What It Takes To Go From $0 To MILLIONAIRE In 3 Years - Here's What To Do... | Tom Bilyeu

all right so tom my question to you is if i was starting from scratch and i have zero dollars in your opinion what will it take for me to get rich in three years whoa okay getting rich in three years that is a very aggressive timeline the only way you're gonna get rich in three years and we should probably define that i'll say seven figures or higher seem like a reasonable baseline okay so the only way that you're gonna get that kind of wealth is and i'm assuming that you're not able to invest something or buy something like that so we're literally starting at scratch so you're going to have to create a company create something that generates a lot of value typically that's going to be a company so you're going to create a company that meets a very well-known need that has not yet been serviced by a product that is relatively easy to get across the finish line and into the marketplace it needs to be something that is going to resonate with social media and it needs to be something that doesn't cost a lot of money to get started so either you're gonna layer on way better marketing so if somebody has a solution to a well-known problem they don't know how to market it you can go and partner and say hey look i understand marketing i'm gonna be able to get this out there or if you have an information product that can be associated with a known problem that you uniquely can solve i have to know a little bit about your background so if there's an element to uh working in the music industry to becoming a professional singer improving your voice or something like that that you really have a beat on that you know a lot of people are interested in that you could turn to a course for instance that people would really resonate with um that could be a great one the reason that i keep coming back to information products is you're looking for something that doesn't cost money up front if you're gonna like take quest nutrition for instance when we were building that there was still a substantive amount of investment that we had to make even just buying a bunch of protein powder was expensive buying the liquid fiber you have to buy them 55 gallon drums so it's like there were still thousands of dollars that we had to put in in the beginning and so to find something that really takes a little to no money down you're either going to be doing an information product or you're going to be doing something that you can make yourself that doesn't have expensive uh constituent parts or you're going to be finding something that's already made that the person doesn't understand marketing so it's really about what is the bit of value that you're going to be able to bring to that that's unique that somebody else can't easily replicate that the world is going to know instantly that they need and you just have to make them aware of it because three years is fast and so quest for instance depending on what you mean by rich so for instance three years into quest we had a billion dollar brand but i was i didn't have a billion dollars that i could put in my pocket so i was still driving i think by then i finally upgraded my car but for the first couple years of that i was still in a beater car even though it's worth a lot of money and so if you need the money to be in your pocket that's probably going to take a fair amount of time longer and if i can take a minute to get everybody watching to understand the difference between net worth and income that would be really valuable so if you don't mind generating a million dollars plus in net worth now we're back to you just have to build something that other people say that they want to have the actual money in your bank account you have to build worth and something that people say that they want and then you have to sell that thing so it's very rare that you're going to get rich off of the operations of your business you get rich by building a company where somebody's looking at that and it's going to get complicated fast so ask follow questions so you're either going to build something that's going to ipo the initial public offering and what you're saying is hey i built this really cool thing it makes a lot of money or people think it's going to make a lot of money and by going to the sec they'll actually let me fractionate my company break it into a bunch of pieces known as shares and i'm going to sell some of those shares on the open market the public markets and then people can buy those shares and so that's the way that you're going to be able to put that money in your pocket you're literally selling a piece of the company that you own otherwise you can sell a minority controlling or total interest in the company to private equity venture firms something like that but usually when people do that they're not doing it for founder liquidity they're doing it because they expect you to invest the money back into growing the company which is why ipos get people really excited because some of the shares you will sell as part of the company treasury generates operating capital some of the shares will be yours personally that you get for being a founder and so you can use that as a liquidity event so now you actually have that money in your pocket but most people in three years it's going to be tough you could get to an ipo stage but that's going to be a really rare moment that again follows the equation of you're solving a problem that people already know exists in a very dynamic way that people are basically falling over themselves to give you money for and you've actually um created a company that can be sold which is we could do a two-hour class just on what that means so it's interesting you ask that question i really want to give you a hot sexy take and just be like oh go do this but the reality is to to have a seven-figure exit that fast would be hyper rare it does happen and i would rather get people thinking about how do i build a business that's doing a million dollars in revenue all the following things apply but then it's really about reinvesting every dollar that you're getting back into the company to grow and scale but again it's a problem with a killer solution that you're doing in a unique way that didn't require startup capital yeah and so going off of that who would be the i guess the top three people that i should first hire to take on this this event you should hire nobody you should be going after people that are going to partner with you so that you're not paying salaries because the thing that eats companies alive is overhead so when you're starting if your goal is like look i've got no money and i'm trying to build a million dollars in value in the next three years now you want to be focused on what is it that i'm good at so what's the problem i'm solving who's my audience who am i making this for and what skills are missing from myself right so even if you're doing an info product you're going to need maybe a marketer you're going to need a tech person that can help you package it up you're going to need customer service you're going to need somebody to run the day-to-day operation so there's a lot of things that are going to have to be done but you don't necessarily have to pay somebody to do it and so the mistake that i see entrepreneurs make is that they're imagining oh my god it's going to be worth a hundred million dollars why if i give you you know even 10 percent of my company that's 10 million dollars why would i ever do that because you'll never get to 100 million dollars if you don't have other people so to give you an idea i've never once done a company where i didn't have a partner ever so i highly encourage people obviously and i've become fantastically wealthy so i highly encourage people to bring on partners that you trust it's it is literally like choosing a romantic partner that you're going to be married to for a long time and it's going to be it's like having a spouse and kids right but you don't just have one two or three kids you have 10 20 30 kids and all the stresses of running a business so be very thoughtful about who you partner with but bring out a partner who's strong where you are weak and then you guys are going to be able to really multiply your efforts and you can work things into it like if they end up flaking out if they quit that the shares then revert back to the treasury so it's what's often referred to as phantom shares so you get what we do here at impact theory so we give phantom shares and we say hey as long as you're an employee in good standing you own that much of the company if we exit boom you get it but if you leave or get fired for any reason the shares revert back to the treasury because what we're trying to incentivize is performance we want people that are in here killing it doing it long term versus the sort of traditional tech vc-backed company that knows they're going to exit in three to five years and so that's a very different mode of being that's raising a lot of capital that's having the idea that sounds amazing on paper it's knowing that you're part of a portfolio so let's say they invest in 10 companies you're only expecting one to hit so that means nine of them they know are just not going to work out nobody can really see the future so i would say especially for beginning entrepreneurs you have partners that you don't have to pay that are going to work as hard as you and they're good at something you're not awesome thank you to follow up on that do you need an entrepreneurial mindset to become wealthy no doubt i mean you can win the lottery or have your parents give you money that certainly is possible i don't think you're ever going to get what i would call wealthy in the short term without an entrepreneurial mindset now in the long term you can invest very traditionally and generate incredible wealth it's really pretty startling what compounding interest looks like over time and if you're willing to sit in the stock market which returns an average percent of seven percent over inflation so being in the stock market for 30 40 50 years really is pretty amazing and you double your capital every seven years so you put in you know if you've got 50 000 to begin with seven years later you've got a hundred thousand dollars seven years after that you've got two hundred thousand dollars seven years after that you've got four hundred thousand so it gets big number pretty fast right and you're going from one million to two million two million to four million but you've got to be in it 50 years right so you've got to have a lot of those seven year cycles and that quite frankly for the vast majority of humanity is exactly what you should do you're effectively if you do the right way do not try to pick stocks okay don't try to pick stocks right nobody beats the people like redalia right he's got hundreds of millions of dollars in ai 1800 employees that all they do is that for a living and they know how to make arbitrage on no seconds if you're not going to play at that level and you're basing your decisions on things you hear about on twitter it's already too late by the time that makes its way out so that's where people make a mistake they want to do it sexy they want to feel like gambling they're trying to treat an nft like an investment vehicle all mistakes you want an index fund the reason you want an index fund is index funds are you're betting on on a sector of the entire economy so you're not trying to pick a winner it's kind of like saying i'm going to horse track all i'm going to bet on is that a horse wins the race a horse comes in second place a horse comes there doesn't matter which i just know that they tend to work out on this distribution so i'm going to invest in something like the s p 500 which is a list of the 500 strongest is probably right when you think about the 500 strongest companies in the economy if one of them ceases to meet that criteria they fall off stop being a part of that portfolio anyone comes on and becomes part of that portfolio so it is not what they call actively managed so nobody's trying to buy a quick stock they just it meets this criteria or it doesn't as you get fancier you can invest in more index funds so maybe you want a growth index or an index out of china or developing economies whatever and you can start to broaden out like that but still index still passive still long-term hold it's the only reliable way historically to buy low and sell high which sounds stupid but is the hardest thing to do in investing the easy thing and what most people actually do is buy high and sell low now the question becomes if we all know that's dumb who would ever do that it's because of the emotion you buy high because you think it's actually low it's euphoric