Welcome to 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 Schietz. I'm your host. Today, I want to share with you what I think will be the beginning of a fairly lengthy series, or at least I've got lots of these.

Some of my biggest mistakes, meaning financial mistakes, my biggest financial mistakes. And these are not going to be beautifully coordinated. They're going to be simply things that as I have reflected on my life, on my successes and failures, I have observed these things to be significant mistakes. Today, I'm going to begin with what I consider to be the number one most expensive mistake that I have made.

It's quite simply this, I have lived, acted, and thought conservatively. Constantly I have lived, acted, and thought conservatively. I've been aware of this particular problem for a while, and I want to articulate a few of the examples that I can trace in my own life of how this has hurt me in hopes that you can consider your own life and see what is true or not true.

And perhaps you're making this mistake. By the way, these mistakes, I'm working very diligently to note them and observe them so that I can change them. Some of them I have changed successfully. Some of them I am changing. Some of them I will change. But let's begin with conservative thinking.

Now, in my life, this word conservative has a number of different meanings, a number of different expressions. For example, it's quite common that when you hear this word conservative, someone says, I'm a conservative. Often they're referring to that in a political sense. And when I think about being a conservative person, I don't think of it in a political sense, although that does apply.

And I've spent quite a lot of time over the last few years thinking carefully about my own political conservatism. I have a hard time identifying with the political term conservative at the moment. While most people would analyze my political opinions and come to the conclusion, oh, Josh was a conservative, I've grown disillusioned with that term, especially when considering the broad scale failure of conservative political thought and conservative political movements in the United States.

So I'm actually not that unhappy to no longer identify as a conservative, so to speak. But in this context, it has nothing to do with politics and it has more to do with, I should correct that. It has little to do with politics and it has more to do with an outlook on life.

The basic idea is, hey, bad things can happen and so I should behave prudently. I should behave cautiously. This is what I think of as conservatism, or at least in the sense that I'm thinking about it right now. Is conservatism bad? Well, certainly I would say no. There are many things in which I think conservatism is quite warranted.

I'm personally quite conservative when it comes to things that could kill me. And I think that that's smart. I think it's smart to be conservative when you're thinking about engaging in an activity that could kill you. I'm pretty conservative when I think about things that could lead me down a bad road when I recognize, hey, you know what, I might not be able to recover from that.

I don't know. Best example I think of here is something like drug use. Right? I never use drugs. I try not to even use the least of the drugs. The drug that I use the most is simply caffeine. And I try really hard. That's not true. I do. It's not a matter of trying.

Once a year or so, once every year or two, I regularly quit caffeine. And I take a couple of months with zero caffeine intake because I don't like the idea of being addicted to somebody or something or needing something. And so as a matter of personal self-discipline, I discipline myself every year or two to completely stop using any kind of caffeine.

But I do like that particular drug. And so after usually a month or two of proving to myself that I'm not addicted, I'll reintroduce that drug. But beyond that, I worry about being the kind of person who uses drugs or uses addictive substances because I think I probably have a bit of addictive personality.

I don't want to run down that danger. Again, I don't think that you have to wholesale reject conservatism. But what has hurt me the most financially has been financial conservatism. There have been many times in my life where I look back and reflect and there were opportunities in front of me.

There were big opportunities. There were things that had big potential, but those things were risky. They were unproven. They were speculation. They were things that other people might not have been comfortable with. And I've often said, "Well, maybe not." But what's also true is when I look at my life and I analyze where my biggest successes have come from, it's almost always come from the times in which I rejected that conservative impulse.

I rejected those conservative people who were encouraging me to be cautious, to be careful, to be conservative, and I acted. The single biggest decision that was not identified as a conservative decision that I'm so grateful for was the decision to become an entrepreneur. When I was 23 years old, I became an entrepreneur.

I had gotten laid off from a job that was a safe, conservative, salaried job. And instead of going and finding another job, I went and found a business at that time, starting in the financial services business. I started with no salary. I started with no draw. I started with no promises, just simply the opportunity to work for straight commission.

And that turned out to be one of the better decisions of my life because it opened up to me a profoundly freeing existence. And as I look back, I'm 36 now, as I reflect back over the last 13 years, it's been a dream. It's been an absolute dream. The next change, next phase in that was when I left that fairly safe work for commission environment, and I embarked upon the world of working on the internet.

Again, very risky at the time. Literally I think my wife and my dad probably were about the only ones that understood why I was doing what I was doing. Almost to a man, every other person that I sought advice from said, "No, no, no. That's probably not a great solution." Which by the way, reflects more on the people that I was seeking advice from rather than the specific nature of the opportunity.

Point was, I acted in the non-conservative way and I have reaped the joys and the benefits of that time and time again. Throughout my life, I can reflect on even smaller decisions. So many times I have made seemingly quick, rash, aggressive decisions. Although not all of them have paid off, I would guess that 80% probably have.

As I've gotten older, I've come to trust myself much more. I've come to trust my impulses. I've come to trust my discernment and my judgment far more than I ever did when I was a younger man. But even with a track record of success, as I reflect back, I see the roads not taken.

I see the things I could have done. I see the opportunities that I had that I skipped past because of a sense of conservatism, because of wanting to be conservative financially. And today this bothers me greatly. This annoys me. And I don't think it was the right decision. I don't think it was the right path.

Thinking about it has helped me to analyze why I made those conservative decisions and then to figure out how, pressing forward, without being foolhardy, I can expose myself to more opportunity and to be truly willing to accept the concomitant risk of opportunity. The biggest insight that I have gained on this topic simply comes from recognizing that I need to be very careful where I accept advice from.

When I reflect back on my early training and early education in the financial space, what I realize now is I chose the wrong training materials. And I didn't know the mistake I was making. I was ignorant. But I chose to listen to the wrong voices. I chose to listen to the voices of people who were speaking to people who had different goals than I did.

A few practical examples. One of the earliest financial books that made a big impression on me that I read when I was a teenager was David Bok's book called The Automatic Millionaire. Picked this up at a bookstore somewhere. I was intrigued by the title. Picked it up and I read it.

