Episode 219

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Episode Description

Episode 219: Let’s get one thing clear, I’m not a financial advisor, nor do I play one on TV. But I have been investing in the stock market for years – and I’ve learned a lot along the way. I remember the first time I ever invested, my heart was racing and my palms were sweaty. I had no idea what I was doing and I was scared that I was going to lose all of my money.

Fast forward a few years and I’ve now become a bit more savvy when it comes to investing. And while I’m still not immune to the occasional wave of anxiety, I’ve learned how to invest without being too scared. So if you’re feeling anxious about investing, don’t worry – you’re not alone!

And remember: when it comes to investing no one has all the answers, so always consult with a financial advisor before making any big decisions. Shoot! Now I sound like an infomercial…but seriously, this is important stuff!

In this episode Erik Smolinski of esInvests.com joins me as we discuss some simple strategies to become more confident with investing. We talk about associating yourself in a community of people who are committed to breaking out of the status quo financially and finding your own idea of what financial success looks like for you.

No BS in esInvests

If you’re looking for a more in-depth guide on investing without all of the BS, then I’d recommend subscribing to Erik’s YouTube channel. He has great videos on investing for beginners, and how-to’s and tips that will help any level investor perform better in their portfolio building.

About Erik

Despite not coming from money and growing up in an environment that didn’t necessarily breed success, Erik Smolinski became a self-made millionaire before he was 30. 

With the help of several mentors exposing him to alternative perspectives and a wide breadth of skill sets. He started investing, then trading, while in high school with what he saved from odd jobs like splitting wood and working at the local bowling alley. He earned his undergrad from Rochester Institute of Technology and then went on to earn his MBA while on active duty as a Marine Officer. He doubled down on trading in his early 20s and got into real estate soon thereafter. Those two mediums would form the basis of his aggressive wealth development.

Eventually, he founded esInvests, his finance and investing brand designed to share quality information without the bs.

During COVID, many of his military friends were stuck at home and he offered to chat with people about investing basics. He found himself repeating simple concepts, so he made a few videos to make the conversations more productive. The channel grew much faster than expected and the Outlier Community was born.


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Links Mentioned on This Episode

Episode Transcription

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[00:00:00] Bob Wheeler: Let’s get one thing clear. I am not a financial advisor, nor do I play one on tv, but I have been investing in the stock market for years, and I’ve learned a lot along the way. I remember the first time I ever invested, my heart was racing and my palms were sweaty. I had no idea what I was doing, and I was scared that I was going to lose all my money.

Fast forward a few years, and now I’ve become a bit more savvy when it comes to investing, and while I’m not immune to the occasional wave of anxiety, I’ve learned how to invest without being too scared. So if you’re feeling anxious about investing, don’t worry. You’re not. In this episode, Eric Linsky vs invest.com joins me as we discuss some simple strategies to become more confident with investing.

We talk about associating yourself in a community of people who are committed to breaking outta the status quo financially, and finding your own idea of what financial success looks like for you. And remember, when it comes to investing, no one has all the answers, so always consult with a financial advisor before making any big decision.

Shoot. Now I sound like an infomercial, but seriously, this is important stuff. I’m Bob Wheeler and this is Money [00:01:00] You should Ask where we explore why we do what we do when it comes to money.

Despite not coming for money and growing up in an environment that did not necessarily breed success, Eric Molinsky became a self-made millionaire before he was 30. With the help of several mentors exposing him to alternative perspectives and a wide breadth of skill sets, he started investing. Then trading high school with what he saved from odd jobs like splitting wood and working at the local bowling.

He earned his undergraduate from Rochester Institute of Technology and then went to earn his MBA while on active duty as a marine officer. He doubled down on trading in his early twenties and got into real estate soon thereafter, those two mediums would form the [00:02:00] basis of his aggressive wealth development.

Eventually, he founded ES, invests his finance and investing brand design to share quality information without the B. During Covid, many of his military friends were stuck at home and he offered to chat with people about investing basics. He found himself repeating simple concepts, so he made a few videos to make the conversation more productive.

The channel grew much faster than expected, and the outlier community was born. Eric, welcome to the show. And before we get started, I do have to say you have served in the military and I do wanna give a shout out and appreciation for time served. I’ve got family members in the military and it’s not an easy way, so I appreciate the sacrifices.

[00:02:39] Erik Smolinski: Thank you so much for having me. I’m looking forward to talking. I’ve had a chance to check out a couple of your other recordings, and I love what you talk about. I love what you’re doing for your audience. So stoked to.

[00:02:48] Bob Wheeler: Well, I’m super excited because I’m talking to a self-made millionaire before the age of 30.

That’s pretty awesome to like notch in the belt. But let me ask you this. So I know that you’re an investor and that’s in your bio and we’ve talked about that. But [00:03:00] can you share a little bit more with us exactly what you do? Like you educate, you invest, you’ve got real estate. What’s Eric do?

[00:03:07] Erik Smolinski: Yeah, I found early on I’m one of those people that does a lot of little things, and that’s what takes up most of my time.

So I still trade full-time. Real estate, invest, angel Invest. I consult in the public sector for strategy and operations. Really leveraging most of my military background. And obviously I do things like this now, just trying to spread general awareness because that’s how I got started. I didn’t even know investing existed until a random person at my school.

