Jeff Swearingen's Net Worth is $120 Million. His Goal? Stop Pursuing More Money.

Full Transcript

[00:00:01] Jeff: Money and sex are the only two addictions where people really envy the addicts. I'm here to tell you, it's not all that great. I'm talking about money. Of course.

[00:00:09] Sam Parr: All right, so one of my favorite people to read about is Andrew Carnegie. Andrew Carnegie was basically like the Jeff Bezos of the 1800s in America. He was one of the richest people to ever live. And it's funny because he said something when he was 33. He wrote this in his diary. He said, I propose to take an income no greater than $50,000 per year. Beyond this, I am not going to make a cent more, and I'm going to spend the rest of my time and money on benevolent purposes. Let's cast aside business forever. And what's funny is, two years later he went on and started US steel, which is what made him the richest person ever to live, or one of. And so he didn't exactly stick to that, however. Today's guest is someone who actually stopped making money by his own choice. He realized that he had enough money, and despite his overwhelming instincts, he committed to removing the pursuit of more from his life.

[00:01:00] Jeff: The whole point of the money was to enjoy it, to give it away, to live life. The point of the money was not the money.

[00:01:05] Sam Parr: That's Jeff, and he's worth around $120 million, totally liquid because he sold his company. But he says that if he stopped at $20 million, his life wouldn't be any different. However, Jeff is quite the spender.

[00:01:19] Jeff: So I bought a jet.

[00:01:20] Sam Parr: In this week's episode of Moneywise, we're gonna learn about how Jeff realized that he's had enough. How his pursuit of more was getting in the way of enjoying what he built, and why he thinks it's his duty to spend his money. And by the way, unlike Andrew Carnegie so far, Jeff has actually stuck to his plan of not wanting to make any more money for the rest of his life. And of course, we're also going to get into all the details about how much money he has, where all the money is and how he invest it, and what his monthly expenses are, and all of that transparent stuff that money wise, is famous for.

[00:01:56] Sam Parr: I'm Sam Parr, and this is Moneywise, there's a ton of podcasts and resources out there that teach you how to become wealthy, but there's not a lot of stuff out there that teaches you how to deal with all of the light changes that wealth brings. And the reason I know that is I'm co-founder of a company called Hampton. You can see it at Join Hampton. It's a community where we focus on this entire topic. It's a community of business owners. We have thousands of business owners, people who are CEOs of companies, people who founded companies, people who owned companies ranging from a million in revenue all the way up to hundreds of millions of revenue. People who have publicly traded companies. And that community is what has inspired this podcast. I'm able to see all these conversations that people are having behind closed doors. And I thought, hey, let's make a podcast out of it, because a let's be honest, it's good content marketing for Hampton. So if you are a person who owns a company, check it out, join Hampton Comm and B, this stuff is so fascinating. You can't Google this stuff. You can't really find it anywhere. And I thought it'd be awesome to bring it out in the public with money wise. We provide advice by talking to real people who have achieved some amazing things and they are radically transparent about their life. They're radically transparent about their numbers, meaning their portfolio, their income, their monthly expenses. And more importantly, the radically transparent about all the personal issues and problems that come with being successful. Things are rarely ever discussed and how they're trying to solve those problems. You can also listen to the show on Amazon Music, or just ask Alexa by saying, Alexa, play money wise on Amazon Music. So this episode really is about when the pursuit of money impedes on your pursuit of happiness. Jeff actually refers to this urge to accumulate wealth as an addiction.

[00:03:31] Jeff: I'm a recovering money addict.

[00:03:32] Sam Parr: But I want to set something straight before we really get into it. Not making more doesn't mean not spending. Jeff is a huge spender and we're going to talk about that more. He may be addicted to accumulating, but that definitely doesn't mean he's hoarding his money. Jeff feels quite comfortable with the wealth that he's created. And by the way, this is something that's really unique to him he doesn't really feel anxiety about his money running out or going away. And this journey he's on, this dedication to enjoying his life and resisting the urge to make more money isn't something that he's doing alone. He actually started a group of like minded founders who are going through the same thing. We'll talk more about that soon. But enough about the rambling preamble. Let's get to the good stuff. Starting with Jeff's early relationship to money.

[00:04:17] Jeff: My mom was, uh, she was a teacher and a nurse, but stayed home to raise my sister. My dad was a he was an office worker. Worked super hard. I think I got my thirst for money watching my dad leave the house at before anybody was up and home at 615 for 630 dinner and then disappear to do more work. So I think that was my initial view, that money must be pretty important.

[00:04:37] Sam Parr: How old were you when you started your first company?

