People talk a lot about passive income.

This

>> is not a thing. Look, there's two ways

to get wealthier, and passive income is

not part of that equation, but what's

really important for people is how we

should spend money. Cuz I've written

about money and finance and investing

for 20 [music] years, and I can tell you

the correlation between how much you

spend and how happy you are. It can

exist, but it is not as simple as you

think. Morgan Hel is the legendary

financial guru,

>> revealing that everything we've been

told about saving and spending money

>> could be our biggest downfall. [music]

And here's why. If you're unhappy with

your life, it is a very easy assumption

to make that if you had more money, a

bigger house, a better car, or whatever

it might be, things would be better. And

it's a lie we tell ourselves, of course,

because here's the truth. So much of

spending is a psychological itch that

you're trying to scratch. And that

manifests in so many different ways. For

example, life is a competition. It

doesn't matter how well I'm doing, it

matters how well I'm doing relative to

you. And the most [music] tangible way

to do that is through material stuff.

>> I was reading some funny stats. They say

that if you win the lottery, the

probability of your neighbor going

bankrupt [music] increases.

>> It's an amazing statistic. So, be

careful who you socialize with because

you're going to anchor to them as a

baseline level of success and happiness.

>> So, is it wrong to buy a Rolex?

>> Absolutely not. But when it's

controlling your personality, it's no

different than any other addiction where

it's forcing you to do things that you

otherwise don't want to do.

>> What about people who don't seem to

spend anything?

>> It's just as dangerous. [music] Like

there's something called post-traumatic

broke syndrome and I'll talk about that.

But I guarantee you that everyone can

spend money in a way it's going to make

them happier.

>> So if I wanted to make a framework to

know how to spend my money, where do I

start? But also based on everything you

know about money, if I want to get

complete financial freedom, what's the

five things that I should be thinking

about?

>> The first thing that I think that's most

important is

>> I see messages all the time in the

comment section that some of you didn't

realize you didn't subscribe. So, if you

could do me a favor and double check if

you're a subscriber to this channel,

that would be tremendously appreciated.

It's the simple, it's the free thing

that anybody that watches this show

frequently can do to help us here to

keep everything going in this show in

the trajectory it's on. So, please do

double check if you've subscribed and uh

thank you so much because a strange way

you are you're part of our history and

you're on this journey with us and I

appreciate you for that. So, yeah, thank

you [music]

Morgan.

Everybody loves to talk about investing.

They love to talk about saving money.

But I've never heard anybody emphasize

the importance of spending money. You've

written this book, The Art of Spending.

So, it begs the question, why would

someone like you who sells tens of

millions of copies of their books when

they write about something and really,

really cares about the art of writing

commit themselves to writing a book

about the art of spending? when you

couldn't when you could have written

anything that you wanted to and it would

have been a success.

>> So I've written about money and finance

and investing for 20 years and almost

never had I myself

said what is my spending philosophy? I

could tell you how I invest. I can tell

you how I save. I could tell you why I

do those things. If five years ago if

you said Morgan tell me your philosophy

about spending in your own life I'd be

like I I don't really know. And as I

looked into it, there are literally tens

of thousands of books on how to invest,

how to grow your money, how to get rich,

how to help your career. That top that

topic is endless. There is virtually no

book out there written about spending

money. And I think the reason why is

because we don't I think we intuitively

think nothing needs to be said because

the answer should be obvious. More is

better, fancier is better. That's the

end of the topic. But if you know

particularly wealthier people, I mean it

affects everybody, but particularly

wealthier people, you know, it's not

that simple. That the correlation

between how much you spend and how happy

you are, it it can exist. Everyone can

spend money in a way it's going to make

them happier, but it is not as simple as

you think. And as I started digging into

it in my own life of when have I been

envious of other people, of their

material possessions, why was I envious?

Why when have I been jealous? Why was I

jealous? What kind of spending made me

happy? What left me completely flat?

It's it's a much more complicated topic

than it seems at the surface. You know,

another title for the book could have

been the psychology of spending money

because that's what this is. So, to look

at the psychology of greed and envy and

social aspiration and like climbing the

social ladder, who you're trying to

impress, whether those people are paying

any attention to you, that's what this

book is. So for someone like me who

wants to improve my relationship with

spending, I guess the question, yeah, I

guess the qu first question is

understanding the art of spending money,

simple choices for a rich, what is it

going to do for me? How is it going to

make my life better to understand this?

Why why does it matter to the person

that's listening right now?

>> I think it is a very easy assumption to

make if you're unhappy with your life

that if you had more money, those

problems would go away.

>> Sometimes it can be true. It's not

automatically false. It's just easier to

assume that that's true than it actually

is. And so I guarantee you that every

single person listening to this right

now has some degree of that. If I had a

little bit more money, my problems would

go away. Even if they don't necessarily

know it or not. So much of spending is a

psychological exercise. There's an itch

that you're trying to scratch and that

manifests in so many different ways. And

so I've often thought of money, look, is

money the root of society, the core of

society? No. There's obviously a million

things more important than money, but I

do think it's the clearest window that

we can look through to try to figure out

what's going on in our own lives, in

other people's lives, in society. It

shows very starkly what people value,

what they're scared of, what they're

aspiring to become. There are many more

elements to the puzzle. Your health,

your friends, your family. We can go on

that forever. But money is a very clear

window that if you see how somebody

engages with money, you're like, "Oh, I

understand your insecurities. I

understand your aspirations. I

understand your self-confidence. I

understand what you think of other

people. But the point is that it's a

psychological itch. It It's not just I

want the nice car because nice cars are

better. There's a social signaling.

You're signaling to others. You're

signing to yourself. It's a trophy for

yourself of what you've overcome. The

more I dug into it, the more it was so

clear of like spending is not just on

material stuff. It's not just I want to

buy this car or this house or these

clothes or these jewelry because it's

nice. It's I'm trying to send a signal

to others or to myself of what I've

overcome. One of the ways I thought

about this in my own life was if I was

on a deserted island with maybe just

just me and and my family, nobody could

see how we were living. Nobody can see

your house, nobody can see your car,

nobody can see your clothes, nobody can

see your jewelry. How would I live? For

me, and I think most people in that

exercise, you immediately gravitate away

from status and towards utility. Like I

would not want a Lamborghini. I probably

want like a pickup truck, something that

has like more utility. If nobody could

see it, I would just want utility. I

would not want an enormous house. I

would want a house with a nice view

because I'm not trying to show off to

other people. I just want something that

is calming and and serene to myself. And

so once you start seeing the stark

difference between utility and status

once you once you force yourself to see

it, you're like, "Oh, it's everywhere."

>> Is something inherently wrong with

status? Is it wrong to buy a Rolex?

>> Absolutely not. Particularly at certain

points of your life.

>> Okay. So, when when is it good? When is

it bad? When is it indifferent? Like

indifferent?

>> I don't know. I don't know. It's hard to

say what's good and bad in terms of a

formula because everybody's different.

But I would say this.

>> My own personal desire to show off

materially

happened when I was in my late teens,

early 20s. And looking back, I didn't

know this then, but the reason why is

because I had nothing else to offer the

world. I had no intelligence. I had no

wisdom. I didn't know how to love

anyone. I had nothing else to offer

friends, family, spouses, whatever it

would be. And so the last remaining

lever if you're trying to get attention

and respect is well look I have no

intelligence to offer. I have no wisdom

to offer. Maybe people will admire me

for my car.

