by | 30, Nov 2021

6 Problems We Solve For Investors

Anthony Vicino and Dan Krueger

For today’s episode, we are going to dive into six problems that Invictus Capital solves for investors.

If you are a passive investor and you have a problem. My guess is it will revolve around one of these six things that we will go over in this episode.

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[00:01 – 08:03] Bad Investing Advice: A Good Investment Is Always Going to Have High Return And Low Risk

[08:04 – 10:10] Problem #1: Returns

[10:11 – 13:40] Problem #2: Mitigating Risk

[13:41 – 16:48} Problem #3: Taxes

[16:49 – 20:39} Problem #4: Diversification

[20:40 – 23:36} Problem #5: Time

[23:37 – 29:38} Problem #6: Windfall

[29:39 – 36:16] Closing With Book Recommendation

Bad Blood: Secrets and Lies in a Silicon Valley Startup The Road Less Stupid

Real estate is like a big ocean tanker, whereas the stock market’s much more like a nimble speedboat out there on the waves.

Anthony Vicino

I mean, at the end of the day, what’s money but if not a tool. A tool for ideally buying back your time and living life on your terms.

Anthony Vicino

If people are invested in things that don’t have any kind of cash flow or any kind of income stream, that’s the problem, right? You’re betting entirely on the appreciation of the asset and you don’t get paid to wait.

Dan Krueger

You’re investing in something that is a basic human need and that is very unlikely to go out of style in the next couple of years.

Dan Krueger

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Anthony Vicino and Dan Krueger
Passive Investing Made Simple – Available NOW!

6 Problems We Solve For Investors

Anthony Vicino: [00:00:15] Hello and welcome to multifamily investing made simple, the podcast, it’s all about taking the complexity out of real estate investing so that you can take action today. I’m your host, Anthony Vecino, joined as always, by Dan. Insert nickname here, Kruger.

Dan Krueger: [00:00:32] We’re struggling today, it’s been a long 24 hours, this is being recorded the Friday after Thanksgiving, but stuffed. What is it? Tryptophan? Is that what’s in Turkey that makes you tired?

Anthony Vicino: [00:00:43] Oh yeah, yeah. Yeah, I mean, I didn’t have actually. I had a whole turkey leg yesterday, but I think what’s making me really tired is that we went to my family, go to the Golden Corral because we’re classy people. I don’t need a reason for going to Golden Corral. We do, though. So I’m still in recovery mode. I don’t know about you.

Dan Krueger: [00:01:01] Yes, I am in recovery.

Anthony Vicino: [00:01:02] There is literally nothing at Golden Corral my body can digest within a week. I can’t like it. I have a pretty good body.

Dan Krueger: [00:01:08] I can’t say I’ve ever been. But yeah, I can’t imagine that that’s going to go smoothly.

Anthony Vicino: [00:01:14] Buffets, you get what you pay for. Twelve dollars for all you can eat. Here we are. Anyway, so Dan, I think this is going to be a pretty interesting episode today as we talk about six problems that we solve for investors. If you are an active investor who is looking to raise capital from private investors, then you probably also can solve these six problems for your investors if you are a passive investor and you have a problem. My guess is it will revolve around one of these six things and. If not, well, let us know, let us know because we’re trying to compile a list of what are all the problems that investors have.

Dan Krueger: [00:01:54] You only got six, so

Anthony Vicino: [00:01:56] Yeah, we could even make it to seven like sevens a way better title, right? But No. Six Anyways, before we get to that, Dan, as always. Go slinging that bad advice.

Dan Krueger: [00:02:06] Hmm. All righty. I got your bad advice for the week is a good investment is always going to have high returns and low risk.

Anthony Vicino: [00:02:20] Something good. I’m just writing this down, I’m making no. You should write that day returns low risk equals bad investment equals

Dan Krueger: [00:02:27] Amazing,

Anthony Vicino: [00:02:29] Amazing investment and that’s bad

Dan Krueger: [00:02:30] Advice.

Anthony Vicino: [00:02:31] So why is that bad? I feel like if I was getting a high return in low risk, that would be pretty cool.

Dan Krueger: [00:02:35] Yeah, I mean, it sounds pretty good, except if you give that advice to somebody, it doesn’t really add any value to some really help them a because high returns. Well, that’s kind of relative. Like, what is that? It kind of depends on what the person is looking for. And b, the most important part of the part I want to actually dive into is how do you even quantify the risk on a deal? And we’ve talked about this a lot on the podcast. And so you’ve heard us talk about this. But if I tell somebody to look for something that’s got high returns and low risk, they’re not going to know what to look for in a deal unless they listen to our content, in which case they probably do. But look, let’s

Anthony Vicino: [00:03:08] Look at you. Plugin the podcast on the podcast.

