Wealth-Building Principles to Be Richer, Wiser and Happier with William Green – EP 155

Interview with William Green

Wealth-Building Principles to Be Richer, Wiser and Happier with William Green

Featured on This Episode: William Green

✅ What he does: William Green is the author of Richer, Wiser, Happier: How the World’s Greatest Investors Win in Markets and Life. Over the last 25 years, he’s spent hundreds of hours interviewing many legendary investors, exploring the question of what insights, principles, traits, and habits enable them to achieve spectacular wealth and enduring success.

As a journalist, William has written for many leading publications, including The New Yorker, Time, Fortune, Forbes, Barron’s, Money, Worth, Bloomberg Markets, and The Economist. He has reported in places as diverse as China, India, Japan, the Philippines, Bangladesh, Saudi Arabia, South Africa, Mexico, England, France, Monaco, Poland, Russia, and Italy.

He has interviewed presidents and prime ministers, prize-winning authors, inventors, criminals, the CEOs of some of the world’s largest companies, and countless billionaires. His most recent book Richer, Wiser, Happier: How the World’s Greatest Investors Win in Markets and Life is is based on some of his work in which he has interviewed many of the world’s best investors, exploring in-depth the question of what qualities and insights enable them to achieve enduring success.

💬 Words of wisdom: “Almost anything that you actually achieve that you’re proud of has a somewhat painful birth.” – William Green

🔎 Where to find William Green: Twitter | LinkedIn

Key Takeaways with William Green

• The price of greatness
• Mastering impactful writing
• Lessons in success from Munger’s protégé
• Channeling wealth for meaningful change
• What’s the point if you’re unhappy?
• Munger’s formula for great relationships
• The costs of embracing hustle culture
• Tips for achieving peak performance
• Are you playing a game you’re able to win?
• Opportunities often lurk within major disruptions
• Access to wisdom is just a click away

William Green on Mastering the Investing Principle of Simplicity

Free Strategy Session 

The Lifestyle Investor Insider

William Green Tweetables

Resources

• William Green’s Website
• William Green on Twitter | LinkedIn
• Richer, Wiser, Happier Podcast
• Richer, Wiser, Happier: How the World’s Greatest Investors Win in Markets and Life by William Green
• The Great Minds of Investing by William Green
• Darius Mirshahzadeh
• Ray Dalio
• Howard Marks
• Sir John Templeton
• Hal Elrod
• The Miracle Morning: The Not-So-Obvious Secret Guaranteed to Transform Your Life (Before 8AM) by Hal Elrod
• Bill Miller
• Mohnish Pabrai
• Berkshire Hathaway
• Guy Spier
• Ashok Talapatra
• Dakshana Foundation
• Ken Shubin Stein
• Fidelity Investments
• Howard Schultz
• The Little Book That Beats the Market by Joel Greenblatt
• George Soros
• Daniel Goleman
• Pico Iyer

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Read the Full Transcript with William Green

Justin Donald: Hey, Williams, so glad to have you on the show.

William Green: I’m delighted to be here with you, Justin. Thank you for having me.

Justin Donald: Yeah. This is going to be fun. So, you and I were introduced by a dear friend of mine, Darius Mirshahzadeh. You are on his podcast. I got a chance to listen to your brilliant podcast episode with him and really enjoyed it. I had a chance to read your book and really enjoy just the commentary, all the brilliant people that you interviewed in your book, which it’s neat to write a book where you’re basically highlighting some of the brightest minds out there, Charlie Munger, Ray Dalio, Howard Marks, Sir John Templeton, and many more, right?

William Green: Yeah. It was a bit of an insane undertaking. It took me about five years to write the book and I’m probably lying to myself even there because I also worked on the book proposal for ages before that. And it was based on reporting that I’d done over 25 years or so. So, in some ways, I was trying to synthesize everything that I had learned over the last 25 years of spending hundreds of hours interviewing all sorts of legendary investors. So, it was a kind of nutty undertaking because at a certain point, you’re like, you’re so far up the mountain that you can’t really turn back. And so, the stakes just go up. And so, you’re sort of like, “Oh God, really? Am I going to spend like four more months on this next chapter?” And so, yeah, it was a crazy undertaking. But it’s very satisfying because then you look back with a book you’ve actually created something that’s a sort of a flag that you’ve planted on the top of Everest to sort of say, “Well, actually, yeah, I was nutty enough to scale this peak.”

Justin Donald: Boy, 100%. You’ve got an asset that lives on and it lives on long after you, which is really exciting. And I think because of the wisdom that you were able to extrapolate, I mean, I love this whole world of IP.

