00:00

What was the original fee.

What was the original fee.

00:02

And what was the requirements?

And what was the requirements?

00:04

The original

The original

00:05

organization twenty years ago,

organization twenty years ago,

00:08

started with people who had created net worth of between ten million and a hundred million

started with people who had created net worth of between ten million and a hundred million

00:15

and very quickly

and very quickly

00:16

the top end exploded with success.

the top end exploded with success.

00:20

So it grew to a billion dollars. And,

So it grew to a billion dollars. And,

00:24

more recently, we've realize that our focus

more recently, we've realize that our focus

00:28

is on members

is on members

00:30

between twenty million and a billion

between twenty million and a billion

00:32

and what I was gonna say is the main difference between

and what I was gonna say is the main difference between

00:36

Vistage and YPO and Tiger twenty one,

Vistage and YPO and Tiger twenty one,

00:40

is the average net worth of Vistage and YPO members is probably maybe a tenth of that or fifth of that of Tiger are

is the average net worth of Vistage and YPO members is probably maybe a tenth of that or fifth of that of Tiger are

00:57

How long ago, did you start the company?

How long ago, did you start the company?

01:00

About twenty one or twenty two years ago at this point. What was the original idea?

About twenty one or twenty two years ago at this point. What was the original idea?

01:06

It's really a simple idea.

It's really a simple idea.

01:08

If you're an incredibly

If you're an incredibly

01:10

successful entrepreneur,

successful entrepreneur,

01:12

Could be building a business for ten years, twenty years, thirty years,

Could be building a business for ten years, twenty years, thirty years,

01:16

and then you sell the business.

and then you sell the business.

01:19

You think that it's the magic moment when you sell it. But actually, what happens

You think that it's the magic moment when you sell it. But actually, what happens

01:25

is the day after you sell it, You have a lot of money, but you might be

is the day after you sell it, You have a lot of money, but you might be

01:30

alone. You might might have an assistant, but you don't have a thousand employees.

alone. You might might have an assistant, but you don't have a thousand employees.

01:34

You don't have anybody laughing at your jokes anymore. You might even have to get your own coffee, and everybody around you thinks that you're wealthy

You don't have anybody laughing at your jokes anymore. You might even have to get your own coffee, and everybody around you thinks that you're wealthy

01:43

and successful,

and successful,

01:44

but you've lost the platform

but you've lost the platform

01:47

that allowed you to feel

that allowed you to feel

01:49

successful.

successful.

01:50

And all of a sudden, you're back at a new point. And the number one challenge that you have is to be a wealth preserver

And all of a sudden, you're back at a new point. And the number one challenge that you have is to be a wealth preserver

01:57

so you don't lose what you've made,

so you don't lose what you've made,

02:00

except that you don't know anything about preserving wealth. What you are is a great entrepreneur

except that you don't know anything about preserving wealth. What you are is a great entrepreneur

02:06

or a great leader or a great manager,

or a great leader or a great manager,

02:09

and you're good at inspiring troops, but you don't have any troops anymore.

and you're good at inspiring troops, but you don't have any troops anymore.

02:13

So you have this dramatic

So you have this dramatic

02:14

shift.

shift.

02:15

And,

And,

02:16

it turns out that what it takes to be a great entrepreneur

it turns out that what it takes to be a great entrepreneur

02:21

might qualify you to be a mediocre

might qualify you to be a mediocre

02:24

investor.

investor.

02:25

When you're an entrepreneur,

When you're an entrepreneur,

02:27

you focus on a single opportunity,

you focus on a single opportunity,

02:29

you're highly emotional about it. You, you give it everything you can. When you're an investor, you have to be more dispassionate.

you're highly emotional about it. You, you give it everything you can. When you're an investor, you have to be more dispassionate.

02:38

You have to have a diversified portfolio,

You have to have a diversified portfolio,

02:41

and you have to have you have to be unemotional about it. So the sum of it all is that There's a little understood transition which a few very lucky, very successful people get to go through And we wanted to study that, which is what we've done over the last twenty one years,

and you have to have you have to be unemotional about it. So the sum of it all is that There's a little understood transition which a few very lucky, very successful people get to go through And we wanted to study that, which is what we've done over the last twenty one years,

02:58

to help people in that transition

to help people in that transition

03:01

get through it and on to a better place.

get through it and on to a better place.

03:05

When you originally started the business, what was the, like, what was the product? Was it like y p o where it was a monthly group meetup? What what was it? Sure. So,

When you originally started the business, what was the, like, what was the product? Was it like y p o where it was a monthly group meetup? What what was it? Sure. So,

03:15

you mentioned y p o, which is a fantastic organization.

you mentioned y p o, which is a fantastic organization.

03:19

There's another similar organization called Vistage,

There's another similar organization called Vistage,

03:22

and they both are for CEOs.

and they both are for CEOs.

03:25

And,

And,

03:26

if those are the great colleges

if those are the great colleges

03:28

we're the one great graduate school. And so we have a lot of YPO members that graduate into,

we're the one great graduate school. And so we have a lot of YPO members that graduate into,

03:35

Tiger twenty one and a lot of Vista members that graduate into Tiger twenty one.

Tiger twenty one and a lot of Vista members that graduate into Tiger twenty one.

03:41

And just to give you an idea,

And just to give you an idea,

03:43

the,

the,

03:45

the I've tie last time I looked both Vistage

the I've tie last time I looked both Vistage

03:48

And,

And,

03:49

y p l have about fifty thousand members globally. It might be sixty now. I've lost Vistage

y p l have about fifty thousand members globally. It might be sixty now. I've lost Vistage

03:55

has fifty thousand members. And y p o each. Oh, oh, oh, okay. Yeah. That's about thirty thousand each, I think. Could be a little more. I haven't looked in there a couple years. Oh, these are huge businesses, sure. Vistage charges like fifty grand a year. Right? Or I think I think I think Vistage is around fifteen thousand or eighteen I don't have the exact number. Could be twenty.

has fifty thousand members. And y p o each. Oh, oh, oh, okay. Yeah. That's about thirty thousand each, I think. Could be a little more. I haven't looked in there a couple years. Oh, these are huge businesses, sure. Vistage charges like fifty grand a year. Right? Or I think I think I think Vistage is around fifteen thousand or eighteen I don't have the exact number. Could be twenty.

04:15

YPO doesn't have a single price because depending on whether you go on the trips and, there's different people pay different amounts. But

YPO doesn't have a single price because depending on whether you go on the trips and, there's different people pay different amounts. But

04:25

the big difference between those two, which are great organizations,

the big difference between those two, which are great organizations,

04:29

is YPO is self facilitated

is YPO is self facilitated

04:32

by its members, whereas Vistige and also Tiger twenty one, our groups are led by professionals.

by its members, whereas Vistige and also Tiger twenty one, our groups are led by professionals.

04:39

We we have over a hundred groups around the globe now. And, so we have a cadre

We we have over a hundred groups around the globe now. And, so we have a cadre

04:44

of over

of over

04:46

forty professional

forty professional

04:47

chairs. It might be sixty, excuse me, sixty professional chairs that we've trained exquisily to lead these incredible

chairs. It might be sixty, excuse me, sixty professional chairs that we've trained exquisily to lead these incredible

04:54

groups. But the bottom line is that

groups. But the bottom line is that

04:58

those are the two great organizations for CEOs and business

those are the two great organizations for CEOs and business

05:00

owners

owners

05:03

And when you decide as a rule for life that you wanna get off of the merry-go-round,

And when you decide as a rule for life that you wanna get off of the merry-go-round,

05:09

for whatever reason,

for whatever reason,

05:11

The next decision point is best,

The next decision point is best,

05:14

focused on with peers that you'll find in Tiger twenty one. So, basically, the original premise, and you could tell me if that's still the premises, you,

focused on with peers that you'll find in Tiger twenty one. So, basically, the original premise, and you could tell me if that's still the premises, you,

05:23

you have a,

you have a,

05:25

a small group appear I don't know how big the group is. You could tell me. Twelve to fifteen people. So twelve to fifteen people, and you meet of some type of cadence, like, for some weeks. Monthly, full day of month.

a small group appear I don't know how big the group is. You could tell me. Twelve to fifteen people. So twelve to fifteen people, and you meet of some type of cadence, like, for some weeks. Monthly, full day of month.

05:36

And you have a coach or, what do you call your coaches? Facilitators.

And you have a coach or, what do you call your coaches? Facilitators.

05:40

You have a chair. They're the chair. You have a chair who leads these discussions and what was the original fee. And what was the requirements?

You have a chair. They're the chair. You have a chair who leads these discussions and what was the original fee. And what was the requirements?

05:49

The original organization

The original organization

05:51

twenty

twenty

05:52

years ago

years ago

05:53

started with people who had created net worth of between ten million and a hundred million

started with people who had created net worth of between ten million and a hundred million

06:00

and very quickly

and very quickly

06:01

the top end exploded with success.

the top end exploded with success.

06:05

So it grew to a billion dollars. And,

So it grew to a billion dollars. And,

06:09

more recently, we've realize that our focus

more recently, we've realize that our focus

06:13

is on members

is on members

06:15

between twenty million and a billion.

between twenty million and a billion.

06:17

And, what I was gonna say is the main difference between,

And, what I was gonna say is the main difference between,

06:21

Vistage and YPO and Tiger twenty one

Vistage and YPO and Tiger twenty one

06:25

is the average net worth of Vistage and YPO members

is the average net worth of Vistage and YPO members

06:29

is probably maybe a tenth of that or fifth of that of Tiger. Or if you do the math, We have, a hundred and forty billion

is probably maybe a tenth of that or fifth of that of Tiger. Or if you do the math, We have, a hundred and forty billion

06:39

dollars under management.

dollars under management.

06:41

We don't manage it. Our members manage it by themselves. We're not a money manager.

We don't manage it. Our members manage it by themselves. We're not a money manager.

06:45

But collectively,

But collectively,

06:47

we have about, twelve a little under twelve hundred members. So it's a little over a hundred million dollars per member.

we have about, twelve a little under twelve hundred members. So it's a little over a hundred million dollars per member.

06:55

That's crazy. So and what's the price now?

That's crazy. So and what's the price now?

06:58

The membership is about thirty three thousand dollars a year. That's that's

The membership is about thirty three thousand dollars a year. That's that's

07:03

We we try and have a kind of one

We we try and have a kind of one

07:06

price. So the only thing you pay is a single membership fee.

price. So the only thing you pay is a single membership fee.

07:10

Unless you come to the annual meeting, there's lots of other events that are included.

Unless you come to the annual meeting, there's lots of other events that are included.

07:15

But because there's hotels and all that kind of stuff, if you come to the annual meeting. There's an additional charge of a couple grand.

But because there's hotels and all that kind of stuff, if you come to the annual meeting. There's an additional charge of a couple grand.

07:22

So I,

So I,

07:23

I I can't do the math in my head, but, like, that's, like, over a hundred million in revenue. So these are like No. No. No. No. No. No. No. It's about a thousand. It's very it's a very simple business model. It's about twelve hundred people that are paying a little more than thirty thousand dollars. So it's about thirty five or forty million dollars. Oh, I think you said twelve thousand members of my bank. Twelve hundred. And,

I I can't do the math in my head, but, like, that's, like, over a hundred million in revenue. So these are like No. No. No. No. No. No. No. It's about a thousand. It's very it's a very simple business model. It's about twelve hundred people that are paying a little more than thirty thousand dollars. So it's about thirty five or forty million dollars. Oh, I think you said twelve thousand members of my bank. Twelve hundred. And,

07:46

and that's what it costs to run.

and that's what it costs to run.

07:48

That's crazy. And what's crazy is twenty ten million

That's crazy. And what's crazy is twenty ten million

07:52

today is a lot is a significant amount of money. Twenty years ago, ten million was obviously

today is a lot is a significant amount of money. Twenty years ago, ten million was obviously

07:57

a significant more than it is now.

a significant more than it is now.

07:59

How do you how did you find your first folks?

How do you how did you find your first folks?

08:04

So I was in a Vistage group,

So I was in a Vistage group,

08:07

which had about fifteen members

which had about fifteen members

08:09

and in a dramatically

and in a dramatically

08:11

weird coincidence

weird coincidence

08:13

in nineteen ninety eight,

in nineteen ninety eight,

08:15

six of us sold, five or six of us sold our businesses.

six of us sold, five or six of us sold our businesses.