>> That was why I wanted it.

>> And now that I I hope

>> in a in I I hope to today 20 years later

I have a little bit more to offer to my

wife to my friends to my family to

employers and customers whatot then my

desire for those things has gone down.

Not to zero but it's gone down. There's

a great Warren Buffett quote where he

says, "Success in life is when the

people who you want to love you do love

you." And key to that is like you have

to ask the question like, "Who do you

want to love you?" And for a lot of

people, the quick knee-jerk reaction is

everybody. And so you want to have a

nice car, nice clothes, nice jewelry

because you think everyone's going to

stop and stare. When I drive this down

the road, people are going to be stop

and say, "Look at that guy. Look, look

at her. That's amaz

I admire them. I respect them. And by

and large, that is almost never true

because no one's thinking about you as

much as you are. They're not they're not

paying attention to your car or your

clothes or your house. They're busy

worrying about themselves.

>> Jimmy Carr, who I think you've had on

the show before. Is that right?

>> Love [clears throat] Jimmy Carr. He said

this a couple weeks ago. I heard it and

it was one of those I had to stop and

write it down because it was so

profound. He said, "In your 20s, people

worry about what other people think of

them. In your 30s, you say, "I don't

care what anybody thinks of me." And in

your 40s, you finally realize a truth,

which was nobody was thinking about you

the whole time. They were busy worrying

about themselves. And look, that's not

black and white. Of course, people think

about you and look at you and sometimes

judge you, but not nearly to the extent

that we think. And that was why I get

back to the exercise. If nobody was

watching, how would I live? The truth is

because virtually nobody is watching

except the people who I really love and

admire. and they're gonna admire me for

things that have nothing to do with the

kind of car that I drive or the clothes

that I wear.

>> What's the the evolutionary basis for

all of this stuff?

>> Life's a competition. It doesn't matter

how well I'm doing. It matters how well

I'm doing relative to you. It doesn't

matter how big my house is. If I'm

trying to signal, all that matters is my

house is bigger than yours. That's true

for all wealth. There's no such thing as

you are wealthy once you have x number

of dollars. That that does not exist.

Everything is relative to other people.

And the truth is like we live in a world

of such material abundance where the

majority of people listening this will

have some sort of shelter and a car and

and can buy can buy clothes and whatnot.

And because relative to a lot of

history, we live in material abundance.

The competition the arms race for bigger

nicer things is extraordinary. And it's

way more powerful and potent today than

it's ever been for two reasons. One is

social media. So I am now aware of the

homes that other people live in. the

cars that they drive, the clothes that

the vacations that they take. I'm now

aware of it in a way that we were not 15

years ago. The other thing is because

the internet has democratized

access to audience and attention. The

ability to become extremely rich is much

more powerful than it's ever been. It's

still rare, of course, but it's it's

easier today than it's ever been to

become very very wealthy, even if only a

small number of people are doing it

because your your potential customer

base is now the entire world. You know,

a 100 years ago, if I was a businessman,

my customer base was whoever lived in my

town.

>> Now, if you're a [clears throat]

businessman, your customer base can be

the entire world. And so, it's easier to

make a huge fortune. And because of

social media, once you make that

fortune, people are probably going to

know about it because a lot of those

people who become very rich are going to

say, "Look at how I'm living." And so,

you have this like trickle down

aspiration of everyone else being like,

"My definition of wealthy, if you're a

young person today,

>> a young person's definition of wealthy

might be a multi-billionaire with a

private jet and a private island." where

I think 80 years ago people's definition

of wealthy was a three-bedroom house and

one car and and a and and a happy

family. And so we live in a world where

like aspirations have inflated by such a

dramatic degree that the arms race of

spending just gets that much that much

higher. I think there's something in

this idea that you almost have to

develop the skill of disconnecting your

admiration from your aspirations if you

want to live a good life because so many

kids will like look up to you and say I

want to be like Morgan when I'm older um

because they admire what you've done but

the reality is they they're just seeing

the sort of shop window yeah

>> of your life and so I people do this

with Elon all the time

>> right and Elon has even said he's like

you might think you want to be me but

you you don't

>> and he the clip where he did that he

points his head and he's It's a it's a

tornado up here.

>> And I think it's true that for most

people who are extremely successful,

>> who are the ones that people tend to to

look up to, like the extreme outlier

successes, a lot of the reason they're

so successful financially and in their

career is because they've devoted every

second of their life to that career,

>> which most of the time comes at the

expense of everything else. So they are

very successful, made a lot of money,

and that came at the expense of their

health, their relationships,

relationships with their their spouses,

their children. So I make the point in

the book that of the top 10 richest men

in the world there are a cumulative 13

divorces among the top 10 richest people

and it's a small sample size like you

can't really you know say that that that

much with that but this is a group that

is almost universally admired

particularly among young men you know

Elon Musk Jeff Bezos Mark Zuckerberg how

how amazing would it be to have that

much money but if you dig into their

actual their the the whole life

>> not just their net worth not just the

house and the jet that they have but if

you look at holistically their entire

life, you're like, I don't know. It's

it's it's it's not that great. It's it's

one thing to admire someone if you can

pick bits and pieces. I want I want his

house and her car and his career and his

physique, but you can't pick bits and

pieces. You have to take the whole

thing. And once you take the whole

thing, you realize that like a lot of

the people who you may have been looking

up to either did not have a better life

than you did or it was just marginally

better in a way that was easy to

overlook. I had this conversation with a

girl in New York last week. I was at a

shoot, a client, like a brand shoot, and

she sat me down to interview me for Tik

Tok. And she said, um, she goes, "What

age did you become a millionaire?" And I

said, "About 24, 25." And she went, "Oh,

I'm 24, 25 now, and I'm not a

millionaire." And I remember saying to

her, I was like, "Yeah, but would you

would you take my trade?"

>> And I explained to her, I was like, "So,

I was lonely between the age of 18 and

roughly 20. I was working in call

centers. my parents wouldn't speak to

me. So I had no contact with my family

really um for through that period. And

then I started shoplifting at about 18

19 to feed myself. And my brother had

given me this big um sort of industrial

packet of oats. And what I had to do is

it's like powder. I mixed the powder

with water. And there's there's there's

a photo online I think from my previous

TED talk, my first one, where I was just

drinking this this powdered water. So I

said to her, I said and I was a

millionaire at 24. lonely, not speaking

to my family, drinking powder do

shoplifting, working night shifts in

multiple call centers, would you take

the trade? And she went, "No." Right?

>> She went, "Absolutely not." She wouldn't

take the trade. And I said, "So, you

can't you can't pick it apart because I

if you want to my outcome, you have to

take the path that I took. If you want

my specific outcome, and people don't

think about that, like one of the things

this podcast has actually taught me is

to think through the framework of

trade-offs."

>> Yeah.

>> So, think about everything as a

trade-off. Think of a Zmpeek as a

trade-off. There's a trade you're making

somewhere. And even, you know, when you

aspire, you admire people, if you admire

what we've done here, for example, think

about the trade-off. Like even with this

team, the team have been working here

every single day, including the weekends

from morning till night for the last 14

days here in New York. Every single day,

>> right?

