Pod Insights The School of Greatness 518 Become a Master of Finance with Harvard Professor Mihir Desai About this episode "The more safety nets you buy, the more you value safety nets." - Mihir Desai If you enjoyed this episode, check out show notes, video, and more at http://lewishowes.com/518 Get more from Lewis! Get my New York Times Bestselling book, Make Money Easy! Get The Greatness Mindset audiobook on SpotifyText Lewis AIYouTubeInstagramWebsiteTiktokFacebookX
Transcript 11,206 words · 2 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Lewis Howes? This is episode number 518 with Harvard professor, Mihir Desai.
0:07 Lewis Howes? Welcome to the School of Greatness. My name is Lewis Howes, a former pro athlete turned lifestyle entrepreneur. And each week, we bring you an inspiring person or message to help you discover how to unlock your inner greatness. Thanks for spending some time with me today. Now let the class begin.
0:33 Lewis Howes? Dave Ramsey said, "You must gain control over your money, or the lack of it will forever control you." Ah, my friends, we've got another professor in the house. His name is Mihir Desai, and he's a professor of finance at Harvard Business School and a professor of law at Harvard Law School. He received his PhD in political economy from Harvard University, his MBA as a Baker Scholar from Harvard Business School, and a bachelor's degree in history and economics from Brown University. One of the smartest guys around on this topic, and Professor Desai's area of expertise includes tax policy, international finance, and corporate finance.
1:17 Lewis Howes? His research has been cited in The Economist, Business Week, The New York Times, and several other major publications. And he has testified several times to congressional bodies, including most recently, the Senate Finance Committee on Corporate Tax Reform and Inversions. And if your head is hurting already from all this language and lingo, and just the idea of finance in general, then welcome to the show, because this has always been a challenging concept for me, understanding finance, economy, things like that. It's always been hard to understand, and I didn't really get it. And I shied away from these conversations earlier in my life,
2:01 Lewis Howes? even in my early twenties and in college, just because it just seemed like it was hard work to understand how money works, why we use money. Money, how to leverage money, how to make money, how to save money, how to invest money, all these things. Some of the big things we talk about are the most confusing things regarding finance and why we're confused in this space. Also, why debt is both fantastic to have and dangerous. And Professor Desai talks about both of these. Why it's almost impossible to tell if you're lucky or skilled in finance, the biggest leverage you can possess in business and life, and so much more on this topic. I think you guys are really gonna love this and make sure
2:43 Lewis Howes? to take an image on your phone if you're listening to this on Spotify or SoundCloud or iTunes and take a screenshot of this podcast image right now and post it up on your Instagram story or tweet it with the link lewishouse.com/518 to let me know you're listening so I can connect with you while you're listening to it. And before we dive in, I want to give a shout out to the review of the week. This is by Lauren Silveria. Over on iTunes, she gave a five-star review saying, "Life-changing inspiration. The School of Greatness podcast has inspired me to challenge myself daily and check in to be sure I'm making choices that
3:24 Lewis Howes? fully align with my goals. From the inspirational guests to five-minute Fridays that spark the fire in me that I need to keep going, this podcast has changed my life. I have a greater vision for my purpose." Thank you, Lewis. Well, thank you, Lauren, for being the fan and the review of the week. It means the world to me. And every time I go on iTunes and check out the reviews, it just lights me up of how we, as a greatness team, are making a difference and really impacting people by bringing on the best of the best in the world to share their stories, secrets, strategies to help you overcome a challenge you may be facing and get to that
4:03 Lewis Howes? next step. And we definitely have that with Professor Desai from Harvard today. And before we dive in, guys, we are almost sold out with the Summit of Greatness. It is one month away, and the price is increasing, double the price. Next week. So if you want to learn from some of the most inspiring speakers in the world, connect with other passionate, innovative, inspirational human beings flying in from all over the world as well. It's gonna be a thousand people at this event. It's going to be an experience like you've never had before. So many people keep asking me, what's it gonna be like? It's hard to explain. The people from last year continue talking about how amazing it was.
4:46 Lewis Howes? And we've got some big things planned this year. So make sure to go to summitofgreatness.com. Get your ticket right now before the price goes up. And I can't wait to give you a hug in September for the Summit of Greatness. All right, guys, I hope you enjoy this one. And the second part of Professor Week with Harvard Professor Mihir Desai.
5:09 Lewis Howes? Welcome back everyone to the School of Greatness Podcast. We have a Harvard professor in the house today. His name is Mihir Desai. Is that right?
5:17 Speaker 01 Exactly.
5:18 Lewis Howes? Mihir Desai.
5:19 Speaker 01 Exactly.
5:19 Lewis Howes? Good to see you. Thank you so much for being here.
5:21 Speaker 01 No, my pleasure, Louis.
5:22 Lewis Howes? We got connected through, I guess Eric Barker mentioned coming on the show.
5:25 Speaker 01 Exactly.
5:26 Lewis Howes? And then I checked out your stuff. I always vet it with Christine. And I'm like, see if this guy's legit. And this would be interesting. And you passed the test for it to be interesting enough.
5:35 Speaker 01 Very good. Excellent.
5:36 Lewis Howes? You've got this book called The Wisdom of Finance: Discovering Humanity in the World of Risk and Return. And you've been teaching finance, entrepreneurship, business. You teach at the Entrepreneurship Program and the Law School at Harvard, correct?
5:50 Speaker 01 Exactly.
5:51 Lewis Howes? For 18 years you've been teaching there.
5:52 Speaker 01 Yeah.
5:53 Lewis Howes? You've been writing journal papers for 18 years, right? And teaching and kind of in the weeds and the thick of it with your students.
5:59 Speaker 01 Exactly right.
5:59 Lewis Howes? Right? And so why did you decide to do this book? And why is this topic so important? And share about that.
6:06 Speaker 01 Yeah. So you're right. I was a totally traditional economist, writing academic papers. And then basically, over the last five years, I wanted new challenges. You know, so the thing about academia that's crazy is you can look at your life 20 years forward, once you get tenure, and you know exactly what it is. And that's great. And it's terrifying. And so for me, it was more terrifying. So I wanted to change. So I started an online course. I started teaching at the law school. And then I wanted to write a book. It's really, to me, it's one of the biggest challenges I've taken on. It's not the way I write, you know, when you write in academia, you write totally tight.
6:39 Lewis Howes? Yeah.
6:39 Speaker 01 You can only say so much.
6:41 Lewis Howes? Yeah.
6:41 Speaker 01 You've got to like really, really, really be tight. This is loose and it's like stories. And so it was a massive challenge for me. What I really wanted to do with the book, though, is one challenge myself, but then B, you know, I teach finance and finance has got some serious problems. And so I wanted to address them. And the really, the two big problems I wanted to address is one, I want to demystify finance. Because I think it's way too important for people not to understand. And a lot of people demonize it for like the wrong reasons. And then the second thing is chunks of finance are broken. We've got to make it better, right? We lived through like this massive financial crisis. We've got to make it better.
7:14 Lewis Howes? Yeah.
7:14 Speaker 01 And so this book is an effort to say, look, there's nobility in finance. And you should feel proud of that and you've got to live up to it.
7:21 Lewis Howes? Hmm.
7:21 Speaker 01 You can't just kind of behave in a bad way.
7:23 Lewis Howes? Yeah, we're never taught these things growing up and, you know, elementary school, high school, college, how come these things are never really taught until you get to college unless you take those classes?
