#746 - Morgan Housel - 12 Unexpected Laws Of Human Psychology
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Hello, friends, welcome back to the show. My yesterday is Morgan housel. He's a partner of the collaboration fund, an investor and an author.

The world continues to change, but the helicopter es that inhabited stays the same. So there must be some laws of human psychology which remain true no matter what time and place your in. And today we get to go through some of the most fascinating ones.

Expect to learn what reasonable optimism looks like, the difference between overnight tragedies and long term miracles, what we can learn by the divorce of the richest men on the planet, how people become victims of perfection, why most competitive eventually die, and much more. Morgan is one of my favorite authors, is one of the best writers on the entire internet, and both of his books are fantastic, and you should go by them. And this episode is great, and I love him very much, so I hope that you enjoy IT. Also, don't forget that this monday, a brand new three hour long episode goes live with eric kindness in, and you don't want to miss you, so navigate to spotify, a rapper podcasts, and press the subscribe button. I thank you.

This episode is brought here by edlin edley. An makes the team collaboration software that powers enterprise businesses around the world, including over eighty percent of the 15 hundred。 With A, A, I, I, A, you'll have more time to do the work that matters. In fact, at less in customers experience, at twenty five percent reduction in project duration per year, at least the potential of your team at in dot com.

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asking where ebay has no more, just beautiful. Whatever you love, find IT on ebay. Ebay things people love.

But now, ladies and gentleman, please welcome Morgan housel.

Who are the rational optimist?

I came up with the term rational optimist. I know if I did, but I don't know if I came to the theory. But my idea was, if you think the future is just gonna be great.

That's not optimism. That's complacency. My definition of rational optimism was you you think the future is going to be Better than IT is today, but the path between now and then is gonna a disaster?

Give me a constant field of landmines and setbacks and recessions and bear markets and pandemics and wars and terrorist attacks that you have to endure financially, psychologically, career wise in order to get the reward of optimism on the other end. So it's like getting optimism and pessimism to coexist. That I think is realistic optimism.

Yeah, it's like the looking at Price goes from here to hear, but IT doesn't go like that Price goes from here to hear by going course.

You see in the stock market where no over a ten or twenty year period, you can make a crazy of money. But in any given month, in any given a week, in any given year, even any given decade is a disaster. And that's the Price you have to pay in order to get the to return over ten or twenty years.

So we went through some of your book, same as ever. One of my favorite things everyone needs to go on by IT now is super easy read, very, very enjoyable. Next lesson I want to go through is when the magic happens, stress, focus your attention in ways that good times can't.

There are so many examples in history of the world going through a crazy tragedy, wars, pandemics, awful things happen. Millions of people die. And then you look back twenty years later, and you realize that because of that incident, because of that war, because of that pandemic, there was this crazy amount of innovation and technology that took place because people were panic and the incentives innovate.

We're off the charts and you look back and you look, look as terrible as that was. We created because of that, all these inventions that everyone benefits from today, the most technological, innovative period, and I would say human history, took place in the one thousand nine and thirties and the one thousand forties, the great depression and world war two. IT started with a great oppression, which was, in analytic terms, the most is like that.

The amount of productivity the increased in one thousand nine hundred and thirties is more than any other decade that's taking place because he was all, by necessity, every single business in amErica in one thousand thirties woke up and they were like, if we don't become more productive today, we're out of business tomorrow. So every business learn how to become more efficient. And what came from that was the supermarket lager man, all these new businesses that were just designed to become more efficient.

The um the factory line really exploded during this period. What Henry ford did with the factory line uh in the one thousand nine hundred and tens and nineteen, every business took up in one thousand nine and thirties of necessity. What were two comes long.

And the incentive that happened because of that, we're just completely off the charts during good times, boom times. People's intent of innovate is if I create a new product, I might become rich that your incentives and that's a good incentive, you'll get people moving in that world. In the one thousand nine hundred and forty days, IT was, if we don't innovate and figure out new technologies, eight of hit was going to control the entire planet.

That was literally what was going on back then. So the scientist community, the government businesses, overnight, they were like, all hands on deck. We need to innovate like there's no tomorrow.

And what came out of that in a very short period of time? I mean, I i've suit up like this. Will were two began in one thousand thirty nine on horseback. IT ended in one thousand nine hundred and forty five with nuclear vision. And what took place in those six years, what we get out of IT, nuclear energy jets, rockets, pensione, like all of these things that benefit the world in massive ways today.

And IT specifically happened because people who are planning, you can also imagine a world is too early, in which twenty years from now we look back at covet and say, like, look, because of what happened in twenty, there was probably thirty years worth of worth of vaccine. M R. A research and understanding that I compressed, like, six months.

And you could imagine a world is so consistent with history where we look back and we like, look, COVID was terrible and shut the world down in millions people died. But look, what we got elevate because of this happened, you could even say something about work from home and like just like the change in culture that sped up during that period. So it's kind of this idea, it's too much to say, a silver lining of world war two.

You don't want to go that far. It's a terrible thing, but it's a thing of like be careful what you wish for like society improves when the world is on fire, not when everyone's is happy and their bEllies are full and everyone game for the employed. That's when the magic happens.

What what are the regular elements of when the magic happens? Is IT a being time bound? Is that people just being panicked? Is there some sort of the threats? Like what what are the motivators?

I think it's the power of incentives, and mainly it's the downside incentives. When the economy is strong, you have positive incentive. If I innovate, I might get rich.

If I don't innovate, i'll still probably be fine when you have the great depression or a war. Its downside and sense it's if we don't innovate, we're all gonna out a business. We're all gonna die.

We're all going to be taken over that downside and set them is what people IT gets people to be like, oh, IT. We need to go. Now, this is not a nice to have. This is a survival we need to go.

And so, for example, in the one thousand forties, during robot to the scientific community was like, literally dig through file cabinet ts of, like, what are some like scientific papers? Like, what do we discover thirty years ago? What's the thing about splitting Adams? Like, let's try to do this one right now.

And IT is went full bar, and you see what humans are capable of during a period like that. Now there's a limit to IT. If if you are too stressed, under too much pressure, IT all breaks down.

So not a lot of huge scientific innovations. The nineties came out of europe with some exceptions, but that was too much trauma, too much tragedy. The united states was like, we were panic, but there was not physical destruction of our factory. So, like.

we could keep that going. What are the costs that people pay for this? There has to be a reason why we're not moving at that pace all the time despite the fact that IT seems to give great returns. So there has to be some sort of downside, which is this incentivising people from doing IT when we're not facing a war or a pandemic or a great depression.

I don't know if there is a financial cost you could put to IT, but I think IT is that the opposite of stress induced innovation is when the economy is really strong, like right now. And in relative terms, everyone becomes fat and happy and they don't have they don't wake up every morning a little bit panic. I mean, I think most people will see this in their individual lives were during a recession.

Even if you have a job, you're like, this is kind of hanging by a thread here. I I got ta really show up early, be the first one for the office and work really hard in a way that you don't tend to see that when everything is going well. So it's less about like what if I think the cost uh, during good times is just like the cost of of things going well, which is just like a lack of a urgency to get moving.

Mean, the extreme example. This would be the trust funder who has like no downside. If they wake up and don't innovate, don't find this out, they find nothing, nothing about going happen to them. And you see this, and like companies that are big and rich and successful, they kind of atrophy over time. And you compare that to the scrappy start up in day.

I had macin morphy, whose a behavioral ecologist halfway between behaviour, economics and evolutionary psychology, SAT in that seat. He was telling me that as the economy gets worse, the average BMI of women in playboy and santa d. Max goes up.

And as the economy gets Better, the BMI goes down. So there is a relationship between male preference for female body size and resort scarcity. If during periods of highly gas resources where the future is very uncertain, you see a woman that is able to hold on to her body fat.

You think, wow, I mean, what an amazing hunt together. He would be phenomenal. Be with me. This would be great. And they've done this in phenomenal study, in canteen holes of universities. And they would show guys images of women before they had dinner, and then in different iterations, after they had dinner. And when they were hungry, before they had dinner, they picked girls who were bigger.

I mean, this is a very well known that, like in in way earlier times, hundreds years ago, thousands years ago, that women who are a little bit happier were the more attractive ones they were, the healthier ones they were them, and the skinny people were the ones who are like maybe facing famine. And then so it's it's a pretty recent phone enon of like a preference for a thinner women over time.

That's a new thing. One of my favorite quotes from when the magic happens is the same people with the same intelligence have widely different potential under different circumstances. Yes, this ability to sort of unlock that, that was already there yeah because of the external pressure we were talking last night about um good， hot, slow.

Um when a mature becomes an upcoming season to be a good measure. But a similar one is parkinson's law, right? Work will expand to fill the time given for us. And this is kind of like all of these things just coming down on top. yes.

The same time mean those stories during world war two, when F, D, R would be like, we need to start producing twenty thousand planes. Prior, I think, was the number. And everyone in the room was like, mr.

President, the absolute maximum we can produce is five thousand per year. And he was like, twenty thousand years. Go do IT.

And they fired out a way to do IT they if they're like, it's so clear shade that if there's a will, there's a way. But you see what people are capable of during those periods. And I think that should have been true for my life. And sure, it's true for your life during different periods of things are going well, or like I got some big rise in my life right now, what you are actually capable of doing like changes dramatically.

The a biography, the ix and biography of mosque, I think, can be summarized as make insane demand with ridiculously short timeline and continue to push people until that happens yeah and deliver A A little bit but only by your own inside metric. And what that result in is you over delivering buying A A ridiculous margin yeah .

another stories of us building particular at space ex, where someone to come to you may be like, he, this part costs three thousand dollars. And ilona be like, that part of cost twenty dollars. You need to go build IT.

And like, no twenty dollars go build IT. Just just I, F, D, R. And they eventually figure IT out like they eventually do IT and IT makes you realize, like, how much in life is an artificial constraint of laziness. And like, maybe that's the wrong word, but like A A good enough ism that if that is taken away, you realized you are capable of literally multiple .

times what you think you are, overnight tragedies and long term miracles. Good news comes from compounding, which always takes time. But bad news comes from a loss. And confidence are a catastrophic error that can occur in the blink of an eye.

So think about the really bad things that have happened in modern times, poor harbor, september eleven COVID. They literally happened in an instant, particularly poor harbor. And nine, eleven IT was like, one hour, everything was fine, and the next hour the world going to help.

And there is no equivalent of that with good news. What is the good news equivalent of pro harbor in which at nine A M, everything okay and ten A M everything is amazing? There's no equivalent. On the other end, good news tends to take a lot of time. IT tends to play out slowly over the decades.

So one of the best pieces of news to happen in our, in our modern times is the massive decline in heart disease mortality decline, like more than seventy percent since one thousand hundred and fifties. IT has saved millions of lives because we're Better controlling blood pressure IT back in the thousand nine hundred and fifties, if you had a hard attack, your dead. Where's now? If if you make IT to the E.