>> Do you want to do you want to do you

want a podcast? Like, [laughter]

>> do you want the trade? And if you do,

fine. But just be informed about, as you

say, both sides of the trade. Another

Jimmy Carr quote that I love. He's a

profound individual. Not only is he

hilarious, he's very smart. The quote

is, "Everyone is jealous of what you've

got. Nobody's jealous of how you got

it."

>> Yeah.

>> And I think it's just so easy to

overlook. One of the things I write in

the book is what's called the reverse

obituary, which is it's a very good

helpful exercise to write down. It's

kind of morbid, but what do you want

your obituary to say? kind of a weird

thing, but for me, everyone's different,

but for me, I would want it to say

Morgan was a good father, a good

husband, a good friend, helped his

community, was a good worker. That's

what I would want it to say. Never in a

million years in that obituary would I

want it to say what my income was, how

big my house was, how many times I went

on vacation, how many horsepower my car

had. Like, it's ridiculous to think that

that's what it would [laughter] be. I

would want it. You instantly drift

towards the things that you know you're

actually you actually want in life. And

of course, it's going to be different

for everyone, but I I I found it a

helpful thing because you realize that

it would be completely absurd to put the

things that I might be chasing in my

life in my obituary. And so if in any

given day, in any given year, you're

like, I got to earn a higher income and

I want to buy a bigger house and a I got

to need a new car and all you see, they

came out with this watch. But at the end

of your life, you know, that's not going

to matter. What's going to matter is

were you a good spouse, a good parent, a

good worker, were you honest? Were you a

good friend? Were you [clears throat]

funny? That's you know that's what's

going to matter because that's what you

want in your obituary.

>> I think part of the reason people spend

in the way that they do as well is

linked to that which is sometimes that

behavior which is also linked to the

point about trauma at the start might

result in a savings addiction. I often

wonder this cuz you know when I was

younger I had this crazy spending

problem. And I've also seen people who

don't seem to spend anything and they're

just like hoarding capital. You talk

about this a bit in the book. Like what

>> is that equally bad behavior?

>> Yeah, I think it's equally bad because

both of them are the exact same thing

which is money's controlling you. Money

should be a tool that you use to become

a better version of yourself to become a

happier, more content version of

yourself. But when it's controlling your

personality, it's it's it's no different

than like any any other addiction where

you don't it's forcing you to do things

that you otherwise don't want to do. And

that can manifest on either end of the

side. Either people can't stop spending

or they cannot spend enough. A lot of

financial adviserss will tell you one of

the biggest problems that they have are

clients who have saved enough money for

retirement. Good job. You saved for 40

years. You maxed out your 401k. You did

everything you were supposed to. and now

you're 70 years old and you have enough

money to travel and play golf and you

won't you won't do it. And I think it's

because they become so accustomed to the

identity of I'm a saver. Every month I

save and every month my net worth goes

up and they cannot bring themselves into

switching gears and going in the other

direction. And for a lot of those

people, the money is in full control

over their identity. It's telling them

how to live, what to like, what to

aspire to, what to enjoy. the money is

totally in control of their personality

and and it's it's just as dangerous and

just as just as detrimental as you when

you were a teenager of I can't stop

spending. It's and both of those are in

are they the money is like playing the

marionette doll of your life. It's

telling you exactly what to do and when

to do it.

>> If I wanted to make a framework to know

how to spend my money where do I start?

Do I have to get clear on something? Do

I you know and I guess the other

question which is somewhat linked to

this is this overarching debate around

can money make you happy?

>> Right? But I'm trying to figure out like

where do I start because I I want to one

of the things I want to get out of today

is I want to have a a clearer framework

for how to spend my money.

>> Well, those two points that you just

brought up I think are very related. The

first on the point of can money make you

happier? The answer is yes, but there's

a there's a there's an asterisk next to

it that we need to get to. For years,

there was a big academic debate of does

more money make you happy? A lot of some

of the studies showed yes, clearly it

does. Others show studies showed no, it

really doesn't. And the academics, the

economists were like battling for

decades. It's kind of been cleared up in

the last just the last couple of years,

this last couple of decades with some

nuance, which is this. If you are

already an unhappy person, if you're

already anxious, if you're already

depressed, by and large, having more

money will not help you at least that

much. It might help you a little bit

around the margins. If you're if you

start as an unhappy, depressed, anxious

person. If you are already a happy,

content, joyful, laughing person, having

more money will give you a better life.

So in either direction, it's just

leveraging who you already were. It's

not going to change you that much. It's

just going to leverage who you already

were. Very similar to like they say this

about power. Like once you gain power in

politics or something, it just leverages

the personality that you already had.

>> Money is very much like that. And so

it's it's not a a a panacea in the sense

of like oh like if you're miserable like

if you had more money it's going to

clear up your problems. It can make some

of your problems a little bit easier to

deal with. But I mean think about it in

these stark terms. Let's say you are

overweight and unhappy. You hate your

job and you're recently divorced and

your kids won't talk to you but you live

in a mansion that has a Ferrari in the

driveway and you got all kinds of fancy

stuff. Is is is that a good life? If all

if everything else in your life sucked

and you woke up every morning going,

"Ah, I got to go to work today. I hate

my job. I can't stand my job. I'm I'm

lonely. I'm miserable. I'm overweight. I

can't sleep. I'm addicted to alcohol."

Whatever it might be. Of course, it's a

terrible life. The house and the car

don't matter at all. But you can flip

that around and say like, let's say you

live in a very modest middle class house

and you drive a a 10-year-old Honda

Civic, but you love your job. You love

your co-workers. You have a great

relationship with your spouse. Your kids

admire you. You have your friends over

for a barbecue every Friday night.

Materially, it's very modest. You have

what you need. You're not impoverished.

You're not homeless. You have the food

that you want and the shelter that you

want. But you would be an absolute

maniac to choose the miserable person in

the mansion versus the content, happy

person in the middle house. If your goal

is to live a good life, it's psychotic

to pick one of one over the other. I

felt this quite starkly recently because

I flew to Cape Town on my own. Um I've

only ever been there with my girlfriend

and with other friends and the first

time I've only been there a few times.

I've got a house there and it's a very

big house and the first time I came with

was with my family. Second time it's

with my girlfriend and my friends. This

time I came on my own

>> and I felt this deep existential feeling

waking up walking through that house

alone thinking [ __ ] me. Like it [snorts]

was so clear to me that the point of

such a such a thing is to fill it with

people and you say

>> yes that's what I I make this point in

the book of like the very simple

question will a big house make you

happier?

>> I think it will make you depressed if

it's empty [laughter]

>> because that's how I felt. I was like

I'd rather be in a studio apartment

alone than a big house on my own.

>> Right. I had a similar realization to

you a couple years ago when I took my my

my my family and I went to Maui for a

vacation and I love Maui. my favorite

place in the world. And now they have

kids. So I'm building sand castles with

my kids on the beach in Maui. And that I

remember thinking like this is this is a

10 out of 10. This is like this is peak

life for me. Building sand castles with

my kids, everyone's happy in the sun.

>> But then I had this realization of like

if that's a 10, playing with Legos at

home on the living room floor with my

kids is like a nine. Like it's really

close because the realization was what I

enjoy is like quality time with my kids.

