and what do you believe will happen if
we don't prepare for the changing world
order then what we have left our
generation with is debts
a broken down infrastructure
and fighting so
i mean the answer is for people that
don't know what the changing world order
is or why we should be prepared for it
is it really these main three things
we've talked about the first one is it
is that what it is or is it something
bigger that we should be worried about
or concerned about
these
produce
big things
like
finis you know financial crisis or
civil wars or external wars
so
we should be concerned about those
things
yeah so we talked about the financial
the second one
that's happening in a way that never
happened in my lifetime before
uh is the way we are with each other
uh in terms of internal uh conflict
that has created a polarization which is
a win at all cost mentality
is this nothing that you saw when you
were growing up
oh no no no it was not like this and i i
measure
in the book a lot of uh measurements
okay okay i could tell you
that um the amount but you'll see in
there the amount of political
um
polarity and the amount of
compromise
the amount of political polarity
is the greatest since 1900
the amount of
um
compromise is the lowest it's been
it's measured by how people will cross
voting across party lines
right uh there's
it's there are two monoliths
and they're at war with each other okay
and we have populism
which is you have to get on one side or
the other
okay
and so when the causes that people are
behind are more important to them than
the system the system is in jeopardy
so you see this reflected
right now in the politicalization
um and
and ideologies at a war you you know
yeah um
um and i'll give you lots of examples or
i'll give you a few
um
the risk of um
neither party accepting losing the
elections
is high it's significant
right right
how does that work if they don't accept
losing the elections okay
the move toward uh power
dynamics
uh let's say a good example
will be there's a couple of supreme
court rulings that are coming out
related to abortion and gun rights
it would not be surprising to me if
those supreme court rulings are not
uh followed by some states
um
or um the good another good example
would be um so so essentially saying
we're passing a law but then the state's
saying we're not going to abide by the
law right
and and and you're seeing it it's
hardball
it's hardball uh it's like um
you know governor desantis florida and
disney
you know um
ordinarily there is um
okay we do it by
fighting each other and what kind of
power testing each other's power
almost to hurt each other and and that
um and so uh the the idea of democracy
is um compromise
and
reaching costs that the law
and the rule is of a higher purpose than
anything else but when you get other
things that are more important to people
that they're willing to fight for
um then you get greater and greater and
it's self-reinforcing
because uh moderates
our poor people want to work across
party lines and so on and compromise
um are his through history through the
french revolution russian revolution
chinese revolution or these are civil
wars
in all of those cases
um
the moderates
um are either
they're hurt
or they they're disposed of
and you have to pick a side
really
well but you're seeing this now
you're seeing right now
that the political parties
are um
are are are united in one way or another
there's not much
and you you better pick a side and
because that's what it's like so
that um can have um
important consequences
in terms of conflict in other words it's
power
and that's happening uh not just
internally and it's certainly happening
internally
but it's happening externally too but
internally there's there's a dynamic
that is going on in which the
ideologies
rather than normal economics that we're
used to
normal normal politics and normal
economics rather than that
the ideologies are dominant so for
example um you think about that when
elon musk buys um
um the decisions he will make regarding
will probably have a greater effect on
our society
than the decisions the supreme court
makes
wow
that's crazy
right what's your thoughts what's your
thoughts on that him him buying twitter
and
and
doing what he did
that it's a reflection
that it's one of the symptoms
uh like uh desantis and disney like tax
present like the supreme court whatever
it's one of the symptoms
that the ideology
that i'm
fighting for the power
that i have that it's not normal
economics in the usual way you know
there used to be normal economics was
it's all just you know kind of almost
you're
you don't care about ideologies or
something you're just um
getting an roi
and that the system will be better off
if we allocate resources that way
um and so on now it's that the
system is better off
if we
ideologically choose the things we want
and put the resources in that and that
there's a you know a power game so it's
a different
game that people
should be aware of
mm-hmm
yeah i mean you said uh one of your
quotes is the nation's greatest war is
within itself over whether or not it can
make the hard decisions needed to
sustain sustain success
is there even a way we can unite behind
a common purpose in the united states in
your mind or is it the power dynamics
and human psychology is so strong that
people are going to be making these
decisions
and not want to unite over the next few
years and decades
i have a principle which is that if you
worry you don't have to worry and if you
don't worry you need to worry
because
if you worry about things like if you
worry because you get yourself into too
much debt and you've got that then
you'll do you won't do that
if
in our particular case
if you read about the consequences of
what has happened in history
about that
and you look at the likelihood and you
say okay we can have this kind of a
conflict or we could have that kind of a
conflict external conflict and boy
these conflicts are terrible
maybe that
sort of brings us more together because
we have the power together
if we don't fight each other in that way
and we can compromise and so on
we have uh the power to produce
incredible great results because we have
more resources than we ever did there's
more by any measure life expectancy is a
lot greater uh gdp is greater
technologies are greater and so on
um so uh in a sense our riches and our
intelligence is greater than ever before
the biggest risk is how we are with
ourselves and so there are just basic
things like do you earn more than you
spend
okay
do you if if everybody
strolled for that
are you being productive or earned more
than you spend
are you
uh good with other people okay
um so you look at so that it's and we're
not fighting
we can compete in a healthy way
but we're not doing each other harm we
can have win-win relationships
uh we have a great power but we're gonna
have to make a big adjustment because
we're spending a lot more than we're
earning
okay producing a lot of debt and money
it's devaluing
and we are at each other's throats
and i i think that we don't do a good
job of taking care of each other even by
comparison
and but especially by comparison with a
lot of other countries because we don't
create a bottom
a level that you don't let
certain people fault below i'll give you
an example yeah my wife and i uh
particularly my wife we live in
connecticut and she works to try to help
um
what are called disengage and
disconnected
high school students in other words
those in the poorest neighborhoods who
the education is failing and they'll
drop out of school
so in this state which is one of the
richest states in the country on average
per capita income 22
of the high school students are either
disengaged or disconnected disengaged
means 22 22
of the high school students
are uh either have an absentee rate
that's greater than 25 percent in
failing classes or have dropped out of
school
one in five more than one in five yeah
so what does that mean living in
neighborhoods
wealthy neighborhoods right well no no
the thing about it is i live in
greenwich connecticut and up the road is
bridgeport connecticut not far up the
road
and
that's a a poor neighborhood
okay
um because um there's not much income in
that neighborhood so
what in greenwich connecticut you spend
24 000 on average for a
student
in school public schools there they
spent 14 000
and there are
and their guns in their shootings and of
course if a kid grows up in that kind of
an environment
where one in five where are they going
to be
you know where is their income and their
their society is gangs
and their income is um selling drugs or
crime and that
and we've allowed that to happen we've
allowed at the bottom and it's
perpetuating so what's happening is
that that's growing
and it's encroaching you could see how
crime is changing okay um and you could
pick cities you it could be it could be
new york it could be connecticut it
could be chicago it could be san
francisco
and so on los angeles it's encroaching
and so people are going to smaller and
smaller enclaves which might be terrific
okay
you know like but it's it's that's
what's going on and it's costly
the in the state of connecticut it costs
um 600 million dollars a year for
incarcerations
because where where do those people go
okay it's crime and then you're trying
to do it
that kind of a thing
um has a terrible cost when i think
about
what my generation has left the other
generation
it's terrible um you know i uh i was
just in singapore and uh what they had
is they had savings a lot of savings
and all because they have a large
savings the income from that savings
covers 20
of their budget hmm wow so one
generation is giving the other
generation a savings
a good education and civility and this
happens in certain places what we have
left our generation with is debts
a broken down infrastructure
and fighting so
i mean the answer is um if we're all
good with each other and we're
productive and we earn more than we
spend
we won't have a problem but we got to
get there
how have you learned to
bring together this great team that
you've assembled
where people are going to disagree with
you it sounds like people would have
different thoughts and be able to free
to disagree with you on certain things
how do you know when the disagreement
becomes toxic
when you can look at it from a point of
view of like okay i need this
disagreeing thought but when does it
become toxic where you actually need to
let go of that person in your life or on
your team
well what's so interesting to me i think
is
that you immediately your question about
the disagreement is toxic
um that's the first thing that people go
to somehow they think disagreement is
toxic
and supposedly
it's because the part of our brain which
is the amygdala which is this fight or
flight takes disagreement as the
equivalent of a fight and so it anyway
gets triggered that way now instead
um imagine it's a curiosity
in other words i view it as a curiosity
i mean i could tell if somebody's
uh wanting to disagree with me or i'm
disagreeing with them because i want to
hurt them i mean that's a different
thing if you want to hurt them okay then
that's a different thing but i mean like
disagreement
should be a comfortable thing that
prompts curiosity
and so on and mutual respect like if
like how could i ever get along with you
if i couldn't disagree with you i like
how many times
you know i mean you're gonna disagree
like you might one thing another then
that's the beginning of trying to find
out what's correct in the past so a good
partner is going to disagree with you
and you have to get past it so the fact
that you're asking that question the way
it is which is a normal question that
everybody would ask
so reflects the fact that there's a
hesitancy for disagreement that gets a
bad thing and it's a fight and it's
nastiness rather than just a
disagreement
that needs to be figured out and how
have you personally learned how to
disassociate the
maybe personal attack against your ideas
or your position on an on a a stance or
whatever
between someone personally attacking you
and just oh this is a curious idea that
they have let me ask them more about it
how have you learned how to do that and
what advice would you have for others
first of all i learned by it because
it you know like it works i i mean uh
you know like i'm afraid of the opposite
and and how can i have
it helps my decision making it helps our
relationships
what are they going to do bottle it up
and i'm going to bottle it up
is that smart i mean
you know that that sounds stupid to me
you'll you don't even know what's true
you can't figure it out so everybody's
confused because nobody knows what each
other's really thinking and then also
like uh you know you won't get to the
right answer and i mean that just is too
stupid a path
for me for me to do it it's too risky
pass and it's so much rewarding so much
more rewarding to do the other right
have you always been like that or was it
until you went but
i think what helped me get that way was
the markets
okay
because i again what happens is you know
there's just being right or wrong
there's just a winning or a losing and
and okay so just imagine you're uh you
know it's like being a trained monkey
you you you know like it what works you
okay should we push a button should we
push the button okay okay yes okay it
makes sense
button is better than i'm going to push
the button push the button whatever it
is okay no i don't see it that way okay
let's figure it out
and so on so i and then the scorecard i
think probably had the benefit
of that kind of notion i got a scorecard
okay i don't know like i'm not sure okay
bring it on please stress test me oh
that's great we have we're good partners
so that to some extent i think uh played
a role in you know my types of
experiences maybe if everybody had a
score card on all their decisions
and then was being able to experience
essentially you try it one way you try
it the other way and you start to see
what's better and you get punished one
way you get rewarded the other way
naturally you want to go in the
direction you get rewarded right so you
stop thinking okay my way is the way you
start basing it based on data and
scorecards
isn't that so stupid my way is the way i
just want to make the right the best
decision possible i don't care where it
comes from yeah but did you at one point
in your life for a period of time
were you committed to your way and
thinking that you had the answers well i
i like i say i think before that uh
1982-ish incident i probably was a lot
more
okay yeah okay
you know i think it's right and what i
think is right and i'm a smart guy and
so on so i was like you know
that life is a good teacher just a good
you know like two by four in the head
you know and you got a couple of those
and
you know pain plus reflection equals
progress yeah
what is thoughtful disagreement in your
mind and how important is that in this
moment especially with
the this political unrest and economic
unrest and just everything how do people
have thoughtful disagreement as opposed
to kind of toxic disagreement well first
of all they you know they got to want it
but let's assume they want it you know
then there are three things you have to
do
basically first you have to put your
honest thoughts on the table and have
the other person put their honest
thoughts on the table
okay so now you know what you honestly
think both sides that's great
then you then there are protocols for
disagreeing well you know i wrote a
bunch in the um in the book yeah um yeah
and um like i could go through some of
those types of things there are certain
exercises that you can do you know
there's a i have a two-minute rule you
speak with two minutes without the other
you start to think are you blocking um
you have a mediator maybe in other words
somebody when you're disagreeing if you
can't disagree say we mutually agree
that this person will be our mediator
and and we'll or and or maybe to the
judge they'll decide maybe it's a group
