Making Sense - Sam Harris - July 05, 2022


#287 β€” Why Wealth Matters


Episode Stats

Length

50 minutes

Words per Minute

178.34819

Word Count

9,007

Sentence Count

5

Misogynist Sentences

15

Hate Speech Sentences

9


Summary

The January 6th hearings are not at all the partisan witch hunt that republicans are trying to paint them as. In fact, they were not even close to being a witch hunt at all. They were a desperate effort to save the country from a man who was on the brink of becoming the next president of the United States. And they were an attempt to save it from itself, not from the people who were trying to bring him down. In the wake of the hearings, I m here to remind you that there are no two sides to this political moment. There are only one sides to the political moment, and they are the ones who have been missing something, and that is the one that s been missing for a very long time, and it s been Donald Trump. If you haven t been following the hearings for some reason, you re missing something right now, and if you ve been watching the media coverage of them, you ve ve been missing out on something, then you ve got to listen to the first part of my conversation with Sam Harris about the hearings and what they were really about, and why they ve been such an abomination and how they re a symptom of a deeper, darker problem than we ve all been able to see, and how we should all be better off without Donald Trump in the White House than without him in the presidency. Sam is a writer and thinker, and he s a good friend of mine, so you don t want to miss out on the making sense of this episode of the Making Sense Podcast, you ll need to check out the first half of this conversation to get the second half of the conversation, where we discuss the hearings. . If you re not getting enough of it, then please consider becoming a patron of The Making Sense podcast, where I ll be giving you a discount on the full episode of Making Sense, the one and only Making Sense! You ll get 20% off the premium edition of my new book, Making Sense by clicking here and you ll get 10% off your first month off the retail price of $99.99, plus a free shipping discount, plus I ll get an ad discount if you sign up for the second month of the third month, and you re getting a 20% discount of $50 or more, and I ll also get access to the fourth month free of the final month of my premium membership, which includes a discount, you get a 20-day shipping offer


