I get asked a lot about investing.
This is mostly due to start-up investing and the hoopla around it, but I’ve expanded my experiments to late-stage deals, real estate, and more. So far, my startup bets are 10x+ more successful (on paper) than my publishing career. Based on cashed-out positions, they’re still several times more successful. I’ve had a lucky stretch.
By no means am I an elite investor, but I’ve borrowed from elite investors since 2007. I’m incredibly fortunate that amazing people have been very generous with their time. Thank you, all!
I’ve made hundreds of survivable mistakes, networked my little bald head off, and–net-net–I’m happy with the results.
In this short podcast episode, I’ll explain the five (or so) steps I took to become a better investor, starting at ground zero.
Caveat emptor: I am NOT a financial advisor, and none of this advice should be taken without speaking to a qualified professional first. Also, my results could be due to pure luck and zero skill. M’kay? M’kay.
The episode’s only 40 minutes long, despite it saying 2 hours. If the below player doesn’t work, just click here.
You can find the transcript of this episode here. Transcripts of all episodes can be found here.
QUESTION(S) OF THE DAY: Hope you enjoy, and please let me know in the comments if you’d like more of this. Or what you’d like more of. Please correct me if I made mistakes in this episode!
Related reading that I mention in the audio:
How I Created a Real-World MBA
Things I Learned and Loved in 2008 (Lots of Financial Lessons)
This podcast is also brought to you by Wealthfront. Wealthfront is a massively disruptive (in a good way) set-it-and-forget-it investing service, led by technologists from places like Apple and world-famous investors. It has exploded in popularity in the last 2 years and now has more than $2.5B under management. In fact, some of my good investor friends in Silicon Valley have millions of their own money in Wealthfront. Why? Because you can get services previously limited to the ultra-wealthy and only pay pennies on the dollar for them, and it’s all through smarter software instead of retail locations and bloated sales teams.
Check out wealthfront.com/tim, take their risk assessment quiz, which only takes 2-5 minutes, and they’ll show you—for free–exactly the portfolio they’d put you in. If you want to just take their advice and do it yourself, you can. Or, as I would, you can set it and forget it. Well worth a few minutes: wealthfront.com/tim.
This podcast is also brought to you by 99Designs, the world’s largest marketplace of graphic designers. Did you know I used 99Designs to rapid prototype the cover for The 4-Hour Body? Here are some of the impressive results. Click this link and get a free $99 upgrade. Give it a test run…
The Tim Ferriss Show is one of the most popular podcasts in the world with more than 900 million downloads. It has been selected for "Best of Apple Podcasts" three times, it is often the #1 interview podcast across all of Apple Podcasts, and it's been ranked #1 out of 400,000+ podcasts on many occasions. To listen to any of the past episodes for free, check out this page.
Tim is my inspiration.
Great podcast Tim! Will be checking out Wealthfront.
Good advice. Love the real world MBA.
Thanks Tim. Very insightful, especially the information and approach to start-ups. Would love to hear more pods like this.
Tim, great post. Thank you. I’m curious to see your rules for investing if you were willing to share.
Hello Tim,
I am halfway through your book 4HWW.
I left my corporate job three months ago after 14 years. Because I.Just.Could.No.Longer. So your book has come to me at a perfect time. I have no idea how to sustain going forward and still have occasional panic attacks, but living that life for another 20 years was just not an option for me. I am getting optimism and courage through your book. Something I really need at this time.
I hope you are keeping up with kendo. I am an avid practitioner myself competing at national level who is testing for 5dan next mo.
Wish me luck – both in kendo and life
Cheers
Good luck Doriahri!
I think you’ve already made a huge and quite courageous step – I am sure if you hold on through the gloomy beginning phase, you will soon see the light ahead. Be patient and persistent and don’t get disappointed too easily. I hope I will start walking the same path soon!
Great podcast! Can you please post the investment-related books you recommended on this podcast? Thanks, Tim!
Nextdoor eh? I remember when they started way back when – they slogged through it, and now even analysts like Greg Sterling are a huge fan.