[00:04:40] Jeff: If you exclude going door to door selling shit when I was eight years old, let's say, uh, the correct answer is 28. I had a dotcom in the 97 through 99 range.

[00:04:50] Sam Parr: Were you doing anything interesting before that or just like a normal tech job.

[00:04:53] Jeff: It was a normal tech job. My career was in sales, out of school. I spent seven years at two different tech companies selling hardware and then software.

[00:05:00] Sam Parr: And just two years after starting his first business, Jeff gets its first exit, which he attributes a lot to luck.

[00:05:06] Jeff: We got lucky, actually. I would attribute it to maybe being a little bit early in a wave, but also like being at a really hot blackjack table where a lot of people were winning but managed to walk away with some chips, which was great. But most of the people stayed in the casino too long and gave it all back. So I was fortunate to have escaped that era with a few chips in my pocket.

[00:05:27] Sam Parr: The chips he's referencing is the million he walked away with personally after the deal. Fittingly, he keeps using the casino metaphor and he did lose some of his money shortly after.

[00:05:38] Jeff: I was part of a failed software startup that was part of my giving some chips back to the casino. I dabbled in a couple of different businesses and tried to figure out what was next. This is post.com bust, So tech wasn't really a thing yet, and I was virtually unemployable at that point. So it took about close to three years to get started with something new.

[00:05:59] Sam Parr: Eventually, Geoff landed the big one and that's his company that he started, which was a B2B enterprise software business, which he describes as nothing interesting. What was the idea or signal that you had for number two?

[00:06:12] Jeff: I had a technical co-founder that I had worked with at two previous companies. You know, if there's a way to pick a technical co-founder, it's work with that person in a company where they're revered. And you understand this is the guy could be a girl in this case is a guy like, this is the guy I like to say, you know, when you're starting a band, if you have a choice of having 20 really accomplished guitar players or one Eddie Van Halen, go with Eddie. So I got to start with Eddie, and Eddie had an idea for a business. We were a little early. Took a while to get going. $10,000 of revenue our first year, 80,000, the second year, 300,003rd year, etc. so we didn't break even for five years. So it was it was it was tough sledding to get going. We bootstrapped it almost completely. So it was his idea.

[00:06:54] Sam Parr: What was your start up? Capital. How much was it?

[00:06:57] Jeff: Less than $1 million. I had $350,000 raised from some local angels. I put about the same amount in myself. And then toward the end, where we could see profitability in sight, we had a line of credit that helped us get to cash flow, break even. That was that was five years in. And then we never lost money again. Not once.

[00:07:15] Sam Parr: Of your 350, what percentage of your net worth at the time was that.

[00:07:19] Jeff: At the time that I put in the 350? Yeah, 150%.

[00:07:24] Sam Parr: Oh, really? So you were you were leveraged?

[00:07:26] Jeff: Yeah. No, that's a my ego is making me seem more heroic than I really am. It was a lot. It was. It was what we had.

[00:07:34] Sam Parr: What does that feel like? Did you have kids?

[00:07:36] Jeff: Yeah, yeah. Three kids. It's awful. Honestly. It's awful. It's tough to get a business going. I have a rule or I have a law. Maybe it's an axiom Him and it says, if you're lucky, it'll take you twice as long and cost double what you projected to get halfway to your worst case scenario. And if that happens, it's okay. You know, you should do it anyway. But whatever that spreadsheet says, where you have your your worst case scenario, just plan on it taking twice as long and costing twice as much. It was rough. But you know, I had the support of a loving wife and great kids and in-laws and parents and friends and neighbors and great employees. So it was far from one person's heroic journey.

[00:08:20] Sam Parr: Jeff continued to grind and grow the company for 14 years.

[00:08:24] Jeff: We grew slow and steady from the time we started breaking even, which was $1 million of recurring revenue. We grew slow and steady. We tended to be about 2,025% growth and about 20% profit. In hindsight, I was running it way too conservatively.

[00:08:37] Sam Parr: Oh yeah, it sounds like it. But who would have known, right? It was an obvious back then.

[00:08:41] Jeff: It was not. I didn't know. I talk about the idea of the slot machine. There's reels that spin and you have your revenue, of course, and you have your gross margin, which hours were great at 90%. You have your, uh, your retention rate. Our net retention was 117%. So we took really good care of our customers, but our growth rate was only about 20, 25%, you know, and that slot machine was like jackpot, jackpot, potato.

[00:09:04] Sam Parr: And throughout all of this, his personal income also gradually increased.

[00:09:08] Jeff: Went from not getting paid to getting paid kind of ramen wages to making a decent salary to making. I don't remember at the end, you know, I was making hundreds of thousands of dollars a year. It was all of my wealth, essentially. It was realistically 95% of my my wealth was in the business.

