00:00

What matters is not necessarily

What matters is not necessarily

00:02

what are the best returns that you can earn this year? That's what everyone chases, but that's not what matters. What matters is What are the best returns that you can sustain for the longest period of time?

what are the best returns that you can earn this year? That's what everyone chases, but that's not what matters. What matters is What are the best returns that you can sustain for the longest period of time?

00:20

Let's just get right into it. Morgan, what's going on, man? I'm happy you're here. I'm happy to be here. Thanks for having me, guys. I read the book, your your first big hit psychology of money a while ago. Was that four years ago? About yep.

Let's just get right into it. Morgan, what's going on, man? I'm happy you're here. I'm happy to be here. Thanks for having me, guys. I read the book, your your first big hit psychology of money a while ago. Was that four years ago? About yep.

00:31

Yeah. And then this new one just came out. Was it called same as ever? That's right. Yeah, man. And people are I the goodreads reviews are higher on the re most recent one, I think, than the first one. So congratulations.

Yeah. And then this new one just came out. Was it called same as ever? That's right. Yeah, man. And people are I the goodreads reviews are higher on the re most recent one, I think, than the first one. So congratulations.

00:43

No. Thanks. It's always it's always I think with all books and all articles, this is probably true for podcasts too. You really never know what's gonna work and what's not. And even I I've been a writer for seventeen years, and I still really don't know when I published something, a blog or a book, how it's gonna be received. And maybe you get a little bit better around the edges, but it's always, like, you just have to birth it into the world and then and then just step back and watch. It's gonna do whatever it's gonna do. Well, you told me that the first version of psychology of money, you said that you the first print run was, I think, five thousand copies. Is that right? So you guys you thought, you know, five thousand copies is is the right amount. You sold over four million.

No. Thanks. It's always it's always I think with all books and all articles, this is probably true for podcasts too. You really never know what's gonna work and what's not. And even I I've been a writer for seventeen years, and I still really don't know when I published something, a blog or a book, how it's gonna be received. And maybe you get a little bit better around the edges, but it's always, like, you just have to birth it into the world and then and then just step back and watch. It's gonna do whatever it's gonna do. Well, you told me that the first version of psychology of money, you said that you the first print run was, I think, five thousand copies. Is that right? So you guys you thought, you know, five thousand copies is is the right amount. You sold over four million.

01:21

So,

So,

01:22

I think that that proves your point of You don't really know till you know.

I think that that proves your point of You don't really know till you know.

01:27

But that is that number's kind of amazing, dude. Like, over four million books sold. Your don't know. In the top point o o one percent or something of of authors, you know, that I don't know how much you make per book, but I think that means you've made, like, over ten million dollars as an author on a successful book. That's so hard to do. That's so rare.

But that is that number's kind of amazing, dude. Like, over four million books sold. Your don't know. In the top point o o one percent or something of of authors, you know, that I don't know how much you make per book, but I think that means you've made, like, over ten million dollars as an author on a successful book. That's so hard to do. That's so rare.

01:45

And, you know, congrats to you for doing that. Thanks, Sean. Yeah. I mean, I was telling someone the other day. I think The closest analogy to the book industry is probably professional sports,

And, you know, congrats to you for doing that. Thanks, Sean. Yeah. I mean, I was telling someone the other day. I think The closest analogy to the book industry is probably professional sports,

01:54

where

where

01:55

ninety nine point nine percent of high school basketball players will never make the MBA. I know ninety nine point nine nine nine. Whatever it is.

ninety nine point nine percent of high school basketball players will never make the MBA. I know ninety nine point nine nine nine. Whatever it is.

02:02

But but then you have a couple of of LeBron James and Michael Jordans who go on to make a billion dollars doing it. And I I don't know this to be a hundred percent sure, but adding it up in my head, I'm pretty sure there are more billionaire authors than there are billionaire athletes.

But but then you have a couple of of LeBron James and Michael Jordans who go on to make a billion dollars doing it. And I I don't know this to be a hundred percent sure, but adding it up in my head, I'm pretty sure there are more billionaire authors than there are billionaire athletes.

02:16

Even in a world in which ninety nine point nine percent of books will sell, you know,

Even in a world in which ninety nine point nine percent of books will sell, you know,

02:21

a couple thousand copies or or less if that But then you have JK Rowling and Dave Plinky and James Patterson who are who have made over a billion dollars writing book. So it's just like extremely tail driven in the success.

a couple thousand copies or or less if that But then you have JK Rowling and Dave Plinky and James Patterson who are who have made over a billion dollars writing book. So it's just like extremely tail driven in the success.

02:34

I wanna ask you about,

I wanna ask you about,

02:37

one of your philosophies, because you're very interested in me. You have a philosophy. It's very easy to sell a philosophy of more.

one of your philosophies, because you're very interested in me. You have a philosophy. It's very easy to sell a philosophy of more.

02:43

Right? People do that all the time. And in fact, even our podcast, I would say, falls into the bucket of the philosophy of more many times when we say no small boy stuff. Right? We're saying, think big, play big. Go for it. Don't sit around and wait. Don't don't be fearful. Right? So more more action, more ambition, more whatever. That's that's one philosophy. A lot of people fall into. And some people go even crazy. Right? David Goggins is, like, work harder. Gary V. Alex Mosie, these guys are, like, just grind harder. So people often have the philosophy of more. And some people, Marie Kondo and others have the philosophy of way less. You need less. Minimalism.

Right? People do that all the time. And in fact, even our podcast, I would say, falls into the bucket of the philosophy of more many times when we say no small boy stuff. Right? We're saying, think big, play big. Go for it. Don't sit around and wait. Don't don't be fearful. Right? So more more action, more ambition, more whatever. That's that's one philosophy. A lot of people fall into. And some people go even crazy. Right? David Goggins is, like, work harder. Gary V. Alex Mosie, these guys are, like, just grind harder. So people often have the philosophy of more. And some people, Marie Kondo and others have the philosophy of way less. You need less. Minimalism.

03:15

You know,

You know,

03:17

escapism, just become a a a sort of a a a zen person. Go,

escapism, just become a a a sort of a a a zen person. Go,

03:21

whatever. Get those vans and just, like, travel around the world. Right? So it's, like,

whatever. Get those vans and just, like, travel around the world. Right? So it's, like,

03:25

There's the philosophy of less. And you're in the middle, which usually is the the dead zone for content.

There's the philosophy of less. And you're in the middle, which usually is the the dead zone for content.

03:30

You're in the middle where you're, like, No. Just have enough.

You're in the middle where you're, like, No. Just have enough.

03:34

Right? Like, moderation.

Right? Like, moderation.

03:35

And I can't believe you've got moderation to sell. I'm gonna read you a quote, and then I want you to talk about this. So you said, More than I want big returns, I wanna be financially unbreakable.

And I can't believe you've got moderation to sell. I'm gonna read you a quote, and then I want you to talk about this. So you said, More than I want big returns, I wanna be financially unbreakable.

03:44

If I'm unbreakable,

If I'm unbreakable,

03:46

I think I'll actually get the biggest returns because I'll be able to stick around long enough for the compounding to work wonders. I loved that quote. And I in general, I find moderation thing interesting. Tell me more about that. This is where, like, moderation in finance is actually gonna lead to the biggest returns because What matters is not necessarily

I think I'll actually get the biggest returns because I'll be able to stick around long enough for the compounding to work wonders. I loved that quote. And I in general, I find moderation thing interesting. Tell me more about that. This is where, like, moderation in finance is actually gonna lead to the biggest returns because What matters is not necessarily

04:02

what are the best returns you can earn this year? That's what everyone chases, but that's not what matters. What matters is What are the best returns that you can sustain for the longest period of time? And so this is why, like, on an annual basis, I am I strive for average returns in my index funds. By design. Why do I do it? Because that's gonna give me the endurance to hold them for fifty years. And if you can earn average returns for fifty years, you're gonna end up in the top one percent. Of all investors, and you do it with zero effort. What's average?

what are the best returns you can earn this year? That's what everyone chases, but that's not what matters. What matters is What are the best returns that you can sustain for the longest period of time? And so this is why, like, on an annual basis, I am I strive for average returns in my index funds. By design. Why do I do it? Because that's gonna give me the endurance to hold them for fifty years. And if you can earn average returns for fifty years, you're gonna end up in the top one percent. Of all investors, and you do it with zero effort. What's average?

