0:06
Um Can I Let me ask you a quick question before we wrap up.
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0:09
Getting wealthy, like we're talking nine figures liquid net worth wealth.
0:15
Getting wealthy, is it is it really hard to do it just from cash flow or do you think you have to sell sell something?
0:22
Sell a business, sell real estate, sell something.
0:24
Capital gains versus income.
0:26
You're saying liquid, so not paper.
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Not not not your paper net worth.
0:30
Liquid which includes thing things that could be traded in 30 days. Um very hard.
0:35
Very hard to do just off cash flow, I believe.
0:39
Um I think you know It's just much slower, right?
0:43
Because you can I mean just look at the basics, right?
0:46
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?
0:52
And so so just by definition, right?
0:56
10 or 20 years worth Sometimes it's 5x, sometimes it's 10x, sometimes it's 20x, sometimes it's 3x, whatever.
1:01
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.
1:07
So let's say to get to a 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 the asset.
1:20
Um and get it and taking the 5x multiple, right?
1:22
So so you know, of course you can get there, but do I know ways you can get there with the same speed? think so.
1:28
Cuz even those are like I take the cash flow, I invest it in a thing and then that thing grows faster and like I can sell my stake in that.
1:38
So you know Because it's like you you have a choice.
1:41
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.
1:53
So there's a a few businesses like this Or it could just be like um like the way the this podcast gets paid.
1:59
Like it's not like I particularly maybe, but maybe the podcast is not a good example.
2:05
But it's not You know what I mean?
2:05
Not necessarily an asset. Like your Maven course.
2:07
Your Maven course is not an asset that could be sold.
2:09
But it could potentially make many millions of dollars a year versus you just say, "You know what? Screw it.
2:15
I'm not doing that because I have to build a business that could sell."
2:18
So do you prefer, do you think, cash flow or or or an entity an asset that is independent of you and can be sold? Um I don't know.
2:31
I don't think do I prefer is really the right way to think about it.
2:35
It's like you need both, right?
2:36
Like uh for example, um I You need both for two reasons.
2:40
One is maybe you're going to use the cash flow to invest, right?
2:43
Maybe what you're going to do is you're going to buy great assets and let them compound over time.
2:47
Well, where are you going to get the cash flow to begin with, right?
2:48
When we had Andrew on that last week, he's like, "I I took the cash flow from the design agency of Metalab and I used it to buy majority stakes in all these other businesses and then to let those compound over 10 years and like boom, you know, so he reached, you know, that goal and more doing that.
3:07
And so you, you know, maybe you need the cash flow to make those investments, right?
3:10
Like if you If you don't have no cash flow, how are you going to invest in anything?
3:12
And secondly, um I like to live a good lifestyle.
3:15
So sometimes cash flow businesses are great because it's like, "Yeah, I Sure, compounding is awesome, but so is, you know, like [ __ ] I don't know, Gucci shoes or whatever.
3:24
I choose your Choose your thing you're into.
3:27
Like yeah, Gucci shoes, like sometimes those are better than like this 20-year buy and hold asset."
3:34
Whenever I hear Buffett talk about the long term and like patience, I'm like, "Bitch, you're like 95.
3:37
Like there is no long term.
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There is Don't have pa- You You shouldn't have patience anymore.
3:43
You should have like You should immediately spend whatever you want to spend.
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There is no such thing as a long term view for you." Sam Parr.
3:52
I'd see like the whole headline, Sam Parr colon to Warren Buffett, "Bitch, you're 95. There is no long term."
4:01
Well, what did I think about that? pivot his strategy.
4:05
Well, I'm just like, you know, like if you want to do extreme [ __ ] you have to be fine, but like and Bezos talks about those too. He's like, "Long term."
4:10
I'm like, I mean, you don't really Who cares?
4:13
Like, you know, just live life how you want to live. You got it.
4:15
Yeah, and so I've always It's like, why are you delaying and always It always pissed me off.
4:20
I'm like, why are you delaying to have the best time of your 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.