numbers gonna go up forever even though it's a really high number compared to where it was a year ago it couldn't possibly go down come on everybody knows it's only up only up it's different this time and so people convince themselves that this time it really is different you live through the crypto euphoria you know exactly what it feels like it feels good it feels good it was so fun i was having a ball now thankfully i don't trust myself so i was like i'm gonna invest this much and that's it and no more and even though when i hit that number i was very sad because i want to keep investing keep investing keep investing i was like no i know better than that and so we stopped and then of course numbers come down now the problem is they bought on the way up euphoria felt good number go up forever and then as it starts to come down they panic and it's like whoa that sense of like it couldn't possibly go down you realize isn't true it is going down and now you're terrified that you're never going to get your money back and if you got yourself in too deep and you don't have money to live on you start going oh damn like to pay my bills i'm gonna have to get money out so now you've effectively got a life gun at your head that's telling you to live your life you're gonna have to cash out even though that would have been worth ten thousand dollars you know three weeks ago it's now only worth fifteen hundred but you need the money so now you lock in your loss by selling low you buy high you sell low that's what most people do and they do it all for emotion on that note uh so if there's certain things about understanding your emotions what are certain things that people need to understand about money to actually attract it into their life or to build it without wealth what do you think are those key things that you need to understand okay so you don't attract money the only thing you can hope to do with your mindset is to allow yourself to be optimistic enough to do the right things to move forward what i mean by that is it's what i call the only belief that matters the only belief that matters is that if i put time and energy into getting good at something i actually will get good at that thing so you do need to have that mindset so napoleon hill in the book um think and grow rich he says like page 45 he kept saying i've already told you the secret to this book on every page and he's like if you don't get it by now you're never gonna get it i was like what has he said on every page and i was like the only thing that he's repeated on every page is that if i think i can i can and if i think i can't i can't i was like oh my god that's so true if i think i can then i'm gonna act in accordance and i'm going to go learn and do the things and ask other people to invest i'm actually gonna take money and invest it i'm gonna figure it out because i think i can but if i think i can't i'm not gonna read the books i'm not even gonna try because i already believe that it's not gonna work and so you do have to get your mind right in that way so that you have that belief so that you are moving forward so that you are learning but make no mistake if you have the best mindset in the world you say a thousand times a day that you are i already am a millionaire i'm attracting money into my life it isn't going to work and the reason it's not going to work because that's not how value is created that's not how money arrives right so if that didn't work there'd be a lot more rich people so it really comes down to do you going back to the first question do you do the things that you need to do to generate money which then enough of that sacks and becomes quote-unquote wealth and to do that you have to identify a problem solve it and solve it in a way that people get right away like oh damn you solve my problem and now i would rather have that solution than the money that i have in my hand and if you fail to do that you're never gonna get anywhere and so unfortunately a lot of people think that thinking about something moves me forward because it really does feel good it puts you in an expansive mindset and makes you feel like you've made progress but the reality is you haven't and this is why the most like hardcore manifestors who are like this is all you have to do none of them are on the forbes 500 it's just never gonna happen so you've got to get those gonna be people that are just diehard executors so how in your in your opinion would you say how can we get into a money mindset what is a money mindset to you i guess just you know how when we're for example me anyway growing up i was told you know whenever you have extra money save it put in the bank and if you can buy a house blah blah like very traditional but i'm learning especially just with all the resources that are out now that there are other ways to make i don't know to just invest your money in a more smarter way um and i would classify that as like a money mindset where i'm just smart with where i allocate my money let me use different words that i think are really going to help people it's not about a money mindset it's about mastering the game money is a game and it's played by extremely savvy people that know the rules and you don't know the rules and because you don't know the rules they get you to contribute to their wealth fund by buying the things that they want you to buy by investing in a way that they want you to invest like i remember so there's a whole thing which most people don't even know about called accredited investor so to buy something before it reaches the public market you have to be an accredited investor now i remember when i became an accredited investor which meant you had a net worth of over one million dollars so the day before that i couldn't invest in something private and the day after that i could and i was like why i'm not a better investor from the day before till now i know how to make money so fair enough being able to start a new company yes you should let me do that because i've proven that i can but you shouldn't be rewarding as an investor because they are entirely different skill sets and so i was a little offended on behalf of the rest of the world who do know about investing but don't have the money to qualify and so now those guys are stuck and so there are years and years and years where they're gonna have to go play in the public market game to build enough net worth that they can finally go be an accredited investor now why does it matter being an accredited investor means that you get what they call deal flow for the people that want the fancy words you get deal flow where people are coming up to you and they're saying hey i'm starting this company and especially if there's something about you so let's say people will come to me and say things like that because i have a platform and they know that if i talk about their company then that's going to be valuable to them so they'll ask me on their advisory board or whatever i'm going to give me shares in that company so if i wanted to buy some shares in that company they might come to me and say hey we're going to have an oversubscribed round so let's we're raising 50 million dollars it's going to be oversubscribed meaning we'll have people that want to put in more than 50 million dollars but hey tom we're coming to you because we know that you're savvy you know what you're doing we'd love you to um you know give us advice or whatever and the secret thing that they're not going to say is you also have a platform we hope you talk about us so it's like okay cool so now i get deal flow because i'm an accredited investor where i can invest in that but think about it take out influencer that may have a way bigger voice than i have socially they can't do that same thing and so that to me is crazy now there are other ways you're working out you become a partner and it's not like there aren't ways around it but in terms of being an accredited investor you can't do it now usually in the private rounds where the bulk of the meat is picked off the bone so people end up getting really wealthy are the ones the vcs that come in early when a company's still private they invest at a very low valuation then they spend three to five years trying to blow the company up even farther and then they exit and that's their whole thing is that the exit is often going public so all the value that they capture from the moment they do their investment to the moment that they exit that's all where the average person they'll never get to capture that value ever now they still have an incredibly powerful tool at their disposal which is now we've gone public and where does it go from there so they still get to capture all that value but is that remaining value is that an extra 20 percent an extra 2 000 who knows but what we do know is the person that invested here and exits you know at the same time the public investor exits they got a lot more juice from that so that is very frustrating to me that instead of it being knowledge-based it's based on how much money you have in your account which are trying to use a proxy for being savvy but i think it's a terrible proxy uh so people should be very thoughtful about that so getting away from the notion of having a money mindset and just really understanding the nature of the game so understand okay literally just listening to that part of the answer you now already know three or four different things about how the game works you might not have understood before going very deep about how the stock market works what like what's an index fund um what does it mean to do a put or a call options trading what is all that stuff what are futures what are commodities when you begin to learn all of that stuff then the magic happens and this is the thing the very nature of learning itself is the following when you understand something it makes a prediction and now you can test your prediction to see if you're right so you understand all of these things and you're like hey wait a second if all of these things are right it makes the following prediction and cool i'm gonna make a bet on that prediction now the market's either gonna reward you or slap you down so i'll walk you through a prediction that right now probably is about as controversial as it's ever gonna be and so we're gonna get to see if i'm right or not so i got introduced to the blockchain which allowed me to figure out oh now i understand what this technology does it takes a digital asset and gives it the properties of physical assets so this is utterly fascinating what most people don't understand why did gold become gold why did it become the gold standard right most people know that for a long time money was backed by gold but most people never stop to ask the question why the reason is for something called proof of work so however many billions of years ago stars exploded when they explode one of the elements that they shoot out into the universe is gold that gold then crashes into a forming planet and that gold chunks get locked into in the case of the earth into the crust right so you see it in the mountains and things like that so you can go and pick a mountain you can actually find gold that was an exploded star crazy right so first of all you have the work of the universe being done to formulate that element then you have the work of the person shipping it out and finding that thing so those are two very difficult things to do so if you have a piece of gold you know this was a star that exploded that's gonna be very hard to replicate and somebody had to go find it get it out of the ground whatever so we know that the supply of gold is never gonna balloon up too far it does balloon up which is another thing people don't know about which is inflation which people know that buzzword but they really understand what it is so that's how gold becomes gold it's scarce and it's valuable and it's extremely hard to replicate and it's very resilient so you can melt gold and then you can reform it again and there's no loss whatsoever gold doesn't mold uh it doesn't um get water damage right so there's all these properties that it has but it's heavy as hell so that's one of the things that's sort of a strike against it but this idea of proof of work so now you get people going okay wait a second if all gold is is proof that a star exploded that somebody found this in the ground and therefore is provably scarce what if i could perfect that because gold inflates at about two percent a year which doesn't sound like a lot it's a lot so that's inflating away so its value is constantly dropping due to inflation which we could get into a whole rabbit hole which i know george we want to about what psychopath called the bad thing inflation because it sounds awesome and what person called the