Transcript

00:00:00.000 welcome to the making sense podcast this is sam harris just a note to say that if you're hearing
00:00:12.500 this you are not currently on our subscriber feed and will only be hearing the first part
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00:00:38.840 okay well it's been a big week for news there are many things happening in the world
00:00:52.220 of course there were the january 6th hearings which are not at all the partisan witch hunt
00:01:01.120 that republicans are claiming most of the witnesses have been republicans that should be a pretty
00:01:07.580 obvious point and most have been avid trump supporters most of them did this lunatics
00:01:16.320 bidding up until the last moment when they were staring into the abyss some of them like
00:01:23.320 cassidy hutchinson whose testimony was the most damaging to trump have everything to lose from
00:01:32.380 coming forward no doubt she and her family are now besieged by death threats and very real security
00:01:39.660 concerns she was an extremely compelling witness she was obviously a republican partisan down to her
00:01:48.000 toes and yet she recognized that what happened in the run-up to january 6th all the cultic hysteria
00:01:55.960 whipped up by the big lie and then what happened on the day itself was an abomination perhaps i should
00:02:04.840 emphasize for the hundredth time that political partisanship has nothing to do with this liz cheney is one of the
00:02:13.600 people running these hearings she is a conservative republican she is pro-life and against gay marriage
00:02:23.420 she is by my lights a religious extremist i am sure i disagree with 95 percent of her politics
00:02:31.300 but she is a straight-up american hero in my book on a bad day she's doing more to support and defend
00:02:41.360 the constitution of the united states than the rest of the republican party has done in years
00:02:46.640 she is standing between us and the utter dismantling and desecration of our democracy
00:02:54.340 this is not a partisan point for instance i'll concede that almost anything bad that is said
00:03:03.100 about the democrats now is probably true
00:03:06.800 biden appears unfit for office
00:03:10.640 whether he's actually senile i don't know
00:03:14.520 but
00:03:16.180 he simply can't communicate
00:03:18.560 the way the president needs to
00:03:20.440 when you watch these speeches and interviews and press conferences
00:03:25.340 insofar as they even take place
00:03:28.160 every sentence
00:03:30.420 is a death-defying feat
00:03:33.340 it's like watching your mom do parkour
00:03:36.380 you're just waiting for the worst thing that has ever happened
00:03:39.940 every fucking second
00:03:41.360 and he is totally unfit to run again
00:03:44.780 in 2024
00:03:45.680 and kamala harris is probably worse
00:03:48.760 though she might be fine neurologically
00:03:51.040 she still manages to speak in word salad
00:03:53.980 in an apparent effort to talk down to people
00:03:57.080 have you seen these snippets of her circulating
00:04:02.200 many of the things she says are completely mystifying
00:04:06.020 it's like someone trained an ai on woke twitter
00:04:09.980 and had it talk to itself for the equivalent of a thousand years
00:04:14.140 and it went properly insane
00:04:16.660 and as a political candidate
00:04:19.260 she manages to convey a disingenuousness
00:04:22.960 that makes hillary clinton seem like will rogers
00:04:26.260 this administration
00:04:28.700 is doomed
00:04:30.520 right
00:04:31.540 and has been doomed
00:04:32.560 almost since the very beginning
00:04:34.060 but biden and harris
00:04:36.780 saved our democracy
00:04:38.520 by beating trump
00:04:40.300 and as odious
00:04:42.320 and as incompetent
00:04:43.440 as the democrats have become
00:04:44.660 there is simply no comparison
00:04:47.480 between them
00:04:48.880 and what the republicans
00:04:50.200 have become
00:04:50.940 under trump
00:04:51.760 trump and trumpism
00:04:54.120 is not just a symptom
00:04:56.340 of a deeper problem
00:04:57.700 they are that too
00:04:59.760 but they are also a cancer
00:05:02.220 that has been actively destroying our politics
00:05:05.100 you have to cut out the cancer
00:05:08.880 i mean trump has always been
00:05:12.500 and remains a litmus test
00:05:15.060 the real trump derangement syndrome
00:05:17.940 is to not see
00:05:20.340 how abnormal he is as a person
00:05:23.360 and to not see or to not care
00:05:26.260 how abnormal it is
00:05:28.440 that such a person
00:05:29.880 could have ever become
00:05:31.440 the president of the united states
00:05:33.020 right
00:05:34.780 that's the real trump derangement syndrome
00:05:36.880 to say or to think things like
00:05:39.680 well
00:05:39.900 all politicians lie
00:05:41.780 right
00:05:42.560 what's the difference
00:05:44.600 with trump
00:05:45.300 there's no both sides
00:05:48.160 to this political moment
00:05:49.720 making trump president
00:05:53.020 was like making
00:05:54.760 alex jones
00:05:55.960 the lead anchor
00:05:57.080 on the nightly news
00:05:58.020 whatever you want to say
00:05:59.700 about the media
00:06:00.340 whatever you want to say
00:06:01.640 about cnn
00:06:03.220 for instance
00:06:04.480 about the errors of journalism
00:06:06.860 they make over there
00:06:07.960 and about how woke
00:06:09.680 everyone is
00:06:10.620 it would be orders of magnitude worse
00:06:13.460 and the degradation
00:06:14.700 of our journalistic standards
00:06:16.100 would be complete
00:06:17.200 if they swapped in
00:06:18.700 alex jones
00:06:19.640 for anderson cooper
00:06:20.700 that would be a totally different world
00:06:23.820 journalistically speaking
00:06:25.340 and that's where we are
00:06:27.360 with the republican party
00:06:28.480 apart from the few
00:06:30.400 brave people
00:06:31.260 like liz cheney
00:06:32.660 who are trying to save it
00:06:34.040 from itself
00:06:34.680 anyway
00:06:36.660 if you haven't been following
00:06:37.580 the hearings
00:06:38.120 for whatever reason
00:06:39.320 you're missing something
00:06:41.180 right
00:06:41.920 the window they have opened
00:06:43.280 onto the last days
00:06:44.460 of the trump administration
00:06:45.380 is beyond
00:06:47.240 unflattering
00:06:48.120 and the prospect
00:06:49.660 that we may one day
00:06:50.380 see the orange man
00:06:51.420 in an orange jumpsuit
00:06:52.560 seems to have grown
00:06:53.960 a little
00:06:54.660 it's hard to imagine
00:06:56.600 him not being prosecuted
00:06:57.900 now
00:06:58.420 after what we've learned
00:06:59.940 that is of course
00:07:01.880 if he doesn't become
00:07:02.520 president again
00:07:03.620 in the meantime
00:07:04.360 which remains
00:07:05.920 a real possibility
00:07:07.080 now of course
00:07:08.800 the biggest development
00:07:09.680 in recent weeks
00:07:10.560 was the overturning
00:07:11.640 of Roe v. Wade
00:07:12.420 by the supreme court
00:07:14.420 some people have asked
00:07:16.100 for my thoughts on that
00:07:17.060 and about the ethics
00:07:18.200 of abortion
00:07:18.700 generally
00:07:19.500 perhaps I'll do a podcast
00:07:21.620 on that at some point
00:07:23.620 but briefly
00:07:25.940 I guess the first thing
00:07:27.640 to say about Roe
00:07:28.320 is that the writing
00:07:29.040 was always on the wall
00:07:30.380 for Roe
00:07:31.380 right
00:07:32.600 it has always seemed
00:07:33.840 like a dubious
00:07:34.820 judicial decision
00:07:36.280 and
00:07:37.920 just the wrong way
00:07:39.320 to enshrine
00:07:40.020 abortion rights
00:07:40.800 at the federal level
00:07:41.860 and the fact
00:07:43.880 that we've been relying
00:07:44.740 on it
00:07:45.220 for 50 years
00:07:46.400 has been a failure
00:07:48.280 of governance
00:07:49.380 right
00:07:50.100 the democrats
00:07:50.680 knew how precarious
00:07:52.500 Roe was
00:07:53.380 and yet
00:07:54.680 they completely
00:07:55.480 failed to pass
00:07:56.460 legislation
00:07:57.160 much less
00:07:58.460 an amendment
00:07:58.900 to the constitution
00:07:59.760 to properly
00:08:01.340 guarantee
00:08:01.900 this right
00:08:02.660 for women
00:08:03.220 right
00:08:04.280 so there's a lot
00:08:04.920 of blame
00:08:05.240 to go around
00:08:05.960 and the democrats
00:08:06.600 share in that blame
00:08:07.760 that said
00:08:09.080 I think repealing
00:08:09.920 Roe
00:08:10.460 is going to be
00:08:11.720 unambiguously bad
00:08:13.020 for women
00:08:13.680 in particular
00:08:15.140 poor women
00:08:15.840 in red states
00:08:16.900 and it'll be bad
00:08:18.300 for the red states
00:08:19.180 too
00:08:19.560 I think the spectacle
00:08:21.540 of having desperate
00:08:22.620 women prosecuted
00:08:23.700 as murderers
00:08:24.560 for going out of state
00:08:26.100 to terminate a pregnancy
00:08:27.120 or taking illegal
00:08:28.780 medication
00:08:29.340 at home
00:08:30.000 this will be bad
00:08:32.240 for business
00:08:33.080 I think you'll find
00:08:34.680 that corporations
00:08:35.420 don't much like
00:08:36.280 being associated
00:08:36.980 with a real life
00:08:37.940 version of the
00:08:38.560 handmaid's tale
00:08:39.340 but again
00:08:40.820 this will only hurt
00:08:42.000 red states
00:08:43.080 but I don't think
00:08:44.500 the problem
00:08:45.020 necessarily stops
00:08:46.440 here
00:08:47.000 I do think
00:08:48.080 there's a larger
00:08:48.620 concern about
00:08:49.600 creeping theocracy
00:08:51.280 and let's call this
00:08:53.140 for what it is
00:08:53.880 what happened here
00:08:55.020 the unjustified
00:08:56.840 and unjustifiable
00:08:57.840 religious beliefs
00:08:58.920 of Catholics
00:08:59.760 on the supreme court
00:09:01.020 have delivered
00:09:02.480 this change
00:09:03.360 in our society
00:09:04.840 this is religion
00:09:07.280 pure and simple
00:09:08.420 there is simply
00:09:10.100 no valid
00:09:10.800 ethical argument
00:09:11.600 that privileges
00:09:12.780 the interests
00:09:13.500 of a single
00:09:14.300 fertilized ovum
00:09:15.560 over those
00:09:16.720 of a woman
00:09:17.280 whose life
00:09:18.040 is going to be
00:09:18.440 completely deranged
00:09:19.700 by being forced
00:09:20.960 to have a child
00:09:21.720 it's not just
00:09:23.340 that pro-life
00:09:24.120 absolutists
00:09:24.900 have bad arguments
00:09:25.960 they have no
00:09:27.300 arguments
00:09:27.800 for banning abortion
00:09:28.980 at the earliest stages
00:09:30.280 but then pro-choice
00:09:32.620 absolutists
00:09:33.500 are also extremists
00:09:35.140 anyone who would
00:09:36.520 argue for abortion
00:09:37.500 as an absolute
00:09:39.120 right of a woman
00:09:40.080 at every stage
00:09:41.500 of pregnancy
00:09:42.120 as though
00:09:43.060 terminating a fetus
00:09:44.220 in the third trimester
00:09:45.140 had no ethical
00:09:46.060 implications
00:09:46.640 beyond a woman's
00:09:47.560 bodily autonomy
00:09:48.520 such people
00:09:49.760 are just not
00:09:50.900 making contact
00:09:52.120 with the real
00:09:53.540 ethical terrain
00:09:54.460 here
00:09:54.980 so our political
00:09:56.760 debate about abortion
00:09:57.680 seems pretty
00:09:58.620 confused
00:09:59.440 and it ignores
00:10:00.700 the very sensible
00:10:01.640 intuitions that
00:10:02.580 most people have
00:10:03.440 on this topic
00:10:04.300 most people recognize
00:10:06.340 that a clump
00:10:07.900 of cells
00:10:08.820 is not a person
00:10:10.720 while a 30-week-old
00:10:12.380 fetus is so close
00:10:13.700 to being a bouncing
00:10:14.720 baby
00:10:15.220 that it is a person
00:10:17.020 the real problem
00:10:19.000 here is to figure
00:10:19.920 out where that
00:10:20.980 change happens
00:10:21.880 and therefore
00:10:23.440 where it becomes
00:10:24.040 ethically complicated
00:10:25.120 to terminate a pregnancy
00:10:26.540 the most important
00:10:28.100 question for me
00:10:28.680 is at what point