7:32 Speaker 01 Yeah.
7:32 Lewis Howes? And then we're just kind of illiterate with finance and we're broke and don't know what to do with the rest of our lives.
7:38 Speaker 01 I mean, like you think about student debt, you think about credit card debt, even as an example, I know doctors who come out, they start a private practice, they have no clue what they're doing financially.
7:47 Lewis Howes? It's zero clue.
7:48 Speaker 01 It's, and it's kind of a crime, right? In fact, the level of financial literacy is so low. And if you think about the mistakes people are making, like the terrible mistakes they make with debt. I mean, they're, they're life-changing decisions. And if you don't have some-
8:00 Lewis Howes? Could haunt you for the rest of your life.
8:01 Speaker 01 Yeah, they, they hang over you forever. Um, and we don't do anything. In fact, that's one of the, I was joking with my daughters, I have three daughters and one of my girls was telling me like the next project should be the kids book version.
8:14 Lewis Howes? Mm hmm. That's true. Yeah, it's true.
8:16 Speaker 01 It kind of struck me as crazy, but uh, these ideas, you've got to get them to kids.
8:21 Lewis Howes? Yeah.
8:21 Speaker 01 Because if you don't get them to kids, they'll never, they'll never learn it.
8:24 Lewis Howes? So is this like the advanced version of Rich Dad Poor Dad then? Is this kind of like, cause that's the story of like a rich dad and a poor dad and what they did and how they bought and how they whatever?
8:33 Speaker 01 Yeah, you know, it's funny because that book, you know, it's kind of in a way, it might be easy to ridicule, but it has had an amazing impact.
8:40 Lewis Howes? On so many people.
8:41 Speaker 01 On so many people.
8:41 Lewis Howes? Opening them up and be like, oh, if I just invest this way on something, I make more money than just.
8:46 Speaker 01 Well, you know, so it's funny. As an academic, you tend to look down on that kind of stuff, right? You look down on it. You're like, whatever. And the reality is.
8:52 Lewis Howes? You're more pissed that he's just created such an empire around a simple concept, right?
8:56 Speaker 01 Right. And you kind of, but you kind of look down on it frankly enough. And I don't want to write that book, but I want to speak to those people. And so, yeah, you're right. I'd like to think about this as a more elevated or advanced version of that.
9:06 Lewis Howes? Of course.
9:08 Speaker 01 And I think hopefully it could be. I think if we get this into like schools and we get these ideas out there. People want to know finance. They want to learn it because they know how important it is. It's really interesting on Rich Dad Poor Dad, that thing has been on the bestseller list for like 25 years.
9:23 Lewis Howes? It's crazy. It keeps selling and selling.
9:25 Speaker 01 You look at the bestsellers in finance and investing, they're the same books for like the last 20 years. And, you know, Ben Graham, Intelligent Investor, Rich Dad Poor Dad, there's like five books.
9:37 Speaker 01 Which makes you realize there's a ton of demand and there's not enough supply, right? And so this is like a version of that, uh, which is trying to say, well, look, let's try to speak about finance in a clear way.
9:45 Lewis Howes? Yeah. So what are the things that we're confused about the most with finance? In general, as you know.
9:50 Speaker 01 Well, as a society, yes. So I think there's a couple, you know, one is borrowing and debt. I think people either think it's terrible, um, which is wrong. It's wonderful.
10:03 Lewis Howes? Borrowing money and having debt.
10:04 Speaker 01 Having debt. I mean, the thing what people don't realize is, and it's always been demonized through history, right? Like so Socrates said it was, you know, immoral to charge interest. And religions, a lot of religions don't allow payment of interest, but they don't realize that actually debt is fantastic. So if you're a poor person and you want to access opportunities, you couldn't access otherwise. There's only one way to do that, which is through borrowing. You want to live in a house you don't have any right to live in. How do you do it?
10:31 Lewis Howes? Borrow.
10:31 Speaker 01 You borrow.
10:32 Lewis Howes? Yeah.
10:32 Speaker 01 You want to invest in education. You don't have the resources. How do you do it?
10:35 Lewis Howes? Borrow.
10:35 Speaker 01 It's like a liberating thing. So people don't understand that piece of it and then they don't understand the dangers. They don't understand the dangers, which is, once you do that, it is a really, really serious commitment. And you can find yourself in a world, and I tell the story of what's called debt overhang, which is this finance idea, which you have so much debt that you can't actually do the best things for yourself, because it's like looming over you. And that is the trap people fall into. So they kind of either ignore the real virtues of it, or they kind of just say, well, it's great, and I'll just do it, it's not a big deal. So that I think is one big piece on the personal side.
11:12 Lewis Howes? How do we make a decision of knowing like, okay, I'm stuck in this rut, and if I go to this school that costs me 50 grand a year, I don't know what Harvard is, maybe it's 80 grand a year now, then I'm gonna get the opportunities and the insights that will help me for the rest of my life, but I'll have a half a million in debt from four years.
11:31 Speaker 01 Exactly.
11:32 Lewis Howes? That's gonna take me the rest of my life to pay off.
11:33 Speaker 01 Yeah. Well, so here.
11:35 Lewis Howes? How do you make that decision?
11:36 Speaker 01 And the short version is, so you gotta really think hard about what the upfront investment is. And then the hard part for people is, you gotta think about the incremental wages. Like, how much more am I gonna make? Not how much am I gonna make, but how much more am I gonna make because of this investment?
11:48 Lewis Howes? How much better my lifestyle gonna be, right?
11:50 Speaker 01 Exactly, because of this investment. And people don't usually do that. And there's also, you know, the truth about education, and I'm not just saying this because it's my business, I'm not just talking my own book, but the truth is, on average, it's a great investment. That doesn't mean it's always a good investment. There's a lot of crappy investments out there. There's a lot of really bad investments out there. But on average, it's great. What you gotta think about is, there's a labor market out there, and you gotta have skills that are gonna be valued.
12:16 Lewis Howes? If you don't develop the skills that aren't valued, then you're not gonna be able to make money.
12:20 Speaker 01 You're not gonna be able to make money. And then you have to ask yourself, if you wanna do a degree, and you wanna do something that is not really valued in the labor market, you know, whatever it might be, let's say you wanna go to cooking school, just to learn cooking, you should understand, that's basically consumption. It's not an investment. You're just having a good time.
12:35 Lewis Howes? It's pleasure.
12:36 Speaker 01 And if you wanna do that, you go do that, but don't kid yourself and think you're gonna get it paid off. That's just you having fun, like you going to the Super Bowl, or some big thing you wanna go do. So people have, I think that's what's confusing about a lot of these things, they're both investment and consumption. It's like a house, right? It's a big investment. But you live in it and you consume it all the time, right? And so it's got these, there are these things that are weirdly both. There's stuff you invest in and there's stuff you like really, really enjoy.
13:01 Lewis Howes? Sure.
13:01 Speaker 01 Um, not like stocks, which are an investment and not like food, which is consumption.
13:06 Lewis Howes? Yeah.
13:06 Speaker 01 Right? These things are actually in between and that makes it really confusing, I think, for people.
13:09 Lewis Howes? Got it. What else should we be aware of? What are the other big things that we do?
13:13 Speaker 01 So I think the other big thing that people struggle with in finance and outside of finance is they think there's a lot of skill in finance.
13:22 Lewis Howes? In, in what? In managing, making, investing money?
