My 3 Money Lessons From the '08 Recession

I am Ramit Sethi, and tonight we are discussing money lessons Learned from the 2008, 2009 recession. Now, the reason I decided to talk about this tonight was a couple of nights ago, Cass asked me what did I learn in 2009. And I remember it vividly. And there were so many lessons I learned at that very moment. And there were also lessons that I could only learn looking back from five, even 10 years later. So it is particularly timely today as we watch the market go up and mostly down. And I get more questions about money investing and everything. Now I also spoke to an advisor of mine who has a lot of clients. He deals with money stuff. And you know, I asked him, what are your other clients doing? And you know what he said to me? He goes, they're doing all the wrong things. They sold a week ago after it went way down. And then the market went up 20% in three days. And they called me back and they felt so stupid. Then they're buying, so they're selling and buying, selling low and buying high. It's sort of the opposite of what you're supposed to do. And I told them, I'm like, you know, a lot of people think rich people are smart, but sometimes rich people are stupid. They just have more money than most. And just because you have money does not mean you know how to manage it. Making it is a skill, but managing it and investing it, those are other separate skills. And if you talk to anyone who manages money, whether for ordinary mom and pop Americans or the wealthy or even ultra wealthy, you will discover people feel the same things at different levels. Wealth, they feel, they feel scared, nervous. They try to outsmart the market. The question is, what do you do to deal with it? So I want to talk about where I was and in 2008, I was working at a startup that I had co founded. And you know, I knew investing. I've been writing I Will Teach youh Be Rich for Four Years and investing for many more years than that. And I saw what was going on. And I remember being at work and there were several other young co workers there and a bunch of young people were, I guess the word would be like, eager to see what would happen. Oh my God, is there going to be a recession? And like some of them even said, it'll be great for young people because it's a great investment opportunity. And one of our older co workers who might be watching tonight, he came by and he said, guys, you do not want to be excited about a recession because bad things happen in A recession. And you know, truthfully, he was the word of wisdom coming by, and it kind of made us get quiet and a little embarrassed, frankly. He's right. Because when recessions happen, bad things do happen. People get sick, people lose their homes, people die. And if you are constantly looking through the lens of financialization of America for young, sophisticated people, they look at the situation where there's a recession happening and they go, I'm long, meaning I think that the economy long term is going to be great. I'm going to buy stocks, I'm going to buy funds. This is great for me. Now, while that may be true, that is just living life, looking at it through an Excel viewpoint. And what our older colleague taught us was, you're forgetting the human element, which is recessions cause lots of bad things and people get sick, they lose their houses and they die. So I think that's important to recognize, which is now having gone through it a second time. I definitely would not wish a recession on anybody. Much better to have a controlled decline or controlled incline. But when things go like they're going right now, it's bad. And while you, the young savvy investor, watching or listening to this today may turn it into financial opportunity, that's not all there is to life. So that was my first lesson. The second lesson was have savings. Because I was laid off from. From my own company. So I know what it feels like to be laid off. And I've been on that side of the table. I've also been on the side of the table where I had to let people go. Very difficult to be laid off, especially in an economy where other people are being laid off. Lesson learned. There was when things get bad, they don't just get bad for you. A lot of times they're bad for everybody. So sometimes people think misery loves company, which I do agree. Sometimes I love hearing about your misfortunes. I'm like, yeah, it's great. Keep it coming. But you know what? When it's bad for everybody, nobody's happy about it. At that time, I remember being thankful that I had savings. So I had been consistently building up my savings over the years, and I knew that I didn't have to get a job. And that was like a complete weight lifted off my shoulders. Because if I had had high expenses, which I didn't, I was living in a very low expense. I didn't spend a lot of money. I had savings. If I'd had high expense, I would have had to get a job. And if you guys remember Ramit's 10 money rules. I believe one of them is never have to make a bad decision or work with people I don't respect because of money. So I don't want to have to get a job because of money. I don't want to have to do this because of money. And thankfully, savings allowed me to not have to do that. Guess what I did after that happened? I turned my hobby, or what was a tiny thing into a full big business. And my book launched a few months later and became instant bestseller. And so businesses and opportunities are available even during downturns. And I gotta tell you, I remember going around the country and talking about investing and earning more, and all these local producers thought I was nuts. Why are you talking about this 10% unemployment? And I said, yeah, but there are still people who want to invest and who want to grow. And by the way, it's interesting tonight because what we see in the news is what's going on. Crazy unemployment claims, which are real. But I also see the data from my own business, which is tons of people joining our earnable business program, which closes tonight. And I can actually see the data and I can see that there are a lot of people, and this is a premium course. It costs money. There are a lot of people investing. So don't be misled that in a contraction, everyone stops spending on everything. That's not true. There's opportunity. What else can I tell you? And then we'll do some questions. It's easy if you have a second stream of income. It's easier to ramp that up or turn that up than to go from 0 to 1. In other words, going from 0 to 1 is hard. 1 to 10 is a little easier. So if people had freelance income in 2008, 2009, they could go to that and find clients, even if they had to offer additional services or in some cases, lower their rates. But if they were out on the street looking to do it for the first time, that was a little challenging. Good reminder that you want to make sure you're flexing different muscles and have them activated. So if you ever need to turn them up, you can. Oh, and then one last point, and then we can do some discussion. This was a lesson that I didn't learn until five plus years after people who grew up during that time, especially, especially young people during the 0809 recession, became generationally afraid of investing. Okay. And what's crazy is, like you had Granny over here who lost 50% of her portfolio. Granny never should have been invested that aggressively. But Granny doesn't understand what asset allocation is. Granny's like, I don't know, I handed it to my guy and he sold me some shitty annuity. Granny doesn't know what's going on, at least not with investments. Nor can we expect the average investor to understand these technical concepts. Granny never should have been invested that aggressively. But for young people, had they stayed in the market, they would have recovered and made considerably more. But many of them did what that advisor I was telling you just said happened in the last few days. They got scared, they pulled their money out. Not only that, they stopped investing for the next decade. I know some of you watching, you bought my book in 2009, the first edition, and you didn't invest. And you maybe you bought the second edition and finally you started investing in that 10 years. The gains that have been lost are astronomical. So what's in the past is in the past. But what we can do in the future or right now and in the future, is invest consistently. Make sure that we are investing in the correct allocation. Chapter seven of my book, I will teach you to be rich and automate it. Once you create a plan, then you're not sitting there looking at the market every day and making all these crazy decisions. You have a plan. It's executing automatically. That's it. All right, let's take some questions. Those are my money lessons from 2008, 2009, recession. What do we have tonight?

