James Altucher - Reverse Engineering How Much Income You Actually Need

This is an intro. Intro, intro, intro.

Hustle and Float, Shark with your boy.

My boy, Matt Wolf.

Hey, what's up, everyone?

You have that slow. What's up going on today?

I'm feeling slow today.

Are you?

No, not at all. Actually, I'm feeling pretty fired up after the couple interviews we did today.

So. Today? Yeah, dude, I'm, like, super jacked up after this interview.

Well, this one, I flat out said right in the beginning that I'm a fanboy. And I was really excited to this interview because this is somebody who I legitimately do listen to a lot of their podcasts, and I have read multiple of his books and I've. He's been in my ear a lot, both in audiobook format and podcast format. So this was. This was one that I was super excited to talk about.

Cue the fanboy alarm. I wish I had sound effects.

Okay. Yeah, okay. Okay.

I don't think we need a fanboy alarm.

Oh, yes, it's obvious. All right, so we'll dance around it anymore. James Altucher is obviously on this podcast.

Podcast.

Because you probably saw the title of the episode. So we're talking about James Altucher.

Isn't it funny how we always try to, like, kind of sneakily hide who we're talking about until like, two minutes into the intro, but they know exactly what we're getting into?

I don't know why we do that. It's just we're being dramatic because we're thinking that we're going to be dramatic, but we're really not.

It's because we feel like we need to say something in an intro when really, like, we could probably just jump straight into the content and people would be just as happy.

That's a good point. Sorry, we are not trying to waste your time, but biggest takeaways, money man. So he's gonna lay out this very practical thought exercise that you can do right along with us because he points it right back at us, which is super cool. And I felt. And you'll hear it in the pocket. It's a sense of freedom, understanding what is actually required of you to create the wealth that you want in your life. Whatever wealth definition is for you. Money, giving back, whatever. But he lines out very systematically, in the most conservative ways possible, too, with how to keep that money going. So that was my biggest takeaway. I loved it.

Yeah, no, it was a great discussion. We talked about. I mean, we got a real big overview of his entire story arc and, you know, how he started HBO and sort of progressed through things like angel investing and got involved in podcasting and writing and we get that whole story arc which I was really fascinated by because I haven't heard all the intricacies of it. We actually talked about angel investing and how to pick the right investments and how he did like his philosophy and what he decides to invest in. We talked about like money and how much money you actually need and how to, how to invest that money to live off of it fairly easily and passively and how to kind of get everything you want in life.

James called me out, man.

Yeah, he called you amateur hour, which is cool. I agree.

It was Matt.

I'm just kidding. But yeah, it was, it was great. And we took notes on this one like always.

So rush over. Be quick to hustle and flowchart.com comp c o m P we take them notes for you. Very detailed action guide. And especially after this one, I am expecting these notes to be nice. Formulaic process of. Here's how you can create that wealth for yourself. And in this bulleted form, you're probably going to feel like, oh, wow, that's a lot simpler. I'm not going to say easy. It's a lot more of a straight line approach where I think you'll get the feeling that it doesn't involve a lot more than probably what you already have, your specialized knowledge and personality and connections.

Yeah. So hustleandflowchart.com notes. We took all those notes for you. You can get them there for free if you're quick. Those notes do go away if you don't get them within the first week or so of this episode coming out. Also egpletter.com we've hammered it to death. You've heard of, you know about it. That's how you can support the show. Go sign up for the EGP letter@egpletter.com It's not just a letter, it's a membership community. We do live training calls. We, we do, we add extra training as we experiment with new traffic sources and new marketing strategies and we share what's working with you in there. And of course you do get the printed newsletter mailed directly to your door every single month.

And a cool community in there too.

And a great community which. And everybody raves about the newsletter. So you're going to want that. And it also supports the show and keeps it alive and pays the bills of keeping this podcast going. So that's over@egpletter.com now let's go chat with James Altucher.

Hey James, welcome to the show.

Matt and Joe, thanks for having me on the show. I'm really grateful you asked me.

Thank you. I appreciate that. Garen. Shout out to Garen because I know he's checking it out. Appreciate the connection there. And yeah, I don't know, it's just so many fascinating topics that you bring to the table with your podcast and you newsletters and books and so many things.

I mean, quite honestly, you're someone that we've wanted to chat with for a while. I've read Choose Yourself, I've read Choose Yourself Guide to Wealth. I personally listen to your podcast a lot. So really excited to chat with you. You're sort of one of my online celebrity guys that I'm a bit of a fanboy of. So I'm looking forward to chatting.

Freshen out.

Excellent. Thank you so much.

I've got to reread those books. They're pretty good, but I sometimes forget them. My.

Probably pretty ingrained in there by now.

But yeah, you've got like a pretty eclectic backstory. You worked at hbo, you worked for, I believe, the New York Times. You did stuff in venture capitalists, you founded startups, you've had multiple bestsellers. You've gotten rid of everything you owned and got rid of the place where you lived. So a lot of story and a lot of talking points that we could go down. But do you think you could give us a real quick sort of story arc of how you kind of got into being an entrepreneur and your sort of story arc to now?

