Why do they call you the Dhandho

Investor? It's a way of doing business

and making money without taking risk.

Like for example, Mr. Gates, Mr. Walton,

Mr. Branson, all of these people

followed these simple mental models. So,

if they won, they would win big. And if

they lost, they'd lose nothing. So, I

want to know everything. Okay, let's

start with this. Mohnish Pabrai is the

self-made millionaire who built one of

the most respected investment firms in

the world, managing over a billion

dollars. And now, he's giving us the

simple tools and frameworks to create

life-changing wealth. If humans

understood that if I embark on a

business in a format where the risk is

close to zero, more people would do it.

And that's what these mental models do.

For example, cloning. We are taught, if

you want to start a business, you need

to come up with something new. But

actually, if you are a great cloner, you

will be 90% ahead of the rest of

humanity. And in fact, everything that

Microsoft has done well at has come from

copying someone on the outside. And

then, there's time. When you're starting

a business, don't quit the day job

because some other yo-yo is paying your

rent. But it does mean that you need to

find time to work on your business. But

I will show you the perfect way to

allocate your time. And that's not all.

There's models like low-hanging fruit,

skin in the game, givers versus takers,

and the circle of competence. And I'll

I'll explain all of them. What about

investing? Cuz you're very well known

for being an excellent investor. There

are three things that matter with

investing. And there's also something

known as the rule of 72, but I wish they

would teach it more in high school. And

it tells us how long it takes money to

double. Now, this is exciting.

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 subscribed and thank

you so much because in 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.

Mohnish Pabrai,

with the work that you do and the sort

of public educating that you've done

more recently in your career,

what is the message you're trying to

convey? If you had to summarize that

message and exactly who you're trying to

convey it to?

It really depends on

uh

what message.

There are uh a few different mental

models that I've figured out

over the last few decades. When you have

uh you know, clarity on these mental

models and especially

when you can start overlaying them,

that's when you get 1 + 1 becomes 11.

And uh so, these mental models are not

all in the same direction or in the same

genre. So, just to pause there for a

second. So, the the word mental models

Yeah.

>> means it's basically a framework for

thinking.

>> Yes.

>> So, one framework for thinking is this

idea of cloning

>> Yes.

>> um as one such example. Yes. Let's take

the mental model of cloning. Cloning.

>> Cloning, right? So,

um

what we are taught is that if you want

to start a business,

you need to come up with something new.

Something that hasn't been done before.

But, the reality is that the world will

very easily accept three of the same

thing

or five of the same thing. And usually

it is an advantage

to look at something that already exists

and say,

"Can

another one of those exist?" For

example, or can I take what's there and

tweak it a little bit? So, there's

something peculiar in the human psyche,

maybe going back into our history and

our ancestral evolution,

where humans look down upon cloning.

But, if you look at it, so for example,

two of the greatest cloners, I think, in

human history,

were Bill Gates and Sam Walton.

Now, we think of Bill Gates as an

innovator.

And we think Sam Walton created Walmart,

which was also new. But, actually,

they're both me-too models.

And

Microsoft would not have existed

without being a great cloner.

So, when we look at um Microsoft Word,

it came from WordPerfect. Which was a

company

>> Which a competitor that he took out.

Uh we look at Excel, it came from Lotus.

Uh we look at Bing, came from Google.

And you know what Bing is, but it's not

Google.

Everything that Microsoft has done well

at

has come from copying someone on the

outside.

And when we look at Sam Walton, who's,

you know, the Walton family, if you

pull them all together,

it's the richest family in the world.

It's richer than

uh Elon and everyone.

And Sam Walton, by his own admission,

would tell you that he has no original

ideas.

So, originally, Walmart

cloned Sears and Kmart. For my

international listeners, these are two

big supermarket chains.

>> Yeah, and they're both gone. They're

They're And in fact, Walmart buried

them.

And um

and Sam Walton

was one of the most intense cloners

ever.

So, if he was driving on vacation with

his family,

and he's passing some retail store, he

would tell his family to stay in the car

and he would go in the store just to

check it out. And he said that there is

there is no human who has lived in

history or will live in the future

who has visited more retail stores than

he has.

One time there was a manager of his and

he would go in with his managers to

these stores. Retail is one of the most

transparent businesses. You can go into

your competitor's store and you'll

figure out the entire business model in

10 minutes. You don't need to talk to

them. Okay, it's beautiful. So, he went

into this retail store and the manager

says to him, "Oh, what a terrible

operation. The the whole store was

topsy-turvy. It's really bad." And Sam

says to him, "Yeah, but did you see the

candle display?"

The candle display was fantastic. So,

Sam felt that he could learn from

anyone.

It didn't matter if you were a useless

operator or a great operator or

whatever, anyone in the middle. Walmart

is just an amalgamation

of ideas from other places. If we look

at If you look at a company like

Starbucks,

we think of Starbucks as innovative, but

actually what Howard Schultz did is

he saw a concept in Italy

and his idea was that I think this is

work in the US, right? And so, he cloned

he cloned that idea from Italy and

brought that coffee shop experience to

the US. If you are a great cloner,

you will be

90% ahead or 95% of the rest of

humanity.

Now,

another mental model,

humans have this

perspective

that starting a business

is risky. In reality, entrepreneurs do

not take risk.

They do everything in their power to

minimize risk. And in many cases, when

they embark on a business,

the risk approaches zero.

What is extremely risky

is a 9:00 to 5:00 job.

Because we have one life.

Right? And it goes away. And you may not

get to do what's in your heart. You may

not get your music out. Right? And so,

getting our music out is really

important. So,

so this notion, which is drilled into

us, that

if you're an entrepreneur, you're taking

risk, really kind of does a big

disservice

to

most humans. And if if humans understood

that if I embark on a business, I can do

it in a format where the risk is zero or

close to zero.

And I can clone an existing business.

Right? Now you've

combined two mental models.

And we can start adding more to them.

But two has become 11. 1 + 1 has already

become 11. It's non-linear. And

why is it

that why is why am I saying

that entrepreneurs do not take risk? So,

if I take my own case as an example, and

I can give you 100 cases like that, but

if I take my own case as an example,

I was working

9:00 to 5:00 at a company.

And I had a business idea.

My employer expected me to work 40 hours

a week, right?

There's 168 hours in the week. So, I

felt like there must be at least another

30 40 hours that I could work

on my startup. Could you show me this in

context?

