The Underrated Brilliance of... Boring

0:00 We certainly live in exciting times.

0:02 Even if you ignore the barrage of headlines that would have

0:06 been considered once in a generation events just a few years ago,

0:09 we are still living through perhaps the most intense

0:11 period of technological and societal change in human history.

0:14 On a more personal level,

0:16 we are working jobs that didn't exist a generation ago,

0:19 making a career in ways that may or may not even be legal,

0:22 and living lives that are going to look considerably different from our parents,

0:26 for better or worse.

0:28 Amongst all of this uh excitement, it has become very easy to chase new trends,

0:33 fall into increasingly easy financial traps,

0:34 and adopt a rather nihilistic view that maybe all

0:37 of these changes aren't leading us in the right direction.

0:40 But you already knew all that.

0:41 What all of this has shown though is the hidden brilliance of boring.

0:46 Boring jobs, boring investments, boring decisions,

0:48 and maybe even a boring lifestyle have gone from an unfortunate burden

0:52 to a coveted luxury that even the richest people in the world are embracing.

0:56 Or at least they are pretending to.

0:58 You're pretty low-key in terms of what we think about billionaires.

1:01 You don't drive a Lambo.

1:03 No, I I do not.

1:04 That is Sam's Toyota Corolla in the parking

1:06 lot of FTX headquarters in the Bahamas.

1:08 My name is Tammy and I'm 38 years old and I

1:11 quit my nursing job to open up a laundromat in Arizona.

1:15 My business brought in around 475,000 in 2024.

1:17 Do any of your billionaire friends ever joke with you about

1:20 the Cadillac and that you're driving and not a something flashier?

1:24 We have 2,755 people on the Forbes Forbes billionaire list this year.

1:29 This is the McDonald's I go to.

1:31 So, what do you have at McDonald's?

1:32 Probably three times out of four I get a sausagey McMuffin

1:35 and but then at lunchtime I get quarter pounder and try.

1:39 Billionaires are not like you or me.

1:41 But it's really important for them that you think they are.

1:44 So important in fact that some of them

1:46 are now spending millions of dollars every year

1:48 for PR agencies to spread the message that they

1:50 are just regular people that drive regular cars,

1:52 eat at regular restaurants, and live in regular homes.

1:55 But in the age of flex culture,

1:57 why the are these people trying so hard to look normal?

1:59 The now convicted fraudster Sam Bakeman Freed once had billions of dollars

2:03 of customer funds at his disposal to live a lavish life in the Bahamas.

2:07 In the early days of FDX,

2:09 Frerieded and his co-conspirators reportedly drove around

2:11 in the expensive sports cars typical of Crypto Bros.

2:14 According to evidence presented during his trial,

2:16 SPF would later sell the cars and advise other

2:19 executives at FDX and Alama to do the same because

2:22 it didn't fit with the image of the company

2:24 that they were trying to present to customers and investors.

2:26 SPF's shitty Toyota Corolla that paid influencers made such a big

2:29 deal of was about as authentic as the company's internal accounting department.

2:33 The car, the haircut,

2:35 the wrinkled haircut were more carefully managed than customer funds.

2:38 The group did this because they knew

2:40 that the image of a boy genius that didn't care

2:42 about luxuries or power would be appealing to people

2:44 looking for an honest place to keep their funds.

2:47 SPF and the rest of the gang were all frauds,

2:49 but putting a lot of effort into crafting a folksy image is done by most

2:53 prominent business leaders for three simple reasons

2:55 that are mostly[ __] If you know these strategies,

2:58 you will be able to see through what is little more than personal marketing.

3:01 The first reason that they do this is

3:03 because even if they aren't running a fraud,

3:06 acting like an every man still gets people to give them what they want.

3:09 Stealth wealth is when rich people buy products that are

3:12 of high quality but does not flaunt their wealth.

3:14 They do this because they don't want the attention and problems

3:17 that come along with people knowing that they are rich.

3:19 Billionaires doing a Bloomberg or NAS daily interviews featuring their basic

3:23 car and geeky wardrobe is not the same thing as stealth wealth.

3:26 Instead of hiding their financial means,

3:28 these people are just trying to show off as loudly as possible

3:31 that they don't care about their money or that their money hasn't changed them.

3:35 It's not stealth wealth.

3:36 So, let's call it poverty peacocking.

3:38 And it's a great move for their personal brand and any companies they represent.

3:41 Humble CEOs are the new fashion.

3:43 The world's biggest companies are run by men

3:46 who wear hoodies and turtlenecks instead of tailored suits.

3:48 And other business leaders are trying

3:50 to emulate that trend because investors like it.

3:52 If business leaders very publicly give up flashy luxuries,

3:55 it also sends the message that they will be frugal

3:58 running their business and the data actually backs this up.

4:01 What role has luck played in your success?

4:04 Well, there there's luck enters into everybody's life.

4:07 According to a study conducted by the National

4:10 Bureau of Economic Research, in 2012, CEOs and CFOs who were not frugal

4:13 in their own spending were more likely to have instances

4:16 of insiders perpetuating fraud and were more likely

4:18 to push equity based incentives to increase their own income.

4:22 The study separated personally frugal and flashy

4:24 executives by looking for purchases like a personal

4:27 car that was worth over $75,000 or a boat that was over 25 ft.

4:32 Billionaires and executives didn't actually want to give up their luxuries,

4:35 so they just started lying about it.

4:37 Buffett does own an old beatup car,

4:39 but he is usually driven around in a fleet of suburbans with his security team.

4:43 Zuckerberg wears the same gray shirt everyday,

4:46 but they are customade by Brunell Coochinelli.

4:48 Musk does rent a tiny home next to the SpaceX factory,

4:51 but the Wall Street Journal pointed out that he spends

4:55 most of his time in an 8,000 ft $12 million mansion,

4:58 and all of these men fly private.

5:00 They are welcome to these luxuries.

5:02 It is their money.

5:03 But there are still two more reasons why they

5:05 try so hard to pretend that they don't exist.

5:07 So, it's time to learn how money works to find out why

5:10 billionaires spend millions to try and convince us that they spend nothing.

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6:17 The second reason that really rich people go above and beyond

6:20 to look normal is because it is an effective sales tactic.

6:23 If you make millions or even billions of dollars in your life,

6:26 I have good news for you.

6:28 Unless you made your money as the founder and CEO

6:30 of a household name company or you are a celebrity,

6:33 it's really easy for you to live a life

6:35 where nobody knows who you are apart from your family,

6:37 close friends, and the people that work for you.

6:40 According to Forbes, there are 2,640 billionaires on Earth in 2023,

6:46 down from 2,668 in 2022.

6:49 The publication also admits that many

6:51 billionaires are not included in this number

6:53 because they could not collect data to accurately report their private fortunes.

6:56 Even if you are really interested in personal wealth,

6:59 you would probably know 50 of these people at most,

7:02 and the rest just look like people in suits.

7:04 The point is that every other rich person you know

7:06 about is only known about because they want to be.

7:09 And why would they give up an easy life to enjoy their wealth and peace?

7:12 It's because their own success is one of the best ways to sell stuff.

