ATHLLC4073811177

00:00:00.000 | A quick word from our sponsor today.

00:00:01.680 | I love helping you answer all the toughest questions about life, money, and so much

00:00:08.040 | more, but sometimes it's helpful to talk to other people in your situation, which

00:00:12.860 | actually gets harder as you build your wealth.

00:00:14.920 | So I want to introduce you to today's sponsor, LongAngle.

00:00:18.160 | LongAngle is a community of high net worth individuals with backgrounds in

00:00:22.200 | everything from technology, finance, medicine, to real estate, law,

00:00:26.040 | manufacturing, and more.

00:00:27.600 | I'm a member of LongAngle.

00:00:29.480 | I've loved being a part of the community, and I've even had one of the founders,

00:00:33.040 | Tad Fallows, join me on all the hacks in episode 87 to talk about alternative

00:00:37.200 | investments.

00:00:37.920 | Now, the majority of LongAngle members are first generation wealth, young,

00:00:42.240 | highly successful individuals who join the community to share knowledge and learn

00:00:46.400 | from each other in a confidential, unbiased setting.

00:00:49.600 | On top of that, members also get access to some unique private market

00:00:53.920 | investment opportunities.

00:00:55.200 | Like I said, I'm a member and I've gotten so much value from the community

00:00:59.120 | because you're getting advice and feedback from people in a similar

00:01:02.280 | situation to you on everything from your investment portfolio, to your

00:01:06.240 | children's education, to finding a concierge doctor.

00:01:09.200 | So many of these conversations aren't happening anywhere else online.

00:01:13.120 | So if you have more than 2.2 million in investable assets, which is their

00:01:17.400 | minimum for membership, I encourage you to check out LongAngle and it's

00:01:21.440 | totally free to join.

00:01:22.760 | Just go to longangle.com to learn more.

00:01:26.120 | And if you choose to apply, be sure to let them know.

00:01:28.840 | You heard about it here.

00:01:29.960 | Again, that's longangle.com.

00:01:34.640 | Hello, and welcome to another episode of All The Hacks, a show about upgrading

00:01:45.080 | life, money, and travel all while spending less and saving more.

00:01:49.040 | I'm Chris Hutchins, and I'm on my own quest to find every hack there is.

00:01:54.120 | And today I'm talking to Morgan Housel, author of the fantastic bestselling

00:01:59.360 | book, The Psychology of Money, Timeless Lessons on Wealth, Greed, and

00:02:04.280 | Happiness. We'll be talking about behavioral finance, investing, dealing

00:02:08.320 | with risk, and approaches you can take to be more productive with your

00:02:11.480 | money. Morgan is a partner at the Collaborative Fund and a former

00:02:15.200 | columnist at The Motley Fool and The Wall Street Journal.

00:02:17.760 | He's a two-time winner of the Best in Business Award from the Society of

00:02:21.600 | American Business Editors and Writers and a winner of The New York Times

00:02:25.000 | Sidney Award. And before we jump in, if you're enjoying the show, I'd

00:02:29.000 | really love your help.

00:02:30.120 | If you could either pick your favorite episode and share it with a friend or

00:02:33.840 | leave a five-star review in the podcast app, I would really appreciate it.

00:02:37.520 | All right, let's get to it.

00:02:39.280 | Well, after one more quick thing.

00:02:41.080 | Chris Hutchins works at Wealthfront.

00:02:43.320 | All opinions expressed by Chris and his guests are solely their own opinions

00:02:47.240 | and do not reflect the opinion of Wealthfront.

00:02:49.760 | This podcast is for informational purposes only and should not be relied

00:02:53.000 | upon for investment decisions.

00:02:54.480 | Morgan, thank you for being here.

00:02:57.520 | Thanks for having me, Chris. Happy to be here.

00:02:59.800 | So you've been writing columns, articles, blog posts about money and

00:03:03.440 | investing for almost 15 years.

00:03:05.760 | What about the psychology of money led you to write an entire book this time?

00:03:10.680 | What actually got me to write the book was just the realization that I had

00:03:13.880 | accumulated enough stories, enough material to fill out a book.

00:03:17.200 | That's the honest answer.

00:03:18.240 | And it took a long time.

00:03:19.560 | It took 10 or 15 years of casual observing and reading about a bunch of

00:03:24.080 | things that led me to find what I thought were the most important parts

00:03:27.880 | about how people think about money and kind of how I've always thought about

00:03:31.320 | this. Not always, but the main way that I've written, not just written, but

00:03:34.880 | thought about and researched behavioral finance is through the lens of other

00:03:38.440 | industries. And the reason that is, if I take you back to when I started

00:03:41.960 | writing about finance, which was 2008, which of course is when the world fell

00:03:46.080 | apart, the financial crisis, everything was breaking and crumbling down around

00:03:49.440 | us. And my early years of becoming a financial writer, I wanted to answer the

00:03:53.560 | question, why did people do the things that they did during the housing bubble

00:03:58.440 | during the financial crisis?

00:03:59.440 | Why did they, why did people take on so much debt?

00:04:01.800 | Why did they make all these dumb, crazy decisions that blew the world to

00:04:04.640 | pieces? Why did they do it?

00:04:05.840 | That's what I wanted to answer.

00:04:06.600 | And I realized as years went on, the answer to those questions could not be

00:04:12.040 | found in a finance textbook or an economics textbook.

00:04:15.560 | You could not explain why people did what they did if you were just looking at

00:04:19.360 | finance or thinking through the lens and the frameworks and the theories of

00:04:23.000 | finance, just the answers weren't there, but you could find clues like these,

00:04:28.120 | like tangential clues about why people did what they did.

00:04:30.640 | If you were thinking about psychology and sociology and political science and

00:04:34.960 | biology and neurology, like all these things that had nothing to do with

00:04:38.240 | finance could actually explain why people did the things that they did.

00:04:42.360 | Things like sociology, like keeping up with the Joneses or like, you know,

00:04:45.560 | your brother-in-law buys a big house, so now you got to go buy a big house.

00:04:48.520 | Finance can't explain that, but sociology can.

00:04:50.920 | So to me, that just started this idea that money is not the study of finance.

00:04:56.240 | It's a study of how people behave, like how people behave with money.

00:04:59.520 | And since it's a study of behavior, you can learn so much about it through the

00:05:03.240 | lens of all these other disciplines.

00:05:05.560 | And so I spent the huge majority of my time, I almost never read finance books

00:05:09.600 | or economic books.

00:05:10.320 | I read books about all kinds of different topics, just trying to answer the

00:05:13.720 | question, like what, how do people respond and behave around fear and greed and

00:05:18.480 | risk and uncertainty, and just trying to piece together little, little bits and

00:05:22.920 | stories about how people behave.

00:05:24.520 | And so I just did that for many years, more than a decade before I felt like I

00:05:28.320 | had enough to throw it all together into a book.

00:05:31.240 | And that's where this came from.

00:05:32.120 | Well, I'm glad you did.

00:05:33.840 | When I was in college, my wife and I actually went to college together and she

00:05:37.880 | had a major in finance and all of a sudden she was like, wait, finance is all

00:05:41.720 | about, and I remember specifically talking, taking the fundamentals of

00:05:45.120 | futures and options markets with her as a course in college.

00:05:47.920 | And she was like, this isn't what I, like, I was really interested in how

00:05:51.480 | people think about money.

00:05:52.400 | I'm not interested in, you know, the Black-Scholes model for pricing options.

00:05:56.160 | And so that actually, I think if your book was around, she could have taken a

00:06:00.080 | different path, but she got out of finance pretty quickly because it was not framed

00:06:04.000 | around how people think about money.

00:06:06.280 | So that's actually a really good point because the behavioral side of finance,

00:06:10.440 | the psychology side of finance is really hard to teach.

00:06:13.200 | You can't like, even to really smart people, it's hard to teach.

00:06:15.800 | So what tends to be taught in finance in colleges and whatnot is the part that is

00:06:20.800 | relatively easy to teach.

00:06:22.200 | There's all the formulas and the data and the charts, the things that you can

00:06:24.920 | memorize and regurgitate on a test.

00:06:26.560 | The softer side of finance is just, it's much more mushy.

00:06:29.920 | It's much more like, like answering the question, like, how do you become a good

00:06:33.560 | spouse?

00:06:34.360 | It's hard, you can't teach that in college.

00:06:36.880 | It's a really important topic.

00:06:38.560 | It might be the most important topic of your entire life, but you can't summarize

00:06:42.040 | it into a formula, so you can't teach it.

00:06:43.800 | And what, this is true for a lot of disciplines, like what is taught in school

00:06:47.440 | are the things that are able to be taught, like the things that you can teach.

00:06:50.200 | But there's a lot of things that you just can't teach.

00:06:51.960 | Like, like how do you teach someone to respond well around greed and fear?

00:06:55.520 | Tough thing to, to, to teach that in a way that you're going to be able to test

00:07:00.000 | someone on a midterm for.

00:07:01.520 | So that's, it's, it's actually, it's, it's a great point that you and your wife

00:07:05.320 | brought up about, you know, what is, how finance is typically taught versus what

00:07:09.200 | it actually is in the real world.

00:07:10.560 | Yeah.

00:07:11.720 | And, and there's so much in the book about how to start thinking about different

00:07:15.720 | things before going kind of deep on a few of those.

00:07:18.640 | I'd love to talk a little bit about the ultimate goal of learning and mastering

00:07:22.960 | money.

00:07:23.320 | I think, you know, you have a pretty good framework for what that unlocks in life

00:07:27.560 | and, and kind of what the highest form of wealth is.

00:07:29.920 | And I'd love to hear you kind of talk a little bit about that.

00:07:32.400 | To me, the highest form of wealth is you wake up every morning and you're going to

00:07:36.560 | say, you're going to say that you can do whatever you want today, whatever you

00:07:39.960 | want to do.