04:31

In the in the US stock market, six percent real, six and a half percent real after inflation is what's been. You could earn six and a half percent returns after inflation for fifty years, it's it I mean, you can run the calculations of it. It it it is is it's gonna achieve every it's it's dynastic wealth. It'll make your great grandchildren wealthy. And so that's the and you can do that with zero effort. Now look, past past performance, not a negative. There's a nuclear war, etcetera. You can come up with all these scenarios in which it's not gonna work out. You can come up with scenarios in which the economic conditions of the last hundred years are not gonna replicate for the next hundred years. Okay. All those aside, earning average returns for an above average period of time is way more lucrative than trying to earn superior returns for a shorter period of time. And, like, as always, and I think it's so counterintuitive.

In the in the US stock market, six percent real, six and a half percent real after inflation is what's been. You could earn six and a half percent returns after inflation for fifty years, it's it I mean, you can run the calculations of it. It it it is is it's gonna achieve every it's it's dynastic wealth. It'll make your great grandchildren wealthy. And so that's the and you can do that with zero effort. Now look, past past performance, not a negative. There's a nuclear war, etcetera. You can come up with all these scenarios in which it's not gonna work out. You can come up with scenarios in which the economic conditions of the last hundred years are not gonna replicate for the next hundred years. Okay. All those aside, earning average returns for an above average period of time is way more lucrative than trying to earn superior returns for a shorter period of time. And, like, as always, and I think it's so counterintuitive.

05:15

The intuition for everyone, including educated professional investors, is How do I earn the highest returns this year? And, like, it's like, of course, it's like, how could that be wrong? It's like, no. If you're just average for a long period of time, you that's the winner. Pymco, the big bond fund. They had this phrase that I love. They called it strategic mediocrity,

The intuition for everyone, including educated professional investors, is How do I earn the highest returns this year? And, like, it's like, of course, it's like, how could that be wrong? It's like, no. If you're just average for a long period of time, you that's the winner. Pymco, the big bond fund. They had this phrase that I love. They called it strategic mediocrity,

05:33

where in any given year, they were never gonna be in the top half against their peers. But in every decade, they'd always be in the top decile. Because the peers that beat them in any given year get washed out. And I think that and I think it applies to a lot of things. It applies to a lot of businesses. It applies to relationships and marriages of, like, you don't need to be a superhero. If you're just good for a long period of time, that's how compounding works its magic.

where in any given year, they were never gonna be in the top half against their peers. But in every decade, they'd always be in the top decile. Because the peers that beat them in any given year get washed out. And I think that and I think it applies to a lot of things. It applies to a lot of businesses. It applies to relationships and marriages of, like, you don't need to be a superhero. If you're just good for a long period of time, that's how compounding works its magic.

05:57

Our software is the worst. Have you heard of HubSpot?

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06:00

See, most CRMs are a cobbled together mess. But Hub is easy to adopt and actually looks gorgeous. I think I love our new CRM. Our software is the best. HubSpot,

See, most CRMs are a cobbled together mess. But Hub is easy to adopt and actually looks gorgeous. I think I love our new CRM. Our software is the best. HubSpot,

06:11

grow better.

grow better.

06:12

That That thing you just said was excellent.

That That thing you just said was excellent.

06:16

I love that. So you said

I love that. So you said

06:18

I want average returns for an above average number of years rather than superior returns for a short period of time.

I want average returns for an above average number of years rather than superior returns for a short period of time.

06:26

Or,

Or,

06:27

you know, I, you know, I any given year, I'm not trying to be in the top. I'm trying to be, you know, sort of fifty percent. But if I do that for thirty years, I'll be in the top ten percent. It's so true in the kind of, like, slow and steady wins the race. I think you had a stat that, like, if Warren Buffett has that on what it is, like, let's say eighty five billion dollars net worth, like, eighty one billion of those eighty five

you know, I, you know, I any given year, I'm not trying to be in the top. I'm trying to be, you know, sort of fifty percent. But if I do that for thirty years, I'll be in the top ten percent. It's so true in the kind of, like, slow and steady wins the race. I think you had a stat that, like, if Warren Buffett has that on what it is, like, let's say eighty five billion dollars net worth, like, eighty one billion of those eighty five

06:48

came after his sixty fifth birthday. Right? And I think he said something like, if if Warren had just retired when he was sixty, nobody would even talk about him because the cop had me call. Like, obviously, he is a great investor, of course. But the whole secret, what's literally ninety nine percent of wealth is that he's been a great investor for eighty years. That's why he started investing when he was eleven, and he's ninety three today. Still going as as as as hard as ever. And that's where all the money comes from. And, yes, like, so his average returns are are twenty percent per year, which which is phenomenal. Of course. But if you earn twenty percent per year for twenty years, it's it's really good. If you earn twenty percent a year for forty years, it's great. If you earn twenty percent a year for eighty years,

came after his sixty fifth birthday. Right? And I think he said something like, if if Warren had just retired when he was sixty, nobody would even talk about him because the cop had me call. Like, obviously, he is a great investor, of course. But the whole secret, what's literally ninety nine percent of wealth is that he's been a great investor for eighty years. That's why he started investing when he was eleven, and he's ninety three today. Still going as as as as hard as ever. And that's where all the money comes from. And, yes, like, so his average returns are are twenty percent per year, which which is phenomenal. Of course. But if you earn twenty percent per year for twenty years, it's it's really good. If you earn twenty percent a year for forty years, it's great. If you earn twenty percent a year for eighty years,

07:28

you're worth a hundred billion dollars. Like, that that that's where all the returns come from. Did you hear this, Sam? They're giving that shirt away at at Buffets giving it away this year at the Berkshire conference just hard as ever. Still going hard as ever.

you're worth a hundred billion dollars. Like, that that that's where all the returns come from. Did you hear this, Sam? They're giving that shirt away at at Buffets giving it away this year at the Berkshire conference just hard as ever. Still going hard as ever.

07:39

Is that real? Are you being serious? Oh, it'd be hilarious. Dude, but

Is that real? Are you being serious? Oh, it'd be hilarious. Dude, but

07:45

we joke about war buffet where he talks about,

we joke about war buffet where he talks about,

07:48

you know, like,

you know, like,

07:49

well, I forget how he phrases it, but he talks about, like, the the, you know, all about the future. It's all about the future. And we were like, dude, you're ninety three. Like, there is no future. Like, bail and enjoy life. And you could argue, I Well, he's he likes what he does. So, you know, it's cool. He's enjoying life. But I've always, like, when I think about long term stuff, I'll, like, map out my life, and I'm, like, man, like, if I only live to be eighty, I only have, you know,

well, I forget how he phrases it, but he talks about, like, the the, you know, all about the future. It's all about the future. And we were like, dude, you're ninety three. Like, there is no future. Like, bail and enjoy life. And you could argue, I Well, he's he likes what he does. So, you know, it's cool. He's enjoying life. But I've always, like, when I think about long term stuff, I'll, like, map out my life, and I'm, like, man, like, if I only live to be eighty, I only have, you know,

08:14

forty or something summers left. Like, I don't I don't know if I wanna be I'm not willing to pay the price if that's what's considered great is doing thirty or twenty per twenty percent returns for eighty years, I'm not willing to pay that price because life's too short.

forty or something summers left. Like, I don't I don't know if I wanna be I'm not willing to pay the price if that's what's considered great is doing thirty or twenty per twenty percent returns for eighty years, I'm not willing to pay that price because life's too short.

08:29

And when I think about, like, what it requires to be one of one, to be one of the greats,

And when I think about, like, what it requires to be one of one, to be one of the greats,

08:35

that's what freaks me out is I don't wanna be that old and not have enjoyed it. You know, that's why it's, like, the con converse to all this is Bill Perkins's book, DIwood zero of, like, spend it while you're here, enjoy it while you're here because when you're gone, it's

that's what freaks me out is I don't wanna be that old and not have enjoyed it. You know, that's why it's, like, the con converse to all this is Bill Perkins's book, DIwood zero of, like, spend it while you're here, enjoy it while you're here because when you're gone, it's

08:49

it's pointless. You know what I mean? Yeah. Yeah. Now the I I think I there's a couple I think I I agree with every word you said, particularly for ordinary people like us. I do think

it's pointless. You know what I mean? Yeah. Yeah. Now the I I think I there's a couple I think I I agree with every word you said, particularly for ordinary people like us. I do think

08:58

Buffet's DNA is just he gets more pleasure from anything in life.

Buffet's DNA is just he gets more pleasure from anything in life.

