EVERY SPOKEN WORD
115 min read · 23,207 words- 0:06 – 2:24
Show milestone, upcoming guests, and why Chris Hutchins is the money guest
- 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.
- 2:24 – 4:08
Hutchins’ path into startups and the reality of Silicon Valley growth
- 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.
- 4:08 – 7:14
Hype cycles, trends, and what investing at Google Ventures looks like
- 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-
- CWChris Williamson
Oh.
- CHChris Hutchins
... maybe one of them is, but, you know, it was such a frenzy for a very short period of time. It was pretty crazy.
- CWChris Williamson
Where are those signals coming from?
- CHChris Hutchins
... you know, this, like, weird hype cycle of fear of missing out, and things happening at the same time, and people getting scared, and you know, people seeing big markets and opportunities and not knowing how it'll evolve, and all that kind... Uh, it comes from everywhere, but yeah, it's pretty, pretty crazy.
- CWChris Williamson
Yeah. Uh, uh, it must be, it must have been a, a bit of a baptism of fire, working in that particular department at Google.
- CHChris Hutchins
Yeah, it was awesome. Like, you know, you just get to intimately see all of the crazy stuff that's happening-
- CWChris Williamson
(laughs)
- CHChris Hutchins
... and, uh, you know, I can't imagine anything better than, you know, getting that exposure. Especially, I didn't know I wanted to start a company after that, but, you know, that was, you know, great exposure to all the ups and downs of entrepreneurial life before you leave to go, you know, take on that job again.
- CWChris Williamson
Yeah, for sure. It's like a one point six bar pressure washer hose-
- CHChris Hutchins
(laughs)
- CWChris Williamson
... straight to the face of (laughs) like, high volume startups, right?
- CHChris Hutchins
Yeah, I mean, uh, where else do you get to learn about, you know... I, I must have seen a thousand pitches and-
- CWChris Williamson
(laughs)
- CHChris Hutchins
... you know, we did a few hundred investments. It's just crazy, you know, you get to see it all.
- 7:14 – 11:19
What makes a strong startup pitch: founders over forecasts
- CWChris Williamson
So, if you were to pick out some of the elements of good pitches, is there any, any things that stood out that you thought, "I need to, when I'm considering, uh, doing my own stuff," are there any principles from that that you thought were super good?
- CHChris Hutchins
Yeah, I mean, I think something sometimes people overlook is that, you know, VCs aren't necessarily... Like, the details of the numbers at the early stage are secondary to the person in the room. And so, you know, the whole thing starts with, like, is this a person that can achieve this wild, ambitious thing? And when that wild, ambitious thing is so far away and so big, you know, it's less about you showing that here's how step-by-step the numbers work over the next 10 years, 'cause like, it, none of that is, like, ever gonna actually be true.
- CWChris Williamson
(laughs)
- CHChris Hutchins
It's more, is this the person that cares about this enough to deal with all the crap that comes with starting a company? Do they care about this industry enough, the problem they're solving enough? Can they hire the right people? Can they build the right team? And it's, it really comes down to, to the founders, and if you can buy into the founders, and they're not building something in a tiny marketplace, um, and you have either the reason to believe that they could build the product or they've already demonstrated they can build it, like-
- CWChris Williamson
Mm-hmm.
- CHChris Hutchins
... you know, a lot of the other stuff is much less important at the early stage.
- CWChris Williamson
Yeah, so enough caffeine before you go in? Like, the-
- CHChris Hutchins
(laughs)
- CWChris Williamson
... the right level of caffeine concentration in your blood?
- CHChris Hutchins
Yeah, you've got to be excited. Like, if that doesn't shine through, you have bigger problems. Like-
- CWChris Williamson
(laughs)
- CHChris Hutchins
... you have to be passionate. I always tell people, like, the number one skill of a founder is storytelling. It's not, um... You know, there's all these other things that matter, but if you can't walk into a room and tell a story that gets people excited, you know, you won't have the opportunity to talk about your management skills or your product skills or your marketing skills.
