← The Journey with Morgan DeBaun
The Journey with Morgan DeBaun
Rich vs. Really Rich: Nicholas Crown on Entrepreneurship, Wealth Mindset & Smart Investing
00:46:42
What separates the rich from the really rich? In this episode of The Journey, Morgan DeBaun sits down with entrepreneur, creator, and financial strategist Nicholas Crown to break down the key mindset shifts and financial strategies that set...
Loading summary
Transcript155 lines
- [00:00]
A
Hey, everybody, it's Morgan Devon. Welcome back to the Journey podcast. I'm excited today because I have a new guest for you, Nicholas Crown. Nicholas is known for his Rich versus Really, really Rich series and he has a new book out that I really hope you guys go and check it out. We're going to get into a few different things. Nick is also a serial entrepreneur and investor. He's done a variety of things. So, Nick, welcome to the show.
- [00:25]
B
Thank you. Appreciate it.
- [00:27]
A
Hey, everyone, I'm Morgan Debon, a passionate entrepreneur and life advisor. With the Journey podcast, you'll discover that success isn't about the destination, it's about the journey. I'm sharing stories of amazing people who've taken control of their lives. Join me on my own journey to discover the secret sauce behind reaching success. With permission from no one else. So tell me a little bit about your background as an entrepreneur. Let's start from the beginning. ATS Applicant Tracking System is something that you kind of originated. Tell me a little bit about how you got started into tech and building things.
- [01:04]
B
I was an entrepreneur by necessity. I had left Wall street in about 2016 and I wanted to try something new. And I just kept failing at everything that I tried. So at one point I kind of looked in the mirror and I really didn't have much money left. I made a good use of the couple million bucks I had traveling around the world and having some. I said, well, we really need to figure it out now. We really need to come up with a plan. And I don't know who said it, but you get paid for doing boring stuff that you happen to like. And you know, as a manager on Wall Street, I was always reviewing resumes to bring people on board, my, my trading desk, whatever in the general organization. Just part of the role, you know, if you're a director on, in an investment bank. And I said, I kind of like reading resumes. I kind of, you know, there's this sort of sick pleasure I took in reading a good resume and, you know, circular filing a crappy resume. And I said, you know, I think there's an opportunity out there to start, you know, from very humble means, a resume writing business. And, you know, it's a very, a stark contrast from high flying Wall street days. But again, you got to start somewhere, right? And I knew that I didn't want to work within the confines of an investment bank anymore. I knew that I wanted to be out of my own. I knew I wanted to own 100% of my good decisions or bad decisions. And Yeah, I started with a seemingly unusual place, which was resume writing. And so, because I just generally end up nerding out about the details, I started to reverse engineer the way technology makes hiring decisions. And that's a real. That's a whole podcast in itself. Because, you know, I'm not sure your background, if you've ever hung out with someone in hr, but they get handed a thousand resumes, and let's face it, there's no human on planet Earth that can read, let alone 30 resumes a day and genuinely absorb the information. So there's a lot of software and technology that's combing through your job resume and your career history before any human is going to touch it 100%. And so I built a business around thinking about machines first and humans second. And so that was my first business. And I had an opportunity to learn a ton and to eventually start to get back to the Wall street days of having some money in my pocket, because I spent probably five years without income after leaving Wall Street. So, you know, everyone in their entrepreneurial journey sets a timeline. They say, I'm going to make my first sale in a year. I'm going to make my first sale. Times it by two or three.
- [04:11]
A
That's right.
- [04:13]
B
You know, unfortunately, reality is extremely efficient, and it's not when you're ready, it's when the market's ready. So there's this number if we're jumping forward into retirement planning. Right. How much money should you have set aside? Right. And there's this magic number of you should have three months.
- [04:38]
A
Yeah. It's not enough when you're entrepreneur because you're spending money. That's what people miscalculate when they're trying to step into entrepreneurship full time. They're like, okay, well, traditional personal finance gurus say three to six months of your. Well, no, it's not three to six months. Because when you're an entrepreneur, you're also paying to grow your business. You're paying tools, you're paying for subscriptions, you're paying for all this stuff. That money goes so fast, and one.
- [05:00]
B
Of the most important resources that you're paying for is yourself.
- [05:05]
A
Yeah.
- [05:08]
B
And I don't care where you live. If you live in Chicago, New York, or you live in Mexico City, it's not free.
- [05:15]
A
No. No.
- [05:17]
B
So, you know, at the time when I. When I was obviously on Wall Street, I was in New York, and I was. I was paying for that quality of life and that access. When I started to get serious about building my first business, I took it upon myself to play around with a little bit of the geographical arbitrage that you can do. And I highly recommend it for anyone because like I said, if it's going to take two or three times longer to start and just have your first sale or your first client, whatever it is, why not cut your cost of living by half or cut your cost of living by a third if you can. I at that time was fortunate enough to be able to pick up and to change locations 100% and I've done that several times. And I'm based in Chicago, not the lowest cost of living city in the world. I just love it here and I don't need to pay the premium for New York anymore. No shade against New York, but I can build my business from here.
