How To SURVIVE & THRIVE In The Upcoming Financial Crisis! (PREPARE NOW) | Ray Dalio | Transcription

Transcription for the video titled "How To SURVIVE & THRIVE In The Upcoming Financial Crisis! (PREPARE NOW) | Ray Dalio".

1970-01-30T21:06:46.000Z

Note: This transcription is split and grouped by topics and subtopics. You can navigate through the Table of Contents on the left. It's interactive. All paragraphs are timed to the original video. Click on the time (e.g., 01:53) to jump to the specific portion of the video.


Introduction

Intro (00:00)

It's the same for every individual, same for every company. If you understand this, look at your income, expenses, and your savings. And then do a stress test so that you get yourself secure. The same things happen over and over again through time for basically the same reasons.


Understanding The Economy And Stock Market

1916 to 1982 (00:16)

A lot of these things happen once in a lifetime, you know? And if you don't go back and see how they worked over time, then you're in trouble. So there's a pattern-- I could describe the pattern-- but there's a pattern that happens over and over again. And we're in a particular spot in the pattern. And then to understand it not just because it happened before, but to understand mechanistically how it happens, and then one has a sense of how to deal with it. So speaking of the mechanisms, what's influencing this more? When you started looking back into history, are you looking for this sort of moment in the death cycle? Or are you looking for pandemics, a collision of the two? What do you think influences this more? Well, pandemics come along occasionally.


World.This is why the stock market is on the rise. They've been (01:11)

But anything that's important-- let me say the three most important circumstances that existed before we had the downturn, which was caused by a pandemic. But any downturn would have produced the same results. The three most important things that are happening in the world now are that we're at the end late in a long-term death cycle in which central banks cannot control monetary policy the same way. They can't lower interest rates. They can't get money to a lot of people who need the money in the traditional way. So just like in 1929 to 1932, there was a debt crisis that came as a result of an excessive amount of debt in the boom years. And then when you have that in 1932, we hit zero interest rates. And when they hit zero interest rates in '32, like in 2008, central bank prints money and buys financial assets. When you talk about financial assets, this is one thing that even I found myself a little bit confused by what is a financial asset? Well, mostly bonds. Central bank is allowed to buy bonds, and mostly government bonds. So if you were going to describe what a bond is, like what's the easiest way to think about a bond? When someone borrows for a number of years and has to pay back, that makes a promise to deliver currency, that's a bond. And so one man's debts are another man's assets, which we call a bond.


Using currency to buy bonds from private companies and from (03:00)

And that is a promise to deliver currency. And so what happens in these cycles is that normally central banks can stimulate the economy by lowering interest rates. But when you hit zero interest rates, that doesn't work. So the last time it hit zero interest rates was 1932. And what they did in 1932 was the same thing they did in 2008. And that is that the central banks prints a lot of money and buys government bonds. And so we're doing that now. And just to be clear, the reason that they're doing that is so somebody has bought a government bond. The government is basically saying, hey, you, dear person, lend me the money. I'm going to build something, roads, whatever. But I'm going to pay you back in a year, two years, 10 years, whatever. Plus interest, I would assume. That makes it worthwhile. And the reason that the government is going in and buying those is to get back liquidity to the people that have loaned them that money. Yes, because think of it this way. The central government, and also companies and individuals, don't have the capacity to create money. So the central government has the right to determine they can tax people, they can get money from people, and they can spend money on whatever they want to spend money on. But they don't have the right to print money and create money and credit like the central bank does. Central Bank is the Federal Reserve. Similarly, the Federal Reserve does not have the right to spend money and determine how it's spent. That's for Congress. All right, so before-- because this can get so confusing, and I'll play the role of the laymen here and just make sure that we walk through things. So the Federal Reserve, I think most people think is the Department of the government. But they're not. Are they a private bank?


Is a network established by congress. (05:09)

No, they're a part of the government that the system has put into place so to get the creation of money out of the political system. OK, so it's sort of outside of the political sphere of the government? It is within Congress, but it has a set of rules like the Supreme Court has a set of rules. That means that the president can't control it. The Congress can't control it. That it's operating in a separate way. And so the important thing to know about this crisis and that it happened in the 1930s is that in order to get the checks that we're needing, a lot of people, a lot of companies need checks. Now, where will those checks come from?


Three to thee get the checks Stuff needed checks, so where will (05:59)

So there'll be checks from the government. The type of support we're going to receive is two types of support. Where does all this money come from? So the government, when they say, I'm going to pay more for unemployment insurance or I'm going to give you a loan for a small business or so on, where they get the money from. Well, they either tax it, but if they tax it, that's bad.


The government has the power to create moneyit can print as much as it wants simply by considering money to be a liability (06:16)

So the government, they can borrow it. That's what a deficit is. The government runs a deficit. And then the question is, who's going to borrow it when everybody's financially strapped? And the Federal Reserve says they have the power to print money and they will say, I will borrow it and I will lend you the money. So the Federal Reserve is lending the money and it is also lending others the money. - All right, so when they print money, are they literally sending a brink struck with bags full of cash and distributing it through local banks? - No, money is digital. - Okay, so they're literally just making ledger adjustments in a digital file some more. - Right, the important thing to know is that all that we think about money is not limited in any way like there's a certain amount of money out there. It's all make believe. It's all digital. So they could change the digits and then they can create money. Now that's an important consideration because if they can create money so easily, how do we know it's going to be a value when they're creating a lot of it? That's one of the considerations that are being faced today. But the main thing to know about this, stepping back for the big picture, is that every individual, every company and every government has a certain amount of money that comes in in the form of income, a certain amount of expenses, that and then a certain amount of savings. So you do individually and all your listeners do. And it works the same way for everyone so that if their income falls and then less to be less than their expenditures, they're in trouble unless they have a good savings. And then they go to the savings. So all around the world, there are lots of entities that are in trouble in that way. So the government, the two parts of the government, the US government, two parts want to give checks to people. Now it's difficult to decide who gets it, who doesn't get it. But if they don't give checks to people or to companies, those will go bankrupt because they may not have enough savings. So you saw J. Crew went bankrupt, just went bankrupt. And you'll see others go bankrupt because they don't have enough. And so when they go bankrupt, then that's a whole other process. So in order to prevent that, they have to give money. And so they print money, we call it print, there's not even paper much. It's digitally create money. And then that comes in the form of loans. Okay, so basically they're digitally creating money, which they're allocating to the government. And then the government is deciding how to disperse those funds. - Yeah, the Federal Reserve will buy government bonds. So it's a transaction of buying it. And they will also buy private bonds. They might pick a company, many companies, and they'll say, "I will buy your bonds, which is the equivalent I will lend to you." And that's what happens. And that's happened through history. So what we're going through is the same process has happened in the 1930 to 1945 period. So as I was saying, there are three important things. That is one. The second is large wealth gap. Third is that we have a rising power in the form of China emerging to compete or challenge the United States leadership. So when you have these three things together, it's a challenging mix and it's happened repeatedly. Less effective monetary and credit system makes it, they have to print a lot of money, can threaten the value of money, second, when you have a large wealth gap and you have an economic downturn, people are more inclined to have conflict. So how that's dealt with, we're gonna reconsider how we're going to, that wealth will be divided. And that'll change taxes and relationships. And then the third is we're no longer in a world order where the United States is the only dominant power. These three things existed and the most important things existed. And then we had the downturn in terms of the virus.


The economy is more predictable than disease (11:32)

So you could think of the virus like being a tsunami that came and if it went, and if we had not know more of it, it still would have left a lot of economic damage. So in all different ways. So the economic damage has to be understood and dealt with. - Yeah, so the understood and dealt with is exactly why I wanted to talk to you. So I think that people that are familiar with finance, financial institutions and how the economy works and all that, they'll find their way through this. But for the average person who doesn't understand a lot of this, like when you look at this historical perspective, I find a certain level of comfort in that because of the notion of another one of these, right? So we've seen this before, maybe we haven't in our lifetime, but historically people have. So what can the average person take away from that? They don't have bonds, they don't think like that. They may not even understand what their 401 is or they may not even have a 401. So how do they navigate this? Is it just head down, do your best to whether the storm or is there actually something that they can learn from the historical perspective and move on now to make this easier for them? Yeah, it's the same for every individual, same for every company, same. And if you understand this, then you understand, well, there are three things. The first is, look at your income, your expenses, and your savings. And then do a stress test. So that you get yourself secure. If you were to lose your income, or if the income were to fall beyond a certain level and you play that out, maybe that means you go get unemployment insurance or whatever. How long can you live in an acceptable lifestyle? And do you have a savings that is adequate for that? Okay, so what you do is you calculate, if I lived in a simpler lifestyle and I had this amount of earnings, how many months? How many months or years could I live acceptably? Then you look at your, what do you put the money in? What do you save in? Don't you worry about that there is a level of financial literacy. So you're saying the basics, right? And there's no question like, get your blocking and tackling right before you start trying to get fancy. But Ray, I have legitimately started losing sleep over, like how we help the average person through this. I'm not a guy, I don't lose sleep over much. But when I stop and think about, most people I think the stat is the average American, if they're hit with a surprise $500 bill, they're not able to make it. They are living month to month. You've got 30 plus million people now out of work. It's trying to figure out like, definitely basics, right? You've got make sure that you're spending less and you make austerity first, cut, cut, cut, get your expenses down to as low as I can, 100%. What I'm hoping for is that there's, I don't know, there's something that we can see in this kind of transition where either you've got a new rising power and there's opportunity with that, I'm trying to find that sort of ray of hope for people of what they can do to be proactive either to generate more income if they've lost their income or to be more proactive in their 401K. I think about personal finance the way I think about health.


