Financial Literacy for Dummies (Like Me) with JL Collins

My feed is a constant stream of financial grifters. I'm talking crypto bros, NFT scammers, affiliate link farmers, and pump and dump incels. Every flavor of overconfident [ __ ] idiot is on my timeline. And I think I know why that happens. At a certain point in your life, after you've paid your rent and your Verizon bill, you're like, hm, what do I do with all this extra money? What does Tik Tok have to say? And that's how You get sucked in. And one day I stumbled onto this old white guy who gave the most boring

Google talk I've ever seen in my life. And it changed my life because it turns out the best advice is also the most boring advice delivered by the most boring people. And now I call one of those boring people my friend. His name is JL Collins and his book is The Simple Path to Wealth. And he has three rules for money. They're very simple. Number one, spend less than You earn. Number two, invest the surplus in an index fund. And number three, avoid debt. As unsexy as all that sounds, for me and a lot of

other people, it works. So JL agreed to come all the way from Wisconsin to New York City to talk about the simple path to wealth, why so many people are bad with money, and how to ignore all those overconfident posers in your Instagram reels. But not this overconfident poser, just the other ones. Lay. When I was uh an upand cominging comedian, an open micer, I moved to Los Angeles. And the way standup comedians make money is the booker will either pay you in cash or you'll get a check, right? And because I did not have

a good relationship with money, I would immediately cash the checks and I would hold the cash. And I'm living with my roommate Dan in Los Angeles. We live in downtown Los Angeles. And one day he Walks into my bedroom. We lived in a two-bedroom apartment. And I would keep all of my cash in Nike shoe boxes, right? And so I had about $3,200 to my name. And he's like, "Are you selling drugs?" And I go, "I pro I'm not selling drugs. Uh I'm I'm I'm serious. I am a comedian. I I'm not selling drugs out

of this apartment." And he goes, "Do you have a checking account?" And I go, "Yeah, I have a checking account." There's like some Money in there, but like this is the real money. And he starts saying things like, "Do you have a 401k? Do you have a Roth IRA? Do you have a retirement account?" He's using all these terms, but it started my Google journey into buying this book. And so the question that I wanted to ask you was, you basically got to become everyone's dad without having to give them the talk about sex. And

so what's that like being everyone's dad without giving them the Birds and the beast talk? Wow, what a question. I I'm I'm debating in my mind whether being able to talk about them about sex would be a better option, but because nobody wants to talk about money. Sure. Yeah. It's it's a weird thing, Hassan, because I I wrote this book because I couldn't get my daughter to listen to me when she was young. I pushed this stuff way too hard, way too fast, turned her off to all things financial. And that concerned me because I

knew that if you get a few key financial things right, there's so many more opportunities that open up, your life is so much better, so much easier. And if you don't, the road is so much harder. So, as a parent, you know, I wanted that for her. Why are so many people bad with money, myself included? Well, I think when you when you look at the popular culture around money, you turn on the TV, you you look at the news, it seems Impossibly uh complicated. And there's a reason for that because Wall Street makes it

very complicated. Wall Street is filled with genuinely complex investment products. Classically, it's filled with some things that the people created it don't quite understand how it works. So, that's the bad news. So, when people say, "Wow, this is really complex." They're absolutely right. It is. The good news is you can sweep all of that Off and onto the floor because you don't need any of it. And what you do need, what will make you wealthy over time is the soul of simplicity. But that's not a message you're ever going to get uh on TV or

or in the papers cuz there's no money to be made in in putting that message out there or on the internet. The internet is filled with people that speak very confidently. Yeah. Yeah. With all caps and their captions and there's really bold music and there's complex Ideas and complex graphs. And when I look at you in this book, you just wrote one book when there's so many courses you could have sold. There's so many subbooks you could have written about how to become rich. And my question, JL, is why aren't you a grifter? There's a

great griff to get in on. And why just do one little book like this? You know, it's my mother's fault. Really? Yeah. She instilled a conscience in me. I I've I've cursed her for that Ever since. I would be so much wealthier if she hadn't given me a conscience. But she did. So, here we are. Um, when I knew you were for real is in 2018, you gave a Google talk. Yeah. at Google and a Google employee asked you about investing in Google. Let's take a look. What are your thoughts on holding the Google shares

since we're all extremely invested in the success of Google? Well, that's a politically loaded question Somehow. I think I should say hold Google, but that's actually not my opinion. What was your opinion and what is your opinion? So my opinion, what I I can't remember exactly how I said it, but what I said to to those people and it's still my opinion today is that you never want to hold a large portion of your wealth in any one company. And Google's a great company and it's still doing great today as far as I know. But

all companies have A life cycle and at some point Google as all companies do will fade. It might happen sooner or later. But my classic example of that is Sears. You know, Sears for a hundred years was Amazon and Walmart combined. Sears was the company that said, "Hey, you know, there are all these people out in rural America who can't get to stores, but we could mail them cataloges and then they could send us back orders and we could just mail the stuff to them, right?" Well, what's That? That's Amazon. That's exactly what Amazon does,

you know. And Yeah. and we're going to have these brick and mortar stores. Yeah. And that was the Sears catalog for those of you that don't know. Uh Sears would print out the internet and and and staple it together. Right. It was like this thick. Yeah. And it was filled with products and then they would staple that and mail it to you and then you would circle what parts of the internet you wanted and mail it Back to them. Then they would mail you those goods and services. It was the print and even they would

do houses. They had prefab houses they sold at one point. So, and they dominated for a hundred years. In 1973, they built what was then the tallest building in the worldw. Now, you'd be hardressed to find a Sears store open. In 1973, if you'd said that was 20, 30 years later, Sears would be gone, people would have laughed at you. But if you and if you been up in front of a bunch of Sears employees and they asked you, "Gee, should I have all my net worth in Sears stock, you'd have been pretty controversial, saying,

