The Next Billion

The Louisiana Purchase Tactic to Buy a Business for $0

Sharran Srivatsaa — Mon, 31 Aug 2026 14:03:07 GMT

It was 1803…

Two men were sent to Paris on a mission to buy America a city.

But they didn’t come back with a city… they came home with half a continent.

This deal only happened because of a secret strategy these two men used.

But without this strategy, America as you know it… would not exist…

And this strategy is something the history books and headlines have never published before that could help you buy a business for no money today.

To discover all the secrets behind the Louisiana deal, I break them all down in episode 4 of my show, Billion Dollar Deals.

So here are the secrets behind the Louisiana Purchase that you can use to buy a business for $0.

Now to understand this deal we need to go back to America in 1803.

At the time, America was far from the empire you see today.

It was just 17 states all arguing about what the government was allowed to do. And it had only been independent for 27 years.

President Thomas Jefferson and his government were brand new… every rule made was a first… and there was a power struggle over who made the decisions:

Jefferson or the individual states.

But towards the west of America, something was happening that the government couldn’t control…

A growing population of people was moving further into America.

And they didn’t care what the politicians in Washington were debating.

But this growing population was producing food and goods with no easy way to sell them. They were completely disconnected from the rest of America.

This became a serious problem for the Jefferson government because of 3 reasons:

If the West couldn’t trade with the rest of the country… it had no reason to stay as part of America.

The West would follow whoever controlled the trade routes.

America would lose a massive part of its new and vulnerable country.

And so the people in the West started to follow the rivers…

They were heading for one city that was at the center of everything… New Orleans.

Because of its strategic position New Orleans was the future of American trade and the invisible trigger for this entire deal.

But there was just one problem…

America didn’t control New Orleans… France did.

Every grain. Every barrel. And every single dollar moved through New Orleans.

But France controlling New Orleans wasn’t just a political problem… it threatened the entire future of America.

Because France was a rising empire under Napoleon’s reign… he wanted to rebuild the French Empire in America.

This started to worry the new American government.

But Thomas Jefferson’s response to this new situation would make you think he was the coolest dude in America.

He didn’t panic or make a public scene. Instead, he sent two men to Paris with one mission:

To negotiate with Napoleon for the port of New Orleans.

These two men were Robert R. Livingston and James Monroe.

And Jefferson gave them a $10M budget to get New Orleans.

But Livingston and Monroe didn’t just come back with New Orleans…

They came home with something that would change history as we know it today… Louisiana.

You see, Napoleon was asset-rich but cash-poor. Meaning his land was worth millions, but he couldn’t spend land.

He couldn’t pay soldiers with miles and rivers. And he couldn’t fund wars with land he couldn’t even defend.

So he decided to sell New Orleans to America for an easy payday.

But he didn’t just sell New Orleans…

He sold America the whole of Louisiana.

Napoleon’s French Treasury Minister, who controlled the money, sat down with Livingston and offered him all of Louisiana for $15 million.

But behind this signed deal, the politics, and the $15 million price tag is a secret deal strategy…

This strategy explains exactly how the deal that changed America forever was actually closed.

But for over 200 years, nobody has broken it down… until today.

And to understand exactly how it works, we need to use the third part of my Deal DNA: price and terms.

History still talks about the famous $15 million price tag that closed the deal.

But this $15 million price tag isn’t what America actually paid…

This price tag had a 4-part price chain that isn’t talked about in your history lessons.

Part 1: The agreed price of $15 million.

Part 2: $11.2 million of this $15 million wasn’t paid in cash… it was paid in government bonds.

This means America had basically made a pinky promise to buy the land that would double the size of the continent.

Part 3: Assumed liabilities from France.

France also had trade debts with the American government.

They already owed American merchants millions for ships and cargo seized at sea.

So America absorbed France’s debt and paid its merchants as part of the deal structure.

This is called assumed liabilities.

Part 4: The land.

When America asked France exactly what rivers, boundaries, and land they were buying… France didn’t tell them.

And this was deliberate.

Why?

Because it would waste more time when they wanted to close this deal as fast as possible.

But rather than let this border confusion block the deal, Monroe and Livingston accepted it…

They agreed to the deal that was in front of them.

But there was one factor in this deal that made sure it was finally closed.

And to find out exactly what this factor is… We need to use the final part of my Deal DNA: The X factor.

And the X-factor in this deal is what I call…

The Founders Fund.

It uses the same financing principles that businesses use in acquisitions today.

These are the same principles that you can use to buy a business without all the cash up front.

Here is how it works:

As you now know, America didn’t have enough cash to buy Louisiana outright.

So they borrowed the money from France to do it… this is called seller financing.

So how does this work?

If you, as the buyer, didn’t have all the money to buy the company… you would generally go to a bank and get a loan.

And in this case, the seller becomes the bank. So instead of making payments to the bank, you just make payments to the seller from the operating cash flow of the business.

So let’s say you wanted to buy a business. But you don’t have the money to buy it.

You could take out an SBA loan or a commercial bank loan.

This means the bank gives you the cash and you can use it to pay the seller.

Now, the banks will still underwrite the business to make the loan.

But this is actually a good thing for a few reasons:

The banks are in the business of lending money to do deals like this.

You still don’t pay any money out of pocket for the business.

And you can ideally just use the operating profits of the business you bought to cash flow the entire deal.

But this still leaves us with a few problems…

There will be situations where a seller won’t always want to seller finance.

And you, as the buyer, may not have the cash needed in order to buy the business.

So what do you do?

You don’t pay the seller.

Instead, you do 3 things:

You borrow from the bank
You repay the bank over the next 10-15 years
And this is often using the cash flow generated by the business you just bought.

So now you have multiple ways to buy a business for zero dollars out of pocket…

And so, this is why you don’t always need cash up front because you could combine different financing strategies to get the seller paid and buy the business that you want.

And this is exactly how the world’s biggest land deal ever was closed.

The same Founders Fund that built America… can be used by you… to buy and build a business for zero dollars up front.

How to Fix Your Focus in One Day

Sharran Srivatsaa — Sun, 30 Aug 2026 16:01:54 GMT

I believe that to do great things, you must do fewer things. That mastery comes from singularity of focus.

But today, we live in a world that’s full of distractions.

With short-form content ruining people’s attention spans, dopamine hits from social media, and shiny object opportunities everywhere.

And so focus has become one of the most valuable assets very few people have.

That’s why, to help you create singularity of focus in your business and life I’ve put together my 3 focus frameworks.

I’ve used these exact same focus frameworks to help me build two billion-dollar businesses and now build a third with my best friends Alex and Leila Hormozi.

Starting with…

Focus Framework 1: Creating tomorrow, today

My dad taught me this habit that changed how I plan my day forever.

Every night after dinner, he’d open a leather journal and do two things:

Write tomorrow’s date
And list everything he’d do the next day

He called it: “Creating tomorrow, today.”

He never missed a night.

In fact, his ritual taught me more about focus than any self-help book.

Now before I end each day, I design the next one. I don’t close my laptop until every last task is crossed off my list.

So how can you apply this?

Map out exactly what you’re going to do before the day begins and write it down somewhere. Every task, no matter how small it may seem.

Otherwise, distractions and other people’s priorities will fill your day for you if you don’t.

But here’s the thing:

Without this next framework, you won’t know what your priorities are that you need to be focusing on…

Focus Framework 2: Zones & Bones

Think of your calendar as an investment plan.

You are the investor, time is your capital. Now in your investment plan, you have 2 things:

Zones: this is where you invest your time.

Think of zones as different ETFs or stocks you would invest your money in.

Bones: this is how many hours each zone gets.

Bones is like deciding how much money goes in each asset. And so now you measure the return each zone gives you back.

Let me give you an example:

Let’s say your Work zone got 60 hours last week.

The return is what those hours actually produced for you. It might have been new deals being closed, funnels being built, or relationships created.

Your Family zone got 15 hours. And your return there is trust, connection, and being present.

Your Personal zone got 10 hours. And it pays you back in energy, health, and overall happiness.

This is exactly how I split my time into 3 different zones: Work, Family, and Personal.

And my rule is that these zones all stay separate.

When I’m in the work zone, I only do work. When I’m in the family zone, I’m with only my family.

And when I’m in the personal zone, I’m only doing personal tasks.

Then I will allocate how many hours (my bones) I will invest in each category (my zones) every week.

So work might get 60 hours a week, family gets 2 to 3 hours a day, and maybe personal gets 2 to 3 hours a day.

And so you start every week with clear focus on where you’re investing your time every day.

Now you might be thinking:

“Okay Sharran, this all sounds great… but how do I keep track of all the tasks I need to do?”

Well, this is where the final focus framework comes in…

Focus Framework 3: The Pull System: Capture, Triage, Execute

Let me tell you a story.

I used to have two to-do lists without realizing it.

Every day I had open loops in my mind that were constantly stealing my focus. It was like having 20 different tabs open on your computer.

And these two to-do lists were:

My actual to-do list
My email inbox

My email inbox had become a to-do list itself.

It had messages sitting from clients and tasks I needed to do, while my actual to-do list was in a separate place.

This meant all my tasks for the day lived in two separate places instead of one. And it was splitting my focus and energy in half.

And so this is when I created my 3-stage pull system.

Stage one is to capture everything into ONE inbox.

All your daily tasks get emailed to yourself in one inbox, creating just one to-do list. So they are there as a reminder when other tasks start piling in.

Stage two is triage.

This means you sort each item in your inbox into when you’ll deal with it, and do it a few times a day so the inbox never piles up.

And I sort them into 4 categories:

Today
This Week
Scheduled / Waiting
Someday

I triage my inbox 2-3 times a day. So by the end of the day it should nearly be empty.

And finally, stage three is execute.

Execute means you take the tasks marked Today and invest your time into them on your zones and bones calendar.

And so now you’re back to working from your calendar, not a to-do list.