What can the government do to fix the economy (15:29)

And right now, I worry that people are outsourcing everything to somebody else, to the government, they have a wait and see approach. And what I'm desperately trying to figure out for myself is what level of pro-activeness of learning about their health they can do to try to weather this storm? Because short of just saving and cutting expenses, and maybe that's it, maybe there isn't any more that they can do, but I guess that's my direct question. Is there something more? - I mean, you know the parts, right? It's income expenses and savings. Okay, now you can go get the money, maybe the money comes in and you say, okay, my unemployment benefits are gonna be this or my this is, but those are the parts. Then the issue is how clever are you at dealing with those?


Voting & what insiders are paying attention to (16:29)

- Let me ask it another way then. Who should they be voting for? Like when you talk about a beautiful deleveraging, which one, you should probably define that. So you've looked at this stuff so many times, it's really, really quite breathtaking. But there are ways to do this well, there are ways to do this poorly. We're in an election year, I consider myself like the most apolitical human being on the planet, but when I stop and think about, okay, well, if I'm an average person and let's say that I'm really doing my best, I'm doing the blocking and tackling, I'm saving what I can save, I've cut my expenses back, I'm earning what I can. Let's hope that they either have kept their job or were able to quickly get another job. How should they be thinking, like, what is the right way to go through this deleveraging out of a political level? Maybe politics is the right word, but like at a higher level. - Well, I don't know what you want me to say. I think that each person should understand, there's a certain level of basic understanding. First take care of yourself and then, you hope that you have smart people who I think will most important thing is that they're smart in being able to engineer an economy that will increase the size of the pie as well as divide the pie well. And then also that this is done in a non-entagonistic way. Smart people working together in a bipartisan way have the capacity of managing this wealth. So if I was giving political advice, and that's not what I do, but if I was giving political advice, the most important thing I think is who's got the intelligence to do the engineering, plus to do it in a manner that we are not fighting with each other, that what history has shown us is that when things get difficult, people get stressed and they can get angry and they could all fight with each other. And that produces the next leg of a terrible economy because the economy won't work efficiently if people are fighting with each other, the system doesn't work well.


Historical wealth gaps, recovery, war & social revolutions (18:18)

So one would have to say, who's gonna bring the country together behind sensible, I would say bipartisan programs, because if you don't have that, then you have a form of revolution and you don't have good management, and that's the greatest risk, I would say, politically. - So looking at the historical perspective, who has done this well, and then what have been the stakes that have led to literal revolution? - When you say who has done it well, what do you mean? - What countries or what periods of time has going through this kind of crisis been managed well, so that we come out the other side with as little sort of pain and suffering as possible? - Well, an example of well would be the differences in the way Roosevelt did it. So again, 1929 to 32, interest rates hit zero, they print money, we had a large wealth gap, and then they sat down and they figured out how do we keep it orderly, and how do we change the circumstances with whether it's taxes or how do you reorganize it so that the system works well? There is a risk also at the same time because the world is going through that. There's a risk of conflict. So in Germany, Hitler came in power in 1933, and he came in power in 1933 because there was a lot of internal fighting as to try to bring produce order, because everybody the left and the right, the communists and the fascists, and they're all fighting about wealth because everybody's fighting about wealth when you have a downturn. And then they were democracies, four democracies existed then that chose not to be democracies because they became so disorderly that they wanted some strong leader to take charge and run the country. And then of course, we had a bunch of those types of leaders and then they had a war. That's how war and war two happened. So when you look at that, that's kind of the political landscape, but back to the average man in terms of his finances, I would say the important thing is those three elements to have a plan and maybe to have a plan with both your family. You know, how do you get down when things got tough and you know, and then you have to look at, you know, what happens in policy? Well, policy depends on the person. Some people would understand more about policy than other people if, you know, so it depends on what they should do, depends on what they're able to do well. - As we sort of step back and start taking a longer view of this, what's the role that you see education playing in?


How Education Became Ray's Most Important Issue (21:52)

I've sort of, when I grew up, it was just assumed I was gonna go to college. I did go to college and I would have for a very long time told everybody they should be going to college. Now I've sort of cooled off on that in terms of the debt that people are getting into. I know you and your wife are working a lot in the school system there in Connecticut. How do you think about that? What's the importance of education in, you know, when we start thinking about protecting successive generations, how much of that comes down to education? - Education is the most important thing. I was raised with a very modest economic background. My dad was a jazz musician. My mom was a stay at home mom. And, but I was lucky to have parents who cared for me. And I went to a public school and I got a good education and I came out to a world of equal opportunity. And I believe that those are fundamental necessities that you have to know how to have an education of, you know, facts like, you have to know how to read, write and arithmetic, but you also have to know how to behave well with others to be a good citizen, operate in a civil way, to be able then to go into jobs. And that education can be anything that works. I think the big thing is, you know, three big things on what I think work should be. Make your work and your passion, the same thing and make it economic. If it works that you love your work, you'll probably be better at your work. And then you find the, so you want those things and then there's the economics of it. And so it could be anything from learning trades, whatever it may be, education certainly does not have to be college. College is over emphasized. And having a good productive career, when I watch these remarkable people who are on the front lines of dealing with this virus situation, and I look at them, the greatest, some of the greatest people are the people who have the capabilities of doing certain things that are not, have nothing to do with going to college, and they're on the front lines and they're contributing a lot. And so we, so in education and civility, but that means that there has to be equal opportunity. So yes, what my wife and I have done is we're particularly heartbroken or disenchanted with poverty affecting children and high school students having the equal opportunity of education. So our particular focus in Connecticut, we made a donation, a large donation, a $100 million donation to the state of Connecticut for them to match and are working to get those students through high school, but it could be trade school and into jobs and to be able to be productive. So you look at all societies and these are the things that matter most. The society becomes a fairer society when there's equal opportunity for education, and also it becomes a more productive society because the opportunities when extended throughout the whole population means that you get more people on the basis of merit. Right now that system is not operating in a good effective way. For example, people in the top 40% of income will spend about five times as much money on their children's education than those in the bottom 60%. And that's neither fair nor productive. So I think that these types of questions are gonna have to be examined by policymakers in a bipartisan way as we go through this, but yes, you answered your question, it really starts with good total education, the good raising of children in terms of their actual formal education and their informal education, and then going out and having an environment of equal opportunity. - What is up my friend, Tom Bill, you here? And I have a big question to ask you, how would you rate your level of personal discipline on a scale of one to 10 if your answer? Is anything less than a 10? I've got something cool for you. And let me tell you right now, discipline, by its very nature means compelling yourself to do difficult things that are stressful, boring, which is what kills most people, are possibly scary or even painful. Now, here is the thing, achieving huge goals and stretching to reach your potential requires you to do those challenging, stressful things and to stick with them even when it gets boring and it will get boring, building your levels of personal discipline is not easy, but let me tell you, it pays off. In fact, I will tell you, you're never going to achieve anything meaningful unless you develop discipline. All right, I've just released a class from Impact Theory University called How to Build Ironclad Discipline that teaches you the process of building yourself up in this area so that you can push yourself to do the hard things that greatness is going to require of you, right, click the link on the screen, register for this class right now and let's get to work. I will see you inside this workshop from Impact Theory University until then my friends be legendary. - So one thing that I know you have leveraged to tremendous effect and this is the very thing I took from principles that changed my life is to stress test your ideas, to put them out there and ask how do I know I'm right.