- CWChris Williamson
Yeah, you gotta get yourself through the door first. Steve Bartlett, the CEO of Social Chain over here in the UK, which is a big social media agency, pretty much one of the main reasons why that company has been successful is because of Steve's personality. That they, the guys at Social Chain, and one of my buddies Peter was like one of the first 10 employees, and this, this company's massive now. They've got offices in New York and they're expanding all over the world, and they did Manchester United's, like, uh, marketing campaign and et cetera, et cetera. And, um, one of the main areas of their marketing strategy is get Steve in front of a big crowd of people, and then someone spend a lot of time on his LinkedIn as soon as it finishes-
- CHChris Hutchins
(laughs)
- CWChris Williamson
... (laughs) because, like that's what happens. You put him in a room, and he just, uh, people just gravitate towards him, um, and he seems to have that allure and, uh, and that energy that sells people. Especially when you think about a company like that, and you know, a lot of the listeners may be working in digital marketing, social media marketing, or you know, an, uh, an easy side hustle at the moment because I still don't think it's a saturated market for small businesses, is to start doing social media consulting. Like, if you're like a, a Gen Y-er and y- you've grown up on social media, you understand how it works, but there are, within an, a 20 mile radius of you- where you live right now, there's probably a hundred coffee shops and cafes and sandwich bars and all the rest of it, who don't even have like a, a Google or Yell listing. Like-
- CHChris Hutchins
Mm-hmm.
- CWChris Williamson
... they, they won't exist online. And you know, a common side hustle for those people is to, is to be able to get into this, and for Steve to set himself apart and to really convince the old guard of marketing that social is a way to go and they should strongly consider portioning off a lot of their income, a lot of their marketing budget towards that, is just him selling how excited he gets (laughs) about social media. He's like, he's like-
- CHChris Hutchins
Yup.
- CWChris Williamson
... like a, like a young Gary Vaynerchuk from the UK.
- CHChris Hutchins
(laughs)
- CWChris Williamson
But less, less sweary.
- CHChris Hutchins
That's amazing.
- CWChris Williamson
He's a bit, he's a bit less sweary.
- CHChris Hutchins
Yeah, I mean, Gary is like just, has such an intense personality. I owe a lot to him for, you know, p- pushing me. I've known him for, um, easily over 10 years, but, uh, yeah. Like some people just have that ability to captivate an audience at any point in time, and, and can do a lot of good with it.
- 11:19 – 13:32
Transition to personal finance: why nobody is taught this stuff
- CWChris Williamson
That's fantastic. So, we wanted to talk a little bit... We had, we had a lot of requests for advice for peoples' personal finances, and I think that as exciting as it is, I do want to hear some more stories from Google. I think we'll come back to that in a bit. But, um, a lot of people... I, I, I certainly didn't learn basics of anything to do with how to manage my own finances. I didn't understand, before I went to uni, I didn't understand what an asset or a liability was. I didn't understand (laughs) how a mortgage worked or anything like that. So, do you have some principles that you stick to for your personal finances?
- CHChris Hutchins
Yeah, and first off, like, you're not alone, right? You know, it's, whether it's the UK or the US or probably anywhere else, like we're not... It doesn't seem like anyone's getting taught these principles in school. Um-... and, you know, there was a world that, you know, my parents kind of grew up around but maybe didn't grow up in, where, you know, you work for a company for 30 years and that company takes care of you for the rest of your life. And, you know, they pay for everything later and, um, that's great. But it doesn't happen for us now. And with so many people being, you know, freelancers and self-employed and, you know, the average t- time I think people I know change jobs is, like, you know, three or four years, not 30 or 40 years. So-
- CWChris Williamson
Yeah.
- CHChris Hutchins
... you know, we don't build up a, a pool of retirement assets or pensions tied to a company that's enough to sustain us. So we kind of really have to figure it out on our own. Um, education just hasn't caught up, so it's kinda frustrating for a lot of people.
- CWChris Williamson
I couldn't agree more. The, the only reason that I'm in any way slightly capable with my finances is because I've got two business partners who are fantastic, and there's been, like, a, a trickle-down effect. I've been kind of begging in the gutter, like, just desperately trying to glean any last little second nuance of, of understanding about how to organize my money. And then, you know, the fact that I've managed to not bankrupt myself is probably a testament to their abilities.
- CHChris Hutchins
Yep. That makes sense. (laughs)
- CWChris Williamson
(laughs) So with regards to, uh, where people should start or how they should consider or look at their own personal finances, where do we begin?
- 13:32 – 16:37
Step 1—Know your starting point: net worth, accounts, and cashflow
- CHChris Hutchins
Man, so, you know, m- I, I have a typical, like, how do you think about this, where do you begin concept, which is like, you know, step one is just, like, start to take ownership of what you're thinking about. Um, you know, learn the concept of assets and liabilities (laughs) and, you know, summarize where you're at. You know, first, first thing I think everyone should start to do is just understand where they're starting from. You know, make a list of all the accounts they have, make a list of, you know, the ones that have positive balances, whether that's brokerage or, you know, you know, a savings account or an invest- retirement account. And then also look at, you know, anything that's, that's, you know, falls into the debt camp, you know, whether it's a credit card or a mortgage or a loan. Um, you know, when you add up all the positives and subtract, you know, everything else, you end up with your net worth, which I think is something that a lot of people have never taken the time to look at, but it's kind of like a core thing to start with when you're trying to figure, figure out where you're going.
