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Everything from life-changing advice on savings, spending, investing, tax, crypto, buying a house, and having a money mindset.

The most expensive thing that all of us are paying for is the information that we don't know.

How do you make the most money humanly possible? It's two things.

Let me tell a few key basic things about investing in money.

It's going to lead to amount of success that will literally put you in the top 5% of investors.

I never have to worry about money again.

If you listen to this conversation, we believe your money goals will come true in 2025. So take notes. I find it incredibly fascinating that when we look at the back end of Spotify and Apple and our audio channels, the majority of people that watch this podcast haven't yet hit the follow button or the subscribe button wherever you're listening to this, I would like to make a deal with you. If you could do me a huge favor and hit that subscribe button, I will work tirelessly from now until forever to make the show better and better and better and better. I can't tell you how much it helps when you hit that subscribe button. The show gets bigger, which means we can expand the production, bring in all the guests you want to see, and continue to do in this thing we love. If you could do me that small favor and hit the follow button wherever you're listening to this, that would mean the world to me. That is the only favor I will ever ask you. Thank you so much for your time. Back to this episode. So What is the S&P 500 for anybody that doesn't know?

And what are the returns that I'm likely to get from investing in the S&P 500? I really want to simplify this for people that are at the very start of their investing journey. You know, because this is what you spend so much of your time doing that. I just think about my team here. It's at the Diary of a CEO, there's about 30 people. We started talking about money one day, and it was mind-blowing how nobody in my team's lives had ever had the conversation with them about investing. We all think of investing as something that rich people after the age of 40 do once you have a million dollars. If you don't have a million dollars, then the only other way to invest we're taught is to buy a house.

This is driving me insane.

It's true, though, isn't it? Yes.

That's the central part of my work is that you can live a rich life, and that rich life can be richer and more vibrant and more personal than you ever imagine. If you want to travel, you can travel for longer than you ever thought. You can travel, for me, at nicer hotels. You can spend more time with your children, with your loved ones. Whatever your rich life is, you can do that. But you've got to learn a few key basic things about investing in money. Let me tell you what I would tell my family when they come to me, they go, How should I start investing? The simplest way that I advise my family is I say, Get a target date fund. Let me explain what that is. A target date fund is one fund, just one, and you pick it based on the year that you're going to retire. If you're going to retire in 2050, if you're going to be 65 in 2050, you go and you find that one fund. It's called a Vanguard 2065 fund or Fidelity 2065 or Schwab 2065. There's lots of brokers. These funds, it's one fund. All you do is put money into it.

That's it. The fund, like a pie chart, is automatically diversified. So as you get older, it gets more conservative because somebody who's 75 years old should be investing differently than someone who's 25. One fund. All you have to do is set your money up to go into it every single month.

What is a fund?

A fund is a set or a basket of stocks and maybe bonds. We've all heard of companies like Microsoft, Google, whatever. A fund owns lots of these. That's important because we've heard diversification. You should have diversified your investments. Okay, well, how do I do that? You don't need to go and buy 20 stocks and then figure out how much of each to do. That's too much work. Honestly, most people are not good at that, even professionals. You buy a fund which automatically owns lots of stocks, like hundreds of them. Over time, all you, the individual investor, like me, have to focus on is putting money into it automatically.

A fund, essentially, I've got £100 that I want to invest. I find a fund. Where do I find these funds?

You can go to Vanguard, Schwab, or Fidelity. All those are great companies. What you're looking for, regardless of what country you're in, is you're looking for a low-cost brokerage firm.

But there's also apps and stuff that I can use.

You can use apps. I don't like a lot of the apps because they gamify you to try to invest. They want you clicking and trading. I hate traders. You do not want to be a trader. Traders lose money. Investors treat investing like watching paint dry. That's how sexy it is. Trust me, I'm not getting my entertainment from investing. I'm going out, go watch a movie, go watch Netflix. But investing is boring and automatic. That's how it should be.

I used a company called Hargrave Lands down in the UK who have an When I first started investing in funds, they had a very ugly app, so I wasn't very compelled to use it. I think it's better now, but I would just do it on desktop, which I do get your point because you don't want to be game. You don't want to screen all of that. You like ugly.

It should be ugly.

You don't want it to be too accessible. Correct. I don't want to be able to check it every day.

No, look, on my phone, you will see no investing apps. There should not be. Why do you need to log in and check it every day? What's the point? In fact, Most people should check it every three to six months. Here's how you check it. You log in on your desktop. Wow, it's up. Wow, it's down. Okay, bye. You're not tweaking anything. It's like making Thanksgiving dinner. Once you've put the turkey in the oven, just let it sit. Do not fiddle with it because you're only going to mess it up. In this case, you're letting the turkey cook for decades.

That fund, so I've got £100.

I go on a website Yeah, Vanguard, Fidelity Schwab, whatever they are. I have no alliance to any of them.

Neither do I. There's various ones in the UK. I actually do recommend Hargrave Lansdown just because it's simple. I think investing in funds, there's no fee associated with the investment itself. Obviously, they might take a percentage depending on which fund you're investing in. I take my £100. Investing in Hargrave lands down, there's no minimum, from what I understand. If you invest in a stock, they charge £12 per investment. But if you invest in a fund, it's free. I put my £100 into a fund. The fund is essentially taking £1, one of those pounds, and investing £1 into Facebook. It's investing £1 into Google, £1 into Shopify, £1 into Spotify, £1 into NVIDIA or whatever. It's doing that for me. It's managing it for me. It's making the decisions for me. I just put the money in every month, whatever I can, and I leave it.

Yeah. And let's go even deeper. I love that we're getting into the nuts and bolts here because honestly, most people, they do not know how to invest. Literally, what website do I go to? And then what do I do? The fund owns these different stocks, and some will go up and some will go down, and it's inconsequential to you. All you need to know is you own this fund. Now that you've opened up an account and you've sent a hundred bucks or a thousand bucks, great. You've made one of the most important decisions of your life. Now, there's just one more thing you have to do. Set up an automatic transfer so that every single month you have a certain amount of money going in. Now, if you don't know how much money, use my conscious spending plan guideline. What did I say? 5 to 10% of take home is a good guideline. You should be able to do 5%, trust me. Anyone who comes to me, they go, Ramit, there's no way. Must be nice. I can't afford. I go, show me where you're spending your money. I guarantee you I can find 5% to send in every month.

Now, you're not trying to send it in. I don't try to brush my teeth in the morning. It's It's a habit. Investing is even easier than brushing your teeth because you set it up automatically. The investment fund will automatically draw from your checking account, and it will pull in 100 bucks, 500 bucks, 1,000 bucks, whatever your number is. You're not going to log in for three, four, five months. You're going to log in a few months later, you're going to be like, Oh, my God. I didn't even realize that all this money is in here. When you add that plus compounding over many years. That is how real wealth is created. I don't want anyone to think that you have to be rich in order to start investing. One of the ways you get rich is by investing.

I've got a friend that's currently actually in this building at the moment, and I had this conversation with them about a year ago, gave the advice that you've just given there. About two months later, this individual, who I shan't name, came to me and I said, How's your your investments going in that fund? They said, Oh, yeah, I had bills. I had a credit card bill, so I took it out.

Oh, yeah. She treated it like a checking account. Investments, for me, are places to accumulate wealth. I don't draw from it. That's what a checking account is for. What that is, is there's two parts to what your friend is saying. One is, mentally, she's thinking that this investment account is just money I can draw from if I need it. So I would gently change the way she thinks about it. The second is, I guarantee her account structure is a little subpar. Here's how I would set it up. This is in chapter 5. It's all automation because trust me, I don't want to spend time transferring money back and forth. I don't spend any time on that. You get paid, your money goes into your checking account. From your checking account, it is automatically transferred to a savings account. In fact, I have savings accounts for vacation, car, down payment, all that stuff. You have money set up for specific goals. Money is transferred to your investment account. It's transferred there. I'm not going to touch that money. I'm going to let it cook. And then I have my guilt free spending, which is going out with friends, whatever I love, and my credit card bill is automatically paid off every single month.

