$250M Founder Reveals How The Rich Avoid Taxes (Legally) | ft. Ankur Nagpal
Tax Loopholes, Happiness, and the Indian Diet - January 17, 2024 (about 1 year ago) • 56:44
Transcript:
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Shaan Puri | Today, we're talking taxes. We're discussing taxes because they are my favorite subject. They became my favorite subject when I paid way too much in tax after selling my company. I was so happy and so sad at the same time.
Today's guest had the same problem. He sold Teachable for over $200,000,000 and then decided, "You know what? I'm going to go on a renegade mission to make sure that no entrepreneur pays more taxes than they need to."
We basically invited him here, and he was like, "You know, I could talk about my story, I could talk about my life." We were like, "No dude, talk about taxes."
Ankur, welcome to the show, man! It's a long time coming.
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Ankur Nagpal | I'm excited to be here. It's weird how I've now accumulated a lot of specific knowledge in this one kind of very narrow topic, and I'm excited to share it.
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Sam Parr | And the summary of your story, which we'll talk about a little bit later in the episode, is that you are a prodigy entrepreneur. You had a bunch of stuff going on.
You started in college with a company called Teachable, which you sold for $250 million when you were 31. That was a courses business.
Now you've got a new thing called Cary. It was originally called Ocho, and it's like a 401(k) or a self-directed 401(k) thing.
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Ankur Nagpal | Absolutely! The bigger vision is how do we help people build wealth by saving money on taxes. The Solo 401(k) is our first product.
But yeah, that's the story. The quick sort of other bit is I did not grow up in America, so I knew nothing about the U.S. financial system. The country I grew up in never had taxes; taxes were just not a thing that existed in Oman. | |
Shaan Puri | I grew up | |
Ankur Nagpal | So, the first time I heard about taxes was when I was 21 years old. I was like, "Wow, you actually have to give money that you earn? This is crazy!" But yeah, you got most of the story.
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Shaan Puri | by the way before we talk taxes I know we're supposed to just start with the taxes thing | |
Sam Parr | yeah | |
Shaan Puri | You have earned your seat on my first million. You made your first $1,000,000 when you were like 20 years old, right? With something pretty funny. Well, can you tell that story? Can you tell the fast version of that story?
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Ankur Nagpal | Yeah, absolutely! I was in college at Berkeley when Facebook released the Facebook platform. You could send gifts to people, answer quizzes, and all of that.
I built these viral Facebook applications starting from when I was 18 all the way to 20, and it was really fun. I mean, we created personality quizzes. You could answer a few questions and find out how good a kisser you are or which *Friends* character you're most like.
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Sam Parr | if if you have to take a facebook quiz to figure out if you're a good kisser you're probably a better kisser right | |
Sam Parr | well the | |
Ankur Nagpal | the funny I'm not I'm not gonna | |
Sam Parr | name names 1 of | |
Sam Parr | the facebook founders actually took | |
Sam Parr | that quiz multiple times and I know | |
Ankur Nagpal | that because you get | |
Shaan Puri | their facebook | |
Sam Parr | user id in the database so user | |
Ankur Nagpal | ID number... I'm not going to tell you which number it is. It was in our database, and we're like, "Wow, this person really wanted to know."
But anyway, yeah, we created these personality quizzes and then friend quizzes and stuff. We had millions of daily users and were able to make $1,000,000 before I turned 21, which is pretty cool.
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Shaan Puri | Yeah, that's amazing! So you've earned your street cred here for us on *My First Million*.
Alright, so let's talk taxes. If I'm an entrepreneur, what are the biggest things that I need to know about taxes? What are the things I should be knowledgeable of and doing in order to save money?
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Ankur Nagpal | Cool. The first thing I think everyone should know, even people who are not entrepreneurs yet, is that the U.S. tax code is rigged in favor of business owners. It's very intentional.
You can look at a country's tax code and learn a lot about what it stands for. In America, two things stand out:
1. The tax code is rigged in favor of people involved in real estate. It's the most tax-advantaged asset class.
2. People who start businesses.
So, the first thing I tell someone is, if you are a full-time W-2 employee somewhere and you are not yet a business owner, consider becoming a business owner. This is the single biggest thing you can do to optimize your taxes. That is just written into the DNA of this country.
It's something that I never realized until I started digging and was like, "Wow, there's the playbook for what you can do to pay less in taxes." It's ten times bigger if you are a business owner. | |
Shaan Puri | And so, it's rigged in favor of business owners and real estate. Most people kind of ignore this. I would say the advice I got growing up was, "You know, go to a good school so you can get a good job." That's what winning was.
Even the advice around money was kind of like, "You know, try to get a raise, maybe 10%. Try to save." But the hard part about saving is that your biggest expense is taxes. Your taxes might be 30% to 50%, depending on where you live and what bracket you're in. That's your biggest expense, and that's every single year off every dollar you make. Unless you're able to shield it with some of these things you're going to talk about.
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Ankur Nagpal | I think I... I don't know if you remember, but Warren Buffett back in the day had a famous quote where he's like, "My secretary pays a higher tax rate than I do." | |
Shaan Puri | yeah what an asshole well I think | |
Sam Parr | I think the issue, though, it's not an issue; it just is what it is. If you have W-2 income, I'm almost positive there's close to no way that you can reduce your tax liability, other than maybe like minor percentage points.
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Sam Parr | you know | |
Ankur Nagpal | You can do crazy stuff by using your spouse. You can have your spouse become a real estate professional, so then you as a couple can write off real estate depreciation. But you have to get pretty fancy to do things with W-2s. You're right, there is a universe of things; it's just much smaller.
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Sam Parr | And then, let's say I make $1,000,000 a year as a business owner. I actually don't know what the savings can be. I know with QSBS [Qualified Small Business Stock], I saved a huge sum, but I don't know what I could do to reduce my taxable income as a business owner. But I know it's a lot, whereas the W-2 [Wage and Tax Statement] it ain't.
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Shaan Puri | Well, let's tell the W-2 story real quick. I know people in San Francisco who have high-paying jobs at places like Facebook or Google.
They're marrying someone and saying, "Hey, guess what, honey? You're a real estate broker now." They're like, "What? I don't want to do real estate!"
But they're told, "You're a real estate professional now." It's like they have to get the status, and then they're buying Airbnbs in order to offset their W-2 income.
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Ankur Nagpal | We literally say that like tongue-in-cheek, right? We have a presentation on, "How do you lower your tax bill as a W-2 professional?"
Number 3 is: **Marry a real estate professional.** It's like tongue-in-cheek, but it actually is one of the very few things you can do as a W-2 professional.
However, I don't think anyone pays more in taxes than highly paid tech employees. In terms of tax bracket, that's about as bad as you can get. You know, two people in San Francisco making $400,000 a year together? Cool, you're paying half of it in taxes.
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Shaan Puri | Yeah, and it's taken out of your paycheck before you even get it.
Alright, so let's say we are entrepreneurs. Sam mentioned QSBS. I'm guessing that's going to be number one on your list because it's such a huge advantage.
Explain what it is, and then explain the beginner level and the advanced level version of doing it.
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Ankur Nagpal | Cool, so four big letters in the U.S.: **TAX**. This may be the single most generous tax break available today. It's called **QSBS**: Qualified Small Business Stock.