13:24 Speaker 01 Money and investing money. And when they get good results, they think it's their skill. So the lesson of finance is it's almost impossible to tell the difference between luck and skill other than over the long run. Right? So you got a buddy, I got a buddy and the buddy says, you know what? I beat the stock market like three years in a row, five years in a row. I'm awesome.
13:43 Lewis Howes? Yeah.
13:43 Speaker 01 And the answer is, I have no idea if you're awesome. You may be awesome.
13:47 Lewis Howes? The market may have just been going up.
13:48 Speaker 01 Exactly.
13:48 Lewis Howes? And you just got in the right time and whatever.
13:50 Speaker 01 And in fact, like, you know, there's this old coin tossing trick, right? Which is you get 80 people in a room. You toss a coin 10 times and you kind of go through it. And then you say, who got nine heads? Maybe one or two people. Who got 10 heads? You're pretty much guaranteed to get somebody in that room get 10 heads.
14:06 Lewis Howes? Hmm.
14:07 Speaker 01 And then you ask that person, you know, how did you do it? And the person, of course, will honest, usually answer honestly, which is it was luck.
14:14 Lewis Howes? Yeah.
14:14 Speaker 01 But when you're a mutual fund manager and you beat the market 10 years in a row.
14:17 Lewis Howes? I'm the man. I'm the woman.
14:18 Speaker 01 I'm the man, I'm the woman and I did it, right? And so I think people think there's a lot of skill and it's, the truth is it's really almost very, very hard to beat the market persistently. There may be a few people out there who can do it well over the long run. I don't know who they are. You don't know who they are. Don't believe the hype. So for example, you know, as you may know, this is this massive rise in indexation, right? So like people basically just buying, uh, exchange traded funds or index funds. And that's because people have figured out.
14:47 Lewis Howes? That is what has worked over the years.
14:50 Speaker 01 That's what's worked over the years?
14:51 Lewis Howes? Just invest in the index fund and 30 years, you're going to make more than if you try to play.
14:55 Speaker 01 You try to play the game yourself or frankly, if you try to pay somebody who tells you they know how to play the game.
14:59 Lewis Howes? Isn't this what Buffett does? He just invests in index?
15:02 Speaker 01 Well, so Buffett is like a guy who's, Buffett's super interesting, right? Because he actually, people think he's beaten the market for a long period of time and he may have, but he also doesn't believe in a lot of these things, right? He doesn't believe you can just kind of be successful, no problem. And in fact, the way he works now, it's so interesting about Buffett. He basically monetizes his halo, right? So when he invests in a company, people rush in. And so what does he do? He kind of like during the financial crisis, he bought preferred stock at Goldman and GE. He kind of rescued them. He got terms that no you and I could not get. Of course. Right? Cause he's Buffett. And then he does. Influence. Yeah, he gets and he gets like, he got like terms I would never get in the market if I went to go buy that stock.
15:43 Speaker 01 And then he turns it into performance. So, you know, it's really interesting. And I think that's one of the big problems in finance. It's just we think that there are these super skillful people out there and they're super smart. Reality is some of them may be, but you don't know who they are. Yeah. What should we be doing with our money then? So that's a great question. So it kind of depends on who you are, right? So let's think about a typical kind of person. Yes. Let's say working and they have a income stream, maybe they have a family. So in terms of savings, the first thing is save. How much? As much? The truth is, very few people over save. Right? So what does over saving mean? Over saving means I'm depriving myself today so that when I retire, I have more.
16:27 Speaker 01 Very few people make that mistake. Like 98% of people are making the mistake of not depriving themselves today so they can have more later. So for almost all people, it is save more than you're doing now. That's almost universal. As much as you can. Yeah, I mean, as much as you can. And at some point, you're going to be saying to yourself, you know, I'm skimping too much. I'm making myself unhappy because I'm living in a shack and I'm like, I don't need to live in a shack. Eating ramen noodles. Yeah. And at some point, you know, like you have to kind of get a little bit better and you have to move up. But first is you should be saving from the time you're earning money. It's really, really important. It's like a tiny little bit as much is great. Second thing you got to think about is. Where should you be saving it? So the first thing is, and this is going to sound a little nitty gritty, but it's really true.
17:11 Speaker 01 Do anything that lets you save money on taxes. There's all a lot of tax advantaged ways to save. Do it. What are the top five in your mind? So IRAs, Roth IRAs, you know, pension plans that are sponsored by companies. People don't opt into them. It's crazy. Yeah. If you're a private entrepreneur, you can set up your own. So like, if you think about like fees and management fees and returns. If you save 30% upfront because of taxes.
17:38 Speaker 01 Like that's a victory, you know, like that.
17:40 Lewis Howes? Who cares about the fees.
17:41 Speaker 01 Yeah, exactly. And it's like.
17:42 Lewis Howes? A lot of people will say like these IRAs are bogus and you're not going to really earn money over time. It's like all these fees and all this like.
17:49 Speaker 01 Well, it depends on.
17:50 Lewis Howes? Marketing and blah, blah, blah.
17:51 Speaker 01 Well, once we get into the IRA, that's fine. But first, put it into something tax advantage.
17:54 Lewis Howes? Got it.
17:54 Speaker 01 Any tax thing you have.
17:55 Lewis Howes? Work growth tax deferred.
17:56 Speaker 01 Exactly. And just max out on tax stuff. The government's telling you should, you should do it.
18:00 Lewis Howes? So that's IRAs, pensions, that's, is that insurance policies as well?
18:04 Speaker 01 Even like health savings accounts, flexible spending accounts. People don't use that stuff. It's also.
18:08 Lewis Howes? I max out all that.
18:09 Speaker 01 You gotta max out on that.
18:10 Lewis Howes? I do it all.
18:10 Speaker 01 And it's forced savings too. The other cool thing about it is it's kind of forced savings because they take it out.
18:15 Lewis Howes? Right.
18:15 Speaker 01 Before you even get to touch it. And then the final thing is, uh, don't pay a lot of money to have people manage your money. Now, this is like, you know, anathema to people in finance because there's a lot of wealth advisors and brokers out there. And the reality is unless you have serious coin.
18:31 Lewis Howes? Don't pay a lot in fees is what you're saying, I'm assuming, right?
18:34 Speaker 01 Yeah. So like, for example, take like half your money, put it into like a government bond fund. Take like half your money, put it into an equity index fund and then sit back.
18:43 Lewis Howes? Yeah.
18:43 Speaker 01 If you want to play and have fun, take a small chunk of your wealth and just go have fun. But don't do it with all your wealth and don't pretend like you're doing something serious. You're just having fun.
18:54 Lewis Howes? Yeah. If you lose it, you lose it.
18:55 Speaker 01 You lose it. It's just like buying tickets to the movies.
18:57 Lewis Howes? Yeah.
18:57 Speaker 01 You're just going to like have fun with this money over here and you're going to invest it because this, your buddy told you.
19:01 Lewis Howes? Right.
19:02 Speaker 01 His company's great. That's fine, but don't pretend. It's like consumption again, right? You're having fun. You're not investing. You're just going and goofing off.
19:09 Lewis Howes? Yeah.
19:09 Speaker 01 So like the big rules are, you know, save more than you think you need. Second, try to think about taxes. It sounds boring, but it's so first order. Third, don't pay a lot of people money for managing your money. Uh, and then fourth, create a little fun space. And then go have fun. Um, if you have a lot of money, you can take 10% of it. And your buddy comes to you and says, I got a business. I want you to invest.
