Chris Hutchins – Why You Should “Retire” Before You Hit Your Number

Mad Fientist: Hey! Welcome everybody to the Financial Independence Podcast, the podcast where I get inside the brains of some of the best and brightest in the personal finance space to find out how they achieved financial independence.

Before we get into today’s show, I have a little holiday giveaway for you. Jim Collins from JLCollinsNH.com kindly donated a few audio book codes for the Simple Path to Wealth which is his book that he released this year that’s been an absolutely huge success.

So, if you want the chance to win one of those codes, then just go to MadFientist.com/iTunes, leave a review for the show and then shoot me an email just to say that you did it. And then I will pick a couple of winners from all the iTunes reviews I received in December, including my most recent review from swerty24 who says, “I’m the Oprah of financial independence.” So that was a very cool review. I enjoyed reading that. So thanks for that.

Anyway, onto today’s show! I’m excited to introduce my guest. And he’s a bit different than my other guests. He’s not a writer, he’s not a blogger. He’s a guy I met recently when I was in Dallas, Texas. And he has an incredibly interesting story.

So, this is a guy who has sold a company to Google, has invested in San Francisco real estate before it was crazy expensive like it is now. And despite all of that, he said that the thing that impacted his savings the most was saving. So just flat out boring saving is what contributed most to his financial independence.

He said financial independence about three different ways. He’s currently starting a new company even though he’s financially independent which is also something I wanted to talk to him about because the more I learn about financial dependence after quitting work, the more I see that people don’t just sit on beaches all day. So I wanted to chat with him about why he’s deciding to start another company at this stage and find out what motivates him these days.

So, we had a great discussion. There’s a lot of really good information in this episode, especially if you’re unsure about what you’re going to do after you achieve financial dependence, or if you’re interested in starting your own business. Chris, as a successful entrepreneur, he’s helped build lots of businesses when he worked at Google Ventures. And now he’s starting a company called Grove which is aiming to help people get control of their financial lives by combining technology with classic financial advisor advice. Really cool stuff! And he has a lot of great information and knowledge to share.

So, without further delay, here’s my interview with Chris Hutchins from UseGrove.com.

Mad Fientist: Hey Chris, thanks a lot for being here. I really appreciate it.

Chris Hutchins: Yeah, thanks for having me.

Mad Fientist: So, we just met in Dallas a couple of months ago. We both were invited kindly by Teresa and Shannon from the Center for Financial Services Innovation. We were invited to this really nice dinner for the Financial Solutions Lab which is something you’re a part of, right?

Chris Hutchins: Yes! Yeah, we are one of the eight companies they chose this year to be a part of their program.

Mad Fientist: That’s very cool. And yeah, I don’t know why I was chosen, but it was nice to join and get to talk to people like you. And before dinner started, we had this really good chat. And there was a few incredibly interesting things you said to me about your story. So I’m excited to chat to you about some of that stuff.

You mentioned that you’ve done a couple things that people think you need to do to become financially independent or wealthy. You sold a company to Google and you bought real estate in San Francisco back before it was really cool. So, those two are really interesting things that I definitely want to talk about.

But the thing that you said to me that just struck a chord was that, despite doing those two things, the thing that has impacted your net worth the most is just consistent saving. So tell me about that comment.

Chris Hutchins: Sure, yeah! So, like you, I have my own kind of my financial independence and situation spreadsheet. And as I look at it, I kind of have the categories of sources of money. And some of it was from when we were fortunate to sell a company to Google and some from the house. But the largest bucket by almost a factor of two is just real savings.

Mad Fientist: That’s incredible. So to give the audience an idea, how old are you currently?

Chris Hutchins: Sure! I’m 33 right now.

Mad Fientist: Wow! So 33, and you’ve done these amazing things, and yet savings is the biggest impact to your net worth.

To give people a little bit of background about you, can you talk about how you got into starting companies?

Chris Hutchins: Sure, yeah. I think if I go back to, I guess, high school (maybe before, but I’ll start there), I went to a school where a lot of people at my school had a lot more money than I did. Their parents gave them great allowances. And so I’d realized early if I’m going to be able to keep up, I need to figure something out.

So, I remember, in high school, I created t-shirts for our football games and sold them. I created a job at our school where—I ended up in a boarding school where I was like running the mail room.

And so, I’ve kind of always been creative in finding ways to generate income because I knew that I didn’t have what everyone else did and needed to figure out a creative way to do it. And that kind of grew on and on.

I didn’t know what I wanted to do after college, but I took the traditional route of a job at an investment bank and a management consulting firm and quickly realized that those things were not for me. And I think that’s what really sent me down this path of financial independence. I was like, “Man, these jobs are not for me. I don’t know what job is for me, but there’s no world in which I want to do a job I don’t love for the rest of my life. So I need to make some sort of radical change to save enough money because I have not yet found a job or a career that I love.”And if I don’t find it, I want to put myself in a position where I don’t have to be doing something less than exciting for the rest of my life.”

And that’s what kind of led me to be more entrepreneurial. I went to this event in New York called Startup Weekend. And it was basically an opportunity for a bunch of people to get together that are engineers and designers and business people and create a company over a weekend and launch a product.

And the products that were launched never really amassed anything. We made a Windows desktop app that would remind you every 20 or 40 minutes that you should get up and stretch. It’s called Desk Happy. It never went anywhere, but it kind of made me realize that “Wow! This is something I enjoy.” And almost immediately after that event, I told my wife, “We have to move to California. There’s people that are doing this thing that’s amazing and are starting companies.”

And I’ve always been a closet—or maybe not closet—Internet nerd. And so we started a process to move out to the Bay Area which is where I first found startups and just a sea of entrepreneurship. And that kind of drove me down the path of finding more and more things that I was excited about. But I kind of already put myself into the ways of really efficient living, optimizing everything, from travel to life to money. And so it just seemed like such a lucrative benefit of putting yourself on that track that, despite finding a career I liked, I just stayed on it.

