How important is this tariff situation?

It has a potential to be the biggest

economic story of our lives. People are

losing a lot of money on tariffs and

you're probably a matter of weeks away

from empty shelves. And there's a button

on the president's desk that says end it

right now. So, can you tell me what a

tariff is? I'll keep this very simple.

Morgan Housel is the money mindset guru

who's shaking up everything you think

about wealth and how to achieve it. I

looked at the most Googled questions

around money and one of the most popular

is how to achieve freedom financially.

It is largely a mindset. You have an

obligation to understand how money works

and how to manage it. And it's one of

many topics in which you're going to

learn the best by experiencing the

downside.

We'll come back to that.

question is how to save money. So, most

people view saving money as it's just

wasted sitting there. But you need the

cushion so that when the economy goes

south and there is a recession, I want

to have a level of control over my

ability to support my family.

So, how much money do you think it's

sensible to have to save?

This is a bad answer that no one's going

to like, but

When you look at all these people

through history that have generated

great wealth, are there like certain

strategies they've deployed?

One thing that virtually everyone

listening this could learn from is they

were way more patient and had way more

endurance than anyone else. Also, I

wanted to understand investing and this

idea of compounding interest.

So, compound interest is the most

misunderstood thing about investing

because that's what builds wealth. If

you look at like Warren Buffett, he

wouldn't want to get haircuts because if

he invested that money and leave it

alone for 50 years, in his mind a

haircut would cost $10,000. And then, do

you recommend people try and buy houses

or is it just to rent those houses?

So, the truth is

This is always blown my mind a little

bit, 53% of you that listen to this show

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for you every single week. We'll listen

to your feedback, we'll find the guests

that you want me to speak to and we'll

continue to do what we do. Thank you so

much.

In 2020, my older brother Jason came to

me after spending more than a decade

working in the finance industry and he

said to me, "Steven, there is one book

you need to read to understand money."

And that was your book, The Psychology

of Money, and that's how I came into

your world and understood who you were,

what you think, and

really this book has shaped how I think

about money ever since. And this is why

I loved having you on the show last

time, but I was insistent to speak to

you again with everything that's going

on with the in the world right now.

Morgan, what is the most important thing

we should be talking about at this

present moment based on, I guess, the

subtitle of this book, Timeless Lessons

of Wealth, Greed, and Happiness?

Thank you, Steven. So, it's so so good

to be back. I think what's what I like

about what you just said, and thank you

for for that, is that you said the book

changed how you think.

And that's important because the book

does not tell you what to do. Nowhere in

the book do I say, "This is how you

should invest your money. This is how

you should spend your money." Because

you're different from me and everyone

else. We're all different. I've always

just been interested in how people

think. Like, what's going through your

head when you're making investing

decisions? And if you can understand

greed, fear, risk, envy, jealousy, those

topics, that is way more important than

anything they will teach you in a PhD

finance course at Harvard. Not that the

the technical stuff doesn't matter, but

the psychological stuff with money is

everything. I mean, so much so many

money problems in the real world have to

do with impatience, envy,

greed. That that's it. It's not that

people don't know the formulas, don't

know the data, don't know, you know, how

to calculate compound interest by hand.

None of that matters. It's envy. It's

It's impatience. And so, that as a

writer, that's what I was always

interested in.

Like, I'm tired of people giving advice

and saying these are the stocks you

should buy and here's what the economy's

going to do next quarter. I was like, no

one was any good at it. But I was always

just fascinated in what's going on in

people's heads. And you asked, "Why is

that important right now?" Well, I think

it's always important. Like, those

topics of, you know, the the subtitle is

timeless lessons because I think a lot

of these things were as true a thousand

years ago as they will be a thousand

years from now. Like, greed and envy and

impatience is just ingrained in how

people think. It always has been. And

so, you see what's going on right now

with

tariffs, and the economy, stock market's

gone up a lot, Bitcoin's gone up a lot.

So, these points have always been true,

but a lot of them are magnified right

now. A lot of people made a lot of money

on Bitcoin. A lot of people are losing a

lot of money on tariffs. So, greed,

fear, envy, it all kind of just collides

that it is right now. How important is

this tariff situation that we find

ourselves in? Because we're seeing it

all over the news everywhere, tariffs.

Trump's done this, 10% here, blanket

tariff here.

Does it matter? And maybe even more

specifically, does it matter to the

average person? It has a potential to be

the biggest economic story of our lives.

It doesn't have to be. One thing that's

very interesting about the tariff story

is that if you compare it to 9/11 or

COVID or 2008, the banking crisis, the

tariff

issue that we're going through right now

can be ended in 1 minute. There's a

button on the president's desk that says

end it right now. And even you know, if

that did happen, there would still be

some lingering damage in terms of trust

and reputation, but there was no button

on the president's desk for COVID that

said end this all right now. It didn't

exist. And 9/11 and Lehman Brothers in

2008, once those risks hit, we just had

to deal with them through their finish.

This is different because it it can and

is changing by the day. So, when people

have a take on what's going on right

now, that might that take might be stale

an hour from now. But it's absolutely

true that the global economy, to an

extent that I think people don't

appreciate enough, is a very complicated

intricate machine. And most economic

problems come when people like try to

fiddle with that machine a little bit.

They're like, "Oh, let's turn this dial

by 1° and see what happens." And then

like, "Oh, it blows up. Oh, I shouldn't

have done that." Tariffs is like, "Let's

hit with a baseball bat a couple times.

Let's hit it with like a crowbar and see

what and see what happens." Like, the

global economy is so interconnected and

if you go to your local grocery store,

Target, or Walmart, whatever it might

be,

and and go around and look at where that

stuff was made.

It's I mean, and it's all over the

world. It's like very like it's it's

everywhere and once you shut that down

and put barriers on that, it can become

a a big problem very quickly. One thing

I've noticed in the last couple weeks

that I think is very interesting are the

number of educated and smart friends

that I have who send me a text or a call

or an email say, "Hey,

can you explain what a tariff is? I see

this word, but I don't really know what

it is. And I think that's important

because I don't think the average person

understands what can happen to the

economy if this persists for a long

period of time."

I'm so glad you said that because I've

been waiting for weeks now to ask

somebody like yourself who studied

economics

to explain in a simple way what a tariff

is and feel free to use an analogy. I I

think about 50% of people have no idea

what a tariff is.

Yeah. And then on a sort of an

incremental scale, um people's clarity

gets better and better to I I would

estimate about 5% of the general

population could articulate what a

tariff is, 5% or less. So, can you tell

me what a tariff is?

The first I would say is tariffs have

been used for hundreds of years and

there is there can be a very good useful

purpose for them in the economy. I think

as they're structured right now in the

United States, it's a huge mistake. It

has a potential to be a catastrophe. But

they can be a useful thing in the

economy. This is not a black and white

thing. What a tariff is is let's keep

this very simple. The United States buys

a bunch of computers that are made in

China, bunch of iPhones that are made in

China. They're on a container ship, they

ship them to the United States. When

they get to the port in the United

States, the importer, which is Apple,

bring the iPhones in that were made in

China. An American company.

has to pay the tariff Oh, that's okay.

on it. And a lot of people, and it's

it's very understandable why they would

think this, would say, "Well, no, in

that situation China pays the tariff."