00:10:29.620 in development
00:10:30.500 can a fetus
00:10:32.200 conceivably
00:10:33.140 suffer
00:10:33.680 that's not the only
00:10:35.700 consideration
00:10:36.280 but I think
00:10:37.880 it's the main one
00:10:38.620 and here it's
00:10:40.220 reasonable to think
00:10:41.060 that sensory
00:10:41.840 connections to the
00:10:42.740 cortex
00:10:43.080 are the relevant
00:10:44.440 threshold
00:10:45.160 we can be even
00:10:46.280 more conservative
00:10:46.900 than that
00:10:47.400 and draw the line
00:10:48.080 somewhere earlier
00:10:49.000 but
00:10:50.280 it's not an accident
00:10:52.280 that most people
00:10:53.940 think that the
00:10:54.600 first trimester
00:10:55.540 and the third
00:10:56.460 trimester
00:10:57.080 are very different
00:10:58.700 ethically speaking
00:10:59.720 and the difference
00:11:01.380 is in the presence
00:11:02.620 or absence
00:11:03.400 of the nervous
00:11:04.700 system structures
00:11:05.660 that could conceivably
00:11:07.400 produce suffering
00:11:09.220 terminating a pregnancy
00:11:11.040 at 10 weeks
00:11:11.900 is just different
00:11:13.320 than terminating
00:11:14.840 one at 30 weeks
00:11:15.860 given what we know
00:11:17.200 about developmental
00:11:17.920 neuroscience
00:11:18.520 I would say
00:11:20.000 that the first
00:11:20.560 should be at the
00:11:21.120 total discretion
00:11:21.840 of the mother
00:11:22.320 and the second
00:11:23.420 should require
00:11:24.100 very serious
00:11:25.200 justification
00:11:25.780 like saving
00:11:26.960 the mother's life
00:11:27.740 or saving the child
00:11:29.580 from some utterly
00:11:31.100 horrific suffering
00:11:32.280 should it be born
00:11:33.500 and obviously
00:11:35.120 emergency late-term
00:11:36.600 abortions
00:11:37.700 should and do
00:11:39.200 include
00:11:39.880 anesthesia
00:11:40.980 at a certain
00:11:42.660 stage in pregnancy
00:11:43.560 you have to treat
00:11:44.680 a fetus
00:11:45.300 as a being
00:11:46.480 who can suffer
00:11:47.220 but over 90%
00:11:49.180 of abortions
00:11:50.040 happen in the
00:11:50.760 first trimester
00:11:51.440 and given what we
00:11:53.200 know
00:11:53.560 that should be
00:11:54.920 a legal
00:11:55.640 practice
00:11:56.920 available to
00:11:58.240 all women
00:11:59.300 especially
00:12:00.780 given what we
00:12:01.800 know
00:12:02.220 about the
00:12:03.080 effects on a
00:12:03.940 society
00:12:04.440 that outlaws
00:12:05.860 that practice
00:12:06.940 ultimately
00:12:08.540 there's a lot
00:12:09.100 of ethical work
00:12:09.780 still ahead of us
00:12:10.660 to understand
00:12:11.640 human development
00:12:12.340 in a fine-grained
00:12:13.280 way
00:12:13.620 and to specify
00:12:14.940 exactly where
00:12:15.860 a fetus
00:12:16.440 even a specific
00:12:17.720 fetus
00:12:18.280 becomes a person
00:12:20.140 to which we want
00:12:21.100 to ascribe
00:12:21.740 independent
00:12:22.400 interests
00:12:23.140 but
00:12:24.300 most people
00:12:25.320 know
00:12:25.720 that the
00:12:26.120 extremes
00:12:26.860 are very
00:12:28.040 different
00:12:28.460 10 weeks
00:12:29.880 and 30
00:12:30.260 weeks
00:12:30.640 say
00:12:31.140 and where
00:12:32.880 we draw
00:12:33.260 the line
00:12:33.780 should be
00:12:34.220 somewhere
00:12:34.640 in the
00:12:35.700 middle
00:12:35.940 of that
00:12:36.660 range
00:12:37.100 and yet
00:12:38.220 our
00:12:38.380 political
00:12:38.800 discourse
00:12:39.340 tends not
00:12:39.960 to reflect
00:12:40.420 this
00:12:40.780 but the
00:12:41.840 fact that
00:12:42.100 we appear
00:12:42.380 to be
00:12:42.580 moving
00:12:42.820 into a
00:12:43.180 situation
00:12:43.580 where
00:12:43.820 abortion
00:12:44.280 at every
00:12:45.060 stage
00:12:45.620 will be
00:12:46.500 illegal
00:12:47.060 in half
00:12:48.180 the country
00:12:48.760 that is
00:12:50.140 clearly a
00:12:50.820 step
00:12:51.000 backwards
00:12:51.460 politically
00:12:52.420 and ethically
00:12:52.960 and we
00:12:54.080 have
00:12:54.300 Iron Age
00:12:54.940 religion
00:12:55.380 to thank
00:12:56.040 for it
00:12:56.660 okay
00:12:58.520 today I'm
00:13:00.000 speaking with
00:13:00.640 Morgan Housel
00:13:01.440 Morgan is a
00:13:03.380 partner at the
00:13:03.980 Collaborative Fund
00:13:04.800 and a
00:13:06.220 former columnist
00:13:07.180 at the Motley Fool
00:13:08.020 and the Wall Street
00:13:08.980 Journal
00:13:09.260 he is a
00:13:10.800 two-time winner
00:13:11.620 of the Best in
00:13:12.300 Business Award
00:13:13.020 from the Society
00:13:14.320 of American
00:13:14.800 Business Editors
00:13:15.620 and Writers
00:13:16.140 he's also the
00:13:17.440 winner of the
00:13:17.840 New York Times
00:13:18.400 Sydney Award
00:13:19.060 and a
00:13:20.160 two-time
00:13:20.580 finalist
00:13:21.200 for the
00:13:21.640 Gerald Loeb
00:13:22.360 Award for
00:13:22.920 Distinguished
00:13:23.380 Business and
00:13:23.920 Financial
00:13:24.340 Journalism
00:13:24.900 and he has
00:13:26.460 written a
00:13:26.780 wonderful book
00:13:27.500 titled
00:13:28.840 The Psychology
00:13:29.700 of Money
00:13:30.220 Timeless Lessons
00:13:31.880 on Wealth
00:13:32.520 Greed
00:13:33.160 and Happiness
00:13:33.760 and this is
00:13:35.360 the topic
00:13:35.760 of our
00:13:36.060 conversation
00:13:36.600 we discuss
00:13:38.260 how personal
00:13:38.880 history shapes
00:13:39.740 one's view
00:13:40.300 of economic
00:13:40.940 risk
00:13:41.360 the implications
00:13:42.720 of not
00:13:43.160 understanding
00:13:43.660 the future
00:13:44.200 the difference
00:13:45.940 between rich
00:13:46.800 and wealthy
00:13:47.360 how we measure
00:13:48.880 success
00:13:49.540 the problem
00:13:51.000 of social
00:13:51.480 comparison
00:13:52.060 happiness
00:13:53.400 versus life
00:13:54.180 satisfaction
00:13:54.840 saving
00:13:56.260 and investing
00:13:57.080 Warren Buffett
00:13:58.560 and the power
00:13:59.120 of compounding
00:13:59.940 rational
00:14:01.240 versus reasonable
00:14:02.140 decisions
00:14:02.760 the role
00:14:04.100 of luck
00:14:04.640 optimism
00:14:06.020 versus pessimism
00:14:07.140 dollar cost
00:14:08.740 averaging
00:14:09.180 and other
00:14:11.140 topics
00:14:11.640 anyway I found it
00:14:13.480 a very useful
00:14:13.980 conversation
00:14:14.620 and I hope you do
00:14:16.020 as well
00:14:16.460 and I bring you
00:14:18.300 Morgan Housel
00:14:19.240 I am here with
00:14:26.180 Morgan Housel
00:14:26.920 Morgan thanks for
00:14:27.900 joining me
00:14:28.400 thanks for having me
00:14:29.480 Sam
00:14:29.620 so you wrote this
00:14:31.400 really wonderful book
00:14:32.480 The Psychology
00:14:33.080 of Money
00:14:33.620 Timeless Lessons
00:14:34.900 on Wealth
00:14:35.540 Greed
00:14:36.100 and Happiness
00:14:36.600 and I want to
00:14:39.920 talk about a lot
00:14:40.740 of what's in that book
00:14:42.220 and anything else
00:14:44.140 you think
00:14:45.140 on these topics
00:14:45.920 but before we
00:14:47.340 jump in
00:14:48.180 I guess two things
00:14:49.280 I want to
00:14:49.840 acknowledge that
00:14:50.500 we're having this
00:14:51.140 conversation
00:14:51.680 at an interesting
00:14:53.240 moment
00:14:53.920 and we seem
00:14:55.180 poised
00:14:55.860 on the brink
00:14:57.000 of some kind
00:14:58.060 of recession
00:14:58.560 and the stock
00:15:00.380 market has been
00:15:01.120 fairly crazy
00:15:02.240 and just one
00:15:03.780 interesting reference
00:15:04.940 point that jumped
00:15:05.500 out at me
00:15:05.940 I think at some
00:15:07.280 point in your book
00:15:07.900 you single out
00:15:09.040 Netflix
00:15:09.560 as a company
00:15:11.240 that has made
00:15:12.140 stratospheric gains
00:15:13.420 and I now notice
00:15:14.760 that Netflix
00:15:15.860 has lost
00:15:16.640 almost all of
00:15:17.580 those gains
00:15:18.080 and it certainly
00:15:18.500 lost five years
00:15:19.480 worth of gains
00:15:20.220 seemingly overnight
00:15:21.200 so a lot can
00:15:23.760 change here
00:15:24.280 obviously
00:15:24.640 and we don't
00:15:26.180 know when people
00:15:26.740 will be listening
00:15:27.240 to this conversation
00:15:28.000 I think this
00:15:28.640 will be evergreen
00:15:30.680 and they're just
00:15:31.340 very different
00:15:31.840 moments in the
00:15:33.440 life of any
00:15:33.980 economy
00:15:34.420 and the life
00:15:34.880 of any person
00:15:35.520 it's fascinating
00:15:36.540 to see how it's
00:15:37.380 changed even since
00:15:38.220 your book was
00:15:39.140 published
00:15:39.500 it's interesting
00:15:40.960 for sure
00:15:41.380 what I would
00:15:42.000 note too
00:15:42.500 something with
00:15:43.800 Netflix you
00:15:44.360 mentioned
00:15:44.680 what I mentioned
00:15:45.560 in the book
00:15:46.000 is Netflix
00:15:46.520 during a period
00:15:47.460 of 2002
00:15:48.740 to 2018
00:15:49.380 increased like
00:15:50.620 500 fold
00:15:51.460 it went up
00:15:51.920 500 fold
00:15:52.720 that's just
00:15:53.220 cherry picking
00:15:53.760 in hindsight
00:15:54.140 but during
00:15:54.860 that period
00:15:55.360 it lost
00:15:56.220 70% of its
00:15:57.100 value twice
00:15:57.940 and it lost
00:15:58.800 half of its
00:15:59.380 value on six
00:16:00.260 separate occasions
00:16:01.000 despite increasing
00:16:02.480 500 fold
00:16:03.120 during that period
00:16:03.900 I think that's
00:16:04.580 relevant today
00:16:05.280 as it goes
00:16:05.820 through another
00:16:06.320 70% client
00:16:07.360 as you pointed
00:16:08.780 out that
00:16:09.500 I think a lot
00:16:10.060 of what we deal
00:16:10.540 with in the
00:16:10.960 economy
00:16:11.320 and the stock
00:16:12.360 market
00:16:12.680 whenever we go
00:16:13.440 through these
00:16:13.780 periods like we
00:16:14.600 have in the last
00:16:15.180 six months
00:16:15.640 when a lot of
00:16:16.340 things decline
00:16:17.660 and collapse
00:16:18.420 and there's a lot
00:16:18.900 of volatility
00:16:19.340 I think the huge
00:16:21.000 majority of what
00:16:21.600 we are experiencing
00:16:22.580 is normal
00:16:23.800 volatility
00:16:24.420 normal accidents
00:16:25.700 normal uncertainty
00:16:26.640 that you should
00:16:27.880 expect with 100%
00:16:29.040 certainty to occur
00:16:30.280 during your life
00:16:31.520 in the stock
00:16:32.400 market in the
00:16:32.980 economy
00:16:33.300 it's rarely
00:16:34.200 phrased like that
00:16:35.080 it's always even
00:16:35.880 in the Wall Street
00:16:36.320 Journal and
00:16:36.800 Bloomberg and the
00:16:37.300 Financial Times
00:16:37.840 it's phrased as
00:16:39.600 like crisis
00:16:40.260 surprise
00:16:40.940 catastrophe
00:16:42.140 even if what
00:16:43.080 we are dealing
00:16:43.600 with is something
00:16:44.420 that you should
00:16:44.980 that has always
00:16:46.340 occurred at fairly
00:16:47.620 regular intervals
00:16:48.360 and will always
00:16:49.280 occur at fairly
00:16:50.280 regular intervals
00:16:50.980 yeah we'll talk
00:16:52.400 about some of the
00:16:53.040 details there
00:16:53.540 when we talk
00:16:54.020 about investing
00:16:54.720 and just the
00:16:56.020 psychology of it
00:16:57.000 but before we
00:16:58.000 jump in
00:16:58.480 perhaps you can
00:16:59.320 summarize your
00:17:00.700 background
00:17:01.260 how did you
00:17:02.740 come to focus
00:17:04.280 on money
00:17:05.320 and wealth
00:17:06.320 and related
00:17:07.220 matters
00:17:07.680 and perhaps
00:17:08.520 this might be
00:17:09.380 the time to
00:17:09.880 talk about
00:17:10.300 the way in
00:17:10.760 which a person's
00:17:11.700 personal history
00:17:13.220 can provide a
00:17:15.660 lens through
00:17:16.220 which they look
00:17:16.980 at these topics
00:17:18.000 and it's a lens
00:17:19.820 that's fairly
00:17:20.920 difficult to
00:17:21.520 change
00:17:22.060 so I think
00:17:23.480 you have some
00:17:24.540 interesting things
00:17:24.980 in your book
00:17:25.360 on that topic
00:17:26.280 how does
