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Building happiness (According to Rob Dyrdek)

Automating everything so you can focus on what matters.

October 08, 2021

Rob Dyrdek was recently interviewed on the “My First Million” podcast. I didn’t have crazy expectations for this episode, but this man has gone through an incredible transformation from a skateboarding thrill junkie to an established businessman building generational wealth. It’s incredible, and reminds me of how much progress I have made in the last couple of years. It’s proof that anyone can rise to success and build wealth.

In the podcast episode he laid out a fraction of his blueprint of a fulfilling life, and I wanted to break it down in a blog post.

The ultimate ultimate financial goal

TLDR; Live off the cash flow dividends of long-term stable investments. Live a completely free life with income, forever.

I’ve understood this model for a while but it hit me differently the other day. Recently I have been very bullish on investing (rather than saving or paying down debt), but I still take a salary. Drydek invests 100% of his salary into real estate, and then lives off the cash flow of those investments.

That means even if the salary disappears tomorrow, he’s set for life. This is so simple and yet so mind-blowing. It’s simple because anyone can do it once they reach a certain financial level. It’s mind-blowing because it’s so future proof. Property ownership and real estate is something that will always exist as long as humans exist.

Early in the episode Dyrdek casually mentions having a 500 year financial wealth preservation plan. He’s literally thinking 500 years in the future, “how can I ensure Dyrdeks will have access to this wealth?”. That’s wild to think about.

For someone (me) who only has one income stream and still lives in debt, it’s eye-opening to see that there’s a totally different way to live your life in a way that dramatically impacts others.

The business that builds businesses

To be able to afford the purchases of real estate, Dyrdek has built a business that builds businesses specifically for exiting. Once there’s an exit (a liquidity event), he’s able to reinvest that money back into the machine that builds businesses, and he can scale the operation.

Once sufficiently scaled, his income scales, which scales his investments. Boom. Security for life.

Here’s what he focuses on most in regards to finances for the machine:

  1. Taking account of the capital you’ve earned.
  2. Taking account of the tax efficiency of how you earned it.
  3. IRR (rate of return on internal investments) of every dollar in the system.

Maximizing these three things allows him to build a machine that continues to grow and scale. More capital, less taxes, and higher multiples on investing internally is the blueprint for future success of his machine.

His number one business tip is always build to sell.

My biggest mistake in the last 3 years is that I didn’t build Closet Tools to be sold.

From here on out, every business I will build will be built to be sold. I’m still figuring out what that means (legally, and logistically), but I’m digging into books on the topic to learn more and move in this direction for every project I do in the future.

Right now, Closet Tools is fine. It’s still generating lots of revenue. It’s not growing a lot, but it’s also not declining. It’s been very stable over the last 6 months. It’s basically like a job. I spend some time on it, but it’s not going to build generational wealth for my family.

And that’s okay. I didn’t intend for it to do that. I built it to get out of employment, get out of debt, and get freedom for the long-term.

But, going forward I know beyond a shadow of a doubt that building in that way is a mistake. It’s a small business mindset. It’s something that keeps you bound to only what you can do - instead of bringing other people and other automation into the picture.

Balancing business and life

NOW. One of is main points is that he does all of this with 30% of his time. Here’s how time in his life is allocated:

  • 30% (7 hrs.) Work.
  • 30% (7 hrs.) Family.
  • 30% (7 hrs.) Sleep.
  • 10%. (3 hrs.) Health.

Dyrdek emphasizes family and health, and business is something that works with them, rather than business being the main focus. If anything, his time leans towards more time with family if there are issues to be addressed or he’s feeling that something is off.

He diligently tracks every hour of the day, and writes down how he spent his time so he can qualitatively and quantitatively understand the quality of his life. Some of the things he writes down every day:

  • Did I get up before 5AM?
  • Did I brain train?
  • Did I meditate?
  • Did I get in the gym?
  • Did I have a clean diet?
  • Did I not drink?

Tracking these things allows him to understand exactly why he’s feeling the way he’s feeling, and it also allows him to see how his life is trending over time. As of the podcast recording, 87% of the days this year answered “yes” to all of those, so he’s feeling pretty good (and directly understands why he’s feeling pretty good). The numbers allow him to directly see his quality of life right now.

