Sam Marks on Building a $100M Exit and Learning to Invest Like a Boss – EP 59

December 9, 2021

Interview with Sam Marks

Sam Marks on Building a $100M Exit and Learning to Invest Like a Boss

Today, I’m speaking with Sam Marks. At the age of 24, after some early setbacks (including 4 arrests while in College) Sam moved from the US to the UK and founded the e-cigarette company, SKYCIG. He bootstrapped the company initially out of the back of a rental car, and grew it into Europe’s largest e-cig brand in only 4 years. In 2013, the business was acquired for $100 million!

Sam had all this money, but no idea what to do with it. He gave 40% of his earnings from the sale of the business to a financial advisory team to manage—later realizing they were losing him money, even when the markets were up. He felt manipulated, duped, and frustrated by the entire process.

He decided it was time to take control of his money. Despite having zero investing experience, he started the Invest Like a Boss podcast, so he could interview and learn from the most experienced investors in the world—while also passing that knowledge on to others.

Sam is now an angel investor, serial entrepreneur, and his investment portfolio includes 400 self-storage units in Hong Kong, a microbrewery in Australia, rental properties across Thailand, and several early stage startups. He’s also visited more than 100 countries while living off passive income and pursuing his bucket list.

In our conversation, you’ll learn about Sam’s entrepreneurial journey, what it was like to negotiate and secure a $100 Million acquisition deal, and the passive income investments that allow him to travel the world and live life on his terms

Featured on This Episode: Sam Marks

✅ What he does: Sam Marks is an entrepreneur and investor. After a big exit from his e-cigarette business, he didn’t know what to do with his money and was intimidated by the world of investments. He handed over the reins to an advisor but wasn’t seeing results, so he decided to take control of his investments and start learning through his podcast, Invest Like a Boss.

💬 Words of wisdom: Sam was disappointed when he didn’t see returns on his investments for two years while working with an advisor. After reading an inspiring book, he decided not to wait any longer. He started a podcast to hold himself publicly accountable for learning how to invest.

🔎 Where to find Sam Marks: Website | LinkedIn | Instagram | Facebook | YouTube

Key Takeaways with Sam Marks

The early setbacks that led to Sam’s entrepreneurial journey
How Sam’s various side hustles led to building an e-cigarette business out of the back of his car.
Negotiating a $100 Million acquisition deal—and the problems he faced along the way.
Why even the most successful exits are often a negative experience for entrepreneurs.
Why letting an advisory team manage 40% of his earnings lost him money and ended up being a really horrible experience.
Foundational investing principles you need to understand in order to master your money.
How Sam diversified his portfolio and built a lifestyle around his investments—including residential property in Thailand and 400+ self-storage units in Hong Kong.

Clips from the Show with Sam Marks

Episode Highlights

The experience is worth the complications

“It was an incredible experience: day one to year four. I mean, it all happened very quick. We never had venture capital, but it literally started out of living in a car, selling and marketing the product out of a car. And that full cycle up to living in a hostel, to our first office, to having an actual decent apartment and not living off bread and noodles, to hiring staff. And there are so many complications along the way, but it was just an incredible ride.” – Sam Marks

A payout might not be the dream you expect

“What I realized was that it was all about the journey. All the highs of building the business were, in fact, building the business. And, like you said, the payout at the end, it’s almost like a paradox where I had this expectation that there was going to be a rainbow full of happiness. It just got sewed into me and I would never look back. And that wasn’t the case. So, it really took me for a bit of a spin.” – Sam Marks

Feeling vulnerable with your own money is no way to go through life

“The most frustrating part was that I would go into these meetings with my financial advisor and nothing made sense to me. I felt like I was being manipulated. I felt like I knew what was going on but they were saying something different. I was very intimidated by the process of meeting with them in their corner office, in their nice suits, and these older gentlemen that were speaking all these words I couldn’t understand. And I just thought to myself, This is no way to go through life, that I have to feel this vulnerability with my money. And I know I’m paying them something, some type of fee. Yeah, they said they’re going to make me 8% and they’re going to take 1%, and it seems like a good deal — but they weren’t making me 8%.” – Sam Marks

Keep yourself accountable with a public commitment

“I thought, I know nothing about investing, but there are so many people out there that know nothing about investing. So, the best way to do it would be to start a podcast, force myself to learn by putting myself on stage in front of an audience with talented investors and making it look like I know something like I know what I’m talking about. And that was really the decision to start the podcast.” – Sam Marks

Don’t be afraid to redefine your goals

“What’s actually my goal? My goal is what is most people’s financial goal … Generate enough passive income to be able to support your lifestyle. But I got to that point and I realized, Well, this kind of sucks because now I feel like I’m living paycheck to paycheck, right? And then inflation seems to be decreasing my net wealth. So, what’s better is to create enough passive income to be able to live my lifestyle while still increasing my net wealth and having a surplus. To be able to invest in really interesting things, whether lifestyle or investments.” – Sam Marks

Always look for low fees

“You don’t want advisor fees because those are killer and usually are not productive — like 1%, 1.5% — but also mutual funds. A lot of mutual funds could charge you 1-1.5%. So, between an advisor and a mutual fund fee, you can easily have 2-3% in fees. Now, if someone’s making 8-9% a year, they might say, ‘Whatever. It’s fine,’ but no, that’s horrible. Like over the course of 10 years, that is massive amounts of money.” – Sam Marks

