The Diary Of A CEO with Steven Bartlett - The Top 7 Money Making Hacks For 2025 That Are PROVEN To Work! Do Not Buy A House! Do This Instead!

Episode Date: December 30, 2024

2024 has been a year of shocks and surprises, before starting the new year, here is the expert knowledge you need to not just survive but financially thrive in 2025 Here are some of the essential pieces of financial knowledge for 2025:  The power of compound interest  How to break the cycle of living paycheck to paycheck Whether you should invest in cryptocurrency  How to perfect your investment strategy  The top 10 money rules  Why most people don’t reach financial freedom The confidence rule for finance  00:00 Intro 01:34 Investing 101 04:52 Should I Use Investing Apps? 06:33 How to Invest With $100 09:20 Common Mistakes With Investment Accounts 11:07 What's the Proof This Is Actually a Good Way to Build Wealth? 12:27 Compound Interest: Watch Your Money Grow 18:17 The Biggest Debt We Pay 20:25 Find Where Your Skills Are Most Valued 22:43 The Most Valuable Bit of Information You Wish You'd Known Sooner 25:53 Finding Your Unfair Bet That Will Make You Lots of Money 27:57 Applying Your Skills to Get the Most Money 30:27 Example of Ways to Apply Your Skills 34:03 The Importance of Doing Deals 35:21 Where Do We Go to Learn How to Make Deals? 36:10 Playing the Tax Game 37:28 What Are the Tax Games the Rich Are Playing? 40:00 How to Bring Your Tax Down From 40% to 8% 41:20 Leveraging Investments and Tax 42:48 The Importance of Understanding Tax 45:03 Morgan Housel's Capital Allocation Strategy 46:32 How to Get Into the Top 5% of Investors Easily 47:51 Dollar Cost Averaging 48:29 What's an Index Fund? 49:40 How to Build Wealth Like Warren Buffett 50:59 The Importance of Patience 52:55 Play Games Not Many People Can Play 54:32 Don't Do This to Make Money 56:02 The Blockchain 57:37 Investing in the Blockchain 01:00:06 Everyone Is Equal When It Comes to the Blockchain 01:01:46 Crypto Use Cases 01:03:05 If I Own Crypto, How Do the Other Use Cases Benefit Me? 01:04:18 How Do I Invest in Crypto? 01:07:10 The Bank or Government Doesn't Control Any of Your Crypto 01:07:59 How to Get Out of the Living Paycheck-to-Paycheck Cycle 01:09:38 If You See This, You're in the Financial Danger Zone 01:10:53 Pick Your Hard 01:13:41 Seasons of Life 01:16:19 Wanting to Look Rich Will Make You Go Broke 01:17:53 Stop Making Emotional Decisions and Start Making Logical Ones Ramit Sethi: Instagram - https://g2ul0.app.link/aSZvN6VtsPb  Twitter - https://g2ul0.app.link/EedVkJXtsPb  Alex Hormozi: Instagram: http://bit.ly/40WnLMu Website: http://bit.ly/3UasFTS Codie Sanchez: Instagram - https://g2ul0.app.link/u3G7Nk0tsPb  Twitter - https://g2ul0.app.link/VsOtmy2tsPb  Morgan Housel: Instagram - https://g2ul0.app.link/Xapn1IStsPb  Twitter - https://g2ul0.app.link/e0uZ1qUtsPb  Scott Galloway: Instagram - https://g2ul0.app.link/1ezLPGEtsPb  Twitter - https://g2ul0.app.link/lRQaCHGtsPb Raoul Pal: Instagram - https://g2ul0.app.link/rwzfyoOtsPb  Twitter - https://g2ul0.app.link/gqdDHBQtsPb  Jaspreet Singh: Instagram - https://g2ul0.app.link/oGfm8vJtsPb  Twitter - https://g2ul0.app.link/FUu6rdLtsPb  Watch the episodes on Youtube - https://g2ul0.app.link/DOACEpisodes  You can purchase the The Diary Of A CEO Conversation Cards: Second Edition, here: https://g2ul0.app.link/f31dsUttKKb  Follow me: https://g2ul0.app.link/gnGqL4IsKKb  Learn more about your ad choices. Visit megaphone.fm/adchoices

53% of you are planning to make a New Year's resolution about money, finance and investing this year because you want financial freedom and financial security. So we went through every conversation we've had about money, personal finance and investing and we found the most replayed and most shared moments from those conversations for you. Everything from life changing advice on saving, spending, investing, tax, crypto, buying a house and having a money mindset. The most expensive thing that all of us are paying for is the information that we don't know. So how do you make the most money humanly possible? It's two things. Let me tell you a few key basic things about investing and money.

It's going to lead to amount of success that will literally put you in the top 5% of investors. I never have to worry about money again. If you listen to this conversation, we believe your money goals will come true in 2025. So take notes. I find it incredibly fascinating that when we look at the back end of Spotify and Apple and our audio channels, the majority of people that watch this podcast haven't yet hit the follow button or the subscribe button wherever you're listening to this. I would like to make a deal with you. If you could

do me a huge favour and hit that subscribe button, I will work tirelessly from now until forever to make the show better and better and better and better. I can't tell you how much it helps when you hit that subscribe button. The show gets bigger which means we can expand the production, bring in all the guests you want to see and continue to do in this thing we love. If you could do me that small favor and hit the follow button, wherever you're listening to this, that would mean the world to me.

That is the only favor I will ever ask you. Thank you so much for your time. Back to this episode. So what is the S&P 500 for anybody that doesn't know? And what are the returns that I'm likely to get from investing in the S&P 500? I really wanna simplify this for people that are at the very start of their investing journey. You know, because I mean, this is what you spend so much of your time doing that I just think about my team here,

say at the Diarover CEO, there's about 30 people and we started talking about money one day and it was mind blowing how nobody in my team's lives had ever had the conversation with them about investing. We all think of investing as something that rich people after the age of 40. Yeah, once you have a million dollars Or if you don't have a million dollars, then the only other way to invest with taught is to buy a house. Ah This is driving me insane. It's true though, isn't it? Yes, and that's that's the central part of my work, is that you can live a rich life, and that rich life can be richer and more vibrant and more personal than you ever imagined.

If you wanna travel, you can travel for longer than you ever thought. You can travel, for me, at nicer hotels. You can spend more time with your children, with your loved ones, whatever your rich life is, you can do that. But you've got to learn a few key basic things about investing and money.

So let me tell you what I would tell my family when they come to me and they go, how should I start investing? The simplest, simplest way that I advise my family is I say get a target date fund. So let me explain what that is. A target date fund is one fund, just one, and you pick it based on the year

that you're going to retire. So if you're gonna retire in 2050, if you're gonna be 65 in 2050, you go and you find that one fund. It's called a Vanguard 2065 fund, or Fidelity 2065, or Schwab 2065. There's lots of brokers. These funds, it's one fund,

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

What is a fund? A fund is a set or a basket of stocks and maybe bonds. So we've all heard of companies like Microsoft, Google, whatever. A fund owns lots of these, right? And that's important because we've heard diversification, like you should have diversified your investments.

Okay, well how do I do that? You don't need to go and buy 20 stocks and then figure out how much of each to do. That's too much work. And honestly, most people are not good at that. Even professionals. You buy a fund which automatically owns lots of stocks, like hundreds of them.

And over time, all you, the individual investor like me, have to focus on is putting money into it automatically. So a fund essentially, I've got a hundred pounds that I want to invest. I find a fund, where do I find these funds? You can go to Vanguard, Schwab, or Fidelity. All those are great companies. What you're looking for, regardless of what country

you're in, is you're looking for a low cost brokerage firm. But there's also apps and stuff that I can use. You can use apps. I don't like a lot of the apps because they gamify you to try to invest. They want you clicking and trading. I hate traders. You do not wanna be a trader.

Traders lose money. Investors treat investing like watching paint dry. That's how sexy it is. Trust me, I'm not getting my entertainment from investing. I'm going out, go watch a movie, go watch Netflix. But investing is boring and automatic. That's how it should be. I used a company called Hargreave Lands down in the UK

who have an app. When I first started investing, when I first started investing in funds, they had a very ugly app, so I wasn't very compelled to use it. I think it's better now. But I would just do it on desktop, which I do get your point, so I wasn't very compelled to use it. I think it's better now. But I would use, just do it on desktop, which I do get your point because you don't want

to, you don't want to be game. You don't want to screen all of that. I like ugly. It should be ugly. And you don't want it to be too accessible. As in, I don't want to be able to check it every day. No, look on my phone, you will see no investing apps. There should not be.

