Investing in Luxury Watches with Zac Castillo

Summary

Wake Up to Wealth Podcast: Investing in Luxury Watches with Zach Castillo

Episode Release Date: July 19, 2024

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Introduction

In this compelling episode of the Wake Up to Wealth Podcast, host Brandon Brittingham welcomes esteemed guest Zach Castillo, a renowned expert in luxury watch investments. Together, they delve into the intricate world of luxury timepieces, exploring how these exquisite watches can serve as both personal assets and lucrative investments.

Exploring Luxury Watches as Investments

Zach Castillo introduces the concept of luxury watches not just as symbols of status but as viable investment vehicles. He emphasizes that while watches like Rolex may not yield astronomical profits, they offer stability—“you won't make a lot of money with these, but your money won't... you won't lose any either” (00:25). This balance makes them an attractive option for wealth preservation.

The Investment Potential of Rolex Watches

A significant portion of the discussion centers around Rolex models, particularly the Daytona series. Zach highlights specific models that have demonstrated substantial appreciation:

• Stainless Steel Panda Daytona: “They are so hard to get from Rolex... a stainless steel panda, goes for $15K at the AD, flips for $30K as soon as you walk out the door” (02:20).

• Platinum Daytona: “The platinum Daytona goes for about $70K and it'll run about $120K” (02:20).

These figures underscore the potential for significant returns, especially for sought-after variants.

Demand and Supply: The Rolex Advantage

The scarcity of Rolex watches, particularly from authorized dealers (ADs), fuels their investment appeal. Zach explains that the limited availability leads to a robust gray market where prices can soar:

• “Roles can't walk in and buy when you can't. Yeah, right. So that creates kind of the gray market, which is where you play in a lot” (05:09).

This tight supply chain ensures that certain models maintain or even increase in value over time.

Authenticity Matters: Importance of Box and Papers

Ensuring the authenticity of a luxury watch is paramount. Zach advises buyers to prioritize acquiring watches with original boxes and papers:

• “Box and papers is important. If you're getting charged for it, I mean, it's not a huge deal” (06:10).

He cautions that while some sellers might offer watches without authentic documentation at lower prices, having these documents significantly enhances the watch's resale value and reduces the risk of purchasing fakes.

Personal Experiences and Success Stories

Zach shares his own investment journey, highlighting notable successes that reinforce the value of strategic purchasing:

• John Mayer Rolex: Bought for $8,900 and sold for approximately $23,000 after its discontinuation (09:04).

• White Gold Pepsi Rolex with Meteorite Face: Purchased for $48,000 during COVID and sold for $110,000 at its peak (11:16).

These anecdotes illustrate the unpredictable yet rewarding nature of luxury watch investments.

Top Recommendations for Novice Investors

For listeners new to the luxury watch market, Zach recommends starting with Rolex due to its established reputation and consistent demand:

• Submariner: “Submariner. Yep. You can find, you know, an entry-level, some that even more solid than this model, like a 2005, 2008 model for about $8,500” (12:29).

He also suggests exploring models like the Datejust for those seeking reliable investment pieces within the $10,000 to $15,000 range.

Advanced Investment Strategies

For investors with larger budgets, Zach discusses higher-end models that offer substantial appreciation potential:

• Presidential Date Dial Rolex: Approximately $50,000 to $55,000, often selling above MSRP (13:05).

• Stainless Steel Daytona with Black Dial: A deluxe model that remains a staple among collectors (07:58).

These models require a more significant investment but can yield impressive returns, especially if they become discontinued or highly sought after.

The Gray Market and Strategic Buying

Navigating the gray market is essential for maximizing returns. Zach advises securing rare pieces through reputable sources and staying informed about upcoming model discontinuations:

• “If you can get a rare one from an AD... That's the play” (14:46).

He highlights the importance of timing and market awareness to capitalize on price surges triggered by limited availability.

Social Status and Network Effects

Beyond financial gains, luxury watches serve as conversation starters and status symbols:

• Recognition and Influence: “If someone knows it, they're usually somebody of influence and have wealth” (16:05).

Wearing a distinguished watch can enhance one's personal and professional networks, indirectly contributing to wealth-building opportunities.

