if you're buying a house because you

don't do it run for your life Mr Morgan

H he's the author of the psychology of

money one of the bestselling business

books of this decade he can help anyone

build wealth and change their life the

world is split between people who don't

know how to start making money and

people who don't know when to stop

making money and if you are stuck in a

low-income job you feel like you don't

have the opportunity to generate wealth

but once you realize that opportunities

are available for everybody you can

choose where you want to live what job

you want when you retire because you can

be rich prove it people like Ronald Reed

and he was a janitor what does it take

to amass Mr Reed's $8 million Fortune

he's a fascinating story of somebody who

became Rich despite not having the

skills that you normally associated with

wealthy people then there's Warren

Buffett he's worth $100 billion do but

the real secret to their success

investing my parents are a great example

of this we were very poor no Financial

background and they have like minimal

financial interest but now they'd

probably be in the top 3% of

professional investors if you want to do

well with money you don't need to be a

genius if you have endurance in your

investing you're going to be filthy rich

but when most people say I want to be a

millionaire what they actually mean is I

want to spend a million dollars I want

some nice clothes bigger house the nicer

car ask yourself what is your

relationship with money if your

expectations rise faster than your

income you're never going to be happy

with your money that's the problem so if

I have1 what's the first thing that I

should do I keep it as painfully simple

as I can so

ladies and gentlemen you're about to

meet the man whose book changed my

entire life as it relates to money and

finance about four or five years ago my

brother who's a investment banker said

Steve there's one book I need you to

read about wealth investing and money in

finance and he passed me a book called

the psychology of money that book

changed my fortunes it is the reason

I've been a successful investor and it's

the reason I've been able to hold on to

my wealth and build it it's this man and

that's the reason why you need to stay

tuned and listen to this

[Music]

