Welcome to the Radical Personal Finance, a show dedicated to providing you with the knowledge, skills, insight and encouragement you need to live a rich and meaningful life now, while building a plan for financial freedom in 10 years or less. My name is Joshua and today we're going to talk about the power of beta.

Let me quickly clarify what I mean. Put very simply, if you can observe some large-scale macro trends and then align yourself, perhaps your career, perhaps your investments and your assets in line with those trends, then I'm convinced that you can win even if you don't happen to be the smartest person in the room.

You just simply need to observe and align yourself with some trends and then get some big-picture decisions right. Now let's first begin with a discussion of alpha and beta. I'm going to use these terms in a way that they don't specifically mean, but I'm drawing inspiration from what they mean in the marketplace of stock research and stock investing.

Usually when you talk about investing, the term beta is a measure of volatility of a particular investment, the ups and downs, the volatility of an investment relative to a benchmark. And so what beta does is it measures the systematic risk of a specific security or a specific portfolio when compared to an index, like say example, the S&P 500.

That's what beta is. What's most interesting in your mind is to think about it in terms of alpha. What is alpha? Well, alpha is generally understood in stock investing to be the excess return of a particular stock or a particular mutual fund or a particular portfolio as compared to the general marketplace.

Now, that's what they mean in investing terms, but I'm going to just take inspiration from that and not try to talk about this in a technical sense. I'm going to analogize these terms alpha and beta and apply them in a very broad sense. Just note that from here going forward, these answers are not going to be correct on a CFA exam.

I want to simply take these terms as inspiration to talk about this concept. When I think about alpha, I think very simply about outperformance. I think about finding a star, finding a winner. In the investment world, when you get alpha, it's because you're just a magical portfolio manager. You can come in and you can say, "I know how to pick the very best stock.

I know how to pick the very best company." Perhaps you go into a marketplace where there are five different packaged goods manufacturers and you say, "This particular company has a star of a leader. Because of that star of a leader, I know that this company is going to win." Perhaps you observe a telecommunications company and you say, "This telecommunications company has an exciting new technology.

I'm going to come in and I'm going to invest in that telecommunications company because it's going to be a winner." The idea is in time you can generate alpha, you can generate outperformance. In life, we often think of ourselves as needing to generate outperformance. We often think of ourselves as needing to be the star, needing to have the best of skills, needing to have the ability to go beyond where other people go.

Now alpha is awesome. If you can create alpha in your portfolio, you can do very, very well for yourself. You can make a fortune if you can do it in the investing world. If you can create alpha in your own life by being a star, you can do very, very well for yourself.

Unlike perhaps the world of investments, which is maybe challenging for many of us, you can do this in your career. You can be the hardest working guy in the room. You can be the most prepared prior to the important meeting. You can be the best researcher. You can be the person that goes the extra mile.

You can be a star employee. Or you can run a business that does very, very well. The challenge is this. If you get alpha right, but you get beta wrong, it's very hard to be successful. But if you get alpha right and you get beta right, now you have a winning formula.

Again, remember, I'm not using these terms in the CFA sense. I'm trying to simply drive a concept. When I think about beta as compared to alpha, I think about the marketplace as a whole. I think about how is this general market going to do. What's going to happen with, say, telecommunications?

Or what's going to happen with space travel? Or what's going to happen with the airline industry? What's my sense of the market? And then when I come back and I think about my life, I find even more applications for this. I think about not am I the person who is by definition the best, but am I lined up with where the market is going?

Because if you're in a rising industry or you're in a rising company, now you have the ability to succeed even if you may not be the star employee. The 10th hire to Facebook wound up becoming very, very rich, even though they were the 10th hire. And you can apply this all the way down the road.

So the question for you to ask yourself is, am I getting my beta right? You might run the very best company in your industry. You might be the world's greatest entrepreneur, able to make the best decisions. You might be the world's greatest manager running a very well-run company. Your company might make the very best products.

But if the year is 1900 and your company is engaged in the business of building buggy whips, you didn't get it right. You didn't win. You probably didn't survive. Now I would be quick to point out that of course that's not guaranteed. Maybe today you're the world's greatest buggy whip manufacturer for the 577 people per year who buy a Surrey and hook it up and race their horse at the local track and they need a whip.

I don't know. The point is pretty obvious. The market changed under your feet. But if the year was 1900 and you saw the direction that transportation was going and you got involved in the industry, there was a very good chance that you experienced more success. Now you may have joined the wrong company to start with.

And I'm going to use a couple of legacy industries. Think about something like automobiles. Getting involved in the automobile industry when people are still trying to figure it out and you've got hundreds and hundreds of different people making 10 cars a year. The fact that you're involved in the automobile industry because you saw the direction of the industry was going didn't necessarily guarantee that you were going to be successful.

