134. Effectively Growing a Business & Maintaining Profitability with Aryeh Sheinbein

Welcome back to the Average Show Finances Podcast. I'm your host, Mike Cavaggioni, and today's guest is Aryeh Sheinbein. Super excited to have you on the show. Thank you so much for joining me today.

My pleasure. Thanks so much for having me. I'm excited to be here.

All right. Awesome. So, Aryeh, the first question I'd like to ask you is the same question I ask everybody that comes on this show, and we wanna know a little bit more about you. So if you could, share a little bit about yourself, share your story. Who is Aryeh Sheinbein?

Okay. So I'm gonna try and give you the condensed version. I don't wanna put people to bed. The long story short is I grew up in New Jersey and grew up in a great family, but not entrepreneurial, minded parents very much. Hey, we have jobs, we have good jobs and you go to school, you do well in school, and you go on from there. And so therefore, like by the time I was like in middle school or so, I didn't realize it, but I had a lot of just habits that I had built that were built around business and money and things like that, where it wasn't per se taught. Like I think my parents did a really good job in providing what we needed, but at the same time taught me the value of a dollar. And that we don't just spend, willy-nilly and save and invest conceptually. But by the time I was like 13, 14 I played a lot of ball in different sports. I also collected sports cards and to me that was almost like a stock market. I would track the players and then track the prices of the cards relative to the player and I'll date myself a little bit. And that was, back then you didn't have the internet to get an instant price. There was no marketplace of an eBay where you could transact immediately.

You had to go buy those manuals that showed them. Yeah. And that updated every month.

Correct. Yeah. So in between the months, the price effectively was stale for 30 days and you don't had the ability to understand that, okay, yes, Mickey Mantle was no longer alive, so that card, what if that card went up or down month over month or quarter over quarter, you couldn't have predicted that per se. Actually, I shouldn't say that. At the time Mickey Mantle tell was alive, but the point was is he wasn't playing right. There was nothing he was gonna do that was gonna change something dramatically, but a hot rookie that everybody thought was gonna perform and then didn't, or sleeper nobody knew this guy was gonna be great and then he was amazing. Those cards you could get out in front. And almost like front run the price guide because you had this stale window of time. And I remember this happening over and over again to a point where I'm like, Oh, this is simple. My dad would take me to card show like on a Sunday at one of these hotels and I'd see a card and I know right away yeah, maybe it was the dealer was selling it for a dollar. And the book already was at three. So typically back then, people would try and sell it for the book value, which was the price guide listing. And they would buy it for half book. That was like models. It's almost like wholesale keystone pricing, right? Like you go into every sell store, it's $50. That means they probably paid 25. So when you go into the card store, if you want to sell your stuff, you knew that you were probably gonna get like half book. And so I'd go to a show and the guy would tell for a dollar and I'd know that car was already Book Valley at three and which told me he probably wasn't up on the fact that this was a performing rookie or an unexpected performing rookie. And I knew that this kid was playing really well and I felt okay, next time it could be four or five, just from a percentage standpoint and so I'd be like, Okay, I'll buy all. And then if you're right you can sell them to the dealer later, like any dealer later for half book or you could do something, trade 'em with your friend, whatever it was. And so that's a lot of times what I would do. I would then arbitrage it into different things and either flip out of the card or do stuff. And like I didn't really give it a lot of thought, but by the time I was like 15, 16, renting tables and became the dealer and selling myself, selling, my cards and stuff like that. And what I found though was I'm like, holy cow, I'm behind the table the whole time, I can't really make deals with other deal. I can't go and buy stuff. So then I started having my friends come to the shows with me. They'd stay behind the table, I'd say the prices over here on this part of the table are negotiable over here is nothing's negotiable type of thing. And I would go around, trying to find more inventory, so to speak. And

you started outsourcing at 15?

Yes.

Look at that. Awesome.

