Ramit Sethi - Is Starting A Business Really The Best Way To Get Rich?

25:20What do you think? I want to hear your take on this. I have a quote. I'll speak for myself first. And then what I've noticed in the tens of thousands of students that we have, you know, those key cards that people wear when they are badging into an office. I hate those. Like I hate retractable. Yeah. They feel like shackles. Yeah. And early on, I decided I'm never going to wear a key card and I'm irrationally angry. Like you giving me a key card. I don't want it. I find that a lot of entrepreneurs have some irrational hatred of some part of corporate societal life. You're telling me I have to ask for vacation time.

25:59I'm a grown adult. And I like that. I go, yeah, tell me more. Tell me, why do you hate it? Because sometimes starting a business is as simple as I don't want to do that. I shouldn't have to ask for that. I don't want to have to wear that. Cool. That is a perfectly valid reason. I do think as you get deeper into business, you come up with more meaningful reasons. Like I enjoy the high stakes part of making decisions and being accountable for it. When I started Growth Lab and I funded it and I staffed it and then I made a mistake, I had to own it. There's nobody to blame. That was me. On the other hand, when I make a good decision and the team helps, yes, of course, the team deserves a lot of credit.

26:42And also I go, yes, that was a good decision. So I like the high stakes nature of business. I also like that just like when I was in high school, if I work hard and I make the right decisions, I can be more successful. More successful might mean more money. Look at where we are right now in Tokyo, means more freedom. It can mean whatever your rich life is. So I like all of those qualities for me. As for others, what I've seen with successful entrepreneurs is they have a lot of resilience and probably they've been resilient since they were kids. It's very difficult to become resilient later in life.

27:19You can do it. It's just way harder. They've been beaten down or failed or something has happened. Yeah. Yeah. And so I like seeing resilience in people. I notice it in entrepreneurs and they are willing to try things that are uncertain. Like if I go to Chipotle and I order a chicken bowl, I know exactly what I'm going to get. There's no uncertainty there. Starting a business or creating a YouTube series where nobody's watching, that's uncertain. And that's scary. And entrepreneurs tend to be more comfortable with that. I'm trying to think about why I got into entrepreneurship. Yeah. Well, you were doing car sales.

28:00Well, my dad was, and I was in teaching. So I actually resisted business in the beginning because I saw my dad in sales and I thought there's a lot of up and up and down in sales. Like one day, you know, one summer we'll have a summer vacation at Disney World. The next summer is in the backyard. Right. It was just a lot of, you know, up and down and a lot of vitality, not vitality, but well, velocity. Volatility. Volatility. Wait, but you did not like that. I didn't like it. And I wanted something stable. And that's why I went to teaching. And then some of that stuff seeped in, you know, because I was washing cars at the wash bay at my dad's dealership at 13.

28:37So from 13 to 18, I was going to work with my dad, and I used to watch my dad sell. I used to be around sales. And I have a love affair for cars. That's a different story. But I just love this concept of how can I help other people make decisions? That was kind of an interesting kind of take that kind of seeped in. But then I was like, no, I want a stable job. I want something that is just going to pay the bills. to have a good life. You know, I don't want to go into the military. I don't want to be a doctor teaching. Everybody needs teaching, you know, this is before AI and I went into teaching and, but somehow I, the internet came around 2001, two, and I thought, let me experiment.

29:21What is this internet thing? Can you make money on this thing? What? And my first sale, first dollar online was arbitrage basically selling rare air Jordans to people that wanted rare Jordans. And I was like, this is crazy. You could just make money outside of a salary somehow like this. But for me, my biggest why was I say this a lot because I'm not really ashamed of it is because money was not talked about when I was growing up. And there was a lot of stress around money in our family. You know, immigrant family worked hard, just never was able to kind of get in front of the eight ball. Right.

29:55Just constantly, you know, pushing things along. and I wanted to feel what it feels like to be financially free. What did it mean to you? Like, did you have a vision? What was the thing? Yeah, my vision was I want to be able to buy things without looking at the price tag. Like what? Anything. Like a meal out. Which meal? Like a nice dinner out. Like if I wanted to go out for an anniversary dinner, if I wanted to go out for a birthday dinner, I didn't want to have to worry about like, you know, this is going to cost$200,$300. Did you guys order drinks when you would eat out as a kid? Never. Yeah.

30:31Water. Immigrants don't order drinks. At least they didn't used to. Well, appetizers too. Dude, I never ordered appetizer until I was maybe in college. Yeah. So this is why I love what I do, which is going deeper and being like, what did you want to buy? No, what kind of meal? No, what part of that meal? Yeah. Because it's everyone who has a reason that they started a business or excelled in their job or became physically fit. There's something very vivid and visceral. For me, we rarely ate out. When we did, it was when we had a coupon to a pizza place. And we would order, you know, like two drinks for our entire family to share.

31:09No appetizers. And my dad would give us like two quarters to play the video games. You know, that was it. But so for me, being able to order appetizers feels incredibly rich. Beyond the amount of money. If I see two appetizers now, I get them both. If I eat out with my team, I always say, hey, the only rule I have for eating out tonight is whatever you see, get it. It's on me. And the ability to be able to sit down and order anything you want, what does it cost? 50 bucks, 100 bucks, 200? And it just feels incredibly rich. That's because of the way I grew up and I think similarly how you grew up.