R. On time, there's a good chance you onna. Pull through. They are going to get you out. Made massive strides. But we tend to ignore that because what happened is over the last seventy thousand and eighty years, heart disease mortality improved like two percent per year. And in any given year, you're never gone to hear about that.

There's never going to be breaking news on the new york times like heart disease mortality improves by seventy basis points. You'll never hear about that. But the bad news that happens quick, you can't look away from in.

And so I think IT leaves people more pessimistic than they should be because they're constantly bombarded by the bad news that happened very quickly and you can't ignore. And the good news that is a slow compounding over fifty years is so easy to ignore, even if, over time, that good news is so much more powerful. I like improving lives than the bad news that happens quickly.

overnight tragedies and long term miracles. Such a lovely, beautiful framing. Do you know the difference in climate related deaths of the last hundred years decreased by fifty times? Used to be called in ninety eight percent decline? I know this is through climate mastery. So this is people that live in hot play being able to cool themselves down. People that live in cold place being able to warm themselves up, ninety eight percent reduction in the last century of people dying from climate.

right, makes perfect sense.

And say, and yet, here, look at all of the people that are dying from climate, not to say the climate changes something that we need to dress right, but it's so it's this overnight t tragedies and long m america, exact in a single incident that are Carrying at the same time yeah, and you like hanging the second. How can the climate related mastery reduction in deaths be fifty times Better, like ninety eight percent reduction? but. It's also the worst thing in the world and it's killing everybody in poor counties I have.

So you don't hear about IT. Now there is some bad news that plays out slowly over time if you smoke cigarettes, that's that's like a slow compounding. And eventually the bad news might hit you in a year when you die of a lung cancer after thirty years, doing damage at a slow rate.

maybe. So would climate change moving forward as x and alive? That might be an interesting one at all of this energy we've got like we've fixed and it's like, yeah but there's this like weird just number that keeps taking up the fuck can see our two ppi yeah and a sea level and a couple and you know it's to whatever, but that's the sort of thing that given enough time would be a long term tragedy. yes. So there are lot of .

those things were by the time you do notice IT, you're like, OK, that is a big deal. now. Now I can see that I get IT.

Now why does bad news stick out so much? Is just because it's more sail to us.

I think I mean, is always true from evolutionary perspective that bad news is going to capture your attention. Threats are gone to capture your attention more than opportunities because in in order to get the opportunity, I to first survive the thread. So that's it's always been like that.

But I think the biggest reason IT occurs is just like we said, like the bad news is happening so fast, you can't look away from IT to in the stock market as well. There are historically, over time, there have been days, months, weeks where the stock market falls ten percent, twenty percent during cove in the market fell forty percent in four weeks. Something like that, very rarely, if ever, will that occur on the way up.

Almost no examples of the stock market rising forty percent in one month will never happen. So like they are ability to go down very quickly. I mean, the classic cli, I think it's um escalate up, elevator down kind of thing.

Is that usually how IT works? But I think that's a good analogy, gy, for how a lot of things work in life too. It's just like the speed of which they occur gets your attention .

much more tiny and magnificent when little things compound into extraordinary things.

I think it's it's pretty common to think that a big event in the world has to be caused by a big action that if you're going to have a major war, a major recession, IT has to be caused by something enormous that is causing anything to happen. And choosing not the case is usually a bunch of really small things that interact in the right order that create this massive event.

I mean, this is definitely true during the great depression, like the biggest economic calamity in the history, this country. And what was that caused by? You had a stock market crash.

Will those happen all the time you had a bank run? Those happen all the time you had a dust poll. I was like, kind of the poll was a period just around here in the middle.

The country where mean the back story is after world war one or during world war one, farmers, the united states, were heavily incentives and incentivize to plant crops because we are trying to feed the starving russians during this period. So the U. S. Government came in and said, as much corner you can grow will buy IT from you. I think that was two dollars project of the time, something like that.

So tons of farm.

This is premium. Phe is huge premium. Tons of farmers from all over the country came to kansas and oklahoma and just planted, planted and planted way too much corn.

And they were terrible farmers. They were just like plowing up land in the most like, vacuous way that they could. And then they all can't stopped, and they all build and left these fellow fields to to sit there and kind of dry up, so they got dusty. And then you have this mass of dust storms that would that prety much wiped out a region, these dusters ms, that were just like as apocalyptic as you could imagine.

How did not impact the economy.

the entire farming region in the bread basket, united states, that was producing all that, that was just wiped out, I mean, literally just covered in dust, and wiped out, I mean, a huge portion of the people. And so many those people ended up just abandoning that. There is no way you can make a living here anymore.

So that happened at the same time that you had a stock market crash and and a banking run. All three of those things individually would have been bad. But then having at the same time you get the great depression, and I think there's a lot of incidences like that over time.

One of the most interesting ones was during the nineteen fifties when we are experimenting with nuclear weapons. And this was the nuclear age of war. We started to build really small nuclear bombs.

The idea was that, yes, we can have a nuclear bomb, that one bomb can wipe out a city. But we also want to use this technology for more like tactical warfare. And they came up with really small bombs, one of which you could literally launch off of a shoulder fire, like buzz uka and IT would.

IT was a nuclear bomb, but he was like, a very low yield, so he would do a lot of damage. But this was not like, like thermal nuclear weapons. And the idea was like, oh, great, like we can use this tactical ally. There is a joke that they even came up with a nuclear hand grenade, but they couldn't find anyone dum enough to throw IT, which was the joke at the time.

But the idea was that small nuclear weapons would be safe to use, but the actually they were actually the risk st thing in the world, because usually shared destruction was was A A A A real thing and made IT so that the soviet in united states, we're not onna, launch a thermo nuclear missile. And why bata city, because the other were just retaliate in the world, gets wiped out. But if you had a small nuclear weapon that you are gonna, would you use that? Like the barrier to using that was much lower.

But then if the soviet used a small nuclear weapon on us, would that justify us to use a bigger one? absolutely. The cube missile crisis in the one thousand nine hundred and sixties, the missiles that russia had uh lined up to the united states point at the united states where an order of magnitude lower yield than what we we used in japan during world war two, way smaller the bonds that they had.

But if they launch one of those, we would have retaliated with the full force, the biggest bombs that we had. So this like what created the biggest risk in nuclear war. We're not the big bombs.

IT was the small bombs that we were actually more likely to use. And so you have this tiny thing that we're like, oh, it's it's a nothing. It's a nothing burger.

But that was gonna be the trigger to actual nuclear warfare. I just read this recently. This is not in the book the guy who invented the machine gun.

His lesson was gatti, the gatlin gun. Uh, he actually invented IT with the idea that the machine gun would end all wars. Because I was so destructive and has a such a killing machine, every country would look at and be like, we can go to war.

We're is all going to get wiped out. It's too deadly now. And so you have .

all these things I had. Well, mister gatting's, you want believe .

what happened next? yeah. So you have all these things where someone creates something that they either think is small or they are like, oh, it's not that big video to use IT, but it's just like compounds into a much bigger thing.

So fascinating.

So the takeaway from all that to me is like people underestimate the odds of big events because you think a massive recession needs to be caused by like an economic media, and IT doesn't IT can be like five small events compounding at the same time in just the right order that set off a chain reaction.

This is evolution as well, right? This is how you go from single cell, you chaotic to pro chaotic or the other way round bacteria in event somewhere to mean you said in front of microphones have a chat yeah .

it's never yeah and like, I think if you are a skeptic of evolution, it's because you think you make the jump of like how do we go from a frog into a human that makes no sense but you're like, well, if you have point zero zero zero zero infinite change in every generation and you compound that for a billion years, then you get something great. It's like the tiny, a little thing for a massive of amount of time you .

get something amazing and and despite progress requires optimism and pessimism to co exist over here.

In the story from adamo stocktaking, who was um the highest ranking uh P O W in vietnam. And he was talking after he was released, he he's talking about how some of the pows behaved when they were in prison. And he said, you know, who did the worst as appeal of you? IT was the optimist because the optimism, say, were going to be home by Christmas, and then Christmas would come and go.

And they were just crushed. They were just destroyed. And he said the people who did the best were like the rational optimist as as I would defind IT would be people who would say, we're going to go home by this.

We're no, they would say we're going to go home eventually. This war is going to end and we're you're going to see your wife again, but we're not going home by Christmas. No, no one is going on home by Christ. This is going to be a long war that's we actually did the best like they could take optimism and passed m at the same time and put them together and be a rational optimist.

Another great example of this in business is bill gates, who, in the nine hundred and seventies, when he started microsoft, took the biggest optimistic swing any entrepreneurs ever taken in by saying, like, there's going to be a computer on every desk in the world, like the crazy st. Bold vision anyone's ever taken. At the same time, he managed microsoft as conservatively as you possibly could in terms of, like tones of cash on the baLanced, no dead you, I said that he wanted enough cash in the bank so the microsoft can make payroll for one year with no revenue, the most conservative way you can run a business.

At the same time, he's taking this ridiculous swing for the fences, and I think there are so many other businesses that are just as good, if not Better, at creating products than microsoft might be. But they were managing the business with an equal level of optimism of like leverage and debt. They eventually just get wiped out.

They run the so over a Cliff. So gates could take massive optimism and crazy pessimism and be like these things are gona co exist, ted, at the same time. And that's an analogy for how a lot of people do well over time. Like the person like the pure optimist runs over a Cliff, the pure pessimist never gets out of bed. The person who knows when each needs to come in to play is who actually as well over time.

What's that tab thing about? Um like i'm an authoritarian an with my family, a socialist with my community. I'm a communist with my he village.

he says at the federal level i'm a libertarian, at the state level i'm a republican, the local level i'm a democrat and at the family level of a socialist it's such a brilliant I think it's a great thing to say, like as the size of something changes, what you expect of IT in your relationship with that also changes. Might also your nature .

must be able to adapt to the demands of the situation that you're in and the vertical that you're in. okay. So a business is not just a thing, this mo thing.

It's not just tesla doesn't just make cars and invention IT also has to make money and like pay payroll and and yeah be in compliance and IT deals with lawsuits and IT does all of these other things like do you really want elon steaming into the lawsuit department for the person that is just been run over by an autonomous c? Probably not. That's why you have different horses for different courses.

Yes, right. And this is, I suppose the difficulty comes when you, as an individual agent, try to amalgam all of this into one brain. You know, in an organization you can specialize, you can turn things down. You find the person that has the nature that you want. We want to be conservative, account you to be creative the other way round as you want IT with boring ads .

and insane again. And a huge problem with entrepreneurs. The assumption that because you can understand a technical product that you know how to run the business of a technical products, it's pretty rare.

So someone like mark zc berg is very rare. Yeah the technical jobs to build facebook, build IT himself and to run IT today as a trillion dollar company. That's very rare.

It's way more common for you to be an entrepreneur who knows how to build product. And then as soon as the scales you're like, I don't know what i'm doing here. I need to call in the big boys who know what they're doing.