You may have joined a company that had a bad product. But the fact that you were around the automobile industry and you saw the direction of the industry got you a step closer to success and there was a pretty good chance that you had a timeline of success. And then once you're in the industry, you can look around and try to figure out who's going to be the winner in this industry.

Is it going to be Ford Motor Car Company? In which case you may have gone and hitched your wagon up to Mr. Ford because you said this is going to be the winner. Or maybe it was airlines. Maybe you observed after the airplane was invented that, you know what, air travel has the potential to change the world.

And if I go and get involved in air travel, then I have the ability to be in something that's going to be transformative. You may have ended up working for a company that went bankrupt. But once you're in the industry, you can adjust. You can look for your alpha.

You can look for the opportunity to be the best employee at the best company. But first you've got to get your beta right. You've got to get the industry right. And you've got to get the direction of the marketplace right. Maybe it was telecommunications. Perhaps it is telecommunications. But maybe you were involved in telecommunications and it was the 1980s and the 1990s.

You said, you know what, the fact that we can make a phone call from anywhere and carry a phone on our hip, this is going to revolutionize the world. And if I just get involved in this industry in some way, there's a good chance that I can make my fortune.

Well making that move doesn't mean you don't wind up at a bankrupt company. But what it means is there's a much better chance that you're on an upswell. As the axiom goes, a rising tide raises all boats. Maybe it was the dot-com in the early 2000s. Maybe it was real estate.

I don't know. But when you see a trend and you observe that trend, my point in today's show is that you should pay attention to it. And you should think about how can I get involved in this trend? Can I get the beta right? So how can you apply this to your own finances?

Well, the first thing that I would emphasize is that you should apply this to your income, to your earnings. I'm going to give an example of two different trends that I observe, especially trends that could be found in the space of where you're earning money. The first trend would be a legacy industry that may be on the decline.

In my mind, a good example of this industry would be the role of a real estate agent in the United States of America. For a very long time, working as a real estate agent has been something that could be a very profitable and very – a really nice way to make a living.

I have actually frequently recommended to people that they consider working as a real estate agent. It's the kind of job that I think I would be a pretty good fit for and that I would enjoy. Working as a real estate agent can be a very good career. But in my opinion – this is my opinion – it is a career that at least in the United States – I don't know all markets around the world, but in the United States, it's a career that is on the decline.

Why? Well, because in many cases, the individual work and service of an agent is increasingly replaced by Internet technology and by people's comfort levels with going and seeing and viewing properties online, choosing among properties online, doing tours, virtual tours, establishing their own things, etc. Now, I'm not saying the industry is dead.

I'm saying that I think the industry is significantly on the decline. I think that you're having the big players that are coming in that are disrupting the marketplace and I will be very surprised if five years from now, ten years from now, a traditional real estate agent can command the same level of commissions today that they've been able to command for many years.

I'm not insulting you real estate agents. I'm saying I think this is a good example of a trend. So if I were in the real estate business, I would be observing and looking at this trend and saying, "I think my career may have a limited time span, shelf life.

I think that within a period of years, this particular career in the United States is going to become less profitable and more difficult." We could have used other careers as well. For example, this one's more difficult because there's more factors, but let's just stick with a career with real estate.

That'd be an example of, in my opinion, of a career that's on the decline in the United States or at least its prospects are not as bright as it once was. Don't think, by the way, that these things will change overnight and all of a sudden. I could say a similar thing of the pressure on financial advisors.

Financial advisors are under intense pressure in the current world. In the 1980s, it was very easy to be a financial advisor and make a lot of money selling stocks, charging management fees, et cetera. But the pressure, the financial pressure on financial advisors has been intense so that now it's very hard to make a living going out and selling stocks for a commission.

I know of virtually no financial advisors that can actually do that successfully, sell stocks for a commission. Why? Because you had market pressures. You had the market pressures of no commission stock brokerage houses. You had the market pressure of index funds. You had a mammoth like Vanguard that came in and brought tremendous pressure against the industry.

You had all kinds of fracturing in the financial industry such that now financial advisors had to go in a totally different direction. Doesn't mean the career is dead. It means it's under intense pressure and it's not as easy as it once was. If you're going to be successful, your success matters depends much more on your alpha, on what you bring to the table than on the beta, on what the industry actually provides for you.

In 1980, if you came to the table and you picked up the phone and you did your cold calls, you could make a great income selling stocks over the phone if you were persistent enough. In 2020, you cannot. It's a totally different business model and you've got to be much more intelligent about it.

So there are two careers as an example. Now where could you go where there's some sense of growth? Well I think there'd be many examples. Last night I was looking around online in the cryptocurrency space and I was observing that now there are several dozens of degrees available right now in blockchain technology from really all over the world, but you can now go and you can get a degree in blockchain technology.