Here’s what the pull system actually looks like:

So how can you apply these focus frameworks today?

Just pick one of the frameworks from the list and use it tomorrow to protect your focus.

It might be starting with creating tomorrow today to get clear on every task you need to do.

Then 1 or 2 weeks later, you start to run the zones and bones framework to see where your time needs to be invested the most.

But if there’s one thing you take away, make it this:

Singularity of focus is one of the greatest predictors of your success.

Because to do great things, we must do fewer things.

And this is exactly what these 3 focus frameworks help me to do every day.

And if you enjoyed this post, I talk about how to explain anything to anyone in this next one:

ChatGPT’s Deal Formula Can Make You a Millionaire (Here’s How)

Sharran Srivatsaa — Mon, 17 Aug 2026 15:15:29 GMT

In 2026, OpenAI closed a deal that could end the race for who controls the future of AI.

This deal was for a man who shaped the future of AI as we know it…

But this same deal could have been closed by any of their competitors…

And the reason it wasn’t is because of a hidden formula they all missed that could make you a millionaire.

And to discover all the secrets behind OpenAI’s deal, I break them all down in episode 3 of my new show, Billion Dollar Deals.

So here are the secrets behind OpenAI’s deal that you can use to become rich…

In January of 2026, a single person changed the AI world forever.

From his home in Vienna, Peter Steinberger made a prototype of an AI assistant called Clawdbot.

But we all know it today as OpenClaw.

The project was:

Attracting millions of visitors on GitHub.
People were suddenly rushing to buy Mac Minis
And the success of OpenClaw got the attention of the biggest AI firms on the planet

This was the Star Trek moment.

Which meant that the future of technology was here… The world would never be the same again.

But to understand why this deal happened, we need to go back to when ChatGPT hit the market.

ChatGPT launched on November 30, 2022 and 100 million people signed up in two months…

But OpenAI wasn’t the only tech giant doing AI research…

In fact, there were 3 other big companies working on AI:

Google
Anthropic
And xAI

Every single one of these four AI giants was building the exact same thing:

An AI-powered chatbot.

At first, ChatGPT was the clear leader in the AI race. They had nearly 87% of the market.

But the gap started to close…

Claude, Gemini, and Grok all continued to get more powerful as time passed.

So OpenAI’s head start from eighteen months ago was becoming an all-out sprint to figure out who had the best model.

But while the headlines were busy talking about who was winning the war for the best chatbot, they missed something critical…

In Europe, Peter Steinberger had been following the AI race closely from his home in Vienna.

And he saw an opportunity to introduce the next stage of AI.

The era of Agentic AI.

In November of 2025, Steinberger released the world’s first AI agent.

But here’s the thing:

OpenClaw also threatened every AI company’s entire business model.

And this made OpenClaw the AI agent breakthrough they all wanted, and it was all thanks to a single person.

But while all of this unfolded, OpenAI was plotting their next move. Because AI agents would give them a product nobody else had.

Which means they wouldn’t be competing on who could make the better chatbot…

Rather, who could reach Agentic AI the fastest.

But here’s the thing:

Steinberger never wanted to sell OpenClaw.

He had made it an open-source product that anyone could use.

And so now OpenAI had 2 choices:

They could either let this opportunity slip through their fingers
Or find a better way to make this deal happen

In February of 2026, OpenAI closed a deal with Steinberger.

OpenAI was able to put together a deal that would allow OpenClaw to operate as an open-source project on its own with OpenAI’s support.

This means OpenClaw would stay public…

But the person behind it was now working for them.

And for Peter Steinberger, this deal would get him closer to his goal of bringing AI agents to everyone.

But for this deal to work, price was not going to be the only factor.

And to understand why, we need to use the 3rd part of my Deal DNA: Price and Terms.

The price is what the headlines talk about. But the terms are the hidden layers of the deal they don’t talk about.

And in this deal, we have 3 layers.

Layer 1 is the acqui-hire of Peter Steinberger.

This is when a bigger company buys a small company or startup to get the main person who runs it.

But the Aqui-hire of Peter Steinberger was far from your typical deal because OpenAI didn’t actually buy OpenClaw.

This is because Steinberger made OpenClaw staying open-source a non-negotiable for his hiring.

Layer 2 is that Steinberger would work for OpenAI on a salary and lead the development of their AI agent program.

And finally, layer 3 is the overall valuation of this deal, which is an estimated

$2-$15 million.

And so most of the value from this deal comes from Peter Steinberger’s knowledge and ability to build AI agents.

But if Steinberger leaves, OpenAI loses one of its biggest advantages in the AI race.

This is why the deal only works if OpenAI can keep Steinberger long enough to transfer his knowledge and help build the next generation of agents.

And to understand how they created a deal that could make him want to stay, we need to use the final part of my Deal DNA: the X-factor.

Because here’s the truth:

Any major AI company could have executed an acqui-hire for Steinberger.

In fact, he could be working for Meta right now.

But the reason he’s not is that OpenAI saw and closed this opportunity before anyone else could…

So how did they do this?

It’s a 4-step formula that I’ve reverse-engineered from this deal, and have personally seen it create millionaires…

I call it the Speed Formula.

And once you understand it, you can apply it to anything in life.

Here’s how it works:

You need to identify an opportunity in your market.

This could be a gap in your market:

A new technology like AI
A business problem that nobody is solving
Or a combination of skills that not many people have like Peter Steinberger has

Your plan is how you bring the opportunity to life.

You’re mapping out the series of steps you need to reach the goal.

So start by asking yourself two things:

What would need to be true for this opportunity to work for me?

What are the steps that will get me there?

And only when you have your answers to these questions… can you move to step three…

Action is executing on your plan with speed.

This is how you bring the opportunity to life.

Action is doing all of the things that you’ve outlined in your plan.

But we know that not everything goes according to plan…

So when the situation changes, you don’t need to change the goal… you just need to change the plan.

But action is where nearly everyone goes wrong…

Because just like OpenAI’s competitors, they wait too long.

And this is where the final step comes into play…

Time.

A rough plan with speed will always get you much further than building the perfect plan for days or weeks.

Because the longer you wait, the more opportunity you give your competitors.

The people who actually build wealth know that speed is the shortest distance between seeing and acting on an opportunity.

This is why they compress the time between opportunity, plan, and action better than 99% of people.

This speed formula is exactly what gets you ahead.

And it’s one of the most common patterns I’ve seen that millionaires share.

So OpenAI’s deal shows you that the real value is in these two things:

Seeing something before everyone else catches on
And taking massive action

Because they:

Saw an opportunity.
Built a plan around it.
Took action.

And they compressed the time between seeing it and doing it.

This is how true wealth gets created…

Speed is king.

How to Actually Buy a Business

Sharran Srivatsaa — Sun, 09 Aug 2026 16:01:31 GMT

I’ve built two-billion-dollar businesses.

And during my time building both, I learned exactly what goes into buying a business.

But I also learned the mistakes most business owners make.

This is why I’ve put together 4 tips I wish I’d known about how to buy a business.

Starting with…

1. Always get the underlying documents, never trust a summary

The moment you’re the winning bidder, make sure you get full access to every contract. You should never let lawyers or the seller’s team hand you a summarized version.

Why?

Because you can’t properly weigh up a deal based on someone else’s summary of the paperwork.

They could hide behind confidentiality to keep a document tied to a check you’re about to write.

This is why you never underwrite what you haven’t personally read.

2. Walk every deal all the way to the end, including the ones that look absurd

Fully map out the deal before rejecting or accepting it:

What it costs to buy vs. what it actually costs to run
Who gets paid first if things go badly
What you’re actually inheriting (working assets) vs. what you’d have to rebuild from nothing

And for any distressed deal, ask yourself these 3 questions:

What would it cost to build this from scratch?
Is the business broken, or just the balance sheet?
Would fixing the brand actually fix the business?

If you can’t answer these, you prolly like the idea of the deal more than you understand it…

3. Follow the ladder: research, buy, build, syndicate.

You need to research all the costs to buy and build before you make an offer. And these costs could be:

Buying the asset
The cost to fix the business

Make sure you treat fixing the business up as its own separate cost/plan, and not something you add on after the purchase.

This makes sure you know the real cost of ownership, expected return, and what your negotiating position is in the deal.

And if you’re raising money from investors, pitch them on the improved version you’re going to build.

Because the reality is, investors want to put their money into solutions, not more problems.

4. Filter every deal through one question: can you build a platform on top of it?

Ask yourself if an asset can grow into something bigger, like:

Having content and audience: maybe it’s a YouTube channel, newsletter, or podcast built around the brand
A franchise or licensing model
Add-on acquisitions in the same niche
Or a software/tools layer that other operators would pay to use

Otherwise, it’s just an operating business. And operating businesses get operating multiples…

Small companies get small multiples. Big companies get big multiples.

And now for my business buying bonus tip I wish I knew sooner:

When you share deals with good people, they share good deals with you.

You don’t need to do any business deals alone. Sharing them with other people can take away the stress and make you more money in the long term.

Because now you’re not just doing a deal for a business… you’re investing in relationships.

And if you enjoyed this post, I talk about why I love doing deals with lazy entrepreneurs in this next one:

The Next Billion

Why I Love Lazy Entrepreneurs

The founders who worry me the most aren’t the scrappy ones…

3 months ago · 57 likes · 3 comments · Sharran Srivatsaa

How Hollywood’s $110B Deal Will Get You Ahead of 99% of People

Sharran Srivatsaa — Mon, 03 Aug 2026 14:15:12 GMT

Paramount used a playbook to close a $110 billion deal that you could use to change your life.

It’s the same playbook that just handed one family control of Batman, Harry Potter, Lord of the Rings, and almost every story you grew up watching.

And to discover all the secrets behind Paramount and Warner Bros.’ deal, I break them all down in episode 2 of my new show, Billion Dollar Deals.

