General Life Themes for the Sentient (And Short Milei Scam Update - Paid)
Level 2 - Value Investor
Welcome Avatar! Last week when we had some fun trolling the FIRE crew (source) we also mentioned how each decade has themes to it. For some reason this was controversial. There is a reason why you don’t see 50 year old guys in the clubs every weekend. There is a reason why your peer group diverts tremendously in your 30s. There is a reason why a lot of people live with tons of regret at the end of their lives (just read Regrets of the Dying - source. The FIRE people definitely fall into the second camp)
This post is going to cover that.
Note: Since Meme coins have had another nuclear bomb dropped on them, we’re covering that for paid subs in a short section at the end.
Part 1: People in their 20s
Some say that your 30s are the best decade. We’re actually in the camp that it’s 20s. If you have second order thinking (which no one has these days), all the rewards in your 30s and beyond is *because* of making smart decisions in this age band.
In general, you should write down all the stuff that you can do when you’re young and be sure to do them. We know *TONS* of type A people who would fall into the FIRE/frugality camp that didn’t do anything in their 20s. They lived at home saving every penny and never went out. Playing video games and other cheap forms of entertainment for 5-10 years straight. Every single one of them is now a strange and boring zombie.
Similarly, there are a lot of guys who spend every single nickel going out to party until their bank account reads $50 at the end of each month. Hard to get ahead relying on an employer to increase wages more than inflation and saving 1% of what you make.
Get Rich Without Giving Up Your Life - Ala Efficiency
It actually isn’t too hard to strike the middle ground. The tricky part is being smart/advanced enough to figure it out.
No one expects a 21 year old to be making millions per year
No one cares if you’re drinking $5 wine or drinking Louis XIII
Performance bars are much lower at the W-2 because your expectations are so low. Copy pasting numbers from a PDF into an excel sheet is something you could have done in 6th grade. Unless you’re really trying to mess it up, impossible to fail
You’ve got enough energy to party and work out the next day (this dies around age 28-29 for most)
None of your savings will mean much in about 10 years. The $20K you max out in your 401K won’t matter. If you don’t believe us, print out this chart and hang it on your wall. It’s actually a better message from this side of the web beyond investing in crypto/tech innovation
Just replace mutual funds and fixed income for more stocks and crypto and that’s basically the same direction. The most important metric is in Dark Blue and the massive decline in primary residence + retirement accounts (percent of wealth)
The General Premise: This means you can do a trillion things and still have energy. This is another reason why your 20s seem to last forever. You can *easily* party 2x a week on Thursday and Saturday with no issues. You can easily live with roommates and go on cheap dates with no impact to your future. None at all.
In fact you can do all this and work 5x a week at night (or in the morning), on your escape from Shawshank. If you’re ultra risk-averse you can even start a time for money consulting type side hustle to prove to yourself that it is possible to make money from the internet.
If you want to work Backward, you can deduce the following are worthless
Fancy car, fancy apartment, fancy watch, name brand/designer shoes/clothing
Staying at 5-star hotels instead of taking an international trip to expand your knowledge of different cultures
Going to happy hours to meet the same people you already know
Investing in T-bills and bonds
All of those things will be around when you’re 40, 50 and 60. What won’t be around is your favorite music artist, the ability to stay in cheaper hotels, ability to fly economy without feeling a thing and the ability to drink + workout the next day with ease.
Accumulation of Knowledge: While people say the goal is to accumulate assets, it is a game of accumulating knowledge. It isn’t good enough to know how to make money.
You could end up with relationship issues or health issues if you neglect social life and health for extra digits on a screen. We can’t imagine how these guys feel when they are 45 and missed out on crazy parties, music venues, international travel etc. Just doesn’t make sense at all.
The goal is to basically accumulate knowledge (and skills) in a wide range of topics: major ones being how to earn money, how to invest it, how to meet the right people and of course how to stay healthy and fit. If you’re learning something new on every single one of those topics, by the time you’re 30, you’ll know more about life than the typical guy who penny pinched for a decade. And.
You’ll blow past them in net worth during your 30s.