And I think a lot of the reason that

people like vacate, like travel is not

because they like getting on an airplane

and flying around the world and being

jet-lagged and cramped into a small

hotel. What they like is uninterrupted

time away from work, away from all the

other stresses of everyday life. That's

what they actually enjoy. That's why

they like travel. It's not necessarily

the location. It's like what the

location is doing for you. So the

question of will a big house make you

happier? It will to the extent that it

makes it easier to have your friends and

family over

>> because your friends and family are the

ones who are actually making you happy.

>> And so the answer can be can will a nice

house make you happy? The answer can be

yes if you're using it for the right

reasons. There was this article in the

New York Times, this is probably 10 or

15 years ago and uh the article said two

things happened to Julia Roberts this

week. One, she won the Academy Award and

two, she found out her husband was

cheating on her. And so the column said,

"Pop quiz, did Julia Roberts have a good

week?" And it's like, you'd be a fool to

say yes. It was probably the worst week

of her life, I imagine.

>> Yeah.

>> Um, but what we see from the outside was

doled up in a beautiful dress, accepting

the highest honor of her career and

saying like, "Wow, that must be an

amazing." But it gets back to once you

see the full picture, you're like, "Nah,

it's not as easy as it seems."

>> You say on page 23 of your book, a quote

that I loved, show off the inside of

your house, not the outside.

>> Right.

because the inside of your house or what

your friends and your family are seeing.

>> Is there like a a hack here? Like is

there, you know, because you have all

these like internet commun communities

that come up with these like hacks,

these other ways to live. They they they

step outside of the matrix and they form

their own little their own little cult

that are like doing it differently and

not not abiding by the rules of the the

quote unquote matrix. I very much feel

like most of us are trapped in the

matrix. We're trapped in this like

status game competing against each

other, not not searching for happiness.

like what is the the hack here? How do I

get out the matrix and what does that

look like?

>> I think if there is a formula that I I

lay out in the book and I I make the

point that like there's there's no

formula for how to spend money. But if I

did try to make a formula for a pretty

good life and this extends way outside

of money, the formula for a pretty good

life is independence plus purpose. If

you want to say like how how can I be a

happy person? You need to be

independent. You need to be able to do

what you want to do when you want to do

it with whom you want to do it with. And

you need some kind of purpose that is

higher than yourself. And that could be

a million different things. It could be

friends, it could be family, it could be

career, it could be religion, whatever

it might be. I think it is very

difficult to imagine anyone having a

good life without those two things. If

your entire life and your schedule is

dictated by somebody else of you have to

go to this job that you don't like, you

have to have a long commute that you

don't like, you have to do this when you

don't want to do it, it's it's hard to

be happy. And if you don't have any kind

of purpose that you're doing it for,

it's difficult to be happy. And so the

idea that to me, the best thing to spend

money on is independence. And I view it

as purchasing. I I don't view it as

saving money. I view it as purchasing

independence. That's how I I view I view

like I'm buying independence when I

save. And so to me, the biggest thing

that I spend my money on, and this

sounds weird, but I is saving. And I

view that as buying independence. I view

that as every dollar that I save is a

little bit more independent than I was

before. It's a little bit of my future

that I now own and control. And if if

you're listening to this and you're

like, "Look, I'm not financially

independent. I have no I have no

possibility of being financially

independent." Independence exists on a

spectrum. And literally every dollar

that you save is a little bit more

independent than you were before. If you

have a $100 in the bank in savings, that

can make it so that if you were to lose

your job, you have a little bit more

flexibility for rent or groceries or

whatever it might be that you didn't

before. $1,000, $10,000, any amount that

you have is a little bit more

independent than you were before. And so

when you view

one of the cores of living a good life

as independence and any amount of saving

money will buy you independence, I think

that's a powerful observation for

people. And then the purpose part is

going to be different for everyone. For

me right now in my life, it's being a

good father. That's what I want my end

my identity to be. That's my

[clears throat] overarching goal in life

is to be a good dad. I I think the vast

majority of parents will tell you that

there was no greater joy, purpose than

watching their kids thrive. Can also

bring a lot of sorrow and a lot of

sleepless nights and a lot of anxiety

and a lot of worry that comes along with

it. But nothing that I've experienced or

any of the other parents that I know

would would say that anything in their

life has come before that that it's been

a great thing. So we got on this point

because the formula is independence plus

purpose. For me the purpose is being a

parent. That's not going to be true for

everyone.

>> But you're trading independence for

that.

>> I'm trading it's internal independence

that I'm giving up. I want to sacrifice

for my kids. I want to like loyalty to

people who deserve your loyalty is a

wonderful thing. Loyalty to people who

don't deserve your loyalty sucks. And so

if you are work, if you're giving your

loyalty to a company that doesn't

respect you, that sucks. That's

terrible. Loyalty to people who deserve

it is a very fulfilling thing. So my

kids deserve my loyalty.

>> How did they earn that loyalty?

[laughter]

>> Just by being my kids. And there's some

days where I feel like they they don't

appreciate it, [laughter] of course. But

I I think that tends to be true. People

get into problems when they are loyal to

people or organizations or political

affiliations who don't deserve the

loyalty. That's when it gets dangerous.

>> Do you think the promise of independence

and freedom has a secret hidden dark

trade-off that people don't talk about?

Because there's this culture right now

of like, you know, be your own boss and

stand on your own two feet. And when you

think about what makes humans happy, it

seems to be collective things. It seems

to be actually in your case, as you were

saying, dependence. Your kids depend on

you. In some ways, you depend on them.

All the things that seem to like having

my friends at my house made me happier

than being in the house alone, right?

But the nar the public narrative is all

about like optimizing for freedom,

whatever that means, and really more so

optimizing for independence, not

depending on someone else. But when you

look at the people that seem to be the

the most unhappy, they seem to be the

most independent,

>> right? because they're they if you

picture someone like living in a living

by themselves in the middle of Montana

with no one around them or whatever it

might be.

>> No family, no pets, freelance work on a

laptop on their own in a in a glass box

in Dubai. Um no no big obligations, not

not in a church.

>> But back to the formula, independence

plus purpose. Those people have no

purpose.

>> Oh yes.

>> And so I think it's I think yes,

everyone is going to be I'm I'm

dependent on my wife, my kids. But, you

know, there is dependency there, but I'm

I'm choosing I chose her as a spouse. I

chose to have kids. And so, I I still

did it on my terms. And so, you're never

going to be or I think you don't want to

be a 100% independent in the sense that

you don't rely on anyone and no one

relies on you because then you have no

purpose.

>> It's choosing who [clears throat] you

want. I think it's I think you're not

independent if you have to be loyal to a

job that you hate, but you have to have

it because it's the only job you got and

you and you have to do it and you're you

you have to pay this exorbitant rent on

an apartment that you don't even enjoy

that much. Like those are dependence on

things that you don't want, but like I

want to be dependent on my family

because that gives me purpose.

>> It's like the independence to make the

choice, I guess.

>> To make the choice of who you're going

to be dependent on, right?

>> Got you. And [clears throat] on this

earlier point, you were talking about

saving um and that you your favorite

form of spending is saving.

>> Yeah.

>> Someone's listening now, how much money

do you think they should at a minimum

have saved?

>> If you try to get technical about it, I

would say what are the odds that at some

point in your life, you're going to lose

your job and not be able to find another

job for six months. The odds are not bad

that that will happen to you at some

point. Not very comfortable to think

about. Maybe it's already happened to

you already, but the odds that at some

point that will happen are pretty good.