08:19

We were all in that Vistage group because we were business owners trying to be better managers, owners, CEOs,

We were all in that Vistage group because we were business owners trying to be better managers, owners, CEOs,

08:26

and,

and,

08:27

we loved the group. And so after our businesses were sold, we didn't wanna leave the group, but we found over about a six month period

we loved the group. And so after our businesses were sold, we didn't wanna leave the group, but we found over about a six month period

08:36

We were going to meetings trying to figure out how to make your CFO and your sales team and your production more efficient, but we didn't have that anymore. We were just business we had sold our businesses.

We were going to meetings trying to figure out how to make your CFO and your sales team and your production more efficient, but we didn't have that anymore. We were just business we had sold our businesses.

08:47

So I frankly,

So I frankly,

08:49

said, wow. I'd like to be spending time with peers

said, wow. I'd like to be spending time with peers

08:53

But what I wanna be learning is how they're going through this transition

But what I wanna be learning is how they're going through this transition

08:57

of becoming a wealth manager

of becoming a wealth manager

08:59

and how they can help each other be more successful

and how they can help each other be more successful

09:02

managing through that, transition, and that was the roots of Tiger twenty one. What was your first business?

managing through that, transition, and that was the roots of Tiger twenty one. What was your first business?

09:09

My first business? The what or sorry, the one that you sold?

My first business? The what or sorry, the one that you sold?

09:13

The first business that I sold.

The first business that I sold.

09:16

I developed something called the Harboride

I developed something called the Harboride

09:18

Financial center with a partner. We were fifty fifty partners. I was twenty five. He was fifty seven. It was the largest commercial renovation in the country at the time, we bought a rundown warehouse that had been the largest building in the world in nineteen twenty nine when it was built eclipsed a few years later by the Pentagon,

Financial center with a partner. We were fifty fifty partners. I was twenty five. He was fifty seven. It was the largest commercial renovation in the country at the time, we bought a rundown warehouse that had been the largest building in the world in nineteen twenty nine when it was built eclipsed a few years later by the Pentagon,

09:39

but it was an industrial warehouse on the waterfront in Jersey City directly across from the World Trade Center. And I had the idea literally when I was seventeen because I worked there when I was seventeen

but it was an industrial warehouse on the waterfront in Jersey City directly across from the World Trade Center. And I had the idea literally when I was seventeen because I worked there when I was seventeen

09:52

that it was just three thousand feet from Wall Street.

that it was just three thousand feet from Wall Street.

09:55

And what was happening is that was in the age of large computer centers. Mhmm. And so you had all the downtown

And what was happening is that was in the age of large computer centers. Mhmm. And so you had all the downtown

10:02

wall street firms building computer centers. And if they didn't wanna be in Manhattan,

wall street firms building computer centers. And if they didn't wanna be in Manhattan,

10:07

they would go to a faraway campus on a suburban, you know, somewhere in suburbia.

they would go to a faraway campus on a suburban, you know, somewhere in suburbia.

10:12

And people felt like they weren't in suburbia. They felt they were in Siberia.

And people felt like they weren't in suburbia. They felt they were in Siberia.

10:16

It was too far from the mothership.

It was too far from the mothership.

10:19

And I had the idea that if you could put some of those computer centers into this huge industrial warehouse. It would be five minutes from the parent

And I had the idea that if you could put some of those computer centers into this huge industrial warehouse. It would be five minutes from the parent

10:28

under the Hudson through the path train

under the Hudson through the path train

10:31

and in three minutes, you could get back to whatever the parent company's

and in three minutes, you could get back to whatever the parent company's

10:36

parent was. And that was sort of the original insight that this old drill building

parent was. And that was sort of the original insight that this old drill building

10:42

had floor loads

had floor loads

10:43

and and ceiling heights that would accommodate raised floors for computer centers

and and ceiling heights that would accommodate raised floors for computer centers

10:49

and the weights that you needed, the weight loads, the floor loads, and, that was basically the idea. And that's the thing that you sold before. But that was that Yeah. I sold that, when I was thirty, then I did another business that was,

and the weights that you needed, the weight loads, the floor loads, and, that was basically the idea. And that's the thing that you sold before. But that was that Yeah. I sold that, when I was thirty, then I did another business that was,

11:04

basically, a real estate merchant bank that acquired a lot of distressed real estate when, the real estate market crashed

basically, a real estate merchant bank that acquired a lot of distressed real estate when, the real estate market crashed

11:13

in the late eighties. I don't know if you remember that the stock it crashed in eighty seven. The real estate market followed.

in the late eighties. I don't know if you remember that the stock it crashed in eighty seven. The real estate market followed.

11:19

And, so I was able to acquire a couple hundred properties

And, so I was able to acquire a couple hundred properties

11:23

from banks that had gone under and the federal government had taken it over. And when I sold that business

from banks that had gone under and the federal government had taken it over. And when I sold that business

11:30

in nineteen ninety eight, I I don't wanna have to go back to work.

in nineteen ninety eight, I I don't wanna have to go back to work.

11:35

I wanna know how to preserve money, how to people who've

I wanna know how to preserve money, how to people who've

11:39

sold their business

sold their business

11:40

How do they think about what they're gonna do so that they don't take stupid risks and find out they've lost it all? Has,

How do they think about what they're gonna do so that they don't take stupid risks and find out they've lost it all? Has,

11:48

Building Tiger twenty one, you you kinda

Building Tiger twenty one, you you kinda

11:51

was Tiger twenty one supposed to be a a a business or like that? Actually, it's been a labor of love for me.

was Tiger twenty one supposed to be a a a business or like that? Actually, it's been a labor of love for me.

11:58

But,

But,

11:59

you know, oddly, was it able to create more wealth than the other things? No. It's,

you know, oddly, was it able to create more wealth than the other things? No. It's,

12:05

It's it's it hasn't at all.

It's it's it hasn't at all.

12:08

Basically, for twenty years, I put every penny

Basically, for twenty years, I put every penny

12:12

back into Tiger of revenue because I wanted to hire some of the best people in the world and the best teams and and get it right. But there's a lot of inherent value in it. There's no question because,

back into Tiger of revenue because I wanted to hire some of the best people in the world and the best teams and and get it right. But there's a lot of inherent value in it. There's no question because,

12:26

we have extraordinary members and the value of our franchise

we have extraordinary members and the value of our franchise

12:29

has to do with our members and the team we've put together,

has to do with our members and the team we've put together,

12:33

was incredible, but I I

was incredible, but I I

12:36

realized that in order to

realized that in order to

12:38

scale the business

scale the business

12:39

to fulfill its potential.

to fulfill its potential.

12:41

I needed more senior help and in order to attract that senior help, I needed people who were interested in equity.

I needed more senior help and in order to attract that senior help, I needed people who were interested in equity.

12:49

So having a private equity partner made it easier to to attract world class talent who would, own part of the equity?

So having a private equity partner made it easier to to attract world class talent who would, own part of the equity?

13:00

You're kind of in an interesting position

You're kind of in an interesting position

13:02

which is like you know

which is like you know

13:04

or you work with a significant amount of wealthy people

or you work with a significant amount of wealthy people

13:09

and you have like some interesting in insights

and you have like some interesting in insights

13:12

Where what have you seen or kinda like the levels of wealth that someone

Where what have you seen or kinda like the levels of wealth that someone

13:17

were like they see changes in their life?

were like they see changes in their life?

13:22

You know,

You know,

13:23

like so many things, I could give you one number or another,

like so many things, I could give you one number or another,

13:27

but it's really a state of mind.

but it's really a state of mind.

13:30

You know, you you have people who are retired and they

You know, you you have people who are retired and they

13:35

get x dollars. And then you have other people who are retired

get x dollars. And then you have other people who are retired

13:39

and they get ten x dollars.

and they get ten x dollars.

13:41

And yet the one who's,

And yet the one who's,

13:43

achieving or receiving the lower amount

achieving or receiving the lower amount

13:46

might be more evolved and emotionally balanced

might be more evolved and emotionally balanced

13:50

because of

because of

13:51

meditation or work they've done.

meditation or work they've done.

13:54

You know, the most interesting thing is there's endless studies

You know, the most interesting thing is there's endless studies

13:58

that show that up to,

that show that up to,

14:04

That whether you ask people were who earn seventy thousand

That whether you ask people were who earn seventy thousand

14:08

seven hundred thousand or seven million dollars a year, How much more do you have to earn to be happy? And the number is something like twenty percent no matter where you are, the average person just needs just a little more to be happy, which tells you about the unfilled

seven hundred thousand or seven million dollars a year, How much more do you have to earn to be happy? And the number is something like twenty percent no matter where you are, the average person just needs just a little more to be happy, which tells you about the unfilled

14:26

nature

nature

14:27

of human ambition.

of human ambition.

14:29

I've read a a bunch of stuff like that. And if well, the way that I remembered it, and I could be wrong, it was like two x. So it was like maybe it was her net worth. So, like, if your net worth is a million, you're like, well, I would feel a lot better if it were two. But then they talked to people who was a hundred

I've read a a bunch of stuff like that. And if well, the way that I remembered it, and I could be wrong, it was like two x. So it was like maybe it was her net worth. So, like, if your net worth is a million, you're like, well, I would feel a lot better if it were two. But then they talked to people who was a hundred

14:43

and most people would say like, man, if you have a hundred liquid, like, it's gonna be a little bit hard to screw up. But even they were like, yeah, but if I had two hundred, I think I would finally feel more comfortable.

and most people would say like, man, if you have a hundred liquid, like, it's gonna be a little bit hard to screw up. But even they were like, yeah, but if I had two hundred, I think I would finally feel more comfortable.

14:53

You know, the fact is that wherever you are,

You know, the fact is that wherever you are,

14:56

you have the illusion that if you had a little more, it would make your life a little easier.

you have the illusion that if you had a little more, it would make your life a little easier.

15:01

But sometimes if you have a little more, it's a burden because now you have to manage it. And when you say it's a burden, what I mean is intellectually

But sometimes if you have a little more, it's a burden because now you have to manage it. And when you say it's a burden, what I mean is intellectually

15:10

You have to work harder to make sense of it. And in that sense, it is a burden. It it it's like a job. It's just it's just in the nature of things that the grass always seems greener on the other side. And and that's part of why I say a lot of this is just a mindset and and there's another which is really important as well. You know, it doesn't matter whether we're talking about three million or thirty million.

You have to work harder to make sense of it. And in that sense, it is a burden. It it it's like a job. It's just it's just in the nature of things that the grass always seems greener on the other side. And and that's part of why I say a lot of this is just a mindset and and there's another which is really important as well. You know, it doesn't matter whether we're talking about three million or thirty million.

15:32

If you take somebody if you take two people who've worth three or thirty million.

If you take somebody if you take two people who've worth three or thirty million.

15:38

And one had been worth fifty million and lost twenty, and now they're worth thirty.

And one had been worth fifty million and lost twenty, and now they're worth thirty.

15:43

And another had been worth twenty million in May ten and is now worth thirty. Those two people are worth thirty million. You could do as the example with three million as well. But the person who got to thirty million by losing twenty feels absolutely devastated in the person who got to thirty million by making another ten feels generally

And another had been worth twenty million in May ten and is now worth thirty. Those two people are worth thirty million. You could do as the example with three million as well. But the person who got to thirty million by losing twenty feels absolutely devastated in the person who got to thirty million by making another ten feels generally

16:04

quite positive or proud of themselves. Yeah. It's the same thirty million. So It's a lot of things that are specific to the individual

quite positive or proud of themselves. Yeah. It's the same thirty million. So It's a lot of things that are specific to the individual

16:12

that,

that,

16:13

generates the psychology.

generates the psychology.

16:16

There was that one article that came out that's total nonsense. It came out years ago. It said like you don't get significantly

There was that one article that came out that's total nonsense. It came out years ago. It said like you don't get significantly

16:22

happier after a certain amount and the amount they said was crazy. It was seventy thousand dollars a year, but of course this was like fifteen years ago.

happier after a certain amount and the amount they said was crazy. It was seventy thousand dollars a year, but of course this was like fifteen years ago.