31:46So there are these moments when you look back, why am I doing this? And it might sound silly, oh, because I want to be able to order a drink or appetizers, but it's actually really meaningful. Yeah. And that kind of leads me to something I want to talk about with you is, does money solve your problems? You've made it. You are financially independent. And you've gone through the whole experience. You've grew up and shared some stories. I have my own opinions on this. But I want to hear from you. Do you think that money solves a lot of problems? Do you think it buys you happiness? What does money do for you?

32:20Money can solve a lot of problems. I think that money in America, specifically, most people agonize over the saving part of money. They're taught about saving, save, save, save. Some people think about managing money, like investing. Almost nobody teaches you how to spend money meaningfully. And because of the way I grew up and the success that I've had, thanks to a lot of luck and my team and the people around me, I have gone through that entire gamut and I spend a lot of money and I spend it meaningfully. So for me, it is incredibly rich to be able to come to Tokyo and stay for an extended period of time.

33:01It's incredibly meaningful to be able to hire a personal trainer, therapist, personal assistant who manages my life. Those things are meaningful to me. For other people, they're like, I don't want a personal assistant. That's weird. And I don't want somebody in my house cleaning or doing any home services. I want beautiful clothes or I want an awesome car or four cars. Great. I don't mind that at all. I love hearing people's money dials, the thing they love turning the dial up on. But I will say that when you learn the skill of spending money meaningfully, it's incredibly eye-opening. When I ask people, what's your rich life?

33:40they almost always go, I want to do what I want, what I want. And I'm like, God, not again. I'm like, okay, I'm a professional. Be polite. I go, wow, so fascinating. So what do you like? And then they look at me stunned because most of us have never actually thought about what our rich life is. Imagine that. People listening, working, starting a business, building income. And I go, what's your rich life? What is it for? And they go, oh, I don't know. I like to travel. I go, okay, that's actually great. Where? They go, oh, you're up. I go, what seat on the airplane are you sitting on? What are you going to eat?

34:18How are you getting from the airport home? Which hotel are you getting a tour guide? Is it a private tour or not? Any answer is acceptable. It's your rich life, not mine. But I want to know the vivid details. That is what creates a rich life. And your rich life is yours. And my rich life is mine. I think this idea of being rich is like a blurry picture for most people. They don't understand. First of all, like, what does it even mean? And obviously there's levels. It's almost like saying like, I want to go to space. It's such a big dream for a lot of people. Most people, I would say that they don't even think about.

34:52So what do you want to do in space? Why do you want to go to space? Like, and this is the thing. You're so right. If you are working hard and part of the outcome that you're trying to build is more money. First of all, there's no shame in that. If you generate income, and especially if you have customers pay you, customers do not trip and fall and swipe their credit card. Nobody does that. You are providing value, creating amazing products or services for them. Great. So that's awesome. Now, what are you going to do with the money? I actually think it's unacceptable to simply get more and more money and store it in a savings account and then just accumulate more.

35:26What are you, a hoarder? What kind of empty life is that? Instead, if you say, I love antique woodwork in Kyoto, and so we are doing an antique tour in Japan with a local tour guide, and we're going to find these beautiful pieces, which we're going to preserve on and on, that's meaningful. Or, I love a car. Why? I love it because when I grew up, we couldn't afford it, et cetera, et cetera. Yeah. Amazing. Also amazing. But you've got to have a very clear vision, and then you've actually got to start living it. So maybe you can't afford a$200 ,000 car, but you can rent it for a day. Great. A thousand percent.

36:06This is going to sound kooky, but I really believe it's very hard to actually make something happen if you can't imagine it in your mind first. Like one of the examples I'd like to give to explain this point is like if you've ever gone on a holiday, right? You don't just show up in the Bahamas, right? You had a thought in your head. Maybe we should go to the Bahamas. What does that look like? You Google it. You look at some pictures. You maybe look at the hotel prices. You look at the rooms. What do the flights look like? This whole process is creating this image in your head. So it's not like I'll believe when I see it.

36:39You got to see it to believe it. You got to see it in your head at first. And then I didn't get this at first. And then when I started seeing myself rich, then I started to figure out how to get to the point where I needed to go through my business, through whatever we do. What did it look like when you saw yourself rich? That's a great question. It looked like, first of all, I was smiling. Whoa. Okay. I wasn't stressed. It looked like me being able to spend on others, help my family, go on a holiday together, go business class because I'm 6 '5 and it's really uncomfortable in economy. So these are the types of things I wanted.

37:17Right. And I started to imagine these two. Okay. Imagine I never had to fly economy ever again. What would that look like? And it's just like normal. Right. And then I always say like the how is actually quite easy. The how you'll figure out once you have the clear picture in your head. What are some of the first pictures of your rich life? My pictures were unlimited books. So when I was in college, I had a scholarship where I could go into, they paid for everything, where I could go into the bookstore and I could buy any book, academically related or anything. and I just take it over to a different desk, not the normal desk people check out in.

37:57And I tell them my name, show them my idea and walk out. And I was like, this is like Willy Wonka's candy store for somebody who loves to read. So I bought like so many books over the course of five years in college. And when I graduated, I told myself one thing I want to preserve. I don't have the scholarship anymore, but one thing I want to preserve is unlimited books. So I gave myself Ramit's book buying rule, which says whatever I see a book, if I'm even marginally interested in it, buy it. Don't even think twice. Don't look at the price. That's it. So that was one of them. I think being able to buy appetizers was another one.

