Here's How We're Investing Our Money

Sam Parr

Johnny volk he asked what are you both personally investing in right now

Shaan Puri

by the way do you know johnny volk do you know who this is

Sam Parr

he I talked to him on twitter and he's joe speiser's buddy

Shaan Puri

He lives out here in the Bay Area, about 15 minutes away from me. He's a super successful e-commerce guy, been in e-com for 10 years. He sold his company recently, like a month ago or something, for tens of millions of dollars. He's a big investor in my rolling fund and several other rolling funds, and he's an ultra-nice guy. So this guy is super legit. He's asking, "What are you both personally investing in?" Do you want to go first? I think your answer is probably more interesting.

Sam Parr

I'll go first. So right now, the bulk of my liquid net worth is in publicly traded companies. I own a bunch of HubSpot right now. I own a bunch of Airbnb. Besides that, I don't own anything else above $50,000. That's all it's in.

Shaan Puri

so you're super concentrated in those two companies basically

Sam Parr

Yeah, but then I have more money in the S&P 500. So, like the total stock market index, I’m going to invest around $250,000 to $500,000 in the next probably 18 months in startups. I own six figures worth of investments in a variety of real estate funds, including Sweaty Startup in Vancouver. Then, I own my house and I'm in the process of buying multifamily properties. So, I would say I have like...

Shaan Puri

If you just broke it out, you're like, "You know, roughly, okay, 70% is in the stock market." Really, in the two companies, you know, where my wife works and where I work, something like that.

Sam Parr

No, I own way more S&P 500 than I do HubSpot and Airbnb. But I would say that 90% of my net worth is in the S&P 500, yeah.

Shaan Puri

Oh wow, S&P. Okay, so just like a low, low, low-cost index fund, basically a Vanguard fund.

Sam Parr

Simple stuff. My goal is to invest somewhere around 1 to 3% of my net worth over a period of time into angel investments.

Shaan Puri

Gotcha. Cool, and then some real estate mixed in. Real estate being, you know, the house you live in and some other projects other people are doing. You're not currently buying and owning real estate at the moment?

Sam Parr

I'm going... I own my house, but I'm going to buy 16 units. I also have, I mean, I'll say like half a million dollars in cash just sitting in a checking account, which I think is too much money. When I bought my car, I just paid cash out of there. I own six figures of Bitcoin and Ethereum, of which I owned most of that Bitcoin from 2013. I just bought like $75,000 worth of Ethereum a few days ago because you and a few others told me it was interesting.

Shaan Puri

Nice! By the way, we got some criticism—constructive criticism, I would say—which was like, "Oh, the last few episodes feel like, you know, rich guys talking about ways to make a bunch of money." Honestly, that's a good description for the podcast, but I get what the person's saying because they're a fan. They're like, "That's me raising my hand," because I think I basically was like, "Oh, this BigClap thing is cool, and it sounds like a total Ponzi scheme." So people are like, "What do you got?" Or we're talking about Jack selling an NFT for like $70,000,000, so it just sounds a little bit crazy. I think, you know, although I think your answer is great because I like knowing how people invest their money, most people are very closely guarded with that info. People don't tell you what the hell they're doing, so you're kind of on your own to figure stuff out. You don't really have any data points to triangulate because all the wealthy people don't want to talk about what they're doing with their wealth unless it's with other really wealthy people. So I think it's great you said that, but as you were saying it, that was just ringing in my head of like some guy being like, "Why are you guys just talking about money?" But it's like, well, that's also the theme of the podcast in a way.

Sam Parr

Right, that was also the question I'm trying to answer truthfully. But also, when we started this podcast... when you started this podcast a year and a half ago or 2 years ago, it really wasn't a bunch of rich guys talking. It was a bunch of *hopefully soon-to-be rich guys* talking about stuff. We've been talking about the same stuff the whole time.

Shaan Puri

yeah oh you mean us yeah yeah at

Sam Parr

that.

