Grow Your Cashflow Podcast

pascal_wagner:
All right, welcome to the Legacy Wealth podcast where we teach accredited business owners all about alternative asset funds. And today I have on the show with me, Kimberley Smith, my good friend and colleague, our former colleague from Texas, where we used to work together. Welcome

Kimberly Smith:
Thanks,

pascal_wagner:
to the show,

Kimberly Smith:
Pascal.

pascal_wagner:
Kim.

Kimberly Smith:
Thank you for having me.

pascal_wagner:
Yeah, I'm excited to have you on. It was great to great. to connect a little bit earlier. and I'm excited to share your wealth of knowledge here on the show. So to kind of get started, and to get the audience familiar with you, give me or give us some of your background and story of of how you eventually started investing in funds, or or your background in this

Kimberly Smith:
I'll

pascal_wagner:
area,

Kimberly Smith:
start with my very interesting background, but I, after I graduated from college, I started working for a family office, and really I did not grow up in a home that talked about pan on the dinner table. But we did talk about stocks a lot and active well when what we call passive versus active management, and how you know we should always put money into funds, whether it's a Vanguard Fun or Franklin Templeton, Fun. And then I entered into this world Kind of right out of the back of having having parents that were a dentist and a principal in a New York City public school. I entered this high powered investing world the day pretty much days after I graduated from college, where I was working for a two billion dollar family office that had a Macivlequite Ty event, and they created this investment office. The ultimately born funds that you may know, one is now called sculpture, but formally Sit Umpalenteer, capital. M. Addicus Jimchanos was in there And so I worked at this office that you know, really started to coin the term Active management. Um. And what I saw that they had, They were super. Everyone that worked there was super smart. I was by far the dumbest person there, but I also noticed. Um, I made a ton of money. They made these great, invested. Great invest Meant, and it made me start to have my passion for investing individually and through funds from a very young age. Even though I didn't know really what it meant, I knew these guys were making a lot of money and I saw that people, important people were giving them money to make more money, and I was like Okay, There's a thing there. You know. having professional people manage their money is way better than trying to do it yourself.

pascal_wagner:
Got it got, and then from there, So you know,

Kimberly Smith:
Yes,

pascal_wagner:
I know your background from text stars, because

Kimberly Smith:
Yes,

pascal_wagner:
we obviously worked together. Where where is the? what happened between the gap of that first job

Kimberly Smith:
And today

pascal_wagner:
and then where you are today?

Kimberly Smith:
so I joined this family, a family right after graduating from college, and I had a A B A and political science and economics, and minor bio in Spanish, And so like I said, I did not come from this world. I thought I was going to go into. I was going to be a Lobius, which technically am, I'm registered Lobius in New York, in California, but for different reasons for fun raising reasons, but I thought that was the world I was going to enter, And then I kind of got thrown in To investment world, so I worked there for several years, but I said most of my career at Head funds, and before that like I did a short trade at short stint of trading coffee, sugar, Coco, and energy for a thousand persons trading has, And but then I spent most of the bulk of my career in a hedge fund to specifically where I really fell in love and saw the benefit of Active management. And that's really where my passion for investing really began about two decades ago, when when I was hands around seeing people professionals investing capital on behalf of institutions and going in and meeting those institutions and saying Hey, these. they're having two smart guys in the room. Maybe Kim, who has an N B, finance and is okay, Intellect couldn't do this on their own that real adv, And age to active management of one's portfolio, So that's when I started to kind of dip my my toe into investing. Um, Over the years, I've done more on my own in terms of researching and trying to create. You know, my own sort of portfolio asset class. Separately from that, I am chair an investment committee for an endowment that's roughly a hundred and fifty million dollars. So I invest not only for myself, but I work with the collective group To invest on behalf an institution where I'm a fiduciary, which is an added burden, because the vast majority the capital that we invest is put back into the school to fund from the from the institution and get financial ated. So for our students, so it is a higher burden. And so I take this type of analysis and thought process very seriously, but across all that I learned a lot about the benefit of having profession. I invest our money for you

pascal_wagner:
Yeah, and and just like quickly, I love your quick take on active verse passive like, Give me how you think of active verse, passive investment and management.