Dan Krueger: [00:03:11] We’re going to link to a few episodes below. But yeah, I mean, the risk thing is is really almost impossible to quantify with a number. And so that advice of finding something that’s low risk, high return doesn’t really do people very, very much good. And you know, the high return thing is kind of relative. For some people, it might be 15 20 percent a year. You know, if you’re 80 years old, heck, eight percent might be a high return, right? So it’s all kind of relative, but specifically on the risk piece. Just saying that you want a low-risk deal is not really going to get you very far. You need to uncover what makes a low-risk deal, a low-risk deal. And specifically, you want to be looking at the underwriting assumptions in the deals that you’re looking at. You’re going to look at the assumptions that are made in that proforma on the cap rate, on the rent growth, and just the business plan in general and figure out if those seem reasonable, if those assumptions are realistic and achievable, and if the assumptions have been stress tested, that would probably qualify as low risk as long as those things seem like they’re likely and realistic. So I guess that’s kind of the qualifying thing is the advice they give is actually good advice as long as you know how to identify what makes it a low-risk deal over a low-risk deal.

Anthony Vicino: [00:04:22] Yeah, the risk is such a loaded word. Context matters a lot, and there’s a lot of different variables that you can take into play. And the way that I define it is maybe going to be slightly different than the way you define it should be. And so it’s all relative to the individual. And so low risk is a meaningless statements in the same with high risk or I’m sorry, high returns. The thing that we’re talking about the other day was people asking, Oh, we’re at the top of the market and prices are way overvalued or really their all-time highs, right? And my question is always high relative to what? Right? Relative to median income relative to the cost of living relative to the cost of buying a house. Maybe, maybe not. Maybe not so high. Right. And so high is always relative. So as low and risk is God the most ephemeral of terms. But it will say that when it comes to risk specifically within real estate, I think about three different types of macro-level risk. So you have operational, you have a market and you have deal level risks. Operational is mitigated by having great operators. Market risk is mitigated by being in a great market and deal risk is mitigated by having conservative underwriting. So just from the boom, there you go. Use that as you look at risk and how you try to quantify it because good luck there is no. No. So yeah, exactly.

Dan Krueger: [00:05:38] You got to figure out what your risk tolerance is for yourself.

Anthony Vicino: [00:05:42] Here’s something else that I want to talk about really quickly. On this topic, I was working with a coaching client the other day who had at the beginning of his career, been buying up a bunch of single families, duplexes, and things like that. And one of the interesting things that we got on the topic of is the fact that one, it’s not the greatest use of your time and it’s not very efficient. And the multifamily evaluations like there’s so many reasons just to go into bigger properties, but one of the things that came up in that was he was playing a game where there was mitigated risk, but very capped upside. I was like, What’s the point of playing a game where there’s like a very little risk, but also no upside, right? Like you seem like a waste of time. It seems like exactly. It’s like, well, the risk is that you’re wasting your time. Right? So it’s like Nassim Taleb talks about the barbell strategy or asymmetric returns where you’re looking for capped risk with infinite upside, right? And the reverse of that is usually the type of investing most people do, which is they have capped upside and unlimited risk. This was I’m not going to say he had unlimited risk. You definitely had risk, but it was really capped risk and capped upside and was like, What’s the point? You’re pretty much buying a bond at that point and better just, I don’t know, put your money in a blender.

Dan Krueger: [00:06:59] Yeah, it’s just not an efficient use of time or capital. I don’t know anything about the situation. But just that simple paradigm of limited upside and limited downside. It just seems like you might as well just go on vacation and not waste your time and money on whatever this thing.

Anthony Vicino: [00:07:13] Yep, it’s in. That’s something that we were talking about a little bit earlier is always evaluating what’s the highest and best use of your time? More of this resource. I think Tony Robbins says something that is pretty smart, which is you don’t lack resources, you lack resourcefulness, and if you’re using your resources poorly, then you have nobody to blame yourself. So. All right. So let’s get into the meat and potatoes or the turkey and gravy of today’s episode, which are six problems we solve for investors. And again, this isn’t just unique to us at Invictus. This is anybody that’s an active investor out there who works with private investors, or if you’re an LP, you might resonate with some of these. Some of these problems, some of the things that investors when they come to us and say, Hey, why are you here? What do you want? What are you looking for? These are the things that they say. So listen closely, because this might be you.

