Investing Isn't Hard, It's Just Misunderstood

Most people think that investing is buying the S&P 500 or investing in Bitcoin or flipping homes and buying real estate. I think the traditional definition of investing is completely wrong because people misunderstand what investing is. Investing is actually the allocation of resources. All day, every day I speak to CEOs and entrepreneurs on the businesses that we invest in and I have this entire same plan that I tell them, which is investing in the traditional world is completely broken. So today I'm going to explain to you exactly what investing is and what you need to do to become a great investor because you're probably already doing it. Number one, let's define what investing is. Investing is the intentional allocation of resources to hit a specific goal. Actually, there are five different types of capital when you actually invest in. I'll tell you what those five are in just a second. But investing is the intentional allocation of resources to hit a specific goal. Now, why do you want to become a good investor? Why should you become a good investor? And I will tell you there are three reasons why. The first reason is that you are already an investor, meaning that 50% of our lives runs on autopilot. It's just passive. You're a passive investor in 50% of your life, meaning 40 to 50% of our life just runs on our natural autopilot habits and the practices that we do every single day. So the life that you have, half of it is essentially based on the autopilot of things that just run and work every single day. And that's okay. That's okay. But the second most important thing is this study that I read that was done at Stanford. It's called the Odyssey Study. And it tells you about the three paths that happen in someone's life. They set people down and they say, let's envision three paths of your life. The first path, which is the current path, is where you stop and say, if you were projecting five years from now and you change nothing about your current life, where would you be? And you write that down. Then you take the alternate path and you say, if your current life and work and profession did not exist and they completely vanished and you had to go to a completely different path, use that and say, what would your life look five years from now? And write that down. Then take the radical path. The radical path is where money, status, or any of the creature comforts that you are associated with, it did not matter. And if that was the case and you had all of that taken care of and that would put you on a third path, what would you do and where would that path take you? Now, it's actually a really good idea to go down these three paths because it allows you to realize one thing, which is, it's got to be a good idea to go down these three paths. It's got nothing to do with the three paths. It's got to do with the agency that you have to choose which path to take because you can clearly switch the path. What is agency? Your ability to make the next choice for yourself. No one is forcing you. You can have choice, your decision over asking anybody any permission. And that is the most important thing because we are naturally investing in our own lives, whether we like it or not. So asking the question, why you should be an investor? This should completely change your mind. You have no choice. You have to be an investor. There is, there is, there's no way that you can live your life if you actually figure out that you're going to go with the flow and let the secret figure it out for you. It is, that is not life. You have to take control and put your hand on the reins and ride this horse that is your life with full intention because otherwise you will never get what you want. If you don't know where you're is, right? And the reason I'm telling you all of this is people then say, well, all right, Sharron, what should I invest in? It's not about whether you buy the S&P 500 or whether you buy Bitcoin or whether there is a 401k match you need to take. The tactics of that are completely irrelevant. What's more important is to realize that when you invest, there are five forms of capital. What is capital? It's a store of value that you deploy. It's a resource, right? There are five forms of capital. I want to show you how to invest each one of these because how you invest each one of these forms of capital is what is going to change your life completely. The first one, let's take the easy one, is money. How do you invest money? And for a lot of people, they're looking for the next hot stock, the next best investment, the next cool tip, the next tax strategy. And I would say the way to think about investing money is really simple, is to just think about how can it compound? Because the job of money is to make money, right? If you take the money and invest it in something, what are you trying to do? You're saying, hey, Mr. Money, go make some money. Because if you walk into your office and you have 10 employees and each employee has a job, right? Well, if you walk into your office and each of them were hanging out and not doing any work, well, you'd be upset. So would I. Well, for most people, what they do is they take their cash and leave it in a bank account. And it just sits there. And they're like, well, I'm going to invest there. It's called lazy cash. And the reason we don't mind lazy cash is because it makes us feel better about ourselves when we log into a bank account and you look at our cash. But when you start saying if every employee needs a job, then every dollar needs a job. But what is the job? The job is for the dollar to go out and make money for you. The job of that dollar is compounding. So what is compounding? Compounding is getting, you know, manufacturing exponential growth. That is