Become a Master of Finance with Harvard Professor Mihir Desai (with Lewis Howes)

The School of Greatness Episodes
1 Aug 201746:51

Summary

TLDRIn this enlightening episode of the School of Greatness podcast, Harvard professor Mihir Desai demystifies the world of finance, highlighting its potential as a force for empowerment and its inherent risks. Desai discusses the transformative power of debt for accessing opportunities, the importance of financial literacy, and the need for a more ethical financial system. Through his book 'The Wisdom of Finance', Desai aims to humanize finance by drawing parallels between financial concepts and human experiences, using stories from literature and history. He emphasizes the importance of kindness, generosity, and making the most of one's talents, urging for a collective effort to address environmental challenges and advocate for a greater good.

Takeaways

  • 📚 Debt can be a tool for liberation and opportunity, especially for those without access to certain resources.
  • 🏦 Understanding the dangers and responsibilities of borrowing is crucial to avoid financial traps.
  • 🎓 Investing in education is often a wise choice, but it's important to weigh the potential return against the debt incurred.
  • 🔍 Financial literacy is severely lacking, leading to significant life-altering mistakes with debt management.
  • 💡 The value of finance extends beyond monetary gains; it plays a crucial role in personal and societal advancement.
  • 🧐 Distinguishing between luck and skill in financial success is difficult, emphasizing the importance of cautious investment strategies.
  • 💼 Saving more than you think you need and understanding tax advantages are key strategies for financial health.
  • 🤝 Commitments and leveraging personal and financial resources can lead to unprecedented opportunities and success.
  • 🌍 Addressing environmental challenges and promoting kindness and generosity are paramount for future well-being.
  • 📖 Stories and narratives are powerful tools for learning, understanding, and remembering complex financial concepts.

Q & A

  • What is the main argument made by Mihir Desai in favor of debt?

    -Mihir Desai argues that debt is fantastic for individuals who are poor and looking to access opportunities that they otherwise couldn't afford. It enables them to invest in education, live in houses they don't have the right to, and is viewed as a liberating aspect of finance.

  • What are the two primary objectives Mihir Desai wanted to address in his book 'The Wisdom of Finance'?

    -Desai aimed to demystify finance because he believes it's too important for people to not understand, and to address the issues within finance, advocating for improvement especially after the financial crisis.

  • According to Mihir Desai, how should one approach borrowing and understanding debt?

    -Desai emphasizes that while borrowing and debt can be empowering and provide opportunities, it's crucial to understand the serious commitment it entails and the potential dangers of debt overhang, which can limit one's ability to make beneficial decisions.

  • What does Mihir Desai say about the difficulty in distinguishing between luck and skill in finance?

    -Desai mentions that it's almost impossible to differentiate between luck and skill in finance, except over the long term. Many might attribute financial success to skill when it could merely be the result of favorable market conditions or luck.

  • What are Mihir Desai's recommendations for managing personal finance?

    -Desai suggests saving more than you think is necessary, taking advantage of tax-advantaged saving options like IRAs and pensions, minimizing fees paid for money management, and creating a fun budget for riskier investments with the understanding that it's more about enjoyment than serious investing.

  • How does Mihir Desai use stories and analogies in 'The Wisdom of Finance'?

    -Desai uses stories and analogies, such as Jane Austen's characters and their dilemmas, to explain complex financial concepts like risk management, options, and diversification in an accessible and relatable manner.

  • What lesson does Mihir Desai draw from the biblical parable of the talents in relation to finance?

    -Desai relates the parable of the talents to the concept of value creation in finance, emphasizing the importance of utilizing one's given resources or talents to their fullest potential rather than wasting or not leveraging them.

  • What does Mihir Desai believe is the most powerful lever in life, according to Thomas Jefferson?

    -Desai cites Thomas Jefferson's view that one's reputation is the most powerful lever in life. A good reputation can enable individuals to achieve things they otherwise wouldn't be able to, similar to how leverage works in finance.

  • What critical lesson on teaching and student potential has Mihir Desai learned from his years as a professor?

    -Desai has learned the importance of humility and encouragement in teaching, recognizing that every student has a unique capacity for greatness and that judging them prematurely or harshly can be counterproductive.

  • What would Mihir Desai's final lesson to the world be if he had one last opportunity to teach?

    -Desai would emphasize the urgency of addressing environmental issues and advocate for kindness and generosity as fundamentally underestimated powers that can significantly impact the future.

Outlines

00:00

📚 The Liberating and Dangerous Sides of Debt

The introductory segment underscores the dual nature of debt, presenting it as both a liberating force for individuals lacking resources to access housing or education, and a potential danger if not handled wisely. It outlines the essential role of borrowing in providing opportunities to the underserved, while cautioning against the pitfalls and lifelong burdens that reckless borrowing can entail. This balance between opportunity and risk frames debt not just as a financial tool, but as a critical element in personal and societal economic mobility, needing careful consideration and understanding.

05:02

🤔 The Misunderstandings of Finance and Debt

This segment delves into common misconceptions about finance, particularly the misinterpretation of borrowing and debt. It illustrates how society often views debt in a negative light, ignoring its potential to enable personal growth and societal advancement. The discussion transitions into the importance of education on finance, highlighting the lack of financial literacy that leads to life-altering mistakes with debt. By presenting examples from both personal and educational contexts, it emphasizes the need for a better understanding and responsible approach to finance and borrowing.

10:03

🚀 Leveraging Finance for Personal Growth

Focusing on the practical application of financial concepts, this part explains how individuals can strategically use finance to enhance their lives. It touches on the critical decision-making process regarding investments in education and the importance of evaluating the potential returns. Furthermore, it covers the broader implications of financial decisions on personal success and the necessity of developing valued skills in the job market. This segment serves as a guide on making informed financial choices that align with personal and professional goals.

15:03

💡 Unveiling the Art of Investment and Risk

Exploring deeper into finance, this section addresses the challenges of distinguishing between skill and luck in investments, and the widespread misconception about the ability to 'beat the market.' It critically assesses the effectiveness of indexation and highlights Warren Buffett's investment philosophy, emphasizing the rarity of consistent market success. Through this discussion, it aims to dispel the myths surrounding financial investment and advocate for a more realistic and informed approach to managing and growing wealth.

20:04

🌍 Financial Wisdom for a Better Future

This segment broadens the discussion to include strategies for responsible saving and investing, offering practical advice on financial management. It advocates for maximizing savings, utilizing tax-advantaged accounts, and minimizing management fees to secure a stable financial future. Additionally, it touches on the importance of fun and speculative investments, but within the confines of responsible financial planning. Through these insights, it aims to equip individuals with the tools necessary for sound financial health and prosperity.

25:04

🎓 Learning from the Success of Others

Highlighting the diverse paths of former students who achieved significant success in various fields, this section underscores the unpredictability of greatness and the importance of seizing opportunities. From entrepreneurs to authors and public servants, the narratives showcase the wide range of accomplishments possible with dedication and hard work. It serves as a testament to the power of education and mentorship in shaping future leaders and innovators.

