WEBVTT 1 00:00:00.000 --> 00:00:04.480 My investment strategy after all of this time has gone completely back to my business strategy, 2 00:00:04.480 --> 00:00:10.480 which is singular focus, do the things you know, do more, do it better, and keep doing that 3 00:00:10.480 --> 00:00:13.440 for an extended period of time. And it would be unreasonable that you don't win. 4 00:00:15.840 --> 00:00:19.200 The wealthiest people in the world see business as a game. This podcast, the game, 5 00:00:19.200 --> 00:00:22.720 is my attempt at documenting the lessons I've learned on my way to building acquisition.com 6 00:00:22.720 --> 00:00:26.160 into a billion dollar portfolio. My hope is that you use the lessons to bring your business and 7 00:00:26.160 --> 00:00:29.520 maybe someday soon partner with us to get two hundred million dollars in beyond. I hope you share 8 00:00:29.520 --> 00:00:40.000 and enjoy. The game has changed. The entire economy has shifted and so too should your investment, 9 00:00:40.000 --> 00:00:44.400 at least mine has. And so there are three things that you absolutely have to know. Number one, 10 00:00:45.040 --> 00:00:49.520 the way you put your money has to shift because the economy has changed. Number two, I've taken all 11 00:00:49.520 --> 00:00:53.440 my money out of banks and I'll tell you where I put it instead and it's safer and gets me higher 12 00:00:53.440 --> 00:00:57.760 returns. And at the end, I'll explain to you exactly what I'm doing with my money right now and 13 00:00:57.760 --> 00:01:01.520 how it's different from the two other investment strategies I've had throughout my life. So, 14 00:01:01.520 --> 00:01:06.880 number one, because the economy has changed, things are priced differently. There's inflationary 15 00:01:06.880 --> 00:01:12.560 pressures. Real estate is a is hanging on by a thread. Crypto is crashed. Sox is crashed. So what 16 00:01:12.560 --> 00:01:19.520 is a boy to do? Well, I'll tell you, my investment thesis first off is what do you do with your cash? 17 00:01:19.600 --> 00:01:23.040 All right. So if you've ever heard Warren Buffett or you heard people in the news say he has 18 00:01:23.040 --> 00:01:28.080 x billion dollars in cash or cash equivalents, I never knew with that mint. And so I'm going to rewind 19 00:01:28.080 --> 00:01:33.040 and explain what actually putting cash in a bank count means and why it's important in today's 20 00:01:33.040 --> 00:01:39.680 environment. So when you put cash into a bank, you're actually writing the bank alone to then 21 00:01:39.680 --> 00:01:44.320 loan your money and get something back. People don't know this, but you actually are a creditor of 22 00:01:44.400 --> 00:01:48.720 the bank. All right. So if a bank goes out of business, they owe you money, right? You loan 23 00:01:48.720 --> 00:01:52.240 them money. Now what happens is the bank will do one of two things. They will loan it out. Actually, 24 00:01:52.240 --> 00:01:57.440 they do one thing. They loan money, but they will either loan money to the government by buying bonds, 25 00:01:57.440 --> 00:02:02.720 right, which is buying debt, or they will loan it out to people in mortgages and things like that, 26 00:02:02.720 --> 00:02:05.840 right, or credit lines for businesses, whatever it is. They loan the money out again and they make 27 00:02:05.840 --> 00:02:10.080 more than they pay you. And so right now, if you look at your bank of America account, they'll pay 28 00:02:10.160 --> 00:02:16.320 you between 0.1 and 1% annually on your money. Okay. Boo. That sucks. Now here's what's interesting and 29 00:02:16.320 --> 00:02:21.760 most important about debt when you loan people money. There are two factors. One is what are you 30 00:02:21.760 --> 00:02:25.920 going to get back, which is the interest rate? And the second is how likely you're going to get it. 31 00:02:26.480 --> 00:02:31.680 Okay. So the interest rate is if you loan someone a money for a house and it's 5% or whatever, 32 00:02:31.680 --> 00:02:35.600 then if you put a hundred grand and you get 5,000 back, right, that's what is you get 100 plus the 33 00:02:35.600 --> 00:02:39.600 extra five. That's the interest. And you get paid that for taking on risk. All right. Interest 34 00:02:39.600 --> 00:02:45.040 is a function of risk. That's how it works. Now, this is what's crazy and I didn't understand this. 35 00:02:45.040 --> 00:02:49.600 When I was putting my money in the bank, if the bank goes under, you lose all your money 36 00:02:49.600 --> 00:02:54.240 outside of the FDIC insured amount. Now, the FDIC right now is completely bankrupt anyways. 