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The Investor's Podcast (We Study Billionaires) - The Investor’s Podcast Network
TIP787: The 5 Types Of Wealth w/ Kyle Grieve
01:07:42
Kyle discusses a refreshingly different take on wealth inspired by The Five Types of Wealth by Sahil Bloom.
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You're listening to Tip.
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The traditional way of measuring wealth is simply wrong. Most people think wealth is directly correlated with things such as how much money you have in your bank account or how many assets you own. But I actually want to challenge you to rethink those assumptions. Real wealth can be achieved by pretty much anybody, no matter what you own or how many assets you have. The book the Five Types of Wealth helped me better understand that wealth can be accumulated in many, many different ways. The problem with how people view wealth today is that you can be a massive success in something such as business, while simultaneously being a massive failure in family, friendships, and the mental and physical aspects of life. And even if you do accumulate financial wealth, you can still be basically poor if you spend more money than you make. In this episode, we'll take a closer look at the five types of wealth, why they're so important, and the tools that you can utilize immediately to help analyze and overcome obstacles to building real wealth. You'll gain a much more accurate view of what wealth actually is by reflecting on some of the gifts that you already have outside of money. And I guarantee you that you're wealthier than you think from a practical standpoint. You'll learn how to use the Japanese principle of ikigai to find purpose in both your professional and personal life. You'll discover what Dwight D. Eisenhower figured out about productivity that allowed him to achieve an almost otherworldly output, and how you can apply that exact same framework. You'll also learn how to analyze your time and relationships to determine which people and activities deserve just more of your attention and which ones need to be removed entirely. Now let's get right into this week's episode on the five types of wealth.
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Since 2014 and through more than 190 million downloads, we break down the principles of value investing and sit down with some of the world's best asset managers. We uncover potential opportunities in the market and explore the intersection between money, happiness, and the part of living a good life. This show is not investment advice. It's intended for informational and entertainment purposes only. All opinions expressed by hosts and guests are solely their own, and they may have investments in the securities discussed. Now for your host, Kyle Grieve.
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Welcome to the Investors Podcast. I'm your host, Kyle Grieve, and today we'll be discussing a book on wealth that I found very highly impactful. It's pretty rare for me to discuss wealth accumulation because I simply think that most books on that subject are just pretty commoditized. You read, you know 5 to 10, and they just recycle the exact same things. But the book the Five Types of Wealth by Sahil Bloom was refreshingly different because it's not a book that focuses only on the monetary side of wealth. Instead, it focuses more on the holistic side of wealth. So the book is just not a blueprint that one can purely use to make more money. Instead, I think it's more of kind of a compendium of ideas that anyone can integrate into their own systems to enrich their lives and make it more meaningful and fulfilling. To understand the book at a high level, let's look at what exactly the five types of wealth are. So the first one is time wealth. This is the freedom to choose how you spend your time, who you spend it with, where to spend it, and whether you want to trade it for something else. Second is social wealth, which is the connections that you have in terms of depth and breadth in your personal and professional worlds. Third is mental wealth, which are the connection to things like purpose, meaning and fulfillment that can help steer your short term and long term decision making. Fourth is physical wealth, which is the focus on controllable actions that can help optimize your health, fitness and vitality. And lastly, here's financial wealth, which is just the ability to keep your liabilities below your assets and to build financial wealth with that difference. Now, I like here how Sahel put financial wealth in last place. And I believe he did this very intentionally so. He mentions in the book that the classic style of defining wealth was simply by measuring just how many zeros you have at the end of your bank account. Now, the problem with this is that it means you can't be wealthy until you reach a specific level of financial wealth. My father is one of the happiest people that I know. He was an immigrant from Myanmar and is very intelligent and mindful and never really made making money a large priority in his life. He's always lived beneath his means. He finds joy and happiness and simple and free things, and he's very healthy to boot. He's now retired and most of his days are spent doing exercise, meditating and cooking. He lives in a great neighborhood by the beach and he knows so many people in his community simply because he's just out there walking around every day and talking to people. So my dad has done a really exceptional job at finding wealth without placing a very large emphasis on the financial parts of things when it comes to mindfulness. My father also grew up for many years as a Buddhist monk, so he understands a lot of that as he was trained in it at a relatively young age. Now, the point that Bloom was making here was that wealth isn't really something that needs to be thought up as some sort of destination that you will someday achieve. Wealth can be built as part of the journey of life. Now, the book goes over many different ways to score your wealth in each of the five areas. By going through a list of different questions, you give your answers, get a numerical score, add them up, and you see what you get out of 100. This helps you identify where you might have areas that you can improve on the most. He has an online quiz that you can take to identify where you're weak, and I'll put the link to that quiz in the show notes. So when I took the quiz, I identified physical wealth as my focus area, as it was a type of wealth that I scored the lowest on. Now, this is a very interesting subject to me because I've always actually placed a very large amount of importance on my physical wealth, especially in my 20s and earlier 30s. But over the years, I know I've probably let that slide. And I know that I need to make it a higher priority going forward because I know I feel the best when I'm eating right and exercising regularly. Now, before we jump into breaking down how you can examine the five types of wealth, you have to ask yourself a pretty basic key question, and that is to just complete the sentence. I am the type of person who blank. Now, in the Book of Joy by the Dalai Lama and Desmond Tutu, there's a great passage. In order to develop our mind, we must look at a deeper level. Everyone seeks happiness, joyfulness, but from outside, from more money, from power, from big car, from big house. Most people never pay attention to the ultimate source of a happy life, which is inside, not outside. So asking the question above helps you determine the type of person that you want to be, the types of characteristics and attributes that you want to embody, and the ones that you also want to completely avoid at all costs. Buffett has said, if you get to my age and nobody thinks well of you, I don't care how big your bank account is, your life is a disaster. So answer that question and make sure that inside you are living the life that you want. If there are things that are in conflict with what you need to be doing, you have to address them or they're just going to continue to fester and they only get worse as time goes on. So Seneca wrote, there is no favorable wind for the sailor who doesn't know where to go. This was Saheel's way of making sure that if you choose to build your five types of wealth, you need to better understand where you are today and where you want to be in the future. Answering the question above will help you determine where you want to go and the path that you need to take in order to get there. He utilizes two thinking tools to accomplish that goals and anti goals. So goals here, you know, pretty self explanatory. These are just the things that we want to achieve on life's journey. These might be big long term goals such as owning a house or being financially independent, but all long term goals require short term goals in order to actually get there. So I recently celebrated a short term goal with my co host Clay Fink regarding the TIP Mastermind community and how he hit a goal that we had in annual recurring revenue. But our primary goal is actually to double that number. And while I'm very excited that we're halfway there, I'm just focused on the next level up towards that ultimate goal. So it was the same thing when I was competing in powerlifting. So my goal was always to get to a 700 pound deadlift and I eventually got there in competition, but it took a very long time. And instead of beating