Afford Anything - The World's Richest People Are Weird by Design, with William Green

Episode Date: January 24, 2025

#576: The world's greatest investors have a secret: they're weird.  When one young fund manager met Bill Miller for the first time, he refused to shake hands. Instead, he locked eyes and declared: "I'm going to beat you, man." William Green joins us to share what he's learned from decades of conversations with investing legends — from the hyper-competitive to the deeply philosophical.  These conversations reveal that success isn't just about strategy; it's about understanding yourself and playing to your strengths. The best investors are mavericks who think differently. They're willing to look strange, be lonely, and diverge from the crowd. Templeton demonstrated this during WWII. When Germany invaded France and markets crashed, he bought 104 stocks trading under $1 — including 37 bankrupt companies. His contrarian bet paid off 5x when markets recovered. But Green emphasizes this isn't just about getting rich.  His decades of interviews reveal deeper wisdom about building a good life: Great investors focus on what they can control. They can't predict markets, but they can manage their behavior and emotions. They embrace simplicity. Jack Bogle advocated owning low-cost index funds rather than chasing complex strategies. They understand odds and risk. Howard Marks asks "What's the consequence if I'm wrong?" before making decisions. They play to their strengths. Charlie Munger says if you're 5'3", don't try to be a pro basketball player. They live below their means. As investor Tom Gaynor notes, "If you're living within your means, you're already rich." Green shares a practical framework called HALT PS — don't make important decisions when Hungry, Angry, Lonely, Tired, in Pain, or Stressed. This applies beyond investing to daily life. The conversation explores how to build resilience before market crashes through healthy habits, self-awareness, and preparation. Green notes that many successful investors practice meditation and read widely across disciplines. Even legends make mistakes. Bill Miller saw his assets drop from $77 billion to $800 million during the 2008 crisis. But he rebounded by staying true to his principles and learning from failure. Green's key message? Focus less on getting rich and more on building an "anti-fragile" life aligned with your values and strengths.  The best investors aren't just good at making money — they're skilled at creating lives of meaning and purpose. Find more from William Green at williamgreenwrites.com or on his podcast Richer, Wiser, Happier, featured on the We Study Billionaires feed. Timestamps: Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths. (01:00) Meeting Sir John Templeton in the Bahamas (04:02) Templeton's WWII stock strategy during market crash (12:00) Wisdom vs survivorship bias in investing stories (14:55) Why great investors recommend index funds (23:34) Prioritizing freedom over wealth maximization (39:27) Bogle's client-first philosophy (51:32) Living below means for market volatility (01:01:37) HALT PS conditions leading to poor choices (01:06:45) Using data for better decision making (01:11:13) Bogle's emphasis on simple investing (01:14:30) Danoff's "stocks follow earnings" strategy For more information, visit the show notes at https://affordanything.com/episode576 Learn more about your ad choices. Visit podcastchoices.com/adchoices

The best investors are often weird. William Green would know. Our guest today, William Green, spent 25 years interviewing some of the world's best investors, including Charlie Munger, Howard Marks, and Sir John Templeton. He found that world-class investors are mavericks who have what he calls, quote, the willingness to be lonely. He's discovered the value in being weird, because it reflects how the best investors think and why they succeed. He joins us today to talk about what he's learned from the world's most iconic

investors about managing risk, building resilience, and succeeding in the long term. Welcome to the Afford Anything Podcast, the show that understands you can afford anything but not everything. Every choice carries a tradeoff. This show covers five pillars, financial psychology, increasing your income, investing, real estate and entrepreneurship. I'm your host, Paula Pantt. I trained in economic Reporting at Columbia. Today's episode covers one of the two eyes investing. And with us today, as I mentioned, is William Green, who has spent 25 years interviewing world-class investors and has a wealth of knowledge to share with us that comes from those conversations. Welcome, William. Hi, lovely to see you. Great to see you too. You met Sir John Templeton when he was 85 years old.

Tell me about that. Templeton was this extraordinary figure who I think you could, easily claim was the greatest global investor of the 20th century, he had gone to live in the Bahamas, partly to detach himself from Wall Street, and partly because he was very devoutly Christian, and he said there were more churches per capita there than anywhere else. I don't know if that's actually true. And he had structured this very unusual life in a place called Lifeord Key. So you can imagine, as a young journalist, I was super excited to go to this place where people like Sean Connery lived and the Aga Khan and I think Princess Grace of Monaco. So it's quite exotic. So these were in the days where magazines could afford to send you on these expensive trips around the world.

About what year was this? Oh, this is... Ballpark. It's got to be at least 25 years ago. I'm now 56. I was about a 30-year-old journalist. I had a young child and I went to see this grand old man and he was sort of regarded as this sage. I mean, he was in his eight years. He was incredibly smart. He had been a road scholar. He was this trailblazer of international investing. And one of the first things that happened is that as I'm walking along the beach, I see this guy marching in the water. So he's sort of power walking in the water, wearing this crazy cap with these ear flaps and his face is slathered in cream. And so I'm looking at this guy who's supposed to be sort of the great sage. a master of investing. And he looks kind of strange to me, like a little bit weird. And when I came

back to New York, I remember just thinking, oh, that's kind of the secret. These guys are weird. They're these oddballs, these mavericks, the great investors. There's something very non-tribal about them. They're idiosyncratic. They're always willing to go against the crowd. And when I thought about Templeton exercising in this strange way, I thought, well, it's quintessentially Templeton. He's found this very efficient way to exercise in beautiful. water for free, and he was tremendous cheap skate. I mean, even as a multi-billionaire, he refused to fly business class because he didn't want to squander money that God had entrusted him with. So he was a very idiosyncratic free thinker. And I think that's typical of most of the great

investors that I've met. I remember someone saying to me once, if you look to people like George Soros, Warren Buffett and John Templeton, what they had was what he called the willingness to be lonely. And I think that's true. It's this willingness to depart from the crowd. And it makes sense if you think about it because to beat the market, you actually have to diverge from the market. So you have to be a little bit of an oddball. You've got to not want to hide in the crowd. You've got to be someone who's willing to defy convention. And Templeton had done this in the midst of turmoil in World War II when the world seemed to be ending. And I think Germany had just invaded France.

And the market just crashed, as you can imagine. There was a very great risk that Germany would actually invade Britain as well. And at this point of maximum pessimism, as Templeton saw it, he made this unbelievably aggressive bet where he bought something like 104 stocks all trading at less than a dollar a share. And when he put in the order, the broker said, 37 of these companies are bankrupt. And he said, no, no, I want to own those as well. Because his view was if the world didn't end, these companies that had been really devastated, would have going to bounce back. And he ended up making about five times his money over the next few years off this portfolio. So that ability to think for yourself to depart from the herd is

incredibly powerful. So I have several follow-up questions that come from that. The first being when we hear that story, and particularly when we hear about the aggressiveness of that bet, how do we know that what we are hearing is wisdom rather than survivorship bias? I think it's a huge issue. You never really. know. So what I tended to do was to focus on people who had endured for decades, people who in some way reflected timeless principles. So even if they ended up doing badly, you would say, well, the ideas that they illustrate are really, really powerful. So you think of someone like Templeton. And when I asked him to explain his success, he took me through about, I think, six

lessons, one of which was simply to stay away from your own ignorance. Another was stay away from your own emotion, beware of your own hubris, your tendency to think you know more than you do, or your tendency to think you have this talent to pick the very best money manager. And so whether or not we're focusing on the handful of people who survived through luck or through skill almost doesn't matter. Those principles are incredibly powerful. Now I happen to believe that they did, that it wasn't an accident, that they survived. that they survived and endured because they were really good, they were really smart. But there's so much luck involved.