Why do you need to log in and check it every day? What's the point? Yeah. In fact, I log, you know, most people should check it every day? What's the point? In fact, most people should check it every three to six months. And here's how you check it. You log in on your desktop. Wow, it's up.

Wow, it's down. Okay, bye. You're not tweaking anything. It's like making Thanksgiving dinner. Once you've put the turkey in the oven, just let it sit. Do not fiddle with it because you're only going to mess it up. And in this case, you're letting the turkey cook for decades.

And that fund, so I've got a hundred pounds, I go on a website. Yep, Vanguard, Fidelity Schwab, whatever they are. I have no alliance to any of them. Neither do I. There's various ones in the UK. I actually do recommend Hargrove Lansdowne just because it's simple and I think investing in funds, there's no fees, there's no fee associated with the investment itself. Obviously they take a you know they might take a percentage depending on which fund you're investing in. I take my 100 pounds and investing in Hargrove Lansdowne you don't need there's no minimum great from what I understand and there's no if you invest in a stock they charge 12 pounds per investment but if you invest in a fund it's free. I put my hundred pounds into a fund.

The fund is essentially taking one pounds, one of those pounds and investing one pound into Facebook. It's investing one pound into Google, one pound into Shopify, one pound into Spotify, one pound into Nvidia or whatever. It's doing that for me. It's managing it for me. It's making the decisions for me.

I just put the money in every month, whatever I can, and I leave it. Yeah, and let's go even deeper. I love that we're getting into the nuts and bolts here because you know, honestly, most people, they do not know how to invest. Literally, what website do I go to and then what do I do? The fund owns these different stocks

and some will go up and some will go down, and it's inconsequential to you. All you need to know is you own this fund. Now that you've opened up an account and you've sent 100 bucks or 1,000 bucks, great. You've made one of the most important decisions of your life. Now there's just one more thing you have to do.

Set up an automatic transfer so that every single month you have a certain amount of money going in. Now if you don't know how much money, use my conscious spending plan guideline. What did I say? Five to 10% of take home is a good guideline. All right, you should be able to do 5%, trust me. Anyone who comes to me, they go,

Ramit, there's no way, must be nice, I can't afford it. I go, show me where you're spending your money. I guarantee you I can find 5% to send in every month. Now, you're not trying to send it in. I don't try to brush my teeth in the morning. It's a habit. Investing is even easier than brushing your teeth because you set it up automatically.

The investment fund will automatically draw from your checking account. And it will pull in $100, $500, $1,000, whatever your number is. And so you're not going to log in for three, four, five months. You're going to log in a few months later. You're going to be like, oh my God, I didn't even realize that all this money is in here.

When you add that plus compounding over many years, that is how real wealth is created. So I don't want anyone to think that you have to be rich in order to start investing. One of the ways you get rich is by investing. I've got a friend that's currently actually in this building at the moment, and I had this conversation with them about a year ago, gave the advice that you've just given there. And about two months later, this individual, who I shan't name, came to me and I said,

how's your investments going in that fund? And they said, oh yeah, I had bills, I had a credit card bill, so I took it out. Oh yeah, she treated it like a checking account. Investments for me are places to accumulate wealth. I don't draw from it. That's what a checking account is for. So what that is is there's two parts

to what your friend is saying. One is mentally she's thinking that this investment account is just money I can draw from if I need it. So I would sort of gently change the way she thinks about it. The second is I guarantee her account structure is a little subpar. So here's how I would set it up.

This is in chapter five. It's all automation, because trust me, I don't want to spend time transferring money back and forth. I don't spend any time on that. You get paid, your money goes into your checking account. From your checking account, it is automatically transferred to a savings account.

In fact, I have sub-savings accounts for vacation, car, down payment, all that stuff. So you have money set up for specific goals. Money is transferred to your investment account. It's transferred there. I'm not gonna touch that stuff. So you have money set up for specific goals. Money is transferred to your investment account. It's transferred there. I'm not gonna touch that money. I'm gonna let it cook. And then I have my guilt-free spending,

which is going out with friends, whatever I love, and my credit card bill is automatically paid off every single month. That's how you wanna set it up. It takes a couple of weeks to set everything up up and then you never have to think about it again How can you prove to me that this is the way to make wealth? What case studies have you got that investing in funds over a long period of time is the path to financial? Wealth because you know, it's you said earlier about the paint-drying thing

The narrative that we see about how white people and how people get rich is, you know, they sell a company or they have a lottery win or maybe they buy some cryptocurrency and it goes up. That's what we hear. That's what we try and emulate. Totally. We proved to me that that's the fund strategy is better. Well there's a couple of things. First off, the research over more than 100, about 100 years shows the returns of the stock market.

And the returns tend to be, at least in America, they tend to be around 11%, 10 to 11%, and if you take out inflation, you get about seven to eight percent per year. Now, for anyone listening, they go, okay, well, what does that mean? That number means nothing to me, 7%, whatever. If you go right now and you Google investment calculator

and you just plug in your age, you plug in, let's say, 200, 300 bucks a month, and you plug in 7% return, and you just watch how that money grows, you will be shocked. Jack, get me my phone, I'm gonna do it now. Okay, so let's search for compound interest calculator, and there's a really simple one,

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

I'm gonna say $5,000 and I'm gonna start when I was 16. Because if I'd saved my money when I was 16 and not spent it recklessly, I think I could have had that $5,000 when I was 16. Annual addition, what does that mean? How much can you invest per year? So for most people they think about on a monthly basis, they might say 200 bucks a month,

which would be $2,400 annual addition. Okay, so what do you wanna say? I'm gonna say, can I say $5,000? Yeah, that's about 400 bucks a month. I think that's reasonable. I often find that with people making median or slightly above median salary, that there are hundreds of dollars a month

of money that is unaccounted for, that if properly made intentional, could be invested. So great, 5,000 a year. All right. Obviously I could have, once I got past a certain age, I could have increased that though, so. We're gonna talk about that. Okay.

Hold on to that idea. Okay. How many years? This was you at 20? This was me at that. Okay, hold on to that idea. Okay, how many years? This was you at 20. This was me at 16. Oh, okay. And how old are you today? 30? Okay, so 14 years Let's just do it until today and we'll see what happens. Okay. All right 14 years and then it says interest rate So what should we assume for that? Is that 8%? Yeah 7 to 8 I do 7 just to be super conservative Because I never want to be surprised on the downside, right? If anything, I'm gonna make more so 7% All right. Let's calculate it

Okay, what do you see? Damn, what do you see? a hundred and thirty three thousand dollars five hundred and thirty seven. Yeah, that's what you would have had right now now Let's add some context. So this is really important. You see a number that says $133,000 at age 30. Yeah. Okay, is that a lot?

Is that not? Hmm, I don't know. Let's break it down. At that point, you started with $5,000 and you invested $5,000 per year. We assumed no raises, even though you obviously made more than you made at age 16. We assumed you stopped investing at age 30,

which is obviously ridiculous. And you end up with six figures. Let's play it out. Let's take it until 40. Play it out. Let's take it until 40. So instead of 14 years, you invested for 24 years. What do you see? I would have $336,000.

It's getting better. From just $5,000 a year. It's not much. It's fantastic. Again, 400 bucks or so a month is very modest. Remember, people's income goes up, typically in their 30s and 40s, and if you already are investing a little bit automatically,

all you have to do is just tweak a number, and it will take an extra couple hundred, three, four, 500 bucks. Let's do one more. Let's go to 34 years, just because I wanna see what happens, and then we're gonna play with the other numbers. Okay, so investing from the age of 16 until I'm 50, I would have $736,000 in my account.

Yeah. Now I wanna do the full thing. I wanna do a more realistic number here. So instead of 50, we're gonna go 49 years. That takes you to age 65. Yeah. Okay. And instead of $5,000 per year,

your income obviously went up from being 16 years old. So I'm gonna pick a number out of thin air and I'm gonna tell you how I picked it. I'm gonna say instead of $5,000 a year, it's actually going to be $30,000 per year. Let me tell you why I picked that. In your early years, you don't have as much money, but you were still investing a little bit,

which shows that you're dedicated. As your income goes up, you're gonna start proportionally continuing to invest. So at a certain point, your income will be really high, and that will bring that average up. That's why I switched it to $30,000 per year. I actually think this is quite modest, but I'm going to go ahead and do it. So here we have someone starting investing at $5,000. They invest $30,000 per year. They grow it for 49 years at 7%.