Summary
Main concept here is you have unlimited energy. Getting 6 hours of sleep or 8 hours becomes a rounding error. You can fail at 5-7 online ventures. Doesn’t matter. As long as you’re learning a skill (copy writing, ads, tech, etc.) it just doesn’t matter. The information you get from failing is worth 1,000,000x more than the 7% returns you could have got from an index fund.
It’s no different than a sport. Some guy can read about the perfect tennis serve but you’re going to bet on the guy who has tried it 100,000x versus the guy who read about it for 10,000 hours and took zero attempts.
Part 2: People in their 30s
At this point you have a bit of everything. You have enough energy to still go out but you’re not able to hit a personal best after slamming 7 shots of Tequila on Saturday. You can easily work out but the quality declines in a near linear fashion until late 30s (nearly impossible… unless you’re an actual alcoholic still on the treadmill).
At this point you have to make a lot of major life decisions. People think they can wait and find some unicorn girl at 40. Even if you’re rich the quality you’re attracting is terrible. The kind of girl purposely hunting/interested in guys at age 40… well you can guess why. It goes both ways. Why is the girl childless? Why are you childless? Both parties also carrying huge baggage at this point.
The majority of these relationships end in separations for obvious reasons. No shared struggle. No shared battles.
2 years of honeymoon period where the girl (or guy) acts perfect and then the standard 7 year break up.
It’s a common phenomenon…
We’ve already written out the way to find a good *mother* for your kids and don’t have time to debate it (source). The guys debating this? They speak one language, have no experience beyond a 2 week vacation and spent all their time pulling girls from clubs in Vegas/Miami/NYC where it’s the same cookie cutter lifestyle.
Nothing wrong with it, just don’t claim a high social IQ when spending a whopping 1 month in a different country. “Yeah bro i went to Medellin, Cancun and Kyiv for 3 weeks each! I got it solved in just three trips! I only speak english!”
Good luck with that.
Major Decision: As usual there is always a chance of finding a unicorn. If you find an ideal person at 25 or at 40 that’s great. We don’t care. The statistics and reality suggest the same: 1) you want to meet someone *before* you are minted, 2) you want some significant shared struggle - real relationship fight and 3) you are looking for someone who will be a good mother, not just the hottest person at Hooters or whatever.
Want a good way to figure out if you’re being cooked? Just use this barometer
The more elaborate the show needs to be the less interested in you the person is. Even if you don’t get legally married, the show will be a good indicator. What person would drop $50K on a wedding when that could be towards a down payment. You already know the answer.
Before Moving On: We don’t really care if someone wants to have kids or not. That’s their decision. Similarly, there is no reason to get legally married either if you’ve got some plan to raise your kids correctly in a mother + father household.
The point of this section is that you need to make this decision during the decade at *latest*. You can’t make it in your 40s or 50s because the probability of failure is just going to hockey stick up. (blah blah insert cope exception to the rule anecdote like Trump, just don’t care).
Wealth Acceleration
Assuming you’ve made the right decisions, your 30s = wealth acceleration.
Again.
Assuming you made the right decisions.
At this point you’re in two camps: 1) you already quit because you started trying to build something in your 20s or 2) you started late with the build and are currently making a lot in a W-2 - escape hatch is building.
Either way, your wealth is increasing at the same percentage change as when you were flat broke. Everyone else relying solely on W-2 is getting 5-8% at best while you’re still clipping 20, 30, 40 or 50% gains in wealth.
Instead of adding $20K a year, you’re adding $200K, $500K or even a million within short time frames. It snowballs out of control due to compounding knowledge.
While Stale with the $100K number ($300K-500K likely today’s number), Munger is correct in his general assessment
Back to Your Social Life: As you can see this creates a big chasm in your social group. The people who made the right decisions find each other via osmosis. The people who made the wrong decisions are all in group stink debating if it was all “luck”
Really hard to break into this group if you’re out of it. The same people were grinding for years giving feed back on pain points (ads, shipping, tax rules, deductions, contractors etc.). Really impossible to repeat those growing pains because who in the world wants to repeat that again!?!?!?!
Notice the same trend, shared struggle amongst peer group impossible to replicate later.
New Problems Show Up: Now the second problem. Ability to meet new people declines by definition. People will know you’re successful even if you try to hide it. Who else has the time to go to the gym at 10am or 2pm? Who else is on a cross country flight at 10am? Who else is at the beach on Wednesday morning every single day during “work hours”. People will believe you’re unemployed for a week or two… but they catch on.
