WEBVTT

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My investment strategy after all of this time has gone completely back to my business strategy,

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which is singular focus, do the things you know, do more, do it better, and keep doing that for

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an extended period of time. And it would be unreasonable that you don't win.

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Welcome to the game where we talk about how to sell more stuff to more people in more ways and

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build businesses worth owning. I'm trying to build a billion dollar thing with acquisition.com.

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I always wished pesos, musk and buffet had documented their journey, so I'm doing it for the rest of

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us. Please share and enjoy. The game has changed. The entire economy has shifted and so too

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should your investment, at least mine has. And so there are three things that you absolutely

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have to know. Number one, the way you put your money has to shift because the economy has changed.

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Number two, I've taken all my money out of banks and I'll tell you where I put it instead and

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it's safer and gets me higher returns. And at the end, I'll explain to you exactly what I'm doing

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with my money right now and how it's different from the two other investment strategies I've had

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throughout my life. And so if you don't know who I am, my name is auction mosey. I own acquisition.com.

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There you go. It's portfolio right now that is over 200 million dollars a year. I cost 100 million

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in at worth by time I was 32 and I have nothing to sell you. I make these because I want you to be

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richest fuck and maybe we can partner someday. That being said, let's get into it. So number one,

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because the economy has changed, things are priced differently. There's inflationary pressures.

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Real estate is a is hanging on by a thread. Crypto is crashed. Socks have crashed. So what is a boy

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to do? Well, I'll tell you, my investment thesis first off is what do you do with your cash?

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All right. So if you've ever heard Warren Buffett or you heard people in the news say he has

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X billion dollars in cash or cash equivalents, I never knew with that myth. And so I'm going to rewind

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and explain what actually putting cash in a bank count means and why it's important in today's

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environment. So when you put cash into a bank, you're actually writing the bank alone to then

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loan your money and get something back. People don't know this, but you actually are a creditor of

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the bank. All right. So if a bank goes out of business, they owe you money, right? You loan them

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money. Now what happens is the bank will do one of two things. They will loan it out. Actually,

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they do one thing. They loan money, but they will either loan money to the government by buying bonds,

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right, which is buying debt, or they will loan it out to people on mortgages and things like that,

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right, or credit lines for businesses, whatever it is. They loan the money out again and they make

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more than they pay you. And so right now, if you look at your bank of America account, they'll pay

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you between 0.1 and 1% annually on your money. Okay. Boo. That sucks. Now here's what's interesting and

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most important about debt when you loan people money. There are two factors. One is what are you

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going to get back, which is the interest rate? And the second is how likely you're going to get it.

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Okay. So the interest rate is if you loan someone a money for a house and it's 5% or whatever,

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then if you put a hundred grand and you get 5,000 back, right, that's what it is. You get 100 plus

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the extra five. That's the interest. And you get paid that for taking on risk. All right,

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interest is a function of risk. That's how it works. Now, this is what's crazy. And I didn't understand

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this when I was putting my money in the bank. If the bank goes under, you lose all your money

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outside of the FDIC insured amount. Now, the FDIC right now is completely bankrupt anyways.

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And on top of that, if it exceeds that amount, you get stock in the bankruptcy company.

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What to do? Probably not the best outcome you wanted when you wanted to go to draw your money down.

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Right. Of course not. So what if there were a better alternative that was lower risk and had higher

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returns? I just learned about this. And the reason I always ignored it was because it looked boring

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and ugly. So when the bank has your money, I said they loan money out. You know who they

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loan it to a lot of times? The US government. Now, why do they do that? Because the likelihood

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risk that the government is going to be able to pay them back extremely high. Why? Because they can

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print the damn money and give them back to them. Number two is that they are making more than they

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are paying you. So they take your money for 0.1% a year and then they give it to the government

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and the government gives them 4% a year. So they get 40 times what they pay you by giving the US

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government money. Right. And so what's interesting is that if we were to analyze both, one, you have a

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bond from the bank. Right. Because you're putting money in and they pay you a little bit. Which one

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of these pays more? 4% from a treasury or 0.1% from a bank? The treasury from the US government.

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Now, which one is more likely you go out of business, a bank or the US government? Well, let's see

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who's going out of business in the last 100 years? Banks or the US government? Well, more banks have.

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So this is both lower risk and higher return. Bingo. Ding, ding, ding. Right. We have a winner.