myself up for failing to get that 700, I just really put all my focus on incremental progress and improvement. Setting those smaller goals was just integral in eventually reaching that long term goal that I had. Now anti goals was the area that I found most interesting out of the two. So as you know, I'm a huge fan of Charlie Munger's mental model of inversion that he cloned from eminent German mathematician Carl Jacoby. Well, we have goals for our eventual destination. We also have to be mindful the landmines that are on that journey that can completely derail our ability to reach those long term goals. For instance, Charlie knew that he wanted to live a long life, so he once said, all I want to know is where I'm going to die, so I'll never go there. If you know what could happen to make sure your goal never happens, isn't that probably a very important part of reaching your destination? But Sahil Bloom takes it one step further. There are goals that we might want to achieve, but what's the point in getting to that goal if you step on the toes of everyone in your life who you love and gives you joy and happiness? So just like the Buffett quote that I mentioned above, here you don't want to be the person in their 90s who has no friends or family who actually like them. So while you should make goals to achieve, you also need to make anti goals along the way, both to avoid the landmines and to ensure that you aren't neglecting other areas of your life that you just can't afford to skip. So there are three questions to ask for your ante goals. Number one, what are the worst possible outcomes that could result from your pursuit of these goals? Number two, what could lead to the worst possible outcomes occurring? And number three, what would you view as a pyric victory? Winning the battle but losing the war? One of my largest goals is to achieve financial independence. This is clearly not a goal that will be achieved overnight as it requires many years of compounding and saving to reach. So if I break that goal into smaller pieces, for me it might look like this. The first one is to continue compounding my capital and maintain my kegger of over 15%. I'm getting better than that. But my goal is basically just to double my money every five years. The second is to save a portion of my salary and contribute that to my wealth while lowering my tax burden. And third is to continue spending money on things that make my family and myself happy while also building my wealth simultaneously. So the anti goals that I have are firstly, just lifestyle creep, you know, not allowing myself to incrementally spend more and more money, which can obviously just kind of apply these financial shackles if my spending eventually exceeds my income. Second is to make sure that I'm not neglecting other expenses in my life that are very important for my family just for the sake of saving. And third is just using leverage to reach my goals faster, which can also coincidentally make it so that I just never actually reach my goal. So you can run these goals and any goals on multiple areas of your life. And if nothing else, they really just help align you with your goals and identify areas that you have to flag to make sure that you achieve your goals in a joyful way that doesn't destroy relationships along the way. Now we get to the first type of wealth that I want to discuss. Time wealth. Now, the origins for this type of wealth came to Sahil when he was speaking with a friend about how often he visited his parents. So he was absolutely shocked to learn that given his parents age, he would only see them a handful more times. This helped him and his wife get up and just move closer to his parents, so he knew that number would increase, which he very, very highly valued. Sahil goes over a Tragic story where a mom lost her son in a motorcycle accident at the young age of just 20 years old. The big lesson that she imparts to Sahil, always remember everyone we love. They are on alone to us for a short period of time. They are just gone in the blink of an eye now. The book then displays six fascinating graphs regarding time. These graphs are from the American Time Use Survey, which is a national survey that's conducted annually. So basically what it came down to is these different graphs of different amounts of time that you spend with people. So the first one here is time that you're spending with family. So as you could probably guess, this kind of peaks in childhood when you're always around family. Then it declines precipitously as you reach 20, then levels off for the remainder of your life. Number two is time spent with children. So for me, now I'm 39 years old, I'm very focused on spending time with my son. So he's 3 years old, and I know that I'm probably just going to be the center of his universe for maybe just another seven more years and then that's about it. So I keep that top of mind whenever he wants my attention. And I'm maybe focused elsewhere. I was actually quite emotional when I was just writing this as the time that I spent with my son are some of the most cherished memories that I've ever made. And I know it's a fleeting kind of moment because there'll come a time where those memories, they'll continue to be made, but they'll be different. I also think back a lot about my beautiful and loving dog, Hades, who I had to put down this year, and how much those small moments that we shared together over his lifespan meant so much to me. Third is time spent with friends. So this time peaks around 18, then declines to a baseline as you get into your late 30s. I know with my friends I try to make it a priority to see them on a pretty regular basis as you get older. And obviously family becomes more and more central. It's very easy, I think, to have people deprioritize friendships, but I think it's not an area that can be neglected. Yes, to kind of balance, you know, this time that you spend with your friends who create a lot of value for you, while also avoiding the ones who SAP energy from your relationships. Fourth is time spent with your partner. This chart was absolutely beautiful. For me, it basically just trends up until you die, meaning your partner needs to be someone that you want to spend nearly as much Time as humanly possible with and hopefully they feel the exact same way about you. It's also important to choose the right person as they will directly affect your happiness and fulfillment in life. Fifth is time spent with coworkers. This obviously is low when you're not working, trends up in your working years, then decreases as you age and drops off a cliff of course into your mid-60s when you approach retirement age. Last one here is just time spent alone. This was one of the more kind of depressing charts, I think. So it looks like the long term chart of Berkshire Hathaway up into the right. So as we age we spend more and more time alone. While I actually like having some time alone, I like it because it's completely in my control. If I was alone and I did not want to be alone, well, I know that would greatly affect my levels of happiness in a very negative way. The discussion on control here is a very good segue into the three pillars of time, which are awareness, attention and control. Awareness is understanding the impermanent nature of time. Attention is simply your ability to focus on the things that matter while ignoring the rest. And control is just the freedom to use your time however you want. Now the book goes into systems for building time wealth. Each type of wealth goes into these different types of systems and they're all good, but some of them are going to resonate more deeply than others. So I'm going to go over only the ones that resonate most with me in my own season of life. So the first tool that really resonated with me was one that Sahil created which was inspired by Warren Buffett. Now I remember reading the Buffett story that he discussed in the book. The gist of it was that Buffett told his personal pilot about this kind of three step process to clarify personal and professional goals. So here's how it works. First, you simply write down your career goals. Buffett mentioned writing, you know, 25, but it can really be any number. Now what you do is you circle the top five goals from that list on another sheet of paper. You put the five on one side and the rest on the other side. Next you ignore the rest as they're. Now you're avoid at all cost lists as they serve to just be a drag on getting to your primary goals. And then fourth here is just focus on the top five so you can do this for both your professional and personal life. The next one I really liked was the Eisenhower Matrix. This one's quite simple. So there's four areas on the matrix there's important, urgent, not important, and not urgent. This matrix was attributed to Dwight Eisenhower's incredible productivity. So important and urgent tasks are ones that obviously just need to be done right now. Then you have important and not urgent. These are tasks that require attention and create very, very high returns. As long as you don't procrastinate on them. This is the area that you should probably spend most of your time with. Next is not important and urgent. Sahil says that these are in the kind of beware category. This is because they drain time away from those important tasks. If you can, you want to try to delegate these to free up time for the more important tasks. Lastly are the not important and not urgent. These are complete