16:30

And I thought that was crazy. I'm like, I don't think that's true, but

And I thought that was crazy. I'm like, I don't think that's true, but

16:35

Alright. And I was like, I do think there is like a number where it's like, alright. Maybe, like, there's like a threshold here where you're you could definitely continue to get happy, but like, there's a baseline

Alright. And I was like, I do think there is like a number where it's like, alright. Maybe, like, there's like a threshold here where you're you could definitely continue to get happy, but like, there's a baseline

16:45

and,

and,

16:48

I always thought I'm like,

I always thought I'm like,

16:50

I think you will always want more money

I think you will always want more money

16:53

But

But

16:54

today,

today,

16:56

maybe, like, if you have if you're in, like, the ten or fifteen

maybe, like, if you have if you're in, like, the ten or fifteen

17:01

range liquid, I'm like, maybe there's like, alright, maybe life won't change

range liquid, I'm like, maybe there's like, alright, maybe life won't change

17:06

significantly more after that because like, you know, like, that's you could screw that up, but, like, you gotta kinda screw up majorly. And but I don't know. That's kinda what I always thought. Well, the seventy the seventy thousand

significantly more after that because like, you know, like, that's you could screw that up, but, like, you gotta kinda screw up majorly. And but I don't know. That's kinda what I always thought. Well, the seventy the seventy thousand

17:18

is a number that shows up in literature, meaning,

is a number that shows up in literature, meaning,

17:22

below seventy thousand

below seventy thousand

17:23

every increment that you get closer to it. If you are earning thirty thousand and you get to fifty, fifty to sixty, anything up to seventy thousand,

every increment that you get closer to it. If you are earning thirty thousand and you get to fifty, fifty to sixty, anything up to seventy thousand,

17:32

increments have dramatic increases because it's just kind of obvious. It's basic needs. You need to put a roof over your head. You need to put square meals,

increments have dramatic increases because it's just kind of obvious. It's basic needs. You need to put a roof over your head. You need to put square meals,

17:41

on the table. You might need a car. And at seventy thousand, you can pretty much afford most of those things, not in the lap of luxury, but you can afford those things. Below it, it's really, really tough.

on the table. You might need a car. And at seventy thousand, you can pretty much afford most of those things, not in the lap of luxury, but you can afford those things. Below it, it's really, really tough.

17:54

So that's kind of it might be ninety thousand today with inflation, but it's somewhere in that. I don't mean to trivialize the difference between seventy and ninety. But everything above that,

So that's kind of it might be ninety thousand today with inflation, but it's somewhere in that. I don't mean to trivialize the difference between seventy and ninety. But everything above that,

18:04

you know, for every level that you have, you can just spend more and create the same sense of being over extended if you're not disciplined,

you know, for every level that you have, you can just spend more and create the same sense of being over extended if you're not disciplined,

18:13

and it's the rare person who generates excess,

and it's the rare person who generates excess,

18:18

capital and doesn't change their lifestyle.

capital and doesn't change their lifestyle.

18:21

So no matter how much they have, they keep spending more, because if you can keep that gap,

So no matter how much they have, they keep spending more, because if you can keep that gap,

18:26

of not needing what you have that gives you a cushion,

of not needing what you have that gives you a cushion,

18:31

that's rare and really,

that's rare and really,

18:33

something remarkable for those who have it. Have you met people who have done that who have been, let's say, worth hundreds of millions of dollars, but still live like, don't even live nearly like that? Well, you know, the most classic example would be Warren Buffett, who still lives in a thirty or fifty or a hundred thousand dollar home that he bought in,

something remarkable for those who have it. Have you met people who have done that who have been, let's say, worth hundreds of millions of dollars, but still live like, don't even live nearly like that? Well, you know, the most classic example would be Warren Buffett, who still lives in a thirty or fifty or a hundred thousand dollar home that he bought in,

18:53

the Midwest where he lives,

the Midwest where he lives,

18:55

in Omaha.

in Omaha.

18:57

And

And

19:00

You know, it's really hard to have one person comment

You know, it's really hard to have one person comment

19:04

on another person's health.

on another person's health.

19:06

You wonder what's all that money for

You wonder what's all that money for

19:09

But now he's given half of it or something to charity,

But now he's given half of it or something to charity,

19:13

and there's tremendous benefit,

and there's tremendous benefit,

19:16

gained from the money he's given to charity. But, you know,

gained from the money he's given to charity. But, you know,

19:20

it's one thing to live within your means that's

it's one thing to live within your means that's

19:24

responsible.

responsible.

19:25

It's another thing to be so disconnected

It's another thing to be so disconnected

19:28

between your wealth and what you're living

between your wealth and what you're living

19:32

that's there's something going on inside,

that's there's something going on inside,

19:35

and, you know, I'll leave it to the shrinks to figure it out. But it's kind of hard to understand why a person who might be working sixty, seventy, eighty hours a week as if,

and, you know, I'll leave it to the shrinks to figure it out. But it's kind of hard to understand why a person who might be working sixty, seventy, eighty hours a week as if,

19:45

there's no tomorrow.

there's no tomorrow.

19:47

And then they might be worth a certain amount of money but they're living on one hundredth of it as if they had a hundredth

And then they might be worth a certain amount of money but they're living on one hundredth of it as if they had a hundredth

19:55

less. You know, they had one percent of the wealth that they do. What are they hiding from There's lots of answers. They're all dependent on different people.

less. You know, they had one percent of the wealth that they do. What are they hiding from There's lots of answers. They're all dependent on different people.

20:04

Most of the people I hang out with, so I'm thirty two years old. I,

Most of the people I hang out with, so I'm thirty two years old. I,

20:08

started an internet company. My co host Sean is a a little older, a year or two, older than me also started an internet company. And the majority of our friends are in, like, the late twenties

started an internet company. My co host Sean is a a little older, a year or two, older than me also started an internet company. And the majority of our friends are in, like, the late twenties

20:17

early forties age and like all mostly, except for a few, in the internet. And so, like, I run-in this, like, very, like, internet y, young circle,

early forties age and like all mostly, except for a few, in the internet. And so, like, I run-in this, like, very, like, internet y, young circle,

20:27

and the vibe that I get from Tiger is that it's a little bit older and more like traditional businesses or maybe finance or real estate. Who have who have kind of knocked it out the park,

and the vibe that I get from Tiger is that it's a little bit older and more like traditional businesses or maybe finance or real estate. Who have who have kind of knocked it out the park,

20:39

is is is Tiger twenty one mostly? Am I am I categorizing it correctly, or do you guys actually have, like, a a lot of young people? Only because of only because of how we've grown

is is is Tiger twenty one mostly? Am I am I categorizing it correctly, or do you guys actually have, like, a a lot of young people? Only because of only because of how we've grown

20:50

And when you have,

And when you have,

20:52

you know, eleven hundred and fifty or sixty members,

you know, eleven hundred and fifty or sixty members,

20:55

the answer is the average age

the answer is the average age

20:58

has,

has,

21:00

fallen over the history

fallen over the history

21:01

from the high fifties to the low fifties.

from the high fifties to the low fifties.

21:05

But in order for it to do that, given that a lot of people stayed

But in order for it to do that, given that a lot of people stayed

21:09

most of our new members are in their thirties and forties.

most of our new members are in their thirties and forties.

21:12

So we have a lot of internet folks, but the reason they're joining Tiger as opposed to something else is when they're sitting around, they're not just sitting with internet folks. They're sitting with people who have, you know, real real estate experience

So we have a lot of internet folks, but the reason they're joining Tiger as opposed to something else is when they're sitting around, they're not just sitting with internet folks. They're sitting with people who have, you know, real real estate experience

21:26

an experience running businesses,

an experience running businesses,

21:29

you know, in the,

you know, in the,

21:31

in the in the world that isn't just from the internet. And the reason we're so excited to have

in the in the world that isn't just from the internet. And the reason we're so excited to have

21:36

folks

folks

21:37

that are in the crypto space or the internet space is precisely because they're understanding

that are in the crypto space or the internet space is precisely because they're understanding

21:44

these new technologies that are gonna transform the world in a way that many of our members

these new technologies that are gonna transform the world in a way that many of our members

21:50

wouldn't otherwise. So it's this combination

wouldn't otherwise. So it's this combination

21:53

that makes, some of our meetings so electric.

that makes, some of our meetings so electric.

21:56

Have you noticed the difference between

Have you noticed the difference between

21:59

like, let's just say group a is like these people who are made their money on the internet, made their money in only like three or eight years

like, let's just say group a is like these people who are made their money on the internet, made their money in only like three or eight years

22:08

all selling

all selling

22:09

just internet stuff. So, you know, like, not real stuff that you can touch versus, let's say, like, the small business owner who, like, scale something over twenty or thirty years and then eventually sold it or made cash flow along the way versus the tech person who was probably poor for a long time and then suddenly, boom, they're not had because they sold their business and they weren't ever profitable, but have you noticed a difference in those people's attitude or the problems they have?

just internet stuff. So, you know, like, not real stuff that you can touch versus, let's say, like, the small business owner who, like, scale something over twenty or thirty years and then eventually sold it or made cash flow along the way versus the tech person who was probably poor for a long time and then suddenly, boom, they're not had because they sold their business and they weren't ever profitable, but have you noticed a difference in those people's attitude or the problems they have?

22:34

Well, there probably,

Well, there probably,

22:37

you know, as many differences as there are people, but there's some fundamental truths that I think you're pointing at. You know,

you know, as many differences as there are people, but there's some fundamental truths that I think you're pointing at. You know,

22:44

when I went to business school at,

when I went to business school at,

22:47

MIT forty some years ago,

MIT forty some years ago,

22:50

you know, if you were doing a marketing exercise, they'd say come up with a product that you could sell to a thousand people.

you know, if you were doing a marketing exercise, they'd say come up with a product that you could sell to a thousand people.

22:57

And today, if you go to Stanford to a marketing course, they say come up with a service you could sell to a billion people.

And today, if you go to Stanford to a marketing course, they say come up with a service you could sell to a billion people.

23:04

Literally a billion people. That's what Facebook does and some of the other, major social media.

Literally a billion people. That's what Facebook does and some of the other, major social media.

23:10

So

So

23:11

scaling

scaling

23:12

is not just a difference in size.

is not just a difference in size.

23:15

We have a dramatically more frictionless

We have a dramatically more frictionless

23:18

economy, the nature of internet and technology

economy, the nature of internet and technology

23:22

allows businesses to scale. That's why we have unicorns today, but we almost never did in the past.

allows businesses to scale. That's why we have unicorns today, but we almost never did in the past.

23:29

So when you think about life expectations,

So when you think about life expectations,

23:32

people who started out thirty or forty years ago had an expectation

people who started out thirty or forty years ago had an expectation

23:37

that they'd be they'd have to put their nose to the grindstone for thirty years before they'd hit a pay day. Not all of them, but some of them. And, of course, There are many different types of wealth. I distinguish between

that they'd be they'd have to put their nose to the grindstone for thirty years before they'd hit a pay day. Not all of them, but some of them. And, of course, There are many different types of wealth. I distinguish between

23:50

people who are workers

people who are workers

23:52

versus people who have some kind of god given talent, a singer, a basketball player, an actor,

versus people who have some kind of god given talent, a singer, a basketball player, an actor,

23:59

a rapper. These are people not who are building businesses, but have god given talents. That, of course, they have to work hard to hone those talents, but it's very different when your wealth is created from your own talent. Than when you have to scrimp and save, you know, to make a payroll and and get everything done. But then if you compare that to people who are creating wealth today. First of all, they can do it in three to five years. You have unicorns

a rapper. These are people not who are building businesses, but have god given talents. That, of course, they have to work hard to hone those talents, but it's very different when your wealth is created from your own talent. Than when you have to scrimp and save, you know, to make a payroll and and get everything done. But then if you compare that to people who are creating wealth today. First of all, they can do it in three to five years. You have unicorns

24:24

in, you know, three to five years or,

in, you know, three to five years or,

24:27

not much longer.

not much longer.

