#222 Brian Feroldi - 10 Timeless Principles on Business, Investing & Life

Are you living by the right principles to actually progress in business, investing, and life

In this episode, we dive deep with Brian Feroldi, an investor and entrepreneur, who shares his journey of investing and building business at the highest level.

We explore Brian’s philosophy on following natural curiosity, the power of consistency, and the importance of willpower in achieving long-term goals. Brains reveals the secrets behind compound interest, the dangers and management of debt, and the significance of financial education.

Brian also delves into the highest returns on investment, with a specific focus on health, relationships, and self-education over traditional financial assets.

We also tackle the eternal investing battle: emotional vs. logical decision-making.

Make sure you watch till the end as Brian reveals his strategies for achieving financial freedom without sacrificing health or happiness.

Smash that like button and share your thoughts in the comments below!


Brian's Socials:
YouTube - https://www.youtube.com/@BrianFeroldiYT

My Socials:
Instagram - Darrenlee.ks
LinkedIn - Darren Lee
Twitter - Darren_ks

(00:00) Preview and Introduction to Brian Feroldi
(00:49) Investor vs. Entrepreneur: Brian's Journey
(02:34) The Laws of Consistency 
(05:00) Social Media and Instant Gratification
(07:05) Power of Compound Interest
(09:50) Brain Feroldi’s Views on Debt 
(13:04) Credit Card and Student Debt Issues
(16:02) Brian’s Financial Philosophy: Earn, Invest, Spend
(18:41) Highest Return on Investment: Health, Relationships, Self-Education
(23:49) Building Good Habits and Removing Bad Ones
(25:34) Finding Your 'Enough'
(29:06) Achieving Financial Goals Through Investing
(30:09) Importance of Long-Term Investing
(33:13) Brian Feroldi’s Thoughts on Cryptocurrency
(36:05) Value of Recurring Revenue in Businesses
(41:03) Entrepreneurial Influence and Authority
(43:00) Investing and Learning from Failure
(45:44) Timing the Market vs. Time in the Market
(51:45) Using Investing for Life Freedom
(54:34) Optimising for the Best Life Possible
(56:13) The Cost of High Financial Success
(59:45) Emotional vs. Logical Investing
(01:02:59) Lessons from Market History

Transcript

Darren Lee: 0:00

This guy right here. He teaches investors how to analyze proper businesses. He's written over 3,000 articles on investing and how to build the right business that scales, makes money and creates happy customers. I wanted to find out the 10 most timeless principles that you can take from investing and apply to your business and life. Whether you are just starting out or scaling your business, these timeless lessons will help you play the long game, play the infinite game, and also build better businesses.

Brian Feroldi: 0:31

You only need to make one or two million to have five million, and the way that you make up for that gap is by investing. If there's friction, it's very easy to overlook it or put it off. I am of the mindset that it's okay to take on certain types of debt when you are younger in life. The debts that I am okay with are personally.

Darren Lee: 0:49

Before we start this week's episode, I have one little favor to ask you. Can you please leave a five-star rating below so we can help more people every single week. Thank you, all right, brent, let's kick off. So at this point, would you consider yourself more to be an investor or an entrepreneur, with everything that you do online?

Brian Feroldi: 1:10

uh. So I, when it comes to allocating my time, uh, I am definitely more of an entrepreneur and content uh creator, but in my bones I I am an investor and always will be did you ever find find yourself like kind of caught between like a hard rock and hard place, not really knowing what you want to focus on?

Darren Lee: 1:31

right, Because that's often a challenge when people are developing their business or their careers? Is that? It's almost like shiny penny syndrome, right? So you were like a strong investor and then you went into the entrepreneurship world, went into writing. Was that ever a problem for you?

Brian Feroldi: 1:44

Absolutely. I mean, it's a constant. It's a constant battle, but what I've always tried to do is follow my immediate curiosity, like there's always something in my mind that is joyful for me to do, and whatever the most pleasurable or the thing that I'm after the most, that's what I try and focus my time and attention on. So for the last 20 years, the most joyful thing that I could do would be to learn about investing and research investing, and that's just where my natural attention was drawn to. Over the last three years or four years, some of that natural interest has gone to learning entrepreneurship, learning the content creation game. So it's really just been for me following my natural curiosity and whatever I am naturally drawn to do. That's where I try and focus my attention.

Darren Lee: 2:34

And there's so many similarities across all those right Just in terms of the principles, the lessons, and we're going to get into that today. So I think what's going to be really valuable and that's why I love speaking to people like yourself, who has a very long-term view, because when you think in decades, I've seen the impact right. You've been doing this for so many years. Now you're at this level, so what I want to do is pull out some of your best moments that I've seen right, and one point that really hit up to me was that investing once won't make you fit. Exercising continuously will. Reading once won't make you smart, reading continuously will. Consistency of actions is the key to getting everything you want in life. Why do you think people maybe my age don't really get that and they don't really resonate with that and they don't really understand the laws of a consistency? I would push back and say that people do understand the laws of a consistency.

Brian Feroldi: 3:24

I would push back and say that people do understand the laws of consistency. It's not that they don't understand what they need to do. It's that they lack the willpower or the accountability to actually do it. Go to anybody in the world that's overweight and say how do you get thin? Every single one of them will answer overweight. And say how do you get thin? Every single one of them will answer eat less calories and exercise. It's not that they don't know what to do. It's that they lack the follow through on actually doing it. And there's a bazillion reasons why people lack the follow through on doing so.

Brian Feroldi: 4:00

Doing something once is relatively easy. Doing something simple consistently for a long period of time is incredibly hard. You should know You're a podcaster, so you probably know the statistics what percentage of people that start podcasts are still podcasting one year later? It's like 1%. It is literally like an incredible attrition rate because people are putting all this effort in and they're not getting the immediate reward of seeing the results of their effort. There's a gap between effort and seeing the rewards of those things and that effort. To that. That gap is really hard for people to uh, to continue to to push through. It's just natural human tendency that if you're not experiencing immediate reward for an action, biology tells you stop doing that action. So it's really developing the accountability and developing a long-term mindset to get you through that gap to get the actual results that you want.

Darren Lee: 5:00

That's interesting, because people use social media as a scapegoat, saying, oh, like, because social media I don't have like a long-term view anymore, or everything's instant gratification.

Darren Lee: 5:10

You made a good point saying that, like, biologically, our bodies are almost engineered to stop when we don't get the reward. But we need to have that foresight because, like, I imagine that when before, like the days of social media, people still gave up on stuff, right, uh, it's not, it stopped giving up on stuff, whereas now, like that's, the immediate barrier is that, oh, I'm gonna fall, I'm gonna give up on this. But podcasting is a perfect example, like when I started at 210 episodes ago, um, I knew this in my head, I knew that everybody gave up and I knew that it was like burning into my desires and that's not what I wanted to do, right, and it's almost like, almost like you need to have that external reason and then eventually even internal reason. Then what you keep on going, right as in it flips the script after a while. But you would have seen that as well with investing, right and same with your business.

