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The Iced Coffee Hour
Money Expert: Exactly How To Make $1,000,000 From NOTHING! | Sahil Bloom
01:57:23
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- [00:00]
A
One question. What is the money for? Being mega rich is wildly overrated. I don't think most people would want to be me. Once you are mega rich, there is all sorts of money created problems that pop up. Most people, they say they're in the season of building, so they're like, okay, well, I'm going to build and make a whole ton of money, and then I'm going to get freedom and purpose. If you keep saying later about those things, later just becomes another word for never.
- [00:33]
B
So how do you escape the trap then?
- [00:35]
A
It can't be about money. The recipe for making a whole lot of money is not that difficult. There's a fundamental misconception about how you make money. You make money by creating value for other people. Every single thing you want is on the other side of a little bit of struggle.
- [00:53]
C
So what do you think are the best opportunities today for the next few years?
- [00:58]
A
I think that the most interesting opportunity right now is.
- [01:04]
B
Sahil Bloom. Thank you so much for coming on the Ice Coffee Hour.
- [01:07]
A
I'm thrilled to be back.
- [01:09]
B
So you are a New York Times bestselling author, and you also have managed billions of dollars in assets. You have a lot of very controversial takes about money. You've said that there are four levels of financial wealth. Poor, not poor, rich and mega rich. While not poor is better than being poor, mega rich is actually worse than being rich. Why is being ultra wealthy worse than being wealthy?
- [01:32]
A
This might be my most controversial take on money. Basically, what I'm saying is that being mega rich is wildly overrated. And yet probably all of the listeners are going to say, like, that's my goal. Right? You're, like, trying to go make $100 million. Like, I want to go be mega rich. I spent time as I was researching over the last three years with thousands of people all across the financial spectrum, people, like, just scraping by on some of the world's foremost mega billionaires. And my basic premise here is that there are four levels to this game. There is poor. You're scraping by your poor.
- [02:09]
B
Walk us through actual numbers. If someone's listening right now, how much money do you have to have?
- [02:12]
A
Depending where you live. But let's just say, like, you're not able to fund basic needs. Like, I'm talking, like, broke. You're. Yeah, you're struggling paycheck to paycheck, really struggling to pay for, you know, food, shelter, basic needs, security. Like, if you're talking Maslow's hierarchy of needs, you're at the the bottom of that. You're struggling to get by not poor is once you've broken out of that, like you can pay for all of those basic things and you're starting to have small levels of basic pleasures. Like maybe you can go on a vacation a year. You sort of like can start to afford some basic experiences. You can go out to eat with your family and there's a huge leap in your well being from being poor to being not poor. Like that is an enormous leap forward for anyone. It doesn't matter, you know what your standard was before. It's an enormous leap. Being rich is sort of the next leap from being not poor. And that is like all of your sort of simple pleasures in life are affordable. Like you've taken care of all of the money problems. Like you no longer have random money stresses. If you're talking like, you know, New York City, that's probably like $10 million of liquid net worth is like the top end of being rich. Anything from like a million through $10 million of net worth in probably a major city is like, you're rich. You, you can afford to live where you want, you can go on. You know, you can travel whenever you want, you can afford to eat out. You're not worried about all that. The problem is people get to that level, they've solved all of their money problems and yet they keep striving for this bigger number to try to go be mega rich. And my whole point here is that once you are mega rich, there's all sorts of money created problems that pop up. Meaning, like things that only happen when you have an enormous amount of money. So like your identity starts to have issues because you're all super tied up in this like whole world of money. You have issues with children, and raising well adjusted kids becomes an enormous problem when you have a ton of money. So suddenly you've already solved all of your problems. You're not solving anything new at the, at the mega rich level, but you're creating a whole bunch of problems for yourself.
- [04:15]
B
But it sounds like that's a problem with the character of the type of individual that usually makes it up to level of wealth as opposed to achieving that level of wealth and then that amount of money kind of being a cancer or plague to your like, character.
- [04:28]
C
It depends how public you are about it too.
- [04:31]
B
If you walk down the street and.
- [04:32]
C
No one has any clue, you're less of a target.
- [04:34]
A
Less of a target. I, I think what you're assuming though, Jack, is that like we all have perfect agency and control over our own behaviors and characters. And the reality is so much of who we are and how we approach life and our expectations are driven by our comparison set and like our environment. So in other words, if I say I want to live a simple life, I'm like, oh, I just, I'm really happy with the simple things. Like I could make a lot of money, but I'm not going to live a fancy life. And I want to do that in Omaha, Nebraska. That actually could be reasonably easy for me to do. But if I want to do that same thing living in New York City, it's going to be very uncomfortable and very difficult because my comparison set is all these fancy really rich people around me who measure their, you know, self worth on the basis of where they vacation and how much their kids private school tuition is. If that's my comparison set, suddenly like it's mimetic, right? Humans are pretty mimetic in the way that we approach life. And so I think it is a trap that the vast majority of people fall into that you become and you chase this idea of being mega rich, not realizing that it's actually going to create a whole bunch of problems. If it's a byproduct of just taking action. Like, you know, you're chasing your purpose, trying to go and build something, I get it. But when you're chasing it as the end, it leads to a whole bunch of issues.
- [05:50]
B
So how do you escape the trap then?
- [05:53]
A
I think the biggest way you escape it is that it can't be about money along that journey. Like if you are going to become mega rich, it should be a byproduct of the fact that you are trying to go and build something that you really care about. Not because you are just trying to be mega rich, because you think it's going to make you happier.
- [06:08]
B
So you as an investment banker, I feel like that's kind of, I mean you, you don't do that because you're super passionate, generally speaking about like buying small businesses and this and that. You do it because you want to become rich.
- [06:18]
A
Mega rich, mega rich.
- [06:20]
B
So how does, how does that like cognitive dissonance apply in your life if you wanted that, but now you're saying this.
- [06:25]
A
Well, I, I think there's a lot of really miserable investment bankers who've made a whole lot of money and get to the top and are like, oh, I actually, you know, got, I, I would call it a pyrrhic victory. It's like a victory that might as well be a defeat. Like you win the battle, you make a whole Bunch of money. You think this is going to be the thing that makes you super happy and content and fulfilled. And then you wake up one day and you have four divorces and five kids that won't talk to you. You're like, oh yeah, I won the game, but I lost the much bigger picture war of trying to build this life. It's the reason why I think thinking about these things before you go and do it is the most important thing. Because then you can try to avoid these pitfalls, right? Like you can make sure that your kids understand the value of hard work. They're not given all these things, they're not insulated from failure. At every step along the way. There's definitely actions you can take, but I would say it's a trap that the majority of people fall into on that journey. It's pretty rare that you come into contact with a mega, mega rich person who is not suffering in some way, shape or form from the pitfalls of that money.
- [07:29]
B
So tell me about these billionaires that do also have this fulfillment and peace of mind. What makes them different than most billionaires that are like that are a slave to working hard and making a lot of money?
- [07:43]
A
I think Richard Branson is probably the best example of a billionaire who has sort of done it right in finding balance in his life. I just co hosted a retreat with him actually at his. He has this private island, Necker island, right? It's like this crazy island in the British Virgin Islands. He's owned it for many years. It's an amazing story because I think he bought it for like $50,000 or something back in the day. And obviously it's probably worth a hundred million. I mean it's an insane property. And hosted this retreat there with him. And I gave this talk talking about like the, the fact that there are these different types of wealth and building your life so that you have thought about that along the journey. And he came up to me at the end and just said that it had made him really think he had like, you know, been up at night thinking about it. And my reaction was like, you've kind of lived by this without knowing. Like you didn't have a name for it, but you've lived by it. Like the guy on his journey to building this thing that has made him billions and billions of dollars has managed to at age 75, be in extraordinary shape. He's got his whole family there with him, his super well adjusted, like really kind, loving souls. He works on stuff that he really cares about. He's Got a lot of freedom. Like, he has really done that. And the way that he did it was that he thought about it all the way. Like, that was designed into his life, the entire journey. So it was never this whole game of, like, later. Most people, they, like, they say they're in the season of building, so they're like, okay, well, I'm going to build and make a whole ton of money, and then I'm going to get freedom and purpose, and then I'm going to focus on my health, and then I'm going to be there for my kids more, and then I'm going to spend time on all that stuff. And the sad thing is that if you keep saying later about those things, later just becomes another word for never, because most of that stuff is not going to exist later. Like, your kids aren't going to be five years old later. You're not going to magically wake up with freedom later. It's not like you. You have to design it into your life. And so he did that, and now as a result, at 75, he very much looks like it.
- [09:43]
B
So what questions should people be then asking themselves on a daily basis to not fall into any financial TR in the bad way or in the way of having too much money?
- [09:52]
A
One question. What is the money for? It's a question that no one thinks to ask. You're like, you know, I'm chasing money. I'm going and doing these things. Oh, yeah, I want to be a billionaire. I want to do this thing. I want $30 million, whatever the number is. You never asked yourself, what is the money for? What is the life I'm actually trying to be?
- [10:09]
C
It's easy to say, well, I get a nice house.
- [10:11]
B
Well, Graham, what's the money for?
- [10:13]
C
Nicer house.
- [10:14]
A
Why a nicer house? Something I want. Why, though?
- [10:17]
C
More square footage. But why more activities?
- [10:20]
A
What activities are you gonna do? You're gonna sit in your studio and work?
- [10:23]
C
No, I have a drum room.
- [10:24]
A
So you're gonna. You're gonna have a bigger drum room.
- [10:26]
C
Yeah.
- [10:27]
A
Is that really why? Yeah. Okay. Yeah, that's great.
- [10:29]
C
People stay over the house. A little. Little guest house on there. A nice view, and you think, yard.
- [10:35]
A
For Bailey, and you think, oh, okay, that's a good one. Future kids, all that stuff. I get that. Yeah, that's good.
- [10:40]
C
Yeah, exactly.
- [10:41]
B
And you can't do that right now.
- [10:42]
C
It'd be. It would be stressing it.
- [10:44]
A
That's good. But, like, that's that vision of saying, like, I know what I want my day to look like, like what am I actually doing? I'm waking up in the morning. I want to like, play some drums when I wake up in the morning. And that's like, I'm gonna be able to create this drum room. If I make more money, I'm gonna be able to create this space where my kids are gonna be able to like, be outside and in the pool. My whole vision when I like went and wanted to start making money was that I wanted to be able to take my son in the pool at 1pm on a Tuesday. Like, that was what the money was for. I was like, that's what I want. And to me, like, I have that now. I can do that. That doesn't mean I'm going to just shut down my pursuit of like my ambitions and doing things. But I also have to be able to pause and appreciate that I created the life that I actually wanted, that I can do that.
- [11:27]
C
What's the biggest contributor for your own financial success?
- [11:30]
A
I mean, the highest hourly rate is definitely investing. I think I like investing is, if you are a professional investor, the craziest business model in the world. If you raise money from other people because you're just getting leverage on other people's money to go and do something. If you think about the hourly rate on certain investments, I have an investment that I made where I put $25,000 into something. This was actually just personal and I think it'll end up making me multiple millions of dollars based on what this company is doing and what the outcome's gonna be. That decision was made in 10 minutes. The hourly rate on those kind of decisions is extraordinary. That's why, by the way, like, there's so many people out there that do like little day trading on the side. And my hot take on this is like, unless this is your full time job, you should never be trying to outperform the market. And people go crazy when you say that because they're like, well, I, you know, I made 200% last year. I did this. If you can outperform the market consistently, please stop what you're doing on your day trading, go raise a hedge fund and let me invest in it. Because it is so rare that anyone can outperform the market. It just doesn't happen.
- [12:46]
B
So do you flat out not believe any like forex trader or any day trader, swing trader that says, oh yeah, I beat the market?
- [12:52]
A
No, I don't not believe them. I don't think they can do it consistently over a long period of time. What's a long Period of time, you know, five, five plus years.
- [13:00]
B
So what do you think about people?
- [13:01]
A
I'm sure there are a few people out there that have done that. There's always exceptions. But if you are doing at and you are legitimately doing this consistently, if you do not go raise a hedge fund, you are an idiot.
- [13:14]
B
So, so my understanding their defense towards that would be you just can't do it with large sums of money because you have people that are day traders with alleged or like they claim they have bankrolls of $20 million but they only regularly trade with like 150,200k because the, the more money you're putting in the, for some reason it's not like.
- [13:33]
C
It starts moving the markets. Like you make a $2 million.
- [13:36]
B
Especially if you're trading on like smaller.
- [13:37]
A
Maybe if trading in like tiny things that aren't liquid, maybe that might be true. But like I, I people that say that they like swing trade the S&P 500 futures and consistently outperform the market, I'm like, please go raise a hedge fund because you will be a billionaire.
- [13:52]
C
What, what about Forex?
- [13:54]
A
I don't know about Forex. I mean I again I'm like, these are efficient markets, man. There are people whose entire job, smartest people in the world, allegedly whose entire job is to outperform markets. And a basket of hedge funds did not outperform the S&P 500 index.
- [14:08]
C
I always find it funny that there are professionals out there who spend their entire lives, decades doing this and meanwhile you see some 19 year old who's saying, oh, I found a way to consistently make money in Forex and I'm going to teach you how to do it. I just, I just don't see it.