It was the teacher told me about it, no idea it existed otherwise. Oh wow.

[00:03:39] Bob Wheeler: Yeah. Well, so that was my next question was how did you get started? And so obviously, thank you. Teacher .

[00:03:45] Erik Smolinski: Mm-hmm. . Yeah. It’s actually funny because there’s been like two extremely impactful mentors in my life that had nothing to do with my family whatsoever.

One of them’s a stranger online. Perfect. Don’t do that. Kids . The second one [00:04:00] is my junior ROTC instructor. He was literally just visiting me this weekend. He’s like my stepdad now. Wow. We have such a close relationship and I think a lot of that has to do with the fact that I grew up with a single mom and I actually found.

In some weird ways, that was good for me because I started getting parented by all sorts of people from different backgrounds, and I really had the opportunity to absorb from them. So one day he heard me talking with some friends about how I was saving money from my side jobs. He was like, what are you spending your money on?

I was like, oh, nothing. I wanna say that. And he said, oh, well do you think about investing? And I was like, no. Cause I don’t know what that is. Right? And that’s how I got started. He introduced me to it and I got stuck hook, line and sinker. It’s just absolutely fascinating and I think the coolest part about it is for people, it’s one of the few things that can provide a good return on investment with such a low barrier to entry.

It’s whatever you can save and scrape. Well, I

[00:04:59] Bob Wheeler: love that and I love [00:05:00] the fact that you were open and curious to receive the information. Cuz some people would be like, nah man, I gotta go. Like I gotta go bowling or I gotta do whatever. Mm-hmm. . And you said, oh hey, I’m interested. So you grew up with a single mom and I’m curious, cuz you mentioned that you didn’t come from money.

Mm-hmm. . And you specifically said you grew up in an environment that didn’t necessarily breed. And yet you’re successful. So can you talk a little bit more about that? Because you obviously persevered and there was something there that gave you the oomph to move forward. Can you talk about that? Cuz there’s a lot of people that grow up with single moms and not coming from a lot of money.

That’s not a life sentence of financial poverty.

[00:05:40] Erik Smolinski: Yeah, I think a lot of it was, I got used to seeing the way that we live day to day, and I want to be abundantly clear. My mom, she busted her butt for my brother and I. We weren’t hungry. The lights were on, you know what I mean? Like it wasn’t that bad.

However, The area that I grew up in from the high school I went to, there’s at [00:06:00] least statistically low graduation rate compared to the rest of the US low college prep rates, all these sorts of things. And I think what just got me so laser focused on trying to do something that wasn’t our status quo was the status quo.

I got used to seeing the way that. If the car broke, it was a big problem. It was a big deal. That’s actually one of the reasons why my brother and I got good at auto mechanics cuz we weren’t gonna take the car somewhere. We had to fix it ourselves. We didn’t have the money for it. So I think a lot of it came down to seeing that environment.

And then also just the area that I was in, there’s a lot of gang activity, which. It is what it is, but I feel really bad for those people that get stuck in that area. And then that’s the new life. And I just did not want that. And I think the last thing that really got me laser focused on trying something different, at least, is my mom.

She’s sitting there working her butt off for my brother, and I’m like, what? Like, She was a contractor most of her professional career, so that means she didn’t have a [00:07:00] 401k, she didn’t have a bunch of savings. We were fueled a lot by debt to make things go. And I was like, what’s gonna happen to her? She can’t work forever.

So I need to make sure that I’m in a position to actually take care of the woman who set me up. And I really felt a tremendous sense of responsibility to figure that.

[00:07:17] Bob Wheeler: Going into the military, you talked about junior rotc, that’s something you start thinking about in high school. Mm-hmm. . Do you think the military was a way out or that was a way that was gonna provide structure?

And The reason I asked my cousin was like, look, if I hadn’t joined the military, I was going to prison. Like it just wasn’t gonna work out. And it ended up being the best thing for him because it gave him his career after military service. And there was just all these things that came from it. And I think for him it gave him some structure that he didn’t have.

He grew up with a single mom. The craziness of living in LA as a kid. Right. And I’m just wondering that pivot to the military, what was the intention as you laid all that out? Because it’s been very helpful for you.

[00:07:57] Erik Smolinski: Yeah, definitely tremendously helpful [00:08:00] and still one of my favorite things that I’ve ever done, and I really think the main impetus for me going into the military was twofold.

One, my brother, he enlisted in the Marine Corps before I went as an officer, so I went to his Paris Island Bootcamp graduation, and I was just, this is cool. Like these are people that I wanna be around and. I think what got us both so interested in it is the fact that we had two grandparents, both sides of the family, both World War II veterans.

So there was just this sense of, hey, we grew up in a very advantageous place on planet Earth. We’re very thankful for that, and we feel like we need to do something to contribute back. And I think, at least for me, that was the main thing. I felt like even if the Marine Corps wasn’t gonna be a lifelong career, which obviously I got off of active duty, so it’s not, but it was something that I felt like I needed to.

And I owed the country that I grew up when I’m very thankful to be here. Yeah.

