The BIGGEST LIES About Money That Keep You BROKE! | Tom Bilyeu | Transcription

Transcription for the video titled "The BIGGEST LIES About Money That Keep You BROKE! | Tom Bilyeu".

1970-01-02T16:22:37.000Z

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)

When it comes to making decisions about your money, do not let yourself get sidetracked from your goals. Today, I'm going to be breaking down how to form habits, maintain focus, and how to build the expertise that will allow you to trust your own decision-making and how all of that relates to finding success in the financial world. Let's get into it. Keeping up, most of us are told some very detrimental lies about money, and I get it. It's what people have been taught before them, so of course it's what they're going to pass down. But what people don't understand is money is a great facilitator.


Understanding Money And Investment

Money is a great facilitator (00:34)

Money doesn't say anything about who you are as a person. It doesn't mean that you're good. It doesn't mean that you're bad. And that's one of the biggest lies that people are told. People are told that money is the root of all evil. That definitely is not true. Money is the great facilitator. This is why the greatest charities in the world. What is the thing that keeps them alive? Money. Money can do incredibly good things. It can also do incredibly bad things. That's why I just say it's the great facilitator. I'm not saying whether it facilitates something good or bad, but what you do with it is going to determine its power. Money is potential. Once you understand that money is potential, now it just becomes a question of what exactly is it that you're trying to do with the money. And so getting people to get out of their own way around what money is is critically important. And so I want people to really understand that it is the currency that facilitates things. When you think about your own life, would you go into work for free? And the answer is no matter how much good people want to do in the world to eat, to have a roof over your head, you're going to need money, to get other people to do the things that you want them to do, whether that's make food for you, whether that's fix roads, whether that's to create an after school program. All of that requires money.


Money is potential (01:56)

It's just what we as a civilization have decided we're going to use as a way to manifest value, to store value, to transfer value across time and space. And so money is the way in which we sock away our energy and efforts. So you go to work, you work really hard, that's where you're putting your energy and effort. They then give you money. That allows you to carry that energy and effort across time. So that as time passes, you have a way of planning for the future so that that could buy you a loaf of bread tomorrow, it could buy you a house in five years, whatever the case may be. But understanding that money isn't something that was made up recently by the government in order to hold people back or to allow "rich people" to take advantage of other people. What money is fundamentally is it is an entry in a database that allows you to store your efforts across time and space. Once you understand that, then you understand why I say that it's the great facilitator.


If you have a lot of money youve done something bad to acquire it (03:08)

Now the other lie that people are told about money is that if you have a lot of it, you have either done something bad to acquire it or you're a bad person for acquiring a lot of it. But if money really is the way that we allow value to be carried across time and space, then somebody who's able to leverage their time well in a way that can be put into money and carried across time and space, they have shown that they have a level of efficiency with how they spend their time and energy. Because the way that you get money for doing something is by making things more convenient, by solving a problem for somebody, by making something easy that was previously difficult. You in essence, if you're getting money, you have created something in the world that somebody would rather have that thing than that money. So for instance, in my own life, when we were building Quest, what we were trying to do is say, okay, there are people that want to eat cake, cookie, pies, ice cream, but they want to stay in shape. And so they want somebody to make food that they can choose based on taste and it happens to be good for them. Now the problem is that's very difficult to do and it's very difficult to do at scale and it's tremendously difficult to do at scale in a way that's shelf stable. And so we put 18 months just into formulation. We put an ungodly amount of time, energy and money into actually building equipment. And then we had to hire people, train them how to actually produce the product, how to package it, how to distribute it, all of that, and how to do all of that at a price that it was cheaper for people to pay us the two and a half dollars or whatever to get that meal effectively that they would rather have that product that we had created than that money. That money was actually worth less to them or equal amount to that product. And so now for us to do all of that work, to do all of that research, to pay all of those employees, to negotiate all of those contracts, to be consistent, to learn about health standards and practices and manufacturing food, we did all of that and turned it into something where people are like, "Word, I would gladly give you this money in exchange for that product." And understanding that ultimately what you're doing is you're entering into a voluntary transaction where you've created something that people would rather have than their money. And so understanding then that somebody that has accumulated a lot of money has added a lot of value to the world. Now of course that's not always the case and there are things where we're right to question whether that is something that we think is that valuable or not. But if it's happening on the open market, the open market is saying, "Yes, it is that valuable. That's why we're willing to do that." And so the area where people get most upset is in the area of finance. And so people look at bankers, they look at people that make money on Wall Street and they say, "That isn't fair." Now what I would say about that, the reason that people equate that or that they've been told the lie that those people are evil, that they're doing something that's bad, is because they don't feel like they have access to that same system. And that brings me to another part. You're not just told lies. The other part about money that becomes problematic is people aren't taught basic financial literacy. And there was a quote, I forget who said it, but they said, "This is somebody very, very wealthy, one of the famous names." Unfortunately, I don't remember who it was, but one of the famous names in money. And they said that if people understood how money actually worked, they'd be rioting in the streets. And that's because the way that the system of money works is people are kept in the dark about how money enters the system, how money exits the system, how assets work, how liabilities work. And because people are kept in the dark about that, then other people are able to use their superior knowledge in an open marketplace to garner more of the money. Or even worse, if the government is using money to either inflate the currency or to redistribute money, which basically is stealing from one person, and yes, I'm using that word very intentionally to give to other people that have not earned that money, that creates all this contention about how the money should be used, where it should be going. There were people that were up in arms when the airline industry was bailed out, or the banks were bailed out in the 2008 collapse. But how many of us knew that the banks have actually paid that money back, and the government has actually made money off of the loans that they gave to the banks. So most of us aren't taught the ABCs of money. We don't understand how investing works. We don't understand the fact that money is your own ability to store your energy and effort and your efficiency, your intelligence, all of that across time, and that you're getting paid in direct proportion, this is an Elon Musk quote, you get paid in direct proportion to the difficulty of the problems you solve.


Make Money in Your Sleep (08:27)

So we have all this going on. Money's amazing. It's the great facilitator. That allows you the ability to carry your problem solving abilities across time and space. But yet, it's all wrapped up in this system where if you're not educated in this system, then there are other people that are getting ahead way faster that are making decisions about money that you don't understand, that you're not consulted on. And so you feel bamboozled, you don't feel educated, and you've been told lies. And so you're missing out on your own opportunities. And so one of the things that makes me the saddest is that people don't even understand that essentially what you're doing is trading time for money. And so the ability to trade time for money is great. I'm glad that we're able to do it. But if you understand that that's what you're doing, then you begin to understand that there's actually larger opportunities for you that go beyond just trading time for money. So at Quest, for instance, we weren't trading time for money anymore. What we had done was create a system that was making us money in our sleep. So the bars would get produced, they would get into a distribution channel, they would go out into grocery stores literally all over the world. And people would be buying us whether I was awake, asleep, sick, whatever, it didn't matter. If I didn't go into work that day, we were still making sales. Now most people are in situations where if they're not going into work, then they're not making money, especially if you're a part-time employee or now is the gig economy just becomes massive. You don't even have a salary that you can count on or sick days that you can count on when you're not able to come into the office or you choose not to go into the office, that you're not generating money. And so you're in this very precarious situation where it really, really is this one-for-one of trading time for money. Now once you know that you're trading time for money and you recognize that's only one way to do things and that there are other ways, which I'll get into in a second, now your horizon begins to expand. And if for reasons of low risk, you just want to trade time for money fair enough. But what I'm hoping people understand, money's just a great facilitator, it's not evil, and that people that garner a lot of it are the people that have created the best system. They have traded the most value. So now instead of just trading time for money, which is one way of exchanging value for money, your time is valuable. So you exchange that time for money. There are other ways to create value for people that isn't just trading time for money. Or maybe it's you trade time for money once, but then over time, it's not just that. So I'll walk you again through how I generated my own wealth. So it starts at Quest recognizing that there's a hole in the market, so there's a problem. People want food that they can choose based on taste, and it happens to be good for them. But those products are difficult to figure out. They're difficult to manufacture. They're certainly difficult to manufacture at scale. They're tremendously difficult to manufacture at scale in a way that shelf stable. Okay? So we've got all of that going on. We recognize that. Then we did all the difficult things to make sure that we could deliver on that, which was incredible. It took a lot of time. It took a lot of money, resources, learnings, decades worth of learnings coming into building all that stuff, finding experts, convincing them to work with us, all that stuff. And so now, not only is that making money while I sleep, but it's also creating what's known as enterprise value. So the company itself is becoming valuable to other people that would want to buy that company for whatever reason that might be. And now we get into how interconnected money is, and this is very much a quick nutshell, but just to give you an idea of why it's so important to be educated about money, to not be just rejecting people that make money, you know, "Oh, these evil overlords of taking advantage of me, learn about money, master the game so that you can play it very well."


How Money Works (12:25)

So the way the enterprise value works is this. If you have a company and they're trying to grow their revenues, a big reason, one of the biggest reasons why somebody might want to grow their revenues is that they want their stock value to go up. Now the reason they want their stock value to go up is that the value of a company is predicated on the value of their stock. So how many individual shares of the company exists, this is assuming it's a public company, how many individual shares of the company exist, and what are people willing to pay for those shares? What's the going rate that literally that moment, because these fluctuate by the second? But in that moment, all of what are known as outstanding shares, so all of the shares that exist are in out in the world, if they were to sell all of them, how much would that be worth? Now a company can not only sell if they hold some of those shares, they can sell them on the open market and earn money that way, but they can also borrow against that money. And so they're able to bring on debt in order to finance growth in the company, which could be adding new product lines, it could be expanding into different regions, whatever. You could use that money for a lot of different things. But people that really understand the financial game at a high level are able to use debt as leverage. And so debt is often actually referred to as leverage. What they mean is maybe in the case of stocks equity, same thing, in exchange for the outstanding, the value of the outstanding shares that can borrow against that. And so now, just by building a company that other people want to own a piece of, they're able to borrow money, right? So they didn't do more things. The collateral is the value of those outstanding shares. And so now they're able to grow their company even more. And so they build around their company what is often referred to as a moat because it's very hard to compete with a company that has a massive value because of the amount of money that they're able to generate off of the value of the stocks. Okay? And so that's just one way. And I don't even consider myself super educated on the way that money works to be completely honest. This has been a journey I've always known how to, not always, in my professional career, I have learned how to make money, but investing money is actually a totally separate thing.


Investing Strategies (15:07)

And the more I learn about investing money, the more I'm like, how are they not teaching of us, this stuff? And it is complicated, but it's very learnable. And so the more that you believe this idea that people that have a lot of money are evil, that money itself is the root of all evil, then you willfully remain ignorant. And now as you willfully remain ignorant, the people that are like, "Yo, I know how this works," they're going out and they're garnering all the extra resources. And now the divide between the rich and the poor just gets wider and wider and wider and wider. And that's how we end up here. But if you, like me, go, "Hey, I," because remember, I started out broke. I did not want to remain broke forever. And so I was like, "I'm going to have to learn how this game is played." So first I learned how to make money. And now I'm on the journey of learning how to invest money. And the more that I learn about this stuff, the more I'm like, "Oh my God, anybody can do this." If you meet a minimum line of intelligence, which if you're watching this, I promise you do. If you meet a minimum line of intelligence, you're going to be able to figure this stuff out. And honestly, it's the most basic stuff that you want to do. ETFs, index funds, don't try to time the market, don't try to become a genius. Just do really basic stuff. And now you're able to take advantage not just of time, but intelligence, efficiency, all that stuff that you can remember, sock away into money, and now that money, whether it's cash, gold, stocks, bonds, whatever you decide to invest in, that's going to carry that value across time. That's so important to understand. And that's really just like that level one of getting ahead of the average person who's just training time for money. And then as you go, you're going to find that there's levels to this stuff. But the more you understand, the more control you have in your life, the more you're able to generate money, the less you have to worry about money problems. Now money is not going to solve anything but money problems, and that's something that's very important to understand. But as you learn to master the game of money, you really can get ahead. So please don't buy into this narrative that money's evil, that rich people have done something wrong to get that money. They just understand something that you may not yet understand. There are almost certainly a lot of things that you're doing that are going to keep you broke. The first is what we were talking about in the last question. It's all about financial literacy. Do you know how money actually works? As somebody who came to this game really late, I understand how easy it is to be educated, to be dare I say intelligent, and still not actually understand how money actually functions. And so you want to make sure that you're taking time to get financially literate. The next thing is, and some of these are going to be so basic and people don't do them, you need to stop spending so much money. Most people live paycheck to paycheck. Even people that are making six figures live paycheck to paycheck. It's something like two thirds of people that make $250,000 a year still live paycheck to paycheck. So the goal is instead of flexing on how much money you make, you want to make sure that you're living below your means. If you want to dramatically reduce the amount of stress in your life and set yourself up for success, you want to make sure that you're living below your means. Now as you begin to live below your means, first, the first habit you're going to want to introduce is that you're going to start saving some of your money. So of course there's going to be a amount that you're going to allocate towards your living expenses, your house payment, or your rent, your car payment, insurance, all of that stuff, food. But then you want to make sure that automatically you're saving money. If you're not automatically saving money, then you're walking down the path of remaining broke. So you want to make sure that you're living below your means and you want to make sure that you're automatically saving money. Now once you have saved up enough money that you have somewhere between six and 12 months of emergency cash on hand, if you get sick, if you hate your job, any of that stuff is exacerbated a thousandfold if you're living paycheck to paycheck because now you've got nowhere to go. There's no way for you to be able to weather that storm. And so it's what's known as a threshold event. Everything in your life may seem like it's going well until you hurt your back and you're unable to go to work for two months and you were living paycheck to paycheck and now you're in financial ruin. Or God forbid you get a diagnosis and you end up with medical bills and you go bankrupt from that. That happens so frequently. So you want to make sure that you have six to 12 months saved up. Now once you have six to 12 months saved up, now we want to start thinking about investing. Now if you're not investing, you're going to be getting eaten alive by inflation. Now a lot of people are not thinking about inflation. And the reality is even in a good economy, you're looking at inflation being around 2%. Now right now as we're recording this, inflation is about eight and a half percent. So you don't want to count on it being as low as 2% because that's not always going to be the case. Now the crazy thing is most people don't understand what inflation actually is.