- [14:21]
A
Well, I'm going to teach you how to do it. He's going to make his money by selling you a course on how to do it, not by actually doing it. If someone can outperform the market, the best way for them to monetize that unique, extraordinary skill is to raise a billion dollars of someone else's money and go do it. Because the performance fees you're going to make on being able to do it are astronomical. It's the reason why Ken Griffin has you know, a like $100 million penthouse on the top of Manhattan. It's the reason Bill ackman is worth 10 plus billion dollars. Like if you can outperform the market and you have this unique skill, please go raise a head.
- [14:54]
C
So what's interesting is that it seems like the new Thing is, these prop firms that are popping up and what this is, is that you could go and you pay a fee to trade with a certain amount of money. And once you prove yourselves on these. These platforms, then they'll say, oh, we'll give you 5,000 to trade on our behalf. Once you've consistently made, you know, 8 to 10% a month.
- [15:17]
A
It's not really that new. It's been around and it's interesting. It's a very interesting model. And it's also one that recently has been getting a lot of press because there's been. There are hedge funds that have, like, tip lines where they will pay you for giving them trade ideas. And what's been happening is that there are some enterprising people out there who basically are going and digging up inside information on deals or on stocks and submitting it to hedge funds, getting paid for it. And it's this weird legal gray area where, like, the hedge fund didn't know that it was insider info. They could just say, like, oh, that was a good trade idea that someone sent in. But, like, obviously, if there's some random guy from Bulgaria consistently sending you these trade ideas on some esoteric stock and you're like, making absurd amounts of money on this, clearly something was like the guy had access to, like, some truck driver that knew the inventory levels, whatever. But it's this weird, like, legal gray zone that's happening.
- [16:14]
C
Yeah. What's crazy for me are the short sellers, where you could basically go and write this hit piece on a company and say at the bottom, you just disclose, we have a short position in this and we financially benefit with the stock price going down. But they're to make whatever alleged claims they want, drive the stock price down, profit from shorting the stock, and then exit.
- [16:34]
A
How is that any different than an investor going on CNBC and saying whatever they want about the upside of a stock and trying to pump it up?
- [16:43]
C
I think it's totally fine as long as you disclose your position and bias. So I could say, hey, I love this little small cap stock. Oh, by the way, 90% of my portfolios in this, it makes up, you know, X amount of dollars. And this is my bias. I think as long as you're forthright about your financial interest and saying whatever, then I'm open to it.
- [17:04]
A
I feel like they both. I. Short sellers get a really bad rep in the market, but they provide an actual, like, important service to a market that there's. There's pressure down on, on stocks as well. And there's People selling and sharing information on that. On the downsides of these. Of these assets. Like, I just think all of these things are helpful for market liquidity in the long run as well. But I do think, like, I mean, the worst version of all of this was the SPACs. It's like there was no. There was no boundaries on what you could say about the future earnings of these companies because you were able to, like, project these companies outward, which you're not allowed to do if you're filing a normal S1 prospectus for, like a traditional IPO. And so that got abused badly, right? Like, people were just. And everyone. It was the ZERP era, right? So, like, everyone wanted to buy into these crazy financial projections for these companies that fundamentally their business model, they just lost money on every transaction. And there was no pathway to making margin. And, you know, a lot of retail investors got destroyed by that.
- [18:07]
C
Although really quick, I just want to say that you guys know how much I enjoy getting a good deal. Like, I've made entire videos about how to save money by making coffee at home. That's why anytime I find a way to make your money go further, I get really excited. And today's sponsor, Wayfair, helps you do exactly that.
- [18:23]
B
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- [19:03]
C
You save money, you skip the hassle, and you get whatever you need delivered right to your front door. That's why Wayfair is your trusted destination for all things game day. From recliners and TV stands to cookware and grills. So shop, save, and score today@wayfair.com Again, that is W A Y F A I R.com with the link down below. In the description Wayfair, every style, every home. So where have you lost money?
- [19:28]
A
In too many places. I mean I've lost money on the vast majority of startup investments. Right, like startup investing. I think startup investing is like the sexiest thing that actually makes objectively no sense to do. I like look I mentioned figure that's a great one. Obviously that'll be a great outcome that is going to cover the losses on like 80% of the other things that I've invested in as an angel investor, as a, with my venture fund. Because look like you're speculating on things that are ideas at the start. You're basically betting on a person that they're going to be able to figure it out. Markets change, things change. The vast majority of them won't become successful and even if they do become successful, it's pretty rare that they end up getting to an outcome where they exit or they go public where you actually get liquid on the money. And so I mean I've lost money on the vast majority of this. I've also as a rule anytime I've tried to have a hack or a shortcut, I've gotten punched in the face. What I mean by that is like anytime I thought to myself oh I could make this much money this fast, I got destroyed on the thing like whether what are a couple like NFTs got?
- [20:37]
B
Just how much did you lose on NFTs?
- [20:39]
A
Hundreds of thousands of dollars and I had to pay taxes because I like.
- [20:43]
C
Are you trading them?
- [20:44]
A
Yeah, oh yeah, yeah like I got wrecked on, on NFTs. The only thing that again to the example of like, like one good thing offsetting. I've done very well on Bitcoin because I bought it a long time ago and have just never sold it and held it and every single other crypto thing. Any other crypto tokens and NFTs I've gotten destroyed on but it's all made up for by this one buy and hold long term thing. So now my new rule is like I don't do any trading.
- [21:11]
B
So how much better off would you be had you just bought the S P500 instead of all of these alternative investments, spreading your portfolio across NFTs, Bitcoin, altcoins, private equity, et cetera.
- [21:25]
A
I would not be better off only because I had access to a few very unique things by virtue of like the networks that got created through these investments. So like when you, when you think about an investment there's a few things to consider. There's the financial returns just purely on the surface. Then there's like the amount of time you're going to have to invest into this thing and then there's what other value you might get from being involved in this. And so, you know, money is very easy. Like, you're like, how much money am I pushing into the center of the table for this investment? The time is one people often forget. Like, if I'm investing in multifamily real estate and I'm going to actively manage it, there's a whole lot of headaches associated with that. I have to factor that in because that's real money that I'm putting in in the form of time. The last piece is really heavily skewed towards like in the angel investing or in private equity. When you invest in a deal, you're also going to have access to like the room, like, you know, the room where it happens on this stuff. So like, being involved in a specific deal might be a bad financial investment for that one deal. But if it gets me access to a whole bunch of really smart people that are then going to do more deals, that actually might be a long term positive move to go and do that.
- [22:39]
B
So what stage are you at then in those, like, categories of financial, like on your financial journey and what would you say is your main goal financially?
- [22:50]
A
I am like, probably right, at least for where I live. Like, I think I'm like right on the border of, of rich and mega rich. And it basically hinges on a few, like, if, if these investments ever got liquid, I would definitely be pushed over into the, the latter category. But I, I'm not like a money guy. Like, I'm not a, I don't care about money stuff. So I'm not like, I'm wearing a running watch. Okay, I, I don't. That shirt cost, I don't know, 40 bucks. Buck Mason.
- [23:22]
B
Oh, it looks like an experience is great actually.
- [23:25]
C
Yeah, I have a jack.
- [23:26]
A
But like one of my huge things, by the way, on, like, you have to know when, when you buy something, there's like, there's the cheap version. Then like when you're talking about something that has utility, like a shirt or bed or furniture or whatever, there's like, there's the cheapest ve, then there's the version that is like the best quality from a actual utility perspective. And then anything above that, all you're paying for is brand. So like the difference between a 40 shirt and a 500 shirt, like, there's no difference in quality at some point. It's just, it's just a nice shirt and you're. All you're paying for is you're just handing someone money for the brand that you got on it.
- [24:04]
B
What, what brands, if you're trying to trigger people here, do you think are the biggest rip offs?
- [24:07]
A
The biggest ripoff brands? I mean, anything that's like a big, you know, like where you have a big logo on it where you're trying to. Status signal? No, no, not Lululemon. I mean, I don't know. My wife wears Lululemon. I'm like, I don't know, it doesn't seem like they're pretty nice. I will say, yeah, that stuff's nice. But like, the biggest rip offs are when you're getting charged for the fact that they know the reason you're buying this thing is to try to impress other people. So, like, that is what they're, they're preying on your insecurity. Right? Like that. That is what a, a luxury brand is. Like, you don't carry around a bag because you're like, oh, I love the way this bag makes me feel. You carry it around because you're trying to signal to other people that you are impressive and have a level of status that they should admire. Like, we spend the vast majority of our luxury purchases. If you were to ask yourself, when you make that purchase, would I buy this if I could not tell a single person that I had it? If I couldn't take a picture on Instagram, I couldn't show it to anyone else. If you ask yourself that question, I call it the bot status test. Like, am I trying to buy status? Usually the answer is no. You're getting this because you want other people to think you're cool in some way. There's nothing wrong with that. But you also have to acknowledge how often you are living for the benefit of a whole bunch of people that are never thinking about you. Like, no one is as impressed by your stuff as you think they are. They don't care.
- [25:25]
C
What do you think are the biggest misconceptions about money that hold people back?
- [25:28]
A
I think that when you are starting out on your journey, you build in your mind this impression that an incremental unit of money equals an incremental unit of happiness. Money equals happiness, right? Because it does. In the early days, anyone that tells you money doesn't buy happiness is lying. Scientifically. It's actually proven, shown across every study, that in the early days of your life and on the early part of the curve, money directly buys happiness. The challenge is humans are really bad at adjusting to something when the fundamental calculus has changed. And again, the science is pretty clear that above certain levels, that incremental unit of money does not drive the same incremental unit of happiness that it did in the early days. But we're like mice chasing the cheese. And so what happens is we are still convinced that it will. We convince ourselves that our happiness is on the other side of just a little bit more of whatever it is. And we lose sight of everything else on that journey. And that is basically the trap that everyone falls into that leads you to this like, you know, rich yet miserable existence which you honestly, I mean, I, I could not conceive of that. When I was in my 20s, I was like, what do you mean? You, you have it all, you doing all the things and you're miserable. Like, how's that possible? But that's the reason it happens.
- [26:51]
C
Do you notice any difference in mindset and money habits when it comes to like Gen Z, millennials, boomers? And is one of those maybe better than the other?
- [27:01]
A
Yeah, I mean, I would say Gen Z. All the recent surveys that I've seen show that Gen Z has these like dramatically higher expectations for what it means to have made it. I think there was like a survey recently that I saw that said it looked at all the generations and like, how much money do you need to make in order to have like made it financially? And it was basically like $200,000 a year was the number for like boomers, Gen X, millennials. And then for Gen Z, it was like $600,000. It was like completely off the charts. And look, I think like the most common interpretation of that would be like, Gen Z's cooked. You know, they don't understand money, they're so crazy. But the other piece of that is like, look, they've also come of age in a time when inflation was through the roof. And how's like it is untenable to own a starter home in most cities if you, if you're just like earning a normal salary. And so I think that like there's reasons why people feel that way. It's also crazy. Social media has cooked our brains in a lot of ways. You're like, I hired a, I hired a 27 year old kid last year. It was his first job. He was like working as personal trainer before. And when I first hired him, he was like, I'm going to be making a million dollars a year by the time I'm 30. And I just looked at him, I was like, how, what, what do you mean? What do you mean you're going to be making me? He was like, oh, I'm just going to be involved in some different stuff. There's a fundamental misconception about how money, you make money by creating value for other people. To earn a million dollars a year, you have to create $10 million a year of value. And if you do that, you actually probably will in some way. Like you'll probably capture enough of that value to make that money. But like value creation is what making money is about. The recipe for making a whole lot of money is not that difficult. It is just create value and then receive value. And creating value is just identifying problems, creating solutions and then scaling those solutions. Yeah. At all points in time. If you're trying to make money, you need to be doing one of those three things. And if you were to go start any job and you just find ways to be valuable to everyone around you, you will find a way to make a lot of money over the long term. It's just not going to be like the immediate dopamine hit instant gratification that social media tells you it'll be.
- [29:12]
B
So then what are the most overrated wealth milestones?
- [29:15]
A
People still chase overrated wealth milestones. I mean, having a million dollars. Yeah. No.
- [29:23]
B
Why is having a million dollars overrated?
- [29:25]
A
Because it doesn't. There's no change in your life from a million versus like 800,000 is what I'm saying. It's like, it's, it's not like a, like in the, in the diamond world there used to be this like very funny thing in diamond prices where if you were to buy like a 1.99 carat ring, the price was one thing and then if you were to get a 2 carat ring, the price was like 40% higher. And it's because like we build up in these like the, the next threshold. And so they're praying again on like the guy you know is going to go in and like it's his insecurities like, no, I'm going to buy the two karat ring. So they priced it up a whole bunch. We build up like this significance to these certain thresholds like that that actually have no bearing on your life. It might feel good to say I have a million dollar net worth, but a million dollar net worth is not what it was 30 years ago. 20 years ago. Like the whole idea of a millionaire was like this big, you know, this big thing. But like being a millionaire now, that's probably like $5 million to have that same significance in how you're able to operate.
- [30:27]
B
What is more important, having a lot of money or making a lot of money?
- [30:30]
A
Cash flow. Cash flow. Cash flow. Cash flow.
- [30:33]
C
Yeah, I was having a lot of money.