Mad Fientist: Nice! That’s really impressive. and it’s impressive that you were able to do that as an investment banker or a management consultant as well. Those are two careers that are probably not many frugal people are hanging out in those circles. Isn’t that true?

Chris Hutchins: Yeah, those are not frugal careers. I did my investment banking stint for about nine or ten months, and I was like, “This just isn’t for me.” So I missed the majority of the compensation in those careers coming in the form of bonuses. So I didn’t stick around the first job long enough for a bonus. And the second job was at a company that eventually needed to be sold, but never paid bonuses the year I was there.

So, I was somewhat also in a situation where everyone around me were spending money as if they would make lots of bonuses, but I had never seen them.

I’m not surrounded by frugal people, but also not with enough money to be in New York and have a choice other than frugality.

Mad Fientist: And what is investment banking like? Obviously, it was not very fun for you if you’re less than nine months. But yeah, it’s always been something that’s intrigued me. What was the lifestyle like?

Chris Hutchins: I would think it’s a pretty demanding career—I mean to the extent I know about it. But I definitely have other friends in it. And it didn’t mean anything to me until I started interviewing in college. But essentially, investment banks were hired by other companies to assist and aid in transactions—mergers, acquisitions, IPO’s. And those things are always the most important thing to a company at the time. And the investment banks bear the brunt of a lot of the work.

And so, it’s the kind of job where—I think that my tipping point that came about 8 ½ months was that there was an entire week where, Monday through Friday, I got home after my wife had went to bed, and I left before she woke up. I was like, “It was not a fulfilling enough job to get home at midnight and leave at 5:30 or 6:00 in the morning to get to work because there was just so much to do. And I was so low on the totem pole that it was truly a 24/7 other than a few hours of sleep job.

Mad Fientist: Yeah, that does not sound like a good time.

So, you’re entrepreneurial pretty much from what you’ve said about growing up. It sounds like you’ve had that entrepreneurial spirit. Was it hard to convince your wife to just pick up and move all the way across the country or…?

Chris Hutchins: So, at the time, my wife didn’t totally love her job and didn’t totally love New York. So I said, “Hey, I want to move. These are the four cities that the company I work at has an office. I would love it to be San Francisco. But I know you don’t love New York. The other options were Boston and L.A. and Chicago.”

We went out to San Francisco for a weekend. And we were like, “This seems like the right of those places, so at least one of us would still have a job when we got there.” And San Francisco it is!

It just happened to be very, very perfectly aligned with this whole industry that I was just getting acquainted with. And it seemed like the perfect move.

Mad Fientist: And what year is this?

Chris Hutchins: October 31st 2008. And it seemed like we moved out to San Francisco, everything’s going well. And I think somewhere around November 20th—or maybe right after Thanksgiving before Christmas, but December/November 2008—I got a call at the management consulting firm I worked for to come meet with someone who I’d never heard of. It was a senior director. I came in and got laid off on the spot as part of the end of 2008.

Mad Fientist: Oh, man. Geez! Yeah, that’s a good time to get out of New York I guess. But you can’t really escape it in California either.

Chris Hutchins: Nope! So that kind of kicked me into an entrepreneurial spin too because it’s the end of 2008 and it’s not quite easy to get—you know, jobs aren’t just growing on trees. And I needed to do something with my time.

Mad Fientist: So, at this point, did you have enough saved up that you weren’t stressed or were you pretty much freaking out at this point?

Chris Hutchins: I think at this point I saved up enough that we weren’t too stressed out I think. I’m trying to put all the pieces together. My wife had already gotten a job in San Francisco in the first few months. She’d been interviewing. And she actually moved out a month before me.

And so, she had a job. We had an apartment. San Francisco hadn’t kind of hit the arc of becoming the most insanely expensive city in America yet. And so we had a buffer. It’s like, “Let’s figure out something because these last two things didn’t work out.”

Mad Fientist: So, did the entrepreneurship/starting a company start first or was the real estate something that you started looking into pretty much immediately after getting up there?

Chris Hutchins: Yeah. So when I got laid off, I was like, “I don’t know what to do.” But everyone else is in this situation, and I ended up starting—I guess not a company because we didn’t make money, but an organization called Laid Off Camp. So I was like there’s a lot of people in this circumstance, maybe there’s something we can all do together.”

So, I started this event. It was called Laid Off Camp. We did one in San Francisco. We had tons of media there because it was so timely. And we had hundreds of people show up. And it was kind of an ad hoc unconference where you had sessions being led by people who’d been in HR for their whole careers teaching people how to interview, you had younger kids teaching older people how to use LinkedIn, how to set up an online presence. And it kind of became this really supportive environment of people learning how to put their skills to use and freelance, what to do to start a company.

Everything kind of came together. And a few people came up from L.A. And then, they decided to, with my support, help put on one in L.A. And by the end of 2009, I think we’ve done 20 Laid Off Camps around the country.

Mad Fientist: Oh, wow! What a great idea. I know a lot of my listeners are interested in entrepreneurship and starting their own businesses. And that seems like a fantastic idea. You took the situation as it was, and you figured out a way to help other people in that situation. Is that what you found? You just need to be cognizant of what’s going on around you and figure out ways to help people. Is that how you structured some of your other companies.

Mad Fientist: Almost every kind of interesting or exciting opportunity, at least from an entrepreneurial, but if not, from a life standpoint, has always come from working on something, realizing there’s a big opportunity, and just being able to jump on it.

I think I had an assist from the fact that I got laid off. So I didn’t really have a choice . I didn’t have to make the decision to quit my job to pursue something. Someone else made that decision for me.

But just putting yourself in the right place and the right time, and taking advantage of interesting opportunities to learn or to try things out has been what kind of consistently led me to the next thing almost every time.

