00:00:00- You are my favorite writer.
00:00:02- Thank you.
00:00:03- You have the most insights per word
00:00:05of anybody that's writing stuff at the moment.
00:00:08- Well thanks, that means a lot to me, thank you.
00:00:10- You could have chosen to write about anything.
00:00:13Why choose to write about spending money?
00:00:15- Well, I'll take it back to the start of my career,
00:00:18which was like a lot of young men,
00:00:20particularly in the mid 2000s.
00:00:23The ultimate goal, before tech really existed,
00:00:26the ultimate goal was be an investment banker on Wall Street.
00:00:29And it's hard to remember that era,
00:00:31'cause now if you're a young person at Stanford or whatever,
00:00:33your goal is like go work at Google, go work at OpenAI.
00:00:37Back then it was all go work at Goldman Sachs.
00:00:39And so my sole kind of life aspiration when I was 20
00:00:44was to be an investment banker or a hedge fund manager.
00:00:47And I knew I loved investing, even at that age,
00:00:49I used to go to Barnes and Noble and read investing books,
00:00:52and I loved it to begin with, I was fascinated with money.
00:00:56And then I haphazardly got a job as a writer,
00:00:59because I graduated in 2008, the economy was a wreck
00:01:03and nobody was hiring, no banks were hiring.
00:01:05And so the only finance job that I could find
00:01:07was as a writer for The Motley Fool.
00:01:09Didn't wanna be a writer, hated writing,
00:01:11was embarrassed that I had dreams
00:01:13to be a powerful investment banker and now I was a journalist.
00:01:16I was like, I hated that.
00:01:17But I actually like pretty quickly fell in love with it.
00:01:20And what I loved about it was I loved being an outsider
00:01:24who was not being influenced
00:01:26by the incentives of that career.
00:01:28And so if you are a hedge fund manager,
00:01:30you have a lot of incentives and biases based around that.
00:01:34If you are a financial advisor, there's a lot of just,
00:01:37you have to think a certain way to fit into that profession.
00:01:40And I felt like as a writer, and I'm not a journalist,
00:01:43as a writer, I could just be on the outside looking in.
00:01:45I felt like I was just up in the bleachers looking down
00:01:48and be like, let me try to figure out
00:01:49what's going on down there.
00:01:50- Only if you set the players on the pitch.
00:01:51- Yes, and then tell a story behind it.
00:01:53And to me, money, I think I got lucky because money,
00:01:57I think has more fascinating social stories in it
00:02:01than almost any other field.
00:02:03Where how you spend money and how you save money
00:02:05and your ambitions are such a window into who you are.
00:02:09And of course, there's a lot of other things in life
00:02:10that are more important than money,
00:02:11family and purpose and whatnot.
00:02:13But money is a very clear window into who you are.
00:02:16And so I feel like there's just an endless well
00:02:19of interesting stories to tell about it.
00:02:21- What can you tell about someone
00:02:22from the way that they spend money?
00:02:24- So much of it is about your ambitions
00:02:26and who you think about yourself.
00:02:27I really, I'm not anti-materialistic at all.
00:02:30And I really don't judge other people.
00:02:32But when I see somebody driving a yellow Lamborghini,
00:02:35I'm like, there's a story there.
00:02:36There's a story there.
00:02:37And it's not a judging story, but that's a story
00:02:40of who you wanna be and what you wanna show off.
00:02:42Now, some people have expensive cars
00:02:44'cause they love the craftsmanship
00:02:46and the engineering and whatnot.
00:02:47They're truly doing it for--
00:02:49- Which is still a story.
00:02:50- It's still a story.
00:02:51But whenever I see someone clearly peacocking
00:02:54and there's a lot of it, you see it,
00:02:56there's a story in there.
00:02:57I found this headline from 1929,
00:03:00which was the peak just before the Great Depression.
00:03:03And it was such a good headline.
00:03:04It was in the Washington Post.
00:03:05It was, "The more you are snubbed while poor,
00:03:08"the more you enjoy displaying being rich."
00:03:12And I was like, there's, it's almost like
00:03:14you don't even need to read the article.
00:03:15Like that's it.
00:03:15That's so astute and I think so true
00:03:19that for a lot of people, not everybody,
00:03:21but for a lot of people, the more you are showing off
00:03:23or you just desire to show off,
00:03:26a lot of it is a wound that was inflicted upon you
00:03:29and you're like, I'm gonna get back.
00:03:31And sometimes too, you're not even showing off
00:03:33for other people.
00:03:34You're doing it to prove to yourself,
00:03:36to signal to yourself that I did it.
00:03:39I remember talking to Anthony Scaramucci about this.
00:03:42And he said that he grew up in one social class
00:03:46where the ultimate signal that you made it to yourself,
00:03:49that you overcame where you became, was the Lamborghini.
00:03:53That was it.
00:03:54And so he said, he was like,
00:03:56I don't want it for other people.
00:03:57I want to do it to show myself that that kid
00:04:00who grew up down there made it up here.
00:04:02So it's a signaling a story either way.
00:04:04And that's why it's not judging.
00:04:06It's just, but it's an interesting window into who you are.
00:04:09- Like retributive materialism is what it's making me think of
00:04:12that I am going to get back at whatever that thing was
00:04:16from my past.
00:04:16- Yeah, and we--
00:04:18- You see this across everything.
00:04:19You see this across people who spend a lot of time
00:04:23beautifying themselves,
00:04:24what's because they probably at one point in their life
00:04:26felt quite ugly.
00:04:27Somebody who spends a lot of time accumulating power,
00:04:31or at one point they probably felt pretty powerless.
00:04:34Somebody who tries to accumulate a lot of wealth,
00:04:36well, they felt like they maybe didn't have very much freedom
00:04:39or they didn't have very much independence
00:04:41or they were very poor.
00:04:43Somebody who makes themselves very powerful and very strong
00:04:46and very big, well, at one point,
00:04:48they probably felt very weak.
00:04:49It's not a wonderful lesson because in the calling out of it,
00:04:56it sort of derogates the thing that most people are chasing
00:05:00and everyone fucking hates that
00:05:02because it devalues the goal that they haven't yet reached
00:05:04or the one that they have reached.
00:05:05And so look how fucking hard I worked to get to this place.
00:05:07And you're telling me this is part of just some childhood
00:05:10ancestral wound thing?
00:05:11It's like, I get that.
00:05:12But if you look around closely,
00:05:15the reliability of being able to pattern match
00:05:17what somebody becomes or is trying to become
00:05:21and what it is that they fear or what they used to be
00:05:25is really high hit rate.
00:05:27And the saying that a lot of people know,
00:05:29hurt people hurt people.
00:05:31There's a lot of cousins of that,
00:05:32of just like the way that we behave and act
00:05:35is a reflection of insecurities,
00:05:37things that were done to us that we had in life,
00:05:40or even positive experiences that we've had in life.
00:05:43I think a lot of people who grew up very wealthy,
00:05:45they have a very interesting financial psychology as well.
00:05:48They understand, I think very acutely
00:05:51what money cannot do for you.
00:05:53So a lot of them, if you talk to them and be like,
00:05:54yeah, we grew up very rich and we had all these homes
00:05:56and all these cars, but pick whatever story you want.
00:06:00Like my parents didn't get along.
00:06:01My parents got divorced.
00:06:02My dad didn't have any relationship with me.
00:06:04I was bullied at school.
00:06:05Like they're very acute.
00:06:07They're acutely aware that money can solve a lot of problems
00:06:10and build an amazing life for you, of course.
00:06:12But I think when you're poor,
00:06:13it's easy to tell yourself that's the solution
00:06:16to all my problems.
00:06:18That if only I had that much money,
00:06:19then this hole I have in my soul would go away
00:06:22and it would be, it'd fill up and everything would be done.
00:06:24And the people who grew up rich know that that's not true.
00:06:28- Will a big house make you happier?
00:06:30- If you use it as a way to have better relationships
00:06:35with people, if you have a big house,
00:06:37so you can have 20 of your best buddies over
00:06:39every Friday night and have a great time, yes.
00:06:41If you have a big house because that's what you need
00:06:44for you and your spouse to have five kids
00:06:46and that's your meaning and purpose in life,
00:06:47yes, absolutely.
00:06:49But I think if you're using it as a way of just like a,
00:06:54because that's what you should want kind of thing,
00:06:56then it could be pretty miserable.
00:06:57Very interesting.
00:06:58Harvey Firestone, who created Firestone Tires.
00:07:01He was alive 120 years ago or some odd.
00:07:04He wrote a biography in the 1920s and he pointed this out.
00:07:08He said, every wealthy person that he knows without exception
00:07:12buys a gigantic house and every single one of them
00:07:16without exception finds it to just be a tremendous burden.
00:07:19(laughing)
00:07:20And he was like, why do we do it?
00:07:22And he even said Henry Ford, who at the time
00:07:24was like a cheap miser kind of.
00:07:27He was like, even Henry Ford has a gigantic house
00:07:30that he hates.
00:07:31But he's like, there has to be something in the human soul
00:07:35that just associates large property with success.
00:07:38Big abode.
00:07:39And I think a lot of people who have a big house know this.
00:07:42Like a big house is a tremendous amount of upkeep.
00:07:45And a lot of people who live in those giant homes
00:07:48will eventually basically seclude themselves
00:07:50to a small little corner of that house that feels homely.
00:07:53I would love to see people who have homes
00:07:56over 10,000 square feet or whatever.
00:07:58I'd love to do one of those GPS tracking maps.
00:08:01Yes, where do you stay with wolves?
00:08:02And I'd want to see, oh my God,
00:08:05you know of the 10,000 square feet that your house is?
00:08:08You use the same 1,500 square feet
00:08:12and you would be able to purchase that in this location
00:08:15or however many of these or this is what you lived in.
00:08:18You use the size of house that you lived in
00:08:20when you were 22 and you're still living in that same house.
00:08:25There's just slightly bigger surroundings.
00:08:26But even if you showed that person that information
00:08:29or for myself and you said, hey,
00:08:31you could actually only live in a house
00:08:32that's 1,500 square feet.
00:08:34No, no thanks, not interested.
00:08:36So that's what Harvey Firestone got right.
00:08:38He was like, it's a burden but you still do it
00:08:40and you're still going to do it.
00:08:41I have a friend whose parents live
00:08:43in a 20,000 square foot house and he gave us a tour.
00:08:45And the tour was basically, yeah, down that hall,
00:08:48there's four bedrooms that nobody ever uses.
00:08:50Down this hall, there's a room.
00:08:52It was gonna be a gym but we actually put the gym downstairs.
00:08:55Nobody ever uses it.
00:08:56He was giving us a tour of places that are never used
00:08:59and just like I said, they basically secluded themselves
00:09:01to the kitchen, living room, bedroom and that was it.
00:09:03- Behold, my obsolescence.
00:09:05Look at how much surplus I have.
00:09:07- But I think this is why it's such a fascinating topic
00:09:10because people have always done that
00:09:11and they will always do it.
00:09:12- An interesting point is even rich people,
00:09:17not all rich people buy fancy cars.
00:09:20Now everyone's into cars.
00:09:22Not all rich people, most rich people fly
00:09:26at a slightly nicer class.
00:09:27I think that's one of the places.
00:09:29Very few people regret choosing to fly business
00:09:33over flying economy if you're in the market
00:09:35for that kind of travel quality.
00:09:38- Yeah, this is what Sam Zell,
00:09:39who was a billionaire real estate guy,
00:09:41he told David Senra this.
00:09:43Sam Zell said the only true material luxury is flying private.
00:09:48So Sam's advice, it's ambitious advice.
00:09:51He was like, get the private jet money.
00:09:52That's the only thing that makes a difference in your life.
00:09:54- Scott Galloway said once you're able to own your own home,
00:09:58the only next thing worth buying
00:10:00is being able to have a jet.
00:10:01- And obviously that's 0.0001% money.
00:10:04- Yeah, I'm like, Scott, the difference between,
00:10:06I mean, for a lot of people being able to buy a house
00:10:08is out of fucking reach at the moment.
00:10:11And then the jet thing, but at least to me,
00:10:15the sort of funny note on that was like, what about a yacht?
00:10:17And he's like, yachts are stupid.
00:10:18- No, pain in the ass.
00:10:19- Yeah, I thought it was so funny.
00:10:22How do you define financial success then,
00:10:26after all of this time thinking about it,
00:10:28what does financial success come to mean?
00:10:30- To me, it's independence to be who you wanna be.
00:10:33And who I wanna be is not who you wanna be.
00:10:36Everyone has their own very
00:10:37individualistic definition of that.
00:10:40It's waking up and saying, I can do whatever I want today
00:10:43and having the independence and the freedom to do that.
00:10:45And the distinction is there are billionaires
00:10:47who have no control over their time,
00:10:49no control over their schedule,
00:10:50spend their entire day doing things that they don't wanna do.
00:10:53And there are people who make $50,000 a year
00:10:55who are living their absolute best life
00:10:57and totally control their life.
00:10:59Control where they live, where they work,
00:11:01who they spend their time with,
00:11:03doing the hobbies that they wanna do.
00:11:05And so to me, that's really what wealth is.
00:11:07And I think a lot of people can get this wrong
00:11:09in their ambitions.
00:11:11That if your sole financial ambition is,
00:11:13I want the highest net worth,
00:11:15and the way in which you're gonna get that
00:11:18is to basically put on a performance
00:11:21of somebody that you're not and wake up every morning
00:11:23and do things that you don't enjoy doing.
00:11:25And that's not to say hard work.
00:11:28I think the vast majority of people get a big thrill
00:11:31and a lot of pleasure out of hard work.
00:11:32They like being productive doing the thing
00:11:33that they wanna do.
00:11:35It's working hard on things that you genuinely don't enjoy
00:11:38solely because you're attracted to a bigger bank account.
00:11:42But then that's a very common thing.
00:11:43So I think the definition of wealth is the ability,
00:11:47the pleasure of being who you wanna be,
00:11:49being independent, waking up every morning and saying,
00:11:52what I'm gonna do today is the thing that I want to do.
00:11:55- Wealth without independence is a unique form of poverty.
00:11:59- That's what it is for a lot of wealthy people.
00:12:01This to me is one of the most fascinating things
00:12:03of meeting a lot of wealthy people.
00:12:04If you associate wealth with material,
00:12:07and you go, they have a big house,
00:12:08they have a big car, maybe they have a plane,
00:12:10and you associate, oh, this person is very wealthy.
00:12:12And for a lot of them, not all of them,
00:12:14but for a lot of them, if you get to know them,
00:12:17they spend the vast majority of their day
00:12:18doing things that they don't wanna do.
00:12:20And that to me, that still might be appealing to some people.
00:12:24Or if you're not at that, you might say,
00:12:26look, I understand you say that,
00:12:27but let me experience it for myself.
00:12:29Let me try to do that.
00:12:30That's always the appeal.
00:12:31So I get that.
00:12:32But of the very wealthy people I've met,
00:12:35some of them have truly amazing lives.
00:12:37And I wouldn't say jealous,
00:12:39but I look at them and be like, I want to be you.
00:12:42I think there's a greater number though,
00:12:44that if you get to know them, you're like, wow,
00:12:46that's not what I thought it would be.
00:12:48Well, a lot of people have to do things
00:12:50that they don't want to do.
00:12:52And many people who work super hard, two jobs,
00:12:55got the kids, all the rest of the stuff would say,
00:12:57well, you know, good.
00:12:59They should do, I have to work hard and so should they.
00:13:02You go, yeah, but why do you think
00:13:04they made themselves wealthy?
00:13:06What would you do if you, well, if I was wealthy,
00:13:08I wouldn't have to work the second job.
00:13:09It's like, if you are the sort of person
00:13:12who is driven to make yourself into the kind of wealth
00:13:15that they have, you can't turn off the switch.
00:13:18You can't, you're never going to meet a billionaire
00:13:21except on the very few people who like accidentally got rich.
00:13:24You're never going to meet a self-made billionaire
00:13:26who has a kind of personality who could say, that's enough.
00:13:28Let me put it all in muni bonds and go home.
00:13:30It's not, it's not, the reason that they are successful
00:13:33is because they have the kind of personality
00:13:35where they cannot, 24 hours a day,
00:13:37all they can think about is their business.
00:13:39And that's, and even if I would say,
00:13:41I don't want that for myself, of course,
00:13:43I want to be financially successful
00:13:45and I enjoy the work that I do.
00:13:46I'm so grateful that those people exist.
00:13:49Like the vast majority of the great technology
00:13:51and great medicine that we all enjoy in the world
00:13:53came from people who were maniacally obsessed
00:13:56about their job, even if it came at the expense
00:13:58of their health, their marriage,
00:14:01their relationship with their kids.
00:14:02They created something amazing
00:14:04and that's why they got successful.
00:14:05- Human perpetual motion machines.
00:14:07- Yes. - They're just churning,
00:14:09sucking in problems and spitting out solutions.
00:14:12- Yeah, I think we should be almost the most grateful
00:14:14for people in society who created amazing technology
00:14:17and amazing things at the expense of their own happiness
00:14:20that we all get to benefit from now.
00:14:21- Yeah, I mean, it should be a cautionary tale,
00:14:24but from the outside, everybody looks at it
00:14:26and thinks some version of that might be true for them,
00:14:30but it won't be true for me.
00:14:31Watch me dance through the minefield
00:14:34that has been laid by art and literature and movies
00:14:39and songs and stories from my grandparents
00:14:42and the most famous investors from history.
00:14:45Watch me dance through that minefield
00:14:47and not kick any of the trip wires.
00:14:49- David Senra has profiled 400
00:14:52of the most successful entrepreneurs.
00:14:54He's done such a good job doing it.
00:14:56And he says of the 400 entrepreneurs he's profiled,
00:14:59there's two whose lives that he thinks
00:15:02that he would actually want to live.
00:15:04- Who are they?
00:15:05- One is Ed Thorp, who was a card counter in Vegas
00:15:09and then a hedge fund manager
00:15:11and had just an amazing personal life on the side.
00:15:14Just amazing family, incredible health.
00:15:16I think he's still around.
00:15:17I think Ed Thorp is 90 years old and genuinely looks 55.
00:15:22Incredible life.
00:15:23But of the other 399 people that he's profiled,
00:15:26it's that person created something amazing,
00:15:29built an incredible thing, an amazing amount of wealth,
00:15:31technology that we all benefit from,
00:15:33and we should worship that person or admire that person.