Kimberly Smith:
And I'm here for both. I have one. So my first investment was in Franklin Templeton fund in nineteen, My first investment on my own that I did on my own as Franklin Templeton Fund in nineteen, ninety six after I got my first bonus, which was probably about three thousand dollars, and I put a hundred and fifty dollars in to this Franklin Templeton Worldwide fund, and the reason why His, it was because they took a Hndrandfifty dollars as their long. So that was Guy of my first foray, But I went on Morganing Star and I did all my research and yes, there was Internet in Niteennintyfive, but it was yea, but I was able to kind of build up a story and find a fund that will take my money, and I like both my personal portfolios mixed of active versus passive investing. You know, sometimes if your do work on a man Ger, you compare it with the s and p and r. these kind of dedicated vertical funds like a health care fund or a gold or medal, and mining, like all of those things are kind of hard to do on their own, but a lot of times, if you look at the performance versus active versus passive, sometimes passive actually does better. But remember passive management is still actively managed by a person and a team of Indi. Us to work on the waiting. It's just really a lot of the times you know, there's just lower lot of lower fees. easy entry and exit point. So when I'm managing my liquidity, but I want exposure to health care because I think it's a good assiglass or real estate like, I think real estate is probably starting to get interesting again. You know, I'll go to a van guard or other leaders in the space and go into a rat fund, as supposed to may be going to dedicated real estate fund at the, Although, I am looking at one right now just because of how I want my exposure and how I want the fees, and whether I want access to the capital. So I'm a big fan of both. I just think when you're thinking of passive investments to tend to be much more liquid, much more broad based. And so if you need that, If you want to have access to your capital, I always look to pass it. You want to lock it up there, E, be a premium to locking up your capital and you're going to an active manager. Those typically you're paying that premium Fees, but I want to see that on the back end in terms of performance, but I like both, and I think a balance portfolio should be a mix,

pascal_wagner:
Cool a lot more to dive in there In a minute. I'm going to put a pin

Kimberly Smith:
Please.

pascal_wagner:
on that and I'm gonna. I'm gonna. I'm going to go to this idea of like when you are investing.

Kimberly Smith:
Hm.

pascal_wagner:
What is it? What is it that you're investing for? Are you investing for cash flow? Are you investing for equity growth? Does that change over time? does it based on how much money you have coming in from other things? like how do you figure out what? if you're going to be Making an active investment or a passive investment? Talk to me about those kinds

Kimberly Smith:
I try

pascal_wagner:
of things.

Kimberly Smith:
to have a mix on the portfolio, as I said, Like I try to have always have money working for me. I always think money needs to work for it for you. And so if I have cash coming in and I don't have time to do research or do analysis and see where I can get a better reward for my capital, I will go passive on the quick side, because I can access that capital. But you know when I think about how I invest, it's mostly from long term growth like. I'm less thinking about it as Mail box money like, As opposed to how do I create long term growth of my capital so I can do x y z with it. And typically the x y z has been investing for, And that's my personal strategy because I love investing, but for the most part, when I'm thinking about a portfolio construction and how I want it, it is really to and growing wealth and taking it when I get cashed in, And I do not want that cash sharing my bank account, even though the markets look like they are today. If I have cashed access, cash in my banking account and I know that I don't need it immediately. I am automatically looking at ways to invest that capital to grow to grow that to grow that money.

pascal_wagner:
Because every every day that goes by that you're not investing

Kimberly Smith:
I'm losing

pascal_wagner:
it, it's

Kimberly Smith:
money.

pascal_wagner:
kind of

Kimberly Smith:
I'm

pascal_wagner:
losing

Kimberly Smith:
losing

pascal_wagner:
value.

