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The Savings Expert: “Do Not Buy A House!” Do THIS Instead! - Morgan Housel — Transcript

by The Diary Of A CEO · 26,592 words · 3,541 segments · language en · Watch on YouTube

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0:00if you're buying a house because you
0:02don't do it run for your life Mr Morgan
0:05H he's the author of the psychology of
0:08money one of the bestselling business
0:09books of this decade he can help anyone
0:12build wealth and change their life the
0:14world is split between people who don't
0:16know how to start making money and
0:17people who don't know when to stop
0:19making money and if you are stuck in a
0:21low-income job you feel like you don't
0:23have the opportunity to generate wealth
0:25but once you realize that opportunities
0:26are available for everybody you can
0:28choose where you want to live what job
0:30you want when you retire because you can
0:32be rich prove it people like Ronald Reed
0:35and he was a janitor what does it take
0:37to amass Mr Reed's $8 million Fortune
0:39he's a fascinating story of somebody who
0:41became Rich despite not having the
0:43skills that you normally associated with
0:45wealthy people then there's Warren
0:46Buffett he's worth $100 billion do but
0:48the real secret to their success
0:50investing my parents are a great example
0:53of this we were very poor no Financial
0:55background and they have like minimal
0:56financial interest but now they'd
0:57probably be in the top 3% of
0:59professional investors if you want to do
1:01well with money you don't need to be a
1:03genius if you have endurance in your
1:05investing you're going to be filthy rich
1:07but when most people say I want to be a
1:09millionaire what they actually mean is I
1:11want to spend a million dollars I want
1:13some nice clothes bigger house the nicer
1:14car ask yourself what is your
1:16relationship with money if your
1:18expectations rise faster than your
1:19income you're never going to be happy
1:21with your money that's the problem so if
1:22I have1 what's the first thing that I
1:25should do I keep it as painfully simple
1:28as I can so
1:31ladies and gentlemen you're about to
1:32meet the man whose book changed my
1:34entire life as it relates to money and
1:37finance about four or five years ago my
1:40brother who's a investment banker said
1:43Steve there's one book I need you to
1:45read about wealth investing and money in
1:47finance and he passed me a book called
1:49the psychology of money that book
1:52changed my fortunes it is the reason
1:55I've been a successful investor and it's
1:57the reason I've been able to hold on to
1:59my wealth and build it it's this man and
2:02that's the reason why you need to stay
2:04tuned and listen to this
2:06[Music]
2:12episode
2:13Morgan you wrote what I would consider
2:17to be the greatest book on money and
2:20finance ever written I say that because
2:23I remember when I came into money when I
2:25was 25 20 no 27 27 28 years old and my
2:29brother turned to me and said there's
2:31one thing I ask of you he said you have
2:34to read this book called the psychology
2:36of money it will stop you losing all of
2:38the money you've just earned from your
2:40career and it changed my life I've
2:42talked about it for years and years ever
2:44since and that's why I was so Keen to
2:46have this conversation with you because
2:47I really believe if people choose to
2:49listen to this conversation it stands
2:51the chance of changing those two so
2:53let's begin why of all the things that
2:56you could do with your life Morgan why
2:58are you writing books about the subject
3:01matter that you explore what is the
3:02reason well first that's a that's a big
3:04statement that's a lot to live up to
3:05it's kind of scary to hear that because
3:07I've I've often been and this gets to
3:09the why I I've defined it as selfish
3:12writing where I write for an audience of
3:14one and that is me and I like to think
3:16of myself as a pretty selfless person
3:18but for writing I don't try to say I'm
3:21going to write a book for this person or
3:22that person or that audience I write
3:25what I'm interested in and I write it in
3:26a way that I think is interesting and I
3:28try to solve my own problem problems and
3:30then I take a leap of faith that if this
3:32is interesting to me and it's going to
3:34help me maybe it'll help somebody else
3:36that's very different from the
3:37traditional writing style of saying know
3:39your audience know your audience very
3:42quickly turns into Pander to your
3:43audience and I think a lot of people
3:45maybe they don't even know it but if
3:46they read a book and they don't
3:47necessarily like it it's because they
3:48were being pandered to they were being
3:50spoken to in a way that a person would
3:52never speak to them in real life so I
3:54just this is almost like my diary I
3:56think in terms of these are the topics
3:58that I found interesting for myself and
4:01so I guess that's the why I feel like
4:03I've really found myself in a career
4:05where I can just figure out my own
4:06problems and try to figure out what I
4:09think and what's interesting to me and
4:11then kind of put it out to the world and
4:13then hope that other people will enjoy
4:14it let's start with the psychology of
4:16money what is the benefit to my life if
4:17I understand the things that are written
4:19in the psychology of money well let me
4:21start with I think most Finance books
4:24will their their answer to that question
4:26would be when you're done with this book
4:27you will know how to pick stocks better
4:29you will know how to balance your
4:30checking account or what credit cards
4:32that you should use for my book I think
4:34when you're done with it I hope that you
4:36will just look in the mirror and say who
4:39am I which is kind of what I did with
4:41this trying to figure out who I am and
4:43what I want and why I was insecure why I
4:45wanted to show off to other people the
4:47car that I drove so if you become more
4:50introspective about who you are and what
4:52you want out of life and what money can
4:54do for you and cannot do for you and
4:56become a little bit more introspective
4:58about why you think
5:00about where you are in the social
5:02hierarchy and greed and fear and why you
5:04think about these things that you do I I
5:07honestly think that I I I hope at least
5:09because it was this way for me that when
5:11you're done for with the book that's
5:13kind of when the learning begins because
5:15maybe this will just spark a bit of
5:18curiosity for you to then go for a walk
5:20and think about what you want out of
5:22life and whatnot so I think most books
5:24when you're done with the last page the
5:25learning is done this I hope is just
5:28sparked something in you that will get
5:29you to think more clearly about what you
5:31want with money and what money can and
5:33cannot do for you part of that journey
5:34of understanding what you want helps you
5:37to define the word on the front of this
5:39book wealth what is your definition of
5:42wealth well I I I made up these
5:44definitions in the book so these are
5:46just my things that I made up but I
5:47defined rich as you have enough money to
5:51buy what you want to pay for your
5:52mortgage to make your car payment to go
5:54out to dinner with your friends you have
5:55money in the bank wealth I think is very
5:58different wealth is money that you did
6:00not spend and maybe you will not spend
6:03so wealth is hidden it's the money that
6:05you didn't spend on a car it's the money
6:07that you didn't spend on a big house you
6:09didn't spend on jewelry and that's
6:11really important because wealth that's
6:13saved up the unspent money is what gives
6:16you Independence and autonomy and just
6:18the ability to wake up every morning and
6:19do whatever you want with your with your
6:21life and so I think separating that is
6:24really important because when most
6:26people say I want to be a millionaire
6:28what they actually mean is I want to
6:30spend a million dollars that's what they
6:32mean and when I think about being a
6:35millionaire I think it's you have a
6:36million dollars that you're not going to
6:37spend and that because you're not going
6:39to spend it you have this giant cushion
6:41that will give you Independence and
6:43autonomy and so you can wake up tomorrow
6:45and say I can do whatever the hell I
6:46want today I can work for who I want I
6:48can work for as long as I want I can
6:50retire when I want the World is Yours
6:52like every bit of savings that you have
6:55is a piece of your future that you own
6:58it's a you're just buying your time in
7:00the future so that it's yours and you
7:01can do whatever you want with it and
7:03that to me has always been the goal
7:05there's a quote from Charlie Munger
7:07where he says I never wanted to become
7:08rich I just wanted to become independent
7:11and that when the first time I read it
7:12it was like that's me too that's what I
7:14want I don't want a Lamborghini I don't
7:16want a mansion and a yacht I want to
7:18wake up every morning and just say
7:20whatever I want to do today it's mine
7:22nobody's going to tell me where to work
7:23when to work what to do it's all me and
7:26to me for not just work but for your
7:29family life for your health for your
7:31mental sanity there's nothing more
7:33important than that it sounds like
7:35you're talking about your
7:36father my dad it was he has such an
7:39interesting background my my my mother
7:40too their background is so crazy and I
7:43didn't realize how crazy it was until I
7:44was an adult the early part of my
7:46childhood when my parents were in school
7:49we were very poor my parents were
7:50students living off of student loans and
7:52grants we had no money and then my dad
7:54became a doctor when I was 12 or 13 and
7:57things changed it wasn't we were not
7:58rich but like things got very
8:00comfortable and what was really
8:01important is that the frugality that my
8:04parents had to have when they were poor
8:06stuck with them even after they started
8:08making a little bit of money they didn't
8:09buy a Lamborghini no no we grew up in a
8:11very like modest house it was a nice
8:13house and we took some like decent
8:14family vacations but my we always live
8:16well below our means way below our means
8:18did that confuse you because you must
8:20have known that your dad had the money
8:21yes particularly when I was probably
8:23like 16 17 and I could learn like how
8:26much does a doctor make you can go look
8:27it up and figure it out and and then it
8:29was like I definitely looked down on my
8:31parents at that age because I was like I
8:34know you can afford a better car I know
8:36you can buy me better Christmas presents
8:38I know we can afford a bigger house and
8:40you're and you're not doing it because
8:42you're mean I think that was I think
8:44that was my view and then it really
8:46clicked about 10 years ago this is not
8:48that long ago so my dad is an ER doctor
8:51which is one of the most stressful jobs
8:52that you can imagine it's literally
8:54people dying in your arms every day and
8:57he did this for 20 years and after after
8:5920 years of doing this night shifts
9:01children dying in your arms literally
9:04every every week he said he he had had
9:07enough it was it was a lot he put in his
9:08dues he did it for 20 years and he said
9:10I'm done I'm I'm going to retire and the
9:12reason he could do that is because he
9:14had saved up so much money he was living
9:16well below his means they had a very
9:17high savings rate the moment he woke up
9:19and said I want to be done he was done
9:21and that was it and if you contrast that
9:23with so many other people including some
9:25of his colleagues who were also burnt
9:27out at age 60 who were also so burnt out
9:30by having people die in their arms for
9:3120 years they wanted to retire and they
9:33couldn't because they had the bigger
9:35house because they had the nicer car
9:37that I thought that we should have had
9:39when we were growing up and when they
9:42quit and moved on to their next phase of
9:45Life they got so much happier and so it
9:48was like so that this was 10 years ago I
9:50was in you know in my late 20s at this
9:52point I was like now I get it he was
9:54Frugal he saved a lot and that made him
9:56independent and the Independence made
9:58him Happ than any car would have done
10:01made them happier than any big house
10:02would have done so it's like I think
10:04that is one of the keys to happiness
10:06happiness is like the most complicated
10:08topic you can imagine but one of the big
10:10puzzle pieces is independence and
10:12there's been a lot of work on this
10:14studies on this of like one of the
10:16things that makes people really happy in
10:18life is having control over what they're
10:20doing and it's more so the flip of side
10:22of that it's like what makes people very
10:24unhappy in life not having control over
10:27what happens in their future not having
10:29control over their schedule where
10:31they're going to work whether they're
10:32going to get laid off having that
10:34uncertainty is a massive anchor and
10:36waight on your life your health
10:39absolutely I mean that was a big thing
10:40for my dad too he was working night
10:42shifts for for 20 years with this it
10:45it's very bad for your health it's not
10:46great at all so the ability the
10:48financial ability to just wake up one
10:50day and say I'm done done with that is
10:53huge I I was reading studies about this
10:55idea of autonomy because I was trying to
10:56figure out what you have to have
10:57professionally to love your work and I
10:59came up with these five different points
11:01one of them was autonomy and control and
11:04I I came up with that because I read
11:06studies where people who work jobs where
11:08they had a low autonomy and control had
11:10physiological consequences they were
11:12more likely to get disease they
11:14experienced stress significantly more
11:15more likely to have cardiovascular
11:17problems and heart disease which is the
11:18single biggest killer of of people
11:20generally I thought [ __ ] hell just
11:21not having control in your life yeah
11:23makes your body shut down yes you know
11:26this is something that I think everybody
11:27has experienced if they have something
11:28really stress going on at life they get
11:30into bed they're tired you can feel your
11:32heart pounding like the physiological
11:35response of stress is huge it's massive
11:39and if you have that going on every day
11:41for 5 years 10 years 20 years 30 years
11:43forget about it forget about it this's
11:45this great quote from John D Rockefeller
11:47he's the richest man in the world and he
11:49lived till I think he was 99 something
11:50like that he was 97 and his doctor
11:53talked about why like his key to
11:55longevity and the doctor said quote he
11:58never lets any anything bother him he
12:01spends plenty of time outside and he
12:03leaves the table when he's still a
12:04little bit hungry that was his key to
12:06longevity it was just and and when you
12:08read his biography you realize how true
12:09that was no matter what was going on in
12:11his life and the most stressful business
12:14conditions you can imagine none of it
12:15ever bothered him he just had ice in his
12:17veins and he could just keep going and
12:19so I I I do think that's that's
12:20definitely one of like the keys to
12:22physical health is lowering that amount
12:24of stress and there are not many other
12:26things in life that are going to
12:28increase the stress that you have have
12:30than not having control over what you're
12:32doing in life Freedom chapter seven of
12:35your book this is the broadest lifestyle
12:38variable that makes people happy doing
12:40something you love but on a schedule you
12:42can't control starts to feel the same as
12:44doing something you hate psychologists
12:46call this reactants that's right you
12:49know I I do think there are a lot of I
12:51think the best example are CEOs who
12:53might make $30 million a year $50
12:55million a year but they have no control
12:57over their time every single second of
12:59day is planned and demanded by somebody
13:02else and they have to do things that
13:04they don't want to do if they wake up
13:05and they're tired too bad you got to go
13:06to your meetings today they wake up and
13:08they're exhausted too bad you have to
13:09travel to China to close this deal they
13:11have no control over their time and
13:13compare that to someone who makes much
13:15less but they wake up they can wake up
13:17and do whatever they want whatever they
13:18want to do you want to hang out with
13:19your friends you want to sleep in you
13:20want to take a nap at 2 o'clock whatever
13:21you want to do the person who I think
13:23really sticks out in that in that vein
13:25is Warren Buffett who is the the CEO who
13:28makes a zillion a year he's worth
13:30hundred billion do but if you dig into
13:32how he structured his day total control
13:34100% autonomy can do whatever the hell
13:36he wants all day long what he wants to
13:38do is get up and go to work but he he
13:41has delegated things so effectively that
13:44he can do whatever he wants and that's
13:45not only the key to his I think business
13:47success but his health lifestyle success
13:51why he's 93 and still going as strong as
13:54ever I I was thinking about my calendar
13:56when you were talking about the CEO that
13:57makes $30 million a year but is just
13:59dragged around by his schedule sounds a
14:00lot like me to be honest I feel like the
14:02more successful I've got in my
14:04professional career the more my calendar
14:07the minute I wake up in the morning I'm
14:09just like a puppet master to these
14:10little boxes on my Google Calendar yeah
14:13they drag me around the world and
14:15there's very little I actually said to
14:17my assistant about a month ago I was
14:18like um Sophie please can you do me a
14:20favor could you just put lunch in for 30
14:22minutes because I'm not eating could you
14:24just put like could you just put that in
14:25midday every day at the same time so you
14:27can breathe so I can have a little bit
14:28of a moment I do nothing and then also
14:30the other thing I've put in now I have a
14:31personal trainer 7 days a week and I've
14:33just put that in my calendar it was
14:35before then a residual beneficiary as
14:37was everything for me well not for me
14:39because my work is for me but um it it
14:42got the time that was left over when all
14:44my priorities were done and I do reflect
14:46on that and go like how like a when does
14:48that stop because it's clearly not going
14:50to stop when I make money because I have
14:51the money and B how much control do I
14:56actually have and you know what I do
14:58sometimes I think I've noticed about
14:59myself I think sometimes I councel
