Kind: captions
Language: en
all right so Tom my question to you is
if I was starting from scratch as in I
had zero dollars in your opinion what
will it take for me to get rich in three
years whoa okay getting rich in three
years that's that is a very aggressive
timeline
the only way that you're gonna get rich
in three years and we should probably
Define that I'll say seven figures or
higher seem like a reasonable Baseline
okay so the only way that you're gonna
get that kind of wealth is and I'm
assuming that you're not able to invest
something go buy something or something
like that so we're literally starting at
scratch so you're going to have to
create a company create something that
generates a lot of value
typically that's going to be a company
so you're going to create a company that
meets a very well-known need that has
not yet been serviced by a product that
is relatively easy to get across the
finish line and into the marketplace it
needs to be something that is going to
resonate with social media and it needs
to be something that doesn't cost a lot
of money to get started so either you're
gonna layer on way better marketing so
if somebody has a solution to a
well-known problem but they don't know
how to Market it you can go and partner
and say hey look I understand marketing
I'm going to be able to get this out
there or if you have an information
product that can be associated with a
known problem that you uniquely can
solve I happen to know a little bit
about your background so if there's an
element to working in the music industry
to becoming a professional singer
improving your voice or something like
that that you really have a beat on that
you know a lot of people are interested
in that you could turn into a course for
instance that people would really
resonate with
that could be a great one the reason
that I keep coming back to information
products is you're looking for something
that doesn't cost money up front if
you're going to like take Quest
Nutrition for instance when we were
building that there was still a
substantive amount of investment that we
had to make even just buying a bunch of
protein powder was expensive buying the
liquid fiber you have to buy them at 55
gallon drums so it's like there were
still thousands of dollars that we had
to put in in the beginning and so to
find something that really takes little
to no money down you're either going to
be doing an information product or
you're going to be doing something that
you can make yourself that doesn't have
expensive uh constituent parts or you're
going to be finding something that's
already made that the person doesn't
understand marketing so it's really
about what is the bit of value that
you're going to be able to bring to that
that's unique that somebody else can
easily replicate that the world is going
to know instantly that they need and you
just have to make them aware of it
because three years is fast
and so quest for instance depending on
what you mean by Rich so for instance
three years into Quest we had a billion
dollar brand
but I was I didn't have a billion
dollars that I could put in my pocket so
I was still driving I think by then I
had finally upgraded my car but for the
first couple years of that I was still
in a beater car even though I was worth
a lot of money and so if you need the
money to be in your pocket that's
probably going to take a fair amount of
time longer and if I can take a minute
to get everybody watching to understand
the difference between net worth and
income that would be really valuable so
if you don't mind generating a million
dollars plus a net worth now we're back
to you just have to build something that
other people say that they want
to have the actual money in your bank
account you have to build worth in
something that people say that they want
and then you have to sell that thing so
it's very rare that you're going to get
rich off of the operations of your
business you get rich by building a
company where somebody's looking at that
God this is going to get complicated
fast so ask follow-up questions so
you're either going to build something
that's going to IPO okay initial public
offering and what you're saying is hey I
built this really cool thing it makes a
lot of money or people think it's going
to make a lot of money and by going to
the SEC they'll actually let me
fractionate my company break it into a
bunch of pieces known as shares and then
I'm going to sell some of those shares
on the open market the public markets
and then people can buy those shares and
so that's a way that you're going to be
able to put that money in your pocket
but you're you're literally selling a
piece of the company that you own
otherwise you can sell a minority
controlling or total interest in the
company to private Equity Venture firms
something like that but usually when
people do that they're not doing it for
founder liquidity they're doing it
because they expect you to invest the
money back into growing the company
which is why IPOs get people really
excited because some of the shares you
will sell as part of the company
treasury which generates operating
Capital some of the shares will be yours
personally that you get for being a
founder and so you can use that as a
liquidity event so now you actually have
that money in your pocket
but most people in three years it's
gonna be tough you could get to an IPO
stage but that's going to be a really
rare moment that again follows the
equation of you're solving a problem
that people already know exists in a
very Dynamic way that people are
basically falling over themselves to
give you money for and
you've actually
created a company that can be sold which
is we could do a two-hour class just on
what that means so it's interesting when
you ask that question I really want to
give you a hot sexy take and just be
like oh go do this but the reality is to
to have a seven figure exit that fast
would be hyper rare it does happen
and I would rather get people thinking
about how do I build a business that's
doing a million dollars in Revenue all
the following things apply but then it's
really about reinvesting every dollar
that you're getting back into the
company to grow and scale but again it's
a problem with a killer solution that
you're doing in a unique way that didn't
require startup Capital yeah and so
going off of that who would be the I
guess the top three people that I should
first hire to take on this this event
this you should hire nobody you should
be going after people that are going to
partner with you so that you're not
paying salaries because the thing that
eats companies alive is overhead
so when you're starting if your goal is
like look I've got no money and I'm
trying to build a million dollars in
value in the next three years now you
want to be focused on what is it that
I'm good at so what's the problem I'm
solving who's my audience who am I
making this for and what skills are
missing from myself right so even if
you're doing an info product you're
going to need maybe a marketer you're
going to need a tech person that can
help you package it up you're going to
need customer service you're going to
need somebody to run the day-to-day
operations so there's a lot of things
that are going to have to be done but
you don't necessarily have to pay
somebody to do it and so the mistake
that I see entrepreneurs make is that
they're imagining oh my God it's going
to be worth a hundred million dollars
why if I give you you know even 10
percent of my company that's 10 million
dollars like why would I ever do that
because you'll never get to 100 million
dollars if you don't have other people
so to give you an idea I've never once
done a company where I didn't have a
partner ever so I highly encourage
people obviously and I've become
fantastically wealthy so I highly
encourage people to bring on partners
that you trust it's it is literally like
choosing a romantic partner that you're
going to be married to for a long time
and it's going to be hypers it's like
having a spouse and kids right but you
don't just have one two or three kids
you have 10 20 30 kids and all the
stresses of running a business so be
very thoughtful about who you partner
with but bring out a partner who's
strong where you are weak and then you
guys are going to be able to really
multiply your efforts and you can work
things into it like if they end up
flaking out if they quit that the shares
then revert back to the treasury so it's
what's often referred to as Phantom
shares so you guess what we do here at
impact Theory so we give Phantom shares
and we say hey as long as you're an
employee in good standing you own that
much of the company if we exit boom you
get it but if you leave or get fired for
any reason the shares revert back to the
treasury because what we're trying to
incentivize is performance we want
people that are in here killing it doing
it long term versus the sort of
traditional Tech VC back company that
knows they're going to exit in three to
five years years and so that's a very
different mode of being that's raising a
lot of capital that's having the idea
that sounds amazing on paper it's
knowing that you're part of a portfolio
so let's say they invest in 10 companies
they're only expecting one to hit so it
means nine of them they know are just
not going to work out nobody can really
see the future so I would say especially
for beginning entrepreneurs get partners
that you don't have to pay that are
going to work as hard as you and they're
good at something you're not awesome
thank you to follow up on that do you
need an entrepreneurial mindset to
become wealthy no doubt I mean you could
win the lottery or have your parents
give you money that certainly is
possible I don't think you're ever going
to get what I would call wealthy in the
short term without an entrepreneurial
mindset now in the long term you can
invest very traditionally and generate
incredible wealth it's really pretty
startling what compounding interest
looks like over time and if you're
willing to sit in the stock market which
which returns an average percent of
seven percent over inflation so being in
the stock market for 30 40 50 years
really is pretty amazing and you double
your Capital every seven years so you
put it in you know if you've got fifty
thousand to begin with seven years later
you've got a hundred thousand dollars
seven years after that you've got two
hundred thousand dollars seven years
after that you've got four hundred
thousand dollars so it gets big number
pretty fast right when you're going from
one million to two million two million
to four million but you've got to be in
it 50 years right so you've got to have
a lot of those seven year cycles and
that quite frankly for the vast majority
of humanity is exactly what you should
do you're effectively if you do it the
right way do not try to pick stocks okay
don't try to pick stocks I nobody beats
the people like Ray dalio right he's got
hundreds of millions of dollars in AI
eighteen hundred employees that all they
do is that for a living and they know
how to make Arbitrage on milliseconds if
you're not going to play at that level
and you're basing your decisions on
things you hear about on Twitter it's
already too late by the time that makes
its way out so that's where people make
the mistake they want to do it sexy they
want it to feel like gambling they're
trying to treat an nft like an
investment vehicle all mistakes you want
an index fund and the reason you want an
index fund is index funds are you're
betting on on a sector of the entire
economy so you're not trying to pick a
winner it's kind of like saying I'm
going to the horse track all I'm going
to bet on is that a horse wins the race
a horse comes in second place a horse
comes with their doesn't matter which I
just know that they tend to work out on