Yeah, I mean it's hard to do it quick because everything is. There's so many ups and downs. But I was.

I really wanted to either write a novel or make a TV show. So I was working at hbo, but I happened to have had a technical background and I knew about this thing that nobody else knew about then called the Internet and the World Wide Web, triple W. And nobody was doing anything with this at the time. This is like 1994 was just beginning to make kind of the mainstream media. Even though it had been around a few years at that point. But it was kind of coming out of more academia and nobody knew anything about it. So I, I remember I was really obsessed with doing a TV show. That's all I wanted to do. But I, my brother in law was in a CD ROM business. He was making CD Roms, which is an industry that doesn't exist anymore. And he was kind of going out of business because this industry doesn't exist anymore. So I'm like, oh, how about I show you this thing called the web. And I showed him how to make a website. And he's a designer, so he was like, oh, this is neat. And he learned how to design on a website. But I still know all the software stuff. Now you don't really need to know software to make a pretty good website because you could use things like WordPress and all that. And I.

You know, then a friend of a friend of a friend needed a website done. So he and I together made a website. I was dead broke. I was working at hbo. My salary was nothing for New York City. I had like a roommate and in one room and we made this website and I got $17,000. I was like rich, like literally like in my mind I was like the richest person in the world.

Sure.

And so I moved to an apartment that I liked and I just, I remember I gave the guy, the landlord, he was the, he was the owner of the Chelsea Hotel on 23rd street in New York City. I gave him this bag of cash, $17,000 cash is 94, 95. And I said, I just, I want to. What can I live in for a year with this? And he looks at the cash and he's like, are you a drug dealer? And I said, no, I work at hbo. And he said, well, can we get free cable? Sure, whatever. And so he put me in a room and I started living there. And I lived there for quite some time afterwards. And, and, and then it was just I realized, oh, okay, this was kind of neat. That money, money bought me things. And so I really hated doing the work. But during the day I worked at my job and then at night I worked with my brother in law. And more and more people were starting to build websites. They heard about this web thing. So we built American express dot com. We built. Then we started building all these websites for entertainment companies and in particular.

Like every rap record label website. So like Loud Records, Bad Boy Records, Death Row, Interscope, all these websites, Jive Records stuff for Sony bmg. And then we started doing all these movie websites. We did miramax.com, new line, fine Line, October Films, which doesn't exist anymore. Time Warner.com and HBO.com actually, because I was still working at HBO. So I essentially kind of hired myself to do HBO.com and then I was in business and so built that business, sold it, made a lot of money, lost everything.

Wanted to figure out how I could, you know, I felt like I had won the lottery. I was really depressed. I had lost, I had cashed out. I was smart Enough to have cashed out. But then I made all these bad investments and I thought to myself, huh, I don't know anything. I thought I was smart, but I don't know anything about investing. And I had just won the lottery because I benefited from this Internet boom. And now what am I going to do? I'm basically stuck. So I, you know, I lost my house, I moved 60 miles north and like the small. I'm probably the only person who.

Downsize by moving out of New York. Usually you upsize when you move out of New York, New York City.

So I went from a 5000 square foot place to a 1500 square foot place in like the middle of a blizzard and with my two kids and I had no money and no income and I had to figure out how to day trade to make some money. So I wrote some software to help me day trade. I was, I had a technical background, so I wrote software to model the stock markets. And then I figured, oh, you know, it's working and I'm going to raise some money. So I started, I go on and on, this goes on. But I basically started several businesses, lost everything every time I had to get. There's like three skills. Making it, keeping it, growing it, and I was making it, but I couldn't keep it or grow it and, or I couldn't keep it long enough to grow it. And it took me a long time. And I was really, I kept making it, losing it, making it, losing it. Or I would make it and then the IRS would take a big chunk or I would. And then the financial crisis would happen, or I would make it and then I would invest it. But I was still learning. You know, some investments don't pay off for, for years I was just doing a lot of angel investing and some were great, but they, you know, I'd be right on the brink of going broke again before an investment would pay off. And so I was always scared, always depressed, always anxious. And it was just a horrible, it's just a horrible thing when you're like desperate for money just to live. And I never had. But once you get that entrepreneurship bug, you don't want to work for anyone again. One time I did take a job with a private equity firm. And I just remember being in the middle of a meeting and I was so bored. It was a meeting I had set up, like, maybe we should invest in Brazil. Brazil's hot. And so I invited all these Brazilian investors and I'm in the middle of this meeting and I was just like, so Bored and I was feeling sick and.

I left my jacket on the chair. Like I was wearing a suit. I left my jacket on the chair and I said, I gotta go to the bathroom. I walked out and I just went to the elevator. And it was the, it was the Trump building on Wall Street. We were like the 45th floor, whatever. I went all the way down, walked to the subway, took the subway to the train station, took the train 60 miles north to where I lived. And I never went back again and never spoke again either. And that was like the one. I was just like my second or third day at this particular job. And I just said, I don't know what's going to happen. I just hope one of my investments comes through. And one of them did a little bit. And then I started just writing and focusing on that.

