– That is the best thing you
can do as a rich person to have A friend who has a jet
versus having your own jet. And I have so many friends who have jets, And then they complain to
me like, "Man, you know, My microwave went out on my jet. It cost me 30 or $40,000 to
replace this stupid thing," Or like, "Oh, I'm stuck in
O'Hare, and it's really snowing, And they charged me like, 20
grand to defrost my plane," Or like, something like that. Like, those kind of things
would just really irk me, And I just can't do it. (bright music) – You're making these smaller investments. You had a friend you've got who said, "Hey, just create a fund, I'll
make a bigger investment." Now you're kind of in the
middle of this evolution. – Yes. – You get a little older into your 30s, You're more mature, you
know, you're married, Starting a family, all this
stuff, and now, you know, You mentioned your income numbers now. You're just, you're
generating a lot of income, And it's like, investing
the income and recycling it As investments come to
fruition and liquidate. At what point did you say, "You know what? I really need a family office. I need something more
structured to just manage Our family wealth, our legacy wealth, Our generational wealth"? – Yeah, so it was never a
moment where I thought like, "Hey, I need to actually
create a family office," And I don't really consider
it a family office, Even though you can say it's fractional. It was more so, "Hey, I
need help, and I need people
To help me with some of these tasks," Like the taxes, and there
was some legal stuff, And I have tons of
trusts, a grantor trust, And dynasty trust, and like,
this all starting to add up, And then it just becomes a real headache From the management perspective. – Yeah. – And then my wife manages
our philanthropic arm, And there's not really an arm. She just, I call it a tear factor. Me and my friends, we joke
around, we call it a tear factor. The more my wife cries,
the more she donates, Based on the foundation pitching her. And I'm very logical, you know, Like, there's food banks
and all this kind of stuff, And my wife is focused on a lot of like, Things for children
like education, poverty, And all that kind of
stuff, and I'm more like, "Well, we're funding this program To help fight poverty for children." What were the stats and the data On how many less children went hungry Because of our donations and
all the donations they got? And my wife more looks at is as like, Well, you can't think like that, you know? Like, they're making- – Well, you know, Neil, my
experience, you need, okay, In a family office, this is
actually a discussion I had With Dany Roizman, who
manages a family office For a lot of ultra high
net worth investors. You kind of need both in a family office, The right brain and the left
brain, and managing the money. And then to your point, the
philanthropic arm, you need The more creative and
human-centered, heart-centered stuff,
Because that's the heartbeat of a family. Families don't run on dollars
and cents or even logic. Like, let's be honest.
– You're right. – Families don't run on logic, right? But at the same time,
you're an entrepreneur, You're numbers focused,
you're very logical. I mean, obviously you're
a super intelligent guy, But my point is like, It's not good or bad or better or worse. You kind of need a system
or way to organize it all And kind of get it all
running and humming, And to that, you need
external help, right? And you said you don't
consider it a family office. It might be a multi-family office Or shared family office or whatever. I might call it a family office, Just because it's a better podcast title, But so you know, you kind of
mentioned, you and your wife, You kind of have different
roles, which is good, right? Complementarity. What kind of external help or what kind Of structure do you use
to kind of help guide you And to cut down on the headaches,
can I call them headaches Involved with all this? – I call them, so we have a team. Let's just say there's
one person that I talk to Who deals with everything, right? And he deals with the
headaches, and then from there, He hires people and deals
with everything from lawyers, To accountants, to people
who deal with trusts, To people who are analyzing
some investments like stocks, And keep, you know, our angel
investments, things like that, Although I don't really
deal well with people Who are giving me angel deals
or private equity deals.