And almost as a life principle, I would say “just say yes.” If someone invites you to go to something that you’ve never done before, say yes. Go do it! Go somewhere new. Meet someone. Try something. It seems like when you open up the doors to everything, and you’re kind of aware of what’s going on—

It’s the reason we started the company I’m running now called Grove. I’m really interested in financial optimization. And I had a bunch of friends say, “Gosh! You should do this for a living,” and I was like, “Oh, I wonder what that would look like.” And that path led me down a road to eventually start a company that helps people with their finances and financial planning, to raise some venture capital money to do it, and to build that out.

So, it seems to be a consistent theme of just being aware of when opportunities are there and not being afraid to take it.

Mad Fientist: And it’s also proactively putting yourself in these positions too. We were just chatting before the call, and I was asking you how you found FinCon to be, and you said, “Yeah, it was great. It was my one thing that I do every month to put myself out there, and it paid off.”

So, can you talk a little bit about that goal for you and how that’s helped foster some of these opportunities?

Chris Hutchins: Yeah! So, I guess someone once told me that their new year’s resolution was to make sure that they did something interesting every month. And I thought, “Wow! That’s such a great idea.” And so, I immediately was like, “I’m going to do this, but I’m not going to do it this year. I’m going to do it the rest of my life.”

And so, I put together a spreadsheet of ideas. And I just made sure that every month for the rest of my life, I did something memorable, unique, something where I learned something, took some opportunity.”

I think that was in March of 2014 when I started. And since then, every month is accounted for.

Mad Fientist: Wow! That’s amazing. And can you give any examples of the most fun ones, the most lucrative ones, anything like that? Any ones that stand out that were just like, “Wow! I’m so glad that I did that.”

Chris Hutchins: Yes! So I’m trying to think of some random ones. Some of them are as small as I’d almost wanted to just host a multi-course dinner party. So I just planned a seven-course dinner that I cooked myself and invited a bunch of friends, things like I built an igloo in Colorado one winter and actually cut ice with a chainsaw and built blocks.

A woman that I had met and didn’t know very well had texted me on a random evening and said, “Hey, are you free on…”—I think it was like a Tuesday afternoon. And I was like, “Well, I’ve got work,” and I was like, “Why?” And I knew she used to work at the White House. I was like, “I could be free. What’s going on?” She’s like, “Oh, do you want to drive a press van when Obama is in town.”

I didn’t really know the full extent of what she was asking. And it turns out that when the president travels, they invite random citizens to drive all of the vans in the motorcade. And so, I’d taken the day off, and I ended up driving one of the staff vans in the presidential motorcade from San Francisco down to Stanford in Palo Alto, so the president could give a speech.

I met the president. And my wife was like, “Well, I have work. Should we do this?” And she ended up driving a press van. It seemed like something where on two days notice to just not go to work for a day and move things around for some random thing that a person you just met told you about, like don’t do it. But it ended up being some crazy wild experience.

Mad Fientist: Fantastic! So saying yes, that’s a good tip for everyone. And then, do you do anything to actively seek some of these stuff out?

Chris Hutchins: Yeah! So, what’s interesting is San Francisco has an opportunity for a random meet-up every day. And so I probably go to events around San Francisco somewhat regularly—a little bit less so since starting a company, but I’ve tried to create the bar of my monthly experiences as things that I couldn’t just do any day.

So, if you were talking to me in 2008 or 2007, I’d be like, “Yeah! Going to meet-up of entrepreneurs would totally be this monthly experience,” now in San Francisco, it’s like, “Oh, I could literally do that every night if I wanted to.”

And so I’ve been trying to raise the memorability bar to something that I would remember for the rest of my life. And that was really the idea. I didn’t want to ever look back on life and say, “April 2015, nothing happened. An entire month went by, and not one memorable thing ever happened.”

It seems like life should be something where, at least once a month, something memorable happens.

Mad Fientist: That is very cool. I really like that.

So, to get back to your story, you’ve just been laid off, you create this organization to help other people that are laid off. Where does that go from there?

Chris Hutchins: So, from there, I went down a path of helping people put these events on. We ended up having sponsors. I ended up meeting some of them. They were really excited by a few different random pieces of my past, one being putting these events on, one being doing some investment banking. And I ended up getting a couple of different freelance jobs.

And so, it turns out that actually ended up creating—while Laid Off Camp never made money, it did create an income stream through the relationships I built that sustained me for the next nine months. And because I was in laid-off mode, we were super efficient those next nine months.

I went to every event I could that had free meals. I would get company swags. I had tons of free shirts and all kinds of stuff.

Mad Fientist: That’s so cool. Yeah, it’s amazing what comes from things that don’t look like it can earn money themselves, but then they lead to other things.

And that’s sort of what happened with the Mad Fientist. It’s like you would never start a blog on financial independence and hope to make money over it because you’re telling everyone that reads your site not to buy anything or not to spend money. But then it’s just amazing .
Like the card tool that I created before the Mad Scientist is now starting to earn money as a result of having the Mad Fientist. It’s weird how that happens. But I think when you serve people and you help people out, then good things just come back to you some way.

Mad Fientist: Yeah, I think that’s my number one rule I tell people about financial independence. The creativity you get from having free time often leads to making money. So people are kind of rapidly trying to save enough so they can stop working, and then they have all of these interesting opportunities to pursue their passions. And maybe that’s a blog, maybe that’s a tool you make, maybe that’s a company you start. And then, you end up actually making more money than you thought.

So, it’s almost like you could take whatever you think you need for financial independence and hair cut it by 30%—you probably could argue that’s not the most conservative approach, but it seems to kind of be a rule of thumb that probably works more often than not.

Mad Fientist: Yeah, I couldn’t agree more. And the more and more people I interact with, not only bloggers and things (obviously, they have something that they’ve been working on even before financial independence), but just even people at the meet-ups that I go to, it’s just amazing what they’re doing, and yes, they’re generating a lot of income that they didn’t expect.