All right, what mistake did you make in 0809 that you only realized in hindsight?

Wearing all the clothes that I was wearing back then. We have some photos. We'll try to post those. Maybe we'll do a little. A little before and after lessons of 08 versus.

You know, didn't you wear a fitness.

No, no, no, no, no. No fedoras. By the way, when I made fun of fedoras in something, a lot of people got angry. Lots. And then I clicked through to their pictures and I was like, of course you're angry. All you wear is a fedora. And then I thought to myself, you really should be listening to me. Because my advice is for people like you, fedora wearers who think fedoras look good, but they look like shit. Listen, I know what happened. You're in 1998. You think Justin Timberlake looks cool. By the way, don't write me this happened last time. Oh, it's not a fedora, Ramit, it's a trilby. Do you think I give a shit? You think he looks cool? You saw Michael Jackson Wearing a fedora. You're like, I'm gonna be like, those guys. I have no style. But if I put a fedora on, the world will part in my way. You did it. And the world quickly told you, you look like a freaking creep. So I'm giving you. You know, I give people different types of advice. Some of it is financial advice. Probably make you over a million dollars over the course of your lifetime. Maybe you want to start a business using earnable. Iwt.com earn closes tonight. But really, the most valuable advice that a young man can get is by listening to my words right now. Look, read my lips.

Oh, wait, hold on.

Read my lips. Get rid of your fucking fedoras. I'm doing you a favor. Santa Claus is visiting you tonight. You're welcome. What's the next question?

Wow. Okay. I just need a few seconds.

I think we all do.

Oh, so someone asked. They didn't type it in the question box like they were supposed to, but someone asked, should I be using my emergency fund to invest in the market right now?