And I think all of the great investors have been pretty humble about admitting the role of luck. So Templeton said, look, I made about half a million investment decisions over the course of my investment career. And as he put it, a third of them were the opposite of wisdom, which was his euphemism for, I got it wrong, I screwed up. And so if someone is brilliant as Templeton, who was one of the great thinkers of his generation, was wrong with third of the time, you have to say, okay, this is a dangerous business, this is something where we are going to mess up. So really the question becomes, how am I going to protect myself from my own hubris and from my own blindness and from the fact that the future is uncertain? And so there was a great bond investor, a guy known as the King of Bonds called Jeffrey Gunlack, who said to me that he's wrong about a third of the time. And this is not a modest, humble guy.

This is someone who knows how smart he is. And he said, the question that he asks before making any investment is, what's the consequence if I'm wrong? So if we live in a very risky, uncertain world where we don't really know whether we're that good, whether we're that smart, whether we got lucky, it's very sensible, it's very prudent just to say, okay, let's assume that I'm not smarter than Jeffrey Gunlack and I'm not smarter than Sir John Templeton, which I think is a pretty safe bet. I'm likely to be wrong at least a third of the time. So I've got to set myself up so that I survive my own stupidity and hubris and blindness and just bad luck. And so one of the natural assumptions that you have to make, the natural conclusions is we're better diversify. I better make sure that I don't have all of my money in one cryptocurrency or one stock or one asset class or one country or one currency. So the sort of overreaching that gets people in trouble again,

it again, is actually pretty avoidable. You say we better diversify, but wasn't it, was it Charlie Munger who said, put all your eggs in one basket and then watch that basket? Yeah, Charlie famously said you could have a well-diversified portfolio with just four stocks, which is all very well if you're a genius, as Charlie is or was. But, you know, the last time I spoke with Charlie, he said, he said, look, there's a problem with concentration. There's a problem with having a very concentrated portfolio, which is, if you're wrong, if your judgment is bad, if you make a bad bet, you're in deep trouble. So if you're

incredibly good, it's smart to concentrate in many cases. But even then, you have to be aware that there's tremendous bad luck. I mean, there was a moment where I talked to, I talked to Munger about Alibaba, for example. And so I had this two-hour Zoom breakfast with Charlie Munger, who, you know, one of the greatest investors of all time. And Lou Simpson, who had probably an even better record than Buffett for many years and was his designated successor after running Geico for many years. So these were really great investors. And both of them said on that call that they'd been buying Alibaba. And Charlie said, yeah, it's so cheap, I would be all in if I had more cash. And Lou Simpson told me he'd bought it the day before and was like,

yeah, so it'll probably go down 50%. And so I then leave this meeting and I'm like, wait a second. So I have two of the greatest investors of all time telling me that they love Alibaba. And they also told me that they love my book. So I felt like really predisposed to revere them. You know, I was so high. And my judgment was not good at all. And I went off and bought Alibaba. And last time I checked, it's down, I think, 55%.

So even someone as smart as Munga was wrong sometimes. And we don't know what will happen. I mean, Alibaba may come back over the next few years. There's a pretty good argument that it's very cheap. But it shows you how risky and uncertain the markets are. And so I think you always want to have some degree of diversification. I remember a guy who had a hedge fund that had all of its money in one stock that was a natural gas company. And the price of natural gas went the wrong way. And he ended up running a bar. So it's just really helpful to remember. these stories. And just to internalize the idea that we live in an extraordinarily uncertain world where something like COVID can happen. So you have to set yourself up in a way that recognizes that we live in an uncertain world. And especially at times of great complacency and euphoria, it's very striking to see that someone like Warren Buffett goes in the opposite direction, that

he's sitting on over $300 billion in cash, that he's not gunning the engine and saying, yeah, It's going to shoot to the moon. He's actually reducing his aggressiveness at times when everybody else seems to be becoming a little more complacent. That sounds great in theory, but how do we avoid being contrarian for contrarian's sake? In other words, how do we arrive at the contrarian viewpoint through first principles rather than simply reflexive zagging? I think one of the things is actually to ask yourself whether you're equipped to play that. game of being contrarian in the first place. And so one of the great lessons for me, as I interviewed all of these famous investors, was to realize, well, I'm actually not them. I'm not wired like them. And so I probably shouldn't be playing the game in the way that they're playing it. So they tend to be very unemotional. They tend to be very obsessed with probabilities. They don't really care

what the crowd is doing. They'll sit there quietly analyzing the probabilities. I'm a fairly fearful, neurotic Englishmen from a family of Jews who fled from Russia and Ukraine and Poland. I have a lot of fear built into my psyche and my DNA. We always felt like the world was an unsafe place and you never knew when you would have to pick up and run from a particular country. And so to understand that about my nature, to understand that actually I'm not a cool, calm, dispassionate person analyzing the probabilities is very helpful. So then the default position for me is to say, well, I shouldn't really be buying individual stocks. I'm not really equipped to do it. I shouldn't really be making these big contrarian bets. And so in contrarian, in moments of great volatility, I know enough not to sell.

I'm able to do that. I've never sold during a downturn. So I'm able to be contrarian in that sense. I've tried to buy, which has turned out to be good. I've never really bought enough. So there is a contrarian aspect. But it's never really worked out when I've tried to buy individual with the sole exception of during the COVID crisis when I bought Berkshire Hathaway several times, because I just thought, well, it's going to survive, it'll be okay, and he's sitting on lots of cash, I'll be all right. And so other than that, I really tried to stay out of picking individual stocks and being contrarian because I just know I'm not going to do it that well. So part of what I'm doing, which I would encourage your listeners and viewers to do, is to be very honest about

your own capabilities and how interested you are. I mean, the people I'm writing about are so obsessive and fanatical about what they do and so competitive. I'm totally obsessive and fanatical about writing, reporting, interviewing, preparing for interviews, things like that. That's a game I can play. That's a game I'm equipped to win that I care about a great deal. I don't really want to play the game of picking individual stocks. And this is a recurring theme with a lot of the great investors. I remember Charlie talking about when someone asked him for career advice. He said, look, if you're five foot three, don't become a professional basketball player. You'll be competing against people who are like seven foot eight.

He said, you've got to find a game where you have tremendous advantages and where you're really deeply interested. So I would say for most of us, the default position should just be you own a couple of index funds. You keep adding to the pot regardless. whether the market's getting killed, whether it's going up, you just keep adding to the pot. If you can add more when the market is getting killed in the knowledge that eventually it's likely to come back and diversify and live within your means. If you do that, you're likely to end up doing really well. These guys, they're playing a different game where basically they're waiting for mayhem. They're waiting for these moments of disruption when everyone else is panicking and they're emotionally equipped to handle.

it. I'm just not emotionally equipped to handle it. Right. And there was someone who said that most people should be investing in index funds most of the time. Yeah, Howard Marks said that. And it's very interesting that actually, if you ask people like Bill Miller, Howard Marks, Joel Greenblatt, these legendary investors, they all recommend indexing for most people. Joe Greenblatt, who averaged something like 40% a year for 20 years as a hedge fund manager, he would make these very, very concentrated bets where he would have most of his money in six to eight stocks. But he said, look, I knew exactly what these businesses were about. I knew they were so cheap, they were so undervalued that if they went down 20, 30 percent in a matter of days, which they often did,

I knew what I owned. I was okay. But he said, for most people, if you don't know how to value a business, why on us would you think that you should be in this game? So if you don't really know how to value of business and you're buying individual stocks, it's like walking into a dynamite factory with a lip match. And he said, you might survive, but you're still an idiot. One of the things that you just want to concentrate on throughout your investment career is just to say, I'm going to reduce the number of things where if I screw up, it's like walking through a dynamite factory with a lip match. Think of people who invest much more money than they can afford to lose. Think of people who invest money that they're going to need in the next year or two in the stock market.

There have been periods where the stock market's gone nowhere for 10, 50 and 20 years. You just don't want to be taking unnecessary risk. You don't want to be using leverage, having tons of debt. So if you generally avoid most of the dumb things that can blow you up, you're much more likely to prosper. So a lot of good sense in investing is actually a matter of survival. You know, the very first thing you want to do is survive and continue playing the game. And you use the word game intentionally because many of the best investors not only see investing as a game, but also in their spare time, card playing enthusiasts.