This is insane! When you look at all these tech companies being built and sold, the reality is most of them are going to have shareholders that pay very little in taxes. That's because of what's called **QSBS**, which roughly says if you hold shares in a C corporation for 5 years, you pay no taxes on up to **$10,000,000** in gains.
It applies to founders, it applies to employees, and it also applies to investors. It's such a generous tax rate.
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Sam Parr | getting the up to 10,000,000 or 10 times your basis whichever is greater. | |
Ankur Nagpal | It's a great opportunity. It's either $10,000,000 or 10 times what you pay for the shares as a founder. It's most likely going to be $10,000,000 since you buy your shares for almost nothing.
But this is massive. When I sold my company, I lived in New York State. In New York State, even New York State doesn't charge you taxes. So, I only had to pay New York City taxes on the first $10,000,000 in gains.
This is just by the size of the benefit; it's absurd, right? Because you think about W-2 employees getting taxed so heavily, and here you have startup founders, employees, and investors paying nothing on $10,000,000 when they sell the company.
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Sam Parr | sean I think california is the only state that doesn't recognize qsbs there's | |
Ankur Nagpal | Actually, there are 6 or 7 states. There are a couple that partially don't recognize it. 43 states don't. You'd pay no state taxes as well. | |
Sam Parr | Alright everyone, a quick break to tell you about HubSpot. This one's really easy for me to talk about because I'm going to show you a real-life example.
I've got this company called Hampton (joinhampton.com). It's a community for founders doing between $2,000,000 all the way up to $250,000,000 a year in revenue. One of the ways that we've grown is by creating these cool surveys. We have a lot of founders who have high net worth, and we'll ask them all types of questions that people typically are embarrassed to ask but that provide a lot of value.
So, things like how much the founders pay themselves each month, how much money they're spending each month, what their payroll looks like, and if they're optimistic about the next year in their business. All these questions that people are afraid to ask, but we ask them anyway, and they tell us in this anonymous survey.
What we do is create a landing page using HubSpot's landing page tool. It basically has a landing page that says, "Here are all the questions we asked. Give us your email if you want to access it." I shared this page on Twitter, and we were able to get thousands of people who gave us their email and told us they wanted this survey.
I could see where they came from—social media, Twitter, LinkedIn, basically everywhere else that they could possibly come from. I'm able to track all of that. Then, I'm able to see over the next handful of weeks how many of those people actually signed up and became members of Hampton. In other words, I can see how much revenue came from this survey and how much revenue came from each traffic source. The best part is, I can see how much revenue came from it.
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Ankur Nagpal | and a | |
Sam Parr | A lot of times, it takes a ton of work to make that happen. HubSpot made that super, super easy. If you're interested in doing this, you could check it out at HubSpot.com. The link's in the description, and I'll also put the link to the survey that I did so you can actually see the landing page and how it works and everything like that.
I'm just going to do that call to action then, and it's free! Check it out in the description.
Alright, now back to MFM. | |
Shaan Puri | If you're not paying any taxes on $10,000,000 in gains, you would normally otherwise pay long-term capital gains, which would be roughly 20%. Plus, there's like a 3.6% extra fee. So, it's like, you know, basically $2,300,000 is what you get net extra, correct? That's the actual amount in your pocket.
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Ankur Nagpal | in new york substantially more don't forget there's another 1,000,000 + in new york taxes that I'm not paying | |
Shaan Puri | Okay, cool. So, for California, you'll pay another 13% on top. If you're in one of the QSBS [Qualified Small Business Stock] free states, then you're saving another, let's say, $1,000,000 to $1,300,000 in additional state taxes. So, about $2.5 million to $3.5 million in your pocket.
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Sam Parr | Yep, or I've got a friend who had a company. It's... I won't say publicly, but Anker. You and I are very close friends. He had a company that was, I think, an S Corp. He converted it to a C Corp at a $30,000,000 valuation.
So eventually, when he sells it, it will be 10 times 30, so $300,000,000. That difference, which I can't do the math for, but $222,270,000,000 gain, that will be the tax-free portion.
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Ankur Nagpal | I was saving that for the advanced strategies, but yeah, there's a lot you can do to truly multiply this benefit.
So, I heard about the $10,000,000 thing and I was like, "Wow, this is insane! Really, really cool." But then I found out that the limit is per shareholder per company.
Where this gets interesting is if I give some shares to my mom, my brother, and my dad. Each of us now has our own $10,000,000 limit. So as a family, we have a $40,000,000 limit.
Or if you go down the estate planning rabbit hole, which is a little complicated, but at a certain point, you know, hire an attorney to figure it out. You can set up trusts. I set up trusts for my future children and trusts for charity. Each of these trusts gets their own $10,000,000 benefit, which theoretically multiplies this as many times as possible, firstly for me.
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Sam Parr | what happens if you what if you set up for 3 future kids and you only have 1 future kid | |
Ankur Nagpal | You can basically set up, like, the... so what I did, for instance, right? I have no kids. You can set it up for future beneficiaries as well. So, any of my future children are entitled to have the trust. What's important is it's an irrevocable gift; you can't take it back yourself. | |
Sam Parr | but when's if you don't have kids now | |
Ankur Nagpal | it has to go to either my parents my brother I've named a bunch of different beneficiaries | |
Sam Parr | so there's like a line if there's like a there's like a order order of unprovocations yeah | |
Sam Parr | yeah you can't you're like | |
Sam Parr | the only brown parents who are like oh ankur it's okay | |
Sam Parr | if you don't have children it's okay as long as you're happy as long as you're happy it's okay | |
Ankur Nagpal | I wish I wish honestly that would be it would be worth the $10,000,000 to not | |
Sam Parr | be harassed by my parents so | |
Shaan Puri | and so this is called like stackable trust right like | |
Ankur Nagpal | This is called QSBS stacking. A couple of things I didn't realize the first time around that I'm doing differently this time.
The first time around, I was the only person to hit the holding threshold because I didn't realize how this works. But this time around, I've given all my early team members shares instead of options so they can start their clock ticking.
That's a really important thing that a lot of people don't realize: you have to own the shares for 5 years, not options.
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Shaan Puri | The way that companies get around this, right, is you do the 83(b) election. You basically buy your shares at those super low prices.
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Sam Parr | mhmm | |
Sam Parr | We should explain how archaic the IRS is.
So, there's this thing called the **83(b)**, which I don't exactly know what it means, but it's basically this: whenever I start a company, I've got to write a check to myself for $100. I write it from Sanpar to the name of the company, Inc., and I have to mail it to the IRS.
I handwrite on it and include a letter that says, "This is Sam Parr. I'm writing you one check for $100." I'm literally writing this up by hand. I also request, "Will you please send this stamped envelope back to me that has proof that you received this?"
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Shaan Puri | it's literally like the tooth fairy dude | |
Ankur Nagpal | yeah it's like the tooth fairy and you write the I when you write the address | |
Sam Parr | and you just write like irs like | |
Sam Parr | I forget where it is it's california and by | |
Sam Parr | the way you have to do this 3 weeks I think or 90 days | |
Ankur Nagpal | 30 days | |
Sam Parr | 30 days... 30 days after you do this, they have to get it. So, right when you file the company, you've got to run to the convenience store to get your stamp and envelope. Hurry up and do this thing, and then you'll write this out. Somehow, this works.
What's even crazier is the IRS won't check in on you to make sure you did this right unless you get in trouble. You have to save this envelope like, "Gotcha, I got the envelope!"