Brian Feroldi: 5:56

Yeah, absolutely. Once I understood the power of the stock market, that's my chosen asset class. I was born to be a stock market investor. If you look back at a long-term chart of the S&P 500, it is unbelievably obvious and clear what the right thing to do was. The right thing to do was invest your money in the stock market 10 years ago, 20 years ago, 30 years ago, 40 years ago, 50 years ago, and if you did that consistently, you would be wealthy today. Period, full stop. End of story. It's incredibly easy, or it's simple, to understand what you need to do. The hard part is actually executing and following through on doing it. That's why investors today are so blessed. We are so lucky today because you can actually take advantage of automated free tools. Set them up once, never think about it again, and your wealth will essentially be built automatically for you in the background. It's like being able to set up exercise for yourself, never having to think about exercising again, and your body just naturally gets more fit over time.

Darren Lee: 7:05

That's amazing, and we can actually do that with our money 100%, and I was recently going to review like the flywheel effect, if you're familiar with it in business the fact that every time you go through a process, you get better. So you get more data, you get more feedback, you get more engagement or whatnot to tell you to do something better. And investing as well is a great example. Just like business, right, when you make your first couple of investments, you analyze, you take a step back and then you do it again and again and again. So, as you're doing it in a recurring basis, you're almost getting better, consistently right, but most people will jump in and out. They won't actually take that as the source, right, they're not really looking for longer term views.

Darren Lee: 7:43

You mentioned around compound interest right, and it works both ways. So people only think about compound interest from the perspective of it's getting better, but you look at like assets and debts and I'm actually going to have a lot of these images on the screen as well and you said it works both ways. Talk me through that philosophy.

Brian Feroldi: 7:59

Yeah, compound interest. Einstein called it the most powerful force in the world or the eighth wonder of the world, one of those two, if I just butchered the quote. But once you understand how compound interest works which is really hard for our human minds to do because we are born to think linearly right One, two, three, four, five. But the stock market and compounding works exponentially One, two, four, eight, 16, 32. And when you get out into the out years, it's incomprehensible to realize just how powerful compound interest can be. Here's a great stat that I love hearing about Warren Buffett.

Brian Feroldi: 8:39

Warren Buffett's one of the richest people in the world. He's worth something like I don't know, let's just call it $100 billion. It's somewhere in that ballpark. 99% of Warren Buffett's net worth came after he turned 55. 99% of Warren Buffett's net worth was built after he turned 55. That is because of the power of compound interest. It's really hard for our human brains to wrap our head around. So compound interest can be an incredible, incredible ally. If, again, you set up dollar cost averaging into just plain vanilla index funds, that's money on easy mode, right. But compound interest works in both directions. Compound interest works in both directions If you have debts to your name credit card debt or student loan debts that compound interest can work against you. And if you're paying, if you're on the flip side of compound interest, especially with credit card debt, your financial life will just become harder and harder and harder over time. So compound interest is an incredibly powerful force. Make it your ally, not your foe.

Darren Lee: 9:50

Yeah, because you speak about removing non-mortgage debts or only having that mortgage debt effectively. What's your view on debt in general?

Brian Feroldi: 9:58

Yep. So there's lots of different philosophies when it comes to debt. Some people ascribe to the thought process that some debts are good, some debts are bad. Other people, like myself, just say all debts are bad. I mean, think about what a debt is. What is a debt?

Brian Feroldi: 10:17

A debt is borrowing money so that you can consume something today. So that you can consume something today and you plan to pay it off in the future with interest. Now how are you going to pay back that loan? 99% of the time, the answer is through your future income. Your future income. And how do most people get income? By working, by putting in physical labor or mental labor or working at a job.

Brian Feroldi: 10:46

So, by the definition, taking on debt is selling income in the future that they haven't generated yet, aka obligating them future self to work, and selling their income that they're going to make in the future at a discount that they're paying interest on today. Not about you, but I don't want to obligate. I don't want to do things that obligate my future self to work, because I'm going to have to be the one that takes on that work. So my personal philosophy is that all debt should be avoided and all debt should be eliminated is that all debt should be avoided and all debt should be eliminated. Period, full stop, end of story.

Brian Feroldi: 11:27

Now I'm also a realist. I do understand that people want to buy cars and they want to buy houses and there are expenses that they need to take on that they might not have the immediate capital for, especially when they're younger. So I am of the mindset that it's okay to take on certain types of debt when you are younger. So I am of the mindset that it's okay to take on certain types of debt when you are younger in life. The debts that I'm okay with are, personally, debt for your first vehicle so long as it's a car that you plan on driving for a long period of time, that's nothing fancy and a debt for your first house.

Brian Feroldi: 12:01

So mortgage and a first vehicle, as long as they're within reason. Then, once you have those, it should be a priority of yours to eventually pay them off. Pay them off completely, because nothing feels as good financially as having zero debt to your name, zero, right. So personally, I have zero debt to my name. I paid off my house seven years ago and, while financially on paper that was a stupid thing to do, right the interest rate I had off my house seven years ago and while financially on paper that was a stupid thing to do, right, the interest rate I had in my house was very low. It was stupid mathematically to pay off my house Emotionally. I would do it again in a heartbeat because I love not having any debt to my name.

Darren Lee: 12:40

I'm in complete agreement. I'm the exact same as you I could do. I could basically wait until I could pay for my house in cash and then actually just pay for it in cash rather than taking on the burden. Even if it was like $800 a month, right, I could pay for it, it's fine. But even just the concept of it and I never really leaned into that fashion I actually had university debt-free university, but in Ireland it's's very minimal.

Darren Lee: 13:04

But the second I had actually made my first business was like 21 22. We cleared off my 90 percent of it as a result, um, and I never looked back since. Uh, you made a very good point about you know the debt, the credit card debt. So it's really common like a lot of people listen to entrepreneurs, right it's really common that when you get a business in america set up, you're given a credit card or you're able to get a credit card and whatnot, and a lot of young guys are hyped up on credit, um, under the assumption of we'll make the money, and then they make illogical decisions to be able to make the money. What's your views on credit card debt, even even student debt?

Brian Feroldi: 13:41

yeah, it's even worse than that. In the, the United States, when most freshmen enter college, as part of their first day and their signup process, there's often a group of credit card companies right there on site that are giving away posters and t-shirts and all kinds of attractive things in the hope that you sign up for a credit card and they will tell you we will issue you credit today. It is crazy. So not only are people that join a university for the first time taking on many cases student loan debt, they're often immediately given access to credit cards and, depending on their household or their lifestyle, they may have some financial education to know that they should be careful with those things, or they might have none.