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Now, the only other reason that you get lower interest here is because the money is immediately

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accessible. It's liquid. So you can go tomorrow and get money out. Right. That's how it works there.

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But the thing is, is that treasuries are also immediately tradable. So the only other reason that

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you would get a lower interest rate is because something is more liquid, meaning you can trade in

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and out of it at your desire whenever you want. Right. A more liquid thing will pay you less because

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you can get into now. Right. So here's the thing. Treasuries are just as liquid as a bank account

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for two reasons. Number one, because you can take a loan against treasuries in real time.

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You get 80% of your money. So if you put $100,000 in bonds for the US treasury bonds,

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T bills is what they're called. You can get 80% of that up to at a super low secured interest rate

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to go and plow into something else. Number one, number two, country and entire governments trade

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in US treasuries, which means that you will never have an amount of money that you can't trade in

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half a second. Like for example, right now, if you wanted to trade Bitcoin, you could go and sell

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it in half a second. Right. It's not a problem. Like you can get the money. T bills trade even

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faster than Bitcoin by a fucking mile. Right. And so you have immediate access to the money. It's

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lower risk because the government's not going to go out of business compared to a bank. It's lower

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risk. Right. And then you're going to get 40 times the earnings that you are in a bank. Now here's

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an interesting thought for you. Instead of putting the money in the bank and then betting the

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banks going to stay alive and pay it a little bit, you could do an identical transaction and just buy

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a bond from Bank of America and get 5% or 4.7% from Bank of America. And it's literally the same thing.

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You're betting on the fact they're going to stay there, but then they pay you 4.7% rather than

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0.1%. And the reason you're like, why don't people do this because they don't know and the banks are

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you're like, why don't they talk about this? Because why would they? They are happy to take your

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money and go make 5% on it and pay you 0.1. That's the business. Why would they tell people? Right.

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This is how it works. So in this economy, I have shifted to almost all cash. I have a few ETFs and

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I'll tell you what I'm actually doing with the money now. And this is important. So my entire

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structure of investments has changed over the last five years, really last 10 years. The first

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chunk of my life was SNM 500. I put all my excess cash into learning skills, getting access to

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people, coaching, bunch of workshops, et cetera, courses, all of that. So I could increase my

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earning capacity. Highest return investment I still have ever made today. Number one. Number two,

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once I had more money than I could possibly reinvesting courses in coaching or whatnot,

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I started plugging into the S&P 500 because that's what Uncle Warren told me to do,

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forget if it worked for him would work for me. So I ploughed all my money into indexes. That was

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the next phase of my investing. The third phase came post sale. We sold three companies last year

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and I talked to a bunch of different friends who were very, very wealthy and one of them is a very

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good investor and he outlined a strategy for me that he called a barbell strategy, which is I have

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stocks over here. I've got real estate over here, very little in between, and then I just have my

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private equities of the companies that I own personally. Those are the three different buckets

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that, so I make money here and ploughed into these two, right, with basically nothing between.

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Now, here's the thing that you don't know. In the last two years, I've maybe made five investments

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and those investments represent in total maybe 10% of the cash that I have. Not a lot.

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Hey guys, love that you're listening to the podcast. If you ever want to have the video version

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of this, which usually has more facts, more visuals, more graphs, you know, drawn out stuff,

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sometimes it can help hit the brain centers in different ways. You can check out my YouTube

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channel. It's absolutely free to check that out if that's what you are into and if not, keep

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enjoying the show. I didn't realize what the problem was until I saw a video from Dave Ramsey.

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And before you cast judgment, you really need to hear this out because it really changed my life

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and I hope it changes yours. So I was watching a video where Graham Stefan was having Dave Ramsey

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analyze his investment portfolio. And he said, hey, Dave, don't you feel like I'm over indexed

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on real estate? He said, like, you know, 80 plus percent of my net worth is in real estate deals.

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And Dave Ramsey gave one of the wisest responses that I've ever heard in investing and it changed my

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life. He said, well, if you put a big circle on the table, and I'm loosely paraphrasing,

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and we had to say, what percentage of your knowledge is real estate versus stocks and bonds and

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other stuff? What would you say it is? He said, oh, well, I don't know, 80, 85% of what I know is

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really about real estate. And he looked at him and he was like, well, then that's a perfect

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distribution for you because it reflects your knowledge. So where you invest is what you know.

