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Darius Foroux On The Stoic Path To Wealth (Episode 141)
751 Plays4 months ago
Should Stoics become rich? What is your relationship to money?
Caleb speaks with Darius Foroux about his new book The Stoic Path To Wealth. They discuss a practical investment strategy and how Stoics should think about investing.
https://stoicpathtowealth.com/
(00:50) Darius's Story
(04:32) Stoicism
(11:51) Your Relationship With Money
(22:37) Becoming Rich
(34:25) Avoiding The Sidelines
(42:07) The Miracle of Compounding
(50:02) Role Models
***
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Thanks to Michael Levy for graciously letting us use his music in the conversations: https://ancientlyre.com/
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Transcript
Is financial survival tied to lifestyle choices?
00:00:00
Speaker
financial survival, I feel is a bit overdone for most folks. The problem is that they want to have a certain lifestyle. And the fear is, what if I can't maintain this lifestyle and yeah My solution is to not have that lifestyle.
Introduction to Darius Furo and his Stoic investing journey
00:00:22
Speaker
Welcome to Stoa Conversations. My name is Caleb Bontagromis, and today I'm speaking with entrepreneur, author, and podcaster Darius Furo. We'll be focusing on his most recent book, The Stoic Path to Wealth, a sensible and useful introduction to both investing and stoicism. Thanks for joining.
00:00:48
Speaker
Thanks for having me. Awesome. Well, let's start with this broad question. What's your story? Yeah, that's a broad question indeed. But um yeah, my story story about investing starts in 2007. And my story about stoicism starts in 2000. 14-15. The first time I bought stocks I was 20 years old and I was studying business and I had the opportunity to work during my evenings at the ING, the Large International Bank, and after a while I had the opportunity to
00:01:37
Speaker
get on their investment side to become a mutual fund advisor. And remember, this is before a financial crisis where all you had to do was take a four week training and then you could become a advisor. And I thought I was this investing genius and I've always been passionate about the stock market. So I thought, you know, this is the perfect opportunity for me to buy because I work at a bank and that was my only strategy. within the year I was down 60% because 08 crash happened and I had no clue what to do. So I was really committed to figure it out. And by it, I mean how to make money in the stock market.
How did personal challenges lead Darius to Stoicism?
00:02:21
Speaker
So I got on this education spree, got a degree in in business and specialized in finance and
00:02:30
Speaker
still couldn't invest. I was still ah too scared, you know, because I finally sold my stocks in 2010. And then ah within a few months, the stock market went on the stair that lasted basically until 2020. And I always felt like I missed out, but I didn't have a framework or I didn't have the confidence to come back to the stock market until I discovered stoicism, which was around that period of 2014-15 when I was, like so many of us who discover the Stoics, I was going through some challenges in my personal life. My grandmother passed away, my relationship ended, and I wasn't happy in my career at the time. I was climbing the corporate ladder in London at the IT research firm.
00:03:24
Speaker
And I started to turn to books for the answers about what to do and how to get unstuck. And I discovered stoicism in Tim Ferriss's book, the four hour workweek. He had this small section on stoicism and I thought, wow, this is amazing. So I started to read the original works and I immediately bought everything that I could find from meditations to Epictetus discourses and Seneca's letters.
Stoicism's practical application in life and investing
00:03:57
Speaker
And it's funny because from the moment I started reading Stoicism, I instantly thought to myself, how can I use this to become a better investor? And yes, from there, I really went on this this whole writing spree and writing books. and
00:04:19
Speaker
finally finding my way back to the stock market. Very nice. So how do you describe stoicism? yeah How do you understand it, boil it down into that, you know, that elevator pitch? Yeah, for me, the way that I explain it to folks who never heard of it is like this, like I always say stoicism is the most practical philosophy because you can summarize it in one sentence. which is simply focus on what you can can control and ignore everything else. And to be honest, it's not just something that I say on non stoicism podcasts. It's really something that I really live by because for me, it's really something that helps me to stay grounded, not only during personal challenges, but also
00:05:13
Speaker
when it comes to my career or investing and relationships and everything. So that's how I looked at it from the beginning and still look at it 10 years later.