7:16 Whether it's Musk promising that full self-driving is just around the corner,

7:20 Trump slapping his brand name on everything,

7:22 or Kevin Oly role playinging as a businessman to pitch FTX, people buy success.

7:27 People also buy relatability.

7:28 So, the clever billionaires that want to use

7:30 their image to boost their own company will make sure

7:33 that people can see them living lives that people

7:35 can relate to and aspire to at the same time.

7:38 The New York Post recently ran an article about Warren Buffett's wife,

7:41 who was supposedly overheard complaining about how expensive a $4 cup

7:45 of coffee was at the annual Allen and Company Sun Valley Conference,

7:49 which is nicknamed the summer camp for billionaires.

7:51 This story is also picked up by publications like Business Insider that ran

7:55 it with the title Warren Buffett just

7:57 became even more relatable for a billionaire.

8:00 If it wasn't obvious, let me ruin the fun for you.

8:03 Nobody at this conference would have passed along

8:06 this kind of personal conversation to the press.

8:08 You are reading about it because they want you to read about it.

8:12 Buffett's frugality is credited in his investment company success.

8:14 So, he is selling an image just as much as Trump

8:17 is with his stakes and Olyri is with his wacky pants.

8:20 For Buffett, this is a better story than a bunch of billionaires

8:23 getting together to talk in private about well, who the knows?

8:27 The only information that seems to leak

8:29 from these events is how expensive the coffee is.

8:32 Being relatable is an equally important sales tactic

8:34 to people who want to sell a get-rich quick course.

8:37 An important element of any grift like this is that people need

8:40 to believe that someone has become wealthy and that they can do it, too.

8:43 So, grifters will often talk about their humble

8:45 beginnings while standing in front of a rented Lamborghini.

8:48 This creates a situation where a lot

8:50 of the people you see promoting their courses

8:52 on YouTube will be poor people pretending

8:54 to be rich people pretending to be poor people.

8:57 Billionaires and get-richqu salesmen presenting a different

8:59 image of themselves to the world than who they really are behind closed

9:03 doors probably won't surprise most of you.

9:05 But there are two ways this lie

9:07 is hurting the personal finances of regular people.

9:09 The first way is simply the financial harm that buying into the trope

9:13 of the relatable millionaire or billionaire can

9:15 do to people who follow them blindly.

9:17 Successful people telling regular people to cut down

9:19 on luxuries to improve their financial situation is fine.

9:21 But if they are telling them to cut down on luxuries to take

9:24 on a side hustle so they can spend their money on a course instead,

9:27 that's obviously bad.

9:28 And it tragically happens all the time.

9:31 It's easier for people with something to sell to ask

9:34 people to cut down on discretionary spending if they have already

9:36 built up a personal brand around driving a cheap car

9:39 and living in a tiny house even after they become a millionaire.

9:42 Being a frugal millionaire is also easier to fake if the supposed

9:46 millionaires ever get questioned about the legitimacy of their own success.

9:50 Obviously, grifters building an image so that they

9:52 can sell a bad investment or overpriced

9:54 course are going to do serious financial damage

9:57 to the people they rope into their schemes.

9:59 But even the billionaires paying their PR teams to get them positive media

10:02 coverage about how relatable they are are still doing damage to a lot

10:06 of people's personal finances because they

10:08 are reinforcing a common trope in personal

10:10 finance that everybody's financial problems are

10:12 caused by them spending too much.

10:14 The lies that very wealthy people tell about their humble cars, basic homes,

10:17 and average lifestyle makes it easy

10:19 to guilt people for enjoying little luxuries.

10:21 Because if Warren Buffett drives an old car, why do you need a new one?

10:25 This does not excuse the reckless spending

10:27 that a lot of Americans are guilty of.

10:29 But it does take the attention away from their income.

10:32 After a certain point,

10:33 people can't improve their personal financial situation by being more frugal.

10:37 They need to increase their income.

10:39 And that's the third reason that billionaires

10:41 spend too much money on looking poor.

10:42 and helps them keep their workers in line.

10:45 The accounting firm Ernston Young in a report estimated that the number

10:48 of family offices in the world had doubled between 2001 and 2016.

10:53 Family offices are investment firms dedicated exclusively

10:56 to managing the wealth of a single

10:58 family where you and I have some shares on Robin Hood or Schwab.

11:01 The ultra rich keep their money in family offices.

11:04 An article by Barren reported that one of the fastest

11:08 growing expenses for these firms was public relations.

11:10 Many of these family offices are so big that they

11:13 now have as much influence as private equity firms.

11:15 And with influence comes scrutiny.

11:17 Private equity firms are some of the most

11:19 hated financial institutions because they have a long history

11:22 of bankrupting beloved companies and laying off thousands of workers

11:26 all to try and turn a slightly better profit.

11:28 Right.

11:29 Um that's exactly right.

11:30 uh what we've seen, you know,

11:33 in uh industry after industry uh where private equity buys up

11:37 uh businesses is that they're really responsible for some of the worst,

11:41 most abusive business practices in the country.

11:43 The scrutiny has been very bad for private equity,

11:46 but the anger is only directed towards the managing partners of these companies.

11:50 When a family office does the same thing,

11:52 public outrage over job cuts would be blamed on the family.

11:54 And that's where a good PR team is employed.

11:57 It's easy for workers to demand better wages from a company

12:00 owner who is photographed lounging on a super yacht.

12:02 It's easier for a company owner to push

12:04 back against worker demands when all of their public

12:06 profile is about how they try to save every

12:08 cent they can in the name of their business.

12:11 The author of the article concluded that corporations

12:14 became people as people too became corporations.

12:16 And while the number of corporations has actually been falling,

12:20 the number of billionaires has been rising.

12:22 But there are actually far more billionaires in the world than most people know.

12:27 According to Forbes,

12:29 America has 735 billionaires worth a combined $4.5 trillion.

12:33 But how many billionaires are there really?

12:37 When Forbes publishes their list,

12:39 they add a small qualifier that almost nobody notices.

12:43 There are 735 listed billionaires in America

12:46 because nobody knows how many there really are.

12:48 Forbes employs more than 50 employees in 16 countries to compile their list.

12:53 According to their methodology article,

12:54 they use public financial records, interviews with employees,

12:57 rivals, attorneys, and they attempt to validate

13:00 the numbers by contacting the billionaires directly.

13:02 Some cooperate and give Forbes access to their personal

13:05 finances so they can report a more accurate number,

13:08 but the magazine admits that most don't.

13:10 But on the other hand, um, you know,

13:14 these billionaires often don't want you to look under the hood

13:19 and they're constantly finding clever ways

13:22 and different ways to filter their money,

13:25 move it around, try to hide it, or or, you know,

13:29 just coming up with just new um, you know, tax strategies.

13:32 Much of the list is an estimated guess,

13:34 but there are also a lot of billionaires out there

13:37 that will never show up on the list even though they should.

13:39 The list is really, you know, a list of individual billionaires rather than,

13:44 you know, widespread family fortunes.

13:46 And the same thing for people asking

13:49 about Vladimir Putin or or things like that.

13:52 It's hard to break out where money is so intermingled with the government.

13:57 One group are the crony government leaders using

13:59 their country's central bank as their own personal credit card.

