EVERY SPOKEN WORD
115 min read · 23,207 words- 0:00 – 15:00
Hello there, friends. Before…
- CWChris Williamson
Hello there, friends. Before we get into today's episode, I wanted to give a big thank you to everyone who has supported the podcast over the last couple of weeks. Earlier this week, the episode with James Clear landed the show in the top 50 podcasts worldwide, which was a lovely thing to wake up to on Tuesday morning. So, thank you very much for sharing it. The feedback I've had over the last few episodes has been so fantastic. And, um, yeah, uh, I, I have to pinch myself every day to realize that I actually get to share oxygen, or bandwidth sometimes, with literally some of the cleverest people on the planet. With that in mind, I thought I would give you a quick rundown of some of the upcoming guests. So, on Monday, Professor David Sinclair from Harvard Medical School, one of Time Magazine's 50 most influential health professionals on the planet, talking about whether or not a human can live to be a thousand years old. Rachel Kleinfeld, who advises the UK and US government on how to govern correctly, Tim Briggs from We Dominate Nutrition, Don McGregor, COO of Social Chain is back again, Theo and Eve from The Social Minds podcast, George McGill, innovation lead at Media Chain. But today we're talking all things money management with Chris Hutchins, who is the CEO and founder of Grove. He, uh, started a company called Milk, which got acquired by Google in 2012, and then he spent most of his time at Google as a partner, uh, helping startups and investing in early stage companies. So this guy knows what he's talking about. I really enjoyed the conversation. I can't wait to have him back on as well. Please welcome Chris Hutchins. Mr. Chris Hutchins, how are you?
- CHChris Hutchins
I'm great, how are you?
- CWChris Williamson
Welcome to the show, man.
- CHChris Hutchins
Thank you.
- CWChris Williamson
Very, very happy-
- CHChris Hutchins
It's good to be here.
- CWChris Williamson
Very, very happy to have you on. We're talking all things money today, right?
- CHChris Hutchins
Yes, yeah, it's been, like, the obsession of my life. (laughs)
- CWChris Williamson
(laughs) Well, I think it's the obsession of a lot of people's lives, right?
- CHChris Hutchins
Yeah, yeah, I mean, it's something that causes more stress than anything else, uh, for most people.
- CWChris Williamson
Yeah, I, I couldn't agree more. So, for the listeners who don't know who you are, could you give us a bit of a background?
- CHChris Hutchins
Sure. Uh, where do I begin?
- CWChris Williamson
(laughs)
- CHChris Hutchins
Uh, you know, the whole, my whole life I've been obsessed with money, but more professionally, I spent the last, you know, 10 years in startup land. Um, I got my first job out of college, uh, thinking I should go into investment banking and management consulting, and ultimately got laid off, which gave me this opportunity to take what, you know, isn't very common in America, but effectively was like a gap year later in life, where I, I took seven months with, uh, my now-wife and we traveled, came back in about 2011 and was like, "This is the industry I'm gonna work in." And have been working in Silicon Valley for tech companies, starting tech companies, uh, sold a company to Google, spent some time at Google investing in startups, and, you know, ha- ha- have basically lived my entire last decade in, immersed in Silicon Valley.
- CWChris Williamson
(laughs) That must be pretty crazy. It seems like such a fast-paced, very quickly moving environment.
- CHChris Hutchins
It is definitely that. It is a wild place to be. You know, companies are growing. You know, I look back to, you know, I tried to pick the hottest company to work at when I first got back from my trip, and it was a company called SimpleGeo that ended up not working out, and my wife, uh, took a job at a company that neither one of us were all that convinced at the time, you know, would be the biggest company, you know, possible, and, you know, now it's, it, it grew into Lyft, and-
- CWChris Williamson
(laughs)
- CHChris Hutchins
... uh, she's been at Lyft for nine years. And so, it's one of those kind of crazy adventures where you never know what, what's gonna happen. You know, it might be six people in a small room that, you know, now is a 5,000-person company.
- CWChris Williamson
Yeah, totally. I was reading an article recently about the electric scooter, um-
- CHChris Hutchins
(laughs)
- CWChris Williamson
... Bird and, uh, the, uh, what is it? Lime? Is it Lime Scooters?