Brian Feroldi: 14:33

And in college, it's very hard for people to earn any sort of income because so much of their time is spent on studying and in classes, so people are set up from the beginning to fall into the debt trap. It's very, very common for people to start out life their adult financial life in the hole, because it's incredibly easy to do so. So the thing there, like anything, is to understand what's happening and educate yourself about what you need to do. This is when you shouldn't be letting your 18-year-old self, make decisions that will impact your 30, 40, and 50-year-old self, especially when it comes to finances. But I completely understand why so many people get into credit card debt and student loan debt, because it's very easy to do and it's very attractive to do so Well, if you don't have an option, you're pretty much handed that as your only option.

Darren Lee: 15:32

There's obviously alternatives, right, but I'm saying it's set up in such a way that that is your only option and therefore you go down this path of basically debt forever. Right, and it's also ingrained in the philosophy. So you write about normal people earn, spend and invest, and rich people earn, invest and spend. Why do you think we're not aware of that, even when we start earning money or even build businesses? Why is that philosophy not really shared?

Brian Feroldi: 16:02

I wasn't aware of it when I first started earning an income. It wasn't until I read a book after graduating from college that that thing that you just said was even made aware of that very fact. This gets back to the old adage pay yourself first. Right, it was a bedrock financial principle. The idea is you earn income from working. Your very first expense should be setting aside money for your future self. So you should earn money. You should immediately take a portion of the money that you earn and invest it. Invest it in yourself or invest it in building your financial foundation, and only spend what's left over after that. That is completely unnatural and we are not taught to do that in school, and only people that have really good parents or financial role models really come to understand that process. It's very natural for people to earn money and then immediately go out and spend that money. That's what I did in high school. That's what I did in college.

Brian Feroldi: 17:10

I thought that money was just the accumulation of previous work that you had done, and the goal of that money was to allow you, to your future self, to buy stuff. The concept of saving I understood, but the concept of investing completely foreign to me. I didn't understand what investing was until after I graduated college, and I say that as somebody who grew up in the upper middle class lifestyle with financially frugal parents and that studied business in college knowledge. So if anybody should have been taught what money and investing was, it should have been me. But but I wasn't aware of any of these concepts. So so I completely understand why it's why so many people don't understand this early in their career. They're just not taught it. It's not a part of our culture.

Darren Lee: 17:57

But even as you, not even in the beginning of your career, as you go on, even in your thirties and forties, it's almost like there's excuses. Right, people are, they have their kids, they have marriage, they have like, weddings, all this stuff. So there's the excuses why you shouldn't be investing, and even not just investing in like, um, like the market for your own equity. But you make a good point about, uh, the return on investments. What is the highest return on investments? And you mentioned that health and mental health and fitness has the highest return on investments, followed by relationships, followed by self-education, followed by stocks and, lastly, by bonds. What made you think about that actual distribution? Why is health the highest return on investment?

Brian Feroldi: 18:41

So many of the tweets that you're referencing are more reminders to myself or things that I want to make sure that my future self is aware of. But it is so easy when you are young and you are healthy to just completely ignore everything about your health because you naturally have it, even though you are acting in a way that goes against your health. I mean, I binge drink all the time in college, my college, the food that I ate in college was absolute garbage, but I could still wake up the next day and feel great and not be overweight because my metabolism was so high and my body was in such natural shape just from being 20 years old. Over time it becomes increasingly hard, because now alcohol really makes me have a terrible next day. If I drink too much and if I eat a little bit of extra food, that weight actually sticks around.

Brian Feroldi: 19:36

And it's so easy to ignore your health when health is automatic or comes to you, and it's really only when you see somebody or interact with somebody that loses their health that you realize just how important health is to having a good life. All the money in the world, all the money in the world, is meaningless meaningless if you don't have the health to actually go out and enjoy it. Don't have the health to actually go out and enjoy it. So health is the absolute foundation to living a good lifestyle, which is why that tweet that you're announcing is a reference point. Never forget the foundation. The foundation is health, and things build on top from there. Do you want to launch a?

Darren Lee: 20:16

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Darren Lee: 20:45

I'm laughing because I interviewed sahil blumont in december and whenever I would like raise one of his points, which I like to do, is I like to kind of go into very detailed on these points. He said something very similar was the fact that they're just reminders to myself that often I'm writing these things about, like health, wealth and relationships. He's like I'm not perfect and it's nearly something that I want to aspire to versus what I'm actually living. Um, but the health one is very interesting.

Darren Lee: 21:10

That was something that I was probably more conscientious about than maybe I even should have been when I was starting my entrepreneurship journey, because I thought that, well, I still think that the highest leverage you have is obviously your brain and being able to basically channel that produce stuff right to either build businesses, to build a team and so on. So if I didn't have that in place, which is like physical and mental, then it was all going to fall down. And I've actually seen that over the years as I've gotten actually healthier throughout the years, put more emphasis on health, um, my diet and training. I've actually become like a better business owner, a better team leader, a better entrepreneur, and you would think it's the opposite, like if I spend most of my days like walking or training not most of my days, but several hours it actually has a bigger impact than me sitting on my laptop going around in circles 24, seven.

Brian Feroldi: 21:58

Yep, totally. This is why my hack with this. So I never exercised as a kid. I mean, I would play sports as a kid but I would never take action to go out and intentionally exercise as a kid. So what I've learned is little tricks that build into your natural life exercise. Because for me personally, taking action to do exercise, if there's friction it's very easy to overlook it or put it off. But like I personally do things like I have a stand up desk. I've had this stand up desk for I don't even know like eight years now. So I am on my feet all day, naturally, and it's amazing how when I, when I did that initially, like the first month of having a stand up desk was painful because by the end of the day you're like oh, like sitting down and your legs really hurt. Now I don't even think about it just because it's part of my natural day.

Brian Feroldi: 22:50

Something else that I personally do I go on a walk pretty much every single day of the week. So I absolutely love walking and I try and listen to podcasts when I'm on my walk. I try to have a walk with friends that I have in my neighborhood. So walking for me is a form of exercise that I look forward to, like. The actual walk itself is a joyful part of my day, and the final thing that I do is in my bedroom. I put a pull-up bar in my closets. When I go to, like get changed for the day, there's a pull-up bar and I make myself do pull-ups before I can walk in and out of my closet. So, because I have removed as much friction as possible, I actually do those exercises. So it's amazing how building it's just like James Clear's excellent book Atomic Habits. That's right. Make it obvious, make it easy and make it. That is really how you make it into a habit.

