Latest / Freedom Flip / The 5 Types of Wealth: A Transformative Guide to Design Your Dream Life by Sahil Bloom (EP033)

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The 5 Types of Wealth: A Transformative Guide to Design Your Dream Life by Sahil Bloom (EP033) · Freedom Flip

0:00
You're going to see your parents 15 more times before they die.
0:03
All of what follows is the story of how these simple words changed my life and how they may change yours.
0:09
This rare emotional honesty sparked the interaction that altered the course of my life.
0:13
My friend said, how often do you see your parents?
0:15
I said, maybe once a year right now.
0:17
Friend said, how old are they?
0:19
I said mid-60s.
0:21
Friend said, okay, you're going to see your parents 15 more times before they die.
0:25
Gut punch.
0:26
I had to take a deep breath to avoid an instinctively angry response.
0:30
This was an old friend, one who knew my parents well.
0:32
It wasn't meant to be insensitive.
0:34
It was just math.
0:36
The average life expectancy is approximately 80 years, and my parents were in their mid-60s, and I saw them once a year.
0:42
Wow.
0:42
That is the beginning of a book, The Five Types of Wealth, and it is a banger of a book.
0:49
I've probably reread this book, I don't know, 30, 40 times.
0:53
If I had to say one line about it is, after selling a business, I wandered for five, six years, making mistakes, learning, reading books, trying to think about the purpose of life.
1:06
And I go, gosh, I wish I had this five years ago.
1:10
Because he found most of the nuggets of wisdom that I had found myself and put it in one book.
1:15
And it would have saved me five or six years of my life just reading it.
1:19
Okay, you got me hooked.
1:20
Let's go.
1:23
I love it.
1:25
So it really does fire me up.
1:27
So this book really hits on a perfect example, banger number one right out the gate.
1:33
So this banger says, in 2018, a paper published by Harvard Business School professor Michael Norton, researchers asked a group of millionaires, number one, how happy are you on a scale of one to 10?
1:44
And number two, how much more money would need to get you to a 10 on happiness scale?
1:49
Commenting on the results, Norton said, all the way up the income spectrum, basically everyone said they'd need the same thing.
1:56
Pablo, guess what they said?
1:57
More money?
1:58
Yes.
1:59
How much?
1:59
One more zero?
2:00
Two to three times their current wealth.
2:02
And he goes on to explain, that's whether it's a guy with, a girl with one, 10, 100 million dollars.
2:09
So how do you remember this banger fact?
2:11
The Norton virus is how I do it, right?
2:13
There's some software called Norton Antivirus.
2:17
Professor Michael Norton from Harvard Business School came up with the Norton virus.
2:19
Yeah.
2:20
Do you agree with that one?
2:21
What do you think?
2:22
I think that is very common to fall into the fallacy that once we have XYZ, we're going to be happy.
2:28
And that applies to a lot of different things, not just money.
2:32
I think that money is very clear, very obvious, because we live, at least in the West, a very money driven society.
2:40
So, of course, the tendency is like, well, if I get more money, if I get two times, three times, 10 times more money, then I'm going to be happy.
2:49
I will finally be able to X, Y, Z.
2:52
But I think that the same thing happens with everything.
2:55
When I get the right spouse, when I get the right group of friends, when I get the right location, when I get the right house, when I get the right job, when I get the right partner, it's, what do you call that?
3:06
The arrival fallacy?
3:07
Yeah.
3:07
Yeah, he actually references that in page two or three.
3:09
He calls it a rival fallacy.
3:11
Okay, tell me.
3:12
I put AF.
3:13
He just says, the arrival fallacy is the false assumption that reaching some achievement or goal will create durable feelings of satisfaction and contentment in our lives.
3:23
We incorrectly assume that we will finally experience the sensation of having arrived when we reach whatever we have propped up as this destination.
3:31
Exactly.
3:31
And what does he say about that?
3:32
So what is his method to avoid that?
3:35
Yeah, I think I can't say like off the top of my head the explicit response.
3:39
I think knowing it exists is rule number one.
3:42
And I think I'll flip back to kind of the key of his whole book.
3:46
So the key of his book is this chart he has, which is the wealth score.
3:50
He has time wealth, social wealth, mental wealth, physical wealth, and financial wealth.
3:55
Now, he would argue we optimize 80% of our energy towards just that financial wealth.
4:01
Correct.
4:01
Yeah.
4:02
The whole book's argument with the powerful thing about your parents dying is to recognize that's not the only scorecard.
4:09
That's not the one that actually matters most.
4:12
And he goes through at the beginning of this book talking about how he met with like dozens of 80-year-olds, 90-year-olds to say what actually matters in life.
4:19
And the resounding thing is it wasn't, I wish I made more money.
4:22
It was this lack of fulfillment in all these other areas of life that really drove them with regret and concerns.
4:29
Now, here's one big hack he has to your question.
4:32
On page 45, he says, you know, they really needed to set anti-goals, meaning things they wanted to avoid.
4:40
And so he explains this further on page 45 where he says, you want to reach the summit, but not at the expense of these things.