[00:09:23] Sam Parr: Were you trying to save as you went or were you were like, this is a recurring business, or at least there's recurring cash flows. I can go ahead and spend a little and live out of my means in terms of cash flow basis, or were you still living like a relatively normal W2 earning lifestyle?

[00:09:39] Jeff: I would say our lifestyle crept into a more luxurious one over time. But there was never a moment where I thought, this is a stone cold lock. We were one bad line of code away from extinction at any point in time.

[00:09:52] Sam Parr: But then at the 14 year mark, things start to change.

[00:09:58] Jeff: We got a call from a competitor and they said, I want to buy the company. We want to buy the company. I said, I can't believe you'd call me. You'd even bother. I'm a little bit offended, but as long as we're on the phone, how much were you thinking? And they told me. And that was what?

[00:10:10] Sam Parr: Why were you offended?

[00:10:11] Jeff: I was joking, I was, I was bluffing. I was like, tell me about the money. How much am I worth? You know, they gave me a number. We hired a banker and we ran a process. And it turned out we had built a sturdy little house on top of some pretty valuable ground. We ended up partnering with the private equity firm that I wanted. When that first check hit, it was Magic Man. It was. It was magic. Like many other money degenerates, I always had a number in mind. I thought if I had 10 million, I'd be square. 10 million of liquid assets, I'd be square. So of course, I secretly was wishing for 20 because that's what we do. The first check was 21 million. That was my check personally. Wow.

[00:10:47] Sam Parr: How old were you?

[00:10:48] Jeff: I would have been 47. Yeah, 47. 48.

[00:10:52] Sam Parr: That's a lot of money. So $21 million after taxes is, what, like 16?

[00:10:56] Jeff: Yeah, there's some nice exemptions there. So it was it was probably like 18 after taxes.

[00:11:01] Sam Parr: Wow. Wow. And that must have been life changing.

[00:11:04] Jeff: It was it was absolutely life changing. It took. It brought certainty to my family and to myself for the first time. You know, we were fortunate to be able to roll some equity, which worked out great.

[00:11:14] Sam Parr: A $21 million check is pretty insane. It's absolutely crazy. But that was just the first of three. And the next two checks were even bigger. We're gonna dive deep on that in just a second after this short ad break. So here's the thing. When I got my first big payday after selling my company, when I got that first check, I got some amazing advice, which is do not make any major purchases in the first year. So I put a lot of money aside and I just wanted to ease into my new reality. And I think that is a great bit of advice. However, Jeff didn't do that.

[00:11:46] Jeff: I bought everything.

[00:11:47] Sam Parr: The first thing that he bought.

[00:11:48] Jeff: I bought a jet.

[00:11:49] Sam Parr: A jet on 18 million. Yeah, that's a bubbly expense.

[00:11:53] Jeff: That's a bubbly expense. That was my one big thing. I always had a vision when I was sitting in economy, minus traveling to see customers, that one day I was going to earn my way out of this nonsense. And I will never again sit next to an overweight man in a hockey jersey eating Panda Express, taking a nap on my shoulder. It's not going to happen. It's not going to happen again.

[00:12:14] Sam Parr: How much was that?

[00:12:15] Jeff: That jet was, uh, between 3 and $4 million.

[00:12:18] Sam Parr: Do you finance it?

[00:12:19] Jeff: No. Paid cash. We did what everybody does. We put it in a charter pool. We thought it'd be great. We thought, you know, it's going to make money for us when it's not flying. Totally false.

[00:12:27] Sam Parr: What's false about.

[00:12:28] Jeff: That? Everything.

[00:12:29] Sam Parr: Is it sort of like buying? Like where you're like, I'm just going to buy real estate and you're like, oh, shit, now I'm a landlord. And I got to, like, do stuff for it. And the returns aren't 10% cash. On cash, it's more like 1% because I didn't know what I was doing. And you got to do like eight of these deals in order to find a winner.

[00:12:43] Jeff: It's a lot like that, except your real estate flies and breaks down a lot.

[00:12:46] Sam Parr: And yeah. So what was it like?

[00:12:48] Jeff: Let me answer it correctly. It was a combination of ecstasy and rage. When things went well and the plane was flying and the pilots were okay, and the tray table wasn't broken and the Wi-Fi was working and people were chartering. It was great. It was ecstasy. And then when things went wrong, it was a really quick way to get frustrated and angry that you had worked so hard for so long to get this prize, and it was grieving you. Somehow. You cannot calculate head trash in a spreadsheet. Sam, if you think about buying a plane, you know I'm going to fly this many hours. We're going to charter this many hours. It's this much operating cost, this much fixed, blah, blah, blah. Put a cell in there that says head trash and try to assign a value to it, and then probably multiply that number by ten. It doesn't work.