Me a good example of that was uber, where travails like no one could have built uber other than travel's colonic. His ability to take a risk, his willingness to us give the middle inger to the regulators, was like no one else was willing to do that. And once uber became a big company, probable nobody was worse at running a company.

Then I was counting because that same attitude of, like, fuck the regulators, what is going to do our thing once uber was a hundred billion doll company. That's not the guy you want running the play. You can play IT again. So so but that's more common to have like a different like the person who is right to run IT at this size is not the person is right .

to run at this size. I told you the story of the Francis last night, and I mentioned that then was found to found a CEO step back at o guy that used to run puma repot came in then, then came in is like c bo, or something like something to do with brand, or like some sort consult step back then came back in A C E. O.

And he said this thing on the podcast that really stuck with me and he said, when your ambitions for the brand are bigger than your ambitions for yourself, that's when you'll become successful that he was prepared to be like, hey, am I the best person for the job right now? Yes, okay, let's do not to attend mail. Let's do that.

Do I have the first idea about how to in a twenty million pound business, not really. In comes a person from reboc when now at three billion dollars, well know, maybe it's actually this different chAllenges and it's useful for me to be back. And he was just completely prepared to put his own eagle to one side and say, what am I supposed to do? So that shows a person who is right at multiple different stages but not right at all stages.

Yeah I think there is an interesting alternative history in which Steve Steve jobs does not die in twenty eleven and keeps running apple. What would apple be today? Because the truth is, after he left to tim k came in apple degree.

Apple did phenomenon in terms of like unit sold that net income. Apple has absolutely thrived under tim cook. And I think you would actually make the argument that around the time that Steve jobs happened to die, what apple the company actually needed was a tim cook, because and and and what they needed before that was Steve jobs.

Like in the early two thousands, you needed a crazy mini act like Steve jobs to come in and be like, i've got this crazy idea for new products and no one else is thinking of that's what apple needed once saying came up with those products. What you needed was something to come in and keep the trains moving on time like tim cook. So there is a weird alternative history.

And I told making this up, it's anyone's guess. Steve jobs doesn't die. He keeps running apple into the ground. Yes, yes, I I actually don't think that's likely, but I think it's like a very real possibility .

that could have happened. Depends what metric you want. Do you want to continue to have this sort of pioneering spirit? This person is just like out. They're doing crazy things and it's exciting in all the rest of IT yeah in the .

beginning yes my my heart take of shared with some people and I say this tongue cheek i'm not actually making this bed uh within five years, elon musk will either be a trillionaire or bankrupt and there's like fifty fifty odds of either that's my hot G I actually take IT that seriously but he's a kind of person who is like completely incapable slowing down. It's always just bigger bet, bigger bet, bigger bet, bigger bet. And eventually that that usually catches up with the people. Um but it's so fascinating to watch what .

he's doing IT yeah yeah really is a one of my friends that lives here in Austin was working for a company that recruit the highest level sea sweet executives. So they didn't place Susana was jacki or tim cook, but they went through the process with both of them. And what he was able to do, he had access to the internal company, internet and every archive.

And he was able to go in and see the biggest executives in the world and see what their recruiters were saying after the'd had they sit down. I was like, this is and fascinating to tell me, what did you read? He said, well, there's a difference between the a players and the triple a players said, the eight players are in there.

And you know, the usual stuff and often something that pops up that may be a little bit concern but that they're good. They well rounded, he said. But the triple a players are ten times Better and they stand out as that as well. I think in um tim cook, the first two words were absolute stud when the first two words of tim cook, Susana was a rock star was like one of the first few sentences and you think very interesting like these people than more than just like again, I don't know much about either of the guys but from the conversation I had that more than just business people yes. There's something like ineffable in then where people who are exposed to the best talent, the best paid, most tightly placed to talent on the planet for the bigger companies in the world, look at them and go stood yes yeah .

and I think like back to apple, like once Steve jobs invented the amazing products, the next step is, okay. I can we literally make a billion iphones and keep the quality as high as I need to be. And that's what you needed a tim cook for.

And I don't know if sea job would have had that skill to keep that going, but you could also imagine the world which he doesn't die. And as everyone knows, the last ten iterations of iphone ones have been exactly the same. And that would not have been the case to Steve jobs. They would have keep innovating and create new things.

casualties of perfection. There is a huge advantage to being a little imperfect.

I think it's always the case that people want to squeak as much opportunity as they can. I have everything in life, whether it's in your career, whatever IT might be. And that invariably what is going eventually catch up to you, like room for error.

And what you're doing is a massively important thing to have. You saw this in twenty twenty one, where in manufacturing all over the world, the biggest trend over the last twenty years was efficient, efficient, efficient just in time, manufacturing and then twenty twenty one roles around. And there is a little bit of like what I was honestly like, a hick up in the global time to get .

stuck in the fucking thing I can.

Everything collapse, everything breaks. There was no levelest soever for anything to go wrong in the system. And you can imagine a world which those companies that we're doing just in time manufacturing and then like collapsed in twenty one.

If they had actually held a little bit more inventories in their warehouses, the I would have been a little bit lower in two and nineteen, but they would have actually been able to supply products in twenty, twenty one. And so it's always the case that like having a little bit of room for error, having a little bit of a way is great. And it's true in your personal life too.

Most people these days have what I call thought jobs, their jobs to work with their head. It's not to dig a ditch or like poll ever, their jobs to make a decision with something. And in that world, what you really need more than anything else is time to think, time to ponder, time to, like, figure out a problem in your head.

And what does that I look like? IT looks like sitting on the couch. IT looks like going for a walk. IT doesn't look like work. But most bosses will not allow that.

Most bosses, even if you have a thought job, is like, I can draw your desk, moving your fingers on the keyboard eight hours a day. And so they don't have any time in their day for something that looks inefficient. But it's actually gonna like the thing that's actually critical to their job.

Yeah really sutherland and has this idea about no one gets fired for hiring kpmg yeah which is the safe bet. Following the blue print, doing the thing that signals business is to a lot of people. Look at my average response time on slack.

That's really good in this. Did we hire you as a slack supplier? yeah.

Is that your jo B2Be the sla ck res ponse, sky? Or is your jo B2Be so Geo rge? One of my good friends is first job um at social chain. They literally created a role for him.

They called him innovation lead as I got like vague what's that mean to know not sure they just make a, make a role for input him in there. He'll do something cool. He used to go, uh, this was steamboat company, and they had all of these different big fan pages.

So they were able to design social media marketing campaigns, but they were also able to deploy them because they had the pipeline. They had A A two million person, Harry potter fan group, or whatever is. And George found that IT was one of these open plan offices with fucking in astro turf everywhere.

And the a slide, the ball pit, unite, one of classic, sort of mid two thousands type things. And George hated working in IT, didn't like the open plan office way to distracting. He needs a little bit more order.

So he found that there was a room upstairs, all of these different places filming content. There was a room upstairs where they were trying to build the world's largest Harry potter jigsaw puzzle, but no one could be bothered doing IT. And I was like, there was no time limit on the product, the project, to be completed and to be filmed.

So he would go upstairs and sit on the floor in this empty room that was forty feet by forty feet, with no one in IT, no desk, no nothing, just a laptop on the floor. And bits of Harry pott gig saw around him that he wasn't lowed to move because I would, like, wrecked continuity. But he would go upstairs and sits surrounded by fucking and Harry potter jigs oppole pieces. But that was his thing.

Yeah, his thing was, I don't want .

to be the .

sack response. Y E R. Virtually every, I mean, whenever I write a book or an article that was written during a walk, like I don't think very well from sitting on my desk in like, okay, time to be creative.

Time work doesn't doesn't happen. You get good ideas in the shower. You good ideas going for a walk, go for a run at the gym. That's when things happen.

So people I think people in tube of the understand that you need unstructured time in your day where you should just have like a four hour block in your calendar. That's a thinking time. But but you can do that and because everyone wants to black squeeze efficiency and opportunity.

other count yeah I had I released each year the same annual template that i've done to do my end of your review. And um I have to admit that this year even I sent out the one that i've done for five years, I actually changed IT. I did a completely different process.

I love the new one that I did that will be available next year for the people that are listening. And I asked myself a really interesting question I thought is fucking interesting, which was, uh, what do I think is productive but isn't what do I do that I think is productive but isn't other stuff like, what would I do if I wanted to make eighty five year old me miserable? What are the things I would continue doing?

What would I do if wanted to make eighty five old me? What would eighty five old me wish that I did more of? What do I think is productive that isn't calls slack and whats up yeah staying in on weekends, sitting at my desk when i'm not working. What is productive that I don't realize? Dinners with new people, attending events, travel.

reading is so good, like what you think is productive, but isn't is like things that look like work. And what is productive are things that don't look like work, like most people would be like, oh, going after dinner. That's just pleasure. At last.

at last night, two chapter is probably from you for my new book in a couple .

of quotes from me for yours. So Chris, you, I had dinner last night for two or three hours, and think of us got tons of a more .

than i've one by sitting down there.

And if I had fied skip dinner and just SAT my hotel trying to work, I won't come up with absolutely nothing. But it's so hard for people, particularly if they are employed by a company, to do that. Because if you tell your boss, hey, I need a budget to go out with, to go out to dinner with my smart friends three times a week, and I need to expense that and that's gonna uncle for yourself.

You need to sit in your desk and type and every boss thinks that that's what so hard. And I think that's also why it's very difficult to innovate within a company like what looks like productive work. H is not what's what's actually production work.

I wonder whether this is good, hot, slower game when the measure becomes an outcome is sees to be a good measure if an organisation that gets to a particular size starts to be broken down. Anything that can ever be seen on a dashboard is dangerous because IT removes all of the things that can't be seen on a dashboard, which for the most part of the things that are the highest outliers in terms of your return in any case yeah we always telling you this idea of hidden observer able metrics last night and a lot of the creativity and the biggest outlier returns that going to get are going to come from hidden metrics. They're to be driven by hidden metrics, not observable metrics like yeah sure you editor for your book probably needs to be observable metrix guy like how many hours how many you at on on the .

podcast is like a lot of metrics within businesses. Maybe they made sense at one point, but then people just keep using them and you're using the same metric and people don't ask, does this metric actually lead to success? Or is this just what we have been trained, what we've been told to do? And that's that's a lot of IT, too.

So like there might be some point in your career in which calls were productive. They might like very early in your career, like your job is to cold call, like the number of calls you did. But if you keep that for the rest of your career, like you need to change the metric in which you follow.

That's why I I think that IT is a it's an era for people to not see the advantage of saying yes to someone that comes through town. Someone's coming through town there in your town. Maybe there are in your town for like two hours of the airport. Maybe can grab a coffee with them fucking go for the coffee with them like say yes to meeting new people. Did I had I stayed with Douglas mary you know Douglas is uh british uh, political commentator of I stayed with him in new york january two years ago when I first moved out to amErica and I spent three days in manhattan him and in his apartment that three day period didn't do much for my liver because he likes to have cocktails but I shake you not IT came up with like six life changing insights yeah but I still think about at least weekly.