And therefore, if you were to say like,

look, a good measure of

some level of higherend independence,

not a low level of independence, but

like a a medium level of independence is

six is is I could keep myself going for

6 months. Now, for a lot of people,

that's a daunting task. And I it's okay.

You're probably not going to achieve

that when you're 18. Am I it's going to

take some savings to get there, but that

is a level at which you can exhale to a

degree that most people have never been

able to do before of like there's going

to be some bad stuff happening in your

life. It's going to be uncomfortable,

but it's going to be okay. And for for

for most people for most of history, it

was there's bad things going to happen

to you and you're not going to be okay.

It's going to be very traumatic. And and

one of the important things there is

when you lose that job, the ability to

go find a good job, even a better job

where you want, doing what you want with

the people who you like working with is

very important. If you don't have any

savings, you're going to have to by

default pick the very first job that you

can come across, even if it's a terrible

job in a location that you hate, doing

something you hate, working with people

you don't like. And so the flexibility

to give yourself time to find a job that

is a little bit easier and better for

you, that is the purpose of savings.

>> And that goes back to your point about

independence, which is you want to

building up those savings is building up

the independence or the freedom to make

a choice about who you work with,

>> right?

>> If the worst were to happen, you don't

have to necessarily go get a job at, you

know, some awful place,

>> some some terrible place. You talk about

jealousy in the book as well and um I

was reading [clears throat] some stats

that quite funny stats but they they say

that essentially that if you're if you

win the lottery the probability of your

neighbor going bankrupt increases.

[laughter]

>> It's an amazing statistic, right?

[gasps]

>> So what's what's happening [laughter]

there?

>> Well, you're looking at your neighbor

who won the lottery and your neighbors

probably bought a vacation house, bought

a new car, sending their kids to private

school, whatever it might be. and you

watching that are like, I need that for

myself. It's it's unfair that they have

it and I don't and I'm gonna go do any

reckless financial decision to get that.

So much of what we think is is normal.

Our definition of success is what other

people around us have. And so if you are

watching your neighbor live a better

life than you, then all a sudden your

definition of a good life is what

they're doing. And you will do some

reckless things to get it. I think

that's that's what happens. And so one

of the takeaways there is like be

careful who you socialize with because

you're going to anchor to them as a

baseline level of success and happiness.

Be very careful with what you do and who

you look up to and who you aspire to. I

grew up in Lake Tahoe, California. And

this was before tech money when it was

not a wealthy area. it is now because

all the tech money from San Francisco

came up. But Tahoe in the 90s and early

2000s was was just a out in the woods

and you know you could buy a house for

nothing and most people in town didn't

have any money. And then I went to

college in Los Angeles where there is a

lot of wealth, there are high

expectations and there are Lamborghinis

and Rolls-Royces and whatnot. And one of

my observations was people were happier

in Tahoe. And I think the reason why is

because the definition of success in

Tahoe back then was a two-bedroom house

and a pickup truck.

>> That was success. In Los Angeles, the

definition of success was a mansion and

a and a Bentley. And so it was it was

easier for people in Tahoe to be like,

I'm good. I I check the boxes. Like

look, I'm successful. Look at look at my

tiny little house and my beat up pickup

truck. That's success, right? And so

that was like be careful who you

socialize with because you're going to

anchor to their level of success. I have

a some graphs in front of you there. Um

I think one of them is the spectrum of

financial independence.

>> Yeah.

>> Could you explain to me what that is and

and how how that's useful to understand

and why that's useful to understand?

>> I think it's I had this friend uh 10 or

10 or 20 years ago and he said, "I don't

save any money because I don't see the

purpose. All I'd be able to save is a

hundred bucks a month and what's that

going to do for me?" And since I don't

think it's going to do anything for me,

I I might as well just go spend it. And

I remember thinking, no, no, that's like

$100 in savings or if you do it for a

year, $1,200 in savings is $1,200 more

independence than you had before. And

again, not if, but when you lose your

job or your car breaks down, you're

going to realize how unbelievably

valuable that money is. And it's not

savings, it's independence that it's

giving you. So the idea that

independence is on a spectrum. It is not

you either don't have to work or you

have to work. It's not that stark, but

most people think of it in those terms.

Why would I try to become independent if

I have no chance of not working?

>> And the simple way to view it is every

dollar that you save is a piece of your

future that you own, that you control,

that is yours. The flip side of that is

like every dollar of debt that you have

is a piece of your future that somebody

else controls. It's a it's a moment in

time in the future that is not yours. It

belongs to somebody else. And so I've

always viewed it on a spectrum. When I

was younger and much poorer, I was a big

saver. Even though like was I

independent? Like no, of course I had to

work. I had to work to pay my rent and

pay my groceries, of course. But I

viewed it as like every $20 that I

saved, every $50 that I saved put me in

a better position than I was before. And

looking back on it, I I don't think I

could have articulated that 20 years

ago, but it's what I felt. A lot of that

for me back then was coming from a place

of fear. I didn't have a lot of

self-confidence in myself, in my career.

So, I was like, I need to save to

prepare for when this all comes crashing

down. Mhm.

>> And even though it didn't come crashing

down, I'm so glad that I did it because

I' I've had a sense of financial

security and I've had a sense of

independence financially since I was in

my early 20s. Not because I had saved a

ton, I hadn't, but any amount that I

saved, I I viewed as like the cushion

that that gave me a much higher sense of

confidence that if or when things go

wrong, I'm not going to be flailing. I'm

gonna have some cushion to fall back on.

And what is this this spectrum? Uh what

are the stages of this spectrum?

>> So let's start at the very bottom.

You're homeless. You're panhandling.

Reliant on the kindness of strangers. As

you go up from there, you can be

completely reliant on your boss in a job

that you don't like. Now that's that's

that's a that's another low level. As

you go up from there, you have look, I

am I'm relying on my job. I'm relying on

my on my paycheck, but I probably have

some opportunities. I could go work at

another job. I could I could choose to

work here. I could choose to work there.

And then you go from there is like, yo,

I I like my job and I have some savings.

So if I lost this job, I can fall back

onto it from there. You can go up from

there to have you can live where you

want. You can work where you want. You

can change fields. You can you can go

and you can do a completely different

job. You can take two months off and

travel if you wanted to. Like you're

working your way up all the way to the

highest level of financial independence,

which is I don't need to work anymore.

I've saved enough and I can I can I can

wake up every morning and do whatever I

would like to do. That's obviously an

aspiration that for most people will

never be reached until they're maybe in

their, you know, 70s and they're

retiring and they have social security

and some other savings from there. But

for most people, like a good level of

independence as a good goal is enough

savings so that if you lost your job, if

your car broke down, if you needed to

replace the roof on your house, you

would be able to do it without losing

that much sleep. That is a realistic

level that I think almost anyone can

achieve. based on everything you know

about money if I want to get to that

highest level of complete financial

freedom, what what what's like the the

five things that I should be thinking

about at just a sort of a very simple

level, you know, cuz so many people

listening right now think, you know, my

goal in life isn't to become a

billionaire or a tens of millionaire. My

goal in life is just to get to that

point of freedom as soon as I can. Yeah.