- CHChris Hutchins
Bird has them, Lime, Spin, Scoot, Lyft has some. It's a-
- CWChris Williamson
Uber's getting into it as well, right? They're trying to buy someone, and they've already, the, I think they've already-
- CHChris Hutchins
Yeah, they bought a company called Jump that has bikes, and I don't know what their scooter plan is, but it's, yeah, it's crazy. You know, I was in LA this weekend, and there were so many scooters-
- CWChris Williamson
It's everywhere.
- CHChris Hutchins
... everywhere. It was crazy.
- CWChris Williamson
Yeah, I went to LA last summer, and I, I couldn't, I was like, "What, uh, is this a trend that no one's told me about? Like, why is everyone whizzing around on electric scooters?" But, uh, I was reading, I think it was towards the back end of last year, that the valuation on those companies went like, 500 million, 1 billion, 10 billion, like, month on month on month. I think that was what happened with Bird or something like that.
- CHChris Hutchins
It's been really, really crazy. So, uh, I, Bird and Lime and, yeah, it's, it's kinda wild. Um, I don't even know how to think about it.
- CWChris Williamson
(laughs) But this must be, uh, maybe not t- to that kind of degree, but these crazy take-offs must kind of be ten a penny in, in Silicon Valley. There's always someone on the up and someone on the down, and...
- CHChris Hutchins
Yeah, I mean, I spent about three years at Google Ventures investing in companies, and, uh, you know, we probably invested in 300 companies in the, the time I was there, and, you know, every week, month, it's, it's, you know, a different trend. You know, one month it's, you know, we've got to invest in all... There was four companies at one point in time that help you sell a used car, and it was like the hottest market. Everyone, you know, everyone was investing in companies that help you sell a used car, and, you know, now I don't think any of those companies are around. Uh-
- 15:00 – 30:00
(laughs) …
- CHChris Hutchins
You know, no affiliation to them, but Y-N-A-B.com. U- stands for You Need A Budget. Uh-
- CWChris Williamson
(laughs)
- CHChris Hutchins
... it's a great, like, tool that you can use to kinda forecast out, you know, w- your spending. And, you know, they take this idea that I think's really meaningful of, you know, allocating your spending in advance, which forces you to prioritize what you care about. Um-
- CWChris Williamson
Ah, yes.
- CHChris Hutchins
... an interesting thing I learned was, you know, I really value experiences and, like, you know, trying new things, and whether that's going to some kinda show or taking a class. But when I looked at my spending last year, I realized that it made up, like, less than 1% of all my spending. And so my wife and I were like, "Well, this isn't make sense. Like, if this is a thing we care about a lot, why are we spending more money on all these other categories?"
- CWChris Williamson
Mm-hmm.
- CHChris Hutchins
Um, so I tell people, like, "Step one is really just figure out where you're at. What, what is your total, you know, sum of all of your assets minus your debt? And then what are you, what are you able to save or spend each month?" So you can take what you earn, you can take what you spend, and kind of look at the difference. And that kind of ultimately ends up being how much you can save each month.
- CWChris Williamson
Yeah. The, I've seen a number of adverts for, uh, online banking facilities that will break down your spending across multiple different areas. So it's like this much on leisure and this much on food and drink and this much on coffee or whatever it is that... Coffee probably actually makes up a fair proportion of a lot of people's yearly spending. I'm gonna guess in Silicon Valley it'll be like 20%.
- CHChris Hutchins
Yeah. (laughs) I mean, it depends. If you w- w- work at a startup, you probably get free coffee, but, uh, if you're a freelancer, you probably, coffee is your price of office space. Uh-
- CWChris Williamson
Well, it's your lifeblood, isn't it? Yeah.
- CHChris Hutchins
Yeah. So, you know, it's, those, that's a first step is just, where are you at? Because to kinda think about anything down the road, you need to really figure out where you're at. Um, you know, I always think, like, a good second step from figure out where you're at, but then it's like, let's build a, kind of an ini- initial foundation. So the, the first thing that I think everyone should probably do is put aside some type of emergency fund. Um, you know, if you have a really, really stable job working for the government, maybe it doesn't have to be that big. Maybe it's, you know, two, three months of income. If you are freelancing and you never know where your next job's coming from, maybe it should be six or even 12 months.
- CWChris Williamson
Yeah.
- CHChris Hutchins
Um, but, you know, set aside some money that, you know, you can be ready to weather whatever unexpected expense or situation comes across, because the last thing you wanna have to do is have a situation arise and, you know, sell a retirement portfolio or, you know, borrow money.
