RPF0087-Joey_Fehrman

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00:00:20.340 | tickets to your favorite teams, artists, and all the must-see live events to Sweet Hop

00:00:25.000 | around LA. It's more than just a ticket. Are you looking for a book that's not boring

00:00:32.840 | that you would be able to give to friends or family members who may be interested in

00:00:37.600 | finance but might not be interested in reading the type of finance books that you read? You

00:00:44.320 | know, the boring ones? You know, I do it too. Or maybe Christmas is coming up. Well, my

00:00:51.080 | guest today has written just such a book. Welcome to the Radical Personal Finance Podcast.

00:01:13.160 | My name is Joshua Sheets. Thank you for being here. Today is Thursday, October the 23rd,

00:01:18.360 | 2014. This is episode 87 of the show. And today I have an interview with a man named

00:01:25.040 | Joey Furman who has written a pirate adventure novel to teach you about finance. It's going

00:01:33.440 | to be good. One of the things that I see happening more and more in today's world is we're developing

00:01:47.040 | brand new types of media to appeal to different people. And one of the types of media that

00:01:52.280 | I see at least a need for is better books, not necessarily just more boring finance books

00:01:59.960 | that tell you here's what you do. There's plenty of those. And it seems if you go down

00:02:03.680 | to the personal finance section, it seems like if you read four of them, you've probably

00:02:07.040 | read about all of them. Many of them say about the same things. But what if there's an opportunity

00:02:11.460 | for a different format? My guest today is a man named Joey Furman. Joey's a really great

00:02:17.400 | guy. We met at FinCon when I was out there a few weeks ago or a month or so ago in New

00:02:22.480 | Orleans. And Joey formerly worked on Wall Street where he worked as an investment analyst.

00:02:28.960 | And then he quit Wall Street to pursue his dream of writing and publishing his book.

00:02:33.320 | He's written a book entitled Pirates of Financial Freedom that purports to teach approximately

00:02:39.640 | 70 important financial planning concepts and lessons about personal finance. And it does

00:02:45.240 | so in the context of an adventure novel.

00:02:48.680 | So we're going to talk with him today. The interview is just a little bit over an hour.

00:02:52.200 | The first half is all about the book. And then the second half is all about what it's

00:02:55.840 | like to go on Wall Street. And because Joey started in that business and worked in that

00:03:00.840 | business, he's a chartered financial analyst, he has experience in that business, I thought

00:03:04.960 | many of you who were interested in finance would be interested in hearing a little bit

00:03:09.280 | more of his story, hearing about some of his experiences, hearing what it takes to be an

00:03:15.640 | analyst and be involved in Wall Street.

00:03:17.520 | So if you're just interested in the books, excuse me, in the book, the first half of

00:03:21.280 | the show is the half for you. If you're interested in what it's like to be a financial analyst,

00:03:26.480 | the first and the second half is what's right for you. Enjoy.

00:03:33.400 | So Joey, welcome to the Radical Personal Finance podcast. I appreciate you're making the time

00:03:37.400 | for this interview.

00:03:38.400 | Well, it's great to be here.

00:03:40.920 | So I've been looking forward to talking with you since we met. And I have your book. And

00:03:47.080 | what I'd like to do is I'd like to accomplish in our interview today almost two different

00:03:53.760 | courses of discussion. I'd like to talk with you about your book and some of the lessons

00:03:59.360 | that are in it and some of the ways that it can be applicable and about that. And I'd

00:04:02.320 | also like to talk to you about your experience in the financial business.

00:04:07.600 | But to kick things off, would you start by sharing with me and the audience a little

00:04:13.400 | bit about your history, especially just your personal history and experience in the world

00:04:19.560 | of high finance, so to speak? What's your story?

00:04:23.600 | Sure. So let's see. Grew up in Omaha, went to University of Pennsylvania for college,

00:04:29.920 | where I actually studied computer science and engineering and did a minor in poli sci.

00:04:35.600 | Had no interest in finance in college until I read Rich Dad, Poor Dad. And I was like,

00:04:40.160 | "Oh, this finance stuff's actually kind of interesting. Maybe I should look into it."

00:04:44.400 | So Penn has the Wharton School of Business, which is one of the best business schools

00:04:48.240 | in the country. So I took some classes there. And I actually had to learn finance on my

00:04:52.240 | own in order to get my first Wall Street job, which was actually down in Boca Raton, Florida.

00:04:57.120 | I think that's near where I live.

00:04:58.120 | Where I live, right. Yeah.

00:04:59.120 | So I wanted to live near the beach for a while. So I just moved to Florida and ended up getting

00:05:03.000 | a job at Morgan Stanley down there. And the way I got the job, because I had really no

00:05:08.280 | finance academic experience, was I just immersed myself in it. So I read dozens of investing

00:05:15.840 | books. I was trading my own stocks and options account. I was watching CNBC. A lot of my

00:05:19.960 | friends were in the finance business, so I knew the lingo. And I found a guy who took

00:05:24.440 | a chance on me. So I worked with my mentor for probably five years. And that was at Morgan

00:05:34.760 | Stanley Merrill Lynch. Then I moved to New York because I wanted to live in New York.

00:05:38.000 | Real quick, real quick. Were you working on the retail side or were you working on the

00:05:41.840 | institutional side? Were you a trader? What was your role there? And explain the different

00:05:45.400 | possible roles. Because working at Morgan Stanley Merrill Lynch can mean many, many

00:05:50.200 | things.

00:05:51.200 | Absolutely. So down in Florida, there aren't many institutional jobs in finance. It's mostly

00:05:55.520 | all retail because there's a lot of wealth down there. So my job was on the investment

00:06:00.440 | analysis side. So I worked for a financial advisor. I didn't do any sales. I did more

00:06:04.600 | of the analysis for the portfolios. So that was my role down there. And yeah, there's

00:06:11.880 | lots of different roles in finance, which I'm happy to get into. But basically I wanted

00:06:15.480 | to move to New York because New York is awesome. So I worked for Morgan Stanley there at their

00:06:20.640 | Fifth Avenue office. Same thing. I worked for one of the biggest investment teams in

00:06:26.640 | the firm. And my job was, again, like the portfolio manager route. And then I decided

00:06:31.960 | I wanted to become an entrepreneur and pursue that dream. So I quit my Wall Street job to

00:06:37.760 | come out with my book, Pirates of Financial Freedom. And now I'm on that route because

00:06:43.120 | I see a lot of I see more potential with that right now than I did on the Wall Street path.

00:06:47.640 | So I guess that's kind of my my story in a nutshell.

00:06:50.280 | How long ago did you leave Wall Street to work on your book?

00:06:54.800 | Earlier this year. So that was probably April-ish.

00:06:57.960 | Awesome. So tell us about the book.

00:07:02.040 | Yeah. So I got tired of reading all those boring personal finance books. And I know

00:07:08.960 | that there's a big need to learn about financial literacy, but nobody wants to read a thick

00:07:14.320 | long book or listen to a boring lecture. So I was like, how can I make this exciting?

00:07:18.240 | So I wrote the first personal finance adventure novel. Basically, it's a pirate adventure

00:07:22.840 | story that teaches over 70 money lessons. And I think that it can help a lot of people.

00:07:28.960 | Yeah, I have a copy of the book, which I got I bought from you after we met. You told me

00:07:35.440 | about it. And I am so excited to see. I didn't know it was the first, but I'm so excited

00:07:41.360 | to see you doing this and leading the charge, I guess, with finding some ways to adjust

00:07:48.480 | and teach personal finance lessons in a way that is more accessible.

00:07:52.640 | I'm really concerned about just our general population, our general culture. Knowledge

00:08:00.200 | comes from largely comes from books. And all the knowledge of the world is found in a book.

00:08:05.560 | But I'm really concerned that many people can't read, many people don't read, and many

00:08:10.200 | people when they do read, choose not to read books that have information, but rather to

00:08:14.920 | read books that are more exciting. And I love to read an exciting book, but I'm just so

00:08:21.280 | concerned with financial literacy in our country. And so I love having this as an option for

00:08:27.000 | people.

00:08:28.000 | Well, I'm glad you got a chance to read it and that they like the idea. I'm calling

00:08:32.600 | this, I don't know if I'm trying to start a movement, but I call it financial edutainment.

00:08:37.880 | And I think that this category of book can just really explode and edutainment in general

00:08:43.240 | can really explode just based on, you know, people have short attention spans, they want

00:08:48.480 | results now and they get bored easily. So I think that teaching in this manner, and

00:08:52.840 | I'm trying to get this book into schools and homeschoolers are working with it, all that,

00:08:56.320 | I think it can really change the future of education.

00:08:59.520 | Right. Are you aware of, I mean, are you aware of any competition in this genre? You mentioned

00:09:04.880 | that you're the first kind of with the adventure story, but are you aware of other allegories,

00:09:09.280 | other parables, other books that maybe influenced this or influenced your idea?

00:09:14.680 | Well, Pirates of the Caribbean definitely influenced my book. But as far as like a finance

00:09:22.600 | type book, I think the best known one is Richest Man in Babylon. And I've read that and, you

00:09:28.720 | know, I thought it taught valuable lessons, but it wasn't funny, it wasn't adventurous,

00:09:34.400 | it wasn't much action or plot twists or anything like that. And then another one is The Wealthy

00:09:40.000 | Barber, which also teaches good lessons. But again, it didn't have that kind of, it wasn't

00:09:46.400 | a page turner. But I would say that those are probably, you know, the two that I'm aware

00:09:52.160 | of. Yeah, I love Richest Man in Babylon. It appeals

00:09:57.600 | to me. I like the language of it and I actually like, I like the lessons, I like the language,

00:10:02.920 | and I like that it is so far removed. You actually did something similar with your book

00:10:06.400 | because you used a lot of kind of pirate language to mix it up a little bit and make it not

00:10:10.680 | necessarily sound like 2014, although you didn't set it in 1714. It was clearly a modern

00:10:17.640 | setting, but just with a twist. But I loved the language in Richest Man in Babylon because

00:10:23.760 | the passage that stands out to me is there's a passage in there where somebody went and

00:10:28.160 | spent all of their, spent a massive amount of money on, you know, the finest new camel

00:10:33.560 | hair robes, something like that. And the greatest...

00:10:37.440 | Who doesn't want one of those? Right. And you're thinking, "Well, that's stupid.

00:10:41.200 | Who would spend a lot of money on a camel hair robe? Oh, wait a second. You mean these

00:10:45.800 | new, you know, $300 jeans I just bought? Oh, man."

00:10:50.320 | Yep, that's a good point. So that's, and I think there's a real need

00:10:56.360 | for it. And I hope you, do you think you'll, and I want you to go through kind of the plot

00:11:01.080 | of the book in just a second, but do you have ideas for more books similar? Obviously, you

00:11:04.960 | got to make this one a raging success first, but have you had other ideas as well?