[00:13:29] Sam Parr: What did you do with the rest of the money?

[00:13:31] Jeff: A lot of it got invested. I said in cash for a while. I'm a pretty conservative investor. Toward the end of the first hold period, we bought a house in big Sky, Montana. I think it was about 4 million.

[00:13:44] Sam Parr: So you're down to from your 18 or so. You're down to what, 10 or 12.

[00:13:49] Jeff: Liquid somewhere in there? I don't know. That feels lean. For some reason, we did sell the plane and actually made a small profit in a fit of good luck that came back. Maybe one way of looking at it is I traded the plane for the ski house, which made me a lot happier and made my wife a lot happier. She's a mountain girl.

[00:14:03] Sam Parr: While Jeff is making these big purchases and accumulating head trash, he's simultaneously continuing to grow his company before the next two parts of his exit.

[00:14:12] Jeff: We had an additional exit in 2020 and then the final exit in 2022.

[00:14:18] Sam Parr: And what were each of those payments?

[00:14:20] Jeff: The second was 40 and the third was 27.

[00:14:25] Sam Parr: Where did you notice meaningful differences in how you felt.

[00:14:29] Jeff: The big change was between the first check after the exit and the second check. So the first check represented, I'm set for life. That was in 2017. It was a $21 million check. That was the first big step change. And then the second one was the $40 million check where it was just more than I had planned on.

[00:14:50] Sam Parr: So 21, 40 and 27, that's a total of $88 million. But after all of that, after achieving more than he ever expected from his business and just completely walking away, Jeff realized that it still didn't feel right. It didn't feel like he thought it should.

[00:15:06] Jeff: The thing I tell people is my my life in retirement is easily a ten out of ten, but I was sure it would be at least a 12. I thought I'd be flying around like doing cool shit with fun people every day. Maybe somehow this sounds so weird, but maybe somehow the universe would treat me a little differently since I had somehow achieved something that I set out to do. And it's isolating in a lot of ways, and it's frustrating in a lot of ways. And this is why I've been on this journey. I hit the wall in in summer of 22, after I had bought everything that I could think to buy, and I'm one of these odd people that has a hard time being happy. I'm really good at preparing to be happy. Just for example, the, you know, the checks have come in and we've got money and I've got four houses at this point, but I'm not quite ready to be happy because fill in the blank, the theater seating in the beach house isn't quite right, and the Sonos system isn't sinking in this house. So like, as soon as I get this done, then I'm going to be happy. And I got all the things done in the summer of 22 and I, I wasn't happy.

[00:16:14] Sam Parr: Like Jeff said, he got caught up in seeing his money as a way to prepare to be happy. Almost like building a company with the expectation of an exit. It was always a work in progress until it was finally ready for that next big payout. But that big payout was never coming. Happiness isn't an exit. Life is happening while you're doing that building. And if you can't figure out how to be happy during the building part, during the journey, I just think it's rare that you're going to be happy suddenly right after the exit. And like a lot of people in this position, this all became more clear to him after hitting a major milestone.

[00:16:49] Jeff: I'll make a confession. So I crossed 100 million last year, and when I crossed that threshold, guess what happened?

[00:16:55] Sam Parr: You wanted more?

[00:16:56] Jeff: Almost. I got protective of it. I started thinking, okay, if the market's down a little bit. Gosh, am I only 97 now, am I? Am I less than that, am I? Oh, today's a good day. I'm, you know, 112. Like this is a good day. And it's so weird.

[00:17:09] Sam Parr: Can't lose a comma. Losing a comma is a big deal.

[00:17:12] Jeff: It's another digit. Yeah. We're humans. We happen to operate on a base ten numeral system. So, like, there's this thing. It doesn't matter, man. It doesn't matter. And I'm reminding myself by by explaining it to you, I think this concept of enough, this is the, if you will, the corner I'm standing on in the world is helping people who have enough, who know they have enough, not go back and do it again for more money. Do you know anybody that has just like gobs of money, doesn't spend, barely spends a fraction of it, and they're still slugging it out?

[00:17:42] Sam Parr: Yeah, a bunch. That's the majority of people, I think.

[00:17:45] Jeff: Run your own race, everyone. Right. But for me, the whole point of the money was to enjoy it, to give it away, to live life. The point of the money was not the money.

[00:17:54] Sam Parr: Rather than fixating on accumulating more money and succumbing to the anxiety of its potential loss, he instead started to focus on letting go and living more freely. He decided to prioritize enjoying his money because, to be honest, he already has more than anyone could ever really need. He hit his mark.