You can’t beat the market by hand-picking stocks

“You never want to pick stocks. You always want to be diversified broadly. Very few people can beat the market by picking stocks — even the best money managers. It’s a bad idea. Most people do it, including me. I just do it to have fun. But generally speaking, it’s much, much better just to be in the market. And historically, you’re going to be fine if you’re just in the market. When I say the market, just the S&P 500 or a total stock market index.” – Sam Marks

Make investing fun and adventurous

“I’ve tried to orient my lifestyle and investing to be a pair. A lot of the investing I’m doing has a lifestyle perk to it. And there’s a bit of an adventure to it, so it’s not strictly the gain or the cash flow, but it’s how can I build a lifestyle around investing and have fun while doing it and have some adventure. There’s a book called ‘Adventure Capitalist’ that was extremely inspiring to me, where the gentleman basically took a car and drove around like 80 countries and tried to make an investment in every single country. And I think there’s a bit of that spirit in me.” – Sam Marks

Sam Marks Tweetables

“Good investing is often boring investing, but I want to make sure I’m having fun while I’m doing it.” — Sam Marks Click To Tweet “The best portfolio is the one that you can hold.” — Sam Marks Click To Tweet

Resources

Invest Like a Boss podcast with Sam Marks
Connect with Sam Marks on Instagram | Facebook | YouTube | LinkedIn
Money: Master the Game: 7 Simple Steps to Financial Freedom
Adventure Capitalist: The Ultimate Road Trip
Lifestyle Investor Mastermind

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Read the Full Transcript with Sam Marks

Justin Donald: Well, Sam, I’m so excited to get a chance to hang out with you. This has been a long time coming because we’ve got a mutual friend in Bryan Ravit who’s part of our mastermind, Lifestyle Investor Mastermind, and he’s like, “You guys just have to connect. You’ll be two peas in a pod,” and he couldn’t have been more correct. I have just had so much fun getting to know you, recording the show on your podcast, Invest Like a Boss, and can’t wait to get into your story.

Sam Marks: Man, I’m having too much fun. We can go for a long time, Justin, but I appreciate it. It’s been great catching up with you already because we just did a recording on my podcast like you said but I just wanted to tip my hat to you because of all the great work that you’re doing and the community that you’re bringing together and education you’re bringing out for investing. This is really important but also really fun stuff to talk about.

Justin Donald: Well, thank you, Sam. And quite frankly, I should be thanking you for all the stuff you’re doing because I love in your podcast how you basically are like, you and Johnny you’re like, “Hey, we don’t know.” I remember your very first episode. I’m a huge fan of your show and in your very first episode you’re like, “Well, we don’t really know what we’re doing but we’re going to just create this podcast and we’re going to walk you through what we end up doing.” And I just think it’s a really cool strategy and way to, one, learn on your part and, two, educate other people who are along for the ride. So, you’ve been doing an awesome, awesome job.

Sam Marks: I appreciate it. In hindsight, looking back and saying we’re going to start an investing podcast with zero investing experience sounds a little nutty but I’m certainly glad that we did the venture.

Justin Donald: No kidding. Hey, you guys pulled it off and it was awesome. Now, I know that it hasn’t always been easy but before we get to that, I think it’d be really fun to hear about some of your story of when your life wasn’t easy, right? Because didn’t you go to Florida State? I think you went to FSU, right? And I remember you saying that you had a bunch of setbacks. We’re going to call them setbacks. Some minor situations, maybe run-ins with the law,

Sam Marks: A few run-ins, trials with the judicial system of the State of Florida.

Justin Donald: So, what ended up happening? I’m curious on the story of like, hey, stuff was maybe not going the way that you wanted it to, to it’s going in a much better direction, to like, “Hey, we’re crushing it now.” So, I want to kind of peel the layers back and kind of get into your mind of what’s going on.

Sam Marks: Yeah, man. I went to Florida State. That was the only school in Florida I got accepted to. Actually, Bryan Ravit, you already mentioned, was a fraternity brother of mine, and I joined a fraternity called Five Sigma Kappa and it was a group of basically South Florida kids who were all like fun-loving, halfway jocks, like wannabe jocks but we’re basically partiers like fun guys that through the fraternities somehow ended up getting this business spirit to us, right? And you had mentioned, you know, we had talked about your experience in Cutco and a lot of us in high school we’re doing Cutco. I mean, there’s probably of a fraternity of 70, 80 kids, you know, I would say at least 25 or 30 of them had experience in Cutco. So, I think we carried a lot of that kind of hustle into college because we were doing Cutco primarily at the end of high school, carried that hustle into college. So, we were always in there like scheming on ways to try to make money and it was sort of the advent of the internet and so we’re looking at this new frontier, really. And so, we had really this mixed criteria of like party, sports, try to make money like this big cycle. And the party side kind of caught up to us and I had a few run-ins with the FSU P.D. I mean, totally nonviolent crimes. I say that halfway joking but it was, yeah, we’d like go out to bars and there’d be police officers dressed in Abercrombie and Fitch that were like 24 years old and they strike up conversations with you. And then five minutes later, they pulled a badge and they’re asking for your ID. And, of course, the only idea I have on me is fake. So, I’m like underage drinking, fake I.D., go to jail. But that actually happened to me five times when I was a freshman. I got arrested three times for underage drinking, fake I.D., criminal mischief, which was literally just me breaking a window at my dorm and the police come in and arrest me.

