#214 with Ramit Sethi - Why You Should Have a Diversified Investment Portfolio

In this episode Sam (@theSamParr) and Shaan (@ShaanVP) are joined by Ramit Sethi (@ramit), the founder of I Will Teach You To Be Rich. They start off talking about course businesses and Ramit shares what he's learned running courses for over 15 years. Ramit shares a few ideas for businesses and then the trio talk about different strategies around investing. Shaan shares why his approach is so different from what Ramit recommends, and he breaks down his own asset allocation. At the end Sam & Ramit share their personal money rules. --------- * Follow Ramit on Twitter: https://twitter.com/ramit * Ramit's new podcast: https://iwt.com/podcast * Want to be featured in a future episode? Drop your question/comment/criticism/love here: https://www.mfmpod.com/p/hotline/ * Support the pod by spreading the word, become a referrer here: https://refer.fm/million * Have you joined our private Facebook group yet? Go to https://www.facebook.com/groups/ourfirstmillion and join thousands of other entrepreneurs and founders scheming up ideas. --------- Show notes: * (1:06) Ramit's new podcast * (5:02) An update on Shaan's Power Writing course * (7:07) Ramit's course business * (11:30) Who is Jay Abraham * (16:43) Should MFM get a new name? * (20:14) How long can Ramit run his empire * (24:11) Ramit on trolls * (27:31) The history of courses * (34:12) Ideas around pets * (37:35) Ideas around cosmetics * (39:54) How Ramit would differentiate a product * (43:47) Ramit's money hacks * (46:00) How Shaan approaches investing * (47:00) A little anecdote about camera issues * (47:58) Back to Shaan's investment approach * (50:47) What game are you playing and what risk can you tolerate? * (53:26) What Shaan's goals are with investing * (57:11) Ramit's 10 money rules * (59:35) Sam's money rules * (1:02:09) Taking out loans on your assets * (1:05:33) How Ramit thinks of risk versus rewards * (1:17:10) Ramit on Sam's engagement ring story * (1:21:04) It's not all about the metrics

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Ramit Sethi?

  In our copywriting program, we say be clear, not clever. Clear, not clever. It's really hard to be crystal clear. It's super easy to create marketers and be clever. But in the grand scheme, we believe clarity wins.

• 0:27Sam Parr?

  All right. So, Ramit, have you, you could be honest. Have you ever listened to the podcast?

• 0:35Ramit Sethi?

  I've heard your clips and I love them.

• 0:38Sam Parr?

  All right.

• 0:38Shaan Puri?

  Good answer.

• 0:39Sam Parr?

  So you know what you're getting into. Yeah, you know what you're getting into. And you're also, we'll just say it. You're, you're, one of the reasons you're here is because I like you. We're friends. Another reason is you're smart and good at this stuff. But the third reason is you just had a podcast come out and you'd been talking about doing a podcast forever. Now you actually have one. It's about, um, are they, the people are anonymous, right? They're, it's anonymous couples having discussions about money.

• 1:02Ramit Sethi?

  Well, most of them use their real names and they're all real voices. So I always wanted to, uh, listen in on couples fighting about money, discussing money. But you can never do it. You know, the only place you've ever heard anyone fight about money is on a movie. And now you actually get to listen to real couples sharing real numbers, talking about what's going on with their money. How do they disagree? And then what do I help them do to get over it?

• 1:29Sam Parr?

  And what's it called?

• 1:31Ramit Sethi?

  It's called I Will Teach You To Be Rich with Ramit Sethi.

• 1:34Shaan Puri?

  And so this is a little bit like, uh, what's her name? Esther Perel is sort of like her model where, uh, I forgot what her podcast is called. It was very good. She's like, kind of like a relationship coach and she has a couple come in.

• 1:45Ramit Sethi?

  She's a therapist. Yeah, Esther Perel is amazing. You know, she helps couples with therapy. Mine is not therapy, but if you imagine, for example, a couple where the classic example is, you know, he's an overspender.

• 1:59Ramit Sethi?

  We don't have enough money for that. That's a classic one, but then it becomes much more interesting. For example, we have a couple. The guy hates, hates paying too much for organic blueberries. He hates it. So when he orders blueberries, he has two tabs open. He's comparing notes. I know all your personal finance nerds listening to this are like, what's the problem? That's totally normal. No, it's not normal. He opens it up. He's comparing, cross comparing. Guess his net worth. What do you guys think?

• 2:27Shaan Puri?

  I'm guessing it's high based on the setup. So I don't know, we'll go over, I would say over, over 10 million.

• 2:35Ramit Sethi?

  Sam?

• 2:37Sam Parr?

  A million bucks.

• 2:38Ramit Sethi?

  Eight million dollars and he's comparing the price of blueberries. And really what this shows is money is not just about math. In fact, we overvalue math and we undervalue psychology, which is what the podcast gets into.

• 2:52Sam Parr?

  Did, did launch go well? How, how, how, how'd the, the first episodes do?

• 2:57Ramit Sethi?

  Great. I mean, we're learning, right? So I know all the metrics cold for email and even social stuff. But for podcasts, we're like, I texted some of my friends, hey, what's good? And they told me some numbers. I'm like, okay, so we released it. Now, so it's getting tens of thousands of downloads per episode. We're happy about that. I'm more happy that people are writing in and they go, my wife and I finally talked about money for the first time. We've been married for six years. I'm like, yes. So the quantitative stuff seems to be good, but I'm more interested for a creative project like this in the quality.

• 3:33Sam Parr?

  It, the, growing our podcast, we've talked about it a bit on this podcast, which people like, and sometimes don't like us talking about it too much, but it's been the hardest thing that I've had to grow.

• 3:43Ramit Sethi?

  Why?

• 3:44Sam Parr?

  Yeah. What you'll learn, I'm sure you've already learned this, is that, so with email, you can advertise somewhere or you can write a blog post and you know exactly where the new email subscriber is coming from. Um, and you know, you can guess how long they're going to stay with you. With podcasts, you don't really know that. So like, it's like iTunes won't tell you how many subscribers you have. They're not exactly going to tell you where they come from. Uh, you don't, you don't know a lot of information. And so it's really, really challenging. And so when we grow, we'll do a bunch of stuff and we're like, did it work? And it takes us a week and we're like, well, the numbers went up. Let's just continue doing everything we just did. Did it not work? No, it didn't work. All right. So let's just change. It's, it's been, it's been really hard.

• 4:21Ramit Sethi?

  That's interesting.

• 4:23Sam Parr?

  Anyway, but so you, all right, so Ramit, you have this, your main thing is I will teach you to be rich. And it started as a blog. It's a book now, and it's this major course business. And that's actually what I wanted to talk about a little bit early on was course businesses. Sean just launched a course called Power Writing. Is it called Power Writing?

• 4:39Shaan Puri?

  Power Writing, yeah.

• 4:42Ramit Sethi?

  Wait, you don't even know the name of your own partner's new course? What's wrong with you?

• 4:46Sam Parr?

  Well, I knew it was called Power Writing. I didn't know if it was like Power Writing and then like, you know, Dash, the how to write like, I don't know what the full name is.

• 4:53Ramit Sethi?

  Hold on, hold on, I'm taking over this podcast right now. Sean, are you offended that number one, he didn't know the name of your course? And number two, that he hasn't bought it for full price?

• 5:02Shaan Puri?

  Not at all, no. Sam basically taught me everything that I teach in the course. So in a way, I actually owe him some royalties, really. And then the second thing is when he asked that, I just thought it's like a setup. You know, like, you know, when you kind of give someone an assist, you're like, oh, you wrote a book, right? What's, what's the name of that book? You're just letting them plug their thing. And it's like, that's a podcast, old trick.

• 5:24Ramit Sethi?

  Okay, that didn't go the way I wanted, so.

• 5:26Sam Parr?

  No, look, it did, look, it's called, I know what it's called. It's called Power Writing, but there's a sub-headline as well, right, Sean?

• 5:32Shaan Puri?

  No, there's no sub-headline. And also, also, I think I'm retiring from the course. I taught it just this time and it was like, it was really good. And I'm like, unfortunately, I'm the type that gets bored of things really quickly. So just when we got it where like, after the, the second one from the first one, the second one made double the money and it took a quarter of the time, which is like exactly what you would want. And it's, it's should, the answer should be go do it again. And instead, I don't want to do it at all. I'm just like, okay, I want to move on to something else.

• 6:01Sam Parr?

  You written, can you say how, you said the first time how much it did? So can you say this time, how much it did the second time?

• 6:06Shaan Puri?

  Just double that. So for those who are following along, just double the number. That's how much it made this time.

• 6:11Sam Parr?

  Really? Okay. And, but, and you're not going to do this again, you're done.

• 6:14Shaan Puri?

  I'm going to teach something else, something else I'm interested in, something that's like totally different, like, which will be like kicking over the sandcastle and starting over, which is kind of silly from a business point of view, but from a enjoying myself and entertaining myself point of view, it's, it's the right move.

• 6:29Sam Parr?

  But your courses are different than Ramit's. So Ramit, I, I bought your copywriting one. Again, I'm sorry, I don't remember the name of it. Just, it was just called Matt, it was sale, on sales pages. What was, which one did I buy?

• 6:40Ramit Sethi?

  Uh, we have, our, our biggest one is called Call to Action. We have another one called Behind the Sales Page, where you actually watch me write a sales page that I think made millions and millions of dollars. So it's maybe one of those.

• 6:54Sam Parr?

  Okay, I took it. I took it two years ago. I've taken a couple of yours. But your business is different than Sean's. Sean's was the cohort one. Have you ever, have you done one of these cohort classes?

• 7:04Ramit Sethi?

  Yeah, I've done several. In fact, I'm doing one as we speak right now. Uh, cohort classes are definitely hot. It's fun to watch this new model. If you trace the history of courses, I mean, they've been going on for generations, but let's just say in the last 20 years, you know, first off was eBooks. And this is, they were kind of hot in the early 2000s. You had dating eBooks. You had a famous eBook on how to train your parrot. Those were typically between $10 and about a hundred bucks. Then you started seeing video being added. Video added higher pricing. And it was technically very difficult because they didn't, YouTube wasn't even out when some of these started.

