Today, I’m speaking with Shawn Sparks, who is a financial coach to the top 1% of Independent Financial Advisors. Over the course of the last decade, he’s helped financial services leaders market, sell, and run better businesses, and he shared the lessons and wisdom from these experiences in his book, The Advisor Breakthrough.
More recently, Shawn decided to leave his high paying job to work for himself, not because he needed to make more money, but to live in greater alignment with his priorities – and today, we’re talking all about it!
In this conversation, we explore how Shawn repositioned his life to achieve long-term freedom. We talk about what it means to build a company with people you want to do life with, what true wealth really is, and how to avoid becoming addicted to making money when it doesn’t serve you.
- How our work lives impact our personal lives – often for the worse.
- How to analyze deals, life, and work with lifestyle and family in mind.
- The thing Shawn was most afraid of as he left his previous career – and why the exact opposite happened.
- Why Shawn is giving equity in his new company to all future employees.
- The value of expert guidance in getting from Point A to Point B, no matter what you’re trying to achieve.
Tweetables“I think the best definition of wisdom is knowing how your short-term actions impact your long-term future.” – @ShawncSparks Click To Tweet “I think courage is more rare than genius and you've got to be able to have the courage and confidence to say, ‘I'm doing this for the right reasons.” – @ShawncSparks Click To Tweet
- Connect with Shawn Sparks on Twitter, LinkedIn
- The Almanack of Naval Ravikant: A Guide to Wealth and Happiness
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Connect with Justin Donald
Justin Donald: All right. Well, I'm so excited to have you on with us here today, Shawn. Really glad that you could make the time and I'm just curious what's new and exciting in your world?
Shawn Sparks: Well, thanks, Justin. It's great to be on here. I'm looking forward to the conversation, man. My world has completely changed in the last few months. So, I don't know where to start. There's a lot going on. I'll tell you this. I'm having the time of my life today. When you think about what you want out of life and what you're after, I think the most important thing to me has always been family and so on but right now, my kids are young. It's 7, 5, 3 and we've got almost a one-year-old but in terms of life and happiness, today, you're looking at Shawn Sparks, honestly, the happiest I've ever been. So, it's pretty exciting for me.
Justin Donald: That's so great to hear. I'm excited to have you on today and it's interesting because we had talked about having you on earlier. You were originally going to be my official third guest, second guest that I interviewed but third podcast episode and we had to arrange some things. I know, it's been crazy kind of starting a new business but I also think the framework from where that kind of spawned from is really neat because you and I, we go back. So, we've got some mutual friends. What's cool is we connected because of one of those relationships and we got really close really fast and spent some great time at Blackberry Farm this summer, and our wives got to know each other, and we got to do life together, and it was so fun. Just from that point in time in July to where we are today, it's been a whole new place for you. There's a handful of things I want to get into. I want to talk about lifestyle and investing. But before we do that, you have spent the better part of your career over a decade helping to build a company that is now a juggernaut in their space. I know that you were the top person and you have since moved on to really begin your own thing and not because you have to but because you want to. And I'd love to hear what that process has been like.
Shawn Sparks: Yeah. Well, honestly, the process is hard. It's not easy to make a change. I will tell you that it's about 14 years with one company then I had a couple of years than prior where I was with another group, and these guys brought me over. I'll tell you that transition from my younger self to working with this other company, it was a huge blessing for me. I'll tell you the 14 years that I was with them. For the most part, it was excitement. It was fun. Everybody's learned so much together and I couldn't be more proud of that company and what we built together. But as you look at your life, I'll tell you, Justin, you've had a lot of influence on me because I've seen the blend and the balance you've had between business and family. I just knew like there's as I look through, I'm 38 years old. What do I want over the next decade? What do I want over the next 20 years? If you ask yourself that question, you got to be careful because you may not like the answer. I've always believed that I think the best definition of wisdom is knowing how your short-term actions impact your long-term future.
If you think about it, if I think of things based on short-term, the best decision is always to stay. The best decision is to make no change. I mean, I was benefiting from 14 years of work, obviously, for the family making a good income. If I were to say what's the best thing over the next 30 days? Another paycheck. What's the best thing over the next three months? Another paycheck. There's no way a new venture could ever compete with a three-month timeline. But when you think about what you value in life, as a father, as a husband, as an entrepreneur, and as a businessperson, and you ask yourself what do you want 10 years from today, you get a different answer. Honestly, we're dealing with some things in the family now. I've got my grandma just in her hospice and what I think through is what I realized is life is short and you don't have a redo. There's a framework I learned years ago, and we've talked about this but it's really regret minimization and it's when you come to the conclusion of what's best for you over the next decade or over the next 20 years, and you start listening to that and you're like, “Wait a second, I think this is giving me a very clear direction,” then you ask yourself, there's a regret minimization framework I think Jeff Bezos is where I heard it from through an interview.