- CWChris Williamson
Mm-hmm.
- CHChris Hutchins
Um, and, and I always tell people that, you know, I'd recommend putting it in a high-yield savings account or something that earns some interest, um, you know, because if you leave it in a checking account at the bank, it probably won't earn enough interest.
- CWChris Williamson
I agree.
- CHChris Hutchins
Um-
- CWChris Williamson
You, um, you started up a website, right, just after 2008 that was, that I guess would've been s- similar to, uh, the nightmare scenario that we're talking about here if you get laid off?
- CHChris Hutchins
Yeah, so I started this thing called Laidoff Camp, and we did events around the country trying to help people figure out what to do after the 2008 financial crisis. And, you know, I was fortunate that I had saved up a little money, so when I needed to, you know, supplant my income with something, I had it. But, you know, one of the reasons a lot of people came to the event was they were like, "I, I don't have any money." Like wh- And so we had, they went, "Can I learn how to freelance, how to start a company, how to get a job?" Because, you know, they didn't set aside an emergency fund.
- CWChris Williamson
Yeah. Have any-
- CHChris Hutchins
Um-
- CWChris Williamson
... of the, uh, any or many of the guys and girls who you met at those events, have they gone on to do any cool stuff? Or do you keep in contact with any of the people who you met then?
- CHChris Hutchins
Yeah. It was really funny. We're, we're talking about, at my current startup, well, you know, a bunch of different tactics for growth. And my co-founder handed me a book and he was like, "You should read this book. It's amazing." And I looked at the au- author and I was like, "Man, that name's so familiar." And I was like, "Oh my God, this is this guy that got laid off, and he helped organize the layoff camp in LA." Uh, and like, he went on to become a well-known person in the growth community and write a book and all this stuff. And I s- shot him a note and I was like, "This is so wild. Congratulations," all that kind of stuff. So yeah, definitely I keep randomly seeing people from, from that stage of my life go on to do amazing things.
- CWChris Williamson
That's so cool. It's brilliant to turn around, uh, stick a big middle finger up at people that laid you off by becoming ridiculously successful.
- CHChris Hutchins
Yeah. I mean, you know, I think about that all the time. (laughs)
- CWChris Williamson
(laughs) Yeah. Yeah. We, um, me and the co-hosts on the show are, uh, all self-employed or to one degree or another. And, um, uh, there's ... I think making it on your own or going for it on your own is a really cool idea for a lot of people, but the reality can be, it can be quite cutthroat. I'm gonna guess in Silicon Valley that's like the, the tip of the spear for, for people in cutthroat industries going off on their own.
- CHChris Hutchins
Yeah. I mean, it's this thing that almost maybe has become too sexy, right?
- CWChris Williamson
(laughs)
- CHChris Hutchins
Like, everyone wants to go start a company. And sometimes I meet people that, you know, they just feel like it's the thing they have to do and they haven't even thought about it. They're just like, "I gotta start a company. That's what everyone does." And I'm like, "Well, you don't have to start a company." Like, there are a lot of other options. But everyone's like, "I just want to start a company. I want to start a company." So-
- CWChris Williamson
Yeah.
- 30:00 – 45:00
Yeah. …
- CHChris Hutchins
a bunch of pieces of a bunch of companies that own property, and they all rent them out. So, you know, I've chosen to say instead of me managing a rental property, instead of me managing owning a small piece of ten different start-ups, I'm going to invest in a diverse portfolio with a bunch of index funds that invest in all of those things. So sure, you could say I have, you know, uh, thousands of income streams because I'm invested in a thousands of companies.
- CWChris Williamson
Yeah.
- CHChris Hutchins
But, you know, effectively, I have an investment portfolio and a job. Um-... I'm not personally, you know, trying to do anything else. Uh, running a company is enough, uh, work for me that I'm not trying to, you know, have seven side hustles.
- CWChris Williamson
Yeah.
- CHChris Hutchins
Um, but yeah, I mean-
- CWChris Williamson
It's, it's a, it's a balance, I suppose, between the time that you have available-
- CHChris Hutchins
Yeah. And so-
- CWChris Williamson
... and, and also how much money you want. Like, 'cause if money's not big-
- CHChris Hutchins
Yeah, how much money you want.
- CWChris Williamson
... if money's not a big deal to you, then like, just do your minimum effective dose to live, and then spend the rest-
- CHChris Hutchins
Yeah.