Conclusion and Key Takeaways

Zach Castillo encapsulates the essence of investing in luxury watches as a blend of personal passion and financial strategy. By carefully selecting sought-after models, ensuring authenticity, and leveraging market dynamics, investors can enjoy both the intrinsic beauty of these timepieces and their appreciating value.

Notable Quotes:

• “You won't make a lot of money with these, but your money won't... you won't lose any either” — Zach Castillo (00:25)
• “I'm not the cheapest, but I'm the best. You know, I back my stuff 100%” — Zach Castillo (05:58)
• “Freedom. I mean, doing this is fun to me” — Zach Castillo (18:11)

Final Thoughts

This episode offers invaluable insights for anyone interested in diversifying their investment portfolio with luxury watches. Zach Castillo's expertise provides a roadmap for both novice and seasoned investors to navigate the complexities of the watch market successfully.

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Connect with Zach Castillo:

• Instagram & Facebook: WatchAddicto LLC
• Website: watchaddicto.llc.com

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Ready to transform your financial future? Subscribe to the Wake Up to Wealth Podcast and join Brandon Brittingham each week for more strategies and success stories to help you achieve financial independence.

Transcript

[Brandon Brittingham]

This is Wake up to Wealth, a podcast dedicated to helping you change the way you think about wealth. And now, here's your host, Brandon Brittingham.

[Zach]

Can you consistently buy, say, a Rolex and it's going to hold its value or appreciate from an investment standpoint?

[Zach Castillo]

You won't make a lot of money with these, but your money won't. You won't lose any either. I'm not the cheapest, but I'm the best. You know, I back my stuff 100% that choose the first question. What can I buy that'll go up in value?

[Zach]

Hey, what's up, everybody? We are back again. Another episode of Wake up to Wealth. I got my main man Zach here today, and we're going to talk about something that I'm super excited about. It's the market of luxury watches. Thanks for being here, brother.

[Zach Castillo]

Yes, sir. I appreciate the invite.

[Zach]

So what's kind of crazy is a lot of people don't look at luxury watches as an investment, and a lot of people aren't educated on that subject. But, man, I've done really well, and I didn't get into it to buy it as an investment. I just, you know, always wanted a Rolex. But I've bought, you know, Rolexes and made a ton of money on them, and it's actually a great storage of wealth and it's a great place to invest money. Like, tell give us for someone who's a novice, they don't know anything. Like, why is that true? Why is that the case?

[Zach Castillo]

I mean, first of all, they're so hard to get from Rolex. I mean, if you really want to walk in today and buy one, they'd want you to spend $10,000 in a whole nother direction just to get the watch that you want. They may only be $10,000. So that's where the demand comes in. You leave there, you start looking online, you find a guy like me that can get it for possibly the same price without buying that jewelry or whatever it was, and you can get it in your hand, and that's where the demand stays so solid on the investment side of it.

[Unknown]

Yeah.

[Zach]

So, you know, just like, you've seen it and I've seen it, like, you don't always know, but some watches, I mean, I've seen watching double in price. Right. And like, what. And just for. For some of those out there, like, what models of Rolex specifically do you kind of see? Just, you know, always hold their value or even appreciate at a crazy, crazy rate?

[Zach Castillo]

First, at the top of the Daytona.

[Unknown]

Yeah.

[Zach Castillo]

You know, you got this stainless steel panda, goes for 15k at the AD, flips for 30,000 as soon as you walk out the door. The platinum Daytona goes for about 70,000 and it'll run about 120,000. So those are the ones that really the big collectors are building up to grab to either collect or flip, make that money on.

[Unknown]

Yeah.

[Zach]

So true or false, a lot of ones that I see appreciate, hold their value or appreciate are a lot of the stainless steel models.

[Zach Castillo]

Yes, yes, definitely. I think it's mainly because they're affordable.

[Unknown]

Yeah.

[Zach Castillo]

And makes less of less of them. And even when the market's down in a slump.

[Unknown]

Yeah.

[Zach Castillo]

People still buy. So they choose to buy something say 20,000 or less and not so expensive, where they're taking a big gamble because they still want to buy.

[Unknown]

Yeah.

[Zach Castillo]

But they know the market's down. So it's kind of like those always roll.

[Unknown]

Yeah.

[Zach]

And then you've got on, you've got a. What do you got on today?

[Zach Castillo]

This is a 40 millimeter sub.