00:17:27.200 personal history
00:17:27.940 and personal
00:17:28.400 bias play in
00:17:29.360 here as well
00:17:29.820 well I had a
00:17:31.380 pretty unique
00:17:32.160 background
00:17:33.060 starting in my
00:17:33.800 teenage years
00:17:34.360 I was a
00:17:34.820 competitive ski
00:17:35.380 racer growing up
00:17:36.240 in Lake Tahoe
00:17:36.860 and because I
00:17:37.960 was a competitive
00:17:38.460 ski racer
00:17:39.100 I more or less
00:17:40.740 bypassed high
00:17:41.560 school
00:17:41.780 not because I
00:17:42.740 was smart
00:17:44.080 enough to bypass
00:17:44.740 it just because
00:17:45.360 it was viewed as
00:17:46.320 getting in the way
00:17:47.140 of competitive
00:17:47.880 ski racing
00:17:48.380 so I did an
00:17:48.940 independent study
00:17:49.660 program for high
00:17:50.880 school that was a
00:17:51.540 joke
00:17:51.840 there was effectively
00:17:53.320 no academics
00:17:54.100 involved
00:17:54.560 it was a program
00:17:55.840 that was designed
00:17:56.420 for juvenile
00:17:56.880 delinquents
00:17:57.440 which I was not
00:17:58.180 one
00:17:58.500 but that's what
00:17:59.600 it was designed
00:18:00.100 for
00:18:00.340 and I did
00:18:01.060 I did nothing
00:18:01.840 I did basically
00:18:03.000 no academic work
00:18:03.900 for it
00:18:04.260 when I was 16
00:18:04.960 they gave me a
00:18:05.520 piece of paper
00:18:05.940 that said diploma
00:18:06.920 on it
00:18:07.360 but for all
00:18:08.320 intents and purposes
00:18:08.900 I had an 8th grade
00:18:10.080 education
00:18:10.520 and then I stopped
00:18:11.460 after that
00:18:11.960 and during my
00:18:12.980 teenage years
00:18:13.520 it was a lot of fun
00:18:14.520 I was ski racing
00:18:15.100 all over the world
00:18:15.760 it was great
00:18:16.340 but as I became
00:18:17.200 a later teen
00:18:17.860 18-19 years old
00:18:19.020 and all my friends
00:18:19.880 started going off
00:18:20.400 to college
00:18:20.820 I had this moment
00:18:21.900 of what now
00:18:23.160 what do I do
00:18:23.860 they all have
00:18:24.560 this skill set
00:18:25.440 in terms of a
00:18:26.200 high school education
00:18:26.900 that I did not
00:18:27.840 and they're all
00:18:28.640 going into college
00:18:29.380 that I felt
00:18:29.860 I was completely
00:18:30.620 inadequately prepared
00:18:31.520 for which I was
00:18:32.280 I started as a valet
00:18:34.620 at a high-end hotel
00:18:35.860 in Lake Tahoe
00:18:36.640 during that period
00:18:37.640 and that was my
00:18:38.160 first exposure
00:18:39.040 to wealthy people
00:18:40.440 I grew up
00:18:41.240 in a middle-class
00:18:42.720 household
00:18:43.100 but I'd never been
00:18:43.820 exposed to very
00:18:44.540 wealthy people
00:18:45.160 and at the hotel
00:18:46.140 you had people
00:18:46.540 coming in
00:18:46.980 in their Ferraris
00:18:47.740 and their Rolls Royces
00:18:48.660 and I had just
00:18:49.160 never seen that
00:18:50.020 before
00:18:50.440 and as I was
00:18:51.600 19 years old
00:18:52.720 I was very naive
00:18:53.460 in my world view
00:18:54.260 my first reaction
00:18:55.360 as a 19-year-old man
00:18:56.800 was
00:18:57.100 I want to be that guy
00:18:58.780 the guy driving
00:18:59.500 the yellow Ferrari
00:19:00.140 that's who I want to be
00:19:01.020 and I think it's funny now
00:19:02.240 because that's like
00:19:02.840 the opposite of what
00:19:03.880 I want to be
00:19:04.400 what I aspire to
00:19:05.240 but that was my first view
00:19:06.480 of like
00:19:06.840 there is another side
00:19:08.180 of the world out there
00:19:08.980 that I don't know about
00:19:09.920 and I want it
00:19:10.700 and I want it badly
00:19:11.580 and so this was
00:19:12.760 the early 2000s
00:19:13.860 the huge majority
00:19:15.200 of those people
00:19:15.820 who I met
00:19:16.520 who were very wealthy
00:19:17.200 worked in finance
00:19:18.060 and that was kind of
00:19:19.020 my first exposure
00:19:19.940 to like
00:19:20.440 okay I want to get
00:19:21.640 into finance
00:19:22.160 because I want to be
00:19:22.760 that guy
00:19:23.240 and I had this chip
00:19:24.260 on my shoulder
00:19:24.720 in terms of my lack
00:19:25.520 of education
00:19:26.080 and as the years went on
00:19:27.500 I finally started college
00:19:28.520 when I was about 20
00:19:29.220 and I had to start
00:19:30.540 at the most remedial levels
00:19:31.920 of effectively
00:19:32.720 you know
00:19:33.180 I stopped at 8th grade
00:19:34.220 and I had to start back
00:19:35.320 at that level
00:19:36.540 at a local
00:19:37.280 junior college
00:19:38.240 community college
00:19:38.880 eventually worked my way up
00:19:40.300 I graduated from USC
00:19:41.400 it took me many years
00:19:43.000 to get there
00:19:43.560 I think I was in college
00:19:44.320 for 6 maybe 7 years
00:19:45.960 if you added it all up
00:19:46.840 because I had to make up
00:19:47.700 for so much lost time
00:19:48.500 but my entire goal
00:19:50.680 during that period
00:19:51.220 was I want to work
00:19:52.460 in finance
00:19:52.920 I want to be
00:19:53.360 an investment banker
00:19:54.080 I want to move
00:19:54.540 to New York
00:19:54.980 and work for Goldman Sachs
00:19:55.940 that's what I wanted to do
00:19:56.800 and during the early 2000s
00:19:58.100 that's what a lot
00:19:58.720 of young men
00:20:00.200 in particular
00:20:00.800 wanted to do
00:20:01.580 because investment banking
00:20:02.620 had this allure
00:20:03.380 of like
00:20:03.760 that's where the power
00:20:04.980 that's where the money is
00:20:06.040 and when you're 21
00:20:07.520 22 years old
00:20:08.360 you're just so enamored
00:20:09.760 by that
00:20:10.240 and then so
00:20:11.060 I was going to be
00:20:11.500 an investment banker
00:20:12.160 and then I got
00:20:13.100 an investment banking
00:20:13.760 internship
00:20:14.280 in Los Angeles
00:20:15.360 and you did your degree
00:20:17.160 in economics
00:20:18.280 that's right
00:20:19.480 yeah
00:20:19.800 I have a BA
00:20:20.940 in economics
00:20:21.460 from USC
00:20:22.200 and I got my
00:20:24.040 I started this
00:20:25.300 investment banking internship
00:20:26.280 and this was my dream
00:20:28.280 this is what I had
00:20:29.080 aspired to do
00:20:30.140 and put all my eggs
00:20:31.340 in this one basket
00:20:32.140 and on day one
00:20:33.560 even not even day one
00:20:35.400 like hour one
00:20:36.360 of this investment banking internship
00:20:37.780 I realized
00:20:38.240 it was not for me
00:20:39.160 this is just not
00:20:40.320 going to work
00:20:41.000 the culture of investment banking
00:20:43.100 particularly back then
00:20:44.160 was really geared
00:20:45.580 towards hazing
00:20:47.000 it was
00:20:48.140 it was not geared
00:20:49.020 towards productivity
00:20:49.820 or solving problems
00:20:50.820 it was like
00:20:51.340 how much can we
00:20:52.120 torture you
00:20:52.900 to see if we can break you
00:20:53.980 and if we can break you
00:20:54.780 then you don't fit in here
00:20:55.740 and I was just
00:20:56.920 my personality
00:20:57.440 like some people
00:20:58.060 thrived in that environment
00:20:59.060 I was like
00:21:00.040 get me out of here
00:21:01.180 I couldn't
00:21:02.080 I couldn't last
00:21:03.260 you know
00:21:03.920 it was supposed to be
00:21:04.480 a several month long internship
00:21:05.740 summer internship
00:21:06.400 and I lasted like a month
00:21:07.560 and it was just
00:21:08.060 a torturous month
00:21:09.000 so then I'm like
00:21:09.840 okay I need to do
00:21:10.480 something else
00:21:11.220 and then I got a job
00:21:12.820 in private equity
00:21:14.040 and this was the summer
00:21:15.140 of 2007
00:21:15.880 I got an internship
00:21:17.540 at a private equity firm
00:21:18.540 and I really liked
00:21:19.280 private equity
00:21:19.860 it was a great
00:21:20.540 Can you just differentiate
00:21:21.760 those two areas
00:21:24.040 for people
00:21:24.480 because I'm sure
00:21:25.640 some people
00:21:26.180 could define
00:21:27.100 investment banking
00:21:27.840 and private equity
00:21:28.620 but I would imagine
00:21:29.900 many can't
00:21:30.620 so how are those different
00:21:31.880 So investment banking
00:21:33.620 is really
00:21:34.160 a service industry
00:21:35.420 of you get hired
00:21:36.480 by a corporation
00:21:38.180 to help you
00:21:40.540 transact in a deal
00:21:41.960 so if a big company
00:21:43.080 like Microsoft
00:21:43.800 wants to buy
00:21:44.820 another company
00:21:46.000 they want to acquire
00:21:46.760 another business
00:21:47.440 they will hire
00:21:48.260 an investment bank
00:21:49.180 to kind of do
00:21:50.160 the administrative work
00:21:51.340 for them
00:21:51.820 which is creating
00:21:53.180 presentations
00:21:54.300 to sell the board
00:21:55.700 of directors
00:21:56.280 getting the deal done
00:21:57.540 all the kind of
00:21:58.300 behind the scenes
00:21:59.360 valuation analysis
00:22:00.900 legal analysis
00:22:01.980 to get this big
00:22:03.540 merger done
00:22:04.400 that's at least one aspect
00:22:05.540 of what investment banking is
00:22:07.060 right
00:22:07.380 private equity
00:22:08.120 you are an actually
00:22:09.280 an investor
00:22:10.020 writing checks
00:22:11.020 where a private equity firm
00:22:12.100 is like an investing fund
00:22:13.220 that will go out
00:22:14.200 and buy
00:22:14.920 an entire business
00:22:16.060 they'll go out
00:22:16.440 and buy
00:22:16.800 a big industrial company
00:22:17.900 that was for sale
00:22:18.560 and then they will
00:22:19.460 not only invest in it
00:22:20.400 but they will now
00:22:21.020 run it
00:22:21.640 and manage it
00:22:22.320 and kind of
00:22:22.680 take over the business
00:22:23.600 and do what needs
00:22:24.760 to be done
00:22:25.180 to run that
00:22:25.920 that business
00:22:26.600 so the banking side
00:22:29.900 is very transactional
00:22:30.900 and private equity
00:22:31.780 was more of like
00:22:32.820 you're actually
00:22:33.280 a long-term investor
00:22:34.180 or a somewhat
00:22:34.740 long-term investor here
00:22:35.780 and I really like
00:22:36.580 that side of like
00:22:37.320 it was half finance
00:22:38.720 and half business
00:22:39.720 it wasn't just a transaction
00:22:41.120 it was like
00:22:41.600 let's run a business now
00:22:42.700 so I really like
00:22:43.640 private equity
00:22:44.160 and I was like
00:22:44.720 great
00:22:44.900 this is what I'm going to do
00:22:45.760 I'm going to work
00:22:46.260 in private equity
00:22:46.900 and that was the summer
00:22:47.940 of 2007
00:22:48.680 which if you recall
00:22:50.400 that's when the global economy
00:22:51.460 started breaking up
00:22:52.760 that was like
00:22:53.260 the early innings
00:22:54.280 of the financial crisis
00:22:55.260 and then so the fund
00:22:56.900 that I was at
00:22:57.620 got into some trouble
00:22:58.900 as a lot of funds did
00:23:00.380 and I was the junior analyst
00:23:02.200 and they came to me
00:23:02.940 and said
00:23:03.360 look
00:23:04.340 there's not going to be
00:23:05.520 a full-time spot for you
00:23:06.500 the fund was really struggling
00:23:07.700 at the time
00:23:08.140 so then it's like
00:23:09.360 okay I'm just about to graduate
00:23:10.460 I have a degree in economics
00:23:12.260 the entire financial world
00:23:13.860 is collapsing around me
00:23:14.980 the whole industry
00:23:15.660 nobody was hiring
00:23:16.700 2007-2008
00:23:17.980 and I don't know
00:23:18.960 what I want to do
00:23:19.580 and that was kind of
00:23:20.320 a hard tough moment for me
00:23:21.660 but then I had a friend
00:23:22.860 who was a writer
00:23:23.420 at the Molly Fool
00:23:24.100 and he said
00:23:25.140 hey the Molly Fool
00:23:25.680 is hiring investing writers
00:23:27.220 if you're looking for a job
00:23:28.620 you should apply
00:23:29.180 and I had no interest in writing
00:23:30.960 it was never part of the plan