I wish I really would've leveraged some of those skills earlier on in my career with recognizing what I was actually doing. I graduated high school and I immediately think I'm gonna be a lawyer. And everybody's like, yeah, it's a great career. And I remember freshman year having this professor and he's like, do you like reading? And I'm like, Yeah. I like reading. He's No, like a lot. I'm like, No, I don't know. He's like the same thing over and over. I'm like no. He starts giving me basically all the bad things about being a lawyer, and I'm like no. He's You're gonna hate being a lawyer. I'm like, Oh, okay. So immediately I pivot by the end of my freshman year to go into finance and it became very clear that like stocks, like I actually had started investing in like mutual funds when I was a little, like 13 to 17. And then like senior year, I think we had the stock market game, but I didn't really fully understand all the stuff. I was like, okay, whatever the money, my money becomes worth more. Sounds good. So freshman year I started really getting into stocks in the market and understanding business more. And so low and behold, like that was the path I went. And when I graduated, I was like, Okay , I don't wanna be a stock worker. I don't wanna do this. I actually interned for stock workers. I did the whole cold calling thing when I was like in, college. And I was like, This is horrible. This's not what I want. And so I did what we call informational interviews. I had met with tons and tons of people and I'm like, What do you do for a living? What is it? Okay, tell me what your job is like, All the things. And so I got into investment banking and I was very focused in college that this was the job I wanted and I was going to get it, and I was gonna do well in school and I was gonna focus and I was gonna get this job. And that was the path that happened. Ultimately what happened though was once I got this job, I'm like, I'm not so sure how much I love this job, but it was a nice paying job, but I also fell upon sports cards again, and I started a nighttime side hustle and got into buying on one marketplace and selling on another market place. So it was effectively arbitraging, sealed card boxes, not just the single cards anymore. I was buying, and then I was starting to buy by the case. And so I would take the cases and you have a sealed case, which has X number of sealed boxes and I was selling them by the block. And then I started saying, Okay, the market was bigger and I got into wholesaling other, fishing and camping gear and all these different things. And this is what I was doing at night while running like a full time big job. And ultimately when I was doing all this online stuff, I realized okay, I need to learn marketing and I need to understand customer service and email marketing and all these different things. I started picking up all these other skill sets in addition to the finance stuff. And on my own though I was probably doing a lot of financial education. In addition to my day job, which taught me about valuing businesses and acquiring businesses and all that kind of stuff. And that's when I just started going deeper and deeper into personal finances and trying to understand anything I could really. And the truth was, is like in the beginning you didn't have Reddit. You didn't have the tools today. I tell my kids and people I talked to who work for me, like what you can learn in 12 months today probably would've taken like five to 10 years, a decade ago or two decades, Like the unfair advantage of the information. Like even this conversation, right? You're in Hawaii, I'm in New Jersey. What are the odds we would like without the internet, without podcasts, we wouldn't have these conversations. So the evolution of all this is tremendous. So basically between my side hustles and my day jobs, like I encompassed everything, investing, everything, business, everything. And so I juggled like a number of things now where I still have for large private equity firms and hedge funds. And at the same time though, I have a couple e-commerce businesses I'm involved with, and I help people really understand the investing and their personal finances. So it's all these things wrapped into one now.

All coming full circle and all started with that passion for sports cards at a young age. And it's funny because you were doing things back then, like you said you wish that you would've known the processes that you were doing back then to apply them a little earlier in your investing career. But, I think in the back of your head, it was always in the back of your brain to do things that way. And at the age of 15 to realize, to say, Hey, at this, I can buy cards while I'm sitting here at the table. So let me think of a way to do this differently and you started bringing in quote unquote employees slash friends to outsource that work to, Hey, you guys worked the table, I'm gonna go find more deals. And by doing that, you were able to to scale your little card business deal right there or your table and everything, you're able to scale that up to the next level where you wouldn't have been able to do that if you were just doing it by yourself. So right away you realized you needed a team, which was huge. The other piece though when you talk about Because there, there's a lot to unpack here with everything you just said. but you started off in school and realized, okay I definitely don't wanna be a lawyer just after having this one conversation with this professor. Thank goodness he talked to you right away and got through to you. Cuz otherwise, what happens if you would've went down that path and now you're stuck in a job that you really dislike and the other things that you had a passion for might just go away. Like you wouldn't have this side hustle that you're doing at night or have these e-commerce stores because one, you probably wouldn't have the time as a lawyer to do that and two, the passion and the drive probably would've just been eaten away. So the fact that you pivoted at that time really helped set yourself up. And I bring this up because I think it's important for people to pay attention to whatever career field you're going into, or if you're in a career field right now that you truly dislike and it feels like it's just sucking all the energy out of you, maybe rethink what you're doing. Maybe get involved in something that you enjoy. So you got yourself involved in finances seems like you enjoy that a little bit. I think we all like money. I know, I certainly do. So you changed it up, you went down that route. And then decided to do the cards again as a side business as a side hustle at night. And I think that's pretty awesome because not only were you in a good job, but you started doing something else to also increase your income which in turn gave you more money to invest, right? To build up what you've been building on. And I think a lot of people, lose focus and realize that, you can still have your nine to five job and start up a side hustle and even get to the point where your side hustle can become your main hustle, right? You can work yourself out of a job. So I think that's important to show that what you were doing during the day which is, was a very big job, and I'm sure it was very time consuming, but you still took some time outta your day to do these other things in the evening. So I think that's just something I wanted to point out that I wrote down. And the other piece of that is the other pieces that you had to learn in doing so, right? You had to learn marketing, right? You had to learn all these different skill sets to continue to do and scale your side businesses. I just wanted to point that out. Now, going into how you got started, so you started wholesaling the sports cards and everything, and then you said you got into some eCommerce businesses. So what kind of eCommerce businesses do you do right now on the side?