I’m taking everything I’ve learned from my career at Goldman Sachs and building two billion dollar businesses to analyze exactly how the biggest deals on the planet are made.

In every episode, I’ll be breaking down the hidden strategies and risks behind deals that changed industries and built empires.

All while giving you the tactics to try them for yourself in your own life or business:

Here are the secrets behind this deal that you can use to get ahead of 99% of people…

Now back in 2018, Warner Bros. content was at its peak. They had Batman, Harry Potter, and Lord of the Rings.

And HBO included TV shows like Game of Thrones.

But at the same time, Netflix was starting to prove two things:

Streaming movies was more convenient than going to theatres.

A subscription would cost much less than a cable package.

This meant that the entire Hollywood business model was going to change forever.

And so, despite decades of success Warner Bros. was left in a place that most businesses never survive…

They had $43 billion of debt, a dying cable business that had lost $9 billion, and a streaming platform that couldn’t compete.

So after years of trying to make it work, Warner Bros. only had one option left.

They had to sell…

Two buyers stepped forward…

The first buyer was Netflix. They were the top streaming platform in the world with 325 million subscribers and $18 billion in annual content spend.

They saw this as their chance to dominate the market. They wanted the IP, the studio, the streaming platform, and HBO.

The second buyer was Paramount. Unlike Netflix, Paramount had only 79 million paid subscribers and $4 billion in annual content spend.

And their streaming platform, Paramount+, was struggling to catch up with the other platforms like Netflix, Disney and Amazon.

For Paramount, buying Warner Bros. was the solution they were looking for.

Because if they wanted to have a chance in this streaming war, they needed to own your childhood heroes.

But Paramount was losing the war…

They had made 7 offers to Warner Bros. and every single one was rejected.

So in December of 2025, Warner signs a deal with Netflix for:

$27.75 per share.
$82.7 billion in cash.
And the cable networks get spun off into Discovery Global.

But even with the Netflix deal signed Paramount didn’t give up… they tried again.

In January of 2026, Paramount went directly to the shareholders with their 8th and final offer…

Except this time, the offer was completely different.

Because for the first time in eight bids, Warner Bros. couldn’t say no.

And in February 2026, Warner walked away from Netflix to accept Paramount’s deal.

But here’s the thing:

Paramount didn’t just win because of the money.

They won because of a playbook that was used 22 years ago by the same family who now controls Paramount…

This deal playbook is what let them secure the biggest media takeover in a generation.

And this playbook could also help you get ahead of 99% of people…

It’s called… The Ellison Squeeze.

The first part of the Ellison Squeeze is the initial offer, which was $19 per share.

This was to get Paramount a seat at the table so they could bid on Warner Bros.

The second part is the squeeze.

This is where Paramount changed their offer based on the data they were gathering.

Remember, Paramount was turned down 7 times during this process. So each new bid was data they could use to get closer to a final number.

And so, the $19 per share bid would increase dramatically with every bid that was made to secure this deal.

Until the final price per share was $31 or about $110 billion including debt.

Now the 3rd part of the Ellison Squeeze is called the board bypass. The board bypass uses a hostile tender tactic.

This is when a public offer is made directly to shareholders instead of the board to buy their shares.

But the interesting part about this is that the offer isn’t even designed to be accepted.

It’s designed to get rejected.

The hostile tender offer being rejected forces the shareholders to question why the board hadn’t brought this deal to them during the bidding process.

But the deal wasn’t closed just yet…

Paramount still had the legal wall to overcome in step 4. Which means you do whatever it takes to get around the contracts.

For Paramount, this was writing the $2.8B check to Netflix to absorb Warner’s breakup fee.

But even with the legal barrier gone, there was still another part they needed to remove…

The board could still claim, “You can’t actually fund this deal.”

This is where the Ellisons used step 5… the certainty weapon.

Paramount did this with the personal guarantee of $40 billion worth of Oracle stock from Larry Ellison.

And only now are they ready for the 6th and final step of the Ellison Squeeze… the internal collapse.

You squeeze the board with pressure until it breaks from the inside out.

Everything in the Ellison Squeeze leads up to this moment.

And Paramount executed it perfectly…

They were the underdog in this story.

But each time they got rejected, they used it as data to determine what they did next. They were resilient and never gave up.

Which proves to us that sometimes, you might only be 7 no’s away from the yes that gets you ahead of 99% of people.

You just have to keep going…

So let me give you an example of how you can use the “Ellison Squeeze” right now.

Maybe you’re trying to land your dream job, so you start by making your opening offer.

But they say they’re not hiring right now.

Now what if you proposed a start date that was three months out instead?

And with every rejection, you keep reducing the risk to make it look even better for them.

While this may be aggressive, you could bypass the hiring manager and cold email the CEO with your no-brainer offer.

And if the contract is the issue, you could offer to do a trial project first to remove the risk and create the certainty they want.

Because at this point:

You’ve removed almost all the risk
Given them certainty
And created a near-perfect offer for them

This is how you could use the “Ellison Squeeze” to get almost anything you want in life.

Just like the Ellison family and Paramount did…

You treat each of the 7 no’s as an opportunity and not a door being closed on you.

How to Speak so Clearly People Think You’re a Genius

Sharran Srivatsaa — Sun, 02 Aug 2026 16:01:21 GMT

When I first came to the US, I had a thick Indian accent and was told I’d never get employed anywhere if I couldn’t learn how to speak.

At the time, I was working as a janitor, scrubbing floors and cleaning toilets to pay my way through school.

But here’s the thing:

I couldn’t afford a speaking coach. I was a janitor barely making ends meet.

So I taught myself how to speak properly, but it wasn’t from a speaking course…

I checked out Tony Robbins tapes from the public library and listened to them every night as I mopped floors.

For 6 months, I mopped floors with Tony’s voice in my ears.

The Sony Walkman became my English teacher…

(I still speak loudly today because Tony yelled throughout the programs I listened to.

My wife has been asking me to turn down the volume for 18 years…)

20 years later, I started doing keynote speeches. Everything was going great, but I started noticing something…

Everyone said they loved my talks, but they weren’t inviting me back to speak.

I was getting people to listen, but they weren’t remembering.

And so, in a full-circle moment, I paid $50,000 for Tony Robbins’ speaking coach.

What I learned from him helps me with all the presentations I give today, and I’ve even given a TEDx talk.

So here are my 3 favorite tips to help you explain anything to anyone that I learned:

Tip 1: The “1,2,3, too many” rule.

One, two, three, too many because as soon as you get to the fourth topic, item, or story you’re like:

”I forgot the first three!”

Here’s why:

If you give people more than 3 concepts, they remember nothing.

And so, anytime you’re explaining something to anyone, keep it to three things.

But here’s the thing:

I still couldn’t get people to remember what I had told them…

Especially when it was more complex topics.

This is why I always use tip number 2 in my presentations to brand what I’m teaching into people’s memories…

Tip 2: Put your ideas into “Geometric shapes.”

This could be triangles, circles, or squares.

Why do you use shapes?

Because it lets the brain take a snapshot of the information and you know
which goes in what box when you’re speaking.

So let me give you an example.

At Acquisition(.)com we have three values:

Unimpeachable character
Sincere Candor
Competitive greatness

Now if I just said those values to you once, you’re probably not going to remember them.

But if I put them in 3 circles…

Your brain’s going to have a much easier time remembering them.

But these visuals only work for the audience if you’re giving a presentation, not a speech.

So now I needed a way to make complex ideas simple without relying on visuals…

And I learned this final tip from a kindergarten teacher that lets me explain any concept to anyone.

Tip 3: The “4-Mat” Technique

4-Mat has four frames:

Why, what, how, now.

The why frame is, “why is this important right now?”

Let me give you an example:

Let’s say I’m talking about global warming and it’s important right now because all the rainforests are dying.

Now the second is the what frame.

The what frame is, “Well, there’s four pieces that affect global warming.”

And then I say, “Piece one, piece two, piece three.”

That’s the 10,000-foot view of everything.

So now it’s the how frame.

“Let me tell you how each of these pieces are affecting you.”

And the final one is the now or the next. What do I do with all this information?

“You don’t have to remember anything that I said. All I need you to do is to turn off your air conditioning at 6 pm.”

That is the one thing. What is the one domino that I kick to make them remember, like an action step.

By this point, they feel so much more engaged with you because they’re like,

“Oh yeah, he’s answering every inbuilt objection that I have.”

Why should I listen to him? Oh, because it’s important.

What is this all about? Oh, it’s got four pieces.

How do I actually do that? Oh, he just told me.

Man, there’s too much. What should I do? Oh, just do this.

Why, what, how, now.

Now you have my favorite 3 communication tips you can use in your next conversation with a friend, a business partner, or in a meeting.

1,2,3, too many
Put your ideas into geometric shapes
4-mat: why, what, how, now

So how can you apply this today?

Just pick one of the tips from the list and use it in all your conversations for the next week.

Then once you feel comfortable using that tip and you’ve developed the habit, do the same for the next tip.

But the biggest gift Tony gave me wasn’t just how to speak…

It was how to be remembered.

This is exactly what these 3 tips will help you do as well.

And if you enjoyed this post, I talk about how to become your own bank in this next one:

The Next Billion

How to Become Your Own Bank

How do the wealthiest people in America buy things without ever touching their own cash…

a month ago · 42 likes · 1 comment · Sharran Srivatsaa

How to Become Your Own Bank

Sharran Srivatsaa — Sun, 26 Jul 2026 16:03:14 GMT

How do the wealthiest people in America buy things without ever touching their own cash?

You see, I spent years at Goldman Sachs seeing the strategies and tactics behind how they do it…

And now I’m revealing them to you…

I call it the “Bank of One” and it has 4 steps you can use today.

Here’s how it works:

Step 1: Earn

Earning income gives you the building blocks to work with.

