Masterclass: Money Wisdom from Shaan

0:00For the past 10 years, I've been keeping this little notebook with a scratchpad that I call, you see that money wisdom, reminders to self. And these are basically just anytime I heard something, I read something, or I learned something that was wise about wealth, I would write it down. And I put all the notes here and today I'm going to read you a bunch of the things that are in this notebook.

0:25I feel like I could do that because in most places you can't really talk about money. Money is just sort of this tacky taboo thing. You're not supposed to, everybody has to pretend they don't care about money, but we all do, which is weird. You just have to treat it like this silent fart in the room. You got to pretend you didn't care about it. Pretend it's not there, but it's there. And this channel, luckily, is different. This is a channel where we come, we talk about business, we talk about money, we talk about mindset, we talk about a bunch of different things that are interesting to us. And really, the only people who click on this channel are people that care about those things.

0:53And so it's like when you go to the gym, you can flex and talk about your pecs because the other people there care about that sort of stuff. So it's understood. So this is the Money Wisdom channel. I think in the next 15 minutes, I don't think this will be long. I'll be able to go through a bunch of the nuggets I call golden nuggets that I had written down in this. So the first one, I'll start with this. The rich aren't just lucky. So pretend we took all the money that existed and we redistributed it out. Everybody got the same, let's say$100 ,000 to start with. 10 years later, I think that most of the rich people would be rich again because wealth building is a skill and it can be learned.

1:29For most people, you want to learn this skill, but you don't really know where to start. And I'll give the, I write down these sort of three shifts, these big, big, small shifts that you can make. What is a big, small shift? So I'll give you a quick story. A man wants to learn golf. So he goes out and he buys a set of golf clubs and he goes to the driving range, starts hitting some balls and it's going left, it's going right. Some are going to the center. He can't really control it. Doesn't know how to do it. He just started. And so he's like, okay, I need to build this skill, but I don't know how, I don't know what I'm doing, to be honest.

1:59And so he sees like, you know, in the, in the right next to him, in the driving range, there's a coach teaching a kid. So he walks over, he tells the coach, Hey, I'd love to learn. Coach says, happy to work with you. First lessons tomorrow morning. Okay. So he shows up again tomorrow morning. You know, this coach teaches him a few things. Now the coach, you know, he's sort of a, you know, he's maybe 24 years old. He's himself just graduated from college. You know, he's not the best in the world. He's just the guy standing next to him, but still it helps. He's hitting it a bit better, but not much.

2:25The ball's still going left and right. And you know, the man thinks to himself, yeah, this coach sucks. I don't want this crappy. This guy's a kid's coach. I need a real coach. And so he says, you know what? I'm going to hire the best. Who's the best coach? He goes and finds a professional golfer to be his coach. And this coach gives him some instructions within a few minutes. He's hitting the ball straight. It's going great. And so he says, all right, I'm ready to go play tomorrow. I'm playing a full 18 holes of golf. Let's do this shows up the next day and he's ready to hit the ball straight again, but today things are going different today.

2:54It's slicing left, it's slicing right. And he's getting frustrated. And the worst part, the thing that's frustrating him the most is that the coach is not saying anything. He sort of expects the coach to jump in and fix it, but he coach is just watching. So finally he turns around and he says, Hey coach, are you going to, are you going to do something? You're just going to stand there. All right. Like, look at me, I'm way off. I got to do, I got to change something. And the coach just smiles. Coach says, you know, you think you're way off, but you're really only two millimeters off. He said, coach, no offense.

3:24I know you're the expert here, but pretty sure I'm off by more than two millimeters. The ball's gone a hundred yards into the lake here. And the coach says, yeah, yeah, yeah. I understand that. The outcome might be far off, but all you you're only off by two millimeters. You just need a two millimeter shift. You see, because when your golf club hits the ball, if it's two millimeters angled in the wrong direction. It will completely change the trajectory of where a ball is going, right? A small shift in the angle here is going to take us in a completely different direction. And so he just shows him a couple of tweaks.

