shaan Puri?

  So I use money as a tool. That's the first thing. Money is a tool to enable a better lifestyle. I think I abide by that law. The second thing is money's 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 could be in nothing. It could just be literally sitting in a bank account, doing absolutely nothing, but it's not doing nothing. It's enabling me to be free with the rest of the money because I know that if I lost everything, if somehow everything

• 43:31Shaan Puri?

  went to zero, I would still have three years of runway. And again, I'm me, I am my own safety net. If you give me three years of runway, I'll have it all back and more by then, like, you know, if I needed to, to make money a focus. And so I do that. So to me, I'm like, if I have three years of life expenses put away, 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. You know, when I sold my company, it wasn't for as much money as you sold your company for. I think if I had sold my company for as much as you did, I might do things slightly differently,

• 44:12Shaan Puri?

  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 going to make mistakes. I'm going to have some things that go to zero. I'm going to sell some things at the wrong time. I would say the only leak in my game is really just that I sell things at all. I really just shouldn't sell like the, the only investment mistake I've made is just selling.

• 44:35Sam Parr?

  Okay. But are you actually gonna, you've just acknowledged and we'll go, well, we can make fun of me after this, but you've acknowledged that. So are you making that?

• 44:42Shaan Puri?

  Yes, exactly. So I made that, but

• 44:43Sam Parr?

  Okay. So you're not going to sell ever or often?

• 44:46Shaan Puri?

  I'm buying things. I basically default to say, this is only, you have to break glass if you're going to sell this. So basically like you have to really have a reason, like either you need the money and you gotta sell the thing or Something in the world has changed that caused you to like re underwrite this now. I would argue I kind of did that with the last time that I sold when basically like the post covid kind of like what's money printing is going on, what's going on in the economy, everything, all the stocks crashed. I thought, okay, we've had a 13 year bull market. We're probably not just going to have six months of bad times and then back to the good times again. Like, I still kind of believe that that's true.

• 45:25Shaan Puri?

  But I should say, I wasn't in a place to re underwrite that, that those investments, because I was now thinking about macro stuff where like, if I'm spending 30% 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.

• 45:43Sam Parr?

  But where do you get the information from? Do you get it from current people? So for example, I like to, I prefer to get information. I try to read books that are at least 30 or 40 years old. And to figure out like, I try to learn about stuff. What's it called, like the Lindy effect where it's like, I try to learn about stuff that as is, has been repeated many, many, many times and isn't exactly new. For and, and, and the counter example of that is when biology said all the crazy stuff about, what was his argument? That Bitcoin's going to a million because this reason.

• 46:10Shaan Puri?

  And dollars are going to.

• 46:10Sam Parr?

  That shit scares me. And I'm like, I don't understand that. That's so new and it legitimately scared me where I was like.

• 46:16Shaan Puri?

  What I do, I don't try to do that because what I, what I find happens with that is I already have an opinion in my head and then I just go find evidence of it. Right? I already want to hold the stock forever. So then I go find the Lindy effect that says, ah, Lindy effect says that this thing is going to 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 you can't learn everything, right? Like you can't just say, I'm going to go learn the world of like finance, like this is too broad. It's impossible to do. So here's what I do. I go through and I say, what are people that I consider to be smart saying and thinking right now? And I go try to line up contenders. It's like, here's theory A about where the world is going right now, about what, here's thesis A.

• 47:01Shaan Puri?

  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, 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 now stack the evidence. Okay, now which one appears to be the strongest thesis? So instead of going and trying to learn about the topic, I take people who already like have strong opinions about this topic. And I go try to find what is the spectrum of opinions about this? So on one hand, you have Balaji, who's like-

• 47:33Sam Parr?

  Do you actually talk to them or just consume?

• 47:36Shaan Puri?

  Not always, sometimes, but like not always, like, you know, like Balaji, for example, he's just very public about his thesis. So you don't need to like, talk to him, right? It's like, he's publishing every day what he believes to be true. He's like, I moved out of America. I got out of the dollar. And here's the sources I'm citing that I'm tracking that basically says that the banking system is insolvent, that the, you know, the money printing is, you know, is out of control, inflation is higher than they're admitting. And that this is, what is the result of this? It's X, right? Then you have Ray Dalio that says, look, I've been studying empires and all empires come to an end. Here's the cycles that they go through. And I think that America's at the tail end of the cycle. So you go read that book, you go watch his talks, you're like, all right, that's one, another thesis. You have some people who say, no, you know what?

• 48:20Shaan Puri?

  This is going to bounce back because even with all the problems America has, the dollar is still the best thing we got out there. And that when all the, all the countries in the world get weaker, they'll actually flee to the whatever this relatively strongest currency is, and maybe that's the dollar. And the dollar is going to drink the whole milkshake. Basically, it's like, all right, cool.

• 48:39Shaan Puri?

  I didn't make this some, something, I forgot what it's called, like the straw that drinks the shake or some shit like that. People talk about this.