4:46
So what are those things that you don't want to give up?
4:48
Is it getting divorced from your wife or husband?
4:51
Is it being a bad parent?
4:52
Is it, you know, being bankrupt?
4:55
You know, whatever these things, or being fat.
4:57
Whatever it is, rather than focus on our goals, we actually flip it, freedom flip.
5:03
And an example he gives on the next page from James Cleary says, famously wrote, you do not rise to the level of your goals.
5:09
You fall to the level of your systems.
5:11
So he's kind of saying don't optimize for the mountaintop.
5:15
Optimize for not ending up in the gutter where you're saying, how the heck did I get here?
5:18
This is not what I want.
5:19
And you do that by anti-goals.
5:21
So don't list your goals.
5:22
Go list the five things I don't want to do.
5:24
And a lot of this comes from Charlie Munger, and he talks about the things to not do in your life and flips it in that way.
5:29
Does that make sense?
5:30
Yeah.
5:31
Yes.
5:31
So go with an example.
5:33
I don't know how he writes the books because I didn't read it, of course.
5:37
But go over.
5:38
I want to get into some examples.
5:40
This is how I absorb things.
5:42
I like reading things.
5:44
And I also like to understand, OK, how do I what is the implementation of this?
5:49
Here's one example.
5:50
His first example is it's December 18th, 2022.
5:53
And Lionel Messi was slowly walking around the pitch of Lucille Stadium in Doha, Qatar.
5:59
He looks around, gazes off in space.
6:02
It's easy to imagine this is a scene from a pregame practice or following a game's conclusion, but it's not.
6:07
Lionel Messi is walking slowly around the pitch in the 107th minute of the most important match of his life, the World Cup final against France.
6:15
With 90,000 screaming fans in the stands and over 1 billion people watching, suddenly he sparks an action.
6:20
As if possessed, he sprints forward at an angle, receives a pass from teammate, and quickly routes the ball to teammate Enzo, who sends it back to Martinez.
6:28
Martinez shoots, but a spectacular save by France.
6:31
Goalkeeper deflects the ball straight to Messi.
6:33
As he has done so many times in his career, Messi controls the ball and fires a shot in the goal, giving Argentina the lead in extra time.
6:40
So what he's stating is he has a different system of operating, right?
6:44
His anti-goal would be something like having to stop playing because I was burned out or getting off the pitch, right?
6:50
And because he set his anti-goal, right?
6:52
And Messi's an amazing guy, right?
6:55
He's operating on a whole different platform and plane based on his anti-goals that allow him to achieve these results at later ages than anybody thought was really possible.
7:03
The next page is kind of interesting that I'm going to pull up.
7:05
You can see this chart on the right here, and it basically shows the time you spend alone, which early in life, it's only a couple hours a day.
7:14
And by the time you reach 70s, it's like your entire day, eight, nine hours a day.
7:18
And he really pushes this point.
7:19
No matter how many times you do something, there will be a day when you do it for the last time.
7:25
There will be a last time for your kids that wants you to read them a bedtime story.
7:27
A last time you go on a walk with your sibling.
7:29
A last time you hug your parents.
7:31
And realizing all of these people are on lease with you for a very short period of time.
7:36
So any of these activities, any of these things you do, and this is all under the time wealth.
7:41
So time wealth is really powerful.
7:43
This banger he has is from Troy.
7:45
If you remember the famous movie, he goes, I'll tell you a secret.
7:49
Something they don't teach you in your temple.
7:51
The gods envy us.
7:52
They envy us because we're mortal, because any moment might be our last.
7:55
Everything is more beautiful because you're doomed.
7:57
Yeah.
7:58
You will never be lovelier than you are now.
8:00
We will never be here again.
8:02
And that's from Achilles and Troy, 2004 film.
8:06
And I think when he sums that up in this time wealth, what is the banger that you really need to know?
8:11
You really don't have much time.
8:13
He does this dotted chart on page 67 that's kind of interesting that shows you a dot for each week of your life.
8:19
And then you look at that and you're like, oh.
8:21
Dude, I don't have that much time left.
8:23
But when they push into this later thing that I really like, he talks about having urgency.
8:27
So on page, this is a great one, 72.
8:30
He said, one old story puts it this way.
8:32
When a gazelle wakes up in the morning, it knows it must outrun the lion or be killed.
8:37
When a lion wakes up in the morning, it knows it must outrun the gazelle or starve.
8:42
And I love this example of you have limited time.
8:45
You have to think about this logically.
8:48
And he goes through to really blow your brain on the next page on 74 to talk about, guess this, Pablo, what percentage of knowledge workers check their phone within the first 30 minutes of waking up?
8:59
And then what percentage do it in the first five minutes of waking up?
9:03
First 30 minutes of waking up and first five minutes of waking up, what percentage of people check their email?
9:06
Email or phone?
9:07
Email.
9:08
Email, I don't know.
9:09
Email, even worse.
9:11
They're literally going on the phone, going to the email to check.
9:14
I have no idea.
9:16
82% of knowledge workers check their email within the first 30 minutes of waking up.