time wasters and don't even need to be delegated. They can just be completely deleted. Part of why I like this so much was that I'd actually seen it before. But where was it? I racked my brain and then I thought of Stig mentioning it somewhere. Then a light bulb went off. It's actually inside tip's handbook. I looked it up to verify and there it was, number one under core values. It's been very helpful in showing me where I should spend most of my time. For tip, that's in doing things like reading, writing and listening to people involved in the investing industry. Generally, my podcast episodes take precedence over pretty much everything else, but I try to focus on what is important rather than what is urgent, which gives me flexibility to avoid being rushed and spend more time on, you know, the communities that we've created. So the last thing I found interesting was the art of no. So I think the amount of yeses and no's that you say are inversely proportional as you age, when you're young and you have little responsibility. Therefore, if, let's say a friend asks if you want to go hang out, there's probably a very, very good chance you're just going to say yes. But as you age, you get more responsibilities. A family, a career. You just kind of have to say no much more often, otherwise you risk some very severe time management issues. Now, Sahil has a system for personal life and professional life. For your personal life, if someone asks you to do something, simply ask, would I do this right now? And if the answer is yes, do it. And if the answer is no, then just say no. For work tasks, he makes a few changes. So if it's something that will further your career, then you can obviously say yes. But you also have to ask yourself, would you do this if you knew that it's going to take twice as long and be half as rewarding. And if the answer is still yes, then proceed and do it. If the answer is no, skip it. So this is a great tool. As a podcast host, I'm somewhat well known in some very, very small circles of the investing world, so I do actually get asked by many of the listeners to meet up or have calls. Now. While it would be amazing to take all these calls and meet more of you and develop some of these deeper relationships, I just unfortunately simply don't have the time in the day to do so. So if I politely decline, it's because I just have other areas of my life that I have to prioritize to continue improving and reaching my own goals. The next type of wealth I'd like to discuss is social wealth. I mentioned that Sahil moved closer to his parents once he realized that he didn't have nearly as much visits with them as he was comfortable with. This is a form of social wealth. Now I like his contrarian take on social wealth. He writes, conventional wisdom says that one should focus on the journey, not the destination. I disagree. Focus on the people. When you surround yourself with inspiring people, the journey becomes more beautiful and the destination more brilliant. He calls this finding your front row people. And it's a crucial group to prioritize as these are the types of people you want sitting in the front row of your funeral or being close to you all the way to the end of your life. Lets rewind to 1938, a time when two completely unrelated teams of researchers based out of Boston decided to track the lives of young men. But they wouldn't just track them for a year, then aggregate the data and reach some form of conclusion. They were both long term studies that actually lasted multiple decades. Each research team studied young men, but after that there were just quite a few differences between each group. So the first group was led by a Harvard physician named arlie Bachelor. Now Dr. Bach wanted to focus on attributes of the normal and successful. He wanted to learn more about obtaining a blueprint from happiness, health and success. His study included 268 Harvard College undergraduates who were all males. If you were able to attend Harvard, chances are that you probably came from a pretty well off family and would also become pretty well off yourself. Now the second group was quite different. It was led by a husband and wife duo named Sheldon and Eleanor Glueik. They both studied juvenile delinquency and criminal behavior. The Gluecks focused on about 456 boys from some of Boston's most troubled families and neighborhoods to find connections that just caused their delinquent behavior. Now, each of these studies lasted for over 30 years. Then they were unified in 1972 by another Harvard graduate named George Violent. The craziest part about this study is that it's actually still running today over 85 years later. So the study tracked the original 724 participants and add an additional 1300 of their male and female descendants. Let's take a quick break and hear from today's sponsors.
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All right, back to the show now. The crucial conclusion of the study was simple. Relationships are everything. Dr. Valen didn't hold back words when discussing his findings. The key to healthy aging is relationships, relationships, relationships. Healthy relationships were the best predictor of life satisfaction, outpacing other areas you may intuitively think might be more powerful, such as social class, wealth, fame, innate intelligence and genetics. Even more importantly, healthy relationships had a direct positive impact on physical health, the study's current director said in a TED talk. The people who are most satisfied in their relationships at 50 were also the healthiest at 80. Now, as you might expect, loneliness was found to be much, much worse for one's health. The single characteristic was more impactful than traditional health issues such as the use of alcohol or tobacco. Another great point that the book makes regards Covid and how many people had to kind of quit their jobs to find something new and on top of that, move somewhere else. And apparently that just hasn't worked out very well long term. A 2021 survey found that about a third of Americans who moved actually regretted the decision, with the most common regret being leaving family and friends. Now, this is a fascinating subject that hits very close to home for me. I value family and friends very highly. I have a very close relationship with my mom. I speak to her almost daily, and I go to visit her about two hours away from where I live pretty much every month. But Vancouver is a very expensive place to live. My wife and I both want to stay because her parents and her sister, who she's just as close to as I am to my mom, live here. So we have this constant struggle to optimize where we want to live while also understanding the sacrifices that we'd have to make just to save money by moving somewhere else that might be a little or a lot further away. When I reflect on this, I realize that I'm not sure there's enough money that I could save that would make me want to move away from my family. If I move from Vancouver to somewhere, you know, in eastern Canada, I might save on some expenses. But how much would that really be? Maybe, you know, 20, $30,000. But saving that money to erode my relationships with my family and friends just doesn't really seem to be a good decision at this point in my life. The next point Sahil makes regards what he calls the magic years. I kind of already mentioned this, that for the first 10 years of your child's life, you are their favorite person. After those 10 years are up, you're just no longer that person. And unfortunately, it's pretty universal. So making sure that you're present during that time is of utmost importance. But there's another area of importance that I've been spending a lot of time thinking about lately, and that is on the habits and characteristics that my son observes in how I act. My son sees everything. It's quite astonishing at times. And if I act in a way that he shouldn't, he picks up on that very, very quickly. Sahil understood this too. So in the book, he mentions that, yes, being present and spending time with your loved ones is very important. But just as important is for your loved ones to observe the love that you put into things like your work and the values that you place high up in your pecking order. So Charlie Munger once said, the safest way to get what you want is to deserve what you want. If you want to be a good role model, you must display the characteristics and habits that embody one. And you need to try to remember that in Highly emotional times, you're likely to veer off that path. I think about this all the time and it really helps me just focus on becoming and maintaining my ability to become a better person. Now, I like this emphasis on both being present in the time that you spend with loved ones and respecting the fact that they will observe your work ethic and values. There's a fine line that we have to walk between the two to make sure that neither gets too far out of alignment. It's not realistic to spend 100% of the time with the people that we love the most simply because the reality is that most people need to work. So some time of your day has to be spent working. So work and focus time need to be treated fairly and given the right amounts of time and balance. So how much time is that? It really depends. There may be times when you have to prioritize one over the other, but just don't make it permanent. Now let's look at Sahil's framework upon which social wealth is built. So there's three here. Depth, breadth, and