- [06:19]
A
Yeah, no, I completely agree with you. I live in Nashville, but I used to live in LA. And when I started the company over 10 years ago, I started in Silicon Valley, in San Francisco, just like everybody else because that was the epicenter for where all the funding was. And then as soon as I got my first round of funding, we moved to LA because I could get better cost, more diverse people working for us. I wasn't going to be competing with Meta, Twitter and all the people Salesforce, just no way we could pay those prices. And then the moment during COVID that it was clear, I was like, oh, we're out, we're moving, everybody's remote now. I'm going to be able to sustain our employee base at a much better rate if they can live in Cincinnati or they can live in Florida or they can live wherever they want to live instead of having to commute an hour in LA because they had to live in the burbs just like everybody. Right? And that has absolutely been a like competitive advantage that I've had because I'm able to recruit really good talent that doesn't want to live in high cost areas in order to work and have good jobs. And then for myself personally living in Nashville, you know, Tennessee has no, no state income tax.
- [07:28]
B
So when I do my sweet deal.
- [07:30]
A
It'S a crazy deal that I think when I did my math as an individual, I was single when I moved here, so I was, you know, one income, just me. And I have a lot of side hustles and second businesses and things like that. So even outside of my blabberity income, I was doing the math and said, you know, I don't want to work forever. I always tell people this and they're like, are you gonna when are you gonna stop being CEO of Blavity? Like, I. I pray that I'm 50 and not CEO of Blavity. I pray that I'm 40 and not CEO of Blavity. Like, that would be success. You all don't want me to be CEO for 30 years. Like, there's no way that is the right thing for the business. For me to be CEO of this company forever, that means we've plateaued at some point or we're not innovating to retire. To make work optional, you gotta get really smart about how your cash is being spent and your taxes. So I'm curious. You know your series Rich versus Really Rich did crazy numbers.
- [08:29]
B
Yeah.
- [08:29]
A
Why do you think it resonated with people so much? Like, what are the core things that people were like, oh, this is interesting.
- [08:35]
B
Yeah. I mean, the series started just like anything else. It was an experiment. I was like, you know, I'm sitting at my kitchen table at that point. I had wrapped up with the resume company. I'd sold the remaining pieces off of that, and I'd started a digital agency. The digital agency scaled. I had a magic number in my head. I wanted to make $100,000 a month. I made $100,000 a month faster than I could have ever imagined. But the problem was, I may as well have just went back to Wall street because my quality of life was horrible.
- [09:08]
A
Businesses are tough.
- [09:09]
B
Horrible.
- [09:10]
A
Yeah.
- [09:10]
B
So in that state of desperation, perhaps this is where I perform the best. Perhaps I need to be in this chaos environment to, like, really come up with the creative thinking. You know, it's. I wish it wasn't that way, but as I'm telling the story, it. It's probably is that way. I'm sitting there at my kitchen table going, you got what you asked for. The genie gave you the wish, but you weren't specific enough. The genie. And the crazy thing is, the genie always grants your wish eventually.
- [09:39]
A
That's right.
- [09:40]
B
It's like, I want to make a hundred thousand dollars a month. The genie's kind of like, is that it? You sure about that? Like, is that it? And what you're supposed to do again, you know, you learn this in the school of hard knocks, not in a textbook. Is you're supposed to define that a little further?
- [09:56]
A
Yeah.
- [09:56]
B
Do you want to make $100,000 a month and have no life? Do you want to make $100,000 and be able to feel calm and own your time? Like, so you've got to start to define that because it's a Lot easier than you think to make the hundred thousand dollars a month at all costs.
- [10:16]
A
Right.
- [10:17]
B
Because let's not forget, you want to make the 100 grand. Sure. Don't sleep. Don't have a life. Let it eat away at your health. Let it eat away at your relationships. You'll get there. Anyone could get there. You just have to have that determination, and eventually you'll get there with a clear head. Right. So, yeah, I made that. I made that blunder. Ultimately. I said, oh, I, you know, I started a business, I had some success. Let's do it again. Let's, you know, let's do it again. But I didn't define what I wanted further. And ultimately, as I'm sitting there at my kitchen table, I'm in Chicago at this point, I'm just saying, what the hell are we going to do now?
- [10:57]
A
Yeah.
- [10:59]
B
Because I've been rich, I've been broke, I'm now rich again. In quotes, right?
- [11:06]
A
Yeah.
- [11:07]
B
It's all relative. What's another trip through hell? We could do this.
- [11:12]
A
Yeah.
- [11:13]
B
So I kind of decided that I was going to shut down the agency at that point. And so sitting at my kitchen table, I saw a quote from Naval Ravikant. I don't know if you're familiar with Naval. The guy's just the best. We're lucky to have him using Twitter and giving us all his wisdom for free. Right. And so Naval said, you know, there's a new form of leverage in town. I'm going to paraphrase, and this leverage is free and it's permissionless. So it's like quite literally magic. And it's media. Because now I don't need to get on the Tonight show to tell you about my book, to tell you about my thinking, my method, to tell you about, revise, to tell you about my what now? I just. If it's compelling enough, people are going to learn about it, you know, via the viral reach of an algorithm.