30:06

🌟 The Essence of Greatness and Humanity in Finance

Concluding the discussion, this final part reflects on the broader philosophical and ethical lessons derived from finance, emphasizing kindness, generosity, and the moral duty to maximize one's talents for the greater good. It connects financial principles with life's larger purpose, advocating for a compassionate and proactive approach to both personal and communal advancement. Through this lens, finance is not just about wealth accumulation but about contributing positively to the world and living a life of significance.

Mindmap

Keywords

💡Debt

In the context of the video, debt is portrayed not as a universally negative concept but as a potentially liberating tool, especially for those lacking resources to access opportunities. The script discusses debt as a means to acquire education, housing, or investment in personal growth, emphasizing its role in enabling social mobility and access to a better quality of life. However, the script also touches on the dangers of debt, highlighting the importance of understanding its implications and managing it responsibly.

💡Financial Literacy

Financial literacy is presented as crucial knowledge that is unfortunately not widely taught or understood, leading to significant personal and societal consequences. The video script emphasizes the lack of financial education at all levels of schooling, which contributes to poor financial decisions and misunderstandings about financial products like debt and investments. Improving financial literacy is advocated as a means to empower individuals, enabling them to make informed decisions that positively impact their lives.

💡Investment in Education

Investment in education is discussed in the script as a significant financial decision that individuals must carefully consider. The dialogue delves into the dilemma of taking on substantial debt for education, weighing the costs against the potential increase in earning power and life opportunities. The concept underscores the importance of evaluating the return on investment in education, recognizing that while it can be a powerful tool for advancement, not all educational investments offer equal value.

💡Risk Management

Risk management in finance involves strategies to understand, evaluate, and mitigate risks associated with financial decisions and investments. The video script explores risk management through the lens of personal finance and investment, using storytelling and analogies to demystify complex concepts. It emphasizes the importance of diversification and the use of options as tools to manage financial risk, illustrating how these strategies can apply not only in finance but also in personal decision-making processes.

💡Leverage

Leverage is presented in the script as a financial concept that allows individuals to amplify their investment returns by using borrowed funds. However, it comes with increased risk, as it can also magnify losses. The video uses the metaphor of leverage to discuss life commitments and how they can both enable and restrict our actions, drawing parallels between financial leverage and personal decisions that require commitment and carry both potential rewards and risks.

💡Financial Crisis

The financial crisis is mentioned as a pivotal event that exposed the fragility and flaws within the financial system, underscoring the need for reform and better understanding of finance among the general public. The script touches on the repercussions of the crisis and the lessons learned, advocating for improvements in financial regulation, transparency, and individual financial knowledge to prevent future crises.

💡Entrepreneurship

Entrepreneurship is briefly touched upon in the context of financial literacy and education, highlighting the challenges entrepreneurs face due to a lack of financial knowledge. The script points out the irony of highly skilled professionals, like doctors starting private practices, who are adept in their fields but often struggle with the financial aspects of running a business. This underscores the importance of financial education for entrepreneurs to successfully manage and grow their businesses.

💡Index Funds

Index funds are presented as a financial product that has gained popularity due to its ability to provide returns that mirror a specific market index, with lower fees compared to actively managed funds. The script uses index funds to illustrate a broader point about the challenge of beating the market through individual stock selection and the value of adopting a long-term, passive investment strategy for most investors.

💡Optionality

Optionality is discussed in relation to life and career choices, using finance as a metaphor. The script explores how people often seek to keep their options open, aiming for flexibility and the potential for better opportunities. However, it also warns against the paralysis that can result from an overemphasis on maintaining optionality, suggesting that true value and fulfillment come from making committed choices and taking definitive action.

💡Narrative

The concept of narrative is woven throughout the video script, highlighting the power of storytelling in making complex financial concepts accessible and relatable. The script itself is structured as a narrative, with the guest sharing insights through stories and analogies. This approach underscores the importance of narrative not just in teaching finance, but in how individuals construct their understanding of the world and make sense of their personal and financial lives.

Highlights

Debt can be empowering, especially for the less affluent to access opportunities otherwise out of reach

The necessity of understanding both the liberating aspect and dangers of borrowing

Discussion on the book 'The Wisdom of Finance', aimed at demystifying finance and addressing its issues

The importance of finance education to prevent life-altering financial mistakes

Highlighting the misconceptions and complexities of borrowing and debt

Analyzing the cost-benefit of education investments and understanding its impact on future earnings

Challenging the overestimation of skill in finance and investment management

The increasing trend of investing in index funds for long-term financial gains

Warren Buffett's unique approach to investing and his 'halo effect'

Advice on personal financial management: saving, tax benefits, minimal management fees, and creating a 'fun space'

Emphasizing the value of saving more and maximizing tax-advantaged savings

Discussion on the impact of kindness and generosity in life and finance

The importance of executing and taking risks, especially in youth

Insights on teaching: the value of empathy and humility in understanding students

Encouraging people to maximize their talents and potential for greatness

Final message: addressing environmental issues and advocating for kindness and generosity

Transcripts

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debt is fantastic so if you're a poor

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person and you want to access

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opportunities you couldn't access

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otherwise there's only one way to do

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that

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through borrowing you want to live in a

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house you don't have any right to live

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in how do you do it borrow you borrow

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yeah you want to invest in education you

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don't have the resources how do you do

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it borrow it's like a liberating thing

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so people don't understand that piece of

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it and then they don't understand the

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dangers

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[Music]

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all right welcome back everyone to the

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school of greatness podcast we have

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a harvard professor in the house today

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his name is mihair mihir dey size all

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right exactly right here decide exactly

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good to see you thank you so much for

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being here no my pleasure louise we got

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connected through i guess eric barker

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mentioned coming on the show exactly and

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then i checked out your stuff i always

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vet it with christine and i'm like see

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if this guy's legit and this would be

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interesting and you passed the test for

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it to be interesting very good excellent

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uh you've got this book called the

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wisdom of finance discovering humanity

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in the world of risk and return

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um and you've been teaching finance

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entrepreneurship business you you teach

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at the entrepreneurship program and the

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law

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school at harvard correct exactly 18

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years you've been teaching there yeah

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you've been writing

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journal papers for 18 years right and

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teaching and kind of in the weeds and

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the thick of it with your students

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exactly right right and so why did you

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decide to do this book and why is this

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topic so important and

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sure about that yeah so you're right i

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was a totally traditional economist

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writing academic papers and then

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basically over the last five years i

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wanted new challenges

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you know so the thing about academia

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that's crazy is you can look at your

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life

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20 years forward once you get tenure and

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you know exactly what it is and that's

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great and it's terrifying right and so

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for me it was more terrifying so i

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wanted to change

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so i started an online course i started

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teaching at the law school and then i

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wanted to write a book

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it's really

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to me it's one of the biggest challenges

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i've taken on it's not the way i write

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you know when you write in academia you

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write totally tight yeah you can only