00:05:30
Speaker
Yeah. It's one of those essential ideas that's immediately useful, yeah but also has some amount of depth to it. I think that you can keep on returning to, you know, what is under my control and what does that mean to say something's up to me? Uh, and so on. Yeah, exactly. That's the funny thing is it's just one sentence, but it's application is endless and Still to this day, I run into situations where I think, oh wow, I never really applied it to in this area. um For example, in the last year, I've had a little bit more back issues than my entire life. I've always had some back issues because I used to play basketball in college. and
00:06:27
Speaker
I had this kind of severe injury at some point and when I was, I think, 18 or 17. And since then, it always haunted me. It kind of comes and goes. But over the last year, I think as a combination of sitting a lot as a writer, um working out a lot as well to kind of combat that, but maybe going a little bit overboard, not having real balance, working out too hard. um So overstressing my body, but at the same time also sitting too much, not enough flexibility and stretching. So, or last year I had more of these issues and every time,
00:07:17
Speaker
my back hurts, it know it's always at the wrong time. When I'm in the middle of remodeling my house or when I actually last week when I was doing a lot of these interviews, I also kind of hurt my back picking something heavy up. And um during those moments, I think, um at why me, you know, like the classic, why do I have to be that guy who always has back problems and I was talking to someone about this and the thing that I often return to is that Epictetus quote where he says look at life as a play and you're you're given a role and you have to play that role to your best ability in that sense and that's something that I really that took me a while to really understand and apply in certain areas because
00:08:17
Speaker
The guy that I was talking to said, yeah, well, but I know a lot of folks who who live in certain underdeveloped areas and apply that philosophy and always stay where they are. And I said, yeah, that's true. But the beauty about stoicism is that you can be very selective about how you apply the advice. It doesn't mean that one piece of advice is universal. You could apply it to your health problems, but not apply it to your career.
How does Stoicism influence dialogues and philosophical insights?
00:08:47
Speaker
And yeah, that's one of those things that contributes to the fact that you were never finished learning about stoicism and also never finished talking about it because through talking, you uncover new applications.
00:09:07
Speaker
Yeah, that's a great point. It's through the discourses, lectures, conversations like these, listening to other conversations. um that one uncovers so many philosophical insights or applications of philosophy. I suppose it's it's no accident that Socrates' works were dialogues with other people. I think it's it's essential to the activity of doing philosophy that it's done with others. Sometimes perhaps that's that's overlooked when you're yeah you know reading by yourself or
00:09:40
Speaker
Yeah, that's a great point, actually. That's something that but yeah until recently, and I never really thought about because through those conversations, you also uncover new things inside you that you are now forced to articulate. But also through ah certain questions or Maybe someone else trying to challenge your ideas or see how you respond is also quite beneficial. So um yeah, I totally agree. It's a great practice and and doing philosophy is definitely a thing that me as an introvert and as a reader never really, well, I won't say never, but
00:10:35
Speaker
often underappreciated. And especially now that I'm having a lot of conversations around stoicism and investing, i I see the benefits, not only to kind of spreading the word and hoping to reach more people, but also as an emotional practice for myself. So yeah, I can say that um ah Until now, I haven't been tired of talking about it, you know? That's great. Yeah. And it it is so useful. And
Stoicism vs money: Is virtue more important than wealth?
00:11:14
Speaker
as we were saying earlier, there's both, I suppose that depth of some of these stoic teachings, maxims, what have you, and then also that point that.
00:11:26
Speaker
often will come to stoicism. People who discover stoicism find it's useful in one area and then move to another area and find that it's ah applicable in that part of their life too, whether it's dealing with injuries, thinking about one's career, or as you write about in your book, investing. ah Exactly, yeah. So what then is the key ways in which stoicism is relevant for ah investing?
00:12:02
Speaker
Yeah, I think the most impactful way that I can describe that is by the relationship that you have with money. Because through reading stoicism, I learn to become indifferent to money and outcomes in my career, but also with investing. And because of my childhood growing up in a family where we were living from paycheck to paycheck, I always had this ah so scarcity mindset where I believe believe that
00:12:50
Speaker
You need to hold on to every dollar that you earn because it's not coming back. And I've kind of went through my life and career that way thinking that the key to becoming wealthy is just to hoard money. And that causes a lot of fear and tension and This is why what I was mentioning about the moment that I started reading Stoicism. I instantly related it to money and investing because that was my lifelong pursuit to become wealthy because of my childhood, because I said, when I grow up, I don't want to be in a situation where I have to worry about money again. So that was my goal in life to become free.