- [12:03]
A
Absolutely.
- [12:05]
B
So I said, oh, I could do that. I could make funny videos and silly videos and talk about this and talk about that. And, you know, I made 30 or 40 videos. I made a bet with myself, Nick, you're going to do this for 30 days, 40 days. You're not going to tell a single person because it's probably not going to work.
- [12:25]
A
Yeah, yeah.
- [12:26]
B
And I did, you know, I don't know, 20 days, 25 days. Crickets.
- [12:33]
A
Yeah.
- [12:34]
B
And I said, all right. You know, iteration has been this core trick up my sleeve. I've had my whole life. And I just said, all right, Iterator, like, what's the iteration that, that makes this work?
- [12:46]
A
Yeah.
- [12:47]
B
Because you only have a few more at bats before this whole experiment is over. And I just said, you got to be you, man. You got to be more you.
- [12:55]
A
Yeah.
- [12:55]
B
Anyone could talk about digital marketing. Anyone could talk about nomading or geo arbitrage. You're living in Mexico City to build a business or this or that. So I was like, if you can Google it, you can't talk about it.
- [13:07]
A
That's right.
- [13:08]
B
And so what I did was I've always had this obsession with why some people walk into a room and they light up the room. And it's not because they're rich or they're not rich. It's a phenomenon of an internal warmth.
- [13:26]
A
Charisma.
- [13:28]
B
A charisma. And then I, I started to dissect it in my brain quickly. And then I picked up the camera and I created the first rich versus really rich video. And there's layers to what I was doing then. And I didn't know what I was doing then, but I still knew that there were a few layers. I thought it would be absolutely hilarious to have two rich people arguing with each other. Or like it's because there's this dichotomy between the wealthy versus the haves and have nots.
- [13:58]
A
Yeah.
- [13:58]
B
And that's. I'm not interested in that conversation. I'm interested in the conversation of the haves and the haps.
- [14:04]
A
Yeah, well, the hats. And I really got it. I mean, that's, that's the thing with people. I mean, there's a million and one people have duped your original series. Right. Like there's. I was just watching a video on TikTok where it was a girl was shopping. It was two girls shopping and it was rich versus really rich, effectively. And one girl was like, well, what's the price of this? And the other woman walked in and said, oh, I just love your store. Who's the owner? Oh, yeah, that's my cousin's sister in law. Oh, interesting. I'll take five of this. Right. And it was just so funny. All the people in the comments were like, no, that's not what they would do. And I'm like, no, actually that's exactly what a wealthy person would do.
- [14:41]
B
Yeah. So the funny thing about this whole series, I didn't know what I was doing. I don't want to give anyone the impression that I ever know what I'm doing.
- [14:50]
A
Sure.
- [14:51]
B
You just kind of are bumbling around. I don't know if you ever. You got duped and bought a Roomba, you know, one of these things that goes around.
- [14:58]
A
Sure.
- [14:59]
B
Okay. Yeah. So I'm like a Roomba.
- [15:03]
A
I'll bump up against the wall.
- [15:05]
B
I'm like, whoop, that's a wall. Don't go there again. Whoop, that's a wall. Don't go there again.
- [15:08]
A
I think that's entrepreneurship. I think that's honest. Like, I think that my perspective is that most entrepreneurs that are successful just fail more often, faster and iterate better. Like, I look at my own success, I'm like, yeah, I have failed. I could give you, like, 50 things that nobody's ever heard of because it didn't work. Y'all don't know because it never popped, right? So as long as you don't have any, you can dust yourself off and then make the same decision twice. I think the biggest thing that a lot of entrepreneurs that I've met that are failing is because they don't know when to move on. So you seem to be very good at saying, I've hit my plateau here. I either need to sell it or move on because the value of my time is no longer worth the output. Even to your point when you were making even 100k a month, right? Because a hundred k a month in revenue isn't necessarily 100k a month in margin. Like, it's a lot of effort and work to maintain those types of businesses. So how do you know? Like, what would be your advice for someone who's like, damn, is it time to pivot and dip, or is it time to iterate?
- [16:14]
B
So this is. I have an entire section in my book really rich about this, because this is where everyone gets everything right. They go, they have a passion, they execute on it, they start, and they're not getting the results right. And this is a very personal topic for me because I've iterated too long, and I know the pain, or, excuse me, I've stayed in one iteration too long, and I haven't tried the next thing. And I know the pain and suffering of that. Right. The idea here is the market has to respond, right? So if the market isn't responding or you haven't provided an opportunity for the market to respond, you've got. You either got to get the market respond or try to get in front of enough people, or you got to get out and make a micro iteration, not a. Well, I'm a juggler now. I'm gonna go become a race car, whatever it is, right? Just. It's got to be a micro tilt, because you might be so close that you have no idea. And even with my business revise, when we first start, we kind of knew what we wanted to do and the customers that we could help. And now it's becoming so clear exactly who we can help, and you backfill the why. So I'll give you an example here. If you're a painter, right? And you're a local artist, let's say you're in Nashville, right? You set up on the street, you think you're the greatest painter in the world, and you just say, this is terrible. I'm not selling any paintings. I love my work. I believe this is the vision. Maybe five or ten people walk by and see your paintings every day. Is that the market? Heck, no.