So, any time anyone asks, “Oh, the 4% rule, is that really going to be perfect for the future?” and it’s like, “Wow! Nobody ever knows.” But you’re 35 years old, you obviously are a hard worker, you’re intelligent, and you’ve been able to accomplish this. Even if the market’s tanked, I think you’re going to be fine, and you’ll figure out a way to earn money. And you’ll probably be earning money anyway that you didn’t expect.

So, to get back to your story, how did the company start that you eventually then sold to Google?

Chris Hutchins: Yeah! There’s a big long interlude that I’ll just skip over. And if we want to, we can come back.
My three contracts have come up. And my wife’s job that she had, she didn’t love that job, and it was not the best work environment. And we were like, “You know what? We’ve been being really efficient with our money which resulted in a little bit more savings that we had thought,” and I’d always been kind of a miles and points nerd, “We have some miles and points saved up,” and we just decided we were going to take two or three weeks and go on a trip before we kind of pedal to the metal and figure out what we want to do for our careers.

And that two to three weeks ended up turning into a seven-month trip around the world where we spent I think less than $30 a day for seven months. We were renting our apartment furnished back in San Francisco for a little bit more than we were paying for it because a furnished apartment can rent more. That whole trip ended up costing me like $7000. But I think the rent arbitrage ended up making us like $500 or $600 a month. So it ended up costing us just a few thousand dollars each.

And so, that happened. And we came back. And we were like, “We need to get serious about what we want to do.” And I had been given an opportunity to speak at a conference called South by Southwest. And we actually ended our trip flying straight from Singapore to Austin. And I gave a talk about being [fun employed] and how to turn that into something. And at that conference, I was like, “I know that I want to start a company one day. I know that I want to work in technology. I need to go spend a little bit more time learning. I’m going to find an amazing company.” And I sought out a company that I knew had a great group of investors, a great group of founders and employees and was in a kind of an interesting space at the time.

I went there. I wanted a job there. I did the atypical job search thing of, instead of sending a resume to a hundred companies, I just picked one company. I was like, “This is the company. I’m going to work at this company.” And every time I met someone, I was trying to find the right path to that company.

I ended up finding someone who convinced one of their investors to convince the founders to let me give them a presentation on why they should hire me. And so I put together like a 20-slide presentation and gave it to the two founders of the company and said, “This is why you should hire me.” And I think they turned around and said, “As I now know as a founder of a company, anyone that’s willing to go to those lengths to work here, we can find a way to make that hire.”

Mad Fientist: Right!

Chris Hutchins: And so, I worked there for about a year. And in that process, I had met a guy named Kevin Rose who had started a company called Digg before. And he was looking to start another company. And he was looking for someone that could just essentially hustle to figure whatever necessary out and just make everything happen.

And so, he had asked me, “Hey, do you want to come and start this company with me? We’re getting it off the ground. It’s going to be a mobile incubator.” And it just seemed like the perfect opportunity.

It was everything I like to do. It was a new challenge. It was starting at the ground floor. And that led to that company where we spent about a year trying a few different mobile apps. I ended up doing operations, HR, product management, finance, accounting, business development—basically, every function of the company.

And about 11 months into the company, Google+ was just trying to get a lot of their social efforts off the ground. And there was an opportunity for that team to transfer over to Google in what I guess you’d call an acqui-hire because they didn’t necessarily want to keep the product. And so we all went over there and worked for Google+ for a little bit.

Mad Fientist: Wow! That’s fantastic. And I just want to highlight the job searching advice again because I think that’s incredible advice. Rather than just spray out a hundred resumes, generic resumes, to a bunch of companies, just targeting one and then doing everything you can to get that job…

Yeah, I’ve been on the other side of the hiring table as well a little bit later in my career. And if somebody did that, it would just be like a no-brainer. If they worked that hard to get the job, then you know they’re going to really want the job and enjoy the job hopefully and keep working that hard for your company. So I think that’s just incredible advice.

So, you started working at Google. Actually, before that, I would like to just ask how that year was. Did you love it? Was it everything that you thought like entrepreneurship and startups would be?

Chris Hutchins: I think there’s this allure that entrepreneurship, running a company, starting is just like super easy and exciting and just amazing every day. And it’s a hard job.

I try to convince people not to start companies because I know that the people that end up doing it are probably the right people. And people that I can convince not to in a 5-minute conversation probably shouldn’t do it in the first place.

But yeah, I mean it’s tough. We launched a mobile app. We tried to figure out how to make it work. We thought it was an idea that people would like. The product was called Oink. And we let people rate things at places.

So if you went to a restaurant, you could rate the meal you had, you could rate the cocktail you’re drinking. If you went to a gallery, you could rate the exhibits or the pieces of art you saw. We thought it was a great way for people to find things more specific than a venue.

But it’s a lot of data to input. We add a core group of users that added the data. But most people just wanted to use the app. And there just wasn’t enough data in there. So it had a really chicken-and-egg problem which was we needed data at restaurants to let people rate things, but people didn’t want to put the data in unless the app was useful.

And so, it was tough trying to make everything work. And I think if you are cognizant of how tough it will be, you’ll force yourself only to work on things that you really care about which is why now that I’m running the company along with a good friend of mine as co-founder, we both care about the personal finance space so much that, when stuff is hard, it’s easy to overcome because you actually really care about you’re working on.

And I think that’s the most important lesson. Make sure that whatever you’re going to throw your life into, you care about at almost a crazy level because running a company is hard.

Mad Fientist: That’s really good advice too. And even something as just a silly little blog as well, it’s like you’ve got to love the topic to really write about it for long enough to see any sort of traction. And if you don’t, that’s why you see so many people just quit after a year because it’s not easy. And it takes a long time for any sort of success, which I’m sure it’s the same in the startup world as well.

Chris Hutchins: Yeah! I mean, at Google, my path led me to Google Ventures where I was a venture capitalist, and we’re investing in startups.

We kind of expected that, more often than not, our early stage investments would fail. Entrepreneurship and startups is not something where the hit rate from ground zero is like, nine out of ten times, it works out. So you just have to be aware of that.