24:28

And so

And so

24:30

one of the big differences is that,

one of the big differences is that,

24:33

if you were fifty eight

if you were fifty eight

24:35

twenty years ago and you sold your business, You probably were retiring because you spent thirty years doing something,

twenty years ago and you sold your business, You probably were retiring because you spent thirty years doing something,

24:43

and that was your first sale. But today, if you sell, you might be thirty or thirty five or thirty eight. You're not retiring. You're going on to the next thing. So the I think the biggest

and that was your first sale. But today, if you sell, you might be thirty or thirty five or thirty eight. You're not retiring. You're going on to the next thing. So the I think the biggest

24:54

difference is this kind of expectation

difference is this kind of expectation

24:56

of what a life looks like, you know, a generation ago, a really successful entrepreneur,

of what a life looks like, you know, a generation ago, a really successful entrepreneur,

25:03

had one or maybe two,

had one or maybe two,

25:06

serial successes.

serial successes.

25:08

Today, a successful entrepreneur could have three, four, five, or multiples

Today, a successful entrepreneur could have three, four, five, or multiples

25:13

because he or she has figured out how to manage a couple at the same time.

because he or she has figured out how to manage a couple at the same time.

25:18

Elon Musk is not the only person

Elon Musk is not the only person

25:21

who has multiple businesses. He's certainly the most visible, but it's much more creature of today.

who has multiple businesses. He's certainly the most visible, but it's much more creature of today.

25:29

It happened in the past, but just much less so. When I was selling my business,

It happened in the past, but just much less so. When I was selling my business,

25:34

I would talk to some bankers, and I've talked to some friends and advisors

I would talk to some bankers, and I've talked to some friends and advisors

25:38

and a nice amount were like, yeah, sell it and get paid and like, you know, you don't have to worry about money anymore, and that's wonderful. And then the other group of people though were like,

and a nice amount were like, yeah, sell it and get paid and like, you know, you don't have to worry about money anymore, and that's wonderful. And then the other group of people though were like,

25:48

mad starting something that works is really, really, really hard.

mad starting something that works is really, really, really hard.

25:52

And

And

25:53

a lot of people sell a business and want to start it again and they don't realize like, you know, like there's some luck involved and it's just actually really, really challenging and sometimes you get confident and you think, oh, I could just do it again.

a lot of people sell a business and want to start it again and they don't realize like, you know, like there's some luck involved and it's just actually really, really challenging and sometimes you get confident and you think, oh, I could just do it again.

26:06

And so if you don't have to sell it, never sell it. And I've lately fallen in the category of like, if you don't have a lot of money, sell a company if you if that means that you're like financially secure,

And so if you don't have to sell it, never sell it. And I've lately fallen in the category of like, if you don't have a lot of money, sell a company if you if that means that you're like financially secure,

26:18

But then after that, oftentimes

But then after that, oftentimes

26:20

try not to sell anything ever.

try not to sell anything ever.

26:22

Like, to see if you can just like run it or get it to run it on its own or hire people because it's quite hard to get getting something going into such a pain in the butt. Do you fall do you tend to,

Like, to see if you can just like run it or get it to run it on its own or hire people because it's quite hard to get getting something going into such a pain in the butt. Do you fall do you tend to,

26:33

when you're talking to your members, do you

when you're talking to your members, do you

26:37

What what do you think most? Like, which of those categories do you think is actually a little bit more true or more common? And, I I think you're onto really important. And then it's kinda like all of the above.

What what do you think most? Like, which of those categories do you think is actually a little bit more true or more common? And, I I think you're onto really important. And then it's kinda like all of the above.

26:48

One of the biggest

One of the biggest

26:50

learnings is that most people who sell their first business

learnings is that most people who sell their first business

26:55

have no idea

have no idea

26:58

that it feels like having the rug pulled out from underneath you because you see a big dollar amount,

that it feels like having the rug pulled out from underneath you because you see a big dollar amount,

27:04

and and you're so focused on the sale

and and you're so focused on the sale

27:07

that it's the everything else that's kind of the shock. And,

that it's the everything else that's kind of the shock. And,

27:11

the most important one is the momentum or the platform that you don't even realize how valuable it is. So, you know, one of the things we really talk about is before you sell, you really have to think about not just the pros,

the most important one is the momentum or the platform that you don't even realize how valuable it is. So, you know, one of the things we really talk about is before you sell, you really have to think about not just the pros,

27:25

but the cons. And and particularly in an environment like today, forget that the markets are down this year in a low interest rate environment.

but the cons. And and particularly in an environment like today, forget that the markets are down this year in a low interest rate environment.

27:36

When you sell,

When you sell,

27:37

you know, a typical industrial building, obviously,

you know, a typical industrial building, obviously,

27:41

you're talking about,

you're talking about,

27:43

other other types of metrics, but it used to be a typical meat and potatoes business which sell for seven or eight times earnings.

other other types of metrics, but it used to be a typical meat and potatoes business which sell for seven or eight times earnings.

27:51

And, you know, if you Take a business that was making. I'll use an example, three million dollars,

And, you know, if you Take a business that was making. I'll use an example, three million dollars,

27:56

and you sold it for twenty million dollars,

and you sold it for twenty million dollars,

27:59

and you paid the taxes

and you paid the taxes

28:01

Now you have sixteen million.

Now you have sixteen million.

28:04

But if you buy bonds at two percent, you're now making three hundred and twenty thousand dollars on that same capital

But if you buy bonds at two percent, you're now making three hundred and twenty thousand dollars on that same capital

28:12

that was generating

that was generating

28:13

three million dollars before. You've lost ninety percent of your earning power And we call that sticker shock and ninety I would say the vast majority of people who sell their first business

three million dollars before. You've lost ninety percent of your earning power And we call that sticker shock and ninety I would say the vast majority of people who sell their first business

28:27

go through sticker shock because they haven't really thought through that the passive earnings

go through sticker shock because they haven't really thought through that the passive earnings

28:34

on the profits of the sale will generate

on the profits of the sale will generate

28:37

dramatically

dramatically

28:38

less income than the business itself did. Now, of course,

less income than the business itself did. Now, of course,

28:42

the positive is that when you get when you sell that business, you don't have all the risks of that business. And maybe the business had risks that could put it out of business. So a good sale allows you to take chips off the table, and that has a lot of benefits.

the positive is that when you get when you sell that business, you don't have all the risks of that business. And maybe the business had risks that could put it out of business. So a good sale allows you to take chips off the table, and that has a lot of benefits.

28:59

But I think you're really

But I think you're really

29:01

you know, you're onto the central

you know, you're onto the central

29:04

issue

issue

29:05

around selling businesses

around selling businesses

29:07

because, particularly,

because, particularly,

29:09

if you hold on to the business, you don't have a tax liability.

if you hold on to the business, you don't have a tax liability.

29:13

I'm not against taxes in general. I'm just saying that it it eats into some of the value Whereas if you continue to own the business,

I'm not against taxes in general. I'm just saying that it it eats into some of the value Whereas if you continue to own the business,

29:21

the full value is working to make the business

the full value is working to make the business

29:25

larger and larger.

larger and larger.

29:27

So when you're thinking about risk,

So when you're thinking about risk,

29:30

I think the greatest service that we do is help some of our members

I think the greatest service that we do is help some of our members

29:34

think about the things they hadn't thought about when they're thinking about selling. Like what? Well, just what we're talking about, this sticker shock this this sense of do you really wanna lose the platform,

think about the things they hadn't thought about when they're thinking about selling. Like what? Well, just what we're talking about, this sticker shock this this sense of do you really wanna lose the platform,

29:48

that you have? And will you have enough capital

that you have? And will you have enough capital

29:52

because we've had

because we've had

29:54

many examples of people who think when they sell the business,

many examples of people who think when they sell the business,

29:58

it's gonna be easy street, but when they don't realize the loss of income

it's gonna be easy street, but when they don't realize the loss of income

30:03

that occurs

that occurs

30:04

when you're taking dollars from a sale and putting it into passive assets

when you're taking dollars from a sale and putting it into passive assets

30:09

or worse in order to generate income like they had before, they take risks. They don't understand in investments

or worse in order to generate income like they had before, they take risks. They don't understand in investments

30:17

because investing can be a lot harder you know, when you own a business, it's kind of like being on a dog track. A dog track, you have a fence to your left and a fence to your right. Somebody shoots a gun behind you and you can only go forward. You know, if you're a paper clip manufacturer,

because investing can be a lot harder you know, when you own a business, it's kind of like being on a dog track. A dog track, you have a fence to your left and a fence to your right. Somebody shoots a gun behind you and you can only go forward. You know, if you're a paper clip manufacturer,

30:32

or you sell rocks, or frankly, even an internet service,

or you sell rocks, or frankly, even an internet service,

30:36

you have one direction. You wanna be the master of whatever your business is, and that's really hard.

you have one direction. You wanna be the master of whatever your business is, and that's really hard.

30:43

But intellectually,

But intellectually,

30:44

when you're an investor,

when you're an investor,

30:45

how can any one person understand all the markets? And if you're starting out, with no fundamental understanding of the markets, because you've just been running a business.

how can any one person understand all the markets? And if you're starting out, with no fundamental understanding of the markets, because you've just been running a business.

30:55

One of the real shocks

One of the real shocks

30:58

is most people think the hard part is making the money. And then once you have the money, you're on easy street. But from an intellectual

is most people think the hard part is making the money. And then once you have the money, you're on easy street. But from an intellectual

31:06

challenge point of view, many of our mem members find,

challenge point of view, many of our mem members find,

31:10

the challenge of managing

the challenge of managing

31:12

the wealth that they've created is actually intellectually

the wealth that they've created is actually intellectually

31:15

more challenging

more challenging

31:17

than the business because the business might have come naturally to them. They might have had an idea and they just pursued it to its, good ends. When I sold, I mean, I didn't know it. This was only a year, a year and a half ago or a year and a couple months ago. I didn't know anything. Like,

than the business because the business might have come naturally to them. They might have had an idea and they just pursued it to its, good ends. When I sold, I mean, I didn't know it. This was only a year, a year and a half ago or a year and a couple months ago. I didn't know anything. Like,

31:32

I, I mean, I knew nothing. Like, I didn't know, like, when people said that they're gonna short a stock, I was like, I I don't know what shorting means. And they say they go log. I'm like, don't know what that means. And so, like, it was, and people,

I, I mean, I knew nothing. Like, I didn't know, like, when people said that they're gonna short a stock, I was like, I I don't know what shorting means. And they say they go log. I'm like, don't know what that means. And so, like, it was, and people,

31:45

like, you know, friends and family were like, well, what are you gonna do with your money? And I'm like, I don't I don't know anything. Like, I I I think people are surprised that your ability to earn is not often correlated with your ability to like invest. And

like, you know, friends and family were like, well, what are you gonna do with your money? And I'm like, I don't I don't know anything. Like, I I I think people are surprised that your ability to earn is not often correlated with your ability to like invest. And

31:59

Just the opposite. That's that's what I'm trying to say. You can be a great entrepreneur

Just the opposite. That's that's what I'm trying to say. You can be a great entrepreneur

32:04

and a really lousy investor

and a really lousy investor

32:06

And, you know, just to give an expectation

And, you know, just to give an expectation

32:09

for,

for,

32:10

people who might be listening, how long do you think it takes

people who might be listening, how long do you think it takes

32:14

to go from being a successful

to go from being a successful

32:16

entrepreneur

entrepreneur

32:17

that is a mediocre investor where you were a year ago. How long do you think it takes till you have Sort of a modicum of confidence that you know what you're doing as an investor?

that is a mediocre investor where you were a year ago. How long do you think it takes till you have Sort of a modicum of confidence that you know what you're doing as an investor?

32:29

I mean, years. I I don't know. I mean, I I've been studying it now for a year and a half, but I feel like I don't know much. Five years. Five years. Yeah. That's and that's if you're really working at it.

I mean, years. I I don't know. I mean, I I've been studying it now for a year and a half, but I feel like I don't know much. Five years. Five years. Yeah. That's and that's if you're really working at it.

32:40

What I just did was put so I are you familiar with HubSpot?

What I just did was put so I are you familiar with HubSpot?

32:44

Sure. So they're the ones who bought us. So I owned HubSpot stock and then the rest was just mostly a Vanguard total index fund and some real estate and real estate funds. What,

Sure. So they're the ones who bought us. So I owned HubSpot stock and then the rest was just mostly a Vanguard total index fund and some real estate and real estate funds. What,

32:55

with your folks

with your folks

32:57

What do you what's like the asset allocation of, like,

What do you what's like the asset allocation of, like,

33:01

what you've seen what what's, like, a fairly successful?

what you've seen what what's, like, a fairly successful?

33:04

Sure.

Sure.