[00:08:51] Bob Wheeler: Well it sounds like joining the Marines helped you find your tribe. Finding a tribe is important in the bio you talk about when you started ES [00:09:00] Invests and all of that, that you found your outlier community. Mm-hmm. , and I’m wondering if you can tell people what an outlier is, because some people might be like, I don’t know what that

[00:09:09] Erik Smolinski: is.

Yeah, so during my undergrad in grad, I really got into statistics that was a big part of both of those degrees for me, and I was always fascinated by, we call ’em Fat Tails black Swan. It’s just essentially when you have a data set, no matter how big the data set is, more often than not, there will be an aggregation of data in some sort of focal period, we would call it plus or minus one standard deviation, 68% of.

Will fall within those periods. And essentially the people that start to emerge away from the pack one way or the other, good or bad, those can be outliers. So when I think about the outlier community as I’ve branded it, what I’m thinking about is people who are committed to breaking out of the status quo financially in finding.

Definition of success. And the reason why I [00:10:00] say their definition of success is one person’s financial success could be buying a van, turning it into a camper van, and driving across the entire United States, camping at all these different places and living their best life that could be successful to them, somebody else might want to yacht.

So I think that for people that find that financial success, whatever degree it is, most people don’t get there. Unfortunately, most people are stuck in jobs that they don’t necessarily. And I think that it’s unfortunate because a lot of those folks are probably just not aware of different opportunities, right.

To get to where they want to be. And again, that’s really the whole platform I’m on, is trying to spread just general information. Cause especially in the finance industry, it’s super annoying cuz there’s gurus everywhere and everybody’s trying to sell you something. And that’s why I don’t sell anything.

I don’t wanna sell anything, I just wanna share some information because some people did that for me and it

[00:10:53] Bob Wheeler: was life. I think that’s awesome. And I’m wondering if with the people you come across, and I know you [00:11:00] started out helping friends in the military during covid and things sort of blew up from there.

Mm-hmm. , do you still find that there are people that’ll come to you and say, like, Eric, I wanna learn how to invest, and then you say, great, do A, B, and C. And they’re like, oh yeah, that’s not gonna work for me. Like, they’re still gonna come up with, oh, I can think of a million reasons why it’s not gonna succeed for me.

But thank you for your great inform.

[00:11:23] Erik Smolinski: I laugh as you say that because everybody wants to, you know, achieve success again relative to them. But once they start to get a peak behind the curtain at what needs to happen to make that happen, all of a sudden we start seeing people get squeamish or busier. This isn’t a good time or.

It’s exactly as you said, and I think it’s true for life though. How often is there a perfect time to do just about anything? Right? Yeah. Even the podcast that we’re having right now, I’m very thankful for your time, but we both had to make some sacrifice somewhere to carve this time aside to do this, so it’s so easy to get wrapped in.

There’s not a perfect [00:12:00] time, but you’re absolutely right. It happens so frequently that are people that just want the magic answer. Yeah, which that’s always a fun.

[00:12:07] Bob Wheeler: Well, we all wanna get there quickly. We want the shortcut, of course. Let me just read the first four chapters and get 40% of the information.

What do you think, for you it was that kept you open and hungry and willing to learn instead of going into story of, I’ve got a single mom, we always struggled. I’m just gonna have to repeat that. Like can you pinpoint something specifically where you said, not on my

[00:12:32] Erik Smolinski: watch. I think the main thing I started to realize is once I had my, again, the guy I call my stepdad, the junior RTC instructor, introduced me to investing and I put what I could scrape together in that account and I saw it start to move.

and I realized it moved down. It moved up. But when it moved up, I was sitting here thinking like, wait a minute, there’s something to this because I didn’t put in a bunch of money and I’m already, you know, up X number of dollars. So I [00:13:00] think once I started realizing the opportunity that existed there mm-hmm.

I naturally have, An obsessive personality. Once I find something that I’m interested in, it’s a problem for me because I just become absorbed. Yep, and that’s exactly what happened. As soon as I saw that small sliver of opportunity, that

[00:13:16] Bob Wheeler: was it for me. Yeah. And I think you really touch on an important piece, at least for me, when I wanna do something, I have to obsess about it.

Like I have to become so obnoxious, whether it’s working out, trying to lose weight, changing my eating habits, like whatever it is, it becomes obnoxious to everybody around me. Yeah. Until it just becomes part of me, because otherwise I get sidetracked. And so it sounds like that obsession serves you in that way of saying, I’m gonna figure this.

Yeah, definitely. Now with other military friends and family, it seems like if you’re in active duty, it’s gonna be hard to get up and check the trading if you have to be out in the field or like you don’t know your schedule, or all of a sudden you’re in training for a bit and you’re being transported.

Like what can [00:14:00] military people, especially active military do or make it easier to start investing and start putting some money?

[00:14:07] Erik Smolinski: I think there’s two things I think about cuz I traded when I was on active duty and it was very challenging. But the first thing I think that will make it easier for people is take a principle amount of money, whatever it is that you want to invest, and just go to a compound interest calculator website, Google it.