00:15:35And I would never want to be them.
00:15:37- Yeah, yeah, yeah, yeah.
00:15:39And evade them as much as you can, at least in a role model.
00:15:42You got this great line, money serves you best
00:15:44when it stops being the thing you think about.
00:15:46- Yeah, I think a lot, the vast majority
00:15:48of successful entrepreneurs,
00:15:50with the exception of maybe hedge fund managers,
00:15:52were not chasing the money.
00:15:53They were absolutely fascinated with the problem
00:15:55that they were trying to solve,
00:15:57but they weren't doing it just to get rich.
00:15:59The money came, it eventually came.
00:16:01If you solve enough problems in a way
00:16:02that's helpful for people, it'll eventually come to you.
00:16:05But I think people, entrepreneurs who set out the goal
00:16:08was to become rich, very seldomly do.
00:16:10- Oh, I actually took that line to mean something else.
00:16:14Money serves you best when it stops
00:16:15being the thing you think about.
00:16:16I took that to mean that your ultimate form of wealth
00:16:21is when you no longer have to think about
00:16:23the cost of a thing.
00:16:24You turn up at dinner and you don't mind
00:16:25putting your card down, you need to buy some more.
00:16:27- You can stop thinking about it.
00:16:29- So I was in Nashville a couple months ago, on tour.
00:16:33And I was there with Luke, who's my tour manager,
00:16:36and he was telling me this story about how
00:16:38his Mrs. gets mad at him because it's 1 a.m.
00:16:42and he's still WhatsApp-ing away.
00:16:44He has the highest phone use of anybody.
00:16:46Gen Z girls, TikTok addicts, like D-Gen.
00:16:49He has the highest and it's all work.
00:16:52It's just work and he just loves it.
00:16:53Used to be a club promoter, same industry as me.
00:16:56And the guy's an animal.
00:16:57He's so good at what he does and he is unrelenting.
00:16:59And he has a lot of fun doing it too.
00:17:01So it's this kind of weird intersection
00:17:03of all the Venn diagrams.
00:17:04And he made this really fucking wonderful point.
00:17:07He said, "I have a brain that likes to solve problems.
00:17:11"I'm just trying to give it good problems to solve."
00:17:13- Yeah, great.
00:17:14- And I was like, still, chills on my arms thinking about it
00:17:17because lots of people have the kind of brains
00:17:21that are just looking to obsess over something,
00:17:24to try and fix, make this piece fit to that piece.
00:17:28He is fortunate that he has managed to find business
00:17:33and kids and jujitsu and wife and health stuff
00:17:37and a bunch of interesting problems.
00:17:40Allow me to apply it to that.
00:17:41But if you don't have a sufficiently interesting problem,
00:17:43that's when people get obsessed with politics
00:17:46or porn or their ex or whatever it might be.
00:17:48And I think a really great solution to this,
00:17:52maybe should you do enough mindfulness
00:17:55to be able to relinquish your permanent obsession
00:17:57with problems, perhaps.
00:17:59But a good interim strategy is just give yourself
00:18:02better problems to solve.
00:18:03- I mean, a cousin of what you just said
00:18:05is the fire movement, financial independence,
00:18:08retire early and all these people who would try
00:18:10to live incredibly frugal lives with a high savings rate
00:18:12and then they would retire when they were 28
00:18:14and had half a million bucks in the bank,
00:18:15whatever it would be.
00:18:16So many of the people who actually did that,
00:18:18who retired when they were 28,
00:18:20were clinically depressed six months later.
00:18:23'Cause they realized what their actual purpose was in life
00:18:26that gave them meaning and whatnot was work.
00:18:28And so many of those people who did retire went back to work.
00:18:31And so the idea that we all need meaningful problems
00:18:35to solve and to go is really important.
00:18:37And a lot of people get this wrong with retirement.
00:18:39They spend all of their retirement planning
00:18:40on how do I save enough money?
00:18:42And none of it on what am I gonna do in retirement?
00:18:45I mean, that's a big problem for people.
00:18:49- In other news, you've probably heard me talk
00:18:51about Element before and that's because I am, frankly,
00:18:55dependent on it.
00:18:57And it's how I've started my day every single morning.
00:19:00This is the best tasting hydration drink on the market.
00:19:03You might think, why do I need to be more hydrated?
00:19:04Because proper hydration is not just
00:19:06about drinking enough water.
00:19:07It's having sufficient electrolytes to allow your body
00:19:09to use those fluids.
00:19:11Each Grab and Go stick pack is a science-backed
00:19:14electrolyte ratio of sodium, potassium, and magnesium.
00:19:16It's got no sugar, coloring, artificial ingredients,
00:19:19or any other junk.
00:19:20This plays a critical role in reducing muscle cramps
00:19:22and fatigue while optimizing brain health,
00:19:24regulating your appetite, and curbing cravings.
00:19:27This orange flavor in a cold glass of water
00:19:29is a sweet, salty, orangey nectar,
00:19:32and you will genuinely feel a difference when you take it
00:19:35versus when you don't, which is why I keep going on about it.
00:19:37Best of all, there's a no questions asked refund policy
00:19:39with an unlimited duration.
00:19:40Buy it, use it all, and if you don't like it for any reason,
00:19:43they give you your money back
00:19:44and you don't even have to return the box.
00:19:46That's how confident they are that you'll love it.
00:19:48Plus, they offer free shipping in the US.
00:19:50Right now, you can get a free sample pack
00:19:51of Element's most popular flavors with your first purchase
00:19:54by going to the link in the description below
00:19:55or heading to drinklmnt.com/modernwisdom.
00:19:59That's drinklmnt.com/modernwisdom.
00:20:03Isn't there some data around people
00:20:06who retire dying most more quickly as well?
00:20:09I'm pretty sure that there was a study done
00:20:11on people who decide that they're going to retire at 60 or 65.
00:20:14And there are many things that contribute
00:20:16to how long you're going to live,
00:20:18but one of them seems to be how early you stop working.
00:20:22And if you stop working earlier, you tend to die sooner.
00:20:26And I mean, continuing to serve your corporate overlord
00:20:31as a longevity strategy might be a little bit
00:20:33of a high risk move for me to put forward.
00:20:35But I think the lesson is, yes,
00:20:38meaning purpose, reason to get up, structure,
00:20:41collegial, sharing with other people,
00:20:43problems to solve, keeping the mind active.
00:20:46It's a big suite of things that come from work
00:20:48that is more than just the paycheck.
00:20:51The only formula that I put in the book,
00:20:54it's the simplest that I could do is,
00:20:56a formula for a pretty good life
00:20:57is independence plus purpose.
00:20:59And I think it's hard to have a good, meaningful life
00:21:02without both of those things.
00:21:04The independence to be who you are and do what you want
00:21:07and the purpose, the wisdom to solve interesting problems,
00:21:11hard problems, as you said, I think that's important.
00:21:13I think you need both of those to have a good life.
00:21:16- And I guess you need the independence
00:21:18so that you can choose the problems you want to solve.
00:21:21- And purpose will be different for everybody.
00:21:23For me, it's my kids right now.
00:21:25That'll change when they're on their own.
00:21:27For some people it's work, some people it's religion,
00:21:29whatever it might be.
00:21:30The independence to be who you are
00:21:32and to chase something that is bigger than yourself,
00:21:34work on a problem that is bigger than yourself.
00:21:36- Talk to me about the relativity of wealth,
00:21:38the comparison and anchors.
00:21:41- I think you have to choose your words carefully
00:21:44when you say this
00:21:45'cause you can really offend a lot of people.
00:21:46But the average, ordinary, median, middle-class American today
00:21:52earning $60,000, whatever the median income is,
00:21:55lives a life that would be indistinguishable from magic
00:21:58to somebody 100 years ago.
00:22:00I mean, that's true.
00:22:01Just the access to the simplest things
00:22:05that you and I never think about, Advil, sunscreen,
00:22:08let alone phones and the internet and whatnot,
00:22:10would have seemed like magic to people.
00:22:12It is also true, and this is the important part,
00:22:14it's also true that nobody wakes up
00:22:16thinking about how magical Advil is
00:22:18and how grateful we should be to live in a world
00:22:20that has Advil and penicillin and all that.
00:22:23The speed at which a luxury becomes a necessity
00:22:27is two seconds.
00:22:28And you can easily imagine a world in which our grandkids
00:22:32live in a world that if we could get a glimpse of it,
00:22:35had a time machine and could see how they're living
00:22:36in the world, 2150, be like,
00:22:38you guys must wake up so happy.
00:22:42We've cured cancer, we've done all these things,
00:22:44we're a multi-planetary species, whatever it might be,
00:22:47and they won't appreciate any of it
00:22:49because it'll just become a normal thing.
00:22:51And so that's always the case that luxury becomes necessity
00:22:55very, very quickly.
00:22:56It's always been the case that there's no definition
00:22:59of wealth, there's no objective definition of wealth.
00:23:02The only definition that makes sense to people
00:23:04is relative to other people.
00:23:06And so it doesn't matter how much money that I have,
00:23:09all that matters is that I have more than you.
00:23:11That's always been the case.
00:23:12It is 100 times more potent now because of social media.
00:23:16So what I just said was true 100 years ago,
00:23:17extra thousand years ago, you judge yourself
00:23:19relative to other people, but your comparison group now
00:23:22that you're comparing yourself to
00:23:23is a curated algorithmic highlighted real
00:23:27of the top 1% of moments of the top 1% of people's lives.
00:23:30- Globally.
00:23:31- Yes, globally.
00:23:32And so it's created this idea, look, as an iron rule of math,
00:23:36half the population has to be below the median.
00:23:39That's just how it works.
00:23:40Half the population has to be below average.
00:23:42And when everybody though is being almost force fed,
00:23:46the top 1% of moments of the top 1% of people's lives,
00:23:49you create the situation where a lot of people
00:23:52are living good lives by any historical standard.
00:23:56But we've created a world where I think most people expect
00:23:59what is effectively a top 1% outcome.
00:24:01And you see this a lot with college students
00:24:04where a lot of people think that the baseline norm
00:24:08of what they want in life is a bachelor's degree
00:24:10from a flagship university, a corporate job
00:24:13that pays low six figures to begin with,
00:24:16great health insurance, great retirement,
00:24:18a 3,000 square foot house with two SUVs,
00:24:21that's become their baseline norm
00:24:23of like that's just what I expect.
00:24:25- Anything short of that.
00:24:26- Anything short of that is a failure.
00:24:28And on one hand, I wanna live in a world
00:24:30that has rising expectations.
00:24:32That's what progress is.
00:24:33I wanna live in a world where my grandkids live in a world
00:24:36where cancer is cured and they don't even think about it.
00:24:38That's the dream.
00:24:39Rising expectations is progress, that's what it is.
00:24:42But you also have to expect and understand
00:24:46that in that world, that growth individually
00:24:50and as a whole society is never gonna feel
00:24:52like you think it would be
00:24:53because it just becomes the norm that you're expecting.
00:24:56- Yeah, the median income is 83,000.
00:24:59- For a household, individually it's lower
00:25:02'cause there's more than one worker per household.
00:25:04You know, there's one and a half
00:25:06or whatever workers per household are.
00:25:08- That's interesting.
00:25:09You're right, the median US household income.
00:25:11- Household income, yeah.
00:25:12So individually it's probably 60 or something.
00:25:14Whatever, maybe 50, whatever it is.
00:25:15- Oh, interesting.
00:25:16I think the sort of relativity thing is completely true.
00:25:24There is no such thing as objective wealth.
00:25:25There is only subjective wealth
00:25:27compared to the people around you.
00:25:28But there's another comparison and it's you yesterday.
00:25:31So not only do you need to be more than the people around you
00:25:36but let's say you even managed to do that, right?
00:25:38Which is by design, you're the outlier in that group.
00:25:41So however big the group is,
00:25:43which is now eight billion people,
00:25:45but local friend group, neighborhood, whatever it might be,
00:25:49I've done it.
00:25:50I'm in the top 10% or 1% of people
00:25:52that I compare myself to.
00:25:54Okay, and how's your trajectory doing up against you
00:25:57because you now have to run on a treadmill
00:25:59that's not only faster than all of the other people
00:26:02running on treadmills next to you,
00:26:03but the treadmill can only get faster on yours
00:26:07irrespective of what they do at the same time.
00:26:09And that trajectory piece,
00:26:12I know you're a massive fan of Jimmy Carr.
00:26:14He's a great friend and the guy fucking rules, dude.
00:26:17- The best, so smart.
00:26:19- He's great.
00:26:20And he has this idea.
00:26:23Trajectory is more important than position.
00:26:25If you were the 100th best downhill skier in the world,
00:26:28but last year you were 150,
00:26:31you are in a subjectively better position
00:26:34than the second best downhill skier in the world
00:26:36who last year was number one.
00:26:37- Yeah, oh, that's absolutely true.
00:26:40I think for a lot of people,
00:26:41what they really like with money is not even being rich.
00:26:45It's the process of becoming rich.
00:26:47The change in the trajectory is way more exciting.
00:26:49- The philosopher Andrew Tate once said,
00:26:52"Having things isn't fun, getting things is fun."
00:26:54- Sure.
00:26:55- It's an accurate insight.
00:26:56- And I think it was Nas maybe who said,
00:26:58"People don't like you when you have something.
00:27:00"They like you when you're pursuing something."
00:27:03Have you read the book,
00:27:04"The Evolution of Desire" by David Buss?
00:27:05- Of course.
00:27:06- Fantastic book.
00:27:07One of the things that he pointed out,
00:27:08the example that he gave I thought was so fascinating
00:27:10is what tends to be attractive
00:27:12are not people who have a lot of resources.
00:27:14It's people who have the potential
00:27:16to acquire future resources.
00:27:17So the example that he gave is a med school student
00:27:21might be more attractive to a mate--
00:27:23- Than a doctor. - Than a doctor.
00:27:24It's the trajectory that they're on.
00:27:26- Why is it that the starving guitarist
00:27:30living on his friend's couch
00:27:33can kind of get all of the goals?
00:27:35Why?
00:27:36I'm sure the rock star could too
00:27:38as long as he's on the right trajectory,
00:27:39but if the rock star's facing down,
00:27:41he's kind of like Bitcoin at one dollar.
00:27:42You were talking about some of the early episodes
00:27:44that we'd done.
00:27:45And when you get to be at the start of somebody's journey,
00:27:48we spoke for the first time before--
00:27:52- 2019, does that sound right?
00:27:53- Yeah, 2019, maybe even 2018.
00:27:55Before you'd written "Psychology of Money,"
00:27:57before, I don't even know if you were blogging
00:27:59on collaborative funds-- - I was a blogger, yeah.
00:28:01- But were you still at Motley Fool?
00:28:03- No, I was at collaborative fund,
00:28:04but I hadn't written a book yet.
00:28:05- You were a very nascent podcaster yourself, right?
00:28:08- Correct, yeah, it was a blobby baby toddler thing.
00:28:11But yeah, talk to me about that trajectory piece.
00:28:16What are your, have you got any examples,
00:28:18any stories that speak to that I must be better
00:28:21not only than the people around me
00:28:22but also than me yesterday?
00:28:24- I think it's, you know, it was weird for me.
00:28:29I had been a full-time professional writer
00:28:31for 15 years before I wrote a book.
00:28:33And I was very comfortable in my position
00:28:35of where I was as a blogger, as an online writer.
00:28:39It felt like I had a great life, loved what I did,
00:28:41made enough money for my family to be totally happy
00:28:44and have some sense of independence.
00:28:45And then I wrote a book 15 years into it
00:28:47that I never expected to do anything,
00:28:49and the publisher didn't expect to do anything,
00:28:51but massively increased the trajectory of my career.
00:28:55And it felt great, it felt amazing for, I wanna say, a year.
00:29:02And then it became, this is just where I'm at now.
00:29:05I think what, the reason happiness is a fleeting emotion,
00:29:09which it is, most people are never happy
00:29:10for more than a short period of time.
00:29:12It's a great emotion but it's always fleeting,
00:29:14is because what makes you happy is surprise.
00:29:17It's experience is something
00:29:18that you genuinely did not expect.
00:29:19And so when I had this bump in my career,
00:29:22there was a period of surprise,
00:29:23I never expected this to happen.
00:29:26And then after a period of time, it was like,
00:29:28okay, now I'm used to this trajectory
00:29:30and this is where we're at.
00:29:31So I think even when you're on a higher trajectory,
00:29:33you can get used to it very quickly.
00:29:34- The gradient continues to get steeper,
00:29:36but the problem is, is the gradient gets steeper,
00:29:38there are fewer and fewer degrees
00:29:39that you can make it go more vertically.
00:29:41- But even if you're on this, like even if you're still,
00:29:43so there's a hedge fund called Renaissance Technologies,
00:29:45it's the most successful hedge funds ever existed.
00:29:47- No way, I've never even heard of it.
00:29:49- So it's not open to outside investors,
00:29:52it's pretty much only employees get to invest in it.
00:29:54And it is in a universe of its own.
00:29:57Its average annual returns, going back like 30 years,
00:30:00are 66%, which if you don't know anything about finance,
00:30:04that is like Michael Jordan times 50,
00:30:07it's a different universe.
00:30:09But look, when you've earned 66% every year for 30 years,
00:30:14and if you earn it next year, like you got richer,
00:30:17but you're like, yeah, that's just what this does.
00:30:19That's just where I'm at, that's what I expect.
00:30:21And I imagine like when Taylor Swift
00:30:23makes a billion dollars on tour,
00:30:24she's like, yeah, that's what I do.
00:30:26- And anything short of that is a failure.
00:30:28- Anything short of that is a failure, right?
00:30:30I think that's always the case with anything that you do.
00:30:32- Great line in a Jon Bellion song, he says,
00:30:35"If the higher I climb is the further I fall,
00:30:37"then why love anything at all?"
00:30:38He's talking about emotional connection,
00:30:40opening up your heart and then potentially being broken.
00:30:43But the same thing is absolutely true
00:30:45when it comes to status and striving
00:30:47and money and success and accolade.
00:30:50Your last album got a Grammy nomination.
00:30:53Well, this year I better get a nomination or win,
00:30:55or you better get two, or else you're going backward.
00:30:59It's not very good.
00:30:59The one career profession I think is really interesting
00:31:02in here is President of the United States,
00:31:04because you are the most powerful man in the world
00:31:07with anything at your fingertips.
