The Savings Expert: “Do Not Buy A House!” Do THIS Instead! - Morgan Housel | Transcription

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Introduction

Intro (00:00)

If you're buying a house because you ****** don't do it, run for your life. Mr. Morgan Housel. He's the author of The Psychology of Money, one of the best-selling business books of this decade. He can help anyone build wealth and change their life. The world is split between people who don't know how to start making money and people who don't know when to stop making money. And if you are stuck in a low-income job, you feel like you don't have the opportunity to generate wealth. But once you realize that opportunities are available for everybody, you can choose where you want to live, what job you want, when you retire, because you can be rich. Prove it. People like Ronald Reed, and he was a janitor. What does it take to amass Mr. Reed's $8 million fortune? He's a fascinating story of somebody who became rich despite not having the skills that you normally associated with wealthy people. Then there's Warren Buffett. He's worth $100 billion. But the real secret to their success? Investing. My parents are a great example of this. We were very poor, no financial background. And they have minimal financial interest, but now they probably be in the top 3% of professional investors. If you want to do well with money, you don't need to be a genius. If you have endurance in your investing, you're going to be filthy rich. But when most people say, "I want to be a millionaire," what they actually mean is, "I want to spend a million dollars. I want some nice clothes, a bigger house, the nicer car." Ask yourself, what is your relationship with money? If your expectations rise faster than your income, you're never going to be happy with your money. That's the problem. So if I have a hundred pounds, what's the first thing that I should do? I keep it as painfully simple as I can. So... Ladies and gentlemen, you're about to meet the man whose book changed my entire life as it relates to money and finance. About four or five years ago, my brother who's an investment banker said, "Steve, there's one book I need you to read about wealth, investing, and money and finance." And he passed me a book called The Psychology of Money. That book changed my fortunes. It is the reason I've been a successful investor and it's the reason I've been able to hold on to my wealth and build it. It's this man. And that's the reason why you need to stay tuned and listen to this episode. Morgan, you wrote what I would consider to be the greatest book on money and finance ever written. I say that because I remember when I came into money when I was 25, 20, no 27, 28 years old, and my brother turned to me and said, "There's one thing I ask of you."

Understanding Money And Wealth

Why Do You Write Books About Money? (02:23)

He said, "You have to read this book called The Psychology of Money. It will stop you losing all of the money you've just earned from your career." And it changed my life. I've talked about it for years and years ever since. And that's why I was so keen to have this conversation with you because I really believe if people choose to listen to this conversation, it stands the chance of changing those too. So let's begin. Why? Of all the things that you could do with your life, Morgan, why are you writing books about the subject matter that you explore? What is the reason? Well, first, that's a big statement. That's a lot to live up to. It's kind of scary to hear that because I've often been, and this gets to the why. I've defined it as selfish writing, where I write for an audience of one and that is me. And I like to think of myself as a pretty selfless person, but for writing, I don't try to say, "I'm going to write a book for this person or that person or that audience." I write what I'm interested in and I write it in a way that I think is interesting. And I try to solve my own problems. And then I take a leap of faith that if this is interesting to me and it's going to help me, maybe it'll help somebody else. That's very different from the traditional writing style of saying, "Know your audience." Know your audience very quickly turns into pander to your audience. And I think a lot of people, maybe they don't even know it, but if they read a book and they don't necessarily like it, it's because they were being pandered to. They were being spoken to in a way that a person would never speak to them in real life. So this is almost like my diary, I think. These are those topics that I found interesting for myself. And so I guess that's the why. I feel like I've really found myself in a career where I can just figure out my own problems and try to figure out what I think and what's interesting to me, and then kind of put it out to the world and then hope that other people will enjoy it. - Let's start with the psychology of money.

The Psychology of Money & What Wealth Really Means (04:14)

What is the benefit to my life if I understand the things that are written in the psychology of money? - Well, let me start with, I think most finance books will, their answer to that question would be, when you're done with this book, you will know how to pick stocks better. You will know how to balance your checking account or what credit cards that you should use. For my book, I think when you're done with it, I hope that you will just look in the mirror and say, "Who am I?" Which is kind of what I did with this, trying to figure out who I am and what I want and why I was insecure, why I wanted to show off to other people the car that I drove. So if you'll become more introspective about who you are and what you want out of life and what money can do for you and cannot do for you, and become a little bit more introspective about why you think about where you are in the social hierarchy and greed and fear and why you think about these things that you do. I honestly think that, I hope at least, because it was this way for me, that when you're done with the book, that's kind of when the learning begins. Because maybe this will just spark a bit of curiosity for you to then go for a walk and think about what you want out of life and whatnot. So I think that most books, when you're done with the last page, the learning is done. This, I hope, is just spark something in you that will get you to think more clearly about what you want with money and what money can and cannot do for you. - Part of that journey of understanding what you want helps you to define the word on the front of this book, wealth. - What is your definition of wealth? - Well, I made up these definitions in the book. So these are just my things that I made up. But I defined rich as you have enough money to buy what you want, to pay for your mortgage, to make your car payment, to go out to dinner with your friends. You have money in the bank. Wealth, I think, is very different. Wealth is money that you did not spend and maybe you will not spend. So wealth is hidden. It's the money that you didn't spend on a car. It's the money that you didn't spend on a big house. You didn't spend on jewelry. And that's really important because wealth that's saved up, the unspent money, is what gives you independence and autonomy and just the ability to wake up every morning and do whatever you want with your life. And so I think separating that is really important because when most people say, "I want to be a millionaire," what they actually mean is, "I want to spend a million dollars." That's what they mean. And when I think about being a millionaire, I think it's you have a million dollars that you're not going to spend. And that because you're not going to spend it, you have this giant cushion that will give you independence and autonomy. And so you can wake up tomorrow and say, "I can do whatever the hell I want today. I can work for who I want. I can work for as long as I want. I can retire when I want." The world is yours. Like every bit of savings that you have is a piece of your future that you own. You're just buying your time in the future so that it's yours and you can do whatever you want with it. And that to me has always been the goal. There's a quote from Charlie Munger where he says, "I never wanted to become rich. I just wanted to become independent." And that was the first time I read it, it was like, "That's me too. That's what I want. I don't want a Lamborghini. I don't want a mansion and a yacht. I want to wake up every morning and to say, 'Whatever I want to do today, it's mine. Nobody's going to tell me where to work, when to work, what to do. It's all me.'" And to me, for not just work, but for your family life, for your health, for your mental sanity, there's nothing more important than that. It sounds like you're talking about your father. My dad, he has such an interesting background. My mother too, their background is so crazy. And I didn't realize how crazy it was until I was an adult. The early part of my childhood, when my parents were in school, we were very poor. My parents were students living off of student loans and grants. We had no money. And then my dad became a doctor when I was 12 or 13 and things changed. It wasn't, we were not rich, but things got very comfortable. And what was really important is that the frugality that my parents had to have when they were poor stuck with them, even after they started making a little bit of money. They didn't buy a Lamborghini. No, no. We grew up in a very modest house. It was a nice house and we took some decent family vacations, but we always lived well below our means, way below our means. Did that confuse you? Because you must have known that your dad had the money. Yes. Particularly when I was probably like 16, 17 and I could learn how much does a doctor make. You can go look it up and figure it out. And then it was like, I definitely looked down on my parents at that age because I was like, I know you can afford a better car. I know you can buy me better Christmas presents. I know we can afford a bigger house and you're not doing it because you're mean. I think that was my view. And then it really clicked about 10 years ago. This is not that long ago. So my dad is an ER doctor, which is one of the most stressful jobs that you can imagine. It's literally people dying in your arms every day. And he did this for 20 years. And after 20 years of doing this, night shifts, children dying in your arms, literally every week, he said he had had enough. It was a lot. He put in his dues. He did it for 20 years and he said, I'm done. I'm going to retire. And the reason he could do that is because he had saved up so much money. He was living well below his means. They had a very high savings rate. The moment he woke up and said, I want to be done, he was done. That was it. And if you contrast that with so many other people, including some of his colleagues who were also burnt out at age 60, who were also burnt out by having people die in their arms for 20 years, they wanted to retire and they couldn't because they had the bigger house, because they had the nicer car that I thought that we should have had when we were growing up. And when they quit and moved on to their next phase of life, they got so much happier. And so it was like, so that this was 10 years ago, I was in, you know, in my late 20s at this point, I was like, now I get it. He was frugal. He saved a lot and that made him independent. And the independence made him happier than any car would have done, made him happier than any big house would have done. So it's like, I think that is one of the keys to happiness. Happiness is like the most complicated topic you can imagine. But one of the big puzzle pieces is independence. And there's been a lot of work on this, studies on this of like, one of the things that makes people really happy in life is having control over what they're doing. And it's more so the flip side of that. It's like what makes people very unhappy in life, not having control over what happens in their future, not having control over their schedule, where they're going to work, whether they're going to get laid off. Having that uncertainty is a massive anchor and weight on your life. I'm not a few health. Absolutely. I mean, that was a big thing for my dad, too. He's working night shifts for 20 years with this. It's very bad for your health. It's not great at all. So the ability, the financial ability to just wake up one day and say, I'm done, done with that is huge. I was reading studies about this idea of autonomy because I was trying to figure out what you have to have professionally to love your work.

Why Not Having Control in Your Life Is Making You Unhealthy and Unhappy (10:53)

And I came up with these five different points. One of them was autonomy and control. And I came up with that because I read studies where people who work jobs where they had low autonomy and control had physiological consequences. They were more likely to get disease. They experienced stress significantly more, more likely to have cardiovascular problems and heart disease, which is the single biggest killer of people generally. I thought, fuck it, I'm just not having control in your life. Makes your body shut down. Yes. No, this is something that I think everybody has experienced. If they have something really stressful going on at life, they get into bed, they're tired. You can feel your heart pounding. Like the physiological response of stress is huge. It's massive. And if you have that going on every day for five years, 10 years, 20 years, 30 years, forget about it. Forget about it. There's this great quote from John D. Rockefeller. He's the richest man in the world and he lived till I think he was 99, something like that. He was 97. And his doctor talked about why like his key to longevity. And the doctor said, quote, he never lets anything bother him. He spends plenty of time outside and he leaves the table when he's still a little bit hungry. That was his key to longevity. It was just and when you read his biography, you realize how true that was. No matter what was going on in his life and the most stressful business conditions you can imagine, none of it ever bothered him. He just had ice in his veins and he could just keep going. And so I do think that's definitely one of the keys to physical health is lowering that amount of stress. And there are not many other things in life that are going to increase the stress that you have than not having control over what you're doing in life. Freedom. Chapter seven of your book. This is the broadest lifestyle variable that makes people happy. Doing something you love but on a schedule you can't control starts to feel the same as doing something you hate. Psychologists call this reactance. That's right. I do think there are a lot of, I think the best example are CEOs who might make $30 million a year, $50 million a year, but they have no control over their time. Every single second of their day is planned and demanded by somebody else and they have to do things that they don't want to do. If they wake up and they're tired, too bad. You got to go to your meetings today. They wake up and they're exhausted, too bad. You have to travel to China to close this deal. They have no control over their time. And compare that to someone who makes much less, but they can wake up and do whatever they want, whatever they want to do. You want to hang out with your friends? You want to sleep in? You want to take a nap at two o'clock? Whatever you want to do. The person who I think really sticks out in that vein is Warren Buffett, who is the CEO who makes a zillion dollars a year. He's worth $100 billion. But if you dig into how he's structured his day, total control, 100% autonomy. He can do whatever the hell he wants all day long. What he wants to do is get up and go to work. But he has delegated things so effectively that he can do whatever he wants. And that's not only the key to his, I think, business success, but his health lifestyle success and why he's 93 and still going as strong as ever. I was thinking about my calendar when you were talking about the CEO that makes $30 million a year, but is just dragged around by his schedule. Sounds a lot like me, to be honest. I feel like the more successful I've got in my professional career, the more my calendar, the minute I wake up in the morning, I'm just like a puppet master to these little boxes on my Google calendar.

