← The Money Mondays
The Money Mondays
Why Buying a Lamborghini Could Be Smarter Than Saving Money w/ Pejman Ghadimi 💎 E122
00:41:52
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- [00:00]
A
The world has been conditioned to think they can basically buy things and they have to make a ton of money to keep wasting their money buying luxuries. But I teach people in and out how to actually park their money in luxuries and live much better lifestyles than they ever thought possible without actually wasting or spending their money, but rather parking it.
- [00:24]
B
Ladies and gentlemen, welcome to a very special edition of the Money Mondays podcast. And as you guys know, 99% of the time I record inside of an RV motorhome traveling around the country. But we actually have someone in the car industry, so I should have my motorhome here. But I just found out that he happened to be in town, he was here from Florida. So we decided let's knock out a podcast. So we're here in this amazing studio in Santa Monica, Brentwood area. Now, as you guys know, we cover three core topics. How to make money, how to invest money, how to give away to charity on this podcast. Typically our episodes are 32 to 40 minutes because the average workout is 45 minutes, the average commute to work is 45 minutes. So you'll be able to listen this episode in under 40 minutes for your listening pleasure. Now, without further ado, I'm going to have our guests give us a quick 2 minute bio so we can get straight to the money.
- [01:10]
A
Well, I appreciate you having me on. And real short, I am the ultimate guy when it comes to alternative assets. Cars, watches, art, handbags, and everything else that comes with investing or putting money or parking money, I should say, in those things. So the world has been conditioned to think they can basically buy things and they have to make a ton of money to keep wasting their money buying luxuries. But I teach people in and out how to actually park their money in luxuries and live much better lifestyles than they ever thought possible without actually wasting or spending their money, but rather parking it. And so I have a huge background in finance. I'm the founder of Exotic Car Hacks, Watch Trading Academy and also have authored a ton of books on human awareness and how basically humans make decisions around their day to day lives.
- [01:57]
B
Okay, so let's break that down. There's a lot of fun, there's a.
- [02:00]
A
Lot of stuff in there.
- [02:01]
B
Exotic car hacks, what is that?
- [02:02]
A
Exotic Car Hacks is a platform that since 2000, about 9 or so has been teaching people how to buy, trade and sell exotic cars as a means of actually parking alternate their money into alternative assets. Instead of actually looking at cars as liability, it's helping them look at them as an asset.
- [02:20]
B
So a lot of times when people, we are preconditioned to think, oh, you buy a Lamborghini or you buy a Bentley, you buy a Mercedes, the second you drive off the lot it's down 10%, 20% or some number that people.
- [02:29]
A
Just make up, which usually leads people to not buying those things because they're usually looked at as a bad investment or as a bad purchase because it's like a kind of a piss your money away purchase. Right, but the way we've reframed this and we've been really good at helping people understand that not every car is created equal. And the right Lamborghinis, the right Ferraris, will depreciate during their first year, but then ultimately hold flat at what we call a bottom cash value. And so we invented the bottom cash value formula, which is a formula that enables us to understand every single car in the market and which cars will actually have a stop in that depreciation based on time and will only depreciate based on miles and conditions, such as if you crash your car or, or not. And by identifying these cars, you're able to hop car to car, meaning one year, two years, three years, however you want, but you're able to ultimately buy a car or finance it however way you want. But once you put that money in the car, it doesn't actually depreciate. So even if you're making your payment, even if you're, let's say you can't afford to buy a quarter million dollar car cash, you're still paying your monthly payment like a normal payment. But at the end when you go sell your car, you actually recoup that payment because it's now equity in the car and you ultimately the car itself hasn't actually depreciated from the purchase price that you actually bought it for.
- [03:42]
B
So there's some guys we know on social media, like Dan, Am I Andy for sale? Etc that might have 40, 50, 60 cars sitting in a garage that are not being driven. How are those on the appreciation depreciation scale?
- [03:54]
A
So I know all those people really well. I actually bought one of Dan IMs previous cars and I'm very close friends with Andy and I also personally collect cars. So those collections not only don't appreciate, they actually appreciate. So that's, that's like the tier level of the collector spectrum where you're buying cars that are so rare and exclusive, like I personally do. That's not what I teach every day because that's a Very small group of people, sure. But you're buying cars so exclusive in specs, configurations or hard to get models that they're immediately significantly in higher demand on the used market because most people can't get them on the new market. So that's a difference here because that's like, hey, I have all the money in the world and I'm just buying a ton of shit. But when you're normal and starting up, you usually look at your. Most people will, will comfortably buy a Range Rover. They'll be like, oh, that's my luxury. Kind of like, I bought myself a Range Rover, a really nice Volvo. For the price of that Range Rover, they could probably have a Lamborghini, Urus or Rolls Royce, Cullen. Those are cars that they don't think they can afford usually when they buy the Range Rover because they think in conventional mindset of if the payment is a thousand dollars a month on the Range Rover, it's $3,000 a month on the, on the Cullinan. So therefore I can't afford a cullinan, that's like $2,000 of extra money. But it's not true though, because even though you're spending $3,000 a month maybe for the Cullinan, if you're buying the right Cullinan, that money is still parked in the car. But that Range Rover will keep depreciating over your lease back down to basically a wash of 40, 50k after like 3 years of ownership. But that same Cullinan, which you could drive the exact same car, might cost you 15 grand over three years, but it's a Cullinan. So you got to drive a Rolls Royce for less money than a Range Rover. Now, I wouldn't say you got to drive a Rolls Royce for less money than like a Honda Civic, sure. But if you're gonna buy a Range Rover anyways, why not get a Lamborghini or Colin and save the money?