"No, that's probably not a great idea." When I watched that clip, I was like, "Bootleg John Goodman is either a genius or he's the most genuinely sincere person on planet Earth, and I got to go all in." So, I bought the book. I bought the book. I was like, "All right." Yeah. You know, I have to share with our audience. So, that's not entirely true. What's that? I mean, you bought the book, but that you went all in at that point. No, because when you and I got to know each other a little bit and

we started cuz I was very intrigued that you were you were following my work. We had some conversations and we probably talked for two different times for at least four hours and you grilled me. Yes. And I Could tell the nature of the questions were, you know, are you for real? Let me ask it another way. Are you for real? And I guess I passed the test cuz here we are. We've become friends. Yeah. This is becoming more psychological, Jail, because really uh and and and my staff thinks this as well. I have an amazing

team here. But they often times ask me, "Why are you doing this?" Yeah. What what what happened here? And really what you're looking at JL is a broken toy. Um Someone who who wasn't loved or hugged enough and wasn't given proper information. Now, as a trauma response to that, I found humor and the gift of gab and and and at times lying as a way to get around that. Um, and unfortunately, what that did is it let someone susceptible like me go on the internet and then fill that void with gurus, grifters, and charlatans. Um,

that's how I came upon your work. Here's a here's a guru, drifter, and charlatan all rolled up into one. and you happened to be willing to give me your phone number and email and I I got into congressional testimony JL Collins style. But honestly, JL, the the core jumping off point of even our initial conversations was around the core principles and the simple path to wealth. Now, I'm not sure if you're aware of this, but it's 2025 and people don't read. So, let's break down the basics of your book. What are the three rules that

are the entire basis of the simple path to wealth? Three principles are real simple. Avoid debt, live on less than you earn, and invest a surplus. Let's talk about the first rule. Spend less than you earn. So, you're saying be cheap? No. What are you saying? I'm saying, You know, one of the things that I that I I push back on is this idea of being cheap or that this path is is one of deprivation, right? I don't see it that way. I I never felt that I was depriving myself when I took money that

I saved and invested it. What I was doing is spending my money on the single most important thing to me, which was my financial freedom. In my mind, and this is not going to be true for everybody. It's not going to be true for everybody Who's listening to us. And that's fine. Everybody has their own decisions to make. But for me, there was nothing money could buy that was more important than my financial freedom than having of what I thought of at the time as FU money, which gave me the freedom to make bolder choices

in in my life. There was no car. There was no house. There was no wardrobe. There were no fancy vacations that were more important than that. Now, I did some of those other things cuz I I Enjoy other parts of my life. But to me, it's no different if you're sitting there saying, you know, should I buy a a Chevy or a Cadillac? Right. Well, if you buy the Cadillac, you've got a a much fancier car and maybe people will be more impressed with you than if you buy the Chevy. But if you buy the

Chevy, you're going to have a car, you're going to have perfectly adequate transportation, and you're going to have a bunch of money left over to do other Things with. It's a choice. Depends on what your values are. Can I just push back at this? You know, let's say hypothetically I'm making $46,000 a year. And that's what I got. And I have to pay my rent, but I also want to enjoy the the life that I am living. I I am only around for today. I don't know if tomorrow's promised. So, let me have a little

bit of discretionary spending to go on vacation with Bae, buy an iced coffee or two, Maybe take my kid to Disneyland. Why can't I just spend all of it? And why do I need to for what? I save an extra 1,800 bucks to put it into some index fund. Why? Why can't I just let me live today? Well, first of all, you can. And that's what most people do. In fact, tragically, in my view, some people go into debt to do even more of that. All I'm saying is that there is another option. There is

another thing you can Do with your money. What if But what if there's stuff that I want or need? Well, but that but that's the whole point is you have to decide what are the things you want and need that are most important to you. Okay. want a Pokemon original Charizard card that is authentic that wasn't the fake one that Logan Paul bought during the pandemic. The real one and it is a original Pokemon certified. You have no idea how far out of my wheelhouse you're going, But go ahead. But this is a big deal.

You have no idea how real this is. Clearly, I have no idea. Yeah. And I want that, right? And that's going to cost me quite a bit of money, but I want it. Okay. And it might be more than what I've earned. Okay. I'm already breaking rule number one. Well, if I spend the money to buy the Charizard. Again, these are not the Ten Commandments down off Mount Cyani. This is a simple path to wealth, and only you Can decide whether that's where you want to go. If you want to buy a Pokemon card, Pokemon,

whatever. It's not whatever. Well, I'm sorry. I clearly I'm missing the the the critical importance of this, but you can buy whatever you want with your money. It's your money. I would never presume to tell you or anybody else what to do with their money. The only person I ever presumed to tell that was my daughter. Right? But what I am telling people is There is another option. What I think is tragic is if you get to the end of your life and you have spent all of your money on things that are now gone

and faded and haven't haven't provided wealth for you and you're broke because you didn't know there was another option. That's tragic. And if I can let you know that there's another option, there is another thing of value that you could spend your money on. You don't have to do that. You might, in Fact, most people, let's be honest, who listen to us today are not going to do this. That's why people who follow the simple path to wealth and become financially independent, we're unicorns, and we will always be unicorns. It's a rare path to walk.