earned status. So depth is connection to a small number of people with very deep and meaningful bonds. Breadth is connection to a larger circle of people that offer support and belonging beyond yourself. This can be individual relationships, community, religious, spiritual or cultural infrastructure. And earned status is simply status that we can't buy but has to be earned. It includes things like respect, admiration, trust of your peers, which unfortunately it's built over time. You can't just buy it. Now, depth is really built through honesty, support and shared experience. Depth is really hard to engineer over a short period of time. It's built through relationships that can endure things like, you know, struggles, pains and tension. But as you endure those things and showcase those three attributes, a certain depth is created in your relationships with a few people that can become very, very powerful. Now the cool part about depth is that it can happen with different people at different times throughout your life. So Hill makes a point that you'll probably have a deep, loving and supportive relationship with someone that you haven't even met yet. Now, breadth is definitely more about community. The relationship might not be quite as deep, but they're just as meaningful. These relationships help spawn new, deeper relationships with like minded individuals. Now, without having breadth in your social wealth, it'll be very hard to establish these kind of new connections. And while you don't necessarily have to make new connections to replace your existing ones, I think it's always good to have exposure to new and exciting relationships that you never thought could exist. The final part of the equation is earned status, and I loved this part of the book. The reason is that when most people think of status, they tend to think of it as what somebody has. Do they live in a nice neighborhood? Do they drive a nice car? Do they go on beautiful vacations? Do they wear nice clothes? But earned status confers none of this. Status is defined as the standing or positioning of one person in relation to another person or group. And status, while generally seen in a negative light, is actually completely logical, especially from an evolutionary standpoint. Having status back, you know, 10,000 or even a hundred thousand years ago meant that we had better security and resources for ourselves and our children. And isn't that what we're still looking for today? The problem with status today is what I've kind of briefly touched on already. Status today is frowned upon because we often display status by showing off what we have in an external way. Our Stone Age forefathers displayed it with things like physical prowess or size. The durable status that we can all create, no matter if you have $0 or a billion dollars in your bank account, is a durable and lasting kind of the status that consists of trust, respect, and admiration of your peers, and thus cannot be bought. The other problem with modern status is that the pursuit of it often ruins people. Sure, you may have a pile of money to fall back on, but if you destroy every relationship that you've had in the pursuit of that status, it's really just a pirate victory. Earned status has a number of incredible freedom of your time, healthy and loving family and friend relationships, purpose and mastery in your profession or hobbies compounded wisdom accumulated through a lifetime of education and experiences, an adaptable mind, and a strong and fit physique. Focus on building earned status and you'll live a much more meaningful life. Sure, there's going to be times where maybe you splurge and treat yourself, but just make sure you don't become a slave to those whims. Now I want to go over some of the more impactful tools for building social wealth that were outlined in this book. One big theme I noticed in these tools was to ensure that your focus on cultivating the right relationship. Some relationships are just not worth pursuing simply because they're asymmetrical. You should be providing the other with as much value as possible, and in return, you should also be receiving value. If you're in a toxic relationship, you provide value, while the other side provides pretty much nothing and often saps you of your time and energy. So the first tool I really Liked was called the relationship map. You start off by listing your core relationships. Then you assess them by asking if the relationship is supportive, ambivalent, or demeaning, as well as asking if the relationship interactions are frequent or infrequent. A quick side note here. Most people intuitively believe that demeaning relationships are the most destructive. I know I thought this way before reading this, but it turns out that ambivalent relationships actually are even worse. The problem with these relationships is just in the uncertainty. The most toxic relationships tend to be the ones that are actually a mix of positive and negative. The next step is to map out your core relationships on kind of this two by two matrix. Relationship health goes on the X axis from demeaning to supportive, while relationship frequency goes on the Y axis from rare to daily. This shows which relationships should be prioritized from top to bottom, as well as which relationships are worth completely removing from your life. The two most important zones are obviously going to be your supportive relationships, both frequent and infrequent. With supportive frequent relationships, you can simply just focus on maintaining them. With a supporting and infrequent relationships, you should probably spend more time making them a little bit more frequent. The next tool that I liked was regarding growing in Love. So the part of this tool I really resonated with was in my preference for inversion because it discussed four characteristics of relationships that die. So the four are criticism, defensiveness, contempt, and stonewalling or shutting down. These four characteristics emerged from a 1992 study by Dr. Gottman who interviewed 52 married couples and could actually predict with 94 accuracy which of these relationships would end in divorce. Now, no relationship exists without some form of criticism. I get it. The key is in how that criticism is delivered. I think feedback is very, very important. But if criticism comes from a certain angle, it can be viewed more as an attack than as feedback. Dr. Gottman came up with a way of dealing with these four horsemen of relationship death. So for criticism, the key is to avoid using the word you and focus on more on the word I. This reframes blame and focuses on what you feel or need from your partner in terms of defensiveness. Instead of deflecting responsibility, accept their perspective and apologize while trying to view it from their perspective. For contempt, he says, to create a reminder of your partner's positive traits, actions or behaviors and to express gratitude for those behaviors. Then for stonewalling, just take a breather, think on things, then return to it once cooler heads have prevailed. One tool that I want to mention is for communication, and it's called helped, heard, or hugged. You probably know the feeling when your partner is venting to you about something and you attempt to help them out, only to be met with the kind of resistance because it becomes clear after the fact they did not need the support that you offered. I know this happens to me much more often than I'd like. I know my wife sometimes wants to just vent to me, and too often I may try to dispense advice on how to deal with her problem, but this fails to provide her with the support that she needs at that time. Sometimes she just doesn't want my advice and sometimes she wants me to listen, and sometimes she might just want the comfort of a hug. The framework is simple. When someone comes to you with a problem, simply ask them do you want to be helped, heard, or hugged? When you ask this question, you become much better aligned with the type of support that they need from you. The final tool that resonated with me was the status test game. This is a simple test to determine whether you are playing a bot status game or an earned status game. To determine whether you're playing a bot status game, ask yourself whether you would buy this thing if you couldn't show it or tell anyone about it. If you're buying something expensive because you truly love it and maybe it provides you with a high degree of utility, then perhaps you're still buying it for the completely correct reasons. But if the answer is no, then you're playing a bot status game. You'll never completely avoid playing this game, but you should try to not play it constantly. To understand if you're playing an earn status game, ask yourself this could the richest person in the world acquire the thing I want by tomorrow? This one's simple. Someone who measures wealth by money will always have more status than you if you don't have the same amount of money. But intangible treasures like free time, loving relationships, purpose, expertise, wisdom, a healthy body and soul, and hard won financial success cannot be bought by someone with more money than you. They have to be earned and earned over a long period of time. When I ask myself these two questions, I know I don't always avoid the bot status games. I like nice clothes, for instance. Part of the reason is I like how they make me feel. And if I'm being honest, if I didn't have to tell or show them to