That's how you want to set it up. It takes a couple of weeks to set everything up and then you never have to think about it again.

How can you prove to me that this is the way to make wealth? What case studies have you got that investing in funds over a long period of time is the path to financial wealth? Because you said earlier about the paint-drying thing. The narrative that we see about why people and how people get rich is they sell a company or they have a lottery win, or maybe they buy some cryptocurrency and it goes up. That's what we hear. That's what we hear. That's what we try and emulate. Totally. Prove to me that this fund strategy is better.

Well, there's a couple of things. First off, the research over more than 100, about 100 years, shows the returns of the stock market. The returns tend to be, at least in America, they tend to be around 10 to 11%, and if you take out inflation, you get about 7 to 8% per year. Now, for anyone listening, they go, Okay, well, what does that mean? That number means nothing to me, 7%, whatever. If you go right now and you Google investment calculator, and you just plug in your age, you plug in, let's say, 200, 300 bucks a month, and you plug in 7% return and you just watch how that money grows, you will be shocked.

Jack, give me my phone. I'm going to do it now.

Okay, so let's search for compound interest calculator. There's a really simple one. It's It's called money chimp.

Okay, I've got it.

All right. All right, so there's four numbers we need to fill out here. Let's take a look. The first is current principle. That means how much you've got in the bank.

I'm going to say $5,000, and I'm going to start when I was 16. Because if I'd saved my money when I was 16 and not spent it recklessly, I think I could have had that $5,000 when I was 16. Annual addition, what does that mean?

How much can you invest per year. For most people, they think about on a monthly basis. They might say 200 bucks a month, which would be $2,400 annual addition.

Okay. What do you want to say? I'm going to say, can I say $5,000?

Yeah, that's about $400 a month. I think that's reasonable. I often find that with people making median or slightly above median salary, that there are hundreds of dollars a month of money that is unaccounted for, that if properly made intentional, could invested. So great, 5,000 a year.

All right. Obviously, once I got past a certain age, I could have increased that, though.

We're going to talk about that. Okay. Hold on to that idea. Okay. How many years? This was you at 20?

This was me at 16. Oh, okay.

And how old are you today?

Thirty.

Okay, so 14 years. Let's just do it until today and we'll see what happens.

Okay.

All right. 14 years. Then it says interest rate. What should we assume for that? Is that 8%? Yeah, 7-8. I do seven just to be super conservative because I never want to be surprised on the downside. If anything, I'm going to make more. So 7%. All right, let's calculate it. Okay. What do you see?

Damn.

What do you see?

$133,000 537.

Yeah, that's what you would have had right now. Now, let's add some context. So this is really important. You see a number that says $133,000 at age 30.

Yeah. Okay.

Is that a lot? Is that not? I don't know. Let's break it down. At that point, you started with $5,000, and you invested $5,000 per year. We assumed no raises, even though you obviously made more than you made at age 16. We assumed you stopped investing at age 30, which is obviously ridiculous. You end up with six figures. Let's play it out. Let's take it until 40. Instead of 14 years, you invested for 24 years. What do you see?

I would have $336,000.

It's getting better.

From just $5,000 a year.

It's not much. It's fantastic. Again, 400 bucks or so a month is very modest. Remember, people's income goes up, typically in their 30s and 40s. If you already are investing a little bit automatically, all you have to do is just tweak a number and it will take an extra couple of 3, 4, 500 bucks. Let's do one more. Let's go to 34 years just because I want to see what happens, and then we're going to play with the other numbers.

Investing from the age of 16 until I'm 50, I would have 733 $76,000 in my account.

Now, I want to do the full thing. I want to do a more realistic number here. Instead of 50, we're going to go 49 years. That It takes you to age 65. Instead of $5,000 per year, your income obviously went up from being 16 years old. So I'm going to pick a number out of thin air, and I'm going to tell you how I picked it. I'm going to say instead of $5,000 a year, it's actually going to be $30,000 per year. Let me tell you why I picked that. In your early years, you don't have as much money, but you were still investing a little bit, which shows that you're dedicated. As As your income goes up, you're going to start proportionally continuing to invest. At a certain point, your income will be really high, and that will bring that average up. That's why I switched it to $30,000 per year. I actually think this is quite modest, but I'm going to go ahead and do it. Here we have someone starting investing at $5,000. They invest $30,000 per year. They grow it for 49 years at 7%. Do you know the math?

No, tell me.

$12,303,000.

That's me starting with 5K, gradually ratcheting it up until I'm investing, well, investing 30K on year, a year per average across those 49 years.

Yes, which is a flaw in this because it's so simple. That money invest, you are not actually going to invest that much early on. You'll invest more later. So you won't actually... You'll maybe have a marginal amount less. But we're talking 10 versus 12 million. That's a lot of money.

Then if I got 8% instead of the 7%, I'd have 17.4 million.

Yeah, but don't mess with that. Because this is what people do. They go, Well, if I got 13%, I'm going to invest in this PE fund. I go, Don't do that. You're going to lose all your money. Just stop. 7% is safe. It's conservative. That's why I am here. That's why I want to encourage people. You don't need to juice your returns. I hope you do get 8%, but I don't want you to I want you to count on that. I want you to count on safe, stable returns. What matters for you is the time you started early and the amount you have a considerable amount to invest.

The biggest debt, one of the things I love saying this, but the biggest debt all of us pay is ignorance. And so I heard this close at this pitch years ago, and this guy got on stage and he was like, Hey, man, she was like, How much do you make? She was like, $50,000. So you're at $50,000 on the whiteboard. And then he wrote a million dollars on top of the $50,000. And he subtracted it. It said, $950,000. He said, You pay life $950,000 every single year for not knowing how to make a million dollars a year. And it was a crazy accepting. He was using it to close the audience. But the most expensive thing that all of us are paying for is the information that we don't know. And that's both frightening and also incredibly exciting. Because like, fish in the best ponds. A good fisherman knows where to And a different way of saying it is, find the people who value what you have the most. And I'm sure you've heard this. Have you heard the story of the father and the son with the car? No. Okay.

Maybe I have. I'm not sure if that's enough detail. No, it's good.

So there's a father who gifts his son an old beat up car. And he says, Hey, I don't know if it drives or not, but you can take it down to the dealership down the street, see if you can trade and get some money. He was like, Okay. So he goes down the street, goes to the dealership. They He's like, Hey, we'll give you a thousand bucks for it. And he hears them out, comes back home. He's like, Dad, they said, give me a thousand bucks. He's like, okay. He's like, go to the impound yard where they break the cars up just for metal. He's like, see what they'll give you. Goes there, and the guy's like, I don't know, this might be 500 bucks of metal. The kid comes back home. He's like, Daddy, you know what I'm saying? It was going to be $500. He's like, okay. He's like, hey, go down the street to that antique dealership. See if they've got anything that used car a lot. He was like, okay. So he goes down there, talks to the guy, comes back home, super. He's like, Daddy, you won't believe it. He's like, this is a historic car.

There's only 10 of them left. He's like, it's worth $100,000. And so the father smiles and he's like, and the less than I What I want you to know is that it's not necessarily who you are, but the people that value you the most. And so you can talk to different people and go to the people who value you. And I love that story because it's a huge business story in terms of Sell where the fish are, where the big fish are. If you're going to go hook fish, go where the whales are. It takes the same work. But a lot of it's just belief. People don't think it's possible. And so a lot of times you have to just keep leveling up and you sell your first $10,000 thing, you sell your first $100,000 thing, sell your first multi $2 million package, you realize that's the exact same thing. It's just maybe if anybody's listening right now, it is the same thing. It's the exact same thing, and sometimes it's easier.