this distribution so I'm going to invest
in something like the S P 500 which is a
list of the 500 strongest is probably
the right way to think about it the 500
strongest companies in the economy if
one of them ceases to meet that criteria
they fall off stop being a part of that
portfolio a new one comes on and becomes
part of that portfolio so it's it is not
what they call actively managed so
nobody's trying to buy a quick stock
they just it meets this criteria or it
doesn't as you get fancier you can
invest in more index funds so maybe you
want a growth index or an index out of
China or developing economies whatever
and you can start to broaden out like
that but still index still passive still
long-term hold it's the only reliable
way historically to buy low and sell
High which sounds stupid but is the
hardest thing to do in investing the
easy thing and what most people actually
do is buy high and sell low now the
question becomes if we all know that's
dumb who would ever do that it's because
of the emotion you buy High because you
think it's actually low it's euphoric
numbers going to go up forever even
though it's a really high number
compared to where it was a year ago
it couldn't possibly go down come on
everybody knows this is all only up only
up it's different this time and so
people convince themselves at this time
it really is different you live through
the crypto Euphoria you know exactly
what the feels like and it feels good it
feels good it was so fun I was having a
ball now thankfully I don't trust myself
so I was like I'm gonna invest this much
and that's it and no more and even
though when I hit that number I was very
sad because I wanted to keep investing
and keep investing and keep investing I
was like no I know better than that and
so we stopped and then of course the
numbers come down now the problem is
they bought on the way up Euphoria felt
good number go up forever and then as it
starts to come down they panic and it's
like whoa that sense of like it couldn't
possibly go down you realize isn't true
it is going down and now you're
terrified that you're never going to get
your money back and if you got yourself
in too deep and you don't have money to
live on you start going oh damn like to
pay my bills I'm gonna have to get money
me out so now you've effectively got a
life gun at your head that's telling you
to live your life you're going to have
to cash out even though that would have
been worth ten thousand dollars you know
three weeks ago it's now only worth
fifteen hundred but you need the money
so now you lock in your loss by selling
low you buy High you sell low that's
what most people do and they do it all
for emotion on that note uh so if
there's certain things about
understanding your emotions what are
certain things that people need to
understand about money to actually
Attract it into their life or to build
it build out wealth what do you think
are those key things that they need to
understand okay so you don't attract
money the only thing you can hope to do
with your mindset is to allow yourself
to be optimistic enough to do the right
things to move forward what I mean by
that is it's what I call the only belief
that matters the only belief that
matters is that if I put time and energy
into getting good at something I
actually will get good at that thing so
you do need to have that mindset so
Napoleon Hill in the book Think and Grow
Rich he says like it was like page 45 he
kept saying I've already told you the
secret to this book on every page and he
was like if you don't get it by now
you're never going to get it and I was
like what has he said on every page and
I was like the only thing that he's
repeated on every page is that if I
think I can I can and if I think I can't
I can't I was like oh my God that's so
true if I think I can then I'm going to
act in accordance and I'm going to go
learn and do the things and ask other
people that invest and I'm actually
going to take money and invest it and
I'm going to figure it out because I
think I can but if I think I can't I'm
not going to read the books I'm not even
going to try because I already believe
that it's not going to work and so you
do have to get your mind right in that
way so that you have that belief so that
you are moving forward so that you are
learning but make no mistake if you had
the best mindset in the world if you say
a thousand times a day that you are I
already am a millionaire I'm attracting
money into my life it isn't going to
work and the reason it's not going to
work because that's not how value is
created that's not how money arrives
right so and if that did work there'd be
a lot more rich people so it really
comes down to do you going back to the
first question do you do the things that
you need to do to generate money which
then enough of that stacks and becomes
quote unquote wealth and to do that you
have to identify a problem
solve it and solve it in a way that
people get right away and they're like
oh damn you solved my problem and now I
would rather have that solution than the
money that I have in my hand
and if you fail to do that you're never
going to get anywhere and so
unfortunately a lot of people think that
thinking about something moves me
forward because it really does feel good
it puts you in an expansive mindset it
makes you feel like you've made progress
but the reality is you haven't and this
is why the most like hardcore
manifesters who are like this is all you
have to do none of them are on the
Forbes 500 it's just never gonna happen
so you've got to get those are going to
be people that are just die hard
executors
so how in your in your opinion would you
say
how can we get into a money mindset
what is a money mindset to you I guess
just you know how when we're when for
example me anyway growing up I was told
you know whenever you have extra money
save it put it in the bank and if you
can buy a house blah blah like very
traditional but I'm learning especially
just with all the resources that are out
now that there are other ways to make I
don't know to just invest your money in
a more smarter way and I I would
classify that as like a money mindset
where I'm just smart with where I
allocate my money let me use different
words that I think are really going to
help people
it's not about a money mindset it's
about mastering the game money is a game
and it's played by extremely Savvy
people that know the rules and you don't
know the rules and because you don't
know the rules they get you to
contribute to their wealth fund by
buying the things that they want you to
buy by investing in the way that they
want you to invest like I remember so
there's a whole thing which most people
don't even know about called accredited
investor so to buy something before it
reaches the public market you have to be
an accredited investor
now I remember when I became an
accredited investor which meant that you
had a net worth of over 1 million
dollars so the day before that I
couldn't invest in something private and
the day after that I could and I was
like why I'm not a better investor from
the day before till now I know how to
make money so fair enough being able to
start a new company yes you should let
me do that because I've proven that I
can but you shouldn't be rewarding me as
an investor because they are entirely
different skill sets and so I was a
little bit offended on behalf of the
rest of the world who do know about
investing but don't have the money to
qualify and so now those guys are stuck
and so there are years and years and
years where they're going to have to go
play in the public market game to build
enough net worth that they can finally
go be an accredited investor now why
does it matter being an accredited
investor means that you get what they
call Deal flow for the people that want
the fancy words you get deal flow where
people are coming up to you and they're
saying hey hey I'm starting this company
and
if especially if there's something about
you so let's say people will come to me
and say things like that because I have
a platform and they know that if I talk
about their company then that's going to
be valuable to them so they'll ask me on
their Advisory board or whatever and
they're going to give me shares in that
company so if I wanted to buy some
shares in that company they might come
to me and say hey we're going to have an
over subscribed round so let's we're
raising 50 million dollars it's going to
be over subscribed meaning we'll have
people that want to put in more than 50
million dollars but hey Tom we're coming
to you because we know that you're Savvy
you know what you're doing we'd love you
to
um you know give us advice or whatever
and the secret thing that they're not
going to say is you also have a platform
we hope you talk about us so it's like
Okay cool so now I get deal flow because
I'm an accredited investor where I can
invest in that but think about a tick
tock influencer that may have a way
bigger voice than I have socially they
can't do that same thing and so that to
me is crazy now there are other ways you
can work it out you can become a partner
and things it's not like there aren't
ways around it but in terms of being an
accredited investor you can't do it now
usually in the private round is where
the bulk of the meat is picked off the
bone so the people that end up getting
really wealthy are the ones the VCS that
come in early when a company is still
private they invest at a very low
valuation then they spend three to five
years trying to blow the company up even
farther and then they exit and that's
their whole thing is that the exit is
often going public so all the value that
they capture from the moment they do
their investment to the moment that they
exit that's all where the average person
they'll never get to capture that value
ever now they still have an incredibly
powerful tool at their disposal which is
now we've gone public and where does it
go from there so they still get to
capture all of that value but is that
remaining value is that an extra 20 an
extra two thousand percent who knows but
what we do know is the person that
invested here and exits you know at the
same time the public investor exits they
got a lot more juice from that so that
is very frustrating to me that instead
of it being knowledge based it's based
on how much money you have in your
account which they're trying to use a
proxy for being Savvy but I think it's a
terrible proxy so people should be very
thoughtful about that so getting away
from the notion of having a money
mindset and just really understanding
the nature of the game so understand oh
okay literally just in listening to that
part of the answer you now already know
three or four different things about how
the game works you might not have
understood before going very deep about
how the stock market Works what like
what's an index fund
um what does it mean to do a put or a
call options trading what is all of that
stuff what are Futures what are
Commodities when you begin to learn all
of that stuff then the magic happens and
this is the thing the very nature of
learning itself is the following when
you understand something
it makes a prediction
and now you can test your prediction to
see if you're right 92 percent of people
that set a New Year's goal fail to
achieve it which is why I've created a
90-day challenge designed specifically
to ensure that you hit your goals you
really can radically transform yourself
just click the link below to join me and
the entire impact Theory university
community to kick off 2023 right with
the impact 90 challenge alright guys now
back to the episode
so you understand all of these things
and you're like hey wait a second if all
of these things are right it makes the
following prediction
and cool I'm going to make a bet on that
prediction now the Market's either going
to reward you or slap you down so I'll