Last night I was looking at the website for the University of Malta. Malta between Africa and Europe, a little island off the tip of Italy, has sought to bill itself as blockchain island. They've tried to be very friendly. They've tried to establish regulation for cryptocurrency businesses with I would say mixed success.

Not as much success as was hoped thus far and we'll see what happens, but they've tried to bill themselves as blockchain island. So the University of Malta has a career, sorry, has a master's degree program that you can go and you can be involved in and get a master's degree in blockchain technology.

In my opinion this would be a pretty good example of an area where there's massive growth, of an area where if you are competent in some skills relating to cryptocurrencies to blockchain technology, this is something where there's a lot of career growth. When you have Bitcoin hitting 50, almost $60,000 per coin and with just only modest signs of stopping, now all of a sudden you see a pretty significant field and then you see people and countries and companies trying to say, "How can we take this new technology and apply it in different areas?" Now I don't know what the end of the day is, where we're going to be 10 years from now with cryptocurrencies and with blockchain technology.

There's a lot of reason to believe that they'll be an integral part of our lives, but this would be an example of the type of career where I think things are in a growth pattern. Now perhaps that's a little bit too innovative or a little bit too rare for you.

I think another obvious example would be something as simple and mundane as being a software engineer. You could begin today with no history, no knowledge. You could be working as a real estate agent today, looking down and realizing, "My career is declining," but you can start studying software engineering entirely for free, by the way.

No need to take any classes that you pay for. Start doing projects. Start going through the various coaching sites and the education sites and whatnot. Then a few years from now, you could have a six-figure job as a software engineer with massive growth potential, and as the world moves more and more intensively in the direction of software solutions for more and more parts of life, the need for software engineers is intense.

I don't see any way that that particular career is in decline at the moment, although there may be heavy competition, it's not in decline. And there are many other examples of these. Now don't just think that if you just find beta, it's good enough, or if you just have alpha, it's good enough.

I think the power – I teach a course on career and income planning. It's called the Radical Personal Finance Guide to Career and Income Planning, available for you today, right now, at radicalpersonalfinance.com/store. And one of the concepts that I teach in that course is the power of choosing very carefully and maximizing both your beta and your alpha.

Somebody who carefully chooses an industry that is growing in a location, a geographic location of the world that is growing and where the trends are in the right direction, and they choose the best company in the industry that has the brightest prospects, and then within that company, they choose the best segment, the best division of the company, where it's the most important division of the company.

And then to the degree that it's possible, they choose the best boss in that division to work under, and they choose the best job position for them. And then they go into that workplace and they work their tail off, and they become an absolute star exercising their alpha. That person is going to be light years away of the person who has the capability and potential to be a star, but works under a bad boss in a division of a company that's not particularly valuable, in a company that's poorly run, and in an industry or a geographic place in the world that's in decline.

So to get the maximum benefit in your career, you want to stack all of these things on top of each other. In summary on the career perspective, think carefully about the trends that are happening. I've listed a number of trends, but think carefully about these. It's all well and good for you to be personally success oriented, for you to be the person who has the basic skills to be effective and successful and valuable in the marketplace.

But if you're not positioned well, again, think about your boss. If you're under the wrong boss, that can be the death of you. Not in and of itself. If you're under somebody who is not going to raise you up with them, if you're under somebody who's not going to recognize it when you make them shine, you got a problem.

Change to a different boss. If you're in a division of the company that's not particularly contributing to growth, change. If you're in the wrong company, change. But the big ones to get right are industry and I would say also geography. Think carefully about your industry. You may, and this is one of the things that I get upset a lot of times with the concepts of passive investing, of saying to yourself, "I can't successfully choose what stocks are going to outperform." And the reason I get upset with it is not because I have the ability to argue with the academic research.

I don't. I'm not a researcher at the Chicago School of Economics who could sit down and generate new economic investing theories worthy of a Nobel Prize. It's not my forte. But what I think happens is I think that people take it too far and I believe that this has hurt me personally.

I'll start with me personally. When I was younger, I spent so much time being told by the financial industry that, "Well, Joshua, you can't tell successfully with any statistical reliability, you can't tell what's going to outperform." And I was told that again and again and again and I would read the academic literature and I didn't have the ability to refute it.

I didn't have the ability to say, "Well, wait a second. Wait a second. Yes, you've got your hypothesis, Mr. Fancy Pants Academic Researcher, but I think I can." And what would happen is I would just say, "Well, I can't do it. I can't predict it. I can't predict it." The problem is for me, this went far too far, far beyond what the academic research would indicate to areas where the academic philosophy, sorry, the academics who created that numerical modeling that said, "Hey, it's very difficult for a fund manager to outperform." I absorbed this concept in my own life to much too great of a degree and I came to the perspective and I said, "Well, I can't predict what market's going to be.

