Transcription
So, are you in the camp that you shouldn't spend money on the small things like the coffee? If you don't need it, you should make the coffee at home. Is that kind?
I, I just, I can't stand it when I see kids that are making 70 grand a year spending $28 for lunch. I mean, that's just stupid. It's just think about that in the context of that being put into an index and making 8 to 8 to 10% a year for the next 50 years. What's an index for someone that doesn't?
So, okay. I mean, you know, I even have it. I even built an app for this purpose just so I could. There's many apps out there. You don't have to use mine. Mine's called Bean Stocks. But you just allocate 15% of your salary and it automatically puts it into two buckets. Some stocks and some bonds. The stocks are ETFs, exchange traded funds that just track the S&P 500. Very simply. Mine's a little...
The S&P 500 is the top 500 stocks.
Yeah. And so, it's just, you know, people that tell me, "Oh, I can beat the S&P." Back and pick stocks. They're so full of crap. Not over the long period they can. So, it's better you might as well just own ETFs. I have a version of the S&P that I designed with other people that strips out all the crappy balance sheets. But that's just me. You can just buy the index that you want. You know, the ETF and then you pay low fees and then over time it appreciates and then if you buy some treasury bills or what fixed income, you get that. You should have less of those when you're young and more of them when you're older. That's just diversification.
But you, you know the best test I do with my kids' friends too. Go into a closet. Go into your closet and look at how much [ __ ] you have you don't wear because you either bought it because you thought you were going to wear it and never wore it or wore it once and you end up wearing 20% of your portfolio all of the time and 80% you, you pissed away. I mean, that's really stupid. And so for a young person, a young woman or man, don't do that. Start putting and just buy the minimum stuff.
And another thing I learned from my mother, this is interesting because I saw it happen at her death. She, you know, would buy two Chanel jackets a year, really expensive Chanel jackets, handmade Chanel jackets. I do business with Chanel because of, you know, the legacy of my mother and the whole Coco Chanel thing in watches. I love those guys. And her theory was this will never get old and it never did. A classic vintage Chanel jacket from the 50s that's well-kept is worth a fortune today. The classic, it still wears beautifully. They're so well made. So she wouldn't buy crap. She'd buy really good stuff, but a little, just small amounts of it. And over the years, she'd built up this portfolio of amazing clothing. And and when she died, the women in in our family had a cat fight over her portfolio. Unbelievable.
Is that in part why you have so many watches? I've noticed you have a watch on either wrist right now.
Yeah, I'm pretty big in watches. I mean, but but watches to me, every piece I have marks something in my life that was important. A deal, a child, graduation, um, you know, something. Every piece. I've got a lot of watches.
How many have you got?
I, I don't even say anymore because of the insurance policy I have. I got a lot. Do you invest in? You're talking about your your mother's investing strategy and one of the things you said is she invested in dividend stocks?
Yes.
What is a dividend stock and should I be investing in dividend stocks?
Yeah. I mean, you know, a company if it's profitable and it's operating, it business plan is working and it's growing market share at some point says, "I'm going to distribute some of the success of our profits to our shareholders." That's a dividend. And so, they send that cash to you and you can either redeploy it in other ways or live off it or whatever. Many tech stocks until recently did not pay dividends. But now the behemoth tech stocks do pay dividends because the demand of an aging population is I need to eat and so I like to own the stock for growth but I also want to get some of the profits and so dividend paying stocks uh used to be utilities uh but not so today. Every every sector has dividend paying stocks. So I prefer to own dividend paying stocks, div payers, and then I also own fixed income products. I also own crypto now and I own alternative assets like gold and watches. My watch collection's actually done quite well even though there's been a correction. There's volatility, but I have some watches that have, you know, I bought for 200,000 that are worth over a million today.
Crypto. So, are you still bullish on crypto as an investment?
