Hacking Financial Intelligence with Henry Daas

Henry Daas is a serial entrepreneur, business and finance coach. He is the author of FQ: Financial Intelligence. Listen in to this interesting conversation about solopreneurship, entrepreneurship and financial coaching. Listen in to the end to find out how to get a month’s Free Coaching. In this show you can learn lots from Henry including: The journey from Entrepreneur to Retire-preneur The key things to look at through the eyes of an Entrepreneur Surround yourself with people that are smarter than you! Let go of your baggage – it won’t serve you well!   Join our Tribe at https://leadership-hacker.com Music: " Upbeat Party " by Scott Holmes courtesy of the Free Music Archive FMA Transcript: Thanks to Jermaine Pinto at JRP Transcribing for being our Partner. Contact Jermaine via LinkedIn or via his site JRP Transcribing Services   Find out more about Henry below: Henry on LinkedIn: https://www.linkedin.com/in/henrydaas/ Website: https://daasknowledge.com Henry’s Website: http://henrydaas.com Henry on Twitter: https://twitter.com/daasKnowledge Facebook: https://www.facebook.com/coachdaas/   Full Transcript Below ----more---- Steve Rush: Some call me Steve, dad, husband or friend. Others might call me boss, coach or mentor. Today you can call me The Leadership Hacker. Thanks for listening in. I really appreciate it. My job as the leadership hacker is to hack into the minds, experiences, habits and learning of great leaders, C-Suite executives, authors and development experts so that I can assist you developing your understanding and awareness of leadership. I am Steve Rush and I am your host today. I am the author of Leadership Cake. I am a transformation consultant and leadership coach. I cannot wait to start sharing all things leadership with you Henry Daas is a special guest on today's show. He's a serial entrepreneur, business and finance coach and author of FQ: Financial Intelligence. But before we get a chance to speak with Henry, it's The Leadership Hacker News.   The Leadership Hacker News   Steve Rush: If you're anything like me, 2021 has brought about numerous learning opportunities to learn about ourselves and leadership. It demanded an evolution of thinking how we work and how we behave. In research completed by Melissa Daimler for Forbes magazine, she found that there are three skill shifts required that will help people adapt in 2021, and here they are. A shift from communication to empathy. Effectively communicators and productive leaders are intertwined. This year has forced leaders to communicate constructively, even without answers. And we've had to push beyond comfort zones. Beyond sharing updates and asking questions and listening much more attentively. And therefore, leaders have been asked to go deeper and develop empathy. Brene Brown, a professor and author say empathy, fuels connection. It's feeling with people and connecting with a person's situation. Of course, communication is absolutely essential, but communicating with empathy, that becomes a really powerful. Emotional intelligence to emotional agility. When Ben Horowitz, a former entrepreneur and technology investor was asked the most challenging skill to learn as a CEO, he said it was the ability to manage his own psychology and emotions. Emotional agility goes beyond awareness and control. Susan David, a renowned psychologist emphasizes that emotionally agile people are not only aware of their feelings, but know how to navigate through them and how we do this. And as a leader, the more emotionally agile you become, the more readily you'll be able to understand the intent of other's actions. Time management to context management. When it first dawned on us, that working remotely would be here for some time. We followed the same pattern of the learning that we exhibited back in the late 1990s, we took our design framework from the classroom straight to the computer without attempting to adapt accordingly. And finally, after a while, we recognize, different mediums do call for different applications. Often been referred to as the flipped classroom. We're seeing the same now with remote working and we cannot simply transfer how we worked in the office to our home space. Cramming in meetings, presentations, brainstorming sessions are very different from Zoom or Ms Teams. And the flipped workspace was coined by Allison Baum. And it's about leveraging what's been learned from flipping the classroom to flipping where you're working remotely. And what she noticed was our context is really changed. We need to manage our time and design our days around how we work best based on what we're working on, whom we're working with and what for, but context is key. I often refer to these as my trusted side kicks of, "because and reason". If you give people a, because you give people reason, you create context and therefore they're likely to be more productive in the time that they do have and the way they work. And what I've noticed recently is the subject of burnout has become a very prevalent and it's not our work that's burning us out is how we are working that is burning us out. So, a little bit more empathy, more emotional agility and some good old fashioned context management will help us be really successful for 2021 and beyond. That's been The Leadership Hacker News. We'd love to hear your stories and insights, so please get in touch. Start of Podcast Steve Rush: Our special guest on today's show is Henry Daas. He's a serial entrepreneur, business leader, personal finance coach, and author of FQ: Financial Intelligence. Henry, welcome to The Leadership Hacker Podcast. Henry Daas: Thanks for having me. Really appreciate it. Steve Rush: So, you've got a really interesting story, your backstory, so to speak, hasn't got a particular theme or flow from it, but I guess that's part of the entrepreneurial spirit that you have. Just give the folks that are listening in today a little bit of a summary of your kind of early businesses and how you've arrived to do what you do today? Henry Daas: Yeah, I'm kind of a word freak. So, the word that I use is peripatetic, right. Steve Rush: Big word. Henry Daas: That's a good word. Yeah, I know, I like it. People go look it up, if they've never heard it before. Not always the most positive connotation when you say that. But yeah, I started as an entrepreneur. I mean the year now is 2021. I started in 1991, so it's basically been 30 years. I started out with a kind of an opportunistic business where a college friend of mine was just handing me business on a silver platter. And before you know it, I said, Hey, I'm going to quit my day job. And I'm going to become an entrepreneur. And that started the journey and then it never ended. So