William Green: Also, one of the fun things is that as it gets rolled out in different languages, you also see it spreading around the world. So, I think now it’s been translated into something like 23 languages. And so, that’s kind of fun to watch because suddenly you’ll get a message from someone saying, “By the way, this edition is not going to have the index,” or, “By the way, this is how this phrase was translated. Is this okay?” And somebody noticed. There was a fund manager, I think, from Brazil or somebody like that noticed that in I guess an early version of the Portuguese translation that he’d got, he was like, “Do you realize that it says that they’ve translated this phrase where it says Warren Buffett is happy to sort of twiddle his thumbs indefinitely for years without making a decision just because he’s so sublimely patient.” And he said, “They’ve translated it as Warren Buffett is happy to sit there scratching his balls for years.” And so, apparently, this was a sort of colloquialism in Portuguese. And so, then my agent was like I’m talking to the translator and was like, “Are you sure that you want to put it this way?” So, it’s not only that you’ve tried to create something that outlives you. It’s also kind of fun watching it kind of roll out around the world.

Justin Donald: Yeah, no kidding. So, we just got back from Portugal, by the way. So, we’ve been speaking some Portuguese. We don’t know it well but that is really funny on the translation side. And I remember when we launched the book that I wrote, The Lifestyle Investor, I remember the first time that one of these agencies in another country wanted to translate the book, I was like, “Oh my goodness, I was just happy to have people buy it. The whole idea of like another language?” And I had a friend, my friend, Hal Elrod, wrote The Miracle Morning, which is a huge success and he told me, “Whenever you sign a new book, you make sure that they send you copies of the book in that language so you can collect them.” And so, I’ve been doing that. I think you’ve got more languages than me. I think we’re at like 13 or 14.

William Green: That’s amazing.

Justin Donald: It’s so satisfying to see the impact and the influence that you can have beyond the borders of your home country, right?

William Green: Yeah. And I think writing a book has been the single hardest thing I’ve done other than raise kids. And hopefully, I probably did a better job with my book than I did raising my kids. But writing a book is just immensely difficult, as you know. And then after that, after Richer, Wiser, Happier came out, I launched this podcast, the Richer, Wiser, Happier Podcast. And that by comparison is so joyful and easy. So, I think one of the other benefits of writing a book that I don’t know if you’ve found the same thing, is that anything else seems so easy in comparison.

Justin Donald: 100%. So, podcasting to me is a joy. I love it. I love meeting people. I have so much fun with it. Writing a book is a job and there’s this monotonous aspect of it or this critical nature of this feeling like it’s not complete or it’s not perfect, and it’s just never going to be perfect but you have this desire that it’s supposed to feel or read or be a certain way. Oh, It’s hard to like, say it’s finished, right?

William Green: I actually am sufficiently insane and sufficiently obsessive in connection that I decided I was going to try to make my book as perfect as I could make it, which is one reason why it was such a torment. And so, I just never stopped. I mean, I missed my deadline by two years, and I was just ferocious about making it as good as I could possibly get it. And part of what happened is it was COVID for part of it. And so, the stakes kept going up because I kept thinking, well, I have no idea what’s going to happen to the world. I have no idea if I’m going to survive or how awful this could get. Let me at least try to create one thing that could be enduring. And so, the stakes kept ratcheting up in a way that I’m probably frustrated by the editor considerably because I was like, “Not sorry, I’m adding another chapter now.” And then I would go off and spend several more months. I mean, maybe it sort of gets one of the simple but profound truths of life, which is that almost anything that you actually achieve that you’re proud of has a somewhat painful birth. I mean, I think once in a while there’s a lightning strike and you do something that comes pretty easily. But for me, almost everything, I don’t know about you, you look younger than me, I’m 54, I look back and I think almost everything that I’ve done that’s been deeply satisfying has been quite painful.

Justin Donald: Yeah. I think that’s a great way of framing it. And with years though, I’m so curious how you were able to procure these interviews with these well-known investors prior to having the name that you have today. So, how did you go about getting these big names to sit down and spend some time where you could interview them?

William Green: Well, I’d been writing for magazines for a long time, so really from my early to mid-twenties, I was writing for a lot of big-name magazines. So, I’d write for Fortune and Forbes and Time and The New Yorker, a lot of well-known magazines. And over the years, I interviewed a lot of famous investors for magazines. So, early in my career, I would interview literally still in my twenties, I think, I would be interviewing people like Peter Lynch, who is this legend from Fidelity, as you know, or I would interview Bill Miller, who was famous for having beaten the market for 15 years running. And I would do things like I would go off and write an eight-page profile about someone like Bill Miller, where I would be writing a piece for Fortune and I would be traveling with him on his private plane after 9/11, a couple of weeks after 9/11, when the markets were really imploding. And I’m hanging out with him at his office. I’m hanging out with him at his alma mater. And so, over the years, I built relationships with these people. And so, one of the things that happens, I think, is if you write in a way that’s fairly honest and accurate and empathetic, then at a certain point you build this reputation where people are like, “All right, I sort of trust this guy.”