I feel like I can get that from a single book or a single podcast too. And it's a constant reminder to me that what does good look, what does good work look like for me, sitting on the couch in my sweatpants with a book that's the most productive thing that I can possibly do. But even after doing this for eighteen years, I still feel like i'm not working when I do that. It's it's really hard to actually switch your mindset into being the saying that's what I need to do.

I was telling you before that rob enderson, one of my favorite people, he was sitting that seat not long ago as well. And he is most popular subject article of last year, given he done five thousand wood, ten thousand wood, breakdowns of advanced sociology, ological textbooks and all this sort of stuff, was a thousand word blog post called how I read. And he got this one line in IT, which is reading is like going to the gym.

You must dedicate time to IT. yeah. And I think for me still now, I think, oh, readings like somewhere between a relaxation activity, a leisure activity and something I do when I have spare time. Yeah, I don't think that about the gym. I think the gym is the thing that I make myself go and do.

So a lot of people get frustrated that the fact that they don't read enough, first off, they should download my reading list, which you you can get a Chris, well, like stop com slash books and psychology of money in. The second thing that they should do is actually commit some fucking time to IT like you have to because you're reading time. And this is me shouting at me.

Your reading time is always going to be the important thing that gets pushed to decide by the urgent thing is always going to be more slack messes is always going to be another fucking invoice apply IT is always going to be emails or a call to take or something need to do or fucking indoor, they need to get ready for and you say, no, I can't. I've i've got a gym session at that time. Can we do IT in out later? Yeah, no, I can't. I'm busy at that time like might be a bit odd to say, like pushed in a backs and reading, but like that's the philosophy that you need to have going into IT.

I'll tell you how this impacts me. My wife bluster. She's wonderful. If i'm sitting at my desk typing, she's like a Morgan working, I can't bother him. D by working home, have a glass door in my office so he can if i'm on the culturing, she's like, oh, he's not working. Can you can help me for the laundry that's kind of think like to her her bar for interrupt ting me if i'm reading is so much lower than if i'm typing and I don't blame me for that. Like what looks like you're working is not what what, what is actually productive.

It's supposed to be hard. Everything worth pursuing comes with a little pain. The trick is not minding .

that IT hurts. This is great. Seen in lots of arabia where a guy, a, pulls out A, A match, lights IT up and put IT out with this fingers.

Doesn't once this other guy watching him is like, or let me try that, pull out the match, lights IT up, put his fingers on the goo hurts. What's the trick? And Lawrence goes, the trick is not minding that IT hurts.

And it's like, that is such, such a brilliant scene. And that applies. To almost every like there is a cost to pay for almost anything. And a trick in almost any endeavor in life is figuring out what the cost is and just being willing to pay in. It's true in investing of putting up with volatility.

It's true in your career where there is a jeff bezos quote where he says, I look, if you can get to the point in your career where you enjoy half of IT where half of IT is fun, that's like as good as IT gets, like there's things in any job that just suck. It's like dumb, boring, adman work. And if you can get to hour, half of is fun.

That's great. You know, I was talking about this last night in both of our careers, a lot of IT is fun and very fulfilling. A lot of IT is kind of just manie and I just work, uh, it's just capital w work.

So I think in almost anything, figuring out the cost of IT is is the most vital part of of being successful over time. You see a lot people's create. You are talking about this last night.

Take someone who is uber successful, uh, mask gates, zuber, those kind of people, if you actually drill into what IT took for them to achieve that success, Michael Jordan, copy brand or those kind of people, the cost that they paid to get that success in their personal life, often for their health, for their mental well being, is off the charts. But it's so common for us to look at them and be like, I want that life. I got that looks like an amazing life. But when you actually factor in the cost of what IT took you like, I don't know.

I don't know. It's the thing that i've been the most obsessed by, I would say, from other people of psychology perspective over the last two years。 Tiger wood's perfect examples. This I hadn't time bit in my live show about this James joice, you know, master of author, but post human sly, a long series of fat fattish love letters that he wrote to his wife were released on the internet like a salvador dolly.

You know much about dolly complete many. eg.

His parents gave birth to a child ten months before him that they called salvor and then almost immediately got pregnant again. That one died. They were added that darley was the reincarnated, his dead older brother.

That's how you entered the world. Um when he was a child, di throwing himself down the stairs, he found out that he was a massacre st very early in life he would throw him self down on the stairs for fun. When he was giving a lecture, he was suffocating inside of a deeper sea diving suit that he had to be reached out of mid talk while he was giving A A lecture.

He married a woman who was married at the time they were both married, that they both separated from their current partner, got together. And then dari immediately started to treas, halfway between a god and royalty. So he bought her a castle and then would send formal letters of request asking to visit her in the castle that he bought her. And you'd refer to her, his news and all the rest of IT. But all of those things contributed to that.

You end up painting like melting clock and then stuff that .

as brilliant as he was. Devi didn't do dali, and michelAngelo didn't do dari. The only way we get dully is by dari being that throw myself down the stairs, locked myself inside of the deep sea diving suit, buying my future wife a castle person.

That's the only way there's a quote from alex that I spoke him about the start of last year, one of my favourite ones. Whenever I get to a law point where I think, why do I even bother? I just try to remind myself this is where most people stop and this is why they don't win.

A remind of of the gladiators in the arena who filled the top in scar with no hope in sight. Building a business is hard. Hard feels shitty.

This is what hard feels like. And this is why most people can't do IT. But you can. This is what hard feels like was in my memo that I sent to the team this year, is something he told me this great story about when pledges, he was in a ferny at college and he was like high or ever, the pledges were whining about what they were being made to do. And he said, right, I know everyone is having a pity party here.

So he calls them around and he says, like, who here thought that this was going to be easy? No one puts their hands up. Like, who he thought that this was going to be hard, like everyone puts a hand up, he was, this is what IT feels like.

No, I think in most endeavors in life, people perfectly understand the relationship between Price quality. In a nice car costs more, bigger house IT costs more. But that like understanding goes out the window when you're talking about career success or career fulfillment or personal health, things like that, like that, the relationship just kind of breaks down in their own mind.

But IT IT doesn't go away like the higher the success, the higher the cost. I love reading biography of entrepreneur s of generals, whoever might be, with very few exceptions. Do I finish the biography and think to myself, I want that person's life where I think is i'm glad they existed. I'm so glad the world had that person that we can all benefit from. But though the crazy success comes with a cost that very few people, including most of the time myself, are not willing to pay.

how can people not mind that IT hurts more? I think when .

you talk about some of my dolly, it's like it's in it's in grained in them. I think some, I think whatever you have, somebody like mosque, sucker, berg, Jordan, tiger woods, there was not a decision that they made. They had to.

They had to a compulsions. Um several years ago I heard patro shanny say that the single word that he would describe for most successful people was not driven. It's not motivated, it's tortured that they wake up every morning just like I am tortured at the success that I have not achieved yet.

And I have I have to go do this. I have to go work twenty four hours. So some people, I think, are born of IT and some people are not, which is why like the success is so stratified um once in a while I think you have someone who is like a middling success and became a founder at age fifty and knocked at the park park. But that's extremely rare. I think it's usually people for whom this is just in their blood.

The yeah yeah again from alex last Jerry said, champions are broken. People look at champions and try to find something that they have, that everyone else doesn't have. But it's the wrong way round. Champions don't have something that everybody else does.

which like being fulfilled, right, right?

And saying like that enough. What was the donor party?

The donor party was as amazing as you. You as as a bread fried. Ever heard of the donor parties that? right? So back in in the eighteen hundreds, there was a pretty well wealthy family, that donor client they were in chicago who were moving west as a lot of people were.

And the doctor very wealthy, but they were like driven to the the wealth and the opportunity in the prosperity of which is the new land during this period. So they started making IT out west because, of course, before railroads are making out on on wagon train and they started off, there's a very big party. It's more than one hundred and fifty of them that start off.

And at one point they meet, I think they're in the middle of data and they meet this quack who promises them a shortcut, who says, like, hey, like the row between here and to pass through the end of that amount, ts is pretty tough. But I know a shortcut you can make your way around here. The show cut turned IT out ended up being completely bogus.

And IT was IT was nonsense that actually had to basically backtrack back to where they origin started from. That delay made IT. So now they're going to a cross the sea of that, a mountains in the middle winner, just not when you want to be doing that.

You want to cross IT in the summer or the fall before the snow comes. They eventually hit the serota at a mountains during what was the biggest winner in decades, the biggest snowdrop. They got completely stuck and they had to resort to eating each other, cannabis, lisa, and it's a, it's absolutely horrific story.

I mean, one of the details that sticks out from there, there just shows like the plight that they were in when they were eating each other. And there were still dozens of my alive at this point. They would label the meat that was harvested to make sure that you did not have to eat your sister or your mother, that you are eating to somebody else is mean the plate that they went through was extraordinary.

And two things have always like stuck out for me from the donner party. Most people just focus on that element of the story. One of the things that sticks out is, sticks out is that they they were already rich.

They were not going to california because they are like, where people can we want new. They they were just like seeking more. They are alda crushing IT.

The other was, they were in the situation specifically because they were alured the attempted by a shortcut. And look, i'm all for efficiency. I'm all for doing things the right way. But so many shortcuts are just cutting corners that just eventually get a backfire on you. And there were like such a profound example of that.

The safest way to get what you want is to try to deserve what you want. That was from longer. What's that mean?

He mentioned this in several different contexts. The biggest that he mentioned in in was love. If you want to be loved, the way that you get that is deserved to be loved.

Ah there's another quote for my friend bb shore and hee's. Like he said, something along lines of marriage works when both you and your spouse devote your life to serving the other person and expect nothing in return. So you wake up and you're like, i'm here to serve my wife and I don't expect her to serve me back. If both of you do that at the same time, you're both serving each other without expecting anything else to return, it's magic.

Think about what the opposite of that is. New strong said this the other week, unspoken expectations are premeditated resentments. Unspoken expectations .

prime exactly. I think that's a brand exact point. Said more sexually. That's really what IT is.

So I thinks, you know now, and I think it's a true for a lot of things. If you want to be wealthy, like you need to deserve IT. If you want to be a successful treatment, R I need to deserve IT. No shortcuts. It's all just like find the Price pay.

keep running, most competitive advantages eventually die.

I think there are so many examples of this. One of the most interesting is serious, uh, which if you go back to the seventies and eighties, no other company in amErica had the mote that serious did he .

was completely on OK .

you kidding me? Come on. Series was kind of IT was the most successful retailer, mostly close and things like the department store, but they also sold the washing machines. I think you're actually .

still around mart t yes.

but less big than and less less alone compassing the warmer. But they were everywhere. They were so dominant back in the day, nobody could touch them.

And they got so big that they started. But they bought discover card and like dean witter stock as they started like moving into all these other areas. No, IT was truly the walmart of its day, or even like the apple of its day of just like nobody compete with this.

