Modern Wisdom - #183 - William Leith - Why Some People Become Ridiculously Rich

Episode Date: June 13, 2020

William Leith is a journalist & an author. Acquiring an incredible fortune is the goal of many, but what is the true cost of being stupendously rich? Expect to learn how to make money from The Real Wolf Of Wall Street Jordan Belfort, the downside of wealth from a Russian half-billionaire who lives alone in a British mansion with his butler, how to avoid risk by the hottest thinker on the planet Nassim Taleb and much more... Sponsor: Shop Tailored Athlete’s full range at https://link.tailoredathlete.co.uk/modernwisdom (FREE shipping automatically applied at checkout) Extra Stuff: Buy The Trick - https://amzn.to/2BJK959 Take a break from alcohol and upgrade your life - https://6monthssober.com/podcast Check out everything I recommend from books to products - https://www.amazon.co.uk/shop/modernwisdom - Get in touch. Join the discussion with me and other like minded listeners in the episode comments on the MW YouTube Channel or message me... Instagram: https://www.instagram.com/chriswillx Twitter: https://www.twitter.com/chriswillx YouTube: https://www.youtube.com/ModernWisdomPodcast Email: https://www.chriswillx.com/contact Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi friends, welcome back. My guest today is William Leith and we are talking about money, specifically why some people can make it and others can't. During the course of researching his new book The Trick, William got to spend some time with the real wolf of Wall Street, Jordan Belfort asking how he made his millions and why he continued to try and make them when he had more money than he could already spend. You get to learn what the true cost of wealth is from a Russian half-billionaire who lives in a beautiful mansion on his own with a butler, and from the hottest thinker on the planet, Nasim Talab, on how to mitigate risk.

It's a really interesting journey through the true price that people have to pay in order for ridiculous material success. And if you haven't already learned it from this podcast, it reminds you that being rich might not make you happy, but being poor can make you miserable. In other news, the response to the ultimate life hacks list launch happening this Monday, the 15th of June has been insane. I've never had so many messages and so much support. So thank you to everyone that is saying that they can't wait for it to release. It's going to be out this Monday. It will, it might not change your life. It might not change your life, but at the very least it'll teach you how to make an unbelievable toasted sandwich or convince you to buy an automatic car, or anyone of 200 ways that you can upgrade your existence.

So make sure that you tune in on Monday to find out how to get your copy for three. But for now, it's time to work out what the real price of getting riches with the wise and wonderful William Leith. William, how are you? I'm okay. I know the world in a... This is what I say to everybody.

I'm fine. I dread to think what's going to happen next. The world is in a, you know, very peculiar state. It's, for me, it's the same. I'm doing the same thing as I always do, which is try and think of things to write, sit at home, go for walks, you know, meet the same thing as I always do, which is try and think of things to write, sit at home, go for walks, you know, meet the same few people, socially distance. Now, although obviously not things like my son and that sort of thing, but my life's more or less the same. But I know that loads of people are

either... I just had this conversation, I suppose I must have it every day because it is the conversation to have. You're either some people are locked in a situation they hate, some people have to go to work and put themselves in terrible danger. Anyway, so I keep thinking of that, but you know, like you said, it's lovely weather. You can go for walks and my life's the same. So I, I, I keep on saying it to people that, um, I appreciate for some, it might be challenging. But for me, it's not a massive difference from what I'm used to, you know, I've got slightly fewer people to see, slightly more time to read and a little bit worse internet connection because everybody's on online, but yeah, other than that, it's all good.

So today we're talking about money, very sort of passionate topic, a very viscerally emotion inducing topic, we're talking about why some people can make it another's can't. It's a very weird thing money because you think you know what it is. You spend your whole life with this concept of money, you know, you've got it, you haven't got it. What is it? Oh, it's what's in my pocket. And then when you try and sort of drill down into it, try and understand what it is, how it arose, what it does to your head. Then it becomes this very weird thing. And I realized that quite quickly. That's why I wanted to write about it because I didn't understand it. There was a big, you know, the global financial crash. And I think that wasn't the very first time I'd thought about money, because I'd once tried to write about it. And after writing, I wrote a 1200 word article on the origins of money from first principles.

And I thought, God, I'm not going there again. That is so weird. And then we had this big crash. And I realized that there was something wrong with, you know, money was something that really helped us and really enabled all sorts of things to happen. But there was something deeply wrong with it. And I wondered what that was. And was there a way I could simply understand it? Was there a simple way to understand what was wrong? So after that, I began to think about it a bit and I was thinking, yeah, money, God, I could write about that. No, I couldn't, no, no. And then one day, and I realized all this time, I kept interviewing these people who made tons of money and I would say, you know, how did you make this money? And it's almost like you're asking somebody, hey, your garden's tidy, how did you do that? And they say, well, you see that grass? I got this mower, I mowed it.

And then I painted the shed like all this. And you ask people how they make money and they go, well, first of all, I painted the shed, like all this. And you ask people how they make money, and they go, well, first of all, I thought, yeah, I, you know, what's going on in the high-five market. And then I thought, yeah, I could make it a bit cheaper. You think, yeah, that's a good point, yeah. And then I made it a bit cheaper. And how much do you make?

Oh, you know, like 10 million. So you think the people who make a load of money, they sort of understand it and it seems like this logical thing, but for 99.9% of us, it's not logical and obviously if you could do it, if you could do it, you would, and I couldn't do it. And I actually had some pathological problem with money, which is that even when I made a load of it, it would somehow get into me and change me. So I'd become this person who adds some money and then it would all be gone because identifying as yourself with your money is terrible. You've got to be the person who doesn't have money and then have the money. terrible. You've got to be the person who doesn't have money and then have the money. So I thought my problem with money was a bit like, you know, I'm a, what do you call it?