Kimberly Smith:
money. And you know having cash as part of your portfolio of now, Don't go all in cash. Go on and on all of your cash. just but always keep that money for the rainy day. But yes, when I have money coming into my account, I like to have money that I've found money, or bonus money or whatever money. I do. try to reinvest the capital pretty quickly once I figure out my spending your needs, because it ends up being cash On your long term growth. And that's how I try to think about it. You know, on my next what my capital needs today tomorrow in the next twenty years and how, and I vest accordingly, But if you cash your banging out, it makes me nervous to have a lot of catch my banking. Not because I think someone's going to take it, but it's just you're not making money on it. There's no. There's no upside in that.

pascal_wagner:
Totally. So something something that I'm picking up on is or maybe like something of the way that I think about it. I'm wondering if you agree is like, as you get more income and as your wealth grows, this is kind of like a new skill that you just need If you want to be wealthier and grow your wealth and have more opportunities. It's just learning. The skill is something that you need to do and you can either choose, Do it active or passively or a mixture. but it's It's kind of a necessity if you want to keep growing going up the food chain.

Kimberly Smith:
No question, one of the things that I focus on in my personal life is financial literacy, particularly for undeserved population, And that starts now. That starts when they're in high school before they leave the home, understanding savings checking investing, Because if you don't know those basics, you cannot be successful and you start with those kind of at infrastructure Bill, And that as and then understanding the importance of savings. So what do you do next And what do you do next is invest, and one of the things like I grew up in a wonderful home. Like I said, my parent, my mother was a school prince, while my father was a dentist, But one of the things they always did and taught me was how to invest at the time they didn't have, so, whether it was fun vestments or drip stocks where you're getting your ands re invested, Where you can do that correctly at a low cost. there's no reason, regardless of how much money you have that a portion of your wealth isn't invested in something. And because that is the only way to grow your wealth, you cannot grow your wealth through sitting in cash or cads. It's through finding vehicles active or passive. Depending on your time, your ability to analyze the these investments or you know your inclination, But you need to find things to invest in if you want to get that goal, and I think most people, and that and goal could be for your yat, your maserati, or to give back to the community, But you cannot do that if the capital isn't, you know, invested, And that's what I really try to hit home with young people that I try to mental, and to teach them about investing in thimportance of understanding the asset class holistically of investments, whether it's active, Ers, s passive.

pascal_wagner:
So so let's go back to that first fund.

Kimberly Smith:
Yeah,

pascal_wagner:
You know, at first you were like, Hey, I wanted to invest. I invested a hundred and fifty

Kimberly Smith:
Yes,

pascal_wagner:
dollars into this first fund. What was what was the first time you invested like a substantial, Like, maybe like a fifty C into a fund where there was an opera operator where you might have like a lock up period, where where it's it's not where it's tied up for five to ten years and Gus through like, How did you? How did you find the deal? What was going through your mind? Like, how did you decide that this was the right thing to do and not invest it actively?