Darren Lee: 23:49

Yeah, and it's also the opposite is true, too right To get rid of all the bad habits, like remove it from your life effectively. So I'm based in Asia and basically I have a lot of my food like prepared and cooked and not. It's quite cheap to do, right, but as a result, there's physically nothing in my house apart from the food that arrives every day. So I only am limited by what I've ordered for the week effectively, and it means that the variance, basically of what can go wrong is pretty minimal. Right, it's pretty damn minimal as a result. So it's like taking the best foot forward and I, you know, depending on where you are in the world, you can get these things done.

Darren Lee: 24:23

Right, and it's just those small changes that I remember. Sahil again said it was like when you get to 30, the last 10 years of your life show up on your face, and I'm 28 now at the moment. Right, and it's just, it's interesting to observe. Right, because we can both work really hard but have a completely different outcome business, wealth, relationships and, yeah, yeah, just being more conscientious with this right, because there's more metrics to chase than your return on your P&O.

Brian Feroldi: 24:50

So what you've done is you've set up a system that makes it so. You don't have to have accountability, you don't have to have willpower to do something, right, right, you have set this up system that your future self doesn't have to think, doesn't have to make decisions. Their decisions or their options are very, very limited.

Darren Lee: 25:06

That is absolutely a brilliant way to live Took a bit of time to get there. I will say that Something that I've definitely struggled with in my 20s is, like you know, pushing, pushing really hard, pushing almost too hard and like the goalposts moving, like reaching targets and constantly moving, and one of your graphics on this is saying like I need more continuously pushing and then having enough and finding you're enough. When was it for you that you were able to kind of sit with that thought and realize that you've had enough?

Brian Feroldi: 25:34

Yeah, I'll let you know when I finally master that Right. But, uh, but the, the it's. It's a really critical concept to, to, to, just to just uh, to, to think about the. The concept of enough to me was crystallized when Kurt Vonnegut was on the. There's a story about. Kurt Vonnegut is a famous American author. He was on a boat, a yacht of some incredibly rich Wall Street tycoon and he was invited to a party and they were saying they were saying you know this, this, this Wall Street tycoon, he made more money in a single day than you have done in your career, selling all these bestselling books. And Kurt Vonnegut says well, yes, but I have something that he will never have. I have enough. Right, and that is just such a powerful, powerful story and way of thinking about it.

Brian Feroldi: 26:18

Right, once you have a certain number of dollars in your bank account let's just say $5 million what is an extra dollar going to do to impact your lifestyle? How will it change the way that you live? Will it change the house that you live in? Will it change the car that you drive? Will it change the relationship that you have with your kids? Will it change the vacations that you can make? Will it change the foods that you can eat? Will it change the education that you can get? To me, the answer is Like once you reach a certain amount of money, extra money has no impact on your life, no utility to your life. Warren Buffett has said this many times Warren Buffett is again worth like $100 billion. Name something that Warren Buffett can do when he has $110 billion that he can't do when he has $100 billion. I can't think of a single thing, right, like including buying islands, buying sports teams and all that kind of stuff.

Darren Lee: 27:19

And going to Marist Warren.

Brian Feroldi: 27:20

Buffett has said this multiple times Like the wealth that he is building, it gives him personally no utility. He could live exactly the life that he has now if his net worth was, let's just say, $5 million versus the $100 billion that it's worth to live exactly the life that he has now if his net worth was, let's just say, $5 million versus the $100 billion that it's worth. So all that extra wealth that he has generated isn't going to be used by him, it's just going to go to charitable endeavors. So it's really important for all of us to determine, to name in our life what is your level of enough. Write it down. Write down on paper. What do you want? And then, if you had this thing, that is your enough.

Brian Feroldi: 27:59

For me, it's debt-free house. It's paid off vehicles. It's enough cash in the bank to prevent my life from changing if we had some kind of financial catastrophe. It's being able to send my kids, to pay for my kids' education and get them off on the right foot and avoid it and affording the luxuries that we think are worth it. So when you define it like that, for me financial freedom is about $3 to $5 million. $3 to $5 million, which is a lot of money, of course, but that means that once I achieve that, the concept of getting to $10 million or $20 million or $50 million would have no extra utility. It would impact my life in no way.

Darren Lee: 28:43

That's so powerful. That's super interesting too, because that number I actually completely agree is like in that $3 to $5 million range, you have everything that you need to not go crazy, right? But at the same time, how do you get to that number? Because, let's say, accounting for taxes and the payments you need to make in the period, would you effectively need to make like $10 million to have that $3 million. Nope.

Brian Feroldi: 29:06

In fact, it's the opposite. In fact, it's the opposite. You don't need to make $10 million to have $5 million. You only need to make $1 or $2 million to have $5 million. And the way that you make up for that gap is by investing, is having your money do the work for you Once you have an investment portfolio with like a million dollars in it. Well, the stock market has historically returned in the United States about 10% per year. So what is a 10% return on a million dollars? It's $100,000 of extra wealth you get by keeping your money in the stock market for an extra year, and that number continues to compound. What's the return you get when you have $2 million in the stock market? It's $200,000 in extra wealth built for a year that you earn just for not selling your investments. So this is the power of compound interest. You don't have to make $10 million to save five. You need to make a few like maybe only $1 or $2 million over the course of your lifetime to get to $3 to $5 million.

Darren Lee: 30:09

You just have to take the money that you make and invest it wisely, and I should say and wait which is not easy to do exactly, and that's exactly what I was going to make a point on was the fact that, you know, during covid, everyone was a superhero buying, you know paypal right and buying all these tech stocks at a time, and then, when the market fell out, everyone lost their man. Anton creel says everyone shot shit their pants and lost their mind at the same time. I think think it's the greatest point ever when something goes against something, they just run away from the market, but you obviously need to stay in it, stay true to corrections and stay on the longer path. Of course, easier said than done, what do you say to people when something like that happens, a catastrophe happens I mean several recessions over the past 20 years and then they run away and they stop doing it.

Brian Feroldi: 30:57

That to me, is like saying well, congratulations, you're acting like a normal person, which means that you're going to get the normal results right. So it is completely understandable completely understandable to me why so many people rushed into the market in 2020, why so many people learned the hard way in 2021 and 2022 that markets don't always go up. Because the experience that people had following COVID was I'm bored, I'm locked at home. I'm going to give this investing thing a try because I finally have time and interest to do it. It's something that I can interact with. They immediately learned buy anything and you make 20%, 30%, 50%, 100% and even worse, the riskier, the dumber the thing, the worse the business that you bought, the faster you made money. Given that experience, it makes complete sense to me. It makes complete sense to me why so many people rushed into the market in 2020.

