Meditations on Life, (Financial) Liberty & Happiness w/ James Altucher

26:35That we don't have time or that the current situation you have is sucking up all of your resources. but if you really want to do it, uh, you can, you can carve out the time for, for most of us who are doing desk jobs. I want to cut out some of those frontline kind of people who are really working two jobs to, to make it happen. But, um, so you, you, in your book, you, you say, or in, in, in a theme that often comes up also in the title of one of your books was choose yourself. What do you mean by that? You know, I remember one time my first job out of, Actually, I was thrown out of graduate school.

27:10So my first job after that, I worked at HBO, the TV network. And by the way, at the same time, I was offered, this was in the 90s. So you'll see the salaries. So I was offered$80 ,000 a year to work at J.P. Morgan. And I was like, oh my God, I'm going to be rich. Like this is$80 ,000 a year. And I was also offered$40 ,000 a year to work at HBO. I took the HBO job, even though it was half the salary, because I knew where I wanted to go in my life. Like I really loved HBO. I didn't love JP Morgan. Uh, I, so I started working at, at HBO and, uh, you know, I got so obsessed with, you know, I wanted to make a TV show.

27:55I wanted to be an entertainment and, um, um, you know, you just, sometimes you have to make sacrifices. Like here, I sacrificed some salary, but then I started a company on the side. Like what the skills I was learning at HBI was making websites for HBO. I was able to start a company on the side. So again, I was working eight hours a day at HBO, then eight hours a day at, uh, this company I'd started building websites for other fortune 500 brands. And over time, you just, you know, build confidence and build, you know, strength in, in what you're doing and you, and you learn the skills and you learn, you know, you learn new things.

28:38You always have to be learning and always curious. And, and that's kind of how I started. So you chose to follow your instinct in your gut about what you really, as opposed to just go for the trappings of what would have probably been pretty impressive to people that, you know, and your friends, if you landed a JP Morgan job. Yeah. I could have, I could have waited for, there's two things I could have waited for. I could have waited for somebody above me to keep promoting me and then eventually be a vice president and then senior vice president, then executive vice president, then maybe even more.

29:12And I could have gone that path. But then you're constantly sitting and waiting to be chosen. And so instead, I chose myself and I started a company rather than wait. And that really quickly sped up my career because then I was CEO of a company and founder of a company. Then I sold it and had money. And, and then I was going back to visit HBO. I'm visiting the CEO who was eight levels higher than me when I was an employee there. And I'm still friends with the guy. That must have been a wild moment. Yeah. And you know, the other thing is I was constantly pitching TV shows to them and they liked them, but you know, I would shoot a documentary and then it wouldn't air.

29:55I was always waiting for them to bless me, for someone else to say, this guy is special. We're going to put his show on the air. And instead, now we're in a world where I can shoot whatever I want and put it on YouTube. And then I've created a show. And in fact, somebody did do a documentary based on my book, Choose Yourself. It was like a docu-series of about eight episodes. And then the pandemic happened. He couldn't find a big distributor. and I said, let's just distribute it ourselves. Let's just put it on Amazon. And so now if you search for Choose Yourself, the TV show on Amazon, it's right up there along with all the Amazon Prime shows.

30:37Like we chose ourselves and didn't wait for anyone to pick us to be special. Like you could just pick yourself to be special. That's so inspirational. So what does that look like when you were in the middle of the kind of despair of having lost the money. We talked about how your creative process helped sort of pull you out, but how do you choose yourself when you're now responsible for others? You're maybe a parent, you've got a mortgage, like what does choose yourself look like in that stage of life? It's scary, but at the time, and sometimes it's out of necessity, nobody was giving me a job.

31:16Like everybody at that time thought this was this period when the internet bust, everybody thought the internet was a scam. And I didn't really have any other qualifications. And then I couldn't say, oh, well, I'm an investor because at the time I just lost all my money investing. Well, that hasn't stopped other people. We should be James, but you were a moral soul not to do that. Which maybe is my problem a little bit, but I always have to be good at something before I I could say I'm good, but I had to really learn and learn quickly. And then I had to come up with ideas for other people. I would send ideas to hedge fund managers or people who wrote in finance.