- CWChris Williamson
... of your time like chilling out.
- CHChris Hutchins
Yeah, so I always say like, "Step one is figure out where you're at. Step two is kind of build your foundation. But then step three is like actually make a plan," right? So what are your goals? If your goal is to own a Ferrari, well, you might need to save more money. But if your goal is just to like live a comfortable life with your family and, you know, the extra money that you could save might prevent you from spending time with them, like, you might not actually want to go get that side hustle.
- CWChris Williamson
Yes. Yeah, couldn't agree more.
- CHChris Hutchins
So I always say like, "What do you want?" How ... "Do you want to retire really early? Do you wanna buy a home?" Like, you know, "Do you wanna start a company? Do you wanna pay for your kids to go to a private university?" Um, like, "What's the most important thing to you?" And when you prioritize those things and kinda figure out what they involve, like that's when you can make real decisions. But if you've never really thought about it, you know, sometimes I see people spending money when they haven't realized that they care about things more than spending, right? You mentioned coffee. Uh, let's say you go buy your $5 latte every morning, sum that up over the year, and you're like, "Wow, you know, that's actually, you know, could have been, you know, a couple thousand dollars maybe."
- CWChris Williamson
Yeah.
- CHChris Hutchins
Um, but if you ask the someone, say, "Hey, you know, do you ... Is that coffee, does that get you through the day enough that it's worth, you know, you know, over a decade or so being able to save up your, part of your kid's education?" And someone might say, "Oh my gosh, when I think about it like that, no. But before, I hadn't made any plans and so I wasn't thinking about it in any way." And I think that's where it gets really tough, is if people aren't thinking through all of these things in advance.
- CWChris Williamson
I couldn't agree more. So my business partner, Darren, and the guys in the office that are listening right now will know what I'm going to say, but Darren's ethos is always that if you times any number by 52, it becomes fucking massive. And it's like (laughs) when, when we're looking at our set of company accounts and we're like, "Oh, well, we could, we could chip this off here, or we could knock a couple of hours off there," and at the time, it doesn't really feel like that big of a deal. But like, if we can save five quid across four shifts on one particular club night, it's £1,000 a year. That's ... At the end of the year, there is £1,000 more because we-
- CHChris Hutchins
Yeah.
- CWChris Williamson
... we, we knocked four by £5 off a couple of shifts once a week, and you're like, "Holy fucking shit." Like, (laughs) "That's so much money." And I know that that's literally the most basic of maths, it's 20 times 50, but it's just so much money.
- CHChris Hutchins
Yep.
- CWChris Williamson
Like ...
- CHChris Hutchins
Yeah, it's, uh, it's really easy to think ... You know, we, we think about that, you know, how much money do we wanna spend? We, we provide lunches at the office and we are like, "Well, you know, when we were small, it didn't really matter whether we went to a place and it was, you know, ten bucks or twelve bucks, like, uh, or eight bucks, it didn't matter." But we're like, "Wow, when you multiply five lunches a day by twenty f- employees, by, you know, fifty, you know, five days a week, times tw- you know, fifty-two weeks-"
- CWChris Williamson
Oh, wow.
- CHChris Hutchins
... like all of a sudden you're like, "Wow, if we can s- cut a dollar per lunch off, we save a lot of money."
- CWChris Williamson
Yeah. You're giving my business partner an aneurysm now at the moment, with him hearing those-
- CHChris Hutchins
(laughs)
- CWChris Williamson
... (laughs) hearing those figures. Um, so in terms of ... We've spoken about the fact that, uh, generating extra streams of revenue might not be something that's for everyone, but I'm going to guess that dialing down your spending or at least not having, uh, frivolous spending is a, uh, uh, a principle that most people probably should and could stick to. Have you got any, uh, sort of hacks or principles that you like to use when it comes to, uh, tightening the, the sort of, uh, belt buckle, so to speak?
- CHChris Hutchins
Yeah, I mean, I would say it's not necessarily all of the spending, right? It's not ... I wouldn't say frivolous spending. Well, frivolous, by nature, probably, you know, that word might imply that it's not necessary. But, um, there are some people that if you look at, you know, if you've already figured out what you need to save and you're already on track for it, um, you know, what you might be able to do by saving another thousand dollars a year might not be worth it, right? Like, you might say, if, for m- you know, for me to cut another $3,000 out might mean I can't take another vacation, and what would I get from saving 3,000 more dollars a year? Maybe what that gets me is like, you know, slightly better lifestyle in retirement. But if I've already saved enough to live the lifestyle I want in retirement, maybe the best thing is to keep spending the money on travel.