anyone, I might just revert to the caveman style of the past and wear some form of primitive clothing that I could just find growing in the forest. But I know I'M blessed to be on this podcast talking with you today because it gives me purpose, builds my expertise and wisdom, and allows me to share my findings with an audience of like minded individuals. So part of my social wealth is just in sharing these things that I find fascinating with you, our loyal listeners. So next up comes Mental Wealth. Sahil sees mental wealth as kind of a question of one's curiosity towards life. He asks the question of what our 10 year old self would think of you today. Would they be genuinely interested in what you do, how you're doing it, and what problems you're trying to fix? Or would they just be bored to tears? Bloom chose curiosity because he found a very interesting study that showed just how powerful it is. The 2018 study found that brain systems engaged in curiosity had several beneficial side effects improved abilities to maintain cognitive functions, mental health, and physical health as you age. He calls curiosity the fountain of youth. To make curiosity even better, it's also associated with high levels of life satisfaction, positive emotions, and lower anxiety. We can break down curiosity even further into three distinct categories. The first is purpose, which gives meaning to our journey. Then there's growth, which allows us to unlock new insights along the journey that can help us understand ourselves, others and the world at an even deeper level. Then it finishes off with space, which is literally the space needed to do important things like think, reset, or wrestle with life's questions and recharge our mental well being. The characteristic that really jumps out to me about curiosity here is space. So this is an area that I find for myself is probably the hardest to create, simply because life just doesn't always give you space, even when you really need it. One thing that has had a major impact on me in 2025 was to do a gratitude reflection as often as possible. I aim for daily, but in reality I probably did it more like four to five times per week. Now all I did was think of three people or things that I was grateful for. It would only take a few minutes of my time, but even getting to it was sometimes hard given how busy my day to day life is. So I put a reminder on my iPhone and I try to get to it in the evenings when I have a couple minutes to myself. But to be honest, sometimes I do it while I'm brushing my teeth, driving my car, going for a walk, or just chilling with my family. But I think it's a really helpful exercise to do as often as possible simply because it just helps build my mental wealth. Now another great point Sahil makes is on the utility of ikigai. Ikigai is a Japanese term meaning life and worth. When put together, it connotes a reason for life. Ikigai has been used by some of the oldest Japanese people to help them live long and healthy lives. At its heart, it's made of just four parts. Number one is what you love. Number two is what you're good at. Number three is what the world needs. And number four is what you can be paid for. If you think of these as four overlapping circles, your ikigai is at the center of where they overlap. It's easy to use this concept as a way to think of what we ought to do for a living. But the centenarians of Okinawa actually take it one step further. They focus more on how to transcend one's career. Sure, it's great if you can tap dance to work, but even if you can't, you can still use the principles of ikigai to live a life full of fulfillment and purpose. To help utilize ikigai for its original purpose, Sahil removes the fourth principle, what you can be paid for, and includes it in the third principle, what the world needs. What the world needs can be satisfied either by your vocation or outside of it. Now, if we use this icky guy version on someone like Warren Buffett, you get some very interesting thinking points. So what does Warren love? I don't think it's money. I think he loves things like business, capitalism, and success. And when we move to what Warren's good at, the answer is very clear. It's investing. He has an unrivaled track record over the period that he's invested. The final question, what does the world needs? Is where I think things go in a slightly different direction. If you think of investing as I do, it's a little bit hard to come to an honest conclusion that it's a activity that's purely meant to make the world a better place. But that's only if you really think of investing in the first order. If you think of it that way, you put your money in, and if you're making an investment, you pull money out. That is the part of investing that doesn't provide a significant benefit to society. Completely admit that. But if you look at investing in the second order, it starts opening up several new possibilities. In Buffett's case, he's amassed one of the largest fortunes in the world. And if he'd meant to keep it all for himself and pass it on to his kids, I don't think that he would be nearly as fulfilled as with the decision that he made, which was to give away about 99 or more of his wealth, and he accrued his wealth to eventually give it back to society. You can argue whether or not he's giving it to the right causes, but many causes need financing to execute, and he's someone who has given more than nearly anybody to help further those causes. So I would say that Warren Buffett has lived a life that embodies ikigai. Investing is purely in the center of all of those characteristics. This is why he tap dances to work. Everything he does is aligned, and it brings him immense happiness to live a life like that because everyone is not blessed with that opportunity. Now, I'd like to briefly touch on purpose, growth and space again, as the book covers some very important topics. So. So purpose cannot be borrowed or given by others. It's innate to every individual. You and I can both live a life full of purpose while doing completely different things. Another important part of purpose is to ensure that we delineate it from our professional life. Some lucky people will get purpose from their jobs, but I think probably the majority of people will need to find purpose outside of their jobs, and that's perfectly fine. Now, when it comes to growth, all you really need to remember is Charlie Munger's point of view on learning, which is that each night you should strive to go to sleep just a little bit smarter than the morning that you woke up. Do this for decades and you're going to have a lifetime of growth ahead of you. And it keeps your mind from limiting yourself to believing that you know everything. And if you unfortunately believe that, you completely block growth, which is a very dangerous mental state. As for space, I've discussed how hard it is for me to find. So sometimes you need to think outside the box. What do you do on a daily basis that maybe you're on autopilot with that you can use to dedicate some mental energy to. To help, you know, practice something like gratitude. Is this method perfect? No, but I think that it makes some space. And even if it's short, it's much better than not creating any space at all. Now, the book also outlines that space can take many forms. I mentioned the ones above on my own, but the others might be things like daily prayer, journaling, taking time between meetings, maybe a cold plunge or a sauna, workouts or exercise, meditation rituals or even spiritual gatherings. In other words, space is an individual thing, and it's up to you to find your own wherever you can. Now, let's look at a few of the mental wealth tools that resonated with me that I think are very useful. So the first one is one that I've already mentioned, which is ikigai. So this is quite simple. First thing you do is you get a sheet of paper and create three large circles. Inside each circle, list the things that answer these three questions. What do you love? What creates the most joy and happiness in your life? Then answer, what are you good at? What feels effortless to you that might not to others? Where do your natural abilities stand out? What abilities or skills do others recognize in you? And lastly, what does the world need that you can offer? Depending on your age, this might be different. So don't feel obligated to stick with one thing for the rest of your life. Once you write these things down, try to find where the three intersect and that's how you live your ikigai. I did this myself, so here's a few picks for each of the questions. So what do I love? Family? Friends? Jiu Jitsu, Investing. Learning, Cooking. What am I good at? Jiu Jitsu, Investing. So far, so good. Being a father and coaching. What does the world need? Love, financial literacy and opportunities for those without means to achieve their potential. So there are two areas that I focus on, but I prioritize one over the other. So obviously Jiu Jitsu, I love it. I'm pretty good at it simply because I've been doing it for such a long time. But in terms of using it to help with what the world needs, I think it's kind of lacking in that area. Whereas I think investing is a little bit better at doing all three. As I mentioned with Buffett, investing benefits the world. If I can take care of my family and then make even more money that I can eventually give away. So I prioritize that area of my life. Let's take a quick break and hear from today's sponsors.