I can't predict what stock is going to be the next winner." I didn't understand that there were ways to make money on stocks even if I couldn't predict it successfully and to ensure my bets. I didn't get that. I wasn't sophisticated enough at that time. Then I thought, "Well, I can't predict what market segment or I can't predict the general direction of the stock market or I can't predict what industries are going to take off or I can't predict what regions of the world are going to be successful." When I test those ideas, I realized that I was completely wrong.

Now, I may not be the world's best stock picker, but I can look at something as simple as demographics and make some educated guesses about where I think things are going. Now, in the fullness of time, will I turn out to be right or wrong? I don't know, but I can make some educated guesses and I'm willing to put my money behind that.

This is just, again, speaking personally for me. When I finally realized where this came from, again, I become frustrated with passive investing because I believe that one of the dangers, maybe not for most people, but at least for me, one of the dangers was that it led me to doubt my own abilities.

I'm not so much of a maverick in the sense of my ability to go against everybody and say, "Well, I just have it all figured out." I admire people who can. I admire somebody who can stand up in a room full of people saying, "That thing is white." They can say, "No, it's not.

It's not white. It's black," and they can be totally convinced of it. I'm too much of a researcher and analytical and I say, "Well, listen, if 98% of the people say it's white, there's a very good chance it's white and I want to see some really good evidence that it's actually black before I open my mouth and say it's black." So if I've had 18 years to do the research, then I might be willing to be one of the 2%.

In some things, I'm totally willing to be the 2%, but I'm not willing to open my mouth at an early stage where there are other people who are just – they have a gut instinct and they say, "No, this is the way it is. This is the way the world is." I admire those people.

That's not me. And all of that idea about the efficient market hypothesis, I took it far too far in my own life and it's hurt me because I didn't have the forethought to be willing to take bets on things that I thought were true. Well, speaking personally, now that I have identified that, I'm changing.

I was wrong. I've identified to the best of my ability the source of why I was wrong and now I reject that previous way of thinking and I'm willing at this point in my life to take bets on myself and on my own hunches. I have a good safety mechanism with good financial planning to say, "Hey, I'm not going to ruin myself," but I'm willing to bet my money on what I think is happening and I'm willing to bet my life on it.

I'm willing to make life decisions on it. I'll give you a couple of examples. Geography matters. Geography matters to your daily experience of life. I've tried to emphasize how important that is. If you like living a beach lifestyle, choose a beach place to live. If you like a mountains lifestyle, choose a mountains lifestyle to live.

But geography also matters to economics. This is why all over the world, the trend is for people to move from rural regions into cities. As far as I can tell, the continued growth of mega cities is inevitable. I guess inevitable is too much of a word, but it's a very strong chance that the cities are going to continue to grow.

Doesn't mean that all cities are going to continue to grow everywhere, but on the whole, speaking globally, mega cities and very large cities, as I see it, are going to continue to grow because what they offer is a very, very compelling set of benefits. Now there may be difficulties.

New York City might be in a difficult place right now. San Francisco might be in a very difficult place right now. I think there's good reasons to believe that the difficulties in these particular cities will continue, but I don't expect Mexico City to continue to be in a difficult space.

I don't expect Istanbul to face those same trends. There are some unique trends, I think, about certain things that are happening in the US culture that are going to continue, but at the end of the day, New York is still going to continue to be attractive to many people.

On a global basis, some of the other global mega cities have some benefits that a city like a New York City doesn't have. I think this trend is going to continue. So if you were living out in the country and you wanted to get yourself in the way of a beta trend, you're going to find it easier to build wealth, to get a good job, if you move from a little podunk town in the middle of nowhere to a city.

There are going to be more economic opportunities, which is why millions and millions of people all around the world are doing this. If it's not right for you, you don't want to live in a city, it doesn't mean you have to, especially today. You can make a fortune in the country, but you should be aware that if you don't have any better ideas, you can probably increase your earning power by moving to a city.

But let's talk about globally. This to me seems obvious. I personally am convinced that most of the West, specifically Western Europe and North America, most of these countries are in either malaise or decline. I don't think that they will be in precipitous decline. I think what's more personally more likely is a general sense of malaise.

Where I'm most familiar, of course, the United States, I think you see this. You see just this general sense of lack of optimism for the future. You see incredible levels of discontent, of discord in the society. You don't get a sense of a people bursting with energy and a vision for the future.

You don't get a sense of collaboration. Now what can change this? I don't know. Maybe some amazing leader could come along and re-inspire it. Maybe a JFK could say, "We're going to the moon." And all of a sudden everyone said, "Yes, we're going to the moon." I love to watch Apollo 13.

