Welcome to car talk. This is not talking about cars. This is talking inside of a car. Today’s topic is about my investment strategy. Now investment, in case you don’t know how I define something like an investment, is something that gains value over time, so like it might be stocks, bonds, treasuries. Oh, what else? In my case a lot you can invest in yourself, your skill sets, you can invest in your business. And that brings me to the main idea of the investment strategy. So my investment strategy while I do have a pretty diverse portfolio, when it comes to stocks and mutual funds and things like that. A diverse, pretty healthy portfolio, which I do also, I also own some different intellectual property royalties, a copyright or two, some streams of like every time Work Bitch from Britney Spears gets played, I get a little bit of a take on that. ‘Cause I bought up some different intellectual property royalty streams, which I like. And I liked them, I still like them, but I liked them more when I first got them and they’ll pay off for years and years and years. Probably for the next 30, 40 years and less over time because relevant things are hot now and it might not be relevant and hot in 10, 20, 30 years from now, and I know that. But it’s also I liked it because it was, it was very uncorrelated to the stock market. So if the stock market tanks they’ll still perform, part of a diverse portfolio.
However as time as gone by, my, I’ve felt my investment strategy evolving. For example, if you invest in the stock market, now this is long term figures, long term figures. Yes there are good years, there are awesome years, there are horrible years, there are recessions, there are depressions. However if you look, if you average out those gains and losses, the hills and valleys, over the last 100 years, you’re gonna get eight to 10 percent gains a year. Now, if you’re like some people and you’re not fantastic at math, that means if you put 100 dollars in in a year that same 100 is gonna be worth now 108 to 110 dollars. You put 1,000 in it’s gonna be worth 1,080 to 1,100 dollars. It’s an eight to 10 percent gain per year and over time, compounding, when you’re young especially, I’m relatively young still. That compounding interest like that compounding gains, is good and can make a pretty large sum of money over the course of five, 10, 20, 30 years. And a lot of people start saving in their early 20’s retire in in their mid 60’s. Over the 40 year period, eight to 10 percent a year with regular contributions really add up. At the same time, eight to 10 percent a year, pales in comparison, is laughable, is embarrassingly small gains compared to what a business can achieve for someone in the same amount of timeframe. You could double your money in a year, you could buy, if you’re able to execute right, if you’re able to execute right, you could have And guess what, in a year that’s profited you 50 thousand dollars.
Which would then be 100 percent gain in a year. That’s not uncommon in business if you have the right kind of products and execution and management and strategies and all that stuff. So I’ve been shying away a little more lately from typical investments, and don’t get me wrong I still have these typical investments, I still invest every money into stocks and mutual funds, because I don’t think I’d sleep well if I didn’t. But at the same time, I’ve been really tapering those to a more reasonable amount because my gut, and I’ve learned over the years, I’ve learned to really, really follow my gut, follow my intuition. Because while it’s been wrong lots of times, and right sometimes, the value, the value of being right has been far greater, many, many, multiples greater than the value of being wrong. If I could be right one time and make 100,000 dollars, I can be wrong 20 times and lose 20,000 dollars, you know what I mean? So, the value of the rights and wrongs far outweighs. So I’ve learned as time goes by, to trust more and more and more, and more of my instincts. And my instinct right now, my gut says to not go too crazy on the stock market, and yes, stocks are gonna rise and fall.
Some people say there’s gonna be a big another recession maybe not, who knows. Who can predict that stuff? But a good business can thrive in good times and in bad times. Anybody can make money when the market’s fantastic. When everyone is overflowing with money anybody can make money then. When stuff gets bad, that’s when only the good can make money. And many of the biggest companies in our country’s history have been started during bad times. Because if you are smart and you can capitalize on bad times when everyone else is pulling back their money, when everyone else is afraid to do things, you can capitalize on these things. And I mean I’m 34, turn 35 in three weeks, I haven’t really yet been through these big issues as an entrepreneur because it has been a good time. Whenever the bad times come now that’ll be a true test of me as an entrepreneur ’cause I don’t know, I just never have lived through it yet. So that’s gonna come eventually. And then we’ll really find out who’s good and not good. I have pretty high confidence in myself. But what I’ve been gearing towards is maybe what I might be doing because as far as the earbuds and the headphones they have been doing fantastically well again, and revenue’s gonna be sky high again this year. Revenue up, profits up, and expanding into the headphones, headphones with mics, things like that have really been good. And just keep on growing, word of mouth is growing.
