← All the Hacks: Money, Points & Life
All the Hacks: Money, Points & Life
How Long-Term Investors Actually Think About Risk with Ben Carlson
01:01:04
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- [00:00]
A
For most of my investing life, I've thought of risk as the thing to manage down. But risk isn't the cost of long term investing, it's the reason long term investing pays off in the first place. Without risk there's no premium and without the premium there is no compounding worth talking about. The work isn't to eliminate risk, it's to choose the right kind, the right shape and carry it long enough. So today Ben Carlson and I are walking through what nearly a century of market history, the Great Depression, the dot com bust, 2008 actually teach us about handling volatility, the three dimensions of risk every long term investor has to balance the inflation hedges most people don't realize they already have. And where the real tax Alpha lives in 2026. I'm Chris Hutchins. If you want to keep upgrading your money points in life, click follow or subscribe.
- [00:49]
B
Ben, I know most people know basic investing advice. Diversify. Keep your costs low. Don't panic. Think long term. Why is it still so hard for people?
- [00:59]
C
I think just because it takes so long, real success in the markets and reaching your financial goals. For most people, unless you hit the lottery, right, you sell a business, you get this amazing return in crypto or something that goes crazy in a short period of time. Most people, it takes a long time to like reach your financial goals, whatever they are. And so I think this idea of getting rich slowly is just really hard for people, especially just because of the society that we live in today where everything has to be on demand. I can listen to the music I want right now. I can get whatever I want on streaming right now. I can get the food delivered to my door right now. And I think it's harder than ever to just like slow down a little bit and have some patience.
- [01:38]
B
Do you think the way markets and just the world's portrayed in the media now, making everyone feel like everything's a little bit more scary makes it harder?
- [01:47]
C
Yes, definitely. I think maybe I've added that a little bit in my book because I talk about all the scary stuff. But my point was like this is nothing new, the being scared about what's going on and the headlines and stuff. It's nothing new. We just maybe weren't beat over the head with it. And I think the other piece is just in the past, people didn't really pay attention to the markets as much. I wrote about the 1987 crash, my blog one time and I got an email from a guy and he said, you know what, I lived through the 1987 crash. And you try to like poo poo it, but living through it. I didn't even know it happened until my ride home from work and I heard it on the radio. You know, if that happened now you're getting text alerts, you're following it tick by tick. And I think just that part of it that you can't just ignore it, you can't push it aside anymore, it makes it a lot harder.
- [02:31]
B
Yeah, I remember we did a bunch of user studies when I was working at Wealthfront. And you know, this was probably early 2000s, late 2010s, and every single person was like, well, the market's a little high. I'm, I'm a little bit worried. I'll invest next year, I'll invest next. And like for four years in a row we heard the same story. And four years in a row the market went up and people were kind of scared. But in addition to kind of presenting some of those things in the book, you also give some stories that I think kind of help. So I thought maybe I could just ask, what about Bob?
- [03:00]
C
It's funny, probably the most impactful blog post I wrote and it was like a year into my writing, it was like 12 years ago when the stock market hit the all new all time highs. It was 2013, so we hadn't hit them since before the great financial crisis. Took six years to get back to new all time highs. And I remember at the time people were freaked out because they thought, well, the last time we had all time highs, the stock market crashed almost 60%, so it's probably going to happen again. And so I just thought, okay, what if I look at the numbers and I had no idea what they would be, but ahead of time, what if you only invested at stock market peaks, but you just let your money ride from there. You invest before Lehman Brothers blew up and you invest right before the dot com bubble blew up. And all these things like how would you actually do if you just let the money alone? And the results were way better than I thought they could be. So yeah, I told this allegory about a guy named Bob who just kept his money in cash until he was ready to invest, but it was always at a peak and he actually ended up doing pretty good. And that was actually like the impetus for this book because the long term results are like, actually if you hold on and extend your time horizon, you can do pretty darn good. But I got so many people who gave me the exceptions. Well, what about this and what about that? And what if you invested here and what if you invested there? The whole point of the book for me was trying to show all those exceptions and also say it's still okay, you still can take a long term look at things. It's as long as you have the right time horizon in mind.
- [04:18]
B
So it sounds like timing doesn't really matter as much as behavior.
- [04:22]
C
Exactly right. And no one's got bad enough luck to only invest at the peaks, obviously. But I think everyone does think that there's a little Murphy's Law that exists. Like if, if I put this big lump sum bonus in, the stock market's going to roll over tomorrow. People have that in the back of their mind still. And my whole point is, yes, your time horizon is one of the most important things that you can define as an investor because that helps you define your risk better. Because people say all the time the stock market is a casino. That's an analogy people use all the time. And my retort to that is, if it is, it's the best casino ever created. Because the longer you stay at the table, the higher your odds of winning. Where at a real casino, the longer you play blackjack or roulette or whatever, the favor goes into the house. More and more the odds are against you to your first question. The hard part is trying to extend it because if you stay more short term, then the odds aren't quite as great.
- [05:10]
B
Now, I just got back from Japan a couple of weeks ago and I feel like it's often a counter story to this long term investing model. How does that fit in?
- [05:19]
C
Yes, and the thing is, I think it's the biggest financial asset bubble of all time in the 1980s. And to be honest, there's not that many books written about it, which kind of is annoying. It took me a lot of research to like really dig into what happened
- [05:32]
B
and maybe set some context if people don't have it.
- [05:34]
C
And you might know like the Japanese culture more than I do, because you've been over there a bunch. But it's a conservative culture. They're not known for going to excesses on these things. Right. In America, it's not surprising that we have a new bubble pop up like every seven years or something. Like that's just in our DNA. In Japan, they've never really had these, because they have these companies that have been around for decades or sometimes hundreds of years. Right. They have all these companies that have been around, it's more stable. And in the 1980s, their financial markets took off like a rocket ship. And everyone thought that Japan was going to take over us in terms of economic dominance. And the stock market did so well. It just blew away any other comparison to like it makes the dot com bubble acquaint by comparison. But it wasn't just the stock market that went crazy. It was also the housing market. And at, at certain points they said the Tokyo real estate on its own was at equal footing with the entire United States in terms of real estate values. It was housing, it was real estate, it was stock market everything. The stock market in Japan was trading at like a hundred times earnings. I think they said in the 30 years ended 1989, land prices increased in Japan by 5,000% and inflation only doubled in that time. It was just this one of the most insane things that we've ever seen. And they got to up to the biggest stock market in the world. They were 45% of the global market total, bigger than the US even. And everyone thought, okay, this is like Japan century, like they're going to take over. And then of course it popped. And it wasn't just like a lost decade, it was a lost three and a half decades. Their stock market just hit, hit new all time highs again last year from the top in 1990. So everyone looks at that and they go, how could you ever think buy and hold works when you have a situation like that? And my point is things got so crazy in Japan that the returns had to be so poor coming out of it. Because if you look at the very long term in Japan going back to 1970, the long term return is still like 9% per year. So buy and hold has worked over the very long term in Japan. It's just so much of those returns were compressed in the 70s and 80s that the mean reversion had to have lower returns going forward from there.
