How to Intelligently Accumulate Wealth While Continuing to Grow Your Business

Hey, it's Mark Podolski, the land geek with your favorite niche real estate website, thelandgeek.com and on this week's Roundtable podcast, we have a special guest, Ari Steinbein. So if you're not familiar with Ari, he's kind of a successful investor entrepreneur. He's kind of like, let's just call him like the renaissance man of business. But Ari's bread and butter is helping successful business owners and entrepreneurs invest their money intelligently, allowing their wealth to accumulate so they can stay focused on what truly matters, their business and its mission. He spent his entire career sharpening his operational experience with investments and valuing businesses. Having worked with top private equity, venture capital, hedge funds, investment managers and banks, I have a feeling this guy loves spreadsheets as well as a wealth of success in the E commerce and Amazon selling spaces. Ari is particularly skilled at in managing large, complex projects and teams. A credit to his excellent executive leadership skills about finance, business strategy, marketing, operations. Ari Scheinbein, welcome.

Thank you so much, Mark.

So we got, we don't have all the usual suspects on the Roundtable podcast today. It's just Tate and Eric. So the three of us are going to grill you, okay. Perhaps put you in the lion's den. That's a little inside joke. Ari has a podcast called the Lion's End Podcast. So Ari, let's just rewind the tape. How did you get involved in businesses, investments, the world of high finance?

Yeah. So business started as a kid in sports cards. So I was a sports fanatic. I played sports, but I followed all the teams and I bought cards. And back then that was my, basically my stock market, but I didn't really know that that was a business thing. And so I would go to card shows and I would buy on the cheap and sell on the high. And to summarize that story, price guides would come out once a month, they were in print, they wasn't online. So you had a 30 day window, almost like of arbitrage, where you would see a static price in the price guide and the player would be performing the rest of the time, whether it was a football player or whether it was a baseball player. And so if you actually paid attention to the player and you knew that the card would go up in value, you could buy it before it actually showcase that it was up in value. And so as 1112 year old, my dad would take me to card shows and I'd be buying up the things I thought were great and then I'd sell them a Couple of months later as the price guide then reflected it. So back then also it wasn't really a thing to be an entrepreneur or kind of go out on your own. So I did the college route and I got a degree in finance and then went to investment banking and I went to work for a firm called J.P. morgan and was doing the spreadsheet thing like you said. And I almost immediately was at night kind of back in the hey, buying something and selling it for more on the side. And I guess it came so intuitively that I really didn't, I took that for granted. I really didn't understand that. Like, hey, not everybody thinks the way I do and not everybody kind of gets into these things. So I, the whole time I basically have had a career that's in high finance. So I did that path and that's why I've worked in private equity firms and hedge funds and I work alongside them. And I always learn what the mechanisms and the levers are in businesses to make them more valuable, why people want to buy them, why people want to sell them and that kind of thing. But along the way, I've done things on the side and done a lot of entrepreneurial things while maintaining a career, a full time job. And I've met a lot of amazing entrepreneurs or small business owners and recognize that they don't actually have any investing or finance skill or knowledge base. And they would just kind of start coming to me for the questions. They're like, oh, do you know anything about this? Or oh, do you know anything about that? And I'm like, yeah, what do you want to do? And they would tell me, I'm like, oh, don't do that. Here are the pitfalls. Maybe do it. But understand, like to walk around these pitfalls or don't do that and do something else. Kind of like what were their objectives, what's their goals? And stuff like that. And that's kind of what's led the intersection of finance and entrepreneurs together.

That's super interesting. And I know Tate, Eric and I, and we're kind of like in that category of we really love to buy and sell raw land and spend time there. But I mean, I know we dabble in other things. Like Eric loves crypto. Actually, I shouldn't pick on Eric. Tate loves crypto too. I love crypto too. The three of us love crypto.

Me too.

But that being said, it would be nice to have that third party there that's in that world full time, looking at things we know, we know we don't know, but that whole big area, but we don't know. We don't know. Bridging that gap. So I'm going to throw it over to Tate to ask you the first question.

All right, I'm going to come out of the gate swinging here for you. This is actually a question that is based on an article published by your previous employer of JP Morgan themselves. So recently JP Morgan came out with a statement that says alternative investments are no longer optional. What does that mean to you, a guy in your position whose responsibility it is to help people understand the best way to invest or spend their money. What does that mean, alternative investments? Is that the crypto space? Is that the world of art? Is that wine? What is it and how would you respond to that?