4:30
And you know, some people are happy along the way.
4:34
That's that's fine, but like uh but 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 to that part cuz I think you have a good opinion or story on this.
4:45
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 6 to I think in a matter of 6 months I could probably create a business from scratch that does a million dollars a year in profit.
4:59
It would be based off of like my image.
5:01
I'm not saying I have that.
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I'm just saying like I'm sure I could do that.
5:04
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.
5:13
And maybe I do already have that.
5:15
I'm not I don't even want to say I do or do not, but I But like If you didn't, that would have been a weird way to say it.
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Would have been a weird hypothetical, but okay, let's continue on.
5:27
I've got some cool [ __ ] going on, I'll say.
5:29
But and I'm thinking about where do I spend my time, and I'm like, is it actually worth it?
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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.
5:38
I'm just trying to figure out like, where do you actually spend time?
5:41
The real answer is what gives you most joy. Yeah, exactly.
5:44
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.
5:52
You kind of just need to make sure you're winning in one way or the other.
5:56
Don't be weak in either area or like don't be weak in both basically is like the way to do it.
6:03
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 could charge somebody is not going to out pay the mortgage plus the taxes and insurance. cap cap rate.
6:18
can go buy you know some home in whatever you know Houston or something like that it can cash flow $1,000 $2,000 a month and it's good income property but it's you know going to appreciate super [ __ ] slow whereas the the San Francisco home you know in 10 years is going to have you know whatever more than doubled in in value.
6:38
And so you know it's a there's appreciation properties and income properties 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.
6:51
Either it's got to be awesome for cash flow or it's got to be awesome for for appreciation.
6:54
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.
7:04
It's kind you kind of end up at the same point either way. Yeah.
7:08
I don't know I've just been thinking about like how to spend time.
7:09
You know who's killing it and he's done a really good job of like like putting off making cash is our friend Nick Huber.
7:18
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 6 7 years and pick the right asset things look really cool. Yeah.
7:37
Yeah I think he's done great and also I think he has like a I think he personally has great terms for with his investors, meaning like I think it's quite favorable to him. Yeah. Incredibly.
7:48
bad way, but like he makes sure he gets to eat. Right?
7:51
Whereas at the beginning, if you have no capital, you're 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."
8:00
And I think now he's like, "Look, I'm good and I know it.
8:01
So, I'm going to take a higher fee, higher higher acquisition fee, and I'm going to take, you know, my my healthy carry."
8:06
Um So, you know, I think you know, good on him.
8:11
I think a lot of people in real estate are able to do that pretty well.
8:13
Uh I know somebody who's crushing it in real estate, and they they do just that.
8:16
They they have like a, you know, 50% carry on the deal or something something crazy, and they're like, "Yeah, because I make hits. and I win.
8:25
So, like it it doesn't make sense for me to do this at any less than that."
8:30
There's this uh that that's like next level winning." All right.
8:35
And then, I forgot to tell you this, but this is the most important thing.
8:38
Uh I can't believe we didn't talk about this earlier, to be honest with you.
8:41
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 you get your podcast, then that's the thing you got to do.
8:50
There's nothing more important than doing that right now.
8:52
And don't do it cuz I said to do it.
8:55
Do it because you want to do it.
8:55
Do it because that's who you are.
8:59
There's this awesome You know who Foo Fighters are?
9:01
You know, Dave Grohl Dave Grohl's the lead singer of Foo Fighters.
9:04
Yeah, and they've been writing hits forever.
9:06
And before that, he was the drummer in Nirvana.
9:07
So, he's like just wrote hit after hit for a long time.
9:09
And someone asked him about uh He's like, um you know, you write hits, and and what's your process, and like uh a a fan was asking about old music, and he But and he stopped He goes, "Wait a minute.
9:21
Let me cut you off here."
9:22
He goes, "I don't write deep cuts. I write hits."
9:27
And he would just like He's like, "Everything I write, I write it to be a hit.
9:31
Sometimes it is, sometimes it isn't, but it is it's all meant to be.
