The Power Of Third-Party Logistics With Jeff Peterson And What To Know About “Safe” Investments With Chris Kawaja

Much of the success of the eCommerce industry can be credited to third-party logistics, which does the legwork to make sure products are delivered. Dr. Diane Hamilton is joined by Jeff Peterson, the Co-Founder of Geneva Supply. Dr. Diane and Jeff discuss achieving success in the field of third-party logistics.

Investments are only as good as what you get them to become, so you have to be smart about them. Chris Kawaja, the Founder of, sits down with Dr. Diane Hamilton. With years of wall Street experience, Chris developed a skeptical eye towards traditional financial advice. He now owns a variety of assets ranging from eCommerce businesses to legal settlements and real estate. Together, Dr. Diane and Jeff dive into the fast-paced world of investing.

TTL 714 | Third Party Logistics


I’m glad you joined us because we have Jeff Peterson and Chris Kawaja here. Jeff is the CEO and Cofounder of Geneva Supply and the Creator of BizTank. Chris is the author of How to Stash that Cash. We’re going to talk about eCommerce, financial stashing of cash, and so much more.

Watch the episode here:

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The Power Of Third-Party Logistics With Jeff Peterson

I am here with Jeff Peterson, who is the Cofounder and CEO of Geneva Supply. He’s also the Creator of BizTank and recognized by Entrepreneur as one of the fastest-growing companies. He has his show. I’m interested to find out about some of his work with programs that build career experiences for students since that ties into a lot of the teaching and things I’ve done. I’m excited to have you on the show, Jeff, welcome.

Diane, thanks so much. I’m happy to be here and excited to share the journey and what’s been going on in my world.

I’m excited as well. We have a lot in common, having shows. I work on the board at DocuSign with Jason Feifer, the Editor in Chief of Entrepreneur Magazine. He said that you’re one of the most passionate and creative entrepreneurs he knows and that you’re a force.

I did not hate that quote. I did not know and didn’t pay him for that or anything. It’s funny because I had my Live BizTank Speaker series through Zoom webinars since the COVID-19 virus is going on. Everything’s going through Zoom and he was my guest. I had a chance to talk to him so it’s fun.

I need to have him on. I keep forgetting to reach out to him because he’s such an interesting guy. I meet a lot of cool people through my connections.

He’s awesome. He’s one of a kind.

He is. I always like to ask my guests to get a little backstory on what got you interested in what you’re working on? Tell me more about what led up to this success?

We’re lucky, my business partner and I started Geneva Supply years ago. Prior to that, we ran another company and we started doing business in the eCommerce world. Back then, it was only We fell into it because there was a large manufacturer that was challenged. Back then, Amazon was still taboo and they were challenged on being able to handle and manage that business. They asked us to do it and we started doing it. Amazon took us under their wing, taught us their ways, and we figured it out. From that point, more and more manufacturers were asking for us to handle their pain points because it’s different, unique and a fast-moving target. There are so much compliance and differences than a traditional manufacturing distribution retail format.

We’ve specialized and grown within it and gotten that expertise in that eCommerce strategy, where it fits into a traditional format for a manufacturer and what their goals are. We’ve helped them along the way. That’s how Geneva Supply got to be what it is. We’ve already got three locations. We’ve got our corporate headquarters in Wisconsin, out in Charleston, South Carolina, and out in Phoenix, Arizona. We’ll have a location in the upper Northeast and upper Northwest because third party logistics is a big part of the growth for eCommerce. We do digital marketing in-house, eCommerce strategy, and brand management. We’re a one-stop-shop when it comes to manufacturers needing a helping hand that can pivot quickly in the eCommerce platforms.

I’m sure that’s not required. I can’t imagine it. We’re in the middle of the COVID crisis. How are you helping them with their eCommerce strategies? What’s changed?

A lot of the phone calls that I’ve been getting are different than that traditional long-term strategy and changing as Amazon and the other platforms change. What’s different now is, there’s this hyperintensity of the fact of being essential or non-essential on whether a product is being able to be sold on the platform or warehouse by Amazon in their facilities and what all of those other options are that manufacturers weren’t ready for. You’ve got this fulfilled by Amazon aspect through their seller central side.

[bctt tweet=”Third-party logistics plays a big part in the growth of eCommerce.” username=””]

Amazon wasn’t allowing people to send their product into their warehouse and that was a lot of these manufacturers’ only way of selling their product. That halted their business. We are being talked to and asked for advice on how to open up their avenues, channels of distribution, and their capabilities because we do all of those different things. We’ve been a life preserver or a life raft, for a lot of manufacturers during this time to keep their business going, instead of having to sit there and wait to see what happens.

What are some of those other avenues and channels and distribution then?

This is why we’ve got more logistics locations than we ever thought we’re going to have. When Amazon shuts down the capability of you sending a product or your product sitting in their warehouse, you lose that ability to sell it to whoever you want to sell it to. It’s sitting there waiting for a customer to buy it from Amazon. By using us as a third party logistics partner and having that product in our warehouses. It opens us up to be able to ship it to your traditional brick-and-mortar retailers to large box store hubs and direct to consumers for any eCommerce platform.

Also, using that Seller Central platform on Amazon, to reach, market, drive business, and still being able to handle that product and get it to the consumer, even if Amazon is in a fulfillment center crisis where they are now for COVID-19. Also, during the fourth quarter, when Amazon runs out of space. You can’t expect Amazon to always have the same amount of space when year over year, brands are growing by 30% to 40%. They simply don’t have that space available and open space for them to be able to do. We are that extension for the manufacturer to be able to keep things moving forward. Their strategies don’t have to change.

