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Thinking about investing but not sure where to start? You may already be investing more than you realize. In this episode, Sharran challenges the traditional definition of investing and explains that investing is really about intentionally allocating resources to achieve a specific goal.
He breaks investing into five forms of capital and explains how money should be put to work, how skills grow through deliberate practice, and why treating time as a limited resource can completely change how you work and live. He also shares the 10-10 Forever Rule for intentionally investing in relationships and explains why your personal brand is built through consistent behaviors and proof instead of promises.
If you need a practical framework for thinking about where to allocate your most valuable resources, this episode gives you some interesting insights.
“People have got investing all wrong… investing is about having intentional allocation of resources to create an amazing life for yourself.”
~Sharran Srivatsaa
Timestamps:
00:00 – What investing really means
04:54 – How to make your money work through compounding
07:47 – How to invest in your skills through deliberate practice
09:10 – Why time may be your most limited resource
13:35 – The 10-10 Forever Rule for investing in relationships
18:34 – How to intentionally invest in your personal brand
Resources:
– The Next Billion by Sharran Srivatsaa
– Board Member: ARC Multifamily Real Estate Investing
– Board Member: The Real Brokerage
Connect with Sharran:
– X
– YouTube
– Threads
Transcript:
[00:00:00] Most people think that investing is buying the S&P 500 or investing in Bitcoin or flipping homes and buying real estate. I think the traditional definition of investing is completely wrong because people can misunderstand what investing is. Investing is actually the allocation of resources. All day, every day, I speak to CEOs and entrepreneurs on the businesses that we invest in, and I have this entire same plan that I tell them, which is investing in the traditional world is completely broken.
[00:00:29] So today I’m gonna explain to you exactly what investing is and what you need to do to become a great investor because you’re probably already doing it. Number one, let’s define what investing is. Investing is the intentional allocation of resources to hit a specific goal. Actually, there are five different types of capital when you actually invest, and I’ll tell you what those five are in just a second, but investing is the intentional allocation of resources to hit a specific goal.
[00:00:58] Now, why do you want to become a good investor? Why should you become a good investor? And I will tell you there are three reasons why. The first reason is that you are already an investor, meaning that 50% of our lives runs on autopilot. It’s just passive. You’re a passive investor in 50% of your life, meaning 40 to 50% of our life just runs on our natural autopilot habits and the practices that we do every single day.
[00:01:29] So the life that you have, half of it is essentially based on the autopilot of things that just run and work every single day. And that’s okay. That’s okay. But the second most important thing is this study that I read that was done at Stanford. It’s called The Odyssey Study, and it tells you about three paths that happen in someone’s life.
[00:01:51] It take pe- they set people down and they say, “Let’s, uh, let’s envision three paths of your life.” The first path, which is the current path, is where you stop and say, “If you were projecting five years from now and you change nothing about your current life, where would you be?” And you write that down.
[00:02:10] Then you take the alternate path and you say, if your current life and work and profession did not exist and they completely vanished, and you had to go to a completely different path, use that and say, “What would your life look five years from now?” And write that down. Then take the radical path. The radical path is where money, status, or any of the creature comforts that you are associated with, it did not matter.
[00:02:40] And if that was the case, and you had all of that taken care of, and that would put you on a third path, where would that… And what would you do and where would that path take you? Now, it’s not a… It’s, it’s actually a really good idea to go down these three paths because it allows you to realize one thing, which is it’s got nothing to do with the three paths.
[00:02:59] It’s got to do with the agency that you have to choose which path to take, because you can clearly switch the path. What is agency? The, your ability to make the next choice for yourself. No one is forcing you. You can have choice; your decision over asking anybody any permission. And that is the most important thing because we are naturally investing in our own lives, whether we like it or not.
[00:03:24] So asking the question why you should be an investor, this should completely change your mind. You have no choice. You have to be an investor. There is, there is, there’s no way that you can live your life if you actually figure out that you’re gonna go with the flow and let the secret figure it out for you.
[00:03:41] It is… That is not life. You have to take control and put your hand on the reins and ride this horse that is your life with full intention, because otherwise you will never get what you want. If you don’t know where you’re going, you will always get there, wherever it is, right? And the reason I’m telling you all of this is people then say, “Well, all right, Sharan, what should I invest in?”
