Podcast Summary: The Money Mondays

Title: The Money Mondays
Host: Dan Fleyshman
Episode: The 40-40-20 Formula: How I Invest My Money for Safety, Growth, and Big Wins
Release Date: July 15, 2025

Dan Fleyshman, the youngest founder of a publicly traded company and a seasoned angel investor, presents a comprehensive exploration of his personal investment strategy in this episode of The Money Mondays. Titled "The 40-40-20 Formula: How I Invest My Money for Safety, Growth, and Big Wins," Fleyshman delves into his 40-40-20 investment philosophy, outlining how he balances risk and reward to optimize his financial portfolio. This summary captures the key discussions, insights, and conclusions from the episode, enriched with notable quotes and time-stamped references.

1. Introduction to the 40-40-20 Formula

[00:00]
Fleyshman introduces the 40-40-20 Formula, a strategic approach to investing his funds across different risk categories to ensure safety, foster growth, and achieve significant returns. He emphasizes the importance of understanding and adhering to a structured investment model to maintain financial stability and capitalize on high-reward opportunities.

Notable Quote:
"The 40, 40, 20 part does not change, meaning I stick to the same principle, the same model, but I might be looking at certain things that change within the category." [02:15]

2. Breakdown of the 40-40-20 Allocation

a. Low-Risk Investing (40%)

Fleyshman allocates 40% of his investment portfolio to low-risk investments, targeting an annual return of 5-9%. He underscores the necessity of combating inflation by ensuring that capital is consistently at work rather than sitting idle in a savings account.

Key Investments:

• Certificates of Deposit (CDs): Offering 4-5% returns, these are considered nearly risk-free when invested in reputable banks like Bank of America, Chase, or Wells Fargo.
• Gold: Viewed as a stable commodity with a long history of consistent appreciation.
• S&P 500 Index Funds: Surprisingly categorized as low-risk due to their historical average return of 11% per year over 91 years, with minimal losing years.

Notable Quotes:
"The S&P 500 has averaged 11% a year return. If you dollar cost average or you just look at the investment over the course of the last 91 years, that number has been extremely consistent." [15:45]
"The majority of your capital should be at work. And if you don't feel comfortable when I say that, put into low risk or no risk investments." [07:30]

b. Medium-Risk Investing (40%)

Another 40% of the portfolio is dedicated to medium-risk investments, aiming for 10-30% annual returns. Fleyshman identifies three primary avenues within this category:

1. Real Estate:

   • Strategies: Long-term holdings, fix-and-flips, Airbnb rentals, multifamily units, commercial properties.
   • Approach: Co-invest with experienced real estate professionals or invest in established real estate funds to mitigate risk.

2. Individual Stocks:

   • Selection Criteria: Investing in companies he believes in or uses personally, such as Netflix, Apple, Amazon, and Tesla.
   • Strategy: Consistent investments in chosen stocks to leverage their growth and compound returns over time.

3. Cash-Flowing Businesses:

   • Example: Investment in Everbowl, a rapidly expanding Acai bowl chain, where capital is injected to scale operations, resulting in substantial growth and profitability.

Notable Quotes:
"I'm investing in companies that have a proven track record over and over and over." [25:10]
"If you're buying from Amazon like most people on the planet do, well, Amazon's one of the best performing stocks in human history. Why don't you have some Amazon stock?" [22:50]

c. High-Risk Investing (20%)

The final 20% is allocated to high-risk investments, with the aspiration for extraordinary returns, potentially 3x, 7x, or even 12x. This segment serves as the catalyst for significant financial breakthroughs within the portfolio.

Key Investments:

• Cryptocurrency (Bitcoin and Ethereum): Despite volatility, Fleyshman highlights Bitcoin's historical performance and its potential for sustained growth due to limited supply.
• Angel Investing: Investing in startups and growing companies with solid traction and revenue, significantly reducing the inherent risks associated with early-stage ventures.

Notable Quotes:
"Bitcoin is the single best performing investment asset in the history of the world." [50:30]
"When you do an angel investment, you have to be comfortable locking up that money for a long period of time." [45:20]

3. Real-Life Investment Examples

Fleyshman shares detailed examples from his investment journey to illustrate the efficacy of the 40-40-20 Formula:

• Everbowl Investment:
  • Initial Investment: $500,000 in 2018 when the company had approximately 13 locations.
  • Growth: Expanded to 103 locations by 2025, demonstrating an 800% growth in scale.
  • Returns: Achieved significant profitability with each location generating substantial annual profits, drastically reducing investment recoup time compared to other franchises.

