June 30, 2022

JF2858: The Hierarchy of Passive Investors — How to Know If You’re Winning | Actively Passive Investing Show ft. Travis Watts


 

 

In this episode, Travis explores the idea that in life, there is always someone doing better than you are, and there is always someone doing worse. Rather than competing with and comparing yourself to others, he explains why it is more important to focus on competing with yourself when it comes to passive investing as well as life in general.

 

1. Competing with Yourself

Travis points out that we are constantly bombarded with media praising the billionaires and trillion-dollar companies of the world, but “...if you can learn to compete with yourself and look inward, I think there’s a lot of value in that,” he says. Your main goal should be to go to bed a little wiser than when you were when you woke up, as billionaire Charlie Munger strives to do. 

Travis looks back on different financial milestones in his career: when he was earning a $20K salary, when he first earned a six-figure salary, and when he crossed the millionaire threshold. “There was never a moment that I said, well look, I have a million dollars, but Bill Gates is worth $100 billion,” Travis says. “I’m not trying to be the next Bill Gates.”

 

2. Stoicism and Success

It’s no secret that Travis is a big fan of stoicism and often applies the philosophy to his investing perspective. “The more I reflect on that, I think one big takeaway is this,” Travis says. “There really are no winners in the long run.” We all die in the end, he says, no matter how much money we have accumulated. This knowledge should encourage you to live in the moment and enjoy your life as much as you can while you’re able to.

 

New call-to-action

 

3. Money and Happiness

Happiness, Travis says, has to come from within — from your mindset and what you create. “There is always going to be a hierarchy on anything that you do,” he says. “And there’s always going to be someone who’s done one investment deal, one real estate deal, someone who’s done 10 deals, someone who’s done 100, someone who’s done 1,000 — but it doesn’t matter.” To get to the root of what matters to you, he recommends asking yourself the following questions:

  • What do you need?
  • What do you want?
  • What are you moving towards?
  • Are you happy?

 

 

Click here to know more about our sponsors:

Cash Flow Portal

cash flow

 

Cornell Capital Holdings

 

PassiveInvesting.com

 

 

TRANSCRIPT

Travis Watts: Welcome back, Best Ever listeners, to another episode of The Actively Passive Investing Show. I'm your host, Travis Watts. Today's episode is titled "The hierarchy of passive investors." Something that's been on my mind is that, you know, in life at large, there's levels to everything. There's people who are always entering the investing space, or the real estate syndication space for the very first time, right now, this week, this month, this year; there's people who have already been in the game for five years, or ten years, or twenty years, or forty years. And there's people who make investing their daily study, right? We have licensed financial gurus. I think the point is that there's always somebody above you, there's always somebody below you if you've been in the game a little while; even people like Michael Jordan - greatest basketball player at his time, but then right behind him comes LeBron James. There's always somebody who's surpassing you, and there's people who are falling below your status as you progress and move forward.

The reason that we're covering all of this is to remember to compete with yourself. We're always being bombarded by billboards and advertisements and magazines and newspaper articles, and everyone's always talking about Bill Gates, and Warren Buffett, and Elon Musk, and these billionaires, and all this money, and these trillions of dollars by this particular institution, like a Blackrock, or Blackstone... But if you can learn to compete with yourself and look inward, I think there's a lot of value in that. And as a billionaire Charlie Munger always says, he tries to go to bed a little wiser than he was when he woke up. I think that's really powerful stuff.

In the last episode, I talked a little bit about stoicism, and I've made previous posts and blogs on stoicism. A couple years back I made a "How to be a stoic investor" episode. I'm a big fan of stoicism, and the more I reflect on that, I think one big takeaway is this - there really are no winners in the long run. So think about that with me for a minute here. Even the Elon Musks, even the Bill Gates, even the Warren Buffett, the Carl Icahns - whoever; just, you name a person on this planet who is alive today, who appears to be winning (like Charlie Sheen), we all end up dead. We're all going to die. That's the end result. So no matter how much money you have, we all end up dead. And that's not a depressing thing; that should be a realization for you and I to kind of open our minds and to enjoy the moment, to try to live in the moment, to compete, again, with ourselves. Are we getting better as investors? Not "Is Elon Musk getting better and launching new companies?", what are we doing this year to get better as a passive investor?

Okay, so with that, I digress. I'm getting a little too philosophical. So back to the core of the conversation, the money conversation, the hierarchy of passive investors. So when I got started as a passive investor, around 2015, there were two people in the world that I knew were passive investors. If you'd said, name all the passive investor you possibly can - two people. That's who I knew. And then I was introduced to dozens of other passive investors through a local real estate meetup group over the coming months. And then I started going to these conferences that were nationwide, and all of a sudden I realized there's thousands of passive investors out there. Then I come on board to work with Joe Fairless and Ashcroft capital, and then I realized just that company alone has thousands of passive investors, and they're just one sponsor in the space.

So again, the takeaway here is that there's always another level. Talking about syndication groups - I see a lot of people posting who are newer, that "Hey, we closed our first deal, or we have 100 million assets under management", which is fantastic. And then I remember Ashcroft Capital, 1 billion assets under management. "Oh my gosh, that's mind-blowing." And then you get to 2 billion assets under management. But then you realize, again, there's more levels to the game. You've got these Blackrock, Blackstone with trillions of dollars assets under management. That is just a number I can't even really comprehend.