No. What the hell? Your emergency fund is for emergency. Oh, my God. People. People are so. They act so crazy about their emergency funds. There's two things people do, and they're both wrong. Number one, they start using it and they're like, ramit, where should I put my emergency fund? I don't want it to just be earning 0.1% interest. I need a better return. I'm like, it's a fucking emergency fund. It's there for emergencies. No, do not invest it. It's there if you lose your job or the world goes to hell. Second, we have people. I know people like this. As of one week ago, they have an emergency fund. They did a great job building it. They're still going to work exposing themselves to coronavirus and their families. And then you say like, why are you doing that? Don't you have enough money saved? They're like, yeah, but I don't want to tap into my emergency fund. It's a fucking emergency.

All right, all right, Next question. On that note.

These are good questions tonight.

Yeah. Okay. Would you recommend investing a bit more currently, I guess the answer is if you have the money.

Okay. If you have the money. So if you have your emergency fund, one year is what I recommend. If you already have an investment plan, you've been following chapter three and seven of my book that's keeping on going, and you still have more money. This is a very select, advanced group. So this happened to me in 08 and 09. I had additional cash just kind of sitting on the sidelines. And I said, you know what? I'm gonna put this in the market in addition to what I'm already doing. And I did. And that money grew substantially over the last decade. I told Cass that one of the lessons I learned was I always wanted to have some additional cash around opportunistically in case something comes up. You know, for some people, they might want to buy a business for me, whenever something went down and I said, you know what? This is money that's just opportunistically sitting on the sidelines. I'm going to add more. And I do believe in the long term future of our economy. So I have been investing additionally beyond what I would normally invest and I plan to continue doing that. So if you do have it, yes, you can do it.

Invest.

You can invest the same way you've already executed on your plan. Just put more funds in. By the way, that's a very advanced concept. So if you don't have an emergency fund or you haven't been following the plan, don't do that. Okay. Follow the plan first.

All right. Do you have any strategies that you use to spot or identify opportunities?

No, that's too vague of a question. Ask better questions.

Okay, next question. Thoughts on the fire movement now.

Ah. Oh, this person is. That's a good question. This is a sort of a bait question. So the fire movement, for everyone wondering is financial independence. Retire early. I talk about it in the book. I also did an interview where for the first time I shared my thoughts about fire. It's mad fire. You can Google mad fientist with an F like scientist Ramit Sethi. And I think it's very revealing. You'll kind of hear my thoughts on the psychology of the fire community. I do think I follow the fire community. The fire community in general is eager to save aggressively, in some cases 70% of their income so that they can retire early for some of them, some of them retire at age 33, things like that. And there are different kinds of fire. There's lean fire, that kind of goes for a walk in the park for fun. There's fire, there's fat fire, which would retire with two kids in private school in Manhattan, etc. I think that now the fire community will change in some ways. First of all, I think that anyone in the fire community was more prepared than the average American because they understand things like withdrawal rates and compound interest. So that's awesome. I think that some folks in the fire community have probably recently joined it because the market was good. And when the market is good, you get a lot of people who ordinarily would not join it. For example, in college when I was there, the major, number one major was econ. After the tech boom took off, it became computer science. And so CS people are kind of like, get out of here, fakers. We want the people who really want to be here. That's always going to be the case. Fire, same thing as the market, got frothier and frothier. A lot more people who ordinarily would not have been in there joined. This will likely clean some of that out. Now, I don't know if that's a good thing or a bad thing. It's just. It is. Over time, I think long term, people will be more thoughtful about considering the amount that they have saved and invested before they retire. And this will definitely change some people's plans. You can already see it happening in the fire community.

How did your teeth become so white?

I don't. It's just the lighting, I think. Is that a real question?

Yeah, I'm mixing it up here.

Wow. Really getting down to it. I don't know, but I do. I have gotten them whitened, so I would recommend that. Okay, let's talk. Let's talk whitening, people. I tried Crest white strips many years ago. I don't know. They're okay. There's some places that do it. It's like McDonald's. You walk in, it's like 60 minutes. You're in and out. So I don't know. Give it a shot. Also, I think you can use your HSA for it. So you can check HSA teeth whitening and see if it's eligible. If anybody doesn't have an hsa, if you're young, you might, and you have a high deductible insurance, you may be. You may have the opportunity to join an hsa. I talk about that in the book. And HSA is a secret investment account. You get tons, a triple benefit. So if you have an hsa, you can actually use it to invest, not just buy toothpaste. So that's a little bit more advanced, but it's in the book.