37 00:02:54.240 --> 00:02:59.440 And on top of that, if it exceeds that amount, you get stock in the bankruptcy company. 38 00:02:59.440 --> 00:03:03.520 Whoop to do. Probably not the best outcome you wanted when you wanted to go draw your money down. 39 00:03:03.520 --> 00:03:08.640 Right. Of course not. So what if there were a better alternative that was lower risk 40 00:03:08.640 --> 00:03:13.200 and had higher returns? I just learned about this. And the reason I always ignored it was because 41 00:03:13.200 --> 00:03:19.200 it looked boring and ugly. So when the bank has your money, I said they loan money out. 42 00:03:19.200 --> 00:03:24.160 You know who they loaned it to a lot of times? The US government. Now, why do they do that? 43 00:03:24.160 --> 00:03:29.120 Because the likelihood risk that the government is going to be able to pay them back extremely high. 44 00:03:29.120 --> 00:03:33.280 Why? Because they can print the damn money and get back to that. Number two is that they are 45 00:03:33.280 --> 00:03:41.200 making more than they are paying you. So they take your money for 0.1% a year and then they give it 46 00:03:41.200 --> 00:03:46.960 to the government and the government gives them 4% a year. So they get 40 times what they pay you 47 00:03:46.960 --> 00:03:52.880 by giving the US government money. Right. And so what's interesting is that if we were to analyze both, 48 00:03:52.880 --> 00:03:56.960 one, you have a bond from the bank, right, because you're putting money in and they pay you a little bit. 49 00:03:57.040 --> 00:04:02.320 Which one of these pays more? 4% from a treasury or 0.1% from a bank? The treasury from the US 50 00:04:02.320 --> 00:04:07.920 government. Now, which one is more likely you got a business, a bank or the US government? 51 00:04:07.920 --> 00:04:12.000 Well, let's see. Who's going out of business in the last 100 years? Banks or the US government? 52 00:04:12.000 --> 00:04:18.960 Well, more banks have. So this is both lower risk and higher return, bingo, ding, ding, ding, 53 00:04:18.960 --> 00:04:23.760 right? We have a winner. Now, the only other reason that you get lower interest here is because the 54 00:04:23.760 --> 00:04:28.720 money is immediately accessible. It's liquid. So you can go tomorrow and get money out, right? That's 55 00:04:28.720 --> 00:04:34.960 how it works there. But the thing is is that treasuries are also immediately tradable. So the only 56 00:04:34.960 --> 00:04:39.040 other reason that you would get a lower interest rate is because something is more liquid, meaning 57 00:04:39.040 --> 00:04:43.440 you can trade in and out of it at your desire whenever you want, right? A more liquid thing will 58 00:04:43.440 --> 00:04:49.440 pay you less because you can get in and out. Right. So here's the thing. Treasuries are just as liquid 59 00:04:49.440 --> 00:04:54.800 as a bank account for two reasons. Number one, because you can take a loan against treasuries in 60 00:04:54.800 --> 00:04:59.440 real time. You get 80% of your money. So if you put a hundred thousand dollars in bonds for the US 61 00:04:59.440 --> 00:05:04.720 treasury bonds, T bills is what they're called. You can get 80% of that up to at a super low secured 62 00:05:04.720 --> 00:05:10.800 interest rate to go and plow into something else. Number one, number two, country and entire 63 00:05:10.800 --> 00:05:16.480 governments trade in US treasuries, which means that you will never have an amount of money 64 00:05:16.560 --> 00:05:21.040 that you can't trade in half a second. Relics like, for example, right now if you wanted to trade 65 00:05:21.040 --> 00:05:25.520 Bitcoin, you could go and sell it in half a second, right? It's not a problem that you can get the money. 