19:33 Lewis Howes? Give me five, 10 grand and put it in there.
19:34 Speaker 01 Yeah, then that's fine. But don't pretend like you're gonna get it back and
19:38 Lewis Howes? No, I've invested in many startups that I've had zero, I've made zero return over the last eight years.
19:46 Speaker 01 Well, and you're not alone, right?
19:48 Lewis Howes? So many people have.
19:49 Speaker 01 So what do we know about startups, right? Like, so like eighty, ninety percent of them are going to be zeros.
19:53 Lewis Howes? Yes.
19:54 Speaker 01 And then five percent, if you're lucky, will be ten X, five X.
19:58 Lewis Howes? Yeah.
19:59 Speaker 01 And then there's a bunch of junk in the middle, but basically it's totally bimodal.
20:02 Lewis Howes? And for me, I went into it thinking I'm gonna lose this all. Like, it's, it's a way for me to learn, to build relationships, to like, get in with a certain industry.
20:10 Speaker 01 Well, that's interesting.
20:11 Lewis Howes? And so I was like, this is my Harvard degree. Yeah, this is like my investment in something that's
20:18 Speaker 01 Well, you're learning, you're meeting people, and you are having fun sometimes, right? Like, it's just, it's fun. It's interesting. I think as you get older, it gets harder to do that because, you know, when I was thirty, I was willing to do that stuff. I was willing to write checks.
20:32 Lewis Howes? Three kids in here.
20:33 Speaker 01 Now you got three kids and you're like, geez, I don't know if I should be doing that. But that's the other big thing, which is when you're young, you should be taking more risk. And that should taper down over life.
20:43 Lewis Howes? Sure.
20:43 Speaker 01 Right? Because I'm forty-nine and, you know, you gotta start tapering down your risk profile. So when you're young, you should be taking a little bit more risk. And that, I think, is something people don't do enough of.
20:52 Lewis Howes? Yeah. Do you feel like as a, as a professor, you follow your own advice? Because there's a lot of people that teach that don't actually do what they say you should do.
21:00 Speaker 01 I do most of it right. Well, what I just said, I'll tell you what I do wrong. Well, let me just say what I do right.
21:07 Lewis Howes? Startups.
21:09 Speaker 01 Well, I used to, I used to write checks to friends and former students, and I do that less now because I just, you know, I'm just more measured about the way I think about things. And I think the startup scene is so crazy right now, frankly, in addition. I think the thing I do wrong is I, like everybody, I tend to overestimate, you know, my abilities a little bit. So I like investing. I do it a little bit. I think if you actually look, I think I've done, you know, pretty well, but I think if you actually looked at my returns.
21:36 Lewis Howes? Over time.
21:37 Speaker 01 I think I'm probably way overestimating my ability. And if you thought about like, if I just parked it somewhere, I would have probably done better and I would have spent less time in my life, like wasting on that. So I probably overestimate my abilities and I think everybody does. But I do follow all the tax stuff. I do follow the indexation stuff, no paying fees. I actually worry sometimes that I save too much. Like I worry that I'm, I'm too worried about things in the future.
22:03 Lewis Howes? That's like the good Indian way, right? It's like, that's the way you're raised and how it's supposed to be.
22:08 Speaker 01 Yeah. So I'm, I was born in Bombay. I mean, I, my parents, you know, when we came, we, you know, money was something you thought hard about. I mean, I remember my parents had a little notebook where I had all my little accounts and what I spent when I, since I was age seven or eight. And you're right. Once you're an immigrant, you're never, you know, you never lose that. You never lose that sense of, wait a second, you know, we don't have as much as we need. We have to fight a little harder. We gotta work a little harder. We gotta save a little more because who knows what's gonna happen. And I think Indians always, you know, Indians save a lot in gold and in otherwise, right? They do a lot of crazy stuff. But especially on money stuff, they, they worry about that stuff more than they probably should.
22:48 Lewis Howes? Yeah.
22:50 Lewis Howes? What are some of the lessons we should be knowing or understanding about finance and the wisdom behind it?
22:57 Speaker 01 Well, so in the book.
22:58 Lewis Howes? Risk and return and all that stuff.
22:59 Speaker 01 Yeah. So in the book, what I try to do is take these ideas that people in finance would be in a textbook, right? And I basically try to explain them just using stories.
23:07 Lewis Howes? Without graphs and charts.
23:08 Speaker 01 No graphs, no equations.
23:09 Lewis Howes? Stuff that hurts my brain.
23:10 Speaker 01 And they hurt a lot of people's brains. And there's no reason to do that, that way, right? So for example, risk management, which is about options and diversification, like some of the most complex derivatives.
23:23 Speaker 01 So in the book, the way I try to explain it is I use Jane Austen in Pride and Prejudice. So there's like a, she's a fantastic English novelist. And she basically tells a story of these young women who are facing risk in the marriage market. Right? There's like these suitors who come along and some of them are drunks and some of them have a lot of money, but they're mean and some are nice, but they don't have any money. You know, it's all about that. It's like, that's the whole plotline.
23:44 Lewis Howes? What do I want to, do I want to have this debt of someone mean to me for the forty years?
23:47 Speaker 01 Exactly. Or do I want to like be with someone I'm happy with, but will never make it, you know?
23:52 Lewis Howes? There's no passion or something.
23:54 Speaker 01 This is exactly what Jane Austen is about, right? And so these young women are really exposed and men, by the way, she points out, have it really easy. Cause if men make a mistake, it's okay in the nineteenth century, right? But women, if you make a mistake in the marriage market, it's over.
24:08 Lewis Howes? You have to weigh your options.
24:09 Speaker 01 You have to weigh your options. So she actually describes options and diversification as like strategies for dealing with risk.
24:15 Lewis Howes? Wow.
24:16 Speaker 01 And it's kind of nice because then options aren't some crazy derivative thing, but they're actually like something in your life.
24:22 Lewis Howes? Right.
24:22 Speaker 01 And in fact, actually, one of the, I think the things I'm proudest about this book is I wrote a piece for the Crimson, which is the Harvard newspaper, called The Trouble With Optionality. So the reason I really liked that piece is people in finance overlearn the idea of options, right? Cause they think.
24:37 Lewis Howes? Give me the, give me the breakdown of options.
24:39 Speaker 01 So the idea of options is, you know, you want to have choices, right? And the more choices you have, the better. And options are contracts which basically say you don't own something, but you have the right to own something.
24:49 Lewis Howes? To buy it.
24:50 Speaker 01 And people love it because that's what optionality is, right? So a lot of young people I see are obsessed with optionality, right? They're like, okay, I'm going to go to school because I need more optionality in my life. Cause then I'll have more opportunities available to me. I'm going to be in part of networks because I need more optionality. I'm going to go work at a prestigious firm because I need more optionality in my life. So the thing I, and that sounds great, right? Cause then you get to do more things in the future. So what I tried to point out in the book and I do this essay is, you know what? Most of those people, they get obsessed with buying optionality and that's all they ever do.
25:23 Lewis Howes? And they never make a decision.
25:24 Speaker 01 They never go and exercise the option. They never make the big investment because buying options is addictive. Just buy more and more and more and then you have to pull the trigger on something big. And you're like, no, more optionality, more optionality. That's all I want. And so then they end up, and I've seen this with so many kids because they're, these are kids who are really smart. They got like the best safety nets in the world. And then they keep buying more safety nets. And you're like, what the heck are you doing?