00:23:32.280 I had no desire
00:23:33.660 I didn't enjoy it
00:23:35.280 never thought
00:23:36.480 in a million years
00:23:37.500 that this was what I would do
00:23:38.600 but I took the job
00:23:39.480 out of desperation
00:23:40.080 I just needed a paycheck
00:23:41.380 at the time
00:23:42.060 and I thought
00:23:42.900 okay I'll be
00:23:43.640 a financial writer
00:23:44.860 writing about the stock market
00:23:46.040 I'll do this for a couple of months
00:23:47.620 until I find another
00:23:48.380 private equity job
00:23:49.220 but I ended up staying
00:23:50.580 for 10 years
00:23:52.000 at the Molly Fool
00:23:52.780 and that was really
00:23:54.000 where I learned
00:23:54.800 how to write
00:23:55.460 and also learned
00:23:56.500 that I liked writing
00:23:57.560 and I enjoyed it
00:23:58.540 and I loved the process
00:23:59.580 of being an outsider
00:24:00.640 I'm not a fund manager
00:24:02.380 I'm not a financial advisor
00:24:03.780 I'm not an economist
00:24:04.740 I just kind of
00:24:05.860 sit at my desk
00:24:06.980 in my house
00:24:07.620 and observe
00:24:08.240 what's going on
00:24:09.000 in the economic world
00:24:09.960 and try to piece together
00:24:11.360 what I think is happening
00:24:12.700 and what I can learn from it
00:24:13.800 and any kind of insights
00:24:14.840 that I might be able to glean
00:24:15.840 and then write about it
00:24:17.000 as an outsider
00:24:17.660 and I really enjoyed
00:24:18.560 that process
00:24:19.240 so it was a completely
00:24:20.780 serendipitous
00:24:21.640 haphazard path
00:24:23.320 to where I got
00:24:24.140 but I think a lot of careers
00:24:25.020 work like that
00:24:25.740 so I spent the last
00:24:26.780 15 years now or so
00:24:28.280 just trying to
00:24:29.660 figure out
00:24:30.540 what's going on
00:24:31.260 inside of people's heads
00:24:32.120 when they're thinking about
00:24:33.020 risk and greed
00:24:34.620 and reward
00:24:35.400 and uncertainty
00:24:36.020 and just trying to write
00:24:37.300 an interesting story
00:24:38.880 that will capture
00:24:39.400 people's attention
00:24:40.100 about what's going on
00:24:41.600 in the global economy
00:24:42.900 yeah well your outsider status
00:24:44.980 has caused you
00:24:46.060 to produce
00:24:46.620 such an unusual
00:24:48.420 and useful book
00:24:49.840 because it
00:24:50.400 it's not a
00:24:51.740 a normal finance book
00:24:53.840 it is a book
00:24:54.460 as you say
00:24:55.820 which focuses on
00:24:56.920 just how to integrate
00:24:58.200 the issue
00:24:59.720 and problem
00:25:00.680 of money
00:25:01.980 and wealth
00:25:02.620 into a
00:25:03.700 balanced
00:25:04.640 and fulfilling life
00:25:05.720 right
00:25:06.000 and so many people
00:25:06.700 get that wrong
00:25:07.440 and so many rich people
00:25:09.100 get that wrong
00:25:09.900 it's just
00:25:10.260 it's bewildering
00:25:11.520 and it's
00:25:12.480 it's fascinating
00:25:13.040 to be
00:25:13.420 kind of be led
00:25:14.400 through
00:25:14.940 your thinking
00:25:16.580 about this
00:25:17.320 and it's just
00:25:18.440 very convergent
00:25:19.100 with what
00:25:19.920 we're doing
00:25:20.780 over at Waking Up
00:25:21.620 and thinking about
00:25:22.320 global issues
00:25:23.560 in the context
00:25:24.880 of living a more
00:25:25.980 examined
00:25:26.440 fulfilling life
00:25:27.580 what does your
00:25:28.920 personal history
00:25:30.100 so not everyone
00:25:31.680 has experienced
00:25:32.720 a major downturn
00:25:34.860 at the moment
00:25:36.180 they became
00:25:37.020 or were sort of
00:25:38.520 struggling to become
00:25:39.440 financially independent
00:25:41.220 you hear stories
00:25:42.400 about people
00:25:42.740 who lived
00:25:43.400 through the
00:25:43.680 great depression
00:25:44.280 and what that
00:25:45.860 did to them
00:25:46.460 and there are
00:25:47.580 people who missed
00:25:48.200 that entirely
00:25:48.960 and they're
00:25:49.620 almost in the
00:25:50.600 same age bracket
00:25:51.380 maybe you can say
00:25:52.320 some general things
00:25:53.240 about how a
00:25:54.740 person's experience
00:25:56.220 can define
00:25:58.060 their attitude
00:25:59.560 toward money
00:26:00.740 and building wealth
00:26:01.680 comprehensively
00:26:03.060 yeah well let me
00:26:04.420 tell you two stories
00:26:05.140 here one that's
00:26:05.860 kind of a follow-up
00:26:06.900 to my career
00:26:07.640 and one that's
00:26:08.220 just a little bit
00:26:08.660 more personal
00:26:09.180 so I started
00:26:10.880 as a writer
00:26:11.360 in 2007
00:26:12.240 which was when
00:26:12.860 the financial crisis
00:26:13.680 began
00:26:14.140 so I spent
00:26:14.940 the early years
00:26:15.760 of my career
00:26:16.500 writing
00:26:17.020 just trying to
00:26:18.080 write about
00:26:18.940 and piece together
00:26:19.640 what happened
00:26:20.240 during the global
00:26:20.760 financial crisis
00:26:21.500 of 2008
00:26:22.280 and as the years
00:26:23.440 went on
00:26:23.960 it was
00:26:25.060 I kind of realized
00:26:26.740 as time went on
00:26:27.460 that you could not
00:26:28.160 find the answer
00:26:28.960 to the question
00:26:30.000 of what happened
00:26:31.000 like why did
00:26:31.820 the financial crisis
00:26:32.500 happen
00:26:32.900 why did people
00:26:34.120 make the decisions
00:26:34.800 that they did
00:26:35.380 during the housing
00:26:36.160 bubble
00:26:36.460 and during the bust
00:26:37.180 you could not
00:26:38.100 find the answer
00:26:38.700 to that question
00:26:39.400 in a finance textbook
00:26:40.760 or an economics textbook
00:26:42.220 it just
00:26:42.760 there's nothing
00:26:43.380 in those fields
00:26:44.800 that could accurately
00:26:45.780 explain why people
00:26:47.220 did the things
00:26:47.860 that they did
00:26:48.420 but you could find
00:26:49.820 little clues
00:26:50.460 about what happened
00:26:51.340 and explanations
00:26:52.720 for what happened
00:26:53.380 if you are thinking
00:26:54.480 through the lens
00:26:55.080 of psychology
00:26:56.680 like greed
00:26:57.560 and fear
00:26:58.000 and sociology
00:26:59.160 keeping up
00:26:59.700 with the Joneses
00:27:00.420 and politics
00:27:01.700 like why certain
00:27:02.920 regulations
00:27:03.420 are put into place
00:27:04.320 history
00:27:05.260 all of these other fields
00:27:06.340 that had nothing
00:27:06.840 to do with finance
00:27:07.640 could really accurately
00:27:08.860 explain why it happened
00:27:10.120 and so that to me
00:27:11.680 was just this idea
00:27:12.760 that there is so much
00:27:14.500 more to finance
00:27:15.320 and economics
00:27:15.880 than finance
00:27:16.980 and economics
00:27:17.520 it was
00:27:17.880 these are all
00:27:18.940 fields that study
00:27:20.780 how people think
00:27:21.560 and how people behave
00:27:22.380 and behavior
00:27:23.120 is such a big
00:27:23.860 and broad
00:27:24.480 all-encompassing field
00:27:25.580 there was a lot
00:27:26.700 that we could learn
00:27:27.380 about economics
00:27:28.100 and finance
00:27:28.620 through the lens
00:27:29.200 of these other fields
00:27:30.020 that was kind of
00:27:30.940 my first opening
00:27:32.400 to this idea
00:27:33.260 of like
00:27:33.580 I want to write
00:27:34.260 about finance
00:27:35.000 and think about finance
00:27:36.100 but not through
00:27:37.740 the lens of finance
00:27:38.500 that's boring
00:27:39.220 and I think
00:27:39.680 it's just woefully
00:27:40.660 incomplete
00:27:41.160 I want to look
00:27:42.220 at this as more
00:27:42.780 of like a sociology
00:27:43.400 perspective
00:27:44.020 and I think
00:27:45.200 that's a good
00:27:46.520 segue into the other
00:27:47.340 part of your question
00:27:48.000 which is that
00:27:48.580 we tend to think
00:27:49.860 of finance
00:27:50.320 like it's
00:27:50.740 a math-based field
00:27:51.920 it's just numbers
00:27:53.380 and data
00:27:53.840 and charts
00:27:54.320 and formulas
00:27:54.820 and it's like
00:27:55.940 engineering
00:27:56.440 or it's like physics
00:27:57.180 where it's very
00:27:57.780 clean and precise
00:27:58.700 that's how finance
00:27:59.520 and economics
00:28:00.060 tends to be taught
00:28:00.740 like down to the
00:28:01.700 decimal precision
00:28:02.440 and everything we know
00:28:03.840 about it
00:28:04.180 is that it's not
00:28:04.980 it's just people
00:28:06.260 make decisions
00:28:07.200 with their money
00:28:07.800 and have outlooks
00:28:08.880 about the economy
00:28:09.520 and their greed
00:28:10.820 and fear
00:28:11.260 that are all
00:28:11.840 just based off
00:28:12.520 of their personality
00:28:13.320 and their psychology
00:28:14.140 and so much of that
00:28:15.240 is just anchored
00:28:16.060 to the own unique
00:28:17.500 experiences
00:28:18.620 of their personal history
00:28:19.620 and since everyone
00:28:20.820 from different generations
00:28:21.840 and different countries
00:28:22.780 and different
00:28:23.280 socioeconomic statuses
00:28:24.520 have very different
00:28:25.480 backgrounds
00:28:26.000 and experiences
00:28:26.720 in the world
00:28:27.240 everyone thinks
00:28:28.340 about finance
00:28:29.040 and economics
00:28:29.560 differently
00:28:30.080 I think that's why
00:28:31.100 it tends to be
00:28:31.680 a controversial field
00:28:32.680 in a way that like
00:28:33.900 physics and meteorology
00:28:35.560 is not controversial
00:28:36.600 let's not say
00:28:37.760 that we know everything
00:28:38.820 but the arguments
00:28:40.100 that take place
00:28:40.880 in economics
00:28:41.620 over like
00:28:42.260 what's the right tax rate
00:28:43.440 how should we promote
00:28:44.520 entrepreneurship
00:28:45.060 are so fierce
00:28:46.940 in economics
00:28:47.760 and I think the reason
00:28:48.420 is because there is
00:28:49.380 no one right answer
00:28:50.240 everyone is just doing
00:28:51.420 what makes sense
00:28:52.100 to them
00:28:52.440 through the own
00:28:53.080 lens of what
00:28:54.220 they've experienced
00:28:54.840 in life
00:28:55.300 and a couple examples
00:28:56.380 of this
00:28:56.820 one that I think
00:28:57.880 is really interesting
00:28:58.480 is that before COVID
00:28:59.780 Australia
00:29:00.780 had not had a recession
00:29:01.840 in 30 years
00:29:02.700 they were 30 years
00:29:03.860 without a single recession
00:29:04.800 a lot of that
00:29:05.320 was just because
00:29:05.920 China had an insatiable
00:29:07.480 appetite for their
00:29:08.500 natural resources
00:29:09.300 so this had this
00:29:10.380 giant economic tailwind
00:29:11.920 so 30 years
00:29:13.040 no recession
00:29:13.960 whereas in the United States
00:29:15.040 we had three recessions
00:29:16.800 during that period
00:29:17.540 two of which were
00:29:18.260 like crippling
00:29:19.360 devastating recessions
00:29:20.560 that reset
00:29:21.160 our entire society
00:29:22.340 and so
00:29:23.400 the people of Australia
00:29:24.800 of course
00:29:25.160 are just as smart
00:29:26.080 as anyone in America
00:29:26.880 they have the same
00:29:27.760 information as anyone
00:29:28.640 in America
00:29:29.180 they have
00:29:30.100 they're learning
00:29:31.060 about the same topics
00:29:31.920 but they had a
00:29:32.600 completely different view
00:29:33.720 of economic risk
00:29:34.620 than anyone
00:29:35.520 in the United States
00:29:36.200 would
00:29:36.480 and it's not because
00:29:37.800 one side is smarter
00:29:38.840 than one another
00:29:39.480 it's just like
00:29:40.080 the dumb luck
00:29:40.860 of their individual
00:29:41.480 experiences
00:29:42.060 and you get into
00:29:43.440 these things
00:29:44.580 of like
00:29:44.880 if you grew up
00:29:45.480 during the Great Depression
00:29:46.320 of course
00:29:46.780 you thought about
00:29:47.700 economic risk
00:29:48.540 totally differently
00:29:49.500 from the rest of your life
00:29:50.580 than someone who did not