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Sam Parr | I filed it away | |
Sam Parr | like it's crazy how this works | |
Ankur Nagpal | and if you don't do it you have to pay 1,000,000 of dollars in taxes like it's a very high | |
Sam Parr | of 1,000,000 | |
Ankur Nagpal | yeah it's a very high stakes document yeah | |
Sam Parr | It's a high-stakes document and you have to write it. I remember faking it, like, "I gotta make sure my '7' is perfectly clear." So that's not a...
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Sam Parr | t or an | |
Sam Parr | It's a very stressful thing, and you have to write it up by hand. It's crazy how archaic it is.
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Shaan Puri | I didn't understand this rule, but our CFO was like, "Hey, did you do your 83(b)?" I'm like, "No, no, it's pretty fine." She's like, "No, no, you have to do it within 30 days."
I was like, "Okay, well can you just, you know, where's the form? Can you send me the link?" She's like, "No, no, you have to print this out. You gotta go take it to the post office."
I was like, "Oh man." And she looked at me and said, "You don't do those types of things, do you?" I was like, "No, I don't run errands like that. I just simply don't. I'm out of the postal system. I don't mail things. I don't check my mail. I'm out of that whole system in general."
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Sam Parr | yeah you're like how many samples do | |
Sam Parr | I need like 50 40 I was like what part do I lick | |
Shaan Puri | And so I'm like licking the form, and then I finally have it. I realize I'm on day 37. For the next 5 years, it just haunted me. I was like, "I didn't do that goddamn form." Then, when my company finally basically failed, I was like, "It didn't matter."
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Sam Parr | I was | |
Shaan Puri | Like, it didn't come back to bite me because I had been dreading for 5 years that my lack of belief in doing things, like annoying paperwork, was going to bite me. I was so happy when that one entity failed and the other entity was the one that sold. I was like, "This is amazing!" | |
Sam Parr | but here's the crazier part is you can claim you did it in time right | |
Ankur Nagpal |
So, very technically, what the document means is it says, "I am choosing to be taxed on what the value is today. I'm choosing to be taxed upfront." But if not for signing this, anytime your company grows in valuation, you could theoretically be liable for taxes.
Can you imagine what a nightmare that is? Like, let's say you raise a Series A, a Series B, a Series C...
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Sam Parr | yeah you wouldn't not you wouldn't have money | |
Ankur Nagpal | you wouldn't have money but you'd have a tax bill it's like really really bad | |
Shaan Puri | So, there's a dark side to this. Sometimes, if you join a company later, like I think Bolt, which was pretty popular, this happened at Bolt. They said, "Hey, we are lending our employees money to buy their shares." | |
Ankur Nagpal | that was such a shit show | |
Shaan Puri | Had a valuation of like $5 billion or $10 billion, and they were like, "See, this is great because now they're going to start their clock of owning the shares." But people were like, "Okay, so what happens if the valuation goes down?" And they're like, "Now not only do my shares become worthless, I owe the money for those shares at that premium valuation." People were like, "This is not going to end well. The full story hasn't played out." You know, Bolt is still going, so it's unclear exactly what's going to happen with that. That's trending in... | |
Sam Parr | the direction like that was a bad idea | |
Ankur Nagpal | I think it's undoubtedly a bad idea. It was a 2021 valuation for like tens of billions of dollars. It's not good, and people saw it coming.
It's really bad when you... now, I'm hoping they forgive those loans because otherwise, not only are you making nothing in equity, but you also owe $80,000 to $100,000 just for working there.
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Shaan Puri | At our company, our investor was like, "Here's the promissory note. You don't have to come up with the cash, and we'll forgive this if this ever happens."
I was like, "Could you write that?" They were like, "No, we can't write that down. It's like, you know, you just have to trust us."
I was like, "Okay, I do trust you." And they did.
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Ankur Nagpal | if they if they were to write it down it's taxed to you as income so that's why they can't write it down right | |
Shaan Puri | Yeah, yeah, alright. I want to go to the counter opinions.
So we got friends who, you know, they're like, "Oh, the number one thing: get out of California, you schmuck! Come to Texas." No, no, no, forget Texas. You're still paying federal tax.
"Come to Puerto Rico." Oh God, think about that. Should I move to Puerto Rico to save money in taxes, according to Andre?
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Ankur Nagpal | So, to me, this gets to the meta level, right? Like, why do we have money? What is the purpose of money?
I think there are two camps of people. Camp one looks at their life as a vessel to make as much money as possible. The other camp views money as a tool to live the life they want.
I very firmly fit into the latter camp. Money enables me to live the life I want. Yes, I don't want to pay more in taxes than I have to, and you know, gamifying the tax system is also fun. Just because I'm a hustler, it's kind of fun to do.
But I want to live the life I want, and to me, that means living where I want. I would personally never, ever move somewhere just to save on taxes.
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Sam Parr | Well, you've done the exact opposite. You live currently in the highest tax place in America, I believe.
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Ankur Nagpal | Correct, and I'm totally fine with that because, again, money enables me to live the life I want.
I just tend to think... and it's ironic because, you know, I'm running a company that helps people save money on taxes. The kinds of people who spend all their life worrying about taxes are some of the unhappiest people I know. So, I don't ever want to get to that.
Sometimes, when you move to, like, a utopia with 0 taxes, you're surrounded by everyone else that moved there for that reason. That's your group. Your friends are other people who hate taxes, and I don't know if that's the social circle I want.
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Sam Parr | Dude, we had John Lee Dumas on the pod. Do you remember this, Sean? We were talking about taxes, and he was bragging about how he moved to Puerto Rico or something like that.
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Shaan Puri | dude he was glowing I thought he was pregnant I was like wow this guy is so happy he moved to puerto rico | |
Sam Parr | and he was so happy about it and he bay and then he started making fun of | |
Sam Parr | Me that I didn't live in Puerto Rico. Do you remember that? He was insulting me, and I was like, "John, we're not close enough that you can make fun of me that hard." It's a podcast.
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Shaan Puri | You know, I think that the thing is, a lot of people who listen to this podcast share one common goal. We've made different goals, but one we all share is that we want financial freedom.
Most people think financial freedom means, "Oh, I'm free to buy what I want, do what I want." It's the financial leather jacket; you're a financial badass now. Alright, cool.
But I think the real financial freedom is when money doesn't have a hold on you. It's not about being able to buy and do certain things; it's that money no longer dictates your decisions. Money does not control you or make you do things that you don't want to do.
So, it's more about freedom from money, not freedom to spend money. You had a point on this topic that I want you to explain, and it's really a direct attack at Sam. You said, "The point of having money is to not worry about money." If you are wealthy but still stressed about money, which I see all the time, you're missing the point.
Alright, Sam, look this man in the eye and Ankur, tell him why.
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Ankur Nagpal | It's so stressful. I don't blame him, whether it's him or anyone else, because these are beliefs we form very young in life. To some degree, they're not even fully conscious beliefs. So if they're not conscious beliefs, you try to sort of program it.
But yeah, I have so many super wealthy friends—friends with hundreds of millions of dollars—who are stressed about the pursuit of more money. They are 100 millionaires who want to be billionaires or something.
And again, like you said, it really is about the whole point of money: to be free from it and do what you want. To me, the best thing I bought with money was the ability to say no to a job that would have paid me tens of millions of dollars in equity because, guess what? I don't need it anymore.