So, I wrote a book. I had a long detour, right? So, I did years of writing for magazines, and then I became an editor. So, I moved out to Hong Kong and I ended up editing the Asian edition of Time magazine, and then I moved to London and edited the European, Middle East, and African edition of Time magazine. And then I went back to writing and worked for Bloomberg for a while, and then I started writing books. And so, one of the books that I wrote during that period when I’d gone back to writing, this must have been probably about 2015 that came out was a book called The Great Minds of Investing. So, I also got to interview all of these guys like Howard Marks for that who I hadn’t met earlier. And so, when I started to work on Richer, Wider, Happier, I thought, “Well, let me take the most interesting interviews that I did way back when, when I was interviewing people like Peter Lynch and Jack Bogle,” who had founded Vanguard, which launched the indexing movement and became last time I checked, it was way over $7 trillion in assets. Now, probably 8 billion, 9 billion. And so, I thought I’ll draw on those really old interviews and then I’m going to double down on the most fascinating people that I’ve met over all of these years. So, I would go back and I would spend, say, two days with Bill Miller for the book for Richer, Wiser, Happier.

So, over the years, I figure I’ve probably spent somewhere between 80 and 100 hours interviewing Bill Miller, who’s this legendary guy who’s kind of a genius. And so, at a certain point, you’re just synthesizing and distilling so much wisdom from these people. And then I would do things like the very first thing I did when I was reporting this book is I went off to India for five days with a guy called Mohnish Pabrai, who I’d also interviewed for the Great Minds of Investing book. And Mohnish had this very provocative idea that really you don’t need to have an original mind at all, that what you really want to do in life is, as he would call it, cloning, which you could call replication or modeling, where basically you take the smartest ideas of people who are wiser, older, further along, more successful. You figure out why they’ve succeeded, then you reverse engineer it, and then you replicate it in your own life. So, this is such a provocative and thoughtful idea. And I spent time with Mohnish over the years. I would go to the Berkshire Hathaway annual meeting with him in Omaha, which I know you’ve been to as well, Justin. We would sit next to Mohnish and this old friend of mine, Guy Spier, who’s a very well-known hedge fund manager.

So, then I’m going off to India for five days with Mohnish for the book and literally one night we were on an all-night train ride from Mumbai to Kota and I’m like sharing a bunk bed with him on the train. So, part of what I was doing was drawing on kind of the greatest hits of the last 25 years and part of what I was doing is saying an idea like this, like cloning is so powerful and so interesting that I want to go big on that. And likewise, with someone like Howard Marks, who I’d interviewed over several hours previously, I’m thinking, “Well, here’s a guy who’s basically drawing on Zen Buddhism in a way that’s helped him to become a billionaire, a multibillionaire.” So, he’s drawing on this idea that everything changes, nothing stays the same, everything is impermanent. So, how do you make decisions in a world where nothing stays the same?” So, I’m like, “That’s a really cool theme.” So, part of what I was doing is I was pursuing these themes, these big ideas through these kind of legendary and very brilliant figures, really, the smartest people, the most thoughtful investors I’d ever met.

Justin Donald: Well, I feel like you’re just blessed to even have those relationships that you can reach out and gather this type of information. And it’s great that you’re spreading it out so the world gets to learn it but you got a front-row seat with some of the brightest minds that have ever lived in the investment world. It is so powerful.

William Green: Thanks. See, that’s a big responsibility in a way. So, you start to think, “Okay. Well, how do I synthesize everything that this brilliant guy, Mohnish Pabrai, guy with an IQ in the 180s who started out living in a $20-a-month apartment in the suburbs of what was then Bombay before it became Mumbai and has become this kind of legendary investor and has been basically mentored by Charlie Munger, Buffett’s partner?” How do I synthesize everything he’s figured out that’s made him so successful? So, it’s a kind of monstrous task in a way. And part of what I figured out with Mohnish, which really had a profound effect on me, is this idea that you want to reverse engineer what people who are smarter than you have already figured out and then replicate it with this kind of fierce, relentless attention to detail. And so, one of the things that Mohnish did is when he decided that he was going to become a serious investor, he starts to replicate, well, he starts to reverse engineer first what Buffett or Munger had figured out, and he says, “This is the most ridiculous thing.” He said, “Basically, these two guys who have figured out the laws of investing and almost everybody is ignoring them.” And he said, “It’s as if you discovered that gravity exists and then you have a whole generation of physicists who just deny the gravity exists.” So, he said, “Well, if nobody else is going to do it, I’m going to do it.”

And so, he starts to replicate what they’re doing with really relentless attention to detail. So, for example, you look at these really essential laws of investing that Buffett and Munger have figured out. And one of them is simply the margin of safety that you’re going to find stuff that you can buy for much less than it’s worth. And you stay within your circle of competence. You don’t stray into areas that you don’t understand. And so, money does this and basically launches this game where he’s like, “I’m going to turn $1 million into $1 billion.” But then what’s really cool is at the same time, he’s decided that he’s going to use this money to lift tens of thousands of kids who are incredibly smart and talented but come from very poor families. He’s going to lift them out of poverty across India. So, part of what I wanted to do also was say the ability to win a game by finding these mispriced bets, as someone like Mohnish does, is all very well but what actually is really cool that you want to replicate is his ability to have a huge impact in other people’s lives. And so, I started the book in India with Mohnish as he goes to visit this classroom of incredibly smart kids who he’s educating, basically giving them free tuition to take the entrance exam to the Indian equivalent of MIT, this thing, IIT.