32:01I would send somebody who wrote in finance. Here's 10 article ideas you should write and I'll read them. Or to a hedge fund manager, here's 10 trading systems. Here's the software for those systems. I wrote it. Happy to show you how they work. And I would do this every day. and sometimes people would write back to me. Like one person wrote back and said, hey, these are great ideas. Why don't you write these ideas for us and we'll pay you. So suddenly, boom, I found an income stream. Another person said, oh, these are great ideas for trading systems. How about I invest with you and you trade them?

32:31Boom, another income stream. And I was able to just build up from that. So you were not measuring what you were not. You were really leaning into what you had and what you knew you were good at or were trying to do. Yeah. Put that out there into the universe. You have to move forward. You can't. I was spending too much time thinking, oh my gosh, I had won the lottery and then I blew it. Now what am I going to do? Like I was just, any time I started thinking down a negative path, I would say, okay, let's come up with more ideas for so-and-so or let's find other places where I could send ideas or other opportunities.

33:10And also I was day trading. And finally, I started to be good at it because I wrote some software to help me. And it was a horrible market, but I figured it out. That was a good market to kind of learn in. And then the same thing happened later. I went broke again after selling a second company. And again, it was just a matter of, okay, what are ideas for different things I could start or books I could write? or again, trying to find opportunity where initially I thought there was none. So no one was gonna hire me. Like no one was gonna say, oh my gosh, it's James Alvinshire. We better hire him.

33:52Like nobody - I feel like a lot of us have felt like that at some time in our life. And so I think that's gonna really connect with people because we, and there's, that's a horrible feeling to know that you have things to offer and people aren't, especially in this day of the anonymous resume, LinkedIn, when you're trying to change jobs or if you've been downsized. Listen, we've just heard about all kinds of layoffs in the headlines recently. If you're trying to reboot, you kind of feel like you're throwing it into the digital abyss. You know, there's like nobody. So the idea that you can take some control over that, I think is really hopeful, a hopeful thought.

34:29You know, we talked to Jared Dillian earlier this week as part of this, And both of you seem to be coming at this from his comment was, you know, people talk about in personal finance books, they're always telling you how to save money. You know, it's like, cut it out, save it, don't have a latte. And this approach about additional revenue streams or writing down these ideas and putting them out in the universe and looking for different is a different perspective. It's like one of abundance and more self-reliance, I think. Yeah. Yeah. And, you know, a lot of people kind of are split on this, you know, some people, you know, it really, you know, somebody was like, my, my wife will say to me, oh, you know, the Starbucks adds up or the, the, the book you wrote or the hotel room you stayed in, it adds up and it only adds up if you add it up.

35:25Like usually you've never noticed it. You never noticed this, that you, what really, what really is a problem is if you, you know, you can't afford a house and you spend$2 million on a house, or you shouldn't buy a car and you spend$90 ,000 on a Tesla or whatever like that. Okay. You could only do so much, but really savings. And I try to teach this to my kids. They're, they're very much focused on savings. I'm like, no, no, no, whatever you save now. Oh, you're going to save$5 ,000 this year on a 60 ,000 a year salary, whatever you save right now is trivial compared to what you're going to be making in just a few years, if you build your skills and your network.

36:07So you're set your$5 ,000 in savings that really cost you, you know, blood, sweat, and tears to save. Like you, you denied yourself, you know, that extra fun meal or night out with your friends or vacation or whatever, you know, it's going to be meaningless to you. $5 ,000. You're going to be needing to save, you know, a hundred thousand a year later, or maybe more, who knows. And so the 5 ,000 is meaningless. So yes, if you're about to go broke, try not to spend money, but most of, most of the time we just want to have more money. So it's really important then to improve your universe of opportunities, improve your, your way to get lucky.

36:47Like, you know, you, you always want to have, you know, luck is sort of created by the prepared. So you want to create, create, increase your opportunities for luck. That might involve spending some money in some cases. This is an amazing scene, and this is a horrible example, but in the movie Schindler's List. You remember the movie Schindler's List? Yes, I do. I don't know where this is going, but I can't wait to see. So Liam Neeson, who's playing Oscar Schindler, he's, in the beginning of the movie, he's dead broke, but he basically finds all the money he's hidden, like cash, around his dank room, and then he gets the nicest suit, and he takes all his money he has.

