Kind: captions
Language: en
the odds of you dying broke are
extraordinarily High making money is not
about being smart it's about not doing
dumb things dumb things that virtually
all of you are going to do but if you
want to beat the odds and all but
guarantee you'll die rich there is a
really simple formula to follow the
question is will you be able to do it
I'm joined today by bestselling author
Morgan housel and we're going to lay out
the formula for wealth
creation the single biggest problem is
figuring out what you want what you're
good at what your risk tolerance is and
that's going to be a very unique answer
for you and I always cringe whenever
there's any kind of financial content on
TV or online or on YouTube where it says
you should do this and I'm like who are
you talking to are you talking to a
17-year-old day trader are you talking
to a 95-year old Widow are we going to
pretend like those are the same people
with the same goals and a big part of
this is I feel like a lot of financial
debates when people saying you should do
x no no no no you should do why they're
not actually disagreeing with each other
it's people with different goals and
different time Horizons talking over
each other and so so much of the
psychology of money is us being looking
in the mirror and being introspective
into saying who am I what do I want and
what's the best path for me and one of
the most dangerous things that you can
do is take your cues and get from get
your advice from people who are playing
a different game than you are you have
people who are chasing other people's
dreams and when it doesn't work or if
they get there they realize they're not
happy it's like yeah because that wasn't
your game that's not what you actually
wanted to begin with really what every
business is is solving somebody's
problem figuring out a problem for
someone else that's a very very basic
way to describe a business but you would
be surprised how many businesses ignore
that fundamental concept and when
they're making a product when they're
making a marketing plan whatever they're
forgetting that part of it what is a
problem that somebody else has and what
can we do to fix that one that really
sticks out to me here that I wrote about
a lot in the psychology of money is the
math behind compounding is not intuitive
at all to most people so all wealth
comes from compounding compound interest
that's very basic but the math behind it
always screws people up I frame it this
way if I asked you what is 8 plus 8 plus
8 plus 8 you could you could figure that
out in 5 seconds but if I said what is 8
time 8 time 8 time 8 time 8 your head
your head explodes you can't figure it
out like we're just not meant for
compounding or a simple statistic like
this 99% of War it's net worth he's
worth $100 billion 99% of that came
after his 60th birthday bananas was
accumulated after his 60th birthday that
number doesn't doesn't compute doesn't
make sense in people's heads because
that's how compounding works if he
retired at age 60 when he was worth $1
billion you would have never heard of
him the only reason he's successful and
has gained so much wealth over time is
because of how long he's been doing it
for it's because it's not just because
he's a good investor it's because he's
been a good investor for 70 years and
that's where all the money comes from so
that too is so easy to overlook like
people look at Warren Buffett and they
say how did he do it how did he pick
stocks what is he looking for how does
he think about valuation and management
teams those kind of things and that's
all important but the secret is that
he's been a good investor for 80 years
that's all of it and most people don't
have that kind of patience whether
they're an entrepreneur or just an
individual investor it's like how can I
make money fast and if you try something
new and it's not working you give it a
month or maybe six months before you're
like this isn't working I had to move on
to something else when all of the big
fortunes over time whether it's from an
entrepreneur or an investor have come
from people who are doing roughly the
same thing for an inordinate amount of
time and for most people in investing if
you're investing in the stock market
it's a one way to get wealthy over time
the secret is that average returns
sustained for an above average period of
time will lead to Magic that's all you
need to do everyone in the the stock
market is like how can I earn the
highest Returns what are the stocks I
can own this year that are going to
double what like how can I get money
fast and most of the time that's not the
strategy that you want that's not what's
going to earn you the most money over
time what's going to earn you the most
money is how can I earn what are the
best returns that I can sustain for the
longest period of time and if you can
just be average for 20 or 30 years
you're going to end up in the top 2% of
investors over
time there's uh a quote that you said
goes like this in finance spending less
than you make saving the difference and
being patient is maybe 90% of what you
need to know to do well so if it really
is that basic and I've had people on the
show that say very similar things yeah
and yet I mean it when I say that the
vast majority of the people listening to
the sound of my voice right now are
going to die broke yeah so what is it in
our minds that trip us up why can't
people do that I think for well first
there's a lot of societal pressures
pushing you away from that there's a
huge societal pressure that you're not
rich enough and even if you have money
you need to spend more of it your your
house isn't big enough your car is not
nice enough your clothes aren't flashy
enough so even when you get the money
holding on to it is a completely
different thing and my definition of
wealth is the money that you have not
spent yet that's what it is it's the
house you didn't buy the cars you didn't
buy that's what wealth is so earning
money to begin with is very difficult
for some people and for those who do
keep hold like holding on to it is a
whole another set of problems
that there's all these social pressures
pushing you away from when you frame it
as earn money save the difference invest
and be patient it's very very simple but
the social pressures like the math is
not difficult the social pressures
pushing you away from that are enormous
and then I think for even the people who
understand that basic equation it's too
simple for them to take seriously if you
look at that and say that's 90% of what
you need to know like okay but now let's
get into the fun stuff let's start
trading options like that's that's
what's intellectually stimulating for
them and so that's where their mind goes
even if that's that's how you chop your
fingers off in investing so for some
people it's too simple Health might be
the same of like eat a balanced diet get
some exercise and sleep eight hours okay
that might be 90% of what you need to
know for it but it's not exciting it's
not exciting for people so they're not
going to pay attention to it a lot of
what I write about in same as ever is
that the best story wins not the best
idea not the right idea not the accurate
idea not the best answer the best story
that gets people to nod their heads is
what's going to win in every Endeavor in
life business politics money investing
when you tell a story and people sit up
in their seats and they're like oh I
like that that sounds good that's the
person who wins that's who gets people's
attention and so in investing even if
what you need to know is very basic the
people who are telling a better story
and a more exciting story those are who
are going to get the followers and
that's where all the attention is going
to go to okay so how do we combat that
if you've seen uh or read I guess not
scene I think it was in The Odyssey
where the guy wants to hear the sounds
of the sirens so he says strap me to the
Mast so that I can't go anywhere and all
of you put wax in your ears so you can't
hear anything and then I'll be able to
hear you know the the song that calls
men to crash upon the
shore what is the thing that we can do
that has that kind of effect so that we
can know what to do and actually do it
this is a little bit fatalistic but I
think there's a lot of people who won't
be able to and we we're never going to
live in a world in which everyone in
society perfectly understands how to
make money and keep money and invest
money the reason that there is
opportunity in investment markets is
because most people are doing it wrong
that's who you're getting the
opportunity from if everyone did it
right there'd be no opportunity so we're
never going to live in a world in which
we're like we've solved the investing
problem everybody gets it in a way that
we've s we've you know uh eradicated
malaria from the United States like
we're never going to get to a point
where like we've eradicated bad
financial behavior it's never going to
happen so the truth is it's it's just
going to be very difficult a lot of of
it is just the social pressures and
think of a world where everyone tomorrow
is twice as Rich everyone just magically
there's no inflation but everyone's net
worth doubles tomorrow in that world
your expectations would double overnight
too because you don't just want to be
rich you want to be richer than your
neighbors so as everyone else gets
richer their inflations go their their
expectations inflate as well and so even
if everyone's making great decisions and
saving money and getting wealthier what
you actually want is to be richer than
other people and so no matter even if
we're all making great decisions and
becoming richer we're still going to
have that little bit of insecurity
that's pushing us towards bad decisions
so that part I think is never going to
is never going to change I do think at
the individual level for the some people
who can take this to heart and put it in
their own life I think it's trying to
figure out what your goals are and that
can be very different from the goals
that Society tells you that you want and
I think for most people not everybody
but most people at their core what they
actually want from money is independence
and autonomy they it's not that they
want a big house and a flashy car and a
private jet they want to wake up every
morning and say I can do whatever the
hell I want today even if what they want
to do is go to work they don't want to
be told by somebody else what to do they
don't want to have a boss or a banker
telling them what to do and when to do
it they want to be independent and
autonomous and so if that's your goal a
lot of a lot of doors open up in finance
of like that's my goal for money I just
want to be independent I'm not that
materialistic of a person I just want to
make sure that nobody's telling me what
to do I want to wake up and do
everything on my own terms I think a lot
of people are like that but then the
goal is like okay I want to build up a
net worth that allows me to do that
enough money so that I'm not beholden to
other people's whims and one way to
think about it is that every dollar of
savings that you have is a piece of your
future that you own it's a claim check
on your time in the future and you can
flip that around and say every dollar of
debt that you have is a piece of your
future that somebody else owns it's a
claim check that they have on your time
and your work in the future so viewing
it like that like just that fundamental
goal of like that's what I'm after and
most people haven't defined what they're
actually after with money it's this
vague just like I want to be rich why
and it seems like a dumb question
because of like oh it seems great but
once you define why you actually want to
get there it might be different for
everyone then I think a lot of these
strategies
clarify it's very interesting all of
that makes a lot of sense to me the only
thing I will push back on is I think the
I think it was Charlie merer that said
the world doesn't run on Greed it runs
on Envy Y and so I will use that as a
counter to I don't I agree that people
want freedom but I think it's a distant
second subconsciously they're not
obviously being thoughtful about
prioritizing it but I think that comes a
distant second to what you said before
which is I want to dunk on my neighbors
yeah and so if you want a society to get
violent and actually turn on itself and
start literally shooting people in the
streets all you need to do is up the jny
coefficient so that totally agree
totally agree and for people that don't
know that phrase the jinny coefficient
is not absolute wealth it's the
differential in wealth between the rich
and the poor it's wealth inequality
exactly and so I think about this in
American terms uh even correlated to
what I've heard you say which is in the
1950s things were way worse than they
are now y but just just on like
objective every objective measure in
life expectancy the average size of the
house the average median American
adjusted for inflation is way better
today than they were in the 50s except
for one number and that's expectations
that based on how wealthy some people
are you could use the Genny coefficient
to measure that you know in the 1950s
for a lot of various reasons there was
not a lot of wealth inequality the gap
between rich and poor was much lower
than it was before or since a lot of
that was just like an echo from World
War II of how companies were managed and
the top marginal tax rate was 91% back
in the 1950s so you you didn't have CEO
making $30 million a year there were no
athletes making $30 million there were
no billionaire hedge fund managers it
just didn't exist and so in the 50s most
people looked at their neighbors and
their co-workers and everyone else in
their town and said relative to that
person I'm doing pretty well and so even
if their incomes were lower than they
are today and they're living in a
smaller house and driving shittier cars
and going on worse vacations they felt
great because relative to everybody else
around them they were doing pretty well
and I think what has happened over the
last 80 years is that on average our
incomes have gone up our net worths have
gone up our life expectancy has gone up
but so have everybody else's and so our
our expectations have gone up by even
more so I think there's a lot of people
for whom their income is doubled but
their expectations have tripled yeah and
they feel like they're worse off and
that's that's a formula that it's an
absolute recipe for misery you can
imagine a world in which our grandkids
are earning twice as much as us and have
way better Medical Technology they've
eradicated disease they they live in
Global Peace and they're no happier for
it because their expectations go up and
you can say that because the world that
you and I live in today is
indistinguishable from Magic 100 years
ago if someone 100 years ago could see
today's world with something as simple
as antibiotics they they wouldn't know
to what to make of it it would just look
like pure Utopia but are we actually
happier for it today how like how many
times do you wake up grateful for
antibiotics it just becomes something
that you expect and you're not grateful
for it and and everyone's like that I'm
like that everyone's like that like it
takes about 2 seconds for a new luxury
Innovation to become a baseline
necessity and so we can sit here today
and dream about eradicating cancer and
Ai and all these things that are like so
fun to dream about and would be great
things for society and if we're lucky
enough to have them we'll get used to
them in two seconds and so that's a big
problem with money it's just like if
your expectations grow with your
Prosperity you're never going to be
happy there's this great quote from the
philosopher monu he said this 300 years
ago he said if you just want to be happy
that's very easy to do but people want
to be happier than other people and
that's a very difficult thing to do and
one of the reasons he said is because we
think that other people are happier than
they actually are he said that 300 years
ago but now think what is social media
has done to that where now when we're
judging other people's prosperity and
happiness you go on Instagram and look
it's all fake it's all a curated
highlight real nobody posts on Instagram
the vacation photo of their kids crying
or fighting with their spouse it's all
the curated highlights if not airbrushed
highlights and that inflates everybody
else's expectations when they grow go on
and they say why how come I'm not as
beautiful rich and happy as they are
yeah and so that's we we live in a world
which like mon monu said that 300 years
ago if he saw today's world he I think
he would double down on that by an order
of magnitude yeah just be like yeah this
is exactly what I know to be true about
Humanity it's always been true it's just
so much worse now yeah this is what I
worry about when I think about um how
people avoid the Trap Of Dying broke how
they can get the freedom that they want
it to your point isn't so much about
money money is going to be a huge part
of the equation I don't want to lie and
as I always tell people money is more
powerful than they think it's just
different than they think yeah um but
the thing I want people to understand is
what is going to stop you from
generating wealth is your own mind
um it's funny because if I want to have
a clip or something that I do go not
necessarily viral but do very well all I
need to do is yell at people and be a
drill sergeant that's what people want
me to be and the reason is they want me
to intoxicate them with certainty they
want me to tell them precisely what to
do how to behave to stop doing that to
do this the bad news is the only thing
that I have that level of aggression and
certainty around is that people
shouldn't be so certain like that I will
yours think You' answer and it's never
going to be questioned you're going to
get hit by a freight train 100% And you
have got to cultivate like a deep sense
of distrust in your emotions particular
and if someone says here's the secret to
getting Ro here's the path to getting
rich just follow these three steps
that's what people want to hear that
sense of certainty just tell me how to
do it tell me the formula the truth is
there's no form
it's there are mindset ideas there
psychological ideas but everyone wants
the drill sergeant this is going to tell
them exactly what to do and how to do it
because that's that seems like the
easier path when a lot of like one of
the bestselling books of all time in
finance is is Napoleon hell's Think and
Grow Rich oh my God the book changed my
life it's a great it's a great book and
one of the Thor the keys of it is like
you have to Envision and imagine the
success that you're going to have in
order to get there it's a very vague and
nebulous point but I think that that's
the point is like if the secret to
wealth is like this very vague and
nebulous thing it's not do this do that
and step three you're rich it just
doesn't exist it doesn't exist here's
what I took away from thinking Grow Rich
and this that book I remember where I
was written like the 1920s very long old
he was I assume he was interviewing
effectively the robber barons of the day
like going around like who are the
people that have just amassed all this
wealth and I was on a plane I was broke
broke at the time and flying to see my
wife in who is now my wife then my
girlfriend to England and all the stops
you can imagine to get the cheapest
ticket possible um
and he says in the book like hey I've
given you the secret on every page of
this book but it's still not sinking
into you yeah and I'm like what I was
like what has he said on every page of
the book and then I was like oh if I
believe I can I can it but if I believe
I can't then then I won't right and I
was like oh my God that that thing in
that book changed my life in fact before
we started rolling I said to you I have
the saying I call the only belief that
matters yeah which is that if you put
time and energy into getting better at
something you will actually get better
at that thing yeah it wasn't directly
from him but it was a combination of him
and Carol D who wrote the book mindset
that made me realize oh my God it look
as somebody who's built businesses I
will just tell you you cannot wish your
way to success but if you don't believe
it's possible then you won't do the
things you need to do to get good at the
skills you need to get good at in order
toate wealth or whatever it is I think
whether it's an entrepreneur an investor
or a politician or an athlete a common
denominator that they have is just like
this incredible belief in their own
skills that they can do it no matter how
hard it's going to get that they can do
it themselves that they can eventually
get there this like like ridiculous
confidence in their own ability to get
[ __ ] done is a common denominate you're
going to see a lot of those people but
back to like Napoleon Hill that's the
idea of like if you believe in it you
can do it and if you don't believe in
yourself you're not going to get that
that's very different than the drill
sergeant saying do X Y and Z and then
step three Is wealth because I think
what Napoleon Hill told you was the
truth of like like let's leave aside the
actual like technical idea of like
believe in yourself and you can get it
done there there is no formula for
getting it done believe in yourself is a
vague nebulous concept but everyone out
there wants the hack everyone else wants
the shortcut of he' like follow the
three steps follow this simple trading
