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How to Invest for Income and Achieve Real Freedom w/ James Altucher

achieve real freedom, freedom fast lane, podcast, ryan daniel moran, james altucher

 

 

James Altucher had generational wealth created. But then he lost every dollar, his home, and could barely afford to buy diapers.

This happened not just once, but several times.

At a turning point, James realized he had to look at why this was happening and fix the cause.

And in studying his behavioral patterns, he realized that there were very important, but basic things in his life that he had to keep track of.

In this episode of the Freedom Fast Lane podcast, James shares how to achieve real freedom following four guiding principles for a healthy lifestyle, as well as the investment strategies he would have told his 20-year-old self to follow.

James Altucher is a successful hedge fund manager, entrepreneur, bestselling author, venture capitalist, and podcaster.

He has founded or co-founded more than 20 companies — including Reset Inc. and StockPickr — and says he failed at 17 of them. He has published 11 books, and he is a frequent contributor to publications including The Financial Times, TheStreet.com, TechCrunch, Seeking Alpha, Thought Catalog, and The Huffington Post.

When he started out, his first company built websites for entertainment companies – HBO, Warner Brothers, Death Row Records and many others. He grew the company and exited it for a lot of money.

But then he figured if he could make it in this area of life, he could make it anywhere. And when he set out to conquer a new domain, he lost every dollar he had made with his first successful exit.

He bounced back by following these four key areas of health:

  1. Physical health

James explains in this interview that physical health is the most important aspect of overall health for high achievers. If you don’t have the energy to get things done, they likely won’t happen.

Eating well, not drinking alcohol or taking drugs, and staying in shape are critical to maintaining energy and focus on all of James’ projects.

  1. Emotional health

In this interview, James stresses the importance of surrounding yourself with good people who are striving to achieve things in their own lives. Life is short, you need to be cut-throat about the people you love, value, and spend time with.

An example James shares in this episode of Freedom Fast Lane is a story from Mike Massimino, an astronaut who fixed the Hubble Space Telescope when it was broken. Mike told James that he took a robotics class at MIT, and four of the 10 people in that course eventually made it into outer space.

It’s a clear example, James says, that you are the average of the people you surround yourself with.

  1. Creative health

Creativity is a muscle that needs exercising, too. You need to practice creativity every day. If you’re waiting for inspiration, you’re already too late.

It’s not enough to think of ideas — you have to write them down and think about how to execute on them. You have to do things that you enjoy, that are new and unique to keep your creative muscles healthy.

  1. Spiritual health

Extreme ownership, as retired Navy SEAL Jocko Willink describes it, is the idea that if something goes wrong, you have to own it. It’s your fault, no matter what.

When things go wrong you have to take ownership of what happened, what you could do differently, and make efforts to improve to ensure it doesn’t happen again.

Part of that involves being OK with what has happened. Realizing that life goes on, you have to make the best of it and not complain about the past. Accept the consequences of the errors that you make and move forward.

On being a ‘choice-ist’

Assume that every day you make 10,000 choices. What time you’re going to wake up, what you’re having for breakfast, what articles you’re going to read, etc. Some of these are small, some are large.

Are 95% of the choices you make about things you don’t care about or are choices you actively dislike making?

In this episode of the Freedom Fast Lane podcast, James explains why he prefers to have a high percentage of his choices be ones that he loves making and actively cares about, and how he outsources decisions he doesn’t enjoy making.

What is freedom?

Money is part of freedom because it allows you to make certain choices you wouldn’t otherwise be at liberty to do. But according to James, it is not the critical factor.

James believes that he is freer than Elon Musk (whose net worth is around $20 billion). What’s that about?

Elon Musk has to wake up at 5 a.m., run six companies, deal with spaceships blowing up, deal with government subsidies to run his solar panel business. He’s making a big bet on the future of energy — a good bet, but a scary one nonetheless — and he’s got to manage thousands of people from 5 a.m. to 10 p.m.

Elon Musk might call that freedom, but James would call it enslavement and hate it with a passion. So if having $20 billion comes at the cost of leading that life, James would completely reject it.

Instead, he focuses on being a choice-ist.

Investing

If James could go back in time and advise his younger self, what investment strategy would he give? He shares his two-part answer in this episode of Freedom Fast Lane.

  1. The Plus-Minus-Equal rule

Plus: Find the people that are better than you and learn from them. This could be in terms of mentorship, but also it about reading everything about your subject — biographies and interviews with top successful people in your field.

Equal: Find people at your own level that can constantly challenge you and help you evolve and vice versa.

Minus: If you really think you know something; teach it. It’s important because being able to articulate what you know in layman’s terms reminds you of all the basics and foundational knowledge. But also by teaching, people who are just starting out may ask you questions that you wouldn’t have thought of that lead to new insight.

  1. You are the biggest stupid idiot ever

James says he will never again invest in anything thinking he is the smartest guy in the room — because he’s not.

When investing he will always make sure that there is an extremely high probability that people smarter than him have invested alongside him at a roughly equal level. That has reduced his chances of failure from 95% to 10% on anything he invests in right now.

You can only bet on people, says James. You bet on the jockey, not the horse.

 

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