So, like a bunch of ridiculous arrests, which more or less not to make excuses but basically everyone does the same type of activity in college. I just happened to get caught for it. The first one was funny because I got arrested literally, Justin, 15 minutes from when my parents hugged me, my freshman summer, and said, “Goodbye, son. We love you. We’re here to support you. We know you’ll do well.” And I waved them off and I turned around and saw a buddy that I knew from high school that I didn’t know he was going to Florida State and he’s like, “Hey, Sam, come over here. Hey, man, I got some beers. You want a beer?” I’m like, “Yeah, I want a beer.” We cracked a beer and then we like walk outside and there’s a police officer standing right there. In high school, that would happen at parties and they would just be like, “Hey, guys, you have a safe ride home?” Like, “Yeah,” and they’d be cool. And in college, they’re just like, “You’re getting arrested.” Yeah. That was college for me. I ended up with five or actually six arrests during college. I say it laughing now but my freshman year, by the end of that year, I was like, “This is really bad.” You know, I was scared to like go out. I thought it was so jinxed, I was afraid to go outside and cross the street. I’m like I’m going to get arrested for doing something like that, you know? So, it’s really psychologically burdensome on me but in hindsight, I was able to take that and redirect my energy into really productive things.

Justin Donald: No kidding. So, I mean, first of all, I feel like most people are doing what you’re doing, like you said, not getting caught. I get someone getting caught but six times? I mean, that is some bad luck, Sam. Goodness, gracious.

Sam Marks: You know, whoever is pulling my strings up there in the simulations, just like, “Listen, man, you need to be doing X and you’re messing around, so I’m going to keep you in check quick. This isn’t going to be like this 30-year delay. It’s going to be like, boom, now, you need to reckon.”

Justin Donald: So, you are a world traveler. I love traveling. I’ve been to 76 different countries. You, I believe, have been to over 100. And this started early on in life because after college, I believe you moved to the UK. Is that right?

Sam Marks: That’s correct. What happened actually before that, because after this troublesome freshman year, I was 19 and I was not having any type of college experience that was enjoyable at all. I was hiding behind closed doors and all of my friends were going out partying and I just wasn’t able to participate. And so, I got the opportunity to go to Switzerland. And, you know, I looked up the drinking age and it was 18 so I’m like, “Wow. Happy days. Arbitrage.” So, I was able to instead of buying a car like all my friends are doing, I was like, I’m going to put that towards studying abroad. So, I went over to Switzerland. And that actually really opened my eyes to opportunities abroad because I realized even in Switzerland, I was like, “Wow. They’re just backwards, man. Like why is there not Wal-Mart here? Why is there not all these services, right?” A little bit naive but it made me enjoy being outside the U.S. so much and see opportunity. And so, that’s what really I wouldn’t have ever ended up in the UK out of college if I hadn’t had that experience of studying abroad.

Justin Donald: That’s awesome. What a cool experience early on. And so, you’re in the UK, you’ve graduated. Did you go there because you wanted to go there? Did you go there for an opportunity? Because you started a company, an electric cigarette company prior to that being a norm like today, that’s a norm. When you started it, that was not a norm. So, I’d love to hear your thoughts on that.

Sam Marks: Yeah. After the arrest, I realized that there was no way I was ever going to get a job. And so, I had to figure out how to start a business and I’ll just kind of yada, yada over this pretty quickly. But my sophomore year, I decided to start a social networking site in college. This was 2003, 2004 so early on in the internet. And that did fairly well and I was able to do a deal my senior year of college with a guy that basically more or less bought it but it was sort of like a licensing deal and that kind of gave me a bit of spirit as an entrepreneur. After that, I did different odd jobs. I mean, it is like the true hustle stuff of like road construction at 5 a.m. in the morning on the side of I-95 to make ends meet. But I was always dabbling in the internet space and trying to figure out how to make money. And that led me into doing affiliate marketing and learning how to market online products really, really effectively in the early days and start making some serious commissions. In fact, our mutual friend, Bryan Ravit and I, I was living with him in an apartment downtown West Palm Beach, and I can remember I was making like $100 a day doing affiliate marketing, and all of a sudden, like two weeks later, I was making like $5,000 a day. And then like two weeks later, I was making like $30,000 a day and I was living in this like shared $300 a month apartment. And I’m so superstitious that I’m just like, I’m not leaving my room because I’m refreshing the stats like every three seconds, like new sale, new sale, new sale, new sale, and money was just pouring in.

And then like once a week, I’d go out and just like let loose and like buy bottles at a club and stuff, and it’s so fun. But through that experience, I learned that, okay, I can market certain products really, really effectively online. And when e-cigarettes came out, I was actually out in a conference in Las Vegas and one of the very first e-cigarettes that was ever manufactured, the guy that made it and actually invented the e-cigarette was a China guy, a guy from China, rather, and he was there with it. And he barely spoke in English and he knew that we were really good at marketing and he’s like, “Hey, here’s my product. Can you sell it?” And I looked at this thing and I tried it and I thought, “Well, I’m actually really good at marketing health care products. If this thing could be just a little bit better, taste better, and have a better design, man, I bet tobacco smokers would use that.” And so, that’s where the idea of starting like an e-cigarette business came from. And this was before there was really any e-cigarettes on the market. But how I ended up in the UK was because we took a look around online and of the entire world, the best, most established product was in the U.S. and they were still very small. They said, “Okay. They have some pretty good trajectory, pretty good momentum. Let’s just take the next best market. Why compete here? Take the next best market.” So, at age 24, 25, I said, “Let’s launch this business in the U.K. I’ve never been there. It sounds like an adventure.” And that’s how it started. I flew to the U.K. I had a bunch of product from China shipped over to me, met me in London, and I started a road tour around the U.K. with product in the back of a hatchback.