Reformed alcoholic, I'm a, I've been T total for seven and a half years. Amazing. Congratulations. Well, I wouldn't, you know, and I know that I can't touch alcohol. You're drinking. What is it? And energy drink? Oh, this is drink. This is, there's no caffeine in this. Although shout out to Nockle, thank you for supporting the podcast, but this is just some BCAAs. Flavid, flavideldip flour, nothing too excited. Right, right.

So, I'd had this, you know, anything that sort of, that sped life up, whether it was, you know, cocaine was a terrible thing with that alcohol. Somehow, I would be unable to, the person who had had the substance was seemed to be not me, but some raging crazy person. So like two drinks and the chance I have a third drink is very high. Three drinks and the chance I have a fourth drink is so high that all bets are off. And then where do I wake up? I don't know. So, and I have that relationship with money, which is like, oh, I've got some money. You know, I can have this.

I can have that. Well, why not? Oh, it's all gone. Well, I'll borrow some. Anyway, so obviously, there was some sort of drug-like quality to it. And it became part of you. It becomes part of you because it's like the way I explain

it is it's like part of you is a bully and is saying go on have this have this and another part of you is like well I guess I could, I guess I could have that and you buy yourself out of every you know oh I'll go to both parties and then I'll get a taxi back, rather than you have to make a choice, which party are you gonna go to? So I knew I had a problem with it, which was even more reason to write about it, to try and sort of study it.

And I kept on interviewing these people and I thought, yeah, they do tell me how they make money, but I'd like to think about this a bit more. And the turning point came when I interviewed Jordan Belfort, who was the, who is the person who was portrayed by Leonardo DiCaprio in the film The Wolf of Wall Street. Did you interview him before you knew you were going to write the trick? Basically, the story was that I had got a contract to write a book about money

got a contract to write a book about money and I didn't know how to do it. So I... Jordan, mate. I, are you there? I've heard that you did okay with money. It was, well, the thing is, you did okay with money, but also had a terrible problem with it. And I realized that he was, he was everything that he was the confusion in one person, But he was the confusion in one person, which is, how do you make a hundred million? But then why, when you've made a hundred million, do you commit a fraud that might well land you in jail for money that you could never spend? So I thought, here's something that's interesting because he's got a real gift for making money, but it's almost like, why would you then commit a fraud? Why would you then put yourself at that risk of going to jail if somebody catches you,

which they did? So I thought that was really interesting. So I spent a few days with him and he was rehabilitating himself actually in a way that was quite admirable. You know, he's really down and out. He owes 100 million at this point. And he's wanting to teach people how to make money. And he's got this great confidence and this great salesmanship. And he's telling me that the greatest part of his life was when he had this company and he had this rumful of brokers.

And he was every day giving them these talks to inspire them, to motivate them. And what every said worked, and he wanted to get back to being that person, because that was where it really, that was one of the things that it was for him, was the ability to be on stage and talk to people about how to pull off some trick. And this was, or a series of tricks, which was how to buy stocks and then get other people to buy them so they were worth more. And that worked to a certain extent.

And then he met somebody who said, do you know what you can do if you want to do even better? You can actually pay people to buy the stocks and then tell them when to sell them and you can then manipulate the market in a way which is completely illegal. So he did the completely illegal thing and was caught and went to jail. and was caught and went to jail. And so here he was, after this had happened in his new life, doing a similar thing of getting up in front of people and saying,

this is what you have to do if you wanna make money. And one of the things was, don't let your stupid emotions get in the way. Another of the things, the overriding thing I think, and this comes, you mentioned Nassim Talib, who we'll get to. But what he said to me, the first thing I remember he said was, when you get rich, you get rich quick, but that's not at the start. You have to do an awful lot of things before it kicks in, but when it kicks in, it happens very fast.

In other words, you're going to spend a long time putting all these pieces together, working out what it is you have to do, and if you do it a bit wrong, nothing happens. And if you don't do all of it, nothing happens. You have to get this complicated series of things to work. But then when you do, everything happens. So it's a bit like, this is not a linear thing. You go along and I thought to myself, it's a bit like learning a language, right? You're translating the language into your own language and it seems all very stilted and every day you learn a new word and every week you learn a new bit of grammar. But basically nothing much happens and you think, well, I ever get anywhere. And then one day, somehow, it clicks and you realize

you've got to think in the new language. And then you start, oh God, that's what it is. This isn't this pain taking bit of translation. It's not all these labels. It's not the same word with all these labels on it. It's a different world. And the labels are different. And the way they think is a bit different. But once you've accepted that and you see that,

you're in that new world. So I thought, that's probably how people get rich. It's a complex set of things. And if you read genuinely good self-help books, ones that don't say, here's a magic, here's a bit of magic, you just need to concentrate on money and it'll all come through your door. What would you put into that category? Can you put your body amount of this with that? Yeah, I'm saying it's something like the sleight edge by Jeff Olson. Basically says, if you want to succeed at something, you're going to have to learn all about it. So let's say you wanted to learn a language or let's say you wanted to learn the, you know, how to run a garden centre or whatever it is.

You are to selling. Yeah, well, anything you want to do, you have to learn about it, and you're going to start learning about it, and there's going to be a period in the middle where you don't seem to be getting anywhere, because you don't seem to be making any progress. But actually, all the work you're putting in now, and we'll be putting in for the next couple of years is going to pay dividends eventually when everything comes together. You're going to be glad you did all that learning. So you've got to think with the idea of there's going to be a future me who knows how to, you know, make a film, write a book, whatever it is. But there's going to be many, many days when you feel, oh, this isn't working. And how can I move forward? So basically, that's how almost everything

seems to work. And that's the, that's the kind of big lesson that if you want to do something, you've got to do it over and over. It's the Malcolm Gladwell 10,000 hours. It's not entirely that because well, he does say, Malcolm Gladwell does say, you've got to have feedback, you've got to learn. And I realized also that this is very much like science, right? It's all about looking for patterns. You have a hypothesis. It's not necessarily your belief. It's something that you're saying might be the case.