And there could be a situation where

China starts discounting the iPhones,

the the the the company that's making

the iPhones would discount it. Like,

there can be some offset. But the person

who's paying that tax is the importer.

So, often we think about we've applied

the tariff to China. Right.

So, what's happening is China having to

spend the 10% or I think the tariff

is like 125, 100

145. It It The number doesn't matter

because trade will eventually will just

stop at those levels. It just won't

happen. So, if Apple import an iPhone

now with that tariff level, then Apple

would have to pay the 145% when it

arrives at the shore

Correct.

United States. And here's here's an

example that most people will

understand, sales tax. You know, in in

most states in the United States, it's

uh 6 to 10%. If you go to the store and

buy something, you would add the sales

tax to that.

VAT in the UK.

Ex- yeah, fair. But who pays that is not

the store, it's the customer. So, even

if the tax is put on the seller, the

seller passes it on to you, the

customer. And says right on your

receipt, you bought something for $10

and then there is a there's your sales

tax and here's what you're going to pay

in the end. And so, it's similar from

that. Now, the the let me explain this,

why there would be a very useful case

for tariffs to show that this is not

black and white and this is not, "Oh,

all tariffs are bad." This this happened

in the United States during COVID. We

were virtually 100% reliant on masks and

N95 masks uh that were made in China and

Korea and not in the United States. And

so, when you have a medical crisis in

the early days of COVID and we're like,

"We need hundreds of millions of masks

yesterday." They're all made somewhere

else. We do not want to be in that

situation. So, it would absolutely make

sense to have a tariff on masks to make

sure that they are so expensive to

import overseas that we have to start

making them in the United States. That

makes sense. Same with military

equipment. You do not want to go to war

with a country and be reliant on that

country to make the your military gear,

your bullets and your bombs and your

tanks and whatnot. Absolutely makes

sense to have a tariff on that to make

sure they're made in the United States.

That said, so it's not black and white,

but to have a blanket tariff and say

everything that comes from any country,

anywhere in the world, and China's going

to be this to an extreme degree, is

going to have a tariff on it. And

whether that's between 10% for all

countries or 145% from China, that you

know, I I've used this analogy before

that if you talk to dietitians,

there is a huge amount of debate over

what's the best diet should you eat.

Should you be

uh keto, should you be vegan, like

everything in between. They don't

There's so much debate.

All of them agree that processed sugar

is bad.

Nobody Nobody thinks processed sugar is

good. And tariffs are that with

economists. Like there are so much

debate among economists on what should

the tax rate be, what should subsidies

be, should we you know, like what you

know, like a free market versus you

know, versus subsidies. There's so much

debate.

No serious economist thinks that you

should have a trade war.

And the thing is this is not new. We've

been doing this for hundreds of years.

And it's very well known that in the

1930s, the Great Depression, we took put

huge tariffs on in the early days of the

Great Depression. Uh they didn't know it

was called the Great Depression back

then cuz we put them on and it shut down

global trade.

And it's easy to think that

if you put tariffs on your own country,

that will make it easier to manufacture.

Like all those jobs that we shipped

overseas of building cars, they're all

going to come rushing back to America.

And it it very rarely happens like that

when you have a trade war. But what I

mean by trade war is we put tariffs on

China, they respond to put tariffs on

us, and you just go tit for tat, and

it's and you go back and forth, and it's

like mutually sort mutually assured

destruction in economic terms.

So why is Trump doing it then in your

view? Because he's given lots of

reasons. He said that they're ripping us

off. He says lots of countries have been

ripping off the United States. How do

you unpack what he's saying there, and

what do you believe the true reason is

underneath there?

To his credit, Trump has been very

consistent on this for literally 40

years. You can go Go on YouTube. He gave

an interview in I think it was 1986. He

went on Oprah in 1986 talking about how

free trade wasn't free, and that Japan

and other countries were ripping us off,

and that the the solution to it were

tariffs. So he This is not a new view.

This has been a lifelong quest that he's

had.

I would say not necessarily Trump's

views, but I would say it absolutely

makes sense that there is a large chunk

of America that looks back to the period

of 1950s, 1960s when we were a

manufacturing powerhouse and says

that was better than what we have now,

and we should go back to that. I get why

people would say that cuz it's true that

we have lost a lot of manufacturing jobs

in the last 50 years. I think

manufacturing jobs peaked in the late

1970s,

and we've lost something like 10 million

manufacturing jobs that we had you know,

versus what we had back then. And I get

why if I was in that situation, I would

probably feel the same.

Where I'd push back

is

the situation that we had in the 1950s

and 1960s where it was just America

manufacturing powerhouse, were a very

unique period that I think is virtually

impossible to bring back. And I'll tell

you why.

At the end of World War II, 1945,

Europe and Japan were in rubble. They

were decimated from the war.

America was not decimated whatsoever.

And so we had basically a a global

manufacturing monopoly for a period of

time. China was not in the equation.

South Korea was not in the equation.

India, Bangladesh, those they were not

in the in the equation. It was basically

Japan, the United States, and Europe,

two of which were just struggling to

feed their citizens, and once they got

that under control, it was like we have

to rebuild the damage from the war. So

America had about 20 years from 1945 to

the mid-1960s of

we have a manufacturing monopoly. And

then we had 16 million US soldiers come

home from the war. And there was so much

pent-up demand for them to buy homes and

washing machines and cars and radios and

all these things, and all of them were

built in America because nobody else

could build them.

And that created a really special time

when like because we had a manufacturing

monopoly, it was just like factories

everywhere. We built up so many

factories during the war. There was

endless demand for those products. And

this is This is an important part, too.

White-collar workers during that period

didn't make that much money relative to

what they did before or since. And that

was important because the wages that the

blue-collar manufacturing workers were

earning felt great by comparison. So if

you were an auto worker in Detroit, and

you compared your wage in 1955 to the

local accountant or dentist or doctor,

by comparison relative to today, you're

like, "Oh, that's it's pretty good.

Yeah, the doctor makes more than me, but

not that much more than me, you know? I

drive a Chevy, he drives a Cadillac. His

is a little bit nicer, but we're living

mostly the same lives." And so I think

that was a lot of the feeling of

prosperity in the '50s and '60s was this

very unique period of

manufacturing monopoly as Europe and

Japan were rebuilding, and by comparison

to other workers, it felt amazing.

And then at about the 1970s, Japan and

Europe had gotten themselves back

together from the ravages of World War

II, and they became manufacturing

dynamos in their own right. And I don't

think we really understood this in

America until three companies came in,

which were Toyota, Honda, and Nissan.

And they started selling cars in

America. And at first, it was very easy

to be like, "Look at these little like

lawnmower toys that they're importing."

