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The following podcast is a dear media production.
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She s a lifestyle blogger extraordinaire.
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Fantastic.
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And he s a serial entrepreneur, a very smart cookie.
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And now Lauren Everts and Michael Bostic are bringing you along for the ride.
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Get ready for some major realness.
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Welcome to the skinny confidential him and her.
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Which life would you rather have?
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You can make $10 million a year, live in a mansion, have a private jet, have a Lamborghini, but your spouse hates you, your kids hate you, nobody respects you, or you can make $100,000 a year, live in a modest house, drive a modest car, and your spouse adores you, your kids admire you, the community loves you.
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Some people would take the former, but I think the majority of people would be like, oh, when you frame it like that, it s clear what actually matters, what s actually gonna make you happy in life.
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is your family, your health, being part of your community, not how big your house was, not how much horsepower your car has.
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And you really see that starkly when you go out and buy the big house, go out and buy the fancy car, and you wake up the next morning, you re like, I feel the same.
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Nothing really changed.
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Hello, everybody.
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Welcome back to the Skinny Confidential, him and her show.
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Today, we have a phenomenal guest, somebody that I have been wanting on this show for years now, and that is New York Times bestselling author Morgan Housel.
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Many of you may be familiar with Morgan s work.
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He wrote The Psychology of Money, which is one of my favorite personal finance and psychology books.
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He also just wrote a new book that s incredible called Same as Ever that I ve been referencing on this show for a while now.
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Morgan joins us for a conversation on personal finance.
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I know many of you have been asking for an episode on personal finance for a long time.
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This one is right up your alley.
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It covers so many topics around personal finance, the psychology around it.
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Anybody that wants to be better with money and how to think about money, this one s for you.
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And we also talk about his new book, Same as Ever, which is incredible as well.
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So many of us are focused on the next trend or the next thing that s coming, but this book talks about what stays consistent and how we can also plan our lives around what is not going to change.
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It s really an awesome counter thought process to what you typically hear in today s day and age.
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So this episode is for anyone that wants to think better.
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It s anyone who wants to manage their finances better.
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It s anyone who wants to be less stressed about money, which I hope is everybody.
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Everybody who feels overwhelmed by thinking about money, but doesn t want to feel overwhelmed anymore.
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Anyone who wants to tackle the topic of personal finance without feeling overwhelmed and without having
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a bunch of drivel with words you can t understand.
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This is a very digestible, applicable episode to anyone at any stage of their financial life.
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With that, the great Morgan Housel, welcome to the Skinny Confidential, him and her show.
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This is the Skinny Confidential, him and her.
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I have been, first of all, we re just jumping into this.
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I have been a fan of yours for a long time.
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Maybe even when you, did you used to write for the Wall Street Journal?
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Yep.
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Okay.
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So maybe even then, but when I found your book, The Psychology of Money, I recommended it so many times.
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I think anybody that s thinking about getting into personal finance, of course you could read all the main ones that have been around for a hundred years and you get it.
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But I think the biggest thing that your book did for me personally and what I try to tell other people is it teaches you
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a lot about how you think about money and a lot about how you feel about it.
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And I don t think one, you re really ever taught that in school.
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I mean, in terms of personal finance, we re really not taught a lot, but in terms of thinking about how to feel about finance, basically nothing.
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And so what it did for me was
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It created a lot of calm in my life when I think about personal finances.
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And I think it ll do the same for a lot of people if you guys haven t checked out Morgan s book.
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So Morgan, welcome to the show.
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Thank you for doing this.
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Well, thanks so much for having me.
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And that s great to hear.
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And I feel great to hear that.
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And I think we should just end the podcast right there.
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Let s just end on a high note right there.
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Thank you everybody for listening.
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Morgan is now.
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No.
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Okay.
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To start, for people that may be unfamiliar, we re going to dive into a lot of stuff here.
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How did you get involved with writing about personal finance and how did you become interested in the first place?
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Maybe just a little background.
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Yeah.
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All throughout college, I wanted to work on Wall Street.
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I wanted to be an investment banker.
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I wanted to work at Goldman Sachs, be a big, high-powered hedge fund manager.
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Back in the early mid-2000s, pretty much
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It was so common for young males in college to want to do that.
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Finance was like the center of power.
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And when you re 19 or 21 years old, that s the most appealing.
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So I fell for that trap and that s all I wanted to do.
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I graduated college in 2008, which was a terrible time to graduate and want to work in finance because that was the financial crisis.
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Lehman Brothers went bankrupt.
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The economy s a mess.
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Everybody s laying people off.
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So nobody was hiring someone with a finance degree.
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And it was a terrible time.
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And so kind of just by pure accident, just pure serendipity, I stumbled into a job as a writer at The Motley Fool, which is a finance company that writes about the stock market.
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I had no interest in writing.
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I never wanted to be a writer.
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I honestly viewed it as like an embarrassing step down.
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Like, I m a writer now?
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I m a blogger?
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Back when blogging was like not a cool thing to do, it was like, oh, you don t actually have a job.
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But I took the job just because I needed it.
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I needed a paycheck.
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I needed to make my rent.
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And so I took the job thinking I ll be a finance writer writing about the stock market.
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I ll do it for a couple of months until I find a real job on Wall Street.
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I ended up falling in love with it.
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Never in a million years would I have thought I would do that.
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It was never part of the plan.
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But I loved the fact that I was an outsider.
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I m not a financial advisor.
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I m not a portfolio manager.
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I m not an economist.
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I m just a guy on the outside observing what s going on and trying to figure out what people are doing with their money and how they re thinking about money.
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And then if I can tell a story about it, that s more interesting than the things that you typically read about finance, which is very like math, formula, charts, and data.
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If I can just tell a story about how people think, that s actually an interesting way that s fulfilling for me and hopefully helpful for other people to teach them about money.
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This is why I was excited to have Morgan on because I think whenever I say finance to her, I say like, let s talk about our finances.
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So many people that aren t interested in personal finance, their eyes glaze over like, oh, here we go, here comes the spreadsheet.
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It s like chemistry, trigonometry is how they view it.
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But the truth is like, this is a big problem with how finance is taught.
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It s taught like it s a math-based field.
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Like if you just have the numbers and the formula, you get the right answer.
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And that s not what finance is at all.
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People don t make decisions in a spreadsheet.
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They make them at the dinner table.
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when it s like all these emotions and hormones and like social aspirations all collide together.
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And then you re making a decision with your money.
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And it s everything from like, how are we going to retire to who do we want to be today socially?
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Where do we want to live?
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How do we want to dress?
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What kind of car do we want to drive?
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That s all like social aspiration.
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And finance is really at the core of that.
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So it is kind of unfortunate.
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I think there s two topics that apply to everybody, regardless of whether you like them or not, which is health and money.
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It doesn t matter if you re not interested in those topics, those topics are interested in you.
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And they re going to impact your life whether you like it or not.
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And since finance is so boring to so many people, they ignore it.
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They sweep it under the rug.
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And those are the people for whom it s going to impact their life the most.
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When you say you observe people with money, did you actually study human nature?
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Like how does one, did you observe your friends?
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Like what was your research for the book?
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Since I m not a journalist, I m not, I don t have sources.
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I m not out on the street interviewing people.
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It s literally been for the last 17 or 18 years, me sitting at home, reading as much as I can, talking to people once in a while on the phone, friends and whatnot, but it s pretty much 99% of it has been me reading and going for walks and thinking about.
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this topic.
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And I think for anyone, if you devote that much time to a single topic, you ll start to uncover little bits about how people behave.
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So after doing that for 15 years or so, that s where my first book, The Psychology of Money, came from.
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So in your learnings or as you were going through this process, did you find a common denominator as to why people struggle so much with personal finance?
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Is it a lack of education?
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Is it a psychological thing?
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Like what is the main reason or a couple of reasons that you found that people struggle so much with this topic?
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I think since it is not taught in schools, and this is a different topic, but it s very difficult to teach it into schools.
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It s such an important topic that tends to be ignored.
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And then even the people who are thinking about it, the intuition of what people think they should do is the opposite of what they should actually be doing.
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I ll give you a really simple example of this.
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Whenever you have a 17-year-old who opens up a Robinhood account to trade in the stock market, the first thing that they want to do, even if they are smart, educated, top of their class, the first thing they want to do is day trade penny stocks.
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they think that s going to be their key to making money in the stock market.
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If you know anything about the stock market, that s the worst possible
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thing you could do.
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It s the equivalent of like, oh, I m interested in health.
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Let s go eat a bunch of snickered bars.
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That s like, that s what it is.
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But that s their intuition.
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Their knee-jerk reaction is usually the worst thing that you could do.
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So even people who do think about money, and unless you re really digging into it and studying it, most people s like, their nature, their human nature is going to steer them in the wrong direction.
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You have a quote in your book that I think this is relevant for what we re talking about right now.
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It says, financial success is not a hard science.
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It s a soft skill where how you behave is more important than what you know.
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And this is true.
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You can have a PhD in finance from Harvard and know everything.
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You know all the formulas.
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You know all the data.
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But if you don t have control over your sense of greed and fear,
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Or if your spending s out of control, you can t take a long-term mindset.
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If you don t have the right behaviors, none of the education matters.
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None of what you know matters.
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It s the equivalent of if you are a doctor from Harvard and you know everything about medicine, but you re overweight and you smoke and you don t sleep and you re stressed out, none of the education matters if you don t have the right behaviors.
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And it s the same in finance.
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And you can be a complete layperson who knows nothing about finance.
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But if you have the right behaviors, you re going to crush it.
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You re going to accumulate so much money and do so well financially.
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And the opposite s true.
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Like you can be at the PhD from Harvard and if your behavior sucks, none of it matters.
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So in terms of those behaviors, if you could wave Morgan Housel s magic wand and you could give everybody the best behaviors around money that are easy.
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Yeah, wave your wand.
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What would they be?
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I mean, at the very, the highest level, the most simple, basic, but also the most important.
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Spend less than you make, invest the difference and be patient.
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I mean, it s the most basic kindergarten thing you could say, but how many people can actually do that?
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Particularly the first, like spend less than you make and invest the difference.
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Those two, it s so simple.
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You sum it up in two sentences, but what percentage of society can actually do that even if they want to do that and even if they try to do it?
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It s very, very small.
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So saying it is easy.
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What we re actually trying to do is very simple.
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but it s not intuitive for people, and it s harder to get there.
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It s almost the equivalent of being like, oh, if you want to be healthy, eat right and exercise.
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All right, really simple.
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But then you try to do it, and it s actually harder than you think because your body is wired to be like, yeah, I know I should eat right, but Reese s Pieces tastes really good.
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I know I should exercise, but the couch is really nice.
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So even if you know it s so simple what you should do, actually getting there is really difficult for people.
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What are the differences between men and women when it comes to money and the behaviors around money?
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Or are there no differences?
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No, there s definitely differences.
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And it s been documented in studies that women tend to do better financially.
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I think if I had to summarize what it is at the highest level, it s that men are much more likely to be like, I got it.
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I don t need to study.
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I know this.
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I m smart.
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I can do it.
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And women are like, no, we should actually try to learn what this is and figure it out.
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Which is why I think this audience is going to be great for you.
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Yes, so I think men bring just naturally, not all of them, of course, this is generalizing, but naturally bring a little bit more ego to the table because it s embarrassing, particularly for an adult male, particularly for like a husband or a father to say, I don t know anything about finance.
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They want to intuitively think like, no, if I m the provider of this household, I m supposed to know.
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So I m not going to admit that I don t know anything.
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I m going to pretend like I know.
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Women are much more likely to just be aware of what they do and don t know, and then attack it from a more realistic approach.
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You know, it s so funny that you say that because
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I probably didn t learn nearly enough about personal finance until right around my early 30s or like late 20s.