episode

Morgan you wrote what I would consider

to be the greatest book on money and

finance ever written I say that because

I remember when I came into money when I

was 25 20 no 27 27 28 years old and my

brother turned to me and said there's

one thing I ask of you he said you have

to read this book called the psychology

of money it will stop you losing all of

the money you've just earned from your

career and it changed my life I've

talked about it for years and years ever

since and that's why I was so Keen to

have this conversation with you because

I really believe if people choose to

listen to this conversation it stands

the chance of changing those two so

let's begin why of all the things that

you could do with your life Morgan why

are you writing books about the subject

matter that you explore what is the

reason well first that's a that's a big

statement that's a lot to live up to

it's kind of scary to hear that because

I've I've often been and this gets to

the why I I've defined it as selfish

writing where I write for an audience of

one and that is me and I like to think

of myself as a pretty selfless person

but for writing I don't try to say I'm

going to write a book for this person or

that person or that audience I write

what I'm interested in and I write it in

a way that I think is interesting and I

try to solve my own problem problems and

then I take a leap of faith that if this

is interesting to me and it's going to

help me maybe it'll help somebody else

that's very different from the

traditional writing style of saying know

your audience know your audience very

quickly turns into Pander to your

audience and I think a lot of people

maybe they don't even know it but if

they read a book and they don't

necessarily like it it's because they

were being pandered to they were being

spoken to in a way that a person would

never speak to them in real life so I

just this is almost like my diary I

think in terms of these are the topics

that I found interesting for myself and

so I guess that's the why I feel like

I've really found myself in a career

where I can just figure out my own

problems and try to figure out what I

think and what's interesting to me and

then kind of put it out to the world and

then hope that other people will enjoy

it let's start with the psychology of

money what is the benefit to my life if

I understand the things that are written

in the psychology of money well let me

start with I think most Finance books

will their their answer to that question

would be when you're done with this book

you will know how to pick stocks better

you will know how to balance your

checking account or what credit cards

that you should use for my book I think

when you're done with it I hope that you

will just look in the mirror and say who

am I which is kind of what I did with

this trying to figure out who I am and

what I want and why I was insecure why I

wanted to show off to other people the

car that I drove so if you become more

introspective about who you are and what

you want out of life and what money can

do for you and cannot do for you and

become a little bit more introspective

about why you think

about where you are in the social

hierarchy and greed and fear and why you

think about these things that you do I I

honestly think that I I I hope at least

because it was this way for me that when

you're done for with the book that's

kind of when the learning begins because

maybe this will just spark a bit of

curiosity for you to then go for a walk

and think about what you want out of

life and whatnot so I think most books

when you're done with the last page the

learning is done this I hope is just

sparked something in you that will get

you to think more clearly about what you

want with money and what money can and

cannot do for you part of that journey

of understanding what you want helps you

to define the word on the front of this

book wealth what is your definition of

wealth well I I I made up these

definitions in the book so these are

just my things that I made up but I

defined rich as you have enough money to

buy what you want to pay for your

mortgage to make your car payment to go

out to dinner with your friends you have

money in the bank wealth I think is very

different wealth is money that you did

not spend and maybe you will not spend

so wealth is hidden it's the money that

you didn't spend on a car it's the money

that you didn't spend on a big house you

didn't spend on jewelry and that's

really important because wealth that's

saved up the unspent money is what gives

you Independence and autonomy and just

the ability to wake up every morning and

do whatever you want with your with your

life and so I think separating that is

really important because when most

people say I want to be a millionaire

what they actually mean is I want to

spend a million dollars that's what they

mean and when I think about being a

millionaire I think it's you have a

million dollars that you're not going to

spend and that because you're not going

to spend it you have this giant cushion

that will give you Independence and

autonomy and so you can wake up tomorrow

and say I can do whatever the hell I

want today I can work for who I want I

can work for as long as I want I can

retire when I want the World is Yours

like every bit of savings that you have

is a piece of your future that you own

it's a you're just buying your time in

the future so that it's yours and you

can do whatever you want with it and

that to me has always been the goal

there's a quote from Charlie Munger

where he says I never wanted to become

rich I just wanted to become independent

and that when the first time I read it

it was like that's me too that's what I

want I don't want a Lamborghini I don't

want a mansion and a yacht I want to

wake up every morning and just say

whatever I want to do today it's mine

nobody's going to tell me where to work

when to work what to do it's all me and

to me for not just work but for your

family life for your health for your

mental sanity there's nothing more

important than that it sounds like

you're talking about your

father my dad it was he has such an

interesting background my my my mother

too their background is so crazy and I

didn't realize how crazy it was until I

was an adult the early part of my

childhood when my parents were in school

we were very poor my parents were

students living off of student loans and

grants we had no money and then my dad

became a doctor when I was 12 or 13 and

things changed it wasn't we were not

rich but like things got very

comfortable and what was really

important is that the frugality that my

parents had to have when they were poor

stuck with them even after they started

making a little bit of money they didn't

buy a Lamborghini no no we grew up in a

very like modest house it was a nice

house and we took some like decent

family vacations but my we always live

well below our means way below our means

did that confuse you because you must

have known that your dad had the money

yes particularly when I was probably

like 16 17 and I could learn like how

much does a doctor make you can go look

it up and figure it out and and then it

was like I definitely looked down on my

parents at that age because I was like I

know you can afford a better car I know

you can buy me better Christmas presents

I know we can afford a bigger house and

you're and you're not doing it because

you're mean I think that was I think

that was my view and then it really

clicked about 10 years ago this is not

that long ago so my dad is an ER doctor

which is one of the most stressful jobs

that you can imagine it's literally

people dying in your arms every day and

he did this for 20 years and after after

20 years of doing this night shifts

children dying in your arms literally

every every week he said he he had had

enough it was it was a lot he put in his

dues he did it for 20 years and he said

I'm done I'm I'm going to retire and the

reason he could do that is because he

had saved up so much money he was living

well below his means they had a very

high savings rate the moment he woke up

and said I want to be done he was done

and that was it and if you contrast that

with so many other people including some

of his colleagues who were also burnt

out at age 60 who were also so burnt out

by having people die in their arms for

20 years they wanted to retire and they

couldn't because they had the bigger

house because they had the nicer car

that I thought that we should have had

when we were growing up and when they

quit and moved on to their next phase of

Life they got so much happier and so it

was like so that this was 10 years ago I

was in you know in my late 20s at this

point I was like now I get it he was

Frugal he saved a lot and that made him

independent and the Independence made

him Happ than any car would have done

made them happier than any big house

would have done so it's like I think

that is one of the keys to happiness

happiness is like the most complicated

topic you can imagine but one of the big

puzzle pieces is independence and

there's been a lot of work on this

studies on this of like one of the

things that makes people really happy in

life is having control over what they're

doing and it's more so the flip of side

of that it's like what makes people very

unhappy in life not having control over

what happens in their future not having

control over their schedule where

they're going to work whether they're

going to get laid off having that

uncertainty is a massive anchor and

waight on your life your health

absolutely I mean that was a big thing

for my dad too he was working night

shifts for for 20 years with this it

it's very bad for your health it's not

great at all so the ability the

financial ability to just wake up one

day and say I'm done done with that is

huge I I was reading studies about this

idea of autonomy because I was trying to

figure out what you have to have

professionally to love your work and I

came up with these five different points

one of them was autonomy and control and

I I came up with that because I read

studies where people who work jobs where

they had a low autonomy and control had

physiological consequences they were

more likely to get disease they

experienced stress significantly more

more likely to have cardiovascular

problems and heart disease which is the

single biggest killer of of people

generally I thought [ __ ] hell just

not having control in your life yeah

makes your body shut down yes you know

this is something that I think everybody

has experienced if they have something

really stress going on at life they get

into bed they're tired you can feel your

heart pounding like the physiological

response of stress is huge it's massive

and if you have that going on every day

for 5 years 10 years 20 years 30 years

forget about it forget about it this's

this great quote from John D Rockefeller

he's the richest man in the world and he

lived till I think he was 99 something

like that he was 97 and his doctor

talked about why like his key to

longevity and the doctor said quote he

never lets any anything bother him he

spends plenty of time outside and he

leaves the table when he's still a