Yeah, I am actually, but people get crypto confused with its real potential. Um, uh, let's talk about digital payment systems because what's about to pass first, where are days away from this happening, is the Genius Act, which is actually the Stablecoin Act. It was just passed by the Senate 48 hours ago. It's going back to the House. I, I actually worked on that bill two years ago. So if that bill passes, it's really nothing to do with speculating on crypto. It's a new form of payment. So, if I wanted to order a watch in uh from Simone Brit, who's somebody I buy watches from. He's a master watchmaker. Right now, I have to take US dollars, I've got to get through a know your client um prerogative. Um, I'm treated like a criminal by transferring $100,000 over, turn it into Swiss Franks, takes about a week. I get screwed for about 200 basis points and the whole thing. If I, if he accepted USDC, which is actually a stable coin backed by the US dollar, just went public, very successful IPO. I was a shareholder in that company, too. That's one of my best IPOs in the last two years. The transaction would happen in less than a second and the fees would be a hundth of what the costs are right now. So it's a digital payment system. The price doesn't, it's not no speculation on it's backed by the US dollar treasury bills. So it's sort of a new form of of digital payment. That's different than Bitcoin, which is a speculation. It's if you believe in Bitcoin, you think it's a digital gold and you live through the volatility. I believe in both. I believe that that crypto will be the 12th sector of the S&P in some period of time because it provides productivity to all 11 other sectors. So the way I own it is I own the exchanges. My exchange in one called Wonderfy up in Canada just got acquired last week or two weeks ago by Robin Hood. I'm happy because I think Vlad, who runs Robin Hood's great and now he's got a million plus accounts in Canada and market that he'd never participated in. But the point is this is never going away. It's going to stay forever. So how do you participate? You can buy some Bitcoin, just like you can buy gold, buy it an ETF or actually own it yourself. You can buy the exchanges. You can use um, you know, you can buy Circle stock now, it's public. You can, Circle makes USDC. You can buy USDC in in an account and make 4.1% interest on it right now. So, there's a lot of ways to participate, but yes, I'm here to stay, but I've g I've grown up. I was around during the period where the crypto cowboys lived and and I survived that all and I even testified in front of the Senate and the House and whatever else the testimonies were during the the tumultuous period. And most of those guys went to jail.
Do you think Apple is dead?
No. You don't?
No. I'll tell you why. I'll tell you why. You know, it's so interesting. uh people don't understand the genius of Apple because this is again came from Jobs. You know, he used to say to my team over and over again, and I mentioned it earlier, they don't know what they want until I tell them. And I always just, just as close as you and I are right now, you're Steve, say, "Steve, how the [ __ ] do you know that? How do you know that you don't know that you don't know what you don't know?" He said, "Show me where I'm wrong. Show me one instance of us working together. I'm wrong." I said, "It hasn't happened yet, Steve. Doesn't mean it won't. Get back to work. Don't worry about it. I'll worry about it. You make the software. I have the chips. Make the software. Go make the honey. I have the queen bee. Don't worry about it." And that is pretty interesting because you got to prove it that he was wrong. Let's take, let's accelerate. He's dead now. But the philosophy of Apple and I'll give you the, the way you win at, you look at it. I can go buy a $330 laptop right here with the same processing power of this $1,800 Mac laptop. Why would I been spend 1,800 when I could buy this for 300? Why brand? [clears throat] I want to be part of this universe. This honey right over here, the Apple Care, the fact that the OS works on all the platforms and the messages are shown on all platforms simultaneously. All the OS, all the honey, that platform is the power of brand. It's I'm not leaving this universe. And Apple is one of the world's largest companies. And you may say, "Oh, an innovation is going to make everybody leave that platform." I don't think so. They let other people sometimes bring in a new market and then they take it over. And I saw Steve do that multiple times. He did it um with the phone. I was around for that. That was crazy. I mean, he had the vision that we would someday run our software on the phone. I said, "You're out of your mind. It's the screen's too small." He said, "No, you're going to go vertical. You're going to rewrite all this crap vertically." I mean, I can't fault him on anything. Although I kept telling him, "You're going to get it wrong one day. You're not going to be right all the time." I can't find when he wasn't right. That, that's that's the frustration because I teach this, you know, to a har bunch of really smart kids at Harvard, of which, by the way, a third are international students, and they say, "Well, when did you catch him?" I said, "He didn't..."
What was he doing? Did he have a practice or or principles that allowed him to see around the corner?