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All right, back to the show. Now, I'm very lucky that my job is actually in an intersection of all three areas. It allows me to achieve some big goals that I love in investing and learning. And since I'm decent at investing in coaching, I can help others broadly through this podcast platform that you're listening to me right now. And finally, I'm able to just save money from my job, invest it, and hopefully create enough wealth to take care of my family and and then make the world an even better place. The next tool I like was the Feynman technique. Since I like learning, this is one of the best tools that I personally use to better understand something. The technique was developed by the brilliant theoretical physicist named Richard Feynman. So where Feynman really shown was his ability to distill complexity into simplicity, an attribute that I very highly admire. So Bloom breaks down the technique into just four steps. The first one is to set the stage. So in this step, you figure out exactly what you want to learn, you gather all the necessary resources, and you get to work learning it. The second is to teach it. Imagine teaching the subject to an 8 year old. This eliminates the possibility of using complex jargon. Then go ahead and literally teach it to someone. Third here is to assess and study. So once you teach it, identify some of the blind spots. Did the person that you teach it to understand it, Were there questions that you didn't have answers to, or what were areas maybe that you got a little bit frustrated because you just didn't have the answers to their questions. And last year is to just organize, convey, and review. So obviously from when you assess how you did, you can find out where some of your blind spots are and go back to some of your source material and learn more about those blind spots and refine and iterate over time. And there you go. Now you've learned how to express an idea or a concept to someone in a very, very efficient and complete way. Now, Warren Buffett, I think, was a complete master of this. I would say Charlie Munger was good at it, but once you listen to him, it's obvious that he very much loves jargon. So I'm not sure I'd put him as high up on the pedestal as I would for Buffett. So the last tool I loved was the Think Day. So it's a hybridized form of the Think Week that Bill Gates is very well known for. So here's what Gates would do and why he did it. He would take a week away to get away from work. But this was not a holiday. It was time that he dedicated to two things, thinking and reading. This allowed him to get his creative juices flowing and to push him to think deeper and more broadly. It's a great exercise and you can see how this would probably be beneficial for pretty much everyone. But the problem is, who has a week to be completely alone? There's zero chance I'd be able to sell my wife on this. So Blooom came up with a condensed version, which takes just one day. So here's how he structures it. You pick a day of each month to step away from all professional demands. You can seclude yourself. You can change your status to out of office and shut off all devices. Next, you just use that time. You read, you learn, you journal, you think and allow yourself to zoom out and look at the bigger picture. Here are some of the thinking prompts that Sahil shared that I think are very powerful. If I repeated my current typical day for 100 days, would my life be better or worse? If people observed my actions for a week, what would they say my priorities are? If I were the main character in a movie of my life, what would the audience be screaming at me to do right now? How do I do less but better? What are my strongest beliefs and what would it take for me to change my mind on them? What actions did I engage in five years ago that I cringe at today, and what actions am I engaged in today that I might cringe at in five years? And I thought I'd add a few of my own that I think would be valuable questions to ask on a monthly basis? What am I doing today that's creating positive compounding that might not be seen for another 10 years? What am I prioritizing or deprioritizing that requires adjustment? And what do I need to do differently to get closer to becoming the person that I know I want to be? I think these questions on a Think Day is a great idea, but if you can't even do a Think Day, you can also just meditate or reflect on them when you have some time. I think the act of doing that will be very powerful, ensuring your life is aligned with your principles and actions. Now, speaking of principles and actions, I've always prioritized taking care of my body, especially through exercise and nutrition. But as I mentioned earlier in this episode, this was actually the area that I think I've probably allowed to slip a little bit over the past few years. Now, this is a good transition here to discuss physical wealth now, to better understand where you're headed, Saheel gets you to imagine yourself on your 80th birthday. At this event, your favorite song comes on. Your family and friends decide to hit the dance floor. The simple question is, can you join them or are you restricted to living vicariously through them by having to stay seated and watch them get all the fun? The point of this exercise is to have a closer look at your health today to observe the harsh truth of your future. How you treat your body today in terms of exercise and nutrition will directly impact your ability to get up and dance or not. If you think of this question, it will help give you clarity on whether you are doing what it takes to live a long life full of vitality. And if you think the answer would be that you're going to be sitting, then that's a very good kick in the butt. To make sure that you maybe make some adjustments to your life today that can hopefully be long lasting, you should also ask what would your 80 year old self want you to do today? Now, as with previous chapters, physical wealth is broken down into three primary areas. The three are movement, nutrition, and recovery. Movement's pretty simple. It's the exercise that you do on a regular basis that allows you to reap the benefits of continued movement. Nutrition is simply what you put into your body and recovery is all the things that you do between exercise to make sure that your body is ready to continuously be pushed. This includes things like flexibility and sleep. Now, I haven't discussed this at all in the podcast, but I actually owned my own personal training business for about a decade, so I'm intimately familiar with the fitness industry. When I was in my late teens, I brought the same level of investing obsession that I have today into the world of fitness and nutrition. I read books, I read research, spoke with experts, attended live events, earned important certifications and continued to just seek the truth wherever I could. Now the book makes a great point. The fitness industry is very crowded. This is probably why there aren't many great fitness related public companies out there. It's very hard to get any advantage and much of what happens in the fitness industry is built on fads, especially in nutrition. So I really like what Bloom wrote about nutrition. Just focus on whole foods, which tend to be foods that nature intended us to eat. Things like meat, chicken, fish, fresh fruits, vegetables, nuts. Focus on foods with as few ingredients as possible, AKA just try to avoid eating processed foods or things that come in a box. The main problem with physical wealth is I think out of all the types of wealth covered in this book, it can be the easiest to just simply forget. It's easy to stay on the couch rather than get up and get to the gym. It's easy to order delicious and unhealthy foods rather than cook healthy alternatives. And it's easy to deprioritize sleep when there's just so many things to do in a day. In my opinion, while exercise, nutrition and recovery are crucial to long term health, the most important part of building physical wealth is simply showing up. Show up to your exercise, show up to eat good foods and avoid the unhealthy stuff, and show up to get your sleep in. Whether you do CrossFit or powerlifting or something else to exercise just doesn't really matter if you never actually show up to do that exercise. So just show up, because if you do, you'll be ahead of the game. And I can say from my own experience that showing up was the biggest part of the battle. It wasn't something I had problems with in my, you know, early 20s because it was a massive priority for me back then, but nowadays with so many other responsibilities in my life, it's nowhere close to where it once was. So instead of going over all the different tools in this book, which are good, I would just focus on finding something you think you can do for the next five years. This means something that's realistic and achievable. Doing a crash diet which offers short term results is meaningless for the question posed at the beginning of this topic. You want to make small dietary changes that you can continue hopefully for decades. Doing a crash diet is like using leverage in the stock market. You may get really good results over a very concentrated period, but it will eventually just end. And there's a very good chance that you will completely blow things up and start over exactly where you started, or end up an even bigger hole. But making small adjustments that last for decades is like being a buy and hold investor. You might have some ups and downs, but in general you're moving in the right direction, provided that you make the right choices. Now I'll close the discussion out talking about a few of my goals that I'm focused on in 2026 and for the next few decades. So they're primarily based around nutrition. My exercise comes primarily from jiu jitsu, so I had that area reasonably well covered, but I'll cover that as well. My sleep could use a little work, but that just means