How You Can Outperform Other People at Work (28:02)

So like I said, I've really been losing sleep over how I can be most helpful in helping people navigate all of what's happening and I have come to a conclusion that could be pure delusion and I would love to know what you think, it's along the lines of education which is why I was asking about that. So my obsession is skill acquisition. I think that, so the advice that I've been giving to people if you've lost your job or not, like we have spent probably the last 10 years, maybe more in an employee ease market, they've really had this election. They've been able to put a lot of pressure on employers and now you're seeing a flip and you're seeing this is gonna be an employers market. There's gonna be a lot of people, obviously there's north of 30 million now, it's gonna be a lot of people looking for work and my thing is if you wanna get your ideal job, you wanna make your passion something that you're able to pursue, you've gotta be able to outperform other people and I would say the same thing to a kid that's coming up, somebody that's about to graduate, whatever, like you've gotta be better than the next person. You've got to build a skill set that allows you to excel and my thing is like you are living proof of one simple thing. If you can outperform people, there really is no cap to how far you can go. You put your money where your mouth is when it comes to an investment strategy, obviously with Bridgewater, you guys have just outperformed people, it's really been quite extraordinary and yes, people need to save, yes, they need to focus on where they're getting their income from, they need to practice austerity measures, all of that, but ultimately people can propel themselves forward if they're out there learning, growing, getting better, pushing, I would go so far as to say even being aggressive to try to continue to move up, but it comes down to recognizing that skills have utility, they actually let you do something, they let you out invest somebody, they let you build a better house or a better bridge. And so what I want to see people do through this time, I just think most people will be obliterated mentally, they're going to get scared, they're going to panic, they're not going to be able to think clearly and they won't put themselves on a path to excel. So wonder what am I missing it because I know that people don't, that is not a popular thing to say right now, that's something that I get a lot of negative feedback from people, it's like basically, pull yourself up by your bootstraps. So I'd love to understand like, where the flaw is in that thinking, where when you talk about the, they're not being equal opportunity, one, what can people do to write that ship at a personal level? I get at the higher up systemic the way that we address it through policy and things like that, but at a personal level is there something people can do? - Well, I think you're exactly right, I think that though is short of specifics and that particular action and the question is, who can help them?


Self-Discovery And Overcoming Struggles

Who can help with grit? (30:59)

So yes, if they're wily and hard working and clever enough, they still need triangulation and help to find out where is the training program? What is that skill? They can't do it alone, they have to do it with the help. I would recommend, I did two 30 minute videos, one is principles for success at 30 minute YouTube video and it's about an approach to life that a lot of people, something like 14, I don't know, a lot of people have seen this and I would say it's worth your 30 minutes, I think in terms of an approach to life. And then there's also, if you're interested in the economy, I did a 30 minute video, how the economic machine works in 30 minutes and that had a lot of use, more 14 million, I think, and it was like, so I can't tell them in this very brief interview how we're going to exactly who will get them that training and that capability, but I think you're right, skill that you love, set that sales is what you need. Now you go to, each person has their own particular way of possibly getting that. To some case it might be a start, low in an organization and work your way up. To some cases it may be a government training program. To some cases it may be a relative or a friend who can get you going and so on. As I said, one of my main principles is there's always a path out there, you just don't happen to see the path now. So you have to find the path, if you find that path and you can't find it alone, the way you find that path is to speak to other people, get many ideas by other people. And then you have to keep yourself trial and error, you've got to keep at it. Like when you're getting a job or getting a skill, it's a lot of trying and so that requires a certain amount of discipline. And if you have a discipline problem, get help with the discipline problem, have somebody kick you out of bed or whatever it is that you can get there. There is a path, you just don't see the right path at the moment. So many aspects of life are more actually the opposite convention. Like comfort, it's comfortable. Well, look, life teaches you over and over again. You wanna get stronger? Okay, it's not comfortable. You wanna, okay? So stronger does not go with necessarily comfortable. Pain, okay? Pain plus reflection equals progress. Pain is a teacher. You wanna eliminate pain from your life? You're gonna have a better life? No, no, no, because it's given you messages, okay? So so many different things are the opposite of what we're taught. And it goes down to even the education system, okay? You failed. Hey, that's the beginning of a discovery process. That's a good thing, okay? Okay, now how do I look at failure and learn from failure? No, you're stupid, you failed. - How do people find out like their nature?


Self-discovery (34:52)

And do you think of us all as having a sort of true nature? And then from that, how do people decide on the paths of accomplishment or savoring? And what to define those for people? - Yeah, there's a couple of concepts in there, so I'll, and they're related, but I'll pause. First of all, on the nature, it's really a self-discovery process. Discovering what you want, discovering what you're like, like you were describing your various cases where you're discovering what you like and then you go through that discovery. And the best way to do that is to wanna do that, right? It takes an hour and it's a self-discovery thing. - Did you get it? - You created it yourself? - Yeah, and we've used others, we've used Myers Briggs, Team Dimension, Workplace Inventory and so other, and then we move beyond that. The main thing like is, if you want self-discovery, then you'll find your ways of getting the self-discovery. They'll appear all around you. And yes, you have your nature, the thing that pulled, don't be around pagan square whole, find your nature, what's going to flourish and make your, that's why I said when you were talking about your development, mine too, make your passion and your work the same thing. Know what your nature is, yes. So I believe in terms of that particular nature. Then we get to the particular of one of the big choices in life is, save your life or accomplish. Like we have a lot of choices in our lives and they're almost sort of mutually exclusive sometimes. I wanna go to the ball game and I wanna watch movie and I wanna do that and I just wanna sit back and on a nice day and smell the roses. Okay, simultaneously, I wanna change the world. Okay, I wanna change the world and I've got this. Or the work-life balance question and all of those. We face those types of choices, right? So it's really important to go above oneself and to reflect on that. And also by the way, to realize that the choices are not, you're approaching the choice wrong when you often see it as kind of that trade off because the truth is you can have a lot more life and you can have a lot more if you just know how to get more out of a minute. How much do I get per minute or how much do I get per hour? Do you have secrets on that? 'Cause I will take them off. Well, there are a number of them in here and we can talk about them. But the capacity, rather than we do all have to face our choices. But to also realize that you can expand how much life you're gonna get out of life and how, at that range, if you really do it well. So there are those choices, which are those choices and we face them and then you have to decide how to do them well. Give me a couple things that I can do to get more out of a minute. First of all, if you do make your passion and you work the same thing, then it's great, right? Because you're a passion, whatever it might be, you're a painter or you're an entrepreneur and whatever that is. And you find that more enjoyable than going to a ballgame, let's say, then that's becomes a passionate thing. That's one thing. Second, to know how to work with people who can do things really well to get the most leverage out of people. Okay, third, how do you get yourself really one of the right work habits? Anyway, there's a whole bunch of those kinds of things where how do I just, what you say, how do I get it done without me doing it? Who's the best to do it and how do I get it? All of a sudden you open yourself to up to all different possibilities of how you can do that, right? No time. I think Tim Ferris wrote what, the four minute or the four hour-- - Work week or something. - Work week or something. Okay, for our work week, okay. Or, okay, there are approaches, all those ways of being able to do that. So I just gave you a few.


Struggle Well (39:35)

- What are the elements of struggling well? What does it mean to struggle well and how do we do it? - Well, first, that's why that phrase, I use the phrase, struggle well or tough love. Okay, I put those words together because that exemplifies the fact that people don't think they go together. And so if you start to realize struggling well is what will get you what you want, okay? Rather than avoiding struggle, that's what I'm trying to convey. And so if you realize that, then you will go to the struggle. You won't be averse to the struggle. And you will think, and then under that in the book, I wrote all these different ways of what it means to struggle well, okay? How you have thoughtful disagreement, how you listen to maybe you're not good at that or not, how you learn, how you navigate all the ways through that so that you get stronger. Because if you don't struggle, you won't get stronger, okay? So struggling well, go above it, you know? Okay, struggling well, a big element is to go above your struggle, just like you did. You look back and say, okay, am I struggling well rather than be in it and doing those things? So there are a lot of different ways of how to struggle well, but if you know, okay, that struggling is a good thing. Okay, if you wanna be strong, it's a good thing. I'll give you another example. I have a saying, if you worry, you don't have to worry. And if you don't worry, you have to worry, okay? Because what I mean is, if you're worrying about what can go wrong, you chances are you will create the protections against that thing going wrong, and therefore that's good. And if you're not worrying about the things that are gonna go wrong, then they'll probably, the things you never expect are gonna come and hit you, okay? And so it sounds counter-intuitive, if you worry, you don't have to worry, don't worry, you better worry. But what it means is that process of, okay, go to the thing, go to it and enjoy it. View these things as puzzles, your personality will change, you'll enjoy it, okay? Because life is a puzzle. It's a going through the jungle, okay? It's like that, I'll tell you a story, yeah. So I crash and I figure, oh, risk and reward go together. You wanna have a great life, okay? And you wanna be safe at the same time, they sound almost like mutually exclusive, okay? So I viewed it as, okay, I'm like sitting on one side of a jungle, and that, if I can get to the other side of a jungle safely, I'll have a great life. But, okay, but if I cross the jungle, oh, all sorts of things gonna happen. Now, what am I gonna choose? Am I gonna be on this side of the jungle and have just an ordinary life? Or am I gonna have what I think is the best life possible, but, ooh, I can get bitten and all those things, and that's just the nature of life. And then I said, I have to, it's my nature, I have to have the best life I can have, so I've gotta go into the jungle. Now the question is, how do I go into that jungle and be successful at that? And I could tell you the answer. The answer is, first, by worrying about what I don't see that I might be wrong with, and to do it with people who see the things that I might not see, and we are all doing it as a mission to get through that jungle well together. And when I went through that jungle and we do with that together, the thing I found out which is so wonderful is I don't wanna leave the jungle. I don't wanna get to the other side because I wanna be with those people on that mission, and that whole experience becomes great. So I found my way to be successful in the jungle to get to the other side, and I found out what really is a great reward. - Yeah, that's extraordinary.


