And welcome everybody to another update.
I'm Adam. Sorry.
And as always I want to, thank you very much for being here.
Today's guest on Smart money, circle is Zane Jaffer.
Who is a lifelong entrepreneur. He started his first Venture.
As a teenager. He co-founded mobile advertising
startup vangel, which was acquired by Blackstone in 2019
for almost 800 million. Congratulations.
And that is a huge feat. And shortly afterward.
He started Zane Ventures, which is his family office and he
invests in a diverse portfolio of real estate investment.
Other things and he's currently a partner at Bluefield Capital
Zane. Welcome to the show.
Thank you so much for having me on here.
Thank you for being here. So then I was like to begin.
Can you tell us how you got started in the business and a
little about you and your background?
Yeah, when you hear headlines like a big acquisition for
almost 800 million, it's easy to think of it as an overnight
success. Definitely not.
I think when you said as a teenager, absolutely, it took
years and years of just banging my head against the wall.
So I grew up in a poor family. Emily in the UK, parents are
immigrants and I stayed out of trouble by building websites and
I kept trying to make money over and over again.
And sometimes it worked often. It wasn't very scalable.
I'd be running my own agency, building websites for others,
doing SEO Consulting, whatever you have to do, just to hustle
and make some money. And I would say failure after
failure. After failure, right to the
point where you just I have no hope you, you know, the Lost Art
of prior to the one that was very successful and did with one
of the other co-founders embezzling money.
And, you know, you know, I remember that moment.
It was very dark and I London office, tiny office.
And I was just scratch. I'd finished.
My University was during the credit Crunch, and they were
just all these papers on the floor and me, and my, the
co-founder, ER, we're looking at all these papers.
And these are all like, really All documents.
And we were just thinking, can it get worse than this?
You know, we'll all our money's gone and it just sucks.
But we remember that night. And when I looked at each other,
like, my work, what kind of fight through this, you know, I
think we need to cut our losses. Let's just, let's just have the
guys, settle the lawsuit and passed a little bit, and let's
go on to the next thing. And wow, you know, it wasn't an
overnight either. It was like, pitching VCS and
getting rejected and we just hustled.
Somehow we convinced a few people to take a chance and ask
me raise two million dollars and we moved to the u.s.
From the UK and then we raise 20, you know, in total 25
million and business was off right started with no Revenue.
Then 150k in the first year, 15 million the second year, 56
million, the third year a hundred and something that you
know fourth year and just kept growing until you know, we
exited the business and it was a wonderful lover wild ride and it
was very tough. And you know those stats that
true nine, out of ten, Pounders will fail and fail, doesn't
literally mean go to 0, but fail is in.
They won't make more, they'd be better off.
Just working a normal job. Right.
One out of ten is quite exciting still right string and you'll
eventually hit it. Are you familiar to the in with
the power law distribution versus a normal bell curve
distribution? Unfortunately.
Yes. I know.
I know I messed a lot of startups UNAM, you know.
How it is. Yeah, from case.
Our guests aren't familiar. There's a normal bell curve to
give like a kids in classrooms. I'm get a some get B's most good
C's and D's and F's. But a power law distribution
would be lets say, for example, number of people in the city,
you know, you can't take the average city in America has x
amount, you know, 200,000 residents, when you have the
majority, you know, maybe 10 or 20 cities, have millions and
millions and then the others have hundreds of thousands or
less than that. So, if you're going to build a
water system, or police system, for the average city, you can't
say, let's build it for 200,000 people.
He averaged city has 200,000 people when you've got cities
like New York and Miami and Chicago.
La so on and so forth that have millions and millions.
So that's a power law distribution.
And the same thing is true with startups, or with trading it.
I see that Zane what you're saying and that experience of
just plowing through and overcoming adversity in so many
businesses and in, in any Performance Based business for
that matter, to Tom, Brady had a good line to where he was
getting crushed in one of the Super Bowls and he went to the
halftime. He had the biggest, you know,
deficit ever and anyone ever had here.
This team is like listen, we have one of two options, either.
We lose. We got history as the worst loss
ever, or we can have the greatest comeback ever.
He had the greatest comeback in one that Super Bowl.
So what you're saying really, really ring.
So true. Can you tell us a little now
that you've hit it, you made it big, you know, what, the startup
you get the power law distribution.
Now, you have your own family office and you have glue field.
Capital that you work with. What is your investment
strategy? What do you look for and speak
about that a little bit, please, you know, an incline.
It's like today. I still feel like I'm figuring
it out. And I think that's part of being
a good money manager. You have to be nimble, but
overall I wanted a well-diversified portfolio.
You've got to realize where I came from.
I came from situation where didn't have much money growing
up? Didn't want to screw it up.
Find myself having a hundred percent of my net with
concentrated. Liquid startup.