00:31:09And by the beauty of democracy, it's a short-term job.
00:31:12And after being the most powerful man in the world,
00:31:14one day you wake up and you're just some guy
00:31:16named George Bush.
00:31:17And there's very few careers that are like that,
00:31:20where you are absolutely tippity top for a moment,
00:31:24but it's going to end.
00:31:26And yes, you can book deals and speaking deals
00:31:30and have a good fortune,
00:31:31but you know there's going to come a specific day
00:31:33where nobody cares about you.
00:31:34- Well, I mean, imagine the first book that you write
00:31:36being a global international bestseller
00:31:38at a rate that's here too unknown of in the entire industry
00:31:42and then having to write a second one and a third one.
00:31:44- And a third one and a fourth one, yeah.
00:31:45No, it's an interesting thing for me.
00:31:47And yeah, it's been--
00:31:49- But you're in oddly good company with regards to that.
00:31:53James Clear did the same thing.
00:31:55If you discount models, Mark Manson did the same thing.
00:31:58You're in a sort of contemporary club of people
00:32:04who kind of did the same of peaking in high school
00:32:08with regards to their writing career.
00:32:10And that's not to say that it can't be beaten,
00:32:12but the ability to be able to beat it is so--
00:32:16- It's so difficult because your own
00:32:18and importantly everybody else's expectations shift.
00:32:20- Correct.
00:32:21- Not just higher, they go stratospheric.
00:32:23- Yeah, yeah, yeah, which says a lot
00:32:25about the importance of expectations.
00:32:27- Yeah, yeah, it's everything.
00:32:29And I think a lot of the reason that my first book did well,
00:32:32so nobody expected anything from it.
00:32:34Nobody expected, readers didn't expect anything.
00:32:36The publisher, I didn't expect.
00:32:37It was all upside right there.
00:32:39And everything that came after that was like,
00:32:41if this is anything short of absolute life changing
00:32:45in every sentence, I'm gonna consider it a failure.
00:32:47- A quick aside, I've been using Eight Sleep for years
00:32:50and I genuinely can't imagine life without it.
00:32:52Having a mattress that actively cools and heats
00:32:55each side of the bed is a total game changer.
00:32:57And the newest model, the Pod 5,
00:32:58takes things to the next level.
00:33:00It now includes a temperature regulating duvet
00:33:03that works with the smart mattress cover
00:33:05to deliver full body climate control,
00:33:07maintaining your ideal temperature
00:33:08from every angle all night long.
00:33:11The new base also includes a built-in speaker,
00:33:13so you can fall asleep to ambient sound, rainfall,
00:33:16or Dr. Andrew Huberman, whatever helps you switch off.
00:33:19And with upgraded biometric sensors,
00:33:21it now runs nightly health checks,
00:33:23identifying disrupted breathing, abnormal heartbeats,
00:33:25or sudden changes in your HRV.
00:33:26It now cools, heats, elevates,
00:33:30and monitors your sleep better than ever,
00:33:32which is why Eight Sleep has been clinically proven
00:33:34to give you up to one hour more of quality sleep every night.
00:33:37And if you're still on the fence,
00:33:38they have a 30-day sleep trial,
00:33:40so you can buy it and sleep on it for 29 nights.
00:33:42And if you don't like it,
00:33:43they'll just give you your money back,
00:33:44plus they ship internationally.
00:33:46Right now, you can get up to $350 off the Pod 5
00:33:49by going to the link in the description below
00:33:51by heading to eighthsleep.com/modernwisdom
00:33:53and using the code modernwisdom at checkout.
00:33:56That's E-I-G-H-T sleep.com/modernwisdom
00:33:59and modernwisdom at checkout.
00:34:01How much of modern dissatisfaction do you think
00:34:04comes from comparing ourselves to people
00:34:07that we don't actually want to be like?
00:34:10I think that that marries what we were talking about before,
00:34:13which is a lot of the richest, most powerful people
00:34:15on the planet are secretly or even kind of publicly miserable.
00:34:19They don't want to be.
00:34:20I think what's more important,
00:34:21you remember the show MTV Cribs?
00:34:24- Of course. - You have that generation?
00:34:25I know you're young. - Yeah, yeah, yeah, yeah.
00:34:26- That was most people's view into how the other half lives.
00:34:30This is before social media and whatnot, and that was it.
00:34:32But it didn't really inflate your aspirations
00:34:34because you know that's not a peer.
00:34:36It's Jay-Z, it's Shaq.
00:34:39Of course he has a bigger house than I do.
00:34:41What social media did is it showed you people
00:34:43who ostensibly should be peers,
00:34:45or at least that's the idea.
00:34:46- They've got an Instagram login as well.
00:34:48They use the same platform that you do.
00:34:49- That's not a celebrity, that's not Shaq.
00:34:51That's just a guy who looks like me,
00:34:53but he's obviously living a much better life than I do.
00:34:55So it created this idea that that's where I should be.
00:34:59And I think that's the poison of what it is.
00:35:01It gives the impression that people who,
00:35:04A, are showing you a tiny little fraction of their life,
00:35:08it gives you the impression that that's what you
00:35:10should be doing right now at this moment too.
00:35:12- What have you come to learn about the relationship
00:35:15between money and status?
00:35:18- You bring up our friend Jimmy Carr,
00:35:21who I admire so, I think he's so brilliant.
00:35:24I have such a fondness for comedians.
00:35:25- Have you got to speak to him?
00:35:26- No, we've DM'd a couple times.
00:35:28But I love the guy, he's so great.
00:35:30I think what's great about comedians is that
00:35:35if you have a favorite comedian,
00:35:37you don't know and you don't care how much money they make.
00:35:41I saw Louis C.K. live a couple weeks ago,
00:35:43and this is part of who he is.
00:35:44He stumbles out on stage, he's wearing a shirt
00:35:47that's way too big for him and his dirty jeans,
00:35:51and people love him.
00:35:52They love every second of it.
00:35:54'Cause what you love them for is their comedy, obviously.
00:35:57It's a rare situation where I'm like,
00:36:00what I value you for has nothing to do whatsoever
00:36:02with your financial success.
00:36:04And so you have the relationship between money and power.
00:36:07If you're talking about a businessman or an entrepreneur,
00:36:10you might measure their success based off of their net worth.
00:36:13If your favorite athlete had a gambling addiction
00:36:17and lost all their money,
00:36:18but they're still just so much fun to watch on the court.
00:36:21You wouldn't care that much.
00:36:22And there's a lot of athletes who did fit that bill,
00:36:25and comedians who might fit that bill.
00:36:27If, this is not the case, but if my favorite comedian,
00:36:30if I found out he hasn't figured out how to monetize it yet,
00:36:32and the guy's actually broke and lives in a tiny apartment,
00:36:34I don't care, I'm gonna watch every special,
00:36:37'cause I value them for something more than money.
00:36:39And that's true for your best friends.
00:36:41I wrote about this in the book.
00:36:42One of my best friends, I've known him for 20 years,
00:36:44the best guy, I have so much fun hanging out with this guy.
00:36:47And I've known him forever.
00:36:50And of our peer group, he makes by far
00:36:52the least amount of money, by far the least amount of money.
00:36:54And it really bothers him.
00:36:56And he talks about how inferior he feels and whatnot.
00:36:59And I told him one day, I was like,
00:37:01if you are a funny joke teller and a good friend,
00:37:04you're fun to hang out with, I love our conversations.
00:37:07You're working hard to support your family.
00:37:08You're a good dad, you're a good husband,
00:37:10you're a good citizen.
00:37:11If you do those things, you've earned 90% of the points
00:37:14that I'm willing to give anybody.
00:37:17If you also happen to be rich and successful,
00:37:19I might bump you up to like a 9.2.
00:37:22But let's not pretend that like what I enjoy about you
00:37:24and like about you is that true.
00:37:25- His issue though is not your warmth and respect to him.
00:37:30His issue is his perspective of himself.
00:37:33- Right.
00:37:34- It's how he feels about him,
00:37:35not how he feels, you feel about him.
00:37:37- I think in some ways this is unavoidable.
00:37:39So I'm not saying this is even a bad thing.
00:37:41It's just a real thing.
00:37:42But we wanna think that what people admire us for
00:37:46is our wealth.
00:37:47And 90% of the time if you run through the people
00:37:50who are most meaningful to you in your life,
00:37:52they don't value you for your wealth.
00:37:54And the thing that they value for
00:37:56has nothing to do with money.
00:37:57My kids don't care in the slightest
00:38:00whether my income went up last year or what our net worth is.
00:38:03They care that I listen to them
00:38:04and that I play football with them on the driveway
00:38:06and that I read books to them and that I'm a good friend.
00:38:10I have another friend, the same friend who gave me the tour
00:38:13of his very large house that was mostly not used
00:38:17who said sometimes I have days where I wish my dad
00:38:20was just a normal guy who drove a Subaru.
00:38:23That the money was actually getting away.
00:38:25It was getting in the way.
00:38:26- He inherited the money?
00:38:27- Yes.
00:38:28- Right.
00:38:28- That the money was getting in the way
00:38:30of his ability to just be a normal good dad.
00:38:33And when you have that much money,
00:38:34it was the center of everything that they did in life.
00:38:38Was like how do we use our money for philanthropy
00:38:41and the lifestyle that we live?
00:38:42And he's like sometimes I just want my dad
00:38:43to just go out and play baseball with me to be a normal guy.
00:38:45- Isn't that strange that people who are struggling
00:38:48for money are obsessed with money
00:38:51and people who have lots of money are obsessed with money.
00:38:55Both groups at both ends of the barbell,
00:38:58much of what they're spending their time thinking about
00:39:02is their wealth.
00:39:03- I think that's true for a lot of things in life.
00:39:04If you've known someone who's dealt with infertility,
00:39:07they will do anything to have a kid.
00:39:09They would chop off their arms, do anything to have a baby.
00:39:13If you know people who have newborns,
00:39:15they will do anything to sleep tonight.
00:39:17They would chop off their arms
00:39:19for this kid to shut up and let me sleep.
00:39:20It's always the case that the extent
00:39:22to which you value something,
00:39:24if you want something and you can't have it,
00:39:26you value it more than anything.
00:39:27When you have it, the value diminishes.
00:39:30And if it's taken away from you,
00:39:32then the perceived value goes up tremendously again.
00:39:34- Such playground mentality,
00:39:36this sort of scarcity equals value for everything.
00:39:41- It's not gonna be any other way though.
00:39:43Of course, that's always what it is,
00:39:44that scarcity equals value.
00:39:46- Because dopamine is a hell of a drug.
00:39:48- That's it, that's a lot of it.
00:39:50And in a competitive world
00:39:51where we're all competing for attention,
00:39:53we're competing for jobs, we're competing for spouses,
00:39:55we're always competing.
00:39:56Again, it doesn't matter how much I have,
00:39:58it just matters that I have more than you.
00:39:59- The happiest people I know are the most content,
00:40:02not necessarily the richest, healthiest, or most successful.
00:40:05Is it possible to train contentment?
00:40:08- Pretty difficult, I think.
00:40:10I think there are a lot of things in behavioral finance
00:40:13that it's just who you are,
00:40:15and that who you are was forged at conception,
00:40:18and there's not a lot you can do about it.
00:40:19Daniel Kahneman was a psychologist,
00:40:21won the Nobel Prize in economics.
00:40:23He was basically the godfather of behavioral finance.
00:40:26Came up with the vast majority of the theories
00:40:29that we all talk about
00:40:30that dictate how we think about money and success.
00:40:33And we asked him one time,
00:40:35"Has all of this research that he had done
00:40:37"over the previous 70 years, has it made him better
00:40:40"at making decisions?"
00:40:41And like, "No, without hesitation, no, no, no."
00:40:45And so you're like, "If somebody like him,
00:40:47"it hasn't necessarily helped him?"
00:40:48So I think for a lot of this,
00:40:49the flaw that people make is saying like,
00:40:51"I can learn about the psychology of wealth
00:40:54"and money and investing and then change myself,
00:40:56"change my behavior."
00:40:57And I think a lot of the evidence is no, you can't.
00:41:00I think the best you can do is
00:41:01become more aware of who you are and accept it,
00:41:04and build a financial plan and build goals
00:41:06that are around that.
00:41:08I'll give you an example of this.
00:41:10Jeff Bezos was talking about
00:41:11when he started Amazon in 1994, I think it was.
00:41:14And he used the, this is now famous,
00:41:16the regret minimization framework.
00:41:17And he said, "If I started Amazon and it failed,
00:41:20"I would not regret that.
00:41:21"But if I didn't start it, I would regret that
00:41:23"for the rest of my life."
00:41:24And I remember hearing that and being like,
00:41:25"That's awesome, I love that, and that is so not me.
00:41:28"If I put everything I had into a startup
00:41:31"and raised money for my parents
00:41:33"and worked 150 hours a week for five years and it failed,
00:41:36"I would be beside myself."
00:41:37But I'm so glad that he and other people exist.
00:41:42- Which is exactly why he's a billionaire and you're not.
00:41:44- It's not exactly and never will be.
00:41:46And it's not, and so the idea that like,
00:41:48you have to figure it out what kind of person you are.
00:41:51And so back to like, I should not train myself to be like,
00:41:54how can I train myself to have the entrepreneur's mentality?
00:41:57I don't, it's okay, it's not that big a deal.
00:41:58I should just create a life that maximizes who I am
00:42:02than try to be someone who I'm not.
00:42:03- What are the important things to learn about who you are
00:42:06in this context?
00:42:07- I think so much of it is having goals
00:42:10that don't leave the roof of your own house.
00:42:13Kind of just being very selfish in a positive way.
00:42:16And a lot of bad financial decisions happen
00:42:19when you are chasing a goal or doing something
00:42:21that is very right for another person but wrong for you.
00:42:24And it's the easiest trap to fall into
00:42:26because you're like, "Chris did that and it worked for him
00:42:29"and he's really happy with it, so I should do it too."
00:42:32And it's one thing if you're chasing ideas
00:42:35that didn't work out for other people.
00:42:37Then the writing was already on the wall.
00:42:39But if I try to do something that not only was successful
00:42:41but that you love, then it's like,
00:42:43well, I should love this too without the acknowledgement
00:42:48that everybody is so incredibly different.
00:42:51There are a lot of things that I do with my money
00:42:53that other people, maybe you, would look at and be like,
00:42:55it doesn't make any sense to me.
00:42:57I don't understand why you're doing that.
00:42:59And 90% of the time my answer would be like,
00:43:01"Yeah, I understand it wouldn't work for you.
00:43:02"You probably do things that would drive me crazy too."
00:43:05And then that's fine.
00:43:06And people understand that very vividly
00:43:09if we're talking about our taste in food or music.
00:43:12They're like, "Everyone's different.
00:43:13"You like Italian food."
00:43:14I'm like, "It doesn't matter, nobody's right.
00:43:16"It's all subjective."
00:43:17But when it comes to how you should manage your money
00:43:19and the lifestyle that you should live,
00:43:20it really bothers people.
00:43:22I think part of it is because there's obviously
00:43:25no right answers in how to do this.
00:43:27This is all very uncertain.
00:43:28How to build wealth is uncertain.
00:43:29How to manage it, how to spend it, it's all uncertain.
00:43:32And so when you see somebody doing it differently
00:43:34than you are, you take it as not like,
00:43:37"Oh, maybe that's a different way to do it."
00:43:39You take it as a threat to the decisions
00:43:41that you make. - So true.
00:43:42This is everything.
00:43:43This isn't just wealth. - Yeah.
00:43:44This is why I think the rent versus buy argument
00:43:46gets so heated.
00:43:48Because honestly, it's not obviously clear
00:43:52which is better, rent and buy.
00:43:54Anybody can make the argument either way.
00:43:56But if you have a giant mortgage
00:43:58and you put your life savings into your house
00:44:00and somebody tells you renting was better,
00:44:02you're like, "That's a threat.
00:44:03"That's a threat to my identity
00:44:05"and I'm gonna respond viciously now."
00:44:07- What's that line of yours where you say
00:44:10most debating on the internet are just people
00:44:12with differing perspectives being unable
00:44:14to understand the others?
00:44:15- Talking over each other.
00:44:16- Yeah, people just speak-- - Most people wonder
00:44:17whether it's how you invest your money.
00:44:19When people are like, "No, Bitcoin, no, index funds."
00:44:22They're just, they're different people
00:44:23talking over each other. - I'm a Bitcoin guy
00:44:24trying to tell you, an index fund guy,
00:44:26how to be a Bitcoin guy.
00:44:28- And the truth might be, Bitcoin is the absolute right way
00:44:31that you should invest.
00:44:32Index funds are the exact way that I should invest.
00:44:35And that's where a lot of people get,
00:44:36like most debates about this.
00:44:37There's people with different time horizons,
00:44:39different risk tolerances, different cultures,
00:44:42different family goals and not understanding
00:44:45that it's okay for people to have different views.
00:44:47- Spending money to show people how much money you have
00:44:49is a fast way to go broke and an expensive way
00:44:51to gain respect.
00:44:52- It's the fastest way to have less money.
00:44:55Spending money to show people how much money you have
00:44:57is the fastest way to have less money.
00:44:59And so this is why I think one of the most valuable
00:45:01financial assets is not needing to impress strangers.
00:45:05It's the most valuable financial asset
00:45:06that you can have on your balance sheet.
00:45:07Is to say, I wanna use money as a tool
00:45:09to give myself and my family a better life.
00:45:12I do not wanna use it as a yardstick of social status.
00:45:15By and large, because we massively overestimate,
00:45:18almost always, how much other people
00:45:21are paying attention to us.
00:45:22I've seen some fascinating studies.
00:45:24I thought they were so well-designed of a study
00:45:27where some researchers took a woman
00:45:29and they put her in an objectively hideous ugly sweater,
00:45:32like a comically ugly sweater, and sent her into a party.
00:45:36And she mingled about with a sense of humiliation.
00:45:39And she came back out and they said,
00:45:41how many people in the party noticed your sweater?
00:45:43And she's like, everybody.
00:45:44Everybody's staring at me and laughing.
00:45:46And they go into the party and they start asking people,
00:45:48did you notice a woman in the ugly sweater?
00:45:50No, no, no, no, no, no, no.
00:45:52Nobody's thinking about you as much as you are.