66 00:05:25.520 --> 00:05:30.160 T bills trade even faster than Bitcoin by a fucking mile, right? And so you have immediate access to 67 00:05:30.160 --> 00:05:34.560 the money. It's lower risk because the government's not going to go out of business compared to a 68 00:05:34.560 --> 00:05:39.200 bank. It's lower risk, right? And then you're going to get 40 times the earnings that you are in a bank. 69 00:05:39.200 --> 00:05:44.320 Now, here's an interesting thought for you. Instead of putting the money in the bank and then 70 00:05:44.320 --> 00:05:49.360 betting the banks going to stay alive and pay it a little bit, you could do an identical transaction 71 00:05:49.360 --> 00:05:57.040 and just buy a bond from Bank of America and get 5% or 4.7% from Bank of America. And it's literally 72 00:05:57.040 --> 00:06:02.480 the same thing. You're betting on the fact they're going to stay there, but now they pay you 4.7% 73 00:06:02.480 --> 00:06:07.440 rather than 0.1%. And the reason you're like, why don't people do this because they don't know? 74 00:06:07.440 --> 00:06:12.400 And the banks are like, why don't they talk about this? Because why would they? They are happy 75 00:06:12.480 --> 00:06:17.760 to take your money and go make 5% on it and pay you 0.1%. That's the business. Why would they tell people? 76 00:06:17.760 --> 00:06:24.640 Right? This is how it works. So in this economy, I have shifted to almost all cash. I have a few 77 00:06:24.640 --> 00:06:28.560 ETFs and I'll tell you what I'm actually doing with the money now. And this is important. 78 00:06:29.120 --> 00:06:34.720 So my entire structure of investment has changed over the last five years, really last 10 years. 79 00:06:34.720 --> 00:06:40.880 The first chunk of my life was SME 500. I put all my excess cash into learning skills, 80 00:06:40.880 --> 00:06:45.840 getting access to people, coaching, munchers, workshops, etc. courses, all of that. So I could 81 00:06:45.840 --> 00:06:50.160 increase my earning capacity. Highest return investment I still have ever made today. Number one. 82 00:06:50.160 --> 00:06:54.720 Number two, once I had more money than I could possibly reinvesting courses in coaching or what 83 00:06:54.720 --> 00:06:58.640 not, I started plugging into the SMP 500 because that's what Uncle Warren told me to do. 84 00:06:58.640 --> 00:07:02.320 I figured if it worked for him, it would work for me. So I plowed all my money into indexes. That 85 00:07:02.320 --> 00:07:07.920 was the next phase of my investing. The third phase came post sale. So we sold three companies 86 00:07:08.000 --> 00:07:12.640 last year. And I talked to a bunch of different friends who were very, very wealthy. And one of them 87 00:07:12.640 --> 00:07:17.440 is a very good investor and he outlined a strategy for me. They call it a barbell strategy, which is 88 00:07:17.440 --> 00:07:23.200 I have stocks over here. I've got real estate over here, very little in between. And then I just 89 00:07:23.200 --> 00:07:27.760 have my private equities of the companies that I own personally, right? Those are kind of the 90 00:07:27.760 --> 00:07:32.080 three different buckets that, so I make money here and plow it into these two, right, with 91 00:07:32.080 --> 00:07:36.640 basically nothing between. Now, here's the thing that you don't know. In the last two years, 92 00:07:36.640 --> 00:07:44.080 I've maybe made five investments and those investments represent in total, maybe 10% of the cash 93 00:07:44.080 --> 00:07:50.640 that I have. Not a lot. Real quick, guys, if you can think about how you found this podcast, 94 00:07:50.640 --> 00:07:55.280 somebody probably tweeted it, told you about it, shared it on Instagram or something like that. 95 00:07:55.280 --> 00:08:00.000 The only way this grows is through word of mouth. And so I don't run ads. I don't do sponsorships. 