>> Right. So, if you look at our whole

week, for example, these beautifully

arranged LEGOs. If I take one of these

blocks of LEGOs, so each one of those

blocks in there is 2 hours. So, 8 hours

a day, we're sleeping 8 hours a day,

right? And uh and we're doing that 7

days a week, right? So, basically we've

got 7 days a week, 8 hours a day, we're

sleeping.

The blue LEGOs are showing our 40 hours

a week.

Uh 8 hours a day, 5 days a week, we're

working, right? Then we get to

other, you know,

uh preparing dinner and showering,

shaving, getting ready, whatever else.

So, that's about 4 hours a day on the

weekdays, which is including commute

time.

And about 8 hours a day on the weekend.

Then we get to free time, you know,

social media and watching Netflix and

hanging out with friends, going for

dinner.

And we've got

quite a bit. We've got about 4 hours a

day of doing that. And about 8 hours a

day on the weekend. So, this is kind of

typical what a typical week for most

people would look like, right? Mhm. Now,

when you're starting a business, the

important thing

is don't shut off the cash flow.

Some other yo-yo is paying your rent.

And some other yo-yo is paying your

groceries. So, we don't want to rock the

boat.

But we're going to make one change to

blue. Which is the amount of hours I'm

working for my 9-5.

>> Now, before I started my startup, um I

used to

get top reviews as an employee.

Uh you know,

I was very focused on doing a great job

for my employer, all in, right?

The day I decided I'm going to run do my

startup, I decided I need to be just

above firing level.

My performance needs to be just good

enough

so they don't can me.

But nothing beyond that because I need

all my energy to go into my startup. So

that's the only tweak I'm making is the

blue stays, but we're not doing extra

blues like we were doing before, right?

And blue for anybody that doesn't can't

see cuz you're listening on audio is

work. Exactly. Yeah. Blue is work,

exactly.

Now

when we embark on a startup,

we should never do a startup to make

money.

It's the worst reason

to start a company.

The purpose of business is not to make

money.

The purpose of business is to deliver

an incredible product or service to

humanity.

If you do that, the money is a side

effect.

It'll happen. We don't need to focus on

it. So what we are looking for is

do we have a product or a service that

we're thinking about that we could bring

into this world

that is going to improve the world in

some way. How do I know if it's a good

idea?

Whatever idea you have come up with

is not going to work.

Okay?

Because you came up with it in an ivory

tower between your ears.

Okay? And that's not really a great

place to find great ideas.

What's going to happen is we're going to

be doing what I call rapid prototyping,

which is we take this idea

and show humans what it is. And when you

show it to humans, you will get

feedback. So I'll I'll I'll

um maybe I'll just give it in more

practical terms.

Uh

when I was um

uh when I was starting my first

business, uh it was going to be a IT

services business. Okay, information

technology services. And I was going to

be providing these services to very

large businesses.

Companies that are, you know, billion

dollars or more in in earnings or cash

flows.

Um,

I was in a meeting with a, uh, senior IT

guy at a very large bank in Chicago.

And I was going through my PowerPoint

deck with them.

I came to the 10th slide,

said my spiel, went to slide 11.

So, the boss who was sitting in the

meeting said, "Go back to slide 10."

So, I went back to slide 10, again gave

my speech that I had for slide 10, and

took it to 11.

He said,

"Go back to slide 10, and do not change

the slide.

I don't have an interest in any other

slide.

Okay? So, I took it back to slide 10.

And all he wanted to talk about was what

was on slide 10.

My deck was talking about

seven things we could do.

Slide 10 was one of those seven.

It was an extreme pain point for him.

He needed help on that one thing.

He didn't need help on all the other

riffraff stuff I was talking about.

So,

when you're doing a startup,

you have to be

listening very carefully.

Your customers or potential customers

will tell you exactly what you need to

do.

Whatever you came up with maybe 80%

right or 70% right or 40% right, but

your customer will tell you what is 100%

right. Okay, because that's a real pain

point. So, I went back and thought about

it

and I realized that his pain point

and I could see it was a severe pain

point because he gave me a purchase

order at the end of that meeting.

Um was going to be a pain point for a

lot of people.

So, I went back.

I took slide 10,

blew it up into 20 slides, and that

became the deck.

Okay, everything else got thrown out.

Right now, I couldn't have done that

without him.

My brain is too small to have figured

that out. So, anytime you're doing a

startup of any kind

and you have a prototype or a early

product or something going on,

your users are going to tell you exactly

what

tweak they want. You've just reminded me

of a conversation I had this morning.

Okay. Where I interviewed someone

because much of what you're saying is

orientated towards startups, but it's

actually every single day of everyone's

life because I interviewed someone this

morning for a really critical role in

the company. And this person has spent

20 years at one of the biggest companies

in the world. And

when I was doing the interview, she was

telling me about lots of things she's

done during those 20 years. And I was

just trying to get to this one thing,

can you put on events? And she was

telling me about this and that and the

other thing and this and this and the

other thing. And I was just actually I'd

only come to this interview to figure

out if she could do put on big scale

events. So, we spent over an hour

conversation. We spent 55 minutes

talking about a bunch of things I wasn't

interested in. And actually as she was

speaking, I was going, "Do you know what

she could have done at the start of that

conversation? She could have gone,

'Steven, can I ask you one question?

What is the What are you looking for

from from this person?'" And if And then

I would have gone, "I just want someone

that can put on events." And then the

next 55 minutes could have been

persuading me that she can do that.

Sure. And it just applies to what you

just said there. How could you of this

as the sales person that day in that

meeting,

with what you know now, how could you

have done a better job without going

through all of those slides?

Well, I think what what I would do now

if I were doing something like that is

that my my radar

on listening would be 10x.

You know, we don't learn when we speak.

We learn when we listen. So, I would

really be trying to talk less and

extract more. Mhm. And I wouldn't even

rely so much on slides. I'd like to

really try to bring them in into into

what they are trying to say. And uh

And and so, basically in uh if if you

study if you study businesses, you know,

venture back, non-venture back,

whatever, this is a very

common thing. There are almost no

businesses

who end up with the business model that

was originally conceived. I mean, that

just is would be such an anomaly.

It's really the interplay between the

founding team and the early customers,

which really leads to taking this wet

clay

and making into something that people

want.

>> Mhm.

You know, and so, you know, if you think

of something like Google Glass, you

know, when they came up with those

glasses that they thought the whole

world was going to wear. Yeah. So,

it didn't work.

Well, why didn't it work?

Well, the reason it didn't work is

you're talking about something extremely

personal. Okay? Like, for example,

Wrigley's chewing gum. Okay?