00:07:40.440 | Even if most of the time, what you want to do is wake up and go to work and be a

00:07:43.400 | productive member of society.

00:07:44.680 | It's on your terms.

00:07:46.040 | You're doing it at the company you want for as long as you want.

00:07:48.880 | You can live where you want.

00:07:50.000 | You can work with the coworkers that you want.

00:07:51.600 | Having a sense of independence and autonomy, being on your own terms, owning

00:07:55.480 | your time, owning your schedule, having control over your schedule.

00:07:58.440 | That to me is the highest form of wealth.

00:08:00.920 | And it's important because everyone knows, I mean, this is so, this is

00:08:04.800 | virtually cliche at this point, but you get used to things, cars, homes, it's not

00:08:10.360 | that it's bad.

00:08:10.880 | I like nice cars as much as anyone else, but people get accustomed to them.

00:08:14.240 | The joy that you get from them is going to wear for virtually anyone.

00:08:17.920 | People massively overestimate how much joy you're going to get from stuff.

00:08:21.200 | It's not that stuff is bad.

00:08:22.320 | You just overestimate it.

00:08:23.280 | But owning your time, owning your schedule, having independence and autonomy is

00:08:27.400 | something that I think will give you a permanent level of lasting happiness.

00:08:31.440 | Or I think a better, like a little bit of nuance here is that it's not that having

00:08:36.240 | independence gives you, makes you happier, is that it makes you less miserable.

00:08:40.360 | Like people who don't control their time just have more bad days than people who

00:08:44.160 | have that level of independence.

00:08:45.360 | So to the extent that people can use money and wealth and savings to gain

00:08:49.840 | autonomy in their life, that to me is like the highest form of wealth.

00:08:53.840 | And there's a couple of things about it.

00:08:55.200 | One is that for a lot of people, the amount of wealth that you need to gain

00:08:59.880 | some level of independence and autonomy is a lot lower than I think what most

00:09:04.320 | people would consider rich.

00:09:06.080 | And the definition of rich is different from for everyone throughout the world,

00:09:10.120 | different, different, different people, different generations, but having just a

00:09:13.880 | level of savings so that, for example, if you were to lose your job, you can wait

00:09:18.080 | to find a good job rather than having to take the first one that you can possibly

00:09:22.120 | find, that's a level of independence that can make your life substantially better.

00:09:27.000 | Having just enough savings that if you have a medical emergency, it's not going

00:09:30.160 | to ruin you, which for whom it does millions of Americans every year, that's

00:09:34.600 | a level of independence and autonomy.

00:09:35.960 | So like, obviously independence is a spectrum.

00:09:38.520 | A lot of people when they think of independence, they think, they think the

00:09:42.160 | fire movement, retire early, quit your job, go like on a road trip around the

00:09:45.920 | country, and that's one level, but there's a big spectrum below that, that can lead

00:09:50.040 | to a lot of happiness of just being in control of your time.

00:09:52.840 | And the other way that people talk about this is of course, like the well-known

00:09:55.840 | phrase, F you money, like so much money that you can just say F you to people who

00:09:59.560 | you don't want to deal with.

00:10:00.520 | That's one level of this that gets talked about.

00:10:02.840 | And I think there's like a more polite version of that.

00:10:06.280 | I call it like, please leave me alone money of just like, you know, if you have

00:10:09.400 | enough money, you just, you don't have to deal with, with the, with a lot of the

00:10:13.800 | hassles that you have in life.

00:10:14.760 | You can just like, look, I, I'm not, I don't, I don't, I don't report to anyone.

00:10:18.360 | I'm not on anyone else's, you know, quarterly performance metrics.

00:10:22.280 | You can just kind of live the life that you want and pursue the creative ventures

00:10:25.240 | that you want in a way that I think is really underestimated in life.

00:10:28.800 | Yeah.

00:10:29.840 | I think in today's environment, I hear lots of people say, gosh, you shouldn't

00:10:33.400 | hold any cash.

00:10:34.120 | It's, it's the interest rates are so low that you actually forget that the value

00:10:39.000 | or, or the kind of return on that money that's sitting in cash can be something

00:10:43.480 | really, really significant if you are able to use it to turn down a job, or you're

00:10:48.000 | able to use it to work less hours on your hourly job and pursue something you're

00:10:52.400 | excited about.

00:10:53.040 | So I'm a big fan of using cash to buy yourself freedom and treating that freedom

00:10:58.880 | as, as a similar return, though, though, very different from the kind of return

00:11:03.360 | that's more tangible of investment returns and that kind of stuff.

00:11:06.320 | You're so right.

00:11:06.800 | The people look at the return on cash and they say, look, 0.1% interest.

00:11:11.120 | Like, why would it possibly do that?

00:11:12.560 | And then once they hit, whether it's next month or five years from now, once they

00:11:16.080 | hit some sort of life emergency where they need that cash and they realize that

00:11:19.520 | cash is the oxygen of independence, like you don't think about it until you need

00:11:23.760 | it.

00:11:23.840 | And then when you need it, it's the most important thing in the world.

00:11:26.320 | Nothing else matters.

00:11:27.600 | And so I think once every 10 years, at least everybody, everybody, once every 10

00:11:32.720 | years, we'll have something happens in their life where they think, where they

00:11:36.480 | realize, oh, I'm so glad I had this buffer of cash that I didn't know what I was

00:11:39.920 | going to do with, or, oh my gosh, I wish I'd like, things would have been so much

00:11:43.680 | better if I had just saved a little bit of cash.

00:11:45.360 | Everyone will deal with that once every 10 years.

00:11:47.600 | And during the other 99.9% of the time, your cash feels like it's a drag on your

00:11:52.000 | net worth.

00:11:52.960 | And then, you know, one week, every 10 years, it's the most important thing that

00:11:56.560 | completely transforms your life because it gives you options over your time, over

00:12:00.080 | your control of about where you, what you're going to do and where you have to

00:12:02.880 | go, et cetera.

00:12:03.520 | Yeah.

00:12:04.800 | So building up that cash, you know, there's, there's lots of ways to do that.

00:12:08.640 | And, you know, it ultimately comes down to having more money and, you know, you

00:12:12.560 | could save more or you can earn more.

00:12:14.320 | And by earn more, you could work or make investments that grow.

00:12:17.920 | I personally think that saving is much easier to focus on.

00:12:22.160 | It's totally in your control, but it seems like everyone I talk to is focused on

00:12:26.880 | making more money and usually making more money from investments and seeking high

00:12:30.960 | returns.

00:12:31.520 | Why do you think it's so hard for people to save more and spend less?

00:12:36.640 | I think, look, both sides of the equation are really important.

00:12:39.920 | Like, of course, earning more and like proper investing and like long-term

00:12:43.120 | compounding, that's so important, of course.

00:12:45.680 | But I think the side of the equation, which is just, you know, like all of wealth

00:12:50.000 | is money in minus money out.

00:12:51.920 | Like that's what it is.

00:12:52.800 | And the money outside of the equation is just more in your control.

00:12:55.920 | Like to double your money in the stock market over the next five years is doable,

00:13:00.160 | but it's not always easy.

00:13:01.760 | Like people who are new to investing might think that's crazy because it's been so

00:13:04.960 | easy lately.

00:13:05.600 | But most of the time, like doubling your money in the stock market takes a lot of

00:13:08.960 | work and a lot of patience and a lot of just like sticking it through.

00:13:11.760 | But lowering your expenses is so much more in your control because you have no

00:13:16.320 | control of what the stock market is going to do next.

00:13:18.400 | But you do have control over how big your ego is in terms of how much you need to

00:13:23.520 | flash and show the world how much money you have through the cars you're driving

00:13:27.040 | and the clothes you're wearing and the vacations that you're posting on Instagram.

00:13:30.160 | Controlling that side is so much more in your control than assuming that you can

00:13:35.120 | have any control of what the stock market is going to do next.

00:13:37.440 | So it's just it's not that one side is more important than the other.

00:13:40.560 | It's just if you're looking at the odds of success and you're trying to find the

00:13:44.640 | highest odds of like, "What's the lever I can pull that when I pull it, it's

00:13:47.760 | actually going to make a difference?"

00:13:49.280 | For the huge majority of people, it's on the spending side of the equation.

00:13:52.720 | And that's how they can really move the needle in their life.

00:13:54.800 | And, you know, things that are more in your control are just so much more valuable.

00:13:58.160 | Like the expected value of something like that is so much more valuable than for

00:14:02.720 | most people to try to increase their income by a significant amount.

00:14:05.600 | So, like, why don't people want to do that?

00:14:08.320 | I think there's two reasons.

00:14:09.200 | One is what we talked about before, which is that when most people gain more income,

00:14:12.480 | they instantly want to say, "How can I spend this?"

00:14:14.480 | Because their view of money is the sole purpose of money is to buy stuff,

00:14:18.480 | which seems like a really rational statement.

00:14:20.960 | That's what money is.

00:14:21.680 | Money is to buy stuff.

00:14:22.720 | That's what it's for.

00:14:23.520 | That seems so obvious.

00:14:25.200 | And even when I say it, I'm kind of like, "Yeah, of course, that's what it's for."

00:14:27.920 | And so most people stop right there and they say, "Well, if I just got $1,000 to raise,

00:14:31.680 | I'm going to go spend $1,000 because that's what money is for."

00:14:34.240 | But I think once you view money as, "Oh, actually, this can give you independence

00:14:37.680 | if you save it and invest it, and this gives you wealth.

00:14:40.080 | Now you have control of your time.

00:14:41.200 | Now you can do whatever you want.

00:14:42.320 | Now when life throws a curveball at you, you're going to be okay."

00:14:45.600 | Then you start thinking about it a little bit different.