All right, next question. How do I approach job searching in a recession? I was interviewing with a dream company. The question gets cut off, but the opportunity maybe disappeared.

We're going to talk about this next week. If anyone has questions about what to do for a job search, send me a DM or an email. Be specific with your question. I want to Hear it and any employers, tell me what you've heard. Are you hiring? What are you looking for right now? Are you a hiring freeze? Tell me that too. Send me an email or send me a dm. I'd love to hear from you.

All right. What is the best way to tell your staff we are reducing operations? That's a tough one.

This is a really tough one. So first of all, I feel for you and for all business owners who are having to make really tough decisions right now. And I think that I have been on both sides of that. As I shared with you, you and you know, as an employee, very difficult to hear that as a business owner, you have your own set of difficult challenges that very few others can understand. So I understand it and I feel for you. This has been my experience. I have had to have these conversations a few times and I think it's really good for you to ask this because I benefited from asking an experienced manager early in my career, how do I let someone go, etc. And just listening to them actually just say what they were going to say helped me understand tonality and the basic frame of the conversation. So let's assume that you are having one on one conversations with people. That's the simplest. I would take them in a private room and if you need to have another legally, if you need to have somebody else in the room with you, then you should arrange that you should speak to your attorney before this happens. I would recommend that. And you should say something like, you know, John, I have to have a really difficult conversation with you today. Unfortunately, we have to reduce the operations of our business and today's going to be your last day. And I wish that that's weren't the case. But with what's going on, there's no other decision I can make. Now you will be given a severance. I've prepared some of that information here and if you have questions, you can contact Joan. So what I'd like for you to do is to collect your belongings and we do appreciate your service. I appreciate it personally and I thank you very much in that again, that's not perfect. None of these conversations are perfect. But a couple of things that I just want to highlight for you was first of all, get to the point. You know today's going to be your last day. And if it is because of a not for cause, you can tell them this is not for performance related, really reasons, but simply something that is due to what's going on around us, the economic situation. Your attorney can advise you on specific verbiage. They're very experienced at this, but that's a general tone. You also notice that you're not making any promises at the end. You're simply laying out the facts, you're thanking them, and there's no debate or discussion. So I hope that helps them. Again, I feel for you.

Is there a key difference you're seeing between the 0809 recession and now?

Nobody knows yet. It's too early. It's too early to tell. We will know more, but. But we are probably just in the early stages of it right now, and I think it's really important. That's important to know for a couple reasons. One, what you're seeing in the noise and the stock market, it's all just minutiae and noise. When you zoom out a year and certainly five years, if you go back and read the New York Times in October 2018, then November, then December, then January, it looks like it's crazy every single day. But if you zoom out, you can kind of see there's trends. Okay, so that's number one. And I think number two also reminds us to be humble. Like, don't get cocky. Oh, the market went up 15% or they're talking about some kind of vaccine. No, don't get cocky. These things take a lot longer to go through the system. It affects more people than you can possibly imagine. In order for you to get that head of lettuce, think of how many people have to touch it, including the stock person, the manager at the grocery store, the trucker, the loader, the farmer, the marketer who's doing all that. There's so many people involved in an economy and one that's ground to a virtual complete halt. It is going to be incredibly challenging to unravel this.

I have 20% saved for a down payment. Should we invest some and delay buying a house?

As a blanket general rule, this is a blanket one. I would not be putting down a massive expenditure on a house right now for a couple of reasons. One, we don't know where the economy is going to go. That means you could lose your job. You're more likely than ever to lose your job. We don't know what the value of housing is going to be. Personally, I would predict it will go down, but I'm just a voice. Who cares what I think? Who cares what anybody's projections think? We don't know if you. There are some exceptions to this. If you have run the numbers and you know that the value of the house doesn't matter to you because you're planning to live there for a minimum of 10 years. You don't care if you sell it and lose money because it's the house you want to live in. It's a expenditure, not an investment. Then that can be a reason. But I would be more conservative with really large purchases right now. And if I were you, I would put that money if you decide not to buy it, I would keep it in cash, because a down payment, unless you're not going to buy for five to 10 years, that money should be liquid.

I'm 18 and just started working. What is the best way of saving and investing my money?