So when I first started, it's very interesting where your average person doesn't think about data. You have a conversation with your neighbor, the Average Joe, right? Like how often do you say, Oh, I studied this data, right? Like nobody, It sounds like you sound ridiculous, but if you really think about it in one way, shape, or form, data drives a lot of our decisions and a lot of our thought process back when I was starting it, eBay, didn't give you granular data. They were starting to have companies like connect to the back end, what we would call like the API to pull the data, but visually, optically, there was enough pieces of information that you could piece together the story if you were paying attention. So when I started on eBay, you could actually advertise on eBay's homepage. You could run your listing on the front of eBay's homepage, and it would, let's say you did a seven day auction. It would rotate, let's say three times over seven days, and you would see the spike of sales, like during that period. What I figured out very quickly was no one is gonna pay. It was like a hundred dollars for seven days. No one was gonna pay a hundred dollars over and over again if it wasn't working. And so therefore I'm like, Okay, this is clearly working cuz I'm seeing the same things. So now I just need to find how I can buy those things because someone else has figured it out. And if someone else could figure it out, I must be able to figure it out not because I'm any smarter, but it can't be that I need to be a rocket scientist to figure this out. And so I went and I found, I asked questions, I poked around and I found, So in the beginning I was product agnostic. I did not care what I was selling, I just wanted to know that it was gonna sell, right? So the data drove that. And then when Amazon became the platform of choice, and then eventually Amazon created this thing called FBA Fulfillment by Amazon, where I didn't have to do any of the shipping or things of that nature. Then I was able to actually really study data and look at things. And again, it didn't require me and my face to be the marketer. I was just like reselling brands that clearly had demand and all I had to do was find that brand and find them, have them sell it to me at a wholesale price and then I could resell it at retail price. So now it's evolved. It started out in one thing, the market's changed, I guess the competition has changed the ability for other people. People are marketing courses around stuff like this, so it's not nobody knew about this stuff. And so I generally have certain categories that I sell, that I have either exclusive relationships with the manufacturer, that I am one of one or one of five or less that are allowed to sell their products on Amazon. So we're an authorized reseller or we went to the manufacturer, like a lot of people go to China and they wanna manufacture this stuff and I didn't wanna do that. I wanted to go to the manufacturer and either make a change to the product or they wouldn't care if they made that product for me with my branding. And a lot of conversations, a lot of understanding different niches and categories. If I told you every type of product I've sold, it's basically anything you have in your house. Like legit. I have for a long time I was selling toothpaste and soap and deodorant cuz that was like, I liked the consumable component, right? Every 90 days or so, you're gonna get a new, deodorant or whatever it is, right? And or two by toothpaste, whatever. It's, so all those things. The fact that was gonna be a repeat buyer, repeat, buy, and at the same time it was also recessionary proof. Someone's gonna buy a toothpaste, whether it's recession or not. It was also going to be something that wasn't a luxury, so it wasn't driven by all these different things, but then eventually got very competitive. I moved into sneakers and clothing and like you name the category I've sold in it.

Yeah. And again, by moving into that category, you're also moving to another product that is also recession proof. Cause people still need clothes, they still need shoes. It's little things. It's the things that people need. Now by being able to move around to these different categories, is that what you mean by being product agnostic like you're able to, like you don't necessarily have a passion for a care what the product is, you just know that it's gonna sell.

Yeah. So let me take a step back. When I started, I was totally product agnostic. Now I became a little bit more product focused and cuz the way to think about the way I would think about this is if someone's listening is like, Hey, this sounds like a cool thing I wanna do, right? There's different models to resell physical products. The way I started. I was literally like buying retail, selling online. And we would call this like, this has a names called Retail Arbitrage.

Gary V talks about that all the time.

Yeah. But this was even before Gary was even into this stuff at all. Granted he was in business, he was doing wine, but it was before he kind of did any of that stuff. Then I got into basically wholesaling, right? Buying wholesale pricing and eventually, making it so that I was selling it retail. If you really wanna build a brand though, right? So I think of these businesses, okay, like what we talked about, retail arbitrage or even wholesale, where I am not the brand, I'm just literally a mechanism for someone to buy it. I look at that as cash flow business. No one's ever really gonna come to me and say, Hey, I wanna buy this business from me. Yes it could be sold, but realistically, it's all about the margin and the cash flow. And someone says, Okay, I'll buy it because you have the relationship, you have this, But I don't own the customer. No one buys from me because it's me, or it's the average Joe brand. They're buying because I offer Crest toothpaste at a reasonable price on the Amazon platform, and Amazon owns that customer, right? So those are like cash flow things and it's a good way to make extra money and it's a good way to have money to invest, a good way to pay after bills, all that kind of stuff. But if you're like, Hey, I wanna build a brand, I wanna own something, I wanna build a company, then you need to be thinking about who is your avatar? Who is the buyer? What speaks to them? So if I wanted to make a money clip, I probably want some kind of cool bells and whistles that speaks to the average Joe. The average Joe doesn't want it bulky in his pocket. He wants to have two credit card slots, maybe three, what likes the magnetic money clip? What speaks to them and then I would market it in a way that was like, Oh, this is the average, or it's not golden shiny, or whatever it is or if I'm like, Hey I am a fitness fan. But I can't take it to the gym. What features do I want on this that are beneficial just to the athletic guy or gal or who I raised who's going to the gym and forgets it or whatever. So if I'm building a brand, I wanna know who my avatar is, and then Amazon just becomes a sales channel, right? Like my website's sales channel. eBay maybe is the sales channel, but the truth is then I own the customer. I have an email marketing, I can reach out to my customer. Whereas on Amazon, you don't own that customer. Amazon is that customer. So I just wanted to take that step back. When I started product agnostic, like now we have like our core products that we really sell, we have relationships, some of our brands, So we have two different business. One I think of in like strictly cash flow. And one is more of a brand that we've potentially be able to sell it.