38:34And like in my early twenties, it was quite small. It was being able to take a taxi in New York in August instead of the subway because it's really hot. This is how small my dream was. But when I hear people and they talk about their rich life, often their dreams are quite small and I don't mind it. I go, yeah, that's how you start. There's no way I would have dreamed about traveling for months at a time and now I love beautiful hotels and staying at this hotel and that and taking a tour of the property with the general manager. I didn't even know that's possible. But it took steps of being able to happily pay for a taxi and then build on that to see what is possible.

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42:05And they are on social media and they're fed all this good stuff, some garbage. We talk about how as much as possible, you and I try to be good ambassadors of the Internet, but there's a lot of bad actors out there. So we're going to play a little game. OK. OK. So this game is called Scam Relegit. Wow. Wow, I was born for this. Tell me. Because apparently everybody can make a million dollars in a week. That's what they tell me. Apparently, after the second week, they ship you a Lamborghini. The world just ships you one and it comes in a crate. So what I'm going to do is I'm going to give you a scenario.

42:41I'm going to give you a prompt. And you're going to tell me if it's legit or a scam and why. Okay. First one. I want to quit my job to start selling supplements. Scam. Next. 99 % of supplements are scams i don't even need to know anymore please stop there's like two supplements that matter and the yes they are a high margin business for sure for sure you make a ton of money but why are people going to buy your supplements versus because my cousin told me about it i gotta sign up with it's so cheap yeah i got my affiliate link yeah great you're scam. Okay. Some guy that drives a Bugatti and smokes cigars told me I need to buy his course on buying real estate.

43:24Scam. I don't mind the Bugatti and I don't mind the course, but when you combine that with real estate, it's a scam. 100%. Real estate in itself is not a scam, but all three of them, scam. Okay. I'm thinking about consulting part-time, doing what I do at my job. Yes. Legit. Okay. But you know what? Scammers, you could tell Well, because scammers don't use the word consulting. You know why? Because consulting means work and scammers don't want to talk about work. They want to talk about Bugattis. What about selling an online course on how to play your own vegetable garden like mine? Yes. Legit.

44:01Cool. NFTs. Scam. I mean, it is so funny. My favorite part of it, of the whole NFT thing is how people used to change their Twitter bio to their NFT or... Yeah, whatever. And then one day it just like vanished. They all just like quietly took it down. This is my favorite part of survivorship bias, which is when people are scamming, they talk about it incessantly all the time. And then when it doesn't work, like when they buy some crypto coin and it goes to zero or whatever scam they got involved in, they don't go, Hey, everybody, here's my logical analysis of why I went wrong. They just never talk about it again.

44:40Classic mutual fund companies have been doing this for generations. They create 15 mutual funds. 10 of them are ****. They take them out back, shoot them in the head, and never talk about them again. So the only ones remaining are the five, five-star, amazing, outperforming mutual funds. This is called survivorship bias. It is well known in the investment literature, and it's used by scammers all the time. Creating passive income, creating AI-generated videos on YouTube channels. It could be legit, but it's 90 % a scam. Let me tell you why. It could be legit because learning how to create videos through AI, very valuable and probably part of the future of what people are going to be doing.

45:21Learning how to use it to create income could be valuable, could be legit, no doubt about that. But you're now in this constellation of people who promise you free passive income with no work. So it's like walking into a casino full of mobsters. Like, could you make money? Yes, you could. but you need to be aware of what's going on right now. I like that analogy. Writing books on how to take affordable vacations with your family. Legit, but a horrible idea. People who want to take affordable vacations don't want to pay for an ebook on it. Do not target markets that don't have money. It's just not a good, not with having to pay.

46:04They will perhaps click ads. They'll do an affiliate type of thing where you could make money on an affiliate. But if they're looking for affordable anything, you probably do not want to charge them for that. I love it. Last one. Creating a coaching business around what you already know. Yes. Legit. Coaching takes work. Easy way to find clients. It's quite straightforward to identify somebody who has a problem, charge them a reasonable amount, even a premium amount, deliver value to them and transformation. Rinse and repeat. You have a$100K business,$300K business,$500K business, million dollar business.

46:44That's great. Wait, how come we don't talk about my own site? Because if you identified it, it sounds like a scam. Guy who creates books and courses on getting rich. And I'm like, scam. It sounds like a scam right there. What's the distinction? Why is it not? Let me try to answer it. One, if you read any of the material, within two seconds, you realize, oh, this takes work and it actually delivers sensible results. Two, just Google people's name. Are they legit? For example, there's a reason I talk about going to Stanford. It's not my ego. It's that in order to go to Stanford, you probably have to have worked hard, be smart, be able to follow through on things.

47:24But I will admit, if you just look at the surface of something called, I will teach you to be rich, kind of sounds like a scam. Sorry, guys. The difference is that I think, and you need to be able to spot this difference, is that what you teach requires, like you said, hard work, but also requires time. Yeah. You know, it's going to take time, whether it's your investment advice, whether it's building a business, whether it's I know that you sold courses on how to make money on the side. Yeah. You know, it's going to take a bit of time. And the reason why it's going to take a bit of time is because, one, you have to get better.