that decides that but in other words you
have a protocol
for disagreeing and then
and then deciding
sometimes in that disagreement hopefully
you both learn a lot and you may reach
an agreement but you still may not have
an agreement but then you try to say
what's the best protocol for moving fast
that discipline you know uh like a
uh you have a judge and a jury and you
know they have a case and anyway what do
you have good protocols so so you have
to have three things you have to put
your
uh honest thoughts on the table
um you have to go through processes that
helps
uh to reach the right answer depending
on how serious the question is right if
it's
um and then number three you have to
have a way of getting past that decision
and moving on
um i have a basic view though whenever
there's any disagreement or anything
that's not going well
stop
okay pause don't just keep banging
at each other when it's escalating when
people are
yelling at you just pause
and and sort of go above it and say
what are
our
ground rules for disagree what how
should we be with each other
and you turn your attention rather than
to the argument at hand but say okay if
i think this and you think this how do
we do this
and then once you agree okay then you go
back into the argument and then you
follow those protocols because half of
the problem is that people just don't
even agree to
know how to disagree
but but if you do it that way with those
protocols and so on and you get past
your disagreement it's it's great yeah
i want to talk a little bit answer to
your part two of your question yeah
um
the greatest problem of mankind
i believe wow that's a big statement the
great problem of mankind
and it is an exceptional problem at this
moment in time
is people having opinions that they're
stuck on
that um they won't
you know like i have to have my opinion
and that's right
and so on because it prevents them
from
um
resolving it up from moving forward to
finding the best answer from
compromising and or doing you know so
like everybody's arguing over everything
and
and they and
you know they're they're it's almost
like they're killing each other and and
we're in a society
you know i have another principle which
is when the causes that you're behind
are more important to you and others
than the system
the system is in jeopardy
so do you are you just literally going
to go fight so here we are as we think
will we fight
or we have or will we have protocols
for having thoughtful disagreements and
getting past them
that's why i love your principles and
protocols
in your opinion how has this
last couple of years
been
in the history of
uh investing for you in the history of
the last 40 50 years
is this a really really bad time
in your lifetime or is this just another
bad time but not greater than previous
bad times
you mean in the world in the world yeah
um there are three things that are going
on now the three most important things
that are going on to great extremes
that have not existed since the 1930 to
45 period
okay and it's important to know those
three things and then
to understand them well okay uh the
first is um what is going on
with money and credit when you get to
something like a zero interest rate
and
um you need buying power the government
needs buying power but they can't they
can't tax it and they can't
so what we have is the production of a
lot of debt
that the central bank prints money and
buys that debt
to spend
and the last time that happened in the
last few years it happened starting in
2008 interest rates hit zero they
couldn't lower their interest rates
so they had to print a lot of debt and
the government went in and bought it
okay
and we're coming to the end of a debt
cycle
okay so this is a big thing like because
where does the money come from and who
will get what the government will now
determine that and then they'll print it
and it'll devalue money okay this is and
how money flows a big deal so that's
number one
the second one
are wealth and political gaps
that are causing great conflicts
throughout history
there's always been the main things that
everybody's always fought over is uh
money and
power particularly political power so
what we have is a situation when you
have a large wealth gap
and
you have an economic downturn
particularly if you put a large a lot of
debt
having at the same time
you you have a fight
i mean that's been true through history
um and
it it's reflected in the political gap
so the political gap is um
you know
it's classic political gap
left right
you know um
okay capitalist socialist
how do you distribute it how do you how
are you going to deal with that that
becomes the other and how you fight
so that's the second of the two you know
this wealth political gap that's causing
the conflict and it's coming at a time
where we don't have much money
because we're print we don't have a good
financial position we're printing and
then and putting it out so we're still
paying off debts still right yeah but
with made-up money i mean
meaning what what happened like covid
was
such a good example okay you have covid
and a
a lot of people and companies
had falls in their income
that were would be ruinous
okay if checks didn't go out we would
have had a revolution right and and so
that those checks and how do you save
everything and so on okay so
and it's not like the government had
real money
like they
it's if they didn't have any money they
already owe a lot so they just printed
more money to give they made more debt
and then the government and the federal
reserve printed it and that you know the
checks went out which diminishes the
value of money and so on and changes
things
yeah so then the third thing
is the
rise of a great power to challenge an
existing great power so the rise of
china to challenge the united states in
all history there are world orders what
that means are are um you know there are
the dominant power you know it's like in
nature almost you know the big bull
or something anyway there's the dominant
power
and then what happens is in
1945
um the united we entered the american
world order we the united states won the
war
and it um it ended and then in 1945 well
the the winners of the world carved up
the world
we had uh 80
of what was considered money at the time
gold 80 of the world's money essentially
we counted for half the world's economy
and the rules were set in the united
states basically that's why the united
nations is in new york the world bank
and the imf are in washington dc because
we began the american century
okay that's and then
uh we are now at a time we've never had
somebody another power challenge us in
the same way there was the soviet union
but they were always a fraction of the
size economically so couldn't compete on
that same basis they had nuclear weapons
but they didn't have the economic power
and so on but now we're dealing with
china coming on as a power i spend a lot
of time in china over the last 36 years
by the way and i admire how they're
doing a lot of things right i mean i
know it's controversial to say that but
um in terms of like
they're a power yeah whoa like
sincerely since i started going there uh
their average income has increased by 30
times
you know
so they're a comparable power and
they're also growing faster and so that
as it has an effect so those three
things
are
things that never happened in my
lifetime before but happened before in
history which led me to do the studies
of of what happened in history and the
lessons i could gain
what is that those three things uh money
and credit wealth and political gaps and
the rise of china
what is someone like myself or some 30
40 45 year old 20 year old what should
they you do with that information what
should they be aware of how should they
apply it does it apply to
people
uh in america general america or is it
only applied to the wealthy
what should we be thinking about no i
it's a it affects
everybody you know it it affects
like we know let's start with ourselves
most importantly forget about the
outside thing
can we be healthy and strong
and what do we need to do like to know
that you you have to be in it together
like if we can row in the same direction
okay
if if we can have thoughtful
disagreement and get past that
if we can be in it together like the
wealthy and the poor
and
and and you know and if you figure it
out and and i know it sounds so
difficult
but at the same time if you
read history and you see what happens
when it's not when you have a civil war
like we could be on the brink of a civil
war
that sounds so crazy but the truth is in
most countries
in in in almost every century there was
a civil war or a revolution
some form a civil war revolution
um so it's almost inevitable that we're
going to have something okay you either
resolve it or you you start fighting so
badly that you damn you really do tell
yourself to each other until you resolve
it yeah
well the the once you cross a certain
line
there's no coming back
okay because
you do the damage you you you demonize
and
that person such an enemy or that
class of people is such an enemy
that you that the communication's gone
and the fight well you see this in
politics today
in other words is there a respect for
the system and a mutual respect of
trying to fight find resolve these types
of things or will they go to any lengths
to win
because a constitution or
law
will only carry you to so far
okay there has to be an element of
respect for it right if you think about
the presidential elections quite
something
that we as a country as a people
um when somebody might win the popular
vote somebody else wins the electoral
vote there's not even an argument like
in other countries you might say those
who had the popular vote would say what
the hell i've won the popular vote i
think it matters and somebody says
electoral vote and so on okay there's
not a question about that
okay now um when you start to say okay
is it this vote at that vote or this
thing or that and how far are you
willing to go to fight and does the
rules matter
when you start to get cross that line
and you do harm
you hurt and you alienate
then you go to accelerate this process
and people should know what that looks
like how terrible it is
so maybe if they know what it looks like
and how terrible it is and they can
empathize a little bit but i i see
people don't don't see it i'm living in
greenwich connecticut
um connecticut has the highest per
capita income in the country and it's
got the largest wealth gap
most of the people in connecticut
are pretty poor
really some cases very poor
oh i'll give you an example
this is the community my wife works to
help
high school students 22 of the high
school students in connecticut are
either
disengaged or disconnected what that
means is disengaged means there have an
absentee rate which is greater than 25
and they're failing classes they don't
show up to class
that's right
they show up you know three quarters of
the time and they're failing
or
that's disengaged disconnected is they
don't know where they are they've
dropped out of school 22 one in five so
school is not working for them and
they're in desperately poor areas like
okay we have the coronavirus
and so her efforts and our efforts are
philanthropic that's what got her
involved
they don't have computers they don't
have connectivity they they have they
have problems getting food they get food
in school
they need the food in school because
they don't have adequate food
okay and this is connecticut and it's
right up the road so we had to we we
bought these kids 60 000 kids computers
and then we're trying to get
connectivity and so on and you start to
see this
okay this is the same world now
um i so i live in one every neighborhood
with my community and then there's the
other
they don't understand each other
they're they're
um they haven't lived there they haven't
empathized and in fact there are
resentments on both sides
right like um
the people in my community they don't
feel
they're very rich by comparison to um
those other people but also to take care
of their families to educate them they
have their own challenges the work life
balance and so on they have their
financial insecurities and so on so
that's what they're focused on
and then they might think all these
other people they're not taking care of
themselves why don't they pull
themselves up by the bootstraps do you
know what it's like to be a kid growing
up in that neighborhood and trying to
what what are you talking about you
can't pull yourself up from i mean well
you know there's a problem there's not
enough food there are gangs they even
walking to school
neighborhoods that are gang shootings
and you can't and there are not enough
police to do it okay so these two worlds
ex and then the others uh say you know
well um
here we are and you're walking around
with your fancy cars and your you know
fancy clothes and and so on and we're
suffering i mean come on
and so they don't understand each other
and so on we have to get past this we
have to be in it together i think
otherwise we're going to kill each other
how do we what's the main thing that
both sides need whether that be in
greenwich connecticut or in the usa on
different sides is it empathy is it
compassion is it a awareness what is
that thing that both sides need in any
rich poor dichotomy well there's the
there's the intellectual
thing they need in the emotional thing
they need okay intellectually what they
need
is
maybe emotionally
the fear
and the understanding
that
where this will lead
will be devastating okay if they don't
deal with it if they don't deal with it
together
and you look at history
you need the fear
you can't give people
necessarily empathy or love you know we
could say oh they should care about the
other person
okay
that's too much to ask
i mean
yeah you know that's not realistic
okay but
realistic
is that you
if you don't if we all don't get it
together or going to have you know you
like all that stuff you got well you
ain't gonna have it anymore
and and all of a sudden the things that
are the most basic in terms of
uh take care of it and then if you start
to realize
um that it's productive like if you if
what what do you need to be successful
it's all i had when i grow up was um i
had
uh parents who loved me and took care of
me i went to a public school
okay and i came out to a world in which
there was equal opportunity
those are all the only things you need
and you know healthcare but when you're
young you don't need much of that
so um those are the only things you need
um now even in these communities
sometimes you can't get the parents
but you you can get people who care
about them they're teachers and so on
but you have to just try to strive for
equal opportunity do you think we have
an opportunity
no of course not let me look at any any
of the statistics i mean i i i can give
you examples i i studied um this issue
because
first we when populism started to come
around and um i thought that was
i needed a study uh donald trump is as a
populist
and so and then it's all around the
world and i and i needed to study then
the different quintiles the top 20
percent next 20 and so on and i saw what
the pictures of the lives of the
majority of people are like the bottom
60 percent um um and equal opportunity
um no let's put that in perspective the
those in the top 40 percent
um spend on on average on their kids
education five times as much money as
those in the bottom sixty percent
it's a self-perpetuating thing it's not
a bad thing those parents care about
having their kids well educated
so because they do and they take care of
their kids they're taking care of their
kids they're getting them well educated
and so on
but not being well educated
means you're not going to have equal
opportunities and so as that gets
narrower and narrower
you have that phenomenon that you
you know so there are a lot of ways you
can measure whether there's equal
opportunity if we if but i don't even
know we can agree that we should have
equal opportunity i mean like i i'd
almost take a poll