little bit hungry that was his key to

longevity it was just and and when you

read his biography you realize how true

that was no matter what was going on in

his life and the most stressful business

conditions you can imagine none of it

ever bothered him he just had ice in his

veins and he could just keep going and

so I I I do think that's that's

definitely one of like the keys to

physical health is lowering that amount

of stress and there are not many other

things in life that are going to

increase the stress that you have have

than not having control over what you're

doing in life Freedom chapter seven of

your book this is the broadest lifestyle

variable that makes people happy doing

something you love but on a schedule you

can't control starts to feel the same as

doing something you hate psychologists

call this reactants that's right you

know I I do think there are a lot of I

think the best example are CEOs who

might make $30 million a year $50

million a year but they have no control

over their time every single second of

day is planned and demanded by somebody

else and they have to do things that

they don't want to do if they wake up

and they're tired too bad you got to go

to your meetings today they wake up and

they're exhausted too bad you have to

travel to China to close this deal they

have no control over their time and

compare that to someone who makes much

less but they wake up they can wake up

and do whatever they want whatever they

want to do you want to hang out with

your friends you want to sleep in you

want to take a nap at 2 o'clock whatever

you want to do the person who I think

really sticks out in that in that vein

is Warren Buffett who is the the CEO who

makes a zillion a year he's worth

hundred billion do but if you dig into

how he structured his day total control

100% autonomy can do whatever the hell

he wants all day long what he wants to

do is get up and go to work but he he

has delegated things so effectively that

he can do whatever he wants and that's

not only the key to his I think business

success but his health lifestyle success

why he's 93 and still going as strong as

ever I I was thinking about my calendar

when you were talking about the CEO that

makes $30 million a year but is just

dragged around by his schedule sounds a

lot like me to be honest I feel like the

more successful I've got in my

professional career the more my calendar

the minute I wake up in the morning I'm

just like a puppet master to these

little boxes on my Google Calendar yeah

they drag me around the world and

there's very little I actually said to

my assistant about a month ago I was

like um Sophie please can you do me a

favor could you just put lunch in for 30

minutes because I'm not eating could you

just put like could you just put that in

midday every day at the same time so you

can breathe so I can have a little bit

of a moment I do nothing and then also

the other thing I've put in now I have a

personal trainer 7 days a week and I've

just put that in my calendar it was

before then a residual beneficiary as

was everything for me well not for me

because my work is for me but um it it

got the time that was left over when all

my priorities were done and I do reflect

on that and go like how like a when does

that stop because it's clearly not going

to stop when I make money because I have

the money and B how much control do I

actually have and you know what I do

sometimes I think I've noticed about

myself I think sometimes I councel

things just to prove to myself that I

still have control that's great see

that's a good thing there's a quote from

n talb where he says like you are

wealthy when the money that you deny

tastes better than the money you accept

so you get someone comes to you with a

business deal and you say no thanks I

don't want it when that tastes better to

you than accepting the deal it feels

better to you that's like one definition

of of Rich there's another great quote

from TYB where he says the world is

split evenly between people who don't

know how to start making money and

people who don't know when to stop

making money and I think there are a lot

of people that are watching this that

are in kind of our field who are easily

in the ladder they have all the money

that they could ever want to spend or

maybe not not that much but they have

more money than they ever thought they

would have but for every gold that they

hit oh when whenever my net worth is X

all my problems are going to go away

everything's going to feel great and

then they hit X and they just keep

moving the goalpost down and down so I

read in the book that like the hardest

Financial skill is getting the goalpost

to stop moving it's the hardest thing in

the world it's hard for everybody

because virtually everybody thinks if my

net worth or my income was this level

I'll be fine I'll feel great no more

problems I'll wake up every morning with

a smile on my face and then if you're

lucky enough or you work hard enough to

get there you realize it's not the case

at all you're just going to keep pushing

it keep pushing it keep pushing it

forever have they done studies to test

that in terms of analyzing whether

people's goal posts move off into the

future even when they're like

billionaires and whatever I mean here's

here's the broadest way that I would

frame this up that as has been studied

if you look at America today the average

household adjusted for inflation is

making twice as much money than they

were in the 1950s to adjusted for

inflation the average household double

the income that they were back then and

we less happy the statistics that try to

measure happiness over time it's not an

easy thing to do but we're less happy

today than we were back then and this is

why like look can money buy happiness

yes and to some extent does it yes like

people who are in abject poverty are not

as happy as people who are covering the

basics and they have food and shelter

etc etc but over time when you when the

society is getting richer and you're

comparing yourself to other people and

maybe the average American's income

doubled but so did their neighbors so

did their co-workers so did their

siblings so you just automatically

adjust to that I talked about

Rockefeller before Johnny Rockefeller

who died in I think the 1930s he was

worth adjusted for inflation almost half

a trillion dollars during his day

adjusted for inflation but he never had

during his life penicillin Advil

sunscreen polio vaccine keep keep going

down the list of things that virtually

everyone can take advantage of today

that he never had but you can't say that

the average American is living better

than Rockefeller today because we have

all of these technologies that he never

did because we just look at what other

people have and assume that that is the

Baseline so you can imagine a world in

which my kids my grandkids are earning

twice as much as me adjusted for

inflation and they're no happier for it

because the new technologies whatever it

would be that would seem like magic to

you and I will just become their

Baseline and that's always been the case

if there was if Thomas Jefferson or

somebody came to the year 2023 he would

faint at the new technologies and the

medical discoveries that we have and

these are technologies that you and I

don't spend one second being grateful

for because we've just accepted them as

a new Baseline it reminds me of

something in your new book which is out

in November which is

you know I've gassed up a lot of books

on this podcast before but this is one

of my favorite of all time it's just so

easy to read and so engaging because you

you're one of those authors in this book

that realizes the world that the reader

living in and they are busy and they

want the point and they want you to you

know give them not one word more than

you need to it is so brilliant it's so

brilliant um in this book you talk about

exactly that you say the first rule of

happiness is low expectations Y and

that's exactly what you're talking about

is comparison is the thief of Joy

because it just raises our own

expectations right when with that out

the window goes our happiness yeah and

it's it it it seems counterintuitive to

people that if you want to be H for most

people it's if you want to be happier

you need to be ambitious you need more

you need to make more money work harder

have a more successful startup whatever

it would be and there's that's true but

that's half the equation the other half

the equation is keep your expectations

low so the gap between those two it's a

gap between those two that actually

accru to happiness over time how did you

learn that I think it's just I think

there have been a couple little stories

that really stuck out to me one that I

love that just knocked me on my ass the

first time I read it was Stephen Hawking

the late physicist who was without

exaggeration one of the smartest people

to ever walk this planet he was just an

absolute genius and a quirky of course

is that he had a motor neuron disease

and he was paralyzed from head to toe he

had no control over his body he spoke

through a computer not a single muscle

in his body could he actually control by

himself so he was you know

physiologically it's one of the worst

Liv that you can imagine and he did an

interview with the New York Times a

couple years before he died and during

the interview he's talking about how

happy he was and how amazing his life

was and the New York Times said they

asked him they said what is your secret

to happiness like if there's anyone who

has the right to complain about life

it's it's that guy and he's talking

about how happy he was and he said my

expectations were reduced to zero when I

was 21 which is when he got his disease

and he said everything else since then

has been a bonus so this is like the who

whose life is like has ended up in a way

that most people watching that would say

like that's among the worst scenarios

you can imagine and he's probably

happier than you and I because his

expectations were so low that just

waking up in the morning and seeing the

sunrise and getting to go to work and

talk to people was this magical gift I

mean you can imagine not to get too

morbid about this but imagine you're on

your deathbed and the doctor is very

confident that you're going to die

tomorrow and let's say that you make it

one more day what is that Sunrise going

to feel like what's that you know

holding your your wife's hand for one

more day going to feel like it' be

amazing just because your expectations

were on the floor and so it it's always

like that and you go through life seeing

so many people who have everything all

the money the great family all the

health the beauty everything you can

imagine and they're not happy for it and

it's because with everything that they

have their expectations rise not only to

that level they might rise above it so

if you are some if your expectations

rise faster than your inome

you're never going to be happy with your

money no matter how much money you make

you can make a billion dollars a year

but if you needed and wanted 1.1 billion

you're broke you feel broke and the

reverse of that is true too there are