09:03

The the most pleasure he gets is from compounding. There's nothing that makes him happier. The other thing is even though he's worth a hundred billion dollars today, he's given away a hundred billion already.

The the most pleasure he gets is from compounding. There's nothing that makes him happier. The other thing is even though he's worth a hundred billion dollars today, he's given away a hundred billion already.

09:12

And and with with the rest of his net worth, the fact, you know, go into the Bill, Melinda Gates Foundation,

And and with with the rest of his net worth, the fact, you know, go into the Bill, Melinda Gates Foundation,

09:16

I I imagine. I don't know this to be true, but I imagine when he when he lays in bed pondering his life, he's like, I'm I I I did. I I I put my skill to use, and I'm gonna give away a quarter of a trillion dollars for the betterment of society. Just in Omaha a couple months ago where he's lived his entire life. And in downtown Omaha, one of the tallest buildings says the buffet Center for Cancer Research or some something like that. Imagine when he drives past that, and this is the building that he drove past when he was five years old. It gives him a ridiculous amount of pride and pleasure.

I I imagine. I don't know this to be true, but I imagine when he when he lays in bed pondering his life, he's like, I'm I I I did. I I I put my skill to use, and I'm gonna give away a quarter of a trillion dollars for the betterment of society. Just in Omaha a couple months ago where he's lived his entire life. And in downtown Omaha, one of the tallest buildings says the buffet Center for Cancer Research or some something like that. Imagine when he drives past that, and this is the building that he drove past when he was five years old. It gives him a ridiculous amount of pride and pleasure.

09:47

And so I actually think if if he were on his deathbed tomorrow, Charlie Mungard has died last month, I think he would look back and say, like, I I I live the best life that I could have. It wasn't perfect by any means. But I I I I think there is a difference between the Bill Perkins's philosophy, which is true for ninety nine percent of people. And then there's one percent of people who actually get so much pleasure out of compounding and thinking about what that money's gonna do to society after they die. Dude, there's this crazy story about Buffet where his daughter had just had a baby and she's living in a shit apartment. And she and,

And so I actually think if if he were on his deathbed tomorrow, Charlie Mungard has died last month, I think he would look back and say, like, I I I live the best life that I could have. It wasn't perfect by any means. But I I I I think there is a difference between the Bill Perkins's philosophy, which is true for ninety nine percent of people. And then there's one percent of people who actually get so much pleasure out of compounding and thinking about what that money's gonna do to society after they die. Dude, there's this crazy story about Buffet where his daughter had just had a baby and she's living in a shit apartment. And she and,

10:18

a mutual friend of Warren and the daughter went it was actually the CEO of Washington Post went to the house and was like, Warren her kitchen sucks, man. And so the daughter eventually goes to Warren and goes, hey, can I get, like, twenty thousand dollar loan in order to redo my kitchen? And he was like, just go to the bank. And, so she eventually goes to the bank. And then a few months later,

a mutual friend of Warren and the daughter went it was actually the CEO of Washington Post went to the house and was like, Warren her kitchen sucks, man. And so the daughter eventually goes to Warren and goes, hey, can I get, like, twenty thousand dollar loan in order to redo my kitchen? And he was like, just go to the bank. And, so she eventually goes to the bank. And then a few months later,

10:37

the the CEO of Washington Post goes back to her house and the daughter's sitting in bed, but she has a really small TV where she would sit and nurse her child in front of And Washington post, like, it goes to Warren. She goes, Warren, give her five hundred bucks for a new TV, man. She could barely see this TV, and she's in bed, like, eight hours a day. Or can you just give her a new TV? And Warren was like, no, compounding's more important for that five hundred dollar TV. I can't I'm not gonna take the money out. And so Catherine, the CEO of Washington Post ended up buying her a five hundred dollar TV but that's how, like, tight this guy was about following his code, which I guess I appreciate that someone has a code, but that ain't that ain't my code. Wait. So Warren Buffett's just an asshole. Is that the store? Is this a real story? Because I hate Warren, but now Well, yeah. So Warren Buffett gets he gets a pass for having this all Shucks attitude. He's definitely an asshole. He's definitely an asshole. Depending on how you define asshole, I would define him as a one of what do I say? All great men are also bad men. The way he handled his his family, I think, was was not wonderful. The way he handled business associates was wonderful. So, you know, like, it's there's trade offs that being great. I think I think as someone, like, I have so much respect and admiration

the the CEO of Washington Post goes back to her house and the daughter's sitting in bed, but she has a really small TV where she would sit and nurse her child in front of And Washington post, like, it goes to Warren. She goes, Warren, give her five hundred bucks for a new TV, man. She could barely see this TV, and she's in bed, like, eight hours a day. Or can you just give her a new TV? And Warren was like, no, compounding's more important for that five hundred dollar TV. I can't I'm not gonna take the money out. And so Catherine, the CEO of Washington Post ended up buying her a five hundred dollar TV but that's how, like, tight this guy was about following his code, which I guess I appreciate that someone has a code, but that ain't that ain't my code. Wait. So Warren Buffett's just an asshole. Is that the store? Is this a real story? Because I hate Warren, but now Well, yeah. So Warren Buffett gets he gets a pass for having this all Shucks attitude. He's definitely an asshole. He's definitely an asshole. Depending on how you define asshole, I would define him as a one of what do I say? All great men are also bad men. The way he handled his his family, I think, was was not wonderful. The way he handled business associates was wonderful. So, you know, like, it's there's trade offs that being great. I think I think as someone, like, I have so much respect and admiration

11:43

and reverence for him, but I would also put him in the camp as someone who was, like, so glad he exists,

and reverence for him, but I would also put him in the camp as someone who was, like, so glad he exists,

11:48

but I don't think I would want that for my own life, which is not a criticism against his life. It's just, like, to each their own, and let's not pretend that everyone should want the life of the five standard deviation success. It's like there's a cost to all of that. Oh, just trying to imagine, like, his daughter just, like, you know, at the bus stop trying to get a bus ride to she's going, she's looking up at the Buffet Cancer Research Center and just being like, god, damn it.

but I don't think I would want that for my own life, which is not a criticism against his life. It's just, like, to each their own, and let's not pretend that everyone should want the life of the five standard deviation success. It's like there's a cost to all of that. Oh, just trying to imagine, like, his daughter just, like, you know, at the bus stop trying to get a bus ride to she's going, she's looking up at the Buffet Cancer Research Center and just being like, god, damn it.

12:11

And there's there's some other parts of the story. Buffet's,

And there's there's some other parts of the story. Buffet's,

12:14

first wife Susie.

first wife Susie.

12:15

You know, had, billions of dollars of her own. And she was much more free willing with with money. So I think that the buffet Children and they did just fine. But, yeah, there's there's plenty of stories about war. And he always described it as he was like, capital is my tool. I'm not gonna give, like, these are the tools of my business. This is how I make money. I'm not gonna be willy nilly with it. Even when Buffett was in his twenties, when he was a kid, it was back in the fifties, he was already worth tens of millions of dollars in the when that was real money in the fifties,

You know, had, billions of dollars of her own. And she was much more free willing with with money. So I think that the buffet Children and they did just fine. But, yeah, there's there's plenty of stories about war. And he always described it as he was like, capital is my tool. I'm not gonna give, like, these are the tools of my business. This is how I make money. I'm not gonna be willy nilly with it. Even when Buffett was in his twenties, when he was a kid, it was back in the fifties, he was already worth tens of millions of dollars in the when that was real money in the fifties,

12:43

And you could easily imagine a world in which he's worth the equivalent of a hundred million dollars when he's thirty years old or whatever it was. And everyone'd be like, dude, you need to give all this away. You're never gonna be able to spend this. And his philosophy was like, his philosophy has always been people in the future will be just as needy as people are today. So if I have an above average ability to compound it, it actually sense for me to hold on to this money for as long as I can before I give it away, which I think is actually pretty rational.

And you could easily imagine a world in which he's worth the equivalent of a hundred million dollars when he's thirty years old or whatever it was. And everyone'd be like, dude, you need to give all this away. You're never gonna be able to spend this. And his philosophy was like, his philosophy has always been people in the future will be just as needy as people are today. So if I have an above average ability to compound it, it actually sense for me to hold on to this money for as long as I can before I give it away, which I think is actually pretty rational.

13:07

You you said a few things I thought were,

You you said a few things I thought were,

13:10

contradictory in in different interviews that I watch. The and I think in the book, I I forget I'm mixing up the book and interviews that I watch But you talk about financial goals. And you're like, I don't look at I don't look at my portfolio.

contradictory in in different interviews that I watch. The and I think in the book, I I forget I'm mixing up the book and interviews that I watch But you talk about financial goals. And you're like, I don't look at I don't look at my portfolio.