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But before that, I had been running businesses, I had been a CEO, I had companies, but I had no real understanding of how to manage money.
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And if you would have met me at that time, you d be like, man, this guy, I don t want to spend a lot of time with him.
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It was, if $100 came in, let s go spend $200.
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And I m like, oh, and there was no- I feel like you did your midlife crisis at- I had a few midlife crises.
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Better to do it at 23 than 47 with kids.
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I had an event where things got off the rails and the businesses weren t going on and I realized I had done very well from a cash flow perspective for a long time, but then at the end of it I m like, why is there no money?
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There s nothing.
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What the hell happened here?
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And so I knew at that time, I m like, listen,
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I have to educate myself because I realized even, you know, and I went to school and I went to college just like everybody, but I realized like I learned all these things, but I didn t have the skill.
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So the first book I read was, it s like a big dense book, but it was Tony Robbins, Money Master of the Game.
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I m like, it gives you kind of a base understanding.
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And then I read all sorts of personal finance books.
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And I, what really during that exercise taught me was
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Obviously spend more than you re making, but more important, like I learned to look at finance and actually address the issue and face it every single day.
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And I would go in and the accounts, I say, okay, this is what I m doing.
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That s what I m spending.
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That s what I need to put away.
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And I created all these targets.
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I feel so many people, they get so overwhelmed, whether they re in debt or they have these credit card bills or mortgage, whatever.
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And they like their answers.
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I m not going to look at this.
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I m not going to pay.
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I got to just sweep it.
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I don t want to see it because it stresses me out.
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But for me, I found that actually by facing it now, I m completely calm about it.
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Yeah.
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And for me, what I think is so interesting about finance, and thanks for sharing that story, one is it s such a window into people s personalities.
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It s not just the numbers on a spreadsheet and like, oh, let s make a budget and look at the numbers.
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It s so much deeper than that, because even down to like the clothes you re wearing and the car you re driving, that is a social aspiration of like you re trying to show the world that I am this kind of person.
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I m not that kind of person.
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I m this kind of person.
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And so much of it is like what people really want out of life at the highest level is respect and admiration.
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You want people to respect and admire you for being who you are.
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And money is a tool for them to do that.
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So a lot of times when people are driving a really nice car, wearing really nice clothes, really fancy jewelry, the money is a tool for them to show and to express who they want the world to see them as.
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And that is so much deeper than just like, let s make a budget.
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So I think it s the starkest window into who you are as a person.
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And that s why I think once you get into how you think about money and what are your skills, like, are you spending more than you make?
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Are you spending less than you make?
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And like, generally, you tend to see people who are spending less than they make.
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There tend to be people who are much more focused on the internal benchmark of like, I want my spouse and my kids to respect and admire me, but everyone else, I could really care less.
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And people who have a big spending problem, I think if you put them on the therapist s couch and really dig into it, they are desperate for people s attention.
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They re spending more than they make because
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They re spending on clothes and jewelry and cars and homes.
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And the reason they re spending it is because they want other people, strangers, to love them and respect them and admire them.
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So once you dig into money, I think it s like you start pulling on that thread and all these other things about life come out of it.
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What s the common denominator of generations that keep money?
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Like when you look at someone who s done a really good job in history, kept the money in the family, what are they doing?
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From a generational perspective, the one that did it the best, the generation who did it the best, are the ones who grew up during the Great Depression in the 1930s.
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They were so scared out of their minds and had so much scar tissue coming out of that, not just that, but then World War II that followed it in the 1940s, that once that was over and the 1950s began and that generation was like, okay, now we can marry and have kids and go to work, they were terrified.
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They had been so scarred from that.
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And one thing that came out of that, for better or worse, was they saved a lot of money, and they were terrified of debt.
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And so that generation, our grandparents  generation, did pretty well financially.
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They lived below their means.
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By and large, they made a lot less money than we did, just because the economy was smaller and weaker back then.
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So it wasn t that they were richer, but they were much more capable of living within their means.
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The people that we ve interviewed on the podcast that have really hit it big in America, a lot of them come from communist countries, which is really interesting.
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It s like they know.
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Or they re immigrants.
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They re just very grateful.
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So it kind of is in line with the depression era.
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It s like you re so grateful for what you have that you almost, you re smart about keeping it.
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Yeah, we re all just mirrors of what we ve experienced in the past.
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And every single person, me, you, everyone, we re all just products of particularly where, when, and to whom we were born.
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Things that are totally outside of our control.
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So we shouldn t pretend that if you were born in 1850 in Africa, that you d be the same person you are today.
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So much of this is just the dumb luck of what we ve happened to experience.
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And nothing is more persuasive than what you ve experienced firsthand.
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So you and I can read about the Great Depression,
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We can read about communist Russia, whatever it might be, but the people who actually lived through it and have the scar tissue from that are going to think about it in a totally different way than we will.
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Yeah, well, I ll give you the perspective of what I was talking about earlier in my own personal experience.
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When you re a young guy and if you start to do, or girl, you start to do well, and you start to believe, oh, I m always going to do well, this is just something that s going to, this is my new norm, this is my life.
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And then you have a life event that really kind of humbles you and knocks you back down.
2
SPEAKER_02
You re like, oh, wait a minute, maybe I was wrong about that.
2
SPEAKER_01
Yeah.
2
SPEAKER_02
Hopefully you ve learned something and the next time at bat you behave a little bit differently.
2
SPEAKER_02
At least that was the case, but so many people
2
SPEAKER_02
unfortunately don t learn that lesson and they keep repeating the same thing over and over.
2
SPEAKER_02
Where do you think that comes from?
2
SPEAKER_02
People that you ve studied that make it and then lose it and just keep- Yeah.
2
SPEAKER_01
It tends to be, there s a lot of times that people don t learn from their mistakes with finance, that the reason you made a mistake is because you are just wired that way.
2
SPEAKER_01
That s what your DNA is.
2
SPEAKER_01
And even if you say, I ll never do that again, when you re put in the same circumstances in the future, whether it s making more money, whatever it might be, those same emotions, those same flaws are going to come roaring right back.
2
SPEAKER_01
I read this thing a couple weeks ago.
2
SPEAKER_01
This is a weird take, but you ll see where I m going.
2
SPEAKER_01
I read that the statistic that predicts whether you re going to cheat on your spouse the best is how many people you slept with before you got married.
2
SPEAKER_01
That is the best indicator of whether or not you re going to stay faithful or not.
2
SPEAKER_01
The takeaway being like past behavior is the best indication of your future behavior.
2
SPEAKER_01
And I think that s true for a lot of things in life.
2
SPEAKER_01
It s definitely true for the money.
2
SPEAKER_01
And so Charlie Munger, who was, he just passed away.
2
SPEAKER_01
He s one of the most successful investors of all time.
2
SPEAKER_01
He had this saying that I thought was really interesting.
2
SPEAKER_01
He said, when you re teaching financial skills to young people, they either get it instantly or never at all.
2
SPEAKER_01
To me, the takeaway is just being like, a lot of this is nature nurture and it leans towards the nature side.
2
SPEAKER_01
Like some people are wired to get it and some people are not.
2
SPEAKER_01
And I see that a lot.
2
SPEAKER_01
I think for a lot of people, they do very well financially.
2
SPEAKER_01
They re very good at saving, very good at investing.
2
SPEAKER_01
And if you actually dig into it and say, who taught you this?
2
SPEAKER_01
The answer is like, nobody.
2
SPEAKER_01
It just seemed obvious to them.
2
SPEAKER_01
And then there s other people that can go through every financial course imaginable.
2
SPEAKER_01
They try so hard, but at the end of the day, they re compulsive gamblers.
2
SPEAKER_01
And that s where they re going to go.
2
SPEAKER_01
So I think a lot of things in life fall in that direction.
2
SPEAKER_01
To me, the most important thing there is just like, you need to be a good student of yourself.
2
SPEAKER_01
and embrace who you are and make sure that you re setting up some kind of guardrails in your life knowing that you are the kind of person who is either really good with money or really not good with money and don t pretend that you can really change who you are.
2
SPEAKER_01
You need to accept and embrace who you are rather than pretending that either you re gonna learn from your past behavior or that there is just like one right answer to follow without realizing that it s so individualistic between people.
2
SPEAKER_02
Yeah, you know, when I read your book, because I told you I had read those other like, which were a little bit more like textbooks, but then when I read your book, I m like, it s really, I mean, you talk about money, but you re not in there saying like, invest in this index fund and save this way.
2
SPEAKER_02
You re really, what I think people will enjoy about it if they haven t read it, it s really an exercise into learning more about you and why you think the things you think about yourself.
2
SPEAKER_01
Yeah.
2
SPEAKER_02
Right?
2
SPEAKER_02
Like there s this quote in here that you kind of touched on a minute ago, and it says, you might think you want an expensive car, a fancy watch and a huge house, but I m telling you, you don t.
2
SPEAKER_02
What you want is respect and admiration from other people.
2
SPEAKER_02
And you think having expensive stuff will bring it.
2
SPEAKER_02
It almost never does, especially from the people you want respect and admire you.
2
SPEAKER_01
Yeah.
2
SPEAKER_01
I mean, if you had to frame it as which life would you rather have?
2
SPEAKER_01
You can make $10 million a year, live in a mansion, have a private jet, have a Lamborghini, but your spouse hates you, your kids hate you, nobody respects you.
2
SPEAKER_01
Or you can make $100,000 a year, live in a modest house, drive a modest car, and your spouse adores you, your kids admire you, the community loves you.
2
SPEAKER_01
Some people would take the former, but I think the majority of people would be like, oh, when you frame it like that, it s clear what actually matters.
2
SPEAKER_01
And again, like we were talking about this earlier of how much of your spending is just to seek the admiration of strangers who are by and large not even paying attention to you.
2
SPEAKER_01
And this is why a lot of people who make a lot of money and then spend a lot of money, a lot of them will say like, hey, this part was good.
2
SPEAKER_01
This part made my life better.
2
SPEAKER_01
But on the whole,
2
SPEAKER_01
It was kind of meh.
2
SPEAKER_01
It didn t really change that much for me.
2
SPEAKER_01
I think the reason is, is because what s actually going to make you happy in life is your family, your health, like being part of your community, not how big your house was, not how much horsepower your car has.
2
SPEAKER_01
And you really see that starkly when you go out and buy the big house, go out and buy the fancy car, and you wake up the next morning, you re like, I feel the same.
2
SPEAKER_01
Nothing really changed.
2
SPEAKER_00
The best thing about money that I think is that I can buy my time.
2
SPEAKER_00
But to me is like, if I had to like, the reason that I want to make money is for my time.
2
SPEAKER_00
I m obsessed with that.
2
SPEAKER_01
I could not agree with that more.
2
SPEAKER_01
To me, that s what money does.
2
SPEAKER_01
If you re going to use money as a tool for a better life,
2
SPEAKER_01
Forget about the fancy house and the nice car.
2
SPEAKER_01
I mean, get a decent one.
2
SPEAKER_01
But if you can use money to give yourself independence and just be able to wake up every morning and say, because I have savings and wealth, I can do whatever the hell I want today.
2
SPEAKER_01
I can spend my time with whomever I want today.
2
SPEAKER_01
I can work as long as I want.
2
SPEAKER_01
I can quit whenever I want.
2
SPEAKER_01
That freedom will increase your life happiness more than anything else that you could like material that you could buy.
2
SPEAKER_02
Before we jump to that, because I think we should stay on that for a minute, for people that are listening and they re sitting there and say, easy for you guys to say, of course it d be nice to buy my time, but I m sitting here, I have no savings, I m in debt, I m stressed about money.