[00:04:04] It’s not about whether you buy the S&P 500 or whether you buy Bitcoin or whether there is a 401match you need to take. That is… The tactics of that are completely irrelevant. What’s more important is to realize that when you invest, there are five forms of capital. Ca- what is capital? It’s a store of value that you deploy.
[00:04:22] It’s a resource, right? There are five forms of capital, and I wanna show you how to invest each one of these, because how you invest each one of these forms of capital is what is gonna change your life completely. The first one, let’s take the easy one, is money. How do you invest money? And for a lot of people, they’re looking for the next hot stock, the next best investment, the next cool tip, the next tax strategy.
[00:04:46] And I would say the, the way to think about investing money is really simple, is to just think about how can it compound? Because the job of money is to make money, right? If you take the money and invest it in something, what are you trying to do? You’re saying, “Hey, Mr. Money, go make some money.” Because if you walk into your office and you have 10 employees and each employee has a job, right?
[00:05:11] Well, if you walk into your office and each of them were hanging out and not doing any work, well, you’d be upset. So would I. Well, for most people, what they do is they take their cash, and they leave it in a bank account, and it just sits there. It’s called lazy cash. And the reason we don’t mind lazy cash is because it makes us feel better about ourselves when we log into a bank account and you look at our cash.
[00:05:32] But when you start saying, “If every employee needs a job, then every dollar needs a job,” and but what is, what is the job? The job is for the dollar to go out and make money for you. The job of that, uh, that dollar is compounding. So what is compounding? Compounding is getting, you know, manufacturing exponential growth.
[00:05:54] That is compounding, which means that the dollar compounds on itself. The money makes money for itself. And our job is to figure out how can we get into more compounding vehicles. I will tell you how I think about everything related to money: how long does it take to double my investment? There’s actually a rule in finance called the rule of 72.
[00:06:13] The rule of 72 states that you take 72 divided by any number, and it will tell you, which is the rate of return, and it’ll tell you how long it takes to double, right? So for example, if you take 72 divided by 15, which is 15%, it will take roughly five… a little over five years to double. So I know that if I’m getting a 15% compounded return, then I will double my money in five years, right?
[00:06:38] What happens to the S&P 500? I know the S&P 500 rough- roughly gets you, you know, uh, 10, say 10%. Well, 72 divided by 10% is 7.2 years. So roughly, it will double my money every seven to eight years. And if I start to know how to double my money, then it starts to help me understand how I’m actually able to get compounded growth, how I can manufacture exponential growth on the money that gives me money.
[00:07:02] The easiest way to think about money and how to deploy and invest money is to think about how fast it can compound and the rule of 72 and the ability for it to double. Super easy to do. You can talk to AI about it because when you look at an investment and it just says, “Oh, this pays you 7%,” it feels small.
[00:07:17] But when you start to realize that in seven years your 100,000 becomes 200,000 with you doing nothing, now you actually have that dollar do a job. So that’s number one, the first form of capital, which is money. The second form of capital is actually skill. Let’s say you have a skill to doing something.
[00:07:34] Maybe you are a doctor, maybe you are an athlete, maybe you are a graphic designer, maybe you are a content creator, maybe you are a copywriter, maybe you’re a salesperson. You have a skill that you can offer to the marketplace. Well, how do you invest in that skill? Well, the way you invest in a skill is to practice it.
[00:07:54] Well, we all know the late, great Mamba, Kobe Bryant. We all know. What did Kobe do? Kobe said that, “I want to be the best of the best, the best in the world.” He was already very talented, but he realized that most of his teammates were practicing doing two practices a day. So he said, “The only way I’m going to get better is to get more reps.
[00:08:13] If I need to get manufactured compounding, if I need to get exponential growth, the way I invest in myself is to invest in the reps of my skill.” And so he just spent more reps doing the thing. And so he got his first practice done at 4:00 AM, which now gave him three practices a day instead of two practices a day.