Enjoying the Struggle (44:05)

And that resonates with me so hard about really enjoying the struggle, and A, that's what's making you stronger. B, there's just something innate, certainly with a certain personality type, that that is what you're going to love, is that fight and reaching your limits and pushing beyond them. Now I'm curious, is there gonna be a struggle for you in the third phase? Is there a new jungle that you're going into? So you quickly define that for people. You said in phase one, you're dependent on others, you're essentially a child and you're learning. Phase two, you go to work, other people become dependent on you, and then at the end of phase two, you pass it off to other people, you want them to thrive without you, you give them the knowledge and the wherewithal, and then in phase three, you do a lot. - Save your life. You save your life. - What's that gonna look like for you? - It's the freedom to do whatever you want to do without obligations. It is the realization that you shouldn't and it's not good to control anybody, it's just savoring life. That you have, you can do anything you want. You go to freedom.


The different phases of life and what they mean. (45:17)

- There's a life arc. - Yes. - There's a life arc and in, I put together, this book is a 600 page book. I also then was asked by a lot of people to make a simpler version about principles for success into a little book. And I'll be out, we're putting it out on the newsstands, you actually could be pre-ordered on Amazon. And in that book, I show a life arc and I track through what are the various phases of life and what, what is the happiest phase? What is the least happy phase and how does it work? And I could take you through all that if you're interested. - I'm very interested. - Okay, well, it depends how much time we got, but okay. - It may be the slightly nutshell version. - Okay, the nutshell version is you start off and it is very, very, it's a really enjoyable phase in life. You start to have, start to experience responsibilities like junior year, okay, do I get into the school? I wanna get into it or whatever, that's quite common. College is great, it's exploratory, come out of college. There's the most amount of freedom you have. So that transition and school come into now the new phase of life is totally different than the first phase of life because what it means is you don't follow any track. All through there you are following track and the direction of others. And now you could live anywhere you want, you can pick any job you want, you could do anything you want, you have total freedom, there's no guide, you can do anything you want and you have that freedom. And you move forward with that and then you start to make decisions and you start to take on obligations. You might get married, you might have kids, you have jobs and you take on that. And the least happy period in life by surveys of happiness is 45 to 55, okay? Because then you have the work-life balance and the obligations and too many things to do. And then maybe it's not as idealistic, idyllic as you want, you know, ah, you get into the marriage and whatever it is and then maybe it's not the marriage that you expect or the things that you're having and all of those things. That's a difficult phase of life, that middle part of that phase in life, 45 to 55 and so on. And then people transition. It's interesting and opposite then when I would have expected that the happiest phase in life is between 1680. And you know, the funny thing about it, which is really funny, they ask people, how good do you look? And they rate it the highest at that age. Now that's not true, right? But what happens is people at that point feel more comfortable with themselves in various ways. When you make that transition, you're eliminating all of those obligations. You're eliminating all of those things. You're giving yourself free. I don't have to take care of it. I savor on my family's well without me or whatever is, ah, I've got the free time. I could do whatever I want to do. That doesn't mean life isn't exciting. I find life very exciting. I'm very vital. I like those types of things. But totally free of choice. And you also savor the life arc, you know? Even as people approach their death, they approach the death in a whole different way than what death seems to be for people in their early years, right? Oh, you're a terrible, terrible thing. No, it's just part of that particular process. And how do you do that life arc? And ah, the curtain goes down. And that is a different phase in life. So my responsibility now is to pass along what I'm doing. Like, right, I got plenty of money, so I'm not working for money. I'm giving away plenty of money because it helps and whatever. And I'm just passing along. I'll have that life arc. And then I'm going to go quiet. And I'm going-- and I savor life. And yeah, I could just-- I love nature. So I go outside in nature. OK, that has a big effect on me. I love it. So that's what the third phase of my life looks like. Yeah, man, the whole notion that you're living an arc, that there are phases, I think, is really important. And I don't think enough people recognize that your frame of reference will change as you move from phase to phase. And what was important to you in one phase will not be important to you in the next. And because I was thinking as you were talking, I was like, I personally don't believe that you can skip a phase. I don't think that certainly not with my personality and probably not with yours, it's not like you can skip the accomplishment phase and go straight to the savor phase. And I thought about that. My wife and I have made enough money. We could buy an island and retire and just be done with it. And when I really thought about how that would make me feel, didn't seem like it would make me feel the way that I want to feel. Because I still want to be in the jungle. But as I hear you describe the savoring, it's like, yeah, I get how my life could get to a point where that's what I would create. Yeah, you see, what I'm hearing you do well is you're looking down on yourself again. You're describing. I'm looking at how I feel. I'm looking at-- so you're connecting the feelings with the thinking. So that's true. And in terms of-- no, of course, there's a sequence to that life. What I did in the book, which would be fun for people to do, is I show all the different markers in all the different phases and little boxes next to them. And so what they can do is they can check where they are. They know exactly where they are. And then also by showing them what they can expect. Because if you're here on that arc, you can expect these things probably as you're going, check, check, check, those are the things. Now you can start to imagine, where do I want to be in 10 years? And also, where are the people I love? Who I care about? Or what are their relationships? Where will they be? Where will my children be in 10 years? And what will they go through? Or what will my parents? Where will they be in 10 years? And how will that relate to how I want to have my life go? And it's the same thing that you'll see. The same things happen over and over again. All these lives are basically kind of the same things. And when you put that in perspective, and you step back and you look at it, it's really great. The notion of it's another one of those. And I say that in a way designed to remove fear and uncertainty, which is something that paralyzes so many people. And I think one of the things you've really given certainly me and anybody who's really deeply come in contact with your work is that sense of there is that higher perspective that shows that you're not the first person to have a child.


Gaining perspective relieves fear and uncertainty. (52:01)

You're not the first person to embarrass yourself publicly. You're not the first person to go through whatever heartbreak or heartache that you're going through. And when you can contextualize it, then you get to another thing that you've said, which of course, Buddhist has been saying for a long time, this too shall pass. Like whatever hardship you're in the middle of, or whatever joy you're in the middle of, it's all part of a cycle. And so all of it will ease in the end. And so, yeah. Yeah, and your preferences will change. Realizing how it works is so great, because the thing you love at 10 is different than the thing you love at 20 or 30. We all can think, what is the thing you love to 20 or 30? Right. Woo, that was fun. And then you go to 40 and you go to 50 and they change. And to realize how they will change and you move beyond, it's beautiful and it's helpful.


Personal Growth And Managing Uncertainty

knowing your strengths and weaknesses, and progressing from there (53:10)

The most important thing I think is to know your nature. What is your nature? What are your strengths and weaknesses and your likes and your dislikes? And once you know that, then you also think, what are the fits? Oh, I would like that job and the job could pay me well. And then you figure out, okay, how do you do it? How do I get to it? But there are different people in different circumstances, so I can't answer them all now. Yeah, I agree with you. So I want to go back one. Thank you for the feedback that I was being super vague. I think that's really helpful. So let's start getting really specific. As much as we can, knowing that people are going to be sort of at very different places as they're hearing this. But I think this will be helpful. So one, the video that you're talking about, and I'll speak for you and correct me where I go astray, but I watched the video multiple times. I think it's really extraordinary. And basically, to put it in a really small nutshell, it's basically go out, try things, fail a lot, learn and keep progressing. And that's basically, if I remember right, you have this sort of circular ascent. And it's from the failing and the learning that you ultimately make the progress. But if you put your head down, you don't want to see your mistakes, you don't want to see the flaws in your thinking, you're going to trap yourself at a plateau, and you're never going to be able to push beyond that.