2
SPEAKER_02
If you were to prescribe, and I know you can t give direct financial advice, but if you were to prescribe them a few things to start getting their financial house in order,
2
SPEAKER_02
What are things that, when people come to you around the dinner table, you re saying, hey, these are things I d really like to see you start doing?
2
SPEAKER_01
I think when we talk about financial independence, we should acknowledge that it s a spectrum.
2
SPEAKER_01
It s not black and white, like, okay, you re either dependent on others or you re purely financial independent billionaire kind of thing.
2
SPEAKER_01
If you are the kind of person, if you have zero dollars,
2
SPEAKER_01
and then you go to $100.
2
SPEAKER_01
That is a level of independence that if you were to lose your job, any kind of buffer that you have in there is going to give you a little bit of independence.
2
SPEAKER_01
If you can increase your savings to $1,000, $5,000, $10,000, now you re at a level where if you got laid off and it takes you a month to find a new job, you re probably going to be okay.
2
SPEAKER_01
That is a level of independence that you didn t have before.
2
SPEAKER_01
So, it all exists on a spectrum.
2
SPEAKER_01
And if you are the mindset that like, why should I even bother saving if it s not going to change my life until I m a millionaire or whatever it would be?
2
SPEAKER_01
I think that s a mindset to get out of your system.
2
SPEAKER_00
I have a lot of friends that have that mindset.
2
SPEAKER_00
They re like, I heard the other day, I ll save when my business starts running.
2
SPEAKER_01
Yeah, yeah.
2
SPEAKER_01
I think that s, I think it s a really dangerous mindset because the less money that you have, the closer to zero you are, the more that you are reliant on other people or reliant on luck.
2
SPEAKER_01
And any amount, like every bit of savings that you have is a piece of your future that you own.
2
SPEAKER_01
It s a time in the future that s yours.
2
SPEAKER_01
And by the way, debt is the opposite.
2
SPEAKER_01
Debt is a piece of your future that somebody else owns a claim to.
2
SPEAKER_01
And so just viewing it like that, literally every dollar that you save is a little bit of time in the future.
2
SPEAKER_01
It s a claim check in the future that s now yours.
2
SPEAKER_01
And I think when you view it like that, a lot of people
2
SPEAKER_01
have a view of why save, what am I saving for?
2
SPEAKER_01
If they re like, I already have a house, I already have a car, why am I saving for?
2
SPEAKER_01
Once you view it as it s a claim check on your future time, every bit that you save is a part of your future that is yours, doesn t belong to anyone else.
2
SPEAKER_01
Then I think a lot of people are like, oh, they can kind of see the clarity of independence coming through.
2
SPEAKER_02
Yeah.
2
SPEAKER_02
I view savings as optionality.
2
SPEAKER_02
Yeah.
2
SPEAKER_02
Meaning I love what I m doing right now, but God forbid, like say I change my mind tomorrow.
2
SPEAKER_02
And I m like, I don t want to do this show and I don t want to run this company.
2
SPEAKER_02
Don t worry, Carson, I m going to run the company.
2
SPEAKER_02
But if that was my perspective, knowing that there s savings now gives me optionality to make that decision and then make the next decision without being so stressed and under the gun.
2
SPEAKER_02
Meaning I wouldn t have to jump and find a job in a month.
2
SPEAKER_02
I wouldn t have a little time to think about, OK, where s the next place I want to land or the next thing I want to do?
2
SPEAKER_02
And so I don t even think it s about looking like, oh, when I m 70 years old, I m going to be able to live in retirement.
2
SPEAKER_02
Maybe I m going to be 40 years old and I m going to want a career change and I don t want to have to make that change in a two month period.
2
SPEAKER_02
Maybe I need a quarter to figure it out.
2
SPEAKER_02
Maybe I need six months.
2
SPEAKER_02
Maybe I need to travel around a little bit to figure that out.
2
SPEAKER_02
So I look at it as optionality and I think peace of mind just to not be so stressed all the time.
2
SPEAKER_02
I feel like you get with financial constraints and especially debt, there s this constant pressure to make immediate decisions.
2
SPEAKER_02
But
3
SPEAKER_01
because you have to, because you got to pay.
3
SPEAKER_02
Yeah, totally.
3
SPEAKER_02
And what s really key to that too, is that people are very bad at predicting who they re going to be in the future.
3
SPEAKER_02
So you ll see a lot of people who say, I love my job.
3
SPEAKER_02
I never want to retire.
3
SPEAKER_02
Well, when you re 62, you might think differently.
3
SPEAKER_02
It s easy to project who you are today into the indefinite future, but everybody changes.
3
SPEAKER_02
And so that s a big part of this.
3
SPEAKER_01
we have a younger sister, my sister-in-law, Mimi.
3
SPEAKER_01
Hi, Mimi.
3
SPEAKER_01
And I literally send her compound interest calculators with savings rates in it every week.
3
SPEAKER_01
I m like, hey, I wish I learned this when I was 22, 23, 24, 25, because compounding, which we can talk about, is a real thing.
3
SPEAKER_01
And look what $100 a month does over 40 years, or look what $1,000, or look what $10,000 a year does over 40.
3
SPEAKER_01
I m like, you will be a multimillionaire without even trying or thinking about it.
3
SPEAKER_01
went in the S&P.
3
SPEAKER_01
I send that to her all the time and then usually use examples of people that didn t do that.
3
SPEAKER_01
I m like, look how hard they re struggling and how much they re stressing.
3
SPEAKER_01
All they had to do in their youth was like, instead of buying that two drinks at the bar, put that into fun for a minute.
3
SPEAKER_02
Yeah.
3
SPEAKER_02
I understand why if you show that data to an 18-year-old and say, hey, when you re 65, you ll be a millionaire.
3
SPEAKER_02
An 18-year-old cannot even fathom what 65 is like.
3
SPEAKER_02
And the difference in their mind themselves at 65 is more of a different person than just a stranger on the street is to them.
3
SPEAKER_02
It s a totally different person.
3
SPEAKER_02
So I understand why it s hard for some people, but this gets back to the nature of nurture.
3
SPEAKER_02
I think there are some 18-year-olds who just get it instantly.
3
SPEAKER_02
And you don t even need to show them.
3
SPEAKER_02
They just get it.
3
SPEAKER_02
They re like, yeah, of course I should do that.
3
SPEAKER_02
That makes perfect sense.
3
SPEAKER_02
And other people that no matter how much you shove down their throat, they re never going to get it.
3
SPEAKER_00
I am a big believer and I would love to know your take on the way that you think about money.
3
SPEAKER_00
And I want to phrase this right, especially in front of you.
3
SPEAKER_00
The way you think about money is sort of how it happens in your future.
3
SPEAKER_00
So I believe that there s a poverty mindset and a plentiful mindset.
3
SPEAKER_00
And I think like for me with money, even when I didn t have money, I would wake up every day and be like,
3
SPEAKER_00
I m gonna make money.
3
SPEAKER_00
When I lost money, I d be like, it s okay, I m gonna make it again.
3
SPEAKER_00
And I think I believe that that kind of mindset, you obviously need other things with it, helps more money come to you.
3
SPEAKER_02
Yeah.
3
SPEAKER_00
Do you believe that?
3
SPEAKER_02
Yeah, I ll give you an example here.
3
SPEAKER_02
My brother-in-law is a social worker, works with
3
SPEAKER_02
very, very poor disadvantaged families.
3
SPEAKER_02
And he was talking to this very poor family.
3
SPEAKER_02
I believe they re homeless.
3
SPEAKER_02
And he said something along the lines of like, hey, you re getting this little money from, I don t know, Social Security, whatever it was.
3
SPEAKER_02
Like if you save it for the next week, then you ll be better.
3
SPEAKER_02
And they started laughing at him.
3
SPEAKER_02
And they said, oh, you re a future thinker.
3
SPEAKER_02
And he kind of said, what?
3
SPEAKER_02
And he was like, yeah, you re a future thinker.
3
SPEAKER_02
People like us, the future doesn t exist.
3
SPEAKER_02
Our entire mindset is the next 24 hours.
3
SPEAKER_02
Where are we going to get food in the next 24 hours?
3
SPEAKER_02
There is not a future that exists beyond that, that they can even comprehend.
3
SPEAKER_02
And I think there s like, so that s the extreme example of like the homeless person is literally in a 24 hour bubble.
3
SPEAKER_02
Where am I going to get the next meal?
3
SPEAKER_02
Where am I going to sleep tonight?
3
SPEAKER_02
But I think there s also a lot of people that are maybe in like a 30-day bubble.
3
SPEAKER_02
And then so, like, when you talk about retirement, they re like, retirement?
3
SPEAKER_02
I m trying to make rent next month.
3
SPEAKER_02
Like, what are we even talking about here?
3
SPEAKER_02
So, definitely, like, your natural mindset is going to really impact me.
3
SPEAKER_02
I was one of the people who at age 17, it was like, oh, I m going to open a Roth IRA and start saving for retirement, you know, before I graduated high school.
3
SPEAKER_02
And to me, being able to think about age 60, even though it was completely theoretical and I couldn t imagine what it would be like, it was a little bit easier.
3
SPEAKER_02
But I think a lot of people are trapped in their own little short-term mindset.
3
SPEAKER_02
And I think a lot of that, particularly at lower levels of income, is hard to get out of that.
3
SPEAKER_02
Because, as my brother-in-law, I feel like for people, if you re really thinking about where is dinner going to come from, then the idea of saving for even next week is like, why even bother?
3
SPEAKER_02
It s completely out of sight, out of mind.
3
SPEAKER_00
If your money got taken away tomorrow, all your money, what s the first thing you would do?
3
SPEAKER_02
hug my wife and kids and hope they still love me?
3
SPEAKER_02
No.
3
SPEAKER_02
What would I do?
3
SPEAKER_02
I would, I don t know if I would change that much because core to my identity is not money.
3
SPEAKER_02
It s, well, it s husband and father.
3
SPEAKER_02
And if I woke up tomorrow with zero dollars, I would say, do I have the ability to keep providing for my family?
3
SPEAKER_02
And it would be, I would have way more incentive to be like, I gotta go figure this out right now.
3
SPEAKER_02
Like I gotta, even if it s starting a new career, whatever it be, maybe I have the same career,
3
SPEAKER_02
I think if there s anything it would change in me, it s not my identity as a person who has money, it s my identity as provider for my family.
3
SPEAKER_00
What is it like being married to you?
3
SPEAKER_00
What s your wife like when it comes to money?
3
SPEAKER_02
She is analytically test scores everything smarter than me.
3
SPEAKER_02
And she wants nothing to do with money.
3
SPEAKER_00
So are you one of those people that s like talking about money in bed?
3
SPEAKER_02
No, because we ve been together for 18 years.
3
SPEAKER_02
And, you know, we had merged our finances before we got married.
3
SPEAKER_02
So like money, it s always been a big part of like a level of trust.
3
SPEAKER_02
And like, it s been my career and my life for the whole time that we ve known each other.
3
SPEAKER_02
but she wants nothing to do with it.
3
SPEAKER_02
And it s gotten to the point where like once a year, I need to sit her down and be like, this is our net worth.
3
SPEAKER_02
This is where it s located and whatnot.
3
SPEAKER_02
And it s so interesting because in every other area of life, whether it s health or raising kids or even just like putting things together, like physical stuff, she s so much better than me and so much more capable of me.
3
SPEAKER_02
But we were talking about this earlier.
3
SPEAKER_02
I think a lot of couples do lean towards a household CFO who s in charge of things.
3
SPEAKER_02
And I have seen a lot of couples who are like,
3
SPEAKER_02
Our financial, the household s budget is 50-50.
3
SPEAKER_02
We make decisions together.
3
SPEAKER_02
He s responsible for this.
3
SPEAKER_02
She s responsible for that.