There’s a million of ’em. Throw in that principle amount. Put in the average return of the s and p 500, which is eight to 12% over the last 60, 70 years, and see what that amount of money is worth at the end. Then all of a sudden you’re thinking, wait a minute, this is worth my time. So once you have that as your motivation to actually do something, I think if you are super busy, buy and hold is timeless.

It works great. Index ETFs, that’s what I would do if I. Super busy. I would rotate my capital over to SPY or I wm, maybe the queues or TLT integrated, depending on where we’re at in the market cycle. And I would [00:15:00] come back in six months and it was what it was. The other thing is when I started trading derivatives, I primarily trade options.

Now they’re super flexible, so you could trade intra day. I can trade within a trading day or even after hours, or I could set up trades that are good for a year plus. So you can start to set up positions that accommodate your schedule. Even right now, I’m going on vacation in a couple weeks, so I’m adjusting all of my positions.

I’ll still check it while I’m on vacation cause I love it. I’m addicted to the markets. I love it. But I’ll set up the positions so that I don’t have to, so if I’m out scuba diving, there’s no impetus for me to have to log on and adjust it. And you can do that while you’re active duty. The main thing is maximizing the down.

People think that they need to do all their research, all the planning while the market is open. And for me, all of that’s done when the market’s closed. I do that in the evenings, late at night because I’m not interrupted. It’s good focus time and then when the market’s open, I don’t need a lot of time. I need five minutes so that I could check pricing, run things through a quick model [00:16:00] and get it out the door.

So I think just finding a system that allows you to interface with the markets at your cadence based on your schedule, it’s doable. That’s the most important part, I think, is to know that it’s do. So how do

[00:16:12] Bob Wheeler: you deal with the people? And I deal with this in my office all the time. In accounting. I can handle the word invest.

I can tell a client you might owe taxes. Mm-hmm. , but then when you start saying derivatives, puts and calls index 500 mutual funds, and their eyes, you know, just glaze over, oh, well now I can’t do this because I can’t even spell Deriv. So how do you get those people to like stay the course or just like put money in an index fund or Vanguard or you don’t have to be doing puts and calls and Sure.

Like there are simpler, it doesn’t have to be complicated. Agreed. Even if there are big words, but how do you get people to stay on board when they wanna just freak out and go, these are big words that it sounds. There’s

[00:16:56] Erik Smolinski: two things for there. The first one is I would show [00:17:00] them the opportunity cost. The way that I tell my friends is you can’t afford not to do something.

You literally cannot afford not to do something. If you look at where inflation is right now, take whatever’s in your savings account and look at the buying power this year. Look at what it’s gonna be next year. It’s gone. You just lost nine, 8% dependent on what you’re buying. You can’t afford that. Yeah, especially.

If the goal is to leave a nine to five and actually have some choice over what you do on a day to day basis instead of working for somebody. And then the second thing is I just go back to the compound return calculator. So that you can always keep that carrot in front of your face saying, yeah, okay, this is really tough.

But if I even figure out how to, there’s three steps open a brokerage account, fund it, index etf, done. Anybody can do that. And I actually have a video that talks about it walking through it. You can do it in less than seven minutes. But the thing is, is once you understand that, that a hundred thousand dollars at, again, 10 to 12% over a 10 year period, that that’s [00:18:00] $260,000 or something like that.

So there’s a big carrot at the end of this if you just even apply a minimal amount of effort, and then once you see it might be for you, you might be like me and say, I love this stuff, and go in headfirst. Or you might say, I hate it, but I got a brokerage account. I got index ETFs running, I’m done. But I think the finance space is super frustrating because that’s exactly it.

We use words just to confuse people. It just increases the barrier to entry. So now you need, right, somebody to come help you do this. And it’s like, no, just because you could be long a product, but short the market, or we just make it so complicated for no reason and it’s just bare to entry. It’s frustrating, but it is what it.

[00:18:43] Bob Wheeler: It is. And the other thing talking about barrier to entry is, you know, people are listening to go, oh, I have to have a hundred thousand dollars. You don’t have to have a hundred thousand dollars. You can do 50 bucks this day and age. You can do a hundred bucks. You don’t have to go down to the financial brokerage house [00:19:00] and like you can go online and you can set the stuff up and you can automate it five bucks.

Like there are ways to do it. Even acorn, just like Penn. You don’t have to have a million dollars to start making your million

[00:19:12] Erik Smolinski: dollars. I totally agree. And the thing is, when I first started investing in a high school, I had 3,500 bucks that I scraped together before I found out about it. I would’ve invested earlier.

So there’s a ton of really great opportunities, but for me, if I were to start over, I would save to start buying single shares of SPY or iwm. There are two index ETFs. One is the s and p 500, which is blue chip stocks, 505 of ’em, or 506 now. And then I WM is the Russell 2000, which is 2000 plus small cap stocks.

So they both limit Unsystematic risk, so you have less exposure to individual companies. It’s a little safer, at least in terms of a overall risk perspective, but you don’t need to save a bunch of money to do it. Now, the one thing I will caution people is a lot of modern brokerage firms, they do like [00:20:00] you’re talking about, they have partial shares that you can enter into.