Justin Donald: Yeah. So, first of all, I admire your ability to just leave the comfort of everything you know to start a company that you hope will make it in a market that you’ve never been to. I mean, that’s just incredible. I love it. It’s very inspiring. And you know, what’s cool about your story is we get to celebrate one that did make it that went the full cycle. So, you’re literally like living out of a car, selling product from a car, and four years later, you get acquired by one of the largest in the space, what becomes the largest in all of the UK, right?

Sam Marks: Yeah. It was an incredible experience, day one to year four. I mean, it all happened very quick. We never had venture capital but it literally started out of living in a car selling and marketing product out of a car. And you know that full cycle up to living in a hostel to our first office, to having an actual decent apartment and not living off bread and noodles, to hiring staff. And there are so many complications along the way but it was just an incredible ride. And the second part of that business was actually going to China and starting our own manufacturing facility in China. And that was even a more interesting experience than the Britain experience of just being over in China in 2009, 2010 when like nobody was there and started that manufacturing. We ended up having 400 employees there and like only one of them spoke English. And, yeah, just like the experience of living out the factory and hanging out with these people and how fast innovation and production happens there is just mind-boggling. But you know, Justin, ever since I got out of that business, I’ve been on a path of trying to figure out how to replace the thrill of those four years and I haven’t found it yet. So, it is kind of fun to talk about it and remember it.

Justin Donald: Yeah. That’s cool. I’m glad that we can reminisce because the amount of value you were able to create in such a short period of time, I mean, four years. I mean, that’s incredible. You sold Sky Cig to a publicly-traded company for $100 million. That’s an incredible exit. Over the course of four years, you’ve got and you’re living so cheaply, right? You’re totally like pinching pennies. In some cases, unsure early on like, “Oh, is this real? Is this affiliate marketing? Am I going to keep getting paychecks? I’m going to keep living in a $300 apartment,” to living in a car until you upgrade to the hostel, then upgrade to an apartment to now have $100 million. I’d love to hear what that was like, that experience.

Sam Marks: Well, the negotiation was pretty grueling. The actual sales cycle was pretty grueling. We had two companies that were basically bidding on us but both of them almost fell out at the last minute and we were starting to have cash flow issues. And I think maybe just the fact that I had been testing e-cigarettes like nonstop for four years, my body was like over-nicotined out for lack of better words. I was pretty burnt out at that point. I was flying back and forth from China to Edinburgh like every two weeks and basically living at factories. And still, at that point, I was like living off basically nothing, just investing everything back into the business. But, you know, I was 28 when that whole thing happened, so it was sort of a surreal experience I’d never had before going through any type of sales process that big. You know, I was sitting across the table from the top 6 executives at Philip Morris and then the top 6 executives at Lorillard and having to do these pretty hard negotiations. So, it was, you know, it still is surreal to me. I ended up in the hospital for 10 days before closing. I think it was just literally because my body was so like burnt out and stressed out and didn’t know how to handle like that type of pressure because it was one of those things that was like, look, we’re going to get this deal done and that type of money is on the table or we’re not.

And this whole thing is probably going to fall apart and they’re going to eat your lunch because there’s no investing going into these companies. It was still way too gray. No one knew if tobacco was going to own it, pharmaceuticals is going to own it, or governments were just going to shut you down. And I woke up every single day not knowing what that future was going to look like. I woke up every single day thinking this can end tomorrow. And so, I was always trying to get a deal done and fortunately, we were able to. I was pretty strong at that age but it really took the life out of me but, man, what an incredible experience. The actual deal turned out to be 50% cash upfront and 50% earnout, and the earnout was really straightforward. So, we thought it was basically a lock but literally, the week after we completed the deal and got the first half in, we ended up in litigation with a superpower more or less to say. So, the earnout basically got frustrated pretty quick and the relationships between us and the buyer were not smooth from that point forward. So, we did okay in the earnout but we didn’t get that full allotment but needless to say, we still did very good. It was myself and three other partners. So, you know, for a 28-year-old, it’s certainly life-changing money.

Justin Donald: No kidding. You know, there are so many things I want to ask you about that experience because the way that it’s like romanticized having this big exit and what you think it’s going to be what you see in the movies, what you maybe envision from your other friends or see on Facebook, you think it’s going to be this unbelievable experience but then when you actually have it, and I want to know what it’s like for you too, but like you think it’s going to be one thing and then it’s kind of like, “Okay. What’s next?” Did you have anything like that where it felt so good but then at a certain period of time, it’s like a few days later, a week later, a month later, it’s like, “Okay. So, I got some extra digits in the bank account.”