What is Inflation? (20:39)

So inflation is your ability to buy something goes down every year. That's the same as losing money every year. So imagine if you have $100. Inflation, if inflation is 8.5% like it is now, the next year, buy the next year because it's happening every day, buy the next year. You don't have $100. And even if you saved it, didn't touch it, it's locked away in your bank account. You now have the equivalent, it'll still say $100. But that $100 now only buys you the equivalent of $91.50. Okay? That's inflation. So your buying power, even though the number stays the same, the buying power is going down. So as of right now as we're recording this, you would need to make $8.5 every year in order to stay at the buying power of your $100. Okay? So saving money, even though I just told you to save 6 to 12 months, you want to make sure that you understand that you can't just sock all of your money away and think that it's going to stay. And this doesn't haunt anyone more than me. I get it because investing is nerve-racking. But if you don't invest, you're not going to be able to keep up with inflation. If you don't keep up with inflation, you're going to be losing money over time. And if you're losing money over time, that nest egg that you're going to hope takes care of you at the end of the day isn't going to be there for you. And so you really have to be thoughtful about how you invest. What is up, my friend, Tom Billie here. And I have a big question to ask you. How would you rate your level of personal discipline on a scale of 1 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. Then, 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.


The Best Advice on Investing (23:20)

Peace out. Now, I'm going to give you the most basic advice on investing. Now, why am I giving you basic advice? Because all the smartest investors in the world are saying, "If you don't know anything about investing, this is what you want to do." And because I do not consider myself a good investor, this is the only advice that I feel like I can give you that's actually sound advice and that is to invest in passive things. So you're going to be investing in ETFs, in index funds. Now, index funds are the easiest to explain and index fund is a group of companies. So rather than you saying, "I'm so smart, I know what companies are going to do well," I would say, "Don't do that because even the smartest people that do this for a living have a hard time being right over a long period of time. Here is a fact that most investors don't want you to know, most investors over a 10-year period are going to lose to an index fund. So the really smart people with all the algorithms, they're all going to lose to just picking a big basket of companies and investing in those and not touching the money and then doing something called dollar cost averaging. So rather than thinking that you're so smart that you're going to beat the market, right? I'm going to time it. I know when the bottom is, right? Because the best advice on investing you're ever going to get is the following, buy low, sell high. Now I don't mean that as a joke, that really is the best advice you're ever going to get. The problem is most people can't do it and the reason they can't do it is they get emotional or they don't have enough knowledge. And so I see so many people making these big bets because it's sexy, it's cool and when it hits you feel like a king. The problem is the house always wins and the odds of you on a long timeline, winning like that are virtually zero and Ray Dalio made this really clear to me. So Ray Dalio runs the largest hedge fund in the world. It's called Bridgewater and Associates. And he says, Tom, look, I'm spending hundreds of millions of dollars on research. I've spent probably even more than that building the best algorithms in the world. I have a talent pipeline where I'm recruiting the best and the brightest people from across the entire world. I have fiber optic cables that allow me to make transactions that are measured in milliseconds and you're competing against me if you're trying to actively trade in the market. And so that's why people like him who understand how this system works are saying for the average person that's not the game that you want to play, the odds of you losing border on 100%. But if you go with something like an index fund, which is there's one called the S&P 500. The S&P 500 is effectively the 500 biggest companies on the stock market. Now, the odds that you become one of the biggest companies on the stock market and stay there, you're going to stay there for something to average company stays on the S&P 500 for like 16 years right now. Now it's been declining, but still that's a long time. And the way that the S&P 500 works is when one finally gets down to the bottom and it gets booted off, then they replace that with another one. And so you always have the top 500 companies in the stock market at that time. And there's a whole bunch of different index funds. It could be gross stocks, it could be stocks in foreign markets and whatever one you're comfortable with. But at least it's a basket of stocks and your dollar cost averaging in, which just means that every day or every Wednesday or whatever, you're putting in a certain amount of money that you want to invest. And you're just going to leave it. You're not going to panic when the market goes down and you're not going to, when prices are up, you're not going to buy into the euphoria.


Why Would You Not Want to Buy into the Euphoria? (27:21)

Now why would you not want to do that? The reason that you don't want to buy into the euphoria is because when people are euphoric, prices are going sky high. Now in those moments, and I have now lived through my first cycle where I was really paying attention to the market and it got euphoric. So now I know what it feels like. And what it feels like is it's always going to go up, that you're a genius. You're making all this money hand over fist. Now the good news is, when it all crashed, I didn't sell. I didn't buy like a fiend it was going up and I didn't sell when it went down, which means that I don't have any realized gains or losses. Now of course, when things are going up, if you want to take money off the table, by all means do that. You then bought low and you sold high. Makes all the sense in the world. But the last thing you want to do is buy like crazy as the price is going up and then panic as the price drops because now you've bought high and sold low. But that's what most people do because the euphoria is so exciting and people feel like, oh, there's no way that I can lose. And then when the bottom falls out, they feel like, oh my God, it's only going down. This is all going to go to zero. And the reality is it might. But if you follow the principle of never investing more than you can afford to lose, then you can ride out the market. And if you're in a passive fund like the S&P 500, then it's just your dollar cost averaging. You're just buying at that steady interval. Now, when the price drops, you might buy more.


What Does a Good Deal Look Like? (28:58)

If you know what a good deal looks like, hey, if the S&P 500 is down 20%, then maybe what I'm going to do is by, instead of my $100 a week, I'm going to put in $150 or $200 if you have the capital of the spare. Now you're getting things at a discount. I've heard it said, I think it was by JustBreathe Singh, that a recession is basically just a black Friday deal for assets because now everybody's panicking. Prices are falling. But if you've been passively investing into something as stable as the S&P 500, now you're just able to get more of that at a discount. It can be very advantageous. And this is why they say more millionaires will be made in a recession than in any other time because all of these assets are on discount. Now the question is, what's an asset?


What Is an Asset? (29:49)

And so this is another habit that keeps people broke is they're not learning about money. They're not taking this time to figure out the difference between an asset and a liability. People are spending all of their money. Death, habit, number one, you're spending all of your money on liabilities and not assets. So the key is to understand what an asset is, to understand what a liability is, and to buy appropriately. An asset is something that when you buy, it's going to go up in value and not cost you money or even pays you money, more money obviously than it costs you. If you have a liability, it's the exact opposite. So the classic example of a liability is a car payment.


Liabilities Vs. the Assets (30:30)

The second you drive a car off the lot, it's going down in value and with very rare exception. It is never going to go back up. So it's going down in value and you've got to keep making those payments. So you've got money going out while value is declining. Another one that people often think of as an asset but is usually a liability is your own home. Now the reason that your own home is so frequently a liability is odds are you have a mortgage, odds are it's the most expensive thing in your life and it's not like you can just get out from under that liability, especially if the bottom falls out. You're going to have property tax depending on where you live and you're going to have upkeep no matter where you live. So now you're pouring money into this thing and maybe the value is going up but maybe not always and between the property taxes and the upkeep, you may be paying more than the value is going up over time, especially if you account for opportunity cost. So the odds of your house after taxes, fees, upkeep, all of that being a better use of capital, if you're living in it, being a better use of capital than taking that same money and putting it into an index fund or something like that, a diversified portfolio let's say. The odds of the house returning more on that are very low unless obviously if you get into rental properties and things like that and you're not living in it. So now it can actually generate cash flow.


Breaking The Time-Money Equation And Building Wealth

It's a math equation (32:03)

Well then it's just a math equation. This is how much I spend on average per month for insurance, property tax, upkeep, all of that. And if on average the rent that you're getting is more than the money that you have going out then it's very simple. Every month I'm making more off of this property than I'm losing. Cool. Now you've got an asset. So that is the difference. If you're paying for something, it's a liability. If you're making money off of something, it's an asset. Now most people don't have the discipline to buy assets because liabilities are usually the fun things. It's the cool clothes, it's the car, it's the fancy house, all of that stuff. And so people get themselves into a difficult situation because now the vast majority of their capital is going out. And this is how people end up in a position where they're living paycheck to paycheck. Okay another thing I want to talk about that's a bad habit is that people are on a career path. Now why is that bad? You ask. I have so many people around me at my company that are on a career path and they're amazing people. But the people that really make money are the people that get so good at something that they can solve the most difficult problems that the company faces. So rather than thinking, oh I am an editor and so I'm going to get good at editing and I'm going to work my way up that way, you can basically predict what your salary is going to be. You're more or less going to get a 2 to 5% raise year over year. There'll be a couple times where maybe you're promoted into a role within that lane that has more responsibilities and therefore you can pay more money. But you can just look at that career path and say what is the person that's the highest and in this chain that I'm working my way up, what do they make? That's what you're going to make plus the sort of annual increases. On the other hand, if you look at who's the person in the company making the most money full stop, now you begin to understand that just following that one career trajectory is not necessarily going to be as lucrative as solving those very difficult problems that the highest paid people in the company are solving. So I'll give you one example.


Break the time for money equation (34:20)

If you want to get wealthy in a company, go into sales. I mean that's just like the classic path to making money because now if you're getting a commission off of what you sell, you're only hemmed in by how much you can sell and the price of the thing that you sell. So now you've got a lot more flexibility. So be very thoughtful as you're exchanging time for money. Don't forget that you also want to be in a position where you can exchange skillset for money, efficiency for money. All of those things allow you to break the basic time for money equation and that is going to be far more lucrative. And now as you're making that extra capital, if you keep your costs of living low, now you're able to invest into those assets. And as you invest into assets, now you're kicking off either cash flow or you're building up wealth over time and something that can be sold for way more than you bought it for. Okay, if you do all of that, you can finally break these habits that are keeping you broke. There are certain habits that basically all wealthy people have in common that you guys can put to use in your life. And the first one is going to be the most controversial, but I could not feel more strongly about this. They make no excuses. They take total responsibility for their lives. In fact, many people that fall into that category will take responsibility for things that clearly don't even have anything to do with themselves. I have said many times, arguably the most controversial thing I've ever said, but I'm telling you if you adopt this in your soul and act accordingly, it will change your life forever. You will become an unstoppable machine. If I, Tom Bill, you were hit by a drunk driver, I would blame myself. Not because I don't think that the drunk driver caused the accident, because blaming the drunk driver gives all my power away. And I can't do anything about them. I can't stop people from drinking. I can't control the way other people drive, but I can control whether or not I'm on the road. I can control how good I get at defensive driving, how much I pay attention and looking out, all of that, all of those things I control. So if you take control of your life and make no excuses, now you're in a solution oriented mindset and people to get wealthy, let me tell you right now, all they think about are solutions.


Be in a solution-oriented mindset (36:26)

How do I solve this problem? Because you are, if you're wealthy, you must remember you're paid in direct proportion to the difficulty of the problems you solve. And if that's true, you better get very good at solving very difficult problems. And if you have something that's holding you back, like I'm not as smart as a lot of people, and that really pisses me off. But the reality is, pissing a moaning about it is not going to make me any smarter. All I can do is go make the most of what I have. I can go learn. Now, I can get pissed off at my mom. I could be angry at my dad. But the reality is that I am where I'm at from either how I was impacted as a kid in the developmental years, how I was impacted in the womb, my genetics, all of that stuff. But it's all done. The dais cast is nothing I can do about it. But there's 50% of my life that's completely malleable. And so I'm going to focus on that. And I'm going to, like other wealthy people, be obsessed with learning. You've got to be obsessed with learning. So you're not making any excuses. You take total responsibility for your life. And one of the ways you take responsibility for your life is even if circumstances are against you, even if you really have been dealt a bad hand, you know that you can get better at things, you have the only belief that matters. The only belief that matters is if I put energy and effort into getting better, I will actually get better. Now, why does that matter?


Skills (38:04)

Because skills have utility. Now why does that matter? Because skills that you do something other people can't do. And that thing that it lets you do is solve problems that people want solved. What have I said like eight times in this episode? That people will pay you in direct proportion to the difficulty of the problems you solve. So going out, learning, getting skills that have utility allows you to do things other people can't do. You're going to be able to get money other people can't get. That is something that wealthy people understand. Maybe it's not fair, but who gives a fuck? Nobody's coming to save you. Nobody's going to solve these problems for you. And if you're turning to people for a handout, all you will ever get is what they're willing to put in your hand. But if on the other hand, you're willing to go, "Hey, what's the hardest problem you have to solve? I'm going to make that problem go away for you. And all I ask in return is money. And I'm going to ask the amount of money that's either equal to the exchange for you or less so that you're tripping over yourself to buy this thing. And that is precisely how you end up breaking the time for money equation. Because wealthy people understand, you just can't charge enough for your time in order to make it worth it. So as you can imagine, there are people that offer to pay me a lot of money for one-on-one coaching, but I don't do it. And why don't I do it? Because unless you're willing to give me equity in your company to do it, I just can't charge enough to make it worth the time. So you have to break that time for money equation. You have to be getting ownership in something. And that's another thing that people understand, wealthy people. That real wealth is going to come from owning something.