00:14:47.760 | And so if you don't have that little nuance on what money can do for you

00:14:51.440 | and the independence side of it, it makes savings much harder.

00:14:54.160 | Because you're saving money and you're saying, "What's the point of this?

00:14:56.880 | What am I saving it for if I'm not going to spend it?"

00:14:59.120 | That's how a lot of people think.

00:15:00.720 | Once you view it as, "I'm saving this so I can have control over my time,

00:15:03.680 | so I can live whatever life I want,"

00:15:05.600 | then I think it becomes quite a bit easier to save.

00:15:07.840 | So that's always the lens that I viewed it through when saving for myself.

00:15:10.400 | - Is there anything you've learned about psychology that helps people

00:15:14.160 | who have gone through that exercise of, "Yeah, I do want my freedom,"

00:15:17.760 | but struggle with stopping themselves from wanting more,

00:15:21.200 | stopping themselves from wanting the nicer car, the nicer house, or whatever it is?

00:15:25.680 | Is there any tactics that people can use to stop that feeling?

00:15:29.120 | - No, I don't know if there's any specific tactics.

00:15:31.840 | It's like the most natural thing in the world.

00:15:33.520 | And even myself, who writes a book about this topic,

00:15:36.640 | of course, it's tempting for my wife and I to say,

00:15:40.160 | "Hey, we gained a little bit of income from this or that.

00:15:42.720 | Should we go buy a nicer..."

00:15:44.160 | That temptation never goes away, ever.

00:15:46.320 | I think it's the most natural thing in the world.

00:15:48.240 | It's natural from a social level to try to show your friends and your co-workers

00:15:54.000 | and your spouse or your potential future spouses

00:15:57.120 | that you've made it in the world.

00:15:58.320 | That's the most natural thing in the world.

00:16:01.200 | Take your peacock feathers and flay them up and be like,

00:16:03.840 | "Hey, look at me, this is what I've done."

00:16:05.600 | That's the most natural thing in the world.

00:16:07.120 | And even if you're not thinking about it through the social sense,

00:16:10.080 | the idea that nicer stuff will make you happier is true to some extent.

00:16:14.160 | We just overestimate how much it's going to be true.

00:16:16.960 | So it's a really difficult thing.

00:16:18.800 | I think the people who find a way to do it

00:16:21.520 | are just the ones who are just totally comfortable in themselves and who they are

00:16:25.840 | and don't feel a lot of obligation or urge to try to gain the social ladder.

00:16:30.400 | They're comfortable with their friends and their spouses or their significant others.

00:16:33.840 | They're totally comfortable with that.

00:16:35.520 | And those people love them and appreciate them.

00:16:37.440 | And they just don't feel that much need to climb the social ladder.

00:16:40.240 | They're happy where they are.

00:16:41.440 | Those are the people that can really gain total control over their financial lives

00:16:44.960 | because they're not on just constant hamster wheel of trying to keep up with the Joneses.

00:16:49.760 | And the Joneses thing is such a huge problem

00:16:53.360 | because there are a lot of Joneses and some of them are extremely wealthy.

00:16:57.040 | So no matter how much money you gain,

00:16:59.040 | there's always someone who's making more than you.

00:17:01.600 | And if you're making 50 grand,

00:17:03.280 | and then you're looking up to the person who's making 100.

00:17:05.680 | And then once you make 100, you're looking up to the guy who's making 200.

00:17:08.400 | And that keeps going forever.

00:17:10.240 | That never ends.

00:17:11.200 | So I use the example in the book of like,

00:17:13.920 | if you are a professional baseball player,

00:17:16.000 | the minimum wage is about half a million dollars per year,

00:17:19.440 | which by any definition is rich.

00:17:21.520 | Like in the United States, you make half a million dollars a year.

00:17:23.600 | Like you're crushing it.

00:17:24.880 | You're like, "Congratulations, you made it. You're rich."

00:17:27.840 | But I guarantee you that every minimum wage baseball player

00:17:31.680 | in professional baseball does not consider themselves rich

00:17:35.280 | because there's people on their team who make $10 million a year.

00:17:37.840 | And the people who make $10 million might not feel that great

00:17:40.000 | because they're looking up to the players who make $30 million.

00:17:42.640 | And the guy who makes $30 million is looking at the hedge fund manager

00:17:45.040 | who's making $500 million.

00:17:46.800 | And the hedge fund manager who makes $500 million is looking at Jeff Bezos.

00:17:50.000 | Like that never ends.

00:17:52.000 | So people, once you realize...

00:17:53.600 | Like I use this quote in the book of a friend of mine who goes to Vegas every year.

00:17:57.520 | And one year, he walked in and he asked the dealer.

00:17:59.920 | He said, "Hey, what games do you play, Mr. Dealer?

00:18:02.640 | Like in Vegas, what games do you play?"

00:18:04.720 | And he said, "I don't play any games."

00:18:06.560 | He said, "The only game that you can win in Vegas is not playing.

00:18:09.680 | That's the only way that you can win in Vegas is to like walk out of the casino."

00:18:13.200 | And I feel like it's the same with that, like climbing the social ladder.

00:18:17.280 | There's no end point.

00:18:18.480 | So people are like, "I'm on this mission to win the game."

00:18:21.360 | It's like, no, you're never going to win the game.

00:18:22.880 | The game never ends.

00:18:24.240 | So when you realize the game never ends and it can't be beat,

00:18:27.040 | then for myself, it's different for everyone.

00:18:29.040 | But for myself, it's like, well, if you can't beat the game, I don't want to play the game.

00:18:32.160 | I'm going to try hard as I can not to play the game.

00:18:34.640 | That's not a tip or a trick or a tactic in how to do it.

00:18:38.400 | It's just a little bit different way of thinking about it.

00:18:40.960 | And I think it's such an ingrained part of human nature

00:18:43.920 | that it's never going to be the point where the majority of people will be able to achieve it.

00:18:48.320 | If you're mindful about the forces that are pushing you away from happiness with your money,

00:18:52.560 | maybe it's a little bit easier to wrap your head around.

00:18:54.400 | Do you think people can go too far to the other end?

00:18:57.520 | You mentioned the FIRE movement, which...

00:18:59.440 | I was actually in a documentary about the FIRE movement called "Playing with Fire."

00:19:04.320 | And I remember someone mentioning in the process of talking with lots of people that

00:19:09.360 | there's some people that like to wash their tinfoil, right?

00:19:11.360 | Like some extreme things to save small amounts of money.

00:19:14.720 | And I sometimes ask, and I've asked myself this question, it's like,

00:19:18.080 | "Can you go too far in that direction and end up with all this money that gives you all this

00:19:22.320 | freedom, but you spent so many years not actually enjoying life?

00:19:26.320 | And what happens when you go too far?"

00:19:28.640 | I think the answer is absolutely yes.

00:19:30.080 | And I think the biggest one is if you create this incredible frugal lifestyle,

00:19:35.120 | and it turns off your friends and families and significant others

00:19:39.280 | in a way that they start rejecting you for it.

00:19:41.520 | That's what people overlook.

00:19:43.040 | So people are like...

00:19:43.680 | They might be being honest with themselves when they say,

00:19:47.360 | "I would be happy living off of $4,000 a year, whatever it is."

00:19:51.760 | And they're honest with themselves, but their friends aren't.

00:19:55.280 | Their spouse isn't.

00:19:56.720 | Their boyfriend and girlfriend isn't.

00:19:58.160 | And then all of a sudden, this other part of your life that was probably the single

00:20:02.480 | most important part of your life, the people around you,

00:20:04.560 | your friends and families that you love start rejecting you for it.

00:20:07.280 | I've seen that happen a number of times, and it's devastating to the people.

00:20:10.560 | Because they're like, "Look, I was honest that I could live this life and be happy.

00:20:14.080 | But these people who I loved weren't on the same page.

00:20:16.960 | And now I've ruined my life over it."

00:20:18.880 | That's the biggest risk in these things is that you create an extreme plan that you're

00:20:23.120 | okay with, but other people are not.

00:20:24.560 | And it's a hard thing to wrap your head around.

00:20:27.280 | And I think there are also a lot of people that go down a path that is fun for a while,

00:20:32.480 | but gets old.

00:20:33.680 | It's fun to be super frugal for 12 months, but after three or four years, you're kind

00:20:38.000 | of over it.

00:20:38.400 | But it's become part of your identity, especially when there's a name behind it.

00:20:42.480 | "Fire Movement."

00:20:43.280 | I'm in the fire club.

00:20:46.160 | It's a tribe.

00:20:48.000 | And then to break off from the tribe is really difficult.

00:20:50.640 | So once it becomes an ingrained part of your identity, I think people find it hard to move

00:20:55.360 | on from, even if they're ready to move on from it.

00:20:57.120 | Yeah.

00:20:58.000 | No matter how deep you go down the path of saving and frugality, I think at the end of

00:21:02.720 | the day, you talked earlier, it's two sides of an equation.

00:21:06.480 | The money comes in, the money goes out, that's what you save.

00:21:09.280 | So I do still think it's important to think about what you do with the money you save.

00:21:13.440 | And when it comes to investing, I like to contrast athletes and investors.

00:21:17.280 | And it got me thinking, I have a lot of friends who played sports in college.

00:21:21.200 | They all knew it was really hard to be a pro athlete.

00:21:23.680 | So most of them chose other careers.

00:21:25.760 | And I talked to those same people who know that most active investors underperform, and

00:21:31.840 | yet all of them are always trying to invest and beat the market and pick stocks and compare

00:21:36.160 | things on what's the return.

00:21:37.840 | Why are people so rational in some areas and totally irrational when it comes to their

00:21:43.280 | abilities with money in the markets?

00:21:45.600 | I think there's a really easy answer to that question.

00:21:47.840 | And that's in professional sports, it's impossible to make it to the NFL by luck.

00:21:53.840 | You have to be skilled.