You can’t and shouldn’t trust new people easily. Unless there is a direct link from someone you trust, it doesn’t make sense to take that type of risk. Hope you chose wisely!
Autist Note: The typical cope is that rich people are lonely. Couldn’t be further from the truth. They already have their peer groups locked down and don’t *need* to meet anyone new for “networking” or whatever they call it these days.
Part 3: Results are In and Things Get Weird - 40s
Could be as early as late 30s or as late as mid 40s. In general, if you did things right you’re now seen as some sort of figure head and advisor to anyone around 30 or younger. Hard to explain it but at this point you’re seen as the adult in town.
In general, if you decide to have kids, you’re just not going to care about much else. Kids, health and work is all you’ll care about. This ties in with the 30s section. If you have kids you end up meeting new people through your kids (their parents). This is also why luxury neighborhoods with the top public/private schools won’t be declining any time soon.
Only a dead beat would want their kids to be around low quality peers.
Adding onto this, if you don’t have kids, the ones with kids are going to fade away. A single guy on the scene is not going to mix well with a bunch of 2-4 year old kids. Just doesn’t work that way. Both lifestyles are massively incongruent. Interactions across those groups drop off a cliff. Outside of work related stuff, there is limited overlap since weekend and weekday activities are not even close to the same. Going to take your kid to play baseball is not going to line up with happy hour.
Systemizing Everything
The good news is that your work hours drop off a cliff as well. You’ve already killed yourself creating wealth and a process for evaluating work has been developed.
This means that all your future endeavors are systemized.
Work hours plummet. Unless you’re one of those workaholics or Elon Musk, you’re not going to be burning the midnight oil anymore (outside a random flare up once a quarter or so).
Becomes Monotonous: This is a real issue. Unless you purposely try to do new stuff, you’ll get bored incredibly fast. It isn’t because you’re a boring person in this case, it is because there is no real excitement in the operation. Say you could spin up a new business but you know the returns would add at maximum 5% to your net worth. Is it really worth the headache? Probably not.
This is a constant problem and unless you force yourself to take a few, you’ll be buying sports cars, collecting stamps and other weird things in no-time. Our recommended strategy is to go ahead and learn those new small ventures. Even if the returns are not going to match your core competency it is still better to learn something. Just avoid leverage since you want to be in the green with each venture.
Large Gap Widens: You already developed a gap between you and the original peers 10-15 years ago. Each year that gap widens significantly. After about 5 years or so your life is unrecognizable in every way: where you live, how you live, how you think, health, life experiences etc. A year for you is more than what most people see in 5-10 years, collecting an unfathomable about of random information in the process.
Generally speaking people fall into four groups: 1) people that will forever be in the corporate grind, 2) people who tried a bunch of hail mary ideas that didn’t pan out, 3) people who never really cared about money at all doing something to pay the bills in the same city they grew up in and 4) successful entrepreneurs
That’s really how it all breaks down. If you end up making it, your neighborhood is going to be 70-80% biz owners, 10% people who grew up in the same area & stayed and 10% extreme corporate types who got really big in the industry (think head of investment banking, not just MD).
Focus on Longevity
The downside of course is that your performance on the physical side begins to fade. You see a significant decline in everything: speed, endurance, flexibility etc. Don’t bother us with TRT/HGH (we’re already positive on these things) it still doesn’t do enough. Otherwise 50 year olds would be playing in the NBA and the NFL.
Tennis and Golf: This stuff has been around for ages (for a reason!). It’s the best long-term health activity. You can still do other things (lift/bike) just know the default answer is tennis and golf.
Most don’t make the transition. They think that they can just do basic activities. This leads to an eventual long-term structural injury. Without a wide range of motions, people overtrain singular exercises, leads to overload, then a single popped tendon/ligament and you’re out for years (not even months).
A slower moving version of the Cross Fit trend which injured hundreds of thousands of people. Slower and the injury is more severe/long-lasting. Many of these injuries end up being life-long problems - don’t be the guy playing Rec basketball with middle aged dudes + anger management issues.