14:02 But I think there is another group that is even more interesting than that.

14:05 Forbes and Bloomberg,

14:06 who both get a lot of online attention from their billionaires list,

14:09 have behind closed doors, admitted that they have no way of keeping

14:12 track of the most common type of American billionaire.

14:14 In an interview with the New York Times, Kiri Dolan,

14:16 the editor who oversees the Forbes team responsible for the annual list,

14:20 gave a profile of a billionaire that they would never be able to find.

14:23 She told the Times that it's someone who

14:25 quietly sold a stake in a business for, say,

14:28 $250 million in the '90s and then invested it.

14:30 Well, that's it.

14:31 That's all there is to it.

14:33 $250 million is a big exit, especially back in the '90s,

14:37 but it wouldn't have made the news unless it was a well-known household brand.

14:40 Most good businesses of this size are boring

14:42 and only sell their products to other businesses.

14:44 As a former investment banker who has worked on a lot of these deals personally,

14:48 I can tell you that $250 million exits happen every day.

14:51 And sometimes it's not even the founders who

14:54 are walking away with all of the money.

14:56 Silent early investors in a private company would only show up on the paperwork

14:59 in the part that tells the acquirer where to send the money.

15:02 If a person took all of their earnings from a sale

15:04 in 1999 at the height of the dotcom bubble and put

15:07 all of that into the market and then spent a meager

15:10 $1.2 million a year or $100,000 a month on themselves,

15:13 they would now be worth $3.3 billion

15:15 and nobody would know unless they wanted them to.

15:18 There are flashy individuals that want to show off their wealth.

15:21 And there are billionaires that couldn't avoid attention

15:23 because the companies they founded are too well known.

15:25 But most billionaires are invisible to everybody but their close family,

15:29 their accountant, and the IRS.

15:31 There are three very important reasons why these billionaires do this and two

15:35 fascinating strategies they use to make sure they stay under the radar.

15:38 The first reason that most billionaires try very hard to stay off

15:40 the Forbes list is because of the problems that come with public notoriety.

15:44 Lottery winners are routinely harassed by people begging for money,

15:47 filing frivolous lawsuits,

15:48 and family members pitching them a business idea over Thanksgiving dinner.

15:52 The average lottery winner is seven times more

15:54 likely to declare bankruptcy than the average American,

15:56 and the public attention they get is a big reason why.

15:59 Not only is getting chased for your money annoying and costly,

16:02 it can be dangerous.

16:04 Known wealthy people are the logical targets of kidnappings,

16:07 burglaries, and blackmail.

16:08 High-profile business leaders and celebrities employ personal security.

16:12 But it's difficult for these teams to always cover all their family members.

16:16 Personal security is also expensive

16:17 and inconvenient because they need to travel,

16:19 work, and live with you to remain effective.

16:22 A nice relaxing life enjoying your riches can quickly

16:24 turn into another job of managing a security team.

16:28 executive protection agents serving Bollywood's biggest stars

16:30 can earn more than $300,000 a year.

16:32 If nobody knows who you are or what you have in your Schwab account,

16:37 then all of these problems can be avoided.

16:39 And that's just the first reason.

16:40 The second reason that most billionaires try very hard

16:42 to avoid being included on the Forbes list is

16:45 because they don't want to be seen alongside

16:47 the same people that normally get included in the magazine.

16:49 A lot of people that get articles written

16:51 about them in Forbes paid for the privilege.

16:53 Magazine subscriptions are down and selling online ads

16:56 doesn't make nearly as much money as selling

16:58 physical copies did back when it was

17:00 the most popular way to read these publications.

17:03 Magazines like Forbes have had to look for alternative

17:05 revenue sources and doing paid articles is a lucrative option.

17:08 People with seaite career ambitions will get

17:10 their PR manager to pay the magazine a few

17:13 thousand to write a fluff piece about how

17:15 they reshaped corporate culture at their last company.

17:17 For a few thousand more,

17:19 they can be included on a list like the Forbes 30 under 30.

17:22 Most of these lists are comprised of people that paid to be there with a few

17:25 big names like Sam Bankman Freed and Martin

17:28 Skreli smattered in to give the list some credibility.

17:31 It was once an honor to be among Forbes's annual

17:34 selection of 30 innovative business people under 30 years old.

17:37 But in recent years, more and more individuals who have appeared

17:41 on the list have ended up behind bars.

17:43 Forbes reports on a lot of people that want

17:45 attention because they are the easiest people to report on.

17:48 Business people normally only want attention if it serves them in some way.

17:52 Linking a Forbes article on your resume and LinkedIn profile could

17:55 be a good career move and worth the few thousand it cost.

17:58 But for people who are already rich,

17:59 it looks like they are desperate for attention.

18:01 There is no way to tell who was written about in Forbes on their own merit,

18:05 who was written about unwillingly,

18:07 and who was written about because they paid for it.

18:09 Established billionaires don't want people to assume it's the latter,

18:12 so they just avoid media attention altogether.

18:14 The other group of people that pay magazines like Forbes to write about

18:18 them are scammers that make their money

18:20 by selling online courses or cryptocurrency projects.

18:22 If you watch some of their ads,

18:24 you will see that they brag about being featured in Forbes or Money Magazine,

18:27 which gives them a lot of credibility,

18:29 and they can win over some skeptical customers.

18:31 Most people will think that magazines like this wouldn't

18:34 play any part in promoting a scam, but they would.

18:36 Could it be that the Forbes 30

18:39 under 30 list really just attracts entrepreneurs who

18:42 really don't have a legitimate business just

18:44 to land on their list for social proof?

18:46 The business people that billionaires work

18:47 with every day know about this paid publicity.

18:50 So for them showing up in Forbes is a mark against someone's business case.

18:54 The third reason that most billionaires avoid

18:56 publications like Forbes is plain old selection bias.

18:59 The people getting featured in Forbes magazine are usually

19:02 at the height of their careers or business success.

19:04 After that, there is a long way to fall and not a long way left to go up.

19:08 The people that are heads of major companies

19:10 or members of high-profile families can't avoid it.

19:13 But anybody that seeks out attention knows the risks

19:15 and does it anyway because they like the attention.

19:18 People with these character traits will long-term be less

19:21 likely to manage their wealth and their business effectively.

19:23 They will be more likely to take large risks

19:26 and be overly assured in their own business skills.

19:28 People like Kevin Olirri would be a lot wealthier today if they had

19:32 just invested their early career winnings

19:33 into the market and then did nothing else.

19:36 Someone's financial success becoming public information can also

19:39 turn a lot of their customers off their brand.

19:41 People like to support small family businesses over soulless corporations.

19:44 But if they find out that the owners are already billionaires,

19:48 their customers loyalty will not be as strong.

19:50 On the expense side, a known billionaire will also be

19:53 offered more expensive options anywhere they go.

19:55 they will get over quoted by contractors

19:57 and get judged for negotiating discounts.

19:59 There are very few benefits of having one's wealth publicly

20:02 known and there are a lot of problems it causes.

20:05 Smart billionaires understand this and smart

20:07 billionaires are more likely to stay billionaires.

20:09 So, you have just become a billionaire

20:11 and you want to stay completely anonymous.