Why You Need to Learn to Stop Pushing Your Financial Goals (14:05)

They drag me around the world and there's very little. I actually said to my assistant about a month ago, I was like, Sophie, please can you do me a favour? Could you just put lunch in for 30 minutes because I'm not eating? Could you just put that in midday every day at the same time so you can breathe? So I can have a little bit of a moment where I do nothing. And then also the other thing I've put in now, I have a personal trainer seven days a week and I've just put that in my calendar. It was before then a residual beneficiary as was everything for me. Well, not for me because my work is for me, but it got the time that was left over when all my priorities were done. And I do reflect on that and go like, how, like, A, when does that stop? Because it's clearly not going to stop when I make money because I have the money. And B, how much control do I actually have? And you know what I do sometimes, I think I've noticed this about myself. I think sometimes I cancel things just to prove to myself that I still have control. See, that's great. That's a good thing. There's a quote from Naseen Taleb where he says, like, you are wealthy when the money that you deny tastes better than the money you accept. So you get someone comes to you with a business deal and you say, no thanks, I don't want it. When that tastes better to you than accepting the deal, it feels better to you. That's like one definition of rich. There's another great quote from Taleb where he says, the world is split evenly between people who don't know how to start making money and people who don't know when to stop making money. And I think there are a lot of people that are watching this that are in kind of our field who are easily in the latter. They have all the money that they could ever want to spend or maybe not that much, but they have more money than they ever thought they would have. But for every goal that they hit, whenever my net worth is X, all my problems are going to go away. Everything's going to feel great. And then they hit X and they just keep moving the goalposts down and down. So in the book, the hardest financial skill is getting the goalposts to stop moving. It's the hardest thing in the world. It's hard for everybody because virtually everybody thinks if my net worth or my income was this level, I'll be fine. I'll feel great. No more problems. I'll wake up every morning with a smile on my face. And then if you're lucky enough or you work hard enough to get there, you realize that's not the case at all. You're just going to keep pushing it, keep pushing it, keep pushing it forever. Have they done studies to test that in terms of analyzing whether people's goalposts move off into the future, even when they're like billionaires and whatever? I mean, here's the broadest way that I would frame this up that has been studied. If you look at America today, the average household adjusted for inflation is making twice as much money than they were in the 1950s. Adjusted for inflation, the average household doubled the income that they were back then. And we're less happy. The statistics that try to measure happiness over time, not an easy thing to do, but we're less happy today than we were back then. And this is why, like, look, can money buy happiness? Yes. And to some extent, does it? Yes. Like people who are in abject poverty are not as happy as people who are covering the basics and they have food and shelter, et cetera, et cetera. But over time, when the society is getting richer and you're comparing yourself to other people and maybe the average American's income doubled, but so did their neighbors, so did their coworkers, so did their siblings, so you just automatically adjust to that. I talked about Rockefeller before, John D. Rockefeller, who died in, I think, the 1930s. He was worth, adjusted for inflation, almost half a trillion dollars during his day, adjusted for inflation. But he never had during his life penicillin, Advil, sunscreen, polio vaccine, keep going down the list of things that virtually everyone can take advantage of today that he never had. But you can't say that the average American is living better than Rockefeller today because we have all of these technologies that he never did, because we just look at what other people have and assume that that is the baseline. So you can imagine a world in which my kids, my grandkids are earning twice as much as me, adjusted for inflation, and they're no happier for it because the new technologies, whatever it will be, that would seem like magic to you and I will just become their baseline. And that's always been the case. If there was, if Thomas Jefferson or somebody came to the year 2023, he would faint at the new technologies and the medical discoveries that we have. And these are technologies that you and I don't spend one second being grateful for because we've just accepted them as a new baseline.

The First and Most Important Rule of Happiness (18:20)

It reminds me of something in your new book, which is out in November, which is, you know, I've gassed up a lot of books on this podcast before, but this is one of my favourite of all time. It's just so easy to read and so engaging because you're one of those authors in this book that realises the world that the reader's living in and they are busy and they want the point and they want you to, you know, give them not one word more than you need to. It is so brilliant. It's so brilliant. In this book, you talk about exactly that. You say the first rule of happiness is low expectations. Yeah. And that's exactly what you're talking about is comparison is the thief of joy because it just raises our own expectations, right? When with that out the window goes our happiness. Yeah. And it seems counterintuitive to people that if you want to be happy, for most people, it's if you want to be happier, you need to be ambitious, you need more, you need to make more money, work harder, have a more successful startup, whatever it would be. And there's that's true, but that's half the equation. The other half the equation is keep your expectations low. So the gap between those two, it's a gap between those two that actually accrues to happiness over time. How did you learn that? I think it's just, I think there've been a couple of little stories that really stuck out to me. One that I love that just knocked me on my ass the first time I read it was Stephen Hawking, the late physicist who was without exaggeration, one of the smartest people to ever walk this planet. He was just an absolute genius. And a quirky, of course, is that he had a motor neuron disease and he was paralyzed from head to toe. He had no control over his body. He spoke through a computer, not a single muscle in his body could he actually control by himself. So he was, you know, physiologically, it's one of the worst lives that you can imagine. And he did an interview with the New York Times a couple of years before he died. And during the interview, he's talking about how happy he was and how amazing his life was. And the New York Times said, they asked him, they said, what is your secret to happiness? Like, if there's anyone who has the right to complain about life, it's that guy. And he's talking about how happy it was. And he said, my expectations were reduced to zero when I was 21, which is when he got his disease. And he said, everything else since then has been a bonus. So this is like the guy who his life is like, has ended up in a way that most people watching that would say, like, that's among the worst scenarios you can imagine. And he's probably happier than you and I because his expectations were so low that just waking up in the morning and seeing the sunrise and getting to go to work and talk to people was this magical gift. I mean, you can imagine, not to get too morbid about this, but imagine you're on your deathbed and the doctor is very confident that you're going to die tomorrow. And let's say that you make it one more day. What is that sunrise going to feel like? What's that, you know, holding your wife's hand for one more day going to feel like? It'd be amazing just because your expectations were on the floor. And so it's always like that. And you go through life seeing so many people who have everything, all the money, the great family, all the health, the beauty, everything you can imagine, and they're not happy for it. And it's because with everything that they have, their expectations rise not only to that level, they might rise above it. So if your expectations rise faster than your income, you're never going to be happy with your money. No matter how much money you make, you can make a billion dollars a year, but if you needed and wanted 1.1 billion, you're broke. You feel broke. And the reverse of that is true too. There are people who make $50,000 a year, but if they only need 40 to be happy, they're stoked. They feel great. And so that's, I think that's one of the reasons so important is because managing your own expectations is more in your control than managing your circumstances in terms of raising your income, raising your investing returns. It's not that you can't control raising your income. You can be ambitious and smart and entrepreneurial, of course, but it's more in your control just inside your head to say, "I'm going to try to want less." That's just a mental exercise. That's not to say it's easy. It's not easy at all, but you have total control over doing it.

The Most Valuable Financial Skill Anyone Can Have (22:16)

So how, in a practical sense, can one go about keeping their expectations below their circumstances, I guess? Here's one that really made an impact on me. It's great that we're in LA because that's where this story took place. I was a valet here in LA all throughout college at a five-star hotel here in town. So, A, I was young, I was, you know, age 19 to 24 or something like that. And all day, it was people driving in Ferraris and Lamborghinis and Rolls Royces. And one day it hit me. Just, I remember the moment because it was like out of the blue, it hit me. Whenever someone would drive in in a Rolls Royce or something, never once would I look at the driver and say, "That guy's cool." Like, "Wow, look at him. He's so cool." What I did is I imagined myself as the driver. And then I thought if I was a driver, people would think I'm cool. And it was like, "Wait, don't you see like the disconnect here?" Nobody cares about the driver, but they want to be the driver because they think people will then care about them. And once you realize that, like the takeaway is nobody is thinking about you as much as you are. Nobody cares about your stuff as much as you do. Nobody cares about your car or your house or your clothes or your jewelry as much as you do. Because to the extent that they're even looking at them, they're looking at your car, looking at your house, really what they're doing is imagining themselves with that nice car. They're not giving you the credit. They're imagining themselves having it. So once I realized that was the game that was being played in society, once you recognize that's the game, your willingness, your desire to show off plunges. And of course, I like nice stuff. I like nice cars. I want some nice clothes. I live in a decent house. But once you realize that, it plunges. And I think the most valuable financial skill that anybody can have is not needing to impress other people. If you don't need to impress other people, that is an asset on your balance sheet that is worth a billion dollars. Because so much of society as a whole and individual is just geared towards how can I get other people's attention? How can I show off to other people? How can they like me more? I both agree and understand, but agreeing and understanding is different from being able to do. I think at the society level, it will never be. It'll always be like that. Same as ever. It's never going to move away from that. If you can manage it around the edges at the individual level, it's massive for your life. One thing that's important here is that if you are a young person and you're kind of looking for a spouse, a boyfriend, a girlfriend, a wife, a husband, whatever it would be, then your ability to look really nice and to signal and to kind of put up your peacock feathers is important. And I get it. And I did it back in the day. Once you are more settled down in your career, in your relationships, if at that point you are still hanging on to the desire to impress other people. That's when it's broken. That's when it's just pure net loss in your life because you're trying to show off for people who you don't even need or want to love you. There's a great quote from Warren Buffett where he says, "The definition of success is when the people who you want to love you do love you." And so for me, it's like five people. It's like my parents, my wife, and my kids. And that's it. That's it. Those are the people who I want to love me. And if they love me, I probably have 90% of the happiness that I'm capable of. And if they don't love me, then I'm never going to have more than like 10% of the happiness that I'm capable of. - In that chapter about happiness, you talk about your friend Brent as well in his theory on marriage.

The Most Important Saying for a Relationship or Career (25:35)

- Yeah, my friend Brent B. Short has this great theory on marriage where he says, "Marriage only works if both partners want to serve the other partner and expect nothing in return." So you wake up every morning, you say, "I want to serve my spouse, but I expect nothing in return from them." And if you both do that simultaneously, you're both pleasantly surprised. Because what happens is I didn't expect you to do anything for me, but you did and vice versa. And both of you just wake up every morning, you're like, "You did that for me. You helped me out here. You're empathetic to me there." And it feels great. - You exceeded my expectations. - You exceeded my expectations. And I think what breaks down any marriage or career or whatever it would be is when you become needy. Like nothing breaks love more than being needy. And really what needy is, is just your expectations are so high that you wake up and you say, "I expect you to do this for me. I expect you to help me. I expect you to serve me." That's just like massively high expectations that you have in that relationship. - It's also like expecting an external factor, in that case, your partner, to validate you in some way or to... And that kind of goes back to your point about money where in order to stop showing off and focusing on those five people that we want to love ourselves, we need to understand and ideally solve our often toxic relationship with our need for validation. And that, I guess, brings me to the first chapter in your book where you talk about the stories of money that we have and where they've come from. And something that's always baffled me is when you go into low-income areas, there's more gambling shops. And I can attest to it. When I was 18, 19 years old and I'm shoplifting pizzas to feed myself and I'm doing all sorts of stuff. When I got my student loan in, I was in university for one day and they gave me the first payment of my student loan. I don't think I've ever said this before. I put the entirety of the payment on a bet and I lost it in the sixth in the injury time of that football match. I don't bet. - And did you need that money for tuition? - Fuck yes. - I was then gone. - I needed it to eat. - Yeah. - I wasn't speaking... I had no money. I didn't come from money. My parents... I'd gone to university with 50 quid and I got this like £1000 sent to me from student loan, whatever.

Why Low Income People Are More Reckless With Money (27:48)