And that’s the most beautiful thing when you see someone who’s not only able to beat the market and make very shrewd financial decisions but you see them doing stuff that’s actually having an impact on society. And I wanted to kind of give a sense of this isn’t really just about becoming rich. This is actually about redefining what richness is. And one of the things that’s really striking to me about someone like Mohnish is I see the incredible joy he gets out of changing the lives of all of these people. So, I remember this story where he and his daughter, who has this wonderful name called Monsoon Pabrai, they had gone to visit, they would often go to visit the kids that his foundation was helping and they went to visit this one kid, Ashok Talapatra, who basically he’d grown up in this slum where they had a pink shower curtain as their front door, like a pink plastic shower curtain, and they had this asbestos ceiling. And I once said to Ashok, “What happened in monsoon season? Like what happened when it rained?” And he said, “It was hard,” and they didn’t have a dining room table. They sat there. They served Mohnish and his daughter, Monsoon. They served chai and a snack on a stool because they had nowhere to sit.

And so, Ashok ends up getting educated in this program that Mohnish’s foundation, that  Dakshana Foundation funded. And he ends up coming something like 63rd out of half a million applicants to Indian Institute of Technology which is just outrageous. I mean, this guy’s so smart, you can’t even believe it. And this is a guy whose father was making something like $100 a month as a tailor. And so, they were living in total poverty. Ashok goes through this program, gets into IIT, goes to the hardest program I think, which is the one in IIT Mumbai, and then gets hired by Google, gets sent to London by Google, big six-figure job. And for the last few years has been back in California working for Google, climbing the ladder. First thing he does is buy a home for his parents that actually has a roof that functions, I mean, literally within months of him getting the salary. And one time when I went to Omaha for the Berkshire meeting, I’m sitting there next to Mohnish and Ashok, this kid who’s now this successful highflier at Google, and just the joy for Mohnish. Can you imagine what that’s like to take his ability to make a mispriced gamble and gamble on a mispriced stock and use that to transform the lives of people like Ashok?

And so, that’s part of what I’m trying to explain is like that’s true wealth, right? That’s a guy who’s done something that it goes beyond just being a rapacious capitalist. It’s got to be something more, I think.

Justin Donald: Well, that’s incredible. And that right there, that’s the meaning like to be able to have impact, to be able to help others better themselves and at scale too. That is powerful.

William Green: Yeah. And I tell you, one of the things that he did, Justin, that’s amazing is he initially started to do it with engineering students and then at a certain point. And that itself was cloned, he had literally replicated a program that already existed in India but for only 30 kids a year. And so, he did it on an industrial scale. And then at a certain point, he figured out, “I could do this for kids going to medical school.” So, now he has hundreds of kids going to medical school who previously were from these unbelievably poor families. And so, I think one of the challenges for people like you and me and for many of our listeners is to figure out, in a sense, what our Dakshana is. I mean, Dakshana, the name of Mohnish’s foundation, literally means “gift” in Sanskrit. And it’s not entirely clear who the gift is to, right? The gift is to the people he helps and the families he yanks out of poverty but it’s also a gift to Mohnish. And so, this is one of the things I was trying to get at in the book is to figure out, it’s not really saying, “Look, if you make lots of money, you’re going to be happy,” which would be incredibly naive and foolish. It’s saying if you study the lives of these people who have been incredibly successful investors, you start to get a sense of what points towards a happy life.

And one of the most critical aspects of it, I think, is some degree of service. And so, I see someone like Mohnish and it’s not like he’s taken a vow of poverty. I remember he once spent something like $6,000 on a pair of bespoke shoes and he used to drive a Ferrari and stuff like that because he’d made a fortune on Ferrari stock. And so, it’s not like, you know, he doesn’t live badly. I haven’t visited his new home in Texas, where he has this beautiful infinity pool that I’ve seen pictures of but he lives very well but it’s not absurdly self-indulgent. And I think I’ve spent so much time with great investors over the years and so much time with multibillionaires, to be honest. And when I look at the ones who are happiest, without exception, there’s some cause beyond themselves. There’s something where they’re giving back. And so, when I’m trying to figure out how to clone the greatest investors, I’m not just thinking, well, so how do I become as rich as possible? I’m actually trying to think, how am I going to become happy? And so, when I look at someone like Mohnish, that’s really important to me. And likewise, I mean, another really powerful, very replicable lesson from them that’s, again, so obvious and yet so important is the degree to which their relationships turn out to be a kind of superpower.

And so, I remember once talking to Charlie Munger this, as you said, this 99-year-old genius who’s Buffet’s partner, has been Buffet’s partner for most of the last century, 40-something years. And I said to him, “What can we learn from you and Warren about how to become happier?” And he immediately starts talking about relationships. And then he says, “We have a very simple formula for relationships.” He says, “If you want to have a good partner, be a good partner.” And he said, “Warren’s been a marvelous partner to me and I’ve been a good partner to him.” And I thought that was a very interesting use of language as well. He wasn’t inflating his own importance or excellence, and he was giving huge, huge credit to Warren as this fabulous partner. And so, I think, again, like you start to think, okay, so if I want to have a happy life, a truly rich life, how am I investing not only financially in the markets and in businesses, private businesses, many cases, in your case, public businesses in mind, how am I investing in my relationships? And then to start thinking about your relationships and thinking, well, if I apply Munger’s formula of if you want to have a good partner, be a good partner, if I apply that to my marriage, for example, if one of the things that Munger who was divorced early in his life said but had a very long second marriage, he would say, “If you want to have a good spouse, deserve one.”