- CWChris Williamson
Yeah. What, what am I, what's my current worth at?
- CHChris Hutchins
Yeah. And then, so I, uh, you know, i- in accounting terms we'd say, like, "Make your balance sheet and income statement," which scares people, so-
- CWChris Williamson
Mm-hmm.
- CHChris Hutchins
... we'll avoid those for the rest of this conversation.
- CWChris Williamson
(laughs)
- CHChris Hutchins
But the other one is just to figure out, like, how much are you spending and saving? Um, you know, there's a lot of ways to do that. Some people are really diligent and they say, "I put everything on one credit card," and so you could just go look and say, "Well, this is how much I spend." And some people aren't, uh, and they might need to use a, you know, software to track it or, you know, a spreadsheet. Uh, there's a great app, um, called YNAB. 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.
- 16:37 – 17:44
Step 2—Build the foundation: emergency fund and high-yield savings
- 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-
- 17:44 – 19:53
Lessons from the 2008 crisis: LaidOff Camp and why cash buffers matter
- 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.
- 19:53 – 23:59
Work, meaning, and the long retirement problem (living longer, saving earlier)
- 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.
- CHChris Hutchins
... um, it is kind of funny that, you know, I see that happening, you know, wildly all over the place.
- CWChris Williamson
Do you think that that's a byproduct of people being kind of disenchanted or disenfranchised with their current work? Like, if you have a normal job where you don't feel like you have a lot of meaning ... I was listening to Johann Hari's book, uh, uh, Lost Connections, which is, uh, about the causes of depression. And in that, he cites a, a statistic that says 20% of Americans are actively unhappy at their job, actively unengaged. A further 60% are indifferent. And only 20% are actively engaged. And when you think that you're spending, you know, between 35 and maybe 50, 60 hours a week doing this particular thing, and it forms the basis for who you are, right? Like, when you meet someone, the, the questions you ask is like, "What's your name? Where are you f- where are you from? And what do you do?" It's like your name and what you do are ... Like, they might as well be the same thing, right? It's, "Hi, my name's Chris. I'm a club promoter," blah, blah, blah, whatever it might be. And I think that people being so unhappy with that leads them to kind of maybe knee-jerk in the opposite direction and go, "Right, well, what's the exact opposite of what I'm doing now? 'Cause if I'm unhappy doing this, then the right thing must be complete opposite, i.e. start a company."
- CHChris Hutchins
Yeah. It's, uh, it's funny. It's kind of been this weird shift where I'm not convinced that 30 years ago people thought about it like that, right? Like, you know, all ... It seemed like everyone I've talked to, you know, that's been in the workforce for 20, 30 years, the, the idea is like you work to live. And, you know, now there's this mind shift of like, "No, no, no, I have a lot of freedom and, and responsibility over what I do. I'm gonna live to work and, you know, I want to be fulfilled every day of my life." And, you know, that sometimes has a problem with personal finance because, you know, if you're like, "Oh, I don't love this job, so I shouldn't do it," it's like, okay, that might be true, but like you also need to be able to provide for your family. You need to save for the future. Uh, I meet people in their 30s and sometimes I'm like, "Hey, you know, how, how long do you want to live? You know, how long do you think you're gonna live?" And they're like, "I don't know, 100." And I'm like, "Okay, well, you know that if you're, you know, 30 right now and you're gonna work till you're 65 and then live to 100, like, in the next 35 years, you have to save enough money to live for 35 more years."
- CWChris Williamson
(laughs) That's such a good point.
- CHChris Hutchins
Like, so, you know, like, i- it's crazy that, you know, you end up needing to save, like ... You know, almost as many years as you work you need to save for. Um, and a lot of people are like, "Well, when I retire, that's when I'm gonna travel." I'm like, "Okay, well, your expenses are gonna go up, so you need to save even more."
- CWChris Williamson
(laughs) Yeah.
- CHChris Hutchins
So it's just, uh, you know, I think people need to find a balance of like, you know, working to ... Everyone should try to be fulfilled in their work and do something they're excited about, but not lose sight of the fact that they also probably have some responsibilities to themselves, to their family, that, you know, sometimes I think might come in the way of, of, you know, trying to find the dream job, which, you know, I, I worry that there isn't really ever the dream job.