I was so reckless with money when I didn't have money. The minute I got money, it's like everything just chilled the fuck out and I became really long-term, patient. I made really responsible decisions. I stopped buying flashy things. I like don't even own a TV now. - I'm very similar. I feel like the more money I have, the less my material desires are. For sure. For sure. When I say that out loud, I'm like, "Oh, absolutely." - Why is that? That when we have less, we are reckless with our money? - Well, I think there's two sides to this. One of my theories is that what everyone wants in the world is respect and admiration from other people. And there's kind of two ways to get that. You can get your respect and admiration through your wisdom, through your love, through your humor. Or if you don't have that to offer to the world, you're going to get it through your material possessions. So if you can gain respect and admiration through your business success, your wisdom, your love, your friendship, great. Then you're going to get it and you're going to fulfill that bucket. If you can't get it from those things, then you're like, "Well, might as well show off my car. It's all I got to do. That's all I have." I think that's one side of it. So as you become more successful, your desire to show off diminishes because you're gaining respect and admiration through other things that are not material. The other side of this that's so important is that I saw this statistic years ago that the poorest of 10% of Americans buy like 80% of the lottery tickets in America. And these are people who can barely feed themselves. Lowest 10%. They're literally struggling to put a roof over their head and feed themselves are going out hand over fist buying scratcher tickets. And the knee-jerk reaction when you hear that is, "Morons, what are you doing, you idiot?" And maybe that is the right reaction. But I started thinking about it and I was like, "Okay, maybe if you try to put yourself in those people's shoes, maybe they would say something like this." If you are stuck in a low-income job and you feel like there's no way out, you feel like you don't have the opportunity to work your way up the ladder, become an entrepreneur, you feel like you're stuck in this position. Buying a lottery ticket might be the only thing in life that gives you a little bit of hope. It might be what feels like literally your only ticket to get out. And that might be not something that you and I feel like because we have, we at least feel like we might have other opportunities. - You're so right because when I gambled, what I then did the same day before the result of my bet or my lottery ticket came in, and I said this to my team the other day, is I would go on Rightmove and like AutoTrader and look at stuff that I would buy if I won. - Yeah, yeah. I think there's a sense too that if you are stuck in a lower spot in life, if you have a feeling that the world is unfair, and very often it is, so maybe that might be the right mindset, but if you feel the world is unfair, then it's very natural to think I might as well cheat too. If the world's unfair, why not? Might as well cheat. And I think that at least at some level has some explanation for the relationship between poverty and crime. - That word hope is so true. - I think it's true too. - It gives you just a glimpse of hope because it gives you even if it's a 0.00001% chance. - If it's the only thing in your day that made you smile a little bit, made you feel like you had a little bit of hope, then I get why they do it. - Yeah. - The other reason, the other thing I think a lot about here is that if you are in a low income job and you're working graveyard shifts and you're exhausted and you're taking three buses to get your kids to school, if the only thing that day that gives you a little bit of pleasure is a cigarette and some alcohol, I get it. I totally get it. And that's also the relationship between health and poverty is a lot of that too. So it's very easy for people who are of higher means to look down at those people and point out all the bad decisions that they're doing in life. But I think you underestimate how much the desire to just have a little bit of hope, a little bit of pleasure. And if those feel like your only avenues for hope and pleasure, maybe that's the explanation for at least part of it. - Quick one. This is really, really fascinating to me. On the back end of our YouTube channel, it says that 69.9% of you that watch this channel frequently over the lifetime of this channel haven't yet hit the subscribe button. I just wanted to ask you a favour. It helps this channel so much if you choose to subscribe. Helps us scale the guests, helps us scale the production and it makes the show bigger. So if I could ask you for one favour, if you've watched the show before and you've enjoyed it and you like this episode that you're currently watching, could you please hit the subscribe button? Thank you so much. And I will repay that gesture by making sure that everything we do here gets better and better and better and better. That is a promise I'm willing to make you. Do we have a deal? - Let's speak then to 18 year old Steve that was in that little room with a stack of these, what they call county court judgements and bailiffs and stuff, stack of letters on his desk. What advice, based on all you know about money and finance, can you give to somebody who is maybe making $1,000, $2,000 a month, covers their rent just about, doesn't have a lot of money left over.

How to Learn to Finally Save Your Money (32:17)

What is the best way to go from that position to a position of wealth in your view? - I think one of the best ways to think about it at the lower levels, and I explained a little bit of this earlier, but to dig into it is a lot of what's probably giving you stress in life is that you don't have control over what you're doing. And if you view every dollar of savings that you have as a bit of your future that you own and control, then I think that mindset can shift pretty dramatically. And it's like, that's the ticket out. The ticket out is not a nicer car. It's not a bigger house. It's not better close. The ticket out is independence. That's what's going to give you the better career. So it's going to make you happier. It's what's going to make you healthier. And the only thing that's going to give you independence is having enough money saved up so that you can choose where you want to live, maybe even what job you want. You can choose at some point down the road when you retire. If you get sick, it's not just going to break you immediately. Having that independence is going to take more weight off your shoulders than anything else you can do in life. - Save money. - That's it. That's the title of that chapter in the book is save money because you can't put it any clearer or starker. Like that's it. - He says there are three types of people, those who save, those who don't think they can save, and those who don't think they need to save. - Yep. - Three types of people, which one are you? Those who save, those who don't think they can save, and those who don't think they need to save. I tell you what, I've been all three of my life. - That's interesting. I've always been a saver. - No, I haven't. - And see that, I think that's actually very rare that you change who you are. - Really? - On the nature-nurture spectrum, I actually think, and this is kind of disappointing to talk about, it's not fun to talk about, but on the nature-nurture spectrum, I think a lot of money is nature. Warren Buffett talks about the people who have the money mind, which means like either they get it or they don't. And if they get it, they get it instantly. And if they don't, they'll get it never at all. I actually don't believe in it. It's that black and white. Charlie Munger explains it like that. He says, "When explaining financial matters to young people, they either get it instantly or never at all." And he's putting that too starkly, I think. I don't think it's that black and white. But on the nature-nurture spectrum, is it 80/20? Is it 70/30? I think it's probably something in that range. - So let me give you a counter-argument to that then. So as I said, I've been someone that didn't think he could save because I didn't have money and I just thought, "Oh, but I could have saved him." Looking back now, I know I could have saved. I could have saved a small amount, but I didn't see the value in saving small numbers. I didn't understand the laws of compounding returns, which we'll definitely talk about. I have also been the person that saves. And I've also been the person who thought they didn't need to save. I've been all three. My counterpoint to this goes back to a story that I read from your early years where two of your friends died on a ski trip. And it also links to something you've said in your new book, Same as Ever, where you speak about how sometimes in life, hitting rock bottom is the greatest incentive to change our lives. So I put those two things together and go, "That moment when two of your friends died on a ski trip that you were on when you were younger, it had an impact on your risk appetite and your attitude towards money." What happened? - So I grew up skiing in Lake Tahoe, California, and I was a competitive ski racer. So all throughout my childhood and teenage years, I skied six days a week, 10 months a year, all over the world. And it was great. There were about 12 of us on the Squaw Valley Ski Team.

A Tragic Incident That Taught Me My Most Valuable Lesson About Money (35:55)

We had grown up together and we'd spent our entire lives together. And when I was 17, this was in 2001, I was skiing with two of my best friends, Brendan Allen and Brian Richmond. And we would ski out of bounds, which is illegal. You're not supposed to do it. We would duck under the rope that says, "Do not cross." And we'd ski out of bounds because that's where a lot of the good skiing is. And when we would do this, it would spit us out on this back country road where we'd have to hitchhike back. There's no chairlift when you ski out of bounds. You have to hitchhike your way back. So we did it one morning in February, 2001. The three of us did it. And when we did it, we triggered a very small avalanche. And I remembered it so clearly. I can still feel it 21 year, 22 years later. I can still feel what it's like. It's the weirdest sensation that I've had in my life. Because when you get hit by an avalanche, rather than pushing on the snow to gain traction with your skis, the ground is pushing you. So all of a sudden, you're skiing along and you got control and all of a sudden, boom, you have no control anymore. The ground is pushing you around. Probably similar to what it feels like if you're standing on the ground during an earthquake. The ground's pushing you. But it was a pretty small avalanche. Maybe came up to our knees, ended pretty quickly. And we literally high fived about it at the bottom and went about our day. We get back around to the base lodge. We hitchhiked back. And Brendan and Brian said they wanted to do it again. They wanted to ski again. And I said, "Hey, for whatever reason, I just didn't want to do it." So I said, "Hey, rather than hitchhiking back, why don't you guys go do it again? And I'll drive my truck around and pick you up." So we said, "Great." We made our plans, went our separate ways. They went skiing. I went back around to take my boots off and jump in my truck and go pick them up. 20, 30 minutes later, I go to pick them up at the pickup spot and they weren't there. And I knew it only took us a minute to ski down the hill. So 20 minutes later, I knew they weren't coming. I was not worried. I figured that they had already hitchhiked home. So after waiting for another 20 or 30 minutes, I just left and went back to the lodge. I expected them to be there and they weren't. And I still didn't really worry. We didn't have cell phones back then. And people were just comfortable being out of touch. If you didn't know where your buddy was, it wasn't that big a deal. So we went about the day. I started worrying a little bit. I remember I stopped at Brendan's house, inspected him to be there and he wasn't there either. And I remember calling and leaving a message on his voicemail. And I remember ending the voicemail by saying, "I hope you're okay, man." Those are my last words. I remember that very clearly. The day went on. And I think at about four or five o'clock, Brian's mom called me and she said, "Brian never showed up for work today. Do you know where he is?" And I told her what happened? I said, "We skied the backside of Squaw where we'd hitchhiked back. I was going to pick them up, but they never showed up. And I haven't seen them since." And I also remember so clearly Brian's mom saying, "Oh my God," and hanging up the phone. And that was so like... So then we started getting worried. We called the police. The police didn't take it very seriously because they thought, "Ah, they're out at a party." They ran off with a girl for the night. They weren't worried. But we finally got search and rescue involved. And rescuers with probe poles frowned, Brendan and Brian, buried under six feet of snow. And they had been killed from a massive avalanche. And so look, I think virtually everyone listening to this, I'm sure you too have lost somebody close to you, somebody that you love. So I know the experience was not unique in that way, but it was the first time that I had experienced loss. And it was the first bad thing that had ever happened to me in my life. So it had a big impact on me. And there were a lot of takeaways. I think at the time, I didn't have the cognitive tools to piece together what happened or to learn about what happened, have any sort of takeaways. But as I got older and thought about it, and looking back, I put together all these realizations of what that did to me, how it changed me, and what were some of the lessons from it too. One that I talk about in the book that I think about all the time is my decision to not go with them on a second run was this completely brainless decision. I put no thought into that decision. It was not a cost benefit analysis. I didn't think through it, but it's the most important decision I've ever made in my life. A hundred percent chance if I was with them, I would have died. And I had skied literally thousands of runs with Brendan and Brian. How many times did I deny a second run with them or say, "You guys keep going. I'm going to go in." Almost never. The one time I did it saved my entire life. And so you really realize that the world hangs by a thread. Everybody thinks like, "Oh, you're going to put a lot of thought into your big decisions to make sure that you're successful in life, where you go to college, what your career is going to be, who you marry. That's all great." But the world hangs by a thread and there are tiny little no-nothing decisions, maybe that you made today, of maybe it was when to cross the street, maybe it was when to leave to get in your car that can utterly change the course of your life. And so once you accept that of how much the world hangs by a thread, I think you become much more humble with your willingness to make forecasts about the future. What the economy is going to do, who's going to win the election, what's going to happen in my life, my career, my family's life. We have no clue. We have no idea because all we can think about are the big decisions. We cannot piece together the chaos theory of, "I got in my car at the wrong time. I met the wrong person or I met the right person or I decided not to take a second run." We cannot forecast the impact of those things. And so that had a big impact on me too, of just who are we to fool ourselves that we can predict the next recession, that we can predict where our careers are going to be in 10 years, that we can predict how long our marriage is going to last, that we can predict how long we're going to live. We can't, nobody can because we can't predict how crazy these tiny events can turn into. And this comes right back to investing, doesn't it?

Investing and the Biggest Mistake Most People Make (41:33)

Because most people that consider themselves to be investors, whether that's just putting a couple of quid into crypto or something else, engage in the idea that they can predict the future. And this is where it appears that most money is lost. I mean, think about the biggest risk to the US economy over the last two generations. COVID? That's one of them. The others would be Pearl Harbor, 9/11, COVID. And maybe Lehman Brothers couldn't find a buyer in 2008, which sparked the financial crisis of 2008. Those are the biggest risks by far. And the common denominator of every one of those stories is that nobody saw them coming. They were not in any newspaper before they happened. They were not in any economic outlook. Nobody was going on TV warning you that this was coming. The common denominator of those is that they did all of their damage in two seconds. And that would be the case going forward. You can guarantee that the biggest news story and the biggest risk over the next year or the next 10 years of our life, whatever it is, is something that nobody's talking about today, that you and I have can't even fathom. Because it's always been like that. There's never been a time when the biggest news story was foreseeable. And it'll be like that going forward. So that's another just embracing how fragile the world is. There's a great quote from a financial advisor who I really admire named Carl Richards. And he says, "Risk is what's left over when you think you've thought of everything." You can go out of your way to think about all of the risks that are in your life and like, great, and like how you're going to prevent them. Great. That's a good thing to do. When you're done with that exercise, what's left over that you're not thinking about is what risk actually is. It's like by definition, we can never plan or even imagine what the biggest risks in our life are going to be. You say that in Same As Ever. You say, I think that the chapter title is, "Risk is the things you can't see," or something along the lines of, "Risk is what you don't see." Risk is what you don't see. That was a little bit terrifying. It's true. And I think sometimes you can phrase it as terrifying. It's also kind of relieving that like, why are you going to put so much effort into trying to predict what the stock market is going to do next, what the economy is going to do next? Why are you building a forecasting model to figure out what the economy is going to do over the next 10 years? When you look at the last 10 or 20 years, how could you ever predict 9/11 or COVID? And even look, something like COVID, there's like a 2015 Bill Gates TED Talk where he talks about the biggest risk to society is a viral pandemic. So it's not that nobody saw that thing coming, but the specifics of when it's going to happen, how bad it's going to be, is it just going to shut down the economy for a week or two years? That is completely impossible. But there's also lots of other TED Talks that say everything's going to be great. Of course. There's a lot more. So on balance, the world had no idea. I think on balance, the world breaks once per decade. Not exactly once per day, but on average, once per decade, everything that you thought about risk and uncertainty and stability goes to shit. So how do I prepare? If risk is what I don't see, how do I prepare? There's another great quote from Nassim Taleb that I like where he says, "Invest in preparedness, not in prediction." So rather than going out of your way to be like, "Here's what I think is going to happen in crypto. Here's what I think is going to happen in the stock market." Just make sure that you have a big enough buffer in your finances, cash, liquidity, being scared of debt. So that no matter what happens, you at least have a fighting chance of enduring it and making through. One thing I've often thought about is that you should have enough cash in your investing portfolio. The amount of cash you should have should feel like it's too much. It should feel, it should make you wince a little bit because if you only have enough cash to put up with the risks that you can envision and the risks that you can foresee, you're going to miss a surprise every single time. Every single surprise is going to be a surprise to you. But if you feel like you have too much cash, then at least you have a fighting chance of putting up with the 9/11, the COVID, the Pearl Harbor, whatever it might be. So when people look at my asset allocation, my investments, a lot of people look at it and say, "You seem really conservative. Why do you have this much cash? What are you saving for?" And my answer is always, "I don't know. I have no idea what I'm saving for." Who are we to assume that we can predict the risks that are going to be in our own personal lives and throughout the broader world? Nobody can do it. The only way to prepare for it is to have what feels like too much safety. What is your capital allocation strategy?