- [30:36]
A
Anytime anyone's talking about having a lot of money, all they're actually talking about is cash flow. And like, everything comes down to cash flow. When people are like, oh, how much is enough? You see all these debates online. 5 million, 10 million, 30 million. All you're actually doing is in the back of your mind, you're doing this math on it sitting there, what your actual cash flow is that comes off.
- [30:54]
C
The cash flow is not guaranteed.
- [30:56]
B
Exactly.
- [30:57]
A
What do you mean? Cash flow is not cash flow?
- [30:58]
B
So for example, I'm talking, it comes.
- [30:59]
A
Off of accounts and everyone always does this. You're like, oh, I've got 10 million sitting in the stock market. That's just going to get me, you know, it's going to get me 500 grand a year.
- [31:08]
B
Like, but there, there are things like failure rates with a 3% withdrawal rate off of X amount lump sum invested in a, a broad market index fund. Like those you can actually apply a certain math to so you can have certainty. Okay, there's a 0.01% failure rate for this sort and I can withdraw safely this amount per year as opposed to, you know, I've worked in this sector and I feel like if I job hop, I can get another job paying this amount. And then your future is just uncertain with that way. Whereas like you have more broad data all saying that, okay, if you withdraw this amount, your failure rate is, is this percent?
- [31:42]
A
If you're, if you're posing this question as like, would you rather take $10 million today or a million dollar salary per year? Obviously you're going to take the $10 million today. Like, yes, I, I would 100 do that because like the safety and the financial security of doing that is going to matter. But if you pose it as like, oh, I have the skills and knowledge to continue to grow that million dollars a year and I have, you know, an ability to like do that across a diversified stream of cash flows, I would take the million.
- [32:12]
B
I think broadly speaking it kind of dictates the way that like, like the, the common argument of hey, I'm not making that much money, but I make a little bit, like enough to save a little bit. And you're like, okay, great, invest that in a broad market index fund. That's one route or the other route, which is like, okay, invest that on trying to develop a new skill and trying to day trade or trying to drop ship or trying to do this.
- [32:33]
A
Trying to do that.
- [32:34]
B
I'm just. I'm just saying one route is like investing in yourself and, and trying to increase your income, and then the other one's saving for the future to try to build up a nest egg.
- [32:43]
A
So. So everyone should build up a nest egg. Like, go through a couple of, like, basic financial things. The best investment that you can make is having 6 to 12 months of cash in an emergency fund, which is so paradoxical because everyone's like, well, I'm not getting any yield on that. That is the peace of mind that you get from knowing that you are okay for a long period of time will allow you to see opportunities much better. Like that. That is the single best investment I have made, is just having that sitting there, because then I know I can actually capitalize on risk, risk without worrying about these things. Like, it gives you the flexibility and the freedom to go and chase the bigger picture. Things that allow you to go and do that because you know you're safe. On the downside, the analogy is like a Formula One car driving around a track. What allows them to do that effectively is the fact that they know and they're confident in their brakes. Because if they weren't confident in their brakes, they could not go really fast into a turn, but they know the brakes are there. Like, that's what the emergency fund does. You have these brakes. The second piece is like, this whole thing of side hustles, investing in yourself. A lot of times those are just like, basically distractions masquerading as good opportunities. You're like, oh, I'm going to invest in myself. And really what it is is, like, I'm going to take 30% of my cognitive energy and put it towards this random thing that is speculative that I'm not sure if it's going to make me any money, but it sounds good. Versus taking that same 30% of my cognitive energy and doubling down on the value that I can create in my main thing? And, you know, like, you like us having a discussion about, you know, doing a podcast tour. You're like, well, why would we do that if we can just, like, focus on doing incredible episodes, creating incredible clips that maybe are going to go viral and do really well? Like, that's actually a good point, right? Like, this is my main thing, that same cognitive energy. If I start now, like, piecing it into 20 side hustles, I could just deploy into the thing that I already know works and, like, logically the way to think about that is say I want to, you know, I have my main job and then I want to like, maybe start a side hustle agency. Like, okay, well, let me just think about this. The side hustle agency. For that to be successful, what do I have to do? Well, I have to, like, figure out what my offer is. I have to go send a whole bunch of cold messages to people. I have to then go take meetings with those people, I have to convert those people, then I have to provide the service, then I have to retain them. That's my path to making money on that. All of that energy that you could have put into doing that and how speculative that is, all the things that have to go right for that to work, what if you just put that towards creating way more value at your main thing? Would you not be able to make more money by like doubling your value that you're providing to the main thing that you're doing? That is why, assuming this other thing isn't like your life's passion, your life's work, that you have to go and do it. If it's just a money play, you're better off off doubling down on the value you can create in your main thing.
- [35:31]
B
With how much we travel for the podcast, I've realized there is literally nothing that affects how you feel more than the quality of your sleep. It doesn't matter how much you work out, what you eat, what supplements you take. If your sleep is off, everything suffers.
- [35:43]
C
That's why I'm so excited that Cozy Earth decided to sponsor today's video. Because when it comes to sleep quality, your sheets have a way bigger impact than I ever imagined. Like, they sent us through Bamboo sheet set a little while ago, and I'm just going to go off script here, but they blew me away. Like, they're so unbelievably comfortable that I look forward to going to bed at night and I don't want to wake up and get out of bed in the morning anymore. And it's such a big difference between our previous sheets and the Cozy Earth sheets that when we switch back to the other sheets, when we wash the Cozy Earth sheets, I just. I don't like them anymore. I know that's weird to say, and this might be tmi, but the Cozy Earth sheets are just unbelievably perfect.
- [36:21]
B
And here in Vegas, where it stays hot at night, trust me, I'm someone that runs hot when I sleep and I. It's horrible. I absolutely hate it. But these sheets are the first sheets that completely do away with that. They don't trap any heat and you can stay cool at night. It's amazing.
- [36:34]
C
On top of that, all of their bedding products come with a 100 night sleep trial and a 10 year warranty. Which goes to show you just how confident Cozy Earth is that you're going to absolutely love them.
- [36:43]
B
Seriously guys, I cannot give a strong enough personal endorsement for Cozy Earth. I'm wearing their pants. Actually, as a coincidence, I didn't even know I was recording the sponsorship today. Wearing them right now, now. They are so amazing. The sheets are phenomenal. If you want to upgrade your living and live in comfort, check out cozy earth again.
- [36:57]
C
That is cozyearth.comich with the link down below in the description. And if you get one of the reviews, just let them know that we sent you because that would mean the world to us and we would love for them to continue sponsoring these episodes. Thank you again. And now let's get back to the podcast. What do you think about Hustle Culture? It seems like that's really fallen to the side lately.
- [37:16]
A
You think so?
- [37:17]
C
Yeah, I think it was really big 2018 through like 2022. And it seems like people have shifted from that to like a work life balance.
- [37:25]
B
I don't think so.
- [37:26]
C
Really?
- [37:27]
B
No, dude, that was the whole like Andrew Tate thing. Like, that's like, that's the whole like, you know, Iman Godsy, tjr.
- [37:33]
C
Like, I don't.
- [37:35]
B
I think it's all about like work really hard grind, make a bunch of money while you're super young, buy a Lambo, live in Miami.
- [37:42]
C
That's like maybe the Maya then realize.
- [37:44]
A
Then get married, have kids.
- [37:46]
B
Yeah, I, I think it's still, I.
- [37:47]
A
Mean, look, I think that hustling, I mean, I, I worked 100 hour weeks for the first seven years of my career and I benefited from that enormously in terms of what I learned, the experience and networks and also the money that you make from doing it. Like, I, I don't know that. I don't think it has to be that you like demonize Hustle culture. Like, I think it's great to work hard when you're young. You, I mean, it's the one time in your life where you don't have all the responsibilities and you don't have all these people counting on you in the same way. Like you can really focus on yourself and on building this base that you're going to benefit from for the rest of your life. It's actually the best time. Like when your kids are super young. It sucks having to work 100 hour weeks because then you're away like you're missing this time that you are literally never going to get back. When I have to work hard now with a three year old, I feel it way more than before. I had kids when I was like sleeping on a mattress on the floor of an apartment. At my first job I didn't care. Like I could go into the office Saturday and Sunday and work 12 hour days and I was just like, this is awesome. I'm in the trenches with people. So I don't know, I mean I like I'm still old fashioned in the sense that I just don't think there's any replacement for hard work. And so no matter what you're doing, if you're working in finance or if you're you know, trying to build your business or your hustle, like you're not going to build a great business without working hard.
- [39:03]
B
You were in private equity for seven years. How many hours per week did you work and what was the true comp progression over those seven years?
- [39:10]
A
I would say the average over those seven years was 80 hours a week. And that's not me like trying to sound cool or flexing on it like that's just there was a lot of work to be done and we all took pride in getting that work done. Like you're in the trenches with a bunch of people and you, and you're getting compensated for it like you know, at the analyst level. In private equity, depending on how big your fund is, you're probably making anywhere from 100 to $200,000 a year. @ the associate level, you're probably making anywhere from 200 to $500,000 a year. VP level, again depending on fund size, you're making somewhere between 500 to a million. And then once you get to the principal and managing director ranks, you're making a million plus. The real comp in private equity is not in your annual cash though, it's in carried interest which is the profit share that you get on the fund and the fund performance. And that is where people have made extraordinary amounts of money. And even for me, not having been there for that long, that is where the vast majority of the wealth that I have associated with my time there is, is tied up. It's in the fact that you get, you know, private equity fund, the standard model is, is 20% of the profits that the fund generates. So if you have a billion dollar fund that doubles in value, you made a billion dollars in profits. The Fund. The managers of the fund get to keep $200 million roughly. And that gets split up. Obviously the founder of the fund gets the vast majority of that. But like, like trickle down $200 million to a group of 10 or 15 people. Like everyone is getting a whole bunch of money on these deals. And so that really is the bigger thing. But that vests typically over like seven years. So you're getting that over long time periods. That's really like a retention tool for keeping people in the industry.
- [40:59]
C
What do you think about the carried interest loophole?
- [41:01]
A
They've been trying to get rid of this loophole forever. I mean Obama talked about it, it, I'm, Biden talked about it, Trump talked about it. No one's getting rid of it. Explain what it is. So the carried interest loophole is the idea that carried interest, that money that you're making, the profit share on the fund gets taxed at long term capital gains rates rather than ordinary income. So all of your like cash comp, your salary and your bonus every year, the like, say you're making a million dollars as a vp that gets taxed at ordinary income. Right. Like you're, you're probably, if you're in California or New York, like you're paying 50% at some point on that, on that million dollars. But then you make most of your money, most of your actual cash that you are generating in this line of work is like these huge lump sums from these payouts when you, when you buy and sell companies and that could be $10 million, $20 million and it's getting taxed at long term capital gains. So you're paying whatever 25% on it total instead of 50. And people are always debating whether or not that that cash is like investment income, that you should be paying long term capital gains or if it's just part of your income. My personal take is it's pretty clear that it's income and I get why there are people that don't want it to go to income. It's a huge, huge difference maker in your long term wealth creation. But to me it's pretty hard to argue that it's actual investment income. Like yes, you put your own principle at risk when you raise a fund. You might put know maybe a fund has 5 or 10% of their fund capital is the manager's money. But like it's hard to argue that the money you're making out of this is like real investment income. On that it's clearly like it's for your work, it's Income.
- [42:42]
C
When I looked into this, it seemed like it was a scapegoat for people to call these fund managers evil and that they're the problem and that they're why we're spending so much money and they're responsible for the national debt and why we don't, you know, get as much tax money. And they're the ones cheating the system. System. Meanwhile, a lot of it goes out to Social Security. Like, let's go make you favorable. It's the truth. When you look at how much Social Security generates versus how much they pay out, the math just doesn't even work. And the, the carried interest loophole is like 0.000.000. Like there's so many 0 and 0.1 of that versus anything else that you could do that'll make more of a difference than getting rid of that one thing.
- [43:25]
A
I mean, it's tiny. It is. It's one of these things that it's a great talking point for politicians because it's so easy to say, like, look at these mega billionaires and they're not paying their fair share on this thing. It's like it's an obvious political talking point that really doesn't have a huge impact on the national budget. Right. Just as you said. I do think that it's just like it's always going to be something that keeps coming up and then what you're going to go and look at is the donations and where a lot of these politicians get a lot of their campaign donations from. And there's always some big private equity guys that are funding, you know, 50, 100 million doll into these super PACs. And so like, who do you think is not getting, you know, who do you think is like pushing the background agenda on this stuff? Right. It's the people that are funding the money. So follow the money on it. Yeah, I don't think it's going to change.
- [44:11]
C
It's something like, I think it's $4 million a minute is how much we go in debt as a country.
- [44:16]
A
I think the new tax bill is interesting for a few reasons. I think the whole gambling change is really interesting. Have you seen this? I have. I mean, we're in Vegas, so it feels, it feels very relevant. Relevant. But this is kind of crazy because the new change in the tax bill to how gambling is treated sort of craters the professional gambling industry.
- [44:36]
C
I'm told that if your main source of income is gambling, then that doesn't apply. This is more mental. That's what I'm told.
- [44:43]
A
Who are you told that by?
- [44:45]
C
Twitter. But here's the thing. In my defense, in my defense, there are tax experts who've analyzed this plan and they say based on our interpretation of this, if you qualify as a professional national gambler where this is your full time main source of income, this is not going to apply. It's going to apply to the people who are trying to deduct gambling losses against gains casually as like a side thing, not their main source of income.