you know of the american people and see
could we agree that we should have equal
opportunity okay that would be an
accomplishment okay then if you could do
that then we say can i take measures
metrics by which key performance
indicators by which i could say
how are we doing on the equal
opportunity goal right and then and then
monitor that and you say oh it's getting
better or odds getting worse if we could
do that we'd accomplish a lot yeah we
got to get to that point first
this is fascinating what would you say
if you could make the decisions on three
things to change moving forward with the
debt crisis with the the internal wars
and conflicts from from people
uh and this bottom that needs to rise up
what would you do if you could kind of
snap your fingers
um
i i would say bipartisanship
if i was president of the united states
i would have a bipartisan cabinet to try
to bring
moderates from both sides because
moderates from both sides together i'd
have um
an economic program that was put
together by
like a
a manhattan project type of thing in
which they would
people from those both sides not the
extremes of both sides
but smart people from both sides
uh would make changes i have my own
changes that could uh happen but um in
which
um they would both increase the size of
the pie and divide it uh well and when i
say divide it i mean move much more
toward equal opportunity in which people
are productive
like for example of a return on
investment if you provide good education
if you do that well but and i can give
you many if you provide good
infrastructure i like it's really
uneconomic
to not have um and everybody uh can not
have connectivity anywhere
uh you know there's certain things you
could so you so i would want to have a
program that increases the size of the
pie and divides it well particularly to
productive
product productive people and those who
in some way or another
uh can't be productive because they're
handicapped in one way or another in
that productivity to provide them the
assistant so you have a civil society
but with still great opportunities to
make do great things and you know
acquire wealth and distribute wealth i
mean that's it you do need
it to be benefit most of the people okay
you need the system so that's what i
would do i would then what would happen
is i'd have that middle
each deal with its extremes
so i think on each party there's uh you
know there's an extreme there are
extremists
uh and now what's happening is the
moderates are dropping out of the
political system
so because the moderates are dropping
out of the political system we're
getting more and more extraordinary
extremists who
won't won't lose they you know they'll
fight to the death with each other
and um laws and that so that scares me
where if we were in it together and we
did that in a bipartisan smart way
um that you know not everybody's gonna
love
uh but everybody does something that
would be the most important thing i
would do
yeah
you're a wise man and uh the the third
part of this if you talked about the
changing world order is
how
really all empires rise and fall at some
point and in what you call a big cycle
can you explain more what this big cycle
is and what part of the big cycle the
usa is in and also china is in right now
okay
um
yeah i'll describe the cycle um
by an order i mean like a world order or
domestic order i mean
uh the system that's in place run by the
people who have the the power and then
they determine what the system is like
and so you change orders usually by wars
because you have a conflict
and then okay how do you resolve the
conflict they have a war so world war ii
uh um ended in 1945.
the united states won world war ii
dominantly it became rich the richest
country in the world having eighty
percent of the world's money money was
gold then it had
world's gold
and a a dominant uh military it had a
monopoly on that and accounted for half
the world's economy
and so it was it set the rules it's the
reason why the united nations is in new
york and the imf in the world bank of
washington dc it was the american world
order because it was dominant power now
when you have when you are in a dominant
power also these wars are sort of great
equalizers people come back from the war
um it's not like some are rich and some
are poor in the same way
there's a restructuring
and
you don't have the same wealth gaps and
resentments and so on and then you that
usually means that you have a period of
peace and prosperity peace because
nobody wants to fight the dominant power
and then they work together and they
produce peace and prosperity and that
happens and that's really um does best
in the capitalist system in which
capitalism capital is provided to those
who have good ideas because they say
we'll invest in you and you'll be
productive and so on but what capitalism
does at the same time is it has two uh
challenges two problems is it creates
wealth that um creates large wealth gaps
and it also creates higher levels of
indebtedness
so it creates the large wealth gaps
because it distributes that unequally
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and then that can be self-perpetuating
because those who get power
uh like if if you have more money you
can educate your children better than if
you don't the situation we're talking
about in connecticut um you know those
parents are not going to be able to
provide the education for the kids or
the benefits or that the others can't
and so you gradually you lose equal
opportunity
and that
and you produce wealth gap and you
produce resentments
and you also um
then create larger amounts of debt quite
often that means that that's a problem
down the road
now what happens when you become the
world's largest power this is also
always the case it happened with the
dodge it happened with the british
um that because you're so powerful on
production you go all around the world
and you are the largest trading country
in the world you get more exports than
other countries and more transactions
are in your currency
and so everybody uses your currency
which becomes the world's reserve
currency because everybody's using it
and because it's the world's currency
those who are
those want to save in it
and so different countries saving it
which means that they lend to you in it
and that increases your debt to
foreigners because they're when they
hold a bond or they hold cash in that
they're
uh lending it to you to get the dollars
back in the future
and so that is also one of the
ingredients of making a top they're the
wealth gaps there's that and then
there's also a change in generations in
generation psychology
you know it's like the the story of the
three generations you know from you know
whatever it is from uh you know reacts
to riches to rags again or something um
the greatest generation in a sense of
those who fought through the war
appreciate basic things you know that
kind of a thing
and then what happens is you become when
you're on top
you become
more expensive and quite often
more
decadent and what i mean by decadent i
mean that you might spend on things that
are are not good investments
and don't last very long or whatever you
know for entertainment at the sake of
buying so for example in the united
states i remember
uh when we had a per capita income which
was 40 times china's and we started
borrowing from china
so
anyway these are the ingredients and
then you start to see that they cause
problems the financial problem the
internal conflict problem and so on
and then um the the type of fighting
that we're talking about
where you know some moderates say well
we need to
make things reform things and make them
better
each of is in their extreme so you
classically have
the populace of the left and the
populace of the right who are
individuals who will just fight for that
side
and then you come down and you have that
conflict and you have that
internationally as well
so when you have let's say a country
like the united states if you take
united states percentage of world gdp
or the united states is um percentage of
world trade we used to be the largest
uh trading exporting country in the
world but china where we replace that
yeah so
and the gdp thing so now we have a
rivalry
and you have different approaches to
life
and then you say oh maybe you're going
to have a conflict and so everybody
prepares for a conflict which almost
makes itself fulfilling so when you have
this dynamic which we're seeing you know
the world starts to split
because countries want to
align themselves
with who's going to help them
financially or militarily
the ideology if you look at history is
not has been as much an important
determinant let's say the united states
and saudi arabia
have been allergized for a long time
having nothing to do with uh whether the
system's democratic or not it has to do
with whether their
interests are aligned
and those are economic and
and military and so we're seeing when i
go around from country to country and
they uh and people say okay the leaders
say should i be on china's side or
should i be in the united states aside
whichever
they say well if it's economic it on
china's more important to me if it's uh
military the question is will the united
states uh be there when we need them to
be operate that way and it's those kinds
of calculations that produces the cycle
that traditionally
if
um unless you rectify it like we all
come back together again somehow and
we're all good with each other
ends up causing the the fight to find
out who is more powerful
and then it's the war or whatever and
then there's a winner and a loser and a
new world order begins and that's what
the cycle looks like
so is there is there a world where we
will never have war
or is it always going to be some type of
war happening so that power dynamics
shift and
this just continues um
it's so interesting um
because
in the mid 1600s
this is interesting in the mid 1600s
um there were always there was 30 years
of war they called it the 30 years war
in europe
and they just
kept you know beating
the daylights out of each other
and um
and
that is when
they invented countries
as we know it before then there were no
boundaries
um it was winner takes all it was just
kind of this is a nice space it was just
well yeah it was like there were no
boundaries
and if you want what mattered was power
and if you wanted something that the
other guy had
you'd go get it and he'd do the same
with you and there was this constant
fighting about things and then in the
1600s they were fighting about religion
too
um you know there's the religious
reformation and the others which also
had to do with power because the church
was powerful but anyway so they invented
countries as we know it with boundaries
and you determine what goes on in your
borders and so on and of course we've um
um and that reduced for the next hundred
years there were hardly any wars
interesting and um and and but they uh
when the time comes
um
there's no universal legal system
you know there's no universal policeman
so if you don't have a universal legal
system they've been attempts of that
with the united nations or what before
that the league of nations
um
they they attempted that but power rules
and so
you're gonna have tests of power
it all come down to tests of power
right
you've come up with a template for
assessing the health of a country and
what leads them to success or or failure
what are the main metrics that you've
come up with to to assess and where's
the usa at right now in that assessment
um
i have um i want everything that i do to
not be opinionated
i want everything that i do
to
take measurements
of health
so um and there were different 18
different measurements of health that
you can see in the book so you could
look at it as a health indicator
and then you could see
with those like a health indicator
what does that create the next 10 years
prognosis for that because if you're
healthy
um
then you'll have a better prognosis if
you're not healthy
um and so there are 18 of them i won't
take you through them but anybody who
appears to go through through them you
can see them but there are basic things
like first what you're are you
financially healthy
do you um what's your income statement
and balance sheet look like do you spend
more than you earn or do you earn more
than you spend are you saving what's
your income statement and balance sheet
look like
a very big
leading indicator
is the relative level of education
and
those that have a more educated
population and you could see the numbers
rise you could see education levels in
one country or another rise or decline
in these charts so you could see how was
the united states in its education and
how are other countries and is that gap
is it improving or worsening
because education levels are very
indicative
of well-being and economic behavior
related to education
is
civility
civility is not
so you learn
education like facts and how to do
calculations and things that's one type
of education but you also learn how to
behave with each other the civility the
idea of respect and so on so you have a
civilized society of behaving well
that's part of it
and that usually happens in the home as
well as in the school system school
can't do everything
and there are and you could see these
numbers and they're a problem okay in
terms of these kinds of numbers uh
civility and and
we have we have challenges
um as there's uh
uh
some often single families that are
having financial problems
and don't have
you know those circumstances and um
and so
and then you have an opiate problem
um you have other things that stand the
one okay rule of law
countries that have rule of law and
respect for the law that keeps order and
effectively
loss of when crime rates go up its
problem
um a very good indicator
is corruption levels
there's a corruption index that
countries that all countries
have that you can get for every country
you could see always changes
and as it goes up
there's a negative 52 correlation with
the growth of a country
and its corruption over the next 10
years okay so where's where's the usa at
right now
um the usa is
reasonably good
you know it's interesting because these
are predictors of the few of the future
and what you find out is like if you
look at russia i'll give that as an
example
um
it's it's blessed with the greatest
natural resources of any country in the
world the value of its natural resources
are 40 higher than the next highest
country which is the united states
um and it uh does a pretty good job of
having an educated population
but it's cultural issues
um it's not heavily indebted
and and so on but it's cultural issues
in terms of these things like corruption
um also
there are measures of um
lots of measures of bureaucracy
versus efficiency
lots of measures of out attitude
can i
start a business and make my dreams
happen
you can see the differences between
countries on just that attitude
okay and also you could see it in the
bureaucracy how many how long does it
take to set up a business
there are statistics like that so you
see a bunch of them in the book
sure
i know when a big part of your mission
is to is bridging the educational gap
around economics for people and really
people understanding
about money
how to use money effectively and just
understanding in general
if you could
you know again i'm sharing kind of
hypothetical scenarios but if you could
uh
share some
change some things around about how we
learned growing up about money
two to three key things whether it be in
the school system or what you wish
parents knew that they would all teach
children from the ages of five to
fifteen what would be those three things
that you wish children just knew more
about around money well i
i think you said it
um
if there was education and experience
from the age of 5 to 15
that would change everything
we learn
differently
scientists have shown prior to puberty
we learn in an internal way
and you'll find that a number of people
um had their passion at around age 12.