- CWChris Williamson
Yeah. The, the analogy of the, uh, it being too sexy of an idea, like it is the hot new girl at school that like (laughs) everybody, everybody wants to, wants to be going out with. You are, you are totally right. Um, so we've talked about, uh, understanding our, uh, current sort of capital worth. Um, we've spoken about, um, trying to forecast as well, look at where we're at now and then also forecast that forwards. How much money have we got coming in? How much money have we got going out? What would you advise for people who are thinking, "Right, okay, I've, I, I've got myself to that stage." What goes-
- CHChris Hutchins
Yeah.
- CWChris Williamson
... what comes next?
- 23:59 – 25:36
Step 3—Eliminate high-interest debt and maximize retirement contributions
- CHChris Hutchins
Yeah. So the two big things I think that come next are, like, make sure you don't have any high-interest debt. Uh, it's amazing how often I find people that have the means to pay off high-interest debt, but just haven't for reasons that, you know, they never pro- did the math, right? People don't think about ma- you know, finances like spreadsheets or like I would. Um, and ...... you know, so I went in and, you know, looked at the situation. I was like, "You have credit card debt. It's at 22% interest. Like, you have the money to pay it off. Why aren't you paying it off?" And the answer's sometimes, it's like, "Well, I didn't wanna dip into my savings."
- CWChris Williamson
(laughs)
- CHChris Hutchins
And I'd say, "Well, is your savings earning 22%?" And they're like-
- CWChris Williamson
(laughs)
- CHChris Hutchins
... "No, no, no. It's earning 1%." I'm like, "Well, then you should definitely, definitely, like, pay off your 22% debt to, with your interest, savings that's only earning 1%." But, you know, it's not something that people always think about. So-
- CWChris Williamson
Yeah.
- CHChris Hutchins
... like, a big thing. So set aside some money in case something happens, pay off high-interest debt, whether that's credit cards, personal loans, that kinda stuff. And then the other is, like, make sure you kinda dial up retirement contributions. Um, you know, you can't wait till you're retired to s- you know, get the tax benefits of a lot of different retirement contributions. And so, you know, whether that's pensions in the UK, 401 (k) s in the US. You know, you know, I think in Australia, you get superannuation, and your company does it all for you, which is great. But, uh-
- CWChris Williamson
Oh, nice.
- CHChris Hutchins
... you know, here, here, if you don't put money in in one year, you can't get that credit for the next year. Like, you're capped each year at how much money you can set aside for retirement tax-free. So-
- CWChris Williamson
Right.
- CHChris Hutchins
... you know-
- CWChris Williamson
Can you-
- CHChris Hutchins
... I encourage people to make sure that they do that early because you can't, you can't play catch-up, like, uh, like you might wish you could later.
- 25:36 – 29:20
How a 401(k) works and why compound interest rewards early action
- CWChris Williamson
Like overpayments or whatever. Can you briefly, 'cause I, uh, the only time that I've heard 401 (k) mentioned is in, uh, Die Hard 4.0. Like, that's, that's, like, the only time (laughs) that I've ever heard it mentioned. Can you, for the Brits that are listening, can you briefly explain what it is or how it works?
- CHChris Hutchins
Yeah. Um, 401 (k) s, right?
- CWChris Williamson
Yeah, yeah.
- CHChris Hutchins
Lo- yeah. I just lost audio for one second. (laughs) I was like, when you said that one word.
- CWChris Williamson
(laughs)
- CHChris Hutchins
Um, yeah. So in the US, we have this system where you can put aside a certain amount of money each year. Um, you can choose whether you wanna pay the taxes now and never again, or not now and when you retire. Um, so, you know, uh, in the US, you're allowed to contribute personally tax-free up to, it keeps changing every year, but about $19,000 a year. Um, and so you ha- uh, there are employer-sponsored plans, um, so that, you know, if you're self-employed, there's a whole different system. And if you work in a government entity, there's on- yet another different system. If you work for an educational comp-, like, a teacher, there's a different system. But the most common one for working at private companies is a 401 (k) . And it's just an account that you can put money in, invest, uh, those funds in mutual funds, uh, you know, whatever, whether it's stocks or bonds or real estate. And, um, you know, at the end, the most common one is you put your money in tax-free while you're working, and then you earn all the, you know, capital gains and interest over time. And then when you retire, you only pay taxes when you take the money out.
- CWChris Williamson
Mm-hmm.
- CHChris Hutchins
Um, and presumably, the, the idea would be that, you know, when you're working, you're in a higher tax bracket than when you're not working. So you get both the benefits of being able to invest your money, you know, before you pay the taxes and not ha- you know, paying, hopefully, lower taxes when you take it out.