people who make $50,000 a year but if

they only need 40 to be happy they're

sto they feel great and so that's I

think that's one of the reasons it's so

important is because managing your own

expectations is more in your control

than managing your circumstances in

terms of raising your income raising

your investing return

it's not that you can't control raising

your income you can be ambitious and

smart and entrepreneurial of but it's

more in your control to just inside your

head to say I'm going to try to want

less that that's just a mental exercise

that's it's not to say it's easy it's

not easy at all but you have total

control over doing it so how in a

practical sense can one go about keeping

their expectations below their

circumstances I guess here's here's one

that really made an impact on me and

it's great that we're in La cuz that's

where this story took place I was a

valet here in La all throughout college

at a fstar hotel here in town so a I I

was young I was you know aged 19 to 24

or something like that and all day it

was people driving in in Ferraris and

Lamborghinis and rolls-royces and one

day it hit me just I I I remember the

moment because it was like out of the

blue it hit me whenever someone would

drive in in a rollsroyce or something

never once would I look at the driver

and say that guy is cool like wow look

at him he's so cool what I did is I

imagined myself as the driver and then I

thought if I was a driver people would

think I'm cool and I was like wait don't

you see like the disconnect here nobody

cares about the driver but they want to

be the driver because they think people

will then care about them and once you

realize that like the takeaway is nobody

is thinking about you as much as you are

nobody cares about your stuff as much as

you do nobody cares about your car or

your house or your clothes or your

jewelry as much as you do because to the

extent that they're even looking at them

they're looking at your car looking at

your house really what they're doing is

imagining themselves with that nice car

they're not giving you the credit

they're imagining themselves having it

so once I realize like that was the game

that was being played in society once

you once you recognize that's the game

your willingness your desire to show off

plunges and of course I I like nice

stuff I like nice cars I want some nice

clothes I live in a decent house but

once you realize that it plunges and I

think the most valuable Financial skill

that anybody can have is not needing to

impress other people if you don't need

to impress other people that is an asset

on your balance sheet that is worth a

billion dollars because so much of

society as a whole and individual is

just geared towards how can I get other

people's attention how can I show off to

other people how can how can they like

me more I both agree and understand but

agreeing and understanding is different

from being able to do I think at the

society level it will never be it'll

always be like that same as ever it's

never it's never going to move away from

that if you can manage it around the

edges at the individual level it's

massive for your life one thing that's

important here is that if you are a

young person and you're kind of looking

for a spouse a mate a boyfriend a

girlfriend a wife a husband whatever it

would be then your ability to look

really nice and to signal and to kind of

put up your peacock feathers is

important and I get it and I did it back

in the day once you are more settled

down in your career in your

relationships if at that point you are

still hanging on to the desire to

impress other people that's when it's

broken that's when it's just pure net

loss in your life because you're trying

to show off to for people who you don't

even need or want to love you there's a

great quote from Warren Buffett where he

says the definition of success is when

the people who you want to love you do

love you and so for me it's like five

people it's like my parents my wife and

my kids and like that's it that's it

those are the people who I want to love

me and if they love me I I probably have

90% of the happiness that I'm capable of

and if they don't love me and then I'm

never going to have more than like 10%

of the happiness that I'm capable of in

that chapter about happiness you talk

about your friend Brent as well in his

theory on marriage yeah my friend Brent

B sure has this great theory on marriage

where he says marriage only works if

both Partners want to serve the other

partner and expect nothing in return so

you wake up every morning and you say I

want to serve my spouse but I expect

nothing in return from them and if you

both do that simultaneously you're both

pleasantly surprised because what

happens is I didn't expect you to do

anything for me but you did and vice

versa and both of you just wake up every

morning you're like but you did that for

me you you helped me out here you you're

empathetic to me there and it feels

great you exceeded my expectations

exceed my expectations and I think what

breaks down any marriage or career or

whatever it would be is when you become

needy like nothing breaks love more than

being needy and really what needy is is

just your expectations are so high that

you wake up and you say I expect to do

this for me I expect you to help me I

expect you to serve me that's just like

massively high expectations that you

have in that relationship it's it's also

like expecting an external factor in

that case your partner to validate you

in some way or to and that kind of goes

back to your point about money where in

order to stop showing off and focusing

on those five people that we want to

love

ourselves we need to understand and

ideally solve our often toxic

relationship with like our need for

validation and that I guess brings me to

the first chapter in your book where you

talk about the stories of money that we

have and where they've come from and

something that's always baffled me is

when you go into low-income areas

there's more gambling shops yeah and I

can attest to it when I was 18 19 years

old and I'm shoplifting pizzas to feed

myself and I'm doing all sorts of stuff

when I got my student loan in I was in

university for one day and they gave me

like the first payment of my student

loan I don't think I've ever said this

before I put the entirety of the payment

on a bet wow and I lost it in the six in

the an injury time of that football

match I don't bet and did you need that

money for tuition like it it was then it

was then gone I needed it to eat yeah I

wasn't speaking I had no money I don't

come I didn't come from money and my

parents I'd gone to University with 50

Quid and I got this like, sent to me

from student loan whatever I was so

reckless with money when I didn't have

money the minute I got money it's like

everything just chilled the [ __ ] out and

I I became really longterm I made

responsible decisions I stopped buying

flashy things I like don't even own a TV

now I'm very Sim I feel like the more

money I have the less my material

desires are for sure for sure when I say

that out loud I'm like oh absolutely why

is that that when we have less we are

Reckless with our money well I think

there's two sides to this one of my

theories is

that what everyone wants in the world is

respect and admiration from other people

and there's kind of two ways to get that

you can get your respect and admiration

through your wisdom through your love

through your humor or if you don't have

that to offer from the to offer to the

world you're going to get it through

your material possessions so if you can

gain respect and admiration through your

business success your wisdom your love

your friendship great then you're going

to get it and you're going to fulfill

that bucket if you can't get it from

those things then you're like well might

as well show off my car it's all I got

to do that's all I have I think that's

one side of it so as you become more

successful your desire to show off

diminishes because you're gaining

respect and admiration through other

things that are not matural

the other side of this that's so

important is that you know I saw this

statistic years ago that the poorest 10%

of Americans buy like 80% of the lottery

tickets in America and these are people

who can like barely feed themselves

lowest 10% they're literally struggling

to put a roof over the head and feed

themselves are going out hand over fist

buying scratcher tickets and the the

knee-jerk reaction when you hear that is

morons what are you doing you idiot and

maybe that is the right reaction but I

started thinking about it and it was

like okay maybe if you try to put

yourself in those people's shoes maybe

they would say something like this if

you are stuck in a low-income job and

you feel like there's no way out you

feel like you don't have the opportunity

to work your way up the ladder become an

entrepreneur you feel like you're stuck

in this position buying a lottery ticket

might be the only thing in life that

gives you a little bit of hope it might

it's might be what feels like literally

your only ticket to get out and that

might be not something that you and I

feel like because because we have we we

we at least feel like we might have

other opportunities I it's you're so

right because when I gambled what I then

did the same day before the result of my

bet or my lottery ticket came in and I

said this to my team the other day is I

would go on right move and like auto

trader and look at stuff that I would

buy if I won yeah yeah I think there's a

sense too that if you are stuck in a

lower spot in life if you have a feeling

that the world is unfair and very often

it is so some maybe that that might be

the right mindset but if you feel the

world is unfair then it's very natural

to think I might as well cheat too if

the world's unfair why not might as well

cheat and I think that at least at some

level has some explanation for the

relationship between poverty and crime

that word hope is is so is so true I

think it's true too just a glimpse of

Hope because it gives you even if it's a

0.00001% chance if it's the only thing

in your day that made you smile a little

bit made you feel like you had a little

bit of hope then I get why they do it

the other reason the other thing I think

a lot about here is that if you are in a

low-income job and you're working

graveyard shifts and you're exhausted

and you're taking three buses to get

your kids to school if the only thing

that day that gives you a little bit of

pleasure is a cigarette and some alcohol

I get it I totally get it and that's

also the relationship between health and

poverty is a lot of that too so it's

very easy for people who are of higher

means to look down at those people and

point out all the bad decisions that

they're that they're doing in life but I

think you underestimate how much that

desire to just have a little bit of Hope

a little bit of pleasure and if those

feel like your only avenues for Hope and

pleasure maybe that's the explanation

for at least part of it quick one this

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willing to make you do we have a deal