- [07:35]
B
So if you invested in the top in Japan, maybe that wouldn't have been the best outcome if you only had 20 years, but if you had 40 years, it might have been not the worst.
- [07:45]
C
And I think the people of Japan showed it's not like following that, the blowup of that bubble, that the country was in tatters. There weren't like bread lines, it wasn't the Great Depression by any means. People in Japan, they saved more money, they invested in other assets like they invested in Japanese government bonds. They probably invested in stocks outside of Japan because the rest of the world did just fine. Even though Japan was half of the market over the ensuing 35 years or something, the world stock market, inclusive of Japan, was still up like 9% per year. So even with Japan going nowhere, and at the time it was the biggest stock market, the rest of the world did just fine and pick up the slack. So the point of Japan is not that, oh, buy and hold doesn't work, long term investing doesn't work. It's that you can't just have all your eggs in one basket. And if you would have diversified and had a long term mindset, you still did just fine.
- [08:33]
B
So it's funny because now coming back to the us I've had a similar conversation with people where they're like, oh, what's in your portfolio? And I'm like, it's really boring. It's really basic. It's like VTI V E a V wo and they're like, oh, it sucks that you have so much international. Like the US has just crushed the last, I don't know, 20, 30 years. I know international has kind of done a little bit better recently. How do you think about exposure in the long term to your home market versus the world?
- [09:01]
C
The hedging against the Japan risk is a big one for me. The US has a way more dynamic and diverse economy, all right, than pretty much anywhere else. And that word, 60% of the global stock market. But it's kind of interesting because the US makes up 60% of the stock market, 25% of world GDP and 4% of the world's population. And as technology improves and AI sort of flattens the world even more, I think people around the globe are still going to get up and try to make their station in life better. So I think just playing on that whole theme, to me it's more of a risk management thing to invest outside of the US than anything. I don't want all my eggs in this one basket. And the other thing is the point of diversification is not to protect you against like bad months or bad years. It's like bad cycles, like decade long cycles, right? Like the US had a lost decade in the first decade of this century. If you're a new investor, you don't remember it, but from 2000 to 2012, the US stock market basically gave you a 0% return because we had these two huge crashes, we had two recessions, and there was plenty of other areas around the world that did pretty good in that emerging markets. You said VWO emerging markets did great during that period. Small cap stocks and value stocks. And so I guess the point of diversifying outside of any one place is just that you can kind of protect yourself when your thing that you choose doesn't do very well because eventually everything underperforms.
- [10:18]
B
Now I will say on your thesis that maybe, you know, the impact of AI and the rest of the world, most, I won't say all, but most of the companies that will probably benefit from the AI perspective are US companies.
- [10:31]
C
In the US market, people say, listen, the S&P 500 gets 40% of its revenues from overseas already. And I think if you just invested in U.S. stocks are going to be okay over the long term. Probably. I think, yes. I think it's more about like, do you need some sort of compliment for when it doesn't go well? And I think that that's a personal question. And where I come down on this in the book is mostly investing is very personality driven and your emotional makeup and your intestinal fortitude. And I think it just depends, like do you have the ability to stick with something when it doesn't work? And I think if you do, that's great. If you don't, you probably need to diversify a little more. There's no right or wrong way to do it for people. But I think that's kind of the way that I look at it. Me personally, I, I need sort of an offset, I need some sort of counterbalance. Even if the last 12 or 15 years, I feel like an idiot for doing it. Point of diversification is that like you're always apologizing about something.
- [11:28]
A
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- [13:36]
B
Upwork.com if diversification hedges against these bigger, bigger things. And I actually haven't thought about it like this, but the argument back to the person criticizing your international exposure is like, I'm not trying to build a portfolio that maximizes the returns in this period. It's to prevent these catastrophic events. And so I'm okay taking a hit to, you know, whatever the US would have gotten if I was all in on it. But I also wonder with kind of the, I don't know, regulatory environment, the government involvement is a kind of crash like Japan or even early 2000s, is that even possible today?
- [14:14]
C
I would say we've probably taken like the Great Depression off the table. I think that's the kind of thing we've learned from where they look back and they go, man, I mean, the Fed was still relatively new. The Fed was created in 1913 when the great Depression happened. They weren't really as big as they are today. And it does seem like every new crisis we kind of learn a little bit. Like we wouldn't have had response to the pandemic, the 2020 crash, like we did if it wasn't for going through 2008 first and realizing like, oh, if we throw a bunch of bazooka at the system and the Fed lowers rates and they buy a bunch of bonds and the government sends out money, we can actually shore things up. So I do think that extreme left tail of the Great Depression, 25% unemployment and an 85% crash. I could pretty confidently say that we would be okay there even short of an alien invasion. But even then, if we had an alien invasion, we have a lot of infrastructure to build back, you know, So I think even then we, we'd probably be okay. So I think we've taken that off, but I, I don't think that we've necessarily taken off like the dot com bubble. You and I are pretty similar age. In our, sometime in our lifetime we're going to see the stock market cut in half again. I could pretty confidently say that. I think Charlie Munger said, listen, if you can't see the stock market get cut in half two to three times in your lifetime, you don't deserve to be a stock market investor. Something along those lines. It's hard for me to think that there's not going to be some sort of financial crisis where we take things too far. That's probably my biggest worry, the fact that we do just keep throwing money at these things. And it seems like we've kind of figured it out. You know, the times for these crashes get shorter and shorter. The COVID crash was over so quickly. It was like the fastest 35% back to all time highs in history. I'm of the opinion that risk doesn't ever go away. It just kind of changes shape. And I don't know what the other risks are that we're creating. Whether it's complacency or something that, you know, maybe we're dialing it up for a future crisis that we can't throw money at. I don't know.
- [15:59]
B
Is it possible for things like AI to be massive disruptors and still crash markets? Especially taking into account that many of the players aren't even in the public markets.