And likewise, I keep thinking if I want to have good friends, I should try to be a good friend. And I don’t know about you, Justin, but I find one of the problems with our kind of lifestyle where you’re trying to hustle to get ahead is you end up neglecting friendships to some degree because you’re so busy juggling all of these different responsibilities that something suffers. And for me, I am really quick to abandon exercise because it’s really tedious. And then I’m like, “Oh God, really? I’m so out of shape.” And then I’m really quick to sacrifice the time that I spend with friends and it’s a huge mistake. What do you think?

Justin Donald: Yeah. I think that generally for most busy people, entrepreneurs, business professionals, I do think health is the first thing that kind of goes out the window and I think relationships are often the second. For me, my worldview is just that I love people so much, so it’s really hard for me to sacrifice that. I have sacrificed my health before. I’ve definitely gotten out of shape and I’ve chosen to work the hours and grind and not get to the gym and not eat the way that I should. And I had one season of life that will forever kind of wound me in a way that won’t let me go back. But from the standpoint of friendships, to me, like relationships are everything like that is this world. That is what brings me the most joy is the connection, the love, the connection that I have with others. So, my wife and I do something every year. It’s our marriage and family planning day, and we have this huge outline and we outline for the year who are the, I mean, there’s a ton of stuff in there between the two of us that we want to kind of work through. And how are we in our marriage and different areas and talking about our daughter and parenting and all that.

But towards the end, one of the things that we talk about is who is in our top ten that we want to be intentional getting time with this year and who are the couples that we want to get time with? Because often there’s only a handful of couples where everyone kind of gets along and it’s just a great vibe all the way around. So, sometimes it’s the people that are the top ten that are one-on-one without the spouse. And then there’s the group that is great for double dates or even larger groups. And so, we just have made that a priority over the years and we plan it out and we schedule time and we book trips. And that brings so much joy to us and for me, personally, because it’s so high on my hierarchy of needs.

William Green: Yeah. It’s such an important thing. You raised so many important points there. I mean, when you talk about the hierarchy of needs, I think that’s one of the things that’s very striking to me when I think about the lives of the great investors is the degree to which they’re thinking very consciously about what they’re optimizing for. And that’s critical to sort of I think that’s been very clarifying for me, right, because when I was working on my book, basically, I spent five years without even taking a vacation. And I did a little bit of I did do some exercise because I knew how unhealthy it would be if I didn’t. So, I got a personal trainer at one point. Also, I did a fair bit of meditation because I knew that my mental health was going to be pretty important. So, I think I sort of figured out, well, I started thinking as I was trying to replicate what the great investors were doing, I was like, okay, so what are the most important aspects of life? And this stuff is pretty obvious but it’s amazing how easy it is for us to get out of whack. So, figuring out the friendships were hugely important, that family was hugely important, then figuring out my mental health, my equanimity, my emotional resilience was hugely important and my physical resilience was hugely important.

So, those things were very valuable but I can definitely see how much I’ve got out of whack over the years. And I was really struck, there was a guy I write about in the book called Ken Shubin Stein, who again, is a good friend, who I haven’t managed to see in a couple of years because both of us get too distracted. But he was a very successful private equity and hedge fund manager who then actually quit the investing business and became a neurologist, which is an amazing thing to do in your late forties.

Justin Donald: Wow. No kidding.

William Green: He’s a remarkable human being. So, he’s an expert on the brain but he also had been teaching this advanced investment research course at Columbia Business School for ten years. So, he’s really, really thoughtful about the intersection between the brain and investing and optimal performance in every area of life. And I remember one of the things that Ken told me was that basically if you want to optimize your brain performance, there are four things we know scientifically works. So, we know that sleep is really important. We know that good nutrition is really important. We know exercise is really important and we know meditation is really important. And one of the things, so that really helped me to have someone with that kind of systematic mind telling me, “Okay. So, you can’t just wing it and not sleep. You can’t neglect exercise.” And so, that was really helpful. And then he became so busy during COVID because he was an emergency room doctor. I mean this is a guy who just had a baby for his first child a few days before he starts being an emergency room doctor during COVID. He was under unbelievable stress.

And one of the things that Ken has told me is that when he’s under tremendous pressure, I think there’s a very practical and very helpful thing for our listeners. When he’s under tremendous pressure, he goes back to those four basic things. He goes back and says, “Okay. So, I’ve got to eat well. I’ve got to make sure that I’m getting good sleep. I’ve got to make sure that I’m exercising.” And then he said it was really hard in those early days of COVID when he was dealing with lots of patients on ventilators and like, I mean, just a nightmare. So, it’s really hard to meditate. But he said he would go into the bathroom at the emergency room and would at least just take a, well, I guess it was the ICU, the intensive care unit, and he would just go into the bathroom, at least take 10, 20 seconds to do some mindful breathing. And the other thing that he told me that I think has had a profound impact on my own way of dealing with just the madness of so much stuff coming at us is he said when he’s starting to get overwhelmed, he would just go through his calendar and really try to simplify. And so, he would just nix various things and reduce complexity.