25:50 Lewis Howes? Just go do something.
25:51 Speaker 01 Do something. And the truth, what's weird is people don't understand, like the more safety nets you buy, the more you value safety nets. You're like, I gotta buy another one because I'm so used to doing it. And then you end up like 40 years old and you're like,
26:02 Lewis Howes? I've got all these degrees. I've got all this stuff.
26:04 Speaker 01 And I have all these safety nets, but I've never really done the risky thing that I wanted to do. And it's, it's really sad. And so that's what I see with optionality. That's an example that's kind of throughout the book, which is you take this finance idea, which sounds really weird and abstract, options and optionality. You try to explain it with Jane Austen. And then you say, look, it actually applies to your life. And like you, you may be getting it wrong, right? So even if you're in finance, because people in finance talk about this all the time. They talk about marriage as the death of optionality. Right? That's what, you know, and it sounds kind of like a ridiculous thing to say, but that's the way you, people think about it.
26:39 Lewis Howes? In the relationship world, sure.
26:41 Speaker 01 Yeah, it's the death of optionality. And, but people don't also realize like, that's how great things happen, right? When you close off options. And so people in finance is consumed by that. So I do that with options in the book. I do that with bankruptcy. So the, I really like the bankruptcy chapter comes at the end. But I tell the story of this guy, Robert Morris, who I'm sure, I imagine you've never heard of, nobody's ever heard of. That's what's great about the story. Nobody's ever heard of him. So he's the richest man in the colonies.
27:11 Speaker 01 He finances the battle of Yorktown with his personal script. Okay. George Washington asks him to be the first secretary of the treasury before he asks Alexander Hamilton. And he says, no. So why does he say no? He says, no, because he lost some wealth during the Revolutionary War, helping the young republic. And Washington says, become the first secretary of the treasury. He's like, no, go ask Hamilton. I gotta rebuild my wealth. He goes back, he rebuilds his wealth. He owns 40% of New Jersey, like the state. He owns a quarter of the district of Columbia, which was going to become the capital. And then he goes bankrupt.
27:48 Speaker 01 And what did we do to people who went bankrupt back then? He went to jail. Wow. And he went to jail and he was sitting in a jail in Philadelphia. He went from the richest man in the colonies owning to jail. He probably owned the land where the jail was. So that's actually, the reason I tell that story is that's how we used to think about failure. We used to think about failure. People fail. They're morally problematic. They need to be punished. So the reason I tell that story is George Washington visits him in the jail in Philadelphia. And actually, it's a great story because George Washington risks yellow fever. I mean, these jails were terrible. And he and other founding fathers look at Robert Moore sitting in jail and they're like, something's wrong.
28:31 Speaker 01 This guy helped us finance the revolution and he's sitting in jail. That leads to the way we rethink bankruptcy with the 1800 Act of Bankruptcy, 1800 Bankruptcy Act, which where we basically say, no more punishing people who fail. So now what do we do with people who go bankrupt? We actually prioritize them starting again, right? We're like, we're going to protect you from the creditors, right? We're going to actually get you a clean slate. We're going to get you a stay. We're going to actually do all the things to help you, which I think is really analogous to how you should think about failure. Right? Which is you don't want to stigmatize it. Historically, what have we done with failure? We stigmatize it like, I failed, I'm bad. You know, you failed, something's wrong with you. The way we should think about failure is the way finance thinks about failure, which is it happens.
29:17 Speaker 01 Let's get a clean slate. Right. Let's start again and let's protect you from all the people who have claims on you. And then let's kind of get you started. So that's another example of kind of saying, you know, bankruptcy and this idea in finance actually applies to the way you can think about your life. In that case, failure. The other example that I kind of like is leverage. So this is about, yeah, so that's about debt, right? And people in finance love leverage. They're like, because their fortunes have been built on leverage. Think about a lot of people, especially in real estate, a lot of areas, it's been built on leverage. They borrow money and then it allows them to own assets. They have no right to own. They leverage that asset. They leverage that asset and then if things go well, their returns are outsized. Right?
30:01 Speaker 01 Because leverage, that's what leverage does to your returns. And so I kind of talk about that. But then what I try to do in the book is say, you know, that's totally analogous to commitments. What is debt? It's a commitment. It's like a really, really serious commitment. So I do this via the Merchant of Venice, Shakespeare's story, right? Nominally, it's about debt. This is the play where Shylock is this money lender. And he's like, I want to pound your flesh because you didn't pay me back. People think it's about debt. It's really about commitments. Like, it's about commitments between people. So the point of the story is that commitments are like debt. They allow you to do things you wouldn't be able to do otherwise. Commitments to people, to spouses, to families, to jobs, to organizations. You get to do things you can't do by yourself. For example, what do you mean?
30:44 Speaker 01 So I give a couple of examples. So I talk about these two artists. One is George Orwell, who wrote 1984. And one is Jeff Koons, who's a modern artist. You may have heard of these, makes these massive sculptures. Yeah. So George Orwell is a low leverage guy. He is like living in London. Everybody wants a piece of him after World War II. He's like, I'm going away. He goes to the Scottish Islands, Hebrides Islands, and he spends three years alone, and he writes 1984 by himself. That's low leverage. He's not committing to anybody. He's doing it all by himself. Right. Jeff Koons, I think is arguably the greatest modern artist. The Whitney Museum in New York had a retrospective of just him for the whole building. He creates these sculptures that are
31:27 Speaker 01 the size of this room. One's called Play-Doh. They're made of metal and glass and just incredible stuff. He has 150 people in his factory. He doesn't actually know how to use the material that he's working with. He relies on other people who use that material. Kind of like the visionary. He's the visionary. And he's actually like literally in one interview says, I'm the idea guy. He's gone bankrupt like three times. He's bankrupted dealers. Wow. He is living a high leverage life. And he produces art that he wouldn't be able to produce otherwise. You can't do that by yourself. No. So the point is kind of like to say commitments and embedding yourself in a world of networks and commitments actually allows you to do stuff that you wouldn't be able to do otherwise. Right. I end that chapter with a great quote from Jefferson. Actually, the picture on
32:10 Speaker 01 the cover of the book is Archimedes. So Archimedes has a famous quote about leverage, which is leverage comes down to a lever, right? And a lever is this amazing thing in engineering. When you push down on it, you get to move stuff. You've got no right to move, right? That's like leverage in finance. You get to own a house you have no right to own. So Archimedes says, you know, give me a place to stand and a lever and I'll move the world. So Jefferson says, the biggest lever in life is your reputation. So if you commit to the world.
32:42 Lewis Howes? It's like Buffett.
32:43 Speaker 01 Yeah, like exactly like that. Exactly what Buffett does when he monetizes his halo. So Jefferson says, basically, if you're good to the world, then the world, because you have a good reputation, will let you do things you have no right to do. Which is true, right? That's what reputations do. And that's why it's so hard when you lose your reputation. Because reputation is the stuff that lets you say, I trust you. Go ahead. You can do it. So you commit to good behavior and then you get to do things you have no right to do. And that's the essence of commitments and that's kind of the essence of leverage as well.
33:11 Lewis Howes? That's powerful. Who's the smartest person you've taught come through one of your classes?
