Focusing On What Is Most Important
Last week, I told the limited partners at Pomp Investments that I would be returning all outside capital at the end of the year and would be converting my investment activities into a family office. The response to this communication was incredibly powerful so I figured that I should share the decision publicly. No matter your occupation or life goals, my hope is that the letter below can help you.
Here is the letter that I sent to the limited partners at Pomp Investments:
Hope each of you is doing well. I am writing this letter to inform you that I will be returning all uninvested capital at the end of this year and retiring from managing any new outside capital moving forward. I will be converting all of my investment activities into a family office. This decision is the product of many weeks of deep thinking, so I wanted to share my logic with you below.
We live in a world filled with endless dopamine hits. Every second, there is a social media feed to scroll, notification to check, or incoming message on the 10+ messaging apps we have on our phones. The constant roar competing for our attention creates an addiction that is hard to break for many of us.
This digital addiction prevents us from stepping away to think. Unsurprisingly, if we are unable to find the time to think, then the art of long-term thinking gets completely lost. We are simply hamsters running on the wheel looking for the next dopamine hit.
I took a few weeks recently to consciously step away from the digital world for a few hours a day. It allowed me to think deeply about what I was optimizing for over the long-term. I don’t define “long-term” as a few months or a few years, but as decades.
This process continued to lead me back to two key points. First, the idea of a billionaire. Much of the world measures billionaire status by the number of dollars that a person possesses, but the measurement of billionaires based on dollars is not the right way to look at it in my opinion.
Graham Duncan coined the phrase “Time Billionaire” and it has stuck with me ever since I read about it. The idea is that time is the only asset in the world that can’t be purchased. Warren Buffett is worth tens of billions of dollars, but no young person would switch lives with him if they had to be in their 90s. In turn, the young person is wealthier than Warren Buffett because of time.
I’m 33 years old. If I am fortunate enough to follow the average life expectancy of an American today, I still have more than one billion seconds left in my life (more than 31.5 years). I’ll have to avoid catastrophe, but the odds are in my favor.
The funny thing is that I’ll continue to increase my financial net worth, but I’ll continue to lose my time net worth. Most of my peers and colleagues are well into their 40s, 50s, and 60s. They’ve been chasing financial wealth for the majority of their life, yet they have wasted their wealth of time with reckless abandon.
I’m committed to making sure that doesn’t happen. Ultimately, this is why I’m returning all external investor capital and will only be managing my personal portfolio moving forward. It will allow me to spend more of my time with my family. It will allow me to side-step the constant incentive to raise more money, charge higher fees, make more investments, and make wealthy people even wealthier.
This brings me to my second key point — educating the average citizen. I don’t have it all figured out, but I have been able to build a knowledge base that allows me to walk away on top at a very young age. I’ve seen the impact that I can have by sharing this information with other people and it is the single greatest impact I believe I can have right now, so I’ll continue to create content with a focus on lifting more people out of their current situation.
So what does this all mean for your investments?
The short answer is that you’ll be in a good position. A number of the funds that I have fully invested are top performers. The portfolio that I have built with your capital continues to look more attractive every day as well. I will continue to manage the investments that have been made and will look for opportunities to liquidate positions as they become viable and make financial sense.
For the uninvested capital, I’ll be returning 100% of that to each of you at the end of this year. And there will be no more capital calls moving forward. In essence, we have reached the end of our journey together in terms of new investments.
Now many of you will be curious about whether I will be walking away from investing completely and the answer is no. I’ll continue to invest my personal capital into funds and early-stage opportunities. There is something freeing about being able to invest your own money. You have the ultimate skin in the game.
When I started investing full time in 2016, I barely had enough money to make pathetically small investments. I needed the outside capital. It was the only way that I could get in the game. Fortunately, the situation has changed, and now I can devote my time to other things that I want to accomplish.
This letter is not an easy one to write. I’ve worked diligently for years to build the relationships and capital base that I am now walking away from. I know deep down that this is the right decision though. As Anna Quindlen said in her 1999 Mount Holyoke Commencement Speech:
“When I quit the New York Times to be a full-time mother, the voices of the world said that I was nuts. When I quit it again to be a full-time novelist, they said I was nuts again. But I am not nuts. I am happy. I am successful on my own terms. Because if your success is not on your own terms, if it looks good to the world but does not feel good in your heart, it is not success at all. Remember the words of Lily Tomlin: If you win the rat race, you’re still a rat.”
It has been an absolute pleasure working with each of you over the years. We have had an incredible run together, but all good things must come to an end. I’m looking forward to the next chapter of my life and spending more time with my family.
The response I received from the limited partners at Pomp Investments was incredible. A number of people wrote me to share that they had made similar decisions over the years and it was the single greatest thing they did in hindsight. Others shared words of encouragement, along with small nuggets of wisdom that have helped them enjoy their families and friends more.
I still have a lot of work ahead of me. I’ll be supporting and managing all of the investments that I’ve made, along with continuing to run the holding company that I own. But I’m really excited about spending more time with my family. The family office will be deploying capital into funds and early stage opportunities in the new digital world, so if you’re a founder — you know where to find me :)
Time is precious. Spend it wisely. Focus is a superpower. Enjoy your family. And just do the shit that makes you happy. Hope everyone has a great start to their week. Talk to you all tomorrow.
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