33:05

So I wanna yeah. I wanna be really we're not an investment adviser,

So I wanna yeah. I wanna be really we're not an investment adviser,

33:09

but I do track the asset allocation of our members and can simply report on it, which is Yeah. You guys put out this annual report. That's awesome. I love that. So the the asset allocation

but I do track the asset allocation of our members and can simply report on it, which is Yeah. You guys put out this annual report. That's awesome. I love that. So the the asset allocation

33:20

very roughly

very roughly

33:22

is,

is,

33:23

traditionally, real estate has been king with about twenty eight percent of the assets, maybe twenty seven. Is that include, primary residence?

traditionally, real estate has been king with about twenty eight percent of the assets, maybe twenty seven. Is that include, primary residence?

33:32

No.

No.

33:33

Generally not.

Generally not.

33:34

It's it's mostly investment real estate. And does that mean they own it or they're in a reit?

It's it's mostly investment real estate. And does that mean they own it or they're in a reit?

33:40

It could be they're in a reit more likely

It could be they're in a reit more likely

33:43

they either own a building or they own a a limited partnership in a real estate fund of some sort.

they either own a building or they own a a limited partnership in a real estate fund of some sort.

33:51

Second would be public equity

Second would be public equity

33:54

About twenty six, twenty anywhere between twenty four and twenty six percent. That's so much lower than I thought. Exactly.

About twenty six, twenty anywhere between twenty four and twenty six percent. That's so much lower than I thought. Exactly.

34:00

And private equity. And this is unique to the Tiger community.

And private equity. And this is unique to the Tiger community.

34:05

Our private equity has, for the last couple of years, been more than public equity. It's now a little neck and neck, but private equity is around twenty one to twenty four percent.

Our private equity has, for the last couple of years, been more than public equity. It's now a little neck and neck, but private equity is around twenty one to twenty four percent.

34:15

And what's so remarkable

And what's so remarkable

34:17

is if you take those three numbers the private equity, public equity, and real estate, it adds up to seventy plus percent. Those are the risk on assets.

is if you take those three numbers the private equity, public equity, and real estate, it adds up to seventy plus percent. Those are the risk on assets.

34:27

So our members are relatively

So our members are relatively

34:29

long term bullish

long term bullish

34:31

on investments.

on investments.

34:32

Even when they think we're going into a recession,

Even when they think we're going into a recession,

34:35

They still are over seventy percent invested

They still are over seventy percent invested

34:38

in

in

34:39

when I say risk on assets. That's what the, you know, the investors say are assets that, are risky and have to do with business like qualities.

when I say risk on assets. That's what the, you know, the investors say are assets that, are risky and have to do with business like qualities.

34:48

Then, fixed income until, you know, now

Then, fixed income until, you know, now

34:51

is at a historical low point, about seven seven percent. It was as high as twelve or fourteen in prior years.

is at a historical low point, about seven seven percent. It was as high as twelve or fourteen in prior years.

34:58

And crypto and gold creeping up one or two percent assets each.

And crypto and gold creeping up one or two percent assets each.

35:04

And cash

And cash

35:05

at,

at,

35:06

twelve percent. Our member's cash has,

twelve percent. Our member's cash has,

35:09

stayed

stayed

35:10

relatively fixed

relatively fixed

35:12

over a long period of time,

over a long period of time,

35:14

the biggest it it typically fluctuates between eleven and thirteen percent.

the biggest it it typically fluctuates between eleven and thirteen percent.

35:20

But in the

But in the

35:22

pandemic

pandemic

35:23

March of twenty twenty. It spiked

March of twenty twenty. It spiked

35:26

to twenty percent which statistically is off the charts. That's how concerned our members are. But generally, in the twelve percent range is is, what our members are looking at in cash. What do they love about real estate so much? I mean, and,

to twenty percent which statistically is off the charts. That's how concerned our members are. But generally, in the twelve percent range is is, what our members are looking at in cash. What do they love about real estate so much? I mean, and,

35:42

it it's the gift. It's the gift that keeps on giving And first of all, they're terrific tax attributes

it it's the gift. It's the gift that keeps on giving And first of all, they're terrific tax attributes

35:49

of real estate because of depreciation.

of real estate because of depreciation.

35:52

But,

But,

35:53

you know, When most people think of an investment asset and they buy a company,

you know, When most people think of an investment asset and they buy a company,

35:58

that company is subject to competitive forces every single day, It's why most operating businesses

that company is subject to competitive forces every single day, It's why most operating businesses

36:05

don't lend themselves to

don't lend themselves to

36:07

multi generational

multi generational

36:08

families. Of course, there are exceptions and some very important ones.

families. Of course, there are exceptions and some very important ones.

36:12

But real estate is a much more

But real estate is a much more

36:15

tolerant asset

tolerant asset

36:17

for multi generation or or if you own certain

for multi generation or or if you own certain

36:21

natural resources. You know, if you own,

natural resources. You know, if you own,

36:24

timber lands, those are good to pass from generation to generation

timber lands, those are good to pass from generation to generation

36:28

because when you own a great piece of real estate,

because when you own a great piece of real estate,

36:32

you know, the joke is your child can be,

you know, the joke is your child can be,

36:35

let's say, less than brilliant. And still know how to collect the rent.

let's say, less than brilliant. And still know how to collect the rent.

36:39

And even in your own lifestyle,

And even in your own lifestyle,

36:42

if you own a great piece of real estate, the tenants have to pay the rent even when you're playing golf. But when you're running a complicated

if you own a great piece of real estate, the tenants have to pay the rent even when you're playing golf. But when you're running a complicated

36:50

technology company or something else, you gotta be out there and working every day. Your team has to be really really good. And I'm not in any way suggesting real estate.

technology company or something else, you gotta be out there and working every day. Your team has to be really really good. And I'm not in any way suggesting real estate.

36:59

It takes a different kind of unique smarts. It's not an easy game. But it's very different.

It takes a different kind of unique smarts. It's not an easy game. But it's very different.

37:05

One way to think about it is if you took the whole economy,

One way to think about it is if you took the whole economy,

37:09

I don't know if you remember the Dewy decimal system of libraries But if you broke the economy into all of its sectors,

I don't know if you remember the Dewy decimal system of libraries But if you broke the economy into all of its sectors,

37:16

and one of those sectors was real estate, and nine other sectors, medical, and education,

and one of those sectors was real estate, and nine other sectors, medical, and education,

37:22

everything else, high spec, high-tech,

everything else, high spec, high-tech,

37:25

aerospace, etcetera. If you took those nine other categories,

aerospace, etcetera. If you took those nine other categories,

37:28

real estate

real estate

37:30

is more different than those other nine

is more different than those other nine

37:33

than any of the other nine are to each other because of this durability,

than any of the other nine are to each other because of this durability,

37:38

this multigenerational

this multigenerational

37:39

capacity

capacity

37:41

of real estate. We always make a joke that people they get offended about this, but I'm like, it's kind of a compliment. Always say that real state has the highest number of dumb rich people.

of real estate. We always make a joke that people they get offended about this, but I'm like, it's kind of a compliment. Always say that real state has the highest number of dumb rich people.

37:52

And that was kinda like my dumb like a fox. In other words, they may not people who have the same intellectual pursuits that you are. Right. But they can go and smell an opportunity

And that was kinda like my dumb like a fox. In other words, they may not people who have the same intellectual pursuits that you are. Right. But they can go and smell an opportunity

38:03

and sniff out where there's, a problem in a way that most other business owners don't. And that's why I say it's very deceptive

and sniff out where there's, a problem in a way that most other business owners don't. And that's why I say it's very deceptive

38:11

because

because

38:13

they're a breed apart,

they're a breed apart,

38:14

but that's become a little less so in the last generation because as real estate became

but that's become a little less so in the last generation because as real estate became

38:17

more

more

38:21

securitized

securitized

38:22

with different types of,

with different types of,

38:24

ownership and debt that went to Wall Street. It became more of a Wall Street game. So it's a little more today, a Wall Street game than it was twenty years ago.

ownership and debt that went to Wall Street. It became more of a Wall Street game. So it's a little more today, a Wall Street game than it was twenty years ago.

38:35

Yeah. And the the the kind of the strategy that my wife and I had was let's just try to get

Yeah. And the the the kind of the strategy that my wife and I had was let's just try to get

38:42

somewhat wealthy with tech stuff and have that continue to make cash flow and and and, you know, selling companies and pile a lot of it into real estate because that's something because like my business, we had to send an email every day, but if Gmail changed, like, it could go out of business. A building that I own I can lose a fair amount of money on it, but like there's it's still a thing that someone will purchase even if it's at a huge loss, but it's not gonna go to zero whereas my company, it definitely could. Like, if I owned a conference business and a pandemic hit, like, which I did,

somewhat wealthy with tech stuff and have that continue to make cash flow and and and, you know, selling companies and pile a lot of it into real estate because that's something because like my business, we had to send an email every day, but if Gmail changed, like, it could go out of business. A building that I own I can lose a fair amount of money on it, but like there's it's still a thing that someone will purchase even if it's at a huge loss, but it's not gonna go to zero whereas my company, it definitely could. Like, if I owned a conference business and a pandemic hit, like, which I did,

39:14

like, it went it literally made zero dollars, whereas this land that I own that I'm looking at right now, like, That's probably not gonna go to zero.

like, it went it literally made zero dollars, whereas this land that I own that I'm looking at right now, like, That's probably not gonna go to zero.

39:22

You know,

You know,

39:23

none of these things are as simple as we'd like. I think you're making some really excellent points

none of these things are as simple as we'd like. I think you're making some really excellent points

39:29

But if you owned retail

But if you owned retail

39:32

or,

or,

39:33

movie theaters,

movie theaters,

39:35

or airports,

or airports,

39:37

in the pandemic,

in the pandemic,

39:38

that went to zero two if you had any leverage on it. So it's not that realistic. I'm being hyperbolic. But, like, you know, I understand. Yeah. I totally get it. It it's that it's without risk, but as an asset category,

that went to zero two if you had any leverage on it. So it's not that realistic. I'm being hyperbolic. But, like, you know, I understand. Yeah. I totally get it. It it's that it's without risk, but as an asset category,

39:50

it's a, long dated asset.

it's a, long dated asset.

39:54

I can't find this client info. Have you heard of HubSpot?

I can't find this client info. Have you heard of HubSpot?

39:57

HubSpot is a CRM platform, so it shares its data across every application.

HubSpot is a CRM platform, so it shares its data across every application.

40:02

Every team can stay aligned. No out of sync spreadsheets or dueling databases. HubSpot, grow better.

Every team can stay aligned. No out of sync spreadsheets or dueling databases. HubSpot, grow better.

40:11

One more thing about the selling and, because selling versus not selling because you have a way bigger sample size. A, do you regret selling your companies and b,

One more thing about the selling and, because selling versus not selling because you have a way bigger sample size. A, do you regret selling your companies and b,

40:21

the thing about selling, like, Let's say that you sell a business and you make thirty million, you pay taxes. Now you're left with twenty. To make twenty million,

the thing about selling, like, Let's say that you sell a business and you make thirty million, you pay taxes. Now you're left with twenty. To make twenty million,

40:29

like, you could build a business for five or ten years, sell it. And, make that. To make twenty million after to make twenty million from cash annual cash and and that's

like, you could build a business for five or ten years, sell it. And, make that. To make twenty million after to make twenty million from cash annual cash and and that's

40:40

really freaking hard.

really freaking hard.

40:42

Like, you you gotta, I mean, your your taxes are higher because it's income versus capital gains. But I mean, I mean, it's just like it just seems like

Like, you you gotta, I mean, your your taxes are higher because it's income versus capital gains. But I mean, I mean, it's just like it just seems like

40:51

selling a business is probably the easier of a two and it's still not easier. It's still not easy. It's the easier of the tune to to to accumulate, like, your first bit. Would you agree with it or no? Well,

selling a business is probably the easier of a two and it's still not easier. It's still not easy. It's the easier of the tune to to to accumulate, like, your first bit. Would you agree with it or no? Well,

41:03

It it's it's

It it's it's

41:06

the problem is

the problem is

41:07

that it's better to think of it as a shift in risk

that it's better to think of it as a shift in risk

41:11

because when you made the decision to,

because when you made the decision to,

41:15

sell for thirty million, the example you just gave,

sell for thirty million, the example you just gave,

41:19

What you've done is you've taken a lot of risk on the table. So the chance of losing that thirty million now goes down radically

What you've done is you've taken a lot of risk on the table. So the chance of losing that thirty million now goes down radically

41:27

It's much less once you've turned it into,

It's much less once you've turned it into,

41:30

cash. But the chance of getting to sixty million might have gone down also because you lost the engine of growth.

cash. But the chance of getting to sixty million might have gone down also because you lost the engine of growth.