00:13:47
Speaker
and not just to buy cars or whatever or any material things. that I always had that sense from from early on, so I never got on the hedonic treadmill. ah But on the other side, I wasn't sure how I could really grow my wealth or the bit of money that I did save and in the early years of my career. And when I read the Stoics, one of the first things that I ran into was, again, an Epictetus quote, where he says, you know, if you can pursue money staying honest or virtuous or can't remember exact words, but he would say, by all means do so. But of course, the most important thing is virtue and being, being honest and not letting
00:14:44
Speaker
the um the pursuit of money impact your decisions in life and not letting greed get to you and and those types of things. So I thought, wow, this is really fascinating because here's a philosopher who's known to be very stringent, living a very simple life, saying that money is not bad. It's what it does to people. So if I can make sure that if I just stay on the path, stay balanced,
00:15:15
Speaker
I could pursue money. And then another thing that I read that I found really helpful was the whole thing about indifference and ah related to the things that you can't control. And then I thought, okay, I can control my effort and how hard I work because that of course will determine my income to a certain level, but I don't control the stock market, or if I invest in real estate, real estate prices, or if I start a business, I also don't control how many people end up buying. like Of course, I'll control my effort and what I put into it. But the exact outcomes, that's that's not within my power. So I should be indifferent to that.
00:16:13
Speaker
And that gave me the confidence and ah almost the approval to just focus on the craft and focus on the process. And once I started doing that, I really started to look at investing and life and and my career just in a different way, because when it came to investing, I finally thought to myself, okay, why not just simplify this thing to the core where it's impossible to simplify it even more. So like a common investment piece of advice is to invest in the S and&P 500 index. This is the piece of advice that Warren Buffett gives. And John Bogle, the founder of Vanguard, he he kind of revolutionized this passive way of investing. And for the folks who not aware who are not aware of the S&P 500, right? this
00:17:11
Speaker
500 largest companies in the US that are active in almost all industries. So you kind of get a real good exposure to the entire economy. So as long as the economy keeps growing, the index keeps going up and basically just ignore everything else. like don't spot ah
How did Stoicism shape Darius's career and writing?
00:17:30
Speaker
don't um Don't poison your mind with all these get rich quick schemes and crypto and gold and whatever futures and
00:17:43
Speaker
Forex and all of this nonsense that you see on social media, which can work for some people because that's kind of the law of averages. And if enough people trade those things, there are always a few winners, right? And then you'll hear about those. So I never say it's impossible, but of course it's possible to make money with those types of pursuits. But the odds are against you. And as a stoic, I don't like it when odds are against me. I just prefer to choose a more proven path. So that's how I came up with the idea to real simplify everything, not only in my investments, but also in my career. Because at that point I was like, yeah, what should I do? I want to quit this career. I had i ah started a business previously with my dad. I didn't love the industry. So I thought, oh, maybe I should, you know, go work for a corporate, for a large company. and
00:18:42
Speaker
I wear a suit and all of that stuff. And I was like, yeah, who cares? I don't want to climb the corporate ladder. It's also not for me. I don't like to be around a lot of people. So I quit and I'm like, okay, I need to start a business for myself. What kind of business should I start? And then I thought, okay, now I have this opportunity. I'll move it back in with my parents and let me write a book because I've always loved the idea of becoming a full-time writer. I never had anything to say and I also didn't think it was a path to building wealth because I always thought, oh, you need to make a lot of money to become wealthy. But yeah, somehow all of everything came together during that period. And I said, okay, I'm going i'm going to write this book.