3
SPEAKER_02
You can kind of get into some, like that is the most likely to lead to an argument.
3
SPEAKER_02
It is, I have seen in general, not all the time, but people tend to have more like sane, calm financial households when it s like, that s his or her responsibility.
3
SPEAKER_02
And I do other things.
3
SPEAKER_02
So I do think it tends to work.
3
SPEAKER_02
I mean, it s true like in any company.
3
SPEAKER_02
You need one CEO and the buck stops there.
3
SPEAKER_02
It s their decision to make these decisions.
3
SPEAKER_02
And if they screw up, it s their responsibility.
3
SPEAKER_02
I do think when you merge, when you split these things, not with everybody, some people have made it work very well, but I think you re more likely to run into financial debates when it s perfectly, each person is responsible.
3
SPEAKER_02
And I think this is most extreme when you have a married couple that has perfectly split finances.
3
SPEAKER_02
This is my money, that s your money.
3
SPEAKER_02
That s like that.
3
SPEAKER_02
And a lot of people do that.
3
SPEAKER_02
that tends to be a big like cause for later financial problems with people.
3
SPEAKER_01
Yeah.
3
SPEAKER_01
For people wondering, Lauren and I did the same thing.
3
SPEAKER_01
We got, we ve been together forever.
3
SPEAKER_01
We, money s not been an issue.
3
SPEAKER_01
We basically like we d put it all together.
3
SPEAKER_01
I probably lead the household financial decisions, but the conversations we re having is I m always saying like, this is where it is.
3
SPEAKER_01
This is where you get it.
3
SPEAKER_01
It s like, you know, there s no like gas permission, but like this is what, you know, this is the budget we got to follow that kind of conversation.
3
SPEAKER_01
Like I never want her to not have the information.
3
SPEAKER_02
Yes, totally.
3
SPEAKER_02
Obviously, one of the biggest issues with finances with couples is when one partner discovers a secret from the other, secret debt that you never told me about, secret spending you never told me about.
3
SPEAKER_02
That s a big issue.
3
SPEAKER_02
And for a lot of couples, they will put that up with infidelity.
3
SPEAKER_02
If you find out that your husband or wife has $25,000 in credit card debt that you never told me about, that s a big problem.
3
SPEAKER_02
That s a big... I think why that is, is like we ve been saying, money is so core to your social identity that if you re hiding a big part of that, it s like, man, do I even know you?
3
SPEAKER_02
That s a big problem with people.
3
SPEAKER_02
I think the other thing with my wife and I has been we ve always lived so far below our means and had such a high savings rate that we never have a budget.
3
SPEAKER_02
We never have to think like, can we afford this?
3
SPEAKER_02
Because the truth is we don t really want that much.
3
SPEAKER_02
We re so far from pushing ourselves over the edge that it s been like we don t really need to talk about it that much.
3
SPEAKER_02
There s really never been an issue.
3
SPEAKER_00
One thing that I have incorporated into my skincare routine, wait for it, is organic grass-finished beef tallow.
3
SPEAKER_00
It s so good, you guys.
3
SPEAKER_00
It s also known as liquid golds.
3
SPEAKER_00
The one in the brand that I like is by Toops and Co.
3
SPEAKER_00
This entire skincare and makeup line is 100% natural, and they only use organic ingredients.
3
SPEAKER_00
One of the main ingredients they use is grass finished tallow.
3
SPEAKER_00
They also use organic botanicals and organic cold press plant oils.
3
SPEAKER_00
This is my vibe.
3
SPEAKER_00
I love this so much, especially if you re pregnant.
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or you re trying to just clean out your products, this is a great place to start.
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SPEAKER_03
They never use synthetic chemicals, toxins, fillers, artificial colors, or even synthetic fragrances.
4
SPEAKER_03
So how I started with this line is actually for my kids.
4
SPEAKER_03
I was looking for certain products like a diaper cream and then I was also looking for something for Townes.
4
SPEAKER_03
He got like a little cut on his side and then I wanted something for the bath and I found like a shower gel with tubes and co and then I found this stick that they have.
4
SPEAKER_03
It s like a bomb and you can use it on your lips.
4
SPEAKER_03
You can use it on a rash.
4
SPEAKER_03
You can use it on cuts.
4
SPEAKER_03
So I started using it on his little cut.
4
SPEAKER_03
I feel so bad for him.
4
SPEAKER_03
He absolutely loved it.
4
SPEAKER_03
And it really helped nourish it.
4
SPEAKER_03
You should know that all Tubes and Co.
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Visit Tubes & Co.
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If someone s listening and they want to manipulate their significant other into getting more into finance, what would you tell them to do?
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Like a slight manipulation, maybe like a book or like a show, something that they can just show them.
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Here s what I think is interesting is that there are a lot of people, like I said, health and money impact everybody, whether you like it or not.
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And I know a lot of people, particularly guys who are so into health,
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and they re at the gym all day and they re like diet, they got everything, their health is so dialed.
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And if you ask them why they do it, they re like, I wanna respect my body, I wanna be healthy in the future, I wanna live it a long time, I wanna be able to hold my grandkids when I m 70.
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But then their financial mindset is like the complete opposite.
4
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They re like, ah, it s just like a YOLO mindset of like, who cares, whatever, let s do it.
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SPEAKER_01
And if you flip that around, if you told that person that in the financial aspect, they re the equivalent of an obese,
4
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smoking, that s what you are financially.
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I think that framing has gotten a lot of people s attention.
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SPEAKER_00
That s a good framing.
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And I do think too that if you have no financial background and you re like, I know nothing about it, I really want to get into this.
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Find something that s going to teach you a financial story.
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Don t jump into a book that has charts and data and formula because 99% of people will read three pages and be like, this is not for me.
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I m not going to do that.
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But everyone on earth has been impacted by money.
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And if you can find resources or talk to people who are like, let me tell you my story about money.
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I m not going to give you any data and I m not going to tell you what to do because there s so many charlatans in finance, but just like, let me tell you how it impacted me.
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I think that s a good way because a lot of people will realize that, oh,
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this fear that I had that I thought was unique to me, actually, almost everyone else is scared about this thing too.
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Once you open up about your finances, you realize that everyone has their story.
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SPEAKER_01
Everyone has their fear.
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SPEAKER_01
And once you open up about it, it s really comforting to know how many other people are just like you.
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Are you dying at all the financial quote unquote gurus that are on social media?
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SPEAKER_01
Oh, it s terrible.
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With very few exceptions, all of them are charlatans.
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Who s your favorite person that you think is an exception?
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Yeah.
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I mean, there are a lot of people who like have maybe they ve written books or they do interviews.
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But once you have your core identity is like, I m a financial guru and I m out to tell you what to do.
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That s the problem.
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The biggest issue is that advice that s good for me might be terrible for you and vice versa.
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SPEAKER_01
Very similar to health of just like you re like, should you take this cancer medicine?
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SPEAKER_01
You re like, I don t know, do you have cancer?
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Like, do you not have cancer?
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It s like, there s no one-size-fits-all advice for people.
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So when you have someone online who says, this is what you should do, you re like, well, you don t know me.
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Are you talking to a 17-year-old or a 95-year-old widow?
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You think the advice is the same for both those people?
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SPEAKER_01
So anyone who is like online saying, you should do this, run for your life, because they don t know you.
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SPEAKER_00
It s why like people have, they keep writing and say, can you do more like me, me do a finance episode.
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SPEAKER_00
And that my sentiment is exactly the stuff that I would say is probably very redundant and very repetitive and not very unique and also not that exciting.
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SPEAKER_00
And it s like.
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Get out of debt as quick as you can.
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That means you got to live below your means or change your lifestyle, live below your means, you know, spend less than you make.
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SPEAKER_00
It s like very, very boring stuff.
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Create a savings.
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SPEAKER_00
Like I have some maybe more granular things, like maybe create a savings account or an investment account.
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SPEAKER_00
That s hard to get to like, meaning like you can t just wire the money or transfer it very easily.
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SPEAKER_00
You have to like write a check or go in.
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SPEAKER_00
Like, but my stuff is not that exciting.
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SPEAKER_00
And I think that the best, like to your point, like you don t really have to be
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A guy on Wall Street, you re not day trading, you re not running a hedge fund.
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All you have to learn how to do is live below your means and save consistently.
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Yeah.
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I think this is another problem that the financial industry has given to society.
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A bad thing that they ve done is convinced you that unless the person is wearing a suit and went to Harvard and has low
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letters after their name that they shouldn t be telling you, that they can t teach you anything about money.
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SPEAKER_02
So much about money is just like, it s common sense.
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You could learn from your grandmother.
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You don t need to hire a fancy financial advisor.
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SPEAKER_02
And almost to the opposite of that, a lot of the fancy financial advisors in very nice suits are the people who are out to swindle you the greatest.
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SPEAKER_02
I mean, there is so much money to be made giving financial advice.
5
SPEAKER_02
that it has attracted so many people who figured out every trick in the book about how to separate you from your money.
5
SPEAKER_02
And even though there are rules and regulations in place to kind of weed out the flagrant crooks from the system, there is so much advice that looks good and sounds good that would be terrible advice for you.
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SPEAKER_02
And it s really hard to parse out which is which, particularly if you re a lay person.
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SPEAKER_02
Now, it s not like that.
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I mean, it s kind of like that with medicine.
5
SPEAKER_02
where you have people selling supplements and whatnot, that s all BS.
5
SPEAKER_02
And it s like, there s advice out there that s like, yeah, but that s not really what you should do.
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SPEAKER_02
But by and large, if you re talking to a doctor who has MD after their name, by and large, for the most part, you can trust it.
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Like this person knows what he s talking about and they re going to give me good advice.
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And in finance, that really doesn t exist.
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SPEAKER_02
And there are some, you know, CFA credentials and whatnot to where you d be like, oh, this person knows what they re talking about.
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SPEAKER_02
But you don t need to prove that you know what you re talking about to give financial advice.
5
SPEAKER_02
And that s why there s so much bad stuff out there.
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You know, one of my favorite things you said in the book is maybe something you re not expecting, but I think there s so many people online, especially financial, like quote unquote financial experts that say cash is trash, don t hold cash, you never want cash, you re losing money.
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Everyone knows who these people are.
5
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But I was reading your book and there was this part where you say, if having a little more cash on hand enables you to not have to sell your assets in a down market, that cash becomes worth way more
5
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than the inflationary cost that you re paying on that cash.
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For years, since I started saving, I probably keep more cash per se than what a quote unquote financial advisor would say is necessary.
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But for me, what it does personally, I m just talking about a unique experience,
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It gives me a peace of mind where in a down market, if a COVID happens, if whatever happens, I don t have to think about selling my savings assets.
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I can just say, okay.
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And I know that it s not quote unquote the best investment in terms of the cash I m sure is losing some value.
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But if that enables me to not sell the things I don t want to sell during a bad time, that cash just became way more valuable to me and personally makes me feel much more comfortable.
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Yeah, it totally makes sense.
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I m just like that too.
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And it s easy to look at the cashier holding and to be like, this is a terrible investment.
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It s not going anywhere.
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And then once or twice a decade, you wake up and realize that it s the most valuable asset you have.
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Whether it s the stock market crashes, but because you have cash, you re not forced to sell or you lose your job.
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And because you have cash, you re like, we re going to be okay.
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I think one of the worst things any parent
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will ever have to do or any spouse could do is to come home and look your spouse and look your kids in the eye and say, I lost my job and we re going to have to move.
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We re going to have to sell our house or we re going to get kicked out of our apartment, whatever it can be.
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That can be so psychologically traumatizing for an adult to do that.
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And if your ability to have a little bit of cash on the side says, hey, so that therefore you can come home and say, I lost my job, but we re going to be fine.
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We re going to live here.