It's normally easier.

You've seen that meme that says, So what exactly am I going to be getting for this $50 thing? And then it's $50,000. Client's like, Why are sent yesterday. What else do you need? And that's totally true. But I think there's a skill in understanding where to fish.

Certainly a skill. Information. It's information. It's even knowing that there was another lake over there in part. That's why listening to conversations like this is so valuable for people because it lifts a curtain. And you go, what the fuck you guys were behind here the whole time partying? That's what my business life has been like. It's like a gradual... I think I heard Kevin Hart describe on Joe Rogan one time where he said, There's this other room where these people are playing this other set of money games. Then when you get in that room, you're almost pissed off that nobody told you this room existed. But then there's another door. Then you get through there, maybe a couple of years later, and you find these other people, these fucking billionaires that are playing another set of games, and you're going, What? And they're chilling. They're just smoking cigars. They're not even Are you doing any hard work. And you go, Tell me the games that you guys have been playing in here. Then, again, the frustration is... That's what I feel like in my business life, it's been like where at the jump, I'm charging, I don't know.

I remember we found our first deck from 2014 charging. I remember the package, we had gold, silver, and bronze. It was like, $200 package for support, and then $500, and then the gold package where we threw everything in for $1,000. I remember one of my first clients accepting that. Then I think today, the There's no difference. Okay, there's skills that have increased, but information is the big thing. Knowing how to do it, when you think about curtains that have lifted, that have really shifted the games you play from a value-money perspective, where someone's turned the lights on you, you go, fuck, of course. Is there anything else that comes to mind?

I will answer it with the stair steps of how each order of magnitude change in my income. When I went from being an employee to self employed, I went from making four figures a month to five figures a month. And that was for me just like, I am now in control. The level above that was I started having other people who worked for me and then went to six figures a month. And then from there, stayed there, did the turnaround business, still had the same organizational structure, had another degree of leverage. And so the next degree of leverage was that I started licensing. So it was digital. So the cost of goods was basically nothing. But all of these things are about leverage. And so this is like one of It's one of my favorite topics in the whole world. But if we define leverage as the difference between what you put in and what you get out. So if you have a lot of leverage, you put a little bit in, you get a lot out. If you have no leverage or low leverage, you put a lot in, you get a little bit out.

And a lot of times people who are listening to this and are not making as much money as they want, they're putting lots of input in and not getting a lot out. They have low leverage opportunities. And so understanding how to get more for what you put in is the game overall. And so the first level that I ascribed was labor. It's just work. First, I was working for someone else, then I worked for myself, I got other people to work for me. First level, each of those levels was more leverage. Above that, I had media, which is the thing that I was licensing out. So another degree of leverage. I made it once and I could license it out, infinity. On top of that, I have capital. I can take capital. I don't have to sacrifice time in order to get something for it. So it's high input/output. Above that would be some technology. You build the code once, in theory, obviously, you continue to improve the code, but theoretically, you build the thing once, and then a million people can use it. And so you want to stack as many types of leverage as you can, and as much of them as you can, because Joe Rogan also has a show, and somebody else has a podcast.

They both technically are using media as their vehicle for leverage, but he has significantly more of it. So it's not just like, I'm going to use all these, right? Yes, but it's also how much and to what degree. But Facebook had other people's money. He used media, had other people's work. Max leverage. Amazon, same thing. They used every element of leverage, and they maxed all of them out. And that's at least the I've heard, and N'Avall talks about this, if you're familiar with Nival Ravacont. He talks about these things as the elements of leverage or four types of leverage. And understanding that, for me, has been a blueprint for wealth overall. And then Capital, there's degrees of capital. First, you can get friends and family to give you money. Then you can get institutional money, and then you can get public money, which you saw the IPO money, the fact that the Nasdaq was Forex, the Düsseldorff exchange, is that where it was? There's just significantly more capital in that market. And so same work, more zeros. And so I love this topic because I think that that's fundamentally like the people who move faster in life don't actually move faster they get more for every step.

If right now you want to find where is your unfair bet that can make you your millions with your skillset that nobody else in the world can replicate except you. Here's what I need. I would need a whiteboard, I would need a pen, which I would do if I was you, and I would need a smart friend. Perfect. I've got Steven here. At the top of the whiteboard, I would write on this side, skills. Oh, my God, you're going to see my handwriting like a doctor. On this side, I would write money. I would start writing down all the things that we're brilliant at. Let's pretend it's Steven here. We'll pretend you don't have all the things that you have, but your core skillset.

You can put your hand on the screen, by the way.

It makes me nervous. Am I doing this like a boomer?

I The handwriting is a little bit... It's giving doctors.

Oh, yeah. Look at that. Okay. That's so embarrassing. Okay, so social media, right? You're incredible at social media. What else are you probably good at? Well, you know a lot of people. You've got a network. What else? Well, It's not just social media, though. It's actually a few particular things. It's like YouTube, and I think you're one of the best in the world at short form video, right? You're also one of the best in the world at a data-driven social media A strategy. You can say up front, Hey, we think this is going to go viral because the data says this thing over here. What else is Steven good at? He's charismatic. He can probably get people to agree to things just by talking to them. What else? British accent. Probably you want more in-person interaction because we've got a very charismatic person. What else is Steven really good at? Well, he asks a lot of questions.

This is my hinge profile, by the way. I'm just going to copy and paste when I stop over.

Yeah, good looking, funny. Thank you so much. Yeah, exactly. We'll just say these. There's a lot more deal flow, but let's just pretend that all you're good at is social media. You're good at getting to people, which is a network. You don't even have to know rich people. Just, can you get to them? You're charismatic, you're I'm not going to be data-driven. Okay, great. We've got all these skills. Now, how could we apply these skills to get the most money humanly possible? I would do exactly what you said. How do you figure out most money humanly possible? It's two things. It's the... How would I do this? It's the It is the size of the problem. It is the value of the solution.

Interesting. Okay.

If I'm thinking about this for you, if I go and I give your social media skills to a trade or service business, I'm not going to make that much money. How do I know I'm not going to make that much money? Because I'm going to go look up online, what is the average revenue of this business and on the average profit margin. Now, you probably didn't even think this way when you were thinking about it, but you guys look online right now, what's the average profit margin of a biotech company and average revenue? Let me tell you what it is. It's going to be like 50 to 80% It's going to be hundreds of millions that you could potentially get. Trade services business, a lot less. That's where I would start. Skills plus money really equals to three things, which is sector, size of the business, and profitability of the business. I would play this game. What that might look like is you go, Okay, I know that I have some friends in Let's go to the places that we know have the most cash in Silicon Valley, on Wall Street. If they could make a lot more money, if they had a lot more attention, because what I'm selling is attention, I want to get to the people who can make the most money with the most attention.

That means that I'm not going to go to Walmart, only has 6% margins, I'm going to go to the highest person that I could get to. It'd be fun. If anybody's listening to this right now, try it. Tag Steven and I in your stories on Instagram of your little charts, and I'll give feedback. Anybody that tags me in it, if you're like, Here's what I think my skill is, here's what I think the industry is, I'll tell you one way or another. It can be fun. You can see other people's examples live.

For people that are only listening on audio and that can't see what this-Chicken scratch looks like.Chicken scratch you've drawn on this iPad. On one hand, you have, you list your skills, and then on the second side, you're listing the ways you believe you could make the most money from those skills based on the size of the problem you'd be solving with them and the value of the solution. For example, let me try and play this game with you then. I am a writer, so I'm going to do my skills on the left hand. I'm a writer, and on the right, I'm going to write money. I'm a writer. I'm really good at writing stuff. That's it. I get the internet, so I understand LinkedIn blogs and stuff like that. But that's it. I'm a writer.