• 7:48Ramit Sethi?

  Then it went on to higher value. People got more sophisticated with topics. You added masterminds, which were hot, and they've kind of fizzled out over the last few years. Now you have cohort-based courses, and there's some focus on completion rates, which we can talk about. That's a terrible decision to do if you choose to do that. We can talk about that. But yeah, cohorts are hot. Doesn't necessarily mean they're lasting, but they're certainly hot right now.

• 8:14Sam Parr?

  So how many courses right now do you guys have?

• 8:17Ramit Sethi?

  Um, we have between 20 and 25 live.

• 8:21Sam Parr?

  Is your business doing north of 20 million in sales?

• 8:24Ramit Sethi?

  I'm not going to share my sales numbers.

• 8:27Sam Parr?

  I thought you might, I thought you might not, but I respect that you just, you just told me that. Because if I ask someone and they're like, oh, you know, I'm like, just say you don't want to talk about it. That's totally acceptable.

• 8:38Ramit Sethi?

  Yeah, yeah. We have a private business. We have a great team and 20 to 25 programs and over 50,000 customers, around 50,000 customers. So we're thrilled with it.

• 8:48Shaan Puri?

  You're not teaching these live then, recorded?

• 8:52Ramit Sethi?

  Generally, they're recorded. The biggest ones are, we do do some live ones to experiment with concepts, and it's just fun. Like you mentioned, Sean, you like to be able to engage and then you're like, okay, do we want to double down on that? Or are we done with that?

• 9:06Shaan Puri?

  And what do you think? So, I think some people are interested in your course business, but I think more people would be interested in what you've learned about the course business, having done a bunch of it, being kind of like near the top of the game there, which is like, first and foremost, who's crushing it when it comes to courses? What's a model you look at where you say, just from a pure like, respect of the way that that business works, I respect this course business. What stands out to you? It might be your own.

• 9:32Ramit Sethi?

  Great, great question, because crushing it and who I respect are totally different things. Let me break that down. Who I respect, I respect people like Marie Forleo, who has an awesome business. She runs it her way. She launches when she wants to, which is sparingly. It's beautifully done. And she, she just loves the way she runs her business. That's awesome. I also respect people like, like some of the, the legacy people in our industry, Jay Abraham, who I just saw for coffee two days ago. He's one of my mentors and he's been around since the 80s, in fact, even before. Brian Dean, high integrity. Matthew Hussey in the dating

• 10:17Ramit Sethi?

  space, he's great, he's a friend of mine. And then I think Reforge is interesting, although I think that, that is quite different, because it's venture backed than what the typical individual wants to create. So what I admire about all those folks, high integrity, and we can talk about why integrity is lacking in the course business, because it is, they run the business the way they want to. Each of those could easily double their revenue, easily, if they did a couple of different decisions. They don't. And, and that's why I respect it.

• 10:52Shaan Puri?

  Sean, do you know who Jay Abraham is?

• 10:53Ramit Sethi?

  No.

• 10:55Sam Parr?

  Okay, so he's, I'm gonna guess, probably in his 60s. And he wears a, he looks like, if I like, told you like, imagine what like, a, in the 60s, in the 60s, what a rich British guy would dress like if he were like into hunting, like on the countryside of England, that's what this guy dresses like.

• 11:14Shaan Puri?

  I'm imagining like, you know, the hunter in Jumanji, that's what I just, that's what I got in my head.

• 11:20Sam Parr?

  That's a really good, yes, okay, so Google it, he wears like a, kind of like a scarf tucked into a tie, and like, you would imagine him smoking like a pipe, right, Remy, am I wrong, like, he like dresses like-

• 11:29Ramit Sethi?

  In fact, let me add to that, I once asked him, Jay, because we're close, and you know, he's been a mentor for many years, he tells me, you know, I flew to Asia, and you know, I said, Jay, what do you wear while you're on stage, because he loves, he's a sartorial, he's into it, he goes, well, you know how many suits I take for a three-day presentation, right, I go, one, he goes, 40, I said, what, and he said, they're hiring me, not just for the information I'm gonna teach, they're hiring me to be theatrical, it's a show, and so at every break, he changes his suit, now, to the typical Silicon Valley utilitarian, they're like, that's so stupid, what's the metrics, there's more to life

• 12:11Ramit Sethi?

  than metrics, you Silicon Valley nerds, that's a huge mistake, that all these ROI attribution positive, blah, blah, blah, sometimes, in fact, the best companies know, that's why they advertise in Times Square, they can't track that, but they do it because it's the right thing to do, and it's about branding, Jay's a genius at doing that, that's why he's been at the top of the game for decades.

• 12:31Sam Parr?

  And he's been at the top, he's been, he's been around forever, and if you go and study like a bunch of copywriting books, I think, was that his background, was he a copywriter?

• 12:38Ramit Sethi?

  Yeah, one of the best.

• 12:40Sam Parr?

  Okay, so he's a copywriter, and when I don't know him, I've, I've seen him in person once or twice, I know you know him well, but this guy has got this huge cloud of mystery around him, to me, from the outside, and I, and I think that's the vibe he purposely gives, so like, for all I know, he could be a billionaire, I have no idea like what this guy's story is, I, he's just this like, business like guru-y type of guy, what, what is his story, what's the truth about him?

• 13:02Ramit Sethi?

  So the, the truth is that he, he was doing highly innovative marketing. For the last forty years, he would go into companies like gold companies, umbrella companies, all kinds of random industries, dozens and dozens of industries. And he would show them ways to exponentially grow their their sales. Icy Hot was one of his and he has a fantastic story. He bought Remnant Radio Advertising. He paid a hundred percent of the first fee to the radio station, so it was no risk to them. And then he took the long term profits and grew that business in a massive way. So I'll tell you what I like about him. I like that his ideas are extremely powerful.

• 13:43Ramit Sethi?

  In fact, on my bookshelf, I have a very highly curated bookshelf of some of the best marketing books that I've ever read. I have two of his that are on that bookshelf. He takes a multi-dimensional approach to business. So for example, he would tell me early on, "Ramit, put your customers at the center of your world." I said, "Okay, what does that mean?" And he's got this thing called the Theory of Preeminent. He would say, "Look, tell them explicitly, tell them, you are here, you might not be ready to buy today. That's fine, enjoy my free material. Use it for as long as you want. When you are ready, I will be here and I will be here for the rest of your life." Which is totally true. And you know, I do some things in my business that are very unconventional. For example, I don't allow people with credit card debt to join our flagship programs, the higher end ones.

• 14:29Ramit Sethi?

  That costs us millions of dollars every year. And it's funny, people will plagiarize our sales pages, they'll plagiarize our email copy. For some reason, they don't plagiarize that policy. I wonder why that is, because ninety percent of their customers would disappear overnight. But when we do that, even though it costs us in the short term, it benefits us tremendously in the long term. So Jay helped us really articulate that vision clearly.

• 14:52Sam Parr?

  What does he sell? You're talking about course businesses that you like. What's his course?

• 14:58Ramit Sethi?

  He doesn't care. He doesn't care about that anymore. He's been doing that for decades. He does rare consulting for equity arrangements. You can find most of his stuff free on his website if you sign up for it. But he's not doing that anymore. He's done it, he's shared a ton of his insight. Now he wants to work with selective clients.

• 15:18Shaan Puri?

  Did he tell you any good stories about Icy Hot or one of the brands that he helped?

• 15:23Ramit Sethi?

  I see how it was one of my favorites. It's in his book and he's told me all about it. He told me about gold and how he helped this gold business that was sort of struggling and they repositioned the way they sold gold and it exploded their business. He's got tons of great stories in his book. My favorite one, it has a terrible title, but it's a great book. Getting everything you can out of all you've got is really good. One page in that book helped me build a multi-billion dollar product. I was sitting on a Wednesday, Wednesday I have strategy days and I just read and I think, and I read one of his pages and it all clicked for me and I launched a multi-million dollar program of ours called Ramit's Brain Trust and it was all because of that book.

• 16:04Shaan Puri?

  Speaking of, speaking of terrible titles, we have a podcast title that is both kind of catchy, but also kind of cringey. I would say you also have a title that is kind of catchy and kind of cringey.

• 16:18Ramit Sethi?

  What?

• 16:19Shaan Puri?

  So we've talked about kind of our feelings on it. Give us your take on both your name as well as doing names like this. So give us the kind of like, what's your, what's your mindset? Is it all pros? Are there no cons? Are there a mix? How do you think about it?

• 16:34Ramit Sethi?

  No, there's a lot of cons. I'll tell you, I'll tell you the blunt truth. So I created I Will Teach You To Be Rich while I was a student at Stanford. And I was helping my friends in the dining halls with their personal finance. And I had learned and I built my own system because I took some of my scholarship money and put in the stock market. And here I am trying to help my friends and they were like, oh, that sounds awesome. Cause I got an overdraft fee and they would never show up to my free classes. So I was like, okay, I gotta name this to make it more catchy. And then even, and that didn't work. So eventually I started the blog. Looking back, I want to first say I was sober when I picked the name. Okay.

• 17:18Ramit Sethi?

  So, and it was catchy, but I will say it's come with its downsides. For example, you know, I've been sitting on panels. There's like the CEO of a Fortune 500 company, another CEO or senior VP. And then there's Ramit Sethi, CEO of I Will Teach You To Be Rich. And the first reaction at some of these places is not good. Okay. But even though many of my really smart friends, including some venture capitalists and others, they were like, you gotta change your name. You gotta change your name.

• 17:50Ramit Sethi?

  Early on, I was like, you might be right. And then I started going, well, there's sunk costs. I've already invested all this time. And then it just became too difficult. And so I finally have really owned it. I will say that I know very well when people hear this name of this book or the site, they go, that sounds like a scam. So the conversations are, seriously? It's not what it sounds like. Check it out. And then I kind of have come to love that. I love the push pull. They go, it sounds like a scam. They come here, it's hyper tactical. It has the exact accounts to use. They go, oh, this sounds like every other money person. Wait a minute, this guy graduated from Stanford? Oh, wow, he's in the, you know, Times Square, New York Times bestseller. So I love that push pull.

• 18:35Ramit Sethi?