Did you ever see anybody walk around with your jacket in New York City?

No, but I had one of those generic blue jackets.

Yeah.

Just wondering if it was too special.

Was there ever like a turning point or like an aha moment for you? You mentioned that you struggled to keep and actually grow the money. Was there ever any sort of aha moment or turning point for you where it kind of clicked and you started to figure out how to keep more and more of it?

Yes, the turning. There was like a couple of turning points. Doesn't happen like all at once, but, but there was two types of turning points. But I'll, I'll focus on the one about keeping money, which is I, it's a mantra. I, I say every single day, which is I am the stupidest person in the world. So I myself of that over and over again. And then I'll be able to keep money whenever I think I'm intelligent and I, oh, I could make a decision on my own. This company looks good. I'll be the only investor and I'll take a third of the company and I'll help them using my genius and going to be the next Google. Those investments 100% of the time and I'm not getting 100% of the time fail. I have never had an investment that I discovered win. Yeah. So the flip side of that is somebody who's, if someone who's a billionaire, great investor calls me up or somehow I figures out is like in an investment that at the same level I can get in. Then I say, oh, I'll invest alongside this guy and I'll never have to think about it again because it's his job to think about it. Those investments almost 100% of the time, work out.

Just deciding that is my angel investing philosophy. And I'm talking about angel investments. Actually, the same thing applies to stock market investments. But this is just. I've made most money on angel investments, so that specific philosophy.

Has stopped me from losing money and has, you know, people say, oh, invest. If you're an angel investor, you're only going to have one out of ten investments work out. Nope. If I invest alongside great investors, then 100% of them have been working out.

Yeah, it's always in what I've heard in that space, and this probably goes any space, is you're investing in the people and the partnerships, not always the idea. Do you find that to be pretty much the truth behind it?

100%. And so I used to have more rules. My only rule now really is, are there people going into this investment with me who are smarter and more successful? If yes, invest. If no, then don't invest. But I used to have more rules. I used to have a rule, which I kind of still do. But you'll see what I mean in a second. I used to have a role. The CEO has to have bought. Sorry, The CEO has to have built and sold a business before. And the sold part is very interesting. People don't realize that because selling a business is just as hard or even more difficult than starting a business. Like, I'm in many. I've been in many good businesses where the business was good and just keeps growing and growing. But the CEO doesn't know how to monetize the business into cash. Then what's the point of the investment? The investment's no good. And, you know, also the way the CEO presents himself, presents the company, creates the perception around the company. You know, again, like you said, it's about investing in people. So when the CEO sells the business, some other company is making a very big investment in that person, the CEO. So the CEO has to be the type of person that other billionaires. Because you want to sell for a big amount. The CEO has to be the type of person some billionaire wants to be friends with. And so. So it used to be. It used to be a rule for me. Oh, they have to know how to sell a company. They have to have that. They have to have done it before. But I realized that if I just follow the first rule, that kind of covers the second role because the billion. I'm letting the billionaire or the smarter person figure that out about the CEO. I don't have to figure it out.

Sure.

The less work I have to do, the better it is for the company.

Well, especially with the mantra, I am the stupidest person in the world, it's going to kind of force you to partner up and find the best people.

And as soon as, let's say a company CEO calls me up and says, let's say I'm invested and the company calls me up and says, james, I need your help with something, it's like I could almost just hang up again and never talk to them again because that investment was horrible.

Yeah.

And you know, here's the thing. I say that kind of almost in this self deprecating way, but the reality is I have had one investment where.

I was on the board and I was actually critical for the CEO had never sold a company before. And I actually realized before everybody else on the board did that he was on a almost like unstoppable.

Path to crashing this company the ground. And I just, I realized, you know, I looked at his cash flow, I realized how long it would take, even in a best case scenario for him to raise money. And it looked to me like he was going to be out of business within about eight months. And so he denied it. The other members of the board, I didn't seem to really realize it and I kind of just rallied. I had to put a lot of work into this. I had to rally everybody to agree with me. We forced the CEO's hand eight months to the day after that moment. He was not going to make payroll the next day, as I had predicted. And that like at midnight that night he sold the company. And so, and he made, he made about 12 million on it. And he was kind of kicking and screaming every step of the way. Very good guy. Just did not want to sell the company. Didn't really realize he had not done this before. He didn't realize how close he was to death the night before he realized and was, you know, we were busy trying to get all the board members to agree at that point. But that was one time where I was able to help out. And I realize now I have enough business experience that I can actually provide help. And in some cases I do. But. So it's a little too flippant for me to say I shouldn't help, but best case scenario is I don't have to help.

Yeah.

It's just a safer bet all along. Yeah. Go ahead, Matt.

So are you having people come to you all the time and pitching you on new businesses or are you kind of like keeping your finger on the pulse on like angel list or how does the deal flow work for you?

So, yes, People constantly pitch me businesses, but I don't really respond to any of those because if they are coming to me, then it's already no good.

