How I Live On $25,000/Month In New York City

What is top of mind as you become a dad?

Sam Parr is on the brink of fatherhood, with his baby girl due on November 1st. Preparing for this new chapter, he's been primarily concerned about her physical wellbeing. To ease his worries, he read the biography of Lewis and Clark, inspired by Sacagawea who traveled with her infant across the harsh terrains of America. This gave him confidence that he won't harm his baby.

Parr's deeper fear, however, lies in raising a spoiled or drug-addicted child. He's intensely focused on instilling grit and a solid work ethic in his daughter. Here’s his strategy:

• Withhold Non-Essentials: Sam plans to provide only free tuition and medical care, similar to what he received growing up.
• Avoid Indulgence: Fighting the instinct to give her everything, he wants to teach her the value of hard work.

He’s still figuring out the best approach, reflecting on advice from John Rockefeller’s wife, who found joy in withholding luxuries from her children to make them stronger.

Parr constantly battles the urge to spoil his daughter and aims to create an environment where hard work and resilience are foundational values. This preparation involves mental fortitude to not give in easily to her desires, fostering a balanced upbringing.

What's the biggest difference in your lifestyle now that you're effing rich?

After selling his company, Sam Parr's lifestyle underwent some notable changes. His newfound wealth significantly boosted his confidence, making him secure in his ability to start and successfully finish projects.

• Increased Monthly Expenses: His monthly expenses rose from $10,000-$15,000 to around $20,000-$25,000. Key spending areas include:

  • Rent: Initially $4,000, now up to $10,000-$13,000 in New York.
  • Home: Bought a house in Austin for $900,000 with $5,000-$6,000 monthly mortgage and taxes.
  • Health: Joined a fancy gym and consulting expensive doctors, collectively costing $1,000/month.

• Cautious Spending: Initially bought real estate and a fancy car, which didn't bring long-term happiness. Now advises waiting a year or two before making big purchases after a financial windfall.

• Lifestyle Choices:

  • Prefers driving over flying due to his fear of flying; flies business class when necessary.
  • Maintains practical spending habits, still uses coupons and does not own lavish items.
  • Confidence soared, but still cautious about potential financial downfall.

His increased expenses and selective splurging reflect his careful approach to wealth, prioritizing confidence and practicalities over material excess.

What were your alternative business ideas if you didn’t do Hampton?

Before founding Hampton, Sam Parr was deeply intrigued by data and research businesses. He considered starting a research company or a media firm, guided by the Japanese concept of ikigai, which integrates what you love, what the world needs, what you can be paid for, and what you are good at.

Fascination with Data and Research:

• Obsession with Databases: Maintained extensive databases on various companies and tracked successful CEOs.
• Deep Analysis: Created detailed Notion documents analyzing company structures and business strategies.
• Challenges: Struggled to find a practical problem the research could solve, and a clear monetization strategy.

Exploring Media Ventures:

• Non-Compete Clause: Limited by a non-compete agreement, which prevented him from starting a business news email.
• Importance of Fit: Ultimately found Hampton as it satisfied his ikigai criteria, aligning his passion and skills with market needs.

Although he did not pursue the research or media companies, the rigorous exploration helped shape his current success.

What was the most painful thing someone told you and how did that change you?

Sam Parr reflects on two particularly painful moments of feedback that significantly impacted his personal and professional growth.

His best friend, Neville Medora, once criticized him for living in a disorganized way. After staying at Sam's place and experiencing a moldy towel, Neville told Sam, "You need to get your act together. This is disgusting." That candid feedback prompted Sam to upgrade his domestic skills and overall demeanor, helping him mature significantly.

A second painful moment came from a CEO of a large media company. When Sam expressed his hopes for his new venture, The Hustle, the CEO bluntly said, "This will never make more than a million dollars a year. Just come and join my company." This harsh critique deeply wounded him but also fueled a drive to prove the CEO wrong. Over time, his anger turned into determination, which played a crucial role in his eventual success.

"But my admiration for him turned to hatred. Not really hatred, but rage. I want to destroy you now."

These moments, though hurtful, taught him resilience and spurred him to grow both personally and professionally.

What’s one trendy business model you think is overhyped?

Sam Parr believes certain business models are overhyped, especially NFTs and Web3 ventures. He characterizes these as often built by mediocre entrepreneurs looking to cash in on the hype without offering real value.

Critiques of NFTs and Web3:

• These businesses frequently lack genuine demand, making them fragile and unsustainable.
• Labels like Web3 are often slapped onto subpar products to attract attention.

Starting a newsletter or content business also has its own set of challenges. Parr highlights the treadmill nature of creating new, valuable content consistently.

Challenges of Content Businesses:

• Highly competitive environment compared to when he started.
• Requires sustained effort and creativity for long-term success.

For aspiring entrepreneurs, it's vital to understand these models' realities rather than being swayed by trends.

What did you do when you arrived in SF to start laying the foundation to meet interesting people and business builders?

Upon moving to San Francisco, Sam Parr took several strategic steps to network and build relationships with high achievers in the business community.

Attend Meetups

• Meetup.com: Regularly went to events listed on the site to meet like-minded individuals.

Start a Book Club

• Anti-MBA Club: Created a book club that met weekly, discussing books on various topics.
• Structured Discussions: Broke the book into quarters, invited experts, and shared notes and summaries online.
• Network Growth: Grew an email list of 2,000 followers, fostering a community of intellectual discussion.

Build Relationships with Peers

• Cold Emailing: Reached out to potential peers with charisma and ambition, not just established leaders.
• Collaborative Ventures: Organized events and volunteered to help peers, fostering mutual success.
• Peer Network: Befriended individuals like Ryan Hoover, who later founded Product Hunt, supporting each other’s growth.

These activities not only expanded his network but also laid a strong foundation for future business endeavors. By being active and creating value for others, Parr effectively integrated into the San Francisco entrepreneurial ecosystem.