Break: [00:06:54.15]

Travis Watts: So now let's talk about wealth for a minute and all the different levels there. I'll just share with you my personal journey and story. I remember when I worked actively at a full-time job and I made around $20,000 gross income per year. And I remember at that time thinking, if I had $600 more dollars every month, that would be happiness. I would be fulfilled in life. That would be my end goal. I actually remember mentally being in that state. And then, I remember making six figures for the first time in my life when I joined the oilfield, started working 100 hours a week, and - guys, I thought I was rich. I really thought I was rich the first year I made six figures. And then I remember selling a piece of real estate when I got into the real estate game, and I remember seeing a deposit in my bank account of over six figures, and then I really thought I was rich. I was making six figures actively, I was pocketing six figures, mostly passively... I remember becoming an accredited investor for the first time, I remember crossing the millionaire threshold and what that meant to me... And the point is - this isn't about me; I'm just sharing some hierarchies of my own story. I'm sure many of you can relate to the same stuff. Here's the main thing. I was competing the whole time with myself. There was never a moment that I said, "Well, look, I have a million dollars, but Bill Gates is worth $100 billion." If I had looked at it that way, you guys, I'd be 0.001% of the net worth of Bill Gates, and that would make me feel pretty crappy, like I could never catch up or compete or beat him. But that's the whole point, I'm not trying to beat him. I'm not trying to be the next Bill Gates. So here's the secret, you guys - you can have financial freedom or financial independence without being a billionaire. And in fact, in some cases without even being a millionaire.

I'll share with you another story. One of my friends - his name is Pete; some of you may know him as Mister Money Mustache. He's a big advocate out there in the space for the FIRE movement, Financial Independence Retire Early. He blogs, and does a lot of beautiful things out in Colorado, lives a really great life... This guy retired, and I mean retired, at age 30, with about $750,000 invested in the stock market, and he's lived off the 4% rule. In other words, he withdraws 4% of his portfolio every year and he lives on it. And when he has extra money for whatever, he contributes back into his portfolio. This guy has been retired - I don't even know, 10/15 years at this point. And if you guys know Pete, or have ever seen him or listened to him on podcast, Pete is one of the nicest, most humble, most fulfilled guys that you'll meet. He's genuinely happy. He's not this guy that's sitting there cranky at home, trying to cut coupons out and complain about inflation. This guy is living an amazing life.

In fact, I joke about it, but Pete has FU money. You can tell Pete what to do. That guy makes his own rules, makes his own schedule. He does what he wants to do, on his terms. That, my friends, is financial independence, with under a million dollars in his example.

Happiness really comes from within. It's what you create. It has a lot to do with mindset, it has a lot to do with why I love stoicism and why I love sharing different lessons from stoicism... So here's the takeaway that I want to leave you with in today's episode - there is always going to be a hierarchy on anything that you do. And there's always going to be someone that's done one investment deal, one real estate deal, someone who's done ten deals, someone who's done a hundred, someone who's done a thousand... But it doesn't matter. What matters is you. What do you need? What do you want? What are you moving towards? What action are you taking? Are you happy? This game is all an internal and a mindset game. It's true, money doesn't equate directly to happiness. But I'll tell you something, it sure helps to pay for the things that bring fulfillment and happiness into your life. Maybe that's a gate entrance fee to a national park that you've been wanting to see since childhood. Maybe it's taking your 90-year-old grandma out for lunch and being able to spend some time with her before it's too late. Maybe it's paying for your kids' graduation gown and yearbook, so that they can have a moment for themselves. Maybe it's taking a friend or a family member with you on an international vacation that they would otherwise not be able to afford themselves. This is the stuff, in my opinion, that really matters and means the most in life. This is where happiness is truly created. Don't compare yourself to others.

Thank you, guys, so much for tuning in. This was a short episode of The Actively Passive Investing Show. I'm your host, Travis Watts. We will see you on the next episode. Have a best ever week.

Website disclaimer

This website, including the podcasts and other content herein, are made available by Joesta PF LLC solely for informational purposes. The information, statements, comments, views and opinions expressed in this website do not constitute and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. Neither Joe Fairless nor Joesta PF LLC are providing or undertaking to provide any financial, economic, legal, accounting, tax or other advice in or by virtue of this website. The information, statements, comments, views and opinions provided in this website are general in nature, and such information, statements, comments, views and opinions are not intended to be and should not be construed as the provision of investment advice by Joe Fairless or Joesta PF LLC to that listener or generally, and do not result in any listener being considered a client or customer of Joe Fairless or Joesta PF LLC.

The information, statements, comments, views, and opinions expressed or provided in this website (including by speakers who are not officers, employees, or agents of Joe Fairless or Joesta PF LLC) are not necessarily those of Joe Fairless or Joesta PF LLC, and may not be current. Neither Joe Fairless nor Joesta PF LLC make any representation or warranty as to the accuracy or completeness of any of the information, statements, comments, views or opinions contained in this website, and any liability therefor (including in respect of direct, indirect or consequential loss or damage of any kind whatsoever) is expressly disclaimed. Neither Joe Fairless nor Joesta PF LLC undertake any obligation whatsoever to provide any form of update, amendment, change or correction to any of the information, statements, comments, views or opinions set forth in this podcast.

No part of this podcast may, without Joesta PF LLC’s prior written consent, be reproduced, redistributed, published, copied or duplicated in any form, by any means. 

Joe Fairless serves as director of investor relations with Ashcroft Capital, a real estate investment firm. Ashcroft Capital is not affiliated with Joesta PF LLC or this website, and is not responsible for any of the content herein.

Oral Disclaimer

The views and opinions expressed in this podcast are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to www.bestevershow.com.

Share this:

    Get More CRE Investing Tips Right to Your Inbox