good thing deflation it sounds bad but it's amazing it means your buying power goes up over time okay when something deflates which by the way economists hate and we could derail in the why but this is the game of money right see how many rabbit holes i keep going down so when you talk to somebody that really knows what they're talking about and they're like yo the currency in china i believe i understand this much i predict right my knowledge makes a prediction i predict it's gonna start deflating which means if i transfer my inflating u.s dollar it's gonna be worth less over time into a deflating currency in china that means it's gonna be worth more over time yo send my u.s dollars over into chinese yuan hold it there it's what they call arbitrage one dollar here gives me something over here and the values are going in opposite directions i'm actually making my wealth simply on that difference i didn't create anything new i just took the arbitrage of a deflating currency sorry i should be using this hand my deflating currency over i'm making this up i'm not saying china's actually deflating although the u.s actually is inflating uh but just example example not financial advisor either this is not financial advice uh so in this hypothetical example where the chinese currency is deflating it's actually increasing value so a deflationary asset isn't devaluing an inflationary asset is devaluing now some people say that that was done on purpose to create a mind virus that makes people think inflation is good when you start thinking about why would somebody ever want to trick the public into thinking that inflation is good and this is a conspiracy theory but if somebody wanted to do that i would understand why because inflation in a small amount stimulates the economy by changing your behavior because what are you going to do if the money in your pocket is worth less tomorrow than it was today what are you going to do with it you spend it yeah because you might as well get something that retains its value could be a car could be a book could be a handbag a fancy shirt whatever but you're going to spend it on something that that price is going to be the same tomorrow but my dollar is going to buy less of it so i'm actually better off you're literally incentivized to spend your money now and in hyperinflating economies people go out and buy 100 iphones they'll buy 50 cars they'll do things like that because they need something that's going to hold its value and because a car or an iphone has intrinsic value it's better than the paper money that's being devalued by inflation right so something super sketchy about those words now whether it was done on purpose is a totally different question but you have to begin to understand like all this like confusing mess of interconnectivity of one thing means this another means that but it all makes predictions so if i can give people to master the game of money to the point where they go oh i know what this means i understand the last time this happened it meant this and so now i've got a prediction and now i can begin to bet on my predictions or now i understand how to use leverage or not to use leverage and so all these tools that are available to the quote unquote hyper rich are available to anybody you may only have ten dollars to invest in that same way but it is a knowledge problem it isn't a money problem now there's a speed issue for sure the guy starting with a dollar it's going to take him a lot longer to get to 100 million than the person that's starting with 10 million to get to 100 million takes a lot less doublings right to get there takes a lot less risky stuff you've got a lot more things you can try that don't work all of that i'm not denying any of that so scale becomes a question of what you're how quickly you're able to generate that money but let's talk about the most powerful force in wealth building compounding there's a reason people have talked about this forever you put an asset to work it generates more of itself over time the curve bends way in your favor every serious wealth builder knows how compounding works most gold owners though have completely opted out of it monetary metals changes 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from the second you pick them up they're soft well constructed the kind of thing that holds up over time and that is the point refresh your everyday with luxury you'll actually use head to quince.com slash impact pod for free shipping on your order and 365 day returns now available in canada too that's quince q u i n c e.com slash impact pod for free shipping and 365 day returns quince.com slash impact pod let's talk about money you're leaving on the table every time you pay full price for a health product out of pocket you could be missing out on 30 savings there are over 40 million hsa accounts in the u.s holding 159 billion dollars in pre-tax dollars that's where true med comes in true med helps qualified customers use pre-tax hsa dollars on health products that can qualify as medical expenses under irs guidelines you complete a health survey true med handles the documentation and the purchase and you can save an average of 30 percent on products like eight sleep peloton ag1 and others that studies show can treat or reverse many common chronic conditions stop paying full price for products your hsa was built for go to true med.com slash impact and check out what things you want that may qualify it takes just a couple of minutes true med is for qualified customers only hsa fsa tax savings vary you can play the same game um i just want to call back to when we're talking about accredited investors and so my understanding is they have such an income you know brackets or like a network bracket where you can jump into it because of how they view risk and they're assuming that these people have more i guess bandwidth to take on that risk and so i'm curious for you how does risk play into like wealth generation because again timing also plays into it because in my head when you're talking about the s&p 500 index funds these are like safe right over long periods of time but at the same time if you want to take risk that's also where you get like 100xs or things like that so how do you view risk in wealth building yeah so i think people if you want to there's two paths before you to build wealth you can invest in building something or you can invest in assets and we'll define an asset as anything that actually pays you to hold it so there are other ways but just for simplicity let's stick with those two building something's gonna be ultra high risk but high risk high reward so that's how i generated my wealth i didn't own a single stock in a single company until after i was worth hundreds of millions of dollars so none of my money did i generate in that way all of my money i generated by building a company that became incredibly valuable to somebody else to own by just making hundreds of millions of dollars a year in revenue so another company looked at that was like yo those hundreds of millions of dollars owned by us we can either grow it or it's created to our bottom line which makes our share price go up or that product we recognize is a necessary part for our brand portfolio to own whatever for whatever reason it was extremely valuable to them here's another money master the game idea so when you're talking about buying a company there are two ways to value a company more but these are the two really typical ways you can get a multiplier on revenue so oftentimes that's 1x 2x something like that so if you're making 300 million dollars we'll give you 300 million dollars to buy the company or you can get a multiplier on what's called EBITDA so EBITDA is just an acronym that stands for earnings before interest taxes depreciation and amortization you've got your all it's basically the money you make minus fancy accounting is the easy way to think about it so you've got uh you're trying to eliminate all the different ways that a company can do accounting and just look at how it's making money without all the accounting stuff and that could be 10 times EBITDA 16 times EBITDA 20 times EBITDA because they want to know how profitable effectively is the company so i'm only going to give you 1x your purchase if it's just based on revenue but i don't like the way the revenue is going or if you've really shown that this business is functioning we can do it as a function of EBITDA so while i can't disclose the multiplier quest sold on EBITDA and that was part of how we were able to win so well was we had put together a high functioning company and so looking at the different ways that something can be structured becomes really important and we started getting a field what was the basically about risk and how to manage that right so going back to risk so you have those two paths before you've got the high risk high reward then you've got the much lower risk much longer time horizon to get wealthy and so that's where i would advise people if you're gonna bet on yourself accept a lot of risk but know that's like most businesses fail but it can still be the right of a lifetime if you've got meaning and purpose right so i still don't know if impact theory is going to do what i want it to do but i show up every day and fighting for it feels awesome and so i've already spent six years of my life just doing the same trying to build it's been six of the best years of my life so it's like okay well nothing can take that away so even if it ends up failing while i will be you know there'll be a moment of emotional trauma that doesn't negate all you know going after something that really matters so for me that's where i invest the vast majority of my net worth is um i guess technically the vast majority of my net worth is effectively buried in bonds so that i can't lose anything uh which is me saying i'm a very low risk investor and so all of my high risk dollars though are in building impact theory right so we're just pumping money into it to continue to scale and grow and grow and grow so if i were doing risk i would do that but for most people i would say you'll be a lot happier you'll sleep a lot better if you put money into an index fund as boring as can be and just leave it in for a really long time dollar cost average in so don't put all your money at once buying slowly over time no matter what price up price down you just keep if you're going to buy in a thousand dollars a month you buy in a thousand dollars a month a hundred dollars a month ten dollars a month whatever and you just slowly slowly again index funds don't try to fix stocks so i would ward if you're an entrepreneur you take risk if you're not i have a follow-up question on the risk tolerance of uh index funds and s&p 500s do you see it as more risk given ray dalio's most recent book about the changing world order so i love me a ray dalio uh rabbit hole so i would still say that it's your safest bet you just may want to be thoughtful about so for those who don't know ray dalio's principles for changing world order is an extraordinary book that points out a fact that every empire in all of human history has ended up collapsing and their currency along with it so whether you're talking about the age of england and the sterling being the world reserve currency whether you're talking the current us being the reserve currency when the dutch were the reserve currency so on and so forth forever the romans when they were the jam and every one of them has failed all signs point to it's a six phase cycle and phase six is total collapse and ray dalio pegs is somewhere in the middle of phase five as the u.s empire so we are clearly on the decline in the world order in the last 18 months as a time of filming this uh 40 of all u.s dollars ever made in the entire history of the u.s dollar were printed in the last 18 months so that is a very bad sign so when you think about uh an empire collapsing it usually begins with inflating their currency it begins with inflating their currency and beginning to lose their standing on the world stage and that there's another rising superpower and of course right now that would be china so there are a lot of things but ray will be the first to tell you he doesn't know if it's five years 50 years or 150 years they do tend to collapse somewhere in the 150 year range give or take 100 years though that's a pretty big swing so we are at what the u.s is 250 almost 230 something like that no almost exactly 250 so we're almost exactly 250 years old right now so we're long in the tooth so uh even if it's the plus 100 years. According to Ray Dalio's research, of course, nothing is ever 100%. So one might want to not just invest in a U.S. index fund, but I certainly would not think somebody investing in the U.S.