The only thing, and I’m good or bad, it’s up to people to decide, but it’s important to know that partial shares don’t exist outside of that individual brokerage firm. They’re fake. What happens is brokers buy tons of shares and then they cut them. Inside ’em themselves. So if you needed to move brokers, or if a broker goes insolvent or something, you’re three quarters of a share of Apple actually doesn’t exist.

It’s not a thing. Yeah. But it’s a brokerage service. But the thing is, is that there’s plenty of brokerage services that offer it that are F D I C insureds. So it could be a great way for people to get started. You just kind of have to figure out. For me, I would wait until I have the 150, 200 bucks to buy one share of SPY or IWM and do that.

But there’s tons of ways to get involved as you’re ready to.

[00:20:44] Bob Wheeler: Yeah, I think the point is just get your foot in the water. Start. Yeah, just start. Just dip in. Well, talking about military, and I’m curious if I’m young, I just joined the military. Maybe I’m living on the barracks probably, and I could choose to get a house [00:21:00] allowance and move off the barracks, but maybe, and I don’t know how that works exactly.

I don’t remember, but I believe like if I live on the barracks, I’ve got my meals covered, I’ve got a lot of stuff covered, so I can take all that extra. That I might spend on beer or that I might spend on going out and just fricking eat at the commissary or buy my stuff at the commissary and like take advantage of that.

Would you agree or?

[00:21:22] Erik Smolinski: I think it’s tough. I think it’s easy for me to say at this point do that, but then when I look at my spending habits in college, because. When as an officer, so it’s a little different for us. You know, I still invested a lot and I still saved as much as I could while I was in college, but you know, it’s hard to say.

You just live on bare bones and invest it all. Right? I would love to say that, but I think the main point that you’re highlighting though is instead of going and buying a hundred dollars of beer, buy $75 a beer. Take 25 bucks, put that in the account. Just start with so. And build that habit, because I think that’s one of the biggest hurdles for people.

Because I will [00:22:00] say, and this is actually a really cool. When you’re saving and specifically investing, it gets addicting. Yeah. Because you start to see your account value, it starts at a hundred dollars, then it’s a thousand dollars and it’s $50,000, and you’re like, holy crap, this is more money than I thought I would ever have.

And then all of a sudden you have $200,000. It just starts to grow and that’s very addicting and all of a sudden that actually becomes a pretty big motivating factor itself.

[00:22:22] Bob Wheeler: Do you count the money you put in investing as an expense? Like if you do a budget, I don’t know for you, but for me it’s like, oh, I gotta pay a hundred bucks there, 500 bucks there, two 50 there.

Like I have multiple accounts, so each one is a small amount, doesn’t feel painful, but they’re all part of my expenses. But then I look in and I go, oh wow, look. Look at my gold account. Oh, look at, and they grow a lot quicker than you. If you actually set it up and forget about it, like not completely forget about it, but Right.

Forget that it’s available to

[00:22:51] Erik Smolinski: spend. Yeah, and I think for a lot of people that’s a great approach is just immediately say on a monthly basis, this automatically goes into that account. I [00:23:00] was in a little bit of a weird scenario, again, with the way that my brain worked. It was almost the inverse where everything I had was gonna go in the investing account.

I needed to partition out what I needed to. So I had like an inverse methodology, but again, that’s just because I was obsessed with making that number grow because I knew the earlier you can get your account to a larger balance, the longer you are giving compounding return time to work. And one of the most beautiful things is when we get older, we have a bunch of time, a bunch of money, not necessarily a bunch of energy.

So I think the best thing you could do is find a middle ground where you’re a little bit younger, but you have enough capital to give yourself time to go do whatever it is that you want to do. So the earlier you can start that process, the far

[00:23:46] Bob Wheeler: better off you’re going. Yeah, and I think that’s so important, finding the balance.

I know there’s a lot of people that love what’s called the fire movement. Mm-hmm. , financially independent, retire early, and some of them will like, we’re just going to eat crumbs for the next five [00:24:00] years and we’re going to can pedal and foot pedal our car to work and stuff. Mm-hmm. like, I don’t wanna be that extreme, like that’s me personally, but for other people that’s an amazing choice.

Kudos to them, but for me it’s finding the balance of, oh, this feels good. Because I do think in this culture, sometimes we forget to balance celebrating and enjoying the fruits of our labor. Mm-hmm. , I think we’re so busy fruiting and laboring that we don’t like. Get to have a moment to go, oh yeah, that was sort of cool.

Here’s my reward.

[00:24:30] Erik Smolinski: Yeah. And that’s actually one of the things that I really enjoy about the military is it gives you great perspective because it’s an unfortunate thing, but you’ll see people, that’s why I wear this bracelet. You’ll see people close to you die for different reasons. Yeah. And we think, and you know, it’s cliche as it sounds, but once something hits close home, It resonates that tomorrow is not necessarily promised to you.

It is not. So what I don’t want to do is have a stack of 15 million in the bank account when I’m 49 and [00:25:00] die when I’m 50. Right. Great. I’m so glad that that’s in the bank. Can’t take that with me. And, and this is something that same guy that I mentioned earlier that I referred to as my stepdad told me.