here I am, 30 years later and now I coach entrepreneurs who are kind of where I was 25, 30 years ago. So, it's almost like a little bit of deja vu there, right. But I love it. It's fun. Steve Rush: Thinking back to that time where you quit your day job, what was the pull to the business opportunity? Just give us a little flavor of that. Henry Daas: Well, I'm going to say something a little bit off color, but you could edit it out if you want to. I have a saying, I say, if I'm going to have to work every day for some asshole, it might as well be me, right. Steve Rush: Okay, fair enough. Yeah. Henry Daas: There you go. So, feel free to bleep it if you want. I'd have no idea if this is PG or R rated. Steve Rush: Well not any more, its fine. Henry Daas: Not any more, I guess not. Steve Rush: It's an interesting hypothesis, right? Because there are some people who are quite comfortable in the spirit of working for others and, you know, taking a salary and growing through the corporate culture, that's absolutely perfectly acceptable, perfectly fine. And there's some great leaders and heroes that we all know that work in that environment. But equally, if you feel constrained by that, the only way that you can really unleash your potential is by doing it for yourself, right? Henry Daas: Yeah, what's interesting is, I'm thinking of creating another little vertical niche tent pole in my coaching practice and that's called retire-preneurs because when I was doing the research for my book, FQ. I read a whole bunch of, you know, I did tons and tons of research and one, retire preneurs are kind of the fastest growing segment of entrepreneurs. But when I started looking into the driving factors, a lot of them worked in what I derisively call cubicle world for their entire careers. And then they got out and it's like, okay, now it's a chance for me to do what I want to do, right. And know, you're 60 something years old in many cases, maybe even older, but yet people are really bootstrapping businesses because the barriers to entry, especially in the online world are almost non-existent.  But they need help because they've worked for 40 or 50 years in that, you know, in that bubble where you've got hot and cold running resources, in many cases, if you work for a large company, you don't have that anymore. Now you're a solopreneur. So, it's like, okay, what do I do now? I mean, it's exciting, but it's also terrifying. Steve Rush: Yeah. Also, I guess. The notion of retirement has changed in the last 10 or 15 years. The whole conversation of retiring. Typically, if you think across many people in the business world, there's not that many people I know of who literally down tools and don't do anything. There's definitely that little bit of coaching, counseling, consulting. Retire preneurs, and I think the whole retire preneurs thing is a real opportunity for people who are still restless and want to do things in their either semi-retirement or retirement, right? Henry Daas: I mean, I think retirement itself is, you know, terrifying, right? Because there's actually an odd statistic of very high divorce rate for people who all of a sudden, one or the other retires. Because now you're home, right? Just like a COVID has ticked up the divorce rate because people are now under the same roof all the time. And they looked at each other and they say, oh my God, this is the guy I married 40 years ago. Not the same guy anymore. Well, you didn't notice when they were going to the office all the time and now, they're not going to the office. They're home tripping over the vacuum cleaner. Corporate America has also changed the paradigm a little bit because when I started working, which was 1981, so 40 years ago, pensions were still a pretty normal thing. Well, pensions have gone the way of the Dodo bird. I have a couple of friends who recently retired and they both got terrific pensions to the point where they don't have to work anymore. But corporations figured out how to divest themselves of that expense, by creating the defined benefit plans, at least here in the U.S. Steve Rush: It's pretty much the same across Europe as well. Henry Daas: Right, exactly. So, they've offloaded the risk of that to you, now and in COVID. They've offloaded another risk to you because people are, quote, working from home. And I correct people all the time. I say, you're not working from home. You're living at your office, right? Steve Rush: Yeah, I like that. Henry Daas: You're paying the electric. I don't know if a single person, my son, my 29-year-old son lives with us here now in Connecticut and he's working remotely. They didn't even provide them with a computer. You know, I build computers, is kind of a hobby. And I had just finished building a really, really nice super-fast computer. And he's like, dad, can I use that? It's like, don't they give you one? No, no, they don't. So, I'm paying for the internet here. I'm paying for the electric here and he's working remotely and there's no cost of the office space and all that stuff. So that's the future when you work for someone else, you're becoming, they talk about the gig economy. Well, that's on steroids now. Where even though you work for a big company, you're effectively untethered. So that actually makes it pretty easy to start an entrepreneurial business, right? Because you can start one from home. There's nobody, you know, you're working remotely. No one's snooping over your shoulder. No one knows what you're doing with your infrastructure to start maybe an FBA business or, you know, a SAS business or anything. Steve Rush: That's very true. Henry Daas: That's pretty cool. You know, it's great opportunity. Steve Rush: So as a serial entrepreneur and having always been on the lookout for new opportunities and new inspirations, is there anything specifically that you look for in new ventures, new opportunities when you go, right. I’m going to invest in that? Henry Daas: There are two things you need to know whether a business is viable. Only two things you have to figure out. Gross margin, cashflow, right? If you can solve those two problems, then it doesn't really matter what the business is. Problem is, that's really tricky to do in a lot of businesses. You want to, you know, you want to niche down, right? There are riches in niches, as they say, right? So, you want to niche down, but if you niche down too far, then you'll discover that there's no audience for whatever it is that you have to offer. So, finding that right balance, I wrote a little thing that's on my, it's like a little trip wire on my website. It's a freebie, it's like a 30-page PDF. Five reasons, small businesses fail, and I've actually done a talk. I have a deck for it. And I've done talks at various