00:19:35
Speaker
And at the same time, I was studying, and of course, still I was studying investing, but also the stoics start to slowly put things together. And that, that actually took a while, like a year or two, but I finally started to think about how I could apply this to still my investing strategy. But I said, okay, I'm going to write this book and then I'll see what happens. I'll put it out there. I'll put everything, all my energy in it. And, uh, I started a blog and then within a few months, I started getting emails from readers and kind of getting that feedback gave me a lot of confidence. And also it it gave me input that I was on the right track. So I basically just kept going. And um yeah, that's what really changed the everything. I think not only in my career, my life, but also ah finances because I realized, okay, if you do the right thing, if you're patient, you focus on your actions,
00:20:35
Speaker
ah you give up your unhealthy pursuit of wealth, you can become wealthy if you're not rich, if you know if you're not if you don't make a lot of money. And yeah, that the that's something that took a lot of took a lot of the pressure away. Yeah, that's great. There's that common thread between the investing path and your career path, which was patience and consistency. So having the patience just to put you know a little bit of money each month, whatever it is, into an index fund while you know you see other people taking riskier bets. Some of them, I'm sure, pay off and they always
00:21:25
Speaker
cause one to have that fear of missing out. But so you know sticking through to that patient consistent strategy ah pays off both, I think, in the domain of investing, but also in careers. So I think writing is a good example of that. where many writers have been at it for decades and you know they slowly saw whatever it is, their readership, views, success go up at a pretty slow rate usually. It's not the kind of field where people very few people blow up. It demands patience and consistency that can be difficult. And that's what' something that stoicism can help with. Yeah.
00:22:09
Speaker
Yeah, that's actually a good point. It's a perfect philosophy for people who who are in careers or have a desire to do something that requires a lot of patience, like writing, art, anything creative um that has a payoff down the road. And until you get there, you need this system to stay focused and not give up.
00:22:37
Speaker
Yeah, absolutely. I think you said something else that's I think a crucial point, which is that for the Stoics, wealth, money, it's a preferred and what they call a preferred and different.
Is honest wealth accumulation possible with Stoicism?
00:22:51
Speaker
So it's beneficial if you have it. but you never want to sacrifice it for virtue. It's not needed for the good life. you know what The good life consists of you being virtuous or playing your roles excellently.
00:23:12
Speaker
And so then it has that aspect where it's not consumerist, materialist, you're not devoting your life to becoming wealthy, but it's also not ascetic or doesn't retreat from yeah know that the economic world. Some people, because of who they are, their relationships and so on, maybe pursuing wealth isn't that important. For others, because of who they are, relationships, talents, it might be more important and something you know they ought to do their best to pursue.
00:23:47
Speaker
so long as they don't do so at the cost of virtue. I think that's an essential point because some people might wonder, you know why are you talking about investing, becoming rich, becoming wealthy on a stoicism podcast? ah I think because for some people, it's i mean well for all of us, it's an essential part of our life and to some degree, some of us are going to be in situations where we ought to devote ourselves to that project. Others are gonna be in a different situation, but all of us are gonna have financial obligations, and you know that's just one other area where we can display virtue. Yeah, 100%. It's all about how you pursue the goal. um I think it's natural to think there is a,
00:24:40
Speaker
Conflict there and in fact, I saw I've seen a lot of folks on reddit having these conversations around money and stoicism and Some folks I think when they start practicing it can can be against it, but that's also not a stoic thing to be against something, right? In in my interpretation,
00:25:15
Speaker
the the stoics were not necessarily against certain things that were just more indifferent to it and i say, okay, oh if you want to pursue money or pursue wealth or whatever, if you think that's right, then you know who am I to tell you that you are wrong? When it comes to my life and the way that we look at life, we say, you know, money is something that we need. It's something practical. But at the same time, I'm not going to destroy my my philosophy. I'm not going to give up my values just because I want to have more money. And that's that's how I look at it. And I do think that the
00:26:02
Speaker
people who get some success. And I think it's easy to to look at this and in the field of writing or advice or self-help, whether it's on people who have big Instagram or YouTube followings or any yeah and any social media, or they're big in a certain area, whether it's I don't know, mindfulness or business or so or or stoicism. Sometimes I do see like I don't want to be that guy. So I do get that resentment or kind of kind of get that. OK, you know, like being so obsessed with money and trying to squeeze.