Kimberly Smith:
Well, at first it was a private equity fun, very well known out of Boston that I well, be honest with you. I got. I was able to invest, which at the time was a half a million dollars, was just significant amount of my net worth and it was, if not, majority of my liquidnetworth at the time, But it's a very well known fund and they have a track record that's extraordinary over the last, probably now Redaccades. And this was maybe fifteen. sixteen years ago. When I did this, maybe a little bit more, but I don't want to take myself. But so I invested this money. I felt basically ill, like, as soon as I signed the subscription agreement actually felt sick to my stomach, not because I was going to lose the money, but because like Okay, this is the first. like I dated a lot of investing before, Like this was a marriage. This was my first Preictnto investing and the capital was locked up for a decade. And but I went through the. I looked at all their previous performance. I looked at some of the deals that they were thinking about putting in It's in the hotel Com space, Tempt space, But I was ultimately got comfortable putting this number of this amount of capital into this investment vehicle because they have a great track record. Trusted the portfolio managers. I spend a lot of time, Then they were left like I was lucky. They spent a lot of time with me because I didn't have a lot to make sure I felt comfortable and locking up my capital for that long, but I really understood what I was getting into and when I think about the active versus passive just to go back to that thread, their performance is amazing, the way I perform any market index in their space, But it was a long That period and I feel much more comfortable locking up my capital in these longer duration deals. This is my personal preference. You know, these long duration private equity deals where I think there's outside return potential. I have a much harder time investing in equity strategies that are active two and twenty strategies unless they're doing something so off the run that I can access it through Index, or especially fund. So those are the strategy where I tend to going back to original question that I tend to go more passive where I can really pretty much get the same real level of returns over time, and in a passive fund, those that tend to stay a little bit farther away from for longer dated private equity type investments where I know, I really need a capital like they need the capital to make an investment work, and they need the time much more comfort, Bull. but I made that first investment. I laid in bed for weeks. I'm thinking I'm not goin t be able to. I didn't

pascal_wagner:
I

Kimberly Smith:
have a family, but think I'm not gonna be able to make my right for mortgage Fam at an end of up working out very well, But you have to fight that bullet, and really your first investment in Longer lock fund. You really have to understand

pascal_wagner:
You

Kimberly Smith:
the risk like I understood it very clearly. I may

pascal_wagner:
very

Kimberly Smith:
not see

pascal_wagner:
early,

Kimberly Smith:
a dollar for a decade. Can I live with This hand? I could, and it worked out for me

pascal_wagner:
And so to recapor. To make sure I'm understanding is correctly, What I'm hearing is that you decided to go with a fund and lock up your capital because this fund that you felt comfortable with and that you did a lot of dotlison, had, was supposed to be giving you much higher returns than anything you could have done yourself

Kimberly Smith:
Correct,

pascal_wagner:
or done

Kimberly Smith:
and

pascal_wagner:
actively.

Kimberly Smith:
they had to expert tease to do it. Better like meaning I was paying a prent lock up fees. All of that because these guys are best in class in executing on their strategy and that's the thing that I think people miss. It's not like, and they needed the capital like a lot of times you and analyze funds. And these guys are everybody smart. They need your capital to execute your strategy. Does the capital need to be a like? Does the capital need to be locked up to execute their strategy? What is their advantage in the space that they can do it better than anybody else? That parent warrants a lock up warrants the higher fees, And these guys did, and I have the ability to access well below the minimum. in this case, and everybody out there always asked because people are always willing to waive the minimum even if So. s. it's much higher. Typically, if you get a nice or person, they will wave the minimum for you as long as you're an accredited or qualified purchaser. But anyway, um, but the premium really came from the fact that I could do it myself. They could do it better. They had the strategy to execute, and I would never have been able to access these investments any other vehicle, period, active or passive. And hence why it was all worth it to me.

pascal_wagner:
So what kind of what kind of investment is this like? I'm thinking in my mind like Okay, I have access to real estate deals, multi family buildings, mobile home park, Olin gas at M funds like, like, what kind of deal is this that you know? it's all dependent on what you have access to. What kind of Gen niche

Kimberly Smith:
It was

pascal_wagner:
was

Kimberly Smith:
in

pascal_wagner:
this

Kimberly Smith:
the

pascal_wagner:
in?