Is there a recommended amount you should do for a business through Amazon that if you get more than that, you get too many eggs in one basket?

The way I look at it is, you want to do as much business on any platform that makes sense strategically. I don’t think that there’s too much business you can do with Amazon as long as you don’t give Amazon all the power internally to be able to leverage you. You’ve got to understand why they’re asking for what they asked for. Why are they not taking a price increase? Why are they asking for a larger freight allowance? Why are they asking for more coop, marketing, and all of this? You have to understand that from their perspective so you can still control your profitability and what you’re planning on doing with your brand. In my opinion, we shouldn’t be worried about how much business is being done on Amazon, as long as you’re diversifying your portfolio and not just doing business on Amazon.

Understanding why they have these decisions that impact your business doesn’t make them change their decision. By understanding it, can you change their decision? Are you saying you accept it and plan for it better?

It makes you understand their point of view so you can create your strategy. If you go into any meeting with any company and you only have one way of thinking and one way of being able to do things, it’s difficult to create those flexibilities for growth as things are changing. The eCommerce platforms are changing rapidly every six months. Every six months, there’s a new rule and compliance that’s going on and manufacturers struggle with that fast pace. You’ve got to understand why Amazon is changing those rules because of efficiencies and their profitability. You have to find ways to adapt and change on the fly and pivot to stay on pace with that growth potential. That’s where Geneva Supply comes into the mix.

I was talking about something similar with my coauthor and my next book about perception and why the ability to understand things from different vantage points is important in the business world. How important do you think is perception to success?

People say perception is reality and that’s so cliché, but it has its truth within it. When you go into any relationship or if it’s an interview process for a job, you’ve got to know what the other side is offering and what those challenges are for you to fit in. You can’t be the square peg trying to jam yourself through the round hole constantly because you’re simply not going to grow. You’re simply not going to meet the expectations of the marketplace. You have to look at it as a perception. You have to turn the perception of what people look at. Let’s use Amazon as that example. Take that perception, but do your investigation, understand it deeper, and start to turn that perception into reality, so you know how to act upon it and structure your business around it. In some cases, maybe it’s not a fit. If it’s not a fit, don’t do it.

Have you any examples of companies that have had their perception helped or hurt them based on either exploring and overcoming it and making adaptations because of it?

TTL 714 | Third Party Logistics
Third Party Logistics: You can’t expect Amazon to always have the same amount of physical storage space when year over year, brands are growing between 30% and 40%.


The companies that have been calling me, a lot of them have thought that they were intelligent in the way that they were managing their product coming over in containers and having it shipped directly into Amazon fulfillment centers. They’re feeling like because they didn’t have a warehouse, they didn’t have the overhead of labor and employees and Amazon’s the number one dot-com. We’re going to sell on Amazon and be able to use that marketplace to drive business through marketing. The problem is that gives Amazon all of the leverage and all of your inventory is there. That’s where that perception of Amazon being the number one eCommerce platform and having all that power and all that capability.

That’s when perception ended up being, in their eyes, the golden nugget but then all of a sudden, the reality comes in of, “I did put all my eggs in one basket and I didn’t think it all the way through of what’s going to happen if Amazon changes their fee structures.” Amazon had a huge price increase on their fee structures for their Seller Central clients and dealers. It changes your profitability and you’ve got to react by going back to your manufacturing and figuring out, “Can I even afford to do this anymore?” You have to understand what their realities are and how that’s going to domino into what you’re doing and what you’re trying to grow into. That’s where that diversifying your portfolio comes in. Where your product is going to be located and how are you going to get to the consumer? Amazon puts so much focus on doing whatever it takes to have a great consumer experience. Manufacturers have to start thinking about the same exact way.

It reminds me of that not only the too big to fail mentality. With Google, if they change their algorithm and you’re not proactive, your whole model could be based on what you were receiving in the past. All of this needs to be a discussion of what we think about, how much other things can impact our business? A lot of people start resting on their laurels thinking, “This is great. I’m number one on Google or I’m getting all this business on Amazon.” What if they change things? That happens quite a bit.

I know a lot of friends of mine that have been working on APIs to pull data and information out of the Amazon system, have a software developed and that was a tool that all of these sellers were able to use. A few years ago, Amazon changed their API because they can see what’s funneling through and Amazon’s like, “All these companies are creating software’s off of our information and data. Why aren’t we offering this and selling it to our customers and our vendors versus having all these companies make it?” All of a sudden, they change the API. I have a friend of mine that had a couple of million dollars built into all of this technology that was being built around the API’s that Amazon handed and Amazon changed the API and he was done. You can’t think that Amazon is going to be what Amazon is six months from now because they’re not going to be. They can’t be there growing too fast and they’ve got to change their efficiencies to stay profitable.

How do you keep up with that, though? How do you forecast and predict to be proactive?

The way I look at it is it’s not necessarily how you predict or forecast. It’s how you’ve set up your infrastructure to be able to react to the changes. We always say our greatest strength is our flexibility. There’s so much that you can set up in a company that is, “This is the only way we can do it. This is the way our system is built. We can’t do it any other way because this is what’s best for us for profitability.” We have an infrastructure that is set up for unique and customized situations and for all the variety of things that can happen based on manufacturer’s pain points and the way a product needs to go through our system. Also, how to get it into an eCommerce platform in a sellable situation in the best and the most profitable and efficient way possible. It’s not necessarily, “Can we predict or forecast what Amazon is going to do next?” It’s more, “Are we controlling our infrastructure, so we’re going to be able to flex into a variety of needs as it happens?”