walk you through a prediction that right
now probably is about as controversial
as it's ever going to be and so we're
going to get to see if I'm right or not
so I got introduced to the blockchain
which allowed me to figure out oh now I
understand what this technology does it
takes a digital asset and gives it the
properties of physical assets so this is
utterly fascinating what most people
don't understand why did gold become
gold why did it become the gold standard
right most people know that for a long
time money was backed by gold but most
people never stopped to ask the question
why the reason is for something called
proof of work so however many billions
of years ago Stars exploded when they
explode one of the elements that they
shoot out into the universe is gold that
gold then crashes into a forming planet
and that gold chunks get locked into in
the case of the earth into the crust
right so you see it it in the mountains
and things like that so you can go and
pick it a mountain you can actually find
gold that was an exploded star it's
crazy right so first of all you have the
work of the universe being done to
formulate that element then you have the
work of the person chipping it out and
finding that thing so those are two very
difficult things to do so if you have a
piece of gold you know this was a star
that exploded that's going to be very
hard to replicate and somebody had to go
find it get it out of the ground
whatever so we know that the supply of
gold is never going to balloon up too
far it does balloon up which is another
thing people don't know about which is
inflation which people know that
buzzword but do they really understand
what it is so that's how gold becomes
gold it's scarce and it's valuable and
it's extremely hard to replicate and
it's very resilient so you can melt gold
and then you can reform it again and
there's no loss whatsoever gold doesn't
mold uh it doesn't get water damage
right so there's all these properties
that it has has but it's heavy as hell
so that's one of the things that's sort
of a strike against it but this idea of
proof of work so now you get people
going okay wait a second if all gold is
is proof that a star exploded and that
somebody found this in the ground and
therefore is provably scarce what if I
could perfect that because gold inflates
at about two percent a year which
doesn't sound like a lot it's a lot
so that's inflating away so its value is
constantly dropping due to inflation
which we could get into a whole rabbit
hole which I know George really wants to
about what psychopath called The Bad
Thing inflation because it sounds
awesome and what person called the good
thing deflation it sounds bad but it's
amazing it means your buying power goes
up over time okay when something
deflates which by the way economists
hate and we could derail into why but
this is the game of money right see how
many rabbit holes I can keep going down
so when you talk to somebody that really
knows what they're talking about and
they're like yo the currency in China I
believe I understand this much I predict
right my knowledge makes a prediction I
predict it's going to start deflating
which means if I transfer my inflating
US dollar it's going to be worth less
over time into a deflating currency in
China that means it's going to be worth
more over time yo send my US dollars
over into Chinese yuan hold it there
it's what they call Arbitrage one dollar
here gives me something over here and
the values are going in opposite
directions and I'm actually making my
well simply on that difference I didn't
create anything new I just took the
Arbitrage of a deflating currency sorry
I should be using this hand my deflating
currency over I'm making this up I'm not
saying that China is actually deflating
although the US actually is inflating uh
but just example example example
not a financial advisor either this is
not Financial advice so in this
hypothetical example where the Chinese
currency is deflating it's actually
increasing in value so a deflationary
asset isn't devaluing an inflationary
asset is devaluing now some people say
that that was done on purpose to create
a mind virus that makes people think
inflation is good when you start
thinking about why would somebody ever
want to trick the public into thinking
that inflation is good and this is a
conspiracy theory
but if somebody wanted to do that I
would understand why because inflation
in a small amount stimulates the economy
by changing your behavior
because what are you going to do if the
money in your pocket is worth less
tomorrow than it was today what are you
going to do with it you know spend it
yeah because you might as well get
something that retains its value could
be a car could be a book could be a
handbag a fancy shirt whatever but
you're going to spend it on something
that that price is going to be the same
tomorrow but my dollar is going to buy
less of it so I'm actually better off
you're literally incentivized to spend
your money now and in hyper inflating
economies people go out and buy a
hundred iPhones they'll buy 50 cars
they'll do things like that because they
need something that's going to hold its
value and because a car or an iPhone has
intrinsic value it's better than the
paper money that's being devalued by
inflation right so something super
sketchy about those words now whether it
was done on purpose is a totally
different question but you have to begin
to understand like all this like
confusing mess of interconnectivity of
one thing means this another means that
but it all makes predictions so if I
could get people to master the game of
money to the point where they go oh I
know what this means I understand the
last time this happened it meant this
and so now I've got a prediction and now
I can begin to bet on my predictions or
now I understand how to use leverage or
when not to use leverage and so all
these tools that are available to the
quote-unquote hyper Rich are available
to anybody you may only have ten dollars
to invest in that same way but it is a
knowledge problem it isn't a money
problem now there's a speed issue for
sure the guy starting with a dollar it's
going to take him a lot longer to get to
100 million than the person that's
starting with 10 million to get to 100
million takes a lot less doublings right
to get there takes a lot less risky
stuff you've got a lot more things you
can try that don't work all of that I'm
not denying any of that so scale becomes
a question of what your how quickly
you're able to generate that money but
you can play the same game I actually
want to call back to when you're talking
about accredited investors and so my
understanding is they have certain
income you know brackets or like you
know Network bracket where you can jump
into it because of how they view risk
and they're assuming again these people
have more
I guess bandwidth to take on that risk
and so I'm curious
for you how does risk play into like
wealth generation because again timing
also plays into it because in my head
when you're talking about the S P 500
index funds these are like safe right
over long periods of time but at the
same time you know if you want to take
risks that's also where you get like the
100 X's or things like that so how do
you view risk in wealth building yeah so
I think people if you want to there's
two paths before you to build wealth you
can invest in building something or you
can invest in assets and we'll Define an
asset as anything that actually pays you
to hold it so there are other ways but
just for Simplicity let's stick with
those two building something is going to
be ultra high risk but high risk High
reward so that's how I generated my
wealth I didn't own a single stock in a
single company until after I was worth
hundreds of millions of dollars so none
of my money did I generate in that way
all of my money I generated by building
a company that became incredibly
valuable to somebody else to Own by just
making hundreds of millions of dollars a
year in Revenue so another company
looked at that was like yo those
hundreds of millions of dollars owned by
us we can either grow it or it's a
creative to our bottom line which makes
our share price go up or that product we
recognize is a necessary part for our
brand portfolio to own whatever for
whatever reason it was extremely
valuable to them
here's another money Master the game
idea so
when you're talking about buying a
company there are two ways to value a
company more but these are the two
really typical ways you can get a
multiplier on Revenue so oftentimes
that's 1X 2x something like that so if
you're making 300 million dollars we'll
give you 300 million dollars to buy the
company or you can get a multiplier on
what's called ebitda so ebitda is just
an acronym it stands for earnings before
interest taxes depreciation and
amortization I always forget the eight
you've got your all it's basically the
money you make minus fancy accounting is
the easy way to think about it so you've
got uh you're trying to eliminate all
the different ways that a company can do
accounting and just look at how it's
making money without all the accounting
stuff and that could be 10 times ebitda
16 times ebitda 20 times ebitda because
they want to know how profitable
effectively is the company so I'm only
going going to give you 1X your purchase
if it's just based on Revenue but I
don't like the way the revenue is going
or if you've really shown that this
business is functioning we can do it as
a function of ebitda so while I can't
disclose the multiplier Quest sold on
ebitda and that was part of how we were
able to win so well was we had put
together a high functioning company and
so looking at the different ways that
something can be structured it becomes
really important now we started getting
a field what was the basically about
risk and how to manage that right so
going back to risk so you have those two
paths before you've got the high risk
High reward then you've got the much
lower risk much longer time Horizon to
get wealthy and so that's where I would
advise people if you're going to bet on
yourself accept a lot of risk but know
that it's like most businesses fail but
it could still be the right of a
lifetime if you've got me meaning and
purpose right so I still don't know if
impact theory is going to do what I
wanted to do but I show up every day and
fighting for it feels awesome and so
I've already spent six years of my life
just doing the same trying to build it
it's been six of the best years of my
life so it's like okay well nothing can
take that away so even if it ends up
failing while I will be you know
there'll be a moment of emotional trauma
that doesn't negate all you know going
after something that really matters so
for me that's where I invest the vast
majority of my net worth is
um I guess technically the vast majority
of my net worth is effectively buried in
bonds so that I can't lose anything uh
which is me saying I'm a very low risk
investor and so
all of my high risk dollars though are
in building impact Theory right so we're
just pumping money into it to continue
to scale and grow and grow and grow so
if I were doing risk I would do that but
for most people I would say you'll be a
lot happier you'll sleep a lot better if
you put money into an index fund as
boring as can be and just leave it in
for a really long time dollar cost
average in so don't put all your money
in at once buying slowly over time no
matter what price up price down you just
keep if if you're going to buy in a
thousand dollars a month you're buying a
thousand dollars a month a hundred
dollars a month a hundred dollars a
month ten dollars a month whatever and
you just slowly slowly again index funds
don't try to pick stocks so I would Ward
P if you're an entrepreneur you take
risk if you're not don't I have a