- CWChris Williamson
Oh, yeah. Awesome. That's a really, really good s- setup. I don't (laughs) , I don't fully understand how the UK pension scheme works. I mean, it's not a million miles away from that, but I, uh, I don't know about the caps. I don't know about the 19,000. What's mad though, like, you think, like, if you, even if you take 19,000, if that's the maximum that you can save, if you, if you don't have surplus income on top of what you're earning per year, except for that, for a retirement fund, and we roll forward the 35 years to earn 70 years of living, uh, analogy (laughs) that you used earlier on. Like, $19,000 a year is like, you, you're gonna have to really get up towards that, right?
- CHChris Hutchins
Yeah. So, you know, there are some interesting things about compound interest. Uh, you know, the best example I have is, you know, if you had two friends and one of them was saving $3,000 a year, um, from 25 to 35, and then stopped. They just saved 3,000 a year for 10 years.
- CWChris Williamson
Yeah.
- CHChris Hutchins
And then you've got another friend that saved $3,000 a year starting when they were 35, all the way till 70. And so they're saving for 35 years, and the other person's saving for 10 years. Um, you know, the first person's ended up contributing $30,000 to their savings. The next person contributed 105. But if those accounts grew at 7% a year, the friend that put in the 30,000 in, for only 10 years would have more money than the person who put in $3,000 a year for 35 years. Um, so the, I mean, the math, you know, it, it ends up that that 10- that money can grow so much more because the interest is growing for longer, and you started it earlier.
- CWChris Williamson
Uh-huh.
- CHChris Hutchins
Uh, so I would say, you know, if you put in $19,000 a year for 30 years, you're gonna end up with a lot more than, you know, 30 times 19,000. Um, but if you wait till you're, you know, five years from retirement to start savings, you don't have the, you, to start saving, you don't have the time to benefit from all that compound interest.
- 29:20 – 34:02
Income streams vs simplicity: job + diversified portfolio, then set goals
- CWChris Williamson
Yeah. I get that completely. So would you recommend, um, or how much do you tend to recommend to people to try and have m- multiple revenues of, uh, multiple income streams?
- CHChris Hutchins
Yeah. So, you know, I think I might deviate from, like, the zeitgeist of, like, internet money hackers that are like, "Find your side hustle, find your multiple streams of income, buy rental properties." Like, you know, uh, I have two income streams, right? I have a job, and I have an investment portfolio. And in that investment portfolio, I might invest in stocks. I might invest in, uh, REIT funds, which are, you know, kind of effectively investing in a fund that holds 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)
- 34:02 – 38:34
Spending optimization without misery: values-based cuts, not blanket frugality
- 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.
- CHChris Hutchins
Um, but if I haven't gone through the process-
- CWChris Williamson
It comes back to making a plan, right?
- CHChris Hutchins
Exactly. If you haven't figured that out, you know, for most people, they haven't figured that out, for most people, they're probably not saving as much as they should. And so, you know, broadly speaking, yes, it's like very common that I talk to people and a good thing for them to do is to spend less money. Uh, I just don't wanna make the blanket statement because for some people, you know, keeping their current level of spending or potentially even increasing it ... Um, you know, I'm so frugal with money that I have friends that are like, "You realize, like, if you just, you know, die and have all this money, but you've never spent it, you wouldn't have lived a good life. Like, why don't you live a little? Like, you know, why don't you, you know, get the nice, uh, entrée instead of like ei- you know, split it with your wife 'cause you don't wanna spend the extra twenty bucks?"
- CWChris Williamson
(laughs)
- CHChris Hutchins
Um, you know, so-
- CWChris Williamson
Uh, uh, I couldn't agree more.
- CHChris Hutchins
I'm just this crazy optimizer that, you know, probably could afford to not optimize as much and, you know, optimize for convenience. And so, even though we can bring dogs to work, I finally buckled down and hired someone to come walk our dog during the day-
- CWChris Williamson
Yeah.
- CHChris Hutchins
... because, you know, I can just get so much more done when I'm not thinking about having to leave and take the dog out and schedule meetings around it, uh, so-... it's just hard when, you know, my wi- brain is just wired so much differently to save every dollar.
- CWChris Williamson
Yeah, I get that. And also, having your dog in the office is gonna be like, yeah, it might be distracting, but it's fun. Like it's nice-
- CHChris Hutchins
Yeah.
- CWChris Williamson
... it's nice to have dogs around, right? Their morale. Good little, little-
- CHChris Hutchins
I, I think so.