My mouth is a very personal space.

I'm not going to put Glotz chewing gum

in there. What's Glotz chewing gum?

Exactly.

>> Okay. Okay? Yeah. You're not going to

put some brand that's half the price of

Wrigley's in there.

Because you don't want to go there.

That's not of interest to you. So, when

we wear glasses or sunglasses or

anything we wear,

that's very personal.

So, the the ergonomics and the human

factors are very important. If it's

slightly off, now

Meta

is trying to do the same thing. But,

they went to Ray-Ban.

Right? They did a JV with Ray-Ban.

Those glasses look like normal glasses.

Mhm. I think there's a higher chance.

Well, I've got some.

I used them, yeah. You don't have any

Google Glass. No, no, no, no.

I think they they cut the project,

didn't they? Yeah. So, so what I'm

trying to say is that we we have to pay

very close attention to the customer. Uh

I mean, Steve Jobs was right. The

customer doesn't know what he wants.

Okay? But, if you put it in front of

them,

then they can now tweak and tell you

exactly what they want. Right? So, so

that and that's another mental model,

which is uh now we get to the third

model, which is that you're not smart

enough. If whatever founding team you

have is not smart enough to figure out

what people want. Period. So, you have

to have very good listening skills.

And you have to be have the flexibility

to and again, when you're listening,

separate the signal from the noise.

Right? Take in what is real signal

and

leave out what is the noise. And then

you're starting to get down a path which

is going to make more sense.

The other kind of a model maybe woven

into there was this idea of just like

attention to detail. I'm not even sure

if that's a model, but when you told me

about the Walmart founders laying

between the aisles to measure the exact

centimeter of length. The model there

for me was just like precision and

detail.

It's a game of inches. I mean, what I'm

saying is that

uh when

when Sam Walton was

trying to figure out the name of the

company.

One of the reasons he went with Walmart

was it was seven letters.

And he was looking at the cost of

putting up signage

in stores, and he was trying to come up

with a name with the fewest letters

because it cost less.

Okay? And so, I mean

cost

cost sensitivity is all over the place

in Walmart. Right? I mean, that's just

front and center with what they do,

right? I mean, they just really squeeze

blood out of a rock, you know? So,

basically, I mean, I think that was and

that's the reason why they became so

successful. One of the things you can

always control in business is your

costs. You You may not be able to

control your margins and selling prices

and a lot of other things, but you can

always control costs. So, that's another

model where you have to have discipline.

You have to have very strong discipline

on the cost side. If you look at

something like LVMH, you know,

the guy who runs it,

I mean,

he's in luxury goods. He's in high-end.

LVMH make Louis Vuitton and

>> Yeah, yeah, yeah. I mean, everything,

you know? It's you know, they've taken

over Tiffany's and everyone. Um

but when you look at how the company is

run, it's very tight.

He spends money on the best real estate

because that's important. But the deals

he negotiates on those real estate is

mind-blowing. You know? So, it's it's a

very tightly run operation

on a product category that doesn't

necessarily need it. Hm. But that's why

they That's why he's become the

wealthiest guy in Europe. Because that

mentality will then apply to every

decision.

>> Absolutely.

>> And if you apply it to 100 things, it

does matter.

>> Oh, it does matter big time. Yes. So, I

have these

yellow blocks here which represent

working hours working on your own

business. So show me how you would take

some of these blocks away Yes. and

introduce hours working on your own

business. Yeah, so basically it's it's

really quite simple. We're not really

not going to mess with our sleep cycles.

We're going to leave that alone. Sleep

staying the same. And we we need our

blue, which is our work work space 40

hours. We need that to continue.

One of the changes we're going to make

is we're going to live close to work. So

we're going to cut down commute time as

much as we can. Okay. Because every hour

matters. Okay, so the area that we're

going to focus on

is the free time. Okay. And the reason

why taking out the free time

is not a problem is because what we are

embarking on, like we just discussed, is

not about making money

is getting our music out. Getting our

music out. What do you mean by that?

Which means that we

have something in us that we know the

world needs.

And we want to bring it to that world.

We want to bring it to the world. And

because we want to bring it to the world

it's not work. I think the audience

might be challenging themselves in the

head and saying but I love my the thing

I do for work.

I'm I'm one of maybe the rarer group of

people that I get to work with puppies

every day.

And I love that. Yeah, so I think that I

think this is not for everyone.

So I think you have to ask yourself who

you are.

If you are truly excited about

your 9-to-5 job and what you're spending

your main working main waking hours on

awesome.

That's great. I mean, everyone's not

going to be an entrepreneur. Everyone's

not going to have a startup. Everyone

they they may be getting their music out

in a different way on someone else's

platform, which is perfectly fine. And

but but if if that is not you, where

when you go to work, you're not super

excited to get up in the in the morning

and you're not tap dancing to work every

day. If that's not happening, then

there's something wrong. And you have to

ask yourself, well,

is there something else that is that

you're passionate about, that you want

to do?

And this is not something that should

take a lot of

effort. So, if we go back

and look at, for example, Bill Gates and

Paul Allen, right? I mean, Bill Gates is

at Harvard

and he sees

a magazine which shows a very early

personal computer

and he realizes that there's a paradigm

shift.

And he realizes that he needs to be part

of it.

And Paul Allen is the one who sent him

that magazine and he told Bill,

"We got to go do this. Now, this is our

time." Now, and for Bill,

it was a very easy decision.

Very easy decision, very

difficult for his parents. His parents

were in shock that he's going to abandon

his degree. And, you know, he he told

his parents, "Don't worry about it.

I'm going to come back and I'll finish

the degree."

And several decades later, Harvard gave

him an honorary degree.

And his parents were in the audience and

he told them, "I told you I'd come back

and finish it off, right?" So, let's put

some numbers to this. 12% of people,

according to the stats that are

listening right now, are explicitly

unsatisfied with their job, which means

they hate it. 85% of workers globally

are disengaged, meaning they're not

fully invested or happy at work. So,

it's a huge number of people. More than

half of the US workers are at least

somewhat satisfied, but engagement

remains worryingly low. So, So, we look

at that 85% number, 85% of workers

globally are disengaged,

meaning not fully invested or happy at

work. So, it's really those Sure.

people.

And and the thing is it's not it's not

just enough to be unhappy at work.

That's one piece of it. I

The unhappiness can be a symptom.

And one of the

one of the

causes can be

that you have a different calling in

life.

And you are not following following your

calling. Now,

sometimes for someone like Bill Gates,

for example, and Paul Allen, they

figured out their calling.