[Zach]

So I mean, that usually always goes up in values or stays.

[Zach Castillo]

It's solid. You won't make a lot of money with these, but your money won't. You won't lose any either. So this is, this is a great first, you know, entry level piece.

[Unknown]

Yeah, yeah, yeah.

[Zach Castillo]

Spend about 10, 12,000, but you won't lose hardly a dime on it.

[Zach]

So it's just, you could wear it for a couple of years, you take good care of it and then you go to sell. You're probably going to get the same amount of money that you pay for.

[Zach Castillo]

Same amount, maybe a little more. But you're not, definitely not going to lose.

[Zach]

Right?

[Zach Castillo]

Yeah.

[Unknown]

Yeah.

[Zach]

So we got another one here. It's a stainless steel. Which one is this?

[Zach Castillo]

That's actually white gold. That's the date of Presidential.

[Unknown]

Yeah.

[Zach Castillo]

So that one was discontinued in 2018, I think. So there's a separate market for those that are discontinued. It takes a real collector, though, to buy one that's white gold because you really, you can't tell that it's white gold. Like you said, it looks stainless.

[Zach]

Looks stainless. When I grabbed it, I realized it was.

[Zach Castillo]

Yeah. So stainless. You're looking about 15 grand. That watch, that one goes for about 40 to 45. So somebody that's going to spend 45,000, they want it to really shine. Like it's actually, you know, they can tell it's a precious metal.

[Unknown]

Yeah.

[Zach]

So in your opinion, I mean, there's other watch brands out there, you know, A.P. patek is one. You know, for somebody that's listening, what brand seems to hold their value the most and essentially appreciate.

[Zach Castillo]

I put all my money in Rolex.

[Unknown]

Yeah, yeah.

[Zach Castillo]

I think it's most solid. People wake up daily, want Rolex. By the time you get into Patek and stuff like that takes, a guy's been in it for a long time, he's really going to do his homework. The Rolex can get in and out of quick if you need it to.

[Zach]

Yes.

[Zach Castillo]

Especially if you're a first time buyer. You don't want to buy something you don't know you're going to love, you know, invest a whole lot of money in. So yeah, I'd always say start with Rolex.

[Unknown]

Yeah.

[Zach]

And so, you know, kind of one of the things I think that we all know is Rolex kind of keeps a tight supply chain. To your point, you just can't. People think you can walk to a Rolex store and buy when you can't. Yeah, right. So that creates kind of the gray market, which is where you play in a lot. Right, right, right. So but the other side is, you know, not just from the investment side. You got to buy from people that are reputable that like know their stuff.

[Zach Castillo]

Exactly. So there's so many corners that can be cut on a bezel, a link, paperwork, a fake box or anything. So that's, that's where that comes in. I always tell people I'm not the cheapest, but I'm the best. You know, I back my stuff 100%. That's a, that's a big issue in the jewelry watch game is the cutting corners on this and that.

[Zach]

And you just mentioned another thing for, you know, if you're, you know, if you're out there and you're new and you don't know anything about this, it's super important that you get the box papers. All that talk about that for a second.

[Zach Castillo]

Yeah, box and papers is important. If you're getting charged for it, I mean, it's not a huge deal. They all cost, you know, the boxes worth three or four hundred itself, the papers. Not all watches without papers are fake. Some of them, you know, some owners will, like we said, they play the ad game where they buy and flip. They'll keep the card so that their name ain't floating around.

[Zach]

Right.

[Zach Castillo]

And so if you're a first time buyer, I'd always recommend go ahead and get the full set box papers to get the full effect. But if you're buying without boxing papers, you would definitely get a Cheaper price that way.

[Unknown]

Yeah.

[Zach Castillo]

So buy accordingly.

[Zach]

So in your opinion, can you, can you consistently buy say a Rolex and it's going to hold its value or appreciate, I mean from, from an investment standpoint?

[Zach Castillo]

Certain ones, yes. Yeah, that's what I do. I kind of say you call me tomorrow and you're new to the game, want to know what to buy, what to spend, I, I break it down for you. If you have, you know, a ten thousand dollar price range, I'll show you what's safe, what's not.

[Unknown]

Yeah.

[Zach Castillo]

Or, and you say hey, but I really like this and I'll just tell you, hey, you know, you might lose a couple G's wearing this one. Right. Or you know, you might, it might bounce a little bit and there's some that just won't bounce. Like these subs. Yeah, they don't go down, but it's, it's there when I need it, you know.