The Importance of Ownership (39:49)

You own something that other people consider extraordinarily valuable. That is going up over time. Now the reason that ownership matters is because you want to buy low and sell high. The reason that entrepreneurs end up making a lot of money in success, obviously, is because they start with something that's worth nothing. And they get very clever and they build something that over time goes from worth nothing to worth whatever the market values it at. So to give you an example, in my own life, talked about this earlier, we took Quest from a product I couldn't give away, literally. I know that seems ridiculous now, but when we first launched, I would stand at trade shows until bodybuilders who ended up becoming like the most ardent purchasers of Quest. And I would say free protein bar, it's a free Quest bar. I will give it to you right now. We didn't even in the beginning, we didn't even ask for an email. All you had to do was extend your hand grasp bar. That was the sum total of the payment that we were asking for. And people wouldn't do it. So we had to take it from figuring out the formulation, building out the manufacturing, all the things that we've talked about, convincing people to try it. And we went from that to something that people were willing to pay a billion dollars for. But in the beginning, it was worth nothing. And so the amount of money that we had to put in to get profitable, and then we reinvested all that money, and then ultimately we were able to sell it for that extraordinary sum of money, and it was a huge win, life changing for all of us involved, because we started with nothing and we owned it and we built value in it. That's the key. You have to own something that goes up in value over time. So whether you bought low and you're going to sell high, or whether you were the one that created all the value, and so you didn't even have to buy anything, you just created value in this thing that later people wanted to own. So ownership is a huge key for people that end up generating wealth.


The Key to Wealth (41:49)

You want to own, you want to hold. And so Warren Buffett talks about this a lot.


Money Philosophies And Master Tricks

Selling Makes You Rich, Holding Makes You Wealthy (42:00)

Selling makes you rich, holding makes you wealthy. Now what does he mean by that? If you want to sell something, you can get that influx of cash, and you will have whatever that cash is now. But now you're fighting against inflation, right? So you've got the money, but what the hell do you do with it? What are you going to do with it that doesn't allow it to get shipped away by inflation? You're going to have to find somewhere to put that money that's earning you more money than inflation is taking. And so that's why holding really becomes the ultimate play if you're holding the right thing, because it's going up, up, up, up, up, over time. And then you can either borrow against that. This is something that wealthy people understand. You can borrow against your assets. You don't even have to sell them. You use the asset as collateral. You go to a bank and let's say that you're collateral, sorry, it is your collateral, but your asset is what I meant to say. Your asset is going up, let's say, 5%, 7% year over year. And inflation is 2%. Or like right now, 8.5% is the current inflation. Hopefully by the time you watch this, that won't be true. And your assets going up by 10%. So now you're in a situation where even though inflation is chipping away at most people's ability to buy, and whatever you have in savings is going down by that amount of inflation, you've got this asset that's going up more than that cost. Now if you've got a bank that's willing to give you a loan with that asset as collateral, and the loan is let's say 3% or 4%, but you're making 5%, 7% off of that money that you're either using to reinvest in your company or buying stocks or whatever you're doing. You have to be very careful buying stocks on debt, which I'm actually, I advise people not to do. But just so you understand how money works. People that know how to use debt effectively, that's what they're doing. They don't sell the asset. They borrow against the asset. And as long as there's a delta between the cost of the loan and the amount that the asset goes up, you now never have to sell the asset. You can just keep borrowing against it. This is how real wealth has made real generational wealth. So yes, you can sell the asset and you can make that money, and you will have to do that over time in order to pay back the loan and all that stuff. But again, there's a delta, so even as you're selling pieces, you're making more than you have to pay back. It's really crazy, and it's freakish how long it took me to understand even basic things like that. So trust me when I say I deeply empathize with people who are hearing that for the first time. So understand that. They understand they have to own something, they have to own something that goes up in value over time, and that they want to own something ideally that they can borrow against. And so that's how selling makes you rich, but owning and holding can make you truly wealthy. All right, those are the habits. If you follow those habits, you really can turn things around in your life. Be hyper careful about using debt. That's like the advanced level stuff, but just by way of making sure you understand how the system works, it can be a very powerful tool in the right hands. I know a lot of people are asking the question, do I have a spending problem or do I have an earning problem? Now, the great news is you've identified the only two levers that there are. You can either spend less money or you can make more money. Those are your two options. But I would say that most people have a problem with both. The odds that you're spending too much money are virtually 100% unless you're really able to sock away money week after week, month after month, year after year. And so the easy way to figure out is how much money, more money do you have at the end of the year than you have at the beginning. And if that number is going up and it's going well, amazing. Now remember, the goal isn't just to save a ton of money. You want to save six to 12 months. Beyond that, you want to be finding a way to invest. Now look, there are certain economies because I feel bad saying this right now knowing that I have a huge portion of my wealth right now in cash. So some of this has to do with seasons. The reason is I think that we're in a very bizarre period of volatility right now that I don't expect to last. I am now beginning to look more seriously at different assets because I do think that things are relatively depressed right now.


The Warren Buffet approach to money (46:09)

Be aware though, I am not a financial advisor. This is not financial advice. You should be very careful you take financial advice from. So when it comes into the specifics, I would say go find somebody that knows way more about what I'm talking about, but just getting you to understand I was feeling weird not admitting that right now I have a ton more in cash than I would normally. So anyway, there are different seasons. But for the most part, you don't want to have a bunch of money in cash. You want to have your six to 12 months and then you want to have the rest invested in something that is very passive. You're not in there actively trading going up against people like Ray Dalio. You're taking a basket of things. You're not trying to time the market. You're not trying to outsmart the market. You're saying, this is how I say it to myself. I'm not smart enough to pull this off. So I'm going to take a diversified approach to buying low selling high. I can't time the market, so I'm going to dollar cost average in. And then I'm just going to make sure that my assets are going up over a long period of time. I'm not going to panic about little blips. So and I'm talking like three to four year movements. So I'm not worried about something going down over a three year period. I'm just thinking, okay, I want to make sure that I have a very robust diversified portfolio and that it's going up over longer periods of time. And just look at historicals. How is it performed historically? There are no guarantees of course. But if something has done well over the last hundred and twenty years, odds are that you can roughly count on something like that moving forward. And so that is the very basic approach that I would take. You want to make sure that at the end of the month that you've got more coming in than you have going out. And it really is that basic. And then just remember there are two levers to pull. You can either spend less, which is always an option. I think you're self-cool because you have a fancy car, fancy house, fancy watch, fancy clothes, none of that. I buy most of my clothes on Amazon. Obviously, I could afford a lot more. But I just don't tie. I actually do tie myself to my sense of style, which I actually do like. But I don't tie that to whether the clothes are expensive or not. And I remind myself constantly I could wake up broke tomorrow. So don't tie your identity to that. Don't be afraid to pull back your expenses as just Brie seeing has said many times, if you can't buy something five times, don't buy it once. I think that is very good advice. So be super thoughtful about your spending and then go crazy on figuring out ways to make more money because personally, I couldn't live in a world where all I was doing was saving. I want to be excited about my potential upside opportunities. And so for a lot of you figuring out a way to invest in yourself, to take a chance on yourself as either having a side hustle or being a full-blown entrepreneur will be the greatest journey of your life. Even if it doesn't end up paying off financially, it will be an incredible journey. And if you love it and you love that hustle, as long as you're not investing so much money into the bank, into the business that it becomes stressful. If you lose it, then hey, that first one fails. Try, try, try again until you find one that succeeds. Less entrepreneurs almost always have a litany of failures behind them. So don't stress yourself over that. Just make sure the unit position where you don't need a lot of money to survive. Then you can do a lot of cool and exciting things.


Can money buy happiness? (49:34)

The most important question you can ever ask about money is can money buy happiness? And I'm begging you and pleading with you over the next however many minutes. Please pay attention so that you may learn easily what I learned with great difficulty. Money can't buy happiness. I'm sure you've heard that a thousand times, but I want to tell you why it can't buy you happiness, but why people keep chasing money? Because people are always going to chase money. And the reason people are going to chase money is because it is extraordinarily powerful. But it can't touch how you feel about yourself. So I think that people have been told lies about money like we were talking about earlier, but one of the lies that you've been told is that money isn't powerful. It's not going to make you feel the way that you want to feel. And the truth is it isn't going to make you feel better about yourself, but it is the great facilitator. And so if there's something that you want to build, money is going to unlock that. Money can make you feel amazing that you can do something incredible with your time, your opportunity, your knowledge. You can build something extraordinary that is this economic engine that serves people. I think entrepreneurship is turning your potential into skill set in a way that allows you to build this ongoing economic engine that allows you to create something that improves people's lives. That to me is entrepreneurship. And that's awesome. That feels amazing. So money's more powerful than people think. But it doesn't make you happy. What makes you happy is striving to add value to people's lives, to improve every day. Those are the things that are going to make you happy. So even if you're pursuing trying to create a business and that business fails and you end up not only not making money, you lose money, the failure will suck. Don't get me wrong. But when you're going all out every day and you're improving and you're helping people and you're bettering their lives and you're sincerely pursuing getting better so that you can serve people in a way that feeds you and gives you more energy than it takes, that is the juice. The greatest thing that life has to offer you is the following.


The mastery lie (51:40)

Okay? I'm telling you this from the position of somebody who's made a lot of money. The greatest joy life has to offer. The highest amplitude joy that life has to offer is the following. You are working very hard. You are scaling a mountain. And that mountain is incredibly difficult. I don't mean a literal mountain. You're building a business. You're working to become a great athlete. Whatever. You are working your ass off. It is hard. You are on this mountainside. You have frostbite in your fingers. You can barely hold on, but you're going. You can't believe it. You look down. It is a terrifying drop. If you fall, you die. It's nerve wracking, man. These stakes are high, but you decide you're going to keep climbing. You're going to keep climbing. And the moment where you're working, you're ass off, but you can see the ledge. You're about to get to it. It's all working. Everything that you've been busting your ass. It's actually happening. Oh my God. And if I get to that top and I push myself up, it's success. It's a buffet. It's an orgy. It's whatever. It's something incredibly exciting that you have just been so amped to get up there to. That is way more exciting than the success, the halving of whatever it is that's on your mountain top. It's that moment there where you're clinging to your fingers. You're clinging to the side of the mountain with your frostbitten fingers. And it looks like it's going to work, but it hasn't paid off yet. But if it does pay off, it will be extraordinary. That dream, that moment, it's all working. And if I pull this off, my dreams come true. That's better than your dreams coming true. Why? Because the way the human mind works, you can never eat a meal so satisfying that you're never going to be hungry again. You can never drink a drink so thirst quenching that you'll never be thirsty again. You can never have sex so good that you never want sex again. It's just not the way that it works. We have this internal hunger that nature has given us to make sure that we keep going and we keep getting fed. And we keep getting water and we keep procreating. We have to keep doing all this stuff. So you have, from an evolutionary perspective, buried inside of you, an insatiable drive to keep going. So you can't ever have that thing. Even happiness is fleeting. You can't have happiness. You can't hold on to it. It's never going to be yours forever. It will come in and out of your life. With the things that create happiness, improvement, sincere pursuit, doing something you're passionate about, helping other people, those are the things that are going to make you feel the way that you want to feel.


The Master Trick (54:28)

Now, the master trick that money pulls is one, because it's useful in the way that we talked about, the great facilitator that allows you to build, people will chase it forever. When people get it, they get all these signals of success. And because people often struggle with money problems, they look at that and they think, "Oh my God, if I had all those cool things, I would feel about myself the way I feel about that person." And all of my stresses would go away. The reality is money will make money problems go away. It really will do that. And it's incredible. And it will alleviate a ton of stress in your life. But it will never make you feel about yourself the way you feel about that person. Because you have misattributed being in awe of that person with the money. The reality is what you're in awe of is that they were able to translate their efforts into tangible success. Now that you should be in awe of, that you should strive for, and that striving, even if you're never able to achieve the level of accomplishment that you want, that striving, that improvement, that translating your potential into actual usable skill set, that will make you proud of yourself. That will give you self-respect.