And then they lost everything and one bankrupt and then lost IT. And if you dig back and to what happened of like they became successful because they were so scrappy and so terrified of competitors. That's why they became successful as soon as they got big IT all went to their head and they were like, we're series, nobody compete with us.

They stop innovating. They ignored this upcoming that was chasing them called walmart, completely ignored IT. And by the time that they realized what had happened was way too late, they were gone.

I think that's actually a very common story that IT happens in individuals as as well, where the reason that you are working so hard is so that eventually one day you will achieve a level of succession which you don't have to work so hard anymore. That's what's motivating you, is the dream that you can one day relax. So when you become successful, you justify ably think I can stop working so hard.

I don't need to grind just hard anymore. And in the moment you think that and it's justified, you think it's justified, you you lose what actually made you successful to begin with and then it's that's the downfall. And you see, like there is amazing interview many years ago with mike mortes, who is the head of of zoia, the most successful venture capital firm that ever existed.

And charlie rose asked, he said, why is sqa been so successful for forty years? Not over one market cycle you've dominated for forty years. And mike mart said, we've always been scared of going out a business.

And like, look, if there's anyone in silicon valley who has the right to say it's because we're smart, it's because we're so good at what we do. He is the right to say that, but he didn't say that. He said, we're terrified of going out of business and that's like that like like you never let your guard down. What made you successful you never let go of that isn't a business book.

only the .

paranoid is exactly and know, I think there's lots of different versions of this. I read recently that the unofficial al model of invidia, the unofficial al corporate model, is we are always thirty days on going at a business. That's what they tell themselves in their meeting .

who are always hangs. But I think that's why that .

that's at least one of the reasons why they are so successful.

What mean you were talking about this last night? And I think it's a brilliant frame, and I want to spend more time building IT out Sarah tony Morgan versus dopamine Morgan. And I think that the only the paranoid survive business model is a dopamine company, not serotonin, an company yeah right.

That is very vigilant, very anxious, very on edge, making sure that everything score heavily, scrutinising all of the different options, keeping a rest of competitors and and you know having these sort of underlying resentments but also knowing that I can't really bring them up because that's also not going to be good, but i'm going to fuck and hate them. In any case, it's that energy is that leaning. It's that tentative, sort of very watchful energy. And I think that especially if you are somebody that's close.

not only close to the Operating of a business.

but also emotionally invested in Operating of a business, or if your professional life in your personal life have blended in a way IT can be very difficult to not have what is effective professionally, curse you personally yeah, right. IT is very, very good for you to be on edge in that manner. Very good. IT is useful and effective as a business to be on aging that manner. Yeah, IT is catastrophic and destructive for you to be on aging that same way in your private .

life and was so hard as that most people, when they make mistake, don't know what they blind to. IT, where is cutting back? Because you become successful is a cognizitive decision. You know that you're like, I, because i've become successful, I can now sleep in. I can now work few hours.

You know you're doing IT you think it's justified but what you are blind he is like what that's actually gonna to your career and someone we do this just last week, he said, when does the start of lose its magic? And the precise moment when that happens for every one of these companies is when the co stops building the product, when the co stops coding, when the chief marketing officer is not writing the, the, the copy anymore. It's like once you become so big that the senior executives are detached from actually doing the work, when the musician stops writing their own songs. I know authors who when they become big, uh, they have so much pressure and incentive to write more books that they basically hide their ghost writers are these people have and that's when you lose the magic you're not .

doing at yourself anymore. The same thing is so true in the world of podcasting, and specifically youtube. Youtube, more than podcasting, are the creators that take their eye off the ball with guest booking, guest research, scheduling titles, thun, ils and branding.

What actually matters? The longest points of leverage. Like if I spend six hours every single week on calls just doing copywriting for seven videos that's IT. Ah so it's an an hour video we spend an hour of video to come up with the right title and the right thermal e because is one of the longest levers that we have.

Yeah every single video that ever gone out i've touch every I am like getting to the stage now I was telling this last time I to Operation ized things. I'm tired, like I don't get to just do the things that I used to do. But I also realized, and this is a little the alex, his wife um I asked her, one of the things that you shouldn't outsource, one of the things that you shouldn't, one of the first things that he said you shouldn't outsource, the thing that makes the money all the impact.

Yes, yes, that's good. Outsource everything else. Fuck can get a made, get a cleaner, get a gardener, get a fucking driver, get a whatever you need but don't outsource the thing that you're there to do.

Yeah I think you see this a lot in um in investing where you have someone who's a very talented investor, very good at picking stocks, funding the right business and then they launch a fund. What is launching a fun in tail half your times going to be fun raising half times going to be accounting hr, you've got to hire people and then you're completely detached from what actually made you good to begin with.

And that is so common in any business. I think it's I think it's I think if you I identify that point, if you can effectively outsource those kind of things, I think if you are the entrepreneur, the C E O, whoever IT is, and you get to a point, we are like, hey, i've become really successful. And I I became the successful because I wanted to step back.

You need to be honest with yourself and ted and remove yourself from the situation. The people who follow the problems are like I granted for twenty years now i'm successful, but i'm not gona leave this business that I built. I'm going to stay here and just become fat, happy and lazy that's when I eventually .

scrambles yeah the wonders of the future IT always feels like we're falling behind and it's always easy to discount the potential of new technology.

It's so like very rare. Is there a single new invention that is amazing in and of itself? It's usually that you have a small invention.

And then ten years later, another small invention. Twenty years later, another small invention, and those things come together, and that's what create something amazing. Jeff bases talked about this recently where he was like when he launched amazon in one thousand nine hundred and nineties.

He did not need to build a payment system. IT already existed. IT was called VISA mastercard.

He didn't need to create a shipping system. IT are existed. IT was ups. But like he took all those things and combine them and built on top of them. And it's true for a lot of innovations of like mean.

The most like stunning example is Thomas Edison did not invent the light bob. IT was first invented by a guy name, uh name Harry Davis, who was a bread who created something that looked exactly like the light bob. I think twenty years before Thomas Edison, the difference was the light bob that he built. IT was impossible, bright. You would go blind by looking at IT and and .

he would only stay.

and would only stay lit for like five seconds. What Edison did is he moderated the intensity and he length in the endurance of the bob that was in incredible. Let's not pretend that he built that flaming bob from scratch.

He didn't. He took what other people had done and built on top of IT, and is true for almost any invention of, like, obviously, visits him in. Ford did not invent the engine. He didn't invent the wheel. He was like, combined all of these things.

So whenever a new invention comes out, I think it's very easy to be like, what is this useful for? And a lot of times the answers is like, we don't know, but someone like this is gonna be something that somebody combines with other things in the future. That's gonna become something incredible.

You've got a typical path of how people respond to what eventually becomes world changing new technology. First, i've never heard of IT, then i've heard of IT. But I don't understand that.

I understand that, but I don't see how it's useful. I see how that could be fun for rich people, but not me. I use IT, but is just a toy.

It's becoming more useful to me. I use IT all the time. I could not imagine life without IT. Seriously, people lived without IT. It's too powerful and needs to be regulated .

as true for almost every like big invention. The two that are most interesting to me was the invention of the car and the airplane, which, when both of those came out in the early thousand hundred hundreds, the first reaction to those was like, I don't understand why anyone would want this. The first car was so inferior to the horse, and the first plane was so inferior to the train.

So everyone looked at and like, what the hell the use and then was like, oh, I see it's a rich person's toy. If you're if you're a zil, you're going to a car you can put around town with I kind. And then IT becomes Better and Better, both the car in the plane, the first uses that people software.

IT was like, oh, we could stop a machine gun to this using in the army, virtually nobody saw, even the people who work in these industries what IT would become, which was like, good for transporting people. And like, nobody saw with the car, there are like, oh, this is going to open up a new form of living called the suburbs, and people can drive to the city. Now, nobody saw those things coming. IT was a very long path.

If he usually takes ten to twenty years, at least before people like, oh, now I get IT, you saw, do there are so many classic examples of in the thousand nine hundred and ninety of articles written in time magazine about like that? Why would anyone want to use the internet? How could anyone possibly, like, log around the sin called a laptop? Nobody's do that and it's easy to poke fun at those and you should poke fund at them. But it's actually common for virtually every new technology that you cannot find them.

What it's going eventually become. How should we interpret this consistent trend? Should we be less quick to cynicism and skepticism around things?

It's also very common history ally, that people say we haven't had a big invention in thirty years. We used to innovate. But over the last thirty years, what can you think of that we ve actually created? That's a very common view.

And usually what's happening is that it's not that we haven't invented in thirty years is that IT takes thirty years rush to recognize any invention. So we look back today and we're like, yes, the internet was big, but the internet came about thirty years ago. But if you go back to the thousand nine hundred ninety, IT was like, no, we really haven't invented much in a long time.

Like it's always that leg and how long IT takes you to understand how big something is gonna become. And you can imagine that happening in thirty years. And now that in thirty years an hour like, uh, we haven't invented anything in a long time. But in twenty twenty four, we came up with the whatever IT would be that that is such an obvious new technology because when we were inventing the car in the airplane or the transistor, the radio or the internet, very few people knew at the time what I was going to become. IT takes decades for you to understand what it's actually gonna .

be harder than IT looks and not as fun as IT seems. The grass is always Greener on the side.

It's fertilized with bosh, a onderdonk te. I can never find who originally said I can take credit, but it's and I think IT, there's a truth in life that everything is sales and everything is sales and it's done in an innocent way. But a big part of this is that people tend to exaggerate and advertise what they're good at and hide the hard parts, hide the flaws.

And IT creates this. In this view, among virtually everybody that your success was much easier than IT was, this business is Better run. I think IT is I go to a friend a couple years ago who was like, oh, this rival company is so much Better run than the company I work for.

There is so much more efficient, so much more and like, how how do you know that and and basically what is is like from the outsiders perspective, everything looks like it's easier and and Better run than that actually is. But if you have the insider perspective of how the sausage is made, you realized like how inefficient virtually everything is. And so that's I think that's that's a big part of life is just like realizing that success is harder than IT looks. We we talk about this earlier with tigger woods, kobe, brian and Michael Jordan, all these people. Like if you actually digg into what their life is, it's infinitely .

harder than IT looks to. You see outside elon on legs where he said, my mind is a storm because people would want think that to stand because .

what people look at all and they just men in the he's got a golf stream. He's got big homes and we think actually does. But like he has, he's worth a quarter of a trillion dollars. You can do anything you want that seems like amazing life. Like now I think if you actually dug into IT, I think elon isn't like probably the bottom making this up twenty percent of like mental .

health and society. I had this idea called the cookie test that I did on stage during my life, showing it's kind of about this, but from the way that we perceive other people. So imagine that there's a cookie here and I decide that i'm going to make the decision about whether or not to eat when I do that.