- CWChris Williamson
... furry pals of morale.
- CHChris Hutchins
Um, though at some point, you're like, "Oh, wow, we have so many people that work here, uh, maybe the problem is like, we can't have a dog in the office every day, because, you know, people are allergic." Like all these things when you're a small company that you don't think about.
- CWChris Williamson
(laughs)
- CHChris Hutchins
Now, you become a big company, and you're like, "Well, we have 30 people, like, maybe someone's actually allergic to dogs, so we can't-"
- CWChris Williamson
Yeah.
- CHChris Hutchins
"... have a dog in the office."
- CWChris Williamson
Oh, man.
- CHChris Hutchins
Yeah.
- CWChris Williamson
Don't hire them. If someone, if just, uh, no, they're not allowed. Uh, they have to sit in their own cubicle over the far side, and everyone else can play with the dog. That's how, that's how I think it would work. But yeah, I, I totally get what you mean. I think I'm wired a similar way to yourself. Uh, I remember a couple of years ago, in Asda at like, 2:00 in the morning, after I'd finished work at one of our club nights. It's 2:00 AM, and I'm looking at the difference between like, the value yoghurt and like, the finest yoghurt. And I'm like, having an existential crisis about which of these yoghurt do I, do, do I get the value... Oh, well, I mean, it's 20, 25 pence more to get the other one. I'm stopped and kind of checked myself. And I was like, "What on earth are you doing?" Like, just, just pay 25 pence, like, you work so much, just put the 25 pence yoghurt into your basket and get out. It's two, 2:00 AM. But yeah, uh, uh, people tend to be wired in one of two ways, I, I, I think. And you've got the ones who are maybe on our side, fighting about the yoghurt, and then you've got some people who maybe, uh, maybe could do with tightening up a little bit.
- CHChris Hutchins
Yep. (laughs)
- CWChris Williamson
Yeah.
- CHChris Hutchins
I'm the same way. And it's, my, people are, think I'm crazy. But, um, you know, I've got like, 15 different credit cards, and I decide which one and, uh, you know, to use, based on whether it earns more points on certain things.
- CWChris Williamson
Wow. That is, okay, yeah, that's, that's a- another level. So I wanted to, uh-
- CHChris Hutchins
(laughs)
- 38:34 – 48:26
Grove: making fiduciary financial planning accessible (and the advisor conflict problem)
- CWChris Williamson
... (laughs) I wanted to move on to the company that you're at now. I wanted you to give us a little bit of background about that, and, and, and tell us what's going on.
- CHChris Hutchins
Yeah, so... Oop, I just dropped the microphone.
- CWChris Williamson
(laughs)
- CHChris Hutchins
Uh, yeah, so right now, I left Google about two years ago, to start a company called Grove. And you know, what we realized was, no matter how much I wanted people to build cashflow models for themselves and forecast out all of their spending, m- you know, the reality is, many people, you know, uh, get enough overwhelmed with personal finance, that they're not gonna do their own financial planning without some help.
- CWChris Williamson
Mm-hmm.
- CHChris Hutchins
Um, and the industry has evolved to a place where the only support is for people who already have a million dollars. You know, like, that's the industry is like, "We'll, manage your money, but only if you have a lot. And if you don't have a lot, maybe we'll work with you, but we're gonna charge you, you know, a few thousand dollars a year." And everyone doing this is, you know, old school, and you know, prints out 100-page documents. And so, the vision was, how do you build a company, um, that uses enough technology to make financial planners efficient enough, that when someone says, you know, "I want help, I wanna figure out what I should be doing with my money, I wanna organize things, I wanna, you know, talk to someone about my goals so that we can put together a plan and make sure I'm on track." Like, we can offer that to you for less, you know, less than half the cost of the, the rest of the industry. Because, you know, they're still doing in-person meetings and having you write things on pieces of paper and, you know, scanning them in, and you know. So we built our own technology stack, that lets our team of financial planners, uh, work with people, uh, at much less, m- much less a cost than a traditional financial planner.
- CWChris Williamson
I'd, yeah, it blows my mind that that isn't more common.
- CHChris Hutchins
Yeah.
- CWChris Williamson
Like it's, absolutely blows my mind. Like everyone, you've already said, most people don't r- have a natural ability, unless you are my business partner, but he's a freak of nature, and he was, he was born like, with a laptop, uh, building spreadsheets. Um, if you're not, if you're not wired like him or, or yourself, like, where do you learn this stuff from? Like, you have to be deep down in the Medium archives or living on Reddit, or like, God knows where, to be able to get this. So, the fact that you can't... And you are right as well, like, you think financial planner, you're like, "Oh, my God, uh, velour, uh, curtains and a Montblanc pen and a Chesterfield red sofa and a smoking jacket and oak everywhere in this huge, big building." You do, you think like, "Oh, it's, it's built for millionaires."