Notable Quotes:
"If someone has their 13th location of something I know going in, I could lose some of my investment on location 14. But it's unlikely because of the experience." [34:50]
"Over the course of time, companies with experience, people with experience, businesses with multiple locations are less likely to have failure." [35:15]

4. Combating Inflation with Active Investment

Fleyshman emphasizes the pressing issue of inflation, which erodes the purchasing power of money over time. By actively deploying capital into investments rather than holding large cash reserves, investors can preserve and grow their wealth.

Key Points:

• Inflation Impact: At 8-9% annual inflation, $100,000 in a bank account loses its buying power year over year.
• Investment Strategy: Ensuring that capital is continuously invested in various assets to at least partially offset inflation's effects.

Notable Quotes:
"The majority of your capital should be at work. And if you don't feel comfortable when I say that, put into low risk or no risk investments." [08:10]
"If you have $100,000 saved up in the piggy bank... you have to deploy into investments." [09:05]

5. Detailed Exploration of High-Risk Investments

a. Cryptocurrency

Fleyshman discusses Bitcoin's unparalleled performance, highlighting its limited supply of 21 million coins, with 4.6 million already missing due to lost wallets and inaccessible storage. This scarcity, coupled with growing demand, positions Bitcoin for potential exponential growth.

Investor Tips:

• Invest only what you can afford to lose due to volatility.
• Utilize platforms like Cash App, Robinhood, and Coinbase for incremental investments.
• Emphasize long-term holding strategies to weather market fluctuations.

Notable Quotes:
"There will only ever be 21 million bitcoin. 4.6 million bitcoin are missing, and people don't talk about this or realize this part." [55:50]
"Bitcoin is something you should be considering... Just invest a small amount of money over and over again." [58:30]

b. Angel Investing

Fleyshman elaborates on his involvement with Elevator Syndicate, an angel investment group he founded, which has successfully raised over $56 million for various startups. By investing in companies with solid sales figures and growth potential, he mitigates the high failure rates typically associated with angel investments.

Key Points:

• Investment Criteria: Focus on businesses with existing revenue streams and growth trajectories.
• Portfolio Diversification: Spread investments across multiple ventures to reduce risk.
• Long-Term Commitment: Prepare for extended investment periods, often 5-7 years, before realizing returns.

Notable Quotes:
"When it comes to this, Angel investing, I've actually raised $56 million... These are the things that I actually do." [42:10]
"There is going to be and there can be failures in investing. I reduce my risk, if you notice, from the kind of the theme and the trend of my topics." [39:55]

6. Practical Investment Strategies and Tools

Fleyshman encourages listeners to utilize compound interest calculators to visualize the potential growth of their investments over time. He illustrates how consistent contributions, even modest ones, can lead to substantial wealth accumulation.

Actionable Steps:

• Set Clear Goals: Define retirement ages, desired returns, and contribution amounts.
• Automate Investments: Establish regular contributions to chosen investment categories.
• Leverage Technology: Use online tools and platforms to manage and monitor investments effectively.

Notable Quotes:
"If you put in your compound calculator, $10,000 a year, it will blow your mind what that number turns into like a staggering amount." [12:30]
"Research the compound calculator and see the magic of compounding interest." [13:00]

7. Concluding Insights and Encouragement

Fleyshman wraps up the episode by reiterating the importance of open financial discussions and educated investment choices. He promotes his various ventures, such as Elevator Syndicate and Elevator Mortgage, as platforms for listeners to engage further with his investment philosophy.

Final Thoughts:

• Diversification: Adhere to the 40-40-20 model to balance risk and reward effectively.
• Continuous Learning: Stay informed and adapt to market changes within each investment category.
• Community Engagement: Participate in events and investment groups to expand knowledge and opportunities.

Notable Quotes:
"We have to talk about investing. We got to talk about loans, we got to talk about bills." [1:15:30]
"Have open conversations, learn as much as you can, research as much as you can." [1:16:20]

Conclusion

In this episode of The Money Mondays, Dan Fleyshman provides an in-depth analysis of his 40-40-20 investment formula, offering listeners a structured approach to managing their finances across varying risk levels. Through real-life examples, strategic insights, and actionable advice, Fleyshman empowers his audience to make informed investment decisions aimed at safeguarding and growing their wealth. Whether you are a novice investor or seeking to refine your portfolio, the 40-40-20 Formula serves as a robust framework for achieving financial success.

Additional Resources:

• Elevator Syndicate: elevatorsyndicate.com
• Elevator Mortgage: elevatormortgage.com
• Everbowl: everbowl.com
• Compound Interest Calculator: Google Search
• Listener Events: Elevator Night

Stay tuned for more insightful episodes every Monday on TheMoneyMondays.com.