Power comes when you see past your individual perspective (54:28)

So you've got to seek out disconfirming evidence. You have to seek out where you're weak. And in fact, one thing I will-- I sort of disagree. I get what people mean. So when you say, know your nature, I will say, by nature-- but before you get to that second part, let me just-- on the thing, yes, it's looping and learning from mistakes. But another part of it is the realization that you don't have to make your decisions in your own head. OK, now when you start to realize that you know what you're good at and what you're bad at, that a power comes to you when you start to know, OK, who's the best person to give me the advice? Or who's the best person to lead me through this? Or when you start to know that you can go beyond what you think and your opinionatedness so that you can triangulate-- I call it triangulate-- with others so that you find three people who are really capable of giving you good advice, who will argue with each other and argue with you so you can see all sides of it. And you work yourself through. So it's not just your eyes looking for the path, but it's other people's eyes looking with the path with you, knowing that you're going to have successes and failures. But that power of that collective learning and triangulate well with humbleness is a great power as you go through that cycle. I love that. So I'll push that a step further. And I will say this. So I'm going to be super blunt to anybody watching right now. And Ray, if you think that I'm wrong, I trust that you will jump in.


No one is coming to save anyone (56:24)

No one is coming to save anybody. And that's the hard truth. And if I look at history and even if I listen, which I have listened to literally every word that you've said on the subject publicly, anyway, that this is just going to suck. Like there is going to be a level of brutality that most of us have not experienced in our lives. Companies are going to go under. People are going to lose their jobs. There are going to be people that are going to struggle to find their next meal. And what I want people to understand is just like you just said, you can triangulate. You can get people to help you think through. But I want them to understand that they can do that in a book, at a library. They can do that online if they still have access to the internet, which as of right now, even just going to the library, you can get access to being online. You changed my life before you and I ever met. I read your book. I didn't even know who you were at that point. And somebody just said, hey, you've got to read this book. It's got really powerful ideas on trust and creating these hard principles out of all your mistakes. I read it immediately recognized that this aligned with what I call the physics of being human. It was so in line with removing my blind spots, getting people, acknowledging that other people are better than me at certain things. And so while I take a little bit of an exception-- because I think that you can't say what you're good and bad at until you've been at this for a long time. You've been trying. You've been pushing. You're learning. You're failing. Because by nature, I'm lazy. I am not very bright. I think there are people that can process raw data far faster than I can. But I'm willing to admit when I'm wrong. I'm willing to admit that I don't know. I'm willing to admit when I make a mistake. And because of that, because I go in that cycle that you talk about, making a mistake, looking nakedly at it, not pretending I didn't screw up, asking people to point out my flaws, and then going, and now I'm going to have to do what is called deliberate practice to get better at that thing.


Deliberate practice (58:01)

And I don't just ask. And I don't think people can afford right now to just say, oh, what do I want to do? We're for a lot of people. This is going to be Maslow's hierarchy of needs. You need safety. You need security. You need food, shelter. And I think it's going to come to that. And so recognizing there are people out there right now that know more than you, you are going to make a mistake. But those mistakes are huge learning opportunities. You have to admit that you made one. You have to seek people that can help you remove those blind spots. And then you have to put in the work to get better. Does any of that sound crazy? No, that's totally right. And then it comes from once you have a fear that you might be wrong, but you have still the audaciousness encouraged to go forward. You're a lot smarter than the person who thinks they know. There's a quote that Jefferson said, he who knows he knows not is closer to the truth than he whose mind is filled with falsehoods. And so when you know that and then with your character and your determination, you go forward. The smartest people I know are the most humble. The more you learn, the more you realize, oh, I'm eager to take in. So that's right.


Plan for a simple lifestyle and visualize (59:43)

But back on your audience, I think your audience ranges from-- there's a wide range that you have in your audience. And I would say that there are many people in your audience who can plan for a simple lifestyle that can be wonderful. Sometimes we acquire these needs that aren't at anywhere near as big as we make them out to be. And do you have a bed to sleep in? Do you have food to eat? Do you have basic health care? OK, if you start to think, OK, what are my needs that I really need and I'm OK? And how can I make provisions for those needs? Then once you've got that in your mind, you're free. OK, you can go beyond that. You may say, listen, oh, I can do that for a year or two years or a month or whatever. But I think we visualize too much the things that we're used to. One of the good things about this exercise is that it brings you back to basics. You can be brought to basics. And like I'm saying, if you have a bed to sleep in, and you've got food, and so on, and you have those basics and good relationships with people who care about you in basic health care. So if you budget for that and you figure how do you have it, maybe it isn't in the luxurious place you're in. Maybe it's in the country and so on. Once you visualize that and you get that down in your head and you say, oh, I can get that, then your stress will disappear because as you visualize that, in many ways, that's a happy life. It doesn't take a lot. There's stimulation. There's nature. There's relationships. These fundamental, wonderful things, the most important things, can be obtained. And so for many of you, I think if you look at that and you budget for that, I'm seeing a number of people who are going broke. And I've watched this over many years. And really, it's just the adjustment process. Once they get to that point where, ah, they get settled, they're fine. It's the ambiguity. It's the worry. It's the stress. So if you do that from the beginning and you have that played out in your head, then you know everything from there you can play with and it's icing on the cake. So I want to emphasize, you can budget for that. You can look at that, find that scenario. Find what that looks like so that you know you got it down. Then you know you're safe. Once you've got safe, everything beyond that is luxury. I forget who the Greek philosopher was. Maybe you remember that used to go and he would sleep on the street, like once a month or something like that in shabby clothing because he wanted to remind himself, oh, this is what I'm afraid of. And this thing isn't that bad. I mean, I always found that interesting. I take a slightly different approach. I think that is really powerful. And I think that's an important anchor for people. So my wife and I always say to each other, 'cause look, we have been dirt poor and we have now been very wealthy. And all along the journey, we've always said to each other, look man, if I have you, like everything else, I'm good. So literally there are only two things I'm legitimately afraid of. There are things I don't want, but there are two things I am legitimately afraid of. Brain damage because then I cannot build my way back. I can't have the level of fulfillment joy that I want. And losing my wife because a life shared to me is like the highest importance. Now, having said that, I'm gonna set all that aside. And I hope people heard you and I hope that they take it to heart to paint a lifestyle that they can love and it's beautiful, but it's simple. And they don't have all this overhead hanging over them. But I know thyself as you were saying, know why you're good at what you're not. I've always told people, if you want a calm, peaceful life, I'm not your guy. There is somebody else for you to go listen to and follow that journey. If you wanna be aggressive and you want to build something that matters to you, I don't need it to be big. I don't need it to be a business, whatever. I just, people that wanna express themselves, that wanna get great, they wanna become extraordinary at something. That's what I'm far more interested in. And so the way that I look at it is right now, it's a time where economically the chessboard has been flipped over. But in that moment, there's going to be opportunity created. And for people that, and this, my central thesis is what I said earlier, panic is the problem.


Don't panic (01:04:42)

People cannot allow themselves to panic, which is why I like what you're saying. Don't worry if you lose everything, right? As long as you have the things that really matter to you. And I think that's important so people don't panic. So they can be clear headed, so they can figure out where the opportunities are, and then they get the skill set that they need to capitalize on that opportunity. Which for me is like, and that's why I keep saying I'm losing sleep over like, how do we get information out so that I've worked in the inner cities a lot? And to get the information to somebody out there that they can triangulate, right? That that's not a rich upper class exercise. That's a, the information is out there. It's been put in books on a website, in a podcast. Like the number of the world's greatest thinkers right now that you could be taking this information from, but you have to be willing to test it. You have to be willing to incorporate it and actually act on it and do something. - So I'm not clear what's your question about that?


Self Improvement Strategies

Run with big societal change ideas (01:05:43)

Not so much a question is I'm presenting what I think are ideas that I want people to run with. Partly I'm hoping if there is a flaw in my thinking, I want you to point it out. So going back to the need for specificity. So we're talking about there isn't equal opportunity because there's not equal access to education, which I will take as the core of your thesis for generationally moving forward in a useful way. True? It's a core piece, yeah. - Okay, so what I'm saying is I really hope that that gets addressed and I will certainly do whatever I can. You're obviously doing a massive amount there. But I also want people to not wait for someone to make that change. I want them to realize right now today, they can go and learn something. They can educate themselves. You said that it's not about college, it's about getting a skill that lets you live a fulfilling, a meaningful life with a meaningful career. And so I want to see people take action. But if there is a flaw in that thinking, I want to know. - No, no, of course, I think it's totally right. I think the issue is going to the next step for the particulars of actually helping somebody. And there's a combination of not only what they can do themselves, but finding others who will help to take them by the hand and help to provide that guidance to be able to do that. - Right, so finding a job, let's say, you think, "Okay, how do you find a job?" So you have to be specific. So we could say, find a skill. Okay, great. But literally, how do you go about finding that skill? - Let's talk about that.