Cuz you you compared like a early Honda

Civic to like a Chevy Camaro in the

'70s, and it was like you can't even

compare them. So at first, the reaction

of American car companies were like,

"These guys are a joke. No one's going

to buy these little cars." But then gas

prices surged in the '70s and '80s, and

all of a sudden, the cars that Americans

wanted was the tiny little Honda Civic

that got really good gas mileage. And

then once they started buying them, they

were like, "Hey, this Toyota, this

Honda, this Nissan, it's actually a

pretty good car. It's actually pretty

well built." And I think there was a lot

of denial among that among

American manufacturers

that other these other nations that we

that didn't exist for 20 years in terms

of a global manufacturing source were

actually pretty damn good at it now.

And then one other thing happened to to

wrap to wrap this up, and this might be

the most important part of it.

The reason that you cannot reasonably

expect the manufacturing powerhouse to

come back as it was

is yes, we did ship jobs to

China and Mexico and Canada and India

that used to be in America, and that has

contributed to the massive decline in

manufacturing employment. But a bigger

factor in there is automation.

And if you look at a like I I I would

challenge people to do this. Go on

YouTube and look at a Tesla assembly

line in the United States.

I'll put it on the screen. It is What

you will see, it's amazing. It is a

miracle of engineering. What you will

see are armies and armies of robots and

very few people.

And if you compare that to the 1950s

assembly line, what you see are biceps

and backs and people hauling around

material. So because we got so good at

automation,

even if we bring manufacturing back to

America, and then we still do a a lot of

manufacturing in America, it doesn't

require the amount of employment that it

used to. It doesn't require the amount

of manpower. And the people who do work

on Tesla manufacturing lines by and

large are working on computers

overseeing the robots.

I mean, here's one stat that I thought

was always interesting to me. In 1950,

there was a US steel plant in Gary,

Indiana.

It produced 5 million tons of steel and

had 30,000 workers. Today, it's still

operating. It produces 8 million tons of

steel

and has 2,000 workers.

So it's producing more steel today than

it was in the 1950s, and it went from

30,000 workers to 2,000. Because what

used to be done with biceps and backs

and shoulders is now done with machines

and robots.

And it's no different than what happened

in agriculture, where a farm 200 years

ago was

rakes and shovels, and today it's

tractors and combines. Like that same

thing happened to assembly. So to wrap

all that up, like I understand and I

empathize with people who say, "We need

to bring back manufacturing to America.

We lost what we once had." I get that

and I respect it. But I think the unique

circumstances and automation makes it

just extremely unlikely to ever happen.

How did China get in that? And

why are they the factory of the world?

What are the cool components that went

into them being able to produce all of

the things that we use on a daily basis

at a fraction of the price that they're

able to produce them here? Tim Cook of

Apple gave a really interesting

interview a couple weeks ago, and he

said, "You might think that we

manufacture iPhones in China because

it's it's cheap labor."

And he said, "That's not really true

anymore. It used to be, but China is not

the cheap cheap labor country anymore.

That's moved on to Bangladesh and

Cambodia and other places. The reason

they manufacture in China is expertise."

And I think it's okay to admit, and

people should admit, that your country,

and also your company and you

individually,

can be very good at some things and not

very good at others. China is just

extremely good and extremely talented at

particularly like low-end manufacturing.

Low-end can be anything from, you know,

inflatable swimming pools to on up to

like basic basic electronics. They're

They're extremely good at it. I was

talking to a CEO a couple weeks ago, and

he said,

uh and he's generalizing here, but he

said, "If you go to a a Chinese factory,

and you say, 'I want this part made, and

here's step one, step two, step three on

how to make it,' they will do it better

than anybody in the world. Nobody can

beat them at that. But

if you go to that same factory and you

say, 'Please go design me a new part,'

they're not very good at it. Americans

are way better at that. And that's why

the back of your iPhone says designed in

California, made in China. Like it's

just specialization of labor. And I

think America is the best in the world

at a couple things.

Entrepreneurship,

technology,

services, and like high-end

manufacturing like planes and rockets.

And we're not the best in the world at

low-end manufacturing. And that's okay,

that's not an insult, that's not a

put-down. There's specialization of

labor.

And and so I I think that I think China

just got very good at one thing during a

time when we've always been very very

good at at at different things. And I

think that is why global is like why

for a lot of people, not for everybody,

so if you disagree with this, I I get

it, but why the economic system works so

damn well over the last 30 years is cuz

we really got good at specialization of

labor. You design the iPhone, you make

the iPhone, we're both better off for

it.

I want to play that clip you're talking

about with Tim Cook because I remember

seeing it as well and it did it was a

bit of an aha moment for me. For anybody

that doesn't know, Tim Cook is the CEO

of Apple and he's been at the helm of

Apple for more than a decade and as you

know, most of Apple's products from what

I understand are made in China. There's

a confusion about China that uh and let

me at least give you my opinion.

The the popular conception

is that companies come to China because

of low labor cost.

I'm not sure

uh what part of China they go to, but

the truth is China stopped being the low

labor cost country many years ago

and that is not the reason to come to

China from a supply point of view. The

reason is because of the skill

and the the quantity of skill in one

location and the type of skill it is.

Like um

the products we do require really

advanced tooling.

And the the precision that you have to

have in tooling and working with the

materials that we do are state of the

art. And the tooling skill is very deep

here.

You know, in in the US you could have a

meeting of tooling engineers and I'm not

sure we could fill the room.

In China you could fill multiple

when I watched that, I think that I I

can understand why there'd be a natural

reaction for people to be like, "No, if

they can do it, we can do it, too." And

again, I I don't think it's an insult

when it to say like countries are like

we're really good at some things and

less good at others. How could that not

be true?

Are they on a different living wage?

From what I understand is that they have

to

I mean, so much of it is, you know, in

you know, if if you asked Americans to

work those for those wages, they they'd

absolutely refuse to do it just because

of the expectations we have and that's a

good thing. We should be proud of that

that we have a standard of living which

does not does not allow or or people

would not put up with earning

$5 a day or whatever it would be. Which

means that the products can be made

cheaper. Yes. Significantly cheaper.

Right, right. And you know, this is

where I I understand why people might

raise an eyebrow at this, but so much of

why

of what the modern system how it's

supposed to work is when you have that

specialization, products become cheaper.

And then the iPhone costs $1,000 when in

any other world it would cost $4,000 if

we're building it in the United States

at you know, paying wages that people

would put up with in the United States.

So, what's the impact on the average

person listening to this now?

And

if this trade war continues, if these

tariffs continue,

what is the impact they're going to see

in their life? It's so unpredictable cuz

as I said earlier, it can literally

change an hour from now. So, anyone

giving firm predictions of oh, here's

what's going to happen next, that that's

not how any of this works, but you can

you can say though that if the tariffs

last, one of two things will happen or

both of these two things will happen.