- [16:11]
C
If you wanted an obvious risk, AI is the one, right? Because it can cause excess. And I think that's the thing that for years people have been predicting that there's going to be a recession in the United States. And the problem is we haven't had a ton of excess in the economy. There's this old line that you can't kill yourself jumping out of a, a six foot story window. You need to be way higher up. And I think that's the thing that AI could do is just bring the excesses way up and there's so much spending and that people take it too far and the expectations are pulled too forward. But everything we wanted out of the dot com bubble happened in Mora. I'm sure if you would have asked people who like, really started the Internet in the 1990s and really got the net going. Here's the things we're going to have in 20 or 30 years. We're going to have streaming video, we're going to have YouTube, we're going to have anything you can listen to. We're going to have this little glass piece of equipment in your pocket that has the world's information on it. They would say, that's everything we ever wanted out of the Internet and more. And we still had to go through the dot com bubble to get there. I think that would be the argument against AI.
- [17:03]
B
Not against it as a utility.
- [17:05]
C
Yeah. Just against it that it could still cause a crash. Now it's funny because my book is big on financial market history because I think it's really important to understand what the range of outcomes could be. And anyone who studied financial market history would look at AI and go, this is definitely a bubble. It's just like the railroads. It's just like the dot com bubble. But I think if you've also studied history, you also realize that like these rules are meant to be broken. And there's nothing that says that it has to lead to a bubble, this boom and bust. It certainly is possible that the demand for AI is going to be so strong that all this spending is going to lead to an ROI for these companies. And maybe there isn't like this severe disruption. Maybe there's a bunch of companies that get disrupted and their stock prices fall and people in those companies lose jobs. But maybe all of this trillions of spending actually does pay off for a certain amount of companies and it makes workers more productive in it. There's this magical baton handoff. I wouldn't bet my life on it, but that's possible.
- [17:58]
B
And if we've got to play it for the long run, there's plenty of things we can worry about. But is the best answer to even acknowledge them or just kind of move on, Just kind of accept it and not think about it and focus on other things? Like is it better to focus on our income?
- [18:12]
C
Yeah, I do think a lot of investors spend 90% of their time worrying about stuff that happens 10% of the time and maybe cold. Well, that's risk management. But yeah, you're right. I'm a big proponent of focusing on the things that you can control. And you mentioned it, your income. I think one of the things that binds all Americans together and there's not many things these days that bring us together, is complaining people Love to complain. You're a parent, you know, if you get together with another group of parents, the first thing everyone says is, I'm so busy, I am so tired, like, and everyone can kind of like get in on the same train. And I think people love to complain about the government and about taxes and about everything else that's going on in the world, the geopolitics and what the Fed is doing. And none of that stuff was within your control. And you mentioned your income. That to me is like one of the few personal finance areas where people don't spend enough time worrying about that you can actually increase your savings rate. And I think especially when you're young, your investments don't matter that much. How much you save matters way more to your bottom line than your investment returns because it takes a long time for compounding to finally kick in. And so, yes, I do think focusing on the stuff that is within your control makes a lot more sense than just complaining about the world at large.
- [19:17]
B
Now you mentioned you dive into a bunch of stories. Is there another historical story maybe similar to Japan that isn't told that often that you think puts a lot of what's happening in context that might be helpful?
- [19:29]
C
Well, certainly the 1970s situation, and I think because it had been so long since we had higher inflation, I think I even underestimated like the psychological effects of inflation. The 2020s are nothing like the 70s, but I think the 70s is a pretty good case study of like the worst case scenario for inflation in the US and it was, it was worse, really, really bad. For the 1970s, I think it was double digits in a year, finishing a year like three times. In the 1970s, inflation basically never finished below 3%, which is kind of like the long term average. I think in like 8 out of 10 years it was 5% or higher. So inflation was crazy. My father told me this story. In the late 70s, inflation was so out of control that his job gave him two raises in the same year because they had to try to help people keep up. Wages have to increase as part of inflation. And I think that period of time was painful because it was more like death by a thousand cuts than this big huge crash. And there was a crash. The stock market fell 48% in 1973, 1974, but the stock market was still up at 6% per year in the 70s, which isn't terrible, all things considered. But inflation was running at seven and a half percent. So on a real basis, you lost. And it was the only decade where stocks Bonds and then cash, which is like T bills, all lost to inflation. That had never happened before. It's never happened since. Unless you include gold and commodities, which were basically impossible to invest in back then. Like, there was no ETFs. And, you know, the only asset class that really helped you in the 70s was housing. And it helped in a couple of ways. One, it actually outpaced the level of inflation in terms of returns. But two, it helped take your debt out. Right. If you take debt out and inflation is higher, it essentially brings down the nominal value of your future payments. Right. So debt is kind of a hedge against inflation.
- [21:12]
B
If it's fixed rate locked in.
- [21:15]
C
Yes. If it's fixed rate. Right. Yes. If it's floating rate, then you're. Yeah. In that situation, you're screwed. The 1970s is kind of when housing became this thing in the us Especially for the middle class, like, oh. Because people saw it's actually kind of a pretty good hedge against this kind of thing. But yes, getting back to like the psychology of the 2000s, I completely underestimated how people would react to inflation. I understand it now, but the psychological impact of inflation, even, you know, this one time increase in 2022 where we got to 9% inflation and how people reacted to it, I think that is a risk that was obviously underestimated by a lot of people.
- [21:48]
B
How do we think about inflation now? I. I feel like my entire life I haven't really seen it. I feel like right now I just got this email from our dog walker and he was like, oh, we got to raise rates because they drive a bunch of dogs out to this place to go run. And he's like, gas prices are going up. And I was like, we have two electric cars. So like, I don't feel the gas price changes right now, but I looked at average gas prices just out of curiosity. I'm like, how much have they gone up? Because like a 15 raise to dog walking. That seems high. And gas prices now are higher than they were, you know, a year or two ago, but they're not actually that much higher than they were like four or five years ago. There were like times in the last five years that they were at the same levels. So is inflation something we could see and, like, what do we do about it? Because I don't feel like most people listening right now have dealt with it ever.
- [22:38]
C
The gas price one is hilarious because it's just these big, huge numbers you see all the time. So that's what people just immediately latch onto. And yeah, I think if you inflation adjusted the gas price over the past 10, 20 years, it's not that bad on a comparative basis. But I think it's just the slow burn of inflation. So the millionaire next door is done. I think they hand it off to every financial advisor when they become a financial advisor. Here, read this. This is your personal finance bible. So that was a million dollars in 1996. Today you need well over two million dollars to get that same level of spending as you had in 1996. So I think the number that we use with our clients is something like if you have a 3% inflation rate, it cuts your money in half in a little over 20 years. If you have a 4% annual inflation rate, it cuts your money in half in 17 years. So the biggest thing with inflation is just that, whether you like it or not, you have to invest in something if you don't want to see the value of your dollar decline. That's the whole point of investing in the long term for most people is keeping up your standard of living because it's. The money's going to erode if you just bury in the backyard.