- [05:43]
B
You said something in there that said someone, they couldn't buy it on the new car market. So is that because something only has like 50 or 100 units, like people can't go buy it or because Ferrari sometimes has a list of you have to previously have a Ferrari to buy this Ferrari.
- [05:58]
A
So both, like the cars you mentioned earlier, those two people's specific collections are filled with cars that are very exclusive in nature. So they're not just a Bugatti, they're like a carbon fiber Bugatti, which is like a full exposed carbon final edition, like Super Sport is incredibly hard to get. And it should have been ordered like three years ago. It finally came in. So it's a very unique type of clientele for these companies. And over time these kind of levels once they're reached are just like there only needs to be 10 of us wanting that car and there's only three of us that have it. Right. So, so amongst the 10, we all know each other. So it's like, oh, you got this. I wish. When you don't want to call me. Yeah, but so those cars are at that level. But generally speaking, like Ferrari has a list obviously for super VIP customers. And those cars are worth usually 2 to 3x of what you're paying for them.
- [06:46]
B
Oh really?
- [06:47]
A
Yeah, right as they come out, if those are the right cars. But sometimes there's also this misknowledge which we teach our students not to fall for that just because you walk in a dealership and a Ferrari dealer tells you, oh, that car has a list and you need to buy these other five cars before. That isn't necessarily true. That's just a game that Ferrari understands the common public believes to play. So they want to make their money. So they loop you into 3, 4 like average cars to sell you a decent car. But even that car would depreciate. It wouldn't be the right car.
- [07:14]
B
So you also mentioned the training academy. What are you training? How does it work? What's the concept behind it?
- [07:18]
A
So watch training academy is something different because watches have like cars are what we call wealth preservation. So you can actually buy a car, preserve your money and so buy a great car, enjoy a great lifestyle, not lose any money. And you don't have to rent it out, you don't have to create income or anything. That's, that's, that has liability on the other side, if you want to make money, we teach people basically how to take watches and turn them into a profit center. So watches have huge amounts of margins. So if you're in, in any type of investing ideology or in real estate, the reason people like real estate is because the asset class is usually safe. You buy it and over time, even if you make a bad mistake, it'll generally pay off. Like even if it's a 10 year return, but there's no liquidity to it. And it's very hard to constantly turn real estate unless of course you're in the business and you have capital and you're constantly like turning, transacting on it. But you still have paperwork, you have to set up your LCs, you have all your 1031 exchanges. So it's very different from the watch game, which has. Is completely unregulated, doesn't have any type of, like, paperwork associated with it. And it's the easiest thing to trade for margins that are anywhere from 20 to 30%, some cases as high as 40%, and can start as low as $2,000 a watch. So we're also trained to think watches, because they're exclusive and sold in boutiques, are generally expensive. When you walk in a mall, you'll see a Hublot boutique, and you'll see, like, a $20,000 watch and be like, wow, I got to work my way up to owning a 20,000 watch. What people don't know is that that Hublot is actually a $4,000 watch. Well, exactly $4,000. Sold then for $20,000. So even if there's a discount, it sold to you for, like, 18. You think you got a great deal of 16. But the real worth of that watch on the secondary market is 45 grand. So could you technically find that watch on the secondary market for 45 grand if I told you where to get it, how to negotiate it, and then turn around and sell it for seven to eight grand to another guy that thought paying 20 grand was the easy way out.
- [09:08]
B
For sure.
- [09:09]
A
It's basic arbitrage. Right. But knowing which watches to buy, how to actually negotiate them down the right price, and knowing which ones actually stay strong in value. So even if you can't sell it for six months, the value doesn't really go anywhere. Is the key to learning how to make money with watches. And it's something that we have students doing this part time. They're making $10,000 like a month. We have other students doing this full time, making $3 million a year doing it. So, like, amazing. Yeah. And they don't have any watch knowledge, but they just understand which models to go after and what to do with it.
- [09:37]
B
So. Fascinating. So I used to own a jewelry store, my former life. In 2008, I opened up in downtown San Diego by the stadium, by Petco Park. I called it platinum collections. And Sammy the Jeweler running the one side of it. I. We had these dynamic watches, the. The floating watches there.
- [09:57]
A
I've seen you wear this for a long time. You've had this for a really long time.
- [10:00]
B
2008, we start. We started selling them, and it was a fascinating business because the margins were nuts.