But income doesn’t build real wealth on its own.

And it was at Goldman Sachs that I learned this lesson…

I thought getting a $1M fee from Goldman Sachs as a young banker was a big win.

But my client completely shattered my belief…

At the closing dinner of a $100M deal, they turned to me and said:

“You would have to do 100 deals like this to make what I made with this one.”

But I made sure I wouldn’t have to do 100 deals to turn income into wealth…

And it was using step 2 that helped me to do it.

Step 2: Buy

Every dollar of earned income you invest in an asset becomes future borrowing power.

This means the more assets you own, the more you can borrow against.

Because banks and brokerages will lend against assets they consider stable and valuable.

And access to cash is one of the most important things you can have for both investing and financial security.

Now this is where the Bank of One really starts to take shape…

Let me tell you a story:

In 2018, I bought a duplex for $350,000 and I put $70,000 down as a deposit.

My $70,000 was now invested in an asset that could appreciate in value, generate rental income, and be borrowed against later.

But for the other $280,000, I didn’t pay it with cash… I used step 3.

Step 3: Borrow

Borrowing money can be hard to access, which is exactly why most people never get to this step.

Because the truth is, banks don’t just lend to anyone… they lend to people with collateral.

Collateral is a valuable item that a lender can seize from a borrower if they can’t repay their loan.

This could be assets like your house or your stock portfolio.

But here’s the thing:

The bank doesn’t want your house or your portfolio… they want interest.

Taking your collateral is the last thing they want because they’d much rather the steady cash flow from interest.

So as long as you own stable assets, you’re exactly the kind of borrower they want.

Just like the duplex I bought in 2018 for $350,000, which had now grown in value to $550,000.

Now I could have sold it and cashed in on the $200,000 it had appreciated by.

But that $200,000 would’ve also been taxed to death.

And so instead of selling, I did a cash-out refinance at 75% loan-to-value.

This means I borrowed $412,500 (75% of the value) from the bank, paid off the original mortgage, and walked away with roughly $132,500 in cash that was completely tax-free.

How?

Because a loan isn’t income.

So here’s how you could apply this:

You borrow against the asset’s growth instead of selling it
You get tax-free cash
You still own the asset while it keeps appreciating

Let me be clear: This is NOT financial advice.

Always speak to an expert because what works for me isn’t guaranteed to work for you.

Now even if you borrow against your assets to buy more, this final step is the one that decides if those new assets in your Bank of One grow or die…

Step 4: Compound

Albert Einstein once called compounding the eighth wonder of the world.

But now you’re not just compounding your income… you’re compounding:

Assets

This is your properties, stocks, and businesses.

Let’s go back to the house example.

If you own a $400,000 house and every year it appreciates by 5%, that’s $20,000 in year one.

And so, in year two it’s now growing from a $420,000 base. This is compounding in full effect.

Ability to borrow

This is your collateral that gives you access to bigger loans.

Now, as the house grows in value your borrowing power grows with it.

At $400,000, a bank might lend you $300,000 against it or at $500,000 maybe it’s $375,000.

Capacity to leverage capital

This is your ability to use borrowed money to acquire even more assets.

So now you use the $300,000 in borrowing power from the bank and buy a second property.

The second property starts appreciating and compounding too, which creates its own borrowing power.

And these assets become collateral for the next round of borrowing to buy more properties if you want.

This is the Bank of One strategy in full effect…

Use your income to buy assets.

Use your assets to create more borrowing power, which then gives you more capital to use.

Then you buy more assets, which creates even more borrowing power to buy bigger assets.

Meanwhile, every asset you own is growing through the magic of compounding.

Again, this is not financial advice.

It’s just to show you how the wealthiest people in America grow their wealth without ever touching their cash.

They spend their lives creating access to cash they can pull from 24/7, without selling anything.

And this access is only built through their assets.

This is exactly what the “Bank of One” strategy creates for them… and it’s exactly what it could give you too…

Now instead of only borrowing or relying on the bank for money… you become your own bank.

But most people today are still listening to misinformation from viral financial advice, not these proven strategies like the Bank of One.

That’s why I put together a guide to help you see what good financial advice actually looks like and the bad advice to run away from below:

The Next Billion

Why Finance Advice Goes Viral When It's Wrong (And Gets Ignored When It's Right)

Did you know that 50% of Gen Z learns about money primarily from TikTok…

2 months ago · 40 likes · 3 comments · Sharran Srivatsaa

How Messi’s Genius $1.5B Deal Could Make You Rich

Sharran Srivatsaa — Mon, 20 Jul 2026 14:21:06 GMT

Lionel Messi has just played in his 6th World Cup. And he holds the record for the most World Cup matches ever played.

But the world only talks about what he does on the field. So they missed this hidden deal when he signed with Inter Miami in 2023.

And to discover all the secrets behind Lionel Messi’s deal, I break them all down in episode 1 of my new show, Billion Dollar Deals.

I’m taking everything I’ve learned from my career at Goldman Sachs and building two billion dollar businesses to analyze exactly how the biggest deals on the planet are made.

In every episode, I’ll be breaking down the hidden strategies and risks behind deals that changed industries and built empires.

All while giving you the tactics to try them for yourself in your own life or business:

Here are the secrets behind his deal that you can use to build your own wealth…

It was the summer of 2022. The MLS was still a league where some of the best European players went to hang up their cleats.

But the MLS wanted to change that. So in June 2022, they made their biggest bet to date:

A ten-year, $2.5B broadcasting deal with Apple TV.

This meant all MLS games would finally be on one platform around the world. But this wasn’t a typical broadcast deal.

The MLS had committed to one platform in an all-or-nothing deal. And nobody else in soccer history had ever done this before.

But here’s the thing:

The deal only made sense if enough people paid for Apple TV in order to justify the $2.5B bet.

This is why the MLS needed the world’s attention to make the deal with Apple worth it. But Apple wasn’t the only one placing bets on the MLS…

Adidas had just renewed its $830 million MLS kit deal for the next 6 years. Adidas was now the league’s apparel partner until the end of the decade.

And this meant they’d get a percentage of every jersey and piece of merchandise sold.

But they’d also need a name big enough to sell millions of jerseys...

So now the MLS, Inter Miami, Apple, and Adidas needed someone big enough to make people want to watch American soccer.

A player with the kind of magnetic pull that would have people paying a monthly subscription just to watch him play.

The kind of player who would have soccer fans from around the world buying his jersey…

They needed Lionel Messi.

In June 2023, Messi became a free agent, and he was free to sign with any club without a transfer fee. This was only the second time in his career that he would be a free agent.

Now the entire soccer world was glued to their phones, waiting to see where he would go next...

In January 2023, Saudi club Al Nassr signed Cristiano Ronaldo on a reported $200M-per-year deal. And now two other Saudi clubs wanted Messi in the league as well.

Why?

Because they wanted to use Messi and Ronaldo to clean up their global image and make a World Cup bid. So two Saudi clubs made an offer to Messi:

$400M per year from Al Hilal
Or $1.5B in total from Al-Ittihad.

But Jorge Mas, the managing owner of MLS soccer team Inter Miami, had one of the only things that could make Messi turn down a $1.5B deal…

He could offer Messi equity.

Messi had spent twenty years as the most valuable “employee” in soccer. But he never had an ownership stake.

That’s why the only right choice for Messi was Inter Miami. So on July 15, 2023, Messi officially signed with Inter Miami.

And in just 3 years, Inter Miami’s valuation more than doubled to $1.4 billion. They had added over $800 million in value and proved that the Messi effect was real.

And this is where the real financial genius of Lionel Messi is shown. The price is what the headlines talk about.

But the terms are the hidden layers of the deal they don’t talk about. And in this deal, we have 3 layers:

Layer 1 is salary, which we know is $20.4M

Layer 2 is revenue share. This is the percentage of what you’re paid every time the business makes money.

And finally, layer 3 is equity.

This is what Jorge Mas used to beat the $1.5 billion Saudi offer. It was ownership in a growing, potential billion-dollar team.

And this is what completed Messi’s deal. It’s what I like to call…

The Founder’s Contract.

Messi was willing to take a 96% reduction in base salary and a 10-year horizon to build his ownership. You can do this with deals that can make you rich too, just like Lionel Messi.

But in order to do this, you should do these 3 things:

1. Get high-income skills that can get you a higher salary base.

This could be building AI systems and automations for companies today that save them money and make them more efficient.

2. Be willing to trade skills for performance-based comp.

Meaning lower guaranteed salary, but more bonus if you do well. This could be negotiating a share or a cut of the money you save the company.

Let me give you an example:

Let’s say you cut $500,000 in costs and 2% of that comes back to you… that’s already $10,000.

3. The biggest bet you can make is like what Messi did: You deeply discount your compensation of today and trade it for long-term value that you help create.

This might be taking a salary that, on paper, barely covers your living expenses.

Instead, you take 2% equity in a startup you believe in. A few years later, the company sells for $40 million… your 2% just became $800,000.

And this is why ownership in place of a guaranteed salary is the ultimate sign of betting on yourself.

It’s the same trade Messi is making with the founder’s contract to make him even wealthier in the long run.

His bet on himself to create value for the MLS, Apple, Adidas, and Inter Miami was a big risk and a lesson in what choosing ownership over salary really means.

And his deal proves the most valuable asset on Earth isn’t being paid for the work you do…

It’s being compensated for the value you help to create.

So when you create this value, becoming rich will be almost guaranteed.

Because the truth is…

If you do more than you’re paid for, you will get paid for more than you do.

I made a show that could make you wealthy…

Sharran Srivatsaa — Thu, 16 Jul 2026 16:15:30 GMT

5 whole months in the making…

My team and I spent 5 whole months making my first fully produced show.

Why?

Because the world is changing faster than ever before…

You see, I’ve spent years seeing how the world’s biggest deals were made when I worked at Goldman Sachs and as I built two billion-dollar businesses.