41:38

So it's, you know, do you wanna sleep well, or do you wanna eat well? Are you long term greedy or short term greedy? But there's no question that,

So it's, you know, do you wanna sleep well, or do you wanna eat well? Are you long term greedy or short term greedy? But there's no question that,

41:46

when you sell your business,

when you sell your business,

41:49

in my opinion, more often than not, it's it's not number dependent. It's risk dependent. You wanna take risk off the table. You don't wanna you don't wanna have the risk just as you said of losing your business anymore so you can take your chips off the table and diversify it over a number of investments,

in my opinion, more often than not, it's it's not number dependent. It's risk dependent. You wanna take risk off the table. You don't wanna you don't wanna have the risk just as you said of losing your business anymore so you can take your chips off the table and diversify it over a number of investments,

42:07

but it's gonna be much harder if the business was,

but it's gonna be much harder if the business was,

42:10

a well functioning growing business to get to that. You've you've increased the hurdle rate before you can get to that next level of sixty or eighty or a hundred million dollars.

a well functioning growing business to get to that. You've you've increased the hurdle rate before you can get to that next level of sixty or eighty or a hundred million dollars.

42:21

Do you regret selling your two things?

Do you regret selling your two things?

42:23

And and Tiger.

And and Tiger.

42:25

Or so you didn't sell it. First of all, I'm still the chairman and majority owner of Tiger.

Or so you didn't sell it. First of all, I'm still the chairman and majority owner of Tiger.

42:30

But it's run as if I'm fifty fifty partners.

But it's run as if I'm fifty fifty partners.

42:33

And Tiger would be a great example.

And Tiger would be a great example.

42:37

I'm a sixty six

I'm a sixty six

42:39

And

And

42:40

the when I sold Tiger,

the when I sold Tiger,

42:42

the risk that I was most concerned about because I'm a cancer survivor

the risk that I was most concerned about because I'm a cancer survivor

42:46

is,

is,

42:47

longevity

longevity

42:48

and sustainability

and sustainability

42:49

of something happened to me. So our board said I was the number one risk. And because I love this business,

of something happened to me. So our board said I was the number one risk. And because I love this business,

42:57

I said, well, how do I how do I do how do I reduce that risk? Well, the first thing is I bring in a co owner,

I said, well, how do I how do I do how do I reduce that risk? Well, the first thing is I bring in a co owner,

43:03

and the second is we bring in a world class CEO.

and the second is we bring in a world class CEO.

43:07

And in order to bring in that world class CEO, I needed to bring in a co owner.

And in order to bring in that world class CEO, I needed to bring in a co owner.

43:12

So Tiger is immeasurably

So Tiger is immeasurably

43:15

stronger today

stronger today

43:17

from a team point of view and an ownership

from a team point of view and an ownership

43:20

and a resilience point of view It is still my legacy. I'm the founder. It was my idea,

and a resilience point of view It is still my legacy. I'm the founder. It was my idea,

43:25

but I never went into it for money, and I'm not sure that I would have done any better on my own. I think I think the

but I never went into it for money, and I'm not sure that I would have done any better on my own. I think I think the

43:33

the diversity of ownership

the diversity of ownership

43:35

and,

and,

43:36

the addition of a team that we built into a world class team

the addition of a team that we built into a world class team

43:39

is just dramatically different than I could have created on my own. So I have no regrets whatsoever,

is just dramatically different than I could have created on my own. So I have no regrets whatsoever,

43:45

with Tiger.

with Tiger.

43:47

And,

And,

43:48

with the other businesses, it was interesting. I sold my first project that I mentioned to you when I was thirty.

with the other businesses, it was interesting. I sold my first project that I mentioned to you when I was thirty.

43:55

And

And

43:56

What did you tell can can you say what you sold it for so we have contacts? I mean, it was,

What did you tell can can you say what you sold it for so we have contacts? I mean, it was,

44:01

it was a project that I was a partner in, but the project got sold for over a hundred million dollars. And the and that was in nineteen eighty seven. That was pretty life changing, I'd imagine.

it was a project that I was a partner in, but the project got sold for over a hundred million dollars. And the and that was in nineteen eighty seven. That was pretty life changing, I'd imagine.

44:11

Totally life changing.

Totally life changing.

44:14

But the point is that,

But the point is that,

44:17

what I remember is not so much the dollar amount What I remember is it was heralded as the most successful real estate project

what I remember is not so much the dollar amount What I remember is it was heralded as the most successful real estate project

44:25

in Metropolitan history in terms of financial return.

in Metropolitan history in terms of financial return.

44:29

And

And

44:31

So,

So,

44:32

but but it took me a couple years to kind of find myself again because I went from being one of the top hundred developers in the country.

but but it took me a couple years to kind of find myself again because I went from being one of the top hundred developers in the country.

44:41

I also had the advantage. I had a partner.

I also had the advantage. I had a partner.

44:43

The project

The project

44:44

was my idea.

was my idea.

44:46

But selling was his idea.

But selling was his idea.

44:49

And he never would have got into that project. If he hadn't been my partner,

And he never would have got into that project. If he hadn't been my partner,

44:53

And I never would have sold it if I hadn't been his partner.

And I never would have sold it if I hadn't been his partner.

44:56

And we sold at the end, at that point, a hundred percent, ninety nine percent of what we were worth was tied up in that project. And if somebody had got hurt or killed in construction,

And we sold at the end, at that point, a hundred percent, ninety nine percent of what we were worth was tied up in that project. And if somebody had got hurt or killed in construction,

45:09

you know, it could've it could've wiped us out.

you know, it could've it could've wiped us out.

45:11

And so we sold and we closed in January of eighty seven,

And so we sold and we closed in January of eighty seven,

45:16

and in October eighty seven, the market crashed.

and in October eighty seven, the market crashed.

45:19

And,

And,

45:20

real estate followed after that. And we had been one of the top hundred developers,

real estate followed after that. And we had been one of the top hundred developers,

45:25

and we might have been one of five developers in the whole country

and we might have been one of five developers in the whole country

45:29

that had lots of capital

that had lots of capital

45:31

and no buildings to weigh us down with the problems

and no buildings to weigh us down with the problems

45:34

from the market crash So that gave us an extraordinary opportunity to get back in at the bottom.

from the market crash So that gave us an extraordinary opportunity to get back in at the bottom.

45:41

And I did that by creating a company that bought distressed

And I did that by creating a company that bought distressed

45:44

real estate from banks and went on to buy close to a billion dollars. What became a billion dollars of assets.

real estate from banks and went on to buy close to a billion dollars. What became a billion dollars of assets.

45:51

Wow.

Wow.

45:52

When

When

45:53

when people

when people

45:55

one of the surprising things when I

one of the surprising things when I

45:58

kinda started

kinda started

45:59

when when when I sold was I had never heard of this thing called an asset backed loan, which is like basically one example of that is when rich people buy a home, you'll hear that they bought, like, a five or ten million dollar home in cash, and oftentimes what that really means is they're using this thing called an asset backed loan. So basically, if you have a stock portfolio

when when when I sold was I had never heard of this thing called an asset backed loan, which is like basically one example of that is when rich people buy a home, you'll hear that they bought, like, a five or ten million dollar home in cash, and oftentimes what that really means is they're using this thing called an asset backed loan. So basically, if you have a stock portfolio

46:20

of ten million dollars and it's like in a Vanguard index fund, or some basic thing like that, you can borrow like sixty or seventy five percent of that at

of ten million dollars and it's like in a Vanguard index fund, or some basic thing like that, you can borrow like sixty or seventy five percent of that at

46:29

at a given a very, very low interest rate as low as one percent.

at a given a very, very low interest rate as low as one percent.

46:33

What was what were some some what are some surprising things that people who come into money after selling their company that they, that they see and you're like, it like when I when my banker told me about that, I was like, are you kidding me? This is like this is how people do it. This is amazing. What are some other things that kinda fit in that category? So I'm sorry, but I would never do that. Most Tiger members, yeah, yeah, most Tiger members wouldn't for two reasons.

What was what were some some what are some surprising things that people who come into money after selling their company that they, that they see and you're like, it like when I when my banker told me about that, I was like, are you kidding me? This is like this is how people do it. This is amazing. What are some other things that kinda fit in that category? So I'm sorry, but I would never do that. Most Tiger members, yeah, yeah, most Tiger members wouldn't for two reasons.

46:59

One,

One,

47:00

I don't have any debt. I wouldn't want any debt. It, debt can be very corrosive at exactly the wrong time. You know, the market has just gone down. For people who are levered. They could have been wiped out. If you wanna be here for the long term and preserve wealth, I would argue you want as little debt as possible.

I don't have any debt. I wouldn't want any debt. It, debt can be very corrosive at exactly the wrong time. You know, the market has just gone down. For people who are levered. They could have been wiped out. If you wanna be here for the long term and preserve wealth, I would argue you want as little debt as possible.

47:18

I'm not suggesting that's a good idea. No. No. No. I understand. It's an interesting option that people have. Like, they used to pay taxes.

I'm not suggesting that's a good idea. No. No. No. I understand. It's an interesting option that people have. Like, they used to pay taxes.

47:24

Sure.

Sure.

47:25

But the other the other part of it is that one

But the other the other part of it is that one

47:29

percent can be illusory

percent can be illusory

47:31

because the rate can go up if it's a floating rate And if you have a spike in interest rates and you made assumptions

because the rate can go up if it's a floating rate And if you have a spike in interest rates and you made assumptions

47:38

that you were borrowing at that low interest rate, and then it goes up, you can really recap it with your balance sheet. So I one of the things,

that you were borrowing at that low interest rate, and then it goes up, you can really recap it with your balance sheet. So I one of the things,

47:48

that

that

47:49

most Tiger members enjoy when they reach a level of wealth

most Tiger members enjoy when they reach a level of wealth

47:54

is the ability not to have debt hanging over them. Now having said that,

is the ability not to have debt hanging over them. Now having said that,

47:59

Who are the best managers of debt? Well, private equity firms and real estate

Who are the best managers of debt? Well, private equity firms and real estate

48:05

is the place where most debt is

is the place where most debt is

48:09

So people who've spent a career

So people who've spent a career

48:11

managing debt understand the power of it, but they just understand that at some point, you wanna reduce risk

managing debt understand the power of it, but they just understand that at some point, you wanna reduce risk

48:17

and take chips off the table.

and take chips off the table.

48:20

I think the other thing is something you said before.

I think the other thing is something you said before.

48:23

Not everybody fully appreciates

Not everybody fully appreciates

48:26

Why they became successful?

Why they became successful?

48:28

Because for every person who had a plan,

Because for every person who had a plan,

48:31

somebody else was

somebody else was

48:33

lucky, let's say. Doesn't mean that they didn't have a plan, but fundamentally

lucky, let's say. Doesn't mean that they didn't have a plan, but fundamentally

48:38

they're lucky. And it's just a statistical thing. The The number of people who've had two successes

they're lucky. And it's just a statistical thing. The The number of people who've had two successes

48:45

is dramatically smaller

is dramatically smaller

48:47

than the number of people. It's a bell curve of who's had one success and for people to have three and four successes

than the number of people. It's a bell curve of who's had one success and for people to have three and four successes

48:54

gets down into the, you know, one in a thousand entrepreneurs

gets down into the, you know, one in a thousand entrepreneurs

48:58

or something. And I think that

or something. And I think that

49:01

Many people

Many people

49:02

systematically

systematically

49:04

overestimate

overestimate

49:05

their own skills

their own skills

49:06

when they've been successful

when they've been successful

49:08

and there's a real comeuppance

and there's a real comeuppance

49:10

that after they sell their first successful business,

that after they sell their first successful business,

49:14

they assume they'll be successful in the next one and they get their clock handed to them as I did when I was thirty was a very painful lesson, but it was the most valuable lesson. Well, I, sold this amazing project,

they assume they'll be successful in the next one and they get their clock handed to them as I did when I was thirty was a very painful lesson, but it was the most valuable lesson. Well, I, sold this amazing project,

49:28

when I was thirty, and then I started a business

when I was thirty, and then I started a business

49:32

in the real estate information. This is before the internet. You know, pretty much what Zillow is today where you can look up any house and get a price on it. We created

in the real estate information. This is before the internet. You know, pretty much what Zillow is today where you can look up any house and get a price on it. We created

49:42

a business that was a precursor to Zillow before there was an internet. It was How much of your of your net worth from the previous thing did you invest into this new thing?

a business that was a precursor to Zillow before there was an internet. It was How much of your of your net worth from the previous thing did you invest into this new thing?