Dan Krueger: [00:08:04] Oh, no one. In no particular order might, I add. Usually, we have some sort of ascending or descending order here. This is just the order in which we came up with them. But one of the problems that we have and what we’re really looking at for our list is we’ve looked at what our investors have been talking to us about. So the people who have come through through our funnel for lack of a better word, and we’ve got a, you know, fairly niche down focus to who we work with. So this is probably going to vary across the board. But for the guys that come in guys and gals that come through our funnel, the things we hear about the most number one is returned. I was actually just meeting with somebody today who has not invested with us. He’s a friend. I’ve known them for a while, but he and his family are in the process of diversifying. And what he told me was in our meeting that his, his father, and their parents historically have had a very old school kind of mindset with where they put their capital and they’d acquire a lot of assets, but none of them really had a yield. There’s no real cash flow. So one of the biggest problems that we solve for investors is generating yield or returns, right? So if people are invested in things that don’t have any kind of cash flow or any kind of income stream, that’s the problem, right? You’re betting entirely on the appreciation of the asset and you don’t get paid to wait. And that’s a problem for people. If they’re investing in things that don’t have any kind of yield, you could be

Anthony Vicino: [00:09:28] You should be. Well, yeah, I mean, at the end of the day, what’s money? But if but not a tool like a tool for ideally buying back your time and living life on your terms? And it’s hard to do that when your money is tied up into something that can’t be easily translated into cash money and does something it doesn’t help you pay your bills today, right? And so cash flow is a great asset in one of the things that come to mind when you said that, like, they buy a lot of assets that don’t have yield, I’m like, Are they buying yachts because people sometimes buy yachts and they’re buying, but that’s like an example of like an asset out there that would not. Probably it might conserve your wealth might hold its value kind of well, but it’s not going to be putting cash back into your pocket. But one of

Dan Krueger: [00:10:08] The Pakatan, whatever tax district you want, that’s a nice part of.

Anthony Vicino: [00:10:11] That’s true. That’s true. The other part of the returns that people are looking for is they want to beat the stock market. They want to do better than average. And when they look at the returns of a, say, syndication or like whatever your type of deal is like, generally, what I’m seeing in the market these days for syndications is somewhere between 15 and 20 percent IRR. You get some people who are projecting 30 percent IRR. That’s crazy and you get people who come under 15, but generally, it’s in that range, which is really strong when you look at that relative to the stock market. So that’s one of the biggest things people are looking for. Like, I want to outpace the stock market. So we’re like, So do we? Yeah. So number two, and this is tied very closely with the bad investing advice of the day. And so let’s tread lightly into this one. But number two, investors are looking to mitigate risk. The heck design, man, there’s just so many. And again, it’s loaded, right? Like, there are so many different ways that we can mitigate risk in different investors by looking for different things. So, Dan, what are some of the more common things that people mean when they say risk?

Dan Krueger: [00:11:12] Yeah. I’d say that one of the most common ones that we hear on calls that are coming from people that we’re having that come in through our funnel is that they perceive overexposure to a particular asset class like the stock market to be risky. Right. So they’re looking to get exposure to something that’s not correlated. That could be one way to look at the risk paradigm, but then the other one could be the cash flow thing I just mentioned, right? If you’re investing in something and hoping for appreciation, getting cash flow in the interim while you wait for that to happen reduces the risk profile. So there’s a bunch of ways we can kind of

Anthony Vicino: [00:11:49] Hear this one. Here’s one that’s really pertinent right now, especially in the last year and a half, two years or so since we’ve been printing money like it’s going out of style is one of the biggest risks. Is inflation, right? It’s going to eat away at the value of your money. You just put that into your mattress and it’s going to be worth a little bit less than it was last year. So you want to look for something that’s a good inflationary hedge. Well, there are very few places that are better than real estate, a real asset that inflates along with everything else. So that’s one big risk. I would say another big risk special. When people are coming to us and what we do with big multifamily assets is the size and scale of the asset is inherently stable because it’s not predicated on one tenant or two tenants. There’s and also because the valuations of these buildings move very slowly. Real estate is like a big ocean tanker, whereas the stock market’s much more like a nimble speedboat out there on the waves. And the reason for that is liquidity, which we’ve said before. It’s a feature, not a bug, right? With the liquidity in the stock market, you can get in and out real quick, and that’s what’s making the valuations get all wobbly. Whereas in real estate, it’s going to take you a couple of months if you want to just sell a big multifamily asset. And so the valuations move much slower, which means your money is probably not going to just disappear overnight. Mm-hmm. Probably.