Yeah. No that's a great. Great point too Aryeh, especially when you differentiate, like the difference between somebody who's doing like Amazon FBA versus having your own store and brand where you actually own the customers, and that's one of the things we talk about, at least I've talked about on the show before, when you have an email list and you're doing email marketing and things like that, that email list, you own that, right? That's yours, but your social media, everything else that is owned by another company that can go away at any time. If you have customers on Amazon that can go away, any time Amazon can say, Ah, we're gonna shut down. We're not gonna do FBA anymore, we're just gonna do it all ourself, whatever. You never know what can happen in the future. However, when you have that list yourself, you own that and you can reach out to people and say, Hey, look, I got this new product in my store, and whatever. Past all that, both models work, both depending on what you wanna do. And like you said, for the whole Amazon piece, is that, is it is more of a cash flow thing, right? But it's also a lot less, I guess less work that you have to do cuz you're not the one packing everything up. You're not the one shipping everything. It's FBA fulfilled by Amazon, right? They take care of that. So I think that's pretty nice. It's a good convenience, right? But now,

oh hundred percent.

How can somebody if they want Their money or they wanted to make more money by doing one of these as a side hustle, but they can't allocate a lot of time to that. What would you say would be the best route for them? Or is that like limiting belief for something in this?

That it could be done or it can't be?

That I don't have the time to get this done because like the,

Yeah.

I'm looking at the way that you were doing things. You had your day job that you were, obviously very involved in, and then at night you were able to do this arbitrage and start this side hustle. So how does somebody allocate that time to make sure they can get that done if they don't feel like they have a lot of time?

Yeah. Like anything, whether it's investing, whether it's a side business, whether in the beginning you have to spend some time learning the skill, right? And like most things, when you start, you probably have more time than money. And then at a certain point you have more money than time and you start to buy back more time by using money, like leverage time, leverage, meaning like having employees, outsourcing or whatever. So there's a number of different ways to do this and I can try and give you like the three minute crash course. If you have the cash, and you wanna start this, right? The one thing is like there are virtual assistants that can help you research in the product. So now there's a lot of software, there's not a lot of tools out there that can actually, let's say the arbitrage model. There's a tool that will literally compare websites that compare to Amazon. So it'll run through Target and Walmart and, whatever and name any website you probably buy from and it can price compare against Amazon. You can actually make the search function work to the point where you actually will tell it the parameters. If it's not gonna make any X dollars or profit, or it's not gonna make any X margin because Amazon's gonna take fees, right? So the software has embedded in it all the fees and it knows all the things. Whereas when I started, they didn't have any of this stuff. So I'll give you like an example that, there's one software out there called tactical. And that's what they do. Like they legitimately will just run, search against it and, for a monthly fee they'll do whatever you need to do. Now the next thing you're gonna need to do, so you can have a virtual assistant, sort through a lot of that stuff. The software's gonna run. Then someone has to go through the list and say, Okay, are there any false positives in the list they gave me? Does this fit my parameters Exactly and all this kind of stuff. And then the next thing is someone actually has to do the buying. So if you're gonna online arbitrage, you're gonna buy on, walmart.com and it has to come somewhere. It can't go straight to Amazon. So now you need either a third party warehouse who will prep this and then ship it to Amazon for you. Again, all this stuff can be outsourced, but at some point you're gonna have to understand what you're doing. And so there is an investment of time, but it can be done in a few hours a night. And the other thing I would say is like when people are like now you told me it's two hours and three hours and four hours, you don't have to do it all at once. And nobody said you have to scale as fast as the other guy. This is like the games between you and you, right? If you only need to make $500 a month or you only wanna make $500 extra a month, you totally can do that and I think that's part of the problem with like physical product businesses where people get caught up in this, I gotta grow, I gotta grow, I gotta grow. In physical product business, if you're growing and growing, understand that means that's gonna take more money for more inventory because in order to sell more product, you have to buy more product. And so if you're like, Hey, I wanna be taking money out of the business, that's totally fine. Unless you can get like massive margins all the time, you're not gonna be able to take money out, profits out all the time and grow the business like it's gonna be a little bit of an either or. So you're gonna have to really focus on what's most important to you. If you have Hey, I have $500 a month with bills that I'd love to get covered, it's a layup. But if you're like, I want to bring home a mid six figure salary. Okay that's gonna take a lot more capital to get you there.

Yeah, a lot more capital, a lot more time that you'll have to put into that business to build it, right? So it's just, again it's gonna be at the operator's pace, right? How fast you wanna scale, how fast you wanna do things. And if you're trying to build something up to get rid of your day job, obviously you're gonna wanna put that time and money in up front and make that happen so you can sit back and do something else that you enjoy. Kind of what I was talking about earlier, right? If you're in a job field that you don't like going to work and it's not something you're passionate about, and you wanna start up a side business to do something different. If you focus and you put enough time and effort into that and money, you can build something up to replace your day job and do something that you enjoy, right? Something that gives you a little bit more satisfaction, job satisfaction, work, family balance, work life balance and all that. I think that's, I think that's huge. Okay. Cool. Now what about if you're trying to grow your wealth, now a lot of people, they'll get involved in a business like this and sometimes they'll lose focus, right? And they just focus on scaling and scaling and sometimes forget about everything else that's going on. So what happens to somebody that gets in a situation like that where you lose focus and you forget the whole reason why you're in the business in the first place?