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say so much you gotta like really really

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be tight this is loose and it's like

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stories and so it was a massive

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challenge for me

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what i really wanted to do the book

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though is one challenge myself but then

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b you know i teach finance and finance

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has got some serious problems

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and so i wanted to address them and the

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really the two big problems i wanted to

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address is one i want to demystify

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finance

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because i think it's way too important

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for people not to understand and a lot

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of people demonize it for like the wrong

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reasons and then the second thing is

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chunks of finance are broken we've got

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to make it better right we live through

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like this massive financial crisis we

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got to make it better and so this book

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is an effort to say look there's

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nobility in finance and you should feel

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proud of that and you got to live up to

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it

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you can't just kind of behave in a bad

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way yeah we're never taught these things

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growing up and you know elementary

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school high school college how come

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these things are never really taught

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until you get to college unless you take

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those classes yeah and then we're just

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kind of illiterate with finance and

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we're broke and don't know what to do

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with the rest of our lives i mean like

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you think about student debt you think

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about credit card debt even as an

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example i know doctors who

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come out they start a private practice

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they have no clue what they're doing

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financially it's like a clue it's and

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it's kind of a crime right

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in fact the level of financial literacy

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is so low and if you think about the

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mistakes people are making like the

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terrible mistakes they make with debt i

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mean they're they're life-changing

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decisions and if you don't have

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something to haunt you for the rest of

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your life yeah they they hang over you

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forever um and we don't do anything

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in fact that's one of the i was joking

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with my daughters i have three daughters

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and uh

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one of my girls was telling me like the

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next project should be the kids book

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version mm-hmm and it's true

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that's true it kind of struck me as

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crazy but uh these ideas you got to get

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them to kids because if you don't get

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them to kids they'll never they'll never

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learn it

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so is this like the advanced version of

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rich dad poor dad then is this kind of

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like because that's the story of like i

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reached out on the poor dad and what

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they did and how they bought and how

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they whatever yeah you know it's funny

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because that book you know it's kind of

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in a way it might be easy to ridicule

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but it has had an amazing impact on so

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many people on so many

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people and like oh if i just invest this

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way on something i make more money than

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just well you know so it's funny as an

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academic you tend to look down on that

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kind of stuff right you look down on you

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like whatever and the reality is you're

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more pissed that he's just created such

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an empire around a simple concept right

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right and you kind of but you kind of

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look down on frankly of course and i

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don't want to write that book but i want

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to speak to those people and so yeah

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you're right i'd like to think about

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this as a more elevated or advanced

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version of that um

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and i think hopefully it could be i

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think if we get this into like schools

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and we get these ideas out there um

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people want to know finance they want to

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learn it because they know how important

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it is

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it's really interesting on rich dad poor

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dad that thing has been on the best

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seller list

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for like

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25 years it's crazy

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and keeps selling and selling you look

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at the best sellers in finance and

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investing they're the same books for

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like the last 20 years

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and you know ben graham intelligent

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investor rich dad poor dad there's like

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five books um

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which makes you realize there's a ton of

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demand and there's not enough supply

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right and so this is like a version of

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that uh which is trying to say well look

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let's try to speak about finance in a

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clear way yeah so what are the things

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that we're confused about the most with

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finance

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in general as you know well as a society

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yeah

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so i think there's a couple you know one

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is

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borrowing in debt

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i think people either think it's

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terrible

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um which is wrong

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it's wonderful borrowing money yeah

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having debt having debt i mean i think

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what people don't realize is and it's

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always been demonized through history

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right like so socrates said it was you

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know immoral to charge interest

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and religions a lot of religions don't

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allow

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payment of interest but they don't

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realize that actually debt is fantastic

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so if you're a poor person

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and you want to access opportunities you

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couldn't access otherwise there's only

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one way to do that through borrowing you

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want to live in a house you don't have

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any right to live in how do you do it

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borrow you borrow yeah you want to

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invest in education you don't have the

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resources how do you do it borrow it's

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like a liberating thing

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so people don't understand that piece of

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it and then they don't understand the

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dangers

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they don't understand the dangers which

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is once you do that it is a really

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really serious commitment and you can

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find yourself in a world and i tell the

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story of what's called debt overhang

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which is this finance idea which you

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have so much debt that you can't

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actually do the

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the best things for yourself because

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it's like looming over you

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and

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that is the trap people fall into so

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they kind of either ignore the real

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virtues of it or they kind of just say

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well it's great and i'll just do it it's

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not a big deal so that i think is one

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big piece on the personal side

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how do we make a decision of knowing

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like okay i'm stuck in this rut you know

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if i go to this school that cost me 50

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grand a year i don't know what harvard

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is maybe it's 80 grand a year now

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um

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then

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i'm gonna get the opportunities and the

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insights

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that will help me for the rest of my

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life but i'll have a half a million in

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debt from four years exactly that's

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going to take me the rest of my life to

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pay off yeah well so here's how do you

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make that decision well and the short

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version is so you got to really think

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hard about what the upfront investment

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is and then the hard part for people is

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you got to think about the incremental

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wages like how much more am i going to

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make not how much am i going to make but

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how much more am i going to make because

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of this much better of my lifestyle

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going to be right exactly because of

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this investment and people don't usually

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do that and there's also you know the

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truth about education and i'm not just

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saying this because it's my business i'm

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not just talking my own book but the

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truth is on average it's a great

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investment

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that doesn't mean it's always a good

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investment yeah there's a lot of crappy

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investments out there there's a lot of

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really bad investments out there but on

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average it's great what you've got to

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think about is there's a labor market

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out there

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and you got to have skills that are

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going to be valued if you don't develop

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the skills that aren't valued then

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you're not going to make money you're

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not going to be able to make money and

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then you have to ask yourself if you

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want to do a degree and you want to do

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something that's not really valued in

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the labor market

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you know whatever it might be let's say

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you want to go to cooking school yeah

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just to learn cooking you should

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understand that's basically consumption

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it's not an investment right you're just

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having a good time pleasure and if you

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want to do that you go do that but don't

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kid yourself and think you're going to

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get it paid off right that's just you

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having fun like you go on the super bowl

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or some big thing you want to go to

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so people have i think that's what's

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confusing about a lot of these things

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they're both investment and consumption

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it's like a house right it's a big

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investment

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but you live in it and you consume it

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all the time right and so it's got these

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there are these things that are weirdly

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both there's stuff you invest in and

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there's stuff you like really really

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enjoy sure um not like stocks which are

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an investment and not like food which is

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consumption yeah right these things are

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actually in between and that makes it

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really confusing i think for people got

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it what else should we

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be aware of what are the other big

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things that we do so i think the other

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big thing that people struggle with in

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finance and outside of finance

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is they think there's a lot of skill

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in finance in what in managing making

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managing money and investing money and

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when they get good results they think

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it's their skill

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so the lesson of finance is it's almost

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impossible to tell the difference

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between luck and skill

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other than over the long run

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right so you got a buddy i got a buddy

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and the buddy says you know what i beat