And I was so impressed at the plan that Bok laid out in that book. The basic idea, for those who haven't absorbed that classic of personal finance, was simply the idea that if you will automate your finances and you will put aside money on a regular automatic basis, you almost can't help but become rich.

And Bok was not wrong. The advice that he gave in that book was good. It was sound. He was the one who coined the well-known term, the "Latte Factor." The idea being that if you will forgo a daily $5 latte and instead save that money in the fullness of time with good investment returns, you can become a multi-millionaire.

That latte factor idea has been much attacked over the years and has become almost a joke. But at its core, it's still fundamentally true. If you can find small regular expenses that you're willing to do without and instead invest the money that would otherwise be spent on that daily latte or whatever equivalent is in your life, you'll become a millionaire.

Nothing wrong with that. But what I got wrong was where to focus my time and attention. What I got wrong was where to invest my money. In that same book, Bok presented a fairly mainstream approach to investing. The mainstream approach to investing of open a retirement account, put in that retirement account some mutual funds and do this over a period of time.

Today, with the benefit of hindsight and professional insight, I can understand why Bok gave those examples. Number one, they're accessible to most people. But more importantly, it came out of Bok's own personal formation, out of his own personal professional training. I believe he worked for Merrill Lynch. And that's the classic model of professional US American finance.

The idea is you work with people who have an income, who have a job, and you teach those people to put money aside using retirement accounts and to put the money into mutual funds. And the finance industry in the United States has done an incredible job of convincing people that really the only safe, successful way to invest money is to invest it into mutual funds.

Bok's not wrong, but his advice was not right for me. And today, looking at it, you'll observe that often, for example, when I do a Q&A show and I speak to a young man who calls me, I'll talk to that young man about opportunity, not about safety and security.

I'll talk to the man about going forward and building something big and taking risks and being aggressive, not about setting money aside. The basic error that I see is the modern US financial system is a system that is constructed meaning professional financial advice is a system that is constructed to help rich people stay rich.

It's not a system that is effective at helping poor people become rich. It's not that it can't work. It can work if you'll simply insert 30 or 40 years. But most of us don't want to wait 30 or 40 years to become rich. Most of us want to get rich far quicker so that we can enjoy the benefits of wealth at an earlier age.

Now when we outline this using clear words, it's obvious. If you ask most wealthy people if they would rather have a million dollars by age 30 or four million dollars by age 60, I think most people would choose the million dollars at age 30, knowing the lifestyle of freedom that can be purchased with a simple million dollar net worth.

But at the time, I didn't understand that missing piece of data. And so I absorbed the idea that I need to be cautious. I need to be conservative. I need to invest my money properly so it doesn't lose money. After all, rule number one is don't lose money. And so I adopted a basic philosophy of conservatism.

Similarly, when I learned about investing, one of the early books that talked to me about investing, and again, part of the basic error that I want you to understand very clearly is the error in not absorbing input from a variety of different perspectives, rather just latching onto a single idea from an early age.

One of the early books that formed my thinking on investment was the Coffee House Portfolio. I think that was the name of the book. It was a book that I found at the bookstore, and it talked about the value of index fund investing. The basic idea was, "Hey, look, you could choose a simple one fund investment." I think at the time, the author was advocating for the S&P 500 Index Fund from Vanguard, and he offered a couple of alternative investments, a couple of two fund investments, the idea being a Vanguard S&P 500 Index Fund mixed with a bond index fund.

And the idea was, "Hey, look, with index fund investing, you can become wealthy." And so I understood that. I said, "Hey, this is great. I'm going to do this." And so I thought I was being an effective investor because I knew how to buy index fund. I would go around and tell my friends, "Hey, listen, friends, if you just buy a Vanguard S&P 500 Index Fund, this famous coffeehouse portfolio, you'll be great." But what I didn't understand was all of the other opportunities that were available to me.

So I chose the conservative investments that are not wrong, but that weren't going to get me on the path to being a multimillionaire by the age of 30. A few more examples. Let's talk about other examples of investing. A similar analysis would need to be made about even my own personal ideas on investing at the time.

For example, through a lot of these books, another example. When I absorbed in my early 20s Dave Ramsey's books, and I heard Dave Ramsey say again and again and again to me as a guy working in a salaried job, "Don't buy single stocks, too risky. Buy mutual funds instead and buy mutual funds that are well diversified." I absorbed that.

And then of course later I became a financial services professional and I would absorb all the literature from the wholesalers selling mutual funds. And I understood what performance in a mutual fund was driven and how unpredictable it was of single stocks. I would read the American funds. My favorite brochure that they made was, still make I think, was the Investment Company of America.

And they always had this chart in there showing basically how difficult it was to predict the companies that were the biggest winners over the course of a long-term perspective if you went back 75 years. But then of course compare that to the performance of the Investment Company of America mutual fund and how much better it was.

And so I absorbed the idea that, well, I can't beat the market and I'll just buy mutual funds instead of single stocks. So this developed for me this basic mindset of financial conservatism. So whether from an investment perspective, choosing mutual funds rather than single stocks, choosing conservative mutual funds such as index funds instead of more speculative, aggressive funds, or with regard to personal finance, staying out of debt, making sure that you always had rainy day funds, building safe streams of income, etc.

I developed this concept, this mindset of financial conservatism. What I think is true though is this. First, that concept of financial conservatism may be the best approach for many people. I know many people and have worked with many clients for whom I would recommend the exact concepts that I've just listed that work really, really well.

They work really, really well for people who have a career that is a good fit for them, where they enjoy the benefits of the career. If I'm working with somebody who enjoys working in a corporate job or professional capacity of some kind, they like their day-to-day existence, then my advice to them is going to be maximize your retirement accounts.

Put good quality, well-diversified investments in those retirement accounts. Use mutual funds rather than speculative single stocks. I'm going to recommend that plan for them because that seems to fit their overall approach to life. But that may not fit your approach to life, and it, in hindsight, didn't fit my approach to life.

