Ep 375: How Comparison Steals Joy From Self-Achievement

Sean: You don't need to tell us the number, but how many months of your personal expense would that be before you finally threw in the towel?

Dave: Yeah, it's a little different than that. The way I do things is I and I advocate this actually for people that are looking for yield and chasing opportunities, investment opportunities. I think that fundamentally when you chase investment opportunity, I think you're actually missing the boat. I think you're fundamentally potentially making the ultimate sin, which is trying to keep up with the Joneses. And I think trying to keep up with the Joneses is the most insidious thing you can do in your life. It's the thing that frankly contributes to, I think, the most unhappiness, because then it results in situations where no matter how much money or how much power or how much prestige you have, you're always worrying about what the Joneses are up to. You're always worried about, do they have more money than me? Are they more powerful than me? Are they more famous than me? Do they have more followers than me? And I think that fundamentally becomes a root of unhappiness.

Dave: And I think that a lot of people, particularly on the investing side, get caught up in, 'hey, my buddy at the country club made 10x money or 100x money on some bitcoin investment. I should be doing the same thing.' Or 'my neighbor down the street was telling me about some stock he bought and that really chops me because like I should about that stock.' Right? So the way I think about the amount that you really need to retire and walk away is your personal cost of capital. And everyone's personal cost of capital is different. I happen to be in a situation where I actually grew up in poverty and I know what it's like to make $3.35 an hour cleaning toilets because that's what I did. I worked at Safeway and I was a bagger and I was a janitor making $3.35 an hour.

Dave: And so I always thought about, okay, how much money do I need, Dave Liu, how much money do I need to live and what rate of return do I need to generate in order to hit my personal cost capital? And the reality is, for me, even though I was this big managing director and co-head of an industry group, I lived and continue to live a very modest life. I remember when many of my other managing directors were driving, you know, seven series, BMW, Mercedes, Ferraris, high-speed sports cars. I was driving around in a $20,000 Honda S2000, and many of my partners were making fun of me. Like, dude, like, what are you doing? Like, why don't you go buy a Lamborghini or a Ferrari? And I said, No, I don't want to. Because at some point I want to be able to walk away from this place and I want to make sure that I have a certain lifestyle that I can finance through a modest rate of return on my portfolio without having to work, without having to deal with the rat race.

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