The Real Reason Shaq Bought a Carwash — US Insider - video Dailymotion

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rom the hardwood to the drive-thru: Shaq’s carwash move explains more than just business. Dive in.   #Shaq  #CelebrityInvestment  #BusinessMove  #CarwashDeal  #BehindTheDeal  #USInsider  #WhyShaqBoughtIt  #BigMoneyMove  #Tier1Audience  #InvestLikeShaq   Want to know the real story? Hit the link and get the insider scoop on Shaq’s move.

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00:00What if I told you that Shaq made more money from boring businesses than he did from ever

00:04playing in the NBA and that we're going to break down exactly how he invested so that you can do

00:08it too? I think Shaq might be the only professional athlete that I would seriously want to trade his

00:21investment portfolio for. The crazy part about that is that most, 60% of the pro athletes out

00:26there end up broke within five years of retiring. They're not joking when they say that professional

00:30athletes died two deaths in their lifetime. Meanwhile, we got basketball's friendliest giant

00:35making more money as a retiree than he did during his legendary 19-year NBA career. Also,

00:41did anybody know that Shaq's a DJ?

00:43This giant man, apparently with a smoke machine behind him. I don't even know. So, um, you know,

00:58it wasn't Kazam, oddly enough, that made him bajillions of dollars. It was actually things

01:05like his car wash. Although, Kazam, kind of Oscar worthy. I don't know. 7-1 or not, I thought it was

01:12interesting that his upward trajectory was basically by doing things that private equity firms do all

01:19day. And maybe that's why he said this to his kid, which I love. He said, you're not rich, I'm rich.

01:24And he seems to think about that philosophy all over the place. Um, the best financial advice he said he

01:30ever got was from a guy at a bar who turns out to be Lester Nispel, one of Hollywood's top business

01:35managers, but I guess still a guy at a bar. And the advice was save more than you spend. Uh, riveting.

01:42Uh, but I think we can basically stop there and say that Shaq actually learned a lot more from

01:47watching people like Magic Johnson build out his boring business portfolio. He's tight-lipped about

01:53his earnings, but let's do a little estimation. You guys want to guess what Shaq made in the NBA versus

01:58what he made after. He got a 27.5 million annual contract for playing for the heat. And he had

02:03endorsements that still make him about $20 million or have made him about $20 million alone. The rest

02:10of his entire net worth of which they say is about 160 to $180 million comes from boring businesses.

02:17Real cashflow means that you make money while you sleep, not while you dribble or film genie movies.

02:23I don't know. So you could sell your soul with startup hustle, but why not put some of that money

02:27to work and have it work for you? I think what's interesting is he built something that I like to

02:33call the financial flywheel basically goes like this. If leverage is the ultimate goal, then you want

02:39your money to work for you. How Shaq basically did it is his breakdown was he had a business already,

02:47right? His business was the business of him in the NBA, the flywheel. And that business was we had

02:51Shaq in the middle. He was the one that was making the propellers go and around it. We had his salary.

02:56Then we had his endorsements. Then we had sponsorships from doing paid speaking gear to

03:01basically trading his time for money. Although he made a lot of money for that time traded to then

03:06he said, instead of putting myself in the middle, I'm going to take myself out and I'm going to replace

03:10it with my money. So if I'm over here doing my MBA trading time for money thing, I'm going to take

03:15all the money I make from that. I'm going to put another flywheel over here. That's going to have my

03:18money in the middle and the money is going to make more money.

03:25One part of the flywheel is 155 Five Guys restaurants. He owned about 10% of the company's

03:32entire franchise portfolio. 17 Antiannis, 150 car washes, 40 24-hour fitnesses, nine Papa John's,

03:41one-offs like a Krispy Kreme in a Cityplex 12. That's like movie theaters. Then he had Shaq shoes,

03:47affordable Walmart sneakers. Look at these bad boys. They sold over 120 million pairs,

03:51which is wild. You guys even heard about that? And what he also started doing that was really smart

03:56was buying up these small businesses while he was in the MBA. He doesn't need another side hustle

04:02because he has financial leverage. And this is something that we're all kind of discouraged from

04:06doing when it comes to our income screens. Most of our nine to fives are just jobs, right? To pay the

04:11mortgage rent, etc. But how can we replace ourselves from the flywheel if we get fired? If we trade our

04:18time for money, there's no way that we can put money in the place of our time. And it's a lesson that most

04:23professional athletes are in the hard way when they're forced to retire and they've realized that

04:27they've had spend creep. They have lifestyle creep while their income continues to go up with them.