15:01things just to prove to myself that I
15:02still have control that's great see
15:04that's a good thing there's a quote from
15:05n talb where he says like you are
15:07wealthy when the money that you deny
15:09tastes better than the money you accept
15:11so you get someone comes to you with a
15:13business deal and you say no thanks I
15:14don't want it when that tastes better to
15:17you than accepting the deal it feels
15:19better to you that's like one definition
15:21of of Rich there's another great quote
15:23from TYB where he says the world is
15:25split evenly between people who don't
15:27know how to start making money and
15:28people who don't know when to stop
15:30making money and I think there are a lot
15:32of people that are watching this that
15:35are in kind of our field who are easily
15:37in the ladder they have all the money
15:39that they could ever want to spend or
15:40maybe not not that much but they have
15:42more money than they ever thought they
15:44would have but for every gold that they
15:47hit oh when whenever my net worth is X
15:50all my problems are going to go away
15:51everything's going to feel great and
15:52then they hit X and they just keep
15:53moving the goalpost down and down so I
15:55read in the book that like the hardest
15:56Financial skill is getting the goalpost
15:58to stop moving it's the hardest thing in
16:00the world it's hard for everybody
16:02because virtually everybody thinks if my
16:04net worth or my income was this level
16:07I'll be fine I'll feel great no more
16:08problems I'll wake up every morning with
16:10a smile on my face and then if you're
16:12lucky enough or you work hard enough to
16:13get there you realize it's not the case
16:14at all you're just going to keep pushing
16:16it keep pushing it keep pushing it
16:17forever have they done studies to test
16:20that in terms of analyzing whether
16:22people's goal posts move off into the
16:23future even when they're like
16:24billionaires and whatever I mean here's
16:26here's the broadest way that I would
16:28frame this up that as has been studied
16:29if you look at America today the average
16:32household adjusted for inflation is
16:34making twice as much money than they
16:36were in the 1950s to adjusted for
16:38inflation the average household double
16:39the income that they were back then and
16:41we less happy the statistics that try to
16:44measure happiness over time it's not an
16:46easy thing to do but we're less happy
16:48today than we were back then and this is
16:50why like look can money buy happiness
16:52yes and to some extent does it yes like
16:54people who are in abject poverty are not
16:56as happy as people who are covering the
16:58basics and they have food and shelter
16:59etc etc but over time when you when the
17:03society is getting richer and you're
17:05comparing yourself to other people and
17:07maybe the average American's income
17:09doubled but so did their neighbors so
17:10did their co-workers so did their
17:12siblings so you just automatically
17:13adjust to that I talked about
17:15Rockefeller before Johnny Rockefeller
17:17who died in I think the 1930s he was
17:19worth adjusted for inflation almost half
17:21a trillion dollars during his day
17:23adjusted for inflation but he never had
17:26during his life penicillin Advil
17:30sunscreen polio vaccine keep keep going
17:33down the list of things that virtually
17:34everyone can take advantage of today
17:36that he never had but you can't say that
17:39the average American is living better
17:41than Rockefeller today because we have
17:43all of these technologies that he never
17:45did because we just look at what other
17:47people have and assume that that is the
17:49Baseline so you can imagine a world in
17:51which my kids my grandkids are earning
17:55twice as much as me adjusted for
17:56inflation and they're no happier for it
17:58because the new technologies whatever it
18:00would be that would seem like magic to
18:03you and I will just become their
18:05Baseline and that's always been the case
18:07if there was if Thomas Jefferson or
18:10somebody came to the year 2023 he would
18:12faint at the new technologies and the
18:15medical discoveries that we have and
18:17these are technologies that you and I
18:18don't spend one second being grateful
18:21for because we've just accepted them as
18:22a new Baseline it reminds me of
18:24something in your new book which is out
18:26in November which is
18:29you know I've gassed up a lot of books
18:31on this podcast before but this is one
18:32of my favorite of all time it's just so
18:35easy to read and so engaging because you
18:38you're one of those authors in this book
18:40that realizes the world that the reader
18:42living in and they are busy and they
18:44want the point and they want you to you
18:46know give them not one word more than
18:48you need to it is so brilliant it's so
18:51brilliant um in this book you talk about
18:53exactly that you say the first rule of
18:55happiness is low expectations Y and
18:58that's exactly what you're talking about
18:59is comparison is the thief of Joy
19:01because it just raises our own
19:02expectations right when with that out
19:04the window goes our happiness yeah and
19:07it's it it it seems counterintuitive to
19:08people that if you want to be H for most
19:10people it's if you want to be happier
19:11you need to be ambitious you need more
19:13you need to make more money work harder
19:15have a more successful startup whatever
19:16it would be and there's that's true but
19:18that's half the equation the other half
19:19the equation is keep your expectations
19:21low so the gap between those two it's a
19:24gap between those two that actually
19:26accru to happiness over time how did you
19:28learn that I think it's just I think
19:30there have been a couple little stories
19:31that really stuck out to me one that I
19:33love that just knocked me on my ass the
19:35first time I read it was Stephen Hawking
19:38the late physicist who was without
19:40exaggeration one of the smartest people
19:42to ever walk this planet he was just an
19:43absolute genius and a quirky of course
19:46is that he had a motor neuron disease
19:47and he was paralyzed from head to toe he
19:49had no control over his body he spoke
19:51through a computer not a single muscle
19:53in his body could he actually control by
19:54himself so he was you know
19:57physiologically it's one of the worst
19:58Liv that you can imagine and he did an
20:00interview with the New York Times a
20:01couple years before he died and during
20:03the interview he's talking about how
20:04happy he was and how amazing his life
20:07was and the New York Times said they
20:09asked him they said what is your secret
20:10to happiness like if there's anyone who
20:13has the right to complain about life
20:15it's it's that guy and he's talking
20:16about how happy he was and he said my
20:19expectations were reduced to zero when I
20:21was 21 which is when he got his disease
20:24and he said everything else since then
20:26has been a bonus so this is like the who
20:29whose life is like has ended up in a way
20:32that most people watching that would say
20:33like that's among the worst scenarios
20:35you can imagine and he's probably
20:37happier than you and I because his
20:39expectations were so low that just
20:41waking up in the morning and seeing the
20:43sunrise and getting to go to work and
20:45talk to people was this magical gift I
20:48mean you can imagine not to get too
20:49morbid about this but imagine you're on
20:50your deathbed and the doctor is very
20:53confident that you're going to die
20:54tomorrow and let's say that you make it
20:56one more day what is that Sunrise going
20:59to feel like what's that you know
21:01holding your your wife's hand for one
21:03more day going to feel like it' be
21:06amazing just because your expectations
21:07were on the floor and so it it's always
21:10like that and you go through life seeing
21:11so many people who have everything all
21:13the money the great family all the
21:16health the beauty everything you can
21:17imagine and they're not happy for it and
21:19it's because with everything that they
21:20have their expectations rise not only to
21:23that level they might rise above it so
21:25if you are some if your expectations
21:27rise faster than your inome
21:29you're never going to be happy with your
21:30money no matter how much money you make
21:32you can make a billion dollars a year
21:34but if you needed and wanted 1.1 billion
21:36you're broke you feel broke and the
21:39reverse of that is true too there are
21:40people who make $50,000 a year but if
21:42they only need 40 to be happy they're
21:44sto they feel great and so that's I
21:47think that's one of the reasons it's so
21:48important is because managing your own
21:51expectations is more in your control
21:53than managing your circumstances in
21:55terms of raising your income raising
21:57your investing return
21:59it's not that you can't control raising
22:01your income you can be ambitious and
22:02smart and entrepreneurial of but it's
22:04more in your control to just inside your
22:06head to say I'm going to try to want
22:09less that that's just a mental exercise
22:11that's it's not to say it's easy it's
22:13not easy at all but you have total
22:15control over doing it so how in a
22:17practical sense can one go about keeping
22:20their expectations below their
22:23circumstances I guess here's here's one
22:25that really made an impact on me and
22:27it's great that we're in La cuz that's
22:29where this story took place I was a
22:31valet here in La all throughout college
22:33at a fstar hotel here in town so a I I
22:37was young I was you know aged 19 to 24
22:39or something like that and all day it
22:41was people driving in in Ferraris and
22:43Lamborghinis and rolls-royces and one
22:45day it hit me just I I I remember the
22:48moment because it was like out of the
22:49blue it hit me whenever someone would
22:51drive in in a rollsroyce or something
22:53never once would I look at the driver
22:55and say that guy is cool like wow look
22:58at him he's so cool what I did is I
23:00imagined myself as the driver and then I
23:03thought if I was a driver people would
23:04think I'm cool and I was like wait don't
23:06you see like the disconnect here nobody
23:09cares about the driver but they want to
23:11be the driver because they think people
23:12will then care about them and once you
23:14realize that like the takeaway is nobody
23:18is thinking about you as much as you are
23:20nobody cares about your stuff as much as
23:22you do nobody cares about your car or
23:24your house or your clothes or your
23:26jewelry as much as you do because to the
23:28extent that they're even looking at them
23:30they're looking at your car looking at
23:31your house really what they're doing is
23:33imagining themselves with that nice car
23:36they're not giving you the credit
23:37they're imagining themselves having it
23:39so once I realize like that was the game
23:41that was being played in society once
23:43you once you recognize that's the game
23:45your willingness your desire to show off
23:48plunges and of course I I like nice
23:51stuff I like nice cars I want some nice
23:52clothes I live in a decent house but
23:55once you realize that it plunges and I
23:57think the most valuable Financial skill
23:59that anybody can have is not needing to
24:01impress other people if you don't need
24:04to impress other people that is an asset
24:07on your balance sheet that is worth a
24:09billion dollars because so much of
24:11society as a whole and individual is
24:14just geared towards how can I get other
24:16people's attention how can I show off to
24:18other people how can how can they like
24:19me more I both agree and understand but
24:22agreeing and understanding is different
24:24from being able to do I think at the
24:26society level it will never be it'll
24:27always be like that same as ever it's
24:29never it's never going to move away from
24:31that if you can manage it around the
24:33edges at the individual level it's
24:35massive for your life one thing that's
24:36important here is that if you are a
24:39young person and you're kind of looking
24:41for a spouse a mate a boyfriend a
24:43girlfriend a wife a husband whatever it
24:45would be then your ability to look
24:47really nice and to signal and to kind of
24:49put up your peacock feathers is
24:51important and I get it and I did it back
24:53in the day once you are more settled
24:55down in your career in your
24:56relationships if at that point you are
24:58still hanging on to the desire to
25:00impress other people that's when it's
25:01broken that's when it's just pure net
25:03loss in your life because you're trying
25:05to show off to for people who you don't
25:07even need or want to love you there's a
25:10great quote from Warren Buffett where he
25:11says the definition of success is when
25:14the people who you want to love you do
25:16love you and so for me it's like five
25:19people it's like my parents my wife and
25:21my kids and like that's it that's it
25:23those are the people who I want to love
25:24me and if they love me I I probably have
25:2790% of the happiness that I'm capable of
25:30and if they don't love me and then I'm
25:32never going to have more than like 10%
25:34of the happiness that I'm capable of in
25:35that chapter about happiness you talk
25:37about your friend Brent as well in his
25:38theory on marriage yeah my friend Brent
25:40B sure has this great theory on marriage
25:42where he says marriage only works if
25:45both Partners want to serve the other
25:48partner and expect nothing in return so
25:50you wake up every morning and you say I
25:51want to serve my spouse but I expect
25:54nothing in return from them and if you
25:56both do that simultaneously you're both
25:58pleasantly surprised because what
26:00happens is I didn't expect you to do
26:01anything for me but you did and vice
26:04versa and both of you just wake up every
26:05morning you're like but you did that for
26:07me you you helped me out here you you're
26:09empathetic to me there and it feels
26:10great you exceeded my expectations
26:12exceed my expectations and I think what
26:14breaks down any marriage or career or
26:16whatever it would be is when you become
26:19needy like nothing breaks love more than
26:22being needy and really what needy is is
26:25just your expectations are so high that
26:26you wake up and you say I expect to do
26:28this for me I expect you to help me I
26:31expect you to serve me that's just like
26:33massively high expectations that you
26:35have in that relationship it's it's also
26:37like expecting an external factor in
26:39that case your partner to validate you
26:42in some way or to and that kind of goes
26:44back to your point about money where in
26:46order to stop showing off and focusing
26:48on those five people that we want to
26:50love
26:51ourselves we need to understand and
26:54ideally solve our often toxic
26:57relationship with like our need for
26:58validation and that I guess brings me to
27:01the first chapter in your book where you
27:02talk about the stories of money that we
27:04have and where they've come from and
27:07something that's always baffled me is
27:08when you go into low-income areas
27:10there's more gambling shops yeah and I
27:12can attest to it when I was 18 19 years
27:15old and I'm shoplifting pizzas to feed
27:17myself and I'm doing all sorts of stuff
27:20when I got my student loan in I was in
27:21university for one day and they gave me
27:23like the first payment of my student
27:25loan I don't think I've ever said this
27:27before I put the entirety of the payment
27:30on a bet wow and I lost it in the six in
27:33the an injury time of that football
27:35match I don't bet and did you need that
27:37money for tuition like it it was then it
27:39was then gone I needed it to eat yeah I
27:41wasn't speaking I had no money I don't
27:43come I didn't come from money and my
27:44parents I'd gone to University with 50
27:46Quid and I got this like, sent to me
27:48from student loan whatever I was so
27:50reckless with money when I didn't have
27:52money the minute I got money it's like
27:54everything just chilled the [ __ ] out and
27:55I I became really longterm I made
27:59responsible decisions I stopped buying
28:01flashy things I like don't even own a TV
28:03now I'm very Sim I feel like the more
28:05money I have the less my material
28:07desires are for sure for sure when I say
28:09that out loud I'm like oh absolutely why
28:11is that that when we have less we are
28:13Reckless with our money well I think
28:14there's two sides to this one of my
28:16theories is
28:17that what everyone wants in the world is
28:20respect and admiration from other people
28:22and there's kind of two ways to get that
28:24you can get your respect and admiration
28:25through your wisdom through your love
28:28through your humor or if you don't have
28:30that to offer from the to offer to the
28:32world you're going to get it through
28:33your material possessions so if you can
28:36gain respect and admiration through your
28:37business success your wisdom your love
28:40your friendship great then you're going
28:42to get it and you're going to fulfill
28:43that bucket if you can't get it from
28:45those things then you're like well might
28:46as well show off my car it's all I got
28:47to do that's all I have I think that's
28:49one side of it so as you become more
28:51successful your desire to show off
28:54diminishes because you're gaining
28:55respect and admiration through other
28:57things that are not matural
28:58the other side of this that's so
29:00important is that you know I saw this
29:02statistic years ago that the poorest 10%
29:05of Americans buy like 80% of the lottery
29:08tickets in America and these are people
29:10who can like barely feed themselves
29:13lowest 10% they're literally struggling
29:15to put a roof over the head and feed
29:17themselves are going out hand over fist
29:19buying scratcher tickets and the the
29:21knee-jerk reaction when you hear that is
29:24morons what are you doing you idiot and
29:26maybe that is the right reaction but I
29:28started thinking about it and it was
29:29like okay maybe if you try to put
29:31yourself in those people's shoes maybe
29:33they would say something like this if
29:36you are stuck in a low-income job and
29:38you feel like there's no way out you
29:39feel like you don't have the opportunity
29:41to work your way up the ladder become an
29:43entrepreneur you feel like you're stuck
29:45in this position buying a lottery ticket
29:47might be the only thing in life that
29:49gives you a little bit of hope it might
29:51it's might be what feels like literally
29:52your only ticket to get out and that
29:55might be not something that you and I
29:57feel like because because we have we we
29:59we at least feel like we might have