20:13 Excellent.

20:14 I have clearly taught you how money works.

20:16 So, here is what you are going to need to do.

20:19 If your money is coming out of the sale of a business,

20:22 make sure it is a private sale.

20:24 These days, launching your company onto public markets through an IPO is only

20:27 really necessary if you are going to be the next Facebook or Amazon.

20:31 And if your company is that big, sorry, it's already too late for you.

20:34 A private equity exit or acquisition from a bigger

20:37 company is quieter and easier to in most cases.

20:39 And terms of the deal don't have to be public record in the press release,

20:43 so there is nothing for the journalists at Forbes to dig up.

20:46 Once you have secured the bag, you should then invest it broadly in the market

20:50 and avoid putting too much money into any one company.

20:52 If you own 5% or more of any public company,

20:55 you must file what is known as a form 13D with the SEC.

20:59 13Ds are public for anybody to see because the SEC wants investors

21:02 to be aware of who the biggest shareholders are in a public company.

21:06 If someone with more than 5% of the company shares needed to sell quickly,

21:10 they would push down the stock's price significantly.

21:12 Investors should pay close attention to who a company's top shareholders are.

21:15 Because if it's the people that will be in a bad financial situation personally,

21:19 it will be bad for the stock price, even if the business fundamentals are good.

21:23 As a billionaire that values their privacy,

21:25 you would be best served to limiting any individual

21:28 investments to no more than 4.99% of the company's shares.

21:31 This has the additional benefit of making sure you are diversified as well.

21:34 Another way the SEC can snitch on you to Forbes magazine is through a form 3.

21:39 This must be filed if you own more than 10% of a public

21:42 company or if you are a company officer like a CEO, CFO, or chief legal counsel.

21:47 A form three also needs to be filed if you are a company director.

21:50 So, if you want to stay hidden, don't take too many of these positions.

21:54 You can have a billion-dollar portfolio,

21:55 and only the holdings you have in the companies

21:58 you are a director of will be public.

22:00 So, if you want to sit on a few boards,

22:02 you can, but it will put your name out there.

22:04 The other way that your wealth

22:05 becomes public knowledge is through lawsuit discovery.

22:08 If you get sued, anything that gets turned

22:10 up by the lawyers is entered into public record,

22:12 except for in the rare circumstances that evidence gets sealed.

22:15 The best way to avoid lawsuits is to avoid detention.

22:18 So, as a new billionaire that's trying to stay out of the public eye,

22:22 you are already doing everything right.

22:23 Billionaires will also take advantage of holding

22:25 companies and trusts set up in states

22:27 that have strong asset protection and privacy laws like Nevada and North Dakota.

22:31 If you live outside of America, you should consult my video on the Panama Papers

22:35 to find out how the global billionaires get it done.

22:37 Once you have the accounting set up,

22:39 the next step is to just avoid the Austinacious displays of wealth.

22:42 You can still live in a beautiful home.

22:44 Just make sure it's in a private area

22:46 and that it's not the most expensive in the area.

22:49 You can still drive a nice car, but don't post about it all over social media.

22:53 You can still fly private,

22:54 but don't put a logo or name down the side of your plane.

22:57 Your best defense is being too boring to write about

23:00 and for your actual wealth to be too difficult to verify.

23:02 If you ever get a call from any of these publications,

23:05 just laugh quietly and tell them that you wish you were worth a billion dollars

23:08 and that you would prefer that they didn't imply

23:11 that you were because that would be materially inaccurate.

23:13 If they have no way to definitely verify your wealth,

23:16 they won't risk adding you.

23:17 Now, the first step in this is obviously becoming a billionaire.

23:20 And I don't have the best answer for you there because,

23:23 and I hate to be the one to tell you this, you really don't want to be one.

23:27 I was watching the 1999 movie Office Space the other day,

23:30 a comedy set at the peak of the 1990s corporate culture.

23:34 It is one of my all-time favorite movies,

23:36 but the more I watch it, the more I notice something.

23:39 The core of this comedy is its cynical commentary

23:42 on working a boring job at a boring company.

23:45 But the more I watch it, the better the jobs of Peter and his co-workers look.

23:49 Because it's a comedy, the writers took a lot of creative

23:53 liberties to make Peter's working environment especially terrible.

23:56 But even still, 20 years later, it doesn't look that bad.

23:59 His office cubicle would be a luxury to most workers

24:02 today in an open plan office with no walls in sight.

24:05 He is allowed to go on extended lunches with his colleagues.

24:08 And even his over dramatized, shitty boss knows that working on a weekend

24:12 is a big ask rather than an expectation.

24:14 This made me think of the classic anecdote,

24:16 find a job you love and you will never work a day in your life.

24:20 Most of us go to work because we have to, not because we want to.

24:24 And that means a lot of us are stuck spending a good

24:26 portion of our waking hours doing things that aren't very enjoyable.

24:29 A cunning strategy that school career planners and LinkedIn gurus will

24:33 promote to get around this unfortunate predicament is to find a job

24:36 that you love doing so that you are excited to go to work

24:39 every day and you don't feel like you are working at all.

24:41 On the surface, this sounds sensible.

24:44 Now more than ever, with new technologies,

24:47 there are millions of different job titles out there

24:49 with new professions and career paths being made every single day.

24:52 My job as a now full-time YouTuber didn't exist 15 years ago.

24:57 But now, it's the career that children want most,

25:00 beating out traditionally popular options like astronaut.

25:02 But I want to do what I do best,

25:05 which is to reign in on this parade of finding fulfillment through your work.

25:08 Instead, I want to try and convince you

25:10 that what you want instead is a really boring job.

25:13 A job that doesn't make you or anybody else excited.

25:16 A job that nobody would dream of.

25:19 There are lots of very attractive jobs out there that for a number

25:22 of factors would appear to be preferable over other jobs.

25:25 There is being a doctor, lawyer, or highle corporate executive,

25:29 which is enticing because these roles are traditionally very well-

25:32 paid and are very well respected by society at large.

25:35 If you tell someone that you are a seuite executive at a Fortune 500 company,

25:40 you are instantly going to get more respect than

25:42 if you told them that you work in retail.

25:44 Is this how it should be?

25:45 Of course not.

25:46 But it is.

25:47 And people are willing to sacrifice a lot for that respect.

25:50 These roles come with the expectation of very long and irregular hours.

25:54 To say nothing of the years of grueling study or corporate

25:57 buttkissing needed to get the jobs in the first place.

25:59 Now, there's actually nothing wrong with these jobs.

26:02 Most people know what they are getting themselves

26:04 in for when they pursue these kinds of careers.

26:07 And the trade-offs are clear.

26:08 Most people do these jobs because of prestige, not because they love them.

26:12 So what about jobs that people are more passionate about?

26:15 The jobs that people would supposedly love to do.

26:18 I am talking about jobs in the fields that people get excited about like gaming,

26:23 fashion, travel, and sports.

26:25 Imagine getting paid to make video games

26:27 or attend fashion events around the world.

26:29 Sounds like a dream, right?

26:31 Well, no.

26:32 Bigname companies in aspirational industries are more

26:35 often than not terrible places to work.

26:38 The reason for this is simple.