And when I reflected on many of my clients, I was often envious of my clients who, instead of starting a safe, secure job, went and started a business that had room to grow, and all of a sudden you turn around and a few years later, they could sell the business for a seven-figure sum.

Or perhaps it was observing people who engaged in speculative stock trading, and it really played off and it worked well for them. I realized that I was on the wrong path. I was in the conservative path. And again, to state the matter very clearly, the conservative path is not bad.

In fact, there can be a lot of good things about it. But nobody laid out for me the options of the aggressive path, and I was too ignorant in those early days to go and find the benefits of the aggressive path. By having that sense of conservatism drilled into me by the sources that I chose to engage with, I systematically discarded the opportunities that were in front of me, the speculative opportunities, the aggressive, the high risk, the high growth potentials that also came with high risk.

I discarded those options and opportunities as not right for me because I didn't want to be stupid. I wish I'd done it differently. Now the great news is the past is the past. It literally doesn't exist. Today is a brand new day, and it's the first day of your life and my life.

And so going forward, we can change things. And as I've reflected and realized the error of my ways, I've made a different decision. Going forward, I have decided that I'm going to pursue the aggressive opportunities. I'm going to pursue the risky opportunities. I'm going to pursue the speculation, not just the investment.

Possibly 10 years from now, I'll record another podcast or who knows, maybe a virtual reality holographic chat telling you the errors of the speculative way, the errors of the aggressive way. And man, I should have just stayed conservative. Maybe, but I don't think that's true. What I have done along the way is I have realized if I will simply define the risks, then I can systematically put watertight compartments around the risk and lay out what success and failure would be like.

And as long as I'm okay with failure and I'm willing to embrace complete and total failure, then there are better opportunities for me to experience far more success by avoiding and eschewing the conservative path in favor of the aggressive and risky path. Now here, I have two basic fears that I have identified.

The first is practical. The second is emotional. Let's begin with the practical fear. What I have learned is all risk is not equal. For example, we all know that flying on airplanes, for example, is statistically quite safe. We also know that airplanes sometimes fall apart. I have a minor hobby of watching disaster videos on YouTube from all the aviation channels that go through airplane crashes.

And why did such and such an airplane crash? I listen to the black box recordings of the pilots after the fact. And I watch the reconstructed flight paths where people take a flight simulator, pretty cool genre of videos on YouTube. People take a flight simulator and they'll take a famous airplane crash and they'll show you exactly what happened and why it crashed.

But at the end of the day, I know statistically that flying on an airplane is quite statistically safe. There are a lot of people who don't believe that flying on an airplane is statistically safe and have this irrational fear of flying on an airplane or just simply a fear of flying on an airplane.

For me, I look at it and I say, because of the places that I want to go and because of the things that I want to do, I don't want to only drive a car across the country. And although, of course, we all know that statistically driving a car involves a significant amount of danger, we all on a day to day basis generally tend to ignore that because we're familiar with it.

I don't want to accept the limitations of exclusively relying on my own wheels to get me from place A to place B. I want to travel the world. And so if I'm going to travel the world, I'm going to need to go on an airplane. And there are times on an airplane where I'm genuinely concerned.

I'm genuinely scared. I don't think that certainly for pilots become pretty comfortable with turbulence, but I think most of us sitting in the back when the plane starts bouncing up and down, we tighten our seatbelts. And tightening our seatbelts is probably a good thing to do. But when I'm in that situation, I remind myself I'm trying to get where I want to go.

I remind myself what turbulence is. I have things I teach my children. I teach my children that when the plane bounces up and down, it's just like being out on the water when the boat's bouncing up and down. It's just bouncing up and down on the air currents. I remind myself of the many redundancies.

I remind myself of the fact that, again, bouncing up and down on an airplane is not per se dangerous. The airplane is made for it. Just like bouncing up and down on a boat is not dangerous. The boat is made for that. I remember my first intercontinental airplane flight.

I was 12 years old and I was flying with my parents. I looked out the window. I saw the wing bouncing up and down. And it scared me because I thought that wing shouldn't be bouncing up and down. And my dad explained to me that if it's stronger, he being an engineer, he explained that the metal is flexible and thus it's stronger.

If it were rigid, it would actually be weaker. And so it's designed to flex. That's the whole point of how the design works. So let's bring it back to finances. Now today, I can see very clearly the ability that I have as a financial engineer to segment and compartmentalize risk.

So for example, if I want to make a speculative investment or speculate on a certain stock, something like that, I can look at that and I can understand what the maximum upside and downside risk is. I can look at it and I can say, "Hey, if I put X amount of dollars into this investment, the lowest my risk would be would be zero, assuming I'm not using leverage and trading options, which could wipe me out even more of that." But I can look at that and I can identify, "Here is the amount of risk and am I willing to take this?" And so instead of just simply saying, "Oh, I don't invest in single stocks," I can look at it and I say, "Well, should I invest in single stocks?

Would that get me closer to where I want to go? And then how could I segment that amount of risk in my portfolio?" Similarly, with regard to business. I can look at it and I can say, "All right, if I'm going to embark upon a new business, perhaps I'm going to try something.

What's the worst case scenario?" The worst case scenario is the business goes bankrupt. And so for me, once I actually learned how to do bankruptcy planning, then I realized this wasn't so scary. But the problem was nobody taught me that I could do bankruptcy planning. And so even if I went bankrupt, I would come out the other side able to start again.

What was I scared of? Similar concepts of risk management. When I understood how to put in place an effective career insurance policy so that, hey, if a business fails and I go totally broke, what do I do? Well, I need a job. And so how can I put in place a strategy so I could quickly go out and get a job making a lot of money to make sure that I can pay my bills?

And so I can segment the risks. I can isolate the risks. And I can understand and I can control the risks. I can insure against the things that I don't want to happen. I can accept the worst case scenario. And so once I've solved that worst case scenario, right, the classic stoic philosophy of understanding the worst thing that could happen and resolving to be okay with it.