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Sam Parr | Can I just say, Sean? So, look, let me just have myself. I came on here and expressed my belief about money and how I'm fearful of it. I wanted to make me happy, and it doesn't.
But you did Camp MFM. You told me about Joe Gebbia. Joe Gebbia is worth $10,000,000,000, and you told me this crazy story that blew my mind about how happy he is and everything like that.
So, I radically changed my opinion on money and happiness, and now I realize I just need $10,000,000,000.
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Sam Parr | To be happy, that's all I need: $10,000,000,000. So, like, my opinion has been changed. It's no longer about a scarcity mindset. If I have $10,000,000,000, I will be happy.
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Shaan Puri | There you go! I'm glad... I'm glad you're here. We go, you've been enlightened. Alright, Unger, give me a couple of other quick hot takes before...
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Sam Parr | we no | |
Sam Parr | you're gonna make fun of sean now which is there's no true alpha | |
Shaan Puri | Let's frame it. You said there's no true alpha in investing. I realize that's sort of a fool's game. That's why instead, I realized I can optimize my tax setup and make more money that way than try to beat the market. As a guy who has been attempting to beat the market for quite some time now, well, successfully.
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Ankur Nagpal | how's that been going | |
Sam Parr | Yeah, wait... answer the question. What are the wins and what are the losses? And we're not talking about private; we're talking about, have you been trying... did you try to beat the market in terms of public too?
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Ankur Nagpal | he looks kinda sheepish he looks kinda sheepish he's he's just like yeah | |
Shaan Puri | are you trying to make me cry what's happening here | |
Sam Parr | No, no, no. I don't know. I actually don't know if you pick and choose stocks. I know you pick and choose private companies, but that was like your job. | |
Shaan Puri | I agree that most people cannot beat the market. However, I do not agree that nobody can beat the market over a certain period of time. I know that this is an unpopular opinion, and I am aware of the famous Warren Buffett bet. I know all those things, but I just refuse to believe that it's not a bell curve.
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Ankur Nagpal | I think the people that beat the market spend all their lives doing that with their own capital. Right? Like, think about Jim Simons. This hedge fund has returned like 40% on average. They're not taking outside capital.
What I think is a little bit of a scam is a lot of the financial services industry that tries to promise you outsized returns.
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Sam Parr | so | |
Sam Parr | Promises that... like, what's that stereotype about hedge funds? Because I’ve never met a financial adviser that would be dumb enough to promise that.
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Ankur Nagpal | Any actively managed fund, right? So yes, hedge funds are a big, big sort of thing. Any active stock-picking fund—I mean, there are a lot of stock-picking funds that charge you 1 to 2% a year, and their portfolio claims it will outperform or whatever.
So does every real estate fund, venture fund—basically anything that charges outsized fees, anything that charges more than a Vanguard fund.
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Sam Parr | that's crazy that that people like buy into that though | |
Ankur Nagpal | Correct. So, our thesis is always like, "Okay, fine. I do think a better tax strategy can actually create alpha." Alpha is a finance term for outperforming the market. Using that tax alpha to put more dollars in the market, I think, is a smarter approach. It's the approach I like and the one I'm taking with my money as well. | |
Shaan Puri | out of a 100% of your net worth is 100% of it in the s and p index | |
Ankur Nagpal | Or absolutely not. I have a lot of it, not in the S&P index, but that's my fun money. I think there's a good chance I don't outperform. A lot of it is in private investing, which are funds that I own.
I think I'm the only person I know who has a fund as big as mine and charges no management fees. The average venture fund charges 20 to 25% just in management fees, and the average person does not realize that we charge 0%.
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Sam Parr | sean do you know how I tell tell you that I don't buy individual stocks | |
Shaan Puri | yeah | |
Sam Parr | I really looked at my portfolio the other day. It was the first time in a year that I looked at it, and I realized I was wrong. I've done it twice or three times. The company that I did it on was Playboy.
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Sam Parr | I had read I read their annual report yeah | |
Shaan Puri | You can't just call their magazine their annual report. Dude, that's called their monthly calendar.
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Sam Parr | but yeah actually their annual report they have a lot | |
Sam Parr | of photos yeah and | |
Sam Parr | oh jenny old jenny mccarthy picture holding up the balance sheet | |
Sam Parr | That's nice. I did that because I was like, "Oh, well, their real estate asset is worth more than what they're trying to sell the company for." I was like, "That's smart, I'll do that." Did not win on that one, so I lost on that one. I also did Coinbase at the IPO.
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Sam Parr | oh god | |
Sam Parr | And then I sold it two weeks before it popped, like three months ago or whenever it was, at 400%. So I've done... I've done two... no.
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Shaan Puri | You've also done it with HubSpot. You got HubSpot stock; you could have sold it and diversified, but you decided to hold. That is a decision to buy.
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Sam Parr | that's correct I and and with airbnb yeah correct | |
Shaan Puri | the 2 biggest holdings in your portfolio correct so you do it too we all do it | |
Sam Parr | Those aren't my two biggest holdings. My index funds are significantly larger. But yeah, I have done it as well.
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Shaan Puri | So, I like you, Ankur. I have my fund money thing. It's just that I happen to have a fund money stash that's 80% instead of 20%. Yeah.
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Ankur Nagpal | I mean, look, at the end of the day, as long as we realize what we're doing, it's fine, right? I think we all have to learn this lesson ourselves.
In 2021, I thought I was a damn genius. I was like, "These index funds are stupid. My portfolio is up like 300%. I should just be a stock picker for life."
And then, you come back to reality and didn't realize...
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Sam Parr | What was the... was there a day where you're like, "That's just the way"?
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Ankur Nagpal | It was many because, again, if you remember, there was such an insane run-up for a while. You couldn't lose. Every company was up 100% day on day. It was when investing was the most fun. It should not be that fun.
Then, yeah, there were numerous days of, "Cool, I've lost $300,000 today. Cool, down half a million dollars today." Just that happening repeatedly while the S&P 500 kind of just kept chipping away and growing.
And, you know, NVIDIA comes out of nowhere and all these stocks that I only held because I had an index fund. Otherwise, I had no exposure.
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Sam Parr | Sean, let me and Ankur tell you this crazy story about tax stuff that I learned. This is like one of those tax hacks. I'm not the biggest fan of tax hacks.
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Sam Parr | but | |
Shaan Puri | this | |
Sam Parr | Is actually a good one. I met this lady; she was speaking at one of our events. I don't want to say her name or her company, but she was on the commercial for this credit card company because she loved the credit card so much. Her business was doing, let's say, $50,000,000 a year, and she was putting a lot of it on a credit card. It was giving her $300,000 a year in either points or cash back.
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Ankur Nagpal | mhmm | |
Sam Parr | According to the IRS, a cash back from a credit card is considered a rebate, correct? I believe you can get up to... I don't remember what it is now, but three years ago when she told me this, she said it was $300,000 a year in rebates. Do you know what it is nowadays? Is it the same?
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Ankur Nagpal | something like that depends on the card itself but yeah | |
Sam Parr | Oh, I thought it was by the government. I thought it was limited to the government. It must have been limited to the credit card. She was getting $300,000 a year in cash back, of which she was like, "That's my salary." I don't take a salary, or I take a very unmeaningful salary for my company, and I'm living off my credit card points. That was pretty wild.