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I m going to go out and start looking for a new job tomorrow.
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We re going to be okay. 
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The ability to do that will change your life.
5
SPEAKER_00
Psychologically traumatizing for the person who s saying it or the child who hears it?
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Both.
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Absolutely both.
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That s interesting.
5
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And almost in equal parts too.
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I mean, what children want, not that I m a parenting expert or a child expert, but I think what kids want is stability from their parents.
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SPEAKER_02
And if you come home and say, hey, this place where we ve lived, where you ve got friends next door, we have to move.
5
SPEAKER_02
We don t want to move, but we have to do it for financial reasons.
5
SPEAKER_02
That is so instable for that child that s going to leave.
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Now, kids are resilient.
5
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They ll eventually recover from that.
5
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But I think kids really just want stability at home.
5
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Yeah, I think the reason that, and I ve thought about this a lot as I talk to people in our own lives, why people
5
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don t like to talk about personal finances.
5
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It s this thing, okay, that ll be 30 years, I ll deal with that.
5
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So that s number one.
5
SPEAKER_01
But they re not correlating it to what we re discussing here, which is back to optionality.
5
SPEAKER_01
If I lose my job today, and I don t have a paycheck, but I have a little bit of cash savings, and then I can stay in the house and think about the next move,
5
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just that psychological stability right there alone for myself and for the family is worth, it s going to pay dividends on that savings.
5
SPEAKER_01
And it s not, this is not like, oh, I need this at 75.
5
SPEAKER_01
It s like, I might need this in a month.
5
SPEAKER_01
I think we re really bad at predicting shit that can go wrong.
5
SPEAKER_02
Yes, that s exactly it.
5
SPEAKER_01
And we can t plan for it.
5
SPEAKER_02
If you, if you list, uh, make a list of 10 bad things that could happen, recession, divorce, cancer, like make a list of things like that.
5
SPEAKER_02
The odds that at least one of them will happen to you and everybody.
5
SPEAKER_02
is almost 100%.
5
SPEAKER_02
Nobody goes through a long life without having some really bad things happening to them.
5
SPEAKER_02
But it s so painful to accept that and think that that people just want to be like, I don t even want to think about it.
5
SPEAKER_02
But then when that happens to you, I mean, not to get too grim about this, but I ve often thought like,
5
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the psychological exercise of what if I was on my deathbed tomorrow?
5
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Would I regret the fact that I ve been a big saver?
5
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Would I regret and be like, oh, I should have bought a nicer car, I should have done more travel?
5
SPEAKER_02
To me right now, the answer is absolutely not.
5
SPEAKER_02
Because if I were on my deathbed tomorrow, I would take so much pleasure in knowing that my wife and kids are going to be okay financially.
5
SPEAKER_02
They re going to lose, she s going to lose her husband, she s going to lose her dad, but the house, they can stay in the house.
5
SPEAKER_00
I m going to take all the money.
5
SPEAKER_00
on my deathbed.
5
SPEAKER_00
I m going to be like, sorry, I took all the money.
5
SPEAKER_00
You guys are going to have to figure it out.
5
SPEAKER_02
The last week is going to be really fun.
5
SPEAKER_02
It s okay.
5
SPEAKER_02
But I think that s the way to think about it is like, you know, take those like that extreme and be like, and I think that s a good litmus test for whether you re saving too much or not enough is to be like, if something really bad happened, would I look back with a sense of regret or be like, no, I m actually pretty glad and proud that I made those decisions.
5
SPEAKER_00
I want to teach my children the importance of finances.
5
SPEAKER_00
What are some things that you do with your kids that you think will really help them be smart with money in the future?
5
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How old are your kids?
5
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Four and two.
5
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Mine are four and eight.
5
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And I think what s important, every parent will know this, is that I think the answer to that is you don t necessarily need to teach them because they re watching already, whether you know it or not.
5
SPEAKER_00
Oh, great.
5
SPEAKER_00
They watch everything, don t they?
5
SPEAKER_02
I mean, there s this study I saw years ago that was so interesting, which is that your political beliefs, like 80% of them come from your father s political beliefs.
5
SPEAKER_02
You just kind of watch what you re like, definitely, like particularly your father, you overheard him saying things at the dinner table.
5
SPEAKER_02
And, but by and large, he did not sit you down for the most part and say, this is why you should vote Democrat or, and push you in that direction.
5
SPEAKER_02
You just picked it up subconsciously.
5
SPEAKER_02
And I think finance is the same.
5
SPEAKER_02
Even if you re not sitting your kids down and saying, I want to teach you about money, they watch you when you go to the store and you say, no, we can t afford that.
5
SPEAKER_02
They watch what you re buying.
5
SPEAKER_02
They watch what you re wearing.
5
SPEAKER_02
They watch over here, you and your spouse talking about money at the dinner table.
5
SPEAKER_02
So by the time your child is a teenager, they already know a lot about you financially.
5
SPEAKER_02
And I also think particularly teenagers have such a natural tendency to rebel, that if you sit them down and say, I m going to teach you about compound interest, that s in one ear and out the next.
5
SPEAKER_02
So that s not a cop out to say you can t, you shouldn t teach them anything.
5
SPEAKER_02
And then the other thing about people being very individualistic is, so our four kids are young.
5
SPEAKER_02
And I don t know whether my four-year-old daughter is going to be, does she want to be a corporate lawyer when she grows up?
5
SPEAKER_02
Or does she want to work for Greenpeace when she grows up?
5
SPEAKER_02
Like, I have no idea.
5
SPEAKER_02
So I don t want to steer her in one direction and say, you should definitely do this.
5
SPEAKER_02
This is the lifestyle you want to live.
5
SPEAKER_02
Because the lifestyle that I and my wife live might not be right for her.
5
SPEAKER_02
That might not be her the best life that she could live.
5
SPEAKER_02
So, it gets kind of dangerous to drill into them.
5
SPEAKER_02
This is what you need to know.
5
SPEAKER_02
I think the best you can do is lead by example of just like, look, this is how your mom and I, your dad and I manage our money.
5
SPEAKER_02
And whatever works for you is going to work for you.
5
SPEAKER_02
I ll give you an example of this.
5
SPEAKER_02
My parents have been vegetarians for 50 years.
5
SPEAKER_02
been married for 48 years, something like that.
5
SPEAKER_02
When myself and my two siblings were growing up, my parents said, this is how mom and dad eat.
5
SPEAKER_02
But if you want to eat meat, go do it.
5
SPEAKER_02
We re not going to force you.
5
SPEAKER_02
So by the time that my brother and sister and I were like 10,
5
SPEAKER_02
And we went over to a friend s house and I tried steak and I was like, oh, that s good.
5
SPEAKER_02
That s some good stuff.
5
SPEAKER_02
We eventually all started eating meat and my parents were totally fine with it.
5
SPEAKER_02
No issue whatsoever.
5
SPEAKER_02
And I think that s a good way to think about money as well is like, hey, this is how mom and dad do it.
6
SPEAKER_01
you why we do it.
6
SPEAKER_01
I ll tell you some of the pros and cons of why we do it, but you got to figure out what works for you.
6
SPEAKER_01
The other thing is that this is specific for high-income parents, is that your kids got to make their mistakes on their own.
6
SPEAKER_01
If you re just shoveling money at them and bailing them out at every direction, those kids are completely screwed.
6
SPEAKER_01
You have to let them fail on their own.
6
SPEAKER_01
They need to learn the power of a dollar.
6
SPEAKER_01
And the only way to learn that is to experience the power of its scarcity of like needing something but not being able to afford it.
6
SPEAKER_00
I m obsessed with the way that your parents parented.
6
SPEAKER_00
That s exactly.
6
SPEAKER_00
I ve never been able to articulate what that is, but it s like we re vegetarian, but but you can be whatever you want.
6
SPEAKER_00
I love that energy.
6
SPEAKER_00
I don t know what it s called.
6
SPEAKER_00
Nonjudgmental.
6
SPEAKER_01
But you see, that word judgmental is the most important because when my siblings and I started eating meat, my parents never looked down upon us.
6
SPEAKER_00
I love that.
6
SPEAKER_01
They never criticized us.
6
SPEAKER_01
There was no side eyes ever.
6
SPEAKER_01
Very involved.
6
SPEAKER_01
I mean, it s always just been, this is what we do, that s what you do, to each their own.
6
SPEAKER_00
I love that.
6
SPEAKER_00
I think you can apply that to anything.
6
SPEAKER_00
We re entrepreneurs.
6
SPEAKER_00
You don t have to be.
6
SPEAKER_00
We like to be on television or film.
6
SPEAKER_00
I think you can use that with every single thing.
6
SPEAKER_00
Yes.
6
SPEAKER_01
And I think a lot of angst in young adults comes from, my parents wanted me to be this person, but that s not who I am.
6
SPEAKER_01
It s so many people.
6
SPEAKER_01
And they feel bad that they didn t live up to the expectations of their parents.
6
SPEAKER_00
Totally.
6
SPEAKER_00
And also they feel bad that their parents aren t accepting them.
6
SPEAKER_00
It s a whole like shame.
6
SPEAKER_01
Totally.
6
SPEAKER_01
And I think that leads to a lot of depression or a lot of like broken relationships between parents and their children.
6
SPEAKER_00
Yeah.
6
SPEAKER_02
I want to stay on the note around psychology here when it comes to finances.
6
SPEAKER_02
One of the things you talk about is the difference between rich and wealth.
6
SPEAKER_02
I think, did you say rich is what you see, wealth is what you don t see?
6
SPEAKER_02
Is that from yours?
6
SPEAKER_01
Yeah.
6
SPEAKER_01
I m making these definitions up.
6
SPEAKER_01
This is just my own definition.
6
SPEAKER_02
I think this is a really interesting topic.
6
SPEAKER_01
Rich, in my definition, would be you have enough money to pay your bills.
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You can pay your credit card bill and your car lease payment and your mortgage payment.
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You re actually making it work.
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Wealth by my definition is very different.
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Wealth is what you did not spend.
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It s the cars you didn t buy.
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It s the house you didn t buy, the jewelry you didn t buy.
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It s money that you didn t spend and therefore you saved.
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You accumulated it, maybe you invested it.
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And that s what wealth is so important is because wealth is what gives you independence.
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Like the ability to make a car lease payment, it might be great and it might give you a lot of fun and pleasure in life,
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Or you might have a car that you re struggling to pay, but it looks like maybe it s a sports car and it looks very rich, but you re struggling every month to come up with a payment.
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You re struggling to make it, which is the opposite of independence.
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At that point, the money owns you.
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You don t own it, it owns you.
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I think most people, not everybody, everyone s different for everyone, but most people want, whether they know it or not, they want to be wealthy.
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They don t want to be rich, they want to be wealthy.
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They want to have independence.
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All the monkeys on their back that are giving them so much stress and anxiety today, they want those monkeys gone.
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And they re going to do that when you have independence, when you can wake up and say, look, I actually hate my job.
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I m going to quit it.
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I actually hate the city.
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I m going to move somewhere else.
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You have the independence to do that because you have money that you did not spend.
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It s wealth.
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It s not rich.
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It s wealth.
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People use that term, fuck you money, and I think that they think that it s this astronomical number.
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To me, fuck you money means you have enough to live the life you want to live, specifically to you.
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And you could tell anyone to F off because you have enough as it is to live exactly how you re living.
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And that doesn t mean you have to have a billion dollars or hundreds of millions.
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It just means having enough for you to be happy.
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Yeah.
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I think there are people with driving Honda Civics that have fuck you money.
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Yeah.
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Because their ability, they re doing exactly what they want.
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And there s people with Lamborghinis who are struggling to make that next lease payment.
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And that to me is like, that s its own form of poverty.
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It s a weird form of poverty because you re driving a Lambo, but it is very much a sense of poverty because that car owns you.