49:53

Oh,

Oh,

49:54

I probably risk

I probably risk

49:56

somewhere between

somewhere between

49:57

when the order at twenty five percent, something like that. And so one of the biggest

when the order at twenty five percent, something like that. And so one of the biggest

50:03

one of the biggest,

one of the biggest,

50:06

learnings is

learnings is

50:09

When you sell a business,

When you sell a business,

50:12

you know, many people think they're great investors

you know, many people think they're great investors

50:15

because when they own a business,

because when they own a business,

50:17

If they make an investment, they have to talk about it at a cocktail party. And if they lose in money on an investment, it gets swept under the carpet because the business itself is profitable, so it covers up those losses.

If they make an investment, they have to talk about it at a cocktail party. And if they lose in money on an investment, it gets swept under the carpet because the business itself is profitable, so it covers up those losses.

50:30

So many people who've been successful entrepreneurs

So many people who've been successful entrepreneurs

50:33

don't realize how poorly they are as investors because they've never been battle tested without the benefit of the company

don't realize how poorly they are as investors because they've never been battle tested without the benefit of the company

50:41

providing,

providing,

50:42

you know, the fill if you make a mistake. So I think I think the one of the biggest mistakes that people who sell business

you know, the fill if you make a mistake. So I think I think the one of the biggest mistakes that people who sell business

50:50

make, and it's, what you said before,

make, and it's, what you said before,

50:53

is that they're,

is that they're,

50:54

that they assume they can do it again and again and only a portion of people who've been successful once are gonna be successful twice.

that they assume they can do it again and again and only a portion of people who've been successful once are gonna be successful twice.

51:03

But when you're talking about earning money, what about spending money?

But when you're talking about earning money, what about spending money?

51:07

Like something that I ask myself is

Like something that I ask myself is

51:11

I'm quite frugal and I say like I don't want to buy this, this, and this because it costs too much money and I just don't. It just and some stuff like owning,

I'm quite frugal and I say like I don't want to buy this, this, and this because it costs too much money and I just don't. It just and some stuff like owning,

51:20

you know, a lot of like objects in my home. It kind of just stresses me out because I feel like I gotta take care of it, but then there's other things like flying nicely or staying at fancy hotels where I was like I don't want to spend money on that and then I was like, well, you know what? That actually makes me happier. Like this is fun for me. I should spend because that I feel it like You know about the marshmallow test?

you know, a lot of like objects in my home. It kind of just stresses me out because I feel like I gotta take care of it, but then there's other things like flying nicely or staying at fancy hotels where I was like I don't want to spend money on that and then I was like, well, you know what? That actually makes me happier. Like this is fun for me. I should spend because that I feel it like You know about the marshmallow test?

51:39

Yeah. About grad.

Yeah. About grad.

51:41

Delayed gratification. Yeah. Delayed gratification.

Delayed gratification. Yeah. Delayed gratification.

51:43

So Should I tell it for your list? Yeah. Go for it. Yeah. Yeah. It's a very famous,

So Should I tell it for your list? Yeah. Go for it. Yeah. Yeah. It's a very famous,

51:48

very famous test that was done at Stanford

very famous test that was done at Stanford

51:51

in the, I think, fifties or early sixties. And, you know, they put a table of twelve,

in the, I think, fifties or early sixties. And, you know, they put a table of twelve,

51:56

three year olds or four year olds out and they put one marshmallow in front of each of the kids. And they said, look, I'm gonna step out of the room. If you don't touch the marshmallow while I'm gone,

three year olds or four year olds out and they put one marshmallow in front of each of the kids. And they said, look, I'm gonna step out of the room. If you don't touch the marshmallow while I'm gone,

52:09

When I come back, I'm gonna give you another marshmallow,

When I come back, I'm gonna give you another marshmallow,

52:12

and only one or two of the kids could

and only one or two of the kids could

52:15

wait

wait

52:16

for the person twenty minutes to come back. They just had to eat the marshmallow in front of them. Those one or two could handle delayed gratification.

for the person twenty minutes to come back. They just had to eat the marshmallow in front of them. Those one or two could handle delayed gratification.

52:25

And it turns out that they tracked,

And it turns out that they tracked,

52:28

many kids

many kids

52:29

who went through this. And the very few who could delay gratification

who went through this. And the very few who could delay gratification

52:33

We're more successful in school, more successful in life, and more successful in business

We're more successful in school, more successful in life, and more successful in business

52:39

by various measures

by various measures

52:41

over the next thirty to fifty years of their life. It's a remarkable study,

over the next thirty to fifty years of their life. It's a remarkable study,

52:45

and it has to do with what I was saying before. When you're an entrepreneur, as apparently you work,

and it has to do with what I was saying before. When you're an entrepreneur, as apparently you work,

52:51

You had to delay gratification because you were putting money into your business. You couldn't you couldn't do all the things others who were making a lot less, but didn't have a business we're doing. And delayed gratification,

You had to delay gratification because you were putting money into your business. You couldn't you couldn't do all the things others who were making a lot less, but didn't have a business we're doing. And delayed gratification,

53:03

the discipline of delayed gratification

the discipline of delayed gratification

53:06

is at the core of

is at the core of

53:08

entrepreneurial

entrepreneurial

53:09

success. But frankly, when you're

success. But frankly, when you're

53:11

a movie star or a rock star or a baseball pitcher or a basketball player, delayed gratification

a movie star or a rock star or a baseball pitcher or a basketball player, delayed gratification

53:17

isn't so much at the core of your success because you don't need to scrimp and save. You need to practice and and be well.

isn't so much at the core of your success because you don't need to scrimp and save. You need to practice and and be well.

53:25

So When people sell,

So When people sell,

53:28

you know, there's a syndrome where somebody's been very successful, but they've been delaying gratification

you know, there's a syndrome where somebody's been very successful, but they've been delaying gratification

53:33

so long that they only open up one step at a time. They still are driving a Chevy. They still are wearing a certain kind of suit. They're wearing a timex watch. But they go on a great vacation, or they go on a mediocre vacation, but they're wearing a really expensive watch. You find when people have sold their business, they open up slowly because

so long that they only open up one step at a time. They still are driving a Chevy. They still are wearing a certain kind of suit. They're wearing a timex watch. But they go on a great vacation, or they go on a mediocre vacation, but they're wearing a really expensive watch. You find when people have sold their business, they open up slowly because

53:55

they wanna they wanna be smart and they don't wanna waste, and they have to find that new balance. But, you know, we have a rule at Tiger, which I think is the most important rule. It's called the two percent rule. If you've been lucky enough to sell a business,

they wanna they wanna be smart and they don't wanna waste, and they have to find that new balance. But, you know, we have a rule at Tiger, which I think is the most important rule. It's called the two percent rule. If you've been lucky enough to sell a business,

54:08

one gauge you can think about is if you're solely

one gauge you can think about is if you're solely

54:13

living on the investments in your portfolio.

living on the investments in your portfolio.

54:18

If you can live on two percent of your assets or less,

If you can live on two percent of your assets or less,

54:22

then you're in a safety zone. And, obviously, some people have the good fortune to earn a lot more than two or three or four percent on their assets so they can live on a little more. But once you start living on more than two percent,

then you're in a safety zone. And, obviously, some people have the good fortune to earn a lot more than two or three or four percent on their assets so they can live on a little more. But once you start living on more than two percent,

54:36

you're actually starting to stress

you're actually starting to stress

54:39

the ability to preserve capital. And my guess is if you if you went to a whole bunch of twenty five year old kids and said, you know, if you inherited a million dollars, how much could you spend a year and preserve the money? You'd be shocked a lot of kids would say, I don't know, a hundred thousand or two hundred thousand a year. It's twenty thousand a year. And, that learning is really fabulous.

the ability to preserve capital. And my guess is if you if you went to a whole bunch of twenty five year old kids and said, you know, if you inherited a million dollars, how much could you spend a year and preserve the money? You'd be shocked a lot of kids would say, I don't know, a hundred thousand or two hundred thousand a year. It's twenty thousand a year. And, that learning is really fabulous.

55:02

I is,

I is,

55:03

there's this,

there's this,

55:05

funny cool subreddit subreddit,

funny cool subreddit subreddit,

55:08

a forum that I go to. And it's called fat fire. You know, you know what fire is like fire is like financially independent retired early. Fat fire and typically fires like people who wanna save, like, a million dollars and live off, like, fifty thousand a year, fatifiers people who wanna, like, earn a a huge, you know, a much larger and live somewhat lavishly.

a forum that I go to. And it's called fat fire. You know, you know what fire is like fire is like financially independent retired early. Fat fire and typically fires like people who wanna save, like, a million dollars and live off, like, fifty thousand a year, fatifiers people who wanna, like, earn a a huge, you know, a much larger and live somewhat lavishly.

55:27

And on that subreddit, the number is like three percent. So it's a little bit higher than two percent, but like three percent. I think there was this thing called the Trinity study and they said like four percent. Frankly, I think that sometimes is too high, but like the, I I kind of buy in the the three percent range. And,

And on that subreddit, the number is like three percent. So it's a little bit higher than two percent, but like three percent. I think there was this thing called the Trinity study and they said like four percent. Frankly, I think that sometimes is too high, but like the, I I kind of buy in the the three percent range. And,

55:43

anyway, there's this one book. Have have you ever heard this guy named, Felix Dennis?

anyway, there's this one book. Have have you ever heard this guy named, Felix Dennis?

55:48

No. I don't think so. He's amazing. He's kinda he's dead now, but he's kinda like a combination of Mick Jagger and Richard Branson. So he was this he was this British entrepreneur and he was kind of flamboyant like Richard Branson and like did a bunch of stuff he was like Mick Jagor in that he was like kind of a degenerate like he loved drugs and hookers and he was like he wrote about like his escapades when he got older. He was like had a drug problem, and I was never married. So I was just like sleeping around, and so he's kind of like a fun guy to read about, but he's got this book called, how to get rich. It's it's kind of a poorly titled in a way that it's like embarrassing to talk about, but it's a quite a good book.

No. I don't think so. He's amazing. He's kinda he's dead now, but he's kinda like a combination of Mick Jagger and Richard Branson. So he was this he was this British entrepreneur and he was kind of flamboyant like Richard Branson and like did a bunch of stuff he was like Mick Jagor in that he was like kind of a degenerate like he loved drugs and hookers and he was like he wrote about like his escapades when he got older. He was like had a drug problem, and I was never married. So I was just like sleeping around, and so he's kind of like a fun guy to read about, but he's got this book called, how to get rich. It's it's kind of a poorly titled in a way that it's like embarrassing to talk about, but it's a quite a good book.

56:23

And he was like, he he eventually founded,

And he was like, he he eventually founded,

56:27

Micro warehouse, which was a publicly traded company, but he also started Max in Magazine. He was a publisher. So he made all of his money in magazines.

Micro warehouse, which was a publicly traded company, but he also started Max in Magazine. He was a publisher. So he made all of his money in magazines.

56:34

And he was like, So I'm gonna die soon because I've got cancer, and I'll I'll die with like a six hundred million dollar net worth. But if I could do it all over again, my goal would have been to make twenty or thirty million dollars by the age of thirty five and not focus on money making ever again and only focus on,

And he was like, So I'm gonna die soon because I've got cancer, and I'll I'll die with like a six hundred million dollar net worth. But if I could do it all over again, my goal would have been to make twenty or thirty million dollars by the age of thirty five and not focus on money making ever again and only focus on,

56:50

like the people I cared about But

like the people I cared about But

56:53

like a boxer who's punk

like a boxer who's punk

56:55

punch drunk, I went back into the ring every time because I was addicted to it even though it It didn't always bring me the the most amount of fulfillment and happiness.

punch drunk, I went back into the ring every time because I was addicted to it even though it It didn't always bring me the the most amount of fulfillment and happiness.