It's again, I more try to keep connected with friends who have really good deal flow with other people smarter than us, or maybe my friends are smarter than me. And then I say, okay, if you're investing, just count me in. I don't even need to think about it. And the other rule I have is no more than 1% of my portfolio per investment. So this way, if it does hypothetically go to zero, okay, I lost 1%. But I also try to go because these billionaires are investing, they're not investing in things that are, oh, I Hope I make 30% on this. They're investing in things where they hope they can make 1,000% or more. So.

This way, if I lose, I only lose 1%. But if I win, I could make 10, 20, 30% or more in a really good situation. So in general, putting together a diversified portfolio like that is good. Now, you mentioned Angellist. That's a way to kind of systematize. I haven't done this, but it is a way to systematize the style of investing as you find investors who, successful investors who have syndicates, what's called syndicates on Angellist. And then you get to see all of their, you join the syndicate, you get to see all their, the deals they're investing in, and then you could decide if you're going to piggyback their investments and you pay them a percentage of the profits, which is more than fair. And that is a way, if I didn't have the current deal flow that I have, I could get just as good deal flow by doing that approach. I do believe that approach works.

Got it. Cool. Now, I want to go back really fast because it sounded like, and I think you said it a little quick there, so you built up all these amazing websites for huge brands and it sounded like you cashed them out and then did a lot of investing. Was that what it was right after that point?

Right. So I made, I, I sold that business for stock. The stock went from 2 to 48. I cashed out. It's about like $15 million worth. And so it was cash. I couldn't believe it. I was like, pretty much like reloading my Prudential stock market account, like over and over. I have this much cash, like, oh, my gosh, I did it. I never have to. Literally, I could turn my brain off. And never have to think again. Everything I've done up until this point was thinking, so I can get money and now just turn it off and do nothing.

And then I just was like, oh, no. But maybe, I don't know, I felt like this sense of scarcity, like, oh, I only made what, like this guy down. My next door neighbor made 100 million. He's not smarter than me. I should. 100 million. And so I started thinking, I'm really. I'm going to invest in all these companies. And I was just investing, like, the dumbest companies on the planet. And I lost. People were like, oh, what did you do to lose all that money? And I think they think I'm going to say, like, hookers and drugs. But if I was doing hookers and drugs, my guess is it wouldn't be $15 million worth, like, it seems like that's a lot of hookers.

That'd be a lot of hookers and drugs.

Unless, like, a hooker was like, I don't know, are there hookers out there who are like a million dollars?

There's a market for everybody.

And, you know, I remember being in college smoking pie. Didn't really seem to cost a million dollars for a joint, but. Although I hear marijuana's gotten stronger since I was in college.

But times have changed, really.

Just bad investing. And then also, you know, I like, bought. I had to buy the biggest apartment in New York City and then completely build it from scratch. It was like a. They made sails for sailboats. It was a factory. And I had to redo the whole floor from scratch. And that cost a lot of money. So it was just doing. Making just lots of a series of really stupid decisions in a row. And like, I used to go to Atlantic City a lot, so people were like, oh, you're a gambling. No, I would play poker and like any game, I would study it and try to get good. And then I got. I got pretty good. And actually I should have just stuck to playing poker instead of trying to be a fancy investor. Like, then I would have done really well, probably.

So it's a mental game, keeps you stimulated.

That way you could have been the next Dan Bilzerian. Yeah, yeah.

And I love games. And this was like a few years before, or it was kind of a couple of years before the poker TV thing happened. And so I would have been on the front lines of that whole move up, and that would have been great for me. And instead somebody told me, you're so smart and you know all about this Internet stuff. What are you doing just playing like a card game all the time? Because I was, I played like from 8pm to 4am every single night without a break, like seven days a week, 365 days a year. And after this guy said this to me, I was like, huh, he thinks I'm stupid for doing this. I better do what everybody thinks is smart. And so again, it's like all these things where I needed validation. I needed more money, which was ridiculous. I needed to think I was smart and doing the right thing. So I just, instead of doing what I wanted, I started doing things I didn't want and things that I wasn't good at. And at least I wasn't good at it then and just lost everything. And then, you know, and then I just, every time I would make money, I just wasn't. It just. I got in the money business, which is very difficult, a very difficult industry. And I learned a lot. I learned a lot about investing. I learned a lot in a lot of different ways, but it was just not what I really enjoyed. And it was just a very unpleasant, I want to say, 13 years that ensued from there.

Well, I'm curious of how you got past that scarcity mindset, the outside influence, the feeling like you needed more, even though you had more than most of the planet's ever going to ever have. How does that thinking pattern look differently now compared to.

Well, let's say I think it's impossible to 100% get rid of that. And, you know, some of that is rational. Like, I have kids to raise and, you know, family. And there's some things I like in life and some things, you know, I don't. And so you need a little bit of money. But I think in general, just understanding when enough is enough, like, you know, you start, you, you start to analyze, well, okay, if I had a billion dollars, for instance, what would I do with the money? And you look around, what do most billionaires do with the money? Well, they do. Let me ask you guys this. When you think of all the billionaires you know of, what do they tend to do with the money? Like, list like five things, four things.