Longevity is the focus of people over 40 and if you’ve made it financially you’ve likely added at least 5-10 years to your lifespan (average of 88.9 years and 87.3 for men in the top 1% of income). Since men tend to obsess more about getting rich, you see a steeper slope in life expectancy at the top 10% (less stress).
Part 4: Examples are the Best!
For anyone with fond memories of looking at the back of the book to learn things in school, this will resonate. Here are some various decisions and why they make more sense to delay or do today.
Hitting Nightclubs/Bars: Go ahead and do this in your 20s. Unless you somehow found an ideal match, you should be going out Thursday and Saturday to simply enjoy being young. If you’re deciding between that $10,000 watch or booking a trip to Germany to party in Frankfurt, the answer is certainly Frankfurt. Go in economy, scam the miles points for credit cards and get it done for cheap. You won’t be able to do that when you’re 40 and the watch you’re thinking about buying will always be there (you’ll end up buying a more expensive one anyway)
$10K on a Biz or Extra $10K into 401K: There is basically no time when the 401K should win. While you should always use the boring 401K company match as a worst case scenario investment, there is *nearly* no situation in which your ROI is lower. You’ll learn more by testing demand for that E-com idea, spending some money setting up a consulting website or buying that first set of inventory since your demand test worked. You will learn 100x more things trying to start something when compared to the 7% long-term returns on stocks.
Vacation or Biz: This is a *it depends* situation. If you already have WiFi money running (say $5K a month), it actually makes more sense to take the vacation. Shocker! If you’re a single person but already have money coming in from W-2 and some WiFi money it means you need to keep your personal life in tact. You don’t want to wake up with a mega bank account and the stigma of being a sex tourist at age 35-40. If you’re on track, you’re allowed to have fun.
Trip to the Galapagos: If you always wanted to do this one, we’d actually skip unless you’re already 40. Logic is pretty simple. It’s a cool place. It’s different. It’s also going to be there in 10 years with a 99% probability. Delay trips like this in favor of things you can’t do later in life. If you’re a big fan of the NFL, go to the SuperBowl don’t go to the Galapagos just because you wanted to do an international trip. Flip it around and go for the event that’s one-time in nature.
Remain Congruent: If you’ve decided that you want to have kids in the future, you should not be taking Safari’s in Africa. Sorry. Doesn’t make sense. Deciding who you have kids with is 100x more important than money. The only thing more important than that is probably your health since if you lose it you can’t even live life. (Elon is proving this live on X with all his drama!)
If you spend your time at Vegas nightclubs and going to places with no chance of meeting anyone decent, that’s setting yourself up for failure. Life isn’t a Disney fairy tale for 99.99%. It’s a full time job and you should be putting yourself in an environment where the long-term outcome is higher. Can actually take a page out of the book of women - hovering around the right areas to meet people. Not going to see a bunch of 10/10s at the Goodwill store.
Conclusion/Summary
The same principles apply to basically all aspects of life: investing, health, relationships etc. You are playing a game of probabilities. Can’t complain about having bad dating options if you were hitting up E-thots every day and going to house parties with the 50 year old narco.
While you might be the exception to the rule, power lifting and playing football at age 40, the chances are slim that it works out long-term. The data is already out there to steer yourself to flexibility, lower overall weight to avoid injury and a clean diet.
You have to come up with a system for your investing and biz ventures. We could care less about price action for 1-2 years let alone 1-2 months. There are graveyards full of people who sold all their META stock at $40 or all their BTC at $2,000. *Our* strategy is to build stuff that can work for 5-10+ years. If for some reason you have a gift for options trading then honestly go for it, just know you’ll never convince us to go down that route. It isn’t a core competency and would probably cost too much time to learn
Final Note
Before signing off, if you still don’t have an idea on what path makes sense for you, just go through your childhood history. You’re going to find that you were naturally talented at certain things in health, academics etc. Ignore everyone saying to “make your weakness a strength”. Probably the worst advice we’ve heard. Right up there with “be yourself”
Instead all the value in the future is going to flow to the top. The top 1% in anything is going to do well. Figure out where you can be in the top 10%, top 5% and ideally top 1%. If you’ve got that down, success is all but guaranteed anon. If you can stick it through. Never seen a person grind for 5 years on their natural talent and fail (outside extreme bad luck like a car wreck).
Play the odds.