What is a safe bet? (01:07:29)

So one thing you've talked about from an investing standpoint is when this begins to happen and monetary policy begins to break down, won't spend a lot of time describing a fiat currency, but essentially money that isn't associated to anything like gold. So you've broken that. So you said it gets re-associated because gold has intrinsic value or rocks because it's used to build things. So what is looking at the historical perspective, what are things that are safe bets in terms of this job is going to be here in five years, that this is a good place to begin building that skill set? - You're talking about the skillset, not the investment, I guess. - Yeah, skill set, I think that that's maybe more useful for people if they've just lost their job and they're sort of just trying to make ends meet at this point. - Well, in terms of, I think in terms of any environment, the lessons that we get over and over again is that you can't be sure what the next environment and twists and turns are. What you don't know is greater than anything you do know. So if you were in the airline business or you were in the hospitality business and that was wonderful and you liked it and everything else, all of a sudden that changed in important ways. So the important thing are the more general abilities. In terms of investing, what that means is you need to know how to diversify well. That's the most important thing. In terms of any aspect in life, to know how to deal with what you don't know is more important than anything you know because the world is so much more surprising than you can really be sure of. So in a general sense for skills, I mean, I think, and skills are part of what are your environment. Find out those things that are self-sufficient and maintain flexibility. You have to know how to maintain flexibility and change well. If your career is in one area, you have to develop the skill for changing a career. And that all comes down to knowing how to find the path, to know how to triangulate well with others. - I wanna talk about that.


How do you learn something new? (01:09:52)

You've done such an extraordinary job, Ray. I truly stand in awe of being able to go and learn a new area, a new element of the world. When you announced that you were gonna be taking this historical view and that you were gonna go backwards, I mean, something like a thousand years or however far you went back, how do you begin that research process? So for somebody that's like, I wanna invest my time wisely, what is sort of a high level way that you approach learning in general? - Well, for me, it's a lot of the alignment of the three things that I said before. What is my passion? Then knowing my nature, what is my passion? And can I align my work to my passion? And then does it pay adequately for me to take care of my needs? And for me, I do that because it's my passion. And so when you find your passion, that's aligned with your work. If you can do that. - But how do you go about learning something new? So when you started researching the historical context of what we're going through now, is it picking up books? - Well, for me, you see, I have been, my nature is, I'm extremely curious. Okay, and I love my game. My game is to learn about the world, interact with the world, and bet on it. And I'm very curious. So it might be whatever your game is, like you've got a game. Okay, that's why you're interviewing me. 'Cause that's your passion, that's your game. And if you can line those three things up, and you know your nature. Because if you know your nature, you can find your role. You wanna find the right role for you, right? It's not just go get a job, and I might say I would like to be an architect. Well, I mean, you have to know your nature, and then you can find your role. And so I'm hesitant to say that what is true for me is true for somebody else. So when you ask me, okay, those are my big things. Meaningful work and meaningful relationships. Like relationships matter a huge amount to me. So if I can have a work that feeds my curiosity that I'm passionate about and that pays me adequately and I do that with great people, those are the things that feed me. And so you have to know those things that feed you. Like I like the big picture. Somebody might like details. You have to pick those things that are for your nature and align those things I'm talking about. - And how did you specifically go about starting this big research project? Did it start with a book? Did it start with reaching out to historians? - No, no, it's, I mean, in a sense, the journey started out when I was 12 years old and I caddied and then I took my caddying money and I had newspaper route and I did a number of things like that, I took my odds and ends and I put it in the stock market. And then I got hooked on the game. - Do you ever think about the nature of questions in that process?


The smart ones ask questions. (01:13:47)

Like that, so I think it was Tony Robbins that said, if you ask a better question, then you're gonna get a better answer and basically questions are gonna control the outcome. Do you focus on what question you're asking and trying to answer or is this something completely different than that? - Questions, questions, that's right. It's the hunger to know. You'll notice it different than people. There will be people who, wow, you listen, good question, good question, good question. Then there will be people who can't ask questions that they're just telling you what they think. They almost, you think they were acting smart, they think they're acting smart and they're the stupid ones. The smart ones are old question. Now, how do I have to find the answer to the question? Next question, because the questions and the power and the pull to answer those questions and so on is the thing that drags you forward and it's excitement. Do you have a poll? Okay, what's your poll? So yeah, it's all in questions, I think. It's all in a journey. Life is a journey, an adventure. That's why I'm trying to say in principles for success. Or you can get, by the way, principles, if any of these principles are also principles in action is an app that's available on the iStore and it's free and it has all of these things in it. But so I don't, 'cause we'll separate, I think people might like that. But you have to know your poll and then along the way you're gonna have your adventure and you're gonna learn and then you go through your phases of life and each phase is different. Like you talked about your phase. You're in the middle of your phase in life. You talked about your wife and your relationship with her. Okay, that is a phase of life. And when you go by putting it in perspective, it's helpful. In the back of that book, Principles for Success, there's a life arc chart. And if you know where you are on that life arc and you know what the next 10 years is typically like and you know what the people you care about are on their life arcs, you can almost know what's coming at you and then you could start to think about it. So it's at that level of knowing yourself and knowing how these things happen over and over again that you can achieve your path. Don't be surprised. Most life is the same things that happen over and over again. You're born, you probably have parents to take care of you. Maybe you have one, maybe you have two, but somebody does. They teach you, you have your first phase of your life where you're dependent on them and you're learning. Then you come out to your second phase of your life and then you're working and others are dependent on you and then you have that. So these things happen over and over again and you just have to know that path and know how to approach it. - So really fast before I let you go, you're working on a new book, The New World Order, which I find very fascinating you've been publishing some of the chapters on LinkedIn. What do you think the odds are just to really go back to the finance side of this? What do you think the odds are that America remains the Reserve Bank and the Reserve currency and if it's not us, who do you think it will be? - Well, all currencies eventually die and all empires eventually diminish in their other empires. And the question is essentially the pace of what how that happens. I think that, but for most of your listeners, it's most likely going to happen in a way that's tolerable if you can manage it well. Think about the decline of the British Empire and you see it people are living in London and so on. It's not that the world blows up. It's that they have to readapt and they know how to readapt. And so I think that we're going to come through more difficult times. I think the next three to five years will be difficult times in ways that haven't existed in their lifetime but has existed in other periods of time like the 1930 to 45 period. So to be able to adapt well, to invent yourself again, to adapt and to navigate that maybe with a perspective of knowing what those other times were like is the best thing to do. So the reason I'm doing that series on LinkedIn is to help people understand what those times are like and then help them prepared. The reason I wrote the book principles is so that it's a particular approach 'cause the same things happen over and over again for basically the same reasons. And once you get that and you have the self-discipline to know how to play the game well, then you'll be fine. So one, where can people connect with you right now and I have one last question that I want to ask? Well, as I say, I'm on social media and I'll interact with people on social media, the standards, LinkedIn, Twitter, Facebook, Instagram by and large. But the most valuable stuff is if you go to principles.com, you can get the whole pile or I would say that so those places, you know?


Meditation gives you equanimity. (01:19:20)

So as this next three to five year part of the cycle hits us, what is one thing that people can do that you know from the historical perspective will most insulate them from the probably emotional and maybe financial damage, whatever you think is more important? Well, the things that I thought about, some of the things I mentioned earlier, the plan for the worst case scenario and make it terrific is one of the things.


How Meditation Can Reduce Stress (01:20:01)

The understanding how to triangulate well to deal with whatever problems that you're going to face and how to work that through to find the path and find your nature. But also one thing that's helped me a lot is meditation. Meditation gives you a calmness and equanimity so that you can almost look at your circumstances and you can navigate it with a clarity of thought without all of that stress. It's healthy because it reduces stress and it also makes you smarter to make the decisions well. So I would say that would also be something that I would recommend because if you have the equanimity, that centeredness, that calm centeredness and you have your plan and you triangulate well with others so that you can get all the best advice and don't have to approach it in your own head, you're a long way there. In your mind, we think what do you want?