The Selfish Gene Hypothesis (55:53)

That will give you self-worth. Don't worry about the championship ring. Worry deeply about becoming capable of a championship performance. Because nature will reward you for that. That's why it feels so good to make progress. Nature only has two levers, pleasure and pain. Nature's job is to ensure that you stay alive long enough to have kids that have kids. That's all nature cares about. And she doesn't care about you. Nature doesn't care about me. Nature just cares that we stay alive long enough to have kids that have kids. The selfish, genie hypothesis. If that's true, then we know that it's going to use the two levers that it has, pleasure and pain. It's pleasurable the things that it wants us to do more of that are going to keep us alive long enough to have kids that have kids. And it's going to make painful the things that put us in jeopardy. And one of the things that is likely to keep us alive long enough to have kids that have kids is this pursuit of improvement so that we can get better, so that we can acquire skills that allow us to hunt better, gather better, support to try better, fight better, whatever. But we need to constantly be improving because skills have utility. It lets us do things that other people can't do. It lets us protect the group, it lets us protect ourselves, it lets us stay fed, it lets us survive a famine, it lets us survive warfare, all of that stuff. It lets us convince somebody to mate with us. Skills have utility. And so nature had to hardwire the acquisition of that improvement and make that incredibly joyful, to make it feel good. That's also why nature made that moment where, "Oh my God, this is going to work. Feels so good." So you keep going. So you would do those things. So you would reach that mountaintop. Maybe there were greener pastures, more animals, better berries, whatever. But you had to have that incentive. Money can't make that feeling inside of you. Money's never going to give you that. But becoming the kind of person that's capable of being so talented that they can solve problems that people are willing to pay for, that will make you happy. So the two end up coinciding when you have the right mindset, when you're doing it for the right reasons, when you put money in the right box, the great facilitator. It won't make you respect yourself. All of your insecurities are still going to be there. But it will eliminate money problems. It will allow you to build. And the pursuit of the things that people will give you that kind of money for will turn you into the kind of person that you'll be proud of. That's the truth about money. I was once asked if I only had $1,000 to invest. How should I go about doing that? All right. So number one, when I was actually in that position, all I did was spend my money on getting myself educated. So knowledge may be the right answer here. But since that's not as cool or tactical as what I'm about to go through, I would just say that learning is always going to be the right answer. Make sure no matter what you're doing that, learn as much as you can. That's going to be the thing that will move you forward. More more than any finite amount of money in any kind of investment is going to return. Knowledge is the thing that monetizes forever. So money spends once, knowledge, monetizes forever. Okay. Now, having said that, I will say there are three things that if I had $1,000 to invest that I would do. Now, again, I don't consider myself a master investor. So take this for what it's worth. The first thing that I would do and the bulk of what I would advise you to do with your money, this is actually not what I did. I did the first thing I said, which is learn like crazy. And then the third thing, which I will tell you when we get to. That's where I put the absolute vast majority of my money. But the first thing that I would do in terms of giving other people safe advice, not knowing how good they are, how diligent, hardworking, all of that good stuff, I will say, number one is to buy a very safe asset, something like the S&P 500, something where you're just going to dollar cost average into the stock market, like we talked about, something that has a long track record of success that it's very hard for people to beat the market.


Investment Strategies And Risks

Put Your Money Into Something Safe in the Market (59:48)

And that's just sort of the benchmark, right? Is the market. You at least want to be hitting that. So I would do that. A nice, diversified portfolio, dollar cost, average in. That's where I would advise you to put the bulk of your money, knowing that I'm going to fully confess at the end what I actually spent my money on. The second thing is while I would say there should be a much smaller part of your portfolio, I would do something that is a future facing bet. Now the reason that I think that you should do this but make it a much smaller part of your portfolio is the odds are that you're going to be wrong. But I think it's very important for you to force yourself to come up with a thesis about the future that you're actually willing to put your money on. And maybe you come up with a few things and so you hedge your best and you put it on a couple things. The big bet that I'm making about the future right now, knowing that I could be wrong but man, I can't convince myself that this is wrong, is cryptocurrency. So I'm just an absolutely massive believer in the blockchain. And so I think that it's going to transform everything and I'm saying this in the middle of a bear market. I have not sold a single Satoshi. So I have put a substantial portion of my net worth into that but not more than I could lose without being stressful. So I want to be very clear.


Bitcoin & Ethereum (01:01:30)

I never advise anybody, even somebody in my position to invest more than they're willing to lose. Now because of that, we're in a bear market right now. I don't really care. As long as my long term thesis is intact, which I think the world is going more and more digital, I think people are going to digitize more and more things and money for sure is going to be one of those things. It so happens that I think as of right now, the two safest bets because I'm actually quite risk averse until we get to number three where you see I'm a total psycho for risk. But for most things, I am totally risk averse. So I've only invested into two things that I hold currently. I had three at one point in any major way. I think I have some minor things here and there but very minor. That's Bitcoin and Ethereum. So now do your own research. If your thesis on what the future is is totally different, that's the key that you're forcing yourself to come up with the thesis about where the future is going and you're going to clock it and see if you end up being right. So my whole thing is I don't know that I'm right about this. I want to see if I'm right. So I'm making a bet on the future, not so much it would be stressful if I lost it all and I'm going to see how this plays out. Now as I begin to trust myself more, this is where you just take the risk bucket.


What are You Willing to Lose? (01:02:37)

So the first bucket is the as low risk as we can and still beat inflation bucket and now we're going to take a slightly higher risk bucket. I'm still trying to be really thoughtful about what's the within this riskier category, what's the safest bet. So I'm going to play it that way but it is riskier but I'm doing it to really learn. Can I read the future or not? That's the wrong way to say it. When I create an informed enough hypothesis that I'm right enough to beat inflation, right? That's always the name of the game. So again, I'm only investing as much as I'm willing to lose and then I watch and I learned something about myself and I don't lie to myself or trick myself. If I end up being wrong, I need to own that I was wrong and figure out what was it in my thesis that fell apart so that I can get better over time. And also I'm being very thoughtful about who I listen to, right? That's something that you really want to do as you're investing this money. Who are you going to take advice from, right? So being really thoughtful about that and then checking their track record. Are they able to beat the market? Okay. Now the third bucket, remember what I actually spent my money on when I was in a position to be asking this question was learning and then this final thing which is myself. And I have irrationally bet on myself in life. Now it ended up paying off at least so far. And so we can be tempted to say survivorship bias or to not recognize that it could be survivorship bias, right? There could be a million universes in which betting on myself was the worst thing I could have ever done. And so I way overextended myself on the bet of myself portion of this bucket. But that was always my strategy was I wanted to invest in myself knowing that I had to get so good that I could do other things that people couldn't do that I had to take complete and total ownership of my life. I couldn't make any excuses. I could never say, oh, this is somebody else's fault. And if I ended up homeless, there was no one to blame but myself. Now I was very comfortable with that. So you have to be really thoughtful about how comfortable you are with that. And what does your worst case scenario look like? I have the very good fortune of when I was in my young days and I really didn't know how I was going to put food on the table that I knew I could always go back and live with my mom. And I used to say that to myself and not everybody has that. But I was like, well, worst case scenario, I'm not going to starve to death. I just need to save enough gas money that I could drive back home. And I was like, okay, I know I can't ever go below the gas money. It would take me to get back to my mom. If you don't have that kind of safety net, you need to be really honest about that. So where are you? How much would you need to save up before you can start betting on yourself like that? And maybe you need to do it in smaller increments. So you're betting on yourself but in a side hustle. And only when the side hustle is making more money, would you leave your steady paycheck? So that was a big thing for me. And then obviously over time, I was very thoughtful actually about making sure that I wasn't burning my ships at the shore. And so I had a steady paycheck. I was making sure that I was going to be able to at least keep food on the table. But when Lisa came into the equation, now I felt like there really is somebody else that I have to think about. And so I actually became a little bit more risk averse. I still have a massive risk tolerance. What would probably distress most people. But I have found that if you can really check yourself so that you know, okay, this isn't working, you're not lying to yourself. You know when something is going in the wrong direction, you're willing to stare nakedly at your inadequacies, you can trust yourself to invest. Because you know, at some point I'm just going to have to admit this isn't working. I need to scale back, pivot, whatever the case is. And so I definitely trust myself to do that. And given that I have Lisa who's just a wicked entrepreneurial mind that I've got somebody else that's going to be able to gut check me and say, okay, this isn't making sense. But I think having a bucket, but you have to consider that betting on yourself is the highest risk bucket.


What should most of your money be invested into? (01:06:43)

So you want to be very, very careful. You are the, oh God, what's the phrase? You never want to fool yourself and you're the easiest person to fool. And so you have to be very careful knowing that your whole job is to be honest with yourself, be able to accurately self-assess, and that the thing that you're probably the worst in the world at assessing is yourself. So you have to be very, very thoughtful. That it's going to be all too easy to convince yourself that you're a sure bet. I had convinced myself that I was a sure bet, but you'll notice that I didn't give you the same advice because I know how insane that is. And that the fact that I was able to convince myself to do it, even though it worked out, like I try to be very realistic about, like you want to be really, really careful. And so I would not advise other people to do the very thing that I did. So all the things that I've talked about today are the things that I strongly encourage you to do. I do not advise you to be crazy high risk, don't burn the ships to the shore, be very thoughtful, protect your downside, which is definitely something that is between the lines talked about, but I'm glad that I'm saying that now explicitly. You want to protect your downside, be very careful. Make sure that you have an exit. Do not put yourself in a position where you don't know what your weight out of this is going to be. Don't get yourself so overextended that there's no way to back out, right? Don't be getting so many liabilities, so much debt that there's no way out of that stuff because that is when you're not going to be able to bet on yourself. Now there's all this pressure and all this stress. It has to work out. Gun to your head. Ships have been burned at the shore. I don't know about you, but that does not feel like a fun way to live my life. So those are the things that I would do if I were you. I would learn as much as I can. We'll get invested into a very safe asset. I would figure out how well I'm able to read the future and have a smaller bucket recognizing that it's a risky bucket, but protecting myself against the downside in that one. And then because you never want to leave something out in the field, you want to make sure that you push yourself as hard as you can't bet on yourself, even if that's switching jobs, making a lower paying job because it's going to be a better long term career, that kind of thing. You don't have to be an entrepreneur to bet on yourself, but find a way to bet on yourself.


What is the riskiest bucket for placing your money? Why? (01:09:06)

But make sure you recognize that as the riskiest basket. Right guys, learn how the game of money works. You really can master the game. You do not have to be beholden to anybody. I started out broke and I completely turned my life around and I did it by mastering a set of ideas. And those ideas are available to you. We talked about them, many of them today, and may they serve you as well as they have served me. Till next time my friends, be legendary. Take care. Peace. All right. If what I just told you about how the game of money works, you were definitely going to want to watch this next clip about how to get your mindset right. It will help you play the game even better.


Brain Chemistry (01:09:51)

Each and every one of you at some point in your life, you are going to hit rock bottom. The question isn't will you hit rock bottom? The question is what are you going to do with yourself when it happens? And for me, I was teaching film and I met these two buff rich guys and I thought, oh my God, six pack abs and well. I've got to follow these guys. It's literally like I was meant to meet them. And they said, Tom, you're coming to the world with your hand out. If you want to control your art, if you want to control your life, you've got to get rich. So hey, come on. We're starting this technology company. We need a copywriter. You'd be perfect for the job. So I went and I did it and I said, but don't think of yourself as a copywriter. Understand, this is a startup. You can have any job in this company that you want. You just have to become the right person for the job. So I took them seriously and I started working my ass off to get better, to focus on the things that I needed to do in order to get good, to grow and be able to execute. And I got so good that by the time we sold that company, I was the chief marketing officer and they'd given me 10% of the company just based on performance. So imagine giving somebody something that amounts to millions of dollars just based on how hard they've worked. That was the kind of blood, sweat and tears that I put into it. But when I came into it, we all thought it was going to take us about 18 months to sell the company. Eight and a half years later, in the depths of despair, I realized something had to change. And I went to my partners and I quit. And I said, "Guys, here's your equity back. I don't believe I should get anything. I don't plan to cross the finish line. I'm going to go do something that makes me feel alive." And let me tell you right now, I said that from the position of being in a place where I had ownership in a company worth millions of dollars, I was making more money than I'd ever made in my life. I was standing in a beautiful conference room overlooking the Pacific Ocean in the house of a company that we had built that was winning awards. And I was so fundamentally unhappy that I finally had the first of what would become a string of very profound and important realizations. And that is the game you think you're playing is money. What I promise, the game you're actually playing is brain chemistry. If I gave you $4 billion tomorrow, but inside you felt suicidal and you felt worthless, what would be the point of the money? Conversely, if I gave you $3, but you felt fulfilled and like you were contributing not only to yourself, to your family, to other people, you felt alive inside and what you're doing meant something to you and you felt that you had significance, what does the money matter? Anybody ever read the poem Richard Corey? I read this poem and I was like nine years old and it left a lasting impression on me and it was about the best looking, richest guy in town, the guys wanted to be him and the girls wanted to be with him. And the poem ends with Richard Corey going home and putting a bullet in his head. That's the human condition. How many people have you met in your life? You think they're spectacular. They're amazing. And yet they're so fundamentally unhappy that they're in the grips of depression. We're living through a mental pandemic right now. It is almost ubiquitous to know somebody who has depression and/or anxiety.