algorithm and you'll get rich tomorrow
but we can give them this is what drives
me crazy you've already given it to them
spend less than you make invest what you
save and give it a long time so it
becomes what you said earlier about but
your mind is going to [ __ ] with you yes
you won't like that it's not complex
you're going to be drawn to these very
like difficult things and there's H do
you have anything to say to that cuz
there's I'm going to move us on to like
this other thing that you said in your
book that I was like I totally disagree
with this oh good I that's this this is
what this is what I like talking about
the most the one thing I'd say is the
idea of spend less than you make and
save the difference is is much easier
said than done so as a formula that you
can put is it not going to work 100% of
the time over the last 100 years anyway
we no one can predict the future but
over the last whatever 120 years yeah
that would work every time yeah it's
just that most people won't do it
because it's harder than it is to say
okay so then before we move to the next
thing which I will take a note to make
sure I don't forget but uh why why is it
harder so cultural you're going to be
Instagram's going to push you to spend
more money got it y Envy is going to
push you to spend more money and to
pursue more money and to constantly move
the goalpost okay yeah is there anything
else or is it literally Master those two
things and you're golden the last point
I'd bring up and I don't know if I agree
with this 100% but I thought it was it
was profound when he said it there's a
Charlie Monker quote where he says when
teaching Financial skills to young
people they either get it instantly or
never at all
and I think what he's saying is like on
the nature nurture Spectrum some people
are just not wired to get it and some
people are are very naturally wired to
get it instantly I've often thought
before I heard Monger say that I've
often thought 10% of people don't need
any help with their money they naturally
understand it it just makes sense to
them compound interest makes sense it's
in it's intuition another 10% cannot be
helped they're compulsive gamblers no
matter what you tell them they're
they're always just going to be making
terrible financial decisions I think
that's that's roughly right so there's
always going to be a subset of the
population for whom no matter what you
tell them or what information you give
them it's it's never going to
click if that okay so the gambling thing
that wipes out 10% but that would mean
80% you have a shot and I don't buy it I
think that there is
a given that the answer is so simple in
fact let me make this about the body for
a second I can tell you exactly how to
get sixpack abs it won't work some of
the time it will work all of the time to
a person I don't care what disease you
have literally nothing it will work
every time if you let me control what
that person eats I will get them to now
they might have weak ass six-pack abs
because they're not doing sit-ups yeah
but you're going to get them this is a
question of how much body fat are you
storing and if I remove enough calories
from your diet people are going to hate
this but this is [ __ ] true if I
remove enough calories from your diet
you are going to lose fat that that is
just a fact of nature there is no way
around it there's nothing you can do to
stall it out if you let me completely
control your calories will control your
body fat it will be different for
different people but it will work 100%
of the time yeah and so the question
becomes then why is everybody fat yeah
and they are fat because they don't care
enough they have not built the
discipline and I hate that this one is
true they may not meet minimum
requirements intellectually that just
there is a sad reality to be faced that
there is a point at which you drop below
the requisite IQ and you're never going
to make it yeah uh they are a wash in
bad ideas which is where I focus I am
entirely obsessed with I think the vast
majority of people can make the change
but they they're going to have to get
rid of their bad ideas and supplant them
with effective ideas not even going to
pass moral judgment on I'm not even
going to call them good ideas I'm just
going to say there are ideas that work
there ideas that don't work and how do
you know whether you're pursuing an idea
that works or not you're getting the
result that you want or you're not
getting the result that you want now we
can go into a whole thing about if you
don't know what your goal is of course
you're going to fail which you mentioned
earlier and a huge huge swath of
humanity has no idea what their goal is
and so they are not going to be able to
get to it just because they've never
taken the time to articulate it but okay
all of this was a response to you saying
that there's this huge percentage in the
middle 80% that doesn't fall into either
of those two categories wants and needs
good advice yeah so I will say I still
think the vast majority of them are
going to fail and I think the vast
majority of them that want and need good
advice are probably not getting good
advice you can reboot your life your
health even your career anything you
want all you need is discipline I can
teach you the tactics that I learned
while growing a billion dooll business
that will allow you to see your goals
through whether you want better health
stronger relationships a more successful
career any of that is possible with the
mindset and business programs and impact
Theory University join the thousands of
students who have already accomplished
amazing things tap now for a free trial
and get started
today the huge majority of the financial
services industry by the way are by and
large good honest well-meaning people
the incentives of of the system are to
push people away from the best financial
behavior because if you are a stock
broker if you are a fund manager you're
not going to make a career you're not
going to make your money telling people
to buy index funds and go to the beach
you want them trading you want them
churning in and out that's how you as a
broker as a fund manager are going to
make your money okay and then so so much
of the industry is pushing people
towards the worst thing that they need
to do because the incentives to do it
are huge and in finance if you have a
business model where you're taking 1% as
your fee 1% on trillions of dollars
across the industry is a shitload of
money so the incentive to push people
towards doing things that they shouldn't
be doing is off the charts and that's a
huge part of this too I mean it might be
similar in health where it's like the
incentive of the food companies is to
make food that is good tastes good and
is addictive it's not to give you
healthy food they they couldn't care
less and I think by and large they're
good honest well people but the
incentives are to push you away from
what you should be doing I'm in a weird
mood today so I'm going to say okay look
as somebody who made my wealth in food
yeah trust me there are amazing people
out there and I am I have a lot of
respect for myself because I cost myself
hundreds of millions of dollars doing
the right thing that I knew was like oh
this isn't going to be as popular but
it's going to have the right Metabolic
Effect but I will say there are a lot of
people that are probably dirt bags I'm
not saying I met them I'm just saying
when you look at oh God in fact this is
from your book uh bag no no no you're
going to remember this in a second uh I
think this is really smart I summarized
it as um oh God circumstances make the
monster yeah but it's actually from the
Russian poet the Russian poet that you
quoted God I'm forgetting his name uh he
he has a crazy name yes but basically he
say you can turn anyone into a monster
in two weeks correct and he was he was
saying he was talking about it in terms
of people who went to the gulg and
people who were good honest Noble smart
wise caring calm peaceful people two
weeks in the gag and their monsters two
weeks of starvation isolation torture
whatever it would be and you're a
monster that'll do it and you and I
would do that too everybody would I
imagine becomes bad there's no question
but and in two weeks of starvation or
torture or whatever it might be
isolation at what point are you willing
to you know start attacking people for
your basic needs kind of thing that was
that was his point and because of that
we underestimate what Society is capable
of doing yes in a bad way because
everyone is calm and peaceful and by and
large well-meaning right now it takes
two weeks to turn that around yep yeah
that that is scary and I think very true
so going back to the the food industry
so given the perverted in perverted
incentives I have a feeling even though
they may be
like minus the bad incentives amazing
people the incentives get hard to
overcome yeah and this is why I think so
many people succumb so uh dear viewers
thank you for showing up because I care
obsessively about one thing I really
because I acknowledge the role of luck
in my life I am obsessed with trying to
give people the ideas that I feel
separate me from people that have not
had had my kind of success I got the
ideas at the right time I had the right
Constitution to get very frustrated with
the way that normal business was being
done and all of My Success was sort of a
accidentally timed Rebellion against
that that ended up being just absolutely
the right time for pure luck oh so I am
hellbent to give people the ideas that
are going to help them so you are Your
Own Worst Enemy you are going to create
all the problems in your life the reason
that you know the right thing to do in
both your body and in money because
we've told you them in this episode so
if you were hearing my voice now unless
you're skipping around randomly you know
what to do now maybe you don't believe
me I guess we'll set that aside for a
second but assuming that people do
Embrace those ideas I still think
they're going to fail and so I want to
dismantle what what happens
psychologically that leaves them to fail
now to do that though I need to ask you
first do you think they can be changed
or do you simply speak to the 10% that
fall into the they'll get it and do
something I think I'm speaking to the 50
to 80% who want and need good advice do
I think everyone can change no because I
feel like if I like my saying of spend
less than you make invest be patient I
almost to to rag on my own idea I almost
view that as saying if you get people to
stop fighting there'll be no more Wars
you're like yeah no kidding but it's not
going to happen and it's like it's a
it's a when you make it that simple it
highlights all that you need to do but
that's not pretend that that's going to
be easy and let's not pretend that
anybody that everybody can do it I think
that's that's where I fall down and to
the point of same as ever it's it's
always been like that bad financial
behavior has always existed and I think
it will always exist because of the
natural human emotions of envy and
wanting to one up your neighbor and
Rising expectations I think those have
all they're such an innate part of human
behavior and because those exist it's
never going to get to a point in society
where everybody is making good financial
decisions okay is is a room to improve
at a broad level I mean the fact that
Finance is almost ex not taught
whatsoever in schools is absurd you have
to take Tri you have to take
trigonometry but not basic personal
finance so so is there is there room to
improve the masses absolutely and even
at that level when the masses start
getting a lot of financial education
what has been most young people's uh
introduction to finance in the last
couple years it's Robin Hood which I'm
I'm sure that company too is run by good
and honest people but it's an it's an
app that's designed to get you to start
gambling not to invest for the long term
not to learn about businesses to buy the
stock that's going up between now and
lunchtime is what they want you to do
which every Financial study every
academic study would show that's the
single worst way that you can invest so
even when you have a new product that's
getting people into the game by and
large because of the incentives of the
game it's not pushing you to do the
right thing yeah agreed um here's
something that I say frequently that
really drives people crazy but I'm going
to say it anyway because um I speak to
the 2% of people that I know can and
will change yeah uh just to throw
another number out that I have
completely made up it it is while I
think the vast majority of people that
listen to the show are in the 2% I think
that the World At Large breaks into
roughly 98% if you're an adult got a
whole thesis on kids but if you're an
adult 98% of people are so stuck in the
frame of reference are never going to
make a change 2% will they're hyper
malleable and they're going to figure
this out okay uh the thing that I say
that people hate is that I like my house
to be chalk full of terrible food Oreos
ice cream cakes all of that whatever
because I don't eat based on what's
tasty and delicious I don't eat based on
what the industry is telling me I should
want I eat based on my goals so I don't
spend money based on what I'm excited
about or this that and the other I base
what I spend my money on on my goals now
I am a drunken sailor when it comes to
investing in my business so I want to be
very clear I recognize I'm playing a
very dangerous game in bus fair enough
all the critiques in the world I will
take them on uh but in terms of you I
advise people to have bright lines in
their life so the reason that I don't
eat bad food when I shouldn't is because
I have bright lines that I'll eat
anything I want on a Saturday yeah but
if today is a Tuesday and it is then I
know that I can't have Oreos and
cupcakes and cookie and whatever but do
you think you have an abnormal amount of
willpower that 99% of people don't in
that situation can I tell you a story
yeah yeah please okay uh when I leave
for college my
mother basically pushes me out the door
and I am weak and fragile and I'm like I
don't think I want to leave I want to
stay here go to the same school my
friends are going to play it safe and my
mom is like Over My Dead Body you said
you were going to go to USC you were
going to USC you were going to chase
your dreams and you're going to make
them all come true then I actually go to
USC and my mom spends every day after
that trying to get me to move back home
and so one day finally this was like
maybe 10 years ago I'm like Mom I have
to ask you pushed me out of the house if
you hadn't I would have just stayed at
home so why push me out if you're going
to work so hard just to try to get me
back without missing a beat Morgan she
says oh I just always assumed you were
going to fail and come home wow and I
was like whoa Now by this good thing she
didn't tell you that at 100% 100% my mom
was always my biggest cheerleader she's
amazing but I was like wowa she was so
nonchalant oh yeah I just assumed you
were going to fail wow now I asked my
best friend what did you think of me
when I was in high school he goes uh I
just assumed you were going to
marshmallow your way through life he was
like you were so lazy and then my now
father-in-law when I went to ask for his
Blessing to marry his daughter he said
no wow he was like bro I mean obviously
he didn't say bro but he was like I
don't think you're going to be able to
provide for my daughter and at the time
he was right now the thing I want people
to understand all of those people
accurately identified where I was in my
life at that time I was profoundly lazy
I did whatever came easily I ran from
anything that challenged me I I had a
fixed mindset so I was trying to put
myself in the rooms where I was the
smartest person and the second I hit
somebody smarter than me I would turn
and run in the opposite direction this
is why my obsession with the only belief
that matters I didn't think I could get
better and so my whole life was an echo
of I don't think I can get better so I'm
just trying to position myself to look
cool now in the moment I'm not willing
to put my head down for 10 years and get
good at something and outperform people
so everybody that was like oh bro this
guy is headed for a disaster had
accurately identified where I was at
that moment in my life yeah now what
they underestimated was the power of
Shame and my desire to impress my wife
enough to sleep with her that's so and
so then my wife also was very good
people are not going to like this word
with with love in her heart and all the
best intentions and it worked out great
I couldn't be more grateful but she was
very good at manipulating me so it was
like when she saw me being lazy cuz she
thought the way she was going to affect
the world was not directly herself it
was going to be through me okay we we
came of age in a different time boys and
girls so my wife who is now an
entrepreneur always thought she was
going to be a mother and that was going
to be her whole thing so she just
thought a subconsciously she probably
wasn't even thinking about it but I'll
manipulate him she didn't use that word
but I'll influence and he'll go do the
magical things that I know he will
become capable of doing yeah and I ended
up by reading things like Napoleon Hill
on and on and on I ended up cobbling
together this mindset that allowed me to
be successful so I don't want people to
Discount me and say oh he's exceptional
I could never do what he did because
he's different I'm built differently now
but I wasn't at the time and so any
anybody that writes off my story you
writing off my story puts you in the 98%
because you're looking for reasons to
stay where you're at instead of finding
reasons to be like oh word I'm going to
do that how can I do there this is not
your point but I'm curious when I hear
that story how much of the rejection
from your father-in-law or and those
kind of stories motivated you to get
better and it was it was what you needed
to get off the couch here here is the
honest answer so earlier you said that
one of the things that successful people
have is just this unrelenting belief in
themselves but I also think that they
have an absolute Terror inside that
they're not good enough to be successful
abely it is this weird dichotomy that
was first crystalized by Alex horos
thank you Alex shout out uh it's crazy
and it is so true of me I've always had
an insane belief that I was going to get
rich now that makes sense now because
people know the punchline of my life but
dude when I was a kid nobody I knew his
wealthy met a wealthy person nothing my
whole family used to make fun of me
literally they would mock me because I'm
I'm going to be rich one day they were
like get out of here so that is when I
go to my father-in-law I am broke I have
this Vision in fact when I went to
propose I don't even think I had a job
so he's like oh God you're living with
in my ex-wife's house you're you've
gotten my daughter to fall for you which
is already horrifying on a 100 levels
and he had taken himself from a tiny
village not a town a village in the
island of Cypress which I never even
heard of until I met my wife uh he taken
himself from that to running one of the
largest shipping companies in the world
crazy Journey so this guy's looking at
me like oh my God like this kid is going
nowhere fast I also don't blame him for
thinking that it's easy to poke fun at
him but just knowing what I know now
it's like I get why he would have said
that for sure yeah so at that time I'm
laying in bed in the morning for 4 to 5
hours I only get out of bed because my
girlfriend who's working to support us
both to live in her mom's house P.S uh
she would come home at lunch and her one
request that since I wasn't working that
I make her a sandwich and I would get up
in my pajamas and finally get out of bed
after 4ish hours and I would make her
that sandwich oftentimes like slap Dash
together because she was like walking in
the door
and I was a wash and shame yeah and I
was like I told told her I'm going to
make her rich I told her father because
I ended up proposing even though he said
no yeah and I was like sir I hear you I
respect that but I do want to tell you
I'm going to propose to your daughter so
she says yes and now I'm like whoa I'm
really ashamed of myself yeah and I need
to make a change but if I hadn't ever
gotten ashamed if I had never met
somebody and made big promises and then
knew I wasn't living up to them I
wouldn't have done it and because it
ends up up taking me unfortunately the
story of my life is not oh my God the
next thing I do I get rich it's like
almost 15 years of oh God we're so poor
my wife is clipping coupons we only have
one car I'm bumming rides off my
employees like it was crazy yeah uh so
through all of that it
was am I ever going to make it and I
can't let my father-in-law be right now
I want to be very clear nobody was ever
kinder to me he was once he realized
this is happening whether I want it to
or not he was warm emotionally available
just a generous generous human being and
I'm so grateful yeah um and I did
apologize to him because he he gave me
probably the best business advice I've
ever received but I rejected it at the
time because I still had a fixed mindset
y uh so anyway yes without getting
slapped around in that way and being
completely ashamed of myself I never
would have done it I I I have a friend
Patrick oasy who says if you had to
describe in one word the mindset of the
most successful entrepreneurs the word