But at least you will know that at the end of your life, that's something you could have chosen. Just like I know I could have bought a Porsche at some point. I've chosen not to for a variety of reasons, but it's Not like I didn't know Porsches existed, right? You know, what you just said was a little elitist, JL. Well, I'm a pretty elitist guy. You haven't met my mother. Oh, really? Well, no, but I mean, what you basically said is, "Hey, I'm going to put you onto the game. I'm going to tell you the

rules of how it all works, and I bet you're not even going to follow it." Yeah. I don't I don't see how that's elitist. I think that's the way it is. I am under no illusions that That you know in in this FI community that that I financial independent community financial independence community right or fire which is financial independence retire early financial independence retire early which is by the way yeah that is the wave people are talking about this like you have to be so that's that's the interesting thing and it is when I first

started writing about this stuff back in 2011 it was not the wave and it Certainly has become the wave but one of the questions that I a lot in this community cuz new people who discover it and for whom it resonates, they get really excited and they can't it's it's like it's like um religion almost. They can't they can't believe that if there was anybody out there who was exposed to this truth that they wouldn't immediately embrace it. Well, I've been around long enough to know that that's not the case. It's not the case with

Religion and it's also not the case with with the simple path to wealth. Right? So I I'm under no illusions. I don't think unlike a lot of people particularly newbies in in the space who think the whole world's going to go this way. I get questions like well JL what if everybody retires early and nobody's working? What's going to happen to the economy? Well that might be a problem but you know what it's never going to happen. the the underlying underlying Principle of of this the ability to work for who you want to work for

is this idea of [ __ ] you money, right? What is financial independence and what is [ __ ] you money? Okay, understand this is my definition. Okay, so I think a lot of people for it's the same thing. It's just different different terms for the same concept. For me, financial independence is when you have enough money that it throws off enough money to cover all of your expenses, all of your Living costs, and then some little bit of a cushion. FU money is what you acquire slowly but surely over time as you take those

steps to get to full fi where you're financially independent. FU money is important because you might not be able to quit your job forever at a certain stage. But if you have enough [ __ ] you money, you can quit your job and take a sabatical for a while while you look at other options. Maybe you were working in A company that you liked and for a boss for whom you respected and then you got another boss and not so much. Well, now you've got the wherewithal and the economic power to step away. Got it.

So, [ __ ] you as a cushion. [ __ ] you as a cushion. [ __ ] you. I don't got to deal with this [ __ ] right? I have a little bit of a cushion, right? It's just like going to the gym, right? You get stronger and stronger. And that's not just for going to the gym, but that Makes you more resilient in the real world. You know, if you're walking down and you slip on ice and fall down, well, if you're physically strong, you're less likely to get hurt. The more physically strong

you are, the less likely you are to get hurt, right? But every little bit helps. Do you have [ __ ] your money now and full financial independence? Yes. And have for a long time. How much money do you have right now? Enough. What number With commas in it for you is enough? So my mother once said to me, never tell anybody how much you make or how much you have because there's only two possible reactions. If they more more than you and have more than you like you do, then they don't care. If they

have less, they're going to be envious. So, I have enough. And by the way, I should make a comment about that. It's not FU money and and uh financial independence is not a set number. It's a different number for everybody. So, I've known people who've made millions of dollars a year and they will never be financially independent because they have constructed lifestyles that cost every bit of that and then broke rule number one. They spend more than they earn, right? I mean, Mikey, Mike Tyson Made something on the order, one of the all-time great boxers,

an incredible athlete, made something like $400 million, and it just bled through his fingers because he didn't know how how to handle it. He was surrounded by sharks taking bits and pieces out of it. Tragic, tragic story. But so Mike Tyson and I think he's recovered quite a bit in fairness. But when he lost it wasn't cuz he didn't wasn't making enough money. At The same token, I've known people who've never made more than $50,000 a year who have achieved it. You know, I have another book called Pathfinders, which is a hundred stories of people

who have found the simple path to wealth, read it, and have implemented it from all around the world. Yeah. One of the things I love about that book is some of the stories in there are from people who started from incredibly humble beginnings. I mean, there's a guy in There who was a migrant fruit picker when he started. He was when he was writing his story for us. He was worth half a million dollars. There was a woman in there who said, you know, when I was a kid growing up, the rich people, they were

the ones who had flushed toilets. Right? So, I love those stories because there's a push back in this country that and you touched on a little bit earlier uh when you were talking about making say $46,000 a year. There's A push back that says, "Oh, you know what? That sounds great, but that's only for people with really big incomes. That's only like for tech tech people and that kind of stuff." And that's not my experience. When I did the first Shiitakqua, which were these events I put together back in 2012. Yeah. Shitaka was basically like

um it would it's like a campcult gathering of people that are like you, right? That like and have pursued the Simple path to wealth. And so they they come and they hang out together. Exactly. Yeah. Now I haven't been to one of these, but I imagine it's just a bunch of views. Well, no, that and that's kind of the point I was getting to. Oh, so when I put was putting the first one together in 2012, I I it never even crossed my mind who would come, right? There was this trope out there about, you

know, this was only for tech engineers kind of thing. And I was kind Of vaguely aware of that. I was just hoping somebody would come. Yeah. You know, we said we were going to have 30 people and that would be, you know, that would be and we'd take them somewhere cool for a week and and we sold it out. But when I went to the first one, one of one of the most stunning things to me and candidly, one of the most gratifying and absolutely the most unexpected was the incredible diversity of people showed up.

