0:00
here is a question for you are you
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struggling to become a successful
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investor do you feel like you keep
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making the wrong moves in the market
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over and over again yeah that's a that's
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a great question stick and it's really
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difficult to do and I think
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most of us are definitely myself we fail
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at it so yeah I mean our brains you know
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they've evolved over the Millennia and
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they are not optimized
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or being great investors if so you are
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not alone many aspiring investors face
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these challenges so one
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we're gonna make a lot of mistakes
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two this is a very forgiving business
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you can be wrong even 98 of the time
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still come out smelling really nice
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that's why I have compiled insights from
0:54
legendary investor monish paplay who
0:58
shares his wisdom on how to overcome
1:01
these hurdles and Achieve success in
1:04
investing and if you want to have you
1:07
know great deep relationships
1:09
great friendships
1:11
then again that that same thing is
1:14
really important I think your
1:16
your friends need to know
1:19
that you've got their back and that
1:23
when they come to you they're going to
1:25
get very authentic answers even if those
1:28
answers are not what they want to hear
1:30
the clips are from a podcast episode
1:33
produced by the investors podcast
1:35
Network in their podcast we study
1:38
billionaires
1:40
you find here the link to the podcast
1:43
episode and also in description below of
1:46
this video enjoy the show and this clip
1:51
monish papri discusses the challenges
1:53
our brains pose in becoming great
1:56
investors and how understanding our
1:58
cognitive buyers can help us overcome
2:01
them
2:02
yeah that's a that's a great question
2:04
stick and it's really difficult to do
2:06
and I think
2:07
most of us definitely myself we fail at
2:10
it so yeah I mean our brains you know
2:14
they've evolved over the Millennia and
2:17
they are not optimized
2:18
for being great investors they were
2:21
really a brain with optimize to help us
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survive
2:24
and surviving on the African Savannah
2:26
needed a certain type of wiring and we
2:29
need a different kind of wiring to be
2:31
great investors so our brains have a lot
2:33
of quirks and a lot of biases and I
2:37
would say reading monger's essay and
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reading cialdini's book is going to be
2:43
helpful in at least being aware of the
2:46
pitfalls but we are susceptible to it
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you know the commitment and consistency
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biases a number of the biases that come
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in and that are very much part and
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parcel of who we are it's just part of
3:00
who we are the best that we can do is
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try to be aware of it
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and try to sidestep
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as many of the pitfalls as you can but I
3:12
don't think anyone has succeeded in
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sidestepping
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all the pitfalls so yeah I mean I think
3:18
that's a great essay and it is helpful
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it's helpful to reread it and it's
3:24
helpful to be aware
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that we are quirky living creatures with
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quirky brains which don't necessarily
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follow a you know rational path all the
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time
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after watching that clip it's clear that
3:41
recognizing and overcoming our cognitive
3:44
biases is crucial for success in
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investing
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now let's hear from monish on the
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importance of patience and holding on to
3:56
great businesses for the long term
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this one we're going to make a lot of
4:04
mistakes
4:05
two this is a very forgiving business
4:08
you can be wrong even 98 of the time
4:12
still come out smelling really nice
4:14
and three
4:16
that is only going to happen
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if you are able to buy businesses with
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great economics
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at reasonable valuations
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and then hang on to them forever so when
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they get fully priced they don't get
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sold
4:34
when they get overpriced they don't get
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sold
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it's only possibly when they get
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completely ridiculously egregiously
4:43
overpriced that you can consider selling
4:46
and so this framework of circle the
4:50
wagons
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is very fundamental
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I think it's very hard to beat the
4:55
market if you don't have this framework
4:57
because you're going to be
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cutting the flowers
5:01
and watering the weeds and what we need
5:04
to do is make sure we don't cut the
5:06
flowers and it really doesn't matter
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whether you water the weeds or not but
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the important thing is you just don't
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cut the flowers it's okay if you want to
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water the weeds
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as monish explained successful investing
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requires a long-term approach and a
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willingness to hold on to great
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businesses
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in this next clip monish shares his
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thoughts on lifelong learning and how it
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contributes to becoming a better
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investor well I very much enjoy the game
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and one of the things with this
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particular game it's actually very
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similar to bridge
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is that you know Bridge is a game that
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would take you 15 minutes to learn
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and you cannot Master it in a lifetime
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so you can keep learning forever there's
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really no Plateau that shows up in
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Bridge even if you're playing 30 40
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hours a week for your whole life you
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would still be learning and I think
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investing is very similar in the sense
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that this is a game with a lot of twists
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and turns and anytime you look at a
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business
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the my rate of factors that affect where
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it might be in the long run
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are so diverse and some of them you may
6:21
be able to understand some of them may
6:23
be within your circle of competence
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a lot of them may not be so you know
6:27
lifelong learning
6:29
is going to serve you very well so I
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think I am as excited
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about the investing game as I was nearly
6:37
30 years ago but I think what has
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happened in the previous almost three
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decades is that more competency has been
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built up uh more mental models have been
6:49
refined and Incorporated and so
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the pattern recognition
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is probably faster
6:59
now than it used to be and it's broader
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now than it used to be
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continually learning is key to staying
7:08
ahead in the investing game as monish
7:11
demonstrated next we will hear monish
7:15
talk about the importance of recognizing
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mistakes and learning from them in
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investing