00:11:09.920 | I definitely have other ideas. But as you said, I'm just focused on kind of sales and

00:11:14.400 | marketing for this book, which is a whole learning experience on its own. But yeah,

00:11:18.960 | I want to make this book a success first. And if I can make it a success, then yeah,

00:11:21.840 | I've got plenty of other ideas for future books and courses and speaking and all that

00:11:26.040 | kind of stuff. Awesome. That'd be exciting. I've wanted

00:11:28.240 | myself to create almost like a Hardy Boys for business adventure.

00:11:34.120 | Oh, nice. Because when I was a kid, I loved reading

00:11:37.040 | Hardy Boys stories, and they were all about kind of detective work. But I would love to

00:11:43.200 | bring that in and bring in business adventure somehow and teach kind of concepts of finance

00:11:50.480 | on the side of entrepreneurship, on the side of due diligence, on investments, things like

00:11:54.680 | that. So we'll see if I can build the margin into my life to be able to get it done at

00:12:00.160 | some point. But if not, take it and run with it, because I'd love to see more of this genre

00:12:05.960 | exist. Go ahead. Excuse me.

00:12:11.200 | No, I think the genre can definitely grow. I'm going to mispronounce his name, but Patrick

00:12:19.200 | Leoncioni or somebody wrote fables of business. So I'm going to look up that, but that might

00:12:25.320 | interest you as well. It's based more on the modern time, but that's probably another type

00:12:29.520 | of book that is similar to this kind of fable type story with business lessons.

00:12:36.160 | Neat. There's one other person also you might check out who I'm aware of, because he taught

00:12:41.040 | my CFP prep class, one of the named Ken Zahn. It's Z-A-H-N. He wrote, I think he's written

00:12:47.800 | three murder mystery finance novels. So he is a financial planner and with a lot of experience.

00:12:57.800 | So he wrote some murder mysteries and he uses them as a context for teaching people about

00:13:03.840 | some intricacies of financial planning. So he basically presents some financial planning

00:13:07.760 | cases through the context of a murder mystery. And it's pretty cool. I've only read one of

00:13:12.120 | his books, but he gets pretty in depth into, for example, here's the wealthy heiress and

00:13:18.520 | here's how her estate plan would be structured. And if we use this discount, we can get this

00:13:22.920 | valuation and does it. So you may also check out his work. It's a little different than

00:13:30.480 | yours. Yours is very focused on practical stuff. His is a little bit more the intellectual

00:13:34.960 | financial plan side, but he also recommendations for the audience.

00:13:39.520 | But Ken's not here, you're here. And I want you to talk about your book. So tell us the

00:13:43.240 | plot and then share some of the lessons that you've worked in.

00:13:46.680 | Sure. So the basic idea of the plot is you've got Captain Rich R. Daly, and he's a pirate

00:13:54.040 | captain and the book is based in kind of like today's world, but with 17th century pirates,

00:14:01.320 | like off the coast of South Carolina or something, they're still kind of there doing their own

00:14:05.080 | thing. I kind of compared to the Amish, right? So they're kind of still doing their same

00:14:08.840 | things that they were doing hundreds of years ago. So these pirates are still around kind

00:14:11.960 | of doing the same things that they're doing hundreds of years ago. But a lot of these

00:14:15.240 | pirates are becoming landlubbers, which are us, right? They're attracted by the cell phones

00:14:19.200 | and like the, you know, those fancy jeans and everything. So they decided to move and

00:14:28.080 | become a landlubber. So the captain, he has to recruit all these landlubbers to become

00:14:34.120 | pirates. And he thinks the best way to do that would be to show the world that his pirates

00:14:38.060 | are rich and wealthy and that they have lots of gold. The problem is his pirates are broke.

00:14:43.320 | So he just so happens to have a son that works on Wall Street. So he requested his son come

00:14:49.360 | down and teach his pirates like how to build wealth and how to build treasure and all that

00:14:53.400 | kind of stuff. So it's their adventure story where Giuseppe, the Wall Street guy, teaches

00:14:59.560 | these pirates how to pay down debt, how to build their credit score, how to save for

00:15:04.920 | retirement, how to think like the rich, buy their first home. You know, there's over 70

00:15:09.000 | lessons. And along the way, they've got sword fights and treasure hunts and mythical beasts

00:15:14.640 | and kidnappings and walking the plank and all that kind of stuff. So yeah, that's the

00:15:20.880 | basic idea of the book.

00:15:21.880 | What are some of the types of lessons that you have woven in? When you say 70 lessons,

00:15:26.680 | what would be some of the general concepts that you're referring to?

00:15:30.840 | What I did is I tried to, you know, the main lessons that a lot of the personal finance

00:15:35.840 | people are well aware of, right? So live below your means, snowball method, dollar cost averaging,

00:15:45.320 | like all those kind of basic things that you and I and the other personal finance people

00:15:50.360 | are well aware of, but that the general public really isn't aware of. So I wanted to make

00:15:54.520 | sure that I covered a lot of the basics. But then I threw in some extras and I invented

00:16:00.080 | kind of some of my own terms like the 10 times test or the think delay mentality. I also

00:16:05.600 | got into kind of things that aren't necessarily covered in personal finance as much. So like

00:16:12.680 | stock ownership rights and ETF investing and some of these other things that maybe aren't

00:16:17.600 | getting as much attention as they probably should.

00:16:20.200 | I want to read one of the things I wanted to read. Let me read about four paragraphs,

00:16:24.040 | just a little bit of the dialogue around the 10 times test, because this was one of the

00:16:27.200 | things that stood out to me. I love these little rules of thumb and I have never heard.

00:16:32.360 | So let me read it and then we'll talk about it. Just read about a very short excerpt here.

00:16:40.000 | He said, "But buying things you want isn't always a bad thing," continued Joey. "Part

00:16:44.320 | of the joy of being financially secure is that you can blow your money on silly things

00:16:48.120 | you don't need." "Really? So I can buy it?" Rusty became excited again. "Well, it depends.

00:16:53.320 | You need to be able to comfortably afford your wants. I live by the 10 times test."

00:16:57.880 | "What be that?" asked Sandy. "The 10 times test says that when it comes to something

00:17:03.040 | you want, you should have at least 10 times that amount in savings. If you don't, that

00:17:07.840 | means you are spending over 10% of your life savings on something you don't even need."

00:17:13.840 | And it goes on from that. So did you make up that 10 times test?

00:17:17.760 | I did. Yeah, it's my own original concept. And that section you're talking about, Rusty

00:17:23.880 | wants to buy a $500 parrot, right? Because everybody, or every pirate quote-unquote "needs"

00:17:29.200 | a parrot.

00:17:30.200 | Of course.

00:17:31.200 | But obviously it's not a need, it's a want, which Joey, aka Giuseppe, aka looks, talks

00:17:38.440 | and acts a lot like me, that character. So he doesn't have that 5,000 doubloons in savings

00:17:46.120 | and so it doesn't pass the 10 times test. This is actually something that I applied

00:17:49.840 | in my own life just when I was getting out of college. I was just kind of like, "Oh,

00:17:54.080 | that's a good idea. Why would I spend 10% of my lifetime savings on something that I

00:17:59.280 | don't even need?" And then I just kind of like, "Oh, you know what? Other people may

00:18:02.640 | find that useful as well." And based on the reviews and people that I'm hearing from,

00:18:06.080 | they're like, "That's a really cool idea. It's really easy to understand. I'm going

00:18:08.640 | to start applying that."

00:18:10.640 | It's very useful. And I'm glad you made it up. I may steal it. I'll credit you every

00:18:15.840 | time I can. But some of these just little rules of thumb I find are so useful to help

00:18:23.080 | us, I guess, have a basis that moves toward wealth. I remember another one I've stolen

00:18:30.400 | is Sam, Financial Samurai. His, "Don't buy a car that's more than 10% of your annual

00:18:37.160 | income. Make sure that you have never owned vehicles that are worth more than 10% of your

00:18:41.480 | annual income." And what can happen with these things is that we don't really have any societal

00:18:48.320 | rules about what we spend money on and what we don't spend money on. So therefore, oftentimes,

00:18:53.680 | the default becomes we just simply, if we have it, we buy it. If we have it, we spend

00:18:58.920 | it. And without some sort of guideline, we don't have anything to judge things on.

00:19:03.480 | So if I tell somebody, "You should never spend more than 10% of your annual income

00:19:07.440 | on a car," then they can say, "Oh, wow. So that means I make $30,000, so I should

00:19:12.720 | drive a $3,000 car. Why?" And they can say, "Well, if you want to be wealthy, this

00:19:16.440 | would be a rule." And so when they're going and looking for cars, automatically,

00:19:20.440 | they're looking in a different price range than if somebody's making $30,000 a year

00:19:26.280 | and is saying, "Oh, I should spend 10% or 15% of my monthly income on a car," then

00:19:32.520 | they're looking and saying, "Well, 10% of my income would be a little under $300 a

00:19:37.480 | month, so therefore, I can afford the payment on a $300-a-month car," and they wind up

00:19:43.440 | with a $25,000 or $30,000 car, and they have no ability to become wealthy.

00:19:48.280 | So these rules need to be rules, these work ideas of mine. I should spend 25% of my income

00:19:54.240 | on housing. Well, wait a second. What if you had it, I should spend one year's salary

00:19:59.000 | on housing? It changes the scenario. So I really like your 10 times test because it's

00:20:03.680 | useful even for younger people to say, "Hey, have 10 times this amount of money in savings

00:20:08.960 | and don't ever wipe out all your savings on something."

00:20:11.400 | Yeah, and I think it's applicable to everyone. So if you have no savings and you're going

00:20:17.240 | to buy a dollar candy bar, at least that'll get you started to save $10 before you buy

00:20:22.560 | that candy bar. And a lot of times, it's just getting started. People are so intimidated

00:20:27.060 | by taking that first step. And then if you're a millionaire and you want to buy a $300,000

00:20:32.960 | Ferrari or whatever, then you should probably have $3 million in savings. So I think it

00:20:37.400 | can apply to everybody.

00:20:38.680 | Absolutely. It's useful, and I don't really care that much if people follow it to the

00:20:43.920 | letter. I care that you think it through and that you have a logical framework for what

00:20:48.800 | you're thinking through and that the rules that you have are rules surrounding wealth,

00:20:54.000 | not rules that are dictated by a consumer-driven society who says, "Yes, you can afford this

00:21:00.160 | if you can afford the monthly payment."

00:21:03.840 | Are you aware—is there any other of your ideas that you implemented in the book that

00:21:08.040 | I might not know that were original with you?

00:21:11.160 | Well, it's kind of associated with that 10 times test, but this idea I call "think delay."