Hi, loved the episode tim can we get links to all the books you mentioned? 🙂 cheers!
Hi Tim, you mentioned options trading on the show. If you really want to learn I can teach you. A one hour skype call once a month for a year could make you an expert. [Moderator: Twitter username removed]
Tim
Speaking about “networking you little bald head off”. I don’t recall having read anything by you about networking skills. I am very interested in investing and entrepreneurship but when it comes to the networking part, I tend to be a bit boring and I notice I lose my audience fairly quickly. Would you dedicate an episode to networking and un-boring oneself?
Not to butt in but, in case you missed it, Tim gave a talk about networking at South by Southwest that was released as a podcast in August
http://fourhourworkweek.com/2015/08/26/how-to-build-a-world-class-network-in-record-time/
Hey all,
He was going fast and furious with the books and I didn’t see them in the text post so I thought I would post them here for everyone. So here are my notes:
3 Types of Advantages:
* Informational – Better information
* Analytical – Better formulas
* Behavioral – Level headed temperament… slow and steady wins the race.
Books:
* Buffett: The Making of an American Capitalist by Roger Lowenstein –
* The Snowball: Warren Buffett and the Business of Life Paperback by Alice Schroeder
* Liars Poker by Michael Lewis
* More Money Than God: Hedge Funds and the Making of a New Elite by Sebastian Mallaby
* Flash Boys: A Wall Street Revolt 1st Edition by Michael Lewis
* Money: Master The Game by Tony Robins
* The Smartest Investment Book You’ll Ever Read: The Proven Way to Beat the “Pros” and Take Control of Your Financial Future by Daniel R. Solin
* A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing by Burton G. Malkiel
* What I Learned Losing a Million Dollars
* Antifragile: Things That Gain from Disorder by Nassim Nicholas Taleb
* The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb
Points:
* Pick an area
* Pick a time frame
* Pick your rules: Have a plan for selling before you buy. “Know when to walk with your chips”
* Paper Tradefirst – Play money
[Moderator: links removed]
thanks Matt.
one more book he mentioned – “You Can Be a Stock Market Genius”, Joel Greenblatt
Taking Greenblatt’s approach a step further (if you want to dive deep into value investing and try to swim with the sharks) is a book by Wesley Gray and Tobias Carlisle called “Quantitative Value: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors.”
It does a great job of expounding on value investing as well. Very “Grahamsian” and a relatively quick read.
Word to the wise: I believe this approach (and value investing in general) is for those who have identified themselves as having a behavioral unfair advantage.
Thanks Matt – Tim these are much better notes than what you gave above.
You legend. I was looking for these 😉
Thanks Matt! Couldn’t take notes during my commute so this is very helpful!
Dude, THANK YOU. I came here specifically for the book list since i was driving and didn’t write them down.
Hey Tim! Great podcast. Can you include the bibliography of all the books you mentioned in the show notes? You mentioned ALOT of books
When you began making your angel investments, how did you first qualify as an accredited investor? ( or did you get around this requirement somehow) it’s always been the biggest stumbling block for me.
Awesome, thank you Tim. Definitely would love moar (sorry greedy) of this, especially relates to real estate investment.
+1 on Real Estate.
Thanks for the pc Tim! I would love to hear your thoughts on the slow and steady three index fund strategy as it seems this beats higher risk investments more commonly- would you have a strong argument against this in favor of higher risk, higher reward investments?
Tim – You noticed that the podcast is > 2 hours long but the actual podcast content is only around 35 minutes?
I love the inbetweenisodes Tim. You really put a lot of thought into this one – thanks. I was wondering if it would be possible somehow to have a list of the books you mentioned during this epi? (there were quite a few! I started scribbling them down and then I figured the titles would be here).
I like these shorter and more specialized formats!
When are you going to be married? Just saying. In my opinion it’s difficult to relate when you aren’t the average guy. Because narcissistic possibly? When your audience is only a select few like yourself, anybody can be that Silicon Valley guy.