It’s interesting. It’s more reactive than proactive.

In a proactive way.

You can’t predict everything that another company is going to do. It’s got to be challenging, so you do have to have a great deal of flexibility and that’s what you’re talking about. It’s an interesting time. No one would have probably been able to predict other than Bill Gates that this was going to happen this year, 2020 with COVID. There are so many things that we’re trying to teach. In the courses, I teach a lot of business students still. I know you created BizTank, which is a nonprofit organization and scholarship program that builds career experiences for students. Is this the thing you do with them? Do you teach them this kind of thing? Tell me a little bit about BizTank.

BizTank is a career exploration program. It’s for juniors and seniors in high school. When we got ranked by Entrepreneur Magazine as an up and coming company out of 360 across the country, we got what I call street cred. Nobody knew Geneva Supply existed because we were focused on helping manufacturers’ journeys, and getting them there. We didn’t go out there and scream from the mountaintops what we were doing because we were busy creating the infrastructure and doing it. When we got recognized by Entrepreneur Magazine, all of a sudden, people started to know we’re doing. A local high school said, “Can you come in and talk to our business, entrepreneurship or finance class, about your business, you’re a startup and local. It would be cool to talk about it.”

We went in there. We talked to these students and you never know how kids are going to react to your own journey. Are they going to be bored with it? Are they going to know anything about what we’re talking about? What level of intrigue is it going to be? Immediately into it, these kids start raising their hands and asking amazing questions about what we were talking about. It was good, that after it was done, I had such a buzz about it. I was like, “There is something missing in the high school curriculum.” We keep asking kids the same question decades and decades and question is, “What do you want to be when you grow up? What are you going to do? Are you going to go to college? You need to go to college,” but we’re not giving them the experience to know what they even want to be.

[bctt tweet=”The number one mistake people are making is they’re not dividing their money into buckets.” username=””]

They’re making decisions based on maybe with their parents or their uncle or their next-door neighbor that drives the convertible or lives on the lake. They’re making decisions because maybe a guidance counselor said, “You’re good in math. Maybe you should be an accountant.” “You like kids. You should be a teacher.” It’s so generalized that these kids are making decisions to go to college or not go to college and going into massive debt as big debt as they might ever have in their entire life going to college. They’re still not having any experiences to know why they’re even going to college, what they’re majoring in, or why they’re going to the college that they’ve chosen other than, “It’s a cool campus. It’s a great lifestyle.” It’s that type of thing.

I started BizTank because I wanted to give kids the power to make decisions and try to figure out what they want to be in some cases by figuring out what they don’t want to be. It’s all about bringing speakers in from all over the country all over the world. They’re talking to the kids about their journey, what they thought that they wanted to be when they were in high school, where they’re headed. Did they go to school? Did they not go to school? Share that journey, successes, and failures. Let the kids have an opportunity to ask questions that fit for them and give them that exposure because that’s how they’re going to figure it out. That’s how they’re going to learn how to network and figure out what all these different careers are that they don’t even know about.

When they turn sixteen, they start driving around in these cars. They drive by hospitals, banks, grocery stores, restaurants, and all this, but they don’t even know all the different jobs that are inside of those buildings. At a hospital, they think doctors and nurses. They don’t know that there’s a procurement agent. They don’t even know what that is. They don’t realize there’s an IT department there. They don’t even realize some of the career paths that they might be picking on what it looks where they might be working with. That’s what BizTank is about. It’s about giving them the exposure, a platform, and a chance to figure it out on their own and it’s been a blast.

I imagine it would be. It’s so funny because that ties into everything that I do because of all my work with curiosity. In my assessment, when I determined the things that keep people back from being curious, we found there were four things which are fear, assumptions, that which is the voice in your head, technology, and environment. The environment is what you’re talking about. You should be this or everybody in our family did that. At that age, later, it gets to be your bosses and your different things. It’s everybody in your life. I work with another nonprofit that deals with developing soft skills, emotional intelligence, and that type of thing in K-12. What you’re talking about is critical. They’re not getting it. I’ve taught more than 1,000 business courses for higher ed and they come in with poor soft skills without strong directions. I could see that that’s a huge thing to work with. It’s interesting how much you and I deal with similar issues. What scholarship program do you have for them?

The way that we work it is we’ve got three seasons. One in the fall, winter, and spring. They’re eight Wednesday nights long. If the student comes in, this is for the kids that come in-house. We’ve got a full setup with stage lights, music, hype videos, the whole thing, and do a full production. Check out our website, to get a feel for the vibe. If they come 7 out of the 8 Wednesday nights, they get a $500 scholarship towards continuing education. When I say continue education, I don’t care if they go to college. Their parents might care if they go to college, but I don’t. I care that they’re going to make a decision for themselves, that’s right, fit, and the right time to make it. Continuing education could be going into an apprenticeship program, beauty school, or going to get certifications to elevate them to get them to where their goal is and their dream is.

BizTank is helping them narrow their decision down. That’s not going to get it all the way down, but by hearing people’s journeys from high school all the way to where they are, these kids are going to start to benefit even after their 1st or 2nd job that they might have quit or got fired. They start to realize, “That person that I saw at BizTank, he or she got fired from a great job that they loved but they redirected themselves and they’re in a better position. Maybe this isn’t the worst thing in the world for me.” Some of this is helping with future anxiety and stress to take that weight off that you’re going to get through it, if you keep on focusing on getting through it.