9:19
And 39% check within the first five minutes.
9:23
Nice.
9:24
That blows my mind.
9:25
I mean, when I heard that, man, and so he goes on to explain why this is terrible.
9:29
He says, Harvard Business School notes that
9:33
There's steep costs for the time poverty of the individual.
9:36
There's a strong correlation between time poverty and misery.
9:40
People who are time poor are less happy, less productive, and more stressed out.
9:44
They exercise less, eat fattier food, and have a higher incidence of cardiovascular disease.
9:49
These people are not necessarily time poor.
9:52
They're just very poor time allocators, you would say, right?
9:56
Yeah.
9:58
I think that all of us, we are very poor time allocators, or most of us.
10:03
You nailed it.
10:03
And he references this other in the book.
10:05
Seneca, on the book, on the shortness of life, says, it's not that we have a short life, we just don't use it wisely.
10:12
So I agree with that.
10:14
So time wealth, it literally is right here on page 79 on the shortness of life.
10:17
Seneca wrote, we are not given a short life, but we make it short.
10:21
We are not ill supplied, but we are wasteful of it.
10:25
So that really hits your key point.
10:27
So here's a key question for you, Pablo.
10:29
If you knew you were going to die tomorrow, how much would you pay to not die?
10:31
All my money.
10:33
All your money.
10:33
Okay.
10:34
So whether somebody has a hundred grand, a million or a hundred million dollars, you paid all your money, right?
10:40
So you think about that is wealth that you have, right?
10:44
If you flip it, a freedom flip, you've just realized that next day is worth that much to you or me.
10:51
And the book confirmed what you just said.
10:53
Here's another way.
10:54
Are you a time billionaire?
10:55
Do you know if you are?
10:56
I'm pretty sure that I am.
10:57
So what age are you right now?
10:59
42.
11:00
What is a billion seconds equal to?
11:03
No idea.
11:03
30 years.
11:04
So this book, he basically says, we're so obsessed with money, but we aren't obsessed with the time billionaires.
11:11
And you, a billionaire, Warren Buffett, who's still alive today, would he trade you for being in 40s versus being in his 90s?
11:21
He'd give every dollar he has.
11:23
And I think that point to realize that regardless of your financial wealth, if you have 30 years of expectancy life, which I think 80 is roughly the life expectancy, you're a time billionaire.
11:33
You have a billion seconds left on this earth.
11:36
Well, and here's the interesting part.
11:37
We have experienced firsthand how many people have tens of millions of dollars and they are the
11:47
I wouldn't say the poorest, but very, very poor when it comes to time freedom.
11:51
And here is the part that I want to speak maybe a little bit more, because sometimes I get the feeling that people think that time freedom means I have nothing in my calendar.
12:00
And I don't think that that's correct.
12:01
No, I agree.
12:02
I think that the correct definition, and I don't know what the book says, so tell me if there's anything different.
12:08
The right definition is you have nothing that you don't want to have in your calendar.
12:13
I flipped ahead to page 314 because this hits so well on what you're talking about.
12:18
In 1869, Mark Twain penned an open letter to Cornelius Vanderbilt, a business tycoon who at the time was the richest man in the world.
12:25
He wrote of the poverty of more saying, Poor Vanderbilt, how I pity you.
12:30
You are an old man and ought to have some rest, and yet you have to struggle and deny yourself and rob yourself of restful sleep and peace of mind because you need money so badly.
12:40
I always feel for a man who is so poverty-ridden as you.
12:44
It isn't what a man has that constitutes wealth.
12:47
No.
12:47
It is to be satisfied with what one has.
12:50
That is wealth.
12:52
Well, here is touching about the point of, okay, the guy has a lot of money and he just keep wanting more money.
12:58
Exactly.
12:59
I was following up your point of that.
13:01
You're talking about people with tens of millions of dollars that are stuck in that.
13:05
That's another example.
13:06
On page 314, he also mentioned, once a business reporter asked how much money was enough to business tycoon John D. Rockefeller, who was the wealthiest man in the world at the time, he said, quote, just a little bit more.
13:18
Great.
13:19
Yeah, I like those.
13:20
So those are, I mean, I think we've hit the time wealth hard.
13:24
And I think that's- Sorry, one more thing.
13:25
I believe that it's very hard or maybe impossible to judge from the outside.
13:29
Is Rockefeller doing it for the money or is XYZ person doing it for the money, for the mission or because that is deeply aligned with who they are and what they want to be doing?
13:43
It's hard to judge.
13:45
But I guess that the people that we know firsthand that have tens of millions of dollars, we can see how they talk and we can see how they complain about their calendar.
13:53
Yep.
13:54
So the last banger is on time wealth.
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He talks about the hierarchy of delegation.
13:59
And this is page 111.
14:01
Really good page for young entrepreneurs.
14:04
So he has this chart and it starts at the bottom as direct delegation.
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So direct delegation is when you give exact information monitored closely with scheduled feedback.
14:13
The next level of delegation is called semi-autonomous, where you give upfront, manage independently modest oversight.
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And the highest level is autonomous delegation.