conference with this. And the number one reason is idea. Your idea sucks. It's the reason most businesses fail, is you just have a crummy idea. You got to sit down and figure out what's my gross margin, what’s my cashflow. And then you've got to start analyzing all the other things that go with it. Who's the competition, right? Is the market morphing and changing? So, what I've noticed that's interesting now that COVID has brought up, is a lot of mobile businesses, right? It used to be mobile dog groomers. I didn't know any such a thing existed, but now there's a lot of money going into mobile automobile care. I had new tires put on my vehicle. They came to the house. I had an oil change done in my driveway. Wow, I mean, I can do the oil change myself. It's not rocket science, but I have no place to dispose of the oil. What am I going to do with it? So, and the guy looked at me and he said, you know, you need new brakes. It's like, yeah. He goes, well, I can do that for you. Really, you're going to sit here and do a brake job right in my driveway. It's like, wow. So, think about all of those things, all those touchless services moving forward. Because if you think this is going to be the last pandemic we're going to have, I think again. Steve Rush: Yeah. I think it was Bill Gates, wasn't it? Called it early about five years ago that the biggest threat to our economy isn't through physical warfare, but it was actually through viral warfare, which he described it as. And I think you're absolutely right. We've become a culture that is now ripe for the spread of virus. And COVID-19 is perhaps not the last, I think we've seen in that for sure. Henry Daas: No. I mean, on a global basis, the largest segment of life form greater than 50% is bacteria, right. It's just everywhere. And we're at the mercy of mother nature, whether we care to admit it or not, and we keep messing with it with all the dumb stuff that we're doing as humans. You have to expect, there will be ramifications. And with any change there's opportunity. Steve Rush: Absolutely, right. Henry Daas: Right. Even if you have a nice business going, you're going to have to pivot, right. One of the things that I have on my website, and I love the graphic, it's like, you know, get your business out of zombie mode, right. and I love that. Because my web designer did that and she put that little graphic in there because we had talked about zombie mode. Well, I've talked to entrepreneurs who kind of want to put their business into zombie mode. They're like, I just kind of like it the way that it is, right. And I say, well, that's fine, but wait five minutes and it's going to change. You may not change, but the world will change. Steve Rush: Yeah. Henry Daas: Are you prepared for that? You are constantly iterating. It's exhausting for people, which is why I think so few people want to be entrepreneurs or maybe they, that's another segment which are called wantrepreneurs, which are generally people who want to be an entrepreneur, but are never going to get over the hump. And believe me, I've talked to some, I've even coached some, and it's an exercise in frustration because they're never going to pull the rip. Steve Rush: What's the reason for that? Henry Daas: They're scared. They're basically scared, right? You work for somebody, you get a paycheck, you go on a two-week vacation and you never have to call the office because you're just kind of a cog in the wheel. And people say, oh, entrepreneurship is too risky. I say yeah, you know, what's riskier than entrepreneurship? Working for somebody else. Because they determine your fate, 30 million people in the U.S. were laid off overnight when COVID came, right. Steve Rush: Yeah. That's a pretty scary thought, Isn't it? Henry Daas: Very Steve Rush: So, there's a few things that you've talked about that have a direct correlation, or maybe it, it might not appear directly correlated to your work right now. So as a finance coach, having written the book, FQ: Financial Intelligence, there are a number of little things I just wanted to pull out there that we could maybe have a conversation around. So, you were telling around the way that people are pivoting their businesses and, you know, looking at mobile opportunities, you were talking around the fact that people had less office spaces. So that directly says to me that people are going to be, there's going to be a wash of commercial property. That's up for grabs for either reinvestment or divestment. And if there is a rush to more mobile activities, there's also an investment opportunity there. So, those natural occurring economic events that are happening around us may not be so apparent. Is that the kind of thing you coach people on? Henry Daas: Somewhat, so. I really have two platforms. There's the entrepreneurial coaching where I'm working with, you know, entrepreneurs and business leaders and then there's the FQ, which is pretty much for anybody. Anybody who wants to level up their financial game. So, I take a very systematic, methodical approach, and it's really based on, you know, my 61 years on the planet, it worked for me. It may or may not work for you, but the fundamental tenants of how you manage things, I think there's a universality chart, right. Steve Rush: Right. Henry Daas: People ask me, what's the number one takeaway? Risk, right. We just touched on it, which is risker? Working for yourself or working for somebody else? Most people will tell you working for yourself. I demure on that. I don't believe so. I believe working for someone else, but it's the same thing with portfolio risk, right? So, look at commercial real estate. I talked to my former landlord in New York City. And I wrote about it in one of my bi-monthly newsletters that I put out; I call it the Nasdaq update. And I try to touch on little areas and try to dig a little bit deeper than the superficial headlines that you find in most of the, you know, financial world or the mainstream media. And he was telling me about how, when COVID hit, he's got 600 units in New York City, right? So, 600 different tenants, which is a lot and they want a bunch building. And he said, the government came out and said, you know what? You don't have to pay your rent. So, guess what people did? Or in this case, didn't do right. They just stopped paying her rent. So here I am, the big, bad landlord that everybody hates and demonizes. They didn't do anything for me. My real estate taxes are still due, my debt services still due. I guess they didn't care because they figured all of us are rich, which is not true. Yes, sure. Some of them are. The Routens of the world and the, and the Helmsley's of the world, sure. Steve Rush: Yeah. Henry Daas: But a lot of them are little entrepreneurs