Sam Marks: I hate to be a spoiler but it was almost all negative from day one. It really was. It was not good for me because I was in the hospital building up to it, so I had no energy, basically, when we signed. I woke up in the hospital. I saw the headline in the news, so I knew the deal was done because I went to sleep with the paper signed but we weren’t sure if they were going to back out. And I’m like, “I signed. I’m done like I’m going to sleep.” I woke up, saw it in the news, and then the next day the money was in the account. So, it was like bang, bang. And then, you know, for me, Justin, it was like I built this thing from the hatchback with product in the car like over there just on this wild adventure. And I had this nucleus to the company and the team that we built was like all, I was only 24 to 28 during that time, and the entire team was like 22 to 24. So, it was almost like a fraternity that was just going to war every single day, like building this thing. No one had experience. We were just in there all energy, motivation, and ambition. And it was such like an incredibly dynamic and ambitious place to go to work every day like I hated the weekends. Just wanted to be in the office with everybody. But when we did the deal, part of the deal was like, “Hey, I’m going to go finish up manufacturing.” I’m done like two or three months, I’m done.

And the light switch was on. And when we did the deal, the light switch was off. And like, literally that week, it was like, I’m not needed. I was like, “How am I not needed? Of course, I’m needed.” No, I’m not needed. And it was this massive void because at the age of 28, all of my friends were working. None of them were traveling. Everyone’s on the grind trying to get there and I was just faced with this reality that like my life, I was 100% invested and committed. My entire life was this business. I had nothing else going on. I didn’t even date girls for three years because I just was putting everything, every bit of attention in the business, and then it was over. So, I immediately tried to replace that with angel investing and massive traveling and going out to bars every night and bars in the day and whatever I could to keep my mind off like the void. And actually, it was a very, very difficult time for me. Very difficult 18 months. And to some degree, it’s like I said, it’s been very difficult to replace that whole experience, man. It’s so good.

Justin Donald: Hey, thank you just for being super vulnerable, Sam, and for your honesty here on this because what I want people to understand is that we glamorize this thing that may not need to be glamorized, right? So, having a big, massive exit isn’t always what people make it out to be. And having an increase in an influx of income, though, it sounds great, it comes with another set of problems and issues and things that you need to work through. And I think most people don’t realize that the majority of deals when there’s an exit happen with some form of earnout. So, you hear this big number. It’s whatever number but that’s including this future money that hasn’t been paid yet may never get paid, might be tied to certain metrics that you have to hit in order to get paid, might be over four years, sometimes even more. And so, I like hearing the real deal on this and then I think it’s also just so important for people to know that if you think that a big lump sum of money is the answer to whatever your problems are, it’s not. In fact, it can actually be the opposite and make it even worse. And so, it’s very interesting hearing your journey here. And unfortunately, I’ve heard this before from a lot of people.

Sam Marks: Oh, wow, Okay.

Justin Donald: I wish it was sweeter sometimes. So, what I’m curious about is like when did you pivot to the podcast? How soon after this? Because you’ve exited, you’ve had a little bit of, you know, maybe unexpected-type of circumstances, maybe not exactly what you envisioned for yourself after a big monster exit. When did you kind of get things back on track? When did you start feeling better? When did you start kind of creating passion in your life again? I think the podcast has been huge for you in that regard, at least as an outsider, that’s how I feel. And like, how did you use that as like an educational piece for the next chapter of your life and your professional journey as an investor as opposed to an entrepreneur?

Sam Marks: Yeah. It’s a good question. I mean, what I realized was it was all about the journey. All the highs of building the business were in fact building the business. And, like you said, the payout at the end it’s almost like a paradox where I was like I had this expectation that there was going to be a rainbow full of happiness. It just got sewed into me and I would never look back. And that wasn’t the case. So, it really took me for a bit of a spin. But really, what happened was during the business, I wasn’t making much money but I was literally living off the business. It had all my housing, paid for all my flights, almost all my food, almost everything in my life. So, spending nothing out of my account. And then when we sold the business, all of a sudden I realized I’m like, “Oh, damn, man, my lifestyle is actually pretty damn expensive,” like when I start paying for everything. And like most people, or at least what I’ve come to know now that I’ve been doing the podcast for five or six years and been studying investing is that I didn’t know what to do. I was actually scared because I didn’t know how to invest. I had zero income. And so, what I do, I asked around, who knows a financial advisor, someone who knows how to manage money. I had a quick introduction and then I get 40% of what I had made in the Windfall to a financial advisor. Didn’t ask any questions. Gave them complete discretion over my account, “I don’t know. You’re the expert. You make all the decisions. I don’t want to approve things. You do what you think is best.”

And after two years and this is kind of part of the down cycle, the music wasn’t matching the words because I was looking at the stock market, which I was looking at the Dow Jones and the Dow Jones was going up and I’m looking at my account and the account is kind of volatile, going down or sideways. And over the course of two years, I think the market was up. The Dow Jones was up, say, 20% and my account was flat and I was still having to pay these tax bills at the end of each year because there was fixed income in my account. But the most frustrating part was that I would go into these meetings with my financial advisor and nothing made sense to me. I felt like I was being manipulated. I felt like I knew what was going on but they were saying something different. I was very intimidated by the process of meeting with them in their corner office, in their nice suits, and these older gentlemen that were speaking all these words I couldn’t understand. And I just thought to myself that this is no way to go through life that I have to feel this vulnerability with my money. And I know I’m paying them something, some type of fee. Yeah, they said they’re going to make me 8% and they’re going to take 1% seems like a good deal but they weren’t making me 8%.