- [23:37]
B
And so, you know, we can keep up with it by investing. Are there other things people don't focus on as much as they should when it comes to hedging on inflation?
- [23:46]
C
Well, your point you made earlier about income being indispensable at work and giving yourself a raise over the rate of inflation over time.
- [23:54]
B
Now you said giving yourself a raise.
- [23:56]
C
Well, increasing your income over time. Right. I think it's hard to do. And I think for our generation, it's hard because we started out in this really terrible jobs environment coming out of the great financial crisis where most people were told, you should be happy, you even have a job right now and a raise. Are you kidding me? No. So I don't think people are very good at getting raises, but I think you have to somehow make yourself indispensable at work to be able to increase your income and keep up with inflation that way. And that's one of the hard parts for most people because again, the compounding part of investing, it takes a while. In the short term, inflation tends to be kind of bad for the stock market. 2022 was a bear market because inflation was so high, interest rates came up and all these things. But over the long term, the stock market remains your best inflation hedge. But it takes time. It's not like it happens overnight. It's sort of like finding like an inflation hedge in the markets or something. Right. I'm going to own gold or I'm going to own commodities or one of these things, a lot of it is your personal finances. And because you and I know no one's personal household inflation rate matches the government data, when the government puts out their inflation data, people get really mad at it because they go, no, that's not my inflation rate. You said you've got electric cars. I don't spend on this, but I do spend on this. And it depends, do you have daycare for your children? Are you sending your kids to college? Do you spend a lot of money on meat prices? Whatever it is, your personal inflation rate is much different than what the government reports. So a lot of it has to do with like your own spending. And for most people, the two biggest areas are transportation and housing. If you look at the collective budget of the entire country, the BLS has all this data. 50% of all household spending goes to housing and transportation. So if you get those two things right, your household budget is not that bad. That's why I think, like you said, a fixed rate mortgage is helpful from a planning perspective. But if you get those two things wrong, then it doesn't matter how many Starbucks coffees you drink or don't drink, it's going to put you in a hole.
- [25:43]
B
And if you think of inflation as a thing that could approach kind of levels that we've seen in the past, not focusing on where they're at now, then a fixed rate mortgage at today's rates actually feels like it could be a win.
- [25:55]
C
Yeah. So let's say. So, yeah, there's 6% today or something. Inflation is running at 3. If it ran a little higher on inflation adjusted basis, it doesn't sound as bad as you think. Right. But think about the people that got a 3% inflation rate or a 3% mortgage. They're effectively borrowing for free on a real basis.
- [26:11]
B
Yeah. But I think the nice thing that we often forget about mortgage rates is yes, you know, there might be some refinance cost, but you can lock in a 6% rate. And if rates go to 10, you don't have to do anything. If they go to three, you could just go get the 3%.
- [26:24]
C
Yes. And from a financial planning perspective, just knowing what that mortgage payment on a monthly basis is going to be, sure there's ancillary cost. Owning housing, your property taxes could go up over time. But I think just having that one payment locked in and knowing it ahead of time is wonderful for your peace of mind during times like this. And that's I Think one of the reasons why when we had 9% inflation, we never had a recession because, remember, all the people were predicting we're going to have a recession in 2022. That never happened. And one of the reasons was, I think, because so many people locked in those low rates and they locked in their payments and they didn't have to worry about inflation messing with their biggest costs.
- [26:59]
B
If you can do that and you can think about the long term, you kind of set yourself up for success. How do you ignore all the noise that makes it so hard to focus on the long term?
- [27:09]
C
It's impossible, honestly. One of the things that all financial advisors say they tell their clients, just ignore the noise. And it honestly, it was great advice, like 15 or 20 years ago, awesome advice. It's impossible to ignore now. And I think what you have to do, and this is only going to get worse in the information age with AI, is that the fire hose is just going to get bigger and bigger for all the stuff that you're going to have to pay attention to and all the content and all the everything being thrown at you, all the opinions and analysis and everything. It's going to be easier for people and businesses to produce content. So it's not going to get any less, it's going to get more. So I think you have to figure out ways of filtering it and paying attention to the right sources and maybe defining the stuff that you will invest in and maybe the stuff that you won't invest in. So my colleague Josh Brown, he always says that a good wealth manager is like the bouncer at a club standing behind the velvet rope, kicking most of the riff raff out, most of the time only letting a few things in. And I think that's the thing you have to realize as an investor these days is that like, the temptation to change up your plan has never been greater. It's never been a greater time to be an individual investor because there's so many options and stuff to invest in. Just think about how when I first started investing, there was a handful of Vanguard funds to invest in and now there's all these ETFs that you can invest in just about anything. There's hedge fund strategies that are available for pennies on the dollar and ETFs that would have been unthinkable for individual investors 10 or 15 years ago. The problem is the barriers to entry are so low to make changes to your portfolio. You're constantly thinking like, why don't I own some of that and I'll put some of this. And because commissions are zero, I can buy a little bit of this too. And so that's, I think where the problem is is that all that noise and you constantly give into it. I think you have to have some like limitations on yourself.
- [28:57]
A
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- [30:56]
B
limitations on how much gets to go into the fun area and what you invest, but I also think I use this rule in life in lots of Places where it's like kind of define your criteria and then it makes decision making easier. So if you say, we don't take flights that leave before 6am and if you can actually make that a rule, then it's way easier to not be caught off guard by, oh, well, I could save 75 bucks if I leave at 4:30. Because you're like, you know what? I decided this rule and I think you can push it further. And this is like a mind trick maybe. But sometimes it's like, well, I'm not a person who's willing to sell my morning. So, like, you make it part of your identity that you don't do this thing. And I don't mean that like you go get T shirts. It's just like you kind of tell yourself, like, I'm not a person who would make this commitment to how I want to live and then break it. And now you're kind of like encoding these rules and into your personal story. It just makes it a little easier to act. And I don't know, I might not work for some people, but I find that there's so many temptations. Maybe you saw this USVC launch. It's like a new venture capital fund and anyone can invest in anthropic. It sounds amazing. And I saw everyone getting excited now. I just couldn't help. I was like, oh. I just like, kept hovering, like, how much do I put in? I still haven't done it, but it's just so tough.
- [32:13]
C
So anytime there's a new fund that comes out, yeah, I get questions from people inbox and, hey, what do you think about this? Should I invest in this?