And it was at Goldman that I learned the exact strategies behind the world’s biggest deals.

But I also knew there was a problem:

The strategies are locked in private boardrooms where most people will never see how they work.

And so I knew I had to find a way to share them with you.

That’s why I’m taking everything I’ve learned from my career to analyze exactly how the biggest deals on the planet are made in my new show:

Billion Dollar Deals.

The first episode premieres Monday, July 20th, exclusively on YouTube…

I couldn’t be more excited to share this with you all…

Your main man,

Sharran

Why Finance Advice Goes Viral When It's Wrong (And Gets Ignored When It's Right)

Sharran Srivatsaa — Sun, 12 Jul 2026 17:30:17 GMT

Did you know that 50% of Gen Z learns about money primarily from TikTok?

While that may not surprise you, let me tell you why this is a problem:

FINRA reviewed over 1,000 social media finance posts in 2024:

70% percent failed basic compliance standards.
55% percent hid the fact they were paid advertisements.
38% percent never disclosed the actual risks

The data tells us that the loudest advice about money is usually the worst advice about money.

Normally, I am not qualified to talk about anything. But just this time I am mildly qualified to comment on this topic because:

I have built two billion dollar companies (one of which was publicly traded on the Nasdaq), and invested in 100+ deals.
I also have an MBA with Honors in Finance (which doesn’t mean much, I am aware)
I was a private banker at Goldman Sachs and Credit Suisse.
I have advised some of the biggest influencers in the world (ironic, I know) and multiple billionaires.
I also have held Series 66, Series 6, Series 63, and Series 3 securities licenses.

Finance influencers do not optimize for your wealth… they optimize for views, and the algorithm pays them to do it. Meaning, this is not a content problem. This is actually an incentive problem.

I want to show you why that happens and how to protect yourself from it.

The Algorithm Economics Problem

TikTok’s (Instagram, YouTube etc.) algorithm does not care about accuracy.

It cares about watch time.
It cares about engagement.
It cares about shares.

A 30-second clip promising “3 stocks that will explode this month” beats a 10-minute explanation of diversification every single time.

The math is brutally simple… because confidence sells and nuance does not.

When a creator posts “leverage is the fastest way to wealth,” the video goes viral. When they post “leverage can destroy your account in 48 hours,” the video dies. Sixty-five percent of viral finance videos imply guaranteed results because nobody wants to hear “this might work if conditions hold and you manage risk properly.”

Nobody wants hard things.
They want to hear “do this and get rich.”
They want the easy button for everything.

The platform trains creators to skip the boring (yet foundational) parts… and the boring parts usually keep you solvent.

The Hidden Business Model

Finance influencers do not make money from investing.

Check this out:

Between January 2020 and April 2023, one firm paid influencers a flat fee for every new account opened using their referral link.
More than 39,400 accounts were opened through approximately 1,700 influencers.
Meaning, they often earn massive commissions from you opening accounts, clicking affiliate links, buying courses, and joining paid communities.

Their income has nothing to do with whether you make money. Their income has everything to do with whether you take action.

This creates a brutal mismatch.

If an influencer says “invest in index funds and wait 30 years,” you do not click anything. You do not open an account. You do not buy the course. The creator earns nothing. If they say “buy this stock now before it explodes,” you click, you open, you buy. The influencer gets paid today.

Sadly, you find out if the advice works in six months.

What Good Finance Content Actually Looks Like

Independent research tells us that only about 20% of finance TikToks offer genuine educational value.

The content that actually helps has three characteristics.

First, it explains compounding and time horizons… not sexy or viral, but it works.
Second, it discloses the risks. When influencers promoted margin lending without explaining margin calls or forced liquidations, FINRA fined the firm $850,000. Real advice always starts (or at least outlines ends) with what could go wrong.
Third, it teaches principles, not hot picks. While Stock tips expire, understanding how to evaluate risk lasts forever.

The problem is simple: principles do not go viral, FOMO-centric tips do.

Three Rules for Consuming Finance Content

If you learn about money on social media, I recommend following these three rules.

Rule 1: If it sounds guaranteed, its probably not true. Any video that promises “this stock will double” or “leverage is free money” is either ignorant or dishonest. Markets involve probabilities, not certainties. Real investors talk about expected value and risk-adjusted returns. A tell-tale sign of a fake-guru is talking about guaranteed wins.

Rule 2: Ask yourself who benefits from this advice. 55% percent of influencer finance posts failed to disclose they were paid advertisements. Before you follow any advice, ask: Does this person make money if I do what they say? If yes, its safe to assume the advice is insanely biased.

Rule 3: Verify with boring sources. If you see an interesting strategy on TikTok, go look it up somewhere slow and boring. Read the Vanguard white paper. Check the academic research. Talk to your financial advisor who is legally required to act in your best interest.

Social media is good for discovering ideas, unfortunately it is terrible for making decisions.

Remember this:
Finance influencers are not the problem. They are the magic mirror that shows you what you want to hear. Not what you need to know.

If you liked this post, you’ll like this one too:

The 5 True Money Milestones

Sharran Srivatsaa — Sun, 05 Jul 2026 17:06:15 GMT

Most people hear about money milestones and think one of two things:

I should have a house, a retirement account, and a family car at this age
I’m so behind where I should be in life compared to everyone else

But here’s the thing:

These aren’t money milestones… these are just expectations created by society.

That’s why I’m going to give you the 5 real money milestones to focus on. And these milestones have nothing to do with what you should own at every stage of life.

They’re goals and systems to aim for that help you create wealth that lasts.

Starting with…

Milestone 1: Active Income Beats Monthly Expenses

This milestone has two parts:

Reduce your lifestyle expenses so they don’t increase every time your income does
Find the single most valuable skill you can develop

The skill you develop can do a few things, but you either use this skill to sell into new services or products to your customers, or you stack the new skill on top of your existing ones so that you can increase your base earning income.

Doing these two things will create separation from your lifestyle expenses and help you get your active income greater than your monthly expenses.

So once your active income is higher than your monthly expenses… you need somewhere to put it.

And this doesn’t mean running your life out of a checking account.

Instead, you use money milestone 2…

Milestone 2: Build a Money Distribution System

This means you run all your money through a quarterback account.

Its only job is to distribute cash.

Money comes in, hits the quarterback, and gets sent where it’s supposed to go.

From here, it splits automatically into four buckets:

Expenses for monthly needs
Taxes if you’re a business owner (skip this if you’re W-2, it’s already withheld)
Giving because generosity is a muscle you train now (even $25 a month)
And Surplus, which takes the rest so you can watch it grow and decide where it goes next.

The quarterback doesn’t hold money, just like its job isn’t to keep the ball. It decides where it goes.

But the quarterback still won’t help you if you’re sending the money into accounts that are getting taxed to death…

And this is when you need milestone 3…

Milestone 3: Get Strategic About Asset Location

This is where you start to decide which accounts you use strategically.

Asset location matters because not all accounts are created equal.

Some give you tax breaks today. Some give you tax-free growth later. Some give you access anytime. And some lock your money up for retirement.

The goal is to place your money where it can do its job best.

So let me give you some examples:

Max your 401(k) if there’s an employer match. This is literally free money. If you’re a business owner? Look at a SEP IRA or a pension plan (individuals look at a Roth IRA)

Now the HSA is a triple threat because it’s very rare to get tax benefits three separate times:

You don’t pay tax on money going in.
It grows without being taxed.
And you don’t pay tax when you pull it out either (as long as it’s for medical costs.)

Finally, a taxable brokerage account. This is a normal investment account with no special tax perks, but it has no restrictions either. The reason you want this is liquidity. It gives you access to money anytime without penalties, unlike a retirement account that locks up funds until you’re older.

But without milestone 4, your money could be sitting in the right accounts but it might be locked up until retirement…

Milestone 4: Manage Your Cash Like It Has a Job

Every dollar that sits in your checking account is an employee you’re paying to sit in a chair scrolling TikTok.

It needs a job.

And the truth is, a high-yield savings account is the bare minimum.

But there are other options out there to manage your money and have access to cash.

First, certificate of deposit ladders. This locks up your money for a set period of time in exchange for a better interest rate than a savings account.

The ladder part means splitting your money across CDs with different end dates, for example, 3 months, 6 months, 1 year.

Why does this matter?

Because now you don’t lock it all up at once. So money is available, and you still capture the higher rates.

A second option is whole life insurance as a cash tool. Most people think of life insurance as just a payout when you die.

But what they don’t know is that whole life policies build up cash value over time that you can borrow against or access while you’re alive.

And so when it’s used with a strategy, whole life insurance becomes another place to get access to cash.

Finally, you could use a cash portfolio of ETFs.

This could be SCHD, SCHO, TIPS, and SGOV.

So instead of leaving all short-term money in a checking account, someone might use these ETFs to earn yield while keeping the money relatively accessible.

But here’s the thing:

Once every dollar has a job, you still have one more money milestone to reach…

Milestone 5: Your Money Starts Working For You

This is the milestone everyone wants to get to first.

Investing.
Real estate.
Passive income.

But this milestone only works when the first four are already in place.

In America there are only 2 ways that create wealth. Owning a business and owning real estate.

I call them the Golden Stairways…

These are two of the most powerful paths to wealth because they give you ownership. And ownership is where your money starts to work for you.

If you own a business, your money can work through systems, products, people, and customers. You are no longer just earning from your own effort. You are building something that can produce income, grow in value, and create opportunities beyond your personal time.

If you own real estate, your money can work through rental income, appreciation, equity, and leverage. The asset can pay you while you own it, grow while you hold it, and become more valuable over time when bought wisely.

Now, if you don’t own a business or real estate, that’s totally fine. You can still use the Golden Stairways, it just looks a little different.
It looks like TIGA:
Tiny Income Generating Assets. These are smaller assets that produce cash flow and teach you the habit of ownership.