Yeah. So I think I mean I, there's so many different ways we can go with this, but like the most important thing like you were just saying, right? Like why did you get into this, right? Was it to generate an extra 500 or a thousand dollars a month, or was it to replace your day job and you wanted to move to this full time and even if you move to this full time, have you scaled, like from an operational leverage standpoint? Meaning do you have virtual systems, do you have employees that can do a lot of the things without you? Like you, you made the mention of it when I was at the card table figuring out that I couldn't be in two places at once, it's the same thing. Like I joked when I first got into fba, like I met a lot of people and a lot of these people left corporate or they left a job making, I don't call it 75 to a hundred thousand. And they were able to bring in 75 to a hundred thousand dollars of net income to themselves from this business. But they were working like four times as much, or three times or two times as much. But they loved it because they were working for themselves. So I said, I would always say to them, I'm like, You don't have a business, you have a job. You work for yourself. You're self-employed. And that's cool, but just understand that because if you take the next month off, guess what's gonna happen? Your income's gonna fall apart. To your question, right? Someone who gets into this and now they're like, Oh my God, they don't have time that you need to constantly be reassessing Okay, what am I trading? What am I giving up? I have four kids, so my whole thing was like I want to coach their sports leagues and I wanted to be with them when they were going here or there and whatever. And I want, we want go on family vacation. So I needed the systems and the people. If I was going to walk away from that and like for a week or two on vacation while having my day job. Like I'm allowed the vacation there, but could I do that on the side things? So I think one of the things that I learned really quickly was, okay, I want these businesses to throw off the money to either pay for certain extras that I didn't want to change my lifestyle for, or really invest the capital. I wanna be able to do more real estate. I want more money going to the S&P 500. Whatever it is. And that's how I start to think about it. And like the truth of it is whether you do it as a side hustle, a full time, whatever, you need to treat it as a business. And like I always say to people like, you really wanna start with the end in mind in the beginning. What is that end goal? And the goal polls can change, like the goal's a lot to change, but you should be reassessing that goal. And I tell people like if you wanna talk about business, not on the investing side, but just on a business side, there's two really good books that just think about. And that is one is Built To Sell, it's a 200 page or less book that it's written as a story. And it's not about selling your business, it's about building that business t o have the ability for it to be sold. And the other one is E-Myth Revisited, right? Like Michael Gerber. And it talks really about Hey, you're this person, you're doing all the things and now the business doesn't grow cuz you are doing all the things right? You're this bottleneck. And so again, both those concepts are the same in the sense like at the core they're like, think about the end first. So if you got into this business because you wanted to build your wealth, then you need to know that every month you want to take X percent or X dollars out of the business and have it auto pulled to the S&P 500 mutual, index fund or ETF or whatever it's, Or if you wanna be buying Bitcoin on a consistent basis, okay, fine. You're gonna dollar cost, average rate, whatever you think your investment strategy is going to be for long term wealth, use this business as a tool to do that. But if you lose sight of it, you'll likely get trapped in this lack of a better word, the hamster wheel. Like you're constantly chasing, cuz there's always more money to be made. Like why do you want money? So I know it sounds like cliche Oh, what's your why? But the truth of the matter is like sometimes, you wanna save $5 and you wanna make $20, but really, if that's gonna cost you an hour of your time, is that really worth it? Does it make more sense just to pay somebody to do it? And those are sometimes our hard decisions to make. And that's why I think if you start with that goal in the beginning, at the end, like you have that end goal in mind. And again, it can get a bigger goal or smaller goal, but if you have that, you generally can work towards something in a more refined way.

Yeah, no are ya that's a very fair way to put it. There's a couple things here, right? You're talking about, moving the goal post, right? Yeah. You need to have your goals, you need to have it set somewhere and you need to chase those goals, but eventually you're gonna have to change 'em cuz you will achieve those goals, right? You keep pushing and pushing. You're gonna achieve those goals. Then what? You don't wanna stagnate, so you wanna keep moving the bar. You wanna keep raising the bar. And this goes two ways, right? You don't wanna get yourself into the point where you're on that hamster wheel just constantly chasing and chasing. If it's not something that's attainable. But if you set these goals and you keep chasing these goals, and you're attaining them, and you move the goalpost further, and you keep going, and you have a good reason why you're doing, Then you'll be unstoppable because you'll be able to just keep growing and scaling and making that happen. Now the other piece of that, as you're saying too, don't lose focus as to why you did this. You were doing this to generate wealth, to replace your nine to five job or whatever that case may be, whatever your goal is for doing it, whether it was to make that $500 a month to pay off some bills or a thousand dollars a month, whatever it was, don't lose focus of what that was and get solely invested in that you lose your way. And then on top of that, as you're doing this, especially if you're doing this to build your wealth, can take money out and invest it and make sure it's getting contributed into something. So you said into the S&P 500, or if you're gonna dollar cost average Bitcoin, whatever it is that you might wanna do. So let's say somebody is in their nine to five job, they started their side hustle, they're investing that money, separately into some index funds or just into own individual stocks that they're comfortable with. Would you say that contributing to their employees 401k, Does that still make sense while there's still doing this on the side?