Let's go with what would be the worst. What would be the worst thing you could do if you're a writer? To make no money. To make no money. Because sometimes it's easier to do the negative. Okay.

Working for a local newspaper.

I was thinking fantasy books. You could write fiction, really hard to make money in. You could write for a local newspaper. That's an even worse idea, so I like that. Now you've got your bottom tier, which is 14 bucks an hour or something like that. Now, if you look about it, you could Google this, what is the highest paying jobs for writers? I bet the thing you'd find on top, copywriter.

Why? I got a better one. What's a better one? Do you know why I know this? Because when I was in working in biotech, we couldn't hire one, which is a medical writer.

Oh, so smart.

Hyper specialized. Honestly, a typical copywriter, when I was working in my social media company, we might pay entry-level £25,000, which is probably about £35,000. A medical writer, someone that can write about the psilocybin compound in my psychedelics business would get paid $150,000 or more. We just couldn't find some. We found loads of people that could write, but nobody that had within their skill stack, even though it's quite easy to teach, the ability to write using medical words, slightly medical words. It doesn't mean you need a medical degree. You could probably learn how to become a medical writer in a month if you really committed yourself to it.

That's so true. And same with finance. We go to the things we know. You know biotech, you know there's a niche there. I know finance, and I know that, again, it's one of the highest paying industries. A financial writer. What would that look like? It would look like somebody who knows how to write, probably an investor update.

Yes. Yeah.

So hugely lucrative. Then the other thing you could do is, I guess I didn't even think about this before, it would be size of the problem, it would be value of the solution, and then it would also be structure of your job. If you're a copywriter, I wouldn't take a job a 35K, what would I do? I would say, Hey, pay me. What is the salary you want to offer? 35,000? I'll take 10,000 so I can eat because I'm hungry. But can I have a percentage of the upside that I drive above and beyond your goal. So if I'm going to write copy that converts into revenue, like I'm going to write a funnel for your biotech company, or I'm going to write a funnel to get investors for you. If right now per month, you get $100,000 through that funnel, how about you just pay me an extra 10% of everything I drive above your 100K? So I think that's another way you can make more money is getting smarter on deal structuring.

Well, that's actually when I moved into biotech, how I got paid. When I talked about being paid a thousand times more than I would have previously, it's because the way I got paid was in options in the IPO. Brilliant. In that particular company, I got given 400,000 shares effectively in the company at a certain price. When the company IPOed at 3.2 billion on the Nasdaq in July '21 or something, even though I'd only worked in the company for about six months, just helping them build out the marketing team, I think my net return on the equity value at the time was quite close to 10 million. So six months work, 10 million return. And really, the reason I did it was because I was so interested in psychedelics. But it just opened my eyes to the fact that any kid with social media skills and that knew how to structure a deal with these people could have walked in there and said, Give me some stock in this IPO, and run your social media for six months. You're so right. Could have changed your life.

Yeah. It's something I'm struggling with trying to get people to understand right now is that even if you never buy a business, which is what people fixate on, I haven't bought a business yet. I haven't bought a business yet. It's like, you're never going to regret learning how to do deals. You're never going to. I think that is the most valuable skill set in the world.

I completely agree. It's so unfair that people don't know about it.

It's so unfair. But it's also your fault if you don't know about it, because nobody's gatekeeping this information anymore. It used be gatekept. When I first started off in private equity, I wasn't allowed in the rooms where they were actually doing the deals and the terms. If I wanted to see what the final terms were, I had to sweet talk my way into figuring out how they structured it.

But it's an unknown unknown. Before I knew, I didn't know that I didn't know.

Yeah, that's true. That's very true. But now I think there's enough people out there talking about it where you're like, I mean, if you think about whether you like Donald Trump or not, what is he really good at? Deals.

The art of the deal.

That's it. That is what I mean, Elon Musk, how does Tesla actually make money? They make money through credits, through credits for solar. He was able to survive for those 10 years of building that company because he has some of the best solar tax credits in the world that he negotiated with the government.

Where does one go then? Where does a 25-year-old kid listening to this go to learn how to make deals?

Well, I have a book coming out called Main Street Millionaire.

Yes, exciting.

I know. We have stuff we can I'll tell them about that later, too. Okay.

Well, I'm going to link Main Street Millionaire below so everyone can pre-order it. I've pre-ordered, I think, 10 or 20 copies of it, maybe a couple more.

But that's like 30 bucks, and you learn almost everything you need to know about doing a deal to start. That book is only what you need to know. I made it on purpose, not really long, not overly intense. It is exactly what you need to know. Then if you like learning deal making and you like that book, then you go to contrarianthinking. Com, and we have courses and free newsletters and a community all about buying businesses. But that's where you should start.

The other thing I came to learn as I got money, and it was almost like someone pulled the curtain back for me, is how wealthy individuals play the tax It's a tax game. Oh, my gosh. It's a tax game that the average person has no idea is going on.

Got to talk about money. Tax avoidance is a key skill to building wealth. By the way, we don't talk about... I speak openly about my, I won't call it tax avoidance, my tax strategies. It's like they said, if you're a prisoner of war, you have an obligation to escape. If you're trying to build wealth, you have an obligation to pay as little tax as possible. Do it legally. But Apple will issue their IP to Apple International and Ireland, and then they will use Apple Ireland. They will license their IP to America, charge them tens of billions of dollars, thereby increasing the income of Apple Ireland at a lower tax rate and decreasing the income in the US. Thereby lowering their overall tax rate. That is pure tax avoidance. Every organization, every corporation does this to the hilt, and so should you. By the way, I will vote for people who have an alternative minimum tax. We have to raise taxes on corporations. The 25 wealthiest Americans pay between 6 and 8% tax rate.

What are the tax games they're playing? The rich people.

There's a bunch of them. First and foremost, it's you If you buy stocks, you never sell them, you borrow against them.

Okay, explain that to me like I'm a 10-year-old.

Sure. You own $100 in Amazon stock. You need money to buy something instead of selling the stock. And it say it's gone up 50%, I say it's got doubled. You would have to realize a capital gain and pay long term capital gains on that $50 gain? No, just borrow against it and let the stock continue to grow. You pay a little bit of interest, hopefully from your current income. But basically it's invest, borrow against it, and die. Put it into a trust and then pass it on to your kids. There's a lot of state arbitrage. Jeff Bezos just moved to Florida to spend more time with debt. Isn't that sweet, Steven? Isn't that nice? No, it has nothing to do with his father. Give I'm on a fucking break. He aggregated $160 billion in wealth. He would pay about another 8 or 10 % in state taxes in Washington because he's got to leverage the public school system, the University of Washington, the Seattle Tacoma Airport, the hospital system. But in the US, you're allowed to peace out to Texas or Florida and pay no income tax. So all the people shitpost in California or New York, show me someone who's all of a sudden can't handle San Francisco politics.

I'm going to show you someone who needs to recognize a capital gain and has all of a sudden decided they like Texas politics. It's really not very disingenuous. The tax loophole I've leveraged in the US, there's something called 1202 or Qualified Small Business. When I started L2- What's L2? L2 is my analytics company. I started it. I invested a small amount of money. Because it was a business worth less than 50 million, your business would qualify in the US as QSB, small business. If you hold on to You got stock in that company for longer than five years, when you sell it, the first 10 million or 10 times the basis are tax-free. So the first 10 million out of L2 was tax-free. Zero. That makes no sense. If that sounds like we're screwing the middle class, trust your instincts. I invested in a company, brought a company out of bankruptcy. I invested two and a half million. The first 25 million got very lucky, the company got sold for a lot of money. The first 25 million were tax-free. The tax code has gone from 400 pages to 4,000. That extra 3,600 pages are to turn rich people into super-rich people.