Kimberly Smith:
hand, Tell Com and Maia, t, M. t. tell Communion Technology space, but they were accessing

pascal_wagner:
And

Kimberly Smith:
middle. They were asking small to mid cap deals That No, that were like all privately held companies, So not stuff like that we used that we're used to working with not earlier. State, I mean, these are companies with real businesses. Sometimes they needed to be fully restructured, the had to be, and the opportunity. they sometimes would have to fly in people to operate the company you know, in and out of these companies, to kind of help with structure these businesses. But it was that ability. Like having all that access was what made the steel compelling To me like companies will never heard of, but they might be part of a very large company today. Like that's where they could execute on that they could call up. We have you know, Jimmy's local Tell Com company, but they have the market on. I don't know Ohio. like the Ohio farming community, they have this. Maybe they have one band of spectrum that nobody has access to, which is might be not a broad band in our brand spectrum. But like, if you know anything about spat In plays, you can easily repass. If you get the F C approval, you can re classify those as broad band. They come much more. They become much more valuable, and so in this, in like case like this, they take that Ohio. They were going to take like the Ohio Spectrum and merge with a massive cable company. I mean, this is just an. like this is. I made this idea up, but like the strategy, but like those are the things that they could do that nobody else could do. And and like being able to Ontact in that instance, like having companies and managers that he can get the f c, C on the phone, and to negotiate the Re classification for narrow to broad band spectrum, You know that's huge. That is the benefit of active management because otherwise, like, typically, a guy from Vanguard is that's somebot's paid to. He's paid to weight portfolios, which is which is definiteliy. There's a premium to that, but he's not paid to help create value,

pascal_wagner:
I

Kimberly Smith:
And that's You should get from your active manager. You need to create value.

pascal_wagner:
So, Kim, I mean, I have to imagine that in the years before you made that investment, somehow you were like introduced to that type of vertical because for me that vertical is foreign to me. Something I'm interested in learning more about Im going to dive into next. But like for me, you know, I've been around real estate and I've heard a ton about oil and gas like I've always had friends that had wealthy like parents that you know, invest in oil and gas. And so like Those are the initial funds that I think about investing into. I'm imagining you didn't just like. Oh, This fun sounds interesting like you know you had some exposure.

Kimberly Smith:
That's

pascal_wagner:
Is that

Kimberly Smith:
true.

pascal_wagner:
accurate

Kimberly Smith:
I mean,

pascal_wagner:
or

Kimberly Smith:
I'm intellectually

pascal_wagner:
like? Give me that

Kimberly Smith:
curious

pascal_wagner:
picture.

Kimberly Smith:
as you know. so that's one. but uh, yeah, I definitely had access to it. I mean, I worked an investment firms that invested across many different asset classes and both liquid and non liquid investments, And when I can tell you about non liquid investments Like particularly, I have worked to two hedge funds that had edit expert to specifically distressed debt. The amount of work that goes into a distressed debt or credit in Man is enormous and you cannot do that on your own. And you need a manager that has experts in the space that is willing to sit on boards, is willing to work with others to effect an outcome. Like I saw that real. I saw that in real time, and I was lucky because we tell con plays and we had health tech plays, and you know financial plans and spectrum plays. Obviously I know a lot about Spectrum. Its fill. Let's find that air On that sector, But yeah, I mean, I got smart because I worked it for two active managers, So I know the benefits of what active management does for investors and that is create wealth, but with that said, I actually tend to invest in areas that I'm intellectually curious, But don't have as much knowledge on. So when you and I founded you are the one that taught me about Web three You, You are my inspiration. Now I'm writing articles about Webthrekbut. I invest. You know, as you know, from our text you know, continue to dabble in the crypto defy hemisphere n f t. whatever, But I would invest an active manager if I was going to put A man an A. and because I don't have the accents like, I don't have the access to sit on whatever that defy committee to effect different, like an effect change or improved process in the industry or transparency. whatever it is like. Yeah, also a couple of books and salona or whatever. But if I want to make a, you know, a six figure plus investment in something that I know just enough Be dangerous. I'm doing that to the expert. I'm leaving that to an expert because I know it's more than just. Hey. I'm smart. I'm looking at a d. C. S and the numbers meecshob. It's more about how do we work to create value for each and every investment in our portfolio for our investors, And that comes with working together. Sometimes you have to bring it out to our resources, our

pascal_wagner:
A

Kimberly Smith:
biggest expense outside of salaries at both firms, Legal legal to do to help

pascal_wagner:
Two.