[00:18:10] Jeff: You touched on the point of the money running away from you. Maybe when you're not chasing it, not paying attention. And I know this sounds strange, but it gives me angst that that portfolio will run away from us. And again, I look at it as my obligation to put that money to work. You are a steward of that money. And as you know, if you don't fly private, your kids will. Why not put it in play? Why not put it in use? You can either spend it or give it away while you're alive. And when you're dead, you can give it away or you can give it to the government. So there's one that I definitely don't want to do, which is die and give it to the government. Don't want to ruin my kids. What I want to do is spend it to the best of my ability and give it away to the best causes that I can and keep it flowing. I'm trying to not be Scrooge McDuck sitting on this big pile of coins and bills and not letting it go.

[00:19:00] Speaker4: I'm not the richest duck in the world today because I just salted my money away.

[00:19:05] Sam Parr: Jeff's entire mind shift. It's kind of interesting. It started because of a paper that a lot of people have heard of and maybe read. Listen to this.

[00:19:12] Jeff: The thing that started me down this path is a paper from Yale, I believe it's called The Entrepreneur's Epilogue and the Paradox of Success, I found it four years maybe into retirement, where I thought I had this rare, weird disease, that I was the only human in the world that had it. And I read it and was like, oh my God, this is it. This is the thing.

[00:19:37] Sam Parr: What's super interesting about the shift in Jeff's mindset, this commitment to essentially cutting himself off from making any more income is that, as we said, it doesn't coincide with cutting back on spending. I promise we're gonna get to all the details about where his money is and what he spends it on his portfolio, all of that good stuff. But before we get to that, we've got to learn a little bit about how he got his mind to shift that drastically, because it really isn't as easy as just saying, hey, I'm going to change my mind.

[00:20:04] Jeff: This is a project and this is a process.

[00:20:07] Sam Parr: We're gonna get to all that in a minute. But first, a quick sponsor break. We'll be right back. So how did Jeff shift his mindset from joyless accumulation to embracing life without the pursuit of more impeding on his happiness?

[00:20:21] Jeff: I hired a coach. His name is Rick Eigenbrode. He wrote a book called What Happens When You Get What You Want, which is really impactful to me. He was one of the co-authors of a Yale paper that a lot of Post-exit founders have read and really resonated with. The thing that really unlocked for me when going through therapy was, I have all of these processes that run in my brain, and one of those processes is accumulating rather than accumulating. One of my subroutines is optimizing when I don't need to optimize. I've got a list of 12 of these things. And when you're an entrepreneur, these subroutines can be very beneficial.

[00:20:57] Sam Parr: What's an example of one of the 12?

[00:21:00] Jeff: I think my favorite one is finding something wrong and fixing it. We were in the security business. When you run a security software company, it's important to find something that's wrong and fix it right away. Make sense? Now go on vacation with that guy. Right? Check into your suite at the Four Seasons, and I'm on my hands and knees trying to fix a little fray in the carpet. And my wife's like, hey, dummy, did you see the ocean?

[00:21:23] Sam Parr: Yeah. And it doesn't matter. So you have to, like, basically deprogram yourself.

[00:21:27] Jeff: You have to deprogram yourself. And accumulating wealth is one of those things that's really hard. And we talk about this in this group I have it's just starting. I've got about 20 people that are in it. And the point of the group is to assemble people who have said they have enough. And I don't know the wealth range is in it, probably 25 million to a couple hundred million. There are people that need the accountability, maybe from others or appreciate the accountability from others that, look, you've got enough and let's not waste our brain cycles talking about how to get more. I don't want to sit in a room with people and talk about how much money I have, and then talk about how to get more. I'd rather talk about how to make the most use of what I've got, how to enjoy it, and how to give it away, how to have replace the purpose that I had running a company.

[00:22:19] Sam Parr: I don't really want to make this episode about why you shouldn't go and build more companies, even if you've made a bunch of money. Because while I don't think it's true for everyone, there's a lot of people of which I think I'm in that category who find genuine happiness from entrepreneurship and creating stuff. What's important, though, is that you think about why you're doing it. Do you actually enjoy it, or is it just because you feel like you need to have more, more money, more clout, more success? Maybe you don't know how to slow down and be still. And that's the whole point of this conversation. It's why I admire Jeff. Jeff's just one person, so you can take what you will from his personal experience. But for him, work was something that never truly brought him joy.

[00:22:57] Jeff: I think I like working like I liked high school. When you think back, you know, you think of the good things. I played basketball. Man, those are my closest buddies and I miss that. But do I want to sit through history class again or try? No. I think in aggregate, no, I didn't like working. I was in it for the money.