So that's scary. Because it's on paper.
And, you know, you know, you're going out for dinner with
partners and you can barely make The, you know, you can barely
pay the bill and you're nervous about that and your paper,
you'll your with just a crazy amount of money.
And so those, this magic trick, I wanted to pull off the magic
trick was, how do I take this money that's on paper and turn
into something real? That's in the bank account that
I can access them as much more liquid.
So that that turning to, you know, a big exercise and I
decided to create an investment strategy focused on the idea
that ultimately, I made this money because I want to To, you
know, enjoy the rest of my life. I will probably do another
company and I'm still working pretty hard, but I want to live
a lifestyle and enjoy that lifestyle, but I want to see my
wealth increase. So the idea is you live on a
fraction of your interest. The idea is that you've got all
this principle Capital. If you can just figure out how
to live below, your means and that's a relative term, right?
When you take out some money out of the portfolio, but it's not
so much money that it strangles growth in.
That's so little money that it's a fraction of Interest, right?
Then the magic happens. If you live in a fraction of
Interest, no matter what happens, as long as you stick to
that budget the rest of your portfolio, should overtime grow
it? So that meant building
diversification and there's many models of diversification.
You know, I came up with a model and I ultimately ended up
changing it, but overall on paper.
It looks like 50% stocks with a little bit of bond, exposure of
them, selling bonds because of, you know, the market right now
and probably rebalancing into other assets and then probably
heavier than others. And some people might go heavier
than others, when they're young onto stocks.
I have a lot of stocks, but I've also gone having into
Alternatives. So if it's 50% stocks and bonds
little bit of cash, the rest of it is basically Alternatives.
And I consider alternatives tools to be real estate, which
is a big chunk. So 50% stocks and bonds 25%.
Real estate. And another 25% other stuff that
other stuff is Maybe. Sir, private Equity, 10%
startup, and venture capital, and then maybe how the 5%, what
I call the anti portfolio things that just don't make sense.
It can be, cryptocurrency could be any of these metaphors.
It could be, you know, just stuff that you're going to just
swing for the fences with, it's not startups for some people
that might be swing for the fences.
I mean, I'm tired portfolio is something that I just want to
invest in because you know, I might not understand it, but I
don't want to miss out in case it's big and it really, you
know, it seems to pay off in the sand.
Environment today, where things like crypto of come out of
nowhere. So, you know, ultimately what
happens is you've got some of these.
Some of these will kick out cash flow like real estate and some
of these might be gross areas like private Equity or startups
that you can tap into. But the idea is, you know, this
will change over time. Startups, will become larger and
larger on my portfolio. Potentially just because, you
know, they'll be generating high are ours and you want to sort of
rebalance carefully over time and I think you also want and I
might be a typical to most found.
Is and entrepreneurs because I think I'm a bit conservative
even in the types of, you know, real estate and stocks that I
own a lot of its income focused and I care about that income.
The idea of compounding your wealth.
I don't want to be 100% in Gross and I can scratch that itch like
to say, by doing things. I'm passionate about, I've got a
foundation where I contribute to causes often anonymously, but
sometimes more publicly as well. And other things I just like and
enjoy, like, startups. That gives me such a buzz, a lot
of benefits that sort of my investment strategy.
Interesting. So Zane.
How do you handle risk? And then what mistakes you see,
people make with respect to risk management.
So risk is also relative time and one fallacy is to assume
that the expected return is proportional to the risk of
taking. It's not true at all.
Right. This is sort of, I think a Wall
Street mistake, a lot of veterans come in and assume.
Well if that's got a high investment return projection
than the must be high risk, that's not true at all.
In my view. It's more complicated than that,
but Ultimately, I think I reared towards lower risk when it comes
to traditional assets, and I try to just find good money managers
or other, L other GPS. So there's a term here and LPS
when you invest in someone else, to manage your money for you.
And a GP, a general partner is someone who invests other
people's money. I do it.
Go to both but I came to realize.
Trust experts. Find good managers.
I had a really hard time with the idea that I've made.
All this money. I'm not going to give it to
someone else, and I'm going to pay.
All these fees. I'm going to pay management
fees. I'm going to give a promote or
carry on me, you know. Returns.
They make me then you realize, wait this person day in day out,
just is an expert in their narrow field, right?
They're going to do way better than I can do.
So, let me make sense to find great stock managers or great
one managers or whatever. I at this point.
I have well over 50 different General Partners who manage
different aspects of my portfolio that allows me then to
invest more actively. Things that I enjoy, right?
And if I'm going to invest other people's money and I do that
through beautiful Capital, which is a different entity.