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Ankur Nagpal | Did you know you could actually pay your taxes on a credit card? For some people, you could actually arbitrage that. Again, this is insane; I would never do it, but I just found it interesting. You can pay your taxes on a credit card, and there's not a very high extra fee. In a lot of cases, you can actually end up slightly better off. It's a very painful thing to do, and you can't do it.
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Sam Parr | David Hauser did it. David Hauser sold his company, Grasshopper, I think for $200,000,000. He paid his taxes on his Amex and he called Amex to tell them what he was going to do.
I don't remember what the bill is, but let's say it was a $20,000,000 or $30,000,000 tax bill. He paid that on his Amex and he goes, "Yeah, I've got just a couple decades' worth of flights."
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Ankur Nagpal | that's hilarious | |
Shaan Puri | that's insane | |
Ankur Nagpal | That's the other thing with credit card points. Once you learn how to use them for travel, the cashback feels less good. Yes, the cashback has a theoretical value, but there's so much more value applied to travel once you kind of learn how the game works.
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Shaan Puri | what's the smart way to do it okay | |
Ankur Nagpal | So, the thing you always want to avoid is to never spend the points on your credit card website. That is the thing almost everyone does, and you lose a ton of value there.
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Sam Parr | I do that | |
Ankur Nagpal | Yeah, so what you want to do instead is create an account with an airline. I do it with Emirates a lot because I fly internationally, or with Air France/KLM. The international airlines are the best.
Look up a flight on their loyalty program, do the transfer. It takes like 30 seconds, and you'll probably save 70% of points right there.
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Sam Parr | no way 70% | |
Ankur Nagpal | yeah I've I've tested this a lot because what these airlines | |
Shaan Puri | Do it. It says "Transfer" like there's a tiny link that says "Transfer Partners." That's where you send your points. You never spend it in the thing. It's going to save you.
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Sam Parr | So many points! Yeah, I've spent **$100,000** on flights over the past 10 years through my Chase Preferred card.
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Ankur Nagpal | I found this out 2 years ago it's life changing yeah absolutely what | |
Sam Parr | you got | |
Shaan Puri | you got hosed bro that it's so bad to do it | |
Sam Parr | wait you knew that sean | |
Shaan Puri | Yeah, I paid for this guy, Mo Points. He's like this guy who'll call you and teach you about credit card points. He'll just be like, "What's your situation? Here's what your credit card setup should be, and here's how to use it."
So he showed it to me, and I was like, "Wow, that was like the best $300 I've ever spent." Because that one session, which I thought was a lot for a call, really changed my perspective. The savings and just understanding how to book flights better were incredible.
He's like, "This is luxury travel. You want to travel first class all around the world? Here's what you need to do." For me, I have an e-commerce business, so we're spending $1,000,000 a year on ads. He said, "You need this Amex Gold because it gives you 4x on every dollar you spend on Facebook or Google."
So you're getting 4x multipliers. He also mentioned that you have to transfer it out and use this website, like Points Me or whatever, to be able to search for points across all the airlines. | |
Ankur Nagpal | Yeah, I think just transferring out is the 80/20. If you want to tell someone in one sentence how to do better, transfer your points out.
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Sam Parr | do you have any more of those little little tricks | |
Sam Parr | what else you got in your hat | |
Sam Parr | come on magician pull something else up that'd be awesome | |
Shaan Puri | solo 4 1 k so that's the one that you have on here that I don't know anything about what is a solo 4 1 k | |
Ankur Nagpal | So, a Solo 401(k)... this is the first product we built. I had an LLC for a while, and I was earning some random money. I found this account called a Solo 401(k), which is like your corporate 401(k) but exists exclusively for you.
With that, you can do a really cool thing.
1. You can put in up to **$69,000** a year. Typically, if you max out your corporate account, it's very hard to hit the max because your company match is not enough. But with the Solo 401(k), you can put in **$69,000** a year and get that as a tax deduction.
2. The second thing is you can do the whole thing as a Roth contribution. If you read about Peter Thiel and how he grew his **$1,000,000,000** Roth IRA, traditionally, with the Roth IRA, you can only put in **$7,000**. Can you...?
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Shaan Puri | just tell the peter thiel story real quick how did he use a roth ira to make billions | |
Ankur Nagpal | Oh man, this was both genius and kind of possibly illegal. What he did is he bought his founder shares at PayPal with his Roth IRA. He spent like $2,000 to buy PayPal shares that became worth $27,000,000 when PayPal sold. Then he had $27,000,000 to just make all kinds of investments.
He allegedly bought his Facebook shares—10% of Facebook—from his Roth IRA. So, he is going to turn 59 and a half in a year, and he's going to have $5,000,000,000 tax-free, which is pretty wild.
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Shaan Puri | the wildest part about that what you just said is that peter thiel only made $27,000,000 selling paypal | |
Ankur Nagpal | yeah yeah I I do realize that | |
Shaan Puri | Me and Peter Thiel are sort of... we're sort of, you know, apples and apples, I guess. Yeah, you know, I have, right Sam? Like, the hustle and PayPal netted the founders very similar amounts of money. That's kind of amazing.
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Ankur Nagpal | Well, what we don't know is if Peter Thiel had other shares not in his Roth IRA, which is quite possible actually.
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Shaan Puri | ah damn dude's too good to put you | |
Ankur Nagpal | what's his take again | |
Shaan Puri | probably not he's gonna have to show that to me for me to change my opinion | |
Sam Parr | yeah yeah yeah yeah I'm not gonna let facts get in | |
Sam Parr | The way of me, Peter Thiel. Yeah, what about, can a person have more than one 401(k)?
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Ankur Nagpal |
Yeah, so that's what's cool: if you have a full-time job and a side hustle, you can have a Solo 401(k) for your business while still contributing to your employer's 401(k). But because it's your own 401(k), you can invest it in anything.
Your employer's 401(k) has like a list of very specific assets, but with a Solo 401(k), you can invest it however you want. If you need liquidity, you can borrow up to $50,000 from it. It's simply the most powerful retirement account in America, but it's not available unless you have your own business.
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Shaan Puri | Isn't the normal 401(k) kind of a racket? Like, the thing where they're like, "You can only buy these funds using our 401(k)." Is that because they...? | |
Sam Parr | get a tax | |
Ankur Nagpal |
No, it comes from the 401(k) provider. The long answer is corporate 401(k) plans are subject to ERISA laws (Employee Retirement Income Security Act), and those acts are just there to protect employees. But as a result, employers can't do things that help them. Like, there are limits on how much you can contribute to yourself if your employees are part of the same plan, limits to investments. But if there's no employees... go crazy.
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Shaan Puri | So, the Solo 401(k)... you could put that in. Could you like put in real estate? Could you put in anything? Is it like absolutely?
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Ankur Nagpal |
Yeah, the only thing you can't do, which is where the whole Peter Thiel thing may be slightly illegal, is you can't have a self-dealing transaction. So I can't invest in my startup. I can invest in Sam's startup, that's totally fine, but I can't invest in my own company. I can invest in my house, but I can do commercial real estate. Gotcha.
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Shaan Puri | okay | |
Sam Parr | let's not self dealing for him is it if you that's just a a a major angel investment | |
Ankur Nagpal | He was the founder too, which is why it's sketchy. He was the founder of PayPal. Remember, if he was just an angel investor, it's fine.