Things that we import will get much more

expensive or what's more and more likely

in places like China if it's 145% is

well as the the trade just stops. And

then you're probably a matter of weeks

away from empty shelves at at certain

for for certain products in certain

cases. I mean, if you're buying, you

know, a pair of slippers from China for

$1 and now all of a sudden they're

$2.45. If you're if you're an importer,

for a lot of the situations they'll say

like we're just it's just not going to

work. Or if the iPhone that used to cost

$1,000 is now going to cost $2,500,

Apple might just say there's not really

a market for that. We can't really sell

those. Let's just pause and wait for

things to happen. We're already seeing

that. Um I'm sure this news will change

by the time this airs. This is moving so

quickly, but our shipping container

imports from China have plunged in

recent weeks, which is exactly what you

would expect when you put that high of a

tax on it. I mean, if you were buying a

house for a million dollars and all of a

sudden they put on a 145% tax on that,

you're probably not going to buy the

house. And that's what's happening now.

You'd be dumb not to wait.

Right.

I was sat here yesterday with the CEO

and she said to me that she gets

the majority of her products, pretty

much all of them from China and when

she's looking at the tariff situation,

she's figured out that if she buys those

products and sells them at her current

price, she's losing money on every unit.

So, she's like, "I'll lose $9 on

importing a for example like a dress.

It's like I So, I have no incentive now

to continue to sell that dress and if I

the money choice is to

raise the price by like 150% to my

customer."

Right.

The two likely outcomes if it persists

are much higher prices and empty

shelves. And then and then I don't think

anyone knows when or to the extent that

could happen and the button on the desk

that says end this all could be pressed

before that happens. But if it persists,

that's what's likely to occur. What

about the impact it has on trust in the

United States? Because

Yeah, it's huge. I mean, it's Can you

explain that to me?

Trust is hard because you don't know how

valuable it is until you lose it. But

once you lose it, you're like, "Oh, that

was everything."

And you know, foreign investors, people

who don't live in the United States,

have $30 trillion invested in America.

That's just in stocks and bonds. That's

not housing or office buildings, just in

stocks and bonds, $30 trillion that

they've invested. And a lot of the

reason they do that, well, there there's

many reasons. One of which is because

it's by and large seen as a trustworthy

economy, a stable economy, an economy of

rules and predictable laws and trust

that you could not say the same about

Russia.

And so when when global investors are

looking where to park their money, it is

this has been the case for the last 80

years, America's usually at the top of

that list. There's also a thing where a

lot of the reason that they invest money

in the United States is because they

have to because they have a trade

deficit with us.

So, if

China is selling us a lot more stuff

than they're buying from us. Like we're

we're importing a lot more from China

than we're exporting back to them.

They're going to end up with a lot of US

dollars.

And what they need to do something with

those dollars. They have they have to

invest them somewhere and historically

that's been in treasury bonds, which

lowered our interest rates and that was

good for everybody. And what's a

treasury bond? It's debt that the

government issues from the federal

government. So, it's a bond you're

you're loaning money to the government

and they're promising to repay you plus

interest. Okay. So, less people are

going to do that if they have less trust

in the United States. Less trust and

also less need to do it because they

don't have as many dollars that they

need to invest.

Are we heading for a recession? Because

I I saw some stats earlier on that said

the probability of a recession has

surged by 45%, which is the highest

since December 2023 because of the

tariffs. That was from Reuters. It's

interesting when people point like the

odds of recession at 45% because they

can't be wrong. Like if if there isn't a

recession, they'd be like, "Yeah, we

said it was 45%. We didn't say it was

going to happen." So, I my answer if you

said are we heading for a recession

would always be yes. If you asked me a

year ago, if you asked me 5 years ago,

like historically there's a recession.

In modern times it's been every every

four to five years that that it's

occurred. And so, we shouldn't pretend

that when they happen that they're this

crazy out of the blue thing. It's an

inevitable feature that you're always

going to have recessions. But is this

going to cause it? What is a recession?

A recession technically is when GDP in

the economy GDP is just like economic

output. How much the economy is is

moving. When that declines for two

quarters in a row, that's the technical

definition. For most people, you don't

need to worry about technical

definitions because a recession in your

mind is when you are feeling worse off

economically for a long period of time.

When you feel like you can't get a job

or your neighbors, your roommates can't

get jobs and and it's and it's it's

starting to hurt on you. It's you know,

it's kind of like what's the definition

of being sick? Well, it's when you don't

feel good, but there's you you you can

get more technical than that. But a

recession for most people is when you

don't feel good economically.

You're not concerned about a recession?

I it's not that I'm not concerned, but

it would be like saying if you live in

Florida, are you concerned about

hurricanes? The answer is yes, you

should be concerned about hurricanes,

but you also know with 100% certainty

that they're going to come. If you

choose to live in Florida and you live

in Florida for 40 years, you know you're

going to get hit by one, 100% chance.

And so, it's not that I don't worry

about it, it's that I think it is

inevitable.

Always, no matter what's going on. This

has nothing to do with tariffs with uh

tariffs, that's always been the case.

And so, this is where

at the individual level, personally,

like room for error in your finances is

so critical. What I mean by that is just

like savings, cushion, being scared of

debt. It's when everyone is when you're

well when you're gainfully employed and

you have a good paycheck and the stock

market's going up and Bitcoin's going

up, everyone feels great. You feel

amazing. And nobody It's very rare in

that situation that you want to envision

yourself losing your job

or losing a job and not being able to

find another one for 6 months or needing

to move or getting divorced or having a

medical illness. No one wants to

envision that.

But the truth is like what are the odds

that

one of at least one of these will happen

to you and I over the next 30 years?

Major job loss or just major impact in

in our businesses, divorce,

cancer, wayward children. I can go on

down the list. What are the odds that at

least one of those will occur to you and

I in 30 years? 100%. Yeah. And for a lot

of people they'll experience all of

those.

And so, the idea that life is fragile,

the economy is fragile, countries are

fragile

is like people don't necessarily want to

admit that because it's hard to get out

of bed in the morning if you admitted

that to yourself.

But I I think it's inevitable and it

doesn't have to be necessarily scary if

you have the right like psychology

around it of just yeah, like when times

are good, I don't expect them to last

forever. That's not how the world works.

And the right finances around it of like

yeah, when times are good, I'm going to

save because I know this might not last

forever. And what I value more than

anything with money is independence.

It's not flashy cars or homes. I want to

be independent. So that when the economy

goes south and there is a recession and

things are going bad, I want to have a

level of control over where I work,

where I live, what I'm able to do, my

ability to support my family. That's

more than that's that's the top of the

list. And so when things are going well

and for a lot of people they haven't for

the last couple years, but for a lot of

people they did. I think that's always

important is like I think I think it's a

major psychological skill in life in

general. This goes beyond money is

recognizing when things are abnormally

good and preparing yourself for them to

go the other way as they as they

inevitably will. Independence you value.

It sounded like freedom to me. Yeah.

Can you tell me

how to achieve freedom financially?

And what I should be thinking about in

the context of a world that's changing

at such incredible speed when we're

talking about tariffs and recessions and

now AI. I've been thinking over the last

couple of weeks like what should my

personal financial strategy be? How

should I be thinking about it? Is it a

strategy? Is it a psychology? Is it a

mindset? What is it that I should be

thinking about to survive this area of

tremendous change and Trump economics

and get through the other end with that

freedom and independence that you and I

both desperately value. This sounds like

such a a squishy BS kind of answer, but

I think there's a lot of there's a lot

of truth to this. I'll explain in a

second. It is largely a mindset.