It's a private Equity Fund. Hundreds of millions of dollars
under management, you know billions of dollars worth of
real estate. I'm a, you know, a general
partner, there manage other people's money, alongside a
great team. That's something I do day in day
out and I'm an expert, you know, buying real estate and so is the
to, and investing in startups or something.
I do day, they are, however, I've made a lot of mistakes.
There are things that, you know, you wanted a date.
Trading and you're going to get your butt handed to you.
It's better to find a great hedge fund.
Will, you know, you want to pick in me?
I thought I'd be good at this. Picking tech stocks.
I'd much rather find a good manager and, you know, II use if
we might want to talk about this, you know, a range of
managers. And I'm a big fan of Kathy
Woods, just being beaten, you know, in the market and just has
developed sort of a I mean, you know, Arc, which is an ark
invest as an ETF, but you can invest directly.
She's like the Venture capitalists of stock picking and
she invests in very, very high gross tech stocks were valuation
and Bottoms Up analysis, not the primary way of doing it.
And I returns would be awful this year, but I've been really
amazing over the longer term Horizon.
So I really like that opportunity now because the
markets a lot and I don't have time.
Here's what happened. When you have all this money,
you start, you know, you should see my mobile phone.
I use the Yahoo. Apple stock thing and it's just
just, you know, every day I wake up and I'm looking at it and I
got to stop doing this. Yeah, you know your friends will
start texting you. Oh, you know lemonade is down
right now. Uber is down or you know who
Burr or Airbnb, just announced this.
You should do invest and you get carried away before.
You know it you're spending a lot of your time going to rub it
in a little going on platforms and making trades and you need
to get away from that. That's Supplemental energy
before you know it you're checking your stock.
So that's why I wanted to go and find great managers who I
trusted to do things and I gave an example of Kathy was in the
reason I gave a and jobless. I feel like I didn't like the
current index funds and money managers for attack stopped.
I like Turkish. She picked Tesla very early on
if she's got some really crazy fisa system.
She publishes his, you know, for the public and very excited by
that. I thought, you know what, I like
the stock. She's picking and she's training
for me. Right?
She's not just picking stocks and leaving them short trade,
when there's opportunities when stocks are down and I sort of
did experiment, but some money with her fun.
This is a organization strategy. So that's sort of a, it's a
mirrors, the public ETF that it's a lot cheaper to invest
directly with her and her friend to text me and like okay, that's
interesting and I look at what Kathy with his already trading
that position. That's good.
Now I can start deleting those. Starts off my watch list and I
can focus on things that actually add value.
So the idea what I'm coming back to here in a full circle is you
want to not be a slave to your money because often the more
money you have, you become a slave to it.
You want to let your money work for you.
By trusting people who are aligned with your vision, the
way you would do things, which frees you time to do, things
that you're passionate about that you enjoy.
In my case. It's investing in other Founders
and focusing more on, you know, value-add real estate
opportunities and a lot less. A saint, you know, oh, look.
Look, the stock is down today, and that stocks up today.
And, you know, let me make a quick option trade, which is
also very addicting, you know, yes.
Yeah. Actually is and what you're
saying, Rings? Really, really true.
I just published a new book. It's called psychological
analysis. It's number one on Amazon.
It came out three weeks ago. It's been number one every day
since and in it, I talk about exactly what you're talking
about. The mental capital and physical
capital, and how if you sit there and look at every tick,
you know, when you have bronchitis or any other kind of
itís, I call it take a situs way like My goodness, you just like
sucked into you and they like your eyes next, you know, the
whole day goes by and you've lost money and said what just
happened and nothing happened. There's no productivity.
So, I smelled what you cooking 1000%.
So, you know, it doesn't just apply to stock picking or, you
know, transactional or, you know, automated trading or
whatever, right? Could be Commodities crypto,
anything. It also applies to any
investment activity, you do and sometimes active investment or
actual operation. So I start now.
Now, trying to build a portfolio of real estate, you know,
single-family homes, hard money, construction.
Lending. I tried to build out portfolios
of multifamily buildings. I personally own hundreds, I
think, for 500 units myself that in multifamily, and I also gave
some to other GPS who do this for a living.
And there I am taking calls from tenants because the plumbing
isn't working. I'm having to figure out, I'm
going to pay these taxes are going to file my K 1s.
Now I've got, I've got a crazy amount of paperwork.
And and when all is said and done, You realize?
Wait. I made how much right?
I mean X and I gave money to these other people and they made
why they make more than me. How is this possible?
What if I do this myself and I'm really actively involved.
I'm going to be able to save money on fees and it's such a
fallacy just trust experts and let them do it for you and
decide what you're going to do and be the best in the world of
that. And if you're not like I
certainly have to admit, you know, it took me a while to
understand real estate. So I partnered with Other
people. And now I've got a team at
Bluford where you can learn from, and there's no shame in
doing that often. There's this ego.