I like more so doing them myself
and being involved in that. I don't like dealing with
a lot of the mundane stuff Or dealing with stocks, Although I will do some of my own trades, Like I called up one of
my guys and I'm like, "What do you think about Fresh Republic?" And this is when all
the banks were crashing. And I remember the weekend, Right then and there, it
was the government said, "We're going to back stop some
of these stocks," or the banks. They were going to back
stop SVB, and I forgot, I think there was one other
that were going under. They're like, "Look, don't worry, You guys won't have to
worry about your money." At that point I was like, all right, The government's going
to bail out these banks. And then JP Morgan did a
deal with First Republic Right then and there, on
the weekend announced. So I'm like, well, they
don't need the money If the government is going
to create this program That's going to give people
the money in case they're short For some time, and they
don't have to liquidate, Let's say their treasury
or whatever it may be. So then in the morning,
right when I wake up, I could already see the stocks, And a lot of the bank
stocks are just tanking. First Republic was getting
hit one of the hardest. So then I remember right when
the market opened, I was like, Huh, a few minutes are going to buy. It kept going lower and
lower, and I remember it hit Around 18 or 19 or something like that, And calling one of my
guys, and I was like, "What do you think about
buying some First Republic?" And I'm not too risky,
I won't do tons of options
and stuff like that, And I was just like, "You know, I think people are overreacting." I'm not saying the company
is actually worth 19 Or 30 or whatever. It's a $100 company before. I'm not even saying it's
worth five, but I'm like, "It's just all going
down based on emotion," And I was like, once people
realize like, the consumer, That they don't need to
go to all these banks And start pulling out their money, I believed that the market would rally, Just because a lot of
it is sentiment, right? No one knows the financials
of First Republic at the time. They're just reacting and- – Like a bank run at the beginning. – Yeah, exactly. So then I tried buying $3
million worth of shares at 19. I think I got, a little bit
under 900 grand got filled, And then the price started kept going up, And I was too cheap to pay 19.5. – Neil, you were probably
moving the market, you know? I mean, I don't know if
that amount of money moved. – I don't think was moving the market. Only $3 million worth
of shares isn't a lot. So I was just like, I
was clicking buttons, And I was just buying myself. And then at 19.5, I was
like, "Oh, I can't." Then I was just like, "Oh, I think This thing's going to go
up," so then I increased, You know, I started going
to like 19.85 or .83, And I was trying to buy it at 19.8. You know, I was penny
pinching, and I shouldn't have, And I didn't get any more of a fill,
And then I didn't sell it that day. The next day I sold it. I think I made it like around 1.4. I would've been happy if
I got $3 million worth, And I could have bought more, But I also didn't want to buy
too much of it because if I lost Two, $3 million worth, it's
not the end of the day, And I was willing to take the loss, And I believed I was
going to make something. How much, I didn't know, But like, 1.4 in 24 hours, right? Sold it the next day,
and I think it was going To like, 50 cash out, and
then it started going down, And I'm like, "Oh, let
me just sell this thing. I'm up enough," and I
didn't buy anymore after, Even when it kept going down
lower and then it went back up, Because at that time, you know, People are starting to trade. They're getting more data
and all these financials. Maybe they're not releasing financials, But people are doing their
own back of the napkin math On like, "Hey, what's happening?" How much of their money is
in treasuries or whatever? And people are trying to
do their own calculations. I traded purely on
emotions, not my emotions, But I knew the market was
illogical on their trading On the first day, and I
knew that it was going to, You're going to see crazy roller coasters. I was like, "Ah, there's an
opportunity to day trade here," And I took it, and I
didn't get too greedy. I could have made more money,
but it was a good enough- – So I hear you, you're opportunistic. I mean, you're an entrepreneur,
you're an investor, You love technology, but you
also, you love ideas, you love,
You know, the game, we'll
call it the game, and you now, I would call it a family office, you know? You have a manager who's
delegating tasks to other experts, So you're interfacing with
him, so he's taking a lot- – Right, but we split
some of the costs, right? With other rich individuals, right? That's why I call it
multi-family office, but yeah. – Sure, so it's, yeah,
it's a shared family office Or multi-family office. So who may I, you know,
obviously I'm not asking For their names, but are
these other individuals That you know through
business that you decided To do this together, or
how did that process start? – Yeah, so the guy who I have
helping me run a lot of stuff, He was a finance guy, and
he did really well managing Other people's money, and
started working with him. – Okay, and so he- – And this was what he
was pretty much doing In the past, right? So he did it both for himself
in which raising funds And deploying it, and then eventually, He went into the family office route In which he was just like,
"Hey, I'm going to just work With a lot of the rich families I've met," And then, you know, said, "All
right, let's work together," And that's how it got set
up, because he's like, "Hey, how about I alleviate
some of your pain?" At first, it wasn't
called a family office. He's like, "How about I
alleviate some of your pain?" It was a business model for him. He was like, "Hey, I'm going to
create this and make some money By charging some rich families." He's like, "How about I
alleviate some of your pain?" And then it just kept growing,
And then he pretty much was just like, "Yeah, I have a service." You know, if you want a
fractional family office, That's what he offers. – So how is your experience, you know, Is working with this multi-family office, And you know, it sounds like, you know, Your assets and you are
are a big part of it. Has it freed up a lot of time for you? I mean, has it, you know? – It has. It doesn't make a ton of
money, I'll be quite honest. I have better luck picking on my own Than going with money managers. You know, there's a saying I always, That one of my buddies told
me a long, long time ago, If you work with money
managers and wealth advisors, They won't make you rich, they
help you stay rich, right? So none of these guys get
the returns that I want. That's why I still do
some of my own trades, And that's why I'm pretty aggressive. – Well, the Neil family
offices, I mean, this is known. They're focused on capital preservation. You are totally correct, because you know, A family office manager, you know, The downside is way worse for
you than the upside is good In the sense that if you make, you know, 12% returns versus 9%, yeah, your
client's going to be happier, But they're going to be
happy if you make 9%. – Hopefully 9% returns a year, by the way. What they keep trying to
reminding me is, "Neil, You know, if you lost all your
money, how sad would you be?" I'm like, "Yeah, I would be bummed out. My life would really suck."