If I can do that financially, then I can go up in the airplane, I can go out on the boat. And the reality about most financial risks is they're controllable in the circumstances, in the events. Example, is business risky? I don't think business is risky really at all. That's not to say that businesses don't fail.

Certainly they do. But even when businesses fail, they're not risky. Today with my slightly more mature outlook on risk management, I look at employment as being fundamentally risky because employees generally tend to have all of their time absorbed with one particular employer. Thus, they don't have the mental energy usually or the time to be thinking about other opportunities.

And so a lot of times when an employee gets let go, gets fired, gets laid off, is forced out, that employee often doesn't have a backup plan. Whereas as a business owner, I have a long list of opportunities, things that I can pursue on the side. And so if primary thing fails, I've got secondary option.

If secondary option fails, I've got tertiary option. I've got all these options lined up. And in addition, in business, you often know when something is failing. It's not doesn't catch you unawares. You know when your revenue is falling below your expenses. You know when you're running out of money, you know when sales are down.

And so you can respond and you can react to that. Many businesses fail largely due to the lack of skill and lack of education of those who are engaging upon them. And failure itself is not fundamentally a problem if you are resolved to accept it. Similarly, I think about why is it that we're so opposed to risk in the modern world?

We often talk about bringing home the bacon. I have a significant amount of responsibility. I have a wife and four young children who depend upon me to provide for them. And so the idea that most people would understand is simply this. As you get older, then you should take less risk because there are more people depending upon you.

That's not necessarily wrong. Certainly there are more mouths depending upon me. But we're not living in a world in which business failure means starvation. Imagine you or I were 150 years in the past and we said maybe we go to the West, right? Those of us who are US Americans, or at least I have always had a fondness, a sense of romantic nostalgia about the West.

You grow up seeing Western movies. You appreciate the allure of the American cowboy. And so you think, "Man, that would be great." Let's say that I headed out across to go settle the West. Government makes me an offer, says, "Hey, we've got a whole bunch of land. We want you to come.

If you can come out, we'll give you your 168 acres, sorry, 160 acres, and you need to settle it and homestead it for five years." And so I head out from Chicago and I load up my family in a covered wagon heading out on the Oregon Trail or heading out to the West to Oklahoma to stake my claim.

That was a fundamentally risky endeavor. And failure oftentimes meant quite literal death. If you went out to stake your claim in Oklahoma, there was a very decent chance that if your business failed, your crops failed, your family would starve. If you've never read the classic Farmer, excuse me, Lower House on the Prairie series, I'd encourage you to read it.

And what's interesting to me, I read the series to my children a couple of years ago. In reading that series, I hear things very differently as a father, right? There's the classic opportunity when Pa Ingalls, the father and patriarch of that family, his crops in Minnesota where he was settled at the time, he had a farm in Minnesota, excuse me.

Yeah, his crops in Minnesota had failed and he wasn't able to feed his family, so he had to go for work. And he walked a hundred and, I forget now, but it was something like 150 miles until he could find work. Literally walked and had nothing. He walked 150 miles until he could find work, didn't have enough money to send home to feed his family.

And so the consequences of failure in that time could be quite literal life and death. Fast forward to today's world, the world in which we live of 2021. It's virtually unimaginable to me to think of actually facing starvation in the world in which I live. I'm not blind to the fact that many people still today do face the prospect of literal starvation.

I'm in contact with them more than you know, but it's almost unimaginable for me to consider the prospect of my children actually going hungry. And what's more important, it's easier than it has ever been for me to have a plan in place to make sure that my children would quite literally never go hungry.

Why do I talk about food insurance and food storage? It's because it's the most effective way to release yourself from the fear of your family going hungry. Today, if you live in a rich society, like many of us do living in the wealthy West, you can go out and for three or four or five or $6,000, you can purchase a year or two worth of calories to feed your family.

Add another thousand dollars of spices and add-ons and you can do it in quite phenomenal comfort. The costs of the staples of life to keep your family literally alive are lower than they have ever been in human history. As a US American, one of the first places that I always went in my budget to try to trim my budgetary expenses was food spending.

We spend, and yet we spend a tinier percentage of our income on food than many people on the planet. There are people on the planet who 80% of their money goes to food and they're living day to day and they cannot figure out how to have enough food for next week.

Whereas for you and I, no doubt our expenditure spent on food is perhaps 10 or 15% of our income if we're normal and it could be far lower, far, far lower and still be adequate nutritious food on which we could survive. This irrational fear that we have of going hungry is really silly.

There's no reason for me to really even consider it. I do consider it, but it's so easy for me to put in place insurance to protect against it. Food storage, having family and friends that would help it, having the ability to go get a job so that I could go and pay for food if I needed to, having enough money set aside so I could buy food, having access to government welfare programs so they could provide us with food, having access to a food pantry where we could get free food if we were in need.

All of these are very reasonable things. And so the idea that in 2021 I should be worrying about going literally hungry is really silly. It doesn't make sense when you logically analyze it. And yet we, I have used those, those phrases, "Oh, I got to feed my family." And I've convinced myself to take the conservative path called, "I got to feed my family," instead of taking the aggressive path.

Other simple examples. What about going homeless, right? Being without a home? Certainly, there's no question that business failure today could mean that I might lose my house, right? I could have a house, I could have a mortgage, and I might lose my house. But really, is this that big of a deal?

I think the biggest factor that most of us who are parents worry about if you lose your house is the disruption to your children's lives. I'm convinced that's unnecessary. I'm convinced that's only a big deal if you teach your children that they should be emotionally traumatized by the loss of a house.

Throughout history, children have been taken from one place to another. Throughout history, children have slept on the ground and been fine. Throughout history, children have slept in tents. And yet in the modern world, we've babied our children to the point where we don't want them to move houses because all of their memories are here in this room and it would just be too upsetting to them.