30:00other opportunities I it's you're so
30:02right because when I gambled what I then
30:05did the same day before the result of my
30:08bet or my lottery ticket came in and I
30:10said this to my team the other day is I
30:12would go on right move and like auto
30:14trader and look at stuff that I would
30:16buy if I won yeah yeah I think there's a
30:19sense too that if you are stuck in a
30:21lower spot in life if you have a feeling
30:24that the world is unfair and very often
30:26it is so some maybe that that might be
30:28the right mindset but if you feel the
30:29world is unfair then it's very natural
30:32to think I might as well cheat too if
30:34the world's unfair why not might as well
30:35cheat and I think that at least at some
30:38level has some explanation for the
30:40relationship between poverty and crime
30:42that word hope is is so is so true I
30:44think it's true too just a glimpse of
30:46Hope because it gives you even if it's a
30:480.00001% chance if it's the only thing
30:50in your day that made you smile a little
30:52bit made you feel like you had a little
30:53bit of hope then I get why they do it
30:55the other reason the other thing I think
30:57a lot about here is that if you are in a
30:59low-income job and you're working
31:01graveyard shifts and you're exhausted
31:03and you're taking three buses to get
31:04your kids to school if the only thing
31:07that day that gives you a little bit of
31:08pleasure is a cigarette and some alcohol
31:11I get it I totally get it and that's
31:13also the relationship between health and
31:15poverty is a lot of that too so it's
31:16very easy for people who are of higher
31:19means to look down at those people and
31:21point out all the bad decisions that
31:23they're that they're doing in life but I
31:25think you underestimate how much that
31:27desire to just have a little bit of Hope
31:29a little bit of pleasure and if those
31:30feel like your only avenues for Hope and
31:32pleasure maybe that's the explanation
31:33for at least part of it quick one this
31:36is really really fascinating to me on
31:37the back end of our YouTube channel it
31:39says that
31:4069.9% of you that watch this channel
31:43frequently over the lifetime of this
31:44channel haven't yet hit the Subscribe
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31:48it helps this channel so much if you
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32:00that you're currently watching could you
32:01please hit the Subscribe button thank
32:03you so much and I will repay that
32:05gesture by making sure that everything
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32:08better and better that is a promise I'm
32:10willing to make you do we have a deal
32:11let's speak then to 18-year-old Steve
32:14that was in that little room with the
32:15stack of these what they call County
32:17Court judgments and bays and stuff stack
32:19of letters on his desk what advice based
32:22on all you know about money and finance
32:24can you give to somebody who is Maybe
32:28making a, $1,000 $2,000 a month covers
32:32their rent just about doesn't have a lot
32:33of money left over what is the best way
32:36to go from that position to a position
32:38of wealth in your
32:39view I think one of the best ways to
32:42think about it at the lower levels and I
32:44explained a little bit this earlier but
32:45to dig into it is a lot of what's
32:47probably giving you stress in life is
32:49that you don't have control over what
32:50you're doing and if you view every
32:52dollar of savings that you have as a bit
32:53of your future that you own and control
32:56then I think that mind that mindset can
32:58shift pretty dramatically and it's like
33:01that's that's the ticket out the ticket
33:02out is not a nicer car it's not a bigger
33:05house it's not better closeth the ticket
33:06out is Independence that's what's going
33:08to give you the better career that's
33:09what's going to make you happier it's
33:10what's going to make you healthier and
33:11the only thing that's going to give you
33:12Independence is having enough money
33:14saved up so that you can choose where
33:16you want to live maybe even what job you
33:19want you can choose at at at some point
33:22down the road when you retire if you get
33:24sick it's not just going to break you
33:25immediately having that Independence is
33:27going to take more weight off your
33:28shoulders than anything else you can do
33:30in life save money that's it that's the
33:33the title of that chapter in the book is
33:34save money because you can't put it any
33:36clearer or Starker like that's that's it
33:38he says there are three types of people
33:40those who
33:41save those who don't think they can save
33:44and those who don't think they need to
33:46save yep three types of people which one
33:49are you those who save those who don't
33:51think they can save and those who don't
33:53think they need to save I tell you what
33:55I've been all three in my life that's
33:57interesting I've always been a saver no
33:59I haven't and see that I think that's
34:01actually very rare that you change who
34:03you are really on the nature nurture
34:05Spectrum I actually think and this is
34:07kind of disappointing to talk about it's
34:09not fun to talk about but on the nature
34:10of nurture Spectrum I think a lot of
34:11money is nature Warren Buffett talks
34:14about the people who have the money mind
34:16which means like either they get it or
34:17they don't and if they get it they get
34:19it instantly and if they don't they'll
34:20get it never at all I I I actually don't
34:23believe in it it's that black and white
34:24Charlie merer explains it like that he
34:26says when explaining financial matters
34:29to young people they either get it
34:30instantly or never at all and he's
34:33putting that too starkly I think I don't
34:35think it's that black and white but on
34:37the nature nurture spectrum is it 8020
34:39is it 7030 I think it's probably
34:41something in that range so let me give
34:44you a count a counterargument to that
34:46then so as I said I've been someone that
34:49didn't think he could save because I
34:50didn't have money and I just thought oh
34:52you know but I could have saved in it
34:53looking back now I know I could have
34:54saved I could have saved a small amount
34:56but I didn't see the value in saving
34:57small numbers I didn't understand the
34:59laws of compounding returns which we'll
35:00definitely talk about I have also been
35:03the person that
35:04saves and I've also been the person who
35:09thought they didn't need to save I've
35:10been all three my Counterpoint to this
35:12goes back to a story that I read from
35:14your early years where two of your
35:17friends died on a ski trip yeah and it
35:19also links to something youve said in
35:21your new book same as ever where you
35:23speak about
35:24how sometimes in life like hitting rock
35:28bottom is the greatest incentive to
35:31change our lives yeah so I put those two
35:33things together and go that moment when
35:35you were two of your friends died on a
35:36ski trip that you were on when you were
35:38younger it had an impact on your risk
35:40appetite and your attitude towards and
35:42therefore your attitude towards money
35:44yep what what happened what happened so
35:46I grew up skiing in in Le Tahoe
35:47California and I was a competitive ski
35:49racer right uh so all throughout my
35:51childhood and teenage years I skied six
35:53days a week 10 months a year all over
35:55the world and it was great there about
35:5712 of us on the squad Valley ski team we
35:58had grown up together and we had spent
36:00our entire lives together and when I was
36:0217 this is in 2001 I was skiing with my
36:05two two of my best friends brenon Allen
36:07and and and Brian Richmond and we would
36:09ski out of bounds which is illegal
36:12you're not supposed to do it we would
36:13duck under the rope that says do not
36:15cross and we'd ski out of bounds because
36:16that's where a lot of the good skiing is
36:18and when we would do this it would spit
36:20us out on this back country road where
36:22we'd have to hitchhike back there's no
36:24chairlift when you ski out of bounds you
36:25have to hitchhike your way back so so we
36:27did it one morning in February 2001 the
36:29three of us did it and when we did it we
36:31triggered a very small Avalanche and I I
36:34remembered it so clearly like I can
36:36still feel it 21 year 22 years later I
36:40can still feel what is like it's the
36:41weirdest sensation of that I've had in
36:44my life because when you get hit by an
36:46avalanche rather than pushing on the
36:47snow to gain traction with your skis the
36:50ground is pushing you so all of a sudden
36:53you're skiing along and you got control
36:54and all a sudden boom you have no
36:55control everyore the the ground is
36:57pushing you around probably similar to
36:59what it feels like if you're standing on
37:00the ground during an earthquake like the
37:01ground's pushing you but it was a pretty
37:03small Avalanche maybe came up to our
37:05knees ended pretty quickly and we kind
37:07of like literally high-fived about it at
37:09the bottom and went about our day we get
37:11back around to the the base Lodge we hit
37:14shik back and Bren and Brian said they
37:16wanted to do it again they wanted to ski
37:17again and I said hey for whatever reason
37:20I I I just didn't want to do it so I
37:22said hey rather than hit cheing back why
37:23don't you guys go do it again and I'll
37:25drive my truck around and pick you up so
37:28we said great we made our plans went our
37:29separate ways they went skiing I went
37:31back around to take my boots off and
37:33jump in my truck and go pick them up 20
37:3530 minutes later I go to pick them up at
37:36the pickup spot and they weren't there
37:39and I knew it only took us a minute to
37:41ski down the hill so 20 minutes later I
37:43knew like they they they weren't coming
37:44I I was not worried I figured that they
37:46had already hit hike home but so after
37:49waiting for another 20 or 30 minutes I
37:50just left and I went back to the lodge I
37:52expected them to be there and they
37:54weren't and I still didn't really worry
37:56like we didn't have cell phones back
37:57then and people were just comfortable
37:58being out of touch if you didn't know
38:00where your your buddy was like wasn't
38:01that that wasn't that big a deal so we
38:04went about the day I I started worrying
38:06a little bit I remember I stopped at
38:07Brendan's house and expected him to be
38:09there and he wasn't there either and I
38:11remember calling and leaving a message
38:12on his voicemail and I remember ending
38:14the voicemail by saying I hope you're
38:15okay man those are my last words I
38:17remember that very clearly the day went
38:19on and I think at about 4 or 5:00
38:22Brian's mom called me and she said Brian
38:25never showed up for work today do you
38:26know where he is
38:28and I told her what happened I said we
38:30skied the backside of squa where we'd
38:32hit Chik back I was going to pick them
38:34up but they never showed up and I
38:35haven't seen them since and I also
38:37remember so clearly Brian's mom saying
38:40oh my God and hanging up the phone and
38:42that was so like so it's then we started
38:44getting worried we called the police the
38:45police didn't take it very seriously
38:46because they thought ah they're out at a
38:48party they ran off with a girl for the
38:49night like they weren't worried but we
38:51finally got search and rescue involved
38:53and Rescuers of probe poles frowned
38:56Brenan and Brian buried under 6 ft of
38:58snow and they were they had been killed
39:00from a massive Avalanche and so look I
39:03think virtually everyone listening to
39:04this I'm sure you to have lost somebody
39:06close to you somebody that you love so I
39:08know the experience was not unique in
39:10that way but it was the first time that
39:12I had experienced loss and it was the
39:15first bad thing that had ever happened
39:16to me in my life so it had a big impact
39:18on me and there were a lot of takeaways
39:21I think at the time I didn't have the
39:23cognitive tools to piece together what
39:25happened or to learn about what happened
39:28like have any sort of takeaways but as I
39:30got older and thought about it and
39:32looking back I put together all these
39:35like realizations of what that did to me
39:37how it changed me and what were some of
39:39the lessons from it too one that I talk
39:42about in the book that I think about all
39:43the time is my decision to not go with
39:47them on a second run was this completely
39:50brainless decision I put no thought into
39:52that decision it was not a cost benefit
39:54analysis I didn't think through it but
39:56it's the most important decision I've
39:57ever made in my life 100% chance if I
40:00was with them I would have died and I
40:02had skied literally thousands of runs
40:04with Brendan and Brian how many times
40:06did I deny a second run with them or say
40:09you guys keep going I'm going to go in
40:11almost never the one time I did it saved
40:13my entire life and so that you really
40:16realize that the world hangs by a thread
40:18everybody thinks like oh you're going to
40:20put a lot of thought into your big
40:21decisions to make sure that you're
40:22successful in life where you go to
40:23college what your career is going to be
40:25who you marry that's all great but the
40:27world hangs by a thread and there are
40:29tiny little no nothing decisions maybe
40:31that you made today of maybe it was when
40:34to cross the street maybe it was when to
40:36leave to get in your car that can
40:38utterly change the course of your life
40:41and so when once you accept that of how
40:44much the world hangs by a thread I think
40:45you become much more humble with your
40:47willingness to make forecasts about the
40:49future what the economy is going to do
40:51who's going to win the election what's
40:52going to happen in my life my career my
40:54family's life we have no clue we have no
40:57idea because all we can think about are
40:59the big decisions we cannot piece
41:02together the chaos theory of I got in my
41:05car at the at the wrong time I met the
41:08wrong person or I met the right person
41:09or you know I I decided not to take a
41:11second run we cannot forecast the impact
41:13of those things and so that had a big
41:16impact on me too of just who are we to
41:18fool ourselves that we can predict the
41:20next recession that we can predict where
41:22our careers are going to be in 10 years
41:24that we can predict how long our
41:25marriage is going to last that we can
41:27predict how long we're going to live we
41:28can't nobody can because we can't
41:30predict how crazy these tiny events can
41:33turn into and this comes right back to
41:35investing doesn't it
41:37because most people that consider
41:40themselves to be investors whether
41:41that's just putting a couple of quid
41:42into crypto or something else engage in
41:46the idea that they can predict the
41:47future yeah um and this is where it
41:50appears that most money is lost I mean
41:52think about the biggest risk to the US
41:54economy over the last two generations Co
41:57mean that's one of them the others would
41:58be Pearl Harbor okay 911 Co and maybe uh
42:02Lan Brothers couldn't find a buyer in
42:042008 which sparked the financial crisis
42:06of 2008 those are the biggest Risk by
42:08far and the common denominator of every
42:10one of those stories is that nobody saw
42:12them coming they were not in any
42:14newspaper before they happened they were
42:15not in any economic Outlook nobody was
42:18going on TV warning you that this was
42:20coming the common denominator of those
42:22is that they did all of their damage in
42:24two seconds and that would be the case
42:26going forward you can guarantee that the
42:28biggest news story and the biggest risk
42:30over the next year or the next 10 years
42:33of our life whatever it is is something
42:34that nobody's talking about today that
42:37you and I have can't even fathom because
42:39it's always been like that there's never
42:40been a time when the biggest news story
42:42was
42:43foreseeable and it's all and it'll be
42:45like that going forward so that's
42:46another just like embracing how fragile
42:49the world is there's a great quote from
42:50a financial adviser who I really admire
42:52Nam Carl Richards and he says risk is
42:54what's left over when you think you've
42:56thought of everything
42:57H you can go out of your way to think
42:59about all of the risks that are in your
43:00life and like great and like how you're
43:02going to prevent them great that's a
43:03good thing to do when you're done with
43:05that exercise what's left over that
43:07you're not thinking about is what risk
43:09actually is it's like by definition we
43:11can never plan or even imagine what the
43:13biggest risks in our lives are going to
43:14be you say that in same as ever you say
43:17I think the the chapter title is risk is
43:19the things you can't see or something
43:21risk is what you don't see risk is what
43:22you don't see that was a little bit
43:24terrifying and it's true and I think I
43:27think sometime you can phrase it as
43:28terrifying it's also kind of relieving
43:32that like why are you going to put so
43:34much effort into trying to predict what
43:36the stock market's going to do next what
43:37the econom is going to do next why are
43:39you building a forecasting model to
43:41figure out what the econom is going to
43:42do over the next 10 years when you look
43:44at the last 10 or 20 years how could you
43:46ever predict 911 or Co and even look
43:50like something like Co there's like a
43:512015 Bill Gates Ted Talk where he talks
43:54about the biggest risk to society is a
43:56viral pandemic so it's not that nobody
43:59saw that thing coming but the specifics
44:02of when it's going to happen how bad
44:04it's going to be is it just going to
44:06shut down the economy for a week or two
44:08years that is completely impossible but
44:10there's also lots of other TED Talks
44:11that say everything's going to be great
44:13of course of course there's proba
44:14there's a lot more so on balance the
44:16world had no idea I think on balance the
44:19world breaks once per decade not exactly
44:22once per de but on average once per
44:24decade everything that you thought about
44:25risk and uncertainty and stability goes
44:29to [ __ ] so how do I prepare if risk if
44:32risk is what I don't see how do I
44:33prepare there's another great quote from
44:35Nasim talad that I like where he says
44:37invest in preparedness not in prediction
44:40so rather than going out of your way to
44:41be like here's what I think is going to
44:43happen in crypto here's what I think is
44:44going to happen in the stock market just
44:45make sure that you have a big enough