And they just went, right?

For many of us, it may not be that easy.

So,

what we have to do is we have to

um

try a few things. You know, you try on

different shoes to see what fits.

And so,

you know, have some thought experiments,

talk to your friends,

you know, say, "Okay, you know,

I'm a UPS driver. This is what I do. And

I really like playing the guitar, or I

like to make these art figurines or

something at home, whatever else, right?

So, you have to figure out

what your calling is. And

I'm probably not the best person to tell

you how to figure out what the calling

is. Maybe another guest of yours can can

can help them with that. Do you think

everyone has a calling?

Yeah, I mean, I think I think we are all

unique children of God. And I think we

uh we all have some music we want to get

out.

And

uh

knowing what that is and getting it out

may not be the easiest thing, but it's a

worthwhile journey

to try to get there.

Right? So,

we can't do this just because we're

dissatisfied, and we can't do this just

because we want to make money and get

rich. We've got to have something that

we think the world would be interested

in.

And

you know, in my case, I I'd gone through

this uh

session with a couple of industrial

psychologists, and they told me,

"Monish, you like to play games. You're

a game player." And actually, they

couldn't be more accurate. So,

when I was doing my startup,

um

I'm I'm a numbers guy and a math guy, so

I actually like that. So, what I used to

do is

because I had no money,

I used to send 200 letters a week to the

senior IT people

at 200 different companies. But what I

did is, so all these people I was

sending this letter to,

they had a gatekeeper, some secretary

etc., whose job was to not let anything

through.

And my whole purpose was I need this

letter to get through.

It needs to get through the gatekeeper.

So, I was using mail merge, which was

mass producing these letters, but there

was a

customization the mail merge where if

person some person name was David Smith,

it said, "Dear Dave." Okay? And then

throughout the letter, it talked Dave

Dave's name came up like three four

times. When the assistant got the

letter, she couldn't tell whether I know

Dave or not. Because you used his

shortened name.

>> His shortened name, and she doesn't want

to throw a letter that is somebody that

he knows.

So, the letter would go through

Mhm. enough times, right? Now, what I

also did is uh 1 week after those

letters were delivered,

I called I made 200 calls. I called all

200 people.

And basically, if I got voicemail, left

a message, whatever else, right? Now

they have entered the sales funnel.

Okay, so

Dave Smith is in the sales funnel.

If I get no response from Dave Smith

after 1 week there's one more call.

Then the calls start getting spaced out

double time, 2 weeks out, then 4 weeks

out, then 8 weeks out, then 16 weeks

out, but

Dave never leaves that funnel.

Okay, until he tells me

"Do not bother me anymore

and I have no interest." They're going

to stay in that funnel. So the second

week I send out another 200 letters,

make another 200 calls, right? And now

I've got the first week, second week. So

you can see as time goes on

I'm calling nonstop, right? Because this

thing is

but what I was tracking

because I'm a math guy, what I was

tracking is, "Okay, these 200 letters

went out. How many people did I get any

kind of positive response from?" Right?

Because not everyone's telling me to get

lost. Okay? And how many meetings am I

having?

And what is the ratio of calls to

meetings, meetings to close, etc. And

my ticket size of the item I was selling

was very large, hundreds of thousands of

dollars, right?

9 months after doing this, where now

let's go back here. So we're going to

take our free time. So what I've tried

to describe is that what I'm doing

is actually more exciting than the

orange. The yellow

is more exciting

than the orange. So basically we are

>> The yellow is our startup. So that's

working on your startup.

>> So on on the weekends

I'm going to do 10 hours a day because

I'm not working, right?

And on the weekdays, I'm going to do 4

hours a day because I've got other

things to do.

Because I have a job and whatever else

is going on. So, there's my weekdays.

5 days there when I'm putting in 4 hours

a day.

And then I'm putting in 10 hours on the

weekend. And the free time,

this is not as exciting

as pounding Dave.

Pounding Dave continuously till he says

either get off my back or here's your

purchase order

is very exciting.

It's way more exciting than playing some

social media or watching Netflix or

whatever else. Which is what people

currently do with their free time.

>> Right. So, one of your one of the litmus

test of whether

you need to you should be doing a

startup or not is yellow

needs to be more exciting than orange.

Your startup needs to be more exciting

than your free time.

>> should be so painfully boring for you.

And going on Facebook or Instagram or

whatever should be very boring for you.

Compared to This is exciting. Compared

to building your company. Yes.

So, you know, um the Pink Floyd's song,

"We don't need no education." Yeah. "We

don't need no thought control." Yeah. We

don't need none of this.

This is so useless. You understand how

useless this is? Yellow is where it's

at.

It's not It's not with the orange stuff.

You don't need this. Thank you. See you.

So, we don't need any free time.

This is better than free time. Building

your business. You having an orgasm

every hour.

So, what can you What can be better than

this?

Much of what I do here when I'm having

these conversations is I'm trying to put

myself in the shoes of the person who is

currently sat in a in a 9-5 job and

they've they've got an idea and their

idea is isn't really hasn't really gone

anywhere yet necessarily and the the

pressure they're feeling in their lives

is is probably now a financial one. Like

they want financial freedom. They want

more optionality in their lives to be

able to go on holiday, make more choices

and have more freedom. If you're that

person,

um, what are the mental models that we

haven't discussed yet that you need to

be thinking about to get from zero to

one? So one of the things to keep in

mind is that we live in a world now

where most things that you would want to

do in terms of starting a business

are not capital intensive. What does

that mean?

Doesn't take much money.

In fact, what's been happening over time

is startups need less and less and less

money because they need more and more

and more brainpower.

Right? So the good news is

that

a gating factor

is not that you need money.

When when I started my business, I took

on

I signed up for every credit card that

would come to me. So I had 70,000 in

unused credit lines

in a probably a dozen Visa and

MasterCards, right?

I had about $30,000 in my retirement

account, my 401k, which I also took out

at like 25, I can make that up later,

right? So basically I had $100,000 of

capital.

And

that 100,000 got used because once I got

going, I needed working capital and so

on.

And but then the business was the

business was actually cash flow positive

9 months after I was doing this,

I was able to get rid of this.

So after 9 months, my business was

producing

enough cash flow

that I went and resigned.

Okay? And uh yeah, we can we can put

that in here as well. So, what happened

is that

I went to my boss and his boss and

basically told them that

I'm

started a business. It's not competitive

with the company and

I'm going to be leaving in 2 weeks and

this is my two weeks notice. And

basically, that was that, right?