I’m curious to know, what’s the state you’re doing this in?

This is in Wisconsin. We do it within our community of where our corporate headquarters is in Delavan, Wisconsin. It’s in Walworth County. We’ve got about twelve high schools and we maxed out at 75 kids that can come into the program in-house that come every Wednesday night. I’ve got some communities from Beloit, Wisconsin, that bus about 25 kids up from Beloit from three different high schools in that area. The way that I’m reaching more students is we have it set up that we livestream our keynote speakers from that night. Kids all over the country can watch this and send questions through a moderator and have their questions asked like they’re part of the program.

They don’t get the scholarship portion. The scholarship portions are for the kids in-house, but the exposure aspect for high school teachers to have their classes watch some of these speakers because it’s relevant, timely, and what these kids are needing. You’ll see that we download and put all of our speakers on our website. Any teacher, kid at home at any time, can go back and watch the entire speaker for free and still have that experience of hearing these journeys. It’s that important to us to have that shared.

What you’re doing is important. I interviewed Gerald Chertavian, who created Year Up. In Year Up, there’s a great 60-minute piece on if you ever want to watch that, plus he was on my show. They do this throughout the United States, where they help people get a year of training and all this information so when they’re ready to go to college or ready to go to that interview that they’re prepared in that year. They go to underprivileged areas to help people. What was great was that this became a national thing. Are you thinking of making this in other states? Is this a local thing? What do you see for the future of it?

The future I see in it and because we’re streaming it across the country, and it’s difficult and time-intensive to get great speakers and sell that mission in that statement. It would be great for different communities to have a host and a facility that brings it. It has local speakers come in for half an hour to open up the doors of local businesses and have them talk to the kids about what their business is, what they do, and the different job opportunities. Do you need a college degree or an associate’s degree? What are the pay ranges?

TTL 714 | Third Party Logistics
Third Party Logistics: It’s not necessarily how you predict or forecast. It’s how you’ve set up your infrastructure to be able to react to changes in the pipeline.


Can you come out of high school and start working? Have an opening speaker, that’s what we do in-house. We have a local biz speaker that comes in before the keynote starts. They can have a screen up there and have that entire experience of being able to send questions through a moderator from that community that’s using BizTank as their platform to still have access in a live format from these speakers. That’s the way I envision other communities across the country, being able to grab this, do something with it, keep it alive, and expand it.

It’s a nonprofit but there is the monetization of the scholarships and all that. Are you getting sponsors from local businesses? How are you paying for this?

We do get sponsors from local businesses. Geneva Supply, the company that I’m co-owner and Cofounder of, we give a portion of the funding to keep it alive and going. We’re completely reliant on outside funding because we need businesses and individuals to understand that we’re a different nonprofit, but we are building a baseline of the youth going out there doing and being something and giving back. In order for these kids to stay in our program, they have to do two hours of community service between every season. They’ve got to do a job shadow in between every season. It has to be different every single season. They’re getting all of this exposure. Businesses are able to start connecting to these kids at a younger age and start to nurture that relationship within their community to try to keep employees local.

These nonprofits and organizations around the community that these kids don’t even know because when they’re given 40 hours of community service hours, they have to do so many of them. They walk a dog at the Humane Society for 40 hours. What do they get from that? We make it for two hours because they have to do a different community service every single season. I want the kids, when they do it, to go in there for two hours and if they decide to stay, it’s because they chose to stay. That’s what we have to get these kids to start understanding. It’s up to them. It’s their decision if they want to give back. How does that connect to them? When they do make the decision on their own to give back, that’s where the magic happens.

It almost sounds like the Angeline or Kelly situation. I was a Kelly girl in the day. That’s what they call it, but it’s not Kelly now. It was such a great experience because you get to see every industry in little bits and pieces of, “This exists.” I love what you’re doing and a lot of people will be fascinated by finding out more about you. Is there some way they can reach you or follow you on social media?

For BizTank, the best way is to go to the website. It’s You can certainly send us any information. There are all kinds of contact information within that website. You can reach me on social media, That’s the name of my podcasts that’s launching. I do speaking engagements. That gives me a chance for people to follow me personally. You’re going to find me if you go out and look at me. Connect with me on LinkedIn. I’d love to hear from people that are like-minded and curious about what’s going on in Peterson’s world?

I appreciate that. Jeff, thank you for being on the show. It’s been interesting.

Diane, you’re awesome. Thanks for having me. Have fun.

I’m trying. I have a lot of fun doing this. It’s guests like you who make it great. Thank you.

What To Know About “Safe” Investments With Chris Kawaja

I am here with Chris Kawaja, who holds a BA from Stanford and MBA with High Distinction from Harvard. He has spent his early years in Wall Street, Goldman Sachs, Bridgewater Associates, the world’s largest hedge fund where he developed his skeptical eye toward traditional finance. He’s bringing a unique investing outlook to his personal portfolio. He owns a variety of assets. He is the Founder and Author of and his book is called How to Stash that Cash: The Ultimate Liquidity Portfolio. It’s so nice to have you here, Chris.

Diane, thanks for having me on. I want to take a second to recognize all the great work you’re doing. I became familiar with your show. I’ve started reading it. I love it. I’d also like to acknowledge that so many people who do show are male. I love hearing a female on a show. I get interviewed for these a lot. It’s nice to have a little more diversity and who’s doing this. I love your perspective and what you’re bringing. Thank you for that.

