400,000 Books Sold Teach How to Take $1000 to $1.5m with Author Phil Town

Phil Town

In Episode #572, Nathan interviews Phil Town. He’s a two-time New York Times’ best-selling author, hedge fund manager, and founder of Rule One Investing. He’s teaching individuals how to take control of their financial futures so they don’t have to find a fund manager or financial advisors.

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Famous Five:

  • Favorite Book? – Intelligent Investor
  • What CEO do you follow? – Warren Buffett
  • Favorite online tool? — Evernote
  • Do you get 8 hours of sleep?— Yes
  • If you could let your 20-year old self, know one thing, what would it be? – That USA will put us in a war and it will suck

Time Stamped Show Notes:

  • 01:30 – Nathan introduces Phil to the show
  • 02:00 – What makes you qualified to talk about this?
    • 02:08 – “By New York Wall Street standards, I’m completely unqualified”
  • 02:23 – Most people invest using the concept of modern portfolio theory
  • 02:50 – There are people who Phil follows for 30 years now
  • 03:41 – Phil has a principle of picking good companies while they’re on sale
  • 03:55 – Phil learned to use other people’s money to build up their funds
  • 04:22 – How much outside capital have you raised in your hedge fund to date?
    • 04:32 – Under a hundred million
    • 04:40 – Phil started to manage money through separate, managed accounts
    • 04:58 – Phil can manage other people’s money that don’t have the investing capital for hedge fund
  • 05:53 – The people who needed their accounts to be managed the most are getting the least attention
  • 06:10 – How do you beat a company like Wealth Front
    • 06:24 – Wealth Front is run by modern portfolio theory math
      • 06:58 – “It’s such nonsense and yet, it’s the only math there is”
    • 06:57 – A robo-advisor pretends that they can use volatility as a reference point for risk
    • 08:10 – People need to know how to invest on their own
  • 08:23 – Phil mentions the three things that he believes someone should do if they don’t want to be an active investor
    • 09:19 – Find a financial advisor who knows what they’re doing
  • 09:30 – The gap Phil wants to fill
  • 09:56 – “An active fund cannot be the index”
  • 11:05 – If you’re not going to learn how to invest, you’ll have fewer choices
  • 11:43 – It is simple to invest correctly
  • 12:00 – It’s not true that there are losers and winners in investing
  • 12:46 – “Investing is simply buying something that you understand for less than its worth”
  • 13:20 – Phil started with real estate
  • 14:02 – Warren Buffet is one of the best real estate investors
  • 15:02 – Phil shares the essence of a good investment
  • 16:05 – The essence of speculation or trading
  • 16:40 – Nathan asks Phil for his opinion regarding Bill Ackman’s Chipotle Mexican Grill
    • 17:21 – Chipotle Mexican Grill has no leverage
  • 18:40 – The one rule Phil applies to all different investment strategies is don’t lose money
    • 18:55 – Rule 2 is to remember rule 1
  • 19:15 – Phil’s 4-rule process
    • 19:18 – First, am I capable of understanding this business?
    • 19:22 – Second, does this business have protective characteristics that keeps competition a leg?
    • 19:33 – Third, is this owned by people with integrity?
    • 19:36 – Fourth, am I buying this at a big discount to its value?
  • 20:35 – How do you handle imperfect planning?
    • 21:13 – You have to have a big discount on the value that you’re purchasing
  • 22:48 – Phil’s first book came out in 2005, second in 2010, and another one in 2018
  • 24:55 – The Famous Five

3 Key Points:

  1. People need to know how to invest on their own—if you’re not going to learn how to invest, you’ll have fewer choices.
  2. There is a difference between a good investment and speculation.
  3. Investing is simply buying something that you understand for less than its worth.

Resources Mentioned:

  • Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
  • Drip – Nathan uses Drip’s email automation platform and visual campaign builder to build his sales funnel
  • Toptal– Nathan found his development team using Toptal for his new business Send Later. He was able to keep 100% equity and didn’t have to hire a co-founder due to the quality of Toptal
  • Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible.
  • Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books.
  • The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
  • Jamf – Jamf helped Nathan keep his Macbook Air 11” secure even when he left it in the airplane’s back seat pocket
  • Freshbooks – Nathan doesn’t waste time so he uses Freshbooks to send out invoices and collect his money. Get your free month NOW
  • Show Notes provided by Mallard Creatives