It's like when you look back in your life and let's say you're on your deathbed, and you look back and you say, "What regrets will I have?” On the front end, with foresight, you try to minimize those long term. I will tell you the urge and the need that I had to create a change, when I started thinking this way was so strong, I couldn't ignore it. I have to make the change.
Justin Donald: I just love hearing that and I love that you took action, you trusted your intuition, and I think that's powerful. You talk to people in your network to figure out what makes the most sense. I want to honor you for such a big move. First of all, most people don't even make the move that you first made to help build a new company. Secondly, most people don't leave that position when they're the highest income earning person in that opportunity. And so, I want to honor you for making the choice to do that because it went beyond money. If it were just about the money, you would have kept doing it but as you and I know, and we've talked about many, many times, it goes way beyond money. It goes into the freedom of time and the freedom of just autonomy, having the ability to spend your time the way you want with your family for the amount of time with your family that you have dedicated in. Then the thrill of doing something new and different and starting your own business, I just think it's incredible. To the listeners, I think it's really important that you did such a great job while you were working and while you're working for someone else, helping to build their organization, that financially, you didn't have to keep working.
You invested very well, you have been very diligent, you've been very aggressive with the percentage of your income that you invest, which I think is fantastic, and it set you up to be able to make a no brainer decision because it didn't have to do with the money. I'd love to hear about that.
Shawn Sparks: Yeah. That's a good point. Well, watching people like you and the freedom you have in your life is a big influence so I have to thank you for that and we've had lots of conversations. When it comes to the money piece, number one, is I don't know if I was the highest-paid person there. All I know is I was successful and I was blessed. I think I could probably take some credit for that but honestly, I was in an environment that allowed me to thrive. And at the same time, I've always believed just if you're a student, the teacher will appear. That's a quote. I've always believed in being a student and learning and I've learned from every conversation I have. I try to learn something from it and it just makes me better and stronger over time. But as far as the money piece, as a young kid, I was interested in finance and I was interested in investments. I think I bought my first stock at 16 and I was obsessed with Warren Buffett and reading his books. I went to the School of Business Finance of K-State and my goal in life was to, number one, is build a career that I love. I think the minority of people wake up excited to go to work. I realized that if I would be in an environment and in a business that I loved and I enjoyed, it wouldn't feel like work, and I'd wake up, jump out of bed, run to work excited, and I'm like that's a blessing.
Because if you think about how much time we spend working, Justin, how much of our life, especially as a young guy who's just building his career, it's amazing how much your work environment influences your personal life. I know people and I know friends who unfortunately don't have this where they dread going to work, and if they have a bad day at work, guess what happens at home? They have a bad day at home. A lot of times, marital issues come with being overstressed. So, the first thing that I've always kind of kept my eye on is, number one, is I wanted to be good at investing and I wanted the financial freedom that I think money can give you but more importantly, I realized that if I find a business that I love and a career that I enjoy, then I will pursue it with my heart and almost obsess over it and try to be the best I can, and that came second. Then next in line is like once I know that I'm obsessed and I believe that I can really perform in this career, I know the byproduct here is just going to put me in a place where I have freedom long-term. So, that's really kind of the mindset and how I was doing that.
Justin Donald: That's awesome. Well, I love hearing about that and you are like many of my friends that are so driven, you don't have to work. You're choosing to work. I think that that's exciting. I love that you had some time to just kind of reflect and have downtime and not rush into anything. You really were calculated in the way that you made this decision. We talked through it for a long time, which is cool. I actually want to give you props because when we started spending a lot more time together, it was under the framework of investing and getting into deals and you're truly one of the OGs of the investors club that we started. I just think that it is so fun like all the deals that we've looked at and the ways that we analyze them and say, “Hey, does this influence lifestyle in a positive way? Does this not? Does this give us cash flow? Does this not?” There are so many ways that we kind of analyze deals, analyze life, analyze work. I'm just curious your thoughts and kind of how this evolved.