96 00:08:00.000 --> 00:08:04.240 I don't sell anything. My only ask is that you continue to pay it forward. Do whoever showed you 97 00:08:04.240 --> 00:08:08.880 or however you found out about this podcast that you do the exact same thing. So if it was a review, 98 00:08:08.880 --> 00:08:11.840 if it was a post, if you do that, it would mean the world to me and you'll throw some good 99 00:08:11.840 --> 00:08:17.200 comment out there for another entrepreneur. I didn't realize what the problem was until I 100 00:08:17.200 --> 00:08:21.120 saw a video from Dave Ramsey. And before you cast judgment, you really need to hear this out 101 00:08:21.120 --> 00:08:24.800 because it really changed my life and I hope it changes yours. So I was watching a video where 102 00:08:24.800 --> 00:08:30.240 Graham Stefan was having Dave Ramsey analyze his investment portfolio. And he said, hey, Dave, 103 00:08:30.240 --> 00:08:35.040 don't you feel like I'm over indexed on real estate? He said, like, you know, 80 plus percent of my 104 00:08:35.040 --> 00:08:41.280 of my net worth is in real estate deals. And Dave Ramsey gave one of the wisest responses that I've 105 00:08:41.280 --> 00:08:46.960 ever heard in investing and it changed my life. He said, well, if you put a big circle on the table 106 00:08:46.960 --> 00:08:52.000 and I'm loosely paraphrasing and we had to say, what percentage of your knowledge is real estate 107 00:08:52.000 --> 00:08:56.480 versus stocks and bonds and other stuff? What would you say it is? He said, oh, well, I don't know, 108 00:08:56.480 --> 00:09:01.200 80, 85 percent of what I know is really about real estate. And he looked at him and he was like, 109 00:09:01.200 --> 00:09:07.440 well, then that's a perfect distribution for you because it reflects your knowledge. So where 110 00:09:07.440 --> 00:09:13.200 you invest is what you know. And so then he went on to say, I have talked to many, many billionaires, 111 00:09:13.200 --> 00:09:17.200 probably far more than I have. He said, I've learned two things from them. He's learned many things, 112 00:09:17.200 --> 00:09:21.600 but two things from investing. He said, they don't do many things and the things they pick are things 113 00:09:21.600 --> 00:09:26.160 they understand and they do a lot of them. And for whatever reason, the combination of understanding 114 00:09:26.640 --> 00:09:31.280 that in the circle, this is the slice of the pie that he knew and that the people were the richest 115 00:09:31.280 --> 00:09:35.520 in the world just pick one game or two games they knew really well and they do a ton of those 116 00:09:35.520 --> 00:09:42.560 games is what changed my perspective. And so as soon as I heard that, I won, took all my money 117 00:09:42.560 --> 00:09:46.080 and put it into treasuries because I understood that the banks weren't going to give me anything for 118 00:09:46.080 --> 00:09:50.960 it. And this is lower risk and gets me a better yield and it's immediately liquid, just better 119 00:09:51.040 --> 00:09:56.800 in all accounts. And then we decided, this is a big deal for me, I only do private deals. 120 00:09:57.520 --> 00:10:02.640 And the reason that this became real for me is that I had the biggest deal that I will have done, 121 00:10:02.640 --> 00:10:06.960 which I'll tell you about later, maybe a few years from now, financially, that normally, 122 00:10:06.960 --> 00:10:12.720 I wouldn't write a check one tenth of that size to a real estate deal or an apartment complex 123 00:10:12.720 --> 00:10:17.520 or some other thing that I don't understand. And so I always was banking on other people to be like, 124 00:10:17.520 --> 00:10:21.040 do I really trust this guy? How much is he trying to screw me? What are the fees here? 125 00:10:21.040 --> 00:10:24.560 Where are the hidden things? How do I know this is going to pay off? And the things is like, 126 00:10:24.560 --> 00:10:29.120 real estate is not my game. It's not my game. I'm not a real estate with. It's not my thing. 