So you see a lot of trips, there might be some private planes involved, cars, fancy food, experiences. It's kind of up, leveling the typical overhead. Bigger house.

Let me just stop you because maybe I asked the wrong question. I feel like that was like an amateur hour answer. Like, like fancy food. Like if you have, like, if you're a thousandaire, you can have fancy food.

Yeah.

Like, okay, if you Want to upgrade from McDonald's. Just. You don't need that. You don't need to go to Sizzler.

Yeah, no, I think. I think I get what you were asking. You know, you see guys like, like Bill Gates going and trying to, you know, eradicate diseases. You see? And, you know, the top two things that come to mind is they're. They're dumping money into other companies, and they're.

They're.

They're going in, doing philanthropy with it and trying to give back with it.

Right. So, so. And by the way, I didn't mean to. I'm sorry. I insulted about the amateur hours.

Like, I could. I could just, you know, and you. You could go right now to the best restaurant in your city and have, like, a great meal. So it's not. It's not like a. Yeah. Now if you want Wolfgang Puck to go to your house and cook for you, that's a billionaire thing. But, but anyway. But yes, they, like, take, like, you know, Bill Gates, Richard Branson, Mark Cuban, all these people, they. They buy their own jets. Okay, so that's like $150 million investment. They buy maybe like, Steve Ballmer of Mark Cuban, all these guys. Ted Leon says, actually, many people who have been on my podcast, and I think about. They buy a sports team. Like Steve Palmer bought the Clippers, the worst basketball team in the world.

I don't know. Jesse Etzler owns the Hawks, and that's kind of up there, too.

Okay. Yeah. So Sarah Blakely, just. So the Hawks, Steve Ballmer, the Clippers. And I'm not faulting them, by the way. They're basketball fans, so do what you enjoy. Mark Cuban, who started Broadcast.com because he wanted to listen to basketball games over the Internet, he bought the Mavericks. He bought it for 2 billion. It's probably worth 4 or 5 billion right now. It was a great investment for him. All these guys have private jets. That's $150 million investment they might buy. Like Ken Griffin, a hedge fund manager, just bought a $233 million apartment in New York City. Or Bill Gates. He's putting tens of billions of dollars into philanthropy. Now, I'm not saying.

I wouldn't want to do that. I'm just saying, all right? I can impact the world in other ways. I don't need to spend the next 20 years trying and maybe make a billion and then give all of it anyway away to society. Bill Gates has done a pretty good job. It's easier for him to make another 10 billion and then put that to charity, then to me, then for me to make 10 billion and put that to charity. So I'll let Bill Gates. He's doing a good job at it anyway, and he's eradicated malaria in Africa, for instance, or he's on his way towards doing that, and he'll probably do many other great things, and he's other billionaires to do the same. So all these things that billionaires do, I don't want to do. I don't want to. I'm not interested in sports. I don't want to own a sports team. I don't like business, so I don't want to buy another big business.

I don't want to own a 747 jet for $150 million. I don't want to own a $200 million apartment. I don't want to buy $150 million painting. So I'm just trying to think of all the things that billionaires do with their money or like people with more than 100 million or even more than 50 million. You have to sort of stay like, okay, there's nothing in my life. You get to the lifestyle where you say, there's absolutely nothing in my lifestyle that I would change even if I had more money. So then what do you end up doing with that money? You're just gonna either give it away or you're gonna give it to your kids, which is fine. You give it to your kids, though, and that's another way your kids are just an intermediary between your money and Wall street, because what are your kids gonna do with it? They're just gonna hand it over to hedge fund managers and mutual fund managers who are gonna take these enormous. We're gonna make millions of dollars on the fees and. And yeah, your kids will benefit, but hopefully my kids are happy in lives and get good jobs that they're excited about and make their own money. And whatever money I have left over the day I die, 50 years from now, when they're already potentially senior citizens.

They'Ll get anyway, but by then, I hope they would have figured out their lives. I don't have to think so much about that, particularly after I finish paying for their college and stuff. So, like, for instance, let me ask you guys, if you had a billion dollars, how would you amp up your lifestyle?

I know I would definitely. I would probably stay exactly where I'm at and just kind of upgrade a little bit of what's around me. But definitely it's security and also giving back in a larger way. There's a lot of projects I would love to. To do myself.

So I was big in the foster care, so I had seven foster kids with us. And I feel like there's a big need for that with aging out foster kids to mentor so that.

Yeah, I agree with you. So. Right. So. But you don't need, don't need money. Yeah, that will be.

Like I. So. So the lifestyle. So everybody has parts of their lifestyle and they would amp up if they have freedom. So with you, with freedom, you would spend more time mentoring foster kids, maybe take in more foster kids, maybe write or demonstrate to other parents that, hey, this could be a good thing for you and your family and your kids. So. But that does not require money. That just requires you to have freedom and feel secure with what's in your bank. And I put all these seven kids through college and that sort of thing, but none of that requires money. What would you do that required more money? Let's say you had the amount to maintain your current lifestyle for life without having to make any more money. What else would you do to amp up your life? Would you get a bigger house, for instance?