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the stock market like three years in a

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row five years in a row i'm awesome yeah

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and the answer is i have no idea if

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you're awesome you may be awesome the

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market may have just been going up

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exactly you just got into the right time

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and whatever and in fact like you know

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there's this old coin tossing trick

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right which is you get 80 people in a

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room

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you toss a coin 10 times

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and you kind of go through it and then

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you say who got nine heads maybe one or

play09:32

two people who got 10 heads you're

play09:34

pretty much guaranteed to get somebody

play09:36

in that room get 10 heads and then you

play09:37

ask that person you know how did you do

play09:39

it

play09:40

yeah and the person of course will

play09:42

honest usually answer honestly which is

play09:44

it was luck yeah but when you're a

play09:45

mutual fund manager and you beat the

play09:46

market 10 years in a row

play09:50

and i did it right and so i think people

play09:52

think there's a lot of skill and it's

play09:54

the truth is it's really almost very

play09:56

very hard to beat the market

play09:57

persistently there may be a few people

play09:59

out there who can do it well over the

play10:01

long run

play10:02

i don't know who they are you don't know

play10:03

who they are don't believe the hype so

play10:06

for example you know as you may know

play10:07

this is this massive rise in indexation

play10:10

right so like people basically just

play10:12

buying uh exchange traded funds or index

play10:15

funds

play10:15

and that's because people have figured

play10:17

out payments

play10:18

that is what has worked over the years

play10:20

that's what's worked over the years

play10:21

invest in the index fund in 30 years

play10:24

you're going to make more than if you

play10:25

try to play you try to play the game

play10:26

yourself or frankly if you try to pay

play10:28

somebody who tells you they know how to

play10:29

play the game is this what buffett does

play10:31

he just invests in the index well so

play10:33

buffett is like a guy who's buff it's

play10:34

super interesting right because he

play10:36

actually

play10:37

people think he's beaten the market for

play10:38

a long period of time and he may have

play10:40

but he also doesn't believe in a lot of

play10:42

these things right he doesn't believe

play10:44

you can just kind of be successful no

play10:45

problem and in fact the way he works now

play10:48

it's so interesting about buffett

play10:50

he basically monetizes his

play10:52

halo right so when he invests in a

play10:54

company

play10:56

people rush in

play10:57

and so what does he do he kind of like

play10:59

during the financial crisis he bought

play11:00

preferred stock at goldman and ge he

play11:02

kind of rescued them he got terms that

play11:05

no you and i could not get of course

play11:06

right because he's buffett

play11:08

and then he does

play11:09

yeah he gets and he gets like he got

play11:11

like terms i would never get in the

play11:12

market if i went to go buy that stock

play11:14

and then he turns it into performance so

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you know it's really interesting i think

play11:18

that's one of the big problems in

play11:19

finance which is we think that there are

play11:20

these super skillful people out there

play11:21

and they're super smart

play11:23

reality is some of them maybe but you

play11:25

don't know who they are mm-hmm yeah what

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should we be doing with our money then

play11:30

so that's a great question um so it kind

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of depends on who you are right so let's