I love to see a movie like that and imagine what it was like to be living in a time when you do that. You have some of that pride when they land a rover on Mars. I have some of that pride when I watch SpaceX launches. I really enjoy watching SpaceX launches with my children.

I gain some kind of glimmer of that sense of nationalistic pride again. So maybe it happens again. It could. But in general, I think there's good reasons to believe that these areas are in decline. I'll give some examples just so that you can consider for yourself. In my observation, there are probably three big things that – maybe four – that really hinder the West generally, Western Europe, North America.

I'll just speak mostly about the United States. One of the most obvious ones is population decline. Most Western countries have birth rates far below replacement rates. So you don't have a stable sense of population, but you have declining population. Now this is generally being offset right now with immigration.

You have a country like Canada, this relatively small country that's importing hundreds of thousands of immigrants every year to try to lead to economic growth and seems to be successful, at least in some measures, things like real estate marketplaces, et cetera. But it's primarily happening through immigration. Immigration brings its own unique set of challenges.

You see this all around the world. In my experience, I've never traveled a place where there's just been total complete peace and harmony between large numbers of immigrants. You see this in Western Europe. You see general sense of societal unease relating to immigrants from Africa. You see this in North America with immigrants from all over, but in the United States especially from Central America.

And so you see this general sense of tension happening across the society, at least a political strife, et cetera. Why? And does that change? I don't put my opinion. I don't think it changes. Number one, the cultural trend seems to be against having children, which means declining population. And while I think that most of these countries with declining populations are going to have to massively increase their immigration perspectives, at this point in time, I don't think that there's a solid enough home country culture to lead to successful assimilation of immigrants.

And so I think we're going to see more and more balkanization, so to speak, more and more separation, where instead of having immigrants being able to be assimilated into a strong central culture, you'll see various groups of immigrants retaining their own local identity rather than grasping the central identity.

You see this right now in France with the French government seeking to pass laws requiring the French Muslim community to integrate more fully into the community. And this is especially, I think, challenging in secular cultures like you see in France, because my personal opinion, I don't think secularism has the foundation to do that.

I personally think that you'll see much – a massive growth of Islam throughout Western Europe rather than a growth of secularization we'll see in the coming years. But this point of population growth is a major factor. Now what does this matter? Well, it ties into the second time, the second thing.

When you look at a culture like the United States, you see that it is burdened by the decisions and the promises of the past. So you had a previous very robust, very healthy economy, very healthy country. You had growing populations. You had economic growth. It seemed like the sky was the limit.

And so then you had people come out and pass all of these ideas. We're going to have Medicare. We're going to have Social Security. We're going to have social safety nets. We can borrow money to expand. It's all going to be great. It's going to be fantastic. But then when you have a declining population, all of a sudden now those promises don't work anymore.

And yet the society is still burdened under the weight of these things. So you see the political instability in the United States. You see this whipsaw effect between a George W. Bush and then a snapping all the way over to a Barack Obama, then a snapping from a Barack Obama to a Donald Trump, then a snapping from a Donald Trump to a Joe Biden.

And then we'll see what's next. Why? Well, you have this government that is laden by decades and decades of promises, but those promises weren't paid for. And so it's very easy for a politician to identify the problems and with skillful public rhetoric to rile people up to vote for him.

But then when he comes into office, there's virtually nothing he can do because there's this immense bureaucracy whose hands and feet are all tied by all of these promises. And the US president elected in 2020 can only affect a tiny percentage of the budget compared to a US president elected in 1920.

Why? Because 75% of the budget goes to Medicare, Medicaid, Social Security, and military spending. So you have a country that's mired in these decisions of the past and these expectations that were built for a society that no longer exists. And this leads to a sense of malaise, a sense of frustration.

In the same way, so I'll finish it. And then you have a world in which you have a flattening occur. And many of the geographical features, many of the technological features where you had US American superiority, well, those areas of superiority are no longer as clear. So you have a massive empire that's difficult to maintain.

And it seems to me, I don't see a lot of room for things to run personally. So when I think about where are things likely to be in the West in the coming years, where are things likely to be in the United States economically 30 years from now, 50 years from now, again, could be wrong.

But to me, it seems pretty obvious that without a massive level of bankruptcy to clear the old debt, that a society like the United States is going to be pretty well mired in malaise for quite a while. Let's use a personal finance example. Imagine a guy, maybe a 55-year-old guy.

He's been really successful, very successful. But the reality is he's more tired at 55 than he was at 25. And imagine that he built his whole life thinking that he was going to be as energetic at 55 as he was at 25. And he made all these decisions to borrow lots and lots and lots of money to sign himself up for all kinds of obligations.