He designs a life of balance, and then only works within the confides of that balance. He’s not overworking, and he’s not compromising on anything he wants in life. In every area of life he’s tackling it intentionally and with gusto.

One thing he does (that I also have been doing for the past few months) is writing his wife a note every morning that explains what he’s doing for the day, why he’s doing those things, and a love quote.

I know for me, personally, writing these notes to my wife has completely changed our marriage. There’s much better communication and much less tension because we’re on the same page. She knows how I am spending my time, and I am held accountable to what I say I will do.

So, why do all of this? What’s the advantage of all of this work? It’s to be happy. He knows what makes him happy, and he’s designing a life that emphasizes that. All he has to do is check those boxes every day, and it defaults to a life that makes him happy.

Maybe a wife, kids, and a media business that builds businesses isn’t your thing. That’s fine, but his takeaway is to find out what makes you truly happy and build a life that emphasizes those things. Figure out your check boxes, and then check the boxes every day.

How do you design a life that defaults to balance? Dyrdek says start with the end. Work backwards from the life you want to have - what type of person attracts that type of life? Systematically become that person, and over time your life will line up with your design.

Mindset

According to Dyrdek there are two different mindsets that get you nowhere in life:

  1. Dwelling and being negative.
  2. Being hopeful and “wishy”.

The only mindset that can move you forward in life is one that solves problems, builds the future, and lives in the present. Whatever you’re experiencing right now is a product of the decisions you made in the past, so it’s up to you to make decisions now to build your future and create the reality you want.

If something hits you unexpectedly, rather than dwelling on it, you can problem solve and handle it. That allows you to live a life with no negative thoughts.

One pivotal mindset shift for success is understanding you’re not who you think you are. You are your results. Your past actions determine who you really are today, not who you say you are.

This became clear for Dyrdek when he first tried to sell his business, but ultimately failed because the business was a mess. He was uninvestable. He changed his future by educating himself, getting coaching, and building businesses that were organized, structured, and built to sell from the beginning.

This transition allowed him to build a stack of businesses that netted over $400+ Million in a recent acquisition, including $100+ Million for himself. He’s only moving up. Only moving forward.

Accountability & Directional expansion

Dyrdek has a “Tiger 21 experience”. If you’re not familiar with Tiger 21, it’s a group of ultra-wealthy individuals who share investment strategies and deep dive on their own portfolios to be held accountable and see if there’s anything they’re missing out on.

When asked “what’s your 100 year plan?” this put Dyrdek instantly into a generational wealth mindset, instead of a self preservation mindset. Having that level of accountability, but also designing for people who will be alive when you’re not alive is something that’s very deep and powerful. It takes you out of the equation, and what you want doesn’t matter nearly as much.

Exposing your raw wealth and justifications for those decisions can be daunting. People can find out who you really are very quickly. It’s in your best interest to act in a way that demonstrates the person you’ve designed yourself to be. You don’t want to be exposed as a farce.

His advice on happiness is to expand rapidly in one direction. That’s where exponential growth, greatness, and mastery lies. The perpetual state of high growth in a clear direction is happiness.

The only way to become a master is to continue in one direction. If you’re always changing directions, you’ll never achieve mastery, and you’ll never reach the peak of your potential. Once you have become a master your gains will grow exponentially.

Conclusion

In the end, Dyrdek concludes by saying that everyone should build an operating system for their life. They should have a plan for how they handle everything in life - from haircuts, to celebrating birthdays, to handling finances. When you have the decisions automated, it leaves you mental capacity to be more present and more focused to get things done.

Because he adds more automation to his life continually, it allows him to live and do the things he loves to do, which in return gives him more energy, focus, attention, etc. to continue doing the work, and adding more automation. A machine that builds machines.

This is inspiring, because anyone can do it. In a short five years you can become a totally different person living a totally different life because of the decisions that you make right now. Build out automation for the things that are taking up your mental capacity, and then you’ll be able to rapidly expand in one direction and build wealth.