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It has got you by the tail and there s nothing you can do about it.
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Yeah, I always think it s such a tragedy if you frame it in the way that you are broke and living in stress and discomfort because it was more important to live in a big house and drive a nice car to impress somebody that does not give a shit about you.
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That is such a mess to be in because it s avoidable, meaning you did not need to make that decision.
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You don t need to drive that car.
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You don t need that bigger house.
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You don t need that handbag or those nicer clothes or that watch, whatever.
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You re doing it.
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for an external event that s probably also not manifesting.
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Yeah.
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See, and that s important.
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I do have a lot of sympathy for people in that situation because a lot of them, the reason that they have such a strong desire to live in a mansion and drive a Ferrari is getting back to, they want respect and admiration, and they re not getting it from their marriage.
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They re not getting it from their career.
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They re not getting it from their children or their community or their friends.
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So then they then resort to, well, if I have a fast car that goes vroom, vroom, maybe people will like me then because they don t like me for anything else.
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So I think a lot of it does come from this source of pain in their life.
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And I think the people who are the most flashy,
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tend to be, not all of them, but tend to be some of the most broken and people who are in the most pain.
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And their desire to be like, look at my diamonds, look at my car, look how great my house is, comes from this deeper internal pain of like, I don t get respect for anything else, but maybe you ll like this part of me.
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what is it like to write such a gnarly book that is a bestseller that everyone s reading?
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I mean, I ve seen this book everywhere and then have this pressure that you then are going to write another book.
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I think about that all the time because even with my, my product line, when I create a product that I m just like, this is it.
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And then it launches.
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And then the next day I m like, okay, I have to go do it again.
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It s a lot of pressure.
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What did that, what does that gap look like for you?
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I think,
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I mean, in some sense, yes, there was a lot of pressure, and I know I needed to keep my expectations lower and whatnot.
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I think for me, it was just like, look, I m proud of my second book.
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The second book is amazing.
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You hit it.
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Thank you.
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I just wonder what it looks like before it s this.
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Yeah, to tell you the truth, I don t think I thought about it that much.
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I ve always had this weird quirk in my career where I always say I m a selfish writer.
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I write for an audience of one, which is me.
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I don t think about other people.
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And I think it s a great way to write because you get the best writing when you re just like, let s pretend no one s going to read this.
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Let me just dump my soul on the page and like give you everything I ve got.
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I think if you re too worried about what are people going to think of this, everyone s going to have really stale, boring writing.
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It s going to you re not going to take any risks.
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And so I ve often done a good job about being like, when I write or when I m thinking about the next book, like, let s just pretend no one s going to read it.
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Like, let s just write a book that I want to be written, that I would want to read myself.
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And then maybe there s a leap of faith that if I like it, other people might as well.
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What s so interesting about this one is it s such an interesting observation.
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How did you start observing what you wrote about in this book?
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Tell us when the epiphany came.
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For people that aren t familiar, Morgan s second book, Same as Ever, A Guide to What Never Changes.
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Phenomenal.
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But yeah, dive into it.
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I m an amateur student of history.
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I love reading history.
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And to me, what s always so fascinating about history is not to read about something that happened in the past and realize how different it was in the past.
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What s way more interesting to me is to read about something that happened a hundred years ago and be like, that s exactly what people do today.
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Hasn t changed whatsoever.
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It s the same thing.
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And I think when you start looking for it, it s everywhere.
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You can read about what people were doing a thousand years ago and their sense of greed and fear and like willingness to like cling to their tribe.
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It s always never changed.
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And there are so many behaviors that have never changed, and therefore, they will never change in the future.
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They re just innate parts of how people work.
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And those things that never change, I think, are the most important things to study.
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A lot of this, too, came from my career as a finance writer, and I just got kind of disgruntled at how bad everyone was at forecasting.
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Like, when s the next recession?
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What s the stock market going to do next?
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Nobody has any idea.
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Nobody can do it with any consistency.
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Everyone sucks at it.
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So then you can become a cynic and just say, nobody knows anything.
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Don t even try to forecast.
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Or you can say, well, rather than trying to guess what s going to change in the future, can we just study what never changes and know that regardless of what happens in the future, these kind of behaviors are going to be a part of it?
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That s really where this came from.
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I ll tell you one specific example of a light bulb moment for me.
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I m not going to get too nerdy about this.
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There s a book called The Great Depression, A Diary.
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It was written by this bankruptcy attorney in Youngstown, Ohio during the Great Depression.
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He just kept a personal diary.
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Michael s buying it on Amazon tonight.
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Yeah, I can already see his eyes.
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If you re a history nerd, wonderful book.
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You gotta send him all your books.
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He loves history books.
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So wait, to clarify, this guy s just writing his thoughts as the days go by.
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Just his personal diary for himself.
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Oh, interesting.
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He doesn t think anyone else is gonna read this.
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And he was a bankruptcy attorney, so he had this incredible window into what people were going through financially during the Great Depression in the 1930s.
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His son published it in 2010, and it is inadvertently, in my view, the best finance or economic book ever written.
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because this guy who was writing in the 1930s, he didn t know how it was going to end.
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Every other history book, the author knows how it ends.
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And that s going to color what they write about it.
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This guy writing in the 30s has no clue what s going to happen.
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What is and what s his energy?
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Lots of it.
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So he was OK himself.
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He was a bankruptcy attorney, so he actually had a lot of business for himself.
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But he was a very keen observer of what other people were going through.
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And one of the things that stuck out from this book is I was reading a dire entry from, I think, 1932.
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And it dawned on me, I was like, if you change the dates in this diary entry from 1932 to 2008, everything fits in.
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What he was talking about back then perfectly fit into 2008.
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And then like two pages later, he says, if you change the dates from 1932 to 1894, when they had another recession, everything fits in.
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So it was like, it s the same thing over and over again.
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The details change, but it s the same movie over and over again.
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It s funny, Lauren and I got asked to speak at CES, which we went and did, and it was a marketing thing.
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It was a tech conference, but everybody keeps asking, what do you guys forecast as the next trends?
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What s happening on TikTok?
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I actually referenced your book and I said, you know,
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In our business, it d be nice to be able to predict the trends.
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I don t know anybody that can.
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What I see is the people that are on a trend, it s like they kind of fell into it, right place, right time.
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They didn t see it coming and they re just like, they re the right person for that or they made the trend.
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But the businesses that try to chase the trends and keep up, they re always a step behind.
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And so what I was telling was like, what we focus on on this show is like, what is still going to be... This conversation I think is still relevant 10 years from now.
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Three years ago.
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I used to be a writer for the Wall Street Journal, and something that drove me crazy, and all press media does this, it s not specific to Wall Street Journal, but I would write a piece and an editor would say, what does this have to do with this week s news cycle?
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And I d be like, it doesn t, and that s why I think it s relevant.
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I always thought that if I was writing an article that was going to be stale next week, it wasn t relevant at all.
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I wanted to write something that would theoretically, if you d read this 10 years from now, you would benefit from it.
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And so I think that idea of like what never changes, let s just focus on that rather than getting sucked into the hype cycle or like the ignorance of thinking that you know what is going to change when nobody does, I think it s really important.
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Let s talk about online therapy.
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If you ve been paying attention and listening to this show and you ve heard all of the incredible people that have come on, so many of those incredible people have one thing in common, and that is that many of them utilize therapy to share their ideas, to get
7
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thoughts off their chest, to work through issues, to feel better, to work through any kind of sadness or to work through any kind of anxiety or just anything that s troubling them in their life.
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What we have realized doing this show is that we ve also benefited from talking to people.
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It s so important to just share your ideas and get them off your chest.
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So many of us do such a poor job sharing how we really think, how we really feel, and we bottle things up inside and it affects us later in life.
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in negative ways, which is why Lauren and I are such big proponents of therapy and especially online therapy with BetterHelp.
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For those of you that don t know what BetterHelp is, BetterHelp is online therapy, as I mentioned, with licensed professionals that you can do from the comfort of your own home, your office, your phone, your computer, wherever you consume digital content and wherever you connect online.
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Long gone are the days of having to drive into an office, sit in a waiting room, and then spend time with someone you may not be aligned with.
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BetterHelp makes it very easy to start online therapy, and you can switch therapists at any time for any reason at no additional charge.
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So learn to make time for what makes you happy with BetterHelp.
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Visit betterhelp.com slash skinny today to get 10% off your first month.
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That s betterhelp, H-E-L-P.com slash skinny, betterhelp.com slash skinny.
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Lauren and I have a weekly newsletter now where we send our favorite resources, and one of the things that I put in the newsletter this last week was Element.
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We have been talking about Element on this show for a while now.
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What I love about Element so much, especially after we ve moved to Texas, is that this keeps you hydrated.
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So many of us are running deficient when it comes to our electrolyte balances, and this causes headaches, cramps, fatigue, brain fog, and weakness.
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For those of you that aren t familiar with what Element is and have not been listening to this show carefully, Element is a zero sugar electrolyte drink mix born from the growing body of research revealing that optimal health outcomes occur at sodium levels of two to three times the government recommendations.
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This product was created by Rob Wolf.
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Rob was a former research biochemist and two times New York Times bestselling author and has now sat on the Navy SEAL resiliency committee for over a decade.
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The way that we use it specifically is every time we go to the gym and we know we re going to get a sweat, we put it in our water bottle.
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It comes in these little individualized packs that you can just dump in very easily.
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If throughout the middle of the day you start to feel a little slow sluggish, I just put it in a glass of water, drink it down and feel much better.
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And like I said, it s just going to help you stay way more hydrated.
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I know many of you are now using sauna.
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This is something that I also carry into the sauna and drink throughout the sauna session as well, or even after.
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So check it out.
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Of course, we have a special offer for you.
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Go to drinkelement.com slash skinny to receive a free element sample pack with any order when you purchase through our URL.
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Try it totally risk-free.
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If you don t like it, give it away to a salty friend and they ll give you your money back.
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No questions asked.
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There are very low return rates and high reorder rates.
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You can feel confident that you re getting a great product.
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So again, visit drinkelement.com slash skinny.
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This podcast is brought to you by Squarespace.
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Squarespace is the all-in-one website platform for entrepreneurs to stand out and succeed online, whether you re just starting out or managing a growing brand.
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Squarespace makes it easy to create beautiful websites, engage with your audience, and sell anything from products to content to time, all in one place, all on your terms.
7
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I have been talking about Squarespace for years now, and I ve also been talking about how important it is to own your brand, your platform,
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SPEAKER_00
your online footprint.
7
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We live in an age where we give all of our information, all of our data, all of our control to so many third party platforms.
7
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One of the reasons Lauren and I chose podcasting as a medium is you own the podcast RSS feed and can produce it on all sorts of different third parties.
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Also, we put so much time and effort into the Skinny Confidential blog, again, because we own it.
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And now on the commerce side, we put a ton of time into the commerce platform that we own as well.
7
SPEAKER_00
Squarespace lets you do all of these things without being at the mercy of a third party.
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So whether you want to start creating your own online website to have a presence to either grow your online personality or your brand, Squarespace has a solution for you.
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If you want to build your own online store and start selling your own products, you can do that on Squarespace as well.
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It has all sorts of tools for anyone trying to create any kind of online presence.
7
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So head over to squarespace.com for our free trial.
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And when you re ready to launch, go to www.squarespace.com slash skinny to save 10% off your first purchase of a website or domain.
7
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Again, that is squarespace.com slash skinny to save 10% off your first purchase of a website or domain.
7
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Speaking of the news, I think this is very relevant.
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There s a chapter in the book, I can t remember the exact name of the chapter, where you talk about the difference between the news we see now compared to the news people used to see.
