Investment Science - Scientifically Sound Consulting & Investing with Michael Kelly: An EOFire Classic from 2021

0:01Boom! Shake the room, Fire Nation! JLD here and welcome to Entrepreneurs on Fire! Brought to you by the HubSpot podcast network, the audio destination for business professionals with great shows like I Digress. Today, we're pulling a classic episode from the archives, and we'll be breaking down investment science, scientifically sound, consulting, and investing. To drop these value bombs, I brought to Michael Kelly and the EO Fire Studios. Michael is the founder of Investment Science. He has a ton of experience engaging in banking technologies and changing organizations holistically through individuals, operations, and technology.

0:35And today, Hey, Far Nation, we'll talk about how to be successful. You need to have a strategy and a threshold to get to the top. We'll talk about increasing productivity by having a balanced, brilliant business idea. And oh, so much more. And a big thank you for sponsoring today's episode goes to Michael and our sponsors. Nudge, hosted by Phil Agnew, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Ever notice how the smallest changes can have the biggest impact? On Nudge, you learn simple evidence-backed tips to help you kick bad habits, get a raise and grow a business.

1:06Oh, and it's the UK's Fast Growing Business Podcast. A recent episode on how to win any argument shares decade-long research into persuasion from a world-leading neuroscientist. Listen to Nudge wherever you get your podcasts. Ever thought about giving a TEDx talk? It's one of the most powerful ways to share your message with the world. And four-time TEDx speaker, Taylor Conroy from Thought Leader can help you get there. Visit thought-leader.com slash fire to join Taylor's free training where he teaches you how to land a TEDx talk and spread your message to millions. Michael, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with.

1:49Fire Nation, how are you? Mike Kelly from Investment Science. I would tell all the listeners here that in order to be successful, two things people may not know. You need debt. and you need to have some type of beachhead strategy, meaning a very specific focus and a very niche, and reach your thresholds, go to the top of that to get there. And Fire Nation, this is what we're really going to be breaking down here today. I mean, you heard me introduce Michael at the beginning of the show, so you know a lot about him through that bio. We're talking about investment science, scientifically sound consulting, and investing.

2:30So I sort of dive into a question that I personally have is how do individuals, Michael, and firms, how do they stay on top of the latest and greatest when it comes to trends? You just have to go and read white papers in your chosen field, whether it's statistics or business. And there's a lot of theories out there and try to see what do you think would happen in the future and why. And that's actually how our company has been relatively successful in that we learned about data science about 12 years ago in 2009 during the crisis when people were just thinking about these things and concepts. And that's the past few years, that's all everyone's talking about now.

3:14And it's like, well, what's going to happen in the next 10 years? I truly believe it will be a lot of no-code programming, drag-and-drop screens. even like you see with some website builders like weebly and wix but that all programming will become less relevant that's more about the business idea not even about the code anymore so it's can you think of a business idea can you monetize that can you simplify it and you should be successful but you also have to understand the financials so a lot of these startups out there they raise all this money and they spend it on staff and they don't come from a financial services background so it goes down to treasury management right and this doesn't even go into our robo advisor this goes down to if you had a hundred dollars every dollar should be invested differently and that you could have one to two percent in bitcoin no more than that's highly volatile you could have uh some more money in bonds that pay in currencies on different maturity dates, which really means all those currencies tied to different things that go up and down.

4:23And especially if you raise enough money as an entity, I'm not talking about an individual, but as an entity, you could invest 1 % to 2 % in different hedge funds and private equity firms, very sophisticated investments to more or less already have a profitable company before you even start spending. A lot of people take that money and they just don't even set up treasury. So if you take a step back, what do we just say? Stay on top of the trends, read white papers, set up your treasury department, think of a product that you can monetize, keep it simple and innovate. And Fire Nation, one thing that I love that Michael talked about was, can you simplify it?

5:02I mean, so many people try to complicate everything, but it's the opposite. It's simplifying things. It's making things simple because that's going to make things better. And why? Because how you use your time is everything also known as being productive. So Michael, let's speak to that. How can firms and maybe even just individuals in general boost productivity? I think many firms don't really understand the fact that even in high pressure environments, like I come from banking or even in the military, there are some people who are introverted and it's about one third of the population, right so those those introverts would be better off working from home and then there's some people that obtain energy that are extroverted to be around people so identify the introverts identify the extroverts obviously you need to make money but don't fully focus on money there's a corporate culture there's all the different people you know hipster hacker executor that's in silicon valley world, but that applies to corporate as well.