Shawn Sparks: Yeah. Well, it's been a blessing for me, my friend. I was introduced to you, obviously, through a friend and I found out we had a lot of other friends too, which is cool. But my connection with you has been awesome but it's not that it's surface-level finance and investment connection. I think so many people become a slave to money and they feel like everything is about money. What I saw differently in you and what you are teaching is that there's a lot more meaning behind the money. I've always believed the same. It's like money is an avenue. It's a way to get freedom in your life. It's a way to give yourself freedom of choice, freedom of time. I've always thought it was, I wanted to accelerate that and put myself in a place to where I can make tough decisions based on an overall higher quality of life. The sad part is money is also an addictive drug. I had a guy at a meeting. He was a billionaire and he said the most addictive drug on the planet is money. It’s a monthly salary. Sometimes, if you put yourself in a position where you don't have to worry about the financial piece anymore but if you're addicted to the drug, it clouds your judgment on what's right for you over the long-term in your life and that's a tough deal. If you're looking at that check, you're looking at the payment, and then you've got to be willing to say, "Wait a second, what I want out on my life once again, like I was discussing, and you need to say, “I want to put the money to the side.”
I guess, one of my favorite quotes and, well, it's very influential on my life is I believe it's Warren Buffett and Bill Gates, both. They said, “What's the greatest luxury of doing well, being somewhat successful financially?” And they both said, “I can make decisions without having to worry about the money.” So, they can make the right decision without having to worry about the impact financially, and so on. So, my point is I saw that in you that it's not just about making a high return on your investments but then it's about having a higher quality of life with people you want to do life with. My new business adventure I'm on now, really our core principle is do business with people you want to do life with. So many times, we try to separate business and life and we separate the community. This is my business community. This is my friendship. I've always felt like it was more powerful, intertwined. Imagine a scenario where all of your friends are people you do business with, and every day you wake up excited to talk to your friend. I learned really early that's how I felt about the people I worked with. I felt like they were true friends.
I got to tell you, Justin, the change was hard for me. I didn't know what to expect and I felt like some relationships might not be as good as they were but here's what I didn't realize what happened with the change and here's I would say the overall greatest blessing. The hardest part to change is that aspect of relationships and how that affects them. As soon as I made the transition, these people, whether it's former clients, former friends that are employees, peers with me, I've been overwhelmed with the support and the encouragement, and what I realized was those friendships last. Whether I'm with one business or another, I've just been blown away. It's been a huge blessing knowing that they last and they are encouraging me and I'm getting texts and calls all the time. That's something that I didn't know going into and it was the hardest part. Once I saw that, I've just been filled with joy knowing that the change didn't really change a lot of relationships. There were probably some that'll change but I've been overwhelmed with just the amount of encouragement and support I've received.
Justin Donald: That's so exciting to hear. It's such a testament to who you are, the way that you run business, the way that you pour into relationships. I mean, it's very evident that the first time that my wife met you, she's like, "He is just the nicest guy.” In fact, she paid you a compliment that I think is really nice because she said, “There is no one else I've ever met anywhere in the world that reminds me as much of you, Justin, as Shawn. She goes, "Even to the extent of humor, you have the same humor. You laugh at the same things. It's hysterical.” And so, I feel like that's why I feel so close to you and we were able to develop such a great relationship so quickly but I can attest to the fact that you are great with people, you build great relationships that are foundationally strong because they're based on real meaning, not surface-level conversation, and I think that that is one of your greatest strengths for sure. I know that it shows up in business for you, I know that it shows up just in your personal life, and that's why you've had so many people pouring in, not only to thank you for the impact that you've had but to follow you and join you in the new journey, even if it's just for emotional support or to say, "You can do it. I believe in you.” In some cases, it's a lot more and they want to shout you and your business from the rooftops.
I just think that it is a true testament to you, your character, and then also it's what you said at the beginning of the last statement, which is you view money as a tool, and so do I. It's such a powerful tool but it's not the gauge to measure success on. It is simply one component of what wealth is in general, which actually leads me to my next question because we've talked. We've had many philosophical debates on this but I'm curious to hear how do you define wealth. What is wealth to you?
Shawn Sparks: Wealth to me is I would say that it's not monetary. It's just having the freedom to make the decisions you want to make. Do the things you want to do with people you want to do then true wealth is being able to do that without having to make every move based on a financial scorecard or finance. I'll tell you, it's a blessing to be in that boat to where you can make decisions based on things you want to do and what you love to do with people you want to do, not because somebody tells you you have to do it, which leads to a lot of why wanting to build my own company is I want to have that freedom and I want to make decisions based on how I feel is right and so on. Yeah. So, I would say it's really a freedom and, really, it's a matter of freedom for me.