47:58Yeah. I think a lot of people don't realize the fact that when you start anything, play any kind of sport, play any game, including the game of business, you have to, one, get better at the thing that you're doing, but also get better at this idea of business. And that takes time. And I think that a lot of people just discount that. You know what? I'm so glad you brought that up because I think a lot of people, they're like, is Omar the right person to learn from? Is Ramit, is this person, is this book good? And those are valid questions for sure. You should be thoughtful about who you learn from.

48:27but also you should take a look in the mirror and ask yourself, am I ready? Am I coachable? Because there are a lot of books that are very good, but are you coachable? I remember when I first decided to get fit, there was a gym across the street from me. I was living in New York and it took me four months to get the courage to walk into that gym because I wanted to hire a personal trainer. It had nothing to do with money. I had the money, nothing to do with time. I had the time. I knew that once I hired a trainer, I had to take it seriously. And so when I finally, four months later, got the courage to walk in, I go to the front desk.

49:04I go, I want a trainer. He goes, all right. He literally pulls the next trainer walking by, pulls him. Guy goes, what are your goals? I don't know what my goals are. I made it up. I go, I want to gain 10 pounds of muscle. Where did I come up with that? I don't know. I just made it up. And the trainer looks at me and goes, okay, you're going to have to stop doing cardio. We're going to start doing this and that. And I looked him dead in the eye. I said, I'm ready to do whatever it takes for as long as it takes. I was coachable. I was ready. So sometimes it's not about, is it the perfect trainer or the perfect book or course?

49:34Those matter, but am I the right student and am I coachable? That matters more. We're here in Tokyo, Japan. You're spending an extended amount of time here in Tokyo. And we had a chance to meet up here and do this interview, but also hang out. One of the things that we discussed while we're hanging out is like, what's happening in your business right now while you're out here in Tokyo? And you said, oh, the team's taking care of it and they're working on it and all that kind of stuff. And I love the fact that you empower your team, but we know that didn't just happen overnight. What was the first hire you made to start that process where you have a machine that's running for you so that you can travel the world?

50:12The team is handling it amazingly well for months. So I'm not working and I get a status update once a week. Here's what's going on in the business. It has some links in case I want to double click in and see closer numbers. And at the bottom, it just says like what we need from you. And usually it's like one thing, we need an answer on this. But so I might spend 10 minutes on it. I know what I need to know because of the status updates and the team is just awesome. It was not like that when I started in my twenties, I did a lot of stuff on my own. I took it on my own shoulders and I didn't travel a lot.

50:52In fact, I had this existential crisis about traveling because I'm like, this business is going to collapse without me. A lot of hero idea, like nothing can survive unless it's me. And I finally took a trip for two weeks. Like that was a big deal for me. And the business went on. it went on. Maybe it didn't grow as fast in two weeks, but it still existed. And I'm like, oh shoot, am I not as important as I thought? And it was quite humbling. I love that moment when you realize like the world goes on, you're not that important. So I loved when I traveled, I loved it. I really fell in love with traveling.

51:29And so I started to say, okay, what's it going to take for me to do two weeks every year? What about three weeks? We went on our honeymoon, we went on a six week honeymoon. Didn't work. And, um, oh, except for one thing, I did have to finish up part of my book on safari. I was not happy about that. And so just travel. And now we have this entire operation. So I would say that the first hire I made was an executive assistant. This was in 2006, like early, early. I was the only friend of mine who had an assistant. They all thought I was trying to show off. I'm like, guys, it's not a showing off.

52:04It helps me run my life. But since then, you know, we have leadership team and everyone's kind of dialed in, in the org. Okay. So that first hire the EA, what are the first things you took off your plate and gave to the EA? Amazing. I love it. So, uh, any travel arrangements or meeting arrangements. And I did this in the following way. I had a list of three different places that I meet people. One was a casual coffee shop really close to me. One was a dinner spot in case I had a dinner meeting. And the third was a little bit more of an elevated place to meet in case I was meeting someone who's, you know, a little bit older or maybe more established in their career.

52:44So I wrote down the instructions in a SOP and I was like, here you go. You now know my schedule. You're responsible for it. That immediately shaved off hours per week because I was doing a lot of meetings. So that part, then eventually now I have an amazing executive assistant and she manages travel. She manages some of my personal coordination, ordering things that need to be replenished, interfacing with different vendors. Okay. If I'm going to go back to LA, we need to spin up everything there. So when am I getting a haircut? What about training, et cetera, et cetera. So outside the EA, what was the next hire that gave you the biggest ROI?

53:25tech integration. Back then we didn't have integration for this stuff. And even today, it's not easy to make it all work together. Your shopping cart talking to XYZ. That was a great hire. Are you an Infusionsoft baby? Don't say that word. It cost me millions. Wait, are you on Infusionsoft? No, I'm not, but I was familiar with a lot of friends. Dude, I feel a chill going through my body right now. If you say this to my team, they'll all just look at you like they saw a ghost. Yeah, we were on this software as a lot of people who kind of grew up in that generation and it made a lot of promises.

54:02And then, you know, it was okay, but we had to get off it and it costs millions. I have spent millions of dollars on technology mistakes and just technology transformations. And so please listen to me. Here's my lesson to everybody off the shelf as much as possible. Don't do anything custom, Find a software that has the most number of users. And if it does at least 80 % of what you need, just take it. Do not go custom. It will cost you millions. It costs me millions. Don't make my mistake. Yeah, I agree with 100%. We've redid our website and our technology a bunch of times. And the best ones are the ones that just work seamlessly and you don't have to worry about it.