Dan Krueger: [00:13:06] Yeah. And one other thing on the risk component is just the fact of the matter that you’re investing in something that is a basic human need and that is very unlikely to go out of style in the next couple of years. If you’re investing in equities and companies, I mean, look at Peloton and Zoom 12 months ago, those things were the hottest thing on the street. Now they’re just falling apart. And what happened to them? I mean, they just the growth they saw wasn’t a long-term thing. It was just an interim demand that wasn’t going to be sustained and people bid the prices up like crazy because they’re all hopping on the bandwagon.

Anthony Vicino: [00:13:41] Some might even say transitory demand. I just want to put that word in there because I know it gets you all sassy. All right, it’s a risk. So number three, the number three problem, and again, these aren’t ranked in a hierarchy. They’re just the order that we wrote them out of our brain. Number three is taxes. It’s not about what you make. It’s about what you keep. And at the end of the day, the biggest expense you’re likely to pay in your lifetime is taxes. So anything that you can do to mitigate taxes, even just a little bit is going to go a long way.

Dan Krueger: [00:14:14] Yeah, this is a big one, especially with those individuals who are self-employed and or have some significant windfalls. If people are getting hit on the tax and really aggressively, like if they’re high paid professionals or something like that, sick to death of paying taxes. And so they’re looking at trying to increase their income in a more tax-efficient way. So there’s not a whole lot that a really high-paid doctor can do to wash out the tax liability on the earned income. But what they can do and what a lot of people do, who are coming into our sphere and having calls with us and getting into our deals is increasing the income that’s coming in from passive sources because that passive income is a heck of a lot more tax efficient. And over time, they can have a larger and larger proportion of their total income be coming from that passive income. So that’s one of the most common strategies I’ve noticed with individuals who are higher net worth or higher income.

Anthony Vicino: [00:15:13] Yeah, and this is important to start now and not wait. If you’re a high net worth lawyer, doctor, entrepreneur, business owner, now is the time to start taking funds and putting them into these assets, not in 15 20 years, because in 15, 20 years, you’re going to get to a place where you’re like, You know what? I’m ready to hang it up. And if you don’t already have those alternative income streams set up and rocking on all cylinders, you’re going to be really bummed when you try to leave your job and you’re like, If I stop working now, I don’t have enough cash flow coming in to really maintain the quality of life that I’ve become accustomed to. So if you start now and doesn’t even have to be a ton, we’ve done models on this where just even $50000 a year invested into syndications or any kind of real estate is going to snowball so quickly, especially when you factor in cash-out refinances. It’s going to snowball so quickly that in 10 years, you’re going to be in a position where you don’t have to keep working. You get to choose how many hours you work.

Dan Krueger: [00:16:11] Yeah, it’s one of those things that people don’t really have on the radar, usually until pretty late in life when it’s already becoming a problem. And it’s a good problem to have. I mean, if you’re getting taxed a lot, that means you’re making a lot so good for you. But you know, it would behoove you to be proactive about that. And like I said, you’re not really going to be able to wash out that active income tax on the earned income. But if you can accumulate more tax-efficient income on the side, that highly taxed income from your job is going to become less and less important into to Anthony’s point, you will be able to walk away a lot easier if you’ve already got a bunch of passive stuff churning over here that’s getting taxed at a much slower rate.

Anthony Vicino: [00:16:49] So now if you have a spouse who is in real estate, you could utilize the real estate professional status. That’s awesome. We did an episode on that. So if you’re making a ton of money and you’ve got a spouse who’s like just sitting on the couch all day, you know, go look up the real estate professional stats, go listen to that episode. It might be able to save you a ton of money. It’s not super easy, but it’s worth exploring. Now, number four on our list, and this one is actually very tied to what we were just talking about with lawyers, doctors, entrepreneurs like these high net worth, people who are earning really good money. Number four is diversification, and diversification can mean a lot of things like one you mentioned earlier is like not being correlated to the stock market, right? That’s great. We want noncorrelated assets. But the other part that I think about is that a lot of business owners that we work with are great at building their business. That’s what they’ve been doing for the entirety of their adult life. And they made this thing where they just keep reinvesting back into it and it’s a powerful vehicle. But now it’s the only egg that they have in their basket. And if that egg cracks for whatever reason, they’re like, What do I do? And so what we like to do is work with entrepreneurs and business owners to help them like start to diversify out of just investing into their business and create alternative streams so that you can get to a place in your life where if you don’t want to be working in your business all day, you don’t have to. If your significant other is like, Hey, you know, I want you to pull back and stop. Let’s go live our life and stop building that thing. You can do it.