Brain Chemistry (02:26:58)

know that about yourself everything changes like people always ask me Tom you work so much when you're going to take a day off like I'll take a day off whenever I want when I've earned it I'm not conflicted I know how much I work but I didn't take a day off for six and a half years at the beginning of my journey because I didn't believe I'd earned it some part of me was guilty because I was still fighting my own mindset I wasn't always doing the things that I should be doing once you get to the point where you know


Mindset Development And Brain Chemistry

The Game of Brain Chemistry (01:13:31)

And the reason is people don't understand the game they're playing. The game you're playing is a game of brain chemistry. It's chemicals that flow through your brain. It's a mindset. Once you understand that, then you can begin to structure your life in a way that actually makes sense. This is a long-ass quote, but I'm going to read it all to you because these, once you understand this, you will understand everything you need to know about life. To those humans who are of any concern to me, I wish suffering, desolation, sickness, ill treatment, and dignities, I wish that they should not remain unfamiliar with the profound self-content, the torture of self-mistrust, the wretchedness of the vanquished. I have no pity for them because I wish them the one thing that can prove today whether one is worth anything or not. That one endures. That's life. That's the human condition. Most people think that Charles Darwin said that it's the survival of the fittest. Darwin never said that. It was said years after his death, what he did say and burned this into your nervous system. What Darwin said was, "It's not the strongest of the species that survives nor the most intelligent, but rather the most adaptive to change." The reason human beings are the apex predator is because what we are good at is change. What we are good at is taking a stressor, a stimulus, and changing our body. Look at the people around you. Look at Homie over there, Jack to the Nines. Tommy shredded. They were not born like this. I grew up in a morbidly obese family. I'm not supposed to be lean. We adapt because we force ourselves through something that is painful and we endure. What was Tommy talking about, the takeaway from Angela Duckworth's book that really stuck with him? Many people start, but few endure. It's not interesting whether or not you guys have a dream. I don't care if you have a dream. I am so uninterested in empty dreamers. I can't see straight. What I care about, do you have the fortitude to fail? What do you learn from that failure? Do you get back up? Do you keep going? Do you force yourself to recognize that this is a question of adaptation? You simply have not done to yourself what you need to do in order to be good enough to succeed. It really is that simple. Plus you accept that the thing that separates you from the rest of the animal kingdom is an unimaginable ability to become.


Private Companies Averaged 8 % Annual Growth (01:16:16)

You have an unimaginable ability to become something. In 2014, private companies averaged 8% annual growth. After I went into my partners and I said I quit and I'm going to go do something that makes me feel alive, they were totally shocked. I got all the way to my house and I was on the phone with my wife. I did it. I had been unhappy for so long. I said I did it. I told him I quit. I gave back the equity. Here I am and I'm pulling into the driveway at my house and my phone rings and it's my partners. They say come out to dinner with us. Out of respect and love, I went out to dinner with them and they said the now famous words, we could do this without you but we don't want to. That gave me what I needed to connect to something other than money. It reminded me of the brotherhood. It reminded me that I had fallen in love with these guys as human beings, that there was something more than money, that there was something more than being a clever marketer, that I remembered for a second who I am, the things that make me unique, that I have a desire to connect, that I actually enjoy communities, that I'm not a guy with a killer instinct. I'm not interested in stepping on my competitors' necks. This is not how I'm wired. I'm wired to build something. I'm wired to see people shine. I love seeing other people win. I think it's incredible. Now, that doesn't mean that I don't want to win. I want to win at the absolute highest level. I want to be the greatest of all time. I want more people to write about me going to Mars because they're terrified to try to match my intros. I want that, right? I hope each and every one of you wants to play at that level. I hope each and every one of you looks at the greatest of all time and says if I'm willing to break myself and have to get there, I could do it. But being honest with who you are, being honest that if there's something else that you want to bring to the table that you find a way to do that. And so I said, "Guys, I will come back and work with you on one condition. I will never prioritize money again." My highest value in business is camaraderie. At the time, that was sacrilege. We had made it packed with each, there was three of us. The three of us had made an actual pact that we would do whatever it took to make our technology company more profitable. And if that meant skipping a family vacation, if that meant waking up at 2 a.m. on a Saturday to meet in brainstorm, we did it. Both of those stories are real. We did things like that. I would go away with my wife for Christmas to see her family in London and I would literally take a camera with me so I could watch the company back in L.A. I would never switched off. I didn't take days off. I was working. No matter where I was, I was working. Seven days a week. I didn't take a real vacation, meaning that I wasn't actually working while we were on it for six and a half years. So if I'm going to go back to that, this is going to be in service of something that I can believe in. This is going to be something that makes me feel alive. This is going to be something that I'm passionate about. It's going to be something that I actually feel like I'm contributing to the world, that I would be willing to do all of that with a smile on my face. And I said the only question I will ever ask again in the context of business is this, what would I do and love every day, even if I was failing? If you guys can get on board with that, if we can build something from a position of wanting to bring value and not worrying about the money, then we can work together. And so they said that they felt the same way and we started this crazy protein bar company called Quest Nutrition. Someone told us that we were out of our minds. He was talking to Ben earlier about, imagine you're a 15 year old who wants to play in the NBA and all you hear all day long is, "Kid, you're never going to make it." And to have the fortitude as a teenager to push through that and believe in yourself, is what I call the arrogance of belief. I was so on fire with the notion that now I was going to do something that I believed in. Now I can think about my mom and my sister every day. My mom and my sister both morbidly obese, I knew they were going to die too soon. If I didn't do something about it, I believed it was my problem to solve. I believed there was nothing I couldn't do if I set my mind to it and armed with that, armed with the passion to know that I'm showing up every day fighting for my mom and my sister. I'm not thinking about money. I'm not going to make decisions based on profitability. I'm going to make decisions based on what is metabolically real? What is the actual answer to the question of how do you end metabolic disease? And I play a game called no bullshit, what would it take? No bullshit, what would it take to end metabolic disease? And the answer is you have to make food that people choose based on taste and it happens to be good for them. That's the only way it's going to happen on a global scale. And so that's what we set up to do. But when you're armed with the notion of I want to end metabolic disease, not I want to get rich, not I want to sell my company, I want to end metabolic disease and you let that be your driver. Now you know what your why is and we'll get to that more in a minute. By putting that mindset at the forefront from 2010 to 2013 alone, Quest grew by 57,000%. Comparative companies were growing by eight. We grew by 57,000. I'm telling you right now, saving the world, doing the right thing, thinking about your customer, wanting them to win, wanting them to shine, wanting great things for your employees. It's big fucking business. At Quest, we made more in a single day than our previous company made annually. All by putting the customer first. All by saying we're only going to do what's actually metabolically advantageous. How does it serve me to make a product that doesn't when my mission, in my opinion, was to save my mom? And I would ask myself of every decision, tough decision that we had to make, which decision actually helped save my mom? And then we would make that decision. We hit number two on the Inc 500 list. We were officially a unicorn company. We were a startup that bootstrapped, believe it or not, and made it all the way to evaluation of over a billion dollars. All right, if you guys want to have success in your life and I don't care what it is that you're trying to do, there's going to be two things that you need to do. We're going to talk about the first one now, which is develop your mindset. We'll get to the second one later, which is build your business, but we'll get to that. For now, let's just talk about your mind.


Develop Your Mindset (01:23:24)

The most important thing is your mind. Make no mistake about that. Right now, the only thing that is holding you back, I promise you, and whatever excuse you're telling yourself, it's bullshit. The only thing that's holding you back is the way that you think about yourself in the world. That's it. Flat. You have not built the mechanisms in your mind that you need to free yourself from the matrix. And boys and girls, the matrix has you.


David Foster Wallace (01:23:56)

Who knows David Foster Wallace? You all have an assignment to do. And by the way, if you don't do this, don't think for one second you actually want to be successful. Stop fucking fooling yourself and go do something easier. Because this video is like 18 minutes long, it's one of the most profound things you'll ever watch. David Foster Wallace, this is water. In the talk, what he makes clear is the fish is the last one to realize that it's in water. Think about it from a human perspective. We had to discover air. We had to discover gravity. They're so ubiquitous. You literally don't see them. You take them for granted as just being there. And that's how people take their belief system. Right now, you think you're capable of certain things and incapable of others. And that is your water. And until you can identify it, until you can see that you're telling yourself lies and they are disempowering lies by the way, because I am not some grand fan of the truth. I'm a grand fan of doing and believing that which moves you towards your goals. Do and believe that which moves you towards your goals. That's it. Once you put that belief at the core of your being, you will be amazed at what you're able to accomplish. When I say take the red pill, what I'm talking about is waking up to the way the world really is. The amount of potential that you have, I always say is nearly unlimited. But I only say that so I don't have to get into stupid arguments with people about throwing absolutely ridiculous things out just to try to defeat the notion. And that's somebody who wants me to be wrong.


Belief (01:25:45)

But ask yourselves right now, if my message is you can do anything you set your mind to without limitation, don't you hope I'm right? And even if I'm wrong, how much farther will you go simply because you were willing to believe? Humans lead with belief. Humans lead with belief. You won't take the first step down any path unless you believe you can actually get where you're going. And this is where people get stuck in the matrix. You don't push yourself hard enough. You don't make big enough demands. You think small. You dream small. You make small demands of yourself. If you want to see what big demands look like, look at David Goggins. You know David Goggins? For those of you who don't, let me tell you a quick story. David Goggins is a Navy SEAL. He wanted to honor fallen SEALs. To do that, he wanted to pick the hardest thing that he could think of. It was a 135 mile race. The person who put on the race said, "You can't answer my race unless you run 100 miles in a 24 hour period. Have you?" The answer was no. He said, "There's one four days from now. If you can complete four days, you'll wait 250 pounds." If four days, if you can complete 100 mile race literally running around a high school track, think about how torturous that would be. If you can complete 100 miles in 24 hours, then you get to run my race and raise the funds for your charity. So David decides he's going to run that race. He wasn't prepared. He was overweight. By mile 70, he had broken both of his feet. He had shin splints. His calf muscles were beginning to tear off the bone. He sat into a chair because he literally had nothing left to give. He urinated on himself blood because he couldn't move. He couldn't get up to go to the restroom, so he defecated on himself. As he's sitting there in the chair, peeing blood in total agony with feces on his back. The only question he had was, "What do I need to do to finish the remaining 30 miles?" So he taped his feet so that they would go numb and he would stop feeling the pain of the broken feet. He ate something so that he would have the needed energy to keep going. He got up and he started walking. He walked for, I don't remember how many miles, and his wife said, "At this pace, you're not going to finish." He ran the remaining 19 miles, broken feet, stress fractures, in his shins, blood, excrement, and he finished on time. That's what a human being is capable of. That's what a human being is capable of. We limit ourselves, and it's only us. There's nobody else that's doing it to you. You've chosen to adopt those beliefs. Once you've pushed yourself outside of that comfort zone, what becomes possible is absolutely miraculous. Now, I choose to believe that my potential is limitless, and because of that, I've gone from scrounging in my couch cushions to find enough change to put gas in my car. That is a true story to building a billion dollar business. All right. How do you do it? If this is about building your mindset, how? To me, it's about mind the gap. There is a gap between who you are now and who you need to become, and that gap is a gap of skill set, plain and simple.


Skillset (01:29:18)

Remember, you're an adaptation machine. Your job is to place yourself under stress and then force yourself to grow. So back to Mr. Yoked, you don't get those muscles by looking at the weights. You get those muscles by going under the weight and not stopping when it hurts. You stop when you can no longer recruit the muscles enough to move the weight. That's when you're done. And when you're able to do that, what you're actually doing is tearing down the muscle fiber. And a lot of people, when they begin working out, they don't realize that's actually the name of the game. The name of the game is to break the muscle down, and then the body comes and builds it back up. The conscious part is tearing it down. Your job is to put yourself in stressful situations. Your job is to push yourself to the limit of what you think you're capable of and then go past that. And when you're able to push yourself past that, when you're able to get into the goggins reps, as I call it, when you're able to exist in that zone, long past where it started hurting, long past when it got boring, long past when you were terrified that you'd never be able to do it. That's when you'll begin to adapt because you're telling your body, adapt or die. That's how you're going to get where you want to go.


Path Of Self-Improvement

Path One (01:30:37)

Now I love the movie The Matrix, as was made very clear in the intro. The real question is what is your kung fu? You've got to figure that out. This is a path to execution we're talking about right now. Path one is about the mindset. So what is your kung fu? My kung fu is business. I knew that I was going to have to learn business in order to control the resources, in order to control my art. This is how you're going to develop your kung fu. One, always be reading. The most important mathematical formula you will ever encounter is right there. I, I equals I/O. It stands for ideas in, equal ideas out. If you want to solve a problem in your business that's become particularly tricky, you need to be taking in a ton of data so that your unique mind, your unique worldview, your unique life, having grown up the way that you grew up, the way that your brain is wired, all of it. You will come up with ideas that nobody else is going to come up with. But you first have to be getting that stimulus. Now I doubt I have to over-preach that one to a bunch of people that have come to a conference like this. These are literally the kinds of ideas you want to be encountering. Two, open yourself up to being changed. I can't tell you how many times I've recommended people. My list of books, which by the way you can find on impacttheory.com, Tom's reading list, is a 25 books any human being that wants to excel should read in order. And before every book say a little prayer and the prayer goes like this, I am open to being changed fundamentally and for the better by this book. I am open to being changed fundamentally and for the better from this book.