And then you try and disprove it. And you set up all these experiments to say, why doesn't this work? And eventually the thing that your hypothesis might survive and then you know that you might be getting closer to the truth. So it's kind of like all of these people and all of these people that I interviewed had a method that was a bit like that. I mean, I didn't put this in because there was just so much of it, but I'd spent about a year studying Warren Buffett.

Warren Buffett. Great guy. Him and Charlie Munger are both fan favorites from this show. Right. Okay. So the thing that impressed me, I mean, lots of things. I mean, he's obviously a very strange and very unusual guy. And you realize that when he went to Columbia, when he went to university, is it the the Wharton College? Is that what it is? Well, he went to the Wharton and then he went to Columbia and he met Benjamin Graham, who was the guy who wrote the intelligent investor. And I think Graham, he had a class of people and he would say, well, let's talk about the insurance industry or something. And the sort of student age buffet would know all about it and would say, yeah, well, I would say that this company is doing this and next month we'll see that. And Benjamin Graham was like,

I beg your pardon, you know all this stuff. But what impressed me, what was incredible is that I remember I did this thing where I got all the sources I could find and I imagined a day in his life when he was 16 and I think he ran 11 businesses when he was 16 and they weren't major businesses. One was a car wash business where he hired kids to wash cars and actually they came a point when he dumped that because it wasn't making enough money. He had a golf ball business where he realized that you could go to a golf course in Nebraska and you could go into the lake where these sunk costs, the golf balls are all gone. You could get somebody to get the golf balls from the bottom of the lake. And then you could post them to some golf, but secondhand golf ball guy in Illinois where people paid

more for golf balls. So you could, you know, you could just hire people to get golf balls and then you could start the lot. Arbitrime opportunity in a lake somewhere in wherever it was he was. And yeah, and there were stamp collections. He realized that a full collection of stamps was worth, you know, $200. But a collection with 10 stamps missing was worth $5. So he would then look at the sorts of stamps that needed to be, that most collections were missing, and he'd make up the collection.

And he did 10 or 11 of these things all the time when he was 16. So he was constantly running these businesses, made more money than his teachers, his parents, extraordinary, and what he was learning was how businesses worked from the ground up. So you got an incredible view of what a business was trying to do and how the people who ran it were contributing to it and how they were frittering things away or not. So he would home in on what really worked about a business. So when he started buying businesses, he

had an incredible sort of gut sense. You know, he'd spend a day with people, you know, tell me about your day, tell me what you're buying, and he would really get a sense of how they worked. And so that's learning, isn't it? That's making it a science. It's kind of imbibing it. So I think one of the interesting things about that that I've been thinking about recently is because of the imbalance, because of how disproportionately we see people's successes

and not their grinds and failures before they are successful. We don't get to see the handle of the hockey stick. We just get to see the head. Yeah, so it's to the people that are listening if you can imagine a graph and it's the shape of a hockey stick laid on its side and it's going along and it's flat and it's flat and then it just kicks up

and it hits a inflection point, tipping point as it might. Yeah, yeah, yeah. And the best, because it's rare that you have in normal day-to-day life, like my mum doesn't have a graph of the stuff happening in her life, you know, like maybe how much she's meditating if she uses the headspace app sufficiently, mum, keep using the headspace app. But it very often you don't have an objective measure. However, I have done, and it's been this podcast, and I promise you, it's the shape of a hockey stick. It's the shape of a hockey stick. You do tons and tons and tons and tons of work and not really that much happens. And then something happens and it just goes, whoop. And there's a quote that James Cleese is, I can't remember the American football team. Someone who's listening will know the one

that I mean. There's an American football team who has on their wall a quote about a stone mason and they say, um, we know that it isn't the hundredth hit which snaps the stone. We know it is the 99 which came before. And the point with that is that it takes a lot of time to become an overnight success. Yeah, yeah. And all of the things that we've come up with there, so Jordan Belfort, someone who started off with Penny Stocks, he learned from the Grand Floor of anybody that's seen the movie knows this, then he starts to hone his craft on stage in front of a big group of people. Then moving forward, he even repurposes that now, now that he's barred from operating in

the financial sector, you know, repurposes that, then you that he's barred from operating in the financial sector. Repurposes that. Then you've got somebody like Warren Buffett who runs so many businesses. I found out the other day Warren Buffett, Warren Business. Warren Buffett has 90% of his net worth attributed to 10 trades. Yeah, yeah, I can imagine that. 90% of his net worth attributed to 10 investments, unbelievable. So we've got these people who are all showing the same thing. And yet, all of us, yourself, me, everyone is seduced by the idea of get rich fast, the 10 minute booty abs blaster workout out to you're being your bum out in this time.

Despite the fact that we are shown time and time and time again, that the way to become an overnight success is actually to just grind away at something, effectively with a feedback mechanism, making sure you're doing deliberate practice for a long time. I want, I mean, I want so, I don't know if you follow football, that thing that used to happen. But the former England player, Río Ferdinand, was once asked,

who is the best player that you ever played with, that you ever, you know, trained with or played with. And he said, and I've forgotten the name of this guy, he said, it's such and such, and it's not a familiar name. And so the interviewer said, yeah, I kind of remember him. Didn't he play a few games for West Ham or whatever? And he goes, yeah, yeah, he's got so much natural talent this guy. And you know, he had his career, he was now about 30 odd. But he said this guy was, he had more talent

than anybody ever played. What, you mean even so and so? Yeah, yeah, this guy was really extraordinary. And so the interview said, well, what happened to him? Why, you know, he obviously could play in the Premier League, but why didn't he? Why don't we all know his name? And he said, well He didn't have the same work ethic as all these other people. It's like, you know You have to train every day. You have to stay behind after training. If you've got a bit of a, you know, if your fitness isn't quite there You have to try again and again and again and maybe you're going to have to work on this move or that move and everybody who succeeds does that and Pure ability isn't quite enough. Even if you even. Hard work beats talent when talent doesn't work hard.