14:24
where the person knows the required task operates independently with minimal oversight.
14:30
I think that's really crucial for people to think about in anything in their lives of what level of that delegation are you able to do?
14:37
If it's AI, can you trust it?
14:38
Is it going to do it right?
14:39
If it's an assistant or an employee, can you do that?
14:42
That's really important.
14:43
This one on the next page on 112 is really powerful.
14:47
So it's called the right now test.
14:49
So Pablo, what are you doing tomorrow that you have?
14:52
Do you have any commitments in a couple months that you're not sure if you want to do?
14:56
That you've agreed to?
14:57
Okay, so you get invited to a fundraiser, a buddy's birthday, whatever it is.
15:00
And you're like, ah, the problem we do with time is...
15:03
Most likely I would not put in the calendar if I am like, ah.
15:07
So here's the trick.
15:08
And you are better than most at this.
15:10
I think you're world class on this already.
15:11
But for mere mortals like me, this really works well and I use it today.
15:16
we discount the value of that time in three months or a month or a week.
15:20
So you discount it to today.
15:22
So instead of imagining the invite is in a month or six months, you say, would I do it tonight?
15:27
Hey, Peter, will you come to this event in three months?
15:30
It's a fundraiser or it's this, my guy wants mentorship or blah, blah, blah, blah.
15:34
I like that.
15:35
Instead of thinking about three months, you delete, you cut, or you flip it, and you flip it from three months back to tonight.
15:41
I love that.
15:42
And if my answer is no, it's always a no.
15:46
If my answer is, yeah, I do it tonight, like, let's go, then it's a yes.
15:51
Because what it does is it helps us not be time poor because we're actually giving too little time value in the future, but we really appropriately value our time today and tomorrow.
16:01
I love it.
16:01
Maybe tonight would be...
16:04
challenging, but maybe let's say tomorrow.
16:06
I think that tomorrow, at least for me, would fit better because tonight I don't want to go and do XYZ at night.
16:12
I want to be sleeping.
16:13
Tomorrow, tomorrow, I think that that is a very good one.
16:17
In fact, I would even push it a little bit harder to say like, can I stay?
16:21
Can I say I would love to do this tomorrow?
16:25
Exactly.
16:26
And if I don't, then why am I even bothering?
16:29
He calls it, he says, would I do this right now?
16:32
I think whether it's right now, meaning today or tomorrow.
16:35
I think that the problem with right now or tonight is that people can, people that are very smart listening to this pod, they're like, well, tomorrow, today I can't because this and tomorrow, tonight, blah, blah, blah.
16:47
Okay, tomorrow.
16:49
Yeah.
16:49
What about tomorrow?
16:51
Yeah, it's a good tweak.
16:52
So...
16:55
You already said this, the Atomic Habits.
16:57
James Clear said everything you create is downstream of something you consume.
17:01
The reason we're doing these books is because most of my thoughts are downstream of what I'm reading.
17:05
So I think this is a good just reminder of who you spend time with, what you spend time reading, consuming.
17:10
If you're on social media becomes what you think and what you create.
17:14
And so the final time tip was he calls leverage Parkinson's law.
17:18
Do you remember what Parkinson's law is, Pablo?
17:20
Yeah, when your hands shake.
17:22
That's Parkinson's disease.
17:24
And this is actually how I remember it.
17:27
So Parkinson's law is like, hey, I want it to be this much time.
17:30
Well, you're handshaking, so you're actually creating this big circle.
17:33
Because whatever amount of time you assign the task, it will expand into.
17:38
So if you tell me to get a response now, I'll respond now.
17:41
If you tell me three days, I'll wait three days.
17:43
So he uses this in his hack for his time where he said, create discrete blocks of time each day where you'll handle major activities.
17:51
Have one for email processing.
17:53
And he usually recommends do that in the afternoon.
17:55
Have one for phone calls.
17:57
And then your important stuff do in the morning.
18:00
And block out that time without any distractions.
18:03
Okay, that's all the bangers for time wealth.
18:06
That's probably his strongest.
18:07
I think it's his strongest section of time wealth or type of wealth.
18:12
The next one's social.
18:14
So social is kind of an interesting challenge to think about your relationships with your significant other, your kids, or whoever that is in your life.
18:22
So some of the examples that he had were, he calls this on page 146, stop living the deferred happiness plan.
18:30
Okay.
18:31
And I think this is something you do well with.
18:33
The way I remember this is DHL is a delivery company.
18:36
So DHL versus DHP, Deferred Happiness Plan, right?
18:41
Deliver DHL, your DHP, your Deferred Happiness Plan.
18:44
Most of us are like, oh, when I make this much money, I'll do it.
18:47
When I retire, I'll do it.
18:49
His big point is we don't have any guarantees and we have to recognize when we're doing that.
18:54
We have to recognize that.
18:56
you know, waiting for this imaginary time isn't actually a solution.
19:00
It's just us usually scared or uncomfortable about committing to that now.
19:05
That's something I think you do a great job at is not deferring that.
19:09
Is that how do you think about that process?