Check Your Ego (01:32:27)

You've got to go into the book wanting it to be right. You've got to go into the book hoping that it gives you some piece of knowledge. Remember everyone, everyone is your superior in some way. And once you learn to check your ego, sit at their feet with absolute humility and be open to their ideas, especially the one that contradicts what you believe today, then you'll get somewhere. And I've got some really amazing news for you guys. Your current skill set has already taken you as far as it's going to take you. If you don't put yourself on a path to learn and very aggressively where you are now is where you'll be in five years. The key is crossing that chasm of skill set. All right, realize what you believe is a choice. This is something that's really hard for people because they think some things are objectively true and other things are not. And that's simply a lie. And that's why the matrix is the perfect metaphor. Think about this for a second. Your brain is locked in total darkness. It never sees light. Your brain is locked in total silence. It never hears sounds. What your brain does is take stimulus, the agitation of the air, and it transmits it into chemical electrical signals. It does the same with photons falling on your eye. But ultimately, this thing that you're experiencing, the distance that you feel from me, it's all happening in your mind. There's actually two dime-sized blank spots in your field of vision where the optic nerve connects to the eye and yet you don't experience it. It's right in the center. So why don't you experience it? Because your brain is insanely good at guessing what should be there and filling it in. That's when I realized my brain is lying to me. Now, it may have all the best intentions in the world, but make no mistake, your brain is making shit up and is making up a lot of shit. And so you've got to choose what to believe. Who here has a negative voice in their head that tells them to be careful, be safe, you probably can't do it, this is all going to go wrong. Now do you believe that voice to be objectively true? Okay, so that voice is lying to you as well.


Analyze Your Thoughts (01:34:59)

Now it has great intentions. It's trying to make sure you don't get eaten by a lion in the bush. That doesn't happen a lot in modern society. So maybe a little less useful in today's day and age. And then the really protective one is trying to make sure you don't get ostracized by the group, which in years past would have meant certain death. But now you don't need the group. You can survive just fine. There's a grocery store around every corner. You can get shelter of some kind. It may be lonely as hell, but the chances of you dying from being ostracized are virtually zero. So you've got outdated software, outdated algorithms running in your mind. Your job is to develop what I call an overwatch mechanism. The overwatch is the emotionally sober part of you that distrusts every signal and impulse that your brain gives you. And once you can get over that, in fact there's a great quote from Da Vinci, the greatest form of control is control over one's self. So the reason I love Star Wars is because it's all about mind control, but not mind control over other people. Don't worry about that. Mind control over yourself. Being able to tell yourself these are not the droids you're looking for. That's when this gets really powerful. All right, so believe is a choice. We're going to talk about that more.


Be an eternal student (01:36:18)

Be an eternal student. We've talked about that. And last one, become anti-fragile. All right, we're going to go really deep on anti-fragile, so I won't belabor the point and develop grit. All right, how do you become anti-fragile? This is probably one of the most important things you guys need to learn. Becoming anti-fragile was literally the thing that changed my life. And I remember the day that it happened. I had just started working for my two partners. They were very smart, clearly much smarter than I. And I had built myself a steam around being smart and being right. And now all of a sudden, I found myself with these two incredible minds that could process data more rapidly than I can. So I'm not going to place a value judgment. I'm not going to get into an argument about how valuable IQ is. I will just say that a high IQ, in my opinion, means that you're processing raw data faster than somebody else. So you can run through the list of possible scenarios, for instance, that could be very helpful going into any negotiation. You just thought through all the possible permutations.


Why self-esteem matters (01:37:15)

So they made me feel badly about myself. So as you can imagine, I didn't always want to be around them. And the times that I was around them, I wanted to find some way to be right. And so we were arguing about something, a way to do something in the business. And I had an idea. And then they threw out another idea. I recognized immediately that their idea was better. And yet I kept arguing for mine. Ever come across somebody who does that? I promise what's happening in that moment is they're feeling insecure. You've triggered their insecurities. And now they're going to fight for it because it's theirs. Because if they can at least win that argument, while they may not feel smart, they may get reflected back to them that they were smarter than you in that moment they can convince you of something. So I had this moment of crisis because I actually convinced them. And I convinced them that my way was right, even though there was a voice in my head screaming, "It's wrong, dumbass. You know it's wrong. What are you doing?" It was insane. I was literally heading in this collision and I couldn't stop myself. So at the end of it, I asked myself, "What do I really want?" Because I tell people I want to get rich. But my actions say I want to feel good about myself. And I had a moment of crisis because I realized I need to feel good about myself. Everybody needs self-esteem. In fact, what suicide is is when somebody no longer believes they'll ever feel good about themselves ever again. And if that were true, it's not. But if that were true, suicide's actually a reasonable option. Why would you want to go on living if every day you're miserable and there really is no way out of that? So I knew I couldn't give up my self-esteem. I couldn't accept some weird role where I just was always the dumbass sitting in the corner. Right? So in that moment, I realized if I'm actually going to move towards my goals, I've got to pick something to build my self-esteem around that's anti-fragile. Now this is a term that comes from the Seam Taleb in his book by the same name. And in the book, he points out something that is resilient, something that is strong, something that endures. They are all defined ultimately by their breaking point. They still break.


ANTIFRAGILE (01:39:33)

They can just take a lot more abuse before they break. Anti-fragile on the other hand is something that the more you attack it, the stronger it becomes. So think of it this way. If I pride myself on being smart and you tell me I'm dumb and you put up a pretty good case for it, that's going to damage my self-esteem. My self-esteem in that situation is very fragile. If on the other hand, you tell me that I'm dumb and I build my self-esteem around being the learner, now I'm going to say thank you. Please tell me in what way that I'm dumb because you will open my eyes to something that now I can address and I can go learn about that thing. And I will have a new skill and I can go out and push and execute against that skill. That's anti-fragile. The more you try to tell me I'm dumb, the more areas that you point out that I'm weak, the more things you tell me I need to learn about. My eyes are open to something that if true, I'm going to go down that path and I'm going to learn how to do that. And that is absolutely critical. All right. Identifying as smart as a deadly trap as is the notion of being right.


Admitting Mistakes And Developing Passion

BECOME THE PERSON THAT ADMITS THAT THEY'RE WRONG (01:40:40)

One of the most powerful things that you could do is become the person that admits that you're wrong really fast and it's crazy how much credibility you will earn with people simply by admitting I was wrong. Like 30 seconds ago I was fighting so hard for something. I was really fighting for my position and then somebody says something and I realize that's actually better. Imagine that. You're in the meeting, you're going die hard because you believe it and you should stand up for what you believe and you should fight for it. But when you find somebody that when they act because they actually listen and they hear holy shit like that's actually a better idea and they say it in real time and not just say it but like oh my god that's a great idea. I'm totally amped. I'm on that. Now I'm going to be the energy for that idea. It was crazy. When I started doing that people would actually come to me with their great ideas because they knew if it was right I would get so enthusiastic about it. I would give them all the credit because I did not pride myself on owning the idea. I prided myself on recognizing the idea. And so people would keep coming to me with these great ideas because they wanted me to be the energy. And so even though all I would do is try and point out whose idea it really was in like every breath that I mentioned the idea talking about the person who actually came up with it I would get credit for it because I was the one actually moving it forward because at the end of the day only execution matters. You can build an amazing reputation for yourself and one of the best ways that this plays out is that time when you hold steadfast and you refuse to bend people know you're not doing it just to argue for your own idea because you've shown a thousand times as soon as somebody gives you a compelling idea that you think is better you move on it and that there's no ego in it. All right how do you develop grit? If grit is as important as we say it is sustained interest over time that's really what grit is. And a lot of people talk about in fact the title of my speech is supposed to be about how you develop a passion which we will talk about in a little bit but this is going to be one of those things. When you have passion one of the things that comes out of that is you've got the ability to sustain your interest over time do the hard things do the hard things I can't emphasize that one enough put yourself in uncomfortable situations just to find the mental tactics that you're going to need to deal with the hard things it's getting those tactics who knows the Stanford Marshmallow Test.


HOW TO DEVELOP A PASSION (01:42:49)

All right for those of you that don't this is one of the most breathtaking examples of the human condition. In the Stanford Marshmallow Test they bring in I don't know they're five or six years old. They bring them in and the person in the white lab coach says here's a marshmallow I'm going to go out of the room for a minute I'll be back in just a few minutes if you wait till I come back I'll give you a second marshmallow so essentially double your money. Not bad. Now what the kid doesn't know is the researchers never coming back and all they want to know is how long will you wait before you eat the marshmallow. Some kids have literally gobbled it up before they even get to the door. Other kids are like singing to themselves putting their head down getting up dancing around the room some of them bite like the underside and try to put it back so you can't see. And here's what's scary.


THE STANFORD MARSHMALLOW TEST (01:44:07)

They follow those kids for twenty five years and based solely on the length of time they were able to wait before they ate the marshmallow predicted their level of success in school predicted their level of success in the job market the people who waited the longest got into the best schools got the best grades went on to have the highest paying jobs. Just your ability to delay gratification. Your ability to find tactics that work to get your mind off something. There's no greater control than control over one's self. Anybody here ever done a three day water only fast not intermittent fasting three days do it you will learn something about yourself and it will be profound and what you're going to learn is that your body is manipulative and I did a three day fast just a couple of weeks ago and I had the flu right before so there were cough drops laying around and every time I walked by those fucking cough drops my brain was like eat one. I was like mother fucker like you know I'm fasting and I literally couldn't believe like how consistently every time I walked by those damn cough drops that my body like gave me this really intense impulse and that's when I realized like the notion that there are multiple voices in your head by the way is very very real and I'll give you one quick example who knows what the corpus callosum is. The corpus callosum is a thick bit of tissue that connects the left and right hemisphere of your brain if you sever that you will get people that have literal multiple personalities one in the right one in the left some of the most intriguing stuff is one of them will be devoutly religious and the other will be devoutly atheist in the same brain and you can talk to them differently absolutely crazy but the multiple voices notion is real there are multiple factions if you will pieces that your brain is broken up into and by the way you have


WHAT IS THE CORPUS CALLOSUM (01:45:48)

the equivalent of a cat's brain in neurons just in your digestive tract so the whole notion of gut instinct think of all the cool shit cats can do and you've got that in your digestive tract neurons it's literally the same material that your brain is made out of is in your digestive tract utterly fascinating so we have all these competing things that we want but inside if you think of that overwatch that one person that's you that's meant to say I have goals and I'm going to act in accordance with my goals I'm never going to sell out what I want most


KOPTA ANECDOTE (01:46:50)

for what I want right now I wanted a koftra right now but I wanted to get on the other side of the three day fast and say I did it and I wanted that more and in learning what your tools and tactics are so for me I welcome hunger like an old friend and I literally people must think I'm schizophrenic because you'll walk into the room and I'll literally be like pinching and poking at my fat going hunger thank you I'm so glad you made it back it is so good to see you I'm glad you're here I know that you're oxidizing my fat I'm very grateful for that so thank you and in doing that I reframe it not as something that is unwanted or painful but as something that is doing exactly what I want it to do and learning those mental tactics that's the game learning those mental tactics that's the game that's how you're going to get good at whatever it is you want to do if you want to start a business learning how to deal with your employees is absolutely critical but let me tell you right now if you lash out emotionally your employees will lose respect for you but it's just like the koftra moment now if somebody had seen me walk by the koftra they wouldn't know that I had it literally had to stop myself from lunging at a koftra they didn't know that because I have control of myself I've practiced things like that I do three day fast I do what I call bright lines so I have a bright line during the week I don't eat my second meal before 1130 under any circumstance my wife one time brought my food 30 minutes early I was preparing for an episode it was so sweet of her but I don't eat before 1130 under any circumstance so the food literally sat on my lap smelling so good and I was so hungry and I said hunger thank you so much for showing up because you're giving me the opportunity to prove to myself what a badass I am because I'm going to smell how delicious you are knowing my stomach is grumbling and tying itself in knots because I want to eat so badly and I'm not going to and in those moments you earn credibility with yourself I hate working out absolutely despise it it's why I do it first thing in the


BRIGHTLINES (01:48:59)

morning and the reason I hate it the weights are heavy and your muscles start burning when you get into the supposed good reps so that just seems shitty and backwards so it is not in any way shape or form fun for me but I earn credibility with myself because it is something that I don't like I earn credibility with myself showing up every day and it also reminds me how much I can transform my body it's very easy for me to show you my before and after picture I used to be 60 pounds heavier it's very easy for me to show you when I was heavy and then show you six pack abs you get it but what you don't see is the body is just a reflection of the mind what really happened was I changed my mind and I had garnered skills I had garnered tactics the things that allowed me to not eat the coffee drop were the things that allowed me to not eat the things that I wanted to not have a bowl of ice cream to not indulge in things that are wonderfully delicious but instead ask myself what are my goals


Passion, Hard Work And The Role Of Social Media

BOREDOM (01:50:15)

and then back in with my behaviors all right the thing about grit that I really want to highlight is boredom boredom is the thing that I think kills most entrepreneurs it's not lack of funding it's that 90% of the things you're going to do suck they're tedious I actually had to get in a fight with the IRS to get my EIN number for my most recent company that shit was boring like I can I was flying into a rage because it was wasting so much my time I literally had to get an advocacy group to help me go through the process that's how painful this was and I literally I remember stopping and telling my team this is where entrepreneurs fail right here like it is so tempting just be like peace everybody go home I'm not dealing with this shit anymore I'm gonna go get a job like that would be so much easier let somebody else deal with this it's the boredom that erodes people and to get through the boredom you have to know what it is that you want when you know what you want then you're gonna have the energy to get through now to have that energy you're gonna need passion the number one question I get asked the number one question I get asked this question multiple times a day every day from all around the world I've had people in Australia UK Germany Netherlands Brazil Paraguay I mean literally everywhere they all want to know how do I find my passion asking how you find your passion makes the assumption that your passion has been lost somewhere your passion has not been lost your passion has never been developed passions are created they're constructed they're developed and it starts with interest you want to identify an area of interest so if