economy is stupid, because what you're saying is that you just trust that the U.S. economy is going to grow, and the odds of it not growing over the next 50 years to some meaningful amount is effectively zero. I can never say nothing is zero. But historically, certainly, that's a very positive sign.

Even somewhere like England, it's not like they went to nothing. They're still a major economic player, especially for a country the size that they are. But it's worth paying attention and seeing does China start to pop off. Do you hedge your bets a little bit?

Do you start doing emerging markets? Do you do based on technological sectors? Whatever. And looking at that, but the only sort of dumb thing to do would be to pick the major, like the S&P 500, I'm sure there's a global index, to get as broad of a portfolio as you can that is a well-trusted index fund and invest in that.

And then, as I say, diversification is critical. You're going to hear people say diversification is for suckers. The crazy thing is they're both right, because what they mean is there really will be a winner and a loser. And if you bet on the winner, then you make all the money.

And this is the guys that get incredibly wealthy. It's never on index funds. You'll get wealthy by sort of family standards, but you're never going to become Elon Musk or Warren Buffett betting on an index fund. So if you look at somebody like Warren Buffett, who did make his money in the stock market, the way that he did it was he made like 80% of his wealth off of three trades.

And it's really ridiculous. Less than five, for sure. So there are precious new companies where he looked at it, got it right, and went all in. Now, if he looked at it, got it right, and then was like, well, I'm still going to hedge my bets across everything, he would have much less risk for losing money, but he never would become the richest man in the world.

So again, it's optimizing risk for what you're comfortable with. I'm hyper risk averse in investing, and I'm hyper risk tolerant in building. So the bad news for my wife is if I put all or most of my money at risk to build impact theory and it ends up failing, I still feel like a warrior who's in the arena, and that's how I want to view myself. If I were to fail to take that risk and never try to build something great, that would really bum me out.

But if I lost all my money on an investment, I'd feel like an asshole. So because I don't consider myself to be a clever investor. So I need to be very thoughtful, hedge my bets, be very risk averse. And so for anybody following the FTX drama, Lisa got text messages from friends who were like, oh my God, I'm so sorry that you guys, you know, you must really be panicking, I think they said the word.

And she was like, oh my God, what the hell? And so she reached out to me, she's like, what is FTX? And I'm like, your husband is way too paranoid for that. Like, we have no money in FTX.

My heart absolutely bleeds for people that did the loss of human capitalism, an absolute tragedy. But because I'm so risk averse on easy, if they saw how much risk I'd taken in my life on the entrepreneurial side. And then they would laugh at me if they saw how little risk I'd taken the stock market. I'm actually going to interject here, but you made one comment, which I don't know if it was on the stake, but you said DeFi, which just in the crypto world, it was actually a centralized exchange that caused like all the drama.

I was not trying to say that FTX was DeFi. I'm saying, not only did I not do that, I didn't do DeFi or any other change to get people excited because the yields are amazing. Thank you. So that nobody thinks I'm conflating the two.

There was just when I got into crypto, which already I only invested in three total coins, one I sold and boiled down to just two, Bitcoin and Ethereum. Even then, when there was so much excitement around the kind of yield that you could get when banks were paying you nothing, I was like, nope, it just seems to be true. I'm going to stay safe. And so even if I look like a chump because I don't make a lot of money on the DeFi and other people are, fair enough, but I'm also not going to lose money.

And then literally like a few weeks later was when Mark Cuban lost God only knows how much on a DeFi thing. I was just like, yeah. And it really does come from an acknowledgement of my level of ignorance. So I don't want anybody to think I'm smart.

I want them to realize how risk averse I am as an investor. And so you just have to, and the reason I'm so risk averse, I don't think I understand it well enough. And so you need to know your level of knowledge because again, your knowledge makes predictions. If you don't have enough knowledge, your predictions are going to be terrible.

And so the only things I invest in are things where I feel like I understand it well enough to make a prediction so that, to go back to an earlier answer, that I can really buy low and sell high. So as the price of Bitcoin fell and Ethereum fell, I didn't think about it because one, I was investing for the long term. I knew that they fluctuate wildly. Within any four-year window, the fluctuations on ETH and Bitcoin since their inception have been violent.

And so I was like, well, I know they're going to be violent swings. So I'm only going to invest so much that I still have plenty of capital, dried powders, they call it, to live my life and build what I'm building. And then I want to make sure that I don't see that number and panic and go, oh my God, I have this out, it's never coming back. It's like, you have to be sober in that moment and go, what was the knowledge that made a prediction?

It's what people call my thesis, right? You'll hear that a lot in crypto. My thesis is still intact. What they mean is you learned something about the way that it worked, which made a prediction and that's your thesis.

So my thesis is that the world becomes more digital, relies more on the blockchain and more of the things that we think of as being physical, like money, are going inevitably to become digital. If it's going to become digital, what do I think will be the digital currency? Honestly, the digital currency will probably be nation-based digital stable coins, if I'm completely honest, but I think Bitcoin will be digital gold. And then Ethereum, because we actually build on it ourselves here, like that one to me is even more than a currency.

It's just a whole universe of creation. So anyway, as long as my thesis, whichever the case may be, as long as those remain intact, I don't have an emotional problem, right? So even the other day when I saw that Ethereum was down to 1,100, I was like, whoa, it was almost more a fascination of like, wow, like volatility is really real. But then when you see people being devastated, devastated to the point of like weeping and obviously, you know, unfortunately, even farther than that, and it really becomes scary.

For me, it is emotional because I followed a set of criteria. Again, because I know my level of ignorance. This is not a clap for Tom. This is a, hey, maybe I can own up to, I am as ignorant as Tom and therefore will be as cautious as Tom and play at that level.

Many people change their thesis over time. So how do you decide if you're going to change or how do you always stay focused throughout thoughts and downs? One, I don't chase it because I don't know it well enough. I don't spend enough time.

But if you look at somebody like Raoul Paul, who I think is a brilliant macro economist, one, he's spending all day, every day watching the macro trends. Two, he's extraordinarily educated because he's been in this for a long time. So he's lived through a ton of these cycles. So even in the euphoria, he was like, guys, you have to be careful.

You have to be thoughtful. You have to hear the macro trends. This is what just makes a prediction. Be very thoughtful.

And just walk people through historical rises and falls. And so you'll get people like that, that as their thesis changes, they change their portfolio. So at one point, he was what he called irresponsibly long on Ethereum. So he had something like 95% of his net worth.

Now, as things began to change, he started changing that ratio. For me, I was just like, this is how much I'm willing to put into crypto. Once I hit that level, then I just stop. And I'm going to turn my brain off to it for the next five to 10 years.

Now, if 10 years from now, it doesn't hit, I'll be like, yeah, maybe that was a mistake. But my thing was, I put the money in it. And if over that time, my thesis changes, then I may rethink. But the way that I see it right now today, I would write Ethereum and Bitcoin to zero.

I have no intention to sell. The reason that I would write it to zeros as of right now today, I, in my do not follow my advice way, believe that right now, those are the front runners to be the ones that last. Because I think everything, not everything, I think a lot of things are going to go digital. A lot of important things are going to go digital.

And those two things still matter to me for the reasons that I was explaining a minute ago. So okay, those still matter. So even if the rest of the world momentarily says these have no value, it's my belief that they will once again realize no, actually they do. And because I'm so familiar with the technology and have built so many things now on the back of Ethereum and really have researched the life out of Bitcoin, the protocol, why it matters, watched the adoptions, just seen some of the greatest thinkers in the world think through predicting their own future and where this goes.

I have a pretty robust map of where it goes. And obviously it could be wrong, but I have confidence in that such that for now, it's just wait and see. Now, if through all of that, like if the Bitcoin protocol were to suddenly stop or we realize, just kidding, there's not 21 million, there's 22 million, then I'd be like, whoa, my whole thesis has changed. Now I want out, right?

So if any of us saw the supply of Bitcoin inflate, at least people that that's part of their thesis, which it is mine, that would invalidate everything and I would be in a mad scramble because then suddenly my thesis goes away and I'm left like, yo, I want to get out right now. So, but as long as everything stays intact, then I'm good. Do you believe in the advice about in order to get rich, you have to follow your passion and do what you love? And if that doesn't work out, how do you know when to stop and to explore a new hobby or a business venture?