let's speak then to 18-year-old Steve

that was in that little room with the

stack of these what they call County

Court judgments and bays and stuff stack

of letters on his desk what advice based

on all you know about money and finance

can you give to somebody who is Maybe

making a, $1,000 $2,000 a month covers

their rent just about doesn't have a lot

of money left over what is the best way

to go from that position to a position

of wealth in your

view I think one of the best ways to

think about it at the lower levels and I

explained a little bit this earlier but

to dig into it is a lot of what's

probably giving you stress in life is

that you don't have control over what

you're doing and if you view every

dollar of savings that you have as a bit

of your future that you own and control

then I think that mind that mindset can

shift pretty dramatically and it's like

that's that's the ticket out the ticket

out is not a nicer car it's not a bigger

house it's not better closeth the ticket

out is Independence that's what's going

to give you the better career that's

what's going to make you happier it's

what's going to make you healthier and

the only thing that's going to give you

Independence is having enough money

saved up so that you can choose where

you want to live maybe even what job you

want you can choose at at at some point

down the road when you retire if you get

sick it's not just going to break you

immediately having that Independence is

going to take more weight off your

shoulders than anything else you can do

in life save money that's it that's the

the title of that chapter in the book is

save money because you can't put it any

clearer or Starker like that's that's it

he says there are three types of people

those who

save those who don't think they can save

and those who don't think they need to

save yep three types of people which one

are you those who save those who don't

think they can save and those who don't

think they need to save I tell you what

I've been all three in my life that's

interesting I've always been a saver no

I haven't and see that I think that's

actually very rare that you change who

you are really on the nature nurture

Spectrum I actually think and this is

kind of disappointing to talk about it's

not fun to talk about but on the nature

of nurture Spectrum I think a lot of

money is nature Warren Buffett talks

about the people who have the money mind

which means like either they get it or

they don't and if they get it they get

it instantly and if they don't they'll

get it never at all I I I actually don't

believe in it it's that black and white

Charlie merer explains it like that he

says when explaining financial matters

to young people they either get it

instantly or never at all and he's

putting that too starkly I think I don't

think it's that black and white but on

the nature nurture spectrum is it 8020

is it 7030 I think it's probably

something in that range so let me give

you a count a counterargument to that

then so as I said I've been someone that

didn't think he could save because I

didn't have money and I just thought oh

you know but I could have saved in it

looking back now I know I could have

saved I could have saved a small amount

but I didn't see the value in saving

small numbers I didn't understand the

laws of compounding returns which we'll

definitely talk about I have also been

the person that

saves and I've also been the person who

thought they didn't need to save I've

been all three my Counterpoint to this

goes back to a story that I read from

your early years where two of your

friends died on a ski trip yeah and it

also links to something youve said in

your new book same as ever where you

speak about

how sometimes in life like hitting rock

bottom is the greatest incentive to

change our lives yeah so I put those two

things together and go that moment when

you were two of your friends died on a

ski trip that you were on when you were

younger it had an impact on your risk

appetite and your attitude towards and

therefore your attitude towards money

yep what what happened what happened so

I grew up skiing in in Le Tahoe

California and I was a competitive ski

racer right uh so all throughout my

childhood and teenage years I skied six

days a week 10 months a year all over

the world and it was great there about

12 of us on the squad Valley ski team we

had grown up together and we had spent

our entire lives together and when I was

17 this is in 2001 I was skiing with my

two two of my best friends brenon Allen

and and and Brian Richmond and we would

ski out of bounds which is illegal

you're not supposed to do it we would

duck under the rope that says do not

cross and we'd ski out of bounds because

that's where a lot of the good skiing is

and when we would do this it would spit

us out on this back country road where

we'd have to hitchhike back there's no

chairlift when you ski out of bounds you

have to hitchhike your way back so so we

did it one morning in February 2001 the

three of us did it and when we did it we

triggered a very small Avalanche and I I

remembered it so clearly like I can

still feel it 21 year 22 years later I

can still feel what is like it's the

weirdest sensation of that I've had in

my life because when you get hit by an

avalanche rather than pushing on the

snow to gain traction with your skis the

ground is pushing you so all of a sudden

you're skiing along and you got control

and all a sudden boom you have no

control everyore the the ground is

pushing you around probably similar to

what it feels like if you're standing on

the ground during an earthquake like the

ground's pushing you but it was a pretty

small Avalanche maybe came up to our

knees ended pretty quickly and we kind

of like literally high-fived about it at

the bottom and went about our day we get

back around to the the base Lodge we hit

shik back and Bren and Brian said they

wanted to do it again they wanted to ski

again and I said hey for whatever reason

I I I just didn't want to do it so I

said hey rather than hit cheing back why

don't you guys go do it again and I'll

drive my truck around and pick you up so

we said great we made our plans went our

separate ways they went skiing I went

back around to take my boots off and

jump in my truck and go pick them up 20

30 minutes later I go to pick them up at

the pickup spot and they weren't there

and I knew it only took us a minute to

ski down the hill so 20 minutes later I

knew like they they they weren't coming

I I was not worried I figured that they

had already hit hike home but so after

waiting for another 20 or 30 minutes I

just left and I went back to the lodge I

expected them to be there and they

weren't and I still didn't really worry

like we didn't have cell phones back

then and people were just comfortable

being out of touch if you didn't know

where your your buddy was like wasn't

that that wasn't that big a deal so we

went about the day I I started worrying

a little bit I remember I stopped at

Brendan's house and expected him to be

there and he wasn't there either and I

remember calling and leaving a message

on his voicemail and I remember ending

the voicemail by saying I hope you're

okay man those are my last words I

remember that very clearly the day went

on and I think at about 4 or 5:00

Brian's mom called me and she said Brian

never showed up for work today do you

know where he is

and I told her what happened I said we

skied the backside of squa where we'd

hit Chik back I was going to pick them

up but they never showed up and I

haven't seen them since and I also

remember so clearly Brian's mom saying

oh my God and hanging up the phone and

that was so like so it's then we started

getting worried we called the police the

police didn't take it very seriously

because they thought ah they're out at a

party they ran off with a girl for the

night like they weren't worried but we

finally got search and rescue involved

and Rescuers of probe poles frowned

Brenan and Brian buried under 6 ft of

snow and they were they had been killed

from a massive Avalanche and so look I

think virtually everyone listening to

this I'm sure you to have lost somebody

close to you somebody that you love so I

know the experience was not unique in

that way but it was the first time that

I had experienced loss and it was the

first bad thing that had ever happened

to me in my life so it had a big impact

on me and there were a lot of takeaways

I think at the time I didn't have the

cognitive tools to piece together what

happened or to learn about what happened

like have any sort of takeaways but as I

got older and thought about it and

looking back I put together all these

like realizations of what that did to me

how it changed me and what were some of

the lessons from it too one that I talk

about in the book that I think about all

the time is my decision to not go with

them on a second run was this completely

brainless decision I put no thought into

that decision it was not a cost benefit

analysis I didn't think through it but

it's the most important decision I've

ever made in my life 100% chance if I

was with them I would have died and I

had skied literally thousands of runs

with Brendan and Brian how many times

did I deny a second run with them or say

you guys keep going I'm going to go in

almost never the one time I did it saved

my entire life and so that you really

realize that the world hangs by a thread

everybody thinks like oh you're going to

put a lot of thought into your big

decisions to make sure that you're

successful in life where you go to

college what your career is going to be

who you marry that's all great but the

world hangs by a thread and there are

tiny little no nothing decisions maybe

that you made today of maybe it was when

to cross the street maybe it was when to

leave to get in your car that can

utterly change the course of your life

and so when once you accept that of how