00:21:17.960 | And basically what this says is—let's say you don't pass the 10 times test. That's not

00:21:22.480 | saying that you can never buy something. I think the general public thinks like all the

00:21:27.560 | personal finance people are saying, "You can never buy nice things," or "You can't buy

00:21:32.680 | that," and they think that you can never buy it. I think delay says, "No, you can eventually

00:21:36.800 | buy it once you're financially responsible and in a better place." People think that,

00:21:41.440 | "Oh, I don't want to listen to these personal finance people because I can't buy luxurious

00:21:45.000 | things and whatever." And I don't think that's what any of the personal finance people are

00:21:48.680 | saying. It's saying, "You want to delay that purchase until you're in a better spot."

00:21:53.760 | And so I just coined "think delay" for that, but a lot of people preach the same thing.

00:21:57.320 | Awesome. That's really cool. I like that. It's good to have a little bit of lingo.

00:22:02.600 | Do you have a list on your website, or are you personally a list of the 70 or so lessons

00:22:08.320 | as far as specifically enumerated somewhere?

00:22:11.640 | You know, I do. It's not well-formatted or anything. I think it's probably more than

00:22:19.160 | 70 lessons, but I was like, "Yeah, let me just see all the things that are in here."

00:22:23.080 | So yes, I do have a list.

00:22:25.080 | One of the ideas that I had when I was reading the book—and I'm not sure if you thought

00:22:28.920 | of it and decided not to—I was thinking about how I could leverage the book for other

00:22:33.960 | people. And I could just give it to somebody and say, "Hey, here, read this book." I think

00:22:39.920 | that I would use this book—I'm going to interrupt my own question. Did you specifically

00:22:46.320 | target this toward a certain audience, a certain age bracket, a certain type of person in your

00:22:51.240 | mind?

00:22:52.240 | I did. So I wrote it—so I tried to think of what would be the best type of person that

00:22:57.040 | I could really make a difference for that could apply the lessons. So there's a lot

00:23:01.220 | of the retiree market, there's a lot of the kid books. But kids, they don't make any money.

00:23:06.680 | Retirees, I don't want to say it's too late, but it's kind of too late. So what I did is

00:23:13.400 | I focused on the teens and 20s market, because they're starting to make some income, they

00:23:18.680 | haven't formed these bad habits yet, they're hopefully not in a load of debt, and you can

00:23:23.080 | really make a difference. So I focused on that market. But it turns out that people

00:23:28.960 | from ages 8 to 48 have read the book and are like, "Wow, this is great, I understand it,

00:23:34.400 | it's making a difference in my life." So I guess it's one of those books that can apply

00:23:38.320 | to multiple ages, but I did write it for the teens and 20s market in mind.

00:23:43.480 | Right. Yeah, that's what I thought, partly because you said that on the back cover.

00:23:48.480 | I did.

00:23:50.840 | But my thought was that with those 70 lessons, I kept wanting to look to the back of the

00:23:54.920 | book and find an appendix with a listed number of those lessons. And you didn't include an

00:24:00.800 | appendix or an index of the lessons. What you did include was you included some note

00:24:04.960 | pages. And so when I thought about how I would maybe leverage this book is I would give this

00:24:10.480 | to teenagers as a book report topic. And I would use it almost as a...and say, "Hey,

00:24:19.480 | read this book." And then the goal would be after reading it, go back through and outline

00:24:24.800 | it and try to bring out as many of the lessons. And maybe if I were a teacher, I would maybe

00:24:30.580 | integrate this as you get points based upon how many lessons you can bring out.

00:24:35.320 | And so maybe if you actually take your list and just simply produce it as a teacher's

00:24:39.160 | guide or as a manual. I mean, if my son were older, I would be assigning him, if he weren't

00:24:44.840 | already reading them, I would be assigning books like this and setting up an incentive

00:24:49.560 | system for him to read them, understand them, outline them, apply the lessons, enumerate

00:24:56.080 | them, and figure out how they could be applied to his own life. So maybe if you built out

00:25:01.280 | that out, maybe with the home education community and maybe with teachers who are economics

00:25:05.160 | teachers in the government school system or in private schools, maybe you could build

00:25:09.820 | out some teacher resources for them and that would help teachers and parents to be able

00:25:13.560 | to assign it.

00:25:14.560 | I think that's a great idea. I'm actually putting together a curriculum for teachers

00:25:20.240 | right now. It's based per chapter and each chapter has discussion questions, activities,

00:25:26.080 | and test questions that the homeschool community and the teachers in general can use. But I

00:25:30.880 | hadn't thought of adding just the 70 lessons in that guide. So that's a really good idea.

00:25:35.560 | I can easily do that.

00:25:37.200 | That'd be cool. Because it's so pithy. And the challenge with these books, as far as

00:25:43.000 | a book that is an edutainment, as you mentioned in the show, or in the book, is the key to

00:25:49.820 | education is implementation. Knowledge isn't what makes the difference. It's applied knowledge.

00:25:55.360 | So my thinking with books, I have had to learn how to read books and figure out how to apply

00:26:02.720 | them because reading goes far beyond just the reading. So it's kind of an easy entry

00:26:06.560 | way. But then I need to go back and dissect it and figure out and apply it because it's

00:26:11.160 | the application of the knowledge, I think, that really makes the transformation.

00:26:14.520 | Oh, I agree 100% with that. And that's why the last chapter in the book is basically

00:26:19.940 | the goal setting guide and kind of my system on how I think you can set and achieve goals.

00:26:26.060 | Because you're right, there's a lot of people that already know this knowledge and are still

00:26:29.540 | broke. Why is that? Because they haven't applied it. I think the biggest money mistake people

00:26:33.420 | make is that they don't actually take steps to apply the lessons that they've learned.

00:26:38.060 | They're not taking any action towards financial freedom. They just kind of read about it and

00:26:41.900 | think about it, but don't actually take those steps. So we're on the same page for that.

00:26:48.900 | Absolutely. So I would encourage people to get the book. I was impressed when I looked

00:26:54.460 | at your website that you have an excerpt from the book. Frankly, I don't know how to--this

00:26:58.900 | is the first time I've ever done an audio interview about a book. So I want to intrigue

00:27:03.620 | people with the concept without ruining the book.

00:27:06.260 | Right. There are some plot twists in there. So I don't want to spoil them.

00:27:11.020 | Right. So I'm trying not to give a spoiler. I have no idea how to do a book interview

00:27:17.220 | with an author other than kind of what we're doing. But you have a really great--go ahead.

00:27:24.220 | I spoke over you. I apologize. Say what you just said.

00:27:26.860 | Well, I'm curious if you had a favorite character or a favorite lesson in the book.

00:27:30.660 | For me, I just--I didn't have a favorite character or a favorite lesson. I thought

00:27:36.860 | that--I'm partial to pirate captains, so I thought the captain was a fun character. And

00:27:43.500 | I liked how you used kind of these wacky--slightly wacky, not absurd, but slightly wacky characters

00:27:50.100 | with the pirates. And because it's kind of funny because you can almost create a caricature.

00:27:55.420 | And instead of building out a modern caricature, you can joke about how this pirate is--what

00:28:02.420 | was the scene in the book where the pirate is going to the store and buying all of these

00:28:08.620 | bottles of rum?

00:28:09.780 | Yeah.

00:28:10.660 | And he's got all these different brands of rum and has no money. Well, it's kind of a

00:28:14.020 | joke about a pirate doing that, but yet how many of us know people that do the equivalent

00:28:18.640 | of that, whether it's with alcohol or not?

00:28:21.740 | Yeah.

00:28:22.700 | And so I like these caricatures because instead of being specifically critical of modern society,

00:28:29.700 | we can kind of take the indirect lesson and apply it to somebody that we know and recognize,

00:28:37.460 | "Ah, look at that."

00:28:39.100 | Well, it's funny. So this--an eight-year-old girl in New Zealand read my book in about

00:28:44.580 | five hours, she said. And her mom emailed me and was like, "Joe, you've created a monster.

00:28:51.620 | Every time we go to the store, she's like, 'Mom, is that a need or a want?'"

00:28:55.260 | Right.

00:28:55.820 | "Have you thought about inflation? What are we going to do about that?" And she's saying

00:29:00.060 | all these things from the book, and she's starting to apply some of the lessons with

00:29:03.540 | her own entrepreneurial-type things, and she's starting to save some money. So yeah, some

00:29:09.420 | of these characters really live in people's minds for a while, because they're at the

00:29:14.580 | store and they're like, "Oh, you know, I thought about what Rusty said, and I ended up not

00:29:18.140 | buying it."

00:29:19.140 | Right.

00:29:19.660 | And so, yeah.

00:29:21.260 | Right. And that's the thing that we can do, is you create books as--I'm creating a different

00:29:26.300 | medium here, or a different type of media, with podcasting. I would love to see--I've

00:29:32.300 | seen some people--I mentioned it in one of the shows where some people are producing

00:29:36.300 | a cartoon series of business lessons with Warren Buffett on YouTube. I don't remember

00:29:40.340 | the name of it.

00:29:41.900 | But we need--it's very easy for me to get really hardcore and radical about the doom

00:29:48.940 | that is facing our world because of a lack of academic excellence, and to just be awful.

00:29:55.940 | But the key is, we've got to adjust and learn how to reach people with lessons, and learn

00:30:03.500 | how to encourage other people. And not everybody is the same way, and we need different types

00:30:09.380 | of media that appeal to different people.

00:30:11.660 | And just by giving--I mean, I'm thrilled that you created this, because--and I'd love for

00:30:17.460 | the audience to buy a copy. Go and buy a copy. Even if you aren't that interested in reading

00:30:22.860 | it for yourself, buy a copy to give to somebody. It may be that somebody says, "I don't need

00:30:29.340 | to read a novel that appeals to teens," and I would encourage them to read it. But I'm

00:30:35.540 | going to be giving my copy away, simply because this is the type of format. It's easier for

00:30:40.940 | me to give your book to somebody who's not that interested in finance than it is for

00:30:45.100 | me to figure out, "What book do I give them? Do I give them the Boglehead's Guide to Investing?

00:30:51.460 | Do I give them the Dave Ramsey Total Money Makeover? Do I give them the Rick Edelman

00:30:55.820 | this, or the Jacob Blunt Fisker's Early Retirement?" A novel is a fairly straightforward thing.

00:31:02.820 | And if we can--the decisions that we make are influenced by the paradigm that we have.

00:31:11.040 | So we've got to intentionally shape that paradigm, that way of thinking, and encourage others

00:31:15.300 | with new, more constructive ways of thinking.

00:31:17.820 | I'm glad you think that way. And I do think my book makes a good gift for somebody who

00:31:23.340 | knows nothing about money, because you can give it to them in a way that's not insulting.

