24 rules of investing these are all Structured as if then statements if we Learn a principle then we can continue To use that winning principle over and Over again the reason some of the Greatest investors publish books about Their principles is because they know if People make the right decisions they get The right outcomes over a long enough Time Horizon my abduction and I make These videos because I hope that if you Have a 3 million to 100 million dollar Company you'll ask us to invest in it And we can help you grow up If you can't buy it twice don't buy it Once and realistically probably three Four five six times when I got into Investing I used to think oh I'm going To put like a third into this they're Like dude no your biggest allocation Might be 10 oh if you can't buy twice Don't buy once If you're worried about it you can buy Insurance for it you can get insurance On anything For example people like I'm afraid of Running out of money you can literally Buy money for the rest of your life you Can literally give money and they will Have a guaranteed income until you die Which are called annuities so if you Have a specific concern just buy Insurance for it and know that it's Covered
If a deal feels like a grand slam get a Second opinion whenever I'm looking at Something and something looks amazing I Automatically send it to other people I Must not be seeing something like I need Someone else's eyes on this it's a good Easy decision making rule for yourself For investing If you don't know how you can lose money Don't do it until you do there's always A way to lose money in the deal and you Not only want to find a way to lose Money but you want to find all the ways You can lose money in the deal right We're always controlling for the unknown Or the unknowable we want to minimize That the highest degree possible so if You don't know how you can lose money Don't do the deal until you do If it feels rushed don't do it a lot of People will try and apply pressure to You they're trying to say like hey do This deal with me hey give me this money Hey can you lend me this thing if Someone tries to pressure you pause if You feel rushed don't do it If you only have one deal on the table Don't do the deal always have backup Deals imagine you're dating and there's Only one girl on the planet you're gonna Find a way to think that that girl and If you know your gender's reverse flip Right whatever you know what I'm saying There's only one person on the planet
Then you're gonna find a way to make That work and so it's kind of the same Thing with deals if you only have one Deal on the table you're going to keep Telling yourself man maybe this is a Good deal because you have nothing else To compare it to you always want to have A plethora of options to choose from and Until you get those many options to Choose from don't move forward because What happens is you artificially make That girl look a lot better or that Person or that deal looks a lot better When there's nothing else compared to If you buy with the intention of selling You're not investing you're trading Investing is about very very long time Horizons it's a whole different set of Rules where you get in trouble is where You're trying to apply business stuff to Investing or investing stuff to business Like they are different skills to master If we don't agree we don't do it this Comes into play when you have a Partnership this has saved me so many Mistakes because I'm usually the Yes man I tend to see more upside and less Downsides most entrepreneurial people Are that way because we have to be Because if we actually focused on the Likelihood of success which is usually Low for most entrepreneurial things you Would never get started it's good a to Have a partner who balances that b they
Actually have to balance it if they're Just a Yes Man and they always bend to Your will then they're not actually Providing value there's a reason yin and Yang are equally weighted in the symbol If you don't agree don't move forward Even if I have decision-making Authority I still won't move forward until we Agree as a tangent into marriage stuff We get asked this all the time they're Like well you know push comes to show Somebody has the upper hand honestly no We keep talking about until we agree we Don't make the decision until we both Agree and it's been one of the earliest Pieces of advice we got and it's been One of the ones that paid us the most Dividends If it's complicated pass if it feels Above your head it probably is people Want to feel fancy they want to get into The room they want to do these deals but If you don't get it you're gonna get if you have complete Understanding of something the risk goes Down because you understand the Variables you're barely catching on you Might as well be gambling which is not The way to invest Fomo means slow down so if you feel that Emotion you're like I'm gonna miss out On something slow down this is a Decision making variable when you feel That emotion slow down these are
Principles you start flexing these like Muscles if this then that if this then That it preserves your ability to make Better decisions over time and if you Apply all of these things to all the Decisions you make you will have outside Returns over a longer time Horizon No diligence no deal if you don't get The information you need to make the Decision you don't make the decision and I know this sounds ridiculous but many Of you do this you just go off the hype You go off an email or a phone call get The information you need No model no deal if someone doesn't send Me their proposal for how something's Going to grow or how something's going To improve or how they're going to add Value and there's no deal I don't want To hear a story of it I want to see the Math behind it I want to see the Projections and then when I look at Those things I can make the decision Like is this reasonable what assumptions Is this based on do I think those Assumptions are reasonable or probable And what information can I bring to this Decision what are the things I need to Believe that have to be true for this to Occur If someone's non-responsive No Deal Communication is one of the most Important things when you're doing any Kind of business in general and I judge
