Get RICH With These 24 Investing Rules

24 rules of investing. These are all structured as if then statements. If we learn a principle, then we can continue to use that winning principle over and over again. The reason some of the greatest investors publish books about their principles is because they know if people make the right decisions, they get the right outcomes over a long enough time horizon. My name's Auction Wozi and I make these videos because I hope that if you have a 3 million to $100 million company, you'll ask us to invest in it and we can help you grow. If you can't buy it twice, don't buy it once. And realistically, probably three, four, five, six times. When I got into investing, I used to think, oh, I'm going to put like a third into this. They're, dude, no. Your biggest allocation might be 10%. Oh, if you can't buy twice, don't buy once. If you're worried about it, you can buy insurance for it. You can get insurance on anything. For example, people are like, I'm afraid of running out of money. You can literally buy money for the rest of your life. You literally give money and they will have a guaranteed income until you die. Those are called annuities. So if you have a specific concern, just buy insurance for it and know that it's covered. If a deal feels like a grand slam, get a second opinion. Whenever I'm looking at something and something looks amazing, I automatically send it to other people. I must not be seeing something like, I need someone else's eyes on this. It's a good, easy decision making rule for yourself for investing. If you don't know how you can lose money, don't do it until you do. There's always a way to lose money in the deal. And you not only want to find a way to lose money, but you want to find all the ways you can lose money in the deal, right? We're always controlling for the unknown or the unknowable. We want to minimize that to the highest degree possible. So if you don't know how you can lose money, don't do the deal until you do. If it feels rushed, don't do it. A lot of people will try and apply pressure to you. They're trying to say, like, hey, do this deal with me. Hey, give me this money. Hey, can you lend me this thing? If someone tries to pressure you, pause. If you feel rushed, don't do it. If you only have one deal on the table, don't do the deal. Always have backup deals. Imagine you're dating and there's only one girl on the planet, you're gonna find a way to think that that girl. And if you know your gender's reverse flip, right, whatever, you know what I'm saying? There's only one person on the planet, then you're going to find a way to make that work. And so it's kind of the same thing with deals. If you only have one deal on the table, you're going to keep telling yourself, man, maybe this is a good deal because you have nothing else to compare it to. You always want to have a plethora of options to choose from. And until you get those many options to choose from, don't move forward. Because what happens is you artificially make that girl look a lot better or that person or that deal looks a lot better when there's nothing else to compare it to. If you buy with the intention of selling, you're not investing, you're trading. Investing is about very, very long time horizons. It's a whole different set of rules. Where you get in trouble is where you're trying to apply business stuff to investing or investing stuff to business. Like they are different skills to master. If we don't agree, we don't do it. This comes into play when you have a partnership. This has saved me so many mistakes. I'm usually the yes man. I tend to see more upside and less downside. Most entrepreneurial people are that way because we have to be. Because if we actually focused on the likelihood of success, which is usually low for most entrepreneurial things, you would never get started. It's good A, to have a partner who balances that, but B, they actually have to balance it. If they're just a yes man and they always bend to your will, then they're not actually providing value. There's a reason yin and yang are equally weighted in the symbol. If you don't agree, don't move forward. Even if I have decision making authority, I still won't move forward until we agree. As a tangent into marriage stuff, we get asked this all the time. They're like, well, you know, if push comes to shove, somebody has the upper hand. Honestly, no. We keep talking about until we agree. We don't make the decision until we both agree. And it's been one of the earliest pieces of advice we've gotten and it's been one of the ones that paid us the most dividends. If it's complicated, pass. If it feels above your head, it probably is. People want to feel fancy, they want to get into the room, they want to do these deals, but if you don't get it, you're going to get fucked. If you have complete understanding of something, the risk goes down because you understand the variables. You're barely catching on. You might as well be gambling, which is not the way to invest. FOMO means slow down. So if you feel that emotion, like I'm going to miss out on something, slow down. This is a decision making variable. When you feel that emotion, slow down. These are principles. You start flexing these like muscles. If this, then that. If this, then that. It preserves your ability to make better decisions over time. And if you apply all of these things to all the decisions you make, you will have outsized returns over a longer time horizon. No diligence, no deal. If you don't get the information you need to make the decision, you don't make the decision. And I know this sounds ridiculous, but many of you do this. You just go off the hype. You go off an email or phone call, get the information you need. No model, no deal. If someone doesn't send me their proposal for how something's going to grow or how something's going to improve, or how they're going to add value, then there's no deal. I don't want to hear a story of it, I want to see the math behind it. I want to see the projections. And then when I look at those things, I can make the decision like, is this reasonable? What assumptions is this based on? Do I think those assumptions are reasonable or probable? And what information can I bring to this decision? What are the things I need to believe