play11:34

think about a

play11:36

typical kind of person yes let's say

play11:37

working and they have a income stream

play11:40

maybe they have a family so in terms of

play11:42

savings the first thing is

play11:44

save

play11:45

how much

play11:47

as much the truth is um very few people

play11:50

over save

play11:51

right so what does oversaving mean over

play11:53

saving means i'm depriving myself today

play11:55

so that when i retire i have more

play11:58

very few people make that mistake

play12:00

like 98 of people are making the mistake

play12:02

of not depriving themselves today so

play12:04

they can have more later so for almost

play12:06

all people it is save more than you're

play12:08

doing now

play12:09

that's almost universal as much as you

play12:11

can yeah i mean as much as you can and

play12:12

at some point you're going to be saying

play12:14

to yourself you know i'm skimping too

play12:16

much i'm making myself unhappy because

play12:17

i'm living in a shack and i'm like yeah

play12:19

i don't need to live in a shame ramen

play12:20

noodles yeah and at some point you know

play12:22

like you have to kind of get a little

play12:23

bit better and you have to move up but

play12:25

first is you should be saving from the

play12:27

time you're earning money it's really

play12:29

really important it's like a tiny little

play12:30

bit as much is great

play12:32

um second thing you got to think about

play12:34

is where should you be saving it so the

play12:36

first thing is um

play12:38

and this is going to sound a little

play12:39

nitty-gritty but it's really true

play12:41

to anything that lets you save money on

play12:43

taxes there's all a lot of tax

play12:45

advantaged ways to save

play12:47

do it what are the top five in your mind

play12:50

so iras roth iras you know pension plans

play12:53

that are sponsored by companies people

play12:54

don't opt into them it's crazy yeah if

play12:57

you're a private entrepreneur you can

play12:58

set up your own

play12:59

so like if you think about like uh fees

play13:02

and management fees and returns

play13:04

if you save 30

play13:06

up front because of taxes

play13:08

like that's a victory you know like that

play13:10

cares about the fees yeah exactly and

play13:12

it's like a lot of people will say like

play13:13

these iras are bogus and you're not

play13:15

going to really

play13:17

earn money over time it's like all these

play13:19

fees and all this like well it depends

play13:20

on marketing and blah blah blah well

play13:22

once we get into the ira that's fine but

play13:23

first put it into something tax

play13:24

advantage yeah any tax thing tax

play13:26

deferred exactly and just max out on tax

play13:28

stuff the government's telling you you

play13:30

should you should do it so that's iras

play13:32

pensions that's is that insurance

play13:33

policies as well even like health

play13:35

savings accounts flexible spending

play13:36

accounts people don't use that stuff

play13:38

it's also kind of all that you got to

play13:40

max out on that i do it all and it's

play13:41

forced savings too the cool thing about

play13:43

it is it's kind of for savings because

play13:44

they take it out right before you even

play13:46

get to touch it

play13:47

and the final thing is uh don't pay a

play13:50

lot of money to have people manage your

play13:52

money

play13:53

now this is like you know anathema to

play13:55

people in finance because there's a lot

play13:56

of wealth advisors and brokers out there

play13:59

and the reality is unless you have

play14:00

serious coin don't pay a lot in fees is

play14:03

what you're saying yeah i'm assuming

play14:04

right yeah so like for example

play14:06

take like half your money put it into

play14:08

like a government bond fund take like

play14:10

half your money put it into an equity

play14:11

index fund and then sit back yeah if you

play14:14

want to play and have fun take a small

play14:17

chunk of your wealth

play14:19

and just go have fun but don't do it

play14:21

with all your wealth and don't pretend

play14:22

like you're doing something serious

play14:24

you're just having fun yeah if you lose

play14:25

it you lose it you lose it it's just

play14:26

like buying tickets to the movies yeah

play14:28

you're just gonna like have fun with

play14:29

this money over here and you're gonna

play14:30

invest it because this your buddy told

play14:32

you right his company is great that's

play14:34

fine but don't pretend it's like

play14:35

consumption again right you're having

play14:36

fun you're not investing you're just

play14:38

going and goofing off yeah so i think

play14:40

the big rules are you know save more

play14:43

than you think you need

play14:44

second try to think about taxes it

play14:46

sounds boring but it's so first order

play14:49

third don't pay a lot of people money

play14:51

for managing your money

play14:52

and then fourth create a little fun

play14:55

space and then go have fun yeah um if

play14:57

you have a lot of money you can take ten

play14:59

percent of it and your buddy comes to

play15:01

you and says i got a business i want you

play15:03

to invest in about 10 grand and put it

play15:04

in there yeah then that's fine but don't

play15:06

pretend like you're gonna get it back

play15:08

and now i've invested in many startups

play15:12

that i've had zero

play15:14

i've made zero return over the last

play15:16

eight years

play15:17

well and you're not alone right so many

play15:19

people have so what do we know about

play15:21

startups right like so like 80 90 of

play15:23

them are gonna be zeros yes

play15:25

and then five percent if you're lucky

play15:27

will be

play15:28

10x 5x yeah and then there's a bunch of

play15:30

junk in the middle but basically it's

play15:32

totally bimodal and for me i went into

play15:34

it thinking i'm going to lose this all

play15:35

like it's it's a way for me to learn to

play15:37

build relationships to like get in with

play15:39

a certain industry well that's

play15:41

interesting and so i was like this is my

play15:44

harvard degree yeah this is like my

play15:46

investment in something that's well

play15:48

you're learning yeah you're meeting

play15:50

people yeah um and you are having fun

play15:52

sometimes yeah right like it's just it's

play15:54

fun it's interesting um i think as you

play15:56

get older it gets harder to do that yeah

play15:57

because

play15:58

you know

play16:00

when i was 30 i was willing to do that

play16:02

stuff i was willing to write checks

play16:03

three kids now you got three kids and

play16:04

you're like geez i don't know if i

play16:05

should be doing that but that's the

play16:07

other big thing which is when you're

play16:09

young you should be taking more risk

play16:11

and that should taper down over life

play16:13

sure right because i'm 49 and you know

play16:16

you've got to start tapering down your

play16:17

risk profile so when you're young you

play16:19

should be taking a little bit more risk

play16:21

and that i think is something people

play16:22

don't do enough of yeah do you feel like

play16:24

as a as a professor you follow your own

play16:26

advice because there's a lot of people

play16:28

that teach that don't actually do what

play16:30

they say you should do i do most of it

play16:33

right well what i just said i'll tell

play16:35

you what i do wrong well let me just say

play16:37

what i do right now

play16:39

well i used to i used to write checks uh

play16:41

to friends and former students and i do

play16:43

that less now because i just

play16:46

you know i'm just more measured about

play16:47

the way i think about things and i think

play16:48

the startup scene is so crazy right now

play16:49

frankly in addition

play16:51

um i think the thing i do wrong is i

play16:53

like everybody i tend to overestimate

play16:56

you know my abilities a little bit

play16:58

so i like investing i do it a little bit

play17:01

i think if you actually look i think

play17:02

i've done you know pretty well but i

play17:05

think if you actually looked at my

play17:06

returns

play17:07

over time i think i'm probably way

play17:09

overestimating my ability and if you

play17:11

thought about like if i just parked it

play17:13

somewhere

play17:14

i would have probably done better and i

play17:15

would have spent less time in my life

play17:17

like wasting on that

play17:18

so i probably overestimate my abilities

play17:20

and i think everybody does

play17:21

but i do follow all the tax stuff i do

play17:23

follow all the indexation stuff no

play17:25

paying fees yeah um

play17:27

i actually worry sometimes that i save

play17:28

too much like i worry that i'm

play17:31

i'm too worried about things in the

play17:32

future

play17:33

um that's like the good indian way right

play17:35

it's like well

play17:36

you know where you're raised and how

play17:38

it's supposed to be yeah so i'm i was

play17:39

born in bombay i mean my parents

play17:41

you know when we came we

play17:43

you know money was something you thought

play17:45

hard about i mean i remember my parents

play17:47

had a little notebook where i had all my

play17:49

little accounts and what i spent when

play17:51

since i was age seven or eight wow and

play17:54

you're right once you're an immigrant

play17:55

you're never

play17:56

you know you never lose that you never

play17:58

lose that sense of wait a second you

play18:00

know

play18:01

we don't have as much as we need

play18:03

we have to fight a little harder we got

play18:04

to work a little hard we got to save a

play18:06

little more because who knows what's

play18:07

going to happen right um and i think

play18:09

indians always you know indians save a

play18:10

lot in gold and in otherwise right they

play18:12

do a lot of crazy stuff

play18:15

but especially on money stuff they worry

play18:16

about that stuff more than they probably

play18:18

should yeah

play18:20

what are some other lessons we should be

play18:22

knowing or understanding about finance

play18:24

and

play18:26

the wisdom behind it well so in the book

play18:28

risk in return and all that stuff yeah

play18:30

so in the book what i try to do is take

play18:31

these ideas that people in finance would

play18:33

be in a textbook right and i basically

play18:35

try to explain them just using stories

play18:37

about graphs no graphs no equations

play18:39