At 18, you have an amazing future ahead of you. So the fact that you're here tonight asking this question is incredible. You should. Again, from a financial perspective, for you, you might think that it's horrible to be going into an economy like this, and it will be a little challenging in the short term. But the fact that you're savvy enough and asking these questions now means you'll probably be extremely successful financially over the course of your life. What you should do is you should read my book. It will show you how to automate your savings. Even 50 bucks a month, even 20 bucks a month. It will also show you how to start investing. Just to give you an example, I started investing when I was 14 or 15. My dad opened up a custodial account for me, and I started picking random investments, learning some of my. I picked individual companies. I thought that's what investing was. It's not. But I also learned and made mistakes with a small amount of money. As I grew my income and my net worth, I built a system. And that system is now yours in the book, so you can learn from it and just plug right in. So I'm really happy you came tonight, and I'm happy you're taking control for your Life.

Yeah. At 18. Wow. Next question. Are you part wolf? Yeah.

Believe it.

Zoom in. Just rub that. Rub that hair.

It's very soft.

Okay. People like that.

You guys want to do a tutorial on skin? Skin care Rule number one.

I'll do that one.

Rule number one. Oh, no, no, no, no, no. We don't have. We don't have 14 hours for a show, babe. She'll pull out all your products, you know? Okay. When we went.

I had to downsize.

When we. When we went to Japan, Cass's rule was any drugstore she saw. She's like, I'm going in here. And I don't just mean for like. She's very considerate. Right, Cass? You're very thoughtful. Except when you lose your mind walking into a Japanese drugstore. It's like a. It's the equivalent of a 711 here. She would go in there for two hours. I'm not exaggerating. Now, I can understand you don't know what any of this stuff is because you can't read the packaging, but you came back with an entire large suitcase full of cosmetics. Then I saw some extra cosmetics in our room. This is like three weeks ago. I was like, there's some bottle. I'm like, babe, what is this? She goes, oh, I can't remember what that is. I'm like, you fucking bought Japanese cosmetics. You can't even remember, babe. So I guess you should be the one to teach that class.

Yeah, someone said they'd want me to do that. Okay, next, which sector are you keeping your eyes on right now?

I don't really do sectors. And I think that if you want to. If you want to do it with a little play money, if you've got your whole portfolio developed, it's all diversified, and you want to take 5 to 10% of your money and play with it, whether it be a sector, an individual stock, Bitcoin, whatever, be my guest. But in general, I don't really do that. So that's my answer.

What are you most excited for in the next six months?

Easy. Easy. I mean, tonight is the night that our earnable program closes. It's the first time we've ever launched this program. And I've already seen people in there, so it's amazing. This guy is in the community. Just two hours ago, I was showing Cas this. So we have one part of our community group, our forum, where we have people write their offer. So we teach them how to create an offer, find an idea, create an offer, and then they get critiqued by other people. So this guy had a sort of like, I'll help you with your website offer, but it was really technical, using all these technical terms and SSL and stuff nobody cares about. So some students, earnable students went in there and critiqued him, and he redid his offer. And I was showing it to Cas. I'm like, Cas, look at this thing. You would pay for this, like, right now. Right now. You would send him. You would say, Send me the PayPal link. I'm in. So watching that, that's. The program isn't even. Like, we haven't even finished selling. It closes tonight. Seeing that develop in that program is amazing. And to know that we're at the beginning of where we were in 2012 with Dream Job, 2014 with ZTL. We're about to launch an entire generation of entrepreneurs. We're going to help them find their idea. We're going to help them turn it into an offer. We're going to do it at the toughest possible time. You know, my first book came out, 2009, pure depth of the recession, March 2009. That's the bottom bestseller earnable coming out right now. When people are saying nobody's buying anything, I know that is untrue. Even in times like this, people invest in themselves. They just buy stuff because they want to. So we're going to prove it, and I'm very proud of that. I'm proud of the team for this. I'm proud of the students for investing. That's what's exciting over the next six months.

I thought that was such a cool feature of Ernaval too, that I didn't know.

We didn't even tell anyone about it.

Yeah. So you get real time feedback on your offers, which I think is so valuable. Valuable.

You've found that to be helpful when we've talked about your offers, right?