that he would use is tortured is then
they wake up every morning and they're
like they're terrified they have this
big goal that they need to meet they
have this audacious thing they're trying
to accomplish and they're not there yet
so you would think it's not driven it's
not passionate it's tortured every day
they wake up tortured and I think a lot
of people in their life will get to that
Rock Bottom moment and that's that's
what they need the opposite of this the
polar opposite of that are the spoiled
kids who grow up with everything and
they can wake up comfortable and under a
warm blanket every single day and that's
the shirt sleeves to shirt sleeves in
three generations kind of idea like
explain what that means you have someone
who starts with nothing and they're
tortured they're terrified they're going
to be left behind a shirt they can they
can't they can't do it they're in shirt
sleeves because they're a bluec collar
worker right they're terrified they make
a lot of money and then they have one
generation who maybe like kind of can
follow it up a little bit kind of keep
the family together a little bit the
grandchildren who are just the
grandchildren of very rich people are
the ones who develop a cohabit at 17 and
never accomplish anything and blew all
the money and so there's a lot of
families like this you and I were
talking earlier about the Vanderbilts
which to me is one of the most
interesting examples of the mega Rich
families because they had more money
adjusted for inflation they had almost
half a trillion dollars back in the
1800s and in three or four generations
it was all gone and the three or four
generations that inherited all the money
and they were all getting hundreds of
billions of dollars during this period
And even if you were a cousin you were
getting the equivalent of five or 10
billion dollars during this period
they're all miserable they were all
miserable and I think a lot of the
reason was none of them accomplished
anything other than being born in the
right name they were not entrepreneurs
themselves they didn't build anything
themselves they didn't accomplish
anything themselves other than spending
their ancestors money and they're all
miserable for it and you need someone
who's like who can wake up terrified of
their position in the world and that's
going going to give them the drive to
actually go out and build something
themselves and you and I were talking
earlier the first Vanderbilt Heir who
did not get any money is Anderson Cooper
from CNN and his mother was Gloria
Vanderbilt she's the last one who got a
trust fund Anderson got nothing and he
talks about that that's probably why
he's so successful and he's probably the
happiest Vanderbilt Heir in 200 years
because he was the first person who had
to do it himself who he knew when he
woke up when he was 18 or 20 years old
he said I have to make a name for myself
the fact that his last name is Cooper
and it's not Vanderbilt means that he
like he had nothing going for him no
trust fund no name I'm sure he had
connections and doors are open to him
but I think that's a telling thing too
like that's what drives people it's not
having endless resources it's the
opposite it's waking up
terrified and a lot of entrepreneurs who
keep it going are like this too there's
this great interview with Mike meritz
who is the founder of seoa which is the
most successful Venture Capital firm
that's ever existed and not only are
they successful but they've been
successful for 4 40 years which is a
very long time in VC so he's doing this
interview with Charlie Rose and Charlie
Rose says what's your secret to being
this good for 40 years and Mike Merit
says we've always been scared of going
out of business and this is a guy who is
like an order of magnitude more
successful than anybody else if there's
anyone who has the right to brag and say
the reason I'm successful is because I'm
so smart it's Mike meritz but he doesn't
he says I'm terrified of going out of
business and he said we never assume
that what we've accomplished in the past
is going to transfer to to tomorrow so
he's still waking up scared terrified
tortured maybe and that's why he can
keep his success going for such a long
period of time and there's such a long
history of people using their paranoia
and insecurity to become successful and
then as soon as they become successful
they allow themselves to take a break
because they're like I made it I met the
goal I'm at the mountain toop I don't
need to be scared anymore I was SC like
the reason I was working so hard is so I
didn't have to be scared anymore so then
as soon as that fear goes away and they
become comfortable with their succcess
it's all over and what made them
successful is gone and then it starts to
unwind so many companies are like this
Sears GM JC Penney the reason that they
failed is because they got so successful
they just got fat happy and lazy and you
see that with individuals too and when
you see someone like Mike Moritz who
pushes back against that wildly
successful the guy is a Deca billionaire
and he's terrified of going out of
business that is such a rare and unique
mindset yes it goes back to you need
emotions to make a decision but you
really have to distrust your emotions
yeah and I find that people it's ironic
because most people are just absolutely
devoid of self-esteem and all that but
somehow still manage to once they get an
idea in their head they they trust that
emotion not an idea in fact as I was
saying those words I was like something
doesn't feel right they trust their
emotions and they don't have a clear
idea a and so this comes back to okay to
me so I really want to I if if you and I
disagree I want to debate this until the
end of time uh I think that the reason
that most people won't be successful is
they cannot control their emotions yeah
yeah and what's going to end up
happening is they don't have a clear
thesis on what they're investing against
they're going to in the Euphoria when
it's a bull market and everything's
going great they're going to be like
this is going to last forever and
they're going to invest accordingly and
so they will buy at the top and then
they're going to panic as the number
drops because of the emotion they'll
forget that they didn't have a thesis in
the first place they're just buying
based on emotion effectively gambling
and as it comes down they're going to
sell at the bottom and so what becomes
the simplest and best advice in the
world Buy Low sell high they do the
exact inverse high and sell low right
but it's easier said than done for a
very explainable reason your aot tions
will convince you that dots connect that
don't connect and so and this is
something remember everything I say I'm
saying to myself man I get it I'm I
distrust myself more than anybody so
what I've seen happen to myself and to
other people is that the emotions make
it feel like you have a
thesis you're oh my God like this bull
run no no no this is amazing so I went
through I I didn't know what Euphoria in
the market was until crypto so I sort of
build for 20 years get wealthy pick my
head up and realize oh investing never
really thought much about it don't know
anything about it let me go see what's
up uh more I start learning about money
the more I get into what's going on in
crypto and I see the way that people are
but I don't know that it's called
Euphoria and so I have bright lines I go
in with a thesis I know not to trust
myself I know not to trust my emotions
there's only so much Capital I'm going
to deploy and when I hit that number I'm
going to stop and everybody was like hey
no keep going bye bye bye and I'm like
nope I am deployed yeah and so it is
what and I dollar cost averaged now the
one thing if I were going to do it again
I would elongate my dollar cost
averaging time span so that you know I'm
buying it over let's say 10 years
instead of two but
nonetheless uh had a number once I hit
the number cool we're done and also I
was like as long as my thesis remains
intact then I'm not going to sell no
matter what happens to the price and
because I only invested what I could
afford to lose which would be my
Layman's tip number one I drive by
what's going to let me sleep through the
night that would be my Layman's advice
number two Y and then um I just keep
going with my bright lines this is how
much I was willing to put in if I hit
that number yes leave okay uh I plan to
hold for like basically put your head
down for 10 years don't even look at it
don't think about it has it been 10
years no then don't sell and so we'll
see if like and same thing I do in the
stock market so we'll see if any of this
strategy works out but that to me at
least is I have a thesis that is
unemotional I have it documented so that
I can figure out am I adhering to my
thesis or not y uh bright lines do this
yes totally based on emotion or do this
no again based on no emotion
um what's wrong with that strategy if
anything nothing but when I tie all this
together when I hear about your diet and
your entrepreneurship and how you invest
it seems like you have an abnormal
almost a freakish amount of self-control
yes now the question becomes was I born
with it or did I develop it yeah no I
think I think if you ask me I think of
the nature of nurture Spectrum I'm I'm
making this number up I would think it's
80% nature yeah yeah I'm I'm pulling
that number out of thin air but I think
I think that's probably right and I
think you see this in a lot of things
one of the things that's so interesting
about OIC the new drug and I I'm not a
doctor I don't know anything about it
but the idea that it can also has in in
the early studies that have not been
fully confirmed yet that people who are
taking it for weight loss also are able
to kick their smoking habit their
alcohol their alcoholism their gambling
habit and from what I understand it's
manipulating a hormone in your pancreas
that's doing this that is influencing
all kinds of things that's how it gets
you to stop eating so much if you piece
all that together if that Layman's
description is accurate of what I just
said are the reason that people are
alcoholics and gambling addicts is
because they have an abnormal amount of
a hormone in their pancreas that you and
I don't and like if if to the extent
that that's the case then yes I think
self-control can be some on the nature
of jure spectrum can leave lean heavily
towards nature it's not to say that you
can't learn to be better or learn the
consequences of your actions or set up a
system that's going to help you be a
little bit more patient but I think
without a doubt there are people who are
born with more or less
self-control that is we're in violent
agreement on that the thing that we're
in disagreement on is science seems to
show that you're 50% hardwired and 50%
malleable yeah and I'm certainly willing
to say that cool I got a good hand on
malleability is the one thing I think oo
I'm a I am a hyper responder so not
discipline it's my ability to change
that I think is unusual yeah most are
very stubborn then it becomes okay if
did I put in the time and energy to
actually change so my thing though is if
all of us are 50/50 then I would
encourage people because I'm going to
guess that everybody listening to this
could put they have not reached the max
of their 50% malleability yet I don't
almost certainly none of us ever will
unless you're doing something like uh a
sport which requires physical exertion
your body will break down over time
there's no 80-year-old in the NBA for a
reason right um so I do fully
acknowledge that there are limitations
uh but I I don't think most people get
to them certainly not with an
intellectual game I think most people
lose there's two things that I kill I
think kill success
boredom and um emotional weakness like
you you feel badly about yourself and so
you want to stop playing the game those
are the two things that I think end up
ruining most people so since I don't
think most people have hit their cap I
will just say okay cool let's assume
that Tom's 50% that's hardwired is
better than your 50% fair enough but
when I look at Elon Musk I think it's
pretty clear that his 50% of being able
to solve problems or whatever his
engineering mind I don't know what
whatever it is yeah the the idea of
trying to run seven companies I couldn't
do it so Bonkers I can whine about that
or I can do the best with my limitations
that I possibly can do do you think
there are areas in your life where you
have very little
self-control we've talked about the ones
where you do is there anything where
it's like you can't you you can't
control that I don't know this is what
you mean but this is the one thing that
has really resisted my strongest efforts
and that is
anxiety now the biggest influence on my
anxiety was diet so I was able to go
from generalized anxiety of a constant
sense of impending doom to okay now if
I'm doing something high stakes and I'll
still get anxious and I have to go way
out of my way to manage my psychology
yeah um and that does feel like
sometimes I want to craw inside my brain
and find is it my amydala what the [ __ ]
is it but something is really pissing me
off because I don't feel like I should
have to work this hard to um maintain
that sense of strength and confidence
and I think people look at me and think
oh well it's easy for him and I'm like
Jesus man like very from my perspective
other than verbal ability which that I
will say I've always oh any energy I put
into that I get a disproportionate
return other than that like with the
possible exception of
malleability I feel like I'm what they
EMB bodybuild and call a hard Gainer
yeah ev Everything I Do takes an
inordinate amount of time and energy and
I just outwork people there's a new book
by Robert spolski who's a very famous
psychologist get him on the show and
this I think that the thesis of his book
is very controversial so I'm not saying
that this is this is the truth his new
book is that people don't have free will
yeah after studying people for 40 or 50
years he's just saying the things that
you do the things that you believe you
don't have any control of they've been a
consequence of what you've experienced
in life and the DNA in which you were
born with that makes you believe you do
and I I have not read the book so I
don't want to I don't want to cast too
much judgment on it but there's part of
me that wants to think like that's it's
got to be it has to be 50% true I would
say it's probably 80% true something
like that don't we both agree it's 100%
true I don't know without reading the
book but the idea do you think we have
free will
ah it depends how we're how we're
defining it like the ability to uh
respond in any direction you want with
total disregard for your biology and
history I mean I guess we're framing it
like that probably not I mean I would
frame as there's probably things that I
would want to do tonight that I know I
should not do and therefore I'm not
going to do I'm sure doing heroin is a
lot of fun I'm not going to do it
tonight because I know it's the wrong
thing to do so is that free will no that
would be free won okay is actually a
thing oh no yeah that makes sense so
maybe we can get behind free won so this
is very interesting and I will say this
the odds that we have free will to me
seem like 0% yeah but you have to act as
if you do so every word out of my mouth
is as if I believe in free will because
there's no other way to go through life
you have to act like that yeah uh
otherwise what are you doing um but I
can't fathom that you do but what I'm
saying is despite the fact that I don't
have free will malleability is still a
thing and you you you are lucky enough
to now have encountered that idea now
get after it right
so I think anybody that resigns
themselves to Free Will is an illusion
in practice becomes an nihilist and I
would very much recommend against that
so does Robert sapolsky's idea push back
against the idea of here's the formula
you should do why aren't people doing
this absolutely not it so this is this
is one of
those if we truly are just Cosmic
billiard balls yeah does it really
matter and my answer is no because the
only thing it means is that we're all
going through the motions that the
percentages of people that can and
cannot change are predetermined but the
only way for these billiard balls to
play out is for you to respond to the
things that you were met with yeah and
resigning yourself to uh I'm a billiard
ball I can't do anything I'm never going
to be able to make change does not make
sense yeah to me now maybe that I'm just
playing my role as the billiard ball
fair enough but whether this is
pre-ordained or not it doesn't feel
pre-ordained it feels like I can at a
minimum not do anything I don't want to
do yeah so in fact let's hey let's talk
about the goog archipelago so we were
talking about the Googs earlier in that
book Alexander soja niton says every
body breaks under torture actually
that's not true there are some women
that will let themselves be tortured to
death and I was like word there there
are people who you cannot even viciously
break their bones whatever they're fine
kill me do whatever you want I will
never tell you whatever it is that you
want to know so you can go pick up my
kids or whatever yeah okay word then we
have free
want I've never heard free want but
that's good I like it strong important
concept I would encourage people I'm I
really want to get spolski on the show
yeah uh he's a fascinating guy dude so
interesting I've been following him for
years even I I can't fathom I will read
that book and be like no free will
exists long ago I was like oh Free Will
is clearly an illusion but it has no
impact on how anybody should move
through the world yeah that's good I
like it that's a good
distinction okay so if we accept that
even if Free Will is an illusion you
cannot act like that and you're now
being confronted with ideas that are
going to be consequential in your life
because so far hopefully what we've
established is you're the problem your
emotions are the reason you're the
problem and the way around this is to
have a set of ideas that you turn into
bright lines and you adhere to those
bright lines because you can't trust
your emotions the only way to adhere to
these bright lines is to not have your
entire um ability to live financially
tied up in any investment you're G to
need to have enough cash that you can I
would encourage people to have a year
six months to me is the absolute minimum
agree yeah so how do people get to that
because the first push back is going to
be yeah dude I don't make the kind of
money you make right so there's no way
for me to save up a year that's crazy
when was the first time that you started
making a little bit of money I can tell
my story about how I did it and there's
a lot of luck that's involved in it yeah
yeah I mean so I was a valet all
throughout college and for someone who
was 19 20 years old valet is one of the
best jobs that you can possibly have I
was making I was probably making 50
Grand a year as a 19-year-old when
you're 19 50 Grand you feel like you're
Bill Gates yeah not bad it's and it's
such a fun 2000 this was in the mid
2000s uh here in Los Angeles and uh and
it was such a fun job you're outside
with your buddies driving Lamborghinis
like it was it was the coolest job that
exists so that was some degree I
stumbled halfhazard into that all my
other friends were like servers at
Denny's kind of thing like working like
working at the grocery store or
something like that it was Serendipity
that I fell into that my parents you
know were paying for the majority of my
education bought me my first car we're
paying my health insurance we're paying
my auto insurance that allowed me to
save a ton of money just from that alone
and so there's things that were outside
of my control or things that were at
least halfhazard that I did not
strategically plan just kind of and a
door that I just accidentally opened
like oh valet is a cool job and I can
make four times as much money as I do
all my other peers that I didn't really
do if I'm honest about it it was not a
strategy it was just a dumb luck kind of
thing that I fell into but and then I
mixed that with I think I always had the
money mind it didn't need to be
explained to me I understood that I
should save half my money and invest it
and it was going to compound no one I
was I was interested in it I used to go
to the bookstore and read books about
investing all the time because I thought
it was fascinating it was never pushed
on me but it also just like instantly
made sense and so by the time I was in
my early 20s I'd saved up a good chunk
of money that was pretty abnormal for
someone of that age but if I look back
at it it was a combination of things
outside of my control and I think a
natural passion that was on the nature
side of the spectrum of how I stumbled
into it so like when I look at it like
how what is the advice that I can give
to other people from my experience early
on and sometimes I struggle like what's
the specific thing of like I did X Y and
Z and if you do that you can have the
same result
I just I just don't know if that's
really the case even even something so
simple as I was a valet in Los Angeles
in the mid 2000s when money was just
overflowing through the Canyons in here
it was the peak subprime bubble everyone
was a gazillionaire everyone it was a
very materialistic time in a very
materialistic City it was just so much
money and I know from talking to my
friends who still work there it's not
like it used to be so even the timing in
which I was there that was obviously out