  I don't mind a little skepticism because I trust our material is so good that if they are ready, they will receive it.

• 18:44Shaan Puri?

  And if you were going to rebrand, had you ever come up with a backup? What would you go to?

• 18:49Ramit Sethi?

  Yeah, we've played around with some ideas. I do think there's room in our future business for an extension, for different names. But with all that said, you know what? I love clear names. Some of our best programs are find your dream job. We've helped people get $50,000 raises. That's like right on the money. Earn 1K. Help you earn 1K on the side. And for many people, it turns into earn 100K on the side. So I do love clear names. And in our copywriting program, we say, be clear, not clever. Clear, not clever. It's really hard to be crystal clear. It's super easy to create marketers and be clever.

• 19:33Ramit Sethi?

  But in the grand scheme, we believe clarity wins.

• 19:36Sam Parr?

  And you've been doing this since, what, like 09 or something?

• 19:39Ramit Sethi?

  I started this site in 04.

• 19:41Sam Parr?

  04. And do you think that this could last another? So you're at it, that's what, 10, 11, 12, 16 years, 17 years? Can it last? Like, what's it gonna, what would a brand like this, a course business and your brand? What would it look like in 20 or 30 years? And are you going to continue doing it for that long, you think?

• 19:59Ramit Sethi?

  Oh, yeah, I mean, I love what I do. So first of all, it's not a course business.

• 20:03Sam Parr?

  Sorry.

• 20:03Ramit Sethi?

  We just happen to have courses. But we also have a-

• 20:06Sam Parr?

  What do you call it then? A blog? A brand?

• 20:09Ramit Sethi?

  So it's it's an education business. We have a book with over a million copies sold, right? You could just as well say it's a book business because we sell more books than we sell courses. But I don't love the concept of quote, a course business. You will find that many of the successful course creators, they go, wait a minute, there's lots of different ways to reach people. I'm going to do events. I'm going to do a podcast. So courses simply become a nice

• 20:37Shaan Puri?

  Which which part of the empire? So right. So I'm pretty fascinated. I've been studying this kind of what I call solopreneurs. Basically, people who try to build like a personal monopoly around some domain, whether it's a guy who there's a guy who's like, I'm the best dog trainer. I will just teach you everything you don't know about training your dog. I'm just like, I trained dogs for the stars, but then I'm going to give you the information for free over here. I love that. I think these are, there is an infinite number of these like, personal monopolies that you could create, even within one, right? So let's say your personal finance, there's personal finance for guys who want to be billionaires, there's people for who want to be lean fire, there's people who want to do it where it's like, you know, you're only gonna, you're gonna maximize your time, right? So it's like the kind of four hour work week style. There's, there's a number

• 21:22Shaan Puri?

  of these personal monopolies. And I've been interested to look under the hood of these and see two things. One is, what's, what does that business really look like? Because you only see Ramit Sethi, right? You don't know, like, how many people you got on your team?

• 21:35Ramit Sethi?

  Yeah, we have about 20, 20 to 25 at a given

• 21:38Shaan Puri?

  Right. So like, even though it looks like an individual brand, obviously, there's a, there's a full talented team of people helping out, help maybe make it happen. And then you have like, many different plates that you're spinning at once. You got the blog plate, you got the podcast plate, you got the books plate, the courses plate, then there's gonna be, you know, there's probably four more that I mean, job board, who knows, who knows what else you got? Which plate is the, so I would say the usually what I found, and you tell me if this is true for you, I found that there's the audience core one, which might be like the blog, like the blog is our core thing for growing the audience, the free audience. And then there's like, and then there's this other thing, which is monetizes kind of like the one to 5% of the audience, the best. And this is what this where the money comes in to pay for these 25 people that work at my company. So what is it

• 22:22Shaan Puri?

  for you? Is it a newsletter or a blog? What's the main thing on the audience side? And what's the main thing on the business side? Is it courses?

• 22:29Ramit Sethi?

  That's a great question. I think in general, your model is correct. I think that there are places that are better for audiences. And typically, this will be things like social media. It's easier to grow that than to grow the number of customers. That's just sort of a given of the internet. For us, audience-wise, I think social media for us, for sure. So we have people on Twitter, Instagram, to some extent YouTube, and now the podcast. I think that will end up being a pretty substantial part of the business, audience-wise. The programs-

• 23:02Shaan Puri?

  Those are all about equal order.

• 23:03Ramit Sethi?

  Generally-

• 23:04Shaan Puri?

  There's one that's like the leader.

• 23:06Ramit Sethi?

  Well, Instagram is the best. It's the best, and my Twitter, because I am, I love it. It's like, I'll get up and I'll start Instagramming and tweeting and stuff. And now we've got a little IWT support in there. So we've got, you know, a regular posting schedule. Those are great. And actually, we've learned how to monetize things like Instagram. You know, Instagram is a nice part of our business as well.

• 23:32Shaan Puri?

  You also reply to trolls on Twitter, which is awesome.

• 23:36Ramit Sethi?

  And Instagram. I reply to all trolls.

• 23:39Shaan Puri?

  Yeah, I love it.

• 23:39Ramit Sethi?

  I'm waiting in my life for one smart troll. You know, I have, I've helped over 10 million people. I have over a million books sold, 50,000 customers. Our team is amazing. I'm still praying, one day, can there be an intelligent troll out there? So far, no. It's, it's very difficult. You know, I get anti-vaxxers who write me, you know, I tell them, you know, you would have trouble deciphering a menu at Olive Garden, and you're over here giving me medical advice? I don't think so. So, you know, these guys, they, and they're all guys. They, they really feel that they need some meaning in life. And I'm happy to give it to them and show others how to respond to trolls.

• 24:18Shaan Puri?

  What do you, what, why do you spend the energy there, by the way? Isn't that a big energy suck? Why, because it's fun for a while. It is fun to slap down trolls for a bit. But it, I've, for me, it gets exhausting. But you seem to thrive on it. You seem like, even right now, I could see a little pep in your step just thinking about it.

• 24:34Ramit Sethi?

  Well, I remember listening to a Navy SEAL who said, "When others do push-ups, they get tired. When I do push-ups, I get strong." And I found the same because dealing with trolls keeps me sharp. And I'll tell you why. It's not just for kicks and to make fun of them. It's that in my life, you know, I'm hanging out with guys like you. Smart guys who are dissecting business models and healthy, whatever. I don't get the chance to talk to someone who comes up to me and says, you know, vaccines are fake. Or these sort of crackpot, you're only doing this so you can make money. If I wanted to be rich, I would create a book on being rich.

• 25:18Ramit Sethi?

  You know, I've candidly never had somebody come up to me in real life and say that. And in part, that's because when people come up in real life, they're actually very positive, pleasant. They usually have very nice things to say. What typically happens with these trolls, now I've had conversations with thousands of them, and I save and cross catalog all these conversations. So it's fascinating, right? Over time, you can build a corpus of what's going on. Remember, I studied psychology, technology and psychology at Stanford. So I'm fascinated with human behavior. So I want to know what's going on in your life that you would reach out out of nowhere to somebody who doesn't know you and go, fuck you. So when they say that to me, I go, hey, what's going on, man? You having a bad hair day?

• 26:04Ramit Sethi?

  And we start talking. And so now I have metrics, 50% of them will never reply. Of those who reply, 50% will go, oh, oh, my God, I didn't know anyone would actually read this. Oh, I'm sorry. Hey, man, big fan. Which kind of leads to the question, if you didn't know anyone was going to reply, why on earth would you send that? That's kind of sad. And then the remaining 50%, which is 25 of the original, they will kind of double down. And that actually is a very interesting conversation to have, like, what's going on with someone that they would say that? And so I don't always get to a resolution, but it holds my conversational skills and I get to understand and peek into the psyche of someone like that.

• 26:43Shaan Puri?

  I love that you have the like intellectual answer when it's probably just really fun to just clap back at people. No, no, no explanation needed. We've all felt it. So Sam, I think you were going to ask something before I jumped in on the troll thing.

• 26:58Sam Parr?

  Well, I'm still curious about the course business and I'll tell you why I'm curious about it. I'm curious about it because.

• 27:06Sam Parr?

  Like I bet you, you've been in this since 2004. There's, I have a bunch of friends Neville, Noah, you who are just, I think you're maybe, I think you're maybe eight years older than me. Who are old enough, older than me that they've seen like the beginning of like the web 1.0 course businesses. And there are some people that just crushed it. So we talk about Eben, Eben Pagan, what was his name? David D'Angelo was his, was his name. And that stuff, I love hearing stories about that. It's so fascinating about all these guys just killing it on the internet. And it's just fascinating. It's like learning about like a drug cartel or something like, it's just like

• 27:43Ramit Sethi?

  Yeah.

• 27:44Sam Parr?

  intrinsically exciting to hear about like these like, it's like Cowboys feeling type of business. And also on here, you mentioned the company Agora and you're saying that, I asked you, can one, can some of these course businesses reach 100 million in revenue? And you said, you, sometimes they can, but it's incredibly hard. But the ones who do, they're really just, they're like huge newsletters that sell courses. So that's what I wanted to ask you.

• 28:08Ramit Sethi?

  Okay. So let me take you back and I'm going to share a couple of stories from the history. Cause we have created over 30 programs and we have served, you know, tons and tons of people. So a few things I've learned. First of all, I remember our first major course we launched was called Earn 1K. And the reason we created it was that I went on book tour and I went around to 13 different cities. And I was like, hey, what should I create? This is way back in the day, 2009, in the depths of the recession. And they go, love your stuff on finances and automation, but I really want to know how to make more money. Okay. That was fairly unusual back at that time. So came home and we identify all these different areas of making money. We created a program on freelancing because we know it and we could teach it.

• 28:53Ramit Sethi?

  We recorded that in the back of the automatic office. So we got hooked up with Matt. He was like, okay, you can record it in the back. We didn't have any fancy camera equipment, but the content was good. And we launched it and it was $497 at the time.

• 29:11Ramit Sethi?