00:21:55.200 | You have to be physically skilled, legitimately skilled to make it there.

00:21:58.720 | But it is possible and happens all the time that people can be successful in the stock

00:22:03.440 | market by luck alone.

00:22:04.880 | So the fact that it's even possible is why people go into it.

00:22:08.400 | And a lot of them will just fool themselves.

00:22:09.920 | Maybe they had some sort of beginner's luck.

00:22:11.600 | They opened up a Robin Hood account and they doubled their money in six weeks.

00:22:15.280 | And they think to themselves, look, this is so easy.

00:22:17.840 | And not only is it easy, but I have the skill.

00:22:20.640 | Maybe other people can do it.

00:22:21.840 | But if they know only 10% of people can beat the market, everyone thinks they're part of

00:22:26.720 | that 10%.

00:22:27.040 | And especially young men are the most susceptible to assume, even if they know the odds.

00:22:34.080 | Like a lot of people think they're being rational because they're like, oh yeah, I know the

00:22:36.640 | odds.

00:22:37.120 | Only 10% of investors who try to beat the market can do it.

00:22:39.600 | But I'm one of them.

00:22:40.800 | And since it's possible to be in that group by luck alone, you have a lot more people

00:22:45.600 | chasing it.

00:22:46.400 | The other aspect of this is that if you're trying to get into professional sports, it's

00:22:49.840 | really obvious whether you made it or not.

00:22:51.680 | You got drafted or you didn't.

00:22:53.040 | Black and white, clear as day.

00:22:55.200 | But the huge majority of investors who I've talked to, active investors, particularly

00:22:59.440 | if you're not a professional investor, you're just an individual investor, don't accurately

00:23:03.840 | track the returns.

00:23:05.200 | And if you really ask them, how have you performed?

00:23:08.160 | A lot of them, if they're honest about it, they don't really know.

00:23:10.560 | They're not auditing their annual returns and comparing it to the appropriate benchmark

00:23:15.600 | every year.

00:23:16.000 | A lot of them do it and maybe they think they're outperforming, but if they're honest with

00:23:19.200 | themselves on an after-tax basis, they're actually not.

00:23:21.760 | Or they're willfully blind to it because they're afraid to accurately calculate it.

00:23:26.480 | And in the meantime, they like what they're doing.

00:23:28.800 | And maybe that's fine.

00:23:30.000 | If you like actively investing, even if you're underperforming, but you love it, you like

00:23:34.880 | the strategy, you like the hunt, you like the analysis.

00:23:37.520 | Well, that's great.

00:23:38.320 | That's a cool little hobby that you have.

00:23:40.240 | No problem with that whatsoever.

00:23:41.360 | But it's much easier to fool yourself that you can be a great investor than it would

00:23:46.960 | be in sports, where it's just obvious, clear as day, you either made it or you didn't.

00:23:50.960 | It seems like with every business, you get to a certain size and the cracks start to

00:23:55.760 | emerge.

00:23:56.320 | Things that you used to do in a day are taking a week and you have too many manual processes

00:24:01.440 | and there's no one source of truth.

00:24:03.520 | If this is you, you should know these three numbers, 37,000, 25, 1, 37,000.

00:24:10.960 | That's the number of businesses which have upgraded to NetSuite by Oracle.

00:24:14.400 | And I'm excited to partner with them for this episode.

00:24:16.960 | NetSuite is the number one cloud financial system, streamlining accounting, financial

00:24:21.200 | management, inventory, HR, and more.

00:24:23.600 | 25, NetSuite turns 25 this year.

00:24:26.880 | That's 25 years of helping businesses do more with less, close their books in days,

00:24:32.000 | not weeks, and drive down costs.

00:24:34.400 | And one, because your business is one of a kind, so you get a customized solution for

00:24:40.000 | all your KPIs in one efficient system with one source of truth.

00:24:44.560 | Manage risk, get reliable forecasts, and improve margins.

00:24:48.560 | Everything you need to grow all in one place, which I can tell you from all the companies

00:24:52.800 | I've run, makes everything so much better.

00:24:55.600 | So right now, download NetSuite's popular KPI checklist, designed to give you consistently

00:25:01.360 | excellent performance, absolutely free at allthehacks.com/netsuite.

00:25:07.360 | That's allthehacks.com/netsuite to get your own KPI checklist.

00:25:12.080 | That's allthehacks.com/netsuite, N-E-T-S-U-I-T-E.

00:25:20.880 | There is nothing I love more than learning that something I enjoy is actually so good

00:25:25.120 | for you, and nothing showcases that better than Pu-Erh tea.

00:25:28.720 | It has so many health benefits, and I think one of the best and easiest ways to consume

00:25:32.720 | it is from our sponsor today, Peak Tea.

00:25:35.680 | Peak's Pu-Erh teas are all cold extracted using only wild harvested leaves from 250-year-old

00:25:41.840 | tea trees, rich in minerals, theraflavins, and catechins.

00:25:46.240 | Then everything is triple toxin screened for pesticides, heavy minerals, and toxic mold

00:25:51.280 | commonly found in plants.

00:25:53.360 | And Peak's products are so easy and zero prep, because they're all in pre-measured quantities

00:25:58.800 | that dissolve in cold or hot water in seconds, and are so travel-friendly.

00:26:03.840 | They have so many products, but lately I've been alternating between the green Pu-Erh

00:26:08.320 | for mental clarity and energy, and the black Pu-Erh, which helps kickstart digestion and

00:26:13.120 | metabolism with a rich, earthy flavor that is so good, and probably one of my favorite

00:26:18.240 | things to drink.

00:26:19.560 | And if you need another reason, search for all the amazing research-backed benefits of

00:26:23.160 | polyphenols for your gut microbiome, heart, blood sugar, and more, and then be happy that

00:26:28.080 | Pu-Erh is more concentrated in polyphenols than all other teas in the world.

00:26:32.640 | But you don't even have to take my word, or do any research, because Peak offers free

00:26:36.600 | U.S. shipping, free returns, and a money-backed guarantee.

00:26:40.240 | And for a limited time, you can get up to 15% off and a free quiver with 12 tea samples

00:26:45.880 | at my link at allthehacks.com/peak, that's P-I-Q-U-E.

00:26:51.900 | So check them out today at allthehacks.com/peak, P-I-Q-U-E.

00:26:58.600 | And how do you help people who, you know, like that, they're having fun, they might

00:27:03.260 | be making some money, or losing lots of money, and help them understand why that might not

00:27:09.880 | be the best long-term strategy if their goal is to pursue this independence and be more

00:27:15.840 | confident getting there?

00:27:17.760 | This might be a disappointing answer, but I found that for the large majority of these

00:27:22.960 | investors, you naturally end up on one side of the equation.

00:27:26.120 | And once you're on that side of the equation, it's hard to convert you to the other side.

00:27:29.540 | You know, that's not to say that's not true for everyone, but a lot of people, if you

00:27:32.560 | are a hardcore active investor, the odds that you will ever be persuaded to go on to the

00:27:37.320 | passive side, even if your returns are horrendous, are not that great.

00:27:41.120 | I think for a lot of people, they're scratching, when they're actively investing, they're scratching

00:27:44.960 | a natural itch that they have, and that itch needs to be scratched.

00:27:48.240 | And if they were passively investing, they would have this itch that would drive them

00:27:51.640 | crazy.

00:27:52.720 | And therefore, that's, so they're always going to do it.

00:27:54.200 | If there is a way that, I've seen a lot of financial advisors do this, is they say, "Okay,

00:27:59.080 | I know you have this itch that needs to be scratched, you need to trade, you need to

00:28:02.560 | actively invest because that's part of your personality.

00:28:05.000 | Can we put 70% of your net worth in a long-term diversified investing plan, and then you can

00:28:11.080 | trade with 10, 20, 30% so that you can, look, you have this core that's going to, this is

00:28:16.960 | kind of, you know, this is the big thrust that's going to get you into retirement, but

00:28:21.240 | you can still trade.

00:28:22.240 | We're not going to take that away from you."

00:28:23.480 | I think that's actually, like, if you're thinking about it rationally, that's the wrong thing

00:28:27.320 | to do, because either one strategy works or it doesn't, so why are you going to straddle

00:28:31.600 | both?

00:28:32.600 | But for a lot of investors, I think that's the right thing to do, because it keeps them

00:28:35.640 | engaged.

00:28:36.640 | And rather than just getting too bored with their investments, they're like, "Look, I

00:28:39.960 | still have this pocket where I can day trade and buy these stocks, and I feel great about

00:28:43.840 | it."

00:28:44.840 | So, just giving them that outlet to scratch that itch, I think, is really important, and

00:28:47.640 | probably the best way to try to, if you were to convert people from one side to the next.

00:28:51.600 | But the other thing I would say here that's really important is, I'm not a passive zealot.

00:28:55.640 | I'm not one of the people who says, "Everyone should index, and no one can beat the market,

00:28:59.560 | and you shouldn't even try."

00:29:01.520 | Those investors exist, but I'm not one of them.

00:29:03.800 | I've become much less judgmental as an investor over the last decade, when I just realized

00:29:08.920 | everyone has different goals, different skills, different needs, different desires.

00:29:13.320 | They view the world through a different lens.

00:29:14.800 | Like, I view the world through the life that I've lived, and only through that lens.

00:29:19.080 | It's the only world that I know is what I've seen.

00:29:21.160 | And the world that I've seen is different from the world that you've seen, and the world

00:29:24.360 | that you and I have seen is very different from different generations, people who live

00:29:27.460 | in different countries.

00:29:28.460 | Like, everyone is different.

00:29:29.540 | So to say that there's one right way to invest is something that I probably used to believe,

00:29:34.200 | but I've become much less judgmental as the years go on.

00:29:36.560 | Yeah.