because that has to do with how the
brain changes
um but if you take that 5 to 15
and you
incorporated it in the education system
and the practice
of saving spending and so on
uh we
you you know you don't need a phd in
this thing
um
it's a
the money thing is is kind of very basic
you know if
if i can buy it
for less than i sell it
that's a good thing
the more volume i could do the better it
is
then there are fixed costs and they're
variable costs so if i'm going to build
a a stand a lemonade stand okay what's
that going to cost me okay that's a
capital expenditure okay sure it's all
the same stuff
that you could learn
you know at those ages and and
and you don't and um
is there a good game i mean i feel like
you should your next thing should be a
game that kids can learn to play i don't
know if that's the new monopoly what
that is i have a son uh which is in uh
his passion is
edtech educational technology
and and he wants me to do that with him
and maybe yes i hope i hope one day
please please ray please
we need a gamer to make it simple you
know yeah
louis it ain't like i i aren't
i'm not busy you know
i got you i understand what will um so
where is to go back to uh
the us and china the big cycle where
is china at in the big cycle well
china's in this stage where
um
i've spent a lot of let me phrase it
this way i spent a lot of time in china
starting in 1984
not not to earn money because they
didn't have any money but because i was
very curious
and then i got to know and like the
people and i was able to help them
develop their stock markets and things
and and so on and that was and i like
meaningful work of meeting for
relationships that's my thing
um and so i watch since i came since
1984 when i first started
per capita income has increased by 26
times
um
the poverty rate by measured by hunger
went from 88 to less than one percent
and life expectancy increased an average
of 10 years
um wow so the poverty used to be at 80
percent sorry before you said it was 80
back in 84.
hunger was 88 percent hunger wow hunger
that type of poverty not insured
a square meal
um
and i watched how they do that um i
think that there's um
and so what has happened is
that they have become
a roughly comparable power of the united
states
in some ways a bit ahead in some ways a
bit behind um and so on um
and that's in most things
okay if you were if that list of 18 if i
was going to go down that list yes and i
would say okay
uh do they have better educated people
than we do
uh well it it depends on what it almost
goes it depends are we talking about
public education we're talking on
average do they have more whatever
if you talk about a
military um
is that it depends is it in that region
is it of that type or is it another type
or something but it's comparable
um if you talk about uh technology okay
um when i first went to uh china i would
give ten dollar calculators to people
and they thought they were miracle
devices wow now if you take it um in
artificial intelligence and and most
technologies uh there depends on the one
there may be a head and some and and not
so they what that means is that they've
come up
to be a
leading competitive power there's no
other competitive power like that now a
lot of countries now which is scary
are
roughly comparable in military meaning
if you have a war if we have a war with
russia
um it's not like the united states is
militarily dominant or so in there more
countries have become that way we have
we spend more and we have bases in 70
countries
but at the same time that means we're
overextended or extended and it doesn't
mean that you'd win a war
if there was a war in europe um
everybody would be a loser
um so and there are different types of
wars cyber wars as well as military wars
and the like okay
so um what we're now having is a
situation where
there is that
um
rivalry
that
could be good healthy competition
however
history is shown
when you deal with who's going to set
the rules of the game there might be
disagreements and if there are
disagreements how were they resolved
like the trade dispute
it's not like we took the both sides
took it to the world trade organization
and say we're going to plead our cases
and then you make a decision they didn't
even think about that right they go to
i'm going to do this if you do this and
that's
that's where we are sort of so the world
is breaking up
into these parts where there are two
sides kind of like um if you look at
world war ii by way of example you know
there are um
the allied powers and the axis powers
and then they're
in europe or at indonesia
and they're different alliances in
europe than there are in asia because
each has their own
interests
and it's developing that way so when you
take the ukraine and you look at the
ukraine and and that
that's more aligned with
the other side let's call it the access
powers which are the challengers
um to the united states and to some
extent the euro nato powers and you have
that conflict and you could see in a
number of statistics or actions how the
sides are lining up
like for example um when they you they
just ask are you going to apply the
sanctions or not are you going to do
this and that in the united nations did
you vote against russia or not and so on
and you could see all those things and
you could see how the sides line up for
example um india lined up with russia
um and so you could see how this is
lining up
and you could see that we're coming into
this
um
there's no conversations and
communications that's
even polite between the two countries
right now and those things and and
that's where we are and and if you look
at history
um that's a dangerous place to be i'm
curious about
the mindset of making money
and there's a massive wealth gap there
are people that who are making money and
some that seem to be making more and
more money and others that are
always seem to be stuck in the ability
to make money to save money to invest
money they always seem kind of trapped
in not making it
what would you say is the mindset
that wealthy people have around making
it
and growing their money
for them versus the mindset of people
that stay stuck in not making it
well i i want to distinguish there's big
differences in opportunities yes so
let's
say supposing you have two people of
comparable opportunities yes and then
they were going to do
that okay the marshmallow test yeah as
you
as you know apparently is you take a kid
and you say okay uh you can have one
marshmallow now
or you could have two marshmallows in 15
minutes if you don't eat the first one
yeah if you don't eat the first one
right yep okay once you start to realize
that deferred gratification
is going to make you better and so on
and you start to count count
and you say
like something like how many
days weeks months or years can i live
if i don't
have money come in and you start to
focus in on that
that's the first step
okay like the marshmallow test
okay so i want to save
you got to start there
then if you do that
you're necessarily going to go save in
what
and then you'll start to get exposure
to
how these things are different
okay then you start to care
once you have one of these and one of
those and you start to experience
and then you start to learn
and basically that's what makes the
difference
that's it the so first having the
ability to have delayed gratification
then obviously diving in researching
testing and and trying different things
but
the more and more you can say you don't
want something now for greater later is
the essential key well and what it does
then when it comes to the money that
means money
yeah now at that moment that you don't
want it you have savings that means i
want savings
right
okay now
you got savings
so the next thing inevitably that's
going to come at you is where do i put
it
and then you get your choices and then
you experience it and you learn right
yeah because there's lots of place to
put it for investments there's real
estate there's stocks there's building
your own company there's different
places to invest
what have you found are the top places
that people should be investing
well i think first you you start with
what are the most important things that
you're closest to like
is it your business
first
calculate how many
days weeks months or years
you can live on your saving
because when you do that
you'll start to you'll gain security
you'll gain
that okay
so look at how much you're spending okay
and then say how much do i need
and whatever that number is you're going
to need more than that
because it may go down rather than go up
so okay now do i have a year spending
okay you so
i think i think you you start there
then you start to think um what are the
things that are most important for me
like and then you start with your your
business
or
your residents that have a symbiotic
relationship and that you know well
let's say if you start with your
business
okay you're closer to that investing in
yourself
with whatever that may end up being that
may be your best investment
not not real estate not
stocks not the market
well it depends if you're if you're not
you know if you're doing something where
you can do it yourself and that's the
thing but if you're in a job and and
that that's not the thing right because
you because you're in a different
position
okay but anyway if you
and then i i really think there's
something good about your home a basic
thing about your home because
uh it's nice forced savings
and it also means that you you fix it up
you you know you're saving you find out
there's oh well if i add this thing or
that thing and you're enjoying it
so when you're enjoying it and you're
controlling it and it's yours and so on
uh that's that's pretty good and if you
know if they keep
mortgage tax deductions and so on you
know there might be some benefits to it
also okay but that's not a black and
white answer
you know so you could take a short
pencil and say is it better to rent or
buy okay that's a different question
maybe i said but by and large am i going
to move
you know all of those other questions
but so when you start with okay what is
it that's close to home
and how much you need a certain amount
that's liquid
in other words you got it in your house
you got to make a mortgage payment or
something and
all of a sudden you're uh you know you
know it's not liquid and you lose your
job well that can cause you trouble so
how much do i have that's liquid
how much do i have that's not liquid
okay and you start to get those things
right
okay ah i've got enough liquid
i got enough okay
not liquid and those other things okay
pretty soon
you're you're getting yourself in good
shape yeah you do those things
you know you're pretty much in good
shape
and then you're also having some
experiences and then you go beyond that
you know and then so you start to okay
what you know okay what's a stock what's
a bond
and then you know you learn from
experiences i i learned through my my
experiences i started when i was
uh a kid 12 i used to caddy and i took
my caddying money
and i put it in the stock market and i
was lucky
what happened to me by by the way is i
took my catting money and um i bought
the only company that i ever heard of
that was selling for less than five
dollars a share
and i thought that that you know well i
was really dumb i thought um i'll buy
more shares so if it goes up i'll make
more money uh and it was the only
company it was a company that was about
to go broke but somebody
some other company acquired it and it
tripled and i thought ah there's an easy
game
and i like it easy money so but you know
you experiment and you learn can we
start with
kind of this first principle that you've
been talking about and what we should be
aware of that's coming sure um
uh to put that in context uh before we
get into the cash part um yeah i'm
i'm a global macro investor and um
economics markets and politics and
geopolitics all matter
uh and there were three things that are
happening you pointed them out three
things that are happening in our
lifetimes that never happen in my
lifetime
or our lifetimes and that i learned
before i have to study
um past periods and those three things
as you point out are the creation a lot
of debt and money
um the second is the amount of internal
conflict that we're having
over
money and values and what that's like
and the third is the changing world
order with um
countries like china and russia
competing with the united states in a
way that didn't exist before so back to
the point that you're making about that
money it's a basic thing
um
there
everybody agrees we need more money and
we need more spending
uh but if you spend more than
you earn
uh you have to borrow
and that creates
debt
but that
at first it's credit so it gives you
buying power
right but it you have to pay it back and
that becomes depressing and so in order
to avoid that
central banks
can print money
and buy it back right but when they do
that
that depreciates the value of money so
what we had was a lot of money and
credit
go out to a lot of people a lot of
buying power
everybody when they got it they thought
oh that's great and somehow they seem
surprised that when they spend it the
prices of everything go up
okay but the truth is
that if you divide the amount of money
and credit that's used for spending
by the quantity of goods produced you
can calculate how the prices will change
and so that's what's going on and that's
what went on in a giant wave the federal
reserve and the government together a
giant wage and that produced a giant
amount of inflation a giant amount of
inflation is it eight and a half percent
right now is that what it is yeah well
it depends i mean if you it depends
which number you're using it's um
between seven and a half if you use euro
over a year or if you take um the core
inflation rate it's closer to 12
um and it's uh
and
and it's rising there's some temporary
influence but it's basically because of
the amount of spending you can measure
the amount of spending not because of
the bottlenecks and for people that
maybe are hearing this inflation and
have been hearing this recently before
we finish the first point
for a lot of people when i grew up i
never understood what inflation even
meant they didn't teach this to me in
school they weren't teaching this in
high school college there really wasn't
a thing that i learned i just heard it
and knew that people were worried about
the cost of things increasing can you
explain what that actually means to us
for someone who's making
70 000 a year in the midwest what does
that mean
well to them
um
buying power is what matters right and
so
what happens is
when
inflation
goes up
faster than your other sources of income
you lose buying power
okay uh but
what happens is somehow that seems
uh more acceptable sometimes to people
uh than if it was just taken out of your
pocket you see if they
let's say raise taxes
or take it out of somebody's pocket