>> Where I can start calling the shots. And

there's there was someone who I was

speaking to the other day and said that

there's this internet movement of kids

who are trying to get what do they call

it it's like they're trying to get to

the point where they can retire early

>> fire something

>> financial independence retire early that

>> y

>> y

>> like how do I get how do I get there

>> the first thing that I think that's most

important this is the first and the last

thing this is the most important part is

that all wealth your feeling of wealth

is what you have minus what you want and

it's so easy to ignore the latter I talk

about in the book my my late

grandmother-in-law, my wife's

grandmother, passed away a couple years

ago. For 30 years, she lived off of

nothing but 17 or $1,800 a month in

social security. Not a lot of money by

most accounts, very little money. But

she didn't want anything more. She did

she if she made $1,700 a month, she did

not want $1,700 in one in $1. She was

perfectly happy. She she found all of

her happiness working in her garden,

going for walks, watching the birds,

watching the sunrise, watching the

sunset, talking to her friends, hanging

out with her family. But if you asked

her, you said, "You only make $7,700 a

month. You're broke. Doesn't that make

you unhappy?" She'd be like, "What?"

Like, "Do you think having more money

makes the sunset more beautiful? You

think having more money makes going for

a walk more pleasant?" And I'm not

saying you should live like you should

be content with that amount of money,

but the point is like, she was content.

She was totally content. And it was her

choice. And I think she was happier

financially than some billionaires

because there's a lot of billionaires

who have a billion dollars but they want

two. They have two billion but they want

four. One of the things is that

happiness might be the wrong word here.

The word that people want is content.

When you sit here and daydream about

having the bigger mansion, what you're

actually doing is you're imagining

yourself in the mansion being content

with it. You imagine yourself sitting in

that house and saying, "I don't want

anything more than this." The feeling

that we are aspiring to is just being

content. Happiness is always like a 30-

secondond emotion. It's like laughter.

Like if I tell you a funny joke, you'll

laugh for 30 seconds and then and it's

over. Like very few times in life are

you happy for more than a couple minutes

at a time. But what you want that is

like a durable emotion is being content.

Just saying like I'm good. I'm good with

this. I don't want anything more.

>> I interviewed Dr. Anna LMK and she's

like the the uh the scientist who's most

uh renowned for talking about and

writing about dopamine.

>> Yeah.

>> And I was wondering how much do the

molecule dopamine dovetailes into this

because I think one of the things she

said to me was that dopamine is the

chemical for wanting. Yeah.

>> And people have I think mistaken it for

being the the pleasure

>> happiness. Yeah. Happiness hormone.

>> It's it's more more. It's like you want

more. And she told me this crazy study

about this rat where they removed the

dopamine receptor from its brain so it

couldn't produce dopamine and then they

put food 2 in from its mouth and the rat

starved to death because it it it and

that I've always thought about that is

like okay so that's what dopamine is.

It's the motivation to go get to go get

to want to pursue. What role is dopamine

playing here?

>> It's huge and that's actually a good

realization to be like a lot of this is

not something you can solve on a

spreadsheet. It's not something you can

solve with a formula. It's chemicals in

your brain. And obviously some people

are going to be more susceptible to that

than others. I think my

grandmother-in-law

just had for whatever it was was was

wired differently than most people. Part

of that was like she was a product of

the Great Depress. She grew up during

the Great Depression, which probably

like lowered her expectations. She never

had social media and whatnot. But of

course, I think some people are wired

differently than others for a level of

contentment. But I think just there's a

big thing in psychiatry where diagnosing

a mental illness is sometimes more

important than the treatment. If you

just get a diagnosis of like, oh, you're

ADHD, whatever it is, just knowing just

like the the fact that you can stop

questioning, why am I having these

thoughts? You can you can understand why

you have those thoughts is more

important than the treatment sometimes.

And I think that's true here. If if you

it's easier said than done to completely

control your desires, but just knowing

why you're doing it and realizing that

it's probably not going to give you the

happiness that you want, that it's just

like any addiction that the more you

chase it, the further away it's going to

get,

>> can go [clears throat] a big ways. And

so for me myself, there's all the time

there are moments where I'm like, "Oh, I

I should I I should get that car. Maybe

I should get a bigger house." I have

those feelings daily. So the feelings

don't go away. But I think I'm better

now than I've been in the past at

reminding myself of like it's not going

to make you happier. You know that.

You've tried this before. You've tried

it before and it didn't make you happy.

What is going to make you happy is

spending time with your kids, having a

good relationship with your wife and

your own physical health and laughing

with your friends and having good times

with people who you enjoy. You know

that's going to make you happy. And you

know that's not. And I have to remind

myself because it's not intuitive. And I

have dopamine that tells me you should

want more and more more and more and

more. So, you never get over it, but I

think once you've diagnosed the problem,

it becomes easier at just like spotting

that emotion and realizing that it's

telling you a story that's probably not

true.

>> I wonder if you I could trade the

addiction cuz you, you know, you

referred to it there as being an

addiction. If it's a dopamine equation,

could I not shift my addiction to

something more productive and would that

mean that my spending would get better?

So actually when I think about me as 18

years old and having that horrific

spending problem, maybe I just shifted

the the thing that gave me dopamine to

like building businesses or to

podcasting or to writing books or to

being a great dad. I don't know. Do you

know?

>> I think it's probably true that

everybody without exception is addicted

to something and it's just harnessing

that that process for whatever it might

be. So some people are addicted to my

wife's addicted to gardening, let's say.

She couldn't care less about about

investing or spending money on a nice

she could not care less about her car or

my car or your car. But if you have a

good gardener, if you you have a pretty

garden, she's she's all over this. So,

everybody's got their thing and it's

just like, can you harness that for

productivity?

>> I think a lot of like extremely

successful people are people who took

their their natural addiction and

harnessed it for productivity into their

business.

>> And that's that's why they're so

successful. this became obsessed with

one thing and it's it's a good question

of whether we can actually guide that

addiction or if it's just kind of

pre-wired in itself. I think it's true

for myself, someone who's written books

about money for 20 years, thought about

money for 20 years. My mom tells a story

that when I was three, I would sit there

and count pennies. I don't want to count

seashells. I don't want to count cards.

I don't want to count rocks. I want to

count money. And so I think I've always

had this disposition towards being

fascinated with money.

>> Why?

>> I don't know because I did it when I was

three. I did it before I could even

think through it. But I think everyone

has their little thing. It's always been

fascinating to me. I don't think I'm

obsessed with money. I don't think it

controls my life. But I've had to go out

of my way to have a a healthier

relationship with it. But I think it's

definitely been true that the reason

that I've found myself in this career is

that it's always been my thing. And I

think everybody has that thing in their

life. You know, people talk about

addictive personalities and uh I was

reflecting one of my best friends who

was an alcoholic, had a problem with

gambling, then had a problem with

eating, then got obsessed with marathons

and he he traded each one of those

things for the next thing. So now he's

like obsessed with health and fitness.

And so I was when I was thinking about

people that are struggling with money

problems and even my own historical

struggle with money, I I think I

probably just traded it for something.

And actually, I'm kind of happy about

that because I traded it for a better

addiction, one that was productive.

>> Your career?

>> My career and um

>> I guess doing this. I'm pretty addicted

to doing this,

>> right? And but I think

>> makes me happier than the plasma screen.

>> It's exactly. Yeah.