44:47buffer in your finances cash liquidity
44:50being scared of debt so that no matter
44:52what happens you're you at least have a
44:55Fighting Chance of enduring it and make
44:57through one thing I've I've often
44:59thought about is that you should have
45:01enough cash in your investing portfolio
45:03the amount of cash you should have
45:05should feel like it's too much it should
45:07feel it should make you winse a little
45:08bit because if you only have enough cash
45:11to put up with the risk that you can
45:13Envision and the risk that you can
45:14foresee you're going to miss a surprise
45:16every single time every single surprise
45:18is going to be a surprise to you but if
45:20you feel like you have too much cash
45:22then at least you have a Fighting Chance
45:24of putting up with the 911 the co the
45:27Harbor whatever it might be so when
45:29people look at my asset allocation my
45:32investments a lot of people look at it
45:34and say you seem really conservative why
45:36do you have this much cash what are you
45:38saving for and my answer is always I
45:40don't know I have no idea what I'm
45:42saving for who are we to assume that we
45:45can predict the risks that are going to
45:47be in our own personal lives and
45:49throughout the broader World nobody can
45:51do it the only way to prepare for it is
45:52to have what feels like too much safety
45:55what is your capital strategy how do you
45:57invest your money um this is you know
46:00this is the thing people want to know
46:01most about you I keep it as painfully
46:04simple as I possibly can so literally my
46:06entire net worth is cash a house and
46:09index funds and some shares of Marquel
46:11where I'm on the board of directors and
46:13that's it there's nothing else my entire
46:15I can summarize everything so easily and
46:18so cleanly and truly that's it and it's
46:20not even like I have 20 bank accounts I
46:22I have one bank account one brokerage
46:23account like in a house and that's it so
46:25simple why why index funds you're the
46:28reason I your Capital allocation
46:31strategy is almost identical to mine I
46:32want to talk about the house thing as
46:33well but um after reading your book I
46:36stopped trying to pick stocks yeah and I
46:39invested all of my available Capital
46:41into index funds outside of investing it
46:45in starting companies so I'm a
46:46shareholder in I don't know 50 60 70
46:48companies I all my other available
46:51capital is invested in index funds and
46:53then I have a very long-standing
46:57position in ethereum which I've held for
46:58like six years or something which has
47:00done me very well yeah that is it and
47:02the ethereum investment is also based on
47:05the fact that I run a software business
47:07that is in blockchain and I could see
47:09that developers are building on top of
47:10ethereum more than any other blockchain
47:12so that Insight was really beneficial to
47:15me and six years so even with the big
47:18fall of the last two years you're still
47:20up a lot yeah I I think your book taught
47:23me that successful investing is when you
47:26lose the pass to your investment account
47:28yes that's exactly it I don't actually
47:30think you said that in there but that's
47:31like when I lose the password to my
47:33investment account I'm so proud of
47:34myself yeah because it means I haven't
47:36checked it in
47:37forever and so it was funny because you
47:39were coming today I thought oh yeah well
47:41I have all this money in these index
47:42funds I'll check it and I thought [ __ ] I
47:44don't know the password good that's why
47:46you're going to do okay the reason I do
47:48this what's important is that I am not
47:49one of the people who says nobody can
47:51beat the market so therefore use index
47:52funds that's not what I believe I think
47:54there I think it's extremely hard to
47:56beat the market and very few people will
47:58do it but I think there are really smart
48:00people who can do it and people who I
48:02know who I could invest with the reason
48:04I don't is not because I don't believe
48:06it can be done it's because the variable
48:07that I want to maximize for in my
48:09investments is endurance if I can just
48:12earn average returns for an above
48:13average period of time it's going to
48:15lead to amount of success that will
48:17literally put you in the top 5% of
48:19investors my parents are a great example
48:22of this my parents are smart people but
48:24they really they have no Financial
48:25background and they like minimal
48:27financial interest I would say and but
48:29they have dollar cost average into index
48:31funds for going on 40 years now and
48:34literally if you look at the returns
48:35they've never sold anything ever and
48:37literally if you look at the returns
48:38they'd probably be in the top 3% of
48:40professional investors what is for
48:42anyone that doesn't know what is dollar
48:43cost averaging and what is an index fund
48:45dollar cost averaging means you buy the
48:48same dollar amount of Investments every
48:50single month come hell or high water
48:51doesn't matter what the stock market's
48:52doing recession boom bust you say I'm
48:55going to put $100 or whatever it is in
48:57the stock mark on the first of every
48:59month now most people who like have a
49:00401k at work are doing this whether they
49:03know it or not they have $100 or
49:05whatever removed from every paycheck and
49:07it goes into the funds that they own and
49:09they don't have to do anything whether
49:10you know it or not you're actually doing
49:11it the contrast to that would say I'm G
49:14to buy and sell based off of how I feel
49:16in the stock market I wake up I watch
49:18CNBC I decided to sell and I'm going to
49:20put it back in when I feel better about
49:21the market it's the contrast to that an
49:23index fund is just a single fund that
49:25owns hundreds or or thousands of stocks
49:28within it and if it's diverse enough if
49:30it's big enough really what you're doing
49:31is you're owning a slice of the global
49:33economy which is how I think about it
49:35it's thousands of individual stocks in
49:37there Tesla Apple whatever it would be
49:39but really what you're doing is you're
49:40owning a slice of capitalism if I was
49:42your son and I said Dad prove to me that
49:44that's a better long-term wealth
49:46creation strategy than buying crypto or
49:49buying companies that I use or like how
49:51would you explain that to your to your
49:54kid your ability to do well over the
49:56next one year or 5 years is going to
49:58have no role whatsoever on your lifetime
50:00ability to generate wealth all that's
50:02going to matter is not what are the best
50:05returns you can earn all that matters
50:07are is what are the returns that you can
50:08sustain for the longest period of time
50:10all that matters is your endurance it
50:12doesn't matter if you can double your
50:13money this year or even double your
50:15money again the next year all that
50:16matters is can you stick and keep it
50:19going for 50 years that's where
50:21compounding comes from prove it all
50:23because the formula for compounding is
50:25returns to the power of time
50:27that's not quite it but like more or
50:28less that's it so in that equation if
50:30you understand the math all of the heavy
50:32lifting comes from the exponent prove it
50:34because that's how exponential growth
50:36works that's how it works it's literally
50:38exponential give me a case study where
50:39someone has followed that strategy and
50:41done well okay here's one way to explain
50:42it that I use in the book 99% of Warren
50:46Buffett's net worth was accumulated
50:48after his 60th
50:49birthday after he turned 60 years old
50:5299% of his wealth Jesus has been
50:54accumulated after that period because
50:56the longer do you hold that for the
50:58crazier the numbers get when he was 60 I
51:00think he was worth about $3 billion lot
51:02of money he's a multi-billionaire but
51:04now that he's 90 he's worth over hundred
51:06billion and he's given like a 100
51:07billion away to charity so if he didn't
51:09do that he'd be worth he'd go from three
51:10billion to 200 billion since he's been
51:1260 because the numbers just get crazier
51:15at that point he's worth a hundred
51:16billion dollar so if his if his Market
51:18if his net worth goes up 10% in one year
51:20he makes $1 billion which is three times
51:22that he was worth when he was 60 so
51:25that's when you look at somebody like
51:26Buffett is he a great investor is he a
51:28great stock picker of course but the
51:30real secret to his success is that he's
51:33been a good investor for 80 years and if
51:36he had retired at age 60 or at age 50
51:38nobody would have ever heard of him he
51:40would have been like one of the other
51:42multi-billionaires who lives in Florida
51:44and plays golf and like you've never
51:45heard of him the reason he use a
51:47household name is because he's been
51:49doing this non-stop since he's since
51:51he's been 11 years old and he's never
51:52stopped it's just the endurance that's
51:54made him so wealthy not necessarily the
51:56annual returns patience it's a difficult
51:59thing it also reminds me of the story
52:00that you talk about in the introduction
52:01of your book about the janitor Ronald
52:03James Reed yeah who when he died in 2014
52:08age 92 had a net worth of over 8
52:11million and he was a janitor how did he
52:14do that he took what very little money
52:16he could save from his job as a janitor
52:18mopping floors at the gas station he put
52:21it in stocks and he left it alone for 70
52:23years and that's it that's all you need
52:25that's all you need to do if you have
52:27endurance in your investing and you can
52:29keep it going for years or decades you
52:31don't need to be a genius stock picker
52:34and not only you do not need to do it if
52:35you have endurance you're going to beat
52:37literally 97 or 99% of the genius stock
52:41Pickers and what's so interesting about
52:43it is like picking the right stocks is
52:45hard it's supposed to be hard like
52:47there's no world in which everybody who
52:48tries to beat the market is going to do
52:50it of course it's hard just like being
52:51an NBA player is hard and but having
52:54endurance is like largely in your
52:55control
52:56it's so much easier to just be patient
52:59than it is to pick the right stocks
53:01every single day now I think some people
53:03nature nurture some people like probably
53:04Ronald Reed and my parents Ju Just
53:07understand it naturally it's not hard
53:08for them to be patient but do like there
53:11are professional investors who work 80
53:13hours a week for 30 years to try to beat
53:16the market and they can't do it not only
53:18some that that explains like most of
53:20them and even the ones who can do it are
53:21maybe going to beat the market by half a
53:23percent per year 1% per year but if you
53:25can have Endor
53:27that is that's a bigger benefit than you
53:29can have by even being like a very
53:31successful stock picker like somebody
53:32who outperforms the market by one
53:34percentage Point per year and they can
53:36do that for 10 years that's amazing
53:39that's like Mount Rushmore investor but
53:41somebody who earns average returns and
53:43does it for 20 years is going to have
53:45way more money you do it for 30 years
53:47you're going to be Filthy Rich you be
53:49like Ronald Reed you can be a janitor
53:50who leaves 8 million to charity when you
53:52die but so in the case of Ronald Reed do
53:54you not look at him a little bit and go
53:56listen bro if you had eight or9 million
53:59in the bank you should have been living
54:00it up see this is one I I do kind of
54:03regret that in the book that I'm I kind
54:05of I didn't say it explicitly but I kind
54:07of make him out to be a role model and I
54:09don't think that's the case he he's not
54:10my role model I think he's a fascinating
54:13story of somebody who became Rich
54:15despite not having any of the pedigree
54:18or any of the skills that you are
54:20normally associated with wealthy people
54:22but you're right that he lived in a a a
54:26s wed housing and he worked as a janitor
54:28that's not my goal so I I I want to live
54:30a nice life I want to be independent but
54:32he's the most extreme example that you
54:34can come up with and I I I wish I had
54:36stated that more clearly in the book A
54:37lot of people have this conversation
54:39around pensions and in the UK we we can
54:41pay money from our salary into our
54:43pension but I think a lot of people
54:45think gosh when I'm 60 when I'm 65 I
54:48want to be rich I want to be rich when
54:49I'm 25 yeah and I can go to Vegas and
54:53you know ball out and buy nice things
54:56and have great experiences not when I'm
54:5865 yeah no I think that's true I think
55:00there are a lot of people a lot of
55:01financial advisers will say that one of
55:03the hardest things they do as an adviser
55:05is getting their clients to spend money
55:07because they've been so conditioned to
55:08save save save save save that when they
55:11finally retire at 65 they don't know how
55:12to spend they have no clue how to spend
55:14money there's a great uh author I think
55:16you've had him on your show RIT Siti who
55:18talks about this a lot like how you like
55:19you need to learn how to live a a rich
55:22life and figure out what that is for you
55:24for some people like for me it's just
55:25like my my happy state is like sitting
55:28on the couch in sweatpants reading a
55:30book going for a walk with my wife
55:31that's that's that's my rich life that I
55:33love doing and to do that I need to be
55:35independent and autonomous so I can do
55:37that all day long I can do that on a
55:38Wednesday afternoon rid talks a lot
55:40about like maybe your rich life I think
55:42for him it's flying first class and
55:44wearing nice clothes and he talks about
55:46like he drives I think like a beat up
55:48Honda but he flies first class and he
55:50dresses very nicely so you just have to
55:52figure out what is the little thing
55:53that's going to make you happy and I
55:55think a lot of people's problem is that
55:57Society tells you what you're supposed
56:00to do to be happy you're supposed to
56:02have a nice car you're supposed to have
56:03a big house supposed to wear nice
56:04clothes that's what Society tells you to
56:06do and for some people that might be the
56:08case for other people like me I think it
56:10it's not that's that that would not ever
56:13make me happy what does make me happy is
56:15Independence so I can just do these
56:16little quirky things that I like to do
56:18so I think you just have to figure out
56:20the little things that make you happy
56:22rather than just being forced by Society
56:24into what they want you to do
56:26knowing when enough is enough this was
56:28one of
56:29the most interesting things that I think
56:31really rang true to me was how do I know
56:34in my life when enough is enough I've
56:35definitely been a victim to that
56:36external narrative that I need to have
56:38these things in my life to be a happy
56:40person but how does one go about knowing
56:43when enough is enough I think back to
56:46the story of my father he just woke up
56:47one day and it was obvious that he would
56:50he had been doing what he did for long
56:53enough and it was he had felt like he
56:54had enough and whatnot and he and he
56:56broke away from it I
56:58think for for a lot of people it's just
57:00I one thing that's important about the
57:01concept of having enough in Independence
57:03is that when most people even if they
57:05are independent they wake up every
57:07morning what they want to do is go to
57:08work one of one of the big problems with
57:10the fire movement the financial
57:11Independence retire early movement where
57:13people are like they're going to be a
57:14Super Saver and then retire at age 31
57:16whatever it' be so many of those people
57:18who actually did that and retired at age
57:2131 they once they retired after about
57:23two weeks they were bored out of their
57:24mind and if they did it for six months
57:26they were clinically depressed cuz for
57:28most people you want to be productive
57:30you want to keep doing it so having
57:33enough doesn't necessarily mean that
57:34you're going to stop working it just
57:36means you're going to keep doing only
57:37the work that you want to do there's a
57:39really interesting question that Patrick
57:40oesi asked a lot of people uh in in his
57:44office he says if you won a billion
57:46dollars in the lottery but you had to
57:48stay at this job you're a billionaire
57:50but you can't quit what did this company
57:52would you want to do and what would you
57:54get rid of and virtually everyone has an
57:56answer for that question they say oh if
57:58I didn't need the money but I have to
57:59stay I would love to work on this
58:01project I love working on this thing
58:03this that and the other is all [ __ ]
58:05to me so like in any job there's going
58:08to be something that you want to do
58:09there's going to be some project there's
58:10going to be some position or or or maybe
58:12it's like being an artist whatever it
58:13would be it's not that you stop working
58:15it's that when you have enough you get
58:16to pick and choose which of those things
58:18you're going to end up doing it's often
58:20too late in our lives when we realize
58:21the cost that we've paid for enough
58:24never being enough you know it could
58:26could be family it could be Health
58:27whatever um I always reflect on the with
58:30Brony we wasn't it who interviewed
58:31people on their deathbeds and found out
58:33that the biggest regret of the dying was
58:34not living a life true to themselves
58:36working too much Etc but that's on your
58:38deathbed there's nothing you can do at
58:39that point right and I think a lot about
58:41this like what am I going to regret yes
58:43I think about that too I think this is
58:45this is pretty morbid to think about but
58:46I think about if I were on my deathbed
58:48tomorrow would I regret working hard and
58:51saving a lot of money and my answer is
58:52absolutely not it would give me so much
58:54pleasure to know that my wife and my
58:56young kids are going to be fine and the
58:58opposite of that I cannot fathom being
59:00on my deathbed and looking at my wife
59:02and my 8-year-old son and my
59:03four-year-old daughter and thinking you
59:05guys are screwed that would that that
59:07would that would be the biggest regret I
59:08can fathom so I think a lot of people
59:10would look at someone with a high
59:11savings rate like me and would assume
59:13that I'm going to regret it on my
59:15deathbed and who knows but I I I have to
59:17think it would actually be the opposite
59:19what makes me gives me so much happiness
59:21and pleasure is taking care of my family
59:23and if I were to go tomorrow I wouldn't