It sounds so obvious but I think this idea of getting back to those basics of those four things that we know help your mental performance and reducing complexity have been so profoundly helpful to me because I juggle too many jobs, too many tasks, and every episode of a podcast that I do, it’s an enormous amount of research. It’s an enormous amount of preparation. And you do editing all of these things. So, it’s not just that you’re doing one job. It’s that each of your jobs has multiple parts. So, I then go and give speeches and I travel to do speeches and then I’m editing someone’s book and then I’m an advisor to a couple of investment firms. And so, it’s like a lot of stuff coming at me. And so, I think this stuff is hugely practical to figure out how you’re going to reduce complexity in your life and get back to those really basic things that we know were going to make you more resilient.

Justin Donald: Yeah. And by the way, I love that concept. It’s funny, I was talking with my coach today about complexity versus simplification, so we kind of went through our business but this is one of the main themes in your book on the investment side of things. So, yeah, simpler is better and avoid complicated, complex strategies. And you talked a lot about that for investing. But if you extrapolate that globally, I mean, we’re talking like in your life, that is a great skill to have and to learn to master and a great, I guess, a framework to operate life out of business, personal investing, all of it.

William Green: Yeah, hugely important. So, for me, one of the things that really fascinates me is the way that when you discover a master principle in life, like the importance of simplicity. So, think of something like these phrases like the simplicity that lies beyond complexity where you really deeply become an expert. So, this isn’t simplicity just because you’re too stupid and lazy to figure out how something works. This is simplicity because you really distill the essence of a particular game. So, when you find a master principle like that of keeping things simple, not adding extra complexity, what’s fascinating to me is that it runs through so many different areas of life. So, you find it in business, you find it in investing, you find it in science. You look at something like Ockham’s Razor, this idea that on the whole, the simplest solution is best. You find it in business when you look at someone like Steve Jobs talking about his commitment to simplicity at Apple. You see it in design where he and Jony Ive when they were designing the products at Apple. They had this incredible Zen Buddhist-inspired simplicity. There was a kind of Japanese Zen aesthetic there, these very simple pure lines. And so, then I start to go off on this wild goose chase, falling down all of these different rabbit holes, studying simplicity, and seeing all of the areas that comes up in our lives.

And so, you see it again and again in investing, right? You see. I would go off and I would interview someone like Will Danoff, for example, who was managing over $200 billion at Fidelity. It’s one of the great Fidelity investors in the next generation after Peter Lynch and I went to visit Danoff in Boston for the book. And I’m trying to figure out his secret sauce and he’s like, “Look, you can really sum it up in three words,” and he says, “Stocks follow earnings.” And he says, “Look, I had these Howard Schultz from Starbucks come see me right before Starbucks went public.” And he said, “I could see the model right there. I could see how much the return on investment was for each of these new cafes that they were setting up.” And he said, “Look at what Starbucks did over the next 20, 25 years.” And he shows me this kind of fever chart where you see the earnings growth. It was unbelievable. And then you see the stock price growing in an unbelievable way. And then you see the S&P 500 growing in a sort of desultory way, whatever it was, 7% or 8% a year over that period. And the earnings for the S&P growing about the same rate. And he says to me, “So what’s the lesson?” And I’m like, “Stocks follow earnings at least over time.” And he’s like, “Bingo,” and he’s like, “That’s what I figured out.”

And so, that’s a very, very simple principle. That’s not always true but is, as I would put it, approximately true on average over time. And likewise, then I go off and I interview this great investor, Joe Greenblatt, who had this stunning record over 20 years where he’d made 40% a year over 20 years, which is just it’s kind of…

Justin Donald: Oh, my goodness.

William Green: It’s not actually possible. I mean, so basically it means you turn $1 million into well over $800 million. I mean, this is stunning. So, he’s this sort of legendary figure. And so, Greenblatt because he’s written several books, one of which he wrote for his five children to explain the essence of stock market investing. It’s called The Little Book That Beats the Market. And he taught this class at Columbia Business School for many years. He taught 700, 800 students in the value investing program at Columbia, which is the best value investing program in the world. Because he tried to explain what it was that he’d done, he was distilling and distilling this down to its absolute essence. And he said, “Look, the essence at the end of the day is that the key to investing is to value an asset and then buy it for much less than it’s worth.” And he said, “That’s it. That’s everything.” And so, again, it’s a very, very simple principle but the execution of it is not easy. And so, it raises all of these really important questions for investors where we go back to the question, the issue we discussed about 20 minutes ago about sticking within your circle of competence, which is one of the great principles from Munger and Buffett. So, you really have to say to yourself, “Well, do I have the competence to analyze this business, this asset, and actually decide what it’s worth?” And if you don’t, there’s no shame in it.