00:31:27.460 | If you give somebody a "How to Get Out of Debt" book, you're kind of like, "What are

00:31:30.820 | you saying? I don't know how to manage my own thing." But if you're like, "Hey, here's

00:31:33.940 | this really funny book, and on a side you'll also learn some good money lessons, but the

00:31:38.700 | story's really cool," that makes it an easier way for them to learn these lessons, like

00:31:43.860 | wrapping the medicine in some bacon or something.

00:31:46.140 | Right. I remember when we were at FinCon, I heard Pete "Money Mustache" say, "Trick

00:31:53.140 | people into learning something." I hate that philosophy, because it's so antithetical to

00:32:00.380 | how I think I should be, and we should be. We should desire to learn people. I just hate

00:32:05.500 | that philosophy, but I recognize that sometimes it is important and necessary.

00:32:11.420 | It's sad, but that's kind of the world we're living in for most people. The people that

00:32:15.580 | need these lessons are the ones that aren't reading the books. You kind of have to trick

00:32:20.100 | people.

00:32:20.900 | Right. Very cool. What is the website for the book?

00:32:24.860 | You can go to PiratesOfFinancialFreedom.com. You can also Google "Pirates of Financial

00:32:32.220 | Freedom" and it'll come right up. But for those who aren't skeptical of what is this,

00:32:36.620 | you can also get the first half of the book for 99 cents on Amazon.

00:32:41.060 | Oh, cool.

00:32:41.660 | So people can preview it and see if they like it.

00:32:44.620 | That's a great marketing idea.

00:32:45.900 | Thank you. But to buy the actual book, you have to go to my website, because I've done

00:32:50.980 | a lot of research, and that's the best way to do it, if you can pull it off.

00:32:55.500 | Right. Yeah, self-publishing, as long as you're okay with it from not having a book, you can

00:33:02.180 | bring the prestige. It certainly seems like you can. It results in more money in the author's

00:33:09.180 | pocket, depending on the marketing platform. So that would be great.

00:33:14.140 | And I would just encourage people, it's October. October 21 is when we're recording this interview,

00:33:18.340 | so this interview will go out sometime here toward the end of October. And Christmas is

00:33:23.620 | coming up. If you're looking for a good Christmas present, I think I love to give and receive

00:33:28.820 | books. And sometimes books stay on the shelf until they're timely. But that's a great present

00:33:35.660 | to give somebody as a Christmas present. It can be a great present for a young person,

00:33:39.900 | for a not-young person. I think it's a very, an excellent way to bring in financial concepts.

00:33:45.780 | And because there's so many financial concepts, unlike some personal finance books that are

00:33:52.780 | written in the mindset of, "This is what you must do. Here's the plan. Here are these five

00:33:57.580 | steps, and you have to follow these five steps." It's much more low-key, and there are enough

00:34:02.940 | lessons that somebody could pull from it to say, "Here's what's appropriate to me at this

00:34:07.220 | stage." I think it could be an excellent gift as a Christmas gift. So I would encourage

00:34:14.220 | people to consider that as we approach the Christmas season.

00:34:18.140 | Well, I appreciate that. And a good news for if you're going to make a New Year's resolution

00:34:21.780 | for taking control of your finances in the next year, that's also right around the corner.

00:34:26.260 | It's hard to believe that it's already end of October. Time just flies.

00:34:30.860 | Amazing. Anything else on the book that I missed, or anything you'd like to mention

00:34:35.220 | about it before we flip over to your experience in the world of finance?

00:34:38.820 | No, I don't think so. I think we did a good job.

00:34:41.700 | I think it's a good introduction, and again, first time I've done a book interview, so

00:34:46.620 | this is the best shot I've--

00:34:47.820 | You did a great job. I was impressed.

00:34:49.740 | Oh, good. Thank you. So the world of finance and the world of Wall Street, there are a

00:34:55.260 | lot of people who are interested in-- they listen to this show, they write me emails

00:34:59.140 | and say, "Well, how do I get into finance? I'm interested in personal finance, I'm interested

00:35:03.100 | in investment, I'm interested in learning." I have experience in the personal finance

00:35:09.180 | space and on the perspective of the retail financial advisor space, but I have no experience

00:35:14.980 | on the institutional side, on the portfolio management side, and kind of on the Wall Street

00:35:19.340 | side. So what's it like? Why did you leave? Did you leave because you didn't like it?

00:35:25.220 | What's it like to work on the institutional side?

00:35:28.580 | No, I actually did enjoy it. There's a lot of opportunity, and it's hard to categorize

00:35:35.380 | a finance job in general, because there's so many different types. Even within firms,

00:35:43.580 | you can't really stereotype firms either, because each department is different, each

00:35:47.700 | experience is different, so to kind of generalize the whole thing is very difficult to do. But

00:35:52.660 | the reason that I liked being in the finance industry is because there's so many different

00:35:57.620 | options. You can go down many different avenues in terms of research, like the amount of reading

00:36:06.060 | and learning you can do is just infinite. Even in personal finance, there's a lot to

00:36:12.100 | know, but when you're doing research on companies and on economic trends, and when you're trying

00:36:17.100 | to make predictions about stock prices and asset classes and all that stuff, literally

00:36:21.140 | you could never read it all. So the opportunity for learning is infinite. And obviously you

00:36:26.980 | can make a ton of money, so that's another appeal. I think that's probably the main appeal

00:36:32.980 | for a lot of people to go into finance. What's interesting is that a lot of my friends work

00:36:38.020 | in finance, they work in hedge funds, investment banking, private equity firms, and a lot of

00:36:42.420 | them, they're not that excited about their job. They got in because it's prestigious

00:36:47.380 | and the money's good, but I don't feel like they're excited and passionate in their jobs

00:36:53.340 | right now. Some are, don't get me wrong, some are definitely. And some of them are very

00:36:56.420 | good, but that's one of the reasons I kind of wanted to try something different, because

00:37:02.260 | I'm excited every day talking about my book and figuring out how to get it out there,

00:37:05.860 | helping people. Whereas a lot of the finance people, they're not that thrilled about going

00:37:11.380 | to work every day.

00:37:13.820 | Do you, you've done enough academic work. You hold the CFA charter, which is a substantial

00:37:21.300 | amount of work. And I'm going to ask you in a bit kind of just to lay that out for people,

00:37:25.820 | because people oftentimes have questions. They see all these designations and they don't

00:37:29.460 | understand the course of study. But before we get there, how do you handle the, like,

00:37:36.300 | how do you handle the idea of the value that you actually bring working in mainstream finance?

00:37:42.220 | Many people in the personal finance space view, and I think rightly so in many circumstances,

00:37:48.460 | view the finance industry, especially the Wall Street finance industry, as more of a

00:37:55.420 | leech on society and as a cost, an embedded cost on society, rather than as a value that

00:38:03.860 | bring, something that brings value to people. Based on your experience, how would you answer

00:38:09.980 | that challenge?

00:38:10.980 | Well, I don't think that that's entirely inaccurate, but it depends. Right. So there are some finance

00:38:19.140 | people who are really intelligent, who put in the work and they do add value. But another

00:38:25.740 | reason that I got discouraged with the finance industry right now, because it's really hard

00:38:28.660 | to generate alpha. So alpha is, let's say the S&P 500 is up 10 percent in the year and

00:38:38.900 | your investment mutual fund was up 12 percent. Right. So back of the hand calculation, you

00:38:45.820 | added two percent of alpha above the market. So, you know, for people who aren't maybe

00:38:50.300 | familiar with that term, but it's really, really hard to generate alpha. And it's especially

00:38:53.620 | hard right now because over the past couple of decades, so many smart people have gone

00:38:59.380 | into the finance industry that it's really saturated. And so to find that edge and like

00:39:04.380 | a large cap company is really difficult right now. And you find a lot of people leaving

00:39:08.880 | finance going to technology because you can kind of get rich quick in that kind of area

00:39:14.060 | where there aren't as many smart people, but that's becoming saturated too. So, I mean,

00:39:19.740 | I think a lot of the people in finance are really doing their best. They have good intentions.

00:39:24.940 | They work hard. I mean, these people work 80 hours a week, you know, looking for that

00:39:28.900 | edge. But it's pretty tough. But there are, I mean, there are good people out there and

00:39:37.420 | it's kind of changing. So like it used to be all about active management and now passive

00:39:41.740 | management is kind of making its trend with like low cost ETFs that are cost effective,

00:39:48.020 | tax efficient. You're not you're never going to beat the market, but at least you'll be

00:39:51.940 | the market. You're never going to underperform. And so that's kind of been my philosophy when

00:39:56.660 | I was managing portfolios. Like the core would be kind of like this passive approach where

00:40:01.140 | you're not paying these exorbitant fees. And then you look for like the outliers where

00:40:05.460 | you actually do find some managers who really are adding value and who really do a good

00:40:09.740 | job. But it's like any other industry, like 80 percent of the people in any industry just

00:40:13.840 | aren't adding that much value. It's those finding those 20 percent of the people who

00:40:16.740 | really are really good at what they do.

00:40:19.540 | Right. Right. And what's frustrating is that, I mean, the challenge of finding those people,

00:40:25.060 | it's double challenging. And this is where when you get into the the kind of the world

00:40:29.380 | of prediction, which is why so many people throw in the towel and I understand why they

00:40:34.420 | do is that not only do you have is that you have two levels of challenge. The manager

00:40:39.700 | has defined. The manager has to create Alpha and Alpha, and I'm glad you defined it because

00:40:46.340 | we throw that term around. But how I think of it is just simply the value that the manager

00:40:51.540 | adds over and above just simply the market condition. And so the manager has to create

00:40:57.340 | Alpha. And then if you're a portfolio manager, you've got to find the managers who are creating

00:41:02.020 | Alpha in a specific asset class. And it's a tough that's that's it's a it's a double

00:41:07.860 | whammy tough. But yet that I mean, do you believe it's possible to do on based on your

00:41:13.780 | experience?

00:41:14.780 | No, I do believe it's possible. Yes, I do. But another challenge on top of what you mentioned

00:41:21.660 | is that you can find the managers who have generated Alpha in the past, but that doesn't

00:41:24.860 | necessarily mean they'll generate Alpha in the future. Absolutely. Which, you know, makes

00:41:29.340 | it even more difficult. I mean, I spent, you know, two or three years just interviewing

00:41:34.060 | investment managers. And I learned a lot about, you know, how they perform the research, what

00:41:39.740 | they think their edges are. And so I got a real in-depth look and I talked to the salespeople

00:41:45.020 | and the portfolio managers. So you kind of see both sides. And, you know, it's tough.