00:26:54
Speaker
every penny out of your audience or customers or whatever it is seems dishonest. And that's why I always return to that Epictetus court. I feel like making money should be done in an honest way. And I genuinely believe that not only because it can bite you later on, can come but back to you. Because I think that a lot of dishonest people just can get away with it. And, you know, especially in this crowded world,
Ethical practices in business through philosophy
00:27:30
Speaker
you know, a lot of folks got very rich with these pump and dump schemes in crypto and actually are are still doing those things. Or a lot of folks in entrepreneurship, social media world,
00:27:51
Speaker
have these techniques where they aggressively d or aggressively respond to anyone who DMs them with a question. I've had like readers reaching out to me saying, yeah, you know I kind of fell for the tactics that soand-s so-and-so's team performed on me. And I think that that that's kind of a trap that these folks, maybe they start out with the right intentions, But along the way, maybe money comes, fame comes, recognition comes, any of those things that the Stoics warned us for. And they kind of ignore the ah the platitudes of life, which are always true, to not be greedy and not chase pleasure. And then over time,
00:28:49
Speaker
they kind of fall in that trap. And I feel like that's something that you can ah prevent by just prioritizing philosophy over money. So yeah, I think i think that that's the the best place to start. And if you have that that approach, you also will be more indifferent to the money that you've earned because you think, OK, of course, this is important. I worked for this. And then let's say you invested and the market goes down. If you are not stoic, then you're you're thinking to yourself, oh OK, what will happen?
00:29:31
Speaker
maybe I should sell, maybe I should stop the pain. And then kind you you take away a lot of the future wealth for yourself. And ah that's just one example. But yeah, it's so it's such a complex relationship that I think um we should always should always approach with stoicism in mind because like I really don't want to be that person who just becomes materialistic. and
00:30:08
Speaker
Let's say, because you never know when your career. right Let's say you you do what you have and any creative pursuit or ah you you are just professional pursuit and you but you get acknowledged. Let's say you're a designer, you get a acknowledging design community, a feature on a magazine or whatever. And like those things can get to your head. And that those, those are the things that I always kept in mind too. It's like, okay, maybe one day something like that will happen. If it happens, I need to have the framework. I need to have the philosophy that keeps me grounded.
00:30:53
Speaker
Yeah, absolutely. Seneca has this line where he says something to the effect of, you know, cling fast to these three rules. Never give into adversity. Never trust prosperity and treat fortune as if anything that, you know, can come to pass will come to pass. yeah And I think, of the yeah, it's ah it's like a great set of three rules. I think what it would pulls out in this context is,
00:31:24
Speaker
yeah know that that point of never trusting prosperity. Success has risks. The pursuit of success has its own kind of risks associated with it.
00:31:35
Speaker
But the Stoics you know also are know that poverty has its own kind of moral risks and people in those situations have have different temptations from you know the rich. And that's just something that depending on where you fall, you know you'll need to face the risks that come with that that situation. um So it's it's certainly an issue one one can't escape.
Can simple lifestyles ease financial anxieties?
00:32:01
Speaker
yeah Yeah, definitely. Poverty also has its As risks, as you say, um I think when it comes to frugal living, and of course that's not the same as poverty, but I think you can also be overly frugal. And especially when you are too attached to money, that you just, you know your world revolves around money.
00:32:35
Speaker
And then you forget that, oh, I'm doing the exact thing that I was afraid of. Like, I don't want to be that person who's money hungry, but now all I'm thinking about is money. And that that's something that I've seen in my family too, and some with with some family members. And and I see that and I'm like, okay, you're actually doing the thing that you don't want to be. And I think so like in those cases, we forget to be indifferent because in today's world, I feel if you have a strong skill set or not even a strong skill set, do you know how to provide value in the economy. And that doesn't require a lot of skills in today's world.
00:33:26
Speaker
You don't have to be the best. Of course, it's better to be ah really great at what you do. You'll get more rewards. But um bottom line is that we can earn a living. So having a a lot of fear around earning a living and around financial survival, I feel is a bit overdone for most folks. The problem is that they want to have a certain lifestyle. And the fear is, what if I can't maintain this lifestyle? And and my solution is to not have that lifestyle.
Investing with Stoic principles: How to participate in the economy?