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Sam Parr | I was a founder of those | |
Shaan Puri | Too much... He might, you know, we might be an accident for Ankur. Let me say, if you keep talking like this out loud, he's got $5,000,000,000 riding on nobody paying too much attention to this.
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Ankur Nagpal | Yeah, I mean, look. People ask us all the time, "Can I do what Peter Thiel did?" I was like, "Look, it may be fine if you don't own over 50%." I wouldn't, because again, the thing with the IRS is that a lot of these things are not clear rules. There are rules written a certain way, someone interprets them somehow, the IRS challenges it, and sometimes the IRS loses in court. That's how loopholes are established, right?
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Sam Parr | So, like, the problem that I have with my personal bookkeepers or accountants, my CPA, is that they're pretty reactionary. It's like at the end of the year, we are dealing with the problems, and then everyone makes the same statement where they say, "Next year, I'm doing this right." But they say, "I'll worry about it in like 2 or 3 months," and then 2 or 3 months becomes way later. And that's... | |
Shaan Puri | The real New Year's resolution, to be honest, is the three weeks after you file your taxes. That's the real New Year's resolution.
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Ankur Nagpal | To be honest, candidly, that's the problem we're having. Right now, we're realizing we have to educate the CPAs a lot. Almost everyone that comes to us—this is a biased sample—does not like their CPA. We don't do that yet, right? Like, maybe there's a world where we'll... | |
Sam Parr | Do it! But who do you have? Do you hire a tax strategist who is more offensive? Do they work in tandem with your CPA? What do you do?
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Ankur Nagpal | So for me personally, once I've gone down this rabbit hole, we're doing this internally. We have a program where we help people with the tax strategy part. We don't do tax filings. I'm basically using our own services. But yeah, there's a big part that's tax strategy that is not the person signing off on your tax return. | |
Shaan Puri | should they be separate | |
Ankur Nagpal | The way the world is structured today, the laws and regulations are such that the person filing your taxes typically doesn't engage in much strategy. It's sort of just... why?
Even if, let's say, you want to set up a trust, you need an estate attorney who is different from your financial adviser, who is different from your accountant. To the average person, you're like, "Why can't one person do this?"
Those are the kinds of things worth thinking a lot about. How do we productize this in some way, shape, or form while still being compliant? Because compliance is a big, big part of anytime you try to build these kinds of businesses.
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Shaan Puri | so I was so you know stressed out last tax season you know that I was like okay how how am I gonna do things differently this year so I I was like I'm gonna treat this like it's it's it's my own business it's its own product it's its own company I'm starting and so I was like I'm gonna go on a roadshow and I'm gonna go and basically see who's out there you know go give me your best pitch and I created a data room I was like this is my tax setup and I put all the time in here here's a flowchart here's my prior year's returns here's what here's what I pay the taxes here's what my expectation is for next year I was like here's a turnkey data room so I don't even have to have a phone call with you I'm like I have the phone call and I on the phone call I tell them exactly what I want because for some reason I would like go to these tax people and I think it's an insecurity it's like because I don't know as much about taxes as you I kinda defer everything and I almost become like I work for you and then I'm like I splashed water on my face I'm like woah woah woah no no I'm paying you hold on wait this is backwards yeah you work for me I forgot yeah why am I pretending like I I I have to tiptoe around even asking you for what I want and so I go in and I'm like I felt this way I never wanna feel this way again I want somebody who's gonna take care of everything you know everything from I want you to literally I want you to be able to pay bills if I need you to up to filing my my returns for all of these you know I got 12 entities all 12 entities and I need you to do strategy and I need you to be coming to me every you know every quarter with proactive suggestions about what I should be doing that's what I want who can provide me that and I went on tour basically and it's such a better way than I was doing before I highly recommend this for anybody who's like has enough income and kind of business value where that makes sense to do which I don't know what that number is probably different for a lot of people it wouldn't have made sense sense for me 3 years ago to do that it's like whatever you're paying you know a couple 100 k in taxes or you know even a $1,000,000 in taxes probably not worth that much effort to go do but as you scale I think it's important to do that I'm realizing now | |
Ankur Nagpal | Yep, and I also think it has to be a collaboration. It's very hard. A lot of people are like, "Oh, if I had a tax guide, they would solve all my issues." But a lot of the best strategies are long-term.
For example, let's say you want to start a business to get acquired five years later. That's the kind of stuff that you need a partnership to be discussing. You should have someone you're working with, at least quarterly, right?
There's a lot of this stuff that, the more you know, the more you'll push them, and the better things you'll achieve.
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Sam Parr | I'm actually going to do that data room thing. That's the second thing you've said in the last few months that is going to have a change in my life. That's really smart.
The first thing, bro, we talk twice a week.
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Shaan Puri | on this podcast that's the second thing in months that was good | |
Sam Parr | yeah yeah | |
Sam Parr | Well, a lot of the stuff you say, I'm either already doing that, or I don't want to do that, or I'm not sure if you're right, or that's only okay. But you said that the data room big is actually a really wise way to look at it.
The other thing you said hit me; I was like, "That's brilliant." It was when you were selling one of your houses in San Francisco. You said, "I forget what real estate agents make, 6%," but you're like, "But 6% is per..." The difference between $2,000,000 and $2,200,000 is like 6%. That isn't meaningful for the realtor, but it's really meaningful for me as the owner. That's a six-figure difference.
So, I'll just give my real estate agent a call and tell them, "Hey, if you get anything above my asking price of $2.1 million, which is my happy number, but if you get anything above that, like $2.2 million, I'll actually give you like 30% of the fee."
I'm selling a piece of property now, and that's what I told my agent. I just, right after the podcast, I went and called them right away. I said, "Hey, how about this?"
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Shaan Puri | Yeah, I didn't do 30%. That's crazy! But I did more. I did more than the 6%, so you messed that one up a little bit, but that's okay.
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Sam Parr | well but but but the thing is is like even I I don't remember what you I think | |
Ankur Nagpal | you said like dollar right each additional dollar past that is like yeah | |
Sam Parr | you said like 10% I think you even said like you would buy this person a burka bag you said something like crazy I had | |
Shaan Puri | A negative incentive too? No, no, I said, "If you don't get me the price that you promised when you won this listing, there has to be some incentive or disincentive if you don't live up to your word."
What real estate agents do is, on the way in, they will tell you, "Oh, this will be great! I've done such similar sales. I think we can get you..." They ask, "What price do you think?" and you say, "Oh yeah, I think we can get you that price."
Then, two weeks later, they're like, "Oh, just the market is so... you know, right now, the thing is blah blah blah." Then they're just nagging you, trying to reduce your expectations so that when an offer comes in, you'll take it, whatever it is, because they just want to turn the deal over.
Yep, right? Because they're getting 3% on $2,000,000. They don't really care if it's $2,050,000 or $2,000,000. They'd rather just get the deal done.
So, I knew that they do that nagging. Upfront, when he was promising me the world, I said, "Alright, cool, but if you don't do it, you gotta buy my wife this bag." He was laughing, and I let it sit there for a second. He was like, "Okay, oh, you're for real?" I was like, "Yeah." He said, "Okay, deal."
Then, literally, when we were coming to do the deal, he said, "I really don't want to buy your wife's bag. Let me go back to them and see if I can get more." He got an extra $30,000 after that last comment, so I appreciate it.