- [45:10]
A
It's probably more important for people who are non professional though. Like the change in the rule is that, you know, it used to be that you could deduct a hundred percent of gambling losses. So against your gains, against your gains. So if you made $100,000 and then you lost $100,000 gambling, gambling, you didn't have any tax that you had to pay because it was offset. Now you can only deduct 90% of gambling losses. So if you make a hundred thousand and you lose a hundred thousand, there's only $90,000 of that loss that you're allowed to deduct. So you have a $10,000 taxable gain. So you have to pay taxes even though you have no money from your gamble.
- [45:44]
C
Why? My, my confusion was why they did that and who it benefits or what their reasoning was for it. Unless they just don't like gambling. Gambling and that's their way of curtailing that a little bit.
- [45:56]
A
Yeah, I don't know. I actually, I didn't understand the logic behind it. The one interesting like second order effect from it has been have you seen these? All these prediction markets that have blown up and are going viral. So I'm an investor in one of them called Kalshi and Kalshi has like blown up in the news recently because they offer prediction markets on sports games.
- [46:17]
B
Correct.
- [46:18]
A
Which, which basically just looks like the same thing as like going and betting at a sports book but it's not regulated by the same entity so they're regulated by the CFTC and as a result it's not considered gambling losses if you lose money on it. It's, it's a financial contract, it's prediction, it's a vent contract. And so if you want to still do your same gambling now but still benefit from the 100% offset of losses versus gains, you can just do it on these prediction markets and benefit from what it used to be be.
- [46:48]
C
See, I'm wondering who's slipping this into the bills. It's always someone who has an agenda who says hey, we're going to we're going to give you some funding but we want you to slip in this paragraph and this is going to benefit execs man. We don't know dude. It, it could be prediction markets going in and saying hey, this. But you would think the Vegas casinos. You think so Would really be against this. But, but in reality, I don't, I don't think it impacts the average person because they're not, they're playing with a thousand bucks here and there's. There, you know, if they win or lose a few hundred.
- [47:20]
B
I don't logging it.
- [47:21]
C
They're not. And the casinos aren't keeping track. Like unless you have a player's card of like, oh, you won a hundred but you lost 200 and you don't.
- [47:29]
A
Think it's impactful for all the people that are doing like, you know, DraftKings random sports betting on their phones now all this, I mean gambling has boomed over the last few years as it's I think negligibly.
- [47:40]
B
Like realistically even like when I go to the casino, I don't log my gains and losses. I feel like very, very.
- [47:45]
C
Yeah.
- [47:46]
B
Live here.
- [47:46]
A
Yeah.
- [47:47]
B
I don't gamble off.
- [47:47]
C
You would just put in 100 bucks and if you. Or like it pays for dinner or you lost it all.
- [47:52]
A
But you're talking about casino gambling. Like what about just on your phone like the number of people that are just doing sports betting on their phone.
- [47:58]
B
I think of my friends that do and I don't think that they care about the tax consequences. I think that's kind of like a, a very niche thing. Like most people are just like W2 people that get paid out and they get their taxes withheld and like okay, you know, they don't actually go and even investments like they don't consider realized and unrealized.
- [48:11]
A
You mean they don't care about the tax. Like they're just not paying taxes on it?
- [48:15]
C
No, there's just not thinking about it.
- [48:16]
A
But like not thinking about it is fine until the IRS comes in, you get audited and you have.
- [48:21]
C
They're not gam. I guess our friends aren't gambling at levels where it's like going to be more than like $100 in TX.
- [48:26]
A
I hope so. I, I feel like gambling is one of those things that like, you know, been increasingly legalized and everyone's like talking about all the benefits from not drinking is like the new hot trend of like, oh, people are drinking less and less and you're like, okay, but they're gambling way more and you're like, so you traded one vice for another.
- [48:44]
C
What do you think is better? Drinking or gambling? Gambling.
- [48:47]
A
Drinking.
- [48:48]
B
Drinking is better for you.
- [48:50]
A
I think drinking is. My hot take on drinking is that I think that the whole zero alcohol movement is going to be a net negative for the health of society because people are drinking less. But as a result even if they're getting a health benefit from that, they're not hanging out with their friends. And so I think people are drinking less and they're like oh my sleep score is sick. But they're super lonely because they're not going out.
- [49:13]
C
That's interesting. You see Gen Z right now, now is not socializing as much as they were. They're not getting in relationships. And the amount of I think it was like virgin 30 year olds living with their parents was like the highest level ever in history. But that could be because they don't have the social confidence that just having a, you know, a beer would like give them that bit of a boost to go up and talk to that person or just want to get out of their parents house.
- [49:40]
A
Yeah, whenever you say this people say like well if you had to drink to hang out with your friends, they weren't really, really good friends. But, but I'm just to that I'm like to me having a drink just helps you loosen up, you have a better time, it's enjoyable. I still have a drink probably once a week I'll have a glass of wine with my wife or if I'm having a dinner with a friend, I'll have a drink. And I love it. It's a net positive to my life. Even if I, yeah, it's a little negative for my health. Okay. I'm fine with that if it creates the type of social settings that I like with people. I just think that on the like statistics around this it's pretty clear like teenagers in the US are spending 70% less time in person with their friends than they were two decades ago. A couple weeks ago I saw a stat that just was showing the percentage of people in the US who are married and own a home before age 30. It was like 50% in the 60s, 70s and 80s. And now it's that's like 11%. It's fallen off a complete cliff.
- [50:43]
C
Yeah, I mean I kind of understand the reasons why, why home prices, rising home prices, incomes really not keeping up with inflation and the price to buy a home and then the Internet that you could just do anything you want online. There's no real reason to go out and hang out with your friends.
- [50:59]
B
Because there's movies anymore. You know, people don't go like out. It's just hang out, watch movies on Netflix, streaming services. TikTok.
- [51:07]
C
Yeah, no one goes out shop shopping anymore either, like besides groceries, but like I would never go to the mall and go shopping. I wouldn't really do that before either, but now I'm especially never doing it. It's just I could go online, find exactly what I want, ship it, and returns are so easy these days.
- [51:24]
A
Yeah, partying is down. Partying is down bad in the US if you look at like the percentage of people who said they went to a party in the last month, it's like just completely falling off a cliff. 70, 80, 90% down over the last two decades. But again, I'm like, okay, so we're drinking less, we're optimizing our life in this one area, but are we just harming ourselves in another one?
- [51:44]
C
It's probably going to be an issue when you look at the birth rates. And then at some point we're going to be a bit like Japan.
- [51:50]
A
We're already, we're already like that.
- [51:52]
C
We're not, we're not that bad.
- [51:53]
A
Well, like, we're on that trajectory for sure. Yeah, the demographics in the US are really bad. I mean, Elon Musk is like always talking about this, right? This is like their big thing.
- [52:02]
B
What are the main concerns with the demographics?
- [52:04]
A
Just that we end up in a world where you have a ton of dependent age people and not enough working age people. So you end up in a country where, like Japan, where you know, the average age is over 60. And so you have a whole bunch of people that aren't working that need services provided to them. And it's all paid for by young people that there aren't enough of them.
- [52:23]
C
So here's what I think. There's really only two options. One is you financially incentivize people to have kids. That's certainly an option. I don't think we're going to do that. The other option is just really incentivize good legal immigration and bring people from other countries who want to live and work here. I think those are the only two options. And I think Japan is going to be doing the same thing at some point. I think they're going to make it very easy for people who want to live in Japan to go and move to Japan. They could live there full time, they could work there, they could integrate within the society. Maybe there's some requirements there, but it's a beautiful place. And when they don't have that amount of people, I bet they, they could select for who they want to move there. I think they're going to make it very appealing for us people to move to Japan. And then the US is going to be like, wait a second, you can't take our workers. And so the US Is going to have to do something.
- [53:12]
B
I know a lot of people that are at the age of having kids and their primary concern is being able to financially justify having a kid. Whereas now I feel like everyone's like, okay, I have to build up this sort of a nest egg. I have to have this amount of money coming in. I have to have a house. So I don't have rent when I'm having a kid. Kid. Whereas back in the day it was kind of like, have a kid, kind of figure it out. So I don't know.
- [53:30]
A
Why do you think that that's changed? Like, why, why is there such a, you know, concern around that now versus.
- [53:39]
B
I think people care about money more than they used to. Like, I, I saw this one Jerry Seinfeld clip a long time ago where he was like, back in the day people didn't care about money like they do today. Back in the day, people would ask you, what do you do for work? Oh, I do this. Oh, that's a cool job. That's what they cared about. It wasn't like, how much are you making? How much money? Do you kind of like the narrative of conversations now? Back in the day, it was just like, do you have a cool job or do you not? And so I don't know exactly why that is, but I think, like, maybe it's materialism, consumerism, you know, marketing, how every company is telling you what you need and how it's, you know, you need to buy the newest iPhone, the newest car, to have the coolest things to attract the coolest partner. Maybe it has something to do with that.
- [54:21]
C
I think maybe people are just getting a bit complacent.
- [54:24]
B
You know, it could also, and it's probably a combination of that too. Life has gotten too appealing to sit on your couch and scroll on tick tock.
- [54:29]
C
Get anything you want delivered on credit. You could break up that chipotle burrito.
- [54:34]
B
Into 4 =doordash.doordash is the bane of human existence.
- [54:39]
A
You can spend a lot of money on those things, man, without realizing, but everything is there.
- [54:43]
C
Everything you need is within a room, and you're totally satisfied.
- [54:46]
A
I mean, that's the, that's also the problem, by the way, with like young people dating with, you know, committing to long term relationships. Like all of this stuff is all tied together where you, like, you live in a, in a world where at the touch of a button, you can press the eject button from anything, right? Like, oh, I don't, I don't really feel like going out, like eject button, okay. It all gets delivered to me here. Like I'm dating someone and it's no longer like the honeymoon phase. Like, well, I have a thousand options on my phone on this app. So like eject button on, on that. And the problem is the vast majority of good things in life, every single thing you want is on the other side of a little bit of struggle. Like the best relationships are built through crawling through the mud with someone over a long period of time. Like engaging in hard conversations, being able to navigate that, getting past that honeymoon phase and recognizing that all of the growth that comes from the challenges. And if you're so quick to press the eject button as soon as it's no longer amazing, you're never going to actually experience the good that was on the other side of that struggle.
- [55:54]
C
So what do you think are the best opportunities today for the next few.
- [55:58]
A
Years to make money?
- [55:59]
C
Yeah, speaking of money.
- [56:03]
A
I think that the most interesting opportunity right now is AI enablement for small and medium sized businesses. If you are a young person right now and you are technologically savvy, you could be making an enormous amount of money by consulting directly with companies that have no idea how to use AI or implement it into their workflows. Huge companies can go and afford McKinsey or Bain or whoever to come in and do this for them on these enormous projects. But small and medium sized businesses are not getting hit up by those big consultancies. And you as an individual can go out and build a legitimate high cash flow consulting business going in and doing this, and it's pretty easy. You're going into businesses that are fundamentally pretty simple. You're going and evaluating their workflows. You basically have them record everything they're doing. You maybe go in and spend a couple days there and then you're effectively just going to create a playbook for them on how to implement AI to improve their workflow. Close. I think that a young person that understands AI and has a pretty decent understanding of some of the models that are out there and the capabilities can go build an a hundred thousand dollars a month business doing that very quickly and what's holding them back, agency to go and do it. I mean, you have to be willing to put yourself out there, right? Like you have to go send 100 cold messages to people. You have to create pitch decks. You have to actually build up some level of confidence to go into these rooms as a young person and be able to help them with this thing. Part of that is just recognizing that you have a completely unique lens on the world that these companies run by slightly older people do not have. Like my mom runs a, a small business and she's constantly asking me like how should I be using AI for these things? And I'll give her the most basic thing that she should do, whatever it is. And it's like world changing the most basic thing. So you also have to realize that like, like for a lot of these operations that you'll go into, you're not going to have to like wow them with some extraordinary new use case. Like sometimes it's just giving them the system to implement something very basic that will very quickly create a meaningful impact for them.
- [58:14]
C
So I was reading earlier today that users of ChatGPT are reporting lower levels of like brain function because they become so reliant on ChatGPT. What are your thoughts on the future of people just get becoming too reliant on this because I'm finding now that like when I get a text sometimes and I maybe hastily would write something, I'm now screenshotting texts to Chat GPT and I'm saying give it, give me a good response to this. And it's just giving me like a nice response. And I hate to say it, but the responses are better than what I would have written. They sound a lot gentler.