I think that's a great question after seeing that statement. Historically, the traditional path was mutual funds, maybe some individual stocks then became ETFs and bonds. And because bonds typically trade in denominations much larger, so you needed mutual funds for these bonds. Those were viewed as traditional asset class. Even real estate, let alone raw land, real estate was viewed as an alternative asset. And so I think in today's market, if you look at The S&P 500, it's almost become, I mean, forget the fact that what we've had over the last few years, but it's become almost like the gold of the 70s and the 80s, meaning the gold standard was like, hey, you park your money there, you'll hedge inflation. You'll probably get anywhere from 1 to 7% of appreciation and value of gold over time and you're offsetting inflation. And if you look 100 year returns on the S&P 500 are what, 8%, you shrink it down and you can get more, closer to 10% type of things. But now if you actually really want, especially in this environment where you have 7, 8% inflation, you need to be outperforming in a meaningful way. And alternative assets are basically anything that don't fall into the tradition traditional, hey, buy it in a public brokerage account. So crypto probably would fall into alternative. I would define crypto as an alternative. I would define real estate, whether it's raw land or a short term rental property, or whether it's a investor in a 200 unit apartment building. That's alternative, I think art and wine collectibles, anything. So sports cards, that's there. You have NFTs which really don't fall in the crypto space. It's another collectible kind of thing. Again, alternative, like masterworks have kind of created this, hey, fractional ownership in the art space. And you're seeing it like there are companies like Rally and all these other things. You can have fractional ownerships and sports cards. I want a Mickey Mantle rookie, but I'm not going to drop $600,000, but I can own 1% of it and then maybe trade that in the secondary. So all these things are definitely places where you don't need everything. Right? Like it's kind of like in business you don't have to do all things to all people. You have to though, be in the traditional, the stocks, bonds, whatever. But having alternative, these other ideas start looking at what speaks to you and how that kind of fits a your risk profile. Because if this is like, if you look at crypto and you're like, oh God, down 50%, well, I mean the stock market's down probably 40 or 50% from its highs of November anyway. But if that volatility scares you, then maybe that's not for you today. But, but also understand each asset class in the sense that some of these other alternatives, like even sports cards or wine or art, if you're not owning fractionals, but you're actually owning the item, think about the liquidity challenge of some of these things. How accessible is that money? Traditional stuff tends to be much more liquid than the non alternatives. I would say 10 years ago alternatives were hedge funds and private equity funds. That was like the definition of alternatives. Now alternatives, I think is a much broader and retail level versus 10, 20 years ago, the average retail investor, the mom and pop person, could not get into a hedge fund or a private equity fund and therefore those were the alternatives. But now mainstream has come to, you know, these exclusive things have come mainstream. Like even if you look at apps like Titan, which is like, hey, hedge funds for the masses, you know, we talked about masterworks, but the other ones like realty mogul and these guys, right? Like bringing real estate to the masses. I think that is probably how I would interpret that.

That's awesome. Yeah, that's, that's a perfect answer. I was, I saw that article come out recently and it, you know, your bio kind of made me think of it. And so, you know, I think it's something that you got to pay attention to, right? You got to be aware of what's going on. And that's where a guy like you can really help somebody who doesn't have all the free time in the world to sit down and read up on art or these alternative investments. Because at the end of the day, I Think we're all looking for somebody to guide us and help us a little bit. So I appreciate that answer and I know that's something that you guys specialize in, so thank you.

I do, too. As far as the democratization of investing, it's really an interesting time because I like to just project myself as one of the people in billions of and be investing in Axe Capital and have like the sort of exclusive thing. Are you Wags?

Are you selling?

I don't even drink, so I'm definitely not Wags. But I don't want to totally hijack the podcast and go down the billions rabbit hole. So I'm going to throw it to Eric the Technician Peterson. Eric, what question do you have, Ari?

Yeah, I think it might be helpful for the audience to hear maybe some tips around how they can invest their money, whether they've got lots of money or a little bit of money. Like, how can you help those two different categories, whether it be education or helping them invest or something else.