- [10:08]
A
Huge, right?
- [10:09]
B
Especially on diamonds.
- [10:10]
A
Exactly. Yeah, exactly.
- [10:11]
B
I was. I mean, I could get.
- [10:12]
A
I mean, the diamond market's taking a tank recently because of all the fake diamonds, the, the lab grown diamonds, not.
- [10:17]
B
The fake ones, but, but I was able to give like 20, 30, 40, 50 off and still be making 20, 30, 40, 50%.
- [10:23]
A
Exactly. And it's the same thing with watches. And a lot of people don't realize that like even major manufacturer of watches, their cost on the, the inventory to selling to the boutiques, like Cartier watches are 30 cents on the dollar. Well, but people, how many people go in and buy Cartier watches for their wives, for their girlfriends, whatever, and they think they're like, oh my God, like I got a great deal, I got 10% off on a watch. That watch that was 10 grand. A Cartier, 30 grand. A Cartier only cost 30 cents for that manufacturer. Then they sold it to the store to 50 cents and the store made 50 cents in margin. So that's what they make their money plus tax, whatever. But when they're on the used market, they cost less than 50 cents on a dollar. So. And they're brand new, so they're just like leftover and there's not sold at the store. And a lot of people think, well, what if I buy it from a third party? It's not real or it's fake, but it doesn't work that way anymore. There's so many authorized and really reliable jewelers in the world that are selling secondary watches. And they're real and they're not like issue. They have the same paperwork, the same warranties, the same everything, and they're just sold at 50 cents on dollar.
- [11:23]
B
So if someone out there is listening and wants to learn from you, are they the someone that's like it wants to actually own a jewelry store, own a website to sell jewelry, or they're just someone that's in the mix.
- [11:34]
A
Zero. So the, the reason we started this was because we realized people want luxuries.
- [11:40]
B
Sure.
- [11:40]
A
Like this. It wasn't about teaching people how to start jewelry stores. Like I could care less for that. That's a real business. It requires all the logistics, the licensing, this, none of that. Yeah, none of that stuff. The point was if you're a normal human being, you'll technically aspire to make money. They're listening to Money Mondays. They want to make money. The point is, if you learn to make money, typically you want to make money because you want to improve your lifestyle. First you improve your house, then you improve your car, then you tend to indulge in travel luxuries, etc. My argument has always been, no matter who you are, if you aspire to do great things, you're going to legitimately end up in a position to buy great things. And when you buy them, there's only two ways you buy them. Either you buy them in a fashion that allows you to keep buying them without losing money and in many cases turning even your hobbies or things you want into a money center, or you end up expend creating expenses all the time and ultimately these expenses never come back and you have to keep making even more money to keep upgrading your lifestyle. So we all know that even the our dream car is only our dream car for a very short period of time. Like we know that there's another car, we'll want more. We know when there's a cool watch we like, there's a better watch, we'll eventually want more or a second one. So the argument is, you know, you're going to divorce these things anyways. They're not like there to be like loved forever. So when you buy them, buy them in a manner that allows you to make money off of them when you get rid of them instead of actually lose money every time you do it. This is one of the key things that athletes don't learn. Because if you think about like someone who doesn't have money, training typically comes into the game, the first thing they go, I got a hundred million dollars, I gotta buy cars, I gotta buy this. What if they bought these cars, right? And at some point they said, oh man, I overspent, I need to get my money back out of car. And instead of saying I paid 600k for a car, I got 300k back, they said I paid 550 for a car, I got 540k back.
- [13:26]
B
Amazing, right?
- [13:27]
A
So it's like, okay, so I made a mistake, I shouldn't have bought that car. Maybe I over but I didn't lose that money. It was just sitting there in the right car and I didn't want it now, you know, for any reason. Like I only need two cars instead of 10. It is what it is. So we have been brainwashed as a society to think clearly that our job is to make money. So we spend money. And one of the things we've been teaching people since 2010 is you don't need to spend money to have lifestyle. You can learn to park money. And while you can't park money and travel because it's or in food, like if you go to restaurants, money's gone. At the very least, the largest purchases you make, like your home and your car and your jewelry and even the handbags you buy for your wife, your girlfriend, whatever, or for yourself, those things can be places you park money and recycle that money over time. And people really, this is the interesting thing then, like people know this already when it comes to housing. There's not one person that buys a piece of real estate thinking it's a bad purchase, like, I'll never get my money back. There are people who overspend on real estate, but they'll never think like buying a house is a disaster, like why did I buy a house? That's stupid. And they'll say, oh well, in a couple of years if I don't like it, I'll upgrade it or get rid of it, whatever, get my money back. But they don't learn to think that way when it comes to luxuries because society has brainwashed us to think that all luxuries are basically expenditures and you're throwing your money away. But there has been, especially post Covid, a significant shift in the amount of luxury goods in the marketplace. Like there's a ton more Lamborghinis today than there were 10 years ago. Ton more Rolexes on people's hands than they were before. And the key areas like California, Florida, Texas and these large states where people are like businesses booming, et cetera, people are spending money. Sure. Right. And, and, and that's great. You should want that. You should want to aspire to make more money so you can live a better lifestyle. But the argument is why not learn to actually not. We're never saying to someone, don't buy these things like they're bad things, they're amazing. Everyone should experience what it's like to wear a hundred K watch. Everyone should experience what it's like to drive a half a million dollar car. But what if you could experience it and it didn't have to be a financial burden. That's the, that's the difference. And while it sounds really good to be true and people are like, well, you got to learn how to really sell cars and buy cars and be a dealer. You really don't like this world exists. And because people are so alienated from it, they assume it's not for them or it's, they're going to have to pay cash or go and work really hard or it's a bad expense, but it's really not. Like, I mean, there are kids out there who know nothing about watches, making 700, 800k part time from their houses, trading five to 15 watches a month. Okay, like what I'm Saying is, let's assume someone's like, exactly. It's an amazing. I mean 800 grand is a lot of money. You know, even 300 grand, a lot of money. That's not even use big numbers. 10 grand a month is a lot.