26:40 They know that people want to work for them.

26:42 So, if you as a worker aren't willing to put in unpaid overtime,

26:46 deal with abusive management, and accept comparatively low pay,

26:49 then there are dozens or sometimes even hundreds

26:51 of equally qualified candidates who are willing to put

26:53 up with these issues because they get to work

26:55 what they thought would be their dream job.

26:58 Turnover in these companies is extremely high, especially when it is considered

27:02 that these businesses are attracting skilled careerdriven workers.

27:05 The type of worker that you might normally expect

27:08 to stick around for longer than a regular employee.

27:10 Now, of course, changing jobs regularly is actually a good idea.

27:14 Employees that change companies on average every 2 years are paid

27:18 significantly better than their peers who

27:19 attempt to work for internal promotions.

27:21 But you need to be quitting for the right reasons.

27:24 Quitting your current job to start a new,

27:26 more senior role at a company offering double

27:28 your current salary is a great career move.

27:30 Quitting your current job because you can't mentally handle another week

27:33 of a coding crunch is probably going to stall your career development.

27:37 Another reason it's best to avoid doing what you

27:40 love for work is that you won't love it forever.

27:42 Even the most exciting jobs you can imagine have

27:45 a lot of boring work that comes with them.

27:47 A video game tester will spend most of their time doing the same

27:50 mission over and over again to make sure there are no bugs.

27:53 And most people that work for NFL teams spend

27:55 their days in an office answering emails just like everybody else.

27:58 Even if a dream job does manage to live up to its hype initially,

28:02 there is one surefire way to end up hating something you originally loved.

28:05 And that is being forced to do it for 40 hours

28:08 a week with the threat of homelessness hanging over you if you don't.

28:11 Really, you are much better off working for money and then using that money

28:15 to enjoy things you love in your own time, in your own way.

28:18 Hopefully, I have convinced you that exciting jobs are not all that they seem.

28:22 But surely that doesn't mean that a boring job is the best alternative, right?

28:26 Well, they have a few big perks that a lot of people don't really consider.

28:30 A boring job at a boring company will on average be easier to get than the rare,

28:35 more prized jobs at exciting companies.

28:37 Having more options available to you, especially early in your career,

28:40 can be a big head start over your peers who wait it

28:43 out or go through extended internships to get a traditional dream job.

28:47 Boring jobs will also on average pay better.

28:51 Ford's median employee made $64,316 in 2018,

28:55 including bonuses, overtime, and stock awards.

28:58 GM's median employee made slightly more than $77,849.

29:02 Tesla, a far more exciting business, paid its median employee just $56,163.

29:08 This of course will not be true for every company.

29:12 But again, if there are more people that want to work at a company,

29:16 then generally that company can get away with paying their workers less.

29:19 This is even more apparent when we zoom out to look at entire industries.

29:23 On average, web developers will earn more than game developers.

29:26 A marketing manager for Exxon will earn

29:28 more than a marketing manager for the Patriots.

29:30 And an administrative assistant at a bank will

29:33 earn more than an administrative assistant at Vanity Fair.

29:36 If you are doing a job to make money,

29:38 you should maximize the amount of money you can get for doing that job.

29:41 You won't see the name on the side of your building from your desk anyway.

29:45 Now, if making money isn't the most

29:47 important thing for you when considering a career,

29:49 a boring job still has its perks.

29:51 Boring jobs are just genuinely more enjoyable.

29:53 A boring company is more likely to be filled with employees and managers who

29:58 realize that a job is something people do to put food on the table.

30:02 This type of corporate attitude tends

30:03 to result in more productive workplace relationships.

30:05 A manager at a generic, boring company that has been in their job

30:09 for decades and has no ambitions of moving

30:11 up the corporate ladder is not going to take

30:13 it personally when you ask for a raise, a promotion, or a reference letter.

30:17 Contrast that with a company where the management

30:19 has drunk the we are changing the world Kool-Aid,

30:21 and you are much more likely to face opposition when doing

30:24 these things that all employees should really be doing as regularly as possible.

30:28 Time and time again, we hear stories about high staff turnover and toxic

30:32 workplace culture in companies that sound exciting from the outside.

30:35 This is because when managers believe what they are doing is

30:38 more important than just working a job to make a living,

30:41 they naturally expect their colleagues to work

30:43 harder than should reasonably be expected to.

30:46 Toxic workplace cultures are almost inevitable in environments

30:48 where managers will think to themselves that straight up

30:51 verbal abuse is really just a heated disagreement amongst

30:54 peers who are too passionate about what they do.

30:57 These types of managers are also much more

30:59 likely to go unchecked in exciting fields because again,

31:02 staff turnover is not a big deal when

31:05 there is an endless line of new candidates.

31:07 Now, before anybody says it in the comments, yes, you're absolutely right.

31:11 There are great managers and there are

31:13 terrible managers in every kind of company,

31:15 but you are much more likely to run into one

31:17 in a job that you thought was going to be exciting.

31:21 And that's the biggest bonus of a boring job.

31:24 Better management on average.

31:25 That boring company manager from earlier that has been at their job for a decade

31:29 will have one big advantage over the manager

31:32 from an exciting company with high staff turnover.

31:34 They will have more experience at their job.

31:36 Working for a manager that has seen every possible problem

31:39 the job can throw at them is going to be

31:42 a much more pleasant experience than working for a manager

31:44 who is figuring it out as they go along.

31:47 A more experienced manager also has less to prove.

31:50 If they feel secure in their own position,

31:51 then they won't feel the need to work their employees

31:54 to the bone to avoid becoming one of those turnover statistics themselves.

31:57 Last month, I made a video about why management is always terrible.

32:01 And the reason that video was so important

32:03 is because people don't quit jobs, they quit managers.

32:06 Even the best, most exciting job in the world would quickly become

32:10 unbearable with a useless manager that takes

32:12 their shortcomings out on their workers.

32:14 Working a boring job gives you a better chance of finding a good manager

32:18 who will make your time at work not totally miserable and also help to progress

32:22 your career so that you can make more money and use that to enjoy

32:25 the hobbies that other people were dumb enough to try and build a career around.

32:28 I have a theory about why we all love movies like Office

32:32 Space or TV shows like Parks and Wreck and The Office so much.

32:36 These shows all highlight the realities

32:37 of a boring workplace to a comically ridiculous degree,

32:40 but at the same time, they are also very comfortable places to work.

32:44 The people stick around,

32:45 and even the bad guy bosses are not abusive towards their employees.

32:49 Maybe this is an indictment on how low the bar

32:51 is for what we consider comfortable working arrangements in America.

32:54 But I think it's something more.

32:56 We turn to these kinds of shows for comfort binge watching.

33:00 We wouldn't do that if we didn't secretly think that maybe working

33:04 alongside these people in these boring offices wouldn't be such a bad thing.

33:08 And you'd be right.

33:09 Because honestly, working for some visionary who's going

33:11 to change the world and bring you along

33:13 for the ride while paying you truckloads of cash

33:16 isn't all that it's cracked up to be.

33:18 After what we've seen over the past few months,

33:20 I think we finally need to admit once and for all that these people are idiots.

33:25 I screwed up.