• 48:45Sam Parr?

  From There Will Be Blood. He goes, if I had a long shrug all the way over there, I drink your milkshake. I drink it up.

• 48:52Shaan Puri?

  So you basically line up a bunch of arguments and then you kind of like, you litigate them like a lawyer. You're like, what evidence do you have that supports this? What examples do you have? And then you basically say, look, okay, even if I don't know what's totally true, can I hedge? So it's like, you know, 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-

• 49:23Shaan Puri?

  However, I know my Achilles heel in this is that I do get drawn to the, to a bit of the sexy underdog opinion, the conspiracy opinion, the kind of like, this is the country, the most contrarian opinion appeals to me inside because I'm like, oh shit, this could be a mystery that we're on to that nobody else really fully, like people don't believe it. That makes me want to believe it more. And I think that's led me to make too drastic of a decision in the past of like selling all of my Tesla or selling, you know, 70% of my stocks or whatever. Like, you know, it doesn't have to be that dramatic. Like I should just put into place smaller hedges in those and track them and 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

• 50:05Shaan Puri?

  and see if the signals have grown stronger or faded.

• 50:10Sam Parr?

  Right now you're in a little bit in advice giving mode because I'm asking you questions. But to swap it, who do you look up to where you're like, I need to be more like them when it comes to personal finance?

• 50:29Shaan Puri?

  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 talk to, to get ideas on what game are they playing to generate more money? So I don't, I don't really seek or, I'm not that interested frankly, in like

• 50:53Sam Parr?

  Well, who are those people? You obviously like Andrew, our friend Andrew Wilkinson, tiny, tiny.com. He took the company public. So you can actually go and see the numbers. So you like Andrew?

• 51:03Shaan Puri?

  Yeah, I like Andrew.

• 51:04Sam Parr?

  You like Xavier?

• 51:05Shaan Puri?

  Uh, I like Xavier, yes. Said Bulky, I think had, I had really interesting things to say about what he does. Like I'll give you just a funny example.

• 51:14Sam Parr?

  So Said, by the way, he owns this thing called WP, well, it's called Awesome Corp. He started as a blog called WP Beginner, which was a blog on how to use WordPress. Now he owns tons of WordPress plugins. I don't know how big it is, but I bet it's worth half a billion dollars of which I bet he owns most of it. It probably does many, many, many tens of millions in revenue and probably tens of millions of profit, right?

• 51:38Shaan Puri?

  Yes. And yes, as in directionally, yes, I don't know the exact numbers, but he basically has a business that's amazing. That's a monopoly, it prints cash and then he does interesting things with his cash. Like he owns like, I don't know, 40 gas stations or some shit like that. It's like, why do you own gas stations, dude? Is that a good idea? Bad idea? 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 the other people operate in and they pay for all the maintenance. So 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 want to, you don't spend, it's kind of like, I don't know the math, I'm not, I'm gonna say a math term, 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 do is the cash comes in from the business,

• 52:21Shaan Puri?

  then they spend that money on life expenses. No, no, no. You only spend the second derivative. It's like, cash, let's say a million dollars comes in from your business. You don't get to spend, that million is not spendable. The million has to be invested into something 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, yeah. So 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.

• 52:51Shaan Puri?

  Wow.

• 52:54Shaan Puri?

  And that's, this is how his brain works. And I was like, interesting. Again, this is line it up. Say, does that, does that seem like a way of life I'd like to do? Maybe, maybe not, but like, I want, I find it interesting because he says different things 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. He's like, but there's another strategy I do where I buy these like 30 to 40% minority stakes and businesses that I can help in these two specific ways. And they're, they're going to keep running it. So they get a little liquidity, they get to retain control. And I'm going to help them break through the plateau to get to the next level. He's like, I love doing that. I look for those deals. And so

• 53:36Shaan Puri?

  when I invested in Shepherd, it was exactly, it was I exactly that mindset. I was like, what's a great business that I already believe in and I'm a customer, a customer of, that I can buy a minority stake, let them keep running it. But then help them get to the next level by doing these two things. And

• 53:53Sam Parr?

  Has your contribution to that already, do you think that that your contribution has paid dividends in their business yet?

• 53:58Shaan Puri?

  Yeah, of course. Yeah, we're 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'm already, I've already paid back, I don't know, 33% of my money or something like that on, on that investment. So like, you know,

• 54:13Sam Parr?

  Wow.

• 54:13Shaan Puri?

  That thing's gonna, you know, in terms of, oh, could I put my money in the stock market, try to get 8%? Or this thing's clearly, this thing's gonna do 200% 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 work in a place where I felt like I had a little more control and, and could see a path to a much greater return. With, with more risk, of course.

• 54:44Sam Parr?

  This episode is like the personal finance episode. I'm very curious to see if you listeners actually enjoy this stuff. Next time, we got to get back to like the business building stuff because I think that that is interesting to more people. And it's also interesting to me and you, but I'm very curious to see if this is useful for people.