- [16:13]
B
Of money for sure.
- [16:14]
A
It depends on what your aspirations are. But if you have a normal job and you're working at a company coffee shop or something and you have fifteen hundred dollars saved, you can literally take that fifteen hundred dollars, buy your first watch, let it grow into its own thing, similar to a trade you would do in the stock market. Except the difference is the stock can disappear to nothing and it can just keep going down and you don't even understand what's happening. But a watch is on your wrist, so it's opening doors as you meet people, you're getting into new peer groups and you're making the same money you would in the market. And it's easier to trade in and out of without having to wait for bumps and dumps and, you know, anything else.
- [16:49]
B
What are your thoughts on the exotic car rental market? And like basically high end Turo? Like have you ever thought about the like terrible Lamborghinis and Rolls Royces where people renting them out?
- [16:57]
A
Terrible. So this is the big mis, misconception in the world of cars. People believe that the revenue associated with cars has to be when you share them, similar to Airbnb. And Turo makes that very easy. You can rent stuff. If you want to make money renting cars, buy Corvettes, put them on Turo. It's cheap, it's easy. Buy a couple of ones even if they've been salvaged, hit before, repaired and put those on Turo. The amount of money that will come to rent that on a continuous basis and just keep giving you money even if there's an accident there and there. The net positive will be better over time. It's a risky business because generally you have to have separate insurance. You try to put it on people's insurance or tours insurance, but there are very high limitations there when it comes to exotic cars. Not so high on cheaper Corvettes and Audis and things like that. So if I was going to try to make money in the rental business on Turo, I would never rent out an exotic. You have to understand that when an exotic gets hit in an accident, it's worth 20 to 25% less. So the moment you throw your car and you're like, oh yeah, I made like five grand. I didn't do anything because someone is done it's done and the money's gone. So you want to avoid that at all cost. And one of the big misconceptions, again, when you're in a position to own something like that, like, generally own it, you don't want to lend it to people. Like, I've never seen someone that's like, I've made enough money to buy my Rolls Royce and in order to pay for the payment, I want to lend it to a complete stranger for two days a month. No, nobody wants to do that. Like, nobody will do that. Like, generally, people that do that is they. They don't understand business and they only see business in a linear manner. That's like, well, if I buy the car and I have a 5K payment and then I rent it out for five days out of the 30 days, or, well, that's 5K, like, my payments paid off. But they don't look at the liability, the asset costs, the issues. What if they get kicked off Turo or they don't cover the insurance, so they put themselves in a bad, like, financial position. And I would never, ever, ever tell people that renting their car is the way to minimize their expenses.
- [18:51]
B
Are there certain assets that you want to buy and just hold forever?
- [18:54]
A
Are there certain things you just hold, you can hold? Like, I have a very extensive personal watch collection and a very extensive personal car collection, very similar to Andy Frazelle's collection. Like, I have a lot of cars from Bugatti's to, like, Porsches, rare, old, new, and some of it. One of the things that's really key is once you get through this process of buying and driving your cars, you obviously get richer in life. Like, you obviously make more money. You get 10 years older, you have more adult money, right, Than when you're in your 20s and your 30s. You have more serious money. You might build a business, things might change. Or you might be in a position where, hey, for 10 years you've done this strategy we talk about and you didn't actually waste money. So even though you're making more money, you know, it keeps accumulating. And at some point it makes sense to switch from this idea of lay. I'm going to drive a new car every two, three years and get in and out to, I'd like to own two to three nice cars like a Porsche, Ferrari, and maybe like a Range Rover. And you can start buying cars that historically go up in value every single year for the next 30 years. They'll never go down, and they won't always go up every single year like 2% or anything. But over a 10 year period historically they've never not gone up at least 10, 15%. So. And they are bumps when they might go up 30, 40% if it's a very rare car, depending on the type of car you buy. And they don't have to be expensive. In the last like maybe two, three years we've seen cars that were 100k goes up to 250, 300 because they're becoming collectible and they're older and there's less of them on the market and or suddenly a celebrity ends up buying a more vintage Ferrari. A lot of people are like, oh, that is a collectible car we never looked at and there's only 10 left. They quickly get off the market. Now they come back at double the price.