Justin Donald: That's awesome. By the way, it's that whole freedom and that whole idea of wealth, wealth being way more than just financial. Financial is most certainly a component of it because any financial problems you have, having more finances will help solve those problems. I mean, that's a real thing but it goes beyond that because a lot of people have a lot of money but they don't have true freedom. They are a slave to the business that they've built or they're a slave to the job that pays them. They have the golden handcuffs or maybe it's not even golden handcuffs. They're just tied to the security of needing a safe job, even though we know that someone could get laid off tomorrow like we just saw in the last six to eight months with COVID. So, the safe, secure jobs really aren't that but it's an illusion of it. It's like when you live in a really nice neighborhood and it's gated, and you're like, “Ooh, this is safe because there's a gate.” The gate doesn't make it any more safe. If someone wants to get in, they're going to get in. It's just an illusion of safety, just like most jobs are an illusion of security. So, it's interesting.
So, this is kind of how and why I coined the term lifestyle investing is because I wanted it to be a lifestyle focus first, investment focus second, and I'm curious, your thoughts on how your investment strategy has changed. You said you started as a 16-year-old investing in your first stock. I know you've been very deliberate about your education and I know that we've talked about new concepts and I've introduced new ideas, and just the whole gamut of cash flow investing. But I want to know how your philosophical overview and outlook on investing has changed within the last couple of years.
Shawn Sparks: Sure. So, number one is I've been blessed because I'm in a business that's related to finance. So, it's sometimes you have a job and this is your career but it's completely unrelated to the investment world. Mine has been one like I'm literally learning about investments every single day. So, what I do at work has a compound effect because it also improves my situation personally, being able to vet different deals and investments, and so on. But here's the thing, I've seen all types of different types of investments, stocks, traditional money management, all of this stuff. When I met you, you taught me you said it's really about income, and it's about income planning, and it's like my goal is to invest my money out as soon as I can, and let that investment continue to work. I saw a sleeve of the investment world that I didn't know existed, and this is after seeing lots of different things. You showed me some cash flow deals and this was at a time when I was really trying to set myself up. For anybody on this call, there's lots of different people that are going to listen to this, but you got to get the hard part over first.
You got to put yourself in a position where you keep your eye on the ball and you focus on putting yourself up, set yourself up so that in the future, you'll have more and more freedom. And one other thing is people have freedom. We mentioned like their goal is to get freedom. Most people won’t even take it. I for the longest time was not going to take the freedom I was given. Like, Sean, you have the ability to do this. Go with your heart. Do what you feel like is right but, again, that addictive drug kind of clouds our judgment and it takes a while to come to the conclusion. But with that being said, as an investor overall, number one is I like to get access to things that are off-market that people don't know exist. My challenge and this is a huge benefit to working with you is I don't have the time to vet everything. I mean, I've got a pretty busy schedule. I always believe to keep the main thing, the main thing. Just focus on building your business and so on. And then the investment world ends up being somewhat of a, lately, in the last couple of years, it's been something I haven't had the time to vet it as much as I would have liked to.
So, what was cool when I met you is you had the access to the deals I didn't really see and didn't know existed, and then you already vetted them for me. That doesn't mean I'm not going to bet on myself but if we get 10 deals, you've had them and you give me the three best ones, then now my vetting is really going to be a lot easier, and I just need to make sure that what you've added, it also is aligned with what my goals are for that portion of money. But that's been a huge advantage for me, Justin, knowing that you were doing a lot of the heavy lifting. And the way you view things as really an expert is something that I didn't want to be. I knew a lot but I didn't want to become an expert in each one of these sleeves or these types of investments. So, that's been a huge benefit.
Justin Donald: Well, I appreciate you sharing that. Thanks for the kind words and it's fun finding these deals that exist that most people don't know about. Then it's fun watching people's reactions when you're like, "So, we're going to do this and this,” and they're like, "What? You can do that?” “Yeah. We can do that. We can actually have cash flow, and we can get our principal back really quickly and we can keep equity in the deal even though we got our principal back quickly.” People, their minds are blown. They're like, "So wait, you're living off this income, and then you get it back and you invest it into another deal. So, you're compounding the same income, you're getting multiple investments on the same money, and then every time you pull it out, you still have equity in that deal. That's magic. Why have I never heard of this?” And so, I love watching people's response to that.