I mean, if you’re a doctor or you’re a writer or you’re a chemist or a schoolteacher or whatever, on what possible basis should you know how to analyze and value a business? And it’s not that difficult to analyze and value a business but you also have to be interested in it. And so, for me, one of my great revelations working on the book is I’m actually just not that interested in valuing assets. It’s just not what I live to do. Like, Buffett will sit in his office in Omaha in this slightly drab area. I mean, it’s not exactly the world’s most exciting place. I like Omaha. I’m always happy to go back to the annual meeting. It’s really fun. But he’ll sit there in this quiet town with his blinds drawn, reading 10-Ks and 10-Qs and the like. And that’s delightful for him. For me, literally, I mean, I get probably five books a week from Amazon that are all on really obscure subjects. And that’s what I kind of like to do. I like to sit around reading and thinking and synthesizing ideas and then trying to share those ideas with people. And so, part of the moral really is you go from this simple idea of keeping things simple, understanding the simple essence of investing to then saying, “Well, am I even qualified to win this game? Like, should I just index?”

Justin Donald: Totally.

William Green: “Or should I just give the money to someone else who’s more interested or has a better temperament?” So, for me, that’s had a profound impact to say to myself in every area of life. Am I playing a game that I’m equipped to win?

Justin Donald: That’s right. I mean, that’s a powerful thought and statement and something to work through. And one of the things that I was thinking about so, number one, you had said you really have to have the skill set to evaluate these businesses if you’re going to invest in them. And I immediately went to the next step, which is you actually need a criteria for when you do and don’t invest. And then there’s the discipline of sticking to that criteria that really matters, too. So, on the one side, it’s the know-how of how to do it. On the other side, it’s not investing based on emotion but truly facts and having an actually thought-out one-page or two-page criteria that you can check the box and everything and you can make decisions that are from a pretty even place emotionally, right? It’s a factual place, not based on, “Hey, the deal is about to close. You know, we’re only going to let in this many more people,” or it’s going to, “We’re going to IPO,” any of the urgency things that heighten emotions. You got to get rid of that when you’re investing.

William Green: Yeah. I think somehow you have to deal with your own emotions and the first step, I guess, is at least to have the honesty and self-awareness to know how you’re wired. And so, I look at myself and I’m like, “Okay, I’m pretty contrarian by nature. I’m very happy to go against the crowd.” So, when the market’s imploding, I’m actually pretty comfortable buying stock. That’s okay but I’m also a little bit fearful. And so, I have to set myself up in a way so when the market’s getting clobbered, I’m not going to get triggered into doing something stupid. And so, by just knowing how you’re wired, you can start to develop some practical workarounds. So, for me, I need to have a fair amount of cash. I’m not really even looking to optimize how I’m investing my cash. I don’t want to have a lot of debt. I would hate to have a lot of debt. Like, I remember very early in my adult life, my brother and I, my brother’s a very successful lawyer in London. We owned an apartment together in New York. He was living in London and we had an adjustable-rate mortgage. And suddenly, the interest rates this is the late 80s, interest rates went crazy, and I think went to about 14%, 14.5%, something like that. And I was a young writer. I didn’t have a very reliable income. My brother was making very good money but I had some assets but I didn’t have huge earning power at that early stage in my career. And it was lumpy as well.

As a writer, as a journalist, you never quite knew how things were going to turn out and it was kind of terrifying. And so, I think one of the early lessons for me was just never to get myself in a position where I would be a forced seller where I would be too fearful. And so, Howard Marks said this to me at one point, he said, “The real question is how much you push the envelope? How much are you willing to overreach?” And he said, “People tend to overestimate their own machismo, especially men who think, ‘Yeah, the market’s going to go down 30% and I’m going to be able to buy more.’” And then most of them actually, when the market starts to get crushed, a sort of curling up in fetal position or maybe you’re just not in a position where you have the cash at that time. So, during the early period of COVID and I guess around March 2020 when the market started to implode, I did start to buy Berkshire several times. I think I bought Berkshire three times during that period, and I’m kind of proud of that. I look back and I’m like, I didn’t curl up in fetal position. I think we were about to do our kitchen or something. I didn’t have a lot of money sitting around. I didn’t have enough cash sitting around, so I could really be bold.

So, I think part of it is self-awareness. You have to know how you are wired but part of it is actually finding practical strategies that reflect your own personality so that you’re not going to panic at the worst possible time and lock in losses. So, even if you’re not able to buy at those moments where the market’s getting killed, at the very least, better to be paralyzed and not sell, just to know. And so, I think one of the things that’s really helpful is in some ways to have a do-not-do list in addition to your to-do list where you say in these moments of extreme disruption, “I know that the best opportunities come about in periods of extreme disruption and I know that I’m probably going to be frightened and I might be irrational and I might not be able to think totally clearly.” Let me have a document where I spelled out my operating principles so I’m going to be able to come back dispassionately and at least know that I’m not going to sell, not going to do anything irrational and stupid.