Someone very quickly on how meticulous They are in their responses and how Quick they are to respond in general now If someone says hey I received your Email I'll get back to you in two days And then they get back to me in two days That's fine it's about expectation Setting and expectation meeting I expect Especially in this process where I'm Just getting to know you what you say is Going to happen is going to happen it's One of the easiest ways to build a Reputation is do what you're going to Say say what you're going to do and if Someone's not doing that with you don't Do the deal If it costs peace of mind don't buy it So if anything costs me my sleep or Something that I'm worried about as a Result of me making an investment or a Purchasing decision I don't buy it Because the cost is too high If it doesn't build your reputation Don't do it no neutral moves your brand Personally your reputation is the one Thing that you take with you forever and You absolutely can lose it and it can be Irreparably damaged I'd only do it if it Fills my reputation when we do that we Continue to reinvest in our reputation In our personal brand which gives us Compounding returns over our entire Lifespan in terms of relationships in Terms of literally Financial return in
All other aspects of Life only invest if It builds your reputation if it doesn't Build don't do it No track record No Deal performance over Charisma the best predictor of future Performance is past performance sure They have a model fantastic oh they're Allowing us to do diligence great oh They're being very responsive phenomenal But if they have no track record Might they be successful yes but if I Invest in every deal that doesn't have Track records is that a good way to Invest probably not like Napoleon like To say I'd rather have lucky generals Someone's gonna probably do their deal It doesn't have to be you If it's the same thing you've always Done well with do more of it we as Humans or entrepreneurs we like having Variety the thing is is that a lot of Investing a lot of compounding comes From doing more of the same thing so It's like hey man I've done three hard Money loans and they've all been awesome It's like well then you should probably Consider doing a fourth rather than Starting to get into crypto day trading What happens is you start to build your Own track record and so you can start Looking back over your shoulder be like Okay let's look at all the things that I've done these have been the things That have worked well maybe I'm better
At this stuff and so that's the idea Once you find something you're starting To get good at do more of it because the Thing is is that your luck will improve The more you do Always under borrow any number no matter How big it is multiplied by zero is Still zero I tend to be very risk-averse When it comes to debt debt introduces Risk into any equation if you are going To borrow then under borrow so even Though you could juice your return by Getting more remember that there is a Likelihood over a long enough time rise In that if you over juice on a Consistent basis you will get zero Always under borrow then you won't make As much money but you won't lose it Ask stupid questions Define terms draw Pictures see examples and if you can't Draw it back you don't get it I start Every single call when somebody's gonna Bring me something I'll be like pretend I'm a golden retriever that doesn't Speak English walk me through this There's no advantage to somebody Thinking you know more than you do not But there is advantages to you knowing More than they think you do always play The fool If we're not in the GP we're not in the Deal once you have 10 20 you know 30 Million in investable assets just say I Want a part of the GP I don't know what
The GP is it's General partner limited Partner the people with General partners Are basically the people who run the Thing so they get an exercise to the pie Versus the limited partners who actually Invest the money we only do deals that We're part of the GP because I want to Make sure that we have a part of the People who are really running this thing If it's a bad person it's a bad deal Layla has an impeccable people picker It's unbelievable my entire Relationship's never been wrong and it's Why I've been wrong all the time I'm Like this guy's great Layla's never been Wrong bad Partners doesn't matter what The paper says don't do it there are so Many reasons you should not do a deal You should be saying no way more than You should be saying yes No contract no deal this is a really Important one for me gotta have Contracts for everything contracts serve The purpose of setting clear expectation What happens if you lose all my What happens if you don't do what you Said you're gonna what happens if I Don't do what I said I was going to do What happens like you got to walk Through that if you can't walk through In the beginning you're definitely not Going to walk through it when it Actually happens and anyone who says I Only do handshake deals I don't do
Contracts run the other way not once has Someone approached me that way and they Not being unbelievably Shady if there's Anything you get for this video if Someone says I don't believe in Contracts be like I don't believe in Dealing deals without contracts sorry Clear expectations good If you're the one people are doing Business with I like to pretend like the Contract doesn't exist you absolutely Want to be clear when you're writing the Contracts and the terms but then as soon As that process is over live as though The contract doesn't exist negotiate it As though it's the only thing that Matters let's say I have a Services Relationship that's a year-long I want To mentally think even though they've Committed to a year I'm only week to Week they don't have to pay me next Month if you go on the defensive when You're Contracting but you go on the Offensive when you're in delivery you Kind of get the best of both worlds