compounding, which means that the dollar compounds on itself. The money makes money for itself. And our job is to figure out how can we get into more compounding vehicles? I will tell you how I think about everything related to money is how long does it take to double my investment? There's actually a rule in finance called the rule of 72. The rule of 72 states that you take 72 divided by any number and it will tell you, which is the rate of return, and they'll tell you how long it takes to double. Right. So, for example, if you take 72 divided by 15, which is 15%, it will take roughly five little over five years to double. So I know that if I'm getting a 15% compounded return, then I will double my money in five years. Right. What happens to the S&P 500? I know the S&P 500 roughly gets you, you know, say 10%. Well, 72 divided by 10% is 7.2 years. So roughly it will double my money every seven to eight years. And if I start to know how to double my money, then it starts to help me understand how I'm actually able to get compounded growth, how I can manufacture exponential growth on the money that gives me money. The easiest way to think about money and how to deploy and invest money is to think about how fast it can compound and the rule of 72 and the ability for it to double. Super easy to do. You can talk to AI about it because when you look at an investment and it just says, oh, this pays you 7%, it feels small. But when you start to realize that in seven years, your 100,000 becomes 200,000 with you doing nothing. Now you actually, that dollar do a job. So that's number one, the first form of capital, which is money. The second form of capital is actually skill. Let's say you have a skill to doing something. Maybe you are a doctor. Maybe you are a athlete. Maybe you are a graphic designer. Maybe you are a content creator. Maybe you're a copywriter. Maybe you're a salesperson. You have a skill that you can offer to the marketplace. Well, how do you invest in that skill? Well, the way you invest in a skill is to invest in a skill. So the way you invest in a skill is to invest in a skill. Well, we all know the late, great Mamba, Kobe Bryant. We all know, what did Kobe do? Kobe said that I want to be the best of the best, the best in the world. He was already very talented, but he realized that most of his teammates were practicing doing two practices a day. So he said, the only way I'm going to get better is to get more reps. If I need to get manufactured compounding, if I need to get exponential growth, the way I invest in myself is to invest in the reps of my skill. And so he just spent more reps doing the thing. And so he got his first practice done at 4am, which now gave him three practices a day instead of two practices a day. Now that feels heavy, but if you now take that over a year, he got, you know, 365 more practices. Those reps, that compounding allowed him to invest in himself significantly more because now he is an investor. He chose, he had the agency to invest in himself to develop his skill because his skill was what was paying him, right? Money, skill. The third is time. Um, most young people don't get this. So if you are under the age of 40, you will not actually realize the value of time because you just think you have unlimited time and that's okay because you think you have unlimited time. I will tell you the thing that changed everything for me is, uh, I put my birthday in the death clock online and I started to realize that I only had X amount of time left. I also got this chart, uh, in my garage at home, which is your, life in weeks. If you've not seen it, go, go check it out. It has got this big chart and that every week for your entire life is set in a box. And all you have to do is shade the box and you'll start to realize that a significant portion of your life is already done and you don't have a lot left until you can create a visual representation of what is happening with the time in your life. You will not appreciate being an investor of the time in your life. If you take nothing else away from today, take this, being an investor is being so deeply focused on how much time you have left. left you have one life whatever you believe in that happens later on this time in this construct of human reality you have one life and you actually don't even have one life because as in in the early parts of your life you're young and you're trying to figure out how to be a student and and learn the basic things of life in the early stages of your working career you have no experience you don't know anything about anything you're just figuring out life and then in the middle part of your life the golden years where you're like man i have some perspective of my younger self i actually appreciate my parents i love my relationship i have a partner maybe i have maybe i have children maybe i love my my my dog you actually figure out life and then your energy starts to deplete and you don't have that going forward unless ai gives us this magic pill that we can all like you know live forever on right now we're all limited to a life and in that life you don't it's not the full life it is only a portion of the life or your golden years that you can actually do something with i'm in my i'm in the middle of my early stages of my life and i'm in my prime right now and then and i will tell you it freaks me out it freaks me out because now more than any other time i have to be an insane investor i have to say ruthlessly say no to things and yes to things with ultimate care that i was not able to say before because i thought i was invincible and i thought i had all the time in the world and i will tell you the simplest thing that you can do is when you sit down at your desk to work you don't start working unless you set a timer for what