[bctt tweet=” Always bet on America.” username=””]

It’s funny that you say that I never thought about it. I’m on a lot of other people’s shows as a guest. I’m going to have to start looking back to see what the ratio of female versus male. It depends on the topic. It seems like there are women-focused shows and those are all women hosted but the business finance shows, I’ve noticed are more male-oriented. I would see that with your background, you probably run more of those types of shows. You have a variety of things you do and we’ve talked about this. You discuss topics ranging from mindfulness to crowdfunding. What is your true passion? I want to talk about Stash that Cash but where do you spend most of your time in that range?

Where I spend most of my time, probably depends on the given week. At this point in my career, I have enough passive and active income that I’m in a nice position of being able to choose how I spend my week, regardless of worrying about the next paycheck. It’s been procuring supplies for hospitals in section 8 housing in the middle of this COVID crisis. That’s more of a nonprofit effort. Before that, it was a real estate investment that I was researching and before that, it was developing new products for my online appliance business. It depends on what the needs are.

The one thing I don’t have a lot of is ongoing steady work that requires a lot of my time. I’ve found that I’m not as good at that. My answer is it depends on the week. It’s more focused on the nonprofit side, but I also spend quite a bit of time on my blog. I’m reading and writing about finance and other interesting topics. I’ve done a lot of investing over the years and I’ve seen a lot of mistakes. My goal has been to try to educate people about how they can best position themselves and feel more comfortable and what they’re doing financially. Especially as we see yet another crisis on the horizon here. That’s been motivating me as well.

It’s interesting because I could relate to a lot of that because I do many different things from teaching to running my business to having this show to consulting and everything else, I do. The COVID situation has changed things dramatically for many people, but I do a lot of things virtually any way. It’s not as dramatic for me, but I get a lot of questions about things. As I was looking at your financial background, it made me think about something I had watched a movie. I don’t remember what it was called, maybe it was The Power of Zero. A loan officer told me to watch it about why you should transfer your traditional IRAs to Roth while the interest rates are low. Eventually, they’re going to have to go up because of how in debt the country is. When you’re old, and you’re going to have a higher interest that you’ll have to pay and why not pay the taxes now. It was an interesting discussion. That was before COVID and now, we have no idea how bad it can get. Are you getting that question at all?

People are unnerved. Being unnerved and being scared is something that is going to happen to everybody who invests. Every decade or so, this is probably the third big one I’ve seen in my career and actively participated in. The first one was the internet crash in 2000 and 2001. We had the subprime meltdown housing crash in 2008 and 2009. Now, we’re in, let’s call it the COVID crash. Each one has its various uncertainties and dynamics, but what they share in common is that investors go from feeling bold. They want to be invested in stocks and the latest hot thing to being nervous about wanting to protect what they have.

I’ve seen this several times, one thing I always noticed is that people want to “do something.” When the market crashes the first thing, I get is tens of hundreds of people emailing me trying to contact me saying, “What do I do?” What I usually tell them is, “Investing is like a bar of soap. The more you touch it, the more you wear it down.” This instinct to do something cannot serve us in a lot of circumstances like this. The fact is, the best thing to have done would be to have a plan for these situations. That’s what I talked about in the book, How to Stash that Cash. In general, this is not the best time for action. This is the best time for reflection.

Sure things have changed and we can talk a little bit about how the dynamics have changed in the Investing landscape. I have some philosophies around diversifying away from stocks and bonds into real estate and crowdfunding that we can discuss. More importantly, this is the time to learn. If you have more than 5 or 10 years left before retirement, this is a great time to understand what happened. Journal about how you feel in this situation. Be reflective about what scared you. Were you as confident as you thought he would be? You’re going to use this as a template for the next crash for the next time you’re nervous. You’re going to be well-positioned and calm in that situation. So much of investing is emotional, what we do in the book and when I talked to everybody about it. I said, “What works on paper and what works in real life are different things.”

We need to design portfolios that don’t just perform well. I’m willing to sacrifice a little bit of performance to make sure that in times like this, when you’re nervous that the portfolio is going up. The portfolio we described in How to Stash that Cash has gone up this year. It has gone up a ton and never went down a ton. It’s a steady portfolio that has a lot of benefits in a situation where people are losing jobs and reading these scary headlines. These investments should feel an anchor, and not something that’s whipsawing you around. I get the question a lot. I tell people to try not to do too much, even though I know every one of the financial press is trying to get you to “do something.” Remember, the wisest investors are ones who patiently learn and generally, lean against the wind. They’re not always doing what the latest trend is.

As you’re talking about, that reminds me of a conversation I’ve had with Ken Fisher of Fisher Investments. When I interviewed him, we were talking about different things. I remember in his book. He talked about, if you’re going by what you’re reading in the newspaper, it’s too late. It’s already factored into the prices of what’s happening in the stocks and the markets in general. No matter who you talk to, it used to be more stocks when you’re young, more bonds when you’re old. In real estate, you mentioned being good. I was in the subprime market before it crashed as far as working in that area. I left it didn’t make a lot of sense to me at the time and we see why. You had mentioned 5 to 10 years before you retire and all that of, how it’s different from what you would have. A lot of people have invested in these age-based funds that adjust based on when you’re retiring, but do you think anybody’s ever going to be retiring anymore after this? Where do you think that stands?