And so his financial life became very, very heavy. And now at 55, he's trying to maintain the image of being the guy who still got it all together. But the reality is he's not as vigorous or as productive as he used to be. It's kind of how I picture the United States.

It's not that the 55-year-old guy is going to die today. It's just that he's really burdened down, right? He's got a lot of debt. He's not as young as he once was. He doesn't have the advantages he once was. He can't move his fingers on his iPhone screen as quickly as his 15-year-old son can.

And yet he's living in a world in which that iPhone screen is a ticket to wealth for many 15-year-olds. It's not to say he's not powerful, right? The 55-year-old guy has connections. He has power. He's got all of the legacy that he has. But he's aging and he's burdened.

So now compare that kind of society with some other societies. Compare it with Asia. Now the birth rate story in Asia is not strictly clear. Asia is a very big place. You have a place like Japan that's had negative birth rates for 40 years. But that would be compared with a place like Thailand or Vietnam or Cambodia where there's much more of a sense of energy and there's much more of a growth.

I think birth rates matter massively. You can see when you see a culture that's expanding, there's a sense of optimism and growth and that youthful energy can bring a lot of instability, right? You see that. You see a society where there's a lot of young people but low employment and it can be very unstable.

But it can also bring tremendous economic growth. You go back to the baby boom in the United States. It made a massive difference in terms of the economic growth of the nation. So birth rates, population makes a big difference. But what's more important? Well, many of these societies in Asia are not burdened down by the debt, the promises, right?

The decades and decades of promises that a place like the United States is. I think what's also very important is when you look at the relative level of poverty versus wealth. In my mind, the economic opportunities for Asia, Africa, South America, they're clearly bigger because there's clearly more room to go.

There's clearly more opportunities. It's very hard I think to look at a wealthy nation, to look at Singapore, right? That's a spectacular success story in itself. But let's just look at the United States, right? It's very hard to look at a nation like the United States and say on the whole, how do standards of living increase significantly?

Generally when people think about increasing standard of living in the United States, they think about making things easier and less expensive rather than having more, right? They think about saying, "Well, let's have government-provided health care programs because that makes life easier for you and removes a burden of providing for your own health needs.

Let's provide some kind of income. Let's give more money to poor people and provide poor people with more." But when you come to actual standard of living as measured by consumption, it's hard to see how you get a lot more consumption across the board. And when you have an economy that's built on consumption, it's hard to see where the massive growth comes from.

Maybe there's a new technology, right? Maybe you saw this in telecommunications and some things over the last few decades. Maybe there'll be a new technology that we just don't see right now. But even if there is a new technology, it's hard for me personally to see how that results in a massively growing economy.

But when you go to a place like China and you think about 30 years ago what the average person was living in versus today, it's just night and day. When you go to Mexico and you look at the broader Mexican population and you think about the consumer goods and the lifestyle choices and whatnot that many Mexicans would like to have, the beta, meaning the opportunity to rise, seems so much stronger in my opinion.

Because you have people that want a lot of the luxury goods that you see in some other economies. So to me it just seems fairly obvious that a simple decision like that would make all the difference in the world. Jim Rogers had a famous quote, or had a quote, I don't know if it's famous or not, but it's something that's always stuck with me since I read his book when I was in high school.

He wrote this book called, I think it was Adventure Capitalist. I think that was the one with him and his car. Jim Rogers was a stock fund guy, a mutual fund manager, maybe a hedge fund guy, I can't remember. Very successful trader. And I got interested in him, stumbled across his book in the library because he had this book of this yellow car that was built on a four-wheel drive chassis.

And I grabbed it and I just thought it was so interesting. I read his story. And what happened was he took a Mercedes, he had made a lot of money, decided he wanted to travel around the world. Younger in his life, I think in the 80s, he had motorcycled across China and that had changed his perspective of the world.

And then he had made a lot of money and he and his wife, I think his third wife at the time, or maybe second, I don't remember, but he bought a Mercedes G-Wagon, a Glenda Wagon, Glenda Wagon, and Wagon, I guess, a G-Wagon. And he had them take the body off of it and he had them put the Mercedes convertible body onto it, which they adjusted.

And so he had this wacky looking car and then he made a little trailer for it and he proceeded to drive around the world visiting all these countries. So I read his book and I don't remember if it was in that book or later, but he had this saying where he said that a wealthy, or sorry, a smart man in 1800 would have moved to London.

And what I would add is a smart man in 1800 would have moved to London and had his fortune made. A smart man in 1900 would have moved, I think he said to New York City, maybe San Francisco, I can't remember, but would have moved to New York City or San Francisco.