Do you know the math? No, tell me. $12,303,000. So that's me starting with 5K, gradually ratcheting it up until I'm investing, well, investing 30K a year per average across those 49 years. Yes, which is a flaw in this because it's so simple. That money invested, you're not actually gonna invest

that much early on, you'll invest more later. So you won't actually, you'll maybe have a marginal amount less, but we're talking 10 versus 12 million. That's a lot of money. And then if I got 8%, instead of the 7%, I'd have 17.4 million. Yeah, but don't mess with that. Because this is what people do.

They go, well if I got 13%, I'm gonna invest in this PE fund. I go, don't do that, you're gonna lose all your money. Just stop. 7% is safe, it's conservative. That's why I am here, that's why I wanna encourage people, you don't need to juice your returns. I hope you do get 8%, but I don't want you to count on that. I want you to count on safe, stable returns,

and what matters for you is the time you started early and the amount you have a considerable amount to invest. You know, the biggest debt, one of the things I, I love saying this, but like the biggest debt all of us pay is ignorance. And so I heard this close at this pitch years ago, I love saying this, but the biggest debt all of us pay is ignorance. I heard this close at this pitch years ago. This guy got on stage and he was like,

Hey ma'am, how much do you make? She was like, $50,000. He wrote $50,000 on the whiteboard and then he wrote $1 million on top of the 950,000. He said, you pay life $950,000 every single year for not knowing how to make a million dollars a year. And it was a crazy concept. He was using it to close the audience. But the most expensive thing that all of us are paying for is the information that we don't know. And that's both frightening and also incredibly exciting. Because like, fish in the best ponds, right? Like a good fisherman knows where to fish. And a different way of saying it is, find the people who value what you have the most.

And I'm sure you've heard this, have you heard the story of the father and the son with the car? No. Okay. So- Maybe I have, but I'm not sure if it's enough detail. No, it's good, it's good.

So there's a father who gives his son an old beat up car. And he says, you know, hey, I don't know if it drives or not, but you can take it down to the dealership down the street, see if you can trade it and get some money. He's like, okay. So he goes down the street, goes to the dealership. They say, we'll give you a thousand bucks for it. And he comes, you know, hears him out, comes back home.

He's like, dad, they say give me a thousand bucks. He's like, okay. He's like, go to the impound yard where they, you know, break the cars up just for metal. He's like, see what they'll give me a thousand bucks he's like okay he's like go to the impound yard where they you know break the cars up just for metal he's like see what they'll give you goes there and the guy's like ah I don't know this might be 500 bucks of metal kid like you know comes back home he's like daddy you know said it was gonna be $500 he's like okay he's like hey go down to street to that that antique dealership see if they've got anything that use car lot it was like okay so he goes down there, talks to the guy,

comes back home super excited. He's like, dad, you won't believe it. He was like, this is a historic car. There's only like 10 of them left. He's like, it's worth $100,000. And so the father smiles and he's like, and the lesson I want you to know is that it's not necessarily who you are,

but the people that value you the most. And so you can talk to different people and go to the people who value you. And I just I love that story because it's a huge business story in terms of like sell where the fish are, where the big fish are. Like if you're gonna go hook fish go to go where the whales are. It takes the same work but a lot of it's just belief. People don't think it's possible. And so a lot of times you have to just keep leveling up and you sell your first $10,000 thing, you sell your first $100,000 thing, sell your first where the whales are. It's normally easier. Like, you know, you've seen that meme that says like, so what exactly am I gonna be getting

for this $50 thing, right? And then it's like $50,000 clients, like why are set yesterday? Like, what else do you need? Like it's, and that's totally true. But I think there's a skill in understanding where to fish. Certainly a skill, information, it's information. It's even knowing that there was another lake over there

in part. And that's why like listening to conversations like, this is so valuable for people because it lifts a curtain. And you go, what the fuck you guys were behind here the whole time partying? That's what my business life has been like. It's like gradually, like I think I heard Kevin Hart describe on Joe Rogan one time where he said,

there's this other room where these people playing this other set of money games. And then when you get in that room, you get, you're almost pissed off that nobody told you this room existed, but then there's another door. And then you get through there maybe a couple of years later and you find these other people, these fucking billionaires that are playing another set of games and you're going, what? And they're chilling. They're just smoking cigars. They're not even doing any hard work. And you go, tell me the games that you guys have been playing in here. Yeah. And then again, the frustration is, and that's kind of what I feel like in my business life.

It's been like where at the jump I'm charging. I don't know. I remember my first, we found our first deck from 2014 charging. I remember the package we had gold, silver and bronze. It was like, you know, $200 package for like support and then $500 and then the gold package where we threw everything in for a thousand dollars. And I remember one of my first clients accepting that. And then I think today, like the only difference, okay, those skills that have increased, but information is the big thing. Knowing how to do it, you know, when you think about curtains that have lifted, that have really shifted the games you play

from a value money perspective, like where someone's turned the lights on you, you go, fuck, of course. Is there anything else that comes to mind? I will answer it with the stair steps of how each order of magnitude change in my income. So when I went from being an employee to self-employed, I went from making four figures a month to five figures a month. how each order of magnitude changes my income. So when I went from being an employee to self-employed,

I went from making four figures a month to five figures a month. And that was for me just like, I'm now in control. The level above that was I started having other people who worked for me. there, did the turnaround business, still had the same organizational structure, had another degree of leverage. The cost of goods was basically nothing. This is one of my favorite topics in the whole world. If you have a lot of leverage, you put a little bit in, you get a lot out. If you have no leverage or low leverage, you put a lot in, you get a little bit out. And a lot of times people who are listening to this and are not making as much money as they want, if they're putting lots of input in and not getting a

lot out, they have low leverage opportunities. And so understanding how to get more for what you put in is the game overall. And so the first level that I ascribed was labor. It's just work. First I was working for someone else. Then I worked worked for myself then I got other people to work for me First level each of those levels was more leverage above that. I had media which is the thing that I was licensing out So another degree of leverage. I made it once and I could license it out infinity on top of that I have capital I can take capital. I don't have to sacrifice time in order to get something for it. So it's high input output Above that would be some sort of technology you build the code once in theory in order to get something for it.

and somebody else has a podcast, of leverage and they matched all of them out. And that's at least the curtain. And Naval talks about this, if you're familiar with Naval Ravikant. He talks about these things as the elements of leverage or four types of leverage. And understanding that for me has kind of been a blueprint for wealth overall. and capital, there's degrees of capital. First you can get friends and family to give you money, then you can get institutional money, and then you can get public money.

You saw the IPO money, like the fact that the NASDAQ was 4X the Düsseldorf exchange. same work, more zeros. And so I love this topic because I think that that's fundamentally like the people who move faster in life don't actually move faster, they get more for every step. If right now you want to find where is your unfair bet that can make you your millions with your skill set that nobody else in the world can replicate except you. Here's what I need. I would need a whiteboard.

I would need a pen, which I would do if I was you. And I would need a smart friend. Perfect. Like, so I've got Steven here. And at the top of the whiteboard, I would write on this side, skills. Oh my God, you're going to see my handwriting like a doctor. And on this side, I would write money. And I would start writing down all the things that we're brilliant at.

So let's pretend it's, it's Stephen here. And we'll pretend like you don't have all the things that you have, but your core skill set. You can put your hand on the screen by the way. It makes me nervous. Am I doing this like a boomer? I am the handwriting is a little bit. It's giving doctors. Okay. Oh yeah. Okay. So embarrassing. Okay. So social media, right? You're incredible at social media. What else are you probably good at? Well, you know a lot of people. You've got a network. What else?

Well, it's not just social media though. It's actually a few particular things. It's like YouTube and I think you're one of the best in the world at short form video, right? You're also one of the best in the world at like a data-driven social media strategy. So you can kind of say upfront, hey, we think this is going to go viral because the data says this thing over here. What else is Stephen good at?

He's charismatic. He can probably get people to agree to things just by talking to them. What else? The British accent. So probably you want more in-person interaction because we've got, you know, a very charismatic person. What else is Stephen really good at? Well, he asks a lot of questions.