00:41:49.540 | But there are there are people out there who generate who have generated Alpha over a sustained

00:41:56.100 | period of time. But it's it's very tricky because those people suddenly get all that

00:42:00.660 | all the money. Right. So you're doing a good job. You're generating Alpha. And now all

00:42:03.660 | of a sudden, like you get all these asset flows. So while it might be easy to generate

00:42:08.460 | Alpha with like a hundred million dollar fund, try generating that same Alpha with a two

00:42:12.780 | billion dollar fund or whatever the numbers are. It just becomes the more successful you

00:42:17.900 | are, the more difficult it is to generate that upper performance going forward. So it's

00:42:24.700 | tricky. But yeah, I mean, there are successful people out there who have done a good job

00:42:28.500 | at it. Explain for somebody who's not familiar with institutional management, why is it more

00:42:34.540 | difficult when you have more money? Why is it more difficult to make a higher rate of

00:42:40.340 | return? Shouldn't it be simpler because you have more money, you can buy more deals?

00:42:44.820 | Well, so Warren Buffett has said I'm a Warren Buffett fan. I mean, I'm from Omaha, Nebraska,

00:42:50.300 | originally. So, you know, he said that if he could just manage like a small cap portfolio,

00:42:56.100 | small cap, meaning, you know, small stocks, not the big stocks like IBM and Microsoft.

00:43:00.180 | And, you know, those are the large cap stocks, but like just a small cap portfolio. And he

00:43:03.860 | could he could generate 100 percent plus returns. Right. Because there's there's more inefficiencies

00:43:11.100 | when you get to kind of more esoteric, smaller type of asset classes. But when you've got,

00:43:19.220 | you know, like Facebook or some company that every Wall Street firm has an analyst covering

00:43:27.020 | it and they have all this research reports coming out and there's 20 different research

00:43:31.500 | reports on the same company, like trying to get an edge in that field is it's very difficult.

00:43:38.620 | Plus if the managers in that large company, let's say they were able to double the revenue

00:43:43.120 | in one department. Right. I mean, that's huge. That's a huge deal. But like when your company's

00:43:48.660 | that big, like doubling the revenue in one department, it's like nothing. Whereas in

00:43:51.860 | a smaller company and a manager makes a change like that. Now, all of a sudden, like that's

00:43:56.260 | a game changer. So those are some of the reasons. Right. And also, in addition to that, at least

00:44:02.820 | from and again, I haven't worked in this, I've read a little bit, but you also just

00:44:06.300 | have the problem of making your trades. And when you have I mean, that's what Buffett

00:44:11.980 | talks about. And I don't remember the numbers he uses in recent discussions. But when you've

00:44:17.460 | got to make a 50 billion dollar deal and a 30 billion dollar deal, that's a lot tougher

00:44:23.040 | than making a three million dollar deal. But if he went if he made three million dollar

00:44:27.620 | deals every hour of every working day, that would never be anywhere near that would never

00:44:33.460 | be anywhere near it wouldn't even it would be completely mindless in terms of the sheer

00:44:38.860 | size of the portfolio that he has to allocate. Whereas for an individual, let's say that

00:44:44.260 | you are a massive fluent person and you can go out and and do a three hundred thousand

00:44:49.300 | dollar deal or a million dollar deal or a three million dollar deal. That can make a

00:44:53.460 | major difference in the size of your of your returns. If you can you can I mean, you can

00:45:00.220 | find a lot of small deals is kind of 50 billion dollar deals don't come along too frequently.

00:45:05.900 | No they don't. And he's and Warren Buffett is looking for those types of deals. You know,

00:45:09.500 | he's looking for those big elephants where he can put 20 billion dollars to work. But

00:45:13.220 | I mean, the opportunity size is also smaller. Like how many 20 billion dollar companies

00:45:19.660 | are out there versus how many three million dollar companies are out there. Right. So

00:45:23.140 | another reason why it's just really hard. The bigger you get, the harder it is. Right.

00:45:29.060 | Yeah. I mean, I've struggled because there's so many conflicts, even in my own thinking,

00:45:36.100 | to be able to make general general observations, like more specific, you know, suggestions

00:45:42.580 | for in an individual situation where you know the facts of the situation are easier. But

00:45:46.980 | more generalized observations are tough because there's so much nuance, you know, active,

00:45:51.220 | passive, you know, investment styles, investment approaches. But I talked with a guy from Morningstar

00:45:55.580 | one time, extremely smart guy, and he was a upper level researcher at Morningstar. And

00:46:01.700 | we were talking about portfolio design. And he's in the statement he said struck with

00:46:05.580 | me as being a sensible statement. He said, if we're going to use an active strategy,

00:46:14.260 | it better like it better be in an area where we're sure it's adding value beyond the passive

00:46:20.860 | strategy to justify the fee. Because, you know, it's almost like you see this approach

00:46:25.940 | happening many times is that somebody may build a core portfolio around large cap U.S.

00:46:31.700 | stocks, a large, very efficient market, a lot of information, a very stable market.

00:46:36.980 | But buying an S&P 500 index is not necessarily the same opportunity as buying a Brazilian

00:46:43.900 | gold mining index. You know, there's a little bit of a difference for somebody to maybe

00:46:49.940 | be able to sniff out outperformance or be able to do a little bit more of exhaustive

00:46:54.660 | analysis on whether it's a fundamental analysis or there may be a it's just a less efficient

00:47:00.340 | market. So I see it as that's currently the opinion that I hold. And I just keep looking

00:47:06.820 | just to see is this opinion accurate. But to me, that makes a lot of sense as markets

00:47:11.380 | develop, then a lot of times the smart money, the researchers are going to move to areas

00:47:18.340 | where they're not as developed. And then that will help those markets to develop and to

00:47:23.180 | become more efficient. And gradually over time, then these this is how the economies

00:47:28.680 | adjust and shift and evolve over time.

00:47:30.940 | Yeah. And the reason that those smaller markets develop, as you say, is because when they're

00:47:38.180 | kind of undeveloped and there's inefficiencies there, those investment is you're making really

00:47:42.740 | good money. Right. So they're putting up good returns. Now, that's I mean, returns draws

00:47:48.240 | a crowd. Right. So if you're in an inefficient market, you're putting up good returns. That's

00:47:51.860 | going to draw all the people to help develop that market. And then the returns aren't as

00:47:55.820 | good because now there's more people researching it. And so that's kind of the cycle.

00:47:59.740 | Right. And then in an idealistic world, whether this practically works or not, then this is

00:48:04.660 | all part of the capital, the attraction of capital to a market. So theoretically, one

00:48:10.260 | of the major functions that so-called Wall Street serves is the efficient allocation

00:48:15.340 | of capital. So if we're working in Malaysian in the Malaysian markets, then if there is

00:48:21.700 | able to be good returns, then the advisors, then capital will flow there. And then so

00:48:26.420 | as the capital flows, that will theoretically help the market to develop over time as the

00:48:31.260 | outside investors come in and that flows and that helps the local entrepreneurs to have

00:48:36.020 | access to the capital that they need to be able to exploit the business opportunity that

00:48:40.460 | they see. Now, whether that works so well in practice, I guess it's different, but it

00:48:45.900 | does serve a valuable. I mean, to me, what I see in the conversation, what's missing

00:48:52.100 | a lot of times is the understanding of the historical context. And I don't claim to necessarily

00:48:57.140 | understand how markets develop, but I have a model in my head of how they do. And that

00:49:00.820 | helps me to kind of see how over time the markets develop and this how economies develop

00:49:07.460 | and efficient markets develop over time. And so we can still serve that valuable function

00:49:12.460 | by allocating capital into these less developed markets.

00:49:16.820 | Yeah, absolutely.

00:49:19.900 | You made a statement also that I just thought was really interesting, and I don't think

00:49:23.980 | I've talked about it on the show, though. But you talked about how a lot of smart people

00:49:27.700 | went to finance and maybe some smart people are moving out of finance and moving into

00:49:35.380 | tech and just the difficulty of the competition. Did you feel like you were in kind of an Ivy

00:49:44.000 | League credentialed, just a den of ridiculously overqualified people when you were working

00:49:51.820 | in Wall Street? Or did you feel like there was an ability for you to build out a competitive

00:49:55.860 | edge?

00:49:56.860 | Well, no, I think that within my circle, I definitely had a competitive edge because

00:50:03.340 | I worked harder and I think I have some good insights. But the typical path, if some of

00:50:09.500 | your readers or listeners were thinking about how can they get a job in finance, and again,

00:50:15.500 | it kind of depends what age they are, right? So the typical path to become a hedge fund

00:50:23.580 | hotshot is like you get really good grades in high school, you go to an Ivy League school,

00:50:29.540 | you study business there, you graduate and you work in investment banking for two to

00:50:36.820 | three years and then you switch over to either the hedge fund job or a private equity job.

00:50:41.980 | That's the typical path. And then from there, you do a really good job as an analyst working

00:50:46.900 | probably eight hours a week. Then you get the promotions and eventually become a managing

00:50:51.100 | director and then maybe you spin off and start your own hedge fund and then become a billionaire.

00:50:56.500 | That's kind of the typical path. But there are other ways to get in there. But that's

00:51:04.180 | the best way to do it if you can start early. But for a lot of people, it's kind of too

00:51:08.860 | late to take that path.

00:51:10.420 | The personal finance lesson I draw from it is if there's a lot of competition and you

00:51:14.500 | have an efficient competitive market, that sucks. Go somewhere else and find somewhere

00:51:18.740 | where there's not a lot of competition. An example that I have in my personal life, one

00:51:23.020 | of my backup businesses if all of my other business ideas that I'm currently pursuing

00:51:29.180 | fail is one of my backup business plans I've considered is I may start a daycare business

00:51:36.260 | for children. Because I look at a daycare business and...

00:51:40.140 | You make a lot of money.

00:51:41.140 | Well, you can make a lot of money, but I look at it and I see that this is a societally

00:51:46.140 | unappealing business. If I were to introduce myself as a 35-year-old male and say, "Oh

00:51:51.500 | yes, I run a daycare," that's really a tough pill to swallow for many people's pride.

00:51:58.420 | That means that when you look at it, then the market competition, all of the "smart"

00:52:03.820 | guys are going to Wall Street. I'll go to the daycare business. There are some very

00:52:08.980 | smart people in that business, but there would be a much higher population of maybe part-time

00:52:15.980 | people, small family operations. Maybe it's a very part-time focused business. There are

00:52:24.020 | some big chains that are working at things, but I would want to go there because it seems

00:52:28.180 | like my competition would be perhaps less astute when it came to some of the application

00:52:34.620 | of business principles. It would probably be easier to outstudy my competition in a

00:52:39.580 | business like that than it would be to outstudy my competition on Wall Street.

00:52:43.900 | Yeah, it's very hard to outstudy your competition on Wall Street. Too many smart, hardworking

00:52:48.380 | people there. But you're right, that's kind of the reasons why I left. And I might go

00:52:52.460 | back at some point. I like Wall Street, but I have a monopoly on the personal finance

00:52:58.500 | adventure novel market.

00:52:59.500 | Right, you created the market. I think I currently have a monopoly on the two-hour daily podcast

00:53:06.020 | about personal finance. It's really crazy.