follow-up question on the risk tolerance
of uh index funds and S P's 500s do you
see it as more risk given Ray Dalia's
most recent book about the changing
World Order
so I love Mia Ray dalio uh Rabbit Hole
so I would still say that it's your
safest bet you just may want to be
thoughtful about so for those who don't
know Ray dalio's principles for changing
World Order is an extraordinary book
that points out a fact that every Empire
in all of human history has ended up
collapsing and their currency along with
it
so whether you're talking about the age
of England and the Sterling being the
world's Reserve currency whether you're
talking the current U.S being the
reserve currency when the Dutch were the
reserve currency so on and so forth
forever the Romans when they were the
jam and every one of them has failed all
signs point to it's a it's a six phase
cycle and phase six is total collapse
and Ray dalio pegs is somewhere in the
middle of phase five as the U.S Empire
so we are clearly on the decline in the
world order in the last 18 months as the
time of filming this uh 40 of all U.S
dollars ever made in the entire history
of the US dollar were printed in the
last 18 months so that is a very bad
sign so when you think about uh an
Empire collapsing it usually begins with
inflating their currency
it begins with inflating their currency
and beginning to lose their standing on
the world stage and that there's another
Rising superpower and of course right
now that would be China so there are a
lot of things but Rey will be the first
to tell you he doesn't know if it's five
years 50 years or 150 years they do tend
to collapse somewhere in the 150-year
range give or take a hundred years
though that's a pretty big swing so we
are at what the US is 250 almost 230
something like that no almost exactly
250. so we're almost exactly 250 years
old right now so we're along in the
tooth so uh even if it's the plus 100
years uh according to Ray dalio's
research and of course nothing is ever a
hundred percent so one might want to not
just invest in a U.S Index Fund but I
certainly would not think somebody
investing in the US economy is stupid
because what you're saying is that you
just trust that the U.S economy is going
to grow and the odds of it not growing
over the next 50 years to some
meaningful amount is effectively zero I
can never say nothing is zero but
historically certainly that's a very
positive sign like even somewhere like
England it's not like they went to
nothing they're still a major economic
player especially for a country the size
that they are
but it's worth paying attention and
seeing does China start to pop off do
you hedge your bets a little bit do you
start doing emerging markets do you do
based on technological sectors whatever
and looking at that but the only sort of
dumb thing to do would be to pick the
major
um like the S P 500 the I'm sure there's
a global index to get as broad of a
portfolio as you can that is a
well-trusted index fund and invest in
that and then as I say uh
diversification is critical you're going
to hear people say diversification Is
for Suckers the crazy thing is they're
both right because what they mean is
there really will be a winner and a
loser and if you bet on the winner then
you make all the money and this is the
guys that get incredibly wealthy it's
never on index funds you'll get Wealthy
by sort of family standards but you're
never going to become uh Elon Musk or
Warren Buffett betting on an index fund
so if you look at somebody like Warren
Buffett who did make his money in the
stock market the way that he did it was
he picked somebody's he made like 80 of
his wealth off of three trades I mean
it's really ridic it's less than five
for sure so there are precious few
companies where he looked at it got it
right and went all in now if he had
looked at it got it right and then was
like well I'm still going to hedge my
bets across everything he would have
much less risk for losing money but he
never would have become the richest man
in the world so again it's optimizing
risk for what you're comfortable with
I'm hyper risk-averse in investing and
I'm hyper risk tolerant in building so
the bad news for my wife is if I put all
or most of my money at risk to build
impact Theory and it ends up failing I
still feel like a warrior who is in the
arena and that's how I want to view
myself if I were to
failed to take that risk and never try
to build something great that would
really bum me out but if I lost all my
money on an investment I would feel like
an so because I don't consider
myself to be a clever investor so I need
to be very thoughtful hedge my bets be
very risk-averse and So for anybody
following the FTX drama Lisa got text
messages from friends who were like oh
my God I'm so sorry uh that you guys you
know you must really be panicking I
think they said to her and she was like
oh my God what the hell and so she
reaches out to me she's like what is FTX
and I'm like your husband is way too
paranoid for that like we have no money
in FTX my heart absolutely bleeds for
people that did the loss of human
capital as an app an absolute tragedy
but because I'm so risk-averse on
investments
we didn't do that we didn't expose
ourselves to D5 or anything I'm just too
paranoid so know thyself know what your
risk tolerance is but most people would
get queasy if they saw how much risk
I've taken in my life on the
entrepreneurial side
and then they would laugh at me if they
saw how little risk I take in the stock
market
I'm actually going to interject here but
you you made one comment which I don't
know if it was a mistake but you said D5
which just in the crypto world it was
actually a centralized exchange that
caused like all the drama you know I was
not trying to say that FTX was defy I'm
saying you don't not only did I not that
I didn't do defy or any of the things to
get people excited because the yields
are amazing but thank you so that nobody
thinks I'm conflating the two
um they were just when I got into crypto
which already I only invested in three
total coins one I sold and boiled down
to just two
Bitcoin and ethereum
um even then when there was so much
excitement around the kind of yield that
you could get when Banks were paying you
nothing I was like nope
it just seems too good to be true I'm
going to stay safe and so even if I look
like a chump because I don't make a lot
of money on the D5 and other people are
fair enough but I'm also not going to
lose money and then literally like a few
weeks later uh was when Mark Cuban lost
God only knows how much on a D5 thing
and I was just like yeah and the thing
it really does come from an
acknowledgment of my level of ignorance
so I don't want anybody to think I'm
smart I want them to realize how
risk-averse I am as an investor and so
you just have to and the reason that I'm
so risk averse I don't think I
understand it well enough and so you
need to know your level of knowledge
because again your knowledge makes
predictions if you don't have enough
knowledge your predictions are going to
be terrible and so the only things I
invest in are things where I feel like I
understand it well enough to make a
prediction so that to go back to an
earlier answer that I can really Buy Low
and sell high so as the price of Bitcoin
fell and ethereum fell I didn't even
think about it because one I was
investing for the long term I knew that
they fluctuate wildly within any
four-year window the fluctuations on
Ethan Bitcoin since their Inception have
been violent and so I was like well I
know they're going to be violent swings
so I'm only going to invest so much that
I still have plenty of capital dry
powder as they call it to live my life
and build when I'm building and then I
want to make sure that I don't see that
number and panic and go oh my God I have
to sell it's never coming back it's like
you have to be sober in that moment and
go what what was the knowledge that made
a prediction it's what people call my
thesis right you'll hear that a lot in
crypto my thesis is still intact what
they mean is you learned something about
the way that it worked which made a
prediction and that's your thesis so my
thesis is that the world becomes more
digital relies more on the blockchain
and more of the things that we think of
as being physical like money are going
inevitably to become digital if it's
going to become digital what do I think
will be the digital currency uh honestly
the digital currency will probably be
nation-based digital stable coins if I'm
completely honest but I think Bitcoin
will be digital gold and then ethereum
because we we actually build on it
ourselves here like that one to me is
even more than a currency it's it's a
whole universe of creation so anyway as
long as my thesis I Theses whichever the
case may be as long as those remain
intact I'm I don't have an emotional
problem right so even the other day when
I saw that uh ethereum was down to 1100
I was like whoa it was almost more a
fascination of like wow like volatility
is really real but then when you see
people being devastated devastated to
the point of like weeping and obviously
we know unfortunately it can go even
farther than that and it really becomes
scary
for me it isn't emotional because I
followed a set of criteria again because
I know my level of ignorance this is not
a clap for Tom this is a hey maybe I can
own up to I am as ignorant as Tom and
therefore will be as cautious as Tom and
play at that level
many people change their thesis over
time so how do you decide if you're
gonna change or how do you always stay
focused throughout the ups and downs one
I don't chase it because I don't know it
well enough I don't spend enough time
but if you look at somebody like Ral
Paul who I think is a brilliant macro
Economist when he's spending all day
every day watching the macro Trends two
he is extraordinarily educated because
he's been in this for a long time and so
he's lived through a ton of these Cycles
so even in the Euphoria he was like guys
you have to be careful you have to be
thoughtful here the macro Trends this is
what this makes as a prediction be very
thoughtful and just walk people through
historical Rises and falls and so you'll
get people like that that as their
thesis changes they change their
portfolio so one point he was what he
called irresponsibly long on ethereum so
he had something like 95 percent of his
net worth now as things began to change
he started changing that ratio for me I
was just like this is how much which I'm
willing to put into crypto once I hit
that level then I just stop and I'm
going to turn my brain off to it for the
next five to ten years now if 10 years
from now it doesn't hit I'll be like
yeah maybe that was a mistake but my
thing was I put the money in it and and
if if over that time my thesis changes
then I may rethink but the way that I
see it right now today I would ride
ethereum and Bitcoin to zero I have no
intention to sell the reason that I
would write it to zeros as of right now
today I in my do not follow my advice
way believe that right now those are the
Front Runners to be the ones that last
because I think everything not
everything I think a lot of things are
going to go digital a lot of important
things are going to go digital and those
two things still matter to me for the
reasons that I was explaining a minute
ago so okay those still matter so even
if the rest of the world momentarily
says these have no value it's my belief
that they will once again realize no
actually they do and and because I'm so
familiar with the technology and have
built so many things now on the back of
ethereum and really have researched the
life out of Bitcoin the protocol why it
matters watch the adoptions just seeing
some of the greatest thinkers in the
world think through predicting their own
future and where this goes I have a
pretty robust map of where it goes and