Now, the myth around taxes is the following, that rich people don't pay their taxes. Actually, the rich pay a disproportionate amount of taxes. If you make all of your money from current income, that is salary, and you make a lot, you're actually paying more taxes than anyone. Mom's a baller. She's a partner in a prestigious law firm making a million bucks a year. Dad's a chiropractor, has three people working for him. He makes $1.6 million a year. Total ballers. In order to make that money, they probably have to live in an urban center in a blue state, where at that level, they're paying 45, 48, sometimes 52 % tax rates. But if dad decides to raise capital and buy a bunch of chiropractic clinics and they become investments and he sells them for $50 million, his tax rate plummits. So you don't want to be a super earner. You want to earn enough money to invest so you can become a super owner. The top 25 wealthiest Americans pay about 8% in tax. Actually, the bottom half pay almost no tax. They You pay a lot of consumption taxes, but it's the super earners that get screwed, what I call the workhorses.

But once you jump to light speed and you own things and you make your money from buying and selling assets, your tax rate plummets.

The really actionable thing there for the average person as well is probably the first point where you said a lot of what rich people do is they'll buy a stock, so I'll spend 10K on Amazon stock, and then I go to a bank and the bank give me a $5,000 loan against my Amazon stock tax-free, and I just hold the Amazon stock, now I've got 5,000 tax-free. If the Amazon stock goes to $20,000 in value, then I can go to the bank and say, It's gone up now, give me another $5,000, and I just spend and live off that money. Now, if the Amazon stock collapses, I'm fine because the loan was against the stock, so they'll sell the stock at a certain point as it's collapsing to get their money back.

Yeah. I mean, you don't want to get into too much trouble, but leverage is how smart people go broke. But the idea is that one of the great tax schemes in history is that stocks grow. Think of yourself as a stock. You go up in value a million bucks a year. You're making a million dollars a year doing a very successful podcast. Every year, the government in the UK is going to take 40 cents of that, 40 % of it. If you own a million dollars in stock and it goes to two million, you don't get taxed on it until you sell it.

Yeah, so just never sell it.

Never sell it.

That's what Elon is doing with his companies. Never sell it. People say he's got $200 billion, whatever. In fact, he's borrowing tax-free against those companies.

Then when he finally needs to sell it to pay off some of those loans, he moves to Texas despite the fact he built all his wealth in California.

Smart. I think one of the great advantages of life As it relates to wealth creation, is really getting good tax advice because I've sat here over and over again with people that have great tax advice and some people who didn't have any at all. The outcomes are, quite frankly, shocking. The variants and outcomes are, quite frankly, shocking. From one person going bankrupt to the other person becoming a multibillionaire. And it comes down to... Some of it comes down to their tax strategy and how they thought about tax. Being around a lot of people now that are masters in tax, it was like... I describe it as someone pulled back a curtain that I never knew was there. All these people were doing magic behind this curtain, and no one ever told me that curtain existed. That's right. It's called tax. We don't all pay the same tax.

Because we're not supposed to talk about it. Again, not talking about it is rich people trying to keep poor people down. Because rich people talk about their taxes all the time. Brightest woman in my entire professional universe is a woman named Lucy Lee, who is my tax Yoda, who works at a big law firm that I pay $1,800 an hour to to figure out the smartest... When I set up a company, I talk to my tax person. When I'm about to get a big payment for my podcast distribution company, I talk to my tax person first. It is everything. But the key, when you're young, is to become an owner, not an earner. You're an earner. You want to bust a move out earning and develop an army of capital that goes out and kills for you at night. Five hundred bucks is a lot of money when you're 21. Five hundred bucks when you're 21 is 10,000 when you're my age, right? And it's going to go really fast. So just start Start. And then once you become a super owner, you have $10,000, $50,000, $100,000, $1 million dollars in assets, then you can become a super tax avoider.

That sounded awful, didn't it?

That sounded awful. That sounded awful. Sitting here with your bucket of sand.

Oh, my God. A bunch of.

That's right. Talk about, this is how we fuck the middle class, Steven. This is how we really screw over the little guy.

What is your capital allocation strategy? How do you invest your money? This is the thing people want to know most about you.

I keep it as painfully simple as I possibly can. So literally my entire networth is cash, a house, and index funds, and some shares of Markel while I'm on the board of directors. And that's it. There's nothing else. I can summarize everything so easily and so cleanly. And truly, that's it. It's not even like I have 20 bank accounts. I have one bank account, one brokerage account in a house, and that's it. It's so simple.

Why index funds? You're the reason I... Your capital allocation strategy is almost identical to mine. I want to talk about the house thing as well. But after reading your book, I stopped trying to pick stocks and I invested all of my available capital into index funds outside of investing it in starting companies. I'm a shareholder in, I don't know, 50, 60, 70 companies. All my other available capital is invested in index funds. Then I have a very long-standing large position in Ethereum, which I've held for six years or something, which has done me very well. That is it. The Ethereum investment is also based on the fact that I run a software business that is in blockchain, and I could see that developers are building on top of Ethereum more than any other blockchain. So that inside light was really beneficial to me.

And six years, so even with the big fall of the last two years, you're still up a lot.

Yeah. I think your book taught me that successful investing is when you lose the password to your investment account. Yes, that's exactly it. I don't actually think you said that in there, but that's like, when I lose the password to my investment account, I'm so proud of myself because it means I haven't checked it in forever. It was funny because you were coming today. I thought, Oh, yeah, I have all this money in these index funds. I'll check it. I thought, Fuck, I don't know the password.

Good. That's why you're going to do okay. The reason I do this, what's important is that I am not one of the people who says nobody can beat the market, so therefore use index funds. That's not what I believe. I think it's extremely hard to beat the market, and very few people will do it. But I think there are really smart people who can do it and people who I know who I could invest with. The reason I don't is not because I don't believe it can be done. It's because the variable that I want to maximize for in my investments is endurance. If I can just earn average returns for an above average period of time, it's going to lead to amount of success that will literally put you in the top 5% of investors. My parents are a great example of this. My parents are smart people, but they have no financial background. They have minimal financial interest interest, I would say. But they have dollar cost average in the index funds for going on 40 years now. And literally, if you look at the returns, they've never sold anything ever. And literally, if you look at the returns, they'd probably be in the top 3% of professional investors.

For anyone that doesn't know, what is dollar cost averaging and what is an index fund?

Dollar cost averaging means you buy the same dollar amount of investments every single month, come hell or high water. It doesn't matter what the stock market's doing, recession, boom, bust, you say, I'm going to put $100 or whatever it is in the stock on the first of every month. Now, most people who have a 401k at work are doing this whether they know it or not. They have $100 or whatever removed from every paycheck, and it goes into the funds that they own, and they don't have to do anything. Whether you know it or not, you're actually doing it. The contrast to that would say, I'm going to buy and sell based off of how I feel in the stock market. I wake up, I watch CNBC, I decided to sell, and I'm going to put it back in when I feel better about the market. It's the contrast of that. An index fund is just a single fund that owns hundreds or thousands of stocks within. In it. And if it's diverse enough, if it's big enough, really what you're doing is you're owning a slice of the global economy, which is how I think about it.

It's thousands of individual stocks in there, Tesla, Apple, whatever it be. But really what you're doing is you're owning a slice of capitalism.

If I was your son and I said, dad, prove to me that that's a better long term wealth creation strategy than buying crypto or buying companies that I use or like, how would you explain that to your kid?

Your ability to do well over the next one year or five is going to have no role whatsoever on your lifetime ability to generate wealth. All that's going to matter is not what are the best returns you can earn. All that matters is what are the returns that you can sustain for the longest period of time. All that matters is your endurance. It doesn't matter if you When you're going to double your money this year or even double your money again the next year. All that matters is, can you stick and keep it going for 50 years? That's where compounding comes from. Prove it. Because the formula for compounding is returns to the power of time. That's not quite it, but more or less, that's it. In that equation, if you understand the math, all of the heavy lifting comes from the exponent.