Like I had an ego, you know, I built a company from scratch.
No one believed in the everyone turned me down right now.
I built this company from nothing to invest the store.
I wouldn't be able to, you know, even generate a million dollars
a year. I was generating a million
dollars a day in Revenue. Right?
Right, you know, you this thing will never suffer 10 million
will. How about almost a billion,
right? So you develop this ego and as a
CEO, eventually, you're a stop, the song for others.
Right, you don't strain Yourself by the estimate, you make
decisions and a lot of people. The very people who tell you,
when you're running a company, you're going to fail in the
media or the industry are the very people who are glorifying.
You. Why are you were such an
innovator, such a disruptor. So you start to think I can do
this myself. And that is a learning curve
because when I sold my company, I thought I can do everything
myself and then you realize no. Don't try to do everything
yourself. Find experts instead.
Yeah, and pay them. Well, that's really really smart
if they weren't providing value. They wouldn't be in Business,
right. So clearly they're providing
value. And yeah, I fully fully get that
too. Okay.
So the way that you would handle risk is by diversifying your
portfolio. Number one.
Number two, making sure that you allocate to experts, pay them
well and let them do their job. Almost like, get out of their
way. And then the third part, if I
understand you correctly is to focus on the highest Roi
activities that you can possibly do, like the top 1% Forget.
The 80/20 rule is like 90 91, right?
I have that in the book to where it's like just focus on the
stuff. Leaves, most critical, highest
level, highest Roi activities, and almost Outsource the rest if
at all possible, is that more or less?
What you're saying, more or less.
I'd adopt that last part to say sometimes you want to focus on
the best Roi activities are. Oh I can only be generated in
the area where deep expertise is needed.
So bringing someone who's an expert in that area instead,
folks members that you love and you enjoy and it's more than
about money itself. So for me I can invest and I've
invested I don't know how many, maybe 10 different venture.
It'll funds might just because I know those Reese's maybe some of
them invested in me. And I love that but that could I
could be done. I can be done in the say.
Okay? Here's my exposure to startups.
I invest in 10, BC funds, know what do I do?
I go and invest in startups directly as well because I love
it. And the truth is maybe these VCS
will outperform me because, you know, these species have been
doing this for a long time and I've generated good are, you
know, they've got a good platform here.
I am investing in startups myself.
Maybe my irr might not There is but I love what I'm doing.
I just love talking to Founders. And for me, that is the best Roi
that every time I invest in a start-up, I want to meet the
founder and talk to them. I don't like the idea that I'm
just passively investing in a farm and they're doing a lot of
that right? You'll make more money.
Probably, I'm probably not. So my portfolio is doing really
well and the powerless Works Investments.
You make the crazier, the returns there are sometimes, but
do things you enjoy as well. Yeah.
I meant Roi is not just money, but overall, like, what do you
enjoy the best? What's the best route?
Turn on your time. So yeah, I'd love that to thank
you for clarifying. Okay, what are some Timeless
lessons? You've learned along the way.
Like, if you go back to when you were 20 or 30 games started,
what advice would you give your former self or share with the
audience? And there's a lot, feel free to
go as much as you want. So if you were running back a
little bit to the start of this podcast, I talked about my story
and, and many times success comes right?
When you're about to give up when you feel like there's no
hope left. I gave that analogy that Dark
room we were in after, you know, trying to Sue this other guy in
cult, the state of my money and paper after paper on the floor
and you're like, how we're going to get through this.
We don't have a company anymore. Just when you feel like quitting
that something is a break and that's when your mind somehow
creates opportunities and it's almost like a test from the
universe, right? I feel like if you really want
it, you have to prove you're hungry for it right now.
That's going to give you that metal.
That's Strength, that armor, two poles or anything.
So, that's one success comes right.
At the point where you feel like you're about to quit, and maybe
it might be, you know, after you've broken your leg of that
marathon, and you still crawling beyond the Finish Line, it comes
around that time. Okay.
So have faith in that. Then, the other thing is, The
and I think this is unique perspective, I can offer because
I can say, a lot of generic stuff.
But I want to say something I think is more, you know, some
wisdom. I've learned right, being a
founder and being an investor are completely different skill
sets, right? And very powerful statement.
Yeah, and even being one type of investor that doesn't
necessarily translate to a different type of investment
asset class. So given, all right.
I run a venture capital fund as well.
Will we? Invest in the very narrow
vertical, which is prop tag, and I also invest in real estate.
Now, the way you look at investment opportunities need to
be totally different. And even as a Founder to us the
same founder and a VC, look at World in similar ways.
So what I'm talking to Founders, I really am betting on the
Parson, everything. They're telling me, that's what
I put a lot of weight on. You do not want to take that
same approach in real estate. If you're buying real estate and
you're believing what the burglars telling you, you
believe it. What the cell is telling you,
your host, right? Same in the same way.