9:35
And that's like your real estate friends."
9:36
He's like, "I write hits."
9:38
That's why he gets that 50% carry. Exactly. Exactly. And respect.
9:41
I I respect somebody who's like, "I'm playing the game.
9:47
And I play to win the game, you know?
9:50
I'm not playing something else.
9:52
I'm not going to tell you I'm not playing the game.
9:53
I am playing the game and I'm playing to win."
9:55
And that's actually like I really respect people who just clearly play the game and they're like open about it.
10:01
They're like, "Yeah, I play the game and I'm playing to win and here's, you know, like good.
10:02
If you do If you dislike the game or dislike me, that is your your choice.
10:07
And I actually dislike people that are the like 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.
10:18
Like in Silicon Valley, there's a lot of that.
10:22
Here's how that plays out that I see.
10:23
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.
10:32
It's like, "No, [ __ ] You're 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?
10:44
Like that wasn't your actual intention.
10:46
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.
10:52
If I take away the money, you'd stop.
10:56
cloud Have you ever seen on Silicon Valley they go, "We're saving the world one cloud processor at a time."
10:59
Or some [ __ ] It's like Yeah, so And then they're like they're like at the they're like someone calls them out.
11:09
They're like, "Dude, this is all rich guy.
11:10
Like Kid Rock just was the the singer for the for the for the show and he's the poorest guy here." Yeah, exactly.
11:18
And so so I think in Silicon Valley you see that a lot.
11:22
You'll also see that with the origin story about like, you know, why they decided to do this.
11:25
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?
11:37
Cuz I'm pretty sure when I was talking to you it was this was the highest click-through rate.
11:41
All right, cool, that's my company, right?
11:41
Like there's a lot of that.
11:43
Um So, the guy 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 cuz I was just sick of going to Walgreens and I had to ask them to like open up the razors."
11:56
And then the another interview he was like he's like, "Man, my father-in-law is like crazy and he likes to just 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. it. Exactly.
12:11
And you know, I'm in the 2% of the population, I think you are too, where we're like, "Oh, sweet.
12:15
Respect for trying to flip the storage container and then realizing there's a business there."
12:19
Versus like, you know, I you know, the the the kind of like the Shark Tank version of the story, which was like, "We were just so fed up with our options, right?"
12:28
And like I get again I get it. I've done that. I might do that again.
12:35
But am I a little bit disgusted by it? Yes.
12:37
Uh same thing with same thing with I'll do that usually when I have business partners, not when it's my own business.
12:42
Um like when 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.
12:47
Be like, "Yeah, I don't care if this is bad for the business. It's fine."
12:50
The the other day I ate a I ate an entire jar in one sitting of peanut butter from it was the Jif cheap [ __ ] and I just felt so bad about myself, but I didn't regret it and that's kind of like how you feel.
13:00
But I wanted to do hoodrat stuff for my friend.
13:03
Mission statements are like a a pint of Ben & Jerry's.
13:04
Like it it it if it feels good doing it and you may not regret it, but but you feel guilty about yourself.
13:13
The the other version of this is like people who on Twitter are like um they call themselves like [ __ ] posters or they're like, you know, they basically Yeah.
13:21
they basically try to signal like, you know, "I'm not going to just I'm not one of those investors who blogs about content and tries to but but I'll tell you the real deal and I'll I'll make jokes and blah blah blah.
13:32
It's like They're the ones trying to carefully curate their brand more than anyone.
13:36
If you actually meet these people, they're like so conscious about their brand and like you know how how how many followers they're getting and like how viral their stuff is going and like They are you know like They're They are so meticulous about that stuff while trying to give off the appearance It's like bed head, right?
13:55
It's like oh no, I just woke up like this.
13:57
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 caring where every strand of hair goes.
14:05
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.
14:16
So I just tweet Bitcoin [ __ ] all the time. It's great.
14:18
Like I like Bitcoin and they like Bitcoin.
14:19
So I'll just tweet like I'll just set up a calendar.