  And the thing converted way better than we thought. It converted too well. It was around 2% if I recall correctly. And I told people in the last email, I was like, guys, this is actually converting way better than I thought. I'm going to raise the price. And a lot of people were like, ha, ha, ha, marketing gimmick. Ha, ha, that's so crazy. And then at the end, it made $600,000 on our first launch. And we raised the price and never lowered it again, ever. So it was hilarious because a couple of weeks later, people were like, hey, can I get in at the original price? We're like, no. And so that was the first thing where we realized, oh, my gosh. Packaging matters. Topic matters. Conversion rate and pricing are profoundly meaningful in your business. So that taught us a lot.

• 29:56Ramit Sethi?

  Moving along, you know, we had other programs. We launched another business program. I think it did like five million or six million in one week. And we wrote about that on the Tim Ferriss blog. You can see kind of the entire flow of how we did that.

• 30:08Sam Parr?

  That's a great blog, by the way. I, when we launched Trends, I read that and reread it a ton of times. I think it's like a $5 million launch or something.

• 30:17Ramit Sethi?

  Yeah.

• 30:18Sam Parr?

  Is that what?

• 30:18Ramit Sethi?

  Yeah.

• 30:18Sam Parr?

  I figured.

• 30:19Ramit Sethi?

  Yeah, we took people behind the scenes because there's a, you have to understand, it's like, think of all the movement behind launching a movie. Okay, we're not doing a movie, but we're doing a launch. We write an entire book per launch. And much of that gets discarded and we still end up with a book. That's how much we write and create. So we wanted to show people what goes into it because it's not just luck at certain levels. It's very strategic and there's an element of luck too. But then moving, you know, moving along, you see a lot of other models that came and went. For a question like, can you make it to 100 million bucks? You can, but a couple of things change. One, you become an acquisition machine.

• 31:00Ramit Sethi?

  You cannot make it to 100 million dollars without a true massive acquisition machine. And that means that most of your business will be focused on acquisition. And in the self-development world or money world, if that's what you choose to pursue. If you want to play that game, you have to become very, very mercenary. So for example, you will see Facebook ads. They're basically like, make a million bucks in a week. I'm being hyperbolic, but you get it. Why? It's that that is what people respond to when you are doing a true acquisition machine. If you want to build a boutique business with high integrity, that is antithetical to that.

• 31:42Ramit Sethi?

  So it's very important to know, for example, in software, you don't necessarily have to build a very hyperbolic business. Right. Look at HubSpot. They're not over there saying, fix all your CRM in 10 hours. That's not what they're saying at all. But in self-development or in a course business, it becomes more and more aggressive the bigger and bigger you want to get.

• 32:03Sam Parr?

  And that's kind of like one of the, one of the downsides of the business, which is it's kind of like, you know, the hustle. We, we had a conference, HustleCon and a bunch of other conferences, and it kind of sucked when that was our mainstream of revenue. Because the more money it made, the more people we had, and the more people it had, the worse it got. And that sucked. I hated that. I hated that. I hated that. I hated that. And that was a huge challenge for us. Well, it didn't end up being a challenge because we were like, all right, it just can't be the main revenue driver, but.

• 32:31Shaan Puri?

  Yeah. Well, let's do a quick switch. I want to do some of your both business ideas because this is an idea podcast. And secondly, I want to ask you about some money hacks, but let's start with ideas. So what we like to ask everybody is cool. It's, it's always fascinating to figure out how do you do what you do? How long you've been doing it? Great. Like that's kind of past facing. But what I found is that anybody who's talented enough to build their own business like you have, and is out there operating in the field, they see tons of other opportunities that you just, you have more ideas than you have time to go do them. And so, or maybe you're not the right person to go do that idea, but you think somebody should, somebody who loves so and so should go do that.

• 33:12Shaan Puri?

  What are some ideas, business ideas that you've seen that you, you think are genuinely interesting or worth we're chatting about? And then we can toss them out to the audience.

• 33:20Ramit Sethi?

  Okay. I always focus on where's the demand? Where's their insatiable demand? You know, as we talk about in our earnable program, go where the fish are. And.

• 33:32Ramit Sethi?

  The first one I would create would be a business around pets. Okay, first of all, I don't have pets and I don't want pets. My wife is constantly telling me, let's get a dog. I'm like, we're never getting a dog, ever. And I want to tell you why. Because when I was a kid, my sisters wanted a dog. And we couldn't because my dad was allergic. Sixteen years later, we found out he wasn't allergic.

• 33:55Sam Parr?

  Yeah, that's a lie. That's always a lie.

• 33:57Ramit Sethi?

  I loved it. I love it. To this day, I love that my dad just point blank just lied to us for almost twenty years. I said, God bless Dad. And so now I will do the same thing. If my wife is listening, I'm allergic as well. It's tragic. It's genetic. So, but, but for the people who have pets. It's hilarious. They will literally spend anything. So one of my good friends, she said, oh yeah, like, you know, I find it difficult to spend stuff on myself, but this new puppy, like, I don't care what it costs. And they're getting this imported Swiss meat or something like that for the dog. I'm like, you could feed, can't you just feed a dog like what, you know, from Costco or something? And she's like, no. I said, this is a great business.

• 34:42Ramit Sethi?

  So there are a variety of different models. I've seen the box business, which is amazing.

• 34:48Ramit Sethi?

  There's decorative items for dogs, which I love because the more unnecessary they are, oftentimes the more profitable it can be, right? I don't, you're not buying a luxury sweater because you need it. You're buying it because you want it and price is largely irrelevant. So if I knew anything about pets and had any interest whatsoever in pets, I would definitely start a pet business.

• 35:13Sam Parr?

  I have a friend who sells dog vitamins. And I asked him, I go, does it work? He's like, I don't know. And I'm like, that's the greatest, that's the greatest thing ever. You have no idea, no one knows.

• 35:26Ramit Sethi?

  I should say that that idea and the next idea I'm going to share with you. Uh, the other thing I would have to have would be no ethics whatsoever. Because half these pet businesses are complete horseshit. And, but, you know, again, I don't want to start it because I don't know anything and I also do have some morals around this, but the pet vitamins, I mean, come on, what is the dog giving you a report card? Oh, I really feel my scoliosis went away thanks to this vitamin. No! All right, what's next? Um, cosmetics.

• 35:58Ramit Sethi?

  Insatiable demand, uh, heavy rotation of using different types of face clean. Do you guys know, you may not know as guys, but do you know that there's different lotions for your hands, feet, forehead? Are you aware of this, Sam?

• 36:13Sam Parr?

  No, I, I, I know. I, we have different, uh, lotions for different skin color. That's what we have at our house. So I know that, but I didn't know.

• 36:20Shaan Puri?

  Dude, I haven't put lotion on in at least 16 years. Like it's been, it has been 16 years since I last put lotion on.

• 36:27Ramit Sethi?

  This is revelatory for the audience. They're like, what's lotion? Yeah, there's, and by the way, there's more to cosmetics and skincare than lotion.

• 36:35Sam Parr?

  Wait, Sean, you don't wear lotion? I thought that dark guys, like you had to wear lotion.

• 36:39Shaan Puri?

  Never wear lotion. Don't.

• 36:41Ramit Sethi?

  Sean, show us your legs right now. I want to see if they have little cracks on them.

• 36:44Shaan Puri?

  I'm ashy and I'm proud of it. Look, there's no, there's no lotion.

• 36:47Ramit Sethi?

  Bro, you gotta lotion up. Come on. What's wrong with you?

• 36:50Sam Parr?

  Do you do sunscreen? White guys use sunscreen.

• 36:52Shaan Puri?

  I don't use sunscreen typically. Uh, also, uh, you know, this whole like, the whole like nighttime skincare routine, like, you know, I'm a toothbrush and out of there. It's, it's over.

• 37:03Ramit Sethi?

  Oh, I gotta tell you, okay. I gotta tell you my favorite part about nighttime skin routines. This is my favorite thing on all of social media. So you'll be following someone and someone will post a question to them. Uh, oh my gosh, your skin looks so good. What's your, what's your skincare routine? And the person gets so excited. They go, oh, I'm so glad you asked me. Well, you know, I like to really keep it simple. I'm just, I'm all into simplicity. So here's what I do. And then they go.

• 37:33Ramit Sethi?

  Yeah. They go, well, I start with a serum, then I give it a 15 minute break. I put on a lotion, but then I put a cream on top. You know, then I take a little break and let it breathe. Then I use the brush and then I ice it out and then, and then by lunchtime, you know, I need to reapply and then you have 13 other parts for, and I'm like, do you understand that none of that is simple? Most, most of the people I know are using like one Procter and Gamble product, if that, on their body.

• 37:58Sam Parr?

  Yeah. Three in one, baby. Body, water, shampoo, conditioner.

• 38:01Ramit Sethi?

  Yeah. They're taking Dove and putting it on every part of their body and they're like, wow, I really nailed it today. So I would do a cosmetics or skincare.

• 38:13Shaan Puri?

  Both of those you said pets and cosmetics. Those are I'm with you. Insatiable demand like pricing sensitivity, but obviously competitive. So how do you think about going into a space? That's like, you're not the first person to think of cosmetics or pets. So would you be looking for, if you were going to purchase, would you be looking for some unique angle that you feel is underserved? Or would you just say, no, fuck it. I go, I go swim. It doesn't matter how many other people fishing there. There's enough fish where I just want to make it. I just want to get my share. I want a small slice of a big pie. What? How would you approach it?

• 38:45Ramit Sethi?

  Packaging, pricing and celebrities. Packaging is a huge tremendous part of it. And I think there's some opportunities there. Pricing.

• 38:54Sam Parr?

  What do you mean? What opportunities?

• 38:58Ramit Sethi?

  So I spoke to a guy who did a hair care product and I was like, how'd you develop it? He goes, we basically went to a factory and we were like, whatever, it needs to fit this cost framework. He didn't care. So this is again, why I say I would not get into this business if I had any morals, which I do. That's why I'm not doing it. But I'm just telling you what he told me. He goes, yeah, I don't, we don't care what it is. It needs to smell good, but we spend 90% of the time on the packaging. I go, what? Let me get this straight. You're basically selling like whatever. Yeah. And but the packaging looks lush. He goes, yeah, that's what the entire business is. I go, this is crazy. Then this, so in terms of price.

• 39:42Sam Parr?

  Well, how big was that business or that entrepreneur? Like, how big was their empire? I imagine they had a bunch of them.