You need to look at those. Spreadsheets and you need to do
a lot of modeling and you need to look at cops.
That is a useless activity when it comes to startups and found
what you're investing in startups spreadsheet.
So useless Beyond understanding the assumptions.
It doesn't really matter what they're projecting for you,
three, four, five. You just want to understand or
even you do for that matter. You just want to understand what
are their assumptions? What are the drivers of growth
is the market big? But yeah, it doesn't really
matter. I bet it on the person, right?
So I believed a little bit too. Much initially, you know, in the
vision of what the Realtors telling you that you can do in
this property and how you can turn this into an amazing, you
know, vacation rental and, you know, telling you emotionally,
and you got to be careful. If someone knows you have money
or you're calling from a zip code, like California, yeah,
falling out of state. Like I was calling out of state
taxes, and all those Brokers, love it.
When the 650 full 15 area code is ringing up the presenter.
I am looking to diversify and I live in.
In value. Oh, please come over because of
great off Market opportunities for you.
Where's Betty 40% more? And so you learn that way, that
probably brings you to another one and this is a really sad
piece of advice, really sad. Because I'm a trusting guy.
I'm a founder of ha and I like to view the world through these
rose-tinted spectacles and I like to give everyone a chance,
but you better be very very You're gonna have to go double
time. People are trying to rip you off
constantly. There's a whole Shadow industry
of these unqualified Brokers and broker-dealers to on qualified
and bring opportunities to sell you snake.
Oil will try to be, you know, appeal to emotion and I've seen
this, you know, if you run if you're high-net-worth very ultra
high net worth individual or you want a family office.
You're bombarded with people offering opportunity after
opportunity and eventually you Develop the psyche spider-sense.
You have to get screwed, a little bit to develop it.
But you're like, you know, it doesn't smell right right?
Easiest, you know, I'll give an example.
I'm not going to name names here.
But you got a lot of people that talk a lot of talk.
Right? Right.
And they'll come to another like, you know, interested in
buying a property and there's this whole thing in real estate
where you can put a deal on the contract without actually using
any money. You can just tie it up, right?
And one thing you always do as an investor is reference, check
the hell out of everyone, I do that.
Even with an investigator founder or whether I'm investing
in real estate or, you know, a money manager reference people.
I wonder if someone is sort of and I've had this at that, this
happen a few times and get insulted.
What were you trying to reference me for?
You know, I'm a respected person.
I've done this, I've done that. I can close Faust.
Well, sir, if you can't, well, I need is a few references.
You know, I'm glad to give references to people when they
were with me because I want them to know, right?
Do what I say, and I had one guy.
Recently, I wanted to put some of my properties under contract
and I was like, oh, great. Well, you've done all of this.
Just people who introduced me to a few other sellers.
So you've, you know, done business with.
Oh, no, I can't do that. I like to keep things
confidential. And you know when you dig in
deeper you like. Whoa, this doesn't feel, right.
So if you're new to money, if you get rich quickly and you
haven't built that, you know, muscle, you're going to be
tempted to make a lot of decisions and trust people don't
watch only. If it is too good to be true, it
often is referenced. Eight people and if someone ever
puts up a red Sun of a, put some resistance to being referenced
walk the hell away, obviously, right.
But away, when you, when you do the reference, the number one
question you start was very, how long have you do business with
that person? How do you know them?
The amount of times I've heard what?
You know, how I know him. I've known him for.
What? Have you known him?
What, you know, he's my brother-in-law.
Exactly. But forever is my cousin.
You're like, okay, this on a biased reference, right?
What about it's difference at all.
And also not noticed. Character reference because
that's hard to kind of validate go deeper and reference things
like tell me about the transaction.
How long did it take to close? What was the process?
Like go really deep and detailed and then you'll realize that
okay, you know, this isn't as clean as you thought it was
because when you enter a contract, even if you're selling
a company, for example, right? And I had this happen with some
large tech companies, some very large tech companies, wasted our
time to, they pretending, they were interested in acquiring,
Iran us and wasted our time, you know, and I'm they're distracted
or even feces can do this to. You really want to make sure
that once you have all the leverage before you enter into a
contract, like negotiating with the Chinese.
For example, I did a lot of business with Chinese and over
there, you know, we may try to reach a huge revenue streams,
second largest revenue stream for our business.
But in China, it feels like the negotiations.
Happen often you sign the contract, not before.
Oh, wow. And so, this, this phenomena is
dangerous, because once you're on the clock, Franklin people
start to trade terms of you. You've lost your leverage.
And then you sort of, as they say become pregnant, you know,
you're pregnant now, with the still, you told your team,
you're going to do to do, especially if you're selling a
company, you have to give concessions and the dualism.