6:08Do the people work well together? So you can have a brilliant business idea, but if the team doesn't gel and you're not managing your finances properly, but if you're also overly focusing on finances, you're not going to succeed. It's like reversion to the mean. Things move back to the average. Don't be too extreme on either end, somewhere in between the two. So Fire Nation, it can sometimes be between the two. And I love how you really have to have that focus on the things that matter and doing those things and then saying, hey, what things can I just take off the plate? What things aren't really moving the needle?

6:46What things aren't really part of that 20 of that 80-20 Pareto's principle? And there are some very, very famous financial authors out there. They publish all the time, books, posts, they're being interviewed on TV and just publications in general. What, Michael, are every single one of them missing? We're actually writing a book that should be out next year, and it's touching these topics. So unfortunately, and this is for everybody, there's so much information out there and anybody could publish anything, and it's very hard to know what's correct or what's real. So for example, even many famous financial authors will talk about, you know, this is where you get or obtain the best interest rate.

7:27They talk about the theory. We'll talk about where do you actually get it from in the book and they'll talk about some things like technical indicators bollinger bands for example or a moving average right that's a kernel estimator or smoother they talk about the mathematics but then they don't say let's test it across everything and we could give you some of those outputs in our book and actually say like here's the theory but does it actually work so it's too much theory but it's not enough hands-on but then when you have too much hands-on There's not enough understanding of how it works. Blend the two.

8:03And then you know where to go to get things. And then you know why do these things work from evidence-based facts rather than just, I don't want to use buzzwords, but just basic theory or basic too much of the example somewhere between the two again. Fire Nation, how can you get to evidence-based facts? How can you base your decisions off of those, not theory, as Michael was just talking about? And there's a lot of crazy stuff going on. I mean, population levels. We're actually going to get more detailed about what investment science is and so much more when we get back from thanking our sponsors.

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10:31Visit fundera.com to see your loan options today. That's fundera.com. F-U-N-D-E-R-A dot com. Do you have a message inside that you know is meant to be shared with the world? Giving a TEDx talk is one of the most powerful ways to share your message with the world and Thought Leader can help you get there. Thought Leader is a speaker coaching company that has helped over 550 and counting coaches, speakers, entrepreneurs, authors, and experts land TEDx talks. Thought Leader is not affiliated with TED or TEDx, but they're able to get these results because their founder, Taylor Conroy, is a four-time TEDx speaker himself and past EO Fire guest.

11:09You might be thinking a TEDx talk sounds great, but where do you start? Taylor has put together a free training that's going to teach you how to land a TEDx talk in as little as 90 days. Join Taylor to learn exactly what TEDx organizers are looking for in their speakers, how to write a talk that goes viral once it goes online, and more. Visit thought-leader.com slash fire. Join Taylor for this free training and get your message out of your head, out of your heart, and out into the world where it belongs. That's thought-leader.com slash fire. So Michael, we're back. And before the break, I was teasing the topic I want to get into next, which is all about population levels.

11:48These things are compounding at crazy, crazy rates. What specifically is wrong with population levels? And how do you propose we fix this? With the population levels we have today, it mimics Japan as a case study. and it just means millennials and I myself am on average not having children because if you survey many of them, and this is also in the book that's coming out next year, it has to do with prices being too high amongst inadequate job opportunities and things of that nature. Well, it's that though, and it's also just basically faced on things where that used to be the trend, like forever China, like you could only have one kid or then you got fined heavily.

12:33And so they just created this culture of only being able to have one child for generations. And now, you know, they bumped it up to two because there are massive, massive problems because, you know, they're not being able to, their younger generation can't now support this in, you know, just this imbalance, this, this just inequity that exists now. And they just recently, I think it was a month ago, maybe opened up the three now. So they went from, you can only have one. This is saving the country to like, now you can have two to like, please, please, please have three kids because we need you to have more kids.

13:05So kind of talk about that. Like, what is wrong with the population levels today? And what are some ways that we can fix this? Yeah. And even to your point with China, I mean, they're trying to get people to have more, but some of it even has to do with the inflation levels. And we'll get back to children and how more people could have them. It has a lot to do with Amazon, right? A lot of shopping is done online so that pushes down inflation international trade uh that pushes prices down so prices are down more and the governments around the world have been ultra low interest rates to fight inflation to actually create inflation and then today we have short-term inflation from you know wood tripling and labor issues from all the payments of people out of work that are not going back to work.

13:55So that creates wages rising, prices rising, even in the suburbs, there's basically a housing bubble that will burst. And when we get back to how individuals, how to have them have children, it's more in regards to the fact of how the military does it. I think it's called BAPE, where they look at how many children you have, and you get payment for that. And that would kind of help some of the financial burdens. And then it's doing the mathematics, conducting the mathematics, saying, okay, these children have been paid for, and then the tax basis for those children as they grow up will increase.