54:40It's like buying appliances. You might want to have the fanciest one. Just get the one that you can replace at Home Depot and just simple, simple. Everybody has it good. Exactly. Because at the end of the day, you want as least friction as possible for your customers, for your team, because they're going to save hours of time and money and all that kind of stuff. And if more that customers can do on their own, whether it's like, you know, check out, buy, there's still people that I don't know why they don't allow people to buy online. You have to like make a phone call. But are we here in Japan?

55:11That's like 90 % of the places. Let's talk about that. Oh my God. What are you learning in Japan? Dude, it's so awesome here. First of all, like I think every American comes here and the first time they come here, they all take the same videos, which I did myself. Oh my God, 7-Eleven is so amazing. Like, wow, it's so clean. Like, okay, cool. Did that. That's great. Being here, having come here many times, I think this may be like our 10th time and we're here for a long period of time. I love being able to go deeper. So like right now in particular, it's very tempting. A lot of people are posting about how cheap it is in Japan.

55:48Okay. Yeah. Currency and things like that. But I think once you are here and you're talking to people, you realize there's actually a major issue, right? If you're earning wages here, it's really difficult and there's inflation issues and cost of living is really high. While it might be great for Americans, it's not great if you're living here. And so actually I'm not posting videos about look how cheap it is. I don't really think it's appropriate. I do love and have always loved, but now love even more the craftsmanship and focus on detail. Everything from how somebody might walk you out when you buy something to just the thoughtfulness of the experience in a restaurant.

56:27We absolutely love it. We love the design and we're into design and furniture. And so coming on this trip, one of the things that I talked to my wife about was, you know, buy. We don't buy things. We don't buy anything. We, we pack with pretty much carry on and we come back with a carry on. We usually have nothing from our trips. We love the experience. We love the food. We like the videos. That's it. I was like, you know what? I think we actually should buy a few things when we're here. We love Japanese craftsmanship. We love the design and it's time for us to start remembering some of these amazing trips we've taken through the things that we have at home.

57:06As an example, we have these, you know, beautiful coasters from Rwanda. We remember those every time we put our coffee mugs on them. And so we're looking at those things and we're trying to go deeper and meet some of the craftsmen who make it, maybe get something custom made. That's been really meaningful for us. That's beautiful. One of the things I love about Japan is the attention to detail. Everything is thought out. Everything is... I'll give you a small example. Nicole and I and some friends were at a department store and there was like a food hall down below in this department store and you can buy some food and you can, and they have these plastic bags where you can put the food in the plastic bag, like you'd normally see in a food hall.

57:46Yeah. Those plastic bags are notorious. It's hard to open, right? Like they're kind of sticky. And usually you'd lick your fingers and do that. Yeah. But that's gross. Yeah. Right. So they had like a roller ball that's wet that you can just do that to open up the plastic bag. Oh my God. And it's just like, this is a refined culture. This is, this is, this is like, why do we need to lick our fingers? Yeah. You disgusting barbarians. Exactly. I would say that invent a rollerball. How could you not have done that? Exactly. Wow. I love that. I mean, I always say that when the Japanese travel, they must think we're animals.

58:19We think the same thing. Like what must it be like to come to New York and there's trash and there's people screaming, but I do think it's a, you know, it's kind of a cool experience, but I always, always am wondering the same thing. And now I have a newfound respect for all of my Japanese friends who moved from here to the U S cause that's not an easy transition. It's very different actually moving from anywhere to the U S is easy. Um, but there is a lot of rules here and that doesn't jive with my entrepreneurial DNA. Yeah. Like I had this restaurant that we walked to the other day. It was like 90 % empty.

58:52And when When I say walk there, we got there at 5.05 PM. Okay. No reservation. And we're like really hungry. And we're like, um, any, no reservation, any chance we can sit down? And they were like, sorry, we're booked. And I was like, like, I'm like, I could literally be in and out of here by 5.25. Like I am a fast eater. Nope. And I was just like, all right, rules are rules. Yeah. The letter of the law is really respected here. Yeah. Yeah. But like for for an American, it's the first time that you encounter something where people do not respond purely to capitalistic tendencies. You're just like, what?

59:29You can't make a reservation for like 830. It has to be eight because the timing of whatever. And then we go to the restaurants empty. It's like, OK, so why why can't we do 830? Like, yes, because that's the rule. So how do you respond to that? I just follow the rule. Yeah, because I'm a visitor here. I have to respect. Yeah. Yeah. In America, we'll do whatever it takes to make the next dollar, but in different cultures, that is not the case. And it takes a readjustment. So when you go to a restaurant and they're just like, sorry, and it's empty. Yeah. I think the first reaction is like, what the hell?

1:00:02But I agree with the way that, yeah, the way you respond is the right way, right? It's not our culture. We have to respect. And I think it's healthy to go to different cultures, different countries. So you can experience that. And you know, a lot of that is this idea of following the rules as being risk averse and understanding that some people have a high tolerance for risk and will do anything to earn another dollar. And that's kind of applauded in the US and in Western countries. But I think in Japan, it's more like how are you contributing to society is more of the big flex here. Well, that's why coming here is so inspirational from a business perspective.