- [20:33]
B
You know, so there's a lot of memes and news articles this last few months in particular about Birkin bags. Now all these girls love to post about these news articles saying that Birkin bags are actually beating the S&P 500 as an investment.
- [20:45]
A
And the same articles were there by watches in 2020, 2021 and 2022. So that's a marketing strategy.
- [20:51]
B
But yeah, talk us through that.
- [20:52]
A
Okay, so it's very true that the right handbags and particular Hermes bags from the Kelly and the Birkin, not all sizes, but the majority of the smaller ones from 28 and down will typically be worth more than MSRP brand new as soon as you buy them. Usually 2 to 3x depending on the color, the leather and the styles. And it's very true that with the price increases of luxuries. So like you've seen this over regarding tariffs, you've seen this over the last like three years because of the COVID and supply chain issues. You notice that generally speaking, like manufacturers will raise their prices because the cost of goods go up. Well, that stabilizes the used market to basically not move or also move up with it. So if you had a bag that was two times MSRP, meaning that brand new came out for 14,000 but used was maybe 28,000 on top of that in profit. Right. So it was basically selling for like 30, 30 to 40 grand. Right. That bag, if the price increase of the bag goes from 14 to 16 will not go, instead of being 30 to 40, will go like 33 to 43, you know, so it'll move up over time. So the cost of entry gets more expensive. And it's, it's very true because bags are another asset class that hasn't depreciated over the last 10, 15 years. But Hermes bags have gained popularity. But even pre popularity were so scarce in certain colors that, that they end up being worth a lot of money on the secondary markets. Now if you don't have the access to the list that are made to get a bag, you can still buy used bags at the. Right. Like they're used but like brand new, meaning they're new in box but they're not sold at the store. That's what I mean by use. And you can still make those bags literally like turn into a profit center by wearing them for free for three, four, five years and maybe making five, six grand at the time of sale. And. And we teach that in one of our courses too called Secure the Handbag.
- [22:41]
B
Secure the handbag, that's great.
- [22:43]
A
Yeah, we have courses on cars, watches, art and handbags as well as real estate. So we, we basically teach people how to take any of the expenses that their lives require them to have in the luxury segment and turn them into a money making opportunity instead.
- [22:58]
B
What are your thoughts about wine bottles?
- [23:01]
A
So the, that gets a little bit trickier. So art and wine are a very acquired taste and it's a very specific type of segment that's very hard to transact in. Actually you're a case study in one of my courses too for the card market, you know, because you do the, all the. Yeah, exactly. So cards. I was actually talking about this in one of the, in one of our webinars is that a lot of people ask me, well, what about cards? What about sneakers? What about these other things? Right. They're all collectibles and technically they could be sold. So the, it goes back to the wine thing. So kind of loop into this. So the reason sneakers really don't fit into the model we talk about is because sneakers have no utility. Because once the utility is used, meaning once you put them on, the value is gone. Right? So, Right. So they're gone. Like you buy those like expensive sneakers.
- [23:47]
B
Buying new shoes, guys.
- [23:48]
A
Yeah, right. Like so you're buying them, right. Like, and you understand they're worth a lot of money, but once you use them, that words basically disappears. So it's almost like you can't. You, you can buy something. It's arbitrage. You buy cheap, you look, it might go up, you buy. So it's different because we talk about the utility of things is just as important as the investment. So the difference between investing in a stock versus investing in a car is that you want a car, you're gonna buy a car anyways. You want to watch on your wrist. You're not forced to. You're gonna buy it anyways. So the utility is very, very important. And cards specifically don't necessarily have a utility in that manner because it can be used. You can't, like, throw a Pokemon card or someone for something. But the main thing that's really important about cards is the one piece of it that's become very transactional over the last couple of years is the institution of it, which means that people like you have basically opened shops that enable people to trade these things and have liquidity for them. Right. Like, so they can come to you.
- [24:45]
B
I'll buy it.
- [24:45]
A
Right. You'll put a number on it. Now that number might be lower than what the market is because you're like, I'm in the business and making money, so I'll buy it for this, I'll sell it for that.
- [24:52]
B
I pay 70 cents on the dollar.
- [24:54]
A
Exactly. And cards have become that because of people like you, because they're becoming more institutionalized where people can trade them. So wine also has its. Its model like that, but it's not as open. And because it's such a scarce amount of people, it doesn't work in what we talk about. So similar to art, too, you could have art that's like basically $5,000 art that's worthless that you're buying, that has no value because you like the picture. Or it could be blue chip art. Like you might be buying something that you like a. Like a brainwash or something that you're like, entry level, still has some kind of tradeability because people want it. And you might say, okay, I paid like 5, but it always will be worth 4. Like, so it's always has some liquidity, and that's what we mean by store value. So you have to find things that have a continuity of institution, being willing to pay for it so that you're never overpaying and have huge drops of like 50 to 80% because you're just buying because you want it. And nobody really wants it. But a pawn shop, you know.