04:32But finally, they retire and it goes down and crashes. So while car washes and Auntie Annie's are

04:38not anywhere near as sexy as playing in front of hundreds of thousands of people, do they bring in

04:44dollars? You bet. So now his portfolio, they think when he was first getting her out, it was around 160

04:50million dollars. Now it's more like 400 to 500 million dollars. And what's wild is that extra,

04:55what do we want to call it? 200 and 230 million dollars comes from the guy who had the highest annual

05:01salary while he was playing in the NBA and still made a majority of his wealth outside of it.

05:06This is what I call the economics of boring. There's a difference between fame and rich.

05:11Unfortunately, today's entrepreneurs often confuse the two. Basic economics. Yes, you can be in demand,

05:17but careers are asset classes in yourself. So when everybody wants a certain kind, aka everybody wants

05:22to be a ballplayer, guess what? They get inflated and your returns drop. What you actually want instead of

05:27that is you want to get into boring businesses where there is not this demand and supply imbalance.

05:33I call this part of the Lindy effect. The Lindy effect basically states that the longer an idea

05:37has been around, the more likely it is to stick around and stay in style. So I find this interesting

05:42that these principles seem to translate to business too. Lindy effect is typically thought of in

05:46economics. So a hot new NFT, bored ape, yacht club, whatever, is probably not going to be around as

05:54long as a laundromat or a car wash. The Lindy effect, if we're on the curve, is less on this new

06:01hot thing than it is on this old boring item. And that's how you want to think about what to put your

06:06money into. You may be familiar with Nassim Taleb, author of Anti-Fragile. He put another twist on this

06:12discussion saying that the failure rate of the new is actually much higher than that of the old. Even

06:18though we may think that old things are going out of fashion are less valuable than new ideas or businesses.

06:24So think about that for a second. Everybody says to me, Cody, why would you own a laundromat?

06:28Why would you own a car wash? Aren't laundromats going away? Doesn't everybody have them?

06:32And they assume that because something is old, it is less valuable. Whereas just because something

06:38is novel and new and shiny does not actually mean that the value is higher. This is food for thought

06:44as you think about the next time you want to allocate to an asset class, because it's not just

06:49shack that's on the boring business trend here.

06:57This is a ton of people who are big celebrities like these guys. And in fact, you know, we got

07:03the man, the myth legend himself, Warren Buffett, pinball machines. As the story goes, 17 year old

07:08Warren and his friend installed a $25 pinball machine in a barbershop. A year later, they sold

07:13the business and they spread across Washington, DC for over a thousand locations, which was a huge

07:19amount of locations and money back in the 1700s when he did it. Just kidding. It wasn't that long

07:24ago, but he says it was still the best business he was ever in. And do you know what else Warren

07:29Buffett has been a part of? He's been a part of acquisition after acquisition that focuses on boring

07:34businesses from railroads to news sites to vending machines, even at a young age. Last one I want to

07:41hit you guys up with is this is Magic Johnson and Magic Johnson, Shaq I think learned from. He has a

07:47portfolio of businesses that go from, you know, movie placement to coffee and $600 million in net worth.

07:54You can check out some of his businesses right here. This guy owns 125 Starbucks. He's the largest

08:01outside owner of Starbucks outside of, you know, Starbucks, movie theaters and malls,

08:0631 Burger Kings, Equitrust Insurance, I love insurance businesses, 24 Hour Fitnesses,

08:11Stakes and the Lakers, the LAFC Major League Soccer teams, LA Sparks, the Dodgers. He owns a JV to

08:20rebuild LaGuardia about damn time, partnered with Canyon Capital to finance 30 real estate developments,

08:25owns a bunch of media channels like Me Too, Energy, Uncharted Power, Walker and Company,

08:32which is like beauty products, and owns part of Marvel Experience and Walt Disney Imagineering.

08:37This is just a little taste. You can see he actually lists his full portfolio online and

08:41Magic Johnson Enterprises. Magic, if you want to come on anytime, do a YouTube video. I'm here.

08:45We can talk about boring businesses together. But the moral of the story is that the billions do not

08:50have to be complex. Boring wealth is all around you. If you look at some of the wealthiest

08:54individuals out there, their niches are pretty dull. We've got the Waltons of Walmart, retail,

08:59Coke Brothers, manufacturing and distribution. We've got Robert Kraft, coal, mining, oil, real

09:05estate. So the person who runs your neighborhood car wash, they're probably a lot richer than you

09:09think. I mean, check does. So that's probably a pretty good reason. Okay. If you haven't already

09:14subscribed to the newsletter, by the way, pretty, please subscribe. We're going to do more of these

09:17videos. Hit us up below with what you liked, what you didn't like, and what other questions you

09:21want answered. I answer every single comment. So if you're not rude, I'll answer yours. All right.

09:27Until next week.

The Real Reason Shaq Bought a Carwash — US Insider

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