• 39:50Ramit Sethi?

  Yeah, that's a good question. I would say in the, that's a good question. If I had to guess in the 30 to $50 million range by the last time I checked, that was several years ago. But, you know, I didn't ask.

• 40:07Ramit Sethi?

  Prices, you know, you see people doing boxes, regular delivery, upsells. There's lots of innovative opportunities that I think digital entrepreneurs are very, very smart at. In the old days, it was put it on the shelf at CVS and hope somebody buys it and then comes back. Nowadays, you can do some really clever stuff. So I think that's an opportunity. And then celebrity tie-ins. Who's known for having amazing skin? And if you think back to those acne commercials, remember Proactive? They had top-tier celebrities. So I got really curious, how do they get these A-level celebrities? I started looking into it. The answer is they just write them a humongous check. So there's opportunities with celebrity tie-ins that, for skincare.

• 40:52Ramit Sethi?

  Again, I am not trying to do this business myself. I've just been fascinated with it and I would love to see how someone would come in here and disrupt what people are normally doing.

• 41:02Shaan Puri?

  Okay, I like it. And then, did you have a third one?

• 41:05Ramit Sethi?

  Kids, anything on kids. I mean, it's, wow, talk about price insensitivity. Again, I don't want to do this business because I believe in less stuff for kids. I think there's more meaningful ways to parent, but just imagine the kind of toys, learning opportunities, etc. for children.

• 41:27Shaan Puri?

  Could also talk. He's like, that's what a kid is.

• 41:31Ramit Sethi?

  Yeah. Yeah. So, you know, there's some really smart stuff around these areas, but the key denominator on all these is insatiable demand. That's the first place I look, which is a little ironic because when I started I Will Teach You To Be Rich, there's actually not that much demand for learning about money. Especially when I started it, I focused on young people. But I didn't, it wasn't a business when I started, it was just like for fun. Over time, I found that there is demand, but you have to be very clever in how you reach people.

• 42:06Shaan Puri?

  And what about money hacks? So I had put down a thing on the notes. I said, I want to know, you have all this like corpus of content, you know, just tons of tons of material philosophies, frameworks, tactics, exercises, blah, blah, blah. What would be the three sort of money hacks that you think most people just don't do? But if you could get them to do it, you'd feel good about it. So what are your kind of like, what are your three finance related or money related hacks that people should be doing that gets you a big out big outcome with not as huge input?

• 42:39Ramit Sethi?

  Well, I'm glad you asked because most of my founder friends don't even invest in the market. I would say over 50% of them.

• 42:44Sam Parr?

  What does that even mean? No, what does that even mean? That's so, that's so crazy to me. I don't understand it.

• 42:50Ramit Sethi?

  I'm about to tell you because these guys make me want to wring their neck. So these are founders who have done very well in their business. Either they have a high profit business generating considerable amounts every year, or to some extent, they've had an exit and now they're doing their next thing. I go, hey, what are you doing with your money? They go, oh, you know, I'm putting it into my business. I go, cool. Like, what about investing? They go, no, no, no, no, I can make more money in the in my own business. This is where my voice starts to tighten up and I bring out my hand as if I'm about to wring their neck. I go, how many businesses do you know that are still around 50 years later? And they go, well, not many. I go, do you think

• 43:30Ramit Sethi?

  it would be good to maybe take a little off the table and put some in the market where you can get really good returns? And it just boggles their mind because they've never thought about. They see themselves as an entrepreneur, not a boring mom and pop investor. That is a very, very costly belief that they hold. So I always tell them like, hey, take a little bit, put in the market, boring Vanguard funds, do the stuff. Of course, they haven't read my book. Do the stuff in the book. And when you do that, you will be wealthier than you can possibly imagine, and you your risk will be decreased dramatically. Sean, what do you think?

• 44:09Sam Parr?

  Where did so I follow a lot of what you say. I read your book, Sarah, my wife has read your book. You're going to talk about like talking to your partner once a month, things like that. I do that all. But I want to ask you, Sean, investing in the market. So Sean and I are almost complete opposites when it comes to money, not complete opposites for everything regarding money, but our risk profiles are very different. Sean, do you invest just in normal index funds at all?

• 44:34Shaan Puri?

  Yeah, I have some in index funds. I basically have a basket of technology companies that a few years ago I said, okay, what companies do I think over a 10 to 20 year period just have, they have an advantage today that's just going to compound for 10 to 20 years. And I'm happy to, if I'm wrong with that, okay, I'm wrong with that, but I'm gonna have this basket of basically six companies that I think, that I think are positioned to do that. And that was like Amazon, it was Google. It wasn't like some, I didn't take a genius, right? It was just like, I think these companies essentially are monopolies that, that are riding this wave of like the internet and mobile funds. They'll, they'll do well. And so I hold that. So I'd say about 30% of my money is in that, that selection of stocks. I have probably 1%.

• 45:18Sam Parr?

  You can't import a camera, or, or the import tax on a camera that can record above 60 minutes is taxed at a video camera versus a picture camera. Therefore, you can't record for more than 60 minutes on a point and shoot camera.

• 45:33Ramit Sethi?

  Are you kidding me? This is crazy. Well, Sam, much respect. I was very, now I just need you to tell me what to do about it, but we can do that offline.

• 45:41Shaan Puri?

  Yeah, that was impressive.

• 45:42Sam Parr?

  Yeah. So basically what happened to listeners, so it, Remit's camera went off. And this is like a weird fact, but point and shoot cameras cannot record above 60 minutes because they would be taxed differently.

• 45:54Shaan Puri?

  It went down even better. He goes, I know what happened. We just hit 60 minutes, didn't we?

• 45:59Sam Parr?

  Yeah.

• 46:00Shaan Puri?

  And you have a point shoot camera, don't you?

• 46:02Sam Parr?

  Yeah.

• 46:03Shaan Puri?

  It's from Asia, isn't it?

• 46:04Sam Parr?

  Yeah.

• 46:04Shaan Puri?

  And it's like, oh shit, Sam, Sam, what are you doing? How do you know all this?

• 46:09Ramit Sethi?

  Sam was like Mike Wallace right there. Sam, a lot of respect for you, bro.

• 46:14Sam Parr?

  Yeah, well, we, we went through this. So Sean, you were saying that you have 30% in index funds. Where's the rest?

• 46:20Shaan Puri?

  30% in a handful of tech stocks, about six tech stocks. And then I have about 40 ish percent in crypto. I have a small amount, maybe 1%, 2% still left in a Vanguard fund. And then what's left? Then I have, well, I'm not counting just like investments in private businesses like startups and stuff. That, that would be different. But yeah, the rest is like cash and miscellaneous random other bets.

• 46:47Sam Parr?

  Is that crazy to you or me? That that's crazy to me. I'm not disrespecting you, Sean, because whatever floats your boat, floats your boat. That's so different from how I how I do stuff.

• 46:56Ramit Sethi?

  It's like a guy going to a buffet, okay? And you both go to a buffet and then you go, hey, let's just let's meet up at the table. So you get here, you get some rice, you get some chicken, some vegetables, and the other guy comes back with three different plates. Ninety percent of all the plates have chocolate cake on them. And then he has two pieces of white fish and, you know, one piece of lobster that he cut in half and he threw it on the floor. You go, what are you eating, bro? He goes, that's what I like. That's what I like.

• 47:31Shaan Puri?

  Why? Because it's not vanguard it out? It's not indexed out? Is that why?

• 47:34Sam Parr?

  Not even remotely.

• 47:36Ramit Sethi?

  It's the opposite of diversification. Now, again, if if you want to be entertained, that's awesome. It's very entertaining.

• 47:42Shaan Puri?

  No, I don't. I think diversification is for losers. That's how I feel about diversification.

• 47:50Ramit Sethi?

  That's how most tech founders feel, and the cost of their belief is vast. It costs them typically millions and millions of dollars. They don't care, though. This is my point, Sam.

• 48:00Shaan Puri?

  It's not that.

• 48:01Ramit Sethi?

  They don't care. They go, oh, I'm going to put in my own business, and I can angel invest.

• 48:06Shaan Puri?

  I mean, some of the greatest investors, the greatest investors in the world do take concentrated positions, not diversified positions. So.

• 48:12Ramit Sethi?

  Are you one of the greatest investors in the world?

• 48:15Shaan Puri?

  I know what I know in my sphere. I'm an expert in my field. And so I feel confident, comfortable investing in my field. I'm not saying I'm one of the greatest investors in the world, but I know that within the technology sector, I would bet on myself. And that's what I'm choosing to do, right? Within the technology sector, I don't I feel like I have an edge compared to what I can get sort of in the passively diversified index fund world.

• 48:41Sam Parr?

  Yeah, Remi, your

• 48:42Shaan Puri?

  Last 10 years, I've compounded way faster than than, you know, the Vanguard ETF or SP500 generically has.

• 48:49Sam Parr?

  Your strategy, Remi, I am the exact same as you. I'm looking at my portfolio now. It's basically 90% index funds or includes HubSpot stock, which is not index, but it's it's 90% publicly traded stock, most of which is is is index funds. But what bothers me, Remi, not bothers me, it just shocks, boggles my mind about you. How can you not see that there is another way to do it, which are the crazy people like Sean, when you and I both have tons of friends that are these crazy people that have made these ridiculous bets where they only have 100 grand, they put 90 grand into crypto and it turns into 100 million dollars. Like you and I know many of these people that have done these stupid things, or they appear stupid, and they totally work out.

• 49:30Ramit Sethi?