00:34:12
Speaker
Yeah,
00:34:15
Speaker
yeah it works. um So I suppose when you're thinking about stoicism and investing, it can be helpful to think about what's the opposite of a stoic investor. And we've mentioned some common patterns. Some people, they're too greedy. Maybe they make and investing too much of a, or financial matters, too much of a priority in their life. yeah um But another one that you've mentioned I want to make clear is that they just don't invest. You're afraid of investing because you're afraid of loss or something of this sort. yeah I wonder if you could say more about that. Yeah, that's actually yeah that's ah very true because there's this
00:35:08
Speaker
idea with a lot of people that investing is either for rich folks or something that they will do when they earn a certain amount of money. Or they think it's for Wall Street. It's not for me. I'm bad with money. I'm bad with numbers. And they have these types of false beliefs. And I think that's a shame because I have no incentive to promote the S and&P 500 other than, of course, I invest in it. But the the index will keep going up whether we will invest in it or not because it's driven by the economy and institutional investors because I think it's the the ratio has changed now. There are more individual investors than, let's say, 10 years ago. but
00:36:09
Speaker
institutional investors still make up for like somewhere between 60 to 70% of the inflows in the in the market. And when it comes to individual stocks, there are certain stocks that are owned 90% by institutions. So whether we as individuals invest in the market or not honestly doesn't really make a difference because you know, the pros and these institutions will keep investing the pension money and the rich people money. So the market will keep doing what it's doing. But we as the individuals, we are exchanging our time for money. And I just don't think that's a sustainable strategy. You you really need to have as a
00:37:06
Speaker
as a citizen of the free world and of the capitalistic world, I feel like you must have a stake in the system. You must have some skin in the game in the right way because we are the system. The funny thing is that two thirds of the economy is driven by consumer spending.
00:37:35
Speaker
while 60 to 70 percent of the stock ownership is done by these institutions. And of course, a lot of folks who have a job have pensions and of course you pay for that and someone else invests your money. But you never know exactly where that money is going. <unk> It's not that simple as these institutions put all their money in S and&P, they diversified a pick all these kinds of different investment strategies. And what we saw in, of course, 2008 and nine was that a lot of folks' pensions were dried up. And that's a fear that I think always should be in the back of your mind in in a way that you can't 100% rely on your pension and also you can't 100% rely on social security. While it is, ah in my experience,
00:38:35
Speaker
analysis and and the way that I look at it, it's more reliable than most people want to make it seem today because a lot of folks are saying, yeah, you know, social security won't be around in like whatever years. I don't believe those things. that The height of the checks you might receive when you retire could be lower, you know maybe it doesn't go up with inflation in 20, 30 years or whatever. So it might be lower than you wish. I doubt that it will completely go away, but but that's not really even the issue. that The issue is that I feel like as a as a participant of our society,
00:39:23
Speaker
You feel just more at ease when you take a chunk of your money and invest it in the stock market because as a stoic, you kind of you're already used to living a simple life and you don't have a life that you are attached to material things or vacations or eating out and all of these luxury things. So why not invest just because it's complicated or because you might lose money when the market goes down. I don't think those are real valid reasons. The the reason that we don't invest is we don't know what what to invest in. And that makes us
00:40:18
Speaker
scared and I think that's normal. that That's what I experienced my entire life as well. And if you have this kind of proven strategy that's diversified and um directly tied to the economy with passive investing in the S&P 500, it kind of makes sense. you know is You think to yourself, okay, I'm not trying to pick stocks, I'm not trying to get rich quick, I'm not doing all of these crazy things. I'm not trying to quote unquote hedge my portfolio. I don't look at myself as, as a professional investor. I'm just someone who earns living, trying to, you know, do the right things. And I just want to make sure that my money also does some work for me. So at some point I can divorce myself from my time and, and
00:41:18
Speaker
Yeah, that's that's always been my goal. And since I got on this path, I felt like I just need to inspire more people to get on this because it's something that now when I look back on it, it's a no brainer. And I think to myself, yeah, why did no one tell me this? and You know, 07 or 08 when I started, but yeah, better late than never, but you know, it it and investing can be a lot simpler than most people think. Yeah, that's right. You're not talking about trying to pick specific stocks, yeah companies, more complex financial instruments.
00:42:13
Speaker
And so I think it's a ah ah sensible thing to do is just to...