33:26 Like I was CEO.

33:28 I had a responsibility.

33:30 That means that I was responsible ultimately.

33:32 We did not catch and fix these issues faster.

33:37 Are you sincerely trying to save the world?

33:41 Well, I'm trying to do good things.

33:43 Yeah.

33:44 Uh definitely not worried about getting sued,

33:46 but I'm worried about doing something for my own benefit.

33:50 Like I want more, but I know you can't talk about it.

33:54 I don't know which side.

33:55 I regret for every single person that had to go through that.

33:59 It was not my intention and not what they signed up for.

34:02 Do you swear to tell the truth, the whole truth, and nothing but the truth?

34:06 I do.

34:07 The FTX bankruptcy has shed light on a lot of bad

34:10 business and investing practices both within the company and outside of it.

34:14 One of the biggest issues that now seems funny in hindsight was

34:17 the undue attention placed on the business's founder and CEO Sam Bankman Freed,

34:21 or SBF as he is better known amongst recently bankrupt crypto bros.

34:25 In the leadup to its eventual collapse,

34:28 SPF arguably got more attention than the multi-billion dollar business he ran.

34:33 Unsophisticated financial commentators all the way up

34:35 to the world's largest venture capital firms were captivated

34:37 by the fact that he wore the same

34:40 sneakers as their grandparents and drove a Toyota Corolla.

34:43 As the FTX story unfolds,

34:45 allegations are now coming into light that this geeky persona was

34:48 little more than a carefully curated image and that Bankman Freed would

34:51 go as far as to intentionally act erratic with outside investors

34:55 because it furthered his image as some kind of misunderstood visionary genius.

34:59 But what was for some reason a big selling point for SPF

35:02 and his doomed companies should really be a cautionary tale for all of us.

35:06 Visionaries do not make good CEOs.

35:08 And to take it a step further, good CEOs should not be visionaries.

35:12 It's easy to throw stones at the rubble of a bankrupt company like FTX.

35:16 But celebrity CEOs have become a genuine problem

35:19 that might be costing us all a lot of money,

35:22 even if we don't directly invest into their companies.

35:24 When we were talking about visionary CEOs whose

35:26 personal image is inseparably linked with their companies,

35:29 it's hard to look much further than Elon Musk.

35:32 Musk is obviously a talented guy and his mere mention

35:35 of a company or a cryptocurrency can send valuations skyrocketing,

35:38 but that's not a power you want your CEO to have.

35:42 Investors in Musk's ventures have mostly done

35:45 well for themselves up until this point.

35:47 But that trend is starting to reverse.

35:49 Tesla's stock price is down over 50% from its peak,

35:52 which means a lot of investors in the company are

35:54 now holding on to positions where they have lost money.

35:56 His drawn out acquisition of Twitter has not been going well to say the least.

36:00 By almost every educated estimate,

36:02 he significantly overpaid for the platform because

36:04 the alternative was going to prison for stock manipulation.

36:08 Musk used his significant stake in Tesla as collateral for the loans

36:11 he needed to take out to close the $44 billion deal,

36:14 which has now put downward pressure on the electric car company that had

36:18 no direct involvement in Twitter outside of sharing the same visionary CEO.

36:21 People find it much easier to get behind the idea of a charismatic

36:25 person than they do to get behind the ideas of a big corporation.

36:28 And this can be great for building hype around a company,

36:31 but then for better or worse,

36:33 that company becomes linked to that person's decisions.

36:35 Individuals who have only been told how smart they are for decades

36:38 on end are prone to making more

36:41 erratic decisions than boring structured corporate management.

36:43 The problem for investors is that by the time a CEO

36:46 like Musk has crafted themselves a public image as a visionary,

36:49 the stocks they represent are already overvalued,

36:52 and any dumb decisions they make going forward

36:54 will represent outsized downside risk to that position.

36:57 If a business sells itself on having a visionary CEO,

37:00 any investor in that business is putting their money

37:03 behind a person as much as they are a business,

37:06 and people are much less predictable than well-regulated companies.

37:09 Musk's ongoing Twitter saga and some bad PR moves

37:12 in the past have hurt investors in his companies.

37:15 But he is a saint compared to a lot of other talented visionary CEOs.

37:19 Outright fraudulent companies like FTX, Theronos,

37:21 and companies really cutting close to the line like Wei Work would not have been

37:25 possible without charismatic figureheads distracting investors

37:27 from the fact that their business makes no sense.

37:30 Startup founders do need to occasionally be

37:33 their own hypemen to attract early investors and customers.

37:35 But there is a big difference between talking about what a business can

37:39 bring to a market and talking about a personal vision for changing the world.

37:43 Even if businesses do not start off with fraudulent intentions,

37:46 admitting failure early on is going to be much easier for a manager to do

37:50 if they have not align their personal

37:52 identity with the success of their business.

37:54 There is no way of knowing for sure,

37:56 but Elizabeth Holmes probably didn't set out

37:58 to start a vehicle for investment fraud.

38:00 She started out to build a medical technology company.

38:03 When her technology didn't work,

38:04 the right thing to do would have been to admit the failing and either

38:07 shut down the company or try to raise

38:09 more money to continue research and development.

38:11 But failures and setbacks are not what you

38:14 would expect of a visionary CEO like Holmes.

38:16 So she took a different route that destroyed billions

38:18 of dollars and landed her in prison for 11 years,

38:21 sentencing Elizabeth Holmes of Theronos to more than a decade in prison.

38:26 Remember, of course, Holmes was convicted um about some business

38:30 dealings related to this failed blood testing startup.

38:33 An exciting company with boring management is going to do much better long-term

38:37 than a boring company with managers that are celebrities in their own right.

38:41 The explosion in the number of visionary CEOs

38:43 in the past 20 years is no accident.

38:46 Today, CEOs of large companies will personally hire public

38:49 relations consultants to polish their personal image in the media.

38:52 Corporate ladder climbing CEOs try not to attract too much attention.

38:56 They mostly want to make sure that a cursory googling of their name

39:00 won't say anything that could affect

39:01 their chances of landing another 8 figure role.

39:03 But company founders will often take this a step further.

39:06 People like Holmes, Newman, Bankman, Freed,

39:08 and Musk worked carefully to curate an image of themselves

39:12 as a genius who was simply destined for success.

39:14 A fine-tuning of their public image goes

39:17 beyond framing them as misunderstood geniuses as well.

39:20 Bezos, Holmes, Zuckerberg, Newman, Buffett,

39:22 the Waltons, and most recently, of course,

39:25 SPF himself have all had articles written

39:27 about the cheap cars they use to drive.

39:29 PR consultants will grant access to media outlets that are willing

39:32 to report on these cars because it furthers their image as a frugal,

39:36 pragmatic business owner who is more interested in changing

39:39 the world than they are in surrounding themselves with luxury.

39:41 These same articles conveniently exclude details like

39:43 the fact that Bezos has two private jets,

39:46 a dozen homes around the country, and a very expensive toy rocket hobby,

39:50 and Zuckerberg owns an entire Hawaiian island.

39:52 Buffett, the king of the humble persona,

39:55 also owns a private jet and mostly gets driven around in a fleet of suburbans.