Shaan Puri

Yeah, because... I also put this out there in the manifesto when I started this thing. I think it's unfortunate that talking about money—how to make money and what you do with money to earn more—is considered taboo. It's kind of seen as low class or something to talk about. The reality is, most people want more money. People try to signal and say, "Oh, it doesn't matter," and all this stuff. I know a lot of people who want more money. Most of the people in my life, if I had the option, would you like more salary or less? Would you like more in your bank account or less? The answer is more. If all the people who have money are really guarded and don't talk about it, and don't want to seem like they're bragging, what that really does is trap the information from others. That's kind of my overall view of it. I know you're similar because I remember being kind of stunned when we first became friends. You just Facebook messaged me and asked, "How much do you make?" I was like, "Whoa, whoa, bro, what's going on here?" But I was like, "Okay, you know, ballsy question."

Sam Parr

The reason why I actually dislike that view is that if someone criticizes you for talking about money, it's because they are making the assumption that, because you have money or because you don't, you are somehow better or worse. In my opinion, just because you have money, that gives you no intrinsic value to me. You either are interesting or you are not interesting. What makes you interesting to me is that people are just trying ambitious stuff and doing neat things. Oftentimes, that's correlated with money, but it's not always the case. I knew this lady who would do these amazing art exhibits where she would paint gold phones and just do interesting stuff. I was like, "Wow, that's super badass! That's so bold of you to try that." She wasn't wealthy at all, but I thought it was so cool. To me, it's about just being an interesting person. I don't really care if it's money-related or not, but oftentimes it is.

Shaan Puri

Right, for me, I have like 3 or 4 different life games that I'm very interested in. Let's say right now I'm interested in the fitness game. I'm a total beginner; I'm a white belt at the fitness game. I have a trainer who's more like a black belt. You know, look at his body, look at his lifestyle—he's extremely healthy. So, I want to learn about the fitness game. I also like learning about the happiness game. How do you become a happy person? How do you control your mood? How do I master my mood? I'm really interested in that, and I think about it a lot. I talk to people about that. Then there's the money game, and there's also the making things that people want game. I like all of these games, and I admire the people who have done well in them. I'm better at some than others. In some, I'm a total beginner, and in others, I'm like a blue belt or a purple belt—where I've done something, but I'm by no means at the end. Anyways, that's a tangent, but to answer John's question, did you want to say something else about that?

Sam Parr

no I answered

Shaan Puri

To answer John's question, I'm kind of similar. I probably tweeted out my holdings a while back; maybe I'll do that again. I need to go back and recalculate, but I tend to hold about **10%** of my wealth in cash. I think cash is being devalued, and I don't want to hold cash. Cash doesn't earn... you know, cash sitting in the bank is nice for a rainy day, but it doesn't earn you more money, right? The **0.001%** I get from Wells Fargo or whoever is not going to help me. I have a good-sized stock portfolio. Basically, I would say beyond that, it's almost like **50/50** of public equities—so stocks—and, you know, crypto right now. Then there's angel investing. I'm currently angel investing through the rolling fund, **$4,000,000** a year, but that's not my money; that's mostly other people's money, and I get a carry on that. I get a **20%** carry of the profits, so that's kind of like investing, but I'm not investing my own money there. I'm looking at real estate right now, but the problem with real estate for me has always been: a) I'm a beginner at that game, and b) I don't want to sign up for more work. So I'm looking for ways to get real estate that I directly own, but I don't have to do a ton of work. Those two are kind of at opposites with each other. I don't invest in other people's real estate funds right now.

Sam Parr

Has your net worth or total portfolio increased a significant amount since your deal? It seems like you weren't very active before, and now you are very active. Has that helped you?