Starting to get money earlier and enjoying it a little earlier is again, for him would’ve been his priority because he worked his whole life. He was a retired Air Force colonel, but he ended up getting cancer and now he’s not super mobile. He was just out here this weekend and he was sitting there talking like, Damn.

You know, when I retired I was gonna go work on these houses, sell the houses, cause he likes to do that. Go on a bike trip. But guess what? He’s dealing with medical issues. So that’s why he’s such an advocate of that. So for me it was like a sliding scale early on, early twenties, grind, save as much as you can.

Mid twenties still grind primarily, but I was at a point where I could start using a little bit of the money and it was really for other investments. That’s when I started getting into real estate. And then late twenties is when I started getting to a threshold. Okay. I have something I can use now if I want one.

I. But I still wanna [00:26:00] work. So I’ve just been slowly moving that sliding scale and now I’m 31 and I’m at a point where if there’s something I want, I can probably get it. I still am leaning more towards development, and I think it’s just because it’s a subconscious thing that’s built over the last decade.

But I do think increasing that sliding scale because it’s just like working out, as you were talking about before. Compliance is the science. Whatever gets you to do the thing most consistently that you should be doing, that’s the name of the game. So if it’s buying a cup of coffee out a couple times a week, that’s what makes you happy and you get by on that.

Who cares? You can’t pinch pennies to creating serious wealth. It needs to come from income sources, not how little are you spending. It’s a good mindset and it’s important, but you know, it’s important to make that differentiation. I think.

[00:26:48] Bob Wheeler: Yeah, absolutely. Well, let me ask you this. A lot of great successes, but every single investment worked out every single time.

You never like missed the. There was never a setback where you were like, [00:27:00] oh God, I should have seen that coming. Yeah,

[00:27:03] Erik Smolinski: no, it’s super smooth sailing. Nobody

[00:27:06] Bob Wheeler: liar. I wish ,

[00:27:08] Erik Smolinski: when I was in college, I had a really awful run in with the Dunning Kruger effect, and for those that aren’t familiar with it, it’s essentially this really, really dangerous point where you’re learning so, and you know, just enough to be dangerous, but you still don’t know what you don’t know.

Right. And that’s when I took the largest percent draw down on my account. And it was devastating because I had this account that I was building, I was actually doing really, really well. I had incredible returns when I started getting super into it, especially while in college. Cause I had a bunch of. So I’m like, oh yeah, I got this down.

This is like a money printing machine. And all of a sudden I look up at my account the next day and I was just like, I’m over 50% gone. And I had to stop the bleeding and the real kick in the old behind on [00:28:00] this is the trade would’ve been a full winner at the end. But anyways, uh, you know, I had to stop the bleeding and I went full.

I stopped everything and I said, I don’t know what I’m doing. I need to figure this out big time before I trust myself. And after that experience, I actually think I almost went too far to the other side. I became so risk averse because I was grinding so hard to make this money, and then I lost a bunch because I got over confident and then I didn’t wanna offer more risk out.

So I was going through this awful cycle of trying to develop a healthy relationship with money because in order, in my. To successfully deploy capital to maximize our returns, you can’t be clinging to it. You have to accept risk. You have to accept the fact this might not work out. We try to pick good risk, but if you’re so scared of risk, it’s hard to get anything done.

And I was just going through this awful cycle. So in the investing world early on, that was an important cycle for me because it made me, I say, don’t trust yourself. That’s [00:29:00] a big thing I say, and I know it’s a weird statement, but what I mean by that is, especially when we’re deploying capital, I found it’s really important to have a trade plan and a trade log.

And essentially when I’m doing anything, I write down my thoughts at the time, what I think is gonna happen because I get rosy when I’m looking at it in the rear view mirror. I think, sure, oh, it only didn’t work because of this or that. But then when you look at the trade log, you’re like, wait a minute, dude.

Like this hasn’t worked eight outta the last 10 times, regardless of what I think. I think, right? That’s not what’s happening. So I think that was really formative. And then the other thing I do is angel investing. I wouldn’t say I’m at break. Even there, I’m definitely slightly profitable, but for the amount of work I put into that, it is one of the most difficult places to make money.

It is a brutal space. I love it. It’s fascinating to me. But that’s another place where I have been kicked in the face more times than I car to count, because everybody comes with these really great ideas and yeah, you wanna help everybody and then all of a sudden you realize like, wait a minute, these guys aren’t doing so great.[00:30:00]

I need to reassess.

[00:30:01] Bob Wheeler: Yeah, no, that’s painful. And you know, it’s interesting because I have a lot of clients. I have about a thousand clients, and so I get all kinds of perspectives on things. And Bob buy crypto, I’m doing mining and I’m putting $300,000 into it. It’s gonna be amazing. Here, just put in a hundred thousand and then now I’m talking to ’em.

Now I’m like, Hey, how’s that going there? Like I’ve lost all my money, so I don’t jump right into things. I put my foot in the water, but I go very slowly into the water. Yeah, I’ll eventually get in, but I just do. If somebody wants a quick answer from me, ugh. And it’s not that I take days and sometimes I probably do take too long, but I think if you don’t know crypto or like you’re saying, if you don’t know about something, get a little bit of information or get some guidance instead of just blindly, oh, I know how to spell that word, so let me just throw a million dollars at

[00:30:46] Erik Smolinski: it.