The Best Advice on How to Invest Your Money (45:55)

How do you invest your money? This is the thing people want to know most about you. I keep it as painfully simple as I possibly can. Literally, my entire net worth is cash, a house, and index funds, and some shares of Markel where I'm on the board of directors. That's it. There's nothing else. I can summarize everything so easily and so cleanly. Truly, that's it. It's not even like I have 20 bank accounts. I have one bank account, one brokerage account, and a house, and that's it. It's so simple. Why index funds? You're the reason your capital allocation strategy is almost identical to mine. I want to talk about the housing as well, but after reading your book, I stopped trying to pick stocks. I invested all of my available capital into index funds outside of investing in starting companies. I'm a shareholder in 50, 60, 70 companies. All my other available capital is invested in index funds. Then I have a very long-standing large position in Ethereum, which I've held for like six years or something. Which has done me very well. That is it. The Ethereum investment is also based on the fact that I run a software business that is in blockchain. I could see that developers are building on top of Ethereum more than any other blockchain. That insight was really beneficial to me. Six years. Even with the big fall over the last two years, you're still up a lot. Your book taught me that successful investing is when you lose the password to your investment account. I don't actually think you said that in there, but that's like when I lose the password to my investment account, I'm so proud of myself because it means I haven't checked it in forever. It's funny because you were coming today. I thought, "Oh yeah, well, I have all this money in these index funds. I'll check it." I thought, "Fuck, I don't know the password." Good. That's why you're going to do okay. The reason I do this, what's important is that I am not one of the people who says nobody can beat the market, so therefore use index funds. That's not what I believe. I think it's extremely hard to beat the market and very few people will do it. But I think there are really smart people who can do it and people who I know who I could invest with. The reason I don't is not because I don't believe it can be done. It's because the variable that I want to maximize for in my investments is endurance. If I can just earn average returns for an above average period of time, it's going to lead to amount of success that will literally put you in the top 5% of investors. My parents are a great example of this. My parents are smart people, but they have no financial background. They have minimal financial interest, I would say. But they have dollar cost average into index funds for going on 40 years now. Literally, if you look at the returns, they've never sold anything ever. Literally, if you look at the returns, they'd probably be in the top 3% of professional investors. For anyone that doesn't know, what is dollar cost averaging and what is an index fund? Dollar cost averaging means you buy the same dollar amount of investments every single month come hell or high water. It doesn't matter what the stock market is doing, recession, boom, bust, you say, "I'm going to put $100 or whatever it is in the stock market on the first of every month." They have $100 or whatever removed from every paycheck and it goes into the funds that they own and they don't have to do anything. Whether you know it or not, you're actually doing it. The contrast to that would say, "I'm going to buy and sell based off of how I feel in the stock market. I wake up, I watch CNBC, I decided to sell. I'm going to put it back in when I feel better about the market." It's the contrast to that. An index fund is just a single fund that owns hundreds or thousands of stocks within it. If it's diverse enough, if it's big enough, really what you're doing is you're owning a slice of the global economy, which is how I think about it. It's thousands of individual stocks in there, Tesla, Apple, whatever it'd be. But really what you're doing is you're owning a slice of capitalism. If I was your son and I said, "Dad, prove to me that that's a better long-term wealth creation strategy than buying crypto or buying companies that I use or like," how would you explain that to your kid? Your ability to do well over the next one year or five years is going to have no role whatsoever on your lifetime ability to generate wealth. All that's going to matter is not what are the best returns you can earn. All that matters is what are the returns that you can sustain for the longest period of time. All that matters is your endurance. It doesn't matter if you can double your money this year or even double your money again the next year. All that matters is can you stick and keep it going for 50 years? That's where compounding comes from. Because the formula for compounding is returns to the power of time. That's not quite it, but more or less that's it. So in that equation, if you understand the math, all of the heavy lifting comes from the exponent. Because that's how exponential growth works. That's how it works. It's literally exponential. - Give me a case study where someone has followed that strategy and done well. - Okay, here's one way to explain it that I use in the book. 99% of Warren Buffett's net worth was accumulated after his 60th birthday. After he turned 60 years old, 99% of his wealth has been accumulated after that period. Because the longer you hold that four, the crazier the numbers get. When he was 60, I think he was worth about $3 billion. A lot of money. He's a multi-billionaire. But now that he's 90, he's worth over $100 billion. And he's given like $100 billion away to charity. So if he didn't do that, he'd go from $3 billion to $200 billion since he's been 60. Because the numbers just get crazier at that point. He's worth $100 billion. So if his net worth goes up 10% in one year, he makes $10 billion, which is three times that he was worth when he was 60. So when you look at somebody like Buffett, is he a great investor? Is he a great stock picker? Of course. But the real secret to his success is that he's been a good investor for 80 years. And if he had retired at age 60 or at age 50, nobody would have ever heard of him. He would have been like one of the other multi-billionaires who lives in Florida and plays golf and you've never heard of him. The reason he's a household name is because he's been doing this nonstop since he's been 11 years old. And he's never stopped. It's just the endurance that's made him so wealthy. Not necessarily the annual returns. - Patience. It's a difficult thing. It also reminds me of the story that you talk about in the introduction of your book about the janitor, Ronald James Reed.

Financial Planning And Investment

The Janitor That Became a Multimillionaire (51:58)

- Yeah. - Who when he died in 2014, age 92, had a net worth of over $8 million. - And he was a janitor. - How did he do that? - He took what very little money he could save from his job as a janitor mopping floors at the gas station. He put it in stocks and he left it alone for 70 years. And that's it. That's all you need. That's all you need to do. If you have endurance in your investing and you can keep it going for years or decades, you don't need to be a genius stock picker. And not only do you not need to do it, if you have endurance, you're going to beat literally 97 or 99% of the genius stock pickers. And what's so interesting about it is picking the right stocks is hard. It's supposed to be hard. There's no world in which everybody who tries to beat the market is going to do it. Of course, it's hard. Just being an NBA player is hard. But having endurance is largely in your control. It's so much easier to just be patient than it is to pick the right stocks every single day. And I think some people nature nurture, some people like probably Ronald Reed and my parents just understand it naturally. It's not hard for them to be patient. But there are professional investors who work 80 hours a week for 30 years to try to beat the market and they can't do it. Not only some, that explains most of them. And even the ones who can do it are maybe going to beat the market by half a percent per year, 1% per year. But if you can have endurance, that's a bigger benefit than you can have by even being a very successful stock picker. Somebody who outperforms the market by 1% point per year, and they can do that for 10 years, that's amazing. That's like Mount Rushmore investor. But somebody who earns average returns and does it for 20 years is going to have way more money. You do it for 30 years, you're going to be filthy rich. You'd be like Ronald Reed, you can be a janitor who leaves $8 million to charity when you die. But so in the case of Ronald Reed, do you not look at him a little bit and go, "Listen, bro, if you had $8 or $9 million in the bank, you should have been living it up." See, this is one I do kind of regret that in the book that I'm, I kind of, I didn't say it explicitly, but I kind of make him out to be a role model. And I don't think that's the case. He's not my role model. I think he's a fascinating story of somebody who became rich despite not having any of the pedigree or any of the skills that are normally associated with wealthy people. But you're right that he lived in a squalid housing and he worked as a janitor. That's not my goal. So I want to live a nice life. I want to be independent, but he's the most extreme example that you can come up with. And I wish I had stated that more clearly in the book. - A lot of people have this conversation around pensions and in the UK, we can pay money from our salary into our pension. But I think a lot of people think, "Gosh, when I'm 60, when I'm 65, I want to be rich.

Pensions (54:41)

I want to be rich when I'm 25. And I can go to Vegas and, you know, ball out and buy nice things and have great experiences, not when I'm 65." - Yeah. No, I think that's true. I think there are a lot of people, a lot of financial advisors will say that one of the hardest things they do as an advisor is getting their clients to spend money because they've been so conditioned to save, save, save, save, save, that when they finally retire at 65, they don't know how to spend. They have no clue how to spend money. There's a great author, I think you've had him on your show, Ramit Sethi, who talks about this a lot. Like, you need to learn how to live a rich life and figure out what that is for you. For some people, like for me, it's just like my happy state is like sitting on the couch in sweatpants, reading a book, going for a walk with my wife. That's my rich life that I love doing. And to do that, I need to be independent and autonomous. So I can do that all day long. I can do that on a Wednesday afternoon. Ramit talks a lot about like maybe your rich life. I think for him, it's flying first class and wearing nice clothes. And he talks about like he drives, I think like a beat up Honda, but he flies first class and he dresses very nicely. So you just have to figure out what is the little thing that's going to make you happy. And I think a lot of people's problem is that society tells you what you're supposed to do to be happy. You're supposed to have a nice car, you're supposed to have a big house, you're supposed to wear nice clothes. That's what society tells you to do. And for some people, that might be the case. For other people like me, I think it's not. That would not ever make me happy. What does make me happy is independence. So I can just do these little quirky things that I like to do. So I think you just have to figure out the little things that make you happy rather than just being forced by society into what they want you to do. Knowing when enough is enough. This was one of the most interesting things that I think really rang true to me was how do I know in my life when enough is enough?

How Do We Know When Enough Is Enough? (56:28)

I've definitely been a victim to that external narrative that I need to have these things in my life to be a happy person. But how does one go about knowing when enough is enough? I think, back to the story of my father, he just woke up one day and it was obvious that he had been doing what he did for long enough and he had felt like he had enough and whatnot, and he broke away from it. I think for a lot of people, one thing that's important about the concept of having enough and independence is that when most people, even if they are independent, they wake up every morning, what they want to do is go to work. One of the big problems with the FIRE movement, the Financial Independence Retire Early movement, where people are like, "They're going to be a super saver and then retire at age 31," whatever it would be, so many of those people who actually did that and retired at age 31, once they retired, after about two weeks, they were bored out of their mind. If they did it for six months, they were clinically depressed. Because for most people, you want to be productive. You want to keep doing it. So having enough doesn't necessarily mean that you're going to stop working. It just means you're going to keep doing only the work that you want to do. There's a really interesting question that Patrick O'Shaughnessy asks a lot of people in his office. He says, "If you won a billion dollars in the lottery, but you had to stay at this job, you're a billionaire, but you can't quit, what at this company would you want to do and what would you get rid of?" Virtually everyone has an answer for that question. They say, "Oh, if I didn't need the money, but I have to stay, I would love to work on this project. I love working on this thing. This, that, and the other is all bullshit to me." So in any job, there's going to be something that you want to do. There's going to be some project, there's going to be some position, or maybe it's like being an artist, whatever it would be. It's not that you stop working, it's that when you have enough, you get to pick and choose which of those things you're going to end up doing. - It's often too late in our lives when we realize the cost that we've paid for enough never being enough. It could be family, it could be health, whatever. I always reflect on the Brony Ware, wasn't it, who interviewed people on their deathbeds and found out that the biggest regret of the dying was not living a life true to themselves, working too much, etc. But that's on your deathbed. There's nothing you can do at that point. I think a lot about this. What am I going to regret? - Yes, I think about it too. I think this is pretty morbid to think about, but I think about if I were on my deathbed tomorrow, would I regret working hard and saving a lot of money? My answer is absolutely not. It would give me so much pleasure to know that my wife and my two young kids are going to be fine. And the opposite of that, I cannot fathom being on my deathbed and looking at my wife and my eight-year-old son and my four-year-old daughter and thinking, "You guys are screwed." That would be the biggest regret I can fathom. So I think a lot of people would look at someone with a high savings rate like me and would assume that I'm going to regret it on my deathbed. And who knows? But I have to think it would actually be the opposite. What makes me, gives me so much happiness and pleasure is taking care of my family. And if I were to go tomorrow, I wouldn't regret for one second the car that I didn't buy, the big house I didn't buy, the nice clothes I didn't buy. Not for a second would I regret not doing this. - It's a really good frame to think through, isn't it, about our financial decision-making?