13:22

I I think you said I don't set goals or at least that's the vibe that I got in an interview. But then I've also read a little bit where you do have some type of goals.

I I think you said I don't set goals or at least that's the vibe that I got in an interview. But then I've also read a little bit where you do have some type of goals.

13:32

So for for financial goals, do you, like, have a number in your oh, sorry. I remember what it you said, whenever you hit your goal, you're always gonna double it. Therefore, I don't have goals. I think that's what you said.

So for for financial goals, do you, like, have a number in your oh, sorry. I remember what it you said, whenever you hit your goal, you're always gonna double it. Therefore, I don't have goals. I think that's what you said.

13:42

It's such a The the the the the reason it's hard for me to answer is I'm sure I've said things that are contradictory because I like everyone else. It's like it depends. Yeah. I'm not trying to call you out. No. No. No. Depends on on probably the the the mood that I'm in that day. Do I if I'm sitting here today, I think, do my wife and I have financial goals?

It's such a The the the the the reason it's hard for me to answer is I'm sure I've said things that are contradictory because I like everyone else. It's like it depends. Yeah. I'm not trying to call you out. No. No. No. Depends on on probably the the the mood that I'm in that day. Do I if I'm sitting here today, I think, do my wife and I have financial goals?

13:58

Not really. It's not like, oh, we're trying to hit x and once we hit x, we're gonna go buy wide. Like, not really.

Not really. It's not like, oh, we're trying to hit x and once we hit x, we're gonna go buy wide. Like, not really.

14:05

But I, like, everyone else, think about, like, oh, if my income stays the same, we'll have this much money. What kind of life could we live with that much money? And one thing too, like, well, we have two young kids. And we are pretty hell bent on not spoiling them. They live an amazing life, and we live in a great house. They'll have a great education. They'll live the top point zero one percent of lives, but we don't wanna raise boiled little pricks. And because of that, we off that we often when we have goals, it's not like, oh, how can we buy a a bigger house, another house, nicer car, It's kinda like we wanna live a good, but not extravagant life because we don't wanna spoil our kids. But, like, even that, sometimes, like, I can talk to other people who are like, no. Actually, you can live.

But I, like, everyone else, think about, like, oh, if my income stays the same, we'll have this much money. What kind of life could we live with that much money? And one thing too, like, well, we have two young kids. And we are pretty hell bent on not spoiling them. They live an amazing life, and we live in a great house. They'll have a great education. They'll live the top point zero one percent of lives, but we don't wanna raise boiled little pricks. And because of that, we off that we often when we have goals, it's not like, oh, how can we buy a a bigger house, another house, nicer car, It's kinda like we wanna live a good, but not extravagant life because we don't wanna spoil our kids. But, like, even that, sometimes, like, I can talk to other people who are like, no. Actually, you can live.

14:43

The big high life without spoiling your kids. Here's how to do it. So I I I feel like I say like, I think a lot of the contradictions come from humility of just, like, I I I haven't really figured it out. Yet for myself.

The big high life without spoiling your kids. Here's how to do it. So I I I feel like I say like, I think a lot of the contradictions come from humility of just, like, I I I haven't really figured it out. Yet for myself.

14:53

I tend to not have goals. For years, I had a goal of once my net worth is x, I'm not gonna work much anymore. Because I could easily live for the rest of my life off of that net worth. And I've exceeded that number, and I'm working I'm working harder than ever. But I don't I don't regret that at all. Maybe that is some version of moving the goalpost, but I think more of it is after I hit some level of financial independence after I wrote books, It was like, okay. I'm only gonna do the work that I enjoy now. And it's not really work. It's just like I really enjoy writing these books. I only speak at conferences that in cities that I want to go to. It doesn't feel like work. And I I don't think I really understood that ten years ago. Ten years ago, work was by and large a means to an end. I need to do this to feed my family. And now that have reached kind of the artistic level, I'm like, oh, I wanna keep doing this forever. And in that world, goals kinda go out the window. Well, we've, like, interviewed a bunch of I mean, we've had we have a bunch of wealthy friends. We've had a bunch of people on here. I'm you're like a financial historian. So you've, like, read about all these people. You also know a lot of them and you've written about and you probably run-in even a more elite circle than we do.

I tend to not have goals. For years, I had a goal of once my net worth is x, I'm not gonna work much anymore. Because I could easily live for the rest of my life off of that net worth. And I've exceeded that number, and I'm working I'm working harder than ever. But I don't I don't regret that at all. Maybe that is some version of moving the goalpost, but I think more of it is after I hit some level of financial independence after I wrote books, It was like, okay. I'm only gonna do the work that I enjoy now. And it's not really work. It's just like I really enjoy writing these books. I only speak at conferences that in cities that I want to go to. It doesn't feel like work. And I I don't think I really understood that ten years ago. Ten years ago, work was by and large a means to an end. I need to do this to feed my family. And now that have reached kind of the artistic level, I'm like, oh, I wanna keep doing this forever. And in that world, goals kinda go out the window. Well, we've, like, interviewed a bunch of I mean, we've had we have a bunch of wealthy friends. We've had a bunch of people on here. I'm you're like a financial historian. So you've, like, read about all these people. You also know a lot of them and you've written about and you probably run-in even a more elite circle than we do.

15:56

But a question that I've always wondered is, is there a threshold where I'm not gonna worry anymore? So far, I've not found that threshold. And we had Scott Galloway on here recently, and he was like, I'm worth, like, over a hundred million liquid, and I still freak out. Have you found any type of thresholds to where the average person changes where they feel more relief? I don't know I don't know if the average person. I can tell you myself, though. That number that I was talking about before where for years, it was like, once I hit this number, I'm not gonna work anymore. Once I hit that number, I still work. Can you say that number?

But a question that I've always wondered is, is there a threshold where I'm not gonna worry anymore? So far, I've not found that threshold. And we had Scott Galloway on here recently, and he was like, I'm worth, like, over a hundred million liquid, and I still freak out. Have you found any type of thresholds to where the average person changes where they feel more relief? I don't know I don't know if the average person. I can tell you myself, though. That number that I was talking about before where for years, it was like, once I hit this number, I'm not gonna work anymore. Once I hit that number, I still work. Can you say that number?

16:26

I don't know I don't know if I wanna get too too into detail because maybe I'll tell you all, off off camera. It's not it's not a it's not a ridiculous hack. Because, some people don't know how what How should I think about what that number is? For me, for example, I was like, oh, if my life annual burn rate was x,

I don't know I don't know if I wanna get too too into detail because maybe I'll tell you all, off off camera. It's not it's not a it's not a ridiculous hack. Because, some people don't know how what How should I think about what that number is? For me, for example, I was like, oh, if my life annual burn rate was x,

16:40

and I wanted a certain amount of money where, you know, four percent or five percent withdrawals of that

and I wanted a certain amount of money where, you know, four percent or five percent withdrawals of that

16:46

would mean I'm sort of saying neutral. Let's assume I'm getting six percent real returns in the market. If I was to withdraw four percent out to pay for lifestyle,

would mean I'm sort of saying neutral. Let's assume I'm getting six percent real returns in the market. If I was to withdraw four percent out to pay for lifestyle,

16:54

you know, that that number, the bank account's never gonna go down. It's only gonna go up. That's how

you know, that that number, the bank account's never gonna go down. It's only gonna go up. That's how

16:59

And yours, Sean, was how I calculated.

And yours, Sean, was how I calculated.

17:01

Years ago, Sean, you said yours was six million. But if I had to guess, that has changed as you've had a family.

Years ago, Sean, you said yours was six million. But if I had to guess, that has changed as you've had a family.

17:08

Yeah.

Yeah.