Yeah. I actually really love that though because a lot of people, they get so set in their ways that when they see something like an nft, I personally don’t get them. Obviously, I know what they are. I’m familiar with them. I’ve traded them, and [00:31:00] I’ve actually found forcing myself to get involved in the markets that I’m unfamiliar or don’t really care much about.

Has been really important for me to stay relevant because whether or not I get why somebody would buy a digital picture of a monkey holding a bowling ball, right? Doesn’t matter. Because guess what? Somebody is buying that picture of a monkey holding a bowling ball. Yeah. So yeah, I love that. And finding whatever risk profile makes sense.

I’ve always split my money into two buckets. I have what I call like my core allocation. That’s the money I’m protecting, but growing very consistently. And then I have my speculative allocation. This is where I want to go by the monkey holding a bowling ball and see what happens. Yeah. So I think keeping money set aside, whatever that means for somebody based on their finances, but to be more risky is actually a really good thing because it also gets you more used to moving money, moving risk, understanding that losing is part of this game.

Every week I trade, there’s at least a couple losing traits. It used to be painful hurts. The ego don’t want to [00:32:00] be wrong at this point. I am surprised when I’m right. The market normally has a fancy way of doing everything. I don’t want it to do perpetually, but sometimes it pays out and that’s all I’m here for.

To get that little bit of payout on

[00:32:11] Bob Wheeler: the end. Yeah, that’s awesome. I could geek out on this stuff all day cuz I’ve been learning about NFTs. I’ve got a couple. That’s awesome. Again, I don’t understand ’em. I jumped into crypto, not cuz I understood it, because I didn’t wanna miss the boat in case it took.

But still trying, because you gotta move money to make money. It can’t just sit in an attic or a basement. It’s just gonna get dusty and not gonna grow. So I appreciate that, Eric. We’re at the fast five, and so even though I would love to keep talking about all these investment stuff, we’re gonna shift the energy just a minute.

We’re at the Fast five, which is brought to you by Greenlight, the debit card for kids, managed by parents. For more information, click on the link in the show notes. All right, so Eric, we’re gonna just jump in, get down, and. If someone had a hundred dollars to invest, where would you recommend they invest it

[00:32:58] Erik Smolinski: in the things I mentioned earlier.

[00:33:00] So put it in a brokerage account and then fund your way into an index ETF or a sector etf. That’s what I personally would do. Yeah. Just get

[00:33:07] Bob Wheeler: started. Put the 100 in. Do you have any negative money habits? Yeah, actually,

[00:33:12] Erik Smolinski: I would say my aversion to risk has been something I’ve been increasingly trying to get over as of my latter years.

The account was fortunate enough to. But I was still stuck on kind of previous figures. So that was a big hurdle for me to actually trade the size of the account for what it was as compared to like my comfort level based on my historic performance. So for me, I look at that saying there’s an opportunity cost there because I was too risk averse.

And I think that when I think about bad money habits for me right now, that actually is one that’s top of mind.

[00:33:44] Bob Wheeler: Okay. Now little Birdie told me you love buying and selling motorcycles. Mm-hmm. , is there a motorcycle that you sold that you regret? Oh man,

[00:33:52] Erik Smolinski: that’s a tough one. Probably my first Yamaha R one. It was a 2009 R one.

I had so much fun on [00:34:00] that bike, but if you gave it to me again, I would sell it again because that was part of this chain. I’ve had over 40 motorcycles at this point. I just sold another one two weeks ago, so, ah, I buy and sell ’em all the time. It’s too fun. And does Harley fall into the. I’ve had ’em a couple times.

You can’t turn ’em too great. That actually was super frustrating for me. I tried to turn ’em a couple times. That’s surprising. Yeah. The flip pa scrape. I’m used to mostly like sport bikes and then naked bikes they call ’em without the fairings, a little more upright. Okay. And you can turn those just a lot more.

So I’m just so used to turning on those that every time I try to turn the Harley. It would scrape on the ground and I actually have a gash in my leg that was stitched up because when I was helping the guy load the bike that I sold, I had ground, they’re called feelers, small metal things that come off the pegs.

I grounded down to a sharp point that then cut my leg. Thank you,

[00:34:46] Bob Wheeler: Harley. Oh wow. Thank you Harley. Geez, not good. Um, since becoming a millionaire, has your spending mindset changed? Yes,

[00:34:55] Erik Smolinski: definitely. I think I’ve become more willing to buy things [00:35:00] that I wouldn’t have done before that have a large marginal utility increase in my life.

And I can think about quite a few things that before I would’ve said absolutely no. But I’m at the point now where I’m more receptive to those purchases. I still obviously go through a filter. . Yeah. I’m more willing to spend. Cool.

[00:35:19] Bob Wheeler: Is there any takeaway from having military experience that helps you in your investing?

[00:35:23] Erik Smolinski: Absolutely. The very first thing is accountability. And I think that that’s one of the biggest issues new traders have is when something goes wrong, there’s always a reason for it. Oh, the market moved differently than I expected, or this piece of news came out that I didn’t know about. But everybody forgets to point that old finger straight back at their own face because we’re the ones making the decisions.