- [58:55]
A
I think we're, yeah, I think we're cool. Hooked. I mean I'm like I'm, I'm. I have a three year old kid, right? So like when you have a kid you are fundamentally going along the future like you know you're having a kid, you're like betting on the future in a lot of ways in a really meaningful way. I'm terrified. I think that there are a number of like meaningful causes for concern. I think on the thinking front I, this is my most immediate near term one which is we are outsourcing are general thinking to these models and if you think in a simple sense what you outsource in life will atrophy. If I go hire a private chef after a couple months I'm going to suck at cooking because I outsourced the thing. So I'm not going to be good at it. I'm not flexing the muscle in any way. If you start outsourcing all of your general thinking to these models, you are no longer going to be thinking as much. You're not going to be wrestling with ideas in your head. You're not going to be sitting there with them as a result. Result that is going to atrophy. There's this story of Max Planck. You know who he is, Max Planck. He's the German Nobel prize winning physicist and he goes on this like tour around Germany after winning the Nobel Prize and he's giving lectures everywhere. And his chauffeur is driving him around all these things. And the chauffeur says to him, like, I've listened to you give a hundred of these. I could just give this whole lecture, I've memorized it. And so Max Planck says, like, sure, go up and do do it. Gives him his tie and the chauffeur goes up on stage and gives the whole lecture perfectly from end to end. The crowd doesn't even know. They all stand up and applaud. And then someone asks a pretty simple question and the chauffeur is like, that's such a simple question. I'm going to have my chauffeur in the back answer it. And it's Max Planck standing there with a chauffeur hat on. The point is there's really two types of knowledge. There's real knowledge and then there's chauffeur knowledge. Like chauffeur knowledge is that surface level stuff that you mostly see with people now, because we've outsourced our need to think deeply about these problems to the AI. And so what I worry about is that we end up in a world where we are just humans, just chauffeur level thinkers, just surface level thinkers. And a lot of the problems in society are created by, you know, chauffeur level thinkers masquerading as real thinkers across any area. And so I just, I worry a lot about that.
- [61:13]
C
Do you think anyone could be an entrepreneur and who shouldn't be an entrepreneur?
- [61:18]
A
I mean, if you broadly define entrepreneur, absolutely. I think anyone can identify problems and go and create solutions. I don't think everyone should though. I think anyone can, but not everyone should. Who shouldn't? If you are not the type of person that is willing to truly have everything on your back, you should not be an entrepreneur. I think that the harsh truth of entrepreneurship is that most people say they want freedom, but they actually just want the illusion of freedom. They wouldn't survive a day with the reality of it. Because entrepreneurship is not the glamorized version that you see on social media. Entrepreneurship is like being up at one in the middle of the night stressing about whether or not an invoice is going to come in on time and whether you're going to meet payroll or whether you're going to be able to close that deal that your entire company is hinging on, or whether you know you're doing enough or whether you need to pivot the company. There is nothing comfortable about it because it's a recognition that everything is on you at all points in time.
- [62:28]
B
Who's better at being an entrepreneur? Type A or type B people?
- [62:31]
A
That's a good question. How would you define type B?
- [62:37]
B
Type B, I would say more impulsive, more quicker decision making, a little bit more chaotic, disorganized, not super great at planning.
- [62:52]
A
Yeah, I mean, I think on the surface, actually, paradoxically, type B people would thrive more as an entrepreneur. I. The risk with type A people as entrepreneurs is that you're so organized, you're such a good planner center, you're a perfectionist, and you never do anything right. It's like the trap of information gathering. You're like, dopamine from information gathering is a dangerous drug. Like, I'm gonna go read all the things, I'm gonna gather all this information. I'm gonna take all these courses, I'm gonna read all the books and do all these things. And then you get this big dopamine hit from it and say, like, oh, look at all the stuff I've done. But you haven't actually done anything yet. Like, the, the. The real person has gone and failed 20 times while the other person was reading all the instruction manuals. And on it, like, you, you can't read 0 to 1 by Peter Thiel and think you're an entrepreneur. Like, real entrepreneurs have gone and tinkered with a whole bunch of stuff while the other person was reading a book. And so if you think about it as like, entrepreneurship is really about awareness and action. All life is really about awareness and action. And the whole goal has to be to have a razor thin gap between awareness and action. Like, from the moment you gather that information to the moment you are acting on that information. You need a razor thin gap between the. The two. And type A people, because they're perfectionists, tend to have a big gap. You, like, sit, you're gathering all this information for a long period of time. You're like, stewing on it, planning all of these things where someone that's just willing to go out and test it and figure it out, screw it up and adjust, adapt. They're going to be more successful in the long run.
- [64:20]
C
Now, really quick, I just want to say that when Jack and I first started the Iced Coffee hour, we had to figure out everything ourselves. From the best cameras to use the best editing equipment, how to get guests. Every day presented a brand new challenge. That's why if you're starting or growing your own business, you know how valuable today's sponsor is. And that would be Shopify.
- [64:38]
B
Shopify is basically your all in one business partner. They power millions of businesses worldwide, from major brands like Mattel and Gymshark to entrepreneurs just getting started. Fun fact. If you've shopped online in the us there's a really good chance it was through Shopify because they handle about 10% of all American e commerce.
- [64:54]
C
What's great about Shopify is that they give you access to a complete design studio with hundreds of ready to use templates to build a beautiful online store that perfectly matches your brand and there's no coding needed. Plus, their AI tools even help you write product descriptions and enhance your product photos.
- [65:10]
B
Shopify also makes marketing extremely easy with simple email and social campaigns to reach customers wherever they're scrolling. Plus, they handle everything from inventory to shipping to returns. As a business owner, these are all of the things that I absolutely detest. And you probably hate it too. If you're a business owner, they will handle all of that for you.
- [65:26]
C
So if you're ready to sell, you are ready for Shopify. Turn your big business ideas into so.
- [65:31]
B
Sign up for your $1 a month trial at shopify.comich there's also a link down below in the description. You could click it right there, guys, it's $1 to try it out for a month. We've had so many people on this show that have made millions of dollars with their Shopify store. I've had a store. Graham's had a store. He hosted Bankroll Coffee, his coffee company on Shopify. I have no complaints. You want to try it out? Maybe create a million dollar business? $1 a month@shopify.com ich.
- [65:55]
C
Thank you again to our sponsor, Shopify. And now let's get back to the episode. Now, one of the biggest challenges when it comes to growing a business is knowing when you can't do everything yourself. Scaling requires the right expertise at the right time. And that is where our SP Upwork is there to help. With more than two decades of experience, Upwork was built with a simple but ambitious Goal to pioneer a better way of working companies at every stage. Use it to find flexibility and tap into a global marketplace of talent. Whether you need anything from it, web development, AI, design, marketing or admin support.
- [66:27]
B
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- [66:47]
C
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- [66:51]
B
So if you want to post a job for absolutely free, go to upwork.com or click the link down below in the description. It is upwork.com upwork.com huge.
- [67:00]
C
Thank you again to Upwork for sponsoring this episode. And now let's get back to the podcast. Podcast.
- [67:04]
B
How do you personally raise your awareness? Do you meditate?
- [67:09]
A
No, I can't meditate. I've never been able to. I, I talk to a lot of people and I think a lot, every single day. I, I think that there are really four types of professional time. You have management time, which is like what we normally think of as work. It's like emails, meeting, meetings, presentation stuff, you know, whatever, like invoices, processing, admin tasks. Filming this, filming this. This would be creation. So the second type is creation time. That's like you're creating something, you're filming this, you're writing, you're coding, you're creating something. The third and fourth types are consumption and ideation. Very few people make any time for those two things. Consumption is like you're reading, you're having conversations, you're listening to things. And then ideation is, you are active, actually thinking about things totally separate from the other types. Like you were actually stewing on ideas and thinking. Very few people create any real structure around those last two types of time. I create a lot of structure around those. I have those every single day. And so on a daily basis, I am consuming new ideas that are coming in the top of the funnel and I'm thinking about those ideas and that allows me to constantly have the creative output that I need to actually go and make money. Money. Like, I mean, I make money off of writing and sharing ideas. Like most of my income is all around that. Speaking, writing, book deals, all of that stuff.
- [68:30]
B
It's really interesting. I feel like Graham is, he's optimized for the, the Management time. Like the, the time where he's like actually doing things. I've optimized for like the, the thinking about things time and I'm like very bad at that. And I think Graham's pretty bad at like thinking of, of new ideas. How do you carve out time intentionally to create, create new ideas? The first thing do you just sit down and think.
- [68:54]
A
I, so I, I'm huge on time blocking. So my calendar like is separated out like chunks of time for these different things. The first way that you have, you have to do if you're going to create time for these others is you have to like condense the amount of time you're spending on the random bs. Like emails tend to bleed out over the entire day. As an example, it's like it's called Parkinson's law. Work expands to fill the time allotted for its completion. So if you give yourself eight hours to do emails, you'll take eight hours to do your emails. If you give yourself an hour, you'll crank through it incredibly efficiently and get it done. So give yourself uncomfortably time constrained windows for these like boring management tasks. The fact is the management tasks are not driving you forward. Like they're not creating the step function changes in your life. They're keeping the lights on in general, which is important. You need to get them done done. But they're not the thing that's going to create the 10x or the 2x even you know, jump in your income or wealth that comes from the other three. That comes generally from consuming interesting ideas, thinking about them and then creating things around that. Whether it's creative work or whether it's new businesses or whatever that might be. So batching the stuff is really important. And then just create a structure around it. Like have a window on your every single day for 30 minutes where you're like reading something, something like free reading. Have a window for an hour where you're going for a walk where you're just going to be thinking about different stuff. I mean I probably walk several miles a day. Just like that's my thinking time. I don't bring my phone. So what do you think for a walk? The most random things like it's not, I'm not like setting myself up for a specific thing. Sometimes it's thinking about a book structuring issue like that I'm working through. I signed my second book deal so like I'm working on that now. And it's a lot of structuring time to think about about it. Sometimes it's like World War I was really interesting and I'm like randomly thinking about some World War I stuff that I just learned. History nerd.
- [70:44]
C
Could you tell who's not going to be successful or who's going to fail?
- [70:49]
A
Yeah.
- [70:50]
C
What do you look for in that?
- [70:51]
A
Anyone that can't stick to things and finish. I think that's probably the single greatest predictor of failure, is someone who jumps from thing to thing. If I was looking at resumes, if I was hiring still for anything, like, you know, long term building a firm, I think the biggest red flag is someone who's jumped around to like six jobs over the course of two years. And unfortunately, very few young people get that advice that like, that stands out in a negative way. But it's really important because not just seeing something through, like, I think this is one of the biggest cheat codes for life at this point is just finish things. Just figure it out and finish the thing. And, and it signals a lot about the type of person when someone has been willing to do that, to just keep showing up to do what they said they were going to do. And normally if someone's willing to do that, they'll find a way to win over long periods of time.
- [71:43]
B
So how much of someone's success is determined by their natural biological disposition? And then how can like directly applicable things can they do to improve those chances? If someone's listening right now and they've failed over and over and over again, or they've just lived the life where they feel like hasn't amounted to much or what they would have liked it to amount to, what direct things can they do in their life to increase their likelihood of success?
- [72:09]
A
I don't think anyone is destined for failure based on birth. Like, obviously we are all born with a different set of, you know, different hand, if you will. Like, you know, a lot of some people are, can be born on the streets of India and you're like, obviously you have the deck stacked against you. You have to like, rise up a whole lot more. More. But I generally think in the world that we live in now, with access to the Internet being what it is, anyone can, that has, that is high agency that is willing to go out and do things, can go and, you know, live a like, baseline good life. I don't think, I don't think it's fair to say that anyone can go from no matter what where they're born to being like a mega billionaire. I think that's there. It'd probably be very difficult for certain people, but you can Go live a good life. I think anyone, what would I do? Honestly, I think that if you take any job, like if you're gonna go just take, take your first job, whether that's like working at Starbucks or cleaning bathrooms at Starbucks, whatever that thing is. I think if you show an above average willingness to just go above and beyond what is expected of you in that job job, you just like go figure things out and go and deliver value. You will get more and more opportunity over periods of time. The problem for most people is the second they don't feel that they are getting that some people jump off the tracks. So like if, if you think about your life as like this chart of sort of the value you're creating and then the value you receive, there are going to be times when you're like doing a whole lot, you're working crazy hard, you're doing all these things and it's not being rewarded. Rewarded. Right in that moment, it's not being rewarded. It's called the heaven's reward fallacy. Like we think that all of our efforts should be justly rewarded, but that's not the case. Sometimes you have a boss that sucks. Sometimes you're in a work situation that sucks. But over the long run those blips even out. It's kind of like in the stock market. It's efficient in the long run, but not in the short run. Like there might be a company that's massively undervalued now, then there's that same company is going to be overvalued at some point. But in the long run, price and value should align. It's the same thing for your life. Like the price you are paid for the work that you do and what you can get create is going to in the long run align with the value that you go and create for people. And so I would just spend all of my time thinking about how can I be valuable in whatever context that I'm currently in. Like, and it doesn't need to be dramatic. Like, like whatever context you are currently in, just think about the problems that the people around you have and how you can figure out some slight way to solve those problems. And that applies to any context. It doesn't matter what that job is. Is.
- [74:50]
C
What do you think about living very frugally throughout your 20s?
- [74:54]
A
I think it's a great idea to live frugally first so that you can live wonderfully, lavishly later. I mean, just logistically, if you're thinking about making money and financial independence the greatest asset you have in your journey to financial independence is the gap that you can create between your cash inflows and your cash outflows, right? It's like the money you're making versus the money you're spending. That's a, a gap there, hopefully a positive gap. And that's the gap that you can invest into things that are going to compound. And if compounding is like the engine of financial independence, then that gap is your greatest asset because that's what's going to fuel that engine. That's like the coal that you're going to be, you know, throwing into the steam engine or whatever you want to call it and living frugally, meaning like not allowing your expenses to grow as fast as your income hopefully grows, is how that gap grows that you can then be investing more and more into something that's compounding longer long term. For me, the fact that I saved money and compounded in the time period from my 23 when I started working until 28 was how I bought a million and a half dollar house when I was 27 or whatever. I didn't just make an astronomical amount of money in cash. I had wealth that was building from the carried interest, but I wasn't seeing that. It wasn't cash that I was getting. It was all just that neither one of my wife or I are big spenders. We don't buy jewelry like we, we like experiences. So we go on vacations, but we're not like fancy car people really. And as a result we had a gap and we were investing that gap and stacking it. And small things become big things like it just, it just works.