He spent a lot of time at night um, you know, even studying fonts and looking at art and um focusing on the signal. I think his wife talked about that a lot. He, I mean, she spent more time with him than anybody else. Although W talks about a lot because those guys spent countless hours together. And but but Jobs defined, he would take instances from nature into his head or from Japanese, you know, scripture or text or imagery and redefine it into technology in a way that no one else was doing. And that's the idea of the honey and the bee and the queen and all that stuff. It kind of comes from his view of the world. And I don't know if you can understand this, but because it was so, it came from nature, it was easy for people to assimilate it. It wasn't foreign. When they looked at the imagery and the design, he, he tried to pull from from pleasing images from nature, like the fonts on the first Macs. I remember when we were writing the code for that saying, "Steve, this is not what people are used to seeing on a computer screen." He said, "No, it isn't. That's why it's going to work." He, if you think about the very first scalable fonts, I saw that first and I said, "See, this is, this is almost foreign." He said, "Well, how's it make you feel?" I said, "It makes me feel pretty good. This looks like it's on a piece of paper." If you, I don't, you weren't even born when this stuff was happening, but it was, he was so far ahead. And this is the same way Elon is redefining whether it's, you know, SpaceX or whether it's what he's doing in neurosurgery or Tesla or, you know, all of these initiatives, uh, you know, his satellite technologies. They are the same. Those guys, except, you know, Elon's 100% signal. I said that earlier. They are the same and they should be their treasures, their national treasures. It doesn't matter if you like them. It doesn't matter what their politics are. It's irrelevant. The contributions they're making to society and to America, frankly, and the competitive competitive nature of of of countries. That's why I thought it was so important that Trump make up with Elon. The the most powerful man on earth should have a a very good relationship with the most the richest man on earth because he's the largest industrialist on earth. Maybe there's like an inherent inability by way of them being who you just said they are the most powerful.
But they know they're smart enough to know. It's the same way I felt about Jobs. I'm getting back on the plane this quarter. I know he's going to beat me up, but it doesn't matter. It, it's the greater good is that we get this software out there advancing math and reading scores.
Was he happy, Steve?
I don't know the answer to that question.
Do you think he was a happy person?
I don't know. He, I've never, I never saw him happy. He was always barking at me. I never saw him happy. I don't think I ever saw him laugh. I don't, he may not have been, you know, that, I mean, that's probably something his wife would know, but he looked like a tortured guy to me, but um, you know, that may have been his curse. I, you know, some, some you...
Do you love him?
Yeah.
I can see it in your face.
100%. I saw a lot of emotion in your face the first time you spoke about him, and I thought, that's surprising for someone that barked at you.
Well, he respected me, that's for sure. He wouldn't execute on my ideas. He expected me to execute on his, but he was never wrong.
Where did the emotions stem from?
Oh, you know, it brings me back into that room with Heidi Rosen and all the crazy crap. I mean, it was just nuts. And you know, the, you know, I'd have to spend a lot of time. The only, the only meeting I really remember um, the, the one that's really sticks in my mind when we were in Certino and we were just, I think I don't know, we were going after him for $1, 18 million or something, and Heidi was there.
Who's Heidi?
Heidi Rosen. Um, she's a famous um, venture capitalist, but she was also kind of the muse, the person that could actually deal with Jobs all day long at Apple and bring him back to Earth when he was out of his mind. I'll give you an example of how that would work. And I've seen her since, you know, it's, it's, I don't even know if she remembers this particular. Anyways, we leave. He's barking at me. He's, and he's got one of my product managers in tears because she wanted to do the market research and he said, "No way. I, we're just going to do what I say." And she just felt like her job was useless. And and for him, it was. I mean, he just didn't give a [ __ ] what she thought. Although she ran the universe of Oregon Trail or something. It's a massive title, like a huge multi-million dollar title on the Mac in every 110,000 schools in America. And he, he was so pissed that, you know, in these old buildings, they have the little window where you have a little knob and it only opens up four inches so you can't jump out of it in a hotel or something. So we were, we had a Hertz rental and we're the whole team's going out. I'm going to drive the car back to San Francisco. I'm going to fly back to Boston. And he, he undoes the window and he's got his head stuck and there's yelling at me from from [laughter] I'm looking up [laughter] at him saying, you know what the [ __ ] Like what? Like what, what more can we, we, you already kicked us out, you know? And then on the way, we had these old brick, the earliest cell phones, these brick phones. Heidi calls me, says, "Okay, he'll do it for 12 million." I said, "Heidi, why do we have to go through all that [ __ ] Like, why do we even have to get abused?" She said, "Why is the sky blue?" You know, just get back on the plane and go do it. It was a huge hit. Like it just, you know, it's a huge hit. Like it's just the guy was, if you looked at it like uh, he, he, he could, he could write the hit songs. That's what he did. He wrote the hit songs. So you don't even if you hate the producer, you want the the guy that can do the hit songs, right? If you're an artist, you put up with a crazy producer.
Could he not have been nice? Do you think?
Not in his DNA. [clears throat]
No. Do you think if he, he was a nice person, he wouldn't...
You know what he would say about that? That's noise.