you're going to do for the next x minutes so if you're going to work on email put a 20 minute timer on your email and then work on your email if you're going to work on a memo put a one hour timer on your phone and work on your memo that way you'll start to realize you'll have this calibration this personal relationship with time you actually know how long it takes to do a thing and that is the best gift that you can give yourself because it'll tell you how you could invest your time there's i heard this great story about uh how rough you have 1440 minutes in any given day and say 440 of those minutes you are sleeping and doing some personal work so you have a thousand minutes a day on how you choose to spend your time and imagine this you never get those thousand minutes back you're assigned a thousand minutes in the morning your thousand credits and you can choose to spend a hundred of those thousand credits watching netflix if you want to or you can spend another hundred you know going for a walk on the beach or you can spend another hundred learning a certain set of reps or you can spend another hundred hours on your body to get six-pack abs you can do any of those things but you only have a thousand minutes and it just you lose all of them and it resets the next day my if you take nothing else away from today please take this you have to give yourself a construct a visual of how the the time is working in your life uh i heard this quote which is uh you just spent one of the last minutes of your life and i didn't realize what that meant and i was like man my life is just shorter by one minute right now and that should freak me out and it did and that's when i started to put so much focus so much pressure so much relationship that i said it's so important that i have to tell you about this because it changed the way i live my life money skill time the fourth is relationships um there's nothing nothing in life that at the end of the day is more valuable than your relationships because if you ask anybody what they want like i i i if you talk to somebody and who uh who has money and you say what do you want to do oh i just uh i want the flexibility so i can spend more time with my family i want the i if i had more money i would take my friends out to dinner everything that people say they say if they had everything in the world you know what they say they want they say that they would do things with other people because it's the we are we are pack animals our relationships are what drive us overall and i will tell you that as you get older you will realize that you do not have the ability to maintain thousands of relationships to do great things we must do fewer things and later in life it's very difficult and i'll tell you why when why do people why why why are there more um you know relationships romantic relationships etc that happen in in high school or in college or graduate school why because people are in the same zone in their life so it's easier to connect but then once you get into the workplace once you get older trust gets very difficult relationships how you invest in relationships are really important and i want to give you a framework that i use to invest in relationships and i call it the 10 10 forever rule what 10 relationships can i invest in wholeheartedly for the next 10 years that will be a forever relationship right what 10 relationships can i invest the next 10 years or make me forever now you may say well what is investing in these relationships and how i think about investing is if that relationship was a startup and i was writing a check and i was being an advisor and i was being a support system i would do whatever it takes to support that relationship meaning the answer is always yes now what's the question if that person started a production i would make them i would connect them with other friends i would go out of my way to get them the gifts for their birthdays and anniversaries i would support their children i would support their family i would support their business i would support their uh i would support their brands i would do whatever it takes to support them i whenever they asked anything i would say yes without asking any question those 10 relationships you can build and invest in for the next 10 years will pay you forever now the crazy part is when i came up with this idea i could not put 10 people on that list in fact i could only put one person on that list one and then i've added people to that list over time and i've been doing this for 15 plus years i remember the exact place that i was sitting when i did this on the upper east side in new york city at a starbucks when i came up with this idea on 63rd and 3rd right by lexington lexington station and and i realized that in the last 15 years 95 of my net worth has come from seven people those seven people that i put on that list that's crazy to me and i think that people don't realize that you think you can you you get irritated by um you know the uh someone hating on you on social media that is not a relationship that you should care about and the only way you can't care about it is if you have a framework to not care about it to have a framework to not invest in it have a framework to say hey that is not important to me because if you don't figure out how to make that not important it will automatically become important because you will see the 10 20 20 years that you've been in the world that said something mean about your your video and you're now irritated for the rest of life which is crazy and the reason you have that is because you have not figured out an investment framework for your relationships i will tell you it is impossible for me to maintain crazy relationships i can't do it so i use only two frameworks i'll say those two frameworks