14:21
I'll be like yeah, I'm going to tweet Bitcoin stuff because I figured if I get a big Bitcoin following, that'll be really really good for me.
14:26
Or like you know, Sahil's like yeah, I put it I put out these threads about these like finance topics cuz I think I'm good at it and they go viral and then it gives me all these dope connections.
14:36
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 I think it's important to democratize Yeah, I want to democratize financial knowledge.
14:47
Like I used to work on Wall Street and the insiders know things that they the rest of us don't.
14:51
So I quit my job and started writing Twitter threads about finance to democratize finance. It's like no.
14:57
No, no, no, no, you you didn't do any of that.
14:59
You wanted followers and so you did what it took to get followers.
15:04
Have you noticed how the word democratize is the new disrupt?
15:09
Democratize is like you know, what is democratized? Uh It's the new disrupt.
15:14
Democratize is the new like Um no offense, but That's a democratize.
15:21
Democratize is like I'm about to fool you.
15:22
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.
15:31
And by the way, I I do all the I do the this myself. Like I again, I know it. I spot it cuz I got it.
15:35
I I've done all this before.
15:37
With my e-commerce brand, I've done the origin story thing.
15:38
With my fund, I do this, too.
15:41
Like my fund is called the All Access Fund cuz I wanted to give access to every to access to all to be able to invest in the deals I do.
15:49
Do I feel good that other people get access to good Silicon Valley deals? Yeah, sure.
15:52
Is that why I did the fund? [ __ ] no.
15:54
That's not why I did the fund, right?
15:56
I did the fund 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.
16:04
So, I raised money from other people to do that and I get, you know, like and so now I get to write more checks into more awesome companies.
16:10
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 Tennessee.
16:21
I can't stand democratize.
16:21
We're going to democratize this by only charging you $50,000 for this piece of clothing instead of Then like I I've seen people like we're going to democratize knowledge and it's like a $5,000 course.
16:32
I'm like, uh Not really, dude.
16:38
Cuz you know, you could democratize these nuts. What do you think, Ben?
16:45
Was today uh were we with it or what?
16:50
I thought today was a hit.
16:50
I thought today was a huge hit.
16:51
This is uh Yeah, other than like the Steph Smith episodes or Rob Dyrdek, this is uh this is A+ territory. Oh, great.
16:59
Are we going to have to cut out my uh democratize these nuts? No, no, no. Don't do it to us. Yeah.
17:09
And then what So, we have to plan the MFM summit.
17:11
So, uh I agree that making it a destination is cool.
17:14
I have a thing that I I you're going to have to bleep bleep out what I'm about to say, but only the the thing. I know the thing. Yeah.
17:22
Yeah, I got the guy I got a really like famous house that person might be interested in hosting us.
17:26
I don't know if that's just going to be a dinner, right?
17:27
Like that's going to be like no, no, no.
17:31
We might be able to do a proper thing there, but I don't know if the logistics are going to work out.
17:33
So I think but but I think that we could do like something outrageous.
17:37
You know, I we have to think about what outrageous means, but I do think we could have something outrageous.
17:42
I think a cruise ship I like that that's that's not a bad idea.
17:46
A cruise ship or like some type of famous venue or [ __ ] we could just go to Hawaii.
17:51
Do like in the beach in Hawaii.
17:51
We can figure something out.
17:55
But we do need to do like a summit. out.
17:56
Like if people are going to 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.
18:04
So do make it like a two-day thing and then and then secondly um just make it already fun if it was just a va- vacation if there was no content on top.
18:15
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 was a good like kind of vacation type experience then that's cool, right?
18:26
And like I don't know, let's do like bring a fitness component, bring a like let 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.
18:37
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.
18:44
I don't know, like something like that. Down.
18:47
All right, let's schedule it.
18:47
I I do you like that $500 price mark? price point?
18:54
This I mean, we should do this as an NFT, no doubt.
18:55
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.
19:08
All right, that's the episode. Mhm.