obviously it could be wrong but I have
confidence in that such that for now
it's just wait and see now if through
all of that like if the Bitcoin protocol
were to suddenly stop or we realize just
kidding there's not 21 million there's
22 million then I'd be like whoa my
whole thesis has changed now I want out
right so if any of us saw the supply of
Bitcoin inflate at least people that
that's part of their thesis which it is
mine that would invalidate everything
and I would be in a mad scramble because
then suddenly my thesis goes away
and I'm left like yo I want to get out
right now so but as long as everything
stays intact then I'm good the truth is
hitting your career goals is not easy
you have to be willing to go the extra
mile to stand out and do hard things
better than anybody else but there are
10 steps I want to take you through that
will 100x your efficiency so you can
crush your goals and get back more time
into your day you'll not only get
control of your time you'll learn how to
use that momentum to take on your next
big goal to help you do this I've
created a list of the 10 most impactful
things that any High achiever needs to
dominate and you can download it for
free by clicking the link in today's
description alright my friend back to
today's episode
do you believe in the advice about in
order to get rich you have to follow
your passion and do what you love and if
that doesn't work out how do you know
when to stop and to explore a new hobby
or a business venture so it goes back to
there's two primary ways I know the
comment's gonna light me up with what
about this and what about that there's
two primary easy to discuss ways to get
rich way number one build something way
number two invest like you're watching
paint dry as
um I have heard from ramit seti so if
you are doing the just invest then no
it's going to be super boring if you're
doing the build building is hard and
building will question your will to
continue not once not twice dozens
hundreds thousands of times like my life
as a roller coaster every day and the
funny thing is when something's going
right and my day is awesome like today
we just announced something big and the
Discord it was so fun and people were
loving it I was like yeah I know
something is going to go wrong today so
today will be part good part bad right
every day has something bad not every
day has something good so at least on a
day where there's something good I'm
like word so you have to have the
emotional fortitude to weather all of
those storms and it really is like life
is a computer game and the AI is going
to make it as hard as humanly possible
for you to keep going but if you do and
you develop that perseverance you can
accomplish some really extraordinary
things because of the way the human mind
works where knowledge Stacks knowledge
has utility utility means you can do
something other people can't do and now
you're able to monetize that utility so
it really is about time in the game
so that's huge to have time in the game
you have to be passionate because when
you say you're knocked to your knees
you're embarrassed you failed you lost
money it's just hard it's boring you'd
rather be out with your friends your kid
is sick whatever all those things that
are going to come for you when you say
why am I doing this you better have a
physical feeling to the positive when
you answer that question if it's purely
intellectual you're in trouble and I
think that's what people are trying to
get out with passion passion is
psychological energy it's like if you've
ever put you've been dragging ass all
day you're tired I gotta go to bed you
guys please I just need to go to bed and
then somebody puts on your favorite song
you can rally for 10 minutes and be
hyphy it's crazy there's something about
the way that you can shift your
neurochemistry that makes you feel more
energetic all of a sudden that's passion
it's it's just like putting a song on
you get that image again of who you're
fighting for what you want and now
you're back in it so so passion will
give you the energy to persevere so you
talked about the Neuroscience of passion
or just like getting into rallying uh
that's a lot about health so we've only
talked about wealth being about finances
is it actually more important to focus
on your health first and invest into
your health rather than just purely uh
money and for sure I would say do both
if you want a truly wealthy life you
need to be both Healthy and Wealthy
that's really important and there's the
age-old adage of a healthy man wants
many things but a sick man wants only
one that's really really true and so I
think it's it's important for two
reasons one that that if you're not
healthy you can't enjoy anything and
then the other reason is that if you
take care of your body it's going to
show you that your actions have positive
or negative consequences like I'm so
even right now I'm wearing a continuous
glucose monitor because because it
reminds me that what I eat has an impact
in my body that sometimes is invisible
but when I'm tracing it I'm like why do
I feel weird I can actually if I feel
weird guaranteed my blood sugar is high
like I'll feel completely normal until
about 120. now the average person I
promise you lives their entire life
above 120. if you're not paying
attention you're 120 to 180 210
all the time
I don't feel good above 120. I don't
feel as good but because I live my life
between 65 and 85 with the occasional
like Spike to a hundred it's like dude I
feel awesome and then it which just
feels normal by the way but then I'll be
like God I feel weird why do I feel so
weird beep 133 I'm like yep because I
ate a bowl of ice cream or whatever
something now that I track it and can
correlate that feeling to what I've
eaten I'm like do I really want to eat
that thing and so you get into that with
your money and your lifestyle and it's
like when you gamify saving money and
you're like I know what it feels like at
the end of this month when I bought you
know a bunch of meals out or I bought
myself clothes the last you know three
or four days of the month were sweaty
like I did not feel good I was stressed
I used to live like this legitimately
there was a time in my life if you've
ever heard me tell the story that I took
myself from scrounging in the couch
cushions to find enough change to put
gas in my car okay in that period I
would have to decide what Bill am I
going to pay this month because I
couldn't pay them all so it was like
okay I'm gonna skip electricity this
month because I know I get a past due
notice and as long as I then pay that
past due notice they're not going to
turn me off so you can constantly be
like a month behind on different things
and so I would just go okay these bills
get paid this month then I'll pay these
bills next month and I'll go back to
these bills and so that is not a good
feeling and so as you go through that
and track okay I see when I spend my
money on this I don't feel good when I
save my money over here at the end of
the month I still have everything I need
my stress levels are going down so
getting that correlation between oh when
I eat this way I feel this way you start
to carry that over and then if people
are willing to really trans form their
physique there is not a single thing
more powerful if you want to be
successful if you want to get rich all
of it change your body first it does
something to your mind it forces you to
develop discipline it forces you to
develop resilience because you have to
push through the pain and keep doing
that thing you don't want to do and it
works and then on top of that I
guarantee at some point they're going to
find the biologically embedded
subroutine that tells you to feel good
or bad based on the state of your body
and so if you are strong and you look
good in the mirror you will have a
subroutine in your brain that's like
yeah you have it's a form of self-worth
this is exactly how people get obsessed
with it because it feels innately good
if you do what I'm telling you as
somebody that used to walk around with a
six-pack and it's never too far from it
now uh when you lift up your shirt and
you see a six-pack you feel some kind of
way
even now because now I'm less focused on
the six-pack but more just making sure
that I maintain a you know slightly
bubbly physique bodybuilders is going to
laugh at me for thinking I have one but
you know in my own reduced uh amount I
do and so when I'm working out in the
gym I'll I feel differently about myself
based on the because I always this
people are going to be weirded out by
this but I work out in the dark but I
can see my shape in the gym and when my
shape looks right in the mirror I'm like
yeah it makes me feel some kind of way
about myself and people totally
discredit that to their detriment get
control of your body prove yourself that
you can do it get that discipline go
push through the pain see the tangible
results and then apply that to every
area of your life and then just one last
follow-up on this is uh getting your
body in good shape is you talk a lot
about influence inflammation in your
health content do you ever see the
parallel between inflammatory in your
body and inflammation in the economy
like wealth as well like do you see any
parallels I have never thought about
that George let's think is there a
parallel in the economy that is like
inflammation here's the first thing that
comes to mind when you have inflammation
in the body you have an over-reactive
system
so the system has a real threat it
really does need to deal with it but
then it goes Haywire so we all learned
about that with covid in the cytokine
storm so most people in the early days
died of covid not because they couldn't
kill the germ but because they had such
an inflammatory response that the body's
defense mechanism was like yo
everybody's an intruder everybody out
they were just slaying and killing left
right and center and so they just ended
up killing themselves right literally
the body tearing itself apart and when
you look at either Euphoria or Panic
that's exactly what happens if people
were in the situation that I'm in forget
scale right percentage of
access to Capital deployed in what way
so I've got roughly call it 20 of my
income tied up in some long-term way
right then I've got say 60 that's just
like yo bro you're good and then 20
that's
um being pumped into building something
high risk high high high risk okay so
it's like cool the 20 I wish it were up
that'd be amazing I'd be super pumped
but it's not but I've still got the 60
percent that runs my engine that's word
so if I lost the 20 over here because I
invested it in something long term and
it's down and so now I need to leave it
and be patient for 10 years right it's
probably going to come back around but
not for 10 years long ass time and then
the 20 over here I just outright lose
because it was ultra high risk and I
fail so now effectively I've lost 40
percent of my net worth I sell 60 so I
can run my life do all the things that I
want to do so so as Ethan Bitcoin are
going all over the place one as etha's
going up I'm not just investing
investing investing more I had a number
and when I hit the number I stopped
investing and like well I was kind of
sad because it was like oh numbers keep
them going up but I was like I've hit
the amount that I'm willing to deploy
and I did that dollar cost averaging
right so over like 18 months or whatever
and so I was like cool that's all that
I'm going to buy that's as much as I'm
comfortable investing in all of that
same thing with real estate and all that
stuff I'm not going to keep buying I hit
a number and then I stop
so for me all that crazy volatility up
and down sometimes I laugh because it's
so crazy I just can't believe it like oh
my god when it was up it's like it's up
another 30 you're like this this is