This is my hinge profile, by the way. I'm just going to copy and paste all the messed up over. Yeah, good looking, funny, you know, exactly. So we'll just say these, there's a lot more deal flow, but let's just pretend that all you're good at is social media. You're good at getting to people, which is a network. You don't even have to know rich people, just can you get to them. You're charismatic, you're data driven. Okay, great, we've got all these skills.

Now how could we apply these skills to get the most money humanly possible? And I would do exactly what you said. So how do you figure out most money humanly possible? It's two things. It's the, how would I do this? It's the size of the problem. It is the value of the solution. Interesting.

Okay. And so if I'm thinking about this for you, if I go and I give your social media skills to a trade or service business, I'm not going to make that much money. How do I know I'm not going to make that much money? Because I'm going to go look up online, what is the average revenue of this business and the average profit margin? Now you probably didn't even think this way when you were thinking about it, but you guys

look online right now, what's the average profit margin of a biotech company and average revenue? Let me tell you what it is. It's going to be like 50 to 80 percent, and it's going to be hundreds of millions that you could potentially get. Trade services business, a lot less. And so that's where I would start. Skills plus money really equals to three things, which is like sector, size of the business and profitability of the business.

And I would play this game. And what that might look like is you go, okay, I know that I have some friends in, let's go to the places that we know have the most cash in Silicon Valley, on Wall Street. If they could make a lot more money, if they had a lot more attention, because what I'm selling is attention, I want to get to the people who can make the most money with the most attention. And that means that I'm not going to go to Walmart, only has 6% margins. I'm going to go to the highest person that I could get to.

And it'd be fun if anybody's listening to this right now, try it. Like tag Stephen and I in your stories on Instagram of your little charts and let's see and I'll give feedback. Anybody that tags me in it if you're like here's what I think my skill is, here's what I think the industry is, I'll tell you one way or another and it can be fun. You can see other people's examples live. So for people that are only listening on audio and that can't see what this chicken scratch you've just drawn on this iPad. On one hand you have, you list your skills, and then on the second side you're listing

the ways you believe you could make the most money from those skills based on the size of the problem you'd be solving with them and the value of the solution. So for example, let me try and play this game with you then. So I am a writer So I'm gonna do my skills on the left hand. I'm a writer and on the right. I'm gonna write money. Yeah, I'm a writer I'm really good writing stuff. Um That's it And I kind of get I kind of get the internet

So I kind of understand LinkedIn blogs and stuff like that, but that's it. I'm right to go with what would be the worst What would be the worst thing you could do if you're a writer? To make no money. To make no money. Because sometimes it's easier to do the negative. Okay. Working for a local newspaper. I was thinking like fantasy books. Like you could write like fiction, you know, really hard to make money in. You could write for a local newspaper. That's an even worse idea. So I like that. So now you've got your bottom tier, right? Which is like 14 bucks an hour or something like that. Now, if you look about, I mean, you could Google

this. What is the highest paying jobs for writers? I bet the thing you'd find on top copywriter. Why? I got a better one. Oh, what's the better one? Do you know why I know this? Because when I was in working in biotech, we could hire one, which is a medical writer. Oh, so smart. Hyper specialized. Honestly, we, so a typical copywriter when I was working in my social media company, we might pay entry level 25,000 pounds, which is probably about $35,000. A medical writer, someone that can write about the psilocybin compound in my psychedelics business would get paid $150,000 or more. We just couldn't find some. We found loads of people that could write, but nobody that had within their skill stack, even though it's quite easy to teach the ability

to write using medical words, slightly medical words. It doesn't mean you need a medical degree. You could probably learn how to write, become a medical writer in a month if you really committed yourself to it. So that's the top. That's so true. And same with finance. We go to the things we know. So you know biotechs, you know there's a niche there. I know finance and I know that again, it's one of the highest paying industries. So a financial writer, what would that look like? It would look like somebody who knows how to write, probably an investor update.

Yes. Yeah, yeah, yeah. So hugely lucrative. And then the other thing you could do is, I guess I didn't even think about this before, it would be like size of the problem, it would be value of the solution, and then it would also be structure of your job. So like if you're a copywriter, I wouldn't take a job for 35K. What would I do?

I would say, hey, pay me, what is the salary you want to offer? 35,000, I'll take 10,000 so I can eat because I'm hungry. But can I have a percentage of the upside that I drive above and beyond goal? So if I'm going to write copy that converts into revenue, like I'm going to write a funnel for your biotech company, or I'm going to write a funnel to get investors for you. If right now per month you get $100,000 through that funnel, how about you just pay me an extra 10% of everything I drive above your 100k? So I think that's another way you can make more money is getting smarter on deal structuring. Well, that's actually when I moved into biotech, how I got paid.

When I talked about being paid a thousand times more than I would have previously, it's because the way I got paid was in options in the IPO. Brilliant. So I got given in that particular company, I got given 400,000 shares effectively in the company at a certain price. And so when the company IPO at $3.2 billion on the NASDAQ in July 20, I don't know 21 or something, even though I'd only worked in the company for about six months, just helping them build out the marketing team, I think my net return was on the equity value at the time was quite close to 10 million. So six months work, 10 million return. And really, really the reason I did it was because I was so interested in psychedelics,

but it just opened my eyes to the fact that any kid with social media skills and that knew how to structure a deal with these people could have walked in there and said, give me some stock in this IPO and I'll run your social media for six months. You're so right. Could have changed your life. Yeah. And it's something I'm struggling with trying to get people to understand right now is that even if you never buy a business, which is what people fix it on, well, I haven't bought a business yet. I haven't bought a business yet. It's like,

God, you're never going to regret learning how to do deals. 100%. You're never going to. I think that is the most valuable skill set in the world. I completely agree. And it's so unfair that people don't know about it. It's so unfair. But it's also your fault if you don't know about it, because nobody's gatekeeping this information anymore. It used to be gate kept. Like when I first started off in private equity, I wasn't allowed in the rooms where they were actually doing the

deals and the terms. And if I wanted to see what the final terms were, like I had to kind of sweet talk my way into figuring out how they structured it. But it's an unknown unknown. So before I knew, I didn't know that I didn't know. Yeah, that's true. Yeah, that's very true. But now I think there's enough people out there talking about it where you're like, I mean, if you think about whether you like Donald Trump or not, what is he really good at? Deals. The art of the deal. Like, that's it. And that is what, I is what Elon Musk, how does Tesla actually make money?

They make money through credits, through credits for solar. So he was able to survive for those 10 years of building that company because he has some of the best solar tax credits in the world that he negotiated with the government. So where does one go then? Where does a 25 year old kid listening to this go to learn how to make deals? Well, I have a book coming out called Main Street Millionaire. Yes, exciting. I know.

And we have stuff we can tell them about that later too. OK. Well, I'm going to link Main Street Millionaire below so everyone can preorder it. I've preordered, I think, 10 or 20 copies of it, maybe a couple more. But that's like 30 bucks. And you learn almost everything you need to know about doing deal

to start. And that book is only what you need to know. I made it on purpose, not really long, not overly intense. It is exactly what you need to know. And then if you like learning deal making and you like that book, then you go to contrarianthinking.com and we have courses and free newsletters and a community all about buying businesses. But that's where you should start. The other thing I came to learn is I got money and it was almost like someone pulled the

curtain back for me is how wealthy individuals play the tax game. Oh my gosh. And it's a tax game that the average person has no idea is going on. Got to talk about money. Tax avoidance is a key skill to building wealth. And by the way, we don't talk about I speak openly about my, I won't call it tax avoidance, but my tax strategies. If you're, you know, it's like they said, if you're a prisoner of war, you have an obligation to escape. If you're trying to build wealth, you have an obligation to pay as little tax as possible. Do it legally, but Apple will issue their IP

to Apple International in Ireland, and then they will use Apple Ireland, they will license their IP to America, charge them tens of billions of dollars, thereby increasing the income of Apple Ireland at a lower tax rate and decreasing the income in the US, thereby lowering their overall tax rate. That is pure tax avoidance.

Every organization, every corporation does this to the hilt, and so should you. By the way, I will vote for people who have an alternative minimum tax. We have to raise taxes on corporations. The 25 wealthiest Americans pay between six and 8% tax rate. What are the tax games they're playing? Oh, the rich people. There's a bunch of them.