So it goes back to, there's two primary ways. I know the comments are going to lighten up. There's two primary, easy to discuss ways to get rich. Way number one, build something.

Way number two, invest like you're watching paint dry, as I have heard from Ramit Sethi. So if you are doing the just invest, then no, it's going to be super boring. If you're doing the build, building is hard and building will question your will to continue. Not once, not twice, dozens, hundreds, thousands of times.

Like my life is a roller coaster every day. And the funny thing is when something's going right and my day is awesome, like today, we just announced something big to the discord. It was so fun and people were loving it. I was like, yeah, I know something is going to go wrong today.

So today will be part good, part bad, right? Every day has something bad. Not every day has something good. So at least on day where there's something good, I'm like, word.

So you have to have the emotional fortitude to weather all of those storms. And it really is like life is a computer game. And the AI is going to make it as hard as humanly possible for you to keep going. But if you do, and you develop that perseverance, you can accomplish some really extraordinary things because of the way the human mind works, where knowledge stacks, knowledge has utility.

Utility means you can do something other people can't do. And now you're able to monetize that utility. So it really is about time in the game. So that's huge.

To have time in the game, you have to be passionate. Because when you say you're knocked to your knees, you're embarrassed, you failed, you lost money, it's just hard, it's boring, you'd rather be out with your friends, your kid is sick, whatever, all those things that are going to come for you. When you say, why am I doing this? You better have a physical feeling to the positive when you answer that question.

If it's purely intellectual, you're in trouble. And I think that's what people try to get out with passion. Passion is psychological energy. It's like if you've ever put, you've been dragging ass all day.

You're tired. I got to go to bed. You guys, please, I just need to go to bed. And then somebody puts on your favorite song.

You can rally for 10 minutes and be hyphy. It's crazy. There's something about the way that you can shift your neurochemistry that makes you feel more energetic all of a sudden. That's passion.

It's just like putting a song on. You get that image again of who you're fighting for, what you want, and now you're back in it. So passion will give you the energy to persevere. So you talked about the neuroscience of passion, we're just like getting into rallying.

That's a lot about health. So we've only talked about wealth being about finances. Is it actually more important to focus on your health first and invest into your health rather than just purely money? For sure.

I would say do both. If you want a truly wealthy life, you need to be both healthy and wealthy. That's really important. There's the age-old adage of a healthy man wants many things, but a sick man wants only one.

That's really, really true. And so I think it's important for two reasons. One, that, that if you're not healthy, you can't enjoy anything. And then the other reason is that if you take care of your body, it's going to show you that your actions have positive or negative consequences.

Like I'm so, even right now, I'm wearing a continuous glucose monitor because it reminds me that what I eat has an impact on my body that sometimes is invisible. But when I'm tracing it, I'm like, why do I feel weird? I can actually, if I feel weird, guarantee my blood sugar is high. Like I'll feel completely normal until about 120.

Now the average person, I promise you, lives their entire life above 120. If you're not paying attention, you're 120 to 180, 210 all the time. I don't feel good above 120. I don't feel as good.

But because I live my life between 65 and 85 with the occasional spike to 100, it's like, dude, I feel awesome. And then, which just feels normal, by the way. But then I'll be like, God, I feel weird. Why do I feel so weird?

Beep, 133. I'm like, yep, because I ate a bowl of ice cream or whatever, something. Now that I track it and can correlate that feeling to what I've eaten, I'm like, do I really want to eat that thing? And so you get into that with your money and your lifestyle.

And it's like when you gamify saving money and you're like, I know what it feels like at the end of this month when I bought, you know, a bunch of meals out or I bought myself clothes. The last, you know, three or four days of the month were sweaty. Like I did not feel good. I was stressed.

I used to live like this legitimately. There was a time in my life, if you've ever heard me tell the story that I took myself scrounging to calcricians to find a change for gas in my car, in that period, I would have to decide what bill am I going to pay this month because I couldn't pay them all. So it was like, okay, I'm going to skip electricity this month because I know I get a past due notice. And as long as I then pay that past due notice, they're not going to turn me off.

So you can constantly be like a month behind on different things. And so I would just go, okay, these bills get paid this month. Then I'll pay these bills next month. Then I'll go back to these bills.

And so that is not a good feeling. And so as you go through that and track, okay, I see when I spend my money on this, I don't feel good. When I save my money over here at the end of the month, I still have everything I need. My stress levels are going down.

So getting that correlation between, oh, when I eat this way, I feel this way, you start to carry that over. And then if people are willing to really transform their physique, there is not a single thing more powerful. If you want to be successful, if you want to get rich, all of it, change your body first. It does something to your mind.

It forces you to develop discipline. It forces you to develop resilience because you have to push through the pain and keep doing that thing you don't want to do. And it works. And then on top of that, I guarantee at some point they're going to find the biologically embedded subroutine that tells you to feel good or bad based on the state of your body.

And so if you are strong and you look good in the mirror, you will have a subroutine in your brain that's like, yeah, you have, it's a form of self-worth. It's exactly how people get obsessed with it because it feels innately good. If you, dude, I'm telling you, somebody that used to walk around with a six pack and it's never too far from it now. When you lift up your shirt and you see a six pack, you feel some kind of way.

Even now, because now I'm less focused on the six pack, but more just making sure that I maintain, you know, slightly bubbly physique body builds and laugh at me for thinking I have one, but you know, in my own reduced amount, I do. And so when I'm working out in the gym, I feel differently about myself based on the shit. Cause I was going to be weirded out by this, but I work out in the dark, but I can see my shape in the gym. And when my shape looks right in the mirror, I'm like, yeah, it makes me feel some kind of way about myself.

And people totally discredit that to their detriment. Get control of your body, prove yourself that you can do it, get that discipline, go push through the pain, see the tangible results, and then apply that to every area of your life. And then just one last follow up on this is, uh, getting your body in good shape is you talk a lot about inflammation in your health content. Do you ever see the parallel between inflammatory in your body and inflammation in the economy, like wealth as well?

Like do you see any parallels? I have never thought about that, George. Let's think, is there a parallel in the economy that is like inflammation? Inflammation.

Here's the first thing that comes to mind. When you have inflammation in the body, you have an overreactive system. So the system has a real threat. It really does need to deal with it, but then it goes haywire.

So we all learned about that with COVID and the cytokine storm. So most people in the early days died of COVID, not because they couldn't kill the germ, but because they had such an inflammatory response that the body's defense mechanism was like, yo, everybody's an intruder, everybody out. They were just slaying and killing left, right, and center. And so they just ended up killing themselves, right?

Literally the body tearing itself apart. And when you look at either euphoria or panic, that's exactly what happens. If people were in the situation that I'm in, forget scale, right? Percentage of access to capital deployed in what way?

So I've got roughly call it 20% of my income tied up in. some long-term way, right? Then I've got say 60% that's just like, yo bro, you're good. And then 20% that's being pumped into building something.

High risk, high, high, high risk. Okay. So it's like, cool. The 20%, I wish it were up.

That'd be amazing. I'd be super pumped, but it's not, but I've still got the 60% that runs my engine. That's word. So if I lost the 20% over here, because I invested it in something long-term and it's down.

So now I need to leave it and be patient for 10 years, right? It's probably going to come back around, but not for 10 years, long ass time. And then the 20% over here is outright lose because it was ultra high risk and I fail. So now effectively I've lost 40% of my net worth.

That's 60%. So I can run my life, do all the things that I want to do. So as ETH and Bitcoin are going all over the place, one, as ETH is going up, I'm not just investing, investing, investing more. I had a number.

And when I hit the number, I stopped investing. And it was like, well, I was kind of sad because it was like, oh, numbers keep going up. But I was like, I've hit the amount that I'm willing to deploy. And I did that dollar cost averaging, right?

So over like 18 months, whatever. And so I was like, cool, that's all that I'm going to buy. That's as much as I'm comfortable investing and all of that. Same thing with real estate and all that stuff.

I'm not going to keep buying. I hit a number and then I stopped. So for me, all that crazy volatility up and down. Sometimes I laugh because it's so crazy.

I just can't believe it. Like, oh my God, when it was up, it's like, it's up another 30%. You're like, this is insane. And then it was down 70%, 80%.

Same thing. Equilibrium, right? And that's where I want to see people live so that you're not reacting like the inflammatory response. You're going crazy.

It's like, you want to be even killed. You want to deal with the issue. So if there's a change in your thesis, you want to address it, reallocate, move on. But you don't want to be panicking, freaking out.

You never want to do an investment that's going to make you cry if it goes wrong, which is why every person that I think is sane says never invest more than you're willing to lose. It could all go wrong, right? And you need to be very, very open to that. And when you think this time is different, it can't go wrong.