And that that sounds crazy, but I'll

explain what I mean. My

grandmother-in-law, she passed away a

couple years ago. She was 92 when she

passed away. She for 30 years, she lived

off of nothing but social security. I

think she got $1,700 a month from social

security and she had nothing else. No

savings, no pension, no nothing. She was

the happiest person you'll meet. I've

met half a half a dozen billionaires in

my life. I'm sure you have as well. None

of them were as happy as she was. And

she was technically like she was like

financially broke, but she had this

level of psychological wealth that was

like unparalleled. And the reason was

off $1,700 a month, that was all she

needed. She was perfectly happy

toiling in her garden, watching birds,

going for walks, hanging out, reading

from books in the library. Perfectly

content with all of that. She didn't

need anything else. So she had very

little money, but she wanted even less.

And that so like she had a level of

independence that a lot of billionaires

do not. Because if you are a

billionaire, if you have a billion

dollars in the bank, but you are so

encumbered by your business, your

employees, your suppliers, your

customers, you're waking up at 3:00 in

the morning sweating cuz you got this

email and you're stressed out about it,

you actually have very little

independence in that situation. Your

shareholders, regulators are coming down

on you. I mean we see this I'm not

there's no one in in particular here,

but we've seen very wealthy people kind

of become sycophants to politicians. And

and the truth is a lot of those like

mega billionaires

absolutely rely

on politicians and regulators to keep

their machine moving. And so my

grandmother-in-law on $1,700 a month had

a higher level of independence than a

lot of those people do.

And I that's why I think I say like a

lot of this is a mindset because the

truth is the vast majority of people

listening to this could have a level of

independence. It's not it's not that you

can retire tomorrow, but you can have a

level of financial independence once you

realize that the key is managing your

expectations more than it is how can I

just pile up as much money as I as I

possibly can. It's easy to think like

how do you become financially

independent? Like save a ton of money.

And there like there's truth to that of

like of like of course that's part of

it. But more of it is just in like what

kind of life do you want to live?

Because if your

expectations are growing faster than

your net worth, it's never going to feel

like you you'll never be independent.

Never. You have a hundred billion

dollars, but if you want more and more

and more like it's it's never going to

feel like it's enough. Or if if you

enjoy bird watching and reading books

like my grandmother-in-law, 1,700 bucks

a month, you're all set. You're set for

30 years. You're rich. You're rich.

I'm free. She was psychologically rich

even if she was financially poor. And I

think that's that's the biggest thing

about it. Adam Smith, who was the

greatest economist to ever live, this

was 300 years ago, he once wrote about

this. He was like, why do people work so

hard?

And he he was just like this is a simple

question, but why why do people work so

damn hard? And he's like it can't just

be for

for our sustenance because even poor

people, I mean as he was writing about

it, had homes and adequate food most of

the time. He's like there has to be

something else. And what that something

else was, he wrote, was

to be seen by other people.

And it was it was like it was attention

and admiration. They wanted to be

getting rich so that they could have a

bigger house and a and a nice car, I

mean not in his day, but they they

wanted to be they wanted attention from

other people. But he was like it's not

that you needed the money because even

in his day 300 years ago in in Scotland,

I think he was, he was like look, people

have homes and food. Like what what what

what are they doing this for? And he was

not criticizing them. Like his whole

point was like they're going out and

innovating. They're going to have great

technology and like it's great to go do

that. But the reason to do it was not

because they had to stop. Now of course

most people to get shelter and food do

have to keep working, but they're

working more than they absolutely need

to because they want something else

besides independence.

Is there an evolutionary basis for this?

I was I was thinking the other day after

watching an interview with Naval where

Naval talks about how

from an evolutionary perspective, humans

don't really understand the concept of

wealth because once upon a time when we

were cavemen and women, wealth was what

you could carry. But we do understand

the concept of status, which really

meant a lot to us in our sort of tribes

and was life or death for many of us. So

even though the billionaires get all the

money in the world, the next thing they

want to do is start a podcast. You know

what I mean? Right. Right. Because

that's just not enough. Like everyone I

know is trying

what a lot of them do too is when they

have all the money in the world, what

they want is immortality. And you see

these guys trying to live forever kind

of thing. So that happens as well.

That's interesting. But that's linked to

status cuz status was longevity. Yes.

Like if you had status, you had food,

you had the reproductive potential once

upon a time. Yeah. So it's the same

evolutionary sort of desire to like live

survival. Yeah. Harvey Firestone, who

was a tire magnate a hundred years ago,

Firestone tires during the explosion of

cars a hundred years ago, he wrote about

this in his biography. He was like every

rich person he knows once they get money

buys a house that is way too big than

they need. Not not not not only bigger

than they need, bigger than they want

because a giant house is just a huge

pain in the ass. The roof is leaking and

like everything's breaking down. It's a

huge pain to manage. So he wrote his

biography. He was like, why do we do

this? And he was like I he was he he did

it too. He's like I bought a house that

is way bigger than I want and it's a

pain. It's a burden. But we all do it.

And he's like, why? He's like it has to

be status. There's no utility to a 40

bedroom house. Zero. There's a lot of

downside and upkeep. But he's like every

one of us does it. And he see he said

even Henry Ford, who was like the

cheapest SOB out there, lived in a giant

mansion in Detroit. He's like it's so

natural. And he was like it's just

because we we we want to show other

people. It's not utility. It's not

making our lives better. It's actually

making our life worse. But we we have

this evolutionary desire to show people

that we made it. That's that's the

calling card.

But if it's hardwired, then is there

much we can do about it?

I think it's true that virtually

everyone who I really admire in life,

they're by and large they're not hugely

successful people that you've heard of.

They're just people who I've met and

they're ordinary people with ordinary

jobs and I'm like man, you seem like

you've got it all figured out. They took

themselves out of the system that they

were supposed to be in. And they're like

I'm going to go figure out my own way.

And there's a really interesting story.

A guy named Chuck Feeney. He started a

company called DFS, the duty-free stores

in airports. He made I think at the peak

of his wealth he was worth about nine

billion dollars. And this was like in

the 90s when that was a that was a lot

of money. Still is a lot of money. But

he the the well-known part of Chuck

Feeney is that despite that wealth, he

lived like an ordinary person. He lived

in a like a one bedroom apartment. He

flew coach. He drove like a a small like

a normal car. Lived like a normal guy.

And some people criticized that from

that. He he gave all of his money to

charity. He gave nine billion away.

Lived like a monk himself. The less

known part of Chuck Feeney that I think

is is very is is more important is that

when he first got wealth, became wealthy

in 1980s, he lived the life of a

billionaire. He had a fleet of private

jets. He had mansions all over the

world. He had a yacht. And after doing

it for a couple years, he was like, I

don't like any of this. He's like I I I

like being an ordinary simple person.

And so I'm going to go live an ordinary

life. I don't care what the world the

world tells me this is what I should

want now that I have money. But he's

like, but I don't. I want simplicity.