- [18:02]
A
No.
- [18:02]
B
Heck, no. So take that painting, turn it into a cheap Facebook ad and let a thousand people see it. And if 1% of that thousand people doesn't buy your art, guess what? Switch it up. Yeah, switch it. Switch it up. Maybe you're doing landscapes. Try something else. Switch it. You know, even in the creative field.
- [18:22]
A
Change your distribution channel or go to Art Basel. Like, maybe it's a different caliber of person that needs to be seeing your art. Like, yeah, I completely agree. I think. I think sometimes I think people get too attached with how they're going to sell their product instead of just, well, what's the right audience for the product? Even if it's not the audience that you thought was going to buy it, right? Like, I built a business for black millennials. We got a lot of white people that read our content, and I'm fine with that. Right? We're not like, oh, no, white people don't read the black articles. Like, that's not. That's not. Actually, it's much better for us to be multicultural and diverse in our audience segments, right? So I think that sometimes people can get too strict with themselves about who's going to consume their product, and then they miss the real opportunity.
- [19:08]
B
Well, it's not up to you.
- [19:10]
A
Yeah, it's not. You can't control it.
- [19:11]
B
Sorry. It's not up to you. Yeah. So, you know, creating a really, really rich series. I walk down the street and the guy on the tell, you know, up in the telephone is yelling down at me, yo, bro, I love your. Your content. And the guy walking out of the office in the suit is saying, hey, man, I really like your content. So that's awesome. That's just an added bonus. But certainly. Could I have predicted that? No, that's Right. But the idea is detach yourself from who you think needs to buy it or who you think just get people to frickin buy it. Get, get it in front of enough people to then learn and then serve those, and serve those people better. Because what do you care? You want to grow, you want, you want success?
- [19:56]
A
Yeah.
- [19:56]
B
And you're going to now put, you know, terms and conditions on who's in your fan club.
- [20:01]
A
You know, I think people want to be entrepreneurs for a lot of ego reasons. You know, I think a lot of people want to be entrepreneurs so they can call themselves an entrepreneur. They want to be a founder so they can say that they're a founder. As opposed to saying, what is the point of a founder if you have no real business? Like, what's the point of being a founder if you have no customers? So I don't care about your decks and your websites and your Crunchbase account. I care about, well, how many customers do you have?
- [20:28]
B
Yeah. What you're talking about is portraying the ends without anything in between. It's. It's a sandwich with no meat on it. That's right. It looks like a sandwich. You go, oh, it's a sandwich. And you open it up, wait, there's no meat in this thing. There's nothing in it. There's no peanut butters, no jellies. There's nothing in here. And so that's, I think that's a product of the social media. You know, I don't want to say social media generation that's in this. We're all using it, so it's not a social media generation. What I mean is the effect of social media, because on social media, all we do is see the ends and we backfill the story.
- [21:06]
A
That's right.
- [21:07]
B
Right. So if I put a post in my Ferrari, everyone goes, oh, he did all this stuff to do this. Right. And I'm not dumb enough not to use those things to my advantage at this point. Right. I hate it. It's so stupid. But it works. Right. So I'm actually really terrible about, I'm really not great at social media, let me put it that way. I'm good at this little corner of what I do, but I'm not a great influencer, you know, And I don't know if I'll be in that game.
- [21:40]
A
I don't think you have to be for much longer. Right. Like it was a means to build business, not a means to be well known. So those are two different objectives. And I think, you know, one of my Weaknesses is that I actually, I have so much money and assets, but I refuse to be like, I have x million dollars in my investment account and look at my receipts. You know, like a lot of that. That stuff does really well on social. But I have like an intrinsic. Not going to. I'm not going to show the private jets. Like, I'm not going to show. That's like. Because I think it's so cheesy. But the. But the downside of not showing it.
- [22:16]
B
Is that there's no one hears about you.
- [22:18]
A
No one hears about it.
- [22:19]
B
And.
- [22:20]
A
And then you see other people too. I'm like, that's like a fake private jet. Like, I literally know the jet that you fake rented in L. A. But the rest of the world doesn't even know that those things are an option. So people fall for it. So it's a really interesting. As a person with a business, it's always something that I go back and forth on. It's like, oh, man, do we need to say the controversial things? You need to do the things so that you get the attention so that you can get your point across. It's a constant inner dialogue that I even have with my team where I'm like, do we need to put on red lipstick and record a video? Because people who have red lipstick get a 10% higher conversion rate. Which is true, by the way. You all to really.