[00:08:30] Now, that feels heavy, but if you now take that over a year, he got, you know, 365 more practices. Those reps, that compounding allowed him to invest in himself significantly more because now he is an investor. He chose. He had the agency to invest in himself to develop his skill because his skill was what was paying him, right?
[00:08:50] Money, skill. The third is time Um, most young people don’t get this. So if you are under the age of 40, you will not actually realize the value of time because you just think you have unlimited time, and that’s okay because you think you have unlimited time. I will tell you the thing that changed everything for me is, uh, I put my birthday in the death clock online, and I started to realize that I only had X amount of time left.
[00:09:19] I, I also got this chart, uh, in my garage at home, which is your life in weeks. If you’ve not seen it, go, go check it out. It has got this big chart, and that every week for your entire life is set in a box, and all you have to do is just shade the box, and you start to realize that a significant portion of your life is already done and you don’t have a lot left.
[00:09:41] Until you can create a visual representation of what is happening with the time in your life, you will not appreciate being an investor of the time in your life. If you take nothing else away from today, take this: being an investor is being so, uh, deeply focused on how much time you have left. You have one life.
[00:10:02] Whatever you believe in that happens later, on this time, in this construct of human reality, you have one life, and you actually don’t even have one life because as… in, in the early parts of your life, you’re young and you’re trying to figure out how to be a student and, and learn the basic things of life.
[00:10:19] In the early stages of your working career, you have no experience. You don’t know anything about anything. You’re just figuring out life. And then in the middle part of your life, the golden years, where you’re like, “Man, I have some perspective of my younger self. I actually appreciate my parents. I love my relationship.
[00:10:33] I have a partner. Maybe I have some… Maybe I have children. Maybe I love my, my, my dog,” you actually figure out life, and then your energy starts to deplete, and you don’t have that going forward unless AI gives us this magic pill that we can all, like, you know, live forever on. Right now, we’re all limited to a life, and in that life, you don’t…
[00:10:50] it’s not the full life. It is only a portion of the life, or your golden years that you can actually do something with. I’m in my… I’m in my prime right now, and in… and I will tell you, it freaks me out. It freaks me out because now more than any other time, I have to be an insane investor. I have to say…
[00:11:07] Ruthlessly say no to things and yes to things with ultimate care that I was not able to say before because I thought I was invincible, and I thought I had all the time in the world. And I will tell you the simplest thing that you can do is when you sit down at your desk to work, you don’t start working unless you set a timer for what you’re gonna do for the next X minutes.
[00:11:29] So if you’re gonna work on email, put a 20 minute timer on your email and then work on your email. If you’re gonna work on a memo, put a one hour timer on your phone and work on your memo. That way you’ll start to realize you’ll have this calibration, this personal relationship with time. You actually know how long it takes to do a thing, and that is the best gift that you can give yourself because it’ll tell you how you could invest your time.
[00:11:51] There’s… I, I heard this great story about, uh, how roughly you have 1,440 minutes in any given day, and say 440 of those minutes you are sleeping and doing some personal work, so you have 1,000 minutes a day on how you choose to spend your time. And imagine this: you never get those 1,000 minutes back. You’re assigned the 1,000 minutes in the morning, your 1,000 credits, and you can choose to spend 100 of those 1,000 credits watching Netflix if you want to, or you can spend another 100, you know, going for a walk on the beach, or you can spend another 100 learning a certain set of reps, or you can spend another 100 working on your body to get six-pack abs.
[00:12:28] You can do any of those things, but you only have 1,000 minutes and it just… you lose all of them, and it resets the next day. My… If you take nothing else away from today, please take this. You have to give yourself a construct, a visual of how the time is working in your life. Uh, I, I heard this quote which is, uh, “You just spent one of the last minutes of your life.”
[00:12:53] And I didn’t realize what that meant, and I was like, “Man, my life is just shorter by one minute right now.” And that shit freaked me out, and it did, and that’s when I started to put so much focus, so much pressure, so much relationship that I said it’s so important that I have to tell you about this because it changed the way I live my life
[00:13:25] Money, skill, time. The fourth is relationships. Um, there’s nothing, nothing in life that at the end of the day is val- more valuable than your relationships. Because if you ask anybody what they want, like I, I, I… If you talk to somebody and who, uh, who has money and you say, “What do you wanna do?” “Oh, I just, uh, I want the flexibility so I can spend more time with my family.