Brian Feroldi: 31:50

If I was just starting out investing in 2020, I would have done the exact same thing. I would have done the exact same thing and, on the flip side, in 2021 and 2022, when everything started going the other way and everything collapsed. That is absolutely no fun, right? It is no fun. But what happened during 2022 was completely normal. Completely normal, right. The market goes up and the market goes down. There are bull markets and bear markets and human behavior. What happens in markets hasn't changed in 200 years and won't change over the next thousand years. That is just how the stock market works. And if you learn a painful lesson, I hope that lesson is seared in your brain for the rest of your life, because the lessons that you learn during that painful experience, if you learn them the right way, will help you to make lots of money for the rest of your life.

Darren Lee: 32:47

And that's when everyone's a hero on the way up. Right, they're the hero wearing the shield on the way up. I have to get your opinion on, like, what's happening crypto at the moment, because everyone is in that position. 2021 right, they know, they think it's going to infinity. Uh, it's going through like a bull market right now. Like, what's your observation looking at what's happening of human psychology and how people are interacting with american, especially on twitter? Right, it's all over the place.

Brian Feroldi: 33:13

Crypto appears to be no different. There's going to be bull markets in crypto and there's going to be bear markets in crypto. The thing that I personally I have like 0.01% of my portfolio dedicated to Bitcoin. It is just purely a speculation. I want to learn a little bit about this and to me, the best way to learn is to actually put a little bit of money on the line. So I understand the bull case and the bear case for crypto and, personally, when it comes to allocating my capital, I understand why businesses in the stock market create value and go up, because I can see the profits that a business is generating. I can't see that same forcing function for crypto.

Brian Feroldi: 34:02

I understand that there are use cases for crypto, especially remittancy, transferring money quickly and cheaply across borders. That is a use case, but what is the cash flow? What is the profit? What is the forcing function behind crypto that will drive it higher over time? Other than people just want to own crypto? I don't see or understand that thing yet. So many people will become millionaires in crypto. Many people will lose millions in crypto. Neither will be me 100%.

Darren Lee: 34:33

And what's funny there is you said people want to own it. They don't want to own it, they just want to make money from it, like, let's be brutally honest, right, uh. And what's funny is, you know, we go back to the principles, because I'm a big principal guy who's a long-term tinker. And 2019 I'd bought up a bunch of like bitcoin, ethereum, solana, probably 2020, 2020, 2021, and it obviously had like tanked and whatever. I just never sold it, just never sold it. And now, five or six years later, it's on its run, right, and the philosophy there is the fact that when you actually just think for the long term, I was like, oh, I don't, I don't need the cash, I'll just leave it. Uh, and that's the irony, when it comes back, it comes back in your favor. Then, right, and obviously it could probably blow up again in a month who knows, right, but I just think it's an interesting observation, right, that when you have that long-term view, that's where you're actually making your money overall.

Darren Lee: 35:19

Now you mentioned about income producing and I really wanted to get into that point. So you break it down, being like there's two different types of companies, or the several types of companies the one-time sale or the reoccurring, the reoccurring business that's constantly churning out, and that's super interesting because, like a lot of the businesses that that I'm aware of, or the people that I'm interacting with, a lot of entrepreneurs they're all on that reoccurring subscription right. You know, use convertkit, um. All these products are doing really well, and even service businesses in a recession are doing really well, because people can plug and play to your provider or whatever and they can stay with you instead of hiring internal teams. So how do you think about that in terms of investing in companies and even your own philosophy as an entrepreneur?

Brian Feroldi: 36:05

There are lots of ways that you can make money in the markets and there are lots of things that drive stock prices over time. Lots of things that drive stock prices over time. However, the most compelling data that I've seen, the thing that drives a company higher up over time, the engine that drives a company's value higher over time is revenue growth. Revenue growth is the engine that powers profit growth, and profit growth is the engine that powers stock market returns. So if you can find a company that is capable of growing its revenue in an above average rate 10, 15 or 20 percent for decades to come, the odds of that being a very good investment are extremely high. So revenue growth is a critical component to driving a successful company over time. Now, when it comes to revenue, a nuance of revenue is that all revenue is not created equally. A dollar of sales at one company is completely different in some cases than a dollar of sales at another. A dollar of sales that is recurring, that has a repeat purchase associated with it, is much more valuable to me as an investor than a dollar of sales that is a one-off purchase.

Brian Feroldi: 37:19

Real, simple example I'm a Starbucks customer. I like Starbucks coffee and drinking. On occasion. So do millions of other people right. When you drink coffee or when you buy coffee, that is a repeat purchase. If you buy a Starbucks coffee today, the odds are very good that you're going to buy a Starbucks coffee tomorrow, the next day, the next day and after that. So when you become a Starbucks customer, you continually buy from Starbucks, again and again, and again.

Brian Feroldi: 37:47

Now, on the flip side, I a couple of years ago, bought some patio furniture for my back deck. Now, once I purchased that patio furniture, do I need to purchase more patio furniture again and again, and again? No, it's a durable good. It was a one-off purchase for me and I plan on having that patio furniture as part of my life for 15 or 20 years. So this is a really critical thing to ask yourself when you're investing Is the company selling something? That is where they consume their customers. They find a customer, they give them a thing and they never interact with that customer again. Or is it a repeat purchase business? They find a customer, they attract it and that customer gives them revenue again and again, and again. The latter is much more powerful and it makes it way easier, way easier for a company to consistently grow its revenue when it's got repeat purchase built into its business model.

Darren Lee: 38:43

All I'm thinking about there is software companies, right, if you look at a Salesforce Apple, microsoft you know they only exist when you interact with them. When you interact with them, they're the stickiest products in the world, right, because you have to use them. You effectively have to use the ios um platform to be able to use your phone and you have to pay it continuously. So it's like if you to review even what type of business to build because my lens is always should entrepreneur lens is like what's the best business to build has to be something that's repeat, whether it's one dollar a month, right, but if we know that we can have that residual income and even for us, like we have like subscriptions, it's a product or service effectively, um, but I can sleep well at night knowing that, for the most part, I'm gonna have my customers next month, the following month, the month after I just just think in 2024, there's better ways to build businesses or invest in businesses than one-off payments effectively.

Brian Feroldi: 39:40

Yeah, absolutely. It's a critical thing to understand whether you're an entrepreneur, whether you're working at a business or whether you're going to be investing in a business, and software comes to mind for a lot of people. But there are dozens of different types of recurring revenue. Right, there's consumption-based recurring revenue, again with, like Starbucks or, if I like, chipotle the odds of me having a Chipotle burrito again and again and again are fairly high Grocery stores, I mean.