17:09

No. To be honest, can I say the honest answer is kind of ridiculous sounding, but, like, It's not that, oh, I had kids? And, oh, man, I really underst these diapers are expensive. That's not actually what happened. I literally I remember one day, I was like, okay. So I've done this. I was like,

No. To be honest, can I say the honest answer is kind of ridiculous sounding, but, like, It's not that, oh, I had kids? And, oh, man, I really underst these diapers are expensive. That's not actually what happened. I literally I remember one day, I was like, okay. So I've done this. I was like,

17:23

I kinda feel like a guy who should have a hundred million dollars. And literally, I'm thinking to myself. I was like, I think I'm

I kinda feel like a guy who should have a hundred million dollars. And literally, I'm thinking to myself. I was like, I think I'm

17:31

I think I've worked that. I think I should be, like, you know, I don't have to have it, but, like, if I didn't have it, something would feel amiss. Something would feel a little wrong. And, then I was like, okay. Cool. I think I should do that. It would then become my, like, north star of, like, I'm gonna do this. But what I did do is I made sure that I would only,

I think I've worked that. I think I should be, like, you know, I don't have to have it, but, like, if I didn't have it, something would feel amiss. Something would feel a little wrong. And, then I was like, okay. Cool. I think I should do that. It would then become my, like, north star of, like, I'm gonna do this. But what I did do is I made sure that I would only,

17:49

I would only work on things that either I was doing purely for the joy of it. It it it didn't have to bring in any dollars. If I was doing it because I thought it's gonna be financially rewarding, the finance reward had to be big enough to make it to be, like, on that path, not a path, not a smaller path. Yeah. Then that's not like, I I came up with my number exactly as you did, Sean. It was, like, if I have a four percent withdrawal rate, what is the annual income that I know is gonna be, like, easily comfortably all that we're ever gonna wanna spend. And, like, I just backed into the number. And, Sam, to answer your question of, like, once I hit that level,

I would only work on things that either I was doing purely for the joy of it. It it it didn't have to bring in any dollars. If I was doing it because I thought it's gonna be financially rewarding, the finance reward had to be big enough to make it to be, like, on that path, not a path, not a smaller path. Yeah. Then that's not like, I I came up with my number exactly as you did, Sean. It was, like, if I have a four percent withdrawal rate, what is the annual income that I know is gonna be, like, easily comfortably all that we're ever gonna wanna spend. And, like, I just backed into the number. And, Sam, to answer your question of, like, once I hit that level,

18:20

a, I I kept working as I am now. And I don't think I was any happier, but I had a I have less financial stress, less career stress. Because But that's happiness, dude. That's happiness. I I it's such a cop out. I hate when we'll say money doesn't make you happier. It just gets rid of buddy problems. And I'm like, yeah. When I worried about rent, I was unhappy.

a, I I kept working as I am now. And I don't think I was any happier, but I had a I have less financial stress, less career stress. Because But that's happiness, dude. That's happiness. I I it's such a cop out. I hate when we'll say money doesn't make you happier. It just gets rid of buddy problems. And I'm like, yeah. When I worried about rent, I was unhappy.

18:41

Now I know I'm more happy. I'm not necessarily happy, but I'm happier.

Now I know I'm more happy. I'm not necessarily happy, but I'm happier.

18:46

I I think, like, I I think we're we we probably agree. This is, like, arguing over the definition of words, but I would say there's a big difference between

I I think, like, I I think we're we we probably agree. This is, like, arguing over the definition of words, but I would say there's a big difference between

18:53

happiness and a reduction of anxiety. I think those are very different things. Happiness is is, like, you wake up grinning ear to ear, or it's, like, if you're watching the funniest comedy you've ever scene and you're just, like, laughing on the floor. That's a happy moment, but it's always fleeting. But to me, the reduction of anxiety or contentment

happiness and a reduction of anxiety. I think those are very different things. Happiness is is, like, you wake up grinning ear to ear, or it's, like, if you're watching the funniest comedy you've ever scene and you're just, like, laughing on the floor. That's a happy moment, but it's always fleeting. But to me, the reduction of anxiety or contentment

19:10

That is something that money can buy, and that is worth chasing. It's great. So, like, when people say money can't buy happiness,

That is something that money can buy, and that is worth chasing. It's great. So, like, when people say money can't buy happiness,

19:16

what they're implicitly saying is it's not worth chasing. I think it absolutely is worth chasing, but it's not gonna give you happiness per se. It's gonna give you contentment and reduction of anxiety, which is wonderful. It's a massive increase in the quality of your life. But in my definition, it's not necessarily happiness. But I I I feel like I hit that. I feel like I'm my my wife and I were talking about this last night. I feel like I'm in a better mental state of, like, less anxiety than I've had relative to, you know, five or ten years ago, which is great.

what they're implicitly saying is it's not worth chasing. I think it absolutely is worth chasing, but it's not gonna give you happiness per se. It's gonna give you contentment and reduction of anxiety, which is wonderful. It's a massive increase in the quality of your life. But in my definition, it's not necessarily happiness. But I I I feel like I hit that. I feel like I'm my my wife and I were talking about this last night. I feel like I'm in a better mental state of, like, less anxiety than I've had relative to, you know, five or ten years ago, which is great.

19:42

You know, you wrote the psychology of money.

You know, you wrote the psychology of money.

19:45

You've studied this a lot. I wanna ask you, what are what are the most What are the biggest or maybe the most common leak?

You've studied this a lot. I wanna ask you, what are what are the most What are the biggest or maybe the most common leak?

19:52

Instead of, most common, I would say the most impactful

Instead of, most common, I would say the most impactful

19:57

psychological leak, meaning a way of a a psychological trap or mistake people make around money. And I want you to answer it for somebody who is kind of on the come up to somebody who isn't totally financially dependent yet. And then

psychological leak, meaning a way of a a psychological trap or mistake people make around money. And I want you to answer it for somebody who is kind of on the come up to somebody who isn't totally financially dependent yet. And then

20:10

for rich people who still have a bunch of weird psychology and real weird relationship with money. Want you to tell me what you've seen or what you believe is kinda maybe the biggest,

for rich people who still have a bunch of weird psychology and real weird relationship with money. Want you to tell me what you've seen or what you believe is kinda maybe the biggest,

20:19

psychological mistake people have around money in each of those buckets. I think there's there's two. I'll start with one that's probably the biggest, which is social comparison,

psychological mistake people have around money in each of those buckets. I think there's there's two. I'll start with one that's probably the biggest, which is social comparison,

20:27

which is always Sean, you just mentioned, you know, you wanna be a guy. You should be a guy with a hundred million dollars. I'm willing to bet you told seventeen year old Sean that figure, you would faint.

which is always Sean, you just mentioned, you know, you wanna be a guy. You should be a guy with a hundred million dollars. I'm willing to bet you told seventeen year old Sean that figure, you would faint.

20:36

But it doesn't seem that ridiculous to you now because I bet you know people who are worth a hundred million dollars. And so who you compared yourself to in your seventeen or twenty five is different now. And I think there's no end to that. If and I hope you are worth a hundred million dollars someday, guarantee you, you're gonna start comparing yourself to people who are with two hundred, five hundred a billion. And that never ends. Never ever ends. The point I always make is, like, the the minimum wage in,

But it doesn't seem that ridiculous to you now because I bet you know people who are worth a hundred million dollars. And so who you compared yourself to in your seventeen or twenty five is different now. And I think there's no end to that. If and I hope you are worth a hundred million dollars someday, guarantee you, you're gonna start comparing yourself to people who are with two hundred, five hundred a billion. And that never ends. Never ever ends. The point I always make is, like, the the minimum wage in,

20:59

in the MLB is, like, five hundred thousand a year. Whatever it is, four hundred, what whatever it is.

in the MLB is, like, five hundred thousand a year. Whatever it is, four hundred, what whatever it is.

21:04

A shitload of money by any definition if you're making half a million dollars a year. And I guarantee you there's not a single minimum wage professional baseball player who thinks they're doing well, because they're comparing themselves to their teammates. We're making ten million a year. And so there's no end to that. But you always think there is, which is why I, for myself,

A shitload of money by any definition if you're making half a million dollars a year. And I guarantee you there's not a single minimum wage professional baseball player who thinks they're doing well, because they're comparing themselves to their teammates. We're making ten million a year. And so there's no end to that. But you always think there is, which is why I, for myself,

21:20

had this idea once my net worth is x, I'm never gonna work ever again. But once now that I'm here, maybe it is because I'm comparing myself to other people, other authors. Maybe that's at least part of it. So I think even if I can write these philosophies,

had this idea once my net worth is x, I'm never gonna work ever again. But once now that I'm here, maybe it is because I'm comparing myself to other people, other authors. Maybe that's at least part of it. So I think even if I can write these philosophies,

21:33

and made a living talking about these. Like, I'm so susceptible to that as as anyone else. I think everybody is. So I think it's such a natural thing. I mean, In all of evolution, what matters is not how much success you have. It matters that you have more success than the other person. Because in a competition for resources, that's all that matters. Doesn't matter if you're worth a billion dollars. If somebody else is worth a billion in one, they have more resources than you. And from the evolutionary perspective, they're gonna win and you're gonna lose. So that, like, always chasing no matter how much you have is is a big psychological underpinning to people's anxiety.

and made a living talking about these. Like, I'm so susceptible to that as as anyone else. I think everybody is. So I think it's such a natural thing. I mean, In all of evolution, what matters is not how much success you have. It matters that you have more success than the other person. Because in a competition for resources, that's all that matters. Doesn't matter if you're worth a billion dollars. If somebody else is worth a billion in one, they have more resources than you. And from the evolutionary perspective, they're gonna win and you're gonna lose. So that, like, always chasing no matter how much you have is is a big psychological underpinning to people's anxiety.

