Entrepreneur Mindset: Are You Chasing Money When You Invest? (Advice & Tips) | My First Million

You know, I think I've changed my mind. I think that investing is fucking stupid. We had a friend is raising a fund right now. You know, I think I've changed my mind. I think that investing is Fucking stupid.

I would have bet $1,000 you were going to say stupid. I would have been wrong because he said fucking stupid. But like, why is investing stupid? I would love to hear why investing is stupid.

Tell me if I'm being like just a baby here and like, but it's just like, I just find this like financial arbitrage shit to be so boring and like meaningless.

Okay.

And I watched the TV show Billions and I'm like, oh, that's cool. Like they're doing all these big things. It looks exciting. And then I'm like, well, those guys are losers. Like they're not actually adding to, I mean, they're just, they're wealthy and they're accomplishing dreams. So I respect it, but I also, I'm like, oh my God, that's so soulless. And that's what I think, like a lot of, like I've got friends that create these websites that like, they're already wealthy. And they're building these websites that are like, they're just hawking shit. And they will admit that they are. I'm like, what the fuck's the point of this? And that's kind of what a lot of investing is.

Okay. But the friends hawking shit, that's different than investing, right? That's just like selling out to some degree for money, right?

It's definitely from a similar— Yeah. It's just like, why? Like if you already have a little bit of cash, which If you're still trying to get your hit, uh, you know, go, go, you got to go for it. But if you already got a little bit of cash, um, like do something cool and meaningful.

Okay, so here's, here's— I'll give you two, um, two thoughts on this. I'll give you the first as an example that supports your case, and then I'll give you the feel-good reason why you're wrong. So to support your case, so I, I mentor this guy who's 20 years old, and, um, he's at this point where like he tried to do some stuff and it kind of didn't work out. And now he's like, fuck, do I need to go get a job? I need to pay my bills. I don't want to go move back home with my parents. And so he's like, he's like about to take this job and he's like, should I, you know, leave this entrepreneurial path and go get a job? Because I, you know, I need to pay bills in 2 months and I don't think I can spin something up in the next 60 days that will get so profitable that I'll be, I know I'll be able to pay my rent. And I said, you know, I empathize with the problem. But I said, you know, let's just Slow down for a sec. Before you go take that consulting job, let's just talk things through for a second. So I said, how much money do you need to live every month? What's your burn rate? He said, 2 grand. I said, okay, 2 grand, fantastic. And I was like, so let's say you wanted a year of runway to go try some shit. You need to come up with 12 months times 2 grand, you need to come up with 24 grand. I said, I know you do some investing in the stock market. You're kind of a degenerate, you know, you like to pick stocks, you try to buy Bitcoin and shit. I was like, because at the beginning of the conversation, he's like, you know, my good, the thing that's going well is my investments have done well. The things going bad is I'm about to have to take this job for my bills. I was like, well, those two things don't add up. I was like, do you have enough money in the stock market right now that you could just sell and you could use to live off of to chase your entrepreneurial dreams? He's like, yeah, I could, but then I'd have to sell and I don't want to sell because I'm getting, you know, good returns. I said, okay, let's do the math real quick. What do you think you could generate per— let's take just the $24,000 that you need. I don't know how much money you have, you don't have to tell me. Let's take the $24,000 that you need. How much do you think you could generate per year in return average? He's like, 50%. I was like, okay, mini Warren Buffett, you think you could do 50% a year? But let's, let's assume your delusional number is correct and, uh, that you could do it consistently, which is the hard part. You could do it for one year for sure, but consistently generate 50%. So let's say you, you do the Warren Buffett, you, you invest perfectly, you get your 50% way above market return, and, um, your $24,000 has turned into $36,000 now. Um, like, fantastic, congratulations, you made $12,000. Uh, like, you are still nowhere near where you're trying to get with your goals. And if you— and how many years would you have to continue to get this absurd return for you to be where your goals are?

I was like, not that many, but That would never happen.

You would never happen, right? You'd never get the 50%. So anyways, I was like, you're talking about this year going and trading all your time for money at a consulting gig when instead you could just sell some of your stock, get $24,000 of runway, and you could live for 12 months and give yourself a bunch of shots on goal to try to build something that you believe in. And you'll learn way more, you'll have way more fun, and you'll have way more upside than if you go take the consulting job. So like, you're crazy. So he was of the mindset of, well, I heard that rich people invest, so I want to invest and I want to get return. I want my money to work for money. He had kind of heard all these things and was investing for that reason. So I think investing doesn't make sense when you have very little amount of capital overall and you're trying to go invest that capital and then you're trading your time for dollars in other ways. Now, the other— so that's the argument for Times when I think investing would be stupid is when, you know, if you take a normal return, the amount of money that you're making every month is not— or every year is not going to change your life, and you're locking up money in this.

Okay, but what's the second point? Because I think the second point's going to be better than the first point. The first point that you made was that, well, only invest if you got a lot.

Yeah, exactly. If you, if you don't have a lot, I'd rather you use that money. If you're entrepreneurial, if you're one of the 5% of people who actually want to build a business or do something on their own, you're better served investing in yourself and investing in buying your time back and going, taking a bunch of shots on goal. Now the second is, is investing stupid? Well, I think you're kind of right that it is not the most exciting thing, but excitement is different for everybody. But here's the cool way of thinking about investing. Like for anything to work, you need leverage, right? So you were on the hustle but day to day you write zero emails, probably. You don't write the Daily Email, you don't do the Trends Report. This podcast is the most active thing you do for the hustle. Is that correct?