And they're like, "If we
got you five, 7% returns, Five to seven," and we're
clocking way better than that, They're like, "how much
better would your life be If it's five to seven versus 12 or 20?" There's no difference in lifestyle From flying to buying a jet. Like, there's no difference in lifestyle. Now, there's certain things I can't do, Like I can't just keep
burning money on just like, I can't just say, "Hey, let
me go buy $100 million house Here, $50 million house
there, a plane there." Like, I'm going to go broke, right? Like, there is a limit
to how much money I have, Because I have a good amount of cash, But most my net worth is still
tied up in my corporations. If I sold them, sure, I can
start buying bigger purchases, Like $100 million house
there, 50 somewhere else, Or a jet, and all that
kind of stuff, but for me- – You don't want a jet, Neil. Nobody really wants a jet. The goal is you ride on other
people's jets, isn't it? – That is the best thing you
can do as a rich person to have A friend who has a jet
versus having your own jet. And I have so many friends who have jets, And then they complain to
me like, "Man, you know, My microwave went out on my jet, It cost me 30 or $40,000 to
replace this stupid thing," Or like, "Oh, I'm stuck in
O'Hare, and it's really snowing, And they charged me like, 20
grand to defrost my plane," Or like, something like that. Like, those kind of things
would just really irk me, And I just can't do it. – So you're kind of a minimalist,
I mean, in your own way. I know you live-
– But minus the real estate,
minus the real estate. Like, still have a Honda Odyssey For a family car, drive that around. My wife has a nicer car than me. – Yeah, I was going to say Neil, Neil, We got to get you a Bentley
or Ferrari or something. Come on, have a little- – My wife has a Bentley. I have a Maybach, I have a driver. I don't use him that often,
but when I go to meetings, Because I have a laptop table in the back. Maybach just looks like a normal Mercedes. It's just a little bit longer. I have my iPad with wifi or a cell signal, And I just work in the back
instead of dealing with traffic. I don't use that that
often, but maybe like five, Six times a week, but to
me, that was worth it, Because I work too much, and when I drive, I get into too many car accidents, Or I did when I was younger, So I tend not to drive too often. Just more so mentally tormented
by driving, not that I'm, I'm probably a decent driver,
but still like, too paranoid. And yeah, like, I am a
minimalist to some extent, And I still want the returns, So I just keep going and going. And when I look at all these
money managers that are like, I look at their stock returns
versus my stock returns. Buy like, HubSpot in the
early days, and Shopify, And Google, and Amazon, and
some of those not too early, Because I'm not that old, But buying them early
enough, and just holding. I'm like, "Well, my returns
are better than your guys, And you guys try to do
all these complex things,
And try trading or just buying the S&P." And I'm like, I just
buy companies like Apple That I believe in, and I
hold, because I understand Technology, and my biggest diversification Into non-tech for money I
manage personally, right? Not talking about the family office, But I manage personally, My only outside investment
outside of tech was Disney, Because they got into
streaming, and eventually, I ended up selling the Disney stock, But I'm all in tech, you know? Some of my other guys do
non-tech, and I took a beating Last year, and they're
like, "See, this is why." But if I look at my average
returns from when I got in, I'm crushing all these money managers. I'm not saying like, I'm a better trader Than Ray Dalio or anything. I have a small amount of money, Versus some of these guys who are dealing With like, 100 plus billion, But just buying Apple stock
back in the early days gives you Amazing return, or HubSpot stock. I don't really look at what
did they do this quarter? I'm like, believe in the operators, Believe in the business model. Buy, don't look, and 10 years from now, You'll see where the stock's at. – Totally, and Neil, one thing I love, Everything you're saying
is just, you love the game. I mean, I can tell that you kind of, This passion that you
have for entrepreneurship, You have that same passion
for your investing, And it's almost an
entrepreneurial attitude To you're investing too.
It's you kind of know what you know, You know what you're passionate about, Technology, and marketing,
software, these sorts of things. And you know, you're
not in the game to amass As many yachts or
private jets or whatever- – No.