It's something that we make up ourselves. So the worst case scenario of losing your house, so what? Big deal. Now, there are ways that I personally have tested overcoming this, right? I've talked about one of the reasons I went RVing. One of the reasons I went RVing, I want to see what it's like.

And I'm convinced that RVing is a great way to cut your expenses to almost nothing. If you find an old trailer for a few thousand dollars and you can park that trailer somewhere where it can stay for a little while without the cops coming and banging on your door, and you can live in that trailer, then you can be fine.

You can be fine. And so for me, it's always been kind of that last case, worst case scenario. If everything I did failed, what would I do? I'd buy an RV, I'd go and live in the trailer and we'd have an adventure. We would love it. There's, I mean, rich people all over the place.

So many of financial planners' clients are millionaires and their dream is to become a millionaire, retire from their work and go and buy a car so they can live in it. Now their car is shiny. It has a lot of chrome, it has a lot of marble in it.

Oftentimes it's pretty heavy and they buy a nice new pickup truck to tow it around and park it in a camp. At the end of the day though, you're living in a car and there's fundamentally very little difference between a million dollar new car and a $5,000 old junky travel trailer, a fifth wheel that you pick up somewhere.

And so you can always have a solution or even just quite simply a tent. Over the years, I've gotten good enough at camping that I realized, you know what? I could live quite comfortably. I'd buy, I have a nice canvas wall tent, have a good cooking station set up, all of this.

Today it's just, it's easy. It's easy and it's comfortable. Right? If you go to Africa on safari, you're going to go out to some bush camp and you could pay a guy tens of thousands of dollars to sleep in a tent. And it's adventurous and you got to be rich to do it.

Well, I'm not going to be homeless. And so why am I worried about being homeless? Now add on to that all of the tools of negotiation that you have, right? There's people in the United States who haven't paid, they've had rent eviction, excuse me, eviction moratoriums. They've been living rent free in houses for months and months and months and months and months.

And you get into a bad financial crisis. I had a new people back in 2007, 2008, 2009, who lived in houses without making a single mortgage payment for literally years, literally years. So why are we concerned about being homeless again? What's a worst case scenario? I call a friend of mine up and I say, listen, man, I need a place from, can, can, can you help us with a place to stay for a few weeks so I can get a job?

I had to keep a credit card set aside and I say, and I call up Airbnb and I rent a house for a couple of months on a credit card with money I don't have so I can get a job. The worst case scenario of being homeless is just, it doesn't have the same trouble that it had centuries ago.

And yet a lot of us are spending time worrying about being homeless. It makes no sense. What's worse is I worried about that stuff when I was single. Not worried, but I mean, I was, I was, I was making decisions when I was single as if it might actually be possible for me to be homeless and that might actually be a bad thing.

It's silly. And you see a whole world and kind of counterculture of van liver, van dwellers all around the world. I've observed here in Europe, the van dwelling culture here in Europe is very strong. There's this whole culture of people living in vehicles as a primary opportunity. Years ago, I came across the story of, I think it was Bob Wells, the guy who started the cheap RV living story.

But he told the story of his first vehicle when he went through a bad divorce, had no money, he bought a box van and he turned the box van into his first house. And it's a great house, right? I love to go on YouTube and find all these guys who, who turn an old box van or a van or a car or whatever into something very comfortable for them.

And so when you know that you could, you could live on $500 a month of income, well now the worst case scenario, you're totally wiped out. You're totally bankrupt. It's not such a bad deal. It's not. There are people doing it by choice and living very well, many times with, with much greater freedom than a lot of us.

And so what I wish I had connected when I was earlier was the fact that the worst case scenario, practically speaking, is not nearly as bad as you think it is. Now I use that kind of low end scenario to try to bring good examples that will appeal universally.

But realistically, there's no reason why you or I really should ever or would ever be in that scenario. I mean, 10,000 bucks tucked aside, sitting and saving somewhere, a dozen ounces of gold tucked aside in a jar in your mother's backyard flowerbed. These are the kinds of things that you never have to be there.

Although I would, I think I would be capable enough to be fine in those situations. It's just not, you know, I'll never, I don't think I'll ever be there. And if I am fine, I'll deal with it. But I don't think I'll ever be there. What's more important though, is to realize that risks can be segmented, even the biggest risks.

And as I've become more thoughtful and educated on simple financial engineering, I've realized that even those worst case scenarios, they don't happen. They don't happen. Good example, right? I have, I have, and so many millions of people have deeply appreciated the work of well-known financial educator, Dave Ramsey. Dave Ramsey's origin story includes the fact that he went bankrupt.

And I think it's a valuable and useful origin story to understand. Now what Dave has done from that is he has built onto that story, the principles of success that he has used to take him to where he is today. And I deeply appreciate Dave more than I ever did.

I think he does a lot of good work. And at the end of his career, he'll be able to look back with tremendous satisfaction on quite literally millions of families that he has helped. However, there are a couple of things that I think are often unsaid that I absorbed as a disciple of Dave in those early days, that today I reject.

For example, was Dave's use of debt the thing that brought his entire empire down? My answer is no. It was Dave's use of stupid debt that brought his empire down. He was engaging in short-term financing for his real estate investments. And as I understand the story, bank that he was working with got sold, looked down and said, "Why do we have all this money lent out to this 20-year-old kid?" And calling his loans and he was left scrambling.

What's interesting though, when you listen to Dave tell the story is even with all of that stacked against him, he almost got out. He almost got out. He was so close to being able to avoid bankruptcy. He was selling buildings, he was renegotiating. He was so close to being able to avoid bankruptcy.

Now ultimately, he did go through bankruptcy, came out the other side, rebuilt an empire. But just with a little bit of thoughtful risk management planning, Dave could have effectively used debt in his situation and have never gone through bankruptcy. With a little bit of thoughtful bankruptcy planning, Dave could have been much better positioned to go through bankruptcy and come out the other side.

But even with all of that, I don't think Dave or his children ever went hungry. At the very least, he had a strong family network to draw upon, an exceedingly valuable resource. He had good marketable skills, and he was able to start over and rebuild an empire. And it was his risk that he took to build a business that resulted in his becoming today a very, very wealthy man.