much the world hangs by a thread I think

you become much more humble with your

willingness to make forecasts about the

future what the economy is going to do

who's going to win the election what's

going to happen in my life my career my

family's life we have no clue we have no

idea because all we can think about are

the big decisions we cannot piece

together the chaos theory of I got in my

car at the at the wrong time I met the

wrong person or I met the right person

or you know I I decided not to take a

second run we cannot forecast the impact

of those things and so that had a big

impact on me too of just who are we to

fool ourselves that we can predict the

next recession that we can predict where

our careers are going to be in 10 years

that we can predict how long our

marriage is going to last that we can

predict how long we're going to live we

can't nobody can because we can't

predict how crazy these tiny events can

turn into and this comes right back to

investing doesn't it

because most people that consider

themselves to be investors whether

that's just putting a couple of quid

into crypto or something else engage in

the idea that they can predict the

future yeah um and this is where it

appears that most money is lost I mean

think about the biggest risk to the US

economy over the last two generations Co

mean that's one of them the others would

be Pearl Harbor okay 911 Co and maybe uh

Lan Brothers couldn't find a buyer in

2008 which sparked the financial crisis

of 2008 those are the biggest Risk by

far and the common denominator of every

one of those stories is that nobody saw

them coming they were not in any

newspaper before they happened they were

not in any economic Outlook nobody was

going on TV warning you that this was

coming the common denominator of those

is that they did all of their damage in

two seconds and that would be the case

going forward you can guarantee that the

biggest news story and the biggest risk

over the next year or the next 10 years

of our life whatever it is is something

that nobody's talking about today that

you and I have can't even fathom because

it's always been like that there's never

been a time when the biggest news story

was

foreseeable and it's all and it'll be

like that going forward so that's

another just like embracing how fragile

the world is there's a great quote from

a financial adviser who I really admire

Nam Carl Richards and he says risk is

what's left over when you think you've

thought of everything

H you can go out of your way to think

about all of the risks that are in your

life and like great and like how you're

going to prevent them great that's a

good thing to do when you're done with

that exercise what's left over that

you're not thinking about is what risk

actually is it's like by definition we

can never plan or even imagine what the

biggest risks in our lives are going to

be you say that in same as ever you say

I think the the chapter title is risk is

the things you can't see or something

risk is what you don't see risk is what

you don't see that was a little bit

terrifying and it's true and I think I

think sometime you can phrase it as

terrifying it's also kind of relieving

that like why are you going to put so

much effort into trying to predict what

the stock market's going to do next what

the econom is going to do next why are

you building a forecasting model to

figure out what the econom is going to

do over the next 10 years when you look

at the last 10 or 20 years how could you

ever predict 911 or Co and even look

like something like Co there's like a

2015 Bill Gates Ted Talk where he talks

about the biggest risk to society is a

viral pandemic so it's not that nobody

saw that thing coming but the specifics

of when it's going to happen how bad

it's going to be is it just going to

shut down the economy for a week or two

years that is completely impossible but

there's also lots of other TED Talks

that say everything's going to be great

of course of course there's proba

there's a lot more so on balance the

world had no idea I think on balance the

world breaks once per decade not exactly

once per de but on average once per

decade everything that you thought about

risk and uncertainty and stability goes

to [ __ ] so how do I prepare if risk if

risk is what I don't see how do I

prepare there's another great quote from

Nasim talad that I like where he says

invest in preparedness not in prediction

so rather than going out of your way to

be like here's what I think is going to

happen in crypto here's what I think is

going to happen in the stock market just

make sure that you have a big enough

buffer in your finances cash liquidity

being scared of debt so that no matter

what happens you're you at least have a

Fighting Chance of enduring it and make

through one thing I've I've often

thought about is that you should have

enough cash in your investing portfolio

the amount of cash you should have

should feel like it's too much it should

feel it should make you winse a little

bit because if you only have enough cash

to put up with the risk that you can

Envision and the risk that you can

foresee you're going to miss a surprise

every single time every single surprise

is going to be a surprise to you but if

you feel like you have too much cash

then at least you have a Fighting Chance

of putting up with the 911 the co the

Harbor whatever it might be so when

people look at my asset allocation my

investments a lot of people look at it

and say you seem really conservative why

do you have this much cash what are you

saving for and my answer is always I

don't know I have no idea what I'm

saving for who are we to assume that we

can predict the risks that are going to

be in our own personal lives and

throughout the broader World nobody can

do it the only way to prepare for it is

to have what feels like too much safety

what is your capital strategy how do you

invest your money um this is you know

this is the thing people want to know

most about you I keep it as painfully

simple as I possibly can so literally my

entire net worth is cash a house and

index funds and some shares of Marquel

where I'm on the board of directors and

that's it there's nothing else my entire

I can summarize everything so easily and

so cleanly and truly that's it and it's

not even like I have 20 bank accounts I

I have one bank account one brokerage

account like in a house and that's it so

simple why why index funds you're the

reason I your Capital allocation

strategy is almost identical to mine I

want to talk about the house thing as

well but um after reading your book I

stopped trying to pick stocks yeah and I

invested all of my available Capital

into index funds outside of investing it

in starting companies so I'm a

shareholder in I don't know 50 60 70

companies I all my other available

capital is invested in index funds and

then I have a very long-standing

position in ethereum which I've held for

like six years or something which has

done me very well yeah that is it and

the ethereum investment is also based on

the fact that I run a software business

that is in blockchain and I could see

that developers are building on top of

ethereum more than any other blockchain

so that Insight was really beneficial to

me and six years so even with the big

fall of the last two years you're still

up a lot yeah I I think your book taught

me that successful investing is when you

lose the pass to your investment account

yes that's exactly it I don't actually

think you said that in there but that's

like when I lose the password to my

investment account I'm so proud of

myself yeah because it means I haven't

checked it in

forever and so it was funny because you

were coming today I thought oh yeah well

I have all this money in these index

funds I'll check it and I thought [ __ ] I

don't know the password good that's why

you're going to do okay the reason I do

this what's important is that I am not

one of the people who says nobody can

beat the market so therefore use index

funds that's not what I believe I think

there I think it's extremely hard to

beat the market and very few people will

do it but I think there are really smart

people who can do it and people who I

know who I could invest with the reason

I don't is not because I don't believe

it can be done it's because the variable

that I want to maximize for in my

investments is endurance if I can just

earn average returns for an above

average period of time it's going to

lead to amount of success that will

literally put you in the top 5% of

investors my parents are a great example

of this my parents are smart people but

they really they have no Financial

background and they like minimal

financial interest I would say and but

they have dollar cost average into index

funds for going on 40 years now and

literally if you look at the returns

they've never sold anything ever and

literally if you look at the returns

they'd probably be in the top 3% of

professional investors what is for

anyone that doesn't know what is dollar

cost averaging and what is an index fund

dollar cost averaging means you buy the

same dollar amount of Investments every

single month come hell or high water

doesn't matter what the stock market's

doing recession boom bust you say I'm

going to put $100 or whatever it is in

the stock mark on the first of every

month now most people who like have a

401k at work are doing this whether they

know it or not they have $100 or

whatever removed from every paycheck and

it goes into the funds that they own and

they don't have to do anything whether

you know it or not you're actually doing

it the contrast to that would say I'm G

to buy and sell based off of how I feel

in the stock market I wake up I watch

CNBC I decided to sell and I'm going to

put it back in when I feel better about

the market it's the contrast to that an

index fund is just a single fund that

owns hundreds or or thousands of stocks