33:17 Speaker 01 Wow. So I've had, I've had the good fortune to, you know, teach a lot of great people. God, you know, I have had, I'm so proud of a lot of my former students. So it's kind of hard for me to think about that.
33:30 Lewis Howes? Choose one. I get it. Yeah. There may be a few that you could think of who've done extraordinary things or.
33:34 Speaker 01 God, you know, I'll, I'll tell you, I'll give you kind of a bunch of different people because I think it's useful to kind of. They're different types of people, right? So an entrepreneur, there's, you know, entrepreneur who I think is really spectacular. Sarah Kaus, she built Swell, you know, the water bottles?
33:51 Lewis Howes? Yep. Yeah. Very popular right now.
33:54 Speaker 01 She's spectacular and I, I don't think she might be telling you, you know, I had her as a first year student at HBS and she was, she was really nervous about finance and she was really, you know, nervous. And she has just built like a great company.
34:08 Lewis Howes? Yeah.
34:09 Speaker 01 Out of something that, you know, the water bottle business, you might not have even thought about, but she's made it into something aesthetically beautiful. Like that's spectacular.
34:17 Lewis Howes? Yeah.
34:18 Speaker 01 I'll give you another type of person because that's like an entrepreneur type of person. Another type of person is I've had a couple of authors. So Lee Carpenter has written a book about Navy SEALs. Gail Lemon wrote Ashley's War, which is a spectacular story. I think they like took a totally different path.
34:35 Lewis Howes? Yeah.
34:36 Speaker 01 Like, you know, they go to business school and then they go write novels and journalism. Spectacular. And then I had a former student who went to government. I've had a number of students who've gone to government service. So guy who used to run the IRS, Doug Schulman, he was a former student. So I guess I picked those three kind of randomly.
34:52 Lewis Howes? Runs the IRS.
34:53 Speaker 01 He used to, yeah. And so I picked those three people because I think it's one of the luxuries I have is I see people who have impacts on the world in very, very different ways. I don't really know who's smartest. You know, the truth is, Louis, I don't, you know, as you get older, I think smarts become less and less, which, you know, let me put it differently. I'm surrounded by a lot of smart people.
35:15 Lewis Howes? Yeah.
35:16 Speaker 01 And I have that luxury.
35:17 Lewis Howes? Smarts don't matter unless you can execute well and unless you're a good person, unless you care about people and make an impact. It's like,
35:22 Speaker 01 And especially.
35:23 Lewis Howes? Who cares how smart you are?
35:24 Speaker 01 And, you know, I hate to say that, but like at some level, like smarts are cheap.
35:27 Lewis Howes? Yeah.
35:27 Speaker 01 At some level, smarts are the valuables, the scarce resource. And then at some level, smarts are not the scarce resource.
35:33 Lewis Howes? Yeah, especially at Harvard. Everyone's, you know, a thousand smart people in one room.
35:37 Speaker 01 Yeah. And so like, is one person smarter than the other? Yeah, sure. Fine. Whatever. I mean, it is true. And it's when you see people like that. And I, especially in the undergrad population, sometimes you see kids like that. And at the law school, sometimes you see kids like that. They're just, they're, they're special. Like they're way off the tail.
35:53 Lewis Howes? Yeah.
35:54 Speaker 01 But the thing that you really care about is attitude. And like, I hate to be, it's like a traditional Indian immigrant thing, right? But like work ethic. Like just hard workers who are hungry and they're smart. Then you're like, damn, that's, that's the package because that is really powerful. Yeah. So I hate to say that, but I think smarts are, I don't focus on it as much, you know, I love smart people and I like to be around them, but like small gradations in smarts.
36:26 Lewis Howes? It's kind of like in sports too, you know, when you have just a talented player who doesn't work hard. And is lazy.
36:33 Speaker 01 Exactly.
36:33 Lewis Howes? You're like, get off my team, or you're just like, oh, I wish you would work hard because then you'd be incredible. And you've got someone who works hard but isn't talented. You keep them on the team because it's like they lift everyone up.
36:43 Speaker 01 Yeah.
36:44 Lewis Howes? But if you can put it together, it's like.
36:45 Speaker 01 And in fact, those people who have talents and who don't work hard, they're the, they're the most tragic stories, right?
36:50 Lewis Howes? The worst.
36:50 Speaker 01 Because you feel like.
36:52 Lewis Howes? Give me someone with that talent.
36:53 Speaker 01 And you have no idea what you have.
36:54 Lewis Howes? Oh, my gosh.
36:55 Speaker 01 And in fact, just, just to go back to the book a little bit, the, one of the, there's a story in the Bible. Called the parable of the talents. It's like this great story in the Bible.
37:04 Lewis Howes? The parable of the talents, right?
37:06 Speaker 01 Yeah.
37:06 Lewis Howes? Is this the one with the, the father gives his son talents or something? What, how's it go?
37:10 Speaker 01 It's great. So here's the story, which is, um, there's a master who's supposed to be God.
37:14 Lewis Howes? Okay.
37:15 Speaker 01 And he's going out of town and he's got these three servants. And he says, I'm going out of town. You got to take care of my talents. So talents today are like these special things we have, like that make us special. Back then it was money.
37:27 Lewis Howes? Yeah.
37:27 Speaker 01 The origin of the word talents is money. So he gives one guy, he's like, look, here are five talents. Take care of this. I'm going out of town. Gives another guy, three talents. He's take care of this. I'm going out of town. He gives the third guy, one talent and he says, I'm going out of town. Take care of it. He comes back. And obviously he's supposed to be God in this story and these are like normal people. So the guy with five talents comes to him and says, you know, master, I took your five talents and I invested it. And I lent it out and I made it into 10 talents. And he gives it back to the master and the master says, wonderful, enter the kingdom of God. Second person says, I took your three talents and I made it into six talents. And the master says, great job. Welcome into the kingdom of God.
38:08 Speaker 01 Third guy is like, you know, I only had one talent and I was a little nervous and I wanted to make sure and have it. So I buried it. It's here and I want to give it back to you. And the master says,
38:21 Speaker 01 you're out, you know, you're damned. You didn't do what you were supposed to do.
38:26 Speaker 01 So the reason I love that story is it's about, it's about how you're given these incredible gifts and you have to use them. It also, in the value creation chapter, it's kind of exactly what finance says about value creation, you know, which is you're a steward for resources. You've got to do more than people expect you to do. In finance, that's called beating your cost of capital. Because otherwise, you wasted, you've wasted an opportunity. And if you just sit on things, that's actually value destroying. It's not value creating. So that parable, it's just like your story about this athlete, right? It's a really weird parable, though, right? Because this young, this one Kai, who had one talent, he's like the poorest guy. And he, just because of his fear, he gets damned, right? He gets like literally
39:07 Speaker 01 cast out of the kingdom of God. But it's a powerful story for saying, you know, we are all given a lot, and you have to make everything you can out of it.
39:15 Lewis Howes? Yeah.
39:17 Speaker 01 It's, I really like that story because it has to do with finance, but it's also this really interesting story, you know, more generally.
39:22 Lewis Howes? Making the most in the world and making the most of what we all have. And it's We're not gonna have five talents sometimes.
39:27 Speaker 01 Yeah.
39:28 Lewis Howes? We're gonna have one little talent, but it's like, what's, how can you make that into 10?
39:32 Speaker 01 Exactly.
39:32 Lewis Howes? In your own way.
39:33 Speaker 01 And it's like, it's your duty.