00:29:37.560 | And you mentioned in the book a lot that people, even that might be similar, similar geography,

00:29:41.800 | similar income, similar job, might be trying to play a different game.

00:29:44.880 | They might be anticipating more money from inheritance.

00:29:47.960 | They might be trying to earn some short-term money, or really focused on a different goal.

00:29:52.560 | So it's interesting to hear how people compare themselves to people that might be in totally

00:29:57.900 | different circumstances.

00:29:58.900 | Yeah.

00:29:59.900 | I think about myself in college.

00:30:01.580 | There was a social aspect of wearing nicer clothes and trying to put the peacock feathers

00:30:06.800 | up again.

00:30:07.800 | When I was in college, when I was looking for a girlfriend, when I was looking for a

00:30:10.760 | wife, when I was in that market, that was really important.

00:30:12.880 | Now that I'm happily married and my wife loves me till death do us part, it's a lot less

00:30:16.880 | important for me.

00:30:17.880 | But even myself, over the course of my relatively short life, the game has changed substantially

00:30:24.160 | in terms of who I want to be, who I want to show the world that I am.

00:30:27.200 | That has changed substantially in my own life.

00:30:29.360 | So if it changes within your own life in a 15-year period, then think about people who

00:30:33.720 | are different generations, people who live in different countries, different amounts

00:30:37.020 | of rich countries, poor countries.

00:30:39.280 | Everyone thinks about these things totally different.

00:30:41.340 | The other thing I would say is a couple of years ago, I was in Australia where they hadn't,

00:30:44.360 | at the time, they hadn't had a recession in 29 years.

00:30:47.400 | 29 years with no recessions.

00:30:49.360 | So virtually every adult had never seen a recession, ever.

00:30:54.360 | And then you compare that to the United States where 2001, 2008, we had these massive recessions

00:31:00.360 | that reshaped all of society.

00:31:03.260 | And Australians, who of course, just as smart as us, have the same information as us, they're

00:31:07.840 | the same people, they had a completely different view on what risk is.

00:31:13.000 | And at the time, Americans were very cognizant of like, the world can fall apart at any moment,

00:31:17.840 | you can lose everything, you can just poof.

00:31:20.000 | And Australians didn't, just didn't have that view.

00:31:24.040 | And it's not that we were right and they were wrong, that's not the right way to look at

00:31:27.720 | it.

00:31:28.720 | It's just, we're equally smart people, the same people that have very different views

00:31:31.680 | on the world just by the dumb luck of where we were born.

00:31:34.400 | Yeah, do you think there's any way that people can start to, I don't know, force themselves

00:31:39.680 | to learn these lessons?

00:31:41.320 | I know, anytime you're looking to start investing, you get often asked or find things on the

00:31:46.240 | internet say, "Figure out whether you're comfortable with a 30% downturn."

00:31:50.400 | And it's easy if you invested all of your money and that downturn happened and you got

00:31:54.680 | to know, "Oh, here's what I did."

00:31:56.840 | But for many people, these things happen every 10 years or in Australia, every 30 years.

00:32:01.920 | How can you start to understand your own tolerance for this before you see it?

00:32:07.360 | Or can you?

00:32:08.360 | I don't, I think realistically, you probably can't until you've done it because there's

00:32:13.040 | no formula.

00:32:14.040 | It would be one thing if it was like, "Oh, you just need to know the formula, just go

00:32:17.600 | read the book and then it'll tell you what to do."

00:32:20.240 | But nobody knows who they are until they've been in the trenches.

00:32:24.200 | No one understands their own unique personality.

00:32:26.360 | And there are a lot of people who are a very calm personality, even like an even disposition,

00:32:33.160 | they don't panic very much in life, but they've never experienced losing half their money

00:32:37.040 | in the stock market.

00:32:38.160 | And when they do, they realize that's the trigger that'll make them lose their minds.

00:32:42.440 | So even if you are very introspective about who you are in general, I don't think people

00:32:46.760 | understand who they are financially until they've experienced some of these big declines.

00:32:52.320 | And I've experienced 2008, I experienced March of 2020 last year, but there's a lot of things

00:32:57.300 | financially that I haven't experienced as well.

00:32:59.800 | I have not, and you have not, lived through a period of sustained high inflation that

00:33:05.440 | hasn't existed since the mid, late 1970s.

00:33:09.400 | So I can research that, I can try to be empathetic with people who lived through it, I can try

00:33:14.320 | to put myself in their shoes at the time, but until I've lived through it, I can't reasonably

00:33:18.960 | say that I know how I would respond to it.

00:33:22.280 | And I think if we're being honest, that's true for a lot of people.

00:33:25.080 | Like virtually no one in the developed world, at least, had any idea how they would respond

00:33:30.440 | to a viral pandemic until last February.

00:33:33.800 | It just wasn't something that was necessarily on our mind.

00:33:37.320 | And I think a lot of people responded in ways that they wouldn't have fathomed before.

00:33:41.680 | You know, it was completely normal before last February.

00:33:44.960 | If you're on a plane and someone's coughing, 99% of people, not a big deal.

00:33:48.960 | Someone's coughing, it's not a big deal.

00:33:50.680 | Now going forward, if someone coughs on a plane, people are going to lose their minds.

00:33:54.880 | They're going to have a totally different view that they never would have considered

00:33:58.560 | before it happened.

00:33:59.560 | I'll give you one very extreme example of this, and I have to preface this with like,

00:34:03.320 | this is the most extreme example.

00:34:05.520 | There's a book called What We Knew, and it's a book interviewing German civilians on what

00:34:12.120 | they knew during World War II, during when the Nazis were in power.

00:34:16.160 | What did the civilians know?

00:34:17.560 | Not the guards at Auschwitz, the German civilians.

00:34:20.560 | What did they know?

00:34:21.560 | What was going on?

00:34:22.640 | And there's this passage in the book where this German civilian said, "Look, when Hitler

00:34:25.180 | came to power in 1933, the Germans were fully behind them.

00:34:29.000 | We were like, rah, rah, like Hitler, this is great."

00:34:32.120 | And they said, "Why?

00:34:33.120 | Like, I don't understand.

00:34:34.120 | Can you explain why you were so excited about him?"

00:34:36.520 | And the civilian said, "Look, in the 1920s, Germany lost everything.

00:34:40.720 | The economy fell apart.

00:34:42.240 | We lost everything.

00:34:43.240 | No one had a job.

00:34:44.240 | We lost all of our wealth.

00:34:45.240 | And Hitler came along and said, 'I'll give you a job.

00:34:47.720 | We're going to rebuild the country.

00:34:48.720 | We're going to bring back German pride, et cetera, et cetera.'

00:34:51.040 | And in that situation where people were so desperate for anything, they looked at him

00:34:55.360 | and said, 'Great, that's my guy.'"

00:34:57.320 | And they're looking at this in hindsight and saying, "Look, when people are in a desperate

00:35:00.300 | situation where they don't have any money, they lost all their jobs, they lost everything,

00:35:06.200 | people will cling to things in that situation that they never would have imagined.

00:35:10.520 | You'll cling to the craziest person that comes across if he's willing to give you a little

00:35:14.440 | bit of hope."

00:35:15.440 | That's the most extreme example, but nobody knows what they're going to do or how they're

00:35:19.280 | going to react in the heat of the moment when things are really uncertain, when you've lost

00:35:23.960 | a lot of money, when you've lost your job.

00:35:27.240 | When things are calm and prosperous, people don't know how they're going to respond during

00:35:32.040 | those heated moments until you've actually experienced it.

00:35:34.540 | Yeah.

00:35:35.540 | I think in the pandemic, I work at Wealthfront and we have a passively managed portfolio

00:35:40.280 | and we have risk tolerance questions and we ask, "How are you going to feel if the portfolio

00:35:45.520 | is down?"

00:35:46.520 | And people overestimate what they think.

00:35:48.440 | They say, "Well, if the market's down 20%, I'm going to buy more because it's on sale."

00:35:52.480 | But one of the interesting things that happened during the pandemic was some people made the

00:35:58.200 | complete different decision.

00:35:59.560 | And not because they didn't think the market was on sale, because it wasn't a 20% down.

00:36:04.760 | It was a 20% down in the middle of a pandemic where some people are shouting from television

00:36:09.240 | that the world could end and half the world could die and all of these extreme things.

00:36:15.040 | And that feels very different than the academic exercise of "If something goes down 20%, what

00:36:20.360 | do you do?"

00:36:21.480 | And I personally think the media makes it even harder to know what to do because it's

00:36:27.200 | really extreme.

00:36:28.280 | So that, to me, was a great example of the risk tolerance questionnaire isn't sufficient

00:36:34.880 | in isolation.

00:36:35.880 | You're absolutely right.

00:36:37.200 | Because if you were to ask me, "Morgan, how would I feel if the market fell 30%?"

00:36:40.440 | If you were to ask that question, when I'm trying to picture that, I imagine a world

00:36:46.000 | where everything is exactly the same today, except stock prices are 30% cheaper.

00:36:51.000 | And in that world, it seems like an opportunity.

00:36:53.320 | Everything is the same except cheaper stock prices.

00:36:55.280 | That's a good opportunity.

00:36:56.280 | But that's not how it works.

00:36:57.720 | The reason the market falls 30% is because the banking system is about to collapse like

00:37:02.440 | 2008, where there's a pandemic that might kill your entire family.

00:37:05.920 | And in that context, totally different scenario.

00:37:08.600 | And that's why people are just, in general, pretty poor at forecasting the risk tolerance

00:37:13.880 | and how they might behave during the next big decline.

00:37:16.680 | You're getting major market declines just thinking of poor investment decisions, which

00:37:21.480 | I think right now, there's this big rise of active trading.

00:37:24.480 | And I'm sure you have opinions like I do about the gamification of investing and what that

00:37:30.200 | causes people to do.