Dan Krueger: [00:18:17] Yeah, I mean, at a certain point, Jamie’s going to make you. She’s gonna make me at some point. No, but yeah, that’s an amazing point, because you made the comment there about the, you know, if you put all your eggs in one basket and the basket eggs crack anyways, you know, if the basket fine basket. Yeah, if you’re putting all your money into one thing yourself, your business, there’s some risk there. But the other side, I mean, honestly, I think the lowest risk bet any day is yourself, right? You’re probably the most powerful and most trusted steward of your own capital. In most cases for most people. But I think the bigger risk there isn’t necessarily that you’re your business is going to fall apart. I think it’s more so that how many hours do you have in the day if you keep investing in your business that’s active for you, right? You’re investing in something that you’re actively participating and actively managing and actively involved in, and there are only so many out so many hours in the day. So at some point, you’re going to have to take some of that capital and put it into something that doesn’t require any additional time, any additional input from you. And so that’s usually where a lot of people are that are coming to us. They’ve got capital and they have been investing into their business. And if they do that again, it’s probably going to require some input from them in addition to the capital, but they don’t want to do that. And so that’s where it kind of becomes imperative to start putting money into passive endeavors because there are only so many hours in the day

Anthony Vicino: [00:19:37] Building businesses is hard. I think everybody should own a piece of a business and own a piece of commercial real estate. But let’s be honest, like building a business is hard work, and it’s a whole lot more fun I found to build a business when your life doesn’t depend on the success or failure of that business to be able to build it because you want to because you’re passionate about it is a whole lot better than building it and then relying on that thing for your sole source of survival and diversifying some of your eggs can help you do that. So that building business isn’t just this albatross around your neck. That’s stressful. It hanging over your head all the time. You’re not dreading anymore. You go and you build it because you’ll love it. So that’s diversification. That’s one of the more common ones that we see in our sphere. But number five on the list is actually probably the most common in the grand scheme because we work with passive investors. So it is obvious that most passive investors come with the problem that they don’t have enough time.

Dan Krueger: [00:20:40] Yeah. Yeah, I mean, most people that come into our sphere are coming in because they know they want to invest in real estate, they understand the value, they understand what a great asset class it is to get into. And they don’t want to be a landlord. They don’t want to sit down and study everything you need to know in order to be successful as a real estate investor and then even to get, even if they get to that point, they do all the study and then they’ve actually got to go out and find properties and manage them. Even if you get a property management company, it’s a full-time job and people don’t want to leave their job just to invest in real estate like they recognize the real estate’s amazing, great resource for all of the reasons that we’ve kind of mentioned up until now. But they don’t want to quit their job to switch to a new job and, you know, be guys like us, which is fine. And that’s really the biggest one of the most common things I think is like, they all realize that this is a great resource, but they just don’t have the extra 12 hours to go out and start a new business. Mm-hmm.

Anthony Vicino: [00:21:44] It’s interesting. I love real estate now and I’m obviously very deeply entrenched in it. But you know, I’ve shared my story before where 15 years ago, when I was in college, I was my first intersection with real estate in the form of fix and flips that might remain his dad was doing. And I remember thinking, Man, real estate sucks. I don’t want anything to do with this because it was so active and I was doing the construction. I was like, I hate this. And then a number of years later, I got into a couple of quads with a buddy, but I passively invested and he did everything, and I was like, This is great. I love real estate. I don’t have to do anything. This is fantastic. And it was only a number of years after that where I finally got bit by the active investing bug. But gosh, for those that period of time when I discovered that I could invest in real estate passively and not do the work, I was like, This is nirvana. This is the best thing ever.

Dan Krueger: [00:22:29] Yeah, no, it’s powerful. I mean, if you can, I mean, that’s infinitely scalable. I think that’s the whole point is if you’re not investing your time into a thing and you’re just using capital, you can scale that machine to the Moon. Mm-hmm. So which is really powerful and exciting?