- [25:52]
B
Yeah. In the sports card market, I like supply and demand. So I focus on cards that are a PSA 9 or PSA 10, which is the grading company that have a limited supply. The problem is a lot of people want. I just want that Ken Griffey Jr. Card from the 80s. Yeah. But they made tens of thousands, if not hundreds of thousand, that card. That's why it doesn't have sustainable value. But, like, The Michael Jordan rookie card, the PSA 10. Well, we know there's exactly this many units all over the world. And the supply keeps getting smaller, of.
- [26:18]
A
Course, so the value keeps going up, of course. And it's the same thing about those collector cars you talked about. You know, when you're only making five Bugattis and you got 15 people wanting them in five years, two of them will be crashed too. There'll be three of them, you know, and there'll be people that never sell them. And there's that one guy that'll drop it, and they'll be like, I'll sell mine for five times what I paid for it. And someone will be like, okay, I'll pay it.
- [26:37]
B
So there was Logan Paul bought a card for $5 million.
- [26:40]
A
I think I saw that on Social.
- [26:42]
B
Yeah, so my friend Travis and I, we bought 20% of it. So from his 5 million, we bought $1 million of that card within 10 seconds. He got an offer for over $7 million from big auction house, and he turned it down, obviously, because he's rich and it's Logan. And now because he's marketed so much, he iced it out. And where is it at? You know, wrestling match, et cetera. Now, there's some really big interesting offers that have come because of that card being a one of one in the car market, watch market, et cetera. How much does it matter to go after things that have limited supply?
- [27:14]
A
Significant. I mean, but remember, in the watch market, there's also this illusion of. This heavy illusion of scarcity. So if you go to a Hublot boutique, you'll see they'll say, this is one of 10 units. But 10 units of something nobody wants is still worthless. So it has to be very specific. Like if you said, hey, I bought this really rare Ferrari everybody wants, and this is the only one that's baby blue, it would bring significant money. But if you said, I bought this Ferrari that nobody cares about, and I decked it out in this beautiful pearl white, and there's only one in the world, it would still depreciate 50% in value. So the argument is, if you're buying the goods people want generally, and you're getting the scarcer versions, meaning the versions that are even more exclusive because of the dial, because of the, like, maybe the size the dial, or if it's a car, it could be the options on it, the color, the specifications, then those things will be astronomical, like art. Because cars and watches are an expression of status. So people want exclusivity, People want To be able to say I have this and you can't get it. So people come to them and go like oh this is beautiful, like let's talk about it. So, so the rarer the more expensive as long as people want it on.
- [28:26]
B
The storage and safety side. So I bought cars but I only have a two car garage or I bought watches but I live in an apartment. Are there storage facilities or safe, you know, safety deposit box? Are there ways to store stuff like this?
- [28:39]
A
So yes, I mean you can use safety pass boxes. I know LA is a little bit difficult when it comes to watches and things because there's a lot of crime and death. So I mean first off I wouldn't tell you to walk around with a 300k watch if you didn't know where you were going. There was a risk that you could get robbed. But you can do safety deposit boxes and banks when it comes to putting watches away for cars. They are safe storage places that are primarily focused on storing exotics, fine wine art etc and their car condos we call them that are usually available in every city or state or you can even buy like a very cool, very cute warehouse and very small warehouse in a good part of town, put a lot of security on it and end up actually tax deducting that in its own right, you know as a business. But that's a whole story for another time. But the core of it is most major cities where these things are generally used and there's a large enough audience have things like car condos and safety possible boxes where you can leverage for that.
- [29:33]
B
So let's say I'm 26 year old kid, I saved out some money, I bought three watches, let's say I bought one for 15 grand, someone offers me 20 or 22 or 24. How the heck do I decide when it's time to sell?
- [29:46]
A
So my view on that is you always take the money as long as the it's the replacement cost is less than what the offer you're getting. So whenever I gauge like should I sell what I have today, am I going to miss it? Or like am I getting maximum money? I usually ask myself if I was going to buy it myself today, knowing what I know that people don't know, could I buy cheaper than this person's offering me? So if a jeweler came to me and said hey I'll give you 100k for your watch and I'm like but I can't really replace it for less than 110 and it would take a year Then I go, well, that's not really worth it because that offer is probably gonna be on the table all the time. But if someone came and gave you. Gave me 150 and said, hey, I'll give you like 130, because I really wanted it and I don't want to go look for it, then I'd be like, okay, well, I can replace it probably for 95 to 100 grand. So I'm just gonna go and, like, get that deal done. Even if I don't replace it immediately, if I change my mind and I can't find it for 80 grand and really make that work, I. I can always buy back for 100 and basically still make a profit today. Now, if it's a one of one, like, I've sold a one of one Ferrari that I had that I designed that was baby blue, that was like stunning and brought the world record for the most expensive Ferrari Pista sold ever. So when I sold that car, it was a one of one and I regretted it. Then I bought it back again because the owner sold it to me, and I sold it again because I made 200 grand every time, like three times in a row. So I made 600 grand on the car. So I felt really good about it. I was like, oh, I made six grand grand. 600 grand on a car that was like 400 to begin with. So. So the argument was, Well, I made 600 grand, drove a car for a year, and car was 400. That's amazing, you know, but that car is irreplaceable. So if I was back when I sold it, I was in the position I'm today where I'm rich enough to say, I don't care. I'm going to keep all these cars forever. It doesn't even matter. I'll keep buying five cars every single six months. Then I wouldn't have sold that car because that money had come every time I sold that car. Meaning the value is probably going to stay the same, no matter to mileage at a time, because of its rarity.