00:42:19
Speaker
look for that S and&P 500, some other passive index fund. I think that's good advice. I wonder if you can also speak to like the importance of consistency and compounding in this method. Cause I think a lot of people, you know, some people are fortunate enough to hear about this just because of their social surroundings, professional surroundings, what have you, but others, they haven't, I think haven't fully internalized the compounding in effects that can come through consistent either saving or or investing. Yeah, that's a good point. and Me too. Like I never had anyone in my family or anyone who invested that I personally knew because
00:43:14
Speaker
hearing the calculations and hearing the stories are two different things because someone can tell you that, oh, you know, if you invest 500 bucks a month, you'll have a million in 30 years. And it it sounds fun, but do you think to yourself, yeah, 30 years.
00:43:40
Speaker
I need to have some incentive to invest today. But the thing is that if you invest today and you invest 500 bucks a month, the gains that you make are very insignificant when you compare that to your paycheck. Because let's say you invest 500 bucks and you get unlikely, but let's say in ten percent in a month you get 10% return. You think, oh, okay, now and I have 550 bucks. So, and then they say, yeah, but you add another 500 and then keeps going up, but you still think this of, okay, you know, I know in a year at five, 6,000 or whatever. And if I do 10% again, unlikely, but still, let's say you do 10% is like, you get 500 bucks and they think, okay, maybe I make 3000 bucks, 4,000 bucks. What can I do with 500? Is that really worth it? And, um,
00:44:42
Speaker
That's a difficult thing to ah internalize because yeah it takes so long before you get get the payoff of compounding with bigger amounts. Everyone understands that if I have $500,000 in my portfolio and I do 10%, we think, oh, yeah. 50K, that's awesome. Right? Everyone sees that and says, yeah, that's all that amazing. But now we have to kind of explain it to ourselves why it makes sense to and invest today and why we should be consistent. And I think that has two components. Yes. You're waiting for that moment where you, when your investments,
00:45:35
Speaker
have a return that has more meaning to you. But that's not even the most important thing, I think, as a stoic investor. The stoic investor takes pride in being consistent at any virtuous or any positive thing in life. And in in my book, Investing is one of the most virtuous things you can do because you are saying, okay, I made this amount of money and this amount, this chunk of it goes to cost of living. And what I'm going to do next is I'm going to set some money aside for later. And by doing that, I'm practicing discipline. I'm practicing.
00:46:34
Speaker
simple living just by the act of investing. Even if I don't get that money back, that's okay because today I'm improving myself. I'm taking my paycheck and I'm saying, okay, this junk, goodbye. I don't need you. I'm not throwing you away. I'm not spending it on pleasure. I'm not taking that money to a casino. I'm not going to a fancy restaurant and splurging. No, I'm just putting it aside. Maybe for my kids or for someone else later, when it be when that 500 bucks becomes 5,000 through compounding, but I'm improving myself today. And for me, that's the most important thing about investing. And the more consistent that I am, the more
00:47:33
Speaker
energy and the more um satisfaction I actually get from the act of investing because that's how I really look at it. That investing is an act or a habit that I do every single month and that act is improving my character. And if you look at it that way, you don't you don't even have to think about it financially. So that's really the beauty of it.
Impact of using wealth for good
00:48:07
Speaker
Yeah, well, it's ah it's an expression of consistency and perhaps ah a way to practice it. um yeah And the Stoics talk a lot about how one should be consistent in one's thoughts and actions. And an aspect of that is
00:48:28
Speaker
having regular habits yeah around you know worthwhile goals. And for investing, that could be ensuring you have a rainy day fund as a hedge. Perhaps that's raising money for your kids, your family, ah for yourself, maybe for even charity down the line, whatever it is. yeah it, those goals can be worthwhile. And there's a sort of thing one wants to, you know, if they're worthwhile, then there's a sort of thing you apply consistent character action towards. Yeah. And that's, that's discipline. Yeah. And, and wealth is definitely worthwhile, something that will improve your life and hopefully your family's life. So you're impacting,
00:49:25
Speaker
more people than than yourself, especially if you use the wealth to to do good. And i when i mean when I talk about doing good, I don't necessarily mean about giving it away, but I just mean also to create ah a family or an environment where folks don't have to be so stressed and anxious about financial security. if that's that's If you can accomplish that at some point in your career, I feel like that's that's a big big contribution.