19:11
Well, I'm trying to understand what is his point.
19:13
So his point is, hey, focus on investing more time in your community with the people that you love.
19:23
Is that the point?
19:24
Yeah, one example, he says, the magic years should be a call to arms.
19:29
Wrestle with this tension.
19:31
Be there and appreciate that brutally short window of time you have with your kids.
19:36
Stop living the deferred happiness plan.
19:38
So, for example, he's all about prioritize the time appropriately.
19:42
Right.
19:42
If you realize these kids are only young now, maybe play a little less golf until they stop wanting to hang out with you after they're two years old.
19:48
Wait, wait.
19:49
He's saying that it's a bad idea to give the iPad to the kids for eight hours a day.
19:54
What?
19:56
He didn't state that specifically, but I do think there's power there.
20:01
Okay.
20:02
Interesting.
20:04
Here's a good quote on page 148 about social.
20:08
Apple founder and CEO Steve Jobs put it well, almost everything, all external expectations, all pride, all fear of embarrassment or failure, these things just all fade away in the face of death, leaving only what is truly important.
20:20
Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose.
20:27
You are already naked.
20:29
So I guess that that is also social, right?
20:32
Yes, this is all.
20:32
The next three, four will be in social.
20:35
So I guess that that's more directed to introverts or people that just think too much before doing something with others.
20:42
And therefore, like, you know what, just do it now.
20:45
Yeah, because a lot of people might be prioritizing the financial thing where they're like, I can't do a trip with my kids.
20:50
Like, I need to get the bonus this quarter, you know, where it's like, hey, you may not have your kids and your kids may not want to hang out with you.
20:58
So prioritizing this well is how you reallocate appropriately and understand where the priority should be in your life.
21:06
I love it.
21:07
Is there any other banger with, yeah, hit me with a banger in social.
21:10
Yeah.
21:11
Naval Ravikant once said, a fit body, a calm mind, and a house full of love.
21:16
These are things, these things cannot be bought.
21:18
They must be earned.
21:20
Now, this is a banger completely.
21:22
There's two types of status.
21:24
One is bought status.
21:25
One is earned status.
21:27
What is bought status?
21:28
Pablo's question.
21:30
Bought status is a Ferrari, a club membership, expensive handbag, jewelry, a private plane, a boat trip for Instagram pictures.
21:38
Yeah.
21:39
These are all bot status.
21:40
They have labels, right?
21:42
Earned status, however, is the real respect, admiration, and trust received through hard-won treasures.
21:48
For example, the freedom to choose how to spend your time, the healthy, loving family relationships, the purpose-imbued work and mastery, the sought-after wisdom accumulated, the adaptable mind capable of navigating stressful encounters, the strong, fit physique, the professional promotion or sale of a company.
22:05
You like that one.
22:06
Pretty good.
22:07
So the way to remember bought versus earned is I want to just be, B-E. Bot, right, is less than earned.
22:15
So I want to be present in my earned status, not focus on my bot status.
22:20
So that's all.
22:22
The final one in the social situation.
22:24
This one's pretty good.
22:25
So this is he gives on page 161 tips of what he wished he knew.
22:30
Happy people love people, use things, and worship the divine.
22:34
Unhappy people use people, love things, and worship themselves.
22:39
I thought that's a good line of just what you're doing in life, how you're prioritizing, you know, what you're doing on those kind of activities.
22:48
Let's go now to the next, mental wealth.
22:52
Mental wealth.
22:53
Amazon founder Jeff Bezos quoted a passage from Richard Dawkins' book, The Blind Watchmaker.
22:58
Staving off death is a thing that you have to work at, left to itself, and that is what it is when it dies.
23:05
The body tends to revert to a state of equilibrium with its environment.
23:08
If living things didn't work actively to prevent it, they would eventually merge into their surroundings and cease to exist.
23:14
That is what happens when they die.
23:16
Jeff Bezos wrote, in what ways does the world pull at you in an attempt to make you normal?
23:21
How much does it take to maintain your distinctiveness?
23:24
What I'm really asking you to do is to embrace and be realistic about how much energy it takes to maintain that distinctiveness.
23:30
The world wants you to be typical.
23:32
In a thousand ways, it pulls at you.
23:35
Don't let it happen.
23:36
You have to pay the price for your distinctiveness, and it's worth it.
23:40
I love that.
23:40
I love that.
23:41
I really believe that we come here with a purpose and being true to that is what really matters.
23:47
And I think that when we die, after we die, we are going to regret not leaving our true self and trying to conform with the norm or with whoever is telling us to do whatever, to follow whatever path.
24:00
You nailed it.
24:01
This is on page 214.
24:03
He says, distinctiveness is about choosing to live out your story, not someone else's.
24:09
And then on 215, he says, the fight against normalcy is the most important fight of your life.
24:14
I 100% agree.
24:16
So this is mental wealth, right?
24:18
Yes.
24:19
So can you tie it back?
24:20
Like, what does he mean with all this?
24:23
Yeah, on a high level, he's just talking about kind of your overall stress, your brain as an asset, right?