00:45:55And I think, so the idea, it's so easy to tell yourself,
00:45:58if I had this house, car, clothes, whatever it might be,
00:46:03that other people will notice and elevate my status
00:46:06and pay attention to me and look at me and say,
00:46:07wow, look at Chris, he's such a cool guy.
00:46:10And the reality is, most people aren't thinking about you
00:46:13'cause they're too busy thinking about themselves.
00:46:15They're inside their own head.
00:46:16- Have you seen the Dartmouth Scar experiment?
00:46:19- No. - Similar to that?
00:46:20So study participants were brought in
00:46:23and they were going to sit down and have an interview
00:46:28as they were putting makeup on them, prosthetic makeup on,
00:46:31they make up the scar across the face.
00:46:35A huge, big smile as if you'd been sort of gang violence.
00:46:37It's massive scar across their face.
00:46:39And then as they're about to head in,
00:46:41they said, oh, just one moment before you go in,
00:46:43we're gonna touch it up
00:46:45and just refine the scar a little bit more.
00:46:46And the participants weren't allowed to see themselves
00:46:49before they went in.
00:46:50They removed the scar.
00:46:52They put them in.
00:46:52They said, have the interview come back.
00:46:55Tell us, do you think the person noticed the scar?
00:46:56Do you think that the interview went well or badly
00:46:58because of their impressions of this?
00:47:00They couldn't stop staring at it.
00:47:02I'm absolutely certain that they were judging me
00:47:03because of it.
00:47:04This is horrible.
00:47:05This is so bad.
00:47:06Please look in the mirror.
00:47:07The scar wasn't even there.
00:47:08- Was it even there?
00:47:09Right.
00:47:10I think a lot of times it's really interesting
00:47:11if you meet someone the first time
00:47:14and the conversation goes great.
00:47:16And sometimes a couple of hours later,
00:47:17they'll email you and say,
00:47:18God, I'm so sorry that I said X, Y, and Z
00:47:21after I thought about it.
00:47:22That probably offended you.
00:47:25And 99% of the time, I didn't think about it whatsoever.
00:47:30So the idea that most people,
00:47:32they don't have the bandwidth to think about you
00:47:34because they're busy worrying about themselves.
00:47:36And so in that situation,
00:47:38there are probably people in that room who did have scars,
00:47:40did have birthmarks, did have ugly sweaters.
00:47:42They're worrying about themselves
00:47:43and not thinking about other people.
00:47:45- What's that word for staircase regret?
00:47:48Le spirit de scaliae.
00:47:50Are you familiar with that?
00:47:51- No.
00:47:52- Okay, so le spirit de scaliae, staircase wit,
00:47:54is a French term used in English for the predicament
00:47:57of thinking of the perfect reply too late.
00:47:59- Oh, all the time.
00:48:00- As you're going down, le spirit de scaliae,
00:48:03and someone said,
00:48:04we'll know when AI has fully reached human intelligence,
00:48:08when it regrets not saying the thing it meant to say
00:48:11on its way out of the chat.
00:48:12- See, this is why I like blogs more than books.
00:48:15- Me too.
00:48:16- I would always do that.
00:48:17I would write a blog post and a week later,
00:48:18I'd be like, God, in that second paragraph,
00:48:20you know what sentence I should use?
00:48:21I should use this sentence.
00:48:23- Well, that's the next blog.
00:48:24- No, I would just go update it.
00:48:25I just go update the blog.
00:48:26- Oh, okay.
00:48:27- Whereas a book, when it's printed, it's done, that's it.
00:48:28- That's the issue with email, right?
00:48:29If you're pumping this stuff out,
00:48:30you don't get back to go back into someone's--
00:48:32- You can't go back into, think it, yeah.
00:48:33- Yeah, yeah, yeah, okay.
00:48:35A quick aside, you've probably heard experts
00:48:37like Dr. Rhonda Patrick talk about the benefits of omega-3s.
00:48:39They reduce, hello, omega-3s, there they are.
00:48:43They reduce brain function.
00:48:44No, they don't, they support brain function.
00:48:46Maybe I should take more.
00:48:47They support brain function, reduce inflammation,
00:48:49improve heart health, and are backed by hundreds of studies.
00:48:52But here's the thing, all omega-3s are not made the same.
00:48:55Most brands cut corners, they use cheap fish oil,
00:48:57skip purity testing, throw in fillers, and call it a day.
00:49:00But with Momentus, you know you're getting
00:49:02the highest quality omega-3s on the market.
00:49:05They're NSF certified for sport,
00:49:07and they're tested for heavy metals and purity.
00:49:10So you can rest easy.
00:49:11Knowing anything that you take from Momentus is unparalleled
00:49:14when it comes to rigorous third-party testing.
00:49:16What you read on the label is what's in the product,
00:49:19and absolutely nothing else.
00:49:20Last of all, Momentus offers a 30-day money-back guarantee,
00:49:22so you can buy it and try it for 29 days.
00:49:24And if you don't love it,
00:49:25they'll just give you your money back.
00:49:26Plus, they ship internationally.
00:49:28Right now, you can get 35% off your first subscription
00:49:31and that 30-day money-back guarantee
00:49:33by going to the link in the description below
00:49:34or heading to livemomentus.com/modernwisdom
00:49:37and using the code modernwisdom at checkout.
00:49:40That's L-I-V-E-M-O-M-E-N-T-O-U-S.com/modernwisdom
00:49:44and modernwisdom at checkout.
00:49:47When you look at the happiest people that you've met,
00:49:49what did they have in common
00:49:51that money alone doesn't explain?
00:49:55- I think they were very internally benchmark-focused.
00:49:58Their benchmark for how well their life was doing
00:50:00was like health, marriage, kids, job.
00:50:05It was a very, it didn't leave the confines of their roof.
00:50:08And you can flip that around and say
00:50:09some of the least happy people you met
00:50:11are a purely external benchmark.
00:50:14How beautiful am I?
00:50:14How many followers do I have?
00:50:16How many other people do I think are looking at me?
00:50:17It's a very external benchmark-focused.
00:50:20That's almost always the case.
00:50:21The internal versus the external benchmark is everything
00:50:24in terms of contentment and money.
00:50:26And contentment's important because the emotion
00:50:30that people wanna chase with money is happiness.
00:50:33I wanna be happy.
00:50:34'Cause as I said earlier, happiness is always fleeting.
00:50:36You experience happiness and it's awesome,
00:50:39but no one's happy for more
00:50:40than usually a couple minutes at a time.
00:50:42I use the example of happiness as like humor.
00:50:44Like if I tell you the best joke in the world,
00:50:46or if we listen to Jimmy Carr, let's say,
00:50:48and it's the funniest joke, you laugh for 30 seconds.
00:50:51You don't laugh for 30 years.
00:50:53This is not how humor works.
00:50:55And if I told you the joke every day over and over again,
00:50:57you're like, stop, it's lost all value at this point.
00:51:00And I think so happiness is that way.
00:51:01It's a great emotion, it's fleeting.
00:51:03Contentment though is permanent.
00:51:04- Isn't it interesting that music is different.
00:51:07You can listen to your favorite song a thousand times
00:51:09and still love it on a thousand and one,
00:51:11but the same is not true with jokes, movies.
00:51:14- Derek Thompson of the Atlantic used to be at the Atlantic
00:51:16wrote about this, that if you watch a movie a hundred times,
00:51:21you want to blow your brains out.
00:51:22It's just, you hate it.
00:51:23But you listen to a song a thousand times,
00:51:25it can get better over time.
00:51:27It's a different part of your brain that's processing it.
00:51:29But I think that it tends to be the case.
00:51:31But being content, just waking up and being like,
00:51:34I got everything I want and I can live in the moment
00:51:36and just appreciate what I have.
00:51:38And yeah, there's a lot of people
00:51:39who have a lot more than me, but I don't focus on that.
00:51:41I got everything that I need right here.
00:51:43It's a unique mindset.
00:51:45- There's two elements that I thought about a lot last year
00:51:46to do with happiness.
00:51:47One is that happiness can only arise
00:51:50when uncertainty isn't present.
00:51:53Like if you're highly uncertain
00:51:56and maybe you're uncertain about how the football game
00:51:59is going to go and that's kind of exciting.
00:52:01But when we're talking about life, ambiguity,
00:52:06is my job going to be around in three weeks time
00:52:09or is my partner going to stay with me
00:52:11or is my dog going to die or is my kid going to come home?
00:52:15Uncertainty is just cancerous to happiness.
00:52:19The second one is from Naval,
00:52:20which is happiness can only arise
00:52:23when you don't want things to be different.
00:52:25If things are uncertain or ambiguous or ambivalent
00:52:29and you want the world to be different,
00:52:32that is, those two things, and they cross over a lot,
00:52:36they're often intersected.
00:52:40It becomes very difficult to be happy.
00:52:43So in as much as money is able to reduce uncertainty
00:52:48and allow you to want things to be different less,
00:52:53I think that creates a nice foundation
00:52:54'cause that's kind of like a price
00:52:56that everybody has to pay.
00:52:57If you've got high uncertainty
00:52:59and you want lots of things to be different,
00:53:01to whatever extent money is able to reduce those things,
00:53:05I think that's a good reason to gain more of it.
00:53:08Just using it as a tool for optionality.
00:53:11Say, look, if we were to experience
00:53:13the second great depression, I'm going to be okay.
00:53:15And my kids are going to be okay.
00:53:17If I want to change careers, I can do that.
00:53:19If I want to move, I can do that.
00:53:21If I want to work less, I can do that.
00:53:22Having the mere option to do it,
00:53:24even if you're not exercising that option,
00:53:26is tremendous for people.
00:53:27I'm just waking up this morning and being like,
00:53:29my life's in my control.
00:53:3135 to 40% of adults in the US
00:53:33say they couldn't cover a $400 emergency
00:53:37without borrowing or selling something.
00:53:39- Shocking, right?
00:53:40And look, here's the thing.
00:53:41If you had said that statistic to someone 100 years ago
00:53:46and it wasn't $400, it was $40,
00:53:48whatever would be adjusted for inflation,
00:53:50people would be like, yeah, that's how life works.
00:53:52Life is fragile and brutal.
00:53:54And the idea that you have unemployment
00:53:56and you need to drastically reduce your lifestyle,
00:53:59that would be the norm for people.
00:54:02I think we're fortunate to live in an era
00:54:03where there's an expectation that ordinary people
00:54:05are gonna have some semblance of protection and safety.
00:54:10- 'Cause other people do.
00:54:11- In their life, right, yeah.
00:54:13- What's your favorite historical example
00:54:17of the difference between being rich and having wealth?
00:54:22Because there is a difference between these two things.
00:54:25- To me, the most interesting family
00:54:27of all the mega-rich families that existed,
00:54:30of all the robber baron families, the mega-rich,
00:54:33the Carnegies, the Rockefellers, and the JP Morgans
00:54:37did a pretty good job managing their money.
00:54:41They lived good lives themselves.
00:54:43They left it to beneficial causes.
00:54:45Not perfect, but they did a pretty good job.
00:54:46The Vanderbilts, I think, by far did the worst.
00:54:49And it's such a fascinating example
00:54:51to dig into, the Vanderbilt family.
00:54:53When Cornelius Vanderbilt died, adjusted for inflation,
00:54:57depending on metrics used,
00:54:58he had something like $300 to $500 billion
00:55:02adjusted for inflation.
00:55:03And within several generations, three generations,
00:55:06not that long of a period, there's virtually nothing left.
00:55:09And not a tremendous amount went to charity either.
00:55:12Vanderbilt University was kind of their big project,
00:55:14which didn't even cost that much money to fund it.
00:55:17But most of it was spent on three generations
00:55:19of Vanderbilt heirs who were just
00:55:21in a generational pissing contest
00:55:23to see who could spend it the fastest.
00:55:25And if you dig into their biographies,
00:55:26there've been several biographies written about them.
00:55:29It is telling, and it's kind of sad.
00:55:33'Cause true to the David Center idea
00:55:36of super successful people who you would never want to be,
00:55:39that's the sense that you get
00:55:40reading the biography of the Vanderbilt heirs.
00:55:43The money told them who they could be.
00:55:45It told them where they could live, who they could marry,
00:55:48who they could socialize with, how they had to dress.
00:55:50They had no independence over their life at all.
00:55:53And a lot of them, it was almost like
00:55:54they were characters in a movie.
00:55:57The movie was called "The Vanderbilt Family."
00:55:59And they were just reading from a script
00:56:00on who they could be.
00:56:01They had no independence on who they could be,
00:56:03and a lot of them were just miserable for it.
00:56:05And this is now a well-known thing,
00:56:07but one of the first Vanderbilt heirs
00:56:09who didn't get a trust fund
00:56:11when there was no money left over was Anderson Cooper.
00:56:15And he's talked about this,
00:56:16about how he was kind of the first Vanderbilt heir
00:56:20in 150 years who was allowed to be himself,
00:56:22had to figure out who he was, create his own identity,
00:56:25make his own money, be his own person.
00:56:27And it was almost like he was the first person
00:56:30who was relieved of the burden
00:56:32of the money controlling who they were.
00:56:34- Well, he inherited the genetics
00:56:37of somebody that was able to make $350 billion,
00:56:40but didn't have to deal with the gravity of managing it.
00:56:44- Or just dictating who he was.
00:56:46He also had another element,
00:56:48which is that his last name's not Vanderbilt.
00:56:50His mother was Gloria Vanderbilt,
00:56:51and his father was a guy named Wyatt Cooper.
00:56:53And so he didn't have the name recognition of it
00:56:56that would follow him around for the rest of his life
00:56:58and change people's opinion of him.
00:56:59- Where did they spend the money on?
00:57:01- The Vanderbilts? - Yeah.
00:57:03- A lot of it was mansions and parties and yachts
00:57:06and just the most ostentatious lifestyle
00:57:09that you could imagine.
00:57:10A lot of it was some of the mansions that they made.
00:57:14This gets back to the point of what people actually want
00:57:16is like a smaller house.
00:57:18And so some of the mansions that they made
00:57:19were so unbelievably huge
00:57:21that they didn't want to spend any time in them.
00:57:23They were so big and so unhomely
00:57:27that where they wanted to spend
00:57:28was the smaller apartment that they had in New York
00:57:30that felt much more like home to them
00:57:32versus the other house,
00:57:33the gigantic mansion that they had was a trophy.
00:57:36It was to show other people that you had,
00:57:38but nobody needs a house
00:57:39with 70 master bedrooms kind of thing.
00:57:41It was just to show people what you had.
00:57:44And I think there's another element here,
00:57:46which is when you don't make the money yourself
00:57:48when it was inherited from somebody else,
00:57:50then the symbolism of what you've overcome doesn't exist.
00:57:54It's not there.
00:57:55If you made it yourself,
00:57:56then the gigantic mansion is a symbol to yourself
00:57:59of what you've done and what you've built
00:58:00and what you overcame in life.
00:58:02And you take tremendous pride and gratitude in that.
00:58:06You inherited it from someone else.
00:58:07You had none of that.
00:58:08- Do you know Eddie Hearn, boxing promoter?
00:58:10- Sounds familiar.
00:58:11- British boxing promoter, big name in that world.
00:58:15And his dad created the organization that he now runs.
00:58:19And he was asked what do you regret about childhood
00:58:24or what do you wish had changed?
00:58:27And he says, no, it was, I really loved my life,
00:58:31loved my life, loved my dad,
00:58:33but I never got to do it first.
00:58:36- Yeah, yeah.
00:58:38- I never got to do it first.
00:58:39- And if your parents are unbelievably successful,
00:58:42you know there's no chance statistically
00:58:44that you'll ever exceed them.
00:58:45- Well, I mean, if you're someone wants to become a writer,
00:58:47what's the likelihood that you can outstrip
00:58:50the psychology of money?
00:58:51You, the guy who wrote it,
00:58:53can't outstrip the psychology of money.
00:58:55- Right, and imagine if one of Elon Musk's children
00:58:58is an entrepreneur and creates a business
00:59:01that's worth a billion dollars.
00:59:02- That's cute.
00:59:04- Right?
00:59:05- Isn't that cute?
00:59:05- Imagine if they become self-made billionaires,
00:59:08one billionaires, and your dad is worth 700 billion.
00:59:10- Oh, that's so cool.
00:59:12Yeah, I mean, even if,
00:59:13I've never even thought of that,
00:59:16what a horrible bind that you'd be.
00:59:17And I know that he's got a slightly strange relationship
00:59:20with some of the kids.
00:59:22Even if you were to say,
00:59:24I don't want any of the inheritance,
00:59:25I don't want to even take the name,
00:59:27I'm gonna change all of the things.
00:59:29And then you go, and independently,
00:59:31you become a millionaire or a billionaire.
00:59:34How many people are going to go,
00:59:35yeah, well, I mean, you were Elon Musk's kid.
00:59:36Because I don't even talk to, we haven't even looked,
00:59:38like I don't even, I'm not even on the,
00:59:41yeah, but you were Elon Musk's kid.
00:59:42- Well, look at that, something where
00:59:43you can't necessarily use your parents' status.
00:59:48Someone like Bronny James, LeBron James' son,
00:59:51who now plays for the Lakers, made the NBA.
00:59:54Unbelievably good himself,
00:59:57but he's always gonna be LeBron's son, right?
01:00:01- You know what's interesting though,
01:00:02Steph Curry's got a higher percentage shoot than his dad.
01:00:05- Is that right?
01:00:06- Yeah, so what you see is typically a regression to the mean
01:00:10in the world of basketball.
01:00:11Seth Stevens-Davidowitz did a wonderful book on basketball,
01:00:14the mathematics of basketball, basically.
01:00:16For every inch that you are over six foot,
01:00:18your likelihood of getting into the NBA doubles.
01:00:21So it's twice as much, twice as much, twice,
01:00:23and it doesn't stop to 6'7", to 6'8", to 6'9",
01:00:27it just keeps going.
01:00:29But the regression to the mean usually happens.
01:00:33If you have this outlier freak of an athlete,
01:00:36typically the sun goes a bit closer
01:00:38to whatever the median is, except for
01:00:41with more skill-based players,
01:00:43and that is typically free throw shooters.
01:00:47Because not only have you got some of that genetic material
01:00:50that's percolating through you,
01:00:52but you've also got all of the expertise,
01:00:55all of the tactic, and all of the training,
01:00:57and Steph Curry is the canonical example of this,
01:01:00that his dad was really, really great at what he did,
01:01:03and Steph Curry's better.