Yes, definitely like these types of inbetweenisodes. I like the comment you made of “getting your fucking face ripped off”. Your tone sounded a bit like a fighter pilot. Like this topic a lot and appreciate your candidness, as I think most folks underestimate the enormous amount of time and skill that is involved with successfully investing in the stock market. Some other great books are “One up on Wall Street” and “Beating the Street” by Peter Lynch.
Would also be interested in any recent “hacks” you’ve come across dealing with lucid dreaming or cognitive skills enhancement that involve working memory, long-term memory, processing speed, or visual processing, etc. And of course, any new updates from NuSI and Peter Attia. (it’s been awhile since his last post)
Love the way you listed up your suggested books related to the subject! Thanks, and keep it up Tim!
🙂
Best episode in a while. Want more!
Book lists?
Ones you mentioned?
Good episode with some useful information and recommendations.
Have to say though I am starting to find the ads – particularly the length and consistent repetition getting quite frustrating.
I think I could probably spout out the entire script for 99 designs and Wealthfront ad now!
I understand that there needs to be some return on the time and effort invested in the podcast – and I don’t begrudge that as I get a lot of value from the podcasts for free. I just wonder whether the ads would be more effective and less obtrusive if they were more concise and bit more varied.
Just my opinion.
Love this stuff Tim. Keep ’em coming! I’d love to hear that Taleb interview too 🙂
Great podcast but couldn’t resist offering some other suggestions for books – Michael Lewis is obviously brilliant and a talented writer/story teller but I think of him as more for entertainment.
My suggestions are really just other people’s suggestions regurgitated but I found them valuable for my own development as an investor.
Reminiscences of a stock operator – Jesse Livermore
Intelligent Investor – Benjamin Graham
How to make money in stocks – William O’neil
Market Wizards – Jack Schwager
Thanks again for the great work!
Thanks for your suggestion John. Likewise, I love reading investment books. Tim mentions the Buffett Biographies in his podcast…curious if there are any other investment biographies you like or would suggest?
Book recommendations + links
Buffett: The Making of an American Capitalist http://www.amazon.com/Buffett-The-Making-American-Capitalist/dp/0812979273
The Snowball: Warren Buffett and the Business of Life http://www.amazon.com/The-Snowball-Warren-Buffett-Business/dp/0553384619
Warren Buffett unauthorized biography https://books.google.com/books/about/An_Unauthorized_Biography_of_Warren_Buff.html?id=ODnQygAACAAJ
Warren Buffett annual letters – BERKSHIRE HATHAWAY INC. SHAREHOLDER LETTERS http://www.berkshirehathaway.com/letters/letters.html
More Money Than God: Hedge Funds and the Making of a New Elite http://www.amazon.com/More-Money-Than-God-Relations/dp/0143119419 by Sebastian Mallaby
Flash Boys: A Wall Street Revolt by Michael Lewis http://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393351599 – a non-fiction book, the book focuses on the rise of high-frequency trading.