[00:13:39] I want the, I… If I had more money, I would take my friends out to dinner.” Everything that people say, they say if they had everything in the world, you know what they say? They want– They say that they would do things with other people, ’cause it’s the– We are pack animals. Our relationships are what drive us overall.
[00:13:57] And I will tell you that as you get older, you will realize that you do not have the ability to maintain thousands of relationships. To do great things, we must do fewer things, and later in life it’s very difficult, and I’ll tell you why. When– why do people, why are there more, um, you know, relationships, romantic relationships, et cetera, that happen in high school or in college or in graduate school?
[00:14:26] Why? Because people are in the same zone in their life, so it’s easier to connect. But then once you get into the workplace, once you get older, trust gets very difficult. Relationships- how you invest in relationships is really important, and I want to give you a framework that I use to invest in relationships, and I call it the 10/10 forever rule.
[00:14:49] T- what 10 relationships can I invest in wholeheartedly for the next 10 years that will be a forever relationship, right? What 10 relationships can I invest the next 10 years that will make me forever? Now, you may say, “Well, what is investing in these relationships?” And th- how I think about investing is if that relationship was a startup and I was writing a check and I was being an advisor and I was being a support system, I would do whatever it takes to support that relationship.
[00:15:17] Meaning, the answer is always yes. Now, what’s the question? If that person started a business, I would buy products from them. If that person wanted an introduction, I would make them. I would connect them with other friends. I would go out of my way to get them the gifts for their birthdays and anniversaries.
[00:15:33] I would support their children. I would support their family. I would support their business. I would support their, uh, I, I would support their brands. I would do whatever it takes to support them. I… Whenever they asked anything, I would say yes without asking any questions. Those 10 relationships you can build and invest in for the next 10 years will pay you forever.
[00:15:49] Now, the crazy part is when I came up with this idea, I could not put 10 people on that list. In fact, I could only put one person on that list. One. And then I’ve added people to that list over time, and I’ve been doing this for 15-plus years. I remember the exact place that I was sitting when I did this on the Upper East Side in New York City at a Starbucks when I came up with this idea on 63rd and Third, right by Lexington, Lexington Station.
[00:16:14] And, and I realized that in the last 15 years, 95% of my net worth has come from seven people, those seven people that I put on that list. That’s crazy to me, and I think that people don’t realize that you think you can… You get irritated by, um, you know, the, uh, someone hating on you on social media.
[00:16:37] That is not a relationship that you should care about, and the only way you can’t care about it is if you have a framework to not care about it, to have a framework to not invest in it, have a framework to say, “Hey, that is not important to me.” Because if you don’t figure out how to make that not important, it will automatically become important because you will see the 10, 20, 30, 40, 50 comments from people that love what you said, but there’s gonna be one Eric31245 dumbass somewhere in the world that said something mean about your, your video, and you’re now irritated for the rest of life, which is crazy.
[00:17:12] And the reason you have that is because you have not figured out an investment framework for your relationships. I will tell you, it is impossible for me to maintain crazy relationships. I can’t do it, so I use only two frameworks, and I’ll say those two frameworks to you again. Number one, the 10/10 forever rule, which is: who are the 10 people that I’m gonna invest in for the next 10 years that will pay me forever?
[00:17:35] And the second is this, is to be where your feet are. Be where your feet are, meaning if I’m with somebody right now and I am talking to that person, I’m talking to that person, and when that moment passes and I’m not talking to that person anymore, I’m not talking to that person anymore, and I do not, do not care, but in that moment, I give them the entire gift, which is the gift of my attention.
[00:17:54] That’s it. Because otherwise, I will never, I will never be able to keep up with all the, with all the demand, with all the interest, with all the, with all the, the, the pings, dings, and bings coming at you. You will never win. Being an investor in your relationships will change your life forever, and that’s super, super important, right?
[00:18:16] Uh, the last but not least, on the fifth, uh, piece of capital is, is brand. And I say brand because I’m not suggesting that you have to go out and build a personal brand yourself. That is not what I’m suggesting. But every single person has a brand. When you walk into a room, you have a brand. So what is brand?