- [76:35]
C
What are your thoughts on buying versus renting a house now? Speaking of saving money, I think that.
- [76:42]
A
In the vast majority of markets in the US right now, it is more advantageous to rent the and buy prices are crazy. And you like the American dream. Telling you that it has to be about owning a home can be a dangerous thing for a lot of people because I think there's a lot of homeowners in the US who own some expensive home but have zero cushion if something goes wrong. And to me that's like an inexcusable thing thing to take on a whole bunch of debt and be in a situation for your family. As a father and someone with more traditional values, I just think it's inexcusable to leave my family in a place where we don't have a cushion or a safety net. If I all of a sudden can't work for six months or something goes Wrong. Or we have a big healthcare expense. And a lot of that happens because of this pressure to buy a home. You go buy like, oh, I make a million dollars a year. Well, a bank will loan me enough money if I'm making a million dollars a year in a W2 Inc. Income, a bank will loan me enough money to go buy a four and a half million dollar house, you know, in Newport Beach. And I might be spending 50 grand a month now on like between my mortgage and my property taxes and all the things associated with owning this home. And then I have the like, you know, nannies and I like the whole life, the expenses. Now every single month I am break even on this million. Like I'm making a million dollars a year and I'm somehow breaking even on that money. So I have no nest egg, no cushion. And if something goes wrong, if I can't work or if I lose my job. Job. We have a month before we run out of money. Like one one of my best friends actually was working for a long time in a, like lucrative career track and got laid off and literally given two weeks notice after 15 years at this company. Like, thought he was on the long term track. And we sat down and I was like, oh, let's talk about your next career trial. But like, let's walk through your numbers first. And he had two months of Runway. He's got three kids. He had two months of Runway. And it's literally because like we've created this culture where you have to buy a home now, you have to move to the suburbs now. You need the country club now. Like these. It's all the keeping up with the Joneses that we've created leads to people making decisions that don't actually make any sense.
- [78:54]
C
What happened to him? Did he make any changes after that?
- [78:56]
A
He got a new job that, that sort of insulates him from it on the back end of this. And yeah, they made some. I mean, I told him, I was like, dude, you have to make some serious changes to the way that you guys spend money because there's no excuse for not having six months of. You've been working 15 years on lucrative track. You need a six month emergency.
- [79:18]
B
What car was he driving?
- [79:19]
A
You know, like Audis, like nice cars, you know, but like in a nice.
- [79:23]
C
Suburb, like, what sort of friend goes to you and says like here, here's my like monthly expenditures. Because even for me, like, I don't think any, any one of my friends would come to me and say, like, hey, go over my monthly expenses and Tell me how to save money.
- [79:36]
B
My friends do. I literally got a FaceTime call yesterday. I got a FaceTime call yesterday from a friend from, in high school and he was like hey man. Because he quit his job recently, he's like hey man, look, I got this money and I, I'm, I'm traveling the world and I spent. Dude, I was in Europe and I spent like 15 grand on this trip. He's like I, I don't know if I can afford it. Could you just go over and create a spreadsheet for me like I know you did for another friend. Cuz I did it for another friend. And, and we could go through all the income, all the expenses. I'm like great. List out all of your assets, all of your liabilities, you know, how much money you could be making if you got a, with your engineering degree, etc. Etc. And he's like okay, cool, I'm on it. Like the friends do that.
- [80:13]
A
It's extraordinarily valuable that you did that too.
- [80:16]
C
By the way, give him Caleb Hammers number.
- [80:19]
B
He's not, he's a, he's in a, he's in a better financial position than most people on his show. But my friends know that like if they're in a spot then they can come to me and I'll walk them through.
- [80:28]
A
Yeah, everything. I mean for context, this is also like, this is like my brother, this is like my best childhood friend. I've known him forever. I was shocked frankly by the whole situation. And like now he's making adjustments and he'll be in a much better place. But the point, point is a lot of this is cultural again to the point earlier of like your environment, it's all mimetic. So like, if you think that the next step is buy a house, then it's have a kid, then it's the country club, then it's the, you know, fancy car, then it's the vacation home. You do all these things and then 2008 happens and you see why like a bunch of people had all these houses and boats and stuff that they couldn't actually afford. Like we live in a, we live in a country where people will loan you money to buy things that you cannot afford. Afford. Just point blank you can't afford the thing. Like my rule has always been if, if you're going to take on debt to buy something, exclude a house. If you're going to take on debt to buy a material purchase like a car or a boat, you better be able to pay for that. Thing in cash, twice over. Like, then it's like, okay, I can afford this thing. Definitively, I can afford this thing. So now if I want to play the financial game of taking on the debt because the interest rate makes sense versus what I can invest it at, I get it, go do it. But if you can't pay for it twice over, the reality is you cannot afford this thing. You are living beyond your means. You're using someone else's money to buy a thing that you can't afford. So you have to be eyes wide open about what that means about your financial situation in buying this. Like, again, you were doing it. You're doing something you can't afford.
- [81:50]
C
Yeah, I'm seeing, when it comes to houses, a lot of stories on Reddit right now about people who've bought in like 2022, 2023, 2024, and they were told, or they had the belief that, oh, I was supposed to refinance when rates came back down and, and now rates never came down and I have to make this payment and we want to move now, but I owe more than I could sell the house for, and I would have to come out of pocket to sell my house, and I can't do that. So my only other option is to rent. But if I rent it, I'm losing $1,500 every single month, you know, to own this house and rent it. So I don't know what to do. I'm stuck. And then you hear everyone on Reddit just, you know, just going off on this. But I think it's becoming more and more and more common. The market's softened enough where people can' get out of their houses and they're at an interest rate that they can't rent it out profitably.
- [82:40]
A
I think the housing market is going to explode at some point. I just, it just, it does not make sense to me the way the housing market has functioned. I, I also think if you're a young person in a major city or suburban area, like the, the pathway to owning a home at the current prices, I don't know how you're possibly going to save up enough money from like a normal job, you could be doing well, like making 150k a year, 200k a year, and la, let's say, I don't know what the path is to you saving enough money to have a down payment on a legitimate nice home.
- [83:13]
C
It's, it's the great wealth transfer. A lot of people are getting money from parents or financial assistance from parents and Then they're buying the house.
- [83:20]
A
Yeah, I bought, when I bought our house in New York, I had a seven year interest only loan on it that I now have three more years on it. It's at, it's at 2% I think, but I only have three more years on it and then it's going to adjust. And, and so like the cost of living in this house right now is incredible. But in three years, if we're still in the house, if I haven't sold it by then, or if I haven't paid down the whole mortgage by then, I mean it's going to be insane. The actual like market adjustment on the thing. I'm actually shocked by the way like that banks aren't out there paying you or giving you a discount on paying it down to just get you out of these loans. That's what I thought like bank of America should come and pay me to just get out of this.
- [84:04]
B
I think they're already getting enough getting people to take helocs out because I always get these flyers in the mail that are like, hey, you'd be surprised the amount of equity you have in your home. You could get a check for $100,000.
- [84:14]
C
So I looked into this because I had a large, it was a seven figure loan at 2.875% fixed for 30 years and I wanted to see if I can negotiate paying it off.
- [84:26]
A
Yeah, at a discount.
- [84:27]
C
Yeah, exactly.
- [84:28]
A
There should be, right, like there should be a discount.
- [84:30]
C
I think the issue there is that those loans are sold and bundled together and it's not like you could individually negotiate that one loan. Like if you had a private investor on the other side, they'd be bagging to pay this thing off.
- [84:41]
A
I'm just shocked. There's not like normally within financial markets if there's a way to make money, like if there's like clips like you know, arbitrage like that someone is going and doing it. And so I won't be shocked actually if like you hear about a financial product being created by some enterprising hedge fund or investment banker that allows people to go and do this.
- [84:57]
C
I want that. I also want to be able to take the mortgage with me to the next property. So if, if I could afford this mortgage, as long as the next property appraises and there's enough upside on, on them, I should be able to take that 2.875, take the same amount that I owe and just move it over to another property. And if anything it could be backed by even more equity like like the upside could be even greater in terms of like, if I don't pay, they get even a bigger payout.
- [85:23]
A
You can do that in certain countries. Canada, you can do that. You can't do it in the US or it's just very non standard. I looked into this recently because we were, we're thinking of moving and like to the Boston area and, and you just can't do it. They just, they're not set up to be able to go and do that. But the, like. The whole thing that breaks my brain on the housing market is I fundamentally don't understand why there is this assumption of housing values going up over long periods of time. Like houses. I, I understand the land piece of it, but the house itself. So I'm like, okay, I get it. You have land that should be appreciating over time because it's scarce, scarce. But the house definitively gets worse. Like the house itself is a depreciating asset. Or it should be like if you go get a 20 year old house, that house is worse and costs more money to maintain than a brand new house.
- [86:14]
C
Okay, I'll give you the counter argument. You have plenty of homes throughout California that are a hundred years old or more and they're still standing. The foundations are still holding up. They need repairs obviously, but they're still functionally there. The, the counter to that is that labor is more expensive, materials are more expensive, and when you look at the long term, over 30 years it could cost more to recreate the same thing, thereby driving the values up. Because you look at the replacement value, it's not all of it obviously, but that's a component to it.
- [86:47]
A
So you buy into the whole housing prices should just keep, keep going up over long term.
- [86:52]
C
No, I buy that they would, they will go up. But is that enough to counteract inflation and opportunity cost and repairs and maintenance? Maintenance, I don't know. But I think when you look at nominal home values and the prices, I think 50 years from now they're going to be much higher. But is that enough? You know, if, like, if my, my, like here's an example. If home prices go up on average 2% a year, which they, you know, it's been about 1 1/2% a year over the last hundred years. But is inflation 3%? Like does that eat into the value of the home? Now your real returns are negative, but you're showing a price increase on your house.
- [87:31]
A
I just, I also think this overlays into the whole AI discussion from earlier of whether or not we're, we're completely cooked. Because if you think about who has bought homes in the United States, it's been knowledge workers, basically. Like, if you think about these high priced homes in like these city areas, like these prices have continued to go up. It's basically knowledge workers, right? It's like all these college educated knowledge workers working at these big companies that are hiring tons of college educated kids. And my questions is a lot of those jobs are going to get just eviscerated, these knowledge worker jobs, right? It's like the first thing that gets eviscerated is like, you know, social media manager, marketing manager, like, you know, all of these like roles that are increasingly using AI to disrupt, especially at the entry level. And so you wonder whether like this whole kind of house of cards that's been created in the US Economy with like, okay, we take out huge student loans to go to these overpriced colleges because we know that there are jobs on the back end of it as knowledge workers which are going to be these high priced jobs which is going to allow us to do the American dream, move to the suburbs, have a country club and have a house. If pieces of that start to get broken, does the whole thing just start crumbling?
- [88:44]
C
I think it does. I just posted a video about this that college tuitions increased the moment they created the Department of Education. And what's crazy is that once they began subsidizing student loans, which I get why they did that, to promote people to go to college. Once they started subsidizing and giving loans, college tuitions increased accordingly. So now you borrow more to pay more, which required you to borrow more to pay more. And it was this upward cycle. The same thing to a smaller extent has been the case with housing, that it is subsidized by the government who even backs mortgages they'll buy. The more they guarantee that they will buy your mortgage even if there's not an investor, because they want to make sure there's money flowing into the markets. And studies have found that there is a marginal increase in the home's price when it's backed by the federal government versus homes that are not, all other things being equal, that being the only variable that those homes sell for a little bit more. So there is an upward pressure on housing prices, the fact that it is subsidized by the government. But now you can also argue wealth creation. The government has an incentive on that. It leads to higher property taxes, higher revenues for the city. I mean, I'm sure there's some Benefits there. But like, to what degree? Because I guarantee if you have an investor on the other side of the loan, they would be negotiating, like you said, to pay off those loans faster. Or if they get in a bad deal, they want to get that off the books. Or they would just say, hey, right now is a shaky market. We're not going to lend money. And if the capital market dries up and people want to sell their house, they could take a huge hit on that.
- [90:17]
A
So this is like a bitcoiner's wet dream, this whole, like, oh, like, you know, a Ponzi scheme of the US Economy that's been based around this inflation target.
- [90:29]
C
It's kind of true because. Because the housing market should be efficient. It should be. If you're a borrower with a 650 credit score, you should be paying a much higher interest rate than the person with, you know, a 680 credit score. Just like. But. But the government looks at these things, and if you have a score above 650 and you have like, all these things, you treated the exact same. Like, Me having an 8:45 credit score makes no difference compared to the person who has a 780. So, like, I feel like there should be benefits to having a higher score, more income, being a safer borrower, but the fact is, like, you can only get rates so low.