And then the book, MONEY Master the Game, came out by Tony Robbins, and that really just kind of, you know, it empowered me in a way to think, “Wow, I can figure this out.” But investing was still very intimidating for newbies, right? And especially with more money like that, I was like I don’t want to make a major mistake where I lose 30% of this because I literally may never forgive myself if I do that, right? But at the same time, I’m scrambling, Justin, because I have no income and I’m like I need a couple hundred thousand before tax just to pay my expenses and the lifestyle that I want to live. So, I thought, “Look, I know nothing about investing,” but there are so many people out there that know nothing about investing. So, this is one. The best way to do it would be to start a podcast, force myself to learn by putting myself on stage in front of an audience with talented investors and making it look like I know something like I know what I’m talking about, and that was really the decision to start the podcast.

Justin Donald: That’s awesome. I’m really glad that you started it, and it’s so interesting to hear your story. There are definitely some similarities, some differences for sure but so many similarities. And I like that you articulated your feelings around these money managers who definitely weren’t helping you understand what they were doing. And one of the big issues I have with financial services in general and, by the way, this is not everyone in financial services but this is the majority of people in financial services and the majority of institutions, maybe all the institutions that there’s so much manipulation and misinformation that what’s really happening is not what is promoted to be happening. And there’s just overall misalignment. So, it’s promoted, they’ll make you 8% and they make their 1%. But if you make no percent, they still make their 1%, and then you made negative money, right? You had a negative return and I don’t like that. That just does not fit well but you mentioned something else. And this is an interesting concept as well because people envision often like, “Hey, how great would it feel if I had X million dollars? I would be set.” But the reality is if you can’t figure out how to protect the principal and invest in things where you have interest coming, cash flow coming, then your principal is going to dwindle down into nothing in time. And so, it’s like this clock starts ticking. The moment you have an exit, it’s like, “Oh, whoa, I got no income to support my life,” like you said, but then your bank account is decreasing. There’s like a mental just like awakening and like hypersensitivity when you see dollars just decreasing, right?

Sam Marks: Yes. Yeah.

Justin Donald: And you’ve got to like figure out how to put this to work and solve for this problem. And it is, it’s an issue but it creates a lot of stress, and I don’t think people see the full picture of what that looks like. And so, this is the power of having cash flow and buying assets so that these things don’t happen. And I love that you’re learning this along the way.

Sam Marks: Absolutely, yep.

Justin Donald: So, as you are going through this process, you’re like, “Okay. Hey, I’m going to start this podcast. I’m not an investor, so I’m going to start an investing podcast. I’m going to learn how to invest. I’m going to bring some people on. I’m going to educate others while educating myself.” Totally brilliant. I absolutely love it. What are some of the best lessons that you’ve learned going from entrepreneur to investor? This could be specific investments. This could be principles. This can be, you know, whatever you want it to be. But what are the lessons that you feel like are real good foundational lessons for someone that maybe is transitioning from having a big exit into where you’re getting your money to work for you?

Sam Marks: Yeah. I guess the same themes keep coming up for us. And if you look at our portfolios or at least my portfolio, I’m very diversified and this was kind of one of my drivers, I guess, if you look at what I wanted to do. So, I looked at, okay, what’s actually my goal? My goal is what’s most people’s financial goal? And most places you look to be like, okay, generate enough passive income to be able to support your lifestyle. But I got to that point and I realized, “Well, this kind of sucks because now I feel like I’m living paycheck to paycheck,” right? And then inflation seems to be actually decreasing my net wealth. So, what’s better is, yeah, I want to create enough passive income to be able to live my lifestyle while still increasing my net wealth and having a surplus, in fact, to be able to invest in really interesting things, whether lifestyle or investments. And so, the second thing was like I never want to lose money because I was spending it down. I made some mistakes early on. In fact, I think my advisors lost me money on the whole and it just sucked. And I was always that guy going to like casinos and losing $20 on blackjack was so much worse than the feeling of like making 50, right? It was just like, “I don’t like to lose.” So, I wanted to make sure I was diversified and maintain my wealth. And then also I wanted to have a lot of adventures along the way and have some lottery tickets because I think for me, good investing is often boring investing but it’s such a big part of my life now that I want to make sure I have fun while I’m doing it.

But when you think about like, you know, the first thing I needed to do was move my money out of the financial advisors. And that can be a very intimidating process but it’s actually super easy because most financial advisors are putting you just in the basket of six or seven mutual funds that literally can be replicated very easily with Vanguard index funds. And so, MONEY Master the Game helped me do that. But some of the lessons there like low fees are absolutely critical. You know, low fees, you don’t want advisor fees because those are killer and usually are not productive like 1%, 1.5% but also mutual funds. A lot of mutual funds they could charge you 1%, 1.5%. So, between an advisor and a mutual fund fee, you can easily have 2% to 3% in fees. Now, if someone’s making 8% or 9% a year, they might say, “Whatever. It’s fine,” but no, that’s horrible. Like over the course of 10 years that is massive amounts of money. So, you want to keep fees absolutely, absolutely low. The second thing is like when it comes to stock equities and stuff, you never want to pick stocks. You always want to be diversified broadly. Very few people can beat the market by picking stocks. Even the best money managers, it’s a bad idea. Most people do it including myself because I just do it to have fun. But generally speaking, much, much better just to be the market. And historically, you’re going to be fine if you’re just the market. When I say the market, just the S&P 500 or a total stock market index.