I would add on to my current house for sure. I love where I'm at.

I was gonna say the same thing. I don't think I'd move. I'd probably just build onto the house that I have and travel more, which I know that doesn't require billionaire status to do.

Yeah.

But let's actually take it to an extreme. So building onto your house. So I don't know how much money you would need to require to keep your current lifestyle going. But let's say you. I'm going to just make up numbers. Okay, sure, let's. Right now you live on $100,000 a year after taxes. I'm just making this up. So let's just say you put all your money in municipal bonds. And so you're making about 4% tax free. So you would need, like to maintain your current lifestyle. You would need just 2 1/2 million dollars cash in the bank. 4% is 100,000 a year. Let's say you need a little bit more because of.

Inflation. And this assumes you'll make zero money from now on, which is also a very conservative assumption because you're creative people, you'll do things, you'll make money, whatever. And so that's $200 million. Now let's say you want to expand out your house. I'm going to just go crazy. We're going to just build everything like an Indoor basketball court, whatever. You'll need another $2 million, roughly, give or take. But okay, now you need, now you need four and a half million dollars if you can do that house thing. And now you want to travel a lot. So if you want to travel internationally, you'll just go first class everywhere. If you want to travel domestically, maybe you say, hey, every now and then I'm going to do private. So let's say you needed instead of 100,000 a year, you need 200,000 a year because private cost of money. So now instead of four and a half million, you need another two and a half. So we just kind of came to a number for you of 7 million. And that will maintain your lifestyle and allow you to build onto your home and allow you to fly private jets domestically whenever you want. And that's seven million. It's not a billion, that's seven.

Everything else, unless you want to do one of these billionaire, like things, everything else doesn't require any other money. And even if you do all these billionaire things, what they're just doing is giving money away. So they're not even spending it on themselves. They're just like, they're buying a basketball team so they could. Because they love basketball. Or they're buying a jet so they could fly private even better than you.

But most of what they're gonna do is just let their descendants inherit most of this money, 99% of their money. They're just gonna, like, let their descendants, their children and grandchildren and whatever inherit it. And eventually the money will be gone, their great grandchildren will lose it. So it's useless to kind of. So, so, so 7 million, you don't even need 7 because you should kind of run that money down.

Yeah.

As you get old, like, why do your kids need $7 million? Like, they should work a little bit. And I'm not like, if you have set, like, don't. Like, if you have 5 million when you die, just give it to your kids. Like, you don't have to, like, make them suffer, but you also don't have to, like, hold on. You didn't make all of your money just so that when you die, you can give it to your kids. You make all your money to kind of spend a little, so it's okay to spend down. So maybe instead of seven, your actual number is five because you'll dip into your money a little bit. And even as you get older, maybe you'll buy private less. And you only have to do that, you know, the value of your house is Going to go up anyway. So you'll be able to. It's not like your add on to your house you lost. You just transferred it from cash to another asset. So you don't even really need to pay for that. Eventually you'll take that money out in a mortgage as the house goes up in value. So we probably just came to a real number of 4 million is what you need. Live well, travel around, build a basketball court in your house, fly private, do whatever you want, and your number is just four. Whereas everyone else is like, oh my God, I got to make ability. So when you, once you do the math, then it becomes clear, like, oh, whenever I feel like stressed, oh, I need more, I need to start another business, or I need to do work another 100 hours a week. Just, I could just tell myself, relax, like, you don't need a billion. Like just make, make the irrational number. That's sane. And then you could do other things that you enjoy in life. You only have one life. You can listen, oh, I like doing these five things. None of them have anything. I like playing chess, for instance. Okay, I don't need any money to do that, but I would love to do that an extra hour a day. Okay. You start to prioritize the things that are actually important to you that you forgot to do for the past 30 years.

And I think that's the biggest thing that I'm hearing you say. It's freedom. It's freedom and flexibility to choose yourself, but choose where you want to spend your time. You chess, me, it might be working out. Or maybe go in a stand up paddleboard around San Diego. Sure. Yeah, yeah, yeah. That guitar that we haven't been picking up for a while.

Yeah.

Well, maybe business isn't taking up so much time anymore.

And like, look, some people love business. Like you look at like Richard Branson or those guys just love business. But not everybody loves business. Maybe you love art or paddleboarding or games or spending time with your foster kids. There's lots of things in life to like, but we kind of grew up thinking, money, money, money, we gotta, oh, you're, you know, Mr. Rich, you could, you could do all this. Then you just spend your life giving it all away. All the money you work to make. And, and again, I'm not saying there's nothing wrong with charity, but Bill Gates of Warren Buffett, between them, they're given $200 billion to charity. That's enough.

They're doing pretty good.

Pretend I'm part of that. And it's like a microscopic dot IN that. And anyway, you could do charity in your own ways. Like, certainly when you have taken a foster child, you've changed someone's life for the better. That's just as powerful a charity and being a parent somebody. So there's lots of ways to have impact on the world other than just spending money.