insane and then it was down 70 percent
80 same thing equilibrium right and
that's where I want to see people live
so that you're not reacting like the you
know inflammatory response and you're
going crazy it's like you want to be
even Keel you want to deal with the
issue so if there's a change in your
thesis you want to address it reallocate
move on but you don't want to be
panicking freaking out you never want to
do an investment that's going to make
you cry if it goes wrong which is why
every person that I think is Saints has
never invest more than you're willing to
lose because you never know it could all
go wrong right and you need to be very
very open to that and when you think
this time is different it can't go wrong
like I won't throw this person under the
bus because this person really is bright
and people really should listen to a lot
of what they say you shouldn't listen to
all of what anybody says
and I remember this was maybe two years
ago they were like I don't know I think
maybe the economy is different this time
and maybe the world is so intertwined
that the economies will never uh be able
to have these huge drops again and I
remember like if you guys have ever been
on Reddit and the guy with his head
that's like you know receding out to
here I was like brah uh no it is never
different they nothing repeats exactly
but it Rhymes so closely like it's never
different this time you've got to be
incredibly careful things are going to
go up and they're going to go down and
now the crazy thing is that was only 24
months ago and we're already talking
about a world that's completely
decoupling so things change in fact if I
could give you a buddhist-esque idea
brought to me anyway by Phil Jackson
whether he's ripping it off from the
Buddhist I don't know but he said things
come together Things Fall Apart that is
true of companies friendships marriages
nation states currencies everything
it comes together for a while and then
it falls apart and anytime you're
investing or building or whatever if you
think it's forever you're wrong even
impact Theory there's nothing that we've
done that's forever there's nothing
Disney's done that's forever most
companies Come and Go Disney's only what
a hundred and a hundred years literally
next year they'll be 100 years old in
the long Arc of human history that's
nothing there are trees older than that
there are turtles older than that so
it's like when you're not even as old as
some turtles like you just you're not
really you haven't done anything yet bro
you know what I mean so it's like and
trust me I put myself in that camp so
recognizing things come together Things
Fall Apart you have to be very
thoughtful I want to dive into something
a little bit more personal and then
expand it into something that will
affect kind of everyone and kind of get
your take on all of it so we're talking
about inflammation we're talking about
inflation we're talking about all these
things and you say you know we'll always
see this again so for me in my early
earning years it's the first time I feel
like I'm living through a high inflation
type of time I don't know if you've been
through that before but now I'm going to
be curious about am I thinking too much
about inflation or am I not thinking
enough because there is a big part of me
that worries about people you know if
inflation is seven percent which I think
Shadow stats is more like 10 15 plus if
you haven't made that in a raise your
person in power has gotten cut by that
so I'm like how much should I be worried
about that because that compounds over
time right so that's that in my stage
versus maybe you've gone through this or
now that you're in you know your stage
of wealth and everything how are you
thinking about that so one how should
younger people or people who are just
entering the field be thinking about
that and then how are you kind of
thinking about that okay so the only
thing that should scare everyone is
inflation in inflation was the thing
that made me realize I had to take
investing seriously because I was like
look I'm Richmond I'm perfectly happy to
just have my money in Fort Knox and not
think about it and when I need to make a
withdrawal to live my life I will and
that's that and I love the idea of never
having to think about the the money just
put in a savings account and be done and
I'm happy to you know just okay that's
how much I have that's how long I expect
to live and you just spend that amount
of money and all's well and then I
realized oh wait a second even when
inflation is under control that's two
percent two percent compounding so it's
two percent compounding you can run the
math on that it gets devastating very
fast something like in 30 years your
purchasing power is cut in half at two
percent
so I was like whoa so that was really
distressing and if it really is 7 15 now
all of a sudden it's your cut in half in
five years
so I was like wow I really can't ignore
this so that's when I realized okay I've
got to go learn about investing so that
I can be more intelligent about it and
so in all of that people need to think
about it now I will say be thoughtful
enough to realize that unless the
currency hyperinflates at which point it
really becomes worthless and that does
happen and it happens more frequently
than people would like to believe that
inflation tends to go up and down and so
we're already seeing this right the fed
you want to talk conspiracy theory the
FED has the ability to pull levers that
wildly impact the inflation rate now
because the FED knows that nobody pays
attention to what they're doing except
the very small Cadre of people who can
scream as loud as they want nobody
listens they will tell you exactly what
they're doing and the chairman of the
FED said hey we're going to over correct
because and I quote
I have medicine I think he said for
dealing with a broken bone meaning I'm
going to break the back of the economy
but I have a way to deal with that
but I don't have a way to deal with
inflation so I've got to yank this thing
so hard that inflation goes down so much
that we snap the back of the economy but
don't worry we know how to inject
stimulus back into that and grow people
because let me tell you if we had
started all of this in a seven percent
environment right then it's like oh you
just cut the percentage and now the
economy is stimulated everybody's happy
businesses invest like crazy and get
cheaper money boom Roaring 20s
everybody's excited
but when you have high inflation people
are freaking out oh my God what do we do
and so we were at uh zero percent
interest rate which was causing
everybody to spend money like crazy town
he had to like throw the numbers into
the trees to break the back of the
economy
to get it to slow down
and then he knows ah cool now I've given
myself the ability to stimulate the
economy by bringing them back down but
that's manipulation it's crazy and so
there are some people that are up in
arms they're just like leave it alone
when something goes bad Let It Go bad
like what is everybody saying about FTX
right now it sucks my heart goes out to
anybody that lost money but it needed to
happen this is all fake anyway you gotta
let it burn away the detritus let people
who were gambling get washed out and
even though it's going to set us back
years will ultimately be better for it
right once it becomes impossible to undo
that's what everybody says
and what the people the proponents of
saying just let the market do what the
market does their whole point is yeah
it's going to hurt but it will
re-regulate itself very quickly and
people will rapidly see that oh if we
had just left it alone it will
self-correct there and I don't we're now
at the edge of my understanding to be
clear but there is a moment I think it
was the new deal
so they were trying to use the New Deal
to simulate the economy to get us out of
the Great Depression and some economists
say that that caused the depression that
we were already showing signs of coming
out of it like two or three years in and
that that may have continued the Great
Depression on for years like four years
longer than it would have if we had just
left it alone now we're at the edge of
my understanding I don't know if that's
true I'm simply repeating a headline but
it's interesting that credible
economists say hey if they had just left
it alone the market will recorrect the
problem is we don't want to see people
suffer and So to avoid people suffering
we start playing with these levers
trying to
fix things as we go but you get these
wild swings now I'm going to tell an
interesting story so there is this I
don't know to call it a documentary or
what but as you guys know in airplanes
they have a black box recorder and
there's this like play that they filmed
like kind of a you're filming actors on
stage but you're filming it and they're
they're reenacting the exact words from
the black box so they're taking the
transcripts and doing it exactly and one
of the flights that they reenact was
this flight where a guy brings his kids
into the cockpit this is this is a a
commercial airliner so there's like 200
people on board brings this kid into the
cockpit and the guy doesn't realize with
the Kid's Foot or something bumps
autopilot so it takes the thing off
autopilot but he thinks it's on
autopilot now the thing that you would
do if you have autopilot is like you
would try to steer or whatever and then
autopilot realizes in it it's moves
things out and because he didn't know
the autopilot had come off he was like
doing these big moves and it was like
whipping the plane from side to side and
he could not understand why that was
happening and you hear him go not again
because it was over correcting from one
side to the other from one side to the
other and then they crashed and
everybody dies and it's like it's
tempting to think that doing these big
moves is the right thing but you can
tear the plane apart by that kind of
whip lash movement so that's the thing
that makes me as the lay person and
nobody should take Economic Policy off
of me but I do worry about that big
Whiplash now I don't think that they
should probably take their hands
completely off the wheel I think that
they're we're at the edge of my
understanding again there are probably
things here's what's interesting my
knowledge makes predictions and some of
those predictions are if there were no
hands on the wheels all hell would break
loose
for what period of time I don't know
maybe 10 years and then everything would
be great but my fear over what happens
in that 10-year period wait now it could
just be that I don't know enough maybe
or it could be that it just you need
some governance and again I want to dive
a little bit deeper here so now I'm
learning you know what the FED does how
they're kind of manipulating the economy
but as far as I know I can't elect the
FED I can't tell them what to do so now
again back to you know some of these
people are in different stages of their
lives like what with this knowledge now
you know for me I might be hedging
through different stuff it seems like
you know your portfolio split seems like
you have some safe buckets you have some
like risky buckets you have some things
you control
um is there something that you can
recommend everybody or is it something
that's so like just individual they
would have to all do their own research
and figure out yeah I mean of course
like with all the caveats but the the
one thing I would say is you need to
have a Year's worth of savings liquid
immediately available to you one of the
best ways to do that is probably Lee
government bonds because the U.S
government will back it and say we're at
least going to match your
um your principle so we may not be able
to make good on the interest that we
promised but we're going to guarantee
that your principal's back you can do
those very short terms say a month and