He gives a [ __ ]
Yeah, he doesn't give a [ __ ] Noise. Being nice is noise. That for him. I mean, we spent a lot of time talking about him, but I think there's a lot of lessons learned from him that I think managers today, parents today, certainly CEOs today, uh, you know, you're about this show is about CEOs. Um, I wish every CEO had spent the time, the minimal time that I spent with Jobs, had such an impact on me. I mean, it, it, I, I owe a lot of my success to him because I think I always think, "What would Steve have done?" And I make decisions like that. It's amazing. The guy's still around. I bet you if you talk to, you know, any of the management at Apple, they, they have that ghost in those rooms for sure, including the current CEO, who I think was doing a phenomenal job. He, he spent so many hours with Jobs. He knows exactly what I'm talking about. Nobody spent more time in business than that guy for sure.
I asked you a second ago if Steve Jobs was happy, but are you happy?
I get happier the older I get because um I've I'm very comfortable. I found a place um, you know, uh, that I'm, and I, this may be just what aging does. I mean, it just, you know, in and when I was in my 30s, I had a lot of trauma and turmoil and and just, you know, um, hard time to find trying to figure out who I was. And I also suffered from dyslexia, which I've come to think of as a superpower now, not an affliction. But it, it was kind of like it's hard to know what journey you're going to be on until you find it. And then I found it. And then I started on a new journey and and, you know, it's um, it's something where, you know, you ask yourself every day goes by and, you know, this the noise and signal thing and how much of this day was I happy doing the things that I wanted to do? And I am very happy. If, if I measure it by, is there anything that I spend my time doing that I don't want to do today? The answer is Well, because I don't have to and so I don't waste my time. I do, you know, even coming here to spend two hours with you. When I first, you know, heard about it, I went online and said, "Oh, yeah. This guy, this guy's great. I'd love to work with him." You know, that kind of thing. You, you allocate your time. This is, this is I'm happy to do this. I want to be here. And I think, you know, we had a very interesting couple hours together. But that's the definition of happiness. What concerns me, and my wife often says to me, "We don't need any more money. Why are why are you flying 300 hours a year on an airplane? What are you doing?" I said, "I'm happy." Like, you know, I'm, I'm happy doing this. I want to do this stuff. You know, I sometimes I do five cities in a day. It's faking crazy. And it's the wonderful thing about, you know, air travel today. You can do that. But it's...
It's sport for you. It's, it's, it's so interesting. I get so many interesting opportunities. I can't turn them down. They're just such...
You know.
Are you driven or are you dragged? You know, you use the word trauma there. And I often ask myself that question because I, I came from an all-white area. I was the black kid with the strange hair and the strange family. I was insecure. And I think that resulted in this, this force of will to try and correct the insecurity or to prove something to myself, which then resulted in success.
I, I think there is no drag. There's only driven. I don't understand being dragged. Dragged insinuates that you don't care about performance. You don't care whether you succeed or not. You're just being sucked into the void of success. You might be able to say that for a rock star that gets a hit song, but um, most of them doesn't last. I, you need massive amounts of of drive. And I love the most, the most exciting thing I like to do is when someone tells me, "You can't do that." Like, watch insurance. "You will never launch a watch insurance company. It, you will never get around the compliance state by state. You will never launch in the Middle East. You'll never launch in England." [ __ ] That's exactly what I did. I found the right team. I found the right partners. I figured it out. I, I was passionate about it. And I think I'm going to kick ass. I think I'm, I think in two or three years from now, you won't be able to catch up with me. That's what I think.
I'm 32 years old. What, what is the advice that you wish you got at 32 years old?
Kevin, what I have learned, and this is something that you should really think about for yourself. Your real value, your real brand are your followers. This army of people that have decided to invest their time in you. You know, you've cut across a a vast swath of people. So you influence very successful managers, CEOs, and a lot of young entrepreneurs want to hear what you have to say because they, they're expecting you to deliver valuable information across multiple sectors. And you also have your own data, but men and women. And so where do you take that? Because you know it's, do you want to launch a clothing line? Do you want to sell burgers? Do you want to do consulting? You know, it's, you have all those opportunities, but what fits your brand? And so, I have, and you'll get to do this. You'll get to do this. You'll be approached by a lot of people that want to ride that network you've built. And my advice to you is, because this has really worked for me, is is this a product or service that I personally would use? That I would actually use? Because you'll get offered a lot of money to talk about one brand or another brand. They will. And you may be weak and take it. But the minute anybody in your network, in your community thinks you're not authentic, you're [ __ ]
And you know that.
Yeah. If you love the D CEO brand and you watch this channel, please do me a huge favor. Become part of the 15% of the viewers on this channel that have hit the subscribe button. It helps us tremendously and the bigger the channel gets, the bigger the guests.