14:34Because it's just things are too expensive on average, and governments are trying to solve it, but they continue to print, and then people talk about, well, Bitcoin and things like that, and then you talk to people in banking. and I say it's all just, you can't speak for everybody, but it's all just a game in a way that people are just diving into the latest thing because it's the latest, but some of the residuals will remain. Even the Federal Reserve's stating they might create a digital currency. Fire Nation, this is some serious stuff. These are things that we're going to be dealing with for not just the foreseeable future, for all time.

15:09And I think it's just a topic that's interesting to talk about and think about because these are problems we need to solve. Now, I want to get deep into investment science. So really break this down for us, Michael, like for myself, for Fire Nation, for the layman, the laywoman, what is investment science and why should firms go into this field? What's the benefit? Sure. So investment science itself is technically a holding company for projects that we want to work on. So if we zoom back to 2009, we created a robo-advisor before people were really talking about those things. You know,$100 to invest, different financial products, time frame strategies.

15:54That will be more on the consumer side a few years down the road. That's just to get people excited. That's how we learned all this automation. And then over the past decade, we've been able to save some firms billions of dollars in savings, millions of dollars. If we zoom in on more on employee morale, just by letting some people work from home, we boosted productivity up to 40%. applying the latest trends and technology like agile project management or researching, hey, use this technology for your department. Even if it's the best technology, your department may not have the skill set. So we're objective in the fact that we have no strategic ties to vendors.

16:40But if we have some partnerships with companies, we'll tell you up front. Many other institutions, unfortunately, they have strategic ties to vendors. So, for example, if a company audits Amazon, that's a consulting firm, you're spending all this money, you want results, subjective advice, expertise, they can't give that to you because they audit them. We can give you the purely objective advice. And the third sphere of our company is more with the affiliations we have with small startups seeking funding or alternative investment vehicles for high net worth individuals and or family offices, venture capitalists, things of that nature.

17:23we could connect people to those instruments, which really means in simple terms, we could connect investors that are well sophisticated to models, to entrepreneurs, to large funds that are seeking capital and things of that nature. It's like a two-sided marketplace for everybody. So Michael, we talked about a lot today. I mean, we talked about investment science, about what you do. We talked about population levels, these crazy rates that are happening. We talked about what every financial author and publication are missing. You know, we talked about being more productive. And what I want you to do now is take a step back, share with our listeners the one key takeaway from everything we talked about that you really want to make sure our audience walks away with.

18:10Then give us any way that we can connect with you, any call to action you might have for us, and then we'll say goodbye. Sure. Yeah, it's more just objective consulting without compromise, right? No strategic ties to vendors. That's been scientifically sound consulting and investing, and that we can connect you to the right contact, depending on what you need, and not much more to it other than the call to action would be visit our website at www.investment, one word, scy.com. or give us a call at 917-512-9523. Thank you so much for having me. Fire Nation, you're the average of the five people you spend the most time with.

18:54You've been hanging out with MK and JLD today, so please keep up that heat. And if you head over to eofire.com and type Michael in the search bar, the show notes page will pop up with everything we've been talking about here today. And Michael, one more time, give us that URL and phone number. That is www.investment, one word. s-c-y.com, or you could give us a call at 917-512-9523. That's the phone number, Fire Nation. Dial those digits. Make that phone call. Fortune favors the bold. And Michael, thank you for sharing your truth, your knowledge, your value with Fire Nation today. For that, we salute you and we'll catch you on the flip side.

19:36Thank you. Hey, Fire Nation. Today's value bomb content was brought to you by Michael. And are you ready to rock your very own podcast? Well, if so, check out our free, that's F-R-E-E, podcasting course, where I teach you how to create to launch your podcast for free. Freepodcastcourse.com. Freepodcastcourse.com. I will catch you there, Fire Nation, or I'll catch you on the flip side. Nudge, hosted by Phil Agnew, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Ever notice how how the smallest changes can have the biggest impact. On Nudge, you learn simple evidence-backed tips to help you kick bad habits, get a raise, and grow a business.

20:17Oh, and it's the UK's Fast-Growing Business Podcast. A recent episode on how to win any argument shares decade-long research into persuasion from a world-leading neuroscientist. Listen to Nudge wherever you get your podcasts. Ever thought about giving a TEDx talk? It's one of the most powerful ways to share your message with the world. And four-time TEDx speaker, Taylor Conroy from Thought Leader can help you get there. Visit thought-leader.com slash fire to join Taylor's free training where he teaches you how to land a TEDx talk and spread your message to millions.