I told someone once that you have to be aware of the fact that this company might not work out. Compartmentalize that, throw it away, and act every day as if it’s going to be the biggest thing in the world because you have people’s jobs depending on it, you have investors.
And so, I run every day as if it’s going to be incredible even though, deep in the back of my mind, I know it’s a hard thing to make work.

Mad Fientist: Sure. That’s definitely a good way to look at it because you can’t be just fearing that all the time, but you have to keep that in mind at some points too I’m sure. So you’d mentioned that you were renting out your house during this trip. So I assume that you had bought before all of this took place?

Chris Hutchins: No, actually, we were doing what I guess you would call rental arbitrage. We have rented an apartment. We had then sub-leased it on—I think at one point, a 3-month, and then a 2-month, and then another 2-month basis as a furnished apartment.
So, we hadn’t bought any property yet. It wasn’t until we came back from our trip that we started thinking about “Okay… well, where do we want to live? We’ve lived in this apartment for a long time.” It was one of those kind of industrial lofts where the bedroom looks down to the living room. So if you ever had friends or family stay over, everyone can see everyone at every point in time except in the bathroom.

So, there is very little privacy. My wife and I were both working when we got back. On a stressful day, if you want to just like to have your own space, it was like, “I’m going to go to the bathroom.”

And so, we were casually looking for places for maybe a year and a half once we got back from our trip. And it wasn’t until one weekend when my parents were in town—and when you’re in your late 20’s, and your parents are visiting a new city, it’s like, “What do you do with them when you’re not eating? Do you go to the museum…?”

And so, on the third day, it was like, “I don’t know what to do. Do you want to go look at houses? My parents were like, “Yeah! Let’s go look at open houses.”

And so, we just went to look at open houses. And it was on the last house that was supposed to close in five minutes that my wife and I just totally saw the opportunity to buy this house where there was essentially a third bedroom with its own entrance that we could turn into a studio. And we were like, “This is it!”

We knew we wanted a place where we could make it more affordable. And San Francisco’s a city at least where the cost to rent a room compared to the cost to buy the same number of square feet in mortgage payments is kind of opportune for the purchaser—at least it was five or six years ago.

So, it seemed like a great chance to do something. I was fortunate to be able to take out a second loan from my parents for part of the down payment and pay them back over time because San Francisco real estate is very expensive.

And so, I recognize that’s not something everyone has. And I’m pretty lucky for it. But the most amazing thing was finding a way to—I guess I now learned years later is called house hacking where you can turn a home you own into income that as property prices and real estate and rents went up, now actually pays for pretty much our entire cost of living.

Mad Fientist: Wow! That’s incredible. So you’re still living in the main house, but then you’re renting out the studio?

Chris Hutchins: Yeah! It’s a three bedroom house. And one of the bedrooms is on the ground floor. And we’re on the next floor up. It has its own entrance. And we installed a new lock on the door that locks from the inside. And we rented out like a studio.

In most cities, it would be strange to have a studio without a kitchen. But with so many startups in the Bay Area that provide all the meals and with restaurants and cafes on every corner, it ends up there are a ton of people who are young, single, don’t cook that are just looking for a place where they can have a nice bedroom and bathroom and don’t really care about the kitchen aspect. There’s a mini fridge and that kind of stuff in there.

And so, the income from that has helped us kind of subsidize the cost of living and put us in a situation to be able to save even more than we thought we could.

Mad Fientist: That’s really cool. And yeah, I would have never thought that you could rent a house without a kitchen, but it makes sense in the Bay Area, definitely. That’s crazy.

So, I’d like to chat a little bit about Google Ventures because I’m sure you learned a lot that you now are able to use as the founder of Grove. So what were some of those big lessons that you learned over those years working in Google Ventures? And how long did you actually work there for?

Chris Hutchins: So, I was at Google Ventures for about three years. I think in my time there, we probably did easily over a hundred investments. I was probably involved in 20 or 30 of them personally.

And man, I could probably write—I’m sure there are plenty of venture capitalists who could write longer books, but I feel like I learned so much as someone who both had started a company, went to Venture, and then left to start a company.

I think one of the biggest things was how important the people are—not just the people who start the company, which I would say was my number one requirement in investing in companies. At the earliest stages, it was never about some business plan that in fact if someone had sent me would be a deterrent from investing in their company. It was always about the people, how passionate they were about the industry.

You watch companies face adversity. And the thing that gets them through it is either luck or perseverance. And it’s really hard to bet on whether people will be lucky. So it was much easier to bet on people that seemed so passionate and resourceful about the thing they were doing that they would be able to get through anything.

And so, watching people do that was amazing. And it made me realize how important hiring is and how important finding the right people to surround yourself with at a company is.

And I never would have thought three or four years ago that, as the founder of a company, you would spend half your time on people. I thought, “Oh, half the time, I’ll be running the company and creating the products.” But I would say half the time…

And I would encourage other founders do the same, making sure the right people are in the room, making sure the people that are in the room are as efficient and empowered and capable as they are.

And so, we spent a long time finding the people who work at Grove now. And I couldn’t be more excited about the team we have. And I hope that just continues and it stays a focus. I don’t think we would be able to achieve any of what we’ve done or we will end up being as successful as I planned for us to be without all the people here. And it’s certainly impossible to do without them.

Mad Fientist: So, did you enjoy that side of it, the venture side, or did it get you itching to have your own startup? Is that how that led to Grove or…?

Chris Hutchins: So, I was [fortunate that timing] made it happen in that Google Ventures had gotten so big that we stopped doing early stage investing, and I kind of loved the early stage of it, so it forced me to think about what was next. I mean, it’s one of those things where you’re watching, and every day, someone comes in and says, “Here’s the dream. I’m going to go chase it. I’m more excited than you’ve ever seen excited about anything.” You’re like, “Great!” And then, they get to go do it. And you get to watch them do it.