1:00:40So when my wife and I travel. She's an entrepreneur as well. She's a personal stylist. Oh, you know, you've had her on the show. Yeah. So she and I both study how does hospitality work? How does business work? How do restaurants work? And then we take that back to our own businesses. So for example, the idea that you don't actually need to be chasing every marginal dollar. Just know the kind of craft that you're in. And once you have done it, run it your way. That is an amazing part of business that you would not know if you only go to Burger King and Chipotle where they're going to serve it your way.

1:01:16Maybe a business doesn't need to serve it your way. Maybe they actually want to do what their vision is and that's how it's going to be. Or maybe they're going to charge a very high price and they're going to serve this many people per day. And once they're done, they're done. Yeah. You know, I was in SaaS for 10 years. We are a software company and we exited. But one game that's played in SaaS a lot is pricing and figuring out like packaging and add-ons and figuring out like, let's put them in tiers. And if you want this feature, then you're going to have to upgrade. And it was sometimes overcomplicated.

1:01:48And we even got to the point where it's like, okay, this is a little bit too confusing. And people are like bouncing in the checkout process because they're not really sure which packages you go, which plan is best for them. And there's a rule in business I repeat over and over again is that a confused mind never buys. So you need to be really simple. And then we really simplified our pricing page and our plans and it really helped our customers have a more, you know, a pleasant checkout, but also not buy something they don't need. Okay. Such a great mental model, which is in the Western world, we would prefer to add more things.

1:02:26Oh, I'm not feeling well. Give me a supplement. Give me this drink. Give me this more, more, more. Oh, I need something in my house. Buy more stuff in other cultures. Let's subtract. Let's subtract. And that's really hard for us raised in the West to do. What do you mean subtract? Well, what about this? Well, what about if I need this one room in my house once a year when my family visits, how can I subtract? We feel this need that we always have to keep something in reserve here when we're shopping for food, we're buying enough strawberries for that day. And my wife and I actually had a lengthy conversation about, could we recreate this in the U S the idea of going out and shopping every day for just what we need.

1:03:09We thought about it. And even though we live in walkable communities, the infrastructure is not set up for that. Like, uh, there's a farmer's market, but it's not that often. And when you, and the fridges are enormous, whereas here they're much smaller, like the whole infrastructure and cultural worldview is different. I like that because it forces us to think, why do we do what we do? Right. And is it good? Is it what we want? And maybe we don't, maybe we do like it. I do like buying a big old thing from Costco of yogurt. Yeah. So I don't have to go back like every single day. I love that. I love you, Costco.

1:03:45But there are certain things where when we go back, we're like, we don't really want to do that. Yeah. I would say the most, you know, the average American doesn't know what fruits are in season. No way. Because it's available all the time 24 cent great example yeah yeah and they're all slightly mediocre or very but you can get them all the time yeah i know last night we're eating yakitori and we saw this eggplant and the eggplant was like very modestly sized and i was just thinking like the eggplant that we have is this big it's like a pumpkin i wanted to bring it and show it to the chef and be like have you ever seen an eggplant this big like i wonder what his reaction would have been it's so big yeah different for me you love coffee let's go grab a coffee i'd love to let's go all All right.

1:04:25For me, let's have some coffee. Let's do it. Speaking of coffee, a lot of people think that the way to get rich is to save money on coffee. First of all, if you enjoy your morning coffee, these are tiny, tiny expenses. If you add them all up, even invest the money, it doesn't turn out to be that much. More practically, people are not going to stop drinking coffee and then take that$5 every day and invest it. That's just not how people work. So it's this mathematical argument that simply does not fold up to human nature. It doesn't work with habits. Yeah. Yeah. I would rather people say, okay, what do I enjoy about my coffee?

1:05:00What kind of coffee beans do I love? Am I going to the coffee shop for the experience? Whatever. Okay. If you want to do great, but I'm also going to automatically invest 15 % of gross income or 10%. Great. And I'm going to automatically say, focus on the$30 ,000 questions and not the$3 questions. So you've been talking about money and wealth for over 20 years now. Okay. What are some things that you've changed your mind on? Maybe even recently. When I started out, I remember writing a post on how one hour photo development. Remember when we had to take care of Phil to go down? Yeah. And I was like, what a waste of money.

1:05:40You can wait three days. What's the rush? And although we don't do one hour photo development anymore, I think this idea that I would look down on people who spend money on freemium services, even sitting in business class. I'm like, we're all getting to the same place. What's the point? And just quadrupling your spend. I wish I had walked past them on the airplane and thought to myself, why are they spending this much? If we can afford to sit in the front or the back of the pay, why would someone choose to spend four times enough? It's not that they're getting there faster. It's probably not because of the food.

1:06:19What are the other reasons? And I think that what I talk about a lot now is first, you have to automate your money, savings, investments, spend money guilt-free as well. Yeah. But as we start to accumulate more, there's a full different world at thinking about money differently. You should not be approaching your money the same way when you're 40 and an entrepreneur as when you were 20 and just get a stud. It's actually not okay to be looking at these exactly the same way because your financial status is different. One of the things that I learned through entrepreneurship that really I changed my mind about is like growing up, you know, we both have immigrant parents.