Anthony Vicino: [00:22:46] So all right. So six number six and this is one is an interesting one. You used the word earlier in this episode. So I wonder if any of our if our audience, if you’re listening at home, this one is not a super intuitive one, but Dan used the word earlier. It’s a very unique word. So if you heard it and you have a guess of what this next one is, I want you to take a second. Go over to Apple. Go to iTunes. Go find us multifamily investing made simple and then leave a review and end the review. I want you to make a guess about what you think number six is going to be on this list. Now, I remember Dan did say the word earlier in this episode in the context of something else, but it’s such a unique word that once you hear it, you’re going to be like, Oh yeah, OK,

Dan Krueger: [00:23:26] All right, we’ll just sit here in silence for about three minutes.

Anthony Vicino: [00:23:30] Ok, now you guys can pause whatever now. Number six, Dan.

Dan Krueger: [00:23:37] What is it? Number six is a windfall windfall windfall, I don’t know why I said it quietly. It’s probably a loud word because it’s big and it’s actually a good problem. I mean, if you’re a let’s say, you’re a business owner, a self-employed individual and you sell your company, or maybe you just sell products and then they go in waves. And so every so often you’ve got a big influx of capital coming in, that could be a problem. It’s a good one, but you’ve got to figure out what to do with that because to Anthony’s point earlier about inflation, if that’s just sitting in the bank doing nothing, it’s losing buying power every single day. So cash actually is a problem these days. And if you find yourself in that situation? Good job. Good job you did to get that windfall fleet in traffic, some heroin or something. But assuming you did something legal and legitimate, great job.

Anthony Vicino: [00:24:26] It’s trafficking heroin illegal everywhere.

Dan Krueger: [00:24:29] I probably not

Anthony Vicino: [00:24:31] Asking for a friend. Continue.

Dan Krueger: [00:24:35] I haven’t done it. I haven’t looked up where you can legally traffic heroin. Probably Antarctica. I don’t know if I get away with anything.

Anthony Vicino: [00:24:41] I’m guessing are some places where it’s not illegal. I’m just wondering. I don’t know. Yeah, as you said, that I was like, I’m sure somebody out there has a very legitimate smuggling heroin business.

Dan Krueger: [00:24:49] Yeah, I’m sure. I’m sure. Yeah, you can. Well, actually Big Pharma, Purdue.

Anthony Vicino: [00:24:55] Yeah, there you go. So nailed it.

Dan Krueger: [00:24:58] All right. So that’s a different episode. Yeah. Windfall. Where was I? I lost myself.

Anthony Vicino: [00:25:05] So congratulations if you had a big windfall unless you’re that heroin person unless you’re one.

Dan Krueger: [00:25:12] Cash is a problem. If you got it, and it’s not in something that’s going to shield it from inflation, that could be an issue. And this is one of the not quite as common. But we’ve had a handful of individuals who have this. They sold a business. They just had a bunch of cash dumped on them, and they’ve got to put it somewhere. Real estate comes in handy for that.

Anthony Vicino: [00:25:30] This is this is interesting. It’s actually, I think, more common than a lot of people even realize. Like until earlier today, until you mentioned it, I was like, Oh yeah, that actually is a really common issue, which is, you know, you have a big insurance windfall for whatever reason, somebody dies that sucks or you have an inheritance or you sell a company like there are all these reasons that you might suddenly find yourselves holding a lot of cash. And that’s an interesting problem because for a lot of people, let’s say they have an inheritance and they just inherited $600000. And before that, they’ve been making $70000 every single year. So like six hundred thousand is a huge number and they don’t know what to do with it suddenly. And they’re like, Oh my God, what do I do? I want to do right by this. I don’t want to mess it up. And there’s so much stress involved with that. And so for us in particular, because we lead with education, we have a book and the podcast, and people come to us because they’re like, What should we do? And we’re like, This is what this is, what we don’t know what what you should do necessarily. And this is a vehicle where we can help you. But it is. It is a good problem to have in the sense that like, yeah, you got all this money, you got to figure out what to do. But that doesn’t make it any less stressful, especially God, if it’s an inheritance, or God forbid, it’s because you inherit like you, it’s an insurance payout because somebody you love died. Like, those are horrible reasons. But then that comes with the emotional stress of like, I want to do right by this money. My grandma, my grandma loved me this. I don’t want to besmirch her hard work in her life by just throwing this down the toilet. So like, there’s a lot of emotion built into this one or you sell