Shaan Puri

It has increased because, you know, the stock market's been doing amazing the last few years. Then with the deal, you know, like when we got bought, the Amazon stock price was $18.50. The Amazon stock price today is $311.00. So just while working there, you're going to get pretty significant gains in your holdings. Because we got bought, a large chunk of the RSUs were just in that one company, so that did well. Crypto has done extremely well as well. Bitcoin has done extremely well, and Ethereum has done extremely well. So those have really worked. Then, kind of like the side hustle money from the podcast, email newsletter, stuff like that, sponsorships, that sort of thing has been really nice. So that's actually picked up as well, where I wasn't doing that before. So I'd say, yeah. But I would also say what really changed was my attitude. I just started acting like a guy who's got $100,000,000, for better or for worse. I take bets that are kind of too big for my bankroll sometimes, and that's a risk. I might pay the price, but I sort of just started carrying myself and acting like, and basically making decisions like, "What if I wasn't worried about money? What if I wasn't worried about, you know, going from A to B? What if I just knew that I'd get to B pretty much regardless? How would I bet if that was the case?" So I started making slightly larger bets and just being more active, whereas before I was a little more conservative with how I was investing. Much higher.

Sam Parr

Which is a huge difference in our philosophies. I'm way more conservative than you—way more conservative. Yeah, and I don't think I was telling Abreu. He was like, because I told him I started angel investing, he was like, "Who do you think is gonna have a better portfolio?" And I was like, "That's kind of interesting." My answer to him was, I think my portfolio has a higher chance of being pretty good, whereas Sean's portfolio has a higher chance of being amazing or zero.

Shaan Puri

Yeah, I think that's true. That's definitely true. I guess the style of who you admire sort of dictates what you do and what blueprint you create. For example, I was really inspired by Chris Sacca's approach. He went from being, you know, a bit of a degenerate gambler like me. He took his law school money and was day trading in the stock market during the dot-com boom. He rode it up to $10,000,000, taking $25,000 and turning it into $10,000,000. Then, he went in the hole for $4,000,000. That was a crazy degenerate gambling run. If you haven't heard me talking about my bets in crypto, you know I used to play poker. I obviously have a gambling problem too, right? So, I have that risk and reward profile. But then, the other thing he did that I found pretty inspiring was that he bet on someone he believed in, which was Ev Williams when he started what became Twitter. When he saw that it was a winner, he went all in in a way that most people do not. Most people would have let their $25,000 check sit and been really excited, fingers crossed, hoping Twitter becomes a thing. He quit his job and started showing up at the office every day, asking, "How are we going to make this thing grow? I want this thing to grow." He went out and personally fundraised for the company, even though he wasn't part of it. He was out there pitching investors to invest in Twitter. Then, he ended up buying $1,000,000,000 of Twitter stock before it went IPO and was their first or second largest shareholder at IPO. He made $1,000,000,000 off of his Twitter holdings because he knew when you have a winner, you have to go all in. What I've seen in technology is that the winners get really, really big. You want to play small bets initially and then follow on really hard. When you see something that actually works, be really bold in your approach. If you strike out, I kind of just think about it like this: I have a lot of faith in my skills. Even if I went to $0 today, I think in three years, I'd be right back where I want to be, right back where I am today. So, I don't feel like there's a huge risk in terms of that. But anyways, that's a little bit off topic for one question.

Sam Parr

Alright, let's do the next one, which was a question that I actually have for you as well. Update us on your rolling front. Is it what you expected? Are you more or less bullish on it?

Shaan Puri

It is not what I expected in that I didn't really think too much about it before I started. To be honest, I'm kind of impulsive. I was just like, "Oh yeah, that sounds like a cool idea. Let me try it and see what happens." But I thought, okay, I already angel invested. This is just going to be that with some bigger checks or, you know, do a few more deals. Now that I have to deploy $1,000,000 a quarter, I actually have to carve out more time. I have to consciously go and invest in more companies. So, it's more work than I thought initially. I brought on Romine and Zach; Ben helps me with it. They do a lot of the heavy lifting. For this year's YC batch, Zach himself referred in 22 of the companies. He was the number one, I think, referring to YC, so he knew a bunch of the YC companies before they even got in. We looked at those deals, and then Romine and Zach went through every single deal on Airtable, vetted them, made a list of the interesting ones, did meetings with them, and then brought the most interesting seven to me. They were like, "Hey, we think these are the ones to do." So, I've been able to handle the additional work. It's more than I thought, but I found really good people, so that's helped.