just like everybody else. And they got slammed. And the ability to pivot when you're in a real estate portfolio, it's a lot tougher than if you just have a nimble entrepreneurial business, oh, we're a SAS business. And we were servicing this market. Well, let's service this market, right. You can pivot on a dime. Can't do that in a real estate business. It's just not just not possible, but there will be huge opportunities because think about the, I'm living at my office. Well, you got all these commercial buildings. In many cases, they've got enterprise level infrastructure built in. So, if you can convert those into live work condos, well, there you go, right. People have to live somewhere and they don't have to live proximate to an office anymore, which is why the real estate here in the United States has gone haywire. I mean, we bought our house. We went to contract in October and we bought the house. We closed in December, but we had to pay about 20% over the asking price. And there were 10 bids in 24 hours for this little house on a dirt road, in the middle of nowhere, Connecticut. That's kind of crazy, that won't last, you know. That will start to fall off a little bit after people realized that, oh my God, I just moved a hundred miles from my office and now guess what? They want me to come back because they realize they're spending 90 bucks a square foot for this office space and we better have some bodies in there. Otherwise, we made a terrible financial decision. Steve Rush: Exactly right, yeah. So, I wonder if you think about the whole notion of there is opportunity in any crisis, how do you help some of your clients through the moral dilemma in taking advantage of other people's business downturn in order to get ahead? Henry Daas: Well, I'm very careful about predatory behavior. I'm not a fan of it. Don't, be a predator, right. But some of this is just more pattern language, right. You say taking advantage, taking advantage of a downturn, let's say for instance, okay. Let's say the commercial real estate market collapses in the next six months, which is, I don't know if it's a probability, but it's a possibility that it just might, what do you do? Do you go in and take the cash that you've been hoarding on the side and buy stuff for nickels on the dollar? Is that predatory behavior? or are you injecting liquidity into the market where otherwise this place might just go to foreclosure and get stuck on a bank's balance sheet somewhere? It's sort of like short selling, right. Short sellers have a sullied reputation in the market. And some of it is deserved because they will bash a company relentlessly to drive the price down and then they'll cover and they'll make a boatload of money and they really didn't do anything. But again, they brought liquidity into the marketplace. Liquidity is good. A lack of liquidity will destroy any economy, right. The biggest headwind that we faced when COVID came here in the U.S., and we learn this lesson back in 2008, with the housing crisis. The housing crisis was essentially a liquidity crisis when you strip away all the other stuff that went on there and the fed with Bernanke and Paulson came in and they were just kind of printing money, right. They're doing the quantitative easing, right. Which is a fancy word for saying, we're just going to go buy bonds and we're just going to print money and we're going to buy bonds. The first thing that the fed did here in the U.S. when that happened back in March was, they said we are going to provide an infinite backstop. We will never stop backstopping this economy. Well, I heard that and I said, that's really good news. That really, really good news. Now we're seeing the effect of that a little bit with the inflation fears that have gone on, right. The price of lumber, 1500 bucks for a thousand board feet, that might not mean anything to anybody, except that it's usually about 200 bucks, right. So, it's a stick of wood that used to call costs $2 dollars. I moved into a new house. I hadn't bought sticks of wood in a few years, and I had this mental image of what it cost. And when I walked into Home Depot here and it was $7 dollar, I thought, what on God's green earth has happened? And now it's gone up even higher. We're planning a renovation for this house. Well, that cost just went up by about 30%. So, you know what? I can put it off. Well, then think about how that impacts the world. If folks like me put it off. That removes demand. Supply is constrained, but if we lower demand too, but then we get into the issues of stagflation. I don't want to go too far down that rabbit hole, but there's a lot of unintended consequences of these black swan events like a Corona virus. And they will take time to work their way through the system. We talked about it. I don't know if it was before we were recording, but we talk about keeping the powder dry, right? Put away a little safe store of cash. There will be opportunities. You have to decide when you put your head down on the pillow at night, whether the deal that you're trying to do fits your moral code or your ethical code, right. You have to operate; I believe by some sort of code. And for me, if I feel like I'm being predatory, there's a very good chance that I won't go through it because I don't like the idea of cashing in, on someone else's pain. Steve Rush: Yeah. But I do like the way you reframed it earlier. So, this is definitely a mindset for me around the adversities happened, right. And inaction in itself means that could be catastrophic. Whereas some action from somebody who can add liquidity, add investment, add opportunity for others to then grow again, is a good part of the economy. And I think that definitely there is a mindset that plays out there. Isn't there? Henry Daas: Oh, there no question that it is. And it's, you know, you'll hear people talk about smart money, dumb money, right. It's an indicator that I follow. There is a couple of indicators that I follow. Smart money are the people who make smart money moves and dumb money, or people who make the dumb money moves. Right now, dumb money optimism is stratospheric where the smart money is kind of pessimistic, right. They look at the market and say, Hey, none of this makes a lot of sense, right? Like, why are people spending huge amounts of money on collectibles? Right. Like I collect baseball cards from the 1960s and seventies. Usually, every spring when the baseball season starts, you know, I work on adding stuff to my collection. Well, it went crazy and the prices went crazy and I'm like, I'm not going to buy into that. In fact, I should be a net seller. I should probably divest some of the cards that I have because the prices are idiotic. I don't want to, that in itself could be construed as predatory because if you know that the market is overvalued and you purposely go in and sell your collectibles for a price that you think that they're not even worth, that's, you know, you're taking advantage of it, but I didn't make the prices. The market did. Steve Rush: Sure. There's the latest craze as well of sneakers and running shoes. There was an old pair of Kanye West running shoes yesterday that was sold for one and a half million dollars.   