Yeah. So I think obviously you have two different spectrums. So someone with a lot of money, they typically are willing to trade their time. They don't have a lot of time, they have more money. So they're willing to use the money to buy back time or to outsource some of these things. So there's lots of different things they can do. Think of it as almost like done for you. One of my knocks, I guess I come out as a probably the not common person in the financial services industry is most financial advisors, and I put that in quotes, are really, I wouldn't call them brokers, but they typically work for an asset management firm of some sort. So whether it's Raymond James or Merrill lynch or something, and those registered broker dealers have a limit on what they can actually have. You invest because there's only two business models in that industry, and that is pay for aum, meaning you give me your assets and I management. So assets under management, that's what AUM stands for. So I get some sort of fee, whether it's 50 basis points, 100 basis points, which is 1%, I get a fee for what I manage. And in theory, people say, hey, our interests are aligned because if the assets go up in value, so does my fee, and if the assets go down in value, so does my fee. And so it sounds like a great pitch, but in reality is you're limited. They can only put you in the vehicles that their brokerage or their asset management firm allows them to. So if you think about your neighbor who is the life insurance broker. Life insurance is a solution for everything, according to him. Why? Because that's the thing he's selling. He is incentivized to put you into that. So the broker, if he wants you in these mutual funds or he wants your assets under management or whatever it is, his solution is very vertical. It's binary. Here, come here. But if you want to do raw land deals, he can't help you. He cannot actually do anything for you. And therefore his intentions and incentives are no longer aligned necessarily with yours. So my whole view is whether you have a ton of money or a little money, I want to be very product agnostic, meaning I don't care where you put your money. I think this goes to both the wealthy or the starting out. And that is start to understand what speaks to you. And so if you're really into crypto, right, and whether you're wealthy or not, I think putting a ton, a ton of money into crypto is probably a little bit risky at this point because people are like, what is it? I don't understand. And we're not going to spend 25 minutes or more trying to break it down. But very high level. If we think about the technology, the blockchain, it's there, it works, it's going to be there, right? Like we're going to. If you think about 2013-2017, what people, you know, thought of it was like the dark payment web where like, you know, only scammers were using it. Now it's accepted, right? Like the SEC is going to do something inside, you know, I don't know the timeframe, but they're going to have rulings and opinions on this, which just validates the whole thing. But to say that this project over, this project is going to be the winner, it's too early. We don't know that. And so you have to understand like, hey, if you want to grow your money and your wealth, understand that risk component versus do I think Microsoft is going to go to zero over the next 10 years? No, that stock probably won't. But could one of the crypto projects I invest in totally get wiped out? Yeah, it could because of a million different reasons. And if you're heavy into the defi space and you looked into it, you'll see what's happened. Like Time Wonderland is probably an amazing case study in, hey, this is a great concept and everybody poured all this money in and next thing you know, it wasn't such a great concept and turns out there was a shady player involved and Nobody knew. And I'm not calling them out in the way of like, hey, don't ever invest again. But the point is, you don't know what's going to ultimately happen. So you're taking like, very, very early stage bets, which is okay, but understand that. And if you're like, hey, I love sports cards, my kids love sports cars, I'm going to do that. You actually have a lot more control than you do on getting into PayPal stock and then announcing on their quarterly earnings. Yeah, the ebay exclusive is coming undone. That timeframe is done, and we're going to be down 25%. You have no control over that stock. You have immediate liquidity versus cards, which could take a long time to sell or art or things of that nature. So I think you have to first identify, hey, what speaks to me, what's my risk tolerance? I always tell people risk tolerance is really one of the biggest drivers. Then active or passive. I have a lot of money. I don't want to be active in this. So it's almost done for you. You can get into big real estate deals where someone else is the operator. Their day job is to run that 200 unit building. And that's kind of like in the syndication model. And I work with a lot of people that I vet those types of deals. I've worked with operators and I kind of tell them, hey, here are the pros, here are the cons. But ultimately I'm not operating it that per the investor is not operating it. And we get just basically passive checks. The same with if you want to buy raw land, you can get active and flip the contracts yourself or the land yourself, or you potentially can outsource that. And it's the same with stocks. Do you want to give it off to someone or do you want to learn these things? So in future funds, my whole thing is like, hey, if you're at your beginning and you really don't even know what these asset classes that I'm rambling about are, then maybe you want to get a little bit of a stronger foundation to know where you're going. But if you're like, hey, I've got tons of money and I just need to someone else to do it, I think the idea is then to start thinking about, okay, how can I have a done for you? An outsourced service of some sort, and it may be different for every asset class.

I love it. I love it. So, Ari, I've got another great question. Not that Tate's question wasn't great. And Eric's wasn't fantastic, but I think this one is really going to hit home. What's the worst advice you see or hear given in your area of expertise?