57:04

I just wanna share three reactions to that. The first is There was a band leader from the late sixties or early seventies who was being interviewed a few years ago, and the announcer said, you know, You were the first band to make a million dollars a month.

I just wanna share three reactions to that. The first is There was a band leader from the late sixties or early seventies who was being interviewed a few years ago, and the announcer said, you know, You were the first band to make a million dollars a month.

57:20

No band had ever made that much money. What'd you do with all that money? You guys must be rich. He said, well, we spent about seventy percent on wine, women, and drugs, and wasted all the rest. But but the thing The, the thing with, Mick Jagger is what you don't see is he, like, works out six hours a day. He,

No band had ever made that much money. What'd you do with all that money? You guys must be rich. He said, well, we spent about seventy percent on wine, women, and drugs, and wasted all the rest. But but the thing The, the thing with, Mick Jagger is what you don't see is he, like, works out six hours a day. He,

57:43

he he eats a food regimen that's, like, second to none. And here's a guy who's Maybe maybe Keith was a better example. Yeah. Well, that's important because even with Richard Branson with with his, what, whatever your persona is, you know, he knows how to lever,

he he eats a food regimen that's, like, second to none. And here's a guy who's Maybe maybe Keith was a better example. Yeah. Well, that's important because even with Richard Branson with with his, what, whatever your persona is, you know, he knows how to lever,

58:00

from a marketing point of view. He puts, like, nothing into a business

from a marketing point of view. He puts, like, nothing into a business

58:04

and others invest around his name. So his risk is very low. These are these are people who are real geniuses

and others invest around his name. So his risk is very low. These are these are people who are real geniuses

58:12

at what they do. But the thing that The thing that you didn't mention

at what they do. But the thing that The thing that you didn't mention

58:16

is philanthropy.

is philanthropy.

58:17

Like, how does people

Like, how does people

58:19

create meaning?

create meaning?

58:21

I, I think that people who've created a certain amount of wealth and then say a higher percentage

I, I think that people who've created a certain amount of wealth and then say a higher percentage

58:27

of what I'm gonna make. I'm gonna give back to causes that I believe in and try and make the world a better place. I think that's a a really important way to get meaning. So that guy who made six hundred and said I should have just made thirty Maybe he should have just been a little more philanthropic and and looked around the world and said I can make an impact in a positive way. Have you heard of this book called you got a ton of books behind you. So maybe you have

of what I'm gonna make. I'm gonna give back to causes that I believe in and try and make the world a better place. I think that's a a really important way to get meaning. So that guy who made six hundred and said I should have just made thirty Maybe he should have just been a little more philanthropic and and looked around the world and said I can make an impact in a positive way. Have you heard of this book called you got a ton of books behind you. So maybe you have

58:54

it looks like you read a lot. There's this book called

it looks like you read a lot. There's this book called

58:56

dying

dying

58:57

with zero. It's by this hedge fund guy named Bill Perkins, and I've just started reading it, but it sounds like the premise of the book is basically like

with zero. It's by this hedge fund guy named Bill Perkins, and I've just started reading it, but it sounds like the premise of the book is basically like

59:07

spend, like, if you're gonna give instead of giving away money when you're dead, like, give your kids the money now. So if they wanna buy a home or do something, like, maybe you can enjoy it together. If you want to leave money to a certain cause, just give it now because you'll be able to see you'll be able to see it and you can all get a little more joy out of that. Sure.

spend, like, if you're gonna give instead of giving away money when you're dead, like, give your kids the money now. So if they wanna buy a home or do something, like, maybe you can enjoy it together. If you want to leave money to a certain cause, just give it now because you'll be able to see you'll be able to see it and you can all get a little more joy out of that. Sure.

59:26

Well, that that was the biggest debate.

Well, that that was the biggest debate.

59:29

You know, for many years, Warren Buffett said I'm leaving a big foundation when I die.

You know, for many years, Warren Buffett said I'm leaving a big foundation when I die.

59:34

And

And

59:35

he said, because I'm growing my capital so quickly

he said, because I'm growing my capital so quickly

59:39

that by leaving it in my portfolio,

that by leaving it in my portfolio,

59:42

leave so much more. And Bill Gates

leave so much more. And Bill Gates

59:45

made the argument with him. Yes. But what's the value of a life saved today?

made the argument with him. Yes. But what's the value of a life saved today?

59:50

Versus the life only saved thirty years from now when you die. And some things aren't financial calculations.

Versus the life only saved thirty years from now when you die. And some things aren't financial calculations.

59:56

So the point that you're making is There's a lot of value to being philanthropic

So the point that you're making is There's a lot of value to being philanthropic

01:00:02

both with your time and your money earlier on and not just,

both with your time and your money earlier on and not just,

01:00:06

later on. And I think

later on. And I think

01:00:08

One of the things that,

One of the things that,

01:00:10

is really important is many entrepreneurs

is really important is many entrepreneurs

01:00:13

have a lot more than money. They have skills and insights and contacts

have a lot more than money. They have skills and insights and contacts

01:00:17

that they can lever philanthropically.

that they can lever philanthropically.

01:00:20

So I do believe,

So I do believe,

01:00:22

in being as active as possible,

in being as active as possible,

01:00:24

to make climate is my number one issue. And so I'm involved in climate, both politically philanthropically

to make climate is my number one issue. And so I'm involved in climate, both politically philanthropically

01:00:31

and in the way I invest. And that's given me a lot of feeling at least of I'm doing as much as I can. Good.

and in the way I invest. And that's given me a lot of feeling at least of I'm doing as much as I can. Good.

01:00:38

Well, last two questions.

Well, last two questions.

01:00:40

First,

First,

01:00:43

The the interesting thing about this your business Tiger twenty one is

The the interesting thing about this your business Tiger twenty one is

01:00:48

from an outside, it seems like It seems like the vast majority of the value is your, like, eight or ten person or fifteen person would, your, your group which means

from an outside, it seems like It seems like the vast majority of the value is your, like, eight or ten person or fifteen person would, your, your group which means

01:00:59

I would think that there's a lot of pressure or not pressure, but there's a lot of faith that the facilitator, like you need that facilitator to be good. And if your facilitator stinks, then that could potentially ruin

I would think that there's a lot of pressure or not pressure, but there's a lot of faith that the facilitator, like you need that facilitator to be good. And if your facilitator stinks, then that could potentially ruin

01:01:11

the experience.

the experience.

01:01:12

Which almost is like your business is almost decentralized.

Which almost is like your business is almost decentralized.

01:01:15

Like, you know, different customers will have drastically different experiences potentially regardless of what's happening at HQ.

Like, you know, different customers will have drastically different experiences potentially regardless of what's happening at HQ.

01:01:23

How are you? How do you make sure your facilitators are good and are providing a valuable experience?

How are you? How do you make sure your facilitators are good and are providing a valuable experience?

01:01:27

So I think what you're searching for is kind of a classic example of would you rather own

So I think what you're searching for is kind of a classic example of would you rather own

01:01:33

three hundred gas stations

three hundred gas stations

01:01:35

or one oil refinery?

or one oil refinery?

01:01:37

If they're both worth the same amount of money. Well, the answer's obvious on that one, I think. Which is what?

If they're both worth the same amount of money. Well, the answer's obvious on that one, I think. Which is what?

01:01:43

Multiple. I mean, it's like you don't want you don't want you don't want,

Multiple. I mean, it's like you don't want you don't want you don't want,

01:01:47

all your, you don't want one big ass customer. You would it'd be nice to have a hundred in one that are equal. But the fact is if you have three hundred gas stations that have all the same label on them, the same name.

all your, you don't want one big ass customer. You would it'd be nice to have a hundred in one that are equal. But the fact is if you have three hundred gas stations that have all the same label on them, the same name.

01:01:58

You have a brand exposure that if something bad happens in one of them, it could affect

You have a brand exposure that if something bad happens in one of them, it could affect

01:02:04

people's demand for the other. So

people's demand for the other. So

01:02:06

our only asset is our people.

our only asset is our people.

01:02:09

Both our team, our chairs that facilitate the groups, and our members. And we spend we have, like, a private university. We spend fortunes of time

Both our team, our chairs that facilitate the groups, and our members. And we spend we have, like, a private university. We spend fortunes of time

01:02:19

screening the facilitators,

screening the facilitators,

01:02:21

and then providing lots of opportunities

and then providing lots of opportunities

01:02:24

for the facilitators

for the facilitators

01:02:25

to learn from one another. Our facilitators

to learn from one another. Our facilitators

01:02:29

come in from all we call them chairs of the groups, they come in from all over the world to learn best practices from each other, and we track all of the relevant metrics to see which groups are performing well, which groups are not performing well. And, of course, the most important thing is that

come in from all we call them chairs of the groups, they come in from all over the world to learn best practices from each other, and we track all of the relevant metrics to see which groups are performing well, which groups are not performing well. And, of course, the most important thing is that

01:02:47

We have zero tolerance

We have zero tolerance

01:02:49

for,

for,

01:02:50

anything less than high integrity and maintenance of confidence if somebody, if a member or a chair

anything less than high integrity and maintenance of confidence if somebody, if a member or a chair

01:02:57

ever violated that they would be out in a second. So I'd say that maybe,

ever violated that they would be out in a second. So I'd say that maybe,

01:03:03

besides

besides

01:03:04

the core asset,

the core asset,

01:03:07

being our,

being our,

01:03:08

team and our members

team and our members

01:03:11

the thing we protect the most is our brand

the thing we protect the most is our brand

01:03:14

by being really true to what what it stands for. And I don't think we've ever compromised

by being really true to what what it stands for. And I don't think we've ever compromised

01:03:20

on trying to put members first. That's that's kind of what we're about. I'm a I'm a member first. Well, most of the value that I've gotten out of being a member of Tiger,

on trying to put members first. That's that's kind of what we're about. I'm a I'm a member first. Well, most of the value that I've gotten out of being a member of Tiger,

01:03:29

has been being a member.

has been being a member.

01:03:31

The fact that I've owned today,

The fact that I've owned today,

01:03:33

little more than half the business is almost irrelevant

little more than half the business is almost irrelevant

01:03:37

to the value that I've gotten by being a member and all the opportunities

to the value that I've gotten by being a member and all the opportunities

01:03:41

that I share with all the other members that come my way as a member. Well, you're awesome. The reason I wanted to talk to you was because I've,

that I share with all the other members that come my way as a member. Well, you're awesome. The reason I wanted to talk to you was because I've,

01:03:50

I know of Tiger. I've thought about joining. I've got friends that are part of it. And I love the business model. My business was, was

I know of Tiger. I've thought about joining. I've got friends that are part of it. And I love the business model. My business was, was

01:03:57

tangentially related, but not quite the same thing. It was community based, and

tangentially related, but not quite the same thing. It was community based, and

01:04:02

I hadn't read or seen too many interviews with you, and so I'm happy that we got to talk because,

I hadn't read or seen too many interviews with you, and so I'm happy that we got to talk because,

01:04:08

I wanted to kinda explore this, but you're you're you're

I wanted to kinda explore this, but you're you're you're

01:04:12

You're cool as hell. I appreciate you taking the time. This is awesome. Thanks so much for having me. It was a pleasure.

You're cool as hell. I appreciate you taking the time. This is awesome. Thanks so much for having me. It was a pleasure.

01:04:17

If people wanna do you use Twitter or anything. People wanna find you. Do you wanna point them anywhere?

If people wanna do you use Twitter or anything. People wanna find you. Do you wanna point them anywhere?

01:04:24

I'm on LinkedIn. I don't use Twitter. I don't I'm I I don't use Facebook,

I'm on LinkedIn. I don't use Twitter. I don't I'm I I don't use Facebook,

01:04:30

but I'm available through LinkedIn, and,

but I'm available through LinkedIn, and,

01:04:34

it's kind of easy. It's michael dot sonnfeld at tiger twenty one dot com.

it's kind of easy. It's michael dot sonnfeld at tiger twenty one dot com.

01:04:39

Hell yeah. Thank you, man. I appreciate it. Thank you.

Hell yeah. Thank you, man. I appreciate it. Thank you.

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