Give me a case study where someone has followed that strategy and done well.

Okay, here's one way to explain it that I use in the book. 99% of Warren Buffet's networth was accumulated after his 60th birthday. After he turned 60 years old, 99% of his wealth has been accumulated after that period. Because the longer you hold that for, the crazier the numbers get. When he was 60, I think he was worth about $3 billion. A lot of money, he's a multibillionaire. But now that he's 90, he's worth over $100 billion, and he's given $100 billion away to charity. So if he didn't do that, he'd go from $3 billion to $200 billion since he's been 60. Because the numbers just get crazier at that point. He's worth $100 billion. So if If his market, if his networth goes up 10 % in one year, he makes $10 billion, which is three times that he was worth when he was 60. So when you look at somebody like Buffett, is he a great investor? Is he a great stock picker? Of course. But the real secret to his success is is that he's been a good investor for 80 years. If he had retired at age 60 or at age 50, nobody would have ever heard of him.

He would have been like one of the other multibillionaires who lives in Florida and plays golf, and you've never heard of him. The reason he used a household name is because he's been doing this nonstop since he's been 11 years old, and he's never stopped. It's just the endurance that's made him so wealthy, not necessarily the annual returns. Patience.

It's a difficult thing. It also reminds me of the story that you talk about in the introduction of your book about the Janitor Ronald James Reid.

Yeah.

Who, when he died in 2014, aged 92, had a networth of over eight million.

And he was a janitor.

How did he do that?

He took what very little money he could save from his job as a janitor mopping floors at the gas station. He put it in stocks and he left it alone for 70 years. And that's it. That's all you need. That's all you need to do. If you have endurance in your investing and you can keep it going for years or decades, you don't need to be genius stock picker. And now you do not need to do it. If you have endurance, you're going to be literally 97 or 99 % of the genius stock pickers. And what's so interesting about it is picking the right stocks is hard. It's supposed to be hard. There's no world in which everybody who tries to beat the market is going to do it. Of course, it's hard. Just being an NBA player is hard. But having endurance is largely in your control. It's so much easier to just be patient than it is to pick the right stocks every single day. And I think some people nature nurture, some people, like probably Ronald Reid and my parents, just understand it naturally. It's not hard for them to be patient.

But there are professional investors who work 80 hours a week for 30 years to try to beat the market, and they can't do it. Not only some, that explains most of them. And even the ones who can do it are maybe going to beat the market by half a % per year, one % per year. But if you can have endurance, that's a bigger benefit than you can have by even being a very successful stock picker. Somebody Somebody who outperforms the market by one percentage point per year, and they can do that for 10 years, that's amazing. That's like Mount Rushmore investor. But somebody who earns average returns and does it for 20 years is going to have way more money. You do it for 30 years, you're going to be filthy rich. You'd be like Ronald Reid, you can be a janitor who leaves $8 million to charity when you die.

Is buying a house a good or bad financial decision? My brother, who works in my company, he's the one that introduced me to your book many years ago, said to me something along the lines of of, Steve, don't buy houses to make money because you have the ability to play a different set of games that very few people can play. What I mean by that is he explained it to me. He goes, Listen, everyone can buy a house, so the returns there aren't going to be huge. Go find a game that only you can play, you'll get bigger returns.

If you're buying a house because you think it's going to be a good financial investment, stop. Even if it turns out in hindsight that it was, it doesn't matter. I think these are just purely lifestyle decisions. And I think so many people get screwed up when they're in a spot in their life where they should be renting because they need to be mobile. They need to move around to a new job, new career, new school, whatever it is. But they end up buying because they think they're going to make money doing it. And that's the problem. So I own a house, and if I ended up losing money on it. I don't think I'd care. That's not why I'm owning it. I'm owning it just because I want the stability for my family.

People buy houses because they think they're making loads of money from doing it.

Because there have been periods in time in which people have made loads of money. Historically, that's the anomaly. Historically, in the US and the In the UK, housing prices adjusted for inflation go nowhere. It's just been the last 20 or 30 years that there's this very brief window of time that owning a house was a great investment. Robert Schiller won the Nobel Prize about a decade ago for his work in showing that over the last 150 years in the United States, adjusted for inflation, most home prices have been flat as a pancake. It's just the last 20 years that have inflated people's expectations of what a house can do.

Statistically, there's going to be at least one person listening to that has made an offer as we speak for a house under the assumption that it's going to help them stack wealth. If they were purely doing it for those reasons, what would you tell them to do instead?

If that's purely the reason, run for your life. Don't do it. Particularly, I mean, it used to be, and maybe it still is like this in many cities in America and the UK, but it used to be that rentals were, almost without exception, shitty houses. There were no good rentals. A big change, at least in America in the last 20 years, is that most big cities have tons and tons of luxury apartments to live in, and there are great places to live, and they're in the city centers, and they got beautiful granite countertops, and they're great places to live. Don't fall for the idea that you can't live well if you're renting. I think that's the problem. And realize that if you're doing it for financial reasons, you're probably about to borrow a shitload of money for an investment that historically has been a very bad investment. If If you put it in those terms, what are we doing here, man? You're going to borrow hundreds of thousands of dollars for an investment that historically has been a loss? That's what you're doing here? You feel good about that? That's what I'd say to that person.

Godspeed.

I would love to be in the room somewhere where that person has just looked at their partner after persuading them to make that offer because it was going to make them rich.

Sorry, guys.

To make sure I and everyone listening understands what the blockchain is. It's this public, can think of it as this database in the sky. The database in the sky is checked by everybody who has their computer on and is interacting with the database in the sky. You no longer need a government or a bank checking the transactions and the contracts in the database in the sky, because now all of our computers that are on interacting with it are in the background checking that if I send you one Bitcoin, if I do something on this database in the sky, it is in accordance with the history of the database, and it is in line with that database.

Yeah. To make it less complicated, it just makes it a source of truth. In a world where we don't even know who is who online, who owes each other what, any of these things, we now have a source of truth that everybody can agree on.

Everyone can see.

And everybody can see.

You don't need to trust anybody.

That as a technology solves many things, problems that we don't even know we've got because they're so part of how we exist. The technology is not about money. The technology is about truth and exchanging value and creating value in a digital age. Now, Now, what is interesting and powerful about this technology is we've seen technologies similar before, the Internet. We've seen broadband. We've seen these big global infrastructure things Most of those, the Internet was a public service good. Broadband was all built private sector. We didn't get to make money out of these things, really. Amazon made the money or whoever it was building the broadband. They all went bust as well. What we've got here is this very clever thing that everybody in this blockchain gets rewarded for the role that they play.

In maintaining the blockchain?

In maintaining the blockchain. And because these things are scarce, and let's say Bitcoin being the most classic example, there's only 21 million that will ever exist. You've created this scarce asset that is a reward system. The people who mine the Bitcoin, they use the electricity to solve the algorithm to get the bitcoins to make sure there's only 21 million, well, they get rewarded. The people who verify the chain get rewarded. And then we can buy the asset, which is actually us investing in the future use cases of this thing. Are people going to use it for storing wealth or building stuff? Now you get this global infrastructure layer of which people can invest. Now, let's go back to the example of AI. Ai, 99% of people listening to this will not be able to invest in it apart from buying some of those big public companies because they're not accredited investors, they're not allowed, they don't get to see it, they're an insider, all of this stuff. This is the inverse. It is fractionalisable. A Bitcoin, you don't have to buy one at 60, whatever thousands it is today, you can buy a fraction. Remember we talked about property and the guys who own the big high-end property make all the money.