that have to be true for this to occur? If someone's non responsive, no deal. Communication is one of the most important things when you're doing any kind of business in general. And I judge someone very quickly on how meticulous they are in their responses and how quick they are to respond in general. Now if someone says, hey, I received your email, I'll get back to you in two days, and then they get back to me in two days, that's fine. It's about expectation setting and expectation meeting, I expect, especially in this process where I'm just getting to know you, what you say is going to happen, it's going to happen. It's one of the easiest ways to build a reputation is do what you're gonna say, say what you're gonna do. And if someone's not doing that with you, don't do the deal. If it costs peace of mind, don't buy it. So if anything costs me my Sleep or something that I'm worried about as a result of me making an investment or a purchasing decision. I don't buy it because the cost is too high. If it doesn't build your reputation, don't do it. No neutral moves your brand personally. Your reputation is the one thing that you take with you forever and you absolutely can lose it and it can be irreparably damaged. I'd only do it if it builds my reputation. When we do that, we continue to reinvest in our reputation, in our personal brand, which gives us compounding returns over our entire lifespan in terms of relationships, in terms of literally financial return and all other aspects of life. Only invest if it builds your reputation. If it doesn't build, don't do it. No track record, no deal. Performance over charisma. The best predictor of future performance is past performance. Sure, they have a model. Fantastic. Oh, they're allowing us to do diligence. Great. Oh, they're being very responsive. Phenomenal. If they have no track record, might they be successful? Yes. But if I invest in every deal that doesn't have track record, is that a good way to invest? Probably not. Like Napoleon liked to say, I'd rather have lucky generals. Someone's going to probably do their deal. Doesn't have to be you. If it's the same thing you've always done well with, do more of it. We as humans or entrepreneurs, we like having variety. The thing is that a lot of investing, a lot of compounding comes from doing more of the same thing. So it's like, hey man, I've done three hard money loans and they've all been awesome. It's like, well then you should probably consider doing a fourth rather than starting to get into crypto day trading. What happens is you start to build your own track record. And so you can start looking back over your shoulder. Be like, okay, let's look at all the things that I've done. These have been the things that have worked well. Maybe I'm better at this stuff. And so that's the idea. Once you find something that you start to get good at, do more of it. Because the thing is that you're looking luck will improve the more you do. Always under borrow any number, no matter how big it is multiplied by zero is still zero. I tend to be very risk averse when it comes to debt. Debt introduces risk into any equation. If you are going to borrow, then under borrow. So even though you could juice your return by getting more, remember that there is a likelihood over a long Enough time horizon that if you over juice on a consistent basis, you will get zero. Always under borrow. Then you won't make as much money, but you won't lose it. Ask stupid questions, define terms, draw pictures, see examples, and if you can't draw it back, you don't get it. I start every single call. When somebody's gonna bring me something, I'll be like, pretend I'm a golden retriever that doesn't speak English. Walk me through this. There's no advantage to somebody thinking you know more than you do. None. But there is advantages to you knowing more than they think you do. Always play the fool. If we're not in the GP, we're not in the deal. Once you have 10, 20, you know, 30 million in investable assets, just say, I want a part of the gp. I don't know what the GP is. It's general partner, limited partner. The people with general partners are basically the people who run the thing so they get an extra slice of the pie versus the limited partners who actually invest the money. We only do deals where we're part of the GP because I want to make sure that we have a part of the people who are really running this thing. If it's a bad person, it's a bad deal. Layla has an impeccable people picker. It's unbelievable. My entire relationship has never been wrong. And it's why I've been wrong all the time. I'm like, this guy's great. Layla's never been wrong. Bad partners. Doesn't matter what the paper says. Don't do it. There are so many reasons you should not do a deal. You should be saying no way more than you should be saying, yes. No contract, no deal. This is a really important one for me. Got to have contracts for everything. Contracts serve the purpose of setting clear expectations. What happens if you lose all my shit? What happens if you don't do what you said you. What happens if I don't do what I said I was going to do? What happens? You got to walk through that. If you can't walk through in the beginning, you're definitely not going to walk through it when it actually happens. And anyone who says, I only do handshake deals, I don't do contracts run the other way. Not once has someone approached me that way and they not being unbelievably shady. If there's anything you get from this video, if someone says, I don't believe in contracts, be like, I don't believe in dealing deals without contracts. Sorry, clear expectations. Good if you're the one people are doing business with. I like to pretend like the contract doesn't exist. You absolutely want to be clear when you're writing the contracts and the terms. But then as soon as that process is over, live as though the contract doesn't exist. Negotiate it as though it's the only thing that matters. Let's say I have a services relationship that's a year long. I want to mentally think, even though they've committed to a year, I'm only week to week, they don't have to pay me next month. If you go on the defensive when you're contracting, but you go on the offensive when you're in delivery, you kind of get the best of both worlds.