39:35 Lewis Howes? Yeah.
39:35 Speaker 01 Right? It's not like you can if you want. Like, the story of the parable is, it's your duty.
39:41 Lewis Howes? Mm hmm.
39:41 Speaker 01 You gotta, you've been given something, and you have to make the most of it. So I like that, right? Because it's almost like, it's incumbent upon us to realize what our talents are, and then make the most of it.
39:54 Lewis Howes? Yeah.
39:54 Speaker 01 And, you know, so there are a lot of people who have found that parable, you know, in a way that's almost terrifying, right? Because you're like, jeez, am I making the most of my talents?
40:03 Lewis Howes? Yeah, yeah.
40:04 Speaker 01 And so the story in the book is about these two guys, John Milton, who wrote Paradise Lost, and Samuel Johnson. They were haunted by that parable.
40:11 Lewis Howes? Really?
40:11 Speaker 01 Yeah, because they like spent their life, like, oh my God. And these are two seriously talented people, right? Samuel Johnson wrote the first dictionary.
40:19 Lewis Howes? Hmm, right.
40:19 Speaker 01 In eight months. I mean, it's like, he's a crazy guy. John Milton wrote Paradise Lost when he was blind. These are crazy people. And yet, they were, they were always asking themselves.
40:28 Lewis Howes? Am I doing enough?
40:29 Speaker 01 I've been given so much. Am I doing enough? And it's kind of an interesting way to live, you know? You don't want to take it too far because you'll beat yourself up all the time. But I think more of us should probably be doing that.
40:40 Lewis Howes? Yeah.
40:40 Speaker 01 Cause we all are very lucky in different ways.
40:43 Lewis Howes? I think it's important to live in urgency too. You know, and not just like, oh, I'll wait until I'm ready to have a feeling.
40:48 Speaker 01 Yeah.
40:48 Lewis Howes? I'll wait till I get the degree. No, start something now, even if it's gonna fail, at least you're learning something and you're trying to do something with your talents.
40:54 Speaker 01 Yeah.
40:55 Lewis Howes? Right?
40:55 Speaker 01 I agree. I mean, I think people over-incubate a little bit, right? So they kind of wait for their ideas to get a little bit more clear. But the reality is just go and just do it because, and in that version of the story, it's incumbent on you. Like you gotta go do it. I really like that idea of not just like you've been given something, so do it, but like you got to go do it. Cause if you're not, you're wasting like this really, the privilege you've been given.
41:21 Lewis Howes? What's the greatest lesson you've learned over the last 18 years of teaching?
41:26 Speaker 01 Wow. You know, uh, well, let me say a couple, let me say two things, right? So one is I learned something about teaching.
41:36 Lewis Howes? The art of connecting with your students and.
41:39 Speaker 01 And it's really, it's fundamentally, when I teach best, and I don't always teach great, but when I do, it's like an act of empathy. Right? Like you gotta go into the other person's, you have to think about how the other person is thinking about it. So too many people who are teachers are, especially in an academic environment, it's like about my ideas. I'm projecting it onto you. And fundamentally, it's about empathy. Like if you, if you can get in other people's shoes, then you can help them understand something.
42:07 Lewis Howes? Yeah.
42:09 Speaker 01 And then the second thing, that's about teaching, just about what it is really. Because it is kind of my life's work along with research and writing. I think the big lesson though, you learn from teaching and especially where I teach, it's, it's, you know, humility.
42:23 Speaker 01 You don't know who, who the kids are who are gonna go do great things.
42:27 Lewis Howes? Yeah.
42:28 Speaker 01 You know, you sometimes see them and you kind of get a sense, but everybody has something different in them. And people who in a classroom don't say anything or don't do anything, you come, they come talk to you later and they're like spectacular. And then like these people who, you know, are always talking and always saying stuff and sound really smart, they're actually kind of empty vessels. You know, so you're, you're a little bit.
42:48 Lewis Howes? Don't judge people.
42:49 Speaker 01 Yeah, don't judge people and you're a little more humble about. Everybody has different capacities and I don't, I judge people much less than I used to because I just, I don't know what your capacities are. I, you know, I don't know what you're
43:00 Lewis Howes? Kid in the back of the class who doesn't speak could be like the next best whatever.
43:05 Speaker 01 Yeah. And I think that's the related part is, you know, encouragement is so important. I used to be a little bit more of a hard ass. I used to be like when people would, you know, when you're younger, you're a little bit tougher, right? I think. And as I got an older, I kind of feel like encouragement is so important because you don't know who, who's struggling with what and you don't know what they're good at. So you always want to err on the side of encouragement.
43:29 Lewis Howes? Yeah.
43:29 Speaker 01 Cause if you err on the side of being a, you know, like pushing too hard, that can do damage to people.
43:35 Lewis Howes? Yeah.
43:36 Speaker 01 So I think I've those, I think that's the most important thing. I think humility and just this sense of, you know, people are incredible in different ways and you don't know, and you shouldn't pretend to know.
43:45 Lewis Howes? Yeah.
43:46 Speaker 01 And you just have to help them. It's like raising children, you know, you have, you have to help them be the best person they can be in, in like this very limited way in a classroom, obviously, not like being a parent.
43:56 Lewis Howes? Yeah. Let's, um, let's imagine that it's your, it's your final class you're ever going to teach. And the world is connected to your mic right now and they're all going to be in your classroom, listening to you. They can all understand English and you have your final lesson to share to the largest classroom and you'd have 60 seconds to share any lesson you want. Roughly 60 seconds.
44:29 Speaker 01 If you're going to ask questions like this, you should send them in advance.
44:31 Lewis Howes? I should.
44:33 Speaker 01 This is unfair. No, this is a great question. It's a spectacular question.
44:35 Lewis Howes? If you had one lesson that you'd had to share to the world and this was like, all right, after this lesson, you don't get to hear any more from me. You don't get any more books from me. You don't get any more research. Here's my greatest thing I could teach.
44:48 Speaker 01 Oh gosh. So.
44:50 Lewis Howes? No pressure.
44:51 Speaker 01 I know exactly. So I would say two things.
44:55 Speaker 01 And one is going to sound very current, but the other one is going to be a little more transcendental. So I think the current thing I would say is we have got to figure out. And I'm not like a big environmental guy. But we got to figure this out. And like, we're really in a very perilous situation. And you got to take that seriously. I mean, this isn't even my area.
45:17 Lewis Howes? Right.
45:17 Speaker 01 But I've come to believe it. And I think we don't even understand like the existential risk that we're facing. And then the second thing I would say is, you know, fundamentally, you know, kindness and generosity are massively underestimated. The power of those things is just incredible. I'm not saying I've lived up to that, by the way, just to be clear. I don't think I have.
45:43 Speaker 01 But, you know, I've become convinced that that is the most kind of important. When I see this in my children or I see it in many people, I say, that's the attribute we need more of. And everybody has this capacity for it. And yet on we layer on top of it, you know, intellectual stuff and other stuff. But that core thing is the thing we all have to get back in touch with because it's so important to the future. And it's so important to the next generation and the generation after that.
46:09 Lewis Howes? Yeah. So saving the planet and kindness and generosity.
46:12 Speaker 01 Well, I think, you know, you know, by the way, I would do it with a story. Because I think, you know, the reason I wrote this this way is it's all stories because I don't think lectures.
46:24 Speaker 01 Like if I just say to you, you got to be more X.