[00:23:14] Sam Parr: Now, look, neither Jeff nor I can give you an answer about what makes sense for you, and this is something that you'll need to do some soul searching on. I can't tell you that removing work and the pursuit of more from your life doesn't mean removing projects that bring purpose in life. We talked about that in our retirement episode, which you should go back and listen to. It's awesome. But focusing on Jeff while he stopped working, he still has found purpose in new projects.

[00:23:38] Jeff: I've created two communities my retired founder community where I give advice and never invest and never ask for anything from anyone at any stage who's starting a company. I've got a I have a huge love for founders and I have a connection to founders. We tend to just communicate on the same frequency and it brings me energy, which is my scorecard in life. So that's a project. And then my beyond the finish line group that we're talking about of people who have they've had some success. They know they have enough. They're trying to figure out what to do with their next chapter. My coach says if you can't figure out what you want, you'll just want more. And I've been in that spot before. So the challenge is to figure out what you want. What's your purpose? What's going to replace the quest for money? What's going to replace the structure that you had running a company in retirement?

[00:24:23] Sam Parr: So Jeff is now at the point in his life where he's intentionally not making more money. And as I mentioned, his days of massive purchases are mostly over.

[00:24:31] Jeff: I feel like I have optimal complexity and optimal stuff right now. It's more than I need. I only have cars that I love. I only have houses that I love. I don't have a great desire to accumulate more stuff.

[00:24:46] Sam Parr: But the guy's worth $120 million. So what is he doing with all of his money? How does he have it invested? This is a lot of people's favorite part of money wise. Here it is.

[00:24:57] Jeff: I'm glad you asked. The headline I'd like to lead with is all of the money is moving in a direction of Vanguard Index ETFs. And anyone listening who comes into a windfall and thinks they're going to enjoy angel investing and advising caution. And I have conversations like this all the time. I've had 50 of these. I've yet to come across someone who says investing in a bunch of or a handful of Vanguard or similar ETFs is a bad idea. Everyone goes through the same loop.

[00:25:30] Sam Parr: I did the same thing. I did a ton of angel investments and they're going to make money. It's just boring. It's just you give someone money and you don't hear from them for 5 or 10 years.

[00:25:40] Jeff: Yeah. And then you're chasing k-1s. And I had a 240 page tax return. And to your point, yeah, some of them are going to make money and that's fine. But, you know, if you value your your time and energy, I wouldn't recommend it.

[00:25:54] Sam Parr: What's like the portfolio breakdown right now.

[00:25:57] Jeff: If I look at it at macro at last check just using 100 as a as an example, I'm about 15% in cash. I own about $15 million worth of stuff. That's two houses, a couple of plain shares and just stuff. And then about 70 million that's in the market. And inside the market again, we're trending toward the ETFs, the index ETFs. But I own a decent chunk of real estate, which I'm in the process of unwinding. I own a decent amount of not a lot, but some private equity owns some crypto a handful of other things. But it's all running to the ETF end of the table.

[00:26:35] Sam Parr: By the way, what Jeff said here about keeping it simple for your sanity. This is something that a lot of successful people have talked about on money wise, which is they just invest in ETFs or mutual funds. A lot of times they're not buying individual stocks or making a ton of different investments. It's the simplest stuff that basically everyone has access to. Now let's learn about what he's spending on.

[00:26:56] Jeff: I try to work from a 3 to 4% withdrawal, which puts me in a spot to. It's a great spot to spend about $2 million a year.

[00:27:04] Sam Parr: What's the breakdown you think of expenses?

[00:27:06] Jeff: I don't look at it on a monthly basis. I can tell you on the on an annual basis. My number one expense is an embarrassing one, but I'll tell you that it's Netjets. If you don't mind me mentioning a brand name.

[00:27:17] Sam Parr: How much is that per year?

[00:27:18] Jeff: That's about 700 750,000 a year.

[00:27:22] Sam Parr: And how many flights a year does 700 get you? That is that.

[00:27:24] Jeff: That's 100 hours. So it'd be like going from Scottsdale to Austin, Texas twice in a month.

[00:27:30] Sam Parr: Is that worth it?

[00:27:31] Jeff: It's worth it to me. I have friends that have way more money than I have that fly economy, or just can't get themselves, have a hard time stepping up to a business class or first class ticket. Personally, I have a problem with, uh, emotionally with with flying, and I'm listening to myself talk. It's the thing that I really wanted, Sam. It's like the reason I did what I did, the reason I took the risks in my mind, a lot of it was to be able to escape taking off my shoes and not having a four ounce bottle of shampoo or something. It just I just wanted to exit that. So for me, for me, it's worth it.