Shawn Sparks: Yeah. Well, the only way to true wealth, really, in terms of financial is with the equity component. So, often, we do things just for the income and when you realize that there's another game you can play where you can do it for the income, and you can add in also equity growth over time, that's the idea. That's what you really want to go after and do. That's why I like it. I mean, most people would take an investment that you'd share and I look at it and say the income is all it matters but it's pairing up the income but also having long-term equity play with it, which was really attractive to me, and it's worked out really well. I'll mention as I'm starting a new venture here and a new company, I think a lot of people as employees, and a lot of people, my younger self 15 years ago, they didn't really know the power of the equity. Now, my next venture is if you ever want true alignment with somebody, every employee that I have, I'm giving an equity position in my company because it's ironic that people say act like an owner, and then the employee says, "But I'm not one.” And if you want true alignment, it solves a lot of problems when you say act like an owner because you are.
That's what I've always believed. It's like, wow, imagine giving up a little bit of the value but at the same time, you're trading it for by decreasing the failure rate. You're increasing the odds of success because you've got somebody who is not corporate and just clocking in for the paycheck but they're clocking in and as the company builds, they're benefiting long-term. So, your deal’s a little bit of a segue. It's like your deals you're adding in the equity every chance you can, Justin, and sometimes they don't come with equity and you’re negotiating it in. But as an investor or even somebody who's just trying to put themselves ahead, just remember there's two parts of this and there's the income, and then there's the equity piece, and when in doubt, I like both if I can get it.
Justin Donald: I love hearing that and basically, what you're talking about is my strategy stack, right? It's the multiple areas of opportunity to, A, increase the return on a deal and, B, decrease the risk on a deal. I'm just so emphatic about that and I have a lot of different ways I increase the value through income amplifiers, which we just talked about several of them right now. And you're right, the way to gain wealth is through equity. Most people don't do that. Most people don't realize it. Those that do realize it, actually go about it the wrong way. Because if you're just investing for straight equity into a company, generally, the company probably isn't proven or, I mean, most companies fail. So, the majority of people that invest for straight equity, they lose their money because that's just the nature of business. Most don't work out and then a small percentage do. So, if that's your way of investing, it's actually not a good way. It would actually be smarter, in my opinion, to invest in a way where you cover all your expenses first, whether that's with no equity but if you can get equity along the way, get it.
Then from there, once you have cash flow, then that cash flow can go into owning equity in different things. So, that's just another way to look at it that I think most people have never considered before.
Shawn Sparks: I think it's something to keep an eye on. The income is what sets you free, that covers your expenses as you've described but if you can pair it in, where you get the equity or you can reinvest the income, that's an incredible place to be.
Justin Donald: Yeah. We've done several deals together like this, which is cool. I want to give you props again because you and I were two of the first people to invest in a handful of the deals that are now kind of commonplace in the investors club and inside the mastermind and inside of the private coaching that I do for really high net worth individuals. And so, it's neat seeing the effect that it's had positively on you and the cash flow that you gain, your ability to smoothly transition, your ability to grow and scale a business, and not have to worry if you're making a paycheck today or not. I love seeing that because it's like every time I talk to you, you're busy with different things but there's no stress about it, which is great. I mean, that's just so powerful. I love it. My voice is like so raspy. I recorded my audiobook for The Lifestyle Investor the last four days so my voice is barely hanging in there. This is day five now of a lot of talking. So, I apologize for the raspiness.
Shawn Sparks: Just recorded reading the book?
Justin Donald: Yeah. I'm so excited for it to come out. Really soon, really soon. So, I'm curious if there's anything else, any other thoughts you have before we transition? I've got a couple of things I want to ask you but anything else you want to share on investing in general, strategies, philosophies, lifestyle investing, any of the things that we've done together through the mastermind, the investors club? I'd love to hear it.
Shawn Sparks: Yeah. Well, everybody's in a different position. I think that the mistake a lot of people make is, as an investor, they limit their options. They limit their view and I think the earlier you start investing, the better no matter what because, again, short-term actions impact your long-term future. That's wisdom. Sacrifice today to put yourself in a place later. I had a quote that I put on Facebook like a long time ago, and it said, “I'll sacrifice my 20s to be successful in my 30s.” What I meant by that and the quote that I liked is, “I will sacrifice the expense as a 20-year-old. I will sacrifice the extra hour of reading and working. I will do all of this stuff in order to set myself up 10 years from today or 15 years from today.” That's when I was a young kid and I knew I wanted to have a family and I wanted to have these wonderful kids and I wanted to have time with my wife. The whole idea of day one was how do I create a high quality of life later? And it takes short-term sacrifices to do it.