Brian Feroldi: 40:06

One quick thing to do is just look at your credit card bill over the last 30 days. Do you notice that you keep shopping at the same place again and again and again? Because Amazon, for example. Amazon. I'm mostly buying one-off purchases, things that I only need for my life once. However, I'm going to go back to Amazon again and again and again for other one-off purchases. So Amazon, because of its marketplace model, has repeat purchase built into it. Or utilities have repeat purchase built into them, or Netflix or subscription services, like I pay for YouTube premium. That has repeat purchase built into it. Or advertising. I'm a Google user. Whenever I search, I'm clicking on ads that get Google revenue again and again and again. So recurring revenue comes in many different forms, but it's just a really important thing to ask yourself about any business Is there repeat purchases built into the customer process?

Darren Lee: 41:03

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Darren Lee: 41:57

This is super interesting because those lessons as an investor are the exact same as an entrepreneur. Exact same, especially if you're coming down the VC or angel investor aspect, because a lot of people build cash flow businesses. Now, my business is cash flow. We don't need investors, right, but it's. Even having that idea is such a nice lens to look at things through, because it's way more I don't know, it's way more logical. Effectively, you write about the price of high long-term returns is perpetual short-term uncertainty and volatility and you should pay it. That is the exact story of an entrepreneur, because all of entrepreneurship is short-term uncertainty and sacrifice and complexity for the long-term payoff. But I would genuinely say that it would almost always pay off for you, whether it's your first business, second or third business, because you're stacking those skills, those long-term returns and you're building towards the future as well as the income you're making. But I'd like to get your thoughts on that in terms of investing as well as your own business.

Brian Feroldi: 43:00

Yeah, totally. I'm completely of the mindset, from an entrepreneurial perspective, that I either make money or I learn an important lesson. Either way, I come out ahead and I have learned plenty of lessons over the last four years as I've been an entrepreneur about what not to do or things that can go wrong. But even the failures that I've had or we've had as a business, they have caused us to one again learn that important lesson. Oftentimes we're learning some skill, some skill that we didn't have previously. It could be about copywriting, it could be about automation, it could be about funnel building, it could be about audience building. Whatever. Wherever our failure was, that has helped to inform what we do next, to make sure that we don't make that mistake again. This reminds me of a wonderful one of Warren Buffett's best quotes of all time I'm a better businessman because I'm an investor. I'm a better businessman because I'm an investor and I'm a better investor because I'm a businessman. Those two things the lessons you could learn from investing and business go hand in hand. I love that.

Darren Lee: 44:01

That's super interesting. Do you look at any private businesses investing like angel investing?

Brian Feroldi: 44:07

Not really. There are a couple of businesses that I have had access to invest in, but to me, the thing that I understand are publicly traded companies. Right, I understand the risks. I understand the rewards that you can get. I understand how to invest in publicly traded companies. In doing so, I get audited financials, I get management teams that I can check in on. They are self-working and all I have to do is read the reports every 90 days and I get a report card for how that company is doing and if you invest the right way, you can make two, five, 10, 100 extra money on publicly traded investments. So I don't see the need to go down the risk profile even more to get into private businesses that are smaller, riskier and the financials that you get are far more opaque. But I do understand the allure of that and I don't want to write that off completely. I just haven't done it to date.

Darren Lee: 45:03

Yeah, and again back to the kind of Bitcoin approach is like a tiny exposure in your entire portfolio, as well as everything else being taken care of.

Brian Feroldi: 45:11

Yeah.

Darren Lee: 45:11

You may want to because you could be interested in it. It could be something to do with email marketing or to do with content that you're interested in, but it's not your main bread and butter, right? I love your approach around. You know timing the market versus time in the market, and I refer to this as time in the arena and I feel like that. You know, a lot of guys will start out their entrepreneurship journey and they're like, okay, I'm going to build a coaching program and then they meet the water resistance and they give up and they go back into build like a sass company and they meet their water resistance and they give up and they go back.

Darren Lee: 45:44

And my kind of thesis on this is that, no matter what vehicle you pick, if you just stay in the arena, stay in the market, you will get better, will get better. I think you'll break through at some point. Or you'll pivot until you break through that's my genuine thoughts on that or, again, you're just learning right, how have you viewed that versus, like, timing the market, versus just being in the market effectively for investing?

Brian Feroldi: 46:05

Yeah. So that concept mostly relates to. I aim that mostly through investing, because it's very common for people to say, well, the stock market just did fill in the blank, it's at an all-time high, it's at a bear market low, it hasn't done anything for a couple of years, whatever just happened, is right now a good time to invest. Usually when people say that it's because the market is at an all-time high or near an all-time high, which it has been for the last couple of months, and it's natural to say, well, I shouldn't invest now, I should wait until fill in the event blank blank happens. What that ignores is that the market, the stock market, us stock market in particular goes up about 10% annualized over time and if you understand the fundamental growth drivers of what caused that to happen, you should have high confidence that that should continue to happen over the next 10, 20, 50, 100 years. So one question to ask yourself is if you could invest and buy into the stock market at 1999 prices today, would you do that? Well, in 1999, the stock market was at very high prices. It was almost at bubblicious prices, especially the NASDAQ. But if you invested even at that horrible time to invest, you've earned a pretty solid return over the next 25 years because the entire market has gained value. The entire market has gone up.

Brian Feroldi: 47:35

So, even if you are a horrible market timer and you only buy at market highs previously, if you hold the market for its intended time period, which is measured in decades, the odds of you earning a positive return are incredibly high. Real quick, my favorite statistic about the United States stock market. My favorite statistic is if you bought and held the market for 20 years, there's never been a period in stock market history where you've lost money in real terms. Every single time you've bought and hold the stock market for 20 years, you've made money in real terms, meaning, after accounting for the effects of inflation. That sounds like a pretty good deal to me. 100% of the time you've earned a positive return, with the sole caveat that you have to hold for 20 years to get it.

Darren Lee: 48:26

I'm curious is there any statistics on the amount of people who haven't sold their positions of like 20 plus years?

Brian Feroldi: 48:33

So most of the research that I've seen when it comes to that kind of thing are related to mutual funds and professional managers.

Brian Feroldi: 48:41

However, vanguard does occasionally release data on the holding periods and the average of typical stock market investors. But this is the nice thing about it In the United States, the number one way that people save for retirement is through a 401k, a retirement plan. It's a tax advantage account that has dollar cost averaging built right into it and so many people sign up for it and then they're just automatically contributing to it on a on a a bi-lake basis without thinking of it. And with a 401k you are prohibited from actually accessing that money before you turn 59 and a half years old in the United States. So people that put money into retirement accounts in order to get access to that money early they have to take some huge penalties to do so. So many people don't do that. So I would guess that the vast majority of people that put money into a 401k keep that money in the 401k for a period of decades, but I don't know any statistics off the top of my head for regular taxable brokerage accounts.