- [32:19]
B
And.
- [32:19]
C
And that's to your point about having guidelines I'll give one for. On a totally different subject, with our firm, when we hire a new employee, one of the rules is we have to go out to dinner with you beforehand. We have to, like, get to know you on a personal level. It can't just be a zoom meeting. You have to come to us, see us. And then what we've decided is if it's not an automatic yes, then it's an automatic no. If there has to be like, back and forth, like, should we, shouldn't we? Everyone has to just be kind of like, yes, this person fits in the culture. And I think that that automatic yes or automatic no makes your life a lot easier. And so it could be some sort of buckets. We have a client who likes to make personal investments with people in the local community, and we said, that's great. But you have to find a way to say no sometimes. So let's give it a dollar amount. Let's put a ceiling on it after you reach your ceiling. Every other investment after that is no. And that puts some constraints on the idea that, okay, maybe you're going to be a little less willing to say yes all the time because, well, geez, I only have a certain amount to spend here. And so I think that could be, you know, for a lot of people, that's allocations for those new venture capital funds that come out. Maybe you have a piece of your portfolio you carved out that's just for that stuff. 10% of my portfolio, I could put any of that fun stuff in it. I want. The other 90% I'm going to kind of leave alone and let it do its thing. That's where people get into trouble, is not having any constraints on their process at all.
- [33:32]
B
You wrote about this penalty kick study and it was one of my favorite anecdotes because I was like, are we just hardwired not to do the right thing and sit still?
- [33:42]
C
This researchers in Israel looked at all the penalty kicks and I was never a soccer person growing up, but both my daughters play and my oldest daughter, when she was like 8 years old, was in a tournament and they, it went to sudden death. No one scored. So they did penalty kicks. And it was like the most nerve wracking moment of my life. You know, her getting up there to kick. And obviously the striker has a big advantage over the goalie because the goal is so huge. And they looked at like, what do the goalies actually do? And 95% of the time they dive left or they dive right. Right. And if they get one of those saves, it's amazing. It's on SportsCenter. It's a great highlight and, and it looks amazing. But they said the striker kicks it to the side a third, down the middle of third and the other side a third. So like they kind of, the striker breaks it up. So they said if the goalie would actually just stay in the middle occasionally, play a little game theory, sometimes going to dive, sometimes going to stay in the middle, they could probably improve their save percentage enough to have a meaningful, you know, distinction in the game. But they asked the goalies about it and they showed them the data and the goalie said like, I can't, I can't stand in the middle and look like an idiot. The ball whizzes by me. I'm just standing there. And that's like the idea that, yeah, Humans are just hardwired for action, and inaction makes us feel like we're not doing anything. That's why, that's why people sell during bear markets, because they want to have their hands on the steering wheel. They want to do something like just, just rip the bandit off and get me out of here. And it's really, really hard. And like I said, the barriers to entry are so low now with $0 commissions and fractional chairs and all these new funds, it's never been harder to just sit on your hands and not do anything if that's what your plan is telling you.
- [35:09]
B
And at what point do you reevaluate that plan? Right. I've been probably pretty good for the core part of my portfolio at, like, here's what I'm gonna invest in. It's, you know, these four ETFs, and they're just gonna sit there. And I don't think I've revisited that decision in maybe a decade. Is there a window of time that people, because of everything that's changing, should take a pause and say, okay, if you're on the other side of this, you know, you mastered the hands off, let it ride. Maybe it's 80%, 90% of your portfolio, but you're not touching it. Is there a point in time that you should check in and think, okay, maybe I should decide if that's the right approach?
- [35:44]
C
I think most of it is life events. Now, sometimes as wealth managers, we have to look at the risk reward set up in the present to understand, like, are there certain areas that make more sense to do a small shift around the edges? But for most of our clients, it's usually life events that cause you to make a change in the portfolio, not something that's going on in the market. It's not like rising inflation or falling rates or something like that, or the stock market. Sure, there are times when that constitutes something, but it's more like we're going to retire a little earlier than we thought, or we're going to take a break from work for a year and go on sabbatical and travel around the world. We're going to buy this vacation home, our children's getting married. We're going to give away our inheritance earlier. Some sort of life event that causes you to go, okay, now it's time to change the plan a little bit. Right? We're going to do something different with our life now. Let's revisit it. I think that's the kind of thing that you have to do. And to you doing it for 10 years and maybe not having any big changes, you know, it's probably some sort of family thing with you, right? We've decided, you know what, screw the kids. They're going to have to pay for college on their own. We'll take their 529, whatever it is. I think it has to be something like that that causes you to make a change.
- [36:50]
B
Yeah, I think the biggest one for us recently has just been the uncertainty of the future for the line of work we're in. Like I'm creating content. I don't know in five years what that looks like. I genuinely don't know. And I hear a lot of people feeling right now for the first time in a long time, like, are the skills I have right now skills that are going to be relevant in the market in 10 years, and what does that look like and what should I do differently? So I guess for someone feeling that right now, I don't think any of us, you or I, know what the future actually looks like. So we don't have to tell people what it's going to look like. Are you going to have a job? Is it going to be what? But how do you start to think about planning around that feeling?
- [37:31]
C
It's funny because you on the west coast, you're in the middle of everything, right? So for you probably you're hearing about this stuff more and it probably freaks you out even more than anyone else. It is funny listening to like the tech versus finance people talk about it and the tech people, when you talk to them and hear what they're thinking, what they think is coming, it's both exciting and very scary. It's funny. I probably worry about my kids more than myself when it comes to this. Maybe I shouldn't. Should put your action mask on first. But the way that I look at this and like, let me use the wealth management industry as an example for this. So for years, because all the fund expense ratios came down because of index funds, so actively managed funds had to then decrease their rates. And for years the fund managers have been saying, like, everyone in the financial advisory community is going to eventually have to decrease their fees. It's going to come for you next. We had it in the investment fund management industry. It's coming for investment advisors next. And we were always kind of thinking that that was the wrong way to think about it. It's not that the fees are going to fall, you know, it's that the margins are going to fall and you're going to have to offer More services. So from the time that we started our wealth management company 12 years ago, we've completely changed our service model. We didn't do any of this at first. Now we have an insurance arm, we do tax prep, we have estate planning, we have a 401k business. We have all these different things that we now do for clients that we didn't in the past. And the client's fees haven't changed. It's just that we offer more services. And I think that's maybe going to be what happens to a lot of people in the future. If AI is going to allow everyone to be more productive, everyone's going to have to produce more. The service model is going to have to get better. The video clips are going to have to get better. If you're doing content, I think that's probably where we're going. There's a lot of people, if they're going to keep up, they're going to have to keep improving.