Henry Daas: My 29-year-old son is a bit of a sneaker head. And he's got probably a hundred different pairs of sneakers. Steve Rush: Right. Henry Daas: He buys and sells them, but mostly he likes it because he enjoys them. He bought a pair of Jordan golf shoes. I looked at them, I'm like, wow, those are gorgeous. He's like dad. I paid like $250 dollars. I go and I buy the cheap golf shoes. You know, I'm a golfer. I just bought a new pair. I just tried to buy the cheapest thing ever. Because I know I'm going to wear them out in the season anyway. He said, dad, I could flip these for probably a thousand bucks. I said, well then why don't you? Steve Rush: Yeah. Henry Daas: Well, because I like them and I want to play with them. All right. That's good too. Steve Rush: There is this new trend of investment strategies around things, like there's an index now for sneakers and running shoes. There's also lots of other things that are presenting itself. They're attracting new financial solar printers into the investment space, such as Bitcoin and stuff like that, and cryptocurrencies. Henry Daas: Crypto, yeah. Steve Rush: What's your take on kind of taking advantage of some of these emerging investment strategies and indexes where you can't really value them as you would an old-fashioned stock? Henry Daas: Well, for me, if I can't value it, I got nothing for you, right? I mean, this is pretty basic. Now some of this goes back to the fact that when I started trading, I was in high school. I bought my first stock, I was 17 years old, Chrysler, you know, the automobile company. So, I've been doing this a long, long time. And I started as a fundamental investor. So, I looked at the fundamentals, right. There are things like price earnings ratio, right. These are measurable things. As an entrepreneur, you can measure whether your business is successful by measuring your gross margin and measuring your cashflow and measuring your price, you know, your P&L, your profit and loss, and looking at your balance sheet, these numbers don't lie. You can make them lie, if you want to. That's what accountants are for. They're supposed to make the lie to the government. So, you don't have to pay more taxes than you have to, but otherwise they're their numbers. The beautiful thing about them is they're the same in every language, right. And they speak to you. The crypto stuff. And I run a passive, you know, I have a passive investing mastermind group that I run. So, we talk about crypto all the time. I told the guys at the last meeting that we had, I said, look, every generation will have their snake oil. They're folly. Yours just might very well be crypto, or maybe the next generation or these NFT, these non-fungible tokens, right. Fungible means to perform. So, you're telling me that this is a non-performing token. Well, that alone is going to make me run for the Hills.   Steve Rush: Yeah. Any investment manager worth their salt would have a few worry beads about that, right? Henry Daas: Exactly. But you know what, you can't prevent people from the folly of their own ways, right. So, when you have a guy goes on Saturday Night Live, Elon Musk, and start talking about the doge coin, which was created as a joke and now that's going up and then he says something and it goes down, do I really want to participate in a market where one person's word can cause a waterfall decline? It doesn't meet my risk tolerance. Steve Rush: Right. Henry Daas: It doesn't meet the profile. There are so many things to invest in. I'm primarily a stock investor, although I've invested in real estate and I own gold. And I participated in a lot of the arenas. I got to understand it. I have to be comfortable with it, right. I invest in a lot of pharmaceutical stocks. Do I understand the science behind these pharmaceutical stocks? Hardly, but I do understand the landscape and I can read a report and look at the numbers to sort of see how this is going, right. I can't do that with anything currency related or anything crypto or otherwise. Steve Rush: Yeah. Henry Daas: And that's worrisome. Steve Rush: Yeah. Henry Daas: So, I don't want to worry about it. I don't want to worry that in the middle of that, plus a trades 168 hours a week, right. The nice thing about the stock exchange, it's open 32 and a half hours a week. That means for the rest of the week, I got time to myself. And I know that prices are moving in the background, but they're not moving that much where crypto, I could be asleep and wake up and it loses 20% of its value as I'm having my morning coffee. I want no part of that, none. Steve Rush: There is definitely people that have got rich on cryptocurrency without a shadow of a doubt. But like you said, they're also probably the same people who will hold onto it for too long and also perhaps not be so rich at the end. Henry Daas: Yeah. There's a a curve that's called the, you know, it's like the boomer bus curve. There's like 14 different steps to the wave. And it goes from irrational exuberance to complete and utter despondency, right? It's like, it makes like a sign wave. I've got it somewhere, somewhere in my book. You kind of need to know where you are on that curve because that will help guide you into where you should be. Right now, I think everything is overly risky. But you know why I worry about the downside all the time. And sometimes I'll trade the downside. You know, if things get more parabolic, I'll start fading stuff. Because the probability that this thing is going to go up 10% versus down 30%, much greater on the downside. And I want the odds in my favor, I'm in this to make money, let's face it. And I don't lose sleep over the fact that some other trader somewhere that this not necessarily a zero-sum game, but if it was a zero-sum game, like in the options or the futures market, you know, there's counterparty trade, you know, he or she is a grown ass adult. They make their own decisions. Steve Rush: So, if I'm tuning into this today, and I've got maybe a small part of cash in my pension, or have some residual cash in my business, I'm just thinking about where should I start investing. Now, I'm not asking for a specific stock here, but if I was going to start out, where would you kind of guide me as a coach. What would be a sensible place