22:03

The second that I would mention, that's that's probably equally as important. Is realizing that there is not one right answer for everybody. And everyone in finance is always thinking is seeking the right answer. Like, quote unquote, the right it doesn't exist. I think it's much closer to, like, your taste in music. I'm, like, there's no such thing as the best music. You like this. I like that to each their own. And a lot of times when you have a financial debate of people, like, I can't believe you manage your money like that. Why don't you do it like me? You're not actually debating. People with a different risk tolerance, different social aspirations, different family dynamics

The second that I would mention, that's that's probably equally as important. Is realizing that there is not one right answer for everybody. And everyone in finance is always thinking is seeking the right answer. Like, quote unquote, the right it doesn't exist. I think it's much closer to, like, your taste in music. I'm, like, there's no such thing as the best music. You like this. I like that to each their own. And a lot of times when you have a financial debate of people, like, I can't believe you manage your money like that. Why don't you do it like me? You're not actually debating. People with a different risk tolerance, different social aspirations, different family dynamics

22:36

who are talking over each other. And I think it's, like, it's hard for people to come to terms of, like, Look, if that works for you, this works for me, to each our own, people don't wanna settle on that because it's easier to think that there should be a right answer like there is in math.

who are talking over each other. And I think it's, like, it's hard for people to come to terms of, like, Look, if that works for you, this works for me, to each our own, people don't wanna settle on that because it's easier to think that there should be a right answer like there is in math.

22:50

You, you had this quote. I think it was from the book, but it could have been from a blog post he wrote where he said the biggest risk in important news story of the next ten years will be something Nobody is talking about today. And but you're in this weird position where you work at a VC where you actually do have to predict the future a bit or at least you're around people who are trying to predict the future. What do you think are there any trends or topics today that you think in ten years are gonna be a lot more common and popular?

You, you had this quote. I think it was from the book, but it could have been from a blog post he wrote where he said the biggest risk in important news story of the next ten years will be something Nobody is talking about today. And but you're in this weird position where you work at a VC where you actually do have to predict the future a bit or at least you're around people who are trying to predict the future. What do you think are there any trends or topics today that you think in ten years are gonna be a lot more common and popular?

23:16

Well, the good the the good news for me is that since I'm not involved in the the deal side of the VC that it doesn't really rest on my shoulders to make those predictions

Well, the good the the good news for me is that since I'm not involved in the the deal side of the VC that it doesn't really rest on my shoulders to make those predictions

23:23

of the risks that we know of which is, like, obviously very distinct from the surprises that are gonna be more important. But of the risks that we know of, I've I've been saying for years that the biggest

of the risks that we know of which is, like, obviously very distinct from the surprises that are gonna be more important. But of the risks that we know of, I've I've been saying for years that the biggest

23:33

by far in the global economy is is demographics. The terrible demographics that almost the entire

by far in the global economy is is demographics. The terrible demographics that almost the entire

23:39

industrialized world has. Outside of India and Africa, almost the entire world is shrinking population wise. And the biggest economies,

industrialized world has. Outside of India and Africa, almost the entire world is shrinking population wise. And the biggest economies,

23:47

China, Japan,

China, Japan,

23:49

all of Europe,

all of Europe,

23:50

are are shrinking very, very fast. China's working age population,

are are shrinking very, very fast. China's working age population,

23:54

age sixteen to sixty four will decline by two hundred billion people between now and twenty

age sixteen to sixty four will decline by two hundred billion people between now and twenty

23:58

fifty. It's just, like, there's no precedent outside of, like, the Black Death plague. There's no precedent for that in all of human history. It's always been the case that economic growth was driven by fact that there was massive population,

fifty. It's just, like, there's no precedent outside of, like, the Black Death plague. There's no precedent for that in all of human history. It's always been the case that economic growth was driven by fact that there was massive population,

24:10

growth. And we just don't have it anymore. And in the United States, we have about the best demographics

growth. And we just don't have it anymore. And in the United States, we have about the best demographics

24:15

relative to our peers, but it's still way less than we've had for the last hundred years. And all economic growth is either population growth or productivity growth. All economic growth comes from those two things. And so when you take half of the equation of economic growth, and for the last hundred years, it's been really good. And now it's at best pour, if not a headwind. It's a very different world, totally different world. And maybe, like, the takeaway from that is It used to be that four percent economic growth was like, oh, good. You're running at full capacity. Now maybe it's two percent just because we've taken away so much of that. So of the of the things that we know are gonna be a risk, that's probably the most prominent.

relative to our peers, but it's still way less than we've had for the last hundred years. And all economic growth is either population growth or productivity growth. All economic growth comes from those two things. And so when you take half of the equation of economic growth, and for the last hundred years, it's been really good. And now it's at best pour, if not a headwind. It's a very different world, totally different world. And maybe, like, the takeaway from that is It used to be that four percent economic growth was like, oh, good. You're running at full capacity. Now maybe it's two percent just because we've taken away so much of that. So of the of the things that we know are gonna be a risk, that's probably the most prominent.

24:52

Can you explain that one a little more? I've heard Elon talk about this too that, like,

Can you explain that one a little more? I've heard Elon talk about this too that, like,

24:56

you know, the big risk is that we're not having enough babies. And at first, I thought he was just saying it to cover his ass because he was like, you know, knocking everyone up. But then I was no. No. He's serious about this. He actually

you know, the big risk is that we're not having enough babies. And at first, I thought he was just saying it to cover his ass because he was like, you know, knocking everyone up. But then I was no. No. He's serious about this. He actually

25:05

believes this to be true. But I don't fully get it. I'm maybe just kinda dumb about this. So maybe just explain, like, I'm a I'm a five year old. So

believes this to be true. But I don't fully get it. I'm maybe just kinda dumb about this. So maybe just explain, like, I'm a I'm a five year old. So

25:14

if economic growth goes down, but the population shrinks, is it kind of like isn't there kind of like a per capita type of thing where it's like Yes. What's the big deal? Like, why did why is that disastrous

if economic growth goes down, but the population shrinks, is it kind of like isn't there kind of like a per capita type of thing where it's like Yes. What's the big deal? Like, why did why is that disastrous

25:23

if, if economic productivity was slowed down, if there's also less less people to share, you know, the pie shrinks, but there's less people eating pie.

if, if economic productivity was slowed down, if there's also less less people to share, you know, the pie shrinks, but there's less people eating pie.

25:31

Does that matter or is that the wrong way to think about it? Why is it so bad? It's it's not the wrong way to think about it because you could look at Japan for the last thirty years, which Japan for the last thirty years has had abysmal demographics, but I think it's safe to say that by and large, it's been a fairly pleasant place to live. It has not led to economic collapse. But their their their their version of an index has been shit. Yeah? From a money perspective? Yes. That's a slightly different topic because the reason it's been shit because it was so preposterously

Does that matter or is that the wrong way to think about it? Why is it so bad? It's it's not the wrong way to think about it because you could look at Japan for the last thirty years, which Japan for the last thirty years has had abysmal demographics, but I think it's safe to say that by and large, it's been a fairly pleasant place to live. It has not led to economic collapse. But their their their their version of an index has been shit. Yeah? From a money perspective? Yes. That's a slightly different topic because the reason it's been shit because it was so preposterously

25:56

overvalued in nineteen ninety. Got it. So that's, like, the two two separate different stories. But by and large, it has not led to economic collapse. The one thing that I would say though is, like, what it does lead to is when you don't have a growing economy, you have much less investment. You're not investing in new businesses, new homes, new factories because you don't need them. You're fine with what you have. Whenever you have less investment, you have less innovation. And so in those situations,

overvalued in nineteen ninety. Got it. So that's, like, the two two separate different stories. But by and large, it has not led to economic collapse. The one thing that I would say though is, like, what it does lead to is when you don't have a growing economy, you have much less investment. You're not investing in new businesses, new homes, new factories because you don't need them. You're fine with what you have. Whenever you have less investment, you have less innovation. And so in those situations,

26:19

Like, when was the last incredible tech company to come out of Japan?