- [23:00]
B
Well, I'm probably right. That's probably not gonna work for me. But I've got my own tricks.
- [23:05]
A
Yeah, the glasses. You know, glasses make people look. Feel like you look smarter. I mean, there's all of these things that can be very intentional have been proven to draw attention to your videos.
- [23:17]
B
It's a tool, right. And when we start to obsess about it and we start to internalize it, and I'm having that same struggle that you have every day. Like, oh, gosh, this is rich. The really rich guy would never do that. Having that kind of internal dialogue, which is just totally insane. But you say to yourself, am I on social media specifically to market or to make myself feel better? And I really hope we're not out here to make ourselves feel better, because it is a hollow victory. It's an empty victory because it's. It's for every beautiful moment where you walk down the street and someone yesterday pulled out, they had my book in their purse that was like this cool, you know, the coolest thing ever.
- [24:04]
A
That's cool.
- [24:05]
B
You have a thousand other weird comments.
- [24:08]
A
Yes.
- [24:10]
B
Where you're like, I don't Know what to do. You know, the adoration and the negative. Because the adoration, you don't know who it is. It doesn't seem, it's hard for it to feel real. And then the negative oddly feels more real than the adoration, by the way, for me, at least. And then the negative is like, well, why am I, what am I doing out here? Yeah, sticking my neck out.
- [24:33]
A
But I think it's a constant dialogue. I mean, I'm sharing these things. The podcast is called the Journey because I think people look at our socials or look at our newsletters, or look at the serial entrepreneur and say, oh man's got it all figured out. Or oh man, she's got it all figured out. I'm like, no, no, no, no, no. This is constant internal dialogue. These are constant things that you have to decide. And you might decide something is okay for a season, for a 30 day sprint, just like you were talking about. And then if it works, great. If it doesn't work, you move on. Like, you know, turned out it worked. You iterated enough that it worked. And it's giving you this platform to then be able to bring more products to people who are interested. Right?
- [25:11]
B
Yeah. And the best part is I didn't know what product that was going to be until I started the platform to have platform to talk about things. That's right.
- [25:19]
A
So you got to put yourself out there. So tell me about your current company. Like, how did you decide to go back kind of to your finance roots and like you went agency, which for anyone listening who's an agency owner, like, it's a really difficult business because your margins are tough. And Nicholas, what did you find when you were kind of evaluating exiting an agency?
- [25:40]
B
Oh, yeah, the, the, you're, you're just not going to get a lot of multiple on an agency business that relies on one smart person or a few smart people, because if they're not coming with you, you know, that's like selling a Ferrari without an engine in it. Right. You're like, but it's, it's a car.
- [25:56]
A
It's a great.
- [25:57]
B
What do you mean you don't want it? You know?
- [25:58]
A
Yeah, it's a key person risk because tied to the person and then it's a multiple. And ebitda, which for a lot of agencies is very thin, you know, especially when you're paying yourself and you're paying, you know, the two or three other key people. So it's a good lifestyle business, perhaps, but it's not necessarily an exitable business.
- [26:17]
B
No. Yeah. And it's a great lifestyle business if you want to start making some money. Because it's up to you, 100% in your control, Completely up to you. So if you want to rock and roll and own your ups and own your downs and agency is the first stop and maybe everyone needs to go through the trauma of owning and figuring out. I never figured out how to truly optimize that style of agency, but maybe I am doing it right now with Revise. Because Revise is really interesting. What I've applied to Revise from my digital agency experience. Revise is a retirement planning firm. And so ultimately we've built a framework, but every client is still getting a unique product, is still getting a unique strategy. So we have a system of doing a very complicated task and delivering that end result. And I think maybe that systems skill was built on the footprints of my digital space, my digital agency. Yeah.
- [27:27]
A
So Revise is a service.
- [27:29]
B
Revise is a service. Right now we're focused purely on the annuity side. So safe growth income producing assets later in life, pension replication, turning your savings into a pension, but ultimately completely removing downside risk in the market. Right. So that's where we're focused in right now. Where we're going to head the preview is we're just going to be full service. It's already the cat is slowly getting out of the bag over there. But we're gonna have the RIA business so we can structure, you know, variable risk asset portfolios and have the safe side so we can kind of have full insight and you know, input into a long term investing portfolio. So the real thing is like, is the why behind this business? Because I was a fixed income trader for 10 years on Wall street, took an enormous, an enormous amount of risk that I was taking every day. And on the personal side, my family went through the dot com bubble and it completely destroyed our family. So I was just like, I'm just hyper, I'm a hyper risk manager. Yeah. When it comes to money. And after this whole explosion, right, with, with rich versus really rich, billions of impressions, right. Billions of people seeing these videos and, and me not necessarily knowing why for quite the longest time, I said, what's the one thing I can hand people me uniquely. What's the one thing I can hand people that I'm uniquely equipped to deliver and uniquely equipped to talk about that would benefit them the most? And the immediate answer was annuities. It was long term financial products that are, when you say annuity, for people.