Liar’s Poker: Rising through the Wreckage on Wall Street by Michael Lewis http://www.amazon.com/Liars-Poker-Norton-Paperback-Michael/dp/039333869X – a behind-the-scenes look at a unique and turbulent time in American business
You Can Be a Stock Market Genius: (Even if You’re Not Too Smart!) Uncover the Secret Hiding Places of Stock Market Profits by Joel Greenblatt http://www.amazon.com/You-Can-Stock-Market-Genius/dp/0684840073
MONEY Master the Game by Tony Robbins http://www.amazon.com/MONEY-Master-Game-Financial-Freedom/dp/1476757801 (summary version available on Google Play http://tinyurl.com/os7nmdk)
The Smartest Investment Book You’ll Ever Read: The Proven Way to Beat the “Pros” and Take Control of Your Financial Future by Daniel R. Solin http://www.amazon.com/Smartest-Investment-Book-Youll-Ever/dp/0399535993/ref=asap_bc?ie=UTF8
Recommended by well-known investor/author Nassim Nicholas Taleb –
What I Learned Losing A Million Dollars Kindle Edition by Brendan Moynihan http://www.amazon.com/What-Learned-Losing-Million-Dollars-ebook/dp/B00MNMHBA0/ref=sr_1_1?ie=UTF8&qid=1443892216&sr=8-1&keywords=what+i+learned+losing
Books by Nassim Nicholas Taleb
Antifragile: Things That Gain from Disorder (Incerto) by Nassim Nicholas Taleb http://www.amazon.com/Antifragile-Things-That-Disorder-Incerto/dp/0812979680/ref=asap_bc?ie=UTF8
The Black Swan: Second Edition: The Impact of the Highly Improbable: With a new section: “On Robustness and Fragility” (Incerto) by Nassim Nicholas Taleb http://www.amazon.com/Black-Swan-Improbable-Robustness-Fragility/dp/081297381X/ref=asap_bc?ie=UTF8
Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist by Brad Feld and Jason Mendelson http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalist/dp/1118443616
Websites
Angel List https://angel.co/ – invest in a startup or raise money
Tim’s List of Investments https://angel.co/Tim
Warren Buffett annual letters – BERKSHIRE HATHAWAY INC. SHAREHOLDER LETTERS http://www.berkshirehathaway.com/letters/letters.html
Thank you so much for providing the links to the books in the podcast!
Awesome, I was just looking for these books!
Precisely what I was looking for. Here is my book list including investing http://www.amazon.com/gp/registry/wishlist/2EHJIRLOB6PH4/ref=cm_wl_huc_view. If someone is serious about investing, the should consider getting CFA and ofcourse practice real life investing. It is humbling.
Tim,
Loved the podcast. Would be great if you could also post some show notes with links to the books, etc. you recommended.
Now that I feel like a lazy ass, I’ll listen again to get them.
Is there a list of the books mentioned in this podcast? I listen while riding my bike so didnt get a chance to write them all down.
Great podcast Tim. As you mention in the podcast, the more exposure you get to different investment points of views and different ways the best of the best invest and make their money the better position you put yourself in when investing (which you’ve done a great job of highlighting between this podcast as well as your blog posts on investing over the years) . Would definitely love to hear you interview some of the finance experts on your show.
Tim, did you lose all of your initial $120k as you expected to?
Thanks
Is there a wiki that covers all of the companies on Angel.co?
Huge appreciation to the TFS!
Enjoyed the episode, learned new things and reminded of my own mistakes.
When it comes to Start-Up investing, how does the average guy or gal get access to deal-flow. Aren’t promising early companies locked up by the Angels and VC’s even at the seed stage?
Thanks!
Hey Tim, have you heard of Betterment? They seem to be very similar to Wealthfront but with lower fees. Just wondering if you had any data or opinions on them. Thanks!
Tim at it again with a great podcast! Was waiting for you to release this sort of data about your angel investments. Very interesting and great insight
Is there a way to get transcripts of these wonder podcasts? I feel sometimes it’s easier to check out references, and more efficient to read than listen. Thanks!
Great Podcast. I am going to order a lot of books (thanks Matt Lea)! Does anyone know if Whealthfront is also available in Europe?
Thanks Tim – great episode!
Would love to hear an interview with Nassim Taleb. The idea of antifragility bridges such a vast range of concepts and Taleb has a unique collection of experiences. A discussion on antifragility and high performance would be fascinating.
The second you said “If you don’t have time to read these books, guess what? You shouldn’t play — because you’re going to get your fuckin’ face ripped off,” I knew a Michael Lewis recommendation was coming.
It’s funny — I enjoyed Lewis’ books, but the only vivid memory I have from them is when he spoke of the guy he called Piranha.
Also, I’m not sure if I’m just experiencing a glitch on my end or what, but my download says this podcast is over 2 hrs long. I was very confused when I heard the outro @ around 35 min. Once the ads are through, it’s just 1.5 hrs of dead air.
Tim, would CircleUp be a good way to get started with angel investing?
Way to go man! Leverage is the name of the game!