None of us can buy the $50 million apartment in Manhattan and then do it up and flip it for $250 million. Now, blockchain, we can all put 10% of our paycheck in it.

Do you think people should?

Yeah, and more. But the point being is this is the only globally homogenous asset on Earth. It's the same in Nigeria as it is in Brazil, as it is in London, as it is in Silicon Valley, as it is in India, as it is in Papua New Guinea. Everybody is on an equal footing. You can put the same percentage of your worth in Okay, that is mind-blowing. And it bypasses the banking system, the brokerage system, and all the other incumbent things that get in the way of a Nigerian buying an international investment. We've got a playing field that's leveled in the fastest-growing technology of all time, in the fastest of pre-training asset in price terms of all time, in the shortest period of time, that is globally available to anybody. Then you just realize, holy shit, okay, this is important. Now, why that's important is because having more investors in it means the asset becomes more valuable, which means you're more likely to secure it. People want to join the network to earn some of these tokens to secure it. The more use cases get built upon it because people are making money, and it bootstraps it.

It's behavioral economics. It's an incentive-based system to bootstrap the most ridiculous startup idea of all time, which is I'm going to entirely disrupt money and create a new internet. I mean, that's laughably stupid, and that's what's happening.

I run a company called Third Web, which is a Web3 infrastructure business. We've raised quite a lot of money for the company, about $30 million now, and we have a big team. It's interesting for me to observe the use cases because people come to Third Web to build on the blockchain. One of the really interesting use places we've seen over the last, I'd say 12 months that's really exploded is gaming, people building Web3 blockchain-based games. Because if you think about games like FIFA, which is a huge game, obviously, in the UK, where we're big soccer fans, or other games like RuneScape back in the day, where you have assets in the game. In FIFA, you have a messy card. In RuneScape, you might have a sword. The thing that the blockchain now enables us to do is to take those assets on the game and actually trade them outside the game. If the sword was on the Ethereum blockchain, even though I'm not inside the game, I can trade that sword on the Ethereum blockchain. One of the most exceptional use cases we've seen at Third Web is people building AI games. Sorry, people building Web3 games because these assets are now valuable.

It's great for the game developer. They've now got this brand new economy for their company, and it's great for the people that own those assets in the game because those assets are now more valuable because more people can access them. And if I own Ethereum, if I own an Ethereum token, which I do, by the way, I've been stacking it and refusing to sell. But how do I benefit from the fact that games are now being built on Ethereum? It's really simple.

If we'd have all been given shares on Facebook when it started, we'd have all been hilariously rich, but we didn't. The VCs got it, and then it went to the public market, and then you have to have a brokerage account, you have to be approved. What this is happening, you buy an Ethereum token today. If Ethereum ends up becoming bigger and more uses, your token value goes up. It's as simple as that. You get to participate in an entire technological revolution really simply from your mobile phone, and you don't need anybody to approve it or do anything. Yes, there's regulation stuff, but simple stuff like that, it's pretty straightforward for almost everybody in the world. Therefore, we talked about how do you invest in your disruption and the future of technology. Okay, here's one where you can really do it, and it's easy to do.

A couple of questions here then. You said it's easy to do. Let's talk practicalities. How does one do it? I can do it on my phone. I have to call someone. How do I invest in crypto?

You just open a crypto account with one of the big crypto providers, Coinbase, cracking, Crypto. Com, who are in the Gemini.

What about this, though? My digital bank is offering me to buy crypto on there. Should I do that?

Yes, you can. You could do it via PayPal. Start somewhere. I'm not going to I know. But you will go down the journey that everybody goes down, which is the easiest on ramp is the best. Revolut, whatever. I don't care. Just do it. Get a feel for what it's like to own an asset that goes up and down a lot. Particularly down, when it goes down, it makes you feel terrible, and you got to learn about how to deal with it. Then because it goes up over time, if you don't do anything and you've chosen a good quality asset that's provable as an asset in itself, it'll probably go up over time. In fact, highly likely to go up a lot. Then you'll start thinking, Do you remember Raul saying that the bank owns the stuff and I don't own it? Then you might say, Oh, but the The magic here is unlike the bank where I can't take more than 10 grand out, I can put it all on my little ledger device because...

What's a ledger device?

A ledger device is... It's a company that provides it. But what it is, Because this is just an address on a blockchain, and think of it as like your mailbox. You can send stuff to it, but you can't actually take it out. Like your email Somebody can't read all your emails, but they can send you emails. Well, that part that's private, that secure pass key, essentially, you keep that to yourself and it's stored on a device. There's a complicated way of doing it, and you'll have to go through that, which is you have to have this seed phrase that does it. This technology will change quite soon. Fingerprints, faceprints, and a bunch of other stuff. But basically, a little USB USB stick will secure that you can go and put it in a safe or go and take it to your nan's house or whatever it is can secure your money that it's only yours and nobody can take it out.

I have mine on a ledger, so I have my Ethereum on a small... It's like a small USB stick, and then that USB stick is protected by 24 words or whatever it is. That's right. And those words are on pieces of paper in different countries at the moment. That's right. It means that no matter what happens, no matter where I am in the world, no matter who comes for me, I can always retrieve the X thousand Ethereum that I have on this ledger device. Unlike a bank where my account could get frozen by the government, or they could empty my bank, they could freeze my bank. I will always have that value.

Also, there's a famous example of the conversation of gold in the United States, and it's been done in many countries in the past. The good thing about this magic internet money is you have to physically cross borders with it. Yes. Think of all the Jewish people who had to take money and diamonds and gold out of Nazi Germany and out of Europe. It was hard to do. Here, you have to do anything. You just need to remember a seed phrase.

A seed phrase being basically a string of words. Yeah. Do you know for people that are in that paycheck-to-paycheck cycle, which I was in for many, many years of in my life where I'd get paid for my call center, I'd go and spend the money. I'd pretty much spend all the money within the first couple of days of getting the paycheck, and I was just waiting the next three weeks for the next paycheck. What advice would you give them about getting out of that cycle? Because you almost feel imprisoned by that cycle if you're in it. Absolutely.

Well, before I give the advice, I want to explain to that person what's happening because you are the prime customer for our economic system. Banks love you because they can sell They can sell you payday loans, they can sell you credit cards, they can sell you lines of credit, and they can keep you in debt for the rest of your life, which means you keep making the bank rich. Corporations love you because you're not going to think twice when we show you this nice bag, when we show you this nice vacation. You're going to want the stuff, and so we love selling you the stuff. The government loves you because you are going to pay the highest taxes. Employees pay the highest taxes. When you're in that situation, you are making everybody else rich at your expense. If you want to break out of this, the first thing is you got to understand, you need to make yourself rich before you make everybody else rich. Because when you're spending all your money, you are putting your money into their pockets, and you have to stop that. You got to keep that money for yourself. You're in a boat.

Think of it this way. You're in a boat, and this boat has water just flowing in, and you are sinking. You got to start by sealing the holes. That means you got to stop the spending. If you are in what I call the financial danger zone, which is you don't have $2,000 saved up for an emergency and you have credit card debt. If you are in that situation, you are in the financial danger in your zone, and you have to make drastic changes. That means right now, no more eating at restaurants, no more vacations, no more doing anything that doesn't put money in your pocket, and no more Netflix. No. The reason why I say this isn't It's because you're going to save $15 a month. It's so you can save 2 hours of your time a day. The average American is watching more than 2 hours of television a day. If you don't have $2,000 saved up, if you have credit card debt, you cannot afford those 2 hours a day being wasted on TV. That means right now, you have to go out and start using the time to learn, start using the time to work, and start using the time to make some extra dollars.

