The CRAZY Life of a Fund Manager...

Boom, people, welcome back to the show. Today we're gonna do a little Q&A, okay? So I got a bunch of questions lined up from people that have asked me a lot of common questions and I wanna go through them today. Okay, the questions I'm gonna talk about are number 1, what does the average fund manager day look like and where do you spend your time doing the most? Number 2, what do you love most about being a fund manager? Number 3, what do you dislike most about being a fund manager? Number 4, what personality temperament is best suited for the role? And number 5, what are some downsides or risks that I need to consider before starting and launching my own fund? This should be a good episode, so let's dive in. So number 1, what does the average fund manager day look like? Now this depends a lot on the type of fund you're running. This would be vastly different from a private equity fund versus a real estate fund versus a hedge fund. And it'll vary depending on what you do inside of that fund. If you're the expert investor person, if you're the fund manager, or you're the money raiser. If you're the money raiser person at the beginning of your fund's life cycle, you're going to be pretty busy, right? You got to raise a lot of money. You're talking to investors. You're helping people out. But once the money's raised and deployed, I mean, you're not doing a lot, right? You're helping manage investors' capital, you answer a phone call here, you make sure they get their tax returns, whatever it is, and maybe you're jumping in and helping other parts of the business. Once the money's raised though, it'll shift over to the expert investor. They've got to deploy the capital, they've got to go buy the stocks, they've got to go buy the real estate or buy those businesses, whatever they're going to do. And if you're the fund manager, you're going to be managing investor capital, capital calls, distributions, legal, compliance, and there's usually, it's pretty busy for all times of the year what's going on in that fund manager circle. But for me personally, I can speak to my own experience, the day in the life of a fund manager, a lot of my stuff is putting out fires. I love Gary Vee, he'll talk about, he's like, I'm a fireman. I think that's true with all businesses, right? The system runs and then something breaks or a deal goes bad or whatever it is and you've gotta jump in and figure it out. And I feel like a lot of my day is doing that. Now, when everything's running great, typically I've built enough systems, you guys have heard me talk about previously, with CEOs are really good at building systems. I've been thinking about that for the last couple years and I've been building systems that hopefully will run when I'm not there. So if the system's running, I actually don't do a lot and it's actually really nice. Being a fund manager is awesome because once you buy the asset, once it's working, yes, you need to follow up, you gotta check on it, but it's running, it's doing it, right? But that'll vary depending on, you know, if you're an active trader, if you're buy and hold, long-term strategy, whatever it is, it'll change. what your day looks like. So, probably not the best answer there, sorry about that, but I'll give you a few things that kind of happens in the fund manager's life and what you're doing, which goes into our second question. Number 2, what do you love most about being a fund manager? For me, there's a few things. Number 1 is I love, love getting my investors a high return. Nothing makes me more excited than when I write checks for investors and I send it to them and I say, hey, we got this awesome month or quarter or year, here's your check. And to know some high net worth individual gets that check, they know that came from me and my investments and my working. So number 1, seriously, that's my favorite thing, is giving my investors huge checks. Number 2 for me is we do loans, and a lot of our loans get invested into small businesses. I love helping out small businesses grow and seeing what our loans and lending can do for them. It's cool to actively be involved with small business growth. And number 3, and finally, I think it's just— it's cool to manage a lot of money. You open up your bank account and you got a lot of money in there and you are the person that has been deemed responsible to manage that money. I don't know, that's just as cool to sleep at night a little bit, be like, wow, I manage that much money. It's a responsibility, we'll talk about that in a minute, but I think that's a pretty cool part of the job. And to know that investors invested in you to take care of their investment, to take care of their hard-earned dollars inside of your fund. I think that's pretty cool. Number 3, what do you dislike most about being a fund manager? I would say there's a few things. Number 1 would be compliance and government regulations. Like most businesses, the government loves to come in and mess things up. It's especially true with funds. I would argue that's probably the hardest part to understand. That's kind of why we made this podcast and show, is to help people not worry about that as much, to help you overcome a lot of these laws and changes and stuff that goes on. And then I'd also say, like most businesses, putting out fires, right? Things blow up and things don't work right and something breaks and you've got to figure it out. The only scary part is you're managing a lot of other people's money. Your risks become higher because it's, it's compounded over a lot of investments. Now that's kind of a good thing and a bad thing. I kind of like that though. I like that responsibility. I like that stress. But I would say the 2 things is regulation, governments coming in and trying to mess things up or change laws, whatever they do. And then number 2, putting out fires. All right, number 4. It's a really good question actually. What personality or temperament is required or necessary for the role of a fund manager? The first thing I'll say is you need a deep sense of integrity. You should not even consider getting into this business if