of my control played a huge impact on on
that so that's what if I'm honest with
myself and I try to be humble about
looking back it's like look I made some
good decisions but I don't know if it's
fully replicable for other people or
even for myself I don't even know if if
I could replicate it here's what I tell
people about my success I I can tell you
exactly what we did down to the on day
32 turn the screw you know 3/4s to the
left uh it won't work for you and the
reason it won't work is everything is
about what you do and timing and if you
miss the timing you've got a problem so
all the things that we did at quest to
really blow that up uh they won't
replicate it was about recognizing
social media before anybody else it was
about building a product that didn't
have sugar right at the moment where
social media allowed people to share the
message that sugar was the problem I
didn't know that was going to happen uh
I didn't even do social media because I
thought that I was a genius I did social
media because I thought it was a way to
build an audience of people uh that I
could connect with emotionally because I
was tired of being a what what I called
a slick marketer like I don't want to be
a slick marketer I want to build I
didn't say community but that's the word
we'd use now I didn't say authentic but
that's the word that's the word we would
use now but those were all the ideas
like I want to go be who I really am
that's what I used to say I want to be
who I really am and I want to build an
audience of people that like feel the
same as I do I have a deep passion for
storytelling and there's this new thing
it wasn't called social media but
there's this new thing we can create our
own content wasn't called content you
get the idea and so like now if it's
like dude those are table stick
were rocket ship to the moon so you're
not going to get the timing right but
there really are principles and let me
see if you hate what I'm about to say
beat me to death with a verbal Club okay
let's do it so I had 3,000 employees at
the height a thousand of them grew up
hard in the inner cities okay I saw that
[ __ ] up close and
I cannot tell you that for the people
and this is where I got the 2% for the
2% that did something with the ideas
because I created what I called quest
University so I would come in early I
would stay late I would teach you
anything you want to know about
entrepreneurship which is really just
the ability to Think Through problems to
improve Etc and a bunch of people came
2% did something with the idea but the
2% that did something with the ideas
they continue to text me call me and say
oh my God you turn my life around you
have no idea some of them started their
own businesses some of just became like
plant managers and work their way up a
very traditional way all of them
following effectively the Flaming Hot
Cheetos model which I did not know at
the time but that guy started as a
janitor and people used to clown on him
because it was like dude why do you like
do your job to that degree like you
don't need to polish things that well
it's stupid and he was like no this has
my name on it I'm going to do this
extraordinarily well yeah now if you do
that if Everything You Touch you make
better you're going to move up in the
world it will be the rare person that
says no matter what job you give me I'm
going to excel I'm going to be the
greatest janitor whatever valet of all
time you unless you're working for a
sociopath in which case leave and go do
that thing for somebody that will at
least recognize selfishly the people
they want to promote dude there I have I
mean it's the 8020 principle here at
impact
Theory I love each and every one of them
but 20% of them are the hardest core
[ __ ] I've ever met and these
guys will kill themselves they are smart
they are hardworking they work long
hours rad they're going to get promoted
obviously because they have such a
material impact on my business if you
can make somebody else more money you
are always going to be able to move for
sure so get good at something this is
where I get crazy with people who are
like I was born at the wrong time born
in the wrong family dude I'm poor this
is never going to work for me not with
that attitude and look I get it I grew
up in a lower middle class income which
I used to think I grew up poor and then
I saw poverty and I had a huge leg up
got it understood my father-in-law grew
up in a village people wouldn't believe
me if I described what his youth was
like he ate meat once a year not because
they were vegetarian because you had one
animal you could [ __ ] kill and that
was it and I was like did I hear that
right anyway I've seen poverty up close
yeah people can't escape it it's hard as
hell yeah you have to meet minimum
requirements I am very sad that anybody
starts that far from the Finish Line
because just to get to or sorry the
starting line just to get to the
starting line they have to work 10 times
harder but please Jesus because I love
and care about you anybody listening to
this that is in that situation you
really can do it it's going to be hard
again I don't wish it on anybody but
godamn if people resign themselves to
saying H I can't do anything then the
only belief that matters they won't do
it they won't take the first
steps is it thank you for sharing that
story is it mutually exclusive to say
that 100% if they don't have the mindset
they're not going to have a chance but
statistically if you're born into
certain socio economic groups the odds
of you getting out are less than 10% so
statistically more than 90% will not be
able to do it is it really close to 10%
I you're it's it's probably less I was I
was making that number up but it's it's
less than 10% the inner cities destroy
virtually everyone that they touch yes
now the question so this is when and I I
think we I think this might be a little
bit of of semantics I think we 90% agree
here but it's hard for me to think of a
formula that you can give to somebody in
which 90% of 99% of them are still not
going to get out like then at at that
point do you question whether the
formula works and I think I I think we
both agree that the mindset that you can
get out is table Stakes for getting out
is absolutely 100% necessary but it's
not guaranteed to get you out because
the odds are so heavily sticked against
you is that right oh yes I think I think
that's I think that's where I sometimes
get tripped up and I I don't think we
disagree but it's just even if you have
the right
mindset it's not a formula in the sense
that 2 plus 2 equal 4 is a Formula it's
very precise that's where we disagree so
we'll zoom in on that if you have the
right mindset and you have the
intellectual horsepower unfortunately
that's a real thing but see see that
qualification right
there there's nothing dude the Army
won't let you the Army they're going to
let you get shot the Army won't take you
if you have less than an 83 IQ 83 or 84
yeah so unfortunately there is a reality
to be faced there and I cave out that
only so people know this is not a
problem that I've taken a cursory glance
at like I've dedicated my life to this
answer yeah so seeing it up close I at
first thought 100% of the people that
you show the ideas to will change I was
a fool and yeah I think I think that's
that's the idea that I'm trying to
articulate the numbers 2% so for
obviously I'm making that number up but
it is so disheartening Leo that I here's
my punchline and Lord knows I hope I'm
wrong I gave up on adults I realized I
went to Lisa and I said I'm pouring my
guts out so there there was a Breaking
Point oh I hate this story that this is
true one of the 2% at Quest um I hope
one day I can tell his story it it is
one of the most extraordinary human
stories ever but unfortunately it ends
with an early death due to just [ __ ]
random
tragedy uh
but this guy got punched in the face by
his good friend because you're ready he
started reading books and his friend
said you've changed and when he was like
what are you talking about he's like you
read and then he punched him
okay crabs in a bucket yeah just trying
to pull each other down that's the
craziest [ __ ] ever and this was years
into me doing Quest University and
watching these guys like slowly climb
their way up and build a mindset and uh
and that that broke me in some way
because in in our circles I think one of
the coolest things that you can do and
most like gaining respect is to be a big
reader and have all kinds of knowledge
and wisdom and when you contrast that
with that story that you just told it's
a it's a tough thing to swallow yeah and
how would I respond if that was my
Social Circle in which I was born
into I would I would see I would not be
here today if that was Social Circle I
was I would I'm too weak I would have
been eaten I would have been eaten alive
absolutely yeah I think I'm I'm much
more socially fragile than that now
though what do we do because I will not
accept defeat so my thing is I started
impact
Theory and decided it had to be aimed at
kids I always thought it was going to
make entertainment for adults and then I
mean obviously this show was for adults
I understand that this is my 2% thing
long story my audience probably heard me
explain it a thousand times but I spend
70% of my time focused on entertainment
for kids because the brain from 11 to 15
is hyper malleable yeah yeah post that I
I'm not good enough I hope there's
somebody out there that is so good
putting the ideas together that they can
do it I'm just not that this quote from
Kevin Kelly that I read recently and I I
don't think this is actually a statistic
he's just making it up but it's a great
quote he says if you start smoking
before age 25 you will never quit
interesting and if you don't smoke at
age 25 you will never start and I I
don't think that's actually a statistic
but I think that idea of just past a
certain age once your pre frontal cortex
is fully formed it's very like that
plasticity in your brain really goes
away you see this with kids learning a
new language my parents both worked in
the ER and they would talk about there
would be sometimes a Hispanic family
would come in and the 5-year-old child
is translating for his parents that's
cuz a 5-year-old picked up English in a
year but the parents who've been here
for 20 years couldn't not for lack of
will just because it's much much harder
to learn new language after puberty God
now we have to be honest it is a lack of
will it is a lack of will here it would
be way harder for them by by a factor of
100 I get that but uh it this is so so
could the parents learn yes but it's
probably a factor of a 100 the other
Amazing Story I have about language is I
have a good friend who Moved with his
family when I think he was 11 and his
brother was 15 from Russia to the United
States I already know where this is
going my friend has no accent whatsoever
speaks English like you and I his
brother who moved here at 15 you can
barely understand them I hate that so
much and the the demarcation line for
all this is puberty once you've hit
puberty all that stuff becomes
exponentially harder to change the
wiring in your brain does that not
enrage you it's astounding to me that it
was a four-year difference and these are
people who came from the same family
with the same parents exposed to the
same English at the same time but four
years apart and they ended up 30 miles
apart in terms of how they speak and you
see this a lot too of like you'll meet
someone who moved to America when
they're 10 and you would never know it
they they seem as Gringo as you and I
and then you can meet someone who's
lived in America for 50 years or look at
someone like Henry Kissinger who's I
think lived in America for 70 years or
whatever it is and he still has the
thickest German accent you can hardly
understand what he's saying and so yeah
all that gets to your point of like your
brain stops accepting new ideas Monger
says your brain is like the egg where
it's like once the egg is accepted one
sperm it shuts down no more sperm are
allowed in and he says that's what your
brain is too once you've accepted an
idea it's like ingrained in there and
there's a natural tendency to be like
nope no more I don't have room for any
more ideas I got this idea and of course
you can fight back against it's not
black and white it just becomes much
harder as you
age you have something in your book that
I'm just really going to drag us into
the depths of hell and then we are going
to climb back out because I have
I have a strong conviction that that
some people can change and it's it even
though I say that I've given up on
adults obviously I still do the show in
your book you talk about I can't
remember which one now but you talk
about Pavlov yeah and his dogs now I
didn't know about the flood yeah tell me
more so Pavlov's dogs is are very well
known for they would Drool on command
and what he did is he taught the dogs
that when I ring the bell food is coming
and when a dog knows food is coming they
drool so what Pavlov this psychologist
got his dogs to do is whenever I ring
the bell the dog starts drooling and he
could command the dog to drool it's this
neat little study and a part of the
study that was really left out was that
uh this was in Leningrad Russia there
was this massive massive flood and a lot
of Pavlov's dogs were wrapped up in the
flood and the water came all the way up
to the cages he had to put the dogs on
top of the cages and like push him
across the river they went through this
incredible trauma and Pavlov wrote about
after the trauma and the ridiculous
stress that the dogs have been through
they lost some of that learned behavior
that had been so ingrained in them like
deep stress rewires your brain deep
stress leaves a scar on you and I wrote
this in the book as an example like
people who have been through the Great
Depression World War II the Holocaust
name like the deep deep scars that will
rewire your brain and you are not the
same person coming out of that and one
of the things I think is so interesting
at the end of World War II is that we
really did not understand PTSD at all it
was not we didn't understand much about
it and there were so many veterans who
came home from World War II and became
raging alcoholics or very depressed or
just completely different person because
the war fundamentally re rewired their
brain they were Pavlov's dogs that once
you experience that something that is
ingrained in you before you experience
it is gone it's at it's out of you so
that's another thing that I think about
of like I have my own values and views
of the world today but I went through
something utterly traumatic like that
would it against my will against my my
wanting it to happen would I just be a
fundamentally different person would I
turn violent would I turn angry would I
turn depressed whatever it would be and
this gets back to I think I'm almost 40
years old and I think I understand this
thing between my head I understand who I
am and how I think but any of us could
go through an experience whether it's
losing a loved one or going through even
just a bad recession that rewires Who
You
Are and scary to think about yeah that's
why I said I'm going to take us into the
depths of hell here because well I mean
that that to me is about as traumatic as
it gets so uh Free Will is an
illusion uh once your brain accepts that
initial set of ideas I won't say it's a
single idea but what I call frame of
reference so to me frame of reference is
the sperm and once you have a frame of
reference you don't even realize it you
don't realize that the Egg of your brain
has been fertilized and that's it that's
it and most people are never able to uh
let's stretch the metaphor rill that
soil uh so that it can you know take a
new crop uh as it were just to really be
all over the place um it's terrifying
and the only thing that makes it worse
is that in evitably you will go through
something traumatic and that will make
it worse and it will further break you
and you will be further in a hole and
this is why a grown man can punch one of
his best friends in the face because he
started reading and he doesn't
understand that it's a rejection of the
new and that you're making me feel
judged and inferior he has no sense of
that he just feels like his friend
deserves to be punched in the face he
trusts his emotion and he throws the
punch yeah and that's why most people
will die broke now I think if there is a
positive spin on it and maybe this is
you pulling us out of the depths of hell
it's that the trauma is going to change
you it could change you in a positive
way it could I mean I think for a lot of
people hitting rock bottom is exactly
what they need and if they have a job
loss it's or they their relationship
falls apart in the moment it seems like
the worst thing that could ever happen
to them but in hindsight a year or 10
years later they realized there was no
better event in their life it's exactly
what they needed at that moment and the
stress from that fundamentally changed
them maybe in a good way maybe it was an
entrepreneur who was way too cocky and
then lost everything and then the
experience of that made for their next
venture they're going to make new
mistakes but not they're not going to
make that mistake so maybe that's the
positive spin on like Pavlov's dogs
stopped drooling okay maybe that wasn't
that bad of an idea I think there are
people who came out of the Great
Depression let's say better for it they
had learned a very valuable lesson that
was the right lesson to learn and they
were smarter for it now there's a lot of
people who became utterly traumatized
from in a negative way but I do think
there are some people who take those
terrible events with some stride and I
think dealing with Co for example
regardless of what your views on Co were
every single person understands viral
illness better than than they did in
2019 regardless of you think what you
think should have happened or did happen
um we we all understand it in a more
fundamental way than we did in 2019 so
as traumatic as it was for virtually
everybody we're all smarter now because
of it and we all understand something
that we did not in 2019 and that that's
a positive spin on the trauma that we
that we went through there's an awesome
Einstein quote and he said the most
important decision anybody will ever
make is whether they live in a friendly
or a hostile universe
what I love about that quote decision is
that he says decision and so was Co good
or bad it's a decision there is nothing
good or bad but thinking makes it so so
says Shakespeare and I think that's
right and I think that's the the thing
that will pull us out of the depths of
hell is that the depths of hell is
simply a frame of reference and if my
frame of reference is that free will is
an illusion and therefore I am powerless
to do anything and so I might as well
just sit around then I'm screwed but if
I instead go all right well if I'm just
a billiard ball let me take the most
optimistic joyfill response that I can
have to this that I can even think of
and just say that's my role as the
billiard ball is to live the most loving
joyful fulfilled life humanly possible
and how do I know because I have that
impulse cool then do that and be that
billar ball but if you decide that
things are bad they're going to be bad
if you decide that you can get better
even though let's say it's way harder
for you fair like Finance does not come
easily to me brutally difficult and yet
I've managed to uh make part of my
business that I have gotten tens of
millions more views on my in fact way
more tens and tens of millions of views
on my uh finance-based content yeah
so maybe part of what and I mean this is
a story that I tell myself to have an
empowering frame of reference is that
because it's harder for me I'm able to
make it accessible to other people
because if I can understand it anybody
can understand it so I'm certainly not
making it high flutin and complicated I
keep trying to drag us back into that
hyper simplistic deal with your emotions
do these three things like uh because I
think that's what actually works but it
really is me deciding that that's the
frame of reference I'm going to take
there's a really good book that I like
it's a very popular book I think Oprah
blew it up blew it off the charts it's
called the choice and it's about this
Holocaust Survivor who was in ashz she
survived her family did not survive she
survived and when she came back and
obviously just a PTSD in an order of
magnitude that I don't think you and I
could could comprehend and when she came
back she eventually moved to America and
she became a psychologist to help other
people with PhD with with PTSD and the
book is called the choice because it was
a choice she made to use this trauma
that she had to try to help other people
and have a positive spin on it if you
can do that with something like the
Holocaust and did that help her PTSD was
she you know was it a positive outcome
from it like I I think that's probably a
step too far but it was her choice to
say I'm going to use this horrible
terrible experience rather than dwelling
on it to learn psychology to become a
therapist and to help other people who
are dealing with trauma themselves and I
love that the book was called the choice
and that she ends the book by saying
like regardless of what you do or what
you want to do like the choice is yours
and because of the mindset that you're
going to choose to get there I could not
love that more if I tried I've heard
interviews with her amazing she's great