Should We Save Our Money for Our Children? (59:34)

And you know, a lot of people are saving up to buy a lot of nonsense that's going to depreciate. And would you rather have a little nest egg left over for the ones you love or buy that Lamborghini? - There's another great book called Die with Zero, which basically, the title is self-explanatory. And one of the concepts is even if you want to give money away to your family, don't wait until you die. Don't make your kids wait or like hope you're going to die so they can get their inheritance. Give it to them when it really matters, which for most people is in their 30s and 40s. If you wait until you die at age 90 and your kids are 60 and then they get your money, like what's the purpose of that? Give it to them when they need it. When they're raising kids and whatnot, that's when they need your money. I really like that concept. I think about that with my own kids. - The counterpoint to that is though, if I just give my kids money, then like the Chamath quote, they might lose it quick. And to think about that, especially as someone that has a lot of cash they could give, I think about this because at some point I'm going to have kids and they're going to say, "Daddy, I want to do a driving lesson," or they're going to be 18 and go off to university or whatever. God, I hope they don't go to university. And they're going to say like, "I've got nowhere to live," or "I found this nice apartment, dad." And in those moments, do I make the decision to pay for it because I can or withhold it because they need to learn the hard way? I have this, yeah, I'll call it an argument with my girlfriend where I say, "Babe, listen, when we have kids, they're going to set an economy." And she's like, "Absolutely not." And I'm like, "No, babe, when they get, okay, we made a deal. I think we got to about when they're 12 years old, I'm going to put them in economy so they can learn for themselves the value of things." - See, we made this mistake. I don't think I've ever talked about this, but it was about a year ago, we flew. My son, who was me, I guess he was seven at the time, we flew first class. And we explained to him that this was not normal. This was not going to be the way it is. As soon as he did it, he went home, he told all of our neighbors, told all of his friends, told everybody at school. And that was when I was like, "Can't do this, never again." You see how quickly somebody can be spoiled or use that to try to show other people that they are superior to them. That's what it was like, "No, no, we can't ever do this ever again." - And you moved his expectations. - Absolutely. I didn't fly first class till I was 35, I did it at seven. And so when I first did it at 35, I remember feeling, A, I earned this, I worked for this. And it also felt so special to me because I'd flown coach 9,000 times before that. So it felt amazing. And so I think about that a lot. There's a great quote from Charlie Munger, where one of his rich friends says, "Charlie, if I give my kids all of my money, is that going to ruin their ambition?" And Charlie says, "Of course it will, but you have to do it anyways." And the guy says, "Why?" And Charlie says, "Because if you don't, your kids will hate you." And I think that too is like, lots of Charlie Munger quotes are framed as black and white, they're extreme. But I think that's probably like 80% true. - Really? - That it's maybe 70% true that if you are a wealthy person, and I'm not talking billionaires, if you just have a moderate amount of wealth that you might pass along to your kids someday, that your two options are kind of, at least to some extent, hurt their ambition or risk some level of strife. And it's always child dependent. I always make the example that if 18-year-old Bill Gates or Mark Zuckerberg or Elon Musk inherited a billion dollars, it wouldn't have made any difference to their ambition. They would not have slowed them down by one second. But most people, including myself, it would have. I was driven by fear of not making it, which is what most people are. I was scared shitless that I was not going to find the right career, that I wasn't going to make it. And that's what drove me. Some people don't need that, but I think it's very rare. I think the huge majority of people, if you give them an easy life, they will take it and embrace it with both hands. - Making money and keeping money require two different skills.

Why You Should Never Check Up on Your Investments (01:03:19)

You've spoken about a few of the skills that are required for making money. The one that really stuck out to me that you've discussed so far is this idea of endurance, patience, regardless of what's happening in the markets, regardless of the volatility, lose your password and sit on your hands. Just on that point as well, I remember reading somewhere, it might have even been your book. It's so crazy because the things that I know about money, I can't remember where I've got them from, but most of them came from this book. Most of the principles came from this book. And one of the things that I read was that Warren Buffett would go five years without allocating capital. And this quote where he said, "The hardest thing to be a great investor is to be able to sit on your hands and do nothing." - Sit on your ass and do nothing. That's it. That's a Munger quote. - And that's what they're doing right now. Berkshire Hathaway, which is Warren Buffett's company, has like $150 billion of cash right now. And that's their entire 60-year history of Warren Buffett and Berkshire Hathaway is build up a shitload of cash, wait 10 years for an opportunity, deploy it all, and then go back to waiting and building up cash. - Crazy. - And that's how they've done it. Good opportunities are rare. Of course they are. They should be rare. It shouldn't be that anybody can just open up their stock account and find the opportunity of a lifetime. It's going to come once a decade. - What are the other skills then? Endurance, patience, to get money? - For the ordinary person, endurance and patience is 99% of what you need as an investor because the opportunities there to invest in a low-cost index fund are available for everybody. - And you can do that from your phone. - Do it from your phone. Open up a Robinhood account, buy some index funds, anybody can do that. And so that was not always the case. It used to be like 20 years ago that the only people who could invest were people who had a lot of money and could afford a broker and had connection to a broker. - And you had to like make a phone call. - You had to make a phone call. You had to know a guy. And even then you were going to pay a ridiculous fee to that person for doing it. - You got pieces of paper and all kinds of... - Huge. It was a joke. And that's 20 years ago. It was not that long ago. So I think like people aren't grateful enough or appreciative enough of how much things have changed that open up those opportunities for everybody. - You talk about the skill of keeping money, which is different from the skill of getting money, is predicated on survival. - Financial survival and just putting up with all the unpredictable nonsense that's going to happen between now and the end of your life. And we talked earlier about the surprises, Pearl Harbor, 9/11, all these big surprises. It's just your ability to endure things like that. That's going to be literally 90% of your financial success and your investing success. So gaining money is like being an optimist and taking a risk, like being optimistic about yourself, swinging for the fences. You need that to get rich. Staying rich is like the exact opposite. You need a level of being conservative. You need to be scared. You need to be acknowledged of all the unknown risks that are in front of us and have a financial allocation and a mindset that's going to allow you to endure them and survive them financially. You need both of those skills at the same time. - So your kid is 20 years old. He's broke. Do you tell him to go and take huge outsized risks? He's not got a family. He's not got a mortgage. He's not got a dog. What advice do you give him at that age to create wealth? - I would actually say that I think this is a little counterintuitive that when somebody is young, you think you would say, "You got 50 years in front of you. Swing for the fences. Go for it." It's also when your life is the most fragile. It's when you're most likely to be laid off, most likely to change your career, most likely to break up or get divorced, whatever it would be. And so for that, you need quite a bit of financial flexibility, just cash and liquidity. So once you had some level built up, whatever the level might be for a different person, then do something crazy. I also think for careers, some of the best career advice that's maybe not universal, but when you graduate college and you're looking at your career, don't take the safe job, which is usually the big company, the blue chick company. Go for the weird company. - Why? - Go for something crazy because when you're older, when you're 40 and you have two kids and a mortgage, you're not going to want to take the weird job. That's when you want the stability. That's when you're probably going to want the job that has good benefits and a stable paycheck because you need that. When you're 22 and you're not tied down by anything, don't go work for Goldman Sachs or Apple or Deloitte or something like that. Go for the weird startup where you're going to learn something completely different. - Linked to that point is in the weird startup, you're going to be so close to the failure and failure is the knowledge.

The Benefits of Not Working for Big Companies (01:07:34)

- You're going to learn so much more. And there's so many people who take the blue chip, the safe job out of college, and it puts them on a very predictable track. You're going to be an analyst for two years. And then if you're good, you'll get promoted to senior analyst and then you'll get promoted to associate. It's like very stable and linear. And that's like, it's you capping all of your upside. Or if you go for the weird company, you're either going to do one of two things. It's either going to fail and you're going to learn a lot from that, or it's going to take off and you're going to learn a lot from that. And then maybe when you're 40, after going through all that, then you want the stable job at the big company. - It's interesting. I was thinking as you're speaking that the proximity from your desk and the CEOs probably needs to widen over time. - Yes. I think that's true. Yeah, absolutely. And most people, I think if you do it the other way around, or most people would never do it the other round. If you start your career in the stable company, you're probably never going to leave. You're going to get addicted to the nice paycheck, the stable benefits, whatnot, and you're never going to take a risk and do anything else. Maybe that's okay. Maybe for some people's personalities, that's exactly what they want. But I think there is a higher level of regret for people that start in a safe company and then they get the golden handcuffs, they can't leave. And by the time they're 40 and they realise that they wanted to work at the crazy company, they can't because they got a mortgage and two kids and they're saving for retirement and they can't take the risk at that level of their life. - You introduced this concept of tails, long tails, and this also changed my life, changed my investment strategy, I should probably say.

Risk Management And Decision Making

Why Everyone Is Bullshitting Their Way Through Investing (01:08:58)

You talk about the example of venture capital where for every 50 investments that venture capitalists make, statistically half of them will completely fail. 10 will do okay and one or two will make huge profits that drive 100% of the funds returns. This is a lesson about investing in finance, but it's also, for me, a lesson about life. - It's always life. It applies to everything. Tails where just a couple of things that happen explain 90 or 99% of what matters. It's always the case. You see it in business where you take in the United States, there are thousands of public companies that you can buy stock in, but the huge majority of the value in the US stock market is in like 10 companies, Apple, Tesla, Microsoft. So even though you have thousands of companies, 10 of them are the ones that really matter and are going to drive all of the returns over time. - So why don't you just buy those 10? - Because nobody knows what they're going to be, at least in hindsight. That's the argument for owning a thousand of them is that you know that the 10 that are going to be the next big ones are going to be in there. - All of this is a case for humility. This is honestly what I took away from your book. You're expecting to walk away with tips, all these tips, these tricks, these special ways to make more money than everybody. What I came away with is this one important lesson that I've never been able to unsee, which is, I don't know. - I think that's great. And then back to, I wrote this book for myself. That's been the biggest lesson for me is not only do I know, but nobody else knows either. Everyone else is bullshitting their way through the investing market too. They don't know either. - I'm in this crypto chat where one of my friends, I won't disparage him, one of my friends, he's the guy in the chat that's always posting the forecast graphs. You know those ones where they kind of like the little log of graphs, where they forecast where the stock or the crypto is going to go. - Where they think it's going to go, right. And it's always, it's always up and to the right. - And it's kind of like male horoscopes. I heard someone say that. - That's such a great, yeah. No, I think that's, I think what's closest to investing is something like the horoscope, or even if you know it's bullshit, you want to read it. - Why? - Because it's comforting. What a lot of people want out of their investing forecasts or whatever it is, is they want to reduce the uncertainty that's giving them stress. Because everyone I think intuitively knows that the future in front of us is unknown and it's unknowable, but that hurts. And so if it hurts, you try to reduce that stress by finding someone who says, I do know what's going to happen. - You know what this applies as well is I read Amazon's Jeff Bezos, who's the CEO and founder of Amazon, his shareholder letter, where he says, we have to be the best place in the world to fail.