And what I like about that is not that

he chose to live like a monk because I I

personally wouldn't want to do that. If

I had that I I I would have a jet if I

had that kind of money. So it's not to

say that he did it right, but what I

like that he did is that he said, I

don't care what the world tells me to

like.

I'm I'm I'm I'm going to do it on my own

terms. And that like that's true

independence. That's true status

that's true status, too. He's like, I

don't care. That's the ultimate

definition of FU money. Of like so much

money that like I don't care. You you

tell me I'm supposed to live in a

mansion in Beverly Hills, but I like my

one bedroom apartment in San Francisco.

I like my buddies over here. Another

person who's done that to a very real

extent is Warren Buffett. Lives in the

same house today that he bought when he

was 27 or whatever it was. And he's got

a hundred billion or something. Right.

And of course he could live anywhere. He

could buy anything. But he likes being

with his friends, doing it on you know,

likes playing bridge with his buddies.

In the first case though, that gentleman

had to have his dream fail him first

before he realized. And so this raises

another question, which is am I

Does the viewer at home have to make the

$100 million

and then taste it, buy the mansion to

realize that it was never about the

mansion?

I think the answer to that is yes. Oh

god. That is very difficult. You know,

there's there's a thing where I I forget

who said this, but like they're

responding to the quote "Money doesn't

buy happiness." and they're like

"Okay, but let me go figure that out for

myself first." Like if you don't have a

lot of money and you see rich people

tripping over themselves and people like

Will Smith saying like I have I was no

happier at all when I was rich than when

I was poor. Actually, I was happier when

I was poor.

If if you are poor when you hear that,

you're like "Bullshit. I don't believe

it. I have to go figure it out for

myself." I think a lot of lessons in

life you have to learn firsthand.

Especially when the all the problems

staring you in your face are somewhat

associated to money. Like the pain in

your belly, the bills on your desk, the

threats from the court, I'm thinking of

myself here that I was getting the the

letters coming through with the red text

on them telling me that my credit cards

were ex

going to be shut down.

The inability to feed yourself, to

socialize with your friends, the heating

in your house, the

your child's pencil case costs, all of

it seems to circle back to money.

And so when you hear

people who are wealthy

being subjectively honest about their

own experience and then what's made them

happy, it is hard to hear. Yeah. Like I

I was just imagining how was hearing

this

you know, these stories when I was in

that situation.

I would still [ __ ] go for it anyway.

Right.

Now, let's say that there's a there's a

big difference between not being able to

buy food for your kids Yeah. and making

200 grand per year. Yeah. And you know,

the the the the the difference between

10 grand a year and 200 grand a year is

massive. Takes away so many stresses, so

many, you know, worries about being

evicted and whatnot. But the difference

between 200 grand and 500 grand is not

that much. And the difference between

500 grand and 20 million is not that

much. And the difference between 20

million and 20 billion is zero.

I think that's that's a lot of what it

comes down to. And even I think there is

such thing as like

a peak net worth that you would want in

life, after which

all the money that you accrue becomes

like a social liability.

I mean, who has more social liability or

like pressure than the mega-rich? You

know, Elon Musk, Bill Gates, Jeff Bezos,

there's a huge amount of pressure. Like

you better donate this money and you

better do a good job doing it.

Kind of thing. And so And I think that

number of like And at a much lower, like

realistic level for people, it's when

your friends learn you make a lot of

money and we go out for dinner and

they're like, "You're You're paying,

right?" And that's that's a small thing,

but it can really grate on people that

like, "Oh, it's it's going to change how

people think about me."

Now, that that's a good problem to have,

of course, but it's a thing. And I think

the idea of there is a maximum amount of

like there is a net worth level at which

your happiness is going to be maximized.

And it's probably lower than you think.

Do you think it's important for people

to have an idea what their number is? I

don't think anyone really does because

I've done this in my own life, I'm sure

you have too. When I was 19, I was like,

"Oh, if my net worth was this amount

I'll I'll I'll be happy forever." And

then I was fortunate enough to get hit

that amount and I'm like, "Okay, but

what if what if we got over here?" And

you just keep going up the ladder

forever. Is there such thing as FU

money? Like is there a number where you

think you've hit FU money? I was saw

some thread on Twitter and I was like,

"Comment below what you think FU money

is."

And it was interesting to see the

variation. I have a friend, Ben Carlson,

he's a great financial writer. He came

up, this is very subjective, there's no

science behind this, but he was like, "A

net worth of 7 to 10 million dollars

is you can live an amazing life in the

United States, have an amazing house

paid for, send your kids to great

schools, go on great vacations, drive

brand new cars on 7 to 10 million

dollars." Um and and and he brought that

up, some people might might wince at

this, but he brought that up of it's a

lot less than people would think because

there'd be a lot of people who would be

like, "Oh, I'm gunning for 100 million."

Even if that's just a fantasy, it's a

dream. And 7 to 9 million dollars is out

of reach for

a lot of people, no matter how hard

they're working. But I think

particularly for young people who their

definition of I think about my son a lot

this. He watches Mr. Beast, Mr. Beast is

an amazing guy, he's I think he's one of

the great guys, but because of Mr.

Beast, like my son's definition of

wealth is a private island, a private

jet, you know, keep your hand on the

table and win a million dollars kind of

thing. It's a it's a different level.

Whereas when I was growing up like

ordinary people drove dirty pickup

trucks and rich people drove clean

pickup trucks. That was like that was

the stratification of what I saw growing

up. And I think because of social media

and other things, kids have a very

different view on what of like financial

wealth actually is these days. Going

back to this issue of tariffs, recession

and everything that's going on at the

moment, are there any things practically

for those that don't understand the

economy and economics generally that we

should be thinking about to make sure

that we don't get burnt? This is less

advice going forward more than just like

something to remember next time, which

is that if you are worrying about if

you're worried about being laid off, if

you're a small business owner worried

about going under

the need for room for error and cushion

and savings and backup plans are were

were just as important a month ago as

they are today. You're just learning how

important they are today. And I

challenge you to remember that in the

future when this is all over, whenever

it's all over, that when the economy's

going well and you feel stable in your

job, stable in your career, that is when

you also you absolutely need backup

plans and room for error and savings and

eschewing debt and whatnot. I have a

very high level of cash as a percentage

of my net worth and a lot of financial

advisers would look at that and say

like, "What are you saving for? Like

what's what's going on here?" And I'm

like, "I I don't know. I'm saving for a

world that I know is very fragile and I

have no idea what's going to happen to

me personally or what's going to happen

to the economy. But if you're a a lay

student of history, you know that things

break all the time.

And And so my my advice to you if you're

realizing that for the first time that

how fragile the world can be and how the

job security that you thought you had

may

might might not have been as strong.

Remember this next time, how important

room for error and backup plans are. And

relative to your personal costs, your

personal monthly costs or

overheads as they call them, how much

money do you think it's sensible to have

saved? It's so it's so hard for that cuz

everyone's in a I'm sure people watching

this will be in a massive range of of

incomes.

I I I would say this is a

bad answer that no one's going to like,

but as pretty much as much as you can. I

mean, I'll give you one example of this.