Oh, yeah. Like with you, my sales coach. But if I didn't have you or my sales coach, like, I think I would be lost. So that's awesome that your community is doing that. Okay, someone asked, when are you going to start your podcast?

I don't know.

Wow, another person just asked that too.

Everyone always asked me to do a podcast and then I'm like, what do I talk about? But then I realized I'm here every single night and I could talk forever. So is this basically my podcast? Fireside chats with Ramit? I don't know.

All right, we'll do two more questions.

Okay.

What are the most impressive lesser known teachers on information product business?

Ooh, that is an excellent question. Jermaine Griggs is a great guy and he teaches some fairly advanced marketing automation stuff. Now, I'm saying advanced because I don't recommend, like, if you make less than a million dollars a year, you probably should not be. Some of his products are pretty advanced and it sort of doesn't make sense, but I think he's a really good teacher and I think he's come up with some pretty amazing, interesting ways of looking at business and marketing automation, which means how it flows. Who else can I say is really good? What was the question? Information products.

Yeah. Lesser known teachers.

Lesser known.

Wow, look at that fire, by the way.

Oh, just picked up a second. Let me think about it. That's a good question. I'll start with Jermaine Griggs. He's actually quite well known, but everyone has their own niche. So I'll think of another answer. Come back to you.

All right. Other than psychology, are there other fields that helped you in your business strategies?

Yes. Oh, my God. So my major was STS at Stanford. Science, Technology and Society. And we studied how society influences technology and technology influences society. And one of the things that we learned there was that most people kind of have this offhand phrase that they use, like, well, technology is neutral. It's all about the people who use it. It's how people use it. And what we quickly learn when we study is that that's not true at all. Technologies are political. Technologies are inherently influential by the people that design them. Just as an example, there are some facial recognition software that can't recognize a black person. Guess what? There were no black people on the team designing it. Technology is not neutral. And so that was very helpful and has continues to be very helpful. As we design programs for our students, we want to make sure we have a diverse team. We want to make sure, and I mean diverse in every way. We want people who can consider what it's like to join, earnable as a total beginner. You're coming in. You're like, I literally don't have an idea. I don't even know anything about business. I don't know what ROI is. Cool. You're gonna be greeted. You're gonna be able to take a special additional tour with our student success team. They're gonna hand hold you through the entire thing. And then there's people who are, like, much more advanced. So, like, hey, I want to know, how did you do that sales conversion thing? Or how do you structure your upsell process? Because I've heard 10%, but I know you're doing higher than that. How you're going to be able to get that answer quickly. So we want to design our technologies, and I use that term broadly in a way that can be applicable and helpful to lots of different people. STS was helpful. Social sociology was helpful to understand how networks work together and people work in broad levels. I don't know. I just love what I studied academically.

Awesome. So I'm gonna go a little crazy, and we're gonna do some more bonus.

Bonus questions Friday night. Let's go.

Okay. What on earth do you have against fedoras? Life shouldn't Be vanilla.

Who's the person asking this? Just tell me the name.

Heather Lee Haven.

Oh, a woman.

Yeah, Maybe she likes fedora.

That's really surprising because it's usually. It's usually defensive. Men who ask about it, they look fucking horrible. That's what I have against them. What is there to say? And the worst part is the people who wear it think they look good. Like, aren't there things that we wear and we all. We're kind of like, we know this looks horrible. What would be an example of something that's not in style anymore that we all know looks like a baggy rayon shirt?

Oh, a waistcoat. That's mine.

Oh, babe, you just alienated all the fedora wearers, actually. Okay, let's pick something that's a little bit more approachable. What's something people wear that just besides that, that they. Everybody agrees looks horrible? Just baggy clothes that don't fit. Okay. They're just.

We're all like a long sleeve button down you wore in college.

Yes. A check. The problem is, babe, the. That some of these guys actually, they still think that that looks good. You're. You're starting up here. What'd I just say two seconds ago? Babe, we got to start at the beginning level.

Oh, someone said cargo shorts.

Okay, perfect. Cargo shorts. Okay, great. Unless you're a redditor, in which case you're probably irredeemable. Most people agree cargo shorts are horrible. We can all agree. Let's all give each other a hug. We all agree. The problem with fedoras is most people think it looks horrible, but the people who wear it really deeply, genuinely believe I look fucking good. So we're talking about a level of delusion that is unparalleled, and that is just one of multiple problems I have with fedoras. Great question. Okay, these are the kind of questions I want. Where should I invest? No, talk to me about fedoras.