to start investing? Henry Daas: Well, I'll relate a story that I've related to before. This was a couple of years ago, I was in Bangkok for a conference. And I had, you know, I had a sponsor. I was sort of a sponsor for the conference, about 300 entrepreneurs, what they called digital nomads. And they run location, independent businesses, which is another future trend. I mean, it's the now trend, but it's going to be even, you know, bigger and bigger and bigger. And he said, you know, can I, you know, borrow some of your time. I said, sure. You know, come up, I'm going to order room service. We'll hang, we'll talk for an hour. And he's an entrepreneur, successful one, lives in California. And he wanted to know, where do I put my money? Just like you asked. I said, well, what are you interested in? What do you, like? He said, you know what? I really like real estate. I said, well, then do real estate, right. You got to have some affinity for the investments. So, if you love crypto and you're reading about crypto and you're totally into crypto all the time. Sure, invest in crypto, but you better keep a really close eye on it because the volatility and the risk there is very high. If you like stocks, stocks can be really boring. I've tried to teach stocks to young people, but I tell people, another one of my many, many, many idioms is, I say. If you're trading exciting, you are doing something wrong. It is not supposed to be exciting. In fact, a few years ago when I was, pretty much 10 years ago or so, when I was trading pretty much full time, the reason I stopped doing it is it just was boring. And I was making plenty of money, but money doesn't excite me that way. There was no human interaction. You know, I don't watch any of the shows, because they're dumb. That's trader porn. Like if you watch CNBC or the other ones, it's like that can negative. Steve Rush: Bloomberg. Henry Daas: Yeah, Bloomberg, all that stuff can. I wrote about it in my book. How I blew a trade because listening to some yo-yo on one of those channels and I never turned him on again. Steve Rush: Yeah – I’ve done that too. Henry Daas: I never have. I trust my instruments. I'm flying a plane. I want my instruments, not somebody talking in my ear telling me what it is that I should do. Find what you're interested to start with. Now, people come back to me and say, Henry, I'm not really interested in any of this. I just want to hire somebody to go do it for me so I can go play golf or, you know, whatever. I say, well, if you were hiring somebody to do anything for you, do you think you want to have at least maybe a passing knowledge, maybe understand the verbiage. So, you know what they're talking about. I'm not telling you that you need to be an expert, but you should know something because if you don't, you're going to get fleeced. Steve Rush: Yeah, definitely. Henry Daas: Here's an example. I had a guy in here because the floors and part of my house are cold and the guy came in and said, oh, because your crawl space is not insulated. Yada, yada, yada, next thing you know, I got a quote for $7,000 to encapsulate, my crawlspace. So, I said, huh, all right, well, what do I want to do? I want to do a sanity check and call a couple other people and have them in. And then I had two other guys come in and they both said, you can do it. And you can spend $7,000, but it's not going to solve your problem. Because when it's all said and done, you're still going to have cold floors. So, you need to have at least some knowledge, do some research before you can make decisions. Especially if you're going to hire somebody to manage what is arguably the most important and ubiquitous aspect of your life, which is money. You will never, ever get a day off for money. Even if you win the lottery, maybe you'll get a day off. And then the next day you got to figure out what am I going to do with this giant pile of cheddar? And how am I going to keep all these predators from trying to steal it from me? Steve Rush: That's very true. And often could even be in a past life. I used to be the investment fund manager for a lot of lottery winners. And in many cases, it causes more stress and anxiety than before they had it, because it's now something else they have to worry about. Henry Daas: There legendary stories of people who have gone bust. There was even a story of a guy who got murdered because he'd won $30 million and he didn't even care about the money, right. I don't even know why he bothered to play the lottery, but somebody cared about it and worked out a scheme and ended up killing the guys. So, yeah, there's are books out there about these problems. And the reason in most cases is they didn't do anything to earn it, right. They just didn't. I mean, if I went out there, there used to be a TV show called the millionaire, way back in the 1960s when I was a kid. A guy named John Beresford Tipton. And he would give people a million dollars. I don't know if it was real or not, but if you went around and gave people a million dollars and then came back and checked with them, if you gave a hundred people, a million dollars and check with them, say five years later, how many of them you think would have more of that million dollars than last? Steve Rush: I reckon percentage wise; it must be less. Henry Daas: It's powder. It's probably a couple of basis points of people who would. Most people would just go out and squander it on stupid stuff that they just had pent up demand for. Very few of them, and we see it with professional athletes here in the U.S. I'm sure there are similar problems. Guys who've made millions and millions of dollars and then they retire and they get out and they filed for bankruptcy. And you scratch your head and say, how could that be? That guy made four $50 million dollars in like a five-year or less than 10-year career. How did they manage to squander it? But they do, you know, where there's a will, there's a way. I don't want people to do that. You know, I look at my parents who were a very, very modest means, and yet they live very well. And when they died, they left, you know, they left money behind, which is kind of unusual in and of itself. A lot of people die broke. And they did it not by being extremely frugal. But they were smart and they manage their money and they knew their risk tolerances. And they understood that there's sometimes a little bit of sacrifice that you have to make in the short term to get a long-term gain, a long-term windfall in many cases. That's about the mental process. That's about being mindful and adapting to that. Steve Rush: Sure. Now you've been an entrepreneur, solopreneur. Had many businesses and led many teams. This is a leadership hacker opportunity to tap into your