Yes, yes, exactly. If this guy had trained, maybe he would be better than anybody. He would have been better than this, was what Rio Ferdinand was suggesting. But it's not that these other guys weren't brilliant. It's just that this guy didn't, you know, he worked 95% but not 99% and it's that last little bit.

That's why the growth occurs as well, right? And also, as you start to see, as with anything, if there's a bell distribution of normal, right, you're up onto the tails, the further that you can push yourself out towards them, the fewer people you are going to have to compete with by definition, right? Absolutely. So, I want you to tell us about the Russian half billionaire and his butler, please. So, we've learned about Jordan Belford, who's this Russian? Well, this guy, the interesting thing about this guy, somebody was saying to me, this guy lives in the nicest house in the country, maybe the world. It's this house, the very special house that was built in 1698 or it took

a few years, 1700. And it was built by Nicholas Hawksmore, the famous architect, but it was originally designed by Christopher Ren, the most famous architect in history. And Ren passed the project on and between them they managed to concoct this beautiful house. And it has beautiful grounds and it has, you know, the avenue of trees and the amazing reflecting pool so that you can stand behind the house and you can see it doubled in this reflecting

pool and it's everything is thought of. Where is it? It's in Northamptonshire. Okay and why is it what makes it so special like it's just pretty and it's got a pool. It's beautiful. It's It's beautiful. If you imagine something like Buckingham Palace but smaller and prettier. Pretty high bar to set that. Yeah, it's kind of, it's a lot smaller than Buckingham Palace, but it's got perfect dimensions and all these architecture critics would say, and all these architecture critics would say, ah, this house is one of the best houses I've made. So I was interested in the fact that some Russian guy had bought it. And I thought, who is he?

And so they gave me this story to go and spend a day at this house at this Russian guy. And it was odd, the whole thing was odd because he made an awful lot of money in the rag trade clothes. And he had these concessions in department stores all over the world and a lot of stores in China, a lot of stores all over the Farris, a lot in America, and he had somehow, he dialed, he'd found the point at which the, how expensive it was to make something compared

to how many you sell, compared to the price point you sell it at. And he's got this computer-like brain. And so, and I said to him, this, you sound a bit like Inva Camprad, because I wanted this thing on Ikea. I couldn't, Camprad wouldn't see me, but he actually let, you know, I stayed in some nice house on a lake somewhere in Sweden and I did meet his designers. And the story about Camprad is that, you know, the designer could show him a table. Here's a table and say it's made out of, you know, teak or it, well, it's made out of oak or whatever it is,

you know, pine. It's made out of pine. And then this is how big it is. And Camp Radwood look at it. And his brain would go, I'd get the pine from the Ukraine. And then that would be such and such a ton. And if we made, you know, 10,000 tables, that would cost this much per table and the trucking costs. But then we'd have to buy in Swedish crowns. then we'd have to sell in you know, whatever it is And then we blah blah blah and then the petrol cost and he would his mind would be buzzing with all these things and then he would just say to the guy Okay, do it Or like no this one's not gonna fly Because he would look at everything and he would just be working out the whole supply chain.

And that's what he was going to. And I said to this to the Russian guy, and he said, yeah, that's exactly me. He thinks about where you can get the cotton, and who you can, which factory would it, he has loads of factories in China, which one would it go to? And, and then where would I sell it? This would be good for Los Angeles stores, and it would be good

for the blah, and then you'd sell it for $600. Yeah, we'll do it. So, we've still got here an unbelievable dexterity and kind of depth of understanding of their own operation. You know, you look at these people who make a lot of cash and sometimes you can discount them as just lucky, fortunate idiots. It doesn't sound like you really... It doesn't sound like this Russian guy or Jordan Belford is one of them. No, all of these people, I mean, including Alan Sugar and including Howard Schultz and these people that I interviewed.

including Howard Schultz and these people that I interviewed. They all looked at their business with a real depth of understanding. Howard Schultz and his coffee shops, how much per square foot would you get back? If you rented this, how much would you have to make? He knew all that. You put comfortable chairs in, you change it a little bit, and he managed to, he had an idea that if you made coffee shops,

a little tiny bit more like bars, you'd get all the business for coffee. And he was right. Who does Alan Schultz own, by the way? Howard Schultz, he was Starbucks, he was the guy who started Starbucks. Okay. And again he's one of these guys. He's obviously brilliant. So many of these guys, they've got a sort of, They've got a sort of, they remember everything and it's almost like, and it's like with Taliban, his graphs, and you can see him thinking about like mathematical equations, and he can sort of he lives them. It's not like, I mean, he understands the value of how options

are priced and how likely or unlikely something is to happen. And therefore, how much you should spend on predicting that it would happen. So tell me, just tell me what it was like being in this building then, this Russian guy, who's he there with? Well, as I say, he was living in this vast estate at the time with his butler. He was him and his butler, and the thing I found... No one else. No one else. Well, he was, he would sometimes get models to try on his clothes and he would have these, he ended up marrying one of them, not the one that was there, the day I was there, incidentally. But it struck me that he was plowing a lonely

furrow in a way, but in this extraordinary luxury and he said to me, he was going to have dinner. And I said to the butler, you're going to cook him dinner. And he said, yeah, yeah, I was cooking dinner. I said, what, you do the two of you just sit around eating? And he goes, oh, no, I eat in the servants quarters. Wow. And so, so interesting, isn't it? I know. So the guy had a church as well on his land, in his grounds, lovely old church. And it's like, you've got a church,

you haven't got a congregation. Yeah, it's just you in there. So something I've been thinking about a lot recently, as well, actually, is the price that you need to pay for someone's success. So people might look at NASA and Taleb or this Russian billionaire, half billionaire, or Konome Gregor, or some Instagram model or whatever, and say, I want that.