[00:28:06] Sam Parr: All right. So then about 20 to 25% of your annual spend is going to flights. What else?

[00:28:12] Jeff: Oh, it's probably higher than that. But the number two thing is probably just general expenses. I don't track things, you know, in a quicken spreadsheet or anything, but the credit card bill tends to run 30 grand a month, something like that. That might be buying ski passes for the kids or taking a nice vacation or whatever it might be. We spend about $200,000 a year on our homes, between property tax and property managers and utilities and insurance, and the things that go wrong. We spend about $250,000 a year on three really nice club memberships. That's a really good spend of money. And then we spend, gosh, I don't know, maybe 50,000 a year on. I don't have health care insurance, concierge medicine and health care, nutrition, things like that.

[00:28:55] Sam Parr: Also, I just want to call out something really quick. Jeff isn't actively pursuing more money by working on or growing businesses.

[00:29:02] Jeff: But the real estate that I own today has is cash flowing real estate that brings in about 2 million a year or 2.5 million a year with the three main projects I have.

[00:29:12] Sam Parr: And on top of that, even though he's maybe spending $3 million a year because of his investments, because of his net worth, which is around $120 million, it's still going up significantly each year, compounding growth. Once you already have a lot of money, it is insane. Which means two things one. No wonder why he's not concerned about losing his money. He's got it set up so nicely. He's made enough. He's totally spending. Even if it is $3 million, 100% within his means. And two, you could call him out and say, hey, look dude, technically you are making more money, but they are investments and it's not exactly starting a new company, so I'll give them a pass. There's one thing, though, that I do want to challenge Jeff on. Remember earlier when he said this.

[00:29:59] Jeff: I always had a number in mind. I thought if I had 10 million, I'd be square.

[00:30:02] Sam Parr: Although, to be fair, he did follow up with this.

[00:30:05] Jeff: So of course I secretly was wishing for 20 because that's what we do.

[00:30:08] Sam Parr: But then after that first check of $21 million, Jeff didn't stop. He kept going and he kept earning more. I bring this up because he said something else interesting when I was asking him about his monthly spend.

[00:30:19] Jeff: Could I come up with something that I wanted to buy? Would I like to own a sports team in a private island and whatever else? I don't know, maybe. I think I'd rather rent it effectively. I can do anything I want to do, and frankly, I could do anything I wanted to do with that original goal of 10 million.

[00:30:33] Sam Parr: And so I did some math. And if he kept the 3% rule, which is spending 3% of your total liquid net worth, that's around $300,000 a year. However, Jeff's spending like $3 million a year and $300,000. That's only 10%. But 3 million is what he said he likes to spend now and that he's really comfortable with that. So I pressed him on it, and here's what he said.

[00:30:54] Jeff: If you own your house and you know you don't have any debt or major obligations, that's a pretty good lifestyle. That may be a little on the low side. The stress and the friction in life comes from the gap between what you really want and need and who you are. Which for me, maybe it's 4 or 500,000 a year and what you have. So when you have nothing and you want to spend 400,000, that's painful. When you have 100 million and you're really sort of comfortable spending 400,000 a year, it's a weird spot, and I can hear the eyes rolling in your audience, and I just want to pause and say, anyone listening that says, this guy is a total asshat, hand me the 100 million. Get out of the way and let me show you how it's done. To anyone thinking that I don't blame you, because I would have thought the exact same thing ten years ago. But I'm telling you, it's harder than you think.

[00:31:45] Sam Parr: Even though you say that you have enough, do you still have? You know, a lot of people. I've got friends that are worth hundreds of millions, and they say it's still not enough. Do you still ever have those feelings of inadequacy compared to other peers, or to this is nothing compared to what I could have or things like that.

[00:32:02] Jeff: I do not have that. I don't suffer that one. I have enough, which is the perfect amount of of money to have.

[00:32:09] Sam Parr: Is there a number that you think you crossed where it was like that? That was it.

[00:32:13] Jeff: Yeah, I think it was 20 million. Honestly, I think it was 20 million. And don't get me wrong, I'm I'm a money hound. And if you said, hey, would you like to have an extra 100 million, I wouldn't, I wouldn't shut the door. But I'm not going to spend the mental cycles to pursue that next comma or that next digit 20 million.

[00:32:29] Sam Parr: That was enough yet. He's worth 120 million. I asked him if he could return to that initial point, that initial $21 million check, and offer some advice to his younger self. What would he say?