because look there's nothing I can point
to in my life and be like see I overcame
that but it doesn't get much more brutal
than either the Googs or the um
concentration camps and so it's the
worst just a very quick story not to get
too graphic about this but there's one
story that sticks out when aitz was
liberated she was in aitz I think she
was actually moved to another Camp the
Allied Soldiers the US and the British
soldiers are walking through the
Concentration Camp most of the people
are dead on the ground so the soldiers
say if you're alive raise your hand
and she didn't have the energy to raise
her hand she was so sick and withered
she didn't have the energy to do it and
she thinks that they're like about
they're about to leave her and she has
the energy to like kick a can next to
her to get their attention who and
that's how they found again it's like
it's a level of trauma that you and I
couldn't fath the ordinary person could
not even in a million years fathom and
to use that as the launching stone for
her career to become a therapist help
other people who've been through tragedy
it's a it's a remarkable book remarkable
I assume you've read Man's Search for
meaning yes you had a similar response
like two weeks ago actually really yeah
I hadn't read it until then oh my God
I'm a little I heard about it forever of
course good amazing book one of the
things that sticks out from that book um
he talks about a lot of people in the
concentration camps the people who made
it were the ones who had something to
live for who had a family and even if
they didn't know if their family were
still alive and for most of them the
answer was no they are not but if they
had an idea in their head I need to
survive so I can see my son again so I
can see my wife my daughter again those
are people who made it but the people
who didn't have anything to live for the
ones who gave up very quickly and just
let it go and so like their their actual
physical health was determined by their
mindset of like do I have a goal to live
for and that was literally what was the
difference between life and death for
these people yeah it's astounding
astounding it's it's exactly why I am so
convinced that mindset won't solve all
of your problems but everything is
Downstream of your mindset and so if you
don't get get that right down to the
frame of reference so uh I'm in a
concentration camp I mean this is
literally straight from man search for
meaning I'm in a concentration camp uh I
I must give meaning to my suffering and
if my suffering has meaning I'll be able
to endure it if it does not have
suffering then he said in the book that
uh you could predict within 72 hours
when somebody would die who's going to
make it because as soon as they no
longer had a reason for their suffering
he's like they'll be dead in three days
give up so EAS that is crazy that
ultimately is your m mind that is the
difference between life and death
there's a very popular book right now
written by a hospice nurse who spends
her entire career dealing with people
who are about to die and it's a
fascinating book just talking about the
end of life experience and one of the
things she writes is that it's very
common for people in their last days to
predict the day they're going to die who
you'll have these people in hospice who
say Thursday is my last day wow and
they're and they're right they're
accurate about it now what's really
going to bake your noodle is whether you
would have knocked the vase over had I
not said anything if you know what
that's from I'll be very impressed but
so that I think that's a is that a
mindset too of just like in your mind
you're like I'm I'm gonna like it's your
choice to give up it's your choice to
live or die now
biologically it's not your choice if you
have a heart attack if you have cancer
it's not your choice to live maybe at
the at the margins but you can't cure
cancer by mindset you know but I thought
that was I think I think the opposite
might be true that those people who are
on their way out could pick the day that
they're going to give up yeah maybe they
they can't pick the day in which they're
gonna you know the the cancer is going
to overtake them but if they're already
on their way out they can say all right
you know I'm I'm done now now you can
take me yeah and I think that's part of
why you probably have hear these stories
I'm sure they're extremely anecdotal
about couple's been married for 50 years
one of them dies two days later the
other one dies my wife finds that so
romantic it unnerves me it's it's a Dre
I think it's everyone's secret dream
right to die at the same time or to die
on your own terms die on my own terms
yes but my wife's a little too obsessed
with us dying together it makes me
nervous should she ever get sick it is
it is it is very romantic yeah for is it
romantic I don't know my wife what's
romantic about it is the idea that
neither of you have to suffer with by
not having the other yeah yeah I you
never have to wake up in an empty bed
kind of thing that's that's the romance
behind it I would be crestfallen to not
have my wife but uh let me this is so
random and then I will bring us back but
uh would you want to survive a mass
plague that killed 98% of no absolutely
not and this is why I think when they
think about the uh nuclear drills in the
1950s where the kids in America said
hide under your desk if the nuclear
bomb's coming a of course your desk is
not going to save you but honestly I
feel like if a nuclear bomb is coming I
want to lay out in the pavement and say
take me do you hear about the stories
about the people who survived rosma and
Nagasaki it's the most horrific thing
you could ever imagine and I I think in
those situations you want to be taken
quickly would you have wanted to survive
the concentration camp
I I I don't want to pretend like I can
put myself in their shoes and understand
what that kind of trauma would be like
give me give me the high level inspo
like you're inspired by this woman who's
like I'm going to use my trauma would
you not have been more horrified in
where she doesn't Kick the Can I'll tell
you a recent example without having any
experience with this just relaying a
story that I heard uh there was a father
whose young daughter was one of the
Israelis kidnapped by Hamas a couple
weeks ago and he uh learned shortly
after that she was dead and he said I
don't want to quote him directly but
something to the effect of thank God
because being tortured by Hamas would be
so much worse than death got it got it
got it and so like without knowing any
more details just relaying his story but
I think there is some of that and would
I want to be one of the survivors of the
Holocaust I mean I think everyone has a
will to live of course but I cannot
fathom the trauma that a lot of those
people went to including the woman who
wrote the book The Choice I'm sure
there's a lot I'm sure she had a lot of
the most horrific nightmares you can
ever imagine after that yeah so when I
hear about the survivors of hoso who
just had third degree burns head to toe
and we absolutely never the same that's
there there are some situations where
it's like no in if a nuclear bomb's
coming I I think that you you want to
pray for Mercy at that point rather than
pray for survival and hiding under your
desk it's interesting while I admit uh
if it were a question of you know my
entire body being covered in third
degree burns it's it's a think I mean
imagine we're getting very graphic and
dark here but imagine a world W your
entire family is taken out and you're
left with third degree burns but you
live yeah are you grateful for that like
there there's a line I hear you I hear
you uh I do if I'm unscathed I do want
to survive though I'm always surprised
that some people don't if it's like some
apocalyptic thing I don't know for me
like even though here's the thing that
I've thought about as a parent if there
was a situation in which either of my
kids kids were about to die and I could
save them by taking myself facts I do it
one would it would be the most natural
instinct and when I hear stories about
parents that do that my first thought is
hero like you will go you we should
build statues after you people who
sacrifice themselves for their children
there's nothing more heroic than that
and I want to think of course I've never
been in that situation but I want to
think that I would do it without a
moment's hesitation here's the question
would you do it for your
wife at this age absolutely because my
kids kids need my wife more than more
than than they need me so in that
situation yes because I'd be doing it
for my kids not for my wife what if your
kids were like 15 and
19 we're getting into some serious
hypotheticals here
uh I I want to say that the answer is
yes but I realistically it would not be
as black and white as my young children
I think that's true yeah yeah I hear
that
yeah okay uh so coming back to the
economy and everything so uh I think
we've laid out sort of the basics of
what people ought to do if they want to
die wealthy however I want to get into
like the real economy that's happening
right now so everybody inherits a set of
circumstances those circumstances matter
a lot they will for sure shape people um
you said at one point either in your
book or in an interview that I heard you
say there's no precedent for it being
worse than it is now if you're buying
your first house yeah I think that's
true specifically right now where home
prices are by and large higher than
they've ever been but mortgage rates
went from 3% to 8% that defies all
economic logic it should be in a world
where mortgage rates go from 3 to 8%
home prices fall 30% 40% 50% and we
hasn't that hasn't happened yet at least
so now you're in the situation where
particularly in big cities La San
Francisco Seattle New York Boston the
big cities you're looking at at least a
million dollars for a starter home for a
starter home at an 8% mortgage it's a
it's a completely different Universe
than anything we've experienced in a lot
because the last time that rates were
this High even in the mid 1990s home
prices adjusted for inflation like an
apple stle comparison were a fraction of
what they are today so having home
prices where they are today at 3%
mortgage rates was still very high and
still oppressive for a lot of people to
do it at 8% is just like a different
world now because of that very few PE
very few homes are transacting there's
like the level of sales has just dropped
off a cliff it's the lowest a point in I
think 20 years in in terms of the volume
of home sales because the prices that
are out there are not realistic given
the financing options for most people so
a lot of people will say according to
Zillow my house is worth x million but
that's not actually a mark- to market
price like if you actually needed to
sell it to someone tomorrow who has an
8% mortgage the actual market price the
clearing price for that is going to be
much lower than you think so I think
there's like a Wy coyote moment of like
we've gone over the cliff and we're just
starting to look down and realize
there's no Road beneath us you find
yourself hunching over your desk and
battling back pain after a long day of
work invest in a chair that is designed
to improve posture prevent pain and
maximize productivity anthos is built to
be your last office chair and I'm
telling you this thing is amazing it's
guaranteed to be the most comfortable
chair on the planet while also improving
your wasure and reducing pain or your
money back and I'm telling you it is
also the most fun chair you were ever
going to sit in I know that sounds
ridiculous you have to try it trust me I
have an anthos chair myself and it is
not just me everyone in this office
fights over this chair I am not kidding
I have never had more fun or Comfort
sitting in a chair this thing is amazing
head over to anthro.com
impact and get $200 off your purchase
there's one of three things needs to
change either incomes need to surge
either mortgage rates need to come down
or home prices need to come down like
one of those three or combination of
those has to occur you can't keep this
situation that we have going
indefinitely so is the would you call it
a housing crisis that we're having now
is there a set of other things going on
in the economy that makes this a good or
bad time like what if you were going to
paint a generalized picture of what's
happening now especially for young
people um I mean what's good right now
is that unemployment is incredibly low I
mean unlo you know having an
unemployment rate below
4% other than the late 1990s and a
period in the 1950s it's lower now than
it's ever been and even it's even lower
now than it was in the late 1990s that
we associate with like the best economy
that's ever existed it's lower now than
it was back then unemployment rate is
crazy crazy low if you want a job jobs
are out there so that's a major Tailwind
that we have that's propping a lot of
this up if you took today's housing
market very high prices very high
mortgage rates and you mix that with
high unemployment everything falls apart
everything breaks so I think a very
strong employment Market that we have
today can mask a lot of challenges the
other thing is that during Co the amount
of stimulus that went out trillions of
dollars in stimulus during a period
where people were locked in their homes
they saved that up and what's called
excess savings what trillions and
trillions of dollars of money and by and
large that benefited the poorest people
the most the people who had the least
money in their checking account before
coid had had the the biggest percentage
boom really like those are the people
for whom their financial situation just
utterly changed overnight and a lot of
that excess savings still exists not as
much as did two years ago but people
like households in general are in a
better Financial shape right now than
they've been in a very long period of
time including you can say mortgage
rates are 8% today for the people who
are buying a new house today but so many
people locked in a 3% mortgage either
because they bought in previous years or
they refinanced in 2021 so to the extent
that they don't need to move and someday
they might eventually need to move but
if you're locked in at a 3% Mortgage in
a world where maybe you're getting an 8%
raise every year like that's a that's a
boom that's amazing situation to be in
so there's all these like weird
breakages mixed with a lot of great
things that are happening in the economy
at the same time so so many people were
predicting recession I'll be honest like
it as a person who is very tied to
advertising I can just tell you things
ain't what they used to be yeah so
advertising money is pulling back
advertisers are definitely expecting
something bad to happen for sure um so
from where I'm sitting the economy feels
soft it feels like Wy coyote has run off
the road and is looking down uh it's
just no one has reported back what they
actually see yet but everybody's
paranoid that they're going to see
something bad that's how it feels from
where I'm sitting yeah um is that people
just being paranoid what's the I mean
not to get too technical about this how
much of that is literally when Apple
changed the tracking feature and all of
a sudden advertising got less potent
than it used to be isn't that at least
part of this that wouldn't matter for
the advertising that we deal with
because we interface with it through
YouTube yeah um but when we're trying to
advertise our stuff that matters but not
the inbound I mean one one other way to
phrase this is that is the economy weak
today no is it weaker than it was in 201
21 yes but 2021 was the anomaly today is
not the anomaly so even if it is weaker
by any metric and unemployment income
growth household debt to income ratios
it's doing very well today now the
history of all of these things is that
the speed in which you can break that
narrative is very quickly so 199 the
year 2000 strongest economy that's ever
existed 2001 everything fell to Pieces
2007 absolutely on top of the world 2008
worst years since the Great Depression
so even if you say even if I can say all
these things are going well today we
could be talking two months from now and
be in a completely different world it's
usually not a slow thing that kind of
trickles in it's like most recessions
are usually a big exogenous event that
hits like Leman Brothers go goes
bankrupt or coid or 911 that just throws
things for a loop so just because you I
can sit here today and say things are
very good doesn't mean that 30 or 60
days from now that narrative can't be
completely Unwound now and but and
that's why forecasting is so difficult
now you said the narrative so how much
of this and this is one thing that
freaks me out about the economy and
money it's basically just a public
confidence feelings there's a great
economic uh commentator content maker
named kylo scanon who who talks about
the vibe recession and it's literally
like most most economists are like data
and charts and numbers she's like no
it's just the Vibes it's just how people
feel and it's true when people feel good
about what's going on they spend money
when they spend money the economy is
strong when they don't feel good about
things when The Vibes are low they stop
spending money and then the economy
unwinds like it's not more complicated
than that so mood is a massive thing
it's huge and a lot of it it's it's
self-fulfilling a lot like there's
measures of consumer confidence and most
of what moves consumer confidence what
actually moves the needles are three
things stock prices gasoline prices and
politics those are the things that
people pay attention to or they can just
get a quick update when they watch the
news for 10 seconds stock market's up
gas prices are down I'm not hearing
anything about politics good I'm in a
good mood or the opposite of that if gas
prices are going up and the stock market
fell today and politics is a mess you're
going to be in a bad mood and like those
are the three things that move people's
economic sentiment that has a very
strong uh impact on how much money
they're going to spend and the money
that they spend is somebody else's
income so when you stop spending money
that's someone else's income that just
went down and it snowballs from
there so okay knowing that um
basically this is a sentiment game I
want to bring up something that you
talked about in your book uh that I'll
tie to what I'll call the debt crisis
that be very like it feels to me like
we're in a debt crisis just looking at
the numbers uh doesn't seem sustainable
to me when you look at the housing
numbers you were saying hey one of these
three things has to give yeah like uh
you you can't have debt like this with
interest rates as high as they are like
this just seems like an absolute recipe
for driving off a cliff we're talking
household debt everything household
corporate and government debt all I
don't know if they're historic Highs but
holy hell they they are massive yeah Ma
it's something like three times GDP that
could be wrong it it's bad like the the
debt to GDP ratio is crazy some people I
think it was chamath that said oh it's a
nothing burger and I'm like bro how can
this be a nothing burger like you at
some point just servicing the debt
becomes a problem anyway not an expert
but I'll call it a debt crisis from my
limited understanding uh but you have a
statement in your book where you say
this is crazy to me stability is the
stabilizing yeah and you walk through
Minsky's Financial instability
hypothesis do you remember the three
beats oh yeah I mean so himman MSY was
this economist back in the 1960s and in
the 1960s there was this move in
economic circles that we should
eradicate recessions people were very
optimistic back then yeah let's just get
rid of it but we had just walked on the
moon we had like eradicated polio there
was this idea that that of course we
should be able to eradicate recessions
himman Minsky said you'll never do it it
can never be done because of what he
came up with what he called the
financial instability hypothesis he said
when people are optimistic they go into
debt when they go into debt the economy
becomes unstable when the economy is
unstable you get a recession so the lack
of recessions is what triggers the next
recession if you never have any
recessions people go into crazy amounts
of debt when they go into debt you have
a recession so by definition you cannot
avoid it it's always going to be a thing
that you're going to have to deal with
in life the same is true in the stock
market like if the market never crashed
people would put all their money in the
market if they put all their money in
the market valuations go way up when
valuations go way up the stock market's
fragile and it crashes so a lack of
crashes is what causes the next crash
it's just it breeds a level of over
optimism and over complacency that
causes the next crash so when you accept
that just like the nature of how
cyclical these things are then you don't
pretend that we're going to be in some
sort of stable zone or that we can stop
these or that the next recession is
caused because this politician and that
policy maker necessarily made a mistake
that's just an innate part of how any
capitalistic Society works okay so if we
know that what do we do with that
information those of us that want to
navigate all of this well you have to
assume as I do that there's going to be
at least two recessions per decade one
of which is going to be really bad that
should be your Baseline scenario so
don't act surpris when the next one