- [29:17]
A
Who aren't familiar, what is an annuity, what does that mean?
- [29:19]
B
Yeah, so an annuity is a contract with an insurance company and ultimately what they do is they hand you, you pick an index and they'll hand you the returns of that index, most of the returns of that index. And on their side they're just hedging your risk and hedging your portfolio. So for the technical people out there, it's like a call option on the stock market. For the non technical people, you get most of the upside but none of the downside. And for the people that are pension holders or pension wish they are pension wish they holders. Right. It replicates a pension. There's an investment portfolio that can be converted into an income stream. So it's a really flexible product and it has a horrible reputation.
- [30:00]
A
I just don't think it's talked about a lot. So I just think that it's not part of people's like everyday retirement vocabulary.
- [30:07]
B
Yes. Because they're complicated as hell and they fall into life insurance too, the life insurance world. And you know, nothing against life insurance agents, but life insurance, it's a totally different world. Yeah, yeah.
- [30:23]
A
And there's a lot of risk there too. There's a lot of gimmick in life insurance world.
- [30:26]
B
The barrier to entry is just a little bit lower than the barrier to entry to get on a Wall street or become an ria. And that little lower barrier to entry creates all the headaches in the business.
- [30:40]
A
There's people listening that's like, what the hell are you guys talking about? But for those who get it.
- [30:46]
B
I hope. Okay, Yeah, I mean this, it's, it's complicated at a micro level, but actually big picture, it's really, really simple. Right. It's if you're investing for the long term and you have a portion of your portfolio that's safety, that's bonds or whatever. Right. This is an alternative to that. It's going to get you a higher return. You know, your money's going to be safe. It's held at an insurer instead of a bank, you know, that invests your money conservatively, you get a great rate of return. It's a rock star product for people that are looking to retire who have that long term mindset. If you don't have that long term mindset, we're not, we're, you know, you're not going to pass through our intro call because it's just not for you. But for a lot of people it's really helpful.
- [31:33]
A
Well, I think for a lot of people, especially of this generation where They, I think because of all these layoffs and because of how companies have been growing at a crazy rapid rate. I mean, the valuations of these companies have just skyrocketed. You know, some companies have more cash than the US government, like Apple. Right. That's not how our parents grew up. They grew up in very stable, reasonable 20% growth year over year would be in a crazy fast growth rate for some of these companies. And that's not our generation. Right. So these companies are turning and burning people all the time. And so I think, I think too many millennials, certainly Gen Z, but they got a whole nother problem. But really for people who are in between the ages of 28 and 45 are unsure about what stability in their future looks like because they know they cannot rely on any company that they work for to keep them as an employee into retirement age. Like the idea that you're going to stay at one company until you're 65, maybe 67. By the time we 68, maybe or later, maybe never is like zero.
- [32:42]
B
Yeah.
- [32:42]
A
Right. So then what do you do? How do you manage risk against that? And I actually think it's incredibly overwhelming for people to even think through that.
- [32:51]
B
What I found is the 401k replaced the pension in 1974. Everything changed in 1974. Okay, so the burden went from your employer to you.
- [33:03]
A
That's right.
- [33:04]
B
Okay, so it went from a team and a professional pension management committee to you. And now you're making the decision while you're late for your first day or second day doing your training. Forgot your phone at home, don't know the password to your computer. You don't even know if you like the person sitting next to you. Oh. And now you have 30 minutes to decide how you want to invest your 401k. Do I want this one or this one? Or how's this mutual fund or I got this. It's a complete, you know, confusing nightmare.
- [33:42]
A
Yeah. And you have no control over the fees. You have very little control actually, because they don't make it easy for you to self invest your 401k. You gotta go through all these paperwork, people don't even know that's an option.
- [33:52]
B
It's what I call the illusion of control.
- [33:55]
A
Yeah, it's an illusion of control completely.
- [33:58]
B
Yeah.
- [33:58]
A
It is like one of the biggest. To me, it's one of the biggest personal finance misses for most people who are working is them actually taking time to put effort into managing their 401k and understanding the returns.
- [34:11]
B
And you know, I'm gonna, I completely understand because I was managing hundreds of millions of dollars of trades a day and I didn't even look at my 401k allocation. Right. Hello. What's going on here? Right. You know, even I'm like, oh, well, I'm too busy to look at this.
- [34:30]
A
Right.
- [34:30]
B
You know, I gotta jump into my. Whatever work. Yeah. I've got to do my thing. Right. I'm late, whatever. So what we do. Well, there's a couple things just, just zooming out. What ends up happening now is you stay at a job for a few years and you have a disconnected 401k.
- [34:48]
A
That's right.
- [34:48]
B
And you're going to do that two, three, four, some people even five times.
- [34:54]
A
Yep.
- [34:54]
B
So they have these five independent portfolios. Who knows what's in them, floating in the ether, getting eroded by fees. By the way, if you're going to get a 4%, 5% match, whatever, and you got to pay a few fees, you know, for whoever to manage. Okay, but now you're not getting the match anymore.