you have a hard time being honest with other people's money and in all aspects of your life. If you can't be honest to your spouse or to your kids, whoever it is, you have no business managing other people's money because there are so many opportunities for you to steal money somehow from the fund and embezzle money or commit fraud or lie to your investors. And sometimes it's tempting. If you have a bad month, it's tempting to lie to your investors, say, hey, it's actually not as bad as, you know, what it is. I'm gonna make it up over the next 6 months. That is how most fraud starts, is some fund manager had a really poor month, they don't wanna report that to their investors, so they say, hey, hey, you know, things are going okay, I'm gonna make it up though over the next 7 or 8 months, we'll do some more risky investments, and what happens is they lose even more and more and more money, and they keep lying to investors, and either they'll do a couple things, either they'll come clean, say, hey, sorry, I was lying, this is what actually it is, Or they'll raise more money from other investors, put it in, and then they start a Ponzi scheme where they're paying out their first investors with new investors' money. Now, I just gotta say this, you're gonna get caught no matter, you might run it for a year or 2 years, even 5 years. Bernie Madoff ran a Ponzi scheme for 30 years, which is the most wild thing to me. I can't, I still, like, I have another podcast on him. It's crazy, 30 years running a Ponzi scheme. You're gonna get caught though eventually. So when starting on this game, it's not worth it. It's not worth going to prison. It's not worth all the judgments and whatever's gonna happen to you. if you do not have a deep sense of integrity and honesty, where behind closed doors, you're still going to be honest with every single person's money inside of your fund. Now, obviously, there's a lot of checks and balances and stuff that happens so that you can't commit fraud. But at the root of things, if you're not deeply honest and deeply have integrity, you just should not get in this game. I'm sorry, you just shouldn't be in this game. So that'd be the first thing I would say for your temperament or your personality. You need to have a deep sense of honesty. Now, number 2, I'll say a lot of funds are managed differently. You had Tiger, a huge hedge fund on Wall Street. They— their management style was very alpha male. They brought in these alpha male type people. They'd go skydiving, rock climbing, all this kind of stuff, and that was their management style. It was very cutthroat, very to the point, very matter of fact. Other funds that are investing into different spaces, maybe they're investing into diversity or other emerging markets, might have a totally different management style. So you could have a very strong personality, very passive personality. It doesn't— I don't think it really matters. I've seen a lot of investors and fund managers come from all different walks of life and different personalities. All the way from the Wolf of Wall Street down to the nice puppy dog, you know, nice investor. I've seen all of them in between and it works depending on what they're investing in. But I'll go back to being— the first thing I'll say is a deep sense of honesty and integrity is one of the most crucial things you need. Okay, and then finally, any downsides or risks to consider before starting a fund? It's actually a very fair question. I would say this too, starting a fund is not an easy business to start, okay? If you have never started a business in your life, And your fund is your first business, just buckle up and be ready to get into that. Okay, it's not like setting up a little dropshipping store. It's not like setting up a little restaurant. I feel like setting up a fund is like an extra level of entrepreneurship. You're setting up a business and then also raising money from investors for that business to invest it in other places. I've started a lot of businesses in my life. Before I started my fund, I started 6 businesses, and my fund was definitely the most complex, most technical. So listening to this podcast, watching our stuff is a great way to prepare for that. Now, potential risks and reward. Reward is huge inside of the fund space because you can scale to the moon. You're managing capital and you can scale all the way up to the deca-billion, $100 billion range. There's huge, massive funds that give huge returns to their fund managers. Now, the other side of the coin of that is the risks of managing and controlling other people's money. Anytime you take someone else's money, there's an extra layer of risk that happens, that you are now on the hook Because you have their capital, you have their investment. And you have a fiduciary responsibility to that investor. So I would just say, make sure to understand that before you get in this game, is that once you grab investors' capital, once you start doing it, you can't just wake up one day and just say, nah, you know what? I'm not gonna run my dropshipping store anymore. I'm just gonna stop, I'm gonna do something else. I mean, you're in, you've got hundreds of thousands, maybe even millions of dollars of investors' capital, and they're counting on you to wake up every morning and work. So there's an extra level of, I would say, risk factor there where you're managing other people's capital. but also you get a huge potential reward by doing so. Alright, so hopefully that answers the 5 questions. Those were actually really good questions that I think might help you along your journey about getting into this fund space, running a fund, starting all this. If you guys like this video, hit subscribe or like or comment. If you guys can leave us a review, that would be awesome. If you haven't checked out our free Facebook group as well, I go live in there once a week, pretty awesome, and we have other webinars and stuff. We got a whole system of things. If you guys wanna learn more, there's plenty to learn. Just send us a message or DM or whatever and we can send all of it to you. You guys are awesome and I'll see you next episode, bye.