The hospitals, libraries, all these things that keep growing on, I’ve got all the infrastructure in place, to be able to now with a couple employees in a dedicated space to process things fast enough for the projected future. And getting everything delegated and set aside just right. It can almost run without my intervention. At this point, the last three weeks have been hectic yes, we’re moving. I haven’t done a whole lot of the day to day work. And honestly I haven’t really needed to. Because I’ve been, my strategies with training people, and phasing myself out of the grind of the day to day operations, has almost been phased out. And yes I steer the ship and I look at all the high level stuff but when it comes to day to day I do less than I used to. And business hasn’t really suffered that much in the last few weeks that I’ve been, not AWOL, but I’ve been less available ’cause I’ve been helping Karen get the house settled in and just the, moving’s a hassle. So as the business kind of goes and I don’t have expensive taste and as my earnings keep going up, I kinda think what’s the next step? And some ways I almost feel bored with this business.
And it sounds bad because I feel like there’s still so much left to go. But in some ways I feel bored with it ’cause I feel like I’ve already got there and like what do I do now? So that’s when I think well what’s the next step with the investments? How to best spend, how to best spend money. So probably let the business accounts get pretty fat, and fourth quarter last year in 2017, did some legal restructuring as far as making myself an employee. Started a holding company to hold the main business. ‘Cause I was, tossed around in my head the possibility of an exit or something like that. Selling off, which I decided not to ’cause I know I’d get extra bored then. But, so maybe let stuff get bigger and maybe see, ’cause I used to frequent then a lot, various local businesses for sale. Maybe someone’s retiring, maybe the market’s struggling, maybe these people don’t know maybe some good strategies and good tactics to really increase business. Maybe they don’t know how powerful Facebook ads are. Or maybe they just don’t care. Maybe they’re old, maybe they’re 65 and wanna say I just wanna fish all day.
Whatever the reason might be, there’s always businesses buying and selling. Businesses getting bought and sold. And why not get into that game? Maybe I could apply some of the things I’ve learned, some of the, some of the strategies, tactics, some of the experience I’ve gained, things I’ve learned with a lot of buying and selling stuff, legal things, cashflow management, a lot of these things, things that I’ve learned and experienced. Maybe I could apply those to another smart business. And there’s always things for sale. There could be something that might cost 30 grand that if I run right could profit Once again, 100 percent return. And yes I know there are taxes to deal with. Uncle Sam always wants a cut. But if I can take that 30, 50, 100 grand and instead of make 10 or 20 percent ’cause 100 becomes 130 grand in a fantastic stock market year. in a year with the right kind of strategies and management in place. And yes, there takes time and effort to do that stuff. Time, effort and work. But perhaps the upside is far too great to not consider that. And then maybe if I can take some business that’s worth into something that’s worth a few hundred thousand dollars in the course of a year or two. And I might’ve worked a year or two to get that but that same thing’s gonna be applied to future stuff. So I don’t know and I don’t wanna get involved in a business because I know my business very well. There’s lots and lots of industries and businesses I don’t know know well at all. So I don’t wanna like, I don’t wanna get in the restaurant business, I don’t know enough about it. Non-chain restaurants fail way too often. I also don’t wanna deal with restaurant hours. So there’s lots of things I don’t want. But maybe if I start getting a little bit of a stock pile of business cash, when the right opportunity presents itself then I can jump on it.
When everyone else is thinking oh, I gotta get out of this because money’s not good enough and then I’m sitting on this pile of cash pick it up for pennies on the dollar running through things that I’ve learned and I’ve been able to achieve and then all the sudden turn that thing around in no time. Either keep doing it, delegate, automate, eliminate, in that kind of strategy. Or, find another buyer now that it’s more valuable and now that it’s cash-flow positive and cranking out money, find another buyer for it. That’s not a bad idea. And that to me sounds interesting. ‘Cause I do get bored with things easily sometimes. And I’m not bored with the business right now but I feel almost a little bored with it because everything’s running so smoothly. I feel like I need some kind of conflict or challenge to really, to really get my interest again. And, so I don’t know. That’s part of my investment strategies. It’s been a bit of a longer car talk than normal. That’s because, the main reason is since we moved a few weeks ago, now the house, the school drive is just longer. We’re a little more removed from stuff. So I have more time for longer car talks which is what I want, more, longer content because I run it through my head. The other side of it, I like things that are 12 minutes a lot more than I like things that are four minutes when I listen to podcasts. So it only makes sense to do that for someone else. So this is my investment strategies for how we’re doing things here. Still traditional stuff but maybe taper that off and start stockpiling some cash because a 10 percent return is great, 20 percent is great, but if I run that through a business and can execute, of a year, or maybe even more. And that is my investment strategy. Car Talk, Tyler Douthitt.