This unholy war begins inside of my mind between, you know, this patton's and one of them got a drag ga n and there's a trib you show and my old P T. Teacher, mister Anderson, from your nine, saying you're a cookie or and you always been a cookie or when you're always going to be a cookie to and then after a little while, the Better version of me succeeds and I turned away that's what I saw internally. What you saw was some bloke state cookie for a while, then turn away hungry and sad.

yeah. From the outside, everybody else look like slick washing agents. And from the inside, we look like waiver ing idiots. Yeah, because the a cemetery. What we observe of our own uncertainty, and what we perceive of someone else is uncertainty, is so a metric.

I also had this idea about how people going through break ups or people that feel like they've been a hard done by maybe they are wasting after um a friend or a partner that they used to have. And we're able to romanticize, especially people that have scored us. So that have left us is something sort of a particularly alun in their levens, right? But I think it's something that we can all take.

You can use this a symmetry to your advantage as well. Think about how much more deep and dextrous and nuanced and subtle and your thoughts are, then even the person you know the best on the planet, your twin brothers thoughts are the you know of, right? It's a one ten thousands, one one one million threat of what you have observed of yourself. So if you are someone that's struggling, the wilfulness, and i'm never going to be able to find anybody like them, there is also a very easy argument of then never going to be able to find anybody like me now, because you only see this very rough human version of them. Where is the depth that that you get of yourself is so much greater?

There's also almost the opposite of this, which is Daniel common observation that is much easier to spot other people's flaws than your own even though you're very aware of what's going on in your head in your thought processes or not. It's very easy for me to look at your decisions and say I got you're you're you're missing this and you're incomplete on this and you're making a bad decision here.

But you can justify your own very, very easily because you know the internal dialogue in your head that's justifying your decisions. I'm doing this because of this reasons and anyone on here's why i'm doing IT before when i'm watching you, I only see the actions that you're taking, and I can just judge you much more objectively in that measure. But I think if you could see the thoughts going on inside of everyone else is head, you would see that the world is a thousand times crazy than you think IT is.

You'd see people are a thousand times more depressed than you think they are. There are thousand times more creative than you think they are. There are thousand times more evil than you think they are, because what they're actually putting forth in speaking, and the actions that they are taking is such a tiny percentage that was actually going on their head.

We had movies a long time before neural link, aryan must ask, even sort of objects in the pop culture. But like minority report, you know, the ability to be able to see what someone is thinking, or be able might be prepared to do in future, to be able to predict that and then go after them, was the minority report. No, IT wasn't. What was the thing with tom cruise where they could see into the future? And he had that big screen as people screaming into their ipods.

At the moment.

I know that sounds good. It's great. Any good movie minority report was the one with, uh, fucking mad demon, right? You spend more time watching movies to stop. P, anyway, that's gna kill me. I can't remember, anyway, that movie.

The ability of what we have at the moment, people are only culpable for the actions they taking, the things that they say, not the thoughts that they have. There's no such thing as thought crime at the moment. And you can say, live in a world that senses all the rest is I yeah but if you keep your thoughts literally a fucking thoughts, no one knows.

So imagine if you got thought cancelled.

But that's my point my point yeah that's .

where the toxic .

compassion thing that I was telling about last night comes from, which I believe is performative empathy is a front is a very shiny venir that nasty people put over the front of their meanness to appear nice yeah, it's like a small gold bar that's being beaten south in that it's in gold file. And IT gives the illusion of something that glittery. But if you poke IT a little, it's just a .

hole through the other year.

Incentives, the most powerful force in the world. When the incentives are crazy, the behavior is crazy. People can be LED, justify and defend nearly anything.

I think people underestimate the extent to which the boundaries of their morality, the boundaries of the actions that are willing to take, can be change so easily if their incentive change. I saw this during the financial crisis of two thousand eight, when people after the crisis, and somewhat justified away, would say those greedy wall street bankers who crashed the economy.

And not saying that wasn't play justified, but what almost every one of those critics didn't understand is that if they were a twenty five year old. Mortgage broker at golden sex at lemon brothers and your boss said, if you package these subprime bonds will pay you four million dollars this year, you would do the same thing. You have done the exact.

the same concentration, can god? But in reverse? Yes.

yes. And I think there are so many stunning examples of this, of when the social incentives, the tribal incentives, to do something that is objectively bad, but you can easily rationalized being like, well, this is the insana for me to do the right thing.

There is a documentary about about l chapel in in mexico the drug lord who was a prety vicious terrible guy um and they're going to this rural town in mexico and they love out chapel all the people are just like chap chapel chap so great and they talk to them and they are like, well yeah like we live in absolute, utter object poverty and chapel would come in and build a schools, built us roads, give us food, pay for our children's wedding. We love the guy. Absolutely love the guy.

So when the incentives are there to overlook some element of someone's behavior, their personality, people just suck IT up right away. Another stunning example of this. There's a book called what we know, not what we know, and IT interviews german civilians after word war two. And these are german civilians who experiences to are in ninety germany in one thousand nine hundred years.

And the the book is just interviewing people saying, what did you know? What did you see? What do you know about the holidays? What you see? What was going on? And they're interviewing this german civilian woman and he says, oh, you know, when hitler came to power in one thousand nine hundred and thirties, everybody embraced.

And the interviews, like why? Like how could you embrace this monster? And he says, we'd have to understand in the one thousand nine hundred and twenty, and paraphrase her, the german economy fell part.

They have hyper inflation. Nobody had anything. Hitler came along and said, I have a Better way. We're going to give you jobs. We're going to give you prosperity. And the woman says, in that situation, you do not say to that person, no, I don't want that in that situation where you are in a desperate situation and someone come along and offered what looks like help you take IT. And that, I think, was, I think there was a very honest description of what happened in the situation that when the social and senate, or to embrace something that is otherwise wicked and evil and terrible, like millions of people can embrace, IT, if their incentives for one aspect of their life are to embrace.

what about hevens gate?

Havens gate? So heavens gate was the call. They eventually all killed themselves. They all committed suicide.

But there is an amazing part of the heaven skate called where at one point at one point in their um in their cultish behavior, they believe that there is a spaceship that was going to come save them, come down. They could all board the spaceship. Everyone else on earth was gona die, but they would be saved.

They're Whiten for the space ship to come, and they go to a store and buy a telescope so they can see the spaceship coming in. They go out point up to the night sky looking for the spaceship. Don't see anything.

No spaceship. They bring the telescope back to the store where they bought IT, and they said, this telescope is clearly broken. IT doesn't work.

And the store owner says, like, what do what happens that looks like the words to me. And the hevens gay guy says, IT doesn't work because IT doesn't show the spaceship. So IT clearly doesn't work that the spaceship is obviously coming, but I can't see IT, so the telescope is obviously broken.

Like when you firmly believe whatever cannot bullshit that you're gonna believe any evidence that's gonna come that to show you that you're wrong can easily just be purely dismissed. And that's like a humorous and this kind of a sad extreme example. But virtually everyone falls four of this in some way.

We're like if you believe x, then evidence that x is not true can easily just be pushed away in a second. You see this a lot in the economy. We're like if you are a pessimist and you like there's gonna a recession, we're in a recession and then G, D, P, data comes out, you know, like it's actually pretty strong, by the way, that happened this morning. So me, the personal will be like, well, you ve got to dig into the number ers and see, like you can easily spend anything you want in order to justify the decision that you already pessimists .

to be right and optimists get to be rich.

I think that's that's biology, right? There's also a thing where a lot of economic pessimists, pundits, they can be wrong forever, and they're never analyzed for being wrong because they're giving somebody a product that they really want. A lot of what IT is, is I think at its core, I think there are a lot of people in the economy who are feel inadequate about their own position in the economy, and they literally fanatic ze about other people suffer economy transfer .

of wealth from the people who have to. The people literally fancies .

about a stock market crash because of other people got poor, they would feel Better about their own situation. I think that is why economic pessimism in the ponder tary space is so like when IT comes out, people like, yes, that's what I want, tell me the economy and I hell makes me feel Better about their own situation.

Now you get IT, nothing is more persuasive. And what you've experienced first hand.

I read the thing. This was a pretty common that in military boot camps, this was during worldwind chi. And I think that applies IT to any era. There will be so many soldiers who, after book camp, will be filled with bravo and they'd be like, i'm going to go get those notes like when I get out there, i'm going to come guns blaze and like, watch out here we come and in the moment they are put on the front lines and a bullet wishes over their head, their horrified out of their lines. Theyve been some studies that showed in there are very controversial that whether this is actually true, that only a small fraction of the soldiers .

on the front line pull the trigger.

so many of them. And who's to say that would not be near you either?

I can't remember what it's called. Does A A particular type of firing that it's like non mortal firing or something like that. So they would do IT, but they'd fire just in the air.

in the air because they could not end over the top. I do not. This is not a criticism in the slides that even when you're facing a nazi soldier, japan's soldier, whatever would be to stick your gun, adam, and pull the trigger, you just say, I don't have IT in me.

I can do that. I does not. I think there's a very good chance that I maybe would fall that situation.

too. So this is one of the interesting against incentives. Going back to one of the lessons we learned about daily run of war, yes, IT would be hard, especially if you had gone through the training.

But then you go through the training, which is basically trying to remove the type of thinking and just put you in type one, like you see enemy bank. You see enemy bank like it's not person, it's response, right? Trying to drag IT out of that deliberate thinking and into that responsive thinking, but kind of like the ever escalators ladder of nuclear weapons that we're talking about before.

If my friend that i've been through boot camp with just get shot and either dead or injured, that's gonna pretty motivating for me to think. First off, i'm in that kind of a danger and it's either them on me. And secondly, fuck you, you just shot my friend.

yeah. So you get this almost. I would guess if you could track this, if you could study this appropriately. I bet that you will find the a lethality and rate of firing of soldiers on the front lines will probably follow A U shape curve. Yeah, there will not be some. Then people will begin to die, threat will begin to increase, people will begin to fire more and more more. And then I will .

tail off on the other. Maybe you're not firing to kill the enemy. You're trying to save yourself.

It's just like you're in a situation where it's like it's either you or me. And i'm not that this is not about like the strategy of what we're doing. This is just a peer survival mechanism right now.

But I think I think that the broader point is like you do not know how you're gonna respond to a situation to you ve experience first hand and the military is an extreme example. But this is true for, like barry, markets in the stock market, so common for people to say if the stock market fell fifty percent, I would do that as an opportunity. I would back up the truck and buy more.

And then IT actually happens and they're like of the socks. I'm terrified. I don't want anything to do with this like way easier to quite warm buffer. Then IT is is to actually take those actions in the heaven moment.

A lot of this is because if I were to say, how would you feel the stock market fell fifty percent by and large, you imagine a world in which everything is the same as IT is today, except stocks or fifty percent cheaper yeah. And in that world you I go, it's great to an opportunity. But the reason the market might fall fifty percent is because it's A S A pandemic.

There's a terrace attack. And in that situation, you're like, how would you feel if the market fell fifty percent? Because it's the day after september eleventh and everyone on TV says there are more attacks coming. They're are going to impact you in that situation. You might be like that's not such an opportunity anymore.