For example, Dividend paying ETFs, which give you a simple way to own a diversified group of investments that pay you dividends are a great way to start making your money work for you…

The 5 money milestones are how you make sure time is turning your money into wealth.

But these money milestones only work if you know how to avoid the 4 money monsters…

Because these money monsters are eating most people’s wealth before it’s created.

And I covered exactly what they are and how to defend against them in this post:

The 4 “Money Monsters” Eating Your Wealth

Sharran Srivatsaa — Sun, 28 Jun 2026 21:50:31 GMT

Most people believe their money has one enemy: a down market.

But here’s the thing:

A down market is the least of our worries.

Because there are 4 money monsters stealing our wealth, whether it’s an up market or a down market…

And it wasn’t until one night, when I was staring at a spreadsheet, that I saw the damage these 4 monsters were doing to my wealth…

I’d known what they were for 25 years, but not how much they’d taken from me.

And now I’m going to help you defend against them, so you don’t make the same mistakes as me to protect your wealth.

Starting with the monster you can see but can’t stop…

Monster 1: Inflation

Inflation runs at whatever rate the economy sets.

Now, let’s say you put $100,000 in a savings account that earns 1.5%.

But if you run 4% inflation against this same account for 20 years…

The statement shows a balance of $134,600. But what the money buys has shrunk by $84,400.

Because inflation at 4% for 20 years means prices roughly double. So you need around $219,000 in the future to buy what $100,000 buys today.

This is why every dollar that earns below the inflation rate pays a silent tax.

And this silent tax doesn’t show up on your bank statement...

But the good news is that you have three moves to beat inflation:

List every account you own this week and write the real return next to each one: your rate minus your local inflation rate

Any negative number is a confirmed loss you’ve been calling safe.

Stop benchmarking against nominal return and start benchmarking against real return.

Here’s what this actually means:

The number on the screen is not your return… what it buys is your return.

Put every dollar you won’t need for five years or more into assets with a long-run return above inflation

This could be the S&P 500. It’s returned about 10% nominally and 6% in real terms over 100 years.

But beating inflation still won’t protect you against monster 2…

This is the enemy nobody teaches you about…

Monster 2: Taxes

Taxes are the monster the mainstream financial advice keeps quiet about….

Why?

Because even they don’t understand how they actually work.

And most importantly:

They have no idea how to defend against them.

Now for most high earners, taxes are the most expensive of the four monsters.

An employee making $500,000 in W-2 income keeps roughly $315,000 after federal tax.

But an investor realizing $500,000 in long-term capital gains keeps $400,000.

It’s the same income on paper, but an $85,000 gap every year. So here are the three moves you can make to beat taxes:

First, max every tax-advantaged account you have before you put a dollar into a taxable brokerage: 401(k), IRA, HSA, Roth.
Hold every appreciating asset longer than 12 months before you sell.

Short-term gains get taxed as ordinary income up to 37%, but long-term gains get taxed at 20%.

When you need cash, borrow against an appreciating asset instead of selling it.

It could be using a securities-backed line, a margin loan, or a home equity line. These loans aren’t taxable events.

But this next money monster pays a heavy tax from inside your head.

And the truth is, no tax strategy or inflation hedge can touch it…

Monster 3: Behavioral interruption

The DALBAR has tracked investor behavior for 30 years.

And over those 30 years ending in 2015, the S&P 500 returned 10.35% a year.

But the average equity investor in the exact same market… over the exact same years… earned 3.66%.

Crazy, right?

Because if that was $100,000 over 30 years at 10.35%, it becomes $1.92 million.

But at 3.66%, it becomes $293,000.

This is a $1.63 million difference, and not one dollar of it came from a bad market or a bad pick.

Instead, it came from one thing… Behavior.

The behavior could be:

Panic selling
Lifestyle creep that’s funded by liquidating assets
Or moving money on the back of a headline

Now let’s talk about how you can beat behavioral interruption:

Separate your long-horizon accounts from any money you can reach emotionally

This should be a different institution from your checking account, like an app off your phone to create friction between the money and your hands.

Write a one-page investment policy statement before the next downturn.

Here’s how to do it, ask yourself:

What is this money for?

What’s the time horizon?

What’s the target allocation?

And under what specific conditions will I change it?

Because every money goal needs a money plan, and this includes playing on the defence sometimes.

Check long-horizon portfolios once a quarter, not once a day.

The more often you see red in your portfolio, the more loss aversion you feel and the more likely you are to act on it.

So just let it grow…

But this final money monster stops your money from growing before you’ve even been paid.

It’s the worst money monster on this list because it’s the only one that happens before it reaches you…

Monster 4: Fees

Good markets or bad, fees come off before a single dollar reaches you.

Let me give you an example:

Imagine you have two options to invest a million dollars for 20 years:

A) The S&P 500

B) Or a portfolio manager

The average long-term S&P 500 return is about 10%. So after 20 years, your $1M becomes roughly $6.73 million.

Now the portfolio manager gets the exact same 10% return over those 20 years, but with one difference: a 1% annual fee.

That 1% fee doesn’t sound like a lot today, but over those 20 years?

It’s roughly $1.13 million.

This is the real cost of fees that nobody is talking about.

So what can you do about it?

Here’s three things to beat the fees:

Convert every fee from a percentage into a 20-year dollar cost.

Run it once because I can almost guarantee the number creates a different decision than seeing the percentage would.

Replace any actively managed fund with an equivalent index fund wherever the fee difference clears 0.5%, like the S&P 500
Ask your advisor in writing how they’re compensated on each recommendation, including trail commissions and fund revenue sharing.

A fee-only fiduciary charges you directly and is legally bound to act in your interest.

But a commission-based advisor is paid by the products they sell you.

This one question costs nothing, but could save you millions…

So how can you protect yourself against the 4 money monsters today?

Before you go to sleep tonight, pull up your accounts, and look for one of the four monsters eating your wealth.

Finally, make one move against it this week from the 3 tips I gave you for each one.

Because sometimes it’s not about what you make, it’s about what you keep.

And if you liked this post, I talk about the 7 biggest business and life lessons I’ve learned over the last 46 years in this one:

I’m 46. If You’re In Your 20s or 30s, Read This.

Sharran Srivatsaa — Sun, 21 Jun 2026 18:15:59 GMT

The other week, it was my 46th birthday.

So I thought I’d share my 7 biggest life and business lessons from building 2 billion dollar businesses, working at Goldman Sachs, and most importantly:

Having a beautiful family with my wife and two kids…

1. The world will give you whatever you want. You just have to ask it intelligently.

One of the questions I constantly ask myself and my team is, “What would need to be true for this to happen?” The answer to this is exactly what you need to do to get it.

2. Not giving up is the most heroic thing you can do.

When I first came to America from India, I was 17 and had next to no money. At one point, I was eating out of a dumpster on my college campus just to survive.

But two decades later, I came back to the college as the commencement speaker.

And glued to that same dumpster was a sticker of Aquaman with the quote “Not giving up is the most heroic thing you can do.” I still live by this quote today.

3. You only have to get rich once.

I’ve watched the smartest people get rich, lose everything, and spend years rebuilding from zero again. But the fact is, the skill that gets you rich doesn’t disappear even if the money does.

Because if you can learn it, it’s a skill. If it’s a skill, you can teach it.

4. Everything in life has a playbook. You just have to learn it.

When something sounds technical, I get excited. Because the more technical something is, there’s nearly always a playbook for you to follow and learn it.

5. It’s not about the exit. It’s about the options.

Most founders start their business without ever considering an exit. And it’s understandable.

They built their business for themselves, and maybe they don’t ever want to sell.

But here’s the thing: building your business for an exit isn’t about the exit itself. It’s the options it gives you, should you ever want to sell.

At the end of the day, nobody knows how they will feel in 10 years’ time.

6. Small companies get small multiples. Big companies get big multiples.

Smaller companies look fragile to investors. So the bigger you build, the more you buy, the bigger the empire and the more value you’ll get from potential buyers.

This is why you want to build big if you’re going for the exit.

7. Moat = Massive effort on the front end. Money = an elegant business model on the backend.

This isn’t some secret strategy… it’s just doing the work. Massive effort on the front end is the Moat because most people will never make the effort.

So on the backend, now the business becomes elegant and simple to run.

Let me give you an example:

Your Moat on the front end could be creating 3 pieces of content every day across all social platforms. And your backend could simply be your email list, where you sell your products.

I’m not sure what these 7 lessons will look like in 20 years time. But if there’s only one lesson I’d ask you to take away, it’s this:

“Not giving up is the most heroic thing you can do.”

Whenever I get stuck, I just remind myself of it.

And every single time, it’s given me a breakthrough.

If you liked this post, I talk about the number one way to actually master wealth creation in this next one:

Why I Love Lazy Entrepreneurs

Sharran Srivatsaa — Sun, 14 Jun 2026 16:30:56 GMT

The founders who worry me the most aren’t the scrappy ones…

Not the bootstrappers, first-timers, or the ones figuring it out on the fly.

No.

The ones who worry me the most are the smart, hard-working, capable founders.

Because here’s the thing:

Capable people build complex businesses.

Not deliberately, but because they can.

And somewhere along the way, “I can do this” becomes their reason for doing everything.

I call this the Curse of Capability.

And almost every talented founder I know suffers from the Curse of Capability.

It’s also the reason why I love investing in “lazy” entrepreneurs.

They don’t suffer from it.

The best founders I’ve ever backed have a quality that looks like they’re not trying hard enough.

But in reality, what they’re actually doing is finding the simplest path to a lot of money and walking along it.

This quality is…

Knowing how to find the easiest possible way.

That’s it.

This is their entire plan.

But when I step into complex businesses, the ones run by the hustling founders, the first thing I nearly always have to do is cut the complexity.

I remove as much as possible to simplify things.