Okay. So someone asked, as a business owner, I'd like to know how you were laid off from your own company.

Well, that's what happens when you raise venture funding, isn't it? It's a great question. How does that happen? Even I look to the heavens and said, wait, did that just happen? Well, that's what happens when you raise venture funding. So when you. We raised the millions of dollars in venture capital, and what happened was the venture capitalists come in and they are looking for a return on their money. And I actually do not blame them because the business, as we had done it, was not working. So they needed to find out how to deploy that capital in a way that would generate them a return. And the B2C collaboration space was not working to generate the kind of capital or the kind of return they needed. So they want to switch it B2B. I'm not really interested in B2B, nor am I. Good. And so when they take a dispassionate look at the business and they say, look, we have some B2C folks here, nothing personal against them, but that's just not the direction we're going with the business. And so business owners like speaking to you as both someone who's been a business owner and someone who's been on the other side of the table. Sometimes you have to make really tough decisions about the direction of your business, and you may have to let people go, and they might hold it personally against you. But, like, a business owner knows sometimes it's not about that. It's just the direction of the business. And this person may not be a fit. So that's how it happened.

What did you do after you got laid off?

I went straight. I still remember every minute of this. I went straight to Safeway. I drove to the grocery store because we used to eat at work. We had, like a kitchen stock. And I was like, oh, shit, I better get some food, because I don't have any food at home. And I called my dad, and anyone who has a parent, that parent has probably been through some sort of layoff, been fired, some sort of contraction. It just happens in a career, one time or another, it will happen. And I called my dad, and my dad was super calm, and he just listened. And he said, you know what? It's okay. He said, take your time. And he's like, you don't have to tell anyone if you don't want to. Just take your time and know that it will be fine. And what's crazy is, my dad, like most Indian dads, not very emotional. But that was. That was like, exactly what I needed to hear. Just the world wasn't ending. I don't have to go out and broadcast it if I don't want until I was comfortable. And I remember that was a Friday. And I remember telling myself, you know what? I'm gonna just feel horrible this weekend. I'm gonna just feel my feelings. I'm gonna sit around and just, you know, eat popcorn all weekend.

Taco Bell.

Yeah. No, I didn't eat Taco Bell. By that point, I had grown past that. I was an executive at a online company. Babe, come on. That has nothing to do with it. But I said, you know, I'll decide next week what I'm gonna do.

To do.

That's what I told myself, which was I didn't want to jump in, you know, as an entrepreneur. Now I'm like, what's next? What's next? But I decided I'm just going to take a few days to just feel bad because this was bad. But in the back of my head, I already knew. And when Monday came around, I was like, you know what? I'm going to go full time on. I will teach, and I'm going to crush it. And that is exactly what happened. That's exactly what I did.

Did that give you more motivation?

Well, I told myself that one year from now, I'm going to look back at this and say, this was the best thing that ever happened to me. And one year later, I had a New York Times bestseller. I had. I think we had launched a product. That year I'd gone on tour. The thing was way bigger than I thought. I just thought it was my little blog with a few, you know, 50,000 people. Reading was a big amount, but not that big. But when I went on tour and I saw people in all these different cities actually coming out to meet me, like, getting out of their chair and coming to a bookstore, I was like, oh, my God, this is. This is way bigger than I thought. So that's what happened.

Are you really small or is that chair really big?

It's fucking huge. Thank you for asking. Like, how do I. How do I demonstrate how big this thing here, look for scale? This is so big. Or I'm like, just a tiny. Actually, that's a good question. Because when I meet people, I want to get the advice of the audience. When I meet people in person, a lot of funny things happen. One, you know, people feel like they know me, so that's awesome. People who meet me are, like, the best. They're super nice. They're like, super fans. I love it. But I frequently get this comment which is, oh, you're taller than I thought. And I'm like, how do I respond to that? What is the correct response to that question?

What do you say?