I’d LOVE more episodes on investing.
Tim – something deep inside always left me intuiting that the MBA – generally, but not always – is a $150,000 next step for people who aren’t sure what they want to do, to hop to another conveyor belt that confuses their true sensitivities and impulses to what they really want to do. And, so to still not know what they want to do, but with a nice $150,000 debt “for the privilege”.
Love your approach. If I get to kids, that’s how I’ll be steering them: the real world MBA.
Hi Tim,
I’m Sasha, from Russia =)
I read you book “four hour work week”
You write about the course “how to sell drugs for profit and fun”
Do you still have this document?
We can translate and adapt this course for Russia.
I think we can sold many copies of that course.
Pleas answer me to emal.
Just say “YES”, we’ll do the rest!
=)))
Wanna take a look at a start up winner with global scalability? Green tech with humanitarian application…. Necessary!
Hi Tim,
Loved this podcast and will read all the books you’ve recommended. Some I have read and others have been on my list forever. Love to hear more like this: maybe have a hedge fund manager or VC investor on as guest?
The in-depth inbetweenisodes are fantastic. This may not be something I’d use now, but incredibly thorough and useful advice.
Others should check out Episode 29 with Brendan Moyihan – http://cl.ly/dSeb
(and my semi-legible notes – http://cl.ly/dSlT)
I’d love to see more of these on other topics – dog training maybe? 😉
Not written with sharing in mind (excuse comprehension), but here are my notes for this episode if others found them useful: http://cl.ly/dSLZ
Hello Tim,
It would be great if you could dedicate a podcast to investing with one of your investor-friend so we can pick his/her brain.
Thanks, Rodolphe
In terms of options trading, you should check out what Tom Sosnoff is doing with TastyTrade. He is the world-wide option expert, and his live Internet 24/5 show has an enormous number of followers. As a matter of fact, you should probably interview him for a podcast.
Ya know, I actually miss you blogging. This is better than the podcast, in general, because I hear what you are saying. Not someone else talking or answering questions. I read faster than I listen- podcasts are a bit boring having to wait for the response. So more like this. Or blog posts woild be better.
Hi Tim, Great podcast! Which, if any, of the books you mentioned, or perhaps you know of and did not mention, deal with contrarian investing from both the practical and physiological perspectives? Thank you, John R.
“Know thyself.” Great podcast, and in my opinion, “know thyself” was the best quote. Perhaps another great podcast topic would be “How to know thyself.” You obviously have keen insights into your own strengths and weaknesses, which I think I lack. Would love to hear your thoughts, hacks, etc, into how to know thyself. Cheers.
really like the idea of setting aside the MBA money for alternate investment opportunities.
Hey Tim, is there a service like wealthfront for people outside U.S.?
Great podcast, thank you for all the book recommendations! I would love to hear more on this topic, in fact it’s my favorite. Would be cool if you could interview investor friends and maybe Ray Dalio or Stanley Druckenmiller. I’m also interested in your investing approach with startups. I’ve read investing books by Benjamin Graham, Philip Fisher, Tony Robbins, etc. So I’m interested in steps to get started as investor. Thanks!
Let mr Ferris know, when he comes out of the US marketing and light american dream investing and business startup,
can he point out some serious advice and books(if he thinks they exist) for a business to survive in a European country and to be certain Greece?
Dark side of business politics will never be touched by MrFerris even if it is the real world.Let me know when he gets out of the sophisticated productivity stuff
and the safety that the US entrepreneurship provides to him.In this case let him know that he is another failure but reasonable man.
And try a business experiment in european world mr Ferris and let us see if a blogger with life-hacking tips can survive in a environment not built around United States safety investing-business world.
That being said, take your valuable business tips into your a.. , i let you know that your blog is my favorite mental masturbation of the day meaning you are successful.
Can you post the books you mentioned in the show notes please?
Any transcripts of the podcasts available…?
People are so often afraid of investing, but are happy to have the keys to their financial future over to someone else. As with anything starting out by educating yourself def helps.