59:25regret for one second the car that I
59:27didn't buy the big house I didn't buy
59:30the nice clothes I didn't buy not for a
59:31second would I regret not doing those
59:33it's a really good frame to think there
59:34isn't it about our financial decision-
59:36making and you know a lot of people like
59:38saving up to buy a lot of nonsense
59:40that's going to depreciate and would you
59:42rather have a little Nest Egg left over
59:44for the ones you love or buy that
59:46Lamborghini there's another great book
59:48called die with zero which basically the
59:51title is self-explanatory and one of the
59:54concepts is even if you want to give
59:55money away way to your family don't wait
59:57until you die don't make your kids wait
59:59or like hope you're going to die so they
1:00:00can get their inheritance give it to
1:00:02them when it really matters which for
1:00:03most people is in their 30s and 40s if
1:00:05you wait until you die at age 90 and
1:00:08your kids are 60 and then they get your
1:00:10money like what's the purpose of that
1:00:12give it to them when they need it when
1:00:13they're raising kids and whatnot that's
1:00:15when they need your money I I I really
1:00:17like that concept I think about that
1:00:19with my own kids the counter point to
1:00:20that is though if I just give my kids
1:00:22money then like the chth quote
1:00:26they might lose it quick think about
1:00:28that especially as you know someone that
1:00:30has a lot of cash they could give I
1:00:32think about this because at some point
1:00:33I'm G to have kids and they're going to
1:00:34Daddy I want to do a driving lesson or
1:00:36they're going to be 18 and go off to
1:00:38University or whatever God I hope they
1:00:39don't go to university um and they're
1:00:41going to say like I've got nowhere to
1:00:43live or I found this nice apartment dad
1:00:46and in those moments do I make the
1:00:47decision to pay for it because I can or
1:00:50withhold it because they need to learn
1:00:51the hard way I have this yeah I'd call
1:00:54it an argument with my girlfriend
1:00:56where I say babe listen when we have
1:00:57kids they're going to sit an economy and
1:01:00she's like absolutely not yeah and I'm
1:01:03like no babe when they get okay we made
1:01:05a deal I think we got to about when
1:01:06they're 12 years old I'm going to put
1:01:07them in economy so they can learn for
1:01:09themselves the value of things see we we
1:01:13made this mistake I don't think I've
1:01:14ever talked about this but it was about
1:01:15a year ago we flew my son who was me I
1:01:18guess he was seven at the time we flew
1:01:19first class and we explained to him that
1:01:22this was not normal this was not going
1:01:24to be the way it is as soon as as he did
1:01:26it he went home he told all of our
1:01:27neighbors told all of his friends told
1:01:29everybody at school and that was when my
1:01:32I like can't can't do this never again
1:01:35you see how quickly somebody can be
1:01:36spoiled or use that to try to show other
1:01:39people that they are superior to them
1:01:41that's when it was like no no we can't
1:01:42ever do this ever again and you moved
1:01:44his expectations in a way absolutely I
1:01:46didn't fly first class till I was 35 and
1:01:48he did it at 7 and so that my when I
1:01:50first did it at 35 I remember feeling a
1:01:53I earned this I worked for this and Al
1:01:56felt so special to me because I'd flown
1:01:57coach 9,000 times before that so it felt
1:02:00amazing and so that's I I I think about
1:02:02that a lot there's a great quote from
1:02:03Charlie Munger where one of his rich
1:02:05friends says Charlie if I give my kids
1:02:08all of my money is that going to ruin
1:02:10their ambition and Charlie says of
1:02:12course it will but you have to do it
1:02:14anyways and the guy says why and Charlie
1:02:16says because if you don't your kids will
1:02:17hate you and I think that's that too is
1:02:20like lots of Charlie Monger quotes are
1:02:22are framed as black and white they're
1:02:24extreme but I think that's probably like
1:02:2580% true really that it's it's maybe 70%
1:02:29true that if you are a wealthy person
1:02:31and I'm not talking billionaires if you
1:02:32just have a moderate amount of wealth
1:02:34that you might pass along to your kids
1:02:35someday that your two options are kind
1:02:37of at least to some extent hurt their
1:02:39ambition or risk some level of strife
1:02:42and it's always child dependent like I
1:02:44always make the example that if
1:02:4618-year-old Bill Gates or Mark
1:02:47Zuckerberg or Elon Musk inherited a
1:02:49billion dollars would have made any
1:02:51difference to their ambition they would
1:02:52have they would not have slowed them
1:02:54down by one second but most people
1:02:56including myself it would have like I
1:02:59was driven by fear of not making it
1:03:01which is what most people are I was I
1:03:03was scared shitless that I was not going
1:03:05to find the right career that I wasn't
1:03:07going to make it and that's what drove
1:03:08me some people don't need that but I
1:03:12think it's very rare I think the huge
1:03:14majority of people if you give them an
1:03:16easy life they will take it and embrace
1:03:18it with both hands making money and
1:03:20keeping money require two different
1:03:22skills you you've spoken about a few of
1:03:24the skills that are required for making
1:03:26money the one that really stuck out to
1:03:28me that you've discussed so far is this
1:03:29idea of endurance patience regardless of
1:03:32what's happening in the markets
1:03:33regardless of the volatility lose your
1:03:35password and sit on your hands just on
1:03:38that point as well I remember reading
1:03:39somewhere it might have even been your
1:03:40book you know it's so crazy because the
1:03:43things that I know about money I can't
1:03:44remember where I've got them from but
1:03:46most of them came from this book like
1:03:48most of the principles came from this
1:03:49book and one of the things that I read
1:03:51was that Warren Buffett would go like
1:03:53five years without allocating capital
1:03:55and this where he said the hardest thing
1:03:58to be a great investor is to be able to
1:04:00sit on your hands and do nothing sit on
1:04:01your ass and do nothing that's it that's
1:04:03that's AER quote and that's what they're
1:04:05doing right now right now Berkshire
1:04:06hathway which is Warren Buffett's
1:04:07company has like $150 billion dollar of
1:04:09cash right now and that's their entire
1:04:12uh 60-year history of Warren Buffett and
1:04:14Brookshire hathway is build up a
1:04:16shitload of cash wait 10 years for an
1:04:18opportunity deploy it all and then go
1:04:21back to waiting and building up cash
1:04:23crazy and that's that's that's how they
1:04:24done it good opportunities are rare of
1:04:26course they are they should be rare it
1:04:27shouldn't be that anybody can just open
1:04:29up their stock account and find the
1:04:30opportunity of a lifetime what are the
1:04:32gonna come once a decade what are the
1:04:33other skills then endurance patience to
1:04:35create to get money for the for the
1:04:38ordinary person endurance and patience
1:04:40is 99% of what you need as an investor
1:04:42because the opportunities there to
1:04:44invest in a lowcost Index Fund are
1:04:46available for everybody and you can do
1:04:47that from your phone like you do it from
1:04:48your phone open up a Robinhood account
1:04:50buy some index funds anybody can do that
1:04:52and so that and but that was not always
1:04:54the case it used to be 20 years ago that
1:04:57the only people who could invest were
1:04:58people who had a lot of money and could
1:05:00afford a broker and had connection to a
1:05:01broker and you yet to like make a phone
1:05:02call make a phone call you had to know a
1:05:04guy and even then you were going to pay
1:05:05a ridiculous fee to that person for do
1:05:08pieces of paper and all kinds it was a
1:05:09joke and that's 20 years ago it's not
1:05:11that long ago so I think like people
1:05:13aren't grateful enough or appreciative
1:05:16enough of how much things have changed
1:05:18that open up those opportunities for
1:05:19everybody you talk about the skill of
1:05:21keeping money which is different from
1:05:22the skill of getting money is predicated
1:05:26on Survival Financial survival and just
1:05:28putting up with all the unpredictable
1:05:31nonsense that's going to happen between
1:05:33now and the end of your life and we
1:05:35talked earlier about the surprises Pearl
1:05:37Harbor 9911 all these big surprises just
1:05:40it's just your ability to endure things
1:05:42like that that's going to be literally
1:05:4490% of your financial success and your
1:05:46investing success so gaining money is
1:05:48like being an optimist and taking a risk
1:05:50like being optimistic about yourself
1:05:52swinging for the fences you need that to
1:05:54get rich staying rich is is like the
1:05:56exact opposite you need a level of being
1:05:58conservative you need to be scared you
1:06:01need to be like acknowledge of all the
1:06:03unknown risks that are in front of us
1:06:05and have a financial allocation and a
1:06:07mindset that's going to allow you to
1:06:09endure them and survive them financially
1:06:11you need both of those skills at the
1:06:12same time so well your kid is 20 years
1:06:15old he's broke do you tell him to go and
1:06:19take huge outsized risks he's not got a
1:06:21family he's not got a mortgage he's not
1:06:22got a dog what advice do you give him at
1:06:25that age to create wealth I would
1:06:27actually say I think this is a little
1:06:28counterintuitive that when somebody is
1:06:29Young you you think you would say you
1:06:31got 50 years in front of you swing for
1:06:33the fences go for it it's also when your
1:06:35life is the most fragile it's when
1:06:37you're most likely to be laid off most
1:06:39likely to change your career most likely
1:06:40to break up or get divorced whatever it
1:06:42would be and so for that you need quite
1:06:45a bit of financial flexibility just cash
1:06:47and liquidity so once you had some level
1:06:49built up whatever the level might be for
1:06:51a different person then like do
1:06:53something crazy I also think for careers
1:06:56some of the best career advice that's
1:06:58maybe not Universal but when you
1:07:00graduate college and you're looking at
1:07:02your career don't take the safe job
1:07:04which is usually like the big company
1:07:06the blue chick company go for the weird
1:07:08company why go for something crazy
1:07:10because when you're older when you're 40
1:07:12and you have two kids and a mortgage
1:07:14you're not going to want to take the
1:07:15weird job that's when you want the
1:07:17stability that's when you're probably
1:07:18going to want the job that's has good
1:07:20benefits and a stable paycheck cuz you
1:07:22need that when you're 22 and you're not
1:07:24tied down by anything
1:07:26don't go work for Goldman Sachs or apple
1:07:28or deoe or something like that go for
1:07:29the weird startup where you like you're
1:07:31you're going to learn something
1:07:32completely different linked to that
1:07:35point is in the weird startup you're
1:07:37going to be so close to the failure and
1:07:38failure is the knowledge you're going to
1:07:40learn so much much and there's so many
1:07:42people who take the blue chip the safe
1:07:44job out of college and it puts them on a
1:07:46very predictable track you're going to
1:07:48be an analyst for two years and then if
1:07:49you're good you'll get promoted to
1:07:51senior analyst and then you'll get
1:07:53promoted to associate it's like very
1:07:54stable and linear and that's the like
1:07:57it's you're capping all of your upside
1:07:59where if you go for the weird company
1:08:00you're either going to do one of two
1:08:01things it's either going to fail and
1:08:03you're going to learn a lot from that or
1:08:05it's going to take off and you're going
1:08:06to learn a lot from that and then maybe
1:08:07when you're 40 after going through all
1:08:09that then you want the stable job at the
1:08:11big company it's interesting I was
1:08:13thinking as you're speaking that the
1:08:14proximity from your desk and the
1:08:17CEOs probably needs to widen over time
1:08:20yes I think I think that's that's true
1:08:22yeah absolutely and mo most people I
1:08:24think if they if you do it the other way
1:08:26around or most people would never do it
1:08:27the other around if you start your
1:08:29career in the stable company you're
1:08:31probably never going to leave you're
1:08:32going to get addicted to the nice
1:08:34paycheck the stable benefits whatnot and
1:08:36you're never going to take a risk and do
1:08:37anything else maybe that's okay maybe
1:08:39for some people's personalities that's
1:08:40exactly what they want but I think there
1:08:42is a higher level of regret for people
1:08:44that start in a safe company and then
1:08:46they get the golden handcuffs they can't
1:08:47leave and by the time they're 40 and
1:08:50they realize that they wanted to work at
1:08:51the crazy company they can't because
1:08:52they got a mortgage and two kids and
1:08:54they're saving for retirement and they
1:08:55can't take the risk at that level of
1:08:57their life you introduced this concept
1:08:59of
1:09:00tales long tales and this also changed
1:09:04my life changed my investment strategy I
1:09:05should probably say you talk about the
1:09:07example of venture capital where for
1:09:09every 50 Investments That Venture
1:09:11capitalists make statistically half of
1:09:14them will completely fail 10 will do
1:09:16okay and one or two will make huge
1:09:19profits that drive 100% of the funds
1:09:21returns yeah this is a lesson about
1:09:23investing in finance but it's also me a
1:09:25lesson about life it's always life yeah
1:09:27it applies to everything Tales where
1:09:30just a couple of things that happen
1:09:32explain 90 or 99% of what matters it's
1:09:36always the case you see it in business
1:09:38where you take in the United States
1:09:40there are you know thousands of public
1:09:42companies that you can buy stock in but
1:09:44the huge majority of the value in the US
1:09:47Stock Market is in like 10 companies
1:09:48Apple Tesa Microsoft so even though you
1:09:51have thousands of companies 10 of them
1:09:52are the ones that really matter and are
1:09:54going to drive all of the r turns over
1:09:55time so why you just buy those 10
1:09:57because nobody knows what they're going
1:09:58to be at least in hindsight that that
1:10:00that's the argument for owning a
1:10:01thousand of them is that you know that
1:10:03the 10 that are going to be the next big
1:10:04ones are going to be in there all of
1:10:06this is a case for humility this is
1:10:08honestly what I took away from your book
1:10:10you're expecting to walk away with tips
1:10:14all these tips these tricks these
1:10:15special ways to make more money than
1:10:17everybody what I came away with is this
1:10:20one important lesson that I've never
1:10:23been able to unsee which is I don't know
1:10:26I I think that's great and that back to
1:10:28I wrote this book for myself that's been
1:10:30the biggest lesson for me is not only do
1:10:33I know but nobody else knows either
1:10:35everyone everyone else is bullshitting
1:10:36their way through the investing Market
1:10:37too they don't know either I'm in this
1:10:39crypto chat where one of my friends I
1:10:41won't disparage him one of my friends
1:10:43he's the guy in the chat that's always
1:10:44posting the forecast graphs you know
1:10:46those ones where they kind of like the
1:10:47little logger graphs where they forecast
1:10:49where the stock or the crypto where they
1:10:50think it's going to go right and it's
1:10:52always it's always up and to the right
1:10:56um and it's kind of like male horoscopes
1:10:58I heard someone say that that that's
1:11:00such a great yeah no I think that's I
1:11:02think what's closest to investing is
1:11:03something like the horoscope or even if
1:11:05you know it's [ __ ] you want to read
1:11:06it why because it's comforting what a
1:11:09lot of people want out of their
1:11:10investing forecasts or whatever it is is
1:11:12they want to reduce the uncertainty
1:11:14that's giving them stress because
1:11:16everyone I think intuitively knows that
1:11:17the future in front of us is unknown and
1:11:19it's unknowable but that hurts and so if
1:11:22it hurts you try to reduce that stress
1:11:24by finding someone who says I do know
1:11:26what's going to happen you know what
1:11:27this applies as well is I read Amazon's
1:11:29Jeff Bezos who's the CEO and founder of
1:11:30Amazon his shareholder letter where he
1:11:33says we have to be the best place in the
1:11:35world to fail um we swing for the fences
1:11:3810 times and for every 10 swings nine of
1:11:41them are in the Amazon graveyard he's
1:11:43talking there about a9.com which nobody
1:11:45knows cuz failed the fir phone which
1:11:47nobody knows but the one in 10 pay for
1:11:50the entirety of the graveyard the one in
1:11:51one 10 is going to be AWS which make 70
1:11:54billion this year right he talked about
1:11:55that when the fir phone from Amazon
1:11:57which if you don't know Amazon built a
1:11:59cell phone it's called the fir phone and
1:12:00it was a joke it was a disaster it was a
1:12:02massive flop and he was doing like an
1:12:04analyst call and this analyst talked
1:12:07about like hey the Fire Phone flopped
1:12:09like what happened there and bezo said
1:12:10if you think that was a big failure just
1:12:12wait you've seen nothing yet and like
1:12:14that's why Amazon's successful they're
1:12:16willing to try a thousand things with
1:12:18the idea that they know 990 of them are
1:12:21going to fail but the 10 that work are
1:12:23going to be massive and you can fail
1:12:25well and have the mentality to fail and
1:12:28the financial backing to be able to fail
1:12:30like make sure your bets are not that
1:12:32big and you can just keep taking little
1:12:33risks all the time the optionality that
1:12:36you get from that like the odds that one
1:12:38or two of those are going to explode are
1:12:40huge it's massive I mean it's no
1:12:42different than how do you win the
1:12:44lottery you have to buy thousands and
1:12:46thousands or millions of tickets if you
1:12:48buy billions of tickets you'll probably
1:12:49win the lottery it's probably not going
1:12:50to pay off because it doesn't work like
1:12:52that but it's the same concept like if
1:12:54you if you if you take enough swings at
1:12:56bat one of them is going to hit
1:12:58eventually and this is also
1:13:01a reason why some companies look
1:13:04Innovative they look like their Geniuses
1:13:05but in fact their failure rate is
1:13:08massive massive there's a story at at at
1:13:10Netflix several years ago where there
1:13:12was uh a report to the CEO and the and
1:13:15the report was all of the new movies