But they don't understand the price that you need to pay, not as in the long hours and stuff like that, but the pathologies that come along with having a mindset which permits you to do the thing which you think is good, right? Yeah, yeah. What is the price that you need to pay psychologically, biologically, routine-wise, in terms of your sleep, in terms of your mental health, in terms of the thoughts that go through your head when your head hits the pillow at night, all of those things, right?

Like, what is the price that this Russian half billionaire has to pay in order to be such a complete sort of crazy advanced thinker with regards to his supply? Yeah, well exactly. The best case I had of that was Felix Dennis, who was, he made about the same amount of money,, in pounds, about probably four or five hundred million pounds, that sort of thing. And he had this biggest state in Warwickshire. And he also had, that was the only place of his I went to.

And I went to it twice. And he also had places, he had an estate in the Caribbean and he had one in Connecticut and he had various houses. But when I went to his estate in Warwickshire, which was his kind of main place, there was that he'd got an avenue of statues which led up to this kind of barn that he'd converted into this kind of luxurious, crazy, a place where he sat and contemplated and wrote poetry and that kind of stuff. And the line of statues,, who commissions full-size statues these days? Well, he's dead now, but it was him and the odd kind of dictator, but not not many people. And at the very end of this avenue was this a pond and a statue of Icarus plunging to his death, the person who in legend had flown too close

to the sun, which I thought was a bit odd because, you know, he himself had done all this unfettered, capitalistic, making these great moves and tons a money. And yet the thing that was outside his very, the place he went to think was a warning, the warning, don't do this too much. So I went in there and I asked him about this. And he said, he thought that making money was, he kind of said, it had driven him insane in a way. It had driven him crazy. He'd become a crack addict. He had had an existential crisis which lasted for years. He'd nearly

killed himself and arguably did kill himself with all the crack smoking because he ended up dying of lung cancer. So surely that had something to do with years of smoking crack. And he said, yeah, he'd made himself into a different person. A person he didn't like. You know, this person who was hard driving and obsessive and permanently focused on how to make money, how he could get an advantage in the market of whatever it was he was doing. And in a way, you sort of think, well, he'd made like 450 million quid or whatever, but he should have stopped at 50. That last 400. What was that worth to him? It had done him in. So why do you think he kept going? Well, this is the big question and it's a bit like a question for the human race. You know, we want more and more luxury and we're prepared to go to the very edge of

our own sanity and also our own You know, we're prepared to take big risks to get just a little bit more, were prepared to, we will say, well, I've heard that these forests are crucial to the Earth's upkeep. But hell, we want a bit more luxury, so let's chop them down and see if we can get away with it. We might find a way of tweaking it so that we're all right. So I think that this pushing

the envelope is part of us. And I think the people who make the most money are kind of, sometimes they are unbridled examples of this. They're runaway examples of pushing and pushing and pushing. And also, I mean, I'm gonna use an analogy of drinking, which isn't necessarily the same, but the writer and drinker, Kingsley Amos once said, it's not about being drunk, it's about getting drunk. So the process of getting drunk, the constant change from being less sober and less, I mean, being drunk,

you can keep that. It's getting drunk, that's the thing. And so these people, if you think about it, the best time they ever had in their life was when they were on that curve. The hockey stick was going right up. Now, they can't, how do they keep going? They don't want to stop and say, do you know what, let's have another Infinity Pool. Let's commission a few more statues.

That's part of the in a way the pathology the thing that they Crave it seems to me is the actual making of the money, you know, you know, you know, not the money itself Yeah, you can only spend it on certain things you what you once once you've spent it on things. Once you've spent it on, you know, you can have a private island, you can have a nice house in a private island, you can have a... Yeah, to a helicopter. Yeah, exactly. And once you can have a Ferrari, and then you can have a slightly better Ferrari, and also a Range Rover, and then a

one with Tinge Windows, and that you run out of things to buy pretty quickly. And so it was that process of making money that was so exciting. Isn't that something quite profound, I think, there? That the richest people in the world are some of the richest people in the world who have more money than they can ever spend, are not. What they're not doing is focusing on the money, they're

not focusing on the outcome, they're focusing on the journey. And yet we look at these people and we think, I want the end of that journey, I don't want the hockey stick. It's almost like they're keeping that grinding mentality going because that's where the pleasure is actually brought from. Another thing as well is the virtuous mean, I've been throwing this around recently, that were absolutist beings. If you tell me to have one biscuit out of a packet,

it's really hard. If you tell me to have none or all of them, that's actually quite easy. Find it quite easy to have no biscuits or all the biscuits. Because it's a very sharp line in the sand, right? Whereas just to have one to have enough, but not too much, is really challenging. Had a neuroscientist on talking about the seven deadly sins, you know, like the fundamental problem with humanity. And every single one of them is fixed by sloth. Need a little bit, but not too much. Wroth, you need a little bit, but not too much. Lust, you need a little bit, but not too much.

And it's the same, it's the same greed. Spoke a lot about greed on that as well. You need a little bit, you need to get yourself over the inertia of having nothing. But when you push yourself forward and you chase it too much, it becomes, as anything, you turn a tonic into a toxin, you pathologize the thing which liberated you into something which is now actually a prison.

Yeah, absolutely. And I looked into, I wondered what greed was. And you've got this Michael Douglas greed is good, and that's in that film Wall Street, where he says greed is what's gonna save us, greed's what's gonna make America great, et cetera. And that's going back to Adam Smith, which is if everybody does what, you know,

seeks what they want, then in a way, you all come together and find the value of everything and everybody knows what they need to provide to make themselves some money. And it's a self-generated, it's an emergent system. And of course, that's true up to a point. I actually began to wonder what that point was and where things started. Well, that's a good question. You're wrong. Yeah.