3:57Watch where you're hitting the ball. Look at the face of the club. So he makes the adjustment, takes a swing, nails it. You know, I heard this story first from Tony Robbins and I don't know if it's real or fake or whatever, but I love the idea because it really rang true to me. Most things in life, even if you're far off in your outcome, you're actually just only a small shift in your approach away because that's what changes your trajectory. And so here's the small two millimeter shifts that I think most people need to make. This was after all the money wisdom I collected, they all kind of bucketed into these three shifts that you can make.

4:31Shift number one, hard work to smart work. Growing up, we're all pretty much told hard work is the key to success. Our teachers tell us this, our parents tell us this. But we got to ask, is this really true? Because I look outside, I see the lawn guy mowing the lawn and working in the summer heat. He's working hard. Or you go into any restaurant, go to the back of the kitchen, look at the line cooks. Those guys are working hard. They're working crazy hours. It's hot out there. It's difficult. They're on their feet all day. They work, you know, Saturdays and Sundays because the restaurant doesn't stop.

5:00They work hard. And, you know, you start to think about it like, well, if hard work equals success, then why isn't my janitor driving a Bentley, right? because what you work on and who you work with is what matters. It matters a lot more than how hard you work. So again, what you work on, the thing you actually choose to do and who you work with will make a far bigger impact in your trajectory than just hard work. In fact, there is hard work does help, but it's maybe the fifth or sixth most important factor in my opinion. I do think there's sort of a minimum, like you need to work hard enough, but beyond hard enough, there's not really like a maximum you should be chasing.

5:37The goal is not to work as hard as you possibly can. Okay. So what should you actually work on? Right. I said, that's the most important thing. Well, Naval Ravikant says it best. He says, you want to find the thing that feels like play to you and work to others. And you should keep dabbling until you find that because at first you might say, well, what feels like play to me is watching Netflix. Okay, cool. That feels like play to you, but it doesn't look like work to others. And so you have to find the thing that is play to you, work to others. For me, for example, it's business stuff. So I am a nerd.

6:08I love reading about learning about business. I like to go, you know, if a stock is, if a company is going to go public, I'll go read the S1. I want to read all about the inner workings of the business. To most people, they see this 100-page PDF and it's like you're digging through to find the balance sheet or the P &L statement. For what? Is your boss telling you to do this? No, I actually enjoy doing that. but to others, it would seem like work. And so that's a kind of a sweet spot you want to identify and really lean into those types of moments. Or this podcast, some people get really nervous about public speaking, or it seems like a lot of work, or wow, you got to come up with something, an hour worth of stuff to say every two days about business.

6:45And don't you feel a lot of pressure? No, no, this feels like play to me. And so if it feels like work to others, but it feels like play to you, that's the sweet spot. That's what you're looking for. For some people, that's programming. Programming can be a joy to some people and it's a pain to others. For some people, it's writing. I love writing. Other people hate writing. They think writing is this, they still have trauma from school. They can't stand writing. For my trainer, it's exercise. After he trains me and four other people, he's been in the gym for six hours straight. Where does he go when he's done?

7:18To the gym because he wants to get his workout in. It's crazy. For him, exercise and being in the gym feels like play, whereas to others, it would feel exhausting. It'd feel like work. Hell, Marie Kondo loves cleaning. She made that her thing. She loves cleaning. But that feels like work to me and many others. So you got to find that thing. Why does this matter? Because when it feels like play, you'll do it a lot. Not just nine to five. You'll do it from five to nine too. You'll just do it all the time. Any available moment you have, your brain will go in that direction because it's something you enjoy doing so much.

7:48And because you enjoy doing it, you'll keep doing it. You can do it for a long period of time, even if you're not getting immediate results, right? There's many things that we will do if we get immediate results. it's the things you're willing to do even without immediate results that lead to these big wins in the end. And you know what they call the guy who practices all the time and never gives up, right? So somebody who does it all the time and can do it for a long period of time, the best. That's what they call the guy. They call him the best. And the best always gets paid in any field. The best plumber gets paid.

