Episode 76: Managing Personal Investments with David Banks - A Tech Professional's Journey

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Host: Christopher Nelson

Guest: Davids Banks

In this episode of Tech Equity and Money Talk, David Banks shares insights from his career transitions, particularly focusing on moving from a successful tech sales career to becoming a money manager.

David had a 40 year career in software sales that saw him through three IPOs, Interwoven, VMware, and Splunk.   

David built valuable skills in Tech Sales that allowed him to work in sales and sales management roles in companies like VMware and Splunk.  

After Splunk, David continued building his financial company, Addison Financial LLC which is the vehicle for managing their real estate investments and hard money lending portfolio.

Connect with David Banks

https://www.addisonfin.com/

https://www.linkedin.com/in/davidlbanks/

In this episode, we talk about:

• Establishing a Business Mindset - David Banks emphasizes the importance of treating investments as a business. By forming an LLC, he and his wife were able to separate their personal finances from their investment activities. This separation not only provides legal protection but also creates a clear framework for managing their investments. It allows them to pay themselves from the business, track expenses, and maintain a professional approach to their financial activities.
• Regular Performance Reviews - David mentions that he and his wife conduct monthly reviews of their investment performance. This regular assessment helps them stay informed about how their investments are performing and allows them to make necessary adjustments. By tracking metrics such as cash flow and the health of their investments, they can identify trends, successes, and areas needing improvement. This discipline ensures that they remain proactive rather than reactive in their investment strategy.
• Financial Audits and Goal Setting - Before David left his job at Splunk, he undertook a financial audit of their expenses. This process involved analyzing their spending habits and identifying areas where they could cut back. By understanding their financial landscape, they could better prepare for the transition to a lifestyle without a regular paycheck. This kind of financial audit is crucial for anyone looking to manage their investments effectively, as it helps in setting realistic goals and understanding the cash flow needed to sustain their lifestyle.
• Intentionality in Financial Decisions - By treating their portfolio like a business, David and his wife have cultivated a more intentional approach to their finances. They set clear goals and develop plans to achieve them, which is akin to a business strategy. This intentionality helps them avoid emotional decision-making that can often lead to poor financial choices. Instead, they focus on data-driven insights and strategic planning, which ultimately leads to better financial outcomes.
• Networking and Continuous Learning - David highlights the importance of networking and continual learning in managing investments. By engaging with other investors and industry professionals, they gain valuable insights that inform their investment decisions. This collaborative approach mirrors business practices where networking and knowledge sharing are vital for success. It also reinforces the idea that managing a portfolio is not a solitary endeavor but rather a community-driven process.

Episode Timeline:

• [00:01:20] Transitioning to money management.
• [00:05:00] Cash flow investment strategies.
• [00:10:10] Cash flow investment strategies.
• [00:12:07] Running your portfolio as a business.
• [00:17:12] Transitioning to full-time investing.
• [00:20:18] Private equity education and networking.
• [00:25:44] Financial audit for lifestyle changes.
• [00:28:15] Tech business cycles and resilience.