We thought it was so do your due diligence before you enter into
a contract? That's a really, really really
great set of lessons. And it's funny as they miss
their first time Evers meeting you're speaking.
But there's so many parallels with what you're saying in your
experience is what I've observed and even wrote about in the
book. To its I have some He called the
one second rule where you can give up almost one proverbial
second later. Boom.
That we go your way and hit whether you own a stock, and you
can't take it anymore and you sell it.
And then right away, it goes up afterwards and you're laughing,
or you own a business, and you can't take the pressure anymore.
You give up and then had you just fell for that one more
proverbial, second. It would have worked in gone,
and then same with your other points, to the reference,
checking is so critical and I love these lessons.
These are really, really, really good and it's amazing.
How in the book. I say winners win?
Three that one line in the book and what you were talking about
to where it's like, okay, you're going to do something that you
get that smell tested. That six the spidey sense or
just watch Spider-Man with my kids, the other day and you get
that spidey sense. Something doesn't make sense.
Here. Something doesn't smell right
and you walk away. So Warren Buffett has something
called the circle of competence and he goes, I just know what I
know and that's it. You know, he missed the 2098
2000 Tech bomb bubble and he said, it's okay.
It's not my circle confidence. So you master the art of saying,
no is what I say. And just look for that one.
Gem to say yes to but wow, it's really it's almost like the same
language but two parallel different stories and here's the
intersection of them. But yeah, winners win, it's just
that simple. Okay, that's fantastic.
Those are a lot of great Timeless lessons.
Thank you for that. What about sometimes?
I want to add another Timeless lesson to trade time the train
and train the time. Okay, so try not to change the
way halfway through the process. Be be strong understanding
initial conviction, because you're often right sometimes
writes in investment memo. You must and I do that for, you
know, RVC Investments. That way, you can go back and
understand. Here's why I invested what my
thesis is. And the other thing I want to
depart is wisdom, especially as you know, this is a lot about
advice. In this particular podcast.
This is a very Tech Silicon Valley mindset, but I really
believe in it. It's not cutting your losses in
the windows as much as holding on for dear life.
Sometimes holding on and letting that thing, right?
Right? And the greatest, VCS have
understood this Sequoia Capital One and the best VC firms has
changed their investment Horizon.
And basically it will hold forever if they must because
once that thing starts to grow especially in start of that,
right? My god.
Wow, and the fact that some of these assets like real estate
and startups are not. Liquid is actually a blessing
because then you can't just go to Robin Hood and hit cell, you
know, your stock and you have to ignore it.
It can grow. I want it grows.
It can grow 10x, 100x. Thousand exceeding.
Some of these things and so holding onto your winners, were
those the public stock, whether it's real estate project to
whether it's a start-up holding on and just let him that thing
where I and sometimes holding on for a long time, you know, if
you if you held on throughout the Early times in the market,
so crypto our only asset you'd be much better off to training
in and out. Yeah, I couldn't agree with you
more. There's no question again in the
book of buffer cause of the Great American Tail wind or he
calls it. The American Tail wind.
Right. I called the Great American Tail
wind, just to make some new, make a little different, and
this is ho true if you just hold on to the winners, but let's
talk about the losers for a second because this next
questions about mistakes. What are sometimes mistakes?
You see people make, would you say doubling down and owning too
much of their losers? Or would you say, you know,
keeping those laws of smaller? How do you handle all that?
And what are some mistakes? You see people made?
I mean, it's time to emotions and there's this idea that I'm
buying this, because it's low. Wow, it's dropped even more.
Let me keep buying. Okay, instructed him.
Let me keep buying and eventually you will hold you end
up holding a falling knife and you actually have to be willing
to buy on the way up as much as you are on the way down.
Right dollar cost. Averaging is such a true
time-tested strategy when you're entering into an asset.
You just keep buying no matter what like I do that.
There's a few money managers who are dollar cost average into
even more than my initial and like, Kathy Woods Arc.
Right now. I don't care if to ETF or the
mom. If the thing is down, I started
investing around 120. It's not that at 78.
I don't care. I'm arresting every month.
Right? Right.
I see it. If the next two years, I get to
reduce my cost basis if it goes up who cares like it's supposed
to go up, just investing no matter what always be investing,
create sort of a system and it goes back earlier.
When I said you live a lifestyle, we live on the
fraction of your interest, right?
Well, so keep deploying the rest of it.
Always be deploying the plane, the plane.
You compounding beautiful. Just just beautiful.
Like what compounding can do for you?
It really is. It said it's the eighth wonder
of the world, right? Certainly is.
Yeah, in terms of other mistakes.
There's there's just so many mistakes.