127 00:10:29.120 --> 00:10:34.000 If you're not a real estate with, I would recommend not putting all your shit into something that you 128 00:10:34.000 --> 00:10:40.160 don't know. And so when I got approached for this private deal, it was an industry I knew, 129 00:10:40.160 --> 00:10:44.240 it was an operator that had a ton of experience. We had a shared vision of what we want to do with 130 00:10:44.240 --> 00:10:47.600 the company and the biggest thing they lacked was capital. And I understood exactly where the 131 00:10:47.600 --> 00:10:52.320 capital is going. I knew how it was going to get returns. And here's what's crazy. This investment 132 00:10:52.320 --> 00:10:56.960 will probably get somewhere in the neighborhood of 100 to 500 percent a year. You're like, how is 133 00:10:56.960 --> 00:11:02.640 that possible? It's only possible because it's an incredibly high-risk investment, but it's high 134 00:11:02.640 --> 00:11:07.120 risk for somebody who doesn't know what they're doing. And so Warren Buffett has two quotes about 135 00:11:07.120 --> 00:11:11.840 this that really shifted my perspective. He said, number one, diversification is a hedge against 136 00:11:11.840 --> 00:11:16.240 ignorance. It's a hedge against not knowing. The reason that he tells most people to do the SB 500 137 00:11:16.240 --> 00:11:19.040 because he realizes the vast majority of people don't know what they're doing. And so the best and 138 00:11:19.040 --> 00:11:23.360 safest thing they can do is just invest in everything and just bet on the stock market overall. Just 139 00:11:23.360 --> 00:11:27.200 bet on the economy growing over time. But you're betting on the stock market, you're really betting on 140 00:11:27.200 --> 00:11:30.880 a country. You're betting that this country or even the world, because many of the companies in the 141 00:11:30.880 --> 00:11:35.600 top 500 are global, just that the world will grow. That's all you're doing. The second thing that he 142 00:11:35.600 --> 00:11:40.240 said is that it's only risky when you don't know what you're doing. And so if you understand the 143 00:11:40.320 --> 00:11:45.120 variables and it's funny because as I've gone through this deal, I told the guys that imagine you 144 00:11:45.120 --> 00:11:49.120 have unlimited capital. I'm willing to write basically a blank check for you if these are the 145 00:11:49.120 --> 00:11:54.880 economics of the deal. And he said, awesome. And I only feel comfortable with that because I know 146 00:11:54.880 --> 00:11:58.800 where the bodies are buried. I know what risks to look for. I know what the upside would do. I know 147 00:11:58.800 --> 00:12:03.200 how I'm going to add value to this deal. But in a real estate department building, it's not my game. 148 00:12:03.920 --> 00:12:08.560 And so I feel so much more comfortable writing an enormous check because it's a game that I know. 149 00:12:08.560 --> 00:12:13.840 When I write that circle on the table, for me, it's all business. And so I will be 150 00:12:13.840 --> 00:12:18.320 divesting from the very small percentage of my net worth that's in real estate. I will hold 151 00:12:18.320 --> 00:12:22.240 the equities that I have in ETFs and everything else that I have goes straight into treasuries. 152 00:12:22.240 --> 00:12:26.880 And then when big deals come, I plow it into the deal. And then I repay back my war chest. 153 00:12:26.880 --> 00:12:31.440 War chest goes back up, plow it into another deal, repay back the war chest, plow it into another 154 00:12:31.440 --> 00:12:36.320 deal. That is the investment strategy that I am following. And the reason this is so important 155 00:12:36.320 --> 00:12:40.800 is that in the economy today, you have to do the things you know. There's a lot of risk out there 156 00:12:40.800 --> 00:12:48.640 right now. And so if you're not sure, I would say, hold and figure out a game that you understand. 157 00:12:49.520 --> 00:12:54.320 Because then you don't have to feel like you're betting because that's what all I felt like I was 158 00:12:54.320 --> 00:12:58.160 doing. I felt like I was betting on people and trying to like see between the lines like, do I trust 159 00:12:58.160 --> 00:13:03.840 this person or not just this person? Fuck that. Find something you know. Go all in on that one thing. 