00:29:52.060 and that's all
00:29:52.780 well documented
00:29:53.460 and whatnot
00:29:53.940 I was once having
00:29:54.760 a conversation
00:29:55.300 with Daniel Kahneman
00:29:56.060 who of course
00:29:56.580 is a psychologist
00:29:57.680 who won the Nobel Prize
00:29:58.540 in economics
00:29:59.000 and we were talking
00:30:00.500 about how our
00:30:01.340 individual past
00:30:02.920 shape how we view
00:30:03.720 about risk
00:30:04.360 and he brought up
00:30:05.640 this almost
00:30:06.440 chilling point
00:30:07.160 that he grew up
00:30:08.940 in as a child
00:30:10.400 in a Jewish family
00:30:11.940 in Nazi occupied France
00:30:13.240 that was his upbringing
00:30:14.420 and how that made him
00:30:16.300 think about risk
00:30:17.340 and just the
00:30:19.120 kind of outlook
00:30:20.120 of humanity
00:30:20.920 in a pessimistic way
00:30:22.520 way more than
00:30:23.440 I ever would
00:30:24.600 and what's important
00:30:26.120 about this is too
00:30:26.780 is like
00:30:27.080 I can learn
00:30:28.180 about World War II
00:30:29.040 I can read
00:30:29.600 about the Holocaust
00:30:30.240 but until you have
00:30:31.620 the emotional scar tissue
00:30:32.660 of experiencing it
00:30:33.900 firsthand
00:30:34.260 it's never going
00:30:35.140 to be even remotely
00:30:35.980 as persuasive
00:30:36.780 as it would be
00:30:37.780 like nothing
00:30:38.340 is more persuasive
00:30:39.120 than what you have
00:30:39.660 experienced firsthand
00:30:40.700 and this is when
00:30:41.800 people who think
00:30:42.800 and go out of their way
00:30:43.900 to be open-minded
00:30:45.100 and empathetic
00:30:45.820 to other people's experiences
00:30:46.860 everyone
00:30:47.680 including myself
00:30:48.540 including you
00:30:49.240 everybody
00:30:49.920 is just kind of
00:30:51.060 a prisoner
00:30:51.480 to their own past
00:30:52.580 of the dumb luck
00:30:53.840 of where
00:30:54.420 they were born
00:30:55.480 when they were born
00:30:56.420 and the people
00:30:57.360 who they kind of
00:30:58.080 just happen to meet
00:30:59.180 along the way
00:30:59.820 the experiences
00:31:00.500 that they happen
00:31:01.100 to have along their path
00:31:02.200 and so we all think
00:31:03.400 we're being objective
00:31:04.180 about how the real world works
00:31:05.760 but I think the truth
00:31:06.820 is nobody is
00:31:07.820 and I think that really
00:31:08.560 comes through
00:31:09.180 with how people
00:31:10.060 manage their money
00:31:10.760 and think about the economy
00:31:11.760 yeah
00:31:12.560 Kahneman is so useful here
00:31:13.840 because not only
00:31:14.620 does he have his
00:31:15.420 personal experience
00:31:16.540 but his field
00:31:17.900 of
00:31:18.160 the field that he has
00:31:19.520 largely invented
00:31:20.680 of behavioral economics
00:31:22.540 he can draw lessons
00:31:24.420 that are
00:31:25.360 highly counterintuitive
00:31:27.300 because so much
00:31:28.740 of his focus
00:31:29.200 is on how our intuitions
00:31:30.800 prove to be bad
00:31:32.120 in various circumstances
00:31:33.200 and you know
00:31:34.380 one thing that's relevant here
00:31:35.740 which I believe
00:31:36.600 you discuss
00:31:37.120 somewhere in your book
00:31:37.940 is how he thinks
00:31:39.700 about our capacity
00:31:41.560 for surprise
00:31:42.560 and that we tend
00:31:44.440 to draw the wrong lesson
00:31:45.880 from surprising events
00:31:48.020 because the lesson
00:31:49.460 people draw is
00:31:50.520 you know
00:31:50.740 let's say
00:31:51.740 there's a surprising downturn
00:31:52.980 let's say
00:31:53.440 in this case
00:31:54.680 Netflix loses
00:31:55.720 70% of its value
00:31:57.380 overnight
00:31:57.740 and you think
00:32:00.020 that okay
00:32:00.460 now you understand
00:32:01.460 that you can build
00:32:03.060 this into your model
00:32:03.860 this is the kind of thing
00:32:04.880 that is going to happen
00:32:05.740 in the future
00:32:06.280 but what you really
00:32:07.480 should be building
00:32:08.140 into your model
00:32:08.820 perhaps in addition
00:32:09.740 to the first lesson
00:32:11.940 is surprising things
00:32:14.240 are going to continue
00:32:15.380 to happen
00:32:16.040 and they will be different
00:32:17.060 right
00:32:17.280 your capacity
00:32:18.120 to be surprised
00:32:19.540 is not going away
00:32:20.620 and you can't merely
00:32:21.480 look at past surprises
00:32:22.880 in preparation
00:32:24.360 for the future
00:32:25.960 surprise
00:32:26.620 what you have to
00:32:27.880 actually factor in
00:32:29.020 is you don't
00:32:30.240 understand the future
00:32:31.340 that's it
00:32:32.380 and it's really hard
00:32:33.440 for people to grasp
00:32:34.480 that we have no clue
00:32:36.180 what the biggest news story
00:32:37.500 of the next year
00:32:38.340 five years
00:32:38.940 ten years
00:32:39.320 is going to be
00:32:39.840 that's always been the case
00:32:41.320 I don't think
00:32:41.880 there's ever been a time
00:32:43.060 in modern history
00:32:44.560 when we knew
00:32:46.240 what the biggest news story
00:32:47.920 of the next five years
00:32:49.440 was going to be
00:32:50.020 preemptively
00:32:50.900 like it's always been the case
00:32:52.040 that the biggest news story
00:32:52.940 was something that
00:32:53.460 virtually nobody saw coming
00:32:54.840 COVID
00:32:55.640 9-11
00:32:56.540 Pearl Harbor
00:32:57.720 the Great Depression
00:32:58.540 all of these things
00:32:59.460 that were like
00:33:00.420 just like generational
00:33:01.340 defining events
00:33:02.320 that no one
00:33:03.660 or virtually no one
00:33:04.700 saw coming
00:33:05.260 before they happened
00:33:06.200 so that's always
00:33:07.100 the common denominator
00:33:08.640 of these big events
00:33:09.680 it's not that they were like
00:33:10.560 big
00:33:10.940 it's not that they were
00:33:11.660 massive events
00:33:13.000 well sometimes they are
00:33:13.760 it's that no one
00:33:14.300 was prepared for them
00:33:14.960 before they came
00:33:16.180 I'll give you one recent example
00:33:17.720 of this I think
00:33:18.260 is really interesting
00:33:18.860 The Economist
00:33:19.900 which is a magazine
00:33:20.640 that I really admire
00:33:21.640 I think they do great work
00:33:22.760 but every January
00:33:23.840 they put out
00:33:24.780 a review
00:33:25.880 for the year ahead
00:33:26.860 here's what to expect
00:33:27.860 over the next 12 months
00:33:28.740 they do this every January
00:33:29.520 if you go back
00:33:30.700 and look at their
00:33:31.120 January of 2020
00:33:32.340 edition
00:33:33.120 for what to expect
00:33:34.100 in 2020
00:33:34.640 there's not a single word
00:33:36.300 about COVID
00:33:37.100 which of course
00:33:38.380 as they were writing
00:33:39.040 that edition
00:33:39.560 in December 2019
00:33:41.020 it was an unknowable
00:33:42.400 event at that point
00:33:43.180 and then if you go back
00:33:44.420 and look at their
00:33:45.040 edition from January
00:33:46.460 of 2022
00:33:47.320 of this year
00:33:48.020 there's not a single word
00:33:49.260 about Russia or Ukraine
00:33:50.260 which again of course
00:33:51.480 like you could not have known
00:33:52.500 with any kind of precision
00:33:53.880 that that was going to take place
00:33:55.020 but COVID and Russia
00:33:56.420 and Ukraine
00:33:57.280 are probably the biggest events
00:33:59.060 of those periods
00:33:59.780 but they were completely unknown
00:34:01.260 60 days before they took place
00:34:03.280 by some of the best journalists
00:34:04.740 in the world
00:34:05.260 and I think that's
00:34:06.340 that's not a criticism of them
00:34:07.620 because that's just
00:34:08.300 an example of
00:34:09.460 it's always the case
00:34:10.580 that even within
00:34:11.400 a 60 day window
00:34:13.320 we have no clue
00:34:14.880 what the biggest news story
00:34:16.020 is going to be
00:34:16.620 I think that's true today
00:34:17.900 and I can say that
00:34:19.760 with confidence
00:34:20.200 because again
00:34:20.560 it's always been like that
00:34:21.960 but no matter
00:34:22.720 how many times
00:34:23.780 we experience it
00:34:24.580 I think it's just
00:34:25.360 so uncomfortable
00:34:26.640 to accept
00:34:27.520 that level of uncertainty
00:34:29.000 and there's always going to be
00:34:30.160 just an insatiable demand
00:34:31.660 for people to think
00:34:32.860 that they can see the future
00:34:33.860 or to pay to people
00:34:35.140 who tell them
00:34:36.420 that they can see the future
00:34:37.620 because the reality
00:34:38.460 of accepting otherwise
00:34:39.360 is so painful
00:34:40.300 yeah
00:34:41.020 yeah
00:34:41.740 well with that
00:34:42.860 proviso in mind
00:34:44.280 let's think through
00:34:46.860 our relationship
00:34:48.440 to money and wealth
00:34:49.800 and related matters
00:34:51.140 from something like
00:34:52.480 first principles
00:34:53.200 I think let's start
00:34:54.900 with the differentiation
00:34:56.700 you make
00:34:57.380 between being rich
00:34:59.620 and being wealthy
00:35:00.620 how do you think about
00:35:02.160 those two
00:35:03.580 seemingly synonymous
00:35:05.980 concepts
00:35:06.860 I would first start
00:35:08.520 by saying
00:35:08.780 I made these definitions up
00:35:10.360 so people shouldn't
00:35:10.960 take them too seriously
00:35:11.920 but rich
00:35:12.940 I described as
00:35:14.020 you have enough money
00:35:15.520 to pay your monthly bills
00:35:16.900 to live the lifestyle
00:35:17.720 that you want to leave
00:35:18.420 you can make your mortgage payment
00:35:19.420 your car payment
00:35:20.020 you have the monthly cash
00:35:21.380 to make
00:35:22.300 to cover your spending
00:35:23.700 wealth
00:35:24.520 is a completely different thing
00:35:26.040 wealth is the money
00:35:26.820 that you have not spent
00:35:28.040 it's money
00:35:29.160 that is saved up
00:35:30.200 and invested
00:35:30.880 and unspent
00:35:31.880 banked up
00:35:32.680 sitting around
00:35:33.640 that you're not doing
00:35:34.360 anything with
00:35:35.040 that's what wealth is
00:35:36.160 and it's a very different concept
00:35:38.440 because
00:35:39.060 you know
00:35:40.120 I think that the biggest reason
00:35:41.920 that we should differentiate
00:35:43.380 these two things
00:35:44.240 is because
00:35:44.780 rich you can see
00:35:46.320 I can see the car
00:35:47.500 that you drive
00:35:48.140 and the house
00:35:48.880 that you live in
00:35:49.520 and the clothes
00:35:50.220 that you wear
00:35:50.700 the jewelry that you wear
00:35:51.540 that's all visible
00:35:52.300 wealth you cannot see
00:35:54.140 I cannot see your bank account
00:35:55.820 I can't see your brokerage statement
00:35:57.300 I have no idea
00:35:58.300 how much wealth you have
00:35:59.420 and we go through a life
00:36:01.400 with a very skewed
00:36:02.780 and flawed sense
00:36:03.800 of rich and wealth
00:36:06.220 because we only make judgments
00:36:07.900 and we only make assumptions
00:36:08.900 based off of what we see
00:36:09.900 so you see someone
00:36:11.140 driving a Lamborghini
00:36:12.120 and you think
00:36:12.540 that guy must be rich
00:36:13.620 and maybe they are rich
00:36:14.520 in the sense that
00:36:15.020 they can make the monthly payments
00:36:16.240 on that Lamborghini
00:36:17.020 but they might have
00:36:18.220 zero wealth
00:36:19.200 zero money saved up
00:36:21.120 that's going to give them
00:36:22.060 independence
00:36:22.620 and room for error
00:36:23.720 and the ability
00:36:24.560 to endure a recession
00:36:25.620 they might have zero
00:36:26.520 this to me
00:36:27.960 I really became aware of
00:36:29.380 when I was a valet
00:36:30.680 and getting to know
00:36:31.940 some of these people
00:36:32.460 who would drive in
00:36:33.440 in their Bentleys
00:36:34.080 and their Rolls Royces
00:36:34.960 and learning
00:36:36.100 after I got to know them