1:07:02Hard work pays off. That's the that's the motto, right? work hard, that's how you earn more money. You start to realize that that takes you to a certain point. Like there's only a certain number of hours you can work. And then you have to start figuring out how do I take things to the next level? And what I realized is that like, oh, I have to make money work for me. How do I take my money, take the things that I took my hard work, I turned that into money. Now I got this money. How do I make that money, make more money? Yeah. Right. Yeah. And so things like investing is an example, hiring people for your business, hiring the right people, putting them in the right position.

1:07:39Also just being clear about how much money do I need to make? Like at a certain point, you can just be working for the sake of working or building your business for the sake of building business, but what do I actually get? This is a philosophy every entrepreneur should ask themselves. Put your hand down, palm up and say, what do I get? What do I get for taking these risks for working weekends and nights? What do I get? And the answer better to do something that really drives me. So I get to be able to buy a beautiful coat in Kyoto without looking at the price. That's what I get. That could be it.

1:08:12Yeah. Or it could be that I get to pick up my son or my daughter from school every weekday. Yeah. Because I have the flexibility as an entrepreneur. I love this question. What do I get? Because this is a question I and Nicole asked for 10 years when we were building our software company when we were a ninja because a lot of sacrifices, a lot of long nights. We had a global team. So we had like all hands at two o 'clock in the morning. and I was like, this better be worth it. And I kept on saying, what am I going to get when I finally sell this company? What is my life going to look like? And that was kind of like the finish line for me.

1:08:42Like, I'm going to put up with all this BS and put up all this sacrifice, all this stuff, because I'm going to get this, right? But in the back of my mind, and this is something I like to be honest about in business, it's like, there's no guarantees. I could have not sold the business. I could have, you know, screwed it up. This is where you and I are different because you succeeded and like, it's awesome. You have an amazing life staff. I was not willing to take the gamble of an acquisition or a big payoff. Like so many of my peers who grew up in Silicon Valley, I'm just like, the risk is too high for what?

1:09:18So for me, as an example, a lot of my Silicon Valley peers, they would take like an okay salary, but nothing great for maybe a decade. And the potential payoff might be like$250 million. dollars. Okay. Amazing. If you get it, the vast majority of people don't get it. I'm looking at it and saying, if I bootstrap my business, maybe I don't get a$250 million payoff, but I'm making way more, which I can invest, make work, I can travel at the same time, et cetera. So I do think entrepreneurs should make this risk calculation. And also you've got to ask yourself, what if it doesn't work out? What if your business had not been acquired?

1:09:56Which is a real reality. And this one of the things I think that we need to talk about more online is like, how do you mitigate your risk? How do you take some chips off the table? Yes. How do you actually take your earnings and invest it into something that is a little more stable, whether it's a Vanguard fund, whatever it might be. And I think that because you have that investment background, you have that top of mind, like, hey, I can just, I'm making X amount of profit. Let me take some of that profit and put it into something that's going to give me 10 % return. You know, like, is it counterintuitive for entrepreneurs to think this way?

1:10:23They hate this. They hate it. Tell me why. The majority of my entrepreneur friends do not invest in the market. And they're really proud of it. They'll tell me, why would I put in a Vanguard fund? I can make three times a amount of my own business. I'm like, how many businesses do you know that are around 50 years later? Exactly. What are you doing? Take a little bit of money. And when I say a little bit, for an entrepreneur, it might be 25K a year, depending on the size of your business. It might be 250K a year, whatever. But take some of it. put it in the market. After a few years, that money really compounds.

1:10:57And what they are seeing is 100K that they took out of the business, which could have turned into 400K. I'm seeing it as de-risking, but it's not that de-risking. It actually grows. 10 % growth on average per year is really good. For a business, that's good. Yeah. So it's actually so hard to get entrepreneurs to understand that you should not only be swinging for the fences on everything. There are places to go really hard on, really aggressive. And there are places not to. Like pricing, as an example, just in business, you probably don't need to innovate on pricing. Pricing is kind of a well-known art and science.

1:11:36Just copy what other people are doing and you're probably going to do fine. You do not need to innovate on your investment strategy. In fact, if you are, you're probably going to lose money. You're probably a dumb, rich person who's getting fleeced. And so follow what the industry standard is. Low cost, index funds, great. Yeah, entrepreneurs don't want to hear this at all. There's still, none of you guys are going to listen to me. So what am I even doing here? No, but I have to be honest with you. Like this is music to my ears because when we sold, I became a lot more risk averse because it's like, I know how hard it is to have something successful that is valuable enough to be acquired.

1:12:10I was humble enough. No, I had lightning in the bottle. Like it's very hard to reproduce that. So it's like, okay, now how do I be smarter with my money now that I have some? Yes. And how do I invest and diversify my investments? And this is something that a lot of people don't talk about, not only in the entrepreneurial career, but like sometimes people inherit money. Some people like they don't even know what to do with it. Because I think one of the things that people don't understand is that like in order for you to be good with money, you have to have some. So what I think the principle that I'm hearing here is, at least for me, what I'm taking away from this is the philosophy of don't wait until some magical day when you will change.