160 00:13:04.560 --> 00:13:10.240 And this is, it's funny because my investment strategy after all of this time has gone completely 161 00:13:10.240 --> 00:13:16.640 back to my business strategy, which is singular focus. Do the things you know. Do more. Do it better 162 00:13:16.640 --> 00:13:20.400 and keep doing that for an extended period of time. And it would be unreasonable that you don't win. 163 00:13:21.040 --> 00:13:26.160 So for example, you can go to Robinhood or whatever exchange you invest on. If you don't 164 00:13:26.160 --> 00:13:28.640 order to do that, just say like, how do I invest in stocks and you'll be able to download 165 00:13:28.640 --> 00:13:33.120 an app that does it? And you can search Treasurer or bonds and you will be able to go and buy a bond 166 00:13:33.120 --> 00:13:38.320 is not complicated. Now I will give you an advanced strategy though, because Mosination love you. 167 00:13:38.320 --> 00:13:43.040 So great strategy for buying bonds is that there are maturity dates, which means that what does the 168 00:13:43.040 --> 00:13:47.680 bond come do? So I was telling you earlier that liquidity matters a lot. So it's like, can I trade 169 00:13:47.680 --> 00:13:52.000 in and out of it? Now, bonds come due and when they are due, you're owed the money plus the interest. 170 00:13:52.000 --> 00:13:55.920 So what you gave them plus whatever interest was supposed to be owed on top of that. So one 171 00:13:55.920 --> 00:14:01.440 strategy just to buy them all at a certain maturity day and then wait. What we have opted to do is by 172 00:14:01.440 --> 00:14:06.960 6, 12, 18, 24 month bonds basically go one quarter, one quarter, one quarter, one quarter. And that 173 00:14:06.960 --> 00:14:11.680 means that every six months I get a pop back of cash plus interest and then I put it back to another 174 00:14:11.680 --> 00:14:16.560 24 months. And so it becomes this cash recycling machine in the meantime. So that is how I do it. 175 00:14:16.560 --> 00:14:21.520 You can still take loans against it. And if you're worried about the value of bonds going up and down, 176 00:14:21.520 --> 00:14:24.800 don't because if you do that strategy, you're just banking on the fact that you are going to get 177 00:14:24.800 --> 00:14:27.600 the money back. You don't even have to worry about trading them in and out. That's not you're not 178 00:14:27.600 --> 00:14:32.160 a bonds trader. It's not the point here. The point is you're putting somewhere safer than a banking 179 00:14:32.160 --> 00:14:35.600 out that will pay you money pretty much guaranteed unless the government goes under. In which case, 180 00:14:35.600 --> 00:14:39.520 we don't need to worry about the banks are definitely fucking to have it. Yeah. So if you're a dentist 181 00:14:39.520 --> 00:14:44.800 right at a certain point, you will have enough money if you're good at being a dentist and don't do 182 00:14:44.800 --> 00:14:48.880 this until you are good enough at being a dentist that you have a lot of extra money that you could go 183 00:14:48.880 --> 00:14:53.520 and buy another dental office. It's a business you know. And what's crazy is that you will get 184 00:14:53.520 --> 00:14:58.080 significantly higher returns on that purchase than you would on the stock market. So for example, 185 00:14:58.080 --> 00:15:03.440 if you wanted to buy a dental office that did a million dollars top line and $200,000 in bottom line. 186 00:15:03.440 --> 00:15:07.600 All right. Most of these professional services businesses you can get for a little bit of 187 00:15:07.600 --> 00:15:13.440 seller financing. You might only have to put I don't know one or two times down. Okay. Now if you put 188 00:15:13.440 --> 00:15:20.960 let's say one times down meaning you pay $400,000 for the business, $200,000 comes in seller financing 189 00:15:20.960 --> 00:15:26.080 from the person who's selling it to you. They let you pay debt off over time and then $200,000 190 00:15:26.080 --> 00:15:31.040 you put in their pocket. Okay. Well, you're