1:13:18that we've come out that that we've that
1:13:19we've produced have been successful and
1:13:22whoever presented that probably thought
1:13:23this is great this is what you want hear
1:13:25and the CEO said that's terrible that
1:13:27means we're not taking enough risks if
1:13:29every movie that we release is a hit
1:13:32we're not taking risks like you want
1:13:34your failure rate to be at least some
1:13:36that that's when you know you're at
1:13:37least trying something new it's the same
1:13:39like if you're managing uh a hotel you
1:13:42don't want every room to be sold out
1:13:44because that means you're not pricing
1:13:45high enough you know you're doing a good
1:13:46job when you have 10 empty rooms that's
1:13:49when you know you're pricing the other
1:13:50rooms at a high enough rate so there's
1:13:53always going to be like some level of
1:13:55what looks like failure that you need
1:13:57and if you don't have it you're not
1:13:58taking a big enough risk Daniel X sat
1:14:00here and he said the same thing he goes
1:14:02one of the most important metrics that I
1:14:03think about at Spotify is our mistake
1:14:06rate yeah and people will think okay so
1:14:08he wants to limit mistakes very much the
1:14:10opposite he wants to make sure that the
1:14:12company maintains that sort of startup
1:14:15mentality and they increase their rate
1:14:17of mistakes and this brings me to
1:14:19something which I kind of hit me like a
1:14:21truck um in your new book same as ever
1:14:23which was this idea that we need to keep
1:14:25running now there were areas in my
1:14:27professional life where I've been
1:14:28successful poas is doing well I think
1:14:31doing pretty well and I had a I had a
1:14:33car Journey with Jima who's through the
1:14:35wall who you met and we last time we
1:14:37came to well I'm in the front seat of
1:14:38the car and I go Jima do you know what
1:14:39our biggest um our biggest threat is now
1:14:43complacency when people get successful
1:14:46they play defense to their detriment um
1:14:50they don't play offense as much as they
1:14:52need to to keep up with the rate of
1:14:54change in the world and then a young
1:14:57Scrappy agile incumbent who has a high
1:15:00risk appetite will take their cheese
1:15:03right and your chapter on keep running
1:15:05there's two quotes that I really pulled
1:15:06out chapter is called keep running and
1:15:09the quot two quotes that I pulled out
1:15:11were competitive advantages tend to be
1:15:14shortlived often because their success
1:15:17plants the seeds of their own decline
1:15:21one more quote it's easy to overlook how
1:15:24many forces pull you away from your
1:15:26competitive Advantage once you have one
1:15:29specifically because you have one
1:15:31success has its own gravity that's right
1:15:34and the the the the biggest source of
1:15:36gravity there is laziness the reason
1:15:38you're successful is because you work so
1:15:40hard to get to where you were and now
1:15:42that you feel like you've made it now
1:15:43that you feel like you're on the top of
1:15:44the mountain top you get lazy and that's
1:15:46so many companies fall for that so many
1:15:47careers fall for that there's a great
1:15:49story from Jerry Seinfeld where he said
1:15:51that one of the reasons that he quit the
1:15:53show when it was still going gang
1:15:55Busters is because he could start to
1:15:56sense that what made the show successful
1:15:59was starting to be was starting to go
1:16:01away he said and part of the reason is
1:16:03was because he got so famous when he was
1:16:06not that famous he could go sit in a
1:16:08coffee shop and watch how people ordered
1:16:10their coffee and make a joke out of it
1:16:12he was observing how Society worked once
1:16:14he got very famous he couldn't do that
1:16:16anymore he was too famous to go sit in a
1:16:17deli and watch how people order their
1:16:19sandwiches he couldn't do it so
1:16:20therefore he didn't have a lot of the
1:16:22source material that he had before and
1:16:24so he was like look what made me so
1:16:26funny and the show so successful I can't
1:16:28do anymore so like red alert let's pull
1:16:31the plug before it gets really bad here
1:16:33so that's like a very specific example
1:16:35but what he realized that what made him
1:16:37successful was gone and a lot of a lot
1:16:39of CEOs will will have this problem too
1:16:42where what made them successful was that
1:16:44they were a scrappy startup founder and
1:16:46they were very good at building a
1:16:47product but now that the company is big
1:16:49and successful they also need to be an
1:16:50HR Manager they need to be a finance
1:16:52specialist they need to be a marketer
1:16:54they need to be all these other things
1:16:56and therefore their time is pulled away
1:16:58from what they're actually good at which
1:16:59was building a product a good example of
1:17:01this if I can say it was Travis kenck of
1:17:04uber the founder of uber probably nobody
1:17:07in the world was better at scaling a
1:17:09company like uber than he than he was
1:17:11and there were a few people who were
1:17:13worse at managing a big company than he
1:17:16was so it's like what made Uber
1:17:18successful is what pulled him away from
1:17:21being a successful manager at that he
1:17:22was very good at one thing he was the
1:17:24best in the world at that one thing but
1:17:27you shouldn't think that like it's going
1:17:28to last during when another phase of the
1:17:30company's life my person I consider a
1:17:33mentor and a friend of mine been a
1:17:35long-term friend of mine a guy called
1:17:36Shaquille Khan he was one of the very
1:17:37first investors in shop in Spotify um
1:17:39new Daniel the founder from the very
1:17:41Beginnings he said to me um a piece of
1:17:44advice that stayed with me and I've also
1:17:47imparted on other people at a time when
1:17:49I'd left my company I was now
1:17:51financially successful um financially
1:17:53free by all regards and and I called him
1:17:55after leaving my company and I said D I
1:17:57said Shaq what should I do now with my
1:18:00life he said to me Stephen the reason
1:18:02you were successful was because you were
1:18:04hungry you need to realize that you're
1:18:06no longer hungry for the same reasons
1:18:09and what he told me to do was the
1:18:10hardest [ __ ] thing I've ever done in
1:18:11my life which was nothing he said spend
1:18:14a year don't rush back into starting the
1:18:16same business again because he said to
1:18:17me the reason why you were so
1:18:20unbelievably disciplined and would go to
1:18:21the office seven days a week was because
1:18:23you were like an insecure kid that was
1:18:24like fighting to survive that's gone now
1:18:26so sit on your hands for a year do
1:18:28absolutely nothing and get inspired
1:18:30again get get hungry again about
1:18:31something new um because my Temptation
1:18:33was just to run back in and start a big
1:18:35marketing business again or whatever
1:18:36yeah I that's kind of what you're you're
1:18:38speaking of as well is that like the
1:18:40need to understand that our motivations
1:18:41evolve and change over time and the
1:18:43thing that made us successful might not
1:18:44be the thing that makes us successful
1:18:46again in a new Venture I think there are
1:18:47some people who really can keep it going
1:18:49some people who do keep running like
1:18:50Elon [ __ ] perfect example guy worth a
1:18:52quarter of a trillion dollars still
1:18:54works 100 hours a week so there are
1:18:55those people who exist but I think for a
1:18:57lot of people this should not be a scary
1:18:59thing the fact that after you've made it
1:19:01and have some success and some some
1:19:02wealth that you're not as hungry as you
1:19:04used to be that's fine just you just
1:19:06have to accept it it gets dangerous when
1:19:09people don't realize it and they they
1:19:11are less hungry they're not as motivated
1:19:13but they're still going to try to go
1:19:15start a new business even though they
1:19:16don't need it anymore and then they're
1:19:17shocked when that business doesn't work
1:19:19he said to me you need to take on a
1:19:22moonshot and cuz he know he goes you you
1:19:24did the first business you did well
1:19:26whatever Etc he goes the thing that will
1:19:27make you hungry and sufficiently
1:19:29terrified is you now need to find a big
1:19:32scary terrifying goal that's what Elon
1:19:34did with Twitter yeah he'd already
1:19:36become the richest man in the world and
1:19:37he probably got bored a little bit and
1:19:38he said I need to do something that's
1:19:40crazy and that even for someone like me
1:19:42is going to be an absolute stretch to
1:19:43pull off crazy which is buying Twitter
1:19:45and running into the ground I mean
1:19:46there's no surprise that billionaires
1:19:48will seem to start rocket companies yeah
1:19:50I mean the reason that they are
1:19:52successful is because they have that
1:19:53complete swing for def fenses I mean
1:19:55most people would quit full stop when
1:19:57their net worth hit 10 million or less 3
1:20:00million and so for someone to have a net
1:20:02worth of 10 billion and to wake up and
1:20:04say I'm going to keep going as hard as I
1:20:06possibly can that's why they have that
1:20:08level of success it's complete
1:20:09insatiable Hunger for More I sat with a
1:20:12billionaire when I was
1:20:1320 going to say 24 years old and I sat
1:20:16in his office and I thought okay this
1:20:17could be really interesting I get to
1:20:18meet this very successful person in
1:20:20Manchester and I looked into his eyes
1:20:22and said why are you doing this like you
1:20:24have all this money and it became
1:20:26completely apparent to me that it was
1:20:27not about the money it was all about
1:20:29competition I then went and met another
1:20:31billionaire who was in Manchester runs
1:20:32another big company Manchester everybody
1:20:33knows the company and it was the same
1:20:35thing with him it was the thing that had
1:20:37got him to a billion was the thing that
1:20:40was going to keep him going after a
1:20:41billion yeah I mean there's there's a
1:20:44chapter in my book about natural Maniacs
1:20:46like people like wild Minds people the
1:20:47kind of person like Elon Musk who has
1:20:49that mindset to say you know when he was
1:20:5230 years old or whatever he took on GM
1:20:55Ford Chrysler and NASA when he was like
1:20:5730 the kind of person who thinks that is
1:21:00not the kind of person who's going to
1:21:01say I have enough I'm going to put it
1:21:03all in Muni bonds and go live on the
1:21:04farm like it's not the person who thinks
1:21:07they can do that and can pull that off
1:21:09is the kind of person who's never going
1:21:10to stop if Elon Must List till he's 97
1:21:12he's going to be starting new rocket
1:21:13companies for sure do you think he's
1:21:15happy no absolutely none I think most
1:21:17people in that situation the word that I
1:21:19would use is tortured I think they wake
1:21:21up every morning tortured at the
1:21:23problems that they are aspiring to solve
1:21:25that they haven't solved yet there's
1:21:27almost no biography of a very successful
1:21:30person like that of that level of
1:21:32success that you would read their
1:21:33biography and say that life sounds great
1:21:35it's one of the things that hit me like
1:21:36a train truck was those two billionaires
1:21:38I met were just the most miserable
1:21:40people absolutely and I met their their
1:21:42one of their sons and they go dad is so
1:21:44unhappy I remember him saying that to me
1:21:46and just go [ __ ] he's going to that
1:21:48office every single day has a billion
1:21:49dollars and his kids think he's like sad
1:21:52there's this amazing story do you
1:21:54remember uh
1:21:55Myspace back in the day before before
1:21:57Facebook and the guy who ran it his name
1:21:58was Tom I forget his last name but when
1:22:00you signed up for Myspace Tom was your
1:22:02first follow he was the founder of
1:22:04Myspace and every he followed everybody
1:22:07and he sold Myspace I think to Qualicom
1:22:10maybe no I'm sorry he sold he sold
1:22:13Myspace to Viacom and uh did pretty well
1:22:16let's say I'm guessing let's say he made
1:22:18$50 million it's probably something in
1:22:20in in in that range it's it's probably
1:22:21nothing that's dramatic 500 was it he
1:22:24sold the company for that much actually
1:22:26don't but it was it was it was it was a
1:22:28good but not extraordinary sum of money
1:22:30and you can see his life on Instagram
1:22:32it's not exaggeration he's like travels
1:22:34around the world with his girlfriend
1:22:36hiking in Bali it looks like at least
1:22:38from Instagram he lives this amazing
1:22:39life and then think about Mark
1:22:41Zuckerberg who is like every year hauled
1:22:43before Congress where he's like screamed
1:22:46at for causing all of society's ills and
1:22:48he has so much on his shoulders and
1:22:50Facebook stock fell 70% last year
1:22:53because everyone thinks it's going to
1:22:54and like it looks like a very stressful
1:22:56incredible amount of pressure on his
1:22:58shoulders if you were to ask me which
1:23:01one of those lives would I take would I
1:23:02rather be someone with $50 million who
1:23:04was traveling around the world hiking in
1:23:07Bali with my wife or would I be wor a
1:23:09hundred billion do and wake up every
1:23:11morning scared shitless with so much
1:23:13pressure on my shoulders for me it's
1:23:15obvious I'd much rather be Tom than Mark
1:23:17but that pressure is a drug in the sense
1:23:21that when I say the pressure is a drug I
1:23:22mean we know from motivation psychology
1:23:25and I mean I think I saw on the back of
1:23:27your your book yeah Daniel H pink y
1:23:30Daniel pink told me that when people
1:23:32aren't sufficiently challenged they lose
1:23:33motivation and their level of challenge
1:23:35kind of increases so to be engaged with
1:23:37a task you need to um and you think of
1:23:40this like game psychology the levels
1:23:42need to get harder and harder for you to
1:23:43be engaged that's why every game we play
1:23:45it's not on level one over and over and
1:23:47over again we need it to go to level two
1:23:48crosswords get more difficult we stay
1:23:50engaged do you not think that's the case
1:23:52with like a big famous CEO know that
1:23:54their engagement appetite their
1:23:56challenge appetite just grows and that's
1:23:59the only way they can stay engaged solve
1:24:01bigger problems I think if you look at
1:24:02someone like Bill Gates I think he had
1:24:04figured out business and in 2000 he he
1:24:09effectively quit Microsoft but he
1:24:10immediately moved on to what I think was
1:24:12in his mind a bigger problem which was
1:24:14like how do I give this money away
1:24:15effectively and how do I eradicate
1:24:17malaria those kind of problems and so
1:24:19even for someone like him who was able
1:24:20to extract himself from the business
1:24:22they' immediately move on to something
1:24:24that I think in his mind was more
1:24:26problematic and a bigger challenge so
1:24:28there's never going to be a period where
1:24:29someone like that were to say I've had
1:24:30enough I'm just going to retire to read
1:24:32books like that will never be the case
1:24:34it's always going to be I think they're
1:24:35addicted to the challenge is what it is
1:24:38yeah and I think I I think I am I think
1:24:40I think everybody is to some extent and
1:24:42the mus and the gates those people are
1:24:44extreme examples of it but every I think
1:24:46everybody needs a minimum level of
1:24:49stress in their life and the irony is
1:24:51that we all kind of dream about like
1:24:53what can I do to at the stress so I just
1:24:55wake up in Nirvana every day and you
1:24:57can't everyone needs to have some sort
1:25:00of conflict Strife challenge stress in
1:25:03their life and for I think for a lot of
1:25:04people if they don't get it from real
1:25:06places they just make up fake problems
1:25:08in their life that's that's a big
1:25:09problem with people for people who
1:25:11richer people who have a lot of things
1:25:12they will start worrying and stressing
1:25:14about the most minute things because
1:25:16they need that stress in their life on
1:25:19that point as well just popping back to
1:25:20we were talking about the complacency
1:25:22the other thing that I think successful
1:25:24people become a victim of is their own
1:25:27correctness I think about that with me
1:25:29like I've been right about several
1:25:30decisions in a row so surely that
1:25:32creates evidence that I'm probably right
1:25:34again and that can be your downfall as
1:25:36well or what a lot of it is is you were
1:25:38right on this topic and then therefore
1:25:40you assume that you're going to be right
1:25:41on another topic and you didn't know the
1:25:42role luck might have played you didn't
1:25:44know what luck would play but let's say
1:25:45you're a very successful investor and
1:25:48then and they'll say you're like
1:25:49massively successful a lot of those
1:25:50people will think therefore I can also
1:25:53be an effective politician
1:25:54therefore I can also be an expert on Co
1:25:57whatever it would be because they think
1:25:58they're so smart in this area that they
1:26:00must be smart in other areas a lot of
1:26:02doctors have this problem with investing
1:26:04where they think I'm a doctor I'm very
1:26:06successful I got a PhD from a great
1:26:08school therefore I can pick the stocks
1:26:10because I'm a smart person and that
1:26:12level of overconfidence is their undoing
1:26:14can success I think your book the one of
1:26:16the key things that stayed with me and I
1:26:18didn't need to recap myself on was the
1:26:19stories you told about people
1:26:22that accurately predicted what was going
1:26:25to happen in the stock market against
1:26:26all conventional wisdom they all from
1:26:29what I recall they went on to lose their
1:26:30money eventually anyway a lot of them
1:26:32yeah yeah what is that story you told in
1:26:33your book there's a story about a guy
1:26:34named Jesse Livermore who was back in
1:26:36the 1920s he was the most successful
1:26:38investor in the world and what's so
1:26:40amazing about Jesse Livermore is that I
1:26:42think four different occasions in his
1:26:43life he became the equivalent of a
1:26:45billionaire adjusted for inflation and
1:26:47then went bankrupt four separate times
1:26:49in his life so he was the person who was
1:26:51like better at anyone in the world at
1:26:54making money and had no skill whatsoever
1:26:56at keeping money and that's someone who
1:26:59like even when he became at one point he
1:27:01was the richest man in the world and
1:27:03rather than saying I have enough it's
1:27:05enough he have said let's cap te bigger
1:27:07bets let's swing even harder next time
1:27:09it goes never enough and he eventually