That's always what happens. Time horizons saying I in IT for the long run is a bit like standing at the base of mount everest is pointing to the top and saying that's where i'm heading. Well, that's nice.

Now comes to test. You see this so often of like particularly investing, but this happens in a lot of worries in life where people are like i'm a long term and i'm for the long term, i'm a long term investor. You like great, that's a good mindset, but the long term is just a collection of short terms, and you need to experience all like all of those short terms.

So a long term investor does not get to ignore the short term volatility, the short term recessions, the short term barer ks. You have to experience and endure all of those. So I think in investing very often saying that you are long term is a cop out to saying I I don't need to to to like manage my behavior in my expectations over the next twelve, twenty four, thirty six months.

When you do a lot of this, two is like maybe you. The investor, the fun manager is a long term investor. But are your clients? Is your spouse? Are they going to a put up with having a shit year? Maybe you're willing to do IT, but is your business partner willing to do IT like saying your long term is very different than actually being a long term person?

Um how can people make the long run easier if there's so many you are missed the compounding right? If there are so many games to be accrued by playing long term games with long term people and long term investments and peeing into the S. M. P, and not being that first about what happens and looking at signal, not noise and all the rest of IT, how can people improve that long term? M, and one of things like .

one of ways i've suddenly changed how I think about investing in last couple years is the a bigger realization of how much of successful investing is. Nature, nurture, leading words. The nature side, I think some people are just wired to get IT, and some people are not.

Charlie monger made this point where he says when Young people learn about investing, they either understand that instantly or never at all. Is one of those two. I think that's a little too black and White, but I think he's directly correct that some people does get IT.

You and I were talking on the last night about like what is the genetic soup that you're born with? You have no control over IT, but yours is different minds, different from everybodies. And so I think some people are much more able to think long term than others. I'll tell you a little story.

My brother in law is a social worker, works with very impoverish illy homeless families, children who are terrible situations and he was talking to this family at one point um a very impowering family and he said something along the lines of saving your money for the next week, the next month and they laugh at them and they said, oh, you're a future banker and he said he said, you're a future thank you they said, you got to understand when you're in our situation, you do not have a time horizon that exists beyond four hours. There's notice thing as next week, we don't know where we're going to get dinner tonight. There's no next week.

We're just like the our field of vision is twenty four hours, and I think that's an extreme example. But there's a lot of people like that of like when if you say, like all you should invest for the next thirty years, they literally cannot envision what next month is gone to look like. So why would like next thirty years is completely in utero theoretical for them?

Who was that actress? Was IT like maga robbie or someone that said we're going to be married for over I can to the diva or one .

that does SHE got where he says like that there's no world in which we're ever going to a get divorce and SHE gets divorce thirty days later. So I I think it's it's you know people there's a thing in psychology called the end of history illusion where people are very aware of how much they've changed in the past, but they completely miss underestimate with how much are going to change in the future.

So if you compare Chris today to eighteen year old Chris, you like, oh completely different. But if I said who is Chris gonna at age sixty, most of time you going to be like, oh, probably very somewhere to who you are today. And that's not true.

It's never true for anyone. Chris sixty is going to be maybe as different as the difference between you and eighty and roll, Chris, but it's very hard to come to terms with that. Most people think they're to be the same person for the rest of their life, even if they know how much they've changed in the past.

So it's easy to say i'm going to be married to this person forever. I'm going to be a long term investor forever. Things change like what you want out of life changes. Your wisdom changes. Your incentives change to push you to do something different.

The converse is true when IT comes to personal growth as well, that if you ask yourself, what would you tell you from ten years ago, you could go back in time and write them a tweet or send them attacks to whatever? What are the things that you would tell them to start doing and stop doing and focus on and let go of? A lot of the time people use that as a it's a subber brag to humble brag about. These are the things that used to be a Melody for me, but now i've transcended yeah, I would wager that at least seventy percent of the things that you tenuous from no would tell you today are things that you today would you tell would be things that you would tell you.

tell you years ago what? Just like a wish or fantasy of, like, I wish, I wish I knew this ten years ago. But Frankly, like, do I actually even noted today? I wish I could accept this truth today. I Frankly solve a problem with that.

You are your patterns and they continue to repeat yeah and you you are the common denominator between all of the different situations that you end up in is IT that every single goal is a bitter, spiteful bitch that always wants to try and ruin your reputation of the reset. So well, what do all of those girls have in common with each other? The only thing that they haven't .

common with each other they knew you.

is you you're the only .

common to .

dominate together yeah I that you choose them or you created them or you molded them or you did something.

but it's fucking you something like if you meet one assess, if you meet one assess, if you meet an assess every day, the asso everyone you meet is a jerk like this should be telling .

you something trying too hard. There were no points awarded for difficulty.

I think it's it's true like in almost any endeavor, there's gonna be a very small handful of variables that drive the majority of your returns. True and business careers, investing relationships and mean, it's definitely true in investing in particular that in in many endeavors in life, if you want to get Better at at golf, if you should practice a lot, if you want to get Better at basketball, should practice a lot.

If you want to get Better at investing, you should do less. You should not, you should not practice more. You should not try harder. You should not pull more levels or levels or turn more jobs. You should do left, there are no points awarded for difficulty and IT is so counterintuitive in investing that the smartest people went to the best schools with the best education are the ones who try the hardest and very often earn the lowest returns. Uh there is a thing um not a read recently that as recently as a hundred years ago the people who in society who had the worst medical care with the richest people, the Richard got .

first with that too .

because they they could afford all the miracle cares sold by quack doctors there were actually just going to poison and I think there is a perfect coral ary with financial advice that some of the people who get the worst financial advice are the Richie's people who can afford the highest Price consultation and advisors that tell them to justify their fee to turn the jobs and pull the levers and fill with the system as much as you can to earn higher returns. Those the people who ninety five percent of them or more are gonna perform the simple basic index.

One of my favourite Lorry, suddenly stories, was a terminal five, london he threw. You would ve been through IT if you've ever flown international connecting through land. You go in and you go up this escalator set of says after that, like one block checking everybody's ticket, it's insane.

And then you go upstairs and you're at the top gang level of terminal five and you're in a snake q and you need to get rejected to go through security. And they were getting complaints. There were too many complaints.

The amount of time that people were waiting, they were missing flights. They just can deal IT. So as always, the humans of this situation looked at like an engineering problem, the optimization problem. Let's get, retrain the staff to be quicker.

Can we fit more lanes in? Can we change the machines? Es, so that the machines move more quickly? Can we do all the rest, this stuff? And either or I want a rory's friend stepped in, said, before you drop fifty mail on this, you know, two football pitch sized area of security machines, just, lets see if we can find a behavioural solution to this, ensuring if they did, and they just put signs along the cute, that said, fifty minutes from this point, thirty minutes from this point, forty five years from this point, and all of the signs were five minutes longer than the wait time.

Make IT easier for people, because just the expectation.

And I, I an, it's forty minutes. You supposed to be forty five.

This is the biggest thing, was oppos. When I came out to the shoe company, they always did intention when you a major order, they would say will deliver by by friday. And he was always just a bold face light.

They knew they're going to get to you by tuesday, that tuesday. So they then when I came on tuesday, you're like, this is amazing, I thought was gone to come friday and they always didn't intentionally. Amazon does as well.

I know this because i've been so uh, in the mixing with that with books sales lot times on amazon, they will intentionally quote you a ship date that is way longer than they know they can get IT to because they're always just managing your expectations. And then when you get IT earlier, you stoked and almost never IT will happens the once in a while but very rarely. Well, amazon quote you a shipment and then IT comes later than that because they know even if it's one day late, you live IT. If it's two days early, you they are customer for life.

What are the areas in which trying harder or touching IT more like with IT, with investing touch IT less is kind of the the rule. Yes, don't stop fucking with the right and eighteen fifties person at the doctor to stop fucking with IT.

I think, I think if the endeavor is technical, then you need to mess with IT more. Tiger woods can hit a ball Better than you and I because he knows how to angle is shoulder and swiveller hips. And whatever way that lets them do IT that you and I can invest in is behavioral.

So there's no there's very like what really matters is like, can you leave IT alone? You have the patients to live IT alone. Do you have the fortitude to endure the volatility? It's pure behavioral.

It's not A. Technical thing to do. So I think whenever the endeavor is technically, you need to try harder. When it's behavioral, you need to try this. I think in many ways, relationships or behavior as well. And if you wake up every morning, you're like, I need to make a list of all the ways that I can become a Better boy from a Better husband like you're probably trying too hard. It's probably just a behavior just like can we just focus on like respect, admiration, like very simple behavioral things that are actually going to move in the needle, not like a list of the best presence of my wife is going to want for Christmas. That's trying too hard.

Why are we so seduced by complexity? What makes you so attractive to us?

I think very often it's the only signal that the person is trying to help you. The consult in the financial advisor knows what they are doing and ever like. It's very clear in investing in finance that simple works like low cost index fun bian hold IT works, but you as a financial visor, you can't make a living thing.

You can't charge people a high fee for doing that. If you charge a high fee that you need to do to run your business, you have to be able to say, here's this black boxes I created and it's worth a fee because it's so complicated. And this is why I think a lot of people and find it's to use jargon and is completely unnecessary.

And a lot of academics use jargon is completely unnecessary because simplicity is so anonymous in people's heads with you don't know you're talking about um and it's pretty rather you have someone like warm buffer, let's say, who charge talks very simply is very simple and when he explains what he does and and is crazy successful as well, it's usually like the lawyer, the financial advice using sometimes the doctor is, uh, and I think it's innocent. They're y're not, you know trying to pull the wall of your eyes. It's an innocent way they're doing IT, but they're trying to justify their education, their intelligence and their .

fee with complexity and simplest is in distinguish from cluley ness.

Mean, it's very rare that you would have a health care company that it's like, why do you eat some vegetables and go for a run like they want to make IT more complicated and sometimes the complexity is necessary. Not saying it's it's always bad, but the difference between giving advice that is good and works and running in advice business can be a mile part.

Things that you don't understand create a mistake around people who do understand that as well.

Yes, if I convince you that I know something that is so complicated that you can even understand a single word of IT, you're going to look at me or look .

at whoever IT isn't like.

oh god, acronis. yes. I experienced first and many years ago went a family member of mine. I accompanied her to uh a meeting with her financial sor and family members does not have a background in finance and he sits down and the financial hour i'm sitting with her and the financial visor mentioned something about the yellow curve and the family member just not ahead and move along and i'm thinking myself, he does not note the hold curve is he is no clue with the health curve is but not fault her home is not a simple topic but the financial advisor, I think maybe innocently too.

I will probably thought himself like if I talk about the youth curve, i'll look really smart like I know what i'm talking about even if the person on the other end but the person on the other end is like, oh, he said something I don't know. That's why I pay the guy. He knows things that I don't. And so it's like an intentional confusion.