- [35:16]
A
No.
- [35:17]
B
This thing is just getting eaten alive in outer space. And the worst part is, is it's, it's out of sight, it's out of mind completely.
- [35:25]
A
You forget about it. I remember, you know, I had my 401k when I first I started my job. First job was at Intuit. So we had great 401k and we had stock because it's a publicly traded company. I remember even just 2 years of investing in my 401k and getting the match and like looking at it now, 12, 13 years later, it's like insane. It's like six figures crazy. But I didn't look at it until I bought my house and I needed to look at it to, you know, build up my balance sheet to be able to afford this house. And I was shocked at how much it had grown, but also at the fees and the amount of money that was being taken out of it for something that I'm like, you're not even doing anything. You know, it was.
- [36:08]
B
And you've got, you've got a great story though, because you were allocated accordingly and you did grow. But what the usual is, it didn't grow or it's flat while everyone's out here buying Lambos from Dogecoin. You're flat.
- [36:26]
A
Yeah, it's the opportunity cost, really. I mean, I think that's the other thing that people don't understand. It's like the opportunity cost of not taking the action. It's not just, oh, I didn't lose money, it's like. Yeah, but you could have been making money.
- [36:37]
B
Yes. So, yeah, I mean part of our process, you know, that I developed at Revise, is just showing you, doing all the work for you, doing all the thinking that it's hard for you to do. It's. It's tough. You don't have the technical chops and the spreadsheets and the models and the, and the data feeds, whatever. I'm going to do the entire thing, full tear down and I'm going to present the plan to you and all you need to do is say put it into place or thanks, but no thanks. That's all you need to do. Right. So that model going far beyond. So like, you know, there's the, the lowest form of care is called suitability. It's just, hey, making sure I'm putting you in something I think is going to help. And then there are several tiers and then there's the fiduciary standard. So we're at that. We moved to the fiduciary standard, which means I literally cannot put you into something I don't think is going to help you or that is worse or equal to what you're in today.
- [37:33]
A
Right.
- [37:33]
B
So anyway, moving to that standard, you need a heck of a lot of work to show that, to prove that, to research that, to understand it. But once it's done, we prepare and present the plan and clients just go. And you're gonna do it for me? Yeah. Okay, good. You go do that now.
- [37:52]
A
Yeah, that's right.
- [37:54]
B
Because what we find is these disconnected, abandoned, forgotten island of Lost Toys Style 401Ks. They're all misallocated, they're all getting eroded by fees and it's not even your fault. How can you. That's like saying, you know, you've never cooked in your life and they throw you in the kitchen.
- [38:11]
A
Yeah. At Alinea at any time they can do all types of stuff without you really opting into it. So I think for anyone watching this or anyone listening in, go consolidate your 401ks and roll over at least into one one place so that you at least have visibility into what's happening and it's consolidated and you're not having disjointed 401ks all over the place. Just. That is my one task for you today.
- [38:33]
B
Yeah. It's a good first step because having things across multiple portfolios, you don't have an idea of your harmonized return. Like what is the return across the board? What are the fees across the Board. Because even us, when someone hands us five portfolios, I know I'm not, you know, going out to dinner that night because I'm going to be in the office for six hours doing the modeling and math across five portfolios. Because, look, if it takes me five hours, you're never gonna do it. It's just gonna be an impossible Herculean task. Not that I'm some kind of genius. It's just that I have the tools at my disposal to do this, you know? But that's. That's more often the case than not. I got a little here, and I tried this Robo Advisor, and I did this, and I got that 401k over here. It's like, well, the answer that is, I don't know how much risk you're taking right now. I don't know what fees are. I have no idea. I'm gonna need to go into my cave, you know, with my team and come back and tell you.
- [39:31]
A
That's right. That's right. I think that's. That's awesome. What are other things, just in closing, that people need to know in terms of being rich versus really rich, in terms of managing risk and managing the. Like being more informed about the risk that they may be unknowingly taking?
- [39:47]
B
The rich guy is always in denial. The rich guy won't look. He knows the problems in that behind that door, but he's not going to open it. He can't be bothered to open it. The really rich guy, he wakes up every morning and he opens the windows and lets all the sun in and, you know, brushes all the cobwebs aside and wants to see things as they are. Right? That mentality is a core difference between the rich and the really rich. The really, Richard, tell me like it is. And the rich are. Don't you insult me. Don't you threaten my ego. Don't make me look bad. Right. The really rich is. All right, tell me what's going on and don't sugarcoat it. And I think if you take that honest approach to your finances. What's going on? I know I don't want to look, but I gotta look. Let's look at it together. You know, let's. We'll make it fun, right? You're going to, number one, only have to do it a few times in your life. You don't have to do this every day.
- [40:52]
A
Done.