Dan Krueger: [00:27:00] A company and I’ve got a friend who had this situation as well, and I remember him talking about, you know, why he was, you know, keeping it in cash for so long. And it was because of the stress of knowing that this was money for his little kid’s college fund. He didn’t want to screw it up, and he had not been studying how to invest. He’s, you know, and it’s just not in that industry and like most people, just wasn’t super educated on what to do with your money outside of just thrown in and mutual funds. And you know, he was educated enough in finance to know that that just didn’t feel quite right for him. But it was a lot of stress knowing that like, Hey, I’ve got all this capital that I need to be a shepherd for. For my child, I don’t want to screw it up. Yeah, that’s a lot of pressure to have. And so, you know, I told him back then that I was like, Hey, just yeah, inflation is a bitch. It’s going to eat your money away, but don’t do anything until you understand exactly what you’re doing, because it would be much better to lose some buying power to inflation than to jump into something because you felt like you had to invest and then find out six, eight, 10 years later that maybe that wasn’t the best move.

Anthony Vicino: [00:28:08] So, yeah, as they say, doing nothing is better than doing something stupid, which is actually a really good Segway into a book. I wanted to recommend the day.

Dan Krueger: [00:28:19] Oh, you got one, too? Yeah. So we’ve got another book creeping in with all these books.

Anthony Vicino: [00:28:22] I’m trying. I’m trying to, you know, show people that I’m a well-read man as well. I want them to respect me.

Dan Krueger: [00:28:29] I didn’t until now. Now I realize you read books and I think you’re OK.

Anthony Vicino: [00:28:33] It is elevated in your mind, right? Yeah. When I wore glasses, he used to think I was smart, and then I got sick.

Dan Krueger: [00:28:39] Now see, I

Anthony Vicino: [00:28:40] See the truth. He’s a fool anyway. So anyway, before I get to the book recommendation or my book recommendation, anything that we want to let’s wrap. Let’s wrap up these six problems that we saw for investors from the top returns risk tax diversification, time, and windfall. I almost had waterfall windfall got a waterfall. I bet that six one through some people. I bet that one caught some people off guard. I hope so. Now listen, if you did, in fact, guess that right and you left a review. And honestly, I have no way of auditing whether or not you left the review in time, so you could always retroactively just go back and be like windfall if you did. I want you to reach out. I’m going to send you a free copy of our book. It’s going to be signed and it’s going to have a breath mint in there. So that’s my little gift. A little Andy’s. Well, Andy’s mint. Yeah. So leave a review. Get in Andy’s Mint. That’s all I’m saying. All right, so to the book review, Dan, do you want to lead off with your book? Sure.

Dan Krueger: [00:29:39] All right. I have no Segway from mine. It’s just a book review.

Anthony Vicino: [00:29:44] It’s like you’re not even trying.

Dan Krueger: [00:29:45] I’m phoning this one. And no, this is actually a book that read probably over a year ago. It’s been a really long time. But I thought it was good because I’m really just I love books that are kind of a. I don’t know how to describe it, there is a very detailed description of what’s picture books? No. Yes, Calvin and Hobbes. Oh yeah,

Anthony Vicino: [00:30:10] Yeah. You already use that trick on me earlier. Yeah, yeah.

Dan Krueger: [00:30:16] All right. Focus. No. I love books that are about very detailed stories about the building of a business or something like that. And in this book is actually about the building of a fake business and it’s called Bad Blood and. It is about fairness, so I think Elizabeth Holmes of Theranos is actually on trial now, this is she has this all kind of blew up in her face a while ago, but she’s just now getting into the trial, and that kind of reminded me about this book. I thought it was fascinating, but isn’t it crazy?

Anthony Vicino: [00:30:48] Oh, it’s insane. It’s insanity. All of it. It’s like beginning to end the whole story. It’s like bonkers.

Dan Krueger: [00:30:53] It’s oh my goodness. Yeah, so it’s incredibly entertaining and fascinating, and it’s not bad to read about this stuff because it makes you better at spotting shady fraud people. So that’s another little, you know, sidebar little bonuses. If you read about that kind of stuff, then you’re probably better at spotting it yourself. Although this one was nuts and she had

Anthony Vicino: [00:31:12] A lot of absolutely crazy.

Dan Krueger: [00:31:14] It’s by John Kerry. I hope I’m not butchering his name, but check it out the bad blood. They also did a movie on it. If you’re more of a viewer than a reader. Check it out. It’s obviously very abbreviated compared to the book. The book has got so many details, which I found fascinating.