24:30
Protect the asset, your brain.
24:32
So he's talking about how you think, chasing your potential, kind of that broad, broad level.
24:39
Another example he has on page 223, it's the Mahatma Gandhi famously said, live as if you were to die tomorrow, learn as if you were to live forever.
24:48
So, and he mentions on 222, Carol Dweck is this great author from Stanford.
24:54
She had the fixed mindset and the growth mindset.
24:56
So the fixed mindset assumes ability, intelligence, character are static.
25:01
They stay the same.
25:02
Growth mindset assumes ability, intelligence, and character are dynamic.
25:05
Yeah.
25:06
So it's really all about where your mind is.
25:08
I actually don't have that many on it.
25:11
Another banger that I liked was talking about Viktor Frankl.
25:15
He had a really famous book about Nazi concentration camp, and he talked about this state where he goes, space exists between the stimulus and your response.
25:25
So why would it recommend meditating, for example?
25:28
It's how do you make that space bigger between someone doing something annoying that my natural response is I want to punch Pablo in the face?
25:33
Yeah.
25:34
But I create enough space to say, I don't care.
25:37
So it's really all just a guide to how you think clearly.
25:40
It's a really short, it's a shorter chapter, and there's not quite as much that I think is really powerful in it.
25:47
That's wonderful.
25:48
So what would be the next physical wealth?
25:50
Yeah, so the last two are just the Ebonhaus curve, which is, guess how fast you forget something when you learn it?
25:58
Guess how fast you forget the information.
26:00
This is mind boggling.
26:01
Don't ask me.
26:02
So in 20 minutes, you've forgotten 50% of it.
26:06
And one day you've forgotten 75% of everything you learned.
26:10
So most of what you're learning on this call, you're forgetting 75% of it tomorrow.
26:14
So what's the point?
26:16
Yeah, the point is you actually have to review the material later.
26:19
Just like I'm doing, I'm reviewing this book with you.
26:22
That then creates a longer and longer time to hold on to the information.
26:27
And the final one that I think is a banger is he pushes Socratic method as the best way to learn, which is Socrates, brilliant person.
26:35
And basically, Socratic questioning on page 245 is the process of asking and answering questions that simulate critical thinking to expose and vet underlying assumptions and logic.
26:46
So to put this in action, just always be open-minded.
26:49
Start with open-ended question, propose ideas, and keep questioning them as you filter down.
26:53
So those are all the mental.
26:55
I love that.
26:55
Do you see, what is the relationship that you see between the Socratic method and the first principles approach?
27:02
Oh, it's the same thing.
27:03
Because I think one of the most important parts of first principles is just the idea that you're asking why five times.
27:09
What do you think?
27:10
I think that it's the same.
27:11
Yeah, I think it's an example of first principles, which is also the first principle is a freedom flip.
27:16
I don't know anything.
27:17
Like Socrates famously, one of his famous quotes, not in the book, was, I know that I know nothing.
27:23
And that's supposed to be the wisest man who ever lived.
27:25
Yeah.
27:26
And he created the Socratic method.
27:27
And his famous quote was, I know that I know nothing.
27:30
So when I realize I, Peter, know nothing, then I'm out seeking knowledge from everyone I meet.
27:35
Rather than starting with, I want to tell you how smart I am, Sonny.
27:39
Let's sit down and talk through this.
27:41
Okay, physical wealth.
27:43
This is a cool example.
27:45
So on page 270, in Sparta, perhaps the most extreme example was found in Sparta, a Greek city named for its military might that reached peak of its power between 5th and 6th century BC.
27:58
Spartan males were inspected at birth, and those judged weak were left on a nearby mountain to die.
28:03
Okay.
28:04
At age seven, boys were taken to their mothers and sent to begin their training at a military camp.
28:11
For years, they were hardened for life and prepared for war.
28:14
Plutarch commented, they were the only men in the world with whom war brought a respite in the training of war.
28:21
So they trained so hard that they all wanted to relax and have a break and go to war.
28:27
That is very good.
28:28
Okay, so on physical wealth, don't have a lot of depth, but on 305, this is a game changer I learned in a book called Breathe.
28:37
It's called A Psychological Sigh.
28:40
Have you heard about this two breaths in psychological sigh before?
28:44
No.
28:45
So you do one really big breath in.
28:47
It was researched at UCLA by Jack Feldman, a Stanford biochemist.
28:52
You do one really big breath in, you go, and then a tiny one at the top.
28:59
And doing that is the best way to reduce stress in someone's body and mind.
29:05
Instantaneously.
29:06
Yeah.
29:07
Biochemically.
29:08
Let's go with everyone.
29:09
Come on, everyone together.
29:10
Everybody together.
29:12
One big breath in.
29:15
Through the nose.
29:15
Little one.
29:17
Big breath out the mouth.
29:22
And you do a couple of them.
29:24
Is there any holding in the middle?
29:25
No.
29:26
Yeah, let's look exactly.
29:27
It says, psychological side, previously mentioned as a way to moderate stress in your system, effective for public speaking, is remarkably effective approach for calming.