01:01:04So there's some cool, you know, it's okay,
01:01:07well what are the kind of inheritances
01:01:10that I can take from my parents?
01:01:12My dad left school with no qualifications at 16,
01:01:15none, zero qualifications at 16,
01:01:17and I'm the first person in my family
01:01:18to have gone to university.
01:01:19But I was able to learn stuff from him
01:01:24that I didn't need to use in an academic setting.
01:01:28Get a fucking master's in international marketing,
01:01:30I can't remember.
01:01:31None of that really mattered.
01:01:33- Yeah, no, that's interesting.
01:01:34I think there's a lot of people who are very talented
01:01:36in their own right,
01:01:37but will always be in the shadow of their parents.
01:01:39Colin Hanks is a very talented actor, unbelievably talented.
01:01:42- Tom Hanks.
01:01:44- Exactly.
01:01:44You knew, I can tell you don't even know who Colin Hanks is,
01:01:47but you know he's Tom Hanks' son,
01:01:49and he's unbelievably talented.
01:01:50If you just put him in his own right,
01:01:52he'd be an A-list actor,
01:01:53but I think he'll always be known as Tom Hanks' son.
01:01:55- There's an interesting explanation
01:01:57about why the children of wealthy families
01:02:02perform so well in school,
01:02:05and it's not the additional tutoring
01:02:08or the after school clubs
01:02:10or the going to a higher rated local comprehensive.
01:02:14It's not to do with any of that,
01:02:15even if you control for all of those things.
01:02:18It seems to be the fact that those are the kinds of kids
01:02:21who are driven to do unreasonable things
01:02:24in a desperate attempt to escape the gravity
01:02:26of their parents' accomplishments.
01:02:28And that's why you see more drug use
01:02:31among the kids of wealthy parents.
01:02:33Again, not because, maybe, because they can afford it,
01:02:36they're having these sort of swanky parties at 16
01:02:39and they're bringing their friends around
01:02:40and one of them's got ecstasy or whatever it is,
01:02:42but how much of it is just trying to escape
01:02:44the fucking expectations of their parents?
01:02:47Yes, and how unpopular of an opinion is this to talk?
01:02:50Oh, sorry, these poor upper class kids
01:02:54that are out in fucking Long Island,
01:02:57off on the tails of the fish,
01:02:59just partying it up in the Hamptons.
01:03:01Like, hey, these kids are driven to do unreasonable things.
01:03:06To get into a varsity league university,
01:03:09to do the things that are needed,
01:03:10unless you're unbelievably naturally talented,
01:03:12to do the things that are required
01:03:14in order to become a billionaire.
01:03:15If you've read Walter Isaacson's book about Musk,
01:03:18it's evident that he is just on an intergenerational,
01:03:22generational run to disprove all of the shit
01:03:25that happened to him as a kid.
01:03:26Yeah, yeah, and I think there's a different flavor to this.
01:03:31I met, I did some work for a family many years ago
01:03:34that they're multi, multi billionaires,
01:03:36and it was the grandfather who made all the money,
01:03:39and I was working with the grandchildren.
01:03:41We're mostly like probably 18 to 25 years old, let's say,
01:03:44and I was there to teach them about some money stuff.
01:03:47And one of the things they said,
01:03:49because the other element here was all of these kids
01:03:51were very good looking.
01:03:52The guys and the girls are extremely good looking,
01:03:54and they all have access to unlimited money
01:03:57and live unbelievable lives.
01:03:59One of them had a helipad in his backyard kind of thing,
01:04:01just unbelievable, quintessential billionaire children.
01:04:04And one of the things they brought up
01:04:06was how hard it is to date.
01:04:09And one of the things, they said two things.
01:04:11One is it's almost impossible to find someone
01:04:13who can just look past the money
01:04:14and actually like me for being me.
01:04:16The other thing is that if the relationship progresses
01:04:18long enough, basically the family's lawyer
01:04:21pulls the boyfriend and girlfriend aside and says,
01:04:24"If this relationship gets to a proposal,
01:04:27"you will be met with the most ironclad prenup
01:04:30"that has ever existed in the world."
01:04:32And after that meeting,
01:04:33so many of the boyfriend and girlfriends are like,
01:04:35I don't know, I don't know if this is what I want to do.
01:04:37And so you have these very good looking 19 year olds
01:04:41with unlimited money, and they're almost undateable.
01:04:45It's like, and so that's like a tiny violin thing.
01:04:48But the social pressure, I've called it social debt.
01:04:52There's a social debt that can hang over
01:04:54having a lot of money.
01:04:55That's very difficult to contextualize
01:04:58when you don't have a lot of money.
01:04:59- What are the worst ways to spend money then?
01:05:02If someone wanted to guarantee dissatisfaction
01:05:05with their wealth, what would you tell them to adopt?
01:05:07- I think you would anchor all of your expectations
01:05:10and all of your goals to the chasing the admiration
01:05:15of people who are not important in your life.
01:05:18I desperately want my wife and kids to admire me
01:05:20and love me and pay attention to me.
01:05:23After that, it drops off precipitously.
01:05:25And I think if you're the kind of person,
01:05:27and social media has really put a spotlight
01:05:29on a lot of these people who are just desperate
01:05:31for the attention and the engagement of total strangers
01:05:34and their life's purpose, the only thing that matters
01:05:37to them in their life is the engagement of strangers.
01:05:41And it's a very unhealthy way to go about things
01:05:44I think is always gonna leave you empty.
01:05:46So I think that's the biggest.
01:05:48I wanna be very ambitious financially and career wise
01:05:52to benefit a very small number of people in my life,
01:05:55fewer than 10 people, a family, a couple friends kind of thing
01:05:59and after that, I couldn't give two shits
01:06:01about what happens from there.
01:06:02I think that's the goal of happiness
01:06:04and everything around it, the opposite of that
01:06:06of trying to impress people who aren't paying attention
01:06:09is the source of the vast majority of financial misery.
01:06:11- Okay, ultimately you do end up needing to spend money
01:06:15and if people get to the place that they want to,
01:06:17which is some kind of wealth escape velocity
01:06:19where they can have more than they need,
01:06:21you're gonna end up spending it on some stuff
01:06:24that isn't the necessities, so what's the opposite?
01:06:27What are the best places for people to spend money?
01:06:29- I think where a lot of people go astray with this,
01:06:33I'll definitely get to what works,
01:06:35but where they go astray is don't spend money on things,
01:06:38spend money on experiences.
01:06:40I think a lot of things are awesome
01:06:42and a lot of experiences can leave you pretty empty.
01:06:44Particularly in the social media world,
01:06:46I think a lot of people, I would venture to say most people,
01:06:50pick their next vacation based off of what's gonna make
01:06:52the best picture on social media.
01:06:54- Oh, that's interesting.
01:06:55- And I've talked about this before,
01:06:55you know what my personal example of this is?
01:06:57This is very subjective, people can disagree with this, Bali.
01:07:00- Okay. - You ever been to Bali?
01:07:02- I have twice, I came off a moped once.
01:07:03- Do you like it?
01:07:05- Yeah, I do actually.
01:07:06- Okay, so we might differ in this.
01:07:07I think Bali is--
01:07:09- Super overrated, not go back.
01:07:10- Completely overrated.
01:07:11We went there and it's not bad,
01:07:12but I've been to so many other tropical places
01:07:15that were 10 times better, but if you go to Bali
01:07:18and you post a picture on Instagram or TikTok,
01:07:20if you go into Bali, you think at least people
01:07:22are gonna be like, wow, you went to Bali,
01:07:24that's so cool, it's so exotic.
01:07:25- Super exotic.
01:07:26- And so I think there's quite a bit of that
01:07:27of like the experience thing is a different--
01:07:30- What are the other, other than holidays
01:07:33and what are some other experiences that you think
01:07:38people get the spend money on experiences,
01:07:40not things, things inverted due to?
01:07:42- The reason I think travel can be beneficial
01:07:44for a lot of people is sometimes it's not even
01:07:46the destination of where you're going
01:07:48or how beautiful the destination is.
01:07:49It's that you need to travel to kind of give yourself
01:07:52permission to detach from the rest of your life.
01:07:55And so if flying to Maui is the only chance
01:07:58that you can have totally uninterrupted time
01:08:01with your spouse or your kids, you just can't do it at home.
01:08:05You're too distracted at home.
01:08:06Your kids are too distracted at home.
01:08:08You have to fly to Maui in order to sit there
01:08:10and spend hours with each other
01:08:12in each other's presence and company.
01:08:14Like that's the value of it.
01:08:16I think that tends to be true.
01:08:17And that's definitely been the case for me
01:08:19that I have to go somewhere else to totally detach.
01:08:23And if you have some sort of staycation at home,
01:08:25or even just a weekend at home,
01:08:27we're all, everyone in my family is all kind of just
01:08:30lost in their own world, their own priorities,
01:08:32their own email or friends or whatnot.
01:08:35They're all lost in it and you have to detach from that
01:08:38in order to spend quality time.
01:08:39To me, that's the biggest value of spending money
01:08:41on travel and vacations.
01:08:43- We'll get back to talking in just one second.
01:08:45But first, if you have been feeling a bit sluggish,
01:08:47your testosterone levels might be the problem.
01:08:49They play a huge role in your energy,
01:08:51your focus and your performance.
01:08:52But most people have no idea where there's are
01:08:54or what to do if something's off.
01:08:56Which is why I partnered with function
01:08:57because I wanted a smarter and more comprehensive way
01:09:00to actually understand what's happening inside of my body.
01:09:03Twice a year, they run lab tests
01:09:04that monitor over a hundred biomarkers.
01:09:06They've got a team of expert physicians
01:09:08that analyze the data and give you actionable advice
01:09:10to improve your health and lifespan.
01:09:12And seeing your testosterone levels
01:09:14and tons of other biomarkers charted
01:09:16over the course of a year with actionable insights
01:09:18to actually improve them gives you a clear path
01:09:21to making your life better.
01:09:22Getting your blood work drawn and analyzed like this
01:09:24would usually cost thousands.
01:09:25But with function, it's just $499.
01:09:28And right now you can get a hundred dollars off,
01:09:30bringing it down to $399 bucks.
01:09:32Get the exact same blood panels that I get
01:09:33and save that a hundred dollars
01:09:35by going to the link in the description below
01:09:37or heading to functionhealth.com/modernwisdom.
01:09:40That's functionhealth.com/modernwisdom.
01:09:44- You know, it makes me think about how cool it would be
01:09:47to just have a cabin in the woods
01:09:49that's within 90 minutes of your house.
01:09:52That is all of the benefit of not at home,
01:09:56not in work mode, not even in typical family mode.
01:10:00It's got all of our stuff there.
01:10:02And I guess this is why people like caravanning in the UK.
01:10:06I don't think it quite exists
01:10:07in the same way here in America.
01:10:09But a caravan park where what you're doing
01:10:13is you're extricating yourself
01:10:14from the usual day-to-day monotony
01:10:16and you're putting yourself into this new thing,
01:10:18this different thing.
01:10:20I guess the problem is that if you go there enough,
01:10:23that just becomes-
01:10:24- It's not new anymore.
01:10:25- Yeah, fuck it, fuck the caravan.
01:10:27- I think the idea that you just hit on,
01:10:29which is what really gives,
01:10:31what has the potential to make you happy.
01:10:33We said before, a lot of what happiness is surprise,
01:10:36is trying new things.
01:10:37And a lot of it is everyone has their thing
01:10:40that they might spend money on, cars, food, clothes.
01:10:43Everyone's got a different thing.
01:10:44Everybody has a thing, but it's always different.
01:10:46And it's not always obvious what your thing might be.
01:10:48And so I think you have to experiment
01:10:50with a lot of different kinds of spending
01:10:51to actually figure out what's gonna be right for you.
01:10:54So little experiments of like,
01:10:55try eating at a fancier restaurant than you normally would.
01:10:58It might not do it for you.
01:10:59Wine is not my thing.
01:11:00I have so many friends who are like,
01:11:02'cause I'm not a wine guy.
01:11:04And they're like, all right,
01:11:05well, you haven't tried the right wines.
01:11:06And they're like, here,
01:11:07this is gonna change your life, Morgan.
01:11:09They hand me a glass.
01:11:10And I'm like, it all tastes the same to me.
01:11:12I'm sorry, I just don't have it.
01:11:13- I'm a Philistine as well.
01:11:14- But there's other people that's like wine
01:11:16gives them so much happiness and purpose,
01:11:18and they love the collection, the tasting of it.
01:11:20Everyone's gotta find their thing.
01:11:22One of the things for me with reading
01:11:24is that I think a lot of the reason that
01:11:26if people don't like reading,
01:11:28they obviously just haven't figured out
01:11:29the kind of book that's gonna work for them.
01:11:31And it's not always obvious what you will enjoy.
01:11:34And so for the longest time,
01:11:36I was like, fiction just doesn't work for me.
01:11:38But I've heard from so many people
01:11:39that like, fiction changed my life.
01:11:41These stories changed my life.
01:11:42And I always try and I couldn't figure it out.
01:11:44And I finally found like a genre of fiction
01:11:47that would work for me.
01:11:47But I had to experiment so many different times.
01:11:49It's like historical fiction.
01:11:51It's like it has a potential.
01:11:53Science fiction just makes it,
01:11:54I don't understand why anyone would enjoy it.
01:11:57But historical fiction, this could be true.
01:11:59I'm like, I can just sit there and read this all day long.
01:12:02I love that kind of stuff.
01:12:03- What are some of your favorite fiction books?
01:12:06- You know, there's one that was a historical fiction
01:12:10of the history of New York City.
01:12:12Starting back before it had been populated
01:12:15when it was truly just a forest
01:12:18inhabited by beavers and whatnot.
01:12:20And then it tracked a series of families,
01:12:22a Dutch family that originally colonized that.
01:12:24And then through the generations, ending up with 9/11.
01:12:28- No way.
01:12:29- And tracked it.
01:12:30It's like a thousand page book.
01:12:31- What's it called?
01:12:32- Can I just have a look at it?
01:12:33- Yeah, get it.
01:12:34Dude, that sounds fucking awesome.
01:12:35- Amazing.
01:12:36- 'Cause when I think historical fiction,
01:12:38what I think is fall of the Roman Empire
01:12:43or Game of Thrones, but without the dragons
01:12:46and something that brings,
01:12:50what's that, Man in the Hightower?
01:12:52That was kind of similar, right?
01:12:53- If the Germans won.
01:12:54- Alternative history, but it's moderately modern history.
01:12:59- 'Cause it has a unique name.
01:13:00No, it doesn't have a unique name.
01:13:02The book's name is New York.
01:13:04- Oh, and who's it by?
01:13:05- Guy's name is Edward Rutherford.
01:13:07- Okay, I imagine there's lots of books.
01:13:09- He also wrote one on the history of London,
01:13:11and that has a unique name.
01:13:12- Same thing.
01:13:13- Yes.
01:13:13All made up of--
01:13:15- This is such a cool--
01:13:17- And the history of China.
01:13:18- This is such a cool way to do it.
01:13:19All that you do is take some interesting place
01:13:22and then make a fake story about--
01:13:25- And his kind of how he does it is,
01:13:27let's start with a family and then track generations
01:13:30of that family over 500 years.
01:13:31- Then the Vanderbilt's.
01:13:33- Right, and so it's fascinating.
01:13:34And he gets very deep into the culture
01:13:36of what New York was at different periods of time.
01:13:39- The rules.
01:13:40- Very different 200 years ago than it would've been today.
01:13:42So then I could wrap my head around,
01:13:43the best fiction for me is when I'm reading it
01:13:45and I forget that it's fiction.
01:13:47- Oh yeah, it's just a slightly more exciting biography.
01:13:50- Yes.
01:13:51- Or retelling of something that could've--
01:13:52- The other trash fiction that I love is like John Grisham.
01:13:55Because it easily could be true.
01:13:56And that's another where I'm reading it
01:13:57and I have to remind myself that he made all this up.
01:13:59- I got into a spiral last year
01:14:03because I wasn't, I was pretty tired
01:14:05and I was trying to look after my health
01:14:07and do a bunch of other stuff.
01:14:08So I got pinged on whatever the Amazon Kindle algorithm is
01:14:13with Freda McFadden, she did "The Housemaid"
01:14:19and then "The Housemaid's Revenge" and then "The Teacher"
01:14:21and "The Trap Door" and the something of everything.
01:14:25And then I did "The Silent Patient" by Andrew Michaelides,
01:14:28Alex Michaelides, and I just got sucked into this vortex
01:14:32of chick fiction and I fucking loved it.
01:14:35And I thought it was so--
01:14:36- There's a reason it's so popular.
01:14:37Yeah.
01:14:38- It's so good.
01:14:39- Yeah.
01:14:40- That's so easy to read.
01:14:41- Wasn't there a thing that, I think many years ago,
01:14:43they made a version of the "Harry Potter" books
01:14:46that had adult covers on them.
01:14:48- Correct.
01:14:49- 'Cause adult doesn't wanna hold a book
01:14:50that has a cartoon cover on it.
01:14:51So they made it just a, and I think you could do that
01:14:54with some of those rom-com books.
01:14:55Or like those, those like, those kind of books.
01:14:57- I was proudly reading "The Housemaid" by Freda McFadden.
01:15:00- I like it.
01:15:01- I was brandishing it to be, I'm reading the,
01:15:02we read it, it's really lovely.
01:15:04I wonder what the twist's gonna be.
01:15:05- I mean, so many of those are just,
01:15:06they're just amazing storytellers
01:15:08and they just, they keep you up.
01:15:09So I'm sure if Freda McFadden wrote a John Grisham novel
01:15:13about, you know, like a crime novel or a legal thriller,
01:15:17like it'd be amazing.
01:15:18- Wouldn't that be cool, wouldn't it be cool
01:15:19to go to some of the biggest authors
01:15:22in different genres of fiction
01:15:25and get them to try and maybe work together.
01:15:28You do one of mine, so you do a kind of domestic
01:15:31thriller thing about a powerful woman
01:15:34and I'll do one of yours, which is about an unsolved murder
01:15:38and then we'll get Jack Carr in
01:15:39and someone can do one of his about a Navy Seal
01:15:43that's been trapped behind enemy lines.
01:15:45And it would be so cool to see what
01:15:47other people's interpretation would be.