Yeah, exactly. It's really striking. You look at people like Charlie Munger, Warren Buffett, they're obsessed with playing bridge. you look at Howard Marks. He loves playing backgammon. I remember Peter Lynch, the legendary investor from Fidelity, once said to me, I asked him for book recommendations. And I was slightly shocked when he said, no, you'd do much better just to play games like poker than to read any investing book, because you'll learn more about probability from playing poker. So you see this again and again, because it's really about playing the odds. And so the greatest of the game players really was this guy called Ed Thorpe. And Ed Thorpe was famously the guy who actually figured out how to count cards at Blackjack. And he also figured out how to beat the casino at Roulette, which is kind of impossible, right?

So he and this legendary guy from MIT, Claude Shannon invented, I think, the first wearable computer. And he would actually trigger it with the big toe in his shoe. And he could see how fast the rotor wheel was going around and how fast the ball was going around the rotor wheel. And so he had slightly better odds in judging which of the pockets. it's the ball with Landon. So he then sets have a hedge fund that didn't have a losing quarter in 20 years. So an absolutely extraordinary game player. And he said to me at one point, look, when it comes to gambling, if I don't have an edge, I don't play, which is quite sort of shocking if you're someone like me and you're a regular investor and you start to think, well, wait a second, do I have an edge? And I started to

think, well, actually, maybe I have an edge in the sense that I've interviewed many of the famous investors. So it's possible that I have slightly better judgment than usual in terms of selecting great investors to invest with because I sort of know some of the things to look for. But even that, I have flaws in my judgment, like the fact that I tend to look for the best in people. I tend to like people, which is very helpful as a journalist, right? As an interviewer, you're empathetic, you understand the way people's emotions and minds work. Not so good as an investor where you're supposed to be very detached and just quietly playing probabilities. But I think that's about as close as I come to having an edge. But the really interesting thing then is that I said to Ed Thorpe,

so if you were approaching life as a game and you were trying to stack the odds in your favor, what would you do? And this is over, I guess, a three-hour breakfast at a beautiful hotel in Manhattan and we're sitting there eating our eggs and drinking cappuccino. I mean, he's one of the coolest guys you've ever seen. He was in his eighties already, but he's wearing like this black leather jacket and he's sort of stubbly and he was about to marry someone like 35 years younger than him because his first wife had passed away. I was at breakfast with one of the Rolling Stones. And he says, look, who you spend your time with is probably the most important thing of all. So as he's thinking about how to stack the odds in your favor as a game player, not only in

markets, but in life he's thinking it really all comes down to relationships. And so for me, often the most important lessons from the great investors ended up being life lessons. like that. I was saying, okay, so yeah, how do I learn how to invest? But while I've got this guy who's one of the greatest game players of all time, let me also figure out if there are ways to tilt the odds in my favor in terms of actually having a happy and successful life. How is that happiness or success defined in terms of life? Because going back to Templeton, his exercise of his approach to life was one that was so disciplined, so regimented, that there would likely be a lot of people who would look at it and say, wow, I don't think I want to have

that degree of mastery over every iota of my day. Yeah, I have to admit, I was pretty put off Templeton back then because I was, I wouldn't say lazy, but I was sort of scattered. My mind's all over the place, whereas Templeton was hugely disciplined, even if he had a negative thought. He would sort of cast it off and say, go back to whence you came. He wouldn't allow himself negative emotions, negative thoughts. He wouldn't allow himself to waste time. So I remember once interviewing someone who worked with him, the first time I met him, he said, meet me at 411. I have another meeting at 417. So I looked at this and I thought, this is not how I want to live. There's something a little bit joyless and kind of stern about it. But actually, the truth is, he was incredibly joyful. He said to me,

he was the most joyful he'd ever been in his life. And he was living in a way that was aligned with who he was. with what his values were. And I would say I see that again and again with the great investors, that it's about being aligned with your own peculiarities, your own passions, your own idiosyncrasies. And so you think of someone like Irving Khan, who died at the age of 109, and literally would continue to commute to his office in Midtown Manhattan by bus in his hundreds. And he wanted to work to the very end. It's extraordinary. And someone like Irving Khan, I interviewed him through his grandson who worked with him because Irving, when I interviewed him, he was a hundred and eight, and it was a few months before he passed away. And so I gave lots of questions to his grandson

who talked him over several days and then typed up the answer and gave them back to me. And so I got this sense of Irving as this guy who didn't care about money. He didn't care about going to the opera. He didn't care about going to the theater. He loved reading. He loved books. He loved solving puzzles. He loved thinking about business and technology and change. And so he had set up his life in this way where he was just doing what he loved. His son once said to me, having had way too much cash in his account. He would have optimized his results more if he'd been more aggressive. He wasn't trying to optimize. He survived. He made a fortune. He started investing in 1929, right in the middle of the Great Depression. So he endured for all of those decades, doing

something he loved, working with his son and grandson, who both joined his firm, creating a business that served his clients. And he didn't need to go eat at the most expensive restaurants. He used to boast, I think, that he would go to this Chinese restaurant with his wife, I think, in the 30s that cost him like 50 cents. And then he would pause and say, for two. He had structured his life in this way that was true to what he valued. And this has had a great impact on me because I'm not going to be a billionaire. And I don't really care. I don't really want to be a billionaire.

If I cared that much about money, I wouldn't have become a writer and a podcast host. That's not what I'm optimizing for. But I want to have a life that's true to who I am. And so one of the things that I'm optimizing for is freedom and independence, total autonomy, not to have to work for anybody I dislike, not to take orders, not to work on projects that I don't like. And so for me, just understanding that the real goal is to construct a life that's true to who you are in all of your idiosyncrasy has been immensely valuable because it's not actually necessary to have a vast amount of money to do that.

What's necessary is to have self-awareness and then to structure your life in a way where you're saying no to things that are not right for you. How do you know when you're in that discovery phase, how does one know that that something is right for them or not right for them. There's the obvious, heck yeah, heck no, right? There are those obvious endpoints. But what about that murky middle? It's hard and nothing I planned really came about. My life has gone in such strange directions. I mean, I never had any intention to be a financial writer. I went to Oxford and studied English literature and then moved to New York and thought it become a famous novelist or screenwriter or something like that.

But weren't you obsessed with horse racing? I was. So I was obsessed with gambling. I love the idea of making money without getting my hands dirty. So I was always a little bit lazy and a little bit smart alecky and subversive and free-spirited. I was sort of a rule breaker. So there was something about investing that resonated with me. But it was also something about these maverick characters that resonated with me because they were these free thinkers who had figured out how to crack the code to create a life where they were basically free. And I realize in retrospect, that what I was doing when I was writing about these guys was trying to figure out, how do I construct a life that's where I'm free, where I don't have to be subservient to

anyone. And that isn't the most important thing for certain people, but for me, it's hugely important. But I would say one thing that's been very valuable to me to go back to your question about how you figure out what's right for you is I was very struck when I've interviewed Ray Dalio a couple of times on the Richelweiser-Havir podcast. And the last time I interviewed him was a about this principles workbook journal that he'd produced so you could actually figure out your own principles for how to operate. And I remember this personality test that he and Adam Grant had created. And I was totally shocked when I looked at the results. I was so proud of myself that my marks for things like creativity and conceptual thinking were very high. And then my marks for systems

and processes were literally, I think, in the bottom 1%. I mean, I was so bad at this stuff. And so one of the things that Dahlio made very clear to me, both in our conversations, was that I had to have this self-awareness to look at what I was actually good at and bad at. And then as he would put it, you find suitable paths to play to those strengths and to avoid those weaknesses. And so I think it starts with self-awareness, whether it's through a personality test, whether it's through going to therapy, whether it's through talking to friends who know you better than you know yourself. you need the self-awareness to know that you're then able to play games that you're capable of winning. And so one thing I realized, I meet once a week with three friends who are very successful investors

and also incredibly thoughtful, evolved human beings. And I was complaining recently about how overwhelmed I was by the number of projects I was working on. And he's a, a kind of very well-known former hedge fund manager. And he said to me, William, you love the Maelstrom. You would be so bored if you weren't in a maelstrom. And he's like, you just have to learn to enjoy it, recognize it, you enjoy it. And it was very revelatory to me. I realized, oh, I actually understand myself less well than my friend understands me.