to you again number one the 10 10 forever rule which is who are the 10 people that i'm going to invest in for the next 10 years that will pay me forever the second is this is to be where your feet are be where your feet are meaning if i'm with somebody right now and i am talking to that person i'm talking to that person and when that moment passes and i'm not talking to that person anymore i'm not talking to the person anymore and i don't do not care but in that moment i give them the entire gift which is the gift of my attention that's it because other people otherwise i will never i will never be able to keep up with all the with all the demand with all the interest with all the with all the the pings dings and bings coming at you you will never win being an investor in your relationships will change your life forever and that's super super important right uh the last but not least on the fifth uh piece of capital is is brand and i say brand because i'm not suggesting that you have to go out and build a personal brand yourself that is not what i'm suggesting but every single person has a brand when you walk into a room you have a brand so what is brand brand is association they associate a set of things with you it may be that you're funny it may be that you're charismatic it may be that you're dependable your employer your business partner has a associated brand for you they believe that you're going to show up they believe that you're going to be a good friend they believe that you're going to drop the ball they believe that you're always going to be late it's a they take a collection of behaviors and they chunk it up and they put those collection of behaviors and say that is sharon's brand now it is our job to intentionally invest in the brand that we want people to believe in if you don't have a vision for the future about what what you want the brand your brand to be then everybody will make up their own story of that brand and that's the crazy part so you're your job is to do what your job is to find a way to have a very clear vision of your brand because it doesn't have to be online or offline but you have a brand you have a brand with your parents you have a brand with your children you have a brand with your with your partners you have a brand with your friends you have a brand with your co-workers and it's your job to intentionally invest in that brand so that it can give you the results that you want you have to intentionally manufacture the credibility so how do you intentionally manufacture the credibility and you do that by showing proof Proof is everything. It is not about the promise that you make. out saying, I'm going to deliver this at 9 p.m. tomorrow. That is not it. That's a promise. What is more important is proof over promise. When you show them the evidence of the thing that you do, they start to believe you more. You know, if you've ever watched late night TV, you'll probably end up watching a George Foreman grill. Someone is selling you a grill. They can tell you, hey, I'm George Foreman. I was a heavyweight champion and you should buy my grill. Like that, what does that mean? But if he actually cooks a steak and shows you how the steak got cooked, and if he showed you the infrared light, and if he showed you where you can put the tongs, and he showed you how it cooked perfectly to the temperature, showed you it had a temperature gauge, if he showed you all of those things, there's proof on the thing. So therefore, you believe the brand. We have to find a way to show more proof in how we want to show up. So if you are a chiropractor and you want people to believe that you are a good chiropractor, you have to find a way to show proof that your patients get relief by working with you. That may be doing a video about how everyone's back pain is gone. That may be actually teaching people how to reduce their back pain. That may be about whatever you think that you can show proof to make them know that you know who you are and you are who you say you are. Proof happens everywhere. I tell my children, I tell my son who's 14 years old to show me proof that he did the thing. And he's like, dad, I thought about how I'm going to do this. I'm like, write me a plan. He's like, dad, how do I write a plan? I said, open Google Docs and write me a plan showing me this is what you did. He wrote me the plan. And I said, would you like some feedback? And I gave him the feedback and he updated the feedback. Now I see proof of his thinking because now I believe what he's thinking. He showed me what he's thinking. He showed me proof as opposed to just making me believe his promise. Our brands are very prevalent. Our brands are our reputations. Our brands are generated by this association. You can manufacture the brand. So I want to give you this one piece of advice. You show up either at work or at home. What do you want to be associated with? What are three to five words you want to be associated with? Is it safety? Is it love? Is it caring? Is it hardworking? Is it work ethic? What is it? Whatever that is, has a behavior associated with it. Do you want to show up on time? Do you say what you're going to do? You're going to finish what you start. You're going to say please and thank you. What is it? If you figure that out, then you can just do those behaviors. And when you do those behaviors, you get the brand associated with it. People have got investing all wrong. And you want to trash the old methodology of what people think about investing and actually know that investing is about having intentional allocation of resources to create an amazing life for yourself. And the way you do that is by doing it with agency and doing it with care, because when you intentionally allocate resources, you will have an amazing life. Thank you.