And when I say diversity, and You're only talking about 30 people, by the way, every possible measure, age, gender, race, religion, sexual orientation, it was and I I I thought that was wonderful, but I didn't expect it. I was just hoping somebody would show up. And level of wealth, occupations. This was not a group of tech bros who got together to spend a week in Ecuador with me. And again, I had no idea who was going to come. But that immediately in My mind put the lie to this idea that this concept of pursuing FI

is only for a certain class of people. Is it bad to lease? Bad to lease what now? A car. Um, financially probably. Uh, no question. uh it depends on on where you are in your life. You know, there are certain things that are not financially optimal, but if you're wealthy enough, it doesn't matter. So, yeah, I would not if you're trying to build your wealth. No, I wouldn't I wouldn't lease a car. I Also wouldn't take a car payment. I've never had a car payment. You just bought outright. Yep. Go to the dealership. Yep. Yes.

I will take the Toyota Corolla, right? full MSRP that econom economy shitbox and then you're done. Yeah. Yeah. And that was something my dad taught me. So I mean yeah this is this is how it works. That's what he would do. He bought now. You know there's a lot of people that Have made a lot of money that have said that with a depreciating asset just lease it and every 2 to 3 years you'll get a brand new. And if you have a lot of money that's probably not a bad thing to do if you

want a brand new car every few years. My dad bought a new car every 5 years. Right. And what he would do is the moment he bought that car, he would start making a car payment to himself to his bank account. Same way as if he was paying it as a loan, right? Only now That payment is going into the bank and he's being paid interest by the bank instead of the other way around and at the end of 5 years he takes that money and he buys the next car and starts the cycle over

again. Now, the question that is in everybody's mind at this point, well, that sounds great, but how do you buy the first one, right? How do you get there? And the answer to that question is real simple. You buy some really cheap shitbox And you drive a really [ __ ] piece of crap for 5 years while you're making those car payments. It's not hard. It's not rocket science. And then you never have a have a car payment again. Uh-huh. I love that. I love the way you describe a Honda Civic. Well, I have nothing

against Honda Civic. I mean, but I know exactly the type of car that you're talking about. Right. Right. But you're talking about a specific model of car that you Can literally drive into the ground. Yeah. Till the wheels come off. That's the Honda Civic, the Toyota Corolla, the Toyota Camry, and if you're feeling really spicy, the Honda Accord. But that's your piece of [ __ ] [ __ ] box that you Yeah. And and they're even more beyond that. Sure. You know. Yeah. Hyundai Elantre. Yeah. Let's get into the part. I hope Hyundai and Toyota.

Honda are all sponsors of the program. I would love for them to be sponsors of The program. And I think if they fully embrace that of like we will be the shitbox that gets you to financial freedom. If they'll do that, you and I will make a commercial for them. Let's do it. This episode of Hustamina Doesn't Know is brought to you by Booking.com. Booking. Whether you're planning a getaway for just you or the whole crew, Booking.com has summer stays across the United States to match every single personality you can think of. From light Sleepers

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I have $3,200 to my name and I don't want to pay Ice Cube to sing me Happy Birthday on Cameo. What should I do with that $3,200 that I have saved up? Let's start the journey. Well, starting there, clearly you have no Priorities. But if truly you don't want a higher Ice Cube, then the next best thing is it goes into VTSAX. What is VTSAX? It is Vanguard's total stock market index fund. Okay. It means that you now own a piece of every publicly traded company in the United States. And everybody in those companies from

the factory floor to the CEO is now working to make you richer. It's a broad-based every company low cost because it is index fund investment and that's that That's all you need. You don't need all those that complex stuff that Wall Street loves to talk about. Okay, but I have a boyfriend or I have a girlfriend and they're telling me I should get a financial adviser. I have a cousin that makes a lot of money on Wall Street and they're saying I need to go to Morgan Stanley. What do I tell those people? You tell

them that you're investing in the simple path to wealth, which is lowcost broad-based index funds. Okay? So, I open up my laptop. I go to vanguard.com or Fidelity. Okay. And then I just buy, right? I transfer money over in my bank and I just buy Absolutely. that index fund, right? VTSAX. Absolutely. And that's how many companies? It's like 3,600 companies. 36. It it varies, but it's every publicly traded virtually every publicly traded company in the country. Okay. And uh it's about 3,600. Now, why are index Funds so popular? Well, first of all, I they've become

more and more popular and I don't know that they're so popular. They're not dominant in the market, but because this is something that Jack Bogle created in 1975. That's when he started Vanguard. and he created the first index fund that retail investors, little people like us could could actually buy. And the idea was that the research had indicated then and it's been confirmed over the 50 years since That active management, which is paying someone to try to pick the stocks that are going to outperform out of those 3600 typically doesn't work and especially doesn't work

over the long term. So the research says active managers in a given year somewhere between 25 and 30% of them will outperform the index. But you go out 5 years that drops to I don't know 10 15%. By the time you go out 30 years It's less than 1% statistically zero. Okay. So let's talk about this idea. But I just want to double click on that a little bit real quick. So Jack Bogle, this guy in 1975 has this theory. Hey, if you hold right a large sum of these American publicly traded companies, you will

see better returns than all those guys that you see in the big short and those fancy Wall Street bros. You will actually outperform those people over time. Now, all I got to say to you is This. You obviously were working in corporate America during the 80s, the '9s, the 2000s. This guy in 1975 has a theory. There's guys right now in 2025 that have a theory. So this Jack Bogle guy, he's your messiah. What made him your messiah? Okay, great, great question. So 1975 just coincidentally happens to be the year that I first started investing.