– As possible. – We're going to end up
donating almost all of it. We have money in trust for our children. It is a blind, I think
they call it blind trust, Where they don't know about it. Whatever you want to call
it, I think it's blind. One's a grantor trust,
one's a dynasty trust. The money's only there
like, if you got cancer And you can't pay for
treatment, gladly pay for it. If you're on the street and you
have no roof over your head, We'll gladly help you out,
but if you have a job, You can figure it out on your own. Or if you want to be a doctor And volunteer all your time
in Africa and just help people In like, these third world
countries that have no money And no health system that's that great, And you need money to survive, But you want to volunteer all the time, I will pay for your life
in a normal way, right? – So Neil, what you're talking about, And so this is another,
I think, common theme With family offices is
you're figuring out, Maybe you have figured out
how you transmit your values To the next generation, right? Because that can be a challenge For ultra high net worth investors, Ultra high net worth families
is you didn't start, you know, With a Maybach and a
driver when you were 17 Or however old you were
when I met you, right?
You had incredible work
ethic and drive to succeed In life, and you want to make
sure to pass on that value To you know, your children, And sometimes giving them
too much wealth too early Or with the wrong structure
can actually impede Your ability to pass
on your values, right? – Yeah, and for us, we
believe they don't need it. Like, if our kids want to buy a Ferrari, I don't care what place you are in life, You figure it out on your own, Or if you want to go
take a vacation to Italy, Go figure it out on your own. Now, if they're with
me, I will gladly do it, Or another bias thing I have
when it comes to wealth is, You know, we probably will retire in, We're from southern
California, Los Angeles, Technically Orange County,
but it's close enough To Los Angeles, so we have
a home in Beverly Hills, And not a crazy fancy, like,
$100 million home or anything Like that, but it's expensive
enough and nice enough. And let's say, you know, my kids, If I'm getting older, and you know, I can get them to live next to me, But they can't afford a
house in Beverly Hills, I would gladly buy the
house next door to me If my kids live next to me
and I get to see them grow up And their kids, and
all that kind of stuff. So for certain things
I'll make a sacrifice, But it's like, for me, it's just like, If I'm going to to live my
life, I want to enjoy it, And not enjoy it from
like, going on a yacht. I don't care for yachts or
like, even private aviation. You know, like, I was going to New York, I could afford a private flight,
But one of my buddies is
raising money for kids In New Jersey for inner city, you know, Like, a lot of the young kids
there and even their parents, They don't even have money
for things like toilet paper Or feminine products and you
know, give them 100 grand check. I'd rather spend the 100 grand doing that And go fly on JetBlue
lay flat, which costs me Maybe 1,000, 2,000 bucks,
and donate the money than, You know, have the convenience
of saving a few hours And being in a private aviation, right? Like, the money I just
believe is just being wasted And is also not the best
for the environment. But yeah, I don't believe
future generations Of my kids need the money. I believe it's better to
just donate everything. – So you've set up your
family office, you know, Around your values, which
makes sense, and I think That's the goal of every
family office is to have That mission-oriented and
values-oriented outlook. I know we're short on time,
Neil, but kind of to zoom out A little bit and to think
about your, you know, You have a very inspiring
life story as an entrepreneur, And kind of your journey where, you know, You built up these successful businesses, And leading to this shared family office. Is there any lesson or
tips that you could give Entrepreneurs that are
more toward, you know, That they're more like the
20 21, 22 year old Neil Patel Just getting started? They're businesses are
beginning to be successful, They're beginning to write those checks To angel investments,
or private equity funds, Or private real estate funds, What advice do you give them
To get to that next level of success? – So there was a wise man
in Seattle that gave me This feedback when I was first
starting off and he said, "Neil, you don't need to figure this out." He's much older than me. His name is John, I'm not
going to say his last name, And he invested in some
telecoms and a few other things, And he told me, and at the time When he was giving me this advice, He was in his late 50s
and I was in my early 20s, And he's like, "Neil, if
you want to succeed in life, You're going to know a
lot of successful people, Just ride our coattails." And he didn't mean it
in a bad way to like, Leech or not provide
value, but he was saying, "If you know other successful people And you're friends, ask them. Ask them to include you in their deals. You'll learn along the way
by just co-writing checks, And you'll avoid a lot of the mistakes, Because they've been
through this many times." And that's how I started, and
it was great lesson for me, And it helped me avoid a lot of mistakes, And it also helped me
produce better returns. – I love that, Neil. I think that's a great note to end on. I really appreciate you sharing your story Of entrepreneurial success, but
also your investing mindset. You've been so transparent
about your process. I always love when a guest is honest. It's rare for us to
have someone, you know, To share that whole story
from the beginning all the way To the current day, how you
manage your family office. So thanks again for joining
the show today, Neil.
– Sounds good, thanks for having me.
