Hello, it's Sam and Sydney from Financial Samurai. And in this episode, we want to talk about fear, the key ingredient necessary for achieving financial independence, and all sorts of other things. So first of all, what do you think? Is fear the key ingredient to achieving everything you want? I think it has so much power in terms of motivating us to change and to do more things.

And when I was in business school, I read this book called Only the Paranoid Survive by Andy Grove. He was a former Intel CEO. And one of the reasons why I read the book was because we were at the Intel campus down, I think it was in Sunnyvale, it was like, 50 minutes south of San Francisco.

And we were on the campus and I was sitting in there on the campus like from 830, 9am till 5pm on Saturday. And I was kind of miserable. I was thinking, man, I wish I was doing something else. But I was kind of paranoid that I would get let go from my job at Credit Suisse because I just joined two, three years earlier, and we were going through a hangover post dot com bust.

So there's a great saying last in first out, and I was fearful that I could be next. So I firmly believe fear and paranoia, two negative words tend to drive us and push us to do better and greater things. And for financial independence, when I was growing up in Malaysia, in the Philippines, and also in Zambia, I saw a lot of poverty.

I didn't see a lot of poverty when I was a baby because I don't remember. But I remember clearly in Malaysia, there were those who had and those who had not. And one of my friends who worked at a retail watch store, lived in one room with his sister and his parents.

And when I visited his room, his home, I was really, really shocked because we were living in a nice place. It was government housing by the U.S. Embassy. And so that really frightened me to not screw up in high school, to try to get as good grades as possible.

I just I couldn't no matter how hard I tried, I couldn't get straight A's, but to try hard in school so that I wouldn't end up in poverty. Did you have any fearful moments growing up yourself? Yeah. I, my parents, my parents both had low income jobs. And I know my mom was always complaining about how she didn't get paid enough and how everybody who was coming in for new positions or whatnot were always making more money than her.

And it was this constant struggle that she had throughout her entire career. And my dad also had periods of unemployment in between jobs where he was just looking for work because for whatever reason, he would quit a job and just have all this unhappiness, whether it was due to the people he worked with, or he just wasn't happy with the pay.

And I knew that I wouldn't be able to count on them as an adult. So I knew I needed to educate myself well enough that I'd be able to get a job that I could rely on and make enough money to become financially independent so that I, because I knew I had no safety net to fall back on with my parents.

It sounds like job security wasn't there for your parents and that must have been stressful. What type of work did they do? My dad was a blue collar worker and my mom was basically like an office clerk. Right. And so was, you know, my mom, although she worked at the foreign service, you know, her dreams, she got, I think, a scholarship to go to Duke university to study science biology, but she gave up those dreams to marry my father who decided to join the foreign service.

And so that's why actually one of my fears, one of my greatest fears growing up was disappointing my parents because my mom worked so hard and I saw unhappiness in her here and there because I felt like she wasn't pursuing her dreams. So I felt, man, if she's not going to pursue her dreams, I better not screw up school so I can do better, earn my own money and at least make her and my dad feel proud that all their sacrifices were worth it.

Yeah. I've had a similar type of feeling from my parents and, you know, I, especially in terms of college, you know, they had to take out loans and I had to rely on scholarships and they made it very clear to me that they didn't have money to send me to an expensive school.

So I went to state school and I ended up paying half of that myself, which was fantastic because it taught me to, you know, I had skin in the game. I had to make the most of my college education because I was paying for half of it and I knew that I couldn't get more help from my parents.

And did they go to college? No, they did not get a bachelor's degree. And so them not getting a college bachelor's degree, did it ever occur to you when you were growing up, "Oh, maybe you shouldn't get one either"? Not really. They always encouraged me to do well. And I think one of the lessons that they taught me was that one of the reasons they had so many struggles in their career is because they were not formally college educated.

So that was something they were determined for me to be able to do. So I grew up expecting to go to college, which I'm grateful for. Yeah, I actually never, when I grew up, I never thought there was an option not to go to college because my parents, both my parents went to college.

And only as an adult did I, do I realize only about 35 to 37% of Americans have college degrees, four-year college degrees. So I'm living in a bubble, we're living in a bubble, and it's important that I don't live in this bubble forever if I want to reach out to as many people on Financial Samurai and help people learn more about their finances.

Because although our reality is real, a lot of people say, "Oh, you're living in a bubble, your reality is not real." The reality is whatever reality we experience is our reality. It doesn't, just because you don't experience our reality doesn't make our reality less real. Yeah. So you went to college.