00:53:09.020 | Perfect, right? It's a lot easier when you have less competition. So yeah, you make a

00:53:14.620 | good point.

00:53:15.620 | Right. Another example, and I give kind of proof for this one. I remember years ago reading

00:53:20.780 | in Tom Stanley's books on marketing to the affluent, and he talked about this. I don't

00:53:26.900 | remember which book he covers it. They all flow together in my mind. But he talked about

00:53:31.500 | something like scrap metal dealers, scrap metal being an incredibly profitable business.

00:53:39.760 | Now in any business, you have the 80/20, where there's the 20% that make 80% of the money.

00:53:44.620 | So 80% of the scrap metal dealers aren't going to make much money. But I've met a couple

00:53:49.860 | of those guys. And there's some guy locally who runs a junkyard. And I found that to be

00:53:55.820 | true here in my market. I never was able to bring on any of them as clients of mine, but

00:54:02.580 | I worked with some people who worked in their organizations, and they confirmed, "Yeah,

00:54:06.360 | this guy makes a million two, million three. His CFO makes 650,000 bucks."

00:54:12.900 | And I'm sitting here saying, "Here is this junkyard from this guy who's kind of a scrubby-looking

00:54:18.200 | guy, and he just goes to work in shorts and a t-shirt every day. But this guy is making

00:54:22.380 | a million two, a million three. He doesn't have the target on his back that the big finance

00:54:26.500 | guy has. He doesn't have the high lifestyle. And so he's found an ability to exploit this

00:54:32.540 | business." And the challenge is that we don't teach people to use this as an opportunity

00:54:38.040 | to say, "If the market's efficient, get out. Go find somewhere where you can create alpha

00:54:43.500 | in your personal income stream, in your investment solution, and go find an inefficient market

00:54:48.660 | and exploit that to your own gain, to your advantage."

00:54:52.220 | Yeah. Well, another interesting point is about that junkyard guy. Nobody expects him to live

00:54:58.140 | a lavish lifestyle. The Wall Street guy or the doctor or whatever, they expect you to...

00:55:03.100 | So you're actually going to become... You could probably become wealthier faster in

00:55:06.500 | that type of a role, because no one expects you to spend all this money on fancy things.

00:55:10.620 | Right.

00:55:11.620 | So that's an added benefit. But the thing about finance is, it's still a good job. You

00:55:15.940 | can make six figures right out of college. So that's appealing, whereas some of these

00:55:21.540 | other jobs, you have to create the opportunity. Whereas a lot of people just are not entrepreneurs.

00:55:26.140 | They'd rather work for somebody else. And the finance community is great for that. You

00:55:31.140 | can make good money in finance and learn a ton. So it's still a good path if you're not

00:55:37.420 | the entrepreneur type.

00:55:39.620 | I'm struck by, at least in some of the books I read, with profiles of people who work in

00:55:44.860 | finance. It seems like many of the people who work in finance who are the most successful,

00:55:49.260 | they're doing it, yes, because they make a lot of money and they enjoy it. But they almost

00:55:53.980 | are still doing it, even if they don't need the money or don't care much about the money.

00:55:58.100 | Absolutely.

00:55:59.100 | They get into it, they find out they liked it, they enjoyed it. And they're kind of just

00:56:03.100 | weird different people who really love the game. And because they love it, they're good

00:56:09.500 | at it. And so the money is the byproduct. And so many of them maybe would hate running

00:56:15.540 | a scrap metal dealership. They like finance, and then they wind up being really good at

00:56:20.780 | it.

00:56:21.780 | Exactly. And I do know some of those people, yeah, they make really good money, but they're

00:56:26.900 | excited to go study the market. They're adding value for their funds. They really do get

00:56:34.460 | good insights. And that's what gets them excited. Like Warren Buffett, he just loves what he

00:56:38.540 | does, but he doesn't have to work. None of these billionaire hedge fund guys have to

00:56:41.660 | work, but they just love it. So if that's you, then absolutely go into finance, because

00:56:48.820 | you can make a really good living and make a lot of money doing something that you love.

00:56:53.060 | And that's the dream for everybody.

00:56:55.100 | Absolutely. Two other quick areas I'd like to pursue. I've given people, I'd like you

00:57:01.420 | to kind of lay out, and I'll give you a moment to think about it while I ask the question.

00:57:05.260 | I'd like you to lay out any categories of jobs that you can think of for somebody who's

00:57:10.260 | interested in the side of finance that you come from. How I've laid this out on the retail

00:57:16.260 | side for people that have asked me about is I've laid out that you basically have three

00:57:20.020 | primary functions on the retail side. And by retail, I mean working with clients in

00:57:23.620 | a personal financial planning, personal financial advisory capacity. You're either, number one,

00:57:28.860 | a producer, meaning that you are meeting with clients and you are selling products, selling

00:57:34.380 | insurance, selling investments, or you are doing financial planning and bringing on clients.

00:57:39.860 | And so you are responsible for the acquisition of clients. So you're a producer, and that's

00:57:46.060 | in your directly interfacing with clients in some regard. That's where the highest income

00:57:51.140 | potential is, but it's also the most entrepreneurial activity, but it's also where the highest

00:57:58.080 | income potential is, and it's primarily a client interface job to help people understand

00:58:04.540 | what their goals are and what they're doing. Number two is there's almost the back office

00:58:08.340 | analyst role. So whether that means you are a competent financial planner, but you're

00:58:12.580 | not very good at bringing in clients, and so maybe you're a back office CFP or you may

00:58:17.320 | be a back office portfolio manager. You may have some client situations, but you're primarily

00:58:23.700 | responsible for a more technical job, and that is a profitable position, but it's more

00:58:30.420 | of a salaried position, and it has less profit potential than does the producer side. And/or

00:58:37.300 | the third area is you may be involved in an administrative role of some kind. So whether

00:58:42.020 | this is a paperwork administrative role, whether it's more of a secretarial role, or whether

00:58:47.100 | it's just simply more handling the administration of accounts. I mean, there can be various

00:58:51.900 | functions, but it's more of an administrative role. So that's how I've kind of categorized

00:58:56.540 | it in my mind. They're not perfect. They're not exclusive, but I've told that to people

00:58:59.660 | when they're trying to figure out, "Hey, I want to get into finance. What are the different

00:59:03.060 | options?" I say, "Well, what option do you want? Do you want to be a producer? Do you

00:59:05.780 | want to be a back office investment analyst?" Just simply responsible for running the portfolio.

00:59:12.300 | Based on your experience, do you have any categories that you would tell somebody that

00:59:16.900 | would be helpful for someone to understand the lay of the land a little bit if they're

00:59:21.020 | interested in pursuing a job in finance?

00:59:23.260 | Well, I'd say there are three main buckets that everybody wants. So you can work at a

00:59:28.140 | hedge fund, you can go into investment banking, or you can go into private equity. I mean,

00:59:32.900 | those are kind of like the three main areas that you get paid a lot of money. Yeah, you

00:59:39.300 | make a lot of money in all three of those areas. I would say those are kind of like

00:59:42.140 | the main buckets on the institutional side. So I'll kind of go into a little detail on

00:59:47.580 | each. So hedge fund, it's a broad term, but basically you're picking either stocks or

00:59:55.660 | bonds or different asset classes and you're trying to generate returns, generate alpha

01:00:02.700 | over a multi-year time period, or you could have a trading horizon anywhere from a few

01:00:07.980 | milliseconds to a few years. Hedge fund is a very broad category, but basically you're

01:00:13.500 | investing in publicly traded securities that you can buy and sell on a daily basis. Investment

01:00:19.260 | banking, these are the people that take companies public or raise capital for companies. So

01:00:24.020 | like when Facebook did their IPO, if a company needs to issue a bond for $500 million or

01:00:33.260 | billions of dollars, these are the investment bankers and they do research on what's the

01:00:40.580 | company worth, what kind of interest rates should we do, and they spend a lot of time

01:00:45.300 | in the office. Private equity is you basically have a large pool of capital that you raise

01:00:50.020 | from investors, then you pretty much go buy entire companies. You're not buying stock

01:00:55.220 | of a company, you're buying the entire company itself. And then these private equity guys

01:00:59.580 | will try to find the companies that they can add value to. So they'll buy an entire company

01:01:03.180 | and then restructure it or they'll bring in some consultants and add new products or they'll

01:01:10.340 | reduce expenses or whatever. They'll redo it for like three to seven years and then

01:01:16.740 | they'll sell it. So they buy the company, they change it over three to seven years and

01:01:20.900 | then they sell it to somebody else. So those are the three main buckets. And then within

01:01:26.180 | that is the different roles. And basically most people are analysts. They just analyze

01:01:31.280 | and they can analyze anything, different sectors, different asset classes. So if someone wants

01:01:37.420 | to go into finance, I think they should figure out what do they want to do, what do they

01:01:40.780 | get excited about. Is that high yield debt? Is it emerging market companies? Do they love

01:01:48.620 | consumer finance companies? Try to figure out what sector excites you the most and then

01:01:53.820 | that'll give you as much as you can about it. And then when you go to apply for a finance

01:01:57.180 | job, you'll be like, "You know what? I love materials companies because of X, Y, Z. Here's

01:02:01.420 | my favorite material companies. The management is great." If you look at the trajectory of

01:02:06.700 | their growth, I think it's going to continue for a while. And then you basically pitch

01:02:10.500 | the idea. The best way to get a stock market finance type job is to do research on an investment

01:02:17.020 | idea for a few pages and then show it to people and be like, "Look at my analytical ability

01:02:22.740 | skills." And then eventually somebody will be like, "Wow, this is really good. Let me

01:02:25.420 | take a chance on you."

01:02:26.420 | Neat. Is there a type of person?

01:02:31.420 | I don't know what type of person you're looking for but there's other types of jobs. So you

01:02:34.540 | can work for a mutual fund company which is much less competitive. I mean all the finance

01:02:38.300 | jobs are pretty competitive but if you become an analyst for a mutual fund company or for

01:02:41.820 | like a smaller type shop, they're more likely to take a chance on you rather than like Goldman

01:02:48.620 | Sachs or some of the big hedge funds.

01:02:51.460 | Is there a type of person that you would think could be attracted more to a hedge fund or

01:02:56.500 | more to investment banking or is it primarily more about the interest of the person like

01:03:01.640 | you said of, "Hey, I like this type of analysis." Do you look at people on the subway and say,

01:03:08.500 | "Ah, investment banker. Oh, that guy's an analyst." That type of thing. Can you pick

01:03:11.740 | something up about people?

01:03:13.140 | That's a good question. I know people at all these firms. I think the hedge fund types

01:03:21.060 | just really like the market that they're studying. So whether it's emerging market stocks or

01:03:29.740 | large cap companies where they really get to sink their teeth into the balance sheets

01:03:36.060 | and income statements and they just love numbers and they like talking to management. Maybe

01:03:43.100 | that's the hedge fund type. The private equity guys are I think maybe more entrepreneurial.