>> I think what's true about a money

addiction is that it tends to be the

classic addiction of like you tell

yourself if only I get one more hit, so

to speak, then I'll be satiated. Then

then then that'll be enough. And the

answer is like, no, it absolutely will

not. I'll tell you like a a personal

thing. I don't think this is true, but

it made me laugh. My wife and I bought a

new house about a year ago. It's an

awesome house. We love it. It's great.

And my brother-in-law came over the

other day and he goes, "You know, you're

only going to live here for 2 years

before you want to buy a bigger house."

And I had to laugh cuz I'm like, "God,

like I I I don't think that's true. I

think we're going to live here for a

while, but I know what you're saying is

right. That's the natural guide towards

it." that when we bought the house, it

was like, "Oh, this is going to be so

great. Can you imagine? We're going to

get to do this and get to do that and we

have these neighbors, whatnot, and you

become accustomed to that very quickly

and then your gaze shifts a little bit

higher. You're like, "Yeah, but look at

that house over there. That one's nicer,

isn't it?" That's always the natural

thing. And that's dopamine at work. That

is dopamine purely at work. Because the

truth is, our previous house was was

great. And our previous house used to be

our dream. And dopamine exists when

there's a when there's a gap between

where you are and where you want to be

with something. And when that gap

closes, they often refer to that as the

arrival fallacy.

>> Yeah. Right.

>> Which is a really kind of what you're

describing.

>> You tell yourself once I get there, then

I'll be then I'll be good. Then that's

enough. And it's a fallacy because you

know that's not true. As soon as you get

to that whatever that mountain top is,

there's another mountain above it. It

pushes you in a way that is not easy.

Like nobody should pretend that you can

just go do this today. But it pushes you

into appreciating what you have now and

finding your joy, finding your happiness

through other things that don't have the

arrival fallacy. Never have as I as a

parent have I said, "Oh, if only I had

one more kid." Then then that would be

great. There's no there's really no

arrival fallacy for kids. You just kind

of be like this. Like I I I just

appreciate being around you. I just

appreciate all the And if anything, it's

the opposite. It's you look back and

you're like, "Oh, I I I miss when you

were younger." It was like, "Oh, I I'm

It's It's sad how fast you're growing

up." If if anything, rather than like

looking ahead and being like, "Oh, it's

going to be better then." You're looking

back and you're like, "Ah, I wish I had

appreciated that phase a little bit

more."

>> When you talked about um one of the ways

to get to early retirement and to live a

better life is to want what you have um

and basically want less things. I go

back and forward a lot with this idea

because there's like the monks who say

that like happiness is not wanting

something and then there's like the

reality of life where striving for

things seems to make me happy and

everybody describes the journey as being

the most enjoyable part.

>> That's your purpose.

>> Yeah. Yeah. So, like what what how do

how do I make sense of this? That like

the monks are telling me that not to

want anything cuz that's going to make

me frustrated and unsatisfied. And then

my lived experience is striving for

things with a group of people makes me

seems to make me happy.

>> I think there's a there's a difference.

It's a subtle difference, but between

pursuing something that you genuinely

enjoy doing, which for you is this and

your [clears throat] your business and

whatnot,

>> versus being addicted to something that

chasing something that you don't have

yet. And so I imagine, you can correct

me if I'm wrong, but I imagine when

you're doing this, you don't tell

yourself, I need to work harder so that

one day the podcast can be up here.

>> I [clears throat] I imagine, tell me if

I'm wrong, but I imagine you come to

work every day and you're like, I I like

doing this today. I like today. I

[clears throat] liked yesterday. I'm

going to like tomorrow. And so you're

not chasing a false goal. You just

actually enjoy doing it.

>> Do you know what? It's a weird thing

because it's it's uh I'm going to be

honest because it's the only useful

position to take. It's it's a weird

combination of both. So I say like it's

important for us to have some like goal

>> but also live in the in in the total

understanding that the goal doesn't

actually matter.

>> And it's this weird dichotomy I live in

like if we become the biggest podcast in

the world like set that as a goal

because it gives [clears throat] us

something to

>> chase. I get that

>> KPI and then like put time frames

against and get excited by and focus on

>> but then also living in the total

realization that it's not going to

matter at all. Nothing is going to

change in my life. Zilch, what am I

going to get? A better black shirt. It's

like, [laughter] do you know, you know

what I mean?

>> But here's the truth. The reason that we

live in a world with a ton of technology

and a ton of great businesses and great

medicine, whatnot, is because virtually

everybody for all of human history has

woken up every morning and said, "It's

not enough. I need more." That's the

fuel of progress. And I don't want to

live in a world where everyone wakes up

and says, "I have all I need." Because

then progress would stop that day. We

probably start declining that day.

>> And so there is a paradox here of like

as a whole society, I'm grateful and you

should be grateful that people wake up

unfulfilled

>> because we live in a way better world

today than existed 100 or 200 years ago

because of that. And the richest people

in the world who I think are by and

large tortured psychologically have

created amazing technology that you and

I benefit from. And the reason we're

doing this podcast is because people

before us who were way wealthier than

you and I woke up in the morning and

said this is not enough. Bill Gates,

Jeff Bezos, all those people, Elon Musk,

Mark Zuckerberg, they woke up and said,

"I don't care if I have a hundred

billion dollars. It's not enough. I need

I need to create better technology." And

that's great. We benefit from that. And

so there is a paradox here that what is

all and that will never change that will

never change. So there's a paradox that

like the more the better society becomes

I think like it's always going to be the

case that as a whole society we're going

to have a level of angst and anxiety and

not be satisfied and say it's not

enough. At the individual level though I

think you can recognize that game and

contextualize it within your own life

and say like look

I want more money. I I want to sell more

books and have a better career. I want

to save more money. I also have to go so

far out of my way to put it into context

and say none of it's going to matter

unless I have a higher purpose beyond

that money. So, I think you can aspire

for more and still go out of your way to

realize what the expectations game is.

Even if you can't perfectly control it,

it's similar to like I want to eat a

good diet. Of course, I want to eat

healthy food. I'm not going to pretend

for a second that I don't want Oreos and

ice cream. are great and they're always

going to taste great. And so I'm never

going to get to a point where I say, "I

don't want a nicer house." I'm I'm a

human and and so are you and so is

everyone else. You're always going to

have those feelings. But you can

recognize the game. You can recognize

the voice that's talking to you and

realize when that voice lies to you and

when it's telling you a story that is

either false or just a little bit

incomplete. I think if you had to like

say who is the happiest person in the

world on average, not like naming a

person, but if you had to describe the

life of like who's the happiest person

out there, my guess is it's probably

something close to a a middle-ass family

that lives in a three-bedroom house and

has a a 5-year-old car, but they have an

amazing marriage, tons of friends,

they're in good health, but they are by

any other statistic ordinary. and at the

end of their life more than the people

who are very very successful that

ordinary family is going to look back

when they're on their deathbed when

they're 95 years old and be like that

was good

>> that was a good time

>> do you think um this is a very strange

question to ask but do you think I could

make myself like that

>> no

here's the truth I think on the nature

nurture spectrum

most of what we believe and the feelings

that we have is forged at conception and

it's just we're just wired that Okay.

And there's not much we can do about it.

Some people have different aspirations.