then you can cycle your money in and out
of that so sometimes you'll get at least
a little bit of yield other times you
won't but at least your money is more or
less being protected now if inflation is
higher than whatever yield you can get
you are technically losing purchasing
power but at least the number in your
bank is the same so that's one way to
keep the money that you need access to
your life immediately available to you
then I would invest in index funds
whatever you're comfortable investing I
would do it in a totally hands-off
passive way your dollar cost averaging
in whatever amount you're willing to do
and then I would take some amount that's
we'll call it play money where maybe
you're going to do higher risk and
Investments you're going to pick some
stocks because it's fun for you you're
going to invest in your friend's bar
whatever all things that if it goes to
zero you're completely comfortable
so that would be roughly how I would
think about it you've got the long-term
really simple tried and true method of
investing then you've got uh more
speculative dollars that are fun but
that's probably going to be five ten
percent of your investable dollars and
then if you
um want to buy a house would be the only
last thing and I would say remember that
buying a house is not a great way to
invest unless you own it but you don't
live in it and you let somebody else
live in it and they pay you more than
you pay for interest
uh depreciation
um the cost of the
um the government charges you every year
property tax thank you so if you're all
in fixes repairs if after that you're
still making money cool that can be a
good investment but if you own the house
and you're living in it basically what
you're doing is paying a lot of money to
keep up with inflation so it's forcing
you to invest that money so that you
know I'm gonna have whatever this house
is worth and houses tend to keep up with
inflation so it's like I know that I
have this quote unquote Nest Egg that's
going to match inflation that I can
either leave to my kids or whatever but
the thought that that is money that
you've made so let's say you bought the
house for a million dollars and then you
know 30 years from now it sells for
seven million dollars you didn't
actually seven extra money you probably
would have made a lot more money by
investing that million dollars into the
stock market into an index fund but if
you're going to live in it make the
memories and all that good stuff then
wonderful so be it but it's basically
just a mechanism forcing you to keep up
with inflation but it's going to cost
you a lot to keep up with inflation so
for somebody who might be a little older
like in their 50s or 60s what advice
would you give to them if they're
worried about not having enough money to
retire keep making money so you're going
to need to start investing right away
but again
you're going to take less risk and the
thing is I haven't talked about higher
risk albeit still somewhat cautious
investing
so most young people are going to have
if they're working with an advisor are
going to have their money spread across
the really basic uh things that I'm
talking about in Index Fund but then
they might also do growth Market
investing Emerging Market investing
things that have higher upside bit
higher risk they might start doing
corporate bonds the company goes out of
business you're out of luck but they
might pay significantly higher interest
rates so they might be doing some of
that they might be doing which I don't
understand well enough so I can't advise
people up or down a lot of people make a
lot of money here but this is also when
you hear about people committing suicide
it's almost always that they did
something with Futures options calls
where I forget which one of those but
one of them has an infinite downside so
you could end up losing more money than
you have and that's where people get
into trouble because they go from oh my
God I'm up a hundred thousand dollars to
I'm down five hundred thousand dollars
and now I'll never be able to make that
back and so that's where it gets very
very scary because it's very much like
gambling but anyway they might have
those more risky stock market government
approved ways of what from where I'm
sitting is just gambling and so they're
in there doing government approved
gambling they get themselves in a lot of
trouble but let's say that they've got a
portfolio that has some of that in it
the first thing I would say is if you're
in your 50s or 60s you want to start
getting out of that riskier stuff
because if you take a loss you don't
have time to make it back so we're going
to be getting into things that are less
risky that we're going to be able to
just map out so if we know that our
money is going to double every seven
years then it's like okay you're 60. the
speaking from a perspective of an
Actuarial Table you're going to live to
78. cool so you got several almost three
doublings in that time so how much do we
have how much can we afford to shove in
there my mom didn't retire until she was
like 72 or something like that so it's
like if you're able to retire at 65
don't right if you need the money now
just keep pumping money as much as you
can possibly bear during those years you
should still be high functioning I
expect to be high functioning into my
80s you need to take care of yourself
but if you're taking care of your body
and your cognition you should be high
functioning well into your 80s I get it
if you don't want to work but imagine if
you're passionate I don't plan to retire
I plan to work until
right because I love what I do and so it
doesn't make sense I don't want to
retire now I'm in a position where I
could retire any second but because I
don't want to and I control whether I do
it's a great place so anyway you're
going to be making money doing something
that you care about you're going to be
putting as much money as you possibly
can into your retirement fund you're
setting aside any of the but it should
have been different don't waste time on
that I get it you could lament that
mourn that all of that it's not going to
help so we're going to Sock away as much
money as humanly possible knowing that
we're going to double every seven years
and now we're just going to run the math
so so if it doubles every seven years
and I'm 60 and I want to get to that
third doubling that's 81. cool we know
it is what it is or nope I only needed
to double once rad then you're only
going to be 67. so it all comes down to
how much do you have already hopefully
you're not starting from Dollar zero so
if we have some money in there already
you're going to take X strategy it
expects to yield X over time
maybe in seven years you know the
volatility is so weird that in the seven
year span it didn't double but in the
14-year period it has you've done the
two doublings so it's like people have
to remember it's on average so be very
thoughtful about that but if we go 14
years so now you're 74 cool maybe at
that point you've got enough to retire
or maybe I mean math math is math so the
math is going to say what the math says
and if your your current job not getting
enough to put money in what are you
doing to make sure that you can make
more money so you can invest more money
doing a side hustle getting better
skills in your current job and this is
the one place I am deeply compassionate
towards people but I have no compassion
for somebody who doesn't want to improve
their skill set so you can improve your
skill set at any age you can negotiate a
better salary at any age this all comes
down to are you able to deliver value I
don't care if you're 60 I don't care if
you're 70. if you're crushing it you're
the most valuable person in the company
word and let me tell you right now don't
think for one second I'm not going to
outperform all you whippersnappers when
I'm 70 right because all my knowledge is
going to be stacking and I'm going hard
I've got energy for days so that's where
I need people to to really like man or
woman up get tough get after it I really
love that message because again
I can come from a place of fear or I can
see an opportunity here again I can see
the inflation maybe even stock Glacier
because we're heading into recession and
it's like stocks are down lots of things
are down uh while at the same time all
my purchasing power is inflating away
but I can use that again to fire under
my ass to be like okay I need to get
skills that can out compound the seven
percent or whatever and then this is
opportunity where things are down which
means I can buy these things and if it
ever reverses it's actually a great
opportunity to do that so I really like
meaning now you're buying things on
discount exactly and again I think you
touch on a really great point about
actually again focusing on the skill set
um because some people will have the
year saving and maybe they can like dump
it into the stock market and all that
but I think for a lot of people living
the paycheck to paycheck life seems like
they can buy less and less every single
month if they just focus on again what
are the where can they learn these
things what do they have in natural
Affinity towards that has a Marketplace
that is open to Value
um I think for me that gives a lot of
Hope of just like okay this is where we
can focus on and have control over so
yeah I mean this is why they say that
more millionaires are made in a
depression than any other time in
history and the reason is hiding in that
depression is the next Amazon where the
stock is hyper undervalued and people
can come in and pick it up I forget I
think it was Amazon stock dropped to
like seven dollars a share or something
like that yeah and so Amazon still goes
on to be Amazon so if when Amazon was
seven dollars a share you bought seven
thousand dollars worth you're laughing
all the way to the bank because it's
that then skyrockets and becomes one of
the most valuable stocks on planet Earth
it's like you've really got something
but if you were trying to buy it when it
was a hundred dollars spending seven
thousand dollars to get you a lot less a
lot less like 10 times less more than 10
times less so it's a really big
difference but this is why they say be
fearful when other people are being
greedy and be greedy when other people
people are being fearful which by the
way is just another way of saying Buy
Low and sell high it's low because
people don't think it's going to be
anything and it's high because they're
convinced that it's going to be and odds
are then not odds are at that point then
that the reality of that has already
factored into the price because the
people are right and it is going to go
up that's already factored into the
price so you have to bet against the
consensus and be right that's where this
gets hard so how do you get good enough
where you can make the counter-intuitive
bet that nobody else sees and you end up
being right and that's why Euphoria is
so dangerous because when everybody's
like yeah it's already built into the
price and Euphoria always breaks
it always breaks nobody can party
forever and if you can really
extrapolate that analogy and just think
about what it's like to be at a party
you're going it's fun you want it to
last forever and you're going ham and
you've had drinks and your friends are
there and you're talking and it's great
you've been dancing and then it's like
oh my high heels are kind of starting to
hurt right my feet are a bit sore like
oh man we've been dancing the song for a
long time like I just kind of you know I
want to chill like this is so fun I
really did have a great time but it's
like now I want to get off the dance
floor that's natural like you can only
sustain that fever pitch for so long and
knowing that the number literally can't
go up forever that even if every dollar
went into one asset class over uh you