You can make go make sure that investing doesn't take up your
life. Unless you're a professional
money manager, if you're on the lp side and you Investing with
someone else, trust them. I mean, trust the verify
obviously. Yeah, but don't micromanage.
And don't actually become a day trader because you will lose
ultimately, eventually, those hedge funds have a lot more
technology than you do. Yeah.
That's a lot of amateur mistakes me to I started, you know,
shorting the markets at some stage and trading in, and out of
stocks, and it was a mistake. Yeah, and don't do that.
It's it happens way too often. I always tell people, there's no
In areas that are day Traders, but there's many billionaires
that our investors. Yeah.
Exactly. Yeah even position Traders.
Okay. Fantastic, I guess the final
question I have for you is a name is what's the best piece of
advice? You'd like to share with the
audience? Like we've been piloting, a lot
of advice. Ultimately time is very
precious. You only live on this planet for
a fraction of its existence. So do something meaningful with
your life and your money, I've had a lot of people who have
common if said stuff like one day I want to help my parents
and I want to save up for their retirement and I want to
contribute to these social causes.
These are very Noble causes. Why are you waiting for a magic
number? I was working with someone who
said look when I reach 100 million dollars.
I'll be so much happier because I'll I'll be able to do XY and z
and I said, two things first. I've got well over $100.
My mother happy, right? Okay.
I'm still just as unhappy as I was before, you know?
Now, I want a billion even though it doesn't stop, right?
Just just know that, your Chute of mole will make you will never
make you happy. Secondly.
Why are you waiting? Here's what you do?
Okay, and this is advice for anyone who's waiting till they
reach a certain Milestone before they do something.
You know, here's what you do. Okay, whatever income you have
now just take 1% of that income and put it in the countinue.
If we are parrots, even if you're making only a thousand
dollars a month, in extra income, right?
Take 10 bucks and put it in that account and don't touch it.
Okay, right. Take another one percent for
other causes or whatever it is. You're saving up for and put
another 1% there. Just just keep the number
smaller one percent. Okay.
I'm glad you obsessively measure and you're like, hey last month
after ten bucks it I'm getting closer to his this Noble goal,
helping my parents. Fire, I'm just making this
example up. There could be so many right
now. It's 11 bucks.
Now. It's 12 bucks before, you know
it Wonder there's a million bucks in that account and you're
worth a hundred million dollars, but you're a hundred times
happier because you enjoy the process and you have your folks.
There's no traction than doing something than saying, you're
going to do it. I want to make a hundred million
dollars liquid. I'm then going to go with
million dollars to here and there, and I'm just start doing
it now, man. Just out buying it, and it will
eventually happen in your life. Enjoy the process.
So that's why I think advice that is actionable and it's just
amazing what you can do. Once once that once that's in
place. I did that to believe.
No one's amazing. Like, okay, this is growing.
This is growing. What I did do though is I dipped
into my savings a lot. It's like gambling.
When I didn't have much money. I started buying stocks and
trading and I kept losing money and that was really good lesson
for me. Because then once I lost like,
you know, I when I was CEO of the company, eventually I was
making hundreds thousands in salary, right, but I was only
seven weeks. You 200k right here.
I'd be like I'm going Dustin public stocks because I want to
make more money and I'd lose like everything.
Of course, good lesson because later on we had more great.
Your last like the screw-ups if anyone especially there's a lot
of investors are listening to this.
They're going to make mistakes, right?
It will probably come back from nothing after investing losing.
Its very, very depressing. When you work for a long time,
like a few years, you save this and you can blow it and like a
trade seriously. It's your backpack and Guys,
next time, I'm not going to make the same mistakes and also, this
was actually a really powerful Learning lesson.
Because when I have more wealth, when I have a thousand times
more often, this I will not make the same mistake and I will only
lose the fraction, you know, now I love that.
So, you're basically setting people creatures of habit,
right? So by doing that 1% or 2% or
whatever number you want, you're creating positive winning habits
and you're doing something right now to plan for the future.
So when the future comes almost like the slight Edge.
If you familiar with that book, it just take a little Little bit
every single time over time. It just you just work and it
wins. It's much better than just
saying. Wait until I get a million
dollars or a hundred million or some other arbitrary number that
you just picked randomly out of a hat.
And then once you get there, the number changes like you're
saying because it doesn't make you happy.
It's just material thing and that comes and goes, but that
happiness comes from within. So, okay.
I love this thing. So, I'm sorry, I'm gonna ask you
one more question here because I love picking your brain.
Let's talk about the psychology. Did when you had a shift.
You said you started with nothing like me.
Couldn't eat. I couldn't pay for bills and
dinner and I know exactly how that feels till this day.
And you shifted. You had a bunch, you had a lot
of success and you shifted the mindset.
Can you talk a little about you? A pessimist at the beginning or
will you optimistic at the beginning?