Like I won't throw this person under the bus because this person really is right. And people really should listen to a lot of what they say. You should listen to all of what anybody says. And I remember this was maybe two years ago.

They were like, I don't know. I think maybe the economy is different this time. And maybe the world is so intertwined that the economies will never be able to have these huge drops again. And I remember like, if you guys have ever been on Reddit, the guy with his head that's like, you know, receding up to here.

I was like, brah. No, it is never different. Nothing repeats exactly, but it rhymes so closely. Like it's never different this time.

You've got to be incredibly careful. Things are going to go up and they're going to go down. And now the crazy thing is that was only 24 months ago and we're already talking about a world that's completely decoupling. So things change.

In fact, if I could give you a Buddhist-esque idea brought to me anyway by Phil Jackson, whether he's ripping it off from a Buddhist, I don't know, but he said, things come together, things fall apart. That is true of companies, friendships, marriages, nation states, currencies, everything. It comes together for a while and then it falls apart. And anytime you're investing or building or whatever, if you think it's forever, you're wrong.

Even impact theory. There's nothing that we've done that's forever. There's nothing Disney's done that's forever. Most companies come and go, Disney's only what?

100 years. Literally next year, they'll be 100 years old. In the long arc of human history, that's nothing. There are trees older than that.

There are turtles older than that. So it's like, when you're not even as old as some turtles, like you just, you're not really, you haven't done anything yet, bro. You know what I mean? So it's like, and trust me, I put myself in that account.

So recognizing things can be getting things fall apart, you have to be very thoughtful. I want to dive into something a little bit more personal and expand it into something that will affect everyone and kind of get your take on all of it. So we're talking about information, we're talking about inflation, we're talking about all these things, and you say, you know, we'll always see this again. So for me, in my early earning years, it's the first time I feel like I'm living through a high inflation.

I don't know if you've been through that before, but now I'm going to be curious about, am I thinking too much about inflation or am I not thinking enough? Because there is a big part of me that worries about people, you know, if inflation is 7%, which I think shadow stats is more like 10%, 15% plus, if you haven't made that in a raise, your purchasing power has gone cut by that. So I'm like, how much should I be worried about that? Because that compounds over time, right?

So that's that in my stage versus maybe you've gone through this or now that you're in your stage of wealth and everything, how are you thinking about that? So one, how should younger people or people who are just entering the field be thinking about that? And then how are you kind of thinking about that? Okay, so the only thing that should scare everyone is inflation.

Inflation was the thing that made me realize I had to take investing seriously because I was like, look, I'm rich man. I am perfectly happy to just have my money in Fort Knox and not think about it. And when I need to make a withdrawal of my life, I will. And that's that.

And I love the idea of never having to think about the money, just put it in a savings account and be done. And I'm happy to, you know, just, okay, that's how much I have. That's how long I expect to live. And you spend that money and all as well.

And then I realized, oh, wait a second, even when inflation is under control, that's 2%, 2% compounding. So it's 2% compounding. You can run the math on that. It gets devastating very fast.

Something like in 30 years, your purchasing power is cut in half at 2%. So I was like, whoa. So that was really distressing. And if it really is 7, 15%, now all of a sudden, it's your cut in half in five years.

So I was like, wow, I really can't ignore this. So that's when I realized, okay, I've got to go learn about investing so I can be more intelligent about it. And so in all of that, people need to think about it. Now, I will say, be thoughtful enough to realize that unless the currency hyperinflates, at which point it really becomes worthless, and that does happen, and it happens more frequently than people would like to believe, that inflation tends to go up and down.

And so we're already seeing this, right? The Fed, you want to talk conspiracy theory, the Fed has the ability to pull levers that wildly impact the inflation rate. Now, because the Fed knows that nobody pays attention to what they're doing, so the very small cadre of people who can scream as loud as they want, nobody listens, they will tell you exactly what they're doing. And the chairman of the Fed said, hey, we're going to overcorrect because, and I quote, I have medicine, I think he said, for dealing with a broken bone, meaning I'm going to break the back of the economy, but I have a way to deal with that, but I don't have a way to deal with inflation.

So I've got to yank this thing so hard that inflation goes down so much that we snap the back of the economy, but don't worry, we know how to inject stimulus back into that and grow people. Because let me tell you, if we had started all of this in a 7% environment, right, then it's like, oh, you just cut the percentage. And now the economy is stimulated, everybody's happy, businesses invest like crazy, you get cheaper money, boom, roaring 20s, everybody's excited. But when you have high inflation, people are freaking out, oh my God, what do we do?

And so we were at a 0% interest rate, which was causing everybody to spend money like crazy town. He had to like throw the numbers into the trees to break the back of the economy, to get it to slow down, and then he knows, oh, cool, now I've given myself the ability to stimulate the economy by bringing them back down. But that's manipulation, it's crazy. And so there are some people that are up in arms, they're just like, leave it alone.

When something goes bad, let it go bad. Like, what is everybody saying about FTX right now? It sucks, my heart goes out to anybody that lost money, but it needed to happen. This is all fake anyway.

You got to let it burn away the detritus, let people who were gambling get washed out. And even though it's going to set us back years, we'll ultimately be better for it, right? Once it becomes impossible to undo, that's what everybody says. And what the people, the proponents of saying, just let the market do what the market does, their whole point is, yeah, it's going to hurt, but it will re-regulate itself very quickly.

And people will rapidly see that, oh, if we had just left it alone, it will self-correct. And we're now at the edge of my understanding, to be clear. But there is a moment, I think it was the New Deal. So they're trying to use the New Deal to stimulate the economy, to get us out of the Great Depression.

And some economists say that that caused the depression, that we were already showing signs of coming out of it like two or three years in, and that that may have continued the Great Depression on for years, like four years longer than it would have if we had just left it alone. Now, at the edge of my understanding, I don't know if that's true, I'm simply repeating a headline. But it's interesting that credible economists say, hey, if they had just left it alone, the market will re-correct. The problem is we don't want to see people suffer.

And so to avoid people suffering, we start playing with these levers, trying to fix things as we go. But you get these wild swings. Now I'm going to tell an interesting story. So there is this, I don't know how to call it a documentary or what, but as you guys know, in airplanes, they have a black box recorder.

And there's this like play that they filmed like kind of a, you're filming actors on stage, you're filming it. And they're, they're reenacting the exact words from the black box. So they're taking the transcripts and doing it exactly. And one of the flights that they reenact was this flight where a guy brings his kids into the cockpit.

This is, this is a commercial airliner. So there's like 200 people on board, brings his kid into the cockpit. And the guy doesn't realize the kid's foot or something bumps autopilot. So it takes the thing off autopilot, but he thinks it's on autopilot.

Now, the thing you would do if you have autopilot is like you try to steer or whatever, and then autopilot realizes and it smooths things out. And because he didn't know the autopilot had come off, he was like doing these big moves. And it was like whipping the plane from side to side. And he could not understand what was happening.

And you hear him go not again, because it was overcorrecting from one side to the other, from one side to the other, and then they crash and everybody dies. And it's like, it's tempting to think that doing these big moves is the right thing, but you can tear the plane apart by that kind of whiplash movement. So that's the thing that makes me as the layperson and nobody should take economic policy off of me. But I do worry about that big whiplash.

Now, I don't think that they should probably take their hands completely off the wheel. Think that they're at the edge of my understanding again. There are probably things, here's what's interesting. My knowledge makes predictions.

And some of those predictions are if there were no hands on the wheels, all hell would break loose. For what period of time? I don't know. Maybe 10 years and everything would be great.

But my fear of what happens in that 10-year period, woo-wee. Now, it could just be that I don't know enough, maybe. Or it could be that it just, you need some governance. Again, I want to dive a little bit deeper here.

So now I'm learning what the Fed does, how they're kind of manipulating the economy. But as far as I know, I can't elect the Fed. I can't tell them what to do. So now again, back to, you know, some of these people are in different stages of their lives.

Like, with this knowledge now, you know, for me, I might be hedging through different stuff. It seems like, you know, your portfolio split seems like you have some safe buckets, you have some risky buckets, you have some things you control. Is there something that you can recommend to everybody? Or is it something that's so, like, just individual, they would have to all do their own research and figure out?

Yeah, and of course, like, with all the caveats. But the one thing I would say is you need to have a year's worth of savings liquid immediately available to you. One of the best ways to do that is probably government bonds, because the U.S. government will back it and say, we're at least going to match your principal.

So we may not be able to make good on the interest that we promised, but we're going to guarantee that your principal's back. You can do those very short term, say a month, and then you can cycle your money in and out of that. So sometimes you'll get at least a little bit of yield. Other times you won't, but at least your money is more or less being protected.