I have a couple of thoughts on that. The first is, I’m a believer in always betting on America. As scary as COVID is, and this is a pretty scary one. Frankly, it’s scarier financially for a lot of people than it is from a health perspective. This is a big change. We’ve never put our economy into an induced coma before. It’s scary, but as long as your perspective is pretty long, betting on America has always been a great idea. This is an extremely innovative country. If you don’t believe that, look at years ago, what it costs to make a long-distance phone call? Now, you have a little microcomputer in your pocket that can do it for free. There’s progress everywhere all the time and it happens in these subtle ways. If you generally bet on America, that’s been a great bet and will continue to be so. It has to do with the nature of the country, entrepreneurship, etc.

As scary as these shocks are, we’ve been through World Wars and depressions. Generally speaking, America has done great. That’s my first comment. Regarding a horizon, one of the biggest mistakes I see and this is probably the biggest lesson I would love to leave everybody with. You’ll often get a question like, “How do you invest your money? How should I invest my money when I’m young? How should I invest my money when I’m old?” Whatever it is. The answer has to be it depends on what money, so the number one mistake people are making is they’re not dividing their money into buckets. You need to think about how your money is servicing different jobs. What I often see is people are conflating various ideas and they say, “When I’m young, I should be in stocks.” You probably shouldn’t have your utility bill money in stocks.

TTL 714 | Third Party Logistics
Third Party Logistics: Your whole model could be based on just data that you were receiving in the past.


I believe in dividing into three buckets. Generally speaking, day-to-day and month-to-month expenses that would be bucket number one. Retirement, which is what you mentioned as being bucket number three, and bucket number two is this middle group. That’s what we address in How to Stash that Cash. It’s for emergency funds. It’s for excess money that you may or may not need in a shorter time frame. Dividing them into buckets will let you be calm about each bucket so you can handle the volatility of your retirement account knowing you don’t need it for 5, 10, or 15 years. You have your money in your checking account, which allows you to cover your day-to-day expenses. This middle and important job you have invested is in something that’s in between the two.

You bring up some good things that we say. I know, working as a loan officer and working in real estate and different things I’ve done in the past, I spent a lot of time trying to tell my kids the things that I thought were important. A lot of us hear some of the same things. We all have heard, “At least six months of savings. Max out your 401(k) and have life insurance.” I don’t think I know anybody who does those three things. I think that those are the minimum.

I’d say two things to that. The first is, there is some basic groundwork advice that people should follow. Life insurance has a role in that term, not whole life insurance, and typically, having six months of savings. That’s one that I take some issues with because it depends on your situation. In my book, I go into whether that should be 3 or 12 months? Is it six months of what? Is it six months of expenses? What kind of expenses? I talked about that a lot. Having an emergency fund account is critical because maybe you’re not going to have it at the highest return, but it provides this emotional buffer. The one thing I always keep talking to people about is, we have to recognize the reality of what our emotions are in dire situations. It’s easy to be positive about things when the stock market has gone up for a long time, etc. We need to be prepared for all kinds of weather systems. We need to feel as comfortable in the rain as we do in the sun and that means having a rain jacket. The rain jacket is your emergency fund. I am amazed by how many people don’t do the basic things.

There is a role for financial advisors. I’m not a registered investment advisor. I’m somebody who writes and blogs about ideas. I’m not looking to make money off this, but I would say to people that there are some basic building blocks. Often, we don’t have those in place. They’re not that hard to get in place. We live in this internet society you could probably put them all in place if you wanted to. You probably could put everything to work. It’s not hard, but people don’t do it and at times like this, they start thinking, “Why didn’t I do it?” The answer is, maybe you missed, whatever but it’s a good time to start. As scary as it seems, the best time to invest or when it is the scariest. In that way, investing is the opposite of everything else in our life.

For the rest of our life, let’s say we were dating. We would keep going back to let’s say the bar where we were meeting all the people who look like the people who we wanted to date. We have a positive reinforcement cycle. Whereas in investing, it’s counterintuitive. The better things are doing, the worse it is for you. You shouldn’t be investing in those periods. There’s this counterintuitive nature to it that I also bring to people’s attention. They have an emotional side. What that means is, in the worst times, that’s usually the best time to invest. I would advise not doing too much different, but remember and recognize that. The crash feels scary, but it’s also a time of unique opportunity.

I know you’re not an insurance agent, but you’ve brought term versus whole. I know a few people now who have bought the term and it’s near the end of that. Yet they were thinking that the 401(k) and everything would be so big with their real estate and everything by the time they were retiring that we won’t need that anymore but that’s expiring. What’s your opinion on term versus whole? Why do you think that one is better and more advantageous?

Typically, it’s pretty good generic advice. In this case, the generic advice is you’re better off with term. The one thing that whole life does, which is useful, is it forces people to save. By being a forced savings vehicle, sometimes that’s the emotional or behavioral bind or behavioral habit that people need. I have someone close to me, who is not a good saver. They decide on whole life insurance. They could do better in this or that and whole life insurance has all these expenses, but it can be a binding function. It’s economically and theoretically not a good idea for almost everybody. There is a small sliver of the population, who for tax reasons, should do something called second to die insurance with their partner. There are some unique situations and an investment advisor can walk you through these. It might make sense, but those are pretty rare. It’s usually for people who have large businesses that are passing on to another generation.