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And you talk a lot about
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Back then, if you were reading, it was mostly local news, whether it was a local paper, or a local news station, or a TV station.
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And so, and tell me if I m wrong as I m saying this, a lot of the time you would see a lot of really good news.
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And every once in a while you would see some bad news, because the chances of something bad happening in a small town were rare.
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But then if you expand that to city, you see there s a greater chance for bad.
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If you expand it to state, greater chance.
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If you expand it to country, even greater.
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And if you expand it to the world, there s 100% chance you ll see something bad.
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And I think the point you were making
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The world actually maybe hasn t gotten as bad as we think it has, it s just we re exposed to only the bad stuff all the time.
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Exposed to it.
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The local news writes about the high school football game and the new bakery down the street that just opened.
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Global news writes about terrorist attacks and plane crashes and wars.
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And just because, so like people want to, there s an attraction to pessimism because you have to be able to like, it s natural to pay more attention to bad news than good news because you have to be able to survive the bad news in order to benefit from the good news.
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So, people are way drawn, they re drawn much starker to bad news and good news.
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And yet, once you expand it from local news to national news to global news, all you re going to hear about is bad news.
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I think it s left people more pessimistic than they should be because they turn on the news, they read the news and it s bad news, bad news, bad news, bad news.
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And they miss that they re actually living in a world that is way better.
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and safer and more prosperous than it very likely was in your parents  generation and your grandparents  generation.
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But you don t know that because every day you turn on the news and it s more bad news.
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And so I think just when we went from local news to national to global news, it totally shifted people s mindsets of their perception of the world.
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How do you consume the news?
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I read lots of different news.
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I don t pay too much.
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I think if you get a tribal affiliation with any news organization, whatever it would be, that s a recipe for disaster.
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I try to read as much as I possibly can from a dozen different news sources.
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And I would also say that
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I read more books than I read news articles, because I m more interested in what s never changed.
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So yes, there are things like, I want to know what happened in the world today.
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And I want to know, is there a big, is there war, things with the presidential election.
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I want to stay current on what s going on.
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But mainly what I want to learn about is something that was relevant 100 years ago, as it is today.
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And so I m much more likely to read a history book than the news.
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And I think that actually gives you a much better perception of what to pay attention to in the news if you have a more keen sense of history.
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There s this great quote that I love, which is, everything seems unprecedented if you haven t engaged with history.
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She s like, if you re not a student of history, everything seems like this is the first time it s ever happened.
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And like, this is really bad.
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This economy is really bad.
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This election s really bad.
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If you re a student enough of history, you re like, no, it s been like this forever.
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And these same behaviors.
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Michael s literally popping a boner right now.
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This is his favorite.
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Literally, this is his favorite.
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You guys should be in a book club together.
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It sounds like he s speaking.
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He loves saying this.
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In another life, and I joke about this, I would have been a history teacher.
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Yeah.
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Because I love history and I love reading about random things.
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But I love in your book what you even wrote about the pandemic, because I think you said something, and again, like, I m just trying to recall from the memory bank here, but I think you said something like, in the past, this may have been, like, one page of a textbook.
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This happened in the 19, early 1900s, because it happened so often.
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Pandemics all the time back then.
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It was a global part, yeah.
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But because we haven t seen them for so long, and because, again, even if people don t want to believe this, life has improved so much, especially from a medical advancement standpoint.
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This was...
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so far removed from what people are used to dealing with, when in the past it was like, oh, another pandemic s here.
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Like, here we go.
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Plague, sick.
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And so we freaked out and we behaved in a manner that our ancestors would have just been like, oh, it s just like another day.
8
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If COVID happened at any point before 1900,
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The people living at that time would have been like, yeah, we got a pandemic and millions of people died.
8
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Welcome to the real world.
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But because we got so good at preventing pandemics with vaccines and whatnot, that when COVID happened, everyone was like, holy shit, what is this?
8
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This might kill me?
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It was such a rare thing.
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And I think it s probably true for wars as well.
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Like for most of history, there s a lot of wars all the time, and it s gonna impact you.
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It s not overseas, it s in your backyard.
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Or raiding or whatever it may be.
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Yes, and so, and like now that we ve gotten to be a more peaceful society, when there is a war that happens, it s a much like, oh my God, like the world s coming to an end kind of thing.
8
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So I think a lot of things that have improved life, like we re healthier and we re safer, it means that when you do have a bad event, people don t know how to respond to it.
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Yeah, I worry about that all the time that we ve created such big safety bubbles that the most minor adversity, and I m not saying COVID was minor, but I m saying the adversities that would not have been maybe as adverse to our ancestors are so significant for us that we just don t know how to deal with them because we re so...
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And when I tell some of our younger sisters that the world has actually improved, and that we re actually safer, and that our circumstances have actually gotten better, they look at me like I m a nut.
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I m like, well, if you re reading bad news all the time, and you re consuming bad content, and you don t know any history, and you don t realize that it was likely that some raider showed up in your backyard and chopped off your head and raped your wife, this is very extreme.
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This could happen.
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It happened all the time.
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You can t contextualize how good you have it, if that makes sense.
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And I would rather live in a world in which I m shocked and scared of COVID, because I ve never experienced it, than live in a world in which four of my five kids die before age five.
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And so even if living in a safer world means we live in a safety bubble, it s still preferable, even with all the psychological crap that comes from that, than to live in the old world.
8
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It s why I think it s so important that people read history though, just to get the context of the perspective.
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Like maybe you don t have to be a history buff, but just to be like, Oh, these other things happened.
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And like, we actually have it pretty good.
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I just think it puts you in a greater mindset to be more grateful for the time that you re in.
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There s a book by Adam Smith and I think he s talking about the 1700s in England and he s talking about like out in the country, not in the city.
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And he said, it s paraphrasing, but he said, it s not uncommon to meet a woman who s had 20 kids and 18 of them died before age five.
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Can you imagine?
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And that was what life was like not that long ago.
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That s probably an extreme example, but maybe it s not true.
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Maybe it s 10.
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You had 10 kids and seven of them died.
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Oh my gosh.
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It s been common in a lot of cultures to not name your child until they re three or six months old because the odds that they were going to die before three or six months was so high that it s like, don t even get it.
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Don t even give it a name yet because it s not going to stick around.
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That s most of history.
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And so I think that s where, like you said, if you become a student of that and then you think about what people are worrying about and scared about and pissed off about, you re like, do you know how good we have it today?
8
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Like nothing is better at giving you perspective than breeding history.
8
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I also, on this note, and I shared this chapter with Lauren when I was reading it, when I was reading your book, people for some reason, maybe it s television, they look back on the 1950s as like this glorious age, white picket fence, everybody s living happy.
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Yeah, that was a good one.
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Everybody says, oh, life was so much better in the 50s.
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That was a good one.
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Even people that are like our age that weren t even alive in the 50s.
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It s like the nostalgia for it.
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It s like leave it to Beaver.
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Leave it to Beaver and it s like this perfect family with like,
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you know, husband, wife, two kids, picket, like white picket fence, dog named spot, like everything looks perfect.
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SPEAKER_01
Leave it to Beaver is like the perfect example of it.
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And what s always so interesting about the nostalgia for that is if you look at the numbers, they were not better off back then.
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They were not wealthier or making more money.
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They did not have more job security.
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They were not living like, by almost any metric, people are better off today than they were back then.
8
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So then it s a question of like, well, where did that nostalgia come from?
8
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Why do we think it was so good if it wasn t?
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And there could be like so many answers for that.
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One of which is just before the 1950s was World War II and the Great Depression, which sucked.
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So any prosperity that you had in the 50s by comparison of what you just lived through felt amazing.
8
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But the other that I think is really interesting is that the 50s were this very unique period where for a very short period of time, like 10 or 15 years, there was very little wealth inequality.
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The gap between rich and poor just collapsed.
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A lot of that was just like an echo from World War II of like how companies manage, like it wasn t proper during the war to pay your executives millions of dollars.
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You couldn t do it.
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And kind of that just stuck around in the 1950s.
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The top marginal tax rate was 91%.
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You re paying 91% federal taxes back then.
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So if you re rich, like the government just took all of it anyways.
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And for better or worse, I m not saying that was a preferable system, but for better or worse, what it did is it created this mindset where it was very easy to keep your expectations in check.
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It s like, there s no such thing as an objective level of wealth.
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Everything is just relative to other people.
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It s just how much money do I have relative to that person that I m looking at across the street?
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And in the fifties, most people looked at their neighbors and their coworkers and their siblings.
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And they re like, relative to them, I m doing pretty well.
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We make about the same amount of money and our homes are the same size.
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And we re going on the same vacations.
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We re wearing the same clothes.
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Everyone felt like relative.
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If I look around my city, I m doing pretty well relative to other people.
8
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And therefore, like your small homes and your small paycheck and your camping for your summer vacation felt great because everybody else did it.
8
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And I think what happened over the last 70 or 80 years is our incomes doubled and we re living longer.
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We re retiring earlier.
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Like all these statistics are like, hey, we re richer and doing better, but our expectations rose by even more.
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And social media makes it like, just dumps gasoline on this fire.
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Because now the people who you re comparing yourself to, it s not your neighbors and your coworkers.
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It s a curated highlight reel on Instagram of people who are giving like the fakest view of their life.
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And so, no matter how you re doing, everybody on Instagram looks happier, richer, and prettier than you.
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And therefore, I think the younger generation, this is not, I think a lot of people agree with this, their ability to let their expectations spiral out of control is so much greater than even ours was.
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If you grow up with TikTok and Instagram and Snap, you are anchoring, your version of success and your expectations of beauty and money and happiness is so much higher than it was for us.
9
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Yeah, when I was growing up though, the richest people we d see is like we would go, I m not gonna say the person s name, but we would, there was one house that everyone would go be like, Ooh, we can get a king size snicker bar.
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Yes.
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And they live in like a house that s double the size of our house.
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The owner of Schmick Dwanald.
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SPEAKER_01
Yeah.
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But anyways, the point is, we would see like something like that and that was like- We used to trick or treat together at 12.
9
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But to your point, Lauren and I didn t get smartphones.
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I graduated in 2009, so it was similar.
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But we didn t get smartphones or social media really till we got out of college.
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Adults, yeah.
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And so our perception, whether it was in school or in college or when we were kids, was what were our neighbors doing?
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What were the other kids in school doing?
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What were the other families doing?
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And relatively, of course, you would see some doing better than others.
9
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Maybe that family had a nicer car or they would take a nicer trip.
9
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The kids now, they will log on social media and they will see maybe they live in what would be considered just a regular, normal, middle-class home, but then they re seeing somebody on social media flying off in a massive jet to get on a boat in a place with whatever.
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And that s their measurement now.
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That s their benchmark.
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And if they re learning that benchmark when you re seven years old, that s a tough thing to overcome.
9
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Similarly, when I was a kid in the 90s,
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rich people drove new pickup trucks and poor people drove old pickup trucks.
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Like that was the difference between rich and poor.
9
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And my son, who s eight, he watches a lot of Mr. Beast.
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Are you familiar with Mr. Beast?
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I actually think he s an awesome guy and he does a lot of good.
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But his shtick on YouTube is like, let s give away a million dollars in the most frivolous way we can.
9
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So my son, who s eight, watches a lot of this.
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I think he rounds every amount of money, less than a million to zero.
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Like if any amount of money is less than a million, like it doesn t really matter.
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Not because of how we live, just because of that s the media he consumes.
9
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And once you get into, there s a psychologist named Jonathan Haidt from NYU, who s done a lot of research on this.
9
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Teenage depression, anxiety, and suicide had been like trending down for years.
9
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In 2012, it skyrockets.
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It doesn t trend up, it explodes higher in 2012.
9
SPEAKER_00
What happened in 2012?
9
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Facebook mobile.