Kimberly Smith:
effet Change. And so that is the real benefit of active management that people don't really understand Like it's not a bunch of guys in a room you know, eating twistlers. It's a bunch of guys and gals in a room working with lawyers, to and other and Lois in whoever to create value for you. And that's what active investments. That's the premium active investment affords you as an investor.

pascal_wagner:
What are what are? Give me. Give me an idea of how much you've invested total across. Like, what are all the

Kimberly Smith:
No,

pascal_wagner:
different types of asset classes you've invested into? What? What's your favorite type of deal? What's what's been the worst deal that you've had?

Kimberly Smith:
I mean, I tend to, may have definitely invested in funds and other such things as well in access of five million dollars, but it's been a mix. Like most, some of my investments have been okay. I've had a couple big winners here and there, and I have a couple that are losers. I mean, I dep Atli, Have a crypto fun. That's not my best. I believe in a manager and I believe in what he's doing, but you know it's I want a mark to market basis. It's tough, but

pascal_wagner:
Well, they still have a time line. They still have time line. Still got a couple

Kimberly Smith:
But

pascal_wagner:
of years.

Kimberly Smith:
yeah,

pascal_wagner:
You know

Kimberly Smith:
but to the point is, I'm actually glad I'm not locked up in that fund because I think you've hit the nail on the head. I think there's plenty of time for it to rebound and I'll be perfectly candid with you. My crypto perform wasn't done that well, either, the one I tried to make myself, And so I can't you know I'm not going to be the judge jury in executioner when I didn't do as well as they did, And I think that they have the ability to actually make something happen at a much larger scale, because they have a bigger platform, they have more access, they have access to resources and they have access to information that I'm not going to ever be able to at. And so again, like Yeah, on a marked market based to the script, Fun hasn't done well, but I'm not. I'm not down for the count either, like I still believe, As long as I still believe in the manager, and actually like the fact that Taken marks in his book. You know some of the things he's He's invested in projects that don't really have a mark to market. There. more private equity type feeling in terms of investment are privately help companies like he marked those down. There are people that haven't done that And so I do think that's incredibly important as. well, Um, I have this one investment that I love. it's a fund called Savory funds, and I can't wait till they come out with their next Vestment, their next fund and I have a small investment in it because I really didn't understand the case. It's

pascal_wagner:
What

Kimberly Smith:
a fast

pascal_wagner:
is it? What

Kimberly Smith:
casual

pascal_wagner:
is it?

Kimberly Smith:
restaurants business. And so they invest in all these restaurants in primarily in Utah and Arizona. where the owner is the operator. They come in. They take a significant stake in the company, but the owner has to still be operating the businesses and food. Every one of these restaurants in Crete, Fantastic. The portfolio manager is fantastic and I really trusted him from the minute I even spoke to him on the phone, not even video. I just with something in his voice that I just really connected with him and I didn't know the space. You know. you think about restaurant business. Every time people say restaurant business, you lose all your money. It's one of my best investments. and like I said, I can't wait for him to go back to market with his next Und. But he's done a great job. The companies that he invests in love him and he. he's doing something unique Because a lot of times when people come in to this company is, and this isn't just in the restaurant spaces is, and all sectors they come in. I think they can build a better mouth trap. They think that they know better than the owner that has run the business forever, and sometimes that is the case right. that's not uniformly. But so You have a good business, and he understands that you grow at a certain pace. He doesn't push that, you know, and push them out of a cup of zone, but you continue to continue to get the knowledge

pascal_wagner:
See

Kimberly Smith:
of having the owner operators still involved in the business, and that resonated with me. I really, you know. Obviously, spending two decades on Wall Street, You see, a lot of times people come in. they come into business is particular. active. investors are stressed investors, and they Push out the operating team, and ninety nine percent of the time that's right. Maybe they've screwed up, but a lot of times when you're dealing with families in restaurant businesses where people are very much accustomed to seeing the same guy there got dying there. It's really

pascal_wagner:
There?