- [31:37]
B
So there's a famous quote, don't get high on your own supply. How do you not do that? When you get a cool car and you're 26 years old, how do you not go drive that Lamborghini?
- [31:46]
A
Well, you will, and that's okay. You can drive it. That's the whole argument is this is a progressive training program to begin with, so we're not completely disconnected from the fact that people aren't buying Lamborghinis to flip Them. And we're not telling people to flip them. Our program is designed for people to buy their car, enjoy their car for a whole year or two, and then get rid of the car. The argument is not that you're going to flip the car for a profit. The argument is in the beginning stages, it's a wealth preservation strategy, not a wealth creation strategy. So we want you to get high off of your car. I want you to network with it. I want you to meet more people. I want you to become a better marketer of your business because of it. I want you to make more money and want a better Lamborghini next time. So when you upgrade, you didn't lose all the money in your car and then go to next car. You just park that money. You drove your car, leveraged it. Now the extra effects of having that on your life probably made you a lot more money than the car cost you to begin with. But then you take that money and you move it to the next car. And the argument is that 200k you paid for that hurricane is still in the huracan. So when you go by the Aventador, well, you now have 200k of that money. That's not gone and like depreciated, you can buy a nicer car and you can drive that too. Like, the argument is not that you should not use your car, you should collect it. And it's the only way you make money. We all of our programs, specifically with every single exotic car, teach you exactly which cars you can drive how many miles. So it tells you, like, hey, if you have Lamborghini, you can drive at 2,000 miles, but if you have this Ferrari, you can probably drive it 5,000 miles. This Rolls Royce, you can drive at 7,000 miles. So like, it's almost like re understanding how leasing works, except without the loss in the payment. You know, leases are pretty expensive, so they're just a huge scam. But the whole idea is that it's the same ideology where you know exactly what your loss is and you also understand what mileage restrictions you could put on these cars. And you can choose, like, I have four different SUVs so I can switch between my cars and that way it never really adds up. Terrible miles. But I drive the out of all my cars. So I drive all my Bugatti's crazy three million dollar cars. And I don't care care like, but because I have 10, I can put mileage differently on each of them. And even if one loses, let's say I buy 3 million car and lose 50 grand because I overdid the mileage, my other 3 million dollar car will make me 200 grand. So it's like the offset of doing that. But as you get better in the game, and obviously as you get richer in life, generally you make better money decisions because you understand that concept.
- [34:07]
B
So you said something, and I want you to look at this camera over here, okay, and explain why are leases a huge scam?
- [34:13]
A
Okay, so leasing is a huge scam because you're buying the worst appreciating cycle of a car. What that means is when you go do a lease, they give you a down payment and they give you a monthly payment. And they tell you that monthly payment can be tax written off, so it makes sense for you to buy that car. The problem is if you do the math on the down payment and all the fees you paid by the time you own the car and the mileage you put on this will tell you that over the course of the three years, two years or 12 months you own the car, you, you lost, for example, on a Lamborghini anywhere from 20, 30, 40, 50 grand, depending on what kind of car you bought. So think about that. You drove the car with limited number of miles, 2,000, 3,000 miles, whatever, over the course of three years and you lost 50 grand no matter what. Now, at the time the actual car is bought back by Lamborghini, it's worth more. So you turning in the car makes the car worth more. Today because of the mileage being low. And on the used market, the car only depreciated 10% its first year, but your residual was like 30% less. So you gave up all this money and the manufacturer remixed the money. So basically they're guaranteeing volume out of cars by creating a bunch and they're putting them out in the market. And you're buying the worst depreciation cycle disguised as a tax write off and disguised as you don't really have any issue with any kind of like maintenance or repairs. So that's why you want to get a lease. Most cars today are made with Bosch parts. Very few Lamborghinis break down, very few Ferraris break down if they're driven properly. So while most people believe exotic cars constantly deteriorate, depreciate, breakdown, that isn't true. And most real owners will tell you they can drive plenty of exotic cars without ever having an issue. But lease companies have worked very hard to disguise this idea that a tax write off is better. And if you think about it, if you lose 50 grand in your write off and that means you lost 30 grand. Instead, it still means you lost 30 grand. I will teach you to drive the exact same Lamborghini and lose five grand. So the argument is, what's better? That you didn't write off the five grand you lost or that you lost 50, you wrote it off and it ultimately netted you 30 loss.