That is something that I think people who have done it a few different times are like, “I remember that, the nostalgia. I’m okay not doing it.” And a lot of younger VC’s are like, “Yup! I want to go do that.”

And so, I wanted to make sure I wasn’t running blindly. I wasn’t just starting a company for the sake of starting a company. I didn’t want to just go, “Oh, I’m going to go start a company.” I wanted to be very aware of what I cared about, things that I loved, to make sure that if I did start a company, that it was something that, when times got tough, I would still be excited when I needed to convince people to join me on this journey. I could do it from the deepest bottom of my heart because I believed in it.

And I can imagine how hard it would be to do all of those things if it wasn’t something that was just so core to your passion.

Mad Fientist: So, that brings me to another question. So you’re financially independent. You probably made a good amount of money from selling a company to Google. Your real estate is paying your living expenses. And you’ve been a great saver.

So, is it that that made you start another company? You could’ve just hung out and went back to Southeast Asia and hung out on beaches with your wife if you wanted to.

What is it that made you want to start that company?

Chris Hutchins: Yeah. I mean I think similar to the way that I never knew there was an entire movement about financial independence, the US is interesting in that people don’t really talk about money.

And so, I had always been a great saver. I had convinced my wife to go down the crazy path of doing strange things to optimize money and travel and life. I convinced her it made sense to have random people live in our house with us to save money. And I think she’s on board though that wasn’t an easy adventure.

And what lead from that was, as I started to build a reputation in at least Silicon Valley with a lot of people as being this kind of crazy person that doesn’t have to sacrifice life to still be able to save.

I would say it’s maybe less about being frugal and more about optimizing for me. And so friends of mine would say, “I know you’re this person that’s always saving money and that’s always trying to be financially dependent. But you and your wife took a trip to Japan, and you did so many amazing things. I don’t understand.” And I was like, “Well, we’ve been playing the miles and points credit card game. That’s it!”

And a good recent example was a friend of mine. There’s a company called Peloton. And they make an indoor cycling bike with a built-in LD display and classes. And it ends up actually costing about $2500 to buy this indoor bike and $40 a month. But it beautiful. It has these great classes. And a friend of mine friended me on the platform and was like, “I don’t understand, you never spend any money, how do you have this expensive thing.” I was like, “Well, actually, I bought a $300 indoor bike. I mounted a couple of sensors that I bought for $30 on Amazon to it. And then I mounted an iPad to it. And now for about $400, I’ve built my own version of it—and I used their iPad app.
And so, my kind of mantra in life is I’m not trying to tell people to go stay at home, never eat out, never travel, and buy beans and rice so that you can retire early. Find the things that matter to you and optimize your life in a way that they can be affordable within your means so you can still do all the stuff you love.

And so, as I did that regularly and people kept bringing it up, they’re like, “Yea, how do I do that? Is there a service where, instead of asking you a question, we could like sit down, and you could just help me figure out how I could do that better?” I was like, “Surely, that exists… of course!” It’s like, “People had money issues for centuries. There has to be a way to make this happen.”

And I started looking at the industry. I was like, “Financial advisers, of course! Everyone needs a financial adviser. This must be what people are describing.” And as you look at the industry, you find out that most financial advisors in the US have no obligation to act in a client’s best interest.

And so many of them are pushing products that aren’t in people’s best interest. They’re pushing life insurance policies that make them really large commissions, but are nowhere near as good as the alternative. And so that’s not great.

Some of the ones who do have this fiduciary obligation to act in your best interest, many of those financial advisors only work with people with millions of dollars—which is great if you have millions of dollars, but not great if you’re trying to get to that point.
And so, I realized that there wasn’t really a resource other than reading blogs and learning to do something on your own for people to get financial advice before they had millions of dollars that was in their best interest.

Mad Fientist: And even the people that are reading the blogs. I get e-mails all the time who just want someone to look at their exact situation and help them with their exact numbers and not just some general numbers.

So, even the people that are reading the blogs, that’s still something that’s in high demand I would say.

Chris Hutchins: Yeah! And so, that was the conclusion we came to, was “This is crazy. There’s not a single affordable way for someone to get personalized financial advice.” All the startups I had seen had been focused on very specific problems like, “Oh, if you know you need to invest for 30 years, we’ll create an automatic rebalancing portfolio for you. It’s like an even better version of your 2040 retirement fund.” But when it comes to “Understand my situation. Help me figure out if I should be spending more, saving more, whether I have enough money to take this vacation or how to prepare to make sure that I can save enough to buy a home or send my kids to college,” there wasn’t a service that really was helpful that didn’t cost thousands of dollars a year.

And I was just so motivated by the fact that my life had seemingly been so fortunate and great because I had some of these core principles that I somehow was fortunate enough to be born into or learned. And for some people, coming to those conclusions is a lot more difficult.

And it seemed like this is something anyone can do. We have to find a way to make it possible because people would just be so much happier and so much less stressed. I’m sure you know money is one of the biggest causes of stress in the world and certainly in relationship issues and all kinds of stuff.

And so, if we could find a way to affordably help people be confident in their finances, we could do a lot of good.

Mad Fientist: That’s fantastic. So yeah, can you please describe what Grove offers?

Chris Hutchins: Yeah! So, we took a common principle of financial planning which is going through, taking an inventory of how you’re doing and planning for the short term and optimizing your situation. We kind of created a little bit of a program around it.
We hired a team of financial planners. We have CFP’s that work at Grove. And we offer financial planning. Right now, we will make a personalized financial plan. And you’ll work with a human to do that assisted by software we’ve built for $600.

I think the average cost of financial planning in the US right now is a little over $2500. And it’s primarily driven by poor software and a previous generation’s demand for services that were in person and very, very, very hand-holdy. And so we took the demands of a new generation and built some software, so that we could make financial planning affordable.