And so I think you have to really be self-aware and then ruthless about saying, I'm going to play games that I'm suited for and that I value. I mean, I'm not actually interested in sitting dark room every day going through annual reports. That's not what interests me about investing. I have plenty of friends who are interested in that. I'm much more interested in sitting around reading obscure books about Tibetan Buddhism and Kabbalah and Stoicism and things like that. And then figuring out, how does this connect to what I'm learning from the great investors about how to build a happy and abundant life? And so I don't have to fake that.

That actually is what I'm interested in. So I think for our listeners and viewers, as they're thinking about how to construct a life that's true to themselves, you know, look at the things you would do not for the money. You know, if you said, no one's going to pay me to read this book or to think about this problem, what would you actually do? And I interviewed a famous investor the other day, a guy called Bill Priest, who's on the Barron's roundtable, and we spent about two hours talking. And I came away just totally high, just thinking, what an amazing thing that I get to talk to this extraordinary guy in his 80s, really smart, really wise, who's lived through so much. And I get to ask him kind of important

questions, personal questions, and study his life and learn from him, and then share that with other people. You know, for me, that's just a really beautiful thing, and that's deeply idiosyncratic that that's what I care about. And it's, it's taken me quite a long time, actually, to figure out that that is what I care about. But many of the great, you mentioned studying Kabbalah and Stoicism, many of the great investors also do the same.

They draw from a wide variety of disciplines and then pull. pull those insights into their investing thesis. Exactly. They're polymatic, they're continuous learning machines to use a phrase that Munger used about his partner Buffett, and they'll study anything that could conceivably give them an edge. And so if they want to study the science of habit formation, because it's going to give them an edge, they'll do that. If they think that being calmer can help them and give them an edge, they'll become really obsessed with meditation. I know so many successful investors, fund managers, who've become obsessed with meditation. I mean, this group that I meet with once a week, we're discussing this ancient Tibetan Buddhist text that's about

we're studying meditation and equanimity, how to build equanimity. So I think it's just this pragmatic willingness to study anything that could help you, that could give you an edge. And there's a sort of, it's almost, it's a loaded word, but there's almost an agnosticism about it, where they'll just look at something, and to use a phrase Charlie Munger used, he'll say, I observe what works and doesn't work and why. So he's not dogmatic. It's not looking at things and saying it must be this way. This must be true.

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It's about not being just one thing, but many things for our customers. Big Bank Muscle, FinTech Hustle. That's your commercial payments, a fifth, third better. You talk about the edge. Much of successful investing is figuring out where you have that edge and staying within that realm where you have that edge. How do you identify that? And particularly for anyone who's listening to this,

how do you know if you have an edge and if so where? I asked that exact question to Ed Thorpe, this guy who is this genius gambler, an investor. And he said, if you don't have a rational reason to believe that you have an edge, then you probably don't. And I found out a little chilling. I sort of stopped in my tracks and was like, oh, God, do I not have any edge at all? And one of the things that he said to me that was very, very helpful is that you can give yourself a natural edge by investing in index funds and writing index funds, and writing index funds up over the long term, because chances are that because of the growth of the economy, because of productivity growth and the like, the market will go up in the long run.

It's not certain because we live in an uncertain world, and there are markets in other countries that closed. I mean, there are markets that closed during World War II, for example. There are markets where you haven't made money in decades. If you had your money in Cuba or something, life was not great. Japan's economy over the last few decades. Yeah, Japan went nowhere for decades. So this is, again, it's a reason to diversify. But there is this assumption that if you invest in index funds for the long term and you keep adding to the pot,

as Ed Thorpe would say, you're giving yourself this kind of natural edge because you're riding the upward trend of the markets at an extremely low cost. The problem is that most of us end up paying toll keepers along the way who overcharge, for services that they can't actually provide. So they charge very high fees, they charge high transaction costs, or they conceal the cost. So even if you think you're getting a trade for free, maybe there's basically a toll concealed in the bid ask spread. You know, there are all sorts of ways in which Wall Street can conceal how it's taking advantage of you. The thing about companies like Vanguard or like Schwab or Fidelity with their index funds is they're giving you this extraordinary ability to stack the odds in your favor. So I think once you're aware of the fact that the market does tend to go up in the long run,

if you can live within your means and keep adding to the pot and be smart about not trying to time the market and not trying to jump in and out, not incurring big tax bills by jumping in and out, not eviscerating your portfolio by loading up on some racy asset that is then going to blow up, you'll do well over time. So I think that's kind of the, there are things that you can control. Is that an edge? Maybe there's an edge that comes from self-awareness and honesty with yourself and just saying, like for me to say, I'm never going to be really good at systems and processes. That is not a game I can win. Let me stay away from that. Let me focus on learning stuff and figuring out how to share that knowledge. That's a game I can succeed at.

So there is an edge if you insist on playing games you can win. Right. And one of the investors that you spoke with said something to the effect of, if you maintain a slight edge and live below your means, over time, you basically can't help but succeed. Yeah, I think it was Tom Gaynor, who's the CEO of Markell. And he then said, look, if you're living within your means, you're already rich. And then he said an extraordinary thing to me. We were talking about his father, who was a great hero of his. Tom is CEO of Markell, and it's in charge of 20,000 employees. He's been an immensely successful guy. And he said to me that his father is the richest man he ever met. And this is a guy who knows people like Buffett and Munger and Howard Marks and all these people very well, all of these multibillionaires. And he said, that's a psychological. statement, not a financial statement. He said, my father had everything he wanted. His father raised him on a farm, I think, in Salem, New York. And it was, I think, a hundred acre farm. And he, I think, was an accountant. He'd been shot during World War II in the knee. And he'd survived. And he did some property deals, but they were not a big deal. But he was happy with what he had. And so I think also that's a really important realization that there are so many people in the investment business who are chasing

happiness in the belief that it's going to come from more. If only have more money. And I see again and again that that's not the case. So it's interesting when Gaynor tells you, no, no, the richest people I know are not Jeff Beez-Oss and Musk and Buffett and the like, it's my father because he had enough. Right. And that is reminiscent of the opening of one of Jack Bogle's books, the title of the book was enough. Yeah. And it opens with this anecdote about Kurt Vonnegut, throwing a party. And someone said to Vonnegut, look, I have all of this and I have all of this and I have all of

this and I basically was saying, hey, I'm so much richer than you. And Vonigot replied, yes, but I have something you will never have. I have enough. Yeah, it's a great story. And I interviewed Bogle many years ago. And there was an extraordinary moment. I was sitting in the time life building where I was working at the time. must have been in my late 20s. And I called him, and I was talking to him about his mentor.

And his mentor was a mutual fund person. Yeah, he was one of the pioneers of the mutual fund industry. He was a guy called Walter Morgan. And the phone goes dead while I'm having this conversation with him about his mentor. And I said, Mr. Bogle, Mr. Bogle, are you there? And he said, yes, yes, sorry. It brings a tear to my eye speaking about him. I sort of stumbled and I was like, how come? And he said, because I realize how much he did for me and how much I loved him. I tried to figure out what it was that made this guy, Walter Morgan, have such a profound effect on him. And he said, one of the great lessons from Walter Morgan, who's long dead, as is Jack Bogle,

one of the great lessons is that the shareholder was king. And Bogle said to me, there was a client who wrote to Mr. Morgan and said, I don't have a suit. Do you have a suit? And he said, my God, Mr. Morgan sent him one of his own suits. And so if you think about that mindset of really deeply caring about your client, that infuses Vogel's creation, which is Vanguard, which was set up not to be rapacious and maximize its fees at its customers' peril, but actually to serve its customers. And so part of what I'm trying to do in studying the great investors is figure out not only how to get rich, but how to live? How do you behave? What is it about Walter Morgan and about Jack Bogle that I want to honor and try to

internalize myself? And so because these were such wise, thoughtful people, and none of them were flawless. They have egos, and I can't tell you how many of them ended up divorced. These are not perfect people. I'm not trying to idealize them. But you study them and you get these very powerful clues about what actually constitutes a happy and successful life. And so I said to someone like Ed Thorpe as well, the great game player, do you have any regrets when you look back on your life? And he said, I don't regret any of the principal decisions that I made. It's a really interesting statement. That leads you to think, okay, so part of having a successful life is to look back and know that despite all of our flaws and foibles and mistakes, you tried to be a decent human being.