First and foremost, it's you buy stocks, you never sell them, you borrow against them. Okay, explain that to me like I'm a 10 year old. So sure, you own $100 in Amazon stock. Yeah. You need money to buy something instead of selling the stock. And say it's gone up 50%.

I say it's doubled. You would have to realize a capital gain and pay long-term capital gains on that $50 gain. No, just borrow against it and let the stock continue to grow. And you pay a little bit of interest, hopefully, from your current income. But basically, it's invest, borrow against it, and die. Put it into a trust and then pass it on to your kids.

There's a lot of state arbitrage. Jeff Bezos just moved to Florida to spend more time with dad. Isn't that sweet, Steven? Isn't that nice? No, it has nothing to do with his father. Give me a fucking break. He aggregated $160 billion in wealth.

He would pay about another eight or 10% in state taxes in Washington because he's got to leverage the public school system, the University of Washington, the Seattle Tacoma Airport, the hospital system. But in the US, you're allowed to peace out to Texas or Florida and pay no income tax. So all the people shitposting California or New York,

show me someone who's, all of a sudden can't handle San Francisco politics. I'm gonna show you someone who needs to recognize a capital gain and has all of a sudden decided they like Texas politics. It's really not very, it's very disingenuous. There's the tax loophole I've leveraged. In the US, there's something called 1202

or qualified small business. So when I started L2. What's L2? L2 is my analytics company. I started it, I invested a small amount of money because it was a business worth less than 50 million. Your business would qualify in the US as QSB small business. If you hold onto that stock in that company

for longer than five years, when you sell it, the first 10 million or 10 times the basis, are tax free. So the first 10 million out of L2 was tax free, zero. That makes no sense. If that sounds like we're screwing the middle class, trust your instincts. I invested in a company, brought a company out of bankruptcy. I invested two and a half million.

The first 25 million, got very lucky, the company got sold for a lot of money, the first 25 million were tax free. The tax code has gone from 400 pages to 4,000, and that extra 3,600 pages are to turn rich people into super rich people. Now, the myth around taxes is the following, that rich people don't pay their taxes.

Actually, the sort of rich pay a disproportionate amount of taxes. So if you make all of your money from current income, that is salary, and you make a lot, you're actually paying more taxes than anyone. So mom's a baller. She's a partner in a prestigious law firm making a million bucks a year.

Dad's a chiropractor, has three people working for him. He makes $1.6 million a year, total ballers. In order to make that kind of money, they probably have to live in an urban center in a blue state, where at that level, they're paying 45, 48, sometimes 52% tax rates. But if dad decides to raise capital and buy a bunch of chiropractic clinics

and they become investments and he sells them for $50 million, his tax rate plummets. So you don't wanna be a super earner, you wanna earn enough money to invest so you can become a super owner. The top 25 wealthiest Americans pay about 8% in tax, right? So actually the bottom half pay almost no tax.

They pay a lot of consumption taxes, but it's the super earners that get screwed. What I call the workhorses. But once you make the jump to light speed and you own things and you make your money from buying and selling assets, your tax rate plummets. The really sort of actionable thing there for the average person as well is probably the first point where you said a lot of what rich people do is they'll buy a stock. So I'll spend 10k on Amazon stock. And then I go to a bank and the bank give me a $5,000 loan against my Amazon stock tax free. And I just hold the Amazon stock. Now I've got 5,000 tax free. If the Amazon stock goes to

$20,000 in value, then I can go to the bank and say it's gone up now, give me another $5,000 tax free. If the Amazon stock goes to $20,000 in value, then I can go to the bank and say, it's gone up now, give me another $5,000. And I just spend and live off that money. Now, if the Amazon stock collapses, I'm fine, because the loan was against the stock. So they'll sell the stock at a certain point as it's collapsing to get their money back. Yeah. I mean, you don't want to get into too much trouble, but leverage is how smart people go broke. But the idea is that one of the great tax schemes in history is that stocks grow.

Think of yourself as a stock. You go up in value a million bucks a year. You're making a million dollars a year doing a very successful podcast. Every year, the government in the UK is gonna take 40 cents of that, 40% of it. If you want a million dollars in stock and it goes to 2 million, you don't get taxed on it till you sell it.

Yeah. So just never sell it. Never sell it. And that's what Elon's doing with his companies. People say he's got, you know, $200 billion, whatever. In fact, he's borrowing tax-free against those companies. And then when he finally needs to sell it to pay off some of those loans, he moves to Texas despite the fact he built all his wealth in California. Smart. I think one of the great

advantages of life is, as it relates to wealth creation, is really getting good tax advice, because I've sat here over and over again with people that have great tax advice and some people who didn't have any at all. And the outcomes are quite frankly shocking. The variance in outcomes are quite frankly shocking. From variance in outcomes are quite frankly shocking from one person going bankrupt to the other person becoming a multi-billionaire. And it comes down to some of it comes down to their tax strategy and how they thought about tax and how, you know, being around a lot of people now that are masters in tax, it was like, yeah, I describe it as someone pulled back a curtain that I never knew was there. And

all these people were doing magic behind this curtain and no one ever told me that curtain existed. And it's called tax. We don't all pay the same tax. Because you're not supposed to talk about it. Again, not talking about it is rich people trying to keep poor people down. Because rich people talk about their taxes all the time. Brightest woman in my entire professional universe

is a woman named Lucy Lee, who is my tax Yoda, who works at a big law firm that I pay 1800 bucks an hour to, to figure out the smartest. When I set up a company, I talk to my tax Yoda, who works at a big law firm that I pay 1800 bucks an hour to, to figure out the smartest, when I set up a company, I talk to my tax person. When I'm about to get a big payment from my podcast distribution company, I talk to my tax person first.

This is, it is everything, but the key when you're young is to become an owner, not an earner. You're an earner. You wanna bust a move out of earning and develop an army of capital that goes out and kills for you at night. 500 bucks is a lot of money when you're 21. 500 bucks when you're 21 is 10,000 when you're my age, right?

And it's gonna go really fast. So just start. And then once you become a super owner, you have 10,000, 50,000, 100,000, a million dollars in assets, then you you become a super owner, you have 10,000, 50,000, 100,000, a million dollars in assets, then you can become a super tax avoider. That sounded awful. That sounded awful. That sounded awful.

Sitting here with your bucket of sand, you're sitting here with your bucket of sand, you're sitting here with your bucket of sand, you're sitting here with your bucket of That sounded awful. Sitting here with your bucket of sand. Oh my God. That's right. This is how we fuck the middle class, Stephen. This is how we really screw over the little guy. What is your capital allocation strategy? How do you invest your money? This is the thing people want to know most about you.

I keep it as painfully simple as I possibly can. Literally, my entire net worth is cash, a house and index funds and some shares of Markel while I'm on the board of directors. That's it. There's nothing else. I can summarize everything so easily and so cleanly. Truly, that's it. It's not even like I have 20 bank accounts. I have one bank account, one brokerage account, and a house, and that's it. So simple. Why index funds? You're the reason I... Your capital allocation strategy is almost identical to mine. I want to talk about the housing as well, But after reading your book, I stopped trying to pick stocks and I invested all of my available capital into index funds outside of investing it in starting companies.

So I'm a shareholder in, I don't know, 50, 60, 70 companies. All my other available capital is invested in index funds. And then I have a very long-standing large position in Ethereum, which I've held for like six years or something. Which has done me very well. That is it. And the Ethereum investment is also based on the fact that I run a software business that is in blockchain.

And I could see that developers are building on top of Ethereum more than any other blockchain. So that insight was really beneficial to me. And six years, so even with the big fall of the last two years, you're still up a lot. Yeah, I think your book taught me that successful investing is when you lose the password to your investment account. Yes, that's exactly it. I don't actually think you said that in there, but that's like when I lose the password to my investment account, I'm so proud of myself because it means I haven't checked it in forever.