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And so then he went on to say, I have talked to many, many billionaires, probably far more than I

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have. He said, I've learned two things from them. He's learned many things, but two things from

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investing. He said, they don't do many things and the things they pick are things they understand

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and they do a lot of them. And for whatever reason, the combination of understanding that in the

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circle, this is the slice of the pie that he knew and that the people of the richest in the world

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just pick one game or two games, they knew really well and they do a ton of those games is what

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changed my perspective. And so as soon as I heard that, I won, took all my money and put it into

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treasuries because I understood that the banks weren't going to give me anything for it. And this

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is lower risk and gets me a better yield and it's immediately liquid, just better in all accounts.

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And then we decided, this is a big deal for me, I only do private deals. And the reason that

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this became real for me is that I had the biggest deal that I will have done, which I'll tell you

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about later, maybe a few years from now, financially, that normally I wouldn't write a check one tenth

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that size to a real estate deal or an apartment complex or some other thing that I don't understand.

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And so I always was banking on other people to be like, do I really trust this guy?

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How much is he trying to screw me? What are the fees here? Where are the hidden things? How do I

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know this is going to pay off? And the things that's like real estate is not my game. It's not my game.

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I'm not a real estate with. It's not my thing. If you're not a real estate with, I would recommend

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not putting all your shit into something that you don't know. And so when I got approached for this

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private deal, it was an industry I knew, it was an operator that had a ton of experience. We had

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a shared vision of what we wanted to do with the company and the biggest thing they lacked was

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capital. And I understood exactly where the capital is going. I knew how it was going to get

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returns. And here's what's crazy. This investment will probably get somewhere in the neighborhood

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of 100 to 500 percent a year. You're like, how is that possible? It's only possible because it's

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an incredibly high risk investment, but it's high risk for somebody who doesn't know what they're

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doing. And so Warren Buffett has two quotes about this that really shifted my perspective. He said,

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number one, diversification is a hedge against ignorance. It's a hedge against not knowing. The reason

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he tells most people to do the S&P 500 is because he realizes the vast majority of people don't know

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what they're doing. And so the best and safest thing I can do is just invest in everything and just

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bet on the stock market overall. Just bet on the economy growing over time. When you're betting on

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the stock market, you're really betting on a country. You're betting that this country or even the

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world, because many of the companies in the top 500 are global, just that the world will grow. That's

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all you're doing. The second thing that he said is that it's only risky when you don't know what you're

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doing. And so if you understand the variables, and it's funny because as I've gone through this deal,

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I told the guys, imagine you have unlimited capital. I'm willing to write basically a blank check

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for you if these are the economics of the deal. And he said, awesome. And I only feel comfortable with

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that because I know where the bodies are buried. I know what risk to look for. I know what the upside

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would do. I know how I'm going to add value to this deal. But in a real estate department building,

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it's not my game. And so I feel so much more comfortable writing an enormous check because it's

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the game that I know. When I write that circle on the table, for me, it's all business. And so I

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will be divesting from the very small percentage of my net worth that's in real estate. I will hold

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the equities that I have in ETFs and everything else that I have goes straight into treasuries. And then

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when big deals come, I plow it into the deal. And then I repay back my Warchest. Warchest goes back up,

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plow to another deal, repay back the Warchest, plow it into another deal. That is the investment

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strategy that I am following. And the reason this is so important is that in the economy today,

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you have to do the things you know. There's a lot of risk out there right now. And so if you're not

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sure, I would say, hold and figure out a game that you understand. Because then you don't have to

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feel like you're betting because that's what all I felt like I was doing. I felt like I was betting

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on people and trying to like see between the lines like, do I trust this person or not trust this

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person? Fuck that. Find something you know. Go all in on that one thing. And this is it's funny

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because my investment strategy after all of this time has gone completely back to my business

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strategy, which is singular focus. Do the things you know. Do more. Do it better and keep doing that

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for an extended period of time. And it would be unreasonable that you don't win. So for example,

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you can go to Robinhood or whatever exchange you invest on. And if you don't order to do that,

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just say like, how do I invest in stocks and you'll be able to download an app that does it.

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And you can search treasurer or bonds and you will be able to go and buy a bond is not complicated.