29:35
It says, we do it naturally when levels of carbon dioxide in the bloodstream get too high.
29:41
It creates a relaxing sensation by releasing a lot of carbon dioxide very fast.
29:47
How it works.
29:48
Inhale through your nose twice, first slowly, then quickly.
29:52
Long exhale through the mouth to a natural stop without forcing the breath.
29:57
Repeat two or three times.
29:59
Two other types of breath.
30:00
One is the lion's breath where you do the big, ah, and you're breathing out like a lion.
30:05
You know that from the yoga world.
30:06
And then there's also a four, seven, eight.
30:09
where you do four count in, it's like seven hold and eight out.
30:13
We won't go through those right now.
30:15
So that physical wealth, even for me, is obviously not enough, right?
30:20
Enough didn't pop out on that book.
30:22
He's not talking about working out, lifting weights, sleep.
30:26
He does.
30:27
He goes through a lot of that.
30:28
Standard sleep, eight hours of sleep.
30:30
That's the foundation of health.
30:32
All the general stuff.
30:33
He actually didn't write that many pages on it anyway.
30:36
Yeah.
30:37
Like it's relatively quick.
30:38
But yeah, he puts sleeping eight plus hours a night, the environment of sleep as dark, quiet, cool.
30:44
It's more of the standard stuff, I'd say.
30:47
So I don't think it's worth, it's not worth going into.
30:50
Okay, perfect.
30:52
But he, just to be clear, he promotes, okay, having a very healthy, strong body.
30:59
Totally.
31:00
He pushes healthy, strong vitamins.
31:01
And he has a line that's pretty good about basically just don't eat anything out of a package, right?
31:06
So he pushes that as well.
31:08
It's all the kind of standard stuff you'd have.
31:10
I saw that he was promoting like Coke Zero or something like that, but no, thank God.
31:15
Good.
31:15
He's not a Coke Zero guy.
31:17
So I got just a couple to wrap up in the financial types of wealth.
31:22
So this is the last pillar, financial wealth, which is interesting, right?
31:27
Because...
31:28
I love it.
31:29
It's a flip.
31:29
He's ending, exactly, with the thing that for our society is maybe the most important pillar or the thing that we believe that is the thing that holds the whole house.
31:39
You nailed it.
31:40
I think it's powerful.
31:42
And I actually think it's banged in our heads such an early age, and at least Western world, that it's great to put it as number five on the list because it's automatically going to go push up and go far higher and higher.
31:54
So he says financial wealth is built on three pillars.
31:57
Now, there's long-term investments, expense management, and income generation.
32:03
I remember this by the word lie, L-I-E.
32:06
long-term investments, income generation, and expense management.
32:09
So I misspelled it the first time, L-I-E. And those are the three levers you can pull to change your financial situation.
32:17
And I do like this line.
32:19
So that's on page 328.
32:20
He talks about those three, introduces it.
32:21
He says, the gap between your income and your expenses is the most important tool in your financial toolkit.
32:28
It's a tool that you get to create.
32:30
Okay.
32:30
So it's cool just around expectations, what you do there.
32:34
And he mentions on the next page, 329, manage your expectations.
32:37
The greatest risk on your journey to financial independence is expectation inflation, often referred to as lifestyle creep.
32:45
Never allow your expectation to grow faster than your income.
32:49
I love that.
32:49
I think that we have also a big, big, big disease starting from the government and ending with individuals, with most individuals where the expenses are just too high, too unnecessary.
33:01
Yeah, I think you nailed it.
33:03
And then on page 342, I like this.
33:06
It's kind of a summary of, he says, financial wealth hacks.
33:09
I know at 42, I wish I knew at 22.
33:12
So there's three I really like on 342.
33:15
It's number seven, buy the best and keep it as long as possible.
33:19
Sometimes buying cheap ends up being expensive.
33:22
Freedom flip.
33:23
Is he talking about buying like stocks or what?
33:26
No, he means more, I think, things in your life.
33:29
So he, for example, I enjoy buying high-end electronics because they last longer.
33:33
High-end clothes because they don't tear up or rip as easily.
33:36
And high-end cameras for reliability.
33:38
Some of these items can be passed on for generations.
33:41
Yeah.
33:41
So it's a freedom flip.
33:43
Buying cheap ends up being expensive.
33:46
Buying expensive ends up being cheap over lifetimes.
33:49
And that one, I don't think I learned that until well into my 30s.
33:52
And I would, you know, I'd be buying the same crappy one three times and then realize it was way less buying the one good one.
33:59
Number eight, he says, treat everything like a test.
34:02
When I signed up for a new cell phone plan, I picked the most expensive one and I set a calendar reminder to check it three months in.
34:09
I think you do a great job on this, Pablo.
34:10
Do you want to talk about how you test spending more on things and whether or not it's worth it?
34:16
Well, I think that I have to separate a couple of things.
34:19
I did not spend anything for decades.
34:23
Anything.
34:23
I'm talking about, can I hitchhike to save 20 euros?
34:27
I'm fucking hitchhiking.
34:29
Can I go and ask for some food so I can save five euros?
