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August 9, 2024 • 53min
The Market Is Crashing. Here’s What We’re Doing About It…
My First Million
In this episode of My First Million, hosts Sam Parr and Shaan Puri discuss their reactions to recent stock market volatility, share highlights and observations from the Tokyo Olympics, explore an interesting family business success story, and reflect on parenting and family dynamics in business.
The Market Is Crashing. Here’s What We’re Doing About It…
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Key Takeaways
- Market volatility: Don't overreact to short-term market drops. Stick to your long-term investment strategy and avoid making rash decisions based on fear or emotions.
- Olympics highlights: The men's 1500m race was particularly exciting, with American Cole Hocker unexpectedly winning. Other standouts included Femke Bol in the mixed relay and the refugee Olympic team.
- Cintas success story: A small family laundry business grew into a $75 billion uniform rental and business services company through focus and generational planning.
- Family business succession: Passing a business to the next generation can work but requires careful planning. Don't use "doing it for the kids" as an excuse to overwork.
- Parenting moments: Small teaching moments and interactions between parents and children can be deeply meaningful. Look for opportunities to connect and pass on knowledge.
- "Find the people you love and do life with them": This philosophy can be applied to both personal relationships and business partnerships.
Introduction
In this episode of My First Million, hosts Sam Parr and Shaan Puri discuss their reactions to recent stock market volatility, share highlights and observations from the Tokyo Olympics, explore an interesting family business success story, and reflect on parenting and family dynamics in business.
Topics Discussed
Reacting to Market Volatility (0:00)
The hosts discuss the recent 5% drop in the stock market and how people in their circles reacted:
- Many people panicked and considered selling everything
- Sam advocates for staying calm and sticking to a long-term index fund strategy
- Shaan shares past mistakes of overreacting to market moves
- Key advice: Don't make rash decisions during volatility. Wait 30-90 days before making any major changes.
"If you just buy index funds... there are ups and downs, but in general, over 5-10-20 year periods, you're expected to go up." - Sam Parr
Olympics Highlights and Observations (10:48)
Sam and Shaan discuss several exciting moments and storylines from the Tokyo Olympics:
- Men's 1500m race: Unexpected win by American Cole Hocker over favorites Jakob Ingebrigtsen and Josh Kerr
- Mixed relay: Dominant performance by Dutch runner Femke Bol
- Refugee Olympic Team: First medal won by a refugee athlete (boxer from Cameroon)
- Gymnastics controversy: Simone Biles withdrawing from events
- Challenges of following Olympics coverage and finding compelling storylines
"Femke Bol... She just dominated the US in the last leg. She's this Dutch runner who looks like she's not even expending any effort whatsoever." - Shaan Puri
Cintas: A $75 Billion Family Business Success Story (34:00)
Sam shares the story of Cintas, a uniform rental and business services company that grew from humble beginnings:
- Started in 1929 as a small rag-cleaning business for circus performers
- Founder's son Richard Farmer took over in 1960 when revenue was $180,000
- Focused on uniform rental and expanded into related business services
- Now a $75 billion public company with $8-9 billion in annual revenue
- Family still owns ~18-20% of the business
"He was like, I made it my mission to create this, like, generational thing, and I've trained my children to help take this over and to make decisions as it comes to giving away our money, but also governing the company." - Sam Parr
Family Business Succession and Generational Wealth (38:18)
The hosts discuss the challenges and considerations of passing businesses to the next generation:
- Shaan doesn't actively plan for his kids to take over his businesses, but would be open to it if they're interested
- Caution against using "doing it for the kids" as an excuse to overwork
- Importance of spending time with kids now vs. solely focusing on future wealth
- Potential downsides of giving kids too much money without character development
"I think anybody who says [they're working so much for their kids] honestly is lying. I think you're doing it for yourself, and you use your kids as a justification." - Shaan Puri
Meaningful Parenting Moments (42:14)
Shaan shares a touching moment he observed between a father and son at a water park:
- Father patiently teaching his son soccer techniques
- Inspired Shaan to look for more teaching moments with his own kids
- Example of "driving lesson" with 3-year-old son to teach about being a man
"This is so amazing, this dad just teaching his kid this little thing, like, just being able to pass down one little bit of information and the kid so earnestly processing it." - Shaan Puri
Working with Family and Friends (46:43)
The hosts discuss the pros and cons of working with family and close friends:
- Shaan shares philosophy: "Find the people you love and do life with them"
- Potential upsides outweigh risks of occasional conflicts
- Examples of successful partnerships with family and friends
- Importance of give-and-take to make relationships work in business context
"My view of life is you find the people you love and you do life with them." - Mike Brown (quoted by Shaan)
Balancing Support and Independence in Business (49:09)
The hosts discuss strategies for supporting businesses while encouraging independence:
- Anecdote from Chris Wilkinson about minimal centralization in holding company
- Allowing CEOs to truly own their numbers and results
- Concept of "neglect" leading to toughness and independence
"The children of deadbeat dads grow up tough and independent." - Chris Wilkinson (quoted by Shaan)
Conclusion
This wide-ranging conversation touched on several important themes for entrepreneurs and investors:
- The importance of maintaining a long-term perspective during market volatility
- Finding inspiration and lessons in unexpected places, like Olympic competitions
- The potential for building generational businesses, while being mindful of motivations
- Balancing work ambitions with being present for family
- The value of working with people you care about, while setting appropriate boundaries
The hosts demonstrate how seemingly unrelated topics like stock market moves, sports, and parenting can offer valuable insights for business and life. Their candid discussion highlights the complexities of decision-making in both personal and professional contexts.