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Now, I will give you an advanced strategy though, because Mosination love you. So great strategy for

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buying bonds is that there are maturity dates, which means that when does the bond come due?

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So I was telling you earlier that liquidity matters a lot. So it's like, can I trade in and out of it?

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Now, bonds come due. And when they are due, you're owed the money plus the interest. So what you

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gave them, plus whatever interest was supposed to be owed on top of that. So one strategy just to buy

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them all at a certain maturity day and then wait. What we have opted to do is buy six, 12, 18, 24

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month bonds, basically go one quarter, one quarter, one quarter, one quarter. And that means that every

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six months I get a pop back of cash plus interest. And then I put it back to another 24 months. And so

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it becomes this cash recycling machine in the meantime. So that is how I do it. You can still take loans

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against it. And if you're worried about the value of bonds going up and down, don't because if you do

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that strategy, you're just banking on the fact that you are going to get the money back. You don't

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even have to worry about trading them in and out. That's not you're not a bonds trader. It's not the

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point here. The point is you're putting somewhere safer than a banking out that will pay you money

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pretty much guaranteed unless the government goes under. In which case, we don't need to worry about

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the banks are definitely fucked when I have it. Yeah. So if you're a dentist, right? At a certain point,

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you will have enough money if you're good at being a dentist and don't do this until you are good

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enough of being a dentist that you have a lot of extra money that you could go and buy another

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dental office. It's a business you know. And what's crazy is that you will get significantly higher

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returns on that purchase than you would on the stock market. So for example, if you wanted to buy

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a dental office that did a million dollars top line and $200,000 in bottom line, right? Most of

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these professional services businesses, you can get for a little bit of seller financing. You might

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only have to put, I don't know, one or two times down. Okay. Now if you put, let's say one times

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down, meaning you pay $400,000 for the business. $200,000 comes in seller financing from the

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person who's selling it to you. They let you pay debt off over time and then $200,000 you put in their

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pocket. Okay. Well, you're one, you get your first $200,000 back, right? And then you're two,

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let's say you pay off the rest of the debt. All right. Well, when you did that, you're three,

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you make another $200,000. So you're ready to return there. And this is me doing back in

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napkin. It's basically like 33, 33, 33. So compared to the stock market, et cetera, you're going to

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do way better. Now, if you know the business, that's just assuming it stays the same. But if you're

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better at business than the other dentist is, right? Because that's maybe why you're buying the

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business, then you might be able to overnight double that. And then all of a sudden, you're one,

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you pay back everything and you're two, you make $400, right? Versus your $200. So now on a two-year

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basis, you already doubled your money in two years. And here's what's even crazier. You doubled

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your money on a cash basis. But now you own your dental practice, plus their dental practice. And

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the combined value of those things is even higher than either of those individually. And you still

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own those. And so your total net worth based on the equity value of those companies has grown

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tax-free this whole time. And you already put the cash back in your pocket. That's where you get

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competitive advantages of knowing the game you're in. So if you're like, well, Alex, I don't know

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a ton about business. Cool. If you recall, I went through three steps of my investing phase.

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All right. So the first one was investing in you, right? Investing and increasing your skill set,

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which is later going to be compounded because we talk about leverage all the time, how to get more

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for what I put in. You're going to invest in a skill set. And then when you get better at it, you might

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end up starting doing deals only around that stack of skills that you acquired. But phase one,

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learn shit. Phase two, when you have earnings, but not enough to really get into the big investing

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world, you can cloud into the S&P and diversify your risk because you still don't know what you're

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doing yet. You still have cash flow in access to what you can reinvest in your education. But you

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still not like a super G yet, right? At investing. I'm saying, I am a human point. All right. The third

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phase is, okay, I'm making so much money from the game I'm in that it makes more sense and it's

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less risky for me to do more of this game than the stock market. And then that is where you build

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the crazy wall. And so that's what I would consider to be the three step. Step one, invest in you,

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step two, invest excess in indexes, basically to wait as a holding pattern, keep stockpiling the

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war chest up. And then when you feel like you're good enough at the game, your main game,

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then you have the stockpile and you can deploy it. And then that starts the compounding machine.

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And so when you're like, I'm not sure if I'm getting the leverage I need on the skills I'm learning

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right now. That's not the point right now. You're learning this shit so that later you can lever

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the crap out of it in conjunction with capital and then you'll blow up.