going from maybe the seven to seven and a half hours that I usually get to going to 8. So I don't think I have a massive deficit in that area. So that kind of leaves nutrition as my biggest problem. And for me, it just simply comes down to avoiding the foods that I know that I should avoid. I don't need to read another book on nutrition for the rest of my life to know that I should just avoid processed foods. I just need to do it. And if I do it, I know I'll feel better and look better. It's just that simple. So in the spirit of this episode, I came up with a few points for my nutrition and exercise that I intend to implement in 2026, which I believe are doable for many, many years to come. So the first one here, no processed carbs before dinner about 80% of the time. The next is to continue with my 18 hour fasting windows. I've actually used intermittent fasting for well over 15 years, so this is very natural for me. But I'm also wanting to utilize a 24 hour fast on both Monday and Saturday, which are going to last from dinner to dinner and then two dinners per week. I want to consist of only vegetables and then some sort of meat, poultry, pork, seafood product. Now for exercise. In a perfect world, I do jiu jitsu, you know, five days a week, but that's just not likely right now. So I'm putting that down to just three times a week. And if I fail to reach that number in one week, I can make up for it in a following week. And if it's not possible for me to make up for it, then I'll just replace a jiu jitsu with a gym session that probably focuses more on conditioning than strength work. I love strength work, but my body doesn't like it so much. So I'm sharing my goals here because I think it's very powerful to share them with others. There will come a time when I may veer off, and discussing these goals in public is my way of being responsible for my own actions. Now, the last part of the book is on financial wealth, where I think most people believe wealth comes from, but where I think I made it clear on today's episode is probably the wrong way to look at it. The big question when it comes to financial wealth is just how you define enough. There's a great story about why defining enough is so important. In a short poem what his late friend Joseph Heller, a famous American author best known for his work on the satirical genius Catch 22, Kurt Vonnegut shared an anecdote that offers a powerful piece of Heller's wisdom. As the two enjoyed a party at the home of a billionaire, Vonnegut asked Heller, joe, how does it make you feel to know that our host only yesterday may have had more money than your novel Catch 22 has earned in its entire history? Heller replied, I've got something that he can never have, the knowledge that I've got enough. The lesson here is that if you know that you have enough, you can be the richest person on earth while having little to no possessions. Now, let's get back to the real world here, because I don't think many of our listeners, or myself, to be honest, want to live the life of a Buddhist monk. I live a life where I take joy in some of my physical possessions, and I think that's perfectly fine. The key that Bloom makes is to ensure that you aren't on the hunt to keep needing a little bit more to reach your definition of enough. Because if you find yourself constantly in need of bigger, better and brighter physical possessions, you'll never truly be wealthy because you'll constantly require more money to spend on things. Bloom puts it even better. You will never have true financial wealth if you allow your expectations your definition of enough, to grow faster than your assets. Now, the book uses the Swedish term lagom, which translates to just the right amount. To clarify what enough means, lagom is a way to bring balance to your financial life. But it's not a static state, which I've been closely observing in my own life. The more that I work with Tip, the more prosperous that I become. But I've also had to be careful not to let my spending get out of control. It's easy to see more money coming in and then just assume that you should also ratchet up the money that's going out. But this is a very slippery slope because it becomes a lot easier to justify buying things you don't really need or want. And that one action can easily eat into your savings rate. So let's say I save 10% of my salary and my salary keeps rising. The absolute amount should increase as I earn more, but if I allow that percentage to slip, I risk my expectations and liabilities growing faster than my assets, which is how I'll never reach financial independence. The most important part of this chapter was a framework that Bloom developed called the Enough Life. So the Enough Life is simply an introspective way to observe your own legome. It's the point where you have just the right amount of financial wealth for another person. It might be $100 million all that matters is that it's right for you. So here are the questions that Sahil used to understand his Enough life Where do you want to live? What do you want to have? What are you and your loved ones doing in this moment? What are you most focused on and how much financial cushion do you have? Sahil shares some of his answers to this. He wants something like a vacation home in a beautiful location so he can host family and friends and create incredible memories. But he doesn't place much emphasis on fancy trinkets like private jets, yachts, mansions, supercars or fancy jewelry. The point is that everyone's life will be individual to them, so you can look at your own values and go from there. If I answered these questions, I'd probably live in Vancouver, where I live now. Owning property doesn't matter as much to me, but I would not say no to owning I would love to have a vacation property for the same reason that Sahil mentioned to make incredible memories. Material possessions aren't as important to me, although I do enjoy spending money on nice clothes, which I mentioned earlier. I'd also like to have the ability to do what I want, when I want, with who I want. And same for my wife. I like to travel around the world a few times a year to experience new cultures and food and learn about the vast world that we live in. I'd still be heavily focused on things that bring me joy, things like family investing, reading, learning, and jiu jitsu. I'd also like to have a few dogs now. As for the financial cushion, I need it to be big enough to draw from to fund the lifestyle that I'd like. That exact number is harder for me to determine now, but I'm working on it now. Financial wealth is built through three aspects. The first is income generation, which is the creation of a stable and growing income through direct employment, secondary employment, and passive income streams. Second is expense management, which is simply the management of your expenses, ensuring that they're reliably below your income level and growing at a slower rate. And third is long term investment, which is investing the difference between your income and expenses in a long term focus way that takes advantage of compounding. I think these are all pretty straightforward concepts, and since this podcast discusses long term investment in a lot of detail, I'm not going to spend too much time on that one. But I would love to touch more on the synergies between the first two aspects because I think those are by far the most important. So let's look at this through story form. So let's say we got two friends, we got Mike, and he's going for a walk with his best friend from childhood, Aaron. So Mike is telling Aaron about the latest vacation that he took and the five star resort that he visited with his wife and two children. He also mentions the brand new Mercedes Benz that he bought and how he recently upgraded his house by moving to an even more affluent neighborhood than he lived in before with a six car garage to hold the new cars that he plans to buy. Aaron starts rolling his eyes as Mike goes on and on, but Mike is completely oblivious. Mike then pulls up his sleeves to show a brand new Patek Philippe watch that he just bought for six figures. His friend Aaron does a few calculations in his head and is wondering just how on earth Mike is affording all of this. You see, Mike and Aaron aren't only childhood friends, but they're also software engineers at the exact same company with similar tenure and nearly identical salaries. Aaron knows this because they negotiated their latest compensation package together as a team. Aaron, on the other hand, lives a comfortable life, but he doesn't have nearly as many extravagances. He's also married, he has a couple children. He takes the family on a few very nice vacations per year. His car is ordinary. He lives in a modest home in a nice neighborhood, but nowhere nearly as nice as where Mike lives. But he doesn't feel the need to live in a neighborhood full of mansions. His garage has just two stalls, one for him and one for his wife. Baron saves about 20% of his income every month and never waivers on that number. He doesn't carry any credit card debt and the only debt he has is on his home and the cars that he and his wife have. But he's done the calculations and knows that he can easily continue saving 20% of his income while covering those expenses. Now let's look at the financial wealth between these two people making the same amount of money with equal earnings power. So Mike is living a life of luxury but has zero savings and multiple credit cards well into the six figures. Aaron is living a great life. More modest than his best friend for sure, but already has seven figures in his portfolio and has one year of living expenses saved up just in case something were to happen to his or his wife's job. Now, there's nothing inherently wrong with either of these lifestyles, but you can easily see that Mike is probably going to have a very difficult time reaching financial wealth because the gap between his income and expenses is negative. He will likely be