When COVID first hit in March of 2020,

the average restaurant I heard had

enough cash on hand to last them for 14

days.

And then all of a sudden they were

looking at a a 6-month lockdown.

And so I think one answer to that

question is however much you think you

you'll need, it's probably more.

The other more practical example of this

is in 2008 during the financial crisis a

lot of people were losing their jobs not

for 2 weeks or 1 month, but they losing

their jobs for 12 months. And they got

unemployment benefits, but it wasn't

enough. And so is it practical for to

say like you should have 12 months of

saving? It's probably not practical for

a lot of people. But the answer is as

much as you can while realizing that the

world is more fragile than you probably

think it is.

The other protagonist of change at the

moment is

artificial intelligence.

And I've spent a lot of

lonely quiet hours in my room thinking

about the impact it's going to have and

trying to develop my own thesis on what

it means as a creator, as a podcaster,

as an investor. And I wanted to

understand how significant you think

artificial intelligence is and if it at

all impacts your thesis around money and

wealth and investing and saving. I'm not

even remotely an expert in AI, but as

someone who's looked at like the history

of technology, one thing that sticks out

clear as day when you study technology

when in hindsight when you're looking at

a new technology that you know went on

to change the world the computer, the

car, the airplane, those things, when

you know like

this was a turning point in

civilization, if you go back and look at

what the optimists were saying at the

time, they massively underestimated it.

And that's what the optimists were

saying, forget the pessimists on it. So

go back to the 1920s and say what were

the optimists saying about the airplane?

They were underestimating it by a

hundredfold. What did the optimists say

about the car? They underestimated by a

hundredfold. Computers, same. And the

Wright brothers themselves came up with

the first airplane in the United States,

the Wright brothers themselves only

marketed their plane, primarily marketed

their plane to the US Army because they

did not really foresee much use for an

airplane outside of the military. They

knew you could strap a machine gun on it

and the then the army might like that,

but did the did the Wright brothers

foresee Delta Airlines? Like an Emirates

and A380? Like not in a million years.

And so

I think it's true that in a lot of

things in life, I think I think it was

Peter Thiel who said this. He was like

"When things are going wrong you

underestimate how how bad they're going

to get. But when things are going right,

you underestimate how big it's going to

be." I I may have butchered that quote,

but it's something like that. And it's

clear that AI is right. And so it's

almost certainly the case that even the

optimists, even the Sam Altman

optimists, are underestimating where it

will go. And a lot of the reason for

that is because new technologies is not

what the inventor, whoever that might

be, built. It's what other people go on

to manipulate it as. And that's why the

Wright brothers came up with a plane and

now we have the A380. Like it's other

people manipulating things along the way

to create something just gigantic.

One perfect example of that with AI is

OpenAI have created this large language

model which can do all these wonderful

things, but then people are using that

same technology to create AI agents

Yeah. which are equally astonishing. I

spent the last couple of weeks using AI

agents to build some software. I'm

someone that has no ability to code at

all, but I can sit in my bedroom and

speak to this agent and tell it to build

me a new to-do list or a new website for

the podcast that tracks who's been on

the show and follows them in the new

like I can tell it to do anything and

for

what's probably costing me a dollar a

day it's building me software now. And

we're just at the start of that

exponential curve. So if we now think

that these large language models are

going to be able to create things,

create digital things, things on the

internet, this podcast is on the

internet. We know that it can create

podcasts. We know it can create videos,

images, software.

I look at that and go, you play this

forward. And if I apply your optimism

um analogy, your optimism um lens to it

where I go, we're underestimating this

curve, it's hard it's really hard to see

how this isn't tremendously disruptive

in the long term. Not even the long

term. They in the short term. I I I'll

give you one example. You you you talked

about coding there. We're doing a little

remodel on our house right now. And one

of the things you can do is take a real

picture of of a room, upload it and we

we use chat GPT for this and said, "Hey,

paint it this color, remove this wall,

put this in." It is better than any

designer will be able to do it and it's

right there, boom, in front of you.

seconds And you can multiply that story

by 10,000 different versions of that

stories for 10,000 different jobs.

Um I I'd see it as as a writer where

I've I I don't use it to write. I write

all my own words, but one one thing that

I've played around with, I don't really

use this as that much of a of a tool,

but just more of an experiment of like,

I'll upload a chapter from a book that I

wrote and say, "Hey, give me some

feedback on this." And

it wasn't that good a year ago.

It's pretty good today. It's pretty

good. So, if you're looking for like

like a writing assistant, it's amazing.

Now, the downside of that is everyone

knows like the high schoolers and the

college students who use it to write the

essay. Just write the whole thing.

That's that that's that's that's

probably not great. But if you're using

it as a helper, it's probably the best

writing teacher that's out there. So,

right there in my just like tiny little

world of I I I really don't know

anything about AI, but interior

designer, editor, you can go on down the

list of jobs that like literally 3

months ago I would have been like, "Oh,

that's a very valuable job." And then

all of a sudden you look at this tool

for a dollar a day as you said, you're

like, "It's pretty good." What does

history tell us about how this shakes

out? Like when these industrial

revolutions come along with the

technological revolutions,

where does the value accrue?

And how do I participate in that value?

I guess one good analogy from my here

and it's probably not as powerful as

what we're dealing with right now, but

the the closest is probably, you know,

it wasn't that long ago, the late 1800s,

that 80% of Americans were farmers. That

that that that that's that's what it

was. And then the industrial revolution

and the tractor and the combine came

along and all of a sudden it was like we

we we don't need that many farmers doing

this. What people used to do with

shovels and rakes can now be done with a

tractor. And a lot of those people found

themselves out of work.

And for them it was it was very

disruptive, but they also the farmer

the farm laborer

found himself pretty easy to go into the

factory because they were working on

they they were good at working with

their hands and whatnot. And so to go

from that into the factory was not an

easy transition, but it was a transition

they can make.

Now, do you have that that same

transition did not take place from

manufacturing to technology. The auto

worker in in Detroit could not just

learn to code and work at Google. Like

that and so it was it was much less

seamless. And I think what we're dealing

with now will be even more of a

disruption that the people who are being

disrupted out of AI are going to have

like a much more difficult time

historically to move into where the

economy's going next. So, the idea that

an industry is disrupted and you need to

go figure out something else to do, I

think it's gotten progressively harder

over the last 150 years.

And when we moved from machines to

technology, it was a significantly also

for the user and for the customer and

for the

as well as for the employee. So, that

transition took time, but I was reading

something the other day that said, "Now

that we're native internet users, we all

are, billions and billions and billions

of people use the internet, this is like

a new application on the internet, which

explains why it's growing so fast that

we haven't had to learn. Yeah. You know,

this generation know how to type

something on a screen. So, there hasn't

been this big jump in fundamental skills

like there was from like going from a

I don't know, from piece of machine to

an iPhone.

So, this acceleration will be quicker,

so therefore you one would assume that

the transition will be more severe. And

I think about even things like driving.

I think Tesla are releasing in Austin

this month or next month the first

autonomous vehicle, the cyber taxi.