00:37:32.080 | But for people who are making decisions that end up being wrong, I think something I took

00:37:36.000 | away from the book and I've seen in practice is that you just will be wrong.

00:37:41.680 | And I think something that I'd love you to talk a little bit about is how can people

00:37:45.080 | get comfortable with that concept, which is like, if you're a doctor, you don't want to

00:37:50.040 | be okay being wrong 20-30% of the time.

00:37:52.760 | But as an investor, that's okay.

00:37:55.000 | And that's expected.

00:37:56.000 | Yeah.

00:37:57.000 | Obviously, if you're a pilot, then you have to be right 100% of the time.

00:38:01.160 | You can't say, "I really botched this flight, but I got next time to come."

00:38:04.920 | But investing is not like that.

00:38:06.640 | There's a thing that Benjamin Graham talked about in one of his books where he said, "Investors

00:38:10.120 | need to understand the difference between a positive and a negative art."

00:38:13.640 | And he said, "Investing in stocks was a positive art, because all you need to do to do well

00:38:17.940 | is make sure that you own the good ones."

00:38:20.040 | If you pick 100 stocks and 80 of them suck, but five of them are the next Apple, the next

00:38:26.560 | Amazon, the next Facebook, you're going to do incredible.

00:38:28.960 | Even if 80% of the ones you picked go bankrupt.

00:38:31.640 | So investing is a positive art.

00:38:33.080 | He said, "Owning bonds is a negative art, because what you need to do to do well as

00:38:38.040 | a bond investor is make sure that you don't own any of the bad ones.

00:38:41.400 | Any of the bonds that are going to default, you just need to avoid all of those."

00:38:44.800 | So it's important to realize, is what you're doing in life, and this applies to everything

00:38:48.560 | in life, like careers and friends, is it a positive or a negative art?

00:38:52.300 | Are you trying to find, is it just important that you find the one or two good ones?

00:38:55.800 | Or is it important that you really avoid the one or two bad ones?

00:38:59.260 | And investing in the stock market, again, is a positive art, which means that it is

00:39:03.400 | completely normal in every scenario, no matter how you're investing.

00:39:06.840 | If you're an index fund investor, if you're a stock picker, if you're a trader, whatever

00:39:09.560 | it is, that you're going to make the majority of your lifetime returns from a small minority

00:39:14.200 | of the stocks that you pick.

00:39:16.000 | Even in an index fund.

00:39:17.000 | I mean, the stuff that's pretty incredible is that in a 40-year period from 1980 to 2020,

00:39:23.260 | the Russell 3000 Index, which is an index of large stocks in the United States, of 3,000

00:39:29.000 | companies in the United States, 40% of the components in the Russell 3000 effectively

00:39:34.320 | went out of business over this 40-year period, 40% of the components.

00:39:38.280 | But the index itself had average annual returns of like 11% per year.

00:39:43.200 | The index did really well, but 40% of the companies in the index went out of business.

00:39:48.440 | And that's in an index fund.

00:39:49.640 | That's not like a crazy stock picking strategy.

00:39:51.880 | Even in an index fund, almost half of the companies that you invest in won't make it.

00:39:56.040 | And that's fine.

00:39:57.040 | That's totally normal.

00:39:58.040 | There's nothing wrong with that.

00:39:59.480 | And the other example I use in the book is Benjamin Graham himself was a very successful

00:40:04.200 | fund manager over the course of his life, but 100%, and he writes about this, he was

00:40:09.320 | open about this, 100% of his career success is owed to one investment that he made, Geico.

00:40:15.440 | If you take his career track record and remove Geico, his track record is completely average.

00:40:21.280 | And Buffett has talked about this as well, too, from Berkshire Hathaway, if you take

00:40:23.880 | out the top five or 10 investments they've ever made, Berkshire's track record is average.

00:40:28.620 | And so that's how successful investing works.

00:40:30.600 | No matter what your strategy is, you don't need to be right all the time.

00:40:34.480 | You just have to be right some of the time.

00:40:36.600 | And I think a big part of this is if you invert that is that good investing is not about consistently

00:40:41.280 | making great decisions because nobody does.

00:40:44.520 | It's about consistently not screwing up so much that you're kind of pushed out of the

00:40:48.200 | game.

00:40:49.600 | It's consistently making sure that you don't make these catastrophic blunders that are

00:40:53.000 | going to ruin everything.

00:40:54.000 | But if you can stick around long enough and make enough bets or just have enough annual

00:40:58.600 | returns under your belt, you're probably going to do well over time, even if you're going

00:41:01.520 | to experience not just some, but a significant amount of underperformance and loss during

00:41:05.760 | that period.

00:41:06.760 | And one of the ways to think about this, there's a study from Morningstar a couple of years

00:41:09.920 | ago that looked at the best performing mutual funds of all time.

00:41:14.120 | These are just cherry picking with hindsight what mutual funds had the best returns over

00:41:17.820 | like a 30 year period.

00:41:19.480 | And the common denominator of the top three funds, I forget what the funds were, but the

00:41:23.680 | common denominator that they shared is that they spent almost 40% of the time of their

00:41:28.600 | life underperforming their benchmark.

00:41:31.040 | So these are cherry picking with hindsight the best funds.

00:41:34.760 | And if you actually own these funds, almost half the time you are underperforming your

00:41:39.320 | benchmark.

00:41:40.640 | So it's not easy for people to wrap their heads around that, that tails drive everything,

00:41:45.240 | that it's just the kind of the tail ends of the bets that you make and the years that

00:41:49.320 | you're around that are going to drive everything.

00:41:52.400 | But that's how markets work over time, whether it's for stock picking or just long-term index

00:41:56.000 | investing.

00:41:57.000 | Yeah, the two takeaways for me is if you're picking something that has the long-term nature

00:42:02.880 | of underperforming 40% of the time, you need to be long-term in the way you pick it and

00:42:07.760 | take a bet that can pay off over time.

00:42:10.960 | And you talk about compounding and I think it's something that as much as it's been drilled

00:42:14.600 | in our heads our whole lives, it's something that you still need to kind of recognize.

00:42:18.840 | And then the second is that you need to make multiple bets.

00:42:22.680 | I hear this in Silicon Valley a lot when people say, "I want to start angel investing."

00:42:27.000 | And everyone says, "Okay, well, if you want to do that, you need to one, make enough bets

00:42:31.080 | that you might find something that succeeds and that hit rate is so low that you need

00:42:34.920 | to have enough money to make 20-30 bets.

00:42:37.240 | But you also need to have so much money that angel investing isn't your whole portfolio

00:42:41.080 | because you might not get those lucky.

00:42:43.600 | You might not."

00:42:44.600 | And so I think when you can take the approach of lots of things for a long time, that's

00:42:50.280 | great.

00:42:51.280 | But taking the approach of, "I'm going to pick one stock and try to make money this

00:42:54.200 | year," I think it gets risky.

00:42:56.240 | And I feel like we've kind of gamified that in recent past.

00:42:59.040 | I feel like for all investing, what you're trying to do is just put the odds of success

00:43:02.040 | in your favor.

00:43:03.880 | And the way that you're going to do that in a world where tails drive everything, the

00:43:08.240 | way to put the odds of success in your favor is to be taking a lot of bets and to be sticking

00:43:12.560 | around for a long period of time.

00:43:14.200 | The more bets you have, the longer you're sticking around, the higher the odds that

00:43:17.800 | you're going to end up owning the great companies and you'll be around during the years that

00:43:22.240 | they achieve all of their returns.

00:43:24.280 | And you're going to spend a lot of time where those companies aren't performing, the market

00:43:27.280 | isn't performing.

00:43:28.280 | But if you stick around long enough and if you have enough bets, the odds fall firmly

00:43:31.920 | in your favor.

00:43:32.920 | Yeah.

00:43:33.920 | One framework that a really good friend of mine gave me, because inevitably you're going

00:43:37.040 | to make a bad decision when it comes to your money.

00:43:39.300 | He always asks me, he's like, "Hey, but wait, I know you're beating yourself up for making

00:43:43.000 | the wrong investment or doing the wrong thing.

00:43:45.400 | But did you make the right decision with the information you had at the time?"

00:43:48.520 | And in one example, it was, "I want to make this thing a higher percentage of my portfolio.

00:43:54.260 | And I chose a day to do that, where the next day it dropped significantly."

00:43:59.120 | And he goes, "Yeah, but at the time, was that part of your strategy?"

00:44:02.200 | I was like, "Yes."

00:44:03.200 | And he's like, "Well, you made the right decision and beat yourself up when you make bad decisions

00:44:06.720 | with information, but don't beat yourself up when you make the right decision, but it

00:44:10.320 | goes wrong."

00:44:11.320 | Yeah, completely.

00:44:12.320 | And we only know one version of history, the version that happened.

00:44:16.320 | And if we're just looking at a short period of time over the last 12 or 16 months, we

00:44:20.560 | know the version of history that happened, which was the government came out with trillions

00:44:25.240 | of dollars of stimulus packages.

00:44:26.880 | We created incredible vaccines that were distributed very quickly and et cetera, et cetera.

00:44:32.100 | That's the history that we know, but it could have been so much different.

00:44:35.400 | It could have been that Washington had a bunch of partisan squabbles and there was no stimulus

00:44:39.160 | package.

00:44:40.160 | We didn't make vaccines.

00:44:41.440 | You could easily imagine a world where economically and health wise, the world completely collapsed

00:44:48.600 | last year.

00:44:49.920 | You could easily imagine that occurring.

00:44:51.720 | And if that world occurred, then the people who sold their stocks last March would look

00:44:55.360 | like geniuses.

00:44:56.640 | And that world easily could have occurred.

00:44:58.840 | Just the fact that it didn't doesn't mean that we should ignore the fact that it easily

00:45:02.320 | could have.