1:12:49And this is kind of the undercurrent of so much of our culture, which is like, when I finally have time, then I'll get fit. When I finally have time, then I'll properly invest my money. And I'm like, why don't you just do it right now? Do a little bit of it right now. And that means taking 10 % or 15 % automatically and putting it in the index fund, take the rest, enjoy it, or put it back in your business. Great. But don't wait until you're 50 to get fit just because same way we nobody would ever say i'm gonna wait until i'm 55 to make friends yeah it's too late you can't do it you've got to do it along the way and that's actually the whole journey that makes this whole thing fun what do we get to do along the way what do i get and at the end or a year from now five years from now it should even be bigger and better yeah i mean one piece of advice i got that actually is very simple that i would actually like to pass on to people that are listening.

1:13:42If you're an entrepreneur, take a$500 dividend every month and invest it in a Vanguard index fund. It's not going to kill your business because a$500 expense is not huge. Okay, you're going to pay the tax on that, blah, blah, blah. But you're shoring up yourself, your family, and understanding that I'm playing this risk game in the business, but I'm taking some chips off the table every time. People don't realize that every year you're in business, it's like the cards are getting dealt again, right? The longer you're there, the more risk you're accumulating. And the funny thing is that people don't realize that the people that are most at risk are the most successful.

1:14:17People think that, oh, you know, my business is not doing that well. I'm kind of like my profits have been the same for the last few years. So it's not like a big deal. But people that do well, those are the most at risk that things can turn around and you can lose everything you've built in 10 years or 12 years or 20 years. I like the idea of$500 a month or a quarter, take it as a distribution. I love that. It builds discipline. You have to have the discipline of taking that money and investing. I think that's awesome. My buddy, Mike Michalowicz, wrote this book, Profit First. I love Mike. Awesome.

1:14:47Focus on, you've got to focus on the profit. That's what my wife as an entrepreneur, she says, what's the profit? What's the profit? I don't care about Instagram followers. What is the profit? And that builds a very disciplined, profit-generating business, if that is your question you're asking. I also think that as an entrepreneur, you should ask yourself, what am I going to do for fun? Something that is often neglected as entrepreneurs. Entrepreneurs often see themselves as like, I gotta like grind. And I'm like, yeah, you do. But don't glorify it. Yeah, like work hard. Yes, sometimes you're gonna have to work nights, maybe a weekend.

1:15:24Fine, that's fun. But what's the fun part of it? And the fun thing literally could be, I get to take my dog for a walk twice a day. Great. And then what's the next step back to that? I get to go out to a restaurant. I get to buy this beautiful glassware that I had my eye on for five years. I'm going to buy two glasses because that's what I can afford right now, but they're beautiful. And on and on and on and on up until whatever your rich life is. What do you get? It's got to be fun as well as profitable. And if you don't know how to have fun, meet some Brazilian people because that's their top priority.

1:15:56See you at Jose, my friend. He's Brazilian. Or Italians. Yes. Can I just tell you? So on our honeymoon, we took a long honeymoon. We started in Italy. Yeah. We brought our parents with us for that part of it. Then we went to Kenya. Then we went to India. Then we went to Thailand. And when we were in Italy, we were like, man, Italians really excel at the game of leisure. Like they are the world's best at leisure. and I remember we went to the Vumelo Cuccinelli campus and this is a clothing brand that I really love and we were having lunch they serve lunch every day farm fresh food brought from you know within a few miles and everyone looks like a model we're just like eating and I asked the person who was showing us around I said like okay you have a 90 minute lunch that's a long lunch takes like 15-20 minutes to eat what do people do after they go back to their desk and she laughed she goes look around.

1:16:53I'm looking around. There's like two Italians outside smoking a cigarette. Yeah. There's three or four Italians going on a walk together along the campus. And they're just enjoying that moment. And at the time I'm living in New York and like you eat at your desk and you're hustling. And I remember that person creating my products. Yeah. Nice. Yeah. I remember thinking like working hard is important. I like to work, but it's not all of your life. It's one part of your life. And maybe parenting or traveling or your dog or your hobby. Those are other parts that create a rich life together. So I was inspired by seeing people slow down and have their coffee.

1:17:35And I want to do more of that. And I want to encourage people, you can be successful as an entrepreneur and be relaxed, not in a rush. It's like, take how long we need to take to have this conversation. I'm in no rush. I have all the time in the world. And so that's the way that I want entrepreneurs to see a successful entrepreneur because you can do exactly that. On that note, Rameen, thanks for being part of our life. I hope you enjoyed that conversation with Rameen Sadie. I sure did. I highly recommend if you want to learn more from Rameen to check out How to Get Rich, his Netflix show, as well as his OG book, I Will Teach You to Be Rich, which is a New York Times bestselling book and his latest book, Money for Couples.

1:18:18which is also a New York Times bestseller. So this guy knows how to write a great book. But if you love podcasts, which I'm sure you do because you're watching or listening to this episode, then I would check out his podcast, Money for Couples, which is a really unique idea in the first place. But it's also a great way for you to learn from other people's experiences with money. Go ahead and check it out. It's called Money for Couples on wherever you listen to podcasts. If you found today's episode helpful and you want more practical business lessons to help you start, grow, and scale your business, the best thing you could do is subscribe to this podcast.

1:18:56Hit subscribe or follow on your favorite podcast app, the one that you're using right now, whether it's Apple or Spotify or wherever you listen to podcasts. By hitting subscribe, you get our next episode automatically and it's the best way to support the show. It's absolutely free and it's a way for you to commit to growing your business. And now that you've subscribed, I'll check you in the next episode.

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