And I had never heard then of Jack Bogle or Vanguard or index funds. And I would not have been wise Enough to embrace the idea if I'd heard of them. And the reason I know that is because in 1985, 10 years later when I did, I wasn't wise enough then to embrace them. I was an active stock picker. I was pinging actively managed mutual funds that were run by active stock pickers. I thought that was the way to go, right? And it took me another active stock picker means guy in a shirt and tie and

he's buying and trading based on what he sees on the little Ticker thing or in his sweatpants in his in his mother's basement today. That's Yeah, it's it's but he's a smart guy some sometimes, but they can be exceedingly smart. But it's a game that that is almost impossible to win long term and I played it for a number of years and pretty successfully. One of the things you need to understand is actually I achieved financial independence being a stock picker and by extension buying mutual fun buying Mutual funds that were run by stock pickers.

So it's not like it doesn't work if you do it well. The problem is it takes a lot of effort. Index investing takes virtually zero and it doesn't work as well. So if id embraced indexing in 1975, I would have saved myself a lot of effort, a lot of work, and I would be much further ahead of the game than I am today, even though it worked out pretty well for me. Look, I need to grill you a little bit more. Let's just grill it. Let's just let's put you on skewers right now and let's

grill it because if this is the moment to hold someone to the fire, it's a man named JL Collins who lives in Wisconsin. I'm feeling I'm feeling toasty already. So JL will I mean just give it to me straight up. What are the returns on VTSAX year to year? What are they? Oh, what what a question that is. When I was doing the first edition of the simple path to wealth and which came out in 2016, right? So I'm doing the final touches on in 2015. nice round 40-year period of time since when I started

investing in 1975, I thought, you know, I ought to go and and look that very thing up. And when I did, I was a little bit horrified because the results said that on average, it had returned over that 40-year period 11.9%. That is a stunningly high number and it was not a number I was prepared to put in the book and suggest that anybody Could rely on for their future planning. But nevertheless, that was what the market returned over that 40-year period. And this, by the way, was not some golden age. I actually wrote a

blog post afterwards called Time Machine and the and the future return of stocks. And the conceit of that blog post is I'm sitting around with some friends in 1975 around the campfire. Somebody says, "Hey, this guy Jack Bogle just brought out this index fund. I Wonder how that's going to work." I'm like, "I'm just back from uh 19 or 2015 in my time machine." And I can tell you exactly what happened. And they go through all the wars, the stagflation, the market crashes, you know, Black Monday and 87, the tech crash, you know, the 089

debacle. And everybody around the campfire is like, "Well, glad you told us that. There's no way we're going to be investing in this this index fund, let alone the stock market." And of Course, the catch is that Yeah, but if you had almost 12% a year. Fast forward now with the new addition out 50 years. Good thing to look up again. 10 years ago, by the way, everybody, including Jack Bogle, was saying, you know, returns have been so good. You gotta expect the next day decade is going to revert to the mean and maybe expect

like 4%. Exactly. Uhhuh. It was a great decade and most people listening to us are are aware that it wasn't a Smooth easy decade. It had a lot of challenges and yet it was strong enough that it pulled that average up over 12% a year for that 50 years. 12.2%. Dale, you got to stop. This is what I don't like. You're just being so calm and you're telling me everything's going to be okay and you don't get it. Every morning I check my phone and things are bad and you're not embracing that. That's number one.

Okay. So, this kind of like lullabyte to sleep is not the Energy I need. This little this book over here with Christopher Robin going to the 100 Acre Wood, you don't [ __ ] get it. Democracy is at stake. World War II is about to pop off and the world is about to [ __ ] crumble. That's number one. And you're not embracing that. Number two, you want me No, I don't need you to push back because really what I'm doing is I'm channeling the energy of every heterosexual man that's in their 20s and 30s.

You want me to be happy With a measly 12% on average return when I need to come up now? I need to come up now. Look at these returns. If I if I was dumb and I invested in VTSAX, I get 12%. But look, if 10 years ago, I go all in on the real stuff that makes the world turn. I just all I do is I hold Fang plus Nvidia, Meta, Amazon, Apple, Netflix, Google and Nvidia. I would have gone up 713% 873% 633%. 1,268% JL had I put my $3,000 into Nvidia I would

have gone up $26,29% in 10 years. So [ __ ] your 12%. JL, that's amazing. And if you had wings, you could fly. So what crystal ball did you have 10 years ago that told you that? I don't I I just Oh, whoa. Oh, I don't have one. Oh. Oh. Oh. Well, yeah. Obviously, if you knew that was going to happen, if I knew that Bitcoin was going to go from a penny a coin to $100,000, I would have sold everything and gone Into Bitcoin. The thing is, you don't know that's going to happen. And

there's a lot of stocks that looked every bit as promising as those that you put up 10 years ago that flamed out and went to nothing. you would have wound up broke. Here's a quick story. Sure. When I was dating my wife. Yes. Okay. She'd never been to the horse races before. Okay. I My dad was taking me to the horse races when I was five. Yeah. And I was going with some clients and and their wives And girlfriends and so I invited her to come along. She didn't want to come. You never been. Said