Now, if inflation is higher than whatever yield you can get, you are technically losing purchasing power, but at least the number in your bank is the same. So that's one way to keep the money that you need access to your life immediately available to you. Then I would invest in index funds, whatever you're comfortable investing. I would do it in a totally hands-off, passive way, your dollar cost averaging in, whatever amount you're willing to do.

And then I would take some amount that's, we'll call it play money, where maybe you're going to do higher risk investments. You're going to pick some stocks because it's fun for you. You're going to invest in your friend's bar, whatever. All things that if it goes to zero, you're completely comfortable.

So that would be roughly how I would think about it. You've got the long-term, really simple, tried and true method of investing. Then you've got more speculative dollars that are fun, but that's probably going to be five, 10% of your investable dollars. And then if you want to buy a house, it would be the only last thing.

And I would say, remember that buying a house is not a great way to invest unless you own it, but you don't live in it. And you let somebody else live in it and they pay you more than you pay for interest, depreciation, the cost of the government charges you every year, property tax. Thank you. So if you're all in fix and repair, if after that, you're still making money, cool.

That can be a good investment. But if you own a house and you're living in it, basically what you're doing is paying a lot of money to keep up with inflation. So it's forcing you to invest that money so that you know, I'm going to have whatever this house is worth and houses tend to keep up with inflation. So it's like, I know that I have this quote unquote nest egg that's going to match inflation that I can either leave to my kids or whatever.

But the thought that that is money that you made. So let's say you bought the house for a million dollars and then, you know, 30 years from now it sells for $7 million. You didn't actually spend extra money. You probably would have made a lot more money by investing a million dollars in the stock market into an index fund.

But if you're going to live in it and make the memories and all that good stuff and wonderful, so be it. But it's basically just a mechanism forcing you to keep up with inflation. It's going to cost you a lot to keep up with inflation. So for somebody who might be a little older, like in their 50s or 60s, what advice would you give to them if they're worried about not having enough money to retire?

Keep making money. So you're going to need to start investing right away. But again, you're going to take less risk. And the thing is, I haven't talked about higher risk, albeit still somewhat cautious investing.

So most young people are going to have, if they're working with an advisor, are going to have their money spread across the really basic things that I'm talking about in index fund. But then they might also do growth market investing, emerging market investing, things that have higher upside, a bit higher risk. You might start doing corporate bonds. If the company goes out of business, you're out of luck.

But they might pay significantly higher interest rates. So they might be doing some of that. They might be doing, which I don't understand well enough, so I can't advise people up or down. A lot of people make a lot of money here, but this is also when you hear about people committing suicide.

It's almost always that they did something with futures options calls where, I forget which one of those, but one of them has an infinite downside. So you could end up losing more money than you have. And that's where people get into trouble because they go from, oh my God, I'm up $100,000 to, I'm down $500,000, and now I'll never be able to make that back. And so that's where it gets very, very scary because it's very much like gambling.

But anyway, they might have those more risky stock market government approved ways of what, from where I'm sitting, is just gambling. And so they're in there doing government approved gambling. They give themselves a lot of trouble. But let's say that they've got a portfolio that has some of that in it.

The first thing I would say is if you're in your 50s or 60s, you want to start getting out of that riskier stuff because if you take a loss, you don't have time to make it back. So we're going to be getting into things that are less risky that we're going to be able to just map out. So if we know that our money's going to double every seven years, then it's like, okay, you're 60. Speaking from a perspective of an actuarial table, you're going to live to 78.

Cool. So you got several, almost three doublings in that time. So how much do we have? How much can we afford to shove in there?

My mom didn't retire until she was like 72 or something like that. So it's like, if you're able to retire at 65, don't. Right? If you need the money.

Now, just keep pumping money as much as you can possibly bear during those years. You should still be high functioning. I expect to be high functioning in my 80s. You need to take care of yourself.

But if you're taking care of your body and your cognition, you should be high functioning well into your 80s. I get it. If you don't want to work, but imagine if you're passionate. I don't plan to retire.

I plan to work until, right? Because I love what I do. And so it doesn't make sense. I don't want to retire.

Now I'm in a position where I can retire any second. But because I don't want to, and I control whether I do, it's a great place. So anyway, you're going to be making money, doing something that you care about. You're going to be putting as much money as you possibly can into your retirement fund.

You're setting aside any of that, but it should have been different. Don't waste time on that. I get it. You could lament that more than that.

All of that. It's not going to help. So we're going to suck away as much money as humanly possible, knowing that we're going to double every seven years. Now we're just going to run the math.

So if it doubles every seven years and I'm 60, and I want to get to that third doubling, that's 81. Cool. We know it is what it is. Or nope, I only need it to double once.

Rad. Then you're only going to be 67. So it all comes down to how much do you have already? Hopefully you're not starting from dollar zero.

So if we have some money in there already, you're going to take X strategy. It expects to yield X over time. Maybe in seven years, you know, the volatility is so weird that in the seven year span, it didn't double, but in the 14 year period, it has. You've done the two doublings.

So it's like, people have to remember, it's on average. So be very thoughtful about that. But if we go 14 years, now you're 74. Cool.

Maybe at that point, you've got enough to retire. Or maybe, I mean, math, math is math. So math is going to say what math says. And if you're at your current job not getting enough to put money in, what are you doing to make sure that you can make more money so you can invest more money?

Doing a side hustle, getting better skills at your current job. And this is the one place I'm deeply compassionate towards people. But I have no compassion for somebody who doesn't want to improve their skill set. So you can improve your skill set at any age.

You can negotiate a better salary at any age. This all comes down to, are you able to deliver value? I don't care if you're 60. I don't care if you're 70.

If you're crushing it, you're the most valuable person in the company, word. And let me tell you right now, don't think for one second, I'm not going to outperform all you whippersnappers when I'm 70, right? Because all my knowledge is going to be stacking. And I'm going hard.

I've got energy for days. So that's where I need people to really like, man or woman up, get tough, get after it. I really love that message because, again, I can come from a place of fear. I can see an opportunity here.

Again, I can see the inflation, maybe even stagnation because we're heading into recession. It's like stocks are down. Lots of things are down. While at the same time, all my personal power is inflating away.

But I can use that again to fire in my ass to be like, I need to get skills that can outcompound the 7% or whatever. And then this is an opportunity where things are down, which means I can buy these things. And if it ever reverses, it's actually a great opportunity to do that. I mean, now you're buying things on discount.

Exactly. And again, I think you touched on a really great point about actually focusing on the skill set because some people will have three-year saving and maybe they can like dump it into the stock market and all that. But I think for a lot of people living the paycheck and paycheck life, it seems like they can buy less and less every single month. If they just focus on, again, where can they learn these things?

What do they have a natural affinity towards that has a marketplace that is open to value? I think for me, that gives a lot of hope. I'm just like, okay, this is what we can focus on and have control over. Yeah.

I mean, this is why they say that more millionaires are made in a depression than any other time in history. And the reason is hiding in that depression is the next Amazon where the stock is hyper undervalued and people can come in and pick it up. I forget. I think it was Amazon stock dropped to like $7 a share or something like that.

Yeah. And so Amazon still goes on to be Amazon. So if when Amazon $7 a share, you bought $7,000 worth, you're laughing all the way to the bank because of that then skyrockets and becomes one of the most valuable stocks on planet earth. It's like, you've really got something.

But if you were trying to buy it when it was $100, spending $7,000 gets you a lot less, a lot less, like 10 times less, more than 10 times less. So it's a really big difference. But this is why they say, be fearful when other people are being greedy and be greedy when other people are being fearful, which by the way, it's just another way of saying buy low and sell high. It's low because people don't think it's going to be anything.

And it's high because they're convinced that it's going to be. And odds are, then the odds are. At that point, then that the reality of that is already factored into the price because if people are right and it is going to go up, it's already factored into the price. So you have to bet against the consensus and be right.

That's where this gets hard. So how do you get good enough where you can make the counterintuitive bet that nobody else sees and you end up being right? And that's why euphoria is so dangerous because when everybody's like, yeah, it's already built into the price and euphoria always breaks. It always breaks.

Nobody can party forever. And if you can really extrapolate that analogy and just think about what it's like to be at a party. You're going, it's fun. You want it to last forever and you're going ham.

You've had drinks and your friends are there and you're talking and it's great. You've been dancing. And then it's like, oh, my high heels are kind of starting to hurt, right? My feet are a bit sore.

Like, oh man, we've been dancing this song for a long time. Like, I just kind of, you know, I want to chill. Like, this is so fun. I really did have a great time.

But it's like, now I want to get off the dance floor. That's natural. Like, you can only sustain that fever pitch for so long. And knowing that the number literally can't go up forever, that even if every dollar went into one asset class over, you know, 18 month period, even then it still gets the top.