1:27:12the last time he went broke he
1:27:13eventually ended up killing himself it's
1:27:15the most amazing like just fascinating
1:27:17life that you can imagine of someone who
1:27:19is so good at making money but never
1:27:23knew when to stop and it is actually the
1:27:25more money he made the more risk he
1:27:26wanted to take so it was always like his
1:27:29I I think his outcome was always
1:27:32predestined because there was never
1:27:34going to be a moment like the Richer he
1:27:35be the more successful he became the
1:27:37higher the odds that he was going to
1:27:40fail and I think there's some version of
1:27:43that for a lot of people because it
1:27:44because their success increases their
1:27:47confidence more than their ability and
1:27:49they don't even know that that's a
1:27:50problem that you can't self diagnose
1:27:52like if you're confident you think it's
1:27:53earned and you think it's real and and
1:27:56then because you're successful a lot of
1:27:58people who when you were poorer or less
1:28:00successful they would tell you you're
1:28:02being an idiot you're wrong you're not
1:28:04right about this but when you're rich
1:28:06maybe because you employ them or because
1:28:08they think that you're so smart even
1:28:10when you say something stupid they might
1:28:12go yeah maybe it's right go for it and
1:28:15therefore you don't have people who are
1:28:16telling you how overconfident you are
1:28:18that again it comes down to humility
1:28:20doesn't it a lot of it yeah and like I
1:28:22think that's that's that's so much of it
1:28:24and like and I think you have to go out
1:28:25of your way sometimes for that humility
1:28:27that when you have some level of success
1:28:29in your life whatever that level is just
1:28:31always remind yourself I think I
1:28:33remember there was a quote that I think
1:28:34it was um Roman Warriors that when they
1:28:37would come home from a battle that they
1:28:38won and they were in like the Parade of
1:28:42you know like we won the battle and
1:28:43we're going to go in the parade that
1:28:45like we're we're the victors were so
1:28:46great that they would have someone by
1:28:48their side whispering in their ear
1:28:51something something along the lines of
1:28:53you're not that great
1:28:54because they're in this parade where
1:28:55they're glorious and like Victorious but
1:28:58they need to someone to bring them back
1:28:59down to earth and be like hey you're
1:29:01just a you're just a dude you're just a
1:29:03guy you're not that special you're very
1:29:05fallible like make the like tame it down
1:29:08they would actually hire people to do
1:29:09that for them and I think if you look at
1:29:11a lot of like the great entrepreneurs a
1:29:13lot of the great investors they will
1:29:15have some sort of partner with that
1:29:18Charlie Munger is that to Warren Buffett
1:29:20like when Warren Buffett comes up with
1:29:22an idea a big part of Charlie munger's
1:29:23job is to tell him when he's being an
1:29:24idiot and to have someone like Warren
1:29:26Buffett who will trust a person like
1:29:28that and to have someone like Munger who
1:29:29is willing to do something like that is
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1:31:16I use that information to determine how
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1:31:46how you get on confidence which comes
1:31:50from success often really does create
1:31:52blind spots and that's something I think
1:31:53about so much like how do I stay aware
1:31:57of those blind spots in my life that you
1:32:00know the success I've had in various
1:32:01areas has undeniably created and
1:32:04honestly a lot of I just go just save
1:32:05loads of money Steve because the day
1:32:07you're wrong you don't want to go broke
1:32:09I also think about that like whenever
1:32:11the curtain comes down on my career I
1:32:12want to make sure that I can say like
1:32:14hey thank you for for for letting me
1:32:18have this I'm so grateful for it but I
1:32:20I've saved enough that like I'm ready to
1:32:21pass a baton to someone else and that's
1:32:24a form of humility too there's a quote
1:32:26from Denzel Washington where he's
1:32:27talking to Will Smith After Will Smith
1:32:29slapped Chris Rock remember that whole
1:32:31debacle after that show Denzel
1:32:33Washington comes up to Will Smith and he
1:32:34says will when you're at your highest
1:32:36moment in your career that's when the
1:32:38devil's going to get you and it's like
1:32:41when when when you when your career is
1:32:42so high and you're so famous you think
1:32:44so highly of yourself that you can do
1:32:45anything that's when you're going to get
1:32:47yourself into
1:32:48trouble what a powerful quote and I
1:32:51think just paying attention to that
1:32:52that's the natural humility that goes
1:32:54into it and it's not false humility it's
1:32:56not like oh I you know false humility is
1:32:58like I I didn't do any of this I just
1:33:00got lucky that's all false humility I
1:33:02think real humility is like I built this
1:33:04through hard work and I made some good
1:33:06decisions but I'm just I'm just a guy
1:33:08I'm as fallible as anybody else I think
1:33:11that's it's that's not just important I
1:33:12think that's critical to any amount of
1:33:14sustainable success you taught me that
1:33:16the price you pay to be wealthy is the
1:33:20volatility you have to incur along the
1:33:23way kind of how I think about it in my
1:33:24head that's the cost of admission to
1:33:26being to being wealthy and to to be to
1:33:28any level of success is putting up with
1:33:30an enduring unknowns and volatility and
1:33:34Booms and busts and then other [ __ ]
1:33:36that you put up with in the investing
1:33:37market and in your career and in your
1:33:39relationships there's always a cost for
1:33:42anything good in life there's a cost
1:33:44that you have to pay like of course like
1:33:46nothing's free like that but most of the
1:33:48costs that you pay are not they don't
1:33:50have a price tag that you can just
1:33:51measure very cleanly like the cost of
1:33:54doing well at investing is putting up
1:33:55with volatility the cost of a successful
1:33:57career might be long hours where you
1:33:59were pulled away from your family the
1:34:01cost of a relationship is like always
1:34:03needing to sacrifice and compromise for
1:34:06the other person nothing is ever free
1:34:08and so much of the success in life is
1:34:10just identifying what the cost is and
1:34:12being willing to pay it because for all
1:34:14of those things I just laid out
1:34:15investing career relationships the cost
1:34:18of admission is worth it putting up with
1:34:20the volatility is worth it over time
1:34:23because if you can put put up with the
1:34:24stock market falling 30% if you could
1:34:26just say ah it's not that big a deal I'm
1:34:27just going to hold tight 10 years from
1:34:29now the cost is well worth doing that be
1:34:31rich if you can put up with the
1:34:33compromise that takes to have a
1:34:34successful relationship by and large
1:34:36that's going to be a cost that's worth
1:34:38paying because you know like so much of
1:34:40what matters in life is just the
1:34:42relationships that you have and once you
1:34:44identify the cost of that relationship
1:34:46you're like oh I'll pay that cost all
1:34:47day long so worth it this requires you
1:34:49to be cognizant of time Horizons and
1:34:51your own time Horizons which is
1:34:52something you talk a lot about in
1:34:54chapter 16 of the psychology of money
1:34:56why is it important for us to know our
1:34:58time Horizons and what do you mean by
1:35:00time Horizon it's the the amount of time
1:35:02between now and whatever your goal is
1:35:05which is very different for everybody
1:35:06not just by your age but like if you
1:35:08want to retire early or whatever would
1:35:09be like everyone's going to have a
1:35:10slightly different time Horizon what's
1:35:12yours mine I mean I you would break it
1:35:14up into different chunks like I want to
1:35:16get to a point or maybe I'm nearing a
1:35:18point in my career where I'm just doing
1:35:21things because I enjoy them there's
1:35:24really no Financial incentive to what
1:35:25I'm doing that's one time Horizon
1:35:28another is like okay once my kids start
1:35:31getting older I I want to make sure that
1:35:32like I'm always there for them when they
1:35:34need me teenage years are so difficult
1:35:36for people like I'm always 24/7 I'll be
1:35:39there for you which means I'm going to
1:35:40have to pull back there's going to be a
1:35:41point where I just say look I've
1:35:43accomplished what I want to with writing
1:35:45and I want to be able to move on to
1:35:47something else and there's going to be a
1:35:48point where I say I really don't want to
1:35:49work that much anymore I just want to
1:35:50move on and maybe I need to take care of
1:35:52my parents would it be so like there's
1:35:53multip multile different time Horizons
1:35:54at different goals of your life is
1:35:56buying a house a good or bad financial
1:35:58decision I'll tell you my own experience
1:36:00which was in my 20s and early 30s my
1:36:03wife and I lived in like seven different
1:36:05cities and there was nothing better for
1:36:07us some of those were just like let's
1:36:09try this new city for fun some of it was
1:36:11moving for work we moved for her school
1:36:14and our ability to just get up and go
1:36:15hand the keys back to the landlord
1:36:17nothing was more valuable than that once
1:36:19we had our son our first kid then very
1:36:22quickly nothing became more valuable to
1:36:24me than having an established secure
1:36:27home base that nobody could take away
1:36:29from me that was The Cure and also like
1:36:32kids are loud and they scream and I
1:36:33didn't want Neighbors in an apartment
1:36:35building that I was going to have to
1:36:36like try to keep my kid quiet from so I
1:36:38was I want my own house that's mine and
1:36:40it's just a standalone house my kid can
1:36:42scream as loud as he wants not bothering
1:36:44anybody else that became important to me
1:36:46like instantly so it's Le I think people
1:36:48get caught up when they're like well the
1:36:50housing market returns 4 and a half% per
1:36:52year that's it's like with the
1:36:54spreadsheets like just do what's going
1:36:56to work for you I know I know RIT Siti
1:36:59has a lot of thoughts about this on
1:37:01renting versus buying and I think one
1:37:03one of like the differences between
1:37:05remit and myself is I have two young
1:37:08kids and so like that that if I didn't
1:37:10have kids I think I would be like rent
1:37:12rent forever really and try and try
1:37:14different cities move all move all
1:37:15around what could be better than that
1:37:17but when you have kids what's more
1:37:19important to me is stability I want my
1:37:21kids to go to a stable School know their
1:37:23neighbors have friends that they can be
1:37:24friends with for years that's important
1:37:26if we just think about investing then in
1:37:28terms of is buying a house a good
1:37:30Financial investment my brother who
1:37:31works in my company and he's the one
1:37:33that introduced me to your book many
1:37:34many years ago said to me something
1:37:36along the lines of Steve don't buy
1:37:40houses to make money because you have
1:37:42the ability to play a different set of
1:37:44games that very few people can play yeah
1:37:47and what I mean by that is he kind of
1:37:48explained it to me goes listen everyone
1:37:50can buy a house so the returns there
1:37:52aren't going to be huge go find a game
1:37:54that like only you can play you'll get
1:37:56bigger returns if you're buying a house
1:37:58because you think it's going to be a
1:37:58good Financial investment stop like even
1:38:01if it turns out in hindsight that it was
1:38:03it doesn't matter I think these are just
1:38:05purely lifestyle decisions and I think
1:38:07so many people get screwed up when
1:38:09they're in a spot in their life where
1:38:10they should be renting because they need
1:38:12to be mobile they need to move around to
1:38:13a new job new career new school whatever
1:38:15it is but they end up buying because
1:38:17they think they're going to make money
1:38:18doing it and that's like that's the
1:38:20problem so I own a house and if I ended
1:38:22up losing money on it I I I I don't
1:38:24think I'd care that that's not why I'm
1:38:26owning it I'm owning it just cuz I want
1:38:27the stability for my family I've just
1:38:29made an offer on my first ever house and
1:38:30I cuz I played I played other money
1:38:32games for the last decade of My Life um
1:38:35and now I have a partner and we've been
1:38:36together many years and we're both like
1:38:3831 years old and we're getting into that
1:38:40position now you know Y and my brother
1:38:42explained to me he goes listen this is a
1:38:45bad financial decision but it's a good
1:38:49emotional social life decision and you
1:38:51need to know how to separate the two
1:38:53don't mark this down as a way that
1:38:54you're trying to make money like you
1:38:56might make money in 20 years time if you
1:38:58just like if you're still living there
1:38:59look at it as you know you need
1:39:01somewhere to live and he must have got
1:39:02that from you when I when I when we
1:39:04bought our last house which was after I
1:39:05wrote this book so this is a different
1:39:07experience um I thought at the time and
1:39:10still think today I I probably paid a
1:39:11little bit too much I mean I paid the
1:39:12market rate but if you said like oh did
1:39:14you get a good deal I say no no not
1:39:16didn't bother me in the slightest that's
1:39:17not what I was doing it for it would I
1:39:19mean it would be like if you ask like if
1:39:22someone is deciding whether or not to
1:39:24have kids and they think about the cost
1:39:26of kids like forget of course you're
1:39:28going to dump hundreds of thousands or
1:39:31millions of dollars into your kids and
1:39:32it's G it's like if if money is coming
1:39:35into the equation like stop right there
1:39:37this is it should not do it you're doing
1:39:38it for very different reasons this is
1:39:40not an investment people people buy
1:39:42houses because they think that they're
1:39:43making loads of money from because there
1:39:44have been periods in time in which
1:39:45people have made loads of money
1:39:46historically like that's the anomaly
1:39:48historically in the US and the UK
1:39:50housing prices adjust over inflation go
1:39:52nowhere it's just been the last 20 or 30
1:39:55years that there's this very brief
1:39:56window of time that owning a house was a
1:39:59great investment Robert Schiller won the
1:40:01Nobel Prize about a decade ago for his
1:40:03work in showing that over the last 150
1:40:06years in the United States adjusted for
1:40:08inflation most home prices have been
1:40:10flat as a pancake it's just the last 20
1:40:12years that have inflated people's
1:40:14expectations of what a house can
1:40:16do statistically there's going to be at
1:40:18least one person listening to this that
1:40:21has made an offer as we speak for a
1:40:23house under the assumption that it's
1:40:25going to help them stack
1:40:29wealth if they were purely doing it for
1:40:31those reasons what would you tell them
1:40:33to do instead if that's purely the
1:40:35reason run for run for your life don't
1:40:37do it particularly I mean it it used to
1:40:40be and maybe it still is like this in
1:40:41many cities in America in the UK but it
1:40:44used to be that rentals were almost
1:40:46without exception shitty houses there
1:40:49were no good rentals a big change at
1:40:51least in America in the last 20 years is
1:40:52that most cities have tons and tons of
1:40:55luxury apartments to live in and that
1:40:56are great places to live and they're in
1:40:59the city centers and they got beautiful
1:41:00granite countertops and they're great
1:41:02places to live don't fall for the idea
1:41:04that you can't live well if you're
1:41:06renting I think that's that's that's the
1:41:08problem and realize that if you're doing
1:41:10it for financial reasons you're probably
1:41:12about to borrow a shitload of money for
1:41:15an investment that historically has been
1:41:17a very bad investment like if you put it
1:41:20in those terms like what are we doing
1:41:22here man going to borrow hundreds of
1:41:24thousands of dollars for an investment
1:41:27that historically has been a loss that's
1:41:29what you're doing here does you feel
1:41:31good about that that's what I'd say to
1:41:33that person God
1:41:35speed I I would love to be in the room
1:41:37somewhere where that person has just
1:41:39looked at their partner after persuading
1:41:42them to make that offer because it was
1:41:43going to make them Rich sorry guys the
1:41:45um this new
1:41:48book same as ever essentially it's 23
1:41:52short stories about things that never
1:41:53change in the world y well there's a
1:41:55couple of really interesting things that
1:41:56I pulled out one of them again which
1:41:58really hit me in the face was this idea
1:42:00that the best story wins I know this I
1:42:03know this intuitively I talk about it on
1:42:04stage but I don't think people
1:42:06understand the power of the best story
1:42:09wins because when you think about
1:42:10entrepreneurship or investing or
1:42:11pitching or sales what most people do is
1:42:14they lead out with facts stats and
1:42:17figures yeah and even one of the things
1:42:19I've noticed about you from our
1:42:20conversation now is you have a
1:42:21remarkable ability to tell stor thank
1:42:23you and there's a huge power in that
1:42:26prove to me that the best story wins I
1:42:30mean it's it's always the case that it's
1:42:31not the right answer or the best answer
1:42:34or the mathematically accurate answer
1:42:36it's just whoever gets people to nod
1:42:37their heads in the right direction
1:42:38that's who's going to win over time some
1:42:40of the examples of this that I Love Ken
1:42:42Burns one of the most famous uh
1:42:44documentary filmmakers of all time most
1:42:47of what is are in his
1:42:49documentaries is is information that
1:42:51people already know he'll make a
1:42:52documentary about Civil War World War II
1:42:54Vietnam whatever it would be there's not
1:42:56you're not learn necessarily learning
1:42:58something new in there but he is
1:43:00massively successful massively popular
1:43:04because he's probably the greatest
1:43:05Storyteller of our time so even when
1:43:07you're taking information that people
1:43:08already know if you can spin a good
1:43:10story about it you get people lining up
1:43:13and they will knock your door down to
1:43:15listen to you one other example of this
1:43:17are people who tell comedy if you're a
1:43:20good comedian like that's all just
1:43:22storytelling and a lot of what a good
1:43:23comedian does is takes something that's