- [39:07]
B
I think that's good on where it's going. But as far as what to do about it, right. If you're stressed and uncertain about that future, you know, I guess my answer is, do the concepts of the financial independence movement feel more interesting to people that have those feelings? And I would also add, I don't think that you have to want to retire early to make yourself feel better by saving more, you know, like saving more money because you're feeling a little bit uncertain is different than I want to quit my job and never work in five years.
- [39:38]
C
Right? Yeah. So you're right. Having a bigger margin of safety, having a bigger pile of liquidity. It's funny, I get questions from people all the time that say I saved in my tax deferred retirement accounts for years and years and years. And then I realized I. I actually kind of want to think about retiring a little earlier, but I have no flexibility because most of my net worth is in these inflexible accounts. Even though I got the great tax deferral. So for a lot of people that it could be increasing your flexibility. So even though you don't get the tax deferral, it's shoveling more money into a tax brokerage account, Right. It's having a higher cash savings account. Because you're right, the future is never known with certainty. Obviously, everyone exists with this irreducible level of uncertainty, but it does feel a little higher right now for a lot of people and a lot of different walks of life. And it'd be nice to know how to plan for this and there is no plan, there's no blueprint for this because we've never done it before. I do think, yeah, increasing your margin of safety especially, you can see this stuff coming down the pike. I've heard from people in like research analyst positions who have already been laid off and they said, wow, I can't believe this happened to me already. I thought this is five years away and it's happening and they didn't have time to plan for it. So yes, if you have time to plan for it, it makes a lot of sense to me.
- [40:44]
B
I also have to think that it might be that certain jobs aren't as necessary, but then other ones become more necessary. Can't remember if I heard you say it, but like there are more radiologists now than before, even though people thought this would replace that. Because now more people can get these tests and more people are needed to help interpret them. So I think the stay curious, stay interested, keep learning is kind of part of it. And then if you're stressed about it, then you know, you can adjust your financial situation. And that's not a lifetime choice. I think one of the hardest things that even for me to process is that when you make these big changes of, okay, well, we're going to cut our spending or we're going to change something, you know, it feels permanent. I remember when we had childcare, it was like, man, how are we ever going to keep on track for retirement when we add this massive childcare cost? But we only had it for four years, but in our minds it was a permanent increase in our fixed expenses every year, but it really was only a four year thing. So I think that's another challenging thing for most people is to look at their current situation and realize that maybe some of those things aren't going to be there in the future, even though it feels like that.
- [41:49]
C
So the daycare thing for us, I equated it to we had to pay for college for four years for three kids without planning for it ahead of time. And it was like we added another mortgage payment. So yeah, for two years we had three kids because we had twins. We had three kids in daycare at once. What I did when my wife got pregnant with twins is all of our money. I started setting aside a way bigger pile of liquidity to pay for daycare. Right. And you're right, I had to divert from all this attention that would have gone into these other accounts, which probably I would have loved to have not done. But guess what? Sometimes life gets in the way.
- [42:19]
B
But it wasn't permanent.
- [42:20]
C
No, yeah, you're right. It wasn't permanent. And then thank God for good public schooling. Where I live, they go to public school and I feel like I'm getting a raise, right, because I'm not making those payments anymore. So you're right. These things are fluid. And I do think that the transition, even if AI is as disruptive as everyone thinks it is going to be, the transition period is going to be so rocky, there's probably going to be businesses that lay people off that realize, oh no, we overdid it, we have to bring people back. And I think the give and take and there's going to be unintended consequences. You mentioned the radiologist. I talked to an equity research analyst manager in the past week and he said we've implemented this whole huge AI program that allows us to track and follow and recommend more stocks than ever. They sell research, Right. They're actually based in San Francisco. And he said, we've increased our headcount by 40%. There was thousands of stocks before that we could never track, we could never provide research on. They just kind of laid in the dustbin. No one cared about them. Now we have the ability to do more research and so we have more of a headcount. And so I do think there's going to be things like that that are going to be, oh, wow, I didn't think that would happen. So I have a very open mind about it now. I'm a glass cell person. I think you probably are too. Maybe we're being naive, but I tend to think that there's going to be outcomes from this whole thing that we go, wow, I would never would have expected that.
- [43:34]
B
Do you think an optimistic approach is better when it comes to investing? We don't need to argue about whether it's better for life, but for investing, does it make it easier?
- [43:45]
C
Absolutely. I do think if you're like a hedge fund manager, you probably have this disposition of the worst case scenario at all times. But I think if you're a long term investor, if you're not optimistic about the future, why are you investing in the first place? Is kind of the way that I look at it. I think that you kind of have to. If you're going to take a long term outset and think, I think people are going to get up every single day and try to better their station in life and it's going to lead to ingenuity and progress and the pie is going to keep getting bigger. That's why I invest that's the way that I view the world, that there are going to be setbacks along the way. The whole point of my book was to show all the setbacks that have happened. And guess what? Even inclusive of all those setbacks, we've still had the last hundred years, 10% annual returns in the stock market. Even with the 1970s, even with the Great Depression, even with the dot com bubble, even with the great financial crisis, all this bad stuff. It's so it's kind of like two steps forward, one step back. And I don't think that you can be a good long term investor if you're not a little optimistic about the future.
- [44:41]
B
And I think those setbacks can often be viewed as negative. But I know, you know, you talked about Federer to kind of give another sports analogy. Losing a point like getting set back might be part of a strategy.
- [44:55]
C
So he gave the commencement speech at Dartmouth a couple years ago. It blew my mind when I read it because he said that he played more than 1500 singles matches and, and he won 80% of those matches, which is kind of just an insane win rate. But he only won 54% of the points, which is almost perfect for the stock market because the stock market on a daily basis for the last 75 years or so, it's been up like 54% of the time. It's a way smaller amount than you'd think. The stock market is up 54% of all days and it's down 46% all days. But the further you go out, the better it becomes. And then when you get to like on an annual basis, the stock market since 1950 is up like 4 out of every 5 years on a yearly basis. And that matches almost perfectly with Federer. And his point was you can't look at every one of those individual short term setbacks. You have to look for like the longer, smaller edges. And I think a lot of people have realized this too, that instead of going out and just trying to beat the market, I'm going to get alpha and I'm going to outperform. And a lot of people have decided I'm not playing that game anymore. I'm going to look for other ways to add value, whether it's increasing my savings or being more tax efficient with what I'm doing, I'll add little areas around the edges that will compound and grow and that will help me better than trying to outperform the market.