And on the whole, you treated people well and lifted people up. And that is part of having a successful life. And there's a beautiful Buddhist phrase where they talk about the joy of non-remorse. And so think about that. Like here's a guy, Ed Thorpe, who could have structured his fund so that he had enormous fees. And he just didn't. He didn't want to take advantage of his sharehold. And at a certain point, he didn't care that much about the money, and he just shut down.

He stopped managing money, just managed his own fortune. And so it wasn't about maximizing his own wallet. It was about solving problems that he found interesting, hanging out with people he liked, acting in an honorable way. And so that, I find increasingly the life lessons are what excite me. And it's funny because when I started out in my Twenters studying these guys, really, I just wanted to get rich and not have to work for anyone. And so it really was a game.

It was a sort of subversive, smart aleck game to see, if I think better than other people, will I become free? And I think as you get older, you start to think, well, yeah, I still want to become free. But it's not just free financially. I also want to be calm. I also want to be ethical. I also want to have good relationships. And so how am I going to have to behave?

in order to create that sort of life. So it becomes a much more soulful form of study, I think. Is there a distinction, do you think, between studying the great investors and studying great business leaders or great athletes or people who excel in any field, great scientists? I think you can study any microcosm and you can draw the same lessons. But there's something very distinctive about investors that I think part of it, we were talking before, about their pragmatism, the fact that they're open to studying whatever works and avoiding whatever doesn't work. I think part of it is that there's money at stake. The fact that there's so much skin in the game is really important because if I as a writer make a mistake, it's

embarrassing. But it's not terrible, probably. I mean, if I got sued, God forbid, and stuff like that, it would be pretty terrible. I wouldn't want that. But the stakes are relatively low for getting things wrong for misinterpreting things. But you look at someone like a legendary investor like Bill Miller, who I've interviewed for almost 100 hours over 25 years, probably the greatest mutual fund manager of his generation, an utterly brilliant man. He made an enormous mistake during the global financial crisis, the biggest mistake of his career. And the assets under management at his firm went from, I think, 77 billion to 800 million, and over 100 people lost their jobs because of a mistake that he made, an analytical mistake that he made. And his shareholders bailed out

the worst possible moment. And so they didn't get to benefit from the enormous rebound because he's truly brilliant. And so he's done amazingly since then. But most of them missed out on that because they lost faith and didn't stick with him. And so I think the fact that the stakes are so huge concentrates the mind. So someone like Miller comes out of that period with a greater respect for uncertainty. He said, I didn't realize just how wrong I could be. And he said, one of the things that happens is when you're right, right, right again and again throughout your career, you start to believe that you really have the golden touch. And he had beaten the market for 15 years running, which nobody in history has done. I mean, it's an unbelievable achievement. And so at a certain

point, you start to think, well, everyone thinks I'm golden. Maybe I actually am. And so he said, there's a certain kind of hubris that even though you're aware, even though you're trying to be humble, some of it seeps through. And he said, you know, you're on CNBC and stuff the whole time and everyone's asking you your opinion. You start to believe that you know stuff. And he said, when you blow up like that and you make such a huge mistake, he said, they stop calling. And he said, it's really helpful because you have to actually look at yourself honestly and see what you knew, what you didn't know. And so I said to him at one point in retrospect, you're kind of glad you were. went through it, and he's like, yeah, yeah, it was pretty cleansing. And so it really helped him

deal with his ego. And then he had this extraordinary rebound. And at a certain point, a couple of years ago, he said, I was looking at Amazon's financial statements. I said to Jeff Bezos, are these correct? Because if they are, I'm the biggest individual shareholder of Amazon, whose name is not Bezos. And so while everyone was saying what an idiot Miller was, he had quietly kept hold of this immense stake in Amazon. And then simultaneously, had built this immense stake in Bitcoin that's personally made him an unbelievable fortune. His average price was, I think, $500 a coin. And when I checked the other day, I was at $91,000.

As of the time we're recording this, it's dancing near about $100,000. I mean, it's totally crazy. But so in a way, the ability to make these very big contrarian unemotional bets that allowed him to beat the market for 15 years. is, then got him in trouble during the financial crisis, and then allowed him to make these massive bets on Amazon and Bitcoin. So that's just a different mentality than most of us have. A, he's smarter, B, he doesn't have much emotion. I mean, he has emotion about if he goes to the opera or something like that, he has emotion. But no emotion when it comes to investments. He's able to look at them just probabilistically. It's just like a probability machine.

And so there's something about that I admire tremendously, but also just his honesty. about having made mistakes and trying to learn from them. And the fact that, as he said to me at one point, he said he's proud of the fact that after he screwed up so badly during the financial crisis, he didn't curl up like a tortoise inside his shell and be afraid of making more bets. He said, I know that I have some talent for buying things

for less than their worth. And if I kept doing it, it would work out in the long run. And so he kept doing it. There's something also, I think, when I look at someone like Bill Miller, who I really admire tremendously, I originally was impressed with his ability to make money and to outthink everyone else. And in retrospect now, as a 56-year-old man, I look at him and I think, boy, the resilience of this guy, the fact that he took this public shaming when he screwed up

and came back. And there was something deeply stoic about it. And he was the guy who got me to read about stoicism 25 years ago because he was a philosopher himself. And so he was saying, look, I don't have control over my reputation, but I have control over my own behavior, my own attitude, my own mindset, my ability to learn from my mistakes, my ability to be honest about my mistakes and my ability to try get back the money for the people who lost it, who stuck with me. So again, it's like this shift from thinking just in financial terms to thinking, what can I actually learn from these guys about how to live? And resilience, the ability to endure the setbacks is an immensely powerful lesson from any of these great investors because the truth is they all went

through hell at different points in their life. It's not like a straight upward trajectory where you make tons of money and then you're free and you're not going to have problems with your marriage or your kids or and that's very helpful to know as well. It's kind of comforting to know. It's not just me who struggles. Right. Or problems with your own mind. Yeah, exactly. The ability to take care of your inner landscape, your own equanimity, turns out to be one of the keys to a happy life. A guy called Jason Karp, he had set up this hedge fund that I think was one of the fastest, if not the fastest hedge fund startup in history at the time. And he was a total star. And then it started to go wrong. And he said, even during the period when it was going right,

I was clinically depressed. And he shut down in the end. And as really, he's resched down in the end. And as rebuilt his life in a way that makes him really happy. And I think what he realized is that he was misaligned, that he was doing something where he was working unbelievably hard and he didn't have control because the markets are so unpredictable. And he said it was, he said, if you look at these experiments where they'll sort of have these brutal experiments on guinea pigs or whatever, and they pull a lever and either they get a cookie or they get an electric shock, he said at a certain point you induce insanity in them. And he's like, that's what the stock market was doing to me, because I was working incredibly hard and I didn't know whether I'd get a cookie or an electric

shock. He decided, well, no, I need to shift to a different way of living. And so he said, I want to set up a holding company, sort of like a Berkshire Hathaway type company, but within health so that he would be creating all of these companies that would help you live in a clean away, eat in a cleaner way, live in a cleaner way. And that made him really happy. And he has control over that. And so again, it was like understanding the fact that investing for him was going to drive him insane and figuring out how to create a life for himself that was better. And so he moved away from New York. He moved to Austin, Texas. He sets up this company. Last time I talked to him, he was really happy. It's really great. How does a person, the average person listening,

build the resilience that you're talking about. How do you practice that before the next great financial crisis? It's a wonderful question, and there are so many ways to answer that. One of the most important things to do is to set yourself up before a crisis so that you are not going to be out on the ledge because you're so over leverage, you're so indebted, you're so dependent on your job working out or your portfolio working out. And so it's a recognition that I live in an uncertain world where anything can happen. Let me set myself up so I'm living within my means, so I'll be okay, whatever happens. So I can write it out, whatever happens. So some of it is preparation, simply not overreaching. Then there's another aspect of it where I interviewed a guy called