one. You get your first $200,000 back, right? And then 191 00:15:31.040 --> 00:15:34.960 you're two. Let's say you pay off the rest of the debt. All right. Well, when you did that, 192 00:15:34.960 --> 00:15:38.960 you're three. You make another $200,000. So your rate of return there, and this is me doing back 193 00:15:38.960 --> 00:15:44.000 from napkin is basically like 33, 33, 33. So compared to the stock market, et cetera, you're going to 194 00:15:44.000 --> 00:15:49.600 do way better. Now if you know the business, that's just assuming it stays the same. But if you're 195 00:15:49.600 --> 00:15:53.120 better at business than the other dentist is, right? Because that's maybe why you're buying the 196 00:15:53.120 --> 00:15:57.520 business, then you might be able to overnight double that. And then all of a sudden, you're one 197 00:15:57.520 --> 00:16:04.000 you pay back everything and you're two, you make $400, right? Versus your $200. So now on a two-year 198 00:16:04.000 --> 00:16:09.200 basis, you already doubled your money in two years. And here's what's even crazier. You doubled your 199 00:16:09.200 --> 00:16:15.520 money on a cash basis. But now you own your dental practice plus their dental practice. And the 200 00:16:15.520 --> 00:16:20.720 combined value of those things is even higher than either of those individually. And you still own 201 00:16:20.720 --> 00:16:25.760 those. And so your total net worth based on the equity value of those companies has grown tax 202 00:16:25.760 --> 00:16:30.080 free this whole time. And you already put the cash back in your pocket. That's where you get 203 00:16:30.080 --> 00:16:36.480 competitive advantages of knowing the game you're in. So if you're like, well, Alex, I don't know 204 00:16:36.480 --> 00:16:42.400 a ton about business. Cool. If you recall, I went through three steps of my investing phase. 205 00:16:42.400 --> 00:16:45.840 All right. So the first one was investing in you, right? Investing and increasing your 206 00:16:45.840 --> 00:16:49.680 skill set, which is later going to be compounded because we're talking about leverage all the time, 207 00:16:49.680 --> 00:16:53.440 how to get more for what I put in. You're going to invest in a skill set. And then when you get 208 00:16:53.440 --> 00:16:57.200 better at it, you might end up starting doing deals only around that stack of skills that you 209 00:16:57.200 --> 00:17:02.800 acquired. But phase one, learn shit. Phase two, when you have earnings, but not enough to really 210 00:17:02.800 --> 00:17:08.080 get into the big investing world, you can plow it into the S&P and diversify risk because you still 211 00:17:08.080 --> 00:17:12.000 don't know what you're doing yet. You still have cash flow in access to what you can reinvest 212 00:17:12.000 --> 00:17:16.560 in your in your education, but you still not like a super G yet, right? At investing. I'm saying, 213 00:17:16.560 --> 00:17:21.600 I am a given my point. All right. The third phase is, okay, I'm making so much money from the game 214 00:17:21.600 --> 00:17:29.200 I'm in that it makes more sense and it's less risky for me to do more of this game than the stock 215 00:17:29.200 --> 00:17:34.080 market. And then that is where you build the crazy wall. And so that's what I would consider to be 216 00:17:34.160 --> 00:17:39.280 the three step. Step one, invest in you, step two, invest excess in indexes, basically to wait 217 00:17:39.280 --> 00:17:43.200 as a holding pattern, keep stockpiling the war chest up. And then when you feel like you're good 218 00:17:43.200 --> 00:17:48.640 enough at the game, your main game, then you have the stockpile and you can deploy it. And then 219 00:17:48.640 --> 00:17:52.160 that starts the compounding machine. And so when you're like, I'm not sure if I'm getting the leverage 220 00:17:52.160 --> 00:17:56.160 I need on the skills I'm learning right now, that's not the point right now. You're learning this 221 00:17:56.160 --> 00:18:04.240 shit. So that later you can lever the crap out of it in conjunction with capital and the new blow-up.