Stoic investing models and final thoughts
00:50:02
Speaker
Yeah. So who for you, you mentioned a number of models in the book. yeah like Who for you is one of the essential role models of a stoic investor?
00:50:15
Speaker
Yeah, the the most obvious one is of course Warren Buffett because of the fact that he has done everything in his life, well almost everything in his life that the Stoics would do. The only thing that some people kind of put questions, question marks around is that He remarried or he divorced his wife and then he married the help or something like that. I can't recall exactly, but sure fine. Right. The thing about Warren Buffett is that he still lives in the same house that he bought like 60 years ago or 70 years because he's like 90. Um, he only.
00:51:12
Speaker
buys a new car when the repairs and the cost of maintaining his old car kind of don't make sense anymore compared to buying a new car. He loves the activity of investing. He loves his profession. He spends hours a day reading.
00:51:38
Speaker
He did not spoil his kids. In fact, he is giving away, I believe like 90 something percent of his net worth. yeah he He was I think the first who who yeah who signed up for the giving pledge that Bill Gates started where they basically pledged to give away their
00:52:09
Speaker
almost their entire wealth when they fast. And yeah, when I look at all of those things that how, the way that he lived his life and the way that he invested in the way that he operated his firm in Berkshire Hathaway, I think to myself that that there are so many things there that can inspire you, not not only his lifestyle, but also the way that he looks at his ah career. So yeah, that's, uh, I think the most obvious, but at the same time, also just ah the best example, because they're not a lot of folks who really come close. The other person that I also really appreciate is Peter Lynch, who was this rock star fund manager in the nineties and
00:53:01
Speaker
wrote or co-wrote these famous books on investing, one up on Wall Street and a few others. And he decided to walk away from the fund that he grew to these unbelievable amounts. And he said, yeah, for all these years, I actually missed on all of these family occasions and recitals and birthday parties of my kids and family that I said, I need to stop ah that and retire and just focus on family full time. What I appreciate is that he did come to that realization at some point and did not think to himself, yeah, I need to have more and more and more and more and more. So that's also someone who I really appreciate for making that decision
00:54:02
Speaker
because I think it's easier to stay on the treadmill. Well, it's hard to to step away, but of course we can say yeah ah Peter Lynch at that time already made so much money that he didn't even have to work. But still, I think that's something to to appreciate. and and And finally, John Bogle, founder of Vanguard, that He revolution revolutionized passive investing and was one of the the founders of one of the people who started ETFs, low cost ETFs. And what I love most most about him is that his firm Vanguard is the second largest asset manager in the world. They manage trillions of dollars of wealth. But when
00:54:57
Speaker
Vogel passed away a few years ago. His net worth was insignificant compared to the trillions of dollars that they managed. so And that's because he set up his company from the beginning in a way that he wasn't the one who would earn the most when the company did really well. Where, for example, hedge fund managers and a lot of fund managers get paid no matter how their fund performs, but he basically say, yeah, for me, that's not the most important thing. And of course he did the mass millions, but a lot of folks say that he could easily be a billionaire and and more. yeah His network worth was a lot.
00:55:53
Speaker
but still like somewhere around 70, 80 million, but he could have easily done way more. And I think that's that says a lot about him. He always came to the media and and wrote books on you know being content and having enough and living a living a ah good life and all of those things where I feel like he was a very stoic person as well. so Yeah, those really come to mind. All different stories and all, of course, very wealthy, but a lot of nuggets of wisdom there. Excellent, excellent. Yeah, those are solid models. um I suppose ah with Buffett, you have that.
00:56:43
Speaker
a good example of consistency, a kind of clarity ah of thought. You can see that's admirable and a lot of his writing speaking, which I think is a ah good stoic attribute. um And there's you know the art of knowing when to walk away as well as with Bogle, some model of perhaps of a moderation yeah and yeah not exactly knowing what's enough for oneself. um Excellent. Well, this has been an excellent conversation. Is there anywhere you'd like to point listeners to learn more about yourself? Yeah, best way to learn more is ah on my website, thereisferu.com or stoicpatthewealth.com. Awesome. Thanks for joining. Thanks for having me.
00:57:36
Speaker
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