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Sam Parr | The reason why it broke my frame was because, as a realtor, you think, "Well, for some reason, this is just the law," or "There is no negotiating; this is how it's always been done, and I must do it this way."
When I was thinking about it, I realized that the way he actually said it was 100% better. I didn't realize that I could question them.
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Shaan Puri | right do you | |
Sam Parr | You know what I mean? And there's actually, like, what's crazy is there are people who do that with the IRS as well.
For example, Sean Parker, I believe, is the guy who either created or was important in helping create opportunity zones in real estate.
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Shaan Puri | yep | |
Sam Parr | And like, I remember reading about opportunity zones and I'd be like, "Oh, Sean Parker created it." I'm like, "Wait, what?"
I guess the story is that he was young, still in his twenties, and he convinced the government that it was wise to invest in opportunity zones. These are real estate areas that are impoverished or that we want to improve.
I'm like, how ballsy of that kid to go and convince the IRS or the government that this is the right move! I love stories like that, and that was a wild story.
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Shaan Puri | let's do a couple more before we before we finish so you said owning real estate with your business what's this one | |
Ankur Nagpal | Yeah, so another great example, right? Sam said, "Okay, what if I have $1,000,000 in business profits? What can I do to lower my tax bill?"
Just buying your office building, or if you have a physical building connected to anything you're doing—whether it's your office or a retail location—if you own that real estate, you can use depreciation to offset 20-30% of the purchase price as a business loss that year.
This is why you'll see a lot of old-school businesses actually own their properties; they're not just renting since you save so much money. People take advantage of this. You can also do this with cars. If you buy a vehicle attached to your business, you have the whole insanity where you can actually depreciate more of the purchase price if your car weighs over 6,000 pounds, which is insane. This is why you have the whole "G Wagon tax write-off" meme.
But yeah, owning real estate through businesses is massive.
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Sam Parr | That's like the classic immigrant story. A mom and pop came here from Vietnam, and then they eventually bought their corner store building. The building becomes worth significantly more than the corner store. | |
Shaan Puri | and then they bought their g wagon | |
Sam Parr | and the g wagon | |
Ankur Nagpal | Yeah, it's like, again, business owners were already very favored, as were real estate developers. But when Trump was in office, he actually took it to the next level with the Tax Cuts and Jobs Act that basically doubled those benefits.
It gave an extra benefit to business owners where they get to deduct 20% of their income, called the Qualified Business Income Deduction. It also allowed real estate developers—and your boy Nick Hubert talks about this all the time—to do what's called bonus depreciation and depreciate 20 to 30% of the purchase price upfront.
So even though the code is already written this way, there are always new incentives to further make it even better for business owners and real estate developers. | |
Shaan Puri | Let's do some of these other things. You had a good point on happiness, and I want to read it to you. Basically, you were saying, "Happiness, it's not that complicated." What are the four things that actually matter when it comes to happiness?
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Ankur Nagpal | Yeah, I mean, look, after I sold my company, I spent two years traveling and chilling. You know, I was like, "Wow, we spend all our lives waiting to retire. What if I just live the retired life now?"
A lot of it was like, "Okay, fine, what are my happiness triggers?" I found that for me, it was very, very simple. The 22 critical things for my environment included plenty of time outdoors, ideally with sunlight, and constant movement.
Like, Sam didn't believe me when I told him I walked 20,000 steps a day. I had to produce receipts.
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Sam Parr | doing work that's an insane amount | |
Ankur Nagpal | that is an insane amount three and a half years it's just it's just what keeps me keeps me going | |
Sam Parr | my my trailing 90 days because we had the baby was 31100 steps a day | |
Ankur Nagpal | yeah that to me that's misery like I I just need to I need to be in motion | |
Shaan Puri | What do you do to get those 20,000 steps? Did you replace meetings with walking meetings or something? What did you do in your office?
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Ankur Nagpal | Meetings and phone calls are a big part of my routine. I also play sports every day, though again, it's winter here, and that's why I hate winter. I'm not getting my outdoor time, and my walking has come down a lot.
But yeah, so happiness triggers movement. Being able to spend time outdoors and having a higher purpose is important for me. For me, that purpose is work with meaning. For other people, it might be religion or something that is bigger than themselves.
The fourth component is relationships that count. I can simplify my life to these four components and like reprint. That's all it takes for at least me to just be very, very happy. | |
Sam Parr | are you dating anyone | |
Ankur Nagpal | not right now | |
Sam Parr | you probably crush it though in that department right | |
Ankur Nagpal | Yeah, look, I mean, again, I enjoy being single. But at the same time, look, I'm 34 years old and the parental pressure is ramping up. We'll see how it goes. | |
Shaan Puri | you're like I can defeat the irs but not not the parental pressure yeah | |
Ankur Nagpal | how old were you sam when you when you and sarah got together | |
Sam Parr | she was 22 and I was 25 | |
Shaan Puri | oh damn you're young | |
Sam Parr | it | |
Sam Parr | I didn't feel that way because I went pretty crazy between like 19 and 24. I did some fun things.
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Ankur Nagpal | Yeah, I've actually drank a beer with you. There are not a lot of people at this chapter of your life that have done that, but yeah. | |
Sam Parr | yeah that's true | |
Shaan Puri | yeah | |
Sam Parr | That's true, and I had a lot of fun. I did this cross-country motorcycle trip after I just sold the company. I didn't sell for a lot of money; I had like $50,000 in my bank account. But I was 23, riding my motorcycle cross-country, telling people I just sold my company on Tinder.
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Ankur Nagpal | was this apartment list or whatever | |
Sam Parr | Yeah, yeah, yeah, it was two apartments listed. I just hosted a conference, so I had money. I was the coolest guy ever for like eight weeks, and then I met my wife right when I got home. | |
Shaan Puri | yeah | |
Sam Parr | But yeah, we've been together for a while. It's honestly awesome. I don't even like talking about this because I remember when we got married, we had to go and talk to a priest since we got married in a Catholic church. I was telling her, I was telling the priest, "Yeah, you know, we're a good partnership. We talk about business and stuff all the time."
He's like, "Well, what about love?"
So, I don't even like mentioning this, but yeah, basically dating someone who is smart and you eventually want to marry actually makes you more money. That's not the most important thing, but I think what I've learned is that having a good relationship was actually the greatest financial decision I made.
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Ankur Nagpal | I mean, you're not... you're probably less distracted, right? Like, people in relationships are, like, eventually more stable.
I remember when I was selling my business. I was negotiating with the dude who runs General Atlantic, a big private equity fund. He's an old school guy. He asked, "Are you married?" I said, "No, no kids." He replied, "I don't like that. I can't trust single people. You have nothing to lose. I would feel much better about this if you were married and had a family because you're scared or you'd be more nervous, more scared of stuff."
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Shaan Puri | You're like, "For $250,000,000, I can get a 30-day fiancé right now, sir. What do you need?" | |
Ankur Nagpal | yeah so | |
Sam Parr | Sean, when your wife goes out of town, are you like me where you're like, "What the hell am I supposed to do? What do I do?" | |
Shaan Puri | It's 3 hours of heaven, but anything beyond 3 hours, I'm like, "This is boring." This sucks! It's so quiet in here. I started walking around in circles like my dog or something. I don't know what to do.