just come along. It'll be fun. Nice people. Yeah. You know, well, how do I bet on the horses? I said, I don't know. Bring $20. You're you're going to lose it anyway, you know. and then pick the horse that looks good. You like the colors, you like the whatever it is because you're going to lose your money. It doesn't matter. Yeah. So, we go, she looks at the Program and she picks this horse randomly. Very long odds, you know, like 30 to1 or something. But you've already established the premise. Take 20 bucks, you're going to

lose it, but do it just for the fun. It's got zero chance of winning this horse, right? And and your your beautiful wife, she is having a vibe. She feels like that particular horse is going to win the whole thing. Right. I don't even remember why. Okay. Right. But nevertheless, that's a horse She put her $2 on. I figure, okay, this is going to be her first lesson in reality. So, we're down at the wire. We're at the fence. We're watching the horses come around into the final stretch. And guess what? Old paint or whatever

it was comes from the back up in the outside and wins. Sick. And she is beyond excited. Amazing. She's jumping up and down. And when she settles down just a little bit, she turns to me and she says, "Why didn't You tell me to put my whole $20 on that horse?" I said, "Jane, because I didn't know it was going to win. If I known it was going to win, I'd have mortgaged the house. You don't know which horse is going to win. But I do know that VTSAX will reliably make me wealthy. And 12%

a year, compounded over time, 8% a year, let's be much more conservative, compounded over time is an extraordinarily powerful thing. What about, you know, all jokes aside, The reason why I put up Facebook, Apple, Netflix, Google, Amazon, Nvidia is a gut feeling. What about that gut feeling? You know, technology is something of the future. So, why not kind of spread it across the just the tech sector? Why hold it over 3,600 companies when tech is kind of carrying the majority of it anyways? Yeah. So, that's a great question. So an index fund today like VTSAX

is well it's always cap weighted and That simply means that the larger the company the greater percentage of the fund it represents. So right now as you point out tech companies have done great and so it is heavily loaded with those companies and one of the criticisms is that you know it's really just a tech fund now because the performance from VTSAX has been over the last I don't know how many years has just been because of these these magnificent seven and that's absolutely true but that's a Feature not a bug because one of the

few advantages of being an old guy like me is that I can remember it wasn't always tech companies at the top. I can remember when it was financial companies. I can remember when it was energy companies. I can remember a time when it was consumer staples because that top sector rotates. I have no idea how long tech is going to dominate just like I don't know how long Google is going to is going to be a powerful Company. But what I do and I don't have to worry about it because if and when it rotates

out, I will own whatever comes up to replace it because that's the beauty of an index fund. It's a process that I call self-cleansing. It applies to the individual companies. So when Sears fell on hard hard times and rotated out, I didn't have to worry about it because I already owned the Amazon and and the Walmart and what have you that were coming up to selfing means As the poorer performing companies fall out of the topund. Exactly. And then the top companies now emerge. So you're always holding the the leaders of the pack. And here's

the rigged part of the game, right? If you have a stock that fades like Sears, what's the worst worst that can happen? Absolute worst is lose everything 100%. Yeah. As Amazon comes up, what's the best that can happen? Can it go up 100%? Yeah. 200? Yeah. 300, 1,000, 10,000%. Or as we see with Nvidia, 26,000, right? So, it's it's and then you own those regardless. But the problem is you don't know which of those companies is going to is going to do that because you don't have that crystal ball we talked about earlier. But you

don't have to know because if you own the index, you Well, there's two problems here, which is number one, I don't have the crystal ball. Nobody does. But number two is I also because of my internet addiction, I have the Memory of an earthworm. But I do see a lot of news stories every day before I kiss my spouse. And one of the things that I've been heavy in in both my group chat and the news is crypto. Bitcoin has had a 82% year-over-year for the past 10 years. We know what's going on with the

US Federal Reserve and the United States. Why not start allocating some serious capital into Bitcoin? So, um, it depends on whether you're a Speculator or an investor. Well, in this case, I want to consider myself to be an investor and I'm asking you, is Bitcoin a good investment? No, it's an it's a speculation. JL, I don't I mean, I love you, man, but you're going to get lit up on the internet. You need to not say this. Well, I'm sorry, but but you asked me the question. I can only give you the answer I have.

So, let me explain to you what I mean. Right. So, Bitcoin, as I said earlier, if you if you bought bit Bitcoin 10, 15 years ago, it you've done magnificently well. I mean, who wouldn't want that? I wish I'd done that. I I I didn't and still haven't. Right. But that's not the question. And the question is where does it go from here? It's at 100,000 or somewhere around. Right now we're talking it's at 100,000. And when when I was talking to the boys in the group chat it was at 13,000. Yeah. And look at

me. Yeah. But that was then. This is now. So where does it go from now? Where's getting made fun of JL and that's what you're not understanding. And I live with regret and they're roasting me and they have laser eyes and like you dumbass. Yeah. You're out here podcasting and doing ad reads when you could have gone all in on Bitcoin and 10xed it. Yeah. I think you've confused me with your psychiatrist. I can't I can't help you with the fact you're being made fun of. All I can All I can tell you is that

when you look at Bitcoin, it's a speculation. So, it's not a currency. It's way too volatile to be a currency. A currency requires stability. That's why inflation is such a bad thing and deflation for that matter. If you can't rely on a currency having a fairly consistent value, it doesn't work as a medium exchange for goods and services. And maybe crypto Will get there at some point, but right now it's not. Okay. All right. So, it may Let me finish the thought. Sure. So, it's a speculation in the sense that like buying gold, like buying

uh uh exotic cars, uh collector cars or artwork or anything like that. When you buy crypto, you are saying, I am hoping and expecting that somebody at some point in the future will pay me more for this than I paid for it. In the case of Bitcoin, that's been a pretty good bet. Although, it's been a very wild ride. Anybody who's who's actually tracked it, you had to endure some pretty dramatic drawdowns at various points. But nevertheless, that has worked out. Not all speculations work out. Just like your list of of companies up there, right?