Where do we, how do we draw that line? Well, I looked, I looked into the history of, of money. The, the whole idea of prosperity is that once we start to exchange things, i.e. trade, we naturally start to specialize and people who are good at things end up doing what they're good at. And so at the top end you've got everybody who's good at something is doing that thing. And they're also because they only have to do that thing and they can outsource all of the other things. They tend to become inventive. So if you raise, if you're good at raising chickens, just say, pretty soon you're going to find out that, you know, if you feed them this, they get a bit bigger

quicker. And if you feed the males a different one diet from the females, then you'll get more eggs or whatever it is. And you wouldn't have known that if you hadn't specialized. So when everybody's specializing, you get all of this innovation. And then you get more and more trades and that leads to more innovation, etc. So swapping things is great. When you have money, swapping things is easy because they find a price and we can all agree on what the money's worth. And I think that the thing that starts confusing people is when you start applying that to money itself. So when you start applying trading and specialization to the exchange of money and financial

products, it seems to me that people can't get their heads round it in the same way that they can get their heads round trading money for goods. Trading money for money, you get bubbles and crashes. It's orders of magnitude there, right? You're multiplying the thing by the manipulation of the thing. Yes, exactly. So it's acceleration rather than speed or whatever. It's things taking off.

Where's Talib? What about... Nothing, we need to work out where it's when with me and you were fumbling our way through probably to him grade one mathematics, trying to work out with when with me and you were fumbling our way through probably to him grade one mathematics, trying to work out the term and I need to we need to ring him and say, Nassim, what's the what's the word for this night? The thing is that some people like him do understand it doesn't do their head in, but most people it does and and you know the people who work in money, in banks, they are often,

I mean, as a pure example, if you look at rogue traders like Nick Leason and many others, Peter Young, or sorts of other people who started making bets, and then they went a bit crazy. They did, they kept on making bets that were losing and they become like gamblers chasing their losses. A lot of bankers have that problem. They're not an emotional mathematical machines who can say, oh look, I need to invest in this, lose a bit of money, so I understand how it works, and then see where I can make the big money.

They just end up being all getting emotional and chucking a lot of money away. And when lots of people are betting like that, you get this kind of mayhem, and sometimes all this value is wiped off the system and nobody really understands where it's gone. And now, when it's machines that are doing that, I mean half the time, it's machines that are doing that. And I remember reading this account of the so-called flash crash crash where algorithms kind of became confused and they lost billions in about half a second. And when was this? 2009. There was some problem with algorithms, you know, their program, they're instructed to do, you know, this in this circumstance circumstance and if this then do that and if that then do the other. And normally these reflect quite sensible ideas.

But when it all happens so fast and they're sort of interlocking robots and they don't understand each other, you know, there is a problem. And in this case, it magically reasserted itself because the algorithm somehow managed to see what was happening and claw it back before it completely annihilated the market. Yeah, me. Okay, so we've just touched on him there. We've sort of done surrounding a couple of bits. Nass, Talib. Very, very, what do you call him, the hottest thinker on the planet? Is it really? I was saying that that's what he,

this, he, Kate, when I interviewed him, I saw him a few times. And I think the Sunday times had called him the hottest thinker on the planet. And it was at a time when he was, when people like David Cameron were asking his advice and if you see the big short that movie he's not in it but he represents those people who who could see that there was something wrong

with the housing market. What was happening wasn't sustainable and it had to end, or even when it started to change a bit, even when it flattened out, all the houses would come onto the market, they would lose value and all the people, all the different funds that had invested in those mortgages would find that they were underwater. And all the banks that were relying on those funds

for short term money so they could keep there. And it was this big kind of circular, money so they could keep there. And it was this big kind of circular, you know, and a few people who were sort of outsiders spotted that this was bound to happen. And I mean, Michael Burry was one of them who was featured in the big show. Now, these were people who weren't part of the crowd, you know? And the thing about Talib is that he was brought up in Lebanon, and he's now about 60. So when he was about 20, there was this terrible war in Lebanon and everybody said to him, oh yeah, we occasionally have these wars, don't worry, it'll be over by Christmas, you know. And then it wasn't and it just kept on dragging on and nobody predicted that this would be such a long-term,

immensely destructive conflict. Nobody could sort of bear to imagine that the whole world of Lebanon would change. And even when they saw it happening, they were still wanting to hold onto the belief that, oh, you know, it's going to be all right soon. And so he began to think, weird things happen, things that people don't want to believe will happen. But it's not just that, it's that these weird things are the triggers of history. So nobody thought the First World War was going to be a four-year kind of blood bath. They thought it was going to be a few months. In fact, it's almost like an accidental war. It's like this treaty meant that this country

had to say, I'm going to back that country if you do this. And all these treaties, this complex system sort of clicked into place. And suddenly, you're having a war in France and Belgium that has brought half of Europe into it. Yeah, and it has sees no sign of stopping and what the hell is that all about. And so it's this thing that changed history that nobody was expecting. And he began to think, God, you know, these weird things that nobody predicts. Now, I would say we're in one of them now. He has said, oh, you know, this isn't a black one. He calls them black ones. These unexpected, but very important events. And he says, this isn't the black's one, because people predicted it. And actually, I think, well, yeah, technically,

but it's really not, did a few people predict it. It's what does the world at large think? And I think we weren't prepared for this. I mean, I actually wrote an article about flu epidemics, just a general thinking it was a normal, as reviewing a book, and the headline was something like, what about, are we prepared for the next one? And I didn't even think about it.