Another principle is the best portfolio to own. Now, you can go crazy with portfolio diversification, a perfect portfolio, and all seasons portfolio. Everyone’s got their perfect portfolio and you can have a lot of fun trying to tailor-made a portfolio that you think is going to be 10% versus 9%. But ultimately, the best portfolio is the one that you can hold. You know, if you’re 80% stocks and 20% bonds or you have gold or inflation-protected indexes in their municipal bonds or whatever you have, you typically want to be majority stocks but are you majority US? Are you majority internationally? Are you small-cap, large-cap, emerging markets? What really matters is sticking to something. And Fidelity did a big research project on this, and they figured that the most successful people, clients of theirs, were actually, basically, clients that have died, and no one had inherited that because that was the fund that no one touched. Because everyone wants to touch it, “Oh, move the money here. Take money out. Pause my account. Set me back some money. Invest a little more.” No. You just want to keep it where it’s at and you want to add to it. So, there are some really like fundamental things that if you like just get right and you cement these learnings in the beginning, you stick to them and you don’t make that major mistake, which is pulling money out in a down market or a bad time. If you can avoid that mistake, you know your chances to do well over the course of 10, 20, 30 years are very, very good.

Justin Donald: Yeah. Those are great lessons and great habits. I love that you bring up MONEY Master the Game. I thought that was an incredible book and very eye-opening, you know, really to kind of bringing into full circle into plain sight what is really happening. And like you, I lost money investing in conventional investment strategies, in the stock market, with money managers. The big rub I had, I mean, rub number one is I lost money, right? Rub number two is that my average rate of return on my statement said that I made money. So, it was this huge manipulation of like, well, averaged out, yeah, but actually, I lost money. I had a negative return and my statement said that I had an average rate of return that was like 7% or 8%. It was just like the worst feeling in the world. I totally felt lied to and manipulated and that is an industry-wide issue there. And by the way, there are great people that are in that space. I don’t want to paint everyone out to be taking advantage of you. I’ve got a lot of friends in that space but I think that they’re the exception and not the rule, unfortunately. You know, one of the things I really admire about you, Sam, is you have been able to live an incredible lifestyle and you’ve been able to do that because you’re focused on now. It’s not completely nest egg. You’re getting into this space. You’re like, “Hey, let’s create some cash flow. Let’s get my money working for me.” And I think that just even conventional financial education doesn’t touch on the fact that we should be focused on cash flow much more than we’re focused on net worth or at least talked about evenly.

You know, most people are focused on net worth, and they have most of their net worth in either their main company that they own and run, that they may not be able to sell because losing the founder, owner, operator of the company often no one wants to pay for that, or it’s like all in the stock market or maybe someone’s doing more I would call it risky, aggressive investing in like angel investments. And it’s all focused on this net worth, which most people have like net worth that is totally not in reality. So, it’s like, “Oh yeah, my net worth is 5 million, 10 million, 1 million, 7,” whatever it is but there’s no liquidity. It’s all paper money. It’s like in theory, I have this much net worth but really, I don’t until this company has an exit, right? Or you don’t want to draw upon what’s in the public markets because you are worried about not having the return that you could get. So, even though it’s liquid, it’s not really liquid. I just think that there needs to be more focus on cash flow and how to cover what it costs you today. I love that you’re doing that in your podcast. I love that you’re doing that with your life. I love the adventures you’re taking. I get to live vicariously through you with all the cool stuff you’re doing. You’re in Barcelona right now, which is cool. You’re leaving in a week to go somewhere else cool. Where else are you going on these adventures? And I’d love to hear some of the lifestyle because you are a lifestyle investor and you are at a point where you are investing your money and living a life without a job and doing some things that you’re passionate about.

Sam Marks: Yeah. Thanks, Justin. I appreciate that. I’ve tried to orient lifestyle and investing to be a pair in that sense. In fact, a lot of the investing I’m doing is it has a lifestyle perk to it, right? And there’s a bit of an adventure to it, so it’s not strictly the gain or the cash flow but it’s how can I build a lifestyle around investing and have fun while doing it and have some adventure. There’s a book that was written that’s called Adventure Capitalist that was extremely inspiring to me, where the gentleman basically took a car and drove around like 80 countries and tried to make like an investment in every single country. And I think, you know, there’s a bit of that spirit in me but…

Justin Donald: I love that book. Fantastic book.

Sam Marks: Have you read it?

Justin Donald: Yes.

Sam Marks: Okay. I forgot the author, actually. I just want to look it up for your listeners.

Justin Donald: I’m drawing a blank on it too but he’s got like that yellow car, right, that he takes around.

Sam Marks: Yeah. Yellow Mercedes. Jim Rogers.

Justin Donald: Jim someone. Yes. There it is.