- [40:53]
B
It's done. Once you do it, it's done. And you can improve your situation. So. And by the way, you don't need to be an iterator like me in your finances for the rest of your life. But one or two notches of improvement might equal hundreds of thousands of dollars more in retirement. So, you know, I'm sure your audience and folks on this call are watching this podcast are. Are successful, but who doesn't want a few extra thousand bucks in retirement?
- [41:24]
A
I mean, yeah, it's your money. So to me, I'm like, you don't have to work harder. You can just work smarter. Like, that is like, my core frameworks is be smarter about how you're using the resources that you've already put in all this time and effort to have maximize your return on your time. Which means that $100,000 sitting in a bank account somewhere, and it's not in a high yield savings account, it's just in cash. You're just wasting money. Like, you are literally losing money.
- [41:54]
B
Yes. I had a client ask, because at some point when you present all the data, they go, why doesn't everyone do this? And what there's a. What they're saying is, this works so well for me. Obviously, they don't understand that not everyone's like them, but that's what they're thinking. And, you know, there's a question that gets asked once in a while. It's like, why shouldn't I do this? Right? And of course, we've, as a fiduciary, we've gone through the ups, the pros and cons, right? And so in this scenario, we had already gone through the pros and the cons and the differences in liquidity, and I was just like, if you hate paperwork. Because that's it at this point. Yeah, yeah.
- [42:32]
A
That's the area between this and that.
- [42:34]
B
Yeah. If you hate paperwork. And like, you know, my team, everyone's on the call and they're trying to be, you know, stern and serious, and then everyone just starts cracking up because it's like, well, yeah, that's what is holding back so many people. It's a little bit of freaking paperwork.
- [42:53]
A
I'm not checking my own mail. So I'm. I'm.
- [42:56]
B
We're all guilty of it.
- [42:57]
A
We're all human. But I do think, you know, reminding yourself of making the time, which, again, isn't my challenge to everybody watching this right now, is to make the time to do the paperwork. Make the time to consolidate your investments into one account. Make your time to actually understand the fee structures of what you've signed up for and what's automatically being taken out of your accounts. And then Once you've done that, do another sprint of two weeks of assessing. Is there something else? Is there some other person, is there some advisor that you can hire that can help you set it up, a better system for yourself? Because to Nicholas's point, once it's set up, you're already at a step change function, much better than where you were because it compounds over time. Right? We're all still very young. We're not 95 years old watching this podcast on YouTube. Okay? So you've got a lot of years ahead of you. The best time to start is today. Well, best time was yesterday, but today's second best. Always, always, always.
- [43:54]
B
And if you make a date with yourself, hey, today is paperwork day. Tomorrow is doing something day.
- [44:02]
A
Right?
- [44:02]
B
Or today's paperwork day. Do. And then if I understand it, I do something myself, or if I don't, I, I call somebody and I start to start to get a second opinion. And then by the end of that week, it's all going to be done. And guess what? You know, that week you might have made 2, 3, 400 grand that week. That's not so bad.
- [44:22]
A
It's a good week.
- [44:23]
B
It's a good week.
- [44:24]
A
It's a good week. Yeah. All right, Nicholas, how can everyone connect with you? How can they stay in your world and maybe even check out some of your products and services?
- [44:33]
B
Yeah. So my company revise is getrevise.com g e t r e v I s e dot com. That's our retirement planning side. If you just want to follow along and have a laugh here and there. Get some financial tips peppered in. Nicholas Crown. So Nicholas Crown on. On Instagram. Nicholas Crown on TikTok. Nicholas Crown. YouTube is the handle and the socials for revise or revise annuity on Instagram, I believe on TikTok. And we have a revised channel on YouTube as well. So if you're finance minded and you like that retirement stuff, revise. If you're just more general minded, you want to laugh along, you want to check out more of the mindset from really Rich. That would just be me. Me, Nicholas Cross.
- [45:18]
A
Great. Well, we'll link everything in the show notes to make it easy for people. Nicholas, thanks for joining us today and dropping some of your knowledge. I personally, I'm gonna go just make sure everything's in order in this house.
- [45:29]
B
So cool. I love it. Thanks for having me on Morgan. Appreciate it. Yeah.
- [45:35]
A
All right, y'all, thanks for joining this episode. As always, we appreciate you. Make sure that you rate this on Spotify. And Apple. I've been reading the reviews lately and you guys have been leaving some very good reviews. I very much appreciate you. Some of them have really made me sm. So if there's any tips that you learned today or any actions that you're taking, please leave me a note in the review because I do read all of them but I don't like that one person who gave me a one star review. I don't know who you are, but.
- [46:00]
B
I did not appreciate we'll find them. We'll find them, find you.
- [46:04]
A
But for everybody else, thank you. And for those who pre ordered the books, make sure that you are checking out my website for your pre order bonuses and join the Worksmart community if you want to join our launch chain for the book which is out on April 1st. Look forward to seeing you guys. See you later. Thanks for listening to the Journey podcast. If you enjoyed this episode, make sure you leave a review and head to our Instagram and YouTube to leave a comment. I look forward to hearing how this podcast has made an impact on your own Journey.