39:59 And Bakemanfreed may have very well driven a Corolla,

40:01 but he also used hundreds of millions

40:03 of dollars worth of investors money to buy up

40:05 luxury real estate all over the Bahamas

40:08 for the enjoyment of himself and his fellow FDX executives.

40:11 The problem this creates for businesses is

40:12 that it becomes very hard to pivot away

40:14 from the ideas that aren't working because it

40:16 can hurt the personal brand of the visionary CEO.

40:19 Whereas, if the company was being led by a generic corporate suit,

40:22 it is far less damaging for them to change course or simply be replaced.

40:26 The biggest problem today with so-called visionary

40:28 CEOs is that they normally hurt the everyday

40:31 functions of the business and can ironically

40:33 actually reduce how innovative the company is.

40:35 You talking to me?

40:36 A report by the Harvard Business Review titled Why Visionary Leadership

40:41 Fails looked at 136 managers across various levels of the corporate hierarchy.

40:45 They found that managers that could be

40:47 identified as visionaries often micromanaged their staff,

40:49 were prone to being overly fixated on irrelevant details,

40:52 and quashed the free flow of ideas amongst their peers and subordinates.

40:56 Visionary leadership was also found to create a culture of dispondency

41:00 in the workplace amongst workers who weren't

41:02 fully aligned with their visionary CEO's vision.

41:04 If workers can't contribute their own ideas towards a project,

41:07 they are unlikely to put in any more effort than the bare

41:10 minimum to qualify for a promotion or to simply avoid termination.

41:13 Visionary managers were also shown to create

41:15 this culture for all levels of management underneath them.

41:18 If a middle manager has a personal vision for how

41:21 something should be done and won't accept anything different,

41:23 then the managers beneath them won't be engaged and neither will the managers

41:27 beneath them and so on down to the bottom of the corporate ladder.

41:30 If that visionary leader happens to have the very top job,

41:33 then it can create this culture for the entire company.

41:36 A lot of companies run by visionary

41:38 leaders have been famously terrible places to work.

41:40 Tesla and SpaceX have very high stat

41:43 turnover rates compared to their industry average.

41:45 Emerging stories from inside FTX are not painting a good picture,

41:49 and even Apple during its era of Steve

41:51 Jobs was a famously unpleasant place to work.

41:54 My camera's not turning on.

41:57 What's that?

41:58 I did slide it and let go.

42:04 It's not turning on here.

42:08 Okay.

42:08 We'll let an expert see if you can turn it on.

42:11 A CEO's job is to decide on strategic directions for a company and put the right

42:16 process in place to make sure the company

42:18 stays on track to achieve those results.

42:20 It sounds like an easy job,

42:21 but it is hard and timeconuming and frankly quite boring.

42:24 It's much more fun to roleplay Tony Stark and get directly involved

42:29 in the development of whatever is going to make the next week's headlines.

42:33 Companies grow by attracting and utilizing talent.

42:35 Even if a visionary CEO is legitimately brilliant,

42:38 they are never going to be as creative or solve big

42:40 problems as effectively as a good team of qualified and motivated staff.

42:44 But if visionaries really do make terrible corporate leaders,

42:47 then why are there so many of them?

42:49 Well, the Harvard Business Review presents

42:51 a compelling answer to this question, too,

42:53 which is that most people that see themselves

42:55 and want themselves to be seen as visionaries

42:57 are more likely to start companies and have

42:59 the right personality to seek early stage capital.

43:02 Pure sample bias means if more people

43:04 in this group of people try to start a business,

43:07 more of them will be successful enough to become household names

43:09 even if they have a lower starting chance of becoming successful

43:12 as compared to a founder who just wants to build

43:15 a solid business in an area where they see a good opportunity.

43:18 Now the final mistake of visionary CEOs is that since

43:21 their personal reputation relies so heavily on the success of their company,

43:24 they find it impossible to scale back operations even

43:27 if it is in the best interest of their stakeholders.

43:30 And quite frankly, it might be inevitable

43:32 that we get some incredibly irresponsible people

43:34 at the top just based on how many there are in the broader population.

43:38 If everybody was financially responsible,

43:40 there would be nobody left to spend money on disposable consumer junk,

43:44 overpriced restaurant meals, lease pickups, and day trading courses.

43:46 But all of these purchases give other people a job.

43:49 If you are being financially responsible,

43:51 are you denying an opportunity to somebody else to be financially responsible?

43:55 And does that mean that you should be grateful

43:57 to all of the people living paycheck to paycheck?

44:00 The average American is not in a comfortable financial position at the moment.

44:04 And it's the same story everywhere around the world.

44:06 Money that people saved in the pandemic has

44:08 evaporated and credit card debt has taken its place.

44:11 But how much of this is reckless and how much of this is

44:14 what people who do not make enough money do to keep up?

44:17 People are being financially irresponsible,

44:19 but they are also being financially[ __] and those are not mutually exclusive.

44:24 If you think of someone who is financially

44:26 responsible or you want to be financially responsible yourself,

44:29 there are a few things you are going to need.

44:32 An emergency fund and retirement savings are a must.

44:35 Most financial advice also recommends that you have a car paid for in cash.

44:39 Oh, and by the time you're 30,

44:40 you should have a house that you put a 20% down payment on.

44:44 The things that make people financially responsible are really expensive,

44:47 and a lot of people simply can't afford them.

44:50 It's easy to think to yourself that everybody

44:52 in financial distress is doing something dumb.

44:53 But the reality is that no matter how thrifty a lot of Americans get,

44:57 they will struggle to even save up an emergency fund,

45:00 let alone everything else that qualifies someone as financially responsible.

45:03 People saved a lot of money during the pandemic because of government stimulus,

45:08 pause student loans, and because spending money was hard.

45:12 People were saving for the things that would make them financially secure.

45:15 In a 2021 survey conducted on 1,037 Americans by Go Bank Rates,

45:19 a financial market data firm,

45:21 44% said that they were saving for an emergency fund,

45:24 19% said that they were saving for retirement,

45:27 and 13% said that they were saving for a home,

45:30 which was roughly half of the respondents that didn't already own a home.

45:33 In 2023, according to a follow-up report by Bloomberg and data from the Fed,

45:37 all of the money that people were

45:40 wishfully putting towards being financially responsible is gone.

45:43 Uh, what?

45:44 It's gone.

45:44 and it's all gone.

45:46 According to the report,

45:47 only the top 20% of Americans still have any excess savings.

45:50 With disheartening figures like this, people are more likely to give up on slow

45:55 and steady financial responsibility and look

45:57 for opportunities that could change their life overnight,

46:00 like lotteryies, get-rich quick schemes, and risky investments.

46:03 It has a low chance of success.

46:05 But many Americans now think that they have no chance

46:08 of success by doing it the slow and steady way.

46:11 So, they make these financial mistakes.

46:13 People tried financial responsibility during the best years ever

46:16 for saving money and it evaporated just months later.

46:19 Being poor is also really expensive.

46:21 Poorer areas don't attract big stores.

46:23 So people who live there either have to drive

46:26 up for an hour round trip to get food

46:28 or use convenience stores for groceries which could charge

46:31 a significant markup over big box retailers like Walmart,

46:33 Trader Joe's, or Costco.