Why You Should Take That Risk (01:11:27)

We swing for the fences 10 times and for every 10 swings, nine of them are in the Amazon graveyard. He's talking there about a9.com, which nobody knows because it failed. The Fire Phone, which nobody knows. But the one in 10 pay for the entirety of the graveyard. - The one in 10 is going to be AWS. - Which will make 70 billion this year. - Right. He talked about that when the Fire Phone from Amazon, which if you don't know, Amazon built a cell phone, it's called the Fire Phone and it was a joke. It was a disaster. It was a massive flop. And he was doing like an analyst call. And then this analyst talked about like, hey, the Fire Phone flopped, like what happened there? And Bezos said, if you think that was a big failure, just wait, you've seen nothing yet. And like, that's why Amazon's successful. They're willing to try a thousand things with the idea that they know 990 of them are going to fail, but the 10 that work are going to be massive. And if you can fail well and have the mentality to fail and the financial backing to be able to fail, like make sure your bets are not that big and you can just keep taking little risks all the time, the optionality that you get from that, like the odds that one or two of those are going to explode are huge. It's massive. And it's no different than how do you win the lottery? You have to buy thousands and thousands or millions of tickets. If you buy billions of tickets, you will probably win the lottery. It's probably not going to pay off because it doesn't work like that. But it's the same concept. Like if you take enough swings at bat, one of them is going to hit eventually. And this is also a reason why some companies look innovative. They look like they're geniuses, but in fact, their failure rate is massive. There's a story at Netflix several years ago where there was a report to the CEO and the report was all of the new movies that we've come out, that we've produced have been successful. And whoever presented that probably thought this is great. This is what you want to hear. And the CEO said, "That's terrible. That means we're not taking enough risks." If every movie that we release is a hit, we're not taking risks. You want your failure rate to be at least some... That's when you know you're at least trying something new. It's the same if you're managing a hotel. You don't want every room to be sold out because that means you're not pricing high enough. You know you're doing a good job when you have 10 empty rooms. That's when you know you're pricing the other rooms at a high enough rate. So there's always going to be some level of what looks like failure that you need. And if you don't have it, you're not taking a big enough risk. - Daniel X sat here and he said the same thing. He goes, "One of the most important metrics that I think about at Spotify is our mistake rate." And people will think, "Okay, so he wants to limit mistakes." Very much the opposite. He wants to make sure that the company maintains that sort of startup mentality and they increase their rate of mistakes. And this brings me to something which kind of hit me like a truck in your new book, Same As Ever, which was this idea that we need to keep running. Now there were areas in my professional life where I've been successful. podcast is doing well, I think. Doing pretty well. And I had a car journey with Jemima who's through the wall, who you met. And last time we came to L.A., I'm in the front seat of the car and I go, "Jemima, do you know what our biggest threat is now? Complacency." When people get successful, they play defense to their detriment. They don't play offense as much as they need to to keep up with the rate of change in the world. And then a young, scrappy, agile incumbent who has a high-risk appetite will take their cheese. And your chapter on keep running, there's two quotes that I really pulled out. The chapter's called Keep Running. And the two quotes that I pulled out were, "Competitive advantages tend to be short-lived, often because their success plants the seeds of their own decline." One more quote. "It's easy to overlook how many forces pull you away from your competitive advantage once you have one, specifically because you have one. Success has its own gravity." That's right. And the biggest source of gravity there is laziness. The reason you're successful is because you worked so hard to get to where you were. And now that you feel like you've made it, now that you feel like you're on the top of the mountaintop, you get lazy. So many companies fall for that. So many careers fall for that. There's a great story from Jerry Seinfeld where he said that one of the reasons that he quit the show when it was still going gangbusters is because he could start to sense that what made the show successful was starting to go away. And part of the reason is because he got so famous. When he was not that famous, he could go sit in a coffee shop and watch how people ordered their coffee and make a joke out of it. He was observing how society worked. Once he got very famous, he couldn't do that anymore. He was too famous to go sit in a deli and watch how people ordered their sandwiches. He couldn't do it. So therefore, he didn't have a lot of the source material that he had before. And so he was like, "Look, what made me so funny and the show so successful, I can't do anymore. So red alert, let's pull the plug before it gets really bad here." So that's a very specific example. But what he realized that what made him successful was gone. And a lot of CEOs will have this problem too, where what made them successful was that they were a scrappy startup founder and they're very good at building a product. But now that the company is big and successful, they also need to be an HR manager. They need to be a finance specialist. They need to be a marketer. They need to be all these other things. And therefore, their time is pulled away from what they're actually good at, which was building a product. A good example of this, if I can say, it was Travis Kalanick of Uber, the founder of Uber. Probably nobody in the world was better at scaling a company like Uber than he was. And there were a few people who were worse at managing a big company than he was. So it's like what made Uber successful is what pulled him away from being a successful manager at that. He was very good at one thing. He was the best in the world at that one thing. But you shouldn't think that it's going to last during another phase of the company's life. - My person I consider a mentor and a friend of mine, been a long-term friend of mine, a guy called Shaquille Khan.

The Best Bit of Advice I Ever Received (01:17:32)

He was one of the very first investors in Spotify. New Daniel, the founder from the very beginnings. He said to me, "A piece of advice that stayed with me, and I've also imparted on other people. At a time when I'd left my company, I was now financially successful, financially free by all regards." And I called him after leaving my company and I said, "Shaq, what should I do now with my life?" He said to me, "Steven, the reason you were successful was because you were hungry. You need to realise that you're no longer hungry for the same reasons." And what he told me to do was the hardest fucking thing I've ever done in my life, which was nothing. He said, "Spend a year. Don't rush back into starting the same business again." Because he said to me, "The reason why you were so unbelievably disciplined and would go to the office seven days a week was because you were an insecure kid that was fighting to survive. That's gone now. So sit on your hands for a year, do absolutely nothing and get inspired again. Get hungry again about something new." Because my temptation was just to run back in and start a big marketing business again or whatever. I mean, that's kind of what you're speaking of as well, is that the need to understand that our motivations evolve and change over time and the thing that made us successful might not be the thing that makes us successful again in a new venture. - I think there are some people who really can keep it going. Some people who do keep running. - Like Elon fucking. - A perfect example. A guy's worth a quarter of a trillion dollars, he still works 100 hours a week. So there are those people who exist. But I think for a lot of people, this should not be a scary thing. The fact that after you've made it and have some success and some wealth, that you're not as hungry as you used to be, that's fine. You just have to accept it. It gets dangerous when people don't realise it and they are less hungry. They're not as motivated but they're still going to try to go start a new business even though they don't need it anymore. And then they're shocked when that business doesn't work. - He said to me, "You need to take on a moonshot." And because he goes, "You did the first business, you did well, whatever, etc." He goes, "The thing that will make you hungry and sufficiently terrified is you now need to find a big, scary, terrifying goal." - That's what Elon did with Twitter. He'd already become the richest man in the world and he probably got bored a little bit. And he said, "I need to do something that's crazy and even for someone like me, it's going to be an absolute stretch to pull off." - Crazy. - Which was buying Twitter and running into the ground. - I mean, there's no surprise that billionaires will seem to start rocket companies. - Yeah. I mean, the reason that they are successful is because they have that complete swing for the fences. I mean, most people would quit full stop when their net worth hit 10 million or less, 3 million. And so for someone to have a net worth of 10 billion and to wake up and say, "I'm going to keep going as hard as I possibly can." That's why they have that level of success. It's complete insatiable hunger for more. - I sat with a billionaire when I was 20, I'm going to say 24 years old. And I sat in his office and I thought, "Okay, this can be really interesting. I get to meet this very successful person in Manchester." And I looked into his eyes and said, "Why are you doing this? Like you have all of this money." And it became completely apparent to me that it was not about the money. It was all about competition. I then went and met another billionaire who was in Manchester, runs another big company in Manchester. Everybody knows the company. And it was the same thing with him. It was the thing that had got him to a billion was the thing that was going to keep him going after a billion. - Yeah. I mean, there's this chapter in my book about natural maniacs, like people like wild minds, people, the kind of person like Elon Musk who has that mindset to say, you know, when he was 30 years old or whatever, he took on GM, Ford, Chrysler, and NASA when he was like 30. The kind of person who thinks that is not the kind of person who's going to say, "I have enough. I'm going to put it all in muni bonds and go live on the farm." Like it's not the person who thinks they can do that and can pull that off is the kind of person who's never going to stop. If Elon Musk list, so he's 97, he's going to be starting new rocket companies for sure. - Do you think he's happy? - No, absolutely not. I think most people in that situation, the word that I would use is tortured. I think they wake up every morning tortured at the problems that they are aspiring to solve that they haven't solved yet. There's almost no biography of a very successful person like that, of that level of success that you would read their biography and say that life sounds great. - It's one of the things that hit me like a train truck was those two billionaires I met were just the most miserable people. - Absolutely. - And I met this, one of their sons and they go, "Dad is so unhappy." I remember him saying that to me and just go, "Fuck, he's going to that office every single day has a billion dollars and his kids think he's like sad." - There's this amazing story. Do you remember MySpace back in the day before Facebook and the guy who ran it, his name was Tom, I forget his last name, but when you signed up for MySpace, Tom was your first follow. He was the founder of MySpace and he followed everybody and he sold MySpace, I think, to Qualcomm maybe, no, I'm sorry. He sold MySpace to Viacom and did pretty well. Let's say, I'm guessing, let's say he made $50 million. It's probably something in that range. It's probably nothing that's dramatic. - 500. - Was it 500? Maybe he sold the company for that much. - Yeah, he actually did make money. - But it was a good, but not extraordinary sum of money. And you can see his life on Instagram. It's not exaggerating. He travels around the world with his girlfriend, hiking in Bali. It looks like, at least from Instagram, he lives this amazing life. And then think about Mark Zuckerberg, who is like every year hauled before Congress, where he's screamed at for causing all of society's ills and he has so much on his shoulders and Facebook stock fell 70% last year because everyone thinks it's going to hell. It looks like a very stressful, incredible amount of pressure on his shoulders. If you were to ask me, which one of those lives would I take? Would I rather be someone with $50 million who was traveling around the world, hiking in Bali with my wife, or would I be worth $100 billion and wake up every morning scared shitless with so much pressure on my shoulders? For me, it's obvious. I'd much rather be Tom than Mark. - But that pressure is a drug in the sense that when I say the pressure is a drug, I mean, we know from motivation psychology, and I mean, I think I saw on the back of your book, yeah, Daniel H. Pink. Daniel Pink told me that when people aren't sufficiently challenged, they lose motivation and their level of challenge kind of increases. So to be engaged with a task, you need to, and you think of this like game psychology, the levels need to get harder and harder for you to be engaged. That's why every game we play, it's not on level one over and over and over again. We need it to go to level two, crosswords get more difficult, we stay engaged. Do you not think that's the case with like a big famous CEO that their engagement appetite, their challenge appetite just grows and that's the only way they can stay engaged, solve bigger problems? - I think if you look at someone like Bill Gates, I think he had figured out business and in 2000, he effectively quit Microsoft, but he immediately moved on to what I think was in his mind, a bigger problem, which was like, how do I give this money away effectively? And how do I eradicate malaria, those kinds of problems. And so even for someone like him who was able to extract himself from the business, they'd immediately move on to something that I think in his mind was more problematic and a bigger challenge. So there's never going to be a period where someone like that were to say, I've had enough, I'm just going to retire to read books. Like that will never be the case. It's always going to be, I think they're addicted to the challenge is what it is. - Yeah, and I think I am. I think. - I think everybody is to some extent and the musts and the Gates, those people are extreme examples of it, but I think everybody needs a minimum level of stress in their life. And the irony is that we all kind of dream about like, what can I do to eliminate the stress? So I just wake up in Nirvana every day and you can't, everyone needs to have some sort of conflict, strife, challenge, stress in their life. And I think for a lot of people, if they don't get it from real places, they just make up fake problems in their life. That's a big problem with people. For people who, richer people who have a lot of things, they will start worrying and stressing about the most minute things because they need that stress in their life. - On that point as well, just popping back to what we were talking about, the complacency. The other thing that I think successful people become a victim of is their own correctness. I think about that with me, like I've been right about several decisions in a row. So surely that creates evidence that I'm probably right again. And that can be your downfall as well. - Or what a lot of it is, is you were right on this topic and then therefore you assume that you're going to be right on another topic. - And you didn't know the role luck might have played. - You didn't know what luck would play, but let's say you're a very successful investor and they're, and they'll say you're like massively successful. A lot of those people will think therefore I can also be an effective politician. Therefore I can also be an expert on COVID, whatever it would be, because they think they're so smart in this area that they must be smart in other areas. A lot of doctors have this problem with investing where they think I'm a doctor, I'm very successful. I got a PhD from a great school. Therefore I can pick the stocks because I'm a smart person. And that level of overconfidence is their undoing. - Can success, I think your book, one of the key things that stayed with me and I didn't need to recap myself on was the stories you told about people that accurately predicted what was going to happen in the stock market against all conventional wisdom.