Yeah. So I think my view is, personal finance has the word personal because everything's personal, right? So obviously the answer disclaimer depends, and this is not financial advice, but if your company that you work at is giving you some sort of match, so everyone's got these different things, but like on average, they'll basically say if you take 6% of your salary, they'll give you 3% of your salary in a match. So that's effectively a 50% match to your first 6%, right? So let's talk in easy numbers. If you make a hundred thousand dollars salary, you put in $6,000, they will match 3000. Out of the gate, there's not a question. You just got a 50% return on money. You should put that $6,000 in because you just made 50% on it, even if you're flat in the market. So total no-brainer there. And even if you're gonna grow it in a business, it's still 50%. That's a number, and so like the other thing is now you have to start to look at your personal situation. 401k really like whatever, they're 40 years old. They're not like, they haven't been around maybe they're like 50 or 60 years old, but they haven't been around for decades and decades and centuries. They replace the pension fund. Cause the companies are like, we can't keep investing and create a future for these people, so you gotta do it on your own. And they come with all these tax things, right? Like pretax post-tax, right? Cause there's Roth 401ks and then there's regular 401k. Keep in mind, most importantly, anything in this vehicle, for the most part, you cannot touch till you're 59 and a half. Yes, you can take it out. There's penalties, all these things, but the reality is like you have to know your situation to say, Okay, is this, am I okay waiting till 59 and a half, or do I want to be doing something else with this money, right? I wanna save $10,000 so I can go into a real estate syndication where I'm going to own a piece of land with my next door neighbor or whatever. It's right. And worse comes worse. You take it out and you pay the penalty, right? That's probably like the worst case scenario. I guess the worst case scenario is you put it in your 401k, it drops 50% of value and then you pay the penalty. Okay? So obviously not that good. Putting money in a 401K is definitely still something that people should be considering, but understanding like what are they really trying to accomplish? Because that money at 20 whatever years old, it's gonna compound really nicely, right? If you fill it from like 20 to 30 and you do your 18 and whatever the heck it is now. 19 and a half, 20 and a half thousand dollars, whatever the legal, tax allowed amount is, if you're gonna put that in, it's gonna compound really nicely. Yeah you'll have down markets go about markets, but it's gonna grow. But if you're like, Okay, I want to do this other business again, I go back, Hey, do you have a match to take the match? But after that, if you're like, No, I now want to grow this thing and start a new job, like create enough of a business that maybe I'm gonna even leave my job, I have no qualms of putting it into a business because one of the best investments anybody can make is investing in themselves. So understand, there's the long, short way and there's short, long way. And what that means is if you think there's gonna be some sort of shortcut here. Guess what? You're gonna hit some roadblock because you didn't know something. And it's a lot cheaper a lot of times to pay someone to learn. Yeah, you can go on YouTube or listen to podcast. I'm not opposed to any of that stuff. And I'm not like mandating everybody pay for education, but a lot of times it shortcuts things because you didn't know that thing hiding behind the wall or you didn't know that, ugh, if you go this way, guess what? There's another tax to pay on the back end or something like that. So in terms of, if I want to be investing in a business, I say, yeah put the money to work if you have a match. If not, you have to make that short term decision of like, how much do I need to be growing this business or to educating and then can I afford then just to put the rest or some of it into the 401k? Because the reality is , this is another principle I tell people, and that is Parkinson's law, which has nothing to do with investing. Investing is something that holds true in anything. Parkinson's law in a, in its short form, is whatever time or space you give something, it will occupy that. So if I give you a closet to hold your stuff, you'll probably be able to fill it up, but if I actually give you a whole bedroom over time, you'd probably fill the whole bedroom up or you have a project due and I give you three days. And normally it takes you a week. You're gonna get it done in three days because that's only amount of time I gave you. If you make $5,000 a month in post tax month, and I say, and you're like I spend all of it, like I use every penny of it, so I can't afford to invest, or I can't afford to invest in my, but my business or my training or my education. Parkinson's law will hold true, and that is if I take 10% away from you to put into your future and invest or put into your future to give you education or whatever it may be, you'll find a way to live off of $4,500 a month. It's not like Dave Ramsey cut the latte kind of thing. It's, you'll find a way it will maneuver itself and that's a Parkinson's law concept in my mind. And it may have been a long winded answer to the simple question 401k or not, but I think it really depends on the situation. But those are a lot of the variables I would think about.

Yeah, I absolutely love that answer because there again, a lot of great takeaways from there. Especially the one about shortcuts. If you ask me, shortcuts lead to deep wounds, right? You take a shortcut and it might seem like a shortcut, but man it's really a deep cut, right? Because a lot of times you're not gonna see the stuff that's gonna catch you off guard because you decided to take a shortcut instead of doing it. Quote unquote, the right way the first time. And in real estate, we call that an expensive education, right? Because you're gonna learn from that and hopefully not do that again in the future. But yeah that's that's all great points. And especially with Parkinson's law, using that as a reference as well, because you're gonna have to learn to work around what you have and what you're given, so by taking that 10% away and working around eventually it's gonna become normal, and that's what you're gonna be used to doing. It might be difficult for the first 30, 60, 90 days, but after that you're gonna be like, Oh no, this is what I live off of now, it's $4,500. No that's all very key points and key takeaways. Okay. Awesome. Aryeh. I'd love to transition this into something that I call the final round. It's where I'm gonna ask you four hard hitting questions just to get a good sense of who you are when it comes to being under pressure, making mistakes and all of that good stuff. So if you're ready to go, we'll get this party started.