stuff that hurts my brain and they hurt

play18:41

a lot of people's brains yeah and

play18:43

there's no reason to do that that way

play18:45

right so for example

play18:47

risk management which is about options

play18:50

and diversification like some of the

play18:51

most complex derivatives

play18:53

so in the book the way i try to explain

play18:55

it is i use jane austen and pride and

play18:57

prejudice so there's like a she's a

play18:59

fantastic english novelist and she

play19:01

basically tells the story of these young

play19:02

women who are facing risk in the

play19:04

marriage market right there's like these

play19:06

suitors who come along and some of them

play19:08

are drunks and some of them have a lot

play19:09

of money but they're mean and some are

play19:11

nice but they don't have any money you

play19:12

know it's all about that it's like

play19:13

that's the whole plot line what do i

play19:15

want to do i want to have this debt of

play19:16

someone mean to me for the 40 years

play19:18

exactly or do i want to like be with

play19:20

someone i'm happy with but we'll never

play19:21

make it you

play19:22

know exactly

play19:24

that's exactly what jane austen is about

play19:26

right

play19:27

and so these young women are really

play19:28

exposed and men by the way she points

play19:30

out have it really easy because if men

play19:32

make a mistake it's okay

play19:34

in the 19th century right but women if

play19:36

you make a mistake in the marriage

play19:37

market

play19:38

it's so weird your options you have to

play19:40

weigh your options so she actually

play19:41

describes options and diversification as

play19:44

like strategies for dealing with risk

play19:46

wow and it's kind of nice because then

play19:48

options aren't some crazy derivative

play19:49

thing

play19:50

but they're actually

play19:51

like something in your life right and in

play19:53

fact

play19:54

actually one of the i think the things

play19:55

i'm proudest about this book is i wrote

play19:56

a piece for the crimson which is the

play19:58

harvard newspaper

play19:59

called the trouble with optionality

play20:01

so the reason i really like that piece

play20:03

is people in finance overlearn the idea

play20:06

of options right because they think give

play20:08

me the give me the breakdown of options

play20:10

so the idea of options is you know you

play20:12

want to have choices right and the more

play20:14

choices you have the better and options

play20:16

are contracts which basically say you

play20:17

don't own something but you have the

play20:18

right to own something right and people

play20:20

love it because that's what optionality

play20:22

is right so a lot of young people i see

play20:25

are obsessed with optionality right

play20:27

they're like

play20:28

okay i'm gonna go to school because i

play20:30

need more optionality in my life because

play20:31

then i'll have more opportunities

play20:33

available to me i'm going to be in part

play20:34

of networks because i need more

play20:36

optionality i'm going to go work at a

play20:37

prestigious firm because i need more

play20:38

optionality in my life

play20:40

so the thing i and that sounds great

play20:42

right because then you get to do more

play20:43

things in the future

play20:44

so what i tried to point out in the book

play20:46

and i do this essay is you know what

play20:49

most of those people they get obsessed

play20:51

with buying optionality and that's all

play20:53

they ever do they never make a decision

play20:54

they never go and exercise the option

play20:58

they never make the big investment

play20:59

because buying options is addictive

play21:02

you just buy more and more and more and

play21:04

then you have to pull the trigger on

play21:05

something big and you're like no more

play21:07

optionality more optionality that's all

play21:09

i want yeah and so then they end up and

play21:11

i've seen this with so many kids because

play21:13

they're these are kids who are really

play21:14

smart they got like the best safety nets

play21:17

in the world right right and then they

play21:18

keep buying more safety nets and you're

play21:20

like what the heck are you doing just go

play21:21

do it go do something

play21:22

and the truth what's weird is people

play21:24

don't understand like the more safety

play21:25

nets you buy

play21:26

the more you value safety nets you're

play21:28

like i gotta buy another one because i'm

play21:29

so used to doing it and then you end up

play21:31

like 40 years old and you're like

play21:33

i got all these degrees i've got all

play21:34

this stuff and i have all these safety

play21:36

nets but i've never really done the

play21:37

risky thing that i wanted to do

play21:39

and it's it's really sad and so that's

play21:41

what i see with optionality

play21:43

that's an example that's kind of

play21:44

throughout the book which is you take

play21:45

this finance idea which sounds really

play21:47

weird and abstract options and

play21:49

optionality

play21:50

you try to explain it with jane austen

play21:52

um and then you say look it actually

play21:54

applies to your life

play21:55

and like you you may be getting it wrong

play21:57

right so even if you're in finance

play21:59

because people in finance talk about

play22:00

this all the time they talk about

play22:02

marriage as the death of optionality

play22:05

right that's what you know and it sounds

play22:07

kind of like a ridiculous thing to say

play22:08

but that's the way you people think

play22:09

about it the relationship world sure

play22:11

yeah it's the death of absolutely yeah

play22:13

and but people don't also realize like

play22:15

that's how great things happen right

play22:16

when you close off options

play22:18

and so people in france get consumed by

play22:20

that so i do that with options in the

play22:22

book um

play22:23

i do that with bankruptcy

play22:25

so the i really like the bankruptcy

play22:27

chapter comes at the end um but i tell

play22:30

the story of this guy robert morris who

play22:32

i'm sure i imagine you've never heard of

play22:34

nobody's ever heard of

play22:36

that's what's great about the story

play22:37

nobody's ever heard of him so he's the

play22:38

richest man in the colonies

play22:41

uh he finances the battle of yorktown

play22:44

with his personal script okay george

play22:46

washington asks him to be the first

play22:47

secretary of the treasury before he asks

play22:50

alexander hamilton and he says no

play22:53

so why does he say no he says no because

play22:55

he lost some wealth during the

play22:56

revolutionary war helping

play22:58

the

play22:59

young republic

play23:00

and washington says become the first

play23:01

secretary of the treasury he's like no

play23:03

go ask hamilton i got to rebuild my

play23:04

wealth

play23:05

he goes back he rebuilds his wealth he

play23:08

owns uh 40 of new jersey

play23:10

like the state

play23:12

he owns a quarter of the district of

play23:13

columbia which is going to become the

play23:14

capital

play23:15

and then he goes bankrupt

play23:19

and what did we do to people who went

play23:21

bankrupt back then

play23:22

he went to jail

play23:24

wow and

play23:25

he went to jail and he was sitting in a

play23:27

jail in philadelphia he went from the

play23:28

richest man in the colonies

play23:30

to jail because that's the only land

play23:32

where the jail was so that's actually

play23:35

the reason i tell that story is that's

play23:37

how we used to think about failure wow

play23:39

we used to think about failure people

play23:41

fail

play23:41

they're morally problematic they need to

play23:44

be punished wow so the reason i tell

play23:46

that story is george washington visits

play23:48

him in the jail

play23:49

in philadelphia in philadelphia

play23:51

and actually it's a great story because

play23:52

george washington risks yellow fever i

play23:54

mean these jails were terrible

play23:56

and he and other founding fathers look

play23:58

at robert moore sitting in jail and

play24:00

they're like something's wrong

play24:02

this guy

play24:02

helped us finance the revolution and

play24:04

he's sitting in jail that leads to the

play24:06

way we rethink bankruptcy with the 1800

play24:09

act of bankruptcy 1800 bankruptcy act

play24:11

which where we basically say

play24:13

no more punishing people who fail

play24:15

so now what do we do with people who go

play24:16

bankrupt we actually prioritize them

play24:19

starting again

play24:20

right we're like we're going to protect

play24:22

you from the creditors

play24:24

right we're going to actually get you a

play24:26

clean slate we're going to get you a

play24:28

stay we're going to actually do all the

play24:29

things to help you

play24:30

which i think is really analogous to how

play24:32

you should think about failure right

play24:34

which is you don't want to stigmatize it

play24:36

historically what do we do with failure

play24:38

we stigmatize it like i failed i'm bad

play24:40

you know you failed you're something's

play24:42

wrong with you the way we should think

play24:43

about failure is the way finance thinks

play24:45

about failure which is it happens

play24:48

let's get a clean slate right let's

play24:49

start again and let's protect you from

play24:51

all the people who have claims on you

play24:53

and then let's kind of get you started

play24:55

so that's another example of kind of

play24:57

saying

play24:58

you know bankruptcy and this idea in

play24:59

finance actually applies to the way you

play25:02

can think about your life in that case

play25:03

um

play25:04

failure

play25:05

the other example that i i kind of like

play25:07

is leverage

play25:09

so this is all about that yeah so that's

play25:10

about debt right and

play25:12

people in finance love leverage they're

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like because their fortunes have been

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built on leverage um think about a lot

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of people especially in real estate a

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lot of areas it's been built on leverage

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they borrow money and then it allows

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them to own assets they have no right to