Because I believe that to do great things, we must do fewer things.

So I’m going to give you my favorite framework that helps you simplify a business… the 1-1-1 framework.

I even broke it down on a recent podcast:

The 1-1-1 framework means:

One traffic source
One conversion method
One delivery channel

Let me give you an example:

Maybe you get leads through paid ads.

They convert on a one-on-one call.

And they deliver the work inside a community group.

But most people don’t have a 1-1-1 framework in their business.

They have something closer to a 4-3-5.

With four traffic sources they’re mediocre at, three conversion methods they’ve never actually measured, and five delivery channels no one fully understands.

So when something breaks, they have no idea where to look… they just start guessing.

They burn more ad spend, have more failed calls, and more churned clients.

Nobody wins…

But now, when something is breaking down, you go back to the 1-1-1 framework.

It helps you to find the problems fast and fix them.

This is why you want growth by subtraction, not multiplication.

And it’s why I love investing in “lazy” entrepreneurs so much.

They’ve already done the subtraction.

Now if you liked this post, then you’ll like this one too:

You Can't Master Money Until You Master This

Sharran Srivatsaa — Sun, 07 Jun 2026 22:30:35 GMT

It was September 2008, and Warren Buffett had just invested $5 billion into Goldman Sachs.

I was still working at Goldman Sachs when he made the investment.

Everyone around me in the office was panicking. The front pages were filled with news about the financial collapse.

And everywhere you looked, the numbers on each screen were an angry shade of red.

But at a time when the world was panicking, Warren Buffett did something that would change how I would think about investing forever:

He published an op-ed in The New York Times telling the entire world he was buying.

Even with the financial markets crashing all around him…

And with investors scrambling to save what they had left…

He was still investing.

This moment reframed everything I thought I knew about investing.

Because there was clearly a gap between what the 2008 market was screaming about and what Warren Buffett was doing.

And this gap has a name…

The Patience Equation: Wealth = Quality Asset × Uninterrupted Time.

I made a full video on this. But before you watch it, here’s how the patience equation works.

DALBAR tracked investor behavior over 20 years, and what they found exposes the gap perfectly:

The S&P 500 returned 8.19% per year.

But the average investor earned only 4.67%.

This was the same market and stocks, but with a completely different outcome.

Why?

Because this gap isn’t created by the stocks people picked… it’s behavior.

Behavior that breaks down into three silent leaks that drain any long-term compounding.

Starting with…

Leak 1: Movement

Ronald Read was a janitor from Vermont. He drove a used car and clipped coupons.

He died in 2014 with an $8 million estate.

90% of this was probably created after age 70. The first 50 years were just building momentum.

And he’s not alone…

Warren Buffett had 99% of his net worth built after age 56. He started at 11.

This is why the market rewards time in the market, not constant movement.

It’s the dying art of patience.

But this movement isn’t always a physical action of pulling out stocks… it’s something much deeper.

And that leads us to…

Leak 2: Interruption

Compounding only works if you never stop it. You need to leave the investment alone.

In fact, Charlie Munger said, “The first $100,000 is the hardest.”

But here’s the thing:

This interruption isn’t always financial.

Because when a deal goes sideways, the instinct is to shut everything down, pull back, and protect what you’ve made.

But this emotional interruption can be just as expensive as lifestyle inflation.

If you interrupt the money machine every time you take a hit, you never get the long-term wealth creation that compounding gives you.

Which leads us to our final leak that’s possibly the most dangerous…

Leak 3: Extraction

Extraction is dangerous because, on paper, it sounds like a smart move.

Daniel Kahneman documented this across decades of research.

Loss aversion means the fear of losing hits roughly twice as hard as the satisfaction of a gain.

This is why extraction is emotional relief disguised as strategic thinking.

It reminds me of the Stanford marshmallow study in 1972.

Kids were offered one marshmallow now, or two if they waited.

Most of them grabbed the first one.

But the ones who waited had measurably better outcomes across every dimension of their life, decades later.

Investing is the exact same test.

It’s all about your relationship with time.

Mastering the ability to sit still long enough for time to do the work is the entire game.

This is why money loves speed, wealth loves time.

And if you liked this post, I talk about the 4 biggest mistakes first-time investors make in this next one:

I Spent a Day Trying to Buy Spirit Airlines. Here's What I Found.

Sharran Srivatsaa — Sun, 31 May 2026 15:25:27 GMT

When I saw Spirit Airlines had shut down, I called my investment banker.

Then I sent this slack to my partners Alex and Leila.

My team and I spent the better part of a day building the model, walking the repayment waterfall, and asking the one question that matters in any distressed deal: is the business broken, or is just the balance sheet broken? Two very different problems. Also, two very different price tags.

I made a full video on this. Before you watch it, here is the one number that reframed everything for me.

44 million people flew Spirit in 2024.

That’s insane.

Spirit was an airline that everyone publicly hated.

The airline had already filed for bankruptcy twice
An airline that had the worst fee optics

And 44 million people still flew it.

That told me that it just needed an updated business model.

But the big question is… how do you value a deal like this?

The Deal Anatomy Framework

I run every deal I analyze through 6 buckets of my deal anatomy framework.

Here is how Spirit looks through each one.

1. Thesis Conceptually…you are not buying an airline.

You are buying infrastructure: gates, routes, FAA certifications, reservation systems, and 34 years of operational knowledge. That takes a decade to build from scratch.

2. Catalyst The window was 30 days.

After that:

Gates get reassigned to other carriers
Pilots accept jobs at Delta, United, and Southwest and are gone for years
The FAA operating certificate has to be reapplied for if planes stop flying long enough

The asset was depreciating in real time.

3. Price and Terms The opening bid is $533 million.

That gets you the assets. It does not get you an airline that is actually operational. Restarting operations, rehiring staff, rebuilding fleet leases, and renegotiating gate access is a completely separate budget on top of the purchase price.

Meaning: “Winning the auction gets what’s left of the business. The restart budget actually gets the planes in the air.”

4. Capital Stack The repayment waterfall flows like this:

Aircraft lessors get paid first
Senior bondholders come next
Other creditors follow
Equity shareholders are wiped out completely

Hunter Peterson’s crowdfunding campaign raised $130 million in pledges. His Reg A structure caps at $75 million in actual capital. Against a $533 million opening bid, that is still a $450 million gap, before the restart budget.

5. Risk The risk nobody is talking about enough: even if the auction closes, getting a new FAA operating certificate and putting planes back in the air takes 12 to 24 months. Every day in that window costs money without generating a dollar of revenue.

6. X-Factor Every airline in history has treated passengers as customers.

Spirit 2.0, if structured right, could treat them as owners.

Passengers who own the airline tend to approach things differently. They tell their friends, and tolerate things they would otherwise complain about online. Think of it as a marketing budget built into the cap table.

I kept thinking:

“If 44 million people flew an airline nobody loved, what happens when people actually have a reason to root for it?”

If you liked this post, then you’ll like this one too:

5 Rules For Meetings

Sharran Srivatsaa — Mon, 25 May 2026 01:50:48 GMT

I sit on the board of a publicly traded company.

We run a tight board process, and as I reflect on it alongside what I see inside most organizations, I want to share 5 things that will make every meeting you run more effective.

Rule 1: Treat every meeting like a board meeting.

Send pre-reads, run a tight agenda, require prepared remarks from speakers, and leave with clear decisions and clear actions. Do this for every meeting, not just the ones that feel important.

Rule 2: Meetings without an agenda are disrespectful, and that includes your 1:1s.

If you show up without one, you are saying that you did not think the other person’s time was worth preparing for.

Do better.

Rule 3: If you have a slot on the agenda, prepare to deliver it like you are being graded.

That means clear framing, tight talking points, and a document or slide ready to share and discuss. If you would not show up to a board meeting unprepared, you should not show up to any meeting unprepared.

Rule 4: Here is how you know your presentation missed the mark.

People start asking you basic questions about what you just covered, or questions come from every direction with no throughline. When that happens, stop and say: “Let me rewrite this memo and we can discuss tomorrow.”

It happens to the best of us, so do not let it drag on, because private Slack conversations about what just happened are already forming while you are bombing your portion of the meeting.

Rule 5: Pulling up a document during a meeting that nobody has seen before is bad form.

If you could have sent it beforehand, you should have.

Send pre-reads.

Here is a simple way to think about this:

How you prepare shows just how much you care.

If you liked this post, then you’ll like this one too:

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How To Raise Millionaire Kids

Sharran Srivatsaa — Sun, 17 May 2026 15:36:49 GMT

Most of our kids are not going to be rich.

Why?

3 Reasons:

School does a fine job preparing kids for employment and a poor job teaching them how to build wealth
Most parents were never taught about money either, so they end up winging it just like their own parents did.
The financial rules our parents followed like save consistently, stay loyal to one company, or count on a pension, do not apply anymore.

Just to be clear, being rich is not the goal of life.

Come on.

I recognize the importance of being a good person and cultivating qualities like work ethic, kindness, respect, and generosity.

In fact, I am not even a “money motivated” person.

But that does not mean we completely avoid helping our children have a financial advantage.

And I am not talking about making so much money yourself, that you can make them a trust fund baby.

Come onnnnnn.

I am talking about implementing a plan for yourself and for them that:

Teaches them good money skills
Gives them a legit head start
Makes them a contributing member of society

This is actually less about raising rich kids and more about raising decent kids.

I made this video to break down what I am doing for my children, and I break down the Millionaire Kids Flywheel for you.

Check it out. Watch it on 2x speed.

If you liked this post, then you’ll like this one too:

The Progress Loop: The One Email That Helps Founders Work With Advisors

Sharran Srivatsaa — Mon, 11 May 2026 03:29:57 GMT

When I became an advisor for the first time, I told the founder to call me whenever he needed anything.

He took me literally.