[00:32:42] Jeff: First, I would tell myself, you're going to go through some stuff here and you're going to miss the structure and the purpose that you had in your life that you were trying to get rid of, to get to the money and the spoils, which is actually the scaffolding that was holding up my life. That was one. And then the second thing would be I would ignore what the world tells you, which is go do it again. Go be an angel investor. Go do nonprofit work. Buy a bunch of stuff. Play golf every day. For me, it's just not fulfilling. It didn't work.

[00:33:10] Sam Parr: Now I know it can be tough to let go of that pursuit for the next digit. That desire for more tends to get stronger, I think, as you grow your wealth. But while Jeff used to get caught up in the numbers, he shifted to a new metric for life.

[00:33:22] Jeff: Rather than your scoreboard being money. I think the ultimate scoreboard is energy. If you can have energy for what you're doing, most of the time life is good. And it doesn't matter if you're flying private or economy if you've got good energy. When I go to bed at night, I run this routine that says, like, is today a rewind day? What? I want to relive this day again at some point in the future? Or is it a skip day where, just like, you know, it was okay, but I just I'd rather not have this day again. And if you get too many in a row where it's a skip day, you'd rather not rewind. That's where I normally for me is energy based.

[00:33:58] Sam Parr: Frankly, I think that's a much better metric than adding commas to your network. Because, look, no matter how much money you make, life is still life.

[00:34:07] Jeff: You have this vision, right, that you're going to be jetting around doing cool shit in the, you know, hanging out in the winner's circle of life. But it's just it's not real. Most people are back at work. The vacation is great, but I mean, can you eat a hot fudge sundae every meal for just the meal? You know, eventually it's like, I gotta have something else. It's a challenge to replace the things that you think you want to get away from are actually holding you up.

[00:34:32] Speaker3: I swear you're the gold. I've been running for on it like I woke up in one the top rock.

[00:34:39] Sam Parr: I love talking to Jeff. Not because I really see myself in his situation, as in, I actually like working. He didn't. I do, I think maybe my taste may change, but right now I love doing stuff, I love building, I love having teams. I love all of that stuff that comes with business, and just so happens that the output is money. But what I loved about Jeff is that he was so purposeful and present. He acknowledged, this is what I want, and he went and lived his life that way. I think the takeaway here for anyone listening, whether you have a lot of money or you don't, is to sit down in a quiet room and write out what you think you want and put numbers on it, and put a timeline on it and go after it and get it. And if you're like Jeff and you don't have to work, then your goal should be, look, I'm not going to commit to anything major right now, because that doesn't make me happy. If what you want is more money and you think that will make you happy, which who am I to say? Maybe it will. Then you should actually say, how much money do you want? How much time are you going to give yourself? And what are you going to do to get after it? And you go and you do that thing. I love people who say, this is my path and I'm going to get after it.

[00:35:39] Sam Parr: I also love talking to Jeff because there's so much more to life than business. I find myself getting sucked into this trap all the time of thinking about business constantly. And Jeff's story is a good reminder that after a certain point, it's just not that important. Maybe it's the number three or fourth most important thing in life, behind family, your health, and a few other things. But it's just awesome to talk to someone who's actually more well-rounded. And so I was really inspired by Jeff to just focus on not getting more money, but to figure out how to live a better life. And so I want to know, what do you think? I'm on Twitter at the Sam Parr. Let me know what you thought about Jeff in this episode. And of course, Jeff said something interesting. He said he has a group of founders who he meets with. That's such an easy plug for me here. I gotta plug Hampton, check it out. Join Hampton if you run a business, if you are the CEO of a business, if you founded a business, you guys have to check this out. It's a company that I run. It's a community. And here's how it works. You go to the website, you apply. My partner and I, we watch 100% of the interviews from the people who have applied, and we are the ones who are in charge of letting people in or not letting people in, because we want it to be a super high bar with high quality people.

[00:36:49] Sam Parr: Once in, you're assigned to a group of eight people who have similar size and types of businesses that you have, and you meet monthly with them to have all types of discussions on these really, really sensitive topics that you can't Google, you can't find anywhere else. We also have hundreds of events throughout the year, and we have a digital community where you can talk to a thousand plus other members, and you can have these types of conversations that I'm having with guests on money wise. So check it out. Join Hamptons.com. Of course, I also have to give a shout out to Lower Street. Lower Street is the firm who I hired to make this podcast. I've said many times this podcast is a challenge to make, but what I say is it's not actually hard for me because Lower Street has done all of the work from helping me find guests to producing the podcast, which means editing it and all these complicated things that I don't understand. These guys make it so easy. They've made my life so easy. So if you're a company that wants to make a podcast, check them out. Lower street wise. All right. We'll see you guys next week.