Like, when was the last incredible tech company to come out of Japan?

26:23

I I I'm sure I'm sure one or two exist, but I can't name it off the top of my head. Versus if you if if you and I were talking in nineteen ninety and we said, what was the last tech company, we'd be like, oh my gosh, Sony, Toshiba, going like Mitsubishi going down the list. They're everywhere. Because when Japan had a booming population, it was investment up the yin yang of, like, new technologies.

I I I'm sure I'm sure one or two exist, but I can't name it off the top of my head. Versus if you if if you and I were talking in nineteen ninety and we said, what was the last tech company, we'd be like, oh my gosh, Sony, Toshiba, going like Mitsubishi going down the list. They're everywhere. Because when Japan had a booming population, it was investment up the yin yang of, like, new technologies.

26:41

And so when you once you remove that, the equation. You can still have a pleasant society that's in some form of stasis, but you're not gonna have growth,

And so when you once you remove that, the equation. You can still have a pleasant society that's in some form of stasis, but you're not gonna have growth,

26:48

not just economic growth, but technology growth, medical technology growth, like, all the things that we associate with, like, a better life kinda grows out the window. So maybe it is the case that for a lot of the developed world over the next fifty years, it's still a pleasant place to live, but the idea of, like, every generation is gonna thirty percent better than their parents. Like, that idea might kinda go out the window.

not just economic growth, but technology growth, medical technology growth, like, all the things that we associate with, like, a better life kinda grows out the window. So maybe it is the case that for a lot of the developed world over the next fifty years, it's still a pleasant place to live, but the idea of, like, every generation is gonna thirty percent better than their parents. Like, that idea might kinda go out the window.

27:10

Sam, just ask you about, like, trends or prediction. Like, what what what is come in the future, but actually your your new book is

Sam, just ask you about, like, trends or prediction. Like, what what what is come in the future, but actually your your new book is

27:17

actually about the opposite. It's about what's not gonna change. Same as ever. Right? So Yeah. You explain the premise of the book? I like the Buffet story that you kinda lead with, maybe start with that one, but,

actually about the opposite. It's about what's not gonna change. Same as ever. Right? So Yeah. You explain the premise of the book? I like the Buffet story that you kinda lead with, maybe start with that one, but,

27:27

give us the the teaser of, like, what are some of the the

give us the the teaser of, like, what are some of the the

27:32

like, I buy the premise that some things don't change.

like, I buy the premise that some things don't change.

27:35

What are some of the big silhouettes that come out of that? But, start with the Buff story. Yeah. So I had lunch last summer, and he was two summers ago with a guy who's very close friends with Warren Buffett. And, this guy was driving around with Buffett in two thousand nine. In Buffett's car in Omaha. They're just driving around town together. In two thousand nine, the economy was a wreck, and there was, like, businesses boarded up, and it was, like, the economic apocalypse,

What are some of the big silhouettes that come out of that? But, start with the Buff story. Yeah. So I had lunch last summer, and he was two summers ago with a guy who's very close friends with Warren Buffett. And, this guy was driving around with Buffett in two thousand nine. In Buffett's car in Omaha. They're just driving around town together. In two thousand nine, the economy was a wreck, and there was, like, businesses boarded up, and it was, like, the economic apocalypse,

27:56

And this guy says Warren, like, how do we ever recover from this? Like, how how's the world ever gonna be the same? And Warren said, do you know what the best selling candy bar was in nineteen sixty two? You guys said no. Warren Buffett Warren says snickers. And Buffet says, you know what the best selling candy bar is today?

And this guy says Warren, like, how do we ever recover from this? Like, how how's the world ever gonna be the same? And Warren said, do you know what the best selling candy bar was in nineteen sixty two? You guys said no. Warren Buffett Warren says snickers. And Buffet says, you know what the best selling candy bar is today?

28:10

You guys says no. It says snickers.

You guys says no. It says snickers.

28:12

And that's that's the end of the story. The premise being like, don't worry about, like, how are we gonna change? Like, find something that does not change and bet on that. And I've also thought, I've been a a financial writer for seventeen years, and it's always bothered me how bad the whole industry is it predicting.

And that's that's the end of the story. The premise being like, don't worry about, like, how are we gonna change? Like, find something that does not change and bet on that. And I've also thought, I've been a a financial writer for seventeen years, and it's always bothered me how bad the whole industry is it predicting.

28:28

The next bear market, the next recession, the next pandemic, the next technology, nobody's any good at it. That's, like, a little bit too harsh, but that's that's directionally true. Nobody's any good at it. And so there's two things you could do with that. One, you could become

The next bear market, the next recession, the next pandemic, the next technology, nobody's any good at it. That's, like, a little bit too harsh, but that's that's directionally true. Nobody's any good at it. And so there's two things you could do with that. One, you could become

28:41

more of a cynic and just say nobody knows anything, don't even try. Or kind of the buffet approach of, like, find something that is never gonna change and put your weight on that. And so

more of a cynic and just say nobody knows anything, don't even try. Or kind of the buffet approach of, like, find something that is never gonna change and put your weight on that. And so

28:52

that was one observation. The other was, as a student of history,

that was one observation. The other was, as a student of history,

28:55

realizing

realizing

28:57

when you're reading about the economy from a hundred years ago or a five hundred years ago or a thousand years ago,

when you're reading about the economy from a hundred years ago or a five hundred years ago or a thousand years ago,

29:03

There's some things that you read about, and you're like, oh, things were very different back then. But there are even more things that you can read that make you stop and think that's exactly how it is today. The way that people responded to greed and fear and risk and uncertainty

There's some things that you read about, and you're like, oh, things were very different back then. But there are even more things that you can read that make you stop and think that's exactly how it is today. The way that people responded to greed and fear and risk and uncertainty

29:16

is the exact same today as it was a hundred years ago. And so putting those two things together, if you can find things

is the exact same today as it was a hundred years ago. And so putting those two things together, if you can find things

29:23

of human behavior that are never gonna change, then you know something that is gonna be part of your future. So stop pretending that you know when the next recession is gonna happen, but study how people respond to recessions when they do happen because that's never changed. So it's gonna be part of our future. And so that's kind of the premise of the book. It's just a bunch of little stories of things that facets of human behavior that have always been with us, and I think always will be. And you like, regardless of what is gonna happen in our future, you know that these little bits of behavior are going to be a part of it.

of human behavior that are never gonna change, then you know something that is gonna be part of your future. So stop pretending that you know when the next recession is gonna happen, but study how people respond to recessions when they do happen because that's never changed. So it's gonna be part of our future. And so that's kind of the premise of the book. It's just a bunch of little stories of things that facets of human behavior that have always been with us, and I think always will be. And you like, regardless of what is gonna happen in our future, you know that these little bits of behavior are going to be a part of it.

29:52

And so what's something where when you studied how people, let's say, respond to greed or fear or change or whatever, and you looked at these patterns of human behavior What's something that you

And so what's something where when you studied how people, let's say, respond to greed or fear or change or whatever, and you looked at these patterns of human behavior What's something that you

30:03

like,

like,

30:04

the best

the best

30:05

research or books or insights that I get, I'm like, oh, I feel like I have a superpower. Like, I, you know, like, almost like I could read people's minds now. Right? So it sounds like by studying

research or books or insights that I get, I'm like, oh, I feel like I have a superpower. Like, I, you know, like, almost like I could read people's minds now. Right? So it sounds like by studying

30:14

what doesn't change or how how human behavior works, Did you come out with anything that you're like? Did you change anything that you do or did you have a new strategy or a new plan or any new, like,

what doesn't change or how how human behavior works, Did you come out with anything that you're like? Did you change anything that you do or did you have a new strategy or a new plan or any new, like,

30:25

could you action that? Because I I, you know, I guess my my skeptical view would be, I feel like I could understand how people behaved in the past.

could you action that? Because I I, you know, I guess my my skeptical view would be, I feel like I could understand how people behaved in the past.

30:34

But attaching that to what the hell am I supposed to do today is is not so easy of a leap. What's one that you made do yourself doing this? I know this is an answer that people will find inadequate, but to me, it's incredibly

But attaching that to what the hell am I supposed to do today is is not so easy of a leap. What's one that you made do yourself doing this? I know this is an answer that people will find inadequate, but to me, it's incredibly

30:45

powerful and important.

powerful and important.