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own they leverage that asset they

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leverage that asset and then if things

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go well their returns are outsized right

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because leverage that's what leverage

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does to your returns

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and so i kind of talk about that but

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then what i try to do in the book is say

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you know that's totally analogous to

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commitments you know what is debt

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it's a commitment it's like a really

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really serious commitment

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um so i do this via the merchant of

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venice shakespeare's story right

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nominally it's about debt this is the

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play where is this money lender

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and he's like i want to pound your flesh

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because you didn't pay me back

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people think it's about debt it's really

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about commitments like it's about

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commitments between people so the point

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of the story is that commitments are

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like debt

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they allow you to do things

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you wouldn't be able to do otherwise

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commitments to people to spouses to

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families to jobs to organizations

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you get to do things you can't do by

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yourself for example what do you mean so

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i give a couple of examples so i talk

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about these two artists one is george

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orwell who wrote 1984

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and one is jeff coons who's a modern

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artist you may have heard of he makes

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these massive sculptures yeah so george

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orwell is a low leverage guy

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he is like living in london everybody

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wants a piece of him after world war ii

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he's like i'm going away

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he goes to the scottish islands hebrides

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islands and he spends three years alone

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and he writes 1984

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by himself

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that's low leverage he's not committing

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to anybody he's doing it all by himself

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right jeff coons i think is arguably the

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greatest modern artist

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the whitney museum in new york had a

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retrospective of just him for the whole

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building he creates these

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sculptures that are the size of this

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room

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one's called play-doh they're made of

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metal and glass and just incredible

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stuff

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he has 150 people in his factory

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he doesn't actually know how to use the

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material

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that he's working with he relies on

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other people who use that material kind

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of like the the visionary he's the

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visionary and he's he actually literally

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in one interview says i'm the idea guy

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he's gone bankrupt like three times he's

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bankrupted dealers wow he is living a

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high leverage life and he produces art

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that he wouldn't be able to produce

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otherwise you can't do that by yourself

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no so the point is kind of like to say

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commitments um and embedding yourself in

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a world of networks and commitments

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actually allows you to do stuff that you

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wouldn't be able to do otherwise right

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did i end that chapter with a great

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quote from jefferson actually the

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picture on the cover of the book is

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archimedes

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so archimedes has a famous quote about

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leverage which is leverage comes down to

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a lever

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right and a lever is this amazing thing

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in engineering when you push down on it

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you get to move stuff you got no right

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to move right that's like leverage in

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finance you get to own a house you have

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no right to own so archimedes says you

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know give me a place to stand and a

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lever and i'll move the world

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so jefferson says

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the biggest lever in life

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is your reputation

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so if you commit to the world like

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buffett yeah like exactly like that

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exactly what buffett does when he

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monetizes halo so jefferson says

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basically if you're good to the world

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then the world because you have a good

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reputation will let you do things you

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have no right to do

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which is true right that's what

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reputations do and that's why it's so

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hard when you lose your reputation

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because the reputation is the stuff that

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lets you say i trust you go ahead you

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can do it so you commit to good behavior

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and then you get to do things you have

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no right to do and that's the essence of

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commitments and that's kind of the

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essence of leverage as well that's

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powerful

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who's the smartest person you've taught

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come through one of your classes

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wow so i've had i've had the good

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fortune to

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you know teach a lot of great people

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god you know i have had uh

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i am so proud of a lot of my former

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students so it's kind of hard for me to

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think about which is what i get it yeah

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yeah um there may be a few that you

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could think of who've done extraordinary

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things or god you know i'll tell you

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i'll give you kind of a bunch of

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different people because i think it's

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useful to kind of

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they're different types of people right

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um so an entrepreneur there's you know

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entrepreneur who i think is really

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spectacular um sarah house she built

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swell you know the water bottles yep as

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well

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very popular right now she's spectacular

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and i you know i i don't think she might

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be telling you you know i had her as a

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first year student at hbs and she was

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she was really nervous about finance and

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she was really you know nervous

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and she has just built like a great

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company yeah out of something that

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you know the water bottle business you

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might not have even thought about but

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she's made it into something

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aesthetically beautiful like that's

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spectacular yeah um i'll give you

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another type of person because that's

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like an entrepreneur type of person

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uh another type of person as i've had a

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couple of authors so

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um lee carpenter has written a book

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about navy seals uh gail lemon wrote

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ashley's war which is a spectacular

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story i think they like took a totally

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different path yeah yeah like you know

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they go to business school and then they

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go write novels and yes journalism it's

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spectacular

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um

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and then i had a former student who went

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to government i've had a number of

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students who've gone to government

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service so guy who used to run the irs

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doug shulman um

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he was a former student so i guess i

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picked those three kind of random irs he

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used to yeah um

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and so i picked those three people

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because

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i think it's one of the luxuries i have

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is i see people who have impacts on the

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world in very very different ways

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i don't really know who's smartest

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you know the truth is louis i don't

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you know as you get older i think smarts

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become

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less and less which you know let me put

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it differently i surround i'm surrounded

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by a lot of smart people yeah and i can

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have that luxury smarts don't matter

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unless you can execute well unless

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you're a good person unless you care

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about people and make an impact it's

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like and especially because how smart

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you are and you know i hate to say that

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but like at some level like smarts are

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cheap right at some levels smarts are

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the valuables the scarce resource and

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then at some level smarts are not the

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scarce resources especially at harvard

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everyone's you know

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a thousand smart people in one room yeah

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and so like is one person smarter than

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the other yeah sure fine whatever

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i mean it is true and it's when you see

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people like that and i especially in the

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undergrad population sometimes you see

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kids like that and it's law school

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sometimes you see kids like that

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they're just

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they they're special like they're way

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off the tail yeah um but the thing i

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really care about is

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attitude

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and like i hate to be it's like a

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traditional indian immigrant thing right

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but um like work ethic

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like just

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hard workers who

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are hungry

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and they're smart then you're like damn

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that's that's the package because that

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is really powerful

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yeah so i hate to say that but i think

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smarts are um

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i don't focus on it as much you know i

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i love smart people and i like to be

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around them

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but like small gradations in smarts

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it's kind of like in sports too you know

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when you have just a talented player who

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doesn't work hard

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and it's lazy exactly you're like get

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off my team or you're just like oh i

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wish you would work hard because then

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you'd be incredible and you've got

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someone who works harder isn't talented

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you keep them on the team because it's

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like they lift everyone up yeah but if

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you can put it together it's like and in

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fact those people who have talents and

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who don't work hard they're the they're

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the most tragic stories right the worst

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because you feel like you give me some

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of that talent and you have no idea what

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you have oh my gosh and in fact just

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just to go back to the book a little bit

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the

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one of the there's a story in the bible

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um called the parable of the talents

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it's like this great story in the bible

play32:35

it's a parable of the talents right yeah

play32:36

is this the one with the the father

play32:38

gives the son talents or something how

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does it go it's great so here's the

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story which is um there's a master who's