Somebody had put that headline in. Now I can send this article to people and say, look. Look at me, I'm a clairvoyant from the future. But the point is I didn't, I would, you know, no way did I think of this as a real thing. I just thought, yeah, we've had these flu epidemics, some of them take off and some of them don't. The last one that really took off was in 1918. Let's look up the reasons for this. But nobody had planned for it. And Talib's argument was all sorts of histories

basically dominated by these unexpected moments. And so if you know how to position yourself to deal with them, you can make a ton of money if you're in the markets. So that was his basic thing. But in the end, you know, he made a ton of money, but wanted to get out of just trading and get into sort of thinking about history. And that's what he's done since 2009, I guess. What was it that you, the summary that you gave to do with how people don't like to be wrong

or they don't like to be proved wrong so they always presume that the same thing's going to repeat. I can't remember. Well, yeah, it's kind of like you've got two ways of investing and you would imagine they balanced each other out. So you can invest in things that you think are going to get better. And so you can put money into things that are going to get better. And if you're right, then you'll mostly get small returns back all the time. But then when the thing crashes, you might blow up, you might lose the lot.

On the other hand, you can bet on things getting worse. And most of the time they don't. So you're losing money all the time. But when they do get worse, you make your big killing. And the point is that these things aren't mirror images of each other because people, it's cheaper to invest in things going up than it is to invest in things going down. Because not many people, it's very lonely. It's a lonely place to be losing money every day in the hope that everything

crashes. So not many people do it. So it turns out the odds are better and the returns are bigger. It's a bit like with job safety, you know, safety is overpriced. So people can, a lot of people want a job for life. So they're prepared to be underpaid for it a little bit recently? Yeah, exactly and it turns out that it's actually probably safer to do something else. Well, also those jobs as proven by the fact that we're in the middle of a chaotic global pandemic actually aren't all that safe. They're not here.

Actually safe industries to be in. So what did you learn if you could sort of synopsize what your time with Talib and you know a little bit of one-on-one time with that man would be very envied by a lot of people on this planet. you know, as you mentioned, David Cameron, government and politicians asking his advice, what did you, I mean, is it learning about being prepared to be in the out group to remove your emotions from the situation? What was it? Yeah, that's interesting. I think what he says is in a way, it sums up what all the other people do. It's kind of have a deep understanding of something.

You have to put, you have to sink a lot of money and a lot of time into understanding things. And then when they move, they move fast. So it's kind of like nothing happens and then everything happens. Who was it that said, you know, nothing happens, most decades, nothing happens, but there are some weeks in which decades happen. Like, it was that church who said that. It was someone Russian. There's another one which I absolutely adore, which I'm going to miss. I'm not even going to bother trying to quote who it's from, but the quote is, history

doesn't crawl. it leaps. Yeah, well, that's exactly right. This is like the evolutionary pattern, you know, things change, animals change into new species, but it's not like a gradual progression. It's much more like nothing much happens, and then there's a leap, and they become something new, and maybe they'll survive, and maybe they won't, as that new thing. So that's another thing. Things happen in leaps and bounds.

The things that are important are often unexpected. And history's all about these weird unexpected things. So if you try to expect the unexpected, you'll do a lot better because nobody else is looking. And I suppose as you identified before, we have this comfort predisposition, even for bankers who must have an idea that there's a potential boom bust cycle, you know, they're not going to be completely ignorant to it. They're certainly going to be at least a little bit better informed than the normal proletariat on the street. But because we have this predisposition, because we don't like to think about bad things happening. We tend to not fully account for the effect of them occurring and that leads to, it's just like a sweeper under the rug type thing,

like put it behind the wardrobe, no one's ever going to see. Yes, yes, and it's like we're in this Yes, and it's like we're in this crisis now. And most people talk about it as if, well, we're dumb now. It's nearly done. And you get the occasional person saying, do you realize we're at the very beginning? We don't even understand what it is that we're up against. And sure, it might vanish into thin air, but it might be 10 years of re-adjusting and reinventing the way that society works.

Do you think that there is a limit to where we should put positive thought. And naturally, I have quite a catastrophic mentality, which I think I inherited. It's half genetic, half socialized. So I tend toward negative thought, but I've worked quite hard to overcome that, right? I've worked quite hard with doing gratitude to actually have a more positive mindset

and turn things around. But when you start to scale that either across societies, across countries, across policy making, or just maybe scale it across people, is there kind of an upper bound on how much we should be pushing that level of sort of it's all bright and rosy, just look for the silver lining? I guess you have to go imagine because we haven't evolved much since we had very, very rudimentary tools and lived in a groups of 150. And I guess you needed people, didn't you, to say, we could get across that river.

We would just need, I don't know, and once we're over there, the bison, they're much bigger. And you need people to say, yes, you're right. We'll bloody well do it. We can get across this ravine but you needed some pessimistic depressed people to say oh god are you kidding me not this again do you remember when we lasted it and all that people fell in and it was terrible so you need a mixture of people don't you and a mixture of people, don't you, and a mixture of emotions. I mean, there's an awful lot of, have you ever read in McGill Christ? No, what should I read? He wrote this book called The Master in His Emistry, and it's all about

the two sides of the brain, but it's the take away thing is, you know, part of our brains are looking out at nature. That's what they do. That's what they did for 200,000 years. They looked at it in nature at the sky and the rain and the clouds and the trees and all this. All the time they're looking at it in nature and the other side of the brain is thinking, how can I make a tool out of that? You know, I could chop that branch off and then it would be this big and if I chopped it in half, I could then join them together and and that's what the other side of the brain's thinking.

And of course, the at that side of the brain, the left side, the tool making side, begins to make more and more tools and until what the right side is looking at is not so much nature, but tools. You're going to a city and you're looking at tools. You're looking at cars and computers and you know telegraph poles. And then you're making tools out of those tools. The left side saying, yeah, how could I make tools out of those tools? Oh, I know I could sell them in advance and then charge interest and then come, you know, and so of course we have sort of created a new environment that were not quite up with yet. And I suppose because it's so safe as well, because we don't have that fewer people are falling into the ravine and more people are making it across on the log. And then the tools to the power of tools is a cool concept.