INTEREST (01:52:16)

you've ever wondered like oh man that person is so lucky like how do they get lucky to find their passion so early and now they get to do it and live like this amazing life and you're searching inside your mind for that thing that's gonna be like a lightning rod that's hidden under like a lampshade somewhere in your mind and you're like there it is I finally found it but it doesn't work like that it starts with these areas of interest and if it's something that you're trying to turn into something that you can monetize it starts with ideally overlapping areas of interest so you've got multiple interest coalescing and it coalesces with can money be made here but even that is not enough now once you have that you've got to start going deep into gaining mastery and it's in the process of gaining mastery that you're gonna find out if that interest turns into a love then turns into a passion people who are passionate are willing to fight through the boredom think about a musician if you want to become the greatest musician of all time let me tell you how many hours literally days, weeks, months, years of


MUSICIAN (01:53:15)

your life will be dedicated to playing a scale all day, every day, the fundamentals, blocking and tackling and what makes people great and I know Ben will back me up on this one what makes the greatest basketball players they walk out onto the court at 4 a.m. and they say I'm not leaving until I've made 2000 shots from the perimeter simple period it is what it is they put in the work now they're not doing it thinking oh my god this is so much fun they're thinking I want to win I want to play at the highest level and I am willing to break myself in half and this is the thing that I cannot get entrepreneurs to understand if you want to be great I promise you as Tommy said you already have in you what you need which is the ultimate evolution approved ability to adapt so you can change to get great you can change to become whatever you need to and if you're leveraging an earlier win so much the better if it's something that you have that little spark of early talent and now you're just putting the work on top of that fantastic but it is the people that are willing to literally break themselves in half to get the result that they want research Michael Jordan the absolute symbol of being the greatest his work ethic is way more impressive than what he did on the court if you haven't read Tim Grover's book relentless read it and what he talks about Michael Jordan has darkness in him and if you've ever watched his induction into the Hall of Fame speech he's lays that shit out Michael Jordan's a dark motherfucker but as Star Wars taught us there's power on the dark side and understanding how to leverage that but what I want you guys to understand is intensity is required putting in the work is required and doing more work than anybody else is required for greatness there are three things that you can do work hard work smart and work long hours most people get real weird when I say they should work long hours but Tom if I'm working hard and smart why should I work long hours I'll tell you why because I'm also working hard and smart and I'm working long hours on top of it so I will beat you every time right because I'm willing to do all


WORK YOUR ASS OFF (01:55:48)

three but why am I willing to do all three because I believe in what I'm doing I know why I'm doing it it isn't about the money it's about knowing where you're trying to get to and this is how you build your business we live in a very very new world that new world has been defined by social media for anybody that in the last year has spoken ill of social media get rid of that matrix style belief immediately it is the greatest revolution in business ever it is the reason that you're going to be able to build a business without gatekeepers being able to tell you yes or no social media has completely democratized access to consumers think about that for a second back in the day you had to pay for radio ads or you had to be on TV that was it those are your options and it was so expensive and that's exactly how the big companies wanted it because they could keep you out so you may have a superior product but the world's never going to know because they have a way to ice you out that is gone like really think about that and I'm seeing some young faces in the crowd you may not realize it didn't used to exist it didn't used to exist you to get to a mass audience you had to pay hundreds of thousands millions of dollars potentially to reach those people and they made you buy in bulk it's not like you could do one commercial and see what happens they made you buy in bulk they made you commit to big dollars now and not anymore not only that when I was growing up commercials had to be high quality now you can film shit with your iPhone be like what's up girl and you can sell product doing it Michelle fan you guys know who that is built a multi hundred million dollar empire by doing vlogging with her phone on YouTube the world has changed and thank god it really puts the power in your hands but you have to understand exactly what kind of company it's making room for in a hyper connected social world everything is different and the reason that quest grew as fast as it did besides us having Yemeni you guys will get a hear speak tomorrow the reason that we grew as fast as we did was because we understood


The Impact of Social Media (01:58:06)

social media before anybody else in 2009 when everyone was saying that Facebook is just a distraction how's it ever going to be good for business and we were preparing to launch our company we realized that it was a megaphone and it gave people the opportunity to comment on your company within minutes of an interaction with you to a global audience and if we put value creation at the center of our company then we had an opportunity to get you to say something powerful and so we said we'll never ask you to say anything in particular if you love it say you love it if you hate it say you hate it but please just say something and then our job is to make sure we do the really hard work of making sure that that product kicks ass that it is actually delivering results that for people that are trying to lose fat that they're going to lose it and they're going to be excited that it's delicious but understanding that generation millennials and generation Z they want impact they have an inherent distrust of companies so right now and let me tell you because I've been through this what's going to happen first you start as the undiscovered band and the first people that find you they love you like no other you can do no wrong they'll follow you like in the van on tour they'll stay at the same dirty filthy motels you stay at just to support your product then you start getting big and everybody's like yeah I discovered them first I knew these guys before anybody else and then you get really big and you're a fucking sellout and now I don't want to hear your music that shit's played out I'm on


Transparency in Business (02:00:23)

to the next looking for the small guy because what you failed to take into account is they want to know what kind of impact they're going to have by using your product sometimes that's the product itself quest having the mission to end metabolic disease really got people to understand what we were about as human beings the fact that we were investing millions of dollars of our own money into cancer research because we believe that it may be a metabolic disease that let people know who we are who we are as people me starting to do a show and stepping out front and coming and giving talks like this so people can look me in my eye and ask me questions which by the way every time I do a talk I will stay and answer questions until there are no more questions to answer I've done it for eight hours straight before so at the end of this talk even if they kick us out we'll do it out in the parking lot whatever it takes I will answer every single question that you have that's the world that we live in when you're a servant to your customer when you understand that that's the level of obligation that you have if you want to build a real community that's the new way of doing business and I now get people that write to me every day saying that I've changed their life imagine building a company and having people write you from all over the world that you changed their life that their life is fundamentally different and better because of you and your products it's an unreal time that we live in that you can get that kind of feedback and interaction all right who knows Simon Seneck who yeah all right Simon Seneck wrote a book called start with why this is one of the most important things if you're looking to build a business I promise you and this is it'll happen tonight even though I'm going to say it right now I know it's going to happen tonight one of you is going to come to me and you're going to start describing your product you're going to ask me how you should market it and all you're going to describe to me are features and benefits and I'm going to say no no no what's your mission and you're going to say we want to make computers faster that's not a mission that's a feature and benefit what's your mission we want to empower entrepreneurs with faster cheaper computers so that even low income entrepreneurs can launch companies okay helping low income entrepreneurs launch companies that's a mission the faster computer thing is a path and understanding the difference between a path and a mission is critical I'll give you an example the mission at Quest is the end metabolic disease what if we found that food is totally irrelevant to that what would we do well our mission wasn't to make protein bars our mission was the end metabolic disease so we would change as we got deeper and deeper into cancer it looked like this whole high protein thing may actually be really dangerous in a cancer environment you may have to go high fat and so even though everybody considered us the high protein low carb company we started investing massively into high fat everybody thought it was crazy what's going on what are you doing but we were looking at the data we were looking at what just metabolic truth was showing us so don't ever be married to a path but be deeply convicted about your mission and choose your mission carefully it needs to be real and needs to be something that sits at the heart of who you are there's an awesome quote often attributed to Mother Teresa no one will act for the many but people will act for the one I showed up every day thinking about my mom and my sister they were very real to me there are people that I know that I love that I see frequently that I will be mortified to my core if they were to die so it's very personal it was very easy to fight and push because when you know why you're doing what you're doing when you have your mission and you are hell bent to make that come true when things get boring when things get tiring you're still going to do it and when you have that thing you're able to take advantage of one of the king makers transparency there are two new king makers we're going to talk about both of them the first one is transparency social media allows you not only to reach people but it allows you to reach them in a super transparent way where you can tell them who you are what you're about what your mission is and let them see your company from multiple angles and see if you actually hold to what you say you were about and don't get me wrong in some ways it's actually harder to build a business now because there's no corporate veil right if you've got a billion dollars to start a company you were way better off before with so much easier oh you could just hide things and lie and tell people what they want to hear and put out marketing messages anybody the cigarette industry I mean it's unbelievable how well it worked and for how long it worked those days are over I promise you the bullet has already been fired that's going to kill the old way of doing business they are bleeding to death and they just don't realize it yet now you're going to have to be transparent now you're going to have to tell people what you stand for and the thing you stand for better be the creation of value don't think about profits focus on value the reason you want to focus on value is it's the only thing that you can sell sustainably you can trick people with clever marketing don't get me wrong but it's always going to be short term the only thing that last is something that actually adds real tangible value to somebody's life when people write in and say dear quest I've lost 150 pounds using your products you've changed my life my wedding day which I never thought would come is now just two months away I couldn't be more excited here's a picture of me and my fiance we would get stuff like that all the time because we were focused on making a product that was actually real finding your passion for something and building a product that's better than what anyone else is doing alright leverage technology to connect people get really lost like I'm not a digital native I didn't grow up with this stuff but once I understood what it was really allowing me to do in fact many of you came up and you saw me sitting out there and it looked like I was working on my phone but what I was actually doing is engaging with my community because if you ever get a response from me it's actually me so you can imagine I'm writing and replying to


Building A Community And Branding Strategies

Build a Community (02:06:35)

people a lot but I do that because the technology is meant to facilitate that connection once you understand the building the community is the thing that gives you power and I'll give you an example at quest we had a decision to make do we go to retail first which are known as the traditional king makers a retailer can make a brand if you get into Walmart you can go from nothing to a hundred million in like 12 months same with Costco they can pluck you from obscurity and make you a big brand almost overnight so do we do that first or do we go direct to consumer we decided to go direct to consumer because we wanted to build a community we wanted the power on our side we wanted customers going into retailers and saying why don't you carry quest so we said no to retailers for a year in fact we ended up hiring somebody just to say no to the retailers in a nicer way true story because we didn't want to burn that bridge but the contracts they were sending us were so one sided so aggressive in the favor of the retailer that we never would have been able to be profitable and that's how Walmart puts companies out of business that have been around for a hundred and fifteen years they're squeezing your margins so tight they become so much of your business that one misstep in like the cost of lids or something which is what I think killed what was it last pickle or something they've been around for over a hundred years gone so you have to have the power going into the negotiation and you're living in a time where you can build a community that believe passionately in you and your product and you can mobilize them to go in stores and start asking for the product you can even do it region by region think about that for a second hey we want to right now today guys it's going to be phoenix we want everyone going into whatever use whatever store you would sell into we want people going into the phoenix area going into the store and asking for this product and they'll do it it's absolutely crazy to get nothing for it other than the pride of being in that community because you've done something positive you sold them something of value that's touching their life it's making their life better you're transparent you're stepping out front they know who you are they'd recognize you they feel like they've looked you in their eye and you do things to go above and beyond for them alright this is the face of authenticity my friends this is actually an instagram post that my wife and I posted every year we go sit on Santa's lap and I thought hey we really do it it's really a thing for us so share it with the community and it's stuff like that is embarrassing that it is it's stuff like that the less the community feel like they know you and in today's world you need somebody in your company that people will warm to that they will feel connected with because what's going to keep people from losing faith in your company as you get bigger is feeling connected to a person companies aren't nameless faceless organizations and you don't want them to feel like it our customer support department had their own instagram just so people could see the people that they were talking to I don't market build a community that's critical how do you build a community it goes like this


Identify Thought Leaders (02:10:16)

at the top there are thought leaders thought leaders are the people that when you hear them talk you don't understand what they're talking about neuroscientists all the people that are publishing papers doing if they've ever done an abstract then they are very much a thought leader influencers in the middle that's who is listening to the thought leaders they understand what they're saying but they have a way of making it accessible to the masses the masses ultimately are who you're trying to sell to but if you're going to find the people that you need to find you're going to get to them through influencers they're called influencers because a lot of people listen to them your job is to get a thousand screaming fans the way that you do that is by partnering up with influencers who already have the trust of those people now when most people think of influencers they think of people like this but really you should be thinking of people like this and I'm guessing most of you don't even know who they are but I'll give you one random example this woman here Jenna Marbles anybody know Jenna Marbles all right Jenna Marbles has a reach of over 20 million followers a day a day that's a prime time TV numbers one person can reach 20 million people a day now how do you get social influencers how do you create momentum with them so first of all you need to identify them you need to add value to them in their community and you need to go above and beyond so Jenna Marbles is somebody that we actually worked with and how did we get Jenna Marbles to post a photo of huge stacks of our barbs we sent her knitted sweaters for her dogs and she loved it because she felt like we understood that her that we've gone above and beyond she felt a sense of obligation to post that photo because she was so touched by what we had done and we did the research to find out what she really cares about she loves her dogs always talking about how they're cold because they're so skinny and they don't have fur and so we knit them sweaters she loved it and then staged that whole photo for us took the picture which was huge for us because it reached such a huge audience and you do that and start turning those relationships into partnerships and beginning to work with them Cassie Ho anybody know Cassie Ho so Cassie Ho was one of the first influencers that we started working with she has a total social following somewhere in the neighborhood of 5 million people just absolutely massive and getting her coming in and first it was just a paid relationship but then as she got to know us and know everybody at the company we actually turned that into an ongoing relationship where we've teamed up and partnered now to the point where my wife and co-founder and impact theory is actually creating a podcast with her and just goes to show that when it's authentic real connections that you really can transcend the normal sort of day to day sterile nature of a business relationship and not being afraid to recognize that the times really have changed following some of your vendors on their social feeds and getting to know them can be a really interesting way to spark interesting conversations to feel more invested in them as people and I can't stress that one enough and then at the end of the day if you're using social media you've got to publish you've got to be creating