They don't all work out. You don't have a crystal ball. You don't know where it's going. That's a speculation. An investment. Something Like BTSX, which is in all those publicly traded companies, those companies are all filled with people actively working to produce and provide products and services for people who want them. And if they do it well, they will make money doing that. and as part owners of those companies, we benefit from that. They are creating wealth. They're not relying on somebody saying, "Yeah, someday in the future, maybe somebody will pay me a little bit

more For General Motors." What they're saying is General Motors, if they operate the company well, will continue to make products that people want to buy, and they will continue to build value and make profits doing that. And that will cause the stock price to go up. And if they don't do that, then they fade away and they're replaced by Toyota or Tesla or whoever. How would you feel if you found out that you've been having the fake version of something your entire Life? Outraged? Angry? Well, get ready to get mad because every cup of chai

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You can make it at home in minutes. It's the only chai that's allowed in the Minhash household. All other chai are forbidden. Head to kulkarachai.co/hustson to grab your first cup and two free gifts on me. I have a buddy, his name is Pashant and Pashant listens to a lot of podcasts and that means he has to be smart and you've met him. Yeah. He sent you an article recently that the S&P 500 could be its own bubble. Check this out. I mean, this is pretty recent. Bank of America says growth stocks are in a bubble

exceeding the dotcom and nifty50 eras and warns they could take the S&P 500 down 40%. What should I say when he sends me and you articles like this that hey the S&P 500 VTSAX that could be a bubble and That could crash. So the first thing you should say to him is have you read the simple path to wealth? Because if you had you will understand that that is a per crashes like that are a perfectly normal part of the process. They are to be expected right since I've been investing and it's been 50 years.

God help me. But there have been three of them that have gone down more than 50%. What are the three that happened? So the three there was 1974 Which is actually the year before I started but it bled over into 75. There was a tech crash in 2000 2002 and there was the debacle in in 089 and tech crash went down I think 46% and 56% and 089 right and of course everybody thought the damn world was ending and it didn't but if you're going to invest in stocks for the long term you never know

when those things are going to happen we thought they were going to happen in co some people think they're going to Happen triggered by the tariffs didn't happened with CO. Who knows about the tariffs? But you're never going to know for sure when they're going to happen or how long they're going to last. You have to tie yourself to the mast and use the opportunity while you have it to acquire shares at bargain prices. You know, Warren Buffett said one time that every now and again there's going to be really dark clouds out there and

it's going to be rain. It's going to begin raining gold and you want to be out there filling filling your buckets because that's the opportunity to buy at at the best possible prices. But the thing is, we don't know exactly when that's going to happen or where those prices are. Really, what I'm hearing from my friends, even though they've read the book, there is an underlying fear of the present moment. You don't get it. This time it's different.org. Mhm. Right now, Donald Trump is president. He may become president for a third term. World War III

may pop off. AI is going to take over. We're going to have a even greater depression. The greatest depression of depressions, the greatest depression of all time. And that's why I need to maybe consider not putting my money into VTSAX or investing at all. M what do you say to those people that say this time it's Different right now there's there's no scarier time to be alive than right now. So let's let's take a real life very recent example of that. Right. Okay. Co Yes. All right. Just a few years ago my social media my

blog was lit up when CO hit. Yes. Of course. And they were saying pretty much what you just said. They were saying jail I've read the simple path to wealth. I accept it. I buy it 100%. But truly truly JL this time is Different. It is different. This time is people are dying. Airborne virus killing old people. Yeah. People people are dying. Right. And not only that but countries are shutting down their economies completely. This time surely it is different. Right? And what I said then and I say now is that yes and no. This

time is different because anything that triggers a crash is by definition different. It's especially tragic that people were Dying. But it's not different in what the market is going to do. The market is going to react. It's going to panic. It's going to crash and then and sometimes this takes well in co case of CO it took a matter of weeks but more often it takes months or sometimes even years. it turns around and it continues to set record highs. You can look at any chart of the market's performance over 100 years. You can see

this. You can see it in the Great Depression. So, the Trigger is always different, but the pattern is always the same. Now, the next question is going to be well JL what if one day it's not? Yeah. All right. Well, let me finish. Let's let's suppose that you know CO killed a million people in the US. tragic number but there are 330 million people in the country very small percentage but let's suppose CO had been much worse let's suppose CO had been like the black death in the middle ages Let's suppose CO has killed 50

or 60% of the population yeah worldwide oh my god I mean that would be crazy that would be a civilization ending event correct and absolutely at that point the simple path to world wealth no longer works but neither does anything else. It's not going to matter at that point where your money is. Our problems will be so much beyond where we are invested. So you have to look at it. You say, do I structure my investment portfolio or try To against that Armageddon kind of event or do I structure it for the 99% chance that

it's not going to happen? Okay. In 1963, I was 13 years old. It was the Cuban missile crisis. Yes. As far as we know, the closest we've ever come to a nuclear war. Civilization ending event. You know, the US and and the Soviet Union start throwing nukes at each other. It's game over. Nothing financial is going to work at this point. At the time, as young as I was, there were two Commentators on on TV and the one guy was saying, you know, this really looks like it's going to happen and I'm I'm getting out