8:18The best nanny gets paid. The best whatever you are gets paid. And so you want to find the thing that feels like play to you because it will help you become the best. Shift number two. So we've gone from hard work to smart work, and that's finding the thing that feels like play to you and work to others. Now shift number two is you want to go from being far away from money to hanging out with money. So let's pretend you want to get a six pack. To get a six pack, to get abs, you need to start thinking and acting like somebody who already has a six pack, right? Like they make certain choices about how they eat.

8:49They make certain choices about like, you know, if you travel with somebody who's fit, they got in their bag some protein powder, resistance bands. They'll pick a hotel based on the gym. They make decisions you don't make because they have a certain set of priorities and habits that you don't have. So you got to sort of think like a fit person to act like a fit person, then you become a fit person. Same goes for wealth. You got to think like a wealthy person, act like a wealthy person, and then you become a wealthy person. Most people get this wrong. They laugh about this like, oh, so I should just, that guy, rich guy's bike, you know, Ferrari, so I should go buy a Ferrari.

9:21Not really. You want to find their habits, not their extravagances, right? Not their indulgences. You want to find their habits. You want to hang around with them so that you understand what their habits are, the small things they do on a day-to-day basis that make them who they are, and you need to start doing them. So you need to shift your way of thinking to match the type of person that you want to become. All right. So how do you start thinking like a wealthy person? Well, you got to hang out with them, but how do you hang out with them, right? Like, you know, they may not be around you. You know, what if you don't know anybody?

9:48So there's three ways. The first is peers. So you want to find, you know, five people with the same dream as you, right? Do you know five people who have the same dream as you, who are taking it as seriously as you or more seriously? You want to find those people, you need to create a group chat. You need to create a weekly dinner. Hell, move into a house together. Do whatever it takes. When I wanted to get good at poker, I literally lived with a bunch of other people who were trying to get good at poker. And all day, we're all playing poker. We're all talking poker over our meals. We're thinking about poker.

10:17We're asking each other for questions. We're getting inspired by somebody else's success. We're getting bitter about that guy's success, but it makes us work harder. you want to immerse yourself in an immersive environment where you're going to get better. And so get as close to it as you can. Living together is the best. If you can't do living together, get dinners together. If you get dinners together, get in a group chat together, do whatever it takes. The second one is mentors. So you've got your peers. Now you want your mentors. This is somebody who's already done it. You can learn from them.

10:42The trick here is really simple. What most people do wrong is they go and ask for you to be their mentor. Here's what you actually want to do. You want to find somebody who's already done it. You want to ask them a specific question. Hey, I'm dealing with this situation right now. I need to decide between A and B. Here's what I'm thinking. Could you give me any advice on this decision between A and B? How would you think about this? Then whatever they say, you go take massive action on it. And then you follow up. You say, hey, you told me that thing. Here's what happened. It either really worked or really didn't work.

11:10Here's what I'm doing next. And you repeat it. You do that three times with somebody, they're kind of informally your mentor anyways. You never need to ask them to sort of like, you know, be in a relationship with you. It'll just happen naturally by being somebody who asks specific questions. So don't ask them for their time. Ask them for their specific advice. Then actually take action on it. And then the key, follow up. If you repeat that, you'll have mentors. Okay, the next way you hang out with money, you got to change your information diet. So if you're already listening to this podcast or watching this video on YouTube, congratulations, you're already doing it.

11:39But you need to ask people who have achieved what you want. What do you listen to? What do you follow? What do you read? What are your favorite YouTube channels? You know, my greatest teachers are people I've never met. This is people that I follow from Twitter and books and podcasts and YouTube. They've made the biggest impact on me. You don't need to actually physically necessarily hang out with everybody for them to make an impact. But like, let's say you listen to this podcast. We release two, maybe three episodes a week. Each episode is about an hour. So you're hearing us for two or three hours a week.