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yeah so you know we have to separate the
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signal from the noise
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as we saw with these examples of the
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nifty 50 and
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naspers and Buffett and so on is this is
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a business with a high error rate
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even the best investors will be wrong at
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least half the time
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and so one of the backdrops we have to
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keep in mind is that if you have a
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portfolio of 10 stocks
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more than likely half are mistakes now
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you may not lose money on them they may
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not just compound at a high rate they
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may you know
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be four percent compounding instead of
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15 that you're expecting for example
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so knowing that there's a high error
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rate and
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separating the signal from the noise
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when you have a good amount of data
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telling you
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that the signal is saying that you were
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probably wrong
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then yeah you
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you cut your losses then you move on
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acknowledging and learning from our
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mistakes is a vital part of becoming a
8:29
successful investor now let's see what
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monish has to say about the significance
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of Truth and authenticity in building
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trust and strong relationships
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yeah well I think that's a great
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question it is going to feel
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uncomfortable
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I think that it is the small white lies
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are just very comfortable you know you
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don't you don't hurt anyone and
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why would anyone care and how is anyone
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ever gonna know that you really thought
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it didn't look great you know you know
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so you move on but it's not authentic
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and I think that many times when we meet
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people
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we don't know why
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but we sometimes just don't want to be
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around certain people we can't put a
9:17
finger on it and it may be that there's
9:19
too much implicit and explicit lies
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around what that person is saying or
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doing
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so I think that the inversion of that is
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that if you want to build trust
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you have to make a commitment
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to the truth
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and the truth is going to not be easy
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many times
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but I think that once you kind of cross
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that Rubicon and you know are on the
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other side what you're going to find is
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that trust goes up a lot
9:55
and basically this world functions on
9:58
trust
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it doesn't function on contracts the
10:03
best contracts are ones that you never
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look at after you sign them
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I think that if you if you want to have
10:10
a lot of success in business
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you have to have a very high standard
10:15
for Candor and integrity
10:17
and if you want to have you know great
10:19
deep relationships
10:21
great friendships
10:23
then again that that same thing is
10:26
really important I think your
10:28
friends need to know
10:31
that you've got their back and that
10:35
when they come to you they're going to
10:38
get very authentic answers even if those
10:41
answers are not what they want to hear
10:44
and so those are I think these are these
10:47
are very powerful principles where
10:50
once you gonna get comfortable with it
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and start to apply it in your life
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the paybacks are so enormous that it
10:59
just becomes a no-brainer I think any
11:01
other way of living
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it's kind of dumb and it's going to make
11:05
your life
11:07
a lot more pleasant
11:09
you know it's very easy when you don't
11:12
lie because you don't have to remember
11:13
your lies
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you know this makes it really simple
11:17
anytime you're saying something or
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talking about something you don't have
11:22
to remember oh I said this and I said
11:24
that and I got to keep consistent with
11:25
that or any of that just say the truth
11:28
you know and and that's the end
11:31
trust and authenticity are essential for
11:36
Success both your business and personal
11:38
relationships finally monish shares his
11:42
perspective on the importance of openly
11:45
discussing financial matters
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yeah so actually what what I have found
11:50
is that you know your remarks about
11:52
people don't like to talk about money I
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think that is universal across cultures
11:59
you know guy always gets a chuckle
12:03
because many times he and I
12:05
will be in a conversation with someone
12:09
who's having has some
12:13
important issues folk in the road trying
12:16
to figure out what to do you know I'll
12:19
be asking a bunch of questions to try to
12:21
get
12:22
the data to try to help the person and
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one of the first questions
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will go to really understand in detail
12:30
the financial situation you know what's
12:32
the network what's the income what's the
12:34
expense and all that and guy always kind
12:36
of goes into a cubby who'll say oh there
12:38
we go again she's asking all these
12:39
uncomfortable questions you know and and
12:42
when he's he's now learned that monish
12:45
is going to ask those questions
12:47
okay and and what I find surprising is
12:52
the people who hear those questions who
12:55
have never answered those questions to
12:58
anyone
12:59
openly give the answer
13:02
and then they say I want to let you know
13:04
I have never discussed this with anyone
13:06
no one knows this please don't I said
13:09
it's all confidential we're not going to
13:11
talk about it to anybody but people
13:14
actually get relieved
13:17
to be able to share the data I recently
13:19
I had a call with a friend who wanted
13:21
advice career advice you know and he's
13:25
at an age where he could retire or he
13:27
could take job a or Joby or whatever and
13:30
one of the first things I asked him is I
13:32
I needed to know his financial situation
13:34
before I could tell him what made sense
13:37
for him you know and so he shared his
13:41
information that he's never shared with
13:43
anyone you know other than his wife had
13:45
never talked about it I don't think his
13:47
kids are aware of it but that gave me
13:50
the information to be able to be most
13:53
helpful to him and also I think he felt
13:56
relieved that he was not having a
13:58
conversation around eggshells you know
14:02
where I'm in a vacuum you know trying to
14:04
say well if this is your situation then
14:07
do this I actually knew exactly what a
14:09
situation was and I could tell him what
14:11
I would do in that situation so yeah I
14:13
mean I think I think people don't like
14:16
to talk about money but many times when
14:17
they are confronting different issues
14:20
those conversations can be very
14:23
Enlighten the Lord for them and I think
14:26
it's important
14:28
that in a safe and confidential
14:31
environment
14:32
with the people near you when you're
14:35
trying to you know help them with some
14:37
things where that information would be
14:39
relevant that go there you go to the the
14:42
land you're not supposed to go to that's
14:44
okay open and honest discussions about
14:48
finances can lead to better decision
14:50
making and overall Financial well-being
14:53
I hope you found these insights from
14:57
monish popular valuable in your journey
15:00
to become a successful investor if you
15:02
want to hear more insights from Manish
15:05
papri you'll find a link to the full
15:07
podcast episode from the investors
15:10
podcast Network who produces
15:13
we study billionaires in the description
15:16
below remember to like share and
15:19
subscribe for more content like this
15:22
good luck and may your Investments
15:25
prosper