I think I've given enough practical examples. What I've reflected upon and realized is simply this. We don't live in the world of 1800. We don't live in the world in which you and I are penniless migrants, right? The classic story, what they literally did was burning down our house in the east so that we could collect the nails to go load up in our covered wagon and go to the West.

And we would take those nails with us because that was the most valuable thing of a house. Now the spirit, the indomitable spirit of those early pioneers and early settlers of the West, that spirit is what should inspire us. And when I think about Pa Ingalls, right, what did he do?

At one point, his family literally lived in a house that was carved out of a riverbank, a cave in the side of a riverbank, and they were happy to have it. Now I need to keep working on my own family to make sure that if we lived in a house carved in the side of a riverbank, we would be happy.

I think we could do it. I'm probably the one who wouldn't want to do it. My wife probably wouldn't complain. My children probably wouldn't complain. They'd think it'd be a grand adventure. Just to me, it's unthinkable. And I'm the radical guy, right, and it's still unthinkable. I think about going into a small house, I don't want to live in a small house.

I'm beyond that. Which brings me quite nicely to that second big problem. So the first problem is practical, practical finances. And what I've tried to show is that as I've reflected on this, I've realized that these fears that I have are silly. They're totally unfounded and they're easily solved.

A little bit of savings, right? If you start with nothing, go work at a job for a year, go get a job, making $40,000, $30,000, spend 20 or 25 and save 10 and then start and make sure that and say, I'm going to have $10,000 a part. And then the other thing is just in the world we live in, you can build something great with nothing, with relatively nothing.

I have loved and been so inspired by the Bitcoin revolution in which we're living. One of my favorite things has been realizing how many Bitcoin millionaires have been minted because they were convinced of the opportunity they saw and they put within it, right? I like, what's her name, the crypto chick, Heidi, the crypto chick and her story, she and her boyfriend, husband, not sure, she was working as a waitress so that she could earn money to pay for Bitcoin.

Well, fast forward now, she's built a massive business advising people on Bitcoin, has become quite wealthy, but she started working as a waitress, living on nothing, putting every dollar into Bitcoin. That's the spirit of those who win. They have an opportunity, they have something they want to go after and they go after it.

I didn't do that. I could have done it. I could have made far more money than Heidi did, but I was hamstrung by this excessive sense of conservatism. I was hamstrung by not wanting to go broke. Now, I said there were two things. The first thing is the practical side.

And what I've realized is the practical side is eminently solvable. It's eminently solvable just through a simple thinking process and putting in place the appropriate insurance policies, meaning quite literally, in some cases, insurance contracts with insurance companies, in other cases, simply an insurance policy of something like having savings, an insurance policy of having food stored, having a tent.

Although I don't currently own it, if I moved back to the United States, one thing that I would do, disaster standpoint, is just I would buy a nice wall tent, spend my $3,000 on a nice wall tent, put it aside in a trailer, have some other stuff in there, and then I would know, hey, if worse comes to worse, we got a tent.

I can call up a friend of mine who's got a big backyard. I got a list of friends who've got multi-acres, and I could say, "Hey, man, can I set up a tent in your backyard? I need to get my feet under me for a couple of months. Can I just live in your backyard in a tent for a couple of months?" And it would be great.

It'd be a little adventure. So like you could put in place all those things, and they're absurdly cheap. They're absurdly cheap to do. So what's the second thing that has often kept me acting conservatively when I wish I hadn't? The answer is pride. I think this is the bigger one for me.

It's pride. The pride of wanting to be right and the pride of not wanting to be a failure. I think this is common to most of us, right? We gain, we have a self-image. We have a way that we view ourselves. And what often hurts more with failure is the hurt to our pride rather than the actual impact.

There was one client I'm thinking of that I worked with years ago, and this was a client that really struck me. This was a client, he was a highly paid salesman, and he'd built a comfortable career. He was quite good at what he was. I met him in some charitable work that I was doing at the time.

He unexpectedly got laid off from his job, and he thought it was totally unjust, but he was not in a place where he had the money set aside. He was not in a place where he, he wasn't in a good place at the time. He was living a high lifestyle because he was making a lot of money.

Children were in private schools. They were in a nice house, etc. And he got laid off. And when I worked with him in the situation, what was obvious to me is his pride made it very hard for him to accept the reality of the circumstances that he was in.

For him to have to pull his children out of the private school was going to be really difficult, and I understand that. But I always think of him, and I realize how much my own pride has often kept me from pulling back from, excuse me, my own pride has often kept me from pressing forward.

It's caused me to pull back. All right, it's one thing to say, you know, Bitcoin, for example, what was, why didn't I see Bitcoin at an early age? Why didn't I speculate on it? I could have, I had money. I could have speculated on it. What was it? It was a pride.

At its core, it was my pride of not wanting to do something stupid with money, because I saw myself as somebody who makes intelligent decisions with money. I saw myself as somebody who gives advice about money. I saw myself as the kind of guy who does things right. And because it was unproven, I didn't know if it was going to be right or wrong.

I didn't know. And so because of that, I didn't get involved because I wanted to protect my pride. I wanted to be intellectually certain before investing my money into Bitcoin. Now, the specific use here of Bitcoin is unimportant, meaning for all I know, 10 years from now, Bitcoin could be utterly worthless.

Could be. There are good arguments as to why it very well could be. Also, of course, good arguments as to why it could not. But would I rather have the intellectual certainty of 10 years from now being able to say to someone, "Ha ha, I knew it was coming," or would I rather have become a multimillionaire from investing early on in something that should have been a perfect fit for me?

It's a fascinating thing for me to think about. It was my pride that stood in my position, in my way. It was the pride, the pride of not wanting to be wrong and especially not wanting to be wrong publicly. Similar things with other investments along the way. It was the pride of not wanting to fail.

