the 6 traits of people who can’t stop making money

Sam Parr (0:00)

Can I tell you about something I've been noodling on? This idea of a natural money maker.

Shaan Puri (0:04)

I was gonna ask you about this.

Sam Parr (0:08)

I know I could be what I want to.

Shaan Puri (0:15)

Explain, you made up this term. What is a natural money maker?

Sam Parr (0:18)

A natural money maker is a person who tends to be involved in deal making, brokering and inserting themselves into situations. They tend to not build publicly, and they've built multiple businesses ranging from 100 million to many billions in multiple different fields.

There's a distinct difference between a natural money maker and a great founder, or a great CEO, or a great entrepreneur. I consider myself to be a decent entrepreneur. I'm not a natural money maker. Ted Turner, one of my heroes, he started CNN. He was not a natural money maker. He had vision, he knew how to recruit people. He had a good sense of the market and what products to make. But a natural money maker does all of those things, plus they're way colder about money. And they're way more logical, and they're way more rational.

Shaan Puri (1:08)

Yeah, I just think of my buddy Suli. I feel like Suli is a natural money maker.

Sam Parr (1:12)

A natural money maker.

Shaan Puri (1:13)

High hit rate, whereas it seems like most people fail, fail, fail, fail, fail, finally succeed. It's like this person kind of is like, succeed, succeed, fail, succeed, succeed, succeed, right? It's like mostly success, which defies the batting averages that you're supposed to have as a business person or entrepreneur. Secondly, if you ask them to explain it, it's not like a lot of words. It's a lot of instinct. So naturally, naturally instinctively figures out where money's going to be made and where money's going to be lost. So I call this having a great nose. They just sort of sniff out bullshit where bullshit is. They sniff out opportunity where opportunity is.

And they win across multiple categories, even though they might not be the best manager or the best designer or the best at anything. You can't say like, well, it's because they have that one super skill. The skill is being a natural moneymaker.

Sam Parr (2:03)

And I listed out some of the attributes that I've noticed they have that are a bit different from an entrepreneur or a great CEO or a great founder. The first one is that they're unemotional about business. I said natural moneymakers have anxiety like everyone else, but they use their emotions to make money. Being emotional and passionate is actually how a lot of founders typically succeed. It's how they recruit people. But natural moneymakers are far more cold about money, far more logical. And there's a story about Carl Icahn. Carl Icahn was like a tycoon, hedge fund, PE guy of the 1980s. And there's this famous story where he buys, I believe, a shipping company.

And within two weeks of going to the office every single day, he was like, there's 12 floors of people here. I don't know what they do.

I'm firing all of them today. We're going to get rid of all of them today. And like four months or five months later, he talks to his team. He's like, so those 12 floors of people, are you noticing that they actually were doing something that's not hurting us, that they're gone? And he's like, nope, didn't even notice that they were gone. And a natural money maker is very good at seeing nonsense and just cutting the fat and being totally unemotional and very rational about it. A lot of emotional people, I would say, I'm in that category, would say, but these people have jobs, we can't do this.

A natural money maker is far more rational. And he's like, well, the numbers show this, therefore we do that.

Shaan Puri (3:20)

So the guy I just did a podcast with, it's not out yet, Nick Kokonas, I feel like he's kind of like this. Do you know his story?

Sam Parr (3:28)

No.

Shaan Puri (3:29)

It's an unbelievable story. So this guy starts as a, he studies philosophy in college, but he likes math. And he decides, I want to be a trader, like a stock trader. So he gets offers from JPMorgan and whoever, bankers like that, like a good salary, good job, but not a trader. Trader basically runs their own book of business. You need to be a natural money maker if you're going to do that because you're basically high speed making decisions all day. And at the end of the day, he told me, he's like, you would basically walk away and you either won or lost a house. He's like, I'd win or lose like 300 grand in a day. And the emotions of that, imagine like, you go to work and you made 250,000 or you lost 250,000, you only got like 600,000 or a million bucks. You don't have that much to even work with. You're taking these huge swings every day. Why do I call him a natural money maker? Because he made tens of millions of dollars as a trader. His best year, his company made 100 million in profit off of one arbitrage that he found. And he basically figured out that ETFs were getting popular. And what's the ETF? It's basically you go buy, let's say, the SP500 ETF. Well, it's basically like owning all 500 stocks in some proportion and you go buy it. So what he realized was as ETFs were getting popular at the early days, the cost of the ETF, like let's say the 100 stocks that you were trying to buy, was not the same as if you actually go and find each of the 100 stocks of their current price in real time. There was a little spread, a little slippage. And so what did he do? He's like, oh, I can basically buy, like I can use options to buy like a future contract on those same stocks and I can with no risk make money every single time somebody buys this. But in order to do that, he had to like figure out how to run like cable fiber from the New York exchange to the Chicago exchange so that he could get the price quotes in real time. Whereas everybody else was like calling and they would like call a guy, tell him, hey, I want to buy this. Then he would write it down on a slip of paper. The guy with the slip of paper would run it over to the traders, be like, hey, I got a piece of paper for you. Then he would take the paper, yell it out, and then the trade would get made. And that like 30 seconds, he realized was an opportunity. So he sniffed that one out. Okay, what happens after that?