Yeah.

The robo taxi or whatever it's called

and it has no steering wheel. Yeah. And

the profession of driving, from what I

understand, is the biggest profession on

earth.

the biggest profession, truck drivers,

drivers in general. Yeah. On my way here

today,

I did not touch the steering wheel. I

did not touch the pedals because I'm in

a cyber truck and there's a button on it

which auto drives you to wherever you

want to go.

Yeah.

And typically I'd probably have gotten

an Uber. Yeah. But now I can sit there,

do my work, and it drives for me. It's

And that's also AI. Yeah. You No, it's

it's it's crazy. And back to the analogy

like when when the farmer had to go work

in the factory, it was it was a

transition. He may have had to move, but

he but he he did it. And that's where he

went from 80% of the population were

farmers to 2%, which is what it is

today. And but they they were able to to

move in. The manufacturer to technology

struggled. And I think it's going to be

now like the the truck driver to tell

the truck driver, "Well, just go get a

job at OpenAI." kind of thing. Like

it's funny to even think about it

because it's it's preposterous. But the

thing with OpenAI, from what I

understand, is they have less than 100

employees.

Right. And the reason they have less

than 100 employees is because they're

using AI to do the work.

to do and they'll increasingly do that,

especially when they hit AGI. Right.

They're probably going to four

employees.

Yeah. And this is why I think they have

100 employees. I think they've

purposefully kept it low because they

think AGI is around the corner, which is

this very very advanced form of AI,

which is going to be able to like

I think they call it self-reinforce

where it teaches itself.

synthetic data Right. So, hmm. Kind of

go on from there. Now, I think if there

is an optimistic side, it's always been

that it was the case that when farming

was being disrupted, there were a lot of

people who just said, "These people are

never going to find jobs." Like if you

if you put the farmer out of business,

there was it sounds comical today, but

there was a big push when the car came

about to be like, "No, like what are all

the the horses going to do?" Like like

like have some like have some dignity

for the horse and the people who are

raising horses and whatnot. So, it's

always been the case that you cannot

foresee what's going to happen next. And

the optimistic side of capitalism is as

messy and as hard and as much personal

damage as you can cause to families

along the way, those people will

eventually figure out something to do.

And when people say that, it sounds so

callous and coarse. And that's why you

have so much debate and angst and anger

and things like with and some

disagreements like with what with what

we're dealing with with tariffs right

now. You have your son in the green room

watching us right now. Yeah. How old is

he? Nine. Nine. Okay, so he's got some

decisions ahead of

He's he's wincing right now, I'm sure.

Now that we're talking about him. But

what if he in terms of him building his

career, acquiring skills, generating

wealth,

based on everything you know about how

people have made money through history,

what are the prevailing skills that your

son would have to have

to assure that he makes money regardless

of what the industry is? Learn how to

communicate.

Learn how to get along with people you

disagree with. I think that's that's a

very underlooked

skill in life is particularly in a in a

social media driven world where people

have very different views on fundamental

topics. Learn how to get along with

people who you disagree with. Learn how

to communicate.

Those would be the top two. Those are

extremely high level. Like I'm I'm not

saying go learn calculus four kind of

thing or go go learn engineering, but

those are timeless skills. And I think

those two skills can get you pretty far

in life. And I I look back at at myself.

I don't know if you had a similar

example of this, but I I was not a good

student. My ability to do math is not

any good. My ability My grades in

science were not any good whatsoever.

I think if I if there are

two skills that I was that I I I didn't

even know it at the time. I was not

really like conscious that I was doing

this, but learn how to communicate and

don't be a jerk. Like just learn because

that for me as a writer, that was like

learn how to communicate as writing and

in the writing business, learn how to

get along with people so you can move

ahead, move your career. Like be nice to

this person so you can move on up. I

think you see that a lot.

What about in terms of money, making

money? When you think about great people

through history that have accrued a lot

of wealth, what principles would you

instill in him so that he had a money

mindset?

It's hard for a parent.

I I'm not I'm not filthy rich by any

means, but I've sold a couple books and

it's hard as a parent to be like, "I

want to use money

to give you a good life, but I don't

want to spoil you. The last thing I want

is for you to be a spoiled little brat."

And it's very difficult for a lot of

parents to do that. And so one of the

things I want him to learn about money

and I want him to learn in a very stark

way is like, learn the scarcity and the

value of $1. And I think the only way to

do that is to experience it first hand.

So, when he was born 9 years ago, I

wrote him a little letter. I published

this on a blog. And one of the things I

said was,

"I hope you're poor one day." And I

said, "Not not struggling, not broke,

but I hope the only way to understand

the value of a dollar is to experience

the power of its scarcity.

And I hope there's a there's a period

when my wife and I are able to say like,

"Look, like you're you're never going to

fall flat on your face. You're not going

to be homeless. You're always going to

have good health care, but I hope you're

able to experience the scarcity of a

dollar so you value it. I did. My my

parents taught me that in a way that

they didn't need to, but they let me be

poor for a while. And

most people will experience it because

they they they have that's a that's the

situation they're in. So, that that's

one thing I think about of and I think

quite actually quite a few families deal

with that. It's like, "How can you help

your kids?" And it goes beyond money.

This is uh you know, so many the the the

helicopter parent era is I want to

protect you from downside at all cost,

emotional downside. Uh and and I think

money is one of many topics in which

you're going to learn the best

by experiencing the downside.

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Men are struggling

in a variety of different ways. And

obviously, your son is going to be a man

someday.

If I think about some of the stats here,

men's labor force participation has

declined dramatically over time. For

prime working age men between 25 and 54,

participation fell from 98% in the 1950s

to about 80-something percent in 2024.

10.5% of men aged 25 to 54 were neither

working nor looking for employment

compared to with just 2.5% in 1954.

And we had a study that came out in the

UK recently. I think it was the Center

of Social Justice that showed that for

the first time in a long time in recent

I think it was the Center of Social

Justice that showed that for the first

time in a long time in recent history,

more young men are out of work than

young women. I think it was like one in

seven men are out of work.

Yeah. So, it's a different world for a

man. But but we still have the sort of

prehistoric caveman mindset of being a

protector and a provider.

Yes, absolutely.

has changed.

Yeah. I think it was Scott Galloway

recently said that like a really

aspirational definition of manhood is is

wanting to procreate, provide, and

protect. You want to have kids, and you

desperately want to provide for your

family and protect your family. And I I

do think that there yeah, there's men

all over the world to a higher degree

than there's ever been that feel like

those three things are out of reach for

them.

And because of this, a lot of people get

involved in get-rich-quick schemes. Yes.

Cryptocurrencies, meme coins, all this

stuff.

Daniel Kahneman, the great psychologist,

passed away last year. He had a saying,

he was like, "When all of your options

are bad, you become very risk-taking

because you have nothing to lose kind of

thing." So, whenever you see people

participating in get-rich

get get-rich-quick schemes, you know

it's because they feel like all their

option all all their options are bad. If

you knew if you believed that if you

could go to college and learn a score

not go to college, but if you can go

learn a skill

and go work hard and earn a stable