30:46

And I think the main plea in the book is for humility. It's not even about the the examples that of things that are never gonna change, that's obviously the core of the book. But the reason we're doing that is because we have humility and not fooling ourselves to thinking that we know what's gonna change.

And I think the main plea in the book is for humility. It's not even about the the examples that of things that are never gonna change, that's obviously the core of the book. But the reason we're doing that is because we have humility and not fooling ourselves to thinking that we know what's gonna change.

31:02

What are the three biggest economic stories of our adult lives?

What are the three biggest economic stories of our adult lives?

31:06

By far, by an order of magnitude, it's September eleventh, Leeman Brothers collapsing and COVID. But by an order of magnitude, nothing else matters more than those three things. And the common denominator is nobody saw them coming.

By far, by an order of magnitude, it's September eleventh, Leeman Brothers collapsing and COVID. But by an order of magnitude, nothing else matters more than those three things. And the common denominator is nobody saw them coming.

31:18

They're not in any economic outlook. No analyst forecast. Unless you were had inside information, you were part of those things. Nobody saw them coming. And it's always been like that because you can go back another generation, and it was Pearl Harbor, collapse of the Soviet Union, all these things that even if in hindsight, you're like you you should have seen those coming, great depression, of course. The fact is that very few people did, if anybody, and something like Pearl Harbor, you could not have seen it coming. But think about how that changed

They're not in any economic outlook. No analyst forecast. Unless you were had inside information, you were part of those things. Nobody saw them coming. And it's always been like that because you can go back another generation, and it was Pearl Harbor, collapse of the Soviet Union, all these things that even if in hindsight, you're like you you should have seen those coming, great depression, of course. The fact is that very few people did, if anybody, and something like Pearl Harbor, you could not have seen it coming. But think about how that changed

31:45

the entire fabric of society, not just the economy, but everything. And going forward, it will be like that too. You can stay with so much certainty.

the entire fabric of society, not just the economy, but everything. And going forward, it will be like that too. You can stay with so much certainty.

31:52

That the biggest economic story of our lifetimes in the future,

That the biggest economic story of our lifetimes in the future,

31:56

or or even the next twelve months is something that you and I are not talking about today. I mean, what what's the biggest global news story of twenty twenty three? It's just this is subjective, but I would say it's Israel Hamas.

or or even the next twelve months is something that you and I are not talking about today. I mean, what what's the biggest global news story of twenty twenty three? It's just this is subjective, but I would say it's Israel Hamas.

32:07

Which is something that even if you were an expert in Middle East politics, you did not see coming on October sixth

Which is something that even if you were an expert in Middle East politics, you did not see coming on October sixth

32:14

to let alone people like us, So that's and I think it's it's always been like that. It'll be like that next year. And the reason that we that view, like, we we tend to ignore that is because I think coming to terms with it is too painful. Come to terms with the idea and admitting to yourself that we don't know what's gonna happen next is a really uncomfortable level of uncertainty. It's much easier and more comfortable to to say to pretend that we do. Which is why the market for punditry

to let alone people like us, So that's and I think it's it's always been like that. It'll be like that next year. And the reason that we that view, like, we we tend to ignore that is because I think coming to terms with it is too painful. Come to terms with the idea and admitting to yourself that we don't know what's gonna happen next is a really uncomfortable level of uncertainty. It's much easier and more comfortable to to say to pretend that we do. Which is why the market for punditry

32:38

is always gonna exist no matter how poor the results are. And so that I I think that's the biggest actionable takeaway for me.

is always gonna exist no matter how poor the results are. And so that I I think that's the biggest actionable takeaway for me.

32:45

Is

Is

32:46

I I I don't forecast. I I think I think it's much healthier to read more history and fewer forecasts. And when you read history, you start focusing on the indelible

I I I don't forecast. I I think I think it's much healthier to read more history and fewer forecasts. And when you read history, you start focusing on the indelible

32:55

years that never change, and you become more humble in your ability to fool yourself into thinking that we do know is what what what is gonna change. Morgan, I know you gotta leave. You have a hard stop in two minutes. So let me I wanna ask a a very takeaway

years that never change, and you become more humble in your ability to fool yourself into thinking that we do know is what what what is gonna change. Morgan, I know you gotta leave. You have a hard stop in two minutes. So let me I wanna ask a a very takeaway

33:08

or, an actionable

or, an actionable

33:10

question, which is

question, which is

33:12

what two or three or four, however many you want history books, can I go and read over the next month that do the best job of me not not a book like yours that aggregates a bunch of them, but literally a specific era or a specific book that I can go and read that does a good job of of

what two or three or four, however many you want history books, can I go and read over the next month that do the best job of me not not a book like yours that aggregates a bunch of them, but literally a specific era or a specific book that I can go and read that does a good job of of

33:28

showing this where I'll read it and I'll be like, oh, this is exactly what I'm experiencing now, or things won't change?

showing this where I'll read it and I'll be like, oh, this is exactly what I'm experiencing now, or things won't change?

33:34

I think one of the best World War two books because it's not only a book about the military operations, but also the human element on the ground. Is Eric Larson's book the Splendid in the vial. Which is a pretty recent book. I think came out four years ago, and it's about the London blitz bombing in World War two. Eric Larson, I think, is the greatest living storyteller.

I think one of the best World War two books because it's not only a book about the military operations, but also the human element on the ground. Is Eric Larson's book the Splendid in the vial. Which is a pretty recent book. I think came out four years ago, and it's about the London blitz bombing in World War two. Eric Larson, I think, is the greatest living storyteller.

33:53

Period. And and he's he's so good. His book on a lusitania is wonderful.

Period. And and he's he's so good. His book on a lusitania is wonderful.

33:57

It's absolutely epic. So his so that book is is is incredible. Doris Kearns Goodwin's book no ordinary time, which is about how FDR managed World War two. It's not about the war itself. It's about how he managed the politics and the emotions of it is absolutely stunning. I also use that book as an example of I think the book is seven hundred pages, and every single word needs to be there. There's not a single wasted word in the seven hundred pages. She's just like such an extraordinary writer. Those are two that really stick out as like some of the best. And you're doing an excellent job of giving into the stereotype

It's absolutely epic. So his so that book is is is incredible. Doris Kearns Goodwin's book no ordinary time, which is about how FDR managed World War two. It's not about the war itself. It's about how he managed the politics and the emotions of it is absolutely stunning. I also use that book as an example of I think the book is seven hundred pages, and every single word needs to be there. There's not a single wasted word in the seven hundred pages. She's just like such an extraordinary writer. Those are two that really stick out as like some of the best. And you're doing an excellent job of giving into the stereotype

34:29

of thirty or forty something year old white guys obsessing over World War two. This is what we're supposed to do. Yeah. Everyone talks about the Roman Empire. Fuck the Roman empire. World War two. That's where it's at, man.

of thirty or forty something year old white guys obsessing over World War two. This is what we're supposed to do. Yeah. Everyone talks about the Roman Empire. Fuck the Roman empire. World War two. That's where it's at, man.

34:41

It's it's so true. I I can't get enough of it. I will say the last thing I say because I do have to jump. I I I think the reason World War two is so interesting is because

It's it's so true. I I can't get enough of it. I will say the last thing I say because I do have to jump. I I I think the reason World War two is so interesting is because

34:49

it was the most documented major event. And therefore, like, the emotion the emotions on either end of the spectrum from despair to elation are

it was the most documented major event. And therefore, like, the emotion the emotions on either end of the spectrum from despair to elation are

34:59

there's more documented examples of that during that six year period than have ever existed in all of human history. It's not just understanding the military and the politics. It's like if you wanna understand human emotions, there's no better

there's more documented examples of that during that six year period than have ever existed in all of human history. It's not just understanding the military and the politics. It's like if you wanna understand human emotions, there's no better

35:09

spotlight or magnifying glass than studying world war two.

spotlight or magnifying glass than studying world war two.

35:13

Well, we appreciate you coming on, man. This is awesome.

Well, we appreciate you coming on, man. This is awesome.

35:16

We're big fans of your first book. I I know I'm in the middle of reading the second one same as ever. And,

We're big fans of your first book. I I know I'm in the middle of reading the second one same as ever. And,

35:21

You're badass. We appreciate you doing this. Thanks, guys. This has been fun. Thanks, Morgan. Alright.

You're badass. We appreciate you doing this. Thanks, guys. This has been fun. Thanks, Morgan. Alright.

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