12:05That's more than most people talk to their mom. That's more than most people talk to their friends. That's more than most people talk to anybody. So you bringing this conversation into your world is changing the type of conversations that you're having. You start to change your conversations. It'll change your thinking, change your thinking. It'll change your actions, change your actions. You change your results. That's how it goes. So these are the three ways that you can hang out, start to hang out with wealth. There's one other one that I didn't mention here, which is when you hang out with wealth, literally you get around people who have done what you did.

12:34It gives your imagination more food. So when you like, I remember the first time I went to some really rich person's house and I'm like, wow, he's got a chef and he's got like, oh, this guy just came over, just did that for them. Oh, interesting. Oh, they're saying that they travel once a month to go do this thing and this charity thing that they do. That sounds really fulfilling. Those stories sounded awesome. It taught me how to figure out what to even want and what's possible, what's achievable. Because when you see it, it's a lot more realistic than just thinking about it or hearing about it.

13:04Beliefs are good, but an experience is always better. And so just hanging out with people who already have wealth gives you all these subconscious cues. It makes things feel more realistic. It gives you different things that you dream about. Maybe you don't care about a car. Like for me, I never cared about cars, but maybe I wanted a, like I always thought I wanted courtside seats at an NBA game. Then I saw a rich person with a chef and I was like, screw the game. I want a chef. That seems awesome, right? Healthy, tasty food that's being made by somebody else. Saves you time. That's, that's unbelievable.

13:35So that's, you know, that's the one other thing about hanging out with money. All right. Shift number three, going from small swings to fat pitches. And I love saying fat pitches. All right. So common mistake most people make, they take small swings. Like they take the first good offer that comes their way, the first good job or the first good deal. They start too many projects at once. I've definitely been guilty of that before. They chase shiny objects. So, Oh, I'm doing this thing. Oh, there's a new thing. Go over there. You can do anything, but you just can't do everything. This is a hard lesson to learn in life.

14:05You can do anything, but you can't do everything. And the beauty of this is you don't have to do everything. So Warren Buffett, one of the wealthiest men in the world, one of the best investors in the world, he missed the whole internet wave. The last 20 years have basically been dominated by the tech industry. He missed it. That's all right. He still ended up doing great. Why? Because he understands Coke and Geico. His fat pitch was companies like that that were in his zone of competence, things he understood that he was able to act on. And you can get rich anyway, right? The beauty of it is you only got to get rich one way.

14:36You don't have to get everything right. You just got to get one thing right to be rich. Ted Williams, one of the greatest baseball hitters ever. He was famous for waiting for the fat pitch. He would sort of map out the strike zone. He said, all right, all of these are strikes, but you notice that when it's dead center, I hit 400. But if I try to hit on the edge of the strike zone, I'm only hitting 230. And so what made the difference between Ted, the greatest hitter ever, and the average or even above average hitter was that they would swing at the pitches where they would average 230, whereas he would only swing at the pitches where he'd average 400, right?

15:10That was his attempt to wait for the fat pitch and only focus on hitting those. And Warren Buffett takes this even further for investing. So he says, unlike baseball, there's no called strikes in investing. You can literally sit there and pass on 50 opportunities straight, just waiting for your fat pitch. And somebody asked him, what does a fat pitch look like? Here's what Warren had to say about that. He says, if you look at the stock exchange, it's high for the last 12 months will be you know, maybe 150 % higher than the low. Low is, you know, the low part of the stock market. He says, all you have to do is sit there and wait until there's something really attractive that you understand.

15:42And you could forget about everything else. That's a wonderful game to play in. There's almost nothing where the game is stacked in your favor, like the stock market. But the problem is people start listening to everybody on TV or whatever, talking, or they may read the paper, whatever. And they take this advantage that you can wait for something you really like, that you really understand and pounce. and they turn it into a disadvantage. There's no easier game than stocks, but you just have to be sure you don't play it too often. And that's the mistake that people make. They play too often. They swing too many times.