- CHChris Hutchins
Yep. And so, I always say like, "If you don't have a million dollars or you don't wanna spend thousands of dollars a year, and you don't wanna learn it yourself, you're kinda outta luck." Like, there isn't really a good alternative. Um, so that was why we started the company. We thought that there should be an alternative. There should be a company out there, built from the ground up with, you know, the responsibilities of putting a customer's interest in fir- first. Uh, I don't know how this is in the UK, but in the US, um, there's this rule called the fiduciary rule. And, um, you know, it'll, it doesn't, it's not a mandate. Which, so the fiduciary responsibility means you're required to act in your customer's best interests. Um-
- CWChris Williamson
Uh-huh. I've heard, I've heard of that on movies before.
- CHChris Hutchins
Yeah. It is not required that financial advisors in the US be fiduciaries. So, nine out of ten financial advisors in the US are not required, or do not hold themselves to a standard of acting in their customer's best interests at all times.
- CWChris Williamson
But whose best interest are they acting in?
- CHChris Hutchins
Uh, often the company's.
- CWChris Williamson
Oh, my God.
- CHChris Hutchins
So, it's totally legal in the US to be a financial advisor and recommend products that cost twice as much as other products, uh, and you make the money that's the difference. Totally fine. And that's how the industry's evolved. Um, so when we started the company, we were like, "Well, we're not gonna do that." So we decided, "We're gonna be fiduciaries. We're gonna always act in our customer's best interests. We're not gonna make money selling other products, like most of the people in the industry do." Uh, and that's rare, unfortunately, um, but it's kinda what we believe in.
- CWChris Williamson
That is so, I'd love to find out, anyone who knows whether or not this is the same in the UK, please do drop me a message and let me know. Because if it's, if that is the same in the UK, that is such a stupid loophole.... like-
- CHChris Hutchins
Yeah, they, they tried to pass a law in the US last year, uh, or the year before, and it didn't get anywhere, and it was gonna require that anyone that helps people with their retirement plans, uh, is required to act in their client's best interests. Um, the problem is, there's like 20 giant institutions in the US that would just go out of business instantly because their entire business is selling people things that don't meet that level of responsibility.
- CWChris Williamson
This is like the-
- CHChris Hutchins
And big, big companies. Big, big financial institutions, like ones, you know, like the entire business is built on selling life insurance policies-
- CWChris Williamson
Oh my God.
- CHChris Hutchins
... that aren't good for you. (laughs)
- CWChris Williamson
This is blowing my mind. Like, uh, it, it sounds to me like the financial services equivalent of, uh, medical and pharma companies advertising on TV. Like, that, that's, it, it, like, you do not necessarily need this particular thing, but we're gonna force it down your neck in any case. Like, uh, uh, that's how it seems to me. We don't have that in the UK. We don't have the, the big pharma advertising stuff in there, and I'm really, really hoping that we don't have financial advisors that are able to give advice (laughs) that's like just sniffing people.
- CHChris Hutchins
And get paid for it. It's possible.
- CWChris Williamson
And making money off it.
- CHChris Hutchins
It would be totally legal for me to say, "Pay me and I will give you advice, but I'll turn around and sell you something that you might not need." Uh, it has to be, what, what ... I forgot what the exact term is. It has to be like directionally right. So if you tell me that you want to invest in the stock market, I can't sell you a bond.
- CWChris Williamson
Right. Yeah.
- CHChris Hutchins
Right? But if you say you wanna take a long-term risk and that's aligned with stock market, I can say, "My company offers a fund that is not very different from the fund that has no fees, and our one, our fund takes 2% of your money every year." That's totally fine. As long as it's directionally ... You know, it can't be the wrong type of investment. So it's crazy. Um, one, you know, they, I keep hearing that states might start trying to pass these laws themselves because they can't get it passed at the federal level.
- CWChris Williamson
Yeah, mm-hmm.
- CHChris Hutchins
Um, but yeah. It's unfortunate.
- 48:26 – 55:55
Peloton ‘hack’ story and the closing principle: save in the right places
- CWChris Williamson
Yeah. But, uh, that's the, that's the food equivalent of the financial service manager who's just taken your money. So, um, one thing that I did notice very briefly before we go. Uh, on your Medium, you were talking about hacking a Peloton, uh, bike thing?... and-
- CHChris Hutchins
Yup.