[Zach]

Yeah, yeah. So what do you think? In the ten to fifteen thousand dollar range, what's the safest watch to buy?

[Zach Castillo]

So, good question. You're either a Submariner guy or a datejust guy.

[Unknown]

Yeah.

[Zach Castillo]

So there's, there's like the Wimbledon, that goes for about 14,000.

[Unknown]

Yep.

[Zach Castillo]

Full stainless steel, real nice watch. I like that one. That's about top tier datejust.

[Unknown]

Yeah.

[Zach Castillo]

And then the Submariner like this stainless steel, black dial. Yeah, yeah.

[Zach]

And then if you were, say you step up a little bit and you go the 20 to 30,000 range, what do you think?

[Zach Castillo]

Daytona, Daytona, black dial, stainless steel. Even though it's about 10 grand over sticker, I think it's gonna stay there, if not go up for a while. Daytona's always, they're known to stay solid.

[Zach]

I mean, is it even possible to get a Daytona from an ad?

[Zach Castillo]

No. I mean not walking in.

[Zach]

Right.

[Zach Castillo]

I've heard people do it just. And it's more of a principal thing. I think with stuff like that. You might have an ad over here that a guy's been begging for for years. That's like begging in the wrong manner. And you have another guy that's never been in the Rolex store and this ad's like, you know what, I'd rather just sell to this guy. And this guy's been hounding me, he ain't buy no jewelry. So I've heard of people walk in and buying them, lending them.

[Unknown]

Yeah.

[Zach Castillo]

I had a client last week in San Antonio. He's bought one datejust for like ten grand. Second one was a panda.

[Unknown]

Yeah, yeah, yeah.

[Zach Castillo]

You just never know Man.

[Unknown]

Yeah.

[Zach Castillo]

You never know what their supply looks like either. It's hard to. It's hard to gauge.

[Zach]

The other thing too is you never know. I mean, I always tell people, like, buy the watch that you want and that would usually hold its value. But also, you never know. So I had the Bat, you know, I bought the Batman when it first came out.

[Zach Castillo]

Yes.

[Zach]

I had it for eight years. And when I sold it, I sold it for, you know, probably at the height, I sold it for 23,000 and I paid 8,900 for it. Yeah, right. I mean, that's just insane. And I had it for seven years.

[Zach Castillo]

Well, for seven years.

[Unknown]

Yeah.

[Zach]

So, I mean, that's some. To your point. Sometimes when things get discontinued or it becomes a hot watch or whatever, I mean, the. The value just goes. Just goes insane.

[Zach Castillo]

Yeah, you never know, man. People that choose the first question, what can I buy that'll go up in value? I can't really answer that. And then like right now, in two days, we have the new models dropping. Certain models will be discontinued. So it could be one of these sitting right here in front of you that's going to go through the roof. You never know. Yeah, some people like the Bluesy, for instance. That one's been out so long and there's. There's kind of some rumors going around it being discontinued, so it's kind of keeping it solid. The Pepsi right now is supposed to be discontinued. That was going up daily.

[Unknown]

Yeah.

[Zach Castillo]

So. And it could not go that way. You never know.

[Zach]

Yeah, 100%.

[Zach Castillo]

Yes, sir.

[Zach]

Yeah, absolutely.

[Zach Castillo]

It's a fun game to play, though.

[Zach]

What. What's your grail watch? What's the one you really want?

[Zach Castillo]

Man, I like the. I've had four or five watches in play at a time. This is old faithful course, so I hold this one tight. But I'd walk in, if I could walk in the ad and buy the black stainless steel Daytona, that would be the one I'd take. I mean, I like flashy stuff, but I'm pretty simple, you know, I wear a small chain stainless watch so it wouldn't be too much.

[Zach]

What is that you've had in your possession before? What's the one that is appreciated the most that you've actually had, whether you owned it to sell it or you owned it yourself?

[Zach Castillo]

Probably the John Mayer. Yeah, that one. And it bounced quick and it came back down. So that one was like right now where we're at, that was. Everybody knew it was going to be discontinued. So as soon as it did, it went from 70 to about 100 grand.

[Unknown]

Yeah.