16:13They don't wait for the fat pitch. And that's why their returns go down. You know, the first 10 years of your career, you probably don't even know what a fat pitch looks like, even if it was to hit you in the face. So my advice for most people is the first 10 years, just go work with the smartest, highest energy, most resourceful people you can find. go into emerging markets or exciting fields and just try to do exciting work with exciting people. Because doing that is what's going to train your gut to actually notice fat pitches. If you're doing that and you're reflecting consistently, you're looking back, you're saying, all right, what did I learn last year?

16:46Looking back, what should I have actually been focused on last year? You'll start to learn, oh, wow, there was all these opportunities that were coming my way that I actually didn't recognize to be as good of an opportunity as they were. And so you got to spend those first 10 years like that to hone your gut. And then after that, you'll be able to notice those fat pitches. Some common things about like, what is a fat pitch? What does that mean? So like a platform shift, like when the iPhone first came out, there's an app store. All of a sudden there was this new computer in everyone's pocket and nobody had built apps yet.

17:14That was a fat pitch waiting to happen. Anybody who jumped on that, like Instagram back then, they were going to do very well. Law changes. Anytime there's a rule or regulatory change that creates opportunity. If there's a new technological breakthrough, like AI right now, what people are doing, building on top of chat GPT or a GPT-4, that's a fat pitch. Market panics. So anytime the market just panics and sells everything, well, everything's on sale. That's a good opportunity to buy great companies. Another one is working at a generational company early on. So if you saw Facebook in 2004 to 2008, you could go in and be like, look, it doesn't even matter that this is how much I'm going to make off this.

17:51You just want to be on that rocket ship. And so there's one of these, you know, one or two of these every decade and being a part of them is, you know, that's a fat bitch. The other one is when somebody owns something, but they don't realize what it's worth. You know, they have an asset, but they don't really understand it fully or they don't have the right lens. But you do. You know what you can do with it. This happens in real estate all the time. Somebody's sitting on a building. It's only rented out for this much. So they sell it at a fair price for what it's worth. But another guy comes in and says, I know that I can get a new permit to zone this for multifamily, and I can build more units on top.

18:23And so he's selling it at what he thinks is a fair price. But to me, it's actually a steal because I have asymmetric information. That word asymmetric matters. Asymmetric information is when you know things that others don't. Asymmetric upside is when, let's say you invest in a startup. In a startup, you invest$100. The most it can lose is your$100. But startups, when they win, they could be 100x or 1 ,000x returns. returns. That's asymmetric upside. You can win a lot more than you can lose. And so you want to look for opportunities where you have either asymmetric information or asymmetric upside as a general rule of thumb for how you invest.

18:57Now, of course, the likelihood of success matters, right? Like every startup is not going to 100x or 1 ,000x. So you want to find those where the probability of them working and the upside make it worth doing. Okay. The other part about fat pitches, you got to swing hard. Most people take weak half swings. and they make a couple of calls or they send you one email, but they don't follow up. Or you even give them an opportunity, they don't follow through. Don't just sit there and just look or just bunt, right? You got to really swing. And so winners follow up. Winners double down on what's working.

19:31Winners get on the next flight out to go meet you in person. And the way I say it is intensity is the strategy. Most people want the magic strategy, the magic formula. But unfortunately, the hard thing to understand is actually intensity is the strategy. Most of the time, the strategy is pretty obvious. It's pretty cut and clear. It's the intensity you take to it that makes a big difference. And so once you find a good strategy, you want to execute it just violently versus trying to wait for the perfect magic formula, perfect magic solution, a perfect strategy that doesn't exist. Here's an example of a hard swing.

20:05So there's a guy, Taylor Offer. I don't know why this comes to mind, but it's the first one that came to mind. Taylor, he's the founder of a clothing company called Feet Now, but back then he had a merch business. I think he was trying to sell socks or something. And it was going okay, but he wanted to double down. So turns up the intensity. He's like, I'm selling merch. I need distribution. What if I had the distribution of some of the most famous Vine and YouTube stars that existed? And the top Vine and YouTube stars at the time were guys like Logan Paul and King Batch and stuff like that. He says, how do I get them to work with me?