Understanding Ego And Principles

Getting Past Your Ego and Blind Spots (01:21:08)

And the reality is when you look at the neuroscience and psychology that there are different parts of your brain that want different things. And so in the simplest sense, there is the logical part of your brain that you're conscious of, it's called the conscious and you think you're being logical and you want to make those decisions. And then there's the subliminal below the limbic system, part of the brain, which is the emotional and it's not as conscious to you, but it has more of an influence on you than really the logical one. And so they're not aligned. And so when you're experiencing that pain or let's say the ego, right, there were two main things. You got an ego barrier and a blind spot barrier. If you can get past your ego barrier and you get past your blind spot barrier, you can accomplish anything because you also know that you don't have to do everything to you don't have to figure it out yourself. You can take in from other people the different ways to approach things in the best possible way. And so the realization that we all are really struggling with ourselves and to think which is in control. Meditation helps to deal with the alignment of those two things because both are valuable. In other words, intuition, imagination, the things we really love come from our subliminal usses, right, our needs, whatever they may be. They come from here, that subliminal. They may be valuable. They may be damaging. You don't know the difference. And so when they come up and you're looking at those with your logical mind and you can align those things, you're probably in good shape. If you can do that, that alignment between the subliminal and the logical, and you can do that with other people so that you can triangulate with other people and say does that make sense and get alignment? That alignment is the path to the future because you only have to know what the best things to do are. You don't have to have them all come up from your head. And for God's sakes, don't be overly opinionated because just because you have that opinion, it doesn't mean it's true. So that's where the two use and the alignment really is so important. - All right, I wanna talk about the process of getting those two things aligned, tying this into meditation. So in my own experience, meditation is a stillness. It's a quiet from the chatter of the mind and more maybe profoundly than that. I can feel my brain shifts into a different gear. So maybe it's less linear thinking, it's more lateral. I'm making connections that I might not otherwise make. So is it in that still, in that quiet, where you're able to look at your, what's bubbling up from beneath the limbic system, your emotional life, you're able to look at that without judgment. And then able to say, okay, but this is what I'm trying to do sort of consciously, these are my plans and all of that. And now how do I, are you altering either of them? Or are you beginning to say, I need to understand if this is a useful emotional driver or a destructive emotional driver? Like what is that process? - I think you describe it very well. And when you go deeper, by the way, you go literally into your subconscious. So you're creating a connection. When you transcend, I do transcendental meditation. When you transcend, I am not conscious. And I'm not unconscious. I am in the subconscious. I'm not aware, but if somebody want to make a little noise like that, boom, I would, so it's not like being asleep. And that's also, by the way, where creativity comes from. If you know, it's like you go take a hot shower and a great idea comes, not 'cause you're muscling it. So when you're having that, then you're calm and your natural state. And then these things bubble up and it helps that alignment. So you say, okay, let me go above myself. Let me go above myself and look at myself within the context of my circumstances. What is around me? How does that work? How does reality work? Okay, if I do this, what are the consequences? And so the going above it and just saying, I'm responsible for my decisions by life. And how do I navigate the things there that I can pull the levers of, who do I get? How do I do? How do I deal with those? And going above it in that calm way is really what it's about. And when you do it well with others, so you triangulate.


The Power in Being Radically Truthful (01:26:06)

That's why I have the radical truthfulness and the radical transparency. When you have that radical truthfulness and the radical transparency, you're triangulating with others. You're going above it with them and you're just looking at that circumstance and you say, okay, well, we're in the same goal or are we? And then how do I navigate those so that we get to where we wanna go? 'Cause if you're forming your company, you've got your company. We're on the same mission together, right? So now let's all go above ourselves. What are your strengths and weaknesses? How do we get at what's true? And how do we do that with transparency? And that's it. - Yeah, man. So powerful. I'm putting into action. I'm really seeing exactly how it begins to allow. And I think truth is probably the, what you call hyperrealism, the getting to such an objective look at what is true. And going back to sort of an objective look at that emotional state, which I think is where a lot of people struggle. One of the biggest and most profound, probably the only lightning rod moment in my life where it's like, whoa, my life can be divided into before that literal like instantaneous recognition and after everything is completely different. And that was the first time where I realized that I was being driven by something that I had not yet recognized, which was I was telling everybody that I wanted to generate wealth in my life, but I was acting like I just wanted people to tell me that I was smart. And so the like friction between those like hit this collision. And so at the time I was just a copywriter and the guys who had later become my partners at the time were my employers. And we got this huge fight over something stupid. And I was arguing and arguing for my idea. I needed my idea to win because they were just so much farther ahead than me. They were smarter than me in that they can process data faster. And that's just true. Like they could think through things more rapidly than I could. So I was like, I have an inferiority complex over how fast they think. And they're like 15 years ahead of me as entrepreneurs. So I just always feel like a buffoon. And so I'm starting to really feel badly about myself.


How identity can affect the choices you make (01:28:19)

And so I'm arguing for this dumb idea, arguing, arguing, arguing. And then finally I wear them down and they agree. And I was like, shit, I know it's the wrong idea. Like there's a voice in my head screaming. You know this is a stupid idea, stop arguing for it. But I needed to win. And so when they left, I thought, okay, whoa, what's real? I just need to know what's real. No judgment on me. If what you want is to get rich, you have to change the way that you're acting immediately. But if what you really want is to just feel smart, you need to leave this company. Because budding heads with them every day and feeling inferior is never gonna get you there. And so in that I realized, wait, there's actually a third option where I could value myself entirely for learning. And if I switched my identity over from being smart, being right, being good, being worthy to just, I learned, that's what I do, then everything will change. And it did literally like that. Like I remember that day so clearly. - So to me, what you're describing is just another one of those, right? - Go deeper on that concept, the notion that everything loops that history repeats. Because I think people get it from like a US history class, but they don't necessarily understand it in their own life. - There's practically nothing that hasn't happened before, really, if you look at the theme. So when I take your particular case, I can digress into it, but I won't, I won't, I'll come back to that in a second. Almost everything that happens has happened many, many times before. And just like I described, there's the hero's journey and there's this and that, there's that particular path. And the whole thing happens over and over again. So my reaction to what you're saying is, yup, that's absolutely right. That's a winning strategy. So if you step back from that and you write, okay, what happened to you? What happened to you is what we're talking about. You went above yourself, okay? So you exemplify it. Okay, here are the things. You went above yourself. Now you could have had the ego thing, the big old barrier. Okay, the ego barrier is gonna be the thing that's sort of gonna kill you. Then by reconciling what your subliminal desires were, okay, I wanna be just as smart. And then connecting that with your intellect and saying, okay, now intellect, what is really going on here? Okay, and then to be able to step out of that, now you just did it alone, but you could do it with others and it's even better. And so you figure out, oh, okay, this is that. Here's what the choices are. Here's what how reality works. And so I'm just saying, you did what we were talking about, right? And if everybody gets that and really understands how to go do that, the number, the two big things is, how do you get your alignment of your lower level, you with your upper level, you, how do you get past your ego and your blind spot? And we know what the ego barrier is, like I gotta be right or whatever it is or I'm not good at this. The blind spot barrier is the realization that people actually see things different. They see different things. Like somebody will see the big picture, somebody will see the detail. They'll focus on different things, almost like a color spectrum type of thing. And if you realize that you will see a part of that spectrum and other people will see the other part of the spectrum and so that you really need to, when you go above yourself, you really need to orchestrate all those ways of seeing because you are not just one of those people that's gotta do it yourself. Your way of being the success is to go above it and be the orchestrator and know what you're good at and what you're not good at. So it's almost like if you want your life to be successful, you will not let yourself do certain things because you're just no good at them. Once you get that picture down, then you can find the past wherever the paths are. You're open-minded because now you've given up your ego barrier and your blind spot barrier. So your particular case just was another one of those.