00:45:03.580 | That's true for, I think, 2008 as well.

00:45:06.320 | You can so easily imagine a world where after Lehman Brothers collapsed, Merrill Lynch,

00:45:12.280 | and then AIG, and then Citigroup, and then Bank of America all collapsed as well.

00:45:16.840 | And in that world, which so easily could have happened, we probably would have been looking

00:45:20.080 | at the second version of the Great Depression.

00:45:22.960 | That didn't happen, but it so easily could have.

00:45:25.560 | So I think just to your point, when people make a decision with the information that

00:45:29.440 | they have at their time, based off of the consequences of what might happen in these

00:45:34.800 | situations in the future, I think it's easy to beat yourself up, because all we have now

00:45:39.000 | is a version of history that happened.

00:45:40.480 | But I think it's really important.

00:45:41.920 | I think the smartest thinkers are totally comfortable looking at the histories that

00:45:46.200 | easily could have happened and how they prepared for them, even if in hindsight, it looks like

00:45:50.760 | it wasn't the best decision.

00:45:52.640 | With the information that you had at the time, it may have actually been a great decision.

00:45:58.080 | Sometimes the smallest changes make the biggest impact, and trade coffee is a great addition

00:46:03.120 | to your new year routine.

00:46:04.880 | And I am so excited to be partnering with them today.

00:46:07.480 | Trade is a subscription service we've been using for over a year that sources the best

00:46:11.640 | coffee across the country and brings it straight to your doorstep.

00:46:16.040 | They've built relationships with over 50 local roasters so you can enjoy their craft from

00:46:20.560 | the comfort of your own home at a fraction of the cost of going out for coffee.

00:46:25.520 | There's multiple ways to experience coffee with trade.

00:46:28.560 | Sign up for a subscription or try one of their starter packs today.

00:46:32.440 | It's been so convenient for us to have coffee just show up exactly when we need it.

00:46:36.920 | And over the past year, we've gotten so many great coffees from trade.

00:46:40.840 | But this last bag of beans from Drink Coffee Do Stuff in Tahoe, it's called Bark the Moon

00:46:46.120 | and it's so delicious.

00:46:48.160 | So jumpstart this year by signing up for a trade subscription.

00:46:51.360 | Right now, trade is offering a free bag with select subscription plans when you visit allthehacks.com/trade.

00:46:59.160 | That's allthehacks.com/trade for a free bag with select subscription plans, allthehacks.com/trade.

00:47:09.040 | Do you all remember episode 122 when I spoke to Chef David Chang about leveling up your

00:47:13.880 | cooking at home?

00:47:15.280 | If not, definitely go back and give it a listen.

00:47:17.600 | But one of his top hacks was using the microwave more.

00:47:20.880 | I'll admit I was a skeptic at first, but after getting a full set of microwave cookware from

00:47:26.120 | AnyDay, I'm a total convert and I'm excited to partner with them for this episode.

00:47:30.680 | AnyDay is glass cookware specifically designed to make delicious food from scratch in the

00:47:35.480 | microwave and honestly, using it feels like a kitchen cheat code because it speeds up

00:47:40.840 | and simplifies the process so much.

00:47:43.440 | The cookware is 100% plastic free and you can cook, serve, store, and reheat all in

00:47:48.960 | the same dish that happens to be dishwasher, freezer, and oven safe too.

00:47:53.720 | And if you need a recipe suggestion to kick off your AnyDay adventure, I highly recommend

00:47:58.260 | David Chang's Salmon Rice.

00:47:59.840 | It is so good.

00:48:02.080 | And if you haven't checked out the Matte Black Ayo Collection they launched last year, you

00:48:06.600 | have to check it out.

00:48:08.320 | So to get 15% off our new favorite cookware, go to allthehacks.com/anyday.

00:48:13.320 | Again, that's allthehacks.com/anyday for 15% off.

00:48:21.760 | I just want to thank you quick for listening to and supporting the show.

00:48:25.580 | Your support is what keeps this show going.

00:48:28.320 | To get all of the URLs, codes, deals, and discounts from our partners, you can go to

00:48:33.360 | allthehacks.com/deals.

00:48:36.400 | So please consider supporting those who support us.

00:48:39.320 | Yeah.

00:48:40.320 | I mean, you wrote in the book that the most important economic events of the future, things

00:48:43.880 | that move the needle the most, are things that history gives us no guide about.

00:48:47.800 | They're unprecedented.

00:48:48.800 | Like what we saw last year.

00:48:50.800 | Knowing that, how do we use history as a guide for what to expect?

00:48:55.120 | We always have the disclosure, past performance does not reflect future gains.

00:48:58.920 | But so much of investing is, well, the stock market generally goes up, so we should invest

00:49:03.960 | in it.

00:49:04.960 | Jason Zweig is a great writer from the Wall Street Journal, made this point one time that

00:49:10.160 | it's not that investors don't learn from history, it's that they learn too precise a lesson

00:49:14.440 | from history.

00:49:15.440 | So his example was after the dot-com bust, the lesson that people learned was when the

00:49:20.880 | P/E ratio exceeds 30, the market is too expensive.

00:49:24.740 | That's a lesson that people took away.

00:49:26.600 | But the actual lesson from the 1990s was overconfidence leads to trouble.

00:49:31.320 | So people learn, they just learn a very precise lesson.

00:49:35.120 | And since they learned a precise lesson, what they should have learned was overconfidence

00:49:39.560 | leads to trouble, but they didn't learn that lesson.

00:49:42.060 | So they took their money and they went and started flipping condos in Miami or whatever

00:49:45.480 | it was.

00:49:46.480 | So when you learn, when you look at history and you learn really precise lessons, they're

00:49:50.240 | not going to teach you much about the future.

00:49:52.040 | Because like you said, the biggest events that's going to shape the rest of our lives

00:49:55.680 | are surprises that you and I or no one else can be talking about today.

00:49:58.920 | So to me, the way to learn from history is looking back and taking the biggest, broadest

00:50:03.560 | 30,000 foot level views and takeaways about human behavior, about how people respond around

00:50:10.080 | risk and greed and fear and overconfidence and surprises, like how do people behave around

00:50:15.820 | those events?

00:50:16.820 | Not the very specific granular takeaways.

00:50:18.800 | I mean, like if you were to look at the last 12 or 16 months, you can have a lot of specific

00:50:24.180 | takeaways about supply chains and we should have had more N95 masks and the CDC should

00:50:29.120 | have had better preparedness, et cetera.

00:50:30.780 | Those are like really specific takeaways.

00:50:32.680 | And depending on what your job is, those might be good takeaways.

00:50:35.580 | But for most people, the most important lesson in the last 16 months is there are things

00:50:40.800 | that can happen in the world that you're never thinking about that can completely upend all

00:50:44.680 | of your assumptions about the future.

00:50:46.560 | Whenever you're surprised in a situation like we all have been in the last 16 months, the

00:50:50.440 | best takeaway is that the world is surprising.

00:50:53.320 | It's not to look at what happened and saying, "How can we make sure this never happens again?"

00:50:57.040 | It's looking at the situation and saying, "A surprise is going to happen again."

00:51:01.360 | And I think once you do that, then financially, it pushes you much more towards having room

00:51:07.300 | for error in your finances.

00:51:09.200 | If I knew all the risks in the future, I would be able to plan around that really effectively.

00:51:14.580 | I would know that in 2023, there's going to be a recession that starts in February, so

00:51:18.900 | I'm going to have this cash set aside for that.

00:51:20.900 | But nobody knows that.

00:51:22.340 | And once you realize that we don't know what the future holds, it makes you much more comfortable

00:51:25.740 | being like, "I have this big chunk of cash sitting here and I don't know what it's for.

00:51:29.780 | I don't know what I'm going to need it for.

00:51:31.100 | I don't know what I'm going to use it for."

00:51:32.920 | But I'm confident that at some point in the future, the world is going to break in some

00:51:37.180 | way that I can't forecast or predict right now, but the world's going to break in some

00:51:40.500 | way and I'll be glad it's there.

00:51:42.900 | Once you become just a little bit more open and flexible with that room for error in your

00:51:46.900 | finances, I think that's the only way that you can navigate a world where risk is what

00:51:50.620 | we don't see.

00:51:51.620 | Yeah.

00:51:52.620 | You started this whole conversation off saying that the basics of finance, the models, the

00:51:57.660 | formulas are what we teach in school because it's way harder to teach all of this stuff.

00:52:01.540 | And you just mentioned a lot of the history, you have to interpret it differently.

00:52:05.620 | Which makes me question, is there a path towards educating people more about this earlier?

00:52:12.460 | Should this stuff be in schools?

00:52:13.940 | Should this stuff be in colleges?

00:52:16.180 | How do we help people learn these lessons or at least start to understand these concepts

00:52:20.700 | that aren't just formulas earlier and more broadly so that people don't make as many

00:52:25.420 | mistakes and are better off?

00:52:27.900 | There's a German professor named Gerhard Gigerenzer who teaches the science of risk.

00:52:32.500 | And he made this point that in school, we pretty much only teach the math of certainty.

00:52:37.820 | We teach algebra and trigonometry, which are maths of certainty, gives you very precise

00:52:42.700 | answers.

00:52:43.700 | And instead, what we should be teaching more of is the math of uncertainty, like probability

00:52:47.880 | and statistics.

00:52:49.140 | And that is taught in school, but it's secondary to the math of certainty, the math that teaches

00:52:54.060 | you precise answers, that's the first priority.

00:52:57.220 | And then maybe in college, you can take a course on probability, but that's secondary.

00:53:00.460 | He was saying that should be flipped.

00:53:02.820 | We should be teaching kindergartners and second graders about probability, because that's

00:53:07.900 | the math that really matters in the world, and you're going to use it on a daily basis.