Kimberly Smith:
important to have that continuity and they understood that. that really understood that Andrew really understood that, and that's why I think they're so successful and so for me,

pascal_wagner:
And

Kimberly Smith:
one

pascal_wagner:
so

Kimberly Smith:
of the investments

pascal_wagner:
for

Kimberly Smith:
that

pascal_wagner:
me,

Kimberly Smith:
is one of the most. One of the investments I'm most excited about. Like I truly know, I couldn't do it on my own. As much as you know. I will be on franchise dot com occasionally. Like Sure, Wendy's, but, but I know that Andrew Savery can do it at scale, but I can't. so even if I invested in one Wendy's and I put the same amount of money into when that Wendy's franchise, I'm goin to make ten x of my money through savery, because they know how to execut. I don't have to do it. I don't have to run away. I love a good frosty, But like that doesn't mean I can run a business. And then you see all these people that think they can run a business. That's why the benefit, particularly on the private equity longer lock up where you have. People have real experteses for experts and running businesses. Uh,

pascal_wagner:
I,

Kimberly Smith:
that's why they do so well,

pascal_wagner:
That's

Kimberly Smith:
you know.

pascal_wagner:
why

Kimberly Smith:
that's why it's worth the premium for locking up your capital and and leaving it to the experts. You have to realize that Not an

pascal_wagner:
You

Kimberly Smith:
expert.

pascal_wagner:
hit on a you. You're hitting on a consistent theme here that that that I'm also resonating with, which is around, choosing the operator and resonating with the operator and their strategy. And so so you know, are are you hopping on a call on your like? What's up, man, like pitch me, or are you do you have like diligence check list or you know, are you meeting with people multiple times or is it like you get a referral And then how are Approaching? Like where are you finding funds? And then how are you deciding like this is my, my guy or gal

Kimberly Smith:
A lot of it for me is relationship driven, Meaning I can you know you pest out, can introduce me to Jimmy Bagadotats or whatever, And we could connect and I, that could be right like it could be that type of relationship or just people ave come across to the last two decades in my career, But it's bigger than that. For me, Mean that, for for always means more or for all that's backed up like I have money with this guy. That means more, but I also want to have money with people I like Like. it's really a tough pill for me to swallow when I have a manager that maybe they've put up good returns, But I don't like the guy and you know I, just something about them doesn't connect and doesn't mean in an ethical way, just like they might not have common threads. Or how he runs his business is different how than I would run my own. But I do. I do try to Bigger than just performance. There has to be. I'm going to lock up my capital, whether it's a hundred thousand dollars or million dollars or whatever. I do like to understand the person. So I don't have a formal Du dealer. Everybody smart, you know, everybody S got the auditor. Obviously, I look and make sure there's a real auditor, a real administrator. You know, what am I getting from a tax perspective and your sending me a K one. or you know you, or you know what kind of reporting am I getting from you? That is important. Don't get me wrong. But what's even more important to me is like feeling like I can go to bed at night And maybe the money is like a larger check than I wanted to give, or feel comfortable at the time. but I never went out to give that circle. Circling back to that first example, I ever was warned that my money went missing. I was just where I can. I pay my bills because you know I've dedicated. I've committed this much of as much capital as Posed to anything else, and so it is a little bit relationship driven for me and having kind of shared values in terms of not only how how you treat your employees. That's definitely a question. I asked. like How are you competent employes but tender of your employees. And if they leave, Why like? I'm not one of those people that believe like turn overs back turnoieras healthy in an organization and helps to grab new perspective. But you want to understand why and what? what are they doing to either inctentivize people to grow or to leave because and grow elsewhere Like those are things I try to kind of understand from manager, not just how they're going to make money, because when you investing in a fund,

pascal_wagner:
When you were in bed

Kimberly Smith:
you're not buying past performance, you're buying future performance. How are you going to execute on that? What is what team do you need to execute On What resources outside of your organization, whether it's outside law firms or consultants, or whomever? Do you mean? Those are the kinds of questions I seem to like led into, but I also want to know your story. Like what motivates you? You know, why do you keep doing this? Everyone I meet with is successful. Ninety nine percent of people who met what are successful. But what motivates you to keep going and continue doing all this work

pascal_wagner:
You?