So, for $600, you can work with a financial planner. They will help you make sense of your situation and your goals. And we’ll build a personalized plan that walks through what you can be doing today and how you can plan for the future and how your current situation lines up with your goals and help you get on track to something that makes sense. And we’ll leave people with really actionable advice where they can know exactly what kind of account they should open and how much to put in it to start having an emergency fund or the exact investment options they should put in their 401k.

Mad Fientist: And so, their fiduciary advisors, you don’t have to worry about them selling you something that’s going to benefit them instead of you. So that’s fantastic.

And I’m assuming with your background, the advisers that you do have on staff are familiar with the whole financial dependence/retire early sort of thing that seems to be taking off all over the country these days?

Chris Hutchins: Yes. We were lucky. We found two amazing first CFP’s to join the team that are both in our generation and understand the modern needs of people in their late 20’s or 30’s, early 40’s, but who’ve also spent almost a decade each in the industry. So, we have both the relatability of someone that understands the needs of this generation, but also the experience of someone who’s seen a wide breadth of concerns and issues.

Mad Fientist: How big of a role does the technology play? Is that just like sort of streamlined the onboarding process so that the information that gets to the advisor is easier to then process? How does the technology integrate into your system?

Chris Hutchins: So, when you sign up for an account with Grove instead of kind of filling the traditional shoe box of financial statements, we’ve built technology to let you sync your accounts. That helps both for the ingestion of information early on, but it also helps down the road on an ongoing basis. Our advisors can kind of stay in tune with what’s going on and proactively be able to help reach out and help with things.

So, if an advisor noticed, “Oh, your bonus was paid out,”—hopefully, you work in a company, unlike me, where the bonuses do get paid out, hopefully we can help you figure out what to do and how to adjust your plan accordingly when things like that happen.

It also helps with just the creation of a financial plan. Traditional software would require the advisor to manually input a lot of data and would spit out a 50- or 60-page PDF that doesn’t make much sense. And so our software was designed with this generation in mind, so that the financial plans we generate for people are both personalized, but also just comprehensible. They make sense. We wrote them in kind of common, understandable English instead of lots of jargon-y terms. We have a full-time designers so that they actually look good and they make sense.

The bar is pretty low, but I think we’ve built the best financial plan there is. And so both technology and design have really made this something.

It’s a shame that with other advisers—and not all of them, but with many of them—you’re paying for an advisor to explain something to you because the end product was produced by software that feels like it’s a decade old when, if it were just designed properly, and it were written well, the average person could actually understand it themselves.

So, we’re trying to trim away the time that advisors spend doing things that people can do themselves and make sure that the advisors really add value in understanding someone’s unique circumstance or tackling a challenging issue instead of just walking someone through their net worth which is something that, if you design it right, people can understand on their own.

Mad Fientist: Very cool! If someone who is similar to you in that they get really excited about the idea of starting a business to help people and things like that, how big of a role do you think moving to San Francisco played? Is it worth doing in sucking up the higher cost of living to get out there to do these things? Or do you think you can do it elsewhere, it would just be a lot maybe more complicated or time consuming or it takes longer to get to where you’ve gotten to in your career?

Chris Hutchins: Yeah, I think it is an interesting question. A part of me wants to say, “Look, if you want to start a venture-backed technology company, and to do that, you want to hire the best talent of engineers and designers, and you want access to capital and everything, San Francisco, you could make a compelling case, is the best place in the world to do it.”

But if your bar isn’t “I want to start the hardest technology company in the world, and I need access to the best engineers,” and you want to start a company, and you want to provide a service, and maybe you want investors, and maybe you don’t, I’m not convinced that you have to do it in San Francisco.

There are great investor ecosystems in cities all around the world—New York, Boston, Chicago, Denver, Austin, Texas, LA, London. There’s a lot going on in Southeast Asia. There’s a lot going on in Japan, in Korea and the UK.

So, I’m not convinced people have to move to San Francisco. I think that if a company ends up going down a path to being the next Google, Apple, Tesla, it will probably ultimately make sense for them to have some amount of the company based here because that’s where a lot of the talent is.

But a lot of what I got from being in San Francisco could have happened for a few week-long trips where you go meet a lot of people, go to a lot of events, schedule a lot of meetings. But some of it is just the serendipity of you’re at a dinner and you run into someone and that conversation leads to something that maybe is next week, and if you didn’t live here, it would be hard to do.

So, I’m a little torn. I think there are some amazing people that end up in cities all around the country. And I could imagine if, having started Grove in Austin or New York, I don’t think it would have held us back. But I guess it depends how important the capital needs and the human resource needs are to how important it is to be in those hubs. It’s certainly a lot cheaper to start a company, hire a team, rent an office basically anywhere else in the world. So it is not necessary to be in the Bay Area. But I would if you’re serious about starting a technology company. I would make sure you spend a few weeks out here just meeting interesting people.

Mad Fientist: The other question I had is everything you learned from Google Ventures and your experience with that—obviously, you’re too busy now, but later on in your career, do you ever see yourself doing any angel investing or…?

Chris Hutchins: It’s funny. While you could look at my path and say, “Wow! You’re really risky. You left jobs and you took the path of entrepreneurship,” when it comes to my personal financial situation, I’m fairly conservative.

I like to save a lot of money. I like to do index fund investing. I’m not on the train of dumping my entire net worth into Bitcoin right now.

And so, when I think about angel investing, it’s really a tough subject for me personally because I feel like I have access to lots of interesting companies and I’ve had the opportunity to invest in companies that ended up doing really well.

But my kind of personal financial independence journey and my risk profile doesn’t totally match up with the incredible amount of risk that comes with angel investing and investing in private companies.

And so, at least for the time being where I work at a super early stage startup (my wife works at a late stage startup), we live in the Bay Area where real estate prices are tied to the tech industry, it seems like all my investing personally would probably benefit from being a little bit removed from the same market dynamics.