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Sam Parr | I wanna talk about one more thing we have a large indian listenership | |
Shaan Puri | you're welcome | |
Sam Parr | Yeah, thank you, Sean. I feel like everyone in my life, all my best friends, are Indian. You're going on a tear on social media saying, particularly, you're like, "You know, East Asian people, we've got the stereotype of us not having a lot of muscle." In reality, it's just because we eat like shit. Or what did you say?
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Ankur Nagpal | The Indian diet is, by default, not great for building strength or staying in shape. Things are really bad right now, especially for an Indian person living in North America. We have the same exact upbringing, yet we are anywhere between 4 to 6 times more likely to have heart disease or diabetes. It's just really bad.
Now that I have more of a voice on social media and people are listening, I feel like it's something worth talking about. I don't know, if I could have some impact over the next 10, 20, or 30 years to change that, it would go a long way.
But the hardest part is this cultural deniability. Indian people get really mad when you tell them that the Indian diet is traditionally unhealthy. Even now, if you try tweeting out that the Indian diet is unhealthy, you'll get all these people in India getting super, super angry about it.
But ask anyone who's ever... I don't know, do you ever count macros, Sam or Sean?
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Sam Parr | yeah I I I use myfitnesspal every day for like the past 4 years | |
Ankur Nagpal | Okay, cool. So, there's not one person who's ever counted macros who will fight the Indian diet as healthy. Like, not one. It's impossible. It is actually impossible if you track it to see it.
Yet, it produces this passionate response. I mean, I ended up commenting on an Indian cricketer's physique, and an Indian newspaper, the Hindustan Times, ran this article about me saying "Indian American entrepreneur fat shames cricketer."
I had to turn off my Instagram because I got hundreds of thousands of comments attacking me, my family, and everything I stood for because I'm not being, you know, a proud Indian or whatever.
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Shaan Puri | That's hilarious, man! I went to an Indian grocer. Sam, you probably don't know this, but there are actually just Indian grocery shops. We have our own separate secret.
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Sam Parr | I go to them | |
Shaan Puri | Okay, so most of them don't really realize this, but if you walk in, every single aisle literally has the shittiest food that you could possibly eat. I went in there and I was like Jim Carrey in *The Truman Show* when he's like, "Wait, this guy is actually like a wall. What is this? What's happening in here?"
Yeah, and I was literally running down the aisle like, "What's happening in here? This is fried! It's all fried! Why is everything fried? Literally not one thing!"
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Ankur Nagpal | and and no protein right it's like fried and | |
Shaan Puri | There's no protein. It's literally fried carbohydrates with some fat, and that's everything. You just see the moms putting things in there for their kids. I'm like, "Don't do this shit, man. This is so bad. It's literally so bad."
To the point where I was like, should someone create a better-for-you Indian food that goes into the Indian grocer? So that you're the only SKU in the store that is not like deep-fried terrible everything, or, you know, just canned gulab jamun or something. It's like this terrible, terrible food.
And that's not even like the home food; that's like the grocery store. Right? So if you're in, that's like garbage in, garbage out. It's like if your inputs are all terrible, then the outputs are also going to be terrible.
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Sam Parr | why they just don't care is it not part of the is it not part of the culture | |
Ankur Nagpal | Protein is just not really deeply embedded in Indian food. It is present in small parts, but it's just not a big deal. This issue is compounded when you live in America.
Well, I think about it this way, right? I joked about this, but I think the spelling bee is the only time I see Indian people on ESPN. Obviously, that's an exaggeration.
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Shaan Puri | that's the ultimate burn dude that's so good | |
Ankur Nagpal | Yeah, I mean, look, but I, as an Asian person, can say it. Obviously, you can say it, Sam, you get canceled. But yeah, it's really not good.
What I think is optimistic is that my generation is becoming more aware of this. We're seeing a lot of South Asian people changing. Right? They're always like, even Balaji was on a podcast, and he's like, "Oh yeah, I did as well as I could for my South Asian genetics."
I actually feel that's kind of bullshit. I think South Asian genetics are honestly not bad at all for people who work out and eat clean and whatever. I mean, all the Indian friends I have that have put in the effort have seen results. But the whole stereotype, I think, starts because of the diet.
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Sam Parr | I've been on an Indian food kick lately, and it's been all about coconut milk. So, I've just not been using that or coconut. It's just all creamy stuff. It tastes so good going in, but it does not feel wonderful afterward. | |
Shaan Puri | indian parents when they feed you because I'll I'll be like mom why did you give us this | |
Sam Parr | and | |
Shaan Puri | She's like, "This is good for you." I'm like, "Why is this good for you?" And she'd be like, "It gives you energy."
I think they literally took the idea of calories as a measure of energy. It's like, yeah, they were like, "This carbohydrate is going to give you so much energy." I'm like, "No, that's not how it works."
Then, even though they say, "Oh, dal has tons of protein," it's like, you know, lentils basically. It's like, yeah, but it has, you know, the macros on dal are like 20 grams of protein and 35 grams of carbs.
Then you add butter, ghee, and oil to the thing to make it taste good. It's like, well, that's not really going to help then, right?
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Ankur Nagpal | And dal is your protein in the rest of your meal, right? So you have all this other stuff, and you're like, "Oh, for protein, I'll have dal." That's a great example.
Yeah, like Indian people will... The Indian Express actually ran an article saying, "Yep, we thought dal had a lot of protein too." The awareness is increasing now, but it's pretty slow.
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Sam Parr | I went to a... what’s it called? Is it a Holi or Holi celebration? It was naan with ghee, is it ghee? So like that clear butter, and then tons of buttered chicken. But instead of chicken, it was cheese.
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Ankur Nagpal | oh god | |
Sam Parr | and then | |
Sam Parr | it was like a and | |
Sam Parr | then it was like the dessert was fried dough in maple syrup what do you | |
Sam Parr | guys call that clob job | |
Ankur Nagpal | but it's delicious by the way it's delicious so like don't yeah | |
Sam Parr | it's yeah yeah it's good for you | |
Sam Parr | Because it made me smile, and smiling is good for you. But it didn't feel great two hours later.
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Ankur Nagpal | Yeah, and here's what's changing, though. Now, Indian people are really wealthy. There are 4,000,000 Indian people that have an average income of $100,000. They are the wealthiest ethnic group.
So, I do think things will change. It used to not be a very viable market, but now there's a lot of us, and it's a very big market. I think all of these businesses also make good commercial sense. | |
Sam Parr | If you read in our comment section on YouTube, the most recurring comment is, "Sean, you look great!" "Sean, are you losing weight?" "Sean, that beard looks wonderful!" So, Sean's gonna be a sex icon.
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Shaan Puri | You can get that for $10 on Fiverr. Anybody can get that for you. You should go pay $5 on Fiverr. You can get people saying how good you look on YouTube, I guess.
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Sam Parr | Everyone's commenting on Sean's looks. They'll either make fun of his outfit because he wears a Mickey Mouse t-shirt, or they'll say, "Sean, your workout program is working so well!" People are just sucking up to him so much.
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Shaan Puri | Well, yep, thank you. And Anker, where should people find you? How do they go and use your product that helps them with taxes?
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Ankur Nagpal | Yeah, absolutely! We're called **Carry**. You can find us at **carrymoney.com**. If anyone wants to set up a solo 401(k) or just get better at what they pay in taxes, check us out!
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Sam Parr | appreciate you thank you alright | |
Shaan Puri | thanks for coming man pretty bad just respond |