working well into his 60s and 70s. If he wants to maintain this lifestyle. Aaron is saving so much that he can probably retire in, you know, his 40s and maintain his lifestyle. He can then use that time that he spent working to do whatever he would like to do. The key point is that they have different gaps that are managed differently due to their expense management. If Mike ever wants to get towards financial freedom, he'll either have to make a lot more money or spend less. It's just that simple. Financial wealth can be broken down into five levels. Level one, baseline needs are met, such as food and shelter. Level two, baseline needs are exceeded and modest pleasures become available. This includes things like eating out and simple vacations. Level three is that baseline needs are no longer top of mind. The focus moves towards saving, investing and compounding wealth. Access to more significant pleasure is unlocked. Multiple vacations and more expensive experiences are at your fingertips. Level four is reasonable pleasures are readily available. Asset accumulation starts accelerating as assets generate passive income, which helps cover some, but not all of your expenses. At this point, you're beginning to reach financial independence, but aren't quite there as you still require a primary income to fully fund your lifestyle. And last year is level five, which is where all pledges are available. Asset accumulation reaches escape velocity and assets generate passive income in excess of all lifestyle expenses. This is when you're truly financially independent and require zero direct or secondary income to meet your living expenses. Now, listening to this, you can quite easily conclude at which level you're at. The interesting thing about these levels is that just because you ascend up a level doesn't mean you're ridding yourself of your financial problems. It just means your financial problems evolve into something else. The book covers this entrepreneur named Patrick Campbell who sold his business for $200 million. Now, Patrick grew up in a working class family, so he didn't have a lot of money to begin with. But after he exited this business, he obviously ascended all the way up to level five. But he still had a multitude of different problems. You know, instead of maybe the worries that he used to have, such as paying for the necessities of life, which were his old problems, his problems were now based around things such as identity. Now, I remember a member of our TIP Mastermind community who actually created a community specifically for people such as Patrick Campbell. To qualify for that community, you would have to have exited a business for a minimum of $20 million. The group would then speak about a wide variety of things such as estate planning, taxes, and problems regarding identity, which just aren't problems that come up for people who are levels one through four. They also discuss topics such as legacy and philanthropy, which we've discussed a lot in the TIP Mastermind Community as well. But let's get to some interesting tools that we can use to help move up levels. The first tool I already mentioned is finding your enough life. If you have a partner, it's worth doing this exercise separately, then come together and compare notes. It will help you determine which changes are needed to bring your current reality into a future one, and it will help illuminate the specific steps necessary to reach your future. The next tool is more like a set of principles that Sahil created for his younger self. The beauty of this list is that it doesn't actually matter if you're young or old, they're valid regardless of how many gray hairs you have or don't have. The tool is more focused on how to generate more income, so the principle Number one Create value Receive value. When you create value for others, you receive it in return. And most importantly, the more value that you create, the more you receive back. Number two Find out about what your boss hates doing and take it off their plate. Doing this adds value to your boss by freeing up time for things that they actually enjoy and helps make you more indispensable. Number three Just be a good human. Normal acts of decency go a long way. Hold doors open for people, make eye contact while talking, be on time, and just be kind. These are simple things that just never go out of style and are universally appreciated. Number four Work hard first, work smart later. When you're newer to the workforce, build a reputation as a hard worker. Then, once you have that habit ingrained, diversify out to leverage your ability to work smart. Number five build storytelling skills. Some of the best CEOs in history are known that way, not because they are the most intelligent people, but because they can communicate their ideas the most effectively to their customers and employees. Number six Build a reputation for figuring things out. If you can solve problems that people are willing to pay good money for, you'll never be out of a job. Yes, you'll get imposter syndrome at times, but you'll also prove to yourself and others that you're capable of just figuring things out. And lastly here. Number seven Dive through every cracked open door. Even if there's a glimmer of an opportunity that presents itself, just jump through it. It might not even pay off now, but could pay off massively in the future. Now let's examine the basic tenets of winning expense management so the first step is to have a budget. I think this is most important if you're completely unable to keep expenses below your income. But even if you can keep them below, it can be a great tool just to see where you're spending and whether you can maybe reallocate your cash to things that maybe bring you more benefit, or even if you can reduce your expenses to increase your savings rate. The next step is to automate the savings process. I've always liked the system for this that was outlined in the book the Richest man in Babylon, which was just to just pay yourself first. So he used about 10%, but you can use whatever number makes sense to you. One important point to make here is that savings should be separated into two categories. The first one should be savings for investing, and the second one should be savings for a rainy day fund. You should have a fund to help deal with life's uncertainties. Now, one of the biggest wins that I made on my expense management was number three here. And that's to treat credit cards like cash. So if you spend something on your credit card, don't think of it as something you'll gradually pay back because you're going to end up paying a ton of fees and interest expenses. What your goal should be is to get your credit card to zero at the beginning of each month. As a bonus, you'll rack up a ton of points and you won't pay interest charges. Next is to budget for experiences. Life is most fun when you can create amazing, memorable experiences with people that you love. So if you're making a monthly budget, set aside money to fund these experiences so you aren't hit with a massive bill later that you can't immediately pay back. Now, the last two here are great. So the first one's plan ahead. This means that all expenses, not just the obvious ones such as groceries, mortgage payments, car payments, and children are taken care of. You want to make sure that you have large future expenses accounted for so you can handle them when they arrive. And finally, constantly evaluate your expectations. You can think of expectations as a liability because if expectations grow faster than your assets, you run the risk of causing yourself just financial misery. This means evaluating when you have lifestyle creep. Now, I want to make a note on this because I think it's really important and something that I've been thinking a lot about lately. I think it's okay to treat myself when I start earning more. I think that's perfectly fine. I know I just need to make sure that I balance it all and don't turn into Mike. In that story that I listed above, I resonate with Aaron a lot more. The hard part is finding that balance and allowing myself to loosen the purse strings every now and then. The final tool that I liked was titled the Single Greatest Investment in the World and I love this one because not only do I think it's highly impactful, but I've done it a lot throughout my own life. The best investment you can make is simply in yourself. This includes things like investing in books, courses, education, fitness, meeting new people, eating quality foods, prioritizing your mental health and personal development, and getting adequate amounts of sleep. One of the reasons that I think investing in yourself is just so important is that it opens up so much serendipity. I can trace the fact that I'm chatting with you today on this podcast to a few choices that I made to improve myself. The first was investing in a writing course that helped me build a daily writing habit. This improved my writing skills and helped me to continue to develop my writing abilities on things like substack newsletters and on Twitter. This one decision made my writing more digestible, which helped me connect with Clay, who was the reason that Stig eventually found me so investing in yourself can truly be life changing and it can open the doors to so many great opportunities and many of these opportunities are the ones that you never thought would even be possible. I never envisioned a future as a podcast host when I took that writing course, but that's what eventually happened. So go invest in yourself and see what kind of interesting adventures open up for you. Thanks for spending time with me today. If you'd like to continue this conversation, please follow me on Twitter Irrational mrkts or connect with me on LinkedIn. Just search for Kyle Grieve. I'm always open to feedback, so feel free to share how I can make this podcast even better for you. Thanks for listening and see you next time.
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