9
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Because now every high schooler is now they come home from school and what do they do?
9
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They flip on Facebook or now Instagram or whatever.
9
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And they re looking at people who are prettier, happier and richer than them.
9
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Do you think the pendulum is going to swing, though?
9
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For me, I find because of all social media now that I crave thinking time, walking, meditation, like I crave all these things that I don t know that I would necessarily crave if we did not have social media.
9
SPEAKER_00
Yeah, I think you crave it, but for most people, including me and maybe you, even if you re craving that walk, how much time do you spend scrolling Instagram?
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A lot.
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Those companies are big and successful and worth a trillion dollars.
9
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And Mark Zuckerberg is one of the richest men in the world because it works.
9
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because it is so addictive to sit there and scroll through.
9
SPEAKER_00
And what the smartest minds of our generation have done, they didn t go to NASA to build spaceships.
9
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They went to Facebook to figure out how to get your attention.
9
SPEAKER_00
And like, what is a post that is exactly gonna trigger the most amount of dopamine in your brain so that you re gonna keep flipping, keep flipping, and they re so good at it.
9
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If you were to predict the future with all of this, what is never going to change in 20 and 30 years?
9
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I think there s a really good chance that our grandkids are twice as rich as us.
9
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They re living way longer.
9
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They re living in a more peaceful world.
9
SPEAKER_00
By any metric, the world that they live in is better.
9
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And they re not any happier.
9
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If not, they might be a little bit less happy than we are.
9
SPEAKER_00
I think that s what it is.
9
SPEAKER_00
Like it s always been the case that your expectations rise with your circumstances.
9
SPEAKER_00
That s always been the case, but it s so much more potent today because of social media.
9
SPEAKER_02
So they re going to look back on us and be like, God damn, those nostalgic, leave it to beaver 2024.
9
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They had it all.
9
SPEAKER_00
Well, even the living world where the median wage is $150,000 a year and they feel broke kind of thing because they live in a world in which unless you have
9
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three Mercedes, you re not doing well.
9
SPEAKER_00
So if you only have two Mercedes, you feel like you re falling behind.
9
SPEAKER_00
It s just like so in the 90s, it was new pickup truck versus old pickup truck.
9
SPEAKER_00
And the future, it s going to be like massive car collection versus, oh, you only have one BMW, like poor little you.
9
SPEAKER_00
I think that s that s where it s trending.
9
SPEAKER_00
It s just a world in which expectations can explode to degrees that we really haven t seen.
9
SPEAKER_02
This podcast in your book is going to be one of those things that they look back on, like you re looking back on the depression book.
9
SPEAKER_01
Yeah, but it s like, as we ve gone through, I mean, both of your books, I think a common theme is having lower expectations and being happy with what you, your current circumstances and not believing that by chasing more, that s going to make you happy.
9
SPEAKER_00
It s like it s in a lot of ways, it s like chasing less actually makes you happy.
9
SPEAKER_00
It s very true, but it s also much easier said than done.
9
SPEAKER_00
Like people are wired to want to do better than other people.
9
SPEAKER_00
From an evolutionary perspective, it makes sense.
9
SPEAKER_00
It doesn t matter what resources I have, I just have to out-compete you.
9
SPEAKER_00
If we re competing for money and land and mates, it doesn t matter how much you have, just as much as you can outperform the other person.
9
SPEAKER_00
And even if you have a ton of resources, if the other person has more, he wins.
9
SPEAKER_00
And so it s always gonna be the case that even if you are getting wealthier, if other people are getting even wealthier than that, you re gonna feel like you re falling behind in relative amounts.
9
SPEAKER_00
A person living in poverty in the United States today has access to technologies and medicines that would have been indistinguishable from magic to the richest person in the world 100 years ago.
9
SPEAKER_00
John D. Rockefeller was the richest person to ever live, adjusted for inflation, he was worth almost half a trillion dollars during his day.
9
SPEAKER_00
He never had Advil, he never had sunscreen, he never had penicillin, he never had blood pressure medication, all these things that even low-income people can take advantage of today, he never had.
9
SPEAKER_00
But low-income people don t wake up feeling like they are richer than Rockefeller.
9
SPEAKER_00
Wow.
9
SPEAKER_00
Because those new technologies, those new luxuries become necessities in the blink of an eye.
9
SPEAKER_00
So you can easily imagine a world in which in 50 years, let s say, I m just making this up, we have eradicated cancer.
9
SPEAKER_00
When you and I think about that today, it s like that is such a dream world because I, and I m sure you and everyone else, know someone who s died from cancer and the tragedy that that left on their family.
9
SPEAKER_00
Let s imagine a world in which that s just removed from society.
9
SPEAKER_00
Well, the people living 50 years from now won t even know.
9
SPEAKER_00
They ll move on to some different world.
9
SPEAKER_01
It won t even be an issue.
9
SPEAKER_01
It s like dying from an infection from a finger cut is not a thing anymore.
9
SPEAKER_00
Exactly.
9
SPEAKER_00
In the same way that we have virtually eliminated polio from society, which even in our parents  time, when our parents were children,
9
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They and our grandparents were terrified of polio, and they should have been.
9
SPEAKER_00
It was ruining lives left and right.
9
SPEAKER_00
And we don t even think about it.
9
SPEAKER_00
It s not that we wake up grateful for it.
9
SPEAKER_00
It s just completely out of sight, out of mind.
9
SPEAKER_00
We never even think about it today.
9
SPEAKER_00
And so you can imagine a world in which things get so much better, but people don t really realize it.
9
SPEAKER_01
It s funny, I ll even catch our parents, and I know we re up against time here, but I ll catch our parents talking about how great things used to be, and then I ll also see them comparing themselves to their current circumstances now to other people that are maybe further along, because they re on social too.
9
SPEAKER_01
So it s like maybe their vision of what used to be is also warped because they just didn t see that there s always been people further along.
9
SPEAKER_01
They didn t know about it.
9
SPEAKER_00
The other thing is, I mentioned from the book, The Great Depression Diary, when he was writing it, he didn t know how it was going to end.
9
SPEAKER_00
He didn t know that the depression was going to end.
9
SPEAKER_00
And I think there s a lot of that when you have nostalgia about the past.
9
SPEAKER_00
Like today, we look back at the 1950s and be like, oh, it was so great.
9
SPEAKER_00
But if you were living in the 1950s at the time, the biggest fear at the time was nuclear war, that the Soviets were going to launch a nuclear missile.
9
SPEAKER_00
And that was a very realistic fear.
9
SPEAKER_00
People were living with a great sense of dread and fear.
9
SPEAKER_00
But now today, we know that didn t happen.
9
SPEAKER_00
There was no nuclear war.
9
SPEAKER_00
So we kind of just like push that out of the way.
9
SPEAKER_00
So that s where a lot of nostalgia comes from.
9
SPEAKER_00
Like in the moment when you don t know how the story is going to end, there s so much to worry about.
9
SPEAKER_00
But you look back in hindsight and you re like, oh, no, it was actually should have been a great time.
9
SPEAKER_02
I always hear like the parents say, oh, the 80s, the 80s.
9
SPEAKER_02
I ll give you a really stupid example.
9
SPEAKER_02
The 80s were so great.
9
SPEAKER_01
Yeah, yeah.
9
SPEAKER_01
I ll give you a stupid example here that the younger listeners are like, what the hell are you old people talking about?
9
SPEAKER_01
I was taught, we were training the other day in the gym and I said, do you remember when there was like those off brand
10
SPEAKER_01
no-name mp3 players that you could get and you had to figure out how to get on LimeWare and Napster and that s how you could figure out one or two songs.
10
SPEAKER_01
People don t realize now the effort it took to take a song from a computer, find it, put it on a device if you were lucky enough to get it on and then listen to one to ten songs.
10
SPEAKER_00
What about your VHS porn that you found?
10
SPEAKER_02
That s a whole different thing.
10
SPEAKER_02
Everyone had like the big black binder of CDs.
10
SPEAKER_00
The Disney movies.
10
SPEAKER_02
You had your mix and they got scratched and then they skipped.
10
SPEAKER_02
Yeah, yeah.
10
SPEAKER_02
It s so much better today.
10
SPEAKER_02
I had like a personal story here.
10
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My wife and I, 12 or so years ago, we lived in this amazing apartment in Bellevue and the suburbs of Seattle.
10
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It overlooked the lake.
10
SPEAKER_02
It was right downtown.
10
SPEAKER_02
We didn t have kids.
10
SPEAKER_02
And this was just a couple of months ago.
10
SPEAKER_02
I was like, man, life was so good back.
10
SPEAKER_02
That was our peak living.
10
SPEAKER_02
No kids living on the lake.
10
SPEAKER_02
Everything was great.
10
SPEAKER_02
And she reminded me and she was right.
10
SPEAKER_02
She said, Morgan, you were the most anxious, depressed, saddest that you ve ever been when we lived there.
10
SPEAKER_02
But the crazy thing was I had this nostalgia for how great life was.
10
SPEAKER_02
And I think I look back and I m like, it should have been good.
10
SPEAKER_02
Like if I pieced together like how I was living, it should have been good.
10
SPEAKER_02
But at the time, in the moment, I had all these other things to worry about.
10
SPEAKER_02
So that like sense of nostalgia, I think really impacts people.
10
SPEAKER_02
And it makes them more pessimistic about the current world.
10
SPEAKER_02
Because when you look back and you re like, the past used to be good, but it s not anymore.
10
SPEAKER_02
then you re bummed out about that.
10
SPEAKER_02
But I think almost all nostalgia is false.
10
SPEAKER_02
Not everybody, but for most people, most of the time things get better.
10
SPEAKER_00
Morgan Housel, same as ever in the psychology of money.
10
SPEAKER_00
Where can everyone find your books and your Instagram?
10
SPEAKER_02
Well, everyone buys books from Amazon.
10
SPEAKER_02
That s where it is, but it s everywhere.
10
SPEAKER_00
The guide to what never changes.
10
SPEAKER_00
We re going to Amazon.
10
SPEAKER_02
If you re an old school and you re still going to Barnes and Noble, it s there too.
10
SPEAKER_02
And then I spend most of my time online on Twitter, where my handle is.
10
SPEAKER_00
You know what I am nostalgic for though?
10
SPEAKER_00
Going into Barnes and Noble and just perusing the shelves when there was no Amazon.
10
SPEAKER_00
The smell in there.
10
SPEAKER_02
Yeah.
10
SPEAKER_00
I do miss that.
10
SPEAKER_02
I still do it.
10
SPEAKER_02
They re still around.
10
SPEAKER_02
They re making a comeback.
10
SPEAKER_02
There s one here.
10
SPEAKER_02
They re doing well.
10
SPEAKER_02
We have toys now for kids.
10
SPEAKER_00
We should go this weekend.
10
SPEAKER_02
We need to get the toys out.
10
SPEAKER_00
Morgan, where can everyone find your Instagram?
10
SPEAKER_02
I don t post much on Instagram.
10
SPEAKER_02
You ll find pictures of my kids on Instagram.
10
SPEAKER_02
My handle is Morgan Housel.
10
SPEAKER_02
You can go check it out there.
10
SPEAKER_00
Twitter?
10
SPEAKER_02
Same thing.
10
SPEAKER_02
Handle is Morgan Housel.
10
SPEAKER_00
Amazing.
10
SPEAKER_00
Thank you so much for coming on.
10
SPEAKER_00
Thank you.
10
SPEAKER_02
You know what s not same as ever?
10
SPEAKER_02
It is now X. See, I ll never fall for that.
10
SPEAKER_02
I m always going to call it Twitter.
10
SPEAKER_01
Thank you, Morgan.
10
SPEAKER_01
Appreciate you doing this.
10
SPEAKER_01
Thanks.