comes don't say nobody could have seen
this coming you know I hope to be an
investor for the next 50 years so during
that time I I hope to experience 10 to
20 more recessions you know that's I
think that's that's just the Baseline of
what you should expect as as an investor
but every recession we have people say
something to the effect of nobody could
have seen this coming and it's that
guy's fault versus I just think it's
just an innate part of how the system
works so when you accept that not only
are you psychologically more prepared
but I think you should be financi more
prepared I think most people don't have
enough cash in liquidity because they
extrapolate the good times indefinitely
and they don't have the mentality to
assume that just because it's good today
doesn't mean everything can't be taken
away from you next month like I said
earlier most most recessions don't you
don't Cruise your way into it you go
from everything is great to utter chaos
in 30 days that's usually how it plays
out and so because of that and most of
what causes the big economic declines
are surprises things that people don't
see coming 911 Leman Brothers Co nobody
saw those things coming until they wre
their havoc and so because of that I
think most people just don't have enough
cash liquidity margin of safety buffer
in their finances so accepting that just
the natural path of what we've gone
through in the past and that these
crashes are inevitable pushes you
naturally towards a greater degree of
safety not because you're conservative
but because you want to be able to
survive and endure all of those
challenges so you can stick around long
enough to be a good long-term investor
okay so what does that look like what's
the play so if I know that I'm going to
get two of these a decade one's going to
be super
gnarly uh is it an amount of my paycheck
that I just I invest every month no
matter what is it that some of my
paycheck goes to the stocks some goes to
cash do I pull back in a recession do I
go hard in a recession like what's the
what's the play I think the more that
you can mechanize it the better the
better the more you can take your
emotions out of the equation so I think
whenever people have a system that says
I'm saving up money so that when the
market crashes I'll put it in then nine
out of 10 people can't won't be able to
do that CU When the market crashes
they'll be they'll be scared shitless
and they won't be able to do it and when
when everything is going well they tell
themselves that they'll be able to do it
but in the trenches when it happens they
they can't and a lot of people were were
like this and if you talked to someone
in 2019 who said oh if the market
crashes 40% that would be an amazing
opportunity I would buy in and then it
actually happens in March of 2020 and so
many of those people were not saying
this is an incredible opportunity they
were saying this is going to be worse
than the Great Depression and by the way
they may not have been wrong if you if
in March of 2020 you said this is going
to be worse than the Great Depression
that was a smart statement to make I
certainly had my fears that was a smart
statement to make just because it was
not doesn't mean that that was not the
right mentality to have at the time but
it just goes to show that saying all be
greedy when other are fearful is much
easier than actually doing it so the
people who have that strategy I think
for N9 out of 10 not 100 % but nine out
of 10 people won't be able to do it so
if you could just mechanize a dollar
cost averaging strategy and just say on
the first of the month I'm going to
invest $100 into stocks I'm going to do
that no matter what the econom is doing
you may not be able to do that either
you may still get scared out of that but
at least you're trying to take the
emotion out of the equation in terms of
the amount of cash cushion you should
have I don't think there's necessarily a
formula for it you said at least a year
or one year but at least six months I
think that's great but I don't think
it's that formulaic I don't think it's I
don't think there's a study that shows
why one year instead of 18 months is the
right amount to have my view on this has
changed a lot since I had kids and it
used to be that my economic situation
was just me and then it was me and my
girlfriend and then me and my wife and
then me and my one kid and then me and
my two kids like that changed my risk
tolerance and changed my goals of what I
want and with that came a corresponding
change of I think I want a little bit
more cash because if [ __ ] hit the fan
it's not just my own well-being I got
all I got three other people to take
care of and that might go in reverse
when my kids move out of the house so I
don't think you can come up it's and
everyone's different my parents who are
retired have a lower cash allocation
than I do and I'm still working of
course that doesn't make any sense but
they know what they're doing and I know
what I'm doing I just think I sleep
better with this uh having more cash but
they don't need it they sleep just fine
having what they have even being fully
aware of the risk that they're taking so
everyone's risk tolerance for these
things is going to be different too
there's no greater nightmare for me than
not being able to take care of my family
in any degree to deny them something
that a need that they would have or even
some sort of Desire that they would have
because I took too much risk in the
stock market to me that's just in my own
mind that's a degree of failure that I
wouldn't want to put up with but other
people would disagree with that and they
would say no if I lost everything I
think I'd be okay and I pick myself up
and keep going I don't think I have that
mindset for myself uh and I just Embrace
that that's not my personality I I I I
kind of wish I did but just how I'm
wired I'm not so I think I'd lean
towards more of the let's make sure that
we can get through this side and by the
way I don't again I don't think that's
conservative I think what I'm really
focused on is endurance to make sure
that I never get kicked out of the game
to ensure that the stocks that I do own
I'm never forced to sell them so I can
hold them for 50 years because that's
when compounding just goes nuts and so a
lot of it it's like the reason that I'm
it's like a barbell Finance I'm super
conservative over here so that I can
take risk over here and if I was less
conserv over here I wouldn't be able to
maintain these risks that I'm taking
what are here and here so you're
conservative in cash cash and stocks
let's say that let's just keep it really
simple the more cash that I have the
higher the odds that I'll be able to
hold the stocks that I own for 50 years
the less cash that I have the higher the
odds that I'm going to be forced to sell
them because I need the money and so
that's how I view it it's like having
that conservative portfolio is actually
one of the most like optimistic things
you can do I'm so bullish on the stocks
that I own for the next 50 years that I
want to make sure in no scenario am I
forced to sell them early Charlie Monger
has a quote he says the first rule of
compounding is to never interrupt it un
necessarily so like that that's what I
try to do with my money how do you
decide what stocks to buy I keep it as
simple as possible I own uh broad-base
index funds Vanguard index funds because
the variable that I want to focus on is
endurance and Longevity not the right
sector and whatnot because I know that
if I can earn average returns in an
index fund for an above average period
of time time not only am I going to
achieve every Financial goal that I have
it'll literally put you in the top 5% or
top 2% of investors without trying and
there's so many investors who spend
their entire careers 60 hours a week
trying to beat the
market and and then they have nothing to
show for it versus you can end up in the
top 2% of professional investors without
doing anything like that to me it's
always just been so appealing to me for
that and if you can if your
outperformance comes from longevity and
endurance rather than beating the market
in a single given year you know you can
like I know investors who can have and
will continue to beat the market so I'm
not one of the passive investors who
says nobody can do it those people exist
I'm I'm not one of them but I know that
if I invested with those people or tried
those strategies the odds would decrease
that I could keep it going for 50 years
but if I can be average for 50 years I
have very high confidence that I can
pull that off and the results if I can
pull it off will be extraordinary so
like that's good enough for me it's
interesting good enough that is a that
is an idea that is throughout your book
that the people that really feel like
okay this is all I need I don't need
more than this they're going to have a
much easier time than the person that
keeps Shifting the goalposts yeah um
what what is that psychological
principle what's the problem at work I
think you know there's a quote from
Johnny Rockefeller where he was worth
you know zillions and zillions and
someone says how much is enough and he
says just a little bit more and that
mentality is like exists for everyone
like the right amount of money is just
more than you have right now no matter
what the amount is and I think there are
Deca billionaires For Whom the the the
ideal amount of money is just twice as
much as what they have like that that
never ends so I think unless like having
enough money doesn't mean that you have
no aspirations for more I think to me
enough means that I go out of my way to
manage my expectations with as much
emphasis as I do improving my
circumstances so it's just reminding
myself that like what actually gains
happiness in any Endeavor in life is a
gap between your expectations and your
circumstances so you need to put just as
much effort and emphasis into both sides
of that equation and keeping your
expectations low and realizing that like
look I have aspirations for more I want
more money I want a more successful
career but if everything ended here
today I think i' i' I'd be just fine
because I think what I have right now is
enough even if I have Ambitions and I
think those two things to coexist is
really important how do you get them to
coexist how do you simultaneously want
more and be perfectly content where
you're at it's really it's really hard I
I I think a lot of it has been natural
in terms of what my wife and I like
doing is like going for walks and going
kaying and going for hikes and stuff
it's not things that require it's not a
materialistic or a business or an
entrepreneurial set of goals it's just
it's I find so much pleasure just
reading and listening to podcasts and
whatnot that's kind of my steady state
so a lot of it is just a personality
driven thing of like what I have right
now as I said earlier what I really want
is freedom and Independence and I'm
fanatical about gaining that because
once I gain that than the thing that I
actually want which is just a life of
control where I can read and hang out
with my friends and the people who I
love that all falls into place so a lot
of it but you know I think there are
definitely people you know take the
extreme examples Jeff Bezos Elon Musk
for whom
nothing has been or will ever be enough
and you know there's I don't think
there's any world in which I would be
come even remotely close to that kind of
successful and not just pull the rip
cord and be done and then go read books
in in my independent quiet private life
but I'm glad that people like that exist
people for whom Nothing Is Never Enough
like there's no goal that's ever going
to just say okay now I have everything I
want because that's why they're
successful you know Mark Zuckerberg was
offered a billion dollars cash for
Facebook in 2007 I think it was and he
was like 23 at the time something like
that and for for him to turn that down
that's a one in a billion kind of person
who could say like no like we're gonna
build this company I'm going to turn
down a billion dollars cash in my pocket
and just keep doing this that's that's a
very rare mindset so I'm I'm thrilled
and grateful that those people exist I'm
not one of them and I think most people
are not one of them either what what
they really want is some degree of
Independence and autonomy and once they
gain that then the material side of it
like it's all enough I've heard you
speak pretty um I think wisely about the
fact that you are going to need to do
something with your time so when you
look at the fire guys the oh God fin
Independence retire early there we go I
got the retire early part I can't
remember at the beginning um yeah what's
your critique on that so many of those
people who retired at age 32 uh it's
really fun for like a month and then
they're bored to tears i' I've do this
thing for years where every December I I
take the month of December off of work I
don't I don't work in December and every
year leading up to it October November
I'm like ah December's right around the
corner it's going to be so great just
hanging out sleeping in playing with my
kids going for hikes and every December
the same thing happens really fun for
about a week by December 7th I'm bored
really by December 15th I'm borderline
depressed wow every year it happens but
I still I still like the idea of it but
the takeaway from that is what I
actually like doing is being productive
I like working and I I enjoy what I do
and when I strip it out my life it's a
missing piece that I want back so this
actually I'm actually glad that I do it
every year because at the end of that by
December 15th I have a newfound
appreciation for my job I think a lot of
people in the fire movement realize that
too they have this fanatical desire to
retire with not a single thought about
what they're going to do after that and
a lot of them are just bored to tears
particularly because all of their peers
are working so when they retire they're
like hey Wednesday at noon what are you
doing and their friends are like I'm
working so they they don't have they
don't have anyone to spend much time
with and I think by and large the reason
that traditional retirees don't fall
into that is because they reached a
phase in their life where they can't
keep working physically or mentally so
they don't really have much of a choice
but for people who have a cognitive you
know they have the horsepower to keep
working and the will and the drive to
keep working but they intentionally
extract themselves from the system they
realize that like no actually the work
and being productive and contributing to
society was a big part of their identity
and once it's gone they want it back
really quickly so a lot of those people
in the fire movement will do it for 6
months or a year and maybe it's a fun
six months or a year maybe they do some
traveling whatever but a lot of them
fall back into what looks like work
really interesting is that guy named Mr
Money Mustache who is kind of the front
runner of the fire movement he's like
the Godfather of it he's such a cool guy
ni his name is Pete Adney he runs a Blog
called Mr Money Mustache and I think he
was one of the first people to achieve
fire and then take it mainstream but he
makes a big point of like when he
retired meant that he stopped working
for other people after that he just
started his own businesses so he was
still working and being very productive
and making a lot of money it just looked
like retirement because he didn't have a
boss and he was doing everything on his
own terms so I think of like rather than
like in the fire phrase It's the retire
word that I like Financial Independence
is amazing if you can gain independence
and autonomy to me that's like the
financial Nirvana but you're still going
to work you're still going to contribute
to society you're still going to put
your brain to work every morning you're
just doing it on your own terms for the
people who you want to work for doing
the projects that you want to work on
during the times that you want to work
on able to switch to a new project
whenever you want to that's the autonomy
that people want I'll give them a new
acronym then so fire financial
Independence real efficiently that
because meaning and purpose is
everything and as somebody so exited my
company uh obviously never needed to
work another day in in my life but
thankfully I knew before doing that that
if you don't feel like you're
contributing in any meaningful way and
this is interesting because this goes
back to biology for me there are
algorithms running in your brain that
will insist that you're working hard
this is why I think Rich Kids implode
there's an algorithm running in your
brain that says You must work really
hard to gain a set of skills that allow
you to serve not only yourself but other
people in a way that you find exciting
and if you do that you'll be fulfilled
if you don't do that you will have a
deep sense of dis sees nothing will feel
right you just will all feel bad and
wrong uh and so yeah this is where I go
back to what I said earlier that money
is more powerful than people think it is
the great facilitator but it is not what
people think people think it's going to
make them feel about themselves the way
that they feel about people they see
with money yeah and it won't money
cannot touch how you feel about yourself
much to my dismay uh but the the cool
thing about the way that I generated
wealth was it was all in a moment so it
went from I have no money to I have a
lot of money yeah and because that's
just how equity in a company works so
it's like you're just shoveling money
back into the company back into the
company back into the company so I was
worth on pap for hundreds of millions of
dollars but uh I had one car with a
leaky exhaust you like Rich cash po
exactly and so then suddenly I was both
out and I we we took a small piece but
it was such a huge valuation that uh the
number was big and so in that moment I
was like oh wow I'm rich and I have all
the same insecurities so I was like that
is fascinating so that was um I was very
grateful for the way that my life went
that F I got first I got Wealthy on
paper and was just completely miserable
so I went to give all the equity back
wealth on paper is almost the worst you
can have cuz you are rich but you're not
it is a trip yeah so I getting people to
understand there's a big difference
between being rich on paper and being
rich in the bank uh and so when you see
all these numbers oh my God he's worth
you know whatever $80 billion like he
does not have look I'm sure that person
is doing just fine but they don't have
80 billion sitting in the bank right so
that's if they were to sell all of their
company then they would be worth so when
I hear people railing about you know
like oh they're hogging all the money
it's like they don't actually the money
doesn't exist it's a theoretical thing
until you reach for it correct and then
you probably disrupt the value of your
company anyway and so the value go down
of course if mus tried to sell all of
his Tesla stock tomorrow Tesla stock
would fall 50% yeah and all a sudden he
he'd be worth half as much as he was yes
and have created a just Firestorm of
problems in his life being sued by
investors and yes it's theoretical
wealth yeah so so all right so if
somebody is um really trying to get a
beat on the economy right now should
they be worried about debt is it just
like take care of yourself and just
worry about your personal debt like how
do you I know you don't think anybody
should spend time trying to predict the
market um but are there things that
people can do to not paint themselves
into a stupid corner so that they end up
having to fire sell whether it's their
house or whatever and we because you've
already answered in terms of stocks we
won't have enough cash we don't have to
worry about that um but I I have started
paying attention a lot to macro
movements yeah out of a concern for
Humanity more than I'm worried about
myself or that I'm trying to like time
the market to make a ton of money um but
it does seem meaningful so the question
is am I chasing something stupid here
and I should just stop paying attention
or is there a there there here's how I'd
phrase it and a lot of people will
disagree with this and I may not even
push back against their disagreements I
don't think there are any macroeconomic
risks today that are more serious than
have not existed for the last 100 years
it's not to say that there are not big
risks today of course there are debt
inflation interest rates those are all
very real things but let's not pretend
that we've ever been in an economy in
which there were no risk so let's not
pretend like things have always been
great but today in 2023 things are now
very bad and it's different from how it
used to be there's always been massive
economic risks that have come to
fruition the Great Depression the
inflation in the 1970s in the early
1980s interest rates were 177% like 911
Co we've always dealt with massive
massive risks in fact if I had to look
at like in my lifetime when was the
economy the riskiest that it had ever
been what the benefit of hindsight would
say 2006 2007 and what was unique about
that period is that people felt better
than they had ever felt before that was
a period where people would sit there
and say everything is great like blue
sky smiling at me kind of thing my wife
convinced me to buy a condo in 2006 and
that was that was a period where looking
back in hindsight we were the most
dangerous that we had ever been and so I