00:36:37.020 that a lot of them
00:36:37.900 were actually not that successful
00:36:39.380 they were like
00:36:40.220 mediocre successful people
00:36:41.660 that spent half of their income
00:36:43.260 on a Rolls Royce
00:36:44.480 lease payment
00:36:45.320 and that to me
00:36:46.740 was just like
00:36:47.100 all of my assumptions
00:36:47.980 about these people
00:36:48.780 was completely skewed
00:36:50.160 and on the flip side of that
00:36:51.400 some people who were
00:36:52.560 legitimately very wealthy
00:36:54.140 who you would never know
00:36:55.440 by their outward appearance
00:36:57.120 that I could
00:36:57.620 measure them by
00:36:59.200 and that to me
00:37:00.300 it was just like
00:37:00.920 after you've seen
00:37:02.220 20 of those extreme examples
00:37:04.260 of like
00:37:04.560 I thought you were X
00:37:05.620 but you turned out to be Y
00:37:06.820 just the most extreme difference
00:37:08.660 that I could think of
00:37:09.320 after I saw enough of those
00:37:11.240 it was just like
00:37:11.980 I don't believe
00:37:13.460 it's
00:37:14.700 there's so many flaws
00:37:16.720 and skews
00:37:17.500 that we are blinded by
00:37:19.020 and I would say
00:37:19.480 particularly
00:37:20.120 young men
00:37:21.340 get blinded by
00:37:22.700 the view of richness
00:37:24.080 when actually
00:37:25.260 what they deep down
00:37:26.160 aspire to be
00:37:27.300 is wealthy
00:37:27.820 they actually want
00:37:29.120 to be wealthy
00:37:29.660 because what wealth does
00:37:30.900 the unspent money
00:37:31.980 that you're not spending
00:37:32.940 that you're saving
00:37:33.660 and investing
00:37:34.240 and you're not spending
00:37:35.020 on a monthly basis
00:37:35.680 is it gives you
00:37:36.680 independence and autonomy
00:37:37.800 when you have that level
00:37:39.440 of money saved up
00:37:41.080 that net worth saved up
00:37:42.100 where you can be autonomous
00:37:43.200 that's what wealth really is
00:37:45.500 it's like using money
00:37:46.400 to give yourself
00:37:46.940 a better life
00:37:47.600 rather than just a tool
00:37:48.480 to buy more things
00:37:49.500 I think that's what people
00:37:50.720 actually aspire to
00:37:51.740 but always what they're measuring
00:37:54.020 and judging in the world
00:37:55.040 is just how rich people
00:37:56.240 are or aren't
00:37:57.380 what are the consequences
00:37:59.260 of richness
00:38:00.660 being on the surface
00:38:02.160 and wealth
00:38:03.020 being invisible
00:38:04.200 I think there's so many people
00:38:06.060 that will assume
00:38:06.980 again I think particularly
00:38:07.880 young men
00:38:08.520 who assume that
00:38:10.220 the material
00:38:11.520 aspects of richness
00:38:12.820 the nicer car
00:38:13.680 the bigger house
00:38:14.360 the fancier clothes
00:38:15.020 will give them
00:38:15.700 a level of happiness
00:38:16.620 in life
00:38:17.140 and since I think
00:38:18.880 what they actually aspire to
00:38:20.080 is to be wealthy
00:38:20.760 and to be independent
00:38:21.500 but they don't know that yet
00:38:22.720 I think it leads
00:38:23.920 to a lot of
00:38:24.660 depression
00:38:25.820 actually
00:38:26.680 if they are lucky enough
00:38:28.700 to have
00:38:29.140 a pretty high income
00:38:30.220 and they can go out
00:38:31.060 and buy the nice car
00:38:31.920 and the big house
00:38:32.640 a sense of emptiness
00:38:34.020 when they actually get it
00:38:35.180 that it's not going to bring them
00:38:36.600 what they assumed
00:38:37.680 I just finished
00:38:38.340 Will Smith's biography
00:38:39.240 which is actually
00:38:40.060 incredibly good
00:38:41.360 and he made this point
00:38:42.880 that
00:38:43.180 when he was poor
00:38:44.480 if he was depressed
00:38:46.340 he could always say
00:38:47.680 look I'm depressed now
00:38:48.680 but if I have more money
00:38:49.780 and prettier girls
00:38:51.440 then my depression
00:38:52.480 will go away
00:38:52.980 and it gave him
00:38:53.360 a sense of hope
00:38:53.960 but then when he was rich
00:38:55.660 he couldn't have
00:38:57.660 that hope anymore
00:38:58.240 if he was rich
00:38:59.100 and depressed
00:38:59.600 he could not say
00:39:00.580 oh if I only had more money
00:39:01.740 things would be better
00:39:02.380 there was no more hope
00:39:03.280 and so that was
00:39:04.620 I thought that was
00:39:05.180 a really interesting point
00:39:06.220 of I think what
00:39:06.920 the material side of wealth
00:39:08.900 can do for people
00:39:10.020 look I like nice cars
00:39:12.820 and nice homes
00:39:13.440 as much as anyone else
00:39:14.560 but I think we massively
00:39:15.700 overestimate
00:39:16.540 the amount of benefit
00:39:17.820 that we were going to get
00:39:18.680 from those things
00:39:19.640 and that point
00:39:21.900 that I just said
00:39:22.500 is like cliche
00:39:23.380 that's a worn out point
00:39:25.340 that a lot of people know
00:39:26.040 but I think the next step
00:39:27.300 of that that does go overlooked
00:39:28.540 is what we actually want
00:39:30.840 is not the material
00:39:31.900 it's not that money
00:39:32.700 won't make you happy
00:39:33.880 it's that money
00:39:34.760 can make you happy
00:39:35.400 if you use it
00:39:36.120 to give yourself
00:39:36.660 independence and autonomy
00:39:37.740 and control over your time
00:39:38.940 that's something
00:39:39.880 that I think
00:39:40.280 for overwhelmingly
00:39:41.140 the majority of people
00:39:42.340 will bring a lasting level
00:39:43.740 of contentment
00:39:45.240 and a benefit
00:39:46.580 to their life
00:39:47.320 that is overlooked
00:39:48.500 and so it's not
00:39:50.100 it's not a plea
00:39:51.380 to live like a monk
00:39:52.320 it's not a plea
00:39:52.920 to like you know
00:39:53.580 the fire movement
00:39:54.320 of retiring
00:39:54.880 when you're 24 years old
00:39:55.920 to live in a shack
00:39:56.760 it's not that
00:39:57.780 but I think
00:39:58.120 if we can use our money
00:39:59.120 with a sense
00:40:00.180 of independence
00:40:01.180 of look
00:40:02.060 if I have some level
00:40:03.400 of savings
00:40:03.920 maybe I can
00:40:04.520 you know
00:40:05.260 take a lower paying job
00:40:06.900 that I like more
00:40:07.560 maybe I can live
00:40:08.240 in an area
00:40:08.700 that has a shorter commute
00:40:09.680 like whatever it is
00:40:10.480 maybe I can
00:40:11.200 I can endure
00:40:12.600 a medical setback
00:40:14.220 without falling
00:40:15.160 into a crippling amount
00:40:16.100 of debt or bankruptcy
00:40:16.980 like all of these things
00:40:18.480 that just pile on
00:40:19.380 your shoulders
00:40:19.940 with a little bit
00:40:20.680 of lack of independence
00:40:22.280 and autonomy
00:40:22.720 in the world
00:40:23.160 that if you can remove that
00:40:24.400 by having wealth
00:40:25.560 the money that you're not spending
00:40:26.960 it's something that is like
00:40:28.540 I think so overlooked
00:40:29.740 that can actually give people
00:40:30.820 a fighting chance
00:40:31.960 at using money
00:40:32.540 to give yourself
00:40:33.020 a better life
00:40:33.660 yeah well I want to talk about
00:40:35.400 wealth and happiness
00:40:36.400 next
00:40:37.240 but there's a point
00:40:38.400 you make in the book
00:40:39.520 somewhere
00:40:40.200 related to this
00:40:41.840 the visible
00:40:42.880 and the invisible
00:40:43.500 here which is interesting
00:40:45.020 because
00:40:45.360 when all you see
00:40:46.980 all you can see
00:40:48.160 in other people
00:40:49.580 unless you really
00:40:50.620 know them
00:40:51.280 intimately
00:40:51.940 and you're having
00:40:52.700 a conversation
00:40:53.440 about their actual
00:40:54.700 financial habits
00:40:56.260 all you can see
00:40:57.660 is their spending patterns
00:40:58.940 right
00:40:59.180 you can see
00:40:59.880 the car they bought
00:41:00.760 or the house they bought
00:41:01.700 or the clothes they wear
00:41:03.320 and
00:41:03.820 you can't see
00:41:05.620 you know
00:41:06.740 how much they're saving
00:41:07.840 or not saving
00:41:09.020 and because you can
00:41:10.780 you never really see
00:41:12.140 what it takes
00:41:13.860 to be
00:41:15.240 truly wealthy
00:41:16.340 or to
00:41:17.480 merely pretend
00:41:19.140 to be wealthy
00:41:19.920 the only thing
00:41:21.020 you can
00:41:21.340 be tempted
00:41:22.260 to model
00:41:22.900 really
00:41:23.820 is the rich side
00:41:26.000 of this dichotomy
00:41:27.140 I think that's right
00:41:28.200 and I think that's why
00:41:29.220 there is a lot of
00:41:31.360 I mean here's one point
00:41:32.240 that I think is interesting
00:41:32.940 if you ask most Americans
00:41:34.240 what was
00:41:35.500 the best period
00:41:36.800 economically
00:41:37.360 in the history
00:41:37.960 of this country
00:41:38.480 what decade
00:41:39.620 was the best decade
00:41:40.520 economically
00:41:41.100 in the history
00:41:41.600 of America
00:41:42.040 overwhelmingly
00:41:42.960 across generations
00:41:44.060 across socioeconomic groups
00:41:45.420 people point to one decade
00:41:46.580 which is the 1950s
00:41:47.720 we remember
00:41:49.040 like across generations
00:41:49.980 we remember the 50s
00:41:51.020 as the golden age
00:41:51.900 of middle class prosperity
00:41:52.960 in America
00:41:53.560 that's how we remember it
00:41:54.680 and I think what is amazing
00:41:56.360 about that
00:41:56.800 and fascinating
00:41:57.280 about like the nostalgia
00:41:58.480 for the 50s
00:41:59.160 is how easy it is
00:42:00.380 to disprove
00:42:00.960 that we were actually
00:42:01.720 better off
00:42:02.400 in the 50s
00:42:03.700 and by almost
00:42:04.500 any economic measure
00:42:05.660 that you look at
00:42:06.280 the median American household
00:42:07.680 adjusted for inflation
00:42:08.700 is so much better off today
00:42:10.680 in the year 2022
00:42:11.700 than they were
00:42:12.600 in any period
00:42:13.360 during the 1950s
00:42:14.300 and it's not even close
00:42:15.400 it's like
00:42:16.060 the median household income
00:42:18.040 adjusted for inflation
00:42:18.880 is more than 2x
00:42:20.340 today
00:42:21.020 what it was in the 1950s
00:42:22.320 and life expectancy
00:42:23.880 access to medical care
00:42:25.400 educational attainment
00:42:26.680 like go on down the list
00:42:27.760 of almost any metric
00:42:28.680 you want to think about
00:42:29.380 we are better off today
00:42:30.520 than the 1950s
00:42:31.320 so then the question is
00:42:32.460 like why the nostalgia
00:42:33.360 why do we remember it
00:42:34.980 as such a great period
00:42:35.860 if we know that it wasn't
00:42:37.720 and I think at least
00:42:38.320 one explanation for that
00:42:39.660 is because
00:42:40.860 a lot of it was
00:42:42.160 the rise in media
00:42:43.580 particularly social media
00:42:44.560 of the last 20 years
00:42:45.600 that just inflated
00:42:47.160 everyone's expectations
00:42:48.320 to an incredible degree
00:42:49.620 and maybe our incomes
00:42:51.040 have doubled
00:42:51.520 since the 1950s
00:42:52.520 but our expectations
00:42:53.360 have more than doubled
00:42:54.320 because everyone judges
00:42:55.780 how well they're doing
00:42:56.760 in the world
00:42:57.220 relative to those around them
00:42:58.540 and when
00:42:59.700 your judgment
00:43:00.920 of those around you
00:43:01.920 today
00:43:02.300 is opening up Instagram
00:43:03.900 and just seeing
00:43:04.560 a curated list
00:43:05.500 of the
00:43:06.280 you know
00:43:07.960 people taking
00:43:08.760 their private jets
00:43:09.460 to their private islands
00:43:10.340 with their beautiful
00:43:11.040 model wives
00:43:11.840 and like
00:43:12.280 that's people's expectation
00:43:13.660 of what the world is
00:43:14.840 and in that world
00:43:16.120 even if your incomes
00:43:17.220 have doubled
00:43:17.820 over the last couple
00:43:18.640 generations
00:43:19.160 you're going to feel