46:26 Lewis Howes? It's hard to remember.
46:27 Speaker 01 It's hard to remember.
46:27 Lewis Howes? It's hard to like, you know, assimilate.
46:29 Speaker 01 How do you assimilate it? Right. And I think what I learned from writing this book is stories are everything. Because people remember stories, like the parable of the talents. Like you get it, right? And then it stays with you. If I say, well, value creation is about beating a cost guy. You know, it's like, it's hard to remember, right? But if I had that 60 seconds, I would think hard about the story I would tell. Um, because I'm an economist and I was, you know, we only believe things in data. And we get distrustful, we get become distrustful of stories. This book taught me that, you know, not all stories are true, but stories help people understand the world.
47:03 Lewis Howes? Absolutely.
47:04 Speaker 01 And if you don't tell stories, people aren't going to understand you. Um, and the greatest communicators, politicians, you, you, you understand that, like stories, stories anchor everybody's thinking. And without them, you're just left in a sea of stuff. You need a narrative to organize your life. Without a narrative, it's like chaos.
47:25 Lewis Howes? Yeah. Yeah. It's funny. One of my, uh, your friends and early kind of business mentors would always say, facts tell, stories sell. So if you want to sell any idea,
47:37 Speaker 01 Yeah.
47:37 Lewis Howes? product, business, whatever,
47:39 Speaker 01 Yeah.
47:40 Lewis Howes? tell a story.
47:40 Speaker 01 Yeah.
47:41 Lewis Howes? Yes, I think facts are important to understand as part of the story.
47:43 Speaker 01 Yes, absolutely. But you don't want to tell stories that violate facts.
47:46 Lewis Howes? Right.
47:47 Speaker 01 That's really important because that's living in truth.
47:50 Lewis Howes? Yeah.
47:50 Speaker 01 Um, but it's also not just sell. I think, like, I'm sure you've done this too, right? Like at difficult times in your life, you have to tell a story to yourself about your life.
47:59 Lewis Howes? Hmm.
47:59 Speaker 01 Right? Like, there's got to be a narrative in your head.
48:02 Lewis Howes? Yeah.
48:02 Speaker 01 About who you are and how things are going to play out. So one of my narratives, everybody's got different narratives, right? So one of my narratives is, it's not the most important one, but one of them is, I tend to, um, fall behind and then come back. Like, so that's like one of my narratives, right? Like, I tend to kind of, uh, do something that's almost like self-defeating because I want to come back and claim victory.
48:26 Lewis Howes? Yeah.
48:27 Speaker 01 That's something that I just do. And it's a narrative in my head, right? And, you know, we all have those narratives, like the immigrant narrative that you talked about earlier. Right? You're like an outsider a little bit, you know, you don't know if you're going to Gitmo, you know? You know, you gotta like, you gotta work harder and you gotta save more and you gotta do all these things more. These are all narratives. They're like so important to the way you organize your life.
48:49 Lewis Howes? I like it. This is awesome. The Wisdom of Finance: Discovering Humanity in the World of Risk and Return. Uh, make sure you guys go pick this up. Do you guys, do you have a website for this as well?
48:58 Speaker 01 Um, so my personal website is meheredayside.org.
49:01 Lewis Howes? Meheredayside.org.
49:03 Speaker 01 Exactly. And it's got, uh, links to the book as well.
49:05 Lewis Howes? Cool. We'll have it all linked up in the show notes. Before I ask the final question, I want to acknowledge you, Mihir, for Uh, doing a book that I think is gonna help people through stories because for me, it's impossible for me to read something that has numbers and graphs and charts. It's like, it's, I shut the book right away.
49:23 Speaker 01 Yeah.
49:23 Lewis Howes? It's exhausting for a brain like mine.
49:26 Speaker 01 Well, and you're not alone.
49:27 Lewis Howes? Right.
49:27 Speaker 01 I mean, I think it's really, really hard for people.
49:29 Lewis Howes? Yeah. So I acknowledge you for, for stepping out of your comfort zone to create something, to use your talent and multiply it for the world to, to receive it because, um, you know, if you didn't do this, only your, you know, the students would have got the information and not the world. So I think this is a valuable thing.
49:49 Speaker 01 I appreciate it.
49:50 Lewis Howes? With that story, yeah. Are you on social media as well?
49:52 Speaker 01 I just got on.
49:54 Lewis Howes? All right.
49:54 Speaker 01 So I'm on Twitter and LinkedIn. No, I'm not gonna pretend.
49:56 Lewis Howes? Twitter. You're on there like what, once a week?
49:58 Speaker 01 I, you know, the truth is, I am on it, but I don't know what I'm doing.
50:02 Lewis Howes? Sure, sure.
50:02 Speaker 01 So all I'm doing is promoting the book.
50:04 Lewis Howes? Got it.
50:04 Speaker 01 Like, I'm not actually learning how to use Twitter.
50:06 Lewis Howes? Sure, sure, sure.
50:06 Speaker 01 So I should probably figure it out from you, but I think, you know, I gotta get better at kinda creating a personality.
50:10 Lewis Howes? Yeah, yeah.
50:11 Speaker 01 Um, right now, I'm just kinda pimping the book.
50:13 Lewis Howes? Got it, got it.
50:14 Speaker 01 That's all I'm doing.
50:14 Lewis Howes? It's all good, it's all good. Uh, we'll have everything linked up. Um, but the final question is, what's your definition of greatness?
50:21 Speaker 01 Wow, a definition of greatness?
50:24 Speaker 01 Uh,
50:26 Speaker 01 you know, it goes back to what, what we talked about earlier, um, which is, it is making the most of what you've been given. And so greatness resides in everybody. I think the thing we make the mistake of is, you know, that guy over there, you know, Mahatma Gandhi was great, or whoever. And the reality is, I think we can all be great. It's just about, uh, looking inside and making the more than you could have made out of what you've been given. I think that's greatness.
50:54 Lewis Howes? Awesome.
50:54 Speaker 01 And when we see it in somebody like Muhammad Ali or Mahatma Gandhi, it's like particularly spectacular.
50:58 Lewis Howes? Yeah.
50:58 Speaker 01 But it's in everybody.
51:00 Lewis Howes? Awesome. Thanks so much for coming on.
51:02 Speaker 01 Thanks so much. This is great.
51:03 Lewis Howes? Yeah.
51:03 Speaker 01 Thank you.
51:06 Lewis Howes? And there you have it. If you enjoyed this episode, make sure to share it with your friends. LewisHowes.com/518. Take a screenshot of the podcast app that you're listening on right now and tag me @lewishowes on Instagram. I try to reply to almost every one that I can. And I want to feature you. So if you take a screenshot and you post a thought about how this inspired you today on your Instagram story, I screenshot a lot of them and repost them as well on my Instagram story. So tag me @lewishowes, Twitter, Facebook, Instagram. Post a photo of where you're listening to this and let me know what you think. And also, I hope to see you in person. The Summit of Greatness is coming.
51:51 Lewis Howes? Early bird price goes away in one week. It's almost doubling in price in a week. And we are almost sold out. So make sure to go to summitofgreatness.com, get your ticket. It's gonna be a mind blowing experience and I promise you, you're gonna have an incredible time. Can't wait to see you there. And I hope you guys enjoyed this one because as Dave Ramsey said, "You must gain control over your money or the lack of it will forever control you." I love you guys and you know what time it is. It's time to go out there and do something great.
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