everybody complains whoever's had the
pocket taken out of
um but
if you're uh if it comes through
printing of money and everybody gets
checks
it's more acceptable
but what happens is those who are
holding
money like money market funds
and bond funds
um lose the buying power of that so
think about those bond funds those bond
funds are like down about ten percent
and inflation is up over let's call it
eight percent so they lost 18 of the
buying power
so it releases it relieves debt
we think of it as meaning higher prices
but to some extent that's a rich man's
perspective
because they say oh now i have to pay
more
but the reality is you don't get more
stuff
from that higher inflation
and so it bids it out of the hands of
some people
and that that hurts the people who are
you know who don't get it because it's
really but you know so that's what's
going on you lose buying power and so
we're seeing a time now
where you're going to lose buying power
to inflation
and now you're going to see the federal
reserve
also tighten money
tighten money and credit and raise
interest rates
and when they do that that creates
less buying power because when they um
you know they say okay now you can't
spend as much money
and the prices are going high but they
do that in their crude way of trying to
reduce inflation but you get it from
both ends the higher prices and then the
higher interest rates you have to pay
and also
and higher debt service costs and also
less availability of money so it's a
squeeze like the squeeze that happened
in the 1970s
so does that mean i mean
if someone is hearing this and they're
thinking okay
inflation's going up the buying power is
going down it's a squeeze
is this going to happen for five years
ten years is it eventually going to
level out what should we be expecting do
you think these things go um in paradigm
shifts that quite often take
a you know relatively long time because
everybody's mindset is in a
in a paradigm shift everybody's mindset
is in a certain place and they're doing
certain things
for example
uh investors think that cash is safe and
they don't pay much attention to
inflation
and then what happens is they get
inflation
and they realize that if i'm holding
cash
i'm losing buying power so then they
shift they sell out their
cash or they sell out their bonds and
they put that into other things
and when they do that that also
contributes to inflation
changes like that also happen in a lot
of ways like um
cost of living increases in in
compensation
you know where in the past when they
don't worry about inflation
um then they don't think about um do i
have an inflation linked
uh contract for my work
or do i have enough inflation assets it
might be i oh do i need to buy i'm gonna
store my money in a house or i might
store my things
and so that pendulum swing
from one mindset and one positioning to
another mindset and another positioning
in the early stages tends to be
self-reinforcing those actions produce
more inflation and more inflation
psychology
until that goes to the opposite extreme
you know
like in the 1970s that people were
surprised about what happened because
they weren't used to inflation much
then you had the inflation and in the
beginning
it swung and then at the end of it they
said inflation will never end and
everybody's position for it never ending
and then of course what happens is it's
so bad that then the central bank goes
the opposite extreme and then they get
surprised and so the 80s was a period
which was the exact opposite of the 70s
where you have falling inflation high
real interest rates and so on and so the
worst assets to own
in the 70s were bonds and the best
assets to own in the 80s were bonds
so you see these pendulum swings that
way
so what would you say are the best
assets to own in this decade
well um the best assets
to not own
that's the most important thing i think
is is cash
and
quoted cash is trash
um there will be a tightening here for
the time being
and that tightening will have an effect
it'll it'll hurt asset prices and so on
um but uh cash is not the acetone
um and and bonds are not um good tone in
my opinion because it's debt it's owning
somebody's debt and you won't get a
return think of it the interest rate
will not
reach the inflation rate
so that's the problem so you'll have
that award
then what you have to have i think most
importantly is a well-diversified
portfolio of other assets
diversification is a very powerful tool
because it can reduce risks without
reducing expected returns now there's
lots of ways of getting what you think
good investments are they might be
things you know about and the local
businesses and so on or they might be
uh stocks and or they could be maybe a
little gold or maybe a little bit
foreign investing
diversification is very important to do
that in a balanced way so um i would
generally say that that would be what i
would recommend curious what's the
greatest gift
a rich person or someone with money can
give someone who doesn't have money to
give the knowledge uh teach a man how to
fish is better than to give him a fish i
mean i think you can give them both you
can give education and you can show but
uh ability the the capacity to be
productive because you know
if i can give you the capacity to go out
in the world it's like go into a jungle
i give you a knife and can you live in
the jungle
okay if i give you that capacity that's
the best thing i can give you that's why
i wrote the book and you know pass it on
i wrote those principles over years and
i wrote them down and that's what i want
to pass along that's the most important
thing yeah but but if you but if you've
got money you can help people uh a lot
in a lot of different ways
which is thrilling what would you say
then are the three greatest skills that
people that aren't financially abundant
or that are struggling financially
should learn to master in order to be in
a better position financially three
skills what would you say they should
learn well as i said before i remember
watching the movie i was young david
copperfield
with wc fields and he speaks to
david copperfield
and he says
he said something like and i'll put it
in dollar terms you're in a hundred
dollars and
you
spend 105 dollars
that's misery
if you earn a hundred dollars and you
spend 95 dollars you'll have a good life
i mean what wasn't exactly like that but
it was but but basically
i know so many people who don't earn
much
but are there because if you start to
think about what it is
that it costs you to live in terms of
let's say the basics
you know uh give me a bit to
sleep and give me the food let me be
educated and so on so forth
i think most people can get themselves
in a position
where
you know they're net positive
so if you can be net positive
and you could do that that you know
that's
number one
you know as i carry that so that's you
know that's number one then i guess it
was the list that we went to you know
the second is you know what do you do
next
in terms of what do you need what do you
invest in
you know and then and then you know
going beyond it and then there avoid the
following mistake the most common
mistake of investing
thinking that the investment that did
good is a good investment
people
rather more expensive
the things that quite often
those markets that did
really really well became more more
expensive and
everybody smart money is all the time
compete comparing them and competing
so what happens is um
the naive money
buys the thing that was hot
or is hot
the thing that has been terrible which
might be the thing that's beaten down
so i would say also an important element
okay so here's another one that's really
important
diversify
so don't put all your eggs in one basket
right because what i learned about this
is that first of all all
investments
uh compete and it's not easy to sell
tell whether one investment's better
than the other because if people could
do that life would be easy and everybody
make a ton of money
um so and this is a competitive game
that's very difficult to compete in so
it's very difficult to say which one's
better or worse you could take experts
and you could and do all sorts of tests
and you'll find out that they can pick
that and you can't tell whether the
worst ones are going to be better so
because of that
you understand that um
even picking the best ones is difficult
and particularly if you're naive
like we spend hundreds of millions of
dollars each year on research
to try to give us an edge okay now
you've got to compete with us
so uh competing in the markets is more
difficult than competing in the olympics
you wouldn't go think i'm going to
compete in the olympics but there are
more people who try harder
in order to do that so it's a zero-sum
game
so but diversification
um that they're different
uh will reduce your risk without uh
reducing your return yeah so if you know
how to diversify well
so
um that's critical so i would say again
uh get get your savings right and the
reasons i say i would say um
have great humility about what you what
you don't know
don't buy the thing that was hot
just because you think it's hot
um and then know how to diversify well
that those would be the most important
things i could convey
i love that you talk about the in the
sports analogy the olympics you're
speaking my language now as a former
football player some of the greatest
quarterbacks
seem to get not too high there's they
get excited but not too excited and not
too low
uh when things go good or bad
how important is that skill to be
emotionally
resilient on both levels high and low
for you how important is that skill
it is one of the most important things
possible
and it's not easy to do
um so i needed to uh
you know do two things um
i found that by writing down my
principles and the rules
and then testing how they would have
performed over time
and that's where the algorithms came
so that i can basically just like a
machine
play it click click click click click
okay with execute the game plan you know
don't do it oh because i know what the
experience is like the experience is
like you're wrestling around with it
you're losing money
the day you put on a trade
it doesn't go either straight up or
straight down and goes against you so
now i don't know you're losing money
okay how how much should you lose
what's your game plan you've got to know
your game plan and stick to the game
plan
and you can't be shaken out and yet
um the emotions are going to cause you
to doubt yourself and plus it brings you
stress
all of that so you have to execute a
game plan that's very well thought out
right
um then over time you start to develop
some better instincts like if you're
excited and you're going along be scared
you know if you're if you're doing
something you're really worried about
and and nobody else is doing it
maybe good don't be dissuaded
see the markets are very different than
consensus decision making it's counter
consensus because the consensus is built
into the price right so if everybody
loves something it's expensive
and if everybody hates something it's
cheap
so where most people say ah this is like
oh what a great company okay amazon is a
great company we got amazon's a great
company
who doesn't got that amazon's a great
company okay and then okay i'm gonna go
on amazon okay but if everybody's got
that it's it's a great company and it it
becomes increment less great than they
anticipated bam that baby goes down
so you have to um
start to develop some of those instincts
or a game plan and what what financial
advice would you give to millennials
who who don't have these these tools yet
besides obviously getting your book and
starting to practice some of these
things but i feel like millennials are
overspending more than ever they're
uneducated on finances and personal
finances what what advice would you have
there pay attention to the feedback you
get from
the realities you encounter yeah okay i
mean
you know pain plus reflection
you will get the pain
pay attention to it listen to it because
you're gonna get the pain is now the
time to start investing or is it more
just save up some reserves for six
months to have some cash to live your
life before you start investing or
is it important to build the discipline
in the habit of investing 50 bucks a
month 100 bucks a month in a diversified
portfolio no matter how much you're
making i i i remember going through this
because i
i didn't have any money
and i when when was this right oh um
this was um 1982-83
uh i didn't i had to borrow four
thousand dollars for my dad to help to
take care of my family bills
uh so um but i so i remember thinking
um how many weeks could i live
if i lost my income and i started
counting in weeks and i would try to go
out
because if i got hit i
so i think
i think that's the way to do it you know
you start to count
uh how many weeks
can it be a month can
a year can i get up to a year
i didn't like that because of the fact
that
there's an obligation and it's like oh
if i get then i'm going to be drowning
i'm trying to keep my head against water
this is just my own bias but anyway
count the how many
you can um
and then
assume
that it's buying power over the next
number of years can fall by
three or four percent a year
or or if or if you put it in a risky
investment it like stocks or something
it could probably buy more so cut that
number maybe in half
and have twice as much
because you have to understand that
that's your freedom
that is your safety so that first band
you must take care of that first band
take care of that
once you get past that and you feel okay
i could take care of my family and i
could take care of mine in a worst case
scenario then you have the freedom
to then take other kinds of risks but
when you're building that portfolio um
it's the same thing as when you have a
lot of portfolio past that just you want
to diversify well
because you could see what happens to
the to the markets every market
stock market bond market most markets
have had times where they've gone down
um over an extended period
60 or 70 percent
so in buying power so i think diversify
count that and build it and realize that
your
um
that's your saving i one thing i do
for my
um for my
kids and grandkids and always did uh as
long as i could start to afford it
uh was um for every uh holiday like
christmas or their birthday i would give
them a gold coin
and i said
i never want you to sell that gold coin
until
uh there's an emergency a real emergency
never because you want to buy things
and the reason i did that
and they'll build over a period of time
that'll that'll build something and i
said don't even sell it you pass it to
your kids
unless there's an emergency okay and so
you're building that savings
because i think we um so easily spend so
much money on junk
you know so anything that i would give
them
whatever it would be
i don't know a piece of clothing a p a a