00:53:12.100 | Algebra is important, but you're not going to use algebra on a daily basis, unless you

00:53:16.140 | have some job, you're a math professor or something.

00:53:18.740 | 99% of people will not use algebra on a daily basis, but 100% of people will use probability

00:53:24.980 | on a daily basis.

00:53:25.980 | They might not know it.

00:53:26.980 | They're not actually doing the math, but probability impacts every hour of your life.

00:53:32.580 | And the decisions that you make in life rely on understanding how probability works.

00:53:37.540 | And we rarely teach it.

00:53:39.100 | It's a math of uncertainty.

00:53:40.300 | This gets back to what I was saying earlier about what's taught in school is what's easy

00:53:43.660 | to teach, and certainty is easy to teach, because you come up with a formula that gives

00:53:48.860 | you the right answer.

00:53:49.980 | Probability where it's like, there's all these unknown worlds, and by definition, it's like

00:53:54.580 | we don't necessarily know what's going to happen.

00:53:56.360 | Those are harder to teach, they're harder to wrap your heads around, but they're what

00:53:58.980 | really matter in the world.

00:54:00.700 | So if I were king for a day, so to speak, I think I would probably follow Gerard Geiger

00:54:03.980 | Ensor's advice and say, flip it around.

00:54:06.180 | We should start with the math of uncertainty that really makes a difference in your life.

00:54:11.380 | And as you get older and more specialized, then maybe we can talk about calculus and

00:54:14.580 | algebra.

00:54:16.100 | And since neither of us are king for a day to make this change, are there ways that you

00:54:20.900 | think someone with kids that are in school right now could start to help them learn these

00:54:26.740 | lessons?

00:54:27.940 | I think if we're just talking about investing, if you start investing and you own a couple

00:54:33.660 | of stocks, you own a couple index funds, and you do it for a couple of years, you'll learn

00:54:38.580 | a lot about risk just through experience.

00:54:41.900 | You're going to experience the market going way up, the market going way down, and that

00:54:44.980 | will teach you a lot just by learning.

00:54:47.580 | You're in the trenches getting your hands dirty.

00:54:49.580 | I think that's the best way, I would say, to teach people about risk and uncertainty

00:54:53.580 | is just being thrown in.

00:54:54.580 | Now, a lot of investors who started investing in the last year, all they've experienced

00:54:58.420 | is the market going not just up, but way up.

00:55:01.380 | That's what they know.

00:55:02.740 | So the last year of experience has not been a very good lesson because you're not really

00:55:07.740 | getting the full side of risk.

00:55:09.300 | You've only learned half the equation.

00:55:10.940 | You really got to be investing for a couple years through a couple of cycles before you're

00:55:14.260 | like, "Okay, I get it."

00:55:15.260 | And then you start viewing the bull markets as like, "Hey, this is cool, but this isn't

00:55:18.540 | going to last, and a lot of this is going to unwind, and it's going to hurt a lot when

00:55:22.220 | it does, but I'm okay with that because I've lived through this before."

00:55:26.940 | I think that's really the only way to do it is with your own money, your own skin in the

00:55:31.620 | game, getting your hands dirty.

00:55:33.420 | Yeah.

00:55:34.420 | And I totally agree here.

00:55:35.420 | I wouldn't advocate for what I'll propose to be any significant portion of your money.

00:55:40.900 | But a conversation I had with a friend, an investor, last week was about cryptocurrency.

00:55:46.980 | And he pointed out that one of the most fascinating lessons about cryptocurrency that he's seen

00:55:51.980 | is that there's such extreme volatility, right?

00:55:54.860 | You could go up and down 50% almost in a day, that it's taught him more about market crashes

00:56:02.440 | and bull markets in the shortest amount of time possible.

00:56:06.140 | And it made me think, "Gosh, I don't think people should put all of their money in cryptocurrency

00:56:09.500 | by any stretch of the means."

00:56:10.860 | And that's not the advice.

00:56:12.540 | But if you want to learn through investing, it could be a way to accelerate your learning

00:56:17.480 | because it has just such extreme volatility.

00:56:20.300 | I totally buy that.

00:56:21.780 | A hundred percent.

00:56:22.780 | I mean, I'm in the same boat as you in terms of recommending crypto, but I absolutely buy

00:56:27.000 | that argument.

00:56:28.000 | 100%.

00:56:29.800 | Well, before we wrap, we've talked a lot about money and risk.

00:56:33.260 | Are there any main takeaways that you think people should leave this conversation with?

00:56:38.520 | To me, the biggest thing that I think is the most important part of behavioral finance

00:56:42.200 | and is maybe the one of the most overlooked is that in order to do well, you have to become

00:56:45.800 | introspective about who you are and realize that you are different from me and we're all

00:56:50.680 | different.

00:56:51.680 | And the only way that you can really understand and master the behavioral side of finance

00:56:55.880 | is just really taking a look at who you are personally.

00:56:58.140 | Not reading about other people or other people's situations, but just being honest with yourself

00:57:01.840 | about your own skills, your own weaknesses, your own risk tolerance, your own goals in

00:57:05.720 | life.

00:57:06.920 | And that's different for everyone.

00:57:08.220 | And that's why a lot of people don't...

00:57:10.800 | Most people want one answer, like what's the right thing to do?

00:57:14.640 | And when you become introspective about who you are and realize that everyone's different,

00:57:18.440 | you realize that people come to different conclusions.

00:57:20.960 | And what's the right decision for you, Chris, might be the wrong decision for me.

00:57:24.780 | Even if we're roughly the same age, people come to different things.

00:57:28.400 | So I would just implore people to spend a little bit more time looking at themselves

00:57:32.400 | in the mirror and try to figure out who they are and what their risks and goals are.

00:57:36.360 | That makes total sense.

00:57:37.360 | And I'd like to end all these conversations.

00:57:40.080 | This is a show called All The Hacks.

00:57:41.480 | And today, I would say it's a little different than some where it wasn't kind of running

00:57:44.760 | through very tactical things you can do, but really reframing psychology and money as something

00:57:50.680 | that if you can really start to understand how things work, you can probably hack your

00:57:55.000 | mind to start to be a more rational, or at least a more reasonable, as you say, investor

00:58:00.000 | and more reasonable with money.

00:58:01.940 | But I will ask, are there a few kind of like life hacks or in any genre for you that are

00:58:07.320 | things that you do that people have often commented are fascinating or interesting that

00:58:12.040 | you'd want to share?

00:58:13.040 | I'll leave you with one financial hack that might disappoint you, but it's the only hack

00:58:17.820 | that works and it works incredibly well in finance.

00:58:20.680 | You want to do well with finance?

00:58:22.440 | Spend less money than you make and be patient.

00:58:24.600 | That's 90% of what finance is.

00:58:26.280 | If you can actually do those, you have a black belt in finance.

00:58:29.480 | It's the only hack that I think really truly works in a way that moves the needle.

00:58:33.080 | Yeah.

00:58:34.080 | I don't disagree.

00:58:35.080 | Thank you so much for being here.

00:58:36.760 | Where can people find out more about what you're writing and everything you do?

00:58:40.440 | My book is The Psychology of Money.

00:58:42.240 | And I spend most of my time on Twitter.

00:58:43.640 | My handle is Morgan Housel, first and last name.

00:58:45.880 | That's where most of my stuff is posted.

00:58:47.700 | Cool.

00:58:48.700 | Thank you so much for being here.

00:58:49.900 | This was great.

00:58:50.900 | This is fun.

00:58:51.900 | Thanks very much.

00:58:52.900 | Wow.

00:58:53.900 | I really loved this episode.

00:58:56.300 | If you did too, please consider sharing it with a friend or family member or leave us

00:59:00.460 | a five star review in the podcast app.

00:59:02.500 | I know this episode didn't have as many quick hacks as some others, but like Morgan said,

00:59:06.940 | if you can master some of the bigger mindset changes, you can really position yourself

00:59:11.260 | well with money.

00:59:12.260 | If you have any thoughts or feedback, please get in touch by email, chris@allthehacks.com

00:59:18.280 | or @hutchins on Twitter.

00:59:19.540 | We have a few fantastic episodes coming out soon with hacks from Laura Vanderkam, productivity

00:59:25.540 | expert and author of What the Most Successful People Do Before Breakfast, Zach Prince, co-founder

00:59:30.740 | and CEO of BlockFi, and Lisa Rowan, author of Money Hacks, 275 plus ways to decrease

00:59:36.980 | spending, increase savings, and make your money work for you.

00:59:40.420 | See you next time.

00:59:53.180 | I want to tell you about another podcast I love that goes deep on all things money.

00:59:57.760 | That means everything from money hacks to wealth building to early retirement.

01:00:01.580 | It's called the Personal Finance Podcast, and it's much more about building generational

01:00:05.900 | wealth and spending your money on the things you value than it is about clipping coupons

01:00:10.260 | to save a dollar.

01:00:11.780 | It's hosted by my good friend, Andrew, who truly believes that everyone in this world

01:00:15.740 | can build wealth and his passion and excitement are what make this show so entertaining.

01:00:20.940 | I know because I was a guest on the show in December, 2022, but recently I listened to

01:00:26.100 | an episode where Andrew shared 16 money stats that will blow your mind, and it was so crazy

01:00:31.460 | to learn things like 35% of millennials are not participating in their employer's retirement

01:00:36.420 | plan.

01:00:37.420 | And that's just one of the many fascinating stats he shared.

01:00:40.840 | The Personal Finance Podcast has something for everyone.

01:00:43.580 | It's filled with so many tips and tactics and hacks to help you get better with your

01:00:47.260 | money and grow your wealth.

01:00:49.100 | So I highly recommend you check it out.

01:00:51.220 | Just search for the Personal Finance Podcast on Apple Podcasts, Spotify, or wherever you

01:00:55.660 | listen to podcasts and enjoy.