Justin Donald: Yeah, I think that’s brilliant. I love having a will-not list or do-not list and then having a do list, right? Play both sides of it, know your own emotional temperaments and where you’re inclined to make irrational decisions or highly emotional decisions. And you kind of create these lists when you’re in a good state, a good emotional state, and then you’re not relying on emotions. You’re just going to go look at your page and say, “Oh, that’s right.” When I get like this, when I get really emotional, no, I actually just look at this checklist and I’ve already made these decisions from when I was in a very strong emotional state. So, I love that. I think your book is incredible. I think the knowledge that you have shared with the world from some of the wisest people and the way that you’ve distilled it down is incredible. I also love that you live it. I mean, you talked a lot in your book about, I mean, there are different investors that talk about different things but it’s cool hearing people say always have plenty of cash, avoid debt. I hear you saying this in your own life, which is cool. Sir John Templeton said, “Avoid fads.” Right? I mean, that’s something that I’ve paid attention to for a long time. No one can predict the future. So, don’t try and don’t think that someone else knows more.

William Green: Yeah. You will set yourself up to survive an uncertain future. So, you don’t want to be predicting the future. And the media is, I mean, I’m a journalist by trade so I’m not knocking the media for this. I think the media serves an incredibly important, vital role in society but one thing that you see again and again on CNBC and the like is people pretending that they can predict the future. And you just have to know that it’s bull. You have to go in and say, maybe George Soros and Stanley Druckenmiller and a couple of other geniuses are just freakishly talented and they have some sense of the fact that the pound is going to collapse. So, they have some sense of what’s going to happen to the economy. But for the rest of us, we have no idea. And even people like Buffett among us say they have no idea. I don’t think they truly have no idea. I think they have some sense of what’s likely to happen but they have no sense of the timing of when it will happen. So, you have it to set yourself up to survive an uncertain future. And so, just understanding those basic principles, knowing what to tune out, knowing that people are not telling you the truth, they’re deluding you or deluding themselves is so helpful.

Justin Donald: 100%. William, this has just been a great episode. Where can people learn more about you and where can they find your book? You’ve got an incredible book and I’d love for people to read it as well.

William Green: Thank you. That’s very kind. Well, the book is called Richer, Wiser, Happier and the subtitle is How the World’s Greatest Investors Win in Markets and Life. And you can really find it anywhere on Amazon or whatever and in multiple languages if you want to read it in Chinese or Japanese or Korean. Go for it. Buy many copies and you’ll become even richer.

Justin Donald: Yeah. And by the way, I should say this is your newest book. You have other books as well but this is the one that we’ve talked about today, this is the one that I’ve read, and I just wanted to really highlight that.

William Green: This is the one that’s really kind of my life work. I mean, I wrote this book, The Great Minds of Investing. That’s a very beautiful coffee table book. That’s really a collaboration with an amazing photographer. And it’s worth looking at. But it’s a $75 book and it’s never discounted. I mean, it’s just a beautiful thing. And those are short profiles of great investors. So, this book, Richer, Wiser, Happier is really that’s the one where I’m trying to distill what I’ve learned. But then I would also really encourage people to listen to the Richer, Wiser, Happier Podcast that I launched, which is a continuation of these conversations with people like Howard Marks, Ray Dalio, Bill Miller. And these are long, in-depth conversations. They tend to be 90 minutes, 2 hours, that sort of thing. And I’m often talking to them not just about how to get rich but actually really about these more profound issues of like, how do you actually live? How do you construct a life that’s meaningful and happy and resilient? And those are kind of beautiful conversations to me. And then I’ve added a few people there, like someone like Daniel Goleman, who wrote the legendary book on emotional intelligence. He’s a very wise man in his seventies, who’s been meditating for 50 years, studying very deeply Tibetan Buddhism and the like.

And to learn from someone like that is just a really, really beautiful thing or someone like Pico Iyer, who’s a great writer, who’s living this incredibly simple life in Japan and came top of his class at Oxford, got this thing called a congratulatory first, where you do so well that the examiners stand up and applaud you. And so, to learn from someone like that in a conversation. So, I would really encourage people to go listen to those conversations, not because it helps me and is going to make my brand somehow massive and me rich. Those are beautiful conversations. And as to go back to what we were saying at the start of our conversation about feeling, feeling like a book is a really great legacy. When you have a collection of really rich conversations that people can listen to and go back to talking about how to live, that’s a great gift, I think. And we’re in this amazing era where you can learn from everyone and to be able to sit down for an hour and a half with someone like Ray Dalio and have him explain here’s how you design principles for your own life and have him take you through that and talk about what it’s like to get older and what it’s like to lose his son and what it’s like to deal with that and why he meditates and what he gets out of that and how he thinks better. That’s just such an unbelievable gift. So, please check that out just because I hope it will really help our listeners.

Justin Donald: Well, thank you so much, William. This has been an awesome time. I love ending every podcast episode with a question to our audience. And that question is this: What is one step that you can take today from something you learned today from William to move towards financial freedom and living a life you truly desire on your terms so not by default but a life by design? I’ll look forward to seeing you next week and we’ll talk later.

William Green: Thank you so much.