a thingamajig a toy or something right
right we'll probably be gone in a year
yeah okay
and so the power
of staving
and you know and that resource the
relief it gives you and the power it
gives you is so great so yes save it
diversify it i'm gonna i'm gonna
continue to stay on this topic but also
go off a little bit because you
mentioned how i guess it was 40 years
ago you you lost your money and you had
to borrow 4 000 from your father to just
kind of survive and
pay your bills
how much money had you built
before then
before losing it
um
i don't remember it it wasn't like it
was a ton
you know i was early fairly early in my
career
i had a small
investment business um
i don't remember what it was exactly but
uh it was it wasn't a time
i'm curious how you
from having some money uh to losing it
how you then went on a
40-year four-decade run of
getting to where you're at now
was there something in your mindset that
allowed you to believe in yourself still
yeah okay that didn't say oh i've lost
it all out you know i i don't believe in
myself anymore because i just ruined my
finances that
extremely painful uh experience
was probably the best experience of my
life
really and um
it changed my way of thinking ways i'll
describe but let me let me say before
that i didn't have much money my um my
dad was a jazz musician
my mom was a stay-at-home mom
um and uh i i felt of course rich i had
two parents who loved me i went to
public school but and then when i was a
kid
i
i i did odd jobs and i caddied and so
when i put in the stock market when i
was 12 and i got hooked on the game so i
never had much money uh but then i built
up some and then had that experience and
and so that experience and which was
also a very public experience
um um
was very painful but it it it changed my
approach
um to decision making in really a
profound way um first
um
it gave me the humility and fear
of being
wrong
that
um balance my audacity
um to double check myself and in fact
try to find the smartest people i could
who disagreed with me to have them
stress test my thinking
so i'm never sure if i'm right like
my track record of being right is
probably
70 or 75 ish somewhere in that 70
percent let's say something like that
and i'm i'm used to being wrong
sometimes
and uh and and it's painful so
the stress testing of my opinions
um gave me an open-mindedness to learn a
lot
um and um
also
uh diversification i learned how to
diversify without reducing my risks if i
could take a lot of uncorrelated bets
the return will equal the average of
those bets but the risk can be up to 80
percent less and it changed my it really
caused me to reflect because i remember
thinking to myself it felt like
um
i was sitting
next to a jungle
and i could sit on the safe side there's
always risk in return
and um and what would i do
would i
have a less great upside
and be safe
or would i go through crossing this
jungle
and which things could
kill me or whatever
in an attempt to have a great
upside a great a great life a great
upside
and so that puzzle
um led me to do the things i'd described
but also
um i knew that i had to go have the
great upside
and not be constrained by the risk
and uh so i did the two things that i've
described but going into the puzzle i
found
that uh it was great that to find people
who could see things that i couldn't see
and vice versa so that we were on the
mission together
because people see things differently i
learned how people see things
differently somebody will spot this or
that and then that back and forth helps
you make better decisions and if you're
on the same mission with them so one of
the things i wanted was this meaningful
work of meaningful relationships
and i found that that was so good
that when i you know sort of got to the
other side like you know i had enough
money and upside or whatever
i still wanted to stay in the jungle and
i still wanted to do this
because the act of of of doing that with
people that i was doing this meaningful
work and meaningful relationships with
was rewarding in and of itself as well
as success so one of the things that you
can learn is that you can see through
other people's eyes that doesn't mean
you accept what they say blindly it's
that you think about their reasoning and
if you do that that's good it also gave
me a principle which is like one of my
fundamental principles which is
pain
plus reflection
equals progress
okay
we have this pain
whatever it is
and
okay
the reaction is a negative reaction and
could almost be
why did that thing happen to me and and
so on
uh if instead when one calms down from
the pain
there are is a lesson there
about how reality works
okay
it happened it reality works that way
and then um there's a
thought how do i deal with it better
right to produce better what's my lesson
and if you acquire that i used to
acquire i would acquire that i still
acquire that and then i wrote them down
as principles in my books that's why the
collection of principles it's like a
journal direct pain plus reflection
equals that and and then you write down
the principle like a and that's what the
collection of principles came from that
has so that event that painful event was
the basis of going from
you know where i was which was broke um
to
you know where things uh where i am and
when i'm transpired which is trying to
pass along
my wealth and and my advice to others
now the greatest relationship in your
life
who has that been for you
the person in your life who's made the
biggest impact well my wife she's been a
partner for
43 years
you know so at all dimensions you know
i love her um
intellectually spiritually physically in
all all dimensions
and so and we share the most important
things you know uh
everything from the children and the
grandchildren to
excitements of life so uh without a
doubt
uh it would be her yeah and you you
write the book in her honor which i saw
in the beginning i'm curious what's the
greatest lesson she's taught you about
becoming a better man and a better
business leader well i i i get to see
the world through her eyes you know and
and through her heart so she shows me so
many things
i would say it you know through all the
years it's been many many many different
things right now um she's
in the process of over the last 10 years
of helping the poorest most
disadvantaged kids in bad neighborhoods
in
in high school to try to get them
through high school
and so on and so she's given me a window
into uh a different world that has been
helpful uh but it's uh you know it's
everything it's spirituality it's uh
you know different places in the world
it's um
so many things that's beautiful
uh you've seen a lot of pain in your
lifetime maybe maybe personally you've
experienced somebody just in the world
from the different pains that have
happened in the world whether it be the
economy or
uh injustice different things that
happened death you've seen a lot of loss
just in general in life and you talk
about how pain plus reflection equals
progress
i'm curious it seems like there always
needs to be some type of breakdown in
order for people to be able to look back
and ask themselves okay what's working
what's not working what do i really want
and how do i get there do you think it's
possible to have progress without some
type of pain in our individual lives
well pain is a heck of a teacher by
comparison
i mean you know like when
when you get the pleasure uh then you
then you just keep doing what you're
doing but it doesn't teach you to change
you know pain when you put your hand on
a hot stove or do anything that uh got
you into a position teaches you maybe
about how to approach it differently and
also
uh pain teaches you about how reality
works
reality is reality we're given
reality a lot of people say
they want to fight what reality is
uh you know oh it's what was me and stop
thinking about it being differently just
understand like why did that thing
happen to me and how do i put it in
perspective it's like nature
does it doesn't care about you right it
cares about the
you know the universe
and so when you have those experiences
just understand how reality works and
also how to approach it better that's
smart i think so i think pain is the
best
teacher
what do you think has been the greatest
pain in your lifetime that you had to
learn a lesson from
well of course um the greatest pains are
losing people that i love
the most which then gets me to reflect
on the arc of life right and what it's
all like
but um things in terms of i've come
differently i i remember a case that
changed me profoundly
to tell you the story quickly
so i started my business in 1975
investing
and it's you know it's easy to be wrong
in investing that's part of the game um
but in 1980
81 i calculated that american banks had
lent a lot more money to
countries than those countries were
going to be able to pay back
and that they would therefore have a big
debt to fault and that would cause an
economic crisis
and um
it got a lot of attention because it was
a
uh controversial view um and then in
mexico defaulted
in august 1982
so that prediction sort of wow came
right and some countries did
and i got a lot more attention because
of that was right and i thought we were
going to go into an economic um
spiral a depression a big debt crisis
and i couldn't have been more wrong
and um
i i was exact that was the exact bottom
in the stock market yeah and i lost
money i lost money for myself i lost
money for my clients i had to let
everybody in my company go
and i
had to i was so broke i had to borrow
four thousand dollars for my dad wow pay
some of my family bills so i mean i was
it it was a lot of pain this was 82
yeah
so you're broke then 82. broke totally
no money
no money no wow
and that was one of the best things
that ever happened to me it was very
painful but it was one of the best
things for because it gave me uh the
fear of being wrong without me losing my
audacity in other words um it gave me an
open-mindedness
it made me start to think um what how do
i deal with what i don't know so i it
made me
find the smartest people i could find
who disagreed with me to start to
understand their thinking
it made me
think about how i could
maintain that
that upside you know risk goes with
return
so i didn't want to uh have an ordinary
life mm-hmm so i still wanted the big
upside return but how could i do that
without less results
that's right and i
so that was a problem that that was part
of my reflection and that reflection led
me to understand how i could diversify
better how i could stress test my
thinking better and so on then i brought
in the smartest people i could find who
were independent thinkers who would
disagree with me
and then i
and and
and i did that and that was the exact
bottom
financially and so on in my life from
that point
up to um you know not long ago fortune
described bridgewater as the fifth most
important country private company in the
country
in the u.s
and so it was that pain
and reflecting well on that pain that
gave me a greater ability to deal with
what i don't know and i learned
this is an important thing to learn
that i learned that uh whatever success
i had came more from my knowing how to
deal with my not knowing
than from anything i knew in other words
what you know in your head
is only a small percentage of what the
important things and the right things to
know is
and so to be able to go outside of one's
head
and to take in the best of the best of
the best wherever it comes and then use
that to make decisions and all of that
came
from that painful very painful mistake
where do you think you'd be today if in
82 you didn't go broke and have that
massive pain i'm sure i'd have a you
know a very
uh ordinary
i don't know life i don't know you know
because i wouldn't have known
how to have great upside
while having acceptable risks
right in other words like like i
at the time i reflected it i
i felt it was like
like the following
i'm on one side of a jungle
and i'm on this one side of a jungle and
uh and you could go
in order to imagine you could have great
success
if you can cross the jungle alive to get
to the other side but in the jungle are
all sorts of terrible things that could
kill you and and so on
and you have a choice you can have this
bore boring or you could have this
ordinary life or you can try to cross
the jungle
now each one of us would approach that
differently for me
i had to have the greatest life i could
have so i had and i have a little bit of
a taste of adventure so how would you
cross that jungle and what i learned was
that the best way to cross that jungle
would be with a team of people
people who i cared about they cared
about with me who could see things that
i couldn't see and i could see things
that they couldn't see
and that way you could be effective
together and when i and so that's what i
did that's how it worked
and what i also learned through that
thing is like i don't want to get out of
the jungle i don't want to get to the
other side because the actual act of
being in it with them and to do those
things is itself rewarding so i i'm i'm
confident that i wouldn't have learned
that
if i didn't have that kind of experience
so you're still in the jungle today yeah
i'm in my
but my jungle all everyone's jungle
um is a life arc there's a life arc
right
um you have to recognize the life arc
you know zero to i don't know 80 85 or
something is the life arc
um something like that i'm 71
i know where i am on that journey
okay
it's important to know where are you on
your journey and then when you start to
think about that like where will i be in
10 years i'm going to be a different
person in 10 years okay
where will the people i love be think
about yourself where will you be in 10
years and where will the people you love
be it could be your kids it could be
your parents
where will they be and what will their
experiences and the journey that they're
going through and you're going through
and this script in the journey by the
way is is is pretty well known right
like um i think i'll give you example i
think it comes kind of in three phases
uh the first phase is when you're
dependent on others and you know you're
learning okay
then what happens is you get out of
school
and you become independent and you go to
work
and then it's entirely different you're
in the second phase of your life when
others are dependent on you and you're
working
and you're trying to be successful and
then you
and and but there are the arcs and you
could see it the markers along those
lines you know do you get married when
do you have a kid when like i i realized
like when my kids have kids
i'm now in my third phase
okay so
so you see these things
you know yeah and so you have to see
that so what i want at this phase of my
life at 71 i'm in tr in transition from
my second phase in which i've uh worked
and i've won and i've you know i played
you know it's like had my battles and it