But I could see if we ended up retiring and moving out of the Bay Area and not working startup jobs, would that be a good part of diversifying the portfolio? I could see that. But for me, I tend to tell people that to make angel investing work, you really need to make sure that you’re going to write 10 or 20 different investment checks. And the minimum amount of investment for a lot of companies are anywhere from $10,000 to $25,000. And so if you’re going to write ten $20,000 checks, you need to set aside $200,000 to really get into angel investing.

And I have been very fortunate—but not fortunate enough—that I have $200,000 that I want to allocate to something that risky.

And so, for me, it doesn’t fit into the profile. But I say that and I have friends that have put a few thousand dollars (and maybe $10,000 or $20,000) in companies and turned it into millions of dollars. And I’m like, “Man, that was…”

If you had put all of your net worth into Bitcoin a year ago, you’ll be happy today. But the risk that comes with that—it would also shock no one if the price of Bitcoin tomorrow—and the funny thing is it doesn’t matter when you listen to this podcast. If the price of Bitcoin tomorrow drops by 50%, I still don’t think anyone would be shocked.

And so, I don’t know. I like to play a little bit more conservative with my finances given how much risk I take in my day-to-day life and job.

Mad Fientist: That sounds like a very wise move. You mentioned retirement. And obviously, you’ve saved for financial independence and have been a great saver and investor over the years. Can you ever see yourself actually retiring?

Chris Hutchins: Yes. I considered myself retired when I left Google. And so, in my mind, I am retired right now. But retirement to me means you are only working on things you care about. You’re not having to do a job for the purpose of making money that you don’t love.

And so, in my mind, I kind of am retired. But from the perspective of not doing anything from day to day—you know, when my wife and I traveled for seven months, six months in, we were kind of like, “We just have to do something. We want to get back to work.”

And so, I’ve been in a place where six months was as long as I could go without doing anything. And so what that means is probably not. I will probably be finding some way to fulfill my drive and passions and energy that isn’t just sitting on a beach or on the porch reading probably for the rest of my life.

My dad is almost 70 now. And I think he’s still going. He runs a good part of the company he works at. He’s talking about retirement. And in his mind, retirement is stopping working 50 hours a week and starting working 30 hours a week. It’s not stopping working.

So, I would be shocked if there’s ever a time where I just want to sit around and do nothing. That doesn’t seem that exciting to me.

Mad Fientist: Nope, me either. And yeah, I’m impressed you lasted six months. I think by two and a half months, I was like, “Alright! I need to do something. This is crazy.” Even though it was super fun—nice Thai beach, perfect weather, great food, super cheap—I was like, “No, I need to get back.”

Chris Hutchins: [cross-talking 57:54]

Mad Fientist: Oh, it’s amazing, isn’t it? So good.

So, I usually end all my interviews with just asking what’s one piece of advice you would have for someone who’s hoping to achieve financial independence?

Chris Hutchins: Yeah. My biggest piece of advice is two things that I’m straddling. Well, the biggest one is just evaluate everything on whether it makes you actually happy. There’s a great book I read called Happy Money which has presented me with a lot of data to think about what really makes you happy . And in a world where people are buying new sneakers and buying hand bags and clothes that are really expensive, I kind of came to the conclusion that like those things didn’t make my life more fulfilling.
And so, the easier you can get out of the mindset of spending money on things you don’t need, the easier it is to start to save more.

The biggest rule of thumb I tell everyone is it’s almost impossible to find an investment where you can double your money. But if you can cut your spending in half, you’ve essentially done that.

Mad Fientist: Right, instantly.

Chris Hutchins: And so, just being more aware of how you’re spending and optimizing it exclusively around happiness, and not what you think society is telling you, and getting really creative about things, whether it’s points and miles or those crazy sites where you click shopping portal cashback links, all those things end up adding up over the over the years. And the more you do and the less you spend, the easier it is.

My framework for savings isn’t atypical. A lot of people I talk to, they’re like, “I’m going to save 20%.” As far as I’m concerned, a hundred percent of every dollar my wife and I make goes into savings. And I treat every expense as “Do I want to dip into my savings to make this purchase?”

And so, it can be overwhelming for some people to make the transition to that idea. But in my mind, my savings rate is a hundred percent. Everything goes into savings. And if I want to buy a pair of shoes, does this pair of shoes compare to where this money will be if it earns interest and compounds over the years?

There was a great conversation someone had with Warren Buffett where he was trying to buy furniture in his house. HIs wife suggested this couch. She’s like, “But it’s only $700, and it will last 30 years.” He’s like, “No, it’s not only $700 because if that $700 compounds over the next 30 years, it’s so much more. So what you don’t get is that this is actually like a $10,000 couch.”

Mad Fientist: Yeah, that’s a great answer. And it’s amazing how similar we are. And as you were talking earlier about just optimizing, I think that’s just the key. You’re not depriving yourself. You’re just optimizing.

And everything that you’ve talked about, it’s like, “Yeah, I do that,” all the travel hacking, all the shopping portals. And it does add up. It’s just amazing. You feel like you can do everything you want to do.

So, thank you so much for coming on the show. It’s been fantastic. If people want to learn more about Grove or maybe get in touch with you, what’s the best way? Just go to UseGrove.com?

Chris Hutchins: Yeah, you can find me—Grove is UseGrove.com. I’m @Hutchins on Twitter. And yeah, feel free to reach out. Check us out.

Actually, I could probably set up UseGrove.com. And anyone that goes to that link could just jump through the wait list right now if people want to check it out.

Mad Fientist: Oh, cool! Yeah, I’ll link to that in the show notes. And yeah, thank you so much. Again, it’s just been a pleasure. And hopefully, I’ll see you in San Francisco next time we’re there.

Chris Hutchins: Yeah! I’m excited. Come on out. And thanks for having me. This has been great. It’s not every day you get to spend some time talking to people that think so similarly about savings and stuff in a day and age where people are spending lots.

Mad Fientist: Absolutely! Alright, man, I appreciate it. Hopefully, I’ll speak to you soon.

Chris Hutchins: Sounds good! Take care.

Mad Fientist: Alright, bye.