That's a lot of bad advice. I think the bad advice that I get a lot is it's not the advice that's so bad, but it's missing context and it kind of tails a little bit into what I was saying with Eric. And that is people not understanding the amount of time that something can take. So if you want to trade options, right, you're being sold this opportunity, learn this course and do this. There's nothing wrong probably with the information in that course, but what is it going to take away from your time wise? How much of it can be automated, how much of it you have to do versus hey, I just want to learn a skill set just of like I wanted to build a shed in my backyard. Hey, I want to learn how to trade options in my spare time. Okay, that's fine. So the advice I think is that the bad advice comes from, okay, how much time am I trading for that money, so to speak. But it then intersects of what do I really want to do and what's my objective here? So the bad advice is like that there's only one way. This is the only way to make money and this is the only way you're going to get rich. Or this is the everybody else is wrong. I think that's actually bad advice because I think you can win lots of ways. Just like in business, you can win lots of ways. Investing, you can win lots of ways. You don't have to win all the ways and it doesn't have to only be one single way.

Yeah, I totally agree. But just between you and me, what is the best way?

Yeah, if you could just summarize that in like a two to three sentence long statement, that would be ideal.

Balls. Crystal balls.

Crystal balls.

Well, I have an eight ball.

Yeah, I think, I think when you shake those up, they just, they actually took out the crystal part. So it's just, that's why I've been.

Asking Mark for a magic globe, you know, crystal ball for years. And the guy something about they're too expensive on ebay or you can't trust them. I don't know. Seems like a bunch of excuses to me.

Yeah. But all joking aside, think about if we had to talk 247 about one subject, how much of that would we have to actually make up? And that is literally financial media today. It is 24 7. How much of that is just garbage.

I don't even know if it's less than, if it's just financial media. I think the media in general, they always have to talk about something.

They have to talk about something. It's just you almost have to ignore it. And I mean, to get to your point, if you know your risk tolerance, if you're, okay, I'm going to make this investment for the next 15, 20 years.

Correct.

Then you don't care what Jim Cramer is saying on CNBC. You don't care if that CEO's on the wall of shame or not. Because you'll probably be going through three or four more CEOs anyways. But if you're getting emotionally attached to this analyst or that analyst, you won't get outsized returns, I don't think.

But there's a reason why the s and P500 becomes the best benchmark. Why do most funds underperform it? Because they're constantly trying to do something versus the 500 biggest companies in the United States. They're just doing their thing. I actually think if you took a survey of the people who check their investment balance daily versus people who check in once a month, maybe once a week, maybe twice a month, the mental health and the anxiety levels and the stress for the people who check less frequently, probably way lower. Like I said, the peaking of the market In November of 2021, if you were checking it from that time through, let's call it a week ago, or a week and a half ago, two weeks ago, your anxiety and stress definitely was up. There's no question about it. You were in all the heavy tech stocks, and next thing you know, somehow your portfolio is down 40 or 50%. You're like, this isn't supposed to happen. I've only experienced the last 10 years of up runs outside 2020 Covid dip. And we bounced off that hard. And if you paid attention once a month, you'd be like, ooh, market's rough. And now you open it this week and you're like, okay, we've had a number of crazy up days. It doesn't feel that bad. But how many people were really buying two weeks ago? Sentiment was horrible. Capitulation is massive. And so I think if you stay away from the media to your point about what they're talking about. Nonsense. Yeah. Kind of focus on the long term, whether it's five years, 10, 15, 25, it's a whole different mental space and just idea of how to handle your finances.

Yeah, absolutely. And I know I'm Speaking for myself, and I want to put words into Tate or Eric, but my financial maturity is so low that I have to buy only raw land because there's no land exchange to check. Oh, what's the value of that raw land today in Texas and Nevada? It doesn't really change that much as a market.

It's funny because there's two points I'm going to make on that. Number one is the accounting definition of fair value is what a willing buyer and a willing seller will transact on it in a non forced situation. So it doesn't matter what someone else did or didn't do, because if that wasn't you, it doesn't matter impact you. And number two, I hear this all the time. So I deal with a lot of startups and I'm an angel investor in a lot of companies. And the valuations of these private companies in the last few years is so crazy. And someone said if you looked at some of the companies that have gone public in the last two years, they've been crushed from the IPO levels. Even Coinbase, it's well below its IPO pricing and stuff like that. And it was a very interesting conversation I was having because they said, well, the private markets valuations have not really been impacted by the markets lately. And the reason for that is because in private market valuation, private market investing, you're either you're in or you're not. Meaning if you disagree, you can't short the stock. If I think Stripe is overvalued, then I'll pass on that next round of investing at that valuation and I move on and that's it. Whereas you have confirmation bias because everyone who invests says, yeah, yeah, it's worth 10, 20, 100 billion, whatever the latest round is. And so there's no contra view. Whereas the public markets, there's always two sides to the story. With raw lands, it's like, hey, what is someone willing to pay me? Okay, I accept that or I don't accept it and I kind of move on or I take the bid.