The importance of understanding the historical context (01:32:16)

- Yeah, the concept of just another one of those, I think is it's bizarrely easy to miss in your book. And so I wanna linger on this point for a second. And it's funny because people ask you this question all the time and you give the same answer, you're so consistent. And yet people don't spend the time that you spend. So let me encapsulate. You've done so well as an investor, it's kind of crazy. And so needless to say, people are like, all right, what's the strategy? And your answer is actually usually not specific. Your answer is understand the historical context. Understand the historical context and get smart people around you so you're not making decisions by yourself. So the notion of it's another one of those is looking at investing, looking at the human condition, looking at your own life as this thing that has these repeating elements. - Every dimension of everything, the way is another one of those. And so that's how you could, if I can get people to think, I wanna convey what that means. And then I wanna then understand how to think at the principal level. Because then life becomes so much easier 'cause if you have the principal. And what I mean by that is like you could look at all the things that are coming at you and they're just the things coming at you. If you instead think of each thing as being like a type of species, think about it as an animal species or something. Okay, what one of those is it? And how do I deal with those? And you have your principal for dealing with those. - So you have the species coming in, you have a principal that lines up with the species. So now there's no guesswork or refiguring it out. - Right, figure it's like, I don't know, it's a type of snake that's coming at you. But everything is another one of those. So when you start to think about how do I deal with that? How does reality work? And how do I deal with those? So the way it looks to me, I'll speak figuratively to help to convey the image of what I mean by that. Maybe there is something like 50 different personality types. I don't know what the exact number is. And they are all living out the same scripts hop and maybe they're just 50 different scripts. And then through those, maybe there's a certain X hundred things through time. And it seems all confusing because we're looking at them bit by bit. It's like you're in a blizzard, it's a snowstorm and each of these bits come at you and so on. If you kind of step back and just say, okay, okay, what one of those is it? And it's happened before and it's happened to different people. So let's say, for example, you have a kid and you think, okay, now I'm a kid. And you could just sort of say, okay, now you're parenting. But whatever it is, you can sort of say, "Hey, it's happened before a million times." And in that particular circumstances, so when you realize everything happens over and over again, pretty much for the same kind of reasons, okay? And you understand that. And you can almost look at who's been through it before, who knows how it works, how do I just navigate that thing? What are my principles for that?


Writing Down Your Principles (01:35:36)

Then it's great. The reason I discovered it accidentally, I discovered this accidentally, is because I got in the habit that I'd suggest you get into and other people get into. And that is, whenever you're in a situation where you're making a decision, important decision, just pause and write down what type of decision was it and why did I make that decision that way? That's writing down your principles. It's kind of your recipe for success. And we could talk about it. And then every time I'm in a situation, I'll write down, why did I make that decision? And we could look at those criteria. Did that make sense to do that decision that way? Would you have different criteria? And so on. And you do that over a period of time, okay? And then you have your principles. And then, so they're just your reasons for making your decisions and what matters to you, right? When you do that, so that's why I'm encouraging you because you're going through these and then you have found a path in life. I viewed your story, what you just told me is just another one of those. Now you keep doing it, it'll become apparent to you how everything's another one of those because what will happen is the next time around, you're gonna find, I don't know, let's say you're firing somebody, use that as an example, you would say, okay, now I'm firing somebody, again. Okay, now let me just kind of reflect, would I modify that principle? And how would I do that? And then, okay, now maybe you're firing somebody who's been with you for 10 years and you love. And that's not the same as firing the son of a bitch who you wanna get rid of. So then you refine that. How should I deal with that one and that? And why does it make sense? Because that reflection, why does it make sense? Why does it make sense? And really wanting truthfulness, you know, not worried about being embarrassed, making mistakes, we're gonna go on the struggle with all of you together is a good thing. - Yeah, so the, how do you define a species?


Defining a Species (01:37:28)

Like how do you begin to codify all this stuff and go because I think it's all too easy to get lost in the, well, this isn't another one of those. This isn't just firing somebody, this is firing somebody that I love. And so, no, there's, you know, this is all just so different. - It's simple because all you have to do really is to sort of say, if you start to think everyone's another one and I was gonna make a decision, I just gotta write down why I made the decision. I don't care how you title it. Okay, just write down, okay, okay. What do you criteria, make it write it down? Well, you'll see that they're close cousins. You know, let's say if you were saying, is it a different one because it's a close relationship that you've had for a long time or somebody is new? Okay, well, you'll see those two things are close together, okay, but it's another one of those things and it changes your way of seeing things, okay? It changes your perspective. Again, I wanna repeat because then life becomes easier because it's not all these bits and pieces, okay? It's okay, it's another one of those. It gives you an equanimity like a ninja, okay? It's not all these coming at me, okay? And how do I approach this? And then you can have a conversation. It's just reality. How should you deal with that reality? And if you do that, then you think in a whole different way, okay?


Embracing Radical Transparency

Radical Transparency (01:38:58)

You just wanna get to the best way to deal with your realities. You've talked about how about 30% of the people cannot do radical candor. Be great for you to-- I call radical transparency, but whatever it is, okay. So radical transparency, define what that is exactly and then what is it about that 30%, like are they, they can't get rid of the ego or what, what is that? It's just what you're talking about. The struggle is between themselves as you go into a conversation and you're looking at that. They find-- So the radical transparency is saying super hard shit, really direct, nice and clear, they're not good at this. While simultaneously saying, I don't know if that's true. In other words, if I say that I don't think you're good at that, I'm being honest, but also who knows whether you're good at that. So how do we then go from you think you're good at it, I don't think you're good at it, and how do we go through a process to find out together whether you're good at it or not? How do we go through the process? Well, one of my key questions. Okay, the best way to do it is you do it in an agreed upon way, okay? The idea is, okay, we say, okay, Don, you're not so good at that, I don't think. Okay, and then we go through the, how would we judge? Can we ask other people? Do we go through this test or that test? How do we find out what's true? Because if you can find out what's true, your life will be better. Like, do you want to know what you're not good at? If you know what you're not good at, it's-- Life's no problem. Because you don't even have to get good at it. You just have to work with somebody who's good at what you're not good at, right? So there's a path forward when you get out of your head that you got to do that. So the only basic notion is if we were to have a relationship is-- And by the way, it's non-hierarchical. You could say, "Hey, Ray, I don't think you're very good at that, and I'm going to be the same way. I put it in because I needed it, because I'm worried that I'm going to be wrong." So then you come to me and you say, "I don't think it's very good." Well, how do we find out in a non-ego-constrain, objective way, whether I'm good at that or not? Do you actually lay out criteria like you're-- Oh, yeah, you'll do. Yeah, we will do. Yeah. Absolutely. How do you come upon that criteria? Would you do this as a one-on-one? Would you do this in a group? How do you begin to tease that stuff out? First of all, in terms of the group, I like to make everything transparent. So everybody could watch the same thing happening with anybody. Meaning you would do this in front of a large group of people? No, no. I would say taping. We do a lot of that radical transparency, because that way people see is it fair, is it a good process, right? So I like to do that discussion, but anybody can do it with anybody, right? But I would like to have that conversation. If I don't think you are good at something and I am relevant to your life or vice versa, we got to work it out. We've got to figure that out together. We got to do this with your wife. In all relationships, in one way or another, you have to find out how you're going to make decisions. There are going to be agreements and disagreements, and you have to have the art of thoughtful disagreement. Now, people find their domains differently. Maybe somebody says, "Okay, I'll take care of these things," and you take care of that. I don't know. Some people, the traditional household might say, "Okay, I'll take care of making the money out, and the man goes out and he makes money in the world." And then one woman says, "I'll take care of the kids." We're not there anymore. But each role I'm trying to say, in some way you have to find out how to do the art of thoughtful disagreement. It makes sense. And then also knowing what's good at it, and what you're not good at. It's a good thing to know what you're good at, and what you're not good at, right? What do you do though?


Embracing Thoughtful Disagreements

The Art of Thoughtful Disagreement (01:42:59)

Like when you, let's say you and your wife realize, "Ooh, we actually have something that we disagree with how to do with the kids." And that's high stakes. If you do something wrong, you could have a material impact on their psyche and the way that they approach the world. So there's sort of elevated stakes, and there's just two of you. Unless you guys had a way of appealing to other people, would it come down? Because you said, "Don't worry so much about what the person's saying. Think about the process by which they got there." Yeah, so I'm saying, whenever there's a disagreement between two people, that they can't get along on that, they should pause, and they should go above it. And they should say, "How should we deal with each other when that happens?" In other words, "What are our protocols for working ourselves through that so that we can then move beyond that to make a decision?" And would a specific protocol in a marriage be something like, "If it has to do with the kids, you have more believability than I do, so therefore, if we can't come to an agreement, we'll go with your decision?" There are many... That could be one of the protocols. The main thing I'm trying to convey is when people are ordinarily in an argument, they just argue. And they don't know the ground rules, they don't have a process in place. So if you look above it, and you come up with whatever your rules are, it may be you could have domain, it may be that you have a mutually agreed party that you would say, "Okay, let's plead our cases to and have them mediate it." It could be a lot of different paths could exist to say, "Ah, I think that's a good path when we have a disagreement on how we plead our cases and then move beyond it." But you need to have the path, and that's what I mean by principle level thinking. Go above it, how should it be, instead of this type of thing, right? We all need that in order to have successful relationships. It's fundamental, right? When you got this, and you're not going above it and saying, "Why do you have this or how should this occur?" Then you got trouble. The key is, you want to connect with them, you want them to fall in love with you, you want them to be inspired, you want them to feel better about themselves when they're around you than when they're not. And if you can pull that off, it will go to war for you.


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