was great and so on and now i'm in a
mission to pass along the things that
were valuable to me i want to pass them
along to others and then i'm going to go
quiet
and then i'm in that other phase
you know but you learn things and so
this is kind of a mentor pass it a long
phase
how do you stay
confident in transition from kind of one
identity to a new identity that's
something
new that's something unknown whether it
be in your personal transition life or
in the financial world where
things are unknown things are
transitioning or it might seem like it
how do you personally stay confident
in the transition first of all
you're really talking about comfort with
ambiguity
yeah okay
um and
the way uh the way that i feel it is uh
life is like an adventure
i mean if you knew everything it
wouldn't be nearly as good right and so
the ambiguity is part of it it's part of
the game it's just the way it is
and then so to then experience that and
and and to know how to deal with
ambiguity because the same rules apply
you know feel it feel it what's it like
how does it feel
where are the pulls to
how do you learn how do you learn how to
approach it what's it like speak to
others who have been in there in that
spot before
um you know
taste it
and so on our preferences change you
know as you're going through all those
things so you feel it out you learn
about it you go to the things that you
feel the pull toward
i'm curious
you have your your feelings you've been
talking about for a few moments but i
know you're a very thoughtful human
being you create algorithms for your
entire work your team everything is
based on
algorithms kind of thoughts and ideas
but i'm hearing you say you're a deep
feeler as well are you would you say
you're more led by thoughts or your
feelings and i think it's the alignment
of them okay here's the facts of
pertaining them there is a subliminal
mind that we have and there's a
conscious mind freud discovered that
there's a subliminal mind
so we have and in that subliminal mind
um we we just don't see it because you
know because it's not conscious but it
it has a big effect and so feelings
and those things are coming through that
subliminal mind and it really has a big
control
and then there's a conscious logical
mind so they
for everybody and so they're in your
mind they're like everybody's mind
they're these kind of two minds that are
working
now i i find that when i align them
meditation has had a big effect on me
i've been meditating
since uh
1969. wow so so for a long time because
what that does literally it's an
exercise where you repeat a mantra
sound and then you lose sort of a
consciousness and you go into the
subconscious mind but in any case
to reconcile feelings with thoughts
to recognize feelings with logic and
align them
like each has to double check for me
like if my feelings i'm yes i'm a big
feeling person the the most important
things in life
for me are what inspiration love um you
know what what is it about i mean what
are you doing it for
but at the same time to be able to get
their logic and be able to express
oneself
and and you know in algorithms or so is
it is a good thing so when they're
aligned it's kind of a double check and
it works at both levels so i think
that's most important
when you doubt
a decision or maybe just a moment in
your life personal or business related
doesn't matter when you when you're in
doubt of something what is your personal
mantra to get you back to a kind of a
centered aligned place where you can
make a better decisions
well um on the doubts
you know the question is always like how
big of a deal is it and what is this
type of bed and so on
and yeah you know little doubts no okay
that's no big thing um you know life and
death decisions
uh those kinds of things they're big you
know those are the big questions
um and what i um what i realize um
on those
is um a doubting is part of that process
you can only be sure a certain amount
how do you get to the best
triangulation
in other words
take in
from the smartest people and your own
thoughts and so on so that you're making
that
understand how reality works and then
try to make sure that none of your um
decisions are the ones that knock you
out of the game
in other words like i've got an
expression for people who uh who work
for me you can scratch the car but you
can't total the car
you know you could so realize
okay you don't win it all you you know
you you make your best bets
but don't have the one
so you have to eliminate the the killer
ones
because you have enough killer ones
um and one and odds are one of them's
going to get you right so so you know i
approach it basically uh that way you
know try to make the diversification try
not to have any killer eliminate all of
those that are unacceptable and then go
for the upside and and doubt but you
know i'm used to doubt i doubt you know
there's there's everything every time
you put on a position in the markets for
example i am never sure if
it would be easy if i knew so there's a
lot of doubt right so so doubt is part
of it but yeah you know don't have don't
put yourself in a position that you can
have unacceptable
where you go bro hanged around a little
bit is okay
yeah right
so how do you have confidence
when you're doubting yourself and you're
like i think this is gonna do well based
on all the math and historical evidence
and feelings
how do you have confidence when you you
know
place that bet i have enough bets that
uh i make the bet so that none no one of
them i i won't allow anyone that'll kill
me
and then i raise and i'll typically only
want to make bets that i feel good about
and i will have them stress tested my
bets by having other people stress
testing so yeah just imagine i don't
know you're playing a chess game
okay now okay maybe you're a chess
master but okay what are you gonna do
you have to still make a move
so okay what's the best thing to do now
imagine you could ask the best chess
masters in the world
what you do and think about the pros and
cons and make your decision and and just
not make it that also one's going to
knock out of the game so it's that i
think that
there take our three things
i think
that there's better than an even chance
of
a bad stagflation very bad stagflation
because of the dynamics
i think
i'll say one and three chance
but i think it's actually probably
higher than that
that we have a
type of
civil war internal conflict
really in which let me
the rules are not followed the
compromises are not made
that maybe um
the those who
they fight they don't accept losing an
election
that there's movement of people
to different states
that they believe represent them better
and there's a polarity developing and
they're going to different states
and
that there's
not
obeying
the central government so now it becomes
a power
i game
i don't think that to be object i'm in
the business i need to be objective
right
because accuracy is my thing i have to
be as accurate as possible i'm not
saying that's accurate but i'm saying
when i look at that i don't think uh my
assuming that's a one and three i think
it's actually probably higher than that
that there will be that kind of a
situation
and i think it's better than um
higher than a one and three i think
maybe significantly higher
that you get into the same conflict and
the power for example
um internationally for example
um
does russia or the west
win the war in the ukraine
i'll define uh putin winning the war as
uh three things he
controls
against control of the eastern part of
the ukraine
russia's economy
is not devastated by sanctions
and he remains in power
wow and
and let's say for example
he can attend and russia attends the
next g20 meeting
okay
so
that's him winning the war
that that for him that's him winning the
war because in the beginning of that
um it was worth his cost
i mean he wants more than that
he wants a neutral new cr ukraine or an
aligned new ukraine
um but he pro he's not gonna probably go
and get that so he but that's the
minimum
now that's him winning the world that's
also kind of the west losing the war
now
but if he loses the war
if he loses that
he will probably escalate
okay because the war is now pla being
played
as a
um
on the ground
armies armies
um and with sanctions
but he has other weapons
and rather than go down
he will
probably escalate
okay
that's a game of chicken
but it's a very dangerous game
yeah
um okay
um
and there are other issues
globally
for example you're seeing these
alliances work out and and
you're seeing the united states uh for
various reasons
um
sort of pull out of the middle east
um and you're you're seeing china more
move in
and so
these tensions
exist
and power
exists
are more countries that have nuclear
weapons now than there were
and uh you know there's there's even
talk of uh joint military operations
between china and iran
um and so you see these sides begin to
align
so if i say that there's a one in three
chance of
um some kind of a military
confrontation
that
scares the hell out of us over that is
extremely
i don't think that sounds too high i
think it's
larger than that
so that means i think um
we're headed for some risky times
because you because any one of those
things is really
is is not normal and one of those things
is not what we're used to it's pretty
bad
but again i mean if you
if you if everybody worries they don't
have to worry
um you know if
both sides
think about what that's like
and say i can't you know we must come
together and make sure
that that does not happen
yeah that would take us being rational
human beings right
and having some inner wisdom and and
consciousness well that's one of the
reasons i'm trying to pass along you
know i passed along the book which was a
study for my own benefit but i also did
a uh an animation
and uh um
to try to pass it along so sort of help
people understand this the animation i
put it out a month ago it's got 11
million views people it's very
digestible
yeah so um
you will have that
we'll have that linked up in our
description on audio and on youtube for
people to watch it's really powerful
um i'm curious you're again you've
you've seen a lot in the last four
or five decades of being in this
this industry and this business and in
the financial world
um with everything that's happened over
the last couple years not just pandemic
but stock markets going up and down wars
inner conflict of countries all these
different things cryptocurrencies coming
in the decentralization of money all
these different things
what do you even think is going to
happen in the next 10 years with with
the whole 2030 agenda
being talked about
you know what do you see happening over
the next 10 years
um
i should say that one thing i
uh when i did that i discovered the
three forces that i mentioned i
discovered um a fourth and a fifth that
are very important and big
um one is that
interestingly acts of nature in the form
of droughts floods and pandemics
have had a bigger impact than the things
i've i've been talking about
um
in terms of cost more lives or um
toppled more civilizations um
those acts of nature
um so i think um
um that's something
apparently that we have to be concerned
about
um
but
number five
over long periods of time
10 15 20 30 years
the most powerful force
is man's ability to adapt and invent
tremendous capability of adapting and
inventing so you'll see charts in the
book and you'll see here's a great
depression and here's a war and as you
see those things they look like blips on
the chart of life expectancy per capita
income and so on
and so there's a tremendous capacity for
dealing with all the other stuff
if man can adapt to it well and and
inventiveness during this period of time
um should be kind of i think really
great because
what we're using more and more is types
of technology artificial intelligence
and so on
the ability to think and collect data
and use the computer to help us with
that is a very very powerful force
now like any forces it's also a risky
force
because it can be used for bad as well
as for good
um but i i think the world will evolve
we will have these cycles
in the world so that's what you see
uh you see these cycles and then you see
um evolution through those cycles and
adaptation
um and so i
expect that but i would say
um there's the probabilities i gave you
before
um you know that concern me
um so you know a lot will be unknown but
i'm
you know we have a lot of potential and
a lot a lot of things to worry about
you've created so much wealth for
yourself you've been building so much
and you're still very busy it's not like
you're you're done by any means you're
still growing but if you were
your late 30s early 40s at this time and
you had been building a business and
building a team
and trying to set yourself up to be
healthy in all the different areas of
your life
how would you be thinking
if you're in your 30s early 40s about
the next few moves that you should make
as an individual oh it's very
interesting because uh there's a life
cycle um and um
i won't but the upshot of the life cycle
is in your early years your
quite often your happiest years and the
happiest years
extend uh
just until you uh
a bit past
uh you getting uh out of school so
there's three phases the first phase is
you're dependent on others
um you're trying to learn and be
successful
and then you come out of school and
you're i um
idealistic you can do everything you
don't have much obligations you take on
the job and so on that's a happy period
the um then you have a work-life balance
challenge
and more and life is harder than you
expect it to be
typically
um and that notion that i'm going to be
just easily terrifically successful is
difficult
and so if you take the most
least happy period of life by measures
of happiness
across most societies
um it comes in uh really something like
the 45 to 50
5 50
period
um that's because you have the work life
balance
maybe the relationship that you had with
your spouse is not or whatever your
significant other isn't as
wonderful as you'd imagined it would be
that's when the divorce rates are higher
you're overstretched you're having to
take care of your kids and you're having
to take care of your parents
uh it's it's a tough
phase um that's that's a tough phase
and then what happens is as you pass
that it's very interesting
um from 55
until
um
the
person approaches whatever that is
that's going to kill them
is the happiest period of time
um even happier than the earlier period
of time by records
because you become free
you're not so hung up on am i the best
accomplishment i'm i'm okay you're so
sufficient you have you have the choices
whatever and you don't have to take care
of your parents you don't have to take
care of your kids the kids are grown up
and uh your parents have passed away
and so on so that's the pattern um and
so when you think about uh
this in terms of let's say your question
um
okay what's the advice my first bit of