Why didn't I build when I was younger? Why didn't I build a very large real estate portfolio when my buddies were doing it? Well, first, there were those around me who were conservative, who were advising me not to take risk. Today, I appreciate that. In fact, I think that in many cases I was held back from making mistakes.

What I now realize is that many of those people didn't have a proper concept of risk. They didn't actually understand what the true risks were. They were saying the things that they thought were true by lack of experience. Here would be a metaphor. Imagine that you're on your way to the airport, but you have just met somebody who is an unintelligent an uneducated, illiterate, I don't know, indigenous Indian from the middle of nowhere.

You're in Ecuador or you're in Australia or somewhere and you've just met someone who has seen, who's never even seen an airplane. And you tell them, "I'm going to go up in this airplane here." And they look at you and they say, "What? You're going to go up in that airplane?

You can't do that. The airplane is going to fall out of the sky." Well, you try to explain to them how airplanes fly and air pressures and aerodynamics and blah, blah, blah, blah, blah. You try to explain to them, "Hey, there's a good indication of, you know, where there's decades of experience and safety and there's some risk, but it's risk is pretty well managed." Their minds would not be able to conceive of it, right?

Because they've never been on an airplane. They can't conceive of it. It takes time and experience for that person to understand what an airplane is, how it works and to understand, yes, there are risks in flying in an airplane. Here's what those risks are and here's how those risks can be avoided.

And by extension, if we think about that metaphor, a lot of times the people that we ask advice from are well-meaning, ignorant people who have no understanding of what we're actually getting involved in. They're well-meaning, ignorant people who have no understanding of what the actual risks are. So we have to be careful.

But at the end of the day, your pride gets in your way and you start to think, "You know what? I've done pretty well. I've done pretty well." And it gets in your way. One of the characteristics that I see of people who have become successful is that they've made enough mistakes to be able and be willing to admit those mistakes and to the point where a mistake doesn't bother them so much.

Think about somebody who is skillful. Few examples come to mind. First, I'll just give a personal one. When I was a novice, brand new financial advisor, I was scared of ever saying, "I don't know," because I thought, "Well, I should know." Someone's going to ask me a question and I should know.

Today, I frequently don't know. But I'm not scared of it because I know, number one, I do know a lot. Number two, there's more out there than I could ever learn in a dozen lifetimes of studying. So "I don't know" is the only acceptable response. And my pride is not engaged anymore in fear of saying, "I don't know something." Similarly, let's say you're out with an athlete or maybe you're shooting.

You go out and I enjoy shooting guns. You go out with somebody who's a great shot. They know they're a great shot. And they'll pull a shot and they'll miss completely and they'll laugh because their pride is not involved in it. They know they're a good shot. They know how to shoot and they've missed so many targets over the years.

They know to laugh when they miss one. Whereas a novice will pick a big deal about missing, or perhaps an athlete is a good example. Somebody who is a skillful athlete who puts up a shot and they miss the basket, they don't worry about it. They just go and hustle down the court, get the ball and try again.

Whereas somebody who's not that way will be worried about missing the shot. Would seem appropriate to insert the classic Wayne Gretzky quote, I think it was, "You miss 100% of the shots you don't take." You miss 100% of the shots you don't take. And so do I want to be the guy sitting on the sidelines proud of the fact that I don't miss shots while watching the game from the sidelines?

Or do I want to be the guy out there who went for it, took the game-winning, potentially game-winning shot and missed, but knows that that's just one shot out of a career of thousands, thousands of shots? That's the way I now look at business and investment. If I can solve that pride issue, and I can force myself to come against my pride, and I can force myself to be humble and not to worry about it, but to simply systematically take shots, take thoughtful shots, take careful shots, but systematically take shots, then that in and of itself can transform everything.

I've got to be the kind of guy who takes shots. And though some will miss, many will not. And as long as the odds of, you know, the penalties for the missed shots is not completely catastrophic and I, what would be catastrophic, right? I think for me, catastrophic would be loss of life, pretty much.

I used to say divorce and I still believe that, but at the end of the day, I've talked – meaning that I would say divorce is catastrophic for me, because I care very deeply about marriage. Even over the last few years, I've spoken to enough people who, from my perspective, have been completely faithful and everything is still ended in divorce that I've even taken that off of my list, meaning that I intend to stay married, but even that, sometimes divorce is out of your hands.

There are many men and women who've done literally nothing wrong and had everything changed in their lives, but divorce is not catastrophic. Life is not over after divorce. Really the only thing that ends life is death. Life is over after death. Well, at least this mortal life is over after death.

And even that, as long as you've lived well and you've lived properly, you've lived righteously, you've lived a life that was befitting your capacity, that's not the end of the deal. It's not the end of anything. It's just the beginning. I don't have all of my strategies worked out perfectly on how to avoid the pride issue.

I've worked on some of them. I'm quite literally working on one right now. I've recorded this show over past months several times, but it's always felt like it wasn't quite smooth enough. It wasn't quite polished enough. It wasn't quite accurate enough. It wasn't quite the best. And so I've canned it, deleted it, canned it, deleted it.

That's always a good sign, I think, of a difficult topic that really is a matter of my pride more than it is my willingness to serve. Because if I've found this mistake in my own past and I've analyzed it to realize why I have made this mistake many times, and then if I found ways of overcoming that mistake, even if my ability to overcome it is not perfect, then I do a disservice if I don't share it.

I do a disservice if I don't go after it. And so you're listening to this now as an expression of that, an imperfectly created, not quite as beautiful of a presentation as I would like, but get it out there. Ignore the pride, get it out there and press on.

The most important thing is taking shots. If you desire to build wealth, if you desire to build financial freedom, you have to take shots, you have to go, you have to try. And it's okay if you miss some. It's okay if you miss a lot of them. What's not okay is sitting on the sidelines wishing that you took more shots.

It's not the critics who count. It's the man who's in the arena, right? That's the one who counts. In closing out today's show, what I want to emphasize is the regrets that I have on this particular topic could really only have been avoided if I had been more open and more thoughtful as I see it.