Kimberly Smith:
to give to make money

pascal_wagner:
Yeah,

Kimberly Smith:
for your investor? Those are the kind of questions I tried to leg it on because ninety for ninety percent of the time you're buying a portfolio that's new.

pascal_wagner:
Now, Yeah, I hear that I hear that. Okay. damn, can, this is a good conversation. I might need to have you on again, but we're getting close to time. but I have. I have one question around. Just look, you started early on with, you know, your first initial fifty jack into this one fund and now invested over an access of five million, And there's probably a bunch of learnings along the way. What's what's maybe been your biggest shift, or may be lessons learned. Or you know the nugget that someone can take away. It's like damn, Okay, I'm not going

Kimberly Smith:
The

pascal_wagner:
to

Kimberly Smith:
biggest

pascal_wagner:
do that.

Kimberly Smith:
shift is, Can you there to one realized you can't do it on your own. That's fit for me. The bet is the biggest shift is that you can't do it on your own. It is impossible to be work full time. manage your children. You know land and air craft, and be an investment manager. There are people paid to do it, and that is on both active and the passive side, So being smart enough to realize Okay, I can't do this myself. I'm going to allow a professional to do it. That is number one thing. I've learned. I hear a lot of people. Particularly when I went deep in the crypto world. They all thought that they were smarter than the next guy. They'd send me their notions and their check list and all this stuff. But like me as my little person, I can't make a difference in a million dollars. I can't make a difference of five million again. So ten million dollars a crypto space, but like a billion dollar fund pan, right like, and so being able to realize being smart enough to know you are not smart enough to know as much as someone that is paid to do this is my biggest lesson learn because whenever I've tried to do it on my own, my performance is not great. Like maybe I can ring the bell for a month. or so. I bought it kind of five seventy six. I look real smart for a few years, but That was better, but one like smart guys, bought hundreds of them, thousands of them. And that's

pascal_wagner:
Yeah,

Kimberly Smith:
the benefit of being a true investment manager and leaving this work to the experts.

pascal_wagner:
Yeah, I love. it. Was there a second

Kimberly Smith:
That

pascal_wagner:
one

Kimberly Smith:
was

pascal_wagner:
or it

Kimberly Smith:
it.

pascal_wagner:
was that

Kimberly Smith:
That's the biggest

pascal_wagner:
you said.

Kimberly Smith:
one and I mean that's

pascal_wagner:
Okay,

Kimberly Smith:
the biggest

pascal_wagner:
I love it.

Kimberly Smith:
one.

pascal_wagner:
You nailed it. You nailed you nailed it, Kim. This was awesome. I loved having you on the show. I think this was super valuable

Kimberly Smith:
Okay,

pascal_wagner:
and I learned a lot and I also got to now you a little bit more

Kimberly Smith:
Yeah,

pascal_wagner:
too, through the investing lesson. So that was cool.

Kimberly Smith:
Of

pascal_wagner:
So thank

Kimberly Smith:
course,

pascal_wagner:
you for coming

Kimberly Smith:
thanks.

pascal_wagner:
on the

Kimberly Smith:
Pass,

pascal_wagner:
show.

Kimberly Smith:
how you know I love you. I'll do anything

pascal_wagner:
Yeah,

Kimberly Smith:
for you.

pascal_wagner:
ah, too kind, too kind. All right, thank you all, and we'll see you

Kimberly Smith:
Bye.

pascal_wagner:
on the next episode. Take care.