It's not reliable signal of effort as well that we were talking about before. It's the person whose slack response time is always under fifteen minutes. He happens to be online at three in the morning who always gets the but that's not always the highest point of contribution fact. I can get in the way of being the highest point of contribution.

Yeah mean, if you you have like a lump in your body and you're like all this might be cancer and you go in and get IT actually to get IT in M R. And whatever. And the radiologist goes is slacking his chair.

He looks at the actually because you find you here, but you trust that guy. I think what you wanna, someone who's going to spend an hour like with all of these tools, measuring things to make IT look like, you really put some effort into this. So likes very often, effort is the only measured that we have, complexity, the only measured that we have say, like, this person knows .

what you're doing, wounds heal, scars last. What have you experience that I haven't that makes you believe what you do? And what would I think about the world like you do if I experienced what you have?

I think it's so often in finance and politics and a lot of areas in life where people who are debating a topic about what you should do with your money or who's the best politician, they're not actually debating there. People with different rist tolerances, different time rise in different experience is talking over each other.

So if you say making this up tesla is a good investment, and I say, no, it's not we might not actually be debating with each other and maybe that you have a high highest talLance, and I do. And so I think when you realize that, like, we're all just mirrors of the experiences that we've had in life, and i've experience something very differently than you have, even if were both White men roughly the same age. You grew up in the U.

K. I grew up in california. I experienced things that you didn't advice versa and even if we're very similar and so many regards, you know things about how the world works that I don't and I advice person and true for every single person.

And so like the idea that um if I I think it's a really good question to ask, who would I be and what would I believe if I were born to different parents, if I was born in a different generation, if I was born in a different country? And it's impossible to answer those questions. You don't know for any precision, but it's important to realize that if you are not born where when, into whom you are actually born to, you would be at a completely uta different person.

And you see this a lot. Um one thing is really interesting is that uh the german stock market um is actually performed like very well since the world, what actually done very well. But a lot of german an investors want absolutely nothing to do with IT.

And and you compare that to american investors, we're like stocks, stocks. Stocks is like they can get enough of the stock market. And a lot of why that is, is because, well, what happened to the german stock market in one hundred and forty days, once to zero, you completely wiped out.

And the people's grandparents, or their parents who experience that like that, left a social scar that was even passed down to the generations. So if you look at a german investor compared to an american investor, you might be like, man, the american investor is like, man, they're all in this. Like these guys are gone in for they're going to become rich and you guys are hanging out bonds like what are you doing and just because they experience something that you didn't advice versa.

Another example, australia before of IT went almost thirty years with no recessions, like a full generation, never experiencing any economic decline. But that was because china had so much demand for, like the iron, or that they were giving up. But because of that, in the united states during that period, we had three recessions, two of which were like devastating and reshaped society.

So to an american, a recession was a very real thing. To an australian, IT was like a theoretical possibility. And the australians, of course, are just as smart as us.

They're the same textbooks, the same data, but they viewed economic risk completely differently then we did. And I think you could say in that moment where the australians are oblivious to recession risk, or are americans overly paranoid about IT, there's no one right answer. All you can say is like we've experienced very different world. We have very different takes on life.

What's the difference between wounds and scars?

Uh, I think a lot of IT is wounds heal. And I am medical's gy, like if you go to uh, the pentagon in washington, D C, there is no sign of september eleven of the plane that hit the building. They rebuilt IT.

There's not a single scarf anywhere. But if you go to reagan airport one mile away, the the wounds of partly, the scars of nine eleven are everywhere. Take off your shoes, take your toothpaste at your bed, take your belt off going through security. All of that is A A scar from nine eleven.

So a lot times, like the physical damage of a recession or a pandemic or whatever, IT is s very quickly um but the psychological trauma is gone to leave a scar forever you said us at the end of world war I, I like europe was rebuilt very quickly. The physical scars of the war were gone in twenty years or so. But the psychological trauma, the people who experienced that will never go away.

And this was measured. And and the children who grew up in germany and the U. K. And france drink what war two.

What was the psychological trauma that stayed with them through adult who was very measurable compared to the children who did, to say, in the united states, where there was not physical destruction. So even if the physical destruction is rebuilt, the scars last forever. And I think it's just the acknowledgement that we all have scarce in one way or another from we've experience in life. And my scarves are very different from.

I had a conversation with a history of existential risk. So he was looking at how scientists knowledge had progressed sed over time, and how humanity is awareness of our ability to go extinct through or not, through our own hands, developed. And he told me this term called conceptual inertia, which is you even bringing up in the same as ever way you say there are murmurings among some of the scientists that may be the earth isn't at the center of the solar system, but most of them are a little bit scared to do IT.

But even after IT was proven and accepted, and people were stopped being burned at the stake by the church for suggesting that this was the case, IT still took like two generations that for that to actually infuse into the scientific disco. yeah. why? Well, because of conceptual inertia, because assumptions about the world move very slowly. Cultures is able to sort of adapt quite quickly, but when it's a foundational thing, IT takes a very long time.

You also have to wait for the generation who expected IT to die. Yes, and it's a constant. It's like that the max plaint science does not progressed by new discoveries. IT progresses when the old generation who used to believe something eventually dies and the new generation who didn't come up with the old dogma is now in charge.

You waited a little while ago that there are thirteen divorces among the ten richest men in the world. Seven of the top ten have been divorced at least once. What's the lesson to learn from them?

One is a very small sample size. This is not like like hard course statistics, but a variable that is so important to your lifetime happiness, like whether or not you get divorced. Among the group of people who are so admired by society, I wish I could be one of the rich of people in the world is always been so fascinating to me.

And to me, this is just like the scene versus on scene, or what your pan attention to. When you look at one of the richest men in the world, you look at their net worth, and you fantasize about what would be like to have that much money, to have planes and yachts and mansions, what you don't see for a lot of those people, and I get it's too firm to say this is pure cause and effect. But all those people were so focused on their career, a singular focus for their entire life, seven days a week for decades on end of of of of attention on their business, that came purely, directly at the cost of their personal life, the relationships with their spouses, with their children, with their friends, whoever they would be. And so this is another of, like, careful what you wish for. And that there is a cost of everything that's so easy to ignore.

the most valuable personal finance asset is not needing to impress anyone.

means so much of spending in our society after basic needs are met and after things that actually impact you. R R, mat is spending money to show other people how much money that you have, most of who are strangers who are not even paying attention to you. To begin with, I heard this, this structure that that was so good, IT was a high.

And toyota is a nicer car than an entry. Little bmw. Or you could also say a sweat at the higher is a nicer room than a basic of room at the four seasons.

There was very few ways that you could spin this. And I think a lot of what IT is, is the high. And toyota is filled with things that are good for you, confess seats, good sounds to me, or whatever is the entry level.

Bmw is purely bragging rights. You're paying for the emblem. M, that's all you're paying for, to show other people, like, look at me. Look how great I am. If you can just dispose of that in your life with the need to impress strangers outside of your core, family, friends, coworkers, whoever you might be, who, like, want you to be a good person, if you can dispose of that, I think that is a financial asset on your baLance sheet that can literally worth millions of doors to just lacking the need to impress strangers.

I think that there is a genetic set point for materialism. Yeah, everything's genetically heritable from my parents. Around about fifty percent of everything we are psychologically is inherited from my parents.

And whatever combination of the mexico big five personality traits, country to materialism, keeping up with the Jones, is, how much do I believe that love is shown through gifts? How much do I think that it's important for me to give and receive gift? It's a, and I would one hundred percent agree with you that the people for whom your next book is written and the people for whom die with zero by bill perkins is written, yes, in many ways have different chAllenges that they need to get over the scarcity mindset and a concern in a discomfort about upgrading spending with their lifestyle, a fear about getting IT wrong and all the rest of IT.

But you can also see is a huge competitive advantage yeah, because the total amount of money that you need to meet the standard of living that you want to i'll never forget this stood one of the early podcast I did with use of and journey, and we were talking I deliver to bring this back up to them because their businesses like. Thirty times is bigger than IT was back down or something like that. They making way, way, way, way, way more money.

And I remember one of the guys talking about like some arbitrary number like, you know, after hundred and fifty grand, I got really know, what do I do with that? Like i'm going to do? Buy a nice of coffee.

And IT was that sentence, what am am I going to do? Buy a nice coffee? Yeah, that's good. Just really hit IT home. I was like, what you're doing is, and we talked about this last night, you're also talking about IT with the with the bw thing, the different to flying coach and flying .

business is fucked in my .

is absolutely gentle IT double the cost. Maybe if you book IT in advances something .

of five times nicer, an international flight.

no comparison. But the difference to business, and first is maybe another three times in the cost. But yeah, it's the fact that in business, people have to work past you to get to economy. In first, you don't .

even see them.

I got to telling this, a Michael east is most recent book, scary minds, the effect. Did you see that thing in there where a planes in which the people going to economy have to walk through business have a nine times increase in passenger a like complaints and and engur such a distinct like .

they call like the the the the poverty parade of like when coaches like water and I think I think there some comedian I forget who I was but like, uh, it's like when the people are walking past people in first class, the first class people like, man, fuck, you couldn't work harder. You couldn't sit up here. And it's like, it's such like a like a pure stratification of in society.

I had this interesting realization reason to my father in law. My wise father grew up an object poverty. He was homeless for some part of his childhood and then became a very successful businessmen. When my wife was seventeen and thinking about going to college, her dad, who was by then a successful businessman, said, pick the most expensive school you can find. And to him, he didn't matter about the education.

What mattered was showing himself what he had overcome in life, that to him going from homeless to being able to send his daughter to whatever the most expensive school the country was, you don't know what I was. He didn't care what I was. That to him meant so much to him as a symbol what he had overcome. I think a lot of spending is like that. It's a symbol to yourself of, like, I used to be this.

But now on this, I think that apart from the people who genuinely watches, that's what what watches are to people IT IT is a very austen's tious display of signal. It's just A A super, super strong signal. Um talib, and I think you will surface this talib quote.

The world is split between those who don't know how to start making money and those who don't know when to stop. So good, phenomenal framing, but I think that there is an equivalent twist when IT comes to people who do personal growth. The world is split between people who don't know how to change their lives and the people .

who don't know when to stop. They applies to so many things yeah was going to say had a good one. I'll take up .

valuable first. Personal finance asset is not needing to impress anyone.

Now had a great spending thing that was gonna say.

gan, I appreciate the hell of human episode five or six or something. It's honestly, I said IT on the first episode, people need to go one by same as ever. I love IT as a book.

I think it's phone enon it's super easy read. You know it's what's the audible seven hours, six hours, something like less and a half four and half five hours, super easy read chunked up in the individual a chapters. We gone through lots of the stuff today.

This time, more stories. Everyone needs to go collect that. And why can they go? Where else can they keep up to date with the stuff?

Most of where I am is is twitter. I'm always going to call twitter, never x most of that where I am miss twitter, my handles first last name Morgan sga.

appreciate. great.