[Zach Castillo]

And it lasted for about a month, then it went right back down. So that's about 30, 30 to 30 thousand dollar pop right there.

[Zach]

Right? That is appreciated. Yeah, that appreciated that.

[Zach Castillo]

But you have some that I haven't had in possession that I've sold that some people made know. Lucu Simon.

[Unknown]

Yeah.

[Zach]

I had a, a white gold Pepsi and it had the, I don't know what you call it, but it had kind of like the marble face Meteorite. Meteorite. And in Covid I paid 48,000 for it. I sold it for 110.

[Zach Castillo]

Yeah.

[Zach]

At the height.

[Zach Castillo]

Yeah. So yeah, I forgot about that. So that's probably the biggest watch. Yeah. That one went up and down 50 grand.

[Unknown]

Yeah.

[Zach]

Yep. And I also had a, I had the, the Daytona that was all rose gold. That had the, the sunburst rose gold face that they discontinued.

[Zach Castillo]

Right.

[Zach]

And that one went up a lot.

[Unknown]

Yeah, yeah.

[Zach Castillo]

The meteorite, man, those are real special. They all the Daytonas are discontinued. That had meteorite.

[Unknown]

Yeah.

[Zach Castillo]

And they're said to do it to the rest of the watches. And man, some of those meteorite daytonas go for 85, 90 grand when they're only 40 at the store, you know.

[Unknown]

Yeah.

[Zach Castillo]

That meteorite is something special.

[Zach]

So someone who's listening to this, they've never earned a Rolex before. Oh, I'm. My assumption is if you're going to tell somebody to buy. If you're looking at the investment side, you're going to tell them to buy Rolex, right?

[Zach Castillo]

Oh, yeah, yeah, definitely.

[Zach]

And they've never owned one before and they're just starting out. Which one do you think? You know, what's, what's the one you can't go wrong with?

[Zach Castillo]

Submariner. Yep. You can find, you know, an entry level, some that even more solid than this model, like a 2005, 2008 model for about 8,500 and man, it's hard to even go anything less than that if you ever try to sell it.

[Zach]

Yeah, yeah. Now someone, let's just say has a bigger budget and they want to buy. You know, we call it the investment piece.

[Zach Castillo]

Right, right.

[Zach]

What's the investment piece to go after?

[Zach Castillo]

So there's, there's tons. You go to AP Patek. Right. Now if you were to pick a.

[Zach]

Rolex one, what would you think?

[Zach Castillo]

Rolex, I like the olive. Olive dial rose gold day date. Yeah. I think you had the chocolate.

[Zach]

That's the presidential, right?

[Zach Castillo]

Yeah, presidential. That one's pretty solid. It's, it's about 10, 15 over MSRP. But that's, that's in the 50, 55, 000 range. I think that's about the next step. The problem is when you get like twenty thousand dollar watches, people they don't shine enough for, you know, like the Daytonas and all that. They don't shine enough to, to do them justice to spend that much. So it's either low 20,000 or under or real high, high end watches. The middle ones are kind of struggle. So you can, you can find good deals in that area.

[Zach]

Got it.

[Zach Castillo]

Yeah.

[Unknown]

Yeah.

[Zach]

Awesome, man. So you know what if someone wanted to. Not just the love of watches of. And watches, but do you think there's a play that could be had where you could actually consistently invest in them as like an investment, as in multiple.

[Zach Castillo]

Watches or one watch? Yeah, yeah, yeah, definitely. You could come up with a lot. There's so many watches out there moving, man. And there's. It's said to be like 85, 90 of the watches are in dealer's hands.

[Unknown]

Yeah.

[Zach Castillo]

So it's like there's the guy. How these watches get here, there's higher up still. You never even hear of. See. And they supply these lower guys in the middle than the lower guys like me.

[Unknown]

Yeah.

[Zach Castillo]

And that's what keeps the whole thing running. So if you could, you know, kind of do something in the middle somewhere. There's definitely, there's definitely there.

[Zach]

Yeah. So the name of the game is if you can get, if you can get a, a rare one from an ad which is an authorized dealer. That's the play.

[Zach Castillo]

Yes.

[Zach]

If you somehow get lucky and get one that is going to be discontinued. Right. But you sometimes we don't always know that. You can hear rumors of it. That's the other play. And then I just think what I've seen over time is the stainless steel ones just never go down. And a lot of times they go up. Then if you get super lucky and you get a stainless steel, they discontinue. You're probably in real good shape.