And so it's funny because you were coming today. I thought, oh yeah, well I have all this money in these index funds. I'll check it. And I thought, fuck, I don't know the password. Good. That's why you're going to do okay. The reason I do this, what's important is that I am not one of the people who says nobody can beat the market. So therefore use index funds. That's not what I believe. I think it's extremely hard to beat the market and very few people will do it. But I think there are really smart people who can do it,

and people who I know who I could invest with. The reason I don't is not because I don't believe it can be done. It's because the variable that I wanna maximize for in my investments is endurance. If I can just earn average returns for an above average period of time, it's gonna lead to amount of success

that will literally put you in the top 5% of investors. My parents are a great example of this. My parents are smart people, but they have no financial background. And they have like minimal financial interest, I would say. But they have dollar cost average into index funds for going on 40 years now. And literally, if you look at the returns, they've never sold anything ever. And literally, if you look at the returns, they'd probably be in the top 3% of professional investors.

For anyone that doesn't know, what is dollar cost averaging and what is an index fund? Dollar cost averaging means you buy the same dollar amount of investments every single month come hell or high water. It doesn't matter what the stock market's doing, recession, boom, bust, you say, I'm going to put $100 or whatever it is in the stock market on the first of every month. Now most people who have a 401k at work are doing this whether they know it or not. They have $100 or whatever removed from every paycheck and it goes into the funds that they own and they don't have to do anything. Whether you know it or not, you're actually doing it.

The contrast to that would say, I'm going to buy and sell based off of how I feel in the stock market. I wake up, I watch CNBC, I decided to sell, I'm going to put it back in when I feel better about the market. It's the contrast of that. An index fund is just a single fund that owns hundreds or thousands of stocks within it. If it's diverse enough, if it's big enough, really what you're doing is you're owning a slice of the global economy, which is how I think about it.

It's thousands of individual stocks in there, Tesla, Apple, whatever it be, but really what you're doing is you're owning a slice of capitalism. If I was your son and I said, dad, prove to me that that's a better long-term wealth creation strategy than buying crypto or buying companies that I use or like, how would you explain that to your kid? Your ability to do well over the next one year or five years is going to have no role whatsoever on your lifetime ability to generate wealth. All that's going to matter is not what are the best returns you can earn. All that matters is what are the returns that you can sustain for the longest period of time.

All that matters is your endurance. It doesn't matter if you can double your money this year or even double your money again the next year. All that matters is can you stick and keep it going for 50 years? That's where compounding comes from. Prove it. Because the formula for compounding is returns to the power of time. That's not quite it, but more or less that's it. In that equation, if you understand the math, all of the heavy

lifting comes from the exponent. Give me a case study where someone has followed that strategy and done well. Okay. Here's one way to explain it that I use in the book. 99% of Warren Buffett's net worth was accumulated after his 60th birthday. After he turned 60 years old, 99% of his wealth has been accumulated after that period because the longer you hold that for, the crazier the numbers get. When he was 60, I think he was worth about $3 billion. A lot of money, he's a multi-billionaire, but now that 60, I think he was worth about $3 billion.

A lot of money, he's a multi-billionaire, but now that he's 90, he's worth over $100 billion. And he's given like a hundred billion away to charity. So if he didn't do that, he'd be worth, he'd go from 3 billion to 200 billion, since he's been 60. Because the numbers just get crazier at that point. He's worth $100 billion.

So if his market, if his net worth goes up 10% in one year, he makes $10 billion, which is three times that he was worth when he was 60. So that's when you look at somebody like Buffett, is he a great investor? Is he a great stock picker? Of course. But the real secret to his success is that he's been a good investor for 80 years. And if he had retired at age 60 or at age 50, nobody would have ever heard of him.

He would have been like one of the other multi-billionaires who lives in Florida and plays golf and like you've never heard of him. The reason he's a household name is because he's been doing this nonstop since he's been 11 years old and he's never stopped. It's just the endurance that's made him so wealthy, not necessarily the annual returns. Patience. It's a difficult thing. It also reminds me of the story that you talk about in the introduction of your book about the janitor, Ronald James Reid. Who, when he died in 2014, aged 92, had a net worth of over 8 million. And he was a janitor. How did he do that? He took what very little money he could

save from his job as a janitor, mopping floors at the gas station. He put it in stocks and he left it alone for 70 years. And that's it, that's all you need. That's all you need to do. If you have endurance in your investing and you can keep it going for years or decades, you don't need to be a genius stock picker. And not only do you not need to do it,

if you have endurance, you're gonna be literally 97 or 99% of the genius stock pickers. And what's so interesting about it is like picking the right stocks is hard. It's supposed to be hard. Like there's no world in which everybody who tries to beat the market is going to do it. Of course it's hard. Just like being an MBA player is hard. But having endurance is like largely in your control.

It's so much easier to just be patient than it is to pick the right stocks every single day. And I think some people nature nurture, some people like probably Ronald Reed and my parents, just understand it naturally. It's not hard for them to be patient. But there are professional investors who work 80 hours a week for 30 years to try to beat the market and they can't do it. Normally some, that explains most of them. And even the ones who can do it are maybe going to beat the market by half a percent per year, 1% per year. But if you can have

endurance, that's a bigger benefit than you can have by even being like a very successful stockbroker. Like somebody who outperforms the market by 1 percentage point per year, and they can do that for 10 years, that's amazing. That's like Mount Rushmore investor. But somebody who earns average returns and does it for 20 years is going to have way more money. You do it for 30 years, you're going to be filthy rich. You'd be like Ronald Reed, you can be a janitor who leaves $8 million to charity when you die. He's buying a house, a good or bad financial decision. My brother who works in my company, he's the one that introduced me to your book many,

many years ago, said to me something along the lines of, Steve, don't buy houses to make money because you have the ability to play a different set of games that very few people can play. And what I mean by that is he kind of explained it to me because, listen, everyone can buy a house. So the returns there aren't going to be huge. Go find a game that like only you can play. You'll get bigger returns. Yes. If you're buying a house because you think it's going to be a good financial investment,

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

I'm owning it just because I want the stability for my family. People buy houses because they think that they're making loads of money from building it. Because there have been periods in time in which people have made loads of money. Historically that's the anomaly. Historically in the US and the UK, housing prices adjusted for inflation go nowhere. It's just been the last 20 or 30 years that there's this very brief window of time that owning a house was a great investment. Robert Shiller won the Nobel Prize about a decade ago for his work in showing that over the last

150 years in the United States adjusted for inflation, most home prices have been flat as a pancake. It's just the last 20 years that have inflated people's expectations of what a house can do. Statistically, there's going to be at least one person listening to this that has made an offer as we speak for a house under the assumption that it's going to help them stack wealth. If they were purely doing it for those reasons, what would you tell them to do instead? If that's purely the reason, run for your life. Don't do it. Particularly, I mean, it used to be, and maybe it still is like this in many cities in America and the UK, but it used to be that

rentals were almost without exception, shitty houses. There were no good rentals. A big change, at least in America in the last 20 years, is that most big cities have tons and tons of luxury apartments to live in, and there are great places to live. And they're in the city centers, and they got beautiful granite countertops, and they're great places to live.

Don't fall for the idea that you can't live well if you're renting. I think that's the problem. And realize that if you're doing it for financial reasons, you're probably about to borrow a shitload of money for an investment that historically has been a very bad investment. Like if you put it in those terms,

like what are we doing here, man? You're gonna borrow hundreds of thousands of dollars for an investment that historically has been a loss. That's what you're doing here? Does you feel good about that? That's what I'd say to that person. Godspeed. I would love to be in the room somewhere where that person has just looked at their partner after persuading them to make that offer because it was going to make them rich. Sorry guys.

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

Yeah, and to make it less complicated, it just makes it a source of truth. In a world where we don't even know who is who online, who owes each other what, any of these things, we now have source of truth that everybody can agree on. And everyone can see. And everyone can see. And everybody can see. You don't need to trust anybody. And so that as a technology solves many things, problems that we don't even know we've got

because they're so part of how we exist. So the technology is not about money. The technology is about truth and exchanging value and creating value in a digital age. Now what is interesting and powerful about this technology is we've seen technology similar before, the internet. We've seen broadband. We've seen these big global infrastructure things. Most of those, the internet was a public service good. Broadband was all built private sector. We didn't get to make money out of these things, really. Amazon made the money, or whoever

it was building the broadband, they all went bust as well. What we've got here is this very clever thing that everybody in this blockchain gets rewarded for the role that they play. In maintaining the blockchain. In maintaining the blockchain. And because these things are scarce, and let's say Bitcoin being the most classic example, there's only 21 million that will ever exist. You've created this scarce asset that is a reward system.