And

you know, they they sat me down and

said, "You know, Monish,

we were so confused for the last 9

months

because

we met several times because we saw big

drop-off in your performance.

But it was never so low that we wanted

to fire you." I said, "Exactly.

That was exactly what I was trying to

do. I was trying to stay just above

firing level." He said, "Well, you

mastered it because we we met several

times, but we couldn't get rid of you."

So, they what they told me is

they said, "Look, when your business

fails,

not if your business fails, when your

business fails,

please come back.

We'll give you more money.

You're going to get a promotion.

And we'd love to have you back."

I could immediately come back. So, I

said, "I got one free shot Yeah. where I

leave my job, I go,

I do this thing, and if it doesn't work,

I'm back to almost exactly where I was.

Almost no change, right?

>> type one, type two decision making.

Yeah. Yeah. And so, and this is not just

me. What risk does Bill Gates take?

Okay, Bill Gates, what is his value

as a Harvard freshman in the job market?

Zero. Okay? He Nobody would pay him

anything.

And he could come back anytime and

finish that degree. So, let's say he

went to New Mexico. Things didn't work

out. He's got wealthy parents in

Seattle, okay? He just comes back,

graduates a year later, and he goes on.

So, what was the risk? There was no

risk. And if you study entrepreneur

after entrepreneur after entrepreneur,

what you're going to find So, if we look

at Sir Richard Branson,

he wants to start an airline.

Okay? Now, to start the airline, you

need a jumbo 747.

That costs like 150 million. The plane?

The plane, right? That's some serious

money.

Richard Branson got Virgin Atlantic off

the ground with zero.

And with zero risk. So, here's what he

did.

You replace capital with creative

thinking.

So, he calls

206-555-1212,

which is directory assistance in

Seattle, Washington.

And he asks for the phone number for

Boeing. Okay? So, he calls the main

Boeing switchboard.

>> Boeing sell the planes, right? Yeah,

Boeing makes the 747. So, he calls the

main switchboard of Boeing, giant huge

company,

and says,

"Uh I'd like to lease a jumbo."

And they hang up on him. Okay?

He calls about 30 times, and they keep

hanging up. And finally, they get tired

of his calls, and the lady says, "Let me

put you in touch with somebody who's in

charge of leasing, and they can tell you

to get lost." Okay? So, she transfers

him to a person who's

actually leasing jumbos.

This person tells Richard, says, "Look,

Mr. Branson, in every country, we have

one customer.

And in the UK, that is the British that

is British Airways. So, we have nothing

to talk about." So, he said, "Well, just

humor me for a second." He said, "If

British Airways called you and said that

they wanted to lease

a old used jumbo.

Do you have one lying around? So, the

guy said as a matter of fact we do, but

that's academic.

He says, well, what would you lease it

to British Airways for just since we're

having a conversation.

What ended up happening is

Boeing leased him that jumbo.

And the reason they leased him that

jumbo is they had one just sitting

around.

So, they didn't really have any risk

because they said the moment the guy

doesn't make any payments, we're going

to pull the plane. Mhm.

>> Right? So, now when you have an airline,

you sell all the seats 4 months in

advance. The cash has already come in.

You pay for the fuel 30 days after the

plane lands and you pay for the lease

after the plane lands.

You don't need any capital.

Virgin Atlantic got off the ground with

zero capital.

Okay, now if you can start an airline

which needs a jumbo with zero capital,

you can start any business with zero

capital. Okay? So,

so basically

when you look at business after business

after business,

all of them what they do is they start

small, they're embryonic, they minimize

risk, they get a few customers, and then

after they just roll with the customers,

right? And then that's how they get

going. So,

so the important thing is that when we

take the blue out, when blue is no

longer here, Which is what?

>> with the work is gone, yellow's going to

almost double or triple because this is

where all the orgasmic activity is. So,

we move the work, we quit the 9-5 job

and we move that time over to work on

our startup time.

>> I was working on my startup like from

7:00 to 9:00 in the morning, and then I

would come back 6:00 p.m. and work till

10:00 or 12:00 in the evening. When you

had a job.

>> When I had my job, and then I'd work on

the weekends. And I was so desperate

to just go full-time into it because I

just said if you just let me go full

time,

I can tear it up. And that's exactly

what happened. I mean, we

in about five first year we did 400,000

revenue, second year 1.4 million, third

year 3 million, and by the 6th or 7th

year we were at about 15, 17 million. It

just grew because basically then I had

no shackles on me.

You know, I could just go full out,

right? And the engine I I knew all the

statistics of these letters, so many

calls, so many this, so much this means

this and all of that. And uh it works.

So,

and and if if it doesn't work, you can

go back to your 9:00 to 5:00 and give it

another shot, you know? So, you actually

could do this a few times. I think

that's a really unappreciated framework,

as you call it, or mental model, which

is

cuz you said you sent 200 letters. I So

many times kids come up to me in the

street and they say, "Look, I've been

looking for a job. I've sent

six emails." Yeah. And they go, "No

one's got back to me." Yeah. And you can

see that it's hit hit their confidence.

And now they've actually arrived at the

conclusion that getting a job is like

harder or impossible cuz they sent six.

Now, when I interview people like you,

they all give me much bigger numbers.

They say 200, 300, five, you know?

And there's something in this sort of

law of averages,

which is just like just take more

swings. You know, you see it in like

cricket.

>> My my daughter, when she was graduating

from Berkeley, came to me and I was

really surprised. She said, "I want to

work at a hedge fund." And so I I said,

"Okay." And her degree was not in

business. So, she was not a natural

candidate to be even considered. I said,

"Uh can you make a list

of every hedge fund in New York and LA

and put it in Excel,

managing partner's name, address." Now,

we don't know people's email addresses,

but we know everyone's mailing address.

Okay, the mailing address is a public

piece of data. The address. The address

is easy, right?

And I I said that uh so she she got a

list of about

1,200

funds in LA and New York. And I said

what you're going to do is

uh you're going to ask for the job, but

you're going to have two pages behind

that giving them a stock tip.

You're going to give them a pitch that

you have written up of a company that if

they invest in

they're likely to make money.

We sent the 1,200 letters, physical

letters, okay? All physical letters, no

email, right?

And um

there's a 85-year-old guy in New York

who gets the letter. He's retired, the

fund doesn't exist, it shouldn't have

been on the list, whatever. But he has a

friend in LA. He says, "Hey Jamie, why

don't aren't you looking for an

analyst?"