00:43:20.080 worse off
00:43:20.600 because your expectations
00:43:21.540 are so wildly inflated
00:43:23.380 and I think that is
00:43:24.820 like that's
00:43:25.580 that's probably
00:43:26.200 a huge
00:43:27.460 socioeconomic trend
00:43:28.560 of the last
00:43:29.160 80 years
00:43:30.100 like since the end
00:43:30.680 of World War II
00:43:31.340 it's expectations
00:43:32.640 rising faster
00:43:33.680 than reality
00:43:34.800 on the ground
00:43:35.340 even if the reality
00:43:36.080 on the ground
00:43:36.600 is a lot of progress
00:43:37.760 and a lot of material success
00:43:39.160 it doesn't feel like that
00:43:40.560 because we have so anchored
00:43:41.800 onto this false view
00:43:43.460 of like
00:43:43.880 what we want in life
00:43:45.040 and what we aspire to in life
00:43:46.180 and what is normal in life
00:43:47.480 without having
00:43:48.920 any sort of grounding
00:43:49.820 in terms of how far
00:43:50.680 we've come
00:43:51.160 I mean I think anyone
00:43:52.420 if they're really honest
00:43:53.300 about it
00:43:53.660 if you said
00:43:54.200 I have a time machine
00:43:55.520 you can trade places
00:43:56.400 do you want to
00:43:56.960 live and work
00:43:58.080 in the year 2022
00:43:59.040 or 1952
00:44:00.320 I think if you were
00:44:00.980 honest about it
00:44:01.760 virtually no one
00:44:02.900 would say 1952
00:44:03.940 yeah well in defense
00:44:05.500 of all of the envious people
00:44:07.340 in the 21st century
00:44:09.300 one difference
00:44:10.720 between 2022
00:44:11.860 and 1952
00:44:13.160 is that
00:44:14.180 the level of
00:44:15.180 wealth inequality
00:44:16.200 really has
00:44:17.220 changed
00:44:17.920 right I mean
00:44:18.460 in 1952
00:44:19.620 again I think this is
00:44:21.100 something you discuss
00:44:22.020 in your book
00:44:22.560 you know the difference
00:44:23.700 between
00:44:24.120 the richest
00:44:25.080 family in town
00:44:26.420 and
00:44:27.080 the average
00:44:28.320 middle class family
00:44:29.480 in terms of
00:44:30.720 the outward signs
00:44:32.720 of wealth
00:44:33.380 wasn't all that extreme
00:44:35.160 I mean you know
00:44:35.700 there was a difference
00:44:36.960 between driving a Chevy
00:44:38.380 and driving a Cadillac
00:44:39.580 but basically
00:44:41.060 people
00:44:42.220 when you actually
00:44:43.120 just look at
00:44:44.080 the amount of
00:44:45.400 gains in
00:44:46.600 in wealth
00:44:47.660 in the society
00:44:48.400 that accrued
00:44:49.300 to the top 10%
00:44:50.580 or the top 1%
00:44:51.560 it was not completely
00:44:53.100 out of whack
00:44:53.920 the way it is now
00:44:55.500 and so there really are
00:44:56.860 I mean there's just
00:44:57.660 the you know
00:44:58.160 the far tail
00:44:59.080 of the distribution
00:44:59.900 is living in a
00:45:01.500 completely different
00:45:02.280 world
00:45:02.840 economically
00:45:03.800 than
00:45:04.560 the average
00:45:05.900 person
00:45:06.400 in
00:45:06.780 America is an
00:45:08.400 extreme here
00:45:09.000 I think this is true
00:45:09.920 globally but
00:45:10.860 the Gini coefficient
00:45:12.080 in America is
00:45:13.540 I don't know what it is
00:45:14.540 right now but
00:45:15.680 you know it has been
00:45:17.200 creeping toward
00:45:18.440 something
00:45:19.160 far more extreme
00:45:20.640 than
00:45:21.080 than anyone in the
00:45:22.100 1950s would recognize
00:45:23.560 that's true
00:45:24.760 I mean I think a lot
00:45:25.620 of that was
00:45:26.220 kind of an echo
00:45:27.080 from World War II
00:45:27.860 of like how the
00:45:28.520 economy was managed
00:45:29.480 there were like
00:45:30.280 wage caps
00:45:31.220 you know during the
00:45:32.440 war that kind of
00:45:33.060 stuck around
00:45:33.760 at least in the
00:45:34.840 corporate culture
00:45:35.680 in the 1950s
00:45:36.520 the top marginal tax
00:45:37.760 rate was 91%
00:45:38.860 in the 1950s
00:45:39.880 and there was a lot
00:45:40.820 of like
00:45:41.220 negatives that did
00:45:42.920 come from that
00:45:43.480 but you're right
00:45:43.960 that it created
00:45:44.480 this period where
00:45:45.460 wealth inequality
00:45:46.480 was so low
00:45:47.300 and therefore
00:45:48.140 when people are
00:45:49.380 measuring how well
00:45:50.360 they are doing
00:45:51.040 relative to those
00:45:52.160 around them
00:45:52.580 most people around
00:45:53.540 you in the 50s
00:45:54.180 were doing exactly
00:45:55.000 as you were
00:45:55.640 people were living
00:45:56.460 so like the small
00:45:57.260 house felt great
00:45:58.100 because everyone
00:45:58.500 else lived in a
00:45:59.080 small house
00:45:59.580 and the low
00:46:00.420 income felt fine
00:46:01.260 because everyone
00:46:01.620 else had a low
00:46:02.240 income
00:46:02.540 and camping
00:46:03.740 for your vacation
00:46:04.580 felt like a great
00:46:06.080 thing to do
00:46:06.540 because that's
00:46:06.840 what everybody
00:46:07.260 else did
00:46:07.820 and so I
00:46:09.800 think that is a
00:46:10.800 lot of the
00:46:11.240 nostalgia that we
00:46:12.020 had is that even
00:46:12.960 if we were
00:46:13.420 analytically worse
00:46:14.320 off like
00:46:15.220 substantially worse
00:46:16.120 off it felt
00:46:17.160 better just because
00:46:17.940 people were measuring
00:46:18.800 their success
00:46:19.600 relative to everyone
00:46:20.720 that's around
00:46:21.080 them and everyone
00:46:21.500 around them was
00:46:22.120 doing roughly
00:46:23.120 as they were
00:46:23.920 and so that
00:46:24.900 started to break
00:46:26.180 a little bit
00:46:26.600 in the late 70s
00:46:27.380 and early 80s
00:46:28.000 and then took
00:46:28.340 off from there
00:46:28.860 and I think it
00:46:29.680 just it went
00:46:30.420 supernova in the
00:46:31.320 last 10 years
00:46:32.020 with social media
00:46:32.760 to where now
00:46:33.980 your definition
00:46:35.160 of the people
00:46:36.240 around you
00:46:36.840 is this
00:46:37.460 algorithmically
00:46:38.280 curated list
00:46:39.360 of the most
00:46:40.320 shocking
00:46:41.580 photos that you
00:46:42.760 can find
00:46:43.260 of wealth
00:46:44.060 and beauty
00:46:44.860 and sex
00:46:45.720 and particularly
00:46:46.900 for young men
00:46:48.320 and young women
00:46:48.920 I think it's
00:46:49.480 so distorting
00:46:50.920 on where they
00:46:51.960 should be in the
00:46:52.520 world and how
00:46:53.000 they anchor their
00:46:53.640 success in the
00:46:54.280 world and whether
00:46:54.940 they like it's
00:46:56.040 this anchor of
00:46:56.820 if I'm not
00:46:57.400 driving a BMW
00:46:58.880 or a Lamborghini
00:46:59.900 and if I'm not
00:47:00.500 living in a mansion
00:47:01.220 in Bel Air
00:47:01.740 and flying a private
00:47:02.480 jet I have not
00:47:03.160 succeeded at all
00:47:03.980 in the world
00:47:04.400 which is just
00:47:05.100 a complete 180
00:47:06.160 from where we
00:47:06.580 were in the 1950s
00:47:07.540 which is was
00:47:08.020 if I have a
00:47:08.920 1200 square foot
00:47:09.700 house and I can
00:47:10.620 go camping once
00:47:11.300 a year I'm
00:47:12.120 successful
00:47:12.580 okay well let's
00:47:13.860 talk about the
00:47:14.460 relationship between
00:47:15.180 wealth and happiness
00:47:16.120 because it's not
00:47:17.100 it's not precisely
00:47:18.400 as advertised
00:47:19.120 and people's
00:47:21.260 beliefs about it
00:47:21.980 are obviously
00:47:22.740 quite consequent
00:47:23.620 we've already
00:47:24.720 begun speaking
00:47:25.620 about the
00:47:26.900 variable of
00:47:27.600 social comparison
00:47:28.540 which is
00:47:30.040 you know I
00:47:31.180 don't if anyone
00:47:31.940 has figured out a
00:47:32.700 way to correct
00:47:33.360 for it I'm
00:47:34.360 I haven't heard
00:47:35.260 of it it's
00:47:35.860 it should be the
00:47:36.900 kind of thing you
00:47:37.660 could correct for
00:47:38.860 because it really
00:47:39.480 is irrational
00:47:41.180 you know it's
00:47:41.840 the problem here
00:47:42.900 is that because
00:47:43.940 we derive so much
00:47:44.980 of our sense of
00:47:45.840 our own satisfaction
00:47:47.540 by comparing our
00:47:50.280 status with
00:47:52.500 others
00:47:53.000 absolute changes
00:47:55.380 in the
00:47:56.800 life experience
00:47:58.500 of everyone
00:47:59.560 for the better
00:48:00.380 don't register
00:48:01.980 in the way that
00:48:03.220 they should
00:48:03.620 so if you know
00:48:04.220 if you have a
00:48:04.760 tide that lifts
00:48:05.600 all boats
00:48:06.280 but some boats
00:48:07.640 are still bigger
00:48:08.760 than others
00:48:09.260 we become
00:48:10.440 numb
00:48:11.700 to those
00:48:12.700 auspicious changes
00:48:13.700 and truly just
00:48:15.120 disregard progress
00:48:16.460 across the board
00:48:17.340 because we look
00:48:18.880 at our neighbor
00:48:19.360 and he's doing
00:48:21.180 better than we
00:48:21.720 are this just
00:48:22.940 habit of social
00:48:23.860 comparison is
00:48:24.740 truly insidious
00:48:25.680 and as you know
00:48:27.120 we've already
00:48:27.480 established the
00:48:28.220 the context of
00:48:29.200 social comparison
00:48:29.940 has genuinely
00:48:31.200 changed because
00:48:32.240 you know there
00:48:33.100 are levels of
00:48:33.740 inequality now
00:48:35.140 that are are
00:48:36.400 very difficult
00:48:36.940 to think about
00:48:37.520 I mean people
00:48:37.860 don't have
00:48:39.040 good intuitions
00:48:40.220 for the orders
00:48:41.680 of magnitude
00:48:42.280 here and
00:48:43.200 one way to
00:48:44.200 think about
00:48:44.560 it which is
00:48:45.060 which makes
00:48:45.860 it intuitive
00:48:46.300 for people
00:48:46.840 if you put
00:48:47.560 orders of magnitude
00:48:48.880 in terms of
00:48:49.700 time for some
00:48:51.320 reason people
00:48:52.160 grok this much
00:48:53.320 more easily
00:48:53.760 so I mean the
00:48:54.420 difference between
00:48:55.120 a million dollars
00:48:56.700 and a billion
00:48:57.260 dollars and a
00:48:58.000 billion dollars
00:48:58.740 and you know
00:48:59.700 hundreds of
00:49:00.340 billions which
00:49:01.040 is now where
00:49:02.420 the richest people
00:49:03.160 are people just
00:49:04.600 don't have a
00:49:05.680 gut feeling for
00:49:06.860 that but if you
00:49:07.480 tell someone that
00:49:08.620 you know a
00:49:09.700 million seconds
00:49:10.480 is two weeks
00:49:11.880 and a billion
00:49:13.160 seconds is
00:49:14.060 32 years
00:49:15.080 and a trillion
00:49:16.300 seconds is
00:49:17.100 32,000 years
00:49:18.460 right and now
00:49:19.620 we're talking
00:49:20.000 about people
00:49:20.420 who are you
00:49:21.300 know a quarter
00:49:22.260 of the way
00:49:22.760 to a trillion
00:49:23.680 dollars when
00:49:24.560 you're talking
00:49:24.880 about Elon
00:49:25.680 Musk and
00:49:26.200 Jeff Bezos
00:49:26.700 and some of
00:49:27.920 the other
00:49:28.380 richest billionaires
00:49:29.900 when you're
00:49:30.960 talking about
00:49:31.300 someone who
00:49:31.700 made a hundred
00:49:32.480 billion dollars
00:49:33.600 during COVID
00:49:35.080 the difference
00:49:36.320 between that
00:49:36.840 and making
00:49:37.340 a hundred million
00:49:38.720 dollars during
00:49:39.460 COVID
00:49:39.840 over a hundred
00:49:40.400 thousand dollars
00:49:41.360 if you'd like
00:49:43.640 to continue
00:49:44.060 listening to
00:49:44.520 this conversation
00:49:45.220 you'll need to
00:49:46.200 subscribe at
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00:50:07.660 the
00:50:11.260 stored
00:50:12.300 sp insbesondere
00:50:14.360 royalty
00:50:17.280 claim
00:50:18.720 als
00:50:19.900 ζ–°ζ½Ÿ
00:50:20.220 as
00:50:21.020 ted
00:50:22.360 ΠΌΠΎΠ΄
00:50:22.880 said
00:50:24.340 and
00:50:24.600 score
00:50:25.220 另
00:50:26.020 l
00:50:26.280 as
00:50:26.340 the
00:50:26.720 score
00:50:27.640 actually
00:50:28.280 and
00:50:28.340 not
00:50:28.420 empathy