Were you unhappy early on? And now are you happy or are you
still unhappy? Can you speak to that a little
bit and let us know little about your Evolution from a mindset
standpoint and psychological standpoint?
If you don't mind, I think I was wildly optimistic, but I was
easily swayed by other people's opinions because I felt like
they knew something. I didn't know they were wiser
than me. A lot of pessimistic people and
this is the worst thing that can happen.
You have a hunch. You want to follow it.
Someone took you down from that ledge, right?
I think we're wrong. You're going to really resent if
you would have so much more. You should have a lot more
ownership in the decision. When you fail, you were wrong,
you own it. You pick up and you keep
swinging. It's not cool that you didn't
strain because someone else told you not to follow your God.
So, I started off very optimistic, but I was easily
swayed by the people whose views and opinions when I became
stubborn and I went to the other Spectrum where I don't listen to
anyone and I built my company like that, right?
And that is you're still optimistic, but you just don't
listen to other people. Sounds like, you know, and you
look at this, this pattern people that are in a high tech
company. Look at people like Elon Musk.
Those that we crazy things and they you know, it is the listen
really feels. That works very well when you
are the king and you know, short Empire and you run everything
but it doesn't work very well. Once you're not the king
anymore. It's not your Empire and you're
just managing money. Now at that point you really
need experts and you need you you need to remain optimistic,
but you need to be balanced. And so really, there are certain
times in your life where you need a certain mindset and you
can't try to have this. This one fits all approach.
I'm not here to say to your listeners be balanced, right?
And everything objectively. No, do not.
Look at where you are in your journey and decide.
If I don't do this, while I resent it.
I think I want to do this and I want ownership in this decision,
and I'm playing a game here, right?
Who knows what's going to happen, but I got to swing, so
decide what the strategy needs to be for this particular round
or stage that you're in. The stage I'm in.
Now. I absolutely need to listen to
others because when you have a lot of money you can easily blow
it. Oh, yeah, so you need God rails
for yourself. Like I have an investment
committee for my own family office.
I have my closest trusted advisors and I will make sure
that I try to stay true to my portfolio.
Allocation. I was just I'm someone who loves
to double down on things when they work.
I mean I was a founder and unfortunately when you have a
hundred percent of your net worth and you know stock and
when you've been Broke as hell. You never want to go back there,
but you're not uncomfortable anymore.
You're like I can do a stress. I can't believe this, right?
I can I can imagine myself wanting to keep investing in if
I do another company to put like a hundred million dollars into
it. Right?
How many Reckless instead, you know, I can fund it to a point
but no more than a certain percent of my net worth and then
I want to bring another people's money, of course and very
successful. People actually don't just put
their money and they bring other people's money on top as
Leverage. Humming a money manager means
you put some of your own skin in the game, but you're bringing
leverage with others, you know, just bringing other people's
money, you're bringing in their expertise, their advice.
This doesn't apply to a company. It could be like, you know,
invest in real estate. And I raise money from other
people, too. I raise money from Brokers from
other, you know, real estate people from other other high net
with people. This is a network of people that
can help me be better to. So that's also another mindset
shift. But when you do that, you know,
you have to be willing to take advice.
And also when you manage other people's money, you have to
manage it differently than you manage your own money.
And I know it's weird to say that it's true because some
people say, well, why you should manage your money or other
people's money. Exactly.
Like your own right there. Saying no food for listeners.
Who can't see you on video here, right?
Oh, your lip syncing that. I'm okay, losing my money.
I'm not okay, with using someone else's money.
Unfortunately, that means you're not willing to take as many
risks. I frankly, I just cannot I
cannot remember when I raised 25 million dollars in venture
capital. Is it screwed up my psychology
when I raised my first friends and family around hundreds of
thousands of dollars from friends and family, not having
those tens of thousands dollars actually.
Right, at the beginning. I couldn't sleep.
It's like, oh my God. What if I fail?
This is a lot of money for that person, right?
So and I know like, when you're taking money from people, like
you've got to realize you're just part of the diversity.
Suffocation. They want you to take risk.
I still have a really hard time with that.
No, I don't want a fight. It's a lot of Burden management,
people's money. Other people are like that.
Other people have it, and take your money and go make crazy
bets me. I don't know.
It's the way I am, is probably a weakness, doesn't make you the
best money manager, but I have integrity and I would rather
lose my money and someone else I fully understand that and I
smell what you cook in there. 100%.
Well, Zane is have been absolutely fantastic.
I can't thank you enough. This has been ton of light of
Timeless lessons and and a ton of advice that people can watch
and re-watch and benefit from a tremendously.
So thank you kindly for coming on the show, and hopefully we'll
have you back on again soon. Great.
Thank you for having me on to Thanksgiving.