think like are there big risks today
yeah of course I'm not going to poop or
anything I don't know if I would say
it's a nothing burger like like shth I'm
probably closer to that than I am the
apocalypse guy but I I just don't think
the risks today are necessarily bigger
than they were for most of history and
you could say well today we have climate
change we have this and that yes you're
100% true but in the 1960s we had
nuclear war at our doorstep there were
missiles in Cuba pointing at Washington
there's always been it's a different
flavor of risk but the world's a very
fragile and risky place and one take
away from that is like if you have the
financial wherewithal and the
psychological mindset and the luck to
survive that and endure it people are
very adaptable economies are very
adaptable I mean how much of Europe was
literally Rubble in 1945 and rebuilt in
a staggeringly fast period of time Japan
was completely obliterated during World
War II and by 1980s was the strongest
fastest growing one of the richest
economies in the world in one generation
so C societies can be very resilient
even when they are hit with a massive
tragedy so if I had to say in the next
decade are there going to be ma is there
going to be an economic Calamity in the
United States States yes I don't know
what it's going to be but historically
there always is once per decade but that
would not preclude me from saying are we
going to endure it and fix it and get
through it and achieve a new high of
prosperity I'm equally confident in that
as well that's that's my take on what's
going on in the macro World okay I'm
gonna paint you a very gloomy picture
let's do it let me hear and then because
I like optimism so much uh you're going
to pull us back out though I will say
that you have said that if you really
want to be successful for the long run
you have to mix optimism with pessimism
y so that's where I live that's my bread
and butter baby is I can have both be
wildly optimistic you have if you're one
or the other you're doing it wrong you
have to have both greed okay so I'm
going to give you my paranoid case even
though I agree with you on balance I
think we'll be able to figure everything
out um but I am very much a student of
Mr Ray doio Y and Ray doio has mapped
out the debt cycle I think in a hyper
compelling way and in a way that when I
read your work especially same as ever
which by the way is a phenomenal book
and anybody listening to this should buy
it it's utterly fascinating and we're
going to go deep into the principles of
that in a minute but when I was reading
it I was like oh this is RA alio this is
this is the humans are predictable and
they are predictable in the following
ways yeah and what I like about what Ry
does is he's like okay this stuff is so
predictable let me tell you how this all
plays out in terms of the economy and he
breaks it into six stages and uh to
spare people it the long winded version
it basically breaks down the way that
you were talking about it that stability
creates instability basically people get
hyped up they get into a ton of debt
that debt is only sustainable for so
long and it really does get to the point
where people are going to default on the
debt there's usually a huge
restructuring that often happens with
War I think it something like eight out
of the last 10 times 12 times something
like that uh it has ended in Hot War and
so especially when you have a rising
power so we have a rising China we have
the US in just a mosive debt crisis by
my estimation you've been very clear on
your stance and um Ry maps all that out
and this is just the way it goes and he
nobody has spent more money researching
the history of these debt crisis um the
U Reserve currencies and the movements
the rise and decline of Empires he spent
I think he said hundreds of millions of
dollars doing all this research
absolutely crazy and then nobody has
made more money betting on their
knowledge being right than Ray Delia
built the largest hedge fund in the
world
okay so here you have a guy that's more
knowledgeable than anybody who's made
more money being right about it than
anybody and he's saying uh stage six is
absolute collapse Hot War we're at stage
five and a half and when he wrote the
book whatever 18 months ago he said he
put the odds of a World War at like 40%
he now puts it at 50% that's before some
of the news that's come out recently
so uh I looked look at that and I say
okay wait a second
um I'll paint a very quick snapshot of
what again I am a lay person on this so
I'm I'm certainly not a macro guy I play
one on YouTube a little bit but I like
to be honest that I'm I'm now just
walking people through how I think
through a problem I do not consider
myself an expert on this having said
that here we go uh
so if I'm China I'm going to be looking
for a divided America and I'm going to
wait for for America to be weakened in
some way financially hopefully
militarily hopefully both quite frankly
uh America's debt is through the roof
America's playing a proxy war via
Ukraine America is threatened to get
sucked into a proxy war in Israel uh
tensions in Israel seem to be going up
um uh I hopefully not much but
definitely like I'm not super confident
in where that goes so if I'm China I'm
watching that going
this could be a very good situation I
know that the Russians can make um bombs
for like a tenth of the cost that the US
can make so if they end up going
head-to-head like that just is we're now
going to be able to be out not
technically outspent but they'll be able
to make way more Munitions than we'll be
able to make so if I'm trying I'm like
there might be a move here they're
certainly making a play uh this is going
to be very controversial and I recognize
it as controversial and my o in fact one
of my favorite authors Morgan howel has
said if you ever say that you're 100%
certain on something all my alarm Bells
go off so I'll give you I don't know
like
40% uh but when I look at the moves that
China's making that are dollarization
plays 40% again I don't think we're
going to dollarize tomorrow or anything
like that uh but when I look at what
they're doing with the brics Nations
getting together trying to get um
countries to buy oil in their
currency all of that and they're
hoovering up gold like all of it just
feels like a country who's perfectly
happy to be patient so I'm not saying
this happens tomorrow but they're
clearly positioning themselves at least
for a multi-polar world which I would
say we're probably in I don't think we
really have Pax American anymore yeah so
that's already getting soft we're
getting sucked into these conflicts and
China has stated we are taking Taiwan
back
just letting everybody know yeah so now
the question just becomes not if when
and America does not strike me as it's
moving in the right direction we're
printing money like there's no tomorrow
as if inflation isn't a real thing um
and so I just look at all that I look at
Ray doio and I'm like yeah there's a
pretty compelling argument to be made
that we're at a legit not not like oh
randomly I'm picking 50/50 as in we went
from 30 to 40 and now we're at 50%
chance of a global conflict um last I
heard he put Civil War at 40% in the US
again up from 30 so it's like some of
the leading indicators are just not
pointing in the right direction and so
as a I'm an individual guy I don't I
think the only way to impact the macro
is to talk directly to an individual
human and say this is what you ought to
do uh but when I look at all of that I'm
like whoa and it does I'm not a prepper
so I have not bought somewhere in New
Zealand which people ask me all the time
uh I have no intention of leaving the us
but I will say that for the first time
I'm like huh let me be cognizant of my
surroundings I think you can agree with
all of that and not push back on any of
it and still say that the world is too
fragile to make a proclamation that X Y
and Z is going to happen fragile or
complicated both I think it can be
fragile in terms of it can go go a
completely different way than any of us
thought fragile tells me breaks it just
breaks in a way that I'm not expecting a
lot of these there's one winner and one
loser so it could be fragile for China
it could be fragile for the United
States if you and I were having this
conversation in 1989 you would have said
the exact same things you just said but
the country you would have said is not
China you would have said Japan it's
that's what Japan was taking over the
world in 1989 and if we were having this
conversation in 1950 and if someone said
Japan is going to take over the world
you'd say Japan
those people who are just literally they
can't feed themselves right now and if
you were having this conversation in the
1920s and you said the United Kingdom is
going to lose it it's not going to be
the world superpower anymore the pound
is not going to be the reserve currency
anymore that would have sounded
Preposterous too but it's exactly what
happened at the same time living in
Britain for the last 100 years has for
by and large been a lovely place to live
even though they lost their superpower
status they lost their Reser Reserve
currency status they went through debt
crisis by and large it was a lovely
place to live for most people and it was
one of the one of the richest safest
most prible countries to live in for the
last 100 years so even if the things
that you are saying come true and I
would not put any weight on even if I
don't disagree with that I have no
rebuttal to it I just know enough of
History to say nobody can say with a lot
of confidence this is what's going to
pan out over the next 20 years it's just
there's never been a 20-year period in
which that's the case imagine you and I
sitting here in 1999 and someone said I
think some Muslim terrorists are going
to hijack airplanes and it's going to
completely change the course of US
History would have been the most
ridiculous thing you would have ever
heard but those are the kind of things
that change history there's another say
thing I think a lot about here there's a
documentary on centenarians and it's
asking him just what you've learned in
life and they asked this French woman
she was like 103 they said what was the
happiest day of your life and she said
armiston day in 1918 the end of World
War I and they said why and she said
said because we knew with certainty that
there would never be a war ever again
and that was at the end of World War I
of course World War II starts 20 years
later so it's like the most common path
of history is that what actually PL pans
out is what not only nobody saw coming
but would have sounded Preposterous to
you at the time so the narratives that
Ray Delo puts forth and that UDA said
make sense to me like I said I have no
rebuttal for it but once you study
enough history you realize that that
narrative is that the clean easy simple
narrative that intuitively makes sense
is never what actually happens so that's
that that's what I would what I push
back on that for now I'd also say that
people love hearing those narratives
they love hearing the pessimistic
narratives because it makes them sound
like they should be able to do something
about it if you know that the world is
going to hell a you don't have any
uncertainty in your head uncertainty is
very uncomfortable you just eliminated
it because you know it's going to happen
and if you know the world's going to
hell then you can take an you can buy a
farm in New Zealand you can make a bunk
or whatever and both of those things are
eliminating uncertainty in your head in
a way that makes you feel very good so
nobody wants to hear you're not going to
sell any books saying we have no idea
what's going to happen next you will
sell a lot of books by saying here's
exactly I know for certainty I've spent
hundreds of millions of dollars
predicting what's going to happen next I
would also push back and say Ray Delio
has made an incredible amount of money
in Asset Management that's not to say
that he's made an incredible amount of
money being right about all of his
economic forecasts those are very two
different things you make money in Asset
Management through fees not necessarily
by making the right calls he has made a
lot of very good calls he's made a lot
of very bad calls in his career as well
that are much easier to ignore uh so in
the asset management you make money by
how much money you raise you raise money
by telling a very good story not
necessarily because you've been the Best
Buy money manager of your age I'll give
you that for a short period of time but
if you're not returning to investors
there's no way to sustain that and he
sustained post his implosion CU he
implodes in the 80s uh for people that
don't know his story and he goes on to
form the mindset that I think you would
stamp with your approval I certainly
will snap my wrist uh stamping it with
mine which is effectively what I call
the physics of progress so basically he
was like oh [ __ ] now I realize that I
don't I think I'm right I feel right but
how do I know I'm right and so I need to
surround myself with people that will
tell me that they think I'm being stupid
and then I can
triangulate the most likely outcome no
guarantees but the most likely outcome
by surrounding myself with a lot of
smart people um now I I think you will
agree
that if you try to learn a in fact Jesus
I'm quoting you now if you try to learn
a specific lesson from um 911 from coid
you're going to make a mistake y the
only lesson you should learn the world
is fres
exactly or the thing you said in the
book is the only thing you should take
from surprises is that the world is
surprises I was quoting Daniel Conan
with that yeah that's the lesson from
surprises is that you will be surprised
in the future yeah so you know it's not
going to be the thing you expect but
where I would take that is um one I want
everyone to be very clear I'm not
paralyzed by pessimism and I think it is
very dangerous to lean into your more
pessimistic thoughts which I absolutely
do not long story I won't I won't spend
our time on that now but uh so I'm going
to continue down the pessimistic road
but trust me I'm not paralyzed by this
but when uh the Israel Hamas thing
kicked off I was like I never would have
expected that but I was expecting
something just like that yes so those
are very different things to expect the
world to be chaotic is one thing that's
a great thing to expect to expect uh not
expect
that when when I think about okay for
the bad thing to happen to America that
I'm afraid of that I know will happen on
a long enough timeline yeah and look I'm
I hyper understand that getting the
timing wrong is the same as being wrong
yeah and I have no belief in my ability
to get the timing right which is why I
am the world's most boring investor ever
yeah much like you people would be very
unexcited to hear that I do not trust
myself to day trade blah blah blah all
that I'm anyway uh so but when it popped
off I was like yep like this is exactly
the kind of thing I expect to happen in
the world so I had been hearing like
over the last few years like right
before Co no was I think even after Co
popped off that people were saying very
smart people we're saying things like
maybe the world is so interconnected now
that we could never have another Global
recession what that's those those are
the kind of statements that you know if
you're any student of History you know
those are the ridiculous statements and
so I I think what you can say is that
there will be there will never be
another pandemic like Co there will be
more pandemics but they will be they'll
come in a different flavor and a
different time with a different
lethality whatever it would be there
will be more world wars but there's
never going to look like World War II
again that's what trips people up is
like you learn a specific lesson about
how to avoid a specific thing so you
think we've eliminated that risk but the
same flavor of risk can come just in a
different a slightly different form I
really wanted to believe we were at the
end end of history and now I everybody
it's very comforting to think that we
are yeah but that's kind of the theme of
the book is that there's all these
facets of behavior that have always been
with us and will never go away it's
always like no matter what happens in
the future and no matter what kind of
Wars you have or recessions you have or
what happens you know with certainty
that certain behaviors of how people
respond to Greed and fear and risk and
uncertainty are are always going to be
the same what are they so rather than
pretending that we can predict the
change let's focus on what we know is
going to be part of our future how
people adjust their uh expectations with
their circumstances it's always been
like that and it will be like that in
the future so that's a big part of this
how fragile the world is is the first
chapter of the book how narratives and
stories are what gets people's attention
and if you get if you tell a good story
not have the right answer if you just
tell a good story you get people to nod
their heads it's those kind of things
that I try to tackle in the book so what
are some of the things that we need to
be most aware of in the context of
navigating this world well doesn't have
to necessarily be about money
specifically but that's such a big part
you said there's two things people are
always going to care about health and
money yeah I'll sign off on that yeah
and those are two things that impact you
whether you like them or not doesn't
matter if you're not interested in
health and money they're interested in
you right and so everyone I think has
some uh duty to at least have a basic
knowledge of those two topics and the
fact that those are the two topics that
are not taught in school is one of the
craziest things you can imagine drill
down on algebra and trigonometry don't
give two shits about health and money is
kind of the view of the education system
it's a it's a pretty wild thing to think
about what's interesting to me though is
that is uh whenever a discovery is made
the person who made the discovery could
never predict the the echo of their
Discovery yeah um your book if it's that
Discovery the fact that those things are
not taught in school is predicted by
your own book because here's why those
things don't get taught in school if you
were already good at that then you would
go do that thing and this doesn't mean
that those who can do and those who
can't teach it means that teaching is a
thing unto itself it is not the skill
set that you teach yes teaching is a
skill set it's not that you're the
expert in money exactly so when people
say why is it mindset taught in school
because they don't understand it and you
can't you can distill it to a formula
that can be cleanly taught which is why
they teach algebra and trigonometry but
it's it's harder to test I always say
the most decision most important
decision anyone will ever make is
whether when and whom to marry it's
probably one of the most important
decision one of if not the most
important decision you I'll give you
that and why is that not why is that not
taught in school because you can't
distill it to a formula cu everybody's
different what you want's different from
what I want what you want out of a wife
is different from what I want there is
some rebellious part of me that just
cannot allow uh it to be said that it
can't be reduced to a formula but I
think that's why they teach trigonometry
and not how to find a spouse because it
can be reduced because it can be reduced
to a formula and what is reduced to a
formula even if it's not relevant to
your life sorry trigonometry it's not
but you can reduce it to a formula so
we're going to make sure everyone has to
take that but the most important things
in your life how to find a spouse you
can't reduce it to a formula so we're
not even going to pretend to try to
teach you about it I think that's why it
happens can I give you the formula for
finding the perfect spouse I'm going to
push back on it but sure please I hope
you do because then you're going to
without even knowing it so here I love
that uh okay here's how you find the
perfect spouse so the most important
thing is you need to make sure that you
find somebody whose values match yours
okay but that they have a different
perspective than you have so a different
frame of reference the reason for that
is you guys are going to go through this
life as a pair and your job is to solve
problems better than you would have
otherwise now I don't have kids but I
still think that's the wisest framing
like when you look at it from an
evolutionary standpoint men and women
coming together the whole point is for
you to raise kids and pass your genes
into the Next Generation so you are
optimized from a biological standpoint
to do that so you want to come together
with somebody that's going to remove
some of your blind spots so that you
guys can raise a kid effectively and be
taken uh be caught off guard by a lot
less than you would otherwise be um the
reason you need to share values is you
are going to collide a lot on base
assumptions that those are going to be
the bulk of a lot of your fights but
you'll be able to navigate your way
through those because that's just you're
not understanding the other person's
view of themselves or the world so once
you understand oh I believe um that uh
public schools are terrible and they rot
the brains of your kids and the other
person believes you need to be around
other children so that um they can be
you know introduced to multiple ideas
and have friends and learn how to