01:15:49But the thing that you learn with, going back to dopamine,
01:15:52that you learn when you read something
01:15:53like a Freda McFadden book is so much of it is pacing
01:15:59and just keeping the uncertainty and the suspense going
01:16:03and the surprise and there's, what's it gonna be,
01:16:05what's it gonna be?
01:16:06And then after I'd read enough of these,
01:16:07it's almost a little bit like learning to read them.
01:16:10It's like learning to dance.
01:16:11It doesn't take much learning to read.
01:16:13But you become more excited when you know
01:16:15what's going to happen, but you don't know
01:16:17how it's gonna happen.
01:16:18- How it's gonna happen.
01:16:19- I know that there's gonna be something
01:16:20and it's gonna get me and I'm gonna go, ah!
01:16:22- I think if you did that,
01:16:25I don't know if it would go both ways.
01:16:26I think if you had J.K. Rowling,
01:16:29if you told her to write a non-fiction,
01:16:31like, hey, J.K. Rowling, write a thousand word article
01:16:35about what's going on in Gaza, whatever it might be.
01:16:39It'd be amazing.
01:16:40But I think if you asked Michael Lewis or Malcolm Gladwell
01:16:42to write a fiction, it'd be much harder to make that work.
01:16:45- The streak goes in one direction.
01:16:46- Yes.
01:16:47- Well, because the storytelling is more compelling
01:16:48than the other way around.
01:16:49All of you guys, you, George Mack, who's knee deep
01:16:52in his current book about high agency,
01:16:55all of you, especially yours,
01:16:57is kind of the canonical example of this,
01:16:59you're desperately trying to sneak non-fiction ideas
01:17:03under the guise of fiction.
01:17:04- Yeah, you're just trying to tell stories.
01:17:05- Desperately, story, story, story, story, story.
01:17:07- So much of that in finance is important
01:17:10'cause 99% of financial media is A, a lecture
01:17:14and B, incredibly boring if it's formulaic.
01:17:17And that's the vast majority of personal finance books.
01:17:19It's a lecture, you're doing it wrong, you idiot.
01:17:22And here's a really boring formula
01:17:24that looks like an algebra equation of how you can fix it.
01:17:27And nobody wants to read that.
01:17:28It's not interesting at all.
01:17:29- Your line of personal finance is more personal
01:17:32than it is finance.
01:17:34And okay, how am I going to interject
01:17:37into this very psychological, bias driven,
01:17:42predisposed, patterned response with these statistics?
01:17:47Shapiro's famous line, which you kind of reworked
01:17:52in the book of facts don't care about your feelings.
01:17:54That could not be more wrong.
01:17:56Like feelings really don't care about your facts.
01:17:59- Yeah, yeah.
01:18:00- They don't give a single shit.
01:18:02And that means that if you can, they should do,
01:18:06what Ben is sort of putting forward is
01:18:08in the perfectly rational worlds
01:18:11that we should want to live in, it shouldn't be the case
01:18:15that the way that you feel about something
01:18:16would impact your opinion of it, et cetera.
01:18:18But the bottom line is it does.
01:18:20- It does.
01:18:21- And it always will do.
01:18:21So yeah, I think so much about what my bias is
01:18:26when I'm trying to tell somebody something.
01:18:31I think about this with the live show that I do.
01:18:33Back on tour, Australia, New Zealand, and Bali
01:18:35coming up soon, then building out the new live show.
01:18:38And I've got my first work in progress show
01:18:39here in Austin on Monday.
01:18:41I'm like, fuck, I've got all of these ideas.
01:18:44I've got three years since I wrote that first show,
01:18:46Self-Discovery, and I've now got the new one, Mostly Wise.
01:18:49Okay, what am I going to talk about?
01:18:51What am I interested in?
01:18:52And I've just got a quarter of a million words
01:18:54that I've written on the newsletter.
01:18:56All of it, all of it is just kind of thinly veiled
01:19:00autobiographical journaling, but it's personal.
01:19:04So, and then made into the third person.
01:19:08So I'm like, I can't do this.
01:19:11I'm scouring the internet going, ooh, Salvador Dali.
01:19:14I think he brings my idea to life.
01:19:16But when it comes to trying to compel somebody
01:19:19to think a thing, peppering them with statistics
01:19:24and rhetoric just straight up doesn't work
01:19:27as opposed to you going, well, look,
01:19:29the Vanderbilts managed to go from basically
01:19:31the richest people on the planet to zero
01:19:33in the space of three generations.
01:19:35And they did this. - It's a story.
01:19:36- They did this, yeah, exactly.
01:19:37- It's true for almost anything in life
01:19:38that the best story wins.
01:19:40Not the best idea, not the right idea.
01:19:42It's just the person who can tell a good story
01:19:44that gets people nodding along, that's who wins.
01:19:47That's true in politics, it's true in business,
01:19:49it's true in everything.
01:19:50I remember I had this friend,
01:19:51it was probably 10 or 15 years ago,
01:19:53who was like, he hated Apple.
01:19:56And the reason is he was like,
01:19:57Samsung and Microsoft make better,
01:20:00they're technically better.
01:20:02And they have every feature that Apple does.
01:20:04And it drove him crazy.
01:20:05He was like, I don't understand why anyone
01:20:06would own an Apple phone.
01:20:07The Samsung is just objectively better.
01:20:10And that was the interesting thing.
01:20:12Yeah, but Apple's just telling the better.
01:20:12It's just a cooler phone.
01:20:14It just tells a better story of who it is
01:20:16and who it wants to be.
01:20:17- That's the Ben Shapiro philosophy
01:20:18up against what actually happened.
01:20:20- Feelings don't care about your facts.
01:20:21- Yeah, feelings don't care about your processor speed.
01:20:23- Yeah, it was just a better story.
01:20:25But you see that everywhere of just the person
01:20:28who can tell the best story.
01:20:29This is why a lot, the example I like to use
01:20:31is Bill Bryson, fantastic author.
01:20:33One of the greatest authors of our time.
01:20:35He's written some amazing books.
01:20:36And my understanding is that
01:20:38if you are an academic historian,
01:20:39if you're a Harvard historian,
01:20:42by and large you don't like Bill Bryson
01:20:44because you consider him a pop historian
01:20:46is what they would call him.
01:20:47And to me, pop historian just means you're a good writer.
01:20:51It just means that you can communicate things
01:20:52better than the academics who are writing
01:20:54in the most dense, verbose language
01:20:55that nobody wants to read.
01:20:57And so if you can, I think there's a lot of room in the world
01:21:00for people to take really good ideas from academics
01:21:04who have no communication ability
01:21:06and just explain them a little bit better.
01:21:07You can move mountains doing that.
01:21:10Both of us?
01:21:11- What do you think-- - Both of us?
01:21:12- My career is me poorly reinterpreting
01:21:17the ideas of smarter people who are smaller in platform
01:21:22and need somewhere to come and speak it.
01:21:25That's exactly what it is.
01:21:26It's like, hey, I had a conversation with a guy
01:21:29who is an evolutionary pediatrician.
01:21:33So he looks at child rearing through an evolutionary lens.
01:21:36And this is both from a developmental standpoint
01:21:38and a medical standpoint.
01:21:40This work's fascinating.
01:21:41He's done lots of work that's been tangential
01:21:44to reducing anaphylaxis from peanut allergies
01:21:47by realizing the amount,
01:21:49the sort of dose that these kids would be exposed to.
01:21:52And then you do this titrated exposure over time
01:21:55and you can get rid of it
01:21:56and you can do the same thing with dairy.
01:21:57Then he's talking about how one in six American adults
01:22:00have occipital flattening.
01:22:01The occipital lobe at the back of the head
01:22:03because kids are laid on a mat for so long
01:22:05while their skulls are still forming
01:22:07like an ice cube in a tray freezing in the freezer.
01:22:10You've ice cubed your kid's head.
01:22:14But a kid on the ground is a meal.
01:22:16And you look at what happens
01:22:18with hunter-gatherer tribes and their whole...
01:22:20Anyway, 50 things like that that I had to explain.
01:22:25It was so cute.
01:22:26He had to get maybe his daughter-in-law in his 70s
01:22:29to get his daughter-in-law to come and explain to him
01:22:31how the webcam works.
01:22:32I'm getting him to sort of re-jate
01:22:33and then I got him to sit down.
01:22:34And this guy is a fucking legend.
01:22:37He's so good.
01:22:38He's a great communicator.
01:22:39He's full of vim and vigor.
01:22:40He's great.
01:22:41I was like, you rule
01:22:43and you're significantly more talented than me
01:22:45but nobody knows who you are.
01:22:47Immersively from a thousand and a bit repetitions
01:22:49of doing this thing, sitting down with people like you.
01:22:52I now have this weird kind of slingshot
01:22:55that I can strap you into and go boom.
01:22:58And just send your...
01:23:00Yeah, shamelessly repurposing the ideas
01:23:02of people who are way smarter but just need a platform
01:23:06and then allowing them to come on and shine and go, dude.
01:23:09- It's a great thing to do.
01:23:10I mean, this is what the internet
01:23:11and social media has done so well
01:23:13is it's just turned a lot of things
01:23:15into a pure meritocracy.
01:23:17- It's so egalitarian.
01:23:18It's so fucking egalitarian.
01:23:19- Nobody gives a shit where you went to school.
01:23:21When I was just like, if you can tell a good story,
01:23:22you'd go straight to the top.
01:23:23- And it's getting more like that now as well.
01:23:25- Yeah.
01:23:26Now that can be gamified, of course, on social media
01:23:30in a way that can be kind of nasty.
01:23:31People learn that the right way to get attention on X
01:23:34is to do this and say that and rage bait and whatnot.
01:23:37You can gamify that.
01:23:38But still, it is 100,000 times more meritocratic
01:23:41than it was 20 years ago.
01:23:42- Yeah, and the internet, I think social media
01:23:44is more egalitarian and meritocratic now
01:23:47than it was even three or five years ago.
01:23:49- How so?
01:23:50- The biggest YouTube channels don't have the most plays.
01:23:52The biggest TikTok accounts don't have the highest shares.
01:23:55The biggest Instagram accounts don't get the most reach.
01:23:58It's, if you do, my friend Zach, who I lived with
01:24:02and I toured with around North America this year, last year,
01:24:05he realized that Chat GPT shits itself
01:24:08if you try and get it to spell the word strawberry out loud
01:24:12in terms of counting the number of r's.
01:24:14- Yes, yeah, people, yeah.
01:24:15- And he did half a million likes.
01:24:18I think it had 15 million plays in like a week
01:24:22from him just having a conversation with Chat GPT.
01:24:24- Trying to get it to spell strawberry.
01:24:25- Desperately trying, he's arguing with it
01:24:27and getting infuriated with it.
01:24:29My point is he's got a couple of 100,000 followers
01:24:32on Instagram, which is lots, but it's not an absurd amount.
01:24:36The video was just good.
01:24:38The platforms are getting more and more egalitarian,
01:24:40which means that you can compete with anybody that you want.
01:24:44If you put the right sort of thing out
01:24:46with a base rate of launch velocity,
01:24:49you can absolutely crush it.
01:24:51On the point of we kind of don't necessarily know
01:24:54what it is that we want, you heard the story
01:24:56about Jenny Jerome, Winston Churchill's mother.
01:24:59- Yeah, Churchill's mom, yeah.
01:25:00- Yeah, so she dined with Prime Minister Benjamin Disraeli
01:25:05and his rival, William Gladstone, on consecutive nights.
01:25:08She was a bit of a sort of Hollywood socialite.
01:25:12And when asked about her impressions of the two men,
01:25:15she said, "When I left the dining room
01:25:17"after sitting next to Gladstone,
01:25:18"I thought he was the cleverest man in England,
01:25:20"but when I sat next to Disraeli,
01:25:22"I left feeling like I was the cleverest woman."
01:25:24- That's good, yeah.
01:25:26- And I think a lot of the time people believe
01:25:28that they want to be charismatic, but--
01:25:31- You want to make the other person
01:25:32feel good about themselves.
01:25:33- Bingo. - Yes.
01:25:34- Some people are interesting
01:25:35and some people make us feel interesting.
01:25:37- I was telling someone earlier today
01:25:39about someone who we both know, a mutual friend,
01:25:41who when I met this person, I came away
01:25:44and I was like, "I think he really likes me.
01:25:45"He really seems interested in me."
01:25:47And then I had this moment, I'm like,
01:25:49"I think actually he does that to everybody.
01:25:50"I think he has that effect
01:25:51"on every single person that he meets."
01:25:53- That's a great point from Matthew Hussey around dating,
01:25:56that people go on a first date with someone
01:25:59and feel this incredible spark
01:26:00and think that it's something special
01:26:02between them and the person
01:26:03without realizing that that person is just sparky.
01:26:05- Yeah.
01:26:06- They just have this effect.
01:26:07- Give it to anybody.
01:26:08- On everybody, yeah.
01:26:09But the reason that I love that story about Jenny Jerome
01:26:12is a lot of people believe
01:26:14that they want to be more charismatic
01:26:16because they want to walk into a room
01:26:18and for that aura to be electric
01:26:19and everyone to sort of turn and gasp and be so impressed.
01:26:22But when I reflected on the sort of friends
01:26:24that I liked spending the most time around,
01:26:27they weren't the ones that had this magnetic aura
01:26:30that was super impressive and dominant
01:26:32or formidable or whatever.
01:26:33- Made you feel good about yourself.
01:26:35- These people that I wanted to hang around with
01:26:36because they made me feel good about them.
01:26:37- They make you feel good about yourself.
01:26:38- They made me feel interesting.
01:26:40- And it's a great thing what we were talking about earlier
01:26:42of like no one's thinking about you as much as you are.
01:26:45And so no one's paying that much attention to your aura
01:26:48or your charisma or if anything,
01:26:50they might find it gross and egotistical.
01:26:53But if that person makes you feel good about yourself,
01:26:56it makes you feel good about the person who you are
01:26:59inside of your own head.
01:27:00People love that.
01:27:01Politicians figured that out a long time ago.
01:27:03- How so?
01:27:04- Of making other people feel good about themselves.
01:27:06When you meet someone,
01:27:07it's less about look how powerful I am
01:27:08and more about like liking themselves
01:27:12and making you feel good about yourself.
01:27:14There's always been the trick.
01:27:14- Wasn't that a descriptor of the people
01:27:17that had met Clinton?
01:27:18He made me feel like I was the only person in the room.
01:27:19- That's exactly it, yeah.
01:27:21Yeah, I was trying to think of who the other one or that.
01:27:22I think it was Howard Dean, someone said.
01:27:24- Who the fuck's that?
01:27:25- Or John Edwards.
01:27:26- Who the fuck's that?
01:27:27- They both ran for presidency in the early 2000s.
01:27:30John Edwards had a huge flame out,
01:27:32but they were very talented of everyone they met.
01:27:35They'd be like, he really likes me.
01:27:36- Magnetic.
01:27:37- He remembered me kind of thing.
01:27:39That's always been a skill.
01:27:40- That's also a really good way,
01:27:42if you want to hurt someone,
01:27:43if you really, really want to hurt someone,
01:27:45when you shake the hand, just look right through them.
01:27:48- Yeah, yeah.
01:27:50I'll tell you, I won't tell you who they are
01:27:52'cause they're still writing,
01:27:54but I had a writing role model 10 or 15 years ago,
01:27:59person I looked up to more than anybody,
01:28:01and I wanted to emulate this person.
01:28:03And not only the writing, but career-wise,
01:28:05I was like, I want to be this person.
01:28:07And I saw them at a conference and never met them,
01:28:10never exchanged a word with them.
01:28:11And I came up and I said, oh, I'm Morgan Housles.
01:28:13Nice to meet you.
01:28:14And he went, who?
01:28:15I said, oh, I'm Morgan Housles.
01:28:16I'm a writer for The Motley Fool.
01:28:17And he basically swatted me away and kept walking.
01:28:20- Looked through you.
01:28:20- And I will never forget that.
01:28:22It made me feel so small.
01:28:25And the fact that I looked up to him so much at that time.
01:28:29And honestly, it was a no-nothing event.
01:28:32I'm not gonna pretend it was that big a deal,
01:28:34but I'll never forget it.
01:28:35People will never forget how they made you feel,
01:28:39good or bad, in that moment.
01:28:41- Well, you're right to say that the expectation as well,
01:28:45talking about expectations, talking about wealth,
01:28:47your expectation of meeting this person who you've idolized
01:28:50for a very long time, you had,
01:28:53'cause if you'd just been some bloke
01:28:55who didn't know who that other bloke was,
01:28:57and you said, oh, I'm Morgan.
01:28:58And you're like, oh, it seemed a little bit rude.
01:29:01Whereas you had the--
01:29:03- Huge expectation.
01:29:04- Clouds are going to part and the (sings)
01:29:07- Exactly.
01:29:07- The angelic music's gonna come down.
01:29:08- In his mind, I was just a little rat getting in his way
01:29:11that he needed to brush aside.
01:29:12In my mind, he's a hero.
01:29:14- He's a goat.
01:29:15The key to understanding most online debates
01:29:17is that a lot of people take joy in being angry.
01:29:19It's their preferred mindset
01:29:21because it makes them feel morally superior
01:29:23to the other side.
01:29:24- It's intoxicating.
01:29:25- That is such money.
01:29:27That is so good.
01:29:28- And I think it's the idea
01:29:29that every judgment is a confession.
01:29:32When you judge other people, when you judge other people,
01:29:34you're actually confessing something about yourself.
01:29:36And a lot of people enjoy being angry
01:29:40because it gives them an intoxicating sense
01:29:42of moral superiority.
01:29:43Because what you're saying is if I say,
01:29:45Chris, you are immoral.
01:29:47You are doing things wrong.
01:29:48You're a terrible person.
01:29:49What I'm actually saying is I'm doing it better.
01:29:51- Implicitly.
01:29:52- I'm doing it better and I feel good about myself.
01:29:54I've elevated myself by pushing you down.
01:29:57And that's why a lot of this happens.
01:29:59It's not that people, like people enjoy being angry.
01:30:02They wanna be angry
01:30:03because it makes them feel good about themselves.
01:30:05And if you see it through that lens,
01:30:07why is everyone so pissed off?
01:30:08Why is social media so negative?
01:30:10'Cause it feels great.
01:30:11It can feel great to hate other people,
01:30:13especially on social media
01:30:14where you don't need to do it to their face.