know 18 month period even then it still
hits the top and so somebody bought at
the top and then everybody realizes oh
wait there's nowhere else to go and so
now you get people that are like wait I
need liquidity there's no bigger fool as
they say that's going to come in at a
higher dollar amount and so now you get
into all the pump and dump schemes where
people like no I just need a little
burst so that I can get out so they do
that and so you see what they call
Chopping where the trend line is just
chopping it's just people trying to wait
to that local high to get out and then
it drops again because everybody's
selling and then people try to build it
back up so that they can get out again
and it drops
I mean all this stuff is like hyper
predictable so and by the way that's
never going to happen not all things are
going to suck into one resource so the
party does end voluntarily at some point
and if people don't recognize that oh
this is going to stop being fun people
are going to start backing out that's
going to cause it to collapse
then that's how so many people get
themselves in trouble so you have to be
very cognizant of where this all goes
the music is going to stop talking about
like the Amazon stock uh being like
undervalued what opportunities do you
see that are being undervalued like the
Amazon stock or a skill set like
learning to program
I'm not the guy that's going to be able
to give you what is undervalued right
now because I do not consider myself a
talented investor so all I will say is
that going to if you're a builder you
want to figure out what is an
underserved problem so learning to code
is about figuring out what's going to be
that next skill that people really need
so what is a problem that the world
faces and who is going what is the
problem that the world faces that the
world recognizes it faces wants a
solution and considers that solution
very valuable and so that's why you want
to get there so we all know that more
and more things are going to be written
with code and so learning to code is
going to continue to be a very valuable
skill but you don't want to be a
mediocre coder there's going to be a lot
of people doing it so getting into that
now the area that I think people should
be learning the most about is AI in no
uncertain terms how do I as an artist a
copywriter a marketer whatever how do I
work with AI because I don't think AI is
going to replace the Strategic creative
thinker it's going to replace the person
that sort of manually doing things so
it's going to make everything that much
easier so imagine if instead of like for
instance let's say that I want to be a
songwriter
but I'm not good with Beats I don't know
the technical knobs or how to go find a
new sound effect and instead and mark my
words this what I'm about to describe
while it doesn't exist today it will
where you can type in give me something
that sounds like a metal stick hitting
uh an empty drum
a bigger drum bong but higher pitched
right and you just keep describing it
until you get the sound that you want
you don't have to walk around like
Charlie puth is doing now opening a door
does this squeak in the way that I want
it to squeak tap it with this that and
the other which is already brilliant and
amazing and he's going to then put it
into Pro Tools or whatever and edit it
which is already extraordinary you're
going to be able to do it through
prompts man it's gonna be crazy so most
people get emotionally shut down by that
because they built their career on like
but I'm the one that knows what to tap
on and I'm the one that understands all
the secrets and Pro Tools and how to do
that never invest like that be the
person that is excited about the
Innovation to make things that were hard
easier so that you can push what you do
up to a higher level and get into really
more and more interesting pieces of this
so AI to me is the name of the game and
2022 was the year that it became real
and So for anybody wondering like oh if
we had that threshold moment absolutely
it happened now at impact Theory we have
already released
imagery that contains AI generated
elements people would not be able to
pick out which is which we will continue
to do it more we have backgrounds and
videos and stuff that have been made by
AI it's really extraordinary what you
can generate with AI already right now
today in commercial applications what is
going to be in five or ten years will be
bananas I have a question around like
being rich and being wealthy so do you
feel like there's a difference and at
what point of your life do you feel like
you've got rich and then at what point
did you feel like you got wealthy
it's really interesting so the classic
answer to that question is rich is when
you've made enough money that if you
spend your principal you're going to be
able to live the way that you want to
live wealthy is where you can live your
lifestyle on the interest of the money
that you have so that it's generational
wealth you'll be able to continue to
pass on the capital and if they're smart
they'll keep living only off of the
interest which means hey when you have a
good year you're living Rich when you
have a bad year you're not but the
capital you preserve your Capital as
they say so that bulk amount that's
kicking off the interest never changes
that's the classic definition now I
would say there's a wiser way to look at
it with which is that rich is about
money and wealthy is about mindset and
when you understand you can have all the
money in the world and still feel poor
because it's never enough or you can
have very little money but realize that
money can't do the one thing that people
really care about which is give you a
sense of fulfillment fulfillment has a
recipe maybe a better way to say it than
a math formula it has a recipe there are
elements and if those elements are in
your life then you're going to be A-Okay
and they go like this you want to be
work working really hard for something
just that's the way the human mind works
if you're not working really hard you'll
never feel good about yourself so you're
working really hard to acquire a set of
skills that allow you to do something
for the group that uplifts them and
yourself and then the one thing I will
add to that is there better be somebody
in that group that you love and care
about on an interpersonal relationship
level if you have that life will always
be worth living and if you don't it
won't no matter how much money you make
so there's just these really intricate
patterns that run in our brains that
make us feel some kind of way now Money
Matters money's really powerful and it
does something incredibly useful it
facilitates so money lets you build the
things you want to build create the
things you that you want to create and
so we all know that money is
extraordinarily useful which is why
people will always chase money but
people think that money is going to make
them feel better about themselves give
them fulfillment and it can't it's just
that's not a thing that money can
contribute to be Beyond giving you the
money to build the thing that gives you
meaning and purpose sure so if that
money is necessary to create something
that allows you to use your skill set to
contribute to the group then it's useful
right it's exactly what money does for
me now it's letting me build impact
Theory which is the thing that allows me
to contribute in the way I want to
contribute so it's powerful in that way
but it is the contribution that makes me
feel the way that I want to feel so you
have to be thoughtful about that but
those are the two sort of one is a
little bit woo-woo and then the other is
very concrete so I'll let you pick which
one you prefer so when you first started
Quest did you have any idea that it
would get to where it is now and is
there anything that you would have done
differently knowing what you don't know
I knew it would get where it got that
was the whole point of starting the
company but we didn't think it would get
there that fast so that really was a
rocket ship and is proof that what
you're looking for is the right product
at the right time with the right
marketing and if you're missing any of
those elements you're not going to get
there and so I get asked a lot like oh
my God would you guys do a quest I'm
like I will tell you literally day by
day it's not going to work now because
now the world has reacted to what we did
and so it seems commonplace in fact if I
walk people through what we did be like
bro that's so mid like how on Earth did
that work but it wasn't mid when we did
it it was revolutionary but it worked so
well everyone started doing it so now
it's just table Stakes if you're not a
killer at social media if you don't have
a protein bar that's actually good for
your health if you don't Market it
around food if you don't have social
media marketing that reflects the user
base if you're not building Community
it's never going to work but when you do
all of that and nobody's done it before
it's like oh my God this is crazy and it
was explosive so if we were to try to
launch Quest now it wouldn't work
because somebody already did it so you
have to get that timing right product
right marketing right it's all got to be
right right right so that's why it
worked what would I do differently now
well now I would have to find that angle
where we're doing something that other
people aren't doing the big thing that
we're leaning into now is going to tie
some strings together that we had so one
understanding that your brand has to
have a face and a voice so that people
know what you stand for that's a big
part of it I actually tried to be
invisible at Quest wasn't until the last
like 10 months that I was at Quest that
I stepped in front of the camera so for
the longest time we did what we call
mirror marketing then I realized there
was a shift and I was like cool gen Z
even Millennials to a lesser degree but
they both want to know what does the
company stand for who are you what are
you all about they want visibility
another thing that I would do is the way
that we Market has changed completely so
the marketing needs to not only add
value but it needs to be entertaining in
some way and then working with
influencers is way more important now
than it used to be but working with them
in a way that makes an ad that I'm like
word thank you for sending me that ad
like shout out to cap cut cap cut their
their whole ad I didn't even realize
they were ads at first because they were
just tutorials they're just like hey let
me show you how I did this really cool
thing and I was like yo teach me how to
do that that's so sick and then like 30
videos in I was like oh my God these are
all ads for cap cut so but now they've
got me talking about it because I was
like that was so dope that I actually
want cap cut ads in my feed because I
want to know those tutorials and I keep
sharing them with the team to be like yo
did you know that you can do this you
know you can do this hey here's a really
cool way super dope trends that we could
be using so that is like we tried to be
that with like recipes and stuff at the
beginning but we didn't know how to do
it where it was like I'm actually
showing up on your interest graph feed
that's another thing we were social
graph back then so interest graphy need
working with influencers for them to
create content in their native style
that's super entertaining where even
though it's an ad people like yo give me
more give me more give me more
so some of it is like a nuanced twist
and then some of it is just very very
different well guys those are wonderful
questions I hope that helped all of you
guys there are many rabbit holes we
could go down be sure to drop in the
comments if there was a rabbit hole in
there that you want to be hearing more
on we can do another video if you
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