01:03:47.660 | They have a vision of like, "How can I change this company to make it better?" And then

01:03:52.460 | the investment bankers, to become a successful investment banker, you have to eventually

01:03:58.580 | get into sales. And sales is not what most people are probably thinking. You have to

01:04:03.180 | go to companies and be like, "Hey, you know what? You should buy this other company and

01:04:07.500 | here's why." You have to sell the company on the idea of buying another company. Or,

01:04:10.500 | "You know what? You need to come with us and do your IPO with us because of this." And

01:04:14.340 | you have to sell them on the idea of listing their stock or going public with you. So you

01:04:20.740 | kind of have to be a salesperson to become very successful in investment banking. So

01:04:24.460 | maybe those are kind of broad stereotypes.

01:04:27.140 | Right. Nate, I think that'll be helpful because a lot of people are interested in finance

01:04:32.140 | that listen to this show, but it's an overwhelming world to an outsider.

01:04:37.220 | Well, the first step is to just get started. If you want to be like a great stock analyst,

01:04:44.620 | start analyzing stocks. If you want to become a great trader, start trading. There's nothing

01:04:50.800 | but experience. I mean, you can open a Scottrade account for like $500 or something and start

01:04:55.660 | picking stocks. And that's when somebody is interviewing you, especially if you don't

01:04:59.540 | have that Ivy League background in finance or whatever, they want to see that you're

01:05:03.180 | passionate about the job that you're applying for. Like, "Hey, you know what? I don't have

01:05:07.260 | much finance experience, but I spend three hours a day analyzing balance sheets of companies.

01:05:13.860 | And I watch Fast Money every day on CNBC. And I talk to my friends about finance all

01:05:19.060 | the time. And I've read these 20 books. And here are the lessons that I learned." People

01:05:24.760 | respond to that.

01:05:26.340 | Yeah, absolutely. I liked how you said, as far as getting a job, I think the key to getting

01:05:33.380 | a job is where you say, "Go and prepare a research report on an investment idea and

01:05:39.780 | go show it to people." That's very much, I think that works in every industry. Don't

01:05:43.820 | go and don't play this ridiculous game of, "I'm going to answer a job application and

01:05:50.340 | send in a cover letter and a resume." Maybe it works for some people, but it seems like

01:05:55.100 | a really inefficient way for me. In my mind, I would say, "Go do something and be remarkable

01:06:01.400 | in some aspect, and then go tell people and show people and try to help people." I'd rather

01:06:06.340 | go somewhere and say, "Hey, I'd like to work for you guys. I'll work for free for three

01:06:09.700 | weeks or for a month, show you what I can do, and then you can decide about hiring me

01:06:13.420 | then." I mean, it's just a different mindset.

01:06:16.980 | Yeah. Well, the other thing about writing the research report, that piece of advice

01:06:20.220 | came from a very successful hedge fund manager, by the way. When he was asked, "What's the

01:06:24.220 | best way for somebody to get a job at your firm?" That's the advice that he gave. So

01:06:26.860 | that's not just coming from me, but from other people.

01:06:28.540 | Yeah.

01:06:29.540 | But the other thing is you can use that research report to network. If you're a smart person

01:06:34.580 | and you have a good investment idea, everyone wants to read about it and learn about it

01:06:37.500 | because they are all looking for the best investment idea. So you can just call up people

01:06:41.100 | and be like, "Hey, I wanted to get your advice on this investment idea I have. Would you

01:06:45.860 | give me your opinion on it? Could you give me some advice on how I could make it better?"

01:06:48.700 | or whatever. It's kind of like that backdoor networking where you're like, "Yeah, you're

01:06:52.140 | not asking for a job, but now you've started a relationship with that person. If you show

01:06:59.780 | it to three people, you now have a much better research report, and then maybe they can introduce

01:07:04.100 | you to somebody who they know is hiring." Because you're right, blindly sending resumes

01:07:09.300 | isn't going to get you very far. But if you have now this network of intellectual, analytical

01:07:13.900 | investment types, they're going to try to help you out if you're a friendly person and

01:07:18.220 | smart and you work hard. And they might know of a job, and they'll be like, "Hey, go interview

01:07:22.220 | with this person." Now you get a referral, which is way better than a cold anything.

01:07:25.860 | Absolutely. 100%. I'd like to wrap up with just a little bit of information on the process

01:07:32.100 | of becoming a chartered financial analyst. I think you're the first CFA charter I've

01:07:36.020 | had on the show. I can't remember having another one. I do not hold the CFA charter. I'm interested

01:07:41.100 | in it, but it's probably...

01:07:42.100 | You've sold everything else, though. You've got a billion letters after that, which is

01:07:45.740 | very impressive on its own.

01:07:49.100 | Right. I'm sure I could do the CFA. It's just simply not as much of an area of interest

01:07:57.380 | for me because it's so analytical on the investment side.

01:08:00.700 | Yeah, you've got to be interested in it.

01:08:03.060 | Right. It's a beast. Explain to people, if you see the letters CFA after somebody's name,

01:08:08.740 | what does that mean and why should that count?

01:08:11.380 | Okay. There's a few different designations. CFA is the gold standard for investment analysis.

01:08:18.260 | If you want to work at a hedge fund or private equity shop, you want to get a job on Wall

01:08:21.660 | Street, CFA, nothing beats it. CFP is terrific if you want to be a financial advisor, more

01:08:28.780 | of a consultant, you're working with clients. CFP is the best designation for that.

01:08:34.500 | The CFA is three tests. Each one has probably a 40% pass rate. They're offered in general

01:08:41.740 | once a year. The first level is offered two times a year. If you fail a test, you have

01:08:46.660 | to wait a whole year to take it again, which is just awful. I passed level one and level

01:08:50.980 | three on the first try. I did not pass level two on the first try because it's very difficult.

01:08:56.460 | I decided to take it right after... I took level one in December and just tried to take

01:09:00.380 | level two in June. Not a good idea. Not a good idea because level two is by far the

01:09:05.820 | hardest. People think they can pass level one, level two, and level three will be no

01:09:11.500 | problem. Level two is just ridiculous. I knew one guy who studied for the CFA for eight

01:09:15.540 | years and finally got it. Other people study for six years and they just give up. This

01:09:20.780 | is not an easy test. You have to study probably six months before the exam to really have

01:09:27.140 | a good shot at passing it. I think you have to study at least 300 hours. I think one of

01:09:31.380 | the... is the general guideline. I don't know what you want to know about it, but it's the

01:09:38.380 | real deal. When somebody sees a CFA, it's just instant respect.

01:09:41.780 | Right. Absolutely.

01:09:42.780 | If you're looking for a job and you don't have a finance background, get the CFA, which

01:09:45.660 | could take you... which will take you a few years. If that's your purpose in life, get

01:09:50.500 | the CFA because that'll... people look at that and they're like, "Wow."

01:09:54.860 | I would like to point it out as a personal finance lesson and then just as an opportunity

01:10:01.100 | that most people don't think about. I think that these opportunities exist in almost every

01:10:07.940 | industry to do something like this. For example, I apply this thinking in terms of college.

01:10:14.140 | Many people are very focused on saying, "How do I go to college? How do I figure out how

01:10:18.900 | to do that? How to pay for it? How can I get the most prestigious college degree?" But

01:10:24.540 | if you are working in the finance space, I think it probably does matter to some degree

01:10:30.940 | whether or not you're... if you're trying to go straight to Wall Street and you can

01:10:37.700 | come from an Ivy League and you have a master... an MBA from Harvard or you have an undergrad

01:10:43.220 | from an Ivy League, that may matter a little bit.

01:10:46.300 | It definitely does matter.

01:10:47.460 | Until you get in the door and find out if you're good. But you started in Boca Raton

01:10:51.980 | and there's always a way to skin this cat. If I were 16 years old and I knew I wanted

01:10:56.540 | to work in finance and I didn't have the money to go to Ivy League, I would consider just

01:11:01.700 | simply punching the certification on the college. Go get the CFA and get your foot in the door.

01:11:07.140 | You can get your foot in the door there. CFA prep would be what? Five grand for the cost

01:11:11.140 | of the test and all the fees and everything? Do you have any idea?

01:11:14.100 | Yeah. Well, the first level is a lot cheaper than that. Some people go to MBA school and

01:11:18.940 | spend $100,000 or whatever. You can get the CFA all in, maybe five grand. And you study

01:11:27.620 | on your own time and you can still work while you're getting it so you can have an income.

01:11:33.580 | If you're hardcore about finance and you're debating between an MBA and a CFA, CFA blows

01:11:37.540 | it out of the water.

01:11:38.540 | Absolutely. And you got the... exactly. That was exactly my point. You got the difference

01:11:43.060 | between I'm going to borrow $80,000 and get an MBA or I'm going to spend $5,000 and get

01:11:48.580 | a CFA. Now, for those who know, the CFA is one of those things that say, "Wow, okay,

01:11:55.260 | that's a whole lot harder than an MBA." You can skate through an MBA without a lot of

01:11:59.900 | rigor if you're gifted academically. But you can't skate through the CFA. The test is designed

01:12:06.900 | to illustrate your knowledge or your ignorance. And every one of us who has been around in

01:12:12.620 | the finance business and who knows what all this stuff actually means, you are 100% right.

01:12:18.460 | The CFA, I have a tremendous amount of respect for people who have finished that program.

01:12:23.740 | And there's a way where you can knock $70,000 off the bill of an MBA just by taking $5,000

01:12:29.020 | and going the CFA route. Now, it doesn't negate the value of, perhaps, the potential value

01:12:35.020 | of an Ivy League MBA or an Ivy League undergraduate degree. But if I didn't have the money, if

01:12:42.260 | I didn't have the background, if I couldn't do that with a scholarship system, I would

01:12:47.380 | pursue the CFA route and allow myself to demonstrate capability and work ethic, rather than saying,

01:12:54.900 | "I've just got to go and borrow $100,000 so that I might be able to go and get this job

01:12:59.980 | on Wall Street."

01:13:00.980 | Yeah. Well, let me address that Ivy League issue. Some people think, "Oh, I could never

01:13:06.260 | afford it." But a lot of these Ivy League schools, if you are dirt poor, you can go

01:13:10.660 | to an Ivy League school for very little money. Because a lot of the Ivy Leagues, they want

01:13:19.500 | a well-rounded population and they don't want somebody who can't afford it. They're not

01:13:24.620 | going to reject somebody just because they can't afford it. They have lots of grants.

01:13:28.900 | If you're dirt poor but you are qualified to go to an Ivy League school, you can go

01:13:32.100 | there for really, really cheap. Which isn't true for, necessarily, middle-tier schools.