What What do you do? Start selling stuff. Stop spending money.Selling stuff you own.Selling stuff you own. If you have a TV that you're not using, sell it. You have a car that you can't afford, sell it. If you're living in a house that you can't afford, sell it. Downgrade move smaller, and then work to earn more money.

I've got to say, the couple of things that I came to mind as you were saying that, and funnily enough, I put myself in the shoes of 18-year-old Stephen Bartlet when I was in that small apartment with three or four immigrants in Moss Side, Rush Home. My rent was nothing. My rent was £150 a month, which I could not afford and I could not pay. I was intimately working between course to jobs. And whatever money I got, I spent. Part of the reason I spent it, just pre, is because like many people watching, especially men who sometimes feel the need because of the way society is, I was trying to get laid at the at the same time. It's hard when you're a young man, and I say young men in particular because the stats do support the fact that there is an expectation that men pay. When you're a young man, it's particularly difficult to do all of these things to cut back and also get laid. What am I going to do? Defer getting laid for 10 years? When I say laid, I'm really saying meeting someone and falling in love and having a life.

If I'm living in a shoe box, which I was, I can't bring anyone back there. I can't take anyone for dinner. I can't take anyone to the movies. So what do I do?

This This is why every Indian parents tell their kids to become a doctor so their son can get married. It's the same concept. But here's the thing. You have to pick it hard. Either life is going to be hard now or it's going to be hard for the rest of your life. You have to pick what's more important to you right now. If we talk about balance, if you want to have a balance of everything where you want to find a girl and you want to make money and you want to stay healthy, you are dividing your attention everywhere. I'm not saying it's impossible, but very few people can actually do everything all at once. If your number one goal is to become wealthy, if your number one goal is to turn your finances around, you have to get serious about it because where you put your attention is where you get the results. If you want to be in a better financial situation, you are going to have to make sacrifices. It's difficult. I can't come here and tell you it's going to be easy because that's going to be me lying to you.

I got to be honest, I did make a sacrifice. For me, the sacrifice was I started a business, and frankly, that meant that I didn't have time to be going out, getting laid, or meeting people, or socializing. But my story arc ends with it going well, and then the romantic situation taking care of itself many years later once it had gone well, because I was so focused on myself. It's funny, there is a bit of a paradox to life that the more you actually focus inward, the more you become a magnet. The more I focused outward, the I pursued and chased and neglected myself, the harder it was to get people interested in me.

Yeah. I also want to say that when I talk about building wealth, I'm not talking about becoming a money hungry, just money greedy, this is an evil person that just cares about money. That's not what I'm talking about, because I want you to live a holistic life because money is just one part of your life. But the second part of that is I'm not telling you to never enjoy life. I'm telling you to make a sacrifice for a period of your life. That way you can enjoy the rest of your life and never have to worry about money again.

It's hard for us to naturally see life as seasons, especially when we're looking forward. When we're looking back, it's very easy to say, Oh, that was that season. I can sit here now and say, Oh, that 20 to 25 was that sacrifice everything in my life to make myself something season. Then 25 to 30 was building and learning. And then I now can think of... It's easier actually now to think forward in seasons now that I've been through some seasons. But for someone that hasn't been through seasons Seasons in life, it's hard to think about life in those terms. I now think of my life in these five-year seasons, and that helps me to say to even have conversations with my partner where I go, This is the season I'm in, and it will last probably, roughly this long, and I'm going to sacrifice these things and prioritize these things in this season. But it's hard for people to understand this idea.

It's difficult, and that sacrifice is difficult, especially during a time where everybody's showing off everything on Instagram. You look at your friends who have a crappy job, but they're driving around in nicer cars, going on better vacations, going to the nicer restaurants, and you're thinking, What did I do wrong? Then especially if you're a guy, you have a girlfriend, you have a wife, she's going to say, How come they keep getting to go to Cancun? They keep going to these nice restaurants. How come you can't take me to these nice places? Now you feel like you're doing something wrong because where is this discrepancy? The reason why I call my show The Minority Mindset is because I'm a big advocate of not doing what the majority people do. The first time I made a million dollars in a year, I was in my 20s. I was driving a car worth $500. It didn't have a bumper on it. It was not pretty. My wife sat in that car with me, and my employees drove better cars than I did. You You got to be confident, and you got to work for something bigger, and you want a partner that's going to understand that.

That's my belief, which is not the easy thing.

It's interesting because confidence is such an internal thing, and I just feel like I just probably just didn't have it then because I think I was scared for someone to know that I was broke. I was so scared for someone to know that I was broke that I just didn't entertain romantic relationships.

That is the reason why so many people will go into debt to buy vacations, to buy things, to buy stuff, to look rich. Ironically, that's the thing that keeps so many people poor for the rest of their life is because they're scared to look broke. Now, when you try to look rich, that's the thing that's actually keeping you broke.

There's another element to this, which is my life was pretty miserable. When you have a relatively miserable life when you don't have many nice things because you're working in a call center as I was until 11:00 at night time, doing overtime, every overtime hour I could get. Then because you're also lonely, you're going home alone, walking home because you can't afford the bus. Anything that gives you a little dopamine hit, gambling. This is why all the gambling shops are in the areas that struggle the worst financially, because a lot of people say, because those people are looking for that big payday, that dopamine hit from a payday. My TV in my tiny, tiny little bedside room was like half the size of the wall. I was making reckless spending decisions because I think it gave me some hit that I was missing in my life. It gave me like a dopamine rush. And there wasn't many things giving me a dopamine hit at that point in my life.

And see, here's the thing. During that time, you are making emotional decisions, as many people are. And it's very difficult to speak logic to emotion. But this is where now you have to be able to understand the difference. Because if you're listening to this and you're in that situation, you have to understand, if you want to continue being able to live that lifestyle, you're going to have to make some changes today. Otherwise, you're going to be stuck in this lifestyle for the rest of your life. And it's only going to get more difficult. And that's the thing is if you want to become wealthy, the first part is just your own mindset. It's your own discipline. And until you can conquer that, I can tell you everything about investing. I could tell you different ETFs and index funds to invest in. I can tell you different investment institutions out there. I can tell you which stock brokerage is to use. I can tell you just invest 15% of your income into this for the next 10, 20, 30 years, and you're going to become wealthy. But until you can get over that mindset, you're never going to become wealthy.

Because then what happens in that situation is when you're in that state of, I just want to look rich. I just want to have the dopamine. I just want to have some nice things because I deserve it. I'll work hard. You know what happens next? You are the one that gets caught up in all the get-rich quick schemes. Because someone's going to say, Look, put $1,000 into this, you'll have $10,000 in the next three months. Or I'm going to show you you can live the laptop lifestyle. You can work five hours a week, make $10,000 a month, $10,000 a week. You're never going to have to worry about money again. Just buy this program. Now you're a prime candidate because now you are driven by this emotion of, I want that. I can't imagine if I had an extra $10,000 a month, and I don't even have to work for it because you can't see past it. All you're doing is being sold by emotion. And so you're the one that's going to get caught up in the get-rich-quick schemes. You're the one that's going to make the bank rich because you're going to stay stuck in debt.

Corporations are going to love you because they can keep selling you the nicest, the newest stuff because you want to look rich, you want to show it off to your friends, you want to show it off to the girls. And you get stuck in that cycle.

Isn't this cool? Every single conversation I have here on the Diary of a CEO, at the very end of it, you'll know, I asked the guest to leave a question in the Diary of a CEO. And what we've done is we've turned every single question written in the Diary of a CEO into these conversation cards that you can play at home. You've got every guest we've ever had, their question, and on the back of it, if you scan that QR code, you get to watch the person who who answered that question. We're finally revealing all of the questions and the people that answered the question. The brand new version 2 updated conversation cards are out right now at theconversationcards. Com. They sold out twice instantaneously. So if you are interested in getting hold of some limited edition conversation cards, I really, really recommend acting quickly.