And I would add, would have had his fortune pretty well made. Just the simple fact of moving to New York City or moving to San Francisco in 1900 would have put you in contact with so much opportunity. A smart man in 2000 would have moved to Singapore. One fifth of every resident or citizen of Singapore is a millionaire today.

It's one of the most incredible success stories of the 21st century. It's an amazing story. And I think if you think about that, you can see how being in the right place where there's this social growth, where there's this growth of economy, growth of opportunity can put you where you can see the opportunities more easily.

If you're living in Poughkeepsie, Illinois, is that a place? Or I don't know, Polk County, Florida, or rural Kansas or rural South Dakota or something like that, it's very hard to imagine what's happened in Singapore. But if you had gone to Singapore and seen it and observed it, it would have opened your eyes.

I mean, for me, the most eye-opening experience I had from this perspective was the first time I went to Hong Kong. As I remember, I think it was in college at the time. I think it was 2005. It was the time when – maybe it was 2004. It was the time when they had the tsunami in Indonesia and Thailand.

I was in Hong Kong when that happened at Christmas. And I went to Hong Kong. And when I had been in high school, I had gone to New York City and I'd always been impressed with New York City. I thought it was great. And then I went to Hong Kong.

And I arrived in Hong Kong and I looked around and I couldn't believe my eyes. I spent days walking around the city by myself with no purpose. I walked through Kowloon. I walked through Hong Kong Island. I spent time in the new territories. I would wander in and out of random shops and wandering out of restaurants and bars and just wandering around.

And it was just the most overwhelming thing I'd ever seen. I thought never in my life will I ever think that New York City is a world-class city compared to Hong Kong. That was my experience. It was what started to open my eyes when you start to see, wait a second, this is totally different.

So I personally think, to me, it's the most obvious thing. It's fairly obvious that the growth in the next couple of decades is going to come from Asia, possibly from Africa. Why? Uncertain growth, no debt, no empire, no decades of promises that have to be bankrupted their way out of, which is going to create intense instability in the society.

In the coming years and years when the United States starts to fulfill fewer and fewer of its promises, it's going to create more and more instability, unhappiness, because people are going to depend on that. So unless there's some unexpected massive economic wave, which I don't know where it's going to come from, it's going to create instability in the society.

And then you've got the opportunity for standards of living to rise much farther in Laos or Cambodia than you have in Munich or in Paris. So to me, it seems obvious. Now there are industries in that place where I went a little long on kind of countries, but the point is that just being in a physical geographic location can make a big difference for you.

Physical geographic location, industry selection, and then career or job within an industry, these are things that make a big difference. Now, thus far, I went a little longer and deeper on careers than I meant to, but this is the biggest ticket for most people, be it your career or job or be it your career or business.

If you can get a business where you can serve people, you can do it. So back to an example of a dying industry. I have tried several times to get several of my friends who are real estate agents in the United States to leave the United States and to go and set up a real estate agency in other countries, many other countries around the world.

Why? Well, I think that you can take something that, in my opinion, is a dying industry or career profession or a profession that has dim prospects, at least in the way that it's currently done, in a place like the United States, and you can take it to another place and it can be a tremendously valuable profession in another place.

You can take your real estate business in the United States and go to Central or South America, and if you'll take the same level of service, the same level of efficiency, the same level of sales training, customer service, et cetera, you can possibly build a national empire in a way that allows you to have major competitive advantages and allows you to serve your customers and build a much more powerful system.

So a geographic change is one tool, but it's not the only tool. There are many other tools to look at, to think about where can I grow this. So if you're in something that's declining, think about how you can adapt, adjust, change. And remember, you're only ever a few years away from a brand new life.

You could be today a truck driver, a truck driver, long haul trucking across Canada, and you say, "You know what? I think my job has a relatively short lifespan. I think that self-driving trucks are probably going to be making their presence known very intensively within five or 10 years.

I need to be thinking about this." And in three or four or five years, you can be completely retooled, reeducated, re-equipped for a brand new career. You could be the world's leading cryptocurrency programmer or the world's leading cryptocurrency expert within a few years. You could grab yourself, spend your time in your truck studying everything there is to know about cryptocurrency, thinking through the issues, thinking about how to organize them, understanding the applications for blockchain technology.

At night, instead of watching movies in the cab of your truck, you're sitting there spending time studying the companies, understanding the innovators. You take your time off to go to the conferences. You start a web program, a podcast. You start a thing that gets you in front of all these people all around the world.

You become known as the go-to guy. You go ahead and get that master's degree from the University of Malta. It costs you 10,000 euros, by the way, for the whole thing. Get the master's degree from the University of Malta in blockchain technology. And five years from now, you can be one of the world's most sought-after pundits or practitioners in the world of blockchain technology, investing your money with the winners along the way.