And so somebody bought at the top and then everybody realizes, oh, wait, there's nowhere else to go. And so now you get people that are like, wait, I need liquidity. There's no bigger fool, as they say, that's going to come in at a higher dollar amount. And so now you get into all the pump and dump schemes where people are like, no, I just need a little burst so that I can get out.

So they do that. And so you see what they call chopping, where the trend line is just chopping. It's just people trying to wait to that local high to get out. And then it drops again because everybody's selling.

And then people try to build it back up so that they get out again and it drops. I mean, all this stuff is like hyper predictable. So, and by the way, that's never going to happen. Not all things are going to suck into one resource.

So the party does end voluntarily at some point. And if people don't recognize that, oh, this is going to stop being fun, people are going to start backing out. That's going to cause it to collapse. Then that's how so many people get themselves in trouble.

So you have to be very cognizant of where this all goes. The music is going to stop. Talking about like the Amazon stock being undervalued, what opportunities do you see that are being undervalued like the Amazon stock or a skill set like learning to program? I'm not the guy that's going to be able to give you what is undervalued right now because I do not consider myself a talented investor.

So all I will say is that going to, if you're a builder, you want to figure out what is an underserved problem. So learning to code is about figuring out what's going to be that next skill that people really need. So what is the problem that the world faces and who is going, what is the problem that the world faces that the world recognizes it faces, wants a solution and considers that solution very valuable. And so that's why you want to get there.

So we all know that more and more things are going to be written with code. And so learning to code is going to continue to be a very valuable skill. But you don't want to be a mediocre coder. There's going to be a lot of people doing it.

So getting into that. Now, the area that I think people should be learning the most about is AI in no uncertain terms. How do I, as an artist, a copywriter, a marketer, whatever, how do I work with AI? Because I don't think AI is going to replace the strategic creative thinker.

It's going to replace the person that's sort of manually doing things. So it's going to make everything that much easier. So imagine if instead of like, for instance, let's say that I want to be a songwriter, but I'm not good with beats. I don't know the technical knobs or how to go find a new sound effect.

And instead, and mark my words, this, what I'm about to describe while it doesn't exist today, it will, where you can type in, give me something that sounds like a metal stick hitting an empty drum, bong, bong, a bigger drum, bong, bong, but higher pitched, bong, right? And you just keep describing it until you get the sound you want. You don't have to walk around like Charlie Puth is doing now, opening a door, does this tweak in the way that I want it this week, tap it with this, that, and the other, which is already brilliant and amazing. And he's going to then put it into Pro Tools, whatever, and edit it, which is already extraordinary.

You're going to be able to do it through prompts, man. It's going to be crazy. So most people get emotionally shut down by that because they built their career on like, but I'm the one that knows what to tap on. And I'm the one that understands all the secrets of Pro Tools and how to do that.

Never invest like that. Be the person that is excited about the innovation to make things that work hard easier so that you can push what you do up to a higher level and get into really more and more interesting pieces of this. So AI to me is the name of the game. And 2022 was the year that it became real.

And so for anybody wondering like, oh, if we had that threshold moment, absolutely it happened now. At Impact Theory, we have already released imagery that contains AI-generated elements. People would not be able to pick out which is which. We will continue to do it more.

We have backgrounds and videos and stuff that have been made by AI. It's really extraordinary what you can generate with AI already right now today in commercial applications, what it's going to be in five or 10 years will be bananas. I have a question around like being rich and being wealthy. So do you feel like there's a difference?

And at what point of your life do you feel like you've got rich? And at what point did you feel like you got wealthy? It's really interesting. So the classic answer to that question is rich is when you've made enough money that if you spend your principle, you're going to be able to live the way that you want to live.

Wealthy is where you can live your lifestyle on the interest of the money that you have so that it's generational wealth. You'll be able to continue to pass on the capital. And if they're smart, they'll keep living only off of the interest, which means, hey, when you have a good year, you're living rich. When you have a bad year, you're not.

But you preserve your capital, as they say. So that bulk amount that's kicking off the interest never changes. That's the classic definition. Now, I would say there's a wiser way to look at it, which is that rich is about money and wealthy is about mindset.

And when you understand you can have all the money in the world and still feel poor because it's never enough, or you can have very little money but realize that money can't do the one thing that people really care about, which is give you a sense of fulfillment. Fulfillment has a recipe, maybe a better way to say it than a math formula. It has a recipe. There are elements, and if those elements are in your life, then you're going to be A-OK.

And they go like this. You want to be working really hard for something. Just that's the way the human mind works. If you're not working really hard, you'll never feel good about yourself.

So you're working really hard to acquire a set of skills that allow you to do something for the group that uplifts them and yourself. And then the one thing I will add to that is there better be somebody in that group that you love and care about on an interpersonal relationship level. If you have that, life will always be worth living. And if you don't, it won't, no matter how much money you make.

We all know that money is extraordinarily useful, which is why people will always chase money. But people think that money is going to make them feel better about themselves, give them fulfillment, and it can't. It's just that's not a thing that money can contribute to beyond giving you the money to build the thing that gives you meaning and purpose, sure. So if that money is necessary to create something that allows you to use your skill set to contribute to the group, then it's useful, right?

It's exactly what money does for me now. It's letting me build impact theory, which is the thing that allows me to contribute in the way I want to contribute. So it's powerful in that way, but it is the contribution that makes me feel the way that I want to feel. So you have to be thoughtful about that.

But those are the two. So one is a little bit woo-woo, and then the other is very concrete. So I'll let you pick which one you prefer. So when you first started Quest, did you have any idea that it would get to where it is now?

And is there anything that you would have done differently knowing what you don't know? I knew it would get where it got. That was the whole point of starting the company. But we didn't think it would get there that fast.

So that really was a rocket ship and is proof that what you're looking for is the right product at the right time with the right marketing. And if you're missing any of those elements, you're not going to get there. And so I get asked a lot, like, oh my God, would you guys do a Quest? I'm like, I will tell you, literally, day by day, it's not going to work now.

Because now the world has reacted to what we did. And so it seems commonplace. In fact, if I walk people through what we did, be like, bro, that's so mid. Like, how on earth did that work?

But it wasn't mid when we did it. It was revolutionary. But it worked so well, everyone started doing it. So now it's just table stakes.

If you're not a killer at social media, if you don't have a protein bar that's actually good for your health, if you don't market it around food, if you don't have social media marketing that reflects the user base, if you're not building community, it's never going to work. But when you do all of that and nobody's done it before, it's like, oh my God, this is crazy. And it was explosive. So if we were to try to launch Quest now, it wouldn't work because somebody already did it.

So you have to get that timing right, product right, marketing right. It's all going to be right, right, right. So that's why it worked. What would I do differently now?

Well, now I would have to find that angle where we're doing something that other people aren't doing. The big thing that we are leaning into now is going to tie some strings together that we had. So one, understanding that your brand has to have a face and a voice. So people know what you stand for.

That's a big part of it. I actually tried to be invisible at Quest. It wasn't until the last like 10 months that I was at Quest that I stepped in front of the camera. So for the longest time, we did what we call mirror marketing.

Then I realized there was a shift. So the marketing needs to not only add value, but it needs to be entertaining in some way. And then working with influencers is way more important now than it used to be. But working with them in a way that makes an ad that I'm like, word, thank you for sending me the ad.

Like shout out to CapCut. CapCut, their whole ad, I didn't even realize they were ads at first because they're just tutorials. They're just like, hey, let me show you how I did this really cool thing. I was like, yo, teach me how to do that.

That's so sick. And then like 30 videos in, I was like, oh my God, these are all ads for CapCut. But now they've got me talking about it because I was like, that was so dope that I actually want CapCut ads in my feed because I want to know those tutorials. And I keep sharing them with the team to be like, yo, did you know that you can do this?

You know, you can do this. Hey, here's a really cool way. Super dope trends that we could be using. So that is like, we tried to be that with like recipes and stuff at the beginning, but we didn't know how to do it where it was like, I'm actually showing up on your interest graph feed.

That's another thing. We were social graph back then. So interest graph feed, working with influencers for them to create content in their native style. That's super entertaining where even though it's an ad, people like, yo, give me more, give me more, give me more.

So some of it is like a nuanced twist. And then some of it is just very, very different. Well guys, those are wonderful questions. I hope that helped all of you guys.

There are many rabbit holes we could go down. Be sure to drop in the comments. If there was a rabbit hole in there that you want to be hearing more on, we can do another video. If you haven't already, be sure to subscribe.

And until next time, my friends, be legendary. Take care. Peace. Let's talk about a pattern that is guaranteed to be killing your progress.

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