And this girl, she seems to have the

perfect kind of background. And she ends

up with a higher salary

than anyone who went to Berkeley

business school

with a much higher GPA than hers.

I was thinking about

what you're saying um and I made a video

the other day which I think is somewhat

relevant where I was trying to describe

to people how to send a message to

someone

in a way that creates impact. And the

framework that I came up with, which

I'll I'll well animate on the screen,

but is basically

so this axis here is the signal versus

noise of the channel you're using. Mhm.

So a high signal channel is one where it

gets past the PA. Mhm. It's less

saturated, less busy.

A high noise channel, which is the

opposite, would be sending a an email to

the like press@yourcompany.com's

email. So like everyone goes through

that path and it doesn't get doesn't get

to the person. And then the other axis

is basically the emotional impact of the

message.

>> Yeah. So, high emotional impact is doing

what you said, put a stock tip in there,

you're going to stand out, they're going

to think you're a little bit strange, or

what you said about like shortening the

name, that creates more emotional

resonance. And then low would just be

Yeah. AI slop, copy and paste jargon.

And really like the most successful

messages are up here. Absolutely.

>> High like high signal channel, high

emotionally resonant. Absolutely. But

what happens is people send loads of

messages down here

and then they get depressed and

demotivated and say no one's getting

back to me.

>> Yeah.

Like Michael Jordan used to say, you

miss every shot you don't take.

Yeah. Yeah. Yeah.

So, basically, it is

I mean, I think one of the things about

entrepreneurs is that you need to have

resilience.

Um

like for me

for me, what the data I was looking for

is that

if I send 5,000 letters, okay, which

takes 25 weeks, 6 months,

how many

meetings does that

end up in? If that ends up with

10 meetings or 20 meetings,

well, now I have my number, right? And

then the second part is the meeting to

close ratio, right? And so, to me as a

math guy,

I I was just interested to know that

it's not zero. Okay, I just want to make

sure.

And I could see very quickly it was not

zero. Literally within the first 2 3

months I could see it's not zero.

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I think one of the the most formative

experiences you can give your children,

which I got at 16, through through 16 to

19 years old, which is what I did, was

working in cold tele sales.

So, my job at 16 years old was to call

people at 9:00 p.m. cold and try and get

them to buy windows and doors. And it

taught me the exact lesson you're

describing, which is yes, 80% of people

tell you to off. 98% say no, but it

doesn't matter. I always say like 80 80%

told me to off. 15% said it in a

nice way, and then 5% were at least

receptive to what I had to say. Yeah.

Maybe 1% close, but when you understand

that, you think of life through that

lens.

And actually, Stephen I had the almost

same experience. So,

my father was an entrepreneur. He was

really smart at identifying what I call

offering gaps, like things that should

exist in the world, but didn't.

And he would get these businesses off

the ground with no money. I saw him do

it repeatedly.

His downfall was he was very aggressive

in growing the businesses. And so, they

didn't have staying power. There was

almost no equity, always very leveraged.

So, I he went bankrupt eight or nine

times, right? Repeatedly.

When I was um

when I was about 11 or 12 years old, my

brother and I,

we were like his board of directors,

okay? Because he had nobody else.

The three of us would sit down at night

to figure out how to make the business

last for one more day.

Okay, everything's caving in, the

creditors are craving in, the business

is collapsing. How do we make it

work for one more day?

And then the next night we'd get

together and how do we get it work for

one more day again, right?

At 16, and I don't know why my dad did

this, but I'm so grateful that he did.

He was at that time he had a gold

jewelry factory in Dubai.

And he was

going cold calling

in person to jewelry shops to buy his

jewelry that he was manufacturing.

So he took me with him on many of these

trips. And I was 16 just like you,

right? So we would

take the taxi from Dubai to Abu Dhabi.

And now there's all these

gold shops.

He doesn't know any of them, right? And

he's going one after the other after the

other after the other.

And I would be stunned that

fifth shop he makes a sale. Yeah. And

it's a very small sale because he has no

trust and all that, but he's made the

sale.

Then I noticed that after 3 months we go

back to that same shop we made the

little sale to.

The guy brings out tea.

He there's a there's a lot of chemistry,

bigger order.

And then I saw the orders increase,

right? And then he's continuing to do

that. I I went with him to Doha, Qatar.

Uh Qatar. And again, the same thing. It

was like, you know,

I saw how those doors opened. Mhm. And I

saw how it didn't matter to him when

they closed.

That was irrelevant to him.

You know? Really interesting new way to

think about it because what you're

saying there is actually, when you get

that one yes, it's actually a seed

that's being planted that can grow into

something We just care about the ratio

and the number. Okay, so what effort did

it take? Like I was saying, if I send

5,000 letters and I get 20 meetings,

it's awesome. Mhm. I mean, that's a

fantastic ratio because one sale is

going to get me about 200,000 or

300,000. It's a significant amount,

right? I mean, so that I don't need

large numbers. And But the lifetime

value of that can huge. Yeah, yeah. I

mean, I mean,

uh these uh these relationships I got

then, they're still with me. Mhm. You

know, so it's uh it's it's like forever.

Here's a philosophical way to think

about that for just everybody, which is

you can remember probably conversations

you had in your life that you thought

were totally inconsequential, but then 8

years later, that seed became a business

relationship. The example I always give

is when I was 14, I applied for The

Apprentice. They did this like junior

apprentice on the BBC. And it's a long

story. 35,000 kids in London and across

the UK applying. I met a kid in the line

while I was queuing up for my audition,

and he said to me, "Oh, my dad runs this

um

500 million-dollar company." And I was

like, "Yeah, whatever. Like, not

interested." I went through the

auditions. I didn't end didn't end up

getting on in the show for whatever

reason,

but then I ended up cuz we were waiting

in the queue that day, I was really nice

to this kid and I added him on Facebook.

5 years later, I get a message on

Facebook. Hey, 5 years later, although I

didn't get on the show, which would have

got me about $25,000 investment in my

company if I'd won,

5 years later, I'm working on a startup.

That kid from the line says, "Hey, um my

dad has sold his business for a billion

dollars, and I've been watching you on

Facebook for the last 5 years. My dad

would love to meet you." It was a an

Indian family, the Aluwalias. They'd

sold a business called Euro Car Parts.

They took me to London when I was

literally so broke I was like

shoplifting food to feed myself. And his

dad invested double what I would have

won on the show into my business. Um and

I would and that always reminded me that

like every conversation

that I have is like planting a seed that

at any point in my life Sure. could turn

into something.