I like that. It makes me think about the financial products that we were talking about and they're like houses to the package of mortgages to the package of bonds to the package of did it all the way up right so final thing final question you spent all this time clever people nasim talab and a Russian billionaire and his butler and Jordan Belfort Wolf or Wall Street so what did you learn about money what did they teach you are you rich now? No I've never been well no yeah I've never been rich I've been richer than you many people, but I don't think I'll ever be fabulous rich. I could be comfortable if I put a break on my spending, which of course I have done now because I can't even go to the shops. So also, all of those things that say, if you've got enough money that you're not frightened of

people knocking on your door, you can't get much better than that. You know, I've got a nice, nice-ish car. I could get a nicer car. Would it make me happier? Not really. I could get a fabulous car. Would it make me happier? Not really. I'd be sick of it in a week.

And I'd think, yeah, it's okay. My old car was pretty good too. I didn't really bother about that. That was fine. So I'm aware that obsessing about it isn't the way to go. You know, what you want to be rich in is time and also your relationships with other people and being obsessed with money can take those things away. So you want to use your time. You want to know that you're using your time well. And I think you feel it if you're learning things, if you spend your life learning things and spending time with

people talking and all of this, that's great. And you think to yourself, well, if I had an extra 10 grand in my pocket, would I feel happier? Not much. It wouldn't have enhanced. You know, you could go to a restaurant with people and have a great time. And if you had twice as much money, you could say, yeah, I want the best champagne, you know, but that might be a distraction. And it's not necessarily going to make anybody any happier really. Of course, people are going to go back and say, do you know what, I had the best champagne, but that would have been really a distraction. I once went to this, this, I was reviewing this resort where the wine was so expensive

that I think I drank a thousand dollars of wine and I wasn't even a bit drunk. You know, the point, this is back when I drank, but the point is that you could spend, I wasn't spending the money, but it was, you know, the money was being spent on my behalf incidentally, but I could have, it would have taken me a couple of grand to get this, you know, and this is a resort for the super rich. And of course, they go there and they think, Oh, wonderful. Look, this bottle of wine is a grand. Fantastic. Oh, they've got the cheap stuff here, darling. They've got the cheap stuff here. And you know, all of that is once you've seen it, it's like, okay, fair enough. So was that was that the answer to your question?

I think so. Let me let me see if I can repurpose it into it. Let me see if I can try and define what I think that was. Having money is a comfort and is useful in that it liberates your time to spend doing things that you want to do with people that you want to do it with. Yeah, but of course you've got to be the person who can use that time well and if you spend all your time making money, you might find that you do get to buy yourself some time, but you don't know what to do with it, because you just want to be making more money. So, there are things you can spend your time doing.

Felix Dennis, who had thought about this a lot because he wrote his life with money in some ways. And he said something like, you know, if I write something, I haven't wasted my time. But if I buy something, I might be sick of it and I might feel it's not really going to help me, you know, spending money isn't the answer whereas sort of making something makes you a lot happier. Well, doesn't that speak to what we what we touched on earlier as well about it's the process

of becoming not being or having? Yeah, that's right. As soon as you're drunk or rich, you've reached the finish line. Is that the rule of thumb? As soon as you're drunk or rich, you've reached the finish line. Is that the rule of thumb? As soon as you're drunk or rich, you've reached the finish line. What I mean is, if you're a drinker, it's the getting drunk. And if you're a tycoon, it's the making of the money. But if you were to place all these people in their luxurious habitats and say, right, there you are, you can spend the rest of your time

sitting by your infinity pool drinking your thousand-pound wine and and and and having you know if you want to drive your rolls Royce You don't even need to reverse it because your garage has a rotating floor. You know, and I think that Felix Dennis had this, he had his role in putting into a rotating garage so that you could always be pointing outwards. You know, you didn't have to do that pesky thing of reversing into what was actually quite a big drive or, you know, it's not like there was a cramped space to reverse into, but you wouldn't even have to bother reversing because you could just make the garage rotate.

So you know, you can buy an endless number of those things, but they have diminishing returns, don't they? And it's really something else, something much more elusive that will make you happy. I love that. I really do. I hope I'm continuing to drill this into the listeners heads, the hedonic treadmill that we're all on and the fact that if it's not a study saying that anything over 56,000 pounds doesn't have increases in happiness, it only has increases in satisfaction.

Or whether it's you speaking to the smartest or richest people on the planet, or Morgan Household from Collaborative Fund and the Motley Fool telling us that all that money does is give you time to spend with people that you like doing the things that you want to do. How many different directions do we need to hear this from before we can start to kind of rid ourselves

of this materialistic predisposition that we all have. Maybe just that one more podcast that we've done right now with you. So the trick out now available Amazon. Yes, yes. Other good bookstores. You can buy it, you can download it, and you can listen to an audio version which I was really pleased with, I didn't read it. Who did you get to read it? Well it's a guy called Rich Kebel and his voice is a bit like Jack D. So it sounds like my book, read by Jack D with that kind of, I don't know, it's just perfect. And I actually emailed him and said, my God, thank you so much. So it's worth listening to the audio book too.

Amazing, link is in the show notes below. If you want to buy it through that, you will be supporting the podcast at no extra cost to yourself. If you don't already have an audible subscription, I recommend that you go and get one. And if you do that, you can actually get this book for free just because you get your this book for free just because you get your first book for free which is amazing and you still get paid. So that's

a great way to do it. Look William, thank you so much. Final, final point for the people that are just watching have a look at how beautiful the cover of this book is. You will see it if you're walking through Waterstones or in the airport or whatever, you will see this. No one's in an airport at the moment actually, you're never going to be in a waterstones either. In 2022, when we finally reopen, you will be able to see it in an airport. But look William, thank you so much for your time. It's been great, man.

Thank you. of that