1:43:25very obvious and simple but you can make
1:43:29you can tell a good story about it you
1:43:30can make people laugh and all of a
1:43:31sudden you get their attention and
1:43:32they'll remember it you said in the book
1:43:34not the best idea or the right idea or
1:43:35the most rational idea just whoever
1:43:37tells a story that catches people's
1:43:39attention I think there are dangerous
1:43:41stories which is when people want to is
1:43:43when people tell you what you want to
1:43:44hear oh I got a dangerous story The
1:43:46vaccine gives you autism I think I think
1:43:49it's a story that people wanted to hear
1:43:50some people wanted to hear that and if
1:43:52you tell people what they want to hear
1:43:53you can be wrong forever and people
1:43:56won't care because you tell them what
1:43:57they want to hear T shrot who's a
1:43:59neuroscientist sat here and she told me
1:44:00a story of Donald Trump stood on the
1:44:02debate stage and they panned over to Dr
1:44:05Tucker Carson I believe he's called and
1:44:06asked him about the vaccine and he
1:44:08basically gave stats facts and figures
1:44:10He said That vaccine doesn't give kids
1:44:11autism and then they like pan over to
1:44:13Donald Trump and Donald Trump tells this
1:44:16elaborate story about a friend of his
1:44:18one person one friend of his clearly
1:44:21doesn't exist one friend of his and he
1:44:23describes the needle like this he goes
1:44:26this huge needle yeah and he so vivid
1:44:29Vivid personal and emotional yep and you
1:44:32get people nodding their heads to that
1:44:33and and and capturing their attention
1:44:35tally said I'm a neuroscientist I knew
1:44:36it was wrong however there was something
1:44:39about hearing it that even as a
1:44:40neuroscientist I look to my daughter and
1:44:42go [ __ ] I think we've always been
1:44:44storytellers and that's what's really
1:44:46set humans apart that's the whole idea
1:44:48from youval no Harari is that like what
1:44:49sets humans apart is our ability to tell
1:44:51and remember stories and it's made it so
1:44:54it's just a tool to simplify facts in
1:44:57the world like most people the other
1:44:58thing is powerful about stories is that
1:45:00you remember them you think about in
1:45:02school when you had a math test and the
1:45:04teacher just said memorize this formula
1:45:07to regurgitate it on the test literally
1:45:095 minutes after the test is done you
1:45:10forget it you have no idea what it was
1:45:12but if you remembered a good story even
1:45:14that you were told when you were two
1:45:15years old you remember it for the rest
1:45:17of your life so it's just a tool for
1:45:20getting people to remember how the world
1:45:21works and they be so persuasive and so
1:45:25good at eliminating the uncertainty that
1:45:28grates on all of us that people will
1:45:30listen to and believe things even when
1:45:32they're just obviously flagrantly not
1:45:34true if it's what they want to hear
1:45:36people talk about um when we're talking
1:45:39about investing but generally life
1:45:40people talk about compounding interest
1:45:42and we all know the I think a lot of
1:45:43people should know the power of
1:45:44compounding interest now but we rarely
1:45:47think about how compounding interest can
1:45:49negatively slowly impact our lives and
1:45:52in your chapter about tiny and
1:45:54magnificent you explore that and again
1:45:56this hit me like a truck in the face
1:45:58because I I think I spend my time now
1:46:00thinking about how getting things to
1:46:02compound in my fa favor will change my
1:46:04life but I don't spend a huge amount of
1:46:05time thinking about how things are
1:46:06compounding against me right now yeah
1:46:08what what's really true is that most
1:46:10good news happens slowly and most bad
1:46:12news happens very fast so bad news is
1:46:15like Co literally happens overnight boom
1:46:17you got a you got a virus it's going to
1:46:18kill millions of people shut down the
1:46:20economy happens literally overnight 911
1:46:22Happ happens start to finish it's like
1:46:2430 minutes like boom just happens
1:46:25immediately good news is usually slow
1:46:28compounding over time so I use the
1:46:30example of the book of like the
1:46:31Improvement in heart disease mortality
1:46:34over the last 70 years is Bonkers we've
1:46:36made so much progress and saved
1:46:39literally tens of millions of lives in
1:46:41the fact that we've gotten better at
1:46:43treating heart disease and but nobody
1:46:45talks about it it's like it most people
1:46:48are aren't even aware that it's happened
1:46:49because if you look at what happened it
1:46:51was the mortality improved it got better
1:46:53by about 2% per year now if you compound
1:46:552% per year for 70 years it's off the
1:46:58charts we're like living in such a
1:47:00better world now than we were 70 years
1:47:01ago but in any given year you didn't
1:47:03even notice it you're never going to see
1:47:05a news headline like breaking news heart
1:47:07disease mortality improves by 1.4%
1:47:09that's not a headline like all the
1:47:11headlines are bad news because bad news
1:47:13happens fast so once you realize that
1:47:15then it's like most of the news is going
1:47:18to skew negative not because there's
1:47:20some producer who's trying to toy with
1:47:21your brain it's just because what is
1:47:24obviously happening today tends to be
1:47:26the bad news where the good news is just
1:47:28very slowly compounding over
1:47:31time that can go in the other direction
1:47:33of like bad news that compounds over
1:47:35time I think about our health smoking
1:47:37Health like that's like in like one
1:47:39cigarette is not going to do anything
1:47:41bad for you but one cigarette per day
1:47:43for 30 years is catastrophic and so
1:47:46that's that's really what it is like
1:47:47same with like getting one bad night
1:47:48sleep not that big a deal but if you're
1:47:50sleeping 6 hours a night every night for
1:47:53years on end you're going to reduce your
1:47:54life expectancy by a tremendous amount
1:47:56this idea of compounding interest and
1:47:58compounding returns and how important it
1:48:00is I've spent so long trying to explain
1:48:02to people that compounding interest and
1:48:04compounding returns this very hard thing
1:48:06to think about is so important I imagine
1:48:09you have two what is your go-to way of
1:48:11explaining to like your eight-year-old
1:48:13kid or someone else the power of
1:48:15compounding we were actually going to
1:48:16get like a bowl of rice here and I was
1:48:17going to do some experiments the rice is
1:48:19the best the the rice board experiment
1:48:20if you if people aren't familiar with it
1:48:22it's this story that's probably not true
1:48:24that back 500 years ago someone uh you
1:48:27know told the king they said hey here's
1:48:29a here's a chess board I'm going to put
1:48:31one grain of rice on the
1:48:33first Square two on the second Square
1:48:36four on the third and then let's do that
1:48:38and by the end of the chessboard that's
1:48:41like it's like more rice than exists in
1:48:43the entire world because like if you
1:48:44double something again and again and
1:48:46again it's just completely
1:48:47counterintuitive how big it can grow the
1:48:49one way that I I I had a friend of mine
1:48:51Michael batnick explained this to me
1:48:52years ago I think he wrote this in a
1:48:54blog post he said if I ask you what is 8
1:48:57plus 8 plus 8 plus 8 you can do that in
1:48:59your head like it's it's not it's not
1:49:01that hard but if I say what is 8 time 8
1:49:03time 8 time 8 like forget about it even
1:49:05if you are really mathematically
1:49:07inclined there's no way you can like
1:49:09very few people could figure that out in
1:49:10their head so our minds are just not
1:49:13good at exponential thinking that's just
1:49:15not it's it's just not something that
1:49:16we're really geared towards doing like 8
1:49:18plus 8 plus 8 it's like so simple linear
1:49:20thinking so simple exponential thinking
1:49:22not intuitive in the slightest and
1:49:24because it's not intuitive it's so
1:49:25common to underestimate what smoking is
1:49:28going to do to you that compounds over
1:49:30time what investing is capable of doing
1:49:32to your wealth because it's so
1:49:34counterintuitive that 99% of Warren
1:49:36Buffett's net worth came after he was 60
1:49:38years old not intuitive at all and so
1:49:41since exponential thinking is not
1:49:43intuitive both on the positive and the
1:49:44negative side we go through life
1:49:47underestimating what's going to happen
1:49:49to us in good things and bad things it's
1:49:50like a religion we have to adopt I think
1:49:52I think that's a great way it's it's
1:49:53like a mathematical religion because
1:49:56just like a lot of religion it's like
1:49:57it's not intuitive and it almost takes
1:49:58like a leap of faith to be like I know
1:50:00it's seems crazy but this is this is
1:50:02what I believe I think there's a sense
1:50:04of that to compounding where like it's
1:50:06just math you can just put the numbers
1:50:07in a spreadsheet and they'll tell you
1:50:08what it is but since it's not intuitive
1:50:11there's almost like a religious aspect
1:50:12that you need to believe how powerful it
1:50:14can be over time two of the chapters in
1:50:16your book same is ever speak to the
1:50:17importance of discomfort one of the
1:50:20chapters is called when the magic
1:50:21happens and you say in that chapter
1:50:22stress pain discomfort shock and disgust
1:50:24for all its tragic
1:50:26downsides it's also when the magic
1:50:29happens and then the other chapter where
1:50:31you kind of speak to this is It's
1:50:32supposed to be hard most things worth
1:50:34pursuing charge their fee in the form of
1:50:36stress uncertainty dealing with quirky
1:50:39people bureaucracy other people's
1:50:41conflicting incentives hassle nonsense
1:50:43long hours and constant doubt that's the
1:50:45overhead cost of getting ahead what's
1:50:47interesting is I never tied those two
1:50:48chapters together but you're right
1:50:49they're they're almost the exact same
1:50:51idea that for the the whole economy for
1:50:53the whole world when the biggest
1:50:54improvements in society takes place is
1:50:56when there's some sort of disaster like
1:50:58for all of its obvious downside and
1:51:01death and destruction nothing has been
1:51:03more technologically Progressive for the
1:51:05world than World War II the number of
1:51:07inventions that came out of World War II
1:51:09from atomic energy to Jets and like go
1:51:12on down the list penicillin all of these
1:51:14lists for things that you and I are
1:51:16taking advantage of today happened not
1:51:18in spite of but because of World War II
1:51:20because there was this period where
1:51:21everyone in the world came together and
1:51:23they're like holy [ __ ] we got a big
1:51:24problem to figure out let's put our
1:51:26heads together and figure this out right
1:51:27now but that's also on a personal level
1:51:29on a personal level it happens as well
1:51:30too like there there's there's there's a
1:51:32book written many years ago called the
1:51:34upside of down that's I thought that
1:51:36just a brilliant title like the like the
1:51:37upside of being down and it happens a
1:51:40lot that when you have maybe it's a job
1:51:41layoff or a breakup or a medical
1:51:43emergency whatever it can be that it
1:51:45changes you for the good and it's hard
1:51:48it's always impossible to see that
1:51:49silver lining in the moment you don't
1:51:51ever imagine there's going be a silver
1:51:53lining in that moment but when you look
1:51:55back in hindsight it will be I saw this
1:51:57recent example of this that really
1:51:58knocked me on my ass it was Steven coar
1:52:01who I might be getting these details
1:52:02wrong but I think when he was uh a young
1:52:05child his father and brother died
1:52:08tragically and he said at one point that
1:52:12uh I don't want to put words in his
1:52:13mouth but he said something along the
1:52:14lines of like he is grateful for that
1:52:17and he was asked like what do you mean
1:52:18you're grateful for that and he said
1:52:19look of course I wish it never happened
1:52:22but it allowed him to understand the
1:52:26emotions of other people and get closer
1:52:27to other people who had also experience
1:52:29something like that and so even in like
1:52:31the deepest darkest moment of his life
1:52:34that he says he of course he wishes it
1:52:35didn't happen it taught him something
1:52:36about Humanity that he's Greatful for
1:52:38today that's an extreme example but I
1:52:41think for a lot of people being laid off
1:52:43from a job in the moment is going to be
1:52:45the hardest thing they've ever dealt
1:52:46with and in hindsight it's going to be
1:52:48one of the best things that ever
1:52:49happened to their career a breakup might
1:52:51be the hardest thing you've ever been
1:52:52through and in hindsight it might be the
1:52:54best thing that's ever happened to you
1:52:56so I that's always like that's when the
1:52:58magic happens is when things get really
1:52:59tough It's just always impossible to see
1:53:01that when you're going through it a lot
1:53:03of people would have clicked on to this
1:53:04conversation and if they've gotten to
1:53:05the end of the conversation well done to
1:53:07them what conclusion can we offer them
1:53:10based on everything we've talked about
1:53:11as it specifically relates to wealth
1:53:14creation and money first I think for
1:53:16both of these books we're almost ending
1:53:18exactly where we started which is like I
1:53:20hope they get you to think about your
1:53:22life in different way both of these
1:53:24books and the Publishers hated this
1:53:26there's no advice in the books never do
1:53:28I say and therefore you should do this
1:53:31and the publisher wants you to do that
1:53:32and I said no no no because I don't know
1:53:34you I don't know the person reading this
1:53:35book who am I to say what you should do
1:53:37with your own life I don't even know to
1:53:38do with my own life but I hope it gets
1:53:40you thinking about what you want and who
1:53:43you are and what you are capable of what
1:53:46you're not capable of if it gets you
1:53:48thinking about your life then I think
1:53:50I've been successful doing this rather
1:53:52other than trying to assume that I can
1:53:53give you specific advice about what to
1:53:55do Morgan we have a closing tradition on
1:53:58this podcast where the last guest leaves
1:53:59a question for the next guest not
1:54:00knowing who they're going to be leaving
1:54:01it for and the question that's been left
1:54:03for you
1:54:05is what is your biggest regret in life
1:54:08and how has that experience changed
1:54:12you I think I've uh always been prone to
1:54:17mild depression not not significant but
1:54:20mild depression and anxiety and I wish I
1:54:23could go back to different periods of my
1:54:25life in a time machine and just say it's
1:54:28going to be okay it's not going to be
1:54:30easy it's not going to be perfect but
1:54:32it's gonna it's it's going to be fine
1:54:34and I I I look back not with regret but
1:54:38how much time have I wasted worrying
1:54:39about things that never happened and
1:54:42were almost certainly never going to
1:54:43happen a tremendous amount and even if I
1:54:47recognize that today I know I'm going to
1:54:49worry about something tonight and
1:54:51tomorrow and next week about something I
1:54:52really shouldn't be worrying about I
1:54:54don't know if I regret it because I
1:54:55think having a sense of worry has kept
1:54:57me safe A lot of times it's kept me out
1:54:59of trouble in in a lot of things but I
1:55:01do look back at the course of my life
1:55:03and think man like I could have been
1:55:05happier than I was if I had accepted a
1:55:09certain level of just telling myself
1:55:10it's going to be
1:55:12okay well you're not going to have to
1:55:13worry about your book because it's
1:55:15superb thank you genuinely I I you know
1:55:18hope my audience trust me um but I I
1:55:20would really implore them to get both
1:55:22books I mean the psychology of money I
1:55:23think is the best book on money ever
1:55:24written it's pretty much also the only
1:55:26book I've ever read on money and then
1:55:28same as ever is
1:55:30just it's everything it's advice on
1:55:33money life relationships everything that
1:55:35matters because there are a set of
1:55:36enduring principles that speak to the
1:55:39fundamentals of life in a way that is
1:55:41completely enduring you have a wonderful
1:55:42ability to write enduring things and you
1:55:44tell wonderful stories like you say I
1:55:46actually didn't even notice that you
1:55:47didn't give me advice when you said that
1:55:48You' not given me advice any and I never
1:55:50will to anybody bullshitting but you
1:55:51know think about it you didn't I I
1:55:53garnered my advice from the stories you
1:55:55told and the evidence you provided
1:55:57Morgan thank you so much I'm so glad we'
1:55:58managed to have this conversation and
1:55:59it's been a huge honor and pleasure um
1:56:02to meet you thank you as well because I
1:56:04can't imagine how many millions of
1:56:05pounds you've Saved Me by writing this
1:56:06book genuinely it's such an honor to do
1:56:09this with you Stephen this been a lot of
1:56:10fun thank
1:56:13you as you'll know this podcast is
1:56:15sponsored by hu and we're going into
1:56:17that last quarter of the year it's
1:56:18getting a little bit colder back into
1:56:20our routines back into our work rhythms
1:56:22and it's in those moments that I need to
1:56:25focus most on my diet as I get back into
1:56:27the swing of work I need to get back
1:56:28into a routine as it relates to my diet
1:56:30and that's really where hu's RTD they're
1:56:32ready to drink range comes in handy in a
1:56:34bottle you have a nutritionally complete
1:56:37meal that you can consume in a minute so
1:56:39this is a real Lifesaver in terms of my
1:56:40health it is my Ally and my friend and
1:56:44my companion on my busiest days and it
1:56:46means that even when I'm pursuing all of
1:56:47my professional goals my health goals
1:56:49can be pursued at the same time there's
1:56:51a link in the description below if
1:56:52you've never tried heels rtds this is
1:56:54the time if you're falling off of the
1:56:55wagon this is the sign you needed to get
1:56:57back on there's a link below in the
1:56:58description order yourself a pack stay
1:57:00healthy throughout this busy period do
1:57:03you need a podcast to listen to next
1:57:05we've discovered that people who liked
1:57:07this episode also tend to absolutely
1:57:09love another recent episode we've done
1:57:11so I've linked that episode in the
1:57:13description below I know you'll enjoy it
1:57:19[Music]
1:57:22a

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