- CWChris Williamson
Yeah.
- 45:00 – 55:55
No, it usually is.…
- CWChris Williamson
Like, that could be their retirement fund. That could've been them working their whole life.
- CHChris Hutchins
No, it usually is. (laughs)
- CWChris Williamson
And they think-
- CHChris Hutchins
It usually is.
- CWChris Williamson
... "I'm gonna go," you know, "I'm gonna go in with my paycheck and I'm gonna speak to this guy and he's gonna be charming and then he's gonna give me this information that's gonna completely screw me over." So I mean, was there not, was there, did no one tighten up after 2008 with stuff like that?
- CHChris Hutchins
Uh, they tight- the, the companies tightened up to make sure the banks didn't lose more money. Uh, but yeah, no. I, I just, uh, I pulled up an article. It says, "Currently, advisors in the UK are bound by the FCA's conduct of business rules, but have no formal legal duty to act in the best interests of the clients at all times."
- CWChris Williamson
(laughs) God.
- CHChris Hutchins
So-
- CWChris Williamson
Oh, God.
- CHChris Hutchins
... that doesn't, you know. That was my, you know, quick, 10-second research so I could be-
- CWChris Williamson
Well, man, it's, hey, I, if, if it's happening in the US, it makes me, it makes me think it very well might be happening here. So if you're using a financial advisor, for the love of God, please double-check what they're suggesting that you do. Um, is, is there any-
- CHChris Hutchins
Yeah.
- CWChris Williamson
I, I'm gonna guess that you will be, uh, an anomaly in the industry with having this fiduciary kinda commitment?
- CHChris Hutchins
Yeah, so still, the, the good news is like one in ten advisors in the US do take on a fiduciary responsibility to their clients at all times. Um, you know, in the US, it's often called a fee-only advisor, meaning we only, we only make money from the fees our clients pay us. Um, it's actually pretty easy. Uh, in the US, if you just ask any of your financial advisors, say, "Are you a fiduciary?" You get one of two answers, "Yes," or you get this weird answer-
- CWChris Williamson
Uhh. (laughs)
- CHChris Hutchins
... that's like, "We really care about our customers."
- CWChris Williamson
(laughs)
- CHChris Hutchins
But, uh, there's a, there's a John Oliver who, who does a show on HBO, skit, uh, all about, you know, finance and retirement plans and the fiduciary responsibility that's quite funny, um, digging into how crazy it is and how possible it is for people to say they're acting in your best interests but not. Um, so I, I would say if you're ever going to hire someone to help you with money, just dig into this and like really understand the, the legal, you know, obligations they're taking on, and you know, I would encourage people that if your financial advisor is not taking on a responsibility to legally act in your best interests, and I don't mean like, "I care about you." I mean, legally-
- CWChris Williamson
(laughs)
- CHChris Hutchins
... if you ever determine that I sold you something that wasn't in your best interests, like, there is a legal responsibility I have and, and you can, you know, fight that.
- CWChris Williamson
Yeah. Yeah. I mean, I ... sh- that's the first thing you gotta ask, surely. Like, "Are you, are you gonna be the guy who takes my money or are you gonna be the guy that makes me money?" Like, that's-
- CHChris Hutchins
Yeah, but you would be surprised at how good a salesman can answer the question of, "Are you acting in my best interests?" And make you feel good.
- CWChris Williamson
Slippery and snaky answer.
- CHChris Hutchins
Yeah. It's unfortunate. I wish there was just like a, like a health score. You know, you walk into a restaurant and you're like, "Oh, you have a D? I don't wanna eat here."
- CWChris Williamson
(laughs)
- CHChris Hutchins
But like, you know-
- CWChris Williamson
(laughs)
- CHChris Hutchins
... there's no ... Imagine if every financial advisor just had to like put a red X on their forehead if they didn't act in your best interests, it'd be great.
- CWChris Williamson
That would be much easier. There's a, speaking of the, uh, hygiene ratings, there is a Subway right in the middle of Newcastle which scored a zero stars out of five food hygiene rating. For anyone-
- CHChris Hutchins
Wow.
Episode duration: 55:55
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