The Biggest Factor That Will Ensure You Lose Your Money (01:26:15)

They all, from what I recall, they went on to lose their money eventually anyway. - A lot of them, yeah. - What is that story you told in your book? - This is a story about a guy named Jesse Livermore, who is back in the 1920s. He was the most successful investor in the world. And what's so amazing about Jesse Livermore is that I think four different occasions in his life, he became the equivalent of a billionaire, adjusted for inflation, and then went bankrupt. Four separate times in his life. So he was the person who was better at anyone in the world at making money and had no skill whatsoever at keeping money. And that's someone who, even when he became, at one point he was the richest man in the world. And rather than saying, "I have enough," it's enough. He just said, "Let's keep taking bigger bets. Let's swing even harder next time." It was never enough. And eventually, the last time he went broke, he eventually ended up killing himself. It's the most amazing, just fascinating life that you can imagine of someone who was so good at making money, but never knew when to stop. And it was actually the more money he made, the more risk he wanted to take. So it was always like his, I think his outcome was always predestined because there was never going to be a moment, like the richer he became, the more successful he became, the higher the odds that he was going to fail. And I think there's some version of that for a lot of people because their success increases their confidence more than their ability. And they don't even know that. That's a problem that you can't self-diagnose. Like if you're confident, you think it's earned and you think it's real. And then because you're successful, a lot of people who, when you were poor or less successful, they would tell you, "You're being an idiot. You're wrong. You're not right about this." But when you're rich, maybe because you employ them or because they think that you're so smart, even when you say something stupid, they might go, "Yeah, maybe it's right. Go for it." And therefore, you don't have people who are telling you how overconfident you are. - That, again, it comes down to humility, doesn't it? - A lot of it, yeah. And I think that's so much of it. And I think you have to go out of your way sometimes for that humility, that when you have some level of success in your life, whatever that level is, just always remind yourself. I mean, there's a quote that I think it was Roman warriors, that when they would come home from a battle that they won and they were in the parade of, "We won the battle and we're going to go in the parade where the victors were so great," that they would have someone by their side whispering in their ear something along the lines of, "You're not that great." Because they're in this parade where they're glorious and victorious, but they need someone to bring them back down to earth and be like, "Hey, you're just a dude. You're just a guy. You're not that special. You're very fallible." They would actually hire people to do that for them. And I think if you look at a lot of the great entrepreneurs, a lot of the great investors, they will have some sort of partner with that. Charlie Munger is that to Warren Buffett. When Warren Buffett comes up with an idea, a big part of Charlie Munger's job is to tell him when he's being an idiot. And to have someone like Warren Buffett who will trust a person like that, and to have someone like Munger who's willing to do something like that, is so critical. Just a quick interruption for a brand that is very close to us here at The Diver CEO, who are sponsoring this episode of this podcast, and that is British Airways. If you're like me and you love a good deal, I think you're going to want to hear about this. The British Airways business class sale is in full swing, and the potential savings are enormous. We're talking savings of up to a thousand pounds on a return business class flight to places like New York, Boston, and Chicago. Plus, you can save even more on their incredible packages to both the USA and to Europe. That includes those premium business class flights and a luxury hotel stay. There's something different about flying business with British Airways, as I think you guys will know if you've ever done it. It's not just the seat that converts fully into a flatbed, or the menu, or the fact that you can watch The Diver CEO on the in-flight entertainment system. It's the personal touch. The experts that make you feel relaxed and at home in the sky. And here's the thing, you've got until the 13th of November, so don't sit on it. Head over to ba.com to find your deal now. Quick one, I discovered a product which has changed my life called Eight Sleep. This product, Eight Sleep, which are a sponsor of this podcast, has been a revelation in my life because the Eight Sleep pod cover, which is basically a fitted sheet that goes over your mattress, controls the temperature of your bed throughout the night and it follows nature's natural rhythm. It starts cool, gets colder while you go into different phases of sleep, and then heats up slightly as you wake up in the morning, which is effectively guiding you to have a deeper, more restorative sleep. I genuinely think of all the things that we would include in health and fitness. I think sleep now is the most important factor. The thing that I'm thinking about most often every single day, when I wake up in the morning, the first thing I do is I check my sleep and I use that information to determine how to proceed in that day. How hard to work out, how many meetings to have, what I need to cancel, what time I need to get to bed. So to celebrate them being a new podcast sponsor, I always want to get a discount for you guys and I've got one. Go to eightsleep.com/stephen and if you do that, you'll save $150 on the pod cover that I have on my bed, the one I'm talking about. Grab your pod cover, send me a DM and let me know how you get on. Confidence, which comes from success often, really does create blind spots and that's something I think about so much.

The Confidence Rule Around Your Finances You Need to Know (01:31:48)

How do I stay aware of those blind spots in my life that the success I've had in various areas has undeniably created? And honestly, a lot of it I just go, "Just save loads of money, Steve, because the day you're wrong, you don't want to go broke." I always think about that. Whenever the curtain comes down on my career, I want to make sure that I can say, "Hey, thank you for letting me have this. I'm so grateful for it, but I've saved enough that I'm ready to pass the baton to someone else." And that's a form of humility too. There's a quote from Denzel Washington where he's talking to Will Smith after Will Smith slapped Chris Rock, remember that whole debacle? After that show, Denzel Washington comes up to Will Smith and he says, "Will, when you're at your highest moment in your career, that's when the devil's going to get you." And it's like when your career is so high and you're so famous and you think so highly of yourself that you can do anything, that's when you're going to get yourself into trouble. What a powerful quote. - And I think just paying attention to that, that's the natural humility that goes into it. And it's not false humility. It's not like, "Oh, I, you know, false humility is like, I didn't do any of this. I just got lucky." That's all false humility. I think real humility is like, "I built this through hard work and I made some good decisions, but I'm just a guy. I'm as fallible as anybody else." I think that's not just important. I think that's critical to any amount of sustainable success. - You taught me that the price you pay to be wealthy is the volatility you have to incur along the way. That's kind of how I think about it in my head. - That's the cost of admission. - To being what? To being wealthy and to... - To be to any level of success is putting up with an enduring unknowns and volatility and booms and busts and then other bullshit that you put up with in the investing market and in your career and in your relationships. There's always a cost for anything good in life. There's a cost that you have to pay. Of course, nothing's free like that. But most of the costs that you pay are not... They don't have a price tag that you can just measure very cleanly. The cost of doing well in investing is putting up with volatility. The cost of a successful career might be long hours where you are pulled away from your family. The cost of a relationship is always needing to sacrifice and compromise for the other person. Nothing is ever free. And so much of the success in life is just identifying what the cost is and being willing to pay it. Because for all of those things I just laid out, investing, career, relationships, the cost of admission is worth it. Putting up with the volatility is worth it over time. Because if you can put up with the stock market falling 30%, if you can just say, "Ah, it's not that big a deal. I'm just going to hold tight," 10 years from now, the cost is well worth doing that. If you can put up with the compromise that takes to have a successful relationship, by and large, it's going to be a cost that's worth paying. Because you know so much of what matters in life is just the relationships that you have. Once you identify the cost of that relationship, you're like, "Oh, I'll pay that cost all day long. It's so worth it." - This requires you to be cognisant of time horizons and your own time horizons, which is something you talk a lot about in chapter 16 of The Psychology of Money. Why is it important for us to know our time horizons? And what do you mean by time horizon? - It's the amount of time between now and whatever your goal is, which is very different for everybody. Not just by your age, but if you want to retire early or whatever, it'd be like, everyone's going to have a slightly different time horizon. - What's yours? - Mine, I mean, you would break it up into different chunks. I want to get to a point, or maybe I'm nearing a point in my career where I'm just doing things because I enjoy them. There's really no financial incentive to what I'm doing. That's one time horizon. Another is, okay, once my kids start getting older, I want to make sure that I'm always there for them when they need me. Teenage years are so difficult for people. I'm always up 24/7, I'll be there for you, which means I'm gonna have to pull back. There's going to be a point where I just say, look, I've accomplished what I want to with writing, and I want to be able to move on to something else. And there's going to be a point where I say, I really don't want to work that much anymore. I just want to move on and maybe I need to take care of my parents. So there's multiple different time horizons at different goals of your life. - Is buying a house a good or bad financial decision? - I'll tell you my own experience, which was in my 20s and early 30s, my wife and I lived in seven different cities. And there was nothing better for us. Some of those were just like, let's try this new city for fun. Some of it was moving for work. We moved for her school. And our ability to just get up and go, hand the keys back to the landlord, nothing was more valuable than that. Once we had our son, our first kid, then very quickly, nothing became more valuable to me than having an established, secure home base that nobody could take away from me. That was the cure. And also, kids are loud and they scream. I didn't want neighbors in an apartment building that I was going to have to try to keep my kid quiet for themselves. I want my own house that's mine. And it's just a standalone house. My kid can scream as loud as he wants, not bothering anybody else. That became important to me instantly. So I think people get caught up when they're like, well, the housing market returns 4.5% per year. It's like stop with the spreadsheets. Just do what's going to work for you. I know Ramit Sethi has a lot of thoughts about this on renting versus buying. And I think one of the differences between Ramit and myself is I have two young kids. If I didn't have kids, I think I would be like rent forever and try different cities, move all around. What can be better than that? But when you have kids, what's more important to me is stability. I want my kids to go to a stable school, know their neighbors, have friends that they can be friends with for years. That's important. If we just think about investing then in terms of is buying a house a good financial investment? My brother who works in my company, he's the one that introduced me to your book many, many years ago, said to me something along the lines of Steve, don't buy houses to make money because you have the ability to play a different set of games that very few people can play. And what I mean by that is he kind of explained it to me because listen, everyone can buy a house. So the returns there aren't going to be huge. Go find a game that only you can play, you'll get bigger returns. If you're buying a house because you think it's going to be a good financial investment, stop. Even if it turns out in hindsight that it was, it doesn't matter. I think these are just purely lifestyle decisions. And I think so many people get screwed up when they're in a spot in their life where they should be renting because they need to be mobile. They need to move around to a new job, new career, new school, whatever it is. But they end up buying because they think they're going to make money doing it. And that's the problem. So I own a house and if I ended up losing money on it, I don't think I'd care. That's not why I'm owning it. I'm owning it just because I want the stability for my family. I've just made an offer on my first ever house and I, cause I played, I played other money games for the last decade of my life. And now I have a partner and we've been together many years and we're both like 31 years old and we're getting into that position now, you know? And my brother explained to me, he goes, listen, this is a bad financial decision, but it's a good emotional, social life decision. And you need to know how to separate the two. Don't mark this down as a way that you're trying to make money. Like you might make money in 20 years time if you just like, if you're still living there, look at it as, you know, you need somewhere to live. And he must've got that from you. When I, when I, when we bought our last house, which was after I wrote this book, so this is a different experience. I thought at the time and still think today, I probably paid a little bit too much. I mean, I paid the market rate, but if you said like, Oh, did you get a good deal? I said, no, no, no, no. Didn't bother me in the slightest. That's not what I was doing it for. It would be, I mean, it would be like, if you ask like, if someone is deciding whether or not to have kids and they think about the cost of kids, like forget about, of course, you're going to dump hundreds of thousands or millions of dollars into your kids. And it's going to, it's like, if, if money is coming into the equation, like stop right there. This is, it should not do it. You're doing it for very different reasons. This is not an investment. - People, people buy houses because they think that they're making loads of money. - Because there have been periods of time in which people have made loads of money. Historically, like that's the anomaly. Historically in the US and the UK, housing prices adjusted for inflation go nowhere. It's just been the last 20 or 30 years that there's this very brief window of time that owning a house was a great investment. Robert Shiller won the Nobel prize about a decade ago for his work in showing that over the last 150 years in the United States, adjusted for inflation, most home prices have been flat as a pancake. It's just the last 20 years that have inflated people's expectations of what a house can do. - Statistically, there's going to be at least one person listening to this that has made an offer as we speak for a house under the assumption that it's going to help them stack wealth. If they were purely doing it for those reasons, what would you tell them to do instead? - If that's purely the reason, run for your life. Don't do it. Particularly, I mean, it used to be, and maybe it still is like this in many cities in America and the UK, but it used to be that rentals were almost without exception shitty houses. There were no good rentals. A big change, at least in America in the last 20 years, is that most big cities have tons and tons of luxury apartments to live in. And there are great places to live. And they're in the city centers and they got beautiful granite countertops and they're great places to live. Don't fall for the idea that you can't live well if you're renting. I think that's the problem. And realize that if you're doing it for financial reasons, you're probably about to borrow a shitload of money for an investment that historically has been a very bad investment. Like if you put it in those terms, like, what are we doing here, man? You're going to borrow hundreds of thousands of dollars for an investment that historically has been a loss. That's what you're doing here? You feel good about that? That's what I'd say to that person. Godspeed. - I would love to be in the room somewhere where that person has just looked at their partner after persuading them to make that offer because it was going to make them rich. - Sorry guys. - This new book, same as ever. Essentially, it's 23 short stories about things that never change in the world. There's a couple of really interesting things that I pulled out.