So the people who mine the Bitcoin, they use the electricity to solve the algorithm to get the Bitcoins to make sure there's only 21 million, or they get rewarded. The people who verify the chain get rewarded. And then we can buy the asset, which is actually us investing in the future use cases of this thing. Are people going to use it for storing wealth or building stuff? So now you get this global infrastructure layer of which people can invest.

Now, let's go back to the example of AI. AI, 99% of people listening to this will not be able to invest in it apart from buying some of those big public companies because they're not accredited investors, they're not allowed, they don't get to see it, they're an insider, all of this stuff. This is the inverse. It is fractionalizable.

So a Bitcoin, you don't have to buy one at 60 whatever thousand it is today, you can buy a fraction. So remember we talked about property and the guys who own the big high-end property make all the money. None of us can buy the $50 million apartment in Manhattan and then do it up and flip it for $250 million. Now blockchain, we can all put 10% of our paycheck in it. Do you think people should? chain, we can all put 10% of our paycheck in it. Do you think people should?

Yeah, and more. But the point being is this is the only globally homogenous asset on earth. It's the same in Nigeria as it is in Brazil, as it is in London, as it is in Silicon Valley, as it is in India, as it is in London, as it is in Silicon Valley, as it is in India, as it is in Papua New Guinea. And everybody is on an equal footing. You can put the same percentage of your worth in it. Okay, that is mind blowing.

And it bypasses the banking system, the brokerage system, and all the other incumbent things that get in the way of a Nigerian buying an international investment. So we've got a playing field that's leveled in the fastest-growing technology of all time, in the fastest of pre-taxing assets in price terms of all time, in the shortest period of time, that is globally available to anybody. And then you realize, holy shit, okay, this is important. Now, why that's important is because having more investors in it means the asset becomes

more valuable, which means you're more likely to secure it. People want to join the network to earn some of these tokens to secure it. The more use cases get built upon it because people are making money and it bootstraps it's behavioral economics. It's an incentive based system to bootstrap the most ridiculous startup idea of all time, which is I'm going to entirely disrupt money

and create a new internet. I mean, that's laughably stupid and that's what's happening. One of the, I run a new internet. I mean, that's laughably stupid. And that's what's happening. One of the, I run a company called third web, which is a web three infrastructure business. We've raised quite a lot of money for the company, about $30 million now, and we have a big team. And it's interesting for me to observe the use cases, because people come to third web to build on the blockchain. And one of the really interesting use cases

we've seen over the last, I'd say 12 months, that's really exploded is gaming. People building Web3 blockchain-based games, because if you think about games like FIFA, which is a huge game obviously in the UK where we're big soccer fans, or other games like RuneScape back in the day where you have assets in the game.

In FIFA, you have a messy card. In RuneScape, you might have a sword. The thing that the blockchain now enables us to do is to take those assets from the game and actually trade them outside the game. So if the sword was on the Ethereum blockchain, even though I'm not inside the game, I can trade that sword on the Ethereum blockchain.

And so one of the most exceptional use cases we've seen at ThirdWeb is people building Web3 games, because these assets are now valuable. It's great for the game developer. They've now got this brand new economy for their company. And it's great for the people that own those assets in the game, because those assets are now more valuable because more people can access them. And if I own Ethereum, if I own an Ethereum token, which I do, by the way, I've been stacking it and refusing to sell. But how do I benefit from the fact that games are now being built in Ethereum?

It's really simple. If we'd have all been given shares in Facebook when it started, we'd have all been hilariously rich. But we didn't. The VCs got it, and then it went to the public market, and then you have to have a brokerage account, you have to be approved. What this is happening, you buy an Ethereum token today, if Ethereum ends up becoming bigger and more uses, your token value goes up.

It's as simple as that. So you get to participate in an entire technological revolution really simply from your mobile phone and you don't need anybody to approve it or do anything. Yes, there's regulation stuff, but simple stuff like that. It's pretty straightforward for almost everybody in the world. So therefore, we talked about how do you invest in your disruption and the future of technology? Okay, here's one where you can really do it and it's easy to do. A couple of questions here then. So you said it's easy to do. Let's talk about the practicalities. How does one do it? I can do it on my phone.

I have to call someone. How do I invest in crypto? You just open a crypto account with one of the big crypto providers, Coinbase, Kraken, crypto.com, who are at my Gemini. What about this though? My bank, my digital bank is offering me to buy crypto on there. Should I do that? Yes, you can. And you could do it via PayPal. Start somewhere. I'm not going to say no. But you will go down the journey that everybody goes down, which is the easiest on ramp is the best. Revolut, whatever. I don't care. Just do it. Get a feel for what it's like to own an asset that goes up and down a lot. Particularly down, when it goes down, it makes you feel terrible and you've got to learn about how to deal with it. And then because it goes up over time, if you don't do anything and you've chosen a

good quality asset that's provable as an asset in itself, it'll probably go up over time. In fact, highly likely to go up a lot. And then you'll start thinking, do you remember Raoul saying that the bank owns the stuff and I don't own it? And then he might say, oh, but the magic here is unlike the bank where I can't take more than 10 grand out, I can put it all on my little ledger device because- What's a Ledger device? A Ledger device is, it's actually, it's a company that provides it.

But what it is, because this is just an address on a blockchain and think of it as like your mailbox. You can send stuff to it, but you can't actually take it out. Like your email, somebody can't read all your emails, but you can't actually take it out. Like your email, somebody can't read all your emails, but they can send you emails. Well, that part that's private, that secure passkey essentially, well, you keep that to yourself and it's stored on a device. And there's a complicated way of doing it. And you'll have to go through that, which is you have to have this seed phrase that does it.

This technology will change quite soon. You know, fingerprints, face prints, and a bunch of other stuff. But basically, a little USB stick will secure that you can go and put in the safe or go and take it to your nan's house or whatever it is, can secure your money that it's only yours and nobody can take it out. I have mine on a ledger.

So I have my Ethereum on a small, it's kind of like a small USB stick. And then that USB stick is protected by like 24 words or whatever it is. And those words are on pieces of paper in different countries at the moment. That's right. And it means that no matter what happens, no matter where I am in the world, no matter who comes for me, I can always retrieve the X thousand Ethereum that I have on this ledger device. Yeah.

Unlike a bank where my account could get frozen by the government or they could empty my bank, they could freeze my bank. I will always have that value. And also, you know, there's a famous example of the conversation of gold in the United States, and it's been done in many countries in the past. The good thing about this magic internet money is you have to physically cross borders with it. Yes.

Think of all the Jewish people who had to take money and diamonds and gold out of Nazi Germany and out of Europe, it was hard to do. Here, you don't have to do anything. You just need to remember a seed phrase. A seed phrase being basically a string of words. Yeah. Yeah. Do you know for people that are in that paycheck to paycheck cycle, which I was in for many, many years of my life where I'd get paid for my call center,

I'd go and spend the money, I'd pretty much spend all the money within the first couple of days of getting the paycheck. And I was just waiting the next three weeks for the next paycheck. What advice would you give them about getting out of that cycle? Because you almost feel imprisoned by that cycle

if you're in it. Absolutely. Well, before I give the advice, I wanna explain to that person what's happening because you are the prime customer for our economic system. Banks love you because they can sell you payday loans, they can sell you credit cards, they can sell you lines of credit, and they can keep you in debt for the rest of your life, which means you keep making the bank rich. Corporations love you because you're not going to think twice when we show you this nice bag, when we show you this nice vacation.

You're going to want this stuff and so we love selling you this stuff. The government loves you because you're going to pay the highest taxes. Employees pay the highest taxes. And so when you're in that situation, you are making everybody else rich at your expense. And so if you want to break out of this, the first thing you need to understand, you need to make yourself rich before you make everybody else rich. Because when you're spending all your money,

you are putting your money into their pockets, and you have to stop that. You gotta keep that money for yourself. You're in a boat, think of it this way, you're in a boat and this boat has water just flowing in and you are sinking and you gotta start by sealing the holes and that means you gotta stop the spending.

So if you are in what I call the financial danger zone, which is you don't have $2,000 saved up for an emergency and you have credit card debt. If you are in that situation, you are in the financial danger zone and you have to make drastic changes. That means right now, no more eating at restaurants, no more vacations, no more doing anything that doesn't put money in your pockets and no more Netflix. No. And the reason why I say this isn't because you're gonna save $15 a month.