  Um, well, there's definitely lots of different ways to achieve it. So, you know, what I talk about in my book, there's there's lean fire, there's fat fire, there's buying real estate, there's passive investing, and on and on and on. So if you are optimizing for entertainment, great. If you're optimizing for concentrated risk, great, then that portfolio makes a lot of sense. If you are optimizing for a diversified, low-cost, predictable return and mitigating risk, then of course that allocation makes exactly zero sense. So we want to know the game that we are playing. And Sean,

• 50:10Ramit Sethi?

  you you articulated it very well. What I think the next question that a savvy investor would ask is, what are the risks that I am incurring? And this is typically where you get people, especially a lot of crypto bros who go, oh, like, what do I care? I'm swinging for the fences. And you go, okay, that's cool. What if it goes wrong? Now, if you're 21, Uh, you know, your risk profile is low, right? Worst case, you know, you get a job, et cetera, et cetera, et cetera. If you're older, if you have kids, if you have a mortgage, or if you simply do not want to go back to living on ramen noodles, then suddenly you start to think about risk differently. Now, here's the catch. Most people, doesn't matter if they're 35 or 50,

• 50:55Ramit Sethi?

  they don't truly understand risk until something bad happens. And when that happens, they do not take a look in the mirror and go, oh shit, my allocation that I chose 15 years ago was poor. They go, fuck the government, or they ripped me off. I need regulation, even though I called for no regulation for the last 15 years. So unfortunately, this is one of those things that cannot be taught until it is experienced. And the market will go down. Tech will not always go up. This is a predictable cycle. The last 10 years have been extraordinary. There's no doubt about that. Even an index investor made over 15% annualized returns, which is insane. But the music doesn't keep playing.

• 51:35Sam Parr?

  I agree with you. I strongly disagree with people.

• 51:39Shaan Puri?

  Hold on, hold on. It's, there's no right answer without saying, what are you trying to do, right? What is your goal? Because if my goal is to make X and your goal is to make Y, then we're going to have totally different strategies. Like a different strategy would work for a different person.

• 51:54Sam Parr?

  What is your goal?

• 51:54Shaan Puri?

  If I say, I'm comfortable with this much risk, or I have it, I have knowledge about this industry. Maybe my answer would be different, or maybe my, my strategy would be different.

• 52:03Sam Parr?

  Do you think our goals are different?

• 52:05Shaan Puri?

  Yeah, I think our goals are different, for sure.

• 52:06Sam Parr?

  What's your goal?

• 52:08Shaan Puri?

  Not just, not just the absolute money goal, right? Clearly, our goals are different because you, you intentionally avoid risk, right? Like, you know the appeal of a lot of these investments, but you don't want to lose, right? Your, your risk tolerance is lower. And you are, you are, you would feel worse if you lost, then you would feel good if you win. And I'm the opposite. I would feel worse if I didn't follow my convictions than if I.

• 52:29Sam Parr?

  But what's your goal? Like, is there a point where you'll say, I'm gonna, I'm gonna, I don't want to take more risk?

• 52:35Shaan Puri?

  Yeah, of course. Over time, it'll shift, right? As the, as the principal gets large enough, then you don't need to have so much concentration because you can have more, you can play, play it safer, and you can take a smaller, a, a lower return will still yield. Will still let you live a lifestyle that you want. But if the principal's small and you're trying to live off 4% gains or 5% gains or 7% annual gains, you're gonna have to sit there for 40 years and like, I'm just not interested in doing that. And I think another thing is like, what's your other, the other situation is like, how much income do you bring in? I bring in a lot of income, so I'm not really worried about, okay, what happens if the market goes down either temporarily or even permanently? It's like, if I'm bringing in a healthy income and I'm young, I don't really have to worry too much about protecting this investment asset.

• 53:19Shaan Puri?

  First, I can play riskier than my dad, who no longer can generate significant income and he needs to play it safer.

• 53:26Sam Parr?

  I, yeah, we have different, we have different, we have different goals.

• 53:32Ramit Sethi?

  Yeah, I think if you, if you look at bodybuilders, for example, who are competitive, eventually all roads lead to chicken and rice. All roads lead to chicken and rice. Why? Because when you look at macronutrients and when you look at where you're getting the highest bang for your buck, all professional bodybuilders essentially eat the same. Okay, I'm being a little general here, but that's the case. When you look at investing, if you look at the research and yes, you clarify your goals, but remember that in investing, a lot of people go, personal finance is personal. Actually, most people are mostly the same. Let me say that again, most people are mostly the same.

• 54:13Ramit Sethi?

  They mostly wanna make good money, be able to travel a little bit, et cetera. So unless you are a wild outlier, then all roads lead to low-cost, long-term investing. Again, there are outliers, Sean, it sounds like you've thought that through. But the principles of chicken and rice and low-cost investing are the same. Now, what are those principles? I talked about that in chapter six. You know, there's a lot of people tossing around these things about, well, you know, I chose this because like the market went down a little bit, so I put my money in here. And like over time, all those timing the market things have been blown out. There are the rare exceptions who win. Sam, you were referring to that. We know some people who have won.

• 54:57Ramit Sethi?

  Yeah, you know, we also know a lot of people who lost a lot of money and they disappear. They don't brag about their Russian fund that they picked anymore. That's called survivorship bias. So it's important that we know the entire game of play and then we choose. Otherwise, it's very emotionally tempting to be like, "I'm a genius, I have an edge," etc. But we have to all remember, we are individual investors and even the pros, who do this for a living with a bunch of other smart people and expensive technology, they fail to beat the market 80-plus percent of the time.

• 55:29Sam Parr?

  What are your money rules? You talk about you need to have money rules. What are yours?

• 55:34Ramit Sethi?

  I have 10 money rules. I'll share some of them. So the easy ones are things like always have a year of emergency fund cash. Okay, that's sort of a simple one. Invest 20% of gross income minimum. That's an easy one. If you can't do 20%, you start with 5%, right? But the important thing is, pick a number and automate it. That's critical. Then the different ones for me, my money rules, are things like, never question spending on books, appetizers, health, or a friend's charity fundraiser. So that's unlimited. I have unlimited spend on that. And why am I talking about appetizers?

• 56:17Ramit Sethi?

  It's meaningful to me. When I was a kid, we couldn't afford to eat appetizers. Now, when I go out and eat with a friend, I'm like, "Whatever looks good, just order it." Right? We can get everything here. And then it gets a little bigger, you know? Business class on flights over four hours. That's a rule. I don't have to debate it or think about it. It's just boom, it's done. And be able to pay in full for large expenses, like a wedding, a honeymoon, even a house. Doesn't mean I have to pay in full. I could finance it if the interest is low or whatever. But for the largest, most important purchases in my life, I don't want cost to be a factor. Now, if you're listening to this, some of these sound totally bewildering, maybe even ridiculous.

• 57:00Ramit Sethi?

  Okay, that's the point. My money rules are mine. They are not applicable to most people. Most people don't care about appetizers and most people can't buy a house all cash. That's okay. What I want to encourage you to do is to really write down your money rules. Instead of having to make a thousand decisions every month about money, boil it up, roll it up to the things that are meaningful. And you'll notice on my money rules, which you can just Google, Ramit's money rules, that the classic mistake people make, I say, hey, what are your money rules? And they're all restrictive. Never spend on premium this, never do that, never da-da-da. I go, okay, okay, it's okay to have a couple of restrictive rules. You know, you want to save, you want to invest. But let's also make some rules that are fun.

• 57:45Ramit Sethi?

  Money is supposed to be fun. It's not about cutting back on lattes. It's about living a rich life.

• 57:50Shaan Puri?

  Sam, do you have those?

• 57:52Sam Parr?

  Yeah, I have those.

• 57:53Shaan Puri?

  Written down or just kind of like intuitive, like, you know, I kind of live by these? Or have you like actually sat down and said, these are mine?

• 58:00Sam Parr?

  Well, so when I was 25, I made a list, maybe I was 22, I made a list. I said, here's how much money I want to have by the age of 30. Here's how much I want to spend each month. Here's what I want to purchase. Like the spending that I, the budget that I made each month was based off of what I wanted to own and what I wanted to do. And so I had this, I had similar rules written down where it was basically, anything health related, I, in books, I don't look at the, I don't look at the price. I just buy whatever I want. I did not have any rules towards charity, although that's changing. I do, I need to get into that. But yeah, I had like, I worked backwards. I had like a target number based off of one I wanted to spend each month.

• 58:45Sam Parr?

  And I wanted to be able to hit that target, or I wanted to be able to make that just off of my gains, like my, my passive income from index fund investing. And I wanted to be able to withdraw only 3% of that per year in order to pay for my monthly expenses. And I, and I made that all up when I was like 22, 23, 24. I forget the exact number.

• 59:07Shaan Puri?

  But by the way, when people say that, oh, I want to withdraw 4%, do they actually withdraw it? Do you actually, like Ramit, do you actually sell down 4%? Of your, whatever your index funds are or whatever to pay for your lifestyle? Or do you, is that just a theoretical thing like I can, I could fund this off just the gains? You know, just a portion of the, of the, of the annual gains?

• 59:27Ramit Sethi?

  Well, I don't use a drawdown. I'm not in the deaccumulation phase, so I have an income. But eventually one day, yeah. And in fact, do people do that? Yeah, every retiree does that. Deaccumulation is done by tens of millions of people. They sell off a little bit every single year if they've got it. And that's how they fund themselves. That's why it's called a fixed income.

• 59:49Sam Parr?

  And there's, but there's other, there's, there's other ways you could do it. So for example, I just invested into this real estate fund. What's the, it's a big, it's a big one called Oak Tree or something. And then Blackrock or what's it Blackstone? What's the big, the big, the big, you know, the big guy? It's like the, it's like the trillion dollar real estate thing. Everyone has access to it. And anyway, it pays, I think a six and a half to seven percent dividend quarterly. And you can live off that. If you put, you know, a fair bit of.

• 1:00:21Ramit Sethi?

  Yeah, Sean's a good question. There are other ways too. So dividends are one. Another thing that really wealthy investors will do is they'll simply take loans against their assets.

• 1:00:29Shaan Puri?

  That's kind of what I was talking about.

• 1:00:31Sam Parr?

  I was like. Talk about that for a minute?

• 1:00:32Shaan Puri?

  Because you're not paying tax on the, like you, you sell your shit or you take a dividend. You're going to pay tax. So your six percent is not six percent. But if you, you know, if you live off your loans, you keep your assets compounding. That seems smarter to me.

• 1:00:45Sam Parr?

  The, the loan thing is the craziest thing that I've, I've just recently learned about this. It is, it's taken me so long to grasp this because it goes against everything that I thought was true. So basically.

• 1:00:57Shaan Puri?

  It feels illegal.

• 1:00:58Sam Parr?