Let's do it.

All right. Let's do it. All right. So Aria, the first question in the final round is, what's the biggest mistake you've ever made?

Whew. I don't know that there's the biggest, because I have a number of mistakes I made. I made a lot of mistakes. And I think we're gonna stick on the topic of either investing or business. We'll go with that. And I think it was probably,

let's stick on the business side. Cause I have a lot of investors that come on the show and share their biggest mistake in investing. I'd like to know what your biggest business mistake was.

So the biggest business mistake was, for all the push that I gave against manufacturing something abroad in China, I was very opposed. I felt like I had no advantage because I don't have boots on the ground. I'm not there. Even if I were to go there, I don't speak the language and like I feel like. As a US you know, person, you're it says sucker written all over you. Like you're there to be taken advantage until you have the relationship. So I was very opposed. And so for a while we just, I wouldn't do this and eventually I had a business partner and I was convinced that this was gonna work out and the product was gonna sell and everything was gonna get manufactured Great. And sure enough, we didn't fully understand some of, the components that they told us in terms of what the fail rate of the manufacturing was gonna be and we sunk a bunch of money into a product that in theory should have sold well. The data said that it would sell well, but the quality control was atrocious. So now we've sunk the money in, then we had to pay to get the thing out because now it's sitting on the docks and they're gonna charge you rent or whatever it is. You can't just dispose of it. So we had a boated over here, then we paid someone to sort through what was good and not good. Then paid to dispose of what wasn't good, and then ultimately, instead of trying to sell it on Amazon or whatever, we literally sold the quality ready stuff to another seller just so that they could potentially make money. So we got hit every which way, right? I paid for the product. I paid to get the product out. I paid to have a product, basically combed and half of it destroyed. And then I took some lesser amount for the product. What I learned from that, that mistake was bad and it was compounded by go with your gut, right? Like my gut said never do this. And eventually, the money, the idea that we're gonna do so well, Convinced me otherwise, and it was a big mistake and I should have said, I know what I know. I know what I don't know, and I don't need to try and do this thing. And ultimately, it was a failure.

Yeah. Wow, Aryeh so it's like one of those situations you got blinded by the potential profits of that and you were like, Oh this can be a really good thing and it made you forget about the whole reason why you didn't wanna do that in the first place. So yeah, I definitely appreciate the honesty and being so transparent with a situation like that. That was pretty rough. Again, an expensive education that you had.

Exactly.

It's definitely something you learn from and realize that your initial gut feeling you were right and to not do that. Yeah always trust your gut. A lot of times, you could have all the data in the world pointing the right way, saying this is gonna be good, this is gonna be good. But if you get that pit in your stomach when you think about what you're about to execute, it might not be the best move to do. That means there's some type of self doubt on the inside that is telling you, Hey, don't do this. So Oh wow. Okay. Definitely appreciate that. So the next question kind of ties into that, right? And that is what is something that you've learned that you wish you knew when you first got started?

Okay. So a lot of things I wish I knew when I first got started, but, I'm gonna tie two together and that is time flies and you never get time back. So that's one, like time when you lose, when the time goes on, you'll never get it back. And it seems obvious and it seems obvious whoa what's so great about that? But you always think that you'll get it. Meaning let's just take a for instance, I was at a job, I was working at a venture capital firm, and for those number of years, that employer did not offer a 401k. And what I should have been doing was using the IRA for those few years, it was three or four years, and I told myself like, Oh, it's okay. I'll make back the time. And the reality is like when you're young, those years matter a lot. And like mentally, I kind of knew that, but in practical application, you just didn't feel it. You're like, Oh it'll always work out. And so I wish I knew that no, you won't get that time back. No, don't make that sacrifice. Don't do that. That thing that you think, you'll shortcut it later, right? Like you'll find a way. And so therefore just know that like when you're in your twenties, Do the thing now because you're not gonna have time later to do it. If you don't have time now, guess what? You're not gonna get more time later. Your life's gonna get busier. Different things are gonna happen. And so take those chances. It's hard. Whether it's investing in business career, it's hard. Like I get it, but that time's never gonna come back.

Yeah. Wow. Great point, Aria. And it's one of the things too is like I had mentioned earlier, that work life balance, right? You need to have that. Cuz if you just work work, you're gonna, you're gonna lose the other piece of your life and the enjoyment that you get out of life, right? So that's huge. It's one of the reasons why I retired from the military at 20 years instead of staying in longer. I just, I felt my kids were at a age where they were, 13 and 11. I'm like I need to be home more. I need to be able to, provide and, but still be the attentive, a attentive father that I need to be, yeah. For my children. So yeah. That's huge. So definitely That self recognition of time is not something that you can ever get back. The, even the time that we've spent talking to each other, I'm glad this is this, for me at least, it's been a very fruitful conversation. So it's, it's something I can't get back, but at the same time, it's something of value. So I value this time that I've had with you to talk about this absolutely. Awesome. All right, so I have one more hard hitting question, and then we'll get into one more opinion based question. And that is, do you have any tips or tricks that you would recommend to someone that is just getting started today? And let's keep this on the arbitrage side rather if somebody's starting up a side hustle.