leadership backstory. So, the first place I'd like to go to Henry is to tap into your top three leadership hacks. What would they be? Henry Daas: Okay, Number one is, find smart people, right. That's another, you know, Bill Gates. Surround yourself with people that are smarter than you. Now, smart is a relative term. It could be that they're more financially intelligent, emotionally intelligent. It could be that they provide stability, but whatever it is, find some people that you trust to be part of your personal leadership team, even if you're just a solopreneur. In addition to that, maybe this is one, that's number one, maybe One (A) is, find some people whose worldview is counter to yours, because it's very dangerous. You could build a system somewhere, were it's just group think, right. Where there's just a bunch of yes, men. I don’t know if you know who Tony Hsieh is? the guy who founded Zappos. Steve Rush: Yes. Suddenly passed away. Henry Daas: He died tragically. And I had gone to Zappos. I had gone to their headquarters with a group of entrepreneurs right after they were bought by Amazon. And we met with their, you know, we didn't meet with Tony because he was out of town, but we met with their top people and we looked at what we're doing, and this is out in Vegas. It was before they bought this compound. So, I had a lot of admiration for this guy. This guy was a self-made guy. I thought he was one of the good guys, but then I read at the end there, he kind of lost his way. He had, you know, hundreds of millions of dollars, he was using it to sort of buy friends. I had no idea what this story was. And the singer Jewel had sent him a letter. Saying, you know, you're going down a bad path here. You don't have any friends, everybody that you know is on your payroll. So, you have to be careful. You know, if you have a business idea, we're talking about five reasons business fails. So, if you have a business idea, it's very important for you to go to that friend that everybody has, who hates everything and pitch them your business idea and let them poke holes in it, right? Let them destroy your business idea and kill your hopes and dreams. You need that because if you can survive that you might be onto something with a business idea. So, it's the same thing. You need to have a nice array of people. But ultimately as a leader, the decisions are yours and you need to take responsibility. I have another, another one of my millions of idioms. I say, here's what I tell people. They want to know what makes people successful. I said, successful people make proactive decisions and live with the consequences, unsuccessful people, abdicate responsibility for making decisions to someone else and then whine about it when it goes against them. Steve Rush: I really like that. Henry Daas: So, you are going to make decisions and you know, here's probably number three, you're going to mess a bunch of them up. You're going to mess a lot of them up, you just are. Steve Rush: Yeah. Henry Daas: You want them to be minor in the grand scheme of things. But I wrote in my book, how I partnered with a guy, we were building multimillion dollar spec houses and he jumped off a bridge and killed himself and left me holding a multi-million-dollar bag as the sole living, breathing guarantor on this project. Steve Rush: Wow. Henry Daas: This is the beginning of 2007, started a, basically a two-year nightmare where I got sued by everybody and this, that, and the other thing. And then we went before a judge and we won for reasons that to this day, I still don't understand how we won. It was a symptom of the time, because our case came at the same time that Lehman brothers failed and banks were really, really looked down upon for outside risk in the real estate business. And again, I wrote about it in the book. I called it the greater asshole theory. The judge decided who's the bigger asshole. The bank for loaning us the money or us for taking it. And he decided the bank should have known better. Steve Rush: Thank goodness, huh? Henry Daas: Even my lawyer, when he called me, he said, you better sit down because the judge gave you a get out of jail free card. And I have no idea why after 30 years in business, he did that, but we should thank our lucky stars. So, you can make, you know, even the smartest, most successful people, you know, Warren Buffett talks about, how the company he bought, Berkshire Hathaway, which is the name of his company, which was a mill that he bought as one of his first, if not his first investment. And he could never make that business work. He referred to it as his, you know, biggest failure. He kept the company name. Maybe that was a constant reminder that you're only one bad deal away and from being totally humble. Steve Rush: Absolutely, right. So, the next part of the show, we call it Hack to Attack. So, this is typically where something in your life or work hasn't worked out well, but you've then as a result of it learned from it, and it's now a positive, do you have a Hack for Attack for us? Henry Daas: Well, I could go back to that idea of partnerships. A lot of people get into partnerships. My first partnership was with that college friend who was feeding me deals. And made a, you know, a tragic blunder. I didn't have a buy-sell agreement with him. So, while everything was nice and rosie, rosie, and beautiful, everything was fine. And we were making a lot of money, but once that turned, it was all, you know, it was terrible. It was like the war of the roses, right. What I learned from that was, I was afraid that as an entrepreneur, I couldn't be a solo act because I was dependent on him for sales. So, he was doing all the selling and I wasn't. And then when I started my next business, it's like, well, you know what, it's just me. So, I better pick myself up by the bootstraps and learn how to sell, and I surprised myself. I did, and I said, ah, you know what, I don't need a partner. But then years later I got into this real estate deal. This guy was a builder. He built multi-million-dollar homes. He knew everything. He had the crews and whatever. So, I was the money guy who married with him, right. The problem is, I didn't put in the necessary checks and balances. So, when he jumped off the bridge, I was financially blindsided by that. So again, another lesson learns. Steve Rush: And a bit like in the investment world is expected the unexpected, isn't it? Henry Daas: Kind of always need a put option. Certainly, if you're a trader and you have portfolio exposure. One of the early issues with crypto, which people at the time, and again, we were talking a couple of years ago was, I said, how do you short this market? And they said, well, you can't. I said, well, that alone counts me out. Because again, we're back to the idea of having liquidity, but then the CME came in and they created a futures exchange, but it's still apparently rather difficult to fade the crypto market. And that bothers me, right. You need to, you know, you need to be able to get in on the downside as much as people psychologically, don't like to bet on failure, right? 