Elon Musk was born wired very

differently than you and I. And there's

nothing we can do about that. So, we are

who we are, but I think we can put those

feelings into a better context. Even if

we can't control having those feelings,

we can choose we can put tell ourselves

a more complete story about why we're

having those feelings and what those

aspirations will actually do to our

happiness. So on this point of how to

retire early, the first one was about

managing what you want. Is there

anything else there that if if I'm

trying to increase the probability that

I get to retire early, um I should know

in terms of tactics and strategies.

>> Well, one of the things, this is a

little bit different than than the

question that you asked, but one of the

things that's important is that a lot of

the people who do retire early, who they

tell themselves, I'm going to save so

much money, I'm going to retire when I'm

32 and then life's going to be great.

What actually happens is they retire at

32 and six months later they're bored

out of their mind and they realize that

like what actually makes you happy is

purpose. And for a lot of people their

purpose can be their career or they

realize they had this idea that when

they retired it was just going to be a

great life. But the truth is all of

their friends are working and don't have

time to go play golf with them on

Tuesday afternoon. And so a lot of those

people who retire early end up going

back. they realized it was not what it

was meant what it was made out to be

because they had if the the formula is

independence plus purpose they gained

independence but they kind of lost their

purpose and then the for and so it was

incomplete they didn't get what they

wanted

>> what about passive income people talk a

lot about passive income I had a friend

DM me the other day and say Steve I've

got some debts etc but if I could just

figure out a way to create some passive

income then that should solve the

problem and this term passive income has

become like

>> completely overused because for example

a lot of people when they talk about

passive income They're like, "Oh, I'm

going to own real estate. I'm going to

have some rentals and that's passive

income." If you think owning a rental

property is passive income, you've never

owned a rental property because there's

nothing passive about it. It is a

constant chain of broken toilets and

leaky roofs and tenants who don't pay

you on time. And there's nothing

passive. That's a full-time job doing

that. And so, I heard someone say this

recently that there's two ways to get

wealthier. You can sacrifice more or you

can want less and that's it. and gain

passive income is not part of that

equation because

>> what's the first one? Sacrifice more.

>> Sacrifice more.

>> What does that mean?

>> Work harder. Work work in a job that is

that has a lot of downsides that might

stress you out and requires you to wake

up early and go to work and do some

things that you don't want to do and

spend time away from your kids in a way

that you don't want to do. Sacrifice

more or want less. Those are your two

choices. And I think that's important in

the passive income debate because I I I

don't think there's but there by and

large is not a thing of passive income.

Even if you're just like, you know, you

put your money in a in a savings account

that pays 3% interest. Well, you had to

sacrifice to earn that money

>> and to save that money and to delay the

gratification of that money. I I I

really think it's an ironclad formula.

Sacrifice more or want less. Those are

your two options.

>> It's not nice. That's true.

>> People want, you know, tell me which

crypto to [laughter]

>> right

>> to invest in to get that.

>> Of course, everyone's always going to

want the easy answer. Just like for

health,

>> the answer is eat a better diet and

exercise. Nobody wants that. They just

say get what's the what's the secret

potion? What's the secret formula? And

maybe now we have OMI. So maybe now we

have it's closer to a to a secret

formula. But the truth is what's the

secret to better health? Sacrifice more

because working out and lifting weights

and running is a sacrifice. It's not

fun. It hurts. That's why it's good. Or

want less. Be happier with your

imperfect body. I mean, I think that's a

great analogy between health and and

wealth.

>> Often the difference between a company

succeeding or failing isn't down to its

product or strategy. It's down to the

people on the inside. After all, the

definition of the word company is group

of people. And some of the best

companies in the world have been largely

built by a players. Because I'll let you

in on a little secret. When you hire an

A player, they go on to hire more A

players. and it perpetuates. The

challenge is finding those first few A

players. I found the majority of mine on

LinkedIn who are a sponsor of this show.

LinkedIn provides talent I could not

find anywhere else. Talent with the

necessary skills and culture fit that

I'm looking for. Whenever I've paid to

promote a role on LinkedIn, I've been

able to hire faster and of course

better. Their data supports this, too.

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there. Terms and conditions of course

apply. How much do I need to understand

what's going on in the wider world and

the economy in order to understand my

own spending behaviors? What I should

spend on, how to get wealthy, how to

save? Is it important to have any

understanding around the macro? Because

most people that listen to this show

will probably hear these terms being

spouted out on by political commentators

like the Federal Reserve, interest

rates,

>> tariffs, etc. And

should I understand any of this? Should

does any of it really impact me in a way

that matters to me and my family?

>> I don't think it's necessary. And you

could point to people I've written about

in my books who had no financial

education, no training, did not read the

Wall Street Journal, could not tell you

how the Federal Reserve works, but they

had control of their psychology, control

of their emotions, they they worked

hard, they saved their money, they

invested it, and that that's all you

need. They you you you so the answer is

you don't need to know how this works.

Just in the same way that in order to be

healthy, you don't need a PhD in

biology. You don't need to understand

how cell division works in order to be

in good shape. And I think it's the same

for the economy. And it can actually

backfire for a lot of people that once

they start reading the Wall Street

Journal and learning a bit about

finance, it increases their confidence

more than their ability. So they're

like, "Oh, like I read the Wall Street

Journal. I should go day trade crypto

now

>> because I read a thing that teaches me

how the Federal Reserve works. So now

like I'm going to It increases your

confidence more than your skill."

>> That's so interesting. And so I I I

think it's important to be an informed

citizen and the Federal Reserve impacts

your life and tariffs impact your life.

So it's important to have some baseline

understanding, but I think that's more

about being an informed citizen and

informed voter than it is having

financial skill.

>> Of all of my best friends, there's like

five or six of them, the one that's most

catch cash is the one that knows the

least about I think he's the most rich

period to be honest. He's the one that

knows the least about finance and he

knows the least about investing. He

knows the least about crypto.

>> Well, what's the meme of like the the

the tail spectrum of like the poor

person drives a Toyota, the middle

person has a Porsche, a BMW, a Mercedes,

and the rich person goes back to Toyota

of like it's like whether you are very

uneducated or extremely wise, you tend

to end up,

>> oh, this one. Okay. And so I I think I

think it it does tend to be the truth

that the people who do the best

financially either have like no

financial education or extreme financial

education. And it's a person in the

middle that has their confidence is

increased much faster than their

ability. And they're like, "Oh, no, no.

I I read this thing on Reddit that

taught me about day trading. So now I'm

going to go bet my entire net worth on

this company I've never heard of."

>> So funny. But so what is it that the the

person on the left and right side of the

spectrum are both doing that is the same

here? So for anyone that can't see, I'll

put it up on the screen, but it just

shows the bottom axis says net worth.

And it basically says that people with

low net worth buy a Toyota, people with

like in the middle, that sort of middle

percentage by Lamborghinis and Porsches

and Jaguars, and then people with

extremely high net worths buy Toyotas.

And obviously it's it's metaphor. It's

not it's not it's not exactly perfectly

true, but I think people like a lot of

comedy you see it like it's funny

because people are like, "Yes, that's

true. That's how it works." I think a

lot of it is like the richer you become,

you realize that the big house and the

fancy car didn't do anything for you. It

did. It didn't give you what you thought

it was going to give you. And then so

you're like, "Look, I'm just going to go

back to utility." Like status didn't do

it for me, so I'm going to go back to

utility. It can also be the case that if

you're successful and rich, you can gain

your admiration and your attention

through what the business that you built

or the intelligence that you have or the