Yeah, exactly. Exactly. What's interesting about that, when you mentioned Stripe, is that there are companies or firms out there that will offer you stock pre IPO and then when it goes to IPO, they take 25% of your return. But it might make sense, I don't know. But that's the reason that there's an Ari Shinebind out there that you can actually go to and ask, does this make sense or not? So that part's great. Well, Ari, your mentorship has been really invaluable. But now we're at that point in the podcast where we're going to put you on the spot one more time and ask you for your tip of the week. A website, a resource, a book, something else actionable for the art of passive income listeners to go improve their businesses, improve their lives. But before you give that tip, got to give a shout out to today's sponsor of the podcast, which is Flight School. Learn how the next 16 weeks can literally transform your life. Start building that passive income quickly, safely, efficiently, with Scott Todd as your Sherpa who's done it thousands of times. Oh, and by the way, that investment in flight school ain't going to cost you nothing. Guaranteed you're going to make it back 180 days or less. Just show us your work. Learn more. Go to thelakeinc.com and schedule a call thelangic.com training Ari Scheinbein, what is your tip of the week?

So my tip of the week is. It's one word and it's patience. And it hits on everything, whether you're in business, whether you are in investing or you're just do in life. Everybody's like, oh, have some patience. But I think if you're building a career or you're an entrepreneur and you're growing something, you think it should all happen in 12 months or less and it's not going to. So have some patience and continue to build the skill. Have the patience to see it kind of blossom. Because I think most people bail on the investment on their business or other things because they didn't have enough patience. They're like, okay, okay, okay, everybody's impatient. So that would be like my tip. I think the other thing you had mentioned, like a book, an article, thing of that nature, the book I like a lot. There are two books I'm going to bring up. One's a more recent read and one's a read that I read probably like every other year. And that's. So that book is James Clear's Atomic Habits. And it just kind of has a really big impact on if you actually kind of do the things right. Like you could read a book and do nothing and then obviously you'll get nothing. But if you do the book, if you read the book and you actually implement things. Atomic Habits was just one of these books for me that like, I find is, is really, you know, game changing, so to speak. And a book I read recently, probably like a couple months ago, was Adam Grant's latest book called think again. And it really gives you perspective on we are trained to think like, hey, whatever we have in our brains or whatever we were taught, how often do we rethink that thesis or how often do we rethink something? So again, this is great for investing, this is great for business and in life as well. But if you are kind of like, hey, I got into this investment and you're headstrong about it, but you haven't actually rethought the thesis or you got into this asset class and you don't really know why, but you had some ideas, if you don't take the time to rethink it, then you may be on a sinking chip and not realizing because you're too focused on, hey, this is going to work out.

Yeah, I mean, I'll speak for myself. I love those tips. And Adam Grant and Simon Sinek, I don't know what these guys are eating for breakfast every morning, but it just seems like they just pump out thought leadership. Thought leadership book after book, which is just game changing and Atomic Habits is, I think the best selling book of like the last, I don't know, five years or something. It's, it's, it's just a meteor and if you have read it, it is one of those books you should just read every single year. Tate, what do you think?

Fantastic. I thoroughly enjoyed this conversation. I. Yeah, it's been very, very edifying and uplifting and insightful. So I appreciate the time and I know you're a busy guy, so I know our viewers and our listeners are going to get a lot of positive takeaways from this conversation. So thank you very much.

Eric, I'll give you the last word.

It was excellent. I appreciate your time. Ari. Thanks for coming on today and answering our questions.

Thanks.

My pleasure. Thanks for having me, guys.

Thank you, Ari. I want to give the listeners my tip of the week, which is learn more about Ari at the site, which is solutionadvisory.com solutionadvisory.com There'll be a link to the show notes there. And just remember that the only way, the only way we're going to get the quality of guests like an Ari Scheinbein from solutionadvisory.com is if you do us three little favors. Follow rate, review the podcast, send us a screenshot of that review, support the landgeek.com I'm going to send you a signed copy for free of dirt rich, which I don't know, you could always call Ari and see if that's an alternative investment. One day that signed copy could be worth a lot of money. You never know. So please do it. At the very least, you'll get more benefit because we'll get great guests. So thanks everybody. Let's do this. 1, 2, 3.

Let let freedom Freedom ring.

Thanks everybody.

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