[Zach Castillo]

Very lucky. Yes. And a lot of people came into the watch game during COVID Yeah.

[Zach]

When you couldn't get one.

[Zach Castillo]

No. And it was climbing daily. So everybody automatically thought like man, I need to get in. And they did. A lot of people got in.

[Unknown]

Yeah.

[Zach Castillo]

But now that's the conversation now like, hey, what's going to be going up? And that's not the case unless something major like that comes about.

[Zach]

Again, I'll tell you another thing to look at this from a different standpoint. A Nice Rolex, a nice ap, or even a Paddock. You know, also for me, it's been an investment from a standpoint, is. It's always been a conversation starter.

[Zach Castillo]

Yes.

[Zach]

And a lot of times, someone who recognizes, like, this one, the one that you got me, you know, you gotta know what this is.

[Zach Castillo]

Yeah, right. Yeah.

[Zach]

And for instance, a paddock as an example, or an ap, if you have one of those on, someone knows it. They're usually somebody of influence and have wealth.

[Zach Castillo]

Exactly. And you're being judged by, you know, people 24 7. So they might see this watch, and they give me a certain level, you know, especially if it's a Patek guy or something. He sees that watch, he gives you a certain level, you know, and that's the same thing. If he sees you with that Patek, he's like, whoa. You know, he gives you that much because, you know, you said it. I remember when I brought that watch here last time, we sat right over there, and he was like, man, you saw that Patek I had? And you were like, that's a billionaire's watch.

[Unknown]

Yeah.

[Zach Castillo]

You looked at me dead serious. I still remember that. But, yeah, it is, man. It's up there. And you. Those guys with those watches, you never even know it. Right. You know what I mean? When they come to do stuff like this, they'll have this on or this on, and they just. They're in the safe. They're out there.

[Zach]

Yeah, it's. It's amazing. I love watches. And what's been cool is, you know, this one I know will always hold its value. I didn't buy this one for the investment side. I bought it because I always wanted it.

[Zach Castillo]

Right.

[Zach]

But it was paid for by a bunch of watches that I bought that were investments that appreciated. I think that's the brilliance of it.

[Zach Castillo]

Right. And, you know, like, with you buying your bus down full of diamonds, you know, that that's. That's not the best investment. It cost you a little bit to wear that. Yeah. The investments in some of these smaller ones. And you covered your base with that to buy that other shiny stuff, you know?

[Unknown]

Absolutely.

[Zach Castillo]

So that's the deal. You got to know what. You know, what the end play is. What are you trying to get to. Because you can start with $1,000 watch and work up to the $50,000 watches, whatever you want to do.

[Zach]

So someone's listening to this, and they want to get into the watch game, or they want to buy their first Rolex or whatever. How do they get in touch with you?

[Zach Castillo]

Look me up on Instagram, Facebook. What's your answer there? Watch Addicto under Slash llc. Facebook, Zach Castillo and I have a website also. Watch addicto.llc.com you check me out there.

[Zach]

So I ask everybody this when we end the show. We call this show Waking up to Wealth. So it can be whatever version it is for you. But what does what Waking up to wealth mean to you?

[Zach Castillo]

Freedom. I mean, doing this is fun to me. I've. I've so tired for 23 years, man. This feels like six days a week.

[Unknown]

Yeah.

[Zach Castillo]

And I still put in a lot of hours doing this, but it's fun. They like it. So freedom. You know, I got three kids, beautiful wife at home, so freedom. Time. Time is very valuable now. But that's pretty much it, man. Just doing this daily, having fun. It's like I never work. Absolutely. Yes, sir.

[Zach]

Well, brother, I appreciate you for coming here, educating us on the watch. I appreciate you spending time with us today.

[Zach Castillo]

No problem. I appreciate you having me. Thank you.

[Brandon Brittingham]

Thanks so much for tuning into this episode of Wake up to Wealth. We sure do appreciate it. If you haven't done so already, make sure you're subscribed to the show wherever you consume podcasts. This way you'll get updates as new episodes become available. And if you feel so inclined, please leave us a review on Apple Podcast and tell your friends about the show. It is how new people find us. Until next time.