[00:18:38] Brand is association. They associate a set of things with you. It may be that you’re funny, it may be that you’re charismatic, it may be that you’re dependable. Your employer, your business partner, has an associated brand for you. They believe that you’re gonna show up, they believe that you’re gonna be a good friend, they believe that you’re gonna drop the ball, they believe that you’re always gonna be late.
[00:19:01] It’s a… They take a collection of behaviors, and they chunk it up, and they put those collections of behaviors and say, “That is Sharran’s brand.” Now, it is our job to intentionally invest in the brand that we want people to believe in. If you don’t have a vision for the future about what you want the brand, your brand to be, then everybody will make up their own story of that brand, and that’s the crazy part.
[00:19:25] So your job is to do what? Your job is to find a way to have a very clear vision of your brand because it doesn’t have to be online or offline, but you have a brand. You have a brand with your parents, you have a brand with your children, you have a brand with your partners, you have a brand with your friends, you have a brand with your coworkers, and it’s your job to intentionally invest in that brand so that it can give you the results that you want.
[00:19:46] You have to intentionally manufacture the credibility. So how do you intentionally manufacture the credibility? And you do that by showing proof. Proof is everything. It is not about the promise that you make. It is not about saying, “I’m gonna deliver this at 9:00 PM tomorrow.” That is not it. That’s a promise.
[00:20:04] What is more important is proof over promise. When you show them the evidence of the thing that you do, they start to believe you more. You know, the, um, if you’ve ever watched late-night TV, you’ll probably end up watching a George Foreman grill. The… If someone is selling you a grill, they can tell you, “Hey, I’m George Foreman.
[00:20:21] I was a heavyweight champion, and you should buy my grill.” Like, that… What does that mean? But if he actually cooks a steak and shows you how the steak got cooked, and if he showed you the infrared light, and if he showed you where you could put the tongs, and if he showed you how it cooked perfectly to the temperature, showed you it had a temperature gauge, if it showed you all of those things, there’s proof on the thing, so therefore you believe the brand.
[00:20:43] We have to find a way to show more proof in how we want to show up. So if you are a chiropractor and you want people to believe that you are a good chiropractor, you have to find a way to show proof that your, that your patients get relief by working with you. That may be doing a video about, uh, how everyone’s back pain is gone.
[00:21:02] That may be actually teaching people how to reduce their back pain. That may be about whatever you think that you could show proof to make them know that you know who you are and you are who you say you are. Proof happens everywhere. I tell my children, I tell my son, who’s 14 year old, 14 years old, to show me proof that he did the thing.
[00:21:20] And he’s like, “Dad, I thought about how I’m going to do this.” I’m like, “Write me a plan.” He’s like, “Dad, how do I write a plan?” I said, “Open Google Docs and write me a plan showing me this is what you did.” He wrote me the plan, and I said, “Would you like some feedback?” And I gave him the feedback, and he updated the feedback.
[00:21:34] Now I see proof of his thinking because now I believe what he’s thinking. He showed me what he’s thinking, and he showed me proof as opposed to just making me believe his promise. Our brands are very prevalent. Our brands are our reputations. Our brands are generated by this association. You can manufacture the brand.
[00:21:52] So I wanna give you this one piece of advice. When you show up either at work or at home, what do you want to be associated with? What are three to five words you wanna be associated with? Is it, um, is it, is it, you know, safety? Is it love? Is it caring? Is it hardworking? Is it work ethic? What I- what is it?
[00:22:15] Whatever that is has a behavior associated with it. Do you wanna show up on time? Do you say what you’re gonna do? You’re gonna, um, you know, uh, finish what you start. You’re gonna say please and thank you. What is it? If you figure that out, then you can just do those behaviors, and when you do those behaviors, you’ll get the brand associated with it.
[00:22:31] People have got investing all wrong, and you want to, you want to trash the old methodology of what people think about investing and actually know that investing is about, uh, having intentional allocation of resources to create an amazing life for yourself, and the way you do that is by doing it with agency and doing it with care because when you intentionally allocate resources, you will have an amazing life