That is the one. I just go, ha, ha. Thanks. And then in my head, I'm like, what the fuck does that mean? So I don't know. Is there an answer to that? I have learned along the way. I've learned how to extricate myself from awkward conversations, because many. I will teach readers, probably half the people watching are socially Awkward. So I know I'm flawless at extricating myself from these conversations. No problem. And I've learned how, you know, like, how to introduce myself and all that stuff, but I have never learned an answer to that question. So anyone who can give me an answer, thank you in advance, maybe just say thank you.

That's it.

That's really boring. Got anything else?

Okay, next question. Have you always been this funny?

Yes. Next question.

Where is mom? Seti. We'll ask her mom and dad. Okay, next question.

It's a good question. Yeah.

So how tall are you? You're six feet.

Oh. This is a point of debate, so. Wow. Actually, this is a really contentious thing. So I think I'm five, 11 and a half or six feet. But watch this, guys. I'm five, 11 and a Half.

Oh, you're six feet.

Cass insists I'm six feet. I'm like, okay.

Oh, you're pretty tall.

Yeah, I guess.

So you're six feet.

All right, what's. Do you have any other questions?

Yeah, we'll wind this down. Let's see. I was looking.

We're now at the point where we're talking about my body hair, my height. I mean, it's really.

These are the real questions.

Yeah. Yeah. These are better questions than, you know, some investment. I'm like, chapter seven. What's next?

Oh, okay. So regarding Covid, what will happen to earnable in person events?

Ah, we immediately adapted them for online events. So we are doing them online, and we will be doing them both with earnible students. So earnable students, every month we're going to do a special event online. And for everybody else in the community, we'll do something which will be awesome. Not as awesome as earnable students, because you guys are the best, but we're going to do the whole tour we had scheduled to go across the country. It's adapted to online, and as soon as we can, we'd love to go back out. But first things first is the safety of our team, our students.

Okay, two more.

Okay. I got all nights, so give me as many as you want.

What are new courses you're working on creating these days?

Well, what should we create? What do you guys want to see? Here are some things that people have told me they want to know about running a distributed organization. They always ask about productivity, but I don't think they're really serious. Some money stuff.

Oh, what about love and money?

Yep. That's certainly something people have talked about. I think the first step to love and money is do earnable with your partner, see how that goes. All right. When they, when they have answers, I'd be curious to hear what, what people think we should create.

Okay. All right, so we'll end on this one. Can you please explain more about your earnable program?

Really? Did you just make that up? That's a really good setup. Okay, well, first of all, it closes tonight, so you should go to iwt.com earn we have a huge sales page and we have a video and a reel. And it's basically a way for you to create a second stream of income. So for a lot of people, whether you have a full time job or you've been trying to start something on your own, a lot of people want to know, how do I find an idea? How do I turn that into paying clients? And then how do I even scale that so I can be automatically earning income, being my own boss, and being able to work from anywhere I want. Now, we didn't anticipate that it would launch at a time like this, but it turns out that because of the way we've set up our business, where all my team is remote, we've taught so many other business owner or people how to become business owners. And so, so many of them are doing really well. And you can see that on my latest Instagram post. They're financially stable. They're in control. They're not scared. They're playing offense, not defense. So iwt.com earn that's the program. It's online, it has videos, we have interaction, There's a community. It has amazing levels of detail. Like you can actually listen to real sales calls. I did. And I think it will change your life. Like, it's changed. Like, our business programs have changed so many other people's lives too. All right, Now I'm back here tomorrow. We have a big show tomorrow. Tomorrow is Household Tips with Ramit Sethi. Okay, Saturday night, get ready. Call your mom, call your dad, call your grandma, call your grandpa. Everybody tag them and get them watching. They've been alive 50, 60, 70, 80 years. They have never seen household tips like this. Okay? And I, I'm just so excited to share the real, the real work that I've been developing for the last 25 years is what immediate hacks can you implement in your household to live a more fulfilling and productive life right here in your kitchen? It's going to be great. In the meantime, I post all of these@YouTube.com Ramitzathi I have a playlist called Fireside Chats. Go send it to 30 or 50,000 people. Send it to all your friends. Post it on Facebook. Let's get people watching these. You can also tag people here on Instagram, let them know they should watch this. They're thinking they're getting scared of money. This is a great episode to tag them on. So thank you guys for watching. I've been here every night since this started. I'm going to be here every night until it ends. Thank you very much. I will see you tomorrow.