In the military, regardless of what rank you are, you are taught that everything that’s around you is your responsibility, period. Doesn’t matter. It’s your responsibility. So I think for military people, the skillset of trading at first steep learning curve can be [00:36:00] complex, but it’s learnable. I’m essentially not the brightest bulb in the box.

So if I can pick this up, I think just about anybody can. But I think military people have this really great. That they’re not gonna blame other things. They’re gonna look at what they’re doing wrong and you can pick up a skill that way. So yeah, definitely. I love that.

[00:36:20] Bob Wheeler: Well, we are at our money and motivation, our m and m sweet spot, and I’m wondering if you’ve got a practical financial tip or a piece of wealth wisdom you could share with our listeners, something that’s worked for you.

[00:36:30] Erik Smolinski: Yeah, I think the main thing is, and I’ve mentioned it a couple times cuz it was always the carrot at the end of the road for me, but take a random amount of money, put it into a compound growth calculator, see what that number is, and then start seeing that number because a lot of ’em will have like an additional monthly, you know, you put in a principle of a hundred dollars and then you have an additional monthly of a hundred bucks.

and see what that does over specific timeframes, because that was eye opening to me. I thought for the longest time that, [00:37:00] oh, well investing is only for rich people. It’s not gonna make a big difference on my money. But then I started to realize like, no, like this is actually very worthwhile. So for me, that’s exactly what I would do if you haven’t done it.

It can be a very eyeopening

[00:37:11] Bob Wheeler: experience. I think that’s a great suggestion and a great piece of advice, cuz I think a lot of times it’s not tangible, so abstract. Yep. You know, oh, there’s compounding interest. It does this, and over a long period of time you put the numbers in, that’s actually what really happens.

And even if you just try it with a hundred bucks or. A thousand bucks, you’ll see that it actually starts compounding and creating wealth. So I think that’s awesome. Well, Eric This’s been such a great conversation and I think what I’ve really appreciated is that regardless of what your current environment is, you can use that for motivation to get you to another place.

Like we are not prisoners of our past or our current financial story. We have the opportunity if we wanna obsess, which I think is a great way to. Obsess or find the motivation to make the shift, create the habit, start [00:38:00] putting away 10 bucks, a hundred bucks, until you can actually start to see some tangible results.

And I agree, it’s highly addicting when you start seeing the work pay off. Mm-hmm. , it’s more inspiring to go, yeah, I don’t need a coffee. Oh, I’m gonna, oh, that’s money that I could do. Like you do shift your thinking and it is a mindset piece that I. We just have to cultivate and for me obsess until it becomes a habit.

And so I just love that you’re out there giving this information to people, you’re paying it forward, people gave you information, and I think that’s such a great way to pay it forward. I was fortunate. I have a lot of angels helping a me along the way. That’s awesome. Through my crazy journey and being able to pay it forward and helping other people that might not have the support system.

In place to just keep giving that information to people. So I appreciate that. Yeah. I so appreciate you having on the show, and I just hope you go out and keep making more money and again, appreciate your service to this country. I think that’s such an important thing and I hope all the military folks out there will use their amazing [00:39:00] skills that they have, that they’ve learned in the military and use that to invest more wisely and more fruitfully.

[00:39:06] Erik Smolinski: You and me both. That’s one of my biggest goals right now is to get more people involved and I think a lot of the services are actually starting to create education for their. On investing. So I love all that. I gotta say it’s an absolute pleasure chatting with you. I love the conversation.

[00:39:20] Bob Wheeler: Beautiful. So Eric, where can people find you online and social media if they wanna get your information?

[00:39:26] Erik Smolinski: Yeah, so I have a YouTube channel at ES invests. I also am active on Twitter at you guest ites invests. So pretty much ES invests is where I’m gonna be. I do have a website. Don’t spend a lot of time on that, Twitter or YouTube. Those are the main places.

[00:39:41] Bob Wheeler: And I just wanna say for the people that are trying to figure out the profound ES invests, those might just be Eric’s initials.

Nailed it. Just a guess.

[00:39:52] Erik Smolinski: super creative on my branding. I know .

[00:39:56] Bob Wheeler: I love it. Hey, it works. It works. That’s awesome. [00:40:00] Well, let’s have, this has been such a great conversation. I love what you’re out there doing and especially military. I just know with my family members and friends that are in the military, all the stuff they have to go through.

So anything that can help them get ahead financially is awesome.

[00:40:15] Erik Smolinski: Yeah, and I really appreciate you having me. It’s great conversation. I love what you’re

[00:40:18] Bob Wheeler: doing. Well, thank you so much and have a great weekend. Thank

[00:40:21] Erik Smolinski: you too. Sees.

[00:40:29] Bob Wheeler: We hope you enjoyed this episode. Did you learn something new about your relationship to money today? Maybe you have a friend who has some financial blocks or beliefs that are holding them back. Please share this podcast so they too can get off the rollercoaster Ride of Financial Fears and journey towards financial.

To learn how to have a healthy relationship with money, visit the money nerve.com. That’s nerve not nerd. We’ll be back next week with another perspective on money and the emotions that bind us.[00:41:00]