Ken Schubenstein, who was a venture capitalist and private equity guy. He quit the investment business and became a neurologist. And so he's a real expert both on investing and on the brain. And so he said to me at one point, he said, there are four things that we know affect brain health and brain function. And so he said, we know good nutrition, good sleep, exercise, and meditation affect brain health. And he said, the key is to embed these healthy habits that give you more equanimity before the storm. He said, you don't want to wait.

until you're in the middle of the storm and then say, okay, now I'm going to start to meditate. Now I'm going to start to exercise. Of course, those things help you then. But to be aware that you want to make these habits a kind of daily practice before the storm, I think is very, very helpful. Another thing that he told me that I thought was hugely practical, again, like all of these guys, is a polymatic reader. And so he had studied a lot of addiction literature. And he said, One of the things he'd learned from studying addiction literature was a mnemonic, which is Holt PS, which tells you basically that a really good precondition for doing stuff that gets you in terrible trouble is to be hungry, angry, lonely, tired, in pain or stressed.

And so he said those are states, so he used Holt PS as a way to remember this. Those are states in which we tend to make suboptimal decisions. One of the things that he was doing to make sure he was more resilient was to say, okay, let me be self-aware enough to know what my own physiological condition is so that if I'm in a bad state, I'm not going to make some huge decision that I could regret for the rest of my life. And so when he quit the investing business and when it became a doctor, he had a four-day-old first child, and he went to be a doctor. I think it was an emergency room during COVID, and it was full of people on ventilators.

And he said, look, I took this lesson that I'd learned as a fund manager and applied it as a doctor. And so he said, I kept checking this checklist of mine, whole PS to say, well, okay, am I hungry, angry, lonely, tired, and pain, or stressed. And he said, my PPE equipment hurt. And he had a back injury when he was a wrestler at college. And he said, my back physically hurt. And he said, we didn't have adequate equipment. And I was so upset and angry about the state of the world. And I was sad that I wasn't with my newborn child. And so he said, because of this lesson, I had to say to myself, all right, I know that I need to slow down and make decisions as carefully as possible and do everything that I can to be more empathetic and compassionate to the patients and to their families, because I know that these are

conditions where I'll mess up. Again, it all comes down to self-awareness. If you're aware of your state, if you're aware of when you're likely to be unre resilient, you can compensate for it. It's unawareness that bites us where it hurts. You know, if you just go through life sort of blindly influenced by dopamine hits and your longings and your urges, you're in real trouble. I had a boss once as a journalist. It was an amazing writer, incredible writer. And he had been a heroin addict in a previous period of his life.

And he had once made a trade, he told me, where they, he called up the brokerage to make a trade. And they said, but you made the trade already. And he had no recollection of it. And they played him the recording. And I remember him telling me that on the recording, he said, lock and load, lock and load. And you listen to that and you think, oh, man, that's a pretty good precondition for loss. And I think one of the best things I ever did was get him to buy Birch Hathaway many, many, many years ago, which was a little more sedate.

But yeah, if you want to invert, just think of that attitude, lock and load and be like, let me be the opposite of that. You're more likely to be resilient. There's an implicit ego in a statement like that. Yeah, and just a lack of judgment. I mean, just to be at the mercy of your emotions, I think part of it, there is a wiring advantage that a lot of the great investors have over most of us that they are unemotional,

at least when it comes to money. And so to have the awareness, to look at yourself and say, am I am unemotional? How am I wired? Howard marks that he has an inclination to be fearful. He's a little more likely to be fearful. He said, my investors are not paying me to be a chicken.

And so I have to look at my own emotions and ask whether I'm being too fearful, whether that's coloring all of my decisions. So during the financial crisis, one of the things that he and his partner, Bruce Koch, did, is the world was falling apart. And it really did seem like it was going to go off a cliff edge. He said to himself, well, most of the time the world doesn't end. And he made this enormous bet. Oh, was he the one he wrote about on the day Lehman Brothers collapsed, made a huge bet. Yeah, I mean, that whole month, if I remember rightly, I think he bets on like $8 or $9 billion on toxic bonds at a time when nobody else would invest in this stuff because it seemed like the world would end. And he said, yeah, but if the world doesn't end, we need to have done our job, which is people are paying us to buy stuff when it's incredibly cheap.

And so part of it is this ability to look at the world probabilistically. and say, what are the odds here? If I'm right, is the upside sufficient to compensate for the potential downside? And so this ability to think of your whole life in odds in terms of odds. It's very powerful. Well, and that goes to another value that a lot of great investors share, which is an appreciation for asymmetric risk. Yeah. And actually one of the best applications of this in your own life, which is to say, okay, I want to have asymmetric upside, right? I want to invest in things where if it goes down, it's not going to kill me, but if it goes up, I'm going to do great.

But also, I want to avoid situations in my life where the downside is catastrophic, not just in investing, but in other areas. So if you start to think about asymmetric risk, you start to say, okay, there are all of these ways in life that we borrow from the future, right? like drink, drugs, overeating, stealing, cheating on our taxes, losing our temper, whatever it is, these things that give us a quick hit of energy, but somehow steal from the future. And so you have to look at these things and say, okay, so when am I doing stuff? That could be catastrophic, right?

So think of driving while texting. Think of driving when you had too much to drink. So I started very consciously and repeatedly to apply this kind of, mental model in my own life to say, okay, if I get in trouble here, will I survive or will it be catastrophic? Is the downside risk so great that I need to avoid this? And so if you think of these things, not just as being moralistic and saying, well, I better not do that because then, you know, I'll end up in hell or my wife won't like me or whatever the downside is, if you look at it and you say, that's a terrible bet. Like, do I really want to fill my life with bad?

bets that could end in disaster. I think that's really important. So it goes back to that question that Jeff Gundalak asked, which is, what's the consequence if I'm wrong? So I've had this multiple times where I would arrive at the train station out in Westchester, where I live, and my car would be there. And I'd have gone out to dinner in New York City and I'd shared a bottle or two of wine. And you'd be like, my drunk? And you'd sort of think, well, no, I'm definitely not drunk. You know, we drank, I drank a few glasses over maybe four hours. I'm okay. And then you just think about it. What's the downside if I'm wrong? Would I lose my license? Would I hurt someone? Would I get, you know, and you're just like, just not worth it. Let me call my wife. Let me call my son.

Let me ask someone to come pick me up and pick up the car tomorrow. So this appreciation of odds and the avoidance of catastrophe is huge. Just really prioritizing survival is really important. So yes, we want to make a lot of money. Yes, we want to be successful. Yes, we want to have amazing relationships and the like, but focus first on avoiding catastrophe. Right. Well, when you describe yourself standing at that train station in Westchester, looking at your car and thinking, am I too drunk to drive? I'm not sure. The other thing that strikes me is information gathering is huge. And so my senior year of college, I used to carry around a breathalyzer with me. And my friends all made fun of me because they were like,

you must be a big party. But actually, no, I wanted absolute certainty that I was good to drive. I did not want to leave that to chance. I wanted a reading. I wanted data and a reading to let me know in a dispassionate manner. Can I drive? Can I not? Ed Thorpe would be proud of you because when I was fact-checking the book,

I called all of the main characters. I interviewed there were about 16 major characters who were really, the center of it, and I went back and re-interviewed them and fact-checked during COVID to see how they dealt with it and what had changed. And I said to Ed Thorpe, this amazing game player, so how did you deal with COVID? And he said, thank you for asking. And he starts taking me through how he played the odds. And basically, he figured out before anybody else, before a single death had been reported in the US, he figured out that there would be 200 to 500,000 deaths over the next year in the US, because he understood numbers.