Darren Lee: 49:41

Yeah, I imagine it's very low right, because I come from a building product in trading space and especially the way things have gone the past five years with notifications, all this kind of stuff, you get so much FOMO, or the opposite of FOMO, I guess, if you want to sell the position, that you'd nearly be forced out of your position when you see a small turn and I remember it got so bad a few years ago that, like, you get notification with a price movement, okay, so minus three percent or plus three percent, you get notification. So if you had a big watch list and the markets turned like they did in 2021, 2022, your phone would just pop with like a hundred notifications. Generally it just pops straight away and they're all just automated sent out to you. So that would incite the fear, right, that creates the fear for you to go make these decisions.

Brian Feroldi: 50:31

That sounds like a great feature to turn off if you have that, but again, most people leave notifications on right.

Darren Lee: 50:38

These are filtering into the system.

Brian Feroldi: 50:42

That's a massive mistake, in my opinion. I have gone out of my way to turn off every notification on my phone that I possibly can, because I want to be in control of accessing my phone. I don't want my phone to be in control of my attention. So general rule turn off all notifications except those that are absolutely necessary. And learning about a stock price declining 2% or 3% is not a necessary information. I love it.

Darren Lee: 51:08

I love it. So I want to take a bit of a turn into more like your lifestyle view, your personal view, because what I really like about your content is that it's not just like investing news, and that's why we're having this conversation today, right, it's because you're able to tell your story and your journey really well and you break it down saying rich, you can buy whatever you want, wealthy, you can spend your time with however you want. How have you basically used investing to be able to give you that life of freedom and be able to basically do what you want to your kids and so on, to me, the highest use of money isn't to buy, isn't to be able to afford luxuries in your life.

Brian Feroldi: 51:45

The highest use of money is the ability to buy back your future time so that you can spend your time however you'd like. I mean to me, financial freedom and there are many ways to achieve financial freedom is just complete control over your calendar. Complete control over your calendar so you can work on, you can be and work on what you want, when you want, with who you want, for as long as you want and critically, and you can stop doing anything that you want with no impact to your family's financial life. That, to me, is true financial freedom. Now, there's lots of ways that you can achieve that. You can achieve it the slow and easy way, which is the one that I recommend, which is continually building money by investing in the stock market over a period of a couple of decades. If you do that for 20 years consistently, you'll have plenty of money that you need to buy back.

Brian Feroldi: 52:40

Control of your future calendar. If you want to go there quicker, there are things you can do in the entrepreneurship land, where you can build an asset or build businesses that provide monthly cash flow to you, and if you have enough cash flow coming in to cover your lifestyle boom, you now have complete control over your calendar. So you can get there through the cash flow method or you can get there from the wealth building method. Either way, I think it's absolutely a fantastic, fantastic financial goal to build up enough monthly income for yourself that you regain complete control of your account.

Darren Lee: 53:12

Yeah, I love that. I think what happens sometimes is like people take on more and get caught in like a loop whereby they don't have the control then. So it's kind of like they make so much money that they put themselves in those brackets. And that was definitely me in the beginning kind of, when we had a smaller team. We had a small team, I was kind of doing everything so I was making money, but I was also working 16 hours a day. I don't actually mind working a lot. It's the fact that I was constricted calls, sales calls, sales calls, client calls, team calls right, but you kind of over time. I said this to my partner yesterday I'd almost prefer to make a smaller margin and have more time and basically take 30% profit margin versus a 60 or 70 if that just meant that I just have way more time and less calls effectively.

Brian Feroldi: 53:59

Sir, just ask yourself what are you optimizing for? What are you trying to optimize for? Are you trying to optimize for making as much money as possible? Are you trying to optimize for the best life possible? There are different things that you can optimize for. So many people, just on autopilot, naturally try and accidentally optimize for one specific thing without the idea that they're actually optimizing for that. So it's just always a good idea to zoom out and ask yourself what am I trying to optimize for in business and in my life and really ask yourself is that worth optimizing for, or is there something else that you'd rather optimize for instead?

Darren Lee: 54:34

And there's another consideration. There is like, when you do decide to make an adjustment, it doesn't happen overnight, it's like a slow continuation process, right. So let's say if you are an entrepreneur and you do decide to make an adjustment, it doesn't happen overnight, it's like a slow continuation process, right. So let's say if you are an entrepreneur and you're trying to build like a more sustainable business, that doesn't just happen, like systems and processes don't just happen in your business. You have to do it and the impact with time could be three, six, nine months, but it's like, it's definitely doable. You just need to be able to have that. It's like in change internally first and then have the external change, uh, which takes the time right. I think people get caught in their ways sometimes, definitely if you're working for companies like I used to work in these big tech companies and people get caught in their in their ways and I was for many years too right um without knowing what you're trying to optimize for absolutely Absolutely.

Brian Feroldi: 55:20

It's especially prevalent in the corporate world, because it's natural to be to enter the corporate world at the bottom rung and to look up at the people above you and see that they are making more money than you, they drive fancier cars than you. But you have to ask yourself is the people above you, do you actually want the lives that they are living? Not just the financial benefit, but do you want to live the lives that they are living? Not just the financial benefit, but do you want to live the lives that they are living? Are they the type of people that are divorced, overweight, stressed out? Do they have no friends outside of the office? Is that the price that they have paid to get to the position that they want? If that's the case, ask yourself is that the prize that you're looking for? If the answer is no, there's nothing wrong with staying lower on the corporate ladder or even switching to a completely different career. So, yeah, ask yourself is the prize that you are going after worth it?

Darren Lee: 56:13

I think there's, out of the top 10 billionaires or I think it's like top 10 most wealthiest people in the world nine of them are like divorced Some crazy statistic.

Brian Feroldi: 56:23

Yep. Zuckerberg is the only one still standing.

Darren Lee: 56:26

That is wild. We'll see how long that marriage lasts, or even if he is married.

Brian Feroldi: 56:32

Yeah, it's something like there are 13 divorces of the top 10 richest people in the world, but that just shows you that so many of those people were optimizing, for they were optimizing their life around net worth and business building, and they were willing to sacrifice relationships along the way.

Darren Lee: 56:53

When you get into the top 0.001%, it's kind of natural to see that, so I completely understand why that's happened yeah, to take it from a different angle, I would hope that the reason why they push so hard is because of, like, what they want to achieve with the business, like seeing real change in the world or making a really big difference with the product that they have. Obviously, you're trying to make money right, that's not sugar-coated if investors but at the same time, the reason why they're pushing, pushing, pushing is because, like, facebook can basically change how we communicate with people, amazon can change e-commerce, google can change the internet right. So they're like, they're solving big problems for us for like, as humans, to advance with. That's my philosophy, anyway, that's the way I would see it from an entrepreneur's lens is that you get caught in the numbers, but you also get caught in the product, and it's very easy to fall into that. Yep absolutely.