within it and if it's diverse enough if

it's big enough really what you're doing

is you're owning a slice of the global

economy which is how I think about it

it's thousands of individual stocks in

there Tesla Apple whatever it would be

but really what you're doing is you're

owning a slice of capitalism if I was

your son and I said Dad prove to me that

that's a better long-term wealth

creation strategy than buying crypto or

buying companies that I use or like how

would you explain that to your to your

kid your ability to do well over the

next one year or 5 years is going to

have no role whatsoever on your lifetime

ability to generate wealth all that's

going to matter is not what are the best

returns you can earn all that matters

are is what are the returns that you can

sustain for the longest period of time

all that matters is your endurance it

doesn't matter if you can double your

money this year or even double your

money again the next year all that

matters is can you stick and keep it

going for 50 years that's where

compounding comes from prove it all

because the formula for compounding is

returns to the power of time

that's not quite it but like more or

less that's it so in that equation if

you understand the math all of the heavy

lifting comes from the exponent prove it

because that's how exponential growth

works that's how it works it's literally

exponential give me a case study where

someone has followed that strategy and

done well okay here's one way to explain

it that I use in the book 99% of Warren

Buffett's net worth was accumulated

after his 60th

birthday after he turned 60 years old

99% of his wealth Jesus has been

accumulated after that period because

the longer do you hold that for the

crazier the numbers get when he was 60 I

think he was worth about $3 billion lot

of money he's a multi-billionaire but

now that he's 90 he's worth over hundred

billion and he's given like a 100

billion away to charity so if he didn't

do that he'd be worth he'd go from three

billion to 200 billion since he's been

60 because the numbers just get crazier

at that point he's worth a hundred

billion dollar so if his if his Market

if his net worth goes up 10% in one year

he makes $1 billion which is three times

that he was worth when he was 60 so

that's when you look at somebody like

Buffett is he a great investor is he a

great stock picker of course but the

real secret to his success is that he's

been a good investor for 80 years and if

he had retired at age 60 or at age 50

nobody would have ever heard of him he

would have been like one of the other

multi-billionaires who lives in Florida

and plays golf and like you've never

heard of him the reason he use a

household name is because he's been

doing this non-stop since he's since

he's been 11 years old and he's never

stopped it's just the endurance that's

made him so wealthy not necessarily the

annual returns patience it's a difficult

thing it also reminds me of the story

that you talk about in the introduction

of your book about the janitor Ronald

James Reed yeah who when he died in 2014

age 92 had a net worth of over 8

million and he was a janitor how did he

do that he took what very little money

he could save from his job as a janitor

mopping floors at the gas station he put

it in stocks and he left it alone for 70

years and that's it that's all you need

that's all you need to do if you have

endurance in your investing and you can

keep it going for years or decades you

don't need to be a genius stock picker

and not only you do not need to do it if

you have endurance you're going to beat

literally 97 or 99% of the genius stock

Pickers and what's so interesting about

it is like picking the right stocks is

hard it's supposed to be hard like

there's no world in which everybody who

tries to beat the market is going to do

it of course it's hard just like being

an NBA player is hard and but having

endurance is like largely in your

control

it's so much easier to just be patient

than it is to pick the right stocks

every single day now I think some people

nature nurture some people like probably

Ronald Reed and my parents Ju Just

understand it naturally it's not hard

for them to be patient but do like there

are professional investors who work 80

hours a week for 30 years to try to beat

the market and they can't do it not only

some that that explains like most of

them and even the ones who can do it are

maybe going to beat the market by half a

percent per year 1% per year but if you

can have Endor

that is that's a bigger benefit than you

can have by even being like a very

successful stock picker like somebody

who outperforms the market by one

percentage Point per year and they can

do that for 10 years that's amazing

that's like Mount Rushmore investor but

somebody who earns average returns and

does it for 20 years is going to have

way more money you do it for 30 years

you're going to be Filthy Rich you be

like Ronald Reed you can be a janitor

who leaves 8 million to charity when you

die but so in the case of Ronald Reed do

you not look at him a little bit and go

listen bro if you had eight or9 million

in the bank you should have been living

it up see this is one I I do kind of

regret that in the book that I'm I kind

of I didn't say it explicitly but I kind

of make him out to be a role model and I

don't think that's the case he he's not

my role model I think he's a fascinating

story of somebody who became Rich

despite not having any of the pedigree

or any of the skills that you are

normally associated with wealthy people

but you're right that he lived in a a a

s wed housing and he worked as a janitor

that's not my goal so I I I want to live

a nice life I want to be independent but

he's the most extreme example that you

can come up with and I I I wish I had

stated that more clearly in the book A

lot of people have this conversation

around pensions and in the UK we we can

pay money from our salary into our

pension but I think a lot of people

think gosh when I'm 60 when I'm 65 I

want to be rich I want to be rich when

I'm 25 yeah and I can go to Vegas and

you know ball out and buy nice things

and have great experiences not when I'm

65 yeah no I think that's true I think

there are a lot of people a lot of

financial advisers will say that one of

the hardest things they do as an adviser

is getting their clients to spend money

because they've been so conditioned to

save save save save save that when they

finally retire at 65 they don't know how

to spend they have no clue how to spend

money there's a great uh author I think

you've had him on your show RIT Siti who

talks about this a lot like how you like

you need to learn how to live a a rich

life and figure out what that is for you

for some people like for me it's just

like my my happy state is like sitting

on the couch in sweatpants reading a

book going for a walk with my wife

that's that's that's my rich life that I

love doing and to do that I need to be

independent and autonomous so I can do

that all day long I can do that on a

Wednesday afternoon rid talks a lot

about like maybe your rich life I think

for him it's flying first class and

wearing nice clothes and he talks about

like he drives I think like a beat up

Honda but he flies first class and he

dresses very nicely so you just have to

figure out what is the little thing

that's going to make you happy and I

think a lot of people's problem is that

Society tells you what you're supposed

to do to be happy you're supposed to

have a nice car you're supposed to have

a big house supposed to wear nice

clothes that's what Society tells you to

do and for some people that might be the

case for other people like me I think it

it's not that's that that would not ever

make me happy what does make me happy is

Independence so I can just do these

little quirky things that I like to do

so I think you just have to figure out

the little things that make you happy

rather than just being forced by Society

into what they want you to do

knowing when enough is enough this was

one of

the most interesting things that I think

really rang true to me was how do I know

in my life when enough is enough I've

definitely been a victim to that

external narrative that I need to have

these things in my life to be a happy

person but how does one go about knowing

when enough is enough I think back to

the story of my father he just woke up

one day and it was obvious that he would

he had been doing what he did for long

enough and it was he had felt like he

had enough and whatnot and he and he

broke away from it I

think for for a lot of people it's just

I one thing that's important about the

concept of having enough in Independence

is that when most people even if they

are independent they wake up every

morning what they want to do is go to

work one of one of the big problems with

the fire movement the financial

Independence retire early movement where

people are like they're going to be a

Super Saver and then retire at age 31

whatever it' be so many of those people

who actually did that and retired at age

31 they once they retired after about

two weeks they were bored out of their

mind and if they did it for six months

they were clinically depressed cuz for

most people you want to be productive

you want to keep doing it so having

enough doesn't necessarily mean that

you're going to stop working it just

means you're going to keep doing only

the work that you want to do there's a

really interesting question that Patrick

oesi asked a lot of people uh in in his

office he says if you won a billion

dollars in the lottery but you had to

stay at this job you're a billionaire

but you can't quit what did this company

would you want to do and what would you

get rid of and virtually everyone has an

answer for that question they say oh if

I didn't need the money but I have to

stay I would love to work on this

project I love working on this thing

this that and the other is all [ __ ]