37:25He goes to the fanciest restaurant in Berlin where all the Nazi generals are hanging out and he lives large. He's a big, he pretends to be this big industrialist. He gets the Nazi generals hookers and buys their meals and gets them drinking. Next thing you know, he gets the deals to manufacture all the bullets in Germany. If he was worried about saving money before he went broke, he wouldn't have had all these opportunities horrible example but that was an interesting thing about i mean there's many interesting things that was one interesting takeaway but i would also say the example you just gave um of booking the flight to seattle right i'm flying cross-country is expensive but if you hadn't done that and spent that money then you wouldn't have met the people in person and it would have been a very different experience absolutely and that was at a time i was still back in my accumulation phase where i had gone broke a few years earlier and I still needed to kind of like build up.

38:22And my wife at that time was a little concerned. Like, are you sure you're going to just go to Seattle? It's like a thousand dollar round round rate ticket and you got to stay in a hotel. And, and like, you cannot, you cannot, you have to have an abundance mentality. It doesn't mean spend foolishly. Right. It was, I assumed my investment would pay off in the long run, which it did, uh, you know, sooner rather than later. And I think that's the approach you have to take. Like, I'm not just going to go and, uh, you know, I don't know, go on a vacation to the mall dives or whatever for, for no reason.

39:02Usually when I spend money, it's, there's a, there's a reason for it. I want extra comfort because I'm going somewhere on business or I want to, you know, see some opportunity while it still exists, but you cannot deny yourself. Um, particularly when it comes to small ticket items, that's just too much of a scarcity it is and when you're and we talked about this when you when when you're living in that scarcity mindset and you're stressed out all the time it kills creativity it yeah two things have a hard time coexisting so um again not to be frivolous about it but you're investing in yourself and your ability to be your best self um it's a different it's a different mindset if you're looking at it from a budgeting point of view uh sort of a a slight change in subject.

39:47But if we're talking about investing in ourselves, I know a lot of the conversation we have, a lot of the things people worry about is the cost of college these days. How do you feel about that? I don't think you're a fan. Is that right? Right. And look, I think now it's a normal conversation to have. Is college really worth it? I was a columnist for the Financial Times for many years. Every Thursday, my column would appear in the print newspaper. I assume we won't be able to say that at all. But I wrote in 2005 that college is just never worth it. And, you know, right now you see this, that every, you know, not public schools, like state schools, but almost every private school is like 60, 70 ,000 a year tuition.

40:36And, you know, from the smallest school in the middle of nowhere to Harvard, they're all around 70 ,000, 60 to 70 ,000 a year. And it's kind of ridiculous. Like college tuition has gone up faster than inflation every single year, not on average, but every single year for the past 70 years, tuition has gone up faster than inflation. And why is as, as our quality of our education gone up, you know, an extra 5 % per year? No. In fact, there's a lot of evidence to suggest quality of education's gone down. And also there's this kind of, you know, mythologizing of, of, oh, college education really gives you opportunities to help you make money.

41:19Not if you major in something that gives you no skills, uh, or there's nothing wrong, like there's nothing wrong with majoring in English, but you can also just sit home, sit at home and read a lot of books and then read the criticism of those books. Then you're going to learn more than what you're going to learn in an English major. So I think most educations you can get on your own. Um, I think college, you know, there's, there's so many examples. It's ridiculous. There's so many examples of people I know who didn't go to college or who dropped out. And then by the time they're all their friends were graduating college with$200 ,000 in student loan debt, they have jobs, they have no debt.

41:58They have, you know, they're on their way to success. They're starting businesses. So, I mean, I could go on. That's a whole other topic. Like I once wrote a book, 40 Alternatives to College, and it was the number one book on Amazon for books about college education. So people are looking for alternatives. Yeah, because it's hit the point where it's unsustainable. So I think for a lot of people, they have no choice but to explore the alternatives. But it's such a source of stress because we're just programmed here in the States to kind of think that this is the path to success. And look, we know school sucks.