So, that's the first thing, and then just I guess investing overall, it's don't limit your options. There's one thing that I've learned. It's like if you're going to do something, do it to the best of your ability and don't go in and just kind of like spend 30 minutes and say, "Here's what I'll do today.” Really take the time to invest. The best investment is your own knowledge. Take the time to learn. Take the time to read. Really vet it out and it's going to give you a huge advantage over time. Next, seek wisdom from friends and so on but there's a lot of people in the investment world that they think they're an expert and they have no clue what they're doing. There's a lot of like if you ask about your friend and your friend’s bragging about the stock he bought. This is not investment advice. This is his opinion and I'd be very careful to take advice from somebody who's not truly an expert. So, try to find the expert. Try to invest with experts. As you have that 1,000-foot view and you look down and you've got maybe a friend who's done well on the stock, and there are certain stocks and stuff, just remember, this is just an outlier event. This is just one person who may be their gut told them to do something. This is not something that you should follow as advice.
You need to find an expert. Listen to podcasts like today with you. You need to read books. I used to spend a lot of time in Barnes & Noble back in the day and just read about different things. All of that knowledge that you gain, as you research the right way to pursue wealth and to invest, that'll pay off so well, it's worth more than a great investment today, in my opinion, because that knowledge will keep you out of trouble to keep you from investing things you shouldn't. At the same time, it'll give you a leg up and help you just do that thing and so on and you'll see access to deals you never knew existed. So, that's one of the things I'm excited about, obviously, your podcast but the book going through that and refreshing a lot of what I've learned over the last couple of years. But I would just say that you're not going to get much in terms of results if you're kind of half-assing it, if you're doing it as a side project. You really have to find experts to work with such as yourself and you've got to find people to talk with that are professionals as opposed to just your little inner circle, which is going to really limit you in a lot of ways. So, that's probably the advice I would give.
Justin Donald: Well, those are some unbelievable nuggets, let me tell you, and I want to just say I've been impressed with you and how well-studied you are and how aggressively you read and consume information to become better at the things that you value most, and one of those is investing and you read a lot and you apply a lot of what you learn. I think it's great. And so, I also love the fact that when I vet deals, there's a handful of people that I trust to also vet them and I actually want their opinion. I value their opinion because they look at it, A, from a similar lens as me so they can understand how I'm looking at the deal but, B, from a different lens in a way that I may not be looking at it, and you're one of those people, Shawn. I love sending deals to you because I want to know how you're assessing and analyzing that information. So, I think it's great. I really value what you bring.
Shawn Sparks: I'll tell you, that's a great trait and that's something I saw on you. So many times, whether it's business or investing or whatever, people get an idea in their head and they're not willing to change. They're not willing to consider alternative views. And I will tell as just business sense overall, and whatever you're doing in life, one of the favorite questions I ask myself, I get really stuck on an idea and I'm like very passionate and I'll say, "Am I thinking about this the right way?” Just the question alone makes me become a student and gather feedback. I think so many people, they don't want feedback, they don't want an alternative view, and I love that about you, Justin, because I've seen this turn the course, change directions based on feedback and new Intel. I think that as a professional, no matter which way you look at it, like whatever you're pursuing, you've got to be humble enough to say, "Wait a second, I want to gain as much intel and information as I can,” and you can't be afraid to make a change based on that. I think it's foolish to gain new intel and not be willing to call an audible and to change.
So, I love that about you and, honestly, the whole group that we've been involved in. I've seen that a lot. It's not about just gaining feedback. It's gaining it and actually considering it and thinking it through and willing and being able to make a change based on that. So, I love that quality about you, buddy. It's not just the one guy who says, "This is how it's going to be. Here are my thoughts and here's what I've come up with. How do you guys feel?” and that's been a huge benefit. That's helped me in business overall because I got to be honest with you, anytime you're making decisions based on yourself, you're limiting yourself big time in terms of knowledge and wisdom. I think that, I guess, one of my favorite qualities is these new ventures going on as I'm a student, and I just honestly don't want to be the expert. I want to surround myself with experts, people who I believe can really help me and I'm not attached to any view. It's just really being humble enough to say, what's the right thing to do? What's the right way to think about this? And just always gather and seek wisdom from others.