Brian Feroldi: 57:48

I just listened to Elon Musk's most recent biography by Walter Isaacson I'm pretty sure is the guy's name but it is very clear that Elon is a mission-driven person and he wants to save humanity, make it multi-planetary, build electric cars. That is what he is doing with his life and he is willing to sacrifice everything in his life to get there. He's willing to sacrifice relationships, his health, he's willing to sacrifice anything in order to achieve, uh, the missions that, uh, that he has set out for himself, and that's just a choice that that he is making that's super interesting and and at that point too, it's like when someone that's of that, like you know, intelligence, iq, he has the ability, it's almost like should you do that, should he devote?

Darren Lee: 58:38

his time to a different question right that that's a different question, then right.

Brian Feroldi: 58:41

Yep and for him the answer is yes, but that's great. The world absolutely needs people like Elon, but that doesn't mean that I want his life.

Darren Lee: 58:52

And that's the problem with social media, right Is that it's portrayed in a way well, not necessarily social media, just social pressure. That if someone is doing it like that, like social media, just social pressure, that if someone is doing it like that, like Hermosi, is a great example, because Hermosi can push super hard and work 18 hours a day and still have a relationship and have a good marriage Doesn't mean that you have to do it or I have to do it. And a lot of young guys see that and see the opposite. That's when they fall into that kind of trap of when work 12, 16 hours a day. There's lots of guys in their 20s falling into that trap. Now, he's done amazing stuff for the online business space, amazing stuff. But I just think that small caveat just has to be made aware. Like, have a look at it, realize, is that something for you? You can work a bit harder, see, does it have an impact? And just kind of make more of a judgment call.

Brian Feroldi: 59:45

Like we're adults at the end of the day right, we should make these judgments for ourselves, or not? He is someone that I look up to in many ways, but he also does not have kids and does not want to have kids from what I understand. So to me that would be a horrible life not having kids. But he is someone that I deeply respect and he has made intentional life choices and he's going after what he wants. But again, to me he's on a mission. His personal mission is to become a billionaire.

Brian Feroldi: 1:00:02

Personally, that has no appeal to me at all. That gets back to the whole question of enough. My level of enough is way below a billion dollars and I see no benefit to me to going after even $50 million in net worth. So 1, 20th of the number that he is targeting like that doesn't even interest me at all, cause I can't imagine how my life would be better with that much money. But he has made intentional decisions. So has his wife. They want to become billionaires. They're doing it intentionally. So I say have at it If that's what you want out of this life.

Darren Lee: 1:00:37

Yeah, and it's interesting because for someone like him he doesn't like spend the cash right he still wears the same cut-off t-shirts every day. From his lens it's like an impact play, right, because that could be marketing. But I believe the way he kind of says it is that it's the impact he wants to make education freely available, have this standard of education for anybody to be able to use and also have like a very big impact and legacy basically from that education piece.

Brian Feroldi: 1:01:04

So that's kind of his detachment from it, right? Yep, he is absolutely someone that is trying to achieve certain things in life, but he has thought through everything about that. So he is absolutely living the intentional life that he wants to. It's just that I personally don't want the same things in life that he does.

Darren Lee: 1:01:22

I like that. I like that a lot. Before we finish up, I want to ask you one last question on the eternal investing battle. So emotional versus logic, the way I see this is like people think they're acting from logic, but it's all emotion, right, and that's just in their daily lives.

Brian Feroldi: 1:01:38

It's in everything. How do you battle with that in the investing world? Comes along, I'm going to be greedy, right, I'm going to go after investments. I'm going to invest like crazy because the asset prices are down and that's the time you want to invest. It is completely different when you're actually living through a bear market and the news is filled with negativity and everywhere on social media is talking about how terrible times are and how prices are going down. It's a completely different thing to act in a greedy way or take a positive action to invest when everybody around you is losing their mind. So it is folly to pretend that you will be logical and think through things logically in all time periods. So it's easy to be rational when times are calm. Completely different when times are crazy, and this is a battle that every investor has to wager themselves. Your emotional brain is going to want you to take certain actions and your logical brain is going to want you to take other actions. So it's an internal battle that every investor is going to have to face.

Darren Lee: 1:02:59

What's the lesson there? How do you action? The soul going into your hard times.

Brian Feroldi: 1:03:04

The answer there is to study yourself. The most important investor that you should study thoroughly is yourself. How did you behave personally during the last bear market of 2020? Were you even investing in March of 2020, when we experienced the fastest bear market in US stock market history? The stock market fell like 20 something percent over the matter of 30 days. What was it like for you to be investing during that time, when not only was your portfolio being battered, but businesses were closing up and your life was changing and schools were being closed and you probably had to be remote work? How did you feel and act with your investments during that time of extreme economic stress? Because how you acted then will be a great indicator of how you will act in the future. So, first thing, study and audit your own investing behavior. Second thing to do is study market history. Study market history. Everything feels unprecedented when you're living through it if you are ignorant of what has happened in the past. Right History, it doesn't repeat itself, but it does rhymes. That is such a true statement.

Brian Feroldi: 1:04:17

I invested during 2008. I was an investor in 2008. It felt horrible to watch my entire portfolio fall 60 something percent peak to trough. It felt unprecedented to me right. It seems like this is the worst investing environment in history, but then once you study what happened in 1929, you learn that what happened in 2008 was actually fairly mild by comparison. In 1929, the stock market peaked, a trough fell 89% 89%. So if you had $100,000 in the market, you had $11,000 invested in the market at the absolute low and the unemployment rate went to like 25%. People are moving back in with each other. Getting food on your table was a massive challenge, so what I experienced in 2008 was mild. People would have wished for that environment in 1930 and 1931. So studying that history and understanding how the stock market has worked historically really helps to put things in perspective.

Darren Lee: 1:05:22

Yeah, it's building up that kind of internal dialogue, understanding that every single time it comes around, you should be getting better as an investor, more wiser with yourself, and also be able to understand that, okay, now we can take different precautions right, or just having a better awareness because it's all in your mind. Same in a business, same in investing. Major majority of our problems are starting their mind. But the longer we spend in the market or in the arena, the better we become in general. I want to say a massive thank you, brian.

Darren Lee: 1:05:48

This was a this was fantastic conversation. I really hope you enjoyed it. Different switch up, different change, I think, even for yourself and really good for a lot of younger people too, because I'm a big principal guy, I think that a lot of younger people too, because I'm a big principle guy I think that a lot of people just don't have the principles. They don't think about the principles. But no matter if you're investing, if you're building businesses, if you're writing content that's the second podcast right there it's all about thinking long-term right and building out all the lessons that we need to have to follow closely.

Brian Feroldi: 1:06:15

Totally agree and thank you.