connect once you understand oh the
reason I was saying homeschool is
because I think it's going to rot their
brain the reason that you were saying
send them to school okay that's
different base assumptions you can get
to the same page and try to convince
each other if you have different values
on the other hand now this becomes a
collision uh base assumptions are what
you believe is and then values are what
you believe ought to be so it doesn't
matter what is so now you can't use
facts to navigate that that's just going
to come down to like religion so I
believe it ought to be this way if you
Collide on that the odds of you being
able to convince each other are
basically zero so when people have
values collisions the relationship is
going to be terrible and that's why
you're going to end up being profoundly
unhappy okay another thing make sure
that you guys one of the values that you
have is that you're going to elevate
each other so they're they feel better
about themselves when they're with you
than they feel when they're without you
another one make sure that at least
until you have kids you're their number
one one because otherwise I don't know
why people sacrifice to be in a
relationship uh there's a few more I'll
stop there but like how how am I do my
only push back I don't disagree with any
of those but I would be willing to
bet making this making this number up I
would bet that 90% of people on the
altar say I check every one of those
boxes and half of them will get
divorced so I think I think it's an
idealized set of goals to have so what
is it I don't if it's a form for excess
for Success um I think most people want
want the wrong things and want too much
out of marriage they expect their
partner to fix all their problems in
life for them and that's I I think it's
it's an expectations mismatch I think I
have a friend named Brent bore who says
like that feels teachable if there is a
key to marriage it's when and I this I
think is not necessarily teachable but
he says with when both spouses want to
serve the other spouse and expect
nothing in return and you can both do
that simultaneously that's an incredible
relationship you get a problem when
someone says I I did this thing to help
you and you didn't you didn't
reciprocate that's when you get problems
and you start getting needy there's one
needy person in the relationship that's
that seems to be when everything breaks
down can I give you a different take on
that yeah because they're dancing around
a brilliant idea but I think they're
being
insincere about what humans are like
nobody will do something forever with no
expectation in return but I do think you
need a wide margin of error so that
you're not doing Tit for Tat I did this
for you where is my thing it's like yeah
cool look if I do uh more than you more
for you than you do for me cool you know
we're within a margin of era whatever
it's all good um but nobody like if if
my wife was constantly taking the piss
as she would say and taking advantage of
me after a while but that's why you you
both have to do it if you both expect
nothing but you're both devoting your
lives to the other person you nothing
from your wife nothing Well organ no I'm
I'm I'm thinking this through if you
expect little but you get something then
it feels great it's it's expectations
versus reality it's not that I expect
nothing she doesn't punch me in the
mouth it's lovely I get it but like in
reality so I agree with you mismatch of
expectation reality you could go from I
have an amazing spouse but my
expectation is they're going to do
everything for me I feel like no so so
here's the answer I feel like I don't
have to answer that question because she
gives a lot to anyways so I don't have
to ask do I expect nothing because she's
always giving me something so I I never
have to ask is how's it going to feel
when the Tank's empty because the Tank's
always full I think I think that's the
and if both spouses can do that
simultaneously that's when you get magic
I just don't know if it's really
possible to teach that and even if there
is the formula that Brent said I I don't
think it's a formula like exists in in
algebra where it's just very clean and
it works for everybody it's it's a
Nuance thing here's the future I imagine
so I called it impact Theory University
and not Tom Bilu University for a reason
for those who don't know we have a
school put that in air quotes since
we're not accredited uh but we have a
university that is designed to teach you
mindset for now but ultimately it's
meant to be to teach you all the things
you didn't learn in school and while I
do not expect every High School to be
able to staff up with teachers I can
teach that there are people that can
teach this in my opinion and so the
future of Education to me is a
relatively small number of global
teachers that are absolutely incredible
at the thing that they teach and then
everybody else just Tunes in to listen
to that that's how it should be yeah and
so then it's like okay maybe you have
somebody to interface with directly that
can answer questions or whatever but
like the person that you're taking
lessons from like they really know their
[ __ ] yeah and so I agree with you and I
completely acques the world is
complicated this [ __ ] is hard uh if I
could speak in bumper stickers I would
be a way bigger YouTube channel and one
of the critiques of me is that I will
people wouldn't say Tom your to Nuance
they would be like you waffle too much
but I stand with [ __ ] conviction the
world is a giant waffle you should be
waffling I'm not I don't think I think
I'm nuanced but I'm really trying to lay
out here are all the complicated steps
that interact with each other yeah um of
course I'm never perfectly right but I
think I am frequently directionally
correct which is why I've been married
for 21 years exactly so uh
that to me it of course there's
complexity at the edges and all of that
and any one thing if you try to be too
strict with it's going to break down and
of course you talk about this guy in
your book I forget his name uh but the
guy that Warren Buffett learned from was
like Hey basically all my returns are
from one bet I made on Geico that breaks
all of my own rules there are going to
be things like that but to act like
there aren't things that are
directionally correct and that if you
move in this direction your life is
going to be way better is how people
shoot themselves in the face yeah so so
anyway this all feels teachable but not
no one person is going to be able to
teach all of this no High School you not
every high school is going to be able to
staff up there aren't going to be enough
people that are great at this stuff but
I do and even if you and even if you can
teach the principles and the person
follows all the principles there might
be a 60 70 80% chance that they actually
get the result that they're looking for
for sure versus I think what you want to
teach in school what what the society
wants you to learn in school are things
that are just objectively true for
everybody uh we teach certainty and and
that's you know things that are the
chemistry and algebra and trigonometry
things that there's no it's not if you
get this formula right there's an 80%
chance you get the if you get the
formula right this is the right answer
period that's what they want to teach
because it's easy to test for it's easy
to teach and Nuance which is how the
real world works it's just a much
Messier topic and there's no guarantee
that even if you follow the rules you're
going to be successful but that in
itself is the lesson that I think is
really important to learn
yeah agreed okay so give me some more of
the things about humans that you find
utterly startling compelling exciting
hilarious whatever your book is full of
things that are like we are like this I
mean one of the things that I take out
from the book is that you know I call it
wild Minds where people who you look up
to because they've achieved something
incredible you look like they've
achieved something incredible because
they are a crazy out of thee box thinker
that's why they are super successful
there there is always a case there's
almost no exceptions to case that that
person who has thinks about the world in
crazy ways that you admire also thinks
about the world in crazy ways that you
would not admire and Elon Musk is the
easy punching bag for this of like
people admire him for a certain set of
traits very good engineer very good
entrepreneur extreme risk taker and we
admire him for that and then there's
this other side of him that makes people
cringe at least some people his online
Persona his political views whatever it
would be and I you can't separate those
two like there's this quote from Kanye
West that he said years ago where he
said if you guys want this crazy music
and these crazy videos there's a chance
it's G to come from a crazy person and
and I I think I think some variation of
that applies to a lot of the people who
we look up to that most people who are
abnormally good at one thing tend to be
abnormally bad at another and therefore
like be careful who you're looking up to
for your role models and your Idols
because if you say I want to be like
that person because that person is
really good good at this specific thing
well they're also probably very bad at
this specific thing too at something
else for a lot of them not everybody but
for a lot of it is the entrepreneurial
and financial success that they achieved
came at the direct expense of time with
their family and relationships in their
personal life and there are so many
examples like this I wrote the other day
among the top 10 richest men in the
world there are accumulative 13 divorces
and seven of the top 10 have been
divorced at least once much higher rate
than the overall population and I think
when you read that on a it's kind of
shocking B it's like of course that's
the case these are people who worked 100
hours a week for 30 years of course they
didn't have time for their spouse and
their kids they were sing they had a
singular focus on solving this problem
and that's why they're crazy successful
but if you want that realize that you
cannot separate those two you can't have
Warren Buffett's focus with the absolute
perfect family at home life because
Warren Buffett's Focus came at the
direct expense of spending time with his
wife and children and so I think that's
it's really important to realize that if
you want to be another person you have
to accept the full package you can't say
this comes from nval you can't say I
want his body and his drive and his
focus and his intelligence you have to
take the full package because the reason
that that person has an attribute that
you like comes part and parcel with this
attribute that you're not going to like
yeah it's interesting I still think so I
agree with all of that and I have uh
found myself routinely watching like an
influencer or whatever who is just you
know I'm on my grind which I I'm a huge
fan of hustle porn let me be very clear
but if you don't spend time with your
spouse or your kids there's going to be
a consequence all falls apart none of
it's going to be worth it for sure um
but when I when I look at the world I do
say I want that person's physique I want
that person's business I want whatever
whatever and now look I put that in the
context of I know who I am and I'm very
careful not to violate my values I'm
very cognizant of spending all of my
time wishing I were somebody else is a
recipe for just misery and unhappiness
and um one thing that makes me laugh
about myself and this I think is is
really um it's Universal but again I
don't trust my emotions so but okay I
have a very fancy house it's like the
one sort of um I always fantasized about
it as a kid it was just like the thing I
always said I was going to do um and I
can still get Jealous by seeing somebody
else that has an even better he no
matter how nice
someone else's is nicer yeah oh yeah
100% yeah I I have literally I have to
GAA when I have that emotion I'm like
dude that
is did this house fill a hole did it
scratch the itch or is the itch still
there it well it scratches one itch so
this goes back to money is more powerful
than you think but it's not what you
think so it scratches the itch of it's
like living in a piece of art that every
time I catch it out of the corner of my
eye I'm just like God damn it's
beautiful so I'm very wired for beauty
so for me like it really hits me and
this is exactly what I think makes me a
good Storyteller is you don't have to
tell me if something's cool or good or
beautiful I will have such a visceral
response so anyway it scratches that
itch but it does not make me feel cool
it doesn't make me feel better about
myself yeah um does make you happier uh
it does appre appreciating art might
make you happier so it might well
something even more rudimentary than
that so I will just say that as my first
love is film Mak and I have a movie
theater in my house so that's it's it's
little things that's so cool and what
percentage square footage of the house
is the movie theater I'm I bet it's it's
I bet it's very small 7% but it's maybe
80% of what makes you happy I'm making
all this up it yeah it that particular
in fact I've told my wife this so maybe
it's 98% so I said look if we ever lost
everything and we had to go back to like
one of our old apartments uh I would
want to turn it into basic just a movie
theater if I have a movie theater and a
balcony where I can get a little bit of
sunlight like I'm good like that to me
is that one lives up to the hype I
that's an important realization yeah I
like that for sure okay um I want to
know given what you know is true about
humans given what we've discussed about
money where the economy is the world all
of that give me your take on the 24
election what do you I know you're not
you don't like to prognosticate but
knowing what you know about humans your
book basically opens with people think
tribally yeah so not letting you off the
hookie I um many years ago I went to a
financial conference and a political
scientist was one of the speakers I
think this is 2008 it was just before
the 2008 election and he said every
election since 1900 has been framed as
the most important election of our
lifetimes and he said at some point it's
just not at some point it's just another
regular run-of-the middle election so
every single election
in modern history has felt like all the
other elections didn't really matter but
this is the big one this is the main
event it's always been like that I think
it always will be like that there's
never going to be a normal
run-ofthe-mill election in my lifetime
it's definitely been like that 2004 it
was war on terror we got to pick the
right leader 2008 was the economy
falling apart 2012 it was like socialism
versus capitalism 2016 was Trump 2020
was it's always felt like the stakes are
enormously High I think it always will
so it feels like the stakes are
enormously High going into 2024 I don't
know if historically speaking they
actually are the other push back that
you get is like well politics is nastier
and more dangerous and more partisan and
tribal today than it's ever been that
too if that is true I think it's
marginally true it can't be true we've
shot each other a lot a civil war they
literally used to shoot each other and
fight with canes on the Congress in our
lifetimes I will say it does well M's a
little longer than yours but in my
lifetime this does feel like the most
divided we've ever been but certainly
historically it is clearly not and I I
think regardless of how you've thought
the last two elections whether which way
you wanted it to go in both elections
people said if this guy wins there's
going to be an apocalypse and by and
large it wasn't not to say that it
couldn't have gotten worse than it was
or could have gotten worse that it's
going to be but it didn't and I think
it's important to so I think it's it's
very easy to paint the politician who
you don't like as a monster when by and
large like most of those opinions are
overblown we shouldn't though poo poo
the idea that getting the wrong person
in office can completely and utterly
change society I mean the most extreme
example not comparing this to anyone
running for office in the United States
but Germany was the most civilized
society that existed for a long period
of time and you get the wrong person in
office Adolf Hitler and everything goes
to [ __ ] very quickly and you create the
most atrocious atrocities that have ever
existed no doubt that's a very extreme
example well I think it's important to
point out that you don't get a monster
like that without the right
circumstances yes of course it was the
economic trauma that existed in the
1920s and 30s that fostered that rise
there's a lot of quotes to the effect of
uh when Adolf Hitler came to power of
this like he he came to power with a new
idea and he basically more just
simplified he told the German people
like follow this idea and you're you're
all going to have a job you're going to
regain the prosperity that you've lost
over the last 15 20 years and back to
the best story wins a lot of Germans
said that's my guy that's who I want but
I think one of the lessons in that is
like social coll economic collapse can
lead to social collapse if you if you
Foster those right circumstances you can
get the monster gets the elevator to the
top in those circumstances so it's not
to poo poo the idea that it doesn't
matter who's President that's definitely
not the idea but I definitely think
there is validity validity to the idea
that the person who you did not vote for
is probably not the monster that you
think I think that's generally true most
of the time at least yeah the this is
why I worry um not the right word this
is why I'm now paying attention to
things in the macro is like oo the
circumstances are the things that give
rise to a change in the individual human
which I would say is one of the very
predictable things same as ever with
people is that um we are three weeks
away from being a monster and that we
have to be the price for freedom is
eternal vigilance like we must be
eternally vigilant for what are we doing
with the collective Consciousness like
how people are rallio talks about this a
lot it all that matters I remember him
saying he said this all the time I've
had him on the show several times and
he's like uh all that matters Tom is how
people are with each other never really
understood what he meant and then I
started looking at what's going on in
the political divide and I'm like oh
this is exactly what he means yeah like
when people are vicious to each other
when they other people when you hear
things like they're animals it's like o
like if I ever say uh these people are
animals my wife can just slap me right
in the mouth just punch me in the face
because the second you do that you are
headed down a hyper dark path of just
again being able to predict what humans
are like the second you do that once you
once you dehumanize it because the huge
majority of people could not attack
another human but once you de dehumanize
another individual then you're not
attacking a human because as soon as you
change it most the huge majority people
could not kill another human but once
you dehumanize it all bets are
off yeah and that was how he justified
the rest of the war to
himself it's a it's a stag it's one of
those scenes where you have to pause it
and just go oh my gosh now like it it it
makes sense in a very disturbing
haunting way I don't understand why
people aren't way oid about themselves
about uh The Madness of
crowds how humans really can break bad
in in the most horrifying way
conceivable and that I am I am such a a
believer in the words of Soulja niten
again the author of Gulag archipelago
when he said the line between good and
evil runs through the heart of every man
yeah and I include myself in that I I
try to remind myself as good as I think
I am as much as I feel like I have gone
in my life way out of my way to be
integrity and to do things with honor
that oh there are circumstances in which
I become a Monster yeah knowing that
that is within my heart as easily as it
is anybody else's I like to think it's
part of what keeps me sane it's part of
what keeps me um I seek out
disconfirming evidence with aggression
and look not nearly as much as I should
for sure I love being right way too much
but even within that context so paranoid
about my desire to be right that I will
be blinded to something yeah at least in
business it's so Stark you either stay
in business or go out of business yeah
and so I can either have people tell me
WR just reframe it in your head yeah
it's a it's it's a pretty staggering
thing to see what people are capable
just by reframing something what you're
capable of doing it's amazing the book
is amazing same as ever where can people
follow you I spend most my time on
Twitter that's my my drug of choice I
guess we call it X now these days but my
handle is Morgan howel first and last
name and my books psychology money and
same as ever those those three things
are really what I do I love it boys and
girls get after it speaking of things
you should get after if you haven't
already be sure to subscribe and until
next time my friends be legendary take
care peace if you want to scale your
business and avoid all the BS advice out
there check out my latest episode with
Alex horoi you can drink and do drugs
and watch porn if you still do the
that's all that matters I want to do the
formula and then live my life how I want
to live each of us gets to