The Power of a Great Story (01:41:55)

One of them, again, which really hit me in the face, was this idea that the best story wins. I know this. I know this intuitively. I talk about it on stage, but I don't think people understand the power of the best story wins because when you think about entrepreneurship or investing or pitching or sales, what most people do is they lead out with facts, stats, and figures. And even, one of the things I've noticed about you from our conversation now is you have a remarkable ability to tell stories. - Thank you. - And there's a huge power in that. Prove to me that the best story wins. - I mean, it's always the case that it's not the right answer or the best answer or the mathematically accurate answer. It's just whoever gets people to nod their heads in the right direction, that's who's going to win over time. Some of the examples of this that I love, Ken Burns, one of the most famous documentary filmmakers of all time, most of what is in his documentaries is information that people already know. He'll make a documentary about the Civil War, World War II, Vietnam, whatever it would be. You're not necessarily learning something new in there, but he is massively successful, massively popular because he's probably the greatest storyteller of our time. So even when you're taking information that people already know, if you can spin a good story about it, you get people lining up and they will knock your door down to listen to you. One other example of this are people who tell comedy. If you're a good comedian, that's all just storytelling. And a lot of what a good comedian does is take something that's very obvious and simple, but you can tell a good story about it, you can make people laugh, and all of a sudden you get their attention and they'll remember it. - You said in the book, "Not the best idea or the right idea or the most rational idea, just whoever tells the story that catches people's attention." - I think there are dangerous stories, which is when people tell you what you want to hear. - I got a dangerous story. The vaccine gives you autism. - I think it's a story that people wanted to hear. Some people wanted to hear that. And if you tell people what they want to hear, you can be wrong forever and people won't care because you tell them what they want to hear. - Tally Sharot, who's a neuroscientist, sat here and she told me a story of Donald Trump stood on the debate stage and they panned over to Dr Tucker Carlson, I believe he's called, and asked him about the vaccine and he basically gave stats facts and figures. He said, "That vaccine doesn't give kids autism." And then they panned over to Donald Trump and Donald Trump tells this elaborate story about a friend of his. - About one person. - One friend of his, that clearly doesn't exist. One friend of his and he describes the needle like this. He goes, "This huge needle." - Yeah, so vivid. - Vivid, personal, and emotional. - And you get people nodding their heads to that and capturing their attention. - Tally said, "I'm a neuroscientist, I knew it was wrong. However, there was something about hearing it that even as a neuroscientist, I look to my daughter and go, fuck." - I think we've always been storytellers and that's what's really set humans apart.

Wealth Creation And Hurtle Facing

The Power of Compounding Interest (01:44:42)

That's a whole idea from Yuval Noah Harari, is that like what sets humans apart is our ability to tell and remember stories. And it's made it so it's just a tool to simplify facts in the world. Like most people, the other thing that's powerful about stories is that you remember them. And you think about in school, when you had a math test and the teacher just said, "Memorize this formula," to regurgitate it on the test, literally five minutes after the test is done, you forget it. You have no idea what it was. But if you remembered a good story, even that you were told when you were two years old, you remember it for the rest of your life. So it's just a tool for getting people to remember how the world works. And they can be so persuasive and so good at eliminating the uncertainty that grates on all of us. That people will listen to and believe things even when they're just obviously flagrantly not true if it's what they want to hear. People talk about, when we're talking about investing but generally life, people talk about compounding interest. And we all know that, I think a lot of people should know the power of compounding interest now. But we rarely think about how compounding interest can negatively, slowly impact our lives. And in your chapter about tiny and magnificent, you explore that. And again, this hit me like a truck in the face because I think I spend my time now thinking about how getting things to compound in my favor will change my life. But I don't spend a huge amount of time thinking about how things are compounding against me right now. Yeah. What's really true is that most good news happens slowly and most bad news happens very fast. So bad news is like COVID literally happens overnight. Boom. You got a virus, it's going to kill millions of people, shut down the economy, happens literally overnight. 9/11 happens start to finish. It's like 30 minutes. Boom, just happens immediately. Good news is usually slow compounding over time. So I use the example of the book of the improvement in heart disease mortality over the last 70 years is bonkers. We've made so much progress and saved literally tens of millions of lives in the fact that we've gotten better at treating heart disease. But nobody talks about it. It's like most people are not even aware that it's happened because if you look at what happened, it was the mortality improved. It got better by about 2% per year. Now, if you compound 2% per year for 70 years, it's off the charts. We're living in such a better world now than we were 70 years ago. But in any given year, you didn't even notice it. You're never going to see a news headline like breaking news, heart disease mortality improves by 1.4%. That's not a headline. All the headlines are bad news because bad news happens fast. So once you realize that, then it's like most of the news is going to skew negative, not because there's some producer who's trying to toy with your brain. It's just because what is obviously happening today tends to be the bad news where the good news is just very slowly compounding over time. That can go in the other direction of like bad news that compounds over time. I think about our health, smoking, health, like that's like in like one cigarette is not going to do anything bad for you, but one cigarette per day for 30 years is catastrophic. And so that's actually what it is like. Same with like getting one bad night's sleep. Not that big a deal. But if you're sleeping six hours a night, every night for years on end, you're going to reduce your life expectancy by a tremendous amount. - This idea of compounding interest and compounding returns and how important it is. I've spent so long trying to explain to people that compounding interest and compounding returns, this very hard thing to think about is so important. I imagine you have too. What is your go-to way of explaining to like your eight-year-old kid or someone else, the power of compounding? We were actually going to get like a bowl of rice here and I was going to do some experiments. - The rice is the best. The rice board experiment, if you're not familiar with it, it's this story that's probably not true that back 500 years ago, someone told the king, they said, "Hey, here's a chess board. I'm going to put one grain of rice on the first square, two on the second square, four on the third. And then let's do that." And by the end of the chess board, it's like more rice than exists in the entire world. Because if you double something again and again and again, it's just completely counterintuitive how big it can grow. The one way that I had a friend of mine, Michael Bannack, explain this to me years ago, I think he wrote this in a blog post. He said, "If I ask you, what is eight plus eight plus eight plus eight, you can do that in your head. It's not that hard. But if I say, what is eight times eight times eight times eight, forget about it. Even if you are really mathematically inclined, there's no way you can, very few people could figure that out in their head." Our minds are just not good at exponential thinking. It's just not something that we're really geared towards doing. Eight plus eight plus eight, it's so simple. Linear thinking, so simple. Exponential thinking, not intuitive in the slightest. And because it's not intuitive, it's so common to underestimate what smoking is going to do to you. That compounds over time. What investing is capable of doing to your wealth, because it's so counterintuitive that 99% of Warren Buffett's net worth came after he was 60 years old. Not intuitive at all. Since exponential thinking is not intuitive, both on the positive and the negative side, we go through life underestimating what's going to happen to us in good things and bad things. - It's like a religion we have to adopt. - I think that's a great way. It's like a mathematical religion. Because just like a lot of religion, it's not intuitive and it almost takes a leap of faith to be like, "I know it seems crazy, but this is what I believe." I think there's a sense of that too compounding where it's just math. You can just put the numbers in a spreadsheet and they'll tell you what it is. But since it's not intuitive, there's almost a religious aspect that you need to believe how powerful it can be over time. - Two of the chapters in your book, Same as Ever, speak to the importance of discomfort.

Bad Times Often Change Us for Good (01:50:15)

One of the chapters is called When the Magic Happens. And you say in that chapter, "Stress, pain, discomfort, shock, and disgust, for all its tragic downsides." It's also when the magic happens. And then the other chapter where you kind of speak to this is, "It's supposed to be hard. Most things worth pursuing charge their fee in the form of stress, uncertainty, dealing with quirky people, bureaucracy, other people's conflicting incentives, hassle, nonsense, long hours, and constant doubt. That's the overhead cost of getting ahead." - What's interesting is I never tied those two chapters together, but you're right. They're almost the exact same idea. That for the whole economy, for the whole world, when the biggest improvements in society takes place is when there's some sort of disaster. For all of its obvious downside and death and destruction, nothing has been more technologically progressive for the world than World War II. The number of inventions that came out of World War II from atomic energy to jets and like you go on down the list, penicillin, all of these lists for things that you and I are taking advantage of today happen not in spite of, but because of World War II. Because there was this period where everyone in the world came together and they're like, "Holy shit, we got a big problem to figure out. Let's put our heads together and figure this out right now." - But that's also on a personal level as well. - On a personal level, it happens as well too. There's a book written many years ago called The Upside of Down. I thought that was just a brilliant title. The Upside of Being Down. And it happens a lot that when you have, maybe it's a job layoff or a breakup or a medical emergency, whatever it can be, that it changes you for the good. And it's always impossible to see that silver lining in the moment. You don't ever imagine there's going to be a silver lining in that moment. But when you look back in hindsight, it will be. I saw this recent example of this that really knocked me on my ass. It was Stephen Colbert, who I might be getting these details wrong, but I think when he was a young child, his father and brother died tragically. And he said at one point that, I don't want to put words in his mouth, but he said something along the lines of, "He is grateful for that." And he was asked, "What do you mean you're grateful for that?" And he said, "Look, of course, I wish it never happened." But it allowed him to understand the emotions of other people and get closer to other people who had also experienced something like that. And so even as in the deepest, darkest moment of his life, that he says he, of course, he wishes it didn't happen. It taught him something about humanity that he's grateful for today. That's an extreme example. But I think for a lot of people, being laid off from a job in the moment is going to be the hardest thing they've ever dealt with. And in hindsight, it's going to be one of the best things that ever happened to their career. A breakup might be the hardest thing you've ever been through. And in hindsight, it might be the best thing that's ever happened to you. So that's always like, that's when the magic happens is when things get really tough. It's just always impossible to see that when you're going through it. A lot of people would have clicked on to this conversation. And if they've gotten to the end of the conversation, well done to them.

Wealth Creation Conclusion (01:53:03)

What conclusion can we offer them based on everything we've talked about as it specifically relates to wealth creation and money first? I think for both of these books, we're almost ending exactly where we started, which is like, I hope they get you to think about your life in a different way. Both of these books and the publishers hated this. There's no advice in the books. Never do I say, and therefore you should do this. And the publisher wants you to do that. And I said, no, no, no, because I don't know you. I don't know the person reading this book. Who am I to say what you should do with your own life? I don't even know what to do with my own life. But I hope it gets you thinking about what you want and who you are and what you are capable of, what you're not capable of. If it gets you thinking about your life, then I think I've been successful doing this rather than trying to assume that I can give you specific advice about what to do. - Morgan, we have a closing tradition on this podcast where the last guest leaves a question for the next guest, not knowing who they're going to be leaving it for.

Closing Question

The Last Guest’s Question (01:53:57)

And the question that's been left for you is what is your biggest regret in life? And how has that experience changed you? - I think I've always been prone to mild depression, not significant, but mild depression and anxiety. And I wish I could go back to different periods of my life in a time machine and just say, it's going to be okay. It's not going to be easy. It's not going to be perfect, but it's going to be fine. And I look back not with regret, but how much time have I wasted worrying about things that never happened and were almost certainly never going to happen? A tremendous amount. And even if I recognize that today, I know I'm going to worry about something tonight and tomorrow and next week about something I really shouldn't be worrying about. I don't know if I regret it because I think having a sense of worry has kept me safe a lot of times. It's kept me out of trouble in a lot of things. But I do look back at the course of my life and think, man, I could have been happier than I was if I had accepted a certain level of just telling myself it's going to be okay. - Well, you're not going to have to worry about your book because it's superb. - Thank you. - Genuinely, I hope my audience trust me, but I would really implore them to get both books. I mean, The Psychology of Money, I think is the best book on money ever written. It's pretty much also the only book I've ever read on money. And then Same as Ever is just, it's everything. It's advice on money, life, relationships, everything that matters because they're a set of enduring principles that speak to the fundamentals of life in a way that is completely enduring. You have a wonderful ability to write enduring things and you tell wonderful stories. Like you said, I actually didn't even notice that you didn't give me advice. When you said that, you've not given me advice. - No, and I never will to anybody. - But now you think about it, you didn't. I garnered my advice from the stories you told and the evidence you provided. Morgan, thank you so much. I'm so glad we've managed to have this conversation and it's been a huge honour and pleasure to meet you. Thank you as well because I can't imagine how many millions of pounds you've saved me by writing this book. Genuinely. - It's such an honour to do this with you, Stephen. It's been a lot of fun. Thank you. - As you'll know, this podcast is sponsored by H.E.W.L. and we're going into that last quarter of the year. It's getting a little bit colder, back into our routines, back into our work rhythms, and it's in those moments that I need to focus most on my diet. As I get back into the swing of work, I need to get back into a routine as it relates to my diet. And that's really where H.E.W.L. 's RTD, their ready-to-drink range, comes in handy. In a bottle, you have a nutritionally complete meal that you can consume in a minute. So this is a real lifesaver in terms of my health. It is my ally and my friend and my companion on my busiest days and it means that even when I'm pursuing all of my professional goals, my health goals can be pursued at the same time. There's a link in the description below. If you've never tried H.E.W.L. 's RTDs, this is the time. If you've fallen off with a wagon, this is the sign you needed to get back on. There's a link below in the description. Order yourself a pack. Stay healthy throughout this busy period. Do you need a podcast to listen to next? We've discovered that people who liked this episode also tend to absolutely love another recent episode we've done. So I've linked that episode in the description below. I know you'll enjoy it.