01:13:38.820 | But for the top schools, they want the best people no matter what. So you can go to these

01:13:44.260 | schools for really, really cheap if your parents are poor, or you're poor, or whatever. So

01:13:53.060 | don't let that discourage people. If you want to go to an Ivy League school and you can't

01:13:56.660 | afford it, well, guess what? You can't afford it. They'll make it happen for you.

01:13:59.900 | Right. I think culturally, we just don't bother to apply. And this kind of happens a lot of

01:14:05.780 | times. I remember years ago, I heard Zig Ziglar give an account he made of, he did an experiment

01:14:11.900 | where he made two newspaper job offers and the syntax of the newspaper ad for the classified

01:14:17.900 | section was the same. Except he did it in one major market and he offered $30,000 a

01:14:23.220 | year. And he did it in another major market and he offered $100,000 a year. And he got

01:14:28.500 | a massively smaller percentage of applicants to the $30,000. But the listed necessary qualifications,

01:14:34.500 | excuse me, he had a massively smaller number for the higher paying job, but the listed

01:14:38.940 | qualifications and requirements were very different. And it's remarkable because so

01:14:44.700 | many people just simply wouldn't see themselves as Ivy League material. Whereas, what's the

01:14:50.580 | harm of applying? Just apply and if you have some skill or some desire, things can be worked

01:14:58.580 | out. I think it's a good point you make.

01:15:00.580 | Well, that's something I address in my book, the limiting beliefs. So one of my favorite

01:15:09.180 | quotes in the book is, "Whether you think you can or whether you think you can't, you're

01:15:12.780 | right." It's a famous quote from Henry Ford back in the day. And so if you think that,

01:15:19.100 | you know, "I could never get an Ivy League school," or "I could never get a job in finance,"

01:15:23.420 | or "Oh, I'm not smart enough for this." You're right. You're simply right. You're not. But

01:15:28.540 | if you think, "You know what? I do have the potential for this. I can become a Wall Street

01:15:32.820 | billionaire. I really can. I do have the potential. Even though I have limitations, I can figure

01:15:37.180 | it out." Well, then you're right about that too. So really think about what you want and

01:15:43.220 | then believe that you can do it and then be willing to work hard to get it. But if you

01:15:46.020 | think right from the start that, "Oh, I can't do that," no matter what it is, you're right.

01:15:50.900 | You probably can't. But everyone has the potential to do whatever they want, especially in today's

01:15:53.980 | economy.

01:15:54.980 | >> An excellent reminder. Because no matter how--I think all of us, no matter how much

01:16:01.140 | we--no matter how much we think, you know, I recognized a few weeks ago just even that

01:16:08.340 | in my own thinking. I was up in Pennsylvania and I thought about calling John Bogle for

01:16:14.460 | an interview because I've read several of his books and I thought, "No, he wouldn't

01:16:17.420 | talk to me. I just have this show." And I had to--and I caught myself thinking that

01:16:22.420 | like, "I haven't interviewed enough famous people yet to really have the platform, you

01:16:26.540 | know, to call him for an interview." And I was pretty ashamed of myself because there's

01:16:32.380 | no reason why I can't call him for an interview. There's no reason why I couldn't have popped

01:16:35.820 | in, you know, and said, "Hey, I'd like to--I brought my voice recorder. I'd love to talk

01:16:39.900 | to Mr. Bogle if he's available and I'd love to talk with him." But I had the limiting

01:16:44.540 | beliefs and it was--I was pretty embarrassed to find myself thinking that way. I wound

01:16:49.300 | up deciding not to do it.

01:16:50.300 | >> It happens to everybody.

01:16:51.300 | >> It happens to everybody. It's all of us. And no matter how much we think we're immune

01:16:53.900 | to it, we're really not.

01:16:55.380 | >> Yeah, absolutely.

01:16:56.820 | >> So, well, Joey, thank you so much. I think this provides a really interesting insight

01:17:02.660 | into people's--into the world of finance. And I'd encourage people, don't forget, I

01:17:08.300 | mean, the latter half here, we haven't been talking about the book, but go over to Joey's

01:17:12.140 | site, Pirates of Financial Freedom. You've got the first chapter on there for free, right?

01:17:15.220 | And then the first half for 99 cents, you said? Or--

01:17:17.980 | >> I've got three sample pages on the site.

01:17:20.700 | >> Okay.

01:17:21.700 | >> And then you can get the first half for 99 cents on Amazon if you just want to kind

01:17:24.900 | of preview it.

01:17:25.900 | >> Yeah. Do the first half for 99 cents and read that. And then check it out, consider

01:17:29.780 | it for your Christmas gift list. And I think it'd be a valuable work. And keep writing,

01:17:37.660 | Joey. We need more and more in this genre. So since you've created it, you now have the

01:17:42.660 | opportunity to be the master of it.

01:17:45.020 | >> Absolutely. Well, I'll do my best.

01:17:47.340 | Anything else that you'd like to share? Or anything I missed?

01:17:52.380 | >> I just want to say you did a great job on this interview. I had a real good time.

01:17:56.180 | And you keep up your good work, too, because I'm going to be--I'm going to check in with

01:17:59.900 | you every now and then and see if you've got that Bogle interview.

01:18:02.620 | >> Absolutely.

01:18:03.620 | >> That needs to be your goal. Within the next two years, I want to have you interview

01:18:07.260 | him and I'll cheer when you do.

01:18:09.940 | >> Absolutely. That would be wonderful. I've got--the biggest challenge that I'm facing

01:18:15.220 | right now is just the amount of time needed to do some of the things. I mean, I'm here

01:18:19.700 | in Palm Beach and season is coming. And every big wig of finance--every big wig of--many,

01:18:27.260 | many big wigs of finance are here and will be here during season. So I've got a unique

01:18:31.740 | opportunity that if I can get the introductions, I can go and visit with people here during

01:18:38.820 | the Palm Beach season. But I've got to build it into the time. And I just am feeling so

01:18:44.140 | stretched with all the different things that I've got going on. I've got to build in the

01:18:47.940 | time to make the connections through the contacts that I do have, to get the referral, to get

01:18:52.660 | the introduction, to get the appointment, to get the interview, and then go in and bring

01:18:56.820 | the interviews to the show. But the urgent and the important are often--are sometimes

01:19:01.540 | at war. And oftentimes, I'm making time for the urgent and not necessarily the important

01:19:08.220 | and non-urgent.

01:19:09.220 | >> That's a common problem for everybody. Like, you know, the last chapter in my book,

01:19:15.420 | it talks about my weekly goal-setting system of setting smart goals and having an accountability

01:19:19.300 | partner to make sure you get the things done that you want. And then also, I've been overwhelmed

01:19:24.860 | with work myself, and I found that time-blocking really helps. So some of your listeners are

01:19:28.900 | like, you know, "I'm not getting my goals done," or "I'm just busy but not productive."

01:19:35.860 | You know, look into that goal-setting thing or time-blocking each day. I found that that's

01:19:40.980 | helped a lot in my own personal life.

01:19:43.140 | >> Absolutely. Well, awesome. Joey, thank you for coming on. I really appreciate your

01:19:46.580 | making the time.

01:19:47.580 | >> Well, thanks for having me. This was great.

01:19:50.580 | >> I hope you enjoyed that. I know Joey's not going to want any competition, since he's

01:19:59.020 | created a monopoly in his business. But I would like to encourage some of you in the

01:20:02.780 | audience who are excellent at finance, at concepts of finance, and you know a lot, you

01:20:08.700 | understand a lot. I know many of you listen to the show because I've heard from you. And

01:20:11.940 | I would encourage many of you to maybe consider adding your own form of media. Perhaps you

01:20:19.220 | might be able to take my idea and write the Hardy Boys series books of business success.

01:20:24.620 | I know that we seem to be going toward a more of a—as a culture, we seem to be going in

01:20:31.060 | the direction of more of a video, multimedia type of context. But I really want some of

01:20:36.060 | these great books to succeed that teach business lessons, that teach life lessons. So maybe

01:20:41.460 | you can do that project. I don't know if I'll make time for it in the future or not. I'm

01:20:45.340 | not ready to make time for it at the moment. But maybe you can. So consider if you can

01:20:49.700 | use some art, some form of art that you have to teach people something that will be helpful.

01:20:58.620 | You probably have about enough financial blogs out there. There's enough financial books

01:21:02.960 | that are boring and dry. But maybe you can bring up and bring in some valuable new ideas

01:21:10.520 | and present them in a different way. If you have done projects like this, I'd love to

01:21:14.240 | hear from you. I'd love to profile things like this. I'd encourage you to go check out,

01:21:19.960 | read the first half of the book, see if you like it. That's a good deal. Pay a buck and

01:21:23.880 | read the first half and then maybe order a half a dozen or a dozen or so for your friends

01:21:28.880 | and family for Christmas. And let's use some of this new art, not new, but let's use some

01:21:33.080 | of these art forms to spread the message of financial independence and financial prosperity

01:21:38.480 | to more and more people. Thank you so much for listening today. I want to thank all of

01:21:43.040 | you who have been subscribing to the show. I want to thank you for that. That is helping.

01:21:48.960 | So please make sure if you're not subscribed to the show, if you like the kind of content

01:21:52.600 | that we had today, I'm here every day, Monday through Friday, five days a week with in-depth

01:21:56.840 | shows that hopefully are easy to listen to every day because we vary them dramatically

01:22:01.520 | as days go by. Make sure that you subscribe to the show. I would love to have some reviews

01:22:05.340 | on Stitcher. I still only have five reviews over there. So if any of you are listening

01:22:10.120 | on Stitcher, it would really, really, it would really helpful, be helpful if you would take

01:22:13.880 | a few minutes and review the show over there. That would mean a lot to me. Thank you so

01:22:17.080 | much. Thank you for listening. Tomorrow, I think I'll be back with a Q&A show. And then

01:22:23.160 | I got a bunch of interviews lined up next week. Still have room for some questions though.

01:22:26.720 | If you call them in this afternoon, today as the show goes out, I may be able to get

01:22:31.080 | them on tomorrow's show. So come on by and leave them. Thanks for listening, everybody.

01:22:35.160 | Have a great Thursday.

01:22:36.160 | [music]

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01:23:04.160 | [music]

01:23:11.160 | [music]

01:23:18.160 | Thank you for listening to today's show. This show is intended to provide entertainment,

01:23:23.160 | education, and financial enlightenment. Your situation is unique and I cannot deliver any

01:23:31.720 | actionable advice without knowing anything about you. This show is not and is not intended

01:23:39.940 | to be any form of financial advice. Please develop a team of professional advisors who

01:23:48.200 | you find to be caring, competent, and trustworthy. And consult them because they are the ones

01:23:55.920 | who can understand your specific needs, your specific goals, and provide specific answers

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RPF0087-Joey_Fehrman_Interview