When You Invest Like a Boss, a $100M Exit is Easy

Sam Marks is a serial entrepreneur, investor, and globetrotter. As the founder and CEO of Coworker.com, he has co-founded and sold three successful businesses. The company was initially bootstrapped out of the back of a rental car and has grown to be Europe’s largest e-cigarette brand in just four years. It was sold for $100 million in 2013!

He also co-hosts the popular podcast Invest Like a Boss, which is among the top 20 finance podcasts.

During our conversation, Sam shares his entrepreneurial journey, how he negotiated and secured a $100 million acquisition deal, and how passive income investments are allowing him to travel the world.

Risks can be rewarding.

Most startups fail within their first two years, according to statistics. It’s not meant to scare you into not starting a business but to illustrate the reality of it. You have to take risks to be a successful entrepreneur.

It takes a lot of risks to get a business up and running. Risk-taking isn’t just about jumping into a business blindly and expecting great things to happen. Instead, you need a plan and an underlying strategy to handle risks.

At the same time, each entrepreneur and small business owner has a different reason for starting their own company. This means that every entrepreneur decides what risks they’re willing to take. They’re also willing to take a hit. After all, many of us learn best from failure. It also leads to innovation and gives us a competitive advantage. And you’ll never know if you’ll succeed if you don’t try.

That’s exactly why Sam believes that the setbacks and complications he experienced were well worth it.

“It was an incredible experience: day one to year four. I mean, it all happened very quickly,” he said. “We never had venture capital, but it literally started out of living in a car, selling and marketing the product out of a car.”

“And that full cycle up to living in a hostel, to our first office, to having an actual decent apartment and not living off bread and noodles, to hiring staff,” he adds. “And there are so many complications along the way, but it was just an incredible ride.”

“What I realized was that it was all about the journey,” Sam says. “All the highs of building the business were, in fact, building the business.

Be committed to not feeling insecure about your own money.

After working with an advisor for two years, Sam wasn’t getting returns on his investments. Even worse? With all this money, Sam had no idea what to do with it. Despite the market being up, he lost money when he gave 40% of his earnings to a financial advisory team during the sale of the business. The whole process left him feeling manipulated, duped, and frustrated.

“The most frustrating part was that I would go into these meetings with my financial advisor, and nothing made sense to me,” Sam explains. “I felt like I was being manipulated. I felt like I knew what was going on, but they were saying something different. I was very intimidated by the process of meeting with them in their corner office, in their nice suits, and these older gentlemen that were speaking all these words I couldn’t understand.

In the end, Sam thought, This is no way to go through life, feeling this vulnerable with money. “And I know I’m paying them something, some type of fee.” They said they’d make Sam 8%, and they’d take 1%. In theory, it’s a good deal, but they didn’t follow through with it.

So, what did Sam do? He decided to act after reading an inspiring book. For the purpose of holding himself publicly accountable, he started a podcast.

“I thought, I know nothing about investing, but there are so many people out there that know nothing about investing.” In order to motivate him to learn, Sam would start a podcast, put himself on stage with talented investors, and make it seem like he knew what he was talking about. That way, he would be forced to learn.

Be open to redefining your goals.

Before investing money, you need to identify your investing goals, the timeframe in which you need or want to achieve them, and your risk tolerance. It is common to divide financial goals into two categories:

• Long-term goals. It will take at least five years to achieve these goals. Retirement is a common goal, but you might also want to pay for a down payment on a house or pay for college.
• Short-term goals. It will take less than five years to achieve these goals. It could be your Christmas piggy bank, an emergency fund, or a vacation you want to take next year. It is generally not a smart idea to invest money in short-term goals.

If you aren’t sure where to start, simply ask yourself, “What is my goal?”

“My goal is what is most people’s financial goal.” says Sam. “Generate enough passive income to be able to support your lifestyle,” he adds. “But I got to that point, and I realized, Well, this kind of sucks because now I feel like I’m living paycheck to paycheck, right?” Why? Well, inflation made a dent in his net wealth.

“So, what’s better is to create enough passive income to be able to live my lifestyle while still increasing my net wealth and having a surplus. To be able to invest in really interesting things, whether lifestyle or investments.” In Sam’s case, that means owning 400 self-storage units in Hong Kong, a microbrewery in Australia, renting properties in Thailand, and being an angel investor for several early-stage startups.

Look for low fees whenever possible.

“You don’t want advisor fees because those are killer and usually are not productive — like 1%, 1.5% — but also mutual funds,” Sam advises. “A lot of mutual funds could charge you 1-1.5%. So, between an advisor and a mutual fund fee, you can easily have 2-3% in fees.”

Someone who makes 8-9% a year might say, “Whatever, that’s fine.” But, in reality, that’s awful. Over the course of a decade, that is a huge sum of money.

It is impossible to beat the market by picking stocks yourself.

Predicting which asset classes will perform best in a given year is nearly impossible. “You never want to pick stocks,” Sam warns. “You always want to be diversified broadly.”

Even the best money managers have difficulty beating the market by picking stocks. That’s why Sam says that you shouldn’t do it.

“Most people do it, including me. I just do it to have fun,” he says. “But generally speaking, it’s much, much better just to be in the market. And historically, you’re going to be fine if you’re just in the market. When I say the market, just the S&P 500 or a total stock market index.”

Furthermore, for most Americans, passive investments like index funds or mutual funds can be a better choice than spending hours on their portfolios. You may also find that a robo-advisor is right for you if you want to take a hands-off approach.

Invest in something fun and adventurous.

“I’ve tried to orient my lifestyle and investing to be a pair,” Sam says. ”

“A lot of the investing I’m doing has a lifestyle perk to it,” he adds. “And there’s a bit of an adventure to it, so it’s not strictly the gain or the cash flow, but it’s how can I build a lifestyle around investing and have fun while doing it and have some adventure.”

In ‘Adventure Capitalist,’ a man drove around 80 countries and made investments in every single one of them, which was extremely inspiring to Sam. “And I think there’s a bit of that spirit in me.”

As for you? That depends on your lifestyle, budget, risk tolerance, and interests.

Featured Image Credit: Photo by Andrea Piacquadio; Pexels; Thank you!