  It feels illegal. So basically when you get to like, I don't know what the number is. There's some number where you can start borrowing money from big banks. Right now, I think, what's the rate? Like my rate is 1.1%.

• 1:01:10Shaan Puri?

  1%.

• 1:01:11Sam Parr?

  It's crazy. Okay. And so the bankers was like, yeah, look like, and I like built a widget. So I could like, look at it. So let's just, I'm just going to use a bunch of made up numbers. So let's just say that you have $10 million in a equity fund. Okay. You could borrow, I believe, if you have index fund up to 70% of that. So you can borrow $7 million. And there's the, the way the math works and it's different for each person based off of the stocks that you own, but basically you can withdraw, let's say 30% and the 30% of your 7 million. And the market would have to drop by like 68, 70% in order for you to even have to pay back anything. Otherwise you could basically have that outstanding forever and it's only accruing interest at a 1% rate and you could use that money to live off of.

• 1:01:55Sam Parr?

  You could use that money to invest in other stuff. It's astounding to me. Am I, am I, Remy, you have a smirk on your face. So am I, am I getting this wrong?

• 1:02:02Ramit Sethi?

  Well, I have a, I was born with a smirk on my face. So let's just, I'm smiling inside, but I just look like this. So in general, you are right. In general, you are right. It is almost unbelievable. The average investor does not have the ability to do this. They have access to it. They just don't have enough money for it. But I do want to point one thing out. The, a lot of these seemingly too good to be true things have sprung up and become popularized in the last 10 years. Is there anything else that might've been going on in the financial markets for the last decade? Maybe that would have enabled these things to become popular, such as a record breaking

• 1:02:46Ramit Sethi?

  bull market and historical low interest rates? Yes. So you, we need to put this in context of history. Yeah, you can borrow at 1% rate, but if, go talk to your parents. Ask them what their mortgage rate was when they bought a house in the eighties.

• 1:03:01Sam Parr?

  Yeah, but these rates, but these rates are based, what's it called? The London, what's it called? The LIBOR? I forget what LIBOR stands for, but I believe I went and I think, I think LIBOR has only been around since the 50s, but since the 50s, I think the highest has ever been is 3.5%.

• 1:03:19Ramit Sethi?

  I, that's interesting. I'd have to look at that. I'm not sure about that.

• 1:03:22Sam Parr?

  Is it fixed or variable? It's variable. So that's why it's dangerous.

• 1:03:27Ramit Sethi?

  Yes, that's my point, Sam. Let's talk about the danger. So again, I don't know if it has to drop by 68%. The banks can call in their loan once it breaks the threshold. So all of this is amazing until it's not. And so I don't mean to be the sort of Luddite here or the boring voice. And this is unfortunately what sensible investors get thrust into when there's an insane bull market. You have guys like me coming on and saying, hey, it's cool. You want to put 5, 10% of your money in some alternative investment? Awesome. But remember, this doesn't always last forever. I've seen it myself three times in my life, and I'm not even 40 years old.

• 1:04:08Ramit Sethi?

  I've seen it in the 2000 crash, 2008, and you could say March 2020, that was temporary. But people are real tough until things go wrong. And suddenly you see people lose fortunes. When I went to Omaha to see Warren Buffett at his conference, one of the things that he and Charlie Munger said was, "We set up Berkshire so we can never run out of money." And to me, that is way more inspirational than, "I eked out an extra 1.5% return at a much higher risk rate." So I want everybody to know the game they're playing. Do you want to get 10% or 14% compounded annualized return rates?

• 1:04:52Ramit Sethi?

  You can. It's possible. You will take on a massive amount of risk. And when you think about it, it reminds me of what my trainer said. Right? We were starting to lift heavier and heavier. And I was like, oh, so like, how heavy should we go? And he goes, you know, at a certain point, you really want to ask yourself, "Do you need to put on that extra plate?" If you're competing, maybe. But there's a risk that you're suddenly taking. And we need to not just think about returns, 14%. We need to think about what can go wrong as well. And for a lot of people, they have never done what you did, Sam. They never sat out and plotted out how much money. They don't even know what they want to do with their money. And so I want people to think a little more deeply. This is one of the most important things in your life. And for most people, you will find that if they get a nice, simple

• 1:05:36Ramit Sethi?

  8% annualized return rate over time, and they continue contributing, they actually have more money than they know what to do with. It takes time, yes, but I want to challenge people to really think about this sensibly.

• 1:05:49Shaan Puri?

  Yeah, I think one of the good things about what you do, but also one of the disconnects between what we talk about is your message to help a mass number of people, as you have, is a most people message, what I call a most people message. You're trying to find the advice that you can give that if most people took it, would actually help them out, and they may not have an outlier in either direction, negative or extreme positive. And so you have most people advice. Our podcast, our podcast is the exact opposite. Our target audience is for people who are trying to escape most people results. They are trying to have a sort of out, how do you have a disproportionately outsized positive result? Whether it's because you built a success.

• 1:06:33Ramit Sethi?

  I think that's a good clarification. I will say, I think you earn the right to have an outlier result. It is, you hear stories about, oh, let's do this startup and we'll make $10 million or $50 million. Great. Those are extremely rare. And instead, my approach is layering. So as I talk about it, I will teach you rich. It's not just about personal finance, it's about a rich life. Start off, get your diversified portfolio, never worry about that again, right? I spend less than one hour per month on my finances. Then you want more? Start a business, right? Make a huge profitable business, or if you want to do a venture-backed business, great. But you earn the right to be an outlier. It is extremely rare and very unlikely that someone's just like, oh, I have this cool idea for

• 1:07:18Ramit Sethi?

  a dog business. I'm gonna make 50 million bucks. That's my personal philosophy.

• 1:07:22Shaan Puri?

  Right. And I think the bodybuilder analogy you said earlier is correct, but it's actually a different point than what you're making, which is, most people don't want to be bodybuilders. Bodybuilder diet is actually chicken, rice, and HGH, right? And, and there's gonna be a lot of, lot of downsides to the amount of, you know, stuff they're shooting into their body, but they need to do it because that is that game. That is a specific game. Same thing with venture-backed startups. Venture-backed startups is not just even business, it's the Olympics of business, right? It's basically saying billion dollars a bust. That's what you're signing up for. That's why it's really easy to. To shit on it or call out fairly that, hey, don't get caught up in the hype. There are many other ways to win that are often like easier, more pleasurable and whatnot. But like, that is the Olympics and that's why it gets celebrated, right?

• 1:08:06Shaan Puri?

  We celebrate Michael Phelps, even though it took immense sacrifice for him to go earn those eight medals. Like, you know, he swam, you know, six hours a day and ate 20,000 calories a day because that's what it took to compete at that level. And so I think it's important for people to figure out what is the, what is the advice they want to take? Like, I always say this thing, I say, I don't, most people don't have good results, which is basically, you know, most marriages end in divorce. Most people are overweight. Most, if you just follow what most people do, you will get the results that most people are getting right now, which is not very, not really lined up what people want, which is to be, you know, fit, happy and successful. And, and so you have to kind of figure that out. And I would say we're pretty aligned on that.

• 1:08:49Shaan Puri?

  I think what you, what you offer is a path that will work for almost anybody. And what we sometimes talk about is a path that won't work for most people. But for the few people who it will work for, it'll work in a big way. And so it's like two kind of different, two different ends of the same thing.

• 1:09:05Ramit Sethi?

  Yeah, I think that's an interesting approach, a different, interesting distinction to make between the two approaches. Sam, what do you think? You've been in both worlds.

• 1:09:15Sam Parr?

  Yeah, I, so I kind of do this thing where I put, I like to have, I like to have, I don't even know what I call it, but basically if everything goes to shit, I'm okay. So I, I like to have this base of security, this, this, this fortress of fuck you. And I like to have that. And then anything above that, I go incredibly balls to the wall, totally risky with.

• 1:09:43Ramit Sethi?

  Sam, we're the same. I have what I call the track out of stability, right? Where I, where I work, or sorry, where I live, the, these sort of basic fundamentals, health, relationships, that's all dialed in. It's relatively conservative, but then it allows me to be risk seeking on certain things like, oh, let me try this random podcast with no business model whatsoever, or let me try this experimental program, et cetera, et cetera. So I like that, but again, We need to know who we're, what game we're playing in, who we are, right? All things, you know, what does Mike Tyson say? Everybody's got to play until they get punched in the face. Everyone's an investment champ until the market goes down. And in order to see evidence of this, all you need to do is go to any investment forum,

• 1:10:27Ramit Sethi?

  including Fat Fire, Lean Fire, any fire, even the Bogleheads forum, and cycle back to what happened in 2008. Cycle back to what happened in March 2020. And you will, or my favorite is go to the crypto subreddits and you'll see people, all the bravado fades away and they go, oh my God, I just lost my kid's college fund. You do not want to be in that position, ever. On the other hand, you can make a lot of money if you have a sensible investment or even a risk-seeking investment, so.

• 1:10:55Sam Parr?

  But I think we're.

• 1:10:59Ramit Sethi?

  No.

• 1:11:00Sam Parr?

  None. Wow. I, I think what you and I slightly differ, or go different paths for me is, well, I don't know if it's entirely true, but basically I see, I have, I've got so many friends that like, if I told you what they do, well, you, you're, you're in the world, so you know. But if I told my parents what they do, they'd be like, this is fucking nuts. And, and, and they would be like, what are you talking about? Like Sean is like that, a lot of me and Sean's friends, the guy Sean used to work for, Michael Birch was like that, like, you are fucking crazy. This is nutty, this is not going to work. I have so many friends who they have made it work. And I, and I understand that in order to have outsized results, you have to do some wacky ass shit sometimes. And I accept that you have to, you have to be weird.

• 1:11:44Sam Parr?

  And I, I, I accept also that I'm not like that.

• 1:11:48Shaan Puri?

  The other thing I'll point out is it is not always true that to get more reward, you take more risk. There are moments in time and the wise, good investor eventually identifies these and it takes time to develop this judgment. There are times. Where you can take low risk bets that have disproportionate rewards and they're not often and it's easy to talk yourself into thinking that everything is like that. But, uh, but you know, sometimes there's this myth that, oh, if you want reward, you have to take massive proportional risk and it's not always proportional and, uh, and those are actually the best opportunities. Those are the, those are the ones that you should be like pouncing on and maybe to others, it looks like you're doing something crazy. But if you have accurately assessed it, you may find that it was actually not as high risk, but still high reward.