advice is
uh meditate
i found that meditation i do
transcendental meditation
i find that uh that gives me
a calmness and an equanimity
to deal with my realities that are
coming at me okay life is just a matter
of choices
and
um i found
generally speaking when things are at
odds and there's this conflict
if you step back with a clear head
you can um
get
most of each that you think is at odds
for example
um on this work life balance
most people think
well do i do i take more uh free time
and take it away from work
or do i take work and take it away from
the free time and so on
uh but the real answer to the question
is how am i going to be efficient so i
get more out of a day or more of an hour
and if you're with equanimity you look
at your circumstances
and you say okay how can i get more
then you can put more life into life
because you you reduce that but you have
to have that equanimity
not a sense that
stress and
these things are happening to me
and i'm angry and i'm upset
okay
because that will hurt you physically
stress is a killer
and it also won't make your best
decisions
so i'm i'm trying to give an equanimity
uh you know and again pain plus
reflection equals progress reflection
quality reflection not just yourself but
even asking people and looking for
principles of other people who are in
that same situation it's not like this
is the first time you've gone through
this or anybody's gone through it
so when you ask others well how do you
deal with work life balance or or other
things you you you know um you'll find
interesting things and and you'll be
able to deal with it okay so meditation
would be one thing and that equanimity
and look at it and realize it's just
your choices it's not the world
picking on you
but but you know it's the world it's
like well it's happening it's reality
yeah and you know that kind of a it's an
approach to life
yeah were you always a meditator
i started in 1969
so
i've been pretty much
you know i forgot what i was at the time
whatever that is you know like
wait two years old then yeah no
like 18 or something or 20 or whatever
22 i don't know yeah i got that and so
that's probably what helped you get
through the the loss the financial loss
in 1984 and kind of the the the public i
guess embarrassment or humiliation that
you might have faced since it was public
and
processing through your emotions through
i lost a son
on my greatest loss
um
not quite two years ago
42 year old son
oh my god
i would rather die
i would rather lose everything
and i had and okay
but it's you know it was it was that
um and it's like the serenity prayer you
know uh surrendered
god gave me the
acceptance the ability to accept
that which i can't control
and the power to control that which i
can and the wisdom to tell the
difference and um
so they're yes because life
happens to you
okay and you can't just
sit there and be sorry for yourself i
mean
i don't mean when hurt happens
that you
that you can't
nurture yourself and and take care of
yourself but then comes a period of
reflecting
and you have to deal with it so
meditation
and that equanimity is just so important
i just lost my father three months ago
and unexpectedly and it was uh it's been
a
it's been a grieving process and uh
lots of beautiful grateful moments but
also a lot of sadness and
almost every few days you know a lot of
sadness that comes over me over
different moments i i um i i know well
then here's here's my here's my the way
i the way i see it um
don't feel sorry for yourself feeling
sad
um go into it
yeah uh in other words when i think of
my son and youth you think about your
father and there's the
missing um
um
go into that that's okay
because he he in his way is with you in
a sense you're keeping that memory so
it's bittersweet
yes and what happens is that the um with
time
the sweetness
increases relative to the bitterness
and also um learn the lesson
um
to to love
and cherish
all the other people in your life
go hug them go spend the time with them
go appreciate you know smell the flowers
that remain
you know um because there's there are
other joys around you
and that you know and then
realize that your sadness
is because something that must have been
terrific was taken away from so you've
had all that terrificness
and i mean it better that way than not
having it that way
so anyway those are the things help me i
uh i can go at length of other things
that i did that helped me uh i'll might
as well say that because maybe they help
your viewers too what's been the biggest
yeah i mean i think that's probably the
again i don't have any kids so i don't
know what that would feel like but i've
i've heard that that's one of gotta be
one of the greatest losses for a parent
to lose a child what's been the biggest
lesson for you and
throughout the last couple years well
and i want to generalize it to you
losing your father i remember when i
lost my mother for the first time and in
the early time i couldn't imagine
laughing again
and now i mean like
okay i laugh
and i almost have mental conversations
with her because i know what she would
answer
and so on so i think it applies to all
important losses
and some of the things that uh helped me
well besides meditation was to do it
very naturally
feel what i felt whatever i felt i would
go with it
another thing i did was i would journal
my wife and i have a cup of tea each
morning
and we have a picture of him there and
um
and we have some flowers
and then
we journal memories of him that's
beautiful
and um though we jump and that brings
those memories out i've been i journal
and i pass it to her and she journals
um and that keeps those memories alive
and then we'll give that to his daughter
um
and
then there was a book a little book i
forgot the name of the book
that somebody sent us on
grieving or mourning
and it had a series of things we would
read a page in that every day
um and it would you know it was like a
lot of good advice
um death happens to everybody i mean
everybody is gonna you know
people i love everybody everybody's
going to die
um
and
to pay attention to it and know how to
do it well we don't talk much about it
and we should really
so anyway those are some of the things
that helped me
i appreciate that that's a that's
beautiful
and
to go along with that i guess
how do you view death for yourself as
as you continue to evolve and grow and
obviously getting older
do you think about your own mortality do
you think about your own death do you
think about of course what you want to
do with your time do you think about
what you want to do with your your
lessons or your wealth or
what is what are those thoughts of
course of course it's um
um first of all i accept the arc of life
you know
the arc of life and death
um so it's very real
and then um i
and i'm blessed with like i could do
almost anything i want to do
um and i'm at a stage in my life where
something seems natural to me
which is a transition from my second
stage of my life to my third so i said
the first is when you're uh learning and
depending on others second stage of life
is others are depending on you you're
working to be successful
third stage of life
is when you're free of all obligations
so you're free to live and free to die
you're going to expose you're going to
have that and you have your blessings
my grandchildren and anything and i can
do whatever i want to do
and i find that instinctually
during that transition period from my
second phase to my third phase
is to pass along things that i had to
help others be successful without me
um so yes that happens to do with uh
wealth it happens to do most importantly
i think with principles that have helped
me
why am i doing this this this call okay
because i think it'll be helpful and
that that period of time will last last
a very short period of time i think that
probably there's one more book i want to
put out which is the econom my economic
and investment principles i passed that
along i think i'll be gone
and then i'll go quiet and and uh and
i'll just you know save her life and
and those things but i find life very
exciting and stimulating but i i'm
approaching it with no obligation like
i've passed along with control of the
business that i built and i love it
because i want to help them be
successful without me so that's that's
where i am
that's beautiful
um a couple final questions for you i
feel like i could speak with you for for
many hours ray so i appreciate your time
but i want to be respectful as well
um
one question about
your thoughts on
decentralizing you know money with the
dollar and the euro and all these things
losing its value and with
the what seems like hysteria of crypto
nft
the metaverse you know money in the
metaverse type of conversation i kind of
include all that
what do you see happening there in the
future with crypto i think i read
somewhere that you own some of crypto
i'm not sure how much but you're a
little bit done some of it just a little
bit what what's your thoughts about the
crypto space bitcoin ethereum kind of
all of that in the future
i think we're in an era of
that money as we know it which is a fiat
money is being devalued um and um
and it's and it's going to change and
yeah the dollar's role is going to
change and that alternatives were are
going to compete with that
so like i wouldn't want to own
money when you own
a dollar let's say is in the form of a
debt instrument so you're going to get
paid back in that and i think it'll have
a negative real rate of negative buying
power and so on in almost any currency
and they're all competing
so
they'll all they're all devaluing
essentially and so money is about the
medium of exchange and a storehold of
wealth that is portable
and works in most countries
um and now we'll find out what what
those things are i mean gold is an
example of one of those
um
and uh crypto is an example of those
and um
you know maybe nfts are and who and who
knows
i think we're in a kind of a who knows
kind of phase
new things come along and then they'll
be
that and i think they'll compete
and i think that um
people will start to think about
how do i have a portfolio of those
things that i can take from that are
widely accepted that i can trans um
and that maintain buying power
now there's challenges to that
like when you have a lot of volatility
in it
it means that oh my god my owning it is
more volatile right
you know it's more risky than my not
owning it
um and so that drives money into sort of
other things
but anyway we're going to struggle with
that and you're going to see digital
currencies in different countries and so
on
and i honestly don't know i don't think
one thing wins out
um i do think that um
a lot of um the crypto
um you know they go like all markets
they go through phases
and here's kind of the bubble phase
where
you know it goes up a lot and
everybody believes it and the story
believes it and everybody's bought in it
and then you have the adjustments and
and so on i think there's too much
emphasis in it because the total value
you know of bitcoin or even the
cryptocurrency is not much
is comparable to the value of microsoft
so um
one has to think when one thinks of
assets i would rather think about the
whole array of assets
than to think about um you know just
who is it going to be
that crypto bitcoin won yes i think
people could be too concentrated on that
and i think that could be uh dangerous
right so i don't know the answer i do
know there are lots of storeholds in
wealth that you can
uh diversification is your key yeah
diversification is my key yeah there's a
great quote um
that i like and i'm gonna butcher it but
it goes something like this i think it's
from jim carrey where he says i i wish
everyone
uh had the ability to become rich and
famous and realize that that's not the
answer
something something
something around that i'm paraphrasing
it
that's so true if you could give people
uh the
what it feels like to be you know one of
the richest people in the world and what
a lot of money
means what does it actually mean
if you could kind of share that with
people
i ca i can just i could describe it what
it means for me um and might be
different things for other people
uh let me start off by i and i acquired
it by an accident
because the game that i happen to fall
in love with
if you learn to play the game well it
pays well right
okay and a lot of people i think that's
true with a lot of people who are coming
up with ideas and building businesses
and so on they got excited about it that
does it works well and
um and then it pays well um uh to me um
it's a serious mistake
that thinking that success is measured
in such things
um because money
has no intrinsic value
okay what does money get you
and what do you need now um i
uh what i want
um
is
well what i want is freedom
and the ability to be creative and and
and do that that's that you know that's
what i want
uh but and and money helps me get that
it helps me help other people it helps
me have the impact
um i i like those things about it but
more importantly i like my game i like
to play with my game
um not more important but anyway
comparably important
i think that success
is having the life that you want to have
as long as you're earning more money
than you spent
and that can be um uh spending very
little and having a wonderfully
luxurious life like i watch a lot of
people
um don't have much money
and of different ages sometimes young
sometimes older
they travel around the world they
backpack
they go to different
cultures and different places
um they can live in a tent or in the
most beautiful not you can the most
beautiful nature is available to you
or you can be in a hostel or you can
meet in so many different countries
surfing and have free and freedom and so
on i think everybody
should almost experience that to know
that they can have their their a great
deal of freedom without a great deal of
money and that also um
so and and that status thing
is a silly thing okay that's like being
hung up on living your life for
approvals
and so um
and so don't get on the track
and lose sight that okay what is it that
you really want in your life what is a
successful life for you it's not
measured by
um how much money you have or how much
status you have or almost that other
stuff it's it's measured and you know
like i would say
again meaningful work and meaningful
relationships if you have something as
your work that you're into and your
craft and it's a thing you love
and you have meaningful relationships i
think those are the most important
things to make a rich life and the more
i i learned the more i realized i was
lied to
like
we're taught to go to school to get a
degree to get a job so we can then get a
job and climb the corporate ladder but
wealthy people don't do that wealthy
people are not working to climb the
corporate ladder they're working to own
the corporate ladder how did anyone
realize that you could do that