Anthony Vicino: [00:31:28] Yeah, I’ll second that. That’s an interesting, fascinating story. It’s stranger than fiction. It’s one of those situations where you’re like, This can’t be real. This really can’t be happening in this day and age. I’m reading a book. This is not my book recommendation, but I’m reading a book right now about Dr. Brinkley, who back in the early 1900s was like going between towns and selling like, here’s a doctor, and he would be marketing like those like cure-all elixirs, where it’s like, this will cure everything. But what he did was he marketed a surgery that, yeah, that made men virile. So it helped infertile men by taking goat testicles and surgically applying them to men. It is who it is the craziest story anyway. That’s not even my recommendation. I just wanted to let you guys know. It’s like a crazy story. Life is weird. That’s all I’m saying. Ok, so my Segway was doing. Nothing is better than doing something stupid with Segway is into my book. My book recommendation, which is the road less stupid. But I think his name is Keith Cunningham. I might have that wrong.

Dan Krueger: [00:32:35] I’ve heard of this.

Anthony Vicino: [00:32:36] I recommend it to you the other day. It’s a business book. It is. It is really good. It’s about Never listening, I get it. It’s all about asking better questions. Oh yeah, and asking questions about what needs to get done in your business or in your life to actually get to your goals. Because quite often. Yeah. Well, no, this kind of tangent like kind of tied in, but it’s just a really good book because I’m always fascinated with how other people think. And the more data points I can get for how other people do not just like how they think, but like the actual mechanics of what does your thinking time looks like? Like, what do you? How is that structured? What questions are you asking to try and get the best answers? Because the quality of your questions dictates the quality of your answers, which dictates the quality of your results? I found this book. It’s just really, really good. So if you’re an entrepreneur or you’re just trying to level up your own life, like it’s pretty it’s a pretty good read

Dan Krueger: [00:33:33] At this time,

Anthony Vicino: [00:33:35] You’re going to like it.

Dan Krueger: [00:33:36] I guarantee every time you say that to me, I actually do really enjoy whatever it is.

Anthony Vicino: [00:33:42] So I feel like I recently recommended the Scarlet Lady Woman of Wall Street and I saw it on your desk. And it’s really good for a very particular type of people. So I recommend it this podcast once. So. Unless you’re a particular type of person, maybe that book isn’t for you if you really like stocks and markets and like, that’s going to be for you, though.

Dan Krueger: [00:34:02] Yeah, it sounds like if you’re into specifically historical. Markets icon type stuff, yeah, if you’re that guy,

Anthony Vicino: [00:34:12] It sounds like it’s like crazy stories about people doing bamboozling each other. Everyone likes

Dan Krueger: [00:34:16] That. Everybody loves that. I think this one was like, really like kind of historical, which is very historical. The type of person. Yeah.

Anthony Vicino: [00:34:22] I think you’ll like it. Anyways, those are our book recommendations. Go check them out. Bad blood and the road less stupid. You combine those two like

Dan Krueger: [00:34:29] Nobody got the goat

Anthony Vicino: [00:34:30] Nuts, right? The goat nuts. That’s like Make Them Believe by Dan Kennedy. It’s a marketing book. I don’t know if I want to read that.

Dan Krueger: [00:34:37] Is that the whole book about that guy or is that he

Anthony Vicino: [00:34:39] It’s all about him and his marketing strategy? I don’t know, because think about how good of a marketer he must have been to get people to go in on that cure.

Dan Krueger: [00:34:47] Yeah, I mean, if you got to be amazing in that, I guess he like

Anthony Vicino: [00:34:51] He’s not selling a Porsche or an iPhone, something that’s beautiful and easy to sell. He’s like selling you a surgery that

Dan Krueger: [00:34:57] Is, I guess, not very crazy.

Anthony Vicino: [00:34:59] So, yeah, some things to learn anyways. So that’s going to do it for us, guys. We appreciate you taking some time to listen to the six problems that we solve and active investors can solve for their passive investor brethren. If you’ve got any value out of this, make sure that you go leave a review over on iTunes. If you want that Andy’s mint and a free physical copy of passive investing made simple, make sure you send me an email with a link to the review and then also an address that we can send a book and we’ll get it out to

Dan Krueger: [00:35:26] You and that audiobook so too.

Anthony Vicino: [00:35:29] Oh yeah. Also, the audiobook came out.

Dan Krueger: [00:35:31] Yeah, kind of a big deal. Kind of a big deal. If you’re listening to a podcast, you probably like audio stuff.

Anthony Vicino: [00:35:36] Let me start my sales pitch again. Hey, do you like listening to things? Sure, you do. You’re here anyway, so that’s going to do it. Go get the audiobook, go get everything and we’ll see you guys next week.

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