Justin Donald: So true. In fact, my 10th commandment is it's all based on this, right? It's all about education. It's about peer group. It's about who you're surrounding yourself with, including mentors but also who do you spend the most time with? And then it's about who are you hiring to educate you? And so, what you're saying is so true. I want smarter people around me than myself. A lot of people like to be the smartest person in the room. I want to be the dumbest person In the room because I want to glean from everyone else and I want to allow their experience and their expertise to mold and shape mine, especially when a lot of the beliefs and thoughts and things that we consider real or true generally are taken from someone else, we just don't realize it. Most people don't sit down and actually formulate their own philosophies on life and philosophies on investing. You read this or you hung out with this person. And so, whether you know it or not, that you are influenced by their beliefs and by their thoughts and so I like to double-check and say, “Hey, is that someone else or is that me?”
It's the question you said. So, one of the questions I like to ask is, well, could the opposite be true? And if the opposite is true, what does that look like? And what am I missing? Because your brain is like a supercomputer. So, whatever you ask it, it's going to figure out. So, instead of asking limiting questions, questions that limit your abilities, like why can't I figure this out? It's like, well, what else may there be? Or what am I missing right now? Or what would Warren Buffett see in this deal? I love to constantly improve and sharpen my sword by spending time with smart people like you and many of our friends because it's just some of the most fun time that we have. It's just great. And to me, relationships are why we're here on this earth anyway to love people well, to be in a good community, to support and develop and cultivate just deep-rooted foundationally strong, just one-to-one type of relationships with people.
Shawn Sparks: I agree, 100%.
Justin Donald: So, I'm curious, what are you reading now? Or what have you recently read that has been inspiring to you or thought-provoking to you?
Shawn Sparks: So, I've got this is like, man, this is not just recently. I've been somewhat obsessed with the philosophies and the teachings of Naval Ravikant. This guy has been one of the best investors of all time but every time as he's grown and he's built himself and his business, he's always kept his eye on the thing that matters most, which is freedom and so on. And there was a book recently put out, it’s Navalmanack. It's basically all his teachings compiled into a book and like I just keep rereading and rereading and I'm like, how do we absorb this? So, I would say anybody who wants something to really just blow their mind and improve the way they think on life overall but how it equates to money and how those things come together? Navalmanack is what it's called. So, that's been great and I know we've talked about him, Justin. I've been fortunate to invest alongside him and some deals with you but his philosophies, I can't get enough of it. So, I'm reading and listening to podcasts and so on with him.
Justin Donald: I could not agree more. I feel like he is just captivating. It's not the way he talks. It's not like he has this ability with words. It's his that he has spent time. It's like what we just talked about. He actually spent time figuring out what his philosophies in life are. What does he believe about investing? What does he believe about life? What does he believe about work? What does he believe about family? I mean, he just has these solid-grounded principles around everything because he's given himself the space to think. I mean, that's one of his big things is not being in a world and I subscribe to this as well. Don't be in a world where you're reacting all the time to everything else, that stimulus is creating a reaction but put yourself in a place where you have time to think proactively for yourself. You turn technology off. You take a chance to just journal and let your mind roam and get clear on what it is that you want out of life and relationships and everything else. I just think his teachings are fantastic.
Shawn Sparks: Yeah. If it gives you a little bit of insight, I mean, he agreed to have the book written about his teachings if it was free. He's like, “I want it to be free for all.” So, like it was a free download so I don't know if you can put a link to it or whatever, Justin, but yeah, that's one. That's one that I'm really excited about and I just keep rereading and rereading. I've learned so much over the years from him and he makes you think, second guess yourself. He makes you second guess yourself and it all falls back to what's the purpose and that's something that I had to decide. I had to figure out what's my purpose in life and you have to make a decision too and it's not what everybody else says. This is a solo mission right here. With me, it's like, what do I want out of my life? What do I want to be as an example for my kids? And how do I want to lead the family? It's like I've got to come up with that. Some people, you're going to have a different outcome but he's challenged a lot of my thinking. And honestly, I don't know that I would have been able to make the change I did had I not been learning from him for, I don't know, probably five years and it's the tough questions that he poses, that makes me rethink and say, "Wait a second, Is this really the right path for me?”