It's so you can save two hours of your time a day. The average American is watching more than two hours of television a day. And if you don't have $2,000 saved up, if you have credit card debt, you cannot afford those two hours a day being wasted on TV. And that means right now, you have to go out and start using the time to learn, start using

the time to work and start using the time to make some extra dollars. So what do you do? Start selling stuff. Stop spending money. Selling stuff you own. Selling stuff you own. So if you have a TV that you're not using, sell it. You have a car that you're not using, sell it. You have a car that you

can't afford, sell it. If you live in a house that you can't afford, sell it. Downgrade. Move smaller. And then work to earn more money. I've got to say, the couple of things that came to mind as you were saying that, and funnily enough, I put myself in the shoes of 18-year-old Stephen Bartlett when I was in that small apartment with three or four immigrants in Moss Side Rush Home, and I was, you know, my rent was nothing. My rent was £150 a month, which I could not afford and I could not pay. And I was intimately working between call centre jobs. And whatever money I got, I spent. And part of the reason I spent it, just pre,

is because like many people watching, especially men who sometimes feel the need because of the way society is, I was trying to get laid at the same time. And it's hard when you're a young man. And I say young men in particular, because the stats do support the fact that there is an expectation that men pay. When you're a young man, it's particularly difficult to do all of these things to cut back and also get laid. And what am I going to do? Defer getting laid for 10 years? When I say laid, I'm really saying meeting someone and falling in love and having a life. So what do I, if I'm living in a shoe box, which I was, I can't bring anyone back there. I can't take anyone for dinner. I can't take anyone to the movies. So what do I do? This is why every Indian parents

tell their kids to become a doctor so their son can get married. It's the same concept. But here's the thing, you have to pick it hard. Either life's gonna be hard now or it's gonna be hard for the rest of your life. And you have to pick what's more important to you right now. And if we talk about balance,

if you wanna have a balance of everything where you want to find a girl, and you want to make money, and you want to stay healthy, you are dividing your attention everywhere. Not saying it's impossible, but very few people can actually do everything all at once. And if your number one goal is to become wealthy, if your number one goal is to turn your finances around,

you have to get serious about it. Because where you put your attention is where you get the results. And so if you want to be in a better financial situation, you are gonna have to make sacrifices. And it's difficult. I can't come here and tell you it's gonna be easy because that's gonna be me lying to you.

I gotta be honest, I did make a sacrifice. And for me, the sacrifice was I started a business and frankly that meant that I didn't have time to be going out getting laid or meeting people or socializing but it's my story arc ends with it going well and then the romantic situation taking care of itself many years later once it had gone well the romantic situation taking care of itself many years later, once it had gone well, because I was so focused on myself. And it's funny, there is a bit of a paradox to life that the more you actually focus inward,

the more you become a magnet. And the more I focused outward, the more I pursued and chased and sort of neglected myself, the harder it was to get people interested in me. Yeah, and you know, I also want to say that when I talk about building wealth, I'm not talking about becoming a money hungry, just money greedy, this evil person that just cares about money. That's not what I'm talking about, because I want you to live a holistic life, because money is just one part of your life.

But the second part to that is I'm not telling you to never enjoy life. I'm telling you to make a sacrifice for a period of your life that way you can enjoy the rest of your life and never have to worry about money again. It's hard for us to naturally see life as seasons, especially when we're looking forward. When we're looking back, it's very easy to say, oh, that was that season. Like I can sit here now and say, oh, that 20 to 25 was that sacrifice everything in my life to make myself something season. And then 25 to 30 was like building and learning. And then I now, you know, can think of it's easier actually now to think forward in seasons

now that I've been through some seasons. But for someone that's hasn't been through seasons in life, it's hard to think about life in those terms. I now think of my life in these five year seasons. And that helps me to say to, you know, even have conversations with my partner where I go, this is the season I'm in, and it will last probably roughly this long, and I'm going to sacrifice these things and prioritize these things in this season. But it's hard for people to understand this idea. It's difficult. And that sacrifice is difficult, especially during a time where everybody's showing off everything on Instagram. You look at your friends who have a crappy job,

but they're driving around in nicer cars, going on better vacations, going to the nicer restaurants, and you're thinking, what did I do wrong? And then, especially if you're a guy, you have a girlfriend, you have a wife, she's going to say, how come they keep getting to go to Cancun? They keep going to these nice restaurants. How come you can't take me to these nice places? And now you feel like you're doing something wrong because where is this discrepancy?

The reason why I call my show The Minority Mindset is because I'm a big advocate of not doing what the majority of people do. The first time I made a million dollars in a year, I was in my 20s. I was driving a car worth $500. It didn't have a bumper on it. It was not pretty. My wife sat in the car with me

and my employees drove better cars than I did. So, you know, you got to be confident. And you got to work for something bigger. And you want a partner that's going to understand that. That's my belief. Which is not the easy thing. It's interesting because confidence is such a internal thing. And I just feel like I just probably just didn't have it then

Because I I think I was scared for someone to know that I was broke I was so scared to know for someone to know that I was broke that I just didn't entertain romantic relationships and that is the reason why so many people will go into debt to buy vacations, to buy things, to buy stuff, to look rich. And ironically, that's the key thing that keeps so many people poor for the rest of their life is because they're scared to look broke. And now, when you try to look rich, that's the thing that's actually keeping you broke. There's another element to this, which is my life was pretty miserable. So when you have a relatively miserable life, when you don't have many nice things because you're working in a core centre as I was until 11 o'clock at night time doing overtime every overtime hour I could get, then because you're also lonely you're going home alone

walking home because you can't afford the bus. Anything that gives you a little dopamine hit. Gambling. This is why all the gambling shops are in the areas that struggle the worst financially, because those, I mean, a lot of people say, because those people are looking for that, you know, that big payday, that dopamine hit from a payday. My TV in my tiny, tiny little bed-sit room was like half the size of the wall. I was making reckless spending decisions because I think it gave me some kind of hit that I was missing in my life.

It gave me like a dopamine rush that was... And there wasn't many things giving me a dopamine hit at that point in my life. And see, here's the thing. During that time, you are making emotional decisions, as many people are. And it's very difficult to speak logic to emotion. But this is where now you have to be able to understand the difference. Because if you're listening to this

and you're in that situation, you have to understand that if you want to continue being able to live that lifestyle, you're gonna have to make some changes today. Otherwise, you're gonna be stuck in this lifestyle for the rest of your life. it's only going to get more difficult And that's the thing is if you want to become wealthy. The first part is just your own mindset It's your own discipline and I'll tell you can conquer that I can tell you everything about investing

I could tell you different ETFs and index funds to invest in I can tell you different investment institutions out there I can tell you which stock brokerages to use. I can tell you just invest 15% of your income into this for the next 10, 20, 30 years and you're going to become wealthy. But until you can get over that mindset, you're never going to become wealthy. Because then what happens in that situation is when you're in that state of I just want to look rich. I just want to have the dopamine. I just want to have some nice things because I deserve it. I'll work hard. You know what happens next?

You are the one that gets caught up in all the get rich quick schemes. Because someone's gonna say, look, put $1,000 into this, you'll have $10,000 in the next three months. Or I'm gonna show you, you can live the laptop lifestyle. You can work five hours a week,

make $10,000 a month, $10,000 a week. You're never going to have to worry about money again. Just buy this program. And now you're a prime candidate because now you are driven by this emotion of, I want that. I can't imagine if I had an extra $10,000 a month and I don't even have to work for it because you can't see past it. All you're doing is being sold by emotion. And so you're the one that's going to get caught up in the get rich quick schemes. You're the one that's going to make the bank rich because you're going to stay stuck in debt.

Corporations are going to love you because they can keep selling you the nicest, the newest stuff because you want to look rich, want to show it off to your friends, you want to show it off to the girls. And you get stuck in that cycle. Isn't this cool? Every single conversation I have here on the diary of a CEO, at the very end of it, you'll know, I asked the guest to leave a question in the diary of a CEO.

And what we've done is we've turned every single question written in the diary of a CEO into these conversation cards that you can play at home. So you've got every guest we've ever had, their question and on the back of it, if you scan that QR code, you get to watch the person who answered that question. We're finally revealing all of the questions

and the people that answered the question. The brand new version two updated conversation cards are out right now at theconversationcards.com. They've sold out twice instantaneously. So if you are interested in getting hold of some limited edition conversation cards, I really, really recommend acting quickly.