Generally speaking, term insurance is better if you would save the balance in a real estate fund or something like that. You would typically do quotes better, but there is something solid that people feel in whole life where they know money’s going to be there at the end. I understand that. I always emphasize, if it gets you to the behavior, it’s worth sacrificing a lot because the people who don’t do that end up in much bigger binds. For the evidence, there have been so many papers written on this. The average investor underperforms the stock market by 2% to 5% a year because of bad behavior. Whatever you can do to improve behavior is worth it. Maybe that’s a long answer to a short question.

It brings up something else in my mind. I had people asking about reverse mortgages. A lot of the older people have all their money wrapped up in their real estate. I’ve had other people cash out quite a bit of that equity through a reverse mortgage so they wouldn’t have to pay it back. Their heirs would not get as much if they died from the house or whatever they took the equity out of. People who do that take reverse mortgages out and take that to invest in the stock market, instead of thinking they might make more money there. Isn’t that’s a risky thing to do?

I keep coming back to two things. It’s a little harder to give generic advice because, unlike the term versus whole, there aren’t as many broadly applicable rules. The first thing I’d say is, when deciding how much debt you should have on your house, whether you should put that money elsewhere, there are many questions it depends on that it is individual to the person. Is it risky? Generally speaking, the horizon and your history behavior matter. What I would say is, people usually are not as disciplined as they think. They’re typically clear that they want to invest in the stock market. They’re going to buy high and sell low. That’s what all the evidence says. Everyone thinks that way. That’s not what happens. Also, the stock market has something that academics love, but I don’t like it. That’s liquidity, which means you can get your money in and out anytime.

We’re talking about these binding functions that bind our behavior. As you go into these more liquid investments and theoretical financial people that will say, “Liquidity is worth so much more because you have more choice.” In my experiences, that choice makes you make worse decisions. If you spent time reflecting on how you behaved in the past, you may be that 1 in 100 persons who can lean against the wind and buy low and sell high. Chances are, you aren’t. I’d say to people, “Don’t bet on yourself acting well when things are in a crisis because everybody’s scared. Everyone around you is telling you to sell.”

[bctt tweet=”The average investor underperforms in the stock market by 2% to 5% every year.” username=””]

As far as whether you do a reverse mortgage at all, that is dependent on your situation. Is there a reason to leave your house for the next generation? What are the implied rates on various money? There are a lot of nitty-gritty questions. It’s hard to give a specific piece of advice. My specific advice would be, understand your particular situation. The idea of pulling money out of your house to invest elsewhere, if it gives you another income stream because I’m a big fan of having lots of bets on the table. If it diversifies you, great. If you already have most of your money in the stock market and you’re pulling out every last bit of equity to concentrate even more risk on the stock market, that’s the thing that might make me a little bit more nervous.

What do you think will happen with the real estate market for the next few years based on all this and what’s going on?

What I’ve been telling people who’ve been asking me that is, a lot of the changes that were already happening are getting accelerated. What COVID has done is it added fuel to the fire of a lot of trends that were already happening. A good example of that is the work from home movement. Everybody’s realizing they can work from home. Especially around here in Silicon Valley, near where I live but that idea was taking root taking seed. We’ve seen a real acceleration of that. Likewise, strip malls were already in trouble. We see an acceleration of that. AMC, which is the American Movie Corporation, there’s real estate where people own pieces of these movie theaters or own the real estate that a movie theater releases. That’s in a lot of trouble. Neighborhood retail is in a lot of trouble. A lot of these trends that we saw are getting accelerated.

How about residential?

Residentials are interesting. My take on residential is that we’ve had this huge amount of money pursuing multifamily, apartment buildings, and cities. Whether you’re on the coast or in the center of the country, there’s been a huge boom in building high-density housing in cities. For a number of reasons, one is that millennials are moving out of the phase where they want to live in cities. You’ve got COVID accelerating the idea of maybe it’s not as cool to be in a city where I’m crammed up against people. Also, the fact that it’s so overbuilt. That as an investment is quite a bit scarier than before. I happen to get lucky because I sold one of my apartment buildings in San Francisco in January of 2020. I didn’t even know it was related to this.

That’s good timing.

That’s a change and as far as single-family homes, the answer is it depends. There are many factors. The best protection isn’t to try to time the market but to always get a great deal. Great deals are there to be had. There are more of them, typically in a downturn. As long as you’re buying right, you’re modeling and doing your numbers, real estate has always been a great investment because it benefits from the boom in the American economy. There are some caveats if people are moving out of your city at a huge rate and you’re in Detroit, that’s a little bit different from being in Austin, Texas. Generally speaking, residential real estate has been a decent investment, particularly if you manage it carefully.

We’re fortunate in Arizona. Everything’s spread out so we wouldn’t have a hard time. In New York, you’re all getting in the same elevator when you had to go up. It’s a whole different situation. This is going to put a focus on a lot of that thing. In some of those high cities and landlocked areas have no choice. It’ll be interesting.

Cities have won the day since about 1890. We used to be 90% rural and 10% urban. I don’t know how far, that’s switched but the average person used to live on a farm essentially in the US in the nineteenth century and it’s a different world. Do you have a slowing of that or a reversal of that? For sure, the suburbs seem attractive. Let’s see how it evolves. It’s the spaced-out cities like the Phoenixes of the world, Scottdales, and places like that have a future as well.

It’ll be interesting to see. The one thing I wanted to ask you is how you defined it from your book. You talk about the ultimate liquidity portfolio strategy. What exactly is the ULP? You had a few different references to that. I want to make sure because I know you mentioned liquidity earlier. What does that mean?