34:32
I'm asking for some food.
34:34
Yeah.
34:35
Same.
34:35
Can I sleep in the couch so I don't need to pay a hostel?
34:40
I'm sleeping in the couch.
34:41
Yeah, same.
34:42
So that allowed me for decades to keep my expenses way below my income, which allowed me to save.
34:52
And with that savings allowed me to eventually invest.
34:55
Dang.
34:56
I love that.
34:57
And I think that I would focus on that.
34:59
Yep.
35:00
I think you nailed it.
35:01
The last one on this kind of tips he would have given himself at 22 was number nine.
35:06
It's be frugal with yourself and generous with others.
35:09
I think that's beautiful.
35:11
I think that's a lesson I really love, especially those you care about.
35:14
So wrapping up on the financial, we've got on page 359, he has a really cool chart.
35:20
He called it the return on hassle spectrum.
35:23
So you have these different investments you can do.
35:25
T-bill is really low on hassle.
35:28
It's also really low on return.
35:30
U.S. bonds, low on both.
35:32
Then you get equities.
35:33
Then you get passive equities.
35:34
Then you get individual stock.
35:36
Then you get real estate rentals.
35:38
And then the highest return but highest hassle is starting your own business.
35:42
Yeah.
35:43
And I really like this.
35:44
I thought of what is the point that he's trying to make with this return on hustle?
35:49
Yeah, it's a great question.
35:51
So I think that chart is really we don't analyze our own time as valuable and the headaches that come along with it.
36:00
So, you know, think of how many times you've heard somebody say, I'm going to buy a rental property and rent it out.
36:04
And they don't realize the renters are going to break stuff.
36:06
People are going to steal stuff from the house.
36:08
It's a constant, you know, sludge of work.
36:10
And look, I have a rental property, so I know it.
36:13
So I disagree.
36:15
I think that he's wrong.
36:16
Say more.
36:16
So I think that the hassle is going to depend on the individual.
36:20
For example, for me, owning T-bills, that's a nightmare.
36:25
I hate loaning money to broken people.
36:29
I personally hate that.
36:30
That to me is very dangerous.
36:32
It's a hassle.
36:33
That's me.
36:34
But for another person, like for Warren, Warren Buffett, he loves T-bills.
36:39
It's not a hassle for him.
36:41
He loves that.
36:42
And I am pretty sure that we can find, well, he says the highest hassle is starting your business.
36:47
Man, thank God that I have my business.
36:50
The amount that I was able to grow as a human being because I have a business, thank God that I have the quote unquote hassle of having a business.
37:00
man, my level of personal development, spiritual development and growth, if I only owned T-bills, would be I am a plant.
37:08
Yeah, that's beautiful.
37:10
So it depends on each person.
37:13
I like the challenge.
37:13
This is why I always go back to know yourself and invest your time and your money accordingly.
37:18
If someone wants to remember this before they make an investment in a rental property, stocks, whatever it is, I remember it as HR for heart rate.
37:27
So H is hassle, R is rate for rate of return.
37:30
So the hassle is across the bottom.
37:33
The rate of return is up the side.
37:35
And you're thinking about from 0% to 12% return and from 1% to 10% on a hassle scale.
37:42
What is it for you?
37:43
And you can actually map those out.
37:46
Don't underestimate the hassle.
37:48
The final banger.
37:49
Before that, before that, I again, I don't like the word hassle because the hassle is implying that something is bad.
37:56
And I think I would call it much more alignment because we are not here looking for the easy thing and just being a plant.
38:04
Right.
38:05
We are looking here for growth.
38:07
That's why we came here to this world.
38:09
We get him to learn.
38:10
We get him to grow.
38:11
And there are things that are not aligned with who we are.
38:15
And even I would say it's going to change over the years, over the decades.
38:21
Right now, I might not be aligned with the T-bills.
38:23
Maybe in 30 years, I like loaning money to broken governments.
38:27
I don't know.
38:28
Maybe.
38:29
Maybe.
38:31
It's a beautiful government that needs to learn how to spend money, just like all of us.
38:35
Can't spend more, just like he said.
38:37
Long-term investments, income generation, and expense management.
38:41
They're failing at the expense management.
38:43
The final one on 361...
38:46
He had a cool point.
38:47
He said, My father shared an insight that I consider to be the single greatest investment advice I've ever received.
38:52
He told me to make a rule to never think twice about investing in yourself.
38:56
Books, courses, education, fitness, networking events, quality food, mental health, personal development, and sleep.
39:01
Think twice about material purchases instead.
39:05
Try the 30-day rule.
39:06
Wait 30 days to complete the order.
39:08
Oh, nice.
39:09
I like that.
39:10
And I agree totally that the best money, and everyone says the same thing.
39:14
You speak with any successful person, and they said, the best money that I spent is the money that I invested in myself, in developing myself.
39:23
A hundred percent.
39:24
Banger?
39:25
Super banger.
39:28
That's a wrap.
39:29
There's a freedom flip.
39:32
The book, if you want to check it out, is by Sahil Bloom, The Five Types of Wealth.