Sam Parr

who's this guy zack

Shaan Puri

Zack is a young engineer. He was a Y Combinator (YC) founder himself, but that company didn't work out. I met him because he listens to the podcast, or I don't know how he reached out, but he's like, "Hey, I heard your thing about rolling funds. I'd love to help. I just want to see a bunch of startups and help a bunch of founders while I think of my next thing." It just turns out he's super well-connected with the young founder community. Because of that, he's referred a huge number of people into YC and into On Deck. He has this really great network and is able to see things earlier than most. So, I brought him into the fund and gave him a chance to have some upside in this thing.

Sam Parr

that's badass and then are you more bullish or less

Shaan Puri

More... yeah, like the same. I don't know. I have a friend, we have a mutual friend, Sully, who wanted to get involved in a business of mine. He texted me something because I was like, "I don't know, is this... I don't want to give up equity, but you know, I think you're good."

Sam Parr

your income thing

Shaan Puri

You're worth it. Yeah, so basically, he goes, "Look, if I try, I win." And with this, I'll try. I just loved it. I was like, "I've just gotta learn a lot from this guy's philosophy in business." He just has zero doubt and fear. I think that's a rare experience.

Sam Parr

You would know more than I do, but this guy Sully, it's him and his brother. I'm not that close with him; I'm friendly with him, but I'm not that close. If you told me that they were worth over $150,000,000, I wouldn't be surprised. They still act like they're poor in a kind of a funny way, which I enjoy. They're...

Shaan Puri

invest humble and they're like super hardworking still

Sam Parr

sully is

Shaan Puri

sully is super humble yeah

Sam Parr

and they invest in everything so these guys are interesting they're 2 brothers

Shaan Puri

Yeah, and Sully is the same way. Actually, when I first met him, I met him at... you hosted the Hustle Con dinner at my office. This is how crazy the world works. This is like one of those things where you can't connect the dots looking forward; you can only connect them when you look back. You reached out, you cold emailed me saying, "Hey, I want to host a dinner at your office." I didn't know who the hell you were, but you made a strong pitch. You said, "I'm going to have all my speakers from my conference there. You can mingle, you know, meet all of them." I was like, "Alright, fair deal. You can use my office." At that dinner, I met Sully. Sully is now my best friend. We've done tons of deals together. You know, that wouldn't have happened if I hadn't said yes to something that was kind of a random thing.

Sam Parr

that's funny

Shaan Puri

At that dinner, I was like, "Dude, this guy's amazing! I've never heard this guy's name before. Why don't people in Silicon Valley know this guy?" So I started googling him. I found this story that back in the day, he sold his company. He had this company that was like building Facebook apps, and he sold it for not a ton of money, but like, you know, good for any normal person.

Sam Parr

like 2,000,000 or $3,000,000 or something like that

Shaan Puri

Between $1,000,000 and $3,000,000 is kind of what it sounded like. So, what did he do with the money? He had been building on the Facebook app platform and saw that his app was growing really quickly. His app wasn't a great business; it was one of those silly Facebook apps. But he thought, "Facebook is not silly." So, he basically took a bunch of that money and, like Chris Sacca, he aggressively started buying up Facebook stock back then before it was public. Then he went to Florida and bought a bunch of real estate. I just thought, "Wow, this guy is really conducting himself well." At that time, I thought of myself as an entrepreneur, but I acted more like an employee. I wasn't playing the game to win; I was playing with these invisible handcuffs on me. I saw these awesome companies, but I didn't even try to invest in them. When I saw that this guy knew something was good, he was like, "How do I take all the money I have and put it into this Facebook thing? I believe in this." Simultaneously, he was going to build his next business right away. I really admired him, and I thought that was a great example to follow.