- [36:21]
B
So someone's out there, they've started making money, saving money, wealth preservation, they're doing all these things and they finally got a real chunk of capital now and they want to go into real estate. What are your thoughts about real estate? What, what parts of it do you teach?
- [36:33]
A
So we teach real estate in a very different manner. Like we don't really teach real estate investing. There's people that are probably better at that than I do. I don't really look at it from a sense of like, which houses do you buy, create income or anything else? Because I'll tell you this, in the game of watches and cars, we make so much money off of so such little capital and no leverage needed, no bank loans needed, no bank ties, no need to take out a $10 million loan to get out of that $20,000 a month in hopes of blah, blah, blah. So we don't really think that's a viable strategy in wealth creation. And we think that it was a viable strategy 10 years ago because these other alternative markets didn't exist as much. Where I think there's a huge opportunity for people to play in real estate no matter what. Like, I'm a big proponent for owning your own home, owning your own office, like buying commercial and residential real estate as long as it has utility. Which means that there's a lot of opportunities in buying commercial real estate where you can build really good business out of it instead of just renting it out and leasing it out to someone else. I think taking on so much leverage to create such little income with so much problem in between if something happens is just too high of a risk when you have other alternative ways of making money. So what we teach is how to select homes or commercial buildings in areas that are likely to have accelerated appreciation based on changes of demographic over the Next, let's say 6 or 12 or 24 months, and therefore putting you in a position where you can buy a building and ultimately let it keep going up in value, use it for your business, and then choose to get out of it. Like, I'll give you an example of my own unit. I bought myself like 18,000 square feet, like location in the Middle of Boca Raton. And Boca Raton is a very hard to find find hard place to find good locations for like car storage and things like that. So I wanted a place to house my 35 car collection and I was like, this is impossible to find here. So it literally took me a year. But I, when I found the building for $5 million, I immediately bought it. I renovated for 500 grand and I'm using it as my office. I have gotten like probably about 15 to 20 offers to sell that building for 7 to $10 million within three weeks of moving in all the way to today. Because these type of buildings don't exist. Meaning there's very hard to come by. So it's almost the same thing with my personal house. So like I bought this 10,000 sq ft house with a 10 car garage and no one has that anywhere. And it's brand new and it's like this crazy design building. So when you buy stuff that's really exclusive, hard to get and unique in nature, they typically target a very unique buyer. So it's not as generally for everybody because it doesn't fit within like what the evaluation or the appraisals of a building are. But if someone has a 35 car collection or a 20 car collection and they have nowhere to put it, they're not so much looking at what will the bank appraise this building at. They're like, if I don't buy this building, I don't have a building. So that's what we teach people, how to get ahead of that.
- [39:28]
B
All right, so we talked about the make money side, the investing money side. Let's talk about the giveaway money side on charity. Why do you think it's important for people to have some type of charity component to their life or for their family?
- [39:39]
A
So I think there's a couple of things there. So I'm not a personally. Actually this is a good discussion because I'm not a huge charity guy either. And I'll tell you a little bit about why. I'm a big believer that you directly impact your community in the ways you can do your best. And a lot of times people try to change that by donating money instead of actually participating. And I think there's a lot of participation that can be done in every community globally, where participation, in my opinion, holds more weight than donation. So I think donation is a good form when you can lack participation, you don't have time to and you want to support a cause. But generally speaking, I'm a big proponent for Participation over donation.
- [40:20]
B
I like it. So where can people find you across social media? Where can they find the different things you've been talking about today?
- [40:26]
A
The easiest way to get more information if you want to just learn how to park assets instead of spending is to go to learn from pj.com super easy place where all my books and courses are available for anyone that wants to learn. We've been teaching since 2007. Most of our platform, yeah, quite a long time. Most of my platforms have been around since then. A new few new ones come in. We'll teach you everything from cars, watches, art, even travel, how to lower your cost with points correctly. But everything's that learned from pj.com very cool.
- [40:56]
B
Alright guys, this is a fascinating episode. Not our typical episode of asking certain questions because the luxury assets that he's been talking about we've just had in our minds for so many years that it's automatically a liability. And he's explaining and he's teaching about how to make it into an actual investment and wealth preservation. The whole point of the Money Mondays is you have to have discussion with your friends, family and followers about money. We all grew up thinking it's rude to talk about money. I think that's ridiculous. We have to be able to have blunt discussions the way he was just explaining how much does this cost? How much did I invest in this? How much did I waste on this? How much did I spend on this? How much did I make on this? And it's blunt and straightforward so we can learn for ourselves so we don't get screwed on things. So we might be able to buy things better. We might realize, hey, maybe we shouldn't lease a car. Because what he explained you have to have a discussion with your friends, family and followers about money. Thank you guys for liking commenting and subscribing. We'll see you guys next Monday on TheMoneyMondays.com.