42:32Like, why are we so excited about college? Like nobody enjoyed school from first grade to 12th grade or, you know. Oh, I'm living that right now. This is my conversation every night around the kitchen table, the futility of it all. And I think related to that is you got to be very careful too with home ownership because people think, oh, well, I own the home. I'm not going to flush money down the toilet by renting. But first off, let's say I'm just going to make up a number. Let's say buy a million dollar home. First off, you've got to put down at least 20%. So$200 ,000, that's gone. You had$200 ,000 cash, gone.

43:10And you're never going to get it back because if you sell the house, you're going to have to put down payment on the next house because you'll keep owning. And then you think, well, my mortgage is just X. Well, whatever it is, a million dollar house, maybe the mortgage is like 6 ,000 a month, something like that, I don't know. But then there's property taxes, which never go away. You could have your home paid off, but if you miss a payment on your property taxes, they're still going to take your home away. You never really own the home. Like the government will take it away. Either the bank will take it away first or the government will take it away.

43:44Then there's maintenance. Like you can't predict, oh my gosh, it's the summer and our air conditioning broke. $12 ,000 to fix the air conditioning. So you never really can figure out all the costs, not to mention the interest on the loan. Like a million dollar house is going to end up costing you after 30 years, like$3 to$4 million or more. And people don't take that into account. It's actually much, in many ways, from a personal finance point of view, not from, you know, we grow up thinking we need to own a home with the white picket fence. So I get that. And, you know, you need to set down roots for your kids.

44:17Want a nice yard in the suburbs, just harder to rent. Doesn't matter. I get all that. But from a personal finance point of view, it's often better. that money you would have put down, okay, it's nice to just have it as cash in the bank, because then you can sleep well at night and you don't have to deal with maintenance, property taxes, mortgages, anything else that could go wrong. And your inability to move quickly because you now own a place. So if you get a job somewhere else, you own. And so all of these other things, you can't really quantify what it means. But it's just that's another area where I would Look, and I have kids in college and I own a house, so I don't always follow my own advice.

45:03But there are choices. I think that's the message, right? That it's not programmed that you must live in debt that you can't afford, that there are alternatives that are at least worth considering based on your financial situation. It may be that you move forward, but that there are choices if you're thinking about what's best for you, which is what your message is. I mean, look, the average salary used to be what, like 5 ,000 a year. I'm talking about like the early 1950s or 40s. And the average house then might be, you know, 10 ,000. So two times your salary. Now, the average salary is about one-tenth the amount of the average house in the U.S.

45:49I think the average salary in the U.S. is like 48 ,000 a year. And the average house is about 480 ,000 a year. So there's a reason why these numbers keep spreading apart, because the institutions know that society has bought into this marketing fantasy that college is going to save our lives and owning a house is the dream, is the American dream. So they take advantage of that. College presidents know the government is going to lend 18-year-olds money. They don't have any problem raising tuitions. The government's paying the bill. they don't have no fear because the students, the government backs the students and they guarantee the college president's money.

46:29College presidents take no risk. So it's all about, you know, where the risks are and what the incentives are. So you always have to look at that in any finance decision. Yeah. My son recently asked me if I don't go to college, what happens to all that money? And I was like, you're asked smart questions. This bodes well. So you, you know, So these are all things you've learned through your journey. How would you describe your relationship with money now? Since you've had it, lost it, had it, lost it. Where are you now? I think, and it's very hard to have this kind of relationship with money because society is programmed differently.

47:07But I think to myself, what do I really want to do with my life? What do I love doing? And in some periods, I have to make more money. in some periods, money doesn't matter as much because I accumulated it or whatever. And it's really important for me to always do what I love doing, to choose myself, to choose what it is I'm going to try to succeed at. And sometimes you have to do it when you have other things going on, like job related things. But sometimes you could, you accumulate enough money and you could do what you want to do. And I never think about where I am on the money hierarchy. Oh, I don't have as much money as some other businessman that we started out at the same time.