For the first 6 months I heard nothing. Then one Sunday night my phone rang at 10pm. He was in a cash crisis and needed a connection to a lender by morning. I helped him, but I kept thinking: I could have seen this coming 3 weeks ago if I had known what was actually happening.

That is when I understood how most founders think about their advisors. They only reach out when they need something. And the rest of the time they do not want anyone to see how stressed they actually are. Projecting calm is part of the job, but it means your advisors are flying blind, and the moments they could have helped you avoid become the Sunday night phone calls instead.

The fix is something I now call the Progress Loop.

It is a short update email you send every 2 weeks to your advisors, your investors, or anyone who is genuinely in your corner. Write it weekly for yourself. Send it every other week to them.

Write it weekly because the business moves fast and the reflection keeps you sharp. Send it every other week because unless your advisors have a meaningful equity stake, weekly starts to feel like a chore for everyone.

The Progress Loop does 3 things a quarterly Zoom call never will:

It creates a paper trail of your own thinking over time.
It shows your advisors you are doing the work, not just reporting on it.
It forces you to get honest with yourself before you have to get honest with anyone else.

The Structure of the Progress Loop

I have worked and reworked this format for 10+ years. Here is exactly how it works. (You can feed this into Ai and it will just do it for you)

1. Activities

Write down what you actually did, not what was on your roadmap.

If you spent 3 weeks in enterprise sales conversations and your stated strategy is product-led growth, a good advisor will spot that gap. You probably will not, because you are living inside it.

2. Wins

Show your progress.

Wins give advisors something to reference in future conversations and build an archive you will want when you are fundraising and someone asks what you have built.

3. Learnings

Your job as a CEO is to systematically reduce risk in your business.

The format that works:

We used to think X was true.
By doing Y, we found out X was wrong.
What is actually true for our business is Z.

For example: We used to think that getting a meeting with the VP of Sales meant we were close to a deal. By running 12 of those calls, we found out the VP almost never owns budget in companies under $50M. The actual decision maker is the CFO, and we had never spoken to one.

4. Stuck

Stuck does not mean things are hard.

Most founders skip this section because writing it feels like admitting they are failing. As an advisor, this is the first section I read, because helping remove 1 real blocker is worth more than 10 strategy conversations.

Write it as questions you are trying to answer:

How do we hire the VP of Sales we actually want when we cannot afford his base comp?
How do we produce quality content without building a full media team?
How do we find out if the new product roadmap is something clients will actually pay for?

Specific questions get specific help.

5. Focus for the Next 2 Weeks

Write down what needs to be true for you to have a good 2 weeks. Meaning, what are you going to get done before the next update?

When people you respect know what you have committed to, you organize your week differently. You do not want to show up to the next Progress Loop and explain why you did not do what you said you would.

6. Help Us With

Every Progress Loop is a small sales pitch.

Your ask has to connect directly to something already in the update. If what you are asking for has nothing to do with what you have been working on, what you learned, or what you are stuck on, it is probably not your real priority right now.

The full Progress Loop format:

Activities: what you actually worked on
Wins: proof of progress
Learnings: what changed about how you see the business
Stuck: the constraint
Focus: what needs to be true in the next 2 weeks
Help us with: a specific ask that connects to the above 5

Here is how to start:

Write the Progress Loop this week.
Send it every other week.
State the facts. Tell the truth.

If you know a founder, business owner, or entrepreneur send this to them. They will thank you for it.

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Why I told my friend not to take $67 million in cash.

Sharran Srivatsaa — Sun, 03 May 2026 16:05:49 GMT

A friend of mine is selling his company to a public company right now, and he almost handed the government $25 million of his $67 million payout without realizing it.

The investment bankers gave him two choices:

Cash + Earn out
Stock (of the fancy public company that’s buying him)

Of course he wanted to the cash.

He just had a dream of seeing 8 figures in his bank account.

When he called me about it, I explained to him why he should consider the stock choice as well.

First, there are taxes

When you take cash from a sale like this, the IRS treats it as a taxable event on the spot. My friend lives in California, which makes this particularly painful. Here is what the tax stack looks like on a $67 million cash payout in California:

Federal long-term capital gains tax: 20%
Net Investment Income Tax: 3.8%
California state tax (California taxes capital gains as ordinary income): 13.3%
Total effective rate: roughly 37.1%
Dollar amount lost on day one: approximately $24.8 million

He walks away from the closing table with about $42 million instead of $67 million, before he spends a single dollar.

But wait, there’s more:

Every time that $42 million earns interest or gets reinvested, California and the IRS tax those earnings again.
And when he eventually passes that money to his kids, anything above the $15 million federal estate tax exemption gets hit with another 40% federal estate tax rate.

Let’s be real for a second… its $42 million and it is life changing money as long as your last name is not Musk, Gates, Rockefeller, or Bezos. But it is also important to know that the the cash option is not always a clean win. In fact, it is a long series of tax events, one after another, for the rest of his life.

Let’s consider the all-stock choice

I am not a CPA or a tax attorney, I just read the tax code a lot. A section of the tax code called Section 368 may just give my friend the unfair advantage here.

Here is how it works:

Under this rule, when you trade your shares in your company for shares in the company buying you, the IRS does not count it as a sale.
You are exchanging, not selling. No tax is due at closing. Your original cost basis, meaning what you originally paid for your shares, carries over into the new stock.
The gain from all those years of building sits there waiting, but it does not get taxed until you actually sell the new shares.

My friend now has $67 million in stock in a (fancy) publicly traded company and a $0 tax bill on closing day.

That feels like a win… now what?

The Three-Part Architecture I asked him to consider

Once you have this stock, you gotta get it to work for you.

Part 1: Take 100% stock at closing. If the deal is 100% stock, 100% of the gain defers. If you take any cash alongside the stock, the IRS taxes that cash portion immediately. That cash component is called “boot.” You could negotiate for all stock and avoid the boot entirely if you can.

Part 2: Borrow against the stock instead of selling it. Most stock deals have restrictions on the shares or lockup periods. Once the lock-up period ends, you pledge your stock as collateral at a private bank or brokerage and pull out a line of credit against it.

On $67 million of public company stock, most private banks will lend 50 to 70% of the position’s value, which works out to roughly $33 to $47 million in accessible cash.
You pay interest on what you borrow, but you never sell a share.
The IRS only taxes sales. A loan against stock you still own is not a sale, so no tax is triggered. You live off the borrowed money while the stock keeps growing in the background.
Oh, and based on a few minor technicalities the interest you owe on borrowing against your stock is an expense, and therefore tax deductible.

Part 3: Collar the position to protect against a big drop. This is just a fancy way of saying… you do some financial engineering to protect your stock from going down.

A collar means you buy a put option and sell a call option at the same time.
A put option is a contract that pays you if the stock price falls sharply below a set level.
A call option is a contract where you agree to cap your upside above a certain price, and selling it generates income that offsets the cost of the put.
Together they create a price floor and a price ceiling around your stock position, which lets you hold the stock without worrying that it could collapse in value.

Just to be super clear… this is a very common thing in situations like this and a simple chat with your favorite LLM will draw out how you should do this.

The Technicality

Someone is going to hate on me, so here is the technicality.

The IRS watches collars carefully under a rule called the constructive sale rule, Section 1259.
If the collar is too tight, meaning the floor and ceiling are too close to the current stock price, the IRS decides you have essentially sold the stock without actually selling it and taxes you immediately as if you did.
To stay outside that ruling, the floor typically needs to be set at least 20 to 30 percent below the current stock price.
When this is done correctly, you hold the stock, maintain your borrowing capacity, and have real protection if the market turns against you.

There haters, feel better?

What Happens to the Tax Bill When You Die?

This is kinda the entire flex in all of this…

If my friend holds this stock and passes it to his kids, the IRS resets the cost basis to whatever the stock is worth on the day he dies.
His kids inherit the shares at current market value. The decades of deferred gain simply disappear. They can sell the shares right after inheriting them and owe almost nothing in capital gains tax.
The estate uses the borrowed money to repay the loans, and the kids keep everything else.

Compare that to the cash path:

Day one: $24.8 million in taxes
Every year after: ordinary income tax on all earnings
At death: 40% federal estate tax on everything above $15 million
What the kids actually receive: a fraction of what the stock path would have left them

The 4 Things That Can Go Wrong

Of course there are risks, and I am sure many that I am not seeing here but lets start with these…

1. The lock-up period. Most public company acquisitions require founders to hold their new shares for 6-12 months before selling, pledging, or hedging them. During that window, you cannot borrow against the stock or set up the collar. If the stock drops 40% while you are locked up, the plan starts from a much weaker position. You need to believe in the quality of the stock you are receiving before committing to this path.

2. The collar width. If the put and call strikes are too close together, you trigger the constructive sale rule and owe the tax you were trying to defer. If they are too far apart, the protection is weaker than you need. Finding the right range requires a derivatives specialist and a tax attorney working on this for you.

3. The interest carry. Carrying $35 to $45 million in loans at current rates costs roughly $1.75 to $2.25 million per year in interest. That is real money. You need to model that cost honestly against the tax savings over your expected hold period before deciding the math works for your situation.

4. Advisors who do not talk to each other. This strategy requires a tax attorney, a derivatives desk at a private bank, and an estate planning attorney. Most business owners do not have that team coordinated before the deal closes, and that crushes them.

So what did my friend end up doing afterall?

He spent a week thinking about it
He pulled a small team of experts together
And realized that he would be leaving too much on the table if he took all the cash

So he negotiated 1m off the purchase price and got the board to give him permission to pledge his stock. Meaning, he took $66m of stock instead of $67m, agreed not to sell it and only pledge it so that he could borrow against it.

Remember, it’s not what you make its what you keep.

This is not legal or financial advice. If any part of this applies to your situation, talk to a tax attorney and a private wealth advisor before doing anything. The strategy is real and used regularly by sophisticated founders. The execution details are everything.

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