01:30:16You don't need to physically attack the person.
01:30:18Just write this and I feel great about myself.
01:30:19- Yeah, implicit in that my morality stands on the shoulders
01:30:23of your morality that I've just pushed down a peg.
01:30:26- The only way that I can really measure what my morality is
01:30:31is if I identify people who are below me.
01:30:33And that's why it feels great to identify people below me
01:30:35and constantly be looking for them
01:30:37and reminding them that they're below me.
01:30:40- There's an idea from evolutionary psychology
01:30:42about female intrasexual competition.
01:30:44It's called the bless her heart effect.
01:30:46And what it explains is a type of gossip
01:30:50that is more prevalent among women than it is among men.
01:30:53And it's venting.
01:30:55Venting is couching the critique of a potential rival
01:31:00under the guise of concern.
01:31:05So, Morgan, I just, I need to tell you about Elizabeth.
01:31:08I'm just so worried about her
01:31:09'cause she's sleeping with all of these guys.
01:31:12And I'm just so worried that she's gonna get hurt.
01:31:14- I'm just here to look out for you.
01:31:15What have you taught, you've said that Elizabeth,
01:31:17sleeping with all of these guys, that you would never,
01:31:20me, I would never, so implicit in the derogation of her,
01:31:24you've disrupted her trajectory
01:31:27and implicitly raised up your own.
01:31:29You've managed to get, if Elizabeth comes and says,
01:31:32"Christina, why did you tell Morgan this thing?"
01:31:35And I go, "See how Morgan's good
01:31:36"'cause it's a girl's name as well."
01:31:38(laughing)
01:31:40Christina, why did you say, "Elizabeth, I'm so sorry.
01:31:43"I'm just, I'm really worried about you."
01:31:45Ask her, was I gossiping or was I worried about her?
01:31:49- Yeah.
01:31:49- And yeah, the bless her heart effect.
01:31:51- There's another version of this joke that goes around
01:31:53that girls like telling other girls
01:31:55that they should cut their hair short.
01:31:57- I had the research-- - Because they know guys
01:31:59by and large don't like that.
01:32:01But if you tell your girlfriend to do it,
01:32:03you've just demoted her and promoted yourself.
01:32:05- Dr. Danielle Stolikowski--
01:32:06- I don't know if that's a real or a joke.
01:32:08- Dr. Danielle Stolikowski is the woman
01:32:09who did the study on this.
01:32:11And women who are higher in what's called
01:32:13intrasexual competition, which was the dynamic
01:32:15I was literally just talking about.
01:32:17Women who rate higher on that advised women
01:32:20that they saw as potential sexual rivals
01:32:22to cut off more hair.
01:32:22- Yeah, that's so fascinating.
01:32:24- There is an entire world--
01:32:26- Everything's a competition.
01:32:27- But there is an entire world.
01:32:28This is why, when it comes to finance,
01:32:30it must be really fascinating.
01:32:32And I know that there is a huge world of this,
01:32:33like financial advice for women.
01:32:36And I don't know what the split is
01:32:38of people who read your books.
01:32:39But it's the same fuel source and a similar outcome
01:32:44that both men and women are looking for
01:32:47when it comes to finance.
01:32:48But their motivations for getting there
01:32:50have to be very different.
01:32:51And the way that they think about money,
01:32:53I would imagine that there is a big sexed difference.
01:32:56Steve Stewart Williams, who wrote the fantastic
01:32:58The Ape Who Understood the Universe,
01:32:59his new book is A Billion Years of Sex Differences.
01:33:02I can't wait.
01:33:02- Yes, no, I've seen this, yeah.
01:33:04- He's gonna be so canceled
01:33:05and it's gonna be so fucking brilliant.
01:33:06And there have to be some really interesting sex differences.
01:33:11Like what is it that is driving women to accumulate wealth?
01:33:16And what are their fears?
01:33:18And what about men?
01:33:20Because we certainly know
01:33:20that women spend more money on beautification
01:33:22and men spend more on cars and watches.
01:33:24Men spend more on formidability.
01:33:28Women spend more on making themselves look younger.
01:33:31Okay, so what does that say about the motivations
01:33:35and the dynamics if you start to lose,
01:33:38being number 100 in the world and then dropping down to 150,
01:33:41how does that feel to a man and how does that feel to a woman?
01:33:43So when you're talking about there is no one size fits all,
01:33:45even from the same culture, same family, same background,
01:33:48same industry, well, those two individual people,
01:33:51if you just pick man versus woman--
01:33:53- Yeah, so you get a totally different outcome.
01:33:54- Universe is a problem.
01:33:55- I'm willing to bet too, I don't have this data,
01:33:56I'm willing to bet if you were to sort through
01:33:59the most reckless Robinhood accounts
01:34:01of people who just blew themselves up,
01:34:03they had a six figure account balance
01:34:05and bet it all on this thing and lost everything.
01:34:07I'm willing to bet good money, 98% of them would be men.
01:34:10- Of course.
01:34:11- That's just the mindset of it.
01:34:12But I also think to that point,
01:34:15on the getting rich versus staying rich spectrum,
01:34:18I think it tends to be the case
01:34:19that men are better at getting rich
01:34:21because they are willing to take unbelievable risks
01:34:24and women are better at staying rich
01:34:25because they have a more developed prefrontal cortex.
01:34:27- I wonder--
01:34:28- We can better size up the risk--
01:34:30- I wonder if this is a really wonderful pro-marriage argument
01:34:35- You need both.
01:34:35- Yes, yes, yes.
01:34:37You need the man to have got you off the launch pad
01:34:39and then you need the woman to keep you out in orbit.
01:34:41- There's, yeah, I think that's--
01:34:43- What a cool--
01:34:44- There's a lot of things like,
01:34:45I forget where I read this recently or heard this recently
01:34:47that young men in particular like really need guardrails,
01:34:49Scott Galloway's who wrote this,
01:34:51young men really need guardrails by and large from women
01:34:54who can put the guardrails around them.
01:34:56Left to their own devices,
01:34:57they're gonna make terrible decisions.
01:34:58- Very bad, yeah.
01:34:59- I wouldn't be surprised, and I'm sure I've been,
01:35:00my wife and I have been together for 20 years
01:35:02and I'm sure a lot of my financial philosophies
01:35:05in my own house are based on the idea that like,
01:35:08this is just me, I have a family to take care of,
01:35:10so I'm not gonna take risks that I otherwise might
01:35:13if I was on my own.
01:35:14And otherwise would make perfect sense to me
01:35:16if I was on my own,
01:35:17but now I have the family guardrails around me
01:35:19to temper that down and be like, no, this ain't for me.
01:35:21- Don't use leverage.
01:35:22Don't use leverage, not today.
01:35:24- Right, right.
01:35:25- Let's not use leverage.
01:35:26- And certainly I did a lot of crazier things
01:35:28when I was much younger and not married, not partnered,
01:35:32because they seemed like good,
01:35:34I think the vast majority of young men in particular,
01:35:37when they're first exposed to investing,
01:35:40have a pure gambling mindset.
01:35:41And the idea of like, buy a diversified portfolio
01:35:44and hold it for 50 years, you're like,
01:35:46that's nobody's knee-jerk reaction of what you should do.
01:35:49Everybody's knee-jerk reaction is like,
01:35:51what's the fastest way that I can get rich?
01:35:53- I wonder if that is going to become more prevalent
01:35:55with Polymarket and CalChi.
01:35:57- Oh, it's the worst.
01:35:58There is so much financial history across cultures,
01:36:01across countries, across generations,
01:36:04that if you give people the tools
01:36:07to light themselves on fire financially,
01:36:09they will douse themselves in kerosene and light the match.
01:36:13They will take it full, and ruin their lives doing it.
01:36:15And they'll do it.
01:36:17And so, look, I'm a free markets guy.
01:36:19I'm a individual responsibility guy.
01:36:25But giving 17-year-old boys the power
01:36:28to bet their meager life savings
01:36:30that they need for tuition or whatever it might be,
01:36:33to bet on the spread of tonight's game.
01:36:35I don't think we're going to look at that fondly.
01:36:37And every statistic, it hasn't been around for that long.
01:36:40And every statistic, if you talk to therapists,
01:36:42of just like the explosion of young men coming to them
01:36:46and being like, I'm broke, I lost everything.
01:36:48I spent all of my time--
01:36:49- What on, sports betting?
01:36:50- Sports betting, or stock market.
01:36:53Robinhood kind of things.
01:36:54And so it used to be, whether it was legally
01:36:56or the barriers to entry to stock trading 20 years ago,
01:37:00were pretty high.
01:37:01You know, you were paying per trade.
01:37:02There's a per trade fee that was like a speed bump
01:37:05that I actually think was a good thing.
01:37:07Like there's not a lot of times in life
01:37:08where lower costs gives worse consumer outcomes.
01:37:13I think stock trading was one of them.
01:37:15It was just enough speed bump for you to be like,
01:37:17do I want to be doing this?
01:37:19Is this the right trade to make?
01:37:20Now you can just sit there on Robinhood all day
01:37:21and just buy, sell, buy, sell, buy, sell, buy, sell.
01:37:23And everything we know about investing is like,
01:37:25that's the behavior that's going to lead to regret.
01:37:28- What are some of the biggest well-meaning mistakes
01:37:33that parents make when money enters the picture
01:37:37and it's related to their kids?
01:37:39- I think a lot of wealthier parents, not super wealthy,
01:37:42but just parents of some low level of means,
01:37:45have an idea, very understandable idea of like,
01:37:49I want to use my money to give my kids a better life,
01:37:52but I don't want them to be spoiled.
01:37:54And the way that they go about that
01:37:55with very well-meaning intentions is being like,
01:37:59look, we have money to help this child,
01:38:02but they need to go do it themselves.
01:38:03They need to go earn themselves
01:38:05and suffer on their own and whatnot.
01:38:07And inadvertently what often happens
01:38:10is the parent thinks that they are teaching the kid hard work
01:38:14and dedication and integrity.
01:38:16And the message that the kid actually hears is humiliation,
01:38:19that the parents could be helping them,
01:38:21but they not, because I'm not worthy of their help.
01:38:24And in the mind of the adult, in the mind of the parent,
01:38:27that doesn't make a lot of sense.
01:38:29In the mind of a 14 year old,
01:38:30that's all you can hear is I'm not worthy of their help.
01:38:33And it goes astray.
01:38:35I've told this story before about a good friend of mine
01:38:37whose grandfather was very wealthy
01:38:39and didn't want his kids and grandkids to be spoiled.
01:38:42And so when they went skiing, his grandfather would say,
01:38:44if you want me to buy you a lift ticket,
01:38:46you first have to hike up the hill.
01:38:48And if you do that and ski down,
01:38:50then I'll buy you a lift ticket.
01:38:51Show me that you are capable of hard work.
01:38:54And so my friend tells a story.
01:38:56He says, the lesson that the grandfather wanted to teach us
01:38:58was hard work, but the lessons that we actually learned
01:39:02was grandpa's an asshole.
01:39:04That was the lesson that they actually heard from it
01:39:05was humiliation from it.
01:39:07And I think there's a lot of versions of that.
01:39:10Another version of it is it's extremely difficult
01:39:14for anyone to demote their lifestyle,
01:39:17to be at one level and then have to tick down
01:39:20even a small amount, people can absolutely lose their minds.
01:39:22- Downsized car, downsized house.
01:39:24- And so if you are a parent of any kind of means or wealth,
01:39:28you have to be very careful picking your lifestyle,
01:39:32knowing that that will become the baseline,
01:39:35barest of expectations for your child when they are adults.
01:39:37- If you're in the 20,000 square foot house.
01:39:40- That's the baseline.
01:39:42That's not a mansion.
01:39:43To you, the parent, it's a mansion
01:39:44because you grew up in something smaller.
01:39:45To your kid, that is normal now.
01:39:48And you think about this,
01:39:49what if that child wants to be a kindergarten teacher?
01:39:52But they can't.
01:39:53They know that they can't live that lifestyle
01:39:55'cause they got accustomed to something else.
01:39:56So now they have to try to become a lawyer or a doctor
01:39:58or an entrepreneur if they don't want to do it.
01:40:00- I wonder if this explains another element
01:40:04on top of the psychological and relational
01:40:06and all the rest of it.
01:40:08Why divorce is so painful?
01:40:09Because if you're splitting the finances or even not--
01:40:14- Everything's half, right.
01:40:15- Yeah, yeah, yeah, there's half as much to go around,
01:40:17which means you don't get the same house and put it in half.
01:40:22You get two houses that are less than half a shit.
01:40:25Because you got all of these additional costs
01:40:29that you need to pay now and you've got to go between the two
01:40:32and maybe you shared a car,
01:40:33but now you've got to have two cars
01:40:35and that means that both cars are less than half as good.
01:40:37- Right, right.
01:40:38I think a very core human feeling that feels incredible
01:40:41when you have it and is devastating when you don't
01:40:43is generational improvement.
01:40:45Is to say that I'm living a better life than my parents.
01:40:48And as parents, it feels so good
01:40:51when you look at your children and say,
01:40:52they lived a better life than we did.
01:40:54That is a core thing.
01:40:55And if you don't have it, it's difficult to have a good life.
01:40:58If you say, my parents raised me up here
01:41:01and now as an adult, I'm down here.
01:41:03Even if down here is still a great life,
01:41:05it's very difficult to wrap your head around.
01:41:07- Have you looked at intergenerational competition theory,
01:41:10IGCT, the entire body of work
01:41:12around exactly what you're talking about?
01:41:13Really, really interesting.
01:41:14You'd love it.
01:41:15- It makes a lot of sense.
01:41:16And this is, that's the curse
01:41:17of being a very successful, wealthy parent.
01:41:18You feel so good as a parent.
01:41:20I worked my ass off, made a lot of money.
01:41:22Now I can give my kids a great life.
01:41:24Every cell in your body tells you to do that
01:41:26and it's a wonderful thing.
01:41:27And if in the process of doing that,
01:41:29you inflated your kids' expectations to a level
01:41:31that they will never be able to exceed themselves
01:41:33through their own hard work and dedication,
01:41:35it's actually a curse.
01:41:37- Wow.
01:41:38Yeah, I think the other interesting thing is
01:41:41this comes into conflict with two or three other dynamics
01:41:46in the modern world.
01:41:48So you have intergenerational competition theory
01:41:51and it's not where were my parents at the age that I'm at,
01:41:55it's where do I think my parents were
01:41:57at the age that I'm at.
01:41:58So if you're unable to see the difficulty
01:42:02of them taking the bus to work or whatever it might be,
01:42:04there's just this assumption that a lot of the costs
01:42:07and a lot of the price, they didn't really pay it all that much
01:42:09but they were able to buy a house for what,
01:42:11like two years wages or something like that.
01:42:13So it's not only that, not where were my parents,
01:42:16but where do I think my parents were
01:42:18when they were at my age.
01:42:19And also, where do I think that all of my peers are now
01:42:24given that everybody is putting the best of themselves online
01:42:28and that your entire competition network is globalized
01:42:32and available 24/7 and has the highest status,
01:42:36wealthiest people on the planet rising to the top by design
01:42:38because they're the ones that have got the outlier effect.
01:42:41It is no fucking surprise to me that people feel
01:42:45like they can't afford to have a family,
01:42:47that they can't afford to buy a house.
01:42:49What's your, give me, you must have looked at this,
01:42:52sort of the financial state of Gen Z and of sort of modernity.
01:42:56What are some lesser known or unpopular insights
01:43:00into the wealth of Gen Z and previous generations?
01:43:04- Well, look, by and large, there has been wage growth,
01:43:08real wage growth adjusted for inflation
01:43:11over the last several generations.
01:43:13On average, that's true.
01:43:14On the whole, that's true.
01:43:16The areas in which it is absolutely not true,
01:43:18that is just dramatically more expensive today
01:43:22than it was in any previous generation is housing.
01:43:24And that's the most important thing to people.
01:43:26In terms of like box checking into adulthood,
01:43:30buying a house is near the top
01:43:32to where if you can feel that you can do it,
01:43:34you feel like you're really making progress.
01:43:35I'm an adult, I own my own house, I'm doing it.
01:43:37And if you can't do it,
01:43:38you feel like you're just kind of stuck down
01:43:40in some lower level that you'll never get out of.
01:43:43And so when people talk about the price of housing,
01:43:45they talk about it like it's a spreadsheet problem.
01:43:47Like it's just, oh, we gotta get down mortgage.
01:43:49It's a social problem.
01:43:50And I think almost every social problem today that we have
01:43:54in any country in America or any other country
01:43:56that has expensive housing
01:43:57is downstream of housing affordability.
01:44:00If you can't afford your house,
01:44:01you're less likely to get married,
01:44:02you're less likely to have kids,
01:44:03you're more likely to abuse drugs,
01:44:05you're more likely to have poor mental health.
01:44:07It all stems down from lack of housing
01:44:10and even something like drug addiction
01:44:12that you wouldn't think would be that attached to housing.
01:44:15When housing is very expensive, almost by definition,
01:44:18the bottom sliver of society becomes homeless
01:44:21'cause there's, housing expensive
01:44:22'cause there's not enough of it.
01:44:24Almost definitionally, people are gonna become homeless.
01:44:26What do a lot of, so many people do when they become homeless
01:44:29to gain a little bit of hope in their life?
01:44:31- Drugs. - Heroin.
01:44:32And so I think it seems crazy,
01:44:34but you can, there's so many of those
01:44:35where you think housing affordability is a housing problem
01:44:38and it is just a social problem all the way down.
01:44:41We had a family friend and she was in her late 20s,
01:44:45happily married, both of them have good jobs,
01:44:48want to be parents but can't afford a house where we live
01:44:51and are delaying, delaying, delaying trying to have kids
01:44:54until they can afford a house,
01:44:56which in many cities, including the city I live in,
01:44:58seems like a good luck waiting kind of thing.
01:45:01And so it's a huge, it's the biggest social problem
01:45:04I think that we have in America.
01:45:06- What is the relative, do you know the data
01:45:09on how actual wages, median wages, median house price?
01:45:14Is it because house prices have gone up an awful lot
01:45:17and wages haven't gone up in line with it?
01:45:19Is it because of interest rates?
01:45:21Is it, what is it?
01:45:22- The thing that's so I think should be,
01:45:24should make you angry about the housing issue
01:45:27is that it's the easiest issue to identify why it's a problem
01:45:31and it's the easiest thing to fix.