Very true.

Yeah. So I love everything you're saying.

I'm sorry. I'll add to that. It's not just about feeling freedom and feeling secure. You kind of have to do the math like I just did, because otherwise you'll have an overinflated number that you think you need to get security. So I had an overinflated number that I thought I needed, when in fact, I was just a huge idiot.

And I think a lot of people feel like that's just what's necessary, but without that thought pattern that you just went through. And it'd be really interesting for listeners to do the same, think of their own numbers. I know I'm going to go back and put some real numbers to paper because it's a freedom just mentally. And then you see what you actually need to live and be happy and give back and all that.

Yeah. By the way, I assumed you were going to fly private occasionally. That's a big assumption. I assumed you were going to build a basketball court in your house. That's a big assumption. And then I kind of assumed, you know, a certain interest rate and I assumed how much you were going to spend down before you die. You might want to spend down to zero, in which case you don't need as much. So I made a lot of even aggressive assumptions for you guys and still came up with a number of, quote, unquote, only 4 million, which I realize is a lot of money still. But it's a lot different than 15 million, and it's a lot different than 100, and it's a lot different than a billion.

Sure.

And someone who's good at business, sure, they can make $100 million, you're really good at business and you spend your life doing it, but it's really stressful for me. It's a really annoying idea to even contemplate that. And it happens, because if you invest in the next Uber by accident, then that's great. But I'm certainly not going to make any effort at all towards making $100 million.

Yeah.

So along those same lines, I know at one point I think you just got rid of, like, everything you owned and got rid of your apartment and just kind of I think your own words kind of went homeless for a while. What was the catalyst behind that? Was it kind of the same line of thinking of what we're just talking about here?

No, I had like some stuff going on in my life that was really unpleasant. And at the same time, I had two apartments that I was renting. One in New York City, one in the town 60 miles north. And both leases were up the same month for various reasons. And I decided, you know what? I hate owning. So I don't want to buy a house. And I hate renting because renting is actually pretty difficult in New York City. You have to get six references, you have to show your bank statements, you have to have a letter from your accountant. They do a background check on and on and on. To rent in New York City is a full time job for at least two months. Let me ask like, wow, was it, how long did it. It's like, it was like two months for you. Three months.

Wow.

And how many individual pieces of evidence did you have to show? I'm talking to my audio engineer. How many pieces of evidence you have to show? Six pieces of evidence. And that's tiny compared to what I had to show because I had never had a credit card in my life. So they, the land, whenever I rented, they were like, who is this guy? He has no credit history at all. So they, it was such an unusual thing in America to have never been in debt. And so they wouldn't, they wouldn't trust me. So I would have to, I would have to meet them and I would have to put up a year rent in advance because they didn't. Because I had never had debt before. They just didn't trust me to pay my rent. It should be the reverse, but.

You know, it's always so annoying. So anyway, long story short, I decided I'm just going to throw. I called up a friend of mine and they said, all my belongings are in this one house. I'm not going to renew this lease. And I never want to go back to that house again. I'm going on a trip to California. Just spend a day, take your car, throw everything out for me. I'll pay you. You could either throw things out, give them the charity, sell them, or keep them. One of those four things. But don't call me at all during the week that I'm away. And when I get back, I want that lease done. Nothing in that house. It's all clean, spotless. And she said, okay, no problem. It turns out she needed like an 18 wheeler truck and her entire family every single day for a week. And finally the place was empty of all my. Because you accumulate a lot of stuff that you don't realize you've accumulated. This is not free condoing, by the way, where you're like, oh, do I love this book or not love this book.

Does it bring me joy?

That's. That's a lot of work.

And it's actually too much emphasis that I don't love any object. Like, I love my kids and I love the people close to me. But why would I love, Like, I don't know. So she did call me up once during the week, like, are you sure you want me to throw out your diploma? You worked hard for that. And I'm like, a, no, I didn't. B, I have never used that diploma for anything. Just throw it in the fireplace. I suspect, actually, she kept it just in case I ever want it back. But I want it back. But then after that, I just. I literally, the carry on bag that I traveled with to California, that's all I had. So I had, like, two shirts, two pairs of, like, the pair of pants I was wearing and the pair of pants in the bag and a computer and a phone and, you know, some, you know, underwear. And then I'd go to the Duane Reade every couple weeks as the drugstore that you could buy three T shirts for $14. So I would. I would do that and. And then I would Airbnb from place to place, or I would stay. Like, I have a friend of mine was going out of town, I would just stay at my friend's place. And that's how I live for. For years.

Yeah, it's just keeping it. Keeping it easy. And. And yeah, this is super fascinating, man. Just ebbs and flows.