to me so like in any job there's going

to be something that you want to do

there's going to be some project there's

going to be some position or or or maybe

it's like being an artist whatever it

would be it's not that you stop working

it's that when you have enough you get

to pick and choose which of those things

you're going to end up doing it's often

too late in our lives when we realize

the cost that we've paid for enough

never being enough you know it could

could be family it could be Health

whatever um I always reflect on the with

Brony we wasn't it who interviewed

people on their deathbeds and found out

that the biggest regret of the dying was

not living a life true to themselves

working too much Etc but that's on your

deathbed there's nothing you can do at

that point right and I think a lot about

this like what am I going to regret yes

I think about that too I think this is

this is pretty morbid to think about but

I think about if I were on my deathbed

tomorrow would I regret working hard and

saving a lot of money and my answer is

absolutely not it would give me so much

pleasure to know that my wife and my

young kids are going to be fine and the

opposite of that I cannot fathom being

on my deathbed and looking at my wife

and my 8-year-old son and my

four-year-old daughter and thinking you

guys are screwed that would that that

would that would be the biggest regret I

can fathom so I think a lot of people

would look at someone with a high

savings rate like me and would assume

that I'm going to regret it on my

deathbed and who knows but I I I have to

think it would actually be the opposite

what makes me gives me so much happiness

and pleasure is taking care of my family

and if I were to go tomorrow I wouldn't

regret for one second the car that I

didn't buy the big house I didn't buy

the nice clothes I didn't buy not for a

second would I regret not doing those

it's a really good frame to think there

isn't it about our financial decision-

making and you know a lot of people like

saving up to buy a lot of nonsense

that's going to depreciate and would you

rather have a little Nest Egg left over

for the ones you love or buy that

Lamborghini there's another great book

called die with zero which basically the

title is self-explanatory and one of the

concepts is even if you want to give

money away way to your family don't wait

until you die don't make your kids wait

or like hope you're going to die so they

can get their inheritance give it to

them when it really matters which for

most people is in their 30s and 40s if

you wait until you die at age 90 and

your kids are 60 and then they get your

money like what's the purpose of that

give it to them when they need it when

they're raising kids and whatnot that's

when they need your money I I I really

like that concept I think about that

with my own kids the counter point to

that is though if I just give my kids

money then like the chth quote

they might lose it quick think about

that especially as you know someone that

has a lot of cash they could give I

think about this because at some point

I'm G to have kids and they're going to

Daddy I want to do a driving lesson or

they're going to be 18 and go off to

University or whatever God I hope they

don't go to university um and they're

going to say like I've got nowhere to

live or I found this nice apartment dad

and in those moments do I make the

decision to pay for it because I can or

withhold it because they need to learn

the hard way I have this yeah I'd call

it an argument with my girlfriend

where I say babe listen when we have

kids they're going to sit an economy and

she's like absolutely not yeah and I'm

like no babe when they get okay we made

a deal I think we got to about when

they're 12 years old I'm going to put

them in economy so they can learn for

themselves the value of things see we we

made this mistake I don't think I've

ever talked about this but it was about

a year ago we flew my son who was me I

guess he was seven at the time we flew

first class and we explained to him that

this was not normal this was not going

to be the way it is as soon as as he did

it he went home he told all of our

neighbors told all of his friends told

everybody at school and that was when my

I like can't can't do this never again

you see how quickly somebody can be

spoiled or use that to try to show other

people that they are superior to them

that's when it was like no no we can't

ever do this ever again and you moved

his expectations in a way absolutely I

didn't fly first class till I was 35 and

he did it at 7 and so that my when I

first did it at 35 I remember feeling a

I earned this I worked for this and Al

felt so special to me because I'd flown

coach 9,000 times before that so it felt

amazing and so that's I I I think about

that a lot there's a great quote from

Charlie Munger where one of his rich

friends says Charlie if I give my kids

all of my money is that going to ruin

their ambition and Charlie says of

course it will but you have to do it

anyways and the guy says why and Charlie

says because if you don't your kids will

hate you and I think that's that too is

like lots of Charlie Monger quotes are

are framed as black and white they're

extreme but I think that's probably like

80% true really that it's it's maybe 70%

true that if you are a wealthy person

and I'm not talking billionaires if you

just have a moderate amount of wealth

that you might pass along to your kids

someday that your two options are kind

of at least to some extent hurt their

ambition or risk some level of strife

and it's always child dependent like I

always make the example that if

18-year-old Bill Gates or Mark

Zuckerberg or Elon Musk inherited a

billion dollars would have made any

difference to their ambition they would

have they would not have slowed them

down by one second but most people

including myself it would have like I

was driven by fear of not making it

which is what most people are I was I

was scared shitless that I was not going

to find the right career that I wasn't

going to make it and that's what drove

me some people don't need that but I

think it's very rare I think the huge

majority of people if you give them an

easy life they will take it and embrace

it with both hands making money and

keeping money require two different

skills you you've spoken about a few of

the skills that are required for making

money the one that really stuck out to

me that you've discussed so far is this

idea of endurance patience regardless of

what's happening in the markets

regardless of the volatility lose your

password and sit on your hands just on

that point as well I remember reading

somewhere it might have even been your

book you know it's so crazy because the

things that I know about money I can't

remember where I've got them from but

most of them came from this book like

most of the principles came from this

book and one of the things that I read

was that Warren Buffett would go like

five years without allocating capital

and this where he said the hardest thing

to be a great investor is to be able to

sit on your hands and do nothing sit on

your ass and do nothing that's it that's

that's AER quote and that's what they're

doing right now right now Berkshire

hathway which is Warren Buffett's

company has like $150 billion dollar of

cash right now and that's their entire

uh 60-year history of Warren Buffett and

Brookshire hathway is build up a

shitload of cash wait 10 years for an

opportunity deploy it all and then go

back to waiting and building up cash

crazy and that's that's that's how they

done it good opportunities are rare of

course they are they should be rare it

shouldn't be that anybody can just open

up their stock account and find the

opportunity of a lifetime what are the

gonna come once a decade what are the

other skills then endurance patience to

create to get money for the for the

ordinary person endurance and patience

is 99% of what you need as an investor

because the opportunities there to

invest in a lowcost Index Fund are

available for everybody and you can do

that from your phone like you do it from

your phone open up a Robinhood account

buy some index funds anybody can do that

and so that and but that was not always

the case it used to be 20 years ago that

the only people who could invest were

people who had a lot of money and could

afford a broker and had connection to a

broker and you yet to like make a phone

call make a phone call you had to know a

guy and even then you were going to pay

a ridiculous fee to that person for do

pieces of paper and all kinds it was a

joke and that's 20 years ago it's not

that long ago so I think like people

aren't grateful enough or appreciative

enough of how much things have changed

that open up those opportunities for

everybody you talk about the skill of

keeping money which is different from

the skill of getting money is predicated

on Survival Financial survival and just

putting up with all the unpredictable

nonsense that's going to happen between

now and the end of your life and we

talked earlier about the surprises Pearl

Harbor 9911 all these big surprises just

it's just your ability to endure things

like that that's going to be literally

90% of your financial success and your