Well,

I mean, you know, um I always bring up

Adam Grant's book uh

Givers and Takers. I don't know if

you've seen that.

All humans on the planet fall into one

of three categories.

They are either a giver

or a taker

or a matcher.

Okay? These are There are no other

categories of humans. There's just these

are the three categories.

Now, the matchers

are relatively simple to understand.

Their

mental framework is

if Stephen does me a favor

I'm going to try to do something similar

for him.

You know, one-to-one. They can do the

matching in the math in their heads.

The takers

who you don't have anything to ever do

with are trying to scam and screw

everyone.

And always take and never give. Okay?

The takers basically go nowhere. Okay?

And if you have any takers in your life,

get rid of them. Okay?

Now, the givers

what the givers do is the givers

um are not focused on what comes back to

them.

They just want to help you.

They want to help humanity.

And what end up happening is

the universe conspires to help them.

Mhm. So, the givers

become the most successful.

Everyone is trying to give to them

even though they're not asking for it.

So, basically

when we and that's the book that Adam

Grant Grant wrote, Givers and Takers, is

one of the mental models with is a great

mental model to have, is to be a giver.

Don't play math games, you know, always

try to make sure the other guy gets the

better end of the deal.

And just keep going through your life

that way, and that goodwill

will compound.

And it will take care of itself.

And the time horizon, you don't worry

about the time horizon.

>> You're not doing it for getting

something back. That's the key. You're

not doing any mathematics, like I'm

going to do you're not calculating.

I'm going to do this so XYZ happens.

You're just doing it, end of story.

I was sat with my girlfriend last night.

She runs a breath work business, so

she's essentially a solopreneur.

Um, and she's at that point where she's

trying to scale. In fact, I just meet so

many I think I I actually ran a survey

before. And the vast majority of

business owners are in that SME

category, that small small sort of

business category. The back startups are

the backbone of our economy, but they

they come to me with the same problem,

which is

maybe I started as an individual, I've

got high demand, and now I'm a

bottleneck. And I don't know how to get

out of being like a freelancer. How does

the freelancer become an agency? And the

the thing I was chatting to my

girlfriend about last night was um

the step she hasn't taken yet is to hire

someone exceptional.

And so many founders come to me, these

early stage founders are like

like I I I my customers like me, I do it

better, I don't trust anybody. I I

wondered if you had a like a mental

model for thinking about

>> the thing is, so if you look at people

like Elon Musk and Steve Jobs,

they believe their number one job is

recruiting.

The first 3,000 people who joined SpaceX

all personally interviewed by Elon.

Just think about that. Those are 3,000

hires.

Think about the number of interviews to

get the 3,000 hires, okay?

He

did not believe there was any other way.

And

what Steve Jobs used to say is that

A players

want to work with A players.

The moment you start introducing B

players,

B players will hire B and C players.

They will never hire an A player. So,

your downhill the journey's already

started the moment you get a B player.

And so,

as an entrepreneur,

you know, we have a lot of demands on

our time, right?

But, recruiting

has to be at the top.

And you've got to be willing to spend

inordinate amounts of time

on recruiting.

Okay? And um

There's you know, there are tools that

you can use. We use uh There's a company

called Caliper we use for pre-employment

testing.

And the thing is that

between the genetics of a human and the

first five years of the life experience,

who they are,

their traits are hard-coded.

That is not going to change from 5 to

95, okay? So, it's not like you're going

to change a human. Human is the way they

are, okay? Now, these pre-employment

testing tests

can get you data that you're not going

to get in an interview.

One of my companies I'm building at the

moment is called culturetest.com.

It's exactly this. Okay. Um

I mean, you're just like preaching

preaching to the choir here.

>> But, what I'm saying is that It It was

the most

>> we need to get really good at

recruiting. Yeah, it's my absolute

absolute obsession. And what I found out

is that, funnily enough, from doing

these culture tests. So, I've kind of

culture tested tens of thousands of

people in the general population now.

And the shocking part was, just to give

you some context on what it does, it

benchmarks our best-performing people

and how they make their decisions. The

assumption here is that culture isn't

the thing you come up with at the

offsite. Culture is how you would behave

on Christmas Eve when you get a text

message from a client. Like, what you do

there is your company culture.

Basically, it creates these questions

which simulate optimal culture in that

team.

And it puts you in that scenario and

says, "What do you do?"

This is probably a good point to talk to

you guys about culturetest.com, which is

the website we're about to launch for

anyone who has the responsibility of

hiring someone, which is probably

everybody listening. One bad hire can

destroy your entire company. So, we made

culturetest.com

so that you guys at home can spot those

red flags and avoid those hires that

might be the end of your business.

Culture Test will make you your own

personalized culture test so that you

can screen every single person that

wants to be in your team and your

current team members and people that

have left to see how they align. Just go

to culturetest.com

and put your email address in. And the

minute we launch, I'm going to send you

an email so you can try it before

anybody else.

So, recruiting is really important. And

I think the other thing is uh

we're willing to

hire people

who may not do things as well as we do.

But actually also what I have also found

is I have so many people on my team who

are better than me.

You know, they're better at many of

these things because it's not my natural

bent to do those jobs. So, that's really

when you get a huge bang for the buck

is you end up with team players that are

way better than you.

How do you think about firing people?

Cuz this is the other thing I've found

is slow, fire fast.

Founders really struggle with the fire

fast thing. And uh

it is very important

to fire fast.

I think fire fast is more important than

hire slow.

And you're doing the person a a service

because they may be exceptional in

another role

at another place.

So,

you are helping them

try to find that.

If

>> And you're helping your other team

members.

If I was trying to work for your

companies, it what is the one

non-negotiable? Like what is the trait

that I would demonstrate where you would

immediately not even consider me?

The most important is integrity.

Mhm. You know, I mean

we we want three traits, right? We want

intelligence,

we want integrity, and we want

willingness to work hard.

Right? And none of these three are

really negotiable. And what does

integrity mean in your definition? Well,

it's absolute honesty. It's pretty

simple.

You know, it's black and white.

And you conduct yourself with the

highest level of ethical standards.

So, on all fronts, when you're dealing

with a customer or

internally or externally, it's the moral

standards need to be very high.

When you think about your wealth, how

much of it has come from building

businesses versus being a great investor

of the capital that you managed to make

from those businesses?

I think currently most has come from

the investing side.

You're very well known for being a

really excellent investor over many many

many many many years.

I'll put a graph on the screen that I

found which I think shows

the returns of your investment strategy

versus the the Dow Jones. This graph,

Have you seen that one before?