- [46:03]
A
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- [47:12]
B
T. Thank you for being here today. You can find all the links, promo codes and discounts from all all our partners@AllTheHacks.com deals. They're all brands I love and use, so please consider supporting those who support us. Are there any of those little areas that you think are kind of not talked about enough?
- [47:31]
C
Well, I mean obviously behavior is the big one that that one's talked about all the time. One of the ones that we're seeing now in my practice the most is taxes. And we're having wealthy individuals come to us and saying listen, I put money 10 years ago into Nvidia or Tesla or Apple or you know, one of these names and they took off and I made a ton of money and I know I need to diversify because I don't want to have to get rich twice. Help me do it in a tax efficient manner. And there's way more tools available now to get out of a big position like that or if you sell a business, the tax alpha. That's where I've seen the greatest growth from the wealth management industry in the last five to seven years is the ability to keep deferring taxes so you can compound your capital. Now of course someday you pay the taxes, but there are a lot of tools available these days that allow you to keep deferring taxes and potentially offset them using tax loss harvesting. And so I think the Fact that the technology has improved, I think that's one area where wealth management. I've seen a huge improvement on helping people on it after tax. And I think more people are now aware it's not the gross number that matters, it's what do I get to keep net after all? Taxes and fees and everything else.
- [48:38]
B
Yeah, gosh, I have two things. One is that you defer, defer. But at least for now, you still get a step up when you hand anything to your children. So it is possible to keep those things with the lowest cost basis as things that if you were going to hand money down in someday in the future, it is possible to erase those
- [48:56]
C
tax liabilities or, or you give them away to charity. Right. And never sell. And so yeah, it's an estate planning thing as well.
- [49:02]
B
There are a couple lessons I got from a former manager who I've interviewed a couple times, Andy Ratcliffe. And one was, you know, he always says, you know, as soon as you find some wealth, everyone tells you, you get a financial advisor. He's like, get a tax advisor. But he's like, both are helpful, but the taxes are really important. And getting that right can be the difference of how much you have to deal with the financial advisor to plan around.
- [49:23]
C
We have a tax advisor in my practice and he's the one I lean on most heavily for financial advice because I want to think about it on an after tax basis and there's constantly different ways to view it.
- [49:33]
B
And then the other thing he said, which is similar to the Federer point, is he's like, everybody always talks about batting average in baseball and I'm not a baseball person, but he's like, at the end of the day, all that really matters is the slugging percentage. Like what is happening if you're someone who hits the ball every time, is that as good as someone who just gets home runs, but maybe one in 10 times. And I am not enough of a baseball person to tell you what the actual numbers that matter are, but we often focus on, you know, what happened today, what happened tomorrow, when at the end of the day it's like, where am I 10, 20 years from now? And what was the magnitude of that outcome?
- [50:05]
A
Right.
- [50:05]
C
That's the hard mindset to get to.
- [50:07]
B
How does that change over time? Because it's easy to tell someone in their 20s or 30s or even 40s, like, this is a 30 year game. The way to win is to play for a long time. When someone's 5, 10 years from retirement and they're listening to this conversation they're like, I don't have a long time to invest my money. How do they take some of this advice and apply it at that stage of life?
- [50:30]
C
It's interesting because we have these conversations with retirees all the time. And part of it is, yeah, you need to be more diversified. You probably need more liquidity in something, some sort of fixed income or something that offsets equity risk. So you don't want to be selling your stocks when they're down, when you need to spend the money. That's why most people diversify and have a more balanced portfolio as they age. On the other hand, people are now living longer than ever. So the New York Times had a story this week about longevity, and they said there's a 64% chance that a couple who retires at 65, that one of them will live to at least in their 90s. So people are living longer than ever, too. So we have to kind of balance out that need for safety and liquidity in retirement with, you still have to grow your money, potentially 20, 25, 30, 35 years in retirement, and maybe you still have to accept some risk. You can't just completely get off the ride. And so there has to be some give and take there. I also think the whole idea of risk, and I write about this in the book a little bit, it means different things to different people at different places of their life. A bear market for a young person shouldn't bother them all that much, like their human capital is their biggest asset, their future income and savings. You should probably hope for a few bear markets early on in your life. So you're putting money to work at lower prices. But it's way more risky for a retiree who just retired and they have no more income coming in and they maybe can't wait out a long bear market as much anymore. That's how you think like risk. It's not always the same thing for every individual investor.
- [51:54]
B
When we talk about risk, when it comes to people and investing, I think we often think the risk in the market. Right, and you talked about a few of them. But are there a few risks that you think people are just hopefully not thinking about when they think about risk with their money?
- [52:09]
C
I mean, obviously the biggest risk for most people is either outliving your money, that's longevity risk, or not reaching your financial goals. That's it. There's this great story from Jason Zweig, who went down to Boca a number of years ago and interviewed all these retirees that lived in a nice community on the Beach. And he asked one of the guys, he said, so, you know, you built up a portfolio of four to five million dollars through retirement savings. Like, did you outperform the s and P500 to get here? And the guy says, I don't know if I did or not, but either way, I made it to Boca. And I think that's the thing is, like, looking too much at the outside factors. And I dealt with this a lot in the nonprofit space where they were so focused on benchmarks and their peers, as opposed to their own situation. So they would. Every quarter they would look at their benchmark, but they'd also look at what did their peers do. And they were so solely focused on these benchmarks as opposed to just figuring out what their own risk profile and time horizon is. I think that's where people get in trouble, is confusing their time horizon with someone else's or their risk profile. Like, you see someone hit it big and you go, man, I wish I would have done that. But you don't necessarily understand what it took to get to that place. And there's also the survivorship bias of. You also don't see the other million people who tried a similar strategy and didn't hit a grand slam, right? They struck out. And so I think that's the hard part, is not understanding what goes into the process of what other people are doing. And that gets back to, again, focusing on your own situation.
- [53:27]
B
And when you look at your own situation, this actually came up last night. I was talking to a friend who doesn't have children, and, you know, he lives in the Bay Area. And we were talking about the cost of living in the Bay Area and having children. And I was like, well, you know, you got a lot of questions to ask yourself. Are you gonna have childcare? Do you have family to help with the kids? Are you gonna send them to private school? You're now gonna buy four or five plane tickets, two hotel rooms, like. And we started adding these costs up, and it was very easy to get to a point that he was like, I don't even think my salary would cover that, you know? And I was like, well, two things. One, you don't have children right now, so.
- [54:00]
C
Right.