First time listener. Liked the podcast and would love to hear more! Any suggestions on ways to understand one’s behavior traits and their impact on investing?
Tim, and others who frequest these boards,
What is your opinion about the Rich Dad, Poor Dad series of books by Robert Kiyosaki?
I read his first book, Rich Dad, Poor Dad, a few months ago and I am working through his book on investing (Rich Dad’s Guide to Investing). I really enjoy both books and feel as if I’ve gotten a lot out of the readings. However, his books were not in your recommendations and I’ve never heard them discussed in the past. Do you have an opinion on this information? Am I getting bad investment advice?
Thank you for the help.
-Paul.
Tim,
How can I be an investor in Wealthfront. I registered and played around on the site. I think it is very clever and innovative.
As a fellow advisor/investor I found it very refreshing hearing about how you honed your skills as an investor. Thanks for sharing Tim.
Tim As usual your podcast is full of information which is normally not available or people end up paying for the sessions with professional speakers. The whole thing that strikes me the most is that although what you say is so simple and you make it a point to simplify it by breaking it into steps but despite that not many people are able to replicate it.
I think my main focus will be on implementation of your techniques more than anything else
This was awesome episode. Didnt rember the books but come back to check them. Thank you Tim.
Hi Tim,
Thanks for the bibliography.
I am 100 pages into Tony Robbin’s book after listening his interview on your podcast and I have already known a few things I wasn’t ware before.
As I am trying to get my head around on how to start investing, it feels that this short podcast and the mentioned bibliography might be a small treasure for me.
Hey Tim – this is a great episode! I’m hoping we can have more of these, would love to have more of your thoughts on investing approaches. Perhaps zero-ing on topics such as being a beginning invester in the startup space with little capital (I’m sure this is a predicament many of your listeners are in, other than myself).
Thanks!
Hello, everyone.
Some of you will find this useful: To access the Direct Indexing features on Wealthfront, it says you need to have $100,000 managed by Wealthfront. However, if you do not have that much cash to put into an account there, you can still select the option for Direct Indexing and setup automatic monthly deposits.
I was able to turn on Direct Indexing on my account with only $500 monthly deposits. (I’m not sure how low it will let you go, but this costs much less upfront to turn on the benefit).
Happy investing!
Investing is something I’ve always wanted to do full time when I get enough cash. Thanks Tim!
Very thorough review of investing principles. Appreciate the open mindedness regarding investing strategies.
Hi Tim, listening to this episode and the last 90 minutes or so is dead air. Are you trying to see if we are paying attention or perhaps something got dorked in post? Anyway thought you should know.
good
Tim, I did an investing experiment. I used your referral link to open a Wealthfront account with $15,000. I watched the performance against my other broker-managed accounts at a very large national (and evil) investment bank. During the experiment, the funds at evil bank grew 19%. The funds at Wealthfront grew 11% over the same period. Unless anyone has thoughts on why I should not pull the plug, I’ll be shutting down my Wealthfront account and ending this experiment. The evil bank won?
Tim, great postcard. Currently reading Tony Robbins book on Money master the game and find this postcard just on time. Thank you for always sharing such a valuable information.
Hello, Tim and others! I am a classical musician who has tried starting my orchestra. Unlike the tech industry, there are no investment funds for classical music. (Of course, classical music has historically favored the nonprofit model, although a handful of us are interested in meeting a market need rather than providing a public good.) I think we would see a lot more innovation in the music field if some capital were available for startups. With technology, concerts are also scalable and profitable in way not previously possible. Does anyone have any advice for starting a fund? Thank you!
Is there an alternative to wealth front you could recommend for people in Australia? Thanks 🙂
Is there an alternative to wealth front for people outside the US that you’d recommend? Specifically, Australia?
Good investors consistently work at it. They study and they learn. Thanks for a great post.
Hi Tim, thanks for this great episode. I’m listening to it now in 2020, so given the episode is 5 years old I was wondering if you would update any of your books or suggestions on becoming a better investor? Thanks
Awesome pobcast and very informative! I like it!