46:35 Food deserts are just the first way that poor people stay poor.

46:38 But what about the people who could do better?

46:41 There are people who just don't have enough income left over

46:44 after essentials to buy the increasingly

46:46 expensive essentials to be financially responsible.

46:48 But there are also a lot of people who do have

46:51 the means to be financially responsible and just make dumb decisions.

46:54 Otherwise, Dave Ramsey would have nobody to yell at on his show.

46:57 Our choice.

46:58 Your choice is don't be stupid.

46:59 That's your choice.

47:00 Well, there are actually three reasons why

47:02 it's in your best interest for these people

47:04 to get their[ __] together and one big reason why you might not want them to.

47:09 The reason that you don't want everybody else to be financially responsible

47:12 is that it would make investing for your own financial goals more difficult.

47:15 More money entering the stock market would push up prices,

47:18 which is great if you already own all the stocks you ever want to purchase,

47:21 but it's bad if you are planning on consistently

47:23 investing over your career like financially responsible people do.

47:26 A more expensive stock price does not affect

47:29 the business fundamentals or performance of a company.

47:32 So, as a financially responsible investor,

47:34 you should actually prefer that prices stay low.

47:37 Warren Buffett is a legendary investor that people follow because

47:40 of his long track record of finding undervalued companies to invest in.

47:43 When Buffett buys a stock through Berkshire Hathaway,

47:45 he needs to disclose his position to investors.

47:48 When Buffett announces a new purchase, the market rallies behind him instantly,

47:52 putting him in a profitable position on his purchase.

47:54 That sounds like a perk of being one

47:56 of the most legendary investors of all time.

47:58 But Buffett has said in shareholder meetings that he

48:00 hates when this happens because it makes a good

48:02 stock more expensive to buy into if he wants

48:04 to purchase more of a company in the future.

48:07 Obviously, you are not Warren Buffett,

48:09 but if everybody became financially responsible,

48:10 you would share the same problem.

48:12 If more people were buying the same shares that you

48:15 wanted to buy to fund a long-term goal like retirement,

48:17 then you will end up paying more for the same portfolio.

48:19 The only time that you actually want a stock's price

48:22 to be high is when you want to sell it.

48:24 Currently, if everybody became savers and investors,

48:26 the people that would stand to gain the most are wealthy people who already have

48:30 large holdings of assets to sell to people

48:32 entering the market for the first time.

48:34 The same thing would happen for other

48:36 financially responsible purchases like a house.

48:37 If people gave up vacations, fancy dinners,

48:40 and expensive cars to save diligently for a house,

48:42 they would become even more expensive, making it harder for you to buy one,

48:46 thus making it harder for you to be financially responsible.

48:49 Additionally, investments like stocks and real estate only have

48:52 value because they make something to sell to people.

48:54 So, if everybody decides that their 2-year-old iPhone

48:56 is good enough and they don't need to upgrade,

48:59 that would hurt the earnings of Apple as a company and you as a shareholder.

49:02 So, you might be thinking that maybe it's a good

49:05 thing that so many people make so many dumb financial decisions.

49:07 It's easier to get ahead if everybody else is tripping over themselves.

49:11 But then, there are three reasons why despite the extra competition,

49:14 you should still want people to be more financially responsible.

49:16 The first reason is that people being better

49:19 with their money would be better for everyone.

49:21 People are afraid of a future where they will own nothing and be happy about it.

49:26 The growth of subscription services, where people pay monthly for entertainment,

49:30 applications, cars, food, housing, and everything in between,

49:32 has grown in popularity in part because people no longer have

49:35 the means or discipline to save up to make a one-time upfront purchase.

49:39 Companies have capitalized on this to build a recurring

49:41 revenue model where people pay a monthly fee

49:44 for everything that works out to be a much

49:46 worse deal on a time value adjusted basis.

49:48 According to the subscription economy index report,

49:51 the market for subscription services has grown by 435% over the last decade.

49:55 It is expected to grow even more by reaching

49:58 a market size of 1.5 trillion by 2025.

50:01 According to the market research and consulting firm Forester,

50:05 the number one reason that subscription services have become

50:08 so popular with consumers is exactly what you would expect.

50:11 People don't have enough money to pay for things upfront anymore.

50:14 Now, subscription services are not bad by themselves.

50:16 Sometimes it's a great way to try

50:18 a product without committing to a single upfront purchase.

50:21 And it has other advantages like forcing companies to push through

50:24 updates on their services so they don't lose their recurring revenue.

50:27 What is bad is when there is no other option that is not a subscription.

50:31 There are now some things that are

50:33 hard to buy without paying a monthly subscription.

50:35 This very video was made using the Adobe suite,

50:38 which is no longer available for upfront purchase

50:41 and can only be used on a subscription.

50:43 Even if you want to buy something like a car,

50:45 dealerships are going to make more money by putting you on a lease

50:48 than they would by selling you a car in all cash.

50:50 So, they have structured their businesses to push those deals.

50:53 __] like this is only possible because there

50:55 are enough people that buy these services that businesses

50:57 have been able to transition to them

50:59 and in many cases completely discontinue their upfront sales offerings.

51:02 The second reason you should want everybody to be

51:05 as financially responsible as possible is for exactly the opposite reason.

51:09 An even scarier future where you own everything and are miserable.

51:13 Poor financial planning and overconumption go hand in hand.

51:16 According to data from the EPA, the average American uses more than

51:20 their body weight in consumable products every day.

51:23 Reckless spending has financed big cars,

51:25 big houses, big meals, and big convenience.

51:27 That all comes at a financial cost, but is also an environmental cost.

51:32 Even if you don't personally care about the environmental impact,

51:35 this benefit is still important to you.

51:37 If people buy less of everything and are

51:39 more conscious of where they spend their money,

51:41 then there will be more stuff left over for you.

51:44 Less consumption will also reduce how

51:46 much we collectively pay in environmental taxes,

51:48 which will make it even easier to be financially responsible.

51:51 And that's the third reason why we can afford for everybody

51:54 to be financially responsible and would be better off if they were.

51:57 Some companies need people to spend their money recklessly to stay in business.

52:01 Fast fashion, consumer lenders, automakers, debt collectors, hotels, airlines,

52:05 and restaurants all do well from people yoloing their paycheck

52:08 away or signing up for irresponsible amounts of debt.

52:11 But other companies like groceries, healthcare,

52:13 and repairs won't be as affected.

52:15 Some companies would actually do better as people have more

52:18 money to make investment purchases into things that are expensive upfront,

52:21 but pay themselves off overtime, like new homes,

52:24 solar panels, and highquality, long-lasting clothes.

52:27 If you save money, you will eventually spend it on something.

52:30 And long-term purchases are generally better for everyone than easy consumables.

52:33 More responsible spending done by everybody

52:35 with the intention of being financially secure will

52:38 also mean services like social security will

52:40 have more to give to people in need.

52:42 The bonus fourth reason is that if people

52:44 are spending less of their money on useless junk,

52:46 then we won't need to work as hard to make that useless junk.

52:49 Today, the average American is not working as many

52:52 hours as they used to 100 years ago.