We're all three, four, five, maybe 10 years at the maximum away from a completely different lifestyle. So don't be sad if your career is not lining up with where there's an opportunity for really good beta. Just recognize that this is a fact and I need to change and adjust.

What about investments? Well, I think with investments, I have less to say here, but I would say that with investments, you need to focus on beta before you focus on alpha. For example, I think this is why in real estate do you have the saying, "Location, location, location, location." Well, because if you buy the best house in a bad neighborhood, you're going to lose your shirt from an investment perspective versus buying the worst house in the best neighborhood.

Why? Well, that has to do with location, the things that people find desirable. If you have a walkable apartment in a downtown area in a major city, that's going to be forever more desirable than a place kind of out on the fringes. If you're dealing at the upper end of the market, you're serving the wealthy.

That's generally going to be more insulated. Why? Because wealthy people suffer less during economic instability. There's many other ways to apply it. I don't know how you apply this in the stock market. For example, I'm not saying you should just sell all your index funds and go and buy real estate in Bangkok.

I don't think that would be a good idea. One of the nice things that you are engaged in, and one of the wonders of the modern financial world, when you own well-run investments, when you own companies on the New York Stock Exchange, those companies are every day strategizing about how to earn their income from these growing markets.

Coca-Cola Corporation is every day looking and saying, "How do we sell more Coke products?" Apple Computers is saying, "How do we sell more Apple products all around the world?" Samsung, every single one. You can benefit, even if you own a stock that is publicly traded in the United States or London or wherever, that stock can still be benefiting from the growth around the world.

So while I think that the US economy is in a malaise, it doesn't by definition mean that the US stock market is going to have the same experience. You might find it much more exciting and a much better experience to go and be involved in something on the frontier markets, but you might not.

So I don't know how to guide you on that. I have some ideas. I'm investing my money in areas where I think there's growth. I guess maybe one obvious example would be something like cryptocurrency. You've seen this amazing run-up in cryptocurrency, supercharged this last week with the announcement that more and more large US companies are devoting large holdings to Bitcoin.

There was just the announcement a couple of days ago, the first DeFi index fund, which is kind of an exciting development as well. So if you think that there's a future of cryptocurrency, if you think that there's a future of blockchain, I do personally, then just simply allocating some of your money to it can put you in line with the beta, even if you don't necessarily have the solution for what's going to be the winner.

Do I know whether Bitcoin is going to be the currency of choice 20 years from now? I don't know. I don't know. Do I know? I don't know. Ethereum or Bitcoin Cash or Share Ring or Dogecoin, I don't know. What's going to be the winner? I don't know. But you can start to expose yourself to the beta.

I think that these places, these are going to, my personal opinion, these are going to be around and they're going to be a very, very large growth industry. Why? Because it solves some significant problems for people, which is exciting. So in conclusion, think about the beta in your life.

Think about, am I positioned to gain a benefit from beta? You don't have to, if you see everyone going out to California for a gold rush, you don't have to strike it rich on a particular claim. You can just say, everyone's moving to California and you can go and start selling them their shovels.

I've tried to use as many historical examples as I can think of, but historical examples are easy because you can see them in the hindsight, but they're harder in the present because you can get it wrong. What I'll tell you is that in my life personally, the more time that I spend just simply analyzing things and going with my gut and thinking, no, I'm not going to buy this line that somehow I'm incapable of outperforming the market in the wrong way that I did when I was younger.

Rather, I'm a smart guy. I can look around, I can see the world. I can understand that most people are just about like me. We're all pretty similar, right? Maybe 90% similar. We all have similar desires, et cetera, and I can see the long ranging trends and I don't have to get it perfectly right to benefit from the general trend.

I don't have to get it perfectly right to benefit from the general trend. And then if you'll incorporate the safety of what I talked about in the last show of ratios, of thinking through your positions, of spreading things around based upon a way that makes sense to you, and I'll make sure that I'm just cautious and I don't take a wipe out risk, now I think you've got a winning formula.

I hope that you'll share this show with young people. I hope that you'll teach them these concepts because these are some of the concepts that I wish that somebody had taught me. And I feel sometimes I feel like I'm 20 years too late. Like if I had just known this at 15 years old, man, I would have finally had done that.

At 15 years old, I would have just been so much more successful. Well, unfortunately that was then and this is now. But the point is I can still apply these things today and so can you. Thank you for listening to today's show. In closing, I guess I should just share with you that you should check out my career and income course.

Go to radicalpersonalfinance.com/store. And if this has been useful for you, consider signing up for my guided career and income planning because there are more good concepts like this there in that show. Sorry, in that course, radicalpersonalfinance.com/store. And I'll be back with you very soon. Dealing with your electric bill?

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