866: The Ultimate Guide to Going Broke by James Altucher on Life & Money Principles to Optimize Your Life & To Live By
This is optimal finance daily episode. Eight sixty six the ultimate guide to going broke by James altar of James altered dot com, and I'm Dan, I'm your host here on the show. And I'm here every single weekday reading to you from some of the best personal finance blogs on the planet. If you've got any topic requests for us, definitely come and share those with us at old, podcast dot com. That's oh, L D, podcast dot com. And before we get to today's post from James, thank you so much to fund rise for their support, fundraise enables, you to instantly access high quality, high potential private market real estate projects from high rises in DC to multifamily apartments in L A, and each real estate project is carefully vetted, and actively managed by fund rises team of real estate pros fundraise is the future of real estate investing so visit fund rise dot com slash oh. FD. That's F. U N. D R, I S, E dot com slash FD to have your. First three months of fees waived for now. Let's get right to our post for today as we start. Optimizing your life. The ultimate guide to going broke by James altar of James alter dot com. I was so happy in nineteen ninety five I was preemption, I'd get into work at ten AM sneak out around four PM I had a one room apartment. And my only piece of furniture was a foam mattress, it was summer. And I had no air conditioning. I had no sheets for the mattress. So by morning every day. All of my sweat would be absorbed into the foam of the mattress, if I woke up in the middle of the night, and went to the bathroom, the roaches would scurry away and I'd hear the click, click click. I leave work at four PM and go play backgammon all night with my friends at Stein way. Billiards in a story, I had a crush on a waitress and would write notes on two dollar bills. When I paid for my meals, I was creepy, and she never responded. It was the best time in my life. I never saw any of these people ever again. I started a business. I started to sell my friendship to the highest bidder. My clients clients don't care about your product or service. They can't tell the difference between you or your competitors. So I got. Every client for my first business by selling my friendship and bribery. But that's another story I was scared all the time. What if I couldn't make payroll, what if our biggest clients realized, I was at total fraud, and fired me. What if my key employees quit? What if my partners were talking behind my back, I had no confidence? I thought I had to fool everyone all of the time in order for them to like me. I started spending less time on the things I loved in order to spend more time on the things I hated that is the worst kind of spending, and then the second worst selling my friendship for money, all of my friendships were based on money all my success came from a lack of confidence. That's a bad start. Then I made tens of millions of dollars cash. Lost it made it again lost it made it again. Got divorced. Lost my home lost my money, made it again lost. It learned a lot too much. I wish I hadn't learned so much I spent twenty. A years going broke over and over again. I hope it doesn't happen again. I can't take it anymore. The ultimate guide to going broke a thinking you are smart. Every day I wake up and say, I am stupid. Some people call it beginner's mind as if to fool themselves. But I know the truth whenever I think I'm smart. I lose money whenever I think I'm stupid. I get curious. I get help. I help others and I make money stupidity is a superpower. When you use it, right. Be value. Not understanding, how to value something studying similar deals. Similar sales at cetera. Everything has evalu-, even if it's intangible come up with a formula for valuing things even time. See volatility not understanding the volatility of income streams, even a stable salary is not so stable but business or investment income is filled with uncertainty, and friendships and love can be vol. Well as well. D- leaks. Bad relationships alcohol addictions need for validation, etc. These will always cost more time and money than one thinks every day today, I have to be aware of my leaks. Keep them in check e ego, the best way to make money save money, and be a good person is to start off the day saying, I'm stupid. I know nothing e one delusion not knowing where your money is, and where it's going setting aside, for taxes, etc. F- spending. For example, if you have a million dollars and can make a safe five percent on your money. Why spend ten percent on a car when you can spend a point five percent on Uber per year? People spend on big items houses, colleges car, etc. And then they tried to save by not going to Starbucks, don't let the myths of society rule. You're spending g not understanding risk every investment. And every bet must have an unfair advantage, even buffet refuses to bet a dollar on a golf game. Because as he says, I don't wanna break discipline good investors. Don't take risk. They mitigate risk good. Entrepreneurs don't take risk. They mitigate risk success is about