One of the reasons why I went to William & Mary State School was because the tuition was $2,800 a year. And I knew that if I graduated from college, even if I couldn't get a job, I could always return to my day job making $4 an hour at the time working at McDonald's and pay my parents back.

Did you have any fear that you would, I don't know, waste four years of your college education? Actually you went for three and a half years, right? Yeah, I graduated early. Did you have any fear of not being able to get a job and letting that time and money go to waste?

I don't know that I was fearful of not getting a job, but I knew it was going to be competitive. And I didn't really enjoy college the way that most people do. I wasn't there to party and have fun. I was there to get in and get out. And that's also why I was able to graduate early.

I was taking a really heavy class load each semester, and then I was just determined to get out and find a job and start working. Yeah, that's interesting. I was really happy in college. I had so much fun in college, study abroad, meeting a lot of people, going to parties.

It was so fun for me. I was really sad to have left after four years. I remember taking golf in the last semester. I went to play golf like three times a week until my back hurt so much. It was kind of fun and crazy. But I feared wasting my four years in college tuition only to come out working at McDonald's.

I truly feared that. I just remember when I didn't want to study, I would just study my butt off so I could get good grades to give me a chance to get a good job. One thing that I thought about when I was trying to decide if I could actually graduate early is that I thought if I get out in December, I'm roughly six months ahead of the curve in terms of my class who would be looking for jobs.

So I would be available to start working as early as January, whereas everybody else in my class wouldn't be able to start working until June, July. Strategically, that's really smart. So if anybody wants to save money on college and graduate earlier to get a head start, I think that's a wise move.

Maybe we'll tell our kids. Because four years to go to college now that you can learn everything online for free and so quickly to gather information doesn't really make sense. I feel like we can graduate two years to do what we did four years ago. Not just that, I feel like a lot of kids don't actually graduate in four years.

A lot of them take five. And I think part of the reason why is because they like fear. They like fear that if they don't graduate sooner, they'll run out of money or their parents will run out of money. They don't fear being homeless because their parents will just take them in and live with them.

I mean, in our neighborhood, we have six guys who are 25 to 35 years old still living with their parents. They don't have fear of falling down because they've always got their parents to take care of them. And so again, I think fear is a great motivator for change.

You know, 2008, 2009 financial crisis, that was very scary for me because I was right front row seat in the financial crisis. Lehman Brothers going bankrupt. Bear Stearns getting taken under. So many rounds of layoffs. Friends just getting blown out left and right. And I was so fearful that I stopped slacking off and decided to start Financial Samurai in July 2009.

If I didn't have fear, I wouldn't have started the website because I wouldn't be thinking about, "Oh, what do I need to do next?" or "What kind of safety net should I have just in case I get blown out?" Because I would never feel like I was going to get blown out.

It's interesting now that there's a lot of tech layoffs due to the overhang post pandemic. You're hearing these LinkedIn stories saying, "It's hard not to feel down because I dedicated so much of my life and I just feel like a number and I feel 100% disposable." And that's the truth.

Every single employee is disposable. Yes, you have to build relationships and networks. But the reality is you have to fear getting laid off and being jobless or underemployed for a while to actually try to work even harder and stay later and network and do all that stuff. Because if you have no fears, yeah, you just kind of coast.

Exactly. Speaking of Financial Samurai, so I started in July 2009 at the bottom of the financial crisis. And one thing that has kept me going, publishing three times a week since 2009 is also fear. I publicly told everybody, "This is what I'm going to do." Most people don't remember this because that was just a small audience and the audience is much larger.

But I feared looking like a public failure if I didn't do what I said I was going to do. I just needed to keep on showing up because if I did, that failure, that fear of failure of running the site into the ground, letting it go stale would be pushed to the side because I would just keep on showing up.

Besides money and career progression, there's also physical fitness. And with physical fitness, it's interesting, supposedly like 65% of Americans are overweight. I don't believe that stat here in San Francisco and when I'm traveling in New York, but supposedly it's true. But if you're a parent, it's interesting. No parent wants to die before their kids become independent adults.

So it would just be a natural, logical conclusion to get in better shape, eat better, exercise more once you become a parent. Unfortunately, being a parent sucks up so much time. So I wonder for you, do you have the fear of living an unhealthier life in the future or not living as long until our kids grow up?

As a result, you exercise more or you actually don't exercise much because you don't have that much fear. I definitely watch what I eat. I pay attention to my health. I'm getting physicals regularly at my doctor. So I definitely think prioritizing health as a parent is super important. I can't even imagine the thought of our kids having to grow up without us.

That's why we have all these contingency plans in place. But yeah, if there's something that I can control to reduce that risk, I'm all for it. Okay. Well, do you believe the people who are "not in tip-top shape" actually have the highest self-esteem because they don't care what all the advertisements and magazines and TV models tell them about their weight and what social media says?