I haven't seen it this way, but people

put up all kinds of things. Yeah. I

mean, all this says is that you're

extremely good at investing.

So, I want to know if I if I'm in

starting my investing career, I'm

working in a 9-5 job at the moment. I've

got a couple of thousand dollars in my

my bank account. How should I be

thinking about investing? Should I be

investing?

So,

there are um

there are three things that matter

in terms of getting a great outcome with

investing.

Um

starting capital,

how much the amount you start with,

length of the runway,

how long

are you going to invest the money, Mhm.

and the rate of return.

Okay, so

before I answer your question,

I want to

tell you a story.

So,

and this is a true story.

Um in 1623,

in New York, the

Native American Indians in New York who

owned the island of Manhattan,

the Dutch settlers wanted to buy the

island.

And so, they went to the Indians and

said, "We'd like to buy the island of

Manhattan. Great natural

harbors. It can be a great place for

us."

And the Indians and the Dutch reached an

agreement to sell the island of

Manhattan for $23.

And when people hear that, they think,

"Oh, the Indians got taken."

You know,

island of Manhattan for $23 is

ridiculous.

But, let's say

let's say the Indians had a trust

officer who they said, "Invest this $23

for the benefit of the tribe

and try to do a decent job, right?

Now,

there's something known as the rule of

72.

And the rule of 72 is a is a very

important rule and I wish they would

teach it more in high schools and

elementary school.

It tells us how long it takes money to

double and it's a kind of a mathematical

hack. So, for example,

if I'm going to get a 7% return

and I do 72 / 7,

that's approximately 10.

And at the 7% return, it's going to take

10 years for the money to double. 7%

compounded will take 10 years.

If I have a 10% return,

it will take 7 years.

72 / 10 is 7. If I have a 15% return,

it will take 5 years. 72 / 15 is 5,

approximately.

And if I have a 20% return, it'll take 3

and 1/2 years.

So, this rule of 72 is a nice hack and

it's very important to know how long

money takes to double because then we

can start doing a lot of math in our

heads.

So, when we look at these Indians with

the $23, if they were getting a 7 7%

return,

it would become $46 in 10 years.

And then it would become $92

in 20 years.

And

$184 in 30 years

and so on.

Now, if you go 100 years,

right? It's 10 periods of 10.

And 10 periods of 10 is 2 to the power

of 10.

And 2 to the power of 10 is 1,024.

So, we throw away the 24 because we

don't want to complicate the math.

So,

at 7%

for 100 years,

you would have 1,000 times what you

started with.

And this is why because compounding

becomes non-linear, people have a hard

time getting their hands around it. So,

Non-linear meaning? It's not going up in

a straight curve. It's going up in a

Hockey stick.

>> Hockey stick club, yeah. So,

in 1723, the Indians would have 23,000.

It had gone up a thousand.

And then if they continue at the 7% in

1823, they would have 23 million.

And in 1923, they would have 23 billion.

And in 2023,

they'd have 23 trillion.

Okay? Now,

the entire wealth of every man, woman,

and child in the United States is 150

trillion.

1/6 of that is not

undeveloped land in Manhattan.

So, if the Indians had invested at 7% a

year for the last 400 years,

they would have more money than owning

the land.

So, they were not taken.

They were given a fair deal.

But they just didn't have a good trust

officer who could actually make it

happen for them.

So, the

magic of compounding

is that we started with $23.

And we end up with 23 trillion.

Without having a great rate of return.

It's just an okay 7% is just okay. It's

not great. It's not bad, but it's okay.

Now, if you go back a hundred years. So,

we started at 1623, go back a hundred

years to 1523.

We had 2300 cents in 1623.

2300 cents? $23 is 2300 cents.

>> Oh, okay. If If they'd got it Just

convert it to cents instead of dollars,

right? Now, if you

make it 1/1000 of that. So, just so I'm

clear here. So, if you're saying if you

went back 100 years from that point and

you gave them just 23 cents.

>> If you gave them 2 cents. If you gave

them 2 cents. 2.3 cents to be exact.

But, if you just gave them 2 cents Yeah.

100 years later, they would be $20.

If you gave them 2.3 cents, 100 years

later they'd be $23 and now it would be

the 23 trillion, right? So,

what I'm trying to say is that

if the runway is long enough,

the starting capital doesn't matter.

Even the rate of return doesn't matter.

If the runway is long enough. Now, so

when people are thinking about

investing,

they have to keep a few things in mind.

The first thing is spend less than you

earn.

So,

always try to

save the first dollar rather than the

last dollar.

So, if you are making $50,000 a year,

put 5,000 into savings to start with and

then

do the rest of your expenses after that.

Now,

it's very important when we saw with

this example, you start young.

So, when people start working at 22 or

23, whenever they start working,

they have to be saving then.

Because that early money at 22

can compound for 50 years.

And that's what we want. So, we don't

need to do heroic things

with finding the next Nvidea or whatever

else.

We can just put it into an index

and the important thing is spend less

than you earn and keep putting that 5,

7, 10,000 every year

into the savings. Don't go have a

vacation on Hawaii with it.

Let it keep compounding and just put it

into a broad index

and we don't really

So, for someone who has never invested

before, Yeah.

>> which would probably be the majority of

the audience, how do we simplify even

further in terms of just put it in an

index? What does that mean? So,

basically,

you could open an account at

Fidelity or Interactive Brokers or

Robinhood, any of these places. You

could open a brokerage account for very

little money. And there's lots of them

in every country. Yeah, and then you

could just uh

ask them to give to buy you the S&P 500

index, for example. And they will get

you invested in that.

>> And the S&P 500 is basically the top 500

companies in

>> It's the Yeah, the 500 dominant

businesses in the US.

Like Nvidia's in there and Microsoft and

Apple and so on. And you're going to get

your 10% a year if it if the trend holds

over the last century. The S&P has

plenty of periods where it does nothing.

Uh it's somewhat overheated right now.

Uh but I think if you have a long enough

time of time horizon and you're dollar

cost averaging in, it's perfectly okay.

Uh

what you could also do as an alternative

is buy Berkshire Hathaway.

So, that's a stock, BRKB. So, you could

again tell these people that just put it

into Berkshire Hathaway. It's like an

index.

And And again, it's like set it and

forget it. You don't need to think about

the investing side. You

focus on yellow,

okay? And keep putting this little money

away on the side,

and it's going to compound. And so, at

18,

if you put away $5,000,

and you fast forward to when you're 68,

50 years later,