- [91:03]
A
I feel like the other thing with the whole buy versus rent debate that people miss is life isn't lived on paper. So, like, whenever you see one of these debates, people lay out the math and they're like, okay, well, here's what it looks like if I buy, and then here's what it looks like if I rent. And generally speaking, when I've seen people lay out this math, it's like, okay, you should rent because, you know, the return you actually got from this home that you owned is not outpacing that same money put into the s and P500. And you didn't have to deal with the headaches of homeownership along the way. And so there's like, when people live it out on paper. I actually, I understand that. I understand that whole debate. What I think it misses is this the part of life that is just not lived on paper that, like, it makes me feel really good that I own a home, that I have my family, family come and stay in, that I can have friends come and stay in, and that I own it. I don't know why I care that I own it versus me renting it. But there's something about Saturday morning, like, I'm cooking pancakes and my parents are playing with my little kid in a house that I bought that like brings me more joy than about anything else in the world. And I can't put that on paper. I don't know where that is on this math sheet, but it would feel different to me if I rented that.
- [92:12]
C
That was the top comment of my video where I went over the math and the top comment was, I don't view my house as an investment. I just want place to live that's my own. And I agree with that. Not everyone is seeing a house as an investment. But then you got to put it on the list of expenses of where do you put that in terms of driving a nicer car? Where do you put that in terms of flying first class or eating out at a great restaurant? Getting experiences in your life? It's got to now be tracked as not only a place to live, but it is a financial expense that you have to think about.
- [92:46]
A
Are you still not flying first class?
- [92:48]
C
No.
- [92:48]
A
You like, you refuse?
- [92:50]
C
No, I've, I've upgraded seats.
- [92:53]
B
He sat in the big seat in Spirit.
- [92:56]
A
I've never flown Spirit my whole life. What it, what, what's it like? What's the big seat? It's cool.
- [93:00]
B
It's fantastic.
- [93:01]
A
So it's like a first class seat.
- [93:03]
B
Let me walk you, let me walk you through something real quick. Okay, so you could buy a Delta flight from Las Vegas to New York for six, say 450 bucks. Or you could buy a Spirit flight from Las Vegas to New York for 300 and then pay $200 for the big front seat. That's like the spirit first equivalent, basically. And now you're at $500. Sure, you're on Spirit. Granted, it is Airbus, which we all, we all like.
- [93:31]
A
Are we pro Airbus?
- [93:32]
B
I'm pro Airbus. Yeah. So like you're in the Airbus, you're in the big front seat, which is only two seats per row, as opposed to Delta, where you just be randomly sat. You could even be in a middle seat for 450 and you're in a Boeing and you're in a three row seat or a three seat row. So I would say Spirit also by, by every measure imaginable. If you get that big front seat, you're going to be way better off than just buying a random Delta or Jet Blue flight where you could be sat in the middle.
- [94:01]
A
What if it was $600 for first class on Delta, which you do that.
- [94:04]
B
Well, that's just not true. Like Delta Is still, it's like hypothetical. If it was 600 on Delta for first class as opposed to 500 for the spirit. Big front seat.
- [94:14]
A
But you have to fly a Boeing.
- [94:17]
B
I'd probably take the big front seat.
- [94:18]
A
Okay. Right. Yeah. All right. Yeah.
- [94:21]
C
I just look at it like the value of every hour. If it's a few hours, I don't care where I sit. If it's like a six hour flight, having the extra life, legroom is nice. I don't need the first class.
- [94:32]
A
Do you work on flights?
- [94:33]
C
Yeah, I try to, yeah.
- [94:35]
A
And you don't find that there's a meaningful difference between the two in the big front seat? Yeah. Oh, okay. The big front seat on Spirit. So it sounds like I need to be flying big front seat.
- [94:42]
B
Are you, are you flying back to New York right after this?
- [94:44]
A
Yeah, tomorrow. Tomorrow, yeah.
- [94:46]
B
What time? Because there's a flight that goes to New York. It goes to.
- [94:49]
A
But I have a first class ticket on Delta books that sounds, that sounds refundable. I should check now that I, I really don't think it was because than like $700 there's a spirit flight that.
- [94:59]
B
Goes out of here into Newark. Sure, you got to go to New York, but it, it goes to Newark and it's, it's, it's going to be at like 5pm and you'll get there. Or no, sorry.
- [95:09]
A
Is the, is the, is the big front seat always available? Like, is people not.
- [95:13]
C
No, it's not always available.
- [95:14]
B
Oh, trust me, it's a high demand.
- [95:16]
A
It is.
- [95:17]
B
But you could probably be realistic.
- [95:18]
C
You got to be somewhat lucky to get that.
- [95:20]
A
Okay. No, you're right. So my round trip ticket was $1567.96, so just under $800 each way. But that's not that much more expensive, by the way, than what you're talking about.
- [95:32]
B
And you're flying out tomorrow?
- [95:33]
A
Yeah, I'm flying out tomorrow. Yeah.
- [95:35]
C
Well, the thing is you're probably picking different time. Like what we do is we'll get that same thing for like 500 round trip by just picking the times that are the cheapest. And so like if we leave early in the morning, late at night, like, I don't care. I just picked like I can leave whenever.
- [95:49]
A
But it makes you happy to have done that, to have like spent the extra energy thinking about it and saving it or because you like, you feel like you need to.
- [95:58]
C
I would feel like that's a waste. I would, I would look at. Because I'd spend an extra thousand dollars doing that and I Think, what else could I have done with a thousand dollars? And I think of all the things I didn't do, and I think I could have done those things, but it's a thousand.
- [96:13]
A
You don't understand. There's like a. There's a weird cognitive gap here because, like, if. If I offered you, like, a few thousand dollars to do something that you absolutely hate doing, you probably wouldn't do it.
- [96:23]
C
Oh, what is it?
- [96:24]
A
I don't, like, say I wanted you to come give a talk somewhere, and I was like, hey, I'll pay you for an hour of your time. I'll pay you $3,000.
- [96:31]
C
No, I mean, that would. No, that wouldn't be worth it.
- [96:33]
A
Okay, but you'll like, you. You see what I'm saying? Like, you do it in the other direction. Like, you're like, oh, that thousand dollars that I could have spent and had a way better experience and gotten a bunch of work done.
- [96:43]
C
But you're asking me to take now a whole bunch of time and prepare for a speech and, like, do all these. All of that in. It's not just like a, hey, come down the street, show up for an hour, Here's a few thousand dollars.
- [96:54]
A
I would.
- [96:54]
C
I would strongly consider doing that.
- [96:55]
A
You would do that? Like, for $500? Let's say it was, like, around the corner from here, and they just want you to have a conversation with someone for an hour. You do that for 500. I guess what I'm getting at is what is your hourly rate?
- [97:07]
C
You know what? Maybe my answer would be maybe if I'm not doing anything else that's valuable at that time, like, if. If it's me watching TV or doing that, I'd rather do that.
- [97:16]
A
But you could be doing something valuable. You know, it's like there's only so.
- [97:19]
C
Much valuable stuff that I could do in a day before I run out of valuable things.
- [97:22]
A
But it's like it goes to that whole. You know, it's like this weird thing that we do with money where, like, you should just have an hourly rate, and it should just be like, you should apply that hourly rate in your mind to all of these things. We obviously don't do that because we're human, right? Like, my hourly rate now on speaking since the book came out is ridiculous. Like, there's no. There's no business bet that I know of that is better than paid corporate speaking. Like, you know, you can make, like, as a starting point, you can make like $25,000 for an hour. Talk corporate speaking on the back of books is typically how most authors, I would say, end up making their money. Like, the book doesn't make money, but they build a brand name on the back of the book, and then they do, like, this long tail of corporate speaking. But, like, you know, speaking goes from 25,000, it just keeps scaling. Like, David Goggins will get a quarter million dollars or a half million dollars to go give an hour talk. And. And if you apply that and you say, like, well, that's my hourly rate, it feels insane to even say that. And so, like, to me, being new to it, if someone comes and offers me, like, 5,000, I'm like, yeah, I should do that. Like, that feels crazy to not go and do that thing. But if it's actually much lower than what your hourly rate is on, you know, on a market level. And so, like, you have to figure out what your, you know, sort of personal, like, tipping points are on these things. I just think you would probably be unlocked in a lot of ways if you allowed yourself to not think about those things. If you had someone just handle it for you entirely. Do you not think you could be more creative in other work that you do? Maybe, yeah. And that's how you make money.
- [98:56]
C
I. I've had so many expenses come up this last month that I have done my best to apply that thinking because otherwise I ruminate and my. I like. My thinking and anxiety of spending money on things is through the roof. So, like, this last month, I've just. Just paid it well.
- [99:11]
A
I saw a clip of you guys with. What's his name, Jimmy, the comedian. What's the Asian comedian? The clip of you guys. Bobby. Yeah, Bobby. Yeah. But the clip of you guys asking him how much money he has, and he's like, I don't know. I have a money guy that just does all of it for me. And it's like, for him, he doesn't want to think about those things because it just allows him to focus on what he loves doing, which is his creative work, and he's, like, going and doing it. I feel like you would. You. You would. You should try it for a month. You should make a YouTube video.
- [99:40]
B
He said he's. He would do that, like, so many.
- [99:42]
C
Different times, and he's never done. I've been trying to apply it this last.
- [99:44]
B
Trying to.
- [99:45]
A
You should make a YouTube video of, like, I didn't look at money for a month. Here's what happened.
- [99:49]
B
That would be a great video.
- [99:50]
A
It honestly would be kind of interesting. Like, you talk about how you're Stressed about it or whatever. But like I'm going to have someone else do my money for an entire month and see what happens.
- [99:59]
B
That'd be a good video. I like that. He said on many different episodes, like we had Bill Perkins die was zero. We had him on. Graham was like, I'm going to do a month where I just don't think about money and I'll, I'll forgive myself for spending money on anything.
- [100:10]
A
I want to see you do that because you had some crazy things that you said.
- [100:13]
C
I've had crazy expenses.
- [100:14]
A
You said the thing about eating a half eaten steak. I was like, bro, I need to have an intervention with this man. You need to set a dollar threshold below which you don't think about the thing, but think.
- [100:24]
C
But there are so many things that could come up, up under that threshold that now I just like the faucet doesn't matter.
- [100:30]
A
Not there's not gonna be enough of them. They too small of a one or two doesn't matter.
- [100:34]
C
But there could be 20. But there could be 20 poor.
- [100:36]
A
Like you're the number. I totally get it. But there's like a threshold for everyone, right? Like if I, if I'm worth a billion dollars, I can't spend all my time thinking about a thousand dollar things. Sure. Are the thousand dollar things gonna add up to some gross amount that looks like a lot for most people? Yes. But it's not a lot for me because I'm worth a billion dollars. I'm saying hypothetically, I'm not. If you're worth $10 million, there's a different level. But like there's a level where below it, you're spending all of this time focusing on these things. They're creating you stress that stress is negatively impacting your life. You're not, you know, you're not present conversations because you're thinking about it. I've been there. I totally get that. Like when, when I feel tight on things, I'm not like as present with my wife or son or like with work stuff. I'm not as creative. Like it impacts you in every way, but the way you fix it is you're just like below this, like below $1,000, below $500. Not going to think about it. I'll think about everything else. But there's all, there's all this random stuff below 500 bucks that has no impact.
- [101:28]
B
Yeah, he comes to me a lot where he's like, hey, I had this contractor, they said this one thing and it ended up costing a little bit more. Do I try to force it so they, you know, charge the same amount as their original word. Or do I like, you know, let them charge this extra money? And he's coming to me with these problems and it's like the difference is maybe like a thousand, $2,000, which for him is not a life changing amount of money for an average person. Yes, yes, it could absolutely be. And I'll just say, Graham, like, forget about it. It's not a big deal.
- [101:54]
C
Every single.
- [101:55]
B
I don't think there's been one time where I've been like, that's an amount that you should worry about.
- [101:59]
C
Sometimes the principles, like, they want to just like, I get the principle get a little more.
- [102:02]
B
Yeah, but you can live and die by your principles or you can just like be happy. You know, choose one.
- [102:07]
A
I also just think like in a relationship, one of the most important things is that you're aligned on this stuff. Like my wife and I have had to have conversations about this, this where she would come and ask me like, oh, can I do this thing at the house? And it would be like 500 or a thousand dollars. And I was like, yeah, yes. Like I. And so we just set a number where I was like, below this. Just you do it like you're the CEO of this household. Go and do the thing. And if, if it's above that, we can have a conversation about it. But like it was causing me more stress to have to even just pat, like the, the just attention disruptor. The like having to think about this thing rather than just like handle it if it's below this number. And it's, you know, we do this at companies, right? Like if you're on the board of a company, you set like there's a delegation of authority. Like the CEO and the CFO can make decisions up to a certain amount of money. This is a common thing in private equity. Like the CEO and CFO that you hire or bring in knows the decisions that they are allowed to make. Like they can make decisions up to $10 million, you know, annual thing, and above that they should go and ask the board. And like having that for yourself in your own life will just provide you a lot of comfort.
- [103:13]
C
What are the economics behind writing a book?
- [103:16]
A
Traditional publishing is different. Right. There's kind of like two different sides to this world. There's traditional publishing and then there's self publishing, Self publishing. You know, the economics on a per book basis are going to be better because you're not having to pay this whole like, you know, cost stack that exists within these publishers. But the downside is you don't have the distribution necessary to hit like the New York Times bestseller list. You can't really self publish a book and be New York Times bestseller. Really?