of the damn market. It's going to be terrible. And the other guy said, "You know what? I don't know, but I'm buying. And the reason I'm buying is cuz prices are down. And if they start throwing the nukes, if that happens, then it doesn't matter." Got it? If they don't, the market's going to recover and go to great high. What's interesting is That I've felt that before, too. Let's talk about that guy. The guy who goes, "I'm buying the dip." Yeah. So, what if I just time my life that way? Oh, it's it's down. Let

me dive in. Yeah. Then when it's up and skyhigh, I'm out. I'll sell. Yeah. Right. And then let it dip again. So almost play double Dutch. Oh wow. What a great idea. Why didn't I think of that? So here's the problem. How how far is down? I I just I know when when it says it's it's crashed when dozens of percentage points on the news. Yeah. But when and when does it turn around? How high is up? Right. I mean the problem is you don't know that. So let's look at CO again, right? So, CO

starts dropping and it it crashed pretty quickly and it dropped as I recall like 33% in in a matter of days or a week anyway, right? Nobody including me saw that it was going to immediately turn around. Yeah. But so if you were planning on doing what you were just describing and you're watching that dip in CO, do you pull the trigger at 30%. Or do you say no, no, it's going to go lower? And if you wait too long, then you miss it and it goes back up and you have you missed the ride.

In 2023, yes, you wrote a blog post called Why Your House is a terrible investment. And then you hit publish. Half the internet turned on you. Two questions. Number one, why do people get So worked up about this issue? And number two, why is my house a terrible investment? So, actually, I wrote that post originally in 2015 and uh the team updated it in 2023, I guess. But your house is a terrible investment because it's it's basically is not an investment, right? You shouldn't think of your house as investment. Sometimes it works out, goes up

in value, but it's a place to live. It's a lifestyle choice, right? So, you need to separate In your mind uh what an investment is and and what a house is. So, you know, when you invest in a house, you're taking on enormous expenses. You've got your mortgage, which everybody thinks of, and they say, "Oh, you know, I can buy this house." and the mortgage is no more than my rent and they're forgetting conveniently about well there's real estate taxes, right? And then there's all the maintenance and repairs on it and you going to buy

the house and not Remodel the kitchen. You're never going to remodel the kitchen in your apartment, but you know, very few people buy a house and don't start immediately changing it. You're going to buy furniture for it. You're going to buy appliances for it. It's never ending. And all that's fine. You know, monies can be used for a lot of things. I've owned houses most of my adult life. I'm not saying don't own a house. I'm saying don't confuse yourself thinking it's an Investment. Your house and my house are both actively trying to return to

dust in the earth. Right? And we have to spend copious amounts of time and money preventing that from happening. But what about I'm building equity. Why should I give that money to a bank? And what about the idea that what are you telling millennials to do? Just own nothing? Millennials and zoomers should own nothing and let Black Rockck have all that money? Oh, I'm not saying you Should own nothing. I'm saying you should own assets. You should own VTSAX. You know, my daughter, you really believe, you're telling everybody on the internet right now that's my

age or younger, VTSAX and rent? Yes. And that's what I tell my daughter and that's what she's doing. She's in her early 30s. She just quit her corporate job uh last fall. I don't know if that's permanent or or if it's just a temporary IAS, but she at least has [ __ ] you money the way We defined it earlier that she can make that kind of bold decision because she didn't make any silly decisions like buying a house and becoming house poor and being dependent on a paycheck to pay for all of those things.

So yeah, building wealth is your key goal, then no, owning a house is is not going to contribute to that. If on the other hand, you want to own a house because it'll provide a certain lifestyle that you're you find desirable, maybe a yard For your kids or whatever, then that that's great. That's a lifestyle decision. It's not a financial decision. Don't confuse yourself. I want to close this out with a very simple story that you open the book with. It's the parable of the monk and the minister, right? I think there's no better way

to end this conversation than with that parable. Yeah. Can you take me through that just to refresh me and the audience? What is the parable of the monk and the minister And why is that so important given everything we've talked about? Yeah. And given our conversation, I think it's a it's a great great one to end on. And I didn't know that's where you were going to go. So the parable basically says, you know, they're two boyhood friends and years later they they've lost touch and they they meet on the road and one of them

has become a humble monk and the other has become a very rich and powerful minister to the king and They're catching up, you know, old times and what have you. And and while they're they're having this conversation, the minister, the king, is feeling kind of bad for his his humble monk friend and his tattered robes and his his begging bowl. And and at one point trying to help, he says to him, "You know, if you could learn to cater to the king, you wouldn't have to live on rice and beans." To which the monk replies,

"If you could learn to live on rice and Beans, you wouldn't have to cater to the king." And that's the spectrum. And I think there's a lot of life satisfaction and power, frankly, in being closer to the monk than the minister. Jail. Um, money and finances have been something that were often times fearinducing and very painful for me growing up. And I happened to learn about you through this amazing Book. And it felt like when I was reading your book, you became my friend and then I got to be your friend in real life. So,

I just wanted to say thank you so much for writing this book and being my internet friend and now my real life friend. Well, thank you uh Hassan for having me on the show. It's it's I've really look forward to this and I am honored to be your friend as well. It's uh it's it's wonderful to have you in my life. Thank you so much for doing this. Yeah, my pleasure. Anytime. [Music] Man, you're tough. Jins, ladies and gentlemen. Holy. Holy [ __ ] I feel like I've been beaten with sticks. [Music] [Applause]