And you get to see. When you do that. I must have stayed in over a hundred different houses or apartments. You get to see how everybody else lives. You know, some places were not expensive at all. Some places were, like, dirt cheap. Some were free, Some were more expensive. But I got to see how all the. You know, and I didn't really care about having my own. And I built up this. It was this weird kind of discipline. Like, I'd pass by a bookstore and I'd see a book in the window, like, oh, I really like that book. I should go in and buy it. But I myself, nope, I can't buy it. It won't fit in my bag. I'll get the Kindle, maybe, you know, the ebook, because I had a Kindle app on my phone and that's it. And then, and then I would also made it a point I would not leave any footprint of myself in the Airbnbs during the day. So if I stayed in a place, I would leave it as if I had never existed there. So I would take my carry on bag and everything in it and I would leave and then I would, you know, if I was continuing to stay there, I'd go back later. But I always made it a point to. It's like a discipline for some reason of not having any footprint on myself anywhere. And, and, and, you know, so then the New York Times wrote an article about this which I, you know, whatever was a little embarrassing, but then it was weird. Steven Spielberg's office called and oh, we really want to do a TV show about what you're doing. So I flew out to LA a couple times, met with them a couple times, but nothing, as these things go, nothing really happened with that. But it was kind of. I had all sorts of interesting experiences doing this. I don't do it anymore. I now rent.

I was going to ask, I was.

Like, is this still a proposed.

Yeah, I got married and I'm renting and I have step kids and my kids with me. And so now it's like a home.

That's cool.

Yeah, that's just like in the.

Yeah. Well, I mean, that was an amazing journey through there. And I know, I know you got a bolt. So I want to be super respectful of your time over there too.

Let's wrap it up really quick. What are some. We always like to ask what's a good resource? Book, Podcast? Anything else that you might have that you just find yourself recommending others to be like, hey, you gotta do this, you gotta read this thing. It's changed my life.

I mean, there's a, there's a lot because I read a lot of books for my podcast and I've had a lot on a lot of fascinating guests, so it's hard to recommend just one, but let's say other podcasts. The only other podcast I really occasionally listen to.

And that I recommend is I think Joe Rogan's got great guests and he's really good conversationalist and good interviewer. So I find his podcast fun and interesting and I learned stuff and I'm interested in comedy. He's a comedian, he has a lot of comedians, but he also has on a lot of scientists and politicians. And I just watched the Joe Rogan podcast with Andrew Yang, for instance. It was very educational.

And in terms of books. It's almost like whatever the last book I read was, I recommend. So I read this book, it just came out like last week, Range by David Epstein. And it's kind of a new approach to the 10,000 hour rule. Like, how do you become a master of a skill? So Anders Ericsson, who sort of developed the notion that it takes 10,000 hours to master any skill, he wrote a book called Peak, describing more thoroughly the 10,000 hour rule. And also Malcolm Gladwell's book Outliers describes it and, and Robert Greene's book Mastery describes it. But this book Range.

Says, nah, you could maybe ignore that 10,000 hour rule if you have a lot of diverse experiences and you kind of look at the intersection of all these things that you've learned. And that was really eye opening for me. It was a really good book.

Other books that I've always recommended, the Rational Optimist by Matt Ridley, like, as a society we're kind of programmed to think in the most pessimistic terms. Like everyone is always saying, oh, everything's about to collapse, everything's about to crash, you know, But Matt Ridley sort of shows that historically we always think that way and we're always wrong as a society. So. And he shows rationally why you should be an optimist. And you know, and that's sort of, you know, Sapiens by Yuval Harari is interesting.

Saping is a good one. Yeah, human, human nature and just how we all act. Yeah, yeah.

And I like Matt Ridley's book the Evolution of Everything.

Robert Green's book Mastery I mentioned, I don't know, there's really like a ton of books where I say, man, oh, Jordan Peterson's 12 Rules for Life. These books are like, oh, I feel like my IQ just reading this book and this, this, a lot of books like that. If you go down the list of my podcast guests, I've been fortunate to talk to almost everybody, all of my heroes and they all have books out.

Yeah, that's fascinating. We're going to link that all up in the show notes for sure.

Yeah, and everybody needs to check out the James Altucher show too. That's, you know, that's one of my favorite go to podcasts. I go out and walk my dog every evening and I put on a podcast and it's usually like the James Altucher show, sometimes the Tim Ferriss show, and sometimes the Joe Rogan show. Those are kind of my three go tos.

So Tim, Tim's got a great show too. Tim Ferriss. So I'VE been on his show. He's been on mine a bunch of times, and he's a really good guy and he's super smart. He's a. He's got a great show.

Yeah, he does.

Very cool. Yeah, I think there's. I think if. If we were allowed, we could probably talk to you for, like, four more hours, but I know we got it. We got to let you go. Is there anywhere else you want to send people after going, after listening to this? What's your website? Is it jamesaltucher.com? is there anywhere else you'd want to send them?

Nah, they can go wherever. You know, just whatever. Wherever they find me, they find me, so it's okay. I don't like to promote anything, but. Yeah, it's been really great talking to you guys. Invite me on again. I'll come on again. We can get into the conversation.

Thank you, James. Yeah, now we'll make that happen. Appreciate your time, man. Have a good one out there.

You guys, for inviting me. Thanks.

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