Sam Marks: Jim Rogers. Fantastic book. So, I ended up in Asia after the deal and there’s a lot of stories there. Some of them are just kind of funny like I was in Thailand looking for residential property investments and I end up at a bar in Phuket with a property developer that was like 26 years old, half Thai, half Belgian guy. And we’re having mojitos and I’ll start talking about his development that he was going to be building next door and the plot of land he owned and here’s the rendering. I ended up just being like, “Have you sold any yet?” He’s like, “No. I’m going to start selling them in three months.” I’m like, “What if I buy the first one right now?” And like we ended up shaking on it and he brings over a credit card terminal and I put down like $5,000 on my credit card right there and I work out a sweetheart of deal. And lo and behold, that thing got built on time. My unit was like the best unit, the best deal, and me and this guy are still like fantastic friends today. Now, that’s just a terrible idea to do. But just the fact that like that worked out, you know, sometimes those type of stories like build lifelong bonds. But I was truly in a hunt for cash flow as this story develops and I ended up in Hong Kong, got introduced to a guy that had self-storage. Justin, I know you do a lot of self-storage. And I was walking around Hong Kong just like seeing these self-storage units and like, “Holy sh*t, man. This is like the best business in the world.” Hong Kong real estate is insanely expensive. No one’s got any space. Everyone lives in a shoebox.

Like self-storage seems to be all types of market cycle proof. And I just, like, basically chased this guy around for like a month like, “Dude, let me do a premise with you. Let’s do it. Let’s go get drinks. Let’s talk about it. Let’s do it.” Finally, he’s like, “Dude, I don’t want to expand the business more. I’m trying to consolidate my life.” And he’s like, “But if you want to really do one, I’ll do it. It’s hard to make money now. I used to make like 20% year-over-year but now it’s more like 7%, 8%.” I’m like, “Dude, if you can guarantee me 7%, 8% preferred a year paid out monthly, I’m in. Let’s do it.” So, we ended up doing one then we end up doing two, and like now me and this guy are also like super good friends and I go to Hong Kong whenever I have the chance. Pre-COVID, I was going like two or three times a year to meet up and he’s got 60 buildings. And then between he and I, we own like 500 self-storage units. But these types of things that like all materialized quite quickly because I was in such a hunt after the exit. And I have like some fantastic I would call these lifestyle investments because it gave me an opportunity to visit places that I truly love and see people that I’m very good friends with.

Justin Donald: Oh, that is awesome. I just love that story, and I believe you interviewed him on your podcast because I remember hearing some of the story of your storage units in Hong Kong.

Sam Marks: Yeah. We’ve had Kevin Shee on a couple of times. The last episode we recorded was actually in – we were in Iceland together just hanging out and we were looking at northern lights as they appeared and we were talking about how he built his self-storage empire is really cool.

Justin Donald: Oh, it’s so neat. Well, I got to just give you props again. Your podcast is one of my favorites. I think you guys do a great job, and I really want my audience to know that I just wholeheartedly endorse what you guys are doing. I just think it’s incredible. And can you just let our audience know where they can learn more about you and more about Invest Like A Boss?

Sam Marks: Yeah. So, thanks, Justin. I mean, Invest Like A Boss, it started basically as our personal journey. So, I think we chatted about on this episode that when we started, we had zero investing experience and our goal was just to interview the best people we could get a hold of and to put our money where our mouth is. So, typically after every episode, one of us is making an investment into something related to that episode. And then we share the portfolios on our quarterly updates with our listeners. And it’s really just a journey. We don’t have anything to sell. It’s more or less a hobby. You know, Justin and I were talking about this before how podcasting is just such an awesome thing to do. I mean, it educates us as much as the listeners, right? And so, it’s been a fantastic journey. We’ve been doing it for six years. We’ve got 200 episodes in the bank and I hope I’m doing it five years from now because it never gets tiring.

Justin Donald: Yeah. It’s so much fun. I love having a podcast because there’s just so much like creative space and things to learn. You just realize how little you really know. That’s it. Like, you might think you know a lot. Start a podcast and just see what other people know, and you don’t realize how little you actually know. It’s just incredible.

Sam Marks: That’s a good point. Justin, when can we get together? When can I join one of your conferences or masterminds? Because I know you guys are doing really good work, and I’ve heard from some of the people that are in them that the group and the network is incredible and I got to get a piece of that.

Justin Donald: We’d love to have you. First of all, I’d love to have you meet up sometime when you’re in Austin or one of our paths crossed in Europe or wherever you might be. But yeah, we can definitely arrange for you to be part of, in fact, it’d be fun to even have you share some of your major lessons that you’ve had doing your podcasts on the episode so you can be part of one. You can run one. I think that would be really cool. I think our audience would love it. So, you’re a fellow lifestyle investor. Our lifestyle investors love to hear from other lifestyle investors.

Sam Marks: Of course.

Justin Donald: Yeah. So, where should people look you up?

Sam Marks: So, the easiest way is just Invest Like A Boss. My email is sam@investlikeaboss but we’re pretty active there on social. And other than that, if you want, just tune in, subscribe, hang out. It’s a great community, not necessarily just our podcast but I think the whole lifestyle investing community that is growing and there are so many more deals and assets to be considering right now so the crowd and the community are ever important. So, the more that we can bring that together, the more fun we’re going to have and the more returns we’re going to make.

Justin Donald: I love it. Well, thank you so much for being on the show. I feel like I could talk to you for another hour. I mean, I feel like we’re just getting started. This has been great. I think we’re going to need a little bit more or maybe a lot more of Sam Marks. So, thank you so much. And to all of our listeners, those of you watching, I just want to end our episode the way I like to end every episode and that is this. Take some form of action today. Take one step towards moving into a life of financial freedom, a life by design, not by default. What’s the one thing you can do today to move one step closer to financial freedom? We’ll catch you next week.

[END]

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