90 something percent of stock traders are long traders, probably close to 99%. Most people they go long. And in the hopes that it goes up. You need to have that other arrow in your quiver because sometimes like now where the market's really, really frothy. There's much more money to be made in my opinion, on the downside than there is on the upside, right? Steve Rush: And it's having that balance too, right? Henry Daas: It's also having the intestinal fortitude to go against the trend. I'm not saying to people now here in May of 2021, that you should run out and short this market, but don't be surprised when there's a downturn and there's a lot of money to be made in short periods of time. You got to have the chops and you have to have the intestinal fortitude to weather it because you talk about exciting trading, which is what we're not looking for. That gets really exciting, really fast. Steve Rush: The very last thing we want to do Henry is do a bit of time travel with you. We've become really accustomed at this part of the show to get you to bump into yourself at 21, you get a chance to look Henry in the face and say, here's some advice. What would it be? Henry Daas: You know, that's interesting. I've thought about that in the past. And I did, you know, what's called Hakomi therapy for a number of years. Where you actually do kind of travel back to your younger self, but I traveled back to myself and like, you know, grammar school age and during that therapy. What I learned was to forgive myself for the things that I did at a young age, because, you know, I just didn't have the knowledge. I didn't have the experience. So, if I were going back to my 21-year-old, I would say, you know, let go of a lot of this baggage that you carried as a younger person, because it's not going to serve you as an adult, right. I never thought of myself as being considered. It was my biggest pet peeve. My opinion didn't matter. My parents were a little overbearing and old school, depression babies. They, you know, they were great parents, but nobody's perfect. As the parent of three boys who were all pretty much grown ass men right now, you're just trying to minimize the number of mistakes you make as a parent, and really are kind of your goal because you're going to.   Steve Rush: Absolutely, yeah. Great advice.   Henry Daas: And I often say, I don't want to make the same mistakes my parents did. I want to make all new ones. I don't want their dusty old mistakes. I want my brand-new shiny mistakes, right. but you don't know that when you're 21, when you're just sort of, you know, coming to adult age, you don't realize how much your early upbringing impacts you.   Steve Rush: That’s true.   Henry Daas: And, you know, my book, I start with the psychology of money. So, you need to really take a look back at that younger version of yourself and say to yourself, you know, was I raised up to live in scarcity or was I raised up to live in abundance? I was raised to live in scarcity and I still have that. And every day that goes by, I worry about money, even though I don't really need to worry about money, but I do anyway, because that was imprinted on me at a very, very young age. And I've had to teach myself to live in abundance.   Steve Rush: Which do you think serves people better?   Henry Daas: Well, abundance does. As long as it's collared in some way, you know, eat, drink and be married for tomorrow, you may die. There's something to do to be said for that. But you have to have a healthy dose of scarcity to kind of keep you grounded and keep yourself humble. Steve Rush: There's no get rich quick system, but there is many get rich, slowly methodically and disciplined way. Henry Daas: I couldn't have said it better. I believe in get rich, slow schemes.  Steve Rush: Great stuff. So, Henry, listen. I've had a ball listening and talking to you, and I'm delighted that we have you as part of our leadership hacker community. If folks want to get to learn a little bit more about you and maybe you get a copy of FQ, where's the best place for us to send them? Henry Daas: So, one of the things I do is, I offer a free month of coaching. If you go to podcast.dassknowledge.com and Daas spelt with two A's and one S although if you spell it D-A-S-S as many people do, it still takes you there. Because I have both URLs because I'm belts and braces. And you can sign up for a free month of coaching, which would be four sessions for half an hour. We can talk about entrepreneurship. We can talk about money. We can talk about baseball cards, you know, it’s your time. It's an opportunity to experience especially for those of you who've never had a coach before, kind of what a professional coach brings to the table. There's no obligation to continue. It's my gift to podcast listeners. If you want the book, go to dassknowledge.com, you can download it for free. You got to click on the FQ tab and somewhere in there, there's a link to download it for free from BookBaby because the only one who makes money off of books is Bezos, and he already has enough of it. Steve Rush: He does indeed. He does indeed. So listen, thank you ever so much for coming on our show. We'll make sure those links are in the show notes as well. So, people can access them super quick, but Henry listen, good luck. And I hope that your financial frugality keeps serving you well for the future. And thanks for being on The Leadership Hacker Podcast. Henry Daas: Thanks for having me. Really appreciate it. Closing Steve Rush: I genuinely want to say heartfelt thanks for taking time out of your day to listen in too. We do this in the service of helping others, and spreading the word of leadership. Without you listening in, there would be no show. So please subscribe now if you have not done so already. Share this podcast with your communities, network, and help us develop a community and a tribe of leadership hackers. Finally, if you would like me to work with your senior team, your leadership community, keynote an event, or you would like to sponsor an episode. Please connect with us, by our social media. And you can do that by following and liking our pages on Twitter and Facebook our handler there  @leadershiphacker. Instagram you can find us there @the_leadership_hacker and at YouTube, we are just Leadership Hacker, so that is me signing off. I am Steve Rush and I have been the leadership hacker.