Okay. So I think this cuts across everything. If this doesn't matter, investing side hustle, big business, regular business, life, marriage, anything. And that is stay consistent. And it's one of these things where, again, sounds totally basic. Of course we gotta be consistent, but no, it's not. If you are doing arbitrage, okay, let's use your example. If you're doing arbitrage, it's very easy to say, Hey, I bought on Monday, I bought product on Tuesday. I bought product on Wednesday. I'm gonna take Thursday and Friday off. But you're heading into q4, right? We're coming outta the summer. No, you need to be building that inventory and you, and the model says Buy inventory every day . And if you're like, Hey, I wanna grow my podcast, No, you need to post on social media every day. You need to record that episode every day. Whatever the cadence is, Right? So maybe on the arbitrage it's buy one day, ship the next day, label the next day, whatever it has to be done. Don't break the consistency because what will happen is the income will break. And same with investing, right? Hey, dollar cost averaging, ah, whatever. I don't, I'm not gonna automate it. I'll just, I'll remember, right? Oh, boom. I'm not consistent. If you wanna stay healthy or you wanna work, Stay consistent. All these things, it's just like this truism that like we take for granted, but if you actually start to monitor your consistency in all these things, you'll be like, holy hell like it. It's one of these crazy multipliers that you're just like okay.

Yeah. No, definitely. That's just great life advice in general. Yeah, no, love that. Now I, I have one more question for you of the final round, and I will preface it by saying, besides your own, cause we're good to that , but besides your own, do you have a favorite business investing or real estate related book or podcast or both? And I already know of two books that you mentioned, but is there any others?

Yeah, sure. So I read a lot of books so I can ramble a ton of books. But I will say

just not reading them over and over again.

So there are certain books though that I have read multiple times. There are certain books and they're not investing in books. So for example, I'll give you, I'll give you a book that won't cat count for your one. But Atomic Habits, I've read that book more than one time. And it's because it again, goes to the consistency thing. But, I would say, if we're a basic, if we're looking for basic investing books, there's a book called The Richest Man in Babylon, and it's not about investing.

I love that book, but one of my favorites

it is a favorite book because again, it's a parable, it's a storyline. It's easy read But it talks about the power of compounding it, it frames everything from an investing kind of perspective. So I think that's a very good book. The other books it's interesting, like if you're like, But I want something stock related. I want something like really investing. I would say the two books I would tell people to read are the little book that still bigs the market is one, it's a quick book also, and then I think it's called the little book that forgot the other one is written. It's a, So that one's blue . And there's a red one that's the little book that, that it's about index funds. It's written by the founder of Vanguard John Bogle. So I'm blanking on the exact title, so I don't wanna mess it up. Those are good investing fundamental basics, like someone who knows close to nothing. These books will explain things in a very. 10 to 20 year old range, very easy, concepts and that kind of stuff. So those are two books there. The, what do you call it, The Richest Man in Babylon, is just like a general book that I think for investing in just Money is a very good thing. There's a new book out though, that I would tell people to read, and that's the psychology of. and that is a really good book. I newer it's out in the last two or three years. Excellent. Excellent book. I'm blanking on the author's name, but again, I've read it and I can highly recommend it and it will probably change the mindset of a lot of people in just how they invest or think about when.

Yeah, absolutely. So mindset's a huge thing, a key thing too, especially when you look at some of these books that, that help you with that mindset. Even The Richest Man in Babylon, it's one of those things that just it's a foundational book that, when you read it, it's even if you had no knowledge whatsoever of investing or being able to save money properly or how to do that, it will give you those guiding principles all through little short stories and parables. And it was, it's really written. It's written really well, I agree. I absolutely love that. It is actually my absolute favorite personal finance book. When people ask me, it is my favorite. And then of course I like Rich Dad, Poor Dad as well. But that one right there just takes the cake for me. Richest Man in Babylon, a hundred percent. Okay. Awesome. Glad to see we have that in common. All right. Let's get to the juicy stuff, right? Because people listen to this show and saying, Man, I really like what Aryeh is doing, he's got some really great concepts. He's talking about some really good stuff. I want to know more about him. First of all, let me mention that he has an Apple Top 100% ranked podcast called Inside the Lions Den. That's the first thing I wanna mention. So if people wanna find more information about you and your podcast. Do you have a website, social media, anything like that where people can follow you get more information?

Yeah the website is solutionadvisory.com. Or if they want like basic investing finance kind of stuff. You can head over to futurefundme.com and then social media. Instagram is the platform I'm the most active on currently, which is Aryeh the businessman. And Twitter I've been getting more active on, which is just my name, Aryeh Sheinbein.

Awesome. I love it. I will make sure I have those links in the show notes to make it easy for everybody to find that information. Just don't sit here and try to click or copy and paste it if you're driving. All right. Now ae this has been an awesome conversation. I genuinely appreciate it. Thank you so much for taking the time today to chat with me.

My pleasure. I really enjoyed it as well and I'm sure we could have just continued for another few hours, so

I think we could a hundred percent. Alright hey thanks for joining me and our special guest, Aryeh Sheinbein on the Average Joe Finances Podcast. Don't forget to go leave us a five star review and tell us what you liked about this particular episode with Aryeh. Aloha from Hawaii and have a great rest of your day.