- [54:01]
B
Don't let it freak you out. So one was like, it felt scary. But the other was my wife was in the room and she heard it and she was like, oh, my gosh, like, do I need to go get another full time job? I. All these costs. And I was like, well, hold on. It's so easy when you Hear any piece of something out of context or out of a planning session to think, do I need to change anything? But the right answer is probably, oh, let's see how we're doing. Like, let's see how our income actually matches up with our expenses. Let's see how we are on track for whatever we want to do in our life and how we're saving. But it was so easy for her, even with the context. Right. She listed the show, she talks to me all the time. Like one anecdote sent her in this mode of, oh, do we need to change something big right now?
- [54:44]
C
I've told a lot of people I don't think anyone is ever fully prepared financially for kids. And sometimes like thinking about it too much is because obviously you stop spending as much on yourself. Right. You stop caring about as much on yourself. So there's, there's trade offs with everything. You being the points guy. I think my one big request to you that my wife uses AI more than anything now is, yeah, we have a family of five. And you're right, we, we do five plane tickets. And also it's impossible to find hotels that will allow five in one room. Yeah. So two rooms. Finding a place that has suites is way harder than you think. So that's all my wife does with AI now. It's like our travel agent of finding a city or we're going to where we have to get a hotel room for night and finding a suite that will have us pull out sofa bed for five or something is impossible.
- [55:25]
B
Or I think Hyatt has a family rate where it's not well documented. But it's like if you and I could be wrong if it's Hyatt, but it's like you could book a room and you get the second room half off if it's for your family. But it's not like it just shows up when you search. So that's, that's one little, little one there.
- [55:39]
C
Getting back to your friend though, that's one of like the people that I wrote this book for. The people that immediately they go down the rabbit hole of things that could go wrong. And like, what about this risk and what about when this happens and how about this? And sometimes you just have to take a leap of faith, which sounds scary and almost dumb, but that's the whole thing about taking risk and is the reward worth it? And I think for a lot of people having kids, of course it is. But it's hard to get your planning brain out of that in your risk management Brain of, oh, my gosh, this is never going to work. The same thing happens in the markets. Like, if this could happen, I'm totally screwed.
- [56:11]
B
But data has shown that it generally, almost always will be okay, right?
- [56:15]
C
Yes, that's, that's the thing. But you look at historically, you go, of course, that was a great buying opportunity. Of course the stock market came back from that. But what about this scenario that we've never seen before? And that's why I wanted to look back at history, because I think just history of markets and economies and human beings is just that it's always something different. No one could have predicted all the stuff that happened this decade. There's no way anyone in 2019 would have said, we're going to have a pandemic and inflation's going to spike and all these different things that could have happened. We're going to have remote work out of nowhere. No one's going to have any time to train for it. We're just going to do it, rip the band aid off. And that's the point of, like studying history is just knowing that it's a series of unknowns and surprises.
- [56:51]
B
And so for somebody who's thinking of this conversation and kind of maybe I need to rethink how I'm handling my risk, what I'm doing, what should they do tonight?
- [56:59]
C
There's three ways you think about your risk profile. It's your willingness, need, and ability to take risk. So your ability to take risk is kind of your current financial circumstances, how much money do you make, how much money do you save, what's your current net worth, those types of things. Your need to take risk is, if I want to reach my financial goals in X number of years, what's the general rate of savings that I need to have and what's the rate of return I need to get on my assets to get there? That's your need. Now, the, like, the squishy one, for lack of a better term, is the willingness. What's your willingness? You might have a very high ability to take risks because you're really rich for whatever reason, but you might not want to take risk because you want to be conservative and not have to get rich twice. You might need to take a lot of risk, but you might say, I'm not comfortable trying to shoot the moon. On the other hand, you may have a low need to take risk, but you still want to take risk and grow your money for other reasons. So that's the hard part is like the qualitative thing is how much are you willing to take? The numbers would say every single young person should have all of their long term money in stocks. Like, it makes no sense to go more conservative. But if your personality won't allow it and you need an emotional hedge, I'm okay if you have to have more liquidity and you have to have a barbell portfolio of stocks with bonds and cash over here or something, even if it's not optimal. So I think that's the kind of thing you have to think about, like what does your personality allow for when it comes to risk? That willingness is. It's a hard one. You can't put a number on it, but that's the one that matters most for most people.
- [58:19]
B
Yeah, I think I was talking to Morgan Housel and I think he said he paid his house off. He's like, I know I had a low rate mortgage, but for me, if I want to feel good financially, I don't want to have any debt. And that feeling is worth more than the financial optimization. And so you can't find that in, you know, an answer on the Internet because usually the answer is this is not optimal. Like the Internet and AI tools, they're really good at giving you an optimal answer, but they're not always as good at giving you the answer that you feel best with. And sometimes you got to find that balance.
- [58:47]
C
I told him he's an idiot for doing that, but guess what? It doesn't matter because it was the right decision for him and his family. And I think that gets back to not confusing your feelings about money with other people's feelings about money because you don't know what they're going through or what they're experiences or I think personal experiences also has a lot to do with it. Like we have a client who worked at Lehman Brothers in 2008 and he probably lost 70% of his net worth was in shares of the company gone. He over time has worked his way back up to being a wealthy person and does not want to take barely any risk at all. And he says, I know that I should be taking more risk, but I've seen what happens in the worst case scenario and I never want to put myself in that position again. So I do think that there's something to like your upbringing and the life experiences that you've had and how that shapes your risk as well. I think you just have to face it and admit how that's going to change your feelings and what the trade offs are that you're making because of it.
- [59:44]
B
Yep, totally agree. Okay. Or, you know, I said, what should they do tonight? And we talked about, maybe rethink your risk. They also check out the book. Where can people find it?
- [59:53]
C
Yeah, Risk and Reward published it through Herriman House, anywhere you want, Amazon, Barnes and Noble. And I actually, for the first time, did the audio version of the book. I figured I'd do podcasts. My publisher said, do you want to do it yourself? And I said, no, just let some British guy with an accent do it. They're better at it than me. But then I said, you know what? Actually, I'll do it. So I even read the book myself. If you're an audio person, how was that experience? It was long and it was hard, but it was kind of fun. Gave me much more respect for people who talk all the time for a living. For sure, it was hard to do, but I finally figured out a cadence, and I think I got it down, but it took me a while.
- [60:23]
B
And you can also check out the podcast. I listen every week to Animal Spirits. So you also got a blog, so you got a lot going on. You produce a lot of content. I enjoy it all. Thank you for doing it. And thank you for being here.
- [60:33]
C
Yeah, thanks for having me, Chris.