- [103:43]
C
I thought it's just an amount of books that you have to sell within a certain amount of time.
- [103:47]
A
No, because you have to have certain amount of distribution. The New York Times list in particular is not just based on the number of sales. It's, it's subjective. So it's also based on being in enough independent bookstores. You have to be in all these distribution points, which you can't do if you self published it. So like, you know, Alex Haro sold tons of copies of all of his different books. Not New York Times bestselling book. Actually the best example is Morgan Housel with Psychology of Money has sold 10 million plus copies of that book. It's one of the best selling books of all time and wasn't a New York Times bestseller. It makes no sense. By all definitions it is, but it was published with an independent publisher. He didn't self publish it. It was independent publisher, but it didn't make the list. So self publishing is a little bit different. Traditional publishing. The way the model works economically is they pay you in advance to buy the rights to your book. That is an advance against royalties. So they're paying you upfront a certain amount of money. Money. So like, you know, my first book, I got, you know, a couple million bucks to go and write this book. And you get that paid out over four equal installments. You know, like one up front when you sign the contract, one when you turn in the draft, one when the book gets published, and one 12 months after the book gets published. So let's say for $2,000,000, 500,000 at each of those increments. And then you go and write the book, you publish it and it was an advance against royalties. So like that is your downside. If I sell zero copies of the book, I get that $2 million. And once I pay it back via the royalties from sales of the book, then I start earning royalties above that number.
- [105:22]
C
What if the book doesn't sell? You get 2 million bucks, you publish it and just no one buys it. Do you keep the money? You keep the. So that's their risk. You don't owe it back.
- [105:31]
A
They are a venture fund. Effectively they're going investing in different authors. And a couple of those end up being the atomic habits that sells million or Psychology of Money sells millions and millions of copies. Most of them Never earn back in the advance. And they're fine with that because they're making tons of money on the ones that did. It's like it's all power law driven in that way. Yeah. How much.
- [105:52]
C
How much have you made from the book so far?
- [105:54]
A
I think we've sold to date, 400,000 copies around the world. Yeah. So it's done really well. I will. I will earn past the advance. Ideally, I'll earn past the advance in the first year because there's, like, bonuses and certain things if you do it fast. But I probably, like. I don't know. Globally, I've probably made close to To. It's a little different globally. So I probably made close to like a million and a half in royalties, and I need to get to 2 million. Above that. I would just be getting a, you know, a quarterly check. Wow. Yeah, that. And that's been a great outcome. Like, it's very good. The bigger thing, again with books is, like, the real economics for most people off of a book are on these side businesses, like, speaking or, like, you know, courses, mastermind. Like, other things people do that are sort of around the book versus the book itself.
- [106:41]
C
So why books, though? Because I always looked at a book and I think thought, why would I do a book when I could just make a YouTube video? And more people are watching YouTube videos than reading a book.
- [106:51]
A
Yeah, but does anyone gift a YouTube video to their kid on their graduation?
- [106:57]
C
Like, does anyone make this a thing? Like, no.
- [106:59]
A
Does anyone, like, you know, does anyone, you know, come back to it and say that, like, you know, they, like, give it to their grandchildren or, like, give it to their partner and, like, sit down.
- [107:09]
C
But maybe the new version of that is, like, they shared the video, I don't think.
- [107:12]
A
Yeah, but it's not permanent, is my point. Point. Like, I. You could argue that YouTube is the most permanent of all of the mediums because there are videos from several years ago that people will go back to. But there's something very permanent about a book that, like, you know, the best books I've ever read, like, I reread once a year. I gift them to people all the time. You know, they, like, sit there in a physical form. And so there is something that is just sticky about books as a medium for me, personally. Why books? I love writing. Like, writing is my favorite thing to do. Everything else that I do is just a natural byproduct of the writing that I do.
- [107:48]
C
So.
- [107:48]
A
But when I signed a second book deal, like, I. Two weeks after I published this, I Signed the second book deal because I.
- [107:53]
C
Was like, why go through a publisher to get the New York Times best? Why is that so important? Because I was talking to someone else who published a book and they went through a publisher and they said I'm never doing that again. Because I would have made tens of millions of dollars doing this again on my own. Now my next book I'm doing on my own and I'm going to make about 10 million bucks from that.
- [108:12]
A
Do you have an Indian mother?
- [108:14]
B
This person does not have an Indian mother.
- [108:16]
C
They don't.
- [108:17]
A
And you don't have an Indian mother either. I do not. Indian mother doing half joking, half serious, like doing it. The name brand, like kind of like credible, high reputation way for the first one especially really mattered to me. So there was definitely the title. Yeah.
- [108:33]
C
There was a doctor PhD.
- [108:35]
A
Okay. I think people are lying if they, they say that those things don't matter too. Like everyone's like well I don't care, I just want to make the money. And you're like, well you are taken seriously by basically everyone that is like of a certain level when you have a title like that. And I can just say definitively, people say like, oh, your life doesn't change from hitting these lists versus not my life has definitively changed. And that's mainly because people that I respect and admire, like these high, like, you know, high caliber business people, entrepreneurs, CEOs, like all these people that I want to, to get to know immediately have like a level of openness to, to spending time and talking to me because I'm like, I, I have this stamp in a certain way.
- [109:18]
C
How much do you think it is valued to be a New York Times bestseller? If you were to put a price tag and say like what would you.
- [109:25]
A
Have to buy it from me for?
- [109:26]
C
No, like in that would be the.
- [109:28]
A
Way to price it.
- [109:28]
C
Here's.
- [109:29]
B
Yeah, like to take it, to take.
- [109:30]
A
It away from me. How much money would you have to pay me?
- [109:32]
C
Or in the other way, I can.
- [109:33]
A
Never do it again.
- [109:33]
C
Here's how much money I'm giving up for the title of being a New York Times Times bestseller.
- [109:38]
A
To me Personally, it's worth eight figures. It's worth 10 million plus dollars. You. You would have to pay me. Yeah, you'd have to pay me $10 million probably to, to give it up and like, and to say that I was never allowed to have it just because like if, if I actually just think about the res. Like the long term residual value of even just the speaking business on the back of having that, it is meaningfully higher than if I didn't have that.
- [110:03]
B
Are a lot of people just paying the New York Times to. To get that title? I imagine that to, like, the Spotify top charts for podcasts. Like, we're not on that. And I know for a fact, like, I look at those top charts, I'm like, I've never heard of any of these people. Not a single crazy.
- [110:20]
C
I was thinking the same thing. I'm like, and so how. How. There's no way.
- [110:23]
B
And so, you know, a lot of that is for, like, paid media, because you have to be in Forbes magazine, you have to be in this, you have to be in that, and then finally you get the, you know, top chart. So do a lot of people pay for that?
- [110:33]
A
There was a big, big. There was a big, like, sort of discourse around this being a big thing with the New York Times that you could just buy your way onto it and continue. People continue to say it. If you go look it up, people will say, like, oh, you can spend $100,000 and just be on the New York Times bestseller list. As far as I saw it, it's not really true. And the reason it's not really true anymore is because the New York Times cracked down on billionaires just buying their way onto the list. And the way people used to do it is they would go buy 10,000 copies of their own book. Like, you just go buy 10,000 copies now. They don't count multiple purchases. So, like, if someone goes and buys a thousand books, that's counted as one on the New York Times list. So if, like, a single address buys 10,000 copies, it starts to raise a red flag. The way that they claim they crack down on it now is they use social listening. So, like, if you sold week one of your launch, when you're trying to hit the New York Times list, if you sold 50,000 copies, if that's the number that it says on BookScan, like, which tracks sales, but there's only, like, five addresses, 10 addresses that. That went to. It's a pretty clear red flag. The other red flag is no one on the Internet is talking about it. So that you have social listening where they're like, it should roughly equate to the number of books that are being sold, the amount of buzz that's about this book. And if it doesn't, again, it's like, oh, this person is doing something. So there's been several cases where, like, people got blackballed from hitting the list where, like, they were doing something Is it totally impossible nowadays? Probably not. There's always like back doors or side doors into all of these things where people are still managing to do it. A lot of people will do like, they'll do speaking gigs. So if I'm like a billionaire business person, someone will pay me $250,000 to give an hour talk. I could say to that company like, hey, instead of $250,000, buy 10,000 copies of my book and mail it out to all of your customers. People will go and do that. And there are ways to have those sales still count towards the list. And so like, that is effectively buying it because you traded $250,000 of income for that.
- [112:39]
B
Just a few rapid fire questions before we end the podcast, if you don't mind. How could Jack get a girlfriend Working for free? Underrated or overrated?
- [112:49]
A
Overrated.
- [112:51]
B
Working for free is overrated.
- [112:53]
A
What do you mean? Like, should you work for free?
- [112:56]
C
Yeah, just like go and volunteer. Like, hey, I'm gonna.
- [112:59]
A
No, no, I don't think you should work for free. I think people should pay you for the value that you're creating. Like, if someone came and did a bunch of work for me, I would pay them for that work. Whether or not if you didn't need the work.
- [113:08]
C
And they just say, hey, I want to do something.
- [113:09]
A
Like, they're trying to pitch me to work in the future. Yeah, yeah. Oh, like to, you know, prospect. But that's just like you're prospecting, you're trying to go. That's like a cold, A good cold email.
- [113:17]
B
Well, I think that's kind of what it's implied for, like working for free.
- [113:19]
A
Oh, you should do work upfront. If you're trying to sell someone on getting to work with them, you should do some research and work upfront to go and land that. But once you're working for them, people should pay you for the work that you're doing.
- [113:30]
B
Index funds are individual stocks.
- [113:31]
A
Index funds.
- [113:33]
B
What's a luxury purchase you'll never regret?
- [113:36]
C
O. I'm going to say first class for you.
- [113:39]
A
You consider that a luxury? I don't even consider that a luxury. Okay, different level. First class. Yeah, first class.
- [113:44]
C
Different levels.
- [113:45]
A
First class on Emirates. First class on Emirates is my actual one. I, I like that is way too expensive. It's like $20,000 for a round trip or something. But it's. I will never regret that. It's amazing.
- [113:54]
B
Buy or rent in 2026.
- [113:56]
A
Rent one money trap. Most people fall into thinking that money is going to be the end all. Be all of your happiness in life.
- [114:06]
B
The dumbest thing rich people spend their.
- [114:08]
A
Money on trying to impress other rich people.
- [114:11]
B
Is having multiple income streams overrated or necessary?
- [114:17]
A
Necessary to feel comfortable at night.
- [114:20]
B
Is college still worth the price tag?
- [114:23]
A
No. Unless you're going to one of like five schools.
- [114:28]
B
Are credit card points actually worth paying mine to?
- [114:32]
A
Yeah, in the early days. And then you should stop.
- [114:35]
B
Do you believe in how having a budget?
- [114:37]
A
Yes.
- [114:38]
B
Do you keep a strict monthly spending limit?
- [114:41]
A
Yes, at my business. No, at my house. At this point.
- [114:45]
B
Is chasing passive income overrated?
- [114:48]
A
Yes. Passive income does not exist.
- [114:51]
B
What's the minimum income someone should aim for to be free?
- [114:55]
A
$500,000 a year.
- [114:57]
B
How did you get arrive to that number?
- [114:59]
A
I don't think my life has meaningfully improved post $500,000 a year. I thought like once I got to 500, I could basically do whatever I want whenever I want and travel and have cool dinners and experiences with my friends. And like, beyond that, it's just, I don't know, there's nothing. My life hasn't changed from any money beyond that.
- [115:17]
B
So that means you're probably spending, let's say 200,000 and then you're saving 300,000.
- [115:24]
A
Well, no, not factoring.
- [115:26]
B
Oh, sure, yeah.
- [115:28]
A
No, at $500,000 a year, I think in most places in the country, you know, you live in a nice place, you can afford to travel, you can afford to eat out, you can afford to spend time with your friends, see your family, take care of your health. You can do all the things that actually drive happiness. And then anything above that is like, you know, it starts to be luxury stuff, which I don't think has moved the needle that much in my happiness.
- [115:50]
B
Thank you so much for coming on the iced coffee hour. Really appreciate it.
- [115:54]
C
Yeah, we'll link to your book, by the way, down below in the description.
- [115:57]
B
That will be linked down below in the description. Also, you should ride Spirit first class. I'm just saying you got get to get that big seat.
- [116:02]
A
Big seat.
- [116:03]
B
And by the way, for those of you guys listening, as always, thank you so much. We wouldn't be able to do this if not for you guys. Shout out to Gavin. He helped sit behind listen to this entire podcast episode. So if there is crackling with the mics, it's not our fault, it's his.
- [116:17]
C
Also, big thank you to the members who subscribe to our membership and Mikey who's editing this episode. So just comment. Thanks, Mikey. If you made it to this point, he'll really appreciate it.
- [116:28]
B
Thanks guys.
- [116:28]
A
Thank you. Until next time. See you.
- [116:38]
B
Martha listens to her favorite band all the time.
- [116:41]
A
In the car, gym, even sleeping.
- [116:46]
B
So when they finally went on tour, Martha bundled her flight and hotel on.
- [116:50]
A
Expedia to see them live. She saved so much, she got her seat close enough to actually see and hear them. Sort of. You were made to scream from the front row. We were made to quietly save you. More Expedia made to travel.
- [117:04]
B
Savings vary and subject to availability. Flight inclusive packages are atoll protected.