01:45:33We don't build enough houses, that's it.
01:45:35It's the easiest supply and demand thing.
01:45:37We were probably 5 million houses short in America
01:45:40that we should have built then we didn't.
01:45:43Why didn't we build them?
01:45:45We have plenty of construction workers.
01:45:47We have plenty of capital.
01:45:48There's plenty of demand.
01:45:50Almost all the way down, it's a zoning issue.
01:45:52Whereas in most cities in America
01:45:55where people want homes to be, it's illegal to build them.
01:45:58You can't get it properly zoned
01:46:00or it takes too long for most developers to put up with it.
01:46:03And so it's purely, it's a choice.
01:46:06It's a choice to be in the situation that could end tomorrow
01:46:10if people understood the problem enough.
01:46:12- Hang on, so
01:46:13we have the money to build the houses?
01:46:19- Of course.
01:46:20- And the people to be able to--
01:46:22- The demand to do it.
01:46:23- The people to be able to build them
01:46:25and the materials to be able to make them
01:46:26and the people to live in them
01:46:28and the demand for them, but because of--
01:46:32- Talk to a real estate developer in Los Angeles
01:46:34who owns a plot of land that wants to build 100 homes on it.
01:46:38And it'll tell you, it'll take you,
01:46:39if you're lucky and good and spend a fortune,
01:46:42it'll take you three to five years to get it permitted.
01:46:45And by that time you'll probably just give up
01:46:46and move somewhere else.
01:46:47- This is fucking insane.
01:46:48I didn't know that any of this happened.
01:46:49- It should be the biggest problem.
01:46:50There's several books have been written about it recently,
01:46:52Abundance by Ezra Klein and Derek Thompson is a good one.
01:46:55There's another book called Stuck
01:46:57that is about the history of zoning rules and the--
01:47:00- Why is zoning getting in the way?
01:47:03What is it that they want?
01:47:05- Well, this is by--
01:47:06- Do the people not want houses built--
01:47:07- The people who already have houses
01:47:08don't want other homes built around them.
01:47:10The other thing, I think the most dangerous thing
01:47:12that we've done in America in the last 50 years
01:47:14is convince people that rising home prices are a good thing.
01:47:17And now if you own your house, you think,
01:47:19oh, I bought this house for 200 grand
01:47:21and now it's worth 600.
01:47:23I just made $400,000.
01:47:25I've never seen so much money in my life.
01:47:26A, no, you didn't because if you sold that house
01:47:29for 600 grand, you have to buy another house
01:47:31that is also inflated in value.
01:47:33So you didn't make anything.
01:47:34You didn't make any money whatsoever.
01:47:36Who you did push out is the first time home buyer
01:47:40who didn't ride that wave of rising home prices
01:47:42that is now priced out of a house.
01:47:43- That's such a fucking good point.
01:47:45How have I never thought about this?
01:47:47That if you buy a house low and sell it high,
01:47:50you still need a house.
01:47:51You need another house that inflated by the same amount.
01:47:54The only exception to this is if you downsize.
01:47:56- Or if you migrate. - That's a very rare thing
01:47:57to do, if you migrate or downsize.
01:47:59- Well, I did it.
01:48:00- But most people do neither nor.
01:48:01- I don't own my house in America,
01:48:04but I did very fortunately manage to buy a house in the UK.
01:48:08And I did it the other way.
01:48:10So I went from the Northeast of the UK,
01:48:11very working class town where, gosh,
01:48:15at a not particularly fancy wage,
01:48:18I think less than one year of annual salary for me
01:48:23was my deposit.
01:48:26So in the space of not too long, by being frugal,
01:48:29I was able to save up enough money
01:48:30to be able to put a deposit down on the house.
01:48:33Then I moved to America.
01:48:34And the world is very different over here.
01:48:36- A different thing.
01:48:37- It is a different fucking beast.
01:48:39- Trump had a very honest comment about this two weeks ago.
01:48:44And this is one of the great things about Trump.
01:48:45He'll tell you exactly what's on his mind.
01:48:46Don't sugar coat anything.
01:48:48And he said, look, I'm paraphrasing him,
01:48:50but he said, if we build more houses,
01:48:52that's gonna come at the expense of people
01:48:54who already own houses.
01:48:55If you build more houses, the price goes down.
01:48:57That's phenomenal for the people who don't own a house yet.
01:49:00And it's devastating for the people who do.
01:49:02And so that's where we're at this huge--
01:49:05- Sailmates between the two, right.
01:49:06And I'm gonna guess that local house owners lobby
01:49:10the zoning people so that we don't want more
01:49:13'cause we don't want to lose our, right?
01:49:17- I read this book recently on the history of Levittown.
01:49:18Do you know what Levittown is?
01:49:20- I know a funny joke about it's near Long Island.
01:49:23- Oh, there's several of them.
01:49:24And it was at the end of World War II.
01:49:26We stopped building houses in World War II
01:49:28'cause we needed the material for other things.
01:49:30We didn't build a single house basically.
01:49:31And then you had 16 million GIs come home,
01:49:35all of whom what they wanted more than anything else
01:49:37was a house.
01:49:38And so they came home in the late 1940s
01:49:40and there was a massive housing shortage and prices surged.
01:49:43And it was a huge problem.
01:49:45But back then in most area of the countries,
01:49:46there was a very little zoning.
01:49:48And so the Levitt brothers started buying up
01:49:50old abandoned farms and they built tens of thousands of house
01:49:54just threw them up.
01:49:55And this became like the quintessential white picket fence
01:49:58small that housed all the GIs.
01:50:01And one of the parts of the book that's really interesting
01:50:04is like I said, there's virtually no zoning back then.
01:50:07If you bought a farm, do whatever the hell you want with it.
01:50:10Now we're sitting here in Austin, Texas.
01:50:11Texas is one of the few states that still more or less
01:50:13has that and what is true about Texas housing?
01:50:16It's cheap relative to other areas of the country.
01:50:19And if you go to San Francisco, Los Angeles, Seattle,
01:50:23extremely difficult zoning and an entry-level shithouse
01:50:26cost two and a half million dollars.
01:50:28And it's absolutely devastating to the young generation
01:50:33who rightly feels that the opportunities that were afforded
01:50:37to their parents and their grandparents--
01:50:38- I should do more about this on the pod.
01:50:42If you were to bring somebody on the podcast,
01:50:43who would I speak to?
01:50:44Who do you think is good on this topic?
01:50:46- Probably Derek Thompson.
01:50:47- Okay.
01:50:48- Probably understands it more than anyone
01:50:49and can articulate it very well.
01:50:51- Okay, I should do more about this.
01:50:54- The book stuck is very good and the history of zoning
01:50:58and zoning started really with as a way
01:51:02to keep Chinese immigrants out of white people,
01:51:06out of neighborhood and started with that
01:51:09and just expanded, expanded, expanded and blew up there.
01:51:12So it has like very strict racial beginnings
01:51:17that came into as something that almost every city
01:51:20in America now practice.
01:51:21- And it's now being inherited by domestic people
01:51:25that Americans--
01:51:27- Everywhere and when you frame it again
01:51:29as the first part of the equation,
01:51:30like if the value of your house doubles,
01:51:31you didn't gain anything
01:51:32because the house that you have to buy.
01:51:34So frame it as this, we are stifling young people's ability
01:51:39to buy a house so that old people can raise the value
01:51:43of their house when they're not actually gaining anything
01:51:46at all to begin with.
01:51:47They don't actually gain any wealth.
01:51:48- Because of the entire water line up and down.
01:51:50- It's all of it.
01:51:51- Everybody's going up and down together.
01:51:52I suppose--
01:51:53- And so here's the other thing that's so crazy about this.
01:51:55To Trump's comment, if we build more houses,
01:51:57the value of homes would fall and that would hurt people.
01:52:00It wouldn't actually hurt them.
01:52:01If your house is currently worth a million dollars
01:52:03and then we build tons of houses and now it's worth 500,
01:52:06you didn't lose anything.
01:52:08- Because you can buy another one?
01:52:08- Because you sell that and buy another house that's 500.
01:52:10- I suppose the problem here is you need a God's eye view
01:52:13to coordinate all of the houses to go up and down together.
01:52:16- And so much of this is the vast majority of it
01:52:18is local rules and laws.
01:52:20And if you think national politics is dysfunctional,
01:52:22local is much more so.
01:52:25- Okay.
01:52:25Out of spending money, talked about a million different ways
01:52:30that you can get spending money wrong.
01:52:32What about not spending money?
01:52:34Because there are the misers.
01:52:35There's the Ebenezer Scrooge on the other side.
01:52:37Bill Perkins' book, "Die with Zero" is fucking fantastic.
01:52:40- Fantastic, yeah.
01:52:41- Wonderful.
01:52:42What is your perspective or what is there to know
01:52:46about people who can't put their hand in their pocket
01:52:49as opposed to keep putting it in too frequently?
01:52:52- I have two views on this.
01:52:53One is it's just as broken and detrimental
01:52:57to have a mentality of I can't spend this money
01:53:00to the person who can't spend it fast enough
01:53:01and runs himself over a cliff.
01:53:03It's just as much of a mental illness in that situation.
01:53:06And if you talk to a lot of financial advisors,
01:53:07they will tell you the number one psychological ailment
01:53:12of their clients are baby boomers
01:53:14who have saved several million dollars,
01:53:16can easily afford to safely have a wonderful retirement
01:53:20and can't bring themselves to spend a penny of it.
01:53:22Because their financial identity, number goes up every year.
01:53:26- I'm a saver.
01:53:27- I'm a saver and my net worth goes up every year.
01:53:29And the idea of starting to entrench that down
01:53:32is so painful to them.
01:53:34The other side of this,
01:53:35of why I think it's actually half rational
01:53:38is we're fortunate to live in a world
01:53:40where if you retire at 60,
01:53:42there's a meaningful chance
01:53:43you're gonna live into your 90s.
01:53:45And so you're talking about, it was not that long ago.
01:53:48I mean, 60 or 70 years ago, the idea of retirement
01:53:50by and large didn't exist for most people.
01:53:52- People just worked up until--
01:53:53- They worked until they died. - It didn't work anymore?
01:53:54- Your retirement party was also your funeral.
01:53:56That was how it worked.
01:53:57And retirement was something that rich people
01:53:59could afford to do.
01:54:00But ordinary people, it didn't work at all.
01:54:01And then even if you go back to the 1980s,
01:54:03you retired at 60, you're probably gonna die at 68.
01:54:06So you're talking, you might need to fund a retirement
01:54:08for three, five, maybe 10 years.
01:54:10Now you're legitimately looking at people
01:54:12who might need to fund a retirement for 40 years.
01:54:15And the amount of money that you,
01:54:16so the idea that they are worried about spending too quickly,
01:54:18and you're like, yeah, good worry.
01:54:20You should think about that.
01:54:21- Yeah, between some people getting to wealth escape velocity
01:54:25and longevity, increasing life span,
01:54:29you could end up with,
01:54:31well, I mean, even for your adult life,
01:54:32you're talking about only maybe about 50%
01:54:34of your time being spent working.
01:54:36If you live until you're 90--
01:54:38- And you retire at 65, you got, I mean, that's--
01:54:42- Not far off.
01:54:42- And it's a period of time that you need to fund
01:54:45that would have been just such a magical thing
01:54:49to my grandparents' generation,
01:54:50to our grandparents' generation.
01:54:52So the idea that people think about that longevity
01:54:54and don't want to ever spend makes a lot of sense.
01:54:56And you can match that with people
01:54:57who still have a mental affliction of,
01:54:59I can't bear seeing the numbers go down.
01:55:02I don't know if I'll do a good job with this, honestly.
01:55:05I'm in wealth accumulation growth mode right now.
01:55:08When I'm 80, I don't know if I'll do a good job of it
01:55:10because I do feel like, in a way, that's probably not good.
01:55:13Number go up is important to my identity.
01:55:15- Yeah, I think a good line from Bill Perkins' book
01:55:19about give your kids their inheritance when they're 30.
01:55:23That's my favorite takeaway from his book
01:55:25and changed profoundly how I think
01:55:27about inheritance for my children.
01:55:29Profoundly.
01:55:29- Yeah, the simple fact that if you wait until you die,
01:55:34your kids don't need your money.
01:55:36- Right, but they desperately need it when they're 30
01:55:38and trying to buy a house.
01:55:39- Get the first house, do it.
01:55:40- And get it, and having kids and daycare.
01:55:41- You know what else you could do?
01:55:43This might actually be a wonderful intervention
01:55:46to get people, parents, to feel the,
01:55:53pain, or to dampen the pain,
01:55:55or maybe even completely negate the pain
01:55:57of the downsizing and of the number go down thing
01:56:01of, well, yeah, sure, we had a big house,
01:56:03but we had a big house 'cause there was three kids in it.
01:56:06And now it's just, I know you've talked about this as well,
01:56:08that you and your wife have discussed,
01:56:09okay, what are we gonna do
01:56:10when kind of the golden era's over of the kids,
01:56:13and now we've got the next thing,
01:56:14and we're gonna, maybe it'd be a lake,
01:56:15or maybe it'd be whatever.
01:56:16And okay, well, if you, at 60, 65,
01:56:22are, we're gonna downsize, we don't need the big house,
01:56:25all of the kids are grown,
01:56:26and it looks like none of them are coming back,
01:56:29which, hooray, we did a good job.
01:56:31Let's sell the house.
01:56:32How much money are we gonna get out of the house?
01:56:33Well, that's a few hundred grand, or maybe more.
01:56:35Wouldn't that be wonderful?
01:56:36And I listened to that Morgan guy,
01:56:39and I listened to that Bill guy,
01:56:40and I think we should give it to the kids
01:56:43in their late 20s, early 30s, and then they can do it.
01:56:45You go, well, the number's gonna go down,
01:56:47and the house is gonna go down,
01:56:48and we'll have to downsize a few things,
01:56:50but look at what we got out of it.
01:56:52Like, you know, what a wonderful way to trade money.
01:56:57- For a better life for my family.
01:56:58- For the people that you were doing it for all along.
01:57:00- No, I think in a very broken way, it's well-intentioned,
01:57:03but it's, I think, a very wrong way,
01:57:06is that what's holding a lot of parents back from doing that
01:57:08is, well, I had to work when I was 30.
01:57:12I worked my ass off and bought my own house.
01:57:13- This odd reverse.
01:57:14- This kid has to do it too.
01:57:15- It's reverse intergenerational
01:57:16transportation theory. - And here's why I think,
01:57:17here's why I think that's wrong.
01:57:18You baby boomer parent who thinks that you built all this,
01:57:21you live a life that makes you look like a spoiled
01:57:24little bitch in the eyes of your grandparents.
01:57:27You have antibiotics, you have air conditioning,
01:57:29you have jet travel.
01:57:31If your grandparents could see how you lived,
01:57:33you'd say, you spoil, you don't have to,
01:57:35you think you know hard work?
01:57:36I used to work in a coal mine.
01:57:38You think you worked hard?
01:57:39I think the goal of every generation
01:57:41should be to create kids and grandkids
01:57:44who appear by the standards of a previous generation
01:57:47to be spoiled.
01:57:48That's the goal.
01:57:49And so the idea of using your money
01:57:52to give your kids a benefit so that they appear spoiled
01:57:55by your generation's terms,
01:57:57I'm kind of like, that's the goal, right?
01:57:59Isn't that the way to do it? - That's pretty cool.
01:58:00- I remember having this conversation recently
01:58:01of a guy who, his parents were immigrants,
01:58:04worked their absolute asses off
01:58:06to support him and his siblings.
01:58:08And now he himself is pretty successful.
01:58:10And he's like, I feel guilty
01:58:12that I didn't have to work as hard as my parents.
01:58:15And I said, look, I bet if we could talk
01:58:17to your parents right now,
01:58:18they would say that was the goal.
01:58:20The reason they worked their asses off
01:58:22is so that you would not have to.
01:58:24That's the goal.
01:58:25And so don't feel guilty.
01:58:26This is what it was supposed to happen.
01:58:27- Dude, I feel the exact same about living in the US.
01:58:30I'm an only child.
01:58:31My mom and dad only have me.
01:58:33I'm their sole progeny.
01:58:34And I decided to fuck off to the other side of the Atlantic.
01:58:37And anytime that I think about it,
01:58:39I think, well, why do you think that they encouraged you
01:58:43to work hard and get a university degree?
01:58:44- 'Cause they wanted you to be who you are today.
01:58:46- Because it means that I get to go and do the thing
01:58:48that I want.
01:58:49- I think it was Steve Harvey.
01:58:49I think it was he said this.
01:58:50I don't know if it was his quote
01:58:51or if I just heard him say this from someone else.
01:58:53He said that, I think it was at his father's funeral,
01:58:56someone told him,
01:58:57"Your dad was the only man in the world
01:59:02"who wants you to exceed him."
01:59:04- What a wonderful--
01:59:06- "The only man in the world
01:59:07"who wants you to do better than him."
01:59:10And I think that's by and large true.
01:59:11When most particularly men look at each other, I want--
01:59:14- Even your brother.
01:59:15- Yes, I want you to be successful.
01:59:15- Especially your brother.
01:59:16- Especially your brother, I want you to be successful.
01:59:19- But not more successful.
01:59:19- Not more than I am.
01:59:20The only person who doesn't believe that's your dad.
01:59:22I want you to be more successful than I am.
01:59:24And so tying this all together,
01:59:25if you can use your money and supercharge that at age 30,
01:59:29do it.
01:59:30That was the shift that I had from Bill's book.
01:59:34- Morgan, you're the GOAT, dude.
01:59:35Episode eight or nine or whatever this is,
01:59:37you're so fantastic.
01:59:38- Let's do it again, can't wait.
01:59:39- I can't wait.
01:59:40What have you got out?
01:59:42Where should people go to get all of the things that you do?
01:59:44- You know, the three books I've written,
01:59:45Psychology of Money, Same as Ever,
01:59:46The Art of Spending Money, every half decent thought
01:59:49that's ever entered my head about money
01:59:50is in those three books.
01:59:52- Unreal, I appreciate you, man.
01:59:53Until next time. - Thanks, Chris.
01:59:54Thank you.
01:59:55- Thank you very much for tuning in.
01:59:57Congratulations for making it to the end
01:59:59of an entire episode.
02:00:00Another one that I think you'll enjoy is right here.