• 1:12:33Sam Parr?

  The way you do stuff, Sean, I think is just like, uh, the way I view it is like, I think it's crazy and, but I accept that your returns might be massive.

• 1:12:43Ramit Sethi?

  Yeah, that's a good way to put it. I mean, everybody's playing their game, right? But you, but to assess it, you need to assess it over the correct period of time and with the correct goals in mind. Sam, you might be like, ah, you know, let's fast forward, maybe two kids, not going to do that. Sean might say, I don't care, or I put some money in the bank, et cetera. There's a whole bunch of ways to evaluate it, but I appreciate that, Sean, there are definitely different perspectives and I appreciate hearing, you know, what game you are optimizing for. I think that that makes sense.

• 1:13:15Shaan Puri?

  Yeah. And what I would encourage anyone to do is I would actually start with your stuff and learn, learn the fundamentals. It's like, okay, I, yeah, I sometimes do some street bullshit, but like, you know, you can only do that once you first understand the fundamentals. You do them for a while and then you start to identify, okay, where do I want to, if I am going to stray from the path, right? If I am going to not play by the book, I better have a really strong reason to do so. I better have some like, some real conviction, a real knowledge, a real point of view that I'm willing and I'm, I'm, I actually understand what the heck I'm doing and I understand that the, the, the risks that I am taking with, when I take those risks, right? So you want to start there, not start with, oh, I saw this dude on Reddit did this thing and, uh, so I'm going to go YOLO that

• 1:13:59Shaan Puri?

  same trade and I don't even know what the hell I'm actually doing.

• 1:14:01Ramit Sethi?

  Yeah. Whenever you see on Reddit, you should immediately close that window and never listen to any financial advice on that fucking site. Listen, you need to be able to answer some basic questions if you want to do all this risk seeking stuff, you know? What does diversification mean? What is the typical asset allocation for a 40 year old? And why? Where does this 8% return per year come from? Where's, what is that? What's the rule of 72? When is my debt going to be paid off? What do I actually want to do with my money? If I had 500K, a million, 5 million? If you can't answer these questions, you are not ready to begin taking all this astronomical risks. Again, none of this matters because none of these people are listening to me right now. They shut this off two hours ago. They're like, fuck this old guy.

• 1:14:44Ramit Sethi?

  Risk seeker, I'm a risk seeker, he's so old. No, you will, time will tell, but I would strongly encourage you to be able to answer some of these basic questions before you choose your own path. And many times what I find is people start off, they're really gung ho. They get into this, they're like, oh shit, this is actually really easy. I spend less than an hour a month. My money's growing like crazy. I don't have to worry about it ever again. We're going to be multimillionaires. Let me go live my life. That's way more exciting than optimizing some bullshit 0.5% return. And Sam, you know, I've been telling you about this too. That's why I told you, stop talking about your 3% drawdowns. Like, that's all great when you're 21 and it's cool. Now let's talk about where you're going on vacation. That is way more interesting.

• 1:15:29Sam Parr?

  You told me where to go. I booked my tickets. I had my European trip planned. It got canceled because of Delta, but I do what you say.

• 1:15:35Shaan Puri?

  By the way, let me share your side of the story on the engagement ring. You gave Sam some advice on the engagement ring. What was it?

• 1:15:41Ramit Sethi?

  Okay, so, you know, Sam, Sam is a very good listener. Sam, I have to say, I appreciate you. You ask for advice, which is rare, and you listen. So I'm always like, yeah, let's talk. So he comes, he's telling you about, you know, he's going to propose. And, you know, I got married three years ago, so I went through the whole process. And I got very deep into the whole wedding thing and all that stuff. And people are like, oh, was your wife like a bridezilla? I was like, if anyone was going to be a zilla, it was going to be this groomzilla right here. Because I knew like all that, I was loving. So, just a couple. Context, part of my philosophy is save for the big things before you need them

• 1:16:26Ramit Sethi?

  because you know that they're gonna happen. Most people are going to be married. So I started saving, putting money away for my wedding and my honeymoon, like in my twenties, before I even met my wife. Why? Because I knew it was gonna happen one day and I wanted to have an awesome wedding, awesome ring, awesome honeymoon. Again, my own philosophy for important things in life, I don't want to have to look at the price. Okay? So a lot of people like, "That's crazy. Why would I start saving when I'm not even in a relationship? That's weird." I go, "What's weird is to get to your wedding planning and not have enough money, or, you know, basically just have to make all these short-term decisions. Some people go into debt for their wedding. I don't believe in it.

• 1:17:08Ramit Sethi?

  I want you to have an amazing extravagant wedding, if that's what you want, or a beautiful honeymoon, or whatever. I want you to be, start planning early." So Sam comes to me, he goes, "Hey, I'm thinking of getting this thing." I said, "Oh, cool. You know, how are you thinking about it?" And he tells me, "Yeah, I have this like budget in mind."

• 1:17:25Shaan Puri?

  Five grand?

• 1:17:26Ramit Sethi?

  Yeah, thank you. I was like, "You, I was like, "No, you're gonna spend more than that." Now, why did I say that to him? Because I know how much money he has, okay? And I know that there are certain benchmarks and certain numbers that if he had, if he was a schoolteacher and he told me five grand, I would say, "Oh, my God, that's amazing. Like, she's gonna love it." And then I went a little deeper because Sam got very quiet. Sam knew he was being cheap, but he didn't know how to articulate. He had a lot of emotions running through his body. I said, "Sam, let me ask you a couple of questions." Because he started off with this utilitarian Silicon Valley logic. He goes, "Well, you know, it's, you guys already know the arguments. Oh, I don't believe in diamonds. It's all made up. It's so fake. Well, why don't we just get this bullshit to..."

• 1:18:11Ramit Sethi?

  And I'm like, "Okay, Sam, let me ask you a question. Does your fiancee care about rings?" "No, no, no, no. She's not that kind of person." I said, "Oh, okay, okay. Hey, out of curiosity, does she have a Pinterest board?" He goes, "Oh, yeah." I go, "What's on that Pinterest board relating to rings?" "Oh, she's been like tracking rings for like the last 15 years." I go, "Sam, have you talked to her about this?" He goes, "Well, she did mention that she kinda wants..." Like, and then he breaks down like the entire thing of what kind of ring she wants. I go, "Sam..." You can afford it. This is important to her. This is not about you and your dumb vision as a 21-year-old utilitarian. It's about what your future wife for the rest of your life wants. This one thing. And Sam was awesome. Sam, you listened, you were like,

• 1:18:53Ramit Sethi?

  oh, like, he never thought about it like that, because it's all tech bros he talks to. Well, apparently, he thinks of someone who actually, you know, is like, let's talk about the softer side. And it was awesome. Sam, take it from there. What happened when you went to get that ring?

• 1:19:07Sam Parr?

  I'll say, I was gonna spend five grand. I was like, I can't do this anymore. And I ended up, I think I spent a lot, 28, 29, $30,000.

• 1:19:18Ramit Sethi?

  It's not about the money, Sam. It's not about the money. What, why?

• 1:19:22Sam Parr?

  It doesn't matter, bro. Do you want the details of the story? People want to know.

• 1:19:25Ramit Sethi?

  Okay, okay. You're right.

• 1:19:26Sam Parr?

  They want the details of the story. I've given the details of the story. And looking back, the money, it didn't matter at all. And she was incredibly happy. And I felt so proud.

• 1:19:37Ramit Sethi?

  Dude, my man. So I'm happy for you. I'm happy for your wife. I actually, I'm glad you mentioned the numbers. And you guys are awesome. On this podcast, you're always mentioning numbers, which is very rare. So I love it. But what I want to emphasize is that, at a certain point, it's actually not about the dollar value. And people, particularly entrepreneurs, and particularly tech guys, are obsessed with monetization. They're always talking about numbers. Yeah, you should know your numbers. Yes. But a rich life is so much more than your numbers. Just think about this. When you went home to visit your parents, and you hugged your mom or your dad, did you think about, oh, how much is this costing me in my hourly rate? Oh, how much did my mom pay for that chicken? Because we could

• 1:20:21Ramit Sethi?

  get it cheaper at Costco. No! The most important things in life are actually not quantifiable. So what I want to emphasize is that... We are taught from day one, and I started a Silicon Valley tech company. We raised money. I've done all this stuff, so I know what I'm talking about. We are taught that quantifying is the most important thing to do. What are your metrics? What's your attribution? What's your conversion rate? That's all we talk about. And yet, in the most important things in life, sitting outside on a picnic with our kids, going, being able to extend your lunch on a weekday with your friend from college who just happens to be in town. Money is irrelevant. The number is irrelevant. Being able to do it is rich.

• 1:21:03Ramit Sethi?

  And so for Sam, Sam, I fucking love it. You did it. The money part irrelevant. You had the money. You could do it. More important was recognizing, my wife wants this. It's important to her. And I'm going to rewrite my old story from when I was 21 into a new man and a new partner. And I'm going to use some of my resources to do it. And that, that is connected and amazing.

• 1:21:28Sam Parr?

  Well, thank you. And we'll have to end with that beautiful, that beautiful little monologue there. You're the man. What's the name of the podcast again?

• 1:21:37Ramit Sethi?

  I Will Teach You To Be Rich with Ramit Sethi.

• 1:21:40Sam Parr?

  And I'm looking it up now. We're going to link to it. Thanks, dude. This is awesome. But you have a link that you go to too, right?

• 1:21:47Ramit Sethi?

  Yeah, you can go to IWT.com/podcast, or it's on Apple or Spotify.

• 1:21:53Sam Parr?

  Thanks, man. This is awesome. What do you say, Sean?

• 1:21:56Shaan Puri?

  Yeah, thanks for coming on. Sam, I think you and Sarah should go on his pod and be one of the couples.

• 1:22:01Sam Parr?

  I'm down. I'm down.

• 1:22:03Ramit Sethi?

  You guys would be amazing.

• 1:22:05Sam Parr?

  That would make me uncomfortable, but I would do it.