Because he understood probability. Yeah. And he calculated his own chance of death that's somewhere between 2 to 4%. Exactly. So he said, when it's something important, study the data for yourself. He's like, don't believe what other people are saying. If the government is telling you this is safe, that's safe, this isn't safe. Don't believe them.

Study the numbers yourself. So he was doing things like analyzing the data from Wuhan and looking at the number of unexplained deaths. And then he's looking back at the influenza pandemic from, whatever it was, 1917, 1918, that had killed his grandfather. And so he's inferring from that what happens when a pandemic forms, you know, what happens to the numbers? And so he very quietly buys up masks and all of this stuff, like a month before the shelves got cleared in all of these pharmacies and went and hid. So what it's really about is, as you were doing with the breathalyzer, it's looking dispassionately at the evidence, thinking for yourself, and saying, how do I stack the odds in my favor?

Well, maybe I'll survive if I drive without the breathalyzer and if I drive a little bit tipsy. Maybe I'll be lucky. But if you keep doing it, if you keep behaving recklessly, over time, you're liable to get in trouble. And so one of the things I keep coming back to is this line from Nassim Taleb, who said in one of his books, I think it may have been anti-fragile. He said, the fragile breaks with time.

So as you think about how to construct an anti-fragile life and an anti-fragile portfolio, you want to look at it and say, okay, what am I doing that adds fragility to my life? If I'm lying, if I'm cheating, if I'm treating people unethically, if I'm cheating on my taxes, if I'm getting angry at my kids or my wife, if I'm driving recklessly, if I'm texting in the car, I may get away with it, But if I keep doing this for decades, the fragile breaks with time. Whereas if I take the opposite approach and I say, okay, let me try to be kinder. Let me try to be more loving.

Let me try to be more compassionate. Let me try to understand where people are coming from, be forgiving and tolerant. Let me try to get these habits on my belt that I know are going to help me over time, whether it's meditation or prayer or volunteering or saving and living within your means. you're gradually stacking the odds in your favor. And so it's not that you know what the outcome is going to be. We still live in a very uncertain world, but you can stack the odds in your favor

through your own decision-making. And so this is one of the things that Ed Thorpe said to me. He's like, look at your health. He said, I think it was when he was about 30. He said basically if he ran like quarter of a mile, he wanted to kind of fall over and collapse. And so he said, gradually he started running for a few minutes a day. and then he ended up doing, I think, 21 marathons.

And he said, with your health, you're dealt certain cards. And then you have the choice how you play the cards. Like, do you go and get your vaccinations? Do you go for your annual checkup? Do you exercise? Do you? And I'm not saying any of this in a sort of proselytizing way because I'm terrible at things like exercise and the like. So I'm much better at meditating because I'm good at sitting rather than moving.

But just the understanding that there are ways in which you can do. tilt the odds in your favor is very powerful because I think sometimes we feel kind of powerless in this very uncertain world. And you, depending on your politics or your sense of geopolitics, you start to feel like, oh, it's all just so overwhelming. And I just keep coming back to it and thinking, okay, what can I control myself? I can't control what's going to happen in terms of the geopolitical situation, in terms of the economy, in terms of the political situation. But I can control my own behavior. I can control my own choices. I can try to get greater equanimity myself through whatever it is, meditation or exercise or helping others, not becoming sort of lost in

my own ego, but trying to focus on helping other people. And so you're just constantly trying to stack the odds in your favor. May the odds be ever in your favor. Thank you. And yours. Well, we're approaching the end of our time, but since I know that you've interviewed Jack Bogle, and there are many people who are listening to this, who are particularly fans of There are many people from the Bogelheads crowd who are members of the Afford Anything community. I was wondering if there were any other anecdotes or lessons about Jack Bogel that you would share. I think one of the most profoundly important things that I learned from Bogel is the power of simplicity. And he talked about Occam's Razor, which is this idea that usually the simplest solution is the best.

If all things being equal, the simplest solution is the best. And this has been an important insight in science, obviously. And he said, when you look at Wall Street, it's the opposite of Occam's Razor. He said, they're all trying to come up with these really complex ways to make money. Think of all the things that got people in trouble during the financial crisis, these things with exotic names, whether they were lions and prides or various exotic derivatives. They always love to give manly names to these things, lions and prides. You know that's a way to get you in trouble. And he said, actually, what you really want to to do is keep things as simple as possible. And he said, one thing you could do is you could literally buy one balanced mutual fund that had, say, 60% stocks, 40% bonds, or 80% stocks, 20% bonds, and just hold that and just keep adding to it. And so I found when I was writing this chapter on simplicity, my wife needed to make an investment in one of her retirement funds. And I just put it in one Vanguard fund that I think had an international. stock portfolio and a US stock portfolio and an international bond portfolio and an international

stock portfolio. And it was 80% stocks and 20% bonds. And I just thought Bogle would be proud of me because this is, I'm not trying to optimize here. You know, there are definitely better ways to make money. I could definitely make more. But it's such an elegant solution. It's very low cost, very low fees. You just keep adding to the pot and you'll do okay and you'll survive. And he said, by contrast, he saw so many famous fund managers over the years, they were like these meteors. And he said, then they would blow up and you'd see the ashes float gently back down to earth. And he said, I saw it happen again and again. And it's not that it's impossible.

It is possible to beat the market over very long periods of time. The people I write about, they've done it. It is possible. But it's not a game that many of us can play. If you want to play this game and you think you're wired to win, it, these are the rules of the game and you better understand this is what's worked. But it's perfectly logical to go and say, let me just do what Bogle did and invest at a low cost over a long period of time, keep adding to the pot and then go live the other areas of my life. You know,

try to devote my time to my relationships and to creating something and building something. And I think that's a perfectly logical decision. And I just happen to be torn between these two approaches. So there's a part of me that wants a simple life at a low cost and I just invest in index funds. And there's a part of me that can't resist the desire to play the game. And so after all of these years, I still invest with a handful of people who I think will beat the market. But I may just be delusional. But even people who actively participate in the market, and I think Warren Buffett is the prime example of this, the ones who are successful have a very simple philosophy.

I think simplicity is key. And I was very struck with this interview that I did with this guy, Will Danoff, who's a legendary investor from Fidelity, who was managing over $200 billion at the time. And I went to visit him in Cambridge. And here I was sort of thinking, okay, there's some kind of secret source that explains why he's beaten the market over five years, 10 years, 15 years, 20 years, 30 years. And really, he could reduce it down to three words, which were stocks follow earnings. And so all he was trying to do was, find a few great businesses where he said all things being equal, so long as I don't pay a ridiculous price over time, they're going to go up if the earnings go up. And so he made very, very early investments in Starbucks, very early investments in Tesla, Microsoft. He'd owned things like Berkshire for decades. It was simple. But the execution wasn't easy. But it's like saying, I'm going to lose weight by exercising more and eating less. I know that would be a good idea. It's been really hard. And so I think often, as Munger would say, investing is simple, not easy. And he once got up from a lunch with Howard Marx. And as he was leaving, he said to Howard Marks, anyone who thinks

this is easy as stupid. And I think it is simple in certain ways. The principles, the underlying principles are simple, but it's not easy. And if I think about someone like Danoff, he's so intense. and just that intensity is hard to replicate. I remember when he's been friends with Bill Miller for decades, and Bill Miller told me about the first time he met Will Danoff, and they went to some investment event, someone introduced him. Bill's a very gregarious, lovely guy, and he holds his hand out, and he says, hi, Will, and he said, Will Danoff didn't shake my hand,

and he just said, I'm going to beat you, man, I'm going to beat you. And so think of the intensity of that guy, Will Danoff. So yes, he has this very simple, underlying strategy. But he's running like crazy. And he said at one point, frankly, I care more. I think that's one of the things that when you're asking yourself what kind of investor you want to be, ask yourself, how much do I care? Is this how I want to spend my time? I'm really fascinated in the psychology of great investors. And I really like hanging out with great investors and talking to them. And I think it's a beautiful microcosm of life because it teaches you so much about what works in life

and what doesn't work and how to create a hugely successful but also truly abundant life. But I'm not that interested in sitting around analyzing the stocks. And so just knowing I can't compete with Will Danoff doing that. It's just not, that's not what I want to do. But he doesn't want to sit around reading obscure books about meditation and philosophy and spirituality. And so that's good. Play to your strengths. Play a game that you can win.