It— we can say yes for sake of argument.

Okay, so for the sake of argument, your argument is correct.

I'm leverage.

So you're leveraged because you got a bunch of, uh, humans doing work for you. Cool. Um, another form of leverage is, uh, media. So people are gonna— we're gonna talk for one hour and And then this is going to get listened to for hundreds of thousands of hours out there. So media is another form of leverage. And then the last one is capital. Capital is another form of leverage. And so here's the cool way of thinking about it, which is if you have capital, investing is your way of allocating capital to things that are either A, going to return the most, or B, going to like change the world in a way that you care about. And so capital is your way of influencing the way that the world goes because you get to assign units of energy to different companies and causes that are going to go do shit in the world.

I get that. I think that's a great point. I think that what I'm completely burnt out of is just lame-ass investments.

What's a lame-ass investment? You don't have to use a name if you want to kind of code name something.

Like I've got a friend that gave a lot of money to some, like an investor who's going to buy a bunch of multifamily real estate. And it's simply a, like, I don't ever see this. I don't touch it. Like this is—

Give me 7% a year. Yeah.

Simply an asset class. And it's just a thing on a spreadsheet. And I'm like, oh my God, that's so boring. Like, I just, I can't decide if I'm being a little like rich hater or yeah. But my, or like when I have, we have some friends who are buying companies and they just look for anything that like checks the boxes of does, is net churn this and is the acquisition cost this. And that's it. That's all. I mean like mechanical.

Yeah.

Yeah. And I get it. And I'm like, all right, that's a great way to make money. But it's just like so fucking lame sometimes. I'm like, oh my God, you guys, like, can you like, Can we please do something exciting?

So here's the rub. Okay, let's say you don't invest. You're going to either A, park cash on the side and do nothing with it, probably lamer than investing in it and having the cash grow. Or B, you're going to— what's door number C? So what else would you prefer to do with your capital besides invest or leave it in cash?

Either start companies, and even if that means I don't run them, or That's investing. Yeah. I'm not saying investing. I'm using, I'm using investing because I can't think of a better word. No, investing is cool. I mean, investing is great, but I'm just saying like arbitrage is, is again, starting a company is arbitrage, but I think you understand what I'm saying.

Yeah. I get where you're coming from.

I don't know. I, I've just, I just, it just hit me last week where I'm like, oh my God, this is, I don't want to talk about a carry fee ever again. Or I don't want to like, This is just so fucking lame. When like you see, like, like I think it happened when I was traveling. I'm like, I just see these normal ass people at the gas station and they're with their wives and kids. And like, they, like, I would, I'm way more fascinated about how do I just make that person just a little bit happier or a little bit better? Not like, uh, how do I eke out a little more profit out of this service? Do you know what I'm saying?

I'm like, I get what you're saying.

Like, it's like, I saw these, I remember being at this gas station and I saw this mom give her kid like a generic Coke. And I was like, oh God, that kills me that this little girl's gonna drink this shit. How can we like help this mother like either afford or learn that this thing or that thing is not as like, how can we help her make a better decision? Make a better decision easy. Not how do I get a 5% net return?

I think I actually understand what you're saying now, which is it's not that investing is stupid. It's not that putting money in someplace and getting a return stupid. What you are starting to get annoyed of or tired of is the amount of your mental energy that goes towards thinking about how to reap returns out of cash deployed. So it's actually about where do you devote mental energy and not where does money go. It's kind of like, I get that money, you got to do something with the money, might as well put in a place that's going to grow, might as well fund a company that's going to do something. But it's about mentally spending cycles thinking about how do I get 7% versus 8% versus a tax-efficient 9% versus just mentally spending those same cycles thinking about something else. If I can reading a book, talking to a person, building something cool, writing a song, whatever it's going to be. Is that, is that more accurate?

Yeah. Just like get out of this financial arbitrage circle jerk and actually make a difference and have an exciting, wonderful life.

Yeah.

For myself and others.

I'm with you on that. I'm with you on that. I catch myself doing that all the time where I'm like, how many, how many hours is my brain spending on, you know, in this financial game. And there's some amount that's correct, but it's very easy to slip into more than what you need, more than what's adding value to your life.

I love that TV show Billions. And I'm like, oh man, like Bobby Axelrod, this powerful billionaire guy, he's going to war versus other people. That's fucking awesome. I love that. Yeah, he's an alpha. And then I'm like, but he's also just a jerk-off who's just trying to like squeeze pennies out of this thing or that thing, and it's complete nonsense, right? You know what I mean?

Yeah, I think, you know, I think what's ha— what also happens is, is important, which is, uh, in your 20s you're trying to figure out what— like, 20s in many ways about feeding ego. It's like whether you're partying, trying to make friends, trying to date people, trying to, you know, get your, get your name on the map in, you know, your career or your industry. I feel like A lot of people, including myself, their 20s are spent feeding the ego, and then your 30s are spent figuring out that, okay, my ego is either full or it will never be full, and I actually want to feed the soul in some kind of way.

That's what I mean.

I actually want to become more conscious of how I spend my time and my energy. And, um, and then there's this constant push and pull of like, well, maybe I just want to make a bunch of money, or like, maybe I'm not ambitious enough.

Well, I think you can do both.

Over money focus. And there's like these debates that I have in my head. It sounds like you do too.

I think you could do both. And I think that, I guess the point is I'm beginning to realize I love the builders more than the allocators. Like, yeah, yeah, yeah. Fucking A. Builders over allocators all day.

Okay. Yeah. Good. That's a good, that's a good way to end the podcast.