Justin Donald: Yeah. There's no doubt and I love what he stands for. I think he's a great investor. I love investing alongside him because that is not my area of expertise. What he specializes in is startups and tech and his venture capital fund is he's had more success in the VC space than most people. He's hit more home runs and invested in some of the biggest companies because he sees the signs and follows the trends and kind of knows what's going to happen. And so, I don't like to invest on my own in that space because to me, it's a total gamble but if I invest in what he's investing in, I feel a lot better about it. I feel like there's at least I've mitigated some risk. There's still some risk involved and the reality is most, I want people to understand this, most of those investments in that space don't work out. When you invest in that space, you're looking for one out of the whole gamut of investments that makes it, and Naval even says that your best investors in the VC space there are people that they get one good one in their career, and then you're considered good, right? Not multiple. He's like, "If you have multiple, you're kind of like a unicorn,” but most people who invest don't get any, so it's a total waste of money, right?
You've invested in all these companies, they never make it, and you're early-stage seed in tech and so you got to be really careful in that space. I like it as a portion of your portfolio but not before cash flow is there. And I do like it once cash flow is there for some of the cash flow to be allocated to that part of it. Maybe it's 1% to 3%. I was recently talking with someone, a very successful investor that thinks 5% of your portfolio should be allocated to emerging tech in that startup space.
Shawn Sparks: Yeah. It's interesting. So, it's piggybacking off the experts. That's what we're doing here. The startup community, which is really just a high-risk deal, to your point, I think it's a 4% success rate. So, like, you're going into an investment with very, very low odds but if one of those hits, it creates the portfolio and the return for all of them has failed. But it's got to be a small sleeve. I think sometimes as investors, we get really excited about a deal, and then it's easy to over-allocate. It's putting too much in there. You've got to look at the broad view of your portfolio and making sure like the cash flow and stuff is all in place, so that if this I can afford to take the higher risk deal, knowing the portfolio will be finding their way, being very careful not getting too excited, and making sure the investment fits in the right place and you're careful in how that happens. So, there's a lot of potential issues you can have, and getting excited about business and just getting too excited. Just always pump the brakes a little bit, proceed with caution. That's what I try to do anyway.
Justin Donald: I like it. Well, Shawn, I have just so thoroughly enjoyed our time here, this conversation, all the value that you have brought to the listeners. I'm curious, where can our listeners find you if they want to reach out and learn more about Shawn Sparks online?
Shawn Sparks: I mean, obviously, you need the social media. You'll find me. I've got a very in progress, I'm just recreating the image of the new company and so on. So, my website ShawnSparks.com. There's some info there but it's purposefully not built out. So, as we're building this new venture on this new business, I'm in a business where you can't, this is kind of interesting, Justin, but you can't bring on an assistant, start bringing revenue in, and so on, and then hire another assistant. I'm in a business where you have to front-load the org chart. If you can't support the customer, you have no reason or you have no right to ask for any type of business deal. So, what I'm doing is I'm really behind the scenes right now assembling the team, building the model, building the org chart, so that when we're ready, we will have a value add for the customers that I serve. We'll be set and running. So, I'm purposefully not really too visible. but you can find my website, ShawnSparks.com, and that's S-H-A-W-N. And then, of course, you can find me on social media.
Justin Donald: That's awesome. Any final words for our audience?
Shawn Sparks: Yeah. I just say that I guess if I can sum up the changes that went on in my life, I was fortunate to have dinner with a billionaire about five years ago. And this is a guy that's been very successful and he said, in life, you can't be afraid to make changes. I took this from him and I was like, always thinking, where will this apply, but it's one of the things I told myself. It's like you can't be afraid of change because sometimes that's the only way by making a change, and changing environment is the only way you're going to learn. Growth is in my DNA. I've always pursued growth. And honestly, the amount I'm learning today as this new venture, it's more than I've learned in three years in my past life just because I put myself in a different environment and around different people and so on. So, I would say, overall, I would consider that for your own life is like, how do I get uncomfortable? Will that create change? Reason to change that's worthy. You don't make change to make a change. You analyze it every which way and identify what's right long-term.
But when you come with the answer, I think courage is more rare than genius and that's a quote, and you've got to be able to have the courage and confidence to say, “I'm doing this for the right reasons.” When it happens, it's amazing, the energy boost, and the fulfillment, joy. That's what I'm experiencing now and I don't know that I could have manufactured betting the other way. So, that's maybe the final words of encouragement for your audience.
Justin Donald: Well, I think that is truly inspiring and such great words. I just really want to encourage our listeners here, really just take some form of action today towards financial freedom in living the life you truly desire on your terms. Thanks for joining us and we'll see you next time.
Shawn Sparks: Thank you, Justin.
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