Well, thank you for spending this time with us. Where can people find you if they'd like to learn more? Thank you. It's been a great joy. Well, I have a website which I cloned from Michael Lewis because Williamgreen.com was missing. And so I saw Michael Lewis had Michael Lewis rights.com. So it's Williamgreen writes.com. So you can always go there. I'm on X, formerly known as Twitter, William Green 72. People are welcome to follow the podcast, which is the richer, wiser, happier podcast, which goes out on the feed of We Study Billionaires. I hope they'll read the book as well. I've had access to these unbelievably smart people.

And so I've tried to synthesize the most useful lessons. And it took me five years without a vacation. And so I think for people who actually want to learn what works in life, it's very powerful to go back and read books. So I think above all, I would encourage people to go back, look at the books, look at the resources in the back or at least other books to read. And it's like this low-hanging fruit that's out there if you want to take. take advantage of it. Well, thank you. Thank you. It's been a great delight.

Thank you, William. What are three key takeaways from this conversation? Key takeaway number one. Success comes from playing games that you can win. Most people aren't wired to be active investors. The key to being good at investing is to understand your strengths and your limitations and structure your life accordingly. I think one of the things is actually to ask yourself whether you're equipped to play that game of being contrarian in the first place. And so one of the great lessons for me, as I interviewed all of these famous investors, was to realize, well, I'm actually not them. I'm not wired like them.

And so I probably shouldn't be playing the game in the way that they're playing it. William Green talks about how Warren Buffett's business partner, Charlie Munger, says, if you're 5'3, don't try to be a pro basketball player. And it's an exaggerated way of saying, stick to your strengths. I think one of the drawbacks of K through 12 education, you know, oftentimes when children show strength in a particular subject area and weakness in another area, the grownups around them encourage them to spend more time in the areas in which they are weaker. So the grownups all say, oh, you got an A in this subject, so you don't really have to worry about it so much, but you got a C in this other subject. So we're going to make sure that you spend a lot of time here, and we're going to give you extra tutoring for that. The kid is encouraged to spend a lot of time in the areas in which they're weak, and they're trying to bring their, quote-unquote, weakness up to also be an A, see if they can pull that C into an A-plus.

Why not turn the A into an A-plus? Like, why not focus on that area of strength? And I know the pushback is that, oh, well, at that age you're supposed to be well-rounded. That's not the age at which you specialize. that's the age at which you develop a broad-based foundation and you need to make sure that you're adequately strong in all areas. True. But it's also equally true that the lesson that we as grown-ups are imparting to kids is that they

should try to focus on improving their weaknesses rather than try to focus on excelling in their strengths. And what these highly successful investors have done that is different, that is weird, that is out of the ordinary, is that they are hyper aware of what their strengths are. They lean into those strengths and they don't try to mitigate their weaknesses. They hire out, they delegate those weaknesses and lean into what they do best. So that is the first key takeaway. Key takeaway number two. Focus on what you can control.

In an uncertain world, build resilience by managing your own behavior and your own environment rather than trying to predict the markets. We still live in a very uncertain world, but you can stack the odds in your favor through your own decision making. And so this is one of the things that Ed Thorpe said to me. He's like, look at your health. He said, I think it was when he was about 30. He said basically if he ran like quarter of a mile, he wanted to kind of fall over and collapse. And so he said gradually he started running for a few minutes a day.

And then he ended up doing, I think, 21 marathons. Focus on what is directly within your locus of control and make small changes, stack those small wins, those small tweaks, one tweak a week over time, so that you can accumulate tiny gains. And by doing so consistently, you enjoy the compounding effect. of small consistent wins inside of your own locus of control. That's the second key takeaway. Finally, key takeaway number three,

flexibility is the only true security. The best way to handle market volatility is by setting up a lifestyle that gives you lots of flexibility and options. One of the most important things to do is to set yourself up before a crisis so that you are not going to be out on the, ledge because you're so over leverage, you're so indebted, you're so dependent on your job

working out or your portfolio working out. And so it's a recognition that I live in an uncertain world where anything can happen. Give yourself margin of error, give yourself wiggle room, and above all, stay flexible. The most important aspect of any financial plan is flexibility. Those are three key takeaways from this conversation with William Green. Thank you so much for tuning in. downloaded it yet, go to afford anything.com slash financial goals and download our free one-tweak-a-week guide. It is our guide for the year 2025 in which you make one tiny change in your financial life every week. Now, some of these are laughably small changes, like adjusting your thermostat by a degree or two, checking the tire pressure in your car. I mean, we're talking tiny.

small, but I mean, but when do you think of that, right? You're busy. You've got a million things to do. You're picking up the kids from school. You're filing your taxes. You're watching the game. Like, no one's thinking about are my tires properly inflated? But that's the kind of thing that can save you a bunch of money on fuel, right? That saves gas money at the pump. And so we have this guide. It's totally free. And it's one really small thing that you can do every week that's just sort of A small tweak in your day-to-day life that helps you shave just a little bit more money on the cost of groceries or gas. None of it's going to be breathtaking, brag to all of my friends kind of stuff. And that's exactly the point, because one tweak a week is the aggregation of marginal gains, stacking small wins.

and by doing this consistently, just one a week, every week over the span of the year, you could end up boosting your savings rate, let's say, by an additional 1% each quarter. And if you do that consistently over the span of the year, well, guess what? By the end of the year, you've boosted your savings rate by an additional 4 percentage points. That's huge. Just ask any financial planner. Go to literally any financial planner and say, hey, if a budget, person were to boost their savings rate from 16% of their income to 20% of their income.

And if they did that at the age of 40 and just did that consistently for the next 25 years, do you think it would matter? Literally any financial planner is going to be like, yeah, heck yeah, that would matter. Heck yeah, that would make a big difference. And so that's how the aggregation of tiny gains can over a long enough period of time be life-changing. of that is to say, download one tweak a week a week. It's absolutely free. Affordanything.com slash financial goals. Again, that's afford anything.com slash financial goals. Thank you so much for tuning in. I hope you enjoyed today's episode. If you did, please share it with your friends, with your family, share this with the people in your life. It's the most

important way you can spread the message of having great financial practices. Now, please remember to open up whatever app you're using to listen to this show and hit the follow button so that you don't miss any of our amazing upcoming episodes. And while you're there, please leave us up to a five-star review, write a few words, talk about what you enjoy about this podcast. We so appreciate it. And it makes a huge difference in growing this community. Coming up in the weeks ahead, we have an interview with Dr. Margie Warrell about how to manage risk and have more courage in the face of some scary market volatility. We have, of course, at the beginning of February, our first Friday episode, the monthly

economic update episode. And former financial planner Joe Saul Seehigh and I have a special episode coming up in which we are going to unpack a question about real estate, how to handle real estate that is in a disaster-prone area. We're actually going to dedicate a full episode to this. and really unpack what to do, whether you're a real estate investor or whether your primary residence is in a disaster-prone area. What do you do? And so we're going to be talking about that. That'll be our February 11th episode. So all of that is coming up. Make sure you're

following this podcast in your favorite podcast playing app so you don't miss any of those amazing episodes. Thank you so much for being part of this community. I'm Paula Pan. This is the Afford Anything podcast, and I'll meet you in the next episode.