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supposed to be god okay and he's going

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out of town and he's got three three

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servants and he says i'm going out of

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town you got to take care of my talents

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so talents today are like these special

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things we have like that make us special

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back then it was money yeah the origin

play32:58

of the word talents is money so he gives

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one guy he's like look here are five

play33:01

talents

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take care of this i'm going out of town

play33:04

because another guy three talents just

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take care of this and go downtown he

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gives the third guy one talent and he

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says i'm going out of town take care of

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it he comes back

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and obviously he's supposed to be god in

play33:12

this story and these are like normal

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people so the guy with five talents

play33:16

comes to him and says

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you know master i took your five talents

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and i invested it and i lent it out and

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i made it into ten talents

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and he gives it back to the master and

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the master says wonderful enter the

play33:28

kingdom of god

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the second person says i took your three

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talents and i made it into six talents

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and the master says great job

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welcome into the kingdom of god third

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guy

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is like you know i only had one talent

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and i was a little nervous and i wanted

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to make sure and have it so i buried it

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it's here and i want to give it back to

play33:48

you

play33:49

and the master says

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you're out you know you're damned

play33:53

you didn't do what you were supposed to

play33:55

do

play33:56

so the reason i love that story is it's

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about um it's about how you're given

play34:00

these incredible gifts and you have to

play34:02

use them it also in the value creation

play34:05

chapter it's kind of exactly what

play34:06

finance says about value creation you

play34:08

know which is you're a steward for

play34:09

resources you got to do more than people

play34:11

expect you to do

play34:13

in finance that's called beating your

play34:14

cost of capital

play34:15

because otherwise you've wasted

play34:17

you've wasted an opportunity and if you

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just sit on things that's actually value

play34:21

destroying it's not value creating so

play34:23

that parable it's just like your story

play34:25

about this athlete right um

play34:27

it's a really weird parable right

play34:28

because this young this one guy who had

play34:30

one talent he's like the poorest guy

play34:33

and he just because of his fear

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he gets damned he gets like literally

play34:37

cast out of the kingdom of god but it's

play34:39

a powerful story for saying you know we

play34:41

are all given

play34:42

a lot and you have to make everything

play34:45

you can out of it yeah um

play34:47

it's it's i really like that story

play34:48

because it has to do with finance but

play34:50

it's also this really

play34:51

interesting story you know more

play34:52

generally making the most in the world

play34:53

and making the most of what we all have

play34:55

and it's not going to have five talents

play34:57

sometimes yeah we'd have one little

play34:59

talent but it's like what's what how can

play35:01

you make that into ten exactly in your

play35:03

own way and it's like it's your duty

play35:05

yeah right it's not like you can if you

play35:08

want like the story of the parable is

play35:10

it's your duty

play35:12

you gotta you've been given something

play35:14

and you have to make the most of it

play35:16

so i like that right because it's almost

play35:19

like it's incumbent upon us to realize

play35:21

what our talents are

play35:23

and then make the most of it yeah and

play35:25

you know so there are a lot of people

play35:26

who have found that parable

play35:28

um

play35:29

you know in a way that's almost

play35:30

terrifying right because you're like

play35:32

geez am i making the most of my talents

play35:34

yeah and so the story in the book is

play35:35

about these two guys john milton who

play35:37

wrote paradise lost and samuel johnson

play35:39

they were haunted by that parable really

play35:42

yeah because they like spent their life

play35:43

like oh my god and these are two

play35:45

seriously talented people right samuel

play35:47

johnson wrote the first dictionary

play35:49

right in eight months i mean he's like

play35:51

he's a crazy guy john milton wrote

play35:53

paradise lost when he was blind these

play35:55

are crazy people and yet they were they

play35:57

were always asking themselves am i doing

play35:59

enough i've been given so much am i

play36:02

doing enough

play36:03

and it's kind of an interesting way to

play36:04

live you know you don't want to take it

play36:06

too far because you'll beat yourself up

play36:07

all the time

play36:08

but i think more of us should probably

play36:10

be doing that yeah because we all are

play36:11

very lucky uh in different ways i think

play36:13

it's important to live in urgency too

play36:15

you know i'm not just like oh i'll wait

play36:17

until i'm ready to have a feeling yeah

play36:18

i'll wait till i get the degree no start

play36:20

something now even if it's gonna fail at

play36:22

least you're learning something and

play36:23

you're trying to do something with your

play36:24

talents yeah right i agree i mean i

play36:26

think people over-incubate a little bit

play36:29

right so

play36:30

they kind of wait for their ideas to get

play36:32

a little bit more clear

play36:34

but the reality is just go and just do

play36:36

it because

play36:37

and in that version of the story it's

play36:39

incumbent on you like you gotta go do it

play36:42

um i really like that idea of not just

play36:43

like you've been given something so do

play36:45

it but like you've got to go do it

play36:46

because if you're not you're wasting

play36:48

like this really the privilege you've

play36:50

been given

play36:52

what's the greatest lesson you've

play36:53

learned over the last 18 years of

play36:54

teaching

play36:57

you know uh

play37:00

well let me say a couple let me say two

play37:01

things right so one is i learned

play37:03

something about teaching

play37:05

um

play37:06

the art of connecting with your students

play37:08

and it's really it's fundamentally

play37:11

when i teach best and i don't always

play37:12

teach great but when i do

play37:14

it's like an act of empathy

play37:17

right like you've got to go into the

play37:18

other person's

play37:20

you have to think about how the other

play37:21

person is thinking about it

play37:23

so too many people who are teachers are

play37:25

especially in an academic environment

play37:26

it's like about my ideas i'm projecting

play37:29

it on to you

play37:30

and fundamentally it's about empathy

play37:32

like if you if you can get in other

play37:33

people's shoes

play37:35

then you can help them understand

play37:37

something yeah um

play37:38

and then the second thing that's about

play37:40

teaching just about what it is really

play37:42

because it is kind of my life's work

play37:43

along with research and writing um i

play37:46

think the big lesson though you learn

play37:47

from teaching and especially where i

play37:48

teach it's it's you know humility

play37:52

you don't know who

play37:54

who

play37:55

the kids are who are going to go to

play37:56

great things yeah you know you sometimes

play37:58

see them and you kind of get a sense but

play38:00

everybody has something different in

play38:01

them

play38:02

and people who in a classroom

play38:05

don't say anything or don't do anything

play38:07

you come they come talk to you later and

play38:09

they're like spectacular and then like

play38:11

these people who you know are always

play38:13

talking and always saying stuff and

play38:14

sound really smart they're actually kind

play38:15

of empty vessels you know so you're

play38:17

you're a little bit judge people yeah

play38:19

don't judge people you're a little more

play38:20

humble about um

play38:22

everybody has different capacities and i

play38:24

don't i judge people much less than i

play38:26

used to because i just i don't know what

play38:28

your capacity is all right you know i

play38:30

don't know what you're in the back of

play38:31

the class who doesn't speak could be

play38:32

like

play38:33

the next best whatever yeah and i think