They have the confidence to be who they are and be comfortable in the skin. Whereas conversely, the fittest people, the one who spent, I don't know, three hours a day at the gym trying to get ripped six-pack abs, which you don't really need, might have conversely lower self-esteem. What are your thoughts about that?

I can see your points. I also think it is not easy at all to be in super crazy tip-top shape and most people aren't that dedicated enough to spend hours and hours in the gym. And losing weight is hard. It's not easy. It's not easy. And you know what?

We all feel better when we look better, we feel better. So there is definitely a point to being in shape because your confidence naturally grows. But I still believe, you know, if you're comfortable with the way you are, you know, you're not looking like a male model or a female model, I would say that you have great self-esteem and you don't fear judgment.

You don't fear society's judgment of you. And I think that's wonderful. And man, I think that's awesome to not have to go to the gym for an hour a day or every other day and have to run three miles because I certainly don't want to do that. And so I think I don't fear judgment of the way I look.

I'm happy with the way I look. And as a result, I don't have four-pack or six-pack abs. I'm just kind of a regular person. But you also exercise way more than I would say the average person does. You're very physically active. I'm physically active because I enjoy sports. I have fun in the community.

I'm not being physically active to try to, you know, get into brands. It's something you love to do. Yeah, I just love to do it. And it's really hard to lose weight at my age, but whatever. I just am physically active because I enjoy sports. Yeah, which is great.

So in conclusion, I think that comfort may be our greatest enemy for achieving financial independence. Let's say your parents are rich. They buy you a car. They send you to private school. You go to, you know, your Asian or European international vacations during the summers and winters. They then pay your credit card bills and they put the 20% down payment on a $1.5 million property in New York City.

Are you really going to be that motivated? I say no. I say you have no fear of financial failure. As a result, you're largely not going to grind as hard, network as hard, work as hard to build your own wealth. I totally agree with that. And let's say you're born good looking.

As a result, everybody treats you much nicer. They welcome you to the parties. They, you know, reach out and see if you need some help. They buy you lunch, dinner, whatever it is. Because you're so good looking, maybe you won't work on your personality because you don't have to because you get all these free passes.

But eventually your looks will fade. And if they fade to the point where you're no longer very attractive, you might start questioning yourself and wondering what's wrong with me because people aren't treating me as nicely as they had in the past. Now let's say you're given things based on your identity, not based on merit and hard work.

You know, you're an Asian American person from Guam. Therefore you get a free ride and you get a free job and all that stuff. Just for example, you start cruising because you believe society will always give you a helping hand. But then one day the gatekeepers, the elites who decide things might decide you and your people are no longer worthy of special favors.

When that time comes, you might struggle to compete based on your skills alone. But maybe more importantly, your children might struggle to compete based on their skills alone because they didn't get all those benefits as you got. They have to go struggle by themselves. So I hope we all have a healthy dose of fear.

Not so much fear that it debilitates us to paralysis, to inaction, but enough fear where we're just agitated enough to positively change our ways. It's interesting because at 45 years old now, I've become less fearful of failure because I feel so much. Academics, work and society fears are behind me now.

It feels great not to be beholden to anyone, to be able to speak my mind, tell it as it is. If someone comes for me, I'm going to come for them right back. It doesn't matter. I don't have any like, "Oh, I got to go to the boss's office." "I got to go to the Monday morning because of what I did to someone." That feels so great.

So my main fear now is not being a good enough father. Even though a parent can only do so much to teach their children right from wrong, I still worry how they'll turn out. Because you see all these people in society, murderers, rapists, thieves. It's just like, "What happened?

Did all their parents treat them poorly?" I bet not. I bet some of them had really loving parents. Possibly, but there has to be something else going on. And it's probably something like mental illness or substance abuse. There's just so many variables. There's so many variables, which is why I think we need to have empathy for these people, but also be aware that, man, we can only control and do so much as parents.

And I guess at 18 or whenever they leave the house, fingers crossed, they become productive members of society who are kind and helpful to others. And so that's my biggest fear, raising two kids, two wonderful kids now, who grow up being spoiled, entitled, arrogant. That is really a huge fear.

And I plan to do as much as possible over the next 13 years or 15 years that they're going to be at home to teach them how to be good people. Yeah, I know. Seriously. All right, folks. I'd love to hear from you whether you think fear is the main ingredient for achieving financial independence and whether fear is the main ingredient for helping you stay in shape, keep in touch with your parents, be nice so you're not lonely, and so many other things.

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