They could only have been avoided if I had been diligent to expose myself to a more diverse realm of opinion. From a financial perspective, I followed frequently the advice of those that, of the people that I articulated and others as well. But what happened is I got into a feedback loop where I was only consuming advice from one segment of the marketplace.

I was consuming advice at that time from largely mainstream people who were giving kind of the standard line. And my results didn't start to change until I started to absorb advice from a different cast of characters, from a different set of people. And then as I consumed advice from those people, then I started to realize things differently.

I've told this story. I want to tell it again because I believe it's so important, and then I'll give the application that I have yet to fulfill in my own life. I for years believed that investing in gold was stupid. I had a long list of arguments as to why I thought investing in gold was stupid.

Gold is unproductive. Anyway, I'm not going to go to the arguments. But then I changed the advice. I changed the people that I was accepting advice from, and I came across somebody who was strongly giving the advice to buy and own gold. And for a long time I listened to the arguments and I considered them.

And I asked the man for advice one time, and he's like, "How much gold do you own?" I wrote back and I said, "None." And he's like, "Well, nothing's going to change until you go buy a gold coin. Go buy a gold coin." I still have that gold coin.

It was a 1/10 ounce American Eagle. I went to the coin shop and I bought a 1/10 ounce American Eagle. I don't remember exactly the price of gold, something a couple hundred, maybe 200 or 300 bucks for it, something like that. And that one gold coin changed everything. I remember I walked into the coin shop, I felt like I was doing a drug deal.

I felt totally exposed. Here I am, a financial advisor, and financial advisors are supposed to tell people not to own gold. And if you are going to own gold, make sure you own it in ETF and it's 3% of your portfolio, blah, blah, blah. This is all the stuff.

And I felt like I was betraying my profession by going to the coin shop and buying a gold coin. So I bought a gold coin. I went out in my car and I sat and I held the thing. And I looked at this little tiny thing, about the size of a dime, maybe a little bigger, and sitting there looking at it saying, "This thing is worth this much money." But over time, that single gold coin totally transformed my understanding of the gold market.

Same thing, similar thing happened. Next time I bought Bitcoin. And all of a sudden it's like, "Oh, I understand. I started to change the world." The thing I haven't yet done, the current revolution of last few months is NFTs. I have not purchased any kind of digital ownership because I think it's dumb.

I think it's really dumb. And I watch the market, watch the market, watch the market, and I'm like, "This is dumb." But then over time, this market can change. And so what I'm going to do is I'm going to find something and buy something and basically commit to throwing the money away because I know that when I do it, it will change my perspective.

It'll change my opinion. And what I want to do going forward from a financial perspective, and I've tried to practice this, I'm just telling on myself to say that I don't do this perfectly, is I want to try to get involved in as many things as possible so that I have exposure to them.

Because you understand the market very differently. Today, for example, on gold, or today, I look at the market very differently. I'm not a gold bug. I do very little content on gold. I don't talk about gold in the same way that I feared that I would talk about it.

But I also see the hollowness of a lot of arguments. And I realize that a lot of people who are opposed to something like owning gold coins are in the same place that I was. They're repeating arguments against it, never having done it. And thus they don't understand the actual value of things like gold coins.

In the same way, a lot of people who are against your starting a business are repeating the arguments never having done it. People who are against your buying a house, a rental house, are repeating the arguments because they haven't done it. Many people who are against your buying an NFT are repeating the arguments because they haven't done it.

We can't know for certain where the future of the world is. The NFT marketplace, the Bitcoin marketplace, these new expansions of technology are rather fascinating. They're fundamentally new. There's no certainty of success. There are good arguments for and against many expressions of these things that I'm talking about and whatever else comes next year.

But if you want to win, you've got to be in the game. You've got to be actually going for something and you've got to be taking the shots. Take thoughtful shots, take intelligent shots, take shots that have a high chance of going in. If you don't have any money, I don't think that it makes a lot of sense for you to, you know, to start by not saving cash, but going out and trading NFTs.

I don't think it makes a lot of sense. I've seen some stories of some teenage boys and younger who made a lot of money trading NFTs. And what happens is that when someone takes an interest in something, there's always a market in something. I've never in my life been interested in Pokemon cards, but I went and did a bunch of research when Jake Paul did his fight with the big boxer, the anyway, the I can't remember his name, the really well-known boxer.

And he came out and he wore this Pokemon card that everyone said was worth unbelievable money. There's people who've gotten super rich in that marketplace of trading and owning Pokemon cards, while most of us have no clue about it. You don't have to be involved in everything, but don't be like I have been.

Don't repeat the mistakes that I have made of sitting back on the sidelines, ridiculing in some cases, or just being silent because of either number one, an irrational financial fear, a financial fear of catastrophe, or number two, a very intense need to protect your ego. That's not the winner's path.

I regret thinking and behaving conservatively in the past. I regret it. And when I look at my life today, almost all of the things that I am most grateful for have come from taking a risk. Even if we get totally outside of the financial realm. Remember when I asked my wife to marry me?

I was scared. I'm very grateful I did it. I wish I'd done it sooner. Remember when we had our first baby? I was scared. Grateful we had a baby. Wish we'd had one sooner. Life is full of risks. Life is full of things that can be scary. And yet, I think the pathway of those who go for it, really go for it, whatever that means to you, really go for it, that's the satisfying pathway.

And here's what's amazing about life. As long as you're literally alive, you can always try again. You can always reinvent yourself. You can always adjust. You're not static. You're not stuck. I don't care if you're 13, 30, or 83. You can always reinvent yourself. That's a powerful thing to realize.

I try not to regret the past. I really hate the concept of regret. Because the reality is, I made the best decisions that I could at every point in time. And so I don't like the concept of regret. We all do the best that we know. We do the best that we can.

We do everything that we're capable of. We do our very best. So there's really no point in regretting the past. Rather, I want to press on. But still, we can learn from the past. And I hope that you've enjoyed learning from my lesson. Be back with you very soon.

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