going where others perceive risk. But you learn to reduce it each diversification. Not just in stocks, but in all investments stocks private deals loans at cetera and even how you invest, your time all work and no play. I being. Every day, help others make money or achieve their goals. Even one to two helps per day adds up to seven hundred thirty a year which adds up to a lot of people who want to give you unfair advantages back when you need it, Jay. Not looking at the worst case divorce disease depression, business failure, economic cycles. A one year deal might turn into a five year deal. A trend might not work out at cetera eighty percent of the time. The worst case happens deal with it k- position size people don't believe me when I say this, but the less you invest the more you'll make sleeping well with less anxieties the best investment, you can make for me. The smaller, I invest the less, I have to think about an investment, which means I can let it ride. The key to wealth is leading good investments ride for years. But you can only do this. If you start off very, very small L lone wolf lone wolves are failures thinking. If I do this deal on my own without sharing it with others a win bigger. You always want to invest with more people, and particularly people smarter than you m working with losers. It took me twenty years of trial and error to learn the difference. I'm ninety percent of the way there. But still learning every day, this is an important rule. Losers will never make money or have a good deal winners make money over the long run, only stick with the winners. The worst are sore losers show me a sore loser. And I'll show you a loser an losers part to a loser is someone who blames others is a victim blames. The economy blames a partner has lots of bad relationships shoes. You glimpses of poor integrity, because you will eventually see that aimed at you gossips about others because, to others, they are gossiping about, you doesn't know how to value risk thinks entrepreneurship is about risk has lots of accidents, Mike car accidents getting mugged late for me. Meetings because of traffic, etc. And doesn't return calls. Oh, losers part three can a loser change. Yeah. I've always had some elements of winner and many elements of loser. I've had to work on each thing, and I'm still working on it, but I try to make up for it by helping as many people as possible. So I learn how to provide value. But here's the thing losers can change. But you can't change a loser focus on audience, selection and not audience development p focusing on outcomes is pathway to failure. People say make a goal and then go for it. This is B S advice as you get better at something as your process. Improves you, learn more, which means goals and outcomes change focus on getting one percent, better each day and outcomes will then happen. Q envy admire success. So you learn to a cabbie, Larry, when you compare you despair. I can count ten people right now who used? To be close to me, who now hate me, it bothers me that they hate me. I wonder I always help them now. They hate me this anxiety. I feel is almost as bad as envy. It's like reverse envy. I need to stop and I'm working on it. I have too much of a need for everyone to like me are fear versus growth, making fear decisions instead of growth decisions, for example, saying yes to something, you don't want to do because you're afraid, you'll lose an opportunity. If you say, no bonus s not buying piece people say, money buys freedom, but then they get more stressed. The more money they have make sure when you have money to respect it take the downtime, you've earned look at the sky, and take a deep breath. Think about nothing if you don't respect money. It won't respect you. I haven't been happy since nineteen ninety five until now it's twenty nineteen and I'm actually happy again, for the most part. It's an everyday battle. I'm a dick. To being human. You just listened to the post titled the ultimate guide to going broke by James altar of James alter dot com and thank you again to fund rise for their support come by fund rise dot com slash oh, FD to have your first three months free. Private market real-estate has historically provided excellent ongoing cash flow, even as it supports long-term growth, private market assets. Like these are a strategy for diversifying beyond public market investments, and even other kinds of real estate like publicly traded, reits, and fundraise is the future of real estate. Investing the platforms innovations power and investor, I model by eliminating the bloated costs and middlemen that have traditionally weighed down, realistic investing saving investors time and money unparalleled transparency, and real time reporting let you see how the development of specific properties impact your overall portfolio. So check it out visit fund rise dot com slash O. F FD. That's F. U. N. D. R. Or I s e dot com slash oh. FD to have your first three months of fees waived, and that's it for today. Thank you so much for listening to optimal finance daily have a great start to your week. And I'll see you back here tomorrow where your optimal life awaits.