- CWChris Williamson
... uh, for the listeners who don't know, a Peloton's kind of like a live guided cycle workout that you do at home, and there's a screen, and there's like a trainer. It's kinda like spinning class, but you don't actually have the person there in front of you, right?
- CHChris Hutchins
Yeah, yeah. It's like doing SoulCycle or something like that in your living room. Um-
- CWChris Williamson
Yeah.
- CHChris Hutchins
And, you know, I don't ... Uh, being an entrepreneur, you don't have a lot of time. Um, working all the time, so I didn't have, you know, I wasn't taking, taking the time to go to a fitness class and everyone, you know, was talking about Peloton, these bikes are beautiful, but you can actually get all their classes f- uh, on the app for, you know, way less expensively than buying this $2,000 bike.
- CWChris Williamson
Yup.
- CHChris Hutchins
Uh, and so I went on the adventure of buying a spin bike and, you know, attaching a couple different Bluetooth trackers to it-
- CWChris Williamson
(laughs)
- CHChris Hutchins
... and mounting an iPhone to it and, you know, connecting it with AirPlay so I could watch the course- the class on my TV. And the irony behind this whole thing, which I feel guilty, uh, about is that a friend of mine who had a Peloton moved and sold me at used, and I gotta say, as much as I wanna be like the man of the people and say, you know, "Build it yourself," the real thing is so good.
- CWChris Williamson
(laughs)
- CHChris Hutchins
Uh, and so I'm not sure I could tell you to pay full price 'cause it's so expensive, but, uh, you know, it's like there- you could find 10 smartphones that tell you they do every single feature the same as another one.
- CWChris Williamson
Yeah.
- CHChris Hutchins
Um, but at the end of the day, I still have an iPhone.
- CWChris Williamson
Yeah.
- CHChris Hutchins
Uh, so, you know-
- CWChris Williamson
Man, I-
- CHChris Hutchins
... it's one of those things.
- CWChris Williamson
It's- it's- when you're stuck between a rock and a hard place, and the thing is as well, the degree of satisfaction that you will get from being so frugal, like the- the inherent joy of like blasting the system and being like, "No, no, fuck you. Like mine cost $175 and yours was 2,000," is gonna be worth- is gonna be worth a lot, but you think like, (sighs) the real thing's just nice and it's there and it's ready.
- CHChris Hutchins
Yeah, I don't think I realized ... And so what I would say is, if I hadn't realized how driven I am by competition, uh, the one thing building your own Peloton won't let you do is it won't log your, you know, your workouts in the app because the bike is not actually connected to Peloton.
- CWChris Williamson
Yes.
- CHChris Hutchins
So one time I was staying at a hotel that had a Peloton, and I got on a ride and I saw real time like my friend's stats versus mine and I was like, "Man, in that one bike ride, he was like a little bit better." And I was like, "I'm gonna do the same thing tomorrow morning. I'm gonna destroy him." Like I am just going to-
- CWChris Williamson
(laughs)
- CHChris Hutchins
... like out-cycle him. And that moment I was like, "Oh my gosh, I think I burned 20% more calories in a workout, uh, knowing that I was trying to beat my friend than I did before." And I was like, "I will pay for something that allows me to get 20% more workout in the same time."
- CWChris Williamson
Yeah.
- CHChris Hutchins
Um, but I have friends that like, they have a real Peloton and they're like, "Oh, I don't like riding with friends. I don't like the competition." I'm like, "Oh, you should definitely make a fake one." Only different.
- CWChris Williamson
Yeah, exactly. I've got this fake one at home. I've got this one that I've already built.
- CHChris Hutchins
Yeah.
- CWChris Williamson
It's a v- I got old Bluetooth and there's AirPlay and all this sort of stuff. So I think what- to- a nice concluding note there is that we can say save money, but save money in the right place and not in the ...
- CHChris Hutchins
Yeah. Make a plan. Make sure that the places you're saving money are driven by what you care about. Um, and so I- you know, there are people that might have, uh, well spend a lot of money on fitness, but it's really important to them and like, that's fine. Right? Like the reality is if fitness is more important to you than where that money could go, that might not be a bad use of it. But if you haven't figured out whether, you know, it, you know, you need that money to do something more important three years, five years, 10 years, whether it's buy a home or start a family, like it's really hard to make those decisions. And, you know, the unfortunate thing is the best way to do it is to build a cash flow model for the future of your life, uh, and, you know, run a bunch of simulations, which effectively is the software we built for our advisors.
Episode duration: 55:55
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Transcript of episode 0ZTIy7nmOb4