47:52He built up a much larger hedge fund. And I could think to myself, the guy's a criminal. How does he do that? But at the same time, he's doing what's for him. And I'm doing what I enjoy. Particularly as you get older, you think, well, what am I going to really do if I have$500 million? There's nothing there's nothing different I'm going to do. Like one thing I've noticed about money is that I always ask people, what would they do if they had a lot of money? And they say, well, if I had a billion dollars, I would do this, this, and this. And I say, you know, you can do all the things you just said with 10 million.

48:25Why do you need a billion? Well, don't you need a billion, you know, to buy a private jet for a hundred million. And I'm like, yeah, but for 500 ,000, you could, you know, be part of net jets and just fly whenever you want on a nice big jet and you're okay. Like, what did you need? Why do you need to buy the Boeing 747 for? You're not Larry Page or Elon Musk. Plus they crash all the time. Those private jets. That's what I, that's my excuse. They do. They do crash more, but then you go to the Island of Lost after they crash. Yeah, that's right. That's right. Do you feel like you have any fear around money anymore?

49:04Like was the process of losing it a couple of different times, losing a fortune a couple different times. Did that free you up in some way? Or do you still get that? Oh no, the sort of gauge is running low again. I'm sort of burning through it. I got to make it back again. Yeah. I get that fear. Fear is healthy, right? Too much fear is not healthy, but fear is how we survived as a species. Oh, there's potentially a lion over there. Don't go over there instead of just ignoring the fear. And I think the big thing, the big skill involved in keeping it, which is a skill I had to learn keeping the money, is how to understand risk.

49:43So whether you're starting a business or making an investment or whatever, the idea is maybe 10 % of the job. Oh, I have a great idea. The other 90 % of being successful as an entrepreneur or an investor is understanding what are your risks? How are you mitigating the risks? Okay, a month passes. What are the new risks? You're constantly evaluating the risks. The idea is good. But then succeeding is all about understanding where the risks are. And you have to have a good sense of fear and balance to be able to understand what the risks are in whatever you're doing. That's so wise. Do you feel like that your skill now at understanding the risk is good enough that you can avoid another?

50:32Like you think you're good? You think you visited that sort of bust and bankrupt enough that you, that's it. You're done with that. I think so to some extent. Like I remember before the pandemic, I did not necessarily predict the pandemic by any means. A lot of people were like, oh, we saw this coming. But one thing I did see in January of 2020 was that China already was so afraid of this pandemic. And again, I didn't think it would hit the US, but I did see that China was closing all their factories. And just a minimal amount of research showed that, oh my gosh, I didn't realize China is like 99 % of our supply chain.

51:14They make all our clothes. They make our drugs for pharmaceuticals. They make our computers. They kind of make everything. So I was advising my friends who are in business, listen, you might need to buy a year's worth of inventory right now. And some people thanked me later. Some people said, I wish I had followed your advice because the entire supply chain of the world shut down for a year. Again, I didn't think the pandemic would hit the way it did. I didn't think the economy would shut down. This is in January 2020. But I did see that there was this big risk happening. I remember one night I was just up all night, kind of worried about these risks in not only my business, but other businesses.

51:54And I think it's a healthy thing and I hope I never lose that sense of risk. Well, I hope so too. And you've had such an incredible journey, James, and so grateful that you take the time throughout to share it and came on with us again to drop some of that wisdom on us. We appreciate it. Well, thank you for having me on. And I always like the structure of your show and you always get interesting things out of me. I really like that. The last one also, my life in four trades is such an interesting filter as a way to look at a life. And you're always creative at how you do these. Well, thank you so much.

52:33And I love that so much of what you talked about is so aligned with what we try to do. And there's a way forward. And I love the hopeful message of it. And I love the idea of choosing ourselves as a way to get to where we need to be with money and finances. It's got a hopeful message and we love that. So thank you so much. Thank you, Maggie. I appreciate it. All right. Take care, everybody. We'll be back later today.

53:00We hope you enjoyed this episode. At Real Vision, we arm you with the expert knowledge, time-efficient tools, and a powerful network to help you succeed on your financial journey. Get a taste of financial freedom with our free offer at realvision.com forward slash free.

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