Publish (02:13:22)

content who here has a Instagram account for your work Instagram account Facebook all of that okay the only thing I will tell you that you're doing wrong and I don't even have to look at your account you don't publish enough the consistency of publishing is what it's all about every time I do an Instagram story I get 30 inbound requests on my feed just got to be putting it out there now it's got to be value add but you want to be publishing publishing publishing all right how do you grow your community so now you have them how


F-B and I-Stories (02:14:23)

you're going to breathe life into them and really get them to go somewhere you've got to be where your customers and fans are I routinely get asked Tom which platform should I address and the answer is wherever your customers are if they're on all of them you need to be on all of them and I know that that means it's a lot more work and it's redundant and yes Snapchat and Instagram stories are basically the same and maybe Snapchat is going away maybe it's not but if your fans and customers are there then that's where you need to be and by the way this stuff is going to turn over every two years it's going to be constantly on the move constantly different maybe Twitter pulls it off and they race back to the top maybe Facebook makes a misstep and they've gone too heavy in the video and something else comes up you've got to be there and as much as you can be an early adopter so much the better because it's always the early adopters that win so keeping your eye on where the technology is going is absolutely critical all right be true to the platform every platform is different I'll give you one just quick example even within a platform how different it can be so first of all do Facebook versus Instagram on Facebook if I'm going to do live content I do live content with three cameras on a beautiful set and we switch between the different cameras so that the live feed feels like a live television show when we do that on Facebook we get huge numbers if on Facebook I were just putting the camera phone on a tripod and talking to the camera my numbers will plummet but on Instagram if I just grab the phone and hold it right in front of my face and talk to all the people coming through in the feed hey Bob hey Sally so good to see you oh my god hey what's up everybody oh we've got Denmark in the house do that kind of stuff my numbers just keep going up up up so understanding what each platform is looking for how they want to be talked to how they want to interact with you Twitter right one-on-one communication rapid real-time news based now Instagram even within the platform there are different ways you want to interact so I'm very formal for the most part in my main posts but my stories are playful and a little bit more intimate look into my life and they perform well like that if I take something that feels right on a story and I put it in my main feed it won't perform well if I put something overly formal in my story then it doesn't perform well and this comes from publish a lot pay attention look at the data you've got to be really really data driven all right and boost what works so once you find what's working then you want to put some ad dollars behind it okay and ad dollars gets very tricky you don't have to throw a lot of money at something to get a big result because what you're going to do is do a bunch of free stuff and look at what pops and when something pops and it's outperforming all your other stuff which both Facebook and Instagram will tell you this is performing better than 95% of your other posts well that's probably a good candidate to put some money behind also partnering up with other people in your space to do crossovers or trade shout outs things like that all right what if I told you your customers hate your content hopefully you will believe me because chances are that they do because what most people are trying to do with their contents are trying to sell don't try to sell with your content try to add value your content in and of itself should be a value add so a quest a lot of what we do is cooking cooking with the product sometimes not cooking with the product but really trying to think what is the consumer want what would be value add for them what are they looking for and those are the things that are going to allow you to continue to build that community out high value content it's all about value add you're living in the era of value creation so not only does your product have to be amazing but your actual marketing in and of itself can't feel like a commercial it's got to be true to the brand it's got to be true to the brand ethos but it has to be in and of itself interesting and valuable so rethinking that moving away from traditional features and benefits by this all right I mentioned this earlier only value is sustainable the only thing that you're going to be able to sell over time is that so you guys need to be having meetings in your company talking about value what is the value of this add what is the value of this marketing what is the value of this product you have to know why that thing is valuable that is absolutely critical and execute at the end of the day only execution matters you all have a dream that's why you're here there's something that you want to do there's something that you want to create but at the end of the day the only thing that matters is your ability to execute so get really good at that crossing that chasm of skill set and I can't say that enough the only thing that stands between you and executing on your dreams at the highest level is skill set it's getting good at something all right have very clear goals it always freaks me out most people stop at the first sort of vague notion of what they want to do I'm going to punch myself in the mouth if somebody comes up to me again and says I want to help people that's rad that comes from a


Be True to the Platform (02:19:40)

beautiful place like I totally get it but that's like coming to me and saying I want to win an Olympic gold medal awesome winter or summer summer fantastic swimming or tennis swimming excellent backstroke freestyle like at some point it's got to get so specific because you have to know what skills you need to acquire you have to work backwards from the goal and the goal has to be hyper specific so if boredom is the number one killer of entrepreneurs that they're not able to make it through the next one is they don't have clear goals and the worst part is they think they do that's the part that terrifies me the worst part is they think they do and tell you know exactly what your mission is and exactly what your business model is and what problem you solve what very concrete problem that people are freaking out to have solved until you do that you don't have the necessary ingredients to build your business I don't be romantic be pragmatic look at the data the data will tell you what to kill the data will tell you what's working and what's not this was the single best piece of advice that was ever given to me and I ignored it for three years I'm so embarrassed by that that I always make sure any talk I give people hear this no more about your product service industry whatever than anyone else than anyone else do you guys have ever seen my interview show the reason that it's doing as well as it's doing is I know more about the guest one guest actually said this I know more about the guest than their mother I just put a more work than their mother that's the truth I go out and I research and I read everything and I watch every video that I can and so I know so much about that person I know I'm going to give a different interview than anyone has ever given before because nobody's done that level of research not only does it blow the guest away and totally endear them to me but it gets us to the point where we can give an interview that has unique value so no more about what you're doing than anyone else in the world and grind baby grind for two years for two years that's what I look like every day hair net lab coat gloves put in the fucking work put in the work and this is where the rubber meets the road this is where you're really going to separate the people that are entrepreneurs from the people that are real entrepreneurs you've got to want to grind you've got to learn to love that you've got to learn to love to put in the work to be proud of yourself that you showed up and put in the work to be proud of yourself that you taught yourself how to suffer to be proud of yourself that you're developing a mindset where you believe I can do anything I set my mind to and by the way once you believe that you can do anything you set your mind to without limitation how you spend your time becomes a spiritual consideration how you spend your time becomes a spiritual consideration because you could be doing something if you want to end hunger and hunger what's stopping you Bill Gates is actually going to end malaria he's going to do it because he had the tenacity to generate the resources and because he has a mind that allows him to work on the infrastructure and figure out how to actually solve that problem do not under any circumstances make Bill Gates or anyone else extraordinary to let yourself off the hook don't fucking do it don't sell yourself short and this is where I see people go wrong all the time they look at somebody who's amazing and they say well they're just naturally gifted I could never do that you couldn't do it because you believe you can't and because you believe you can't you don't start putting in the work Michael Jordan got cut from his high school basketball team he wasn't exactly showing all the promise in the world my own mother when I left for college quietly assumed I


Invest in the Right Skills (02:23:41)

was going to fail and didn't admit that for years I showed no early signs of promise I actually have a version of this talk where I show photos from my childhood and people like yeah I'm gonna fuck you just stupid and it's true I used to dress like a clown and I mean that almost literally so my waist was size 36 and I wore size 54 pants I wore literal jester hats I had one of those big chains I connected to my belt I had shoulder length hair I did not exactly look the part and I didn't take


Transformation And Brain Chemistry

A Game of Transformation (02:24:24)

myself seriously it really is a game of transformation it really is a game of understanding that you can become something so even though I didn't start with the requisite skills even though I wasn't a born entrepreneur which is why I start this tale with that even though I wasn't a born entrepreneur I could acquire and did acquire the skills that were needed to execute it is a very long road that leads you here right now most entrepreneurs in the world are thinking about one thing winning a championship ring once you understand the difference between wanting to win a championship ring and wanting to be capable of a championship performance then you'll have the breakthrough that you need because most people are okay winning a ring while sitting on the bench I am not that holds no interest for me I don't want to win the lottery I don't want something handed to me that was why when I quit I gave the equity back I didn't want it if I didn't do it if I didn't earn it if I didn't make somebody's life better if I didn't force myself to actually develop my potential which for me the very meaning of life write this down the very meaning of life is to find out how many skills you can acquire that have utility and then put that utility to the test in service of something bigger than yourself I'll say that again the very purpose of life is to find out how many skills you can acquire that have utility and then put that utility to the test in service of something bigger than yourself if you do that not only can you build a big business that adds tremendous value to people but you'll have what's called technique you will have something beautiful a skill that you have fought hard for that can help someone else and that my friends is fulfillment and going back to the game that you're actually playing which is brain chemistry it is not money it is not accolades it is not number one on the Inc 500 list the game that you're playing is being proud of yourself the game you're playing is being able to look yourself in the eye and go damn you left it on the field you really played to your full potential and you're prepared to go back to the gym to get better when you


Brain Chemistry (01:09:51)

Each and every one of you at some point in your life, you are going to hit rock bottom. The question isn't will you hit rock bottom? The question is what are you going to do with yourself when it happens? And for me, I was teaching film and I met these two buff rich guys and I thought, oh my God, six pack abs and well. I've got to follow these guys. It's literally like I was meant to meet them. And they said, Tom, you're coming to the world with your hand out. If you want to control your art, if you want to control your life, you've got to get rich. So hey, come on. We're starting this technology company. We need a copywriter. You'd be perfect for the job. So I went and I did it and I said, but don't think of yourself as a copywriter. Understand, this is a startup. You can have any job in this company that you want. You just have to become the right person for the job. So I took them seriously and I started working my ass off to get better, to focus on the things that I needed to do in order to get good, to grow and be able to execute. And I got so good that by the time we sold that company, I was the chief marketing officer and they'd given me 10% of the company just based on performance. So imagine giving somebody something that amounts to millions of dollars just based on how hard they've worked. That was the kind of blood, sweat and tears that I put into it. But when I came into it, we all thought it was going to take us about 18 months to sell the company. Eight and a half years later, in the depths of despair, I realized something had to change. And I went to my partners and I quit. And I said, "Guys, here's your equity back. I don't believe I should get anything. I don't plan to cross the finish line. I'm going to go do something that makes me feel alive." And let me tell you right now, I said that from the position of being in a place where I had ownership in a company worth millions of dollars, I was making more money than I'd ever made in my life. I was standing in a beautiful conference room overlooking the Pacific Ocean in the house of a company that we had built that was winning awards. And I was so fundamentally unhappy that I finally had the first of what would become a string of very profound and important realizations. And that is the game you think you're playing is money. What I promise, the game you're actually playing is brain chemistry. If I gave you $4 billion tomorrow, but inside you felt suicidal and you felt worthless, what would be the point of the money? Conversely, if I gave you $3, but you felt fulfilled and like you were contributing not only to yourself, to your family, to other people, you felt alive inside and what you're doing meant something to you and you felt that you had significance, what does the money matter? Anybody ever read the poem Richard Corey? I read this poem and I was like nine years old and it left a lasting impression on me and it was about the best looking, richest guy in town, the guys wanted to be him and the girls wanted to be with him. And the poem ends with Richard Corey going home and putting a bullet in his head. That's the human condition. How many people have you met in your life? You think they're spectacular. They're amazing. And yet they're so fundamentally unhappy that they're in the grips of depression. We're living through a mental pandemic right now. It is almost ubiquitous to know somebody who has depression and/or anxiety.


Brain Chemistry (02:26:58)

know that about yourself everything changes like people always ask me Tom you work so much when you're going to take a day off like I'll take a day off whenever I want when I've earned it I'm not conflicted I know how much I work but I didn't take a day off for six and a half years at the beginning of my journey because I didn't believe I'd earned it some part of me was guilty because I was still fighting my own mindset I wasn't always doing the things that I should be doing once you get to the point where you know


Leave it on the Field (02:27:42)

you leave it out on the field every day take a vacation whenever you want it won't even be a second thought for you this is the most fundamental belief that I have I've hired drug dealers I've hired former gang members at one point the staff at quest literally I had bloods and crips working the same production line so true story because I told the neighborhood I don't care who you are all I want to know who do you want to be and what's the price you're willing to pay to get there boys and girls I promise you once you answer that question for yourself once you know exactly who you want to become and you're willing to pay a price that is higher than anyone else is willing to pay you will win that's the only path to success think about what you know about humans your job in building a company is to get people to feel so bonded to you so bonded to your company that you dazzled them and have you ever dazzled somebody by lowering their expectations and then comfortably delivering more the phrase that makes me want to break something under promise and over deliver fuck that if you


Delivery And Expectations

Under Promise and Over Deliver (02:29:08)

tell me you want to under promise and over deliver you're dead to me I don't even want to talk to you because I know what you're trying to do is manage my expectations you are not trying to be the greatest of all time you are not trying to be capable of the extraordinary you will happily win a championship ring while sitting on the bench I'm not looking for that what I'm looking for is somebody who knows who they want to become and they're willing to pay an extraordinary price to become that because all that matters to them is becoming capable of the extraordinary and when you get to that point the only way you will know how to act is to set the bar ridiculously high so high you're almost embarrassed to say it out loud and then my friends you're going to surpass all expectations thank you if you want financial freedom click right here for millionaire habits if somebody is starting from scratch what are the traits skill sets that they should be cultivating in order to up the odds of their success they should focus on one thing in general rather than lots of different things that


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