We have a simple strategy that we talked about putting in an emergency fund. Earlier in the show, we talked about the three buckets of money? This middle bucket, this emergency fund, let’s broadly call it a catch-all for not your day-to-day or month-to-month expenses, not your retirement but this in-between. My co-author, Shannon Matthiesen and I have gone back nine decades of history, every single crash we could find and modeled this out. We looked at the performance of this. The best way to think about it is it’s a combination of two different assets. 88% of it is intermediate-term US Treasury bonds and 12% of it is the total stock market index.

TTL 714 | Third Party Logistics
Third Party Logistics: “Safe” investments like savings accounts and treasury bills are not actually very safe because they’re subject to the highest possible tax rates.


People’s first reaction is, “How could I invest in stocks? Stocks are risky,” but the interesting dynamic here is because of the way these investments relate to each other, it’s not only lower risk. It’s also a higher return. It’s less volatile than bonds. It gives you a higher return. It’s better from a tax perspective. There is some unique dynamic about why this works. Imagine you have two chickens. One chicken always lays eggs on sunny days and one chicken always lays an egg on a rainy day. You would know regardless of the weather that you’re going to get an egg that day. That would be a perfect portfolio.

You’d have a sunny chicken and rainy chicken. What we’re trying to do with the ULP is have a sunny chicken, which is 12% the US stock market index and 88% the rainy chicken, which is US Treasuries. They tend to go up for a number of reasons in crashes they’ve done well this year for a variety of reasons. That combination in that waiting has proven to be extremely resilient through thick and thin. The other thing it does, which is important, I’ve often heard people say, “Put your money in a savings account or put your money in one-month Treasury bills,” and all of these “safe investments.”

Those safe investments are not safe if you will look at inflation and taxes. They’re subject to the highest possible tax rates, which is ordinary income. They lose value to inflation over time. You put your money in it and years later, when you pull it out, it’s worth less than when you put it in. To me, that’s not an investment. That’s like storing it under your mattress. With this emergency fund portfolio, the 88%, 12%, and the ULP, what I defined in How to Stash that Cash. What this discusses is something that has a performance somewhere in between a savings account and the stock market index with a tremendous amount of steadiness. What makes this good is if I’m going to hold this for 1 or 3 months or 1 or 3 years, am I more likely to preserve my money than any other portfolio? The answer continually decade after decade has been, yes. It is extremely resilient.

In the worst of this crisis, it was down about 2% to 3% and it rebounded away versus the stock market index, which was down by 1/3 or more. It’s extremely resilient and it gives you some performance on the other side. We’re excited about this. I’ve spent decades researching investments. This is by far the best investment portfolio I’ve found. It’s extremely resilient. Most importantly, it’s simple to implement. This isn’t, “Go hire an advisor to do this.” This is, “Read the book, and you can have it implemented by the next day.” I’m not here to make fees off this. I’m here because this is a message the world needs to hear and it’s a result of the innovation that’s happened to financial markets. You couldn’t have done this years ago, but it’s available to us. It’s something that people should take a look at.

I’m so glad you shared that with us because a lot of people could learn from your book, How to Stash that Cash. If they’re reading this and they want to either get your book, talk to you or follow you is there something you’d have to share for them to find you.

I do read every email that comes through my website, even if the volume is high. I promise I’ll read everything. I might not respond to everything. The book is How to Stash that Cash. It’s at or you can get it on Amazon, where we’re having a ton of sales. We were surprised. It’s one of these books that we wrote without much expectation. It’s been doing extremely well and we’re getting a great reception. The number one thing people that I do is, I have a weekly newsletter. It takes about 90 seconds to read. It’s the five best ideas I’ve heard that week.

There’s usually an idea on investing, a quote, or something random. That could be as simple as What is the Best Way to Reduce Your Carbon Footprint to Why You Should Structure Your Retirement Savings a Certain Way to Does It Make Sense to Wear a Mask and Why? It’s a million things like that or What is the Growth Rate of Something or How Did this Antarctic Explorer Solve the Problem of Trying to Cross the Antarctic Faster than Somebody Else. There are short snippets about 15 to 20 seconds. There’s five of them per week and you can sign up for that newsletter at my website at

Thank you so much for being on the show, Chris. This was helpful.

Diane, I appreciate it.

You’re welcome.

I want to thank Jeff and Chris for being my guests. We get so many great guests. Please check out for past episodes and please join us for the next episode.

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About Jeff Peterson

TTL 714 | Third Party LogisticsOn the same day a career move unexpectedly changed lanes, Jeff Peterson co-founded Geneva Supply, one of the fastest growing companies recognized by Entrepreneur magazine. A true business explorer who shies away from self-designating himself as an entrepreneur, he often tells others, “That’s for you to determine, not me.” Jeff offers an impressive list of winning partnerships and innovative brand designs for online-based companies, directs and hosts a weekly podcast called Fueling The Tank, and is the creator of BizTank, a nonprofit organization and scholarship program that builds career experiences for students.

About Chris Kawaja

TTL 714 | Third Party LogisticsChris Kawaja holds his BA from Stanford University and MBA with High Distinction from Harvard Business School. Chris spent the early years of his career on Wall Street (Goldman Sachs and Bridgewater Associates, the world’s largest hedge fund), where he developed his skeptical eye towards traditional financial